1.2 Information on the PGE Capital Group

The PGE Capital Group consists of the parent company PGE Polska Grupa Energetyczna S.A., 72 consolidated subsidiaries, 4 associates and 1 jointly controlled entity. For additional information about subordinated entities included in the consolidated financial statements please refer to note 1.3.

These consolidated financial statements of the PGE Capital Group cover the period from January 1, 2020 to December 31, 2020 and include comparative figures for the period from January 1, 2019 to December 31, 2019.

The financial statements of all subordinated entities were prepared for the same reporting period as the financial statements of the parent company, using consistent accounting principles. An exception to this rule is companies acquired in the course of the financial year that prepared financial data for the period as of their acquisition by the PGE Group.

The major object of the PGE Capital Group is conducting business activities in the following areas:

• generation of electricity,
• distribution of electricity,
• wholesale and retail trade in electricity, energy origin rights, CO₂ emission allowances and gas,
• generation and distribution of heat,
• provision of other services related to the aforementioned areas.

Business activities are conducted under appropriate concessions granted to the particular entities making up the composition of the PGE Capital Group. The PGE Capital Groups conducts business activities primarily in the territory of Poland.

These consolidated financial statements have been prepared based on the assumption that the major companies of the Group will continue as a going concern for a period of at least 12 months from the reporting date. As at December 31, 2020, the subsidiary PGE Obrót S.A. shows negative values of equity, which is mainly the result of negative changes on the regulated retail electricity trading market. PGE Obrót S.A. – like the other PGE Group companies – has access to financing provided by PGE S.A., therefore the going concern assumption for this company is justified.

Apart from the issue concerning PGE Obrót S.A., as at the date of authorisation of these financial statements for publication, no circumstances were identified which would indicate any threat to the major PGE Group companies continuing as going concerns.