Hansen Sicherheitstechnik AGVelbertBefreiender Konzernabschluss zum Geschäftsjahr vom 01.01.2022 bis zum 31.12.2022Grenevia S.A.Katowice/PolenGrenevia
Befreiender Konzernabschluss gem. § 291 HGB zum Geschäftsjahr vom 01.01.2022 bis zum 31.12.2022 Eine gesetzliche Pflicht zur Aufstellung eines Konzernabschlusses und Konzernlageberichts besteht für den Teilkonzern der Hansen Sicherheitstechnik AG nach § 291 HGB nicht, da die Hansen Sicherheitstechnik AG in den Konzernabschluss der Grenevia S.A., Katowice, Polen, einbezogen ist und dieser Konzernabschluss veröffentlicht wird. In 2018 wurden die Anteile an der Hansen Sicherheitstechnik AG an die Grenevia (früher Famur) S.A. übertragen, die nun den Konzernabschluss für den kleinsten Unternehmenskreis aufstellt. Der Konzernabschluss der Grenevia S.A. wird beim Amtsgericht Katowice hinterlegt (Registernummer 0000048716) und kann dort eingesehen werden. Der Konzernabschluss der TDJ S.A., die den Konzernabschluss für den größten Unternehmenskreis aufstellt, wird beim Amtsgericht Katowice hinterlegt (Registernummer 0000361419) und kann dort eingesehen werden. Die Hansen Sicherheitstechnik AG ist unmittelbare Tochtergesellschaft der Grenevia S.A. und wird zum 31. Dezember 2022 einschließlich ihrer Tochtergesellschaften in den Konzernabschluss der Grenevia S.A., der gemäß den International Financial Reporting Standards aufgestellt wird, einbezogen. Der Konzernabschluss der Famur S.A. wird in polnischer Sprache veröffentlicht - siehe dazu auch https://grenevia.com/report/jednostkowy-raport-grenevia-zarok-2022/. Der vorliegende Konzernabschluss und Konzernlageberichtsowie der Bestätigungsvermerk des Abschlussprüfers ist eine Übersetzung des polnischen Originals, welches in polnischer Sprache erstellt worden ist. Zum Zwecke der Befreiung nach § 291 HGB wurden der Konzernabschluss und Konzernlageberichtsowie der Bestätigungsvermerk des Abschlussprüfers ins Englische übersetzt. Im Falle von Abweichungen, Unstimmigkeiten und/oder Widersprüchlichkeiten ist die polnische Fassung maßgeblich. Directors' Reporton the operations of the Grenevia Group and Grenevia S.A. in 2022This Directors' Report on the Grenevia Group's operations in 2022 has been prepared on the basis of Section 70 and Section 71 of the Minister of Finance's Regulation on current and periodic information to be published by issuers of securities and conditions for recognition as equivalent of information whose disclosure is required under the laws of a non-member state, dated March 29th 2018 (Dz.U. of 2018, item 757, dated April 20th 2018). As a result of the structure of the Grenevia Group, the descriptions contained in this Report also relate directly to the operations and events at the Parent. Any discrepancies are expressly indicated by providing a relevant description and data. This document is a conversion to pdf format of the official Directors' Report on the operations of the Grenevia Group and Grenevia S.A. in 2022 that was issued in xhtml format The Polish original should be referred to in matters of interpretation. Translation of Grenevia Group's report originally issued in Polish. Summary of 2022Key financial indicatorsscrollen
* Adjusted for material non-recurring items affecting comparability, as described in section Description and assessment of factors and non-recurring events with a bearing on the result of operations for the financial year scrollen
Financial performance in 2022scrollen
FAMUR is transforming into Grenevia with a new business structureDevelopment of a new business structure in 2022, named Grenevia, officially presented at the beginning of 2023. Our vision: Grenevia has been established in order to responsibly and actively help build the path towards sustainable and low-carbon economy. Our mission: By consciously altering our business model we invest in promising green transition projects to build their value to the benefit of the world as a whole. Grenevia is an active investor that integrates and develops operations in the four business segments described below. scrollen
Grenevia Group's sustainable developmentscrollen
Letter from the President of the Management BoardDear Shareholders, 2022 brought significant developments both in Poland and across the world. For businesses, it was a period of heightened uncertainty, particularly due to the outbreak of war in Ukraine. The ongoing disruptions in supply chain logistics caused by the resurgence of the Covid-19 pandemic in China and the resulting constraints were accompanied by a visible slowdown in economic activity and inflation growth. At that time of dynamic economic and political shifts, we followed through with our strategy adopted in 2021 to transform into an organisation that invests in the green transition. For the Grenevia Group, 2022 was a year of focused hard work oriented towards developing a flexible and responsive business model and structure enabling us to adapt to the surrounding reality and unexpected events. On reflection, I can firmly state that despite some headwinds we successfully executed our plan according to the agreed schedule, achieving a revenue of PLN 1.3bn, which represents an increase of almost 30 % from 2021. FAMUR is transforming into Grenevia with a new business structure The key initiative with a crucial impact on our operations was the initiation of the process to implement changes in our organisational structure at the beginning of 2022. With a view to ensuring effective management of our existing businesses and seamless integration of new companies focusing on the green transition opportunities into our Group, in the first step we divided FAMUR's resources into two areas: the FAMUR operations segment (which prepares its own set of accounts) and the corporate management holding segment. The changes led to the creation of a new brand: Grenevia, which became an active investor that integrates and develops operations in four business segments, including: utility-scale solar projects and solar PV solutions for businesses supplied by Projekt Solartechnik; battery, energy storage and electric mobility systems offered by Impact Clean Power Technology; modern industrial automation equipment and solutions for the power distribution sector based on Elgór + Hansen's capabilities; and technologies and products for the mining and wind power sectors, which will continue to be offered under the FAMUR brand. The new structure and name are the outcome of the transformation pursued in line with the Group's new strategic directions announced in May 2021. Currently, our focus is on building the value of our individual segments, which support the evolution towards a low-carbon economy. Sustainable development and social responsibility of the Grenevia Group Concurrently, we have integrated ESG as a fundamental element of the Group's business strategy. This is reflected in our Sustainable Development Strategy for 2023-2030 presented in January 2023, which aligns with the DNA and operational mode of our entire organisation. We are confident that the sustainable path we have chosen will create long-term value for all stakeholders of the Group by effectively balancing social, environmental, and economic concerns. The Sustainable Development Strategy, developed in the second half of 2022 in collaboration with the consulting firm EY, combines the Group's business model transformation strategy with an ESG agenda and relies on five pillars reflecting sustainable development from the perspective of Grenevia, which will guide our activities in this area going forward. The selection of those pillars was preceded by a thorough analysis of global megatrends, with a focus on emissions reduction and responsible resource use as drivers for the energy transition in the global economy. The strategy directly supports the UN Sustainable Development Goals, emphasising the Group's commitment to tackling global problems. By 2030, we want to reduce greenhouse gas emissions from our existing operations by 40 %. Furthermore, development of our new business segments, mainly PV and E-mobility, will translate into emission savings of up to 2.3 million tonnes of CO 2. By the end of 2024, we aim to have an approximately 70 % share of revenue from sources other than the thermal coal sector and an energy mix with an approximately 35 % share of renewables. By the end of 2025, 70 % of our key supplier relationships will be based on the Grenevia Sustainability Code. The Grenevia Group has been and will continue to be a socially responsible organisation, and we aim to grow our business sustainably, with due regard paid to the interests of all stakeholders, in particular our shareholders, employees and local communities. In conducting our activities, we are guided by the sense of responsibility towards our external stakeholders and attach great importance to safety and environmental protection. WAR IN UKRAINE Russia's aggression against Ukraine, an unprecedented event in the recent history of Europe, underscored the importance of solidarity and support for the Ukrainian community. Our employees' dedication brought tangible results in the form of numerous aid initiatives for victims of the war. After the imposition of sanctions following the outbreak of the war, FAMUR took a responsible and professional approach to fulfilling the resulting obligations. We chose to withdraw from newly signed contracts for the supply of machinery to be used in the territory of the Russian Federation, totalling approximately PLN 130m. We also resolved not to bid for any new longwall system delivery contracts. As a result, the total value of bids for the supply of new machinery and equipment to the Russian market that FAMUR has foregone since the start of the war is estimated to be around EUR 200m. We limited our activity to implementing existing contracts and to supplying spare parts and equipment primarily intended to meet warranty and post-warranty obligations by our subsidiary in Russia as well as activities enabling it to complete those tasks. After a number of events occurred as a result of which FAMUR became unable to use its powers to exercise influence on the operations and performance of OOO FAMUR in accordance with the International Accounting Standards, at the end of August 2022 we reported loss of control of our Russian maintenance company and reclassified it to discontinued operations, and in March 2023 we started the divestment process. Launch of operations in the energy storage and electric mobility sectors During the latter part of 2022, we worked intensely on expanding our business activities in line with the adopted development directions. On November 8th 2022, we acquired an equity interest in Impact Clean Power Technology for approximately EUR 59m. The shares represented 51 % of the company's share capital, carrying around 59 % of total voting rights at its General Meeting. The transaction was financed with proceeds from the PLN 400m issue of green bonds in 2021, which had been earmarked for investments in the sustainable development of the Group in accordance with the Green Bond Framework. Impact Clean Power Technology is active in the area of manufacturing and integration of advanced energy storage systems based on the lithium-ion cell technology, and plans to develop hydrogen fuel cell systems. It is also a supplier of utility-scale energy storage solutions for the renewable energy sector and industrial power supply systems. In 2022, the company generated revenue of PLN 304m (of which PLN 64m was included in the Grenevia Group's consolidated revenue from the moment of Impact's first-time consolidation, i.e. from mid-November 2022). Impact's business model leverages economies of scale generated by the manufacture of custom-made products and offering them to wider customer groups. To accommodate the fast market growth and broaden its customer base, the company aims to significantly increase its annual production capacity by building GigafactoryX. This large-scale manufacturing plant will be dedicated to meeting the requirements of buyers of battery systems for electric public transport vehicles, primarily e-buses, industrial e-vehicles, and utility-scale energy storage facilities. The project is expected to rise Impact's annual production capacity to more than 1GWh in 2024, and to approximately 2GWh or even 4GWh in 2027, in line with demand growth. Investments in new production capacities are also intended to allow the company to branch out into related markets such as electric trucks, heavy industrial vehicles, and hydrogen-powered railway locomotives. Other growth initiatives pursued by Impact include the New Life for Batteries project (repurposing of used EV batteries in stationary energy storage systems, which have longer charging cycles), development of utility-scale energy storage facilities, and use of hydrogen technologies in battery systems. Launch of wind-turbine gearbox repair/refurbishment and maintenance services Another important initiative designed to change the Group's profile was undertaken in our traditional business area, i.e. the FAMUR segment. Based on our existing machine park and the segment's many years' experience in engineering, manufacturing and repairing gearboxes for various industry applications, we launched a range of services consisting in repair/refurbishment and maintenance of gearboxes used in wind turbines with capacities of up to 2MW. With our current scope and scale of operations, this did not require any major capital expenditure. In 2022, having obtained the necessary certificates and authorisations FAMUR repaired a number of gearboxes, and completed an operational start-up of the first gearbox with a pilot operation monitoring system. Streamlining of the legal and organisational structure of the PV segment In 2022, we streamlined the legal and organisational structure of our PV segment to improve its operational efficiency (for more information, see further parts of this Report). An important step towards this goal was the purchase on July 1st 2022 of approximately 14 % of shares in Projekt Solartechnik (PST) from FIMM Fundusz Inwestycyjny Zamknięty, a related party of Maciej Marcjanik. As a result of the transaction and the prior increase in the share capital of FAMUR SOLAR effected by Grenevia, Grenevia S.A. now holds directly and indirectly 52 % of shares in PST S.A. Operating results for 2022 An overview of our operating performance in each business segment is presented based on the new structure of the Grenevia Group. In the FAMUR segment, our activity focused on expanding our presence in promising markets, including Indonesia, North America and China. A slight recovery was also seen in the domestic market, although it remains under the pressure of changes resulting from the adopted programme to phase out thermal coal mines. The segment's total backlog (supplies of machinery and equipment and leases in accordance with the effective terms of the contracts) as at the end of 2022 amounted to approximately PLN 902m. In the Power Engineering segment, we focused on maintaining our position in the coal mining industry and building our presence in the renewable energy sector, our new area of operations. As at the end of 2022, the segment's total backlog was PLN 55m, including PLN 38m in contracts for the FAMUR and PV segments. Our activities in the PV segment mainly involved consistent expansion of the portfolio of new projects, development of further projects (pre-construction phase), construction and start-up of solar PV farms, and acquisition of the first corporate Power Purchase Agreements (cPPAs). We also started the process to build foreign structures by setting up a PV project development branch in Germany. We intend to open further branches in other markets to enable international expansion of the segment. From the beginning of 2022, our solar PV project portfolio grew by nearly 1.5 GW and at the year end comprised projects at various stages of development with an estimated total capacity of almost 3.1 GW. Solar PV farms with a total capacity of 91 MW were put in operation, while 124 MW was under construction (or completed but not launched), and further 65 MW was in the development (pre-construction) phase. Despite exercising due care, the transaction to sell a 184 MW solar PV farm portfolio to Alternus Energy Group subsidiaries was not completed due to the buyer's fault. Currently, Projekt Solartechnik is actively looking for other buyers for the farms. The E-mobility segment focused chiefly on building the contract portfolio: we concluded framework contracts for regular deliveries with a number of customers, including Solaris and Voith, and secured the first larger contract in the Asian market having won a tender procedure in Hong Kong with our partner ADL. Impact will supply bus batteries under the contract. Thanks to cooperation with the Group, the production efficiency and effectiveness at the current location was increased three times, from 0.2GWh to 0.6 GWh, with a concurrent improvement in the product quality. In order to ensure stability of the supply chain, we intensified our efforts to diversify suppliers of key components in accordance with the announced European Supply Chain strategy. Also, construction of GigaFactoryX in Pruszków near Warsaw was started: we purchased the property and approved the detailed design. Financial performance in 2022 Based on the operating activities described above, the Grenevia Group generated revenue of PLN 1,296m in 2022, which means a year-on-year increase of 27 %, achieved on the back of higher revenue in the FAMUR segment, stable revenue from external customers in the Power Engineering segment, and first-time consolidation of the new PV and E-mobility segments. Export revenue reached 40 %, and was mainly attributable to supplies to the US, Indonesia, and China. The share of revenue from Russia in total revenue fell to approximately 9 % (from 23 % in 2021); this revenue was generated in connection with the completion of contracts signed before the outbreak of the war in Ukraine. The higher revenue translated into a PLN 103m increase in EBITDA, to PLN 406m, with EBITDA margin at 31 %. As a result, the Group reported a net profit of PLN 120m. Operating cash flows were negative, at PLN -8m, which was due mainly to expenditure on the development and construction of solar PV farms. As at the end of 2022, our net debt stood at PLN 127m, and was chiefly related to the purchase of shares in Impact. Challenges in 2023 In 2023, the focus of our activities will be on developing the new segments and scaling their operations as quickly as practicable. The segments are independent from one another and thus have their own priorities. In E-mobility, our efforts will be centred on the construction of GigafactoryX, expansion of the customer portfolio, and implementation of the European Supply Chain strategy. The goals for the PV segment include continued active effort to build a portfolio of projects and construct solar PV farms, further expansion on international markets, intense work to secure buyers for the finished farms, and launch of a process to build an own portfolio of solar PV projects operated in accordance with the IPP model to generate and sell electricity. In addition, we started to optimise our project execution process and reduce project execution costs. In the Power Engineering segment, we expect to build a portfolio of contracts with mining sector customers and further develop our range of products and services for the renewable energy sector. The FAMUR segment will consistently take steps to seek new orders in its existing and new markets, reinforce its after-sales services, continue to standardise the fleet of shearer loaders, and develop the wind turbine gearbox repair/refurbishment and maintenance business. However, we expect the share of the segment's export revenue to decline in the coming quarters as a result of the ongoing armed conflict in Ukraine and our decision to stop bidding for new contracts for equipment deliveries to the Russian market, where FAMUR had enjoyed a strong competitive position and a significant market share. 2023 will also see active implementation of our Sustainable Development Strategy in line with the schedule adopted at the beginning of this year. Overview of the Group's businessStrategy and development directionsOverviewThe Grenevia Group (formerly FAMUR) is an active investor that integrates and develops operations in four business segments: the segment of utility-scale solar projects (PV) based on Projekt Solartechnik; the segment of battery systems for electric mobility and energy storage (E-mobility) based on Impact Clean Power Technology; the segment of modern solutions for the power distribution sector (Power Engineering) based on Elgór + Hansen; and the segment of solutions for the mining and wind power sectors based on the FAMUR brand. The new business model is the effect of consistent implementation of the Group's strategy announced in May 2021, which aims to transform the Group from a leading producer of mining machinery into a major investor in green transition. The Group creates long-term value in line with the vision of responsible and active support for the development of a sustainable low-carbon economy. Its mission is to consciously alter its business model by investing in promising green transition projects to build their value to the benefit of the world as a whole. On February 16th 2023, the Extraordinary General Meeting resolved to change the Company name from FAMUR Spółka Akcyjna to Grenevia Spółka Akcyjna. The change was registered by the District Court for Katowice-Wschód in Katowice, 8th Commercial Division of the National Court Register, on April 3rd 2023. Growth strategyThe accelerating global transition towards low-carbon economies required a change to the Group's business model that was largely based on revenue generated in the Polish thermal coal mining sector. In May 2021, the Management Board decided to modify the Company's strategic directions and dividend policy (see Current Report No. 23/2021 of May 25th 2021). The new strategic directions are aimed at tapping the potential and opportunities presented by Poland's energy transition and will focus in particular on: scrollen
Implementation of those goals to adapt the Group's business profile to the economic environment evolving in line with the New Green Deal was made possible by the capabilities built by the Grenevia Group in the industrial and energy sectors, the scale of its projects, unique resource base and strong financial position. The Grenevia Group's entry into the new sectors and rapid scaling of its operations will be supported by cooperation with the TDJ Group, a stable and long-term investor in Grenevia S.A. Thanks to those measures, the estimated share of revenues related to the thermal coal sector is expected to fall below 30 % by 2024 (from some 51 % in 2022). Development in the new areas will be financed with profits, available EU funds and other financial instruments designed to support green energy projects. The first stage of the Grenevia Group's expansion in new directions will require reinvestment of profits, which necessitates a change to our dividend policy. Dividend distributions, if any, will depend on the amount of profits earned in a given year, the investment attractiveness of new projects and growth prospects, as well as the financial and liquidity situation of the Grenevia Group. The pursuit of the modified strategic directions, and thus the likelihood of achieving the expected benefits, may be affected by the following factors: a significant deterioration of the macroeconomic environment, major change in the announced plans for Poland's energy transition, considerable acceleration of the programme to phase out thermal coal mines in Poland, other extraordinary one-off events with a bearing on the Grenevia Group's business, significant changes to the laws and regulations currently in force and, above all, major geopolitical crises in the region and in the countries where the Group operates. The Management Board of Grenevia S.A. monitors the current market situation on an ongoing basis, adjusting its operating activities accordingly, and analyses their impact on the development directions adopted for the Group. Strategy implementationThe Grenevia Group consistently pursues its strategy and diversifies operations to alter its business profile towards investing in green transition. The first step was the entry into the sector of utility-scale solar projects in 2021. The Grenevia Group's PV segment is currently comprised of the Projekt Solartechnik (PST) Group companies, which offer development and turnkey delivery of solar PV projects on an EPC basis, i.e. from development, design and engineering of a project to procurement of necessary components, to construction and maintenance of the project facilities. We embarked on another diversification initiative in 2022, as the FAMUR segment launched operations in the wind power sector, leveraging its many years' experience, resources and competences in the engineering and construction of equipment for industry. FAMUR started to offer repairs/refurbishment and maintenance of gearboxes for wind turbines with capacities of up to 2MW. In 2022, we also developed a new strategy for our portfolio company Elgór + Hansen, forming the core of the Group's Power Engineering segment. Its key role it to increase business diversification and develop power distribution solutions for the power industry, including the renewable energy sector. Towards the end of 2022, through our investment in Impact Clean Power Technology we made another important step by entering another promising area of the renewable energy industry, i.e. battery systems for electric vehicles and energy storage. Impact manufactures and integrates advanced energy storage systems based on the lithium-ion cell technology, develops hydrogen fuel cell systems, and supplies utility-scale energy storage solutions for the power sector. Those steps led to the emergence of a multi-business corporate group, which required redefining our organisational framework. The Grenevia Group currently operates in four business segments: utility-scale solar projects (Projekt Solartechnik); battery systems for electric mobility and energy storage (Impact Clean Power Technology); power distribution solutions (Elgór + Hansen); solutions for the mining and wind power sectors (FAMUR). Each of the business segments forms a separate operational and financial structure. A detailed description of the achievements and development of the individual segments is provided below. Grenevia Group Sustainable Development Strategy for 2023-2030 In January 2023, we announced our Sustainable Development Strategy for 2023-2030, which was developed in the second half of 2022 with the support from the consulting firm EY. It integrates the strategy for transforming the Group's business model with an agenda of activities for the benefit of the public, climate, employees and shareholders, in line with the concept of green path adopted by Grenevia. Our strategy directly supports the UN Sustainable Development Goals, emphasising the Group's commitment to tackling global problems. For detailed information on the Grenevia Group Sustainable Development Strategy for 2023-2030, see the non-financial report. Changes in the organisational structure of the Grenevia GroupIn order to enable achievement of the adopted strategic objectives towards building a business that promotes green transition, the Group's organisational structure needed to be adjusted. The new structure was developed in 2022 and announced at the beginning of 2023. The key changes made to the Grenevia Group structure in 2022 were as follows: scrollen
The table below presents material operating entities of the Grenevia Group as at December 31st 2022 and their allocation to the respective operating segments. Only fully consolidated companies are included. scrollen
For a description of the FAMUR Group's organisational structure and its changes, see Notes 8 and 9 to the consolidated financial statements of the Grenevia Group for the year ended December 31st 2022. Overview of the operating segments' businessThe business of the Grenevia Group's segments is presented below. Segment of solutions for the mining and wind power sectors ("FAMUR segment")Manufacturer of underground longwall mining machinery and systems supplied to customers globally, with a portfolio of onshore wind power solutions gradually expanded since 2022The FAMUR segment, which provides solutions for mining and wind power generation, operates under the FAMUR brand. Its key product lines comprise longwall systems, roadheaders and belt conveyors for underground longwall mining applications. The segment's offering includes also design and delivery of IT systems for management of coal mining processes. The FAMUR brand owes its global recognition to a successful strategy of gradually increasing its presence on international markets. FAMUR companies and service centres based in Kazakhstan, China and Germany guarantee ongoing customer service and fast response in line with customer expectations. The segment is constantly raising the bar on service quality and extending its outreach to new locations where reliable mining and industrial systems are needed. Dalbis, a member of the Primetech Group and part of the FAMUR segment, also provides specialist borehole drilling services for various applications, including for engineering and geotechnical projects. Since 2022, measures have been taken to leverage the segment's existing manufacturing facilities to provide wind turbine gearbox maintenance services. Market situation and operations of the FAMUR segment in 2022The number of orders for mining equipment offered under the FAMUR brand reflects the currently prevailing and expected global trends, mainly in the prices of coal and other energy commodities in the short and medium term. In 2022, following the outbreak of war in Ukraine and imposition of sanctions on Russia, which significantly contributed to reducing the supply of coal, the prices of thermal coal and metallurgical (coking) coal hit all-time highs. In the last quarter of 2022 and in early 2023, the situation on the coal market gradually stabilised, translating into improved availability and lower prices of the commodity. However, coal prices still remain at significantly higher levels than at the end of 2021. After the imposition of sanctions following the outbreak of the war, FAMUR took a responsible and professional approach to fulfilling its resulting obligations. A decision was made to withdraw from newly signed contracts for the supply of machinery to be used in the territory of the Russian Federation, totalling approximately PLN 130m. FAMUR also resolved not to bid for any new longwall system delivery contracts. As a result, FAMUR estimates that since the start of the war it has foregone bidding for contracts for delivery to the Russian market of around EUR 200m worth of new machinery and equipment. Its activity was limited to implementing existing contracts and to supplying spare parts and equipment primarily intended to meet warranty and post-warranty obligations by the Group's subsidiary in Russia as well as activities enabling it to complete those tasks. After a number of events occurred as a result of which FAMUR became unable to use its powers to exercise influence on the operations and performance of OOO FAMUR in accordance with the International Accounting Standards, at the end of August 2022 we reported loss of control of our Russian maintenance company and reclassified it to discontinued operations, and in March 2023 we started the divestment process. In the 12 months ended December 31st 2022, the FAMUR segment's commercial efforts on foreign markets focused mainly on increasing the Group's presence in North America, Indonesia and China. The key development driver for export markets is the growing pressure from Chinese companies, with which the segment competes in product quality and aftermarket services. We expect the share of the segment's export revenue to decline in the coming quarters as a result of the ongoing armed conflict in Ukraine and our decision to stop bidding for new contracts for the supply of powered roof support systems and scraper conveyors to the Russian market, where FAMUR had enjoyed a strong competitive position and had a significant market share. Although a slight recovery is seen on the domestic market, it remains under the pressure of changes resulting from the adopted programme to phase out thermal coal mines. In June 2022, FAMUR's bid for mining equipment lease, with the value of the lease contract estimated at PLN 96m, was selected in a tender procedure held by a major Polish customer. In addition, a number of lower value contracts were concluded for lease and delivery of machinery and roof supports and aftermarket services. In the 12 months ended December 31st 2022, the FAMUR segment's commercial efforts in Poland and abroad translated into almost PLN 1,036m in newly secured contracts for the delivery of machinery and equipment and for aftermarket services. In the fourth quarter of 2022 alone, the total value of newly secured orders in Poland and abroad was approximately PLN 357m. As at the end of December 2022, the total value of the FAMUR segment's backlog (supplies of machinery and equipment and leases in accordance with the effective terms of the contracts) increased to approximately PLN 902m from about PLN 763m as at September 30th 2022. Competitive environmentThe FAMUR brand competes mainly with specialised Chinese companies offering similar solutions, such as ZMJ and BMJ, as well as global players active in the underground mining equipment market such as Caterpillar and Komatsu-JOY. Growth strategy for the FAMUR segmentThe accelerating energy transition in Poland and globally is worsening the outlook for the mining machinery sector. FAMUR's strategic response to this trend is to continue to generate revenue from existing mining assets while exploring opportunities to leverage the Group's manufacturing facilities, resources and know-how to secure new revenue streams from other promising industries. This is to be achieved by: scrollen
