a.a.a. AG Allgemeine Anlageverwaltung

Annual Report • Jan 9, 2025

Finanzbericht: 35265884

Hansen Sicherheitstechnik AG

Velbert

Befreiender Konzernabschluss zum Geschäftsjahr vom 01.01.2023 bis zum 31.12.2023

Grenevia S.A.

Katowice/​Polen

Konzernabschluss und Konzernlagebericht der Grenevia S.A. für das Geschäftsjahr 2023

Befreiender Konzernabschluss gem. § 291 HGB zum Geschäftsjahr vom 01.01.2023 bis zum 31.12.2023

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 2023 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-2023/​. 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' Report on the operations of the Grenevia Group and Grenevia S.A. in 2023

This Directors' Report on the operations of the Grenevia Group in 2023 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 29 March 2018 (Dz.U. of 2018, item 757, dated 20 April 2018). Given the structure of the Grenevia Group, the descriptions contained in this Report also relate directly to the operations and developments 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 2023 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.

Table of contents

SUMMARY OF 2023

LETTER FROM THE PRESIDENT OF THE MANAGEMENT BOARD

OVERVIEW OF THE GRENEVIA GROUP'S BUSINESS

STRATEGY AND DEVELOPMENT DIRECTIONS

CHANGES IN THE ORGANISATIONAL STRUCTURE OF THE GRENEVIA GROUP

OVERVIEW OF THE OPERATING SEGMENTS' BUSINESS ACTIVITIES

Solutions for the mining and wind power sectors (FAMUR segment)

Power distribution solutions (Power Engineering segment)

Utility-scale solar PV projects (PV segment)

Battery systems for electric mobility and energy storage (E-mobility segment)

FACTORS WHICH MAY AFFECT THE GROUP'S PERFORMANCE IN THE NEXT QUARTER AND BEYOND

DESCRIPTION OF KEY RISKS AND THREATS

OVERVIEW OF THE GRENEVIA GROUP'S OPERATIONS IN 2023

DISCUSSION OF FINANCIAL HIGHLIGHTS

PERFORMANCE AGAINST FORECASTS

RELATED-PARTY TRANSACTIONS

WORKFORCE

MATERIAL CLAIMS, DISPUTES, PENALTIES AND PROCEEDINGS

EVENTS SUBSEQUENT TO THE REPORTING DATE

FINANCIAL HIGHLIGHTS OF THE GRENEVIA GROUP FOR THE LAST FIVE YEARS

GRENEVIA SHARES ON THE WARSAW STOCK EXCHANGE

PARENT OF THE GRENEVIA GROUP

GENERAL INFORMATION

ORGANISATIONAL CHANGES AT GRENEVIA S.A

ORGANISATIONAL AND EQUITY LINKS

DISCUSSION OF FINANCIAL HIGHLIGHTS

ASSETS AND FINANCIAL RESOURCES MANAGEMENT

CORPORATE GOVERNANCE AT GRENEVIA S.A.

SHAREHOLDING STRUCTURE

MANAGEMENT BOARD OF GRENEVIA S.A

SUPERVISORY BOARD OF GRENEVIA S.A. AND ITS COMMITTEES

REMUNERATION OF MANAGEMENT AND SUPERVISORY PERSONNEL

CODE OF CORPORATE GOVERNANCE STANDARDS APPLICABLE TO GRENEVIA S.A

OTHER STATEMENTS FROM THE MANAGEMENT BOARD

Summary of 2023

Key financial indicators of the Grenevia Group

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Key financial indicators
	12 months to 31 December		Change (%)
---	---	---	---
(PLN million)	2023	2022
---	---	---	---
Revenue	1,644	1,296	+27%
EBITDA	414	406	+2%
Net profit (loss) from continuing operations	144	192	-25%
Net profit (loss), of which:	144	120	+20%
- attributable to owners of the Parent	212	158	+34%
Cash flows from operating activities	622	-8	n/​a
as % of revenue
EBITDA	25%	31%	-6pp
Net profit (loss)	9%	9%	-pp

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	as at
	31 Dec 2023	31 Dec 2022
---	---	---
Net debt (PLN million)	372	127
Net debt/​EBITDA	0.9x	0.3x

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Segment name and principal business activities	Key developments in 2023
FAMUR	• PLN 1,114 million in revenue from external customers for 2023 (broadly unchanged year on year),
Solutions for the mining and wind power sectors	• PLN 730 million in backlog at the end of 2023 (supply of machinery and equipment and leases in accordance with the effective terms of the contracts),
	• PLN 498 million in EBITDA for 2023,
	• No net debt outstanding at the end of December 2023,
	• Acquisition of a 75% ownership interest in Total Wind PL Sp. z o.o. on 20 July 2023 to step up expansion in the wind power sector and establish a dedicated branch.
Power Engineering	• PLN 162 million in revenue for 2023, including PLN 110 million from external customers of the Grenevia Group,
Power distribution solutions	• PLN 129 million in backlog as at the end of 2023, including PLN 66 million worth of contracts with non-Group customers,
	• PLN 35 million in EBITDA for 2023,
	• PLN 26 million excess cash over net debt as at 31 December 2023.
PV	• PLN 78 million in revenue for 2023, mainly from sale of electricity,
Utility-scale solar PV projects	• PLN -56 million in EBITDA for 2023,
	• Net debt at PLN 1,143 million as at 31 December 2023 (gross debt at PLN 1,269 million, including PLN 824 million under financing advanced by Grenevia),
	• Nearly PLN 200 million of external project finance raised in 2023,
	• 210 MW of PV farm capacity connected to the power grid as at 31 December 2023,
	• ~4.7 GW of total estimated capacity of the entire project portfolio, comprising projects at different stages of development, as at 31 December 2023, including over 0.5 GW of projects under development in Germany,
	• More than 1.2 GW of total capacity of PV, energy storage and wind projects with secured connection permits,
	• Growth strategy for 2023-2027 * adopted in May 2023,
	• Preliminary agreement signed in September 2023 with KGHM Polska Miedź S.A. to sell shares in 4 Project Companies holding a portfolio of nearly 50 MW of PV projects - the transaction closed and settled in the first quarter of 2024.
E-mobility	• PLN 335 million in revenue for 2023,
Battery systems for electric vehicles and energy storage	• PLN -23 million in EBITDA for 2023,
	• Continued business relationship with Solaris Bus & Coach Sp. z o.o., expanded scope of business with Alexander Dennis Limited,
	• Discussions entered into with potential suppliers to ensure multiple sourcing (agreement with LG Energy Solution Wrocław Sp. z o.o. and Freyr Battery Norway AS),
	• Execution of two factoring agreements with a limit of up to PLN 60 million, and a facilities agreement comprising a working capital facility of up to PLN 75 million and an investment facility of up to EUR 22 million,
	• PLN 74 million in net debt outstanding as at 31 December 2023, financing advanced by IMPACT shareholders (including Grenevia S.A.) fully repaid in the fourth quarter of 2023,
	• ~PLN 87 million in total expenditure on the GigafactoryX project in the 12 months ended 31 December 2023.

Letter from the President of the Management Board

Dear Shareholders,

2023 marked another successful phase in Grenevia S.A.'s journey to turn into a holding company that invests in the green transition. The strategic directions set forth in 2021 kept propelling us forward, with a focus on enhancing the value of our green segments, i.e. the segments of solar photovoltaics (PV) and E-mobility, and concurrent pursuit of new initiatives in our traditional business areas related to the mining industry, aiming to bolster their foothold in renewable energy sectors.

Early in the year, we embraced a sustainable development strategy for the period spanning 2023 to 2030, aligning our business objectives with Environmental, Social, and Governance (ESG) principles. This structural and operational evolution prompted a momentous decision to rebrand. In February 2023, the Extraordinary General Meeting resolved to change the Company's name from FAMUR Spółka Akcyjna to Grenevia Spółka Akcyjna.

Financial performance in 2023

In 2023, the Grenevia Group witnessed a 27% increase in revenue, to PLN 1,644 million. This growth was driven by the full consolidation of the E-mobility segment throughout the period, alongside improved revenue in the Power Engineering and PV segments, and a sustained revenue level in the FAMUR segment. EBITDA stood at PLN 414 million, reflecting a profitability margin of 25%, with net profit of PLN 144 million. At the close of 2023, our net debt amounted to PLN 372 million, translating into net debt/​EBITDA ratio of 0.9x. As part of ongoing efforts to optimise our financing structure, in December 2023 we successfully executed the early redemption (call option) of Series B notes with a nominal value of PLN 200 million.

Operating performance in 2023 across business segments

Let me provide an overview of our operating results for 2023 across the business lines starting with the FAMUR segment. In the business of machinery for the mining industry, we encountered persistent challenges stemming from aggressive competition by Chinese manufacturers in international markets. It was accompanied by a dwindling investment demand from mines, largely attributed to a decline in coal prices, which regressed to levels recorded before the war in Ukraine. In the case of Polish mines, an increase was mainly seen in investments to replace and secure existing assets. Both domestically and abroad, demand was predominantly focused on aftermarket services, maintenance, delivery of spare parts, repair of machinery and equipment, and leases of shearer loaders/​roadheaders, driving up the segment's recurring revenue. In response to geopolitical developments, particularly the imposition of economic sanctions, we made a decision to cease operations in Russian and Belarusian markets. In March 2023, we initiated a process to divest our assets held in Russia, culminating in the sale of 100% of shares in the subsidiary OOO Famur in January 2024.

To boost the FAMUR segment's expansion in the wind power sector, in July 2023 Grenevia S.A. acquired a 75.24% equity interest in Total Wind PL Sp. z o.o. for approximately EUR 4.5 million. This acquisition aims to augment the FAMUR segment's capabilities in delivering solutions and services for the wind power sector, while allowing it to diversify manufacturing operations. Anticipated revenue synergies will significantly expedite business upscaling in this sector, complementing the evolving portfolio of gearbox repair and maintenance, monitoring and technical consultancy services through the addition of wind turbine installations, including major component replacements and maintenance work. At the outset of 2024, we made a decision to establish Famur Gearo as a separate organisational unit of the FAMUR segment overseeing the development of our wind energy business.

In 2023, the FAMUR segment generated PLN 1,114 million in revenue from external customers, and its total backlog (supplies of machinery and equipment and leases in accordance with the effective terms of the contracts) at the year-end amounted to approximately PLN 730 million.

In 2023, the Power Engineering segment was focused on retaining its position as the preferred business partner for the sector, further developing its electricity distribution solutions, in particular for renewable energy. The available range of aftermarket services offered to the mining industry was expanded, and revenue from the industrial sector included the supply of electrical switchgears and industrial machinery control systems. Within the renewable energy domain, containerised substations for solar PV farms were delivered to Projekt Solartechnik S.A. to exploit synergies within the Grenevia Group, and to other operators outside the Group. Additionally, contracts were secured with new customers, for whom production commenced towards the end of 2023 and will extend into 2024. To efficiently manage the growing backlog volume, the segment's workforce was bolstered and a new substation manufacturing line was launched in Zabrze.

In 2023, the Power Engineering segment recorded PLN 162 million in revenue, of which PLN 52 million was generated through synergies within the Grenevia Group, i.e. sales to the FAMUR and PV segments. As at the end of 2023, the segment's total backlog was PLN 129 million, including PLN 63 million attributable to orders from the FAMUR and PV segments.

The primary focus of the PV segment revolved around vigorous expansion of its project portfolio, involving the construction of further solar PV farms and diversification of the portfolio to include more wind and energy storage projects. It continued the process to market completed PV project portfolios while selling electricity from completed PV farms under PPAs/​cPPAs. In September 2023, a preliminary agreement was reached with KGHM Polska Miedź S.A. for the sale of shares in four Project Companies, holding a portfolio of PV projects with a combined capacity of nearly 50 MW. The transaction was finally closed and settled in February 2024. In 2023, the segment successfully raised close to PLN 200 million in project finance.

By the end of 2023, the total capacity of its PV project portfolio (encompassing farms at different stages of development) increased to some 4.7 GW, including over 0.5 GW attributable to projects under development in Germany. The grid-connected PV farms achieved a total capacity of 210 MW, with a further 239 MW of PV projects under construction. At the same time, the PV, energy storage and wind projects with secured connection permits totalled over 1.2 GW in capacity.

In May 2023, the Management Board of Projekt Solartechnik S.A. endorsed a development strategy for the PV segment to be executed over the years 2023-2027, as detailed in the 'Segment of utility-scale solar PV projects (PV segment)' section of this Directors' Report.

In 2023, the PV segment generated PLN 78 million in revenue. As at the end of 2023, its outstanding debt amounted to PLN 1,269 million (including PLN 824 million under financing advanced by Grenevia), with net debt standing at PLN 1,143 million.

In 2023, the E-mobility segment generated PLN 335 million in revenue. During this period, Impact Clean Power Technology S.A., the e-mobility sector player, focused on securing new framework agreements and contracts spanning the years 2024-2026, particularly for the supply of e-bus battery systems. This strategic focus led to continuation of the business partnership with Solaris Bus & Coach Sp. z o.o. and a higher volume of orders from Alexander Dennis Limited. To fortify the stability of the segment's supply chain for essential components, contracts were executed with LG Energy Solution Wrocław Sp. z o.o. and Freyr Battery Norway AS to ensure multiple sourcing and supplies sourced from China were further diversified. The GigafactoryX project is progressing as scheduled, with the assembly of the manufacturing line, its last milestone, slated for the first and second quarters of 2024. Total expenditure incurred on this project in 2023 was around PLN 87 million. In the fourth quarter of 2023, two factoring agreements with a limit of up to PLN 60 million, and a facilities agreement comprising a working capital facility of up to PLN 75 million and an investment facility of up to EUR 22 million, were finalised enabling the repayment of working capital and investment loans advanced by the company's shareholders (including Grenevia).

Pursuit of the Sustainability Strategy

At the Grenevia Group, we are steadfast in our commitment to being a socially responsible organisation, striving to develop our business sustainably while prioritising the interests of all stakeholders. This commitment is embodied in the Grenevia Group's Sustainability Strategy for 2023-2030, unveiled in January 2023. To spearhead its effective delivery, a Steering Committee, led by the President of the Grenevia S.A. Management Board, was established. Subsequent steps included the adoption of a supplier sustainability code, identification of key suppliers across segments, and implementation of an enterprise risk management policy, as well as uniform social policies and corporate procedures across the Group. Our rooftop solar panel systems at the Group's facilities have been consistently expanded, reinforcing our dedication to renewable energy solutions. Moreover, we are actively cultivating an organisational culture that promotes equality and diversity. One notable initiative is the Wind Roses project, designed to support women in professional and personal development. Furthermore, the expansion of our PV and e-mobility operations helps avoid CO 2 emissions, thereby contributing to environmental sustainability. For more detailed insights into our Environmental, Social, and Governance (ESG) activities, refer to the Non-Financial Report for 2023.

GRENEVIA Group's plans for 2024

Our focus in 2024 will remain centred on continued development and rapid upscaling of our business within the E-mobility and PV segments. In our traditional business domains, comprising the FAMUR and Power Engineering segments, we are committed to parallel initiatives aimed at expanding their presence on the markets of, respectively, solutions for the wind power sector and PV farm substations. Across all segments, we will uphold a flexible operating model and rigorous cost control measures. Furthermore, we will persist in optimising our financing structure, ensuring that our debt levels remain within safe thresholds to sustain stable development of the Group.

Beata Zawiszowska President of the Management Board, Grenevia S.A.

Overview of the Group's business

Strategy and development directions

GENERAL INFORMATION

The Grenevia (formerly FAMUR) Group is an active investor that integrates and develops operations across four business segments: the segment of utility-scale solar projects (PV) based on the Projekt Solartechnik Group (the "PST Group"/​"PST"); the segment of battery systems for electric vehicles and energy storage (E-mobility) based on Impact Clean Power Technology S.A. ("ICPT"); the segment of advanced solutions for the power distribution sector (Power Engineering) based on Elgór+Hansen S.A. ("E+H"); and the segment of solutions for the mining and wind power sectors based on the FAMUR brand.

In January 2023, the Group's new business structure was announced, along with the name change from FAMUR to Grenevia. The new business model stems from the strategy we have consistently implemented since it was first unveiled in May 2021, which aims to transform the Grenevia Group from a leading producer of mining machinery into a major investor in the 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. In its activities, Grenevia is guided by the following vision and mission statement.

VISION:

Grenevia has been established to responsibly and actively support the transition towards a sustainable low-carbon economy.

MISSION:

By consciously transforming our business model, we invest in promising green transition projects to enhance their value for the benefit of the global community as a whole.

On 16 February 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 3 April 2023.

Growth strategy

The 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 25 May 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:

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•	Generating cash from the mining assets by concentrating on the most profitable and stable product lines and continuously adapting the structure of operating assets to the directions of Poland's energy transition, while retaining the capabilities and know-how required to participate in selected mining projects in Poland and export markets on an opportunistic basis;
•	Repurposing selected manufacturing plants, e.g. under the model of strategic partnerships (joint ventures, licence agreements, etc.) in the industrial sectors that are oriented particularly towards manufacturers of machinery and equipment for the renewable energy sector;
•	Evolving into an organisation that invests in green transition projects, in the first place by entering the sector of green energy and end-to-end development and turnkey delivery of utility-scale solar projects;
•	Consistently searching for attractive investment opportunities in the renewable energy sector and other promising industries.

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 revenue related to the thermal coal sector is expected to fall below 30% by 2024 (from some 52% in 2023). Development in the new areas will be financed with profits, available EU funds and other financial instruments designed to support green energy projects.

The Grenevia Group's expansion into new business areas requires reinvestment of its profits. The dividend, if any, proposed by the Management Board to the General Meeting depends on profits earned in a given financial year, the investment attractiveness of new projects and growth prospects, as well as the financial and liquidity position of the Grenevia Group. A final decision on the allocation of profit for a financial year will be made by the Annual General Meeting.

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 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 implementation

The Grenevia Group consistently pursues its strategy and diversifies operations to transform its business profile towards investing in the green transition. The first step was the entry into the sector of utility-scale solar PV projects in 2021. The Grenevia Group's PV segment is currently comprised of the Projekt Solartechnik 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 long-standing experience, resources and capabilities 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 2 MW.

In 2022, we also developed a new strategy for the portfolio company Elgór+Hansen S.A., forming the core of the Group's Power Engineering segment. Its key role is to increase business diversification and develop electricity distribution solutions for the power industry, including the renewable energy sector.

Towards the end of 2022, through our investment in Impact Clean Power Technology S.A. ("ICPT"), we achieved a new milestone by entering another promising area of the renewable energy industry, i.e. battery systems for electric vehicles and energy storage. ICPT 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 PV projects (Projekt Solartechnik Group); battery systems for electric mobility and energy storage (Impact Clean Power Technology S.A.); power distribution solutions (Elgór+Hansen S.A.); and solutions for the mining and wind power sectors (FAMUR). Each of the business segments forms a separate operational and financial structure.

Throughout 2023, the Grenevia Group focused on developing its business segments dedicated to supporting the energy transition, i.e. e-mobility and utility-scale solar photovoltaics. To step up the FAMUR segment's expansion in the wind power sector, in July 2023 Grenevia S.A. acquired a 75.24% ownership interest in Total Wind PL Sp. z o.o. for approximately EUR 4.5 million. For detailed information on the development of individual business segments in 2023, see further parts of this Directors' Report on the operations of the Grenevia Group in 2023.

Grenevia Group's Sustainability Strategy for 2023-2030

In January 2023, we announced our Sustainability Strategy for 2023-2030, which was developed 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 Sustainability Strategy for 2023-2030 and its implementation in 2023, see the Non-Financial Report for 2023.

Changes in the organisational structure of the Grenevia Group

The key changes made to the Grenevia Group structure in 2023 were as follows:

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•	To step up the FAMUR segment's expansion in the wind power sector, on 20 July 2023 Grenevia S.A. acquired a 75.24% ownership interest in Total Wind PL Sp. z o.o. for approximately EUR 4.5 million.
•	On 10 October 2023, a share sale agreement was concluded whereby shares in one project company holding a portfolio of PV farms were sold to the KGHM Polska Miedź Group for a total price (including the subrogation value) of approximately PLN 24 million.

In addition, in 2024 by the date of issue of this Directors' Report for 2023, the following changes took place in the Grenevia Group's organisational structure:

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•	On 22 January 2024, by Management Board Resolution No. 12/​2024, a new business area was established within Grenevia S.A.'s FAMUR segment - the Famur Gearo Branch, responsible for developing wind energy solutions in line with the Group's strategic directions.
•	On 23 January 2024, an agreement was signed to sell the entire shareholding in OOO Famur for EUR 700 thousand (PLN 3 million). For full details of the transaction, see the section devoted to the FAMUR segment.

The table below presents material operating entities of the Grenevia Group as at 31 December 2023 and their allocation to the respective operating segments. Only fully consolidated companies are included.

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Segment name	FAMUR segment	Power Engineering segment	PV segment	E-mobility segment	Corporate Functions segment
Principal business activities	Solutions for the mining and wind power sectors	Power distribution solutions	Utility-scale solar PV projects	Battery systems for electric mobility and energy storage	Corporate functions and other activities
Key segment companies	Grenevia S.A. FAMUR Katowice Branch (preparing its own set of accounts)	Elgór+Hansen S.A.	Projekt-Solartechnik Group	Impact Clean Power Technology S.A.	Grenevia S.A. (holding company functions) DE Estate Sp. z o.o.
	PRIMETECH Group				Famur Finance Sp. z o.o.
	TOO FAMUR Kazakhstan Taian Famur Coal Mining Machinery Co., Ltd.
	Hansen And Genwest (Pty) Ltd
	Total Wind PL Sp. z o.o.

For an overview of the Grenevia Group's organisational structure and its changes, see Note 11 to the consolidated financial statements of the Grenevia Group for 2023.

Overview of the operating segments' business activities

The business activities of the Grenevia Group's segments are presented below.

SOLUTIONS FOR THE MINING AND WIND POWER SECTORS ("FAMUR SEGMENT")

The FAMUR segment provides solutions for the mining industry (marketed under the FAMUR brand) and wind power sector (marketed under the FAMUR Gearo brand). FAMUR's key product lines comprise longwall systems, roadheaders and belt conveyors for underground longwall mining applications. Its services also include the design and delivery of IT systems for monitoring the machinery operation, while improving safety and production efficiency. 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, South Africa, and Germany guarantee ongoing customer service and fast response in line with customer expectations. The segment is constantly raising the bar on service quality as well as proactively extending its reach to new locations where reliable mining and industrial systems are needed.

Since 2022, measures have been taken to leverage the segment's existing manufacturing facilities to provide maintenance, refurbishment and repairs of onshore wind turbine gearboxes. The growth of this business area is enabled by the segment's extensive experience of more than 40 years in manufacturing gearboxes and drive trains for various industrial sectors, coupled with robust manufacturing infrastructure, including an on-site dynamometer capable of load testing of gearboxes produced by the segment. Currently, a complete range of services is being developed for wind turbine gearbox repair and maintenance. This includes an assessment of the technical condition of a customer's equipment, including examination of gearbox interiors, comprehensive maintenance, and, in the case of worn-out or damaged units - their immediate replacement with units available in stock and then repair completed with dynamometer testing. In addition, the offering includes a gearbox storage service to ensure fast lead times and minimise downtime at wind turbine operators due to equipment failure.

To further its ambitions in the wind power sector, on 20 July 2023 Grenevia S.A. signed an agreement to acquire a 75.24% ownership interest in Total Wind PL Sp. z o.o. for approximately EUR 4.5 million (PLN 20 million). The ownership interest was transferred to Grenevia S.A. upon payment of the purchase price, i.e. on 1 August 2023. The agreement gives Grenevia S.A. an option, vesting in 2026, to increase its shareholding in Total Wind PL Sp. z o.o. by purchasing a 10.03% ownership interest therein from an entity controlled by the founder of Total Wind PL (unrelated to the Grenevia Group). The purchase price will be determined based on the proportion of the shares acquired and a fixed multiple of EBITDA for 2025, less net debt. Potential purchase of the minority interest is an element of the Group's commitment to acquire its own equity instruments. The estimated amount of the related liability measured as at 31 December 2023 was PLN 6 million. For information on the accounting treatment of the acquisition of shares in Total Wind PL and the option, see Notes 12 and 48 to the consolidated financial statements of the Grenevia Group for 2023.

Poland-based Total Wind PL Sp. z o.o. specialises in wind turbine installations as well as maintenance and replacement of key components from major manufacturers. Since its inception 19 years ago, the company has erected over 1,500 wind turbines. As at 31 December 2023, Total Wind PL Sp. z o.o. had a workforce of about 110, of which 90 were technical professionals. The company has a footprint in 10 countries. In 2023, its revenue exceeded PLN 40 million, up by approximately 11% year on year (of which approximately PLN 18 million was included in the Grenevia Group's revenue, i.e. from the consolidation date of 1 August 2023). The share of revenue derived from foreign markets was significant, at approximately 90%.

By acquiring Total Wind PL Sp. z o.o., the FAMUR segment was able to enhance its capabilities in providing solutions and services for the wind power sector, while diversifying the operations of its key manufacturing plant. The anticipated revenue synergies will facilitate a scale-up of this business line, by complementing its expanding portfolio of gearbox repair, maintenance, monitoring and technical consultancy services with major turbine component replacements, upkeep, and installation.

Consistent efforts to expand the foothold in the wind power sector also led to the establishment on 1 February 2024 of FAMUR Gearo, a new branch within the segment, based on resources and assets of the existing FAMUR Machinery branch. FAMUR Gearo will integrate all the segment's activities involving the development and delivery of comprehensive solutions for wind power generation and manufacture of transmissions/​gearboxes for various industrial applications.

MARKET SITUATION AND KEY OPERATIONS OF THE FAMUR SEGMENT

In 2023, the business of mining machinery manufacture for export markets was affected by weakening demand for new equipment and continued aggressive competition from Chinese manufacturers. Capital purchases by foreign mines remain under the pressure of falling coal prices, which are returning to levels recorded before the war in Ukraine. As at the end of December 2023, the average price of thermal coal hovered around USD 114/​tonne, a year-on-year decline of approximately 49%. Both the Polish and foreign markets primarily saw demand for aftermarket services, involving machinery and equipment maintenance, repairs, supply of spare parts, as well as shearer loader and roadheader leases (recurring revenue), whose share in the segment's total revenue has been on an upward trend for several quarters.

The FAMUR segment actively sought orders from markets like Europe, Middle East, North America, Australia, Southeast Asia, and China, where its competitive advantage lies in product quality, comprehensive solutions, and superior aftermarket services.

Given the increasingly stringent sanctions imposed ever since the outbreak of the war in Ukraine, the segment ceased to operate on the Russian and Belarusian markets in 2023. In March 2023, the Group commenced a process to divest the assets held in Russia. The transaction was eventually effected in two stages: In October 2023, an assignment was made of Grenevia S.A.'s receivables from OOO FAMUR of PLN 15 million (paid in full). On 23 January 2024, an agreement was signed for the sale of 100% of shares in OOO Famur for PLN 3 million, of which PLN 1.5 million has already been paid, with the balance contractually agreed to be settled in instalments by 28 February 2025. The share sale transaction was concluded as required by the provisions laid down in the Decree of the President of the Russian Federation, and therefore the valuation of OOO Famur was performed by an entity from the list of acceptable experts at the liquidation value. The transaction price resulted from the applicable regulations, i.e. was set below 50% of the valuation amount. In accordance with the agreement, the title to the shares passed to the buyer upon entry in the Russian Unified State Register of Legal Entities on 30 January 2024. The result of those moves was the FAMUR segment's full exit from the Russian market.

In Poland, the market situation remains stable, under the continued pressure of changes resulting from the adopted plan to gradually close down thermal coal mines. During 2023, however, a moderate uptick was recorded in the domestic market relative to previous years, with an increase in investments made by Polish mines to replace and secure existing assets, driving up mainly aftermarket revenue.

In the area of wind turbine gearbox repair and maintenance services, the segment successfully serviced a number of gearboxes and secured new contracts for assessment of the technical condition, overhaul and sale of gearboxes. The real-time gearbox monitoring system was improved, and supplementary services continued to be developed, including on-site examination of gearbox interiors on customer premises, maintenance of other wind turbine components (main shafts, inverters, controllers), as well as gearbox storage and maintenance support to ensure full operational readiness of the equipment for customers. Recognition of the FAMUR segment (FAMUR Gearo brand) among entities operating in the wind power sector is consistently enhanced through its participation in domestic and international trade fairs and events. Steps were also taken to fully integrate the company into the FAMUR segment.

The segment's commercial activities carried out in 2023 at home and abroad delivered a total backlog (supplies of machinery and equipment and leases in accordance with the effective terms of the contracts) as at the end of 2023 of approximately PLN 730 million.

COMPETITIVE ENVIRONMENT

Major competitors of the FAMUR brand in the provision of solutions for the mining industry include specialised Chinese companies, such as Zhengzhou Coal Machinery Group Co., Ltd (ZMJ) and China Coal Beijing Coal Mining Machinery Co. Ltd (BMJ), as well as global players active in the underground mining equipment market, such as Caterpillar Inc., Komatsu Mining Corp. and Sandvik AB. Within the business area handled by FAMUR Gearo, involving services for the wind energy sector related to wind turbine installation, as well as gearbox manufacture, maintenance and repair, the segment competes with such companies as: Fair Wind A/​S, Deutsche Windtechnik AG, DWS Wind Turbine Service Sp. z o.o., GBS (Gearbox Services International), Multigear GmbH, and Wikov Industry a.s.

SEGMENT GROWTH STRATEGY

The accelerating energy transition in Poland and globally is worsening the outlook for the mining solutions sector. FAMUR's strategic response to this trend is to continue to generate revenue from existing 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:

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•	Focusing on the most profitable and stable product areas;
•	Maintaining the lease model designed to stabilise revenue and continuing provision of aftermarket services;
•	Disposing of or phasing out less profitable assets in keeping with Poland's energy transition;
•	Maintaining capabilities and know-how required to participate in selected mining projects in Poland and export markets on an opportunistic basis;
•	Using the expertise in the manufacturing of industrial transmissions to bid for contracts for gearbox repair/​refurbishment and maintenance in the wind power sector;
•	Steadily expanding solutions for customers operating in the wind power sector and reinforcing FAMUR Gearo's position within this sector both domestically and abroad;
•	Seeking opportunities to further expand its foothold in the wind power sector through organic growth and M&As.

FAMUR'S SOLUTIONS FOR THE MINING AND WIND POWER INDUSTRIES

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 to 1.7 metres, 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.

Wind turbine installation and gearbox repair & maintenance

In 2022, the FAMUR segment made a decision to leverage its operational resources to develop a range of gearbox maintenance and repair services for onshore wind turbines. Marketed under the FAMUR Gearo brand, these services rely primarily on the segment's long-standing experience of manufacturing gearbox and drive train systems for various industries. The comprehensive portfolio includes on-site assessment of the technical condition of a gearbox on customer premises, complete overhaul and repair/​refurbishment, followed by load testing in the dynamometer. This is complemented by predictive maintenance, including real-time gearbox monitoring and diagnostics, and regeneration of other wind turbine components (main shafts, inverters and controllers). Customers are also offered gearbox storage and maintenance service to ensure full operational readiness of the equipment.

Since 2023, the FAMUR segment, through its subsidiary Total Wind PL Sp. z o.o., has also provided comprehensive wind turbine installation services, in addition to maintenance and replacement of key turbine components, refurbishments, inspections, protection and repairs of turbine blades. Dedicated to key wind turbine manufacturers and operators, these services, complemented by the manufacture, maintenance and repair of gearboxes, make up a unique offering catering comprehensively to the wind energy market.

A description of the FAMUR segment's full service range for the wind power sector is available on the website at www.famur.com/​energetyka-wiatrowa.

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 teams (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, located anywhere in the world. Since 2021, the SIGMA room has been hosting training sessions, conferences and meetings with both Polish and foreign customers. Early 2023 saw the launch of another innovation - the ServiceInGrid by Locatic app. Each member of the maintenance team has a tablet where they can access complete maintenance documentation in interactive form, which improves communication and facilitates servicing of both mining machinery and wind turbines.

DISTRIBUTION MODEL AND KEY CUSTOMERS

The FAMUR segment sells its products and services for the mining industry directly to companies engaged in the mining of soft rocks (such as thermal and coking coal, potash and gypsum). In FAMUR's opinion, there is no material dependence on any single customer from the sector. However, its sales are largely concentrated in a single sector of the economy, i.e. the mining industry. Domestic customers, accounting for over 10% of the segment's revenue in 2023, were: the PGG Group (approximately 27% of total sales), the JSW Group (approximately 21% of total sales) and the Węglokoks Group (approximately 17% of total sales). There are no formal equity links between those entities and the Company.

Services for wind energy operators are also sold directly to those companies. They primarily target international wind turbine manufacturers, such as: GE Vernova Inc, Nordex SE, Siemens Gamesa Renewable Energy S.A. as well as wind farm operators and owners. Over 90% of revenue from wind turbine installation services is generated in foreign markets.

SUPPLY CHAIN

The FAMUR segment has access to diversified sources of raw materials and is not dependent on one or more suppliers. Efforts to ensure multiple sourcing of key raw materials and other manufacturing inputs were continued. 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, and to comply with the applicable EU legislation.

Machinery and equipment manufactured by the segment are delivered directly to final users. FAMUR outsources the deliveries of finished products to customers, as well as intra-Group deliveries of parts to its manufacturing plants, to reliable transport operators.

R&D ACTIVITIES

In 2023, the FAMUR segment was dedicated to research and development efforts, focused on enhancing its existing products for the mining industry, developing gearbox solutions for wind power and various industrial applications, including traction drive transmissions, and refining its systems for predictive gearbox maintenance.

In the case of products for the mining industry, the FAMUR segment focused on automating mining systems as well as control, visualisation and diagnostic systems in shearer loaders to enhance the ergonomics and reliability of remote control. 2023 saw the successful surface deployment of a second Mikrus system delivered to a customer in China, along with integration of an Inertial Navigation System (INS). Compatibility testing and certification processes for the Chinese market were carried out. In addition, work was commenced to broaden the scope of the segment's offering for the US market, with a focus on obtaining requisite certifications.

FINANCIAL PERFORMANCE OF THE FAMUR SEGMENT

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Segment's revenue from external customers
	12 months to
---	---	---
(PLN million)	31 Dec 2023	31 Dec 2022 *
---	---	---
Supply of machinery and equipment	373	512
Revenue from aftermarket services and leases	743	595
Other	-	8
Total revenue	1,116	1,115
less revenue from other segments	2	-
Segment's revenue from external customers	1,114	1,115

* In order to ensure comparability, the operating segments' figures for 2022 have been restated to match the Group's business structure as at 31 December 2023.

The FAMUR segment's external revenue for 2023 was PLN 1,114 million, broadly unchanged year on year. Revenue from the supply of machinery and equipment fell by PLN 139 million, to PLN 373 million. Recurring revenue (aftermarket services and leases) increased by PLN 148 million (+25%) year on year, to PLN 743 million. Revenue derived from the wind power sector in 2023 was PLN 23 million.

Segment sales by key geographies

In 2023, the FAMUR segment's export sales accounted for approximately 12% of its total revenue, vs 44% a year earlier. The decline was mainly attributable to a reduction in sales to Russia and other CIS countries, whose share in revenue fell to approximately 3%, compared with 11% in the corresponding period of the previous year. Following the outbreak of the war in Ukraine, the FAMUR segment companies opted against bidding for new machinery or equipment (longwall system) contracts targeting the Russian market, and revenue recognised in that geography has been mainly attributable to the discharge of maintenance obligations under pre-existing contracts. In 2023, the FAMUR segment also initiated a process to divest the assets held in Russia, which on 23 January 2024 culminated in the sale of 100% of shares in OOO Famur, the Company's Russian subsidiary, and the FAMUR segment's full exit from the Russian market.

Upon fulfilment of a mining equipment supply contract for the US market, the share of exports to US in total sales fell to 1% from 16% in 2022. At the same time, work is ongoing to expand the offering of spare parts and aftermarket services for that market. The share of other geographies in total revenue dropped to 8% from 17% in 2022, primarily as a result of completion of contracted deliveries to customers based in Indonesia and China. In the fourth quarter of 2023, the first contract was signed for the supply of a roadheader to Saudi Arabia, to be fulfilled early next year. In 2023, the lower export sales were offset by a PLN 360 million (+58%) year-on-year increase in sales on the domestic market.

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Profitability of the FAMUR segment	12 months to
(PLN million)	31 Dec 2023	31 Dec 2022 *
---	---	---
Gross profit	462	423
Operating profit	332	295
Depreciation and amortisation	166	143
EBITDA	498	438
EBITDA margin (%)	45%	39%
* In order to ensure comparability, the operating segments' figures for 2022 have been restated to match the Group's business structure as at 31 December 2023.

The FAMUR segment's gross profit for 2023 was PLN 462 million, up by PLN 39 million (+9%) year on year, reflecting mainly an increased contribution to total sales of aftermarket services and leases, which tend to be more profitable. This increase led to an improvement of both operating profit and EBITDA, which stood at, respectively, PLN 332 million (up by PLN 37 million year on year) and PLN 498 million (up by PLN 60 million year on year). EBITDA margin for 2023 was 45%, up by 6pp from 39% in the comparative period. The segment's operating performance for 2023 was affected by PLN 15 million write-downs on parts for shearer loaders and roadheaders in the case of which the Group is recording a decreasing number of lease contracts, and on materials and semi-finished products which cannot be used for its day-to-day manufacturing and maintenance activities.

