25. Provisions | PKN Orlen Integrated Annual Report 2014

	Non-current		Current		Total
	31/12/2014	31/12/2013 (restated data)	31/12/2014	31/12/2013 (restated data)	31/12/2014	31/12/2013 (restated data)
Environmental	414	346	37	36	451	382
Jubilee bonuses and post-employment benefits	251	262	33	42	284	304
Shield programs	-	-	38	43	38	43
CO₂ emissions	-	-	334	320	334	320
Other	44	50	206	380	250	430
	709	658	648	821	1 357	1 479

note_25_eng_tab_1.xlsx

Change in provisions in 2014

	Environmental provision	Jubilee bonuses and post-employment benefits provision	Shield programs provisions	Provision for CO₂ emissions	Other provisions	Total
	Environmental provision	Jubilee bonuses and post-employment benefits provision	Shield programs provisions	Provision for CO₂ emissions	Other provisions	Total
01/01/2014	382	304	43	320	430	1 479
Recognition	79	7	21	333	136	576
Acquisition of subsidiary	18	-	-	3	-	21
Usage	(29)	(28)	(23)	(319)	(247)	(646)
Reversal	(7)	-	(3)	(9)	(70)	(89)
Foreign exchange differences	8	1	-	6	1	16
	451	284	38	334	250	1 357

note_25_eng_tab_2.xlsx

Change in provisions in 2013

(restated data)	Environmental provision	Jubilee bonuses and post-employment benefits provision	Shield programs provisions	Provision for CO₂ emissions	Other provisions	Total
(restated data)	Environmental provision	Jubilee bonuses and post-employment benefits provision	Shield programs provisions	Provision for CO₂ emissions	Other provisions	Total
01/01/2013	374	313	42	378	355	1 462
Recognition	13	27	15	307	302	664
Acquisition of subsidiary	39	-	-	-	1	40
Usage	(34)	(36)	(8)	(357)	(160)	(595)
Reversal	(5)	-	(6)	(2)	(68)	(81)
Foreign exchange differences	(5)	-	-	(6)	-	(11)
	382	304	43	320	430	1 479

note_25_eng_tab_3.xlsx

25.1. Environmental provision

The Group has legal obligation to clean contaminated land – water environment in the area of production plants, fuel stations, fuel terminals and warehouses.
The Management Board estimated the provision for environmental risks regarding the removal of contaminants based on analyzes provided by independent experts or based on own analysis. The amount of the provision is the best estimate of future expenses based on the average level of costs incurred for the reclamation in relation to individual objects.
As the Czech Republic is concerned, the Government of the Czech Republic is responsible for liabilities arising from contamination of land-water environment before date of entity’s privatization (so called Old Ecological Burdens). In case of new contamination that arose after date of the entity’s privatization the Group is responsible for those liabilities.
In 2014, the value of environmental provisions has increased mainly due to the „frequency” of the remediation processes occurrence and higher unit costs of cleaning in the fuel stations segment. Should 2013 assumptions were used, the environmental provision would have been lower by PLN (52) million.
Additional information regarding estimation of provision for environmental risk is presented in note ‎3.4.21.1.

25.2. Provision for jubilee bonuses and post-employment benefits

25.2.1. Change in employee benefits obligations

	NOTE	Provision for jubilee bonuses	Post-employment benefits	Total
01/01/2014		161	143	304
Current service costs		7	5	12
Interest expenses		7	6	13
Actuarial gains and losses arising from changes in		30	20	50
demographic assumptions		1	1	2
financial assumptions		23	19	42
other		6	-	6
Past employment costs		(7)	(23)	(30)
Change in share structure		(1)	1	-
Payments under program		(25)	(6)	(31)
Other		(9)	(25)	(34)
	25	163	121	284

note_25.2.1_eng.xlsx

	NOTE	Provision for jubilee bonuses	Post-employment benefits (restated data)	Total
01/01/2013		179	134	313
Current service costs		8	4	12
Interest expenses		7	5	12
Actuarial gains and losses arising from changes in		(8)	(4)	(12)
demographic assumptions		1	11	12
financial assumptions		(6)	(15)	(21)
other		(3)	-	(3)
Past employment costs		(3)	4	1
Payments under program		(23)	(10)	(33)
Other		1	10	11
	25	161	143	304

note_25.2.1._eng_tab_2.xlsx

The carrying amount of employee benefits liabilities is identical to their present value as at 31 December 2014 and 31 December 2013.

