3.16 Equity

3.16.1 Share capital

Share capital is recognized in the amount specified in the parent’s by-laws and registered in the National Court Register.

3.16.2 Supplementary capital

Supplementary capital is created and distributed in accordance with the legal regulations in the country of the company’s domicile (in Poland, in accordance with the provisions of the Code of Commercial Companies (consolidated text: Journal of Laws of 2013, item 1030)) and the by-laws of the PZU Group companies.

3.16.3 Revaluation reserve

Revaluation reserve includes the effects of:

  • measurement of financial assets classified as available for sale;
  • measurement of the value of property to their fair value as at the date of their reclassification from property used for internal purposes to investment property.

3.16.4 Actuarial gains and losses related to provisions for employee benefits

This item includes actuarial gains and losses resulting from an increase or a decrease in the present value of defined benefit liabilities due to changes in actuarial assumptions and ex post adjustments thereto. The item includes gains and losses resulting from changes in demographic assumptions (such as mortality, employee turnover ratio) as well as financial assumptions (such as the discount rate or the projected pay growth rates).

3.16.5 Exchange differences from translation

This item includes differences arising from translation of assets and liabilities of foreign subsidiaries into the Polish currency at the average exchange rate determined for the currency by the National Bank of Poland (“NBP”) as at the end of the reporting period as well as items of the income statement and other comprehensive income at a rate being the arithmetic mean of the average NBP exchange rates as at the end of each month of the financial year.

3.16.6 Undistributed profit/uncovered loss

Undistributed profit/uncovered loss includes:

  • z previous year net profit which has not been distributed by the General Meeting / Shareholders’ Meeting;
  • current year net profit/loss;
  • uncovered net loss.

Net profit distribution (or loss coverage) of the parent and companies of PZU Group takes place only with respect to the net profit (loss) disclosed in the company’s separate financial statements prepared according to the local GAAP effective in the country of residence of the given company.

3.16.7 Non-controlling interest

Non-controlling interest represents the part of a subsidiary’s capital which may not be attributed to the parent, whether directly or indirectly. Non-controlling interest is measured as the proportional share in identifiable net assets of the subsidiary.