Notes to the financial statements
39. Related Parties
39.1 Transactions with Non-Consolidated Related Undertakings
Transactions with related undertakings are executed on market terms.
| PLN '000 | Year ended Dec 31 2010 | Dec 31 2010 | ||
|---|---|---|---|---|
|
Sales to related undertakings (incl, excise duty and fuel charge) |
Purchases from related undertakings (incl, excise duty and fuel charge) |
Receivables from related undertakings | Payables to related undertakings | |
| Associated undertakings accounted for using the equity method | - | - | - | 7,936 |
| Non-consolidated undertakings | - | - | - | - |
| Total | - | - | - | 7,936 |
In the period from January 1st to December 31st 2010, total value of finance expenses related to transactions with related undertakings valued with equity method amounted to PLN 15 thousand and comprised interest on loans.
In the period from January 1st to December 31st 2010, total value of loans advanced by related undertakings valued with equity method was PLN 7,921 thousand (or EUR 2,000 thousand).
| PLN '000 | Year ended Dec 31 2009 | Dec 31 2010 | ||
|---|---|---|---|---|
|
Sales to related undertakings (incl, excise duty and fuel charge) |
Purchases from related undertakings (incl, excise duty and fuel charge |
Receivables from related undertakings | Payables to related undertakings | |
| Associated undertakings accounted for using the equity method | 3,141 | 4,381 | - | - |
| Non-consolidated undertakings | 29 | 140 | - | - |
| Total | 3,170 | 4,521 | - | - |
In the period from January 1st to December 31st 2009, total value of finance income from transactions with non-consolidated related undertakings amounted to PLN 237 thousand and comprised other interest.
In the period from January 1st to December 31st 2009, total value of finance expenses from transactions with non-consolidated related undertakings amounted to PLN 1,287 thousand and comprised interest on advanced loans.
In the period from January 1st to December 31st 2009, the Group reversed impairment losses on receivables from non-consolidated related undertakings in the amount of PLN 1,671 thousand.
In the period from January 1st to December 31st 2009, total value of other operating expenses connected with transactions with non-consolidated related undertakings amounted to PLN 7 thousand (other operating expenses).
39.2 Transactions with Undertakings in which the State Treasury Holds Equity Stakes
Transactions with undertakings in which the State Treasury holds equity stakes are executed on standard market terms.
Transactions between the Group and material (1) related undertakings of the State Treasury:
| PLN '000 | Sales to related undertakings incl, excise duty and fuel charge | Purchases from related undertakings incl, excise duty and fuel charge |
|---|---|---|
|
Year ended Dec 31 2010 |
19,538 | 161,622 |
|
Year ended Dec 31 2009 |
21,799 | 176,718 |
|
PLN '000 |
Net receivables from related undertakings | Payables to related undertakings |
|---|---|---|
| Dec 31 2010 | 1,752 | 6,054 |
| Dec 31 2009 | 2,311 | 8,935 |
(1) i.e. undertakings whose share capital exceeds PLN 100,000 thousand, based on the list of companies in which the State Treasury holds a majority stake or 100% of the shares prepared as at December 31st 2010 or the list of companies in which the State Treasury holds equity stakes as at December 31st 2009 (data for 2009).
In 2010 and 2009, the largest transactions with an undertaking in which the State Treasury held an equity stake were the transactions with Przedsiębiorstwo Eksploatacji Rurociągów Naftowych PRZYJAŹŃ S.A.
39.3 Entity with Significant Influence over the Group
As at December 31st 2010, the State Treasury held a 53.19% stake in Grupa LOTOS S.A.
In the year ended December 31st 2010, no transactions were concluded between Grupa LOTOS S.A. and the State Treasury.
Nafta Polska S.A. (controlled by the State Treasury) held a 51.91% stake in Grupa LOTOS S.A. until July 22nd 2009.
In the period from January 1st to July 22nd 2009, no transactions were concluded between Grupa LOTOS S.A. and Nafta Polska S.A.
In the period from January 1st to December 31st 2009, no transactions were concluded between Grupa LOTOS S.A. and the State Treasury, except for the transaction described in Note 32 to these financial statements, as a result of which the State Treasury came to hold a 63.97% stake in Grupa LOTOS S.A.
39.4 Remuneration of the Management and the Supervisory Board Members and Information on Loans and Other Similar Benefits Granted to Members of the Parent Undertaking’s Management and Supervisory Staff
The remuneration paid to the members of the Company’s Management and Supervisory Boards was as follows:
| PLN '000 |
Year ended Dec 31 2010 |
Year ended Dec 31 2009 |
|---|---|---|
| Management Board | ||
| Short-term employee benefits (salaries) | 1,165 | 713 |
| Length-of-service awards | - | - |
| Share-based employee benefits | - | - |
| Supervisory Board | ||
| Short-term employee benefits (salaries) | 261 | 233 |
| Management Board – subsidiary undertakings (1) | ||
| Short-term employee benefits (salaries) | 432 | 278 |
| Total remuneration paid (2) | 1,858 | 1,224 |
(1) Remuneration paid to the members of the Management Board of Grupa LOTOS S.A. for serving on the Supervisory Boards and the Boards of Directors of direct and indirect subsidiaries.
(2) The value of remuneration reflects changes in the composition of the Management and Supervisory Boards of Grupa LOTOS S.A. during the reporting period.
