ORLEN ORLEN Group 2017
Integrated Report

ORLEN Group’s Structure

GRI INDICATORS:
Capitals:

6.1. Group's structure

SELECTED ACCOUNTING PRINCIPLES


 Principles of consolidation

The consolidated financial statements of the Group include assets, liabilities, equity, income, expenses and cash flows of the Parent Company and its subsidiaries that are presented as those of a single economic entity and are prepared as at the same reporting period as separate financial statements of the Parent Company and using uniform accounting principles in relation to similar transactions and other events in similar circumstances.

The subsidiaries are consolidated using full consolidation method, non-controlling interests shall be presented in the consolidated statement of financial position as noncontrolling interest, separately from the equity of the owners of the Parent Company. Joint operations by recognition of respective share in assets, liabilities, revenues and cost.

The joint ventures as well as investments in associates are accounted for under equity method. The Group's share in profit or loss of the investee is recognized in the Group's profit or loss as other operating activity. For investments in associates - the Group has a significant influence if it holds, directly or indirectly (i.e. through subsidiaries), from 20% to 49% of the voting rights of an entity, unless it can be clearly stated otherwise.


 

PROFESSIONAL JUDGEMENTS

Investments in subsidiaries and jointly controlled entities

The Group, regardless of the nature of its involvement in the entity (the entity in which it invested) defines its status by assessment, whether it controls the entity in which the investment was made, and whether it has a joint control in a joint venture, after consideration of all the facts and circumstances.


PKN ORLEN as the Parent Company is a multi-segment entity, appropriately allocated to all operating segments and corporate functions.

Name of entity Parent company Share in total voting rights Consolidation method/Valuation method
    31/12/2017 31/12/2016  
Downstream Segment
ORLEN Lietuva Group
AB ORLEN Lietuva PKN ORLEN S.A. 100% 100% full

UAB Mazeikiu Naftos prekybos namai

AB ORLEN Lietuva 100% 100% full

OU ORLEN Eesti

UAB Mezeikiu naftos prekybos namai 100% 100% full

SIA ORLEN Latvija

UAB Mezeikiu naftos prekybos namai 100% 100% full

UAB Emas

AB ORLEN Lietuva 100% 100% full
UNIPETROL Group
PARAMO, a.s. UNIPETROL, a.s. 100% 100% full

Paramo Oil, s.r.o. (in liquidation)

PARAMO, a.s. 100% 100% full
UNIPETROL RPA, s.r.o. UNIPETROL, a.s. 100% 100% full

UNIPETROL Slovensko, s.r.o.

UNIPETROL RPA, s.r.o. 100% 100% full

UNIPETROL Deutschland GmbH

UNIPETROL RPA, s.r.o. 100% 100% full

UNIPETROL RPA Hungary Kft.

UNIPETROL RPA, s.r.o. 100% 100% full

Spolana a.s.

UNIPETROL RPA, s.r.o. 100% 100% full

UNIPETROL DOPRAVA, s.r.o.

UNIPETROL RPA, s.r.o. 100% 100% full
PETROTRANS, s.r.o. UNIPETROL RPA, s.r.o. 100% 100% full
ČESKÁ RAFINÉRSKÁ, a.s.1 UNIPETROL, a.s. - 100% full
Butadien Kralupy a.s. UNIPETROL, a.s. 51% 51% share in assets and liabilities
Basell Orlen Polyolefins Group
Basell ORLEN Polyolefins Sp. z o.o. PKN ORLEN S.A. 50% 50% equity method

Basell ORLEN Polyolefins Sprzedaż Sp. z o.o.

Basell ORLEN Polyolefins Sp. z.o.o. 100% 100% equity method
ORLEN Południe Group
ORLEN Południe S.A. PKN ORLEN S.A. 100% 100% full

Energomedia Sp. z o.o.

ORLEN POŁUDNIE S.A. 100% 100% full

Euronaft Trzebinia Sp. z o.o.

ORLEN POŁUDNIE S.A. 100% 100% full

Konsorcjum Olejów Przepracowanych - Organizacja Odzysku S.A.

ORLEN Południe S.A. 89% 89% full
ORLEN Oil Group
ORLEN Oil Sp. z o.o. PKN ORLEN S.A. 100% 100% full

Platinum Oil Wielkopolskie Centrum Dystrybucji Sp. z o.o.2

ORLEN Oil Sp. z o.o. 67.49% 22% full

Orlen Oil Cesko s.r.o.

ORLEN OIL Sp. z o.o. - - full
ORLEN Asfalt Group
ORLEN Asfalt Sp. z o.o. PKN ORLEN S.A. 100% 100% full

ORLEN Asfalt Ceska Republika s.r.o.

