ING Direct 2015 Annual Report Download - page 147

Contents
Who we are
Report of the
Management
Board
Corporate
Governance
Consolidated
annual accounts
Parent company
annual accounts
Other
information
Additional
information
Notes to the Consolidated annual accounts of ING Bank - continued
On 7 April 2015, the merger between ING Vysya and Kotak was completed and the legal entity ING Vysya Bank ceased to exist. ING
was the largest shareholder in ING Vysya, with 42.7% interest. ING Vysya was merged into Kotak. Shareholders of ING Vysya received
0.725 shares in Kotak for each ING Vysya share. As a result, ING holds a stake of 6.5% in the combined company, which operates
under the Kotak brand. ING’s holding in the combined company will be subject to a 1 year lock-up period from the closing of the
transaction. The transaction resulted in a gain of EUR 367 million in 2015 and is recognised in ‘Share of result from associates and joint
ventures’. The transaction did not materially impact the shareholder’s equity of ING Group. As at 31 December 2015, ING Group
accounts for the investment in Kotak as an Available-for-sale equity investment. Reference is made to Note 5 ‘Investments’, Note 7
‘Investments in associates and joint ventures’ and Note 11 ‘Assets held for sale’.
2014
In the first quarter of 2014, changes to the governance structure of ING Vysya were implemented in order to better align with
prevailing regulations. The regulatory requirements necessitated some governance changes. As part of that, ING reduced the number
of directors appointed by ING in ING Vysya Bank’s Board of Directors to be proportionate to its shareholding. Although ING Bank’s
economic interest of approximately 43% remained unchanged, as a result of these governance changes, ING Bank no longer had a
majority representation in the Board of Directors and influence on ING Vysya’s operations were aligned with its shareholding interest.
As a result, ING Bank no longer had effective control over ING Vysya and therefore, as of 31 March 2014 ING Vysya was deconsolidated
and accounted for as an associate under equity accounting. Before the changes in the governance structure ING Bank had substantial
additional powers, including the majority in the Board of Directors and power over operational decision making; as a result, ING Vysya
was consolidated by ING. After the deconsolidation, the investment in ING Vysya was recognised as an Investment in associates and
joint ventures at its fair value at 31 March 2014 of EUR 617 million. The profit and loss account of 2014 included the consolidated result
of ING Vysya until the deconsolidation and the result upon deconsolidation of EUR 202 million. The result upon deconsolidation was
recognised in ‘Result on disposal of group companies’.
Poland Pension Fund
In 2015, the remaining stake in the Polish Pension Fund, was sold resulting in a gain on the investment in associate held for sale of
EUR 25 million which is recognised in ‘Share of results from associates and joint ventures’ in the the profit and loss account. Reference
is made to Note 7 ‘Investments in associates and joint ventures’ and Note 11 ‘Assets held for sale’.
In 2014, NN Group reached an agreement with ING Bank Slaski to acquire the remaining 20% stake in the Polish Pension Fund,
Powszechne Towarzystwo Emerytalne S.A (ING PTE) in which NN Group held 80% of the shares for a consideration of
PLN 210 million (approximately EUR 48 million at prevailing exchange rates at that time). As previously announced, the parties
entered into a non-binding agreement in May 2014, in line with the EC restructuring plan which requires ING Group to divest its
insurance and investment management businesses. The purchase price was supported by a fairness opinion and was subject to
adjustments for dividends paid before closing the transaction.
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