2.3 Changes in the scope of consolidation and structure of the PZU Group

2.3.1 Changes in consolidation of entities and investment funds

Information concerning changes in the scope of consolidated entities as well as those measured using the equity method since 1 January 2013 and their effect on these consolidated financial statements has been presented in Section 3.4.1.

2.3.2 Acquisition of shares in EMC Instytut Medyczny

After the acquisition of shares at the stock exchange on 18 June 2013, the stake of the PZU Group entities (mainly investment funds managed by TFI PZU) went up to 1,969,817 shares in EMC Instytut Medyczny SA (“EMC”), accounting for 23.66% of interest in the share capital of that company and 20.04% of votes at its General Shareholders’ Meeting.

Therefore, EMC was measured using the equity method. The acquisition of EMC was accounted for on the basis of the consolidated financial statements of EMC prepared as at 30 June 2013. Only EMC shares held by consolidated investment funds were measured using the equity method. Upon measurement using the equity method, the aforesaid shares represented 15.57% of the interest in the capital of EMC and 13.19% of votes at the general meeting.

Since the date of EMC’s measurement using the equity method, the PZU FIZ AN BIS 2 investment fund has been increasing the number of EMC’s shares held, by purchasing additional shares in stock market transactions and from non-consolidated PZU Group investment funds.

As at 31 December 2013, all EMC shares held by PZU Group entities were in the portfolio of the PZU FIZ AN BIS 2 fund, which owns 2,487,268 shares in EMC representing 29.87% of the company’s share capital and 25.31% of votes at the general meeting.

On 23 December 2013, PZU FIZ AN BIS 2 entered into a promised contract providing for the acquisition of 948,370 newly issued shares in EMC with the par value of PLN 4.00 per share and the issue price of PLN 19.50 per share. The total acquisition price for the newly issued shares was PLN 18,493 thousand. As the increase in capital had not been registered by 31 December 2013, the aforesaid amount has been presented as receivables in the statement of financial position.

Accounting for the acquisition of EMC shares and measurement using the equity method have been presented in Section 13.1.

2.3.3 Increased interest in the capital of Armatura Kraków SA

In the year ended 31 December 2013, the consolidated PZU FIZ AN BIS 2 investment fund increased its interest in the capital of Armatura Kraków SA through settlement of the following transactions:

  • On 28 October 2013 – under the tender offer of 30 August 2013 – by 15,129,960 shares;
  • On 31 October 2013 – in stock market transactions – by 1,217,197 shares;
  • On 18 December 2013 – under the tender offer of 6 November 2013 – by 7,078,381 shares.

As a result of the aforesaid transactions, as at 31 December 2013, PZU FIZ AN BIS 2 held the total of 75,125,538 shares representing 92.75% of the share capital of Armatura Kraków SA and 92.75% of votes at the General Meeting.

As a result of squeeze-out, on 23 January 2014 PZU FIZ AN BIS 2 acquired 5,517,888 shares in Armatura Kraków SA. As a result of the aforesaid transaction, PZU FIZ AN BIS 2 held the total of 80,643,426 shares representing 99.56% of the share capital of Armatura Kraków SA and 99.56% of votes at the General Meeting.

On 9 January 2014, an application for the authorization to restore the document form of the shares in Armatura Kraków, i.e. cancellation of their dematerialization, was filed with the Polish Financial Supervision Authority (“PFSA”). On 18 February 2014, PFSA granted its authorization for share dematerialization. Pursuant to the aforesaid decision, as of 10 March Armatura Kraków was no longer subject to the obligations arising from the Act on public offering, conditions governing the introduction of financial instruments to organized trading, and public companies of 29 July 2005 (Journal of Laws of 2013, item 1382).

2.3.4 Sale of shares in KGJK

On 24 September 2013, PZU FIZ AN BIS 2 sold 310,620 shares in its associate, KGJK, representing 37.525% of its share capital, for PLN 24,850 thousand. After the aforementioned transaction has been settled, the PZU Group entities do not hold any shares in KGJK, which no longer has the status of an associated entity in the PZU Group.

The profit on sale of KGJK’s shares, in the amount of PLN 8,263 thousand, has been presented under “Net profit/loss on realization and impairment losses on investments”.

2.3.5 Establishment of PZU Finanse Sp. z o.o.

On 30 October 2013, a new company, PZU Finanse Sp. z o.o., was established. The share capital of the new company is PLN 50 thousand and it is divided into 100 shares of PLN 500 each. All shares were acquired by PZU. On 8 November 2013, the company was entered into the National Court Register.