Equity-accounted joint ventures

Your Pages	Notes
Test		Remove

14. Equity-accounted joint ventures

	Registered office	Description of business	The Group’s ownership interest		Carrying amount
			of shares		(PLN m)
			December 31st 2017	December 31st 2016	December 31st 2017	December 31st 2016
Downstream segment
LOTOS - Air BP Polska Sp. z o.o.		Sale of aviation fuel and logistics services	0.5	0.5	23.2	19.5
Upstream segment
Baltic Gas Sp. z o.o.		Oil and gas production (support activities for oil and gas production)	0.4999	0.4999	-	-
Baltic Gas spółka z ograniczoną odpowiedzialnością i wspólnicy sp.k. (1)		Crude oil and gas production	0.4478	0.449	83.3	78.6
UAB Minijos Nafta	Lithuania, Gargždai	Crude oil exploration and production	0.4999	0.4999	-	-
Total					106.5	98.1

(1) The ownership interests as at December 31st 2017 were determined based on the value of contributions made by individual partners relative to the sum of all contributions:
· Baltic Gas Sp. z o.o. (general partner) 0.001% (December 31st 2016: 0.001%),
· LOTOS Petrobaltic S.A. (limited partner) 44.786% (December 31st 2016: 44.908%),
· CalEnergy Resources Poland Sp. z o.o. (“CalEnergy”) (limited partner) 55.214% (December 31st 2016: 55.091%).
The Group’s indirect ownership interest in Baltic Gas spółka z ograniczoną odpowiedzialnością i wspólnicy sp. k. (jointly-controlled entity) is 44.78% (December 31st 2016: 44.90%).
In 2017, CalEnergy Resources Poland Sp. z o.o. and LOTOS Petrobaltic S.A. made the agreed cash contributions to Baltic Gas spółka z ograniczoną odpowiedzialnością i wspólnicy sp. k. of PLN 7,1m and PLN 5,4m, respectively, which changed the Group’s ownership interest in the company. The expenditure representing the cash contributions made by LOTOS Petrobaltic S.A. to these companies, was disclosed in the consolidated statement of cash flows under Cash contributions − equity-accounted joint ventures.

	The Group’s indirect ownership interest in
	2017	2016
Downstream segment
LOTOS-Air BP Polska Sp. z o.o.	3.7	3.3
Upstream segment
Baltic Gas spółka z ograniczoną odpowiedzialnością i wspólnicy sp.k. (1)	-0.5	-0.4
UAB Minijos Nafta	-	-
Total	3.2	2.9

(1) In the partnership agreement, the shares of each of the partners in the profit or loss of Baltic Gas Sp. z o.o. i wspólnicy sp.k. were defined as follows:
· Baltic Gas Sp. z o.o. holds a 0.001% share in profit and a 100% share in loss,
· LOTOS Petrobaltic S.A. holds a 50.9995% share in profit and
· CalEnergy holds a 48.9995% share in profit.
Accordingly, for IFRS purposes, Baltic Gas Sp. z o.o. i wspólnicy sp.k is an entity jointly controlled by the Group (equity-accounted joint venture under IFRS 11).

14.1 Condensed financial information on equity-accounted joint ventures
Statement of comprehensive income		LOTOS – Air BP Polska Sp. z o.o.		Baltic Gas Sp. z o.o. i wspólnicy sp.k.	UAB Minijos Nafta

		2017
Revenue		470.6		-	29.1
Cost of sales		-427.5		-0.6	-23.3
Gross profit/(loss)		43.1		-0.6	5.8
Distribution costs		-32.1		-	-0.7
Administrative expenses		-4.1		-0.4	-4
Net other income/(expenses)		-		-	-
Operating profit/(loss)		6.9		-1	1.1
Net finance income/(costs)		2.3		-	-0.8
Pre-tax profit/(loss)		9.2		-1	0.3
Income tax		-1.8		-	-
Net profit/(loss)		7.4		-1	0.3
Other comprehensive income/(loss), net		-		-	-
Total comprehensive income/(loss)		7.4		-1	0.3
Depreciation and amortisation		-1.2		-0.6	-5
Statement of comprehensive income		LOTOS – Air BP Polska Sp. z o.o.		Baltic Gas Sp. z o.o. i wspólnicy sp.k.	UAB Minijos Nafta

		2016
Revenue		240.3		-	28.7
Cost of sales		-206.8		-0.6	-25.2
Gross profit/(loss)		33.5		-0.6	3.5
Distribution costs		-20.5		-	-0.9
Administrative expenses		-4.3		-0.3	-4.8
Net other income/(expenses)		-		-	0.1
Operating profit/(loss)		8.7		-0.9	-2.1
Net finance income/(costs)		-0.4		-	-0.2
Pre-tax profit/(loss)		8.3		-0.9	-2.3
Income tax		-1.6		-	-
Net profit/(loss)		6.7		-0.9	-2.3
Other comprehensive income/(loss), net		-		-	-
Total comprehensive income/(loss)		6.7		-0.9	-2.3
Depreciation and amortisation		-0.9		-0.6	-6.9

Statement of financial position		LOTOS – Air BP Polska Sp. z o.o.		Baltic Gas Sp. z o.o.	UAB Minijos Nafta
				i wspólnicy sp.k.
	Note	December 31st 2017
Non-current assets		11.5		186.6	16.7
Current assets, including:		67.8		4.6	19.6
Cash and cash equivalents		19.4		3.2	10.6
Total assets		79.3		191.2	36.3
Non-current liabilities		4.5		-	14.3
Current liabilities		41.4		4.7	4.9
Total liabilities		45.9		4.7	19.2
Net assets		33.4		186.5	17.1
		0.5		*	0.4999
Share of net assets		16.7		83.3	8.5
Fair value measurement		6.7	-1	-	-8.5
Elimination of intercompany transactions		-0.2		-	-
Interest in joint ventures	14	23.2		83.3	-

Statement of financial position		LOTOS – Air BP Polska Sp. z o.o.		Baltic Gas Sp. z o.o.	UAB Minijos Nafta
				i wspólnicy sp.k.
	Note	December 31st 2016
Non-current assets		12.6		173.3	22.7
Current assets, including:		41.4		10.2	18
Cash and cash equivalents		16.2		8.7	10.1
Total assets		54		183.5	40.7
Non-current liabilities		5.5		-	16.6
Current liabilities		22.6		8.5	4.1
Total liabilities		28.1		8.5	20.7
Net assets		25.9		175	20
		0.5		*	0.4999
Share of net assets		13		78.6	10
Fair value measurement		6.7	-1	-	-10
Elimination of intercompany transactions		-0.2		-	-
Interest in joint ventures	14	19.5		78.6	-

* For IFRS purposes, Baltic Gas Sp. z o.o. i wspólnicy sp.k is an entity jointly controlled by the Group (equity-accounted joint venture under IFRS 1; see Note 14 above).

(1) PLN 6.7m in gain on fair value measurement of a retained interest in a previously controlled entity as at the date of loss of control.

Briefcase