5.17 Equity

5.17.1 Share capital

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

5.17.2 Treasury shares

Acquired treasury shares and the ones held by the consolidated entities within PZU Group are recognized at cost.

5.17.3 Supplementary capital

Under "Supplementary capital", the following are recognized:

  • effect of profit distribution, 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 ( Journal of Laws of 2013, item 1030, as amended) and the By-laws of PZU Group entities;
  • capital resulting from sale of investment property which was earlier reclassified from property, plant and equipment in accordance with rules described in Note 5.11;
  • difference between decrease of the value of non-controlling interest and fair value of consideration transferred in the transactions of acquiring non-controlling interests at subsidiaries.

5.17.4 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, plant and equipment to investment property;
  • measurement of the effective part of hedging instruments;

including the corresponding change in the deferred tax assets and liabilities.

5.17.5 Actuarial gains and losses from remeasurements of defined benefit liabilities

This item includes actuarial profits 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 profits 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).

5.17.6 Exchange differences from translation

The item includes exchange differences from translation of foreign operations’ financial data using the exchange rates and in accordance with principles described in Note 5.3.

5.17.7 Unappropriated result

"Unappropriated result" includes:

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

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

5.17.8 Non-controlling interest

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