Opinion and Report of the Independent Auditor

Transcription

1 Nordea Bank Polska S.A. Opinion and Report of the Independent Auditor Financial Year ended 31 December 2008 KPMG Audyt Sp. z o.o. The opinion contains 2 pages The report supplementing the auditor s opinion contains 11 pages Opinion of the independent auditor and report supplementing the auditor s opinion on the financial statements for the financial year ended 31 December 2008 KPMG and the KPMG logo are registered trademarks of KPMG International, a Swiss cooperative.

2 This document is a free translation of the Polish original. Terminology current in Anglo-Saxon countries has been used where practicable for the purposes of this translation in order to aid understanding. The binding Polish original should be referred to in matters of interpretation. OPINION OF THE INDEPENDENT AUDITOR To the General Meeting of Nordea Bank Polska S.A. We have audited the accompanying financial statements of Nordea Bank Polska S.A. seated in Gdynia, ul. Kielecka 2 ( the Bank ), which comprise the balance sheet as at 31 December 2008, with total assets of and total liabilities and equity of PLN 15,764,109 thousand, the profit and loss account for the year then ended with a net profit of PLN 136,420 thousand, the statement of changes in equity for the year then ended with an increase in equity of PLN 139,138 thousand, the cash flow statement for the year then ended with a decrease in cash amounting to PLN 394,319 thousand, and notes to the financial statements, comprising of a summary of significant accounting policies and other explanatory notes. Management s Responsibility for the Financial Statements Management of the Bank is responsible for the accuracy of the accounting records and the preparation and fair presentation of these financial statements in accordance with International Financial Reporting Standards, as adopted by European Union and with other applicable regulations. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatements, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. Auditor s Responsibility Our responsibility, based on our audit, is to express an opinion on these financial statements, and whether the financial statements are derived from properly maintained accounting records. We conducted our audit in accordance with section 7 of the Accounting Act dated 29 September 1994 (Official Journal from 2002, No. 76, item 694 with amendments) ( the Accounting Act ), the professional standards established by the Polish National Council of Certified Auditors and International Standards on Auditing. Those standards require that we comply with relevant ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements and the accounting records from which they are derived are free of material misstatements. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on our judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the entity s preparation and fair presentation of the financial statements in order to design audit 1

3 procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity s internal control. An audit also includes evaluating the appropriateness of accounting principles used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Opinion In our opinion, the accompanying financial statements of Nordea Bank Polska S.A. have been prepared and present fairly in all material respects the financial position of the Bank as at 31 December 2008 and of its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards as adopted by the European Union, are in compliance with the respective regulations and the provisions of the Bank s Statute that apply to the Bank s financial statements and have been prepared from accounting records that in all material respects have been properly maintained. Other Matters As required under the Accounting Act we also report that the Report on the Bank s activities includes, in all material respects, the information required by Art. 49 of the Accounting Act and by the Decree of the Ministry of Finance dated 19 October 2005 on current and periodic information provided by issuers of securities (Official Journal from 2005, No 209, item 1744) and the information is consistent with the financial statements. Signed on the Polish original... Certified Auditor No /8143 Paweł Nowosadko, Manager Signed on the Polish original... For KPMG Audyt Sp. z o.o. ul. Chłodna 51; Warsaw Certified Auditor No. 796/1670 Bogdan Dębicki, Member of the Management Board Signed on the Polish original... For KPMG Audyt Sp. z o.o. ul. Chłodna 51; Warsaw David Pozzecco, Partner 24 February 2009 Warsaw, Poland 2

4 Nordea Bank Polska S.A. Report supplementing the auditor s opinion on the financial statements Financial Year ended 31 December 2008 KPMG Audyt Sp. z o.o. The report supplementing the auditor s opinion contains 11 pages Report supplementing the auditor s opinion on the financial statements for the financial year ended 31 December 2008

