SEPARATE ANNUAL REPORT 2016

Transcription

1 ANNUAL

2 UNIMOT S.A. REPORT 2016 prepared as of and for the fiscal year ending 31 DECEMBER 2016 ANNUAL

3 2

4 1. LETTER OF THE PRESIDENT OF THE MANAGEMENT BOARD 2. SELECTED FINANCIAL DATA 3. ANNUAL FINANCIAL STATEMENT 4. MANAGEMENT BOARD S REPORT ON THE ACTIVITIES OF THE COMPANY 4.1 Description of the Company Background Shareholders structure Object of business activity History of the Company Bodies of the Company 4.2 Market environment 4.3 Overview of the basic economic and financial values 4.4 Assessment, together with the reasons therefor, of the management of financial resources, with particular emphasis on the ability to comply with the commitments entered into, and to identify possible risks and actions that the issuer has taken or intends to take in order to counter these threats 4.5 Information about the basic products, goods or services along with the designation of their value and quantity and share of individual products, goods and services (if relevant) or their groups in total sale of the Issuer, as well as changes in this respect in the given fiscal year 4.6 Information about the markets, taking into account the division into domestic and foreign markets, and information about the sources of supply of materials for production, of goods and services, with the determination of the dependence on one or more customers and vendors, and, in case the share of a single customer or supplier reaches at least 10% of the total sales revenue - name (company) of the supplier or the recipient, his participation in the sale or supply, and its formal affiliation with the Issuer 4.7 The most important factors and events, including of unusual character, which have a significant impact on the Issuer's activities and the financial statement, including his achieved profits or incurred losses in the fiscal year 3

5 4.8 Overview of the Issuer s activity development in the following years 4.9 Contractual information significant for the Issuer s activity, including known to the Issuer contracts concluded between the shareholders (partners), insurance, collaboration or cooperation contracts 4.10 Information about organizational or capital links of the Issuer with other entities and determination of his main domestic and foreign investments (securities, financial instruments, intangible assets and real estate), including capital investments made outside of its group of related entities and a description of the method of financing 4.11 Information about transactions concluded by the Issuer or his subsidiary with related parties on different terms than the market, together with their amounts and information specifying the nature of those transactions 4.12 Information on concluded and terminated contracts relating to credits and loans in the given fiscal year, with at least their amount, type and value of the interest rate, currency and maturity 4.13 Information about granted loans in the given fiscal year, with a focus on loans granted to the related parties of the Issuer, providing at least their amount, type and value of the interest rate, currency and maturity 4.14 Information about loans granted and received in the given fiscal year, warranties and guarantees, with particular regard to the warranties and guarantees granted to the related parties of the Issuer 4.15 In case of securities issue during the period covered by the report - a description of the use of the proceeds from the issue by the Issuer until the preparation of the report on the activities 4.16 Explanation of the differences between the financial results reported in the annual report and previously published estimates of the results for the given year 4.17 Assessment of the feasibility of investment objectives, including capital investments, compared to the size of resources owned, taking into account possible changes in the structure of financing of this activity 4.18 Assessment of factors and abnormal events influencing the activity result for the fiscal year, with the determination of the degree of the influence of these factors or abnormal events on the achieved result 4.19 Characteristics of external and internal factors relevant for the development of the enterprise of the Issuer and a description of the development prospects of the Issuer s activity at least until the end of the fiscal year following the fiscal year for which the financial statement posted in the annual report is prepared, taking into account the elements of the market strategy developed by the Issuer 4.20 Changes in the basic principles of management of the Issuer s business and his group of companies 4

6 4.21 Any contracts concluded between the Issuer and managers, providing for compensation in the event of their resignation or dismissal from occupied position without valid reason or if their recalling or dismissal is due to the connection of the issuer by acquisition 4.22 The value of remuneration, awards or benefits, including those resulting from incentives or bonus programs based on the capital of the Issuer, including programs based on senior bonds, convertible bonds, subscription warrants (in money, kind or any other form), paid, payable or potentially payable, separately for each manager, supervisor or member of the administrative body of the issuer in the issuer s company, regardless of whether they were properly included in the costs or whether it resulted from profit sharing; where the issuer is a parent, a significant investor, a partner of interdependent entity or respectively an entity being a party of a joint contractual arrangement - information about wages and awards received for the functions served in authorities of the subordinates separately; 4.23 Information about all commitments arising from pensions and benefits of a similar nature for former managers, supervisors or former members of the administrative bodies and about the commitments entered into in connection with those pensions, with an indication of the total value for each body category; if the correct information has been presented in the financial statement 4.24 Determination of the total number and nominal value of all the shares of the Issuer and shares respectively in related parties of the Issuer held by the managers and supervisors of the Issuer (for each person separately) 4.25 Information about known to the Issuer contracts (including concluded after the balance sheet date), as a result of which the changes of proportion of shares held by existing shareholders and bondholders may arise in the future 4.26 Information about the employee share scheme control system 4.27 Information about: a) the date of conclusion of the contract by the Issuer, with the entity authorized to audit financial statements, to audit or review the financial statements or consolidated financial statements and the period for which this contract has been concluded for 2015 and 2016 b) the remuneration of the entity authorized to audit financial statements, paid or payable for the fiscal year, separately for: annual financial statement audit, other certifying services, including review of a financial statement, tax consultancy services, other services 4.28 Indication of the proceedings pending before a court, the competent authority for the arbitrary proceedings or public administration body, taking into account the information in the field of: 5

7 a) proceedings concerning the obligations or receivables of the Issuer or his subsidiary the value of which is at least 10% of the equity of the issuer, with the designation of: the subject of the proceedings, the extent of the value in dispute, the date of initiation of the proceedings, the parties of the initiated proceedings and the position of the Issuer, b) two or more proceedings relating to liabilities and receivables of which the total value is at least 10% of the equity of the Issuer, with the determination of the total value of proceedings separately in the group of liabilities and receivables together with the position of the Issuer in this matter and, for the largest proceedings of the group of liabilities and the group of receivables - with an indication of their subject matter, the value of the subject matter of the dispute, the date of the initiation of the proceeding and the parties thereto 4.29 Description of relevant risk factors and threats, identifying the extent to which the Issuer is exposed 4.30 Statement of the Management Board on the Corporate Governance Indication of the set of corporate governance principles to which the Issuer is subject, and the place where the text of the set of principles is publicly available Indication of the extent to which the issuer has departed from the provisions of the set of corporate governance principles, together with an explanation of Description of the main features of the Issuer enterprise's internal control and risk management systems in relation to the financial reporting process and consolidated financial statements Indication of shareholders owning, directly or indirectly, qualifying holdings, together with an indication of the number of shares owned by those entities, their percentage in the share capital, the number of votes resulting therefrom and their percentage in the total number of votes at the General Meeting as of 31/12/2016 and as of the date of the statement preparation Indication of the holders of any securities with special control rights and a description of those rights Indication of any restrictions on exercising the right to vote, such as restrictions of the exercising the right to vote of holders of a given percentage or number of votes, deadlines for exercising voting rights, or provisions, according to which, with the company's cooperation, the capital rights relating to securities are separated from the holding of securities Indication of any restrictions on the transfer of ownership rights of the Issuer s securities Description of the principles on the appointment and dismissal of managers and on their powers, in particular the right to take the decision to issue or buy back shares 6

8 Description of rules for amending the Statute or the Articles of Association of the Issuer s company The mode of action of the General Meeting and its essential powers and description of shareholders rights and manner for exercising them, in particular the principles resulting from the Rules of the General Meeting, if such rules have been adopted, as far as the information in this respect do not result directly from legal provisions Information on the personal composition and changes that it underwent over the last fiscal year concerning the management bodies, supervisory and administrative bodies and their committees Description of the diversity policy applied to the administrative, management and supervisory bodies of the issuer with regard to aspects such as age, sex or education and professional experience, the purpose of this diversity policy, its implementation method and effects during the reporting period 4 REPRESENTATION OF THE MANAGEMENT BOARD ON THE RELIABILITY OF PREPARATION OF THE SEPARATE FINANCIAL STATEMENT 5 REPRESENTATION OF THE MANAGEMENT BOARD ON THE ENTITY AUTHORISED TO AUDIT FINANCIAL STATEMENTS 7

9 Dear Sirs, It is with great pleasure that I give you a summary of the activities of the UNIMOT Group for the It was a very successful year for our Group, and at the same time, the year full of challenges and important strategic decisions. Therefore, it is my true delight to briefly discuss the most important accomplishments. Last year the UNIMOT Group generated sales revenue at the level of 2.52 billion which means increased revenues from the year 2015 by 82.6%. Impressive dynamics can also be seen at the level of the net through the financial result. Consolidated net profit for 12 months of 2016 was 29.6 million, an increase of 138% compared to the previous year. This excellent result was achieved largely thanks to the dynamic development of wholesales of diesel fuel. There has been a significant increase in sales volumes of this fuel, especially in the second half of the year and we increased the number of databases that provide our product in the country. Without a doubt an advantageous factor in our development in this sector was the introduction of so-called fuel package in Poland, that is, a set of laws aimed at reducing the shadow economy in fuels trade. What is more, important for the results achieved was an increase in wholesales of biofuels and bio-oils. The most important events of the past year should certainly include intensive preparation of UNIMOT S.A. to debut on the WSE Main Market and related issue of new shares of J class. The purpose of the issue was primarily to acquire capital that will allow the Company, among others, to: finance the increase in sales of diesel fuel, introduction of new brand of petrol stations and investments in modern technologies. In this case we filed a prospectus to the Financial Supervision Authority which was approved on 11 January As of 7 March 2017 we successfully debuted on the regulated WSE market. All of our shares found their buyers. The new investors placed their trust in our vision of development and invested PLN 99 million in new shares. An important decision in 2016 was the acquisition of shares in the company Tradea Sp. z o.o., having a concession for electricity trading. Thanks to this acquisition the UNIMOT Group obtained another subsidiary, supporting its activities in the electricity sector, and thus has developed its multi-energy offer. 8

10 Because the UNIMOT Group's ambition is to create trends and set new directions on the energy and fuel market in Poland, a key feature, with which we have made a competitive advantage is innovation. An example of the innovative actions of the company in 2016 was the launch of the trading platform to sell diesel fuel called HurtPaliwa24. The platform is dedicated to business customers and presents real-time diesel prices, proposed by UNIMOT for 12 fuel bases in Poland. Owing to this the Company's customers have access to current market prices and the ability to buy fuel through the platform at the best price. Another innovative technology, introduced by the Company in 2016 is a project called Tankuj24 which is intended to offer the Polish drivers an access to the purchase of cheaper fuel through a mobile application. Last year the application Tankuj24 was in the testing phase, and its full launch will occur in Having regard to the constant development of the UNIMOT Group, in 2016, we made the decision to enter into a segment of the retail sale of fuels. That is why the Company has signed an agreement with the AVIA INTERNATIONAL Association and based on which it began the process of creating a new network of petrol stations in Poland under the well-known in Europe brand AVIA. Ultimately, in the next three years, we plan to open 100 petrol stations under this brand name in the business model based on the principles of franchise. In conclusion, the UNIMOT Group has competitive advantage that in changing market conditions should provide us the ability to stable growth. Therefore, we will continue to implement the adopted policy of dividends, and at the next General Meeting of Shareholders the Management Board will recommend payment of the dividend at the level of 30% of the net profit. I would like to thank you, our Shareholders, for your confidence you place in the UNIMOT company. I assure you that the owned competitive advantage and, above all, the competence of our team will successfully develop the adopted business model, generate profits, and thus will not disappoint your trust. I would also like to thank the Supervisory Board of the Company for the valuable advice and cooperation. Separate thanks go to all the employees of the UNIMOT Group whose contribution in the above-mentioned successes of 2016 is invaluable. Thanks to their commitment and hard work I am confident that UNIMOT will successfully meet all market challenges that await us in the next years. Yours faithfully Robert Brzozowski President of the Management Board of UNIMOT S.A. 9

11 SELECTED DATA FROM THE SEPARATE FINANCIAL STATEMENT in PLN thousand 31/12/2016 Comparative data* in EUR thousand 31/12/2016 Comparative data* I. Net revenues from sales of products, goods and materials 2,493,466 1,375, , ,737 II. Profit (loss) on operating activity 43,601 17,339 9,964 4,143 III. Gross profit (loss) 40,752 15,842 9,313 3,786 IV. Net profit (loss) 32,257 13,068 7,372 3,123 V. Net cash flows from operating activities (141,362) (10,426) (32,306) (2,491) VI. Net cash flows from investment activities (5,334) (1,628) (1,219) (389) VII. Net cash flows from financial activities 893 6, ,609 VIII. Total net cash flows (142,234) (5,470) (32,506) (1,307) IX. Total assets 556, , ,898 46,363 X. Liabilities and provisions for liabilities 468, , ,852 33,824 XI. Non-current liabilities 28,381 19,699 6,415 4,623 XII. Short-term liabilities 439, ,440 99,437 29,201 XIII. Equity 88,683 53,435 20,046 12,539 XIV. Share Capital 5,832 5,832 1,318 1,369 XV. Number of shares (in thousands of pieces) XVI. Profit (loss) per common share (in PLN/EUR) XVII. Diluted profit (loss) per common share (in PLN/EUR) XVIII. Book value per share (in PLN/EUR)** XIX. Diluted book value per share (in PLN/EUR)** XX. Declared or paid out dividend per share (in PLN/EUR) 5,832 5,832 5,832 5, *The data for items relating to the statement of financial position are presented as of 31 December, whereas for items relating to the statement of comprehensive income and cash flow statements for the period from 1 January to 31 December. 10

12 ** as of 31/12/2016 the number of shares used to calculate the book value and diluted book value per share was 5,832 thousand. ** as of 31/12/2015 the number of shares used to calculate the book value and diluted book value per share was 5,832 thousand. The selected financial data were converted into EUR as follows: The items of assets and liabilities of the statement of financial position were converted into EUR according to the average exchange rate announced by the National Bank of Poland valid as of 31/12/2016 PLN 4.424/EUR and for the comparative data as of 31/12/2015 PLN /EUR. The individual items on the profit and loss account and other comprehensive income and cash flows were converted into EUR according to the exchange rate which is the arithmetic mean of average National Bank of Poland rate valid on the last calendar day of each month which was respectively PLN /EUR (2016), PLN /EUR (2015). 11

13 STATEMENT OF FINANCIAL POSITION in PLN thousand Notice 31/12/ /12/2015 Assets Tangible fixed assets 11 16,782 14,286 Intangible assets 12 13,981 13,744 Other investments 13 21,265 13,739 Trade receivables and other receivables 16 8,615 12,277 Deferred tax assets 14 1,136 1,172 Fixed assets total 61,779 55,218 Inventory ,634 44,203 Trade receivables and other receivables ,167 90,679 Other investments 13 5, Income tax receivables Cash and cash equivalents 18 47,403 5,457 Other current assets ,286 Current assets total 495, ,356 Total assets 556, ,574 President of the Management Board Robert Brzozowski Vice-President of the Management Board Marcin Zawisza Reporting person Małgorzata Walnik Member of the Management Board Małgorzata Garncarek The statement of financial position should be analysed together with the explanatory notes which form an integral part of the financial statement. 12

14 STATEMENT OF FINANCIAL POSITION (CONTINUED) in PLN thousand Note 31/12/ /12/2015 Equity Share Capital 19 5,832 5,832 Revaluation Reserve of Financial Instruments 19 3,721 - Other Capitals 19 46,430 34,092 Profit from previous years and current year result 19 32,700 13,511 Equity total 88,683 53,435 Liabilities Liabilities on credits, loans and other 20 28,250 19,601 debt instruments Employee benefits liabilities Other liabilities Provision on deferred income tax Long-term liabilities total 28,381 19,699 Overdrafts ,092 19,912 Liabilities on credits, loans and other 20 12,851 2,732 debt instruments Employee benefits liabilities Income tax liabilities 1, Provisions 22 14,651 10,188 Trade creditors and other ,490 90,884 Short-term liabilities total 439, ,440 Liabilities total 468, ,139 Total liabilities and equity 556, ,574 President of the Management Board Robert Brzozowski Vice-President of the Management Board Marcin Zawisza Reporting person Małgorzata Walnik Member of the Management Board Małgorzata Garncarek The statement of financial position should be analysed together with the explanatory notes which form an integral part of the financial statement. 13

15 PROFIT OR LOSS STATEMENT in PLN thousand Note 01/01/2016 1/1/ /12/ /12/2015 Revenue from the sale 4 2,507,090 1,362,912 Profit (loss) of financial instruments 4 (13,624) 12,787 securing the sale Cost of products, goods 6 (2,363,399) (1,310,008) and materials sold Gross profit on sales 130,067 65,691 Other revenues 6 1, Costs of sales 5 (69,785) (37,162) General administrative expenses 5 (8,353) (5,261) Other profit/(loss) net 7 (8,996) (6,210) Other costs 8 (543) (263) Income on operating activity 43,601 17,339 Financial revenue Financial costs 9 (3,197) (1,654) Net financial costs (2,849) (1,497) Profit before tax 40,752 15,842 Income tax 10 (8,495) (2,774) Net profit for the fiscal year 32,257 13,068 Earnings per share in PLN: basic diluted

16 STATEMENT OF COMPREHENSIVE INCOME Net profit for the fiscal year 32, Other comprehensive revenue - which will be reclassified to the financial result when specific conditions are met The valuation of hedging instruments after taking into account tax effect 3,721 - Other comprehensive income 3,721 - Total comprehensive income for the fiscal year 35,978 13,068 President of the Management Board Robert Brzozowski Vice-President of the Management Board Marcin Zawisza Reporting person Małgorzata Walnik Member of the Management Board Małgorzata Garncarek The statement of financial position should be analysed together with the explanatory notes which form an integral part of the financial statement. 15

17 CASH FLOW STATEMENT in PLN thousand Note 01/01/2016 1/1/ /12/ /12/2015 Cash flows from operating activity Pre-tax profit/(loss) 40,752 15,842 Revisions (173,619) (23,494) Depreciation of tangible assets 11 2,174 1,810 Amortisation Establishing/conversion of the stock write-downs - (1,105) Loss (profit) on account of foreign exchange differences (2,492) 486 Profit on sale of other investments (112) 29 (Profit)/loss on sale of tangible assets (2) 143 Interests, transaction costs (concerning loans and cash loans) and net dividend 3,027 1,496 Change in the balance of amounts due 29 (114,495) (63,162) Change in inventory 29 (188,431) (30,380) Change on short-term liabilities arising from deliveries and services and other ,034 59,728 Change in the inventories 29 4,463 7,345 Change in employee benefits liabilities Remaining adjustments Cash flows from operating activity (132,867) (7,652) Income tax prepaid/reimbursed (8,495) (2,774) Net cash flows from operating activity (141,362) (10,426) Cash flows from investment activities Inflows from sale of tangible assets Interests received Proceeds from loans 1 - Other inflows (outflows) from investment activity 909 (231) Acquisition of new tangible fixed assets (2,025) (357) Acquisition of intangible assets (281) (20) Acquisition of subsidiaries (4,220) (1,052) Granted loans (30) - Acquisition of other investments (463) (307) Net cash flows from investment activities (5,334) (1,628) 16