POWER DISTRIBUTION SOLUTIONS ("POWER ENGINEERING SEGMENT")

The Power Engineering segment is led by Elgór+Hansen S.A. ("E+H"), which can boast nearly 30 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, Elgór+Hansen S.A. launched the manufacture of containerised substations, including lines dedicated to utility-scale renewable energy projects.

Drawing on its extensive experience as well as development and manufacturing resources, the company 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. The company's offerings comprise both proprietary solutions and those from leading global providers, ensuring comprehensive customer support at every stage of a project - from design and engineering to construction, documentation, and operation - both in Poland and in other markets.

Market situation and key operations of the Power Engineering segment

In 2023, the Power Engineering segment focused on maintaining its position in the mining solutions sector and further developing its electricity distribution solutions, particularly for renewable energy. Sustained demand for repairs of mining equipment translated into higher volumes of aftermarket services provided. There was a surge in revenue from the renewable energy sector (containerised substations for PV farms) and a slight increase in revenue from industry, derived mainly from the supply of electrical switchgears and industrial machinery control systems. An approximately PLN 31 million worth contract for the supply of PV farm substations was concluded with the Solartechnik Project Group, in addition to contracts signed with other customers. The former was largely fulfilled, while deliveries under the other contracts commenced in the fourth quarter of 2023 and will continue in 2024. The expansion of the business scale in 2023 led to an increase in workforce numbers and launch of a new substation manufacturing line at the Zabrze plant.

The renewable energy market saw a decline in demand for PV systems from financial investors, driving down the prices of components (including substations for renewable energy sources), but the long- and medium-term investment trend in the market remains unchanged. The new business line at Elgór+Hansen S.A. is expected to remain on a sustained growth path, with strong prospects for revenue improvement in the New Energy segment, and the current turbulence is regarded as only temporary. The segment is expanding its manufacturing facilities, internal structures, product portfolio and customer base. The strategy of new additions to the product portfolio to include more renewable energy solutions is being consistently implemented.

In 2023 PLN 263 million worth of contracts were secured in total, up by PLN 139 million relative to 2022. As at the end of 2023, the segment's total backlog was PLN 129 million, including PLN 63 million attributable to orders from the FAMUR and PV segments and PLN 66 million to orders from external customers of the Grenevia Group.

Competitive environment

Elgór+Hansen S.A. competes with different companies depending on the product category. Its competitors offering solutions for the mining industry include Becker Warkop Sp. z o.o. and Elektrometal S.A. The company enjoys a significant competitive advantage in the segment stemming from the end-to-end nature and quality of its products, well-developed maintenance services, and brand recognition. Its competitors in the segment of power supply and distribution solutions for the power distribution market, including the renewable energy sector, include ZPUE S.A., Elektromontaż Lublin Sp. z o.o., Revico S.A. and Emiter Sp. z o.o. It is Elgór+Hansen S.A.'s ambition to consistently develop its products and grow the scale of its operations on this new market.

Segment growth strategy

In 2023, the Power Engineering segment, represented by Elgór+Hansen S.A., was executing its new long-term growth strategy developed in 2022. The focus in the initial stage was on building a manufacturing base and organisational structure. The strategic plans for 2023 were to diversify and continually expand its product and service range beyond solutions tailored solely to the traditional customer base in the mining sector. Elgór+Hansen S.A. focused on the manufacturing and delivery of comprehensive, advanced engineering solutions for power distribution, energy efficiency improvement, energy visualisation and energy management systems. Solutions delivered in 2023 were dedicated mainly to the sectors of renewable energy generation and distribution as well as industrial energy. Consistent pursuit of the strategy objectives led to a substantial increase in sales of containerised substations for solar PV farm operators. In 2023, research and development efforts were also under way to expand the product portfolio.

In parallel to rolling out new renewable energy solutions, the segment will seek to maintain its leading position in the mining sector, which will ensure stable sources of funding for the new business ventures. Other key elements of Elgór+Hansen S.A.'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.A.'s products and services for the power engineering sector

Elgór+Hansen S.A. 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.

The company offers the manufacture and delivery of power equipment for 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 PV power plants. This product marked the beginning of Elgór+Hansen S.A.'s business transformation and shift towards the power engineering industry, including the renewable energy sector, successfully continued in 2023.

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. It 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.A.'s website at www.elgorhansen.com.

Distribution model and key customers

Elgór+Hansen S.A.'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 over 10% of the segment's revenue are the Jastrzębska Spółka Węglowa Group (approximately 27% of total sales), the PGG Group (approximately 13% share in revenue) and the KGHM Polska Miedź Group (approximately 10% share in revenue), while other significant customers include Lubelski Węgiel Bogdanka S.A., Południowy Koncern Węglowy S.A., Przedsiębiorstwo Górnicze Silesia Sp. z o.o. and Węglokoks Kraj S.A. In 2023, the customer portfolio was expanded to include entities purchasing containerised substations for PV farms. In 2023, revenue from the new business line reached about 14% of the company's total revenue. Thanks to cooperation with the FAMUR segment, Elgór+Hansen S.A.'s products are exported to major foreign companies extracting minerals 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.A.'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 chain

The 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 2023, the costs to procure certain components fell and the supply chains for necessary production materials stabilised.

R&D activities

In 2023, Elgór+Hansen S.A. was engaged in research and development on products targeting specifically the renewable energy industry. As a result of those efforts, the company extended its product range of containerised substations for utility-scale PV farms with a capacity of 3.15 MWp, accommodating both the requirements of its customers and district power utilities.

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. In addition, four medium-voltage frequency inverters for use in explosive atmospheres were put into production for a domestic customer. New functionalities were also used in the wireless pressure measurement system, spanning both hardware and software. Another group of R+D projects focused on the optimisation and unification of products in the segment's existing portfolio.

Financial performance of the Power Engineering segment

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Power Engineering segment's revenue	12 months to
(PLN million)	31 Dec 2023	31 Dec 2022
---	---	---
Products and services for mining industry	120	86
Industrial equipment	19	13
Products for power industry	23	1
Total revenue	162	100
less revenue from other segments	52	41
Segment's revenue from external customers	110	59

For 2023, the Power Engineering segment reported revenue of PLN 162 million, up by PLN 62 million (62%) year on year. Revenue from sale of products and services for the mining sector rose in 2023 by PLN 34 million year on year, to PLN 120 million. Revenue from sale of industrial equipment amounted to PLN 19 million, and sales to the power sector amounted to PLN 23 million.

Sales by key geographies in the Power Engineering segment

In 2023, domestic customers accounted for 99% of the Power Engineering segment's sales.

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Profitability of the Power Engineering segment	12 months to
(PLN million)	31 Dec 2023	31 Dec 2022
---	---	---
Gross profit	48	31
Operating profit	24	14
Depreciation and amortisation	11	10
EBITDA	35	24
EBITDA margin (%)	22%	24%

The Power Engineering segment's gross profit for 2023 was PLN 48 million, up by PLN 17 million (55%) year on year. The increase was chiefly attributable to the higher revenue from sale of products and services to the mining industry combined with first revenue streams from the renewable energy sector. Operating profit increased by PLN 10 million year on year, to PLN 24 million. EBITDA improved by PLN 11 million, to PLN 35 million, on the back of the revenue growth. The 2023 EBITDA margin was 22%.

UTILITY-SCALE SOLAR PV PROJECTS ("PV SEGMENT")

The Grenevia Group's PV segment is comprised of Projekt Solartechnik Group companies ("PST Group"/​"PST"), which specialise in the development and turnkey delivery of utility-scale solar PV projects on an EPC basis. This comprehensive service ranges from initial site acquisition or review, through project design and engineering, procurement of required components, to the construction and later operation and maintenance of the project facilities. The PST Group has an expert team dedicated to project development, a design and engineering studio, and its own resources for project construction, execution, operation, and maintenance, specifically for PV projects. It also offers proprietary installation systems for solar PV farms. Apart from developing its own projects and securing properties for potential future development, the PST Group acquires projects at various stages of development from third parties. It also sells completed PV projects (mainly solar PV farms) as well as green electricity under corporate power purchase agreements (cPPA). The segment's portfolio of solar PV farms, comprising both completed projects and those under construction, is managed through the investment fund Projekt Solartechnik Fund Fundusz Inwestycyjny Zamknięty (the "Fund"). Besides utility-scale solar PV projects, the PV segment plans to increase its engagement in wind farm development and energy storage projects, which reached 658 MW and 115 MW, respectively, in total capacity as at 31 March 2024. The Grenevia Group actively supports and participates in the development of renewable energy sources, a commitment illustrated by the growing asset base attributable to PV project and solar farm capex.

Market situation and key operations of the PV segment

During 2023, a steady increase was observed in demand for renewable energy in the markets where the Projekt Solartechnik Group is active or into which it plans to expand. According to the Energy Market Agency, the installed PV capacity in Poland reached approximately 17 GW by the end of December 2023, up from about 12.2 GW at the end of 2022. Growing interest was seen in projects at advanced stages of development despite an overall decline in the number of transactions. Investment in an advanced PV project may be a source of stable and predictable cash flows, which is an important consideration especially to institutional investors. Such projects are sought after by energy-intensive enterprises to be used for captive generation with a view to optimising costs and reducing their carbon footprints. On the other hand, the high cost of capital and legislative uncertainty make potential investors cautious in their decisions. The prices of solar farm components have stabilised and their availability has improved. Seeking to diversify risks and optimise costs, the PV segment keeps monitoring the availability and prices of components.

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Structure of total capacity of the projects and farms in the PV segment's portfolio	as at
Total capacity of PV projects and farms (MW)	31 Dec 2023	31 Dec 2022
---	---	---
Farms connected to the power grid	210	91
Farms under construction	85	124
Projects in the pipeline	154	65
Projects under development	3,727	~2,800
Estimated total capacity of portfolio projects at various stages of development in Poland	4,176	~3,080
Projects under development on the German market	525	-
Estimated total capacity of portfolio projects at various stages of development in Poland and abroad	4,701	~3,080

As at the end of December 2023, the estimated total capacity of portfolio projects at various stages of development on the Polish market grew by approximately 1.1 GW relative to year-end 2022, to some 4.2 GW. PV farms totalling 210 MW were connected to the power grid, with grid connection permits secured for PV projects with an aggregate capacity of approximately 1 GW. In its strategic push to diversify into wind farms and energy storage facilities, the segment obtained grid connection permits for projects with capacities of 228 MW for wind and 37 MW for energy storage.

To secure funding for PV farm construction, the PV segment entered into the following material financing agreements:

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•	June 2023 - a PLN 128 million loan agreement between Polski Fundusz Rozwoju (the Polish Development Fund) and a subsidiary of Projekt-Solartechnik S.A., repayable in December 2042, to finance the construction of 43 MW of PV farms at eight special purpose vehicles.
•	December 2023 - a PLN 71 million project finance facility agreement between Bank Polska Kasa Opieki S.A. and Finance PV 2 Sp. z o.o., a subsidiary of the Projekt-Solartechnik Group, finally repayable in December 2042, to finance the construction of 27 MW of PV farms at seven special purpose vehicles.

In 2023, the PV segment was actively offering for sale completed farms and projects, leading to the execution in mid-September 2023 of a preliminary agreement for the sale of shares in four project companies holding a portfolio of PV farm projects with a total capacity close to 50 MW to the KGHM Polska Miedź Group. Under the agreement, the PV segment companies are also to provide aftermarket services with respect to the solar PV farms sold in the transaction. As security, Projekt Solartechnik S.A. provided the investor with an irrevocable and unconditional surety guaranteeing the due and proper performance by Projekt Solartechnik Fundusz Inwestycyjny Zamknięty of its monetary obligations under the agreement up to a maximum amount of PLN 190 million. The surety will be valid until the earlier of the following dates: the day of full, irrevocable and unconditional settlement by the Seller of all its obligations under the agreement or 31 December 2027.

The transaction was effected in two stages:

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•	On 10 October 2023, a share sale agreement was concluded concerning shares in one project company sold for a total price (including the subrogation value) of approximately PLN 24 million.
•	On 29 February 2024, share sale agreements were concluded concerning shares in the three remaining project companies. The shares were sold for a total price (including the subrogation value) of approximately PLN 186 million. The payment was made on the date of the agreement so that the price and the subrogation value were set off against the advance payment whereupon the Investor settled the difference.

As some technical issues were identified on the PV projects, on 29 February 2024 the Seller and the Investor entered into an arrangement whereby the Seller agreed to rectify them within 13 months from the date of the arrangement, and to rectify any potential further defects if they arise or are identified by 31 December 2027, but not after the expiry of the maintenance agreement for each project.

The key operational developments on foreign markets included:

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•	The acquisition in Germany of pre-developed projects totalling 525 MW in capacity, some of them with binding grid connection commitments,
•	The establishment of subsidiaries: Projekt Solartechnik Romania S.R.L. in Bucharest, Projekt Solartechnik France SAS in Rouen, and PST Spain in Madrid.

Competitive environment

The 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.

The Projekt Solartechnik Group competes directly with the following companies, broken down by type of operations:

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•	Multi-utility companies - Luneos Sp. z o.o., Energa Obrót S.A., PGE S.A., Columbus S.A.
•	Companies specialising in utility-scale projects - Electrum Holding Sp. z o.o., Onde S.A., Photon Energy N.V., ML System S.A.
•	Development companies - R. Power S.A., PCWO S.A., BayWa.re Solar Systems Sp. z o.o., Polenergia S.A., Engie S.A., e-On S.A.

Segment growth strategy

In May 2023, the Projekt Solartechnik Group embraced a growth-oriented strategy for 2023-2027, which is anchored around several key operational pillars, each encompassing specific objectives set for achievement by 2027. These include:

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•	Development of RtB energy storage projects with a capacity of 400 MW
•	Development of RtB wind projects with a capacity of 170 MW
•	Increasing the segment's implementation capacity to enable construction of 500 MW of projects annually until 2027
•	Building an international portfolio comprising a total of 1,500 MW of RtB * projects
•	Expanding the domestic portfolio to comprise a total of 1,500 MW of RtB * projects
•	Building a portfolio of own solar PV farms (IPP) with a total capacity of 844 MW
•	Executing PPAs/​cPPAs for own farms
•	Forming an own electricity trading company
•	Sale of completed solar PV farms with a total capacity of 844 MW
•	Creating a financing model based primarily to external funding

* Including both projects intended for sale and those intended for addition to the Group's own portfolio (IPP).

Projekt Solartechnik Group's products and services for the utility-scale solar PV market

The PV segment companies operating under the PST Group 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:

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•	Utility-scale PV projects: solar farms (free-standing solar power stations) with a capacity of 1 MW or higher. The services encompass project development, design, engineering and construction, connection to the grid, and maintenance to ensure full operationality;
•	Project development: services provided by the Project Development Department include preparation and compilation of complete project documentation comprising documents confirming the title to the property (project site), environmental permits, zoning permit, grid connection permit, planning permission application, amended planning permission documents (if required), detailed design, and comprehensive as-built documentation (for solar PV, wind, and energy storage projects). The Group also conducts energy performance audits of buildings and provides supervision services at any stage of PV project development and delivery;
•	Sale or acquisition of completed projects or projects at various stages of development in order to find an appropriate solution for the customer;
•	Sale of electricity from the portfolio of completed solar PV farms;
•	Maintenance services for large-scale solar PV farms.

Distribution model and key customers

The 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. Customers accounting for over 10% of the segment's 12-month revenue in 2023 included Energa Obrót S.A. (approximately 63% share - revenue from sale of electricity).

Supply chain

With 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. Accordingly, in the Management Board's opinion, 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 PST 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 (CHUZHOU) CO. LTD and Trina Solar GmbH (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 S.A. and Elgór+Hansen S.A., 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 PST Group is able to source most PV components and other supplies directly from manufacturers. The continuity of supplies is secured by, among other measures, placing orders well in advance and/​or concluding framework agreements for the supply of strategic components (including PV modules, transformer substations, inverters, etc.).

R&D activities

The 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.

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Financial performance of the PV segment	12 months to
(PLN million)	31 Dec 2023	31 Dec 2022
---	---	---
Segment revenue	78	54
Gain on sale of solar PV farms classified as property, plant and equipment	7	-
Gross profit	39	10
Operating profit	-71	-42
Depreciation and amortisation	15	6
EBITDA	-56	-36

In 2023, the PV segment's revenue amounted to PLN 78 million, an increase of PLN 24 million (44%) year on year. All revenue was derived from the domestic market. Gain on the sale of solar PV farms classified as property, plant and equipment in 2023 was PLN 7 million. Operating profit and EBITDA for the 12 months ended 31 December 2023 came in at PLN 71 million and PLN 56 million, respectively. In 2023, the segment's operating profit was affected by impairment losses and write-downs on solar PV farms (both completed and under construction) totalling PLN 28 million and impairment losses on current assets of PLN 13 million.

BATTERY SYSTEMS FOR ELECTRIC MOBILITY AND ENERGY STORAGE ("E-MOBILITY SEGMENT")

In pursuing its growth strategy, Grenevia S.A. entered the e-mobility sector in 2022 by acquiring an ownership interest in Impact Clean Power Technology S.A. of Warsaw ("ICPT"), a leading manufacturer of innovative, tailor-made battery systems, mainly for buses, rail transport, specialised transport, and stationary energy storage. On 8 November 2022, an agreement was signed to purchase 18,475,729 shares in Impact, representing 51% of the acquiree's share capital and carrying approximately 59% of total voting rights at its general meeting (see Current Report No. 34/​2022 of 8 November 2022). The total value of the transaction was approximately PLN 280 million. The acquisition was financed with proceeds from the issue of green bonds in 2021. Since mid-November 2022, ICPT's financial results have been consolidated with the full method in the consolidated financial statements of the Grenevia Group.

ICPT's expertise in the manufacture of vehicle and industrial battery systems, supported by Grenevia S.A.'s financial and operational resources, will enable rapid scaleup of the business while building long-term value of Impact Clean Power Technology S.A. and the Grenevia Group on the promising market of industrial electric mobility and energy storage solutions. ICPT is an original equipment manufacturer (OEM) and Tier-1 supplier of e-bus battery systems to Europe's leading electric bus makers. ICPT products are also exported to North America, Asia and Australia, among other markets. The company runs its own research and development centre for energy storage technologies and battery systems dedicated to public and heavy transport. Impact Clean Power Technology S.A. also develops utility-scale energy storage solutions. ICPT's current manufacturing capacity transferred to GigafactoryX is about 0.6 GWh per year.

ICPT's business model leverages the economies of scale which are generated by the manufacture of customised products and their provision to dedicated customer groups. To accommodate the fast market growth and broaden its customer base, the company needs to significantly increase its annual production capacity, the goal it has achieved by building GigafactoryX, one of its key strategic projects. This large-scale manufacturing plant is 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 Clean Power Technology S.A.'s annual production capacity to more than 1.2 GWh in 2024, and to a minimum of 2 GWh up to 4 GWh in 2027, in line with demand growth. Investments in new production capacities are also intended to allow ICPT to branch out into related markets such as electric trucks, heavy industrial vehicles, and hydrogen-powered railway locomotives. Other growth initiatives pursued by ICPT 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.

Market situation and key operations of the E-mobility segment

The share of electric and hydrogen-powered vehicles in the urban bus market is growing rapidly, and the anticipated disbursement of funds under the National Recovery Plan/​other EU schemes should further stimulate the purchasing activity of Polish cities. A notable shift in the industry is expected following the proposed 2025 implementation of the EURO7 standard, targeting a reduction in exhaust emissions. However, this forthcoming standard presents technical challenges and entails increased production and maintenance costs for manufacturers of heavy transport vehicles, which are currently pivoting towards electric motors. The battery system alone is estimated to account for approximately 20-30% of the total production cost of an e-bus, and ICPT products have an expected lifespan of 10-15 years.

With respect to energy storage, a key piece of legislation is the EU's Renewable Energy Directive II (RED II), which mandates deployment of energy storage facilities in energy clusters until 2026 to expedite the growth of the renewable energy sector and reduce carbon emissions. ICPT has been vigorously expanding its portfolio of energy storage, railway support and off-highway machinery solutions.

Throughout 2023, ICPT focused on securing new framework agreements and orders for the supply of e-bus battery systems in 2024-2026. The company continued its business relationships with Solaris Bus & Coach Sp. z o.o. (SOLARIS)and with another customer, Alexander Dennis Limited (ADL), a global frontrunner in double-decker bus design and manufacture. Following product acceptance by the customer, serial production for ADL was launched. In a bid to ensure supply chain stability, a comprehensive market analysis of module and electronics suppliers was undertaken. The objective was to establish contracts with key suppliers while implementing a dual sourcing strategy. These efforts have substantially improved component availability across all procurement categories. Contracts were executed with Freyr Battery Norway AS and LG Energy Solution Wrocław Sp. z o.o., and supplies sourced from China were further diversified.

Further progress was made on the GigafactoryX project, including acquisition of real property, work to renovate and convert the buildings to bring them in line with the GigafactoryX requirements, in particular to enable fitting in a newly ordered line for semi-automated production of battery systems, as well as relocation of the old production line (0.6 GWh) and offices. The expenditure incurred on this project in 2023 totalled approximately PLN 87 million. The company transferred all its operations to the new location in the fourth quarter of 2023. The launch of GigafactoryX will increase the segment's production capacity from 0.6 GWh to 1.2 GWh, while contributing to improved quality of ICPT battery systems.

In 2023, two significant agreements were entered into with financial institutions:

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•	On 9 November 2023 - indefinite term factoring agreements with mFaktoring S.A. and Pekao Faktoring Sp. z o.o. with a limit of up to PLN 60 million per agreement.
•	On 11 December 2023 - facilities agreement with Pekao S.A. and mBank S.A. for the provision of a working capital facility of up to PLN 75 million and an investment facility of up to approximately EUR 22 million.

Competitive environment

ICPT's major competitors in the delivery of battery systems for public transport vehicles and industrial applications are European companies: BorgWarner eMobility Poland Sp. z o.o., Forsee Power Sp. z o.o. and BMZ Poland Sp. z o.o. There is also rapid market expansion of Chinese manufacturers of cells and entire vehicles: Contemporary Amperex Technology Co., Ltd. (CATL), BYD Company Limited and Yutong Bus Co., Ltd., which have entered the market for finished battery products and are beginning to directly compete with European companies.

Segment growth strategy

Battery systems for public transport vehicles, specialised trucks and heavy duty vehicles are produced in small lots (compared with the mass EV market). At the same time, battery technologies are evolving at a very quick pace. This is why most EV manufacturers rely on sub-suppliers instead of investing in their own production plants because of the small scale of their operations and the need to specialise. ICPT's business model leverages the economies of scale which are generated by the manufacture of customised products and their provision to dedicated customer groups. To accommodate the fast market growth and broaden its customer base, the company needs to significantly increase its annual production capacity, the goal it is implementing through the construction of GigafactoryX, one of its key strategic projects. This large-scale manufacturing plant is 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. Completion of the project will raise ICPT's annual production capacity to approximately 1.2 GWh in 2024, and to a minimum of 2 GWh up to 4 GWh in 2027, in line with demand growth. Investments in new production capacities will also allow ICPT to branch out into related markets such as electric trucks, heavy industrial vehicles, and hydrogen-powered railway locomotives.

ICPT's offering for the e-mobility sector

ICPT offers comprehensive, tailor-made battery systems to meet customer requirements. Cooperation with a 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 site. The company also offers a warranty and maintenance service for the entire life of a vehicle. Battery systems sold by ICPT are based on lithium-ion cells using several available cell technologies (NMC, LFP and LTO). Products manufactured by Impact Clean Power Technology S.A. 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. ICPT also offers stationary energy storage facilities for businesses, industry and utility power generators as well as for operation with renewable energy sources.

Distribution model and key customers

Impact's products and services are sold directly to end customers, mainly under framework agreements and based on individual orders from vehicle manufacturers. ICPT provides its solutions to companies such as Solaris Bus & Coach Sp. z o.o., Alexander Dennis Limited ("ADL"), J.M. Voith SE & Co. KG | VTA c/​o Voith Global Business Services EMEA GmbH (Voith), Kiepe Electric GmbH, Normet OY, Pepper Motion GmbH, Autosan Sp. z o.o., and Skoda Electric S.A.

Customers accounting for over 10% of the segment's 12-month revenue in 2023 were Solaris Bus & Coach Sp. z o.o. (approximately 59% of total revenue, relative to about 76% in 2022) and Alexander Dennis Limited (approximately 19% share in total revenue). There are no formal equity links between that entity and Impact Clean Power Technology S.A. In 2023, the company was significantly expanding its production capacities while engaging in commercial and marketing activities to attract new customers with large-volume contracts. This was expected to enable continued growth of the order portfolio while also diversifying the customer base. The market is still in its nascent stages. Most vehicle manufacturers are only beginning to build their supply chains, following the principle of 'two or more suppliers' of key components (including motive power batteries).

Supply chain

The key component of battery systems offered by ICPT are lithium-ion cells, which are imported from Japan and China, but are also sourced locally in Poland (from LG Energy Solution). In order to minimise the risk of supply chain disruptions and to maintain production continuity, ICPT seeks to secure two or more suppliers of key components for each project (dual sourcing) and, where feasible and economically viable, to maintain sufficiently high stock levels. Additionally, in 2022 ICPT announced the European Supply Chain strategy and in the coming years intends to rely to a larger extent on cells made in Europe. Reliance on European suppliers will improve the supply chain stability but may erode margins since Chinese producers supply their products at more competitive prices. As part of the strategy, in 2023 framework agreements were signed with new cell manufacturers based in Europe. Other components to be used in production are mostly sourced from Polish manufacturers.

R&D activities

The Research and Development (R&D) Department of Impact Clean Power Technology S.A. works on new technologies for the construction and management of lithium-ion batteries and develops new products. In 2023, the R&D Department initiated a new project to develop a battery and hydrogen powering system for rail vehicles.

Financial performance of the E-mobility segment

Since mid-November 2022, ICPT's financial results have been consolidated with the full method by the Grenevia Group, resulting in a lack of data comparability between 2022 and 2023.

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Financial performance of the E-mobility segment (PLN million)	12 months to 31 Dec 2023	1.5 months to 31 Dec 2022
Segment revenue	335	64
Gross profit	29	-
Operating profit/​(loss)	-46	-10
Depreciation and amortisation	23	3
EBITDA	-23	-7

Revenue generated by the E-mobility segment in 2023 amounted to PLN 335 million. Exports accounted for 32% of total revenue and consisted entirely of sales made in Europe. The segment's operating result and EBITDA were negative, at PLN -46 million and PLN -23 million, respectively. The lower-than-expected EBITDA level was due to postponement of product acceptance dates by customers and subsequent partial postponement of actual sales transactions until 2024, as well as a higher cost of key components, which were purchased in advance in 2022, driving up the costs of sales. The increase in the cost of components was a direct consequence of global market volatility experienced in 2022. Following the outbreak of the war in Ukraine and another wave of the Covid-19 pandemic in China, ICPT took steps to mitigate the risk of disrupted supply chains and a further rise in the prices of key components. A proactive decision was made to purchase in advance the cells and modules necessary to perform pre-existing contracts. The company's strategic aim was to ensure uninterrupted supplies to its customers, as well as to avoid the potential payment of damages that could result from any delays in fulfilling orders. As a result of these measures, ICPT successfully met all of its contractual obligations in a timely manner.

Cells are estimated to represent approximately 55-65% of the entire cost of battery systems, depending on the specific design. As components were procured at higher prices throughout 2022 and in early 2023 due to increased raw material prices, a short-term margin erosion is expected. From the second quarter of 2023, the purchase prices of modules fell in line with a decline in the prices of raw materials used for their production.

E-mobility segment's performance against forecasts

According to the segment's business plans updated in 2023, it expects to generate revenue of approximately PLN 1 billion per year over the next four to five years (from 2023). EBITDA is expected to return to positive territory (cumulatively from the year's beginning) in the fourth quarter of 2024. The market is rapidly expanding, with intensifying competition, particularly from Chinese manufacturers, squeezing margins. This may prolong the time required to reach the targeted EBITDA margin of approximately 7-8% beyond 2025. Capex and Opex projections, which have remained unchanged, amount to a total of approximately PLN 120 million, including about PLN 87 million spent in 2023. The Management Board of the Grenevia Group's E-mobility segment will monitor the macroeconomic and geopolitical situation and assess its impact on the segment's performance and ability to meet the forecast on an ongoing basis.

Factors which may affect the Group's performance in the next quarter and beyond

The 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 the 'Description of key risks and threats'.

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Factor	Description	Segments affected
Effective and efficient delivery of the strategy to transform into an organisation investing in the green transition	Further growth of the Grenevia Group requires significant efforts to diversify its revenue streams beyond the thermal coal mining industry. In 2021, the Grenevia Group updated its strategic directions with a view to transforming into an organisation that invests in green transition projects. The Group enters new sectors by acquiring majority interests in medium-sized enterprises with a well-established position in their respective industries. By the end of 2024, the share of revenue related to thermal coal mining in the Grenevia Group's total revenue is expected to decrease to approximately 30%.	The Group as a whole
	In 2021, the Group launched operations in the sector of utility-scale solar PV projects and in 2022 in the sectors of battery systems for industrial electric mobility and public transport, electricity transformation and transmission systems, as well as wind turbine gearbox repairs and refurbishment, with maintenance and installation services. In 2023, the Group's strategy was carried on, for instance by signing an agreement to purchase a 75.24% ownership interest in Total Wind PL Sp. z o.o. on 20 July 2023 (in the FAMUR segment) to step up its expansion in the wind power sector. The pace of the Group's diversification depends on efficient integration of new entities within the Group, the pace of their growth as well as on the Group's ability to identify new, suitable investment targets.
	The business diversification efforts and delivery of a strategy for accelerated growth (including foreign expansion) in new renewables-related business areas are driving growth of capital expenditure, especially in the short term.
Growing direct competition from China	Rising competition from Chinese companies, which puts a strain on margins or results in the loss of market share, thereby affecting potential revenues.	FAMUR
Tragic accidents at Kazakh mines and possible ownership changes	The occurrence in close succession of two accidents at Kazakh mines owned by Qazaqstan Investment Corporation (formerly ArcelorMittal Temirtau) (the FAMUR segment's main customer in Kazakhstan) is adversely affecting the local market, which may impact the operations of the subsidiary TOO FAMUR Kazakhstan.	FAMUR
	Ownership changes made in December 2023 at the Kazakh mines may postpone capital investment decisions and contractor selection.
Exit from the Russian market in the wake of the war in Ukraine	The FAMUR segment enjoyed a strong position on the Russian market, which had accounted for 20% of the segment's total annual revenue until 2022. After the outbreak of the war in Ukraine, FAMUR stopped bidding for new contracts for equipment deliveries and now only provides warranty services under contracts concluded in the pre-war period. In 2022, the Group also lost control over the Russian subsidiary OOO FAMUR (see Current Report No. 31/​2022 of 25 August 2022) and recognised an impairment loss for the entire value of its shareholding in OOO Famur. In March 2023, a process was initiated to divest the assets held in Russia. The transaction was effected in two stages: In October 2023, an assignment was made of Grenevia S.A.'s receivables from OOO Famur of PLN 15 million (paid in full). This was recognised under the 2023 finance income in the same amount on account of the use of impairment losses on those receivables recognised in previous periods. On 23 January 2024, an agreement was signed for the sale of 100% of shares in the Russian subsidiary OOO Famur for PLN 3 million, of which PLN 1.5 million has already been paid, with the balance contractually agreed to be settled in instalments by 28 February 2025. Gain on the sale of the shares of PLN 3 million will be recognised in the interim condensed financial statements of Grenevia S.A. and the Grenevia Group for the three months ended 31 March 2024. The result of those moves was the FAMUR segment's full exit from the Russian market.	FAMUR
	The FAMUR segment vigorously markets its products and services across global markets, including the US and Australia. However, in these geographies it faces strong competition from well-established local and global players as well as rapidly expanding Chinese manufacturers.
	These factors may lead to a significant decline in export revenue generated by the FAMUR segment relative to previously achieved levels.
Price pressure on completed PV farms following a drop in electricity prices amid elevated interest rates	A decline in electricity prices coupled with persistently high interest rates have weakened demand for completed PV farms, resulting in a downward pressure on the prices and erosion of margins on the sale of such farms. Some of the PV farm projects in the PV segment's portfolio were developed during a period of high component prices, which may exert short-term pressure on the segment's bottom line and profit margins.	PV
	However, looking ahead, declines in component prices over the medium and long term are anticipated to reduce construction costs for PV farms. Combined with growing demand on an expected fall of interest rates and a rise in electricity prices, this trend is poised to positively impact profit margins achieved by the segment.
Concentration of production of key components in China	At present, cells for battery systems, PV modules, inverters and electronic components are mainly manufactured in China. The Group is diversifying its procurement strategy to include European manufacturers in order to ensure stability of the supply chain. In the case of certain categories of components (including PV modules), geographic diversification of supply sources is possible to a very limited extent. Extremely competitive prices offered by Chinese producers relative to their European counterparts often necessitate a trade-off between profit margins and stability of supply.	PV E-mobility
	Mitigating the supply chain disruption risk limits the risk of delayed execution of orders. Because of their competitive advantage, Chinese manufacturers require prepayments before the start of production. This practice increases the level of working capital engaged, simultaneously escalating exposure to the risk of price fluctuations in the period between placing an order and final delivery.	Power Engineering
Lower number of connection permits issued and protracted process of connecting solar PV farms to the grids	A reduction in the number of connection permits issued for new PV projects and the lengthy process of connecting completed projects to the operators' grids may lead to a decrease in the availability of new farms and an extension in completion times. The falling number of sites for which connection permits can be obtained results in a steady increase of the cost of land for investment purposes.	PV
Global transition towards low-carbon economies	Expected structural decline in demand for thermal coal in the long term in Poland and globally. The EU's decarbonisation strategy and its implementation into the member states' legal systems, including the social agreement with the programme to phase out coal mines in Poland, will result in a significant decline in demand for thermal and coking coal in the long and medium term, potentially supressing demand for equipment and machinery offered by the Grenevia Group's FAMUR and Power Engineering segments as well as limiting available financing sources.	The Group as a whole
	On the other hand, the EU Climate Package (Fit For Fifty-Five) regulatory framework may boost demand in the Grenevia Group's segments unrelated to coal mining, e.g. by increasing demand from energy-intensive enterprises for renewable captive generation and pressure on a clean transition of public transport.
Limited availability of skilled workforce, rising pay expectations and increased mobility of employees	A rise in pay expectations on the Polish market due to limited availability of skilled workforce (especially technical staff), high turnover rates among highly skilled workers, and low unemployment levels in key regions of the Grenevia Group's operations may increase pay pressures and, consequently, operating expenses. Another factor is a steady decline in public expenditure on technical and vocational education, which will aggravate the existing problems with recruiting new staff, especially in the FAMUR segment.	Famur, Power Engineering
		E-mobility
Maintaining a flexible operating model and tight cost control	The fundamental principle underlying the Grenevia Group's operations is to maintain a flexible operating model enabling quick and effective adaptation of the cost and production base to current and expected demand shaped by the business cycle and structural shifts in the markets in which the Group operates.	The Group as a whole

Description of key risks and threats

General definition and classification of key risks at the Grenevia Group

The Grenevia Group conducts its business operations both domestically and internationally, navigating a multifaceted and dynamic market landscape where the outcomes of implemented measures remain uncertain, operating amidst risk conditions. We define risk as an uncertainty which is inherent in our business and which may result in both opportunities and threats to the achievement of our strategic objectives with an adverse impact on our 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:

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•	External risks, i.e. risks associated with the Group's socio-economic and legal environment;
•	Operational risks, i.e. risks arising from the Group's business activities;
•	Financial risks, i.e. risks associated with price, interest rate or foreign exchange rate movements, the Group's liquidity position, or failure by the Group's trading partners to fulfil their obligations under contracts with the Group;
•	Climate and environmental risks - related to the impact of our business on climate and the environment and the impact of climate change and changes in the environment on our business.

Risk management process at the Grenevia Group

Informed risk management is an integral component of the process of planning activities aimed at mitigating the likelihood of risk occurrence or minimising its impact to a level deemed acceptable by the organisation. The risk management process is structured taking into account the continuous nature of the process and recognising that the risks faced by the Grenevia Group may evolve over time. The controls put in place enable the identification of evolving risks and facilitate the implementation of appropriate actions in response to these changes.

The Group has a decentralised risk control and management structure in place, where responsibility for identifying key risks, planning mitigating measures, and responding to specific strategic, operational, trade, and financial risks is assigned at the segment level. 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, organisational, healthcare, safety, 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. Immediate preventive action is taken for key risks identified as high or very high. Periodic reviews of risks are conducted to assess their relevance and adequacy within the evolving operating environment of the Grenevia Group. This responsibility falls under the purview of the Risk Manager at the Group level, from the Risk Management Department established in June 2023. 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 1 January and 31 December 2023, 20 internal audits were carried out at the Grenevia Group, during which 64 instances of risk and inefficiency were identified and 73 post-audit recommendations were issued.

Risk management objectives

In 2023, Grenevia S.A. implemented a Risk Management Policy along with a Risk Management Procedure, providing a formal framework for risk management. The objectives identified by us, the achievement of which is supported by the risk management policy and procedure, are as follows:

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•	optimisation of financial performance, profitability, efficiency, liquidity and solvency, including in particular minimisation of potential losses,
•	supporting the delivery of the growth strategy and ensuring business continuity,
•	effective protection of the interests of our stakeholders,
•	ensuring proper protection of the health and life of employees and associates,
•	minimising the impact on climate and the environment and contributing to its natural, uninterrupted evolution,
•	building and promoting a culture of risk awareness and responsibility.

