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.
The segmental management model we have implemented enhances management efficiency, delivering cost and revenue synergies across the organization.
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.
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.
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.
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.
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.
With revenue of ca. PLN 28.5bn in 2014, we rank fourth in the group of 500 largest businesses in Poland.
23. Cash flow hedging reserve
Cash flow hedging reserve comprises changes in the valuation of foreign-currency denominated bank borrowings used as hedging instruments designated to hedge cash flows, less the effect of income tax.
Changes in the fair value of derivative financial instruments designated to hedge cash flows, to the extent representing an effective hedge are charged to the cash flow hedging reserve, while the ineffective portion is charged to finance income or costs in the reporting period.
|PLN '000||Note||Year ended
Dec 31 2014
Dec 31 2013
|At beginning of the period||61,019||(36,801)|
|Valuation of cash flow hedging instruments||(584,653)||120,765|
|- effective portion||(584,731)||120,765|
|- ineffective portion (1)||78||-|
|Income tax on valuation of cash flow hedging instruments||10.1||111,099||(22,945)|
|At end of the period||(412,535)||61,019|
(1) The ineffective portion, charged to finance costs.
The Notes to the consolidated financial statements are an integral part of the statements.
(This is a translation of a document originally issued in Polish)
- Financial highlights - consolidated the LOTOS Group
- Consolidated Financial Statements for 2014
- Auditor’s opinion
- Auditor’s report
- Management's discussion and analysis
- Interactive LOTOS Databook