1.1. PRINCIPAL ACTIVITY OF THE ORLEN Group
Polski Koncern Naftowy ORLEN Spółka Akcyjna seated in Płock, 7 Chemików Street (“Company”, “PKN ORLEN”, “Issuer”, “Parent Company”) was founded by incorporation of Petrochemia Płock S.A. with Centrala Produktów Naftowych S.A., on 7 September 1999.
PKN ORLEN along with the entities forming the Capital Group of Polski Koncern Naftowy ORLEN S.A. (“ORLEN Group”, “ORLEN Capital Group”, “Group”, “Capital Group”) is one of the biggest and most modern fuel and power companies in Central Europe, operating on the Polish, Lithuanian, Czech and German market. The Group also possesses entities located in Malta, Sweden, the Netherlands, Slovakia, Hungary, Estonia, Latvia, USA and Canada.
The core business of the ORLEN Group is crude oil processing, production of fuel, petrochemical and chemical goods, as well as, retail and wholesale of fuel products. The ORLEN Group conducts also exploration, recognition and extraction of hydrocarbons, and generates, distributes and trades of electricity and heat.
The activity of the ORLEN Group companies is also service-related activity: storage of crude oil and fuels, road and rail transport, maintenance and overhaul services, laboratory, security, design, administrative, insurance and financial services.
PKN ORLEN shares are quoted on the main market of the Warsaw Stock Exchange (WSE) in the continuous trading system. The first quotation of the shares were held on 26 November 1999.
One of the subsidiaries of PKN ORLEN – Unipetrol a.s. is also present on the capital market. The shares are listed on the Stock Exchange in Prague. Additional information is presented in note 9.1.
1.2. PRINCIPLES OF PREPARATION OF FINANCIAL STATEMENTS
The consolidated financial statements have been prepared in accordance with accounting principles contained in the International Financial Reporting Standards (IFRS), comprising International Accounting Standards (IAS) as well as Interpretations of Standing Interpretation Committee (SIC) and the International Financial Reporting Standards Interpretations Committee (IFRIC), which were adopted by the European Union (EU) and entered in force till the end 2015. The consolidated financial statements have been prepared on a historical cost basis, except derivative financial instruments, financial assets available for sale and investment properties, which have been measured at fair value. The foregoing financial statements have been prepared using the accrual basis of accounting except from the consolidated financial statement of cash flows.
The scope of consolidated financial statements is compliant with Minister of Finance Regulation of 19 February 2009 on current and periodic information provided by issuers of securities and conditions for recognition as equivalent information required by the law of a non-Member state (uniform text Official Journal 2014, item 133) and covers the annual period from 1 January to 31 December 2015 and the comparative period from 1 January to 31 December 2014.
Presented consolidated financial statements present a true and fair view of the ORLEN Group’s financial position as at 31 December 2015, results of its operations and cash flows for the year ended 31 December 2015.
The consolidated financial statements have been prepared assuming that the ORLEN Group will continue to operate as a going concern in the foreseeable future. As at the date of approval of these consolidated financial statements, there is no evidence indicating that the ORLEN Group will not be able to continue its operations as a going concern. Duration of the Parent Company and the entities comprising the ORLEN Group is unlimited.
The foregoing consolidated financial statements have been prepared with earlier taking into consideration changes in IAS1 standard - Presentation of Financial Statements: Disclosure initiative. Key elements of the modification of the scope and format of disclosures related to:
- issues of significance - immaterial disclosures have not been presented even if they were part of the requirement of the standard;
- aggregation / disaggregation of selected items in order to increase transparency and usefulness;
- accounting principles – presented those principles, which have a significant impact on the presentation of results of operations and the situation of the Group.
Other changes to IFRS applied by the Group in accordance with their effective date as of 1 January 2015 to 31 December 2015, had no material impact on these consolidated financial statements.