Role and responsibility within the Risk Management System

Roles and responsibilities within the risk management system are based on the model of three lines of defence, which involves establishing independent internal functions responsible for different aspects of the risk management process.

Each employee and independent contractor of the Grenevia Group is required to comply with the risk management policy and procedures and to act in accordance with applicable regulations, reporting any identified risk factors or instances of risk materialisation.

The heads of organisational units are responsible for implementing and ensuring effective operation of internal controls aimed at maintaining the risk exposure at a level deemed acceptable by the Management Boards of the companies, and for supervising the effectiveness of such controls.

The responsibility for establishing and operating an effective risk management system and for its oversight lies with the Management Board of each company.

The Management Board is supported in achieving this objective by the Risk Management Department at the Group level and by the risk management function, which is responsible for formulating internal guidelines and procedures for risk management, ensuring a consistent and uniform method of risk management across various organisational units, monitoring the levels of risk exposure reported by the heads of organisational units, as well as for reporting those levels and key risks to the Management Board and Supervisory Board. The risk management function is also tasked with initiating, with the support of other relevant organisational functions, educational activities focused on risk management throughout the organisation.

In fulfilling their responsibilities, the Management Boards of the companies receive support from the internal audit function, which conducts independent and systematic assessments of the risk management system and the operation of internal controls implemented in response to identified risks.

Risk management stages

Risk management process at the Grenevia Group encompasses the following stages:

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•	Risk Identification: identification and classification of potential risks;
•	Risk Assessment: estimating the impact and likelihood of risk using suitable techniques and tools, alongside expertise, experience, and knowledge of processes and the operational environment within which the Grenevia Group operates;
•	Minimising Risk Exposure: implementing measures to ensure conditions aligned with the approved risk appetite and risk tolerance with regard to each area of the organisation's business;
•	Monitoring and Reporting: establishing a system that ensures regular and effective reporting of risk exposures by relevant organisational units;
•	Promoting Risk Culture: implementing activities to foster a risk-aware culture among employees and independent contractors, including appropriate educational initiatives aimed at enhancing awareness and encouraging proactive responses to relevant risk factors that may affect them.

The table below presents the key risk categories identified within the Grenevia Group. 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.

The Grenevia Group applies a four-level risk assessment scale, categorised as very high, high, medium, and low.

In 2023, Grenevia S.A. adopted the Risk Management Policy and Risk Management Procedure, following which the risk assessment scale changed from a three-level to a four-level scale. As this change made it impossible to maintain data comparability, no information on changes in risk levels relative to the previous year is presented.

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Key external risks
Type of risk	Risk exposure
---	---
Risk of changes in macroeconomic trends	Very high
Geopolitical risk	High
Risk of material changes in the sectors where the Group operates, risk related to global competitors	Very high
Risk of technological shifts	Medium
Risk of significant changes in the regulatory environment	High
Risk of pandemic	Medium

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Key operational risks
Type of risk	Risk exposure
---	---
Risk related to the supply chain and management of procurement	Medium
Risk related to satisfying customer requirements	Medium
Risk of losing or having difficulties attracting key personnel	High
Risk of disruptions in manufacturing processes and provision of maintenance services	Medium
IT and cybersecurity risk	Medium
Risk of failure to comply with regulatory requirements	Low
Risk related to M&A transactions and acquiree integration	High
Risk of failure to meet contractual provisions	Medium
Project risk	Medium

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Key financial risks
Type of risk	Risk exposure
---	---
Credit risk	Medium
Liquidity risk	Low
Currency risk	Low
Interest rate risk	Medium
Price risk	Medium
Tax risk	Low

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Key climate and environmental risks
Type of risk	Risk exposure
---	---
Climate change risk	High
Environmental risk	Medium
Reputational risk	Low

Key risks and mitigation measures

Below is presented a description of the key external, operational, financial, climate and environmental risks that may affect the Grenevia Group, including the risk mitigation measures and potential consequences of risk materialisation. For information on the financial risks to which the Grenevia Group is exposed, see also Note 53 'Objectives and principles of financial risk management' to the consolidated financial statements of the Grenevia Group for 2023.

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Type of risk	Risk description	Risk mitigation measures
Risk of changes in macroeconomic trends	Risk of failure to keep pace with changes in the economic environment: the consequences of an economic slowdown often include lower order volumes, increased competition and margin erosion; strong economic growth drives higher order volumes, an increase in wages and the prices of services, energy and components.	Continuous optimisation of manufacturing processes and supply chain, combined with tight cost control. Flexible organisational structure and operational autonomy of the segments. Monitoring of project margins and cash flows. Maintaining an optimum leverage ratio. Business diversification.
Geopolitical risk	Risk related to political changes in the countries where Grenevia Group companies (and their trading partners) operate may result in various challenges, including business constraints, unexpected liabilities or charges, restrictions on cash transfers, loss of control of an entity (or loss of assets) caused by politically motivated decisions, or global supply chain disruptions.	Monitoring of political changes in the countries where Grenevia Group companies (and their trading partners) operate or where the Group offers its products, or which are being considered as potential new markets for the Group. Establishing a European supply chain.
Risk of material changes in the sectors where the Group operates, risk related to global competitors	Risk of changes in the competitive environment: an increase in the number of new players in the sector may cause a downward pressure on prices, structural decline in demand for certain products or services offered by the Group, and limited availability of key components for the Group's products. Consolidation of suppliers or customers may increase the costs of components or pressure on prices of the Grenevia Group's products.	Monitoring of changes in the industries in which the Group operates. Continuous improvement and expansion of the product offering, provision of comprehensive solutions, expansion and diversification of the customer base, business diversification.
Risk of technological shifts	Risk related to development or emergence of new technologies offering an economically viable alternative to existing solutions on the market.	Development of new and improvement of existing products, investment in R&D, monitoring of technology developments and customer needs and expectations.
Risk of significant changes in the regulatory environment	Risk related to promulgation of unfavourable legal regulations, in particular major amendments to the regulations applicable to renewables, tax or public procurement laws, imposing unexpected significant burdens on businesses. Imposition of ESG requirements.	Ongoing monitoring of the changes, comprehensive analysis of statutory interpretations and recent judicial decisions, and taking prompt action to ensure compliance with new legislation.
Risk of pandemic	Risk related to the declaration of a pandemic emergency leading to significant changes in the market environment directly affecting operating conditions of the Grenevia Group companies.	Monitoring of epidemic threat. Contingency plans in the event of risk materialisation.
Risk related to the supply chain and management of procurement	Riks of interrupted production processes and order fulfilment due to supply disruptions or delays, limited availability of key components or disruptions in supply chain logistics. High price volatility of certain components.	Evaluation and selection of business partners based on objective criteria such as quality, pricing and supply reliability. Switching to a European supply chain. Continuous monitoring and optimisation of stocks and placement of orders for key components in advance. Acquisition of new business partners and diversification of suppliers where possible. Incorporating adequate safeguards in contracts to minimise risk.
Risk related to satisfying customer requirements	Risk related to fulfilment of quality, regulatory and pricing requirements of customers. Failure to obtain the required certificates, failure to pass product quality tests, failure to fulfil orders on schedule, delayed response to a technological shift or change in customer expectations.	Investments in R&D, expansion of the product portfolio, offering dedicated solutions based on customer input, provision of aftermarket services. Building a more resilient supply chain and more efficient maintenance service.
Risk of losing or having difficulties attracting key personnel	Risk related to inability to retain or attract qualified personnel. Higher inflation translates into significant pay pressure.	Continuous mapping of competences and requirements, monitoring of the labour market in terms of remuneration levels and qualifications, ongoing adjustments to incentive schemes, training (including talent development), and vertical and horizontal employee development paths consistent with the Group's expansion.
Risk of disruptions in manufacturing processes and provision of maintenance services	Risk of unforeseen major disruptions to the manufacturing processes or provision of services as a result of extreme weather conditions, fires, pandemics, civil unrest, limited supplies of electricity, gas, etc.	Development of adequate crisis management procedures and business continuity plans and their ongoing review and updating as required.
IT and cybersecurity risk	Risk related to failure of or unauthorised access to the Group companies' IT infrastructure and/​or systems, leakage of confidential information, theft of intellectual property, loss of the operational continuity of key IT systems and services.	Regular measures to ensure the security of IT infrastructure and systems. Implementation of various procedural, organisational and technical safeguards.
Risk of failure to comply with regulatory requirements	Risk of violation of generally applicable laws or regulations, including company law as applicable to listed companies, anti-corruption, conflict of interest, personal data protection, and fair competition regulations, as well as sanction regimes.	Implementation of internal procedures on countering corruption and bribery, fair competition, personal data protection, access to confidential information, supplier due diligence, implementation of adequate technical and organisational measures in those areas. Periodic employee training on proper conduct and identification of potential legal violations within the organisation.
Risk related to M&A transactions and acquiree integration	Risk related to difficulties in closing an acquisition, integrating the acquiree, or obtaining the expected synergies.	Ongoing review of acquisition plans, development of an acquiree integration plan at the due diligence stage, ensuring adequate and properly qualified personnel, engagement of reputable external advisers.
Risk of failure to meet contractual provisions	Risk related to failure to meet contractual provisions concerning specific parameters of the contract or failure to perform the contract.	Close cooperation with the customer, process optimisation, complaint management and monitoring, legal consultations on contractual provisions.
Project risk	Risk related, among other things, to inappropriate estimation of project execution costs, underestimated project schedules, erroneous assumptions, incomplete execution of the project scope.	Continuous monitoring of activities and potential project delays, systematic review of costs against the planned budget, ongoing assessment of progress.
Credit risk	Risk of a trade partner's failure to meet its contractual obligations, including as a result of such credit events as the trade partner's insolvency, partial payment of amounts due, or material delays in payment.	Checking the creditworthiness of trade partners and using security instruments (in the form of letters of credit, bank guarantees, insurance of receivables, factoring arrangements).
Liquidity risk	Risk of inability to meet liabilities when due.	Managing the payment and collection periods, as well as the system of advance payments, inventory optimisation, maintaining an adequate level of external financing sources, including long-term ones.
Currency risk	Risk related to sharp exchange rate movements, causing uncertainty as to the level of future cash flows and financial results.	Ongoing monitoring and analysis of currency exposure, forward transactions and price revision clauses in the event of exchange rate movements.
Interest rate risk	Risk related to significant and sharp interest rate movements that may affect the Group's profit or loss.	Ongoing monitoring of the Monetary Policy Council's decisions and negotiating the terms of conditions of credit facility agreements. Interest rate swaps.
Price risk	Risk related to significant movements in the prices of raw and other materials, particularly steel, copper, steel products, PV modules, battery cells, and electronic components, causing increased uncertainty as to the possibility of achieving the target financial result.	Negotiating prices or placing framework purchase orders, diversifying supply sources and service providers, maintaining stocks of materials, looking for savings (optimising labour intensity, searching for substitutes). Incorporating price indexation provisions in sales contracts where possible.
Tax risk	Risk related to incorrect or late fulfilment of the required tax liabilities.	Support from tax advisors, operating in accordance with applicable laws, monitoring of changes in tax regulations.
Climate change risk	Risk related to tightening of the EU climate policy, as well as stricter environmental requirements resulting from climate change. Potential acceleration of global trends to phase out carbon emitting energy generation sources. Changes in regulations, administrative fees, charges for using natural resources such as water, energy or raw materials, or emission fees.	Adoption of a strategy for entry into the renewable energy sector, development of the PV, E-mobility, and Power Engineering segments. Deployment of PV systems and energy storage facilities at selected production plants. Ongoing monitoring of changes in climate regulations and policies.
Environmental risk	Risk related to the environmental impact of the business, production waste generation, particulate matter and oxide emissions.	Adopting a strategy to enter the renewable energy sector and conducting business activities that impact the environment in accordance with the principles of sustainable development. Implementation of a sustainable development strategy
Reputational risk	Risk of potential impact on the Group's revenue of negative publicity connected with its operations in certain segments or failure to follow market trends related to environmental and climate protection.	Business diversification, implementation of a sustainable development strategy, continuous monitoring of internal and external threats and the media. Implementation of a uniform Responsible Communication Strategy across all segments.

Overview of the Grenevia Group's operations in 2023

Discussion of financial highlights

This discussion of financial results for 2023 should be read in conjunction with the audited consolidated financial statements of the Grenevia Group and the audited financial statements of Grenevia S.A. for 2023, 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 discussion and analysis 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 RESULTS

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Grenevia Group's revenue	12 months to
segments' revenue from external customers	31 Dec 2023	31 Dec 2022 *
---	---	---
(PLN million)
FAMUR solutions for the mining and wind power sectors	1,114	1,115
Power Engineering	110	59
PV	78	54
E-mobility **	335	64
Other activities	7	4
Grenevia Group's revenue	1,644	1,296
* In order to ensure comparability, the operating segments' figures for 2022 have been restated to match the Group's business structure as at 31 December 2023.
** E-mobility segment's revenue has been consolidated since mid-November 2022.

The Grenevia Group's revenue for 2023 rose by 27% year on year, to PLN 1,644 million. The increase in revenue is primarily the result of consolidating the E-mobility segment for the full financial year (PLN +271 million) and the growth in revenue from external customers: PLN +51 million in the Power Engineering segment and PLN +24 million in the PV segment.

Sales by key geographies

In 2023, export sales accounted for approximately 14% of the Grenevia Group's total revenue, down by 25pp year on year. The decline was mainly attributable to lower export sales of the FAMUR segment, partly offset by export sales recorded by the E-mobility segment.

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Key profitability indicators	12 months
(PLN million)	31 Dec 2023	31 Dec 2022
---	---	---
Gross profit	581	469
Operating profit	216	257
Net profit from continuing operations	144	192
Net profit (loss)	144	120

Gross profit

Gross profit for 2023 was PLN 581 million, having increased by PLN 112 million (24%) year on year, chiefly on the back of higher gross profit figures reported by each segment. Gross profit margin was 35%, compared with 34% in 2022.

Operating profit and EBITDA

EBITDA 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.

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Operating profit and EBITDA	12 months
(PLN million)	31 Dec 2023	31 Dec 2022
---	---	---
Operating profit	216	257
Depreciation and amortisation	198	149
EBITDA	414	406

Operating profit for 2023 reached PLN 216 million, having decreased by PLN 41 million (16%) year on year. The drop followed mainly from lower operating profit reported by the PV and E-mobility segments, partly offset by higher operating profits in the FAMUR and Power Engineering segments.

EBITDA for 2023 increased by PLN 8 million relative to 2022, to PLN 414 million. EBITDA as a percentage of revenue fell by 6pp relative to the comparative period, to 25%. The decline in profitability is a consequence of negative EBITDA delivered by the PV and E-mobility segments, partially offset by higher profitability of the FAMUR segment.

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Net finance income/​costs	12 months to
(PLN million)	31 Dec 2023	31 Dec 2022
---	---	---
Finance income	58	60
Finance costs	81	77
Net finance costs	-23	-17
Gains (losses) on allowance for expected credit losses	8	11
Gain (loss) on loss of control of subsidiary	2	-
Net finance income/​costs	-13	-6

Net finance income/​costs for 2023 were negative, at PLN -13 million, down by PLN 7 million year on year, mainly as a result of an increase in net interest expense. Also, in the comparative period, a PLN 11 million gain on allowance for expected credit losses was recognised, compared with a gain of PLN 8 million in the reporting period. The PLN 2 million gain on loss of control of a subsidiary is attributable to the sale of 100% of shares in ENSON Sp. z o.o. to an entity outside the Group.

Tax

The effective tax rate for 2023 was 29%, while the nominal tax rate was 19%. This was mainly a consequence of the receipt, on 27 June 2023, of the decision issued by the Head of the National Tax Administration to impose an additional corporate income tax liability of PLN 8 million for 2017. Grenevia S.A. paid the liability, together with PLN 3 million in interest accrued thereon as at the payment date. For a reconciliation of the effective and nominal tax rates, see Note 25 to the consolidated financial statements of the Grenevia Group for 2023.

Net profit from continuing operations and discontinued operations

Net profit from continuing operations in 2023 was PLN 144 million, down by PLN 48 million (25%) year on year. The decrease in profit from continuing operations was attributable to lower operating profit and higher net finance costs.

In 2023, no result on discontinued operations was recognised, while in 2022 a PLN 72 million loss on discontinued operations was reported. This was mainly attributable to the recognition of a loss of PLN 58 million on loss of control of the Russian subsidiary OOO FAMUR. For detailed information on discontinued operations, see Note 14 to the consolidated financial statements of the Grenevia Group for 2023.

Net profit

In the 12 months ended 31 December 2023, net profit from continuing operations was PLN 144 million, having increased by PLN 24 million (20%) from PLN 120 million the year before. The net profit margin for 2023 was 9%, with no change relative to 2022.

Description and assessment of factors and non-recurring events with bearing on the Group's net profit or loss

In 2023, a material non-recurring event which reduced the Group's financial result was the decision of the Head of the National Tax Administration to impose an additional corporate income tax liability for 2017 in the amount of PLN 8 million plus interest, which reached PLN 3 million as at the payment date. For detailed information, see Note 4 to the consolidated financial statements of the Grenevia Group for 2023.

A material non-recurring event with bearing on net profit for 2022 was the recognition of a PLN 58 million loss in the three months to 30 June 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.

Major customers and suppliers of the Grenevia Group

Major customers of the Grenevia Group, accounting for more than 10% of the Group's revenue in 2023, included the PGG Group (20% share in revenue), the JSW Group (17% share in revenue), the Węglokoks Group (12% share in revenue), and Solaris Bus & Coach Sp. z o.o. (12% share in revenue).

One major supplier of the Grenevia Group, which accounted for more than 10% of the Group's costs in 2023, was TWS GmbH (13% share in cost of sales).

ASSETS AND FINANCIAL RESOURCES MANAGEMENT

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Analysis of consolidated assets, equity and liabilities, including from the perspective of the Grenevia Group's liquidity position	As at
(PLN million)	31 Dec 2023	31 Dec 2022
---	---	---
Non-current assets	1,587	788
Current assets	2,202	2,882
Total assets	3,789	3,670
Equity	2,193	2,095
Non-current liabilities	966	659
Current liabilities	630	916

Assets

In 2023, assets rose by PLN 119 million, with non-current assets up by PLN 799 million and current assets down by PLN 680 million. The shift in the structure of current assets relative to non-current assets was mainly attributable to reclassification of some solar PV farms in the PV segment. In 2022, in line with the adopted business model, solar PV farms were classified by the PV segment under inventories in view of their planned quick sale. However, given the market conditions affecting the current market prices of PV farms and electricity selling prices, the liquidity of market sales of completed farms declined, farms held in the PV segment's portfolio came online and commenced electricity production, and the PV segment began to derive economic benefits from electricity sales. Accordingly, a decision was made to reclassify, as of 1 October 2023, farms which have commenced electricity production from inventories to property, plant and equipment and to begin their depreciation to ensure the matching of revenue with costs and to reflect the wear and tear of those assets. Projects and farms under development/​construction continue to be recognised under inventories. The PV segment's inventories of PLN 810 million as at 31 December 2022 included mainly PLN 238 million in completed solar PV farms. As of 1 October 2023, farms connected to the grid with a total value of PLN 398 million were reclassified from inventories to property, plant and equipment (of which PLN 238 million was attributable to farms connected in 2022, and PLN 160 million - to farms connected in the period 1 January-30 September 2023). In the three months ended 31 December 2023, farms connected to the grid with a value of PLN 167 million were transferred to property, plant and equipment. As at 31 December 2023, the total carrying amount of farms connected to the grid and recognised under non-current assets was PLN 524 million, net of a depreciation charge (PLN 6 million), an impairment loss (PLN 17 million), and a decrease resulting from sale (PLN 18 million).

Liabilities

In 2023, total liabilities increased by PLN 21 million, to PLN 1,596 million. Non-current liabilities increased by PLN 307 million, to PLN 966 million, mainly as a result of higher financial liabilities under borrowings and leases in the PV and E-mobility segments, partially offset by the early redemption of all Series B notes with a total nominal value of PLN 200 million.

Current liabilities fell by PLN 286 million, to PLN 630 million, mainly as a result of a decrease in current financial liabilities in the PV segment, offset by an increase in trade payables.

ANALYSIS OF MAJOR EQUITY INVESTMENTS OF THE GROUP IN 2023

In 2023, the Grenevia Group executed the following significant transactions:

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•	To step up the FAMUR segment's expansion in the wind power sector, on 20 July 2023 Grenevia S.A. acquired a 75.24% ownership interest in Total Wind PL Sp. z o.o. for approximately EUR 4.5 million.
•	On 10 October 2023, a share sale agreement was concluded whereby shares in one project company holding a portfolio of PV farms were sold to the KGHM Polska Miedź Group for a total price (including the subrogation value) of approximately PLN 24 million.

For a description of non-current and current financial assets, see Notes 32 and 35 to the consolidated financial statements of the Grenevia Group for 2023.

FINANCIAL RESOURCES AND LIQUIDITY POSITION

The 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.

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Cash flows	12 months to
(PLN million)	31 Dec 2023	31 Dec 2022
---	---	---
Cash flows from operating activities	622	-8
Cash flows from investing activities	-682	-462
Cash flows from financing activities	-266	87

Positive cash flows from operating activities of PLN 622 million in 2023 were mainly attributable to EBITDA of PLN 414 million, a decrease in inventories (PLN +208 million), a positive change in receivables (PLN +23 million) and liabilities (PLN +58 million). Income tax paid was PLN 83 million. Other adjustments reconciling EBITDA to operating cash flow amounted to PLN 2 million.

Negative cash flows from investing activities, of PLN -682 million, were primarily attributable to expenditure on the construction of solar PV farms in the PV segment, the E-mobility segment's GigafactoryX project, expenditure on shearer loaders and roadheaders leased by mines and the acquisition of shares in Total Wind PL Sp. z o.o.

Cash flows from financing activities, of PLN -266 million, comprise mainly the net effect of proceeds from and repayments of borrowings and other debt instruments (PLN -157 million), interest paid (PLN -94 million) and payment of lease liabilities (PLN -14 million). In December 2023, Series B notes with a nominal value of PLN 200 million were redeemed early, together with interest due to the noteholders.

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.

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Net debt	As at
(PLN million)	31 Dec 2023	31 Dec 2022
---	---	---
Non-current financial liabilities	924	629
Bank and non-bank borrowings	403	-
Bonds and notes	400	599
Leases	121	30
Current financial liabilities	58	437
Bank and non-bank borrowings	29	392
Bonds and notes	17	6
Debt sale	-	28
Leases	12	11
Gross debt	982	1,066
Less cash and cash equivalents	-610	-939
Net debt	372	127
EBITDA	414	406
Net debt/​EBITDA	0.9x	0.3x

As at 31 December 2023, net debt stood at PLN 372 million, having increased by PLN 245 million on year-end 2022. The increase was partly attributable to a PLN 73 million increase in lease liabilities following the recognition of right-of-use assets representing land leases for the construction of solar PV farms. Other factors contributing to the net debt growth included mainly investments in the development and construction of new solar PV farms and expenditure on the construction of GigafactoryX in the E-mobility segment.

Net debt broken down by the Grenevia Group's segments

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As at 31 Dec 2023 (PLN million)	Non-current financial liabilities	Current financial liabilities	Gross debt	Less cash and cash equivalents	Net debt
FAMUR	30	21	51	52	-1
PV	1,205	64	1,269	126	1,143
Power Engineering	5	2	7	33	-26
E-mobility	82	18	100	26	74
Other activities	410	6	416	373	43
Intersegment eliminations	-808	-53	-861	-	-861
Total	924	58	982	610	372

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As at 31 Dec 2022 (PLN million)	Non-current financial liabilities	Current financial liabilities	Gross debt	Less cash and cash equivalents	Net debt
FAMUR	17	8	25	129	-104
PV	10	802	812	116	696
Power Engineering	3	1	4	23	-19
E-mobility	-	52	52	7	45
Other activities	606	7	613	664	-51
Intersegment eliminations	-7	-433	-440	-	-440
Total	629	437	1,066	939	127

Details of loan and credit facility agreements concluded and terminated in the financial year, including at least the loan and credit facility amount, type and level of interest rate, currency and maturity date

In 2023, the Grenevia Group entered into the following material agreements and annexes to agreements with banks:

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Date	Type of agreement	Borrower	Financing provider	Amount	Interest rate	Maturity date
23 Jan 2023	Annex extending the credit facility agreement	Grenevia S.A.	Bank Gospodarstwa Krajowego	PLN 40 million	WIBOR plus a margin	30 Nov 2023
10 Feb 2023	Annex extending the credit facility agreement	Elgór+Hansen S.A.	PKO Bank Polski S.A.	PLN 15 million	WIBOR plus a margin	3 Mar 2025
24 Feb 2023	Annex extending the credit facility agreement	Grenevia S.A.	PKO Bank Polski S.A.	PLN 40 million	WIBOR plus a margin	3 Mar 2025
12 Jul 2023	Credit facility agreement	Elgór+Hansen S.A.	BNP Paribas S.A.	PLN 15 million	WIBOR plus a margin	28 Feb 2025
30 Oct 2023	Annex extending the credit facility agreement	Grenevia S.A.	BNP Paribas S.A.	PLN 50 million	WIBOR plus a margin	30 Nov 2024
1 Dec 2023	Annex extending the credit facility agreement	Grenevia S.A.	PEKAO S.A.	PLN 100 million	WIBOR plus a margin	30 Nov 2024
11 Dec 2023	Project finance credit facility agreement	PV segment subsidiary (Finance PV 2 Sp. z o.o.)	PEKAO S.A.	PLN 71 million	WIBOR plus a margin	31 Dec 2042
11 Dec 2023	"Credit Facilities Agreement"	IMPACT Clean Power Technology S.A.	PEKAO S.A.	EUR 22 million *	EURIBOR plus a margin	31 Dec 2034
			mBank S.A.	PLN 75 million **	WIBOR plus a margin	31 Dec 2026
					EURIBOR plus a margin

* Term credit facility for financing or refinancing of capital expenditure

** A revolving credit facility bearing interest at the benchmark rate level for the respective currency; an option to extend the availability period until 31 December 2028 (the actual repayment date will depend on whether specific conditions defined in the Credit Facilities Agreement are met).

In addition to the above agreements, in 2023 the Grenevia Group entered into the following material financial agreements:

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•	13 June 2023 - a PLN 128 million loan agreement was signed between Finance PV 4 Sp. z o.o. (a subsidiary of the Projekt Solartechnik Group) and PFR Fundusz Inwestycyjny Fundusz Inwestycyjny Zamknięty Aktywów Niepublicznych represented by Polski Fundusz Rozwoju S.A. (the Polish Development Fund). The final repayment date was set for 20 December 2042 (interest rate: WIBOR + a margin).
•	9 November 2023 - factoring agreements with a limit of up to PLN 60 million per agreement were signed by Impact Clean Power Technology S.A. with mFaktoring S.A. and Pekao Faktoring Sp. z o.o. The interest rates have been set at the benchmark rate level for the respective currency (PLN: WIBOR; EUR: Estr, EURIBOR; USD: SOFR) plus a margin. Other significant terms of the agreements do not differ from those commonly applied on the market. The agreements have been made for an indefinite period.
•	In the 12 months ended 31 December 2023, the minority investors of Impact Clean Power Technology S.A. advanced loans totalling approximately EUR 11 million to the company, maturing at or before the end of 2023 (EURIBOR + a margin). As at the end of the year, Impact Clean Power Technology S.A. had no outstanding liabilities under the loans.

Details of material loans advanced in the financial year, including loans advanced by Grenevia S.A. to its related parties, including at least the loan amount, type and level of interest rate, currency and maturity date

In the 12 months ended 31 December 2023, Grenevia S.A. advanced material loans to the following subsidiaries:

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•	Impact Clean Power Technology S.A. - loans totalling approximately EUR 22 million maturing at or before the end of 2023 (interest rate: EURIBOR + a margin). By the reporting date, the loans were repaid in full.
•	PV segment companies - further to the investment agreement amended by an annex of 15 June 2023, in order to ensure sufficient funds to implement the PST Group's Strategy, Grenevia S.A. undertook to provide, directly or through its subsidiaries, PST Group companies with financing in the form of loans and other debt instruments up to a total amount of PLN 1 billion. Within the abovementioned limit, PST Group companies restructured the loans advanced by the Company, and currently there are two revolving loan limits for a total amount of PLN 1 billion. The financing matures on 31 December 2024 but may be extended for further periods of the implementation of the PST Group's Strategy. Interest rate: 3M WIBOR + a margin for PLN-denominated debt and 3M EURIBOR + a margin for EUR-denominated debt. As at the end of 2023, the limit utilisation was PLN 824 million.

Sureties and guarantees provided and received in the financial year, including to Grenevia's related parties, and contingent liabilities

As security for the agreement for the sale of shares in four project companies holding a portfolio of solar PV farm projects, signed on 12 September 2023 by Projekt Solartechnik Fundusz Inwestycyjny Zamknięty (the Seller), Projekt Solartechnik S.A. (a company of the Grenevia Group's PV segment) provided an irrevocable and unconditional surety to KGHM Polska Miedź S.A. (the Buyer) guaranteeing due and proper performance by the Seller of its monetary obligations arising under the sale agreement, for a maximum amount of PLN 190 million. The surety will be valid until the earlier of the following dates: the day of full, irrevocable and unconditional settlement by the Seller of all its obligations under the agreement or 31 December 2027.

Other than that, in the 12 months ended 31 December 2023, neither the Company nor any of its subsidiaries provided any sureties or guarantees equivalent to 10% or more of Grenevia S.A.'s equity to the Company's related parties or entities. For detailed information on contingent liabilities, see Note 50 to the consolidated financial statements of the Grenevia Group for 2023 and Note 39 to the financial statements of Grenevia S.A. for 2023.

Security issues at the Grenevia Group in 2023

In the 12 months ended 31 December 2023, Grenevia S.A. did not issue any securities. In 2023, related parties of Grenevia S.A. issued the following notes not covered by the Grenevia S.A. Note Programme:

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•	March 2023 - the subsidiary Finance PV 1 S.A. issued Series A notes with a nominal value of EUR 2.7 million. The notes bear interest at a fixed rate of 8.5% per annum, applicable from the subscription date to one year from the date of execution of the note indenture. Beyond this period, the interest rate increases to 10.0% per annum until the notes' maturity. The interest is payable on each anniversary of the date of execution of the note indenture and on the maturity date. The issue date of Series A notes is 30 March 2023. The redemption date is 7 September 2024. Funds raised from the notes will be allocated to financing the construction of solar PV farms under a project finance model.
•	March 2023 - the subsidiary Finance PV 1 S.A. issued Series B notes with a nominal value of EUR 4.8 million. The notes bear interest at a fixed rate of 8.5% per annum, applicable from the subscription date to one year from the date of execution of the note indenture. Beyond this period, the interest rate increases to 10.0% per annum until the notes' maturity. The interest is payable on each anniversary of the date of execution of the note indenture and on the maturity date. The issue date of Series B notes is 30 March 2023. The redemption date is 7 September 2024. Funds raised from the notes will be allocated to financing the construction of solar PV farms under a project finance model.

In 2015, a Note Programme was launched at Grenevia S.A., which was subsequently modified in August 2021. The key terms and conditions of the modified Programme are as follows:

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•	The limit on the aggregate nominal value of notes issued under the Programme is PLN 1 billion and is revolving (the nominal value per note is PLN 1,000).
•	The Programme has an indefinite term, subject to the limit on the aggregate nominal value of notes to be issued.
•	Under the Programme, the Company may issue a single or multiple series of notes.
•	Such notes will be bearer notes and will be issued as secured or unsecured notes within the meaning of the Act on Bonds of 15 January 2015 (as amended).
•	The terms of any series of notes may stipulate that the notes will be admitted to trading and listed in an Alternative Trading System operated by the Warsaw Stock Exchange.
•	The detailed parameters of each note series will be determined separately by relevant resolutions of the Management Board of Grenevia S.A.

Under the Programme, Grenevia S.A. issued the following notes:

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•	Series A notes with a total nominal value of PLN 108 million, which were redeemed at maturity in January 2020;
•	Series B notes with a total nominal value of PLN 200 million, originally maturing on 27 June 2024. Grenevia S.A. redeemed all those notes early on 27 December 2023 (see Current Report No. 21/​2023 of 22 November 2023).
•	Series C notes with a total nominal value of PLN 400 million, maturing on 3 November 2026. Series C notes bear interest at a floating rate based on 6M WIBOR (Warsaw Interbank Offered Rate) rate plus a margin of 290 basis points per annum for each interest period. Noteholders have the right to demand early redemption of Series C notes. The events triggering the noteholders' right to demand early redemption of Series C notes and the early redemption procedure for Series C notes are specified in the Terms and Conditions of Series C notes. Starting from (and including) the third interest period and every six months at the end of each interest period, Grenevia S.A. will have the right to send an early redemption notice for all or part of Series C notes, enabling it to redeem the notes on the terms set out in the Terms and Conditions of Series C Notes (see Current Report No. 50/​2021 of 12 October 2021). Series C notes have been admitted to trading in the Catalyst alternative trading system operated by the Warsaw Stock Exchange (see Current Report No. 51/​2021 of 26 October 2021). Allocation of issue proceeds is described in the Directors' Report on the operations of the Grenevia Group and Grenevia S.A. in 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 S.A. to address those threats

The Grenevia Group places the highest priority on ensuring financial stability and diversified financing sources. Agreements signed with banks require the Grenevia Group to maintain selected ratios within a specified range. The ratios are monitored on an ongoing basis at the level of the operating segments and the parent in order to satisfy commitments toward the financing institutions. A consistent and conservative financial policy coupled with a flexible business model and, in particular, effective cost management, allow the Grenevia Group to maintain a satisfactory liquidity position.

As at 31 December 2023, total liabilities under borrowings, other debt instruments and leases exceeded net cash by PLN 372 million. As at 31 December 2023, the total limit of undrawn working capital facilities (excluding project finance arrangements) available to the Grenevia Group was PLN 460 million. The Management Board of Grenevia S.A. is of the opinion that the Group's financial resources are managed in a sound manner.

Derivatives

As the Grenevia Group operates globally, it is exposed to unfavourable fluctuations in foreign exchange rates. The Group companies where the level of exposure to currency risk is material hold appropriate treasury limits with financial institutions, enabling them to pursue specific hedging policies. Natural hedging and forward hedges are used where possible. Potentially adverse changes in interest rates are hedged, depending on the needs of each segment, with interest rate swaps (IRS). For a summary of derivative instruments of the Grenevia Group, see Note 52 to the consolidated financial statements of the Grenevia Group for 2023 and Note 41 to the financial statements of Grenevia S.A. for 2023.

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. To the best of Grenevia S.A. Management Board's knowledge, there are currently no identified threats to Grenevia S.A.'s and the Group companies' ability to execute their investment plans for at least the next year.

Performance against forecasts

The Management Board of Grenevia S.A. did not publish any financial forecasts of Grenevia S.A. or the Grenevia Group for 2023.

Related-party transactions

In the 12 months ended 31 December 2023, there were no material related-party transactions other than on an arms' length basis. For detailed information on related party transactions, see Note 54 to the consolidated financial statements of the Grenevia Group for 2023 and Note 43 to the financial statements of Grenevia S.A. for 2023.

Workforce

In 2023, the Grenevia Group had an average headcount of 2,560, compared with 2,453 in 2022. Employee costs at the Grenevia Group in 2023 and 2022 amounted to PLN 336 million and PLN 268 million, respectively.

Material claims, disputes, penalties and proceedings

For information on material litigation risks to the Grenevia Group companies, see Note 50 to the consolidated financial statements of the Grenevia Group for 2023. For information on proceedings related to tax settlements, see Note 4 to the consolidated financial statements of the Grenevia Group for 2023.

In the 12 months ended 31 December 2023 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 date

For a description of events subsequent to the reporting date, see Note 59 to the consolidated financial statements of the Grenevia Group for 2023 and Note 48 to the financial statements of Grenevia S.A. for 2023.

Financial highlights of the Grenevia Group for the last five years

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	12 months to 31 December
(PLN million)	2023	2022	2021	2020	2019
---	---	---	---	---	---
Selected data from the statement of profit or loss
Revenue	1,644	1,296	1,018	1,139	2,165
Operating profit	216	257	123	239	289
Profit from continuing operations	144	192	22	188	252
Net profit	144	120	25	190	249

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(PLN million)	As at 31 December
Selected items of the statement of financial position
Current assets	2,202	2,882	2,621	1,718	2,039
Non-current assets	1,587	788	599	774	936
Total assets	3,789	3,670	3,220	2,492	2,975
Current liabilities	630	916	669	342	921
Non-current liabilities	966	659	670	468	526
Equity	2,193	2,095	1,881	1,682	1,511

Grenevia shares on the WSE

Grenevia shares on the Warsaw Stock Exchange

In 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 31 December 2023, 574.7 million 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.

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Key information on Grenevia S.A. shares
Name	Grenevia S.A.
Ticker	GEA
ISIN	PLFAMUR00012
First listing	August 2006
Number of shares outstanding	574,680,673
Sector	Electromechanical
Main indices	mWIG40, WIG, WIG140, WIG-Poland, mWIG40TR, WIG-ESG, CEEplus

SHARE PRICE

The chart below shows Grenevia S.A. stock price change vs mWIG40 over the last five years.

