Notes to the financial statements
21. Investments in Associated Undertakings
As at December 31st 2010 and December 31st 2009, the Group carried investments in the following associated undertakings:
| Company name | Registered office | Business profile | Dec 31 2010 | Dec 31 2009 |
|---|---|---|---|---|
|
AB Geonafta (prior to the merger - AB „Naftos Gavyba”) (parent undertaking of another group) |
Gargždai, Lithuania | Exploration for and production of crude oil, drilling services, and purchase and sale of crude oil | 40.31% | 40.31% (1) |
(1) On June 1st 2009, a new Shareholders Agreement was executed between UAB Meditus and LOTOS Petrobaltic S.A. in connection with the planned merger of AB Naftos Gavyba and AB Geonafta. The Shareholders Agreement provides that the agreement of July 18th 2000 concerning the transfer of AB Geonafta shares to UAB Meditus and LOTOS Petrobaltic S.A. by AB Naftos Gavyba is to be performed at least three days before the date on which AB Naftos Gavyba and AB Geonafta adopt resolutions on the companies’ merger. The agreement of July 18th 2000 was actually performed on July 1st 2009 with the effect that LOTOS Petrobaltic S.A. acquired directly AB Geonafta shares accounting for 12.20% of AB Geonafta’s share capital (shares acquired by UAB Meditus account for 16.37% of the share capital). Changes to AB Geonafta’s share capital were registered on July 9th 2009. The resolutions of AB Naftos Gavyba’s and AB Geonafta’s General Shareholders Meetings approving the merger of the two companies were adopted on July 20th 2009.
The merger of AB Naftos Gavyba and AB Geonafta was registered on August 7th 2009 and on the same date AB Naftos Gavyba was removed from the relevant register. LOTOS Petrobaltic S.A. and UAB Meditus hold (subsequent to the merger) shares accounting for 40.59% and 59.41% of AB Geonafta’s share capital, respectively.
As at December 31st 2009, AB Geonafta was owned by LOTOS Petrobaltic S.A., holding 40.59% of its share capital, and UAB Meditus, holding 59.41% of its share capital. The Group holds indirectly 40.31% of AB Geonafta’s share capital (as at December 31st 2008: 29.46% of AB Naftos Gavyba’s share capital). AB Geonafta is the parent undertaking of its own group (“AB Geonafta Group”) which comprises subsidiary undertaking UAB Geňciu Nafta and two jointly-controlled undertakings: UAB Minijos Nafta and UAB Manifoldas.
Investments in associated undertakings are accounted for using the equity method. The carrying value of investments in associated undertakings is as follows:
| PLN ‘000 | Dec 31 2010 | Dec 31 2009 |
|---|---|---|
| GK AB Geonafta | 93,064 (1) | 88,255 (2) |
| Energobaltic Sp. z o.o. | - | - (3) |
| Total investments in associated undertakings | 93,064 | 88,255 |
(1) The value of investments in associated undertakings accounts for dividend of PLN 9,782 thousand, in line with the resolution adopted by the General Shareholders Meeting of AB Geonafta on May 17th 2010.
(2) As at December 31st 2009, the Group presents its share in the net assets of the AB Geonafta Group after accounting for the changes in the company’s shareholder structure as a result of the merger of AB Naftos Gavyba and AB Geonafta.
(3) On November 27th 2009, LOTOS Petrobaltic S.A. acquired control over Energobaltic Sp. z o.o. (see Note 20).
Net assets of material undertakings accounted for using the equity method::
| PLN ‘000 | Dec 31 2010 | Dec 31 2009 |
|---|---|---|
| GK AB Geonafta | 229,278 | 217,418 |
| Energobaltic Sp. z o.o. | - | - (1) |
(1) On November 27th 2009, LOTOS Petrobaltic S.A. acquired control over Energobaltic Sp. z o.o. (see Note 20).
Liabilities and provisions for liabilities of material undertakings accounted for using the equity method:
| PLN ‘000 | Dec 31 20100 | Dec 31 2009 |
|---|---|---|
| GK AB Geonafta | 37,941 | 38,061 |
| Energobaltic Sp. z o.o. | - | - (1) |
(1) On November 27th 2009, LOTOS Petrobaltic S.A. acquired control over Energobaltic Sp. z o.o. (see Note 20).
Sales revenue of undertakings accounted for using the equity method:
| PLN ‘000 |
Year ended Dec 31 2010 |
Year ended Dec 31 2009 |
|---|---|---|
| GK AB Geonafta | 189,233 | 144,463 |
| Energobaltic Sp. z o.o. | - | 17,773 (1) |
(1) Until the day of acquisition of control by LOTOS Petrobaltic S.A. (see Note 20).
Net profit/(loss) of material undertakings accounted for using the equity method:
| PLN ‘000 |
Year ended Dec 31 201010 |
Year ended Dec 31 20099 |
|---|---|---|
| GK AB Geonafta | 45,944 | 20,269 |
| Energobaltic Sp. z o.o. | - | (2,562) (1) |
(1) Until the day of acquisition of control by LOTOS Petrobaltic S.A. (see Note 20).
Share in net profit (loss) of undertakings accounted for using the equity method, recognised in the Group’s statement of comprehensive income:
| PLN ‘000 |
Year ended Dec 31 20 |
Year ended Dec 31 20099 |
|---|---|---|
| GK AB Geonafta | 18,649 | 8,227 |
| Total | 18,649 | 8,227 |
Moreover, in the statement of changes in equity for the year ended December 31st 2010, the Group disclosed its share in the change in equity of the AB Geonafta Group in the amount of PLN (739) thousand (2009: PLN 2,471 thousand).
This is a translation of a document originally issued in Polish
The notes to the financial statements, presented on following pages, are their integral part.