The FAMUR segment offers a complete portfolio of advanced solutions for the underground soft rock mining industry, including:Roof supports and shearer loaders This product category comprises shearer loaders, powered roof supports and scraper conveyors. These products can be purchased on a standalone basis or in combination with other equipment to form longwall systems for mining coal from seams up to 6 metres thick. Thin coal seams, varying in thickness from 1.2 metre to 1.7 metre, can be mined using the specialist longwall system Mikrus. FAMUR's portfolio also includes hydraulic actuators and controls, in particular hydraulic supports, pilot controls, and power hydraulics. Roadheaders Roadheaders form part of a gallery system and are used primarily to excavate galleries and drill tunnels. FAMUR's portfolio in this area also includes drilling rigs, drills, dinting loaders and loaders used in underground mines. Underground transport and bulk materials handling systems FAMUR manufactures equipment for transport and handling of bulk materials used in underground mines and other operations. The product mix for the hard coal mining industry includes underground belt conveyors, surface belt conveyors, as well as various underground means of transport for logistics purposes. A description of the complete product range, including the capacity and technical parameters of each product, is available on FAMUR's website at www.famur.com/oferta.. Service in Grid Monitoring Area (SIGMA) Following Industry 4.0 trends, the FAMUR segment makes an ongoing effort to improve the quality standard of its maintenance operations by supporting customers and implementing state-of-the-art tools for continuous remote monitoring of the condition of machinery and equipment, which enables prompt response from maintenance services (predictive maintenance). One result of those efforts is Service in Grid Monitoring Area (SIGMA) - a solution based on the use of modern technologies such as Virtual Reality (VR), webex, smart glasses and smart mining. The SIGMA room allows users to collaborate online with customers, provides real-time analysis of machine parameters, and enables users to connect with an operator equipped with field service smart glasses and located anywhere in the world. Since 2021, the SIGMA room has been hosting training sessions, conferences and meetings with both Polish and foreign customers. Initiatives to use the operational resources of the FAMUR segment to offer wind-turbine gearbox repair/refurbishment and maintenance servicesIn order to fully exploit FAMUR's operational resources and tap new sources of revenue in the renewable energy sector, a decision was made to develop a portfolio of repair/refurbishment services for onshore wind-turbine gearboxes. The competitive strengths and capabilities of FAMUR in this respect are primarily based on its long track record of manufacturing gear trains and drive trains for various sectors and an in-house dynamometer enabling testing of any type of gearbox. The portfolio is being developed and now includes on-site assessment of the technical condition of the transmission system on the customer's premises, complete repair/refurbishment and maintenance, and load testing in the dynamometer. Services offered in the current phase of the project focus on gearboxes with a capacity of up to approximately 2MW. The implementation of the services did not require any additional capital expenditure as they are provided using the existing machinery and manufacturing expertise. On September 12th 2022, FAMUR and Energa Wytwarzanie signed an agreement on cooperation in the repair and maintenance of equipment necessary for the continuous and efficient operation of renewable power generation sources. As part of the parties' continued cooperation, in December 2022 FAMUR completed a project involving refurbishment of turbine gearboxes of the Karścino wind farm and implementation of a pilot system to monitor gearbox operation. The cooperation is being gradually expanded to include repair/refurbishment of wind turbine frequency inverters and delivery of gearbox operation monitoring and diagnostics systems. The development work planned in this area will include increased effort to secure repair contracts from new customers, activities to develop the concept for a solution enabling on-site gearbox monitoring on the customer's premises to proactively identify any need for maintenance work (predictive maintenance), and the use of the Basic GWO certification obtained by our maintenance teams. Additional services are also being developed, including maintenance of wind turbine components other than gearboxes. Distribution model and key customersThe FAMUR segment sells its products and services directly to companies specialised in the mining of soft rocks, such as coal (thermal and coking) and potash. FAMUR believes that there is no material risk of material dependence on any single customer. However, its sales are largely concentrated in a single sector of the economy. Domestic customers accounting for over 10 % of the segment's revenue in 2022 were: Polska Grupa Górnicza S.A. (20 % of sales), Jastrzębska Spółka Węglowa S.A. (17 % of sales) and CENTURY MINING, LLC (15 % of sales). There are no formal equity links between the above entities and the Company. Supply chainThe FAMUR segment has access to diversified sources of raw materials and is not dependent on one or more suppliers. Thanks to the business development efforts undertaken in previous years, as well as the measures taken in 2022 to counteract the effects of the COVID-19 pandemic and the war in Ukraine, it can now use a significantly wider range of supply sources for key materials. This improves the effectiveness of procurement processes through economies of scale and more efficient management and logistics systems. Due diligence is applied in the process of selection of suppliers and components. All suppliers are required to confirm that they have read and understand, and commit to comply with, the requirements set out in FAMUR's Code of Ethics and Anti-Corruption Policy. The machinery manufactured by the segment is delivered directly to final users. FAMUR outsources such deliveries as well as intra-Group deliveries to reliable transport operators. R&D activities in the FAMUR segmentIn 2022, the FAMUR segment engaged in development work relating to wind power generation and improvements to its existing products for the mining industry. The first wind energy project comprised design and implementation of a metering system to be used for predictive maintenance of wind turbine transmissions. It enables monitoring of the gearbox's condition from any location using a computer's web browser or smartphone. A strong emphasis was placed on ensuring that the service stands out from solutions offered by the competition. As regards products for the mining sector, the FAMUR segment focused on the development and standardisation of FS300 and FS400 shearer loaders, which are its flagship product in terms of software, modification of certain algorithms, hardware, and development of data transmission systems. Another key project involved evolution of the Mikrus longwall system. Considering the uncertain epidemiological situation in the world, including in China, as part of the activities relating to the supply of the second Mikrus system to a Chinese customer a number of improvements were made to facilitate remote deployment of the system, including in particular remote diagnostics and remote parameter setting. Financial performance of the FAMUR segment - solutions for the mining and wind power sectorsSegment's revenue from external customers scrollen
In the 12 months ended December 31st 2022, the FAMUR segment's revenue from external customers was PLN 1,064m, up by PLN 228m (27 %) year on year. Revenue from the supply of machinery and equipment rose by PLN 185m (67 %) year on year, to PLN 461m. Recurring revenue (aftermarket services and leases) increased by PLN 36m (6 %) year on year, to PLN 596m. Other revenue amounted to PLN 7m. In the three months to December 31st 2022, the FAMUR segment's revenue from external customers was PLN 315m, having increased by PLN 70m (29 %) year on year. Revenue from the supply of machinery and equipment rose by PLN 48m (48 %). Recurring revenue (aftermarket services and leases) went up by PLN 22m (15 %). Sales by key geographies in the FAMUR segment In the 12 months ended December 31st 2022, export sales of the FAMUR segment accounted for approximately 41 % of the segment's total revenue, vs. 34 % a year earlier. Sales to foreign markets were mainly to the United States, Indonesia and China (approximately 28 % of total revenue). CIS and Russia accounted for approximately 11 % of total revenue (revenue from the Russian market was earned mainly under contracts concluded in previous periods). Sales to other countries represented about 2 % of total revenue. Profitability of the FAMUR segment scrollen
Gross profit for the 12 months ended December 31st 2022 in the FAMUR segment was PLN 411m, up by PLN 125m year on year. The increase in gross profit led to an improvement in both operating profit and EBITDA, which stood at, respectively, PLN 290m (up by 2.2x year on year) and PLN 433m (up by 42 % year on year). EBITDA margin for the 12 months ended December 31st 2022 and the three months to December 31st 2022 was 41 % (up by 5pp) and 42 % (up by 7pp), respectively. Segment of power distribution solutions ("Power Engineering segment")The Power Engineering segment is led by Elgór + Hansen S.A. ("EH"), which can boast more than 25 years of experience in developing industrial solutions. The segment encompasses engineering, manufacturing, delivery, and maintenance of electricity transformation and distribution equipment, catering to a diverse range of industries, such as mining, including in potentially explosive atmospheres, steelmaking, and food processing and production. Based on the new growth strategy developed in 2022, and in order to capitalise on the anticipated growth in green energy investments by utilising its existing capabilities, in 2022 EH launched the manufacture of containerised substations, including lines dedicated to utility-scale renewable energy projects. Drawing on its extensive experience and development and manufacturing resources, EH also offers products and services related to IT/OT systems, SCADA, control and instrumentation systems, electronics, power electronics, and automation for industrial and power facilities. EH's offerings comprise both proprietary solutions and those from leading global providers, ensuring comprehensive customer support at every stage of any project - from design and engineering to construction, documentation, and operation - both in Poland and in other markets. Market situation and operations of the Power Engineering segment in 2022As in the case of the FAMUR, in 2022 the number of orders and performance against the targets in the Power segment was closely tied to the developments in the mining and power industries. The high demand and rising coal prices had a positive effect on the demand for Elgór + Hansen's products. While the short-term climate is favourable, the situation on the coal market in the medium to long term will depend on the regulatory environment in Poland and the European Union and the availability of substitute energy sources in the context of the war in Ukraine. The growing significance and attractiveness of the renewable energy industry, driven by the need to guarantee energy security for Poland and the EU, provided an additional incentive to diversify Elgór + Hansen's business to embrace green transition in line with the strategic directions adopted by the Grenevia Group. Development work initiated in 2021 to expand the company's portfolio with solutions for the renewable energy market was supported by increased sales and marketing activities in 2022. As a result, Elgór + Hansen secured the first contracts, including for its containerised substations. Work will continue in 2023 to build a broader, comprehensive product portfolio in order to increase production and maximise revenue streams from the power distribution sector, in particular the renewable energy segment. Competitive environmentElgór + Hansen competes with different companies depending on the product category. In the area of power engineering solutions for the mining sector, the competition includes Becker Warkop, Martech, Unister and Elektrometal. The company enjoys significant competitive advantage in this segment due to the end-to-end nature and quality of its products, well-established maintenance services, and brand recognition. The competitors in the segment of power supply and distribution solutions for the power distribution market, including the renewable energy sector, are ZPUE, Elektromontaż Lublin, Revico and Emiter. It is Elgór + Hansen's ambition to consistently develop its products and grow its scale of operations on this new market. Growth strategy for the Power Engineering segmentIn 2022, the Power segment, represented by Elgór+ Hansen, developed a new long-term growth strategy, which provides for diversifying and continually expanding its product and service range beyond solutions tailored solely to the traditional customer base in the hard coal mining sector. Elgór + Hansen aims to focus on the manufacturing and delivery of comprehensive, advanced engineering solutions for power distribution, energy efficiency improvement, energy visualisation and energy management systems. The products will be dedicated to institutional clients from the industry and power sectors, with a particular emphasis on the power generation and distribution sector, including primarily the renewable energy segment. Consistent implementation of the plans led to the successful development and the first sale of containerised substations for solar PV farm operators. At the same time, the segment will seek to maintain its leading position in mining solutions, which will ensure stable sources of funding for the new business ventures. Other key elements of Elgór + Hansen's strategy include building competitive edge based on the Grenevia Group's ESG strategy, operational excellence achieved through lean management, improvement of team competence and stability, and digital transformation. Elgór + Hansen's products and services for the power engineering sectorElgór + Hansen is a supplier of technical solutions in the fields of power supply, automation and control of machinery and industrial facilities, including full visualisation, remote monitoring and archiving of processes. It implements projects involving electrical and electronic equipment, automation and IT systems, including ATEX solutions for potentially explosive atmospheres EH offers the manufacturing and delivery of power equipment for underground mining facilities, complete power supply systems and automation solutions for facilities, machinery and installations used in conveyor systems, as well as high-performance mining face, longwall and plough systems across all voltage levels. The company's offerings comprise both proprietary solutions and those from leading global providers. The proprietary solutions include a recent addition: containerised substations for solar power plants. This product marked the beginning of EH's business transformation and its shift towards the power engineering industry, including the renewable energy sector. The company provides end-to-end services, including engineering, manufacturing, assembly and construction, implementation of software, repair and maintenance on a 24/7 basis, both in Poland and abroad. EH also has EMS engineering and manufacturing capabilities. It designs and assembles electronic equipment based on its many years' experience and a modern, fully automated production line, purchased in 2021. Full traceability of the production process is also ensured. A description of the complete product range, including the technical parameters of each product, is available on Elgór+Hansen's website at www.elgorhansen.com Operating and commercial activities in the Power Engineering segment in 2022In 2022, the Power Engineering segment focused on maintaining its position in the coal mining sector and building solutions for power distribution, especially in the renewable energy segment. Almost PLN 125m worth of contracts were secured, up by PLN 54m (77 %) relative to 2021. Over PLN 14m were contracts from customers in non-mining sectors. The segment's total backlog rose by PLN 27m (95 %), to PLN 55m at the end of 2022, including PLN 38m in contracts for the FAMUR and PV segments. Growing demand for repairs of underground mining equipment translated into higher volumes of aftermarket services provided, which was accompanied by a drop in revenue from the supply of new equipment. The segment also earned revenue from industry and the renewable energy sector, mainly from the supply of switchgear and controlgear for industrial machinery. An important development in 2022 was the launch of supply of transformer substations for solar PV farms built by Projekt Solartechnik. Distribution model and key customersElgór + Hansen's customers expect end-to-end services, from engineering, to delivery and uninterrupted operation of highly automated equipment, and require intuitive products that are fully accessible to remote maintenance services. The company's key customers are operators of underground mining facilities in Poland producing hard coal (thermal and coking coal) and companies active in the area of extraction of raw materials. External customers accounting for more than 10 % of the segment's revenue are JSW (17 % of sales) and KGHM Polska Miedź (13 % of revenue). Other significant customers include LW Bogdanka, Tauron Wydobycie, PGG, PG Silesia and Węglokoks Kraj. Thanks to cooperation with the FAMUR segment, Elgór + Hansen's products are exported to major foreign companies extracting raw materials with deep mining methods in countries such as Argentina, Italy, Indonesia, and China. The company discontinued exports to Russia in connection with the economic sanctions, which led to a marked reduction of its trade volumes outside Poland. Elgór + Hansen's products are distributed in Poland based on the direct sales model, and in other countries through the FAMUR segment's trade offices and agents representing the company under independent agency contracts. In the future, the distribution model in Poland will be adjusted to the evolving scope of the company's operations. Supply chainThe segment has access to diversified sources of raw materials and is not dependent on one or more suppliers. The supplier selection process follows the rules adopted by the Group and is preceded by an analysis of bids and proposals in terms of consistency with the technical and quality requirements. In 2022, the semiconductor market crisis and hikes in the prices of metals and materials used in the manufacturing of components for the power sectortranslated into higher prices of materials and components and longer delivery times. Consequently, the company actively sought new suppliers and made ad hoc purchases to secure the required materials. R&D activities in the Power Engineering segmentIn 2022, Elgór + Hansen was engaged in research and development on products designed specifically for the renewable energy industry. The effort resulted in the creation of a containerised substation for utility-scale solar PV projects with a capacity of 1MWp. Thanks to the technologies used in its production and the additional service KlimatDlaStacji, the solution aligns with the concept of sustainable development. Work also continued on the development of the SCADA-type (Supervisory Control And Data Acquisition) software, EH-SmartPV, which enables remote monitoring and management of solar PV farms in real-time. Another group of projects focused on the optimisation of products in the current portfolio and standardisation of the equipment manufactured by Elgór + Hansen. The target solution should facilitate its implementation and operation by the company's customers. An important event in this area was the launch of a power supply and automation system for roadheaders dedicated to gypsum mines. The Development Department also worked on wireless communication systems to be used to measure, present and analyse pressure values or other physical quantities in potentially explosive atmospheres. In addition, with a view to improving the company's overall operational efficiency, optimising development and production work and enhancing IT infrastructure, steps were taken to implement a PDM (Product Data Management) system. The system is used to store product data files, maintain the history of versions, and share information between departments. Financial performance of the Power Engineering segmentPower Engineering segment's revenue scrollen
For the 12 months ended December 31st 2022, the Power Engineering segment reported revenue of PLN 100m, up by PLN 15m (18 %) year on year. Revenue from the sale of products and services for coal mining rose by PLN 4m year on year, to PLN 86m. Revenue from the sale of industrial apparatus grew by PLN 10m relative to 2021, and reached PLN 13m. 2022 was the first period in which the Power Engineering segment generated revenue from the sale of products for the power sector, which amounted to PLN 1m. In the three months ended December 31st 2022, the Power Engineering segment's EBITDA was PLN 45m, an increase of PLN 17m (61 %) year on year. Revenue growth was driven by increased sales across all product categories. Sales by key geographies in the Power Engineering segment In the 12 months ended December 31st 2022, export sales represented approximately 14 % of the Power Engineering segment's total revenue. Sales to foreign markets were mainly to China and Indonesia (approximately 13 % of total revenue). Other countries accounted for approximately 1 % of total revenue. Profitability of the Power Engineering segment scrollen
Gross profit for the 12 months ended December 31st 2022 in the Power Engineering segment was PLN 31m, up by PLN 10m year on year. Operating profit increased by PLN 4m year on year, to PLN 14m, and EBITDA improved by PLN 2m. EBITDA margin for the 12 months ended December 31st 2022 and the three months ended December 31st 2022 was 24 % (down by 2pp) and 24 % (up by 24pp), respectively. Segment of utility-scale solar projects ("PV segment")The Grenevia Group's PV segment is comprised of Projekt Solartechnik (PST) Group companies, which offer development and turnkey delivery of utility-scale solar PV projects on an EPC basis, i.e. from the acquisition/review of the location, development, design and engineering of the project to procurement of necessary components, to construction and maintenance of project facilities. The PST Group has a professional project development team, design and engineering studio, and other own project construction and execution resources, dedicated to PV projects. Apart from developing own projects and securing properties for potential future development, it also acquires projects at various stages of completion. The Group offers its customers proprietary solutions, including assembly systems, constructs own solar power systems, and sells PV components. The segment's portfolio of solar farms, comprising both completed projects and those under construction, is managed through the investment fund Projekt Solartechnik Fund FUNDUSZ INWESTYCYJNY ZAMKNIĘTY (the "Fund"). The Grenevia Group actively supports and participates in the development of renewable energy sources, as demonstrated by the growing base of assets attributable to PV and solar farm capex. Changes in the share capital and organisational structure of the PV segmentActivities geared toward building the PV segment at the Grenevia Group commenced in 2021. On May 25th 2021, an Investment Agreement was signed with TDJ S.A on a solar PV joint venture project (see Current Report No. 24/2021 of May 25th 2021). The following steps were completed in accordance with the agreement: FAMUR SOLAR Sp. z o.o. ("FAMUR SOLAR") was established and entered in the National Court Register under No. 906516 on June 15th 2021; the Projekt Solartechnik Fund FUNDUSZ INWESTYCYJNY ZAMKNIĘTY closed-end investment fund (the "Fund") was established to manage the Group's PV project portfolio, with the Fund's investment certificates held at the time by FAMUR SOLAR (51 %) and Maciej Marcjanik (49 %); on June 24th 2021, the Management Board of the Central Securities Depository of Poland (CSDP) passed resolution No. 844/2021 to grant the Fund the CSDP participation status of issuer. On July 13th 2021, the share capital of FAMUR SOLAR was increased to PLN 7,540,000 through the issue of 138,800 shares, of which 70,788 shares (51 %) were subscribed for by Grenevia S.A. and 68,012 shares (49 %) were subscribed for by TDJ S.A.. The total value of the issue was PLN 69,400,000. Pursuant to the Investment Agreement and the Articles of Association of FAMUR SOLAR, Grenevia S.A. has full corporate power and authority over FAMUR SOLAR and fully consolidates the results of the company and its subordinated entities. In order to secure sufficient funding to support a rapid growth of the PV segment being built within the Group, on July 16th 2021 an annex to the Investment Agreement was signed between TDJ's subsidiary and Maciej Marcjanik (the "Parties") in consultation with Grenevia. Pursuant to the annex, the rights and obligations of TDJ's subsidiary under the amended Investment Agreement were transferred to FAMUR SOLAR. FAMUR SOLAR agreed to provide funding (directly or through a related party) in the form of loans or other type of financial assistance to support the development of the PV segment (to be repaid by December 31st 2023 at the latest) up to a maximum amount of PLN 400m. On March 10th 2022, the Parties amended the Investment Agreement by raising the maximum financing amount to PLN 500m. Currently, the PST Group is working on its growth strategy for 2023-2027, which may result in another change to the financing amount. On July 20th 2021, Grenevia S.A. (formerly FAMUR S.A.) advanced a PLN 69m loan to FAMUR SOLAR to support the delivery of the objectives set out in its Articles of Association, particularly to finance the acquisition of investment certificates issued by the Fund. On July 20th 2021, FAMUR SOLAR and Maciej Marcjanik signed a loan agreement to finance the acquisition of investment certificates issued by the Fund. The first tranche of PLN 69m was disbursed under the loan on July 21st 2021. On July 21st 2021, FAMUR SOLAR acquired Series B investment certificates issued by the Fund for a total amount of PLN 89m, representing 51 % of all certificates. The remaining portion of the certificates was acquired by Maciej Marcjanik for PLN 86m. On July 26th 2021, in accordance with the main terms of the Investment Agreement between FAMUR and TDJ, shares in companies holding PV projects were sold by Grenevia, TDJ and PST to the Fund. The companies sold to the Fund held in their portfolios PV projects with a total capacity of approximately 100 MW (with auctions won in 2019 and 2020) in the case of TDJ, and approximately 164 MW (including approximately 104 MW with auctions won in 2020 and 2021) in the case of FAMUR. On July 7th 2021, the Extraordinary General Meeting of PST resolved to increase the company's share capital from PLN 100,000.00 to PLN 4,911,200.00, i.e. by PLN 4,811,200.00. The share capital was effected by issuing 4,811,200 Series B registered shares numbered from B 0000001 to B 4811200, with a par value of PLN 1.00 per share. The issue price of Series B shares was PLN 10.00 per share, with the total issue price being PLN 48,112,000.00. The Series B shares were issued by way of a private placement addressed to the sole shareholder, Maciej Marcjanik. The share capital increase was entered in the National Court Register on September 15th 2021. On July 20th 2021, Maciej Marcjanik and FAMUR SOLAR signed an agreement for the sale of 49,000 Series A ordinary registered shares, numbered from 000001 to 049000, with a total par value of PLN 49,000.00, representing 49 % of PST's share capital, for a price of PLN 850,041.34. On September 16th 2021, the Extraordinary General Meeting of PST passed a resolution to increase the company's share capital from PLN 4,911,200.00 to PLN 7,811,200.00 through the issue of 2,900,000 Series C registered shares with a par value of PLN 1.00 per share, for a total issue price of PLN 29,000,000.00. The issue price of a Series C share was PLN 10.00. Pursuant to the resolution, all new shares were to be subscribed for by FAMUR SOLAR by way of a private placement. The share capital increase was entered in the National Court Register on November 10th 2021. On September 17th 2021, Maciej Marcjanik and FAMUR SOLAR signed an agreement for the sale of 1,034,712 Series B ordinary registered shares in PST, numbered from B 0000001 to B 1034712, with a total par value of PLN 1,034,712.00, representing approximately 21.07 % of the company's share capital, for a price of PLN 17,949,958.66. Following the execution of the above agreements, the aggregate amount allocated by FAMUR SOLAR to purchase a portion of the Series A and Series B shares and subscribe for Series C shares in PST was approximately PLN 48m. Share capital increase at FAMUR SOLAR Sp. z o.o. In April 2022, a resolution was made to increase the share capital of FAMUR SOLAR by PLN 7,105,550.00, from PLN 7,540,000.00 to PLN 14,645,550.00, by issuing 142,111 new, equal and indivisible shares, with a par value of PLN 50.00 per share and total par value of PLN 7,105,550.00. All new shares were subscribed for by one of the company's existing shareholders, i.e. FAMUR S.A. of Katowice. The shares in the increased share capital were paid for in full with a cash contribution of PLN 71,055,500.00 (set-off against a loan). The share capital increase was entered in the National Court Register on May 18th 2022. Following the share capital increase, Grenevia S.A.'s equity interest in FAMUR SOLAR increased to 75 %. The issue price per share was set in accordance with the same rules and in the same amount as in the previous share capital increase at FAMUR SOLAR (entered in the National Court Register in November 2021), where FAMUR SOLAR shares had been subscribed for by Grenevia S.A. and TDJ S.A. The purpose of the increase was to eliminate FAMUR SOLAR's debt (ahead of its planned merger with PST). Therefore, the total issue price was set to reflect the amount of FAMUR SOLAR's debt towards Grenevia (including interest) at the time of subscription for the shares. The payment for the subscribed shares was settled through a set-off of the amount owed by FAMUR SOLAR to Grenevia under a loan of PLN 69m (including interest) granted on July 20th 2021 to support the delivery of the company's objectives, particularly to fund the acquisition of investment certificates issued by Projekt Solartechnik Fund Fundusz Inwestycyjny Zamknięty (the "Fund"), as announced by Grenevia in the Directors' Report for 2021. This helped prepare FAMUR SOLAR for its planned merger with PST. On March 31st 2021, the Extraordinary General Meeting of PST passed a resolution to increase the company's share capital by PLN 171,540,905.00, from PLN 7,811,200.00 to PLN 179,352,105.00, through the issue of 171,540,905 Series D ordinary registered shares with a par value of PLN 1.00 per share and total par value of PLN 171,540,905.00, for a total issue price of PLN 171,540,905.00. It was agreed that the subscription for the Series D shares would be effected by way of an offer made by the company and accepted by designated investors, i.e. FAMUR SOLAR Sp. z o.o. of Katowice and FIMM Fundusz Inwestycyjny Zamknięty, with its registered office at ul. Zabłocie 25/20, 30-701 Kraków, Poland, entered in the Register of Investment Funds maintained by the Regional Court of Warsaw, 7th Civil and Registry Division, under entry No. RFi 1688 ("FIMM"), in the following proportions: scrollen
The issue price of PST shares subscribed for in exchange for the contributed investment certificates of the Fund was set uniformly for both shareholders subscribing for the new shares, in an amount equal to the par value of the shares (i.e. PLN 1.00 per share). The Series D shares were paid for as follows: scrollen
The share capital increase was entered in the National Court Register on June 7th 2022. Setting the issue price at the par value of PST shares allowed the value of the contributions to be fully reflected in the number of shares subscribed for in exchange for the contributions. As the issue price was the same for both shareholders who subscribed for the shares and contributed the same assets to pay for the shares (adding up to 100 % of the investment certificates of the Fund), the ownership ratio in PST's share capital and shareholding structure was kept unchanged (51 % and 49 %, respectively) compared with the ownership ratio in PST's share capital and the Fund's ownership structure prior to the share capital increase. This transaction structure enabled smooth transfer of all of the Fund certificates to PST, taking into account the value of the Fund based on the valuation prepared by an independent third party which periodically values certificates of the Fund (on a NAV per Investment Certificate basis), in line with the existing ownership ratio in the two entities. On July 1st 2022, FIMM, in which Maciej Marcjanik is the investor, and Grenevia S.A. signed an agreement whereby Grenevia S.A. acquired from FIMM 25,055,024 Series D shares in PST, representing 13.97 % of the company's share capital, for PLN 117m (see Current Report No. 29/2022 of July 1st 2022). Following the transactions described above, Grenevia holds, directly and directly, approximately 52 % of shares in PST's share capital, while approximately 35 % of the shares are held by Maciej Marcjanik and his related parties, and approximately 13 % of the shares are held by TDJ. Competitive environmentThe PV market is highly competitive, in particular in the non-utility (up to 1 MW) segment, a situation which is attributable to low entry barriers. The market of end-to-end development and delivery of utility-scale and medium-sized PV projects is highly fragmented, with most contractors being active only in one area of the value chain in this sector. At the same time, the expected growth in demand for PV project development and construction in Poland is attracting new domestic and foreign players, mainly from Germany and China. Projekt Solartechnik competes directly with the following companies, broken down by type of operations: scrollen
Growth strategy for the PV segmentThe segment's strategic objective is to become a leader in the development and turnkey delivery of utility-scale projects (solar power plants). Adopting the EPC model of turnkey utility-scale PV project delivery should allow the Group to achieve higher margins, mainly through planned integration of most elements of the B2B PV value chain (from development of a project to its design, engineering and construction, to its maintenance). The PST Group currently prioritises sale of PV projects and completed solar PV farms in the form of a portfolio of companies holding assets with an average total capacity of approximately 40 MW. The portfolio sale agreement is combined with a contract for the provision of project operation services and, in the case of projects in an early development phase, an EPC contract for the construction of the project. At the same time, sale of PPAs and cPPAs is being developed as part of B2B operations. The Group's long-term strategic objective is to position itself as a major B2B provider of EPC solutions for PV projects on the European market. This is to be achieved, for example, by sale od completed projects or solar PV farms as well as sale of electricity produced by the Group's own generation assets (IPP model). The PV segment offers development and turnkey delivery of PV projects for the B2B marketThe PV segment companies operating under the PST brand offer development and turnkey delivery of utility-scale solar PV farms on an EPC basis, from development of a project to its design, engineering and construction, to project maintenance. The offering includes in particular the following products and services: scrollen
Operating and commercial activities in the PV segment in 2022The main operating activities in 2022 were as follows: scrollen
Structure of total capacity of the projects and farms included in the portfolio of the PV segmentscrollen
As at the end of 2022, the total capacity of projects with a renewable energy auction won was approximately 310 MW. Distribution model and key customersThe PV segment sells its products and services directly to end customers, which mainly include large Polish power producers, foreign infrastructure sector funds building renewable energy project portfolios, and energy-intensive businesses. Supply chainWith a large number of manufacturers, the competition on the PV component parts market is strong. The Group can decide to switch over to new suppliers of PV modules, inverters or other components at any time. Grenevia is of the opinion that the PST Group does not depend on any component supplier to a greater extent than other entities operating in the same industry. When selecting the main supplier of PV modules for its projects, the Grenevia Group seeks to secure a stable business relationship with a trusted manufacturer which is ranked by Bloomberg among the world's five largest PV module producers. Currently, this group includes Jinko Solar and Trina Solar (both companies manufacture and deliver their products directly from China). The vendor concentration and supply chain disruption risks are mitigated by the PST Group's access to alternative module manufacturers which can help meet the supply gap. The PST Group procures inverters from a number of reputable manufacturers depending on the specification of a given PV project. As regards transformer substations, the PST Group uses solutions provided by ZPUE and Elgór + Hansen, a Grenevia Group company. Steel for mounting structures is ordered directly from a European producer. The Grenevia Group also allocates its operating resources to ensure the delivery of supplies. Given the volume of its purchase orders, the Group is able to source most PV components and other supplies directly from manufacturers. The continuity of supplies is secured by, inter alia, placing orders well in advance and/or concluding framework agreements for the supply of strategic components (including PV modules, transformer substations, inverters, etc.). Material agreementsMarch 11th 2022 saw the execution of a PLN 428m project finance credit facility agreement to finance and refinance the costs of construction of solar PV farms with a total capacity of approximately 134 MW, with an option to subsequently convert the credit facility into an investment loan and to cover the debt service reserve. The credit facility agreement was concluded between 32 companies owned by Projekt Solartechnik Fund FUNDUSZ INWESTYCYJNY ZAMKNIĘTY and a syndicate of ING Bank Śląski S.A., Bank Polska Kasa Opieki S.A. and BNP Paribas Bank Polska S.A. (the "Banks") (see Current Report No. 12/2022 of March 11th 2022). On June 24th 2022, Projekt Solartechnik Fundusz Inwestycyjny Zamknięty (the "Seller"), a subsidiary of the Grenevia Group, entered into a preliminary share purchase agreement with Spoleto Sp. z o.o., a special purpose vehicle wholly owned by Alternus Energy Group Plc as the buyer, whereby the buyer was to acquire 100 % of shares in 32 Project Companies holding a portfolio of solar farm projects at various stages of development, with a total capacity of 184 MW. As part of the Transaction, Projekt Solartechnik's responsibilities included construction of the projects and provision of maintenance services for a contractually agreed period. The total value of the Transaction was expected to reach approximately PLN 750m. This amount comprised the purchase price of approximately PLN 500m for 100 % of shares in all the Project Companies, payable upon Transaction closing, and an amount of up to PLN 250m due as an earn-out consideration for the development (achievement of subsequent milestones) of the not yet operational projects (including under the relevant engineering, procurement and construction contracts) not later than within four (4) years from the Transaction closing (see Current Report No. 27/2022 of June 24th 2022). The condition to the Transaction closing, i.e. placing in operation of projects with a capacity of at least 45 MW, was fulfilled. On October 27th 2022, an annex to the share purchase agreement was signed. Under the annex, the Seller and ALT POL HC 01 Sp. z o.o. of Warsaw, formerly operating under the name of Spoleto Sp. z o.o., and the other buyer Solis Bond Company Designated Activity Company of Dublin, both as special purpose vehicles wholly owned by Alternus Energy Group Plc (jointly the "Buyers"), agreed that the Transaction, understood as the acquisition of 100 % of shares in 32 Project Companies holding a portfolio of 184 MW solar farm projects, would be carried out in two phases. The first phase, involving projects with a total capacity of 65 MW, would be effected on November 15th 2022, whereas the second phase, involving projects with a total capacity of 119 MW, would be effected on December 6th 2022. (see Current Report No. 32/2022 of October 28th 2022). On November 15th 2022, the Buyers failed to proceed with the activities planned to complete the first phase of the Transaction for reasons attributable to the Buyers (see Current Report No. 35/2022 of November 15th 2022). On November 23rd 2022, an annex was signed whereby the parties set a new closing date for the Transaction, i.e. acquisition of 100 % of shares in 32 Project Companies holding a portfolio of 184 MW solar farm projects, at December 16th 2022, and agreed to increase the maximum value of the Transaction by approximately PLN 38m (see Current Report No. 36/2022 of November 23rd 2022). The condition to the entry into force of the annex was the receipt by the Seller, no later than on November 24th 2022, of a prepayment of PLN 10m, which was made as agreed. On December 16th 2022, the Buyers failed to proceed with the activities planned to close the Transaction, encompassing 184 MW solar farm projects, due to reasons attributable to the Buyers (see Current Report No. 39/2022 of December 16th 2022). In connection with the Buyers' failure to fulfil their obligations under the Agreement, on December 22nd 2022 the Seller (Projekt Solartechnik Fundusz Inwestycyjny Zamknięty) gave notice of termination of the Agreement in accordance with its terms. As a result of the termination, the Seller is entitled to receive PLN 45m from the Buyers as a guarantee payment, which will be reduced by approximately PLN 20m on account of non-refundable prepayments already received by the Seller by the termination date (see Current Report No. 40/2022 of December 22nd 2022). An application was filed with the Arbitration Court for payment of liquidated damages. The solar farm portfolio was put out for sale and the Seller is in negotiations with potential buyers. R&D activities in the PV segmentThe PST Group conducts research to optimise the structural solutions it designs and uses. Improving the solutions on an ongoing basis, both in terms of manufacturing costs and construction efficiency, is viewed as a priority. Financial performance of the PV segmentscrollen