The table below shows the cumulative rate of return on investment in Grenevia S.A. shares (excluding dividends) from the end of 2018 to the end of 2023 relative to the rate of return on the mWIG40 index.

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	rate of return at year end (%)
Base value at the end of 2018=100	2018	2019	2020	2021	2022	2023
---	---	---	---	---	---	---
Grenevia	100	55	42	62	61	62
mWIG40	100	100	102	135	106	148

The table below presents Grenevia S.A. stock price movements in each quarter of 2023.

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	2023
Price per share (PLN)	Q1	Q2	Q3	Q4
---	---	---	---	---
Low	3.26	3.12	2.91	2.69
High	3.91	3.89	3.66	3.55

DIVIDEND

On 27 June 2023, the General Meeting of Grenevia S.A. resolved to allocate the entire net profit earned in the financial year ended 31 December 2022, of PLN 252 million, to the Company's statutory reserve funds.

Dividend policy

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. The table below presents cash dividends paid by Grenevia S.A. for 2018-2023.

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PLN per share	2018	2019	2020	2021	2022	2023
Cash dividend per share	0.44	0.53	-	-	-	-

INVESTOR RELATIONS AT THE GRENEVIA GROUP

In 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 representatives of the Company and the Group segments, regularly hold numerous meetings with investors and analysts, both at home and abroad, and participate in industry investor conferences. The activities undertaken by the Investor Relations team in its contacts with the investor community aim primarily to facilitate reliable assessment of the financial standing of Grenevia S.A. and its operating segments and effective progress against 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 semi-annual conferences for investors and analysts (face-to-face or online conference calls) to present the financial and operating results of the Grenevia Group. Three earnings conferences and approximately 25 investor meetings were held in 2023.

In order to provide easy, quick and fair access to information on the Grenevia Group, the Company runs a corporate website 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 Group

General information

Grenevia S.A. (formerly: FAMUR S.A.), with its registered office at ul. Al. Roździeńskiego 1a, 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").

Principal business - manufacture of machinery for mining, quarrying and construction (PKD 28.92.Z). 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 certain changes to the Company's organisational structure. Since January 2022, Grenevia S.A.'s resources have been divided into two areas: the FAMUR operating segment (which prepares its own set of accounts) and the corporate management holding segment. 2023 did not see any material changes in the organisational structure of Grenevia S.A.

By the issue date of this Directors' Report on the operations of the Grenevia Group in 2023, the following organisational changes took place at Grenevia S.A.: On 22 January 2024, the Management Board passed a resolution to establish a new business area within the FAMUR segment - the Famur Gearo Branch, responsible for developing and offering comprehensive wind energy solutions and for manufacturing transmissions/​gearboxes for various industrial applications, in line with the Grenevia Group's strategy. Consequently, the Management Board of Grenevia S.A. decided to change the name Grenevia S.A. Famur Machinery Katowice Branch to Grenevia S.A. FAMUR Gearo Katowice Branch as of 1 February 2024 and to establish five new organisational units: Sales, Sales Support, R&D, Wind Maintenance and Project Management.

Company branches:

Grenevia S.A. FAMUR Katowice Branch, ul. Armii Krajowej 51, 40-698 Katowice, Poland

Grenevia S.A. FAMUR Gearo Katowice Branch, ul. Kościuszki 245, 40-608 Katowice, Poland

Grenevia S.A. FAMUR Mining Katowice Branch, ul. Boya Żeleńskiego 107, 40-750 Katowice, Poland

Grenevia S.A. FAMUR Nowomag Nowy Sącz Branch, ul. Jana Pawła II 27, 33-300 Nowy Sącz, Poland

Grenevia S.A. FAMUR Glinik Gorlice Branch, ul. Michalusa 1, 38-300 Gorlice, Poland

Organisational and equity links

ORGANISATIONAL AND EQUITY LINKS, INCLUDING MAJOR INVESTMENTS IN SECURITIES, FINANCIAL INSTRUMENTS, INTANGIBLE ASSETS AND REAL PROPERTY

TDJ Equity I Sp. z o.o. is the parent of Grenevia S.A. and TDJ S.A. is the ultimate parent.

For information on equity interests in subsidiaries, associates and other entities held by Grenevia S.A. and not intended for sale in the near term, see Note 22 to the financial statements of Grenevia S.A. for 2023. For information on intangible assets and property, see Notes 28, 29 and 31, respectively, to the consolidated financial statements of the Grenevia Group for 2023.

Discussion of financial highlights

GRENEVIA S.A. 'S FINANCIAL HIGHLIGHTS

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	12 months to
(PLN million)	31 Dec 2023	31 Dec 2022
---	---	---
Revenue	1,016	1,166
Operating profit	298	284
Depreciation and amortisation	162	143
EBITDA	460	427
Net profit	311	252

Grenevia S.A.'s revenue for 2023 amounted to PLN 1,016 million, having decreased by PLN 150 million (13%) from PLN 1,166 million in 2022. The share of export revenue declined by 30pp year on year, reaching 5%, primarily due to the completion of contracts in the US, Indonesia and China, as well as the decision to stop bidding for new contracts in the Russian market.

Despite the decline in revenue, operating profit rose by PLN 14 million (5%), to PLN 298 million. EBITDA improved by PLN 33 million year on year, to PLN 460 million. EBITDA margin was 45%, compared with 37% in 2022, an improvement of 8pp. The higher EBITDA margin resulted in a net profit of PLN 311 million for 2023. Net profit as a percentage of revenue was 31% (relative to 22% in 2022).

MATERIAL NON-RECURRING EVENTS

In 2023, a material non-recurring event which reduced Grenevia S.A.'s financial result was the decision of the Head of the National Tax Administration to impose an additional corporate income tax liability for 2017 in the amount of PLN 8 million plus interest, which reached PLN 3 million as at the payment date. For detailed information, see Note 4 to the financial statements of Grenevia S.A. for 2023.

WORKFORCE AND REMUNERATION

In 2023, Grenevia S.A. had the average headcount of 1,532 FTEs (1,562 FTEs in 2022), with employment costs at PLN 189 million (PLN 183 million in 2022).

Assets and financial resources management

ANALYSIS OF ASSETS, EQUITY AND LIABILITIES

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	As at
(PLN million)	31 Dec 2023	31 Dec 2022
---	---	---
Non-current assets	1,691	1,098
Current assets	912	1,535
Total assets	2,603	2,633
Equity	1,948	1,658
Non-current liabilities	449	636
Current liabilities	206	339

In 2023, total assets fell by PLN 30 million, to PLN 2,603 million. Current assets went down to PLN 912 million, i.e. by PLN 623 million, mainly as a result of repayment of loans advanced by Grenevia S.A. to Projekt Solartechnik S.A. (PST). Over the same period, non-current assets increased by PLN 593 million, reflecting mainly a loan advanced to PST, aligned with the Grenevia Group's strategy to transform the Group from a leading manufacturer of mining machinery into an active investor in the energy transition, intended for the PST Group to achieve financial stability and expand the scale of its operations. The loan matures on 31 December 2024 but may be extended for further periods of the implementation of the PST Group's Strategy. As Grenevia S.A. intends to support the new business segments driving its transformation towards environmental sustainability, it is possible that the financing will be extended. For this reason, the loan is disclosed in the non-current section of the statement of financial position.

Non-current liabilities decreased by PLN 187 million, to PLN 449 million, chiefly on account of the early redemption of PLN 200 million of Series B notes. Current liabilities fell over the period by PLN 133 million, reflecting mainly a decrease in short-term trade payables.

ASSESSMENT OF FINANCIAL RESOURCES MANAGEMENT

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	As at
(PLN million)	31 Dec 2023	31 Dec 2022
---	---	---
Non-current financial liabilities	431	615
Bonds and notes	400	599
Leases	31	16
Current financial liabilities	26	14
Bank and non-bank borrowings	1	1
Bonds and notes	5	6
Leases	20	7
Gross debt	457	629
Less cash and cash equivalents	-365	-498
Net debt	92	131

As at 31 December 2023, liabilities under borrowings, other debt instruments and leases exceeded net cash by PLN 92 million. Total non-current and current financial liabilities fell by PLN 172 million, to PLN 457 million. Cash balance went down by PLN 133 million, to PLN 365 million.

CONTINGENT LIABILITIES

Contingent liabilities of Grenevia S.A. are mainly attributable to sureties and guarantees provided. For a description of contingent liabilities, see Note 39 to the financial statements of Grenevia S.A. for 2023.

Corporate governance at Grenevia S.A.

Shareholding structure

SHAREHOLDERS 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 REPORT

To the best of Grenevia S.A. Management Board's knowledge, and based on data from the most recent Annual General Meeting of 27 June 2023 (see Current Report No. 17/​2023 of 27 June 2023), the shareholding structure of Grenevia S.A. as at the issue date of this full-year Report for 2023 was as follows:

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Shareholder	Number of shares held	Number of voting rights	Equity interest
TDJ Equity I Sp. z o.o.	290,728,459	290,728,459	50.59%
Nationale-Nederlanden OFE *	57,468,000	57,468,000	10.00%
Allianz OFE **	55,513,805	55,513,805	9.66%
Grenevia S.A. ***	4,116	4,116	0.00%
Other shareholders ****	170,966,293	170,966,293	29.75%
Total	574,680,673	574,680,673	100%

* Aggregate value for accounts of OFE and DFE funds managed by NN PTE.

** Aggregate value for accounts of OFE 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 nine months ended 30 September 2023 and the date of issue of this full-year Report, there were no changes in the Grenevia S.A. shareholding structure.

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 KNOWLEDGE

According to the Company's knowledge, no Grenevia S.A. shares were held by the Company's management or supervisory personnel as at 31 December 2023 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 Grenevia S.A.

SIGNIFICANT HOLDINGS AND SPECIAL CONTROL RIGHTS

For details of the shareholding structure as at 31 December 2023 and as at the date of the most recent Annual General Meeting of the Company, see the 'Shareholding structure' section. 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 EXERCISED

The 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:

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1.	Appointment and removal from office of Supervisory Board members;
2.	Determination of the rules of remuneration of Supervisory Board members;
3.	Determination of the amounts of remuneration for the Supervisory Board members delegated to individually perform certain supervisory functions on a permanent basis.

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:

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1.

The date, time and place of the Meeting and a detailed agenda for the Meeting;

2.

Precise description of procedures for participating in the General Meeting and exercising voting rights, including in particular information on:

a)	a shareholder's right to request that certain items be placed on the agenda of the General Meeting;
b)	a shareholder's right to propose draft resolutions on matters which have been placed or are to be
c)	placed on the agenda prior to the General Meeting;
d)	a shareholder's right to propose draft resolutions on matters which have been placed on the agenda
e)	during the General Meeting;
f)	voting through a proxy, including information on the proxy voting forms, and the manner of notifying the Company of appointment of a proxy using electronic means of communication;
g)	the possibility and manner of participation in the General Meeting using electronic means of communication;
h)	information on how to take the floor at the General Meeting using electronic communication means;
i)	voting by postal ballot or by using electronic means of communication;
j)	a shareholder's right to ask questions concerning items placed on the agenda of the General Meeting;

3.

the record date for participation in the General Meeting referred to in Art. 4061 of the Commercial Companies Code;

4.

information that only persons being the Company's shareholders as at the record date for participation in the

5.

General Meeting may attend the Meeting;

6.

information on where and how a person entitled to attend the General Meeting may access a complete set of documents to be presented to the Meeting, as well as draft resolutions or, if no resolutions are to be voted on, comments from the Management Board or the Supervisory Board on matters which have been placed on the agenda or are to be placed on the agenda before the date of the Meeting;

7.

address of the website on which information on the Meeting will be made available.

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. 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 the 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 ASSOCIATION

Any 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, subject to Art. 431.4 and Art. 455.5 of the Commercial Companies Code. 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 3 April 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 16 February 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 31 December 2023 and the issue date of this Report

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Full name	Position
Beata Zawiszowska	President of the Management Board

Beata Zawiszowska has worked for the GRENEVIA (formerly FAMUR) Group since 2002. From 2005 to 30 June 2023, she served as Vice President of the Management Board of GRENEVIA S.A. (formerly FAMUR S.A.). In that capacity she was responsible for the Group's finance function, including securing financing for the Group's operations. Ms Zawiszowska also served on the management and supervisory bodies of other companies of the GRENEVIA (formerly FAMUR) Group.

Changes in the Management Board composition in 2023

On 29 May 2023, the following persons submitted reasoned letters of resignation from their respective positions on the Management Board, effective from the end of the day on 30 June 2023:

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	Mirosław Bendzera, President of the Management Board
	Dawid Gruszczyk, Vice President of the Management Board, Sales
	Tomasz Jakubowski, Vice President of the Management Board, Chief Operating Officer, Underground

Citing reasons for their resignations, these persons referred directly to their planned assumption of duties on the Management Board of the newly established subsidiary of Grenevia S.A. - FAMUR S.A., whose principal activity consists in the day-to-day management and development of the FAMUR segment (solutions for the mining and wind power sectors). On 29 May 2023, the Supervisory Board of Grenevia S.A. passed a resolution to appoint Beata Zawiszowska as President of the Management Board of Grenevia S.A., with effect from 1 July 2023.

The purpose of the changes was to streamline the Group's organisational structure and allow the above-named managers to focus on the task of scaling up and diversifying one of the business areas strategic to the Group's further development, namely the FAMUR Segment. The adjustments aligned with the new strategic directions of Grenevia S.A. as announced in May 2021. Their primary objective was to transform the Group into an organisation investing in green transition projects and opportunities. As a result of these changes streamlining the Group's organisational structure, Grenevia S.A. - as a holding company - has based its operations on four business segments ('PV', 'E-mobility', 'Power Engineering', and 'FAMUR'). Their growth and day-to-day management are overseen by the management boards of the portfolio companies dedicated to representing each segment.

SUPERVISORY BOARD OF GRENEVIA S.A. AND ITS COMMITTEES

Composition of the Supervisory Board as at 31 December 2023 and the issue date of this Report

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Full name	Position
Tomasz Domogała	Chairman of the Supervisory Board
Jacek Leonkiewicz	Member of the Supervisory Board
Adam Toborek	Member of the Supervisory Board
Robert Rogowski	Member of the Supervisory Board
Michał Ciszek	Member of the Supervisory Board
Dorota Wyjadłowska *	Member of the Supervisory Board
Tomasz Kruk *	Member of the Supervisory Board

* 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 Committee

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•	Michał Ciszek
•	Adam Toborek
•	Jacek Leonkiewicz

Nomination and Remuneration Committee

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•	Michał Ciszek
•	Adam Toborek
•	Jacek Leonkiewicz

Audit Committee:

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•	Tomasz Kruk, Chairman of the Audit Committee
•	Dorota Wyjadłowska
•	Jacek Leonkiewicz

Independent Supervisory Board Members:

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•	Tomasz Kruk
•	Dorota Wyjadłowska

Tomasz Domogała has a university degree. He is a graduate of the AGH University of Science and Technology of Kraków (with an M.Sc.Eng. degree 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. Tomasz Domogała holds indirectly a controlling interest in Grenevia 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.

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. His professional career began with J.P. Morgan investment bank in London, 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 initial public offering and accelerated bookbuild of PKP Cargo. From January 2015 to March 2016 he was CEO of PKP Intercity S.A. In 2016-2022, he served as managing partner at TDJ S.A., in charge of corporate supervision and investment strategy in the equity area. Since January 2023, he has served as President of TDJ S.A. Management Board. Mr Leonkiewicz served on the Supervisory Boards of Spedkoks, PKP Energetyka, TK Telekom, and PKP Cargo. At present, he is a member of 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 PROJEKT-SOLARTECHNIK S.A.

Adam Toborek holds a university degree. He completed the Master of Business Administration programme at the Kozminski University in Warsaw. He has also completed a range 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). He started his professional career in BRADO companies, where he held various roles, including that of President of the Management Board of Z.M. BRADO 2 S.A. He also served as 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. With NiUW Glinik in 2015-2017, initially as Vice President (in 2015) and then President of that company's Management Board (from 2016). From 2017, he was Vice President of FAMUR S.A.'s Longwall Systems Segment, responsible for sales, and from January 2018 - Vice President of the FAMUR S.A. Management Board; from 1 January 2019 to 21 June 2021, he served as Vice President of the Management Board, Underground Segment Export Sales. Currently, he is a member of the Management Boards of the following companies: PV CZERNIEWICE 1 Sp. z o.o., PV CZERNIEWICE 2 Sp. z o.o., ADVANCED PRODUCTION TECHNOLOGY 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., and TDJ Equity VI Sp. z o.o. He also serves 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., ADVANCED PRODUCTION TECHNOLOGY Sp. z o.o., FPM S.A., Zamet S.A., Narzędzia i Urządzenia Wiertnicze GLINIK Sp. z o.o., and PGO S.A.

Robert Rogowski has a university degree. He graduated from the University of Warmia and Mazury in Olsztyn (Master of Science in Mechanical Engineering) and completed postgraduate studies in business management at the Kotarbiński University of Information Technology and Management in Olsztyn, and 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 member of the Supervisory Board of Indykpol Brand Sp. z o.o. He has been involved with the TDJ Group since 2017. In 2017 and 2018, he sat on the Supervisory Boards of FAMUR S.A. and ZAMET S.A. Currently, he is a member of the Management Boards of TDJ S.A. and INVEST TDJ ESTATE Sp. z o.o. He also 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., and PME S.A. ZAMET S.A. He is a member of the Management Board of TDJ ESTATE Sp. z o.o. and INVEST TDJ ESTATE Sp. z o.o.

Michał Ciszek studied at the Faculty of Historical and Pedagogical Sciences at the University of Wrocław. He is a psychologist and holds an MBA degree from Kozminski University. He also studied at the Kellog School of Management at Northwestern University. His professional career began in 2003, at the HR Department of Kredyt Bank. In 2005, he became a manager at the HR Department of FM Logistic Poland. In 2007, he became HR and Administration Director at Eurocash Group. In 2012, he was HR Director and Project Management Office Director at Lekkerland Poland. He then joined Circle K, where he served as Senior Director - Staff Functions until 2015. Later, as Director Retail - Sales & Operations, he was responsible for the Eastern Poland region. He served as Circle K Poland's CEO and managing director between 2017 and 2023. He currently serves on the Supervisory Boards of: EDINA VETCARE GROUP S.A., IMPACT CLEAN POWER TECHNOLOGY S.A., TEAMTECHNIK PRODUCTION TECHNOLOGY Sp. z o.o., ELGÓR+HANSEN S.A., FAMUR S.A., PGO S.A., FPM S.A., Narzędzia i Urządzenia Wiertnicze GLINIK Sp. z o.o., and ZAMET S.A. Mr Ciszek is a member of the Management Board of TDJ S.A. and TDJ EQUITY I Sp. z o.o.

Dorota Wyjadłowska has a university degree. She 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 passed the state exam for a tax advisor and was entered in the list of tax advisors. The professional career of Ms Dorota Wyjadłowska is as follows:

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•	Since 2001 - a licensed tax advisor and owner of the tax advisory firm Kancelaria Doradztwa Podatkowego Dorota Wyjadłowska
•	Since 2015 - Logline Sp. z o.o. Vice President of the Management Board - finance, taxes
•	2004-2011 Spółka Doradztwa Podatkowego KDT Sp. z o.o. Majority shareholder, President of the Management Board
•	2008-2010 Equus S.A. Member of the Management Board - finance, taxes
•	1993-2001 Kraków Tax Chamber, Department of Tax Office Oversight

Tomasz Kruk has a university degree. Graduate of 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, Mr Kruk 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, including:

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•	2018 Risk Manager (TFI Energia)
•	2017-2018 Compliance and Risk Management Manager (PFR Ventures)
•	2016 Business and other management consultancy (The Raven Group)
•	2016 Management Board Proxy for the pre-pack project (Kopex-Famago)
•	2015/​2016 Member of the Supervisory Board (Polska Wytwórnia Papierów Wartościowych S.A.)
•	2015 Quality and Operational Risk Officer - Member of the Management Board (PKP Polskie Linie Kolejowe)
•	2012-2015 Managing Director for Audit and Control (the PKP Group)
•	2012-2015 Member of the Board of Investors of Fundusz Własności Pracowniczej PKP (Legg Mason TFI/​ING TFI)
•	2008-2012 Compliance and Risk Control Department Director, Internal Auditor (PKO TFI)
•	2006-2008 Director - Compliance Officer (PZU TFI)
•	2003-2005 Compliance & Financial Risk Manager (CA IB Group)
•	2001-2005 Compliance Officer (BPH TFI)

Tomasz Kruk has completed the following courses and training programmes:

Private Equity and Venture Capital (Università Bocconi, 2018), ICA International Diploma in Governance, Risk and Compliance (2017), diploma certifying the passing of the examination for candidates to supervisory boards of state-owned companies (2015), Internal Audit (EY, 2013), Prince2 Foundation Examination (Infovide-Matrix, 2010), Certified Internal Auditor (IIA, 2008), Compliance/​AML Workshops (Credit Suisse, 2008), Preparing Financial Statements, Managerial Accounting, Managing People (BPP Professional Education, 2006).

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 2023

On 27 June 2023, pursuant to resolutions of the Annual General Meeting of Grenevia S.A., the following persons were appointed as members of the Supervisory Board for the new term of office:

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• Tomasz Domogała	• Jacek Leonkiewicz	• Adam Toborek	• Robert Rogowski
• Michał Ciszek	• Dorota Wyjadłowska	• Tomasz Kruk

On 27 June 2023, i.e. the date of the Annual General Meeting of Grenevia S.A., Mr Czesław Kisiel ceased to be a member of the Supervisory Board of Grenevia S.A. following the expiry of his mandate.

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 their 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 was 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 was 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 was 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 (the amendment to the Articles of Association was registered on 29 September 2011). In exercising the authorisation referred to in the preceding sentences, the Management Board has the right to decide 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:

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a)	Carry out the share capital increase within the authorised capital limit through one or more issues and to assign consecutive series designations to those issues;
b)	Determine the issue price, subject to the Supervisory Board's approval;
c)	With the Supervisory Board's approval, disapply in whole or in part the existing shareholders' pre-emptive rights with respect to shares issued within the authorised share capital limit;
d)	Decide to deliver the shares of a given issue in exchange for a cash contribution, a non-cash contribution or any combination of a cash and non-cash contribution; the delivery of shares in exchange for a non-cash contribution may also be carried out under Art. 447 1 of the Commercial Companies Code, but will in each case require the Supervisory Board's approval;
e)	Take steps with a view to registering shares issued within the authorised capital limit with the Central Securities Depository of Poland as well as any other steps necessary to have the shares admitted and introduced to trading on the regulated market operated by the Warsaw Stock Exchange.

The General Meeting authorised the Company's Management Board to take any steps necessary to have shares issued by the Company within the authorised capital limit listed on the Warsaw Stock Exchange; this authorisation covers in particular:

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a)	Signing an agreement with the Central Securities Depository of Poland on conversion of shares issued by the Company within the authorised capital limit into book-entry form and their registration in the relevant register;
b)	Filing of applications or notifications with the competent authorities and institutions in relation to the introduction and admission of shares issued by the Company within the authorised capital limit to trading on the regulated market operated by the Warsaw Stock Exchange.

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.

On 23 October 2023, the Company's Management Board passed a resolution, approved by the Supervisory Board, to amend the Rules of Procedure for the Management Board of Grenevia S.A. by updating their provisions, which included changing the Company's business name from Famur S.A. to Grenevia S.A., as well as clarifying the provisions concerning the manner of voting to reflect relevant amendments to the Commercial Companies Code concerning the voting on resolutions and taking minutes of Management Board meetings. A provision allowing Management Board members to sign resolutions with qualified signatures was also added. 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 personnel

The 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 29 June 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 55 to the consolidated financial statements of the Grenevia Group for 2023.

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 2023, 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; and 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 27 June 2023, by way of Resolution No. 18, the Annual General Meeting of Grenevia S.A. gave a positive opinion on the Supervisory Board's Report on the Remuneration of Members of the Management Board and Supervisory Board of GRENEVIA S.A. for 2022. 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 benefits

Grenevia S.A. does not operate any additional old age and disability pension schemes or early retirement programmes for members of the Management or Supervisory Board. 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 paid in the financial year 2023, in accordance with Section 70.7.17 of the Regulation on current and periodic information.

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	PLN '000 (gross)
A	B	C	D	E	F
---	---	---	---	---	---
Member of the Management Board	Total remuneration, awards or benefits paid by Grenevia S.A. in 2023 (remuneration + bonuses)	Separate amounts of bonuses for 2022 paid by Grenevia S.A. in the financial year 2023 (bonus *)	Separate amounts of bonuses for 2023 paid by Grenevia S.A. in the financial year 2023 (bonus *)	Total amount of remuneration and awards received for service on governing bodies of subsidiaries ***	Total amount of remuneration, awards or benefits paid by Grenevia S.A. and subordinated entities in 2023 **
---	---	---	---	---	---
Mirosław Bendzera	1,367	888	-	19	1,386
Beata Zawiszowska	1,714	703	500	177	1,891
Dawid Gruszczyk	979	628	36	15	994
Tomasz Jakubowski	981	636	30	15	996
Total	5,041	2,855	566	226	5,267

* 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 18 October 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 paid in the financial year 2023, in accordance with Section 70.7.17 of the Regulation on current and periodic information

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	PLN '000 (gross)
A	B	C	D	E	F
---	---	---	---	---	---
Member of the Supervisory Board	Total remuneration, awards or benefits paid by Grenevia S.A. in 2023 (remuneration + bonuses)	Separate amounts of bonuses for 2022 paid by Grenevia S.A. in the financial year 2023 (bonus *)	Separate amounts of bonuses for 2023 paid by Grenevia S.A. in the financial year 2023 (bonus *)	Total amount of remuneration and awards received for service on governing bodies of subsidiaries ***	Total amount of remuneration, awards or benefits paid by Grenevia S.A. and subordinated entities in 2023 **
---	---	---	---	---	---
Tomasz Domogała	6	-	-	-	6
Czesław Kisiel	3	-	-	-	3
Jacek Leonkiewicz	12	-	-	6	18
Dorota Wyjadłowska	12	-	-	12	24
Tomasz Kruk	12	-	-	12	24
Robert Rogowski	6	-	-	5	11
Michał Ciszek	3	-	-	3	6
Adam Toborek	6	-	-	26	32
Total	60	-	-	64	124

* 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 POLICY

Grenevia S.A. has a diversity policy in place, which requires taking measures to:

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•	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);
•	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.

DESCRIPTION OF THE INTERNAL CONTROL SYSTEM

The key features of the internal control and risk management systems used at the Company in the process of preparing financial statements are as follows:

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•

Transactions are carried out on the basis of general or specific authorisations by the management staff (depending on the importance of a document);

•

Documents are checked, accepted and described by persons responsible both for the subject matter they relate to and for the accounting aspects;

•

Each material transaction is duly reviewed by the legal department to ensure that it is properly accounted for in accordance with the accounting and tax laws;

•

Appropriate control procedures put in place by the management are used, including:

•	Checking the correctness of accounting entries by responsible persons;
•	Controlling the computer programs and the IT environment by assigning care of the programs and the IT environment to IT specialists and firms;
•	Maintaining and reviewing subsidiary ledger accounts and statements of ledger transactions and account balances;
•	Approving and verifying documents;
•	Comparing actual performance against targets and analysis of the results;
•	All transactions and other events are promptly recorded in correct amounts, in appropriate accounts and in proper accounting periods so as to enable the preparation of financial statements in accordance with the adopted financial reporting policy;
•	Access to assets and records is only possible with the management's authorisation;
•	Assets disclosed in accounting records are compared against physical assets in line with the provisions of the accounting laws; appropriate measures are taken whenever any discrepancies are found;
•	A uniform accounting policy has been developed for all the Group companies;
•	The accounting policy is updated as needed so that it is always in line with the current accounting laws.

At the beginning of January 2019, an Internal Audit Department was established at the Company.

In June 2023, the Company additionally established a Risk Management Department. Other than that, the Company did not create any internal audit units, and all internal audit, internal control, risk management and compliance functions were performed within the Internal Audit, Risk Management, Corporate Controlling and Legal Departments.

AUDIT COMMITTEE

The 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 11 May 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 2023, the Audit Committee consisted of:

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•	Tomasz Kruk, Chairman of the Audit Committee, meeting the statutory independence criteria;
•	Dorota Wyjadłowska, Audit Committee member meeting the statutory independence criteria;
•	Jacek Leonkiewicz.

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 Grenevia S.A.'s statement of compliance with corporate governance standards). As at 31 December 2023, the Company's statement of compliance with corporate governance standards remained unchanged, but on 17 April 2024 Grenevia 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/​.

For details regarding education and professional experience of the persons holding the positions referred to above, see the 'Supervisory Board of Grenevia S.A. and its committees' section.

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:

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•	a policy for selection of an audit firm to perform audits;
•	the audit firm selection procedure;
•	a policy for the provision of non-audit services by the audit firm, its affiliates and members of its network.

Additional information on the Audit Committee

No permitted non-audit services were provided to the Company by the firm auditing its financial statements, save for the review of its interim financial statements.

Key points of the Company's policy for the selection of the audit firm to perform a statutory audit of the Company's financial statements and a policy for the provision of permitted non-audit services by the audit firm, its affiliates and members of its network are as follows:

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1.	The internal regulations governing selection and rotation of the audit firm and the lead auditor have been introduced pursuant to the Act on Statutory Auditors and Their Self-Government, Entities Qualified to Audit Financial Statements and Public Oversight of 11 May 2017 (consolidated text of 12 April 2023, Dz.U. of 2023, item 1015).
2.	The audit firm is selected in keeping with the principle of audit firm and lead auditor rotation so that the maximum duration of uninterrupted statutory audit engagements with an audit firm, any of its affiliates or members of its network operating in the territory of the European Union does not exceed five years, and that a lead auditor does not carry out statutory audits of the Company's financial statements for a period longer than five years (in which case the lead auditor may again carry out statutory audits of the Company's financial statements after at least three years from the end of the most recent statutory audit).
3.	The audit firm is selected by the Company's Supervisory Board after having considered the Audit Committee's recommendation.
4.	The audit firm is selected sufficiently in advance to enable it to take part in inventory taking of significant assets and a review of interim reports.
5.	When selecting the audit firm, the Audit Committee and the Supervisory Board must pay particular attention to ensuring independence of the audit firm and the auditor.
6.	The independence of the statutory auditor and the audit firm is verified and monitored at each stage of the selection procedure.
7.	The Supervisory Board, during the selection process, and the Audit Committee, when preparing its recommendation, apply in particular the following criteria: the auditor's confirmed impartiality and independence, price offered by the auditor, the audit firm's reputation and experience, its human resources and qualifications and experience of its personnel directly involved in the audit process, the ability to perform an audit within the time frame specified by the Company, and completeness of the service range.
8.	The provision of permitted non-audit services is allowed to the extent provided for in Art. 136.2 of the Act on Statutory Auditors, Audit Firms and Public Oversight.
9.	The provision of permitted non-audit services is only allowed to the extent they do not relate to the Company's tax policy, after a risk assessment has been performed and independence referred to in Art. 69-73 of the Act on Statutory Auditors, Audit Firms and Public Oversight has been ensured by the Audit Committee.
10.	An agreement for the provision of permitted non-audit services is signed on the initiative of the Company's Management Board, subject to the Audit Committee's approval.
11.	When entering into an agreement for the provision of permitted non-audit services, the Company's Management Board must pay particular attention to ensuring the auditor's and audit firm's independence.
12.	Permitted non-audit services are performed in compliance with the independence requirements laid down in relevant professional ethics policies and standards of performance of non-audit services.
13.	The Audit Committee's recommendation on the selection of the audit firm to audit the Company's and the Group's financial statements meets relevant requirements stipulated in the Polish Accounting Act of 29 September 1994 (Dz.U. of 2023, item 120, as amended), Regulation (EU) No. 537/​2014 of the European Parliament and of the Council of 16 April 2014 on specific requirements regarding statutory audit of public-interest entities and repealing Commission Decision 2005/​909/​EC, and complies with the adopted policy on selecting the audit firm to perform statutory audits of the Company's financial statements. The recommendation is formulated following the audit firm selection procedure.

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 2023, three meetings of the Audit Committee were held using means of remote communication, with resolutions voted on by written ballot. In 2023, the Audit Committee held three votes by written ballot. In addition, the Audit Committee met on a so-called working basis, i.e. without convening official meetings.

CODE OF CORPORATE GOVERNANCE STANDARDS APPLICABLE TO THE COMPANY; THE PLACE WHERE THE CODE IS AVAILABLE TO THE PUBLIC

The Company issues current and periodic reports, which are published on its corporate website. The website also includes key corporate events, financials and news. Following the announcement of the Grenevia Group's Sustainability Strategy in January 2023 and organisational changes within the Group, the statement of compliance with the principles of the Best Practice for Warsaw Stock Exchange Listed Companies was updated by Grenevia S.A. in April 2024. 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 https:/​/​grenevia.com/​lad_​korporacyjny/​.

EXTENT OF NON-COMPLIANCE

In the reporting period, the Company did not comply with 12 Best Practice principles: 1.1, 1.2., 1.4.2., 1.6., 2.1., 2.2., 2.7., 2.11.6., 3.7, 4.3., 4.8., 6.3. Under the WSE Rules, information on the corporate governance principles which the Company does not currently comply with, including the extent of and reasons for non-compliance, was updated on 17 April 2024 in EBI Current Report No. 1/​2024, available on the Company's website at https:/​/​grenevia.com/​lad_​korporacyjny/​.

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 period

The Company did not comply with Principle 1.1. in 2023.

In accordance with the principle, companies maintain efficient communications with capital market participants and provide fair information about matters that concern them. For that purpose, companies use diverse tools and forms of communication, including in particular the corporate website where they publish all information relevant for investors.

The principle is applied to a limited extent. The Company provides information on its website regarding the composition of its Management and Supervisory Boards, key corporate documents such as the Company's Articles of Association, Rules of Procedure for the General Meeting and the Supervisory and Management Boards. Additionally, it shares policies, best practices and corporate governance standards followed by the Company. The website presents selected financial data, presentations discussing the Company's published results, strategies, details on changes in the share capital and transactions involving Company shares. The corporate website also includes a calendar of corporate events, such as the release dates for financial reports, along with the Company's contact details, including a telephone number and email address.

The Company did not comply with Principle 1.2. in 2023.

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.

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 1.4.2. in 2023.

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 primary criteria for determining the amount of an employee's remuneration are qualifications, skills, and the depth of expertise required to perform a specific role. Remuneration is determined in compliance with the applicable labour legislation, including the principle of equal pay under Article 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 1.6. in 2023.

In accordance with the principle, companies participating in the WIG20, mWIG40 or sWIG80 index hold on a quarterly basis, and other companies hold at least on an annual basis, a meeting with investors to which they invite in particular shareholders, analysts, industry experts and the media. At such meetings, the management board of the company presents and comments on the strategy and its implementation, the financial results of the company and its group, and the key events impacting the business of the company and its group, their results and outlook. At such meetings, the management board of the company publicly provides answers and explanations to questions raised.

The Company indicates that the principle is complied with to a limited extent. The Grenevia Group operates as a corporate group, where individual segments maintain a high degree of operational independence. At least once every six months, Grenevia holds conferences at which the Management Board, accompanied by key segment representatives, discusses the Group's and individual segments' financial performance, significant events, and outlook. During these meetings, questions are addressed publicly.

The Company did not comply with Principle 2.1. in 2023.

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%.

The Company indicates that the principle was complied with to a limited extent. On 18 December 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 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 2023.

In accordance with the principle, 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 in electing Group companies' directors and other key management personnel, the Company's authorised governing bodies seek 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 2023.

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.

The Company indicates that the principle was complied with to a limited extent. In accordance with Article 15.2.6 of the Company's Articles of Association, in conjunction with Article 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 2023.

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.

The Company indicates that the principle is complied with to a limited extent. The reasons for the partial non-compliance are included in the comment on principle 2.1.

The Company did not comply with Principle 3.7. in 2023.

In accordance with the principle, principles 3.4 to 3.6 apply also to members of the company's group which are material to its activity if they appoint persons to perform such tasks.

The principle is applied to a limited extent. At the Company, the head of internal audit reports organisationally to the President of the Management Board, and functionally to the Chairperson of the Audit Committee. However, this standard is not complied with at the Group entities due to the individual assessment of their organisational structure, business processes, and business profiles. At the Group entities, Internal Audit is overseen by the Vice Presidents of the Management Board responsible for Finance.

The Company did not comply with Principle 4.3. in 2023.

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 2023.

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 2023.

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 Board

THE AUDITOR

The 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 11 July 2022, the Company and BDO Spółka z ograniczoną odpowiedzialnością Sp.k. entered into an agreement for:

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•	Review of the Grenevia S.A.'s interim separate financial statements and the Grenevia Group's interim consolidated financial statements;
•	Audit of Grenevia S.A.'s separate financial statements and the Grenevia Group's consolidated financial statements;
•	Assurance engagement with respect to the report on executive compensation for the General Meeting and the Supervisory Board of Grenevia S.A.

For information on the auditor's fees, see Note 56 to the consolidated financial statements of the Grenevia Group for 2023 and Note 45 to the financial statements of Grenevia S.A. for 2023.

STATEMENT OF COMPLIANCE WITH APPLICABLE ACCOUNTING POLICIES

The Management Board of Grenevia S.A. consisting of:

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Full name	Position
Beata Zawiszowska	President of the Management Board

certifies 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 policies, and give a true, fair and clear view of Grenevia S.A.'s and 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 Grenevia S.A. and the Grenevia Group, and describes the key risks and threats.

