Enea S.A. — Interim / Quarterly Report 2016

Nov 10, 2016

Extended consolidated quarterly report of the Enea Group for the third quarter of 2016

Poznań, 2 November 2016

Contents of the extended consolidated quarterly report

1.	Selected consolidated financial data for the period from 1 January 2016 to
	30 September 2016	3
2.	Condensed interim consolidated financial statements of the Enea Group for the period
	from 1 January 2016 to 30 September 2016	4
3.	Selected separate financial data for the period from 1 January 2016 to
	30 September 2016	41
4.	Condensed interim separate financial statements of the Enea S.A. for the period
	from 1 January 2016 to 30 September 2016	42

Selected consolidated financial data of Enea Group

		in PLN '000	in EUR '000
	9 months ended 30.09.2016	9 months ended 30.09.2015	9 months ended 30.09.2016	9 months ended 30.09.2015
Net sales revenue	8 303 944	7 150 313	1 900 738	1 719 445
Operating profit	949 142	1 046 971	217 255	251 767
Profit before tax	897 585	1 046 231	205 453	251 589
Net profit for the reporting period	720 655	837 838	164 955	201 476
Net cash flows from operating activities	1 822 395	1 345 599	417 139	323 578
Net cash flows from investing activities	(1 990 244)	(1 389 124)	(455 559)	(334 044)
Net cash flow from financing activities	328 782	2 413 310	75 257	580 332
Total net cash flows	160 933	2 369 785	36 837	569 865
Weighted average number of shares	441 442 578	441 442 578	441 442 578	441 442 578
Net earnings per share (in PLN / EUR per share)	1.53	1.89	0.35	0.46
Diluted earnings per share (in PLN / EUR per share)	1.53	1.89	0.35	0.46

	Balance as at 30.09.2016	Balance as at 31.12.2015	Balance as at 30.09.2016	Balance as at 31.12.2015
Total assets	23 616 470	22 988 996	5 476 918	5 394 578
Total liabilities	10 787 376	10 866 393	2 501 711	2 549 899
Non-current liabilities	8 667 862	8 457 838	2 010 172	1 984 709
Current liabilities	2 119 514	2 408 555	491 538	565 189
Equity	12 829 094	12 122 603	2 975 207	2 844 680
Share capital	588 018	588 018	136 368	137 984
Book value per share (in PLN / EUR per share)	29.06	27.46	6.74	6.44
Diluted book value per share (in PLN/EUR per share)	29.06	27.46	6.74	6.44

The above financial data for 3rd quarter of 2016 and 2015 were translated into EUR in line with the following principles:

• individual assets and liabilities at the average exchange rate as of 30 September 2016 – 4.3120 PLN/EUR (as at 31 December 2015 – 4.2615 PLN/EUR),
• individual items from the statement of profit or loss and other comprehensive income and the statement of cash flows – as per the arithmetic mean of the average exchange rates determined by the National Bank of Poland as at the last day of each month of the financial period from 1 January to 30 September 2016– 4.3688 PLN/EUR for the period from 1 January to 30 September 2015 – 4.1585 PLN/EUR.

Condensed interim consolidated financial statements of the Enea Group for the period from 1 January to 30 September 2016

Poznań, 2 November 2016

Condensed interim consolidated financial statements for the period from 1 January to 30 September 2016

(all amounts in PLN'000, unless specified otherwise)

Index to the condensed consolidated interim separate financial statements

	Consolidated statement of financial position 7
	Consolidated Statement of profit or loss and other comprehensive income 9
	Consolidated Statement of changes in equity 10
	Consolidated Statement of Cash Flows 12
	Explanatory notes to the condensed interim consolidated financial statements 13
1.	General information about Enea S.A. and Enea Group 13
2.	Statement of compliance 14
3.	Accounting principles 14
4.	Material estimates and assumptions 14
5.	Composition of the Group – list of subsidiaries 15
6.	Segment reporting 16
7.	Property, plant and equipment 23
8.	Intangible assets 23
9.	Non-current assets held for sale 24
	10. Allowance on trade and other receivables 24
	11. Inventory 25
	12. Certificates of origin 25
	13. Restricted cash 25
	14. Financial assets measured at fair value through profit or loss 25
	15. Loans, borrowings and debt securities 26
	16. Financial instruments 29
	17. Deferred income from subsidies, connection fees and other 30
	18. Deferred income tax 31
	19. Provisions for other liabilities and charges 31
	20. Related party transactions 33
	21. Future liabilities under contracts as at the end of the reporting period 34
	22. Contingent liabilities and proceeding before courts, arbitration or public administration bodies 34
22.1.	Guarantees and warranties 34
22.2.	Pending proceedings before courts of general jurisdiction 35
22.3.	Motions for settlements of not balanced energy trading in 2012 35
22.4.	Dispute with PGE GiEK S.A. concerning energy origin certificate prices 36
	23. The participation in the construction of the atomic power plant programme 36
	24. Dividend 36
	25. Agreement of acquisition of Eco-Power Sp. z o.o. 37
	26. Essential information which could potentially affect the financial result of the Group 37
26.1.	Signing of a Letter of Intent with Energa S.A. concerning the construction and use of a power
	unit at the Ostrołęka Power Plant 37
26.2 .	Submitting a preliminary offer for the purchase of EDF assets in Poland with partners 38
26.3 .	Submitting an offer for the purchase of 100% shares of ENGIE Energia Polska S.A. 38
26.4.	Signing of a Letter of Intent relating to the preliminary interest in the financial involvement
	in Katowicki Holding Węglowy S.A 38
	27. Changes in the Supervisory Board 38
	28. Events after the end of the reporting period 38

Condensed interim consolidated financial statements for the period from 1 January to 30 September 2016 (all amounts in PLN'000, unless specified otherwise)

These condensed interim consolidated financial statements have been prepared in accordance with International Financial Reporting Standard IAS 34 Interim Financial Reporting, as endorsed by the European Union (EU), and approved by the Management Board of Enea S.A.

Members of the Management Board

President of the Management Board	Mirosław Kowalik	………………………………
Member of the Management Board	Piotr Adamczak	…………………………………
Member of the Management Board	Mikołaj Franzkowiak	…………………………………
Member of the Management Board	Wiesław Piosik	…………………………………
Enea Centrum Sp. z o.o. The entity responsible for keeping the accounting records and the preparation of financial statements …………………………………… Enea Centrum Sp. z o.o. Górecka 1 Street, 60-201 Poznań KRS 0000477231, NIP 777-000-28-43, REGON 630770227

Poznań, 2 November 2016

Condensed interim consolidated financial statements for the period from 1 January to 30 September 2016

(all amounts in PLN'000, unless specified otherwise)

Consolidated statement of financial position

		Balance as at
	Note	30.09.2016	31.12.2015
ASSETS		-	-
Non-current assets		-	-
Property, plant and equipment	7	17 911 450	17 074 978
Perpetual usufruct of land		73 570	74 160
Intangible assets	8	346 116	272 116
Investment property		24 567	20 624
Investments in subsidiaries		3 769	748
Deferred tax assets	18	400 476	616 795
Financial assets available for sale		38 982	23 982
Derivatives	15	-	844
Trade and other receivables		87 602	28 323
Cash deposits at Mine Closure Fund		101 360	90 872
		18 987 892	18 203 442
Current assets		-	-
CO2 emission rights		83 710	307 521
Inventories	11	673 166	649 509
Trade and other receivables	10	1 641 586	1 732 744
Current income tax assets		3 023	31 956
Financial assets held to maturity		477	479
Financial assets measured at fair value through profit or loss	14	223 493	222 011
Cash and cash equivalents	13	1 983 027	1 822 094
Assets held for sale	9	20 096	19 240
		4 628 578	4 785 554
Total assets		23 616 470	22 988 996

The consolidated statement of financial position should be analyzed together with the notes, which constitute an integral part of the condensed interim consolidated financial statements.

Condensed interim consolidated financial statements for the period from 1 January to 30 September 2016

(all amounts in PLN'000, unless specified otherwise)

			Balance as at
	Note	30.09.2016	31.12.2015
EQUITY AND LIABILITIES		-	-
Equity		-	-
Equity attributable to shareholders of the Parent Company		-	-
Share capital		588 018	588 018
Share premium		3 632 464	3 632 464
Financial instruments revaluation reserve		590	814
Other capital		(45 883)	(45 883)
Reserve capital from valuation of hedging instruments		(2 997)	3 980
Retained earnings		7 827 277	7 158 352
		11 999 469	11 337 745
Non-controlling interests		829 625	784 858
Total equity		12 829 094	12 122 603
LIABILITIES		-	-
Non-current liabilities		-	-
Loans, borrowings and debt securities	15	6 312 431	5 933 360
Trade and other liabilities		42 282	16 527
Finance lease liabilities		844	992
Deferred income due to subsidies, connection fees and other	17	663 737	674 682
Deferred tax liability	18	167 648	388 117
Liabilities due to employee benefits		835 364	818 772
Derivatives	15	6 042	-
Provisions for other liabilities and charges	19	639 514	625 388
		8 667 862	8 457 838
Current liabilities		-	-
Loans, borrowings and debt securities	15	114 470	43 399
Trade and other liabilities		815 250	1 223 320
Finance lease liabilities		1 177	1 025
Deferred income due to subsidies, connection fees and other	17	80 602	83 666
Current income tax liability		43 214	87 022
Liabilities due to employee benefits		339 455	397 986
Liabilities due to an equivalent of the right to acquire shares free of charge		281	281
Financial liabilities measured at fair value through profit or loss		149	-
Provisions for other liabilities and charges	19	721 224	567 556
Liabilities related to non-current assets held for sale	9	3 692	4 300
		2 119 514	2 408 555
Total liabilities		10 787 376	10 866 393
Total equity and liabilities		23 616 470	22 988 996

Condensed interim consolidated financial statements for the period from 1 January to 30 September 2016

(all amounts in PLN'000, unless specified otherwise)

Consolidated Statement of profit or loss and other comprehensive income

		9 months ended	3 months ended	9 months ended	3 months ended
	Note	30.09.2016	30.09.2016	30.09.2015	30.09.2015
Sales revenue		8 489 964	2 765 243	7 321 699	2 594 654
Excise tax		(186 020)	(60 731)	(171 386)	(56 588)
Net sales revenue		8 303 944	2 704 512	7 150 313	2 538 066
Other operating revenue		98 680	41 982	47 055	15 388
Depreciation		(830 085)	(276 134)	(558 271)	(188 337)
Costs of employee benefits		(1 074 547)	(366 053)	(679 914)	(206 441)
Consumption of materials and supplies and costs of
goods sold		(1 014 474)	(308 243)	(1 343 167)	(408 029)
Energy and gas purchase for sale		(3 046 927)	(970 692)	(2 427 563)	(822 371)
Impairment loss of non-financial non-current assets Other external services		(634 732) (449 465)	(216 654) (158 236)	(571 312) (243 265)	(190 366) (103 062)
Taxes and charges		(246 004)	(75 105)	(213 654)	(66 280)
Profit/(Loss) on sale and liquidation of property, plant
and equipment		(19 452)	(8 869)	(2 909)	(2 590)
Allowances for non-financial fixed assets		(49 352)	(7 352)	-	-
Other operating expenses		(88 444)	(20 585)	(110 342)	(43 214)
Operating profit		949 142	338 571	1 046 971	522 764
Financial expenses		(99 594)	(34 426)	(45 475)	(14 884)
Financial revenue		47 889	5 607	42 902	15 503
Dividend income		148	-	1 833	-
Profit before tax		897 585	309 752	1 046 231	523 383
Income tax	18	(176 930)	(60 323)	(208 393)	(103 815)
Net profit for the reporting period		720 655	249 429	837 838	419 568
Other comprehensive income
Items that are or may be reclassified to profit or loss: - change in fair value of financial assets available for
sale		-	-	(19 306)	2 409
- valuation of hedging instruments - other		(8 614) (224)	20 480 (290)	8 504 892	(58 400) 1 164
- income tax	18	1 637	(3 891)	2 051	10 637
Items that will not be reclassified to profit or loss:
- remeasurement of defined benefit plan		(1 297)	-	14 436	-
- income tax		247	-	(2 743)	-
Net other comprehensive income		(8 251)	16 299	3 834	(44 190)
Total comprehensive income		712 404	265 728	841 672	375 378
Including net profit:
attributable to shareholders of the Parent		675 888	233 099	836 401	420 179
attributable to non-controlling interests		44 767	16 330	1 437	(611)
Including comprehensive income:
attributable to shareholders of the Parent		670 292	249 398	840 235	375 989
attributable to non-controlling interests		42 112	16 330	1 437	(611)
Net profit attributable to shareholders of the Parent		675 888	233 099	836 401	420 179
Weighted average number of ordinary shares		441 442 578	441 442 578	441 442 578	441 442 578
Basic earnings per share (in PLN per share)		1.53	0.53	1.89	0.95
Diluted earnings per share (in PLN per share)		1.53	0.53	1.89	0.95

Condensed interim consolidated financial statements for the period from 1 January to 30 September 2016

(all amounts in PLN'000, unless specified otherwise)

Consolidated Statement of changes in equity

(a)³rd quarter 2016

	S har e l ita cap ( fac e ) lue va	lua f Rev tio a n o har l ita s e c ap	l Tot a har s e ita l cap	har S e mi pre um	l Fin cia an ins tru nts me lua tio rev a n res erv e	her Ot ita l cap	dg He ing res erv e	d Ret ain e nin ear gs	l Ca ita p rib b le t att uta o no n llin tro con g int sts ere	l Tot a ity equ
Ba lan at 01 .01 .20 16 ce as	44 1 4 43	146 57 5	58 8 0 18	3 6 32 46 4	81 4	( ) 45 88 3	3 9 80	7 1 58 35 2	784 85 8	12 122 60 3
fit for th d Ne rtin eri t p ro e r epo g p o								67 5 8 88	767 44	720 65 5
the hen Ne siv e in t o r co mp re com e					( ) 224		( ) 6 97 7	( ) 05 0 1		( ) 8 25 1
l co hen Tot siv e in a mp re com e d i he d niz io n t rec og e per her Ot					( ) 224		( ) 6 97 7	67 4 8 38 ( ) 5 91 3	44 767	2 4 04 71 ( ) 5 9 13
lan Ba at 30 .09 .20 16 ce as	44 1 4 43	146 57 5	58 8 0 18	3 6 32 46 4	59 0	( ) 45 88 3	( ) 2 99 7	7 8 27 27 7	82 9 6 25	12 82 9 09 4

Enea Group Condensed interim consolidated financial statements for the period from 1 January to 30 September 2016

(all amounts in PLN'000, unless specified otherwise)

(b)³rd quarter 2015

	No te	har S e l ita cap ( ) fac lue e v a	lua f Rev tio a n o har l ita s e c ap	l Tot a har s e l ita cap	S har e mi pre um	l Fin cia an ins tru nts me lua tio rev a n res erv e	Ot her ita l cap	dg He ing res erv e	ain d Ret e nin ear gs	Ca ita l p rib b le t att uta o llin ont no n-c ro g int sts ere	l Tot a ity equ
lan Ba at 01 .01 .20 15 ce as		44 1 4 43	146 57 5	58 8 0 18	3 6 32 46 4	34 777	( ) 45 88 3	-	7 8 04 98 9	49 648	12 06 4 0 13
fit for th Ne rtin t p ro e r epo g p	d eri o								83 6 4 01	1 4 37	83 7 8 38
the hen Ne siv e in t o r co mp re	com e					( ) 14 74 6		6 8 88	11 692		3 8 34
l co hen siv e in Tot mp re com a niz d i he io d n t rec og e per ide nds Div	e 24					( ) 14 74 6		6 8 88	84 8 0 93 ( ) 20 47 8 7	1 4 37 ( ) 5	84 1 6 72 ( ) 20 48 7 3
lan Ba at 30 .09 .20 15 ce as		44 1 4 43	146 57 5	58 8 0 18	3 6 32 46 4	20 03 1	( ) 45 88 3	6 8 88	8 4 45 60 4	51 080	12 698 20 2

Condensed interim consolidated financial statements for the period from 1 January to 30 September 2016

(all amounts in PLN'000, unless specified otherwise)

Consolidated Statement of Cash Flows

	9 months ended	9 months ended
	30.09.2016	30.09.2015
Cash flows from operating activities	-	-
Net profit for the reporting period Adjustments:	720 655	837 838
Income tax in profit or loss	176 930	208 393
Depreciation	830 085	558 271
Loss on sale and liquidation of property, plant and equipment	19 452	2 909
Impairment loss of non-financial non-current assets	49 352	-
(Gain)/Loss on disposal of financial assets	(2 420)	5 806
Interest income	(8 323)	(6 951)
Dividend income	(148)	(1 833)
Interest expense	66 825	29 761
(Gain)/loss on measurement of financial assets	-	38 454
Other adjustments	(21 455) 1 110 298	12 469 847 279
Income tax paid	(218 715)	(208 288)
Changes in working capital
CO2 emission rights	222 338	95 699
Inventory	(21 009)	(73 540)
Trade and other receivables	(98 754)	(46 181)
Trade and other liabilities	(13 975)	(204 210)
Liabilities due to employee benefits	(42 955)	(18 102)
Deferred income due to subsidies, connection fees and other	(14 245)	10 706
Non-current assets held for sale and related liabilities Provisions for other liabilities and charges	(855) 179 612	(5 885) 110 283
	210 157	(131 230)
Net cash flows from operating activities	1 822 395	1 345 599
Cash flows from investing activities	-	-
Acquisition of property, plant and equipment and intangible assets	(1 971 079)	(1 759 942)
Proceeds from disposal of property, plant and equipment and intangible assets	5 071	7 868
Acquisition of financial assets	(20 406)	(23 402)
Proceeds from disposal of financial assets	1 263	371 694
Acquisition of subsidiaries adjusted by acquired cash	(3 020)	-
Outflows to cash deposits at Mine Closure Fund	(10 488)	-
Dividends received	148	130
Interests received	8 183	8 047
Other proceeds from investing activities	84	6 481
Net cash flows from investing activities	(1 990 244)	(1 389 124)
Cash flows from financial activities	-	-
Proceeds from loans and borrowings	117 273	480 355
Proceeds from bond issue	450 000	2 240 000
Loans and borrowings repaid	(10 117)	(31 842)
Repurchase of bonds	(100 000)	-
Dividend paid to shareholders of the Parent	(1 054)	(207 478)
Payment of finance lease liabilities	(1 003)	(1 312)
Interest paid	(111 033)	(53 018)
Expenses related to future issue of bonds	(2 929)	(6 825)
Other payments from financing activities	(12 355)	(6 570)
Net cash flows from financial activities	328 782	2 413 310
Net cash flows	160 933	2 369 785
Balance at the beginning of the reporting period	1 822 094	687 316
Balance at the end of the reporting period	1 983 027	3 057 101

The consolidated statement of cash flows should be analyzed together with the notes, which constitute an integral part of these condensed interim consolidated financial statements.