ORLEN ASFALT Sp. z o.o. 100% 100% full
Anwil S.A. PKN ORLEN S.A. 100% 100% full
Inowrocławskie Kopalnie Soli „Solino" S.A. PKN ORLEN S.A. 100% 100% full
Kopalnia Soli Lubień Sp. z o.o. PKN ORLEN S.A. 100% 100% full
ORLEN Paliwa Sp. z o.o. PKN ORLEN S.A. 100% 100% full

 

Name of entity Parent company Share in total voting rights Consolidation method/Valuation method
    31/12/2017 31/12/2016  
ORLEN Aviation Sp. z o.o. PKN ORLEN S.A. 100% 100% full
ORLEN Eko Sp. z o.o. PKN ORLEN S.A. 100% 100% full
Baltic Power Sp. z o.o. PKN ORLEN S.A. 100% 100% full
ORLEN KolTrans Sp. z o.o. PKN ORLEN S.A. 99.88% 99.85% full
Ship-Service S.A. PKN ORLEN S.A. 60.86% 60.86% full
ORLEN Serwis S.A. PKN ORLEN S.A. 100.00% 100.00% full
Retail Segment
AB Ventus-Nafta PKN ORLEN S.A. 100% 100% full
ORLEN Deutschland GmbH PKN ORLEN S.A. 100% 100% full
ORLEN Budonaft Sp. z o.o. PKN ORLEN S.A. 100% 100% full
ORLEN Centrum Serwisowe Sp. z o.o. PKN ORLEN S.A. 99.33% 99.33% full
UNIPETROL RPA, s.r.o. UNIPETROL, a.s. 100% 100% full
Upstream Segment
ORLEN Upstream Group        

ORLEN Upstream Sp. z o.o.

PKN ORLEN S.A. 100% 100% full

ORLEN Upstream Kanada Ltd.

PKN ORLEN S.A. 100% 100% full

1426628 Alberta Ltd.

ORLEN Upstream Kanada Ltd. 100% 100% full

OneEx Operations Partnership

ORLEN Upstream Kanada Ltd. 100% 100% full

Pieridae Production GP Ltd

ORLEN Upstream Kanada Ltd. 50% 50% equity method

671519 NB Ltd

Pieridae Production GP Ltd 50% 50% equity method

KCK Atlantic Holdings Ltd.

ORLEN Upstream Kanada Ltd. 100% 100% full

Pieridae Production LP

KCK Atlantic Holdings Ltd. 80% 80% equity method

FX Energy, Inc.

ORLEN Upstream Sp. z o.o. 100% 100% full

Frontier Exploration, Inc.

FX Energy, Inc. 100% 100% full

FX Energy Netherlands Partnership C.V.

FX Energy, Inc. 100% 100% full

FX Energy Netherlands B.V.

FX Energy Netherlands Partnership C.V. 100% 100% full

FX Energy Poland Sp. z o.o.

FX Energy Netherlands Partnership C.V. 100% 100% full
Corporate Functions        
AB ORLEN Lietuva PKN ORLEN S.A. 100% 100% full
UNIPETROL Group        
UNIPETROL, a.s. PKN ORLEN S.A. 62.99% 62.99% full

UNIPETROL RPA, s.r.o.

UNIPETROL, a.s. 100% 100% full

Unipetrol výzkumně vzdělávací centrum, a.s.

UNIPETROL, a.s. 100% 100% full
HC Verva Litvinov, a.s. UNIPETROL RPA, s.r.o. 70.95% 70.95% full
ORLEN Administracja Sp. z o.o. PKN ORLEN S.A. 100% 100% full
ORLEN Capital AB PKN ORLEN S.A. 100% 100% full
ORLEN Centrum Usług Korporacyjnych Sp. z o.o. PKN ORLEN S.A. 100% 100% full
ORLEN Finance AB PKN ORLEN S.A. 100% 100% full
ORLEN Holding Malta Group        

ORLEN Holding Malta Ltd.

PKN ORLEN S.A. 100% 100% full

Orlen Insurance Ltd.

ORLEN HOLDING MALTA Ltd. 100% 100% full
ORLEN Ochrona Group        
ORLEN Ochrona Sp. z o.o. PKN ORLEN S.A. 100% 100% full

ORLEN Apsauga UAB

ORLEN OCHRONA Sp. z o.o. 100% 100% full
ORLEN Projekt S.A. PKN ORLEN S.A. 99.77% 99.77% full
ORLEN Laboratorium S.A. PKN ORLEN S.A. 100% 99.38% full
Płocki Park Przemysłowo -Technologiczny Group        
Płocki Park Przemysłowo-Technologiczny S.A. (PPPT S.A.) PKN ORLEN S.A. 50% 50% equity method

Centrum Edukacji Sp. z o.o.

PPPT S.A. 69.43% 69.43% equity method

1From 01.01.2017 UNIPETROL RPA, s.r.o.
2In 2016, the Company accounted for under equity method, in 2017 consolidated using the full consolidation method, detailed information in note 6.2.

