2.3 Non-controlling interest

The table below presents the subsidiaries with present or past non-controlling interest:

 

Name of entity 31 December 2016 31 December 2015
Alior Bank 1) 70.55% 70.78% 2)
Gamma 39.54% 39.54%
Proelmed 43.00% 43.00%
SU Krystynka 0.91% 0.91%
UAB PZU Lietuva Gyvybes Draudimas 0.66% 0.66%
AAS Balta 0.01% 0.01%
Lietuvos Draudimas AB 0.00% 0.02%

1) Value of non-controlling interest of Alior Bank was represented by means of recognizing tranche III of the transaction specified in 2.4.1.2

non-controlling_interest_table_1_pzu2016.xlsx

As at 31 December 2016, the carrying amount of non-controlling interest at Alior Bank was settled at PLN 4,111 million (as at 31 December 2015: PLN 2,188 million). Increase in the amount between 31 December 2016 and 31 December 2015 results from an increase in Alior Bank share capital, referred to in point 2.5.

The below table presents consolidated financial data of Alior Bank Group included in the consolidated financial statements. The data also includes the values resulting from the acquisition of the basic activity of Bank BPH for the controlling period (i.e. from 4 November 2016).

Assets 31 December 2016 31 December 2015 (restated)
Intangible assets 666 582
Other assets 73 109
Fixed tangible assets 486 229
Fianancial assets 57,092 35,767
Held to maturity 220 -
Available for sale 9,505 4,867
Measured at fair value through profit or loss 419 390
Hedging derivatives 72 140
Loans 46,876 30,370
Deferred tax assets 594 349
Receivables 815 484
Cash and cash equivalents 1,126 2,090
Assets held for sale 1 1
Total assets 60,853 39,611
non-controlling_interest_table_2_pzu2016.xlsx

Equity and liabilities 31 December 2016 31 December 2015
Equity    
Equity attributable to owners of the parent entity    
Share capital 1,293 727
Other capitals 4,298 2,480
Unappropriated result 2361) (115)1)
Non-controlling interest 1 1
Total equity 5,8281) 3,0931)
     
Liabilities    
Provisions for employee benefits 43 26
Other provisions 276 9
Financial liabilities 53,266 35,921
Other liabilities 1,440 562
Total liabilities 55,025 36,518
Total equity and liabilities 60,853 39,611

1) The item includes adjustment resulting from the remeasurement of assets and liabilities to fair value as at the acquisition date and its subsequent measurement and amortization of intangible assets identified in the acquisition of Alior Bank.

non-controlling_interest_table_3_pzu2016.xlsx

Due to the fact that Alior Bank and its subsidiaries had no impact on 2015 results, the comparative data for the statement of profit or loss, the statement of other comprehensive income and the cash flow statement was not presented.

Statement of profit or loss 1 January – 31 December 2016 1 January – 31 December 2015
Revenue from commissions and fees 590 -
Net investment income 1) 2,899 -
Net result on realization and impairment losses on investments (763) -
Net change in the fair value of assets and liabilities measured at fair value 142 -
Other operating income 641 -
     
Costs of commissions and fees (260) -
Interest expense (681) -
Administrative expenses 2) (1,199) -
Other operating expenses 3) (622) -
Operating profit 1) 2) 3) 747 -
Gross profit 1) 2) 3) 747 -
Income tax (84) -
Net profit 1) 2) 3) 663 -

1) Including PLN 91 million of positive impact of differences in interest income from loan portfolio measured at fair value as at the date of the acquisition of Alior Bank.
2) Including PLN 10 million of positive impact from the settlement of liabilities arising from unfavorable (generating charges) property lease agreements due to the acquisition of Alior Bank.
3) Including PLN 46 million of costs resulting from amortization of intangible assets (relations with clients having CDIs) acquired in the transaction of Alior Bank acquisition.

non-controlling_interest_table_4_pzu2016.xlsx

Statement of comprehensive income 1 January – 31 December 2016 1 January – 31 December 2015
Net profit 663 -
Other comprehensive income – subject to subsequent transfer to statement of profit or loss (87) -
Measurement of available-for-sale financial instruments (56) -
Cash flows hedge (31) -
Total net comprehensive income 576 -
non-controlling_interest_table_5_pzu2016.xlsx
   

Cash flow statement 1 January- 31 December 2016 1 January- 31 December 2015
Net cash flows from operating activities (2,226) -
Net cash flows from investment activities (643) -
Net cash flows from financial activities 2,376 -
Total net cash flows (493) -
non-controlling_interest_table_6_pzu2016.xlsx

In 2016 Alior Bank did not pay dividends.

The below table presents additionally the statement of profit or loss of PZU Group for the period from 1 January to 31 December 2016 presenting the effect of excluding Alior Bank as its subsidiary, subject to consolidation.

Consolidated statement of profit or loss PZU Group Exclusion of Alior Bank data Elimination of consolidation adjustments The Group without Alior Bank
Gross written premiums 20,219 - 19 20,238
Reinsurers’ share in gross written premiums (431) - - (431)
Net written premiums 19,788 - 19 19,807
Change in net unearned premiums reserve (1,163) - - (1,163)
Net earned premiums 18,625 - 19 18,644
         
Revenue from commissions and fees 808 (590) - 218
Net investment income 4,206 (2,858) 11 1,318
Net result on realization and impairment losses on investments (935) 763 - (172)
Net change in the fair value of assets and liabilities measured at fair value 316 (183) - 174
Other operating income 1,388 (641) - 747
         
Insurance claims, benefits, and change in technical provisions (12,888) - - (12,888)
Reinsurers’ share in claims, benefits, and change in technical provisions 156 - - 156
Net insurance claims and benefits (12,732) - - (12,732)
         
Costs of commissions and fees (285) 260 - (25)
Interest expense (773) 681 (11) (103)
Acquisition costs (2,613) - - (2,613)
Administrative expenses (2,843) 1,199 - (1,644)
Other operating expenses (2,128) 622 (19) (1,525)
Operating profit (loss) 3,034 (747) - 2,287
Share in net profit (loss) of companies measured using the equity method (3) - - (3)
Gross profit (loss) 3,031 (747) - 2,284
Income tax (614) 84 - (530)
Net profit (loss) 2,417 (663) - 1,754
non-controlling_interest_table_7_pzu2016.xlsx

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