In 2021, the revenue and financial results of the PV segment were immaterial from the Group's perspective. In 2022, the segment's revenue was PLN 54m, including PLN 15m in the three months ended December 31st 2022. All revenue was generated on the domestic market. Operating result and EBITDA for 2022 were negative, at PLN -42m and PLN -36m, respectively. The negative operating result and, consequently, EBITDA, were mainly attributable to the failure to finalise the agreement with Alternus for the sale of solar PV farms and projects, and the costs of dynamic growth of the PV project portfolio in Poland, development of the operational structures and PV projects in Germany. Segment of battery systems for electric mobility and energy storage ("E-mobility segment")Building the E-mobility segment at the Grenevia GroupThe Grenevia Group entered the electric mobility sector in 2022 by acquiring shares in Impact Clean Power Technology S.A. of Warsaw("Impact" or "ICPT"), a leading manufacturer of innovative, tailor-made battery systems, mainly for buses, rail transport, specialised transport, and stationary energy storage. On November 8th 2022, an agreement was signed to purchase 18,475,729 shares in Impact, representing 51 % of the share capital and carrying approximately 59 % of total voting rights at the General Meeting (see Current Report No. 34/2022 of November 8th 2022). The total price for the shares was agreed at approximately EUR 59.12m (equivalent to PLN 277m, as translated at the mid exchange rate quoted by the National Bank of Poland for December 8th 2022). The acquisition was financed with proceeds from the issue of green bonds in 2021. Since mid-November 2022, Impact's financial results have been consolidated with the full method in the consolidated financial statements of the Grenevia Group. The experience and well-established competitive position of Impact in the market of battery systems for transport and industrial applications, supported by Grenevia's financial and operational resources, will enable rapid scaleup of Impact's business, building the long-term value of Impact and the Grenevia Group on the promising market of industrial electric mobility and energy storage solutions. Impact is a Tier-1 supplier of original equipment (OEM) to leading electric bus makers. As such, it is a major supplier of battery systems for e-buses on the European market. Impact products are also exported to North America, Asia and Australia, among others. The company runs its own research & development centre for energy storage technologies and battery systems dedicated to public and heavy transport. Impact's annual production capacity in the current location is approximately 0.6 GWh. It was achieved following implementation of lean management based on the Grenevia Group's experience. Market situation in 2022In 2022, the electric bus market segment in Europe continued to grow rapidly, at the rate of approximately 26 % (according to BUS Sustainable data 1 ). It is expected, that the average annual growth rate (CAGR) of the global electric bus market will reach around 43 % by 2027 (based on PR Newswire data 2 ). Other electric mobility market segments relevant to Impact, such as industrial vehicles and trailers, will also grow rapidly, at a rate of more than 30 %. The key factors with a positive bearing on the situation in the market of battery system for transport and industrial applications will include: regulatory changes in the EU incentivising the development of electric mobility, growing demand for non-carbon energy-efficient solutions for mass transport, decline in battery prices in the long term, government support programmes for the electrification of public transport, implementation of stringent emission standards and environmental regulations, and increased environmental awareness among the public. Potential challenges that could lead to a contraction of the market are the high cost associated with product development, a lack of well-developed charging infrastructure, and rising electricity prices. Competitive environmentImpact's main competitors in the segment of battery systems for electric public transport vehicles and industrial applications are Europe's Akasol, Forsee Power, Actia, and BMZ. There is also a rapid expansion of Chinese manufacturers of cells and entire vehicles: CATL, BYD, and Yutong, which have entered the market for finished battery products and are beginning to directly compete with European companies. For instance, CATL started to offer ready-made bus batteries to Solaris, a major European bus maker. Growth strategy for the E-mobility segmentBattery systems for public transport vehicles, specialised trucks and heavy duty vehicles are produced in short series (compared with the mass EV market). As battery technologies are changing fast, most EV manufacturers rely on sub-suppliers instead of building their own production plants because of the small scale of their operations and the need to specialise. Impact's business model leverages the economies of scale which are generated by the manufacture of tailor-made products and their provision to dedicated customer groups. To accommodate the fast market growth and broaden its customer base, Impact aims to significantly increase its annual production capacity by building GigafactoryX, one of its key strategic projects. This large-scale manufacturing plant will be dedicated to meeting the requirements of customers for battery systems for electric public transport vehicles, primarily e-buses, industrial e-vehicles, and utility-scale energy storage facilities. The project is expected to raise Impact's annual production capacity to more than 1 GWh in 2024, and to a minimum of 2 GWh or even to more than 4 GWh in 2027, in line with demand growth. Investments in new production capacities are also intended to allow Impact to branch out into related markets such as electric trucks, heavy industrial vehicles, and hydrogen-powered railway locomotives. Other growth initiatives pursued by Impact include the design and construction of utility-scale battery storage systems (including through repurposing of used EV batteries, which have longer charging cycles), and use of hydrogen technologies in battery systems for transport and energy storage. Impact's offering for the E-mobility sectorImpact offers comprehensive, tailor-made battery systems to meet customer requirements. Cooperation with the customer starts with the application analysis phase, through to selecting the optimum solution, designing, launching serial production, to delivering battery systems to be installed at the customer's. The company also offers a guarantee and maintenance service for the entire life of the vehicle. Battery systems manufactured by Impact are based on lithium-ion cells using several available cell technologies (NMC, LFP and LTO). Impact products are mainly bought by customers from the public transport segment (electric buses, trolleybuses, commercial vehicles, trams, railways) and users of special applications for AGV robots, mining, electric boats and yachts, industrial vehicles, etc. Impact also offers stationary energy storage facilities for businesses, industry and utility power generators as well as for operation with renewable energy sources. Operating and commercial activities in the E-mobility segment in 2022In 2022, commercial activities focused chiefly on building the contract portfolio: framework contracts for regular deliveries were concluded with a number of customers, including Solaris and Voith, and the first larger contract in the Asian market was secured after winning a tender procedure in Hong Kong with a partner ADL. Impact will supply bus batteries under the contract. Operating activities in 2022 centred around enhancing production efficiency and effectiveness. Production in the current location increased three-fold (from 0.2 GWh to 0.6 GWh), with a concurrent improvement in product quality. In order to ensure stability of the supply chain, steps were taken to diversify suppliers of key components in accordance with the announced European Supply Chain strategy. The construction of GigaFactoryX in Pruszków near Warsaw was started: a contract to purchase the property was signed, the detailed design was approved, and the process line supplier was selected. In 2022, Impact generated revenue of PLN 304m (of which PLN 64m was included in the Grenevia Group's consolidated revenue from the moment of Impact's first-time consolidation, i.e. from mid-November 2022). However, a significant growth in the prices of components in 2022 affected the company's margins. As Impact works with the public procurement sector, the higher prices of components could not be entirely passed on in increased selling prices. Given the need to secure adequate stocks of components for the production of battery systems in 2023 and the current price levels, this factor will continue to affect margins in 2023. Impact has reviewed all of the risks related to its past and current operations. In connection with delayed deliveries of materials from China and, consequently, delayed deliveries of Impact's battery systems to customers in early 2022, a provision was recognised for potential penalties for delays in deliveries and maintenance repairs. In 2022, the company assessed the usability of all its materials and non-current assets for future operations in the context of the construction of GigaFactoryX. As a result, a decision was made to decommission some of the materials and the depreciation period for non-current assets was shortened to the end of their useful life. Additionally, in 2022 Impact recognised for the first time a provision for future costs of battery disposal after the end of their useful life. Since December 2022, Impact has held negotiations with banks concerning financing for its growth. Shareholders of Impact will provide funds in the form of investment loans pro rata to their shares, and a working capital loan to finance the company's day-to-day operations until credit facilities from the banks are obtained. Distribution model and key customersImpact's products and services are sold directly to end customers, mainly under framework agreements and based on individual orders from vehicle manufacturers. The company also sells its products through a partner sales network in New Jersey (the US) and Frankfurt am Main (Germany). Impact provides its solutions to Solaris, Alexander Dennis, Voith, Kiepe, Normet, Pepper Motion, Autosan, and Skoda Electric. Customers accounting for over 10 % of the segment's revenue in 2022 included Solaris (approximately 76 % of total revenue). This significant concentration of sales to a single customer in 2022 was due to Impact's constrained production capacities. There are no formal equity links between Solaris and Impact. Impact is expanding its production capacities and simultaneously engages in commercial and marketing activities to attract new customers with large -volume contracts. The purpose of those efforts is to further expand the contract portfolio while diversifying customers and segments. However, the market is still in its infancy and most manufacturers have only started to build supply chains for their vehicles. Most vehicle manufacturers follow the principle of 'two or more suppliers' of key components (including motive power batteries). Supply chainThe key component of the battery systems offered by Impact are lithium-ion cells, which are imported from Japan (Toshiba) and China. In order to minimise the risk of supply chain disruptions and to maintain production continuity, Impact seeks to secure two or more suppliers of key components for each project and, where feasible and economically viable, to maintain sufficiently high stock levels. Additionally, in 2022 Impact announced the European Supply Chain strategy and in the coming years intends to rely to a larger extent on cells made in Europe. Using European suppliers improves the supply chain stability but it may erode margins since Chinese producers supply their products at more competitive prices, albeit with a greater risk of disruptions. As part of the new strategy, in the first quarter of 2023 framework agreements were signed with new cell manufacturers from Europe. Other components to be used in production are mostly sourced from Polish manufacturers. Segment's performance against forecastsAs stated in Current Report No. 34/2022 of November 8th 2022, the E-mobility segment is expected to generate revenue of no less than PLN 1bn per year over the next four to five years. After the period of heavy capital expenditures in 2023-2024, the projected EBITDA margin should reach approximately 10-12 % in 2025. Capital expenditures, to be incurred mainly in 2023 (CapEx and OpEx), are expected to amount to about PLN 120m. The Management Board of Impact, Grenevia S.A.'s subsidiary, will monitor the macroeconomic and geopolitical situation and assess its impact on the E-mobility segment's performance and ability to meet the forecast on an ongoing basis. R&D activities in the E-mobility segmentImpact's Research and Development Department works on new technologies for the construction and management of lithium-ion batteries and develops new products. In 2022, it launched a new project to develop a hydrogen fuel cell for rail transport and electric buses. Financial performance of the E-mobility segmentscrollen
Since mid-November 2022, Impact's financial results have been consolidated with the full method in the consolidated financial statements of the Grenevia Group. Sales in that period amounted to PLN 64m, gross profit was close to zero, and operating result and EBITDA were negative, at PLN -10m and PLN -7m, respectively. External and internal factors relevant to the Grenevia Group's growthThe Grenevia Group has identified the following key factors affecting its performance, financial position and outlook. In the Management Board's opinion, they were the key drivers of the Group's performance and had a material impact on its financial position in the reporting period. Unless indicated otherwise, the Management Board expects that these factors and trends will continue to have a material effect on the results and financial condition in the future. For information on uncertain events that may have a material effect on the Grenevia Group's growth prospects, see 'Description of main risks and threats'. scrollen
Description of key risks and threatsGeneral definition and classification of key risks at the Grenevia GroupThe Grenevia Group defines risk as an uncertainty which is inherent in its business and which may result in both opportunities and threats to the achievement of its strategic objectives and have an adverse impact on its growth prospects, operating or commercial activities, assets or financial performance. Based on its best knowledge, the Management Board has identified the key risks to the Group and classified them into the following categories: scrollen
Risk management process at the Grenevia GroupThe Group has adopted a decentralised control and management structure, where responsibility for identifying key risks, planning mitigation measures, and responding to specific strategic, operational, commercial and financial risks is assigned to its individual segments. The risks identified at the segment level are assessed in the context of the strategic and operational objectives. The criteria for risk assessment include both financial and reputational impacts for the organisation, as well as consequences for the environment, employees and members of the community affected by the Group's operations. For each of the identified risks, risk handling procedures and mitigation measures are determined. Periodically, the risks are reviewed for relevance and adequacy in the context of changes in the Group's operating environment. A review of the identified risks is discussed in the Directors' Reports on the operations of the Company and the Group. In assessing the materiality of a specific risk in terms of the expected magnitude of its negative impact on the Grenevia Group's business, financial condition, results of operations or prospects, and in terms of the probability of its occurrence, the Group considered a number of factors, including any past occurrence of that risk and its impact, as well as the availability and effectiveness of remedial measures that could mitigate the impact of its materialisation. Such assessment was based on the best knowledge of the Management Board, relying on facts and circumstances known to the Management Board as at the date of this Report. Between January 1st and December 31st 2022, 19 internal audits were carried out at the Grenevia Group, during which 104 instances of risk and inefficiency were identified and 194 post-audit recommendations were issued. The current geopolitical situation, related to the war in Ukraine, has led to instability in the production and availability of key raw materials and components and, consequently, to high volatility of their prices. This has deteriorated the outlook for the global economy, and the economic and social consequences of the war will be long-lasting. In such circumstances, the assessment of all relevant risks and the scale of their impact on the Grenevia Group's business is extremely difficult and may be subject to revision on an ongoing basis. The order in which the risks are presented below is not in any way indicative of their materiality, the likelihood of their materialisation, or their potential impact on the Grenevia Group's business. Key external risksscrollen
Key operational risksscrollen
Key financial risksscrollen
Key risks and mitigation measuresBelow is presented a description of the key external, operational and financial risks, including information on the possible consequences of their materialisation for the Grenevia Group and on the relevant risk mitigation measures. For information on the financial risks to which the Grenevia Group is exposed, see also Note 49 'Objectives and principles of financial risk management' to the consolidated financial statements of the Grenevia Group for 2022. scrollen
Grenevia Group Overview of operations in 2022Discussion of financial highlightsThis discussion of financial results for the 12 and three months ended December 31st 2022 should be read in conjunction with the audited consolidated financial statements of the Grenevia Group and the audited separate financial statements of Grenevia S.A. for the year ended December 31st 2022, prepared in accordance with the International Financial Reporting Standards (IFRS). The following discussion of the results achieved in the period is intended to provide the readers with information enabling them to understand changes in the selected key items of the financial statements and to present significant factors behind those changes. In its evaluation and discussion of the reported financial performance, financial position and cash flows, the Grenevia Group makes references to performance metrics other than those expressly defined or outlined in the applied financial reporting framework compliant with IFRS requirements, such as 'EBITDA' and 'net debt'. However, these metrics are calculated on the basis of information sourced from the financial statements prepared in accordance with IFRSs. Discussion of key components of financial results and assessment of factors significantly affecting financial resultsGrenevia Group's revenuescrollen
* 2022 includes for the first time the PV segment's revenue for the full reporting period; most of the PST Group operating companies have been consolidated since December 2021. ** E-mobility segment's revenue has been consolidated since mid-November 2022. The Grenevia Group's revenue for the 12 months ended December 31st 2022 rose by 27 % year on year, to PLN 1,296m, driven by a PLN 228m increase in revenue in the FAMUR segment, stable revenue from external customers in the Power Engineering segment, and an aggregate contribution of PLN 118m from the new PV and E-mobility segments. The decrease in other revenue is attributable to the consolidation of the PV segment companies with the full method for the first full reporting period. Other activities in 2021 include transactions involving key components for solar PV farm construction projects entered into with related PV segment's SPVs. The decrease in this item is the effect of the first-time consolidation of successive PV segment companies with the full method over 2021. In the three months ended December 31st 2022, revenue was PLN 439m, relative to PLN 289m in the comparative period of 2022, up by PLN 150m. Sales by key geographiesIn the 12 months ended December 31st 2022, the Grenevia Group's exports accounted for approximately 40 % of total revenue, up by 8pp year on year. Export sales were chiefly to the US (approximately 14 % of total revenue), while the share of other countries in America, Asia and Africa in total revenue was around 15 %. CIS and Russia accounted for approximately 9 % of total revenue (revenue from the Russian market was earned mainly under contracts concluded in previous periods), and sales to the EU countries represented about 1 % of the total. Key profitability indicatorsscrollen
Gross profitGross profit for the 12 months of 2022 was PLN 469m, which means an increase of PLN 153m (48 %) year on year, chiefly on the back of higher revenue. Gross profit as a percentage of revenue reached 36 %, up by 5pp year on year, the key contributing factor being higher gross margin on sales in the FAMUR and Power Engineering segments. In the three months ended December 31st 2022, gross profit came in at PLN 152m, up by PLN 56m year on year. Operating profitOperating profit for the 12 months ended December 31st 2022 reached PLN 257m, having increased by PLN 134m (or 2.1x) year on year, mainly as a result of higher gross profit. In the three months ended December 31st 2022, operating profit was PLN 89m, up by PLN 68m year on year, the principal driver of its growth being gross profit. EBITDAEBITDA is one of the main operating profit metrics used by the Management Board, representing operating profit before depreciation/amortisation and impairment of non-current assets. The method of calculating EBITDA is not defined in IFRSs, and the methodology adopted by the Group is presented below. scrollen
In the 12 months ended December 31st 2022, EBITDA was PLN 406m, an improvement of PLN 103m (34 %) year on year, due mainly to higher operating profit. EBITDA as a percentage of revenue grew by 1pp relative to the comparative period, to 31 %. In the three months ended December 31st 2022, EBITDA rose by PLN 52m (73 %) year on year, to PLN 123m. Net finance income/costsscrollen
Net finance income/ costs for 2022 were negative, at -PLN -6m, down by PLN 34m year on year, mainly as a result of an increase in net interest expense. In the three months ended December 31st 2022, the Group reported net finance costs of PLN 30m, driven by an increase in net interest expense. TaxThe effective tax rate for the 12 months ended December 31st 2022 was 24 %, while the nominal tax rate was 19 %. For a reconciliation of the effective tax rate with and nominal tax rate, see Note 20.3 to the consolidated financial statements of the Grenevia Group for 2022. Net profit from continuing operationsNet profit from continuing operations in the 12 months ended December 31st 2022 was PLN 192m, up by PLN 170m year on year. In the three months ended December 31st 2022, the profit was PLN 49m, relative to a PLN 73m loss in the comparative period. The improvement was partly attributable to the recognition in the fourth quarter of 2021 of impairment of goodwill allocated to the FAMUR segment of almost PLN 95m (for details, see 'Description and assessment of factors and non-recurring events with a bearing on the result of operations for the financial year'). Discontinued operationsIn the 12 months ended December 31st 2022, the Group incurred a loss on discontinued operations of PLN 72m, compared with a profit of PLN 3m in the comparative period. This was mainly attributable to the recognition of a loss of PLN 58m on loss of control of the Russian subsidiary OOO FAMUR. For detailed information on discontinued operations, see Note 10 to the consolidated financial statements of the Grenevia Group for 2022. Net profit In the 12 months ended December 31st 2022, net profit from continuing operations was PLN 120m, having increased by PLN 95m (4.8x) from PLN 25m the year before. In the three months to December 31st 2022, net profit came in at PLN 50m, up from a loss of PLN 74m in the comparative period. Net profit margin in the 12 months ended December 31st 2022 was 9 % (up by 7pp year on year), while profitability adjusted for non-recurring events was 14 % (up by 2pp year on year). Description and assessment of factors and non-recurring events with a bearing on the result of operations for the financial yearA material (over 10 % of net profit) non-recurring event with a bearing on the net profit for the 12 months ended December 31st 2022 was the recognition of a PLN 58m loss in the second quarter as a result of the loss of operational control of the subsidiary OOO FAMUR registered in the Russian Federation, and its reclassification to discontinued operations. In 2021, the Group recognised a non-recurring event affecting the financial results in the form of an almost PLN 95m impairment of goodwill allocated to the FAMUR segment. The impairment loss, which was a non-cash item with no effect on EBITDA or cash, reflected lower projected cash flows in the FAMUR segment based on reassessment of its expected future results in the light of conditions prevailing in the Polish sector of hard coal mining machinery manufacturing. Excluding material non-recurring events, net profit margin for the 12 months ended December 31st 2022 would have been at 14 % of revenue, up from 12 % in the comparative period. Assets and financial resources managementAnalysis of consolidated assets, equity and liabilities, including from the perspective of the Grenevia Group's liquidity positionscrollen
Assets In the 12 months ended December 31st 2022, assets rose by PLN 450m, with non-current assets up by PLN 189m and current assets up by PLN 261m. The increase in non-current assets was attributable in the large part to the recognition of goodwill and other intangible assets, mainly as a result of the first-time consolidation of Impact Clean Power Technology S.A. (Impact) in mid-November 2022. The key driver of growth in current assets was an increase in inventories at the Projekt Solartechnik Group and the consolidation of Impact. Liabilities In the 12 months ended December 31st 2022, non-current liabilities remained relatively unchanged. Current liabilities increased by PLN 247m, to PLN 916m, mainly due to higher liabilities under borrowings and trade payables. Analysis of major equity investments of the Group in 2022In 2022, the Grenevia Group executed the following significant transactions: scrollen
For a description of non-current and current financial assets, see Notes 27, 28 and 31 to the consolidated financial statements of the Grenevia Group for 2022. Financial resources and liquidity positionThe main sources of financing and liquidity for the Grenevia Group in the reporting period was cash at banks, cash from operating activities (above operating capital requirements), proceeds from the sale of non-operating assets, lines of credit available under agreements with banks, and proceeds from issue of bonds and notes, including green bonds. Cash flows scrollen
In 2022, the Group reported negative cash flows from operating activities of PLN -8m, reflecting mainly two offsetting factors: PLN 406m in EBITDA, and a PLN 402m increase in operating capital requirements (a PLN 621m increase in expenditure on inventories, due mainly to the purchase of components for the construction of solar PV farms and consolidation of Impact, and a PLN 245m positive change in receivables, partially offset by a PLN 26m negative change in liabilities). Income tax paid was PLN 53m. Other adjustments reconciling EBITDA to operating cash flow amounted to PLN +41m. Negative cash flows from investing activities of PLN 462m included chiefly expenditure incurred on the acquisition of shares in Impact, purchase of further shares in PST and property, plant and equipment, partially offset by proceeds from disposal of property, plant and equipment. Positive cash flows from financing activities of PLN 87m were the net effect of PLN 381m proceeds from borrowings (mainly under the project finance credit facility agreement of March 2022) and, on the other hand, PLN 234m cash used in connection with repayment of borrowings, including primarily redemption of restructuring bonds with a nominal value of PLN 185m, and payment of interest and lease liabilities of PLN 49m and PLN 11m, respectively. Net debt Net debt is a debt metric used by the Management Board. The method of calculating net debt is not defined in IFRSs, and the methodology applied by the Grenevia Group is presented below. scrollen
As at December 31st 2022, liabilities from borrowings, debt sale and leases exceeded net cash by PLN 127m. In the 12 months ended December 31st 2022, total non-current financial liabilities remained stable relative to 2021. Current liabilities increased by PLN 175m, to PLN 437m, which was due mainly to a combination of two events: First, an increase in liabilities as a result of the contracted PLN 335m project finance credit facility in the PV segment (the facility was classified as current liabilities in connection with the SPV sale model adopted in the PV segment). Second, full redemption of Series 01/2016 bonds (the "Restructuring Bonds"), Tranche A, under the Restructuring Agreement of KOPEX S.A. (currently Primetech S.A.), in accordance with the Demerger Plan for KOPEX S.A. described in Current Report No. 48/2017 of June 29th 2017. The Restructuring Bonds, with an issue value of PLN 185m, were redeemed by Grenevia at the full amount of principal plus accrued interest. As requested by the bondholders, the bonds were redeemed in two tranches and on two dates (March 31st and April 28th 2022) . Details of credit facilities taken out and terminated, and loans advanced in the financial year, including at least the credit facility or loan amount, type and level of interest rate, currency and maturity date In 2022, the Grenevia Group entered into the following material agreements and annexes to agreements with banks: scrollen
Use of bond issue proceeds by the Grenevia Group up to the date of this Directors' Report In the 12 months ended December 31st 2022, Grenevia S.A. did not issue any securities. In December 2015, Grenevia S.A. decided to set up and launch a Notes Programme, whose terms and conditions were amended in August 2021 (see Current Report No. 44/2021 of August 30th 2021). The key terms and conditions of the Programme, as amended, are as follows: scrollen
Details of material loans advanced in the financial year, including to Grenevia's related parties, including at least the loan amount, type and level of interest rate, currency and maturity date In 2022, Grenevia advanced loans to the PV segment totalling PLN 388m, repayable in up to 12 months from the reporting date (interest rate: 3M WIBOR + margin). As at the year end, loans advanced to the PST Group amounted to PLN 411m. Sureties and guarantees provided and received in the financial year, including to Grenevia's related parties, and contingent liabilities In the 12 months ended December 31st 2022, neither Grenevia nor any of its subsidiaries provided any sureties or guarantees to any single entity or its subsidiary where the total amount of such sureties or guarantees would be equivalent to 10 % or more of Grenevia S.A.'s equity. For detailed information on contingent liabilities, see Note 46 to the consolidated financial statements of the Grenevia Group for 2022 and Note 42 to the separate financial statements of Grenevia S.A. for 2022. Reasoned assessment of financial resources management, including the ability to meet obligations, and potential threats and measures taken or to be taken by Grenevia to address those threats The Grenevia Group places the highest priority on ensuring financial stability and diversified financing sources. The Grenevia S.A. Management Board believes that the Group's financial resources are managed in a sound manner. Trade payables, public charges, and employee benefits are timely paid by the Group. The same applies to the servicing of debt under credit facilities and settlement of liabilities under notes. As at December 31st 2022, liabilities from borrowings and leases exceeded net cash by PLN 124m. As at December 31st 2022, the Group had access to undrawn lines of credit totalling PLN 523m. Agreements signed with banks require the Grenevia Group to maintain selected ratios within a specified range. As at December 31st 2022, the ratios remained at safe levels and the Grenevia Group was not in breach of any of the covenants. A consistent and conservative financial policy coupled with a flexible business model and, more importantly, effective cost management, allow the Grenevia Group to maintain a satisfactory liquidity position. Derivatives The Grenevia Group hedges the portion of foreign currency exposure not covered by the natural hedging mechanism with currency forwards. Interest rate risk is hedged using interest rate swaps ("IRS"). For a summary of derivative instruments of the Grenevia Group, see Note 48 to the consolidated financial statements of the Grenevia Group for 2022 and Note 44 to the separate financial statements of Grenevia S.A. for 2022. Feasibility of investment plans Capital expenditure is adjusted by the Group on an ongoing basis to the economic conditions in Poland and globally, as well as to current needs to ensure proper growth rates for the Group companies. In the opinion of Grenevia's Management Board, there are no threats to the Group companies' ability to implement their investment plans over at least the next year. Performance against forecastsThe Management Board of Grenevia S.A. did not publish any financial forecasts of Grenevia or the Grenevia Group for 2022. Related-party transactionsIn the 12 months ended December 31st 2022, there were no material related-party transactions other than on an arms' length basis. For detailed information on related-party transactions, see Note 50 to the consolidated financial statements of the Grenevia Group for 2022 and Note 46 to the separate financial statements of Grenevia S.A. for 2022. WorkforceIn 2022, the Grenevia Group had an average headcount of 2,453, compared with 2,426 in 2021, Employee costs at the Grenevia Group in 2022 and 2021 amounted to PLN 268m and PLN 221m, respectively. Material claims, disputes, penalties and proceedingsFor information on material litigation risks to Grenevia Group companies, see Note 46 to the consolidated financial statements for 2022. For information on proceedings related to tax settlements, see Note 4.3 to the consolidated financial statements for 2022. In the 12 months ended December 31st 2022 and as at the filing date of this Report, there were no material court, arbitration or administrative proceedings, in particular any proceedings involving a claim whose value exceeds 10 % of Grenevia S.A.'s equity. Events subsequent to the reporting dateFor detailed information on events subsequent to the reporting date, see Note 57 to the consolidated financial statements of the Grenevia Group for 2022 and Note 52 to the separate financial statements of Grenevia S.A. for 2022. Financial highlights - last five yearsscrollen
Grenevia shares on the WSEGrenevia shares on the Warsaw Stock ExchangeIn August 2006, Grenevia S.A. (then trading under the name of FABRYKA MASZYN FAMUR SPÓŁKA AKCYJNA - FAMUR) was first listed on the Warsaw Stock Exchange (the "WSE"). As at December 31st 2022, 574.7m Company shares were traded on the WSE (abbreviated name: Grenevia; ticker code: GEA). Grenevia S.A. shares are listed on the main market of the WSE in the continuous trading system. Key information on Grenevia S.A. shares scrollen
Share priceThe chart below shows Grenevia stock price change vs mWIG40 over the last five years. 
