Financial statement - Individual results
Independent Auditor’s Report
For the General Meeting of Shareholders of Wrocław Combined Heat and Power Plants KOGENERACJA S.A.
Independent auditor’s report on the audit of annual separate financial statements
Opinion on the financial statements
We have audited the accompanying annual separate financial statements of Zespół Elektrociepłowni Wrocławskich KOGENERACJA S.A., with its registered office in Wrocław, 24 Łowiecka Street (50- 220), hereinafter referred to as the "Company", for the financial year from 1 January 2024 to 31 December 2024, which comprise the separate statement of financial position as at 31 December 2024, the separate statement of comprehensive income, the separate statement of changes in equity, the separate statement of cash flows for the year then ended, and notes comprising significant accounting policies and other explanatory information, hereinafter the „financial statements”.
The financial statements have been prepared in the form of an electronic file entitled Sprawozdanie_jednostkowe_KGN_2024.xhtml and have been signed with the electronic signatures by the Management Board of the Company on 14 April 2025.
The financial statements have been prepared using the accounting and financial reporting principles set out in International Accounting Standards, International Financial Reporting Standards and relatedinterpretations promulgated as regulations of the European Commission, hereinafter "IFRS EU".
In our opinion, the accompanying financial statements of Zespół Elektrociepłowni Wrocławskich KOGENERACJA S.A. :
Our opinion on the financial statements is consistent with the supplementary report to the Audit Committee that we issued on 14 April 2025.
Basis for opinion on the financial statements
We conducted our audit of the financial statements in accordance with the National Auditing Standards, in the wording of the International Auditing Standards, adopted by the National Council of Statutory Auditors, the National Auditing Standard 220 (Z) adopted by the Polish Audit Supervision Agency, hereinafter referred to as the "National Auditing Standards", the Act of 11 May 2017 on Statutory Auditors, Audit Firms and Public Supervision, hereinafter referred to as the "Act on Statutory Auditors", applicable to audits of financial statements prepared for periods ending 31 December 2024, and Regulation (EU) No 537/2014 of the European Parliament and of the Council of 16 April 2014 on specific requirements for the statutory audit of public-interest entities, repealing Commission Decision 2005/909/EC (Official Journal of the EU L 158 of 27 May 2014, p. 77 and OJ EU L 170 of 11 June 2014, p. 66), hereinafter "Regulation 537/2014".
Our responsibilities under these standards are described in the section "Auditor's responsibility for the audit of the financial statements".
We are independent of the Company in accordance with theInternational Code of Ethics for Professional Accountants (including the International Independence Standards), hereinafter referred to as the "IESBA Code", adopted by the National Council of Statutory
Auditors, and with the independence requirements set out in the Act on Statutory Auditors and Regulation 537/2014. We have also fulfilled our other ethical responsibilities set out in the Act on Statutory Auditors and the IESBA Code. In conducting the audit, the key auditor and the audit firm remained independent of the Company in accordance with the independence requirements set out in the Act on Statutory Auditors and Regulation 537/2014.
We believe that the audit evidence we have obtained provides a sufficient and appropriate basis for our audit opinion.
Key audit matter(s)
Key audit matters are those matters that, in our professional judgement, were most significant during the audit of the financial statements for the current reporting period. They include the most significant assessed risks of material misstatement, including assessed risks of material misstatement due to fraud. We have addressed these matters in the context of our audit of the financial statements as a whole and in forming our opinion and have summarised our response to these risks, and, where we considered it appropriate, we have provided key observations relating to these risks.
At the same time, Regulation 537/2014 requires us to report on all the most significant risks of material misstatement in the audit report, including those that were not a key audit matter for us. Significant risks of material misstatement are risks of material misstatement that we have identified that, in our judgement, require special consideration in the audit.
The key audit matters set out below include all the most significant risks of material misstatement referred to in Regulation 537/2014 and other matters that we have identified as key audit matters.
We do not express a separate opinion on these matters.
Key audit matter: Impairment of tangible fixed assets
Whether the key audit matter represented a significant risk?
