Enea S.A. — Audit Report / Information 2021

Mar 24, 2022

Consolidated report on payments to public administration in 2021

Poznań, Date of approval and publication: 23 March 2022

Consolidated report on payments to public administration in 2021

ENEA Group operations

There are seven leading entities within ENEA Group which manage the individual areas of operations, i.e.:

• ENEA S.A. (parent entity in the ENEA Group) electricity and gas trading
• ENEA Operator Sp. z o.o. electricity distribution
• ENEA Wytwarzanie Sp. z o.o., ENEA Elektrownia Połaniec S.A. and ENEA Nowa Energia Sp. z o.o. generation and sale of electricity and heat
• ENEA Trading Sp. z o.o. wholesale electricity trading
• LW Bogdanka S.A. (LW Bogdanka) coal production

The other entities within ENEA Group render ancillary activities in relation to the aforesaid companies.

In ENEA Group, the mining operations are performed by its subsidiary, LW Bogdanka. The mining activities are performed by LW Bogdanka based on its own mining licences issued by the Minister of the Climate and Environment (formerly, Minister of the Climate).

Due to the fact that within LW Bogdanka Group the mining operations are performed exclusively by LW Bogdanka, payments to the public administration made by this entity correspond to total payments made for this purpose within LW Bogdanka Group, and also payments made for this purpose within ENEA Group.

Basis of preparation

This consolidated report on payments to public administration has been prepared in accordance with § 61 of Regulation of the Finance Minister of 29 March 2018 n current and periodic information provided by issuers of securities and on conditions under which information required by legal regulations of a third country may be recognised as equivalent, in connection with Chapter 6a, Articles 63e-63j of the Accounting Act ("the Act").

ENEA Group companies do not pursue any business activity within the primary forest logging on the area of primary forests.

Due to the fact that ENEA S.A. is not an entity which operates in the mining sector and is not an entity engaged in primary forest logging, the Issuer does not prepare any non-consolidated report on payments to public administration.

Coal mining in ENEA Group

In ENEA Group, the mining operations are performed by its subsidiary, LW Bogdanka.

The entity's primary line of business, according to the Polish Classification of Business Activity, is hard coal mining (PKD 0510Z).

LW Bogdanka is a parent for four subsidiaries performing supporting mining operations:

• Łęczyńska Energetyka provides services for the mine within supply of heat energy and performs water and sewage management. Additionally, the company supplies heat energy to external entities such as housing developments and other objects in Łęczna. The company operates also within the construction works and repairs of heating, water supply and sewage installations
• EkoTRANS Bogdanka provides services for the mine related to the transport, treatment and disposal of waste created by flushing and cleaning of coal output and reclamation services
• RG Bogdanka Sp. z o.o. provides services for the mine mainly related to the performance of mining and auxiliary works, as well as to the handling of haulage
• MR Bogdanka provides services for the mine related to renovations, repair and construction works, performance of works in underground machine divisions, regeneration and production of steel structures

Scope of mining operations

The individual areas of operations in the Mining Area include:

• bituminous coal production
• bituminous coal sale
• securing the resource base for ENEA Group

Bogdanka mine is located in the Central Coal Region (CCR) in the north-eastern part of the Lublin Coal Basin, which is identified to the largest extent. Geographically, the Central Coal Region is within Lublin Polesie (Polesie Lubelskie) boundaries, and just small parts are located in Lublin Upland (Wyżyna Lubelska). As regards the administration, Bogdanka mine is located in the Lublin Province (Lubelskie), within the area of Puchaczów municipality.

The mining activities are performed by LW Bogdanka based on its own mining licences issued by the Minister of the Climate and Environment (formerly, Minister of the Climate).