5 This document is a free translation of the Polish original. Terminology current in Anglo-Saxon countries has been used where practicable for the purposes of this translation in order to aid understanding. The binding Polish original should be referred to in matters of interpretation. Contents 1 General General information about the Bank Company name Registered office Registration in the National Court Register Tax Office and Provincial Statistical Office registration Auditor information Legal status Share capital Related parties Management of the Company Scope of activities Prior period financial statements Audit scope and responsibilities 5 2 Financial analysis of the Bank Summary of the financial statements Balance sheet Profit and loss account Selected financial ratios Interpretation of selected financial ratios 9 3 Detailed report Proper operation of the accounting system Verification of assets and liabilities Compliance with banking regulations Audit materiality Notes to the financial statements Report on the Bank s activities Information on the opinion of the independent auditor 11 2

6 1 General 1.1 General information about the Bank Company name Nordea Bank Polska S.A Registered office ul. Kielecka 2, Gdynia Registration in the National Court Register Registration court: District Court in Gdańsk, VIII Commercial Department of the National Court Register Date: 26 June 2001 Registration number: KRS Tax Office and Provincial Statistical Office registration NIP number: REGON: Auditor information Name: KPMG Audyt Sp. z o.o. Registered office: Warsaw, Address: ul. Chłodna 51, Warsaw Registration number: KRS Registration court: Share capital: PLN 125,000 NIP number: District Court for the Capital City Warsaw in Warsaw, XII Commercial Department of the National Court Register; KPMG Audyt Sp. z o.o. is entered in the register of entities authorised to audit financial statements under number Legal status Share capital The Bank was established for an indefinite period under the terms of its Statute dated 8 November 1991 The share capital of the Bank amounted to PLN 227,593,500 as at 31 December 2008 divided into 45,518,700 ordinary shares with a nominal value of PLN 5 each. On 4 April 2008 the increase of share capital by PLN 504,345 thousand was registered, as a result of the issue of 100,867 ordinary bearer shares L series offered in a private subscription to the Commune of City of Gdynia. 3

7 As at 31 December 2008, the shareholder structure was as follows: Nominal value Percentage of Number of Voting rights of shares share capital Name of the Shareholder shares (%) PLN '000 (%) Nordea Bank AB (publ) 45,050, % 225,254, % Others< 5% 467, % 2,338, % 45,518, % 227,593, % Related parties The Bank is a member of the Nordea Bank AB Group Management of the Company The Management Board is responsible for management of the Bank. At 31 December 2008, the Management Board of the Bank comprised the following members: Włodzimierz Kiciński President of the Management Board, Sławomir Żygowski Vice President of the Management Board, Janne Juhana Hirsto Management Board Member, Jacek Kalisz Management Board Member, Tomasz Misiak Management Board Member, Bohdan Tillack Management Board Member. On 30 April 2008, Mr Wojciech Papierak resigned from the position of Vice President of the Management Board effective from 30 June On 21 August 2008, the Supervisory Bard of the Bank appointed Mr Tomasz Misiak as the Vice President of the Management Board effective from 1 September On 29 December 2008, Mr Janne Juhana Hirsto resigned from the position of Vice President of the Management Board effective from 31 December On 13 January 2009, the Supervisory Board of the Bank appointed Mrs Agnieszka Domaradzka as the Vice President of the Management Board effective from 14 January Scope of activities The business activities listed in the Bank's Statute include the following: receiving and maintaining current and term deposits, maintaining other bank accounts, granting loans, granting and confirming guarantees and letters of credit, issuing banking securities, performing cash settlements, performing FX operations, agency services for cash transfers by residents abroad and settlements with non residents in Poland, performing particular bank activities on behalf of other banks in the area determined by the Bank s Statue, performing cheque and bill of exchange operations, 4

