In 2013 all PZU subsidiaries have been included in consolidation.
These consolidated financial statements include data of the parent company and its subsidiaries, after elimination of intercompany transactions.
The financial statements of the subsidiaries are prepared for the same reporting period as the financial statements of the parent, with a proviso that the financial statements of the consolidated investment funds are prepared as at the date of publication of the last official valuation of units in or investment certificates issued by the funds, which serves as the basis for recognition of measurement of the funds in the financial statements of the consolidated PZU Group entities.
The principles applicable to translation of assets, liabilities and comprehensive income of foreign subsidiaries have been presented in Section 3.16.5.
3.4.1 Change in the principles of consolidation
In the previous years till the end of 2012, the PZU Group included all material subsidiaries in the consolidation. Materiality was determined on the basis of the revenue earned, absolute value of the profit/loss and balance sheet total.
Effective from 1 January 2013 the Group discontinued the materiality criterion and as a consequence, as of 1 January 2013, all PZU subsidiaries have been included in consolidation, i.e. the following were included in consolidation:
- Towarzystwo Funduszy Inwestycyjnych PZU SA;
- PZU Asset Management SA;
- PZU Pomoc SA;
- Międzyzakładowe Pracownicze Towarzystwo Emerytalne PZU SA;
- PrJSC IC PZU Ukraine Life Insurance;
- UAB PZU Lietuva Gyvybes Draudimas;
- Ipsilon Sp. z o.o.;
- Ipsilon Bis SA;
- Omicron SA;
- LLC SOS Services Ukraine;
- PZU FIZ Sektora Nieruchomości;
- PZU FIZ Sektora Nieruchomości 2;
- PZU FIZ Sektora Nieruchomości 3;
- PZU FIZ Aktywów Niepublicznych BIS 1;
- PZU FIZ Aktywów Niepublicznych BIS 2;
- PZU Energia Medycyna Ekologia;
- PZU Dłużny Rynków Wschodzących;
- PZU FIZ Forte;
- PZU FIZ Aktywów Niepublicznych RE Income.
Consolidation denotes that the assets and liabilities of the entities are recognized under appropriate items of these consolidated financial statements, instead of presentation of the value of investments in the subsidiary (companies: at cost less impairment losses; investment funds: at fair value) under appropriate items of “Financial assets”.
In the previous years, until the end of 2012, the materiality criterion also applied to associates; as of 1 January 2013, when the materiality criterion was discontinued, the following companies were measured using the equity method:
- Kolej Gondolowa Jaworzyna Krynicka SA (information about further disposal of the entity is described in section 2.3.4);
- GSU Pomoc Górniczy Klub Ubezpieczonych SA.
Measurement using the equity method denotes that the value of investments in the associate, measured using the equity method, is presented as a separate item of assets, i.e. “Entities measured using the equity method”, instead of their recognition at cost less impairment losses under “Financial assets – Financial instruments available for sale”.
The aforesaid changes were recognized in the consolidated financial statements on 1 January 2013 and the effects (of the balance sheet measurement of those assets as at 31 December 2012 and the net assets of those entities as at 1 January 2013) were charged to the profit/loss.
As a result of consolidation of subsidiaries (companies and investment funds), the balance of cash increased by PLN 479,751 thousand (“increase in cash due to changes in the scope of consolidation” in the consolidated statement of cash flows).
