7.10.3. Retained earnings

As at 31 December 2018, retained earnings of the Jastrzębska Spółka Węglowa S.A. Group amounted to PLN 5,976.6 million (PLN 4,298.9 million as at 31 December 2017). This item includes, among others, the Parent Company’s supplementary capital.

Supplementary capital was created from allowances from profit generated by JSW in previous reporting periods. Also, pursuant to the requirements of the Commercial Company Code, joint stock companies are required to create supplementary capital to cover losses. At least 8% of the profit generated in any financial year, as disclosed in the standalone financial statements of the Parent Company, is transferred to this category of capital until it reaches at least one-third of the entity’s share capital. The use of the supplementary capital is decided by the Shareholder Meeting, however, the portion of the supplementary capital representing one-third of the share capital may only be used to cover a loss posted in the financial statements and cannot be allocated to other purposes.