8 issuing payment cards and processing card operations, performing term financial operations, trading in receivables, safekeeping of goods and securities as well as providing access to safe deposit-boxes, performing operations related to the issue of securities. 1.4 Prior period financial statements The financial statements for the period ended 31 December 2007 were audited by KPMG Audyt Sp. z o.o. and received an unqualified opinion. The financial statements were approved at the General Meeting on 14 June 2008 where it was resolved to allocate the profit for the prior financial year of PLN 70,532 thousand to the reserve capital. The closing balances as at 31 December 2007 have been properly recorded as the opening balances of the audited year. The financial statements were submitted to the Registry Court on 24 June 2008 and were published in Monitor Polski B No on 20 November Audit scope and responsibilities This report was prepared for the General Meeting of Nordea Bank Polska seated in Gdynia, ul. Kielecka 2, and relates to the financial statements comprising: the balance sheet as at 31 December 2008 with total assets and total liabilities and equity of PLN 15,764,109 thousand, the profit and loss account for the year then ended with a net profit of PLN 136,420 thousand, the statement of changes in equity for the year then ended with an increase in equity of PLN 139,138 thousand, the cash flow statement for the year then ended with a decrease in cash amounting to PLN 394,319 thousand and notes to the financial statements, comprising of a summary of significant accounting policies and other explanatory notes. The audited Bank prepares its financial statements in accordance with International Financial Reporting Standards as adopted by the European Union on the basis of the decision of General Shareholders Meeting of Nordea Bank Polska S.A. dated 12 May The financial statements have been audited in accordance with the contract dated 5 January 2009, concluded on the basis of the resolution of Supervisory Board of Nordea Bank Polska S.A. dated 23 October 2008 on the appointment of the auditor. We conducted the audit in accordance with section 7 of the Accounting Act, the professional standards established by the Polish National Council of Certified Auditors and International Standards on Auditing. We have conducted the interim audit in the Bank s head office (and branches) during the period from 20 October 2008 to 7 November We audited the financial statements during the period from 12 January 2009 to 20 February Management of the Bank is responsible for the accuracy of the accounting records and the preparation and fair presentation of the financial statements in accordance with International Financial Reporting Standards as adopted by the European Union, and with other applicable regulations. 5

9 Management of the Bank and members of the Supervisory Board are obliged to ensure that the financial statements and the Report on the Bank s activities are in compliance with the requirements set forth in the Accounting Act. Our responsibility is to express an opinion, and to prepare a supplementing report, on the financial statements, and whether the financial statements are derived from properly maintained accounting records, based on our audit. Management of the Bank submitted a statement dated the same date as this report as to the true and fair presentation of the financial statements presented for audit, which confirmed that there were no undisclosed matters which could significantly influence the information presented in the financial statements. All our requests for additional documents and information necessary for expressing our opinion and preparing the report have been fulfilled. KPMG Audyt Sp. z o.o., the members of its Management Board and Supervisory Board and other persons involved in the audit of the financial statements of the Bank fulfil independence requirements. The scope of the work planned and performed has not been limited in any way. The method and scope of our audit is detailed in working papers prepared by us and retained in the offices of KPMG Audyt Sp. z o.o. 6

10 2 Financial analysis of the Bank 2.1 Summary of the financial statements Balance sheet ASSETS % of total % of total PLN '000 PLN '000 Cash and cash equivalents 214, , Loans and advances to banks 201, , Loans and advances to customers 13,676, ,635, Financial assets carried at fair value through profit and loss 1,263, , Financial assets held for trading 69, , Financial assets designated at fair value through profit or loss upon initial recognition 1,194, , Intangible assets 44, , Property and equipment 136, , Deferred tax assets 42, , Other assets 185, , TOTAL ASSETS 15,764, ,239, EQUITY AND LIABILITIES % of total % of total Liabilities PLN '000 PLN '000 Deposits from banks 5,853, ,681, Deposits from customers 8,386, ,334, Debt securities issued 1, , Financial liabilities carried at fair value through profit and loss 92, , Financial liabilities held for trading 92, , Other liabilities 121, , Deffered tax liabilities 16, , Subordinated liabilities 221, , Provisions 10, , Total liabilities 14,704, ,318, Equity 923, , Share capital 227, , Other reserves 695, , Retained earnings 136, , Total equity 1,059, , TOTAL LIABILITIES AND EQUITY 15,764, ,239,

11 2.1.2 Profit and loss account PLN '000 PLN '000 Interest income 744, ,711 Interest expense (444,864) (242,256) Net interest income 300, ,455 Fee and commission income 82,355 75,796 Fee and commission expense (25,841) (18,441) Net fee and commission income 56,514 57,355 Net income from financial instruments carried at fair value 118,357 84,730 Other operating income 12,185 10, ,542 95,596 Operating income 487, ,406 General expenses (283,944) (212,209) - personnel expenses (134,663) (101,481) - other administration expenses (149,281) (110,728) Depreciation (23,861) (21,821) Operating expenses (307,805) (234,030) Net impairment loss on financial assets (2,108) (3,842) Profit before income tax 177,215 90,534 Income tax (40,795) (20,002) Profit for the period 136,420 70,532 Basic and diluted earnings per share (PLN)

