Financial assets
The Group classifies its financial instruments in the following categories:
- financial assets at fair value through profit or loss,
- equity instruments through other comprehensive income,
- financial assets at amortised cost,
- financial assets at fair value through other comprehensive income.
a) Financial assets at fair value through profit or loss include:
- financial assets held for trading (including derivative instruments for which no hedging policy is designated),
- financial assets voluntarily assigned to this category,
- financial assets that do not meet the definition of basic lending arrangement, including equity instruments such as shares, except instruments designated as equity instruments measured through other comprehensive income,
- inancial assets that meet the definition of basic lending arrangement and are not held in accordance with a business model for the purpose of obtaining cash flows or in order to obtain cash flows and for sale.
Assets in this category are classified as current assets if they are held for trading or expected to be performed within 12 months from the balance sheet date.
b) Financial assets at amortised cost
Financial assets measured at amortised cost are financial assets that are held in accordance with a business model that aims to hold financial assets to generate contractual cash flows and whose contractual terms meet the criteria of basic lending arrangement.
c) Financial assets at fair value through other comprehensive income
Financial assets measured at fair value through other comprehensive income are financial assets that are held in accordance with a business model that aims to both receive contractual cash flows and sell financial assets as well as whose contractual terms meet the criteria of basic lending arrangement.
d) Equity instruments through other comprehensive income
Equity instruments through other comprehensive income include investments in equity instruments that are voluntarily and irreversibly classified as such at initial recognition. Equity instruments that meet the definition of held for trading and meet the criteria for mandatory payment recognised by the acquiring company in a business combination may not be subject to this classification.
At initial recognition, the Group measures a financial asset that is subject to classification for the purposes of fair value measurement. Trade receivables without a financial component that are measured at transaction prices are an exception to this rule.
The fair value of financial assets not classified as at fair value through profit or loss is increased by transaction costs that may be directly assigned to the purchase/acquisition of these assets.
Financial assets at fair value through profit or loss are measured at fair value on every balance sheet date. Fair value determined as at the balance sheet date is not adjusted by transaction costs that would be necessary to perform the given item. Restatement to fair value for assets in this category is recognised in profit or loss. If a given item is removed from accounts, the Group determines the profit or loss on the disposal and recognises it in the period’s result.
Financial assets at amortised cost are measured at amortised cost on every balance sheet date. The amortised cost of a financial asset is the amount at which the given financial asset is measured at initial recognition, decreased by repayment of principal and increased or decreased by accumulated depreciation, determined using the effective interest rate method, of any differences between the initial amount and the amount at maturity, and adjusted by any allowances for expected credit losses.
Financial assets at fair value through other comprehensive income are measured at fair value on every balance sheet date. Fair value determined as at the balance sheet date is not adjusted by transaction costs that would be necessary to perform the given item. Interest charged on such items and allowances for expected credit losses are recognised in the period’s result, while other restatements to fair value are recognised as other comprehensive income.
Equity instruments through other comprehensive income are measured at fair value on every balance sheet date. Fair value determined as at the balance sheet date is not adjusted by transaction costs that would be necessary to perform the given item. Restatements to fair value are recognised as other comprehensive income.
Financial liabilities, including credit facilities, loans and debt securities
Financial liabilities that include trade and other payables are initially recognised at fair value less transaction costs.
Financial liabilities that include credit facilities, loans and debt securities are classified at initial recognition as:
- financial liabilities at fair value through profit or loss,
- financial assets at amortised cost.
Financial liabilities at fair value through profit or loss include:
- financial liabilities that meet the definition of held for trading, including derivative instruments that are not used for hedge accounting,
- financial liabilities that are voluntarily designated by the Group as measured at fair value through profit or loss.
Financial liabilities at amortised cost include all financial liabilities that are subject to classification for the purposes of measurement that are not classified as financial liabilities at fair value through profit or loss.
At initial recognition, the Group measures a financial liability that is subject to classification for the purposes of fair value measurement.
The fair value of financial liabilities not classified as at fair value through profit or loss is decreased by transaction costs that may be directly assigned to the origination of the liability.
The balance sheet measurement of a financial liability and the recognition of restatements depend on the classification of the given item to the relevant category for measurement purposes:
- financial liabilities classified as financial liabilities at fair value through profit or loss are measured at each balance sheet at fair value; fair value determined at the balance sheet date is not adjusted for transaction costs that would have to be incurred to settle a given item; restatements to fair value are recognised in the period’s financial result;
- financial liabilities at amortised cost are measured at amortised cost on every balance sheet date.
Significant judgements and estimates
Financial assets are analysed at the end of each reporting period in terms of expected credit losses and indications of impairment.
Individual financial instruments of significant value are assessed for impairment individually. Other financial assets are split into groups with similar credit risk.
