1. The financial statement of profit or loss and other comprehensive income

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1 4FUN MEDIA S.A. 1. The financial statement of profit or loss and other comprehensive income Note Continuing operations Revenues from sales ,351, ,981, Cost of sales 3 18,705, ,553, Gross sales profit (loss) 5,645, ,427, Costs of sales 3 1,561, ,641, General management costs 3 2,261, ,661, Other operating revenues 4 33, , Other operating costs 5 229, , Operating profit (loss) 1,627, ,083, Net revenues (costs) 6 367, , Pre-tax profit (loss) 1,994, ,706, Income tax 7 176, , Net profit (loss) 1,818, ,037, Profit (loss) per one share Basic Diluted Statement of comprehensive income Comprehensive income per: 1,818, ,037, Other comprehensive income Total comprehensive income 1,818, ,037,

2 4FUN MEDIA S.A. 2. The statement of financial position Note Fixed assets Tangible fixed assets 9 720, , Other intangible assets 11 4,637, ,468, Expenditures on intangible and fixed assets 206, , Investments in related undertakings 10 22,006, ,715, Deferred tax assets , , ,979, ,001, Current assets Trade receivables 12 7,485, ,823, Other receivables , ,577, Loans granted , , Accruals , , Cash and cash equivalents 15 9, , ,937, ,095, Total assets 36,916, ,097,

3 4FUN MEDIA S.A. Note Equity Share capital 16 4,119, ,063, Own shares , , Other capital 27,005, ,973, Retained earnings 1,818, ,210, ,077, ,960, Long-term liabilities Deferred tax liabilities , , Other long-term liabilities ,418, , ,403, Short-term liabilities Trade liabilities 3,262, ,843, Payroll liabilities , Short-term loans and credits 98, Other liabilities 27, , Other short-term provisions 752, , ,140, ,733, Total liabilities 36,916, ,097,

4 4FUN MEDIA S.A. 3. The cash flow statement Cash flow from operating activities Net profit 1,818, ,037, Corrections: -824, ,750, Income tax 176, , Depreciation 2,245, ,163, Interest costs/revenues -27, , Profit/loss from the sale and disposal of fixed and intangible assets 196, , Dividends -300, , Purchase/sale of shares , Change in the balance of trade receivables and other receivables -3,528, , Change in the balance of trade liabilities and other liabilities 365, ,060, Change in the balance of accruals and short-term provisions -196, , Other corrections 243, Cash inflow from operating activities 993, ,287, Paid/returned income tax , Net cash inflow from operating activities 993, ,876, Cash flow from investing activities Inflow from the sale of fixed assets 32, Loans granted -310, , Shares purchase -1,426, , Expenditures on fixed assets purchase -624, ,344, Inflow from disposal of shares , Repayment of granted loans , Interest received , Dividends received 300, , Net cash inflow from investing activities -2,028, ,452, Cash flow from financial activities Interests -4, , Profit obtained from the issuing of shares minus issuance costs 55, Change in the balance of credits on current account 98, Net cash inflow from financial activities 150, ,

5 4FUN MEDIA S.A. Net change in cash and cash equivalents -884, , Opening balance of cash and cash equivalents 893, ,488, Balance sheet change in cash -884, , Closing balance of cash and cash equivalents 9, ,

6 4FUN MEDIA S.A. 4. The statement of changes in equity Share capital Own shares Other equity Retained profit Total equity Equity as at 4,063, , ,973, ,210, ,960, Issue of shares 55, , , Net profit distribution ,210, ,210, Payment of dividend Sum of total income ,818, ,818, Equity as at ,119, , ,005, ,818, ,077, Equity as at 4,063, , ,973, ,248, ,922, Net profit distribution Payment of dividend Sum of total income ,037, ,037, Equity as at ,063, , ,973, ,210, ,960,

