4. Explanatory notes to the statement of profit or loss

in PLN millions, unless otherwise stated

Note 4.1 Expenses by nature

		from 1 January 2018 to 31 December 2018	from 1 January 2017 to 31 December 2017
Note 9.3	Depreciation of property, plant and equipment and amortisation of intangible assets	1 903	1 684
Note 11.1	Employee benefits expenses	5 202	4 956
	Materials and energy	7 097	7 460
	External services	2 404	2 156
Note 5.2	Minerals extraction tax	1 671	1 765
	Other taxes and charges	535	506
Note 4.4	Reversal of impairment losses on property, plant and equipment and intangible assets	(26)	(344)
	Advertising costs and representation expenses	62	57
	Property and personal insurance	54	34
Note 4.4	Impairment losses on property, plant and equipment and intangible assets	35	92
	Other costs	103	157
	Total expenses by nature	19 040	18 523
	Cost of merchandise and materials sold (+)	653	571
	Change in inventories of finished goods and work in progress (+/-)	(375)	( 1 079)
	Cost of products for internal use of the Group (-) (mainly stripping costs of surface mines)	(1 383)	(1 468)
	Total costs of sales, selling costs and administrative expenses, including:	17 935	16 547
	Cost of sales	16 555	15 204
	Selling costs	374	371
	Administrative expenses	1 006	972

		from 1 January 2018 to 31 December 2018	from 1 January 2017 to 31 December 2017
Note 7.1	Measurement and realisation of derivatives	216	231
	Interest income calculated using the effective interest rate method	8	N/A*
Note 7.1	Exchange differences on assets and liabilities other than borrowings	593	-
	Release of unused provisions	51	132
	Other	166	199
	Total other operating income	1 034	562

Note 7.1	Measurement and realisation of derivatives	(305)	(492)
Note 7.1	Exchange differences on assets and liabilities other than borrowings	-	(1 466)
Note 4.4	Impairment losses on financial instruments	(24)	N/A*
Note 4.4	Impairment loss on fixed assets under construction and intangible assets not yet available for use	(60)	(773)
	Provisions recognised	(183)	(52)
	Other	(154)	(156)
	Total other operating costs	(726)	(2 939)

	Other operating income and (costs)	308	(2 377)

* N/A – not applicable – items which were not measured in accordance with principles arising from the application, from 1 January 2018, of IFRS 9.

		from 1 January 2018 to 31 December 2018	from 1 January 2017 to 31 December 2017
Note 7.1	Exchange differences on borrowings	-	1 251
Note 7.1	Measurement of derivatives	11	-
	Total income	11	1 251

Note 7.1	Interest on borrowings	(93)	(96)
	Unwinding of the discount of provisions effect	( 50)	(50)
	Bank fees and charges on borrowings	(15)	(44)
Note 7.1	Measurement of derivatives	-	(30)
Note 7.1	Exchange differences on borrowings	(593)	-
	Other	(21)	(11)
	Total costs	(772)	(231)

	Finance income and (costs)	(761)	1 020

		from 1 January 2018 to 31 December 2018	from 1 January 2017 to 31 December 2017
	Impairment losses on assets recognised in:
	cost of sales, of which:	63	150
	impairment loss on property, plant and equipment and intangible assets	35	92
	write-down of inventories	28	37
	allowance for impairment of trade receivables – per IAS 39	-	21
	other operating costs, of which:	84	798
Note 4.1	impairment losses on fixed assets under construction and intangible assets not yet available for use	60	773
Note 4.2	allowance for impairment of loans per IAS 39	-	23
Note 4.2	allowance for impairment of trade receivables – per IFRS 9	19	-
Note 4.2	allowance for impairment of other financial receivables	5	2
	Impairment losses, total	147	948

	Reversal of impairment losses on assets, recognised in:
	cost of sales, of which:	56	351
Note 4.1	impairment loss on property, plant and equipment and intangible assets	26	344
	write-down of inventories	30	5
	allowance for impairment of trade receivables – per IAS 39	-	2
Note 6.2	gains due to reversal of allowances for impairment of loans granted to joint ventures	733	-
	other operating income, of which:	15	44
	impairment losses on fixed assets under construction and intangible assets not yet available for use	-	41
	allowance for impairment of trade receivables – per IFRS 9	11	-
	allowance for impairment of other financial receivables	2	3
	allowance for impairment of other non-financial receivables	2	-
	Reversal of impairment losses, total	804	395