Condensed interim consolidated financial statements for the period from 1 January to 30 September 2016

(all amounts in PLN'000, unless specified otherwise)

Explanatory notes to the condensed interim consolidated financial statements

1. General information about Enea S.A. and Enea Group

Name (business name):	Enea Spółka Akcyjna
Legal form:	joint-stock company
Country:	Poland
Address:	Górecka 1 Street, 60-201 Poznań
National Court Register - District Court in Poznań	KRS 0000012483
Telephone:	(+48 61) 884 55 44
Fax:	(+48 61) 884 59 59
E-mail:	enea@enea.pl
Website:	www.enea.pl
Statistical number (REGON):	630139960
Tax identification number (NIP):	777-00-20-640

The main activities of the Enea Group (the Group) are:

• production of electricity and heat (Enea Wytwarzanie Sp. z o.o., Przedsiębiorstwo Energetyki Cieplnej Sp. z o.o. in Oborniki, Miejska Energetyka Cieplna Piła Sp. z o.o., Miejskie Przedsiębiorstwo Energetyki Cieplnej Sp. z o.o. in Białystok);
• electricity trade (Enea S.A., Enea Trading Sp. z o.o.);
• distribution of electricity (Enea Operator Sp. z o.o.);
• distribution of heat (Enea Wytwarzanie Sp. z o.o., Przedsiębiorstwo Energetyki Cieplnej Sp. z o.o. in Oborniki, Miejska Energetyka Cieplna Piła Sp. z o.o., Miejskie Przedsiębiorstwo Energetyki Cieplnej Sp. z o.o. in Białystok);
• mining and agglomeration of hard coal (Lubelski Węgiel "Bogdanka" S.A. Group).

As at 30 September 2016 the shareholding structure of Enea S.A. was the following: the State Treasury of the Republic of Poland 51.50% of shares, other shareholders 48.50%.

As at 30 September 2016 the statutory share capital of Enea S.A. equaled PLN 441,443 thousand (PLN 588,018 thousand upon adoption of IFRS-EU and considering hyperinflation and other adjustments) and was divided into 441,442,578 shares.

As at 30 September 2016 the Group comprised the parent company Enea S.A. (the Company, the Parent), 13 subsidiaries and 9 indirect subsidiaries.

These condensed interim consolidated financial statements should be read together with consolidated financial statements of Enea Group for the financial year ended at 31 December 2015.

Condensed interim consolidated financial statements for the period from 1 January to 30 September 2016 (all amounts in PLN'000, unless specified otherwise)

These condensed interim consolidated financial statements have been prepared on the going concern basis. There are no circumstances indicating that the ability of Enea Group to continue as going concern may be at risk.

2. Statement of compliance

These condensed interim consolidated financial statements were prepared in accordance with International Financial Reporting Standard IAS 34 Interim Financial Reporting as endorsed by the European Union and were approved by the Management Board of Enea S.A.

The Management Board of the Parent Company has used its best knowledge as to the application of standards and interpretations as well as measurement methods and principles applicable to the individual items of the consolidated financial statements of the Enea Group in accordance with IFRS-EU as at 30 September 2016. The presented statements and explanations have been prepared using due diligence. These condensed interim consolidated financial statements have not been reviewed by a certified auditor.

3. Accounting principles

These condensed interim consolidated financial statements have been prepared in accordance with accounting policies consistent with those applied during the preparation of the most recent annual consolidated financial statements for the financial year ended 31 December 2015.

The Polish zloty has been used as the reporting currency of these condensed interim consolidated financial statements. The data in the condensed interim consolidated financial statements have been presented in PLN thousand (PLN '000), unless stated otherwise.

4. Material estimates and assumptions

The preparation of these condensed interim consolidated financial statements in accordance with IAS 34 requires that the Management Board makes certain estimates and assumptions that affect the adopted accounting policies and the amounts disclosed in the condensed interim consolidated financial statements and notes thereto. The adopted assumptions and estimates are based on the Management Board's best knowledge of the current and future activities and events. The actual figures, however, can be different from those assumed. The estimates adopted for the needs of preparation of these condensed interim consolidated financial statements are consistent with the estimates adopted during preparation of the consolidated financial statements for the previous financial year. The estimates presented in the previous financial years do not exert any significant influence on the current period.

Condensed interim consolidated financial statements for the period from 1 January to 30 September 2016

(all amounts in PLN'000, unless specified otherwise)

5. Composition of the Group – list of subsidiaries

	Company name and address	Share of Enea S.A. in the total number of votes in % 30.09.2016	Share of Enea S.A. in the total number of votes in % 31.12.2015
1.	Enea Operator Sp. z o.o. Poznań, Strzeszyńska 58 Street	100	100
2.	Enea Wytwarzanie Sp. z o.o. Świerże Górne, commune Kozienice, Kozienice 1	100	100
3.	Enea Oświetlenie Sp. z o.o. 4 Szczecin, Ku Słońcu 34 Street	100	100
4.	Enea Trading Sp. z o.o. Świerże Górne, commune Kozienice, Kozienice 1	100	100
5.	Szpital Uzdrowiskowy ENERGETYK Sp. z o.o. Inowrocław, Wilkońskiego 2 Street	100	100
6.	Enea Logistyka Sp. z o.o. Poznań, Strzeszyńska 58 Street	100	100
7.	Enea Serwis Sp. z o.o. Lipno, Gronówko 30	100	100
8.	Enea Centrum Sp. z o.o. Poznań, Górecka 1 Street	100	100
9.	Enea Pomiary Sp. z o.o. Poznań, Strzeszyńska 58 Street	100	100
10.	ENERGO-TOUR Sp. z o.o. in liquidation Poznań, Strzeszyńska 58 Street	100	100
11.	Enea Innovation Sp. z o.o. Warszawa, Jana Pawła II 25 Street	100	100
12.	Lubelski Węgiel BOGDANKA S. A. Bogdanka, Puchaczów	65,99	65,99
13.	Annacond Enterprises Sp. z o.o. Warszawa, Jana Pawła II 25 Street	61	61
14.	Przedsiębiorstwo Energetyki Cieplnej Zachód Sp. z o.o. Białystok, Starosielce 2/1 Street	1001	1001
15.	Centralny System Wymiany Informacji Sp. z o.o. Poznań, Strzeszyńska 58 Street	1003	1003
16.	Przedsiębiorstwo Energetyki Cieplnej Sp. z o.o. Oborniki, Wybudowanie 56 Street	99,911	99,911
17.	Miejskie Przedsiębiorstwo Energetyki Cieplnej Sp. z o.o. Białystok, Warszawska 27 Street	86,361	86,361
18.	Miejska Energetyka Cieplna Piła Sp. z o.o. Piła, Kaczorska 20 Street	71,111	71,111
19.	EkoTRANS Bogdanka Sp. z o.o. Bogdanka, Puchaczów	65,992	65,992
20.	RG Bogdanka Sp. z o.o. Bogdanka, Puchaczów	65,992	65,992
21.	MR Bogdanka Sp. z o.o. Bogdanka, Puchaczów	65,992	65,992
22.	Łęczyńska Energetyka Sp. z o.o. Bogdanka, Puchaczów	58,532	58,532

¹– an indirect subsidiary held through interests in Enea Wytwarzanie Sp. z o.o.

²– an indirect subsidiary held through interests in Lubelski Węgiel BOGDANKA S.A.

³– an indirect subsidiary held through interests in Enea Operator Sp. z o.o.

⁴– on 16 June 2016 Extraordinary Shareholder's Meeting of Enea Oświetlenie Sp z o.o changed the company's Deed by changing the company's address to Szczecin 71-080, Ku Słońcu 34. The change of Deed was registered in the National Court Register on 6 July 2016.

Condensed interim consolidated financial statements for the period from 1 January to 30 September 2016 (all amounts in PLN'000, unless specified otherwise)

On 13 July 2016 1 share of the company PEC Zachód Sp. z o.o. was acquired by Enea Wytwarzanie Sp. z o.o. from Enea Logistyka Sp. z o.o. Currently the only shareholder of this company is Enea Wytwarzanie Sp. z o.o.

6. Segment reporting

The management of the Company's activities is conducted by division of operations into segments, which are separated based on types of products and services offered. The Group has five operating segments:

• trade purchase and sale of electricity and gas,
• distribution electricity transmission services,
• production electricity and heat production,
• mining production and sale of coal, companies supporting the activities of the mine,
• other activities maintenance and modernization of road lighting equipment, transport, construction services, travel services, health care services.

Segment revenue is generated from sales to external clients and transactions with other segments, which are directly attributable to a given segment.

Segment costs include costs of goods sold to external clients and costs of transactions with other Group segments, which result from operations of a given segment and may be directly allocated to them.

The Group measures operating segment's financial results and assesses segment performance with EBIDTA which is operating result adjusted for depreciation and amortization.

Market prices are used in inter-segment transactions, which allow individual units to earn a margin sufficient to carry out independent operations in the market.

Condensed interim consolidated financial statements for the period from 1 January to 30 September 2016

(all amounts in PLN'000, unless specified otherwise)

Financial results by segments:

(a)Segment reporting for the period from 1 January to 30 September 2016:

	de Tra	bu D ist i ion t r	du Pro ion ct	M in ing	l l o he A t r nts seg me	l E im ina ion t s	l To ta
les Ne t s a re ve nu e	4 6 57 06 4	2 2 39 66 6	60 7 1 66	67 9 2 87	12 0 7 61	-	8 3 03 94 4
les Int nt er- seg me sa	44 3 8 98	33 87 9	1 8 50 62 1	63 4 8 16	27 4 2 28	( ) 3 2 37 44 2	-
l n les To ta et sa re ve nu e	5 1 00 96 2	2 2 73 54 5	2 4 57 78 7	1 3 14 10 3	39 4 9 89	( ) 3 2 37 44 2	8 3 03 94 4
l ex To ta p en ses	( ) 4 9 83 82 2	( ) 1 7 77 41 4	( ) 2 2 18 82 6	( ) 1 1 55 16 4	( ) 38 2 5 38	3 2 00 66 2	( ) 7 3 17 10 2
( ) f / Se it los nt g me p ro s	40 11 7 1	49 6 1 31	23 8 9 61	8 9 39 15	12 45 1	( ) 36 78 0	98 6 8 42
De iat ion p rec	( ) 55 0	( ) 36 1 3 38	( ) 18 4 1 50	( ) 27 0 76 6	( ) 19 92 8
los f n -fin l n Im air nt cia nt ets p me s o on an on -cu rre ass	-	-	( ) 42 00 0	( ) 2 7 35	-
EB ITD A	11 7 6 90	85 7 4 69	46 5 1 11	43 7 0 57	32 37 9		1 90 9 7 06
f n les % et o sa re ve nu e (g d l a d a dm Un ig Gro ini ati sts str ass ne up co en era n ve	2.3 %	% 37 .7	18 .9 %	% 33 .3	8.2 %
) ex p en ses							( ) 37 70 0
Op ing f it t era p ro							94 9 1 42
Fin t an ce cos							( ) 99 59 4
Fin inc an ce om e							47 88 9
de d i Div i n nco me							14 8
Inc e t om ax							( ) 17 6 9 30
f Ne it t p ro							72 0 6 55
S ha f n l lin ntr int sts re o on -co o g ere							44 76 7

The notes presented on pages 13-40 constitute an integral part of the condensed interim consolidated financial statements.

Condensed interim consolidated financial statements for the period from 1 January to 30 September 2016

(all amounts in PLN'000, unless specified otherwise)

(b)Segment reporting for the period from 1 July to 30 September 2016:

	de Tra	ist i bu ion D t r	du ion Pro ct	M in ing	A l l o he t r nts seg me	l im ina ion E t s	l To ta
les Ne t s a re ve nu e	1 5 17 97 2	73 2 7 41	17 5 5 50	23 8 7 22	39 52 7	-	2 7 04 51 2
les Int nt er- seg me sa	13 6 3 13	9 5 43	59 2 9 78	22 6 7 19	86 91 4	( ) 1 0 52 46 7	-
l n les To ta et sa re ve nu e	1 6 54 28 5	74 2 2 84	76 8 5 28	46 5 4 41	12 6 4 41	( ) 1 0 52 46 7	2 7 04 51 2
l ex To ta p en ses	( ) 1 5 87 1 37	( ) 4 9 00 57	( ) 69 8 1 32	( ) 40 6 85 9	( ) 12 9 8 03	1 0 45 0 73	( ) 2 3 51 33 5
( ) f / los Se it nt g me p ro s	66 91 4	16 7 3 84	70 39 6	58 58 2	( ) 3 36 2	( ) 6 73 7	35 3 1 77
De iat ion p rec	( ) 21 6	( ) 11 9 4 00	( ) 63 22 2	( ) 88 23 2	( ) 7 2 46
los f n -fin l n Im air nt cia nt ets p me s o on an on -cu rre ass	-	-	-	( ) 7 35 2	-
EB ITD A	67 13 0	28 6 7 84	13 3 6 18	15 4 1 66	3 8 84		64 5 5 82
% f n les et o sa re ve nu e (g d l a d a dm Un ig Gro sts ini str ati ass ne up co en era n ve	% 4.1	% 38 .6	% 17 .4	% 33 .1	% 3.1
) ex p en ses							( ) 60 6 14
f Op ing it t era p ro							33 8 5 71
Fin t an ce cos							( ) 34 42 6
Fin inc ce om e an							5 6 07
Inc e t om ax							( ) 60 32 3
f Ne it t p ro							24 9 4 29
fit ha l lin Pro int tro sts s re no n-c on g ere							16 33 0

Condensed interim consolidated financial statements for the period from 1 January to 30 September 2016

(all amounts in PLN'000, unless specified otherwise)

(c)Segment reporting for the period from 1 January to 30 September 2015:

	de Tra	D ist i bu ion t r	Pro du ion ct	A l l o he t r nts seg me	l im ina ion E t s	l To ta
les Ne t s a re ve nu e	3 8 99 41 3	2 2 24 60 9	89 9 5 59	12 6 7 32	-	7 1 50 31 3
les Int nt er- seg me sa	31 8 4 71	43 66 3	1 7 56 74 5	26 0 1 18	( ) 2 3 78 99 7	-
l n les To ta et sa re ve nu e	4 2 17 88 4	2 2 68 27 2	2 6 56 30 4	38 6 8 50	( ) 2 3 78 99 7	7 1 50 31 3
l ex To ta p en ses	( ) 4 1 30 83 4	( ) 1 7 64 07 7	( ) 2 1 67 94 3	( ) 1 0 13 37	2 3 61 38 3	( ) 6 0 72 48 4
( ) f / los Se it nt g me p ro s	87 05 0	50 4 1 95	48 8 3 61	15 83 7	( ) 17 61 4	1 0 77 82 9
De iat ion p rec	( ) 58 9	( ) 32 8 6 57	( ) 21 9 9 35	( ) 13 28 6
EB ITD A	87 63 9	83 2 8 52	70 8 2 96	29 12 3		1 6 57 91 0
% f n les et o sa re ve nu e (g d l a d a dm Un Gro ig sts ini str ati ass ne up co en era n ve ) ex en ses	% 2.1	% 36 .7	% 26 .7	% 7.5		( ) 30 85 8
p f Op ing it t era p ro						1 0 46 97 1
Fin t an ce cos						( ) 45 47 5
Fin inc an ce om e						42 90 2
de d i Div i nco me n						1 8 33
Inc e t om ax						( ) 20 8 3 93
f Ne it t p ro						83 7 8 38
ha f n l lin S int ntr sts re o on -co o g ere						1 4 37

Condensed interim consolidated financial statements for the period from 1 January to 30 September 2016

(all amounts in PLN'000, unless specified otherwise)

(d)Segment reporting for the period from 1 July to 30 September 2015:

	de Tra	bu D ist i ion t r	du Pro ion ct	l l o he A t r nts seg me	l E im ina ion t s	l To ta
les Ne t s a re ve nu e	1 2 83 53 2	75 0 9 23	45 9 6 27	43 98 4	-	2 5 38 06 6
les Int nt er- seg me sa	89 47 5	16 99 4	58 8 2 29	95 15 1	( ) 78 9 8 49	-
l n les To ta et sa re ve nu e	1 3 73 00 7	76 7 9 17	1 0 47 85 6	13 9 1 35	( ) 78 9 8 49	2 5 38 06 6
l ex To ta p en ses	( ) 1 3 66 65 4	( ) 59 0 0 44	( ) 70 2 4 93	( ) 13 2 6 36	78 6 6 79	( ) 2 0 05 14 8
( ) / Se f it los nt g me p ro s	6 3 53	17 7 8 73	34 5 3 63	6 4 99	( ) 3 17 0	53 2 9 18
De iat ion p rec	( ) 22 1	( ) 11 1 4 19	( ) 86 1 73	( ) 4 2 87
EB ITD A	6 5 74	28 9 2 92	41 9 2 24	10 78 6		72 5 8 76
f n les % et o sa re ve nu e (g d l a d a dm Un ig Gro sts ini str ati ass ne up co en era n ve ) ex p en ses	0.5 %	% 37 .7	40 .0 %	7.8 %		( ) 10 4 15
f Op ing it t era p ro						52 2 7 64
Fin t an ce cos						( ) 14 88 4
Fin inc an ce om e						15 50 3
Inc e t om ax						( ) 10 3 8 15
f Ne it t p ro						41 9 5 68
ha f n l lin S int ntr sts re o on -co o g ere						( ) 61 1

Condensed interim consolidated financial statements for the period from 1 January to 30 September 2016

(all amounts in PLN'000, unless specified otherwise)

Financial results by segments (cd.)