The table below shows the cumulative rate of return on investment in Grenevia shares (excluding dividends) (from the end of 2017 to the end of 2022) relative to the rate of return on mWIG40 index. scrollen
The table below presents Grenevia stock price movements in each quarter of 2022. scrollen
DividendOn June 22nd 2022, by resolution of the General Meeting the Company's entire net profit earned in 2021, in the amount of PLN 35.3m, was allocated to the Company's statutory reserve funds. Dividend policyThe pursuit by the Grenevia Group of its new strategic directions as adopted in May 2021 will require that any profits be reinvested, in particular at the initial stages. The dividend, if any, will depend on profits earned in a given year, the investment attractiveness of new projects and growth prospects, as well as the financial and liquidity situation of the Grenevia Group. The table below presents cash dividends paid by Grenevia S.A. for 2018-2022. scrollen
Share Buyback ProgrammeIn 2021, the adoption of new strategic directions for the Grenevia Group necessitated a change in its dividend policy. Accordingly, in 2021 the Grenevia S.A. Management Board recommended that the General Meeting allocate PLN 70m to the buyback of Company shares for cancellation, by way of a tender offer with a price of PLN 2.50 per share. The main purpose of the programme was to enable the sale of Company shares (divestment) by those shareholders who had purchased them with a view to benefiting from the dividend policy adopted in the previous strategy (see Current Report No. 23/2021 of May 25th 2021). On August 17th 2021, the Extraordinary General Meeting ("EGM") passed a resolution to approve the buyback of Company shares for cancellation and create a capital reserve of PLN 70m for that purpose. The Company's Management Board was also authorised to purchase Company shares representing not more than 5 % of the Company's share capital, i.e., 28,700,000 shares of all series with a par value of PLN 0.01 per share, at a price not lower than PLN 2.50 per share. The deadline of the programme was set for October 31st 2021 (or until the funds allocated to the buyback are spent) (see Current Report No. 41/2021 of August 17th 2021). In the exercise of the authorisation granted by the EGM, on September 1st 2021 the Management Board invited the Shareholders to submit, in the period September 6th to September 17th 2021, offers to sell Grenevia S.A. shares. The tender offer was made for up to 27,934,000 ordinary book-entry shares (ISIN PLFAMUR00012), representing up to 4.86 % of the Company's share capital. The offered buyback price of PLN 2.5 reflected the price assumptions adopted in Resolution 3 of the EGM (see Current Report No. 45/2021 of September 1st 2021). The buyback took place between September 6th and September 17th 2021. A total of 82,539 (eighty-two thousand five hundred and thirty-nine) Company shares were tendered for sale. As the total number of Company shares tendered by the shareholders for sale under the invitation did not exceed the total number of shares the Company intended to buy back under the invitation, the Company accepted all submitted tenders and bought back all those shares for PLN 2.50 per share and a total price of PLN 206,347.50. The shares will be cancelled by way of reducing the Company's share capital, pursuant to Art. 359 of the Commercial Companies Code (see Current Report No. 47/2021 of September 20th 2021). On September 27th 2021, the Management Board of Grenevia S.A. passed a resolution to end the Company's share buyback programme as of that date. In the Company's opinion, the low participation in the buyback should be viewed as acceptance of the new strategic directions. Accordingly, the Management Board saw no reason to continue the buyback under the authorisation granted by the EGM. Pursuant to Section 2.2 of the EGM Resolution No. 3 of August 17th 2021, funds from the capital reserve set up to finance the buyback of Company shares and not used for the buyback were automatically transferred to the Company's statutory reserve funds on the buyback end date, and the capital reserve was released on that date, without the General Meeting having to pass any separate resolution (see Current Report No. 48/2021 of September 27th 2021).On March 18th 2022, the Grenevia Management Board received information that on March 17th 2022 the amendments to the Grenevia S.A.'s Articles of Association made pursuant to Resolutions No. 3 and No. 4 of the Extraordinary General Meeting of December 14th 2021 had been registered by the Registry Court (see Current Report No. 13/2022 of March 18th 2022). The Company's share capital was reduced from PLN 5,747,632.12 to PLN 5,746,806.73, i.e. by PLN 825.39, through the cancellation of 82,539 ordinary bearer shares with a par value of PLN 0.01 per share . Investor relations at the Grenevia GroupIn its investor relations activities Grenevia S.A. places focus on ensuring transparent and active communication with capital market participants, working in close liaison with investors and analysts, and on ensuring compliance with disclosure requirements set out in applicable laws. The Investor Relations team, along with Company representatives, regularly hold meetings with investors and analysts, both at home and abroad, and participate in most regional and industry investor conferences. The activities undertaken by the Investor Relations department in its contacts with investors aim to facilitate reliable assessment of the Group's financial standing and market position in the context of changes occurring in the sector of machinery and equipment suppliers as well as of the effectiveness of the new strategic directions intended to transform the Grenevia Group from a soft rock mining machinery manufacturer into a holding investing in green transition projects and opportunities in other related promising industries. The Company holds quarterly conferences for investors and analysts (face-to-face or online conference calls) to present the financial and operating results of the Grenevia Group. Four quarterly earnings presentation conferences and approximately 30 investor meetings were held in 2022. In order to provide easy, quick and fair access to information on the Grenevia Group, the Company runs a corporate website at www.grenevia.com/relacje-inwestorskie, where it regularly posts current reports, periodic reports, presentations and other information relevant to understanding the Grenevia Group's activities, available in Polish and English. Parent of the Grenevia GroupGeneral informationGrenevia S.A. (formerly: FAMUR S.A.) of Katowice, entered in the National Court Register under No. KRS 0000048716 ("Grenevia", the "Company"), is the parent of the Grenevia Group (the "Group", the "Grenevia Group"). Grenevia's registered office is located in Katowice, at Al. Roździeńskiego 1a. Principal business - manufacture of machinery for mining, quarrying and construction (PKD 28.92 A). Grenevia S.A. also conducts holding company activities aimed at building and supporting new operations of the Grenevia Group relating to renewable energy sources (including solar photovoltaics, power engineering, electric mobility). Organisational changes at Grenevia S.A.The implementation of the strategy to transform the Grenevia Group from a manufacturer of soft rock mining machinery into an organisation investing in green transition projects required introducing changes to the Company's organisational structure. In January 2022, a decision was made to alter the Group's organisational structure and product mix in order to ensure continued efficient management of its existing business lines as well as effective integration of any new entities acquired or to be acquired by the Group in accordance with its new strategic directions. The Group's resources were divided into two areas: the FAMUR operations segment (which prepares its own set of accounts) and the corporate management holding segment. Company branches: scrollen
Organisational and equity linksOrganisational and equity links, including major investments in securities, financial instruments, intangible assets and real propertyTDJ Equity I Sp. z o.o. is the parent of Grenevia S.A. TDJ S.A. is the ultimate parent. In 2022, a process to transform the Grenevia Group into an organisation investing in green transition projects continued in line with the adopted strategic directions. Grenevia S.A. supported the financing of investments related to the sector of development and turnkey delivery of utility-scale solar projects for the B2B market (see 'Changes in the share capital and organisational structure of the PV segment') and in November 2022 started operations in the electric mobility sector by acquiring 51 % of shares in Impact Clean Power Technology S.A. of Warsaw. The purchase was financed with proceeds from the issue of Green Bonds in 2021. For information on equity interests in subsidiaries, associates and other entities held by Grenevia S.A., which are not intended for sale in the near term, see Note 23 to the separate financial statements of Grenevia S.A. For information on intangible assets and property, see Note 23 and Note 27, respectively, to the separate financial statements of Grenevia S.A. Discussion of financial highlightsGrenevia S.A. 's financial highlightsscrollen
Grenevia S.A.'s revenue for the 12 months ended December 31st 2022 amounted to PLN 1,166m, having increased by PLN 250m (27 %) from PLN 916m in 2021. The share of export revenue expanded by 8pp year on year, to 35 %, mainly as a result of a significant growth in sales to the US. In the three months ended December 31st 2022, revenue went up by PLN 54m (20 %) year on year, to PLN 322m. The revenue increase drove an improvement in operating profit, which came in at PLN 284m for the 12 months ended December 31st 2022 and PLN 95m for the three months ended December 31st 2022. EBITDA improved by 43 % (PLN 128m) in the 12 months to December 31st 2022, and by 70 % in the three months ended December 31st 2022. EBITDA margin for the 12 months of 2022 and the three months ended December 31st 2022 was 37 % (up by 4pp year on year) and 40 % (up by 12pp year on year), respectively. The improved profitability resulted in a net profit of PLN 252m for the 12 months ended December 31st 2022. Net profit as a percentage of revenue was 22 % (relative to 4 % in 2021). The net profit for 2021 was affected by goodwill impairment of PLN 95m, described in detail in 'Material non-recurring events'. Adjusted for this item, the net profit margin in 2021 was 14 %. Material non-recurring eventsIn 2022, there were no material (over 10 % of net profit) events affecting Grenevia S.A. 's net profit. In 2021, a material non-recurring event with a bearing on the results was the recognition of a PLN 95m goodwill impairment (see Note 20 to the separate financial statements of Grenevia S.A. for 2022). Workforce and remunerationIn 2022, Grenevia S.A. has the average headcount of 1,562 FTEs (1,623 FTEs in 2021), with employment costs at PLN 183m (PLN 167m in 2021). Assets and financial resources managementAnalysis of assets, equity and liabilitiesscrollen
In 2022, assets rose by PLN 34m, to PLN 2,633m as at the end of December 2021. Current assets fell to PLN 1,535m, or by PLN 311m, the principal reason being a decrease in trade receivables and cash, partly offset by an increase in current financial assets. Growth of PLN 345m in non-current assets was mainly attributable to a higher amount of investments in subsidiaries. In the 12 months ended December 31st 2022, non-current liabilities remained stable at PLN 636m, with current liabilities down by PLN 239m, chiefly as a result of a decrease in current financial liabilities. Assessment of financial resources managementscrollen
As at December 31st 2022, liabilities from borrowings and leases exceeded net cash by PLN 131m. Total non-current and current financial liabilities fell by PLN 234m, to PLN 629m. Cash balance went down by PLN 455m, to PLN 498m. The decrease in cash followed chiefly from the acquisition of shares in Impact, redemption of Series A Notes with interest payments, and investments in subsidiaries and associates in the PV segment. Contingent liabilitiesThe contingent liabilities of Grenevia S.A. are mainly attributable to guarantees provided. For a description of contingent liabilities, see Note 42 to the financial statements of Grenevia S.A. for 2022. Corporate governance at Grenevia S.A.Shareholding structureShareholders holding directly or indirectly (through subsidiaries) 5 % or more of total voting rights at the General Meeting of Grenevia S.A. as at the issue date of this full-year report and changes in the shareholding structure after the issue of the previous interim reportTo the best of the knowledge of the Grenevia S.A. Management Board, and based on the most recent Extraordinary General Meeting of February 16th 2023 (see Current Report No. 4/2023 of February 16th 2023), the shareholding structure of Grenevia S.A. as at the date of issue of this full-year report for the 12 months ended December 31st 2022 was as follows: scrollen
* Aggregate value for accounts of OFE and DFE funds managed by NN PTE. ** Aggregate value for accounts of OFE and DFE funds managed by Allianz PTE. *** Held indirectly through the subsidiary FAMUR Finance Sp. z o.o. **** Total other shareholders holding less than 5 % of total voting rights. In the period between the issue of the most recent interim report for the three months ended September 30th 2022 and the date of issue of this full-year report, there were the following changes in the Grenevia S.A. shareholding structure: scrollen
Members of the management or supervisory personnel holding Grenevia S.A. shares or rights to Grenevia S.A. shares, and changes in their holdings after the issue of the previous report, according to Grenevia S.A.'s knowledgeAccording to the Company's knowledge, no Grenevia S.A. shares were held by the Company's management or supervisory personnel as at December 31st 2022 and as at the issue date of this Report, with the proviso that during the reporting period and as at the issue date of this Report a majority interest in the Company was held by Tomasz Domogała (indirectly, through TDJ S.A.'s subsidiary TDJ Equity I Sp. z o.o.), remaining a major shareholder in the Company. Significant holdings and special control rightsFor details of the shareholding structure as at December 31st 2022 and as at the date of the most recent Extraordinary General Meeting of the Company, see section 'Shareholding structure'. There are no securities conferring any special control rights in the Company. Also, the Management Board is not aware of any restrictions on the transferability of Company shares or of any agreements that could lead to future changes in the shareholding structure. Operation and key powers of the General Meeting; shareholder rights and how they are exercisedThe General Meeting of Grenevia S.A. operates in accordance with the Rules of Procedure for the General Meeting, the Company's Articles of Association, and the Commercial Companies Code. Apart from other matters provided for in relevant laws, the key powers of the General Meeting include: scrollen
The General Meeting of a public company is convened by publishing a relevant notice on the company's website and in the manner required for the publication of current information pursuant to the Act on Public Offering, Conditions Governing the Introduction of Financial Instruments to Organised Trading, and Public Companies. Such notice should be published at least twenty-six days prior to the date of the General Meeting. A notice of a public company's General Meeting should include as a minimum: scrollen
Only persons who are Company shareholders sixteen days prior to the date of the General Meeting (the record date for participation in the General Meeting) have the right to attend the Meeting. The record date for participation in the General Meeting is the same for holders of rights attached to bearer shares and registered shares. The Chairperson's role is to open and chair the General Meeting, and to ensure that the Meeting proceeds smoothly and that the rights and interests of all the shareholders are respected. After presentation of each item on the agenda by a rapporteur, the Chairperson of the General Meeting opens the discussion. More than one agenda item may be discussed at the same time. Participants take the floor in the order in which they requested to speak. With respect to each agenda item and procedural matter, a shareholder is only entitled to speak and reply once. The General Meeting may only pass resolutions concerning matters on its agenda. One share carries the right to one vote at the General Meeting. A shareholder may vote each of their shares in a different manner. A shareholder has the right to vote on each proposal once. Resolutions of the General Meeting are passed with an absolute majority of votes, unless the Company's Articles of Association or the Commercial Companies Code provide otherwise. Resolutions are voted on in an open ballot. A secret ballot is ordered in the case of voting on appointment or removal from office of members of the Company's governing bodies or its liquidators, on bringing somebody to account and on personnel matters. The Chairperson of the General Meeting announces the results of a vote, which are then recorded in the minutes of the meeting. The minutes of a General Meeting are drawn up by a notary public. Shareholders and members of the Company's governing bodies have the right to review the minutes of General Meetings and to request to be issued their copies certified as true by the Management Board. Amendments to the Articles of AssociationAny amendment to the Company's Articles of Association requires a resolution by the General Meeting and must be entered in the National Court Register. An amendment to the Articles of Association must be submitted by the Management Board to the registry court within three months from the date on which the General Meeting passed the resolution introducing the amendment. The General Meeting may authorise the Supervisory Board to prepare a consolidated text of the amended Articles of Association or to make other editorial changes to the Articles of Association as specified in the General Meeting's resolution. On March 17th 2022, the District Court for Katowice-Wschód in Katowice, 8th Commercial Division of the National Court Register, registered the amendments to the Company's Articles of Association made pursuant to Resolutions Nos. 3 and 4 of the Extraordinary General Meeting of the Company held on December 14th 2021. The Company's share capital was reduced from PLN 5,747,632.12 to PLN 5,746,806.73, that is by PLN 825.39, which corresponds to the total par value of cancelled treasury shares. Art. 6.1 of the Company's Articles of Association was amended. On April 3rd 2023, the District Court of Katowice - Wschód in Katowice, 8th Commercial Division of the National Court Register, registered the amendments to the Company's Articles of Association made pursuant to Resolution No. 2 of the Extraordinary General Meeting of the Company held on February 16th 2023, under which the Company's business name was changed from FAMUR Spółka Akcyjna to Grenevia Spółka Akcyjna. The Company may use the abbreviated name of Grenevia S.A. Art. 1 of the Company's Articles of Association was amended. The consolidated text of the Articles of Association is available on the Company's corporate website at www.grenevia.com/lad-korporacyjny. Composition of the Management Board and the Supervisory Board Management Board of Grenevia S.A.Composition of the Management Board as at December 31st 2022scrollen
Mirosław Bendzera, President of the Management Board of Grenevia S.A., is responsible for the Grenevia Group's strategy and development. He holds a master's degree in Management and Marketing from the Kraków University of Economics. He served on the governing bodies of Ponar Wadowice S.A. and Ponar Silesia S.A. and held a managerial position at Toyota Motor Poland Co. Ltd. Since 2009, he has served on the Management Boards of companies related to the TDJ Group. He was President of the Management Board of Odlewnia Żeliwa Śrem S.A., Pioma-Odlewnia Sp. z o.o. and Polska Grupa Odlewnicza S.A. In October 2014, he assumed the position of President of Grenevia S.A. From January to July 2016, he was a member of the Management Board of Elgór+Zamet Sp. z o.o. Beata Zawiszowska, Vice President of the Management Board, is responsible for coordination of finance and accounting activities of the FAMUR Group. Since 1998, she has served on the Management Boards of companies affiliated with the TDJ Group. Ms Zawiszowska has been a member of the Management Board of Grenevia S.A. since its inception in 2002. Tomasz Jakubowski is Vice President of the Management Board, Chief Operating Officer, Underground segment. At the Grenevia Group he is in charge of operational management of the Underground business. He is a graduate of the Faculty of Transport of the Silesian University of Technology in Katowice. He also completed post-graduate management studies based on the MBA programme organised by SGH Warsaw School of Economics in cooperation with the University of Minnesota (USA). During his professional career Mr Jakubowski has held managerial positions and served as member of Management Boards at many TDJ Group companies, including Zakłady Mechaniczne Zamet S.A. i FMG Pioma S.A. In 2003-2010, he was President and Vice President of the Management Board of Grenevia S.A. He also served as President of the Management Board of Fabryka Zmechanizowanych Obudów Ścianowych FAZOS S.A. From July 2012, he was a member of the Supervisory Board of Kompania Węglowa S.A., and from May 2014 to January 2015 he served as Vice President, Restructuring and Development at the company. From May 2015, he served as President of the Management Board of Zamet S.A. At the Zamet Group, he also served as Chairman of the Supervisory Board of Zamet - Budowa Maszyn S.A. (from August 2017) and President of the Management Board of Zamet Industry Sp. z o.o. (from January 2018). Dawid Gruszczyk currently serves as Vice President of the Management Board, Sales, a position established by the Supervisory Board on July 16th 2021 in place of the position of Vice President of the Management Board, Underground Sales. He is in charge of the Grenevia Group Underground segment's domestic and export sales. He graduated from the Katowice University of Economics, completed a postgraduate programme at the Warsaw School of Economics and the General Ziętek Silesian University of Management in Katowice. In 2003-2008, he worked at the Office of Management Board Advisors at ELGÓR + HANSEN Sp. z o.o. From 2004, he held managerial positions in ELGÓR + ZAMET Sp. z o.o. He has been a member of the Management Board of Grenevia S.A. since January 2016. Ireneusz Kazimierski served as Vice President of the Management Board, Chief Business Development Officer, until December 31st 2022. At the Group, he was responsible for providing support to the Management Board, sales and R&D, liaising with existing and prospective customers, driving growth in new and existing markets, supporting product development, and building strategic partnerships. He also exercises supervision of associated companies operating in the Surface segment. Mr Kazimierski holds a degree in Chemical Technology from the Faculty of Chemistry of the Łódź University of Technology. He holds a certificate of completion of the ICAN Institute Harvard Business management programme. He began his professional career in 1999 at Ceramika Paradyż. Later, he progressed along the management career path working for Ultra Pack, the Rovese Group (Cersanit and Opoczno), and other companies. As the CEO of Rovese he was responsible for implementing the growth strategy, and he engaged in the process of transforming the company into a global organisation. From November 2017 to March 2019, he served as President of the Management Board of Narzędzia i Urządzenia Wiertnicze GLINIK Sp. z o.o. of Gorlice, and from November 2017 to November 2019 he was Vice President, Chief Operating Officer at PGO S.A. Mr Kazimierski served on the Management Board of Grenevia S.A. from November 2019 to the end of 2022. For a full description of positions held and functions performed by Members of the Management Board, see Current Reports No. 35/2019 of June 13th 2019 and No. 57/2019 of November 12th 2019. Changes in the Management Board composition in 2022On December 13th 2022, Ireneusz Kazimierski resigned from the position of Vice President of the Management Board, Chief Business Development Officer, with effect from the end of December 31st 2022. The reason for his resignation is full commitment to his work at Impact Clean Power Technology S.A. of Warsaw, a subsidiary of Grenevia S.A. Composition of the Management Board as at the issue date of this Reportscrollen
Supervisory Board of Grenevia S.A. and its committeesComposition of the Supervisory Board as at December 31st 2022:scrollen
* Supervisory Board member meeting statutory independence criteria. The committees operating within the Supervisory Board of Grenevia S.A. since 2018 are the Nomination and Remuneration Committee, Strategy and Investment Committee, and Audit Committee. The composition of each committee is presented below. Strategy and Investment Committeescrollen
Nomination and Remuneration Committeescrollen
Audit Committeescrollen
Independent Supervisory Board Members:scrollen
Tomasz Domogała has a university degree. He is a graduate of the AGH University of Science and Technology of Kraków (M.Sc.Eng. from the Faculty of Mechanical Engineering and Robotics) and the University of Loughborough, UK (Faculty of Mechanical and Manufacturing Engineering). Tomasz Domogała holds an MBA from the Stanford Graduate School of Business, US. Mr Domogała holds indirectly a controlling interest in FAMUR S.A. He served on the Supervisory Boards of: Teamtechnik Production Technology Sp. z o.o., FAMAK S.A., FPM S.A., PGO S.A., ZAMET S.A., Narzędzia i Urządzenia Wiertnicze GLINIK Sp. z o.o., PRIMETECH S.A., Fabryka Maszyn GLINIK S.A., PME S.A., Odlewnia Żeliwa Śrem S.A., Zamet-Budowa Maszyn S.A., Pioma Odlewnia Sp. z o.o., and Gerlach S.A. Since 2010, he has sat on the Supervisory Board of TDJ S.A. of Katowice. His service on the Company's Supervisory Board started in 2004. Czesław Kisiel holds a university degree. He is a graduate of the Kraków University of Economics, with a diploma in Planning after completing the 'Planning and Financing of National Economy' programme at the Faculty of Production Economics. He completed the MBA-based Postgraduate Managerial Programme at the Warsaw School of Economics. Mr Kisiel also completed a course for receivers and liquidators, as well a course for members of the supervisory boards of state-stock companies and state-owned companies, organised by the Ministry of Industry and Trade and the Business Consulting Service. He has sat on the Company's Supervisory Board since 2009. He served on the Supervisory Boards of: Teamtechnik Production Technology Sp. z o.o., PRIMETECH S.A., PARTNER S.A., FPM S.A., FAMAK S.A., FUGO ODLEW Sp. z o.o., FUGO S.A., PGO S.A., Fabryka Maszyn GLINIK S.A., ZAMET S.A., PME S.A., REMAG S.A., Pemug Inwestycje i Sprzęt Sp. z o. o., Zamet - Budowa Maszyn S.A., Towarzystwo Funduszy Inwestycyjnych Silesia S.A., Zakłady Mechaniczne ZGODA Sp. z o.o., Jastrzębska Spółka Węglowa S.A., Pioma - Odlewnia Sp. z o.o., and Warmińskie Zakłady Przetwórstwa Owocowo-Warzywnego Kwidzyn Sp. z o.o. He served on the Management Boards of: TDJ Equity VI Sp. z o.o., TDJ Equity V Sp. z o.o., TDJ Equity IV Sp. z o.o., Przedsiębiorstwo Usługowe AB Consulting Sp. z o.o., TDJ Sp. z o.o., Zamet - Budowa Maszyn S.A., TDJ Investments Sp. z o.o., Fabryka Maszyn Górniczych PIOMA S.A., Lodus Sp. z o.o., Przedsiębiorstwo Handlu Chemikaliami Chemia-Wrocław S.A., Polaris - Chłodnie Śląskie Sp. z o.o., Kinoplex-Silesia Sp. z o.o., and Weglokoks-Agro Sp. z o.o. Currently, he sits on the Management Boards of: KTW Sp. z o.o., KTW II Sp. z o.o. TDJ EQUITY I Sp. z o.o., TDJ EQUITY II Sp. z o.o., TDJ EQUITY III Sp. z o.o., TDJ Finance Sp. z o.o., TDJ S.A - member of the Management Board. Jacek Leonkiewicz is a graduate of the Warsaw School of Economics and holds a CEMS Master in International Management. He also studied at Universidad Carlos III of Madrid and Copenhagen Business School. He began his professional career at J.P. Morgan (an investment bank) in London, UK, where he worked in the Equity Capital Markets, Debt Capital Markets and Equity Private Placements teams. He was also a member of the Debt Capital Partners team at Merrill Lynch in London. Mr Leonkiewicz then worked for PKO TFI, where his role was equity market research, with particular focus on construction, industrial, property development and transport companies. In 2013-2015, Mr Leonkiewicz served as Managing Director for Corporate Supervision and Privatisation at PKP S.A., where he was responsible for the monitoring of privatisation processes at the PKP Group. He was in particular responsible for the stock exchange debut and accelerated bookbuild of PKP Cargo. From January 2015 to March 2016 he was CEO of PKP Intercity S.A. Since April 2016, he has been a managing partner at TDJ S.A., and in 2023 he took the position of President of its Management Board. Mr Leonkiewicz served on the Supervisory Boards of: Spedkoks, PKP Energetyka, TK Telekom and PKP Cargo, PRIMETECH S.A., Odlewnia Żeliwa ŚREM S.A., Pioma - Odlewnia Sp. z o.o., and Pemug S.A. Zamet - Budowa Maszyn S.A., and FAMAK S.A. Currently, he sits on the Supervisory Boards of Sports Resorts Solutions Sp. z o.o., PGO S.A., FPM S.A., Zamet S.A., Narzędzia i Urządzenia Wiertnicze GLINIK Sp. z o.o., TALKIN THINGS Sp. z o.o., TEAMTECHNIK PRODUCTION TECHNOLOGY Sp. z o.o., IMPACT CLEAN POWER TECHNOLOGY S.A., EDINA VETCARE GROUP S.A., and ADVANCED PRODUCTION TECHNOLOGY Sp. z o.o. Dorota Wyjadłowska graduated from the Cracow University of Economics majoring in Finance and completed postgraduate studies in financial and tax law at Warsaw School of Economics as well as in economic law at the Cracow University of Economics. She also passed the state exam for a tax advisor and was entered in the list of tax advisors. She worked for the Kraków Tax Chamber. She was a member of the Management Board of Equus S.A. and President of the Management Board of Spółka Doradztwa Podatkowe KDT Sp. z o.o. Since 2001, she has been the owner of a tax advisory firm under the name of Kancelaria Doradztwa Skarbowego Dorota Wyjadłowska, and in 2015 was appointed Vice President of the Management Board of Longline Sp. z o.o., responsible for finance and taxes. Ms Wyjadłowska meets the statutory independence criteria for a member of the Supervisory Board of Grenevia S.A. Tomasz Kruk has a university degree. He graduated from the Faculty of Economics and Management of the Lazarski University in Warsaw, with an MA degree in economics (specialisation: strategic management). He studied risk management at the Warsaw School of Economics (Postgraduate Studies in Risk Management at Financial Institutions). In 2006 he became a member of the Institute of Internal Auditors, FL, USA, and in 2008 was designated as a Certified Internal Auditor (CIA). He is qualified in project management (having passed Prince2 Foundation Examination). A member of the International Compliance Association, Mr Kruk received an ICA International Diploma in Governance, Risk & Compliance. He has over 10 years of experience in compliance audits, internal audits, special audits, advisory audits, litigation advice, risk management, as well as fraud and abuse risk management projects. His project experience spans various sectors, including finance, logistics, transport, real estate management, land surveying and cartography, infrastructure project management, IT and telecommunications, HORECA/holiday resort management, property development and light industry. Mr Kruk has a long track record of work in management and supervisory positions, including as a member of investment committees. For more than a decade, he has worked directly with the management and supervisory boards of both private and public sector companies. Tomasz Kruk meets the statutory independence criteria for a member of the Supervisory Board of FAMUR S.A. Adam Toborek holds a university degree. He completed the Master of Business Administration programme at the Kozminski University in Warsaw. He also completed a number of managerial courses in Poland and abroad: Project Portfolio Management - OMEC (2014), Conscious Leadership - MPS (2013), Leadership Training Corporate Management Platform - Ramirent PLC (2010), Young Business Talents - Smithfield (2000), and Cooperative Management - VOCA (1998). Since 2017, he has been Vice President of FAMUR S.A.'s Longwall Systems Segment, responsible for sales, and since January 2018 - Vice President of the FAMUR S.A. Management Board; from January 1st 2019 to June 21st 2021, he served as Vice President of the Management Board, Underground Segment Export Sales. He started his professional career in BRADO companies, where he held various positions, including President of the Management Board of Z.M. BRADO 2 S.A. He also held the position of President of the Management Board of RODO SRL of Romania and of Lodus Sp. z o.o. He was Head of the Distribution Centre at Animex S.A. (Smithfield Foods Incorporated), and in 2000-2015 he worked for the RAMIRENT Group of Finland, where he served as Director of the South Region, Vice President of the Management Board of RAMIRENT Scaffolding Sp. z o.o., and Member of the Management Board of RAMIRENT S.A. In 2015-2017, he was Vice President (from 2015) and then President (from 2016) of the Management Board of Narzędzia i Urządzenia Wiertnicze GLINIK Sp. z o.o. Now he is a member of that company's Supervisory Board. He sits on the Supervisory Boards of: FINANCE PV 1 S.A., ELGÓR + HANSEN S.A., TEAMTECHNIK PRODUCTION TECHNOLOGY Sp. z o.o., PROJEKT-SOLARTECHNIK S.A., ZAMET S.A., FPM S.A., PGO S.A., and FAMUR S.A. He holds positions on the Management Boards of: PV CZERNIEWICE 2 Sp. z o.o., PV CZERNIEWICE 1 Sp. z o.o., ADVANCED PRODUCTION TECHNOLOGY Sp. z o.o., TDJ EQUITY II Sp. z o.o., TDJ EQUITY VI Sp. z o.o., TDJ EQUITY I Sp. z o.o., TDJ EQUITY III Sp. z o.o. For a full description of positions held and functions performed by Members of the Supervisory Board, see Current Report No. 26/2021 of June 15th 2021 on nomination of candidates for Supervisory Board members and Current Report No. 30/2021 of June 22nd 2021 on the appointment of Management Board members for a new term. Current reports are available on the Company's corporate website at www.grenevia.com/raporty The appointed Supervisory Board Members are not engaged in any activities competing with the Company's business and are not partners in any competing partnership under civil law or another type of partnership, or members of the governing bodies of other companies. None of the persons specified above is entered in the Register of Insolvent Debtors maintained under the National Court Register Act. Dorota Wyjadłowska and Tomasz Kruk meet the statutory independence criteria for a member of the Company's Supervisory Board. Changes in the Supervisory Board composition in 2022On December 13th 2022, the Company received a statement from TDJ Equity I Sp. z o.o. of Katowice, a shareholder holding over 20 % of voting rights at the General Meeting of Grenevia S.A, announcing the appointment, made pursuant to Art. 13.3 and Art. 13.4 of the Company's Articles of Association, of Robert Rogowski to the Supervisory Board of Grenevia S.A., effective from January 1st 2023. Robert Rogowski has a university degree. He graduated from the University of Warmia and Mazury in Olsztyn with the Master of Science degree from the Faculty of Mechanical Engineering, and then completed postgraduate studies in business management at the University of Information Technology and Management in Olsztyn and the Central Europe Trust and The Chartered Association of Certified Accountants ACCA. Since 1998, he has been working in finance, strategic and operational management, mainly for WSE listed companies. He has held managerial functions at: Indykpol S.A. and Fabryka Mebli Forte S.A. From 2014 to his joining the TDJ Group, Mr Rogowski was the CFO at Rolmex S.A. He also served as Vice President of Wine Taste Sp. z o.o. and a member of the Supervisory Board of Indykpol Brand Sp. z o.o. He has been involved with the TDJ Group since 2017. In 2017-2018, he served on the Supervisory Board of Grenevia S.A. He currently serves on the Supervisory Boards of: PGO S.A., FPM S.A., Narzędzia i Urządzenia Wiertnicze GLINIK Sp. z o.o., TEAMTECHNIK PRODUCTION TECHNOLOGY Sp. z o.o., PME S.A. and ZAMET S.A. Mr Rogowski is a member of the Management Board of TDJ S.A., TDJ ESTATE Sp. z o.o. and INVEST TDJ ESTATE Sp. z o.o. He is not a partner in any partnership under civil law or another type of partnership, a member of a governing body of any incorporated company, or a member of a governing body of any other legal entity competing with the Company. Mr Rogowski is not entered in the Register of Insolvent Debtors maintained pursuant to the National Court Register Act. Composition of the Supervisory Board as at the issue date of this Reportscrollen
