Structure of contingent liabilities
Data in ths. PLN
|As at 31/12/2017 (audited)||As at 31/12/2016 (audited)|
|Guarantees issued on the Group’s order||130,097||142,251|
|Other contingent liabilities||129,243||73,525|
Guarantees issued on the Group’s order
As at 31 December 2017 the Group lists in contingent liabilities guarantees issued by banks and insurance companies on the order of PKP CARGO Group entities. This line item comprises mainly commercial contract performance bonds, tender deposits and customs guarantees.
Other contingent liabilities
This line item comprises the claims made against the group in court proceedings in the case of which the probability of outflow of cash is assessed as low, and claims in the case of which it is not possible to make a reliable estimate of the payment amount in the future by the Group. The amounts presented in this Note correspond to the value of the full claims reported by external entities. Assessment of the estimates may change in subsequent periods as a result of future events.
The change in the balance of contingent liabilities as at 31 December 2017 is the effect of a statement of claim filed by a counterparty for PLN 70,000 thousand pertaining to payment of damages for loss of the plaintiff’s enterprise value due to unfair competition acts and compensation for breach of the plaintiff’s personal rights by the Parent Company’s unlawful actions in 2010-2013. The Parent Company received the statement of claim on 22 June 2017. The Parent Company submitted its statement of defense on 1 September 2017. As at 31 December 2017 the Parent Company’s Management Board believes that the outflow of cash in the future associated with the said claim is less probable than absence of such outflow, hence no provision has been recognized. Additionally, in 2017, a judgment was passed dismissing the claim of a counterparty for payment of damages on account of the improper functioning of the billing system in the Parent Company in 2002 in the amount of PLN 18,435 thousand, and consequently the Group ceased to present the said claim as a contingent liability.