7 1. Additional information and explanations to the financial statements 4 FUN MEDIA S.A. 1. Business segments The Company is engaged in one type of operating activity: television broadcasting and production 2. Sales revenues The structure of sales revenues by item is as follows: 1. Net revenues on sales of products Net revenues on the sales of services 24,351, ,981, Advertising 21,724, ,153, Interactive services 79, , Other 2,546, , Revenues on the sales of goods Revenues on the sales of materials Net sales revenues. total 24,351, ,981, The structure of sales revenues by territory is as follows: 1. Net revenues on sales of products Net revenues on the sales of services 24,351, ,981, Domestic 24,351, ,963, EU , Net sales revenues. total 24,351, ,981,

8 3. Costs by type Depreciation 2,245, ,163, Materials and energy 170, , Contracted services 15,108, ,543, Taxes and fees 960, , Salaries 1,486, , Employees benefits 66, , Representation and advertising 2,190, ,070, Other costs 299, , Total costs by type 22,528, ,856, Change in the balance of products Classification of expenses by functions 22,528, ,856, including: Cost of sales 18,705, ,553, Costs of sales 1,561, ,641, General management costs 2,261, ,661, Other operating revenues Profit on the sale of non-financial fixed assets 32, Write-off of overdue receivables , Other revenues Other operating revenues, total 33, , Other operating costs Liquidation of non-financial fixed assets , Write-offs of non-financial fixed assets 229, Write-offs of receivables , Other costs , Other operating costs, total 229, ,

9 6. Financial income and expenses Dividends 300, , Bank credits, interests and fees 2, Other interest 100, , Other financial income , Total financial income 402, , Bank credits, interests and fees 33, , Other interest , Exchange rate losses 1, , Other costs , Total financial costs 34, , Net financial income (expenses) 367, , The dividend received is the dividend paid out by the Program Sp. z o.o subsidiary company. 7. Income tax 7.1 Income tax reported in the statement of total income Current tax Deferred tax 176, , TOTAL 176, , The current part of income tax was determined according to tax rate at 19% for the taxable basis. 9

10 7.2 Effective tax rate Gross financial result 1,994, ,706, Tax at 19% tax rate 378, , Net costs/revenues which do not constitute taxable costs/revenues -202, , Income tax 176, , Effective tax rate 9% 18% 7.3 Deferred income tax assets Tax losses for settlement 1,398, ,990, Provisions and unpaid liabilities 752, ,559, Unpaid salaries , Other differences Total negative temporary differences 2,151, ,589, Tax rate 19% 19% Deferred income tax assets. total 408, , Deferred income tax liabilities The difference between the tax value and carrying value of intangible assets and fixed assets 3,615, ,726, Uninvoiced income , Interest accrued 58, , Appraisal of liabilities ,910, Other differences Total positive temporary differences 3,674, ,185, Tax rate 19% 19% Deferred income tax liabilities, total 698, ,

11 7.5 The settlement of main items with tax bases not corresponding to gross financial result 1. Gross profit 1,994, ,706, Costs not deductible for tax purposes. including 1,094, ,719, provision for costs 752, , unpaid salaries , write-offs 229, , representation expenses 44, , unpaid liabilities 30 days past due , other 68, , Increase in tax expenditure 2,716, ,247, remuneration paid due to civil-law contracts referring to previous years 39, , value of liquidation of fixed assets , differences between balance-sheet depreciation and tax depreciation 1,117, ,759, provisions at the beginning of the period 808, , paid liabilities 30 days past due from the previous periods 750, , Non-taxable income 399, , Dividends from affiliates 300, , accrued interest 99, , accrued exchange rates other , Increase in tax revenue 1,619, , accrued interest revenue in the previous years 489, , Income tax on payment of debt 1,036, other 92, Income/(Loss) 1,591, , Income deduction 1,591, , accounting for the loss from previous years 1,591, , Tax base Tax rate 19% 19% 10. Total income tax due Change in the balance of assets due to deferred tax -463, , Change in the balance of liabilities due to deferred tax -287, , Total deferred tax 176, , Total income tax 176, ,

