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Financial information
The past year ushered in a series of challenges for the companies in the fuel sector. The decisions made by us have demonstrated that we are able to take rapid steps to adapt to a demanding environment and ensure the desired profitability for our projects.
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Segment performance
The segmental management model we have implemented enhances management efficiency, delivering cost and revenue synergies across the organization.
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Letter from the Vice-President of the Board
2014 ushered in a series of challenges for the companies in the fuel sector. The decisions made by the LOTOS Group have demonstrated that we are able to take rapid steps to adapt to a demanding environment and ensure the desired profitability for our projects.
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Business environment
The key factor that had a strong impact on both the global and Polish petroleum markets in 2014, with significant consequences for the LOTOS Group’s performance, was the price of crude oil, which also determined the price of petroleum products.
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Strategic objectives
The LOTOS Group’s Strategy is designed to strengthen our position as a strong, innovative and efficient business which plays a major role in ensuring national energy security.
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Business model
Our operations consist in crude oil production and processing, as well as wholesale and retail sale of petroleum products, among which are: fuels (unleaded gasoline, diesel oil and light fuel oil), heavy fuel oil, bitumens, aviation fuel, naphtha, propane-butane LPG and base oils.
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Risk and opportunities
At the LOTOS Group, we identify a range of diverse risks, which may affect all areas of our business. The key risks in terms of their impact on our operations are the financial risks as well as risks affecting the exploration and production area. In the analysis of the risks, we also factor in issues related to sustainable development.
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Key data 2014
With revenue of ca. PLN 28.5bn in 2014, we rank fourth in the group of 500 largest businesses in Poland.
System of values
Our mission is to pursue innovation-driven, sustainable development in the exploration, production and processing of hydrocarbons and marketing of high-quality products, which is conducive to creating lasting value for shareholders, ensuring customer satisfaction, enhancing and leveraging the employee potential, and which is responsible towards society, environmentally friendly and consistent with the energy security policy.
In our business and CSR activities, we are guided by the key principle of legal compliance and responsibility for the impact of our operations on the world around us. We improve our organizational culture by rooting it in a strong and coherent value system, comprising transparency, openness, innovativeness and responsibility. It is further supported by ethical values we undertook to follow by adopting the LOTOS Group’s Code of Ethics in 2013. These include: professionalism, respect, transparency and cooperation.
transparency - openness - innovativeness - responsibility - professionalism - respect - transparency - cooperation
As a corporate citizen, in all areas of our activity we endorse and abide by the principles of the United Nations Global Compact, a voluntary international corporate citizenship initiative of unprecedented reach. We adhere to the following United Nations Global Compact principles:
- Businesses should support and respect the protection of internationally proclaimed human rights;
- Businesses should make sure they are not complicit in human rights abuses;
- Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining;
- Businesses should uphold the elimination of all forms of forced and compulsory labour;
- Businesses should uphold the effective abolition of child labour;
- Businesses should uphold the elimination of discrimination in respect of employment and occupation;
- Businesses should support a precautionary approach to environmental challenges;
- Businesses should undertake initiatives to promote greater environmental responsibility;
- Businesses should encourage the development and diffusion of environmentally friendly technologies;
- Businesses should work against corruption in all its forms, including extortion and bribery.
In 2014, Grupa LOTOS became a signatory of the UN Global Compact’s new initiative – Call to Action on Anti-Corruption, which is a joint appeal to governments to take steps to prevent all forms of corruption. The UN initiative’s postulates are very close to what we believe in, as demonstrated by the LOTOS Group’s Ethical Conduct Programme and Misconduct Risk Management Programme. Taking part in that international initiative, we have reaffirmed Grupa LOTOS’s commitment to counteracting corruption by:
- Incorporating an anti-corruption policy into our business strategy,
- Building a corporate culture based on ethical values,
- Zero tolerance by the Board to bribery and corruption,
- Exchange of knowledge and experience in combating corruption,
- Collaboration with other participants of the UN Global Compact,
- Promoting and enhancing transparency in business.
In 2014, we continued our involvement in the Vision of Sustainable Development of Polish Businesses until 2050, a joint initiative of the Minister of Economy, the Minister of Environment, the Responsible Business Forum, and PwC, a consultancy. Modelled on the international initiative pursued by the World Business Council for Sustainable Development (WBCSD), the project aims to integrate Polish businesses around the idea of sustainable development, making the business community aware of the importance of sustainable development to their organizations’ long-term growth, and to foster dialogue between government authorities and businesses so that specific solutions can be worked out to further Poland’s development goals. Grupa LOTOS played a part in developing Vision 2050, ultimately becoming a signatory of the associated Declaration of Polish Businesses for Sustainable Development in 2012. In 2014, the Company’s delegates joined the working groups established in the third stage of Vision 2050 to promote social innovation and use of renewable energy sources.