Financial instruments
The following table contains a comparison of fair values and book values:
| As at 31 December 2021 | As at 31 December 2020 | |||
|---|---|---|---|---|
| Book value | Fair value | Book value | Fair value | |
| FINANCIAL ASSETS | ||||
| Long-term | 414 678 | 195 031 | 308 797 | 97 957 |
| Financial assets measured at fair value | 195 031 | 195 031 | 97 957 | 97 957 |
| Trade and other receivables | 71 396 | (*) | 68 736 | (*) |
| Finance lease and sublease receivables | 580 | (*) | 513 | (*) |
| Funds in the Mine Decommissioning Fund | 147 671 | (*) | 141 591 | (*) |
| Short-term | 7 541 900 | 419 321 | 3 886 756 | 41 894 |
| Financial assets measured at fair value | 419 321 | 419 321 | 41 894 | 41 894 |
| Debt financial assets at amortised cost | − | (*) | 61 | (*) |
| Assets arising from contracts with customers | 412 908 | (*) | 322 446 | (*) |
| Trade and other receivables | 2 555 215 | (*) | 1 579 826 | (*) |
| Finance lease and sublease receivables | 903 | (*) | 975 | (*) |
| Cash and cash equivalents | 4 153 553 | (*) | 1 941 554 | (*) |
| TOTAL FINANCIAL ASSETS | 7 956 578 | 614 352 | 4 195 553 | 139 851 |
| FINANCIAL LIABILITIES | ||||
| Long-term | 5 164 542 | 4 511 184 | 7 344 820 | 6 749 538 |
| Credit facilities, loans and debt securities | 4 457 014 | 4 493 596 | 6 607 756 | 6 674 407 |
| Lease liabilities | 565 993 | (*) | 529 140 | (*) |
| Trade and other payables | 123 947 | (*) | 132 793 | (*) |
| Financial liabilities measured at fair value | 17 588 | 17 588 | 75 131 | 75 131 |
| Short-term | 6 570 244 | 2 425 720 | 2 900 566 | 1 295 048 |
| Credit facilities, loans and debt securities | 2 177 791 | 2 177 791 | 1 224 061 | 1 224 061 |
| Lease liabilities | 30 678 | (*) | 25 172 | (*) |
| Trade and other payables | 4 067 738 | (*) | 1 548 057 | (*) |
| Liabilities arising from contracts with customers | 46 108 | (*) | 32 289 | (*) |
| Financial liabilities measured at fair value | 247 929 | 247 929 | 70 987 | 70 987 |
| TOTAL FINANCIAL LIABILITIES | 11 734 786 | 6 936 904 | 10 245 386 | 8 044 586 |
| As at 1 January 2021 | Gains/losses recognised in financial result due to balance sheet measurement or modification | Interest income/costs | Impairment – expected credit losses | Loss/gain on disposal or derecognition | Other comprehensive income | Change | As at 31 December 2021 | |
|---|---|---|---|---|---|---|---|---|
| Financial assets at fair value through profit or loss: | 85 985 | 8 282 | − | − | − | − | 372 348 | 466 615 |
| financial assets mandatorily measured at fair value through profit or loss | 70 460 | 472 | − | − | − | − | 366 540 | 437 472 |
| financial assets voluntarily measured at fair value through profit or loss | 15 525 | 7 810 | − | − | − | − | 5 808 | 29 143 |
| Equity instruments at fair value through other comprehensive income | 53 866 | (4 913) | − | − | − | − | (36 366) | 12 587 |
| Derivative instruments used in hedge accounting | − | 1 292 | − | − | − | 133 858 | − | 135 150 |
| Financial assets at amortised cost: | 4 054 214 | 138 | 16 581 | (4 411) | (360) | − | 3 274 581 | 7 340 743 |
| debt financial assets at amortised cost | 61 | 138 | 15 687 | (15 526) | (360) | − | − | − |
| trade and other receivables | 1 648 562 | − | − | 11 061 | − | − | 966 988 | 2 626 611 |
| assets arising from contracts with customers | 322 446 | − | − | 54 | − | − | 90 408 | 412 908 |
| cash and cash equivalents | 1 941 554 | − | 631 | − | − | − | 2 211 368 | 4 153 553 |
| funds in the Mine Decommissioning Fund | 141 591 | − | 263 | − | − | − | 5 817 | 147 671 |
| Finance lease and sublease receivables | 1 488 | − | − | − | − | − | (5) | 1 483 |
| Financial liabilities at fair value through profit or loss: | (6 445) | (4 240) | − | − | − | (445) | (254 387) | (265 517) |
| financial liabilities mandatorily measured at fair value through profit or loss | (6 445) | (4 240) | − | − | − | (445) | (254 387) | (265 517) |
| Derivative instruments used in hedge accounting | (139 673) | 8 332 | − | − | − | 131 341 | − | − |
| Financial liabilities at amortised cost: | (9 544 956) | (26 451) | (1 163) | − | 11 351 | − | (1 311 379) | (10 872 598) |
| credit facilities, loans and debt securities | (7 831 817) | (26 451) | (1 163) | − | 11 351 | 1 213 275 | (6 634 805) | |
| trade and other payables | (1 680 850) | − | − | − | − | − | (2 510 835) | (4 191 685) |
| liabilities arising from contracts with customers | (32 289) | − | − | − | − | − | (13 819) | (46 108) |
