← Statement Notes index
9. Income and expenses
9.1 Expenses by nature
| PLN '000 | Note | Year ended Dec 31 2015 |
Year ended Dec 31 2014 |
|---|---|---|---|
| Depreciation/amortisation | 8 | 714,568 | 808,941 |
| Raw materials and consumables used (1) | 16,860,134 | 24,734,942 | |
| Services | 1,434,003 | 1,280,200 | |
| Taxes and charges | 408,976 (2) | 179,710 | |
| Employee benefits expense | 9.2 | 685,254 | 681,865 |
| Other expenses by nature | 222,462 | 344,315 | |
| Merchandise and materials sold | 1,336,113 | 978,764 | |
| Total expenses by nature | 21,661,510 | 29,008,737 | |
| Change in products and adjustments to cost of sales | 331,484 | 67,003 | |
| Total | 21,992,994 | 29,075,740 | |
| including: | |||
| Cost of sales | 20,249,028 | 27,466,614 | |
| Distribution costs | 1,284,846 | 1,162,071 | |
| Administrative expenses | 459,120 | 447,055 |
(1) Including PLN 11,107 thousand of foreign exchange gains from operating activities, recognised as cost of sales (2014: PLN 65,110 thousand of foreign exchange losses) (see Note 31.3).
(2) The year-on-year increase in taxes and charges in 2015 relates mainly to the Parent and is attributable to the introduction, as of January 1st 2015, of a mandatory stocks charge, payable by fuel manufacturers to the Material Reserves Agency towards the costs of creating and financing public stocks of crude oil and petroleum products. In 2015, the Parent paid a stocks charge of PLN 219,928 thousand.
9.2 Employee benefits expense
| PLN '000 | Note | Year ended Dec 31 2015 |
Year ended Dec 31 2014 |
|---|---|---|---|
| Current salaries and wages | 531,551 | 491,466 | |
| Social security and other employee benefits | 148,628 | 144,793 | |
| Length-of-service awards, retirement and other post-employment benefits | 29.2 | 5,075 | 45,606 |
| Total employee benefits expenses | 9.1 | 685,254 | 681,865 |
| Change in products and adjustments to cost of sales | (152) | (20,579) | |
| Total | 685,102 | 661,286 | |
| including: | |||
| Cost of sales | 396,122 | 388,563 | |
| Distribution costs | 34,384 | 30,301 | |
| Administrative expenses | 254,596 | 242,422 |
9.3 Other income
| PLN '000 | Note | Year ended Dec 31 2015 |
Year ended Dec 31 2014 |
|---|---|---|---|
| Gain on disposal of non-financial non-current assets | 5,215 | 3,521 | |
| Grants | 30.2 | 7.353 | 1,889 |
| Reversal of impairment losses on receivables: | 18.1; 31.3 | 1.927 | - |
| - reversal of impairment losses | 10,021 | - | |
| - impairment losses | (8,094) | - | |
| Compensation (1) | 16,870 | 14,025 | |
| Gain on sale of organised part of business | 17 | 2.834 | - |
| Reimbursed excise duty (2) | 6,846 | 896 | |
| Other | 7,246 | 6,376 | |
| Total | 48,291 | 26,707 |
(1) Including: in 2015 chiefly PLN 12,764 thousand attributable to penalties for failure to collect guaranteed delivery amounts under contracts; in 2014 − PLN 7,927 thousand of compensation for a production stoppage in the Atla field (one of the Heimdal area assets).
(2) Reimbursements of excise duty unduly paid in earlier periods and deductions due to consumption of components or additives used in manufacture of finished products for which the excise duty had been settled at earlier stages of the trading process.
The Group offsets similar transaction types pursuant to IAS 1 – Presentation of Financial Statements, sections 34 and 35. The Group discloses material items of income and expense charged to profit or loss separately, as presented in the table above.
9.4 Other expenses
| PLN '000 | Note | Year ended Dec 31 2015 |
Year ended Dec 31 2014 |
|---|---|---|---|
| Impairment loss on property, plant and equipment and other intangible assets: | 85,817 | 806,141 | |
| Impairment losses: | 88,296 | 806,562 | |
| - on property, plant and equipment classified as exploration and evaluation assets: Poland: Słupsk area, B-27, B-28 fields | 13.1.1 | 1.836 | 31,853 |
| - on property, plant and equipment classified as development assets: Norway: YME field | 13.1.1 | 1.485 | 578,448 |
| - on property, plant and equipment classified as production assets: | 13.1.1 | 6,314 | 48,562 |
| - Norway: Heimdal area | 13.1.3 | - | 45,854 |
| - Lithuania | 13.1.3 | 6.314 | 2,708 |
| - on intangible assets classified as exploration and evaluation assets: | 15.1 | 10,262 | 14,439 |
| - Norway: Heimdal area, PL498 and PL497 licences | 15.1.1 | - | 14,439 |
| - Lithuania | 15.1.1 | 10.027 | - |
| - Poland: Słupsk area | 15.1.1 | 235 | - |
| - on intangible assets classified as exploration, development and production assets: Lithuania | 15.1.2 | 52.419 | 100,604 |
| - on refinery and other property, plant and equipment: | 13.2 | 15.980 | 32,656 |
| - service stations | 13.2 | 10.228 | 15,765 |
| - bitumen production unit (LOTOS Asfalt Branch in Jasło) | 13.2 | - | 15,893 |
| - vessels | 13.2 | 4.499 | - |
| - other assets | 1.253 | 998 | |
| Reversal of impairment losses: | (2.479) | (421) | |