18 Cash flows from financial activities Net inflows from issue of shares - - Loans, cash loans and other debt instruments 22,021 11,367 Repayment of loans, cash loans and other debt instruments (11,699) - Dividends received (3,967) (1,400) Payment of liabilities under financial lease agreements (2,390) (1,699) Interests and transaction costs (concerning loans and cash loans) paid (3,072) (1,431) Other financial expenses - (102) Net cash flows from financial activities 893 6,735 Change in the balance of cash and its (145,803) (5,319) The influence of changes of foreign exchange differences concerning balance of cash and its equivalents 3,569 (151) Change in the balance of cash and its (142,234) (5,470) Cash balance and its equivalents decreased by overdraft facility as of 1 January Cash balance and its equivalents decreased by overdraft facility as of 31 December 18 (14,455) (8,985) 18 (156,689) (14,455) - including restricted cash deposits 3 8 President of the Management Board Robert Brzozowski Vice-President of the Management Board Marcin Zawisza Reporting person Małgorzata Walnik Member of the Management Board Małgorzata Garncarek The statement of financial position should be analysed together with the explanatory notes which form an integral part of the financial statement. 17

19 STATEMENT OF CHANGES IN EQUITY in PLN thousand Equity as of 1 January 2015 Total income for the financial year Share capital Revaluation reserve of financial instruments Other capitals (including own shares) Profit from previous years and result for current year Equity total 5,832-30,998 4,937 41, ,068 13,068 - Net profit for the period ,068 13,068 Transactions with owners recognised directly in the equity Payments from and to owners (1,400) (1,400) Dividend (1,400) (1,400) Transfer of profit - - 3,094 (3,094) - Equity as of 31 December ,832-34,092 13,511 53,435 Equity as of 1 January 2016 Total income for the financial year 5,832-34,092 13,511 53, ,257 32,257 - Net profit for the period ,257 32,257 Other comprehensive income for the fiscal year Inflows of concluded effective transactions securing the cash flows Amount transferred to the financial result from reclassification of security instruments - 3, ,721-4, , Deferred income tax - (873) - - (873) Payments from and to owners Transactions with owners (including the sale of own shares) (3,967) (3,967)

20 Transactions with owners recognised directly in the equity Dividend (3,967) (3,967) Other* - - 3,237-3,237 Transfer of profit - - 9,101 (9,101) - Equity as of 31 December ,832 3,721 46,430 32,700 88,683 *On 23 May 2016 Unimot S.A. acquired shares of the Tradea Sp. z o.o. Company In the contract of sale of the shares the Parties agreed that the Second Installment of the Sale Price will be paid by offering and free of charge transfer of subscription warrants convertible to the shares of Unimot S.A. with the following parameters: each subscription warrant will entitle to subscribe for one common bearer share with a nominal value of PLN 1 and issue price of PLN per share. On the basis of the foregoing Unimot S.A. will conditionally increase the capital by 166,021 shares at par value of PLN 1 and issue price of PLN per share. President of the Management Board Robert Brzozowski Vice-President of the Management Board Marcin Zawisza Reporting person Małgorzata Walnik Member of the Management Board Małgorzata Garncarek The statement of financial position should be analysed together with the explanatory notes which form an integral part of the financial statement. 19

21 1. Explanatory notes to the financial statement a) Information about the Company Unimot Spółka Akcyjna ( Unimot S.A.", Company ) with its registered office in Zawadzkie, at ul. Świerklańska 2A was entered on 29 March 2011 into the Business Register of the District Court in Opole VIII Commercial Division of the National Court Register, as KRS number: Unimot S.A. s shares from 7 March 2017 are listed on the Warsaw Stock Exchange The primary activity of the Company is retail and wholesale of gas, liquid fuels, petroleum products. As of the date of this financial statements, the composition of the management and supervisory bodies is as follows: Composition of the Management Board: Robert Brzozowski President of the Management Board Marcin Zawisza Vice-president of the Management Board Małgorzata Garncarek Member of the Management Board Composition of the Supervisory Board Adam Sikorski Chairman of the Supervisory Board Piotr Cieślak Member of the Supervisory Board Isaac Querub Member of the Supervisory Board Bogusław Satława Member of the Supervisory Board Piotr Prusakiewicz Member of the Supervisory Board Ryszard Budzik Member of the Supervisory Board 20

22 as of 31 December 2016 the Unimot S.A. Company had direct and indirect shares in the following subsidiaries: Name of the subsidiary Registered office Scope of the primary activity of the entity Owned shares and voting Date of control Unimot System Sp. z o.o. Poland distribution of gaseous fuels through mains 51.00% 1/20/2014 Polskie Przedsiębiorstwo distribution of gaseous Gazownicze Warszawa Poland 51.00% 3/26/2014 fuels through mains Sp. z o.o. (PPGW Sp. z o.o.) Blue Cold Sp. z o.o. Poland manufacture of gas 50.76% 4/29/2014 Blue LNG Sp. z o.o. Poland distribution of gaseous fuels through mains 51.00% 7/4/2014 tankuj24.pl Sp. z o.o.* Poland distribution of liquid fuels % 11/16/2015 EnergoGas Sp. z o.o. Poland distribution of electricity and liquid fuels % 12/30/2015 EnergoGas Sp. z o.o. S.K.A. Poland distribution of liquid fuels % 12/30/2015 Tradea Sp. z o.o. Poland distribution of electricity % 5/23/2016 *formerly MPW Trading Sp. z o.o. (change of the name 30/05/2016) ** indirect ownership of UNIMOT S.A. in Energogas Sp. z o.o. S.K.A % As for 31 December 2016 the Unimot System Sp. z o.o. Subsidiary owned 100 shares in the following companies: Name of the subsidiary Registered office Scope of the primary activity of the entity Owned shares and voting Date of control Polskie Przedsiębiorstwo Gazownicze Warszawa Sp. z o.o. (PPGW Sp. z o.o.) Blue LNG Sp. z o.o. Poland Poland distribution of gaseous fuels through mains distribution of gaseous fuels through mains 51.00%* 3/26/ %* 7/4/2014 *Unimot System Sp. z o.o. owns 100% of shares in the capital in the above-mentioned companies. In 2016, the following changes occurred in the Group of Companies Unimot: Acquisitions made in On Unimot S.A. made the capital increase by 400 shares of PLN 1,000 each in EnergoGas Sp. z.o.o., and as a result the equity of EnergoGas Sp. z o.o. increased by PLN 400 thousand. The percentage share of Unimot S.A. in EnergoGas Sp. z o.o. did not change. 21

23 2. On Unimot S.A. made the capital increase by 250 shares of PLN 100 each in tankuj24.pl Sp. z o.o., and as a result the equity of tankuj24.pl Sp. z o.o. increased by PLN 25 thousand. The percentage share of Unimot S.A. in tankuj24.pl Sp. z o.o. did not change. 3. On Unimot System Sp. z o.o. made the capital increase by 6,400 shares of PLN 100 each in Blue Lng Sp. z o.o., and as a result the equity of Blue Lng Sp. z o.o. increased by PLN 640 thousand. The percentage share of Unimot System Sp. z o.o. in Blue Lng Sp. z o.o. did not change. 4. On Unimot S.A. made the capital increase by 400 shares of PLN 1,000 each in EnergoGas Sp. z.o.o., and as a result the equity of EnergoGas Sp. z o.o. increased by PLN 400 thousand. The percentage share of Unimot S.A. in EnergoGas Sp. z o.o. did not change. 5. On Unimot S.A. purchased 500 shares of PLN 3,000 each in Tradea Sp. z o.o., and as a result acquired 100% of the shares. The second installment for the acquired shares will be paid in the form of issue of share warrants in Unimot S.A. to the seller. 6. On Unimot S.A. made the capital increase by 500 shares of PLN 1,000 each in EnergoGas Sp. z.o.o., and as a result the equity of EnergoGas Sp. z o.o. increased by PLN 500 thousand. The percentage share of Unimot S.A. in EnergoGas Sp. z o.o. did not change. 7. On Unimot S.A. made the capital increase by 500 shares of PLN 1,000 each in EnergoGas Sp. z.o.o., and as a result the equity of EnergoGas Sp. z o.o. increased by PLN 500 thousand. The percentage share of Unimot S.A. in EnergoGas Sp. z o.o. did not change. 8. On Unimot S.A. made the capital increase by 1,200 shares of PLN 1,000 each in EnergoGas Sp. z.o.o., and as a result the equity of EnergoGas Sp. z o.o. increased by PLN 1,200 thousand. The percentage share of Unimot S.A. in EnergoGas Sp. z o.o. did not change. Mergers made in 2016 No mergers of subsidiaries in the period from 1 January to 31 December Disposals made in 2016 No disposals of subsidiaries in the period from 1 January to 31 December b) Basis for the preparation of the financial statement (i) Going concern The financial statements as of and for the fiscal year ending on 31 December 2016 has been drawn up on the assumption of continuation of economic activity of the Company in the foreseeable future. The Company is the Parent company in the Group of Companies Unimot. As of the date of this financial statement preparation the Management Board of Unimot S.A. does not find existence of circumstances indicating that the continuance of the activity in the next reporting period is threatened, both by the Company and by the Group of Companies Unimot. 22

24 (ii) Statement of conformity The financial statement was prepared according to the accounting principles compliant with the International Financial Reporting Standards (IFRS), covering International Accounting Standards (IAS) and the interpretations of the Standing Interpretations Committee (SIC) and the International Financial Reporting Interpretations Committee (IFRIC) approved by the European Union (UE) and valid as of 31 December The financial statement was prepared on the basis of historic cost principle, except for derivatives of financial instruments, available-for-sale financial assets and investment real estate measured at fair value by the financial result. The Company prepares also consolidated financial statements of the Group of Companies Unimot. The consolidated financial statements of the Group of Companies to which the Company belong, as the subsidiary prepares Unimot Express Sp. z o.o. with its registered office in Warsaw, ul. Al. Ks. J. Poniatowskiego 1, Warszawa. The IFRS EU contain all International Accounting Standards, International Financial Reporting Standards and related Interpretations, in addition to the following Standards and Interpretations, which are awaiting approval by the European Union and Standards and Interpretations which have been approved by the European Union but not yet entered into force. Certain new standards, changes to the standards and interpretations that apply or will apply for reporting periods ending after 31 December 2016, were not included to draw up this financial statement. In addition to IFRS 9 Financial Instruments, it is not envisaged that new standards and changes to the currently applicable standards could have a significant impact on the financial statement of the Company. New accounting standards and interpretations of the International Financial Reporting Interpretations Committee (IFRIC) A. Standards and Interpretations adopted by the EU Changes to IFRS 11 Joint Arrangements - Accounting for the Acquisition of Shares in Joint Operations - approved in the EU on 24 November 2015 (applicable to annual periods beginning on or after 1 January 2016), Changes to IAS 16 Property, Plant and Equipment and IAS 38 Intangible Assets - Explanation on Acceptable Depreciation Method - approved in the EU on 2 December 2015 (applicable to annual periods beginning on or after 1 January 2016), Changes to IAS 16 Property, Plant and Equipment and IAS 41 Agriculture - Crops - approved in the EU on 23 November 2015 (applicable to annual periods beginning on or after 1 January 2016), Changes to IAS 19 Employee Benefits - Defined Benefit Plans: Employers' Contributions - approved in the EU on 17 December 2014 (applicable to annual periods beginning on or after 1 February 2015), 23

25 Changes to IAS 27 Separate Financial Statements - Equity Method in the Separate Financial Statements - approved in the EU on 18 December 2015 (applicable to annual periods beginning on or after 1 January 2016), Changes to various standards Amendments to IFRS ( cycle) - changes made within a procedure of introducing annual amendments to IFRS (IFRS 2, IFRS 3, IFRS 8, IFRS 13, IAS 16, IAS 24, and IAS 38) generally aimed at eliminating inconsistencies and clarifying the vocabulary - approved in the EU on 17 December 2014 (applicable to annual periods beginning on or after 1 February 2015), Changes to various standards Amendments to IFRS ( cycle) - changes made within a procedure of introducing annual amendments to IFRS (IFRS 5, IFRS 7, IAS 19, and IAS 34) generally aimed at eliminating inconsistencies and clarifying the vocabulary - approved in the EU on 15 December 2015 (applicable to annual periods beginning on or after 1 January 2015), Changes to IAS 1 Presentation of Financial Statements - Initiative in Relation to Disclosures - approved in the EU on 18 December 2015 (applicable to annual periods beginning on or after 1 January 2016), Changes to IFRS 10 Consolidated Financial Statements, IFRS 12 Disclosure of Interests in Other Entities and IAS 28 Investments in affiliates and Joint Ventures - Investment entities: Applying an Exemption from Consolidation - approved by the EU on 22 September 2016 (applicable to annual periods beginning on or after 1 January 2016). B. Standards and interpretations approved by the European Union, but have not yet entered into force IFRS 9 Financial Instruments - approved in the EU on 22 November 2016 (applicable to annual periods beginning on or after 1 January 2018), IFRS 15 Revenue from Contracts with Customers and changes to IFRS 15 Effective Date IFRS 15 - approved in the EU on 22 September 2016 (applicable to annual periods beginning on or after 1 January 2018). C. Standards and Interpretations pending approval by the EU. IFRS 14 Regulatory Defferal Accounts (applicable to annual periods beginning on or after 1 January 2016) - The European Commission has decided not to initiate the process of approval of this provisional standard for use within the EU until issue of the final version of IFRS 14, IFRS 16 Leasing (applicable to annual periods beginning on or after 1 January 2019), Changes to IFRS 2 Share-based Payments - Classification and Valuation of Share-based Payments (applicable to annual periods beginning on or after 1 January 2018); 24

26 Changes to IFRS 4 Insurance Contracts - Use of IFRS 9 Financial Instruments together with IFRS 4 Insurance Instruments (applicable to annual periods beginning on or after 1 January 2018 or when using IFRS 9 Financial Instruments for the first time), Changes to IFRS 10 Consolidated Financial Statements, and IAS 28 Investments in affiliates and Joint Ventures - Sale or contribution of assets between the investor and his associate or joint venture and the subsequent changes (date of entry into force of the changes has been postponed until the end of the research on equity method), Changes to IFRS 15 Revenue from Contracts with Customers - Explanations to IFRS 15 Revenue from Contracts with Customers (applicable to annual periods beginning on or after 1 January 2018 ). Changes to IAS 7 Statement of Cash Flows - Initiative in Relation to Disclosures (applicable to annual periods beginning on or after 1 January 2017), Changes to IAS 12 Income Taxes - Recognition of Deferred Income Tax from Unrealized Loss (applicable to annual periods beginning on or after 1 January 2017), Changes to IAS 40 Investment Property - Transfer of Investment Real Estate (applicable to annual periods beginning on or after 1 January 2018), Changes to various standards Amendments to IFRS ( cycle) - changes made within a procedure of introducing annual amendments to IFRS (IFRS 1, IFRS 12, and IAS 28) generally aimed at eliminating inconsistencies and clarifying the vocabulary (changes to IFRS 12 are applicable to annual periods beginning on or after 1 January 2017, and changes to IFRS 1 and IFRS 28 are applicable to annual periods beginning on or after 1 January 2018), Interpretation IFRIC 22 Foreign Currency Transactions and Advance Considerations (applicable to annual periods beginning on or after 1 January 2018), c) Significant estimates and judgments Preparation of the financial statement in conformity with International Financial Reporting Standards requires the Management Board of the Company to make judgments, estimates and assumptions that affect the accepted accounting principles and the reported amounts of assets, liabilities, income and expenses. The estimates and underlying assumptions are based on historical experience and other factors that are considered reasonable under given circumstances, and their results provide the basis for professional judgment as to the book value of assets and liabilities not derived directly from other sources. The actual value may differ from the estimated value. 25

27 Judgments, estimates and underlying assumptions are subject to ongoing verification. The change in accounting estimates is recognised in the period in which the estimate is changed or in current and future periods if the change in estimate affects both the current period and future periods. The significant judgments and estimates made by the Management Board of the Company using IFRS EU are presented in the following notes: note 1b going-concern principle - note 12 impairment test for cash flow-generating entities to which goodwill has been allocated note 14 deferred tax assets and liabilities and use of tax losses note 21 employee benefit liabilities note 22 and 25 provisions and contingent liabilities note 24 evaluation of financial instruments d) Functional and presentation currency The Company's functional currency and the presentation currency of this financial statement is Polish Zloty (PLN). The data in the financial statements are presented in Polish Zloty, rounded to the nearest thousand unless stated otherwise in specific circumstance. 2 Description of significant accounting principles The accounting policies presented below were applied to all periods presented in the financial statement Transactions in foreign currency Transactions denominated in foreign currencies at the transaction date are recognised in the relevant functional currency using the exchange rate of the transaction date. Monetary items of assets and liabilities denominated in foreign currency are converted into the functional currency at the reporting date at the exchange rate prevailing at that date. The exchange differences arising from the settlement of foreign currency transactions and the balance sheet valuation of monetary assets and liabilities denominated in foreign currencies are recognised in the financial result. Non-monetary items of assets and liabilities measured according to the historical cost in foreign currency are converted into the functional currency at the exchange rate prevailing on the transaction date. Non-monetary items of the statement of financial position expressed in foreign currency measured at fair value are converted into functional currency according to the exchange rate effective on the day of estimation fair value. 26

28 Foreign exchange profits/losses on financial liabilities, including lease liabilities, are recognised in the financial income/expenses. Other foreign exchange profits/losses are recognised in other net profits/losses. Own property, plant and equipment Tangible fixed assets include both the tangible assets, as well as the fixed assets under construction. The initial value of tangible fixed assets is determined at the purchase price or at the production cost. The acquisition price or production cost includes the purchase price of the asset (i.e. the amount payable to the seller, less the deductible taxes: on Goods and Services and Excise), legal charges (in the case of imports) and other costs directly related to the purchase and adaptation of the tangible asset for use, including transport, loading, unloading and storage costs. Rebates, discounts and other similar concessions and returns decrease the asset acquisition price. The cost of the tangible asset includes also estimated costs of dismantling and removing it and restoring the site on which it is located, the obligation for which the Company incurs in relation to the acquisition or construction of the tangible asset. The tangible fixed assets are measured and reported in the statement of financial position at the end of the reporting period in the net book value, i.e.. are recognised in the accounts at the acquisition cost or at reliably estimated cost of production, less amortisation and impairment loss and grants related to the assets. Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset influence its initial value as part of the cost of that asset. The costs are capitalized when it is probable that they will result in future economic benefits and the value of those costs can be measured reliably. Other borrowing costs are recognised as an expense in the period in which they were incurred. If the specified tangible asset consists of separate and essential constituents of a different period of use, these assets should be treated as separate assets. Expenditures incurred at a later date Expenditures of the exchanged constituents of the tangible asset incurred at a later date which may be reliably estimated and it is probable that the Company will obtain economic benefits related to the exchanged constituents of the tangible assets are capitalized. All other expenditures are recognised in the financial result as costs at the time incurred. Depreciation The tangible fixed assets or their significant and separate constituents, are depreciated on a straight-line basis from the date they are available for use, i.e. since the adaptation of the asset to the place and the conditions necessary for its operation, for a period corresponding to the estimated period of their use, taking account of the final value. Lands are not subject to depreciation. The Company assumes the following useful lives for each category of tangible assets: 27

