33. Deferred income

The subsidies received are mainly related to the performance of projects co-financed under the European Union assistance programmes and to co-financing of the costs of development works.

In the previous years, the Group carried out three large projects co-financed from the EU funds, related to the purchase and construction of property, plant and equipment. The Group complied with all of the conditions of the said subsidies.

In March 2017, Aluprof S.A. signed a co-finance agreement for the project entitled: ‘The Construction of the Research and Innovation Centre to Conduct Research and Development Works on the Development of Innovative Systems for the Construction Industry’, under Measure 2.1. ‘Support for Investments in R&D Infrastructure of Enterprises’, within the Smart Growth Operational Programme 2014-2020, subsidised by the European Regional Development Fund. The total cost of the project is PLN 65,939,000, including eligible costs of PLN 43,440,000. The project was financed from the company own funds and state aid under the EU funds. The total amount of eligible expenditures less the flat-rate percent of income equals PLN 28,093,000.The maximum co-financing amount is PLN 5,847,000. The expenditures eligibility period for the project started on 27 April 2016 and ended on 31 December 2019. By the end of 2021, the Group received PLN 5,847,000 of subsidy within the project.

The project comprised the construction of and the provision of equipment for the Research and Innovation Centre, which has been carrying out research and development works. The structure of the usable area of approximately 15,000 m2 was on a plot of land of 11 ha located in the Cieszyn District. The objective of the project was to create a state-of-the-art facilities for carrying out research and development works on designing unique construction solutions of break-through technical parameters. The major emphasis has been placed on creating modern systems for passive buildings (characterised with ultra-high thermal insulation properties, strength and tightness) as well as wall systems meeting extremely high fire resistance requirements, and also fire-rated systems. The project is to ensure the sector leadership position in that area to Aluprof S.A.

The basic condition of the subsidy received is to achieve the project objective and its durability by 31 December 2024. In that period, the Group is not allowed to dispose of or otherwise transfer the ownership of the property, plant and equipment financed with the subsidy. In addition, the Group is obliged to carry out business activities in the scope specified in the application.

The key measurable indicators of the project are:

• product indicators, i.e. the number of fixed assets and intangible assets purchased, and the value of expenditure on the purchase of scientific and research devices;
• result indicators, i.e. employment increase, the number of R&D projects performed with the use of the co-financed research infrastructure, and the value expenditures on R&D activities.

In the opinion of the Group, the aforesaid indicators will be achieved.