YESDescription of the key audit matter
As at 31 December 2024, the net value of tangible fixed assets presented in the separate statement of financial position was PLN 2,053,961 thousand, representing 65,36% of the Company's assets.
In accordance with IAS 36 „Impairment of Assets”, at the end of each reporting period, the Company's Management Board assesses whether there are any indications of impairment of tangible fixed assets and performs an impairment test on these assets if they are found to be impaired. Assets grouped into cash-generating units are tested for impairment.
Given the risk of uncertainty associated with the significant judgements and estimates made by the Company's Management Board and the significant value of the balance sheet position, we considered this to be a key audit matter for us.
Detailed figures for tangible, an analysis of the indications of impairment and disclosures concerning their impairment testing are presented in sections 6 "Tangible fixed assets" and 13 "Asset impairment testing" of the notes to the statement of financial position.
How the matter was addressed during the inquiry
We reviewed the applicable accounting policies for the valuation of tangible fixed assets and impairment testing and assessed their compliance with the relevant financial reporting standards.
We discussed with the Company's Management Board the identification of indications of possible impairment of tangible fixed assets and sources of information about them.
We gained an understanding of the process, including the internal control environment, of identifying the rationale and assessing the impairment of tangible fixed assets.
We assessed the Company's reasoning that there was no indication at the balance sheet date that would oblige it to re-test tangible fixed assets’s impairment and use the tests performed as at 31 May 2024 for the annual report.
We have received impairment tests for tangible fixe assets carried out as at 31 May 2024.
We assessed whether the assumptions used in the valuation model for the cash generating units at 31 May 2024 are reasonable and based on macroeconomic data. In particular, we assessed the financial forecast assumptions used by the Management Board and the weighted average cost of capital calculation. We verified the mathematical correctness of the discounted cash flow model.
We assessed the adequacy of the disclosures in the annual separate financial statements.
Key audit matter: Recognition and timing of sales revenue recognition
Whether the key audit matter represented a significant risk?
YESDescription of the key audit matter
The sales revenue presented in the statement of profit and loss for the period from 1 January 2024 to 31 December 2024 is PLN 1,554,483 thousand.
In accordance with the accounting policy, the Company recognises revenue in accordance with IFRS 15 when goods and services are transferred to the customer, i.e. when the customer obtains control of the transferred good.
Due to the significant value of the item and its susceptibility to the risk of misstatement, including the assumption made by the National Auditing Standards regarding the risk of fraud in revenue recognition, it was identified as a key audit matter.
The principles of revenue recognition and detailed revenue figures are included in section No. 1. Sales revenues in the notes to the financial statements.
How the matter was addressed during the inquiry
We have reviewed the Company's accounting policies on revenue recognition and measurement and confirmed their continued application.
We assessed whether the accounting policies adopted comply with the applicable financial reporting framework.
We gained an understanding of the internal controls operating within the Company as part of the sales process. This gave us an understanding of how to determine the timing of sales and how to record revenues in the accounting books, particularly in the sale of electricity and heat.
We have performed a monthly analysis of the margins realised in 2024 by sales type to identify unusual transactions.
We carried out analytical substantive procedures in the area of heat energy sales by estimating the volume of revenue on the basis of reports on the volume of heat received and tariffs published for the Company by thePresident of the Energy Regulatory Office.
On a selected sample, we verified the consistency of the amounts and the correct recognition of revenue in the correct reporting period. We verified the accuracy’s recognition of correct invoices after the balance sheet date.
We checked the completeness of the recognition of compensation revenue.
We have reviewed the revenue disclosures and assessed whether they are appropriate in light of the requirements of IFRS 15.
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, financial position and result in accordance with IFRS EU, the accounting principles (policies) adopted and the laws and articles of association applicable to the Company.
The Company’s Management Board is also responsible for such internal control as it determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the Management Board is responsible for assessing the Company's ability to continue as a going concern, disclosing, where applicable, matters related to going concern and adopting the going concern basis of accounting, except where the Management Board either intends to liquidate the Company or to cease operations or has no realistic alternative but to liquidate or cease operations.
