December 31, 2021
December 31, 2020
|Contingent return of grants from environmental funds||476||461|
|Liabilities related to bank guarantees securing exchange transactions||262||75|
|Contractual fines and penalties||–||70|
|Usufruct of land||67||67|
|Other contingent liabilities||5||37|
|Total contingent liabilities||914||896|
Contingent return of grants from environmental funds
The liabilities represent the value of possible future returns of funds received by PGE Group companies from environmental funds for selected investments. The funds will be reimbursed, if investments for which they were granted, will not bring the expected environmental effect.
Dispute with WorleyParsons
In connection with the sale of shares of PGE EJ1 sp. z o.o. to the State Treasury and pursuant to the Agreement regulating the liability of the current Shareholders for the costs of a dispute with Worley Parsons, if PGE SA loses the dispute it may be required to cover the costs of the dispute in the amount of up to PLN 98 million. The probability of losing the dispute was estimated in order to determine the fair value of the payment received. In effect, PLN 59 million was recognised under contingent liabilities and PLN 39 million in non-current provisions. The amount of the provision adjusted the result on the sale of shares as presented in these financial statements.
Bank guarantee and surety liabilities
These liabilities represent bank guarantees provided as security for exchange transactions resulting from membership in the clearinghouse IRGiT.
The increase in liabilities on account of sureties towards clearinghouse IRGiT is connected with a significant increase in prices of futures contracts concluded on TGE. The increase in electricity prices directly affects the increase in the amount of the required security deposit lodged with the in non-monetary form, this deposit is secured by a surety under which bank guarantees are accepted by IRGiT.
Usufruct of land
Contingent liabilities pertaining to the usufruct of land are related to an update of annual fees for the usufruct of land. PGE GiEK S.A.’s branches have appealed the decisions in Local Appeals Courts. The value of the contingent liability was measured as the difference between the discounted sum of the updated perpetual usufruct fees for the entire period for which perpetual usufruct was established and the perpetual usufruct liability recognised in the books on the basis of the previous fees.