12 8. Earnings per share and distribution of the financial result 4 FUN MEDIA S.A. Earnings per share The basic earnings per share is calculated as the quotient of earnings attributable to shareholders of 4fun Media S.A.. and the weighted average of ordinary shares during the year. excluding ordinary shares acquired by the Company and shown as equity. The company does not have any potential ordinary shares. therefore diluted earnings per share is equal to basic earnings per share. Weighted average number of ordinary shares 1,818, ,037, Basic earnings per share (in PLN per 1 share) 4, , Weighted average number of ordinary shares Distribution of the financial result On June the Ordinary General Meeting of Shareholders of 4fun Media S.A. decided to allocate net profit for in the amount of PLN for coverage of losses for the previous years. The Management Board of 4fun Media S.A. so far has not made a decision on the distribution of profit earned by the Company in Tangible fixed assets Means of transport 26, Devices 404, , Equipment and other fixed assets 288, , Total tangible fixed assets 720, ,

13 Buildings and structures Means of transport Devices Equipment and other fixed assets TOTAL Gross value as at , ,937, , ,678, Increases , , , , Decreases , , Gross value as at , ,104, , ,926, Depreciation as at , ,467, , ,018, Increases , , , , Decreases , , Depreciation as at , ,699, , ,206, Write-offs as at Write-offs as at Net value as at , , , Net value as at , , , , Gross value as at , , ,426, , ,265, Increases , , , Decreases 68, , , , Gross value as at , ,937, , ,678, Depreciation as at , , ,908, , ,456, Increases , , , , Decreases 50, , , , Depreciation as at , ,467, , ,018, Write-offs as at Write-offs as at Net value as at , , , , Net value as at , , ,

14 10. Investments in subordinated entities The investments in subordinated entities refers to the value of shares purchased in the companies: Program Sp. z o.o.. Screen Network S.A. as well as 4fun.TV Sp. z o.o. As at balance sheet date - December test of permanent impairment of share value was conducted with respect to the shares in the companies Program Sp. z o.o. and Screen Network S.A. The test. based on estimated future discounted cash flows. did not demonstrate a permanent impairment of share value. The forecast financial results of these companies for 2017 and subsequent years are achievable. in the Management Board opinion. and the Company intends to hold the shares over the period assumed in the valuation model. The Management Board believes that the investment policy will bring the expected benefits to the Company. Name of subsidiary entity or directly related undertaking Registered address Percentage of shares held Percentage of votes controlled Value of shares at acquisition price (PLN) Program Sp. z o.o. Warszawa ul. Bobrowiecka 1A 100% 100% 9,351, Screen Network S.A. Warszawa ul. Bobrowiecka 1A 79.65% 79.65% 12,646, fun TV Sp. z o.o. Warszawa ul. Bobrowiecka 1A 100% 100% 8, In 2016, following an allotment of E- and F- series shares in the company Screen Network S.A., 4fun Media S.A.'s shareholding in the former company increased from 72.25% to 79.65%. Details of the transaction are to be found in Item 3.2 of the Annual Report. 11. Intangible assets Copyrights 4,158, ,984, Software and licenses 432, , Other 46, , Total other intangible assets 4,637, ,468,

15 The author s economic rights Software and computer licences Other Total Gross value as at ,543, , ,507, ,050, Increases , , , Decreases Gross value as at ,543, ,078, ,510, ,132, Depreciation as at ,019, , ,569, ,158, Increases-depreciation for year 1,826, , , ,912, Decreases Depreciation as at ,846, , ,579, ,071, Write-offs as at ,538, , ,422, Write-offs as at ,538, , ,422, Net value as at ,984, , , ,468, Net value as at ,158, , , ,637, Gross value as at ,704, ,116, ,504, ,325, Increases 1,844, , , ,864, Decreases 6, , , Gross value as at ,543, , ,507, ,050, Depreciation as at ,288, , ,558, ,530, Increases-depreciation for year 1,737, , , ,852, Decreases 6, , , Depreciation as at ,019, , ,569, ,158, Write-offs as as at ,538, , ,422, Write-offs as at ,538, , ,422, Net value as at ,876, , , ,371, Net value as at ,984, , , ,468,

