B.1. Group entities

The consolidated financial statements are made up of those of the Parent Company and of its directly or indirectly controlled subsidiaries. All companies satisfying the requisites of control as required by IFRS standards are included in the consolidation.

Following the endorsement in the European Union, starting 1st January 2014 the Group adopted new standard IFRS 10 Consolidated Financial Statements which replaces all the guidance on control and consolidation in IAS 27, “Consolidated and Separate Financial Statements”, and SIC-12, “Consolidation – Special Purpose Entities” (see note C.6.2).

IFRS 10 redefines control introducing three conditions which have to be met for considering an entity as controlled:
(a) power over the investee
(b) exposure, or right to variable returns
(c) the ability to affect those returns through power over the investee.

The application of this new standard and control definition impacted the financial position of the Group by deconsolidation of several investment funds where the consolidation conclusion has been evaluated and such evaluation resulted in changes compared to previous years. The deconsolidated investment funds are presented in table below.

Subsidiaries deconsolidated after adoption of IFRS 10

The impact of the adoption of IFRS 10 on the financial position of the Group is described in table below.

Statement of financial position

XLS

* The correction of previous year error is described in the chapter C.6.1

Income statement

XLS

XLS

Applied for the disclosures, the transition guidance for the adoption of IFRS 10, IFRS 11 and IFRS 12 provides a relief from full retrospective application whereby an entity needs only to make a retrospective adjustment for the annual period immediately preceding the date of initial application of these standards.

The Group consolidates all material subsidiaries, immaterial subsidiaries are summarised in table F.3.2. The Group structure and the changes as compared to the previous year are presented below.

* Entity acquired in 2014

XLS

* Entity acquired in 2013

XLS

The tables below present the list of investment funds that are (based on newly applied IFRS standard IFRS 10, IFRS 11 and IFRS 12) considered associates and are reported within the financial investments using the equity method.

More detailed information about significant transactions with subsidiaries of the Group is provided below.

1. Increase of share in CP Strategic Investment N.V.

On 30 April 2014, the share in CP Strategic Investment N.V. was incread from 96.7% to 100% by purchase of 7,425 shares from ZFP Group. The total purchase price amounted to CZK 100 million.

2. Increase of share in ČP INVEST Realitní uzavřený investiční fond a.s.

Shareholder’s of the Company at their meeting agreed to increase share capital by CZK 78 million issuing 78 shares with nominal value of CZK 1 million each. On 14 May 2014, Česká Pojišťovna increased the share in ČP INVEST Realitní uzavřený investiční fond a.s. subscribing 66 shares for CZK 14,5 million each. Value of investment in the Company has increased by CZK 957 million.

3. Acquisition of PALAC KRIZIK a.s.

Effective 30 May 2014, the Group acquired 100% shares of PALAC KRIZIK a.s., a real estate SPV owning office property in prime location in Praha, for consideration of CZK 1052 million. Out of this amount an amount of CZK 70 million represents the price adjustment. The price adjustment reflects the actual increase in the working capital less net debt of the Company as of closing date. This adjustment to initial purchase price has been calculated as at 19th August and paid at the beginning of September 2014.

The Group also arranged an intragroup loan in the amount of CZK 1,074 million to refinance the Company´s liabilities at the transaction date.

The transaction is regarded as an acquisition of a group of assets, as the transferred set of activities and assets does not meet the definition of IFRS 3 for a business.

The acquisition of PALAC KRIZIK a.s. had following effect on the Group’s assets and liabilities:

(CZK million)	Amounts acquired
Assets	2,194
Investment properties	2,120
Other assets	24
Cash and cash equivalents	50
Liabilities	68
Other liabilities	68
Net assets acquired	2,126

XLS

4. Sale of 51 % of ČP Asistence s.r.o.

As a part of the agreement between the Company and Europ Assistance Česká pojišťovna a.s. sold to Europ Assistance its 51 % share in ČP Asistence s.r.o. The sale was concluded on 9 December 2014. The total sale price amounted to CZK 27.6 million.

5. New associate Europ Assistance s.r.o.

On 9 December 2014, the Company purchased 25 % share in Europ Assistance s.r.o. for the consideration of CZK 0.967 million. On 15 December 2014 the Company increased its investment by CZK 29 milion in a form of monetary surcharge outside of the registered capital.