5.3. Equity and capital management policy
Accounting policies
Share capital is disclosed at par value, in the amount specified in the Parent’s Articles of Association and the entry in the court register.
Share premium comprises the positive difference between the issue price of shares and the par value of the shares which remains after covering issue costs.
Accumulated other comprehensive income includes exchange differences on translating foreign operations, effects of the application of cash-flow hedge accounting which are taken to equity, actuarial gains and losses on employee benefits, and valuation of financial assets available for sale.
Retained earnings are the aggregate of the profit for the reporting period and accumulated profits brought forward which were not distributed as dividend but were transferred to reserve funds or remained undistributed.
PGNiG SA’s largest shareholder is the State Treasury, which as at December 31st 2016 held 71.88% of the Company’s shares, and is the entity having control of the Group. For detailed information on the shareholding structure, see Section 9.1 of the Directors’ Report on the operations of PGNiG S.A. and the PGNiG Group.
As at the end of the previous reporting period, the share capital comprised 5,900m shares with a par value of PLN 1 per share; the total value of the share capital was PLN 5,900m. In 2016, the Parent bought back 121,685,143 shares for cancellation. On November 24th 2016, the Parent’s Extraordinary General Meeting resolved on cancellation of 121,685,143 ordinary bearer shares with a par value of PLN 1 per share as well as reduction of the share capital and creation of a capital reserve.
As at the end of 2016, the share capital comprised 5,778,314,857 shares with a par value of PLN 1 per share.
In the reporting period, the Annual General Meeting of PGNiG S.A. decided to allocate PLN 1,062m to dividend payment (which translated into dividend of PLN 0.18 per share) (2015: PLN 1,180m, i.e. PLN 0.20 per share). The dividend was approved on June 28th 2016, and the dividend record date was set for July 20th 2016.
For detailed information on the dividend policy, see Directors’ Report on the operations of PGNiG S.A. and the PGNiG Group.
The key objective of the Group’s capital management is to maintain the ability to continue its operations, taking into account investment plans, while increasing the Group’s shareholder value. Furthermore, the PGNiG Group monitors its ability to pay liabilities based on the net debt to EBITDA ratio.