16 12. Trade receivables and other receivables Trade receivables 7,630, ,969, Impairment of receivables -144, , Total net trade receivables 7,485, ,823, Other receivables from affiliates 2, ,442, Short-term deposits 100, , Other receivables 59, , Total other receivables 161, ,577, Under the Other receivables from affiliates heading, as at December 31, 2015, the following figures were shown: 1) receivables from by Screen Network S.A., totalling PLN 4.2 million, comprising receivables of PLN relating to an unreconciled portion of a debt acquired in 2013, secured by a registered pledge on that company's fixed assets, and receivables of PLN relating to an additional capital contributions for Screen Network S.A. as part of an E-series share issue. 2) receivables from Bridge2fun Sp. z o.o., in the amount of PLN , relating to a resolution to refund the additional capital contributions for that company, paid in 2015 The above receivables from related undertakings were settled in Breakdown of the ageing structure of trade receivables as at December 31, 2016 and December 31, 2015 is presented in the table below: Gross value Write off Net value Current receivables 2,466, ,466, Receivables overdue up to 30 days 2,580, ,580, Receivables overdue from 31 to 90 days 499, , Receivables overdue over 90 days 2,083, , ,939, Total trade receivables as at ,630, , ,485, Gross value Write off Net value Current receivables 2,133, ,133, Receivables overdue up to 30 days 556, , Receivables overdue from 31 to 90 days 354, , Receivables overdue over 90 days 924, , , Total trade receivables as at ,969, , ,823,

17 The value of write-offs of receivables at December 31, 2016 and December 31, 2015 is presented in the table below: Opening balance 145, , Increase , Reversal Utilization Closing balance 144, , Short-term loans Loans to affiliates 941, , Short-term loans granted, total 941, , The Loans to affiliates, comprised, as at December 31,2016, loans granted to Screen Network S.A., in the amount of PLN together with charged interest, and a loan granted to 4fun.TV Sp. z o.o., in the amount of PLN , together with interest. 14. Current accruals and deferred income VAT for settlement 205, , Insurance 8, , Other 126, , Accruals and deferred income, total 339, , Cash and cash equivalents Cash at hand 2, , Cash in current accounts 6, , Cash and cash equivalents. total 9, , Share capital 17

18 All the shares issued by the holding company are the ordinary shares. with no preferences regarding profit distribution. All the issued shares were paid in full. Share capital issued and paid Number of shares 4,119,374 4,063,500 Nominal value of 1 share Nominal value of all shares 4,119, ,063, Structure of the Issuer's share capital broken down per share series Number of shares issued: Shares of A series 1,956,500 1,956,500 Shares of B series 470, ,000 Shares of C series 837, ,000 Shares of D series 800, ,000 Shares of E series 55, Total: 4,119, ,063, Series Type of shares Type of preference Type of limited rights to shares Number of shares Nominal value of 1 share Value of series A bearer none none 1,956, ,956, B bearer none none 470, , C bearer none none 837, , D bearer none none 800, , E bearer none none 55, , Total 4,119,374 4,119, Ownership structure of share capital 18

