7.3 Other operating income and expenses
| SIGNIFICANT ACCOUNTING PRINCIPLES |
|---|
|
Other operating income and expenses Other operating income and expenses are recognised in the financial statements in accordance with the principles of prudence and matching |
| Year ended 31 December 2023 |
Year ended 31 December 2022 |
|
| NET OTHER OPERATING INCOME/(EXPENSES) | ||
| (Creation)/reversal of other provisions | (788) | 162 |
| Effect of revaluation of provisions for costs of land rehabilitation | (527) | 1,721 |
| Valuation and exercise of derivatives, including: | (383) | (22) |
| – CO2 | – | 33 |
| – Lignite | (383) | (55) |
| (Creation) of write-downs of receivables | (113) | (548) |
| Penalties, fines, damages | 69 | 599 |
| Damage settlement and failure elimination | (51) | (19) |
| Donations given | (43) | (75) |
| Asset surpluses, disclosures/Settlement of inventory shortages | (30) | 75 |
| Grants | 30 | 32 |
| PPE/IA and other infrastructure received free of charge | 30 | 21 |
| Gain/(Loss) on disposal of PPE/IA | 22 | 18 |
| Pozostałe | (46) | (12) |
| TOTAL NET OTHER OPERATING INCOME/(EXPENSES) | (1,830) | 1,952 |
The creation of other provisions relates, among other things, to provisions for onerous agreements with G customers of PGE Obrót S.A., as described in note 20.4 to these financial statements.
The issue of the valuation of the land provision is described in note 20.1 to these financial statements.
In the comparative period, the Group recognised a contractual penalty of PLN 562 million for the consortium of Mitsubishi Power Europe GmbH, TECNICAS REUNIDAS S.A. and BUDIMEX S.A for failing to meet the availability rate of the Turów Power Plant unit. The contractual penalty was subject to a write-down in the same amount.
During the course of 2023, the repair of major defects in the guarantee period, which had been reported by PGE GiEK S.A. to the general contractor, continued. On 15 June 2023, PGE GiEK S.A. again sent the contractor a request for payment of a contractual penalty (reminder) for failure to meet the guaranteed availability parameter of the unit in the first and second years of the warranty period. Due to the contractual limitation of the maximum value of the contractual penalties, the amount specified in the request for payment did not increase compared to the penalty demanded in 2022, despite the contractor’s failure to meet the guaranteed availability parameter of the unit also in the second year of the warranty period.
Furthermore, on 15 June 2023, PGE GiEK S.A. applied to the General Attorney’s Office of the Treasury of the Republic of Poland for mediation with the participation of a mediator of the Court of Arbitration at the General Attorney’s Office of the Republic of Poland, in order to attempt an amicable settlement of the disputes arising from the contract.
As at the date of these financial statements, the mediation was still underway.