|SELECTED ACCOUNTING PRINCIPLESThe Group’s joint contractual arrangements classified as joint ventures are accounted for using the equity method.
Using the equity method the initial value of the investment carried at cost is increased or reduced by a share in profits/losses and in other comprehensive income of the joint venture as from the acquisition date (recognised in profit or loss or in other comprehensive income of the Group, as appropriate).
PROFESSIONAL JUDGEMENT AND ESTIMATES
The Group defines the type of the joint arrangement it is a party to, depending on the rights and obligations of parties to such arrangement. Following an analysis of such rights and obligations, the Group assesses its joint control over joint arrangements and rights to their net assets. Consequently, shares in the TAMEH Holding Sp. z o.o. Capital Group and in Elektrociepłownia Stalowa Wola S.A. are classified as joint ventures.
Interests in joint ventures are tested for impairment whenever there is an indication that an impairment may occur or a previously
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Stalowa Wola S.A.
Sp. z o.o. *
31 December 2020 or
for the year ended
31 December 2020
Stalowa Wola S.A.
Sp. z o.o. *
|As at 31 December
2019 or for
the year ended
31 December 2019
|Current assets, including:||166,157||651,735||817,892||136,404||644,722||781,126|
|cash and cash equivalents||2,242||158,680||160,922||90,830||284,503||375,333|
|Non-current liabilities (-), including:||(2,028,065)||(839,590)||(2,867,655)||(1,719,704)||(922,262)||(2,641,966)|
|Current liabilities (-), including:||(754,866)||(675,067)||(1,429,933)||(519,395)||(709,111)||(1,228,506)|
|Total net assets||(794,753)||1,254,599||459,846||(479,219)||1,199,771||720,552|
|Share in net assets||(397,377)||627,300||229,923||(239,610)||599,886||360,276|
|Investment in joint ventures||–||586,559||586,559||–||559,144||559,144|
|Share in revenue of joint ventures||80,113||852,140||932,253||425||959,938||960,363|
|Share in profit/(loss) of joint
|Share in other comprehensive income of joint ventures||–||15||15||–||(987)||(987)|
* The data presented concern the TAMEH HOLDING Sp. z o.o. Group. The value of the interest held in TAMEH HOLDING Sp. z o.o. differs from
the value of net assets attributable to the Group, because the cost of shares in TAMEH HOLDING Sp. z o.o. was calculated taking into account
the fair value of the share contributed to the joint venture by companies from the ArcelorMittal Group.
Elektrociepłownia Stalowa Wola S.A.
Elektrociepłownia Stalowa Wola S.A. is a special purpose vehicle established in 2010 at the initiative of TAURON Polska Energia S.A. and PGNiG S.A., through which the partners implemented an investment consisting in the construction of CCGT unit in Stalowa Wola fired with natural gas with the gross electrical capacity of 450 MWe and the net heat capacity of 240 MWt.
TAURON Polska Energia S.A. has an indirect shareholding of 50% in the capital of the company and in the governing body, exercised through TAURON Wytwarzanie S.A. Due to the fact that in 2015 the accumulated share of losses of the joint venture and the adjustment to “top-down” transactions between the Group companies and the joint venture exceeded the value of the interest in the joint venture, the Company discontinued to recognise its share of any further losses of the joint venture.
In addition, the Company holds receivables from loans granted to Elektrociepłownia Stalowa Wola S.A. with the carrying amount of PLN 98,713 thousand, as further discussed in Note 27 to these consolidated financial statements.
Judgement of the Court of Arbitration at the Polish Chamber of Commerce on the claims of Abener Energia S.A. Against Elektrociepłownia Stalowa Wola S.A. and proceedings between Abener Energia S.A. and Elektrociepłownia Stalowa Wola S.A.
On 25 April 2019, a judgement of the Court of Arbitration at the Polish Chamber of Commerce in Warsaw (“the Judgment”) was issued in the case filed by Abener Energia S.A. (“Abener”) against Elektrociepłownia Stalowa Wola S.A. (“ECSW”).