25.2.2. Employee benefits liabilities divided into active and retired employees

	Active employees		Pensioners		Total
	31/12/2014	31/12/2013	31/12/2014	31/12/2013 (restated data)	31/12/2014	31/12/2013 (restated data)
Poland	226	215	37	42	263	257
Czech Republic	13	10	-	-	13	10
Lithuania, Latvia, Estonia	8	37	-	-	8	37
	247	262	37	42	284	304

note_25.2.2_eng.xlsx

25.2.3. Employee benefits liabilities divided into geographical

	Provision for jubilee bonuses		Post-employment benefits		Total
	31/12/2014	31/12/2013	31/12/2014	31/12/2013 (restated data)	31/12/2014	31/12/2013 (restated data)
Poland	161	151	102	106	263	257
Czech Republic	2	2	11	8	13	10
Lithuania, Latvia, Estonia	-	8	8	29	8	37
	163	161	121	143	284	304

note_25.2.3._eng.xlsx

25.2.4. Sensitivity analysis to changes in actuarial assumptions

The Group analysed the impact of the financial and demographic assumptions and calculated that the change of remuneration ratio by +/- 1.0 percentage points, the discount rate by +/- 0.5 percentage points and the rate of turnover by +/- 0.5 percentage point is no higher than PLN 6 million. Therefore, the Group does not present any detailed information.
As at 31 December 2014, the Group used the following actuarial assumptions that had an impact on the level of actuarial provisions for the Polish entities: discount rate 2.6%, expected inflation 2.5%, the remuneration increase rate: 0% in years 2015-2017 and 2.5% in subsequent years. In the Group's foreign entities the main impact had: discount rate: from 0.62% to 1.84% and termination of collective agreement in AB ORLEN Lietuva in 2014 resulted in provision reversal.
The Group carries out the employee benefit payments from current resources. As at 31 December 2014 there were no funded plans and the Group paid no contributions to fund liabilities.

25.2.5. Employee benefits maturity and payments of liabilities analysis

25.2.5.1. Maturity of employee benefits analysis

	Provision for jubilee bonuses		Post-employment benefits		Total
	31/12/2014	31/12/2013	31/12/2014	31/12/2013 (restated data)	31/12/2014	31/12/2013 (restated data)
up to 1 year	15	21	18	21	33	42
from 1 to 5 years	49	51	15	26	64	77
above 5 years	99	89	88	96	187	185
	163	161	121	143	284	304

note_25.2.5.1._eng.xlsx

25.2.5.2. The weighted average duration of liabilities for post-employment benefits (in years)

	31/12/2014	31/12/2013 (restated data)
Poland	10	10
Czech Republic	10	9
Lithuania, Latvia, Estonia	11	11

31/12/2014

31/12/2013

(restated data)

Poland

Czech Republic

Lithuania, Latvia, Estonia

note_25.2.5.2._eng.xlsx

25.2.5.3. Ageing of employee benefits payments analysis

	Provision for jubilee bonuses		Post-employment benefits		Total
	31/12/2014	31/12/2013 (restated data)	31/12/2014	31/12/2014	31/12/2014	31/12/2013 (restated data)
up to 1 year	15	22	18	22	33	44
from 1 to 5 years	66	71	17	31	83	102
above 5 years	406	431	594	896	1 000	1 327
	487	524	629	949	1 116	1 473

note_25.2.5.3_eng.xlsx

25.2.6. Total employee benefits expenses recognized in the statement of profit or loss and other comprehensive income

The total employee benefit expenses for 2014 and 2013 amounted to PLN (11) million and PLN (24) million, respectively and are recognized: in profit or loss statement of PLN 9 million and PLN (28) million, respectively and in other comprehensive income of PLN (20) million and PLN 4 million, respectively.
Provisions for employee benefits recognized in profit or loss accounted as follows:

	2014	2013
Cost of sales	(3)	(5)
Administrative expenses	14	(21)
Distribution expenses	(2)	(2)
	9	(28)

note_25.2.6._eng.xlsx

In 2014 the amount of provision for employee benefits changed as the result of update of assumptions, mainly in relation to discount rate, projected inflation and expected remuneration increase ratio. Should the 2013 assumptions be used, the provision for the employee benefits would be lower by PLN (40) million.
Additional information regarding the payment of jubilee bonuses and post-employment benefits is presented in note 3.4.21.2.

25.3. Shield programs provision

Employee shield programs were launched to support the restructuring processes conducted in the Group. Depending on particular situation the programs provide i.e. additional severances, training packages for employees with whom the employment agreement was or would be dissolved and relocation packages for the employees, who agreed to change the workplace.
In 2014 the assumptions used in calculation of shield programs provision did not change in comparison to those used in prior year.

25.4. Provision for CO₂ emissions

The Group recognizes provision for estimated CO₂ emissions in the reporting period. The cost of recognized provision is compensated with settlement of deferred income on CO₂ emission rights granted free of charge. The description of the accounting principles applied is presented in note 3.4.21.4.

25.5. Other provisions

As at 31 December 2014 and as at 31 December 2013 other provisions comprise mainly: provisions for tax liabilities of previous years of PLN 28 million and PLN 216 million, respectively and provisions for the risk of unfavorable decisions of pending administrative or court proceedings of PLN 145 million and PLN 116 million, respectively.