25.1.1 Financial receivables

  As at December 31, 2016 As at December 31, 2015
  Non-current Current Non-current Current
Trade receivables - 2,705 - 2,548
Deposits 136 2,300 124 1
LTC compensations - 1,241 - 1,075
Debt securities including bonds 89 - - -
Bails and security deposits 2 12 1 37
Collateral – balancing market - - - 18
Other financial receivables 10 67 17 69
FINANCIAL RECEIVABLES 237 6,325 142 3,748

Trade receivables

The main component of trade receivables are receivables recognized by the company PGE Obrót S.A. Receivables from households account for about 20% of the consolidated balance of trade receivables, while receivables from corporate clients of PGE Obrót S.A. represent about 58% of the consolidated balance of trade receivables. On December 31, 2016 the share of the three most significant customers of the PGE Group amounted to approximately 10% of the total consolidated balance. Additional information relating to trade receivables is presented in note 26.5.1 of these financial statements.

Trade receivables comprise also electricity sales accrual.

LTC compensations

LTC compensations are described in detail in note 33.1 of these financial statements.

Other financial receivables

The value of other financial receivables consist mainly of disputed receivables described in note 28.4 of these financial statements.

25.1.2 Derivatives

All derivatives are recognized in the Company’s financial statements at fair value.

  As at December 31, 2016
    Recognized in profit or loss Recognized in other comprehensive income Assets Liabilities
DERIVATIVES AT FAIR VALUE THROUGH PROFIT OR LOSS        
Currency forward (5) - 1 -
Commodity forward (5) - 8 -
IRS transactions 2 - - 30
HEDGING DERIVATIVES        
CCIRS hedging transactions 48 80 231 -
IRS hedging transactions (1) 126 125 -
TOTAL DERIVATIVES 39 206 365 30
current     9 -
non-current     356 30
     
  As at December 31, 2015
    Recognized in profit or loss Recognized in other comprehensive income Assets Liabilities
DERIVATIVES AT FAIR VALUE THROUGH PROFIT OR LOSS        
Currency forward (4) - 7 1
Commodity forward 4 - - 33
IRS transactions 8 - - 55
HEDGING DERIVATIVES        
CCIRS hedging transactions (63) 52 43 -
TOTAL DERIVATIVES (55) 52 50 89
current     7 34
non-current     43 55

Commodity and currency forwards

Commodity and currency forwards relate mainly to CO2 emission rights trade.

IRS transactions

In the current reporting period PGE S.A. concluded 6 IRS transactions, hedging the interest rate on loans taken with a total nominal value of PLN 4,630 million. The Company applies hedge accounting to the above IRS transactions. The impact of hedge accounting was described in note 20.2 of these financial statements.

In 2014 PGE S.A. concluded 2 IRS transactions, hedging the interest rate on bonds issued with a nominal value of PLN 1 billion. Payments arising from IRS transactions are correlated with interest payments on bonds. Changes in fair value of IRS transaction are fully recognized in profit or loss.

In 2003, Elektrownia Turów S.A. (currently a branch of PGE Górnictwo i Energetyka Konwencjonalna S.A.) concluded IRS hedge transactions. These transactions are aimed to hedge variable interest rates (USD LIBOR 6m) on investment credits of USD 30, 40 and 80 million taken from Nordic Investment Bank to finance investments in Turów power plant. Changes in fair value of IRS transaction are fully recognized in profit or loss.

CCIRS hedging transaction

In connection with loans received from PGE Sweden AB (publ), PGE S.A. concluded CCIRS transactions, hedging both the exchange rate and interest rate. In these transactions, banks-contractors pay PGE S.A. interest based on a fixed rate in EUR and PGE S.A. pays interest based on a fixed rate in PLN. In the consolidated financial statements the relevant part of CCIRS transactions is recognized as a hedge of bonds issued by PGE Sweden AB (publ).

The Group applies hedge accounting to the above CCIRS transactions. The impact of hedge accounting is presented in note 20.2 of these financial statements.

25.1.3 Available-for-sale financial assets

The most significant positions of available-for-sale financial assets are shares in entities not quoted on active markets. The PGE Group is not able to estimate reliably the fair value of shares not-quoted on an active markets, therefore they are measured at cost less impairment losses.

25.1.4 Loans, borrowings, bonds and lease

 

  As at December 31, 2016 As at December 31, 2015
  Non-current Current Non-current Current
Loans and borrowings 5,839 332 1,459 214
Bonds issued 3,764 78 3,658 76
Lease - 1 1 1
TOTAL LOANS, BORROWINGS, BONDS AND LEASE 9,603 411 5,118 291
     

Currency position and interest

As at December 31, 2016

CurrencyReference rateValue in currencyValue in PLNFinal maturity date
PLN  Variable 6,381 6,381 September 2017 - December 2028; bonds - indefinite program, maturity date of the tranche issued – June 2018
Fixed 121 121 December 2017 - December 2028
TOTAL PLN   6,502 6,502  
EUR  Variable 129 569 June 2024
Fixed 642 2.842 June 2019 – August 2029
TOTAL EUR   771 3,411  
USD Variable 24 101 May 2019
TOTAL USD   24 101  
TOTAL LOANS, BORROWINGS AND BONDS  10,014  
 

As at December 31, 2015

CurrencyReference rateValue in currencyValue in PLNFinal maturity date
PLN Variable 1,759 1,759 January 2016 - December 2027; bonds - indefinite program, maturity date of the tranche issued - June 2018
  Fixed 156 156 October 2016 - September 2020
TOTAL PLN   1,915 1,915  
EUR Variable 140 597 June 2024
  Fixed 642 2,734 June 2019 – August 2029
TOTAL EUR   782 3,331  
USD Variable 35 137 August 2016 – May 2019
TOTAL USD   35 137  
CHF Variable 6 26 December 2016
TOTAL CHF   6 26  
TOTAL LOANS, BORROWINGS AND BONDS   5,409  
 