| Lease liabilities | (554 312) | − | − | − | − | − | (42 359) | (596 671) |
| Total | (6 049 833) | (17 560) | 15 418 | (4 411) | 10 991 | 264 754 | 2 002 433 | (3 778 208) |
| As at 1 January 2020 | Gains/losses recognised in financial result due to balance sheet measurement or modification | Interest income/costs | Impairment – expected credit losses | Loss on disposal or derecognition | Other comprehensive income | Change | As at 31 December 2020 | |
| Financial assets at fair value through profit or loss: | 31 362 | 9 559 | − | − | − | − | 45 064 | 85 985 |
| financial assets mandatorily measured at fair value through profit or loss | 13 037 | 12 359 | − | − | − | − | 45 064 | 70 460 |
| financial assets voluntarily measured at fair value through profit or loss | 18 325 | (2 800) | − | − | − | − | 15 525 | |
| Equity instruments at fair value through other comprehensive income | 15 866 | − | − | − | − | 38 000 | 53 866 | |
| Financial assets at amortised cost: | 5 840 612 | (191) | 9 452 | (125 820) | − | − | (1 669 839) | 4 054 214 |
| debt financial assets at amortised cost | 52 225 | (191) | 9 978 | (144 086) | − | − | 82 135 | 61 |
| debt financial assets at amortised cost | 1 561 518 | − | − | 18 249 | − | − | 68 795 | 1 648 562 |
| debt financial assets at amortised cost | 330 447 | − | − | 17 | − | − | (8 018) | 322 446 |
| cash and cash equivalents | 3 761 947 | − | (1 493) | − | − | − | (1 818 900) | 1 941 554 |
| funds in the Mine Decommissioning Fund | 133 998 | − | 967 | − | − | − | 6 626 | 141 591 |
| other short-term investments | 477 | − | − | − | − | − | (477) | − |
| Finance lease and sublease receivables | 1 269 | − | − | − | − | − | 219 | 1 488 |
| Financial liabilities at fair value through profit or loss: | (37 132) | − | − | − | − | − | 30 687 | (6 445) |
| financial liabilities mandatorily measured at fair value through profit or loss | (37 132) | − | − | − | − | − | 30 687 | (6 445) |
| Derivative instruments used in hedge accounting | (23 802) | (7 046) | − | − | − | (108 862) | 37 | (139 673) |
| Financial liabilities at amortised cost: | (11 517 933) | 1 568 | 24 055 | − | (20 996) | − | 1 968 350 | (9 544 956) |
| credit facilities, loans and debt securities | (9 906 024) | 1 568 | 24 055 | − | (20 996) | − | 2 069 580 | (7 831 817) |
| trade and other payables | (1 599 278) | − | − | − | − | − | (81 572) | (1 680 850) |
| liabilities arising from contracts with customers | (12 631) | − | − | − | − | − | (19 658) | (32 289) |
| Lease liabilities | (532 263) | − | − | − | − | − | (22 049) | (554 312) |
| Total | (6 222 021) | 3 890 | 33 507 | (125 820) | (20 996) | (108 862) | 390 469 | (6 049 833) |
| As at 31 December 2021 | ||||
|---|---|---|---|---|
| Level 1 | Level 2 | Level 3 | Total | |
| Financial assets measured at fair value | 23 013 | 572 469 | 18 870 | 614 352 |
| Derivative instruments used in hedge accounting (e.g. interest rate swaps) | – | 135 150 | – | 135 150 |
| Equity instruments at fair value through other comprehensive income | – | – | 12 587 | 12 587 |
| Call options (at fair value through profit or loss) | – | 16 231 | – | 16 231 |
| Other derivative instruments at fair value through profit or loss | – | 421 088 | – | 421 088 |
| Interests at fair value through profit or loss | 23 013 | – | 6 283 | 29 296 |
| Total | 23 013 | 572 469 | 18 870 | 614 352 |
| Financial liabilities measured at fair value | – | (265 517) | – | (265 517) |
| Derivative instruments at fair value through profit or loss | – | (265 517) | – | (265 517) |
| Credit facilities, loans and debt securities | – | (6 671 387) | – | (6 671 387) |
| Total | – | (6 936 904) | – | (6 936 904) |
| As at 31 December 2020 | ||||
|---|---|---|---|---|
| Level 1 | Level 2 | Level 3 | Total | |
| Financial assets measured at fair value | 15 000 | 69 910 | 54 941 | 139 851 |
| Equity instruments at fair value through other comprehensive income | – | – | 53 866 | 53 866 |
| Call options (at fair value through profit or loss) | – | 15 982 | – | 15 982 |
| Other derivative instruments at fair value through profit or loss | – | 53 928 | – | 53 928 |
| Interests at fair value through profit or loss | 15 000 | – | 1 075 | 16 075 |
| Total | 15 000 | 69 910 | 54 941 | 139 851 |
| Financial liabilities measured at fair value | – | (146 118) | – | (146 118) |
| Derivative instruments at fair value through profit or loss | – | (6 445) | – | (6 445) |
| Derivative instruments used in hedge accounting (e.g. interest rate swaps) | – | (139 673) | – | (139 673) |