| - on refinery and other property, plant and equipment: | (2.479) | (421) | |
| - service stations | 13.2 | (2.416) | - |
| - other assets | (63) | (421) | |
| Loss on discontinued projects | 13.1.1; 13.1.3; 15.1.1 | 27,395 | 11,935 |
| - Norway: Heimdal area (Fulla field - PL362, PL035B), PL503 licence | 15.1.1 | 14,846 | - |
| - Poland: Sambia area | 13.1.1; 15.1.1 | 12,378 | 5,937 |
| - Lithuania: Zvaginai well | 13.1.3 | - | 5,772 |
| - other assets | 171 | 226 | |
| Impairment loss on assets held for sale | 17 | 36.634 | |
| Impairment losses on receivables: | 18.1; 31.3 | - | 13,078 |
| - impairment losses | - | 15,928 | |
| - reversal of impairment losses | - | (2,850) | |
| Provisions: | 16,072 | 4,761 | |
| - provision for deficit in CO2 emission allowances | 34 | 1.059 | 1,257 |
| - revaluation of estimated provision for future cost of removal of MOPU from the YME field | 30.1 | 10.287 | - |
| - other provisions | 4,726 | 3,504 | |
| Fines and compensation | 1,546 | 1,512 | |
| Property damage incurred during ordinary course of business | 1,718 | 1,041 | |
| Cost brought forward | 4,908 | 567 | |
| Charitable donations | 1,866 | 1,067 | |
| VAT expense | 35.1 | 160.909 | - |
| Other | 4,476 | 5,760 | |
| Total | 341,341 | 845,862 |
The Group offsets similar transaction types pursuant to IAS 1 – Presentation of Financial Statements, sections 34 and 35. The Group discloses material items of income and expense charged to profit or loss separately, as presented in the table above.
9.5 Finance income
| PLN '000 | Note | Year ended Dec 31 2015 |
Year ended Dec 31 2014 |
|---|---|---|---|
| Dividends received | 1,120 | 1,103 | |
| Interest: | 20,697 | 19,096 | |
| - on trade receivables | 31.3 | 2,847 | 6,349 |
| - on cash | 31.3 | 139 | 1,249 |
| - on deposits | 31.3 | 16,181 | 9,360 |
| - other | 1,530 | 2,138 | |
| Revaluation of financial assets: | 78,809 | - | |
| - valuation of derivative financial instruments | 31.3 | 290,447 | - |
| - settlement of derivative financial instruments | 31.3 | (211,638) | - |
| Other | 11 | 1,541 | |
| Total | 100,637 | 21,740 |
The Group offsets similar transaction types pursuant to IAS 1 – Presentation of Financial Statements, sections 34 and 35. The Group discloses material items of income and expense charged to profit or loss separately, as presented in the table above.
9.6 Finance costs
| PLN '000 | Note | Year ended Dec 31 2015 |
Year ended Dec 31 2014 |
|---|---|---|---|
| Interest: | 284,148 | 202,503 | |
| - on bank borrowings | 31.3 | 150,364 | 141,584 |
| - on non-bank borrowings | 31.3 | 7,870 | 9,576 |
| - on notes | 31.3 | 3,819 | 3,373 |
| - on trade payables | 31.3 | 236 | 87 |
| - on finance lease liabilities | 31.3 | 10,152 | 12,142 |
| - on factoring arrangements | 4,472 | 7,400 | |
| - on other financial liabilities | 31.3 | 1,351 | - |
| - discount related to provisions for oil extraction facilities and for land reclamation, and other provisions | 30.1 | 22,202 | 20,426 |
| - cost of discount on employee benefits obligations | 29.1; 29.2 | 5,058 | 6,354 |
| - on liabilities to the state budget | 35.1 | 77,932 (1) | - |
| - other | 692 | 1,561 | |
| Exchange differences: | 344,940 | 307,020 | |
| - on bank borrowings | 31.3 | 175,425 | 222,455 |
| - on translation of intra-Group loans (2) | 31.3 | 47,750 | 68,284 |
| - on realised foreign-currency transactions in bank accounts | 31.3 | 108,419 | 16,530 |
| - on notes, including intra-Group notes (2) | 31.3 | 41,975 | 43,698 |
| - on cash | 31.3 | (8,874) | (11,564) |
| - on cash blocked in bank accounts | 31.3 | (20,435) | (37,630) |
| - on investment commitments | 31.3 | 2,529 | 4,675 |
| - on trade receivables and payables | 31.3 | (1,537) | (1,988) |
| - on other financial assets and liabilities | 31.3 | 858 | (1,074) |
| - other | (1,170) | 3,634 | |
| Revaluation of financial assets, including: | - | 197,849 | |
| - valuation of derivative financial instruments | - | 191,271 | |
| - settlement of derivative financial instruments | - | 6,578 | |
| Bank fees | 20,978 | 17,287 | |
| Bank guarantees | 5,317 | 2,776 | |
| Other | 32,860 (3) | 547 | |
| Total | 688,243 | 727,982 |
(1) Including a PLN 77,873 thousand cost related to interest on the tax arrears of the Parent (see Note 35.1).
(2) According to IAS 21 – The Effects of Changes in Foreign Exchange Rates, foreign exchange gains and losses on intra-Group foreign currency transactions are recognised in the Group’s net profit or loss.
(3) Including PLN 29,212 thousand of impairment loss on capitalised costs of financing of the B8 Project.
The Group offsets similar transaction types pursuant to IAS 1 – Presentation of Financial Statements, sections 34 and 35. The Group discloses material items of income and expenses charged to profit or loss separately, as presented in the tables above.
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)