(a)Other segment reporting as at 30 September 2016:

	de Tra	ist i bu ion D t r	du ion Pro ct	in ing M	A l l o he t r nts seg me	l im ina ion E t s	l To ta
lan d e Pro ert t a uip nt p y, p n q me	15 85 1	7 7 47 59 2	7 4 80 52 3	2 7 71 78 7	30 0 8 39	( ) 41 8 6 59	17 89 7 9 33
de d o he b les Tra cei t an r re va	88 3 2 92	46 1 0 30	43 7 8 49	22 4 1 80	11 2 6 81	( ) 59 1 9 83	1 5 27 04 9
l To ta	89 9 1 43	8 2 08 62 2	7 9 18 37 2	2 9 95 96 7	41 3 5 20	( ) 1 0 10 64 2	19 42 4 9 82
fro A S SE TS lu de d nta tio ex c m s eg me n							91 48 8 4 1
lu din lan d e - i ert t a uip nt nc g p rop y, p n q me lu din de d o he b les - i tra t cei nc g an r re va							13 51 7 20 2 1 39
T OT AL : A S SE T S							23 61 6 4 70
Tra de d o he lia bi liti t an r es	40 4 6 22	28 8 2 22	24 1 1 55	21 9 6 62	0 4 46 13	( ) 8 6 51 43	76 64 5 4
d lia bi liti lu de d fro Eq uit tio nta y an es exc m s eg me n							22 85 1 0 06
lu din de d o he lia bi liti - in tra t c g an r es							92 06 8
T OT AL : E Q U ITY AN D L IAB ILI TIE S							23 61 6 4 70
for he h p d e de d 3 be io Se t 9-m t 0 tem r 2 01 6 on er p n
l ex dit for b le a d i b le fix d a Ca ita i i ta nta ts p p en ure ng n ng e sse for fix Ca l ex dit b le a d i b le d a lu de d ita ta i nta i ts p p en ure ng n ng e sse exc fro nta tio m s eg me n	22 6	66 8 7 87	93 8 3 31	21 4 8 35	56 05 2	( ) 44 84 1	1 8 33 39 0 -
d a De iat ion rtiz ati p rec an mo on	55 0	36 1 3 38	18 4 1 50	27 0 7 66	19 92 8	( ) 8 0 63	82 8 6 69
d a lu de d fro De iat ion rtiz ati tio nta p rec an mo on ex c m s eg me n							1 4 16
( ) o / de /u liza f re b les l low Re nit ion nit ion ti tio cei cog rec og n va a an ce	2 3 69	3 0 36	1 8 46	2 7 74	( ) 25 8	74 5	10 51 2

The notes presented on pages 13-40 constitute an integral part of the condensed interim consolidated financial statements.

Condensed interim consolidated financial statements for the period from 1 January to 30 September 2016

(all amounts in PLN'000, unless specified otherwise)

(b)Other segment reporting as at 31 December 2015:

	de Tra	ist i bu ion D t r	du ion Pro ct	M in ing	A l l o he t r nts seg me	l im ina ion E t s	l To ta
Pro lan d e ert t a uip nt p y, p n q me	18 52 1	7 4 86 88 1	6 7 66 08 0	2 88 9 3 67	28 9 2 40	( ) 38 7 8 61	17 06 2 2 28
de d o he b les Tra t cei an r re va	91 1 5 60	45 3 4 46	40 1 8 67	23 2 1 43	10 5 7 22	( ) 47 4 7 67	1 6 29 97 1
l To ta	93 0 0 81	7 9 40 32 7	7 1 67 94 7	3 12 1 5 10	39 4 9 62	( ) 86 2 6 28	18 69 2 1 99
lu de d fro A S SE TS tio nta ex c m s eg me n							4 2 96 79 7
lu din lan d e - i ert t a uip nt nc g p rop y, p n q me							12 0 75
lu din de d o he b les - i tra t cei nc g an r re va							1 0 96 13
T OT AL : A S SE T S							22 98 8 9 96
de d o he lia bi liti Tra t an r es	22 9 2 34	42 9 4 74	47 3 8 41	19 7 4 20	20 9 9 24	( ) 42 9 1 26	1 1 10 76 7
d lia bi liti lu de d fro Eq uit tio nta es exc m s eg me y an n							21 87 8 2 29
lu din de d o he lia bi liti - in tra t c g an r es T OT AL : E Q U ITY AN D L IAB ILI TIE S							12 9 0 80 22 98 8 9 96
for he h p d e de d 3 be io Se t 9-m t 0 tem r 2 01 5 on er n p
Ca l ex dit for b le a d i b le fix d a ita ta i nta i ts p p en ure ng n ng e sse	54 3	50 1 2 28	1 3 92 97 0	-	40 65 1	( ) 49 90 3	1 8 85 48 9
l ex dit for b le a d i b le fix d a lu de d Ca ita ta i nta i ts p p en ure ng n ng e sse exc fro tio nta m s eg me n							-
d a De iat ion rtiz ati p rec an mo on	58 9	32 8 6 57	21 9 9 35	-	28 6 13	( ) 28 7 7	80 55 5 1
d a lu de d fro De iat ion rtiz ati nta tio p rec an mo on ex c m s eg me n							3 0 91
( ) o / /u de liza f re b les l low Re nit ion nit ion ti tio cei cog rec og n va a an ce	1 9 92	2 3 36	( ) 97 9	-	1 47 0	( ) 4	4 81 5

Condensed interim consolidated financial statements for the period from 1 January to 30 September 2016 (all amounts in PLN'000, unless specified otherwise)

7. Property, plant and equipment

During the 9-month period ended 30 September 2016 the Group acquired property, plant and equipment for the total amount of PLN 1,746,139 thousand (during the period of 9 months ended 30 September 2015 it was PLN 1,861,655 thousand). The mentioned above amount relates mainly to production segment (PLN 923,817 thousand) and distribution segment (PLN 604,468 thousand). Expenditures in the production segment relate primarily to the construction of a new power unit.

During the 9-month period ended 30 September 2016 the Group completed the sale and liquidation of property, plant and equipment in the total net book value of PLN 24,501 thousand (during the 9 months ended 30 September 2015 respectively: PLN 6,532 thousand).

Impairment of property, plant and equipment

As at June 30 the Group analyzed the indicators for impairment of property, plant and equipment. As a result of the implementation of the act of 20 May 2016 on investments in wind farms, the method for qualifying of fixed assets in wind farms into real property taxation basis shall change starting from 2017. Due to the change in calculating real property taxes, the Company updated the impairment tests performed in 2015 in a subsidiary which deals with energy generation from wind sources and assessed the impact of the increased taxes upon the value-in-use of property, plant and equipment. Based on the analysis, impairment on property, plant and equipment has been identified of PLN 42,000 thousand. The impairment loss reduced the Group's net result by PLN 34,020 thousand.

8. Intangible assets

During the 9-month period ended 30 September 2016 the Group acquired intangible assets for the total amount of PLN 87,251 thousand (during the period of 9 months ended 30 September 2015 it was PLN 23,834 thousand).

During the 9-month period ended 30 September 2016 the Group has brought into use intangible assets from intangible assets under construction in the amount of PLN 4,281 thousand (during the period of 9 months ended 30 September 2015: PLN 76,694 thousand).

During the 9-month period ended 30 September 2016 the Group did not complete significant sales and liquidations of intangible assets (neither during the period of 9 months ended 30 September 2015).

Condensed interim consolidated financial statements for the period from 1 January to 30 September 2016

(all amounts in PLN'000, unless specified otherwise)

9. Non-current assets held for sale

	30.09.2016	31.12.2015
Property, plant and equipment	25 964	25 108
Deferred tax assets	729	729
Total gross amount of non-current assets held for sale	26 693	25 837
Impairment loss	(6 597)	(6 597)
Non-current assets held for sale	20 096	19 240
Loans, borrowings and debt securities	3 692	4 300
Liabilities related to non-current assets held for sale	3 692	4 300

In the 9-month period ended 30 September 2016 the amount of assets held for sale increased by PLN 856 thousand. The increase relates to the property of Zakład Ceramiki Budowlanej, which belongs to Lubelski Węgiel "Bogdanka" S.A. Under the agreement concluded, the sale is expected to be completed at the end of 2016.

As at 30 September 2016 assets of Szpital Uzdrowiskowy ENERGETYK Sp. z o. o. are presented as non-current assets held for sale and liabilities of that company as liabilities related to non-current assets held for sale.

On the basis of a resolution of the Management Board of Enea S.A. No. 40/2016 dated 24 February 2016 the Company commenced proceedings related to the sale of shares in Szpital Uzdrowiskowy ENERGETYK Sp. z o.o. in a public invitation to negotiations. As a result, a share sales agreement was concluded and will remain binding should the investor fulfill the contractual obligations – it may take place this year.

10. Allowance on trade and other receivables

	30.09.2016	31.12.2015
Opening balance of receivables allowance	116 161	122 439
Addition	19 866	32 942
Reversed	(665)	(2 542)
Utilized	(8 689)	(36 678)
Closing balance of receivables allowance	126 673	116 161

During the 9-month period ended 30 September 2016 the allowance on the carrying amount of trade and other receivables increased by PLN 10,512 thousand (during the period of 9 months ended 30 September 2015 the impairment allowance increased by PLN 4,815 thousand).

Condensed interim consolidated financial statements for the period from 1 January to 30 September 2016 (all amounts in PLN'000, unless specified otherwise)

11. Inventory

During the 9-month period ended 30 September 2016 the inventory allowance increased by PLN 5,544 thousand (during the period of 9 months ended 30 September 2015 the inventory allowance decreased by PLN 941 thousand).

12. Certificates of origin

	30.09.2016	31.12.2015
Net carrying amount opening balance	196 077	201 633
Self-production	45 276	132 595
Acquisition	250 632	202 520
Redemption	(170 705)	(343 575)
Impairment loss	(4 329)	3 580
Other changes	-	(676)
Net carrying amount closing balance	316 951	196 077

13. Restricted cash

As at 30 September 2016 the restricted cash amounted to PLN 39,983 thousand. These were generally cash for electricity transaction deposits and deposits for CO2 emission rights, security deposits received from suppliers, as well as cash blocked to secure due performance of contracts.

As at 31 December 2015 the restricted cash amounted to PLN 59,262 thousand.

14. Financial assets measured at fair value through profit or loss

As at 30 September 2016 the carrying amount of the portfolio of financial instruments managed by a specialized institution amounted to PLN 221,278 thousand and comprised financial assets measured at fair value through profit or loss -treasury bills and bonds in the amount of PLN 220,502 thousand (as at 31 December 2015, carrying amount of the portfolio amounted to PLN 216,826 thousand, including financial assets at fair value through profit or loss - treasury bills and bonds in the amount of PLN 215,488 thousand).

Additionally, within financial assets measured at fair value through profit or loss the Group recognizes future contracts for the purchase of CO2 emission rights – PLN 2,991 thousand (as at 31 December 2015: PLN 6,523 thousand).

Condensed interim consolidated financial statements for the period from 1 January to 30 September 2016

(all amounts in PLN'000, unless specified otherwise)

15. Loans, borrowings and debt securities

	30.09.2016	31.12.2015
Bank loans	1 595 438	1 529 220
Borrowings	43 663	35 433
Bonds	4 673 330	4 368 707
Long-term	6 312 431	5 933 360
Bank loans	44 574	5 342
Borrowings	10 555	9 583
Bonds	59 341	28 474
Short-term	114 470	43 399
Total	6 426 901	5 976 759

During the 9-month period ended 30 September 2016 the carrying amount of loans, borrowings and debt securities increased by net amount of PLN 450,142 thousand (during the period of 9 months ended 30 September 2015 the carrying amount of loans, borrowings and debt securities increased by net amount of PLN 2,692,839 thousand).

Loans

At present Enea S.A. has loan agreements concluded with EIB for a total amount of PLN 2,371,000 thousand (agreement A for PLN 950,000 thousand, agreement B for PLN 475,000 thousand and agreement C for PLN 946,000 thousand). The funds from EIB are designated for financing of long-term investment plan for the modernization and extension of the power grids of Enea Operator Sp. z o.o. Funds from Agreement A and B are fully utilized and the availability period for Agreement C is March 2017. Interest rate on loans can be fixed or floating.

In January 2016, Enea S.A. received the second tranche of a loan within C Agreement ("Agreement C") that was awarded by the European Investment Bank in the amount of PLN 100,000 thousand. The loan is denominated in PLN with a floating interest rate based on the WIBOR 6-month plus the Bank's margin. The tranche will be repaid in installments, and the final loan repayment is planned for September 2030.

Bond issue programs

Enea S.A. concludes agreements for bonds issue programs to finance current operations and investments of Enea S.A. and its subsidiaries. Also Lubelski Wegiel "Bogdanka" S.A. has liabilities arising from bond programmes.

Condensed interim consolidated financial statements for the period from 1 January to 30 September 2016

(all amounts in PLN'000, unless specified otherwise)

No.	Name of bonds issue programme	Date of the conclusion of programme	Amount of the programme	Amount issued as at 30.09.2016	Amount issued as at 31.12.2015	Redemption date
1.	Bonds Issue Programme Agreement with PKO BP S.A., Bank PEKAO S.A., BZ WBK S.A. and Bank Handlowy w Warszawie S.A. (Enea S.A.)	21 June 2012	3 000 000	1 651 000	1 201 000	Redemption from June 2020 till June 2022.
2.	Bonds Issue Programme Agreement with Bank Gospodarstwa Krajowego (Enea S.A.)	15 May 2014	1 000 000	1 000 000	1 000 000	Redemption in instalments, final maturity is December 2026.
3.	Bonds Issue Programme Agreement with ING Bank Śląski S.A., PKO BP S.A., Bank PEKAO S.A. and mBank S.A. (Enea S.A.)	30 June 2014	5 000 000	1 500 000	1 500 000	Redemption of a given series in February 2020 and September 2021
4.	Bonds Issue Programme Agreement with Bank Gospodarstwa Krajowego (Enea S.A.)	3 December 2015	700 000	-	-	Redemption in instalments, final maturity is September 2027.
5.	Bonds Issue Programme Agreement with Bank PEKAO S.A. (LWB)	23 September 2013	300 000	300 019	300 040	Redemption in instalments, final maturity is December 2018.
6.	Bonds Issue Programme Agreement with Bank PEKAO S.A. and Bank Gospodarstwa Krajowego (LWB)	30 June 2014	300 000	300 020	400 052	Redemption in June 2017.
	TOTAL		10 300 000	4 751 039	4 401 092
	Transaction costs and the result of the effective interest rate measurement			(18 368)	(3 911)
	TOTAL		10 300 000	4 732 671	4 397 181

During the 9-month period ended 30 September 2016, Enea S.A. did not change the Programme Contracts, neither concluded new contracts. Under a Program Agreement of 21 June 2012, Enea S.A. issued VI series of bonds of PLN 300,000 thousand on 19 May 2016 and VII series of bonds of PLN 150,000 thousand on 19 August 2016. The interest of the bonds is based on a variable interest rate, and the bond redemption date is 15 June 2022.

Condensed interim consolidated financial statements for the period from 1 January to 30 September 2016

(all amounts in PLN'000, unless specified otherwise)

Group liabilities relating to bonds include bonds issued by Lubelski Węgiel "Bogdanka" S.A. The carrying amount of the aforementioned bonds amounts to PLN 600,039 thousand.

Financial liabilities of LWB arising from issued bond relates to two programme contracts. Under the first Programme Contract concluded by the company on 23 September 2013 with Polska Kasa Opieki S.A. Bank 3,000 bonds of total value PLN 300,000 thousand with maturity on 31 December 2018 were issued. The maturity date of bonds is 30 March 2018 (PLN 75,000 thousand), 30 June 2018 (PLN 75,000 thousand), 30 September 2018 (PLN 75,000 thousand) and 30 December 2018 (PLN 75,000 thousand). The interest rate of the bonds is based on WIBOR 3M plus fixed margin.