| Credit facilities, loans and debt securities | – | (7 898 468) | – | (7 898 468) |
| Total | – | (8 044 586) | – | (8 044 586) |
Financial assets and financial liabilities at fair value include:
shares in unrelated entities, the stake in which is below 20%; this line includes a stake in ElectroMobility Poland S.A., for which there is no market price quoted on an active market; having analysed the standard IFRS 9, the Group decided to qualify these interests as financial instruments through other comprehensive income; when the stake in ElectroMobility Poland S.A. was reclassified, it was measured at fair value and the measurement was recognised in the present-period financial result; in the event that interests in unrelated entities are quoted on the Warsaw Stock Exchange, their fair value is determined on the basis of stock market quotes;
- Polimex-Mostostal S.A. call options;
- derivative instruments, which include the measurement of interest rate swaps; the fair value of derivative instruments is established by calculating the net present value based on two yield curves, i.e. a curve to determine discount factors and a curve used to estimate future variable reference rates;
- forward contracts for the purchase of electricity and gas and property rights
Non-current debt financial assets at amortised cost cover loans maturing in over one year. Current debt financial assets at amortised cost cover loans maturing in under one year. The item other short-term investments includes deposits with maturity over 3 months.
The fair value of bank credit, loans and debt securities is calculated for financial instruments that are based on a fixed rate of interest, based on current WIBOR.
The table above contains an analysis of financial instruments at fair value, grouped into a three-level hierarchy, where:
Level 1 – fair value is based on (unadjusted) market prices quoted for identical assets or liabilities on active markets
Level 2 – fair value is determined on the basis of values observed on the market, which are not a direct market quote (e.g. they are established by direct or indirect reference to similar instruments on a market),
Level 3 – fair value is determined using various measurement techniques that are not, however, based on observable market data.
No transfers between the levels were made in 2021.
As at 31 December 2021, financial assets at fair value included call options for Polimex-Mostostal S.A. shares, among other things. Pursuant to a call option agreement for Polimex-Mostostal S.A. shares of 18 January 2017, as amended, ENEA S.A. holds 22 call options from Towarzystwo Finansowe Silesia Sp. z o.o. (TFS) to purchase 6 937 500 shares, with a nominal value of PLN 2 each. The contractual share allocation date is at the end of each calendar quarter from September 2021 to December 2026. In September 2021 the sale of 187 500 Polimex – Mostostal S.A. shares previously held by ENEA S.A. was finalised, thus decreasing ENEA S.A.’s stake in that company’s share capital from 16.48% to 16.40%. On 30 August 2021, the Company submitted a demand to exercise its call option 2 and made a bank transfer for 187 500 Polimex – Mostostal S.A. shares. In November 2021 the Company submitted another demand to exercise its call option, i.e. call option 3, and in December 2021 made a bank transfer for 125 000 Polimex – Mostostal S.A. shares. At the date on which these consolidated financial statements were prepared, ENEA S.A. held a 16.45% stake in that company’s share capital. A fair-value measurement of the call options was prepared using the Black-Scholes model. The book value of these options as at 31 December 2021 was PLN 16 231 thousand (at 31 December 2020: PLN 15 982 thousand).
Moreover, the Group’s financial assets at fair value amounting to PLN 421 088 thousand (as of 31 December 2020: PLN 53 928 thousand) and financial liabilities at fair value amounting to PLN 265 517 thousand (as of 31 December 2020: PLN 6 445 thousand) include the measurement of derivative contracts for the purchase of electricity and gas and concerning property rights not used for the Group’s own purposes. The nominal value of contracts for the purchase and sale of electricity, gas and property rights maturing in 2021-2023, presented as financial assets and liabilities at fair value, amounts to PLN 617 212 thousand (PLN 191 542 thousand concerns procurement contracts and PLN 425 670 thousand concerns sales contracts).