Activity of core companies belonging to ORLEN Group

Name of entity Headquarters Principal activity
AB ORLEN Lietuva (including its own Capital Group) Lithuania - Juodeikiai crude oil processing, production of refining products and wholesale
UNIPETROL a.s. (including its own Capital Group) Republika Czeska - Praga crude oil processing as well as manufacture and distribution of refinery, petrochemical and chemical products
ANWIL S.A. Poland - Włocławek production of nitrogen fertilizers, plastic and chemicals
ORLEN Południe S.A. Poland - Trzebinia crude oil processing, production and sale of biofuels, oils
ORLEN Oil Sp. z o.o. Poland - Cracow production, distribution and sale of grease oils, maintenance liquids
ORLEN Asfalt Sp. z o.o. Poland - Płock manufacture and sale of road bitumens and specific bitumen products
ORLEN Paliwa Sp. z o.o. Poland - Płock liquid fuels trade
Inowrocławskie Kopalnie Soli „Solino" S.A. Poland - Inowrocław storage of crude oil, fuels , extraction of brine and packaging of salt
ORLEN Upstream Sp. z o.o. (including its own Capital Group) Poland - Warsaw exploration and recognition of hydrocarbon deposits, extraction of crude oil and natural gas

6.2. Changes in shareholder structure of the ORLEN Group

TYPE OF TRANSACTION / ENTITY TRANSACTION DATE NUMBER OF AQUIRED / (SOLD) SHARES SHARE IN TOTAL VOTING RIGHTS AFTER TRANSACTIONS
PURCHASE OF SHARES
by PKN ORLEN:      

in ORLEN Laboratorium S.A.

10 March 2017 6,213 100.00%
by PKN ORLEN:      

in ORLEN KolTrans Sp. z o.o.

30 November 2017 11,201 99.88%
by ORLEN KolTrans Sp. z o.o, for depreciation:      

in ORLEN KolTrans Sp. z o.o.

30 November 2017 2,660 0.00%
by ORLEN OIL Sp. z o.o.:      

in Platinum Oil Wielkopolskie Centrum Dystrybucji Sp. z o.o.

20 December 2017 1,064 67.49%
MERGERS OF ENTITIES      

Unipetrol RPA s.r.o. i ČESKÁ RAFINÉRSKÁ a.s. as a result, one company was established under the company: Unipetrol RPA.

1 January 2017 - 100.00%
INCREASE IN SHARE CAPITAL AND SUBSCRIPTION OF SHARES      
by PKN ORLEN:      

in ORLEN Upstream Sp. z o.o.*

15 September 2017 4,534 100.00%
by PKN ORLEN:      

in ORLEN Upstream Sp. z o.o.*

7 November 2017 2,472 100.00%
by Euronaft Trzebinia Sp. z o.o.:      

in ORLEN KolTrans Sp. z o.o.

2 October 2017 13,861 25.33%

shares of shareholders in the ORLEN KolTrans share capital following the increase: PKN ORLEN - 74.55%, Euronaft Trzebinia - 25.33%, minority shareholders - 0.12%.

     
CHANGE OF ENTITIES NAMES      

from Petrolot Sp. z o.o. to ORLEN Aviation Sp. z o.o.

19 May 2017 - 100%

*Date of transaction means the date of entry to the court register.

Changes in the Group structure are an element of the strategy, assuming a focus on core activities and allocating the resulting available capital for development of the Group in the most prospective areas.

STRUCTURED ENTITIES

ORLEN Capital AB

The company’s business is raising funds through the issuance of bonds and other financial instruments for institutional and private investors. ORLEN Capital AB specializes in granting borrowings or loans to Group companies and conduct any other activities related to the financial instruments. On 30 June 2014 and on 7 June 2016 ORLEN Capital AB issued Eurobonds with 7-year redemption of approximately of PLN 5,214 million translated using exchange rate as at 31 December 2017 (representing EUR 1,250 million).The funds obtained by ORLEN Capital through the issue were transferred to PKN ORLEN under the borrowing agreement. PKN ORLEN is the guarantor of the both issued bonds by an irrevocable and unconditional guarantees issued to the bondholders of PLN 8,759 million  translated using exchange rate as at 31 December 2017 (representing of EUR 2.1 billion). The guarantees were granted for the time of the Eurobonds issues, until 30 June 2021 and 7 June 2023, respectively.

ORLEN Finance AB

The company’s business is to conduct financial services within the ORLEN Group, including intercompany borrowings, as well as any other financial instruments. In the 2nd half of 2017, were commenced operations leading to the liquidation of the company.

ORLEN Insurance Ltd.

ORLEN Insurance is an internal insurance company (i.e. captive), which main purpose is insurance and reinsurance the Group's business, matching insurance to the individual needs of its property and the potential loss of margin.


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