Other

PZU Group companies cooperate among others with the European Bank for Reconstruction and Development (EBRD) and the European Investment Fund. EBRD acquired PLN 300 million in securities under the subordinated bond issue in 2017.

In 2018 Bank Pekao signed an agreement with the European Investment Fund pertaining to the portfolio guarantee line.

Under Solvency II PZU has the possibility of consulting the European Insurance and Occupational Pensions Authority (EIOPA).

In 2018 no significant contracts were executed in respect of the Issuer’s operations.

In 2017 PZU issued subordinated bonds with a nominal value of PLN 2.25 billion.

The bond redemption date is 29 July 2027 with an early repayment option on 29 July 2022. Section 8.7 DEBT FINANCING PZU, PEKAO AND ALIOR BANK

The tax group agreement for fiscal years 2018-2020 was signed on 20 September 2017. According to the agreement, the tax group consists of PZU, PZU Życie, LINK4, PZU CO, PZU Pomoc, Ogrodowa-Inwestycje, PZU Zdrowie, PZU Finanse, PZU LAB, Ipsilon, Omicron Bis, Tulare Investments and Battersby Investments.

Under the tax group agreement, PZU is the parent company representing the tax group. Pursuant to art. 25 section 1 of the CIT Act, the Tax Group performs settlements with the Tax Office on a monthly basis. PZU makes advance payments to the Tax Office for the CIT tax due from PZU’s overall Tax Group, while the member companies transfer the amount they owe in advance payments to PZU’s specified bank account.

According to the agreement, the new tax group does not include TFI PZU or Ardea Alba in liquidation, which previously belonged to the tax group established for the period of 2015 to 2017.

Under their investment activity in 2018 PZU SA, PZU Życie SA and the funds managed by TFI PZU SA executed transactions to extend debt financing in the form of loans and bonds.

Companies in the PZU Group extend loans to one another. The following loans were extended in 2018 to the issuer’s related entities:

• Loan agreement entered into by and between PZU Zdrowie SA and Przedsiębiorstwo Świadczeń Zdrowotnych i Promocji Zdrowia Elvita-Jaworzno III Sp. z o.o. on 19 December 2018 for the amount of PLN 20.6 million maturing on 31 December 2028;
• Loan agreement entered into by and between PZU Zdrowie SA and Revimed Sp. z o.o. on 06 March 2018 for the amount of PLN 3 million maturing on 31 December 2023;
• Under the loan agreement entered into by and between PZU and PZU Zdrowie SA on 23 March 2015 and subsequent annexes thereto, on 21 December 2018 a tranche in the amount of PLN 20 million was paid out. The loan maturity date is 31 December 2030. 

Armatura Kraków SA chiefly funds its business using loans totaling PLN 69 million. In 2018 the financing banks extended the maturity of the loans.

PZU’s business is not seasonal or cyclical to an extent that would justify application of the suggestions set forth in the International Financial Reporting Standards.

The PZU Group and the Issuer are in very good financial standing and satisfy all the safety criteria imposed by the legal regulations and the Polish Financial Supervision Authority.

The Issuer’s stable rating outlook confirms that PZU has a strong business position, has a high level of equity, and is well-poised to achieve its intentions when it comes to investments.

In 2018 and up to the date of preparation of this report on the activity of the PZU Group and PZU, there were no pending proceedings before court, a body competent to hear arbitration proceedings or a public authority body concerning liabilities or receivables of PZU or a direct or indirect subsidiary thereof whose unit value would be material except for the issues described in the PZU Group’s consolidated financial statements and PZU’s financial statements for 2018.

As at 31 December 2018, the total value of all the 217,810 cases pending before courts, competent bodies for arbitral proceedings or public administration authorities to which PZU Group entities are a party was PLN 7,804 million (of which PZU was a party to 146,551 cases with a total value of PLN 3,482 million). PLN 4,108 million of that amount pertains to liabilities and PLN 3,696 million to the accounts receivable of PZU Group companies (including 3,060 of liabilities and PLN 423 million of the Issuer’s accounts receivable).

Management Board’s Report on the Activity of the PZU Group and PZU SA for 2018 has 240 consecutively-numbered pages.