* Supervisory Board member meeting statutory independence criteria. Rules governing appointment, removal and replacement of the Company's Management Board members and amendment of the Company's Articles of Association; powers of Management Board members (including in particular the authority to resolve to issue or buy back shares)Members of the Management Board are appointed and removed by the Supervisory Board. The Management Board consists of one or more members. When appointing members of the Management Board, the Supervisory Board determines their number and defines the function to be performed by a given person on the Management Board. Members of the Management Board are appointed for a joint term of office. The term of office of the Management Board is three years. A member of the Management Board may at any time resign from his or her position. A resignation should be submitted to the Company in writing. The Management Board manages the Company's affairs and represents the Company before third parties. Resolutions of the Management Board are passed by an absolute majority of votes. In the case of a voting tie, the President of the Management Board has the casting vote. The President of the Management Board directs the Management Board's work; in particular, the President coordinates, supervises and organises the Management Board members' work and convenes and chairs meetings of the Management Board. In the event of the President's absence, their duties are performed by a Vice President of the Management Board or another Management Board member designated for that purpose by the President. In accordance with the Company's Articles of Association, the Management Board is authorised to increase the Company's share capital by up to PLN 2,523,491, through the issue of new shares with an aggregate par value of up to PLN 2,523,491, by way of one or more share capital increases within the limit specified above (the authorised share capital). As part of the authorisation to increase the share capital within the authorised capital limit, the Management Board is authorised to issue subscription warrants referred to in Art. 453.2 of the Commercial Companies Code, exercisable by the date of expiry of the authorisation. The Management Board is authorised to increase the share capital within the period of three years from the date of registration by the competent court of the amendment to the Articles of Association authorising the Management Board to increase the share capital within the authorised capital limit of up to PLN 2,523,491. In exercising the authorisation referred to in the preceding sentences, the Management Board decides independently - except where the provisions of the Commercial Companies Code provide otherwise - on all matters related to the share capital increase; in particular the Management Board is entitled to: scrollen
The General Meeting authorised the Company's Management Board to take any steps necessary to list shares issued by the Company within the authorised capital limit on the Warsaw Stock Exchange; this authorisation covers in particular: scrollen
The Management Board is not authorised to make a decision regarding buy-back of shares. The detailed scope of rights and duties of the Management Board and its operating procedures are defined in the Rules of Procedure for the Management Board. The Rules of Procedure for the Management Board are adopted by the Management Board and approved by the Supervisory Board. With the Supervisory Board's consent of March 12th 2020, on March 12th 2020 the Company's Management Board resolved to amend the existing Rules of Procedure for the Management Board of Grenevia S.A. by updating its provisions e.g. to further specify the number of Management Board members, to systematise the rules and form of making decisions during or outside of the Company's Management Board meetings (i.e. voting by written ballot or by means of remote communication) and to formalise the acceptable methods and means of communication between Management Board members. The main purpose of these amendments is to facilitate the remote decision-making process. The consolidated text of the Rules of Procedure for the Management Board is available on the Company's website at www.grenevia.com/lad-korporacyjny. Remuneration of management and supervisory personnelThe remuneration policy for members of the Management Board and Supervisory Board of Grenevia S.A. was approved by the Annual General Meeting of the Company in Resolution No. 23 of June 29th 2020. The remuneration policy sets out the framework for awarding remuneration to members of the Grenevia S.A. Management Board and Supervisory Board. It forms part of the Company's governance that relies on a corporate culture consisting of a transparent organisational structure, ethical values, personnel competencies and skills, powers and responsibilities, information channels, controls, and a risk management system. The full text of the remuneration policy is available on the Company's website at: www.grenevia.com/walne-zgromadzenie 2020 All remuneration paid to Management Board and Supervisory Board members is subject to compliance with the Company's remuneration policy. For details on remuneration of members of the Management Board and Supervisory Board, see Note 51 to the consolidated financial statements of the Grenevia Group for 2022. Members of the Company's Management Board are not employed under contracts of employment. They receive remuneration in amounts determined by way of a Supervisory Board resolution. In 2022, the Company did not enter into any non-competition agreements with Management Board members. Pursuant to the remuneration policy for Management and Supervisory Board members in place at the Company, if a Management Board member is removed during their term of office, or if they resign or are not re-appointed for another term of office, such Management Board member will have the right to receive a severance pay in the following amounts: in the case of the President of the Management Board - from three to six times their fixed gross monthly remuneration, depending on the Supervisory Board's decision; in the case of other Management Board members - from one to three times their fixed gross monthly remuneration, depending on the Supervisory Board's decision. The Company does not have in place any employee stock option scheme. On June 22nd 2022, by way of Resolution No. 20, the Annual General Meeting of Grenevia S.A. issued a positive opinion on the Supervisory Board's Report on the Remuneration of Members of the Management and Supervisory Boards of FAMUR S.A. for 2021. Resolutions of the Annual General Meeting, including any appendices thereto, are available on the Company's corporate website at www.grenevia.com/walne-zgromadzenie 2022 Obligations arising under retirement and similar benefitsGrenevia S.A. does not operate any additional old age and disability pension schemes or early retirement programmes for members of the Management or Supervisory Boards. No remuneration in the form of financial instruments is granted to members of the Management Board and Supervisory Board of Grenevia S.A. The table below presents information on the remuneration of members of the Management Board of the Parent for the financial year 2022, in accordance with Section 70.7.17 of the Regulation on current and periodic information scrollen
* The amounts of bonuses shown in columns C and D are a component of the amounts presented in column B (remuneration + bonus). ** The amounts shown in column F are the sum of the amounts shown in columns B and E. *** Subordinated entities mean subsidiaries, jointly-controlled entities and associates. Members of the Company's Supervisory Board receive remuneration on the terms and in the amounts set forth in a General Meeting resolution. Pursuant to Resolution No. 19 of the Extraordinary General Meeting of Grenevia S.A. of October 18th 2017 to determine the terms of remuneration for members of the Supervisory Board of Grenevia S.A., members of the FAMUR S.A. Supervisory Board receive gross monthly remuneration of PLN 500. Members of the Grenevia S.A. Audit Committee receive additional gross monthly remuneration of PLN 500. The table below presents information on the remuneration of members of the Supervisory Board of the Parent for the financial year 2022, in accordance with Section 70.7.17 of the Regulation on current and periodic information scrollen
* The amounts of bonuses shown in columns C and D are a component of the amounts presented in column B (remuneration + bonus). ** The amounts shown in column F are the sum of the amounts shown in columns B and E. *** Subordinated entities mean subsidiaries, jointly-controlled entities and associates. Diversity policyGrenevia S.A. has a diversity policy in place, which requires taking measures to: scrollen
Furthermore, the diversity policy assumes that in electing members to the Group companies' governing bodies and their key managers, the Grenevia Group seeks to ensure diversity, especially in terms of gender, educational background, age, and professional experience. Qualifications and expertise required to perform a particular function are the key considerations in determining whether a person may take up a particular position. Description of the internal control systemThe key features of the internal control and risk management systems used at the Company in the process of preparing financial statements are as follows: scrollen
At the beginning of January 2019, an Internal Audit Department was established at the Company. In 2022, the Company did not create any additional internal audit units, and all internal control, risk management and compliance functions were performed within the internal audit, corporate controlling and legal departments. Audit CommitteeThe Audit Committee is an advisory and opinion giving body, acting collectively within the Supervisory Board and supporting the Supervisory Board, particularly with its recommendations, proposals, opinions and reports. Its responsibilities include monitoring of the effectiveness of the internal control and risk management systems as well as of the internal audit function, also with respect to financial reporting. Two Audit Committee members meet the independence criteria specified in Art. 129.3 of the Act on Statutory Auditors, Audit Firms and Public Oversight of May 11th 2017 (Dz.U. of 2022, item 1302). At least one member of the Audit Committee has knowledge of and skills in accounting or financial statements auditing and at least one member of the Audit Committee has knowledge and skills relevant for the industry in which the Company operates, or the individual members of the Audit Committee have knowledge and skills relevant for different aspects of that industry. In 2022, the Audit Committee consisted of: scrollen
Members of the Supervisory Board and members of Supervisory Board Committees act on the basis of the Commercial Companies Code, the Company's Articles of Association and the Rules of Procedure for the Supervisory Board published on the Company's website at www.grenevia.com/relacje-inwestorskie/lad-korporacyjny/, and are required to comply with the corporate governance principles stipulated in the Best Practice for GPW Listed Companies, except for those with respect to which the Company has stated that they are not complied with (in the Grenevia S.A.'s statement of compliance with corporate governance standards). On July 29th 2021, the Company updated its statement of compliance with corporate governance standards. The full text of the statement is available on the Company's website at www.grenevia.com/relacje-inwestorskie/lad-korporacyjny/. As at December 31st 2022, the Company's statement of compliance with corporate governance standards remained unchanged. For details regarding education and professional experience of the persons holding the positions referred to above, see section 'Supervisory Board of Grenevia S.A. and its committees'. Having analysed the practices and procedures set out in Art. 130.1.5-7 of the Act on Statutory Auditors, Audit Firms and Public Oversight, the Audit Committee adopted: scrollen
At the beginning of January 2019, an Internal Audit Department was established at the Company. In 2022, the Company did not create any additional internal audit units, and all internal control, risk management and compliance functions were performed within the internal audit, corporate controlling and legal departments. Additional information on the Audit Committeescrollen
Number of Audit Committee or Supervisory Board meetings or meetings held by any other supervisory or governing body, devoted to the performance of audit committee duties:In 2022, Audit Committee meetings were held in the form of conference calls, and Audit Committee resolutions were voted on in writing. In 2022, the Audit Committee held four votes and its members took part in 1 conference call. Code of corporate governance standards applicable to the Company; the place where the code is available to the publicThe Company issues current and periodic reports, which are published on its corporate website. The website also includes information on key corporate events, financials and news. In July 2021, the Company updated its statement of compliance with the principles of the Best Practice for GPW Listed Companies following the coming into effect of the new Best Practice for GPW Listed Companies 2021 ("Best Practice 2021") on July 1st 2021. The amended text of the document including comments is available on the Warsaw Stock Exchange's official website, in the section devoted to corporate governance: www.gpw.pl/dobre-praktyki2021 and on the Company's website at www.grenevia.com/relacje-inwestorskie/lad-korporacyjny/. Extent of non-complianceIn the reporting period, the Company did not comply with 12 Best Practice principles: 1.2., 1.3.1., 1.4., 1.4.1., 1.4.2., 2.1., 2.2., 2.7., 2.11.6., 4.3., 4.8., 6.3. Under the WSE Rules, information on the corporate governance principles which the Company does not comply with, including the extent of and reasons for non-compliance, was provided on July 29th 2021 in EBI Current Report No. 1/2021, available on the Company's website at www.grenevia.com/relacje-inwestorskie/lad-korporacyjny/. In connection with the announcement of the Grenevia Group Sustainable Development Strategy in 2023, the Company will update the information on its compliance with the Best Practice principles, which will be presented in the Directors' Report for 2023. Information on the corporate governance principles which the Company does not comply with, including the extent of and reasons for such non-compliance in the reporting periodThe Company did not comply with Principle 1.2. in 2022. The principle requires that companies make available their financial results compiled in periodic reports as soon as possible after the end of each reporting period; should that not be feasible for substantial reasons, companies publish at least preliminary financial estimates as soon as possible. Reason for non-compliance: the Company indicates that the principle is complied with to a limited extent. The Company does not publish financial forecasts or preliminary financial estimates. It presents its financial results in periodic reports released within the time limits prescribed by law as soon as practicable after the end of each reporting period. The Company did not comply with Principle 1.3. in 2022. The principle requires that companies integrate ESG factors in their business strategy, including in particular: 1.3.1. environmental factors, including measures and risks relating to climate change and sustainable development; Reason for non-compliance: the Company indicates that the principle was complied with to a limited extent. As declared in the Environmental Policy, the Company is committed to minimising its environmental footprint on an ongoing basis, including by means of reasonable waste management involving waste sorting and transferring waste for reuse, introducing environment-friendly technological upgrades, reasonable energy utilities and water management, effective management of hazardous substances, and reducing emissions that are harmful to the environment. The Company applies aggregated GRI indicators to gauge its performance in this area. Also, in order to mitigate environmental risks, Group companies are required to observe the comprehensive Environmental Policy in their operations. Compliance with the Policy is monitored, and the Policy itself is reviewed on a regular basis. With regard to climate change issues and the new European Commission Guidelines on non-financial reporting of climate-related information (2019/C 209/01), the Company focuses on the analysis of non-binding guidelines which began in late 2019 and early 2020 and which is expected to enter the planning phase in subsequent reporting years so that the Company can present progress in their implementation in its future non-financial reports. The Company did not comply with Principle 1.4. in 2022. The principle requires that to ensure quality communications with stakeholders, as a part of the business strategy, companies publish on their website information concerning the framework of the strategy, measurable goals, including in particular long-term goals, planned activities and their status, defined by measures, both financial and non-financial. Reason for non-compliance: the Company indicates that the principle was complied with to a limited extent. In order to ensure quality communication with stakeholders, the Company publishes on its website information on the framework of its strategy, measurable goals, including in particular long-term goals, planned activities and their status, defined by measures, both financial and non-financial. The Company applies, among others, aggregated GRI indicators to gauge its performance in this area. Given the rapid pace of changes implemented across the Company following the launch of a new business segment, the Company is currently developing a new uniform framework for measuring its ESG performance and management across all of its business and as such has not yet adopted an ESG strategy. The Company did not comply with Principle 1.4.1. in 2022. The principle requires that to ensure quality communications with stakeholders, as a part of the business strategy, companies publish on their website information concerning the framework of the strategy, 1.4.1. explain how the decision-making processes of the company and its group members integrate climate change, including the resulting risks; Reason for non-compliance: the Company indicates that the principle was complied with to a limited extent. In view of the need to undertake a coordinated effort to minimise the potential adverse impact of the Company's business on climate change and to comply with increasingly stringent environmental laws and regulations, the Company is currently developing a new uniform framework for measuring and managing the impact of its operations on climate change across its organisation, including all Group entities. The Company applies aggregated GRI indicators. The Company did not comply with Principle 1.4.2. in 2022. The principle requires that the Company should present the equal pay index for employees, defined as the percentage difference between the average monthly pay (including bonuses, awards and other benefits) of women and men in the last year, and present information about actions taken to eliminate any pay gaps, including a presentation of related risks and the time horizon of the equality target. Reason for non-compliance: the Company indicates that the principle was complied with to a limited extent. Qualifications, expertise required to perform a particular function, and individual performance are the key factors in determining a person's remuneration. While the amounts of salaries paid to employees holding the same or similar positions may ultimately vary, they are always determined in compliance with any applicable labour legislation, including the principle of equal pay under Art. 18(3c) of the Labour Code, whereby employees are entitled to equal pay for equal work or work of equal value. The Company did not comply with Principle 2.1. in 2022. The principle requires that companies should have in place a diversity policy applicable to the management board and the supervisory board, approved by the supervisory board and the general meeting, respectively. The diversity policy defines diversity goals and criteria, among others including gender, education, expertise, age, professional experience, and specifies the target dates and the monitoring systems for such goals. With regard to gender diversity of corporate bodies, the participation of the minority group in each body should be at least 30 %. Reason for non-compliance: the Company indicates that the principle was complied with to a limited extent. On December 18th 2017, the Management Board of the Company adopted and implemented a diversity policy, which requires that all Grenevia Group companies take measures to prevent any discrimination based on gender, racial, national or ethnic origin, religion or religious denomination, philosophy of life, degree or type of disability, health, age, psychosexual orientation or gender identity, family status, lifestyle or any other possible discriminatory grounds (policy of equal treatment), and to manage diversity by developing strategies, policies and programmes that help create a work environment in which each employee can feel appreciated, contributing to the success of the entire Grenevia Group. Furthermore, the diversity policy assumes that in electing members to the Group companies' governing bodies and their key managers, the Grenevia Group seeks to ensure diversity, especially in terms of gender, educational background, age, and professional experience. Qualifications and expertise required to perform a particular function are the key considerations in determining whether a person may take up a particular position. The Company did not comply with Principle 2.2. in 2022. The principle requires that decisions to elect members of the management board or the supervisory board of companies should ensure that the composition of those bodies is diverse by appointing persons ensuring diversity, among others in order to achieve the target minimum participation of the minority group of at least 30 % according to the goals of the established diversity policy referred to in principle 2.1. Reason for non-compliance: the Company indicates that the principle was complied with to a limited extent. In electing members to the Group companies' governing bodies and their key managers, the Grenevia Group seeks to ensure diversity, especially in terms of gender, educational background, age, and professional experience. Qualifications and expertise required to perform a particular function are the key considerations in determining whether a person may take up a particular position. The principle is not applied to the extent that would ensure that the 30 % target is met. The composition of the Company's Supervisory Board is the result of decisions made by the General Meeting, while the composition of the Company's Management Board is defined by the Supervisory Board. The Company did not comply with Principle 2.7. in 2022. The principle requires that a company's management board members may sit on corporate bodies of companies other than members of its group subject to the approval of the supervisory board. Reason for non-compliance: the Company indicates that the principle was complied with to a limited extent. The principle is applied to a limited extent. In accordance with Art. 15.2.6 of the Company's Articles of Association, in conjunction with Art. 380 of the Commercial Companies Code, the Supervisory Board of the Company must grant prior consent for Management Board members to engage in any business activity that is in competition with those of the Company or to serve in any capacity at its competitors. The Company did not comply with Principle 2.11.6. in 2022. The principle requires that in addition to its responsibilities laid down in the legislation, the supervisory board prepares and presents an annual report to the annual general meeting once a year. Such report includes at least the following: information regarding the degree of implementation of the diversity policy applicable to the management board and the supervisory board, including the achievement of goals referred to in principle 2.1. Reason for non-compliance: the Company indicates that the principle is complied with to a limited extent; see the comment on Principle 2.1.. The Company did not comply with Principle 4.3. in 2022. The Principle requires that companies provide a public real-life broadcast of the general meeting. Reason for non-compliance: the Company indicates that the principle is not complied with for various reasons, including primarily the cost of arranging a real-time broadcast of the General Meeting, the need to ensure the technical safety and legal security of a General Meeting held online, and the Company's shareholding structure. The Company did not comply with Principle 4.8. in 2022. The principle requires that draft resolutions of the general meeting on matters put on the agenda of the general meeting should be tabled by shareholders no later than three days before the general meeting. Reason for non-compliance: the Company indicates that it applies the relevant provisions of the Commercial Companies Code in this regard. The Company did not comply with Principle 6.3. in 2022. The principle requires that if companies' incentive schemes include a stock option programme for managers, the implementation of the stock option programme should depend on the beneficiaries' achievement, over a period of at least three years, of pre-defined, realistic financial and non-financial targets and sustainable development goals adequate to the company, and the share price or option exercise price for the beneficiaries cannot differ from the value of the shares at the time when such programme was approved. Reason for non-compliance: the Company indicates that currently it does not operate any management stock option scheme. In accordance with the Company's Remuneration Policy, the remuneration of Supervisory Board members is not linked to any options or other derivative instruments or to any other variable components, and neither is it linked to the Company's performance. Other statements from the Management BoardThe auditorThe Company's auditor is BDO Spółka z ograniczoną odpowiedzialnością Sp.k. with its registered office at ul. Postępu 12, Warsaw, registered by the District Court for the Capital City of Warsaw, 13th Commercial Division of the National Court Register, under No. KRS 0000729684, entered in the list of qualified auditors of financial statements maintained by the Polish Agency for Audit Oversight (Polska Agencja Nadzoru Audytowego) under No. 3355. On July 11th 2022, the Company and BDO Spółka z ograniczoną odpowiedzialnością Sp.k. entered into an agreement for: scrollen
For information on the auditor's fees, see Note 48 to the separate financial statements of Grenevia S.A. for 2022 and Note 52 to the consolidated financial statements of the Grenevia Group for 2022. Statement of compliance with applicable accounting policiesThe Management Board of Grenevia S.A. consisting of: scrollen
certify that, to the best of their knowledge, the Grenevia Group's full-year consolidated financial statements, Grenevia S.A.'s full-year separate financial statements and the comparative data have been prepared in compliance with the applicable accounting standards, and give a true, fair and clear view of Grenevia S.A.'s the Group's assets, their financial condition and results of operations. This Directors' Report gives a fair view of the development, achievements and position of the Grenevia Group, and describes the key risks and threats. Grenevia S.A.'s financial statements and consolidated financial statements for 2022 were prepared in accordance with the International Financial Reporting Standards/International Accounting Standards (IFRS/IAS), as endorsed by the European Union. The financial statements were prepared by applying uniform accounting policies for like transactions and other events in similar circumstances. Grenevia S.A.'s and the Grenevia Group's financial statements were prepared in accordance with the same accounting policies and computation methods as those applied to prepare the most recent full-year financial statements. Unless stated otherwise, all amounts are presented in PLN million (PLNm). Non-financial statementThe non-financial report of the Grenevia Group and Grenevia S.A. for 2022 was prepared in accordance with Art. 49b of the Accounting Act. The report will be published and posted on Grenevia S.A.'s website at www.grenevia.com together with this Directors' Report.
