3.2. OPERATING EXPENSES
Accounting policies
Cost of gas This item comprises the cost of gas purchased on gas exchanges and from trading partners. The cost of gas purchased includes an appropriate portion of costs of system and transaction charges, costs of domestically produced gas, costs of denitrification and regasification. For details of the valuation of those items, see Note 6.2.1.
Raw materials and consumables used This item comprises the costs of raw materials and consumables used in principal business activities, in particular fuels for electricity and heat generation. Another material item in this cost group is the cost of electricity for trading.
Employee benefits expense Employee benefits expense includes in particular salaries, wages, social security contributions and cost of future benefits. For details of employee benefits expense, see Note 6.3.1.
Transmission and distribution services In connection with its transmission and distribution services, the Group incurs costs of services it contracts from third parties (this does not apply to costs related to comprehensive agreements, in which the Group acts as an agent (described in Note 3.1)). The transmission and distribution system operators charge the Group for the cost of transmission services, i.e. the cost of transmission of gas fuel via the network of pipelines, the cost of heat transmission and the cost of electricity distribution.
Other services This item comprises cost of third-party services required for the core activities of the Group companies, other than transmission services. Other services include in particular:
Taxes and charges This item includes in particular property tax expense and royalties for hydrocarbon production.
Recognition and reversal of impairment losses on property, plant and equipment and intangible assets For details of impairment of non-financial assets, see Note 6.1.3
Depreciation and amortisation expense This item comprises depreciation/amortisation expense on property, plant and equipment, right-of-use assets and intangible assets, calculated at the adopted depreciation/amortisation rates (for details, see Note 6.1.1 and Note 6.1.2). |
|
2019
|
2018
|
|
|
Cost of gas
|
(26,686)
|
(24,941)
|
|
|
Gas fuel
|
(26,687)
|
(24,957)
|
|
|
Cost of transactions hedging gas prices
|
1
|
16
|
|
|
Other raw materials and consumables used
|
(2,977)
|
(2,519)
|
|
|
Fuels for electricity and heat generation
|
(958)
|
(875)
|
|
|
Electricity for trading purposes
|
(1,483)
|
(1,151)
|
|
|
Other raw materials and consumables used
|
(536)
|
(493)
|
|
|
Employee benefits expense
|
(3,168)
|
(2,871)
|
|
|
Salaries and wages
|
(2,344)
|
(2,178)
|
|
|
Social security contributions
|
(519)
|
(468)
|
|
|
Long-term employee benefits
|
(95)
|
(27)
|
|
|
Other employee benefits expense
|
(210)
|
(198)
|
|
|
Transmission services
|
(1,053)
|
(1,039)
|
|
|
Other services
|
(1,828)
|
(1,865)
|
|
|
Regasification services
|
(370)
|
(366)
|
|
|
Repair and construction services
|
(277)
|
(271)
|
|
|
Mineral resources production services
|
(141)
|
(244)
|
|
|
Rental services
|
(86)
|
(117)
|
|
|
Other services
|
(954)
|
(867)
|
|
|
Taxes and charges
|
(782)
|
(819)
|
|
|
Recognition and reversal of impairment losses on property, plant and equipment and intangible assets
|
(659)
|
(463)
|
|
|
Cost of exploration and evaluation assets written-off
|
(259)
|
(687)
|
|
|
Impairment losses on property, plant and equipment
|
(388)
|
222
|
|
|
Impairment losses on intangible assets
|
(12)
|
2
|
|
|
Depreciation and amortisation
|
(3,056)
|
(2,720)
|
|
|
Total
|
(40,209)
|
(37,237)
|
Costs of lease liability recognised in the statement of comprehensive income
In the year ended December 31st 2019, costs of other services included:
- short-term lease expense of PLN 6m,
- expense on leases of low-value assets, other than short-term lease expense, of PLN 1m.
In the year ended December 31st 2018, the Group incurred the following lease expenses:
- operating lease expense of PLN 5m,
- rental costs: PLN 112m,
- perpetual usufruct charges of PLN 31m.