18.104.22.168 Subsidiaries subject to consolidation
As at 1 January 2013, the differences between the net assets of the companies included in the consolidation and the carrying amount of investments in a given entity are presented in the consolidated financial statements as follows:
- Gains - under “Other operating income”;
- Losses - under “Other operating expenses”
|Reconciliation of the effect of consolidation of subsidiaries from 1 January 2013||Assets||Liabilities||Net assets||Carrying amount of shares (at historical cost including impairment)||PZU Group’s share in the equity||PZU Group’s share in net assets||Impact on the consolidated profit/loss of the PZU Group|
|Towarzystwo Funduszy Inwestycyjnych PZU SA||71 421||27 636||43 785||24 793||100.00%||43 785||18 992|
|PZU Asset Management SA||12 621||1 982||10 639||4 642||100.00%||10 639||5 997|
|Międzyzakładowe Pracownicze Towarzystwo Emerytalne PZU SA||1 578||226||1 352||500||100.00%||1 352||852|
|Total – impact on other operating income||25 841|
|PrJSC IC PZU Ukraine Life Insurance||32 884||26 105||6 779||25 921||100.00%||6 779||(19 142)|
|UAB PZU Lietuva Gyvybes Draudimas||79 680||52 639||27 041||40 235||99.34%||26 863||(13 372)|
|PZU Pomoc||19 729||3 564||16 165||18 565||100.00%||16 165||(2 400)|
|LLC SOS Services Ukraine||694||151||543||729||100.00%||543||(186)|
|Ipsilon Bis SA||87||3||84||100||100.00%||84||(16)|
|Ipsilon Sp. z o.o.||38||1||37||52||100.00%||37||(15)|
|Total – impact on other operating expenses||(35 134)|
|Total – impact on the consolidated profit/loss||(9 293)|
22.214.171.124 Subsidiaries – investment funds subject to consolidation
As at 1 January 2013, the item “Other liabilities” includes amounts of investments made by investors from outside the PZU Group in the consolidated investment funds.
Until 31 December 2012, investments made in some of the investment funds were classified as assets available for sale, whereas changes in the fair value were recognized under “Revaluation reserve”. On 1 January 2013, the balances in this respect recognized under “Revaluation reserve” were reclassified to the consolidated profit and loss account and recognized under “Net change in the fair value of assets and liabilities measured to fair value”.
The table below presents the financial data of consolidated investment funds.
|Investment fund||Total fund’s consolidated assets as at 1 January 2013||The amount reclassified from the „Revaluation reserve” to the consolidated income statement as at 1 January 2013||Liabilities to investors outside the PZU Group included in „Other liabilities” as at 1 January 2013|
|PZU FIZ Sektora Nieruchomości 1||423 814||120 815||-|
|PZU FIZ Sektora Nieruchomości 2 1||505 604||782||-|
|PZU FIZ Sektora Nieruchomości 3 1||8 592||(1 408)||-|
|PZU FIZ Aktywów Niepublicznych BIS 1 2||500||-||-|
|PZU FIZ Aktywów Niepublicznych BIS 2 2||107 640||27 640||-|
|Subfundusz PZU Energia Medycyna Ekologia 3||187 407||-||80 100|
|Subfundusz PZU Dłużny Rynków Wschodzących 2||319 969||28 031||6 182|
|PZU FIZ Forte 2 3||107 020||92||6 928|
|PZU FIZ Aktywów Niepublicznych RE Income 1||169 645||3 410||36 233|
|Subfundusz PZU FIO Gotówkowy 2 4||473 008||5 265||151 072|
|Total||2 303 199||184 627||280 515|
1) The amount was reclassified from “Revaluation reserve” to the consolidated income statement as a consequence of reclassification, as at the date of consolidation of the fund, of the fund’s real property to property measured at fair value in accordance with the PZU Group’s policy on investment property, in particular paragraph 35 of IAS 40 “Investment Property”.
2) The reclassification of the amount from „Revaluation reserve” to the consolidated income statement concerns those financial assets which were classified as measured at fair value through profit or loss – classified as such upon initial recognition.
3) Information concerning elimination of the fund from consolidation has been presented in Section 2.2.
4) Data as at the date of inclusion in the consolidation, i.e. 1 April 2013.
126.96.36.199 Associates – companies measured using the equity method
As at 1 January 2013, the differences between the PZU Group’s share in the net assets of the companies included in the measurement using the equity method and the carrying amount of investments in the associates are presented under “Other operating income” in the consolidated profit and loss statement.
|Reconciliation of the effect of measurement of associates using the equity method||1 January 2013|
|Net assets||41 600|
|Carrying value of shares||5 888|
|PZU Group’s share in net consolidated assets of companies||15 439|
|Total impact on the consolidated gross profit/loss||9 551|