34. Entities measured using the equity method

Associates and joint ventures 31 December 2015 31 December 2014 31 December 2015 31 December 2014 31 December 2015 31 December 2014
Name of entity EMC Instytut Medyczny SA GSU PomocGórniczy 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 Cracow Cracow
Share in the entity's capital 28.31% 28.58% 30.00% 30.00% 50.00% 50.00%
Share in the entity's votes 25.44% 25.41% 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 involvement in the entity 53,479 65,707 575 586 11 18
Fair value of the interest in the entity 55,283 52,737 None – unlisted entity None – unlisted entity None – unlisted entity None – unlisted entity
Dividends received from the entity - - 8 36 - -
             
Basic financial information            
             
Assets, including: 252,378 241,290 2,882 2,509 22 35
Short-term assets, including: 54,529 49,796 2,424 2,002 22 35
Cash and cash equivalents 16,350 16,931 2,397 1,752 16 32
Long-term assets 197,849 191,494 458 507 - -
             
Equity 152,873 136,475 1,915 1,953 22 35
Liabilities, including: 99,505 104,815 967 556 - -
Short-term liabilities, including: 56,497 60,162 967 556 - -
Short-term financial liabilities 21,934 23,930 - - - -
Long-term liabilities, including: 43,008 44,653 - - - -
Long-term financial liabilities 19,760 24,286 - - - -
          -  
Revenue from core operations 258,070 243,262 2,056 1,093 - -
Depreciation and amortization 13,141 12,607 154 49 - -
Interest income 280 1,130 76 133 - -
Interest expense 1,969 2,419 - - - -
Income tax 551 (211) 21 33 - -
             
Total net comprehensive income, including: (4,337) (7,233) (18) 21 (13) (15)
Profit/loss, including: (4,498) (6,605) (18) 21 (13) (15)
Profit (loss) from continued operations (4,498) (6,605) (18) 21 (13) (15)
Profit (loss) from discontinued operations - - - - - -
Other comprehensive income 161 (628) - - - -

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 associates 1 January - 31 December 2015 1 January - 31 December 2014
Opening balance 37,050 19,334
Purchase of EMC shares 5,137 19,459
Share in net profit/(loss) (936) (1,525)
Dividends 1) (8) (36)
Share in other comprehensive income 46 (182)
Closing balance 41,289 37,050

1) Dividends paid by GSU Pomoc Górniczy Klub Ubezpieczonych SA

Change in goodwill related to associates 1 January - 31 December 2015 1 January - 31 December 2014
Opening balance 29,261 29,261
Impairment losses (16,486) -
Closing balance 12,775 29,261
 
Reconciliation of the EMC measurement 1 January - 31 December 2015 1 January - 31 December 2014
Net assets of EMC 152,873 136,475
Non-controlling interest in EMC financial statements (7,902) (7,825)
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 equity method valuation 143,820 127,499
PZU Group’s share in EMC capitals 40,704 36,446
Goodwill in financial statements of PZU Group 12,775 29,261
Carrying amount 53,479 65,707
 

Impairment test

Impairment test was conducted as at 31 December 2015 and showed the necessity to recognize impairment loss on the value of EMC shares amounting to PLN 16,486 thousand.

The recoverable amount was determined based on entities’ value in use, using the discounted cash flow method with respect to the principles described in Note 26. Discount rate was determined based on weighted average cost of capital. The remaining assumptions taken when conducting the test included:

Entity generating cash flows 31 December 2015 31 December 2014
  Discount rate Growth rate after the forecast period Discount rate Growth rate after the forecast period
EMC 6.2% 3.0% 6.9% 3.5%