Consolidated financial statement of JSW S.A. Capital Group for 2012

37. Transactions with related entities

As at 31 December 2012, the State Treasury was the majority shareholder of the Group.

Information on transactions with related entities

In 2012, the State Treasury was a higher-level parent. Accordingly, all companies owned by the State Treasury (directly or indirectly) are the Group’s related entities. In these consolidated financial statements, the Management Board of the Parent Company has disclosed transactions with significant affiliated entities identified as such according to the best knowledge of the Management Board.

In 2012, no individual transactions were identified between the Group and the State Treasury and entities related to the State Treasury which would be significant due to a non-standard scope or amount.

In the period from 1 January 2011 to 31 December 2011, three individual transactions were identified between the Group and the State Treasury which were significant due to a non-standard scope or amount. The transactions are: acquisition of WZK Victoria for PLN 413.9 million and PEC for PLN 144.5 million and acquisition of shares in KK Zabrze in exchange for a share issue of PLN 267.4 million. A detailed description of the acquisitions is provided in Note 38.

Other transactions in the period from 1 January 2012 to 31 December 2012 and from 1 January to 31 December 2011 concluded by the Group with State Treasury subsidiaries, which are significant in aggregate, pertain to the purchases of materials and services for the purposes of the ongoing operational activity (coal, electricity, forwarding and transportation services) from: Kompania Węglowa S.A., Grupa PKP S.A., Grupa Energa S.A., and coal sales to buyers such as PGE Polska Grupa Energetyczna S.A., Węglokoks S.A., Grupa Tauron S.A., Grupa Energa S.A.

Transactions with associates and a co-subsidiary are presented below:

  2012 2011
Transactions with associates and co-subsidiary    
Purchases in the period 47 23.9
Balance of liabilities at the end of the period * 14.5 7.2
 
Total purchases 47 23.9
Total balance of liabilities 14.5 7.2

* including VAT.

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In 2012, all transactions between the Group and its related entities were typical and were executed in the normal course of business on an arm’s length basis.

Information on transactions with Management Board and Supervisory Board members

The Management Board of the Parent Company is the Group's key management personnel.

Remuneration of the Parent Company’s Management Board

  2012
(PLN thous.)
2011
(PLN thous.)
Short-term employee benefits:    
- remuneration, management services* 4,146.1 1,454.2
- annual bonus ** 2,055.0 1,378.5
- benefits, income from other sources - 350.4
- income earned in subsidiaries - 206.3
Total 6,201.1 3,389.4

* This item includes remuneration paid out under management contracts
** For 2012, this item includes the annual bonus due for 2012 in the maximum contractual amount. The bonus is paid out upon request of the President of the Management Board, depending on the level of KPIs achieved, after a Supervisory Board approval. For 2011, this item includes the annual bonus paid out in 2010 and the annual bonus due for 2011

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The management contracts stipulate that if the contract is terminated, the member of the Parent Company's Management Board is entitled to a severance pay equal to 6 times the fixed monthly remuneration. Moreover, under non compete agreements, members of the Parent Company's Management Board will receive compensation in the period of 12 months after their management contract is dissolved. Details of the agreements concluded with the managers are provided in section 1.6. Management Board Reports on the activity of the Jastrzębska Spółka Węglowa S.A. Capital Group for the financial year ended 31 December 2012.

Remuneration of the Parent Company's Supervisory Board

  2012
(PLN thous.)
2011
(PLN thous.)
Short-term benefits 478.3 434.4
Total 478.3 434.4

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Additional information about the remuneration of members of the JSW S.A. Management and Supervisory Boards are provided in Item 1.5 of the Management Board Report on the activity of Jastrzębska Spółka Węglowa S.A. Capital Group for the financial year ended 31 December 2012.

In 2012, no loans were granted to any members of the JSW S.A. Management or Supervisory Boards.

Information on transactions with Management Board members of Subsidiary Companies

  2012 2011
Short-term employee benefits 13 7.9
Jubilee awards 0.1 0.1
Termination benefits (severance pay) 0.2 -
Other 1.3 1.6
Total 14.6 9.6

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Information on transactions with Supervisory Board members of Subsidiary Companies

  2012 2011
Short-term benefits 2.8 2.9
Other 0.4 0.3
Total 3.2 3.2

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In 2012, no loans were granted to any members of Management or Supervisory Boards of the Subsidiary Companies.