12 2.2 Selected financial ratios Total assets 15,764,109 10,239,448 6,918,148 Gross profit 177,215 90,534 67,927 Net profit 136,420 70,532 50,068 Shareholders' equity * 923, , ,091 Return on equity 12.9% 8.3% 9.6% Receivables to total assets 88.0% 87.0% 87.0% Income generating assets to total assets 97.4% 97.4% 97.0% Interest bearing liabilities to total liabilities 93.2% 89.9% 90.0% * excluding current-year net profit 2.3 Interpretation of selected financial ratios The total balance sheet as at 31 December 2008 was 54% higher than the total balance sheet as at 31 December 2007 and amounted to PLN 15,764,109 thousand. The largest increase in assets by PLN 5,040,298 thousand related to receivables from clients which increased by 58%. The largest increase in liabilities and equity of PLN 3,172,242 thousand (increase by 118%) related to liabilities to banks. The net profit for the period from 1 January 2008 to 31 December 2008 amounted to PLN 136,420 thousand representing an increase on the corresponding year of PLN 65,888 thousand (93%). Total equity as at 31 December 2008 excluding current year net profit amounted to PLN 923,564 thousand which is 9% higher than the equity as at 31 December

13 3 Detailed report 3.1 Proper operation of the accounting system The Bank maintains current documentation describing the applied accounting principles, adopted by the Management Board, to the extent required by Art. 10 of the Accounting Act. During the audit of the financial statements, we tested, on a sample basis, the operation of the accounting system. Our assessment covered in particular: appropriateness and consistency of the accounting principles used, correctness of the documentation of business transactions, fairness, accuracy and verifiability of the books of account, including the matching of accounting entries with supporting documentation and the financial statements, compliance of the adopted policies relating to safeguarding of accounting records, books of account and the financial statements with the Accounting Act. On the basis of the work performed we have not identified material irregularities in the accounting system which have not been corrected and that could have a material impact on the financial statements. Our audit was not conducted for the purpose of expressing a comprehensive opinion on the operation of the accounting system. 3.2 Verification of assets and liabilities The Bank performed a verification of assets and liabilities and in accordance with the requirements and time frame specified in Art. No. 26 of the Accounting Act. Count differences have been recorded in the period covered by the financial statements. 3.3 Compliance with banking regulations Based on our audit we have not identified any significant deviations in the bank s compliance with the banking regulatory norm pertaining among other to loan concentration, obligatory reserve and capital adequacy ratio. 3.4 Audit materiality We have planned and applied an appropriate level of precision in conducting our audit procedures in order to obtain reasonable assurance about whether the financial statements taken as a whole are free of material misstatements. 3.5 Notes to the unconsolidated financial statements All information included in the notes to the financial statements, comprising of a summary of significant accounting policies and other explanatory notes, is, in all material respects, presented accurately and completely. This information should be read in conjunction with the financial statements taken as a whole. 10

14 3.6 Report on the Bank s activities The Report on the Bank s activities includes, in all material respects, information required by Art. 49 of the Accounting Act and by the Decree of the Ministry of Finance dated 19 October 2005 on current and periodic information provided by issuers of securities (Official Journal from 2005, No 209, item 1744) and the information is consistent with the financial statements. 3.7 Information on the opinion of the independent auditor Based on our audit of the financial statements as at and for the year ended 31 December 2008, we have issued an unqualified opinion. Signed on the Polish original... Certified Auditor No /8143 Paweł Nowosadko, Manager Signed on the Polish original... For KPMG Audyt Sp. z o.o. ul. Chłodna 51, Warsaw Certified Auditor No. 796/1670 Bogdan Dębicki, Member of the Management Board Signed on the Polish original... For KPMG Audyt Sp. z o.o. ul. Chłodna 51; Warsaw David Pozzecco, Partner 24 February 2009 Warsaw, Poland 11