29 Buildings and structures from 10 to 40 years Technical equipment and machinery from 2 to 40 years Transport equipment from 5 to 22 years Other property, plant and equipment from 1 to 30 years The correctness of the applicable periods of use, methods of depreciation and residual value of the fixed assets shall be annually reviewed by the Company. Creation and reversal of write-downs of the tangible assets are recognised in other operating activities. d) Constituents of the tangible fixed assets used under lease contracts Leasing contracts, under which the Company pays virtually the entire risk and draws virtually all the benefits of having constituents of the tangible fixed assets are classified as financial lease contracts. The assets acquired by way of financial lease are reported initially at fair value or the present value of the minimum lease payments, depending on which of these amounts is lower. After the initial recognition, to the assets used under financial lease contracts the accounting principles appropriate for a given group of tangible fixed assets apply. Leasing contracts not being financial lease contracts are treated as the operating lease, and the assets used in the framework of these contracts are not recognised in the statement of financial position of the Company. The Company recognises a contract for perpetual use of land as operating lease contract. Prepayments for the right of perpetual use of land shall be disclosed in a separate item of the statement of financial position. Those prepayments are written off into the financial result in the period of land use. e) Intangible assets Goodwill After the initial recognition the goodwill is disclosed at the purchase price less accumulated impairment losses. The goodwill is allocated to cash generating entities and is not depreciated, but is subject to annual impairment tests. Goodwill impairment losses are not reversed in the following period. Research and development Expenses incurred in the research phase with a view to obtaining new scientific or technical knowledge are reported in the financial result when incurred. Expenditures incurred on the development work of which effects are used in the development or production of new or substantially improved product shall be capitalized if the creation of a new product (or process) is technically possible and economically reasonable and the Company has technical, financial and other necessary resources to complete the development work. Costs to be capitalized include: cost of materials, wages of employees directly engaged in the development work and a reasonable portion of indirect costs directly associated with the formation of the intangible asset. Other development costs are recognised in the financial result when incurred. The capitalized development costs are recognised as intangible assets based on their purchase price 28

30 less depreciation write-offs and impairment losses. Other intangible assets Other intangible assets acquired by the Company are initially measured at the purchase cost or production cost and are reported in the financial statement prepared at the end of the reporting period in the net book value, i.e.. minus amortisation and impairment losses. Expenditures incurred at a later date Subsequent expenditures on existing intangible assets are capitalized only when it increases future economic benefits to be generated by the asset. Other expenditures are recognised in the financial result when incurred. Depreciation Intangible property with a specified useful life are depreciated on a straight-line basis from the date they are available for use, i.e. since the adaptation of the asset to the place and the conditions necessary for its operation, for a period corresponding to the estimated period of their use. The goodwill and intangible assets of unlimited useful life are tested annually for impairment. Creation and reversal of write-downs of the intangible assets are recognised in other operating activities. The estimated useful life of the intangible property is as follows: Development costs from 5 to 15 years Computer software from 2 to 5 years Acquired property rights (concessions, licenses, patents) from 2 to 30 years Other intangible fixed assets 2 years f) Investment real estate Investment real estate is real estate held to obtain income from the lease, for the growth of their value or to both these objectives. The initial value of the investment real estate is determined at the purchase price or at the production cost. Investment real estate is depreciated on a straight-line basis for the period of their use, including their residual value. Lands are not subject to amortisation. Estimated period of usability of the investment real estate is the same as the tangible assets described in section c) above. g) Fixed assets held for sale Fixed assets (or components of the group intended for disposal) are classified as held for sale if their book value will be recovered through a sales transaction, which is highly likely, they are available for immediate sale and the Management Board undertakes to fulfill the sales plan of the asset (disposal group). Fixed assets or constituents of a group intended for disposal are recognised in the amount lower from their book value and fair value, less costs to sell if their book value will be recovered primarily through sale rather than through their further use. 29

31 h) Financial assets Financial instruments Non-derivative financial instruments Loan, receivables and deposits are recognised as they arise. All other financial assets (including assets measured at fair value through the financial result) are recognised on the day of the transaction which is the date when the Company becomes a party to the mutual commitment regarding the given financial instrument. The Company ceases to recognise a financial asset at the time of expiry of the contractual rights to receive cash flows from that asset or until, when the rights to receive cash flows from the financial asset are transferred in a transaction substantially transferring all the significant risks and rewards of their property. Each share in the transferred financial asset that is created or held by the Company is treated as an asset or liability. Assets and liabilities are set off together and reported in the statement of financial position on a net basis, only if the Company has valid legal title to the set-off of certain financial assets and liabilities and intends to settle the transaction in net terms subject to the set-off of assets and financial liabilities or intends to simultaneously realize the financial assets and settle the financial obligations that are subject to the setoff. The company classifies financial instruments, other than derivatives financial assets into the following categories: financial assets measured at fair value through the financial result, financial assets held-tomaturity, loans and receivables and available-for-sale financial assets. Held-to-maturity financial assets Held-to-maturity financial assets are assets with a specific value and the date of redemption which the Company has the intent and ability to keep to the maturity date. Held-to-maturity investments are measured at depreciated cost using the effective interest method. Assets in this category are recognised as fixed assets, provided that their exercise date exceeds 12 months from the date of reporting. Financial assets at fair value through the financial result Financial assets acquired by the Company in order to generate a profit in a short period of time are classified as financial assets measured at fair value through the financial result. These instruments are measured at fair value without transaction costs, taking into account the market value of the instrument at the reporting date. Changes in the fair value are directly in the financial result under the item "other net profits/(losses). Assets in this category are recognised as current assets, provided that the Management Board of the Company has a definite intent to realize them within 12 months from the date of reporting. Loans and Receivables Loans and receivables are financial assets with fixed or determinable payments that are not quoted in an active market. Such assets are initially recognised at fair value plus directly attributable transaction costs. After the initial recognition they are measured according to the depreciated costs after deduction of the impairment losses. 30

32 Impairment loss of trade receivables is formed on the basis of individual analysis taking into account the value of owned security. Premises indicating that the trade receivables have lost their value are, among others: serious financial difficulties of debtor, delay in payments, probability that the debtor will declare bankruptcy. The allowance amount is the difference between the book value of the asset and the present value of the estimated future cash flows, discounted at the effective interest rate. The book value of the asset is determined using the allowance account, and the amount of the loss is recognised in the financial result in selling expenses. In the case of uncollectible trade receivables, it is written off. Subsequent repayment of previously written-off receivables is recognised in the item of sales costs in the financial result. Available-for-sale financial assets Available-for-sale financial assets include other than derivative financial assets designated as AFS or unclassified to neither of the above categories. Available-for-sale financial assets are initially recognised at fair value plus direct transaction costs. After the initial recognition, available-for-sale financial assets are measured at fair value, and the effects of changes in the fair value, other than impairment losses and foreign exchange differences on availablefor-sale debt instruments, are recognised in other comprehensive income and presented in equity. When an investment is derecognised, the gain or loss accumulated in equity is reclassified to the financial result of the current period. Fair value of financial assets Investments in debt instruments and equities The fair value of financial assets measured to fair value through result, held-to-maturity investments and available-for-sale financial assets is estimated on the basis of the market value at the reporting date (if there is an active market). The fair value of held-to-maturity investments is estimated only for the disclosures. Financial derivatives The Company uses financial derivative instruments to hedge its exposure to foreign exchange and interest rate risks. Financial derivatives are recognised as trade instruments at fair value; the adherent transaction costs are recognised in the financial result when incurred. After the initial recognition, the Company valuates the financial derivatives at fair value, profits and losses arising from changes in fair value are recognised immediately in the financial result. The fair value of the swap contracts is quoted as the market price on the reporting date, which is the present value of the future price. Hedge accounting In 2016, the Company in relation to diesel began using hedge accounting of its fair value and cash flows against the risk of foreign exchange rate changes and price changes of goods. 31

33 Hedging, for accounting purposes, involves proportional offsetting of the effects of changes in the fair value or changes in cash flows arising from a hedging instrument and a linked hedged item. The company uses the opportentityy of natural hedging through the application of hedge accounting to loans in US dollars, liabilities in US dollars, and also to loans in US dollars, designating them as hedging instruments against the risk of exchange rate changes related to the future revenues of the Company from the sale of diesel fuel. Other hedging instruments used by the Company are foreign exchange forward transactions and futures contracts hedging the volatility of diesel fuel price on the markets. Entering into a hedging transaction takes place according to the procedures applicable in the Company. The company uses derivative instruments solely for the purpose of hedging the business. Hedge effectiveness is the degree to which changes in the fair value or cash flows of the hedged item are offset by changes in the fair value or cash flows of the hedging instruments. In the cash flow hedge accounting profits and losses resulting from changes in the valuation of items hedged to the extent that they constitute effective hedging are related in the revaluation reserve whereas the result for the ineffective part of the hedging is included in the current period result. In the fair value hedge accounting profits and losses resulting from changes in the valuation of items hedged to the extent that they constitute ineffective hedging are included in the current period result. Impairment of Financial Assets At the end of each reporting period, the Company assesses whether there is any objective indication that a financial asset may be impaired or there is a reversal of an impairment write-offs of any asset or the cash-generating entity. A significant or prolonged decline in the fair value of an investment in an equity instrument below its cost is also objective evidence of impairment. The impairment in relation to financial assets measured at depreciated cost is estimated as the difference between the book value and the present value of future cash flows discounted using the original effective interest rate. Short-term receivables are not discounted. The impairment write-off in relation to the available-for-sale financial assets is measured by reference to their current fair value. The book value of each financial asset with individually significant value is assessed at each reporting date to determine whether there are indications of their impairment. Other financial assets are assessed for impairment collectively, grouped according to similar level of credit risk. The impairment write-offs are recognised in the financial result. When a decline in the fair value of an available-for-sale financial asset has been recognised directly in equity and there is objective evidence that the asset is impaired, the cumulative losses that had been recognised directly in equity are recognised in the financial result even though the financial asset has not been derecognised. 32

34 Impairment write-offs are reversed if the subsequent increase in recoverable amount can be objectively attributed to an event after the date of recognition of impairment loss. Impairment write-offs relating to investments in equity instruments classified as available for sale are not reversed through the financial result. If the fair value of debt instruments classified as available for sale increases and its increase can be objectively attributed to an event after the recognition of the impairment, the previously recognised impairment loss is reversed with the amount of the reversal reported in the financial result. Fair value determination The accounting and disclosure policies adopted by the Company require the determination of fair value of financial assets and liabilities. Information on assumptions and methods adopted for determining the fair value is presented in the explanatory notes. i) Inventory The inventory, including the mandatory inventory are products, half-finished products and work-in-progress, goods and materials. The goods are measured at the initial recognition at acquisition cost, but at the end of the reporting period at acquisition cost or net realizable value, whichever is the lower, including any inventory allowances. Goods expenditure is carried out by applying the FIFO method. Tests for impairment of individual inventories are carried out on a regular basis during the reporting period. Inventories that have lost their functional features, usefulness or fall in their selling prices are subject to discounting to the level of possible to obtain net selling prices. Creation/release of stock write-downs is recognised in the sold products, goods or materials cost. The inventory surplus or shortcoming identified as a result of an inventory are recognised in the sold products, goods or materials cost. j) Cash and cash equivalents Cash and cash equivalents include cash in hand and short-term bank deposits. Overdrafts that are payable on demand and form an integral part of the Company's cash management are recognised as a constituent of the cash and cash equivalents for the purpose of the statement of cash flows. The valuation and disbursement in foreign currencies are determined using the FIFO method. k) Impairment of financial assets The book value of non-financial assets other than the stock and deferred tax assets is assessed at each reporting date to determine whether there are indications of their impairment. In the event of such indications, the Company estimates the recoverable amount of each asset. The recoverable amount of the goodwill, intangibles with indefinite useful lives and intangible assets that are not yet usable is estimated at each reporting date. 33

35 The impairment write-off is recognised when the book value of an asset or cash generating entity exceeds its recoverable amount. The impairment write-offs are recognised in the financial result. The impairment of the cash generating entity is firstly recognised as decrease in goodwill allocated to this cash generating entity (group of entities), ant then as reduction of the book value of other assets of the entity (group of entities) on the principle of proportionality. The recoverable amount of assets or cash-generating entities is defined as the greater of their net realizable value from sales and their value in use. In estimating the value in use, future cash flows are discounted using the pre-tax interest rate, which reflects the current market value of money over time and the risk factors specific to the asset. For assets that do not generate an independent cash flow, the value in use is estimated for the smallest identifiable cash-generating entity to which the asset belongs. A goodwill write-down from impairment is not reversed. For other assets, an impairment write-down is reversed if the estimates used to estimate the recoverable amount have changed. The impairment writedown is reversed only to the extent of the book value of the asset less any depreciation write-off that would have been recognised if the impairment loss had not been recognised. l) Equity Share Capital The share capital is reported at nominal value of shares issued in accordance with the statute and registered in the National Court Register. Revaluation Reserve of Financial Instruments The revaluation reserve of financial instruments is created in connection with the cash flow hedge accounting introduced in the Company. Other Capitals The other capitals include the spare capital and reserve capital, treasury shares. The spare capital is created from net profit write-offs in accordance with the requirements of the Commercial Code. The reserve capital is created from the net profit for payment of dividends. Dividends The dividends are recognised as liabilities in the period when they were approved by virtue of a resolution. Share Redemption In the case of share redemption, the payment amount, including direct transaction costs, adjusted for tax effects, is reported as a deduction of equity. The purchased treasury shares are recognised under other capitals. At the time of sale or reissue, the amounts obtained are recognised as an increase in equity and the surplus or deficit from the transaction is reported in equity. m) Liabilities from bank credits, loans and other debt instruments At the time of the initial recognition, all bank credits, loans and debt securities are recognised at the fair value, less costs associated with obtaining a credit or loan. After the initial recognition, the interestbearing credits, loans and debt securities are measured in accordance with the depreciated cost using 34

36 the effective interest method. Any difference between the amount received (less transaction costs) and the redemption value is recognised using the effective interest method in the financial result for the duration of the contracts. The fair value, estimated for disclosure purposes, is calculated on the basis of the present value of future cash flows for return of capital and interests, discounted at the market interest rate as of the reporting date. In the case of a financial lease, the market interest rate is estimated based on the interest rate for a similar type of leasing contracts. n) Employee benefits Defined Benefit Plan - Retirement Compensation The Company recognises provisions for retirement compensations and other employee benefits on the basis of an actuarial valuation carried out at the reporting date. The valuation is carried out by an independent actuary. The basis for calculation of provisions for employee benefits is determined by internal regulations of the Company and other applicable regulations. The value of the provisions for employee benefits is determined using actuarial techniques and the requirements of IFRS EU, and in particular of IAS 19 "Employee Benefits". The provisions are measured at the level of the present value of the Company's future employee benefits obligations. The provisions are calculated using the projected entity credit method, separately for each employee. The basis for the calculation of the provisions attributable to the individual employees is the projected value of the benefit that the Company is required to pay under the regulations listed above. The benefit value is projected until acquisition of the benefit by the employee. The employee benefit obligation is determined on the basis of the expected increase in the value of the benefit and proportionally to the employee's expected length of service. The estimated value is then discounted at the reporting date. Short-Term Employee Benefits Liabilities due to short-term employee benefits are valued without discount and are recognised under expenses at the time of performance. 35

37 The Company creates a provision charged to expenses in the amount of anticipated employee payments due under short-term cash bonuses if the Company is legally or customarily obliged to make such payments on the basis of past employee services, and that obligation can be fairly estimated. o) Provisions The provisions are created when the entity is burdened with the present obligation (the legal or customarily expected one) resulting from past events, and it is probable that the fulfillment of this obligation will result in the necessity of the economic benefits outflow, and the amount of this obligation can be reliably estimated. The provisions amount is verified on a regular basis during the reporting period in order to adjust them to reflect the current best estimate. p) Trade creditors and other Liabilities, including trade creditors are measured when they arise at fair value, and then at the depreciated cost using the effective interest method. Current liabilities are not discounted. q) Revenue The revenue includes the fair value of the payment received or payable in respect of the sale of products, services, goods and materials in the ordinary operating activities of the Company. The revenue are reported net without tax on goods and services, after taking into account returns, rebates and discounts. Sales revenue are adjusted for the result from the settlement of derivative instruments. Sale of Products, Goods and Materials The sales revenue for products, goods and materials are deemed realised when: a) the entity has transferred to the buyer the significant risks and benefits of ownership of products, goods and materials, b) the enterprise retains neither continuing managerial involvement to the degree usually associated with the ownership nor effective control over the products, goods and materials sold, c) the amount of revenue can be measured reliably, d) it is likely that the entity will receive the economic benefits of the transaction and e) the costs incurred or to be incurred by the economic entity in respect of the transaction can be measured reliably. Supply of Services Service sales revenue are deemed realised when: a) the amount of revenue can be measured reliably, b) it is likely that the entity will receive the economic benefits of the transaction, c) the stage of completion of the transaction at the end of the reporting period can be determined reliably 36

38 and d) the costs incurred for the transaction and the costs to complete the transaction can be measured reliably. In addition, the revenue of the reporting period, affecting profit or loss of the period is: other operating revenue indirectly related with the business activity, among others: - dissolution of unused provisions previously charged to other operating costs, - trade receivables and other interest revenue, - revenue from reimbursement of court costs, - received donations, financial revenue, which are mainly revenue related to funding of activities, - revenue and profit from financial investments, - revenue from dividends, - net profits from the foreign exchange gains on financial assets, - reversal of impairment write-off of held-to-maturity financial assets, available-for-sale financial assets, loans and shares. s) Costs The costs are considered to be a reasonable reduction in the economic benefits of a reliably determined value in the reporting period in the form of a decrease in the value of assets or an increase in the value of liabilities and provisions which will lead to a decrease in equity or an increase in its deficit in other way than withdrawal of owner funds. The costs are recognised in profit or loss on the basis of the direct link between the costs incurred and the achievement of specific revenue, i.e. by applying the principle of proportionality, through prepayments and accruals. The cost of goods sold is adjusted at the end of each reporting period for the fair value change of embedded derivatives. In addition, the costs of the reporting period, affecting profit or loss of the period are: other operating costs indirectly related with the business activity, among others: - provisions for disputes, penalties, damages, and other costs related indirectly to the operating activities, - interest expenses on trade payables and other using the effective interest method. - costs of legal proceedings - donations given. financial costs related with the external financing of the activities, including in particular: - interest on bank overdrafts, - interest on short-term and long-term loans, credits and other sources of financing. - net losses from the foreign exchange gains on financial assets, - impairment write-offs on held-to-maturity financial assets, 37

