In order to determine whether PZU Group has rights that are sufficient to give it power, that is practical ability to direct the relevant activities unilaterally, the PZU Group analyzes among others:
- how many votes it holds at the shareholder meeting and whether it holds more votes than other investors (including potential voting rights and rights resulting from other contractual arrangements);
- how many entities would have to act together in order to outvote the PZU Group;
- distribution of votes at previous shareholder meetings;
- if the key personnel of the entity or members of the investee’s governing body are related parties of the PZU Group;
- capacity to appoint members of management and supervisory bodies of the entity;
- commitments, if any, to ensure that an investee continues to operate as designed;
- capacity to obligate the entity to perform or prevent it from performing significant transactions;
- other prerequisites.
The analysis of prerequisites for exercising control over Pekao and Alior Bank as at 31 December 2022 is presented in the table below.
| Criterion | Pekao | Alior Bank |
|---|---|---|
| Share in votes at the shareholder meeting | 20.02% | 31.93% |
| Other shareholders | Only three shareholders hold a stake of more than 5%, accounting in total for 17% shares. The remaining shareholders are dispersed and a significant number of entities would have to take concerted action to outvote PZU at the shareholder meeting. | Only two shareholders hold a stake of more than 5%, accounting in total for 18% shares. The remaining shareholders are dispersed and a significant number of entities would have to take concerted action to outvote PZU at the shareholder meeting. |
| Shareholder agreements | On 23 January 2017, PZU and PFR (holding 12.8% of Pekao’s share capital) signed a Shareholder Agreement to build Pekao’s long-term value, implement a policy aimed at ensuring Pekao’s development, financial stability and effective and prudent management. It defines the rules of cooperation between PZU and PFR, in particular pertaining to joint exercise of voting rights from the shares held and the implementation of a common long-term policy for Pekao’s business. The Shareholder Agreement provides for the possibility of having real influence on Pekao’s operating policies. On 1 June 2022, an annex was signed extending the Shareholder Agreement until 7 June 2025, with the possibility of further extensions. The Management Board of PZU does not have any information about any agreements that may have been concluded between Pekao’s other shareholders. |
The Management Board of PZU does not have any information about any agreements that may have been concluded between Alior Bank’s other shareholders. |
| Potential voting rights | No potential voting rights have been identified. | No potential voting rights have been identified. |
| Capacity to adopt resolutions in line with PZU’s intentions | The analysis of attendance at past shareholder meetings does not provide clear grounds for denying control. | The analysis of attendance at past shareholder meetings does not provide clear grounds for denying control. |
| PZU representatives in governing bodies | Supervisory Board members include persons fulfilling key management functions at PZU. | Supervisory Board members include persons fulfilling key management functions at PZU. |
| Investor commitments and exposure to variability of returns | In connection with bancassurance, assurbanking activities, joint initiatives in the cost areas, including IT and real property, between PZU and Pekao, PZU has access to financial results, activities and operations that are not available to other shareholders of Pekao. | The PZU Group has undertaken investor commitments towards Alior Bank and conducts operations together with Alior Bank. This which means that it has greater exposure to the variability of Alior Bank’s financial results than it is implied by the stake it holds in Alior Bank’s equity. |
In the light of the above prerequisites, it has been determined that the PZU Group exercises control both over Pekao (since 7 June 2017) and over Alior Bank (since 18 December 2015) and over their subsidiaries and therefore they were consolidated.