The case pending at the Court of Arbitration concerned a claim for payment, for establishing the legal relationship and for the obligation to submit a declaration of intent in connection with the terminated contract concluded between Abener (general contractor) and ECSW (contracting authority) for the construction of a CCGT unit in Stalowa Wola. Under the Judgement, ECSW was obligated to pay to Abener the amount of PLN 333 793 thousand along with statutory interest for delay and costs of the arbitration proceedings. On 24 June 2019, ECSW filed a complaint with the Court of Appeal in Rzeszów and requested that the Judgement be repealed.
On 22 September 2020, the Court of Appeals in Rzeszów, by its judgement, dismissed the complaint of ECSW to repeal the Judgement, and on 29 September 2020, declared the Judgement enforceable. ECSW filed a request for service of the aforementioned judgement on the adjudication of the action with a statement of reasons; the company received a copy of the judgement on 20 October 2020.
In addition, on 25 September 2020, ECSW filed a request with the Court of Appeals in Rzeszów to suspend the enforceability of the Judgement until the cassation appeal is heard, and on 7 October 2020, it filed a complaint against the decision to make the Judgement enforceable.
On 20 November 2020, the Court of Appeals in Rzeszów issued a decision to suspend the execution of the Judgement until the conclusion of the cassation proceedings or the expiry of the time limit for filing a cassation appeal. On 21 December 2020, ECSW filed a complaint in cassation.
In connection with the above Judgement, Elektrociepłownia Stalowa Wola S.A. recognised a provision in the statement of financial position, which amounts to PLN 439,144 thousand as at 31 December 2020.
On 20 December 2019, ECSW received another lawsuit filed by Abener in the Arbitration Court. The subject matter of the lawsuit is the payment by ECSW to Abener of the total amount of PLN 156,447 thousand and EUR 537 thousand plus statutory interest for the delay as compensation for damages resulting from ECSW requesting and obtaining payment from the performance bond at Abener’s expense or, alternatively, reimbursement of illegitimate enrichment obtained by ECSW at Abener’s expense in connection with obtaining payment from the performance bond. The guarantee was granted to ECSW by Abener in accordance with the contract between the parties for the construction of a CCGT unit in Stalowa Wola. A response to the claim was filed by ECSW on 20 March 2020. An assessment of the claim and its justification shows that they are unfounded. The arbitration proceedings are ongoing.
On 19 October 2020, ECSW filed a statement of claim with the Court of Arbitration at the Polish Chamber of Commerce in Warsaw against Abener for payment by Abener to ECSW of PLN 198,664 thousand and EUR 461 thousand, together with interest, as compensation for damages corresponding to the costs of rectifying the defects, faults and deficiencies in the works, deliveries and services performed by Abener during the performance of the above contract. The proceedings are ongoing.
The contract for the construction of the CCGT unit concluded between ECSW and Abener does not contain provisions obliging the Company to pay any form of remuneration to Abener for ECSW.
TAMEH HOLDING Sp. z o.o. and subsidiaries
In 2014, a shareholders’ agreement was concluded by and between the TAURON Group and the ArcelorMittal Group regarding TAMEH HOLDING Sp. z o.o., which is responsible for investment and operational projects in the area of industrial energy. The Agreement was concluded for a period of 15 years, with a possibility of its extension. The two capital groups hold a 50% interest in TAMEH HOLDING Sp. z o.o. each.
TAMEH HOLDING Sp. z o.o. is the owner of 100% of the shares in TAMEH POLSKA Sp. z o.o., formed by a contribution in kind by the TAURON Group: Zakład Wytwarzania Nowa and Elektrownia Blachownia, as well as Elektrociepłownia in Kraków contributed by the ArcelorMittal Group. In addition, TAMEH HOLDING Sp. z o.o. holds 100% of TAMEH Czech s.r.o. shares, which consists of the Ostrava Combined Heat and Power Plant.
On 9 September 2020, the shareholders’ meeting of TAMEH Holding Sp. z o.o. decided to leave the net profit of PLN 54,131 thousand for the financial year ended 31 March 2020 for the retained earnings of TAMEH Holding Sp. z o.o.