Mining area and production potential

Principles adopted on the preparation of the consolidated report on payments to public administration

Pursuant to Article 63e item 6 of the Act, the payment shall mean the amount paid, in cash or in kind, from the operations mentioned in Article 63e item 1 or 2, in respect of :

• production receivables
• taxes collected from income, production or corporate profits, excluding tax on consumption, such as tax on goods and services, personal income tax or sales tax
• royalties
• dividends
• licence fees and bonuses for discovery or production
• licence fees, lease charges, fees for commencement of operations and other provisions due to licence granting
• payments for infrastructural improvement

In this Consolidated report on payments to public administration, the following purposes were included:

The purpose of payment defined in Article 63e of the Act	In respect of tax and charges qualified by the Group for the given purpose of payment mentioned in the Act
Taxes collected from income, production or corporate profits, excluding tax on consumption, such as tax on goods and services, personal income tax or sales tax	Corporate income tax - CIT Excise tax
Licence fees and bonuses for discovery or production	Fees for mining use
Licence fees, lease charges, fees for commencement of operations and other provisions due to licence granting	Service charge Fees for perpetual usufruct of land Fee for using paid-for geological information

Payments to public administration in 2021

All the payments resulting from the mining operations were made only for the account of the public administration in Poland. No payments were made to any public administration authority of any other country.

The said payments were made by LW Bogdanka, however, due to the fact that within ENEA Group the mining operations are performed exclusively by LW Bogdanka, the payments to public administration by this entity correspond to the total payments for this purpose within ENEA Group.

The amounts presented in this Consolidated report constitute the value of cash transfers made in 2021 to public administration bodies in Poland for particular purposes, decreased by any potential returns received.

All the payments were made in cash, i.e. no payments in kind were made.

Based on Article 63f item 2 of the Act, this Consolidated Report contains the following information:

• total amount of payments to national public administration broken down into payments made for the relevant public administration levels
• total amount of payments to the relevant levels of national public administration broken down into titles indicated in Article 63e item 6 of the Act

In 2021, the payments to public administration bodies were not attributed to any particular projects.

Payments to public administration in 2021 by entity

Specification	2021 [PLN k]	2020 [PLN k]
Government administration:	98 715	27 331
Tax Office	85 585	13 973
Ministry of the Climate and Environment	6 164	6 966
National Fund for Environmental Protection and Water Management	6 942	6 352
Tax Office in Nowy Targ	24	40
Local government administration:	35 654	41 303
Municipality Councils	35 246	40 895
County Councils	408	408
TOTAL	134 369	68 634

Payments to public administration in 2021 by title

Specification	2021 [PLN k]	2020 [PLN k]
Government administration:	98 715	27 331
Taxes collected from income, production or corporate profits (excluding tax on goods and services, personal income tax or sales tax)	85 609	14 013
Licence fee and bonus for discovery and production	1 221	695*
Licence fee, lease charge, fee for commencement of operations and other provisions due to licence granting	11 855	12 623*
Local government administration:	35 654	41 303
Licence fee, lease charge, fee for commencement of operations and other provisions due to licence granting	35 654	41 303
TOTAL	134 369	68 634

* The amounts presented in these line items have been adjusted compared to the amounts presented in the consolidated statement of payments to public administration authorities in 2020. The reason for the adjustment is the incorrect presentation of mining usufruct payments for the total amount of PLN 642 thousand in the line item "License fees, lease fees, startup fees and other fees for obtaining a license or concession" instead of in the line item "Concession fees and bonus for discovery and production".

Signatures of the Management Board

The date of approval for publication and publication of the Consolidated report on payments to public administration in 2021

• 23 March 2022

President of the Management Board	Paweł Szczeszek
Vice-President of the Management Board for Commercial Affairs	Tomasz Siwak
Vice-President of the Management Board for Corporate Affairs	Tomasz Szczegielniak
Vice-President of the Management Board for Operational Affairs	Marcin Pawlicki
Vice-President of the Management Board for Financial Affairs	Rafał Marek Mucha
Vice-President of the Management Board for Strategy and Development	Lech Adam Żak