Consolidated non-financial statement Economic aspects of operation

Economic results

GRI No. AREA
EC 1
Direct economic value generated and distributed, including revenues, operating costs, employee compensation, donations and other community investments, retained earnings, and payments to capital providers and governments.

 

Grupa LOTOS 2005 2006 2007 2008 2009
Thousand PLN
Net income 8,547,293 11,630,382 11,867,884 14,900,794 12,711,611
Operating costs 7,549,452 10,712,102 10,851,429 14,867,282 12,116,519
Remuneration of employees and other benefits 77,859 82,771 94,724 115,587 131,585
Payments to the investors 29,553 3,093 65,680 61,497 127,114
Payments to the public sector 4,135,495 5,249,087 6,730,682 7,108,738 8,557,314
Social investments 939 1,876 1,121 651 793

On 30 June 2008, the Shareholders’ Meeting of Grupa LOTOS took the resolution on the distribution of net profit for 2007. According to the resolution, a part of the net profit of Grupa LOTOS amounting to PLN 2,500 thousand was allocated to the special purpose fund of Grupa LOTOS for financing social projects of Grupa LOTOS.

The LOTOS Group 2005 2006 2007 2008 2009
Thousand PLN
Net income 9,707.829 12,834,708 13,143,463 16,309,960 14,344,851
Operating costs 8,053,554 10,978,033 11,346,692 15,287,258 12,750,542
Remuneration of employees and other benefits 320,502 359,998 388,418 422,506 462,948
Payments to the investors 47,783 32,845 96,768 99,729 176,338
Payments to the public sector 4,720,673 5,968,567 7,194,536 7,519,904 8,951,791
Social investments 1,644 2,352 1,362 898 839

 

GRI No. AREA
EC 3 Coverage of the organization’s defined pension plan and allowance obligations

Due to the liabilities of the employer resulting from the Collective Agreement, Grupa LOTOS creates reserves for pensions, disability pensions and anniversary bonuses.

Grupa LOTOS 2005 2006 2007 2008 2009
Thousand PLN
Reserves for anniversary bonuses and pension and disability pension pays:
- long-term 14,288 15,150 19,072 27,612 28,820
- short-term 2,193 2,189 2,753 3,666 4,348
Total reserves 16,481 17,339 21,825 31,278 33,168
Payments within the Grupa LOTOS employee insurance plans within the so called 3rd pillar of insurance investment funds 897 1,453 2,496 3,105 3,439
The LOTOS Group
Thousand PLN
Reserves for anniversary bonuses and pension and disability pension pays:
- long-term 49,771 54,232 60,295        82,587 87,961
- short-term 12,751 7,472 8,888     9,505 10,733
Total reserves 62,522 61,704 69,183 92,092 98,694
Payments within the LOTOS Group employee insurance plans within the so called 3rd pillar of insurance investment funds 3,024 4,524 7,068 8,720 10,195
GRI No. AREA
EC 4 Material financial support granted by State
Grupa LOTOS 2005 2006 2007 2008  2009
Thousand PLN
Received subsidies 13,144 3,416 2,808 - 5,908
Subsidies accounted for - - - - -
Value of subsidies as of the year end 13,144 16,560 19,368 19,368 25,276
The LOTOS Group
Thousand PLN
Received subsidies 13,144 3,486 4,322 19 5,908
Subsidies accounted for 732 634 601 663 744
Value of subsidies as of the year end 17,967 20,819 24,540 23,896 40,343

LOTOS Asfalt operates in the Tarnobrzeg Special Economic Zone EURO-PARK WISŁOSAN pursuant to the Permit No. 158/ARP S.A./2008 of 23 January 2008. The permission was granted until 15 November 2017. Under applicable regulations LOTOS Asfalt is exempt from the corporate income tax within the operations covered by the permission. LOTOS Asfalt calculates the tax basis according to the Act on corporate income tax of 15 February 1992. For the purpose of calculating the tax basis, the exempt income and the taxable income, LOTOS Asfalt allocates its income and costs according to either operations in the zone or outside the zone. The exemption from the income tax is effected under the Act on special economic zones of 20 October 1994 and the Permit No. 158/ARP S.A./2008 of 23 January 2008.

Presence on the market

GRI No. AREA
EC 5 Relation of the standard basic remuneration to the minimum remuneration granted in the main locations of Grupa LOTOS’s operations 

 

Value of minimum salaries in Poland in 2009 (in PLN) 1,276
Grupa LOTOS LOTOS Asfalt LOTOS Kolej LOTOS Oil LOTOS Paliwa LOTOS Parafiny
Value of minimum remuneration (basic) on the lowest level of remunarations (in PLN) 2,189 2,150 2,373 2,155 2,500 1,400

Ratio of the lowest basic remuneration to the minimum domestic  remuneration (in %)

172 168 186 169 196 110

GRI No.
AREA
EC 6 Policy, practices and proportion of spending on locally-based suppliers at the main locations of operation

The LOTOS Group is interested in economic development of all the areas where its entities operate. Grupa LOTOS runs its business in compliance with the rules of corporate social responsibility and sustainability.
Strict procurement policies apply in the LOTOS Group. Companies prefer buying from local suppliers provided their prices and qualities, as well as quality certificates held, are comparable to the offers of other potential suppliers. The factors that affect the selection of a supplier, apart from the location, depend on the type of services/goods that are to be procured and include:

  • competitive price,
  • comprehensive offer,
  • quality of offer,
  • letters of reference and the experience of the supplier and its team in implementing projects similar to the one enquired about,
  • certificates held,
  • lead time,
  • payment terms,
  • aesthetics (visual attractiveness), quality of production, diversity and functionality of sold products, and
  • attractiveness of designs and functionality of solutions.

