10.7 Cash and cash equivalents

Accounting policies

Cash in hand and at banks, as well as short-term deposits held to maturity are measured at amortised cost.

Cash and cash equivalents disclosed in the consolidated statement of cash flows comprise cash in hand, overdraft facilities, and those bank deposits maturing within three months which are not classified as investments.

Note Dec 31 2021 Dec 31 2020
Cash and cash equivalents in the statement of financial position 11.1.1 2,572.1 2,145.6
Overdraft facilities (222.2)
Total cash and cash equivalents in the statement of cash flows 2,572.1 1,923.4

Cash and cash equivalents consist mainly of funds held in current accounts with banks bearing interest at variable interest rates. The level of interest on the deposited funds and its changes are based on the general terms of service of the individual banks. In addition, depending on the current cash requirements, if cash surplus is available, the Group companies make short-term deposits for various tenors, which bear interest at individually- determined rates.

As at December 31st 2021, the Group had undrawn credit of PLN 595.9m (December 31st 2020: PLN 471.5m) under working capital facilities for which all conditions precedent are met.

In July 2018, the Group began using the VAT split payment mechanism. Under this mechanism, the Group has separate bank accounts used to process VAT payments as part of settlements with trading partners and to pay other public charges. The Group uses the funds in these accounts to make payments on a regular basis. As at December 31st 2021, the balance of cash in VAT accounts was PLN 81.5m (December 31st 2020: PLN 175.0m).

As at December 31st 2021, cash in bank accounts pledged as security for the Group’s liabilities was PLN 947.8m (December 31st 2020: PLN 799.2m).

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