10. Investment property

At the time of their initial recognition investment properties are valued at their acquisition prices or manufacturing costs, including the costs of related transactions. If an investment property is purchased, the cost comprises the purchase price plus any costs directly attributable to the purchase transaction, such as legal fees and property transfer tax.

Investment properties in the PGE Group companies mainly comprise buildings located on the territory of the respective company, leased to third parties in whole or in part. From the point of view of the materiality of the consolidated financial statements, the fair value of investment properties is not significantly higher than their valuation based on the historical cost convention.

In the current period, the Group recognised capital expenditures on investment properties in the amount of PLN 1 million, while depreciation costs amounted to PLN 3 million.