NON-FINANCIAL STATEMENT

The non-financial report of the Grenevia Group and Grenevia S.A. for 2023 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 the Management Board of Grenevia S.A.

Beata Zawiszowska

CONSOLIDATED FINANCIAL STATEMENTS OF THE GRENEVIA GROUP FOR 2023

This document is a conversion to pdf format of the official full-year consolidated financial statements of the GRENEVIA Group for 2023 that was issued in xhtml format. The Polish original should be referred to in matters of interpretation.

Table of contents

I. CONSOLIDATED FINANCIAL STATEMENTS OF THE GRENEVIA GROUP

Consolidated statement of profit or loss (PLN million)

Consolidated statement of comprehensive income (PLN million)

Consolidated statement of financial position (PLN million)

Consolidated statement of changes in equity (PLN million)

Consolidated statement of cash flows (PLN million)

II. ACCOUNTING POLICIES AND NOTES TO THE FINANCIAL STATEMENTS

1. General information

2. Composition of the Management Board

3. Authorisation of consolidated financial statements

4. Estimates and subjective judgement

5. Basis of preparation

6. Statement of compliance

7. Functional and reporting currency

8. Basis of consolidation

9. Material accounting policies

10. New standards and interpretations which have been issued but are not yet effective

11. Organisational structure of the Grenevia Group as at 31 December 2023

12. Accounting for acquisition of new subsidiaries

13. Loss of control of subsidiary

14. Discontinued operations

15. Operating segments

16. Revenue from contracts with customers

17. Gain on sale of solar PV farms classified as property, plant and equipment

18. Lease income

19. Costs by nature of expense

20. Workforce and employment costs

21. Other income

22. Other expenses

23. Finance income

24. Finance costs

25. Income taxes

26. Earnings per share

27. Goodwill

28. Other intangible assets

29. Property, plant and equipment

30. Long-term receivables

31. Investment property

32. Other non-current financial assets

33. Inventories

34. Trade and other receivables

35. Other current financial assets

36. Cash and cash equivalents

37. Non-current assets held for sale and related liabilities

38. Shareholders of Grenevia S.A.

39. Share capital

40. Other capital reserves

41. Dividend

42. Provisions

43. Capital risk management

44. Financial liabilities

45. Borrowings

46. Factoring liabilities

47. Lease liabilities

48. Trade and other payables

49. Assets pledged as security

50. Contingent liabilities

51. Financial instruments

52. Derivative financial instruments and hedges

53. Objectives and principles of financial risk management

54. Related-party transactions

55. Remuneration of members of the Management Board and Supervisory Board

56. Auditor's fees

57. Analysis of the impact of the military conflict in Ukraine on the Group's financial condition

58. Impact of climate change on the Company's operations and financial condition

59. Events after the reporting date

Katowice, 22 April 2024

I. CONSOLIDATED FINANCIAL STATEMENTS OF THE GRENEVIA GROUP

Consolidated statement of profit or loss (PLN million)

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PLN million, except for earnings per share	Note	12 months to 31 Dec 2023	12 months to 31 Dec 2022
Revenue	15-16	1,644	1,296
Cost of sales	19	1,070	827
Gain on sale of solar PV farms classified as property, plant and equipment	17	7	-
Gross profit		581	469
Distribution costs	19	45	28
Administrative expenses	19	212	162
Other income	21	36	56
Other expenses	22	144	78
Operating profit		216	257
Gains (losses) on allowance for expected credit losses	34	8	11
Finance income	23	58	60
Finance costs	24	81	77
Gain (loss) on loss of control of subsidiary	13	2	-
Profit before tax		203	251
Income taxes	25	59	59
Net profit from continuing operations		144	192
Discontinued operations	14	-	-72
Net profit, attributable to:		144	120
owners of the Parent		212	158
non-controlling interests		-68	-38

Earnings per share:

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Basic earnings per share from continuing operations	0.25	0.33
Basic earnings (loss) per share from discontinued operations	0.00	-0.13
Total basic earnings per share	0.25	0.20
Diluted earnings per share from continuing operations	0.25	0.33
Diluted earnings (loss) per share from discontinued operations	0.00	-0.13
Total diluted earnings per share	0.25	0.20

Consolidated statement of comprehensive income (PLN million)

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(PLN million)	12 months to 31 Dec 2023	12 months to 31 Dec 2022
Net profit	144	120
Other comprehensive income that will not be reclassified to profit or loss in subsequent reporting periods:	1	6
Remeasurement following reclassification to investment property	-	9
Actuarial gains (losses)	1	-3
Other comprehensive income that may be reclassified to profit or loss in subsequent reporting periods:	-48	55
Exchange differences	-6	13
Cash flow hedges	-42	42
Total other comprehensive income, net of tax	-47	61
Total comprehensive income	97	181
including income attributable to owners of the Parent	175	216
including income attributable to non-controlling interests	-78	-35

Consolidated statement of financial position (PLN million)

ASSETS

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(PLN million)	Note	As at 31 Dec 2023	As at 31 Dec 2022
Non-current assets		1,587	788
Goodwill	27	200	191
Other intangible assets	28	91	104
Property, plant and equipment	29	1,135	384
Long-term receivables	30	27	12
Investment property	31	78	72
Other non-current financial assets	32	9	4
Deferred tax assets	25	47	21
Current assets		2,202	2,882
Current assets other than assets classified as held for sale		2,154	2,830
Inventories	33	861	1,204
Short-term trade and other receivables	34	638	576
Current tax assets		6	3
Derivate financial instruments	52	29	66
Other current financial assets	35	10	42
Cash and cash equivalents	36	610	939
Non-current assets classified as held for sale	37	48	52
Total assets		3,789	3,670

EQUITY AND LIABILITIES

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(PLN million)	Note	As at 31 Dec 2023	As at 31 Dec 2022
Equity		2,193	2,095
Share capital	39	6	6
Other capital reserves	40	1,521	1,177
Retained earnings		500	662
Equity attributable to owners of the Parent		2,027	1,845
Equity attributable to non-controlling interests	40	166	250
Liabilities		1,596	1,575
Non-current liabilities		966	659
Long-term provisions	42	34	27
Other non-current financial liabilities	44-47	924	629
Long-term trade and other payables	48	8	3
Current liabilities		630	916
Current liabilities other than liabilities included in disposal groups classified as held for sale		621	909
Short-term provisions	42	57	46
Short-term trade and other payables	48	502	416
Current tax liabilities		4	10
Other current financial liabilities	44-47	58	437
Liabilities included in disposal groups classified as held for sale	37	9	7
Equity and liabilities		3,789	3,670

Consolidated statement of changes in equity (PLN million)

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	Share capital	Other capital reserves	Retained earnings	Equity attributable to owners of the Parent	Equity attributable to non-controlling interests	Total equity
1 Jan 2023	6	1,177	662	1,845	250	2,095
net profit	-	-	212	212	-68	144
other comprehensive income	-	-37	-	-37	-10	-47
total comprehensive income	-	-37	212	175	-78	97
transfer of profit to statutory reserve funds and other reserves	-	392	-392	-	-	-
Increase (decrease) due to changes in ownership interests in subsidiaries that do not result in loss of control, equity	-	-5	-	-5	6	1
Increase (decrease) due to acquisition of subsidiary	-	-	-	-	4	4
Increase (decrease) due to other changes	-	-6	18	12	-16	-4
changes in equity in the period	-	344	-162	182	-84	98
31 Dec 2023	6	1,521	500	2,027	166	2,193

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	Share capital	Other capital reserves	Retained earnings	Equity attributable to owners of the Parent	Equity attributable to non-controlling interests	Total equity
1 Jan 2022	6	1,091	624	1,721	160	1,881
net profit	-	-	158	158	-38	120
other comprehensive income	-	60	-2	58	3	61
total comprehensive income	-	60	156	216	-35	181
transfer of profit to statutory reserve funds and other reserves	-	26	-26	-	-	-
Increase (decrease) due to changes in ownership interests in subsidiaries that do not result in loss of control, equity	-	-	-92	-92	125	33
changes in equity in the period	-	86	38	124	90	214
31 Dec 2022	6	1,177	662	1,845	250	2,095

Consolidated statement of cash flows (PLN million)

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(PLN million)	12 months to 31 Dec 2023	12 months to 31 Dec 2022
Cash flows from operating activities - indirect method
Profit before tax	203	251
Total adjustments, including	502	-206
inventories	208	-621
trade receivables	44	-33
other operating receivables	-21	202
trade payables	-7	19
other operating payables	65	16
depreciation and amortisation	198	149
provisions	21	5
exchange differences	3	1
(gain) loss on disposal of non-current assets	-7	-27
other adjustments producing cash effects in the form of investing or financing cash flow	-	85
other adjustments to reconcile profit (loss)	-2	-2
total gross profit and adjustments	705	45
Income tax (paid)/​recovered	-83	-53
Net cash from operating activities	622	-8
Cash flows from investing activities
Cash paid to acquire equity or debt instruments of other entities	-39	-330
Proceeds from sale of property, plant and equipment	20	46
Purchase of property, plant and equipment *	-687	-182
Cash advances and loans made to third parties	-2	-5
Cash receipts from repayment of advances and loans to third parties	21	7
Dividends received	1	-
Other inflows (outflows) of cash	4	2
Net cash from investing activities	-682	-462
Cash flows from financing activities
Proceeds from borrowings	240	381
Repayment of borrowings	-397	-234
Payment of lease liabilities	-14	-11
Interest paid	-94	-49
Other inflows (outflows) of cash	-1	-
Net cash from financing activities	-266	87
Cash flows from discontinued operations with underlying assets not classified as assets held for sale	-	-11
Increase (decrease) in cash and cash equivalents before effect of exchange rate changes	-326	-394
Effect of exchange rate changes on cash and cash equivalents	-3	-
Increase (decrease) in cash and cash equivalents	-329	-394
Cash and cash equivalents at beginning of period	939	1,333
Cash and cash equivalents at end of period	610	939
* Including mainly expenditure on the manufacture of shearer loaders/​roadheaders for lease and the manufacture of solar PV farms.

II. ACCOUNTING POLICIES AND NOTES TO THE FINANCIAL STATEMENTS

1. General information

Name:

GRENEVIA Spółka Akcyjna (formerly: FAMUR Spółka Akcyjna) - (hereinafter the "Parent" or "Grenevia")

On 16 February 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 3 April 2023.

Registered office:

Katowice 40-202, Al. Roździeńskiego 1A, Poland

Principal place of business:

Poland

Principal business activities of the Company:

Manufacture of longwall systems, roadheaders and belt conveyors for mining machinery, as well as repair, refurbishment and maintenance of onshore wind turbine gearboxes. The Parent also conducts holding company activities aimed at building and supporting new business operations of the Grenevia Group related to renewable energy sources (including solar photovoltaics, power engineering, electric mobility).

Grenevia Group (the "Group", the "Grenevia Group")

The Grenevia Group is an active investor that integrates and grows its business operations comprising four business segments: utility-scale solar projects (PV) delivered by Projekt Solartechnik; the segment of battery systems for electric mobility and energy storage (E-mobility) based on Impact Clean Power Technology S.A.; the segment of modern solutions for the power distribution sector (Power Engineering) based on Elgór+Hansen S.A.; and the segment of solutions for the mining and wind power sectors based on the FAMUR brand.

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:

indefinite.

Reporting period:

1 January - 31 December 2023

Parent:

TDJ Equity I Sp. z o.o. is the parent of GRENEVIA S.A. and TDJ S.A. is the ultimate parent.

2. Composition of the Management Board

As at 31 December 2023 and the date of these consolidated financial statements, the Management Board was composed of:

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Beata Zawiszowska *	President of the Management Board

As at 31 December 2022, the composition of the Management Board was as follows:

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Mirosław Bendzera **	President of the Management Board
Beata Zawiszowska	Vice President of the Management Board, Chief Financial Officer
Dawid Gruszczyk **	Vice President of the Management Board, Sales
Tomasz Jakubowski **	Vice President of the Management Board, Chief Operating Officer, Underground
Ireneusz Kazimierski ***	Vice President of the Management Board, Business Development

* On 29 May 2023, the Supervisory Board of Grenevia S.A. passed a resolution to appoint Beata Zawiszowska as President of the Management Board of Grenevia S.A., with effect from 1 July 2023.

** On 29 May 2023, Mirosław Bendzera, Dawid Gruszczyk and Tomasz Jakubowski resigned from their positions, with effect from 30 June 2023. The reason for the resignations was their transition into leadership roles within a new subsidiary formed by Grenevia S.A. to take over the management and business development of the Famur segment, which specialises in delivering solutions for the mining and wind power sectors. The changes were made to restructure the Company and to separate its operations from financing activities, while allocating responsibilities for the management of the respective areas.

*** Mr Kazimierski resigned from the Management Board with effect from the close of business on 31 December 2022.

3. Authorisation of consolidated financial statements

These consolidated financial statements were authorised for issue by the Management Board on 22 April 2024.

4. Estimates and subjective judgement

4.1. Estimates

The preparation of financial statements requires the Group's Management Board to make certain estimates. The Management Board reviews such estimates taking into account changes in the underlying factors, new information or past experience. For detailed information on the material estimates and assumptions used by the Management Board, see the notes to these consolidated financial statements.

The table below lists the notes which include information on the use of assumptions and estimates.

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Note	Title	Estimates	Type of disclosed information
16	Revenue from contracts with customers	Recognition of revenue over time	Methodology used to measure progress towards satisfaction of a performance obligation
4.3	Income taxes	- Income tax asset and liability,	- Assumptions used to recognise deferred tax asset and liability,
25		- Global minimum tax,	- Assessment of potential impact of the implementation of global minimum tax,
27	Goodwill	Goodwill impairment test	Key assumptions for revenue growth, operating profit or loss and discount rates
28 29	Other intangible assets Property, plant and equipment	Economic useful lives and amortisation/​depreciation methods	Adopted useful lives and amortisation/​depreciation methods for different groups of non-current assets
31	Investment property	Valuation of investment property	Fair value measurement methodology for investment property
33	Inventories	Inventory write-downs	Estimates and assumptions underlying the determination of realisable value
32 34 35	Other non-current financial assets Trade and other receivables Other current financial assets	Impairment losses on loans and receivables	Methodology used to determine the recoverable amount
42	Provisions	Employee benefits	Assumptions underlying actuarial provisions estimated by an actuary
42	Provisions	Provision for warranty repairs	Methodology used to estimate provisions for warranty repairs
42	Provisions	Other provisions	General assumptions for the recognition of other provisions
50	Contingent liabilities	Recognition of contingent liabilities	Identification of circumstances in which contingent liabilities may be recognised

4.2. Subjective judgement

Where 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 settlements

The 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 business operators.

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 Parent 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 15 February 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 27 June 2023, the Company received the Head of the National Tax Administration's decision to impose on the Parent an additional corporate income tax liability of PLN 8 million for 2017. The Company paid the liability, together with PLN 3 million in interest accrued thereon as at the date of payment. The Management Board intends to use any means of appeal available under law to defend its position, however taking into account the realities of tax proceedings, obtaining a final resolution of the issue might be a long-term prospect.

Additionally, in May 2022, the Kraków Province Customs and Tax Office initiated a customs and tax inspection at the Parent 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 15 February 1992. The Head of the Kraków Province Customs and Tax Office challenged the classification as tax-deductible of expenses incurred by the Company on advisory services in connection with the demerger of a subsidiary, while admitting that those expenses were reasonable. The result of challenging the expenses was an increase in corporate income tax payable for 2018 by PLN 0.7 million. The Company disagrees with the authority's inspection findings. The Company will use the available means of appeal to defend its position.

Pursuant to Council Directive (EU) 2022/​2523, entities being members of groups which met the annual threshold of over EUR 750 million of consolidated revenue in at least two of the last four fiscal years immediately preceding a given fiscal year will be liable to pay a top-up tax (Global Minimum Tax /​ Pillar Two) so that the group's effective tax rate in the relevant jurisdiction is not lower than 15%. The Group undertook an analysis to determine whether it met the consolidated revenue threshold making it subject to the Pillar Two regime. The ultimate parent of Grenevia S.A. is TDJ S.A. Consolidated revenue of the TDJ Group did not exceed the threshold of EUR 750 million in any of the last four years preceding the reporting period, which means that the Pillar Two regime would not have been applied and affected the Grenevia Group's results and cash flows in 2023, nor will it apply and affect its results and cash flows in 2024. Pillar Two is expected to be implemented in Poland as of 1 January 2025. Any liability to pay top-up tax arising after the implementation of Pillar Two into Polish law would be borne by TDJ S.A.

5. Basis of preparation

These 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 consolidated financial statements have been prepared on the assumption that the Group will continue as a going concern for 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 war in Ukraine and climate change. The Management Board assessed the Group's position in the context of the ongoing military conflict in Ukraine and the impact of climate change on its operations and did not ascertain any imminent threat to the Group's ability to continue as a going concern, neither due to these factors nor any other. For detailed information on the impact of the war in Ukraine, see Note 57. For information on the impact of climate change on the Group's operations, see Note 58.

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.

6. Statement of compliance

These 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").

7. Functional and reporting currency

The 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 reporting currency as follows:

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―	assets and liabilities - at the mid rate quoted by the National Bank of Poland on the reporting period for a given currency,
―	items of the statement of profit or loss, statement of comprehensive income and statement of cash flows - at the arithmetic mean of the mid rates quoted by the National Bank of Poland for a given currency as at the end of each month in the reporting period.

Unless stated otherwise, all amounts are given in PLN million.

8. Basis of consolidation

These 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:

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―	the carrying amount of the Parent's investment in each subsidiary and the Parent's portion of equity of each subsidiary are eliminated;
―	non-controlling interests in the net profit or loss of consolidated subsidiaries for the reporting period are identified;
―	non-controlling interests in the net assets of consolidated subsidiaries are identified and presented separately from the Parent's ownership interest in such net assets.

A non-controlling interest in net assets includes:

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―	the amount of non-controlling interests on the original business combination date, calculated in accordance with IFRS 3, and
―	changes in equity attributable to non-controlling interests from the business combination date.

9. Material accounting policies

9.1. Application of new and revised standards

The accounting policies applied in the preparation of these financial statements are consistent with the policies applied in the preparation of the Group's consolidated financial statements for the year ended 31 December 2022, except for the application of new or revised standards and interpretations effective for annual periods beginning on or after 1 January 2023.

On 1 January 2023, the following amendments to standards came into force:

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•	IFRS 17 Insurance Contracts (issued on 18 May 2017) including Amendments to IFRS 17 (issued on 25 June 2020) − not endorsed by the EU by the date of authorisation of these financial statements for issue; effective for annual periods beginning on or after 1 January 2023;
•	Amendments to IAS 1 and IFRS Practice Statement 2: Disclosure of Accounting Policies (issued on 12 February 2021) - effective for annual periods beginning on or after 1 January 2023;
•	Amendments to IAS 8: Definition of Accounting Estimates (issued on 12 February 2021) - effective for annual periods beginning on or after 1 January 2023;
•	Amendments to IAS 12: Deferred Tax related to Assets and Liabilities arising from a Single Transaction (issued on 7 May 2021) - effective for annual periods beginning on or after 1 January 2023;
•	Amendments to IAS 12: Income Taxes - International Tax Reform Pillar Two Model Rules (issued on 23 May 2023) - effective for disclosures in full-year financial statements, for annual periods beginning on or after 1 January 2023;
•	Amendments to IFRS 17 Insurance Contracts: Initial Application of IFRS 17 and IFRS 9 - Comparative Information (issued on 9 December 2021) - effective for annual periods beginning on or after 1 January 2023.

The amendments listed above had no material effect on these financial statements, except for the amendments to IAS 1 applicable to the material accounting policy information disclosed in these consolidated financial statements and amendments to IAS 12 relating to the minimum tax disclosures, included in Note 4.3.

10. New standards and interpretations which have been issued but are not yet effective

The following standards and interpretations have been issued by the International Accounting Standards Board, but are not yet effective:

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•	IFRS 14 Regulatory Deferral Accounts (issued on 30 January 2014) − pursuant to the European Commission's decision, the process leading to the approval of a preliminary version of the standard will not be initiated until its final version is published; not endorsed by the EU by the date of authorisation of these financial statements for issue; effective for annual periods beginning on or after 1 January 2016;
•	Amendments to IFRS 10 and IAS 28: Sale or contribution of assets between an investor and its associate or joint venture (issued on 11 September 2014) − work leading to approval of the amendments was postponed by the EU for an indefinite period; the effective date was deferred by the IASB for an indefinite period;
•	Amendments to IAS 1: Presentation of Financial Statements: Classification of Liabilities as Current or Non-current and Classification of Liabilities as Current or Non-current - Deferral of the Effective Date and Non-current Liabilities with Covenants (issued on 23 January 2020, 15 July 2020 and 31 October 2022, respectively); not endorsed by the EU as at the date of authorisation of these financial statements for issue; effective for annual periods beginning on or after 1 January 2024;
•	Amendments to IFRS 16 Leases: Lease Liability in a Sale and Leaseback (issued on 22 September 2022) - not endorsed by the EU as at the date of authorisation of these financial statements for issue - effective for annual periods beginning on or after 1 January 2024;
•	Amendments to IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments: Disclosure - Supplier Finance Arrangements - to be applied after 1 January 2024 Not endorsed by the EU by the date of authorisation of these financial statements;
•	Amendments to IAS 21 The Effects of Changes in Foreign Exchange Rate - Lack of Exchangeability - to be applied after 1 January 2025 Not endorsed by the EU by the date of authorisation of these financial statements.

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.

11. Organisational structure of the Grenevia Group as at 31 December 2023

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No.	Subsidiaries	Entry No. in the National Court Register (KRS)	Country of registration	Consolidation method	GRENEVIA S.A.'s interest (held directly and indirectly)
	FAMUR SEGMENT:
1	Ex-Coal Sp. z o.o.	282838	Poland	full	100%
2	EXC FMF Sp. z o.o.	901074	Poland	full	100%
3	Stadmar Sp. z o.o.	156525	Poland	n/​c 1)	50%
4	Primetech S.A.	26782	Poland	full	81%
5	Śląskie Towarzystwo Wiertnicze Dalbis Sp. z o.o.	156135	Poland	full	81%
6	Famur S.A.	1044637	Poland	full	100%
7	Total Wind PL Sp. z o.o.	236686	Poland	full 3)	75%
8	Famur Institute Sp. z o.o.	243409	Poland	n/​c 1)	100%
9	OOO Famur	n/​a	Russia	n/​c 2)	100%
10	TOO Famur Kazachstan	n/​a	Kazakhstan	full	100%
11	Hansen Sicherheitstechnik AG	n/​a	Germany	full	100%
12	Dams GMBH	n/​a	Germany	n/​c 1)	100%
13	Kopex Africa Pty Ltd.	n/​a	South Africa	full	100%
14	Hansen And Genwest Pty Ltd.	n/​a	South Africa	full	75%
15	Air Reliant Pty Ltd.	n/​a	South Africa	full	75%
16	Shandong Tagao Mining Equipment Manufacturing Co. Ltd.	n/​a	China	n/​c 2)	50%
17	Taian Famur Coal Mining Machinery Co., Ltd.	n/​a	China	full	100%
18	PT. Kopex Mining Contractors	n/​a	Indonesia	full	100%
	POWER ENGINEERING SEGMENT:
19	Elgór+Hansen S.A.	61042	Poland	full	100%
	E-MOBILITY SEGMENT:
20	Impact Clean Power Technology S.A.	378990	Poland	full	51%
	PV SEGMENT:
21	Invest PV 1 Sp. z o.o.	879459	Poland	full	100%
22	Famur Solar Sp. z o.o.	906516	Poland	full	75%
23	Projekt-Solartechnik S.A. *	834759	Poland	full	52%
	OTHER ACTIVITIES:
24	Famur Finance Sp. z o.o.	618105	Poland	full	100%
25	Famur Finance & Restructuring Sp. z o.o. w likwidacji (in liquidation)	622989	Poland	full	100%
26	DE Estate Sp. z o.o.	758723	Poland	full	100%

* Composition of the PST Group is presented in the tables below.

1) Not consolidated due to immateriality.

2) Not consolidated due to the lack of effective control of the entity or significant influence on its operations.

3) Consolidated since August 2023, i.e. the date of acquiring control.

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No.	Associates	Entry No. in the National Court Register (KRS)	Country of registration	Consolidation method	GRENEVIA S.A.'s interest (held directly and indirectly)
	FAMUR SEGMENT:
27	EXPO Katowice S.A.	8533	Poland	n/​c 1)	33%

1) Not consolidated due to the lack of significant influence on the entity's operations.

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No.	Entities of the PST Group in which GRENEVIA S.A. holds indirect and direct interests of 52%	Entry No. in the National Court Register (KRS)	Registered office	Consolidation method	GRENEVIA S.A.'s interest (held directly and indirectly)
	PV SEGMENT:
28	Projekt-Solartechnik Group Sp. z o.o.	468833	Poland	full	52%
29	Projekt-Solartechnik Dystrybucja Sp. z o.o.	850401	Poland	full	52%
30	Projekt-Solartechnik Development Sp. z o.o. *	819926	Poland	full	52%
31	P+S Energooszczędni Sp. z o.o.	701159	Poland	full 1)	34%
32	MM Solartechnik Sp. z o.o.	842926	Poland	full 1)	26%
33	MM SOLAR PV Sp. z o.o.	844385	Poland	n/​c 2)	26%
34	PV OLEŚNICA Sp. z o.o.	896238	Poland	full 1)	26%
35	PST Projekt Solartechnik GmbH		Germany	full	52%
36	INVEST PV 71 Sp. z o.o.	962780	Poland	full	52%
37	INVEST PV 77 Sp. z o.o.	962870	Poland	full	52%
38	INVEST PV 78 Sp. z o.o.	962874	Poland	full	52%
39	INVEST PV 79 Sp. z o.o.	962826	Poland	full	52%
40	SPV Krotoszyce 1 Sp. z o.o.	948223	Poland	full 1)	27%
41	SPV Krotoszyce 2 Sp. z o.o.	948257	Poland	full 1)	27%
42	PST-Flugplatz-Solar-Finsterwalde GmbH		Germany	n/​c 2)	17%
43	Finance PV 1 S.A.	1020713	Poland	full	52%
44	Finance PV 2 Sp. z o.o.	1031730	Poland	full	52%
45	Finance PV 3 Sp. z o.o.	1032640	Poland	full	52%
46	Finance PV 4 Sp. z o.o.	1031815	Poland	full	52%
47	Projekt Solartechnik Romania S.R.L.		Romania	full	52%
48	Projekt Solartechnik France S.A.S.		France	full	52%
49	PST SPAIN SL		Spain	full	52%
50	Invest PV 80 Sp. z o.o.	770429	Poland	full	52%
51	Invest PV 82 Sp. z o.o.	827646	Poland	full	52%
52	Invest PV 83 Sp. z o.o.	827664	Poland	full	52%
53	Invest PV 84 Sp. z o.o.	827670	Poland	full	52%
54	Invest PV 85 Sp. z o.o.	844789	Poland	full	52%
55	Invest PV 86 Sp. z o.o.	859026	Poland	full	52%
56	Invest PV 87 Sp. z o.o.	861362	Poland	full	52%
57	Invest PV 81 Sp. z o.o.	689657	Poland	full	52%
58	PST Trade S.A.	1046679	Poland	full	52%
59	Invest PV 43 Sp. z o.o.	675195	Poland	full	52%
60	PST-Solarprojekt-Clausnitz GmbH		Germany	n/​c 2)	52%

* 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.

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No.	Entities wholly-owned by Projekt Solartechnik Fund Fundusz Inwestycyjny Zamknięty, which is wholly-owned by Projekt Solartechnik S.A. *	Entry No. in the National Court Register (KRS)	Country of registration	Consolidation method	GRENEVIA S.A.'s interest (held directly and indirectly)
	PV SEGMENT:
61	Invest PV 2 Sp. z o.o.	879450	Poland	full	52%
62	Invest PV 3 Sp. z o.o.	879476	Poland	full	52%
63	Invest PV 4 Sp. z o.o.	879446	Poland	full	52%
64	Invest PV 5 Sp. z o.o.	879527	Poland	full	52%
65	Invest PV 6 Sp. z o.o.	879522	Poland	full	52%
66	Invest PV 7 Sp. z o.o.	879452	Poland	full	52%
67	Invest PV 8 Sp. z o.o.	879457	Poland	full	52%
68	Invest PV 9 Sp. z o.o.	879416	Poland	full	52%
69	Invest PV 10 Sp. z o.o.	879455	Poland	full	52%
70	Invest PV 11 Sp. z o.o.	840444	Poland	full	52%
71	Invest PV 12 Sp. z o.o.	829093	Poland	full	52%
72	Invest PV 13 Sp. z o.o.	507743	Poland	full	52%
73	Invest PV 41 Sp. z o.o.	839412	Poland	full	52%
74	Invest PV 59 Sp. z o.o.	854946	Poland	full	52%
75	Invest PV 45 Sp. z o.o.	859386	Poland	full	52%
76	Invest PV 44 Sp. z o.o.	858773	Poland	full	52%
77	Invest PV 42 Sp. z o.o.	833844	Poland	full	52%
78	Invest PV 16 Sp. z o.o.	772495	Poland	full	52%
79	Invest PV 15 Sp. z o.o.	773957	Poland	full	52%
80	Invest PV 14 Sp. z o.o.	824366	Poland	full	52%
81	Invest PV 17 Sp. z o.o.	850482	Poland	full	52%
82	Invest PV 18 Sp. z o.o.	446948	Poland	full	52%
83	Invest PV 19 Sp. z o.o.	730449	Poland	full	52%
84	Invest PV 20 Sp. z o.o.	522095	Poland	full	52%
85	Invest PV 21 Sp. z o.o.	387119	Poland	full	52%
86	Invest PV 22 Sp. z o.o.	443003	Poland	full	52%
87	Invest PV 23 Sp. z o.o.	461180	Poland	full	52%
88	Invest PV 25 Sp. z o.o.	435841	Poland	full	52%
89	Invest PV 26 Sp. z o.o.	842906	Poland	full	52%
90	Invest PV 27 Sp. z o.o.	728459	Poland	full	52%
91	Invest PV 28 Sp. z o.o.	852249	Poland	full	52%
92	Invest PV 29 Sp. z o.o.	714293	Poland	full	52%
93	Invest PV 30 Sp. z o.o.	777797	Poland	full	52%
94	Invest PV 31 Sp. z o.o.	445980	Poland	full	52%
95	Invest PV 40 Sp. z o.o.	873926	Poland	full	52%
96	Invest PV 32 Sp. z o.o.	796747	Poland	full	52%
97	Invest PV 33 Sp. z o.o.	796684	Poland	full	52%
98	Invest PV 34 Sp. z o.o.	440454	Poland	full	52%
99	Invest PV 35 Sp. z o.o.	425274	Poland	full	52%
100	Invest PV 36 Sp. z o.o.	440047	Poland	full	52%
101	Invest PV 37 Sp. z o.o.	734704	Poland	full	52%
102	Invest PV 38 Sp. z o.o.	569871	Poland	full	52%
103	Invest PV 39 Sp. z o.o.	844431	Poland	full	52%
104	Invest PV 24 Sp. z o.o.	460404	Poland	full	52%
105	Invest PV 60 Sp. z o.o.	864853	Poland	full	52%
106	Invest PV 61 Sp. z o.o.	864856	Poland	full	52%
107	Invest PV 62 Sp. z o.o.	864838	Poland	full	52%
108	Invest PV 63 Sp. z o.o.	873181	Poland	full	52%
109	Invest PV 64 Sp. z o.o.	873127	Poland	full	52%
110	Invest PV 49 Sp. z o.o.	917556	Poland	full	52%
111	Invest PV 50 Sp. z o.o.	918131	Poland	full	52%
112	Invest PV 51 Sp. z o.o.	918031	Poland	full	52%
113	Invest PV 52 Sp. z o.o.	918084	Poland	full	52%
114	Invest PV 53 Sp. z o.o.	918067	Poland	full	52%
115	Invest PV 54 Sp. z o.o.	918068	Poland	full	52%
116	Invest PV 55 Sp. z o.o.	918111	Poland	full	52%
117	Invest PV 65 Sp. z o.o.	962949	Poland	full	52%
118	Invest PV 66 Sp. z o.o.	962738	Poland	full	52%
119	Invest PV 67 Sp. z o.o.	962782	Poland	full	52%
120	Invest PV 68 Sp. z o.o.	962785	Poland	full	52%
121	Invest PV 69 Sp. z o.o.	962753	Poland	full	52%
122	Invest PV 70 Sp. z o.o.	962711	Poland	full	52%
123	Invest PV 72 Sp. z o.o.	962824	Poland	full	52%
124	Invest PV 73 Sp. z o.o.	962732	Poland	full	52%
125	Invest PV 74 Sp. z o.o.	962861	Poland	full	52%
126	Invest PV 75 Sp. z o.o.	962829	Poland	full	52%
127	Invest PV 76 Sp. z o.o.	962863	Poland	full	52%
128	Invest PV 56 Sp. z o.o.	801656	Poland	full	52%
129	Invest PV 57 Sp. z o.o.	801276	Poland	full	52%
130	Invest PV 58 Sp. z o.o.	849855	Poland	full	52%
131	Invest PV 46 Sp. z o.o.	818473	Poland	full	52%
132	Invest PV 47 Sp. z o.o.	818877	Poland	full	52%
133	Invest PV 48 Sp. z o.o.	824075	Poland	full	52%
134	Invest PV 88 Sp. z o.o.	905061	Poland	full	52%
135	Invest PV 89 Sp. z o.o.	885615	Poland	full	52%
136	Bridge PV 1 Sp. z o.o.	1040731	Poland	full	52%
137	PST 44 Sp. z o.o.	1006466	Poland	full	52%
138	PST 17 Sp. z o.o.	1006884	Poland	full	52%
* Projekt Solartechnik Fund Fundusz Inwestycyjny Zamknięty is fully consolidated.