39 available-for-sale financial assets, loans and shares. t) Other net profit/loss Other profit/loss net includes: - net profits/losses from disposals of tangible fixed assets and intangible assets, - net profits/losses from the foreign exchange gains on operating activities, u) Leasing Operating Lease Payments Payments from the operating lease contracts concluded by the Company are recognised in the financial result on a straight-line basis during the lease period. Special discounts are recognised in the financial result together with the costs from leasing. Financial Lease Payments Minimum lease payments from finance lease are divided into a part constituting the financing cost and a part decreasing liability. The part constituting the financial cost is assigned to periods during the lease contract using the effective interest method. w) Current and deferred income tax The income tax reported in the financial result includes current and deferred part. The income tax is recognised in the financial result, excluding amounts related to items recognised in other comprehensive income or equity. Then they are recognised respectively in other comprehensive income or equity. Current tax is the expected tax payable on the taxable income for the period and any adjustment to tax payable in respect of previous years. The deferred tax is calculated using the balance sheet liability method, based on temporary differences between the value of the assets and liabilities for accounting purposes, and their estimated value for tax purposes. The deferred tax is not created on the following temporary differences: goodwill, initial recognition of assets or liabilities that affect neither accounting profit nor taxable profit, differences relating to investments in subsidiaries to the extent that it is unlikely that they will be realized in the foreseeable future. The recognised amount of deferred tax is based on expectations as to how to implement the carrying amount of assets and liabilities, using tax rates in force or enacted at the reporting date. The deferred tax assets are recognised to the extent to which it is probable that taxable income is reached, which will allow for the implementation of the deferred tax asset. The deferred tax assets are reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow the benefit of part or all of that deferred tax asset to be utilized. 38

40 3 Reporting segments The reporting segments in the Company correspond to the activity types in accordance with article 44 of the Act "Energy Law". Unimot S.A. being the energy company is obliged to prepare a financial statement containing the balance sheet and the profit and loss account by the different types of activities. The company has identified the following types of activities: 1. Liquid fuel trade - The Company conducts wholesale and retail sale of diesel, LPG and biofuels. 2. Gasous fuel trade - The company operates in the scope of natural gas trading (including LNG) and distribution through POLPX. 3. Other activities - this segment of the Company's activities include activities related to the running of service stations, service activities, financial and other. Rules for the preparation of reports on profit and loss and other comprehensive income by types of activities The Company keeps accounting records allowing for a separate calculation of revenues, costs and the financial result for the above activities. The company has directly identified sales revenue, cost of goods, materials and services sold, and costs associated with various classes of business. Overheads of the Company have been assigned proportionally through a revenue key, i.e. involving revenue obtained from individual activities in the total revenue. Unassigned items include the remaining activities not assignable to any of the above activities, i.e. charge of the financial result from income tax from legal persons, sale of fixed assets, exchange differences, interest income from bank deposits, financial costs related to the given bank credits, loans. Rules for the Preparation of a Separate Statement of Financial Position The company has directly identified fixed tangible assets, inventories, receivables and liabilities and trade creditors and other receivables and liabilities associated with the various activities carried out by the Company. Unassigned items include the remaining activities not assignable to any of the above activities, i.e. tangible fixed assets, receivables, cash, equities, credit, loan, tax liabilities, provisions, deferred tax assets. 39

41 PROFIT AND LOSS STATEMENT in PLN thousand Trading in liquid fuels Trading in gaseous fuels Other activities Not assigned activities Total 31/12/2016 Revenue from external customers 2,457,765 17,675 18,026-2,493,466 Internal sale revenue Total revenue 2,457,765 17,675 18,026-2,493,466 Cost of sold goods, products and materials to external customers Cost of sold goods, products and materials from internal sale (2,331,079) (16,944) (15,376) - (2,363,399) Cost of sold goods (2,331,079) (16,944) (15,376) - (2,363, products and 399) materials, total Segment result 126, , ,067 Other revenues 1, ,211 Sales and general administrative costs (71,863) (915) (5,360) (78,138) Other net profit/loss (7,484) 12 (1,524) (8,996) Other costs (273) - (270) - (543) Operating activities result 48,128 (169) (4,358) - 43,601 Net financial costs (2,400) (3) (446) - (2,849) Income tax (8,495) (8,495) Profit/loss for the period 45,728 (172) (4,804) (8,495) 32,257 40

42 in PLN thousand Trading in liquid fuels Trading in gaseous fuels Other activities Not assigned activities Total 31/12/2015 Revenue from external customers 1,345,558 11,738 18,403-1,375,699 Internal sale revenue Total revenue 1,345,558 11,738 18,403-1,375,699 Cost of sold goods, products and materials to external customers (1,283,282) (11,575) (15,151) - (1,310,008) Cost of sold goods, products and materials from internal sale Total cost of sold goods, products and materials (1,283,282) (11,575) (15,151) - (1,310,008) Segment result 62, ,252-65,691 Other revenues Sales and general administrative costs (34,411) (842) (7,170) - (42,423) Other net profit/loss (6,120) 23 (113) - (6,210) Other costs (107) (1) (155) - (263) Operating activities result 22,132 (657) (4,136) - 17,339 Net financial costs (1,248) (3) (246) - (1,497) Income tax (2,774) (2,774) Profit/loss for the period 20,884 (660) (4,382) (2,774) 13,068 41

43 STATEMENT OF FINANCIAL POSITION BY TYPES OF ACTIVITIES in PLN thousand Trading in liquid fuels Trading in gaseous Other activities Not assigned activities Total fuels 31/12/2016 Assets Fixed assets 34,451 1, ,161 61,779 Tangible fixed assets 12, ,530 16,782 Intangible assets 13, ,981 Other investments - 1,143-20,122 21,265 Trade receivables 8, ,615 and other Deferred income - - 1,136 1,136 tax assets Current assets 428,487 4,392 1,339 60, ,193 Inventory 231, ,634 Trade receivables 191,842 3, , ,167 and other Other investments 4, ,747 Income tax receivables Cash and cash equivalents ,403 47,403 Other current assets Total assets 462,938 5,619 2,279 86, ,972 Liabilities Equity 66,612 (832) (9,186) 32,089 88,683 Long-term 27,837 liabilities Liabilities on credits, 27,837 loans and other debt instruments , ,250 Employee benefits liabilities Provision on deferred income tax 42

44 Short-term 329,300 1,506 1, , ,908 liabilities Overdrafts 187, , ,092 Liabilities from credit, 9, ,345 12,851 loans and other debt instruments Employee benefits liabilities Income tax liability ,443 1,443 Provisions 14, ,651 Trade creditors and other 117,724 1,379 1,401 85, ,490 Total liabilities and equity 423, (7,785) 140, ,972 in PLN thousand Trading in liquid fuels Trading in gaseous fuels Other activities Not assigned activities Total 31/12/2015 Assets Fixed assets 37,073 1, ,124 55,218 Tangible fixed assets 11, ,528 14,286 Intangible assets 13, ,744 Other investments - 1,396-12,343 13,739 Trade receivables and other receivables 11, ,277 Deferred tax assets ,172 1,172 Current assets 128, ,290 11, ,356 Inventory 43, ,203 Trade receivables and other receivables 85, ,374 90,679 Other investments Income tax receivables Cash and cash equivalents ,457 5,457 Other current assets ,286 1,286 Total assets 165,486 2,613 1,503 27, ,574 43

45 Liabilities Equity 20,884 (660) (4,382) 37,593 53,435 Long-term liabilities 15, ,773 19,699 Liabilities from credits, loans and other debt instruments 15, ,675 19,601 Employee benefits liabilities Provision on deferred income tax Short-term liabilities 72, , ,440 Overdrafts 15, ,661 19,912 Liabilities from credits, loans and other debt instruments 2, ,732 Employee benefits liabilities Income tax liabilities Provisions 9, ,188 Trade creditors and other 45, ,649 90,884 Total liabilities and equity 109,134 (117) (3,680) 92, ,574 in PLN thousand Trading in liquid fuels Trading in gaseous fuels Other activities Not assigned activities Total 31/12/2016 Segment assets 462,938 5,619 2,279 86, ,972 Segment liabilities 357,137 1,716 1, , ,289 in PLN thousand Trading in liquid fuels Trading in gaseous fuels Other activities Not assigned activities Total 31/12/2015 Segment assets 165,486 2,613 1,503 27, ,574 Segment liabilities 88, , ,139 44

46 Not assigned assets 31/12/ /12/2015 in PLN thousand Long-/short-term investments 20,134 12,953 Deferred tax assets 1,136 1,172 Income tax receivables Cash and cash equivalents 47,403 5,457 Fixed assets 3,812 2,573 Other receivables (receivables from taxes, receivables on sale of subsidiaries, etc.) 12,409 4,410 Other current assets 967 1,286 86,136 27,972 Not assigned liabilities 31/12/ /12/2015 in PLN thousand Liabilities from credits, loans and other debt instruments 3,548 3,741 Overdrafts 16,496 4,661 Provision on deferred income tax - - Employee benefits liabilities Income tax liabilities 1, Provisions Trade creditors and other 85,986 44, ,035 54,644 45

47 Geographical areas Geographical breakdown of sales revenues corresponds to the location of the final recipients. in PLN thousand 01/01/ /12/ /01/ /12/2015 Poland 1,857,844 1,040,846 Czech Republic 149,367 61,219 Switzerland - 154,091 Slovakia 105, ,755 Ireland - - Hungary Austria - 18 Great Britain 336 1,042 Cyprus - 12,094 Germany 2,543 3,992 Slovenia The Netherlands 256,072 - Romania 5,583 - France 45,687 - Bulgaria 63,325 - Lithuania 7,367 - Total 2,493,466 1,375,699 Key customers In 2016, one of the recipients of the Company exceeded 10% of revenue - Gunvor International B.V. (In 2015, none of the Company's recipients exceeded 10% of revenue). 46

48 4 Revenue from sale in PLN thousand 01/01/ /12/ /01/ /12/2015 Service sale revenue Goods sale revenue 2,506,522 1,362,184 Profit (loss) of financial instruments securing the sale (13,624) 12,787 2,493,466 1,375,699 5 Costs by type in PLN thousand 01/01/ /12/ /01/ /12/2015 Depreciation of tangible fixed assets and intangible assets (note 11 and (2,216) (1,818) Materials and energy consumption (2,305) (2,158) External services (58,766) (27,199) Taxes and levies (1,925) (1,720) Salaries (7,732) (5,556) Social insurance and other benefits (1,874) (1,161) Other costs by type (4,379) (1,985) Total costs by type (79,197) (41,597) Cost of sold goods and materials (2,363,399) (1,310,008) Change in inventories and prepayments and accruals Presentational changes according to the IFRS in scope of costs Cost of sold products, goods and materials, sales and general management costs 853 (864) (2,441,537) (1,352,431) 47

49 6 Other revenues in PLN thousand 01/01/ /12/ /01/ /12/2015 Received compensations and penalties 4 - Received insurance payments 48 8 Decomitted liabilities Recoverable costs of legal proceedings Interest revenue on trade receivables Other , Other profit/(loss) net in PLN thousand 01/01/ /12/ /01/ /12/2015 Net profit/(loss) on sale of fixed tangible assets 3 (135) Net profit/(loss) from the foreign exchange gains on operating activities (8,999) (6,075) (8,996) (6,210) 8 Other costs in PLN thousand 01/01/ /12/ /01/ /12/2015 Interest costs on non-financial liabilities (144) (129) Costs of legal proceedings (79) (54) Contractual penalties (48) (8) Redeemed receivables (66) (32) Donations (148) (31) Motor insurance claims (53) (7) Other (5) (2) (543) (263) 48

50 9 Net financial costs in PLN thousand 01/01/ /12/ /01/ /12/2015 Financial revenue Interest on financial assets and financial commissions Net profit from foreign exchange differences - - Profit on disposal of investments Total financial revenue Financial costs Bank fees and transaction costs on credits and loans (accounted for by applying the effective interest rate method) (3,197) (1,654) Total financial costs (3,197) (1,654) Net financial costs (2,849) (1,497) 10 Income tax Income tax reported in the statement of profit or loss and other comprehensive income in PLN thousand 01/01/ /12/ /01/ /12/2015 Current income tax Income tax for the current year (9,332) (5,296) (9,332) (5,296) Deferred tax Establishment / reversal of temporary differences 837 2,522 Income tax recognised in the statement of profit or loss and other comprehensive income (8,495) (2,774) 49

51 EFFECTIVE TAX RATE in PLN thousand 01/01/ /01/2016-1/1/2015 1/1/ /12/ /12/ /12/ /12/2015 (Loss)/profit before tax 100.0% 40, % 15, Tax based on applicable tax rate (19.0%) (7,743) (19.0%) (3,010) Permanent non-tax-deductible costs (0.2%) (81) (1.3%) (201) Permanent non-taxable revenue 0.0% Temporary differences for which no asset was recognised Tax losses for which no deferred income tax was recognised Adjustment of deferred tax for previous years Other (1.7%) (678) 2.8% 437 (20.8%) (8,495) (17.5%) (2,774) 50

52 11 Tangible fixed assets in PLN thousand Land Buildings and structures Machinery and equipment Transport equipment Other fixed assets Fixed assets under constru ction Total As of 01/01/2015 1,239 2,440 2,501 8,096 2,604-16,880 Increase on , ,385 - acquisitions leasing , ,988 - in-kind contribution of a part of a business as a - transfer going concern from the assets under construction (31) - Reduction on account - (1) (168) (364) (119) - (652) - liquidation - (1) (133) - (32) - (166) - sell off (364) (12) - (376) - inventory - - (35) - (75) - (110) As of 12/31/2015 1,239 2,525 2,519 9,729 2,601-18,613 As of 1/1/2016 1,239 2,525 2,519 9,729 2,601-18,613 Increase on , ,187 5,282 - acquisitions ,187 1,997 - leasing , ,285 - inventory transfer from the assets under construction Reduction on account - - (21) (1,305) (127) - (1,453) - liquidation (84) (112) - (196) - sell off - - (21) (1,221) (15) - (1,257) - inventory As of 12/31/2016 1,239 2,525 3,083 11,714 2,694 1,187 22,442 Depreciation and impairment write-offs As of 01/01/ (239) (537) (1,564) (443) - (2,783) Depreciation for the period - (80) (190) (1,372) (168) - (1,810) Reduction on account liquidation

53 - sell off inventory As of 12/31/ (319) (652) (2,775) (581) - (4,327) As of 1/1/ (319) (652) (2,775) (581) - (4,327) Depreciation for the period - (86) (264) (1,667) (157) - (2,174) Reduction on account liquidation sell off inventory As of 12/31/ (405) (914) (3,624) (717) - (5,660) Net value As of 01/01/2015 1,239 2,201 1,964 6,532 2,161-14,097 As of 12/31/2015 1,239 2,206 1,867 6,954 2,020-14,286 As of 1/1/2016 1,239 2,206 1,867 6,954 2,020-14,286 As of 12/31/2016 1,239 2,120 2,169 8,090 1,977 1,187 16,782 TANGIBLE FIXED ASSETS 31/12/ /12/2015 Land 1,239 1,239 Buildings and structures 2,120 2,206 Machinery and equipment 2,169 1,867 Transport equipment 8,090 6,954 Other fixed assets 1,977 2,020 Fixed assets under construction 1,187 - Total 16,782 14,286 31/12/ /12/2015 Value of fixed tangible assets pledged as security for liabilities 5,174 5,472 52

54 Fixed assets under lease The Company uses certain machinery and production equipment and means of transport in the framework of financial leasing contracts. In case of all contracts, the Company has the option to purchase these fixed assets cost-effectively after the end of the lease term. As of 31/12/2016 the net carrying amount of fixed assets used under valid financial lease agreements amounted to PLN 7,870 thousand, including: for transport equipment PLN 7,777 thousand and PLN 93 thousand for machinery and equipment (31/12/2015: PLN 6,489 thousand for transport equipment and PLN 138 thousand for machinery and equipment). Hedges As of 31/12/2016 tangible fixed assets with a carrying amount of PLN 5,174 thousand (31/12/2015: PLN 5,472 thousand) constituted collaterals of bank credits, overdrafts. 12 Intangible assets in PLN thousand Value Development cost CO2 emission allowances Softwar e and others Total As of 01/01/ , ,747 Increase on account of: acquisitions in-kind contribution of a part of a business as a going concern Decrease As of 12/31/ , ,769 As of 1/1/ , ,769 Increase on account of: acquisitions Decrease As of 12/31/ , ,048 As of 01/01/ (17) (17) Depreciation for the year (8) (8) Decrease As of 12/31/ (25) (25) As of 01/01/ (25) (25) 53

55 Depreciation for the year (42) (42) Decrease As of 12/31/ (67) (67) Net value As of 01/01/ , ,730 As of 12/31/ , ,74 As of 1/1/ , ,744 As of 12/31/ , ,98 Intangible assets under leasing As of 31/12/2016 and as of 31/12/2015 no intangible property used under financial leasing contracts. Amortisation and impairment write-offs Amortisation and impairment write-offs were recognised in the financial result under following items: in PLN thousand 01/01/ /12/ /01/ /12/2015 General administrative expenses (42) (8) (42) (8) Impairment test for cash flow-generating units to which goodwill has been allocated The following units have the goodwill allocated: 31/12/ /12/2015 Activities relating to trading in liquefied petroleum gas LPG 2,830 2,830 Activities relating to trading in fuels 10,869 10,869 13,699 13,699 54

56 Activities relating to trading in fuels - Fair value of a cash flow-generating unit is estimated based on two methods of valuation: discounted cash flow and comparative method. Value calculations according to the discounted cash flow method are based on the results achieved in 2015 and 2016 and on the projected results for the years drawn up by the Management Board of the Company. Calculations of values according to the comparative method was made on the basis of the ONICO S.A. company as a benchmark to measure and its published financial data at the end of the Q The results of the fair value measurement on the basis of the above two methods was made on the basis of the weight of individual methods relative to each other. Activities relating to trading in liquified gas LPG - Fair value of a cash flow-generating unit is estimated based on the discounted cash flow method. Value calculations according to the discounted cash flow method are based on the results achieved in 2015 and 2016 and on the projected results for the years drawn up by the Management Board of the Company. BASIC ASSUMPTIONS USED TO CALCULATE THE FAIR VALUE AS FOR 31/12/2015: Discount rate Activities relating to trading in liquified gas LPG weighted average of own and foreign equity cost Activities relating to trading in fuels weighted average of own and foreign equity cost Cost of equity after tax 10.60% 18.36% Cost of foreign capital 3.80% 2.66% BASIC ASSUMPTIONS USED TO CALCULATE THE FAIR VALUE AS FOR 31/12/2016: Discount rate Activities relating to trading in liquified gas LPG weighted average of own and foreign equity cost Activities relating to trading in fuels weighted average of own and foreign equity cost Cost of equity after tax 10.80% 9.50% Cost of foreign capital 4.00% 4.00% The basis of measurement were projected by the Management Board of the Company financial results of the activities associated with trading in fuels and LPG gas in the form of a balance sheet, profit and loss account and statement on cash flows. These projections do not express certainty as to their implementation, but were in accordance with the declaration of the Management Board of the Company drawn up in accordance with the best of the authors knowledge, based on all available information, therefore, it is assumed that are sufficiently accurate and complete, so that it is possible to draw up a credible analysis and measurement. The basic assumptions of the financial projections for the years which are the basis for the measurement of the activities associated with trading in fuels and liquefied petroleum gas LPG: 55