The Management Board of the Company and the members of the Supervisory Board are responsible for ensuring that the financial statements meet the requirements of the Accounting Act. The members of the Supervisory Board are responsible for overseeing the Company's financial reporting process.
Auditor's responsibility for the audit of the financial statements
Our objective is 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 audit report that includes our opinion. Reasonable assurance is a high level of assurance, but does not guarantee that an audit performed in accordance with the standards indicated above will always detect an existing material misstatement. Distortions may arise from fraud or error and are considered material if they could reasonably be expected to influence, either individually or in the aggregate, the economic decisions of users taken on the basis of those financial statements.
The scope of the audit does not include assurance as to the future viability of the Company or the efficiency or effectiveness of the management of its affairs now or in the future.
During an audit in accordance with the National Auditing Standards, we use professional judgement and maintain professional scepticism and:
We communicate information related to the audit to the Supervisory Board and the Audit Committee, in particular about the planned scope and timing of the audit and the significant findings of the audit, including any significant internal control weaknesses we identified during the audit.
We have made a statement to the Audit Committee that we comply with the relevant ethical requirements for independence and that we will inform the Committee of all relationships and other matters that could reasonably be considered to pose a threat to our independence and, where applicable, report on the safeguards in place.
Of the matters reported to the Supervisory Board, we have identified those matters that were most significant in the audit of the financial statements for the current reporting period and therefore considered them to be key audit matters. We describe these matters in our audit report in the section "Key audit matter(s) and significant risks of material misstatement presented in accordance with Regulation 537/2014", except for matters for which disclosure to the public is prohibited by law or regulation or where, in exceptional circumstances, we determine that the matter should not be presented in our report because the adverse consequences could reasonably be expected to outweigh the benefit of such information to the public interest.
Pursuant to the Act on Statutory Auditors, we are also required to include in the audit report an opinion as to whether the financial statements comply in form and content with the applicable laws and the articles of association of the Company and an opinion as to whether they have been prepared on the basis of properly maintained accounting records. We formulated our opinion in this respect based on the work performed in the course of the audit.
Other information, including a Management report
Other information is the financial and non-financial information included in the annual report, other than the financial statements and the audit report. Other information includes the Management report on the Company's activities for the year ended 31 December 2024, together with the statement on the application of corporate governance referred to in Article 49(2a) of the Accounting Act and the Sustainability Reporting referred to in Chapter 6c of the Accounting Act, which are separate parts of this Management Report, hereinafter “Other Information.”
Responsibility of the Management Board and Supervisory Board
The Board Management is responsible for the preparation of Other Information in accordance with the laws.
The Management Board and the Supervisory Board are required to ensure that the Management report, together with its separated parts meet the requirements provided for in the Accounting Act and the Regulation of the Minister of Finance of 29 March 2018 on current information and periodic information provided by issuers of securities and conditions for recognising as equivalent information required by the laws of a non-member state, hereinafter the "Regulation on current and periodic information ".
Auditor's Responsibility
Our audit opinion on the financial statements does not include Other Information. In connection with our audit of the financial statements, our responsibility is to review the Other Information and in doing so, to consider whether the Other Information ismaterially inconsistent with the financial statements or our knowledge obtained during the audit, or otherwise appears to be materially misstated. If, on the basis of the work performed, we conclude that the Other Information is materially misstated, we are required to disclose this in our audit report.
With the exception of the matters discussed under “Opinion on the Management Report” and “Information on Sustainability Reporting and its Attestation,” we have nothing to report regarding Other Information.
Our responsibility under the requirements of the Act of Statutory Auditors is also to give an opinion as to whether the report of on the Company's activities has been prepared in accordance with the regulations and whether it is consistent with the information contained in the financial statements.
In addition, we are required to report whether the Company has prepared a statement on non-financial information and to issue an opinion on whether the Company has included the required information in its corporate governance statement.
We obtained the Management report prior to the date of this audit report and the Annual Report will be available after that date. In the event that we identify a material misstatement in the Annual Report, we are required to inform the Supervisory Board.