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No.	Entities directly owned by Projekt-Solartechnik Development Sp. z o.o. Projekt Solartechnik S.A. holds 100% ownership interest in Projekt-Solartechnik Development Sp. z o.o.	Entry No. in the National Court Register (KRS)	Registered office	Consolidation method	GRENEVIA S.A.'s interest (held directly and indirectly)
	PV SEGMENT:
139	PST 2 Sp. z o.o.	1006407	Poland	full	52%
140	PST 3 Sp. z o.o.	1006959	Poland	full	52%
141	PST 5 Sp. z o.o.	1006673	Poland	full	52%
142	PST 6 Sp. z o.o.	1006827	Poland	full	52%
143	PST 7 Sp. z o.o.	1006181	Poland	full	52%
144	PST 8 Sp. z o.o.	1007213	Poland	full	52%
145	PST 9 Sp. z o.o.	1005948	Poland	full	52%
146	PST 10 Sp. z o.o.	1005248	Poland	full	52%
147	PST 11 Sp. z o.o.	1006315	Poland	full	52%
148	PST 12 Sp. z o.o.	1008118	Poland	full	52%
149	PST 13 Sp. z o.o.	1006161	Poland	full	52%
150	PST 14 Sp. z o.o.	1006396	Poland	full	52%
151	PST 16 Sp. z o.o.	1006378	Poland	full	52%
152	PST 18 Sp. z o.o.	1006192	Poland	full	52%
153	PST 19 Sp. z o.o.	1006671	Poland	full	52%
154	PST 20 Sp. z o.o.	1004948	Poland	full	52%
155	PST 21 Sp. z o.o.	1007825	Poland	full	52%
156	PST 22 Sp. z o.o.	1006185	Poland	full	52%
157	PST 23 Sp. z o.o.	1006869	Poland	full	52%
158	PST 24 Sp. z o.o.	1006339	Poland	full	52%
159	PST 25 Sp. z o.o.	1007207	Poland	full	52%
160	PST 27 Sp. z o.o.	1006924	Poland	full	52%
161	PST 29 Sp. z o.o.	1007211	Poland	full	52%
162	PST 30 Sp. z o.o.	1006726	Poland	full	52%
163	PST 31 Sp. z o.o.	1012587	Poland	full	52%
164	PST 32 Sp. z o.o.	1005210	Poland	full	52%
165	PST 33 Sp. z o.o.	1006926	Poland	full	52%
166	PST 34 Sp. z o.o.	1005130	Poland	full	52%
167	PST 35 Sp. z o.o.	1007064	Poland	full	52%
168	PST 36 Sp. z o.o.	1006826	Poland	full	52%
169	PST 37 Sp. z o.o.	1007603	Poland	full	52%
170	PST 38 Sp. z o.o.	1006454	Poland	full	52%
171	PST 39 Sp. z o.o.	1007597	Poland	full	52%
172	PST 40 Sp. z o.o.	1006899	Poland	full	52%
173	PST 41 Sp. z o.o.	1007982	Poland	full	52%
174	PST 42 Sp. z o.o.	1006895	Poland	full	52%
175	PST 43 Sp. z o.o.	1007265	Poland	full	52%
176	PST 46 Sp. z o.o.	1006543	Poland	full	52%
177	PST 48 Sp. z o.o.	1006665	Poland	full	52%
178	PST 50 Sp. z o.o.	1006953	Poland	full	52%
179	PST 52 Sp. z o.o.	1007208	Poland	full	52%
180	PST 54 Sp. z o.o.	1007201	Poland	full	52%
181	PV DASZYNA Sp. z o.o.	896299	Poland	full 1)	27%
182	Solar Energia 4 Sp. z o.o.	580709	Poland	full 1)	27%
183	PST 1 Sp. z o.o. (formerly: Elgór Sp. z o.o.)	976307	Poland	Full	52%
184	PST 4 Sp. z o.o.	1072083	Poland	full	52%
185	PST 15 Sp. z o.o.	1071652	Poland	full	52%

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 2023:

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•	On 30 January 2023, Mining Equipment Finance Sp. z o.o. w likwidacji (in liquidation), an associate, was deregistered from the National Court Register;
•	On 20 February 2023, the newly established company Finance PV 1 S.A., a wholly-owned subsidiary of Projekt-Solartechnik S.A., was entered in the National Court Register;
•	On 3 April 2023, the merger of Projekt-Solartechnik Group Sp. z o.o. (the acquirer) with PST Service Sp. z o.o. (the acquiree) was entered in the National Court Register. The transaction was effected in accordance with Art. 492.1.1 of the Commercial Companies Code, i.e. by transferring all assets of the acquiree to the acquirer in exchange for shares issued by the acquirer and allotted to Projekt-Solartechnik S.A., i.e. the sole shareholder in the acquiree;
•	On 18 April 2023, the merger of Projekt-Solartechnik S.A. (the acquirer) with Sun Deal Sp. z o.o. (the acquiree) was entered in the National Court Register. The transaction was effected in accordance with Art. 492.1.1 of the Commercial Companies Code, i.e. by transferring all assets of the acquiree to the acquirer;
•	On 20 April 2023, the newly established company Finance PV 2 Sp. z o.o., a wholly-owned subsidiary of Projekt-Solartechnik S.A., was entered in the National Court Register;
•	On 21 April 2023, the newly established company Finance PV 4 Sp. z o.o., a wholly-owned subsidiary of Projekt-Solartechnik S.A., was entered in the National Court Register;
•	On 24 April 2023, the newly established company Projekt Solartechnik Romania S.R.L of Romania was entered in the Romanian register of companies. The company is wholly-owned by Projekt-Solartechnik S.A.;
•	On 27 April 2023, the newly established company Finance PV 3 Sp. z o.o., a wholly-owned subsidiary of Projekt-Solartechnik S.A., was entered in the National Court Register;
•	On 28 April 2023, the newly established company Projekt Solartechnik France S.A.S. of France was entered in the French register of companies. The company is wholly-owned by Projekt-Solartechnik S.A.;
•	On 19 June 2023, the newly established company PST Spain SL of Spain was entered in the Spanish register of companies. The company is wholly-owned by Projekt-Solartechnik S.A.
•	On 26 June 2023, the Company's indirect subsidiary Projekt-Solartechnik S.A. acquired 100% shareholdings in the following companies: Invest PV 80 Sp. z o.o., Invest PV 81 Sp. z o.o., Invest PV 82 Sp. z o.o., Invest PV 83 Sp. z o.o., Invest PV 84 Sp. z o.o., Invest PV 85 Sp. z o.o., Invest PV 86 Sp. z o.o., Invest PV 87 Sp. z o.o.;
•	On 29 June 2023, the newly established company Famur S.A. was entered in the National Court Register. The company is wholly-owned by Grenevia S.A.;
•	On 3 July 2023, PST-Solarprojekt-Clausnitz GmbH of Germany was formed. The company is wholly-owned by Projekt-Solartechnik S.A.
•	On 20 July 2023, Grenevia S.A. signed an agreement to purchase an approximately 75.24% ownership interest in Total Wind PL Sp. z o.o. of Konikowo for PLN 20 million. Total Wind PL specialises in wind turbine installations as well as maintenance and replacement of key components from major manufacturers. The ownership interest was transferred to the Company upon payment of the purchase price, i.e. on 1 August 2023. The agreement gives Grenevia S.A. an option, vesting in 2026, to increase its shareholding in Total Wind PL by purchasing a 10.03% ownership interest therein from an entity controlled by the founder of Total Wind PL (unrelated to the Grenevia Group). The purchase price will be determined based on the proportion of the shares acquired and a fixed multiple of EBITDA for 2025, less net debt;
•	On 24 July 2023, the newly established company Bridge PV 1 Sp. z o.o. was entered in the National Court Register. 100% of shares in the company were acquired by Solartechnik Fund Fundusz Inwestycyjny Zamknięty;
•	On 27 July 2023, Projekt-Solartechnik S.A. sold 100% of shares in ENSON Sp. z o.o. (formerly PST Steel Sp. z o.o.) to an entity outside the Group. Until the date of loss of control, ENSON had been fully consolidated;
•	On 1 August 2023, PST Trade S.A. of Gdańsk was entered in the Business Register of the National Court Register. The company is wholly-owned by Projekt-Solartechnik S.A., a subsidiary of the Company;
•	On 10 October 2023, an agreement was signed to sell the 100% shareholding in Invest PV 7 Sp. z o.o. to the KGHM Polska Miedź Group;
•	On 16 November 2023, the subsidiary Projekt Solartechnik S.A. purchased a 30% interest in PST Development Sp. z o.o. from its minority shareholders, thus gaining the 100% ownership interest in the company;
•	On 28 November 2023, PST 4 Sp. z o.o. of Gliwice was entered in the Business Register of the National Court Register. The company is wholly-owned by Projekt-Solartechnik Development S.A., a subsidiary of the Company;
•	On 30 November 2023, the subsidiary Projekt-Solartechnik Development Sp. z o.o. sold 100% of shares in PST 44 Sp. z o.o. to Projekt Solartechnik Fund Fundusz Inwestycyjny Zamknięty, in which the Company's subsidiary Projekt Solartechnik S.A. holds 100% of investment certificates;
•	On 1 December 2023, PST 15 Sp. z o.o., wholly-owned by the Company's subsidiary Projekt-Solartechnik Development Sp. z o.o., was entered in the Business Register;
•	On 12 December 2023, the Company's subsidiary Projekt-Solartechnik Development Sp. z o.o. sold to PST 44 Sp. z o.o., another subsidiary of the Company, 100% of shares in PST 17 Sp. z o.o.;
•	On 29 December 2023, following a liquidation process, the registry court deregistered Polskie Maszyny Górnicze S.A. w likwidacji (in liquidation) from the National Court Register.

12. Accounting for acquisition of new subsidiaries

12.1. Selected accounting policies

When acquiring new subsidiaries, the Group determines whether the acquired assets constitute a business. If a business is acquired, the Group accounts for the transaction 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 27.

If the acquired assets and liabilities do not constitute a business, the Group accounts for the transaction as asset acquisition, i.e. it identifies and recognises the identifiable assets acquired and liabilities assumed, with the acquisition cost allocated to them in proportion to the respective fair values as at the acquisition date.

12.2. Acquisition of PV project special purpose vehicles

On 26 June 2023, the Company's indirect subsidiary Projekt-Solartechnik S.A. purchased 100% of shares in the following companies for a total consideration of PLN 13 million: Invest PV 80 Sp. z o.o., Invest PV 81 Sp. z o.o., Invest PV 82 Sp. z o.o., Invest PV 83 Sp. z o.o., Invest PV 84 Sp. z o.o., Invest PV 85 Sp. z o.o., Invest PV 86 Sp. z o.o., Invest PV 87 Sp. z o.o. The acquirees are PV project SPVs, which do not meet the definition of a business under IFRS 3. Since the most valuable assets of these SPVs are PV projects that the Group subsequently develops and constructs, the purchase price is allocated to these projects. For the Group, these projects represent 'work in progress' and are thus classified under 'inventories' in the statement of financial position

Given the Group's control over the assets of the SPVs and its significant equity interests and voting rights, it has both the power over the SPVs and exposure to their variable returns. Moreover, the Group can influence these returns through its power.

As at the date of acquisition of control over the SPVs, the following assets and liabilities were recognised:

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(PLN million)	Balance as at the date of acquiring control
Assets	7
inventories (projects and expenditures on construction of photovoltaic farms)	6
short-term receivables	1
Liabilities and provisions for liabilities	2
non-current liabilities	1
current liabilities	1
Net assets	5

12.3. Acquisition of shares in Total Wind PL Sp. z o.o.

On 20 July 2023, Grenevia S.A. signed an agreement to purchase an approximately 75.24% ownership interest in Total Wind PL Sp. z o.o. of Konikowo for PLN 20 million. Total Wind PL specialises in wind turbine installations as well as maintenance and replacement of key components from major manufacturers. The ownership interest was transferred to the Company upon payment of the purchase price, i.e. on 1 August 2023. The agreement gives Grenevia an option, vesting in 2026, to increase its shareholding in Total Wind PL by purchasing a 10.03% ownership interest therein from an entity controlled by the founder of Total Wind PL (unrelated to the Grenevia Group). The purchase price will be determined based on the proportion of the shares acquired and a fixed multiple of EBITDA for 2025, less net debt. As at 31 December 2023, the liability was measured at PLN 6 million, and was recognised in the consolidated statement of financial position under 'Long-term trade and other payables' in correspondence with a decrease in equity (Note 48).

Following the acquisition of 75.24% of shares in Total Wind PL Sp. z o.o., the Group obtained control of the company. The acquisition date was 1 August 2023. 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:

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(PLN million)	As at the acquisition date
Assets	23
property, plant and equipment	5
deferred tax asset	1
short-term receivables	11
cash and cash equivalents	6
Liabilities and provisions for liabilities	8
provisions for liabilities	2
non-current liabilities	1
current liabilities	5
Net assets	15
Non-controlling interests	4

For information on accounting for the acquisition, see the table below.

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(PLN million)	As at the acquisition date
Fair value of the consideration	20
75.24% interest in net assets of the acquiree	11
Goodwill	9

Total Wind PL Sp. z o.o. operates within the Famur segment. Goodwill recognised on the acquisition increased the goodwill allocated to that segment. The goodwill recognised on the acquisition of Total Wind PL reflects the company's potential for growth, stemming from its expertise and solid competitive position in the market of wind turbine services. 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.

Total Wind PL Sp. z o.o.'s revenue for the period from 1 August to 31 December 2023, i.e. the period from the acquisition of control to the end of the reporting year (revenue included in the consolidated statement of profit or loss), amounted to PLN 18 million, with PLN 2 million netted in profit. The company's revenue and net profit for 2023, amounted to PLN 41 million and PLN 3 million, respectively.

13. Loss of control of subsidiary

13.1. Selected accounting policies

Following a loss of control of a subsidiary, the Parent derecognises the former subsidiary's assets and liabilities, recognises all investments held in the former subsidiary at fair value as at the date of losing control and recognises gains or losses on the loss of control attributable to the former controlling interest.

In connection with sale of solar PV farms through the sale of special purpose vehicles (SPVs), in its consolidated financial statements the Group does not recognise a gain/​loss on the loss of control of an SPV in accordance with IFRS 10 but instead accounts for the sale of the SPV as:

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―	sale of inventories in the form of PV projects and/​or PV farms that have not commenced electricity production - in accordance with IFRS 15; and
―	sale of property, plant and equipment in the form of PV farms that have commenced electricity production - in accordance with IAS 16.

For detailed accounting policies applicable to such transactions, see Notes 16, 17 and 29.

13.2. Loss of control of subsidiary

On 27 July 2023, the Company's subsidiary Projekt-Solartechnik S.A. sold 100% of shares in ENSON Sp. z o.o. (formerly PST Steel Sp. z o.o.) to an entity outside the Group. Until the date of loss of control, ENSON had been fully consolidated.

Accordingly, the Group recognised net result on the loss of control of ENSON Sp. z o.o.

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(PLN '000)	Date of losing control
fair value of consideration received (a)	5
ENSON's assets (b)	1,481
ENSON's provisions and liabilities (c)	3,187
accumulated consolidation adjustments relating to assets (d)	13
Gain (loss) on loss of control (a-b+c+d)	1,724

14. Discontinued operations

14.1. Selected accounting policies

A 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:

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―	represents a separate major line of business or geographical area of operations,
―	is part of a single co-ordinated plan to dispose of a separate major line of business or geographical area of operations or
―	is a subsidiary acquired exclusively with a view to resale.

14.2. Operations discontinued by the Group

For the comparative period, i.e. the financial year 2022, the statement of profit or loss from discontinued operations presents the income and expenses of the Russia-based subsidiary OOO Famur and net result on the loss of control thereof, which was recognised as at 30 June 2022.

As at 31 December 2023, the Group reassessed its operational control of OOO Famur and confirmed its continued inability to exercise power over the subsidiary to influence its financial performance.

Both at the date of recognition of the loss of control of OOO Famur and at 31 December 2023, the Company held 100% ownership interest in OOO Famur. However, as a consequence of Russia's armed invasion of Ukraine, the Company found itself in an unusual situation where, despite being formally entitled to exercise ownership rights, it actually lost the ability to direct the company and was not reasonably able to exercise its power over the subsidiary. This resulted from a number of circumstances, including:

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―	restricted ability to dispose of OOO Famur's non-current assets (through sale or creation of mortgages over such assets), in connection with Decree 81 of the President of the Russian Federation dated 1 March 2022 imposing restrictions on the execution of transactions with persons/​entities controlled by foreign persons from countries which the Russian Federation has designated as unfriendly, including Poland,
―	loss of ability to inspect OOO Famur's day-to-day operations through visits paid by the Company's representatives, including its Directors, which were regular before the outbreak of the war. In view of the armed conflict, the Polish Ministry of Foreign Affairs posted on its website a strong warning against travel by Polish nationals to the Russian Federation;
―	inability to take stock of the company's inventories and other assets with the participation of the Parent's employee due to mobility restrictions and threats to health and life (Communication of the Ministry of Foreign Affairs),
―	inability to access the company's electronic banking platform as a result of sanctions imposed, and thus to exercise any supervision over OOO Famur's cash flows (before the sanctions were imposed, Grenevia had exercised such supervision by authorising all money transfers),
―	inability to influence the company's decisions (related to financial, commercial and operational matters) - hindered cooperation with OOO Famur employees due to the applicable sanctions and uncertain future of the company, especially with the Director General, as evident, among other things, in his failure to provide information and overstepping his authority in the execution of material agreements,
―	inability to employ trusted key personnel that would implement the Company's policy at OOO Famur due to mobility restrictions and threats to health and life (Communication of the Ministry of Foreign Affairs),
―	OOO Famur's restricted ability to pay dividends, which have been capped at half of its earnings, and additionally due to the introduction of a number of requirements that the company would have to satisfy to make such payment, as well as the obligation to pay in roubles, which given the sanctions imposed on the Russian Federation is practically impossible,
―	suspended disbursement of funds to OOO Famur by Sperbank, although the company has a valid credit facility agreement with that bank,
―	loss of the ability to shape OOO Famur's financing structure, including by raising funds from Russian banks which have refused to grant loans, and also due to the introduction of non-market requirements that are unacceptable to Grenevia S.A., i.e. the requirement for the Company to retain at least 51% equity interest in OOO Famur until repayment of the debt,
―	limited operational capabilities of OOO Famur, including as a result of restrictions on the supply of spare parts to Russia due to economic sanctions. Inability of OOO Famur to provide reliable financial forecasts and cash flow projections covering a period longer than one month, given the changing sanctions regime.

In March 2023, the Group commenced a process to divest the assets held in Russia, aiming for a total market exit. On 16 January 2024, the Company received approval from the competent Russian authority to sell its shareholding in OOO Famur. On 23 January 2024, an agreement was signed to sell the shares for PLN 3 million. The share sale transaction was concluded taking into account the conditions laid down in the Decree of the President of the Russian Federation, and therefore the valuation of OOO Famur was performed by an entity from the list of acceptable experts at the liquidation value. The transaction price resulted from the applicable regulations, i.e. was set below 50% of the valuation amount.

Gain on the sale of the shares of PLN 3 million will be recognised in the interim condensed financial statements of the Company for the three months ended 31 March 2024.

In the comparative period, the Group recognised net result on the loss of control of Kopex-Min A.D. of Serbia and an impairment loss on shares in the associate Famak S.A. following reclassification of its shares to non-current assets held for sale.

Statement of profit or loss from discontinued operations

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(PLN million)	12 months to 31 Dec 2023	12 months to 31 Dec 2022
Revenue	-	33
Cost of sales	-	21
Gross profit	-	12
Administrative expenses	-	3
Other income	-	-
Other expenses	-	10
Operating profit	-	-1
Gains (losses) on allowance for expected credit losses	-	1
Finance income	-	-
Finance costs	-	7
Gain (loss) on disposal or partial disposal of shares in subordinates and on loss of control	-	-63
Profit before tax	-	-70
Income taxes	-	2
Net profit from discontinued operations	-	-72

Statement of cash flows from discontinued operations

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(PLN million)	Note	12 months to 31 Dec 2023	12 months to 31 Dec 2022
Cash flows from operating activities		-	-8
Cash flows from investing activities		-	-5
Cash flows from financing activities		-	2
Total cash flows from discontinued operations		-	-11

15. Operating segments

15.1. Selected accounting policies

The 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.

15.2. Operating segments of the Grenevia Group

The Grenevia Group is a corporate group that integrates and develops business operations in four segments: utility-scale solar projects and PV solutions for businesses (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 S.A.); state-of-the-art industrial automation equipment and solutions for the power distribution sector (the Power Engineering segment led by Elgór+Hansen S.A.); 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 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 segment

The 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 mining applications. Its services also include the design and delivery of IT systems for monitoring the machinery operation, while improving safety and production efficiency. 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, South Africa, and Germany guarantee ongoing customer service and fast response in line with customer expectations. The segment is constantly raising the bar on service quality as well as proactively extending its reach to new locations where reliable mining and industrial systems are needed. Since 2022, measures have been taken to leverage the segment's existing manufacturing facilities to provide onshore wind turbine gearbox maintenance services. The growth of this business area is enabled by the segment's extensive experience of more than 40 years in manufacturing gearboxes and drive trains for various industrial sectors, coupled with robust manufacturing infrastructure, including an on-site dynamometer capable of load testing of gearboxes produced by the segment. Currently, a complete range of services is being developed for wind turbine gearbox repair and maintenance. This includes an assessment of the technical condition of a customer's equipment, including examination of gearbox interiors, comprehensive maintenance, and, in the case of worn-out or damaged units - their immediate replacement with units available in stock and then repair completed with dynamometer testing. In addition, the offering includes a gearbox storage service to ensure fast lead times and minimise downtime at wind turbine operators due to equipment failure. To further its ambitions in the wind power sector, on 20 July 2023 Grenevia S.A. acquired a 75.24% ownership interest in Total Wind PL Sp. z o.o., which specialises in wind turbine installations as well as maintenance and replacement of key components from major manufacturers.

Power Engineering segment

The Power Engineering segment is led by Elgór+Hansen S.A. ("E+H"), which can boast nearly 30 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, E+H 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, E+H 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. E+H's offerings comprise both proprietary solutions and those from leading global providers, ensuring comprehensive customer support at every stage of a project - from design and engineering to construction, documentation, and operation - both in Poland and in other markets.

PV segment

The segment of utility-scale solar projects ("PV segment") is comprised of Projekt Solartechnik (PST) Group companies, which specialise in development and turnkey delivery of utility-scale solar PV projects on an EPC basis. This comprehensive service ranges from initial site acquisition or review, through project design and engineering, procurement of required components, to the construction and later operation and maintenance of the project facilities. The PST Group has an expert team dedicated to project development, a design and engineering studio, and its own resources for project construction, execution, operation, and maintenance, specifically for PV projects. It also offers proprietary installation systems for solar PV farms. Apart from developing its own projects and securing properties for potential future development, the PST Group acquires projects at various stages of development from third parties. It also sells completed PV projects (mainly solar PV farms) as well as green electricity under corporate power purchase agreements (cPPA). The segment's portfolio of solar PV 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 project expenditure and solar photovoltaic farm capex.

E-mobility segment

In line with its strategic vision, in 2022 the Group invested in the e-mobility sector by acquiring an ownership interest in Impact Clean Power Technology S.A. of Warsaw ("Impact" or "ICPT"), a leading manufacturer of innovative, customised battery systems, mainly for buses, rail transport, specialised transport, and stationary energy storage. Impact's expertise in the manufacture of vehicle and industrial battery systems, supported by Grenevia S.A.'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 an original equipment manufacturer (OEM) and Tier-1 supplier of e-bus battery systems to Europe's 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 also develops utility-scale energy storage solutions. Impact's current manufacturing capacity transferred to GigafactoryX is about 0.6 GWh per year.

Other activities

Other activities encompass the remaining activities not classified into any of the identified segments, in particular holding company activities, which involve the development and financial support of the sustainability-related segments to ensure their adequate financial stability and operational business upscaling.

The Group's operations are not seasonal, except for the business of the PV segment to the extent involving electricity generation using the solar photovoltaic technology. In 2023, revenue from sale of electricity accounted for 3% of the Group's total revenue.

The table below presents the segments' results for 2023 and 2022:

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12 months to 31 Dec 2023 (PLN million)	Famur	Power Engineering	PV	E-mobility
Segment's revenue from external customers	1,114	110	78	335
Intersegment revenue	2	52	-	-
Revenue	1,116	162	78	335
Gross profit	462	48	39	29
Operating profit (loss)	332	24	-71	-46
Depreciation and amortisation	166	11	15	23
EBITDA	498	35	-56	-23
Net profit (loss) from continuing operations	277	24	-102	-42
Net profit (loss)	277	24	-102	-42

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12 months to 31 Dec 2023 (PLN million)	Other activities	Eliminations	Total
Segment's revenue from external customers	7	-	1,644
Intersegment revenue	1	-55	-
Revenue	8	-55	1,644
Gross profit	8	-5	581
Operating profit (loss)	-21	-2	216
Depreciation and amortisation	-	-17	198
EBITDA	-21	-19	414
Net profit (loss) from continuing operations	44	-57	144
Net profit (loss)	44	-57	144

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12 months to 31 Dec 2022 (PLN million)	Famur *	Power Engineering	PV	E-mobility
Segment's revenue from external customers	1,115	59	54	64
Intersegment revenue	-	41	-	-
Revenue	1,115	100	54	64
Gross profit	423	31	10	-
Operating profit (loss)	295	14	-42	-10
Depreciation and amortisation	143	10	6	3
EBITDA	438	24	-36	-7
Net profit (loss) from continuing operations	225	12	-71	-6
Net profit (loss)	160	12	-71	-6

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12 months to 31 Dec 2022 (PLN million)	Other activities *	Eliminations	Total
Segment's revenue from external customers	4	-	1,296
Intersegment revenue	135	-176	-
Revenue	139	-176	1,296
Gross profit	6	-1	469
Operating profit (loss)	-	-	257
Depreciation and amortisation	-	-13	149
EBITDA	-	-13	406
Net profit (loss) from continuing operations	48	-16	192
Net profit (loss)	41	-16	120

* In order to ensure comparability, the operating segments' figures for 2022 have been restated to match the Group's business structure as at 31 December 2023.

The tables below present the main items of the statement of financial position by segment.

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Assets and liabilities categories as at 31 Dec 2023	Famur	Power Engineering	PV	E-mobility
Assets	1,066	179	1,603	600
Non-current assets	504	50	719 *	317
Inventories	173	28	569 *	138
Short-term receivables	320	68	167	119
Cash and cash equivalents	52	33	126	26
Other assets, including loans	17	-	22	-
Liabilities and provisions for liabilities	292	47	1,532	218
Provisions for liabilities	49	6	5	42
Long-term borrowings and leases	30	5	1,205 **	82
Other non-current liabilities	6	-	2	-
Short-term borrowings and leases	21	2	64	18
Other current liabilities	186	34	256	76
Net assets	774	132	71	382

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Assets and liabilities categories as at 31 Dec 2023	Other Activities	Eliminations	Total
Assets	1,322	-981	3,789
Non-current assets	54	-57	1,587
Inventories	-	-47	861
Short-term receivables	21	-51	644
Cash and cash equivalents	373	-	610
Other assets, including loans	874	-826	87
Liabilities and provisions for liabilities	424	-917	1,596
Provisions for liabilities	5	-16	91
Long-term borrowings and leases	410	-808	924
Other non-current liabilities	-	-	8
Short-term borrowings and leases	6	-53	58
Other current liabilities	3	-40	515
Net assets	898	-64	2,193

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Assets and liabilities categories as at 31 Dec 2022 (PLN million)	Famur	Power Engineering	PV	E-mobility
Assets	1,075	151	1,115	539
Non-current assets	431	37	44	230
Inventories	205	31	810 *	154
Short-term receivables	262	60	119	148
Cash and cash equivalents	129	23	116	7
Other assets, including loans	48	-	26	-
Liabilities and provisions for liabilities	368	42	923	116
Provisions for liabilities	47	3	2	34
Long-term borrowings and leases	17	3	10	-
Other non-current liabilities	2	-	1	-
Short-term borrowings and leases	8	1	802	52
Other current liabilities	294	35	108	30
Net assets	707	109	192	423

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Assets and liabilities categories as at 31 Dec 2022 (PLN million)	Other Activities	Eliminations	Total
Assets	1,325	-535	3,670
Non-current assets	73	-27	788
Inventories	13	-9	1,204
Short-term receivables	61	-71	579
Cash and cash equivalents	664	-	939
Other assets, including loans	514	-428	160
Liabilities and provisions for liabilities	653	-527	1,575
Provisions for liabilities	2	-15	73
Long-term borrowings and leases	606	-7	629
Other non-current liabilities	-	-	3
Short-term borrowings and leases	7	-433	437
Other current liabilities	38	-72	433
Net assets	672	-8	2,095

* In 2022, in line with the adopted business model, solar PV farms were classified by the PV segment under inventories in view of their planned quick sale. However, given the market conditions affecting the current market prices of PV farms and electricity selling prices, the liquidity of market sales of completed farms declined, farms held in the PV segment's portfolio came online and commenced electricity production, and the PV segment began to derive economic benefits from electricity sales. Accordingly, a decision was made to reclassify, as of 1 October 2023, farms which have commenced electricity production from inventories to property, plant and equipment and to begin their depreciation to ensure the matching of revenue with costs and to reflect the wear and tear of those assets. Projects and farms under development/​construction continue to be recognised under inventories. The PV segment's inventories of PLN 810 million as at 31 December 2022 included PLN 238 million in completed solar PV farms. As of 1 October 2023, farms connected to the grid with a total value of PLN 398 million were reclassified from inventories to property, plant and equipment (of which PLN 238 million was attributable to farms connected in 2022, and PLN 160 million - to farms connected in the period 1 January-30 September 2023). In the three months ended 31 December 2023, farms connected to the grid with a value of PLN 167 million were transferred to property, plant and equipment. As at 31 December 2023, the total carrying amount of farms connected to the grid and recognised under non-current assets was PLN 524 million, net of a depreciation charge (PLN 6 million), an impairment loss (PLN 17 million), and a decrease resulting from sale (PLN 18 million).

** Following the reclassification of completed solar PV farms from inventories to property, plant and equipment, a right-of-use asset representing land leases for the construction of PV farms was also recognised, with a corresponding lease liability of PLN 73 million, recognised under 'Long-term borrowings and leases' as at 31 December 2023.

15.3. Revenue by geography

As 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.

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12 months to 31 Dec 2023 (PLN million)	Famur	Power Engineering	PV	E-mobility
Poland	984	161	78	229
Russia and CIS	29	-	-	-
European Union	32	-	-	43
Other Europe	4	-	-	63
USA	14	-	-	-
Other	53	1	-	-
Total	1,116	162	78	335
Total exports	132	1	-	106
Poland	984	161	78	229

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12 months to 31 Dec 2023 (PLN million)	Other activities	Eliminations	Total
Poland	8	-54	1,406
Russia and CIS	-	-	29
European Union	-	-	75
Other Europe	-	-	67
USA	-	-	14
Other	-	-1	53
Total	8	-55	1,644
Total exports	-	-1	238
Poland	8	-54	1,406

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12 months to 31 Dec 2022 (PLN million)	Famur *	Power Engineering	PV	E-mobility
Poland	624	86	54	59
Russia and CIS	122	1	-	-
European Union	12	-	-	4
Other Europe	1	-	-	1
USA	176	-	-	-
Other	180	13	-	-
Total	1,115	100	54	64
Total exports	491	14	-	5
Poland	624	86	54	59

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12 months to 31 Dec 2022 (PLN million)	Other activities *	Eliminations	Total
Poland	139	-176	786
Russia and CIS	-	-	123
European Union	-	-	16
Other Europe	-	-	2
USA	-	-	176
Other	-	-	193
Total	139	-176	1,296
Total exports	-	-	510
Poland	139	-176	786

* In order to ensure comparability, the operating segments' figures for 2022 have been restated to match the Group's business structure as at 31 December 2023.

15.4. Major customers

In 2023, revenue from sales to four customers exceeded individually 10% of the Group's revenue. The customers are not associated with the Group.

Revenue from these customers was as follows:

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	PGG S.A.: PLN 328 million (Famur segment and Power Engineering segment)
	JSW S.A.: PLN 282 million (Famur segment and Power Engineering segment)
	Węglokoks S.A.: PLN 195 million (Famur segment)
	Solaris Bus & Coach Sp. z o.o.: PLN 198 million (E-mobility segment)

In 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:

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	PGG S.A.: PLN 240 million (Famur segment and Power Engineering segment)
	JSW S.A.: PLN 226 million (Famur segment and Power Engineering segment)
	Century Mining LLC: PLN 170 million (Famur segment)

16. Revenue from contracts with customers

16.1. Selected accounting policies

In 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 2023, the Group's business consisted primarily in the manufacture and sale of machinery and batteries for electric mobility.

• 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).

- Variable consideration

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.

- Warranties

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 warranty. 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

In 2022, the Group's PV segment operated on the basis of two models:

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	Model A - The main objective of this business model was 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 PV farm. In this model, the Group recognised acquired assets that did not meet the definition of a business under IFRS 3 as inventories (work in progress).
	Model B - The main objective of this model was to derive economic benefits from the sale of electricity produced by solar PV farms constructed by the Group. Under this model, the Group recognised acquired assets that did 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).

Given the volatility of relevant economic and business factors (the market prices of farms and selling prices of electricity), the Group is usually unable to determine at the time of initial recognition how a particular farm will be classified, i.e. under Model A or Model B. The Group intends to flexibly manage its assets depending on transactional prices of solar PV farms and expected benefits to be derived from electricity sales.

Accordingly, a decision was made to reclassify, as of 1 October 2023, farms which have commenced electricity production from inventories to property, plant and equipment and to begin their depreciation to ensure the matching of revenue with costs and to reflect the wear and tear of those assets. Therefore, the Group recognises solar PV farms placed in service under Model B (as property, plant and equipment), while projects and farms in the design phase/​under construction - under Model A (as inventories).

IFRS 15 will apply to the recognition of sales of PV projects or farms under construction constituting inventories (Model A), while IAS 16 will apply to the recognition of sales of PV farms classified as property, plant and equipment.

Despite the recognition of solar PV farms producing electricity as property, plant and equipment, the Group will nevertheless seek to sell them in line with its main business objective (depending on the prevailing market conditions).

The Group's PV segment also provides various PV system construction, installation and maintenance services to external customers.

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:

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―	fewer formalities as SPVs are holders of required licences and permits, have won renewable energy auctions, have in place site lease contracts, etc.,
―	easier due diligence,
―	easier contracting for external financing,
―	facilitated sale of projects at various stages of completion and complete farms in the form of SPVs.

The Grenevia Group's business objective is to generate revenue from sale of products in the form of:

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―	ready-to-build PV farms,
―	completed PV farms, and
―	electricity and guarantees of origin for electricity generated by completed PV farms.

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 PV projects/​farms as follows:

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Model A:

―	proceeds from sale of solar PV farms (i.e. shares in SPVs) are recognised as revenue,
―	the amount of assets sold is recognised as cost of sales.

Model B:

―	gain on sale of solar PV farms classified as property, plant and equipment (separate item in the statement of profit or loss).

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 PV farm) in accordance with IFRS 15 or IAS 16.

Presentation of such transactions in accordance with IFRS 15 or IAS 16 is consistent with the Group's overriding business objective, while 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. 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.

In 2022, the Group sold one SPV owning solar PV farm projects. Revenue from the transaction and gain (loss) on the disposal were immaterial. In 2023, the Group sold a portfolio of PV farms classified as property, plant and equipment and posted a gain on the sale of PLN 7 million, disclosed under 'Gain on sale of solar PV farms classified as property, plant and equipment' (Note 17).

16.2. Revenue from contracts with customers

The 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.

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(PLN million)	12 months to 31 Dec 2023	12 months to 31 Dec 2022
Revenue from contracts with customers (IFRS 15)	1,331	1,010
Lease income (IFRS 16)	313	286
Total revenue	1,644	1,296

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.

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(PLN million)	12 months to 31 Dec 2023	12 months to 31 Dec 2022
Poland	1,093	498
Russia and CIS	29	123
European Union	75	16
Other Europe	67	2
USA	14	176
Other	53	195
Total revenue from contracts with customers	1,331	1,010
including:
Revenue recognised in accordance with the percentage of completion method	314	478
Other income recognised in accordance with IFRS 15	1,017	532

Contract assets and liabilities

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(PLN million)	As at 31 Dec 2023	As at 31 Dec 2022
amounts due under contracts	88	114
advance payments received	11	66

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 31 December 2023 the Group had performance obligations to deliver machinery and equipment for a total amount of PLN 112 million (31 December 2022: PLN 58 million). These deliveries will be made:

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―	in the first half of 2024 (PLN 57 million),
―	in the second half of 2024 (PLN 13 million),
―	in the first quarter of 2025 (PLN 42 million).

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 63 million.

Revenue recognised in 2023 and included in the balance of contract liabilities at the beginning of the period amounted to PLN 66 million.

16.3. Revenue from sale of electricity

The Group maintains a diverse portfolio of solar PV 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 PV 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 83,115 MWh.

The average auction price they have been awarded is PLN 319/​MWh (unadjusted).

In 2023, adjusted for inflation, this price is PLN 406/​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 support scheme in the fourth quarter of 2024.

The total volume of electricity declared by those power stations for delivery under the scheme (i.e. over the course of 15 years) is 1,310,337 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.

As part of the auction-based support scheme, the Management Boards of the Group companies decide, prior to the deadline for joining the scheme, on:

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•	entering or not entering an auction;
•	date of entering the auction;
•	volume distribution over the support period.

These decisions are based on a comparison of the auction prices and projected future market conditions (including price levels and their daily volatility over 12 and 24-hour periods). When deciding whether to enter an auction, the Management Boards assess whether the company would be the scheme's beneficiary or net payer. So far, such analyses have not indicated that any of the Group companies would be net payers. When deciding on the date of entry and volume distribution, the Management Boards of the Group companies maximise funds received from the Settlement Administrator, prioritising initial settlement periods. To account for settlements under the auction scheme, the Group applies the revenue method in accordance with IAS 20 Government Grants.

In 2023, total revenue from sale of electricity was PLN 54 million (compared with PLN 16 million in 2022).

17. Gain on sale of solar PV farms classified as property, plant and equipment

17.1. Selected accounting policies

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 PV farm projects at various stages of completion is mostly effected through the sale/​purchase of such SPVs rather than projects themselves (for details, see Note 16.1). 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. 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.

A decision was made to reclassify, as of 1 October 2023, farms which have commenced electricity production from inventories to property, plant and equipment and to begin their depreciation to ensure the matching of revenue with costs and to reflect the wear and tear of those assets. Thus, sale of solar PV farms classified as property, plant and equipment (through the sale of special purpose vehicles (SPVs)) is accounted for in accordance with IAS 16, i.e. in the statement of profit or loss as a gain (loss) on sale of property, plant and equipment. As the Group is expanding its PV business that involves the development of PV projects, construction and sale of solar PV farms and generation of electricity from its own farms, this item is set to be material to the Group going forward. Therefore, a decision was made to present it as a separate item in the statement of profit or loss.

17.2. Gain on sale of solar PV farms classified as property, plant and equipment

Given their significant contribution to the Group's cash flows, the Group decided to disclose proceeds and costs netting to a gain on sale of solar PV farms classified as property, plant and equipment.

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(PLN million)	12 months to 31 Dec 2023	12 months to 31 Dec 2022
Proceeds from sale of solar PV farms	25	-
Cost of solar PV farms sold	18	-
Total	7	-

18. Lease income

Lease 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 29. The following table presents the maturity dates of the undiscounted lease payments for shearer loaders and roadheaders delivered to customers under leases and remaining part of the Group's assets:

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(PLN million)	As at 31 Dec 2023	As at 31 Dec 2022
up to 1 year	334	279
1-2 years	173	149
2-3 years	39	54
Total	546	482

19. Costs by nature of expense

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(PLN million)	12 months to 31 Dec 2023	12 months to 31 Dec 2022
depreciation and amortisation	198	149
raw materials and consumables used	929	716
services	321	275
taxes and charges	14	13
salaries and wages	275	218
social security contributions and other benefits	61	50
other costs by nature of expense	28	29
Total costs by nature of expenses	1,826	1,450
Change in inventories, products, accruals and deferrals	-30	-237
Work performed by entity and capitalised	-529	-249
Distribution costs	-45	-28
Administrative expenses	-212	-162
Cost of merchandise and materials sold	60	53
Cost of sales	1,070	827

20. Workforce and employment costs

The table below presents the average number of employee at the Group.