57 1) it was assumed that tax rates will remain at the current level, and tax policy and on trade with foreign countries, as well as other terms and conditions of business will not change; 2) legal acts regulating the fuel market, among others: Energy law will not be substantially amended; 3) no significant fluctuations in the macroeconomic situation of the country and the related demand for liquid and gaseous fuels, in relation to the current situation will occur; 4) reference rate and banks' margin will not change significantly; 5) "gray area" in the fuel industry will be limited, or at least it will not extend its activities; 6) hedging instruments for exchange rates and the price of diesel used by the Company will eliminate currency risk and the diesel price risk. The detailed assumptions of the financial projections for the years which are the basis for the measurement of the activities associated with trading in liquefied petroleum gas LPG: 1) maintenance of the sales volumes of all the LPG product groups in 2017 at a similar level as in 2016; 2) maintenance of the mean sale margin of all the LPG product groups in 2017 at a similar level as in 2016; 3) changes in the cost of transport and the cost of external services and the cost of manufacture of cylinders proportionally to the change in the number of sold T of LPG; 4) height of other prime costs in 2017 maintained at the level of the average level of these costs in 2016; 5) change of the financial revenue and the financial costs with the exception of leasing proportionally to the change of turnover; 6) maintenance of the financial costs from leasing in 2017 at the level of the average level of these costs in 2016; As of 31/12/2016 and 31/12/2015 there was no loss of goodwill in relation to the activities associated with trading in fuels and LPG. 13 Other investments in PLN thousand 31/12/ /12/2015 Long-term investments a) in subsidiaries Granted loans 1,143 1,396 Shares 20,105 12,343 21,248 13,739 b) in other entities Granted loans 17 - Shares ,265 13,739 56

58 Short-term investments a) in subsidiaries Granted loans Other - - b) in other entities Granted loans 12 - Hedging instruments 4,594 Other STRUCTURE OF LONG-TERM INVESTMENTS WAS INCLUDED IN THE FOLLOWING TABLE: 4, , Name of the subsidiary with an indication of the legal form 31/12/ /12/ Unimot System Sp. z o.o. 8,167 8,167 - Blue Cold Sp. z o.o. 3,533 3,533 - tankuj24.pl Sp. z o.o EnergoGas Sp. z o.o. 3, EnergoGas Sp. z o.o. S.K.A Tradea Sp. z o.o. 4,737-20,105 12,343 Measurement of value of shares in subsidiaries was made at the purchase price which is not higher than the fair value at the balance sheet date. Analysis of shares in subsidiaries Basic information about the subsidiaries directly controlled by the Company are presented in the following table: Name of the Registered Date Value Book Percentage Share in total with an indication of control of shares value of share number of votes legal form acquisition at cost of shares capital held at the General Meeting / Meeting of Shareholders 1 - Unimot System Sp. z o.o. 2 - Blue Cold Sp. z o.o. Warsaw 1/20/2014 8,167 8, % 51.00% Warsaw 4/29/2014 3,533 3, % 50.76% 57

59 3 - tankuj24.pl. z o.o. 4 - EnergoGas Sp. z o.o 5 - EnergoGas Sp. z o.o S.K.A.* 6 - Tradea Sp. z o.o Częstochowa 11/16/ % % Warsaw 12/30/2015 3,502 3, % % Warsaw 12/30/ % % Częstochowa 5/23/2016 4,737 4, % % Shares in total: 20,105 * indirect ownership of UNIMOT S.A. in Energogas Sp. z o.o. S.K.A % 14 Deferred tax assets and liabilities Recognised deferred tax assets and provisions The deferred tax assets and liabilities are recognised in reference to the following items: in PLN thousand Assets Provisions Net value 31/12/ /12/ /12/ /12/ /12/ /12/2015 Tangible fixed assets - - (1,291) (1,240) (1,291) (1,240) Intangible assets (3) - (3) Trade receivables and other receivables (81) (31) Employee benefits liabilities Provisions for obligatory reserve 2,774 1, ,774 1,789 Provision for pensions Trade creditors and other Other (39) (79) Hedging Instruments - - (873) - (873) - 58

60 Assets / provision on deferred income tax 3,420 2,525 (2,284) (1,353) 1,136 1,172 Compensation (2,284) (1,353) 2,284 1,353 Assets / provision from deferred income tax reported in the statement of financial position 1,136 1, CHANGE IN TEMPORARY DIFFERENCES DURING THE PERIOD in PLN thousand 01/01/2016 Change recognised in the financial result Change recognised in the equity 31/12/2016 Tangible fixed assets (1,240) (51) (1,291) Intangible assets (3) Trade receivables and other receivables 61 (51) - 10 Employee benefits liabilities Provisions for obligatory reserve 1, ,774 Provision for pensions Trade creditors and other 316 (175) Other Total , ,009 Recognition in financial result Hedging Instruments - - ( 873) (873) Recognised in the equity - - ( 873) (873) 59

61 in PLN thousand 1/1/2015 Change recognised in the financial result Change recognised in the equity 31/12/2015. Tangible fixed assets (1,243) 3 - (1,240) Intangible assets (1) (2) - (3) Inventory 210 (210) - - Trade receivables and other receivables Employee benefits liabilities Provisions for obligatory reserve 129 1,660-1,789 Provision for pensions Payments and accrued income (364) Trade creditors and other Other (231) (1,350) 2,522-1,172 Recognition in financial result 2,522 (1,350) 2,522-1, Reserve in PLN thousand 31/12/ /12/2015 Goods - obligatory reserve 70,843 Goods - operating reserve 161,791 44, ,634 44,203 Movements on reserve write-downs in PLN thousand 31/12/ /12/2015 Opening balance as of 1 January - (1,105) Setting-up

62 Utilisation of Dissolution ,105 Closing balance as of 31 December - - Inventories are presented in net value after deduction of write-downs, that on the day as of 31/12/2016 amounted to PLN 0 thousand (31/12/2015 amounted to PLN 0 thousand). 16 Trade receivables and other receivables in PLN thousand 31/12/ /12/2015 Long term receivables a) from related parties Other receivables b) from other entities Receivables from exemption from the obligation to provide the excise tax guarantee 5,426 6,315 Receivables from hedging of foreign trade in fuels 3,000 5,051 Receivables from good contract performance Receivables from bid bonds Receivables from other bonds ,615 12,277 8,615 12,277 in PLN thousand 31/12/ /12/2015 Short-term receivables a) from related parties Trade receivables 2, Advances for deliveries and services 2-2,

63 b) from other entities Trade receivables 180,055 76,742 Receivables from taxes, donations, duties, insurance, excluding income tax receivables 12,033 4,136 Advances for deliveries and services 2,140 6,929 Receivables from exemption from the obligation to provide the excise tax guarantee Receivables from hedging of foreign trade in fuels Receivables from good contract performance Receivables from bid bonds Receivables from other bonds Other receivables ,602 90, ,167 90,679 As of 31/12/2016 the trade receivables and other receivables are presented in net value less write-downs in the amount of PLN 480 thousand (31/12/2015: PLN 485 thousand). As of 31/12/2016 the receivables with a carrying amount of PLN 169,258 thousand (31/12/2015: PLN 55,325 thousand) constituted collaterals of bank credits and overdrafts. 17 Other current assets in PLN thousand 31/12/ /12/2015 Other current assets Prepayments and accruals 967 1, , Cash and cash equivalents in PLN thousand 31/12/ /12/2015 Cash at bank 47,215 5,289 Restricted cash 3 8 Cash in hand

64 Other cash Cash and cash equivalents, value reported in the statement of financial position 47,403 5,457 Overdrafts (204,092) (19,912) Cash and cash equivalents, value reported in the statement of financial position (156,689) (14,455) As of 31/12/2016 and of 31/12/2015 the cash and cash equivalents did not constitute collateral for liabilities. Detailed information about overdrafts are presented in note Equity Share Capital 31/12/ /12/2015 Registered number of shares 5,831,797 5,831,797 Nominal value of 1 share PLN 1 PLN 1 As of 31 December 2016 the share capital of the Company consisted of 5,131,797 ordinary shares and 700,000 preferred shares (31/12/2015: 5,131,797 ordinary shares and 700,000 preferred shares) of nominal value of PLN 1 each. The ownership structure as of 31 December 2016 is presented in the following* table: Shareholder Number of shares Share in the capital % Number of votes Share in votes at the General Unimot Express Sp. z o.o. 3,454, % 3,804, % Zemadon Limited 1,572, % 1,922, % Others 805, % 805, % Total 5,831, % 6,531, % Other Capitals 31/12/ /12/2015 Reserve capital 46,430 34,092 63

65 The spare capital includes (in PLN thousand): 1. Issue of shares above par value - in-kind contribution of a part of a business as a going concern in , Issue of shares above par value in Transfer of profit in Issue of shares above par value - in-kind contribution of a part of a business as a going concern in , Transfer of profit in Transfer of profit in , Transfer of profit in , On 23 May 2016 Unimot S.A. acquired shares of the Tradea Sp. z o.o. Company In the contract of sale of the shares the Parties agreed that the Second Installment of the Sale Price will be paid by offering and free of charge transfer of subscription warrants convertible to the shares of Unimot S.A. with the following parameters: each subscription warrant will entitle to subscribe for one common bearer share with a nominal value of PLN 1 and issue price of PLN per share. On the basis of the foregoing the Unimot S.A. Company will conditionally increase the capital by 166,021 shares at par value of PLN 1 and issue price of PLN per share - 3,237. The spare capital as of 31/12/ , /12/ /12/2015 Revaluation reserve of financial instruments 3,721 - The Company begun using principles of hedge accounting in The rules of application are discussed in note no. 24. Dividend On 2 June 2016 the Ordinary General Meeting of Unimot S.A. adopted a resolution on distribution of profit of the Company for 2015, including the decision to devote to payment of dividends the amount of PLN 3,967 thousand. The amount of dividend per share amounted to PLN The dividend day was set to 15 June The divident was paid out on 30 June Profit/loss per share Basic profit/loss per share Calculation of the primary profit/loss per share as of 31 December 2016, was based on net profit attributable to ordinary shareholders of the Company in the amount of PLN 32,257 thousand (2015: net profit PLN 13,068 thousand) and the weighted average number of ordinary shares at the date of preparation of the separate financial statement of 5,832 thousand. (2015: 5,832 thousand). The weighted average number of shares for calculation of diluted results per share as of 31 December 2016 amounts to 5,832. (2015: 5,832 thousand). 64

66 20 Liabilities from credits, loans and other debt instruments and overdrafts The note presents data on Company s liabilities from credits, loans and other debt instruments. Information on foreign exchange risk and interest rate risk the Company is exposed to are shown in note 24. in PLN thousand 31/12/ /12/2015 Non-current liabilities a) to related parties Credits and loans secured on the assets of the Company - - Financial lease liabilities Other loans ,512-3,512 b) to other entities Credits and loans secured on the assets of the Company - Financial lease liabilities 4,494 4,167 Other loans 23,756 11,922 28,250 16,089 28,250 19,601 Short-term liabilities a) to related parties Short-term part of the credits and loans secured on the assets of the Company - - Short-term part of the financial lease liabilities - - Other loans 3,200-3,200 - b) to other entities Short-term part of the credits and loans secured on the assets of the Company - - Short-term part of the financial lease liabilities 2,491 1,923 Other loans - Other derivatives 7, ,651 2,732 Total 41,101 22,333 Overdrafts 204,092 19, ,193 42,245 65

67 Repayment schedule for liabilities from credits, loans and other as of 31 December 2016 (without finance lease liabilities) in PLN thousand Total Less than 1 year From 1-3 years Between 3-5 years Over 5 years Secured credits Other instruments 34,116 10,360 23, ,116 10,360 23, Repayment schedule for liabilities from credits, loans and other as of 31 December 2015 (without finance lease liabilities) in PLN thousand Total Less than 1 year From 1-3 years Between 3-5 years Over 5 years Secured credits Other instruments 16, , , , Repayment schedule for leasing liabilities in PLN thousand Financial lease payments Interest Equity Financial lease payments Interest Equity 31/12/ /12/2015 To 1 year 2, ,491 2, ,923 1 to 5 years 4, ,494 4, ,167 7, ,985 6, ,090 Lease contracts do not provide for conditional payments. 66

68 As of 31 December 2016 Analysis of credit contracts, loans: Name of financing company part Longterm Shortterm part Type of liability Date of granting Repayment date Hedges Raiffeisen Bank - 11,089 overdraft facility 11/08/ /12/ a bail mortgage on real estate Polska S.A. together with an assignment of insurance policy, a registered pledge on fixed assets, an authorization to the current account and other accounts, an assignment of receivables Bank Millenium S.A. - 1,497 overdraft facility 20/09/ /04/ a collective mortgage on real estate together with an assignment of insurance policy, a warranty granted by Unimot Express Sp. z o.o., an assignment of receivables mbank S.A. - 88,622 overdraft facility 01/10/ /10/ a collective mortgage on real estate, a blank note together with a blank promissory note agreement, an assignment of receivables, an assignment of insurance policy, a registered pledge on diesel ING Bank Śląski - 60,655 overdraft facility 03/03/ /08/2017 a registered pledge on stock, an authorization to the current account and other accounts, an assignment of receivables, an assignment of insurance policy BNP Paribas - 42,229 overdraft facility 26/09/ /09/2026 a blank promissory note together with an agreement, a pledge or a registered pledge on financed or refinanced product, an assignment of indemnification from the insurance policy, a confirmed assignment of receivables, a silent assignment of receivables, a registered pledge on the bank account, a declaration on submission to enforcement, power of attorney to dispose of funds on all bank accounts in the Bank Unimot Express - 2,500 loan 10/12/ /12/ no hedge Sp. z o.o. Unimot Express loan 23/12/ /12/ no hedge Sp. z o.o. U.C.Energy Ltd 23,756 - loan 01/03/ /05/ a blank promissory note Total 23, ,292 69

69 Analysis of leasing contracts: Name of financing company Millenium Leasing Sp. z o.o. Long-term part Short-term part Type of liability Date of granting Repayment date Hedges 3,221 1,094 leasing 09/11/ /10/2020 blank promissory note agreement Raiffeisen Leasing Polska S.A leasing 01/08/ /10/2019 blank promissory note agreement mleasing Sp. z o.o. 1,112 1,146 leasing 28/06/ /07/2019 blank promissory note agreement BNP Paribas Leasing Sp. z o.o leasing 13/04/ /10/2018 blank promissory note agreement Total 4,494 2,491 Margin on liabilities from credits, loans and other debt instruments depends on variable interest rate to which it refers. Interval analysis of margin is presented below: - WIBOR 1M - margin in the range 0.7% - 2%, - LIBOR 1M - margin in the range 1.15% %, - EURIBOR 1M - margin in the range 1.30% %. 70

70 21 Employee benefits liabilities in PLN thousand 31/12/ /12/2015 Long-term liabilities from retirement compensation, pension and other Short-term liabilities from retirement compensation, pension and other Employee benefits Liabilities from retirement compensation were calculated by the independent actuary based on the following assumptions: 31/12/ /12/2015 Discount rate 3.4% 3.1% Future wage growth 2.0% 2.5% Inflation 2.0% 2.5% Change of state of defined benefit liability over the year: in PLN thousand Retirement Pension allowances allowances Other Total As of 1 January Current service cost Interest costs Actuarial profit/(loss) from change in assumptions Benefits paid (2) - - (2) Other actuarial profit/(loss) Reclassifications - As of 31 December As of 1 January Current service cost Interest costs Actuarial profit/(loss) from change in assumptions 8 (1) (6) 1 Benefits paid (6) - - (6) Other actuarial profit/(loss) As of 31 December

71 Sensitivity of liabilities from employee benefits and changes in basic assumptions As of 31 December 2016 Change in assumptions Influence on benefits Decrease Increase Increase / (decrease) Increase / (decrease) Discount rate 0.5% 0.5% 2.17% (1.96%) Future wage growth 0.5% 0.5% (0.55)% 0.59% Inflation 0.5% 0.5% 0.87% (0.82%) Costs related to the change in provisions are recognised in the financial result as overheads and other costs. 22 Short-term provisions in PLN thousand 31/12/ /12/2015 Opening balance as of 1 January 10,188 1,493 Provisions created in the period 5,234 10,188 Provisions used in the period (587) (815) Provisions released in the period (184) (678) Closing balance as of 31 14,651 10,188 As of 31 December 2016 the value of provisions consists of provisions from compulsory stock in the amount of PLN 14,601 thousand and provision for examination of the balance sheet in the amount of PLN 50 thousand. As of 31 December 2015 the value of reserves consists of compulsory stock in the amount of PLN 9,417 thousand. Provision for remuneration in the amount of PLN 700 thousand and provision for audit in the amount of PLN 71 thousand. 23 Trade creditors and other Short-term in PLN thousand 31/12/ /12/2015 a) to related parties Trade creditors Liabilities from purchase of shares and increase of shares in related companies 1,200-1,

72 b) to other entities Trade creditors 46,808 47,498 Liabilities from taxes, insurances, excluding income tax liability 79,475 41,296 Advances for purchase of goods and services 78, Remuneration-related liabilities Accruals Factoring-related liabilities Liabilities from purchase of shares Other liabilities ,211 90, ,490 90, Financial instruments Classification of financial instruments Assets As of 31 December 2016 in PLN thousand Loans and Receivables Financial assets at fair value through financial result Hedging instruments Cash Total Assets according to the statement of financial position a) Fixed assets Other investments 1, ,160 (without shares) Other receivables 8, ,615 a) Current assets - Receivables and other current 194, ,959 assets (other than advances and receivables from taxes) Financial derivatives 4,594-4,594 Other investments (without shares) ,153 73

73 Cash and cash equivalents (excluding cash on hand) ,355 47,355 Total 205, ,594 47, ,83 As of 31 December 2015 in PLN thousand Loans Financial Cash Total and assets at fair receivabl value through es financial result Assets according to the statement of financial position a) Fixed assets Other investments (without shares) 1, ,396 Other receivables 12, ,277 a) Current assets Receivables and other current assets (other than advances and receivables from taxes) Other investments (without shares) Cash and cash equivalents (excluding cash on hand) 80, , ,430 5,430 Total 94, , ,613 Total liabilities Liabilities As of 31 December 2016 in PLN thousand Financial liabilities measured at depreciated cost Financial liabilities measured at fair value by the financial Total result Liabilities according to the statement of financial position a) Non-current liabilities 74

