18. Trade receivables and other assets

PLN ’000	Note	Dec 31 2013	Dec 31 2012 (restated)	Jan 1 2012 (restated)
Financial assets
Non-current financial assets
Other financial assets:	31.1	194,002	86,435	125,472
Security deposits receivable		23,089	28,555	20,919
Finance lease receivables	18.2	8,061	6,180	3,564
Shares		9,746	9,756	9,746
Oil and gas facility decommissioning fund (1)	32.4.1	29,866	27,481	24,491
Deposits		-	-	38,106
Security deposits (margins)	32.4.1	11,029	11,163	11,748
Cash blocked in bank accounts	32.3.1; 32.4.1	110,379	-	-
Derivative financial instruments		-	-	12,098
Other receivables		1,832	3,300	4,800
Total		194,002	86,435	125,472
Current financial assets
Trade receivables. including:	31.1	1,594,746	1,632,837	2,071,269
- from related entities	36.1	16,657	2,507	90
Other financial assets:	31.1	185,376	173,238	119,789
Security deposits receivable		23,089	10,483	7,998
Deposits	32.4.1	29,653	122,563	40,565
Cash blocked in bank accounts	32.3.1; 32.4.1	103,559	18,320	49,671
Investment receivables		13,144	2,457	1,299
Other receivables		15,931	19,415	20,256
Total		1,780,122	1,806,075	2,191,058
Total financial assets		1,974,124	1,892,510	2,316,530
Non-financial assets
Non-current non-financial assets
Prepayments for lease of railway locomotives		6,663	8,990	-
Other		10,316	11,807	10,819
Total		16,979	20,797	10,819
Current non-financial assets
Value-added tax receivable		51,899	165,152	42,236
Other receivables from the state budget other than income tax		632	2,780	10,622
Property and other insurance		4,522	5,704	4,427
Prepayments for lease of railway locomotives		2,336	2,336	-
Settlements under joint ventures (Norwegian fields		27,158	41,756	50
Excise duty on inter-warehouse transfers		27,237	29,678	33,620
Prepaid deliveries		9,588	7,523	4,293
Other		16,331	7,954	9,367
Total		139,703	262,883	104,615
Total non-financial assets		156,682	283,680	115,434
Total		2,130,806	2,176,190	2,431,964
including:
non-current		210,981	107,232	136,291
current:		1,919,825	2,068,958	2,295,673
- trade receivables		1,594,746	1,632,837	2,071,269
- other		325,079	436,121	224,404

As at December 31st 2013 and December 31st 2012, the item Deposits mainly included the Parent's deposits securing payments of interest under credit facilities contracted for the financing of the 10+ Programme, as well as for financing and refinancing inventories, referred to in Note 27.1. As at December 31st 2012, the item included Parent's cash of PLN 83,826 thousand earmarked for plant maintenance, as required under the 10+ Programme financing agreements. The cash was used in the first half of 2013.

As at December 31st 2013, Security deposits (margins) mainly included PLN 8,917 thousand security deposit (margin) provided by the Parent to BNP Paribas Bank Polska, to enable execution of transactions on the ICE Futures Internet platform (December 31st 2012: PLN 9,051 thousand).

As at December 31st 2013, Cash blocked in bank accounts comprised cash on ecrow account associated with the agreement concluded between the parties involved in the execution of the YME Project in Norway; for more information, see Note 30.1. As at December 31st 2013, the blocked cash totalled PLN 213,938 thousand. As at December 31st 2012, Cash blocked in bank accounts comprised LOTOS Paliwa Sp. z o.o.'s cash in of PLN 18,320 thousand. These funds were blocked by a court enforcement officer in connection with court proceedings concerning WANDEKO and were released in 2013; for more information, see Note 35.1.

The collection period for trade receivables in the ordinary course of business is 7−35 days.

As at December 31st 2013, a PLN 3,156 thousand assignment was established on the Group’s receivables as security for the Group's liabilities. As at December 31st 2012, the Group’s receivables were not subject to any assignment by way of security for the Group's liabilities.

For description of the financial instruments, see Note 7.23. For description of objectives and policies of financial risk management, see Note 32.

The maximum credit risk exposure of financial assets is presented in Note 32.6.

For currency risk sensitivity analysis of financial assets, see Note 32.3.1.

For interest rate risk sensitivity analysis of financial assets, see Note 32.4.1.

18.1 Change in impairment losses on receivables

PLN ’000	Year ended Dec 31 2013	Year ended Dec 31 2012
At beginning of the period	177,152	195,646
Recognised	11,998	11,325
Exchange differences on translating foreign operations	34	(1,025)
Used	(11,015)	(20,179)
Deconsolidation (LOTOS Tank Sp. z o.o.) (1)	(735)	-
Reversed	(2,141)	(8,615)
At end of the period	175,293	177,152

The amounts resulting from recognition or reversal of impairment losses on receivables are presented under other income or expenses (the principal portion) and under finance income or costs (the default interest portion).

Recognised impairment losses included PLN 9,584 thousand under the principal (2012: PLN 9,898 thousand) and PLN 2,371 thousand under interest (2012: PLN 1,416 thousand).

The item Reversed comprised PLN 1,280 thousand under the principal (2012: PLN 8,537 thousand) and PLN 861 thousand under interest (2012: PLN 78 thousand).

In 2013, the Group disclosed the recognition and reversal of impairment losses on the principal under Other expenses, in the amount of PLN 6,012 thousand (2012: PLN 5,012 thousand under Other income). Moreover, in 2013 the Group offset the impairment loss of PLN 2,292 thousand against corresponding Other income items (2012: PLN 6,373 thousand).
 
The table below presents aging of past due receivables for which no impairment losses were recognised:

PLN ’000	Dec 31 2013	Dec 31 2012
Up to 1 month	47,503	81,742
From 1 to 3 months	8,051	11,932
From 3 to 6 months	5,694	4,800
From 6 months to 1 year	4,948	2,275
Over 1 year	6,341	5,357
Total	72,537	106,106

No impairment loss was recognised on past due receivables because they are secured against credit risk with a mortgage, pledge, insurance policy, bank guarantee or surety.

As at December 31st 2013 and December 31st 2012, the share of trade receivables from the Group’s four largest customers as at the end of the reporting period slightly exceeded 20% of total trade receivables. In the Group’s opinion, with the exception of receivables from the above-mentioned customers, there is no material concentration of credit risk. The Group’s maximum exposure to credit risk as at the end of the reporting period is best represented by the carrying amounts of those instruments. The concentration of risk related to sales is limited, as the Group trades with large number of partners.

18.2 Finance lease receivables

The Group has developed and operates the “LOTOS Family” Franchise Programme, which defines the procedures for managing service stations. The Group has entered into franchise agreements with entities operating service stations at their own risk and for their own account (Partners). Receivables under franchise agreements represent mainly expenditure on the design of DOFO service stations operated by dealers under agreements executed for periods from 5 to 10 years.

PLN ’000	Minimum lease payments		Present value of minimum lease payments
	Dec 31 2013	Dec 31 2012	Dec 31 2013	Dec 31 2012
Up to 1 year (1)	3,437	2,716	3,406	2,683
From 1 to 5 years	7,604	5,970	7,534	5,896
Over 5 years	532	288	527	284
Total	11,573	8,974	11,467	8,863
Less unrealised finance income	(106)	(111)	-	-
Present value of minimum lease payments	11,467	8,863	11,467	8,863
including:
non-current			8,061	6,180
current			3,406	2,683