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	12 months to 31 Dec 2023	12 months to 31 Dec 2022
Number of persons	2,560	2,453

The table below presents the cost of salaries and wages at the Group (the data includes the Management Board):

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(PLN million)	12 months to 31 Dec 2023	12 months to 31 Dec 2022
Salaries and wages	275	218
social security contributions and other benefits	61	50
Total	336	268

21. Other income

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(PLN million)	12 months to 31 Dec 2023	12 months to 31 Dec 2022
compensation, damages *	12	12
gain on disposal of non-financial non-current assets **	7	27
revaluation of investment property	5	-
reversed provisions	5	6
stock-taking surplus	2	-
scrapping	-	5
other	5	6
Total other income	36	56

* Compensation and damages included mainly amounts charged to customers for damage to and deficiencies in equipment returned from leases by mines.

** 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.

22. Other expenses

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(PLN million)	12 months to 31 Dec 2023	12 months to 31 Dec 2022
impairment losses on non-financial assets *	56	9
warranty repairs	34	36
donations **	22	8
recognised provisions ***	14	14
costs of dismantling, decommissioning of property, plant and equipment	5	4
penalties, fines and damages/​compensation	5	2
stock-taking deficit	5	-
other	3	5
Total other expenses	144	78

* Including impairment losses and write-downs of PLN 28 million recognised in 2023 on the PV segment's solar PV farms (completed and under construction), impairment losses of PLN 13 million related to optimisation of the PV segment's operating assets and PLN 15 million inventory write-downs in the Famur segment on parts for shearer loaders and roadheaders in the case of which the Group is recording a decreasing number of lease contracts and on materials and semi-finished products which cannot be used for its day-to-day manufacturing and maintenance activities.

** The Grenevia Group, as a socially responsible business, made cash donations totalling PLN 22 million, mainly to support the BEMKE Campus Foundation's statutory objectives and the TDJ Foundation's statutory objectives spanning Education and Development. In particular, the financial support is intended to help establish a unique campus fostering comprehensive development of children and youth, open for anyone to access at the primary and secondary education levels. Funds are also donated to support other educational and development projects dedicated to children of the Grenevia Group employees to help them discover and develop interests, encourage learning and support their development. For a detailed description of projects run by these foundations, see the Non-Financial Report of the Grenevia Group for 2023.

*** Including a PLN 8 million provision for warranty repairs (2023).

23. Finance income

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(PLN million)	12 months to 31 Dec 2023	12 months to 31 Dec 2022
interest *	33	48
sale of receivables **	15	-
foreign exchange gains	7	-
dividend	1	2
accounting for forward contracts ***	-	9
other	2	1
Total finance income	58	60

* Interest relates mainly to interest on bank deposits.

** Sale of OOO Famur's receivables for which impairment losses had been recognised.

** In 2022, finance income from measurement of derivative financial instruments represented measurement of an interest rate swap (IRS) and measurement and settlement of currency forwards which are not subject to hedge accounting.

24. Finance costs

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(PLN million)	12 months to 31 Dec 2023	12 months to 31 Dec 2022
interest *	72	56
commission fees	4	4
revaluation of investments **	3	8
foreign exchange losses	-	7
bank guarantees	-	2
other	2	-
Total finance costs	81	77

* Including interest on notes of PLN 36 million (2022: PLN 43 million), interest on borrowings of PLN 26 million (2022: PLN 13 million) and lease interest of PLN 7 million.

** Revaluation of investments in 2022 represented an impairment loss recognised on shares in Shandong Tagao Mining Equipment of China.

25. Income taxes

25.1. Selected accounting policies

Tax 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.

25.2. Income tax disclosed in the statement of profit or loss

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(PLN million)	12 months to 31 Dec 2023	12 months to 31 Dec 2022
income tax for reporting period	69	63
deferred tax	-10	-4
Total income tax	59	59

For information on tax inspections conducted at the Company and on tax proceedings it is party to, see Note 4.3.

25.3. Reconciliation of effective tax rate

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(PLN million)	12 months to 31 Dec 2023	12 months to 31 Dec 2022
profit before tax	203	251
current tax expense	59	59
Effective tax rate	29%	24%
permanent differences between non-taxable income and non-deductible expenses	80	56
tax authorities' decisions - reduction of tax-deductible expenses for 2017 and 2018	47	-
tax credits	-19	-
effect of application of tax rates at foreign operations	4	6
unrecognised asset for tax loss	3	-
effect of application of 9% tax rate	-1	-
Result adjusted for differences that reconcile the nominal tax rate	317	313
nominal income tax rate	19%	19%

25.4. Deferred tax assets and liabilities

Deferred tax assets

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(PLN million)	As at 31 Dec 2023	As at 31 Dec 2022
Deferred tax assets, including:	113	67
recognised in profit or loss	113	67
- taxable difference between carrying amounts of property, plant and equipment and their tax base	29	4
- interest payable	26	6
- impairment losses on non-financial assets	15	15
- provision for costs	9	7
- impairment losses on financial assets	7	5
- employee benefits	7	6
- provision for warranty repairs	6	5
- losses on long-term contracts	4	8
- tax losses	4	4
- provision for coal and coal allowance for retired employees	2	2
- accounting for lease contracts	-	3
- un-invoiced selling expenses	-	1
- other	4	1
recognised in equity	-	-

Deferred tax liabilities

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(PLN million)	As at 31 Dec 2023	As at 31 Dec 2022
Deferred tax liabilities, including:	66	46
recognised in profit or loss	64	38
- taxable difference between carrying amounts of non-current assets and their tax base	29	20
- interest, fees and commissions on bank borrowings	28	7
- penalties and damages/​compensation	3	1
- foreign exchange gains	2	6
- profit (loss) on long-term contracts	2	4
recognised in equity	2	8
- actuarial valuation	1	1
- cash flow hedges	1	7

Excess of deferred tax assets over deferred tax liabilities disclosed in the statement of financial position

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(PLN million)	As at 31 Dec 2023	As at 31 Dec 2022
Deferred tax asset	113	67
Deferred tax liabilities	66	46
Excess of deferred tax asset over deferred tax liabilities	47	21

As at 31 December 2023, the amount of deductible temporary differences for which no deferred tax asset was recognised was PLN 249 million, of which:

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―	PLN 241 million was attributable to tax losses, including on financing activities,
―	PLN 8 million represented impairment losses on shares.

26. Earnings per share

26.1. Selected accounting policies

The 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 2023 nor in the comparative period Grenevia shares were diluted.

26.2. Earnings per share

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	12 months to 31 Dec 2023	12 months to 31 Dec 2022
Net profit from continuing operations attributable to owners of the Parent used to calculate earnings per ordinary share (PLN million)	212	230
Basic earnings per ordinary share attributable to owners of the Parent (PLN)	0.37	0.27
Basic earnings from continuing operations per ordinary share attributable to owners of the Parent (PLN)	0.37	0.40
Basic earnings (loss) from discontinued operations per ordinary share (PLN)	0.00	-0.13
Diluted earnings per ordinary share attributable to owners of the Parent (PLN)	0.37	0.27
Diluted earnings from continuing operations per ordinary share attributable to owners of the Parent (PLN)	0.37	0.40
Diluted earnings (loss) from discontinued operations per ordinary share (PLN)	0.00	-0.13

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 17 March 2022, the District Court for Katowice-Wschód registered a reduction in the Company's share capital following cancellation of 82,539 ordinary shares.

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	12 months to 31 Dec 2023	12 months to 31 Dec 2022
weighted average number of shares	574,680,673	574,697,633

27. Goodwill

27.1. Selected accounting policies

Goodwill 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.

27.2. Goodwill allocation to cash-generating units

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(PLN million)	As at 31 Dec 2023	As at 31 Dec 2022
Goodwill allocated to the Famur segment *	76	67
Goodwill allocated to the E-mobility segment	124	124
Total goodwill	200	191

* The increase is attributable to the acquisition of shares in Total Wind PL Sp. z o.o. (see Note 12).

27.3. Annual impairment test in the Famur segment

Goodwill of PLN 76 million is concentrated in the Famur segment (solutions for the mining and wind power sectors), of which PLN 9 million arose on the acquisition of Total Wind PL Sp. z o.o. and was tested separately for impairment.

At the end of the financial year, 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 11.73% for the five-year period and for the residual value (14.73% in 2022). 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 mining machinery. Specifically, the updated cash-flow projection reflects the following external factors:

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―	the medium-term impact of the war in Ukraine, which has been a driver of prices of and demand for the segment's offerings, especially aftermarket products and services, as a result of the need to quickly implement investment projects to increase production;
―	in the long term, the closure of thermal coal mines in Poland until 2049, which implies discontinuation of major capital investment plans by domestic customers. The likelihood of such developments increased recently with the execution by the Polish government in December 2022 of a contract for the construction of the first nuclear power plant in Poland;
―	pressures from financial institutions to restrict financing for the coal industry,
―	development of the wind power market.

The forecast assumes the average year-on-year revenue decline of 6%, as a combined effect of an 8% decrease in revenue from sale of solutions for the mining industry and a 20% increase in revenue from the wind gearbox repair/​refurbishment business, and the average annual operating margin of 17%. 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. The excess of recoverable amount over carrying amount of the unit was PLN 120 million.

Sensitivity analysis for likely changes in the discount rates, sales growth and operating profit:

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Changes in assumptions:	Difference between recoverable amount and carrying amount (PLN million)
- 1% increase in discount rate	97
- 10% decrease in EBIT	-20
- 10% decrease in revenue	-70
- 1% decrease in discount rate	145
- 10% increase in EBIT	166
- 10% increase in revenue	232

In the comparative period, i.e. as at 31 December 2022, as a result of an impairment test, no impairment loss was recognised in the Famur segment.

The impairment test of the Famur segment's goodwill was performed separately for goodwill arising on the acquisition of Total Wind PL Sp. z o.o. 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 10.22% for the five-year period and for the residual value. The five-year forecast assumes safe revenue projections. The assumptions were based on the current conditions in the wind power sector and prospects for its further development. The forecast assumes the average year-on-year revenue growth of 15% and the average annual operating margin of 16%. It also assumes that the segment companies will continue as going concerns after the forecast period. The perpetuity formula was used to determine the residual value, with a steady growth rate of 1%.

No indication of impairment of goodwill was identified; accordingly, no impairment loss on goodwill was recognised. The excess of recoverable amount over carrying amount of the unit was PLN 83 million.

Sensitivity analysis for likely changes in the discount rates, sales growth and operating profit:

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Changes in assumptions:	Difference between recoverable amount and carrying amount (PLN million)
- 1% increase in discount rate	79
- 10% decrease in EBIT	72
- 10% decrease in revenue	72
- 1% decrease in discount rate	87
- 10% increase in EBIT	93
- 10% increase in revenue	93

27.4. Annual impairment test in the E-mobility segment

Following the acquisition of Impact Clean Power Energy S.A. of Warsaw in November 2022, goodwill was recognised and the trademark value was determined.

The E-mobility segment was tested for impairment as at 31 December 2023 by comparing the carrying amount to the recoverable amount of the cash-generating unit to which goodwill was allocated. The recoverable amount was determined using the discounted cash flow method, based on the value in use, which was calculated in reliance on a cash flow forecast derived from the financial budgets approved by the senior management for the period until 2033. The discount rate applied was 9.49%. The forecast includes safe revenue projections for the E-mobility segment. It assumes the average year-on-year revenue growth of 15% and the average annual operating margin of 7% for the ten-year period. It also assumes that the segment companies will continue as going concerns after the forecast period. The perpetuity formula was used to determine the residual value, with a steady growth rate of 2%. No indication of impairment of goodwill was identified; accordingly, no impairment loss on goodwill was recognised. The excess of recoverable amount over carrying amount of the unit was PLN 192 million.

Sensitivity analysis for likely changes in the discount rates, revenue and operating profit:

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Changes in assumptions:	Difference between recoverable amount and carrying amount (PLN million)
- 1% increase in discount rate	71
- 10% decrease in EBIT	95
- 10% decrease in revenue	95
- 1% decrease in discount rate	353
- 10% increase in EBIT	290
- 10% increase in revenue	290

27.5. Annual impairment test in the PV segment

The value of the PV segment's assets relates mainly to solar PV farms, both completed and under construction. The key factor in determining the value of those assets is the current market price of PV farms per 1MW of generation capacity. As an auxiliary valuation method, discounted cash flows (DCF) are also prepared based on forecast price trends, electricity production and maintenance costs.

As at the end of the financial year, impairment was tested by comparing the carrying amount to the market value of a PV farm, as well as the recoverable amount of the cash-generating unit (project/​SPV). The recoverable amount was determined based on the market price of a PV farm per 1MW of generation capacity, put at PLN 3.7 million per 1MW. Asset impairment tests were carried out for individual PV farm projects under construction or already constructed.

A PLN 28 million asset impairment was identified, including PLN 17 million for farms completed and transferred to property, plant and equipment.

Sensitivity analysis for changes in the transactional price of PV farms per 1MW of generation capacity:

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Changes in assumptions:	Difference between recoverable amount and carrying amount (PLN million)
- farm value PLN 3.1 million/​1MW	-124
- farm value PLN 3.4 million/​1MW	-63
- farm value PLN 4.0 million/​1MW	-9
- farm value PLN 4.3 million/​1MW	-2

28. Other intangible assets

28.1. Selected accounting policies

An 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:

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capitalised development expenses	1-5 years
trademarks	1-5 years
software	2 years

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 finite useful lives.

28.2. Movements in other intangible assets

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1 Jan-31 Dec 2023 (PLN million)	capitalised development expenses	acquired licences, patents and similar assets	other intangible assets	Expenditure on intangible assets	Total
initial (gross) carrying amount at beginning of period	91	109	60	16	276
accumulated amortisation and impairment losses at beginning of period	78	29	60	5	172
net carrying amount at beginning of period	13	80	-	11	104
increases	4	-	17	3	24
decreases	-	-	-	-11	-11
amortisation	-8	-17	-1	-	-26
net carrying amount at end of period	9	63	16	3	91
initial (gross) carrying amount value at end of period	95	109	77	8	289
accumulated amortisation and impairment losses at end of period	86	46	61	5	198

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1 Jan-31 Dec 2022 (PLN million)	capitalised development expenses	acquired licences, patents and similar assets	other intangible assets	Expenditure on intangible assets	Total
initial (gross) carrying amount at beginning of period	59	29	50	8	146
accumulated amortisation and impairment losses at beginning of period	53	27	46	3	129
net carrying amount at beginning of period	6	2	4	5	17
increases	2	2	-	4	8
decreases	-	-	-	-3	-3
amortisation	-3	-2	-4	-	-9
acquisition of control of subsidiary	8	78	-	5	91
net carrying amount at end of period	13	80	-	11	104
initial (gross) carrying amount value at end of period	91	109	60	16	276
accumulated amortisation and impairment losses at end of period	78	29	60	5	172

29. Property, plant and equipment

29.1. Selected accounting policies

Property, 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:

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	Annual depreciation rate
land and perpetual usufruct rights	-
buildings and premises	2 - 10%
civil engineering structures	4 - 10%
steam generators and power units	7%
general plant and equipment	3 - 30%
special plant and equipment	10 - 50%
machinery	10 - 26%
vehicles	16 - 52%
tools, devices and fixtures	16 - 30%
solar PV farms	4%

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 technical personnel of the Group companies based on their experience and available market information.

PV farms represent a major part of property, plant and equipment (with a carrying amount as at 31 December 2023 of PLN 524 million, accounting for a 46% share). In 2022, in line with the adopted business model, solar PV farms were classified by the PV segment under inventories in view of their planned quick sale. However, given the market conditions affecting the current market prices of PV farms and electricity selling prices, the liquidity of market sales of completed farms declined, farms held in the PV segment's portfolio came online and commenced electricity production, and the PV segment began to derive economic benefits from electricity sales. Accordingly, a decision was made to reclassify, as of 1 October 2023, farms which have commenced electricity production from inventories to property, plant and equipment and to begin their depreciation to ensure the matching of revenue with costs and to reflect the wear and tear of those assets. Projects and farms under development/​construction continue to be recognised under inventories. As at 31 December 2022, the value of solar PV farms included in inventories and connected to the grid was PLN 238 million. As at the reclassification date, i.e. 1 October 2023, the total value of the connected PV farms was PLN 398 million (of which PLN 238 million was attributable to farms connected in 2022, and PLN 160 million - to farms connected in the period 1 January-30 September 2023).

Another material item of property, plant and equipment (with a carrying amount as at 31 December 2023 and 31 December 2022 of PLN 178 million and PLN 151 million, respectively, i.e. 16% and 40% of the total) are 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:

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	the asset has been classified as held for sale in accordance with IFRS 5;
	the asset has been retired;
	the asset has been fully depreciated.

29.2. Property, plant and equipment by type

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(PLN million)	As at 31 Dec 2023	As at 31 Dec 2022
property, plant and equipment	979	334
property, plant and equipment under construction	38	17
right-of-use assets	118	33
Total property, plant and equipment	1,135	384

29.3. Movements in property, plant and equipment

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1 Jan-31 Dec 2023 (PLN million)	Land (including perpetual usufruct rights)	Buildings, premises and civil engineering structures	Plant and equipment used by the Company	Plant and equipment used by lessees
initial (gross) carrying amount at beginning of period	21	166	246	557
accumulated depreciation and impairment losses at beginning of period	-	68	203	396
net carrying amount at beginning of period	21	98	43	161
increases	-	93	169	167
decreases	-	-	-21	-2
reclassification *	1	71	339	-
depreciation	-	-9	-21	-128
acquisition of control of subsidiary	-	-	-	-
impairment losses (decreases "+", increases "-")	-	-1	-17	-
net carrying amount at end of period	22	252	492	198
initial (gross) carrying amount value at end of period	22	329	740	579
accumulated depreciation and impairment losses at end of period	-	77	248	381

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1 Jan-31 Dec 2023 (PLN million)	Vehicles	Other property, plant and equipment	Total
initial (gross) carrying amount at beginning of period	19	20	1,029
accumulated depreciation and impairment losses at beginning of period	11	17	695
net carrying amount at beginning of period	8	3	334
increases	4	4	437
decreases	-	-	-23
reclassification *	-	-	411
depreciation	-4	-2	-164
acquisition of control of subsidiary	-	2	2
impairment losses (decreases "+", increases "-")	-	-	-18
net carrying amount at end of period	8	7	979
initial (gross) carrying amount value at end of period	21	27	1,718
accumulated depreciation and impairment losses at end of period	13	20	739
* PLN 398 million relates to reclassification of solar PV farms from inventories (including PLN 238 million attributable to farms connected in 2022, and PLN 160 million - to farms connected in the period 1 January-30 September 2023), while PLN 13 million relates to reclassification from investment property.

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1 Jan-31 Dec 2022 (PLN million)	Land (including perpetual usufruct rights)	Buildings, premises and civil engineering structures	Plant and equipment used by the Company	Plant and equipment used by lessees
initial (gross) carrying amount at beginning of period	25	195	283	477
accumulated depreciation and impairment losses at beginning of period	-	66	238	360
net carrying amount at beginning of period	25	129	45	117
increases	-	2	15	153
decreases	-1	-2	-	-3
reclassification	-3	-6	-5	-
depreciation	-	-9	-13	-105
exchange differences	-	12	1	-
acquisition of control of subsidiary	-	-	2	-
loss of control of subsidiary	-	-28	-2	-1
net carrying amount at end of period	21	98	43	161
initial (gross) carrying amount value at end of period	21	166	246	557
accumulated depreciation and impairment losses at end of period	-	68	203	396

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1 Jan-31 Dec 2022 (PLN million)	Vehicles	Other property, plant and equipment	Total
initial (gross) carrying amount at beginning of period	15	24	1,019
accumulated depreciation and impairment losses at beginning of period	12	19	695
net carrying amount at beginning of period	3	5	324
increases	8	1	179
decreases	-	-	-6
reclassification	-	-	-14
depreciation	-3	-2	-132
exchange differences	-	-	13
acquisition of control of subsidiary	1	-	3
loss of control of subsidiary	-1	-1	-33
net carrying amount at end of period	8	3	334
initial (gross) carrying amount value at end of period	19	20	1,029
accumulated depreciation and impairment losses at end of period	11	17	695

30. Long-term receivables

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(PLN million)	Note	As at 31 Dec 2023	As at 31 Dec 2022
deposits with Energy Regulatory Office		17	-
Long-term prepayments and accrued income		7	9
security deposits		3	3
Total long-term receivables		27	12

31. Investment property

31.1. Selected accounting policies

The 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.

31.2. Investment property

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(PLN million)	As at 31 Dec 2023	As at 31 Dec 2022
land, including land usufruct rights	30	17
buildings, premises and civil engineering structures	41	48
total land, buildings and structures	71	65
right-of-use assets	7	7
Total investment property	78	72

31.3. Movements in investment property

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(PLN million)	12 months to 31 Dec 2023	12 months to 31 Dec 2022
carrying amount at beginning of period	65	49
increases	30	-
properties reclassified from property, plant and equipment and property, plant and equipment held for sale	-	14
properties reclassified to property, plant and equipment and property, plant and equipment held for sale	-29	-
reclassified properties measured at fair value through other comprehensive income	-	9
properties measured at fair value through profit or loss	5	-
decrease (disposal)	-	-7
carrying amount at end of period	71	65

31.4. Income and expenses related to investment property

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(PLN million)	12 months to 31 Dec 2023	12 months to 31 Dec 2022
rental income	6	4
direct operating expenses	2	2

32. Other non-current financial assets

32.1. Selected accounting policies

'Other non-current financial assets' include investments in non-consolidated subsidiaries and associates 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.

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.

32.2. Other non-current financial assets

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(PLN million)	As at 31 Dec 2023	As at 31 Dec 2022
shares in non-consolidated subsidiaries *	3	4
long-term loans	6	-
Total other non-current financial assets	9	4

* Subsidiaries which are not consolidated (whether due to immateriality or dormancy) are listed in Note 11.

33. Inventories

33.1. Selected accounting policies

The 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.

The Group's inventories include PV farm projects at various stages of development and PV farms under construction. In 2022, in line with the adopted business model, solar PV farms connected to the grid were also classified by the PV segment under inventories in view of their planned quick sale. However, given the market conditions affecting the current market prices of PV farms and electricity selling prices, the liquidity of market sales of completed farms declined, farms held in the PV segment's portfolio came online and commenced electricity production, and the PV segment began to derive economic benefits from electricity sales. Accordingly, a decision was made to reclassify, as of 1 October 2023, farms which have commenced electricity production from inventories to property, plant and equipment and to begin their depreciation to ensure the matching of revenue with costs and to reflect the wear and tear of those assets. Projects and farms under development/​construction continue to be recognised under inventories. As at 31 December 2022, the value of solar PV farms included in inventories and connected to the grid was PLN 238 million.

In total, as of 1 October 2023, farms connected to the grid with a total value of PLN 398 million were reclassified from inventories to property, plant and equipment (of which PLN 238 million was attributable to farms connected in 2022, and PLN 160 million - to farms connected in the period 1 January-30 September 2023).

33.2. Value of inventories

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(PLN million)	As at 31 Dec 2023	As at 31 Dec 2022
materials	241	328
semi-finished products and work in progress	550	518
finished goods	57	350
merchandise	13	8
Total inventories	861	1,204

The decrease in inventories as at 31 December 2023 relative to 31 December 2022 was attributable to:

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―	reclassification of PV farms connected to the grid to property, plant and equipment (PLN 398 million),
―	write-downs on the PV segment's farms under construction (PLN 11 million) and write-downs on other inventories (PLN 13 million),
―	write-downs on the Famur segment's parts for shearer loaders and roadheaders in the case of which the Group is recording a decreasing number of lease contracts and on materials and semi-finished products which cannot be used for its day-to-day manufacturing and maintenance activities (PLN 15 million),
―	performance of existing contracts.

33.3. Inventory write-downs

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(PLN million)	12 months to 31 Dec 2023
At beginning of period	28
recognised	52
used	-7
reversed	-14
Inventory write-downs at end of period	59

34. Trade and other receivables

34.1. Selected accounting policies

Receivables 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 gains (losses) 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.

34.2. Short-term receivables and impairment losses

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(PLN million)	As at 31 Dec 2023	As at 31 Dec 2022
trade receivables	408	452
other receivables	210	113
prepayments and accrued income	20	11
total net short-term receivables	638	576
impairment losses	91	105
total gross short-term receivables	729	681

34.3. Movements in impairment losses on short-term receivables

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(PLN million)	As at 31 Dec 2023
At beginning of period	105
exchange differences	-4
increases *	36
used	-24
reversed	-22
Impairment losses on receivables at end of period	91

* Including PLN 2 million recognised in the statement of profit or loss as a reduction of revenue from sale of products, PLN 20 million recognised as a reduction of other income from compensation and damages.

35. Other current financial assets

35.1. Selected accounting policies

Other 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.

35.2. Other non-current financial assets

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(PLN million)	As at 31 Dec 2023	As at 31 Dec 2022
loans	10	16
cash in escrow account - security for payment of receivables by customer	-	26
Total other current financial assets	10	42

36. Cash and cash equivalents

36.1. Selected accounting policies

Cash 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.

37. Non-current assets held for sale and related liabilities

37.1. Selected accounting policies

Non-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.

37.2. Assets held for sale and related liabilities

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(PLN million)	As at 31 Dec 2023	As at 31 Dec 2022
property	34	35
assets of subsidiaries held for sale	14	17
Total non-current assets held for sale	48	52
Liabilities of subsidiaries held for sale	9	7

As at 31 December 2023 and 31 December 2022, the assets of subsidiaries held for sale and related liabilities related to the following companies:

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	Śląskie Towarzystwo Wiertnicze Dalbis Sp. z o.o. (sold in January 2024),
	- PT. Kopex Mining Contractors of Indonesia.

38. Shareholders of Grenevia S.A.

Grenevia S.A. shareholding structure as at 31 December 2023

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Shareholder	Number of shares held	Number of voting rights	Equity interest
TDJ Equity I Sp. z o.o.	290,728,459	290,728,459	50.59%
Nationale-Nederlanden OFE *	57,468,000	57,468,000	10.00%
Allianz OFE **	55,513,805	55,513,805	9.66%
Grenevia S.A. ***	4,116	4,116	0.00%
Other shareholders ****	170,966,293	170,966,293	29.75%
Total	574,680,673	574,680,673	100%

* Aggregate value for accounts of OFE and DFE funds managed by NN PTE.

** Aggregate value for accounts of OFE 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.

39. Share capital

39.1. Selected accounting policies

Share 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 31 December 2023 and 31 December 2022, the share capital was paid up in full.

39.2. Share capital

As at 31 Dec 2023

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Series /​ issue	Type of shares	Number of shares
A	ordinary bearer /​ non-preferred	432,378,291
B	ordinary bearer /​ non-preferred	49,039,170
C	ordinary bearer /​ non-preferred	4,970,000
D	ordinary bearer /​ non-preferred	43,677,000
E	ordinary bearer /​ non-preferred	29,293,500
F	ordinary bearer /​ non-preferred	15,322,712
Total number of shares		574,680,673
Total share capital, PLN		5,746,806.73
Par value per share, PLN		0.01

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	As at 31 Dec 2023	As at 31 Dec 2022
number of shares	574,680,673	574,680,673

40. Other capital reserves

40.1. Other components of equity attributable to owners of the parent

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(PLN million)	As at 31 Dec 2023	As at 31 Dec 2022
statutory reserve funds	1,408	1,020
capital reserves	106	114
revaluation reserve	15	46
translation reserve	-8	-3
Total other components of equity	1,521	1,177

As at 31 December 2023 and 31 December 2022, share premium on Series B, C, D and E shares was PLN 547 million.

40.2. Equity attributable to non-controlling interests

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Subsidiary	Proportion of ownership interests held by non-controlling interests	Net profit (loss) attributable to non-controlling interests in the period 1 Jan−31 Dec 2023 (PLN million)	Non-controlling interests as at 31 Dec 2023 (PLN million)
Impact Clean Power Technology S.A. (Poland)	49%	-21	125
Projekt-Solartechnik S.A. (Poland)	48%	-49	33
Famur Solar Sp. z o.o. (Poland)	25%	-	-1
Total Wind PL Sp. z o.o. (Poland)	25%	1	4
Other		1	5
Total		-68	166

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Condensed financial information on subsidiaries with significant non-controlling interests (PLN million)	Assets as at 31 Dec 2023	Liabilities and provisions as at 31 Dec 2023	Net profit (loss) for 1 Jan-31 Dec 2023	Cash flows in 1 Jan-31 Dec 2023
Impact Clean Power Technology S.A.	475	218	-42	18
Projekt-Solartechnik S.A. *	1,553	1,532	-102	9

* Data for the Projekt-Solartechnik Group

41. Dividend

41.1. Selected accounting policies

Dividend 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.

41.2. Dividends from Grenevia S.A.

The Management Board of Grenevia will recommend that the entire net profit for 2023 be allocated to statutory reserve funds.

The pursuit by the Grenevia Group of its new strategic directions adopted in May 2021 and the Grenevia Group Sustainable Development Strategy for 2023-2030 unveiled in January 2023 will require that any profits be reinvested, in particular at the initial stages. The dividend, if any, proposed by the Management Board to the General Meeting will depend on profits earned in a given financial year, the investment attractiveness of new projects and growth prospects, as well as the financial and liquidity position of the Grenevia Group. A final decision on the allocation of profit for a financial year will be made by the Annual General Meeting.

On 27 June 2023, the Annual General Meeting of Grenevia S.A. passed a resolution to allocate the entire net profit for 2022 to statutory reserve funds.

On 22 June 2022, the Annual General Meeting of Grenevia S.A. passed a resolution to allocate the entire net profit for 2021 to statutory reserve funds.

42. Provisions

42.1. Selected accounting policies

Provisions represent liabilities whose maturity date or amount are uncertain. The Group recognises provisions when all of the following conditions are met:

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•	the Group has an obligation (legal or constructive) arising from past events,
•	it is probable that the obligation will cause an outflow of resources embodying economic benefits;
•	the amount of the obligation can be reliably estimated.

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.

42.2. Provisions

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(PLN million)	As at 31 Dec 2023	As at 31 Dec 2022
Long-term provisions, including:	34	27
provisions for long-term employee benefits	13	14
provisions for long-term warranty repairs	14	11
provision for other costs	7	2
Short-term provisions, including:	57	46
provisions for warranty repairs	15	12
provisions for penalties	12	10
provisions for employee benefits	18	10
provision for litigation risks	4	6
provision for other costs	8	8
Total provisions	91	73

42.3. Provisions for employee benefits

Actuarial assumptions

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	As at 31 Dec 2023	As at 31 Dec 2022
expected pay growth rate	4.0% *	4.4%
return on investment	5.1%	6.5%

* 9% in the first period (2023), 10% in the first period (2022)

Movements in long-term provision for employee benefits:

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(PLN million)	12 months to 31 Dec 2023
At beginning of period	14
- provision for jubilee benefits	3
- provisions for old-age and disability retirement benefits	3
- provision for other employee benefits	8
Change	-1
reversed	-1
At end of period	13
- provision for jubilee benefits	3
- provision for retirement benefits	2
- provision for other employee benefits - coal allowances	8

Movements in short-term provision for employee benefits:

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(PLN million)	12 months to 31 Dec 2023
At beginning of period	10
- provision for jubilee benefits	1
- provision for other employee benefits	9
Change	8
recognised	14
reversed	-1
used	-5
At end of period	18
- provision for jubilee benefits	1
- provision for retirement benefits	1
- provision for other employee benefits - coal allowances	16

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.

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(PLN million)	As at 31 Dec 2023	As at 31 Dec 2022
Employee benefit obligation at beginning of period	7	8
Current service cost	-	-
Actuarial gains/​losses from revaluation	2	-
Benefits paid	-2	-1
Employee benefit obligations at end of period	7	7

Sensitivity analysis for changes in key assumptions:

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(PLN million)	As at 31 Dec 2023	As at 31 Dec 2022
+1pp increase in return on investment	6	5
-1pp decrease in return on investment	6	6
+1pp increase in salary and coal price growth rates	6	6
-1pp decrease in salary and coal price growth rates	6	6

42.4. Other provisions

Movements in other long-term provisions:

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(PLN million)	12 months to 31 Dec 2023
At beginning of period, including:	13
- provision for warranty repairs	11
- provision for other costs	2
change, including:	8
increases	9
reversed	-1
At end of period, including:	21
- provision for warranty repairs	14
- provision for other costs	7

Movements in other short-term provisions:

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(PLN million)	12 months to 31 Dec 2023
At beginning of period, including:	36
- provision for warranty repairs	12
- provision for litigation risks	6
- provision for penalties	10
- provision for other costs	8
change, including:	3
recognised	12
reversed	-8
used	-1
At end of period, including:	39
- provision for warranty repairs	15
- provision for litigation risks	4
- provision for penalties	12
- provision for other costs	8

43. Capital risk management

The aim of capital management at the Grenevia Group is to uphold its optimal structure and level, thereby ensuring reasonable efficiency, security of the Group's operations, and its good credit standing. The Group seeks to maintain such structure of financing sources that aligns with the requirements laid down in its financing agreements. The expected ratio of equity to total equity and liabilities should be 40% or higher. As at 31 December 2023, equity accounted for approximately 58% of equity and liabilities.

Capital risk management also includes monitoring of the ratio of net debt to EBITDA, which is mainly calculated at the Group level using data from consolidated financial statements. The priority is to keep the ratio at 3.5 or lower. Definitions of the individual components of the ratio are directly derived from existing financing agreements.

In the Company's opinion, as at the reporting date the ratios were consistent with the requirements set out in the financing agreements.

The ratios are internally monitored on a continuous basis.

The capital risk management system did not change significantly relative to the previous year.

44. Financial liabilities

44.1. Financial liabilities

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(PLN million)	As at 31 Dec 2023	As at 31 Dec 2022
non-current financial liabilities:	924	629
bank and non-bank borrowings *	403	-
bonds and notes	400	599
leases **	121	30
current financial liabilities:	58	437
bank and non-bank borrowings *	29	392
other debt instruments *	17	6
factoring	-	28
leases	12	11
Total financial liabilities	982	1,066

* Including PLN 347 million under project finance arrangement for the construction of solar PV farms (PV segment), and PLN 84 million under an investment loan to build GigafactoryX (E-mobility segment).

** The increase in lease liabilities was mainly attributable to the recognition of right-of-use assets representing land leases for the construction of solar PV farms (PLN 73 million).

44.2. Reconciliation of liabilities arising from financing activities

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(PLN million)	Bank and non-bank borrowings	Notes	Factoring	Leases	Total financial liabilities
As at 1 Jan 2023	392	605	28	41	1,066
net cash from financing activities	-87	-165	-	-14	-266
other non-cash changes	127	-23	-28	106	182
As at 31 Dec 2023	432	417	-	133	982

45. Borrowings

45.1. Selected accounting policies

Bank 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 within the next 12 months. Overdraft facilities are classified as current liabilities irrespective of the final repayment date and the agreement term.

45.2. Bank credit and non-bank borrowings

As at 31 December 2023, the total limit of undrawn working capital facilities (excluding project finance arrangements) available to the Group was PLN 460 million (31 December 2022: PLN 441 million).

All undrawn credit facilities are secured. The underlying agreements provide for multi-currency facilities. Both bank and non-bank borrowings bear interest at variable rates based on a reference rate (e.g. Wibor, Euribor).

45.3. Notes

Series B notes (issued by Grenevia S.A.)

In June 2019, the Parent issued Tranche B notes of PLN 200 million under the notes programme. In each six-month settlement period, the notes bore interest at a floating rate based on 6M WIBOR plus a margin. The notes registered with the depository were assigned ISIN code PLFAMUR00053. The issue date for Series B notes was 27 June 2019 and the redemption date - 27 June 2024.

The notes were redeemed early on 27 December 2023.

The Company hedged its interest rate risk using an interest rate swap (IRS).

Series C notes (issued by Grenevia S.A.)

In October 2021, the Parent issued Tranche C notes of PLN 400 million under the notes programme. In each six-month settlement period, the notes bear interest at a floating rate based on 6M WIBOR plus a margin.

The notes registered with the depository were assigned ISIN code PLFAMUR00061. The issue date of Series C notes is 3 November 2021. The redemption date of Series C notes is 3 November 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 52.

Series A notes (issued by Finance PV 1 S.A.)

In March 2023, Finance PV 1 S.A., a subsidiary of the Company, issued Series A notes with a nominal value of EUR 2.7 million. The notes bear interest at a fixed rate of 8.5% per annum, applicable from the subscription date to one year from the date of execution of the note indenture. Beyond this period, the interest rate increases to 10.0% per annum until the notes' maturity. The interest is payable on each anniversary of the date of execution of the note indenture and on the maturity date. The note register is held with Tomasz Merta, a notary of Warsaw (entry No. in the Register of Notarial Deeds: Rep. A 13204/​2023).

The issue date of Series A notes is 30 March 2023.

The redemption date is 7 September 2024.

Funds raised from the notes will be allocated to financing the construction of solar PV farms under a project finance model.

Series B notes (issued by Finance PV 1 S.A.)

In March 2023, the subsidiary Finance PV 1 S.A. issued Series B notes with a nominal value of EUR 4.8 million. The notes bore interest at a fixed rate of 8.5% per annum, applicable from the subscription date to one year from the date of execution of the note indenture. Beyond this period, the interest rate increased to 10.0% per annum until the notes' maturity. The interest was payable on each anniversary of the date of execution of the note indenture and on the maturity date. The note register was held with Tomasz Merta, a notary of Warsaw (entry No. in the Register of Notarial Deeds: Rep. A 13204/​2023).

The issue date of Series B notes was 30 March 2023. The redemption date was set for 7 September 2024.

Funds raised from the notes were allocated to financing the construction of solar PV farms under a project finance model.

On 12 September 2023, Series B notes were redeemed with interest.

