SELECTED ACCOUNTING PRINCIPLES

Cash
Cash comprises cash on hand and in bank accounts as well as cash in transit. Cash equivalents are short-term, highly liquid investments (of initial maturity up to three months), that are readily convertible to known amounts of cash and which are subject to an insignificant risk of change in value. Valuation and outflows of cash and cash equivalents in foreign currencies are based on FIFO (First In First Out) method.

The Group classifies cash as financial assets measured at amortised cost, taking into account impairment allowances determined in accordance with the expected loss model.

Restricted cash consists mainly of funds on the VAT account (split payment) and funds on transaction margin accounts securing trading of transactions on commodity exchanges, e.g., TGE, delivered in cash by the Group. The increase in value mainly results from the aggregation of the transaction margins of ORLEN, Grupa LOTOS S.A. and PGNiG S.A. and consolidation of PGNiG Group entities.