13.11.2. FINANCE COSTS
Financecosts
|
|
2020 |
2019 |
|
Interest calculated using the effective interest rate method |
(304) |
(187) |
|
Interest on lease |
(132) |
(100) |
|
Interest on tax liabilities |
(2) |
(2) |
|
Net foreign exchange loss |
(506) |
- |
|
Settlement and valuation of derivative financial instruments |
(841) |
(547) |
|
Other |
(104) |
(65) |
|
|
(1,889) |
(901) |
In 2020 and 2019 the net positions of valuation and settlement of derivative financial instruments (non-designated instruments for hedge accounting purposes) amounted to PLN (178) million and PLN 254 million, respectively and related mainly to hedging the risk of changes in exchange rates with regard to payments of invoices in foreign currency, the currency hedge for liquidity transactions, and to hedging interest rates and payment of bonds interests.
The main impact on the change in valuation and settlement of derivative financial instruments in 2020 was depreciation of the PLN against USD and EUR on financial markets.
The surplus of foreign exchange rate losses in 2020 in the amount of PLN (506) million results mainly from realized foreign exchange rate differences in the amount of PLN (141) million due to repayment of EUR loans by PKN ORLEN S.A. and from unrealized foreign exchange rate differences in the amount of PLN (461) million due to the Group's current debt in EUR currency as at 31 December 2020.
