in PLN millions, unless otherwise stated
In terms of non-current assets held for sale, the most important items are non-current assets held for sale of the Parent Entity and Cuprum Development Sp. z o.o.
As at 30 September 2020, based on a letter of intent regarding the acquisition by the State Treasury of shares in the company PGE EJ 1 Sp. z o.o. (i.e. the 10% interest held by the Parent Entity) signed on 1 October 2020 by the Partners in PGE EJ 1 (apart from KGHM Polska Miedź S.A., these are PGE S.A., Tauron Polska Energia S.A., and Enea S.A.) and the State Treasury, the Management Board of the Parent Entity determined that, in accordance with IFRS 5, conditions were met for mandatory reclassification of the shares in the company PGE EJ 1 Sp. z o.o. from non-current financial assets measured at fair value through other comprehensive income to non-current assets held for sale. Immediately prior to this reclassification, the carrying amount of the shares held in PGE EJ 1 Sp. z o.o. amounted to PLN 15 million and in this amount they were recognised in non-current assets held for sale. Accrued cost due to losses from the fair value measurement which was recognised directly in other comprehensive income amounted to PLN 14 million. In the fourth quarter of 2020, the capital of PGE EJ 1 Sp. z o.o.. was increased by PLN 38 million and as a result of the measurement at fair value as at 31 December 2020, the value of the shares was reduced by PLN 8 million. As at 31 December 2020, the value of non-current assets held for sale amounted to PLN 45 million while the accrued losses on measurement related to non-current assets held for sale amounted to PLN 21 million.
Despite the failure to conclude the transaction in 2020, pursuant to the signed letter of intent, the parties are continuing efforts to finalise it in the subsequent 12 months, immediately after updating the transaction documentation and securing financing by the buyer. The sale of the PGE EJ 1 Sp. z o.o. shares will be possible provided that the Management Board of KGHM PM S.A. obtains the approval of the Supervisory Board and the corresponding approvals are issued by the bodies of all of the Partners. Obtainment of these approvals is highly probable.
On 30 September 2020 an analysis was made of the process led by Cuprum Development Sp. z o.o. of selling land located in the centre of Wrocław, based on which it was determined that criteria set forth in IFRS 5 were met which require a change in the presentation of the land, from non-current assets to non-current assets held for sale. The carrying amount of the land prior to its reclassification amounted to PLN 16 million and, in that amount, was recognised in non-current assets held for sale. Liabilities directly associated with these assets amounted to PLN 4 million.
As at 31 December 2020 the aforementioned assumptions did not change.