Under the second Programme Agreement concluded by LWB on 30 June 2014 with Polska Kasa Opieki S.A. Bank and with Bank Gospodarstwa Krajowego 400 bonds worth PLN 400,000 thousand with maturity on 30 June 2016 were issued. According to the programme, the company is entitled to issue another obligation series as part of a particular tranche for the purpose of refinancing of the previous issue of a particular tranche (rollover), which justifies long-term nature of bonds issue. 30 June 2016 was a maturity date of two issues of bonds issued as part of a particular tranche on 30 June 2015 of PLN 400,000 thousand. In order to refinance issue of the bonds with maturity date on 30 June 2016, the company issued total of 300 registered bonds of a new series as part of Tranche No. 1, with a total value of PLN 300,000 thousand. The maturity date of the new series of bonds is 30 June 2017. Moreover, on the same date LWB redeemed remaining 100 bonds worth PLN 100,000 thousand.

Interest rate risk hedging transactions

During the 9-month period ended 30 September 2016, Enea S.A. concluded interest rate swap transactions to hedge interest rate risk related to the debt of PLN 1,440,000 thousand. On 30 September 2016, the total value of the IRS's transactions amounted to PLN 4,435,000 thousand. Concluded transactions will substantially affect the predictability of the cash flows relating to expenditure and financial costs. The valuation of these financial instruments is presented in "Derivatives". As at 30 September 2016 the valuation of derivatives amounted PLN 6,042 thousand.

Financing conditions – covenants

Financing agreements assume compliance by Enea S.A., Lubelski Węgiel "Bogdanka" S.A and the Enea Group with certain financial ratios. As at 30 September 2016 and the date of these condensed interim consolidated financial statements, the Group did not breach the regulations of loan agreements, on the basis of which the Group would be required to early repayment of long-term debt.

Condensed interim consolidated financial statements for the period from 1 January to 30 September 2016

(all amounts in PLN'000, unless specified otherwise)

16. Financial instruments

The table below presents the fair values as compared to carrying amounts:

	30.09.2016		31.12.2015
	Carrying amount	Fair value	Carrying amount	Fair value
Non-current financial assets available for sale (shares in unrelated parties)	38 982	38 982	23 982	23 982
Derivatives	-	-	844	844
Current financial assets held to maturity	477	477	479	479
Current financial assets measured at fair value through profit or loss	223 493	223 493	222 011	222 011
Trade and other receivables	1 312 277	(*)	1 423 461	(*)
Cash and cash equivalents	1 983 027	1 983 027	1 822 094	1 822 094
Cash deposits at Mine Closure Fund	101 360	101 360	90 872	90 872
Loans, borrowings and debt securities	6 426 901	6 469 614	5 976 759	6 015 494
Finance lease liabilities	2 021	2 021	2 017	2 017
Trade and other liabilities	711 390	(*)	1 042 611	(*)
Derivatives	6 042	6 042	-	-
Short-term financial liabilities measured at fair value through profit or loss	149	149	-	-

(*)The carrying amounts of trade and other receivables and trade and other liabilities approximate their fair values.

Financial assets available for sale include shares in unrelated parties for which the ratio of interest in equity is lower than 20%, including shares in company PGE EJ1 Sp. z o.o. in the amount of PLN 23,402 thousand, for which there is no market price quoted on the active market and whose fair value – due to the initial phase of company activity – is defined on the basis of the expenses incurred.

Derivatives comprise the valuation of interest rate hedging transactions (Interest Rate Swap). The fair value of derivatives is determined by calculating the net present value based on two yield curves, i.e. the curve to determine the discount factor and curve used to estimate future rates of variable reference rates.

Current financial assets measured at fair value through profit or loss include an investment portfolio managed by a company specialized in professional cash management. The fair value of the investment portfolio is estimated based on market quotations.

The table below presents the analysis of financial instruments measured at fair value and classified into the following three levels:

Level 1 – fair value based on stock exchange prices (unadjusted) offered for identical assets or liabilities in active markets,

Level 2 – fair value determined based on market observations instead of market quotations (e.g. direct or indirect reference to similar instruments traded in the market),

Level 3 – fair value determined using various valuation methods, but not based on any observable market information.

Condensed interim consolidated financial statements for the period from 1 January to 30 September 2016

(all amounts in PLN'000, unless specified otherwise)

	30.09.2016
	Level 1	Level 2	Level 3	Total
Financial assets measured at fair value through profit or loss
Forward contracts	-	2 991	-	2 991
Non-derivative financial assets held for trading Financial assets available for sale	220 502	-	-	220 502
Not listed equity instruments	-	-	580	580
Total	220 502	2 991	580	224 073
Derivatives
Interest Rate Swap used for hedging	-	(6 042)	-	(6 042)
Total	-	(6 042)	-	(6 042)

	31.12.2015
	Level 1	Level 2	Level 3	Total
Derivatives
Interest Rate Swap used for hedging Financial assets measured at fair value through profit or loss	-	844	-	844
Forward contracts	-	6 523	-	6 523
Non-derivative financial assets held for trading Financial assets available for sale	215 488	-	-	215 488
Not listed equity instruments Total	- 215 488	- 7 367	580 580	580 223 435

17. Deferred income from subsidies, connection fees and other

	30.09.2016	31.12.2015
Non-current
Deferred income due to subsidies	209 998	215 699
Deferred income due to connection fees	421 025	433 043
Deferred income due to street lighting modernization services	32 714	25 940
	663 737	674 682
Current
Deferred income due to subsidies	15 080	14 890
Deferred income due to connection fees	64 495	65 891
Deferred income due to street lighting modernization services	849	687
Valuation of construction contracts	178	2 198
	80 602	83 666
Deferred income schedule
	30.09.2016	31.12.2015

	744 339	758 348
Over 5 years	521 534	532 018
1 to 5 years	142 203	142 664
Up to 1 year	80 602	83 666

During the 9-month period ended 30 September 2016 the carrying amount of deferred income from subsidies, connection fees and other decreased by the net amount of PLN 14,009 thousand (during period of 9 months ended 30 September 2015 the carrying amount increased by PLN 9,418 thousand).

The notes presented on pages 13-40 constitute an integral part of the condensed interim consolidated financial statements.

Condensed interim consolidated financial statements for the period from 1 January to 30 September 2016 (all amounts in PLN'000, unless specified otherwise)

18. Deferred income tax

Changes in deferred income tax assets and liabilities (considering the net-off of the asset and liability) are as follows:

	30.09.2016	31.12.2015
Deferred tax assets – opening balance	616 795	167 207
Deferred tax liability – opening balance	388 117	255 374
Net deferred tax (asset)/ liability – opening balance	(228 678)	88 167
Acquisition of subsidiaries		(12 523)
Change recognized in profit or loss	(2 266)	(305 069)
Change recognized in other comprehensive income	(1 884)	747
Net deferred tax assets – closing balance, including:	(232 828)	(228 678)
Deferred tax assets – closing balance	400 476	616 795
Deferred tax liability – closing balance	167 648	388 117

In the first 9 months of 2016 the Group offset temporary differences (impairment loss on non-financial non-current assets) which resulted in the decrease of deferred tax asset and deferred tax liability, but did not affect the net deferred tax asset.

During the 9-month period ended 30 September 2016, the Group's profit before tax was credited with PLN 2,266 thousand as a result of the increase in net deferred tax asset (during the period of 9 months ended 30 September 2015 the Group's profit before tax was debited by PLN 20,483 thousand as a result of the increase in net deferred tax liability).

19. Provisions for other liabilities and charges

and charges
	30.09.2016	31.12.2015
Non-current	639 514	625 388
Current	721 224	567 556
Total	1 360 738	1 192 944

Non-current and current provisions for other liabilities

During the 9-month period ended 30 September 2016 the provisions for other liabilities and charges increased by the net amount of PLN 167,794 thousand (during the period of 9 months ended 30 September 2015 the provisions for other liabilities and charges increased by the net amount of PLN 111,356 thousand).

(all amounts in PLN'000, unless specified otherwise)

Change in provisions for other liabilities and charges

for the period ended 30.09.2016

	for Pro is ion v no n f l u ntr act co ua se o lan d	for Pro is ion v he la im ot r c s	for Pro is ion v lan d lam ion at rec	for Pro is ion v i f ica f o ig in t tes cer o r	for Pro is ion C O2 v iss ion ig hts em s r	M ine l iq i da ion t u	Ot he r	To l ta
ba lan Op ing en ce	18 9 4 29	6 0 4 56	55 40 9	25 0 0 24	1 93 03 4	12 4 4 41	32 0 1 51	1 1 92 94 4
din f dis d Un wi t a g o co n un n dis ha t ra te co un c ng e	( ) 1 65 4	-	( ) 1 69 2	-	-	2 6 13	-	( ) 73 3
Inc in isio rea se p rov ns	18 64 6	4 2 22	99	72 33 1 1	21 8 6 11	-	19 68 0	59 2 4 30
d Pro vis ion s u se	( ) 15 8	( ) 16 97 4	-	( ) 17 4 4 16	( ) 19 7 6 91	-	( ) 5 4 27	( ) 39 4 6 66
Pro d vis ion re ve rse	( ) 6 8 64	( ) 9 3 96	( ) 1 4 70	( ) 32 4	( ) 1 4 05	( ) 8 57 1	( ) 1 2 07	( ) 29 23 7
los ba lan C ing ce	19 9 3 99	38 30 8	52 34 6	40 6 4 56	21 2 5 49	11 8 4 83	33 3 1 97	1 3 60 73 8

Other provisions include mainly:

• potential liabilities related to electricity infrastructure and resulting from differences in interpretation of laws and regulations PLN 143,493 thousand (as at 31 December 2015 PLN 129,197 thousand),
• costs of using forest lands managed by State Forests PLN 109,678 thousand (as at 31 December 2015 PLN 112,680 thousand),
• real property tax in Lubelski Węgiel Bogdanka S.A. PLN 30,264 thousand (as at 31 December 2015 PLN 23,881 thousand),
• ZUS claims arising from accident contribution in Lubelski Węgiel Bogdanka S.A. PLN 19,712 thousand (as at 31 December 2015 PLN 18,727 thousand),
• removal of mining damages PLN 7,803 thousand (as at 31 December 2015 PLN 8,497 thousand).

Condensed interim consolidated financial statements for the period from 1 January to 30 September 2016 (all amounts in PLN'000, unless specified otherwise)

A description of material claims and contingent liabilities has been presented in note 22.

20. Related party transactions

The Group companies conclude transactions with the following related parties:

• the companies comprising the Group transactions are eliminated at the consolidation stage;
• transactions concluded between the Group and Members of its governing bodies fall within two categories:
• those resulting from appointment of Members of the Supervisory Boards,
• resulting from other agreements under civil law;
• transactions with entities whose shares are held by the State Treasury of the Republic of Poland.

Transactions with members of the Company's governing bodies:

		Management Board of the Company	Supervisory Board of the Company
Item	01.01.2016 - 30.09.2016	01.01.2015 - 30.09.2015	01.01.2016 - 30.09.2016	01.01.2015 - 30.09.2015
Remuneration under managerial contracts and consultancy agreements	11 565**	5 951*	-	-
Remuneration relating to appointment for members of management or supervisory
bodies	-	-	347	210
TOTAL	11 565	5 951	347	210

* Remuneration includes bonuses for 2014 paid to the members of the Management Board during the second quarter of 2015

** Remuneration includes bonuses for 2015 and compensation resulting from non – competition agreements for former members of the Management Board in the amount of PLN 8,821 thousand.

During the 9-month period ended 30 September 2016 there were no loans granted from the Company's Social Benefits Fund to the members of the Supervisory Board (PLN 0 thousand during the 9-month period ended 30 September 2015). During this period repayments of the loans amounted to PLN 9 thousand (PLN 10 thousand during the 9-month period ended 30 September 2015).

Other transactions resulting from agreements under civil law concluded between Enea S.A. and Members of the Parent's Bodies relate only to private use of Company's cars by Members of the Management Board of Enea S.A.

The Group also concludes business transactions with entities of the central and local administration and entities controlled by the State Treasury of the Republic of Poland.

The transactions concern mainly:

• purchase of coal, electricity, property rights resulting from certificates of origin as regards renewable energy and energy cogenerated with heat and transmission and distribution services from companies controlled by the State Treasury,

Condensed interim consolidated financial statements for the period from 1 January to 30 September 2016

(all amounts in PLN'000, unless specified otherwise)

• sale of electricity, distribution services, connection to the grid as well as other related fees and coal, provided by the Group both to central and local administration bodies (sale to end users) and entities controlled by the State Treasury (wholesale and retail sale to end users).

Such transactions are concluded under arm's length terms and their conditions do not differ from those applied in transactions with other entities. The Group does not keep a register which would allow to aggregate the values of all transactions with state institutions and entities controlled by the State Treasury.

21. Future liabilities under contracts as at the end of the reporting period

Contractual obligations related to the acquisition of property, plant and equipment, intangible assets and investment properties assumed as at the end of the reporting period, not yet recognized in the statement of financial position:

	30.09.2016	31.12.2015
Acquisition of property, plant and equipment	2 111 826	2 402 418
Acquisition of intangible assets	26 066	12 301
	2 137 892	2 414 719

22. Contingent liabilities and proceeding before courts, arbitration or public administration bodies

22.1. Guarantees and warranties

The table below presents actual major bank guarantees under the agreements concluded by Enea S.A. with BZ WBK S.A. Bank and Pekao S.A. Bank to the limits specified therein.

Guarantee date	Guarantee period	Company from Enea Group	Recipient	Name of Guarantee	Bank - contractor	Amount of guarantee in PLN thousand
2015-06-12	2018-05-31	Enea Wytwarzanie Sp. z o.o.	IRGiT	Payment of deposit	BZ WBK S.A.	8 000
2015-06-29	2018-05-31	Enea Trading Sp. z o.o.	IRGiT	Payment of deposit	BZ WBK S.A.	10 000
2016-01-01	2017-02-28	Enea S.A.	Górecka Projekt Sp. z o.o.	Payment for rent	BZ WBK S.A.	1 650
2016-09-14	2016-11-18	Enea S.A.	Zakład Wodociągów i Kanalizacji Sp. z o.o.	The tendering Guarantee	BZ WBK S.A.	1 000
2016-09-29	2018-11-27	Enea S.A.	Górnośląskie Przedsiębiorstwo Wodociągów S.A.	The tendering Guarantee	BZ WBK S.A.	1 000
	Total of guarantees issued					21 650

Condensed interim consolidated financial statements for the period from 1 January to 30 September 2016 (all amounts in PLN'000, unless specified otherwise)

22.2. Pending proceedings before courts of general jurisdiction

Actions brought by the Group

Actions which Enea S.A. and Enea Operator Sp. z o.o. brought to courts of general jurisdiction refer to claims for receivables due to provision of electricity (the so–called electricity cases) and claims for other receivables – illegal consumption of electricity, connections to the grid and other specialized services (the so-called non-electricity cases).

Actions brought to courts of general jurisdiction by Enea Wytwarzanie Sp. z o.o. are connected mainly with claims for outstanding invoice payments and contractual penalties from the Company's contractors.

As at 30 September 2016, the total of 13,523 cases brought by the Group were pending before common courts for the total amount of PLN 244,798 thousand (11,584 cases for the total amount of PLN 219,468 thousand as at 31 December 2015).

None of the cases can significantly affect the Group's net result.

Actions brought against the Group

Actions against the Group are brought both by natural and legal entities. They mainly refer to issues such as compensation for interrupted delivery of electricity, identification of illegal electricity consumption and compensation for use by the Group of real property where electrical devices are located. The Group considers actions concerning noncontractual use of real property not owned by the Group as particularly important.

Actions brought to courts of general jurisdiction against Enea Wytwarzanie Sp. z o.o. are connected mainly with claims from former employees, compensations and contractual penalties.

As at 30 September 2016 there were 2,759 cases pending before common courts which have been brought against the Group for the total amount of PLN 417,892 thousand (2,282 cases for the total amount of PLN 301,815 thousand as at 31 December 2015). Provisions related to the court cases are presented in note 19.

22.3. Motions for settlements of not balanced energy trading in 2012

On 30 and 31 December 2014 Enea S.A. submitted motions for settlement to:

	Amount in PLN thousand
PGE Polska Grupa Energetyczna S.A.	7 410
PKP Energetyka S.A.	1 272
TAURON Polska Energia S.A.	17 086
TAURON Sprzedaż GZE Sp. z o.o.	1 826
FITEN S.A.	207
Total	27 801

Condensed interim consolidated financial statements for the period from 1 January to 30 September 2016

(all amounts in PLN'000, unless specified otherwise)

The subject of motions was claim for the payment of electric energy consumed under the system of energy balancing. Claimed companies earned unjustified benefits by refusing Enea S.A. to issue invoice corrections for 2012.

Till the reporting date eight proceedings were conducted but claims of Enea S.A. were not accepted.

22.4. Dispute with PGE GiEK S.A. concerning energy origin certificate prices

Before the District Court in Poznań the proceeding brought by PGE Górnictwo i Energetyka Konwencjonalna S.A. is pending against the Company for the payment of PLN 42,351 thousand concerning the payment for purchased certificates of origin. ENEA SA made a deduction from the payment for certificates of origin (by offsetting with invoices for certificates of origin) in respect of a damage caused by PGE GiEK S.A. to ENEA S.A. The damage resulted from the fact that PGE GiEK S.A. did not fulfill the contractual obligation to accede to renegotiate long-term contracts for certificates of origin in accordance with the adaptive clause applicable to both Parties. The adaptive clause is applicable in the event of changes in facts or legal status related to the support scheme for the renewable energy sources based on the obligation to redeem the certificates of origin (incorporating property rights) which result in disruption of the contractual balance and equivalence of benefits for parties, which, in the opinion of ENEA S.A., occurred in the case of contracts with PGE GiEK S.A.

As of the date of these condensed interim consolidated financial statements, the court has not taken any decision in this matter.

