3.6 Distribution segment’s property, plant and equipment

As at the reporting date the carrying amount of property, plant and equipment related to distribution activities amounted to approx. PLN 22 billion and represented approx. 32% of total consolidated property, plant and equipment. Their recoverable amount depends mainly on tariffs granted by President of the Energy Regulatory Office. Regulated revenue (tariff) which is determined annually provides covering justified costs: operating costs, depreciation and amortisation, taxes, purchase of energy to cover balancing difference and transferred costs. It provides also a return on equity involved in the distribution activity at a justified level. Return on equity and depreciation charges are dependent on the so called Regulatory Asset Base.

As at the date of preparation of these consolidated financial statements, PGE Group did not identify any indications for impairment of property, plant and equipment allocated to Distribution segment.