II. Economic and Financial Position of the Capital Group
Presented below are the main items from the consolidated income statement as well as financial ratios describing the financial performance of the Capital Group and its economic and financial position compared to the prior years.
Main items from the income statement (PLN ‘000) |
2011 | 2010 | 2009 |
---|---|---|---|
Sales revenue | 23,003,534 | 21,281,161 | 19,331,527 |
Operating expenses | 21,318,008 | 18,394,472 | 17,956,668 |
Financial revenue | 135,695 | 80,515 | 203,315 |
Financial expenses | 151,997 | 30,410 | 94,626 |
Share in profits/(losses) of entities measured using the equity method | 42,563 | (695) | (359) |
Income tax | 85,603 | 478,915 | 246,303 |
Net profit (loss) | 1,626,184 | 2,457,184 | 1,236,886 |
Total comprehensive income | 1,690,190 | 2,537,359 | 1,250,607 |
Profitability ratios | |||
– gross profit margin | 7% | 14% | 7% |
– net profit margin | 7% | 12% | 6% |
– net return on equity | 7% | 12% | 6% |
Effectiveness ratios | |||
– assets turnover ratio | 0.61 | 0.63 | 0.62 |
– receivables turnover in days | 47 | 54 | 61 |
– liabilities turnover in days | 20 | 20 | 24 |
– inventory turnover in days | 27 | 23 | 30 |
Liquidity/Net working capital | |||
– debt ratio | 35% | 30% | 31% |
– equity to fixed assets ratio | 65% | 70% | 69% |
– net working capital (PLN ‘000) | (317.192) | 1,059.935 | 518.083 |
– current ratio | 0.96 | 1.21 | 1.09 |
– quick ratio | 0.69 | 1.00 | 0.87 |
An analysis of the above figures and ratios indicated the following trends in 2011:
- a decrease of profitability ratios,
- decrease of receivables turnover in days,
- an increase of inventory turnover in days,
- a decrease of current ratio and quick ratio.
III. Detailed Information
1. Information about the audited consolidated financial statements
The audited consolidated financial statements were prepared as of 31 December 2011 and include:
- consolidated statement of financial position prepared as of 31 December 2011, with total assets and liabilities plus equity of PLN 37,964,374 thousand,
- consolidated income statement for the period from 1 January 2011 to 31 December 2011, with a net profit of PLN 1,626,184 thousand,
- consolidated statement of comprehensive income for the period from 1 January 2011 to 31 December 2011, with a total comprehensive income of PLN 1,690,190 thousand,
- consolidated statement of changes in equity for the period from 1 January 2011 to 31 December 2011, disclosing an increase in equity of PLN 977,190 thousand,
- consolidated statement of cash flows for the period from 1 January 2011 to 31 December 2011, showing a cash inflow of PLN 130,885 thousand,
- notes, comprising a summary of significant accounting policies and other explanatory information.
The structure of assets and liabilities plus equity as well as items affecting the financial profit or loss has been presented in the consolidated financial statements.
The audit covered the period from 1 January 2011 to 31 December 2011 and focused mainly on:
- verification of the correctness and fairness of the consolidated financial statements prepared by the Management Board of the Parent Company,
- verification of the consolidation documentation,
- evaluation of the correctness of the consolidation methods and procedures applied during consolidation,
- review of opinions and reports on audits of financial statements of subsidiaries and associated companies included in consolidation, prepared by other certified auditors.
2. Consolidation documentation
The Parent Company presented the consolidation documentation including:
- financial statements of entities, included in the consolidated financial statements,
- financial statements of controlled entities, adjusted to the accounting principles (policy) applied during consolidation,
- financial statements of controlled entities translated into the Polish currency,
- all consolidation adjustments and eliminations necessary for preparation of the consolidated financial statements,
- calculation of the fair value of the net assets of controlled entities,
- calculation of goodwill and negative goodwill as well as their write-downs, also due to impairment,
- calculation of minority interest,
- calculation of exchange differences arising from translation of the financial statements of controlled entities denominated in foreign currencies.
Basis for the preparation of the consolidated financial statements
The consolidated financial statements of the Capital Group for the 2011 financial year have been prepared in accordance with the International Financial Reporting Standards.