23. The participation in the construction of the atomic power plant programme

On 15 April 2015 KGHM, PGE TAURON and Enea concluded Share Purchase Agreement in PGE EJ 1. Each of KGHM, TAURON and Enea acquired from PGE 10% of shares (total 30%) in PGE EJ 1. Enea paid PLN 16 million for the acquired shares.

On 29 July 2015 the Extraordinary Shareholders' Meeting of PGE EJ 1 adopted a resolution to increase the share capital of the Company approximately by PLN 70 million through issue of 496,450 new shares in the nominal value of PLN 141 each and cover them with cash. According to the decision of the Extraordinary Shareholders Meeting Enea acquired 49,645 shares in the total nominal value of approximately PLN 7 million, and covered them with cash of approximately PLN 7 million.

In the third quarter of 2016, KGHM, PGE, TAURON, and Enea continued their work on the preparation to the construction of the nuclear plant in Poland project.

The Shareholders Agreement parties predict that subsequent decisions on the declaration of further participation of the Parties in the next phase of the project will be taken after the completion of the Initial Phase immediately prior to the decision of the integrated proceeding.

24. Dividend

The Company will not pay out the dividend for the financial year from 1 January 2015 to 31 December 2015 due to the net loss incurred in that period. On 27 June 2016, the Ordinary General Meeting of Enea S.A. adopted resolution no. 7

Condensed interim consolidated financial statements for the period from 1 January to 30 September 2016

(all amounts in PLN'000, unless specified otherwise)

on the coverage of net loss of PLN 1,116,888 thousand for the financial year from 1 January 2015 to 31 December 2015 from retained earnings.

On 30 June 2015 the General Shareholders' Meeting of Enea S.A. adopted Resolution no. 7 concerning net profit distribution for the financial period from 1 January 2014 to 31 December 2014 under which the dividend for shareholders amounts to PLN 207,478 thousand. Dividend per share amounted to PLN 0.47.

25. Agreement of acquisition of Eco-Power Sp. z o.o.

On 7 August 2015 Enea Wytwarzanie Sp. z o.o. and Fen Wind Farm B.V. signed a Conditional Preliminary Agreement for the purchase of 100% of shares in a special purpose entity Eco-Power Sp. z o.o., which owns wind farm Skoczykłody with a capacity of 36 MW. The amount of the transaction is PLN 286,500 thousand. On 2 May 2016, Enea Wytwarzanie Sp. z o.o. received a petition filed to the Regional Court in Łódź by Fen Wind Farm B.V and Wento Holdings S.A.R.L. to execute the final contract. On 30 May 2016, Enea Wytwarzanie filed a response to the petition where it requested to reject the petition in its entirety. The matter is pending and the Court allowed the petitioner to reply to the response to the petition. As of the date of this condensed interim consolidated financial statements, neither date nor the outcome of the dispute can be forseen.

26. Essential information which could potentially affect the financial result of the Group

26.1 Signing of a Letter of Intent with Energa S.A. concerning the construction and use of a power unit at the Ostrołęka Power Plant

On 19 September 2016, Enea S.A. and Energa S.A. signed a Letter of Intent, concerning cooperation in the preparation, construction and operation of a modern 1.000 MW coal-fired unit in the Ostrołęka Power Plant (the "Investment", "Ostrołęka C").

The Parties intent to elaborate an effective business model for Ostrołęka C, verify its project documentation and optimize the technical and economic parameters of the new power unit. The cooperation also assumes the preparation of documents required to initiate a tender procedure and appoint a general contractor for the Investment.

The Parties agree that the realization of the Investment will benefit the energy security in Poland, will satisfy the highest environmental standards and will provide stable, highly efficient and low-emission source of energy in the National Power System.

The Parties hereby agree that the rules of cooperation established upon in the Letter of Intent should contribute to the decision to announce a tender in 2016 with the aim to complete the Investment in the second half of 2023.

Potential expenditures are estimated at approx. PLN 5.5 - 6 million / MW. The Parties do not rule out the participation of other partners in the Investment. Its further parameters and the scale of the commitment of both Parties will be analysed.

Condensed interim consolidated financial statements for the period from 1 January to 30 September 2016

(all amounts in PLN'000, unless specified otherwise)

26.2 Submitting a preliminary offer for the purchase of EDF assets in Poland with partners

On 16 September 2016, Enea S.A. and PGE S.A., Energa S.A. and PGNiG Technika S.A. jointly submitted a preliminary non-binding offer to EDF International SAS for the purchase of shares in companies belonging to EDF in Poland, holding conventional production assets and conducting service acticity.

The assets include, in particular, the Rybnik Power Plant, the heat and power plant in Kraków, the heat and power plant in Gdańsk, the heat and power plant in Gdynia, the heat and power plant and heating network in Toruń, the heat and power plant and heating network in Wrocław agglomeration, the heating network in Zielona Góra, and the gas unit in Toruń. In the event of admission to the next stage of the transaction, a detailed due diligence will be carried out and it will constitute as the basis for decision on further steps in the transaction, including the submission of a potential binding offer after obtaining the required corporate approvals.

26.3 Submitting an offer for the purchase of 100% shares of ENGIE Energia Polska S.A.

On 30 September 2016, the Company submitted an offer for the purchase of 100% of ENGIE Energia Polska S.A. shares. The offer was submitted in the manner specified in the process initiated by ENGIE, the owner of 100% of ENGIE Energia Polska S.A. shares, which considers their disposal.

26.4 Signing of a Letter of Intent relating to the preliminary interest in the financial involvement in Katowicki Holding Węglowy S.A.

On 28 October 2016 Enea S.A. and Węglokoks S.A. and Towarzystwo Finansowe Silesia Sp. z o.o. ("Investors") signed a Letter of Intent expressing the preliminary interest in the financial involvement in Katowicki Holding Węglowy S.A. seated in Katowice ("KHW") or in KHW's assets.

Investors' involvement in KHW depends on the satisfaction of numerous conditions related to, among others, presentation of an acceptable business plan and financial model, as well as obtaining the required corporate approvals. The Investors' final decisions as regards the participation in KHW will be made, among others, after the due-diligence analysis performed and after the determination of the final form of all the other arrangements.

27. Changes in the Supervisory Board

On 5 September 2016, Mr. Paweł Skropiński was appointed to the Supervisory Board of Enea S.A. (the appointment through the statement of the Minister of Energy).

28. Events after the end of the reporting period

On 19 October 2016, PGE Polska Grupa Energetyczna, ENERGA, Enea and Tauron Polska Energia established the ElectroMobility Poland. The activity of the Company is to contribute to the electromobility system development in Poland. The share capital of the new company will amount to PLN 10 million. Each of the founding companies of ElectroMobility Poland will acquire 25 per cent of the share capital, thus obtaining 25 per cent of voting rights at the general shareholders' meeting.

Condensed interim consolidated financial statements for the period from 1 January to 30 September 2016

(all amounts in PLN'000, unless specified otherwise)

On 28 October 2016 Enea S.A. made representations (depending on the agreement) on termination or on withdrawal from long-term agreements for purchase of property rights resulting from energy certificates of origin from renewable sources (so-called green certificates) by the Company ("Agreements").

The Agreements were concluded in 2006-2014 with the following contractors holding installations generating electricity from renewable sources ("Contractors"):

• Farma Wiatrowa Krzęcin Sp. z o.o. seated in Warsaw;
• Megawind Polska Sp. z o.o. seated in Szczecin;
• PGE Górnictwo i Energetyka Konwencjonalna S.A. seated in Bełchatów;
• PGE Energia Odnawialna S.A. seated in Warsaw;
• PGE Energia Natury PEW sp. z o.o. seated in Warsaw;
• "PSW" Sp. z o.o. seated in Warsaw;
• in.ventus Sp. z o.o. EW Śniatowo Sp.k. seated in Poznań;
• Golice Wind Farm Sp. z o.o. seated in Warsaw.

The Company assumes that the Agreements should be terminated, as a rule, until the end of November 2016. The exact termination date of individual Agreements depends on the contractual terms.

The reason for termination/withdrawal from particular Agreements by the Company was exhaustion of the possibilities to restore the contractual balance and equivalence of benefits for parties resulting from law amendments.

The financial result resulting from the termination of the Agreements for the Company will be to avoid a loss amounting to the difference between contractual prices and the market price of green certificates.

The estimated total value of Enea's contractual obligations amounted to approximately PLN 1,187 million net. The above value was calculated according to the price formulas adopted in the Agreements for the period from 28 October 2016 r. to the end of originally assumed duration of the Agreements.

The following law amendments occurring after the conclusion date of the above mentioned Agreements, in particular:

• the regulation of the Minister of Economy dated 18 October 2012 regarding the detailed scope of obligations to obtain certificates of origin and submit them for redemption, make the compensatory payment, purchase electricity and heat generated in renewable energy sources and obligation to confirm the data relating to the volume of electricity generated in a renewable energy source (Journal of Laws from 2012, item 1229);

• the act of 20 February 2015 on renewable energy sources (Journal of Laws from 2015, item 478) and related successive amendments and announced draft amendments to laws, i.e. in particular:

• the act of 22 June 2016 on amending the act on renewable energy sources and some other acts (Journal of Laws dated 2016, item 925); and

• draft regulation of the Minister of Energy relating to the quantitative share of the sum of electricity resulting from redeemed certificates of origin confirming electricity generation in renewable energy sources

Condensed interim consolidated financial statements for the period from 1 January to 30 September 2016

(all amounts in PLN'000, unless specified otherwise)

which is to be published based on the authorisation resulting from Article 12 item 5 of the act of 22 June 2016 on amending the act on renewable energy sources and some other acts,

resulted in the objective lack of a possibility to develop reliable models forecasting the prices of green certificates.

In relation to the above, in the Company's assessment, as at the date of these condensed interim consolidated financial statements, it is not possible to determine the future market prices of green certificates which the Company would be obliged to acquire until the end of originally assumed duration of the Agreements'.

The Company informs that some of its key Contractors also pointed to the fact that:

• the law amendments had and have some impact on the prices of green certificates; and
• they led to the disruption of the contractual balance and equivalence of benefits in the long-term agreements for sale of green certificates.

Selected separate financial data

	in PLN '000		in EUR '000
	9 months ended 30.09.2016	9 months ended 30.09.2015	9 months ended 30.09.2016	9 months ended 30.09.2015
Net sales revenue	4 025 329	4 008 067	921 381	963 825
Operating profit	74 970	54 505	17 160	13 107
Profit before tax	605 999	961 924	138 711	231 315
Net profit for the reporting period	585 535	937 958	134 027	225 552
Net cash flows from operating activities	67 590	220 231	15 471	52 959
Net cash flows from investing activities	(507 885)	(184 492)	(116 253)	(44 365)
Net cash flows from financing activities	437 446	2 447 987	100 130	588 671
Total net cash flows	(2 849)	2 483 726	(652)	597 265
Weighted average number of shares	441 442 578	441 442 578	441 442 578	441 442 578
Net earnings per share (in PLN / EUR)	1.33	2.12	0.30	0.51
Diluted earnings per share (in PLN / EUR)	1.33	2.12	0.30	0.51

	Balance as at 30.09.2016	Balance as at 31.12.2015	Balance as at 30.09.2016	Balance as at 31.12.2015
Total assets	17 961 567	16 847 310	4 165 484	3 953 376
Total liabilities	7 093 048	6 559 305	1 644 955	1 539 201
Non-current liabilities	5 722 585	5 253 551	1 327 130	1 232 794
Current liabilities	1 370 463	1 305 754	317 825	306 407
Equity	10 868 519	10 288 005	2 520 529	2 414 175
Share capital	588 018	588 018	136 368	137 984
Book value per share (in PLN / EUR)	24.62	23.31	5.71	5.47
Diluted book value per share (in PLN/EUR)	24.62	23.31	5.71	5.47

The above financial data for the year 2016 and 2015 were translated into EUR in line with the following principles:

• individual assets and liabilities – at the average exchange rate as of 30 September 2016 – 4.3120 PLN/EUR as at 31 December 2015 – 4.2615 PLN/EUR),

• individual items from the statement of profit or loss and other comprehensive income and the statement of cash flows – as per the arithmetic mean of the average exchange rates determined by the National Bank of Poland as at the last day of each month of the financial period from 1 January to 30 September 2016 – 4.3688 PLN/EUR for the period from 1 January to 30 September 2015– 4.1585 PLN/EUR).

Poznań, 2 November 2016

Condensed interim separate financial statements for the period from 1 January to 30 September 2016

(all amounts in PLN '000, unless specified otherwise)

Index to the condensed interim separate financial statements

	Separate statement of financial position 45
	Separate statement of profit or loss and other comprehensive income 47
	Separate statement of changes in equity 48
	Separate statement of cash flows 49
1.	General information about Enea S.A. 50
2.	Statement of compliance 50
3.	Accounting principles 51
4.	Materials estimates and assumptions 51
5.	Composition of the Group – list of subsidiaries 52
6.	Property, plant and equipment 53
7.	Intangible assets 53
8.	Investments in subsidiaries 53
9.	Assets held for sale 54
10.	Intercompany bonds 54
11.	Allowance on trade and other receivables 56
12.	Inventory 56
13.	Cash and cash equivalents 57
14.	Financial assets measured at fair value through profit or loss 57
15.	Financial instruments 57
16.	Loans, borrowings and debt securities 59
17.	Other financial liabilities 60
18.	Deferred income tax 61
19.	Provisions for other liabilities and charges 61
20.	Dividend 61
21.	Related party transactions 62
22.	Future liabilities under contracts concluded as at the end of the reporting period 63
23.	Contingent liabilities and proceedings before courts, arbitration or public administration bodies 64
23.1.	Guarantees for credit facilities and loans as well as other sureties granted by the Company 64
23.2.	Pending proceedings before courts of general jurisdiction 64
23.3.	Motions for settlements of not balanced energy trading in 2012 65
23.4.	Dispute with PGE GiEK S.A. concerning energy origin certificate prices. 65
24.	The participation in the construction of the atomic power plant programme 66
25.	Essential information which could potentially affect the financial result of Enea S.A. 66
25.1.	Signing of a Letter of Intent with Energa S.A. concerning the construction and use
	of a power unit at the Ostrołęka Power Plant 66
25.2.	Submission of a preliminary offer for the purchase of EDF assets in Poland with partners 67
25.3.	Submission an offer for the purchase of 100% shares of ENGIE Energia Polska SA 67
25.4.	Signing of a Letter of Intent relating to the preliminary interest in the financial involvement
	in Katowicki Holding Węglowy S.A. 67
26.	Changes in Supervisory Board 67
27.	Events after the end of the reporting period 67

Condensed interim separate financial statements for the period from 1 January to 30 September 2016

(all amounts in PLN '000, unless specified otherwise)

These condensed interim separate financial statements have been prepared in accordance with International Financial Reporting Standard IAS 34 Interim Financial Reporting, as endorsed by the European Union (EU), and approved by the Management Board of Enea S.A.

Members of the Management Board

President of the Management Board	Mirosław Kowalik	………………………………….
Member of the Management Board	Piotr Adamczak	………………………………….
Member of the Management Board	Mikołaj Franzkowiak	………………………………….
Member of the Management Board	Wiesław Piosik	………………………………….