74 Liabilities from credits, loans and other debt instruments (excluding financial lease liabilities) 23,756-23,756 Financial lease liabilities 4,494-4,494 b) Short-term liabilities Liabilities from credits, loans and other debt instruments (excluding financial lease liabilities) 3,200 7,160 10,360 Overdrafts 204, ,092 Financial lease liabilities 2,491-2,491 Factoring-related liabilities Trade creditors and other (excluding regulatory liabilities) , ,015 Total 365,048 7, ,208 As of 31 December 2015 in PLN thousand Financial liabilities measured at depreciated Financial liabilities at fair value through financial result Total cost Liabilities according to the statement of financial position a) Long-term liabilities Liabilities from credits, loans and other debt instruments (excluding financial lease liabilities) 15,434-15,434 Financial lease liabilities 4,167-4,167 b) Short-term liabilities Liabilities from credits, loans and other debt instruments (excluding financial lease liabilities) Financial lease liabilities 1,923-1,923 Overdrafts 19,912-19,912 Trade creditors and other (excluding regulatory liabilities) 49,588-49,588 Total 91, ,833 75

75 Loans and receivables include loans granted, trade and other receivables (net of taxes and advances) and cash and cash equivalents. Financial liabilities measured by depreciated cost method include overdrafts, liabilities from credits, loans, and other debt instruments, trade and other liabilities (excluding tax liabilities). Financial instruments measured at fair value Fair value Details of fair value of financial instruments for which it can be estimated are as follows: Cash and cash equivalents, short-term bank deposits, short-term bank credits and overdrafts: the carrying value of the aforementioned instruments is close to their fair value due to the rapid maturity of these instruments. Trade receivables and other receivables, trade creditors and other liabilities, and prepayments and accruals: the book value of the aforementioned instruments is close to their fair value due to their short-term nature. Investments in investment funds: fair value is based on the market price resulting from listing. Derivatives: fair value is based on the market price resulting from listing, if it is available. If the market price resulting from the current listing is not available for the instrument, then the fair value is determined by discounting the difference between the contract price and the current price of the instrument, taking into account the maturity of the contract. Liabilities from credits, loans and other debt instruments: the book value of the aforementioned instruments is close to their fair value due their versatile nature of interest. Hedge accounting In 2016, the Company in relation to diesel began using hedge accounting of its fair value and cash flows against the risk of foreign exchange rate changes and price changes of goods. Hedging instruments that are used to hedge the Company against the risk of changes in currency exchange rates are forward foreign exchange contracts and futures contracts. Derivatives shall be reported as assets or financial liabilities, depending on their current value. The Company also uses the opportunity of natural hedging through the application of hedge accounting to loans in US dollars, liabilities in US dollars, and also to loans in US dollars, designating them as hedging instruments against the risk of exchange rate changes related to the future revenues of the Company from the sale of diesel fuel. Changes in the fair value of derivative instruments not complying with the principles of hedge accounting, are recognised directly in the result of the current reporting period. 76

76 At the inception of a hedge, the Company formally determines and documents the hedging relationship, a risk management objective and strategy for establishing the hedge according to the adopted hedge accounting policy. The profits or losses resulting from changes in the fair value of hedge instruments which do not meet the conditions for the application of hedge accounting principles are directly recognised in the result of the current reporting period. For used cash flow hedges amounts that had been recognised directly in equity are recognised in profit or loss in the same period or periods during which the hedged forecast transaction affects profit or loss, i.e. when projected sale occurs. Cash flow hedge is recognised as follows: - profits or losses from the fair value measurement of hedging instruments, in part considered efficient hedge is recognised under revaluation reserve, - ineffective portion of profit or loss on the hedging instrument is recognised in revenue or financial costs of the reporting period, Profits or losses resulting from changes in the fair value of hedge instruments which do not meet the conditions for the application of accounting principles are directly recognised in the net financial result of the current period, as revenue or financial costs. For cash flow hedges the amounts that had been recognised directly in revaluation reserve are recognised in profit or loss in the same period or periods during which the hedged forecast transaction affects profit or loss, i.e. when projected sale occurs. Cash flow hedges hedging the currency risk The company sets the items of receivables, liabilities, bank credits and fx forward, futures contracts, as hedging instruments in cash flow hedging. For hedge accounting purposes, only instruments concluded with an external party in relation to the Company are recognized as hedging instruments. HEDGING INSTRUMENTS IN USD Instrument Nominal value Fair Expected type in USD thousand value PLN in duration of hedged item's thousand realisation 31/12/ /12/ /12/ /12/ /12/ /12/2015 Futures 1,099-4,594 - March

77 The main financial risks to which the Company is exposed regarding its business: market risks (including the risk of changes in currency exchange rates, the risk of changes in fair value or cash flows as a result of changes in interest rates and the risk of price changes), credit risk and liquidity risk. Understanding the threats which have their source in the Company's exposure to risk, proper organisational structure and procedures allow for better implementation of tasks. The company constantly identifies and makes the measurement of financial risk, as well as it take measures to minimise its impact on the financial situation. Market risk By the market risk to which the Company is exposed, the possibility of negative impact on the results of the Company resulting from changes in exchange rates, market prices of goods and interest rates, is understood. The Company actively manages the market the risk to which it is exposed. The main objectives of the risk management process are: to limit the volatility of the financial result, to increase the likelihood of implementation of the budget assumptions, to reduce the likelihood of loss of liquidity. All the market risk management objectives should be dealt with together, and their performance is dependent primarily on the domestic situation in the Company and market conditions. The main technique of market risk management are hedging strategies using derivatives. The Company utilises an integrated approach to the market risk management to which it is exposed. An example are hedging transactions on commodity and currency markets that are closely associated with the contracts concluded on the market and are implemented by an existing Hedging Department of the Company. Exchange rate change risk With regard to the risk of changes in the exchange rate the following types of exposure are identified: - transactional exposure on volatility of the value of cash flows in the functional currency. The source of the transactional exposure to foreign exchange risk are contracts resulting in cash flows of which the functional currency is dependent on future levels of exchange rates of foreign currencies against the functional currency. The key source of transactional exposures to foreign exchange risk is the revenue from the sale of goods. - The balance sheet exposure relating to the variation of the values of selected items of the statement of financial position in the functional currency. The source of the balance sheet exposure to currency risk are the items of the statement of financial position in foreign currencies which under applicable accounting principles are subject to conversion on the basis of the current exchange rate of a foreign currency relative to the functional currency in connection with the settlement or periodic measurement. The balance sheet exposure applies in particular to: receivables and liabilities denominated in foreign currencies, financial liabilities from debts in foreign currencies, cash in foreign currencies. The Company applies the procedure for exchange rate hedging for calculated prices and margins of goods bought and sold in different currencies. The company uses forward contracts and SWAPs for all asset and liability items in full subject to the exchange rate change risk. These are the simplest, but also the most effective tools allowing for the minimisation of the risk of exchange rate fluctuations since the purchase of goods until their sale for transactions in different currencies. 78

78 Exposure to currency risk The company's exposure to currency risk was as follows: DATA ON BALANCES IN FOREIGN CURRENCIES AGAINST OTHER UNITS As of 31 December 2016 in PLN thousand in EUR in USD other currencies Total Trade receivables and other receivables 3, ,907 Cash 4,054 6,784-10,838 Liabilities from credits, loans and other debt instruments (463) (6,615) - (7,078) Trade creditors and other (1,277) (8,691) - (9,968) Exposure to currency exchange rate on foreign currency balances 6,279 (7,580) - (1,301) As of 31 December 2015 in PLN thousand in EUR in USD other currencies Total Trade receivables and other receivables 5, ,867 Cash 508 2,536-3,044 Liabilities from credits, loans and other debt instruments (2,741) (15,737) - (18,478) Trade creditors and other (1,187) (4,046) (8) (5,241) Exposure to currency exchange rate on foreign currency balances 1,717 (16,517) (8) (14,808) Sensitivity analysis of financial instruments denominated in foreign currencies against exchange rate change Weakening/strengthening of the functional currency by 15% relative to other currencies as of 31 December 2016 would cause (decrease)/increase in equity and the financial result by values described below. The analysis was carried out on the assumption that all other variables, in particular interest rates, remain unchanged. The analysis for 2015 was carried out in the same way. 79

79 IMPACT OF FOREIGN EXCHANGE RATE DIFFERENCES FOR THE ENDING PERIOD: in PLN thousand Profit/ (loss) Rate increase by 15% Rate decrease by 15% 31/12/2016 (195) /12/2015 (2,221) 2,221 SENSITIVITY ANALYSIS OF DERIVATIVES TO EXCHANGE RATE CHANGE As of 31 December 2016, the Company had derivative instruments in foreign currencies sensitive to the change of exchange rates, not covered by the hedging accounting policy in the values as shown below (in PLN thousand): Transaction denomination EUR PLN sale 3,824 EUR USD PLN sale 1,536 USD EUR USD purchase 524 EUR EUR PLN increase by 15% (2,190) PLN EUR PLN decrease by 15% 2,189 PLN USD PLN increase by 15% (871) PLN USD PLN decrease by 15% 1,305 PLN The above foreign exchange (FX) transactions are included on the basis of sale and purchase contracts of goods measured in foreign currencies. These are the typical hedge transactions closely linked with hedging of exchange rates. in PLN thousand Profit / (loss) Rate increase by 15% Rate decrease by 15% 31/12/2015 (121) 121 As of 31 December 2015, the Company had derivative instruments in foreign currencies sensitive to the change of exchange rates in the amount of USD 190 thousand Price risk The company has no equity securities classified as available-for-sale or measured at fair value through the financial result, which are exposed to price risk. The company operating its activities relating to purchase of liquid fuels in Poland and abroad is exposed to risks associated with the lack of price stability which in turn can affect the Company's results. Change in prices on the world markets has also effects on the domestic market and, therefore, upon the sale of goods would generate a loss. 80

80 The Company secures the risk of price changes of goods with appropriate hedge transactions, securing the price of a product. With this end in view, the Company uses commercially available hedging instruments, i.e. futures contracts. Interest rate risk The interest rate risk is a possibility of adverse influence of changes in interest rates on the Company's results. The Company in 2016 was exposed to this type of risk in connection granting of loans and use of external sources of financing. Working with a number of financial institutions, the Company constantly monitors the level of interest rates always negotiating the margin level of a bank or other financial institution for included products subject to the interest rate. The Company acts similarly with the interest rates on loans granted by the Company. VULNERABILITY PROFILE (MAXIMUM EXPOSURE) OF THE COMPANY RELATING TO THE RISK OF INTEREST RATE CHANGES in PLN thousand 31/12/ /12/2015 Fixed rate instruments Financial assets 2,038 1,396 Financial liabilities (26,956) (15,434) (24,918) (14,038) in PLN thousand 31/12/ /12/2015 Floating rate instruments Financial assets - - Financial liabilities (49,437) (26,811) - (49,437) (26,811) Interest rate change risk on fair values and cash flow The company has no significant interest-bearing financial assets, therefore the Company's revenue and cash flow from operating activities are largely independent of changes in market interest rates. The Company is more vulnerable to the risk of interest rates from loans and credits. The loans granted with variable interest rate expose the Company to the risk of interest rates from cash flow. 81

81 Sensitivity analysis of financial instruments with variable interest rate on changes in market interest rates (Decrease)/increase in interest rate by 150 bp at the reporting date would increase (reduce) equity and financial result by the amount presented in the following table. The analysis was carried out on the assumption that all other variables, in particular currency exchanges, remain unchanged. The analysis for 2015 was carried out in the same way. IMPACT OF INTEREST RATE CHANGE FOR THE ENDING PERIOD: in PLN thousand Financial result Increase by 1.5% Decrease by 1.5% 31/12/2016 (742) /12/2015 (402) 402 Credit risk The credit risk is the possibility of incurring by the Company financial loss as a result of failure to comply with the obligations by debtors of the Company. The credit risk is mainly associated with the credit reliability of the customers with whom physical transactions for the sale of goods are concluded, with the reliability of the credit financial institutions (banks/brokers) with which hedge transactions are concluded or who mediate in the conclusion of such transactions, as well as those in which free cash is invested, and also with the financial standing of borrowers subsidiaries. The credit risk is associated in particular with trade receivables, derivative instruments, cash and bank deposits, granted loans, granted guarantees and warranties. The Company deposits its free cash and cash equivalents in financial institutions with high credit scores. The credit risk, therefore, is continuously monitored through analysis of credit ratings and limitation of the level of concentration of the cash in individual financial institutions. For many years the company has been working with a large number of customers which affects the geographical diversification of trade receivables. The Company limits the exposure to the credit risk associated with the trade receivables by evaluating and monitoring the financial standing of its contractors, setting credit limits, as well as through the internal reporting system. The Company also insures all the receivables, in 2016, the receivablesrelated insurances were conducted by Atradius Credito Caucion S.A. and KUPEG uverova pojisćovna, a.s., S.A. No significant concentration of credit risk occurred until the reporting date. The book value of each financial asset represents the maximum exposure to credit risk. 82

82 MAXIMUM EXPOSURE TO CREDIT RISK in PLN thousand 31/12/ /12/2015 Loans 2,038 1,396 Receivables 203,574 93,177 Financial assets at fair value through financial result Cash and cash equivalents (excluding cash on hand) 47,355 5, , ,613 TRADE RECEIVABLES INSURED AGAINST CREDIT RISK in PLN thousand 31/12/ /12/2015 from non affiliated entities 121,973 70,947 AGE STRUCTURE OF TRADE RECEIVABLES AND OTHER RECEIVABLES FROM RELATED PARTIES in PLN thousand 31/12/ /12/2015 Unexpired Overdue 2, days days days days 1, Over 365 days - - 2, Impairment in PLN thousand 31/12/ /12/2015 Non-overdue Overdue 1-30 days days days (79)

83 days Over 365 days - (79) (79) Net value in PLN thousand 31/12/ /12/2015 Unexpired Overdue 2, days days days days 1,069 - Over 365 days - - 2, INCREASES AND DECREASES OF WRITE-DOWNS OF TRADE RECEIVABLES AND OTHER RECEIVABLES FROM RELATED ENTITIES: in PLN thousand 01/01/ /12/ /01/ /12/2015 Opening balance as of 1 January (79) (79) Setting-up - (79) Use - - Dissolution 79 - Closing balance as of 31 December - (79) AGE STRUCTURE OF TRADE RECEIVABLES AND INTEREST RECEIVABLES FROM OTHER ENTITIES Gross value in PLN thousand 31/12/ /12/2015 Unexpired 153,493 67,008 84

84 Overdue 27,042 10, days 26,307 9, days days days 42 6 Over 365 days ,535 77,148 Impairment in PLN thousand 31/12/ /12/2015 Unexpired (45) (37) Overdue (435) (369) 1-30 days (24) (63) days (3) (29) days (105) (30) days (42) (6) Over 365 days (261) (241) (480) (406) Net value in PLN thousand 31/12/ /12/2015 Unexpired 153,448 66,971 Overdue 26,607 9, days 26,283 9, days days days - - Over 365 days ,055 76,742 INCREASES AND DECREASES OF WRITE-DOWNS OF TRADE RECEIVABLES AND OTHER RECEIVABLES FROM OTHER ENTITIES: in PLN thousand 01/01/ /12/ /01/ /12/

85 Opening balance as of 1 January (406) (272) Setting-up (1,074) (605) Use Dissolution Closing balance as of 31 December (480) (406) As of 31/12/2016 the trade receivables in the amount of PLN 153,448 thousand were not overdue, or impaired (31/12/2015 PLN 66,971 thousand). As of 31/12/2016 the trade receivables in the amount of PLN 26,607 thousand (31/12/2015: PLN 9,771 thousand) were overdue, but no impairment was found. These receivables relate mainly to customers with whom the Company has cooperated for many years. As of 31/12/2016 the trade receivables in the amount of PLN 480 thousand (31/12/2015: PLN 406 thousand) were overdue and impairment was found, therefore in 2016 they were subject to write-off in the amount of PLN 480 thousand (2015: PLN 406 thousand). As of 31/12/2016 the trade receivables in the amount of PLN 45 thousand were not overdue, but their impairment was found due to the difficult financial situation of the customers (31/12/2015: PLN 37 thousand). Liquidity risk The liquidity risk is a risk of occurrence of lack of repayment possibility by the Company of its financial liabilities at their maturity. The Company takes measures to ensure a stable and effective financing of activities. The maturity analysis of financial liabilities together with interest payments: a) to related parties As of 31 December in PLN thousand Balance sheet value Contracted cash flow value up to 1. month from 1. month up to 3. month from 3. month up to 1. year from 1. year up to 5 years Financial liabilities Financial lease liabilities Overdrafts Other interest-bearing liabilities Trade creditors and other (excluding income tax liabilities) 3,200 3, , ,279 1,279 1, ,479 4,506 1,590 2,

86 As of 31/12/2015 in PLN thousand Balance sheet value Contracted cash flow value up to 1. month from 1. month up to 3. month from 3. month up to 1. year from 1. year up to 5 years Financial liabilities Financial lease liabilities Overdrafts Other interest-bearing 3,512 3, ,655 liabilities Trade liabilities (excluding income tax liabilities). 3,750 4, ,655 b) to other entities As of 31 December in PLN thousand Balance sheet value Contracted cash flow value up to 1. month from 1. month up to 3. month from 3. month up to 1. year from 1. year up to 5 years Financial liabilities Financial lease 6,985 7, ,080 4,693 liabilities Overdrafts 204, , ,092 Other interest-bearing 30,916 31,414 5,145 3, ,321 liabilities Trade 125, , liabilities 125,736 other (excluding income tax liabilities). 87

87 367, , ,176 4,008 2,432 27,014 As of 31 December in PLN thousand Balance sheet value Contracted cash flow value up to 1. month from 1. month up to 3. month from 3. month up to 1. year from 1. year up to 5 years Financial liabilities Financial lease 6,090 6, ,599 4,376 liabilities Overdrafts 19,912 19,912 19, Other interest-bearing 12,731 13,154 1, ,131 liabilities Trade 49,350 49,350 49, liabilities and other (excluding income tax liabilities) 88,083 88,925 70, ,599 16,507 Capital management In order to maintain the ability to continue its business activities, taking into account implementation of the planned investments, the Company manages the capital in such a way so that while managing the capitals it is able to generate a return for shareholders and ensure future growth. The Company monitors the capital profitability ratios and equity to liabilities ratios. 25 Contingent liabilities The company has following the contingent liabilities: Guarantees 1. Unimot S.A. holds a payment guarantee No. GW/000765/16 issued by BNP Paribas Bank Polska S.A. in the amount of PLN thousand of which the beneficiary is Kopalnia Wapienia Czatkowice Sp. z o.o. 2. Unimot S.A. holds a payment guarantee No issued by Bank Millennium S.A. in the amount of PLN thousand of which the beneficiary is Gas Transmission Operator GAZ-SYSTEM S.A. 3. Unimot S.A. holds a payment guarantee No issued by Bank Millennium S.A. in the amount of PLN thousand of which the beneficiary is Polska Spółka Gazownictwa Sp. z o.o. 88

