1.2 Information on PGE Group
PGE Group consists of the parent, PGE Polska Grupa Energetyczna S.A., along with 74 consolidated subsidiaries. Also subject to consolidation are 3 entities constituting joint operations, 2 associates and 1 jointly controlled entity. For additional information about the entities included in the consolidated financial statements please refer to note 1.3.
These consolidated financial statements of PGE Group cover the period from January 1, 2022 to December 31, 2022 and include comparative data for the period from January 1, 2021 to December 31, 2021.
The financial statements of all subordinated entities were prepared for the same reporting period as the financial statements of the parent company, using consistent accounting principles. Companies acquired in the course of the financial year were the exception, preparing financial data for the period from the moment when PGE Group obtained control.
PGE Group companies’ core activities are as follows:
- production of electricity,
- distribution of electricity,
- wholesale and retail trade in electricity, energy origin rights, CO2 emission allowances and natural gas,
- production and distribution of heat,
- provision of other services related to these activities
Business activities are conducted under appropriate concessions granted to specific PGE Group companies. PGE Group operates predominately in Poland.
These financial statements were prepared under the assumption that the key Group companies will continue operating as a going concern for at least 12 months from the reporting date.
In 2021 ENESTA sp. z o.o. (currently ENESTA sp. z o.o. w restrukturyzacji) terminated unfavourable contracts for the supply of electricity and natural gas. In connection with this, as of December 31, 2021 a PLN 279 million provision for counterparty claims was created. Some counterparties took their claims to court in 2022. After unsuccessful attempts to reach an agreement with its counterparties, ENESTA filed for restructuring proceedings. On June 21, 2022, restructuring (sanitation) proceedings were opened. An inventory of receivables was filed with the court by September 30, 2022. A Restructuring Plan was filed with the court by the Administrator on December 21, 2022. On January 27, 2023, an order was issued approving the Restructuring Plan.
At the end of 2022 and in February 2023, judgements unfavourable to ENESTA were made in pending proceedings. The judgements established the existence and validity of contracts for the sale of electricity and natural gas. ENESTA therefore dissolved the provision made in 2021 for litigation. As a result of the need to continue to perform unfavourable sales contracts at the end of 2022, a provision of PLN 37 million was made for onerous contracts in 2023. In addition, provisions have been made for potential litigation in connection with the reserve sale implemented in 2022 by the vendor of last resort in the amount of PLN 56 million.
Revenue from sales invoiced by ENESTA during 2022, assuming that the termination of contracts was effective, was adjusted in accordance with final court judgements.
As at December 31, 2022, the value of ENESTA’s assets and equity and liabilities is PLN 134 million and the value of equity is PLN (236 million) million.
Aside from the issue of ENESTA sp. z o.o. w restrukturyzacji, at the date of the approval of these financial statements, there is no evidence indicating that the going concern of significant Group companies is endangered.