14.9. Equity

SELECTED ACCOUNTING PRINCIPLES

Share capital

Equity paid by shareholders and presented at nominal value in accordance with the Parent Company’s articles of association and the entry in the National Court Register.

Share capital as at 31 December 1996, in accordance with IAS 29, § 24 and 25, was revalued based on monthly price indices of consumer goods and services.

Share premium

Equity created by the surplus of the issuance value in excess of the nominal value of shares decreased by issuance costs. Capital from issue of shares above their nominal value as at 31 December 1996, in accordance with IAS 29, § 24 and 25, was revalued based on monthly price indices of consumer goods and services.

Hedging reserve

Equity including valuation and settlement of hedging instruments that meet the criteria of cash flow hedge accounting.

Exchange differences on translating foreign operations

Result mainly from translation of the financial statements of the foreign companies into PLN under consolidation procedures.

Revaluation reserve

Revaluation reserve includes changes in the fair value of financial assets measured at fair value through other comprehensive income and the differences between the net book value and the fair value of investment properties as at the date of their reclassification from property adopted by the company to investment properties.

Retained earnings include:

• reserve capital created and used in accordance with the Commercial Companies Code,
• actuarial gains and losses from post-employment benefits,
• the current reporting period profit/loss,
• other capitals created and used according to the rules prescribed by law.

Profit/(loss) per share

Profit/(loss) per share is calculated by dividing the net profit or loss for the period attributable to ordinary shareholders of the Parent Entity by the weighted average number of ordinary shares outstanding during the period.

Diluted earnings/(loss) per share for each period are calculated by dividing the net profit / (loss) for the period adjusted by changes in profit/(loss) resulting from the conversion of potential ordinary shares into ordinary shares by the adjusted weighted average number of ordinary shares.

The profit/(loss) attributable to ordinary equity holders of the Parent is increased by the amount of after-tax dividends and the period of interest relating to dilutive potential ordinary shares, and is adjusted for any other changes in income and expenses that would result from the conversion of the dilutive ordinary shares on ordinary shares.

Diluted earnings per share are equal to the basic earnings per share, as there are no dilutive instruments in the Group.