Signatures of members of the Management Board of Grenevia S.A. Mirosław Bendzera Beata Zawiszowska Dawid Gruszczyk Tomasz Jakubowski Consolidated Financial Statements of Grenevia S.A. for 2022This document is a PDF copy of the official full-year consolidated financial statements of the GRENEVIA S.A. for 2022, prepared in the XHTML format. I. CONSOLIDATED FINANCIAL STATEMENTS OF THE GRENEVIA GROUPConsolidated statement of profit or loss (PLNm)scrollen
Consolidated statement of comprehensive income (PLNm)scrollen
Consolidated statement of financial position (PLNm)ASSETS scrollen
EQUITY AND LIABILITIES scrollen
Consolidated statement of changes in equity (PLNm)scrollen
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Consolidated statement of cash flows (PLNm)scrollen
II. ACCOUNTING POLICIES AND NOTES TO THE FINANCIAL STATEMENTS1. General informationName: GRENEVIA Spółka Akcyjna (formerly: FAMUR Spółka Akcyjna) - (hereinafter the "Parent" or "Grenevia") On February 16th 2023, the Extraordinary General Meeting resolved to change the Company name from FAMUR Spółka Akcyjna to GRENEVIA Spółka Akcyjna. The change was registered by the District Court for Katowice-Wschód in Katowice, 8th Commercial Division of the National Court Register, on April 3rd 2023. Registered office: Katowice 40-202, Al. Roździeńskiego 1A, Poland Principal place of business: Poland Principal business activity - manufacture of machinery for mining, quarrying and construction (PKD 28.92 A) The Grenevia Group (the "Grenevia Group" or "Group") also conducts other business activities, which are divided into the Power enginering, PV, and E-mobility segments, as described in Note 11. Registry court: District Court of Katowice, Commercial Division of the National Court Register; the Company is registered under No. KRS 0000048716 Duration of the entity: unlimited Reporting period: January 1st - December 31st 2022 TDJ Equity I Sp. z o.o. is the parent of GRENEVIA S.A. TDJ S.A. is the ultimate parent. 2. Composition of the Management BoardAs at December 31st 2022, the composition of the Management Board was as follows: scrollen
*Mr Kazimierski resigned from the Management Board with effect from the close of business on December 31st 2022. As at December 31st 2021, the composition of the Management Board was as follows: scrollen
3. Authorisation of consolidated financial statementsThese consolidated financial statements were authorised for issue by the Management Board on April 24th 2023. 4. Estimates and subjective judgement4.1. EstimatesThe preparation of financial statements requires that the Group's Management Board makes estimates. The Management Board reviews such estimates taking into account changes in the underlying factors, new information or past experience. 4.2. Subjective judgementWhere a given transaction does not fall within the scope of any standard or interpretation, the Management Board relies on its subjective judgement in the choice and application of accounting policies to ensure that the financial statements contain reliable information that gives a true, clear and fair view of the Group's assets, financial position, results of operations and cash flows. A subjective judgement is made to ensure that the financial statements reflect the economic substance of transactions, are objective, prepared in accordance with the principle of prudent valuation, and complete in all material respects. 4.3. Uncertainty related to tax settlementsThe regulations on value added tax, corporate income tax, and social security contributions are subject to frequent changes and amendments, with a resulting lack of appropriate points of reference, conflicting interpretations, and scarcity of established precedents to follow. Furthermore, the applicable tax laws lack clarity, which leads to differing opinions and diverse interpretations, both between various public authorities and between public authorities and businesses. Tax settlements and other regulated areas of activity (e.g. customs or foreign exchange control) are subject to inspection by administrative bodies, which are authorised to impose penalties and fines, and any additional tax liabilities arising from such inspections must be paid with interest. Consequently, the tax risk in Poland is higher than in countries with more mature tax systems. The amounts presented and disclosed in these financial statements may therefore change in the future as a result of a final decision by a tax inspection authority. In the first half of 2021, the Kraków Province Customs and Tax Office initiated a customs and tax inspection at the Company to check its compliance with tax laws in respect of taxation of income earned in 2017 in accordance with the Corporate Income Tax Act of February 15th 1992. In May 2022, the Head of the National Tax Administration took over the whole of the customs and tax inspection and instigated tax proceedings with respect to the Company to determine the amount of its corporate income tax liability for 2017. On February 10th 2023, the Head of the National Tax Administration issued a decision to stay the tax proceedings pending an advisory opinion which the Head of the National Tax Administration had requested from the Council for the Prevention of Tax Evasion Practices. The decision does not specify the date by which the proceedings are to be resumed. Additionally, in May 2022, the Kraków Province Customs and Tax Office initiated a customs and tax inspection at the Company to check its compliance with tax laws in respect of taxation of income earned in 2018 in accordance with the Corporate Income Tax Act of February 15th 1992. The inspection is expected to be closed on April 28th 2023. 4.4. Basis of accountingThese consolidated financial statements have been prepared on the historical cost basis, except with respect to investment property and derivative financial instruments, which are measured at fair value. These financial statements have been prepared on the assumption that the Group will continue as a going concern in the foreseeable future. In assessing the Group's ability to continue as a going concern, the Management Board considered the risks and uncertainties associated with the Group's business, particularly in the macroeconomic context, which is significantly influenced by the COVID-19 pandemic, the war in Ukraine, and climate change. Based on its analysis of multiple pandemic development scenarios, the Management Board has not identified any COVID-19-related liquidity, financing or business continuity risks to the Group continuing as a going concern in the foreseeable future (for details, see Note 54). The Management Board believes that the ongoing war in Ukraine does not pose such risks to the Group either (for details, see Note 55). For information on the impact of climate change on the Group's operations, see Note 56. Material accounting policies are presented in the individual notes to these financial statements. The Group applied the accounting policies consistently to all reporting periods presented. 4.5. Statement of complianceThese consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRSs) as endorsed by the European Union (EU IFRSs). As at the date of authorisation of these financial statements for issue, taking into account the ongoing process of adopting IFRSs in the EU, there were no material differences between the IFRSs applied in these financial statements and the EU IFRSs. The EU IFRSs comprise standards and interpretations approved by the International Accounting Standards Board ("IASB"). 4.6. Functional and reporting currencyThe Group's consolidated financial statements are presented in the Polish złoty (PLN), which is the Parent's functional currency. For each subsidiary, the functional currency is determined separately, and assets and liabilities of the subsidiary are measured in that functional currency. For the purposes of preparing consolidated financial statements, the financial statements of foreign operations which use a functional currency other than PLN are translated into the presentation currency as follows: scrollen
Unless stated otherwise, all amounts are given in PLN million. 5. Basis of consolidationThese consolidated financial statements include the separate financial statements of the Parent and the financial statements of its subsidiaries. The consolidated financial statements of the Grenevia Group have been prepared using the full method of consolidation, which consists in aggregating like items of assets, liabilities, equity, income and expenses of the consolidated related parties and eliminating any transactions, balances, income and expenses resulting from dealings between the consolidated related parties. The following steps are taken so that the consolidated financial statements present financial information about the Group as a single economic entity: scrollen
A non-controlling interest in net assets includes: scrollen
6. Material accounting policies6.1. Application of new and revised standardsThe accounting policies applied in the preparation of these consolidated financial statements are consistent with the policies applied in the preparation of the Group's consolidated financial statements for the year ended December 31st 2021, except for the application of new or revised standards and interpretations effective for annual periods beginning on or after January 1st 2022. On January 1st 2022, the following amendments to standards came into force: scrollen
The amendments listed above had no material effect on these financial statements. 7. New standards and interpretations which have been issued but are not yet effectiveThe following standards and interpretations have been issued by the International Accounting Standards Board, but are not yet effective: scrollen
Effective dates are the dates given by the International Accounting Standards Board in the standards. The effective dates of the standards in the European Union may differ from those specified in the text of the standards and are announced on endorsement of a standard by the European Union. In these consolidated financial statements, the Group did not elect to early apply the standards or interpretations issued prior to their effective date and does not apply the standards published by the International Accounting Standards Board or the International Financial Reporting Interpretations Committee and not endorsed by the European Union. At the date of authorisation of these consolidated financial statements for issue, the Management Board had not completed its assessment of the effect of other standards and interpretations on the accounting policies applied by the Group with respect to its operations or financial results. However, the Management Board believes that the aforementioned amendments will have no material effect on the Group's financial statements. 8. Organisational structure of the Grenevia Group as at December 31st 2022scrollen
* The composition of the Famur Solar Group is presented below. 1) Loss of control recognised as at June 30th 2022. Consolidation until June 30th 2022. 2) Not consolidated due to immateriality. 3) Consolidated since acquisition of control in mid-November 2022. 4) Not consolidated due to the lack of effective control of the entity or significant influence on its operations. scrollen
1) Not consolidated due to the lack of significant influence on the entity's operations. scrollen
*Entities in which Projekt-Solartechnik Development Sp. z o.o. holds interests are listed below. 1) Although Grenevia's indirect shareholdings in these entities are below 51 %, they are considered its subsidiaries as they are controlled by the Parent's subsidiaries. 2) Not consolidated due to immateriality. scrollen
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1) Although Grenevia's indirect shareholdings in these entities are below 51 %, they are considered its subsidiaries as they are controlled by the Parent's subsidiaries. Presented below are changes in the Grenevia Group's structure that took place in 2022: scrollen
On April 29th 2022, Grenevia S.A. entered into an agreement to sell 100 % of shares in Kopex-Min A.D. of Nis, Serbia. Ownership of the shares transferred to the buyer on May 19th 2022, upon entry in the Serbian business register; scrollen
9. Business combinations9.1. Selected accounting policiesThe Group accounts for business combinations using the acquisition method. For this purpose, it identifies the acquirer, determines the acquisition date, measures and recognises identifiable assets acquired, liabilities assumed and any non-controlling interest in the acquiree, and recognises goodwill or gain on bargain purchase. For information on selected accounting policies relating to goodwill, see Note 22.1. 9.2. Merger with ImpactIn November 2022, an agreement was executed whereby Grenevia acquired a total of 18,475,729 shares in Impact Clean Power Technology S.A. ("Impact"). The acquired shares represent 51 % of Impact's share capital and carry 59 % of total voting rights at its general meeting. Impact Clean Power Technology S.A. of Warsaw is a leading manufacturer of innovative battery systems dedicated primarily for buses, various robotics applications, and stationary energy storage. As at December 31st 2022, the company had a 235-strong workforce. Impact Clean Power Technology manufactures and integrates advanced systems for energy storage in lithium-ion cells as well as planning to develop hydrogen fuel cell systems. It is also a supplier of utility-scale energy storage solutions for the renewable energy sector and industrial power supply systems. Impact's business model leverages the economies of scale which are generated by the manufacture of tailor-made products and their provision to wider customer groups. To accommodate the fast market growth and broaden its customer base, the company aims to significantly increase its annual production capacity by constructing GigafactoryX. This large-scale manufacturing plant will be dedicated to meeting the requirements of buyers of battery systems for electric public transport vehicles, primarily e-buses, industrial e-vehicles, and utility-scale energy storage facilities. The project is expected to raise Impact's annual production capacity to more than 1 GWh in 2024, and to a minimum of 2 GWh or even to more than 4 GWh in 2027, in line with demand growth. Investments in new production capacities are also intended to allow the company to branch out into related markets such as electric trucks, heavy industrial vehicles, and hydrogen-powered railway locomotives. Other growth initiatives pursued by Impact include the New Life for Batteries project (repurposing of used EV batteries in stationary energy storage systems, whose charging cycles are longer) and development of hydrogen technologies for battery systems. In connection with the execution of the agreement to acquire Impact shares, Grenevia acceded to an investment agreement and shareholders' agreement which mainly define the typical terms of cooperation, mutual rights and obligations and relations between Impact shareholders, as well as outlining a vision for the future of Impact's business. The Investment Agreement also provides for a scheme for the acquisition of additional Impact shares (the "Scheme"). Under the Scheme, the grant of rights to subscribe for additional shares at par value will depend on the achievement by Impact of certain targets as defined for the Scheme, with the proviso that the total number of new shares may not exceed 10 % of the company's existing share capital. The implementation of the Scheme will not dilute Grenevia's equity interest in Impact, as Grenevia will be entitled to subscribe for additional shares at par value so as to maintain its ownership proportion. The Scheme is spread over the period 2023-2027. With the acquisition of 51 % of Impact shares, the Group acquired control of the company. The Group determined that the acquisition date was the date of Grenevia's entry in the register of Impact shareholders, i.e. November 17th 2022. In accordance with IFRS 3 Business Combinations, the Group accounted for the acquisition as a result of which it recognised the following assets and liabilities at fair value: scrollen
The acquisition was accounted for as presented in the table below. scrollen
The goodwill recognised on the acquisition of Impact reflects the company's potential for growth, stemming from its expertise and solid competitive position in the transportation and industrial battery system market, as well as the capital projects in the pipeline which are expected to enable Impact to swiftly scale up its activities in the burgeoning industrial e-mobility and energy storage markets. Additionally, the goodwill includes intangible assets that are not eligible for individual recognition, such as proprietary know-how, anticipated economic gains from employing a team of skilled professionals, market share, and customer relations. 10. Discontinued operations10.1. Selected accounting policiesA discontinued operation is a component of an entity that has been disposed of or is classified as held for sale or is no longer controlled by the entity, and: scrollen
10.2. Operations discontinued by the GroupAs at June 30th 2022, loss of control of the Russian subsidiary OOO Famur was recognised, resulting in the reclassification of its revenue, expenses and loss of PLN 6m for the first half of 2022 to discontinued operations. The loss on the loss of control of the subsidiary was PLN 58m. For details, see Note 53. In 2022, the following losses were charged against net profit (loss) from discontinued operations: PLN -5m - loss on the loss of control of Kopex-Min A.D. of Niš (Serbia) following sale of 100 % of its shares. The Group had discontinued its operations in Serbia in previous years. Kopex-Min's net assets amounted to PLN 0. The transaction price was immaterial. The loss on the loss of control was attributable to exchange differences on translation of the foreign operation. PLN -3m - loss on disposal of shares in the associate Famak S.A., which was previously reclassified to discontinued operations. Statement of profit or loss from discontinued operationsscrollen
Statement of cash flows from discontinued operationsscrollen
11. Operating segments11.1. Selected accounting policiesThe Group reports the operating segments in accordance with IFRS 8 Operating Segments. The operating segments identified by the Group represent its strategic growth directions. The performance of each segment is reviewed on a regular basis by the Group's highest decision making body. 11.2. Operating segments of the Grenevia GroupThe Grenevia Group (formerly FAMUR) is a corporate group that integrates and develops business operations in four segments: utility-scale solar projects and PV solutions for businesses based (the PV segment led by Projekt Solartechnik); battery systems for e-mobility and energy storage (the E-Mobility segment led by IMPACT Clean Power Technology); state-of-the-art industrial automation equipment and solutions for the power distribution sector (the Power engineering segment led by Elgór+ Hansen); and machinery and equipment for the mining and wind power sectors (the Famur segment). The new business model is the effect of consistent implementation of the Group's strategy as announced in May 2021, which aims to transform the Group from a leading producer of mining machinery into a major investor in green transition. The Group creates long-term value in line with the vision of responsible and active support for the development of a sustainable low-carbon economy. Its mission is to consciously alter its business model by investing in promising green transition projects to build their value to the benefit of the world as a whole. Famur segmentThe Famur segment, which provides solutions for mining and wind power generation, operates under the FAMUR brand. Its key product lines comprise longwall systems, roadheaders and belt conveyors for longwall mining applications. The segment's offering includes also design and delivery of IT systems for back-to-back management of coal mining processes (from the face to the surface). The FAMUR brand owes its global recognition to a successful strategy of gradually increasing its presence on international markets. FAMUR companies and service centres based in Kazakhstan, China and Germany guarantee ongoing customer service and fast response in line with customer expectations. The segment is constantly raising the bar on service quality and extending its outreach to new locations where reliable mining and industrial systems are needed. Dalbis, a member of the Primetech Group and part of the Famur segment, also provides specialist borehole drilling services for various applications and offers drilling technology implementation services for engineering and geotechnical projects. Since 2022, measures have been taken to leverage the segment's existing manufacturing facilities for the provision of wind turbine transmission maintenance services. Power engineering segmentThe Power engineering segment is led by Elgór + Hansen S.A. ("EH"), which can boast more than 25 years of experience in developing industrial solutions. The segment encompasses engineering, manufacturing, delivery, and maintenance of electricity transmission and distribution equipment, catering to a diverse range of industries, such as mining, including in potentially explosive atmospheres, steelmaking, and food processing and production. In 2022, EH decided to capitalise on the anticipated growth in green energy investments by utilising its production capacity to launch manufacture of containerised substations, including lines dedicated to utility-scale renewable energy projects. Drawing on its extensive experience and development and manufacturing resources, EH also offers products and services related to IT/OT systems, SCADA, control and instrumentation systems, electronics, power electronics, and automation for industrial and power facilities. EH's offerings comprise both proprietary solutions and those from leading global providers, ensuring comprehensive customer support at every stage of any project - from design and engineering to construction, documentation, and operation - both in Poland and in other markets. PV segmentThe PV segment is comprised of Projekt Solartechnik (PST) Group entities, which offer development and turnkey delivery of utility-scale solar PV projects on an EPC basis, i.e. from development, design and engineering of a project to procurement of necessary components, to construction and maintenance of all project facilities. The PST Group has a professional project development team, design and engineering studio, and other own project construction and execution resources, dedicated to PV projects. Apart from developing own projects and securing properties for potential future development, it also acquires projects at various stages of completion, offering competitive prices. The Group offers its customers proprietary solutions, including assembly systems, constructs own solar power systems, and sells PV components. The segment's portfolio of solar farms, comprising both completed projects and those under construction, is managed through the investment fund Projekt Solartechnik Fund FUNDUSZ INWESTYCYJNY ZAMKNIĘTY (the "Fund"). The Group actively supports and participates in the development of renewable energy sources, as demonstrated by the growing base of assets attributable to PV and solar farm capex. E-mobility segmentThe Group entered the e-mobility sector in 2022 by acquiring an ownership interest in Impact Clean Power Technology S.A. of Warsaw ("Impact" or "ICPT"), a leading manufacturer of innovative, tailor-made battery systems, mainly for buses, rail transport, specialised transport, and stationary energy storage. The experience and well-established competitive position of IMPACT in the market of battery systems for transport and industrial applications, supported by Grenevia's financial and operational resources, will enable rapid scaleup of Impact's business, building the long-term value of Impact and the Grenevia Group on the promising market of industrial electric mobility and energy storage solutions. Impact is a Tier-1 supplier of original equipment (OEM) to leading electric bus makers. As such, it is a major supplier of battery systems for e-buses on the European market. Impact products are also exported to North America, Asia and Australia, among others. As at December 31st 2022, its headcount of employees was 235, including 79 engineers. The company runs its own research & development centre for energy storage technologies and battery systems dedicated to public and heavy transport. Impact's current manufacturing capacity is about 0.6 GWh per year. For details on the merger, see Note 9. Other ActivitiesThe Other Activities segment encompasses activities not classified elsewhere, in particular holding company activities aimed at supporting the operating segments, primarily in the finance area. The Company's operations are not subject to seasonality. The table below presents the segments' results for 2022: scrollen
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The table below presents the main items of the statement of financial position by segment. scrollen
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* including projects and expenditure on construction of solar farms 11.3. Revenue by geographyAs the Group operates in a number of geographical areas, its management has considered it necessary to supplement the presented revenue data with data on individual geographical areas. scrollen
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11.4. Major customersIn 2022, revenue from sales to three customers exceeded individually 10 % of the Group's revenue. The customers are not associated with the Group. Revenue from these customers was as follows: scrollen
In 2021, revenue from sales to three customers exceeded individually 10 % of the Company's revenue. The customers are not associated with the Company. Revenue from these customers was as follows: scrollen
12. Revenue from contracts with customers12.1. Selected accounting policiesIn accordance with IFRS 15, revenue is recognised in an amount that reflects the consideration to which the entity expects to be entitled in exchange for promised goods or services to customers. In 2022, the Group's business consisted primarily in manufacturing and selling machinery. • Sales of goods If a contract provides for only one performance obligation, i.e., the obligation to sell goods, the revenue is recognised at a specific point in time, i.e., when the customer obtains control of the goods (as a rule, upon delivery). scrollen
Some contracts with customers contain elements of variable consideration arising as a result of discounts, rebates or penalties. In accordance with IFRS 15, where a contract contains elements of variable consideration, the entity estimates the amount of variable consideration to which it will be entitled in exchange for transferring promised goods or services to a customer and includes in the transaction price the variable consideration in whole or in part only to the extent that it is highly probable that its inclusion will not result in a reversal of a significant part of previously recognised accumulated revenue when the uncertainty relating to variable consideration has been resolved. scrollen
The Group provides warranties for the goods it sells. Typically, warranties are issued to assure the customer that the product complies with the specification defined by the parties and are not an additional service. Consequently, most of the existing warranties are recognised in accordance with IAS 37 Provisions, Contingent Liabilities and Contingent Assets. Nevertheless, some non-standard contracts with customers contain extended guarantees. Under IFRS 15, an extended warranty is a separate service and is recognised as a performance obligation to which part of the transaction price is assigned. • Sale of bundles of goods or services delivered or rendered in different periods In accordance with IFRS 15, the transaction price is allocated to each performance obligation by reference to their relative standalone selling prices. Certain contracts concluded by the Group with customers are structured taking into account that the services or goods to be provided under the contract are tailored to the customer's particular needs and that the contract is irrevocable. Consequently, the Group passes control and thus satisfies the performance obligation over time. Therefore, in accordance with IFRS 15, the Group recognises revenue from the sale of services over time measuring progress towards complete satisfaction of the performance obligation using the stage of completion method. The stage of contract completion is determined based on contract costs incurred by the reporting date as proportion of estimated total contract costs. The Group recognises revenue in correspondence with trade receivables. In accordance with IFRS 15, where a customer has paid an amount of consideration prior to the entity performing by transferring the related good or service to the customer, the entity presents the contract as a contract asset, excluding any amounts presented as receivables. • Advance payments from customers Advance payments received from customers are presented by the Group under short-term trade and other payables. In accordance with IFRS 15, the Group assesses whether a contract includes a significant financing component. The Group elected to use a practical expedient, namely it does not adjust the promised amount of consideration for the effect of a significant financing component if it expects at the time of contract execution that the interval between transfer of the promised goods or services and payment by the customer will be less than 12 months. Therefore, with respect to short-term advance payments, the Group does not recognise a significant financing component. In the case of contracts with customers for which the interval between transfer of the promised goods or services and payment by the customer is expected to be more than 12 months, the Group assumes that the contracts include a significant financing component. In the period covered by these financial statements, no such events occurred at the Group. • Sale of solar farms through sale of SPVs The Group's PV segment operates on the basis of two models: Model A - The main objective of this business model is to derive economic benefits from the acquisition and establishment of PV SPVs and their subsequent sale or resale following the construction of a complete solar farm. The period from the completion and commissioning of a farm to its sale does not exceed 12 months. In this model, the Group recognises acquired assets that do not meet the definition of a business under IFRS 3 as inventory (work in progress). Model B - The main objective of this model is to derive economic benefits from the sale of electricity produced by solar farms constructed by the Group. Any solar farm with an intended lifetime within the Group exceeding 12 months from commissioning is included in Model B. In this model, the Group recognises acquired assets that do not meet the definition of a business under IFRS 3 as items of property, plant and equipment (or property, plant and equipment under construction during project development and construction). Notwithstanding the objectives outlined in Model A and Model B, the PV segment also provides various PV system construction, installation and maintenance services to external customers. Any solar farm constructed by the Group whose intended lifetime within the Group exceeds 12 months from commissioning is classified to Model B. Any solar farm which is initially accounted for in accordance with Model A is reclassified to Model B if its intended lifetime within the Group changes to more than 12 months. The Group does not, however, reclassify solar farms initially recognised in accordance with Model B to Model A. The Group treats Model-A solar farms as products and, accordingly, recognises proceeds from their sale (i.e. sale of shares in SPVs owning the farms) under revenue. The amount of assets sold is recognised as cost of sales. In order to optimise delivery of utility-scale solar projects, market players have developed a model whereby special purpose vehicles (SPVs) are formed to develop and construct such projects. The sale/purchase of solar farm projects at various stages of completion is mostly effected through the sale/purchase of such SPVs rather than projects themselves. The key reasons are: scrollen
Under Model A, the Grenevia Group's business objective is to generate revenue from sale of products in the form of: scrollen
Both projects which are underway and completed farms are disposed of mainly through the sale of the SPVs which acquired, developed and/or constructed them, as appropriate, as the latter hold required licences and permits for the development, construction and/or operation of the farms and/or have won renewable energy auctions for them. In accordance with the substance-over-form principle, the Group accounts for sale of Model-A solar farms as follows: scrollen