Management report
The Management report has been prepared together with the consolidated Management report for the KOGENERACJA S.A. Group as a single document in the form of an electronic file entitled Sprawozdanie_Zarzadu_GK_KGN_i_KGN_2024.xhtml and has been signed with the electronic signatures by the Management Board on 14 April 2025.
Opinion on the Management report
In our opinion, based on the work performed in connection with the audit of the financial statements, the accompanying Management report of KOGENERACJA S.A Group for the financial year ended 31 December 2024, to the extent not relevant to sustainability reporting:
In light of the knowledge of the Company and its environment obtained during the audit, we declare, that we have found no material misstatements in the Management report.
Opinion on the corporate governance statement
In our opinion, based on the work performed in connection with the audit of the financial statements:
Information on sustainability reporting and its attestation
Sustainability Reporting under Chapter 6c of the Accounting Act, which is a separate part of the Management Report, contained in its pages from number 96 to number 183, is subject to a separate attestation service performed by our audit firm and by the same key certified auditor who audits the financial statements, of which a report containing an unmodified opinion was issued as of April 14, 2025.
Report on other legal and regulatory requirements
Regulatory requirements under the Energy Law
Article 44 of the Law of April 10, 1997, the Energy Law, applicable to financial statements for periods ending December 31, 2024, hereinafter “the Energy Law”, requires that an energy company, ensuring equal treatment of customers and the elimination of crosssubsidization, keep accounting records in a manner that allows separate calculation of costs and revenues of profits and losses for the business activity performed in the supply of gaseous fuels or energy, including fixed costs, variable costs and revenues, separately for generation, transmission, distribution and trading of gaseous fuels or energy, storage of gaseous fuels and liquefaction of natural gas or regasification of liquefied natural gas, as well as for groups of customers specified in the tariff, and for non-energy activities.
In order to comply with the requirements to ensure equal treatment of customers and eliminate cross-subsidization between the activities referred to above, the Company is required to present in the notes the relevant items of the statement of financial position and the statement of comprehensive income separately for each type of business activity performed in the transmission or distribution of electricity, and to indicate the principles of allocation of assets and liabilities, as well as costs and revenues to each of these activities.
The Company's management is responsible for establishing the principles for the allocation of assets and liabilities, as well as costs and revenues, maintaining the accounts and internal controls it deems necessary for the preparation of the financial statements, including disclosures, in a manner that reflects compliance with the requirements of Article 44, paragraph 2 of the Energy Law.
Our responsibility is to determine in the audit report whether the relevant items of the statement of financial position and the statement of comprehensive income prepared separately for each business activity performed in the notes to the financial statements meet the requirements referred to in Article 44(2) of the Energy Law to ensure equal treatment of customers and to eliminate cross-subsidization between these activities.
Based on the procedures performed in connection with the audit of the financial statements, we conclude that the disclosures in Part C of the notes to the financial statements regarding the relevant items in the statement of financial position and the statement of comprehensive income, prepared separately for each business activity performed, meet, in all material respects, the requirements referred to in Article 44(2) of the Energy Law.
We have not performed any additional assurance work on the appropriateness and sufficiency of the Company's asset and liability allocation and income and expense policies, or on the accuracy of the amounts reported in the relevant items in the statement of financial position and statement of comprehensive income included in Part C of the financial statements.
Other Information and statements required by Regulation 537/2014
Appointment of the audit firm and period of total uninterrupted the engagement
We were appointed to audit the Company's financial statements by resolution 42/870/2021 of the Supervisory Board dated 30 September 2021. We have audited the financial statements of the Company as a public interest entity continuously, for a period of 3 subsequent years.
Non-statutory services
To the best of our knowledge and belief, we declare that we have not provided non-audit services that are prohibited by Article 5(1) of Regulation 537/2014 during the periods indicated therein.
Jolanta Sękowska
Key Certified Auditor No. 12749
key auditor conducting the audit on behalf of PKF Consult Spółka z ograniczoną odpowiedzialnością Sp. k. of the auditing firm No. 477
Wrocław, 14 April 2025