Home | Financial results | Additional information and notes | 32. Entities measured using the equity method

32. Entities measured using the equity method

Associates and
joint ventures
31 December
2014
31 December
2013
31 December
2014
31 December
2013
31 December
2014
31 December
2013
Name of entity EMC Instytut
Medyczny SA 
GSU Pomoc Górniczy
Klub Ubezpieczonych SA 
Armatura Tower
Sp. z o.o. 
Nature of the relationship
between PZU and the entity
Associate - non-strategic  Associate - non-strategic  Joint-venture -
non-strategic 
Seat of the entity Wrocław Wrocław Tychy Tychy Kraków Kraków
Share in the entity's capital 28.58% 29.87% 30.00% 30.00% 50.00% 50.00%
Share in the entity's votes 25.41% 25.31% 30.00% 30.00% 50.00% 50.00%
Valuation method in
consolidated financial
statements
Equity method  Equity method  Equity method 
Accounting standards
applied by the entity
IFRS  PAS  IFRS 
Carrying amount of
the involvment in the entity
65,707 47,954 586 616 18 25
Fair value of the interest
in the entity
52,737 44,746 None – entity is
not listed
None – entity is
not listed
None – entity is
not listed
None – entity is
not listed
Dividends received
from the entity
- - 36 104 - -
Basic financial information          
Assets, including: 241,290 231,397 2,509 2,633 35 nd 1)
Short-term assets, including: 49,796 79,690 2,002 2,594 35 nd 1)
Cash and cash equivalents 16,931 59,685 1,752 2,494 32 nd 1)
Long-term assets 191,494 151,707 507 39 - nd 1)
Equity 136,475 139,021 1,953 2,053 35 nd 1)
Liabilities, including: 104,815 92,376 556 580 - nd 1)
Short-term liabilities, including: 60,162 48,905 556 580 - nd 1)
Short-term financial liabilities 23,930 23,384 - - - nd 1)
Long-term liabilities, including: 44,653 43,471 - - - nd 1)
Long-term financial liabilities 24,286 25,436 - - - nd 1)
Revenue from core operations 243,262 172,556 1,093 677 - nd 1)
Depreciation and amortisation 12,607 9,121 49 24 - nd 1)
Interest income 1,130 172 133 153 - nd 1)
Interest expense 2,419 2,78 - - - nd 1)
Income tax -211 569 33 54 - nd 1)
Total net comprehensive
income, including:
-7,233 78 21 121 -15 nd 1)
Profit/loss, including: -6,605 171 21 121 -15 nd 1)
Profit (loss) from continued
operations
-6,605 171 21 121 -15 nd 1)
Profit (loss) from discontinued
operations
- - - - - nd 1)
Other comprehensive income -628 -93 - - - nd 1)

1) The company did not prepare financial statements as at 31 December 2013.

There are no restrictions (e.g. due to lending arrangements, regulatory requirements or contracts) concerning the possibility of transfer of funds by associates and joint ventures in the form of cash dividends.

Change in the share in the net assets of associates1 January – 31 December 20141 January – 31 December 2013
Opening balance 19,334 -
Change in the scope of entities measured
using the equity method
- 685
Purchase of EMC shares 19,459 19,176
Acquisition of shares in Armatura Tower sp. z o.o. - 25
Share in net profit/(loss) -1,525 -428
Dividends 1) -36 -104
Share in other comprehensive income -182 -20
Closing balance 37,050 19,334

1) Dividend paid by GSU Pomoc Górniczy Klub Ubezpieczonych SA.

Change in goodwill related to associates1 January – 31 December 20141 January – 31 December 2013
Opening balance 29,261 -
Acquisition of an associate - 29,261
Closing balance 29,261 29,261

The total balance of goodwill related to associates concerns EMC.

Reconciliation of the EMC measurement 1 January -31 December 20141 January - 31 December 2013
Net assets of EMC 136,475 139,021
Non-controlling interest -7,825 -4,141
The increase registered on 14 March 2014 1) - -70,89
The difference between net assets resulting
from the audit of financial statements
of EMC conducted by an auditor
- -260
Goodwill in financial statements of EMC as at
the moment of achieving a considerable inflow
-1,151 -1,151
Net assets of EMC measured using
the equity method
127,499 62,579
PZU Group’s share in EMC capitals 36,446 18,693
Goodwill in financial statements of PZU Group 29,261 29,261
Carrying amount 65,707 47,954

1) The EMC’s equities presented in the EMC 2013 financial statements have been increased by the effect of issuing new shares. The increase was registered on 14 March 2014. PZU Group has considered the effect of acquisition of shares from the new issue in the measurement using the equity method as of the date of registering the above increase. Hence, as at the end of 2013, for the purposes of equity measurement method the EMC equities have been decreased by the value of non-registered shares issue.

Impairment test

Based on the impairment test it was concluded that the recoverable amount was not lower than the carrying amount, hence no impairment losses are required to be recognised.

The recoverable amount was determined on the basis of the fair value estimated using the most recent financial plans and the following assumptions:

Entity generating cash flowsDiscount rateTerminal growth rate
EMC 6.9% 3.5%

As a result of the test, no impairment loss was recognized. The table below shows the surplus of the recoverable amount over the carrying amount and the maximum discount rates as well as minimum terminal growth rate, at the level of which the carrying amount of EMC shares equals its recoverable amount.

Entity generating cash flowsSurplusMarginal value of discount rateMarginal value of discount rate after the forecast period
EMC 783 6.93% 3.47%