Zespól Elektrowni Patnów Adamów Konin S A : Extended consolidated financial report fot the third quarter 2020

ZESPÓŁ ELEKTROWNI PĄTNÓW - ADAMÓW - KONIN SA CAPITAL GROUP

INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD OF 9 MONTHS ENDED 30 SEPTEMBER 2020

This is a translation of the document issued originally in Polish language.

The Polish original should be referred to in matters of interpretation.

25 November 2020

ZESPÓŁ ELEKTROWNI PĄTNÓW - ADAMÓW - KONIN SA CAPITAL GROUP

Interim condensed consolidated financial statements for the period of 9 months ended 30 September 2020

(in thousand PLN)

Table of contents

CONSOLIDATED PROFIT AND LOSS ACCOUNT ...........................................................................................	4
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME .................................................................	6
CONSOLIDATED STATEMENT OF FINANCIAL POSITION ..........................................................................	7
CONSOLIDATED STATEMENT OF CASH FLOWS..........................................................................................	9
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY .........................................................................	10
ADDITIONAL EXPLANATORY NOTES ..........................................................................................................	12
1.	General information ........................................................................................................................................	12
2.	Composition of the Group...............................................................................................................................	13
3.	Composition of the Management Board of the parent company.....................................................................	13
4.	Basis for development of the interim condensed consolidated financial statements.......................................	14
	4.1.	Going concern assumptions .................................................................................................................	14
5.	New standards and interpretations which were issued but are not effective yet .............................................	15
6.	Significant principles (policy) of accounting ..................................................................................................	15
7.	Significant values based on professional judgment and estimates ..................................................................	16
	7.1.	Impact of a COVID-19 disease pandemic on the Group's operations..................................................	16
	7.2.	Other significant values based on professional judgement and estimates............................................	16
8.	Changes of estimates.......................................................................................................................................	17
9.	Seasonality of the activities.............................................................................................................................	17
10.	Operating segments.........................................................................................................................................	17
11.	Revenues and costs .........................................................................................................................................	21
	11.1.	Sale revenues .......................................................................................................................................	21
	11.2.	Other operating revenues .....................................................................................................................	21
	11.3.	Other operating expenses.....................................................................................................................	22
	11.4.	Financial income..................................................................................................................................	22
	11.5.	Financial costs .....................................................................................................................................	22
	11.6.	Costs by type .......................................................................................................................................	23
12.	Income tax.......................................................................................................................................................	24
	12.1.	Tax load ...............................................................................................................................................	24
	12.2.	Deferred income tax ............................................................................................................................	24
13.	Profit per one share .........................................................................................................................................	25
14.	Tangible fixed assets.......................................................................................................................................	27
	14.1.	The value impairment test of assets of ZE PAK SA Capital Group ....................................................	29
15.	Assets under the right to use and liabilities under the lease ............................................................................	32
16.	Intangible assets ..............................................................................................................................................	34
17.	Assets for overburden removal and other mining assets .................................................................................	36
18.	Other assets .....................................................................................................................................................	36
	18.1.	Other financial assets ...........................................................................................................................	36
	18.2.	Other non-financial assets....................................................................................................................	37
19.	Inventories ......................................................................................................................................................	37
20.	Trade and other receivables ............................................................................................................................	38
21.	Cash and cash equivalents...............................................................................................................................	38
22.	Dividends paid and proposed for payment......................................................................................................	39
23.	Interest-bearing loans and borrowings ............................................................................................................	39
24.	Provisions and accruals ...................................................................................................................................	39
	24.1.	Accruals ...............................................................................................................................................	39
	24.2.	Change in provisions ...........................................................................................................................	40
	24.3.	Description of significant titles of provisions ......................................................................................	41
	24.3.1. The provision for liabilities due to the emission of greenhouse gases (EUA) ..............................	41
	24.3.2. Provision for reclamation of ash storage yards and costs of liquidation of fixed assets ...............	42

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ZESPÓŁ ELEKTROWNI PĄTNÓW - ADAMÓW - KONIN SA CAPITAL GROUP

Interim condensed consolidated financial statements for the period of 9 months ended 30 September 2020

(in thousand PLN)

