1. Introduction

Compliance statement

These consolidated financial statements of the Capital Group of Powszechny Zakład Ubezpieczeń Spółka Akcyjna (henceforth: "consolidated financial statements" and "PZU Group", respectively) have been prepared in accordance with International Financial Reporting Standards ("IFRS") published and effective as at 31 December 2015 and endorsed by the European Commission.

Entities of PZU Group maintain their accounting records in accordance with local GAAP:

  • in Poland – in accordance with Polish Accounting Standards, with the exception of Alior Bank's Capital Group, Armatura Capital Group and CM Medica, maintaining their accounting records in accordance with IFRS;
  • abroad – in accordance with IFRS, with the exception of Lithuanian companies maintaining their accounting records in accordance with Lithuanian accounting standards.

Consolidated financial statements include adjustments made in order to provide compliance with IFRS.

Financial year

The consolidated financial statements have been prepared for the period of 12 months from 1 January 2015 to 31 December 2015.

Financial Statements approval

These consolidated financial statements were signed and authorized for issue by the Management Board of Powszechny Zakład Ubezpieczeń Spółka Akcyjna (PZU, the parent entity) on 14 March 2016 and shall be subject to approval of the Annual General Meeting of Powszechny Zakład Ubezpieczeń Spółka Akcyjna.

Functional and presentation currency

The Polish zloty (PLN) is the PZU functional and presentation currency. Unless expressly stated otherwise, all financial data presented in the consolidated financial statements are expressed in thousand PLN.

The functional currency of companies whose registered offices are located in Ukraine is Ukrainian hryvnia, whereas in the case of the companies whose registered offices are located in Lithuania, Latvia and Sweden it is the euro.

The consolidated financial statements are presented in the Polish zloty (PLN). The Polish zloty is PZU Group's functional and presentation currency.

Going concern assumption

The consolidated financial statements have been prepared based on the assumption that the PZU Group’s entities will operate as a going concern during the period of at least 12 months following the balance sheet date. As at the date of signing these consolidated financial statements, no facts and circumstances indicate a risk to PZU Group entities’ ability to operate as a going concern during 12 months after closing the reporting year due to the intended or forced discontinuation or significant limitation of its operations.

Discontinued operations

In 2015, the entities in PZU Group did not discontinue any significant type of operations.

Glossary

Below are listed the most important terms and abbreviations used in the consolidated financial statements.

Company names

AAS Balta – Apdrošināšanas Akciju Sabiedrība Balta.

Alior Bank – Alior Bank SA.

Alior Bank Capital Group – Alior Bank along with its subsidiaries: Alior Services sp. z o.o., Centrum Obrotu Wierzytelnościami sp. z o.o., Alior Leasing sp. z o.o., Meritum Services ICB SA, Money Makers SA, New Commerce Services sp. z o.o.

Armatura Capital Group – Armatura Kraków SA along with its subsidiaries: Armatoora SA, Aquaform SA, Aquaform Badprodukte GmbH, Aquaform Ukraine ТОW, Aquaform Romania SRL, Morehome.pl sp. z o.o. oraz jednostką współzależną Armatura Tower sp. z o.o.

CM Medica – Centrum Medyczne Medica sp. z o.o.

Elvita – Przedsiębiorstwo Świadczeń Zdrowotnych i Promocji Zdrowia ELVITA – Jaworzno III sp. z o.o.

EMC – EMC Instytut Medyczny SA.

Gamma – Centrum Medyczne Gamma sp. z o.o.

Link4 – Link4 Towarzystwo Ubezpieczeń Spółka Akcyjna.

Proelmed – Przedsiębiorstwo Usług Medycznych PROELMED sp. z o.o.

Prof – Med – Specjalistyczna Przychodnia Przemysłowa Prof-Med sp. z o.o.

PTE PZU – Powszechne Towarzystwo Emerytalne PZU SA.

PZU, the parent entity – Powszechny Zakład Ubezpieczeń Spółka Akcyjna.

PZU CO – PZU Centrum Operacji Spółka Akcyjna.

PZU FIZ AN BIS 2 – PZU FIZ Aktywów Niepublicznych BIS 2.

PZU Lithuania – UAB DK PZU Lithuania.

PZU Ukraine – PrJSC IC PZU Ukraine.

PZU Ukraine Life – PrJSC IC PZU Ukraine Life Insurance.

PZU Życie – Powszechny Zakład Ubezpieczeń na Życie Spółka Akcyjna.

SU Krystynka – Sanatorium Uzdrowiskowe “Krystynka” sp. z o.o.

TFI – Towarzystwo Funduszy Inwestycyjnych PZU SA.

TUW PZUW – Towarzystwo Ubezpieczeń Wzajemnych Polski Zakład Ubezpieczeń Wzajemnych.

Other definitions

DPF – discretionary participation features within the meaning of IFRS 4 – Insurance contracts.

Forbearance – tool used to restructure debt, most often taking a form of facilities granted to the debtor by the creditor.

CODM – chief operating decision maker within the meaning of IFRS 8 – Operating segments.

IBNR – Incurred But Not Reported.

Separate financial statements of PZU for 2015 – annual separate financial statements of Powszechny Zakład Ubezpieczeń Spółka Akcyjna for 2015, in accordance with PAS, signed by the Management Board of PZU on 14 March 2016.

PFSA – Polish Financial Supervision Authority.

IFRS – International Financial Reporting Standards, published and effective as at 31 December 2015 and endorsed by the European Commission.

TCG – Tax Capital Group established pursuant to an agreement signed on 25 September 2014 and entered into by the following 13 PZU Group companies: PZU, PZU Życie, Link4, PZU CO, PZU Pomoc SA, Ogrodowa-Inwestycje Sp. z o.o., Ipsilon Sp. z o.o., PZU Asset Management SA, TFI PZU SA, PZU Zdrowie SA, PZU Finanse Sp. z o.o., Omicron SA, and Omicron Bis SA. The TCG was formed for a period of 3 years, from 1 January 2015 to 31 December 2017. PZU is the parent entity and the company representing the TCG in the above-mentioned TCG agreement.

Banking Law Act dated 29 August 1997 (i.e. Journal of Laws of 2015, item 128, as amended) and the regulations issued thereunder.

PAS – the Accounting Act of 29 September 1994 (Journal of Laws of 2013, item 330, as amended) and the regulations issued thereunder.

PLET – Polish Life Expectancy Tables published annually by the Central Statistical Office in Poland.

RBNP – Reported But Not Paid.

CRR – regulation of the European Parliament and the Council No. 575/2013 from 26 June 2013 on prudential requirements for credit institutions and investment firms.

Solvency Margin Ordinance – ordinance of 28 November 2003 on the manner of calculation of the solvency margin and the minimum amount of the guarantee capital for insurance sections and classes (Journal of Laws No. 211 of 2003, item 2060, as amended).

Consolidated financial statements – consolidated financial statements of PZU Group in accordance with IFRS for the year ended on 31 December 2015.

Old portfolio – individual life insurance (marriage and life) and annuity assumed from Państwowy Zakład Ubezpieczeń.

Act on Insurance ActivityAct on Insurance Activity of 22 May 2003 (i.e. Journal of Laws of 2015, item 1206 as amended).

Pension Funds Act – Pension Funds Act of 28 August 1997 (i.e. Journal of Laws of 2013, item 989, as amended).

Act on Financial Instututions Tax – act of 15 January 2016 on the tax on certain financial institutions (Journal of Laws of 2016, item 68).

ZUS – Social Insurance Institution.