Powszechny Zaklad Ubezpiecze? Spólka Akcyjna : Financial statement of the PZU Group 2022

Warsaw, 29 March 2023

Management Board of Powszechny Zakład Ubezpieczeń Spółka Akcyjna

Motion

to the Ordinary Shareholder Meeting of PZU SA

Regarding:

approval of the Consolidated Financial Statements of the Powszechny Zakład Ubezpieczeń Spółka Akcyjna Group for the year ended 31 December 2022, prepared in accordance with the International Financial Reporting Standards.

Body of the motion:

We hereby move for the Ordinary Shareholder Meeting of PZU SA to approve the Consolidated Financial Statements of the Powszechny Zakład Ubezpieczeń Spółka Akcyjna Group for the year ended 31 December 2022 prepared according to International Financial Reporting Standards.

Justification:

The Ordinary Shareholder Meeting should review and approve the group's financial statements as defined in the accounting regulations. Moreover, the annual consolidated financial statements are subject to approval by the Ordinary Shareholder Meeting no later than within 6 months from the balance sheet date (pursuant to Article 395(1) and (5) of the Commercial Company Code in conjunction with Article 63c(4) of the Accounting Act of 29 September 1994, and §10(1) and §18(1) of the PZU SA Articles of Association).

By Resolution No. UZ/81/2023 of 29 March 2023 the PZU SA Management Board adopted and by Resolution No. URN/16/2023 of 29 March 2023 the PZU SA Supervisory Board issued a favorable assessment of the Consolidated Financial Statements of the Powszechny Zakład Ubezpieczeń Spółka Akcyjna Group for the year ended 31 December 2022, prepared in accordance with International Financial Reporting Standards, and recommended that the PZU SA Ordinary Shareholder Meeting approve it.

Submitted on behalf of the PZU SA Management Board by:

/Tomasz Kulik/

/Maciej Rapkiewicz/

Attachment:

1. draft resolution of the PZU SA Shareholder Meeting to approve the Consolidated Financial Statements of the Powszechny Zakład Ubezpieczeń Spółka Akcyjna Group for the year ended 31 December 2022, prepared in accordance with International Financial Reporting Standards.

Powszechny Zakład Ubezpieczeń Spółka Akcyjna

Group

Consolidated financial statements for the year ended 31 December 2022 prepared in accordance with International Financial Reporting Standards

Powszechny Zakład Ubezpieczeń Spółka Akcyjna Group

Consolidated financial statements in accordance with IFRS for the year ended 31 December 2022

Table of contents

Consolidated profit and loss account	4
Consolidated statement of comprehensive income	5
Consolidated statement of financial position	6
Consolidated statement of changes in equity	8
Consolidated cash flow statement	10
Supplementary information and notes	12
1.	Introduction	12
2.	Composition of PZU Group	15
3.	Shareholder structure	29
4.	Key management - Management Board and Group Directors	29
5.	Parent Company's Supervisory Board	31
6.	Key accounting policies and significant estimates and judgments	32
7.	Segment reporting	58
8.	Risk management	68
9.	Equity management	104
10.	Fair value	106
11.	Gross written premiums	115
12.	Revenue from commissions and fees	116
13.	Interest income calculated using the effective interest rate	117
14.	Other net investment income	119
15.	Result on derecognition of financial instruments and investments	119
16.	Movement in allowances for expected credit losses and impairment losses on financial instruments	120
17.	Net movement in fair value of assets and liabilities measured at fair value	121
18.	Other operating income	121
19.	Claims, benefits and movement in technical provisions	121
20.	Fee and commission expenses	123
21.	Interest expense	123
22.	Acquisition expenses	123
23.	Administrative expenses	124
24.	Employee expenses	125
25.	Other operating expenses	125
26.	Income tax	126
27.	Earnings per share	127
28.	Goodwill	127
29.	Intangible assets	130
30.	Other assets	133
31.	Deferred acquisition expenses	134
32.	Property, plant and equipment	135
	2

Powszechny Zakład Ubezpieczeń Spółka Akcyjna Group
Consolidated financial statements in accordance with IFRS for the year ended 31 December 2022
33.	Investment property	137
34.	Entities measured by the equity method	138
35.	Loan receivables from clients	139
36.	Financial derivatives	140
37.	Investment financial assets, including assets securing liabilities	151
38.	Receivables	156
39.	Expected credit losses and impairment of financial assets	157
40.	Cash and cash equivalents	166
41.	Equity attributable to the equity holders of the parent company	167
42.	Technical provisions	169
43.	Subordinated liabilities	177
44.	Liabilities on the issue of own debt securities	178
45.	Liabilities to banks	178
46.	Liabilities to clients under deposits	179
47.	Other liabilities	179
48.	Provisions	181
49.	Deferred tax	187
50.	Assets and liabilities held for sale	190
51.	Leases	190
52.	Assets securing receivables, liabilities and contingent liabilities	193
53.	Contingent assets and liabilities	194
54.	Offsetting financial assets and financial liabilities	194
55.	Notes to the consolidated cash flow statement	195
56.	Disputes	196
57.	Related party transactions	199
58.	Headcount	203
59.	Other information	203

3

Powszechny Zakład Ubezpieczeń Spółka Akcyjna Group

Consolidated financial statements in accordance with IFRS for the year ended 31 December 2022 (in millions of PLN)

Consolidated profit and loss account

Consolidated profit and loss account		Note		1 January -		1 January -
		31 December 2022		31 December 2021
	Gross written premiums		11		26,710		25,080
Reinsurers' share in gross written premium			(1,695)	(1,300)
	Net written premiums				25,015		23,780
Movement in net provision for unearned premiums			(718)	(548)
	Net earned premiums				24,297		23,232
	Revenue from commissions and fees		12		5,136		4,738
Interest income calculated using the effective interest rate	13	18,626	9,782
	Other net investment income		14		(384)		418
Result on derecognition of financial instruments and investments	15	(492)	407
	Movement in allowances for expected credit losses and impairment losses on		16		(3,271)		(1,849)
	financial instruments
Net movement in fair value of assets and liabilities measured at fair value	17	704	797
	Other operating income		18		1,896		1,602
	Claims, benefits and movement in technical provisions				(16,894)		(16,130)
Reinsurers' share in claims, benefits and movement in technical provisions			1,352	399
	Net insurance claims and benefits		19		(15,542)		(15,731)
	Fee and commission expenses		20		(1,449)		(1,194)
Interest expenses	21	(4,767)	(418)
	Acquisition expenses		22		(3,903)		(3,572)
Administrative expenses	23	(7,575)	(6,826)
	Other operating expenses		25		(5,646)		(3,917)
Operating profit			7,630	7,469
	Share of the net financial results of entities measured by the equity method				(25)		(15)
Profit before tax			7,605	7,454
	Income tax		26		(2,346)		(2,020)
Net profit, including:			5,259	5,434
	- profit attributable to the equity holders of the Parent Company				3,374		3,336
- profit (loss) attributed to holders of non-controlling interest			1,885	2,098
	Weighted average basic and diluted number of common shares		27		863,390,384		863,344,936
Basic and diluted profit (loss) per common share (in PLN)	27	3.91	3.86

Warsaw, 29 March 2023

The accompanying notes form an integral part of the consolidated financial statements.

4