19 Number of shares held Nominal value of 1 share Nominal value Share in the Company s share capital Nova Group (Cyprus) Ltd 2,211, ,211, % Other Shareholders 1,907, ,907, % TOTAL 4,119,374 4,119, % No changes in the 4fun Media S.A share capital ownership structure took place in the time period 1 January - 31 December 2016, as well as from 1 January 2017 to the date of the publication hereof. 17. Own shares Status as at beginning of period -865, , Increases: Purchase / sale of own shares Status as at end of period -865, , Own shares of 4fun Media S.A. held at December are linked to the implementation of the Share Buy- Back Program. The own share buy-back program was not carried out in Financial instruments Financial instruments assets Assets available for sale Shares in affiliates 22,006, ,715, Receivables and loans Short-term loans for affiliates 941, , Trade receivables 7,485, ,823, Other receivables 161, ,577, Cash and cash equivalent 9, , Total 30,604, ,610, Financial instruments liabilities Other financial liabilities Trade liabilities 3,262, ,843, Credit and loan liabilities 98, Other liabilities 27, , Total 3,388, ,901, * other receivables and liabilities do not include tax settlements 19

20 19. Contingent liabilities and tax settlements As at balance sheet date. the 4fun Media S.A. does not have significant contingent liabilities. Tax settlements Tax settlements and other regulated areas of business (for example. customs or foreign exchange matters) can be the subject of control by administrative authorities. which are entitled to impose high penalties and sanctions. The fact that there is no referral to permanent legal regulations in Poland results in a situation where the current regulations are unclear and inconsistent. The frequent differences in opinions regarding legal interpretation of tax regulations. both within the state authorities and between the state authorities and enterprises. lead to areas of uncertainties and conflicts. These phenomena mean that the tax risk in Poland is significantly higher than in countries with a better developed tax system. Tax settlements can be audited for a period of five years. starting from the end of year in which tax was paid. As a result of such tax audits. the current tax settlements of the Company could be increased by additional tax liabilities. In the opinion of the Company. as at reporting day it holds sufficient provisions for the recognized and measurable tax risk. 20. Transactions with affiliated entities Receivables / liabilities - affiliated entities Receivables from affiliates BRIDGE 2 FUN sp. z o.o. 1,478, , Screen Network SA 593, , Total trade receivables 2,071, ,411, Other receivables from affiliates BRIDGE 2 FUN sp. z o.o , Screen Network SA other liabilities 2, ,111, Screen Network SA (payment for increase of capital) ,105, Receivables from affiliates, total 2,073, ,848, Liabilities to affiliates Program Sp. z o.o. 7, , Hatak Media sp. z o.o.* Total trade receivables 7, , *in 2016 the company Hatak Media sp. z o.o. was not affiliated entity Loans for affiliates 20

21 Screen Network S.A. 930, , FUN.TV sp. z o.o. 10, Status as at end of period 941, , Purchase / sale transactions between affiliated entities Sales of goods and services to affiliated entities takes place on the basis of a standard price list. under the same terms and conditions as applied to transactions with third parties. Purchase of goods were made on the basis of market prices. Revenues on the sales Mondello Sp. z o.o , Screen Network S.A. 446, , BRIDGE 2 FUN sp. z o.o. - (no cost recharging) 296, , Program sp. z o.o. 4, TORAL 747, ,221, Purchase of goods and services Mondello sp. z o.o.* ,109, Hatak Media sp. z o.o.* Screen Network S.A. 446, , BRIDGE 2 FUN sp. z o.o. 18, Program Sp. z o.o. 12, , TOTAL 477, ,692, * in 2016 the companies Mondello and Hatak Media were not affiliated entities 21

22 This annual report was approved for publication on March FUN MEDIA S.A. Rafał Baran President of the Management Board Aneta Parafiniuk Member of the Management Board Hanna Brodecka Person responsible for keeping accounting records Warsaw. March

GRUPA LOTOS S.A. FINANCIAL HIGHLIGHTS

GRUPA LOTOS S.A. FINANCIAL HIGHLIGHTS FINANCIAL HIGHLIGHTS PLN 000 EUR 000 Dec 31 2015 Dec 31 2014 Dec 31 2015 Dec 31 2014 Revenue 20,482,298 26,243,106 4,894,451 6,264,318 Operating profit/(loss) 183,757 (1,294,183) 43,911 (308,926) Pre-tax