Enea Centrum Sp. z o.o. The entity responsible for keeping the accounting records and the preparation of financial statements ……………………………………….. Enea Centrum Sp. z o.o. Górecka 1 Street, 60-201 Poznań KRS 0000477231, NIP 777-000-28-43, REGON 630770227

Poznań, 2 November 2016

Condensed interim separate financial statements for the period from 1 January to 30 September 2016

(all amounts in PLN '000, unless specified otherwise)

Separate statement of financial position

		Balance as at
	Note	30.09.2016	31.12.2015
ASSETS
Non-current assets
Property, plant and equipment	6	28 854	30 699
Perpetual usufruct of land		1 977	1 998
Intangible assets	7	4 551	4 005
Investment property		15 543	15 955
Investments in subsidiaries	8	9 417 459	8 323 493
Deferred tax assets	18	79 566	63 316
Financial assets available for sale		38 402	23 402
Intercompany bonds	10	5 244 542	5 339 352
Derivatives		-	844
Trade and other receivables		129 966	73 557
		14 960 860	13 876 621
Current assets
Inventories	12	274 842	152 318
Trade and other receivables	11	999 435	1 141 808
Intercompany bonds	10	102 735	55 033
Financial assets measured at fair value through profit or loss	14	220 502	215 488
Cash and cash equivalents	13	1 394 783	1 397 632
Assets held for sale	9	8 410	8 410
		3 000 707	2 970 689
TOTAL ASSETS		17 961 567	16 847 310

Condensed interim separate financial statements for the period from 1 January to 30 September 2016

(all amounts in PLN '000, unless specified otherwise)

		Balance as at
EQUITY AND LIABILITIES	Note	30.09.2016	31.12.2015
Equity
Share capital		588 018	588 018
Share premium		4 627 673	4 627 673
Reserve capital from valuation of hedging instruments		(2 997)	3 980
Reserve capital		2 640 358	2 640 358
Retained earnings		3 015 467	2 427 976
Total equity		10 868 519	10 288 005
LIABILITIES
Non-current liabilities
Loans, borrowings and debt securities	16	5 659 586	5 187 381
Liabilities due to employee benefits		51 194	55 265
Derivatives	16	6 042	-
Provisions for other liabilities and charges	19	5 763	10 905
		5 722 585	5 253 551
Current liabilities
Loans, borrowings and debt securities	16	102 057	31 905
Trade and other liabilities		524 180	582 824
Finance lease liabilities		33	43
Current income tax liabilities		40 629	85 363
Liabilities due to employee benefits		13 142	16 486
Liabilities due to an equivalent of the right to acquire shares free of charge		281	281
Other financial liabilities	17	277 728	327 318
Provisions for other liabilities and charges	19	412 413	261 534
		1 370 463	1 305 754
Total liabilities		7 093 048	6 559 305
TOTAL EQUITY AND LIABILITIES		17 961 567	16 847 310

Condensed interim separate financial statements for the period from 1 January to 30 September 2016

(all amounts in PLN '000, unless specified otherwise)

Separate statement of profit or loss and other comprehensive income

			For the period
	9 months ended 30.09.2016	3 months ended 30.09.2016	9 months ended 30.09.2015	3 months ended 30.09.2015
Sales revenue	4 211 167	1 350 386	4 179 276	1 367 415
Excise tax	(185 838)	(60 669)	(171 209)	(56 530)
Net sales revenue	4 025 329	1 289 717	4 008 067	1 310 885
Other operating revenue	22 027	14 388	4 979	(6 446)
Depreciation	(2 660)	(876)	(4 398)	(1 444)
Costs of employee benefits Consumption of materials and supplies and costs of goods sold	(40 792) (1 643)	(13 658) (671)	(33 685) (1 277)	(10 647) (520)
Energy and gas purchase for sale	(2 675 254)	(832 841)	(2 674 768)	(893 737)
Transmission and distribution services	(1 112 260)	(359 232)	(1 101 774)	(355 834)
Other external services	(117 069)	(38 297)	(104 205)	(32 548)
Taxes and charges Profit/(loss) on sale and liquidation of	(2 573)	(561)	(2 405)	(538)
property, plant and equipment	(8)	-	1 081	70
Other operating expenses	(20 127)	(4 665)	(37 110)	(8 933)
Operating profit	74 970	53 304	54 505	308
Financial expenses	(157 582)	(41 531)	(86 688)	(42 155)
Financial revenue	139 737	44 816	119 871	44 916
Dividend income	548 874	-	874 236	-
Profit before tax	605 999	56 589	961 924	3 069
Income tax	(20 464)	(9 796)	(23 966)	(6 510)
Net profit for the reporting period	585 535	46 793	937 958	(3 441)
Items that will be reclassified to profit or loss
- valuation of hedging instruments	(8 614)	20 480	8 504	(58 400)
- income tax	1 637	(3 891)	(1 616)	11 096
Items that will not be reclassified to profit or loss
- remeasurement of defined benefit plan	2 415	-	7 252	-
- income tax	(459)	-	(1 378)	-
Net other comprehensive income	(5 021)	16 589	12 762	(47 304)
Total comprehensive income	580 514	63 382	950 720	(50 745)
Earnings attributable to the Company's shareholders	585 535	46 793	937 958	(3 441)
Weighted average number of ordinary shares	441 442 578	441 442 578	441 442 578	441 442 578
Net earnings per share (in PLN per share)	1.33	0.11	2.12	-
Diluted earnings per share (in PLN per share)	1.33	0.11	2.12	-

The separate statement of profit or loss and other comprehensive income should be analyzed together with the notes which constitute an integral part of these condensed interim separate financial statements.

(all amounts in PLN '000, unless specified otherwise)

Separate statement of changes in equity

		S ha re l ita ca p ( fac e ) lue va	lua f Re tio va n o ha l ita s re ca p	l s ha To ta re ita l ca p	ha S re ium p rem	dg He ing res erv e	Re ser ve ita l ca p	d Re ine ta ing ea rn s	To l eq ity ta u
lan Ba 01 .01 .20 16 at ce as		44 1 44 3	14 6 5 75	58 8 01 8	4 62 67 7 3	3 98 0	2 64 0 35 8	2 42 7 97 6	10 28 8 0 05
fit Ne t p ro he he Ne t o t nsi r c om p re ve								58 5 5 35	58 5 5 35
inc om e						( ) 6 9 77		1 9 56	( ) 5 0 21
l co he ive inc To ta mp re ns om e d d ize in io rec og n p er						( ) 6 9 77		58 7 4 91	58 0 5 14
lan Ba 30 .09 .20 16 at ce as		44 1 44 3	14 6 5 75	58 8 01 8	4 62 67 7 3	( ) 2 9 97	2 64 0 3 58	3 01 5 4 67	10 86 8 5 19
		ha S re l ita ca p ( fac e ) lue va	lua f Re tio va n o ha l ita s re ca p	l s ha To ta re ita l ca p	ha S re ium p rem	dg He ing res erv e	Re ser ve ita l ca p	d Re ine ta ing ea rn s	To l eq ity ta u
lan Ba 01 .01 .20 15 at ce as		44 1 44 3	14 6 5 75	58 8 01 8	4 62 7 67 3	-	2 15 1 2 28	4 2 60 35 7	11 60 2 5 26
fit Ne t p ro								93 7 9 58	93 7 9 58
he he Ot nsi inc r c om p re ve om e						6 8 88		5 8 74	12 76 2
l co he ive inc To ta mp re ns om e d d ize in io rec og n p er						6 8 88		94 3 8 32	95 0 7 20
bu f t he fit Dis tri tio t p n o ne ro							48 9 1 30	( ) 48 9 1 30	-
de ds Div i n	20							( ) 20 7 4 78	( ) 20 7 4 78
lan Ba at 30 .09 .20 15 ce as		44 1 44 3	14 6 5 75	58 8 01 8	4 62 7 67 3	6 8 88	2 64 0 3 58	4 48 2 8 31	12 34 68 5 7

The separate statement of changes in equity should be analyzed together with the notes which constitute an integral part of these condensed interim separate financial statements.

Condensed interim separate financial statements for the period from 1 January to 30 September 2016

(all amounts in PLN '000, unless specified otherwise)

Separate statement of cash flows

	9 months ended 30.09.2016	9 months ended 30.09.2015
Cash flows from operating activities
Net profit for the reporting period Adjustments:	585 535	937 958
Income tax in the profit or loss	20 464	23 966
Depreciation	2 660	4 398
Loss / (Gain) on sale and liquidation of property, plant and equipment	8	(1 081)
(Gain) / Loss on disposal of financial assets	(2 420)	5 806
Interest income	(112 463)	(98 405)
Dividend income	(548 874)	(874 236)
Interest expense	110 912	67 611
Impairment loss on shares	42 000	13 087
	(487 713)	(858 854)
Income tax paid	(198 039)	(229 905)
Inflows due to settlements within Tax Group	176 359	184 479
Changes in working capital
Inventory	(122 524)	(44 091)
Trade and other receivables	82 561	57 107
Trade and other liabilities	(109 326)	133 273
Liabilities due to employee benefits	(5 000)	(7 198)
Provisions for other liabilities and charges	145 737	47 462
	(8 552)	186 553
Net cash flows from operating activities	67 590	220 231
Cash flows from investing activities
Acquisition of property, plant and equipment and intangible assets	(2 390)	(1 013)
Proceeds from disposal of property, plant and equipment	9	1 156
and intangible assets
Proceeds from disposal of financial assets	29 082	964 909
Acquisition of financial assets	(990 406)	(2 119 035)
Acquisition of subsidiaries	-	(16)
Repayable contribution to the share capital of a subsidiary	(199 899)	-
Dividends received	548 874	874 236
Proceeds related to future acquisition of financial assets	2 505	6 176
Interests received	104 340	89 095
Net cash flows from investing activities	(507 885)	(184 492)
Cash flows from financing activities
Proceeds from loans and borrowings	100 000	475 000
Proceeds from bond issue	450 000	2 240 000
Payments of finance lease liabilities	(101)	(73)
Payments related to future issue of bonds	(2 929)	(6 825)
Dividends paid	-	(207 478)
Interest paid	(109 524)	(52 637)
Net cash flows from financial activities	437 446	2 447 987
Net increase in cash	(2 849)	2 483 726
Balance at the beginning of the reporting period	1 397 632	440 815
Balance at the end of the reporting period	1 394 783	2 924 541

The separate statement of cash flows should be analyzed together with the notes which constitute an integral part of these condensed interim separate financial statements. 49

Condensed interim separate financial statements for the period from 1 January to 30 September 2016

(all amounts in PLN '000, unless specified otherwise)

1. General information about Enea S.A.

Name (business name):	Enea Spółka Akcyjna
Legal form:	joint-stock company
Country	Poland
Registered office:	Poznań
Address:	Górecka 1 Street, 60-201 Poznań
National Court Register - District Court in Poznań	KRS 0000012483
Telephone:	(+48 61) 884 55 44
Fax:	(+48 61) 884 59 59
E-mail:	enea@enea.pl
Website:	www.enea.pl
Statistical number (REGON):	630139960
Tax identification number (NIP):	777-00-20-640

Enea S.A., operating under the business name Energetyka Poznańska S.A., was registered in the National Court Register at the District Court in Poznań under KRS number 0000012483 on 21 May 2001.

As at 30 September 2016 the shareholding structure of Enea S.A. was the following: the State Treasury of the Republic of Poland 51.5% of shares, other shareholders 48.5%.

As at 30 September 2016 the statutory share capital of Enea S.A. equaled PLN 441,443 thousand (PLN 588,018 thousand upon adoption of IFRS-EU and considering hyperinflation and other adjustments) and was divided into 441,442,578 shares.

Trading in electricity is the core business of Enea S.A. (Enea, the Company).

Enea S.A. is the parent company in the Enea Group (the Group). As at 30 September 2016 the Group comprised of 13 subsidiaries and 9 indirect subsidiaries.

These condensed interim separate financial statements have been prepared on the going concern basis. There are no circumstances indicating that the ability of Enea S.A. to continue as going concern may be at risk.

2. Statement of compliance

These condensed interim separate financial statements have been prepared in accordance with International Financial Reporting Standard IAS 34 Interim Financial Reporting, as endorsed by the European Union, and approved by the Management Board of Enea S.A.

Condensed interim separate financial statements for the period from 1 January to 30 September 2016

(all amounts in PLN '000, unless specified otherwise)

The Management Board of the Company has used its best knowledge as to the application of standards and interpretations as well as measurement methods and principles applicable to individual items of the condensed interim separate financial statements of Enea S.A. in accordance with IFRS-EU as of 30 September 2016. The presented statements and explanations have been prepared using due diligence. These condensed interim separate financial statements have not been reviewed by a certified auditor.

The Company prepares condensed interim consolidated financial statements of Enea Group as at 30 September 2016 and for the nine-month period then ended. These condensed interim separate financial statements ought to be read together with those condensed interim consolidated financial statements and with the separate financial statements of Enea S.A. for the financial year ended 31 December 2015.

3. Accounting principles

These condensed interim separate financial statements have been prepared in accordance with accounting principles consistent with those applied during the preparation of the most recent annual separate financial statements for the year ended 31 December 2015.

Polish zloty has been used as a reporting currency of these condensed interim separate financial statements. The data in the condensed interim separate financial statements have been presented in PLN thousand (PLN '000), unless specified otherwise.

4. Materials estimates and assumptions

The preparation of these condensed interim separate financial statements in accordance with IAS 34 requires that the Management Board makes certain estimates and assumptions that affect the adopted accounting policies and the amounts disclosed in the condensed interim separate financial statements and notes thereto. The adopted assumptions and estimates are based on the Management Board's best knowledge of the current and future activities and events. The actual figures, however, can be different from those assumed. The estimates adopted for the needs of preparation of these condensed interim separate financial statements are consistent with the estimates adopted during preparation of the separate financial statements for the previous financial year. The estimates presented in the previous financial years do not exert any significant influence on the current interim period.

(all amounts in PLN '000, unless specified otherwise)

5. Composition of the Group – list of subsidiaries

	Name and address of the Company	Share of Enea S.A. in the total number of votes [%] 30.09.2016	Share of Enea S.A. in the total number of votes [%] 31.12.2015
1.	Enea Operator Sp. z o.o. Poznań, Strzeszyńska 58 Street	100	100
2.	Enea Wytwarzanie Sp. z o.o. Świerże Górne, commune Kozienice, Kozienice 1	100	100
3.	Enea Oświetlenie Sp. z o.o. 4 Szczecin, Ku Słońcu 34 Street	100	100
4.	Enea Trading Sp. z o.o. Świerże Górne, commune Kozienice, Kozienice 1	100	100
5.	Szpital Uzdrowiskowy ENERGETYK Sp. z o.o. Inowrocław, Wilkońskiego 2 Street	100	100
6.	Enea Logistyka Sp. z o.o. Poznań, Strzeszyńska 58 Street	100	100
7.	Enea Serwis Sp. z o.o. Lipno, Gronówko 30	100	100
8.	Enea Centrum Sp. z o.o. Poznań, Górecka 1 Street	100	100
9.	Enea Pomiary Sp. z o.o. Poznań, Strzeszyńska 58 Street	100	100
10.	ENERGO-TOUR Sp. z o.o. in liquidation Poznań, Strzeszyńska 58 Street	100	100
11.	Enea Innovation Sp. z o.o. Warszawa, Jana Pawła II 25 Street	100	100
12.	Lubelski Węgiel BOGDANKA S. A. Bogdanka, Puchaczów	65,99	65,99
13.	Annacond Enterprises Sp. z o.o. Warszawa, Jana Pawła II 25 Street	61	61
14.	Przedsiębiorstwo Energetyki Cieplnej Zachód Sp. z o.o. Białystok, Starosielce 2/1 Street	1001	1001
15.	Centralny System Wymiany Informacji Sp. z o.o. Poznań, Strzeszyńska 58 Street	1003	1003
16.	Przedsiębiorstwo Energetyki Cieplnej Sp. z o.o. Oborniki, Wybudowanie 56 Street	99,911	99,911
17.	Miejskie Przedsiębiorstwo Energetyki Cieplnej Sp. z o.o. Białystok, Warszawska 27 Street	86,361	86,361
18.	Miejska Energetyka Cieplna Piła Sp. z o.o. Piła, Kaczorska 20 Street	71,111	71,111
19.	EkoTRANS Bogdanka Sp. z o.o. Bogdanka, Puchaczów	65,992	65,992
20.	RG Bogdanka Sp. z o.o. Bogdanka, Puchaczów	65,992	65,992
21.	MR Bogdanka Sp. z o.o. Bogdanka, Puchaczów	65,992	65,992
22.	Łęczyńska Energetyka Sp. z o.o. Bogdanka, Puchaczów	58,532	58,532

¹– an indirect subsidiary held through interests in Enea Wytwarzanie Sp. z o.o.

²– an indirect subsidiary held through interests in Lubelski Węgiel BOGDANKA S.A.

³– an indirect subsidiary held through interests in Enea Operator Sp. z o. o.

⁴– on 16 June 2016 Extraordinary Shareholder's Meeting of Enea Oświetlenie Sp z o.o changed the company's Deed by changing the company's address to Szczecin 71-080, Ku Słońcu 34. The change of Deed was registered in the National Court Register on 6 July 2016.

Condensed interim separate financial statements for the period from 1 January to 30 September 2016

(all amounts in PLN '000, unless specified otherwise)

6. Property, plant and equipment

During the 9-month period ended 30 September 2016, the Company acquired property, plant and equipment amounting to PLN 187 thousand (during the period of 9 months ended 30 September 2015: PLN 0 thousand).

During the 9-month period ended 30 September 2016, the Company sold and liquidated property, plant and equipment for the total net amount of PLN 16 thousand (during the period of 9 months ended 30 September 2015: PLN 75 thousand).

7. Intangible assets

During the 9-month period ended 30 September 2016, the Company acquired intangible assets for the total amount of PLN 982 thousand (during the period of 9 months ended 30 September 2015: PLN 541 thousand).

During the 9-month period ended 30 September 2016, the Company did not complete any liquidation of intangible assets (during the period of 9 months ended 30 September 2015: net value of PLN 503 thousand).

8. Investments in subsidiaries

	30.09.2016	31.12.2015
Opening balance	8 323 493	8 951 265
Acquisition of investments	-	1 486 240
Repayable contribution to the share capital of a subsidiary	1 135 966	-
Disposal of investments	-	(8 854)
Transfer to assets held for sale	-	(17 487)
Change in impairment loss	(42 000)	(2 087 671)
Closing balance	9 417 459	8 323 493

Impairment loss on investments

	30.09.2016	31.12.2015
Opening balance	2 117 775	30 104
Addition	42 000	2 089 754
Utilized	-	(1 356)
Reclassification to assets held for sale	-	(727)
Closing balance	2 159 775	2 117 775

On 27 January 2016 the Extraordinary Shareholders' Meeting of Enea Wytwarzanie Sp. z o.o. adopted a resolution No. 1 referring to the repayable capital contribution in the total amount of PLN 749,672 thousand as follows:

• 1st tranche till 31 March 2016: PLN 199,899 thousand,
• 2nd tranche till 31 July 2016: PLN 349,874 thousand,
• 3rd tranche till 30 November 2016: PLN 199,899 thousand.

On 25 May 2016, the Extraordinary Shareholders' Meeting of Enea Wytwarzanie Sp. z o.o. adopted a resolution No. 1 referring to the repayable capital contribution in the total amount of PLN 386,294 thousand till 31 May 2016. On 14 March 2016 and 31 May 2016 Enea S.A. issued repayable contributions to the share capital of Enea Wytwarzanie Sp. z o.o. amounting to PLN 1,135,966 thousand (according to the resolutions of the Extraordinary General Meeting of

(all amounts in PLN '000, unless specified otherwise)

Enea Wytwarzanie Sp. o.o. dated on 27 January 2016 and 25 May 2016). The amount will be used to finance the investment expenditure of Enea Wytwarzanie Sp. z o.o. The maturity date has not been defined.

