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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.
The Supervisory Board
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Powers of the Supervisory Board
Pursuant to the ‘Code of Best Practice for WSE Listed Companies’, members of the Supervisory Board should possess appropriate expertise and experience, and should perform their duties to a professional standard of care.
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Composition of the Supervisory Board
The State Treasury is entitled to directly appoint and remove one member of the Grupa LOTOS Supervisory Board as long as it remains a shareholder in the Company.
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Standing committees of the Supervisory Board
Standing committees of the Supervisory Board of Grupa LOTOS include the Audit Committee, Strategy and Development Committee, and Organization and Management Committee.
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Remuneration of the Supervisory Board
In 2014, members of the Supervisory Board were entitled to receive monthly remuneration calculated on the basis of the average monthly salary in the non-financial corporate sector in the fourth quarter of 2009.
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Independence status of the Supervisory Board
Independent members of the Supervisory Board are persons who are not linked in any way to the shareholders, the Company or its employees, as such relations could potentially result in a conflict of interests.
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Avoidance of conflicts of interest
Grupa LOTOS is not aware of any conflicts of interest that arose or could have arisen in 2014, which the member concerned should have notified the Supervisory Board about.
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Commitment to sustainable development
The committees of the Supervisory Board, viewing sustainability as an essential process for the Company and appreciating the importance of a responsible approach to business, brought matters related to sustainable development under discussion while performing their duties in 2014.