Accordingly, the Group does not recognise a gain/loss on loss of control of an SPV in accordance with IFRS 10 but instead accounts for its sale as for the sale of an asset (i.e. a product in the form of a PV project underway or a completed solar farm) in accordance with IFRS 15. Presentation of such transactions in accordance with IFRS 15 is consistent with the Group's overriding business objective in Model A as well as giving a fair view of the Group's financial situation, financial performance, and cash flows. The application of IFRS 10 would be misleading and would fail to meet its objective as set out in the Conceptual Framework for Financial Reporting, i.e. it would not be useful. If the Group achieved the business objective of Model A, i.e. generation of revenue from the sale of developed and constructed solar farms, not through the purchase and sale of SPVs owning such projects but through the purchase and sale of PV projects underway and completed farms directly by the Company or its subsidiaries, revenue and expenses would still be presented in accordance with IFRS 15, which would be consistent with the business objective. The legal form of purchasing/selling PV projects and solar farms at different stages of completion through purchase/sale of SPVs should not take precedence over the substance of such transactions and the Group's business objective, which is the sale of a finished product in the form of a PV project/solar farm. The Group treats Model-B solar farms as non-current assets. Accordingly, gain or loss on disposal of an SPV classified to Model B is recognised under 'Gain/(loss) on disposal or partial disposal of shares in subordinates'. In 2022, the Group sold one SPV owning solar farm projects. Revenue from the transaction and gain/(loss) on the disposal were immaterial. 12.2. Revenue from contracts with customersThe Group presents recognised revenue from contracts with customers by categories reflecting the manner in which economic factors affect the nature, amount, payment date and uncertainty of revenue and cash flows. The Group also discloses information that will enable users of its financial statements to understand the relationship between the disclosure of revenue broken down into categories and the revenue information that the Group discloses for each reportable segment. The table below presents the distribution of revenue by the accounting standards applied by the Group. scrollen
Contracts with customers differ with respect to payment terms and delivery periods. As a rule, the delivery period is up to 12 months. The table below presents revenue from contracts with customers by categories reflecting the manner in which economic factors affect the nature, amount, payment date and uncertainty of revenue and cash flows. scrollen
Contract assets and liabilitiesscrollen
Amounts due under contracts include amounts due for the work performed as at the reporting date, calculated using the percentage of completion method. Under outstanding contracts with customers, as at December 31st 2022 the Group had performance obligations to deliver machinery and equipment for a total amount of PLN 58m (December 31st 2021: PLN 351m). These deliveries will be made in the first half of 2023. The contracts do not contain a significant financing component. The consideration agreed with the customers is not variable. The amount of revenue recognised in the reporting period that was included in the opening balance of performance obligations was PLN 66m. Revenue recognised in 2022 and included in the balance of contract liabilities at the beginning of the period amounted to PLN 121m. 12.3. Revenue from sale of electricityThe Group maintains a diverse portfolio of solar farms at various stages of completion, which participate or have secured eligibility for participation in the Polish government's auction-based support scheme for electricity generation from renewable energy sources. Scheme participants are entitled to settle the difference between the market price they sell electricity at and the fixed price determined as a result of a given auction (the auction price), which is adjusted for inflation on an annual basis. The maximum amount of electricity eligible for such settlement is equal to the volume declared by a prospective participant on submitting a bid at an auction prior to joining the scheme. At the same time, participants must deliver at least 85 % of the declared volume of electricity under the scheme. Failure to satisfy this requirement may result in a fine of 50 % of the auction price per MWh of unsupplied electricity. Price difference settlements are reviewed and the fulfilment of the electricity feed-in obligation is assessed over the same three-year periods. In accordance with the terms of the scheme, auction winners are allowed to withdraw from the scheme prior to their first sale of electricity thereunder. Out of the Group's solar farms which have been granted support under the scheme, 56 projects with a total nominal capacity of approximately 53 MW have already effected their first sale and as such cannot withdraw from the scheme until its scheduled expiry in 2037. The total volume of electricity declared by those power stations for delivery under the scheme (i.e. over the course of 15 years) is 807,464 MWh. The volume they have declared for delivery over the first three-year settlement/evaluation period is 81,120 MWh. The average auction price they have been awarded is PLN 319/MWh (unadjusted). In 2023, adjusted for inflation, this price is PLN 399/MWh. A further 85 projects with a total nominal capacity of approximately 82 MW are covered by a financing agreement under which the borrowers are required to join the auction-based aid scheme in the fourth quarter of 2023. The total volume of electricity declared by those power stations for delivery under the scheme (i.e. over the course of 15 years) is 1,304,055 MWh. The volume they have declared for delivery over the first three-year settlement/evaluation period is 262,254 MWh. The average auction price they have been awarded is PLN 259/MWh (unadjusted). In 2023, adjusted for inflation, this price is PLN 322/MWh. In 2022, total revenue from sale of electricity was PLN 16m. 13. Lease incomeLease income is generated under lease contracts executed with mining sector companies, relating mainly to shearer loader and roadheader leases. Lease contracts provide for daily lease rates which are not index-linked and contain no variable components. The contracts are concluded for a definite period. The lessor (the Group) retains ownership of the leased items, and the lessee is required to return the machinery and equipment to the lessor once the lease term expires. The leased items are insured against damage. For information on the value of leased shearer loaders and roadheaders, see Note 24. The following table presents the maturity dates of the undiscounted lease payments: scrollen
14. Costs by nature of expensescrollen
15. Workforce and employment costsThe table below presents the average number of employee at the Group. scrollen
The table below presents the cost of salaries and wages at the Group (the data includes the Management Board): scrollen
16. Other incomescrollen
* Gain on disposal of non-financial non-current assets was generated on sale of real property as part of continued divestment of the Group's non-core assets. ** Compensation and damages mainly include amounts charged to customers for damage to and deficiencies in mining equipment returned from leases. 17. Other expensesscrollen
* Including a PLN 7m provision for penalties under one contract, PLN 3m provision for litigation risks, and PLN 1m provision for employee benefits. 18. Finance incomescrollen
* interest relates mainly to interest on bank deposits. ** The finance income from measurement of derivative financial instruments represents measurement of an interest rate swap (IRS) and measurement and settlement of currency forwards which are not subject to hedge accounting. 19. Finance costsscrollen
* including interest on notes of PLN 43m and interest on borrowings of PLN 13m ** Revaluation of investments in 2022 represents an impairment loss recognised during the year on shares in Shandong Tagao Mining Equipment of China. 20. Income taxes20.1. Selected accounting policiesTax expense comprises current tax expense and deferred tax expense. Current and deferred tax is recognised in profit or loss, except to the extent that the tax arises from a transaction recognised in other comprehensive income or in equity. The current portion of income tax is calculated based on net profit (loss) (taxable income) for a given financial year. Current tax for the current and previous periods is recognised as a liability at the amount outstanding. Deferred tax is calculated as income tax to be paid or received in subsequent periods, using the liability method; it arises on temporary differences between the tax base and the carrying amounts of assets and liabilities. Deferred tax is calculated based on the tax rates and regulations effective at the time when deferred tax assets are realised and deferred tax liabilities are paid. Deferred tax assets are amounts expected to be deducted from income tax in future periods due to deductible temporary differences or carry forward of unused tax losses and unused tax credits. Deferred tax assets are recognised to the extent it is probable that taxable income will be available in the foreseeable future against which the assets can be utilised. Deferred tax liabilities are the amounts of income tax payable in future periods in connection with taxable temporary differences. Temporary differences are differences between the tax base and the carrying amount of an asset or liability. 20.2. Income tax disclosed in the statement of profit or lossscrollen
For information on tax inspections conducted at the Company and on tax proceedings it is party to, see Note 4.3. 20.3. Reconciliation of effective tax ratescrollen
20.4. Deferred tax assets and liabilitiesDeferred tax assetsscrollen
Deferred tax liabilitiesscrollen
As at December 31st 2022, the amount of deductible temporary differences for which no deferred tax asset was recognised was PLN 251m, of which: scrollen
21. Earnings per share21.1. Selected accounting policiesThe Group calculates basic earnings per share based on net profit or loss attributable to holders of ordinary shares in the Parent as well as based on net profit or loss from continuing operations attributable to them. Basic earnings per share are calculated by dividing net profit or loss attributable to the holders of ordinary shares of the Parent (numerator) by the weighted average number of ordinary Company shares outstanding during the period (denominator). For the purpose of calculating diluted earnings per share, net profit or loss attributable to holders of ordinary shares in the Parent and the weighted average number of Company shares outstanding are adjusted for the effects of all dilutive potential ordinary shares. Neither in 2022 nor in the comparative period Grenevia shares were diluted. 21.2. Earnings per sharescrollen
The weighted average number of ordinary shares is the number of ordinary shares outstanding at the beginning of a given period, adjusted by the number of ordinary shares cancelled during the period, multiplied by a time-weighting factor. On March 17th 2022, the District Court for Katowice-Wschód registered a reduction in the Company's share capital following cancellation of 82,539 ordinary shares. scrollen
22. Goodwill22.1. Selected accounting policiesGoodwill acquired through business combinations is equal to the consideration paid by the acquirer, which represents the future economic benefits arising from a business combination that are not individually identified and separately recognised. Goodwill is the excess of the acquisition cost over the fair value of net identifiable assets and liabilities of the acquiree as at the acquisition date. If acquisition cost is lower than net fair value of the acquired identifiable net assets, the difference is disclosed as gain in the statement of profit or loss for the period in which the acquisition took place, in accordance with IFRS 3. Goodwill acquired through business combinations is not amortised. Goodwill is reviewed at least once a year for impairment. Impairment of goodwill is recognised immediately in the statement of profit or loss and cannot be reversed in subsequent reporting periods. 22.2. Goodwill allocation to cash-generating unitsscrollen
* Goodwill resulting from the acquisition of a company (see Note 9) 22.3. Annual impairment testGoodwill of PLN 67m has been allocated to the Famur segment (solutions for mining and wind power generation). As at December 31st 2022, impairment was tested by comparing the carrying amount to the recoverable amount of the cash-generating unit to which goodwill was allocated (the Famur segment). The recoverable amount was determined based on the value in use calculated on the basis of a cash flow forecast based on five-year financial budgets approved by senior management. The discount rate was assumed at 14.73 % for the five-year period and 13.28 % for the residual value (8.22 % in 2021). The five-year forecast assumes safe revenue projections for the Famur segment. The assumptions were based on the current conditions in the Polish sector of producers of machinery for hard coal mining. Specifically, the updated cash-flow projection reflects the following external factors: scrollen
The forecast assumes the average year-on-year revenue decline of 9 % and the average annual operating margin of 20 %. It was assumed that the segment companies would continue as going concerns after the forecast period. The perpetuity formula was used to determine the residual value, with growth of sales assumed at 0 %. No indication of impairment of goodwill was identified; accordingly, no impairment loss on goodwill was recognised. Sensitivity analysis for likely changes in the discount rates, sales growth and operating profit did not indicate that the carrying amount of the Famur segment exceeded its recoverable amount. In the comparative period, i.e. as at December 31st 2021, as a result of an impairment test, an impairment loss of PLN 95m was recognised on the Famur segment's goodwill. 23. Other intangible assets23.1. Selected accounting policiesAn intangible asset is recognised only if it is probable that the future economic benefits attributable to the asset will flow to the organisation and its cost can be measured reliably. Initially, intangible assets are measured at cost. Intangible assets are amortised at amortisation rates reflecting the assets' useful lives. Intangible assets are amortised on a straight-line basis. The Group applies the following amortisation periods: scrollen
Assets with an initial value of up to PLN 10 thousand are not included in intangible assets and are not amortised. Their cost is recognised as expense in the month in which they are placed in service. All intangible assets have definite useful lives. 23.2. Movements in other intangible assetsscrollen
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24. Property, plant and equipment24.1. Selected accounting policiesProperty, plant and equipment are items that are held for use in the production or supply of goods or services or for rental to others, and are expected to be used for more than one year. For each new item of property, plant and equipment placed in use, the technical personnel is obliged to identify, where possible, any significant components and define the depreciation method. The Group does not increase the carrying amounts of property, plant and equipment to account for day-to-day maintenance costs of the assets. Such costs are recognised in profit or loss when incurred. The costs of day-to-day maintenance include the cost of labour and materials used and may also include the cost of small spare parts. The initial carrying amount of items of property, plant and equipment is increased by the amount of expenditure on their modernisation and upgrades where the expenditure is a separate component. Property, plant and equipment are measured at the reporting date at cost less accumulated depreciation and impairment losses. Property, plant and equipment are initially recognised at cost plus any costs directly attributable to the purchase, production and bringing the asset to the location and condition necessary for it to be capable of operating in the intended manner. Property, plant and equipment include perpetual usufruct of land. As there were no indications that the rights of perpetual usufruct of land may be revoked or may be impossible to renew, a decision was made to classify the rights as an item of non-depreciable property, plant and equipment, as is the case with land. Property, plant and equipment are depreciated on a straight-line basis using the following standard rates for each group: scrollen
Items of property, plant and equipment corresponding to different material components of solar farms (classified to Model B as described in Note 12.1) are depreciated at different rates as specified below: scrollen
When determining the value of a depreciable asset, the Group does not take into account its residual value. In the opinion of the technical personnel, the residual value of plant and equipment used in production is insignificant and therefore not material to the calculation of the depreciable value. Assets with an initial value of up to PLN 10 thousand are not included in property, plant and equipment and are not depreciated. Their cost is recognised as expense in the month in which they are placed in service. Property, plant and equipment under construction, to be used in production, for rental or for administrative purposes, are presented in the statement of financial position at cost less impairment losses, if any. The cost is increased by the amount of fees and borrowing costs. Leased assets are depreciated over their useful economic lives, if not restricted by lease term, like owned assets. Any gains or losses arising from the sale, retirement or withdrawal from use are calculated as the difference between proceeds from the sale and the carrying amount of the item of property, plant and equipment, and are recognised in profit or loss. When significant components of property, plant and equipment can be identified, each such component is depreciated separately. The useful life of an item of property, plant and equipment is determined by the Company's technical personnel based on their experience and available market information. Material items of property, plant and equipment (40 % as at December 31st 2022 and 34 % as at December 31st 2021) include shearer loaders and roadheaders used in the mining industry under lease contracts with customers which satisfy the definition of operating leases. Because shearer loaders and roadheaders are operated in extreme conditions, their useful lives and depreciation periods are assumed to be the same as their respective lease terms. Taking into account working conditions at the mines, the residual value of shearer loaders and roadheaders is difficult to determine. Shearer loaders and roadheaders returned to the Group after the lease term are subject to valuation performed by technical personnel, who use their knowledge of the particular machine, such as conditions in the mine where it operated, how it was operated, the lease term, and whether it can be leased again. Shearer loaders and roadheaders returned after the lease term which are still economically useful and have undergone repairs and maintenance for further lease, continue to be depreciated unless any of the following circumstances set forth in IAS 16.55 has occurred: scrollen
24.2. Property, plant and equipment by typescrollen
24.3. Movements in property, plant and equipmentscrollen
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The increase in property, plant and equipment was mainly attributable to expenditure on shearers leased to mines. As at December 31st 2022 and December 31st 2021, the Group had no commitments to acquire property, plant and equipment. scrollen
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25. Long-term receivablesscrollen
26. Investment property26.1. Selected accounting policiesThe Group applies the fair value model to measure investment property (Level 3 of the valuation hierarchy) due to the use of those assets − investment property is not used in the production, supply or administration activities, and is treated as a source of rental income and held for value appreciation. Fair value of investment property is estimated based on the property value determined by an independent expert appraiser. Investment property was measured using a comparative approach and the average price adjustment method. 26.2. Investment propertyscrollen
26.3. Movements in investment propertyscrollen
26.4. Income and expenses related to investment propertyscrollen
27. Investments in subsidiaries and associates27.1. Selected accounting policiesInvestments in non-consolidated subsidiaries and associates are recognised at cost less impairment losses. The Group recognises shares in non-current financial assets if they are purchased without the intention of resale in the near term. 27.2. Major investments in subsidiaries and associatesscrollen
* Subsidiaries which are not consolidated (whether due to immateriality or dormancy) are listed in Note 8. **As at December 31st 2021, shares in the associate Famak S.A. were carried at PLN 32m. In 2022, the Group reclassified Famak S.A. shares into non-current assets held for sale and to discontinued operations. In 2022, the Group sold its entire shareholding in the associate. A loss of PLN 3m was recognised on the transaction, which was allocated to discontinued operations (see Note 10). 28. Other non-current financial assets28.1. Selected accounting policiesOther non-current financial assets include shares in entities other than subsidiaries or associates, which are not intended for sale in the near term, measured at fair value through profit or loss. If no reliable valuation is possible, the assets are recognised at cost Other non-current financial assets also include the long-term portion of loans. Loans are initially recognised at fair value, and subsequently at amortised cost using the effective interest rate method, less allowance for expected credit losses, if any. Loans in foreign currencies are measured as at the reporting date at the mid rate quoted for a given currency by the National Bank of Poland for that date. Foreign exchange gains and losses arising on translation are posted to finance income or finance costs, as appropriate. 28.2. Non-current financial assetsscrollen
*In 2022, an impairment loss was recognised on shares in Shandong Tagao Mining Equipment Manufacturing Co. Ltd. of China in connection with it reporting negative equity and restrictions on the disposal of its shares. The impairment loss was recognised in finance costs (see Note 19). 29. Inventories29.1. Selected accounting policiesThe Group recognises inventories at the lower of cost and net realisable value. Costs of inventories comprise all costs of purchase, costs of conversion and other costs incurred to bring the inventories to their present location and condition. Costs of inventories include costs directly attributable to the unit of production and systematically allocated fixed and variable production overheads incurred to convert materials into finished goods. The allocation of fixed production overheads to the costs of conversion of inventories is based on normal capacity of production facilities, as established for production expected to be achieved on average over a number of periods under normal circumstances, taking into account the loss of capacity resulting from planned maintenance. Costs of materials and merchandise are assigned using the 'first in, first out' cost formula. Movements in inventories of finished goods and semi-finished products are accounted for using the specific identification method for their costs. The Group recognises inventory write-downs in the case of damage, complete or partial loss of usability, or decline in the selling prices of inventory items. As at the reporting date, slow-moving inventories are checked for impairment. Inventory write-downs are recognised and reversed in expenses for the period in which the write-down or reversal occurred. Inventories includes PV projects at various stages of development, completed solar farms and solar farms under construction which are classified to Model B (for details, see Note 12.1). 29.2. Value of inventoriesscrollen
The increase in inventories as at December 31st 2012 relative to December 31st 2021 was attributable to: scrollen
29.3. Inventory write-downsscrollen
30. Trade and other receivables30.1. Selected accounting policiesReceivables are initially recognised at fair value, and subsequently at amortised cost using the effective interest rate method, less impairment losses. In accordance with IFRS 9, the Group measures allowance for expected credit losses at an amount equal to the 12-month expected credit losses or lifetime expected credit losses. In the case of trade receivables, the Group opted for the simplified approach and measures expected credit loss allowances at an amount equal to lifetime expected credit losses. The Group analysed the credit risk using the simplified model. Impairment losses are charged to profit or loss. The difference between recognised and reversed impairment losses is recognised under gain/(loss) on allowance for expected credit losses. If an impairment loss is recognised in a financial year on receivables related to revenue from contracts with customers earned in the same financial year, the amount of revenue is reduced by the amount of the impairment loss. Financial receivables denominated in foreign currencies are measured as at the reporting date at the mid rate quoted for a given currency by the National Bank of Poland for that date. Foreign exchange gains and losses arising on translation are posted to finance income or finance costs, as appropriate. Short-term prepayments and accrued income include operating expenses incurred but relating to periods following the reporting period. These are mainly costs of insurance policies, subscriptions and IT services. 30.2. Short-term receivables and impairment lossesscrollen
30.3. Movements in impairment losses on short-term receivablesscrollen
*including a PLN 8m decrease in revenue 31. Other current financial assets31.1. Selected accounting policiesOther current financial assets include a current portion of loans, i.e., loans maturing within 12 months. Loans are initially recognised at fair value, and subsequently at amortised cost using the effective interest rate method, less allowance for expected credit losses, if any. Loans in foreign currencies are measured as at the reporting date at the mid rate quoted for a given currency by the National Bank of Poland for that date. Foreign exchange gains and losses arising on translation are posted to finance income or finance costs, as appropriate. Other current financial assets also include cash in the Group's escrow account, which secures payment of receivables by the Group's customers and which may be used by the Group subject to fulfilment of certain conditions stipulated in the contract with the customer. On the liabilities side, cash received is presented as security deposits under other current liabilities. Cash in the escrow account denominated in foreign currencies is measured as at the reporting date at the exchange rate effective as at the date of receipt. The Group applies the same measurement method to security deposits under current liabilities. 31.2. Other non-current financial assetsscrollen
31.3. Loansscrollen
32. Cash and cash equivalents32.1. Selected accounting policiesCash is disclosed at nominal amounts and comprises cash in hand, cash in bank accounts and bank deposits maturing in up to three months. Cash denominated in foreign currencies is measured as at reporting date at the mid rate quoted for a given currency by the National Bank of Poland for that date. Exchange differences are charged to finance income or finance costs, as appropriate. 33. Non-current assets held for sale and related liabilities33.1. Selected accounting policiesNon-current assets whose sale is highly probable, for which there is an active programme to find a buyer and the sale plan is expected to be completed within one year are classified as non-current assets held for sale, and their depreciation is discontinued. The Group measures a non-current asset held for sale at the lower of its carrying amount and fair value less costs to sell. 33.2. Assets held for sale and related liabilitiesscrollen
The decrease in the carrying amount of properties classified as held for sale was mainly attributable to disposals, with the gain on disposal recognised in other income (see Note 16). As at December 31st 2022, the assets of subsidiaries held for sale and related liabilities related to the following companies: scrollen
In 2022, the subsidiary Kopex-Min of Serbia was sold, whose assets and liabilities were as at December 31st 2021 presented as held for sale. 34. Shareholders of Grenevia S.A.Grenevia S.A. shareholding structure as at December 31st 2022 scrollen
* Aggregate value for accounts of OFE and DFE funds managed by NN PTE. ** Aggregate value for accounts of OFE and DFE funds managed by Allianz PTE. *** Held indirectly through the subsidiary FAMUR Finance Sp. z o.o. **** Total other shareholders holding less than 5 % of total voting rights. 35. Share capital35.1. Selected accounting policiesShare capital is recognised at par value of shares issued in accordance with the Articles of Association and registered with the National Court Register (KRS). The most important principle applicable to making any changes in the share capital provides that no activity resulting in the determination of or an increase or decrease in the share capital should be performed without first obtaining a copy of an entry in the court register to confirm the registration of changes and the current amount of the share capital. Share capital may be increased by amending the Articles of Association, issuing new shares, or increasing the par value of outstanding shares, or it can be reduced by amending the Articles of Association, reducing the par value of outstanding shares, carrying out a reverse share split, or cancelling part of outstanding shares. As at December 31st 2022 and December 31st 2021, the share capital was paid up in full. 35.2. Share capitalAs at Dec 31 2022scrollen
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36. Other components of equity36.1. Other components of equity attributable to owners of the parentscrollen
As at December 31st 2022 and December 31st 2021, share premium on Series B, C, D and E shares was PLN 547m. 36.2. Equity attributable to non-controlling interestsscrollen
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* Data for the Projekt-Solartechnik Group 37. Dividend37.1. Selected accounting policiesDividend payments are recognised in the consolidated statement of financial position under 'short-term trade and other payables' in the period in which they are approved by shareholders. 37.2. Dividends from Grenevia S.A.The Management Board of Grenevia will recommend that the entire net profit for 2022 be allocated to statutory reserve funds. The pursuit by the Grenevia Group of its new strategic directions as adopted in May 2021 will require that any profits be reinvested, in particular at the initial stages. The dividend, if any, will depend on profits earned in a given year, the investment attractiveness of new projects and growth prospects, as well as the financial and liquidity situation of the Grenevia Group. On June 22nd 2022, the Annual General Meeting of Grenevia S.A. passed a resolution to allocate the entire net profit for 2021 to statutory reserve funds. On June 22nd 2021, the Annual General Meeting of Grenevia S.A. passed a resolution to allocate the entire net profit for 2020 to statutory reserve funds. 38. Provisions38.1. Selected accounting policiesProvisions represent liabilities whose maturity date or amount are uncertain. The Group recognises provisions when all of the following conditions are met: scrollen
Provisions for employee benefit obligations are broken down by jubilee benefits, retirement severance payments, and other employee benefits, including mainly coal allowances and employee bonuses and awards. Employee benefit obligations are estimated by an independent actuary using actuarial methods. A provision is reversed when it is no longer probable that an outflow of resources embodying economic benefits will be required to settle the obligation. A provision is used when the obligation covered with the provision arises. Provisions for warranty repairs are recognised upon sale of products, at amounts equal to best estimates of expenses that the Company will have to incur during the warranty period. The Group also recognises provisions for other risks, including for risk of contractual penalties. 38.2. Provisionsscrollen
38.3. Provisions for employee benefitsActuarial assumptions scrollen
*10 % in the first period Movements in long-term provision for employee benefits: scrollen
Movements in short-term provision for employee benefits: scrollen
The table below presents a reconciliation of the balance of defined benefit obligations, i.e., provisions for old-age and disability retirement benefits and jubilee benefits. scrollen
Sensitivity analysis for changes in key assumptions: scrollen
38.4. Other provisionsMovements in other long-term provisions: scrollen
Movements in other short-term provisions: scrollen
