Maturity analysis for financial liabilities as at 31 December 2019
| NOTE | up to 1 year | above 1 to 3 years | above 3 to 5 years | above 5 years | Total | Carrying amount |
|
|---|---|---|---|---|---|---|---|
| Loans | 12.6.1.1 | 252 | 1,884 | – | – | 2,136 | 2,136 |
| Bonds | 12.6.1.2 | 201 | 1,047 | 5,299 | – | 6,547 | 6,471 |
| floating-rate bonds – undiscounted value | 29 | 1,047 | – | – | 1,076 | 1,002 | |
| fixed rate bonds – undiscounted value | 172 | – | 5,299 | – | 5,471 | 5,469 | |
| Trade liabilities | 12.5.3 | 7,889 | – | – | – | 7,889 | 7,889 |
| Investment liabilities | 12.5.3, 12.8 | 1,362 | 18 | 14 | 62 | 1,456 | 1,456 |
| Derivatives – undiscounted value | 12.8 | 263 | 4 | 2 | – | 269 | 268 |
| gross exchange amounts, incl.: | 54 | – | 2 | – | 56 | 56 | |
| currency forwards | 12.8 | 42 | – | 2 | – | 44 | 44 |
| commodity swaps | 12.8 | 12 | – | – | – | 12 | 12 |
| net exchange amounts, incl.: | 209 | 4 | – | – | 213 | 212 | |
| interest rate swaps | 12.8 | 19 | – | – | – | 19 | 19 |
| commodity swaps | 12.8 | 190 | 4 | – | – | 194 | 193 |
| Liabilities on settled derivatives | 12.8 | 209 | – | – | – | 209 | 209 |
| Hedged item adjustment | 12.8 | 4 | – | – | – | 4 | 4 |
| Other | 12.5.3, 12.8 | 611 | 22 | 7 | 43 | 683 | 683 |
| 10,791 | 2,975 | 5,322 | 105 | 19,193 | 19,116 |
The maturity analysis of financial liabilities related to lease was presented in note 14.2.1
Maturity analysis for financial liabilities as at 31 December 2018
| NOTE | up to 1 year | above 1 to 3 years | above 3 to 5 years | above 5 years | Total | Carrying amount |
|
| Loans | 12.6.1.1 | 112 | 2,151 | – | – | 2,263 | 2,263 |
| Bonds | 12.6.1.2 | 1,051 | 361 | 2,983 | 3,246 | 7,641 | 7,528 |
| floating-rate bonds – undiscounted value | 1,046 | 258 | 818 | – | 2,122 | 2,015 | |
| fixed rate bonds – undiscounted value | 5 | 103 | 2,165 | 3,246 | 5,519 | 5,513 | |
| Trade liabilities | 12.5.3 | 7,275 | – | – | – | 7,275 | 7,275 |
| Investment liabilities | 12.5.3, 12.8 | 1,067 | 19 | 14 | 69 | 1,169 | 1,169 |
| Derivatives – undiscounted value | 12.8 | 180 | 50 | – | – | 230 | 235 |
| gross exchange amounts, incl.: | 39 | – | – | – | 39 | 45 | |
| currency forwards | 12.8 | 15 | – | – | – | 15 | 18 |
| currency interest rate swaps | 12.8 | 24 | – | – | – | 24 | 27 |
| commodity swaps | 12.8 | – | – | – | – | – | – |
| net exchange amounts, incl.: | 141 | 50 | – | – | 191 | 190 | |
| currency forwards | 12.8 | – | – | – | – | – | – |
| interest rate swaps | 12.8 | – | 38 | – | – | 38 | 38 |
| commodity swaps | 12.8 | 141 | 12 | – | – | 153 | 152 |
| Liabilities on settled derivatives | 12.8 | 67 | – | – | – | 67 | 67 |
| Hedged item adjustment | 1 | 3 | – | – | 4 | 4 | |
| Other | 12.5.3, 12.8 | 368 | 63 | 31 | 158 | 620 | 620 |
| 10,121 | 2,647 | 3,028 | 3,473 | 19,269 | 19,161 |
A financial liquidity risk is the loss of ability to settle current liabilities on time.
The ORLEN Group is exposed to liquidity risk resulting from the relation between current assets and current liabilities. As at 31 December 2019 and 31 December 2018, the current liquidity indicator amounted to 1.8 for both dates.
The objective of the liquidity risk management process is to ensure the Group’s financial security and financial stability, and the basic tool limiting the above risk is the ongoing review of matching maturities of assets and maturity of liabilities. Moreover, the ORLEN Group carries out a policy of its financing sources diversification and uses range of tools for effective liquidity management.
The ORLEN Group uses systems of cash concentration („cash-pool systems”) to effectively manage current financial liquidity and to optimize financial costs within the ORLEN Group. At the end of 2019, the following cash-pool systems existed operated by PKN ORLEN:
PKN ORLEN may issue bonds within the settled limits as well as purchase bonds issued by the ORLEN Group entities when managing liquidity. Additional information about bonds in note 12.6.1.2.
In 2019, the ORLEN Group invested cash in bank deposits. Decisions regarding bank deposits are based on maximization of the rate of return and assessment of the financial condition of banks requiring a short-term rating by the bank for investment-grade deposits.
As at 31 December 2019 and as at 31 December 2018 the maximum possible indebtedness due to loans amounted to PLN 9,160 million and PLN 10,025 million, respectively. As at 31 December 2019 and as at 31 December 2018 PLN 6,742 million and PLN 7,181 million, respectively, remained unused.
The value of guarantees regarding liabilities to third parties granted during ongoing operations as at 31 December 2019 and as at 31 December 2018 amounted to PLN 2,586 million and PLN 579 million, respectively. The amount of PLN 2 billion is a bank guarantee for liabilities under the call issued by PKN ORLEN to subscribe for the sale of all shares of ENERGA S.A. Other guarantees concerned mainly: civil-law guarantees of contract performance and public-law guarantees resulting from generally applicable regulations secured regularity of business licensed in the liquid fuels sector and resulting from this activity tax and customs receivables, etc. In addition, guarantees and sureties granted in the Group on behalf of related parties as at 31 December 2019 and as at 31 December 2018 amounted to PLN 9,946 million and PLN 10,570 million, respectively. They were mainly related to secure of ORLEN Capital future liabilities due to these transactions of Eurobonds issuance and timely payment of liabilities by related parties.
Based on analysis and forecasts as at the end of the reporting period, the Group recognised the probability of payment of above amounts as low.
Credit risk
The Group assess that the risk of unsettled receivables by customer in the field of undue receivables and due receivables not covered by allowance is negligible, due to effective management of trade credit and debt recovery. The Group, among others, sets limits for particular customers and establishes hedges, has the possibility to compensate of mutual debts. The Group uses non-recourse factoring, as well as reverse factoring solution.
Limits are set based on financial analysis of customers (on basis of provided financial statements and history of cooperation) or the current report from the business information agency.
Separate group are customers for whom an insurance limit is issued e.g.: fleet, micro fleet, export contractors.
Some contractors make a deposit on account. In case of the absence of credit limit, contractors are obliged to make a prepayment.
The measure of credit risk is the maximum credit risk for each class of financial instruments, which is equal to their carrying amount (note 12.5.2. i 12.8).
As at 31 December 2019 and as at 31 December 2018 the Group received bank and insurance guarantees of PLN 3,301 million and PLN 2,793 million, respectively. The Group additionally receives from its customers collateral in the form of sureties, voluntary submission to execution (Article 777 of the Code of Civil Procedure), deposits, registered pledges, mortgages, bills of exchange, guarantees and letters of credit.