Entities in the Capital Group
The scope and method of consolidation as well as the relationship between entities in the capital group have been determined based on the criteria specified in the International Financial Reporting Standards.
Financial period
The consolidated financial statements have been prepared as of the same balance sheet date and for the same financial year as the financial statements of the Parent Company – Polskie Górnictwo Naftowe i Gazownictwo SA. Subsidiaries and associated companies included in consolidation prepared their financial statements as of the same balance sheet date as the Parent Company. The financial year of all subsidiaries and associated companies included in consolidation ended on 31 December 2011.
Consolidation method
The financial statements of the subsidiaries were consolidated using the full method, i.e. full amounts of all relevant items of the financial statements of the Parent Company and the subsidiaries included in consolidation were summed up.
Once the values had been summed up, consolidation adjustments and eliminations were applied to:
- the cost of shares held by the Parent Company in subsidiaries and the part of net assets of subsidiaries corresponding to the interest of the Parent Company in these companies,
- mutual receivables and liabilities of entities included in consolidation,
- material revenue and expenses related to transactions between entities included in consolidation.
The equity method was applied with respect to associated entities. The value of the Parent Company’s interest in the associated company was adjusted by increases or decreases in the equity of the associated company attributable to the Parent Company, which occurred in the period covered by consolidation, and decreased by dividends due from such companies.
3. Completeness and correctness of drawing up notes and explanations and the report on the activities of the Capital Group
The Parent Company confirmed the validity of the going concern basis in preparation of the consolidated financial statements. The notes to the consolidated financial statements give a correct and complete description of measurement principles regarding assets, liabilities, profit or loss and principles of preparation of the consolidated financial statements.
The Parent Company prepared notes in the form of tables to individual items of the consolidated statement of financial position and statement of comprehensive income as well as narrative descriptions, in line with the requirement of the International Financial Reporting Standards.
Notes describing property, plant and equipment, intangible assets, investments, liabilities and provisions correctly present increases and decreases as well as their basis during the financial year.
Limitations imposed on individual assets disclosed in the consolidated statement of financial position arising from security granted to creditors have been described.
Individual assets and liabilities as well as revenue and expenses have been correctly presented by the Parent Company in the consolidated financial statements. The consolidated statement of financial position, consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows as well as notes which constitute an integral part of the financial statements include all items required for disclosure in the consolidated financial statements under the International Financial Reporting Standards.
The Management Board prepared and supplemented the consolidated financial statements with a report on the activities of the Capital Group in the 2011 financial year. The report contains all information required under Article 49.2 of the Accounting Act and the Ordinance of the Minister of Finance Ordinance of 19 February 2009 on current and periodic information published by issuers of securities and the rules of equal treatment of the information required by the laws of non-member states. We have audited the report with respect to the disclosed information derived directly from the audited consolidated financial statements.
IV. Closing Comments
Management Board’s Representation
Deloitte Audyt Sp. z o.o. and the key certified auditor received a representation letter from the Parent Company’s Management Board, in which the Board stated that the Capital Group complied with the laws in force.
The above audit opinion together with audit report is a translation from the original Polish version. In case of any discrepancies between the Polish and English version, the Polish version shall prevail.
Piotr Sokołowski | ||
Key certified auditor | ||
conducting the audit | ||
No. 9752 | ||
Piotr Sokołowski | Radosław Kuboszek | Deloitte Audyt |
Deputy Chairman of the Management Board | Deputy Chairman of the Management Board | Sp. z o.o. al. Jana Pawła II 19 |
Certified auditor | Certified auditor | 00‑854 Warsaw |
No. 9752 | No. 90029 | |
represented by | entity authorized to audit financial statements entered under number 73 on the list kept by the National Council of Statutory Auditors | |
Warsaw, 1 March 2012 |
Consolidated Financial Statements for the 2011 Financial Year
- Auditor's Opinion
- Report on the Audit of the Consolidated Financial Statements of the PGNiG SA Capital Group for the 2011 Financial Year
- Financial Highlights
- Consolidated Income Statement
- Consolidated Statement of Comprehensive Income
- Consolidated Statement of Financial Position
- Consolidated Statement of Cash Flows
- Consolidated Statement of Changes in Equity
- Operating Segments