6. Investments in subsidiaries and joint ventures
in PLN millions, unless otherwise stated
Note 6.1 Investments in subsidiaries and joint ventures
Accounting policies |
|---|
In the financial statements of the Company, subsidiaries are those entities which are directly controlled by the Company. In the financial statements, investments in subsidiaries, which are not classified as available-for-sale are measured at cost plus any granted non-returnable payments, including for the coverage of losses presented in the financial statements of a subsidiary, less any impairment losses. Impairment is measured by comparing the carrying amount with the higher of the following amounts:
|
| 2018 | 2017 | ||
| As at 1 January | 3 013 | 2 002 | |
| Reversal of impairment losses | 402 | - | |
| Acquisition of shares or of newly-issued shares | 142 | - | |
| Recognition of impairment losses | (47) | (330) | |
| Reallocation of impairment losses | - | 1 368 | |
| Other | - | ( 27) | |
| As at 31 December | 3 510 | 3 013 |
The most significant investments in subsidiaries (direct share)
| Entity | Head Office | Scope of activities | Carrying amount of shares/investment certificates | |
|---|---|---|---|---|
| as at 31 December 2018 | as at 31 December 2017 | |||
| FUTURE 1 Sp.z o.o. | Lubin | management and control of other companies, including the KGHM INTERNATIONAL LTD. Group | 1 439 | 1 037 |
| "Energetyka" sp. z o.o. | Lubin | generation, distribution and sale of electricity and heat | 505 | 505 |
| KGHM I FIZAN | Wrocław | cash investing in securities, money market instruments and other property rights | 390 | 437 |
| KGHM Metraco S.A. | Legnica | trade, agency and representative services | 335 | 335 |
As at 31 December 2018 and as at 31 December 2017, the % of share capital held as well as the % of voting power in the above-mentioned subsidiaries was 100%.
Note 6.2 Receivables due to loans granted
| Accounting policies |
|---|
| Loans measured at amortised cost are initially recognised at fair value adjusted by costs directly associated with the loan and are measured at the end of the reporting period at amortised cost using the effective interest rate method, including impairment. Loans are classified as loans measured at amortised cost if they met two conditions: they are in a business model whose objective is to collect contractual cash flows due to holding financial assets, and have passed the SPPI (solely payments of principal and interest) test. The fair value of loans classified as measured at fair value through profit or loss is determined as the present value of the future cash flows, taking into account changes in market and credit risk factors during a loan’s lifetime. Loans are classified as loans measured at fair value if they did not pass the SPPI test, because in the structure of financing the target recipient of funds, debt is changed at the last stage into capital (the amount of capital is material) pursuant to the methodology of classification of financial instruments. |
| as at 31 December 2018 | as at 31 December 2017 | ||
|---|---|---|---|
| Loans measured at amortised cost – gross amount | 4 827 | 7 611 | |
| Allowances for impairment of expected credit loss in accordance with IFRS 9 | (272) | - | |
| Allowances for impairment in accordance with IAS 39 | - | (2 630) | |
| Loans measured at fair value | 1 724 | - | |
| Total, including: | 6 279 | 4 981 | |
| - long-term loans | 6 262 | 4 972 | |
| - short-term loans | 17 | 9 | |
The most significant items are loans granted to the companies of the KGHM Polska Miedź S.A. Group, connected with the realisation of mining projects executed by indirect subsidiaries of KGHM Polska Miedź S.A. from the KGHM INTERNATIONAL LTD. Group.