Grupa LOTOS: 80% of suppliers are local businesses operating in the main locations of Grupa LOTOS’s presence, i.e. from Gdańsk, Warsaw and Krakow. About 60% of contracts are concluded with suppliers who run operate in the Pomorskie Voivodeship.

LOTOS Asfalt: The strategic supplier of raw materials to LOTOS Asfalt at its main locations (Gdańsk, Jasło and Czechowice) is Grupa LOTOS. 95% of suppliers are local companies that have their branches or warehouses located all over Poland. Due to the shortage of the main raw materials for the production of bitumen made by the domestic companies, some of raw materials are procured from Polish agents or representatives who import products from Europe and countries from outside Europe, having their warehouses in Europe or Poland. The products and materials available in Poland are procured from local suppliers who deliver their products to a production plant. In Jasło and Czechowice, the suppliers come from the south of Poland.

LOTOS Kolej: The largest costs of material are incurred by Grupa LOTOS due to spare parts for the rolling stock. All firms that provide such parts are located in the south of Poland, therefore only some of the consumables can be bought from local firms, i.e. in the Pomeranian Voivodeship.

LOTOS Parafiny: Grupa LOTOS has its production facilities in Czechosławice and Jasło, therefore local suppliers come from southern Poland. More than 50% of suppliers come from this part of Poland, exclusive of suppliers of strategic raw materials. About 60% of Jasło supplies are provided by local shipping companies.

LOTOS Oil: Grupa LOTOS makes an effort to apply the policy of selecting supplies so as to purchase from at least two sources in each category of products. In case of a monopoly supplier, Grupa LOTOS intends to subject such a monopoly to regular revisions. The ongoing procurement policy is based on penetration of local markets to in order to identify suppliers. Shall a reliable and prospective supplier be found, Grupa LOTOS invites it to the tender procedure. There are certain categories of procurement, in particular at low prices, where the local suppliers cannot meet expectations of Grupa LOTOS with regard to prices and delivery times – such suppliers are invited to the tender process anyway. It has been assumed that a local supplier is a supplier who issues invoices in the voivodeship where the production plan and the distribution centre of Grupa LOTOS is located. The main plants are located in Gdańsk, Czechowice, Jasło and Piotrków Trybunalski.

GRI No. AREA
EC 7 Procedures for local employment and proportion of senior management employees from the local community at the main locations of operation

The LOTOS Group employs senior management according to the profile and requirements of positions. Such managers have to fulfil the set requirements to the maximum level. The HR policy does not give any special preferences to persons from the local labour market. Employees of Grupa LOTOS are often promoted to the higher positions in Grupa LOTOS.

Grupa LOTOS: The ratio of senior management from the local community at the main locations of Grupa LOTOS is as follows: 83% in Gdańsk, 100% in Warszaw and 0% in Krakow, where Grupa LOTOS does not employ any senior managers.

LOTOS Asfalt: The ratio of senior management from the local community at the main locations of Grupa LOTOS is as follows: 100% in Czechowice, 71% in Jaśło and 79% in Gdańsk.

LOTOS Kolej: 100% of senior managers come from the local community, i.e. from the Pomeranian Voivodeship.

LOTOS Oil: At the main locations of its operations, i.e. in Gdańsk, Czechowice, Jaśło and Piotrków Trybunalski, the ratio of employment of the senior management from the local community amounts to 100%.

LOTOS Parafiny: The ratio of senior management from the local community at the main locations of Grupa LOTOS is as follows: in Czechowice 86.7% and in Jasło 87.5%.

Indirect financial impact

GRI No. AREA
EC 8 Development and impact of infrastructure investments and services provided primarily for public benefit through commercial, in-kind, or pro bono engagement

In 2009, Grupa LOTOS provided financial support to initiatives serving the general public. The total value of subsidies amounted to PLN 277 thousand. Such projects are not aimed at developing the business activity, but they are the proof of commitment of Grupa LOTOS for the local communities and local economies.

The support for the above-mentioned projects is aimed at:

  • for investments in educational institutions: improving educational premises for children and youth and the quality of education,
  • for investments in medicine and the disabled: raising the quality and efficiency of therapy, and
  • for investments in safety: improving the safety of traffic.
Entity City / town Voivodeship Scope
2009
Foundation for Surgery Development VIRIBUS UNITIS Gdynia Pomorskie Purchase of medical equipment – an ultrasonograph appliance Pro Focus 2202 for the Oncologic Surgery ward at the Red Cross City Hospital
Specialist Hospital Jasło Podkarpackie

Co-financing of medical equipment purchases – a harmonic knife and accessories

Powiatowe Centrum Zdrowia Sp. z o.o. Kartuzy Pomorskie Procurement of medical equipment – 4 cardiomonitors
Gmina of the City of Gdańsk – Roads and Green Areas Administration Gdańsk Pomorskie Co-financing the repairs of the pavement in Gdańskiego Kolejarza Street in Gdańsk Rudniki
Complex of Food Industry and Chemical Schools Gdańsk Pomorskie Procurement of equipment for the chemical laboratory – a laboratory drier with the air circulation and the water-steam bath
Faculty of Drilling, Oil and Gas at the AGH University of Science and Technology Kraków Małopolskie Procurement of teaching aids – ball Hoppler viscometer and a printer
Special Education Centre Jasło Podkarpackie Purchase of 100 chairs for the disabled students
Rev. E Dutkiewicza Gdańsk Pomorskie Purchase of 4 specialist beds