Loans, borrowings and bonds maturity

   As at December 31, 2016As at December 31, 2015
Within 1 year 412 291
From 1 to 2 years 1,374 288
From 2 to 3 years 2,502 1,225
From 3 to 4 years 373 2,262
From 4 to 5 years 1,042 202
Above 5 years 4,311 1,141
TOTAL LOANS, BORROWINGS AND BONDS ISSUED AS AT DECEMBER 31 10,014 5,409
     

The following table presents changes in interest bearing debt in the years ended December 31, 2016 and 2015:

 Year ended December 31, 2016Year ended December 31, 2015
AS AT JANUARY 1 5,409 5,045
CHANGE IN OVERDRAFTS (7) (135)
CHANGE IN LOANS, BORROWINGS, BONDS AND LEASE (excluding overdrafts) 4,612 499
Drawn loans, borrowings, leases / issued bonds 4,652 648
Repayment of loans, borrowings, leases / redemption of bonds (196) (176)
Accrued interest 134 99
Paid interest (113) (95)
Foreign exchange differences 135 23
AS AT DECEMBER 31 10,014 5,409

Loans and borrowings

Among loans and borrowings presented above as at December 31, 2016, the PGE Group presents mainly the following facilities:

  • investment credit facility taken out by PGE Górnictwo i Energetyka Konwencjonalna S.A. from Nordycki Bank Inwestycyjny (Nordic Investment Bank) to finance construction of 858 MW power blovk in Bełchatów Power Plant of PLN 569 million;
  • investment credit facilities taken out by PGE Górnictwo i Energetyka Konwencjonalna S.A. from Nordycki Bank Inwestycyjny (Nordic Investment Bank) and UBS Investment Bank AG to finance the modernization of power blocks no. 1-6 in Turów Power Plant in the total amount of PLN 101 million;
  • investment credit facility taken out by PGE S.A. from Bank Gospodarstwa Krajowego S.A. of PLN 1 billion with a maturity date of December 31, 2027. As at December 31, 2016, the Group used all available credit.
  • long-term loan agreement with a syndicate of banks composed of: BNP Paribas S.A., Société Générale S.A., Bank Handlowy w Warszawie S.A., ING Bank Śląski S.A., Bank Zachodni WBK S.A., mBank S.A., Powszechna Kasa Oszczędności Bank Polski S.A., Bank Polska Kasa Opieki S.A. concluded on September 7, 2015. Subject matter of the agreement is granting a loan in two parts, i.e. term loan facility and revolving loan facility. As at December 31, 2016 PGE S.A. used the whole term loan facility of PLN 3,630 million which falls on September 30, 2023. The revolving loan facility of up to PLN 1,870 million and falling on April 30, 2019 is available, but not used by PGE S.A.
  • loan agreement signed by PGE S.A. on December 4, 2015 of PLN 500 million with Bank Gospodarstwa Krajowego S.A. with the maturity date of December 31, 2028. As at December 31, 2016, PGE S.A. used the whole available credit.

Additionally, on October 27, 2015, PGE S.A. concluded two loan agreements with the European Investment Bank for the total amount of nearly PLN 2 billion. The amount of PLN 1.5 billion, obtained on the basis of the first of the two agreements, will be used for projects relating to the modernization and development of distribution grid. The funds from the second agreement, i.e. the remaining PLN 490 million, will be used to finance and refinance the construction of cogeneration units Gorzów Heat and Power Plant and Rzeszów Heat and Power Plant. The European Investment Bank loans will be available for disbursement over a period of up to 22 months from the date of signing of the agreements. The funds shall be repaid within 15 years from the date of the last tranche. As at December 31, 2016 the aforesaid loans were not used.

Additionally, the value of overdraft facilities at the disposal of the significant PGE Group’s companies amounted to PLN 2,001 million as at December 31, 2016. The repayment date of used overdraft facilities of the main PGE Group’s companies is February-April 2018.

Bonds issued

The Group has the ability to finance its own operations through two bond issue programs:

  • The bond issue program for the amount of PLN 5 billion directed towards investors from the Polish capital market. On June 27, 2013, the first non-public issuance of 5-year bonds under this program took place, the coupon bearer bonds with a variable interest rate. The nominal value of the issue was PLN 1 billion and the maturity of the bonds is June 27, 2018. On August 29, 2013, the bonds were floated in the Alternative Trading System organized by BondSpot S.A. and Giełda Papierów Wartościowych w Warszawie S.A. (Warsaw Stock Exchange).
  • The medium term Eurobonds Issue Program of EUR 2 billion established on May 22, 2014 by PGE S.A. together with PGE Sweden AB (publ), a 100% subsidiary of PGE S.A. Under the Program, PGE Sweden AB (publ) may issue eurobonds up to the amount of EUR 2 billion with a minimum maturity of 1 year. On June 9, 2014, PGE Sweden AB (publ) issued Eurobonds in the total amount of EUR 500 million and a five year maturity and on August, 1 2014 it has issued bonds in the amount of EUR 138 million and fifteen year maturity.

25.1.5 Trade and other financial liabilities

 As at December 31, 2016As at December 31, 2015
 Non-currentCurrentNon-currentCurrent
Trade liabilities - 976 - 1,119
Purchase of property, plant and equipment and intangible assets 12 1,225 25 1,608
Bails and security deposits received 21 65 9 81
Liabilities related to LTC - 1,253 - 1,131
Insurances - - - -
Other - 37 - 6
TRADE AND OTHER FINANCIAL LIABILITIES 33 3,556 34 3,945