	24.3.3. Reclamation provisions and other provisions related to mining activities ....................................	42
	24.3.4. Provision for redemption of Energy certificates ...........................................................................	42
	24.3.5. Other provisions............................................................................................................................	42
25.	Trade liabilities, other liabilities and accruals.................................................................................................	43
	25.1.	Trade liabilities and other financial liabilities (short-term) .................................................................	43
	25.2.	Other financial liabilities .....................................................................................................................	43
	25.3.	Grants and deferred income (long-term)..............................................................................................	44
	25.4.	Grants and deferred income (short-term).............................................................................................	44
26.	Contingent liabilities and description of significant judicial cases .................................................................	44
	26.1.	Court proceedings ................................................................................................................................	44
	26.2.	Contingent liabilities related to the decommissioning of the power plant ...........................................	45
27.	Liability repayment securities .........................................................................................................................	45
28.	Received guarantees and sureties....................................................................................................................	46
29.	Information about related entities ...................................................................................................................	47
	29.1.	Loan granted to a member of the Management Board.........................................................................	47
	29.2.	Other transactions involving members of the Management Board ......................................................	47
	29.3.	Remuneration of Chief executive Staff of the Group ..........................................................................	48
	29.3.1. Remuneration paid or payable to the members of the Management Board and to the members of the
		Supervisory Council of the Group ................................................................................................	48
29.3.2.	Remuneration paid or entitled to other members of the main management ........................................	48
30.	Goals and rules of financial risk management ................................................................................................	48
	30.1.	Interest rate risk ...................................................................................................................................	49
	30.2.	Currency risk .......................................................................................................................................	52
	30.3.	Credit risk ............................................................................................................................................	54
	30.4.	Liquidity risk .......................................................................................................................................	55
31.	Financial instruments ......................................................................................................................................	57
	31.1.	Balance sheet value and fair value of particular classes of financial instruments................................	57
	31.2.	Interest rate risk ...................................................................................................................................	58
	31.2.1. Hedging.........................................................................................................................................	58
32.	Capital management........................................................................................................................................	59
33.	Significant events after the balance sheet date ................................................................................................	60

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ZESPÓŁ ELEKTROWNI PĄTNÓW - ADAMÓW - KONIN SA CAPITAL GROUP

Interim condensed consolidated financial statements for the period of 9 months ended 30 September 2020

(in thousand PLN)

CONSOLIDATED PROFIT AND LOSS ACCOUNT

For a period of 9 months ended 30 September 2020

Continuing operations

Revenues, including:

Revenues from the contracts with clients

Other revenues Costs of goods sold

Impairment write down on fixed assets and mining assets

Gross profit / (loss)

Other operating revenues

Selling and distribution expenses Administrative expenses

Other operating expenses

Gross profit / (loss) from operations

Financial income

Financial costs

Profit / (loss) before tax

Income tax expense (taxation)

Net profit / (loss) for the period from continuing operations

Net profit / (loss) for the period

Net profit/ (loss) attributable to equity holders of the parent

Net profit/ (loss) attributable to non- controlling interests

	A period of 9		A period of 9		A period of 9		A period of 9
	months ended		months ended		months ended		months ended
	30 September		30 September 2020		30 September 2019		30 September 2019
Note	2020 (unaudited)		(unaudited)		(unaudited)		(unaudited)
	0	0	0	0
11.1	1 605 194	554 733	2 157 170	751 140
	1 423 703	496 890	2 028 892	709 807
	181 491	57 843	128 278	41 333
11.6	(1 824 763)	(519 210)	(1 951 059)	(662 564)
	286 599	(2 401)	(286)	(2)
	(219 569)	35 523	206 111	88 576
11.2	63 130	27 157	13 205	127
11.6	(2 668)	(661)	(3 397)	(714)
11.6	(83 540)	(31 810)	(81 002)	(25 749)
11.3	(37 833)	(2 084)	(6 872)	(539)
	(280 480)	28 125	128 045	61 701
11.4	6 750	1 068	13 163	5 105
11.5	(14 645)	(3 105)	(20 479)	(7 449)
	(288 375)	26 088	120 729	59 357
12	37 602	(16 029)	(48 990)	(24 315)
	(250 773)	10 059	71 739	35 042
	(250 773)	10 059	71 739	35 042
	(247 428)	10 086	72 591	34 680
	(3 345)	(27)	(852)	362

Rules (policies) of accountancy and additional explanatory notes to the consolidated financial statement are its integral part.

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