88 4. Unimot S.A. holds a payment guarantee No issued by Bank Millennium S.A. in the amount of PLN thousand of which the beneficiary is Operator Logistycznych Paliw Płynnych Sp. z o.o. 5. Unimot S.A. holds a payment guarantee No issued by Bank Millennium S.A. in the amount of PLN 1, million of which the beneficiary is Operator Logistycznych Paliw Płynnych Sp. z o.o. 6. Unimot S.A. holds a payment guarantee No issued by Bank Millennium S.A. in the amount of PLN 5.20 million of which the beneficiary is Tesla Sp. z o.o. 7. Unimot S.A. holds a bank guarantee No. CRD/G/ issued by Reiffeisen Bank Polska S.A. in the amount of PLN million of which the beneficiary is the State Treasury represented by the Head of the Tax Office of Opole in Opole. 8. Unimot S.A. holds a bank guarantee No KOT14 issued by mbank S.A. in the amount of PLN million of which the beneficiary is the President of the Energy Regulatory Office. 9. Unimot S.A. has an insurance guarantee No issued by Sopockie Towarzystwo Ubezpieczeń Ergo Hestia S.A. in the amount of PLN 6.00 million of which the beneficiary is the Head of the Customs Office in Pruszków. 10. Unimot S.A. holds a bank guarantee No issued by Bank Millennium S.A. in the amount of PLN million of which the beneficiary is the President of the Energy Regulatory Office. 11. Unimot S.A. holds a bank guarantee No. CRD/G/ issued by Reiffeisen Bank Polska S.A. in the amount of PLN 4.50 million of which the beneficiary is the State Treasury represented by Grupa Lotos S.A. 12. Unimot S.A. holds a bank guarantee No. CRD/G/ issued by Reiffeisen Bank Polska S.A. in the amount of PLN million of which the beneficiary is the Head of the Customs Office in Opole. 13. Unimot S.A. holds a bank guarantee / stand-by letter of credit No ZPA16 issued by mbank S.A. in the amount of PLN million of which the beneficiary is GLENCORE ENERGY UK LTD. Sureties 1. Unimot S.A. has a surety issued by Unimot Express Sp. z o.o. for Millennium Bank S.A. for multi-product line agreement for the amount of PLN million. 2. Unimot S.A. issued a surety for Raiffaisen Bank S.A. in respect of the debt limit for PZL Sędziszów S.A. in the amount of PLN 1.30 million. 3. Unimot S.A. issued a surety for Bank Spółdzielczy w Płońsku for an investment credit for Unimot System Sp. z o.o. for the amount of PLN 3.30 million. 4. Unimot S.A. together with Unimot Express Sp. z o.o. issued a surety for Coface to the Non-recourse Factoring Agreement for PZL Sędziszów S.A. for the amount of PLN 3.00 million. 5. Unimot S.A. issued a surety for Orzesko-Knurowski Bank Spółdzielczy z/s w Knurowie in respect of the Investment Credit Agreement for Blue LNG sp. z o.o. for the amount of PLN 1.37 million. 89

89 6. Unimot S.A. issued a surety for Orzesko-Knurowski Bank Spółdzielczy z/s w Knurowie in respect of the Working Capital Credit Agreement for Blue LNG sp. z o.o. in the amount of PLN thousand. Avals 1. Unimot S.A. together with Blue Line Engineering S.A. backed a bill for Spółdzielczy Bank Rozwoju w Szepietowie in respect of the Investment Credit Agreement for Polskie Przedsiębiorstwo Gazownicze Warszawa Sp. z o.o. in the amount of 1.85 million. 2. Unimot S.A. backed a bill for Bank Gospodarstwa Krajowego in respect of the Investment Credit and Revolving Working Capital Credit Agreement for Unimot System Sp. z o.o. in the total amount of PLN 7.00 million. 3. Unimot S.A. issued an aval of the blank promissory note for Orzesko-Knurowski Bank Spółdzielczy z/s w Knurowie in respect of the Investment Credit Agreement for Blue LNG sp. z o.o. for the amount of PLN 1.37 million. 4. Unimot S.A. issued an aval of the blank promissory note for Orzesko-Knurowski Bank Spółdzielczy z/s w Knurowie in respect of the Revolving Credit Agreement for Blue LNG sp. z o.o. for the amount of PLN million. 5. Unimot S.A. issued an aval of the blank promissory note for Millennium Leasing Sp. z o.o. from the leasing contract for Energogas Sp. z o.o. amounting to PLN million. 26 Related party transactions Clearing balance as of 31/12/2016 Name of entity: Receivables Liabilities Received Granted Advances loans loans for in PLN thousand deliveries - Unimot Express Sp.z o.o. - parent - Unimot System Sp. z o.o. - subsidiary - Blue LNG Sp. z o.o. - subsidiary - Blue Cold Sp. z o.o. - subsidiary - PPGW Sp. z o.o. - subsidiary - tankuj24.pl Sp. z o.o. - subsidiary 93-3, ,

90 - Energogas Sp. z o.o. - subsidiary - Energogas Sp. z o.o. S.K.A. - subsidiary - Tradea Sp. z o.o. - subsidiary - Blue Line Engineering S.A. - related entity - PZL Sędziszów S.A. (affiliate of Unimot Express Sp. z o.o.) 314 1, Unimot Truck S.A. (related entity of Unimot Express Sp. z o.o.) - Zemadon Limited (related entity of Unimot Express Sp. z o.o.) ,563 1,279 3,200 2,009 2 Clearing balance as of 31/12/2015 Name of entity: in PLN thousand Receivables Liabilities Received loans Granted loans - Unimot Express Sp.z o.o. - parent , Unimot System Sp. z o.o. - subsidiary Blue LNG Sp. z o.o. - subsidiary Blue Cold Sp. z o.o. - subsidiary ,087 - PPGW Sp. z o.o. - subsidiary tankuj24.pl Sp. z o.o. - subsidiary Energogas Sp. z o.o. - subsidiary Energogas Sp. z o.o. S.K.A. - subsidiary Blue Line Engineering S.A. - related entity PZL Sędziszów S.A. (affiliate of Unimot Express Sp. z o.o.)

91 - Unimot Truck S.A. (related entity of Unimot Express Sp. z o.o.) - Zemadon Limited (related entity of Unimot Express Sp. z o.o.) ,512 1,396 Revenue from intra-group transactions for the period 01/01/ /12/2016 Name of entity: in PLN thousand Goods sale revenue Services sale revenue Reinvoinces Other operating revenue Financial revenue - Unimot Express Sp.z o.o. - parent Unimot System Sp. z o.o. - subsidiary Blue LNG Sp. z o.o. - subsidiary Blue Cold Sp. z o.o. - subsidiary 1, PPGW Sp. z o.o. - subsidiary tankuj24.pl Sp. z o.o. - subsidiary Energogas Sp. z o.o. - subsidiary Energogas Sp. z o.o. S.K.A. - subsidiary Tradea Sp. z o.o. - subsidiary Blue Line Engineering S.A. - related entity PZL Sędziszów S.A. (affiliate of Unimot Express Sp. z o.o.) - Unimot Truck S.A. (related entity of Unimot Express Sp. z o.o.) - Zemadon Limited (related entity of Unimot Express Sp. z o.o.) , Revenue from intra-group transactions for the period 01/01/ /12/2015 Name of entity in PLN thousand Goods sale revenue Services sale revenue Other operating revenue Financial revenue 92

92 - Unimot Express Sp.z o.o. - parent Unimot System Sp. z o.o. - subsidiary Blue LNG Sp. z o.o. - subsidiary Blue Cold Sp. z o.o. - subsidiary PPGW Sp. z o.o. - subsidiary tankuj24.pl Sp. z o.o. - subsidiary Energogas Sp. z o.o. - subsidiary Energogas Sp. z o.o. S.K.A. - subsidiary Blue Line Engineering S.A. - related entity PZL Sędziszów S.A. (affiliate of Unimot Express Sp. z o.o.) - Unimot Truck S.A. (related entity of Unimot Express Sp. z o.o.) - Zemadon Limited (related entity of Unimot Express Sp. z o.o.) Costs from intra-group transactions for the period 01/01/ /12/2015 Name of entity: in PLN thousand Purchase of materials and goods Purchase of services Other operating costs Financial costs - Unimot Express Sp.z o.o. - parent Unimot System Sp. z o.o. - subsidiary Blue LNG Sp. z o.o. - subsidiary Blue Cold Sp. z o.o. - subsidiary PPGW Sp. z o.o. - subsidiary tankuj24.pl Sp. z o.o. - subsidiary Energogas Sp. z o.o. - subsidiary Energogas Sp. z o.o. S.K.A. - subsidiary Tradea Sp. z o.o. - subsidiary

93 - Blue Line Engineering S.A. - related entity - PZL Sędziszów S.A. (affiliate of Unimot Express Sp. z o.o.) - Unimot Truck S.A. (affiliate of Unimot Express Sp. z o.o.) - Zemadon Limited (related entity of Unimot Express Sp. z o.o.) , Costs from intra-group transactions for the period 01/01/ /12/2015 Name of entity: Purchase of materials Purchase of Other operating costs Financial costs in PLN thousand - Unimot Express Sp.z o.o. - parent and goods 766 services Unimot System Sp. z o.o. - subsidiary Blue LNG Sp. z o.o. - subsidiary Blue Cold Sp. z o.o. - subsidiary PPGW Sp. z o.o. - subsidiary tankuj24.pl Sp. z o.o. - subsidiary Energogas Sp. z o.o. - subsidiary Energogas Sp. z o.o. S.K.A. - subsidiary Blue Line Engineering S.A. - related entity PZL Sędziszów S.A. (affiliate of Unimot Express Sp. z o.o.) - Unimot Truck S.A. (related entity of Unimot Express Sp. z o.o.) - Zemadon Limited (related entity of Unimot Express Sp. z o.o.)

94 27 Employment The average level of full-time employment 01/01/ /12/2016 Female Male Total White-collar employees Blue-collar employees The average level of full-time employment 01/01/ /12/2016 Female Male Total White-collar employees Blue-collar employees Gross wages and salaries in the period in PLN thousand 01/01/ /12/2015 Company's Management Board Company s Supervisory Board Remuneration of the statutory auditor or the entity authorised to audit financial statements, paid or payable for the fiscal year in PLN thousand 01/01/ /12/ /01/ /12/2015 Obligatory annual financial statement audit Obligatory annual consolidated financial statement audit

95 29 Explanatory note to the cash flow statement 01/01/ /12/ /01/ /12/2015 Change of state of receivables resulting from the statement of financial position (113,625) (63,267) Change in receivables from interest receivables (3) 3 Change in receivables from share issue 102 Change in receivables from hedging instruments (873) - Change in receivables from investment receivables 6 - Change in receivables in cash flow statement (114,495) (63,162) Change in liabilities resulting from the statement of financial position 123,812 60,354 Change in lease liabilities (895) (288) Change in investment liabilities 22 (43) Change in share purchase liabilities (905) (295) Change in liabilities in cash flow statement 122,034 59, Events after the reporting day On 11 January 2017 the Financial Supervision Authority approved the Company s Prospectus. On 31 January 2017 Unimot S.A. made the capital increase by 6,000 shares of PLN 500 each in the Unimot System Sp. z o.o. Company, and as a result the equity of Unimot System Sp. z o.o. increased by PLN 3,000 thousand. The percentage share of Unimot S.A in Unimot System Sp. z o.o. increased from 51% to 58.74%. On March 2, 2017, the Management Board of the Warsaw Stock Exchange adopted resolutions on change on the quotation market for existing shares of the Company by allowing them to trade on the main market of the Warsaw Stock Exchange on March 7,

96 On March 7, 2017, the District Court in Opole, VIII Commercial Division of the National Court Register, registered the increase of the share capital of Unimot S.A. by PLN 2,200 thousand. As a result of the registration, the share capital of the Company was increased from PLN 5,832 thousand to PLN 8,032 thousand by issuing 2,200 thousand ordinary bearer Class J shares within a public offering of the nominal value of PLN 1 each and the total nominal value of PLN 2,200 thousand. As a result of the public offering of Series J shares the Company obtained financial resources in the amount of net PLN 96,622 thousand. Zawadzkie, 28 April 2017 President of the Management Board Robert Brzozowski Vice-President of the Management Board Marcin Zawisza Reporting person Małgorzata Walnik Member of the Management Board Małgorzata Garncarek 97

97 MANAGEMENT BOARD S REPORT ON THE ACTIVITIES OF THE COMPANY 4.1 Description of the Company Background Full name UNIMOT Spółka Akcyjna Registered office Zawadzkie Address ul. Świerklańska 2a, Zawadzkie Telephone address gielda@unimot.pl Website address Object of business activity Gaseous and liquid fuels trading Legal status Joint-stock company Share capital at the balance The share capital (core) of the Issuer amounts to PLN 5,831, sheet date 31 December 2016 Number of all shares: 5,831,797 Nominal value of shares: PLN 1 Series A 100,000 registered shares, Series B 600,000 registered shares, Series C - 2,400,000 ordinary bearer shares Series D - 103,797 ordinary bearer shares Series E - 400,000 ordinary bearer shares Series F - 400,000 ordinary bearer shares Series G - 400,000 ordinary bearer shares Series H - 400,000 ordinary bearer shares Series I - 1,028,000 ordinary bearer shares Share capital at the publication date of this report 28 April 2017 Share capital (core) of the Issuer amounts to PLN 8,031, Number of all shares: 8,031,797 Nominal value of shares: PLN 1 Series A 100,000 registered shares, Series B 600,000 registered shares, Series C - 2,400,000 ordinary bearer shares Series D - 103,797 ordinary bearer shares Series E - 400,000 ordinary bearer shares Series F - 400,000 ordinary bearer shares Series G - 400,000 ordinary bearer shares Series H - 400,000 ordinary bearer shares Series I - 1,028,000 ordinary bearer shares Series J - 2,200,000 ordinary bearer shares KRS [National Court Register] District Court in Opole, VIII Commercial Division of the National Court Register as KRS number REGON [National Business NIP [Tax Identification No] Time for which the company has Not limited been created 97

98 Shareholders structure Shareholders structure at the balance sheet date 31/12/2016: Shareholder Share in Share in Number of shares Number of votes capital % votes % Unimot Express Sp. z o.o. 3,454, % 3,804, % Zemadon Limited 1,572, % 1,922, % Moka Consulting S.L. 160, % 160, % Ingenieria Comercializacion De La Gas 160, % 160, % Others 484, % 484, % Total 5,831, % 6,531, % 2.75 % 2.75 % 8.31 % UMIMOT EXPRESS ZEMADIN LIMITED % % MOKA CONSULTING SL INCOGAS OTHERS Already after the balance sheet date in Q Unimot SA completed the process of issuing new shares and debuted on the regulated market of the WSE. On March 7, 2017, the District Court in Opole, VIII Commercial Division of the National Court Register, registered the increase of the share capital by PLN 2,200,000. As a result of the registration, the share capital of the Issuer was increased from PLN 5,831,797 to PLN 8,031,797 by issuing 2,200,000 ordinary bearer Class J shares within a public offering of the nominal value of PLN 1 each and the total nominal value of PLN 2,200,000. Shareholders structure at the publication date of this report (after public issue of Series J shares Shareholder Share in Share in Number of shares Number of votes capital % votes % Unimot Express Sp. z o.o. 3,454, % 3,804, % Zemadon Limited 1,572, % 1,922, % Moka Consulting S.L. 160, % 160, % Ingenieria Comercializacion De La Gas 160, % 160, % Others 2,684, % 2,684, % Total 8,031, % 8,731, % 1.99 % 1.99% % % % UMIMOT EXPRESS ZEMADIN LIMITED MOKA CONSULTING SL INCOGAS OTHERS SEPARATE ANNUAL 98

99 Object of business activity UNIMOT S.A. Company (Issuer) specializes in gaseous and liquid fuels trading. The Company's activity covers the following areas: Fuels The Company operates in the scope of wholesale of diesel oil intended for cars with diesel engines and wholesale and retail sale of fuels. Biofuels The Company s assortment includes bioesters (biodiesels) intended for vehicles with diesel engines, constituting a self-contained fuel. In comparison with the traditional diesel oil, with a view to its properties, biofuels contribute to a considerable reduction of emission of harmful substances, as well as greenhouse gas. The reduction of emmission applies both to the production process, as well as to the fuel use. Liquified petroleum gas (a liquid mixture of propane and butane) The company operates in the scope of wholesale of liquid gas directly from the bottling plant in Zawadzkie, as well as from transhipment terminals. the company provides distribution of liquid gas adjusted to various needs and intended purposes of LPG: for heating, municipal, industrial, propelling (car gas) purposes. Natural gas (including LNG - Liquefield Natural Gas) The company operates in the scope of natural gas trading and distribution through POLPX and own distribution networks History of the Company The company operates under the name UNIMOT S.A. The registered office of the Company is Zawadzkie, ul. [street] Świerklańska 2a. The Company operates as a joint stock company, established by a notarial deed on January 14, 2011, before Magdalena Królak-Pojnar, a notary public, in Częstochowa (Repertory A No. 167/2011). It was registered in the business register maintained by the District Court in Opole, VIII Commercial Division, under KRS number , pursuant to the order of 29 March The traditions of UNIMOT S.A. date back to 1992 and are based on the relationships and experiences of Unimot Express - a specialist in liquid fuel trade. The Company's activities in the Liquefied Petroleum Gas (liquified propane-butane) sector are based on a gas bottling plant located in Zawadzkie, Opolskie Voivodeship and the experience gained in the LPG sector from Gaz-Zaw (the LPG segment of this company was incorporated into the Unimot Express Sp. z o.o. Company in 2003). Over time, the Company has become one of the largest suppliers of car gas in southern Poland, offering LPG to customers from its own gas bottling plant in Zawadzkie. The Company also conducts direct (domestic and foreign) wholesale from external handling terminals located in different parts of the country. As a result of the dynamic development of Unimot Express in this sector, UNIMOT S.A. was separated The activity of UNIMOT SA was launched in 2011 under the name UNIMOT GAZ S.A. In June 2011 an in-kind contribution in the form of gas bottling plant in Zawadzkie was provided by Unimot Express Sp. z o.o. On April 27, 2012, the Ordinary General Meeting of UNIMOT S.A. adopted a resolution to increase the Company's share capital through the issue of Series D shares. 100