45.4. Security for borrowings

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(PLN million)	As at 31 Dec 2023	As at 31 Dec 2022
secured	443	391
not secured	406	606
Total borrowings	849	997

The table above shows borrowings and other debt instruments which constitute the Group's financial liability as at the reporting date.

46. Factoring liabilities

In 2022, the Grenevia Group companies were party to agreements under which they sold their receivables to financial institutions. The institutions had recourse to the Group companies if a debtor failed to pay. In the Management's opinion, the Group retained substantially all the risks and rewards incidental to the receivables and therefore did not derecognise the receivables, and recognised factoring transactions as financing agreements. As a result, the Group recognised a financial liability for the consideration received from the factor. In the Management's opinion, the risk of an event triggering the exercise the right of recourse was low, as was 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.

As at 31 December 2023, there were no liabilities related to the purchase of receivables with recourse to the Group companies.

47. Lease liabilities

47.1. Selected accounting policies

At 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 assets

The 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 options

The 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 assets

The Group recognises right-of-use assets at the lease commencement date (i.e. the date when the underlying asset is made available for use).

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―	Right-of-use assets are measured at cost less accumulated depreciation and impairment losses, adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognised, the initial direct costs incurred and any lease payments made at or before the commencement date, less any lease incentives received. Unless the Group believes there is reasonable certainty it will acquire ownership of the leased assets after a relevant lease expires, the recognised right-of-use assets are depreciated using the straight-line method over the shorter of the estimated useful life and lease term. Right-of-use assets are subject to impairment.
―	Right-of-use assets that relate to investment property are measured at fair value.

The Group holds lease contracts for machinery and vehicles, as well as perpetual usufruct of land. It also leases land and office space.

47.2. Right-of-use assets and lease liabilities

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	Right-of-use assets					Lease liabilities
	Property, plant and equipment Perpetual usufruct and lease of land	Property, plant and equipment Other	Total property, plant and equipment	Investment property Perpetual usufruct right	Inventories Perpetual usufruct right
---	---	---	---	---	---	---
as at 1 Jan 2023	11	22	33	7	4	41
increases *	73	34	107	-	-	110
decreases	-	-5	-5	-	-4	-3
depreciation	-5	-12	-17
interest expense						-1
lease payments						-14
as at 31 Dec 2023	79	39	118	7	-	133

* The increase in lease liabilities was mainly attributable to the recognition of right-of-use assets representing land leases for the construction of solar PV farms (PLN 73 million) and contracts for lease of office space (PLN 11 million).

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	Right-of-use assets					Lease liabilities
	Property, plant and equipment Perpetual usufruct right	Property, plants and equipment Machinery, equipment and vehicles	Total property, plant and equipment	Investment property Perpetual usufruct right	Inventories Perpetual usufruct right
---	---	---	---	---	---	---
as at 1 Jan 2022	15	23	38	7	7	43
increases	-	11	11	1	-	14
decreases	-4	-4	-8	-1	-3	-6
depreciation	-	-8	-8
interest expense						1
lease payments						-11
as at 31 Dec 2022	11	22	33	7	4	41

47.3. Amounts recognised in profit or loss under lease contracts

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(PLN million)	12 months to 31 Dec 2023	12 months to 31 Dec 2022
depreciation of right-of-use assets	17	8
interest expense on lease liabilities	1	1
Total expenses	18	9

The costs related to leases of low-value assets and the costs of short-term leases incurred in 2023 and in the comparative period were immaterial.

48. Trade and other payables

48.1. Selected accounting policies

Trade 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.

48.2. Short-term trade and other payables

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(PLN million)	As at 31 Dec 2023	As at 31 Dec 2022
Financial liabilities	295	248
trade payables	173	180
taxes	68	38
wages and salaries	15	13
other liabilities	39	17
Non-financial liabilities	207	168
advance payments received	181	150
accrued expenses	13	9
deferred income	13	9
Total trade and other payables	502	416

48.3. Long-term trade and other payables

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(PLN million)	As at 31 Dec 2023	As at 31 Dec 2022
liabilities under put option granted over minority interests *	6	-
other non-current liabilities	2	3
Total long-term trade and other payables	8	3

* Under the agreement to acquire 75.24% of shares in Total Wind PL Sp. z o.o., Grenevia S.A. assumed an obligation to purchase 32 shares from SHP Holding APS, representing 10.03% of the company's share capital (put option). Alongside the put option, there is a symmetrical call option giving Grenevia S.A. the right to purchase the 10.03% interest. Under the agreement, the options will be exercisable for a period of one year following approval of Total Wind PL Sp. z o.o.'s financial statements for 2025. The purchase price is to be determined as a fixed multiple of EBITDA for 2025, less net debt, based on the proportion of the shares acquired. The obligation to purchase the minority interest is an element of the Group's obligation to acquire its own equity instruments. In the consolidated financial statements, the related liability of PLN 6 million was recognised under 'Long-term trade and other payables' with a corresponding entry in equity under 'Other capital reserves'. Measurement of the liability corresponds to the present value of the option exercise price, calculated based on the proportion of the shares acquired, as the weighted average of the multiple of projected EBITDA for 2025, less net debt. The weight used to calculate the liability was the probability of achieving the budgeted performance in three scenarios, as assessed by Total Wind PL's Management Board. The discount rate was set at 10.22%. As at each reporting date, the Group will re-measure the liability under the option at amortised cost. Any change in the liability amount resulting from a change in the estimate of amounts payable will be recognised under 'Other capital reserves'. Any change in the liability amount on application of the discount rate will be taken to finance income or costs.

49. Assets pledged as security

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(PLN million)	As at 31 Dec 2023	As at 31 Dec 2022
security interests in property	106	91
security interests in plant and equipment	542	4
security interests in inventories	182	404
security interests in other assets	161	102
Total assets pledged as security	991	601

The carrying amount of liabilities under borrowings covered by security interests created in the Group's assets was PLN 443 million as at 31 December 2023 and PLN 391 million as at 31 December 2022.

50. Contingent liabilities

Measurement of contingent liabilities as at 31 December 2023

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(PLN million)	Value of contingent liability as at the reporting date (amount that the Company would pay to satisfy the obligation as at the reporting date)	Maximum surety amount
sureties * , including:	52	287
- granted by the PV segment	52	193
- Grenevia S.A. for the PV segment	-	60
- E-mobility segment	-	34
performance bonds	36	n/​a
other guarantees **	21	n/​a
bid bonds	7	n/​a
litigation risks ***	9	n/​a
obligation to repurchase minority interests ****	10	n/​a
other contingent liabilities	5	n/​a
Total contingent liabilities	140

* As security for the preliminary agreement for the sale of shares in four project companies holding a portfolio of solar PV farm projects, signed on 12 September 2023 by Projekt Solartechnik Fundusz Inwestycyjny Zamknięty (the Seller), PROJEKT-SOLARTECHNIK Spółka Akcyjna (a company of the Grenevia Group's PV segment) provided an irrevocable and unconditional surety to KGHM POLSKA MIEDŹ S.A. (the Buyer) guaranteeing due and proper performance by the Seller of its monetary obligations arising under the sale agreement, for a maximum amount of PLN 190 million. The surety will be valid until the earlier of the following dates: the day of full, irrevocable and unconditional settlement by the Seller of all its obligations under the agreement or 31 December 2027. As at 31 December 2023, advance payment of PLN 141 million received from the Buyer (the reimbursement of which is covered by the above surety) was recognised in on-balance-sheet liabilities, therefore the measurement of the contingent liability is reduced by that amount.

In 2023, Grenevia S.A. also provided sureties for its subsidiaries:

- up to PLN 34 million for Impact Clean Power Technology S.A. as security for bank loans contracted by the company. The use of the bank loans is recognised under on-balance-sheet liabilities, so the measurement of the contingent liability is not presented. The above security will expire on the earlier of the following dates:

a) on the date on which IMPACT fulfils the conditions set out in the credit facility agreement, or

b) on the date on which all of the Lenders' claims that have arisen under or in connection with the credit facility agreement are discharged and extinguished.

- up to PLN 60 million for PST Group Sp. z o.o. as security for bank guarantee and treasury limits for a total amount of PLN 50 million. The use of the guarantee limits is included in the guarantee items, while the treasury limit had not been used as at the reporting date. Liabilities under the sureties will expire in 2032 (with respect to the guarantee limit) and in 2027 (with respect to the treasury limit).

** Including a corporate guarantee of PLN 19.5 million for Primetech, provided for the benefit of JSW S.A. and PBSZ S.A.

*** 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 an 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 5 million. As at 31 December 2023, 62 court cases concerning the matter were resolved, including 50 in favour of the Group.

**** In connection with the acquisition of shares in Total Wind PL Sp. z o.o. and irrespective of the put option granted (as discussed in Note 12), the Company entered into an agreement with the other minority shareholder whereby it granted that shareholder a put option over its 14.73% interest in Total Wind PL assuming an obligation to purchase the interest. The put option will be exercisable by the minority shareholder for a period of one year following approval by the General Meeting of Total Wind PL of its financial statements for 2027. The option exercise price was determined as a multiple of EBITDA, less net debt, based on the proportion of the shares acquired. The put option will vest on condition that revenue and EBITDA achieve certain predetermined levels over the period of five years through to 2027. In the opinion of the Management Boards of both Grenevia S.A. and Total Wind PL, the probability of achieving the revenue and EBITDA levels defined in the agreement is low and therefore the related liability does not meet the criteria for recognition in the financial statements.

In addition, Grenevia S.A. agreed to cover cost overruns of PLN 4.7 million for the PV segment's SPVs which had contracted bank loans. Due to the intra-group nature of the transaction, the item is not disclosed in the table.

Measurement of contingent liabilities as at 31 December 2022

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(PLN million)	Value of contingent liability as at the reporting date (amount that the Company would pay to satisfy the obligation as at the reporting date)	Maximum surety amount
surety and promissory notes	2	-
performance bonds	22	n/​a
other guarantees	42	n/​a
litigation risks	10	n/​a
bid bonds	2	n/​a
Total contingent liabilities	78

51. Financial instruments

51.1. Selected accounting policies

The Group identifies the following categories of financial instruments:

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―	financial instruments measured at amortised cost,
―	financial instruments measured at fair value through profit or loss,
―	financial instruments measured at fair value through other comprehensive income,
―	financial instruments to which the Group applies hedge accounting.

A financial asset is classified in the first category if both of the following conditions are met:

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―	it is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows; and
―	the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

The Group's assets measured at amortised cost comprise:

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―	trade and other receivables,
―	loans,
―	cash.

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:

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―	trade and other payables,
―	bank and non-bank borrowings,
―	notes.

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 31 December 2023, 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 52.

51.2. Financial instruments by category

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(PLN million)	As at 31 Dec 2023	As at 31 Dec 2022
trade and other receivables	638	576
derivate financial instruments	29	66
other financial assets	19	42
cash and cash equivalents	610	939
Total financial instruments - assets	1,296	1,623
trade and other payables	303	248
Borrowings and other debt instruments (other financial liabilities)	849	1,025
Total financial instruments - liabilities	1,152	1,273

51.3. Fair value of financial instruments

Below is presented detailed information on the fair value of financial instruments whose fair values can be estimated:

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•	cash and cash equivalents, short-term bank deposits and short-term bank credit: the carrying amounts of such instruments approximate their fair values due to their short maturities;
•	trade receivables, other receivables, trade payables: the carrying amounts of such instruments approximate their fair values due to their short-term nature;
•	bank credit and non-bank borrowings. The carrying amounts of such instruments approximate their fair values as they bear interest at variable rates determined by reference to market rates.

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:

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•	Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;
•	Level 2: inputs other than quoted prices used at Level 1, observable for the assets or liabilities either directly (e.g. as prices) or indirectly (e.g. derive from provisions);
•	Level 3: inputs not based on observable market prices (unobservable inputs).

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 2023 or 2022.

51.4. Financial instruments measured at fair value by class

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As at 31 Dec 2023	Fair value hierarchy
Classes of financial instruments	Level 1	Level 2	Level 3
---	---	---	---
Derivatives (measurement), including:	-	29	-
assets	-	29	-
liabilities	-	-	-

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As at 31 Dec 2022	Fair value hierarchy
Classes of financial instruments	Level 1	Level 2	Level 3
---	---	---	---
Derivatives (measurement), including:	-	66	-
assets	-	66	-
liabilities	-	-	-

52. Derivative financial instruments and hedges

52.1. Selected accounting policies

The 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:

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―	instruments hedging future cash flows against currency risk,
―	instruments hedging future cash flows against interest rate risk.

An entity may apply hedge accounting when all the conditions under IFRS/​IAS are met, i.e.:

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―	at the inception of the hedge there is formal designation and documentation of the hedging relationship, the risk management objective, and strategy for undertaking the hedge;
―	the hedge is expected to be highly effective;
―	for cash flow hedges, the hedged forecast transaction is highly probable and exposes the entity to a risk of variability in cash flows, which could impact profit or loss;
―	the effectiveness of the hedge must be reliably measurable;
―	the hedge is assessed on an ongoing basis, and its effectiveness is maintained throughout all the reporting periods.

Gains or losses on remeasurement of the fair value of a hedging instrument are recognised:

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―	for fair value hedges - in profit or loss;
―	for the effective portion of cash flow hedges - in other comprehensive income by increasing or reducing revaluation reserve;
―	for the ineffective portion of cash flow hedges - in profit or loss.

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:

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―	the hedging instrument expires or is sold, terminated or exercised;
―	the hedge ceases to meet the hedge accounting criteria under IFRS/​IAS,
―	the entity revokes the designation.

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.

52.2. Derivative financial instruments

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Derivatives (groups of instruments)	Planned settlement date	Future cash flows at forward rate/​notional amount for IRS	Measurement of derivative	Hedged risk
as at 31 Dec 2023
Forward − sale of EUR	Q1 2024	10	1	currency risk
Forward − purchase of EUR	Q1 2024	5	-	currency risk
Forward − purchase of EUR	Q2 2024	5	-	currency risk
IRS	Q2 2024	200	3	interest rate risk
IRS	Q4 2026	400	13	interest rate risk
IRS	Q4 2034	159	8	interest rate risk
IRS	Q2 2035	85	4	interest rate risk
Total			29
as at 31 Dec 2022
Forward − sale of EUR	Q1 2023	40	0	currency risk
Forward − sale of EUR	Q3 2023	7	0	currency risk
Forward - sale of USD	Q1 2023	13	1	currency risk
Forward - sale of USD	Q2 2023	12	1	currency risk
IRS	Q4 2023	10	0	interest rate risk
IRS	Q2 2024	200	14	interest rate risk
IRS	Q4 2026	400	39	interest rate risk
IRS	Q4 2034	149	7	interest rate risk
IRS	Q2 2035	85	4	interest rate risk
Total			66

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 200 million) and Series C notes (PLN 400 million) issued by the Company. On 27 December 2023, the Company redeemed early Series B notes. The IRS hedging the interest rate risk for Series B notes will be maintained until the end of the settlement period, falling on 27 June 2024. The settlement value is fixed and is not subject to the risk of changes.

The other IRS instruments hedge the interest rate risk for project finance arrangements.

The table below presents derivatives by designation as hedges or instruments measured at fair value through profit or loss.

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(PLN million)	As at 31 Dec 2023	As at 31 Dec 2022
Fair value of derivatives to which hedge accounting is applied	24	47
Fair value of derivatives measured at fair value through profit or loss	5	19
Total	29	66

53. Objectives and principles of financial risk management

Financial 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:

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•	credit risk - the risk of a trading partner's failure to perform contractual obligations;
•	liquidity risk - the risk that the Group may not be able to meet its financial liabilities when due;
•	market risk - currency risk, interest rate risk, and price risk.

The Group is primarily exposed to financial risk related to its trade receivables (currency risk, credit risk) and liabilities under borrowings and notes (currency risk, interest rate risk).

The Group seeks to mitigate the impact of various risks through natural hedging mechanisms.

53.1. Credit risk

The 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 and e-mobility sectors, and therefore receivables from those sectors 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 34. No increase in credit risk was identified. In 2023, the Company reversed an allowance for expected credit losses of PLN 8 million, recognised in a separate line of the statement of profit or loss (PLN 11 million in 2022).

53.2. Liquidity risk

The Group is exposed to liquidity risk when cash flows related to payment of receivables are delayed. The Group hedges the risk 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.

53.3. Maturity structure of financial liabilities

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Maturity of liabilities in the period (PLN million)	31 Dec 2023	up to 1 year	1-3 years	over 3 years
trade and other payables	303	303	-	-
bank credit and non-bank borrowings	432	29	43	360
bonds and notes	417	17	400	-
lease liabilities	133	12	7	114
Total	1,285	361	450	474

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Maturity of liabilities in the period (PLN million)	31 Dec 2022	up to 1 year	1-3 years	over 3 years
trade and other payables	251	248	3	-
bank credit and non-bank borrowings	392	392	-	-
notes	605	6	200	399
factoring	28	28	-	-
lease liabilities	41	11	2	28
Total	1,317	685	205	427

53.4. Sensitivity analysis for currency risk

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As at 31 Dec 2023 (PLN million) Item of financial statements	Carrying amount PLN	Value at risk PLN	EUR/​PLN effect of exchange rate movement on profit or loss 10%	EUR/​PLN effect of exchange rate movement on profit or loss -10%
Cash and cash equivalents	610	50	3	-3
Trade and other receivables	638	99	5	-5
Derivate financial instruments	29	-	-	-
Other financial assets	19	7	1	-1
Trade payables and other financial liabilities	303	53	-1	1
Borrowings and other debt instruments	849	98	-10	10
Effect on profit or loss before tax			-2	2

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As at 31 Dec 2023 (PLN million) Item of financial statements	USD/​PLN effect of exchange rate movement on profit or loss 10%	USD/​PLN effect of exchange rate movement on profit or loss -10%	Other currencies/​PLN effect of exchange rate movement on profit or loss 10%	Other currencies/​PLN effect of exchange rate movement on profit or loss -10%
Cash and cash equivalents	1	-1	1	-1
Trade and other receivables	2	-2	2	-2
Derivate financial instruments	-	-	-	-
Other financial assets	-	-	-	-
Trade payables and other financial liabilities	-2	2	-2	2
Borrowings and other debt instruments	-	-	-	-
Effect on profit or loss before tax	1	-1	1	-1

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As at 31 Dec 2022 (PLN million) Item of financial statements	Carrying amount PLN	Value at risk PLN	EUR/​PLN effect of exchange rate movement on profit or loss 10%	EUR/​PLN effect of exchange rate movement on profit or loss -10%
Cash and cash equivalents	939	109	4	-4
Trade and other receivables	576	195	14	-14
Derivate financial instruments	66	2	-	-
Other financial assets	42	32	1	-1
Trade payables and other financial liabilities	248	69	-5	5
Borrowings and other debt instruments	997	47	-4	4
Effect on profit or loss before tax			10	-10

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As at 31 Dec 2022 (PLN million) Item of financial statements	USD/​PLN effect of exchange rate movement on profit or loss 10%	USD/​PLN effect of exchange rate movement on profit or loss -10%	Other currencies/​PLN effect of exchange rate movement on profit or loss 10%	Other currencies/​PLN effect of exchange rate movement on profit or loss -10%
Cash and cash equivalents	6	-6	1	-1
Trade and other receivables	5	-5	1	-1
Derivate financial instruments	-	-	-	-
Other financial assets	3	-3	-	-
Trade payables and other financial liabilities	-2	2	-1	1
Borrowings and other debt instruments	-1	1	-	-
Effect on profit or loss before tax	11	-11	1	-1

53.5. Sensitivity analysis for interest rate risk

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As at 31 Dec 2023 (PLN million)	Value at risk	effect on profit or loss 1%	effect on profit or loss -1%	effect on equity 1%	effect on equity -1%
loans	16	-	-	-	-
derivative financial instruments (IRS)	644	-	-	6	-6
cash and cash equivalents	610	6	-6	-	-
lease liabilities	132	-1	1	-	-
borrowings, other debt instruments and factoring	849	-8	8	-	-
Total effect on profit or loss before tax/​ equity		-3	3	6	-6

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As at 31 Dec 2022 (PLN million)	Value at risk	effect on profit or loss 1%	effect on profit or loss -1%	effect on equity 1%	effect on equity -1%
loans	16	-	-	-	-
derivative financial instruments (IRS)	844	2	-2	6	-6
cash and cash equivalents	939	9	-9	-	-
lease liabilities	41	-	-	-	-
borrowings, other debt instruments, factoring	1,025	-10	10	-	-
Total effect on profit or loss before tax/​ equity		1	-1	6	-6

54. Related-party transactions

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for the period 1 Jan-31 Dec 2023 (PLN million)	revenue and other income	finance income	Sale of property, plant and equipment	purchase of materials and services and other expenses	finance costs	purchase of property, plant and equipment
associates	-	-	-	-	-	-
other related entities	25	-	-	69	-	21
TDJ Equity I Sp. z o.o. - parent	-	-	-	-	-	-

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for the period 1 Jan-31 Dec 2022 (PLN million)	revenue and other income	finance income	Sale of property, plant and equipment	purchase of materials and services and other expenses	finance costs	purchase of property, plant and equipment
associates	1	-	-	-	1	-
other related entities	38	10	14	85	27	-
TDJ Equity I Sp. z o.o. - parent	-	-	-	-	-	-

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As at 31 Dec 2023 (PLN million)	receivables	loans	liabilities	non-bank borrowings
associates	-	-	-	-
other related entities	3	-	9	-
TDJ Equity I Sp. z o.o. - parent	-	-	-	-

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As at 31 Dec 2022 (PLN million)	receivables	loans	liabilities	non-bank borrowings
associates	-	-	-	-
other related entities	4	-	11	-
TDJ Equity I Sp. z o.o. - parent	-	-	-	-

As at 31 December 2023 and 31 December 2022, off-balance sheet liabilities under guarantees and sureties for associates were PLN 0. All related-party transactions were executed on an arm's length basis.

55. Remuneration of members of the Management Board and Supervisory Board

The tables below present gross remuneration of members of the Parent's Management and Supervisory Boards paid by the Grenevia Group companies in the year stated. The remuneration had the characteristics of short-term benefits.

Remuneration of Management Board members

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(PLN '000)	12 months to 31 Dec 2023	12 months to 31 Dec 2022
Beata Zawiszowska	1,891	633
Mirosław Bendzera - until 30 June 2023	1,386	871
Dawid Gruszczyk - until 30 June 2023	994	577
Tomasz Jakubowski - until 30 June 2023	996	625
Ireneusz Kazimierski	-	1,395
Total	5,267	4,101

Remuneration of Supervisory Board members

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(PLN '000)	12 months to 31 Dec 2023	12 months to 31 Dec 2022
Tomasz Domogała	6	8
Czesław Kisiel	3	6
Jacek Leonkiewicz	18	14
Dorota Wyjadłowska	24	24
Tomasz Kruk	24	24
Robert Rogowski	11	-
Michal Ciszek	6	-
Adam Toborek (from June 2021)	32	10
Total	124	86

56. Auditor's fees

On 11 July 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. Total fees due to the auditor for the provision of contracted services in 2023 were PLN 1,033,000.00 VAT exclusive, including:

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―	PLN 155,000.00, VAT exclusive, for the review of the condensed interim separate financial statements of Grenevia S.A. and for the review of the consolidated financial statements of the Grenevia Group,
―	PLN 214,000.00, VAT exclusive, for the audit of the full-year separate financial statements of Grenevia S.A. and for the audit of the full-year consolidated financial statements of the Grenevia Group,
―	PLN 637,500.00 for the audit of the financial statements of subsidiaries,
―	PLN 26,500.00, VAT exclusive, for evaluation of the Remuneration Report.

57. Analysis of the impact of the military conflict in Ukraine on the Group's financial condition

The ongoing war in Ukraine does not pose a threat to the Group's ability to continue as a going concern.

The Famur segment enjoyed a strong position on the Russian market, which accounted for approximately 20% of the segment's total revenue on average. Following the outbreak of the war in Ukraine, the Group opted against bidding for new machinery or equipment (longwall system) contracts targeting the Russian market, exclusively honouring pre-existing contracts and supplying essential spare parts and equipment to fulfil warranty and post-warranty commitments in that geography. However, upon entry into force of further sanctions under Regulation (EU) No 2023/​2025 of 25 February 2023, the Group also suspended the supply of spare parts to Russia.

The loss of revenue from the Russian market was largely offset by an increase in sales on the domestic market and, therefore, did not translate into a decline in total revenue.

58. Impact of climate change on the Company's operations and financial condition

Climate 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 globally is worsening the outlook for the mining machinery sector. Grenevia's strategic response to this trend is to continue to generate revenue from existing assets used in the mining industry 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 consistently pursues its strategy and diversifies operations to alter its business profile towards investing 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 2023.

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 31 December 2023, the Group had access to undrawn lines of credit totalling PLN 460 million.

In October 2021, Series C notes issued by Grenevia S.A. 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 of the Famur segment (for details on the goodwill impairment test, see Note 27).

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 'ESG risk management' in the Non-Financial Report of the Grenevia Group for 2023.

59. Events after the reporting date

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•	On 9 January 2024, an agreement was signed for the sale of Śląskie Towarzystwo Wiertnicze Dalbis Sp. z o.o. (an indirect subsidiary of the Company) for PLN 3 million. Loss of control of the company will be recognised in the interim consolidated financial statements for the three months ended 31 March 2024. As the assets and liabilities of the company were classified as held for sale and measured at PLN 3 million as at 31 December 2023, net result on the loss of control will not affect the consolidated statement of profit or loss.
•	On 24 January 2024, an agreement was signed for the sale of OOO Famur of Russia for PLN 3 million. In accordance with the agreement, the title to the shares passed to the buyer upon entry in the Russian Unified State Register of Legal Entities on 30 January 2024. The Company recognised the loss of control in 2022 (see Note 14). Gain on the sale of the shares of PLN 3 million will be recognised in the interim condensed financial statements of the Company for the three months ended 31 March 2024.
•	On 29 February 2024, share sale agreements were concluded concerning shares in three project companies. The shares were sold for a total price (including the subrogation value) of approximately PLN 186 million. The payment was made on the date of the agreement so that the price and the subrogation value were set off against the advance payment whereupon the Investor settled the difference.

Katowice, 22 April 2024

Signature of the person responsible for

preparation of the financial statements

Alina Mazurczyk, Chief Accountant

Signature of President of Grenevia S.A. Management Board

Beata Zawiszowska

Digitally signed

Independent auditor's report to the General Meeting and Supervisory Board of Grenevia S.A.

Auditor's report on the full-year financial statements

Opinion

We have audited the full-year financial statements of Grenevia S.A. (the "Company"), comprising the statement of financial position as at 31 December 2023 and the statement of profit or loss, statement of comprehensive income, statement of changes in equity and statement of cash flows for the financial year from 1 January to 31 December 2023, as well as notes to the financial statements, comprising the material accounting policy information and other notes (the "financial statements").

In our opinion, the accompanying financial statements:

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―	give a true and fair view of the Company's assets and financial position as at 31 December 2023, as well as its financial results and cash flows for the financial year then ended, in accordance with the applicable International Financial Reporting Standards as endorsed by the European Union and the adopted accounting policies;
―	comply with the form and content requirements laid down in the laws and regulations applicable to the Company and in the Company's Articles of Association;
―	were prepared on the basis of properly maintained accounting records in accordance with Chapter 2 of the Polish Accounting Act of 29 September 1994 (the "Accounting Act" - consolidated text: Dz.U. of 2023, item 120, as amended).

This opinion is consistent with the additional report for the Audit Committee, which we issued on 22 April 2024.

Basis for opinion

We conducted our audit in accordance with National Standards on Auditing as defined in International Standards on Auditing, adopted by resolution of the National Council of Statutory Auditors (the "NSA"), and in accordance with the Polish Act on Statutory Auditors, Audit Firms and Public Oversight of 11 May 2017 (the "Statutory Auditors Act" - consolidated text: Dz.U. of 2023, item 1015, as amended) and Regulation (EU) No. 537/​2014 of 16 April 2014 on specific requirements regarding statutory audit of public-interest entities (the "EU Regulation" - OJ L 158). Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report.

We meet the criteria of independence of the Company in accordance with the International Code of Ethics for Professional Accountants (including International Independence Standards) of the International Ethics Standards Board for Accountants (the "IESBA Code"), adopted by resolution of the National Council of Statutory Auditors, and with other ethical requirements that are relevant to audits of financial statements in Poland. We have fulfilled our other ethical responsibilities in accordance with those requirements and the IESBA Code. During our audit, the lead auditor and the audit firm remained independent of the Company in compliance with the independence requirements set out in the Statutory Auditors Act and in the EU Regulation.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Key audit matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of the current period. They are the most significant assessed risks of material misstatements, including those due to fraud. We addressed those matters in the context of our audit of the financial statements as a whole and in forming our opinion thereon. We have summarised our response to those risks and, where relevant, we presented key observations arising from those risks. We do not provide a separate opinion on these matters.

Goodwill impairment

In accordance with IAS 36 Impairment of Assets, the Company was required to make an annual impairment test of goodwill.

The impairment test is a key audit matter due to the balance of goodwill and the nature of the goodwill impairment test, which is based on significant assumptions and estimates made by the Management Board, such as future revenue, costs and cash flows, and weighted average cost of capital ("WACC").

In the financial statements, the Company carries goodwill of PLN 67 million allocated to the Famur segment, which represents 2.6% of the Company's total assets and is thus material to the financial statements.

Disclosures in financial statements

The accounting policies applied by the Company with respect to estimates made in connection with the impairment test and the key assumptions underlying the impairment test are disclosed in Note 19 of the accounting policy information and other notes.

Audit procedures conducted in response to identified risk

We performed, in particular, the following audit procedures:

− we read the parts of the accounting policy information that refer to the allocation of goodwill to cash-generating units and annual impairment testing;

− we verified whether there were any changes in the approach to estimating impairment goodwill in relation to the previous year;

− we verified the impairment test for the Famur segment to which the remaining goodwill had been allocated, taking a critical view of the impairment testing process, correctness of identification of the cash-generating unit, the key test assumptions, mathematical correctness of the test, the discount rates applied, and sensitivity analysis of the test to key input factors of the model;

− we assessed the correctness and completeness of the required disclosures in the financial statements;

− we assessed the effect of events subsequent to the reporting date on estimates made as at the reporting date.

Revenue from contracts with customers

Revenue for the year ended 31 December 2023 was PLN 1,016 million.

A significant part of the Company's revenue was revenue recognised by the Company as it satisfied the performance obligation ("long-term contracts"). The Company recognised PLN 292 million under long-term contracts, representing 28.7% of its total revenue.

The Company accounts for long-term contracts in accordance with the percentage of completion method, where the percentage of completion is measured based on contract costs incurred by the reporting date as proportion of estimated total contract costs.

The matter is considered a key audit matter given the material amount of revenue recognised as the Company satisfies performance obligations and the complexity of the valuation process based on significant estimates made by the Management Board.

Disclosures in financial statements

The accounting policies applied by the Company and the key figures relating to the identified key audit matter with respect to the measurement of long-term contracts are disclosed in Note 9 in the accounting policy information and other notes.

Audit procedures conducted in response to identified risk

We performed, in particular, the following audit procedures:

− we read the parts of the accounting policy information that refer to revenue recognition;

− we performed procedures to understand and evaluate internal controls implemented by the Company with respect to the valuation of long-term contracts;

− during the audit, we also conducted the following procedures with respect to the identified risk:

 we assessed how the budgets used to calculate revenue are analysed, updated, and finally approved;

 we analysed the mathematical correctness of the calculations of all long-term contracts in terms of their consistency;

 for ongoing contracts under which significant percentage of costs had been incurred, we verified the calculation of the percentage of completion as at the reporting date, the amount of revenue recognised, reconciliation of contract asset balances against the accounting books, and recognition of deferred tax, and we assessed the risk of delays in contract performance and the completeness of provisions recognised for contract losses, if any;

 for a sample of contracts, we assessed significant changes in revenue estimates during the financial year, and obtained appropriate explanations from the persons responsible for monitoring their performance, and we conducted detailed procedures to compare data disclosed in the contract sheets against the contracts with customers;

 we verified completeness of the valuations of contracts which were not completed as at the reporting date.

Impairment of long-term investments

In the financial statements, the Company recognises shares in subsidiaries and associates of PLN 702 million, representing 27.0% of its total assets as at 31 December 2023. This matter is considered to represent a risk of material misstatement due to the material value of shares in the Company's assets and the possibility of impairment of the shares.

Disclosures in financial statements

The accounting policies applied by the Company in measuring shares in subsidiaries and associates and the disclosures relating to the structure of shares in subsidiaries and associates are presented in Note 22 of the accounting policy information and other notes to the separate financial statements.

Audit procedures conducted in response to identified risk

We performed, in particular, the following audit procedures:

− we read the parts of the accounting policy information that refer to the measurement of investments in subsidiaries and associates and impairment testing;

− we verified whether there were any changes in the approach to estimating impairment losses on investments in relation to the previous year;

− we read and assessed, maintaining professional scepticism, the Management Board's analysis of indications of impairment of net investment in subsidiaries and associates;

− where there were indications of impairment, we verified the impairment test, taking a critical view of the impairment testing process, the key test assumptions, mathematical correctness of the test, the discount rates applied, and sensitivity analysis of the test to the key input factors of the model;

− we assessed the correctness and completeness of the required disclosures in the financial statements;

− we assessed the effect of events subsequent to the reporting date on estimates made as at the reporting date.

Responsibility of the Management Board and Supervisory Board for the financial statements

The Company's Management Board is responsible for the preparation, on the basis of properly maintained accounting records, of financial statements that give a true and fair view of the Company's assets and financial position and of its financial results in accordance with International Financial Reporting Standards, as endorsed by the European Union, the adopted accounting policies, the laws applicable to the Company, and the Articles of Association, and for such internal control as the Company's Management Board determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

When preparing the financial statements, the Company's Management Board is responsible for assessing the Company's ability to continue as a going concern, disclosing, if applicable, matters related to the going concern assumption, and adopting the going concern principle as the basis of accounting, except when the Management Board either intends to liquidate the Company or discontinue operations or has no realistic alternative to do so.

The Company's Management Board and members of the Supervisory Board are obliged to ensure that the financial statements comply with the requirements of the Accounting Act. Members of the Supervisory Board are responsible for providing oversight of the Company's financial reporting process.

Auditor's responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includesour opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with PAS will always detect a material misstatement when it exists. Misstatements can arise from fraud of error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial statements.

The concept of materiality is applied by the auditor both in planning and performing the audit, and in evaluating the effect of misstatements identified during the audit and of uncorrected misstatements, if any, on the financial statements and in forming the auditor's opinion. Accordingly, all opinions and statements contained in the auditor's report are made taking into account the qualitative and quantitative materiality level determined according to the auditing standards and the auditor's professional judgement.

The scope of the audit does not include assurance as to the future viability of the audited Company or on the efficiency or effectiveness with which the Company's Management Board has conducted or will conduct the affairs of the Company.

As part of an audit in accordance with PAS, we exercise professional judgement and maintain professional scepticism throughout the audit. We also:

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―	identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control;
―	obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control;
―	evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Company's Management Board;
―	draw a conclusion as to the appropriateness of application of the going concern basis of accounting by the Company's Management Board and, based on the audit evidence obtained, a conclusion as to whether any material uncertainty exists related to any events or conditions which may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report on the audit of the financial statements to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report on the audit of the financial statements. However, future events or conditions may cause the Company to cease to continue as a going concern;
―	evaluate the overall presentation, structure and content of the financial statements, including all disclosures, and assess whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with the Supervisory Board regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We provide the Supervisory Board with a statement that we have complied with relevant ethical requirements regarding independence, and will communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From among the matters communicated to the Supervisory Board, we have identified those matters that were of most significance in the audit of the financial statements of the current reporting period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation prohibits public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Other information, including the Directors' Report

Other information includes the Directors' Report on the operations of Grenevia S.A. and the Grenevia Group (the "Group"), where Grenevia S.A. is the parent company, in the financial year ended 31 December 2023 (the "Directors' Report") together with the corporate governance statement, which is a separate part of the Directors' Report, and the non-financial report referred to in Art. 49b.1 and 9 of the Accounting Act, constituting a separate document.

Other information also includes the letter from the President of the Management Board, representation of and notice from the Management Board on the selection of the audit firm, which we received prior to signing this audit report, and the representation of the Supervisory Board, which we expect to receive after signing this audit report (jointly: "Other Information").

Pursuant to Art. 55.2a of the Accounting Act and Section 71.8 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 29 March 2018 (the "Current Reporting Regulation" - Dz.U. of 2018, item 757, as amended),The Management Board prepared, in the form of a single document, the Directors' Report on the operations of the Company and the Group, which we referred to in the auditor's report on the consolidated financial statements of the Group.

Report on other legal and regulatory requirements

Statement on provision of non-audit services

To the best of our knowledge and belief, the non-audit services we have provided to the Company and its subsidiaries are compliant with applicable laws and regulations in force in Poland, and we have not provided any non-audit services that are prohibited under Art. 5.1 of the EU Regulation or Art. 136 of the Statutory Auditors Act. The non-audit services we provided to the Company and its subsidiaries in the audited period are specified in Note 45 to the Company's financial statements and the Directors' Report.

Appointment of the audit firm

We were appointed to audit the financial statements of the Company by resolution of the Company's Supervisory Board of 29 June 2022. We audit the Company's financial statements as of the financial year ended 31 December 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 financial statements

Signed with qualified electronic signature

Katowice, 22 April 2024

Marcin Krupa

Auditor Reg. No. 11142