As at 30 June 2016 the Company analyzed indicators for impairment of shares in subsidiaries. As a result of the implementation of the act of 20 May 2016 on investments in wind farms, the method for qualifying of fixed assets in wind farms into real property taxation basis shall change starting from 2017. Due to the change in calculating real property taxes, the Company updated the impairment tests performed in 2015 in a subsidiary which deals with energy generation from wind sources and assessed the impact of the increased taxes upon the value-in-use of the shares. Based on the analysis, impairment on shares has been identified of PLN 42,000 thousand. The impairment loss reduced the Company's net result by PLN 42,000 thousand.

9. Assets held for sale

	30.09.2016	31.12.2015
Opening balance	8 410	12 876
Acquisition of investments	-	70
Reclassification from investments in subsidiaries	-	16 760
Impairment loss	-	(13 087)
Disposal of investments	-	(8 209)
Closing balance	8 410	8 410

During the 9-month period ended 30 September 2016 there were no changes in non-current assets held for sale. As at 30 September 2016 the shares in Szpital Uzdrowiskowy ENERGETYK Sp. z o.o. are presented as non-current assets held for sale. On the basis of a resolution of the Management Board of Enea S.A. No. 40/2016 dated 24 February 2016 the Company commenced proceedings related to the sale of shares in Szpital Uzdrowiskowy ENERGETYK Sp. z o.o. in a public invitation to negotiations. As a result, a share sales agreement was concluded and it will be binding should the investor fulfill the contractual obligations – it may take place this year.

10. Intercompany bonds

Enea Group adopted a model of intra-group financing of investments conducted by subsidiaries. Enea S.A. raises on a financial market long-term funds through borrowing or issuing bonds, and then distributes them within the Group. The table below presents currently ongoing programs of intra-group bonds issue pending as at 30 September 2016 and 31 December 2015:

Condensed interim separate financial statements for the period from 1 January to 30 September 2016

(all amounts in PLN '000, unless specified otherwise)

Date of contracts	Issuer	Final redemption	Credit limit in PLN '000	Amount used in PLN '000	Bonds issued as at 30.09.2016 (principal) in PLN '000	Bonds issued as at 31.12.2015 (principal) in PLN '000
10 March 2011	Enea Wytwarzanie Sp. z o.o.	31 March 2023	26 000	26 000	26 000	26 000
29 September 2011	Enea Wytwarzanie Sp. z o.o.	29 September 2019	14 500	14 500	9 500	9 500
23 July 2012	Enea Wytwarzanie Sp. z o.o.	22 July 2019	158 500	158 500	63 400	80 050
8 September 2012, agreement for the amount of PLN 4,000,000 thousand reduced by annex No. 2 dated 21 January 2015 to the amount of PLN 3,000,000	Enea Wytwarzanie Sp. z o.o.	from 15 June 2020 to 15 December 2020 depending on dates of bond series issue, the remaining amounts at the latest 15 June 2022	3 000 000	1 651 000	1 651 000	1 201 000
20 June 2013 as amended by annex No. 1 dated 9 October 2014 and annex No.2 dated 7 July 2015	Enea Operator Sp. z o.o.	Depending on dates of bond series issue, but not later than 17 June 2030	1 425 000	1 425 000	1 425 000	1 425 000
16 July 2013 as amended by annex No. 1 dated 17 January 2014 and annex No.2 dated 13 July 2015 and the agreement dated 30 May 2016 amending the bond issue terms	Enea Wytwarzanie Sp. z o.o.	31 May 2016	936 000	936 000	-	936 000
12 August 2014 in the amount of the PLN 260,000 thousand, increased to PLN 1,000,000 thousand by annex No. 1 dated 11 February 2015 and reduced by annex No. 2 dated 30 December 2015 to the amount of PLN 260,000 thousand	Enea Wytwarzanie Sp. z o.o.	Redemption in installments – final maturity 15 December 2026	260 000	260 000	260 000	260 000
17 November 2014	Enea Wytwarzanie Sp. z o.o.	31 March 2020	740 000	350 000	350 000	350 000
17 February 2015 in the amount of PLN 760,000 thousand, increased by annex No. 1 dated 3 June 2015 to the amount of PLN 1,000,000 thousand	Enea Wytwarzanie Sp. z o.o.	10 February 2020	1 000 000	1 000 000	1 000 000	1 000 000
7 July 2015	Enea Operator Sp. z o.o.	Redemption in installments – final maturity 17 June 2030	946 000	200 000	200 000	100 000
30 October 2015	Miejskie Przedsiębiorstwo Energetyki Cieplnej Sp. z o.o.	Redemption in installments – final maturity 31 March 2020	18 000	18 000	14 000	17 000
18 July 2016	Enea Operator Sp. z o.o.	Final maturity December 2017	360 000	360000	360 000	-
			Total		5 358 900	5 404 550
Transaction costs and the result of the effective interest rate measurement					(11 623)	(10 165)
			Total		5 347 277	5 394 385

(all amounts in PLN '000, unless specified otherwise)

On 8 January 2016, Enea S.A. acquired the second issue of bonds amounting to PLN 100,000 thousand issued by Enea Operator Sp. z o.o. under the Bond Issue Programme Agreement of 7 July 2015. The interest of the bonds is based on a floating interest rate. The bonds will be redeemed in installments, and the final date of redemption is planned for September 2030.

On 19 May 2016 Enea S.A. acquired series VI of bonds of PLN 300,000 thousand issued by Enea Wytwarzanie under a Programme Agreement of 8 September 2012. The interest of the bonds is based on floating interest rate, and the bond redemption date is 15 June 2022.

On 30 May 2016 Enea S.A., Enea Wytwarzanie Sp. z o.o. and mBank S.A. concluded an agreement to amend the Bond Issue Terms of 13 July 2015, which changed the bond redemption date to 31 May 2016. As of this date, Enea Wytwarzanie Sp. z o.o. purchased all AII 07/2015 series bonds of PLN 936,000 thousand.

The sums due to Enea S.A. under the Redemption Price and the Interests due as of the Redemption Date were settled in a non-cash transaction, through mutual compensation:

• Enea S.A. receivables from the Redemption Price at the Interest due as of the Redemption Date of AII072015 series Bonds,
• Enea Wytwarzanie Sp. z o.o's. receivables from Enea S.A. related to the repayable contribution to the share capital pf Enea Wytwarzanie Sp z o.o.

On July 18, 2016 Enea S.A as a guarantor, Enea Operator Sp z o.o. as an issuer and PKO Bank Polski S.A. as an agent, concluded an Executive Agreement for the Bond Issue Program for PLN 360,000 thousand. Thereunder, Enea Operator Sp. z o.o. may carry out one bond issue. On 28 July 2016 Enea Operator Sp. z o.o. issued bonds of PLN 360,000 thousand with a floating interest rate of WIBOR 3M plus margin. Redemption date is set for December 2017.

11. Allowance on trade and other receivables

	30.09.2016	31.12.2015
Opening balance of receivables allowance	52 697	53 640
Addition	10 063	27 810
Utilized	(7 885)	(28 753)
Closing balance of receivables allowance	54 875	52 697

During the 9-month period ended 30 September 2016 the allowance on the carrying amount of trade and other receivables increased by PLN 2,178 thousand (during the period of 9 months ended 30 September 2015 the impairment allowance increased by PLN 5,026 thousand).

12. Inventory

Certificates of origin:
	30.09.2016	31.12.2015
Opening balance	152 318	116 117
Acquisition	293 168	389 761
Redemption	(170 357)	(343 212)
Sale	(287)	(10 348)
Closing balance	274 842	152 318

The costs regarding redemption of certificates of origin are presented in the statement of profit or loss and other comprehensive income within Energy and gas purchase for sale.

Condensed interim separate financial statements for the period from 1 January to 30 September 2016

(all amounts in PLN '000, unless specified otherwise)

13. Cash and cash equivalents

	30.09.2016	31.12.2015
Cash in hand and at bank	62 055	2 791
Other cash	1 332 728	1 394 841
- bank deposits	1 332 578	1 394 789
- other	150	52
Total cash and cash equivalents	1 394 783	1 397 632
Cash disclosed in the statement of cash flows	1 394 783	1 397 632

As at 30 June 2016 and 31 December 2015 Enea S.A. had no restricted cash.

14. Financial assets measured at fair value through profit or loss

As at 30 September 2016 the carrying amount of the portfolio of financial instruments managed by a specialized institution amounted to PLN 221,278 thousand and comprised financial assets measured at fair value through profit or loss -treasury bills and bonds in the amount of PLN 220,502 thousand (as at 31 December 2015, carrying amount of the portfolio amounted to PLN 216,826 thousand, including financial assets measured at fair value through profit or loss treasury bills and bonds in the amount of PLN 215,488 thousand).

15. Financial instruments

The table below presents the fair values as compared to carrying amounts:

		30.09.2016	31.12.2015
	Carrying amount	Fair value	Carrying amount	Fair value
Non-current financial assets available for sale	38 402	38 402	23 402	23 402
Non-current intercompany bonds	5 244 542	5 326 763	5 339 352	5 423 882
Derivatives	-	-	844	844
Current intercompany bonds	102 735	102 844	55 033	49 227
Current financial assets measured at fair value	220 502	220 502	215 488	215 488
through profit or loss
Trade and other receivables	1 015 127	(*)	1 048 669	(*)
Cash and cash equivalents	1 394 783	1 394 783	1 397 632	1 397 632
Non-current loans, borrowings and debt securities	5 659 586	5 702 087	5 187 381	5 231 070
Derivatives	6 042	6 042	-	-
Current loans, borrowings and debt securities	102 057	102 269	31 905	26 951
Finance lease liabilities	33	33	43	43
Other financial liabilities	277 728	277 728	327 318	327 318
Trade and other liabilities	426 144	(*)	423 060	(*)

(*) - The carrying amount of trade and other receivables, trade payables and trade and other liabilities approximates their fair value.

Financial assets available for sale include shares in unrelated parties for which the ratio of interest in equity is lower than 20%. The positions comprises also shares in PGE EJ1 Sp. o.o. in the amount of PLN 23,402 thousand for which there is no quoted market price in an active market and whose fair value - because of the initial phase of the company's activity – is based on incurred cost.

(all amounts in PLN '000, unless specified otherwise)

Non-current intercompany bonds include acquired debt instruments – bonds with an original maturity exceeding 1 year.

Derivatives comprise the valuation of interest rate hedging transactions (Interest Rate Swap). The fair value of derivatives is determined by calculating the net present value based on two yield curves, i.e. the curve to determine the discount factor and curve used to estimate future rates of variable reference rates.

Current financial assets measured at fair value through profit or loss include an investment portfolio managed by a company specialized in professional cash management (Note 14). The fair value of the investment portfolio is estimated based on market quotations.

Current intercompany bonds include acquired debt instruments – bonds with an original maturity not exceeding 1 year.

The table below presents the analysis of financial instruments measured at fair value and classified into the following three levels:

Level 1 – fair value based on stock exchange prices (unadjusted) offered for identical assets or liabilities in active markets, Level 2 – fair value determined based on market observations instead of market quotations (e.g. direct or indirect reference to similar instruments traded in the market),

Level 3 – fair value determined using various valuation methods, but not based on any observable market information.

	30.09.2016
	Level 1	Level 2	Level 3	Total
Financial assets measured at fair value through profit or loss
Non-derivative financial assets held for trading	220 502	-	-	220 502
Total	220 502	-	-	220 502
Financial liabilities measured at fair value through profit or loss
Interest Rate Swap used for hedging	-	6 042	-	6 042
Total	-	6 042	-	6 042
	31.12.2015
	Level 1	Level 2	Level 3	Total
Financial assets measured at fair value through profit or loss
Non-derivative financial assets held for trading	215 488	-	-	215 488
Interest Rate Swap used for hedging	-	844	-	844
Total	215 488	844	-	216 332

(all amounts in PLN '000, unless specified otherwise)

16. Loans, borrowings and debt securities

	30.09.2016	31.12.2015
Long-term
Bank loans	1 586 256	1 518 674
Bonds	4 073 330	3 668 707
Total	5 659 586	5 187 381
Short-term
Bank loans	42 755	3 523
Bonds	59 302	28 382
Total	102 057	31 905
Total loans, borrowings and debt securities	5 761 643	5 219 286

Loans

At present Enea S.A. has loan agreements concluded with EIB for a total amount of PLN 2,371,000 thousand (agreement A for PLN 950,000 thousand, agreement B for PLN 475,000 thousand and agreement C for PLN 946,000 thousand).

The funds from EIB are designated for financing of long-term investment plan for the modernization and extension of the power grids of Enea Operator Sp. z o.o. Funds from Agreement A and B are fully utilized and the availability period for Agreement C is March 2017. Interest rate on loans can be fixed or floating.

In January 2016, Enea S.A. received the second tranche of a loan within C Agreement that was awarded by the European Investment Bank in the amount of PLN 100,000 thousand. The loan is denominated in PLN with a floating interest rate based on the WIBOR 6-month plus the Bank's margin. The tranche will be repaid in installments, and the final loan repayment is planned for September 2030.

Bond issue programs

Enea S.A. concludes agreements for bonds issue programs to finance current operations and investments of Enea S.A. and its subsidiaries.

No.	Name of bonds issue programme	Date of the conclusion of programme	Amount of the programme	Amount issued as at 30.09.2016	Amount issued as at 31.12.2015	Redemption date
1.	Bonds Issue Programme Agreement with PKO BP S.A., PEKAO S.A., BZ WBK S.A. and Bank Handlowy w Warszawie S.A.	21 June 2012	3 000 000	1 651 000	1 201 000	Redemption from June 2020 till June 2022.
2.	Bonds Issue Programme Agreement with Bank Gospodarstwa Krajowego.	15 May 2014	1 000 000	1 000 000	1 000 000	Redemption in installments, final maturity is December 2026.

Condensed interim separate financial statements for the period from 1 January to 30 September 2016

(all amounts in PLN '000, unless specified otherwise)

	TOTAL		9 700 000	4 132 632	3 697 089
	Transaction costs and the result of the effective interest rate measurement			(18 368)	(3 911)
	TOTAL		9 700 000	4 151 000	3 701 000
4.	Bonds Issue Programme Agreement with Bank Gospodarstwa Krajowego	3 December 2015	700 000	-	-	Redemption in installments, final maturity is September 2027.
3.	Bonds Issue Programme Agreement with ING Bank Śląski S.A., PKO BP S.A., Bank PEKAO S.A. and mBank S.A.	30 June 2014	5 000 000	1 500 000	1 500 000	Redemption of a given series in February 2020 and September 2021.

During the 9-month period ended 30 September 2016, Enea S.A. did not change the Programme Agreements, neither concluded any new agreements. Under a Program Agreement of 21 June 2012 , Enea S.A. issued VI series of bonds of PLN 300,000 thousand on 19 May 2016 and VII series of bonds of PLN 150,000 thousand on 19 August 2016. The interest of the bonds is based on a variable interest rate, and the bond redemption date is 15 June 2022.

Interest rate risk hedging transactions

During the 9-month period ended 30 September 2016, Enea S.A. concluded interest rate swap transactions to hedge interest rate risk related to the debt of PLN 1,440,000 thousand. On 30 September 2016 the total value of the IRS's transactions amounted to PLN 4,435,000 thousand. Concluded transactions will substantially affect the predictability of the cash relating flows of expenditure and financial costs. The valuation of these financial instruments is presented in "Derivatives".

As at 30 September 2016 valuation of derivatives amounted to PLN 6,042 thousand.

Financing conditions – covenants

Financing agreements assume compliance by the Company and the Group with certain financial ratios. As at 30 September 2016 and the date of these condensed interim separate financial statements, the Company did not breach the regulations of loan agreements, on the basis of which the Company would be required to early repayment of longterm debt.

17. Other financial liabilities

Cash management in Enea Group is performed by Enea S.A., allowing efficient cash surplus management (economies of scale) and reduction of external financing costs. Cash management covers subsidiaries which constitute Enea Tax Group and is based on "Cash management system between groups of bank accounts" – cash pooling.

Under this service at the end of each day cash surplus from a bank accounts of a participant is transferred to a bank account of the Pool Leader – Enea S.A. On the next day account balances are reversed and cash transferred back to the bank account of the participant.

(all amounts in PLN '000, unless specified otherwise)

18. Deferred income tax

Changes in the deferred tax asset (after the net-off of the asset and liability):

	30.09.2016	31.12.2015
Opening balance	63 316	25 726
Change recognized in profit or loss	15 072	39 899
Change recognized in other comprehensive income	1 178	(2 309)
Closing balance	79 566	63 316

During the 9-month ended 30 September 2016, the Company's profit before tax was credited with PLN 15,072 thousand as a result of increase in net deferred asset (during the period of 9 months ended 30 September 2015 the Company's profit before tax was credited with PLN 9,351 thousand as a result of an increase in net deferred tax assets).

19. Provisions for other liabilities and charges

Non-current and current provisions for other liabilities and charges:

			30.09.2016	31.12.2015
Non-current			5 763	10 905
Current			412 413	261 534
Total			418 176	272 439
	Provision for non contractual use of property	Provision for other claims	Provision for certificates of origin	Provision for certificates of origin
Balance as at 01.01.2016	17 161	10 288	244 990	272 439
Increase in provisions	343	3 220	328 903	332 466
Provisions used	(55)	(73)	(170 357)	(170 485)
Provisions reversed	(6 864)	(9 380)	-	(16 244)
Balance as at 30.09.2016	10 585	4 055	403 536	418 176

A description of material claims and contingent liabilities has been presented in note 23.2.

