10. Working capital
in PLN millions, unless otherwise stated
Note 10.1 Inventories
| Accounting policies |
|---|
| The Company measures inventories at cost, not higher than the sales price less costs of completing production and costs to sell. Inventory disposals are measured at weighted average cost. |
| As at 31 December 2018 | As at 31 December 2017 | |
|---|---|---|
| Materials | 400 | 431 |
| Half-finished goods and work in progress | 3 057 | 2 913 |
| Finished goods | 568 | 451 |
| Merchandise | 77 | 62 |
| Total net carrying amount of inventories | 4 102 | 3 857 |
Write-down of inventories in the financial period
| from 1 January 2018 to 31 December 2018 | from 1 January 2017 to 31 December 2017 | |
|---|---|---|
| Write-down recognised in cost of sales | 5 | 24 |
| Reversed write-down recognised in cost of sales | 27 | - |
Maturities of inventories
| As at 31 December 2018 | As at 31 December 2017 | |
|---|---|---|
| Maturity over the 12 months from the end of the reporting period | 147 | 82 |
| Maturity of up to 12 months from the end of the reporting period | 3 954 | 3 775 |
Note 10.2 Trade receivables
Accounting policies |
|---|
Trade receivables are initially recognised at the transaction price. After initial recognition, receivables are measured:
|
The Company is exposed to the credit risk and currency risk arising from trade receivables. Credit risk management and assessment of the credit quality of receivables is presented in Note 7.5.2.3. Information on the currency risk is presented in Note 7.5.1.3.
The following table presents the carrying amounts of trade receivables and the amount of expected credit losses:
| | As at 31 December 2018 | As at 31 December 2017 |
|---|---|---|
| Trade receivables measured at amortised cost - gross value | 181 | 1 035 |
| Loss allowance for expected credit losses (lifetime) - under IFRS 9 | (10) | - |
| Allowance for impairment – under IAS 39 | - | (1) |
| Trade receivables measured at amortised cost - net value | 171 | 1 034 |
| Trade receivables measured at fair value, including: | 139 | - |
| transferred to factoring | 70 | - |
| priced upon M+ formula | 69 | - |
| Total | 310 | 1 034 |
Note 10.3 Trade payables
Accounting policies |
|---|
| Trade payables are initially recognised at fair value less transaction cost and are measured at amortised cost at the end of the reporting period. |
| | As at 31 December 2018 | As at 31 December 2017 |
|---|---|---|
| Non-current trade payables | 162 | 163 |
| Current trade payables | 1 920 | 1 719 |
| Trade payables | 2 082 | 1 882 |
The item trade payables contains payables due to the purchase and construction of fixed and intangible assets which, as at 31 December 2018, amounted to PLN 162 million in the non-current part and PLN 844 million in the current part (as at 31 December 2017, respectively PLN 163 million and PLN 615 million).
The Company is exposed to currency risk arising from trade payables, and to liquidity risk. Information on currency risk is presented in Note 7.5.1.3 and on liquidity risk in Note 8.3.
The fair value of trade payables approximates the carrying amount.
Note 10.4 Changes in working capital
| Inventories | Trade receivables | Trade payables | Total working capital | |
|---|---|---|---|---|
| As at 31 December 2017 | (3 857) | (1 034) | 1 882 | (3 009) |
| Change in accounting policies – application of IFRS 9 | - | (16) | - | (16) |
| As at 1 January 2018, after application of IFRS 9 | (3 857) | (1 050) | 1 882 | (3 025) |
| As at 31 December 2018 | (4 102) | (310) | 2 082 | (2 330) |
| Change in the statement of financial position | ( 245) | 740 | 200 | 695 |
| Depreciation/amortisation recognised in inventories | 49 | - | - | 49 |
| Liabilities due to purchase of property, plant and equipment and intangible assets | - | - | (191) | (191) |
| Adjustments | 49 | - | (191) | (142) |
| Change in the statement of cash flows | (196) | 740 | 9 | 553 |
| Inventories | Trade receivables | Trade payables | Total working capital | |
|---|---|---|---|---|
| As at 1 January 2017 | (2 726) | (676) | 1 542 | (1 860) |
| As at 31 December 2017 | (3 857) | (1 034) | 1 882 | (3 009) |
| Change in the statement of financial position | (1 131) | (358) | 340 | (1 149) |
| Depreciation/amortisation recognised in inventories | 32 | - | - | 32 |
| Liabilities due to purchase of property, plant and equipment and intangible assets | - | - | (3) | (3) |
| Adjustments | 32 | - | (3) | 29 |
| Change in the statement of cash flows | (1 099) | (358) | 337 | (1 120) |