25.1.1 Financial receivables

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.

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

Currency position and interest

As at December 31, 2016

As at December 31, 2015

Loans, borrowings and bonds maturity

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

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