39. Capital risk managementThe Group's capital management policy is to ensure that the Group entities continue as going concerns and to maximise return for the shareholders through optimisation of the capital structure. The Group's overall strategy remains unchanged. The purpose of capital risk management is to protect the Company's ability to continue its activities in the form and to the extent necessary to ensure return on investment for the shareholders and benefits for other stakeholders, as well as to maintain optimum capital structure to reduce cost of capital. To maintain or adjust its capital structure, the Group may adjust the amount of dividends paid to shareholders, issue new shares, increase debt, or sell assets to reduce debt. The Group monitors its capital using the debt ratio, calculated as net debt to total capital. Net debt is calculated as total liabilities (bank credit, non-bank borrowings, trade payables and other) less cash and cash equivalents. Total capital is calculated as the sum of equity as disclosed in the statement of financial position and net debt. The capital structure of the Group consists of debt comprising bank credit, non-bank borrowings and notes, as well as cash and cash equivalents and equity attributable to owners of the parent, including issued shares and retained earnings. As at the date of issue of the financial statements as well as at the reporting dates of December 31st 2022 and December 31st 2021, to the best of management's knowledge, the Group complied with covenants under the financing agreements. 40. Financial liabilities40.1. Financial liabilitiesscrollen
*Including PLN 335m under project finance arrangement for the construction of solar farms 40.2. Reconciliation of liabilities arising from financing activitiesscrollen
41. Borrowings41.1. Selected accounting policiesBank credit and non-bank borrowings are initially recognised at fair value, and subsequently at amortised cost using the effective interest rate method, except for current liabilities, which are measured at amounts payable. The short-term portion of a liability comprises the part of principal and interest which the entity assesses to be payable in the next 12 months. Overdraft facilities are classified as current liabilities irrespective of the final repayment date and the agreement term. 41.2. Bank and non-bank borrowingsscrollen
All undrawn credit facilities are secured. Bank credit facilities bear interest at variable rates based on a reference rate (e.g. Wibor, Euribor). The financing agreements provide for multi-currency facilities. Non-bank borrowings bear interest at variable rates based on a reference rate (e.g. Wibor, Euribor). The non-bank borrowings contracted are denominated in PLN and EUR. 41.3. NotesSeries B notesIn June 2019, the Parent issued Tranche B notes of PLN 200m under the notes programme. In each six-month settlement period, the notes bear interest at a floating rate based on 6M WIBOR plus margin. The notes registered with the depository were assigned ISIN code PLFAMUR00053. The issue date for Series B notes is June 27th 2019, and the redemption date is June 27th 2024. The Parent hedges its interest rate risk using an interest rate swap (IRS). For information on its measurement, see Note 48.2. Series C notesIn October 2021, the Parent issued Tranche C notes of PLN 400m under the notes programme. In each six-month settlement period, the notes bear interest at a floating rate based on 6M WIBOR plus margin. The notes registered with the depository were assigned ISIN code PLFAMUR00061. The issue date of Series C notes is November 3rd 2021. The maturity date of Series C notes November 3rd 2026. Series C Notes were issued as green bonds as defined in the June 2021 edition of the Green Bond Principles (as amended) published by the International Capital Market Association (ICMA). The Parent hedges its interest rate risk using an interest rate swap (IRS). For information on its measurement, see Note 48.2. 41.4. Financial ratios for Series B notesConsolidated data used to calculate financial ratios scrollen
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41.5. Security for borrowingsscrollen
The table above shows borrowings and other debt instruments which constitute the Group's financial liability as at the reporting date. 42. Factoring liabilitiesThe Group is party to agreements under which it sold its receivables to financial institutions. The institutions have recourse to the Group if a debtor fails to pay. In the Management's opinion, the Group retains substantially all the risks and rewards incidental to the receivables and therefore does not derecognise the receivables, and recognises factoring transactions as financing agreements; as a result, the Group recognises a financial liability for the consideration received from the factor. The Management believes that the risk of an event triggering the exercise the right of recourse is low, as is also evidenced by the history of repayment of the receivables sold. Factoring liabilities are initially recognised at fair value, and subsequently at amortised cost using the effective interest rate method, except for current liabilities, which are measured at amounts payable. 43. Lease liabilities43.1. Selected accounting policiesAt the lease commencement date, the Group measures lease liabilities at the present value of lease payments then outstanding. Lease payments include fixed payments (including in-substance fixed lease payments) less any lease incentives due, variable payments that depend on an index or rate, and amounts expected to be payable under residual value guarantees. Lease payments also include the exercise price of a purchase option if the Group is reasonably certain to exercise that option, and payment of financial penalties for terminating the lease if the lease terms grant a termination option to the Group. Variable lease payments that do not depend on an index or rate are recognised as an expense in the period in which the event or condition triggering the payment occurs. When calculating the present value of lease payments, the Group uses the lessee's incremental borrowing rate on the lease commencement date, if the interest rate implicit in the lease cannot be readily determined. After the commencement date, the amount of lease liabilities is increased to reflect the interest and reduced by lease payments made. Furthermore, the carrying amount of lease liabilities is remeasured if the lease term, in-substance fixed lease payments or judgement as to purchase of the underlying assets change. Short-term leases and leases of low-value assetsThe Group applies the short-term exemption to its short-term lease contracts (i.e., contracts with lease terms of 12 months or less from the inception date, containing no purchase options). The Group also applies the low-value exemption with respect to its leases of low-value assets. Lease payments under short-term leases and leases of low-value assets are recognised as an expense on a straight-line basis over the lease term. Significant judgements and estimates in determining the lease term of contracts with extension optionsThe Group determines the lease term as a non-cancellable period of a lease, together with periods covered by an option to extend the lease if the lessee is reasonably certain to exercise that option, and periods covered by an option to terminate the lease if the lessee is reasonably certain not to exercise that option. Right-of-use assetsThe Group recognises right-of-use assets at the lease commencement date (i.e., the date when the underlying asset is made available for use). scrollen
The Group holds lease contracts for machinery and vehicles, as well as perpetual usufruct of land. 43.2. Right-of-use assets and lease liabilitiesscrollen
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43.3. Amounts recognised in profit or loss under lease contractsscrollen
The costs related to leases of low-value assets and the costs of short-term leases incurred in 2022 and in the comparative period were immaterial. 44. Trade and other payables44.1. Selected accounting policiesTrade payables and other financial liabilities are initially recognised at fair value, and subsequently at amortised cost using the effective interest rate method, except for current financial liabilities, which are measured at amounts payable. Advance payments received are carried at historical cost. As non-monetary items, advance payments denominated in a foreign currency are translated at the exchange rate effective at the date of the transaction. Accrued expenses are expenses which have not been incurred yet but which are attributable to the given financial period in accordance with the matching principle. Deferred income includes in particular the equivalent of funds (such as grants and sureties) received from trading partners, to be settled in future periods. Grants are amounts received by the Company in 2010−2012 as EU co-financing under the Innovative Economy Operational Programme for a project to expand and modernise its existing business. The grants were received to finance depreciable/amortisable assets and are settled through adjustment to the reduction in the depreciation/amortisation costs of the non-current assets financed with the grants. 44.2. Trade and other payablesscrollen
45. Assets pledged as securityscrollen
The carrying amount of liabilities covered by security interests created in the Company's assets was PLN 391m as at December 31st 2022 and PLN 0 as at December 31st 2021. 46. Contingent liabilitiesscrollen
* The Group recognised a contingent liability related to the activities of an acquiree of Grenevia in prior years and the activities of the subsidiary Primetech S.A. This pertains to the adjustment of the amount of social security contributions paid in Spain from 1990 to 2011. As the Group was unable to reliably measure the liability, it did not recognise any provision therefor. The challenge in estimating the liability reliably arises from the need to make a number of assumptions, some of which are based on incomplete statistical data. For pending litigation in Spain over the adjustment of social security contributions paid, the Group has recognised a provision of PLN 5m. As at December 31st 2022, 39 court cases concerning the matter were resolved, including 27 in favour of the Group. 47. Financial instruments47.1. Selected accounting policiesThe Group identifies the following categories of financial instruments: scrollen
A financial asset is classified in the first category if both of the following conditions are met: scrollen
The Group's assets measured at amortised cost comprise: scrollen
The Group uses a practical expedient and does not identify significant financing components for trade receivables with maturities of less than 12 months. The Group's liabilities measured at amortised cost comprise: scrollen
The Group uses a practical expedient and does not identify significant financing components for trade payables with maturities of less than 12 months. When a financial asset does not meet the criteria for classification as measured at amortised cost (as is often the case with equity instruments in other entities), it is measured at fair value. Gains and losses on remeasurement of financial assets measured at fair value are recognised in profit or loss for the current period. The exception is where an asset is held within a business model whose objective is both to collect contractual cash flows and to sell assets. In these cases, gains or losses on remeasurement are recognised in other comprehensive income. Furthermore, if an investment in an equity instrument is not held for trading, management may make an irrevocable decision at the time of initial recognition to measure such a financial instrument at fair value through other comprehensive income. This election is made on an instrument-by-instrument basis. Any amounts recognised in other comprehensive income due to this measurement cannot be subsequently reclassified to profit or loss for the current period. As of December 31st 2022, the Group did not hold any instruments measured at fair value through other comprehensive income. In assets and liabilities measured at fair value through profit or loss, the Group classifies derivatives which are not subject to hedge accounting. For information on selected accounting policies applicable to financial instruments which are subject to hedge accounting, see Note 48.1. 47.2. Financial instruments by categoryscrollen
47.3. Fair value of financial instrumentsBelow is presented detailed information on the fair value of financial instruments whose fair values can be estimated: scrollen
Interest rate swaps (IRS) and currency forwards are initially recognised at fair value net of transaction costs and subsequently, as at each reporting date, are measured at fair value, with the effect of measurement recognised in profit or loss for instruments not designated as hedging instruments and in equity for hedging instruments. The Group applies hedge accounting. It is applied to forward contracts and swaps which are designated as hedges and are deemed effective in accordance with applicable policies. Hierarchy of financial instruments measured at fair value Financial instruments measured at fair value may be classified into the following measurement models: scrollen
The fair values of financial derivatives such as forwards and swaps are estimated for a financial asset using input data other than quoted prices, observable for the asset (level 2). There were no transfers between fair value measurement hierarchy levels in 2022 or 2021. 47.4. Financial instruments measured at fair value by classscrollen
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48. Derivative financial instruments and hedges48.1. Selected accounting policiesThe Group recognises derivative financial instruments initially at fair value adjusted for transaction costs and subsequently, at each reporting date, at fair value. Derivative financial instruments are recognised as assets or liabilities depending on whether their value is positive or negative. Gain or loss on remeasurement of derivative financial instruments to which hedge accounting is not applied is recognised in profit or loss under finance income or finance costs, as appropriate. The Group applies hedge accounting to: scrollen
An entity may apply hedge accounting when all the conditions under IFRS/IAS are met, i.e.: scrollen
Gains or losses on remeasurement of the fair value of a hedging instrument are recognised: scrollen
Where a forecast transaction which is hedged with a cash flow hedge affects profit or loss, the gains or losses associated with the hedge that were initially recognised directly in equity are reclassified in the same period or periods in which profit or loss is so affected to the same item of the statement of profit or loss in which the hedged item is recorded. If the execution of a forecast transaction involves the exercise of a hedging instrument, gain or loss on the hedge is recognised in the same item of the statement of profit or loss in which the hedged item is recognised. An entity is required to discontinue hedge accounting in any of the following circumstances: scrollen
Where a forecast transaction is no longer expected to be executed, all gains or losses accrued on the hedging instrument that have been recognised in other comprehensive income in the period when the hedge was effective are reclassified to profit or loss. 48.2. Derivative financial instrumentsscrollen
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The Group's hedging strategy based on forward instruments involves hedging currency risk associated with highly probable expected or contracted cash flows, as well as cash flows arising from cash positions in foreign currencies. The instruments are used to hedge a portion (established on a case-by-case basis for each planned or executed contract) of the expected cash inflows from foreign-currency sales, in such amounts and for such periods as follow from the contract signed or being negotiated by the Company. The hedged portion of cash flows is determined by deducting the expected foreign-currency cash outflows from the total expected cash inflows (portion covered by natural hedging). The IRS instrument is an interest rate swap that hedges the interest rate risk for Series B notes (PLN 200m) and Series C notes (PLN 400m) issued by the Company. The table below presents derivatives by designation as hedges or instruments measured at fair value through profit or loss. scrollen
49. Objectives and principles of financial risk managementFinancial risk management is designed to mitigate or eliminate the adverse effect on the Group's financial condition of risks inherent in its operations, including in particular: scrollen
The Group is primarily exposed to financial risk related to its trade receivables (currency risk, credit risk) and liabilities under borrowings (interest rate risk). The Group seeks to mitigate the impact of various risks through natural hedging mechanisms. 49.1. Credit riskThe Group's credit risk exposure is related to its principal business. IFRS 7 requires that entities analyse individual assets exposed to credit risk, i.e., trade receivables, lease receivables, loans, and cash. Credit risk results from outstanding contracts and is related to the risk of such credit events as a trading partner's insolvency, partial payment of receivables, and material delays in payment of receivables or loans. On the domestic market, the Group enters into transactions mainly with customers from the mining sector, and therefore receivables from that sector are the source of the largest risk concentration. Additionally, the creditworthiness of trading partners is checked, and security (in the form of letters of credit or bank guarantees) is used to minimise the risk of non-payment. In accordance with IFRS 9, the Group measures allowance for expected credit losses at an amount equal to the 12-month expected credit losses or lifetime expected credit losses. In the case of trade receivables, the Group opted for the simplified approach and measures expected credit loss allowances at an amount equal to lifetime expected credit losses. The Group measured credit risk using the simplified model. For information on the balance of impairment losses on receivables and its changes, see Note 30. No increase in credit risk was identified. In 2022, the Company reversed an allowance for expected credit losses of PLN 11m recognised in a separate line of the statement of profit or loss. 49.2. Liquidity riskThe Group is exposed to liquidity risk when cash flows related to payment of receivables are delayed. The Group protects itself against payment difficulties in relation its liabilities by managing the payment and collection periods, as well as the system of advance payments. At the same time, the credit facility limits available to the Group are sufficient to prevent any negative consequences of payment delays. 49.3. Maturity structure of financial liabilitiesscrollen
*Including PLN 335m under project finance arrangement for the construction of solar farms Credit facility agreement entered into for 15 years between 32 SPVs and a syndicate of ING Bank Śląski S.A., Bank Polska Kasa Opieki S.A., and BNP Paribas Bank Polska S.A. As the Group plans to sell the portfolio of PV projects owned by the 32 SPVs by selling the latter, the facility is presented as a current liability. scrollen
49.4. Sensitivity analysis for currency riskscrollen
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49.5. Sensitivity analysis for interest rate riskscrollen
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50. Related-party transactionsscrollen
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As at December 31st 2022, off-balance sheet liabilities under guarantees and sureties for associates were PLN 0 (December 31st 2021: PLN 15m). All related-party transactions were executed on an arm's length basis. 51. Remuneration of members of the Management Board and Supervisory BoardThe tables below present gross remuneration of members of the Parent's Management and Supervisory Boards. The remuneration had the characteristics of short-term benefits. Remuneration of Management Board members scrollen
Remuneration of Supervisory Board members scrollen
52. Auditor's feesOn July 11th 2022, Grenevia S.A. entered into a contract for the audit and review of financial statements with BDO spółka z ograniczoną odpowiedzialnością sp.k., with its registered office at ul. Postępu 12, Warsaw, registered by the District Court for the Capital City of Warsaw, 12th Commercial Division of the National Court Register, under No. KRS 0000729684, entered in the list of qualified auditors of financial statements maintained by the Polish Agency for Audit Oversight (PANA) under No. 3355. The total remuneration of the auditor for the provision of contracted services in 2022 was PLN 936,900, VAT exclusive, including: scrollen
53. Loss of control of subsidiariesAs at June 30th 2022, loss of control of the Russian subsidiary OOO Famur was recognised. As a result of the war in Ukraine, the package of economic sanctions imposed on Russia by the EU, including import and export restrictions, sanctions affecting shipments of goods by road, air and sea, and banking sanctions, as well as hostile actions on the part of the Russian government and Russian banks towards OOO Famur as a company with Polish owners, the Company became unable to use its power over that entity. The loss of control was recognised in particular because of the inability to use the Group's power over OOO FAMUR to influence the financial results of that subsidiary and thus the amount of returns for the entire Group, primarily as a consequence of the following events and circumstances: scrollen
Accordingly, the Group recognised a loss on the loss of control of OOO Famur: scrollen
* OOO FAMUR's net assets were translated at the mid rate of exchange quoted by the National Bank of Poland for June 30th 2022 (RUB 1 = PLN 0.0859). As at December 31st 2021, OOO FAMUR's net assets translated at the mid rate of exchange quoted by the National Bank of Poland for December 31st 2021 (RUB 1 = PLN 0.0542) amounted to PLN 46m. Additionally, in the six months ended June 30th 2022, a PLN 5m loss was recognised on the loss of control of Kopex-Min A.D. of Niš (Serbia) following sale of 100 % of its shares. The Group had discontinued its operations in Serbia in previous years. Kopex-Min's net assets amounted to PLN 0. The transaction price was immaterial. The loss on the loss of control was attributable to exchange differences on translation of the foreign operation. 54. Analysis of the impact of the COVID-19 pandemic on the Company's assets and liabilitiesIn 2022, Poland and other countries were still struggling with the impact of the COVID-19 pandemic on business activity and the persistently high risk of business interruption. Although the state of epidemic was called off in May 2022, the state of epidemic emergency continues. The Management Board is monitoring the threats posed by the SARS-CoV-2 virus and its variants on an ongoing basis and is taking appropriate steps to ensure that the employees are safe, operations are not disrupted, liabilities are met, financial liquidity is maintained, and the negative impact of the situation on the Group's profitability is mitigated. The Group reviews its budgets and forecasts on an ongoing basis to reflect the current economic conditions created by the COVID-19 epidemic. For information on goodwill impairment tests performed by the Group, see Note 22.3. It carried out an analysis of expected credit losses based on a review of the financial standing of its largest customers and the age structure of receivables. Following the analysis, it was concluded that the expected credit loss rate did not change materially relative to December 31st 2021. The Group did not experience any extraordinary problems with collecting its receivables. The Group monitors information on its main trade partners, as well as the overall market situation and collection of receivables, on an ongoing basis. In the event of any additional developments or indications of deterioration, the Group will update its estimates and calculate expected future credit losses. As at the date of these consolidated financial statements, the Group's financial condition was sound. The Group has not identified any liquidity problems or the risk of default under credit facility agreements or other financing agreements. The Group does not see any risk to the financing of its day-to-day operations or investment projects. For information on available financing and credit facilities, see Note 41.2. 55. Analysis of the impact of the military conflict in Ukraine on the Company's financial conditionThe Group has experienced the following consequences of the war in Ukraine since its outbreak, which however have not posed a risk to the Group's ability to continue as a going concern: scrollen
56. Impact of climate change on the Company's operations and financial conditionClimate change entails both physical risks associated with rising global temperatures and risks posed by the transition to a zero-carbon economy. The accelerating energy transition in Poland and worldwide is worsening the outlook of the mining machinery sector. Grenevia's strategic response to this trend is to continue to generate revenue from existing mining assets while focusing on exploring opportunities to leverage the Group's manufacturing facilities, resources and know-how to secure new revenue streams from other promising industries. In 2022, the Group ventured into the wind energy sector, drawing on its extensive expertise in engineering and manufacturing various industrial equipment. The Grenevia Group has been consistently pursuing its strategy to diversify its operations and position itself as a major investor in green transition. Furthermore, in January 2023, the Group announced its Sustainable Development Strategy for 2023-2030, which integrates the Group's strategy for transforming its business model with measures intended to benefit the environment, society, employees and shareholders. The Strategy directly supports achievement of the UN Sustainable Development Goals and reinforces the Group's commitment to addressing global challenges. For details on the delivery of the Group's strategy, see 'Strategy and development directions' in the Directors' Report on the Operations of the Grenevia Group and Grenevia S.A. in 2022. A byproduct of the transition away from the carbon-based economy is the reluctance of financial institutions to finance investment projects in mining-related sectors The Grenevia Group places the highest priority on ensuring financial stability and diversified financing sources. The Grenevia S.A. Management Board believes that the Group's financial resources are managed in a sound manner. As at December 31st 2022, the Group had access to undrawn lines of credit totalling PLN 523m. In October 2021, Series C notes issued by Grenevia were admitted to trading in the Catalyst alternative trading system operated by the Warsaw Stock Exchange. The notes were issued as green bonds as defined in the June 2021 edition of the Green Bond Principles (as amended) published by the International Capital Market Association (ICMA). In 2022, all the proceeds from the Series C notes were used to finance investments in the renewable energy sector, i.e. the purchase of shares in Impact Clean Power Technology S.A., and to partially refinance expenses incurred to (i) acquire shares in PST S.A. from Maciej Marcjanik and (ii) acquire shares in Famur Solar Sp. z o.o., which is a shareholder in Projekt Solartechnik S.A. Both the gradual closure of thermal coal mines in Poland by 2049, which entails discontinuation of capital investment plans by domestic customers, and financial institutions' insistence on reducing financing provided to the coal sector were taken into account in the preparation of the cash flow projection underlying the goodwill impairment test (for details on the goodwill impairment test, see Note 22). Climate change has a direct and indirect impact on the economy. It can lead to inflation, high volatility of currency exchange rates and interest rates, weather anomalies adversely affecting business continuity, and supply chain disruptions, among others. The Group monitors all risks and threats on an ongoing basis and takes measures to mitigate them. For details on individual risks and threats identified by the Group, their impact on its business segments, measures taken to mitigate those risks, see 'Description of key risks and threats' in the Directors' Report on the Operations of the Grenevia Group and Grenevia S.A. in 2022. 57. Events after the reporting datescrollen
Katowice, April 24th 2023 Signature of the person responsible preparation of the financial statements Alina Mazurczyk, Chief Accountant
Signatures of members of the Management Board of Grenevia S.A. Mirosław Bendzera Beata Zawiszowska Dawid Gruszczyk Tomasz Jakubowski Digitally signed Responsibility of the auditorOur objective was to express an opinion, on the basis of the reasonable assurance service we performed, whether the consolidated financial statements in the ESEF format have been marked up in accordance with the requirements of the ESEF Regulation. We have performed our engagement in accordance with National Standard on Assurance Engagements Other than Audits and Reviews 3001PL - "Audit of financial statements prepared in a single electronic reporting format" ("NSAE 3001PL") and, where appropriate, in accordance with National Standard on Assurance Engagements Other than Audits and Reviews 3000 (Z) as defined in International Standard on Assurance Engagements 3000 (Revised) - "Assurance Engagements Other than Audits or Reviews of Historical Financial Information" ("NSAE 3000 (Z)"). The Standard requires that we plan and perform our procedures so as to obtain reasonable assurance that the consolidated financial statements in the ESEF format have been prepared in accordance with the specified criteria. Reasonable assurance is a high level of assurance but is not a guarantee that a service performed in accordance with NSAE 3001PL and, where appropriate, NSAE 3000 (Z) will always detect a material misstatement. The procedures selected depend on the auditor's judgement, including assessment of the risk of a material misstatement, whether due to fraud or error. When assessing this risk, the auditor takes into account the internal controls related to the preparation of the consolidated financial statements in the ESEF format in order to plan appropriate procedures to provide the auditor with sufficient appropriate evidence. We have not assessed the functioning of the internal control system to issue an opinion on its effectiveness. Summary of the work performedThe procedures we planned and performed included: scrollen
We believe that the evidence we obtained is sufficient and appropriate to express our opinion on the compliance of the mark-up with the requirements of the ESEF Regulation. Ethical requirements, including independenceIn performing the engagement, the auditor and the audit firm complied with the independence requirements and other ethical requirements laid down in the IESBA Code. The IESBA Code is based on the fundamental principles of integrity, objectivity, professional competence and due care, confidentiality and professional conduct. We also complied with other independence and ethical requirements applicable to this assurance engagement in Poland. Quality control requirementsThe audit firm applies national quality control standards as defined in International Standard on Quality Control 1 - Quality Control for Firms that Perform Audits and Reviews of Financial Statements, and Other Assurance and Related Services Engagements, adopted by resolution of the National Council of Statutory Auditors ("NQCS"). In accordance with the requirements of the NSQC, the audit firm maintains a comprehensive quality control system including documented policies and procedures for compliance with ethical requirements, professional standards and the applicable laws and regulations. Opinion on compliance with requirements of ESEF RegulationThe auditor's opinion is based on the matters described above and therefore the opinion should be read taking into account those matters. In our opinion, the consolidated financial statements in the ESEF format have been marked up in all material respects in accordance with the requirements of the ESEF Regulation. Statement on provision of non-audit servicesTo the best of our knowledge and belief, the non-audit services we have provided to the Group are compliant with applicable laws and regulations in force in Poland, and we have not provided any non-audit services that are prohibited under Article 5(1) of the EU Regulation or Art. 136 of the Statutory Auditors Act The non-audit services we provided to the Parent and its subsidiaries in the audited period are specified in Note 52 to the consolidated financial statements. Appointment of the audit firmWe were appointed to audit the consolidated financial statements of the Group by resolution of the Parent's Supervisory Board of June 29th 2022. We audit the Group's consolidated financial statements as of the financial year ended December 31st 2020. The lead auditor responsible for the audit based on which this auditor's report has been prepared is Marcin Krupa. BDO spółka z ograniczoną odpowiedzialnością sp.k. of Warsaw entered in the list of audit firms under Reg. No. 3355 on behalf of which the lead auditor has audited the consolidated financial statements Signed with qualified electronic signature
Auditor Reg. No. 11142 Marcin Krupa
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