During the 9-month period ended 30 September 2016 the provisions for other liabilities and charges increased by the net amount of PLN 145,737 thousand, mainly due to the settlement of obligation related to sale to end users of electricity generated in a renewable source or in cogeneration – the absence of a decision of the President of the Energy Regulatory Office on the repeal of certificates of origin concerning the 2016 obligation (in the period of 9-months ended on 30 September 2015, the provisions for other liabilities and changes increased by PLN 47,462 thousand).

20. Dividend

The Company will not pay out the dividend for the financial year from 1 January 2015 to 31 December 2015 due to the net loss incurred in that period. On 27 June 2016, the Ordinary General Meeting of Enea S.A. adopted a Resolution no. 7

(all amounts in PLN '000, unless specified otherwise)

on the coverage of the net loss of PLN 1,116,888 thousand for the financial year from 1 January 2015 to 31 December 2015 from retained earnings.

On 30 June 2015 the Ordinary General Meeting of Enea S.A. adopted a Resolution no. 7 concerning net profit distribution for the financial period from 1 January 2014 to 31 December 2014 under which the dividend for shareholders amounted to PLN 207,478 thousand. Dividend per share amounted to PLN 0.47.

21. Related party transactions

The Company concludes transactions with the following related parties:

1. Companies of the Enea Group

	01.01.2016 - 30.09.2016	01.01.2015 - 30.09.2015
Purchases, including:	3 193 531	3 345 525
materials	321	54 882
services	1 163 185	1 160 866
other (including energy and gas)	2 030 025	2 129 777
Sales, including:	196 618	146 089
energy	178 083	127 380
services	1 103	959
other	17 432	17 750
Interest income, including:	109 076	93 699
bonds	108 919	93 473
loans	157	226
Dividend income	548 874	874 236
	30.09.2016	31.12.2015
Receivables	184 007	181 534
Liabilities	771 396	732 428
Financial assets - bonds	5 347 277	5 394 385
Other financial liabilities	277 728	327 318

In accordance with Corporate Income Tax Act regulations concerning conclusion on transactions under arm's length do not apply to legal entities comprising tax group. Transactions with group entities which are not part of the Tax Group are concluded under arm's length terms and their conditions do not differ from those applied in transactions with other entities.

2. Transactions concluded between the Company and members of its governing bodies fall within two categories:

• those related to the appointment of Members of Supervisory Boards,
• resulting from other civil law agreements.

(all amounts in PLN '000, unless specified otherwise)

The value of transactions has been presented below:

		Management Board of the Company Supervisory Board of the Company
Item	01.01.2016 - 30.09.2016	01.01.2015 - 30.09.2015	01.01.2016 - 30.09.2016	01.01.2015 - 30.09.2015
Remuneration under managerial and consultancy agreements	11 565**	5 951*	-	-
Remuneration relating to appointment for members of management or supervisory bodies	-	-	347	210
TOTAL	11 565	5 951	347	210

* Remuneration includes bonuses for 2014 paid to the members of the Management Board during the second quarter of 2015.

** Remuneration includes bonuses for 2015 and compensation resulting from non – competition agreements for former members of the Management Board in the amount of PLN 8,821 thousand.

During the 9-month period ended 30 September 2016 there were no loans granted from the Company's Social Benefits Fund to the members of the Supervisory Board (PLN 0 thousand during the 9-month period ended 30 September 2015). During this period repayments of these loans amounted to PLN 9 thousand (PLN 10 thousand during the 9-month period ended 30 September 2015).

Other transactions resulting from civil law agreements concluded between Enea S.A. and members of the Company's governing bodies concern only private use of Company's cars by Members of the Management Board of Enea S.A.

3. Transactions with entities whose shares are held by the State Treasury of the Republic of Poland

Enea S.A. also concludes business transactions with entities of the central and local administration and entities whose shares are held by the State Treasury of the Republic of Poland.

The transactions concern mainly:

• purchase of electricity and property rights resulting from certificates of origin as regards renewable energy and energy cogenerated with heat from companies controlled by the State Treasury;
• sale of electricity, distribution services and other related fees, provided by the Company both to central and local administration bodies (sale to end users) and controlled by the State Treasury (wholesale and retail sale to end users).

Such transactions are concluded under arm's length terms and their conditions do not differ from those applied in transactions with other entities. As the Company does not keep a register which would allow to aggregate the values of all transactions with state institutions and entities controlled by the State Treasury therefore the turnover and balances with related parties disclosed in these condensed interim separate financial statements do not include data related to transactions with entities controlled by the State Treasury.

22. Future liabilities under contracts concluded as at the end of the reporting period

Contractual obligations related to the acquisition of property, plant and equipment and intangible assets assumed as at the end of the reporting period, not yet recognized in the statement of financial position:

(all amounts in PLN '000, unless specified otherwise)

	30.09.2016	31.12.2015
Acquisition of intangible assets	222	2 097
	222	2 097

23.Contingent liabilities and proceedings before courts, arbitration or public administration bodies

23.1 Guarantees for credit facilities and loans as well as other sureties granted by the Company

On 4 August 2016, acting as a Guarantor, Enea S.A. concluded a surety agreement with Polenergia Obrót S.A. The agreement concerns a surety for subsidiary's (Enea Trading Sp z o.o.) obligations, up to a maximum amount of PLN 5,000 thousand resulting from transactions concerning electricity and property rights' wholesale.

The table below presents actual as at 30 September 2016 major bank guarantees under the agreements concluded with BZ WBK S.A. Bank and Pekao S.A. Bank to limits specified therein:

Guarantee date	Guarantee period	Company from Enea Group	Recipient	Name of Guarantee	Bank - contractor	Amount of guarantee in PLN thousand
2015-06-12	2018-05-31	Enea Wytwarzanie Sp. z o.o.	IRGiT	Payment of deposit	BZ WBK S.A.	8 000
2015-06-29	2018-05-31	Enea Trading Sp. z o.o.	IRGiT	Payment of deposit	BZ WBK S.A.	10 000
2016-01-01	2017-02-28	Enea S.A.	Górecka Projekt Sp. z o.o.	Payment for rent	BZ WBK S.A.	1 650
2016-09-14	2016-11-18	Enea S.A.	Zakład Wodociągów i Kanalizacji Sp. z o.o.	The tendering Guarantee	BZ WBK S.A.	1 000
2016-09-29	2018-11-27	Enea S.A.	Górnośląskie Przedsiębiorstwo Wodociągów S.A.	The tendering Guarantee	BZ WBK S.A.	1 000
	Total of guarantees issued					21 650

The remaining guarantees granted by Enea S.A as at 30 September 2016 amounted to PLN 4,396 thousand. The total value of guarantees granted by Enea S.A. to secure liabilities of Enea Group companies as at 30 September 2016 amounted to PLN 229,852 thousand.

23.2. Pending proceedings before courts of general jurisdiction

Actions brought by the Company

Actions which Enea S.A. brought to common courts of law refer to claims for receivables due to supply of electricity and claims for other receivables – illegal consumption of electricity, connections to the power grid and other specialist services rendered by the Company.

As at 30 September 2016, the total of 8,521 brought by the Company were pending before common courts for the total amount of PLN 52,697 thousand (7,066 cases for the total amount of PLN 51,978 thousand as at 31 December 2015).

(all amounts in PLN '000, unless specified otherwise)

None of these cases can significantly affect the Company's net result.

Actions brought against the Company

Actions against the Company are brought both by natural and legal persons. They mainly refer to such issues as compensation for interrupted delivery of electricity, identification of illegal electricity consumption and compensation for the Company's use of real property where electrical devices are located. The Company considers actions concerning non-contractual use of real property not owned by the Company as particularly important.

As at 30 September 2016 the total of 146 cases against the Company were pending before common courts for the total amount of PLN 53,046 thousand (117 cases for the total amount of PLN 18,229 thousand as at 31 December 2015). The provisions related to these cases are presented in note 19.

None of the cases can significantly affect the Company's net result.

23.3. Motions for settlements of not balanced energy trading in 2012

On 30 and 31 December 2014 Enea S.A. submitted motions for settlement to:

	Amount in PLN thousand
PGE Polska Grupa Energetyczna S.A.	7 410
PKP Energetyka S.A.	1 272
TAURON Polska Energia S.A.	17 086
TAURON Sprzedaż GZE Sp. z o.o.	1 826
FITEN S.A.	207
Total	27 801

The subject of motions was claim for the payment of electric energy consumed under the system of energy balancing. Claimed companies earned unjustified benefits by refusing Enea S.A. to issue invoice corrections for 2012.

Till the reporting date eight proceedings were conducted but claims of Enea S.A. were not accepted.

23.4. Dispute with PGE GiEK S.A. concerning energy origin certificate prices.

Before the District Court in Poznań the proceeding brought by PGE Górnictwo i Energetyka Konwencjonalna S.A. is pending against the Company for the payment of PLN 42,351 thousand concerning the payment for purchased certificates of origin. Enea SA made a deduction from the payment for certificates of origin (by offsetting with invoices for certificates of origin) in respect of a damage caused by PGE GiEK S.A. to Enea S.A. The damage resulted from the fact that PGE GiEK S.A. did not fulfill the contractual obligation to accede to renegotiate long-term contracts for certificates of origin in accordance with the adaptive clause applicable to both Parties. The adaptive clause is applicable in the event of changes in facts or legal status related to the support scheme for the renewable energy sources based on the obligation to redeem the certificates of origin (incorporating property rights) which result in disruption of the

(all amounts in PLN '000, unless specified otherwise)

contractual balance and equivalence of benefits for parties, which, in the opinion of Enea S.A., occurred in the case of contracts with PGE GiEK S.A.

As of these condensed interim separate financial statements, the court has not taken any decision in this matter.

24. The participation in the construction of the atomic power plant programme

On 15 April 2015 KGHM, PGE TAURON and Enea concluded Share Purchase Agreement in PGE EJ 1. Each of KGHM, TAURON and Enea acquired from PGE 10% of shares (total 30%) in PGE EJ 1. Enea paid PLN 16 million for the acquired shares.

On 29 July 2015 the Extraordinary Shareholders' Meeting of PGE EJ 1 adopted a resolution to increase the share capital of the Company approximately by PLN 70 million through issue of 496,450 new shares in the nominal value of PLN 141 each and cover them with cash. According to the decision of the Extraordinary Shareholders Meeting Enea acquired 49,645 shares in the total nominal value of approximately PLN 7 million, and covered them with cash of approximately PLN 7 million.

In Q3 2016, KGHM, PGE, TAURON and Enea continued their work on the preparation to the construction of the nuclear plant in Poland project.

The Shareholders Agreement parties predict that subsequent decision on the declaration of further participation of the Parties in the next phase of the project will be taken after the completion of the Initial Phase immediately prior to the decision of the Integrated proceeding.

25. Essential information which could potentially affect the financial result of Enea S.A.

25.1. Signing of a Letter of Intent with Energa S.A. concerning the construction and use of a power unit at the Ostrołęka Power Plant

On 19 September 2016, Enea S.A. and Energa S.A. signed a Letter of Intent, concerning cooperation in the preparation, construction and operation of a modern 1.000 MW coal-fired unit in the Ostrołęka Power Plant (the "Investment", "Ostrołęka C").

The Parties intent to elaborate an effective business model for Ostrołęka C, verify its project documentation and optimize the technical and economic parameters of the new power unit. The cooperation also assumes the preparation of documents required to initiate a tender procedure and appoint a general contractor for the Investment.

The Parties agree that the realization of the Investment will benefit the energy security in Poland, will satisfy the highest environmental standards and will provide stable, highly efficient and low-emission source of energy in the National Power System.

The Parties hereby agree that the rules of cooperation established upon in the Letter of Intent should contribute to the decision to announce a tender in 2016 with the aim to complete the Investment in the second half of 2023.

Potential expenditures are estimated at approx. PLN 5.5 - 6 million / MW. The Parties do not rule out the participation of other partners in the Investment. Its further parameters and the scale of the commitment of both Parties will be analyzed.

(all amounts in PLN '000, unless specified otherwise)

25.2. Submission of a preliminary offer for the purchase of EDF assets in Poland with partners

On 16 September 2016, Enea S.A. and PGE S.A., Energa S.A. and PGNiG Technika S.A. jointly submitted a preliminary non-binding offer to EDF International SAS for the purchase of shares in companies belonging to EDF in Poland, holding conventional production assets and conducting service acticity.

The assets include, in particular, the Rybnik Power Plant, the heat and power plant in Kraków, the heat and power plant in Gdańsk, the heat and power plant in Gdynia, the heat and power plant and heating network in Toruń, the heat and power plant and heating network in Wrocław agglomeration, the heating network in Zielona Góra, and the gas unit in Toruń. In the event of admission to the next stage of the transaction, a detailed due diligence will be carried out and it will constitute the basis for decision on further steps in the transaction, including the submission of a potential binding offer after obtaining the required corporate approvals.

25.3. Submission an offer for the purchase of 100% shares of ENGIE Energia Polska SA

On 30 September 2016, the Company submitted an offer for the purchase of 100% of ENGIE Energia Polska S.A. shares. The offer was submitted in the manner specified in the process initiated by ENGIE, the owner of 100% of ENGIE Energia Polska S.A. shares, which considers their disposal.

25.4. Signing of a Letter of Intent relating to the preliminary interest in the financial involvement in Katowicki Holding Węglowy S.A.

On 28 October 2016 Enea S.A. and Węglokoks S.A. and Towarzystwo Finansowe Silesia Sp. z o.o. ("Investors") signed a Letter of Intent expressing the preliminary interest in the financial involvement in Katowicki Holding Węglowy S.A. seated in Katowice ("KHW") or in KHW's assets.

Investors' involvement in KHW depends on the satisfaction of numerous conditions related to, among others, presentation of an acceptable business plan and financial model, as well as obtaining the required corporate approvals. The Investors' final decisions as regards the participation in KHW will be made, among others, after the due-diligence analysis performed and after the determination of the final form of all the other arrangements.

26. Changes in Supervisory Board

On 5 September 2016, Mr. Paweł Skropiński was appointed to the Supervisory Board of Enea S.A. (the appointment through the statement of the Minister of Energy).

27. Events after the end of the reporting period

On 19 October 2016, PGE Polska Grupa Energetyczna, ENERGA, Enea and Tauron Polska Energia established the ElectroMobility Poland company. The activity of the Company is to contribute to the electromobility system development in Poland. The share capital of the new company will amount to PLN 10 million. Each of the founding companies of ElectroMobility Poland will acquire 25 per cent of the share capital, thus obtaining 25 per cent of voting rights at the general shareholders' meeting.

On 28 October 2016 Enea S.A. made representations (depending on the agreement) on termination or on withdrawal from long-term agreements for purchase of property rights resulting from energy certificates of origin from renewable sources (so-called green certificates) by the Company ("Agreements").

Condensed interim separate financial statements for the period from 1 January to 30 September 2016

(all amounts in PLN '000, unless specified otherwise)

The Agreements were concluded in 2006-2014 with the following contractors holding installations generating electricity from renewable sources ("Contractors"):

• Farma Wiatrowa Krzęcin Sp. z o.o. seated in Warsaw;
• Megawind Polska Sp. z o.o. seated in Szczecin;
• PGE Górnictwo i Energetyka Konwencjonalna S.A. seated in Bełchatów;
• PGE Energia Odnawialna S.A. seated in Warsaw;
• PGE Energia Natury PEW sp. z o.o. seated in Warsaw;
• "PSW" Sp. z o.o. seated in Warsaw;
• in.ventus Sp. z o.o. EW Śniatowo Sp.k. seated in Poznań;
• Golice Wind Farm Sp. z o.o. seated in Warsaw.

The Company assumes that the Agreements should be terminated, as a rule, until the end of November 2016. The exact termination date of individual Agreements depends on the contractual terms.

The reason for termination/withdrawal from particular Agreements by the Company was exhaustion of the possibilities to restore the contractual balance and equivalence of benefits for parties resulting from law amendments.

The financial result resulting from the termination of the Agreements for the Company will be to avoid a loss amounting to the difference between contractual prices and the market price of green certificates.

The estimated total value of Enea's contractual obligations amounted to approximately PLN 1,187 million net. The above value was calculated according to the price formulas adopted in the Agreements for the period from 28 October 2016 r. to the end of originally assumed duration of the Agreements.

The following law amendments occurring after the conclusion date of the above mentioned Agreements, in particular:

• the regulation of the Minister of Economy dated 18 October 2012 regarding the detailed scope of obligations to obtain certificates of origin and submit them for redemption, make the compensatory payment, purchase electricity and heat generated in renewable energy sources and obligation to confirm the data relating to the volume of electricity generated in a renewable energy source (Journal of Laws from 2012, item 1229);

• the act of 20 February 2015 on renewable energy sources (Journal of Laws from 2015, item 478) and related successive amendments and announced draft amendments to laws, i.e. in particular:

• the act of 22 June 2016 on amending the act on renewable energy sources and some other acts (Journal of Laws dated 2016, item 925); and

• draft regulation of the Minister of Energy relating to the quantitative share of the sum of electricity resulting from redeemed certificates of origin confirming electricity generation in renewable energy sources which is to be published based on the authorisation resulting from Article 12 item 5 of the act of 22 June 2016 on amending the act on renewable energy sources and some other acts,

resulted in the objective lack of a possibility to develop reliable models forecasting the prices of green certificates.

In relation to the above, in the Company's assessment, as at the date of these condensed interim consolidated financial statements, it is not possible to determine the future market prices of green certificates which the Company would be obliged to acquire until the end of originally assumed duration of the Agreements'.

(all amounts in PLN '000, unless specified otherwise)

The Company informs that some of its key Contractors also pointed to the fact that:

• the law amendments had and have some impact on the prices of green certificates; and
• they led to the disruption of the contractual balance and equivalence of benefits in the long-term agreements for sale of green certificates.