Moreover, the Company created a provision for length-of-service awards and retirement severance payments for the members of Grupa LOTOS S.A.'s Management Board in the amount of PLN 260 thousand (2009: PLN 221 thousand).
Also, acting in line with the Act on Remunerating Persons Who Manage Certain Legal Entities, the Company created a provision for the maximum value (as determined in line with the act) of the annual bonuses for 2010 to be paid to the members of Grupa LOTOS S.A.'s Management Board,in the amount of PLN 284 thousand (2009: PLN 145 thousand, as shown in the above table under 2010).
As at December 31st 2010 and December 31st 2009, the Company did not grant any loans or similar benefits to members of its management and supervisory staff.
39.5 Remuneration Paid or Payable to Other Members of the Key Management Staff
| PLN '000 |
Year ended Dec 31 2010 |
Year ended Dec 31 2009 |
|---|---|---|
| Short-term employee benefits (salaries) | 27,243 | 19,078 |
| Total remuneration paid to key management staff (except for Management and Supervisory Boards members of Grupa LOTOS S.A.) | 27,243 | 19,078 |
The Group also created a provision for length-of-service awards and retirement severance payments for the key management staff, in the amount of PLN 6,351 thousand (2009: PLN 4,879 thousand).
Moreover, the Group created a provision for annual bonuses expected to be paid to key management staff for 2010, in the amount of PLN 6,738 thousand (for 2009: PLN 5,912 thousand, shown in the above table under 2010).
As at December 31st 2010, loans and similar benefits granted by the Group to members of key management staff totalled PLN 39 thousand (as at December 31st 2009: PLN 56 thousand).
In the period January 1st – December 31st 2010 and January 1 – December 31st 2009, the Group did not grant any loans or similar benefits to members of key management staff.
39.6 Other transactions with Members of the Company’s Management or Supervisory Boards, Their Spouses, Siblings, Ascendants, Descendants or Other Close Persons
Transactions with Members of the Company’s Executive or Supervisory Boards, Their Spouses, Siblings, Ascendants, Descendants or Other Close Persons
In the year ended December 31st 2010 and December 31st 2009, the Company and the Group members executed no significant transactions with members of the Management and Supervisory Boards(1), their spouses, relatives or relatives by affinity in the direct line up to the second degree, persons related through guardianship or adoption or with other persons with whom they have personal relationships. The Company and members of the Group advanced no loans, made no advances, issued no guarantees and concluded no agreements to or with any such persons which would provide for considerable benefits to Grupa LOTOS S.A. or its subsidiary or associated undertakings.
(1) Taking into account changes in the composition of the Supervisory Board (see Note 3 to these financial statements).
Transactions between the Company or the Group Members and Entities Related through Members of the Management and Supervisory Boards
Below are presented transactions concluded in 2010 (based on representations made by members of the Management and Supervisory Boards concerning transactions with related parties).
|
Type of relationship (PLN ‘000) |
Sale | Purchase | Receivables | Payables |
|---|---|---|---|---|
| Supervisory staff | 1,307 | - | - | - |
| Management staff | - | - | - | - |
| TOTAL | 1,307 | - | - | - |
|
Type of relationship (PLN ‘000) |
Sale | Purchase | Receivables | Payables |
|---|---|---|---|---|
| Supervisory staff | 1,270 | 1,778 | 70 | 181 |
| Management staff | - | - | - | - |
| TOTAL | 1,270 | 1,778 | 70 | 18 |
39.7 Additional Information on Results of the LOTOS Group Member Undertakings
| PLN '000 | Net profit (loss) (1) | |
|---|---|---|
|
Year ended Dec 31 2010 |
Year ended Dec 31 2009 |
|
| LOTOS Paliwa Sp. z o.o. | 63,800 | 109,971 |
| LOTOS Gaz S.A. (2) | (1,239) | (2,716) |
| LOTOS Oil S.A. | 39,755 | 36,138 |
| LOTOS Asfalt Sp. z o.o. | 149,277 | 179,496 |
| LOTOS Ekoenergia S.A. | (1) | (3) |
| LOTOS Kolej Sp. z o.o. | 19,398 | 32,570 |
| LOTOS Serwis Sp. z o.o. | 7,947 | 4,852 |
| LOTOS Lab Sp. z o.o. | 4,478 | 2,100 |
| LOTOS Straż Sp. z o.o. | 258 | 797 |
| LOTOS Ochrona Sp. z o.o. | 462 | 1,447 |
| LOTOS Parafiny Sp. z o.o. | 15,564 | 10,920 |
| LOTOS Tank Sp. z o.o. | 794 | 4,478 |
| Grupa Kapitałowa LOTOS Czechowice S.A. | 27,561 | 16,764 |
| Grupa Kapitałowa LOTOS Jasło S.A. | (2,579) | (445) |
| Grupa Kapitałowa LOTOS Petrobaltic S.A. | 101,495 | 111,445 |
| UAB LOTOS Baltija | 4 (3) | (13) |
| LOTOS Park Technologiczny Sp. z o.o. | (18) | 321 |
(1) In accordance with the consolidation packages (see Note 9).
(2) Until July 23rd 2009 LOTOS Gaz S.A. controlled subsidiary undertaking KRAK-GAZ Sp. z o.o. w upadłości likwidacyjnej (in bankruptcy by liquidation) (see Note 2).
(3) Net profit (loss) for the 11 months ended November 30th 2010, until the date of control takeover by the LOTOS Petrobaltic Group (see Note 2).
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.