100 Shortly after, the Company obtained a license from the Energy Regulatory Office for trading in liquid fuels. The year after, in September 2012, UNIMOT S.A. debuted on the NewConnect market, placing on the market 2,400,000 series C shares and 103,797 series D shares from the new issue. In 2013, the Company started implementation of a project of trading in natural gas. The first step was to obtain the necessary permits and to acquire foreign investors who bought 5.00% of shares each in the Company's share capital at that time: MOKA CON SULTING S.L. oraz INGENIERÍA Y COMERCIA LIZACI ÓN DEL GAS, S.A. ( INCOGA S ). INCOGAS has extensive experience in natural gas trading, including LNG (Liquefied Natural Gas), while MOKA is a specialist in oil and gas industry consultancy. The next step in the development of the Issuer's development strategy in the natural gas sector was the establishment of cooperation with Blue Line Engineering S.A., a company with experience in the domestic market, as well as the infrastructure necessary for the development of this business. In 2014, UNIMOT S.A. developed dynamically, exploiting new opportunities in the energy sector. The Company engaged in the liberalization process of the natural gas market, including acquiring and expanding distribution networks, launching natural gas liquefaction installation and several LNG regasification installations. In addition, the Company expanded its offer by wholesale of diesel oil and focused its operations on liquid fuels. In the fourth quarter of 2014 the Company took over the profitable part of Unimot Express Sp. z o.o. - a specialist in the distribution of liquid fuels, thus extending the geographic reach of its business. In the same period the name UNIMOT GAZ S.A. was officially changed to UNIMOT S.A. which was to emphasize the multienergetic nature of the Company's offer. In the fourth quarter of 2015, UNIMOT S.A. acquired 100% of shares in Energogas Sp. z o.o. which holds, among others, electricity trading license. Whereas, in the second quarter of 2016, UNIMOT S.A. acquired 100% of shares in Tradea Sp. z o.o. which also holds, among others, electricity trading license. These companies are developing electricity sales as a part of implementation of the multi-energy sales offer strategy. In 2016, the Company continued its LPG trading activity in all its existing business lines, trading in biofuels and biooils and natural gas through its subsidiaries, and began trading in electricity also through its subsidiaries. The largest dynamic development of the business was in the wholesale of diesel with the use of acquired profitable part of Unimot Express Sp. z o.o. UNIMOT S.A. geographically expanded its offer in this area by successive increase of the number of fuel bases offering diesel throughout the country (at the moment of preparing this report these are 12 bases). Already after the balance sheet date in the first quarter of 2017 UNIMOT successfully completed the process of issuing new shares and debuted on the regulated market of the WSE. On March 7, 2017, the District Court in Opole, VIII Commercial Division of the National Court Register, registered the increase of the share capital of UNIMOT S.A. by PLN 2,200,000. As a result of the registration, the share capital of the Company was increased from PLN 5,831,797 to PLN 8,031,797 by issuing 2,200,000 ordinary bearer Class J shares within a public offering of the nominal value of PLN 1 each and the total nominal value of PLN 2,200,000. Series J shares were offered under the Public Offering on the basis of the Prospectus of UNIMOT S.A. approved by the PFSA on 11 January 2017 and published on 12 January As a result of the public offering of series J shares, the Company raised funds in the amount of PLN 96.6 million (net of issue costs). Series J shares were introduced to trading on the regulated market by the WSE Management Board by resolution No. 187/2017 with effect from 7 March At the same time, Series C, D, E, F, G, H shares (by now listed on the NewConnect market) and Series I shares were introduced to trading on the regulated market. The shares are listed in the continuous trading system under the abbreviated name of UNIMOT and UNT symbol Bodies of the Company As of 31 December 2016 and as at the date of this report preparation the composition of the Management Board is as follows: 100

101 RROBERT BRZOZOWSKI - PRESIDENT OF THE MANAGEMENT BOARD Robert Brzozowski is a graduate of the University of Gdansk. In 2016 he graduated from the prestigious BI Norwegian Business School, earning the title of Executive Master of Business Administration in the field of energy. In the years he served as the Director of Trade and Marketing of ORLEN Morena Sp. z o.o., and for the next 2 years he held the office of Commercial Director of LOTOS Marine. With the UNIMOT Group he has been associated since 2008 as the coordinator of international fuel trade. In UNIMOT S.A. he was responsible, among others, for the project of wholesale diesel sale. On August 25, 2014, he assumed the position of Member of the Management Board and the Company's Commercial Director. From October 27, 2015, Robert Brzozowski is the President of the Management Board of UNIMOT S.A. MARCIN ZAWISZA - VICE-PRESIDENT OF THE MANAGEMENT BOARD Marcin Zawisza is a graduate of the Warsaw School of Economics and the School of Banking and Insurance [now Vistula University]. He completed postgraduate studies in logistics management, and was awarded the MBA title at GFKM and Erasmus Rotterdam School of Business. Marcin Zawisza worked, among others, at the Shell Group in the chemical segment, and in at Shell Gas Polska Sp. z o.o. as the Regional Supply Chain Director for Eastern Europe. Since 2010 he has been dealing with the wholesale of refinery products of PKN Orlen S.A., initially by co-creating the Analysis and Wholesale Trading Strategy Office at the Group of Companies. Then from 2012, for more than 3 years, he was the President of the Management Board of Orlen Gaz Sp. z o.o., where he was responsible, among others, for creating and implementing the Group's strategy in the area of the LPG market. In May 2016, Marcin Zawisza became the Director of Development of UNIMOT S.A., and since July 25, 2016, he has served as the Member of the Management Board of UNIMOT S.A. as the Vice-President of the Company. MAŁGORZATA GARNCAREK - MEMBER OF THE MANAGEMENT BOARD Małgorzata Garncarek is a graduate of the Cracow University of Economics. She graduated from postgraduate studies at the University of Economics in Katowice and at the Częstochowa University of Technology. She has now started her studies at the CIMA Institute of Management Accounting. She has worked with the UNIMOT Group since 2004, initially as the Controlling Specialist, then as the Head of the Finance and Administration Department, and as the Financial Director of Unimot Express Sp. z o.o. Since 2012 Małgorzata Garncarek has been the Financial Director of UNIMOT S.A. Since August 25, 2014, Małgorzata Garncarek has served as the Member of the 101

102 Management Board of UNIMOT S.A. 102

103 As of 31 December 2016 and as at the date of this report compilation the composition of the Supervisory Board is as follows: ADAM SIKORSKI - CHAIRMAN OF THE SUPERVISORY BOARD Co-founder of the Group of Companies UNIMOT (1992), the President of the Board of Unimot Express Sp. z o.o. since the beginning of the company, the President of the Management Board of Unimot Truck Sp. z o.o. (since 1999), the Director of UC Energy Ltd in Nicosia (since 2010), the Chairman of the Supervisory Board of UNIMOT S.A. (since 2011). In 2015, he assumed the position of President of the Management Board of PZL Sędziszów S.A. - a company related with the UNIMOT Group, and in 2016 he became the President of the Board of the Polish Automotive Group. Adam Sikorski graduated from the Executive MBA studies in 2011 and in 2013 received a diploma of the Executive Doctor of Business Administration at the Institute of Economic Sciences of the Polish Academy of Sciences in Warsaw. He is also a graduate of International Economic Relations at the Polonia University in Częstochowa. ISAAC QUERUB - MEMBER OF THE MANAGEMENT BOARD A citizen of Spain, a graduate of the Universidad Pontificia de Comillas in Madrid. From he was the CEO and Member of the Management Board of Glencore España S.A. S.A. - a company operating in the sector of oil, metals and minerals in Spain, the Middle East and Africa. Since 2003, has been the partner of Andria Inversiones Inmobiliarias S.A., engaged in real estate trading, and Incogas S.A., related to trade in liquefied natural gas. During the period of , as a co-founder of the company Moka Consulting S.A., he developed a strategy focusing on African countries, producing liquid natural gas, and in the years was a member of the Advisory Committee of the Portuguese company Iberiapremium SGPS. From 2013, is the partner of Consejos y Estrategias Técnicas y Empresariales SL which deals with business consultancy, and the member of the Supervisory Board of the Swiss company Bluequest Resources AG, related with trade in metals and minerals. In the years Isaac Querub was the President of the Jewish Community in Madrid and since 2011 he has been the President of the Federation of Spanish Jewish Communities. He is also a Member of the Supervisory Board of the University of Tel Aviv and the President of Yad Vashem in Spain. In 2007 he was awarded with the Prince of Asturias Award, and in 2012, with the Moroccan order Ouissam Alaouite. 103

104 RYSZARD BUDZIK, PH.D. - MEMBER OF THE SUPERVISORY BOARD Specialist for Organization and Management, a certificated appraiser (national license No. 2519, bank license No. 1874/XXXIII/01), a Member of the Silesian Association of Appraisers. Holds the academic title of Professor, awarded by the President of the Republic of Poland. Between he worked as a technologist in Zakłady Górniczo-Hutnicze in Sabinów. Since 1972 he has been associated with the Technical University of Częstochowa - initially as a researcher, then occupying senior positions of several faculties, now as the head of the Faculty of Production Management. Since 2010 he has also served as a lecturer and the Head of the Logistics Faculty at the Technical University of Opole. Prof. Budzik is also a Lecturer at the School of Management and Banking in Bielsko- Biała on postgraduate studies to the supervisory boards. Among his numerous publications there is more than 200 studies on Polish enterprises for privatization and ownership transformations for the Ministry of Treasury and Provincial Offices, as well as more than 20 studies on restructuring of Polish companies. PIOTR CIEŚLAK - MEMBER OF THE MANAGEMENT BOARD A graduate of the University of Economics in Poznań, specialising in Investment and Real Estate Management. For several years directly responsible for the development of the Legal Department of the Association of Private Investors. The author of the comments, statements and publications relating to broadly taken issues of the capital market, the author of the independent analytical reports on companies making their debuts on the WSE. In the years he was the Director of Analysis and the Principal Analyst of the Association of Private Investors. Since 2008 he serves as the Vice-President of the Board of the Association of Private Investors. Piotr Cieślak does not conduct any activity that would be competitive in relation to the Issuer. He is neither a partner in a competitive civil law partnership or a partnership, nor a member of a corporate body or a member of any other competitive legal entity. 104

105 BOGUSŁAW SATŁAWA - MEMBER OF THE SUPERVISORY BOARD Graduated from the Technical University of Kiev, and Technical University Częstochowa. In 2005 he graduated from the Management School WIFI in Austria. Between Bogusław Satława served as the Managing Director of Unimot- Truck Sp. z o.o. Over the next two years he was the Managing Director in Domex Sp. z o.o., and in in Luxplast Sp. j. In the years he was an Adviser to the Management Board of Schultz Seating Poland Sp. z o.o. During the he served as the President of the Management Board of GFD Polskie Druty Sp. z o.o. and Edexpol Sp. z o.o. Sułkowice. From July 2013 to August 2014, Bogusław Satława served as the President of the Management Board of UNIMOT S.A., and in the years he was the President of the Management Board of the PZL Sędziszów S.A. From 2013 up to the present he has been a Member of the Management Board of Unimot Express Sp. z o.o. PIOTR PRUSAKIEWICZ - MEMBER OF THE SUPERVISORY BOARD A graduate of the Technical University of Szczecin. In 2000 he completed postgraduate studies in management and marketing, and in 2004, Executive MBA in the International Management Centre of the University of Warsaw and the University of Illinois. Between Piotr Prusakiewicz was associated with Rafineria Trzebinia S.A., where initially he served as a specialist technologist, then the Head of Production, Director of Production, and for the last 5 years he was a Member of the Managment Board. Then, in the years , he was the Deputy Director of the Business Entity in SARPI Dąbrowa Górnicza SP. z o.o. In addition, during the period of Piotr Prusakiewicz was a member of CEN WG24/TF FAME at the European Standardisation Organisation and a Member of the Subcommittee for Fuels of the Technical Committee No. 222 at the Polish Standardisation Committee (until 2013). From 2012 until now Peter Prusakiewicz has operated as an individual entrepreneur in consultancy, including technique and chemical technology in the area of: liquid fuels, liquid biofuels and environmental protection. 105

106 4.2 Market environment LIQUID FUELS Introduction in the year 2016 of so-called fuel and energy package and the intense action of the customs services and the Treasury have resulted in a significant increase in official market of liquid fuels in Poland in the second half of the year. There has been an increase in the official demand for all major products, of which the largest percentage and volume increase occurred for diesel. For all types of motor fuels (motor gasoline, diesel and car gas), the market increased by 13% compared to 2015 and the entire liquid fuel market by 12%. Despite the still present gray and black markets on the diesel market, the official consumption of diesel fuel increased by 15% compared to The share of official imports in the supply of this market reached 26%, i.e. increased by 10 percentage points compared to the previous year. For years, liquefied petroleum gas (LPG) was the biggest item regarding fuel imports in Poland, but in 2016 it was dethroned by diesel. Total official domestic consumption of 6 liquid fuel types exceeded 29 million m³ and was 3.1 million m³ higher than the consumption in The official market growth amounted to 12%, where imports increased by 34%, and its share in entire market was estimated at 31%. This means that officially the imports of fuel to Poland was higher by 2.3 million m³ than in the previous year. The share of foreign fuel in the market supply was by 5 percentage points higher than in 2015, and the total import of liquid fuels was 9.1 million m³. As expected, the average annual price of motor gasoline and diesel oil in 2016 was lower than in A litre of petrol 95 was on average PLN 0.27 cheaper and of diesel PLN 0.36 cheaper than in This is the fourth year in a row when the fuels became cheaper. (source: Report of POPiHN for 2016). BIOFUELS In 2016, the minimum level of biocomponents introduced to the market (National Indicative Target), to which fuel producers and importers were obliged, was maintained in 2015 level and amounted to 7.1% by calorific value. (source: Report of POPiHN for 2016) was another successful year in terms of biocomponent production results. More methyl esters and ethanol were produced in each quarter than in the previous year. The total volume of biocomponents produced in 2016 was 1,071,992 t, i.e. more by 15.7% than in 2015 (source: Agricultural Development Agency). According to the data from the Agricultural Development Agency, methyl esters are produced almost in 100% of rapeseed oil. The basic raw material for the production of bioethanol is maize with a share of 77%. The most important half-products in 2016 include starch C, agricultural distillate and ethyl alcohol. Poland, as one of the main producers of rapeseed in the EU, has been declining in harvest for several years now. In 2014, the rapeseed harvest amounted to 3.3 million tons, while in 2016 it is estimated at 2.2 million tons. This has implications on the price of this plant. In 2016, historical maximums of average prices of these products on the domestic market were recorded. 106

107 On the B100 wholesale market, the constant relationship between clean bioester and diesel prices were maintained for the next year in a row. Over the whole year, the difference in fuel prices of BIO100 and diesel in PKN Orlen's offer was maintained at the level of PLN 50 (source: Polish Fuel Market ) Liquefied Petroleum Gas (LPG) In 2016, the LPG sector recorded an increase in domestic consumption by 4.9% compared to Domestic LPG production increased by 17.3%, representing 18.6% of domestic demand for LPG. Therefore, as in previous years, in 2016, the Polish market was based on deliveries from Russia, Kazakhstan and Belarus - in total 83.4% of total deliveries. It should also be added that after the re-launch of the maritime terminal in Gdynia, the import of LPG by sea to Poland increased considerably. The segmental structure of the LPG market in 2016 did not change significantly compared to The share of car gas in the entire market increased by 1.1% to reach the level of 76%. It should be noted, however, that the price ratio of this fuel to petrol 95 for most of the year was at a level that did not discourage the purchase of car gas. Despite this, the total sales of car gas amounted to 1,790 thousand tons in 2016, which means an increase by 5.9% YoY. The share of cylinder segment was at the level of 12.1%, while the sale of gas to the tanks constituted 11.9% of the total LPG sale in Poland. In 2016, 3,780 new tanks were installed, resulting in a total volume of LPG tanks at the end of the year of 94,880. Gas sales to the tanks amounted to 280 thousand tons, i.e. by 5.7% more than in Rock-bottom supply prices increased the interest in this product for heating purposes. Due to the environmental advantages of LPG, there are opportunities for the development of the market for car gas as well as the use of this product for heating in the coming years (source: Report the Polish LPG Association for 2016). NATURAL GAS In 2016, the trading volume amounted to TWh, up by 7% compared to the previous year. It is worth emphasizing that this year was not only better than the previous one, but has been also the best since the beginning of the gas market on the POLPX. The product that had the largest share in the volume of sales was invariably the annual product, this time with delivery in This would not have been possible, however, if it was not for the significant 90% increase in the trading volume on the Gas Day-Ahead Market compared to In 2016, the total volume of trading on the Gas Commodity Derivatives Market amounted to 89.9 TWh. In terms of the previous year, it was a 3% drop. The average price for all Gas Commodity Derivatives Market products, weighted by the volume of trading, was PLN 73.66/ MWh. The best month in terms of the trading volume was November. The total volume of transactions on the stock market this month amounted to 12.3 TWh. The weakest month was July, when only 3.7 TWh was contracted (source: Innogy Annual Report 2016). At the end of 2016, 197 companies had a license to trade in gaseous fuels, while 127 companies were actively involved in trading natural gas. 107

108 Analysis of the data collected by the TSO (OGP GAZ-SYSTEM S.A.), Polska Spółka Gazownictwa Sp. z o.o., as well as other distribution system operators indicates a continuation of the initiated in the 3rd quarter of 2014 dynamic growth of the change of vendor in the segment of customers from W1-4 tariff groups, that is mainly among households. In 2014, more than 7 thousand cases of gas vendor change were recorded, in more than 30 thousand, whereas at the end of 2016 there were already more than 78 thousand. (source: Energy Regulatory Office, Liberalisation of the gas market). ELECTRICITY According to the data from PSE (Polskie Sieci Elektroenergetyczne S.A.), the annual demand for electricity in 2016 was TWh and was higher by nearly 3.0 TWh, i.e. about 1.85% in relation to the year This translated into annual average growth in time at 340 MW. The largest gain over the previous year was recorded in December and in June (respectively: 876 and 481 GWh). The declining months were only May and July (respectively: 49 and 80 GWh). National electricity consumption is correlated with GDP growth and gradually increases. In recent years, this increase amounted to 1.7% for the year 2015 and 1.97% for the year 2016 (GDP respectively 3.9% and 3%). The demand for electricity in Poland is covered mainly by coal- and lignite-fired power plants which in total provided close to 81% of the national needs in 2016 (as compared to the year 2015, a decrease of 2.1 percentage points). In the energy mix gradual growth of renewable sources is noticeable. This segment is dominated by wind energy. Currently, the power of operating wind turbines is at 5,700 MW. In 2016, the growth of production of electrical energy generated by windmills in respect to the year 2015 was 16%, reaching 11,623 GWh. Significant changes in the structure of production of electricity are noticeable also in the segment of gas sources. In 2016, the production of electricity based on fuel gas increased by about 38%, reaching the level of 5,776 GWh, inter alia by launch of a new gas and steam block of 463 MW power in Włocławek in In the year 2016 Poland was an importer of energy. Negative balance of foreign exchange amounted to 1,999 GWh, about 1.2% of national consumption. Imports were mainly from Sweden, and to a lesser extent from: Lithuania, Ukraine, Germany, Czech Republic and Slovakia. Imports were determined by the price of energy on wholesale markets, which often was lower than domestic prices (cheap hydroelectric power plants in Sweden, large generation of wind and photovoltaic power plants in Germany). In 2016, the average price per hour on the Day-Ahead Market on the Polish Power Exchange, i.e. IRDN24 index, amounted to PLN 159.2/MWh. This means an increase of PLN 2.2/MWh, i.e. 1.4% year-on-year. For peak hours (7 a.m p.m. on working days) RDN8.22 index amounted to PLN 197.5/MWh and this was an increase of PLN 10.8/MWh, i.e. 5.8% compared to the year 2015 (source: Innogy Annual Report 2016). 108