Estimates of selected factors with material bearing on LOTOS Group’s consolidated performance in Q3 2015
Report no. 29/20152015-10-14

The Management Board of Grupa LOTOS S.A. (the ‘Company’) announces that on October 14th 2015 the Company filed appeals with the Director of the Tax Chamber in Gdańsk against two decisions issued by the Director of the Tax Audit Office in Bydgoszcz (‘TAO’), in which the latter assessed the VAT payable by the Company for the period from January to December 2010 and from January to December 2011, identifying VAT arrears of PLN 48.4m for 2010 and PLN 112.5m for 2011.

In these decisions, the TAO Director stated that certain transactions with two of the Company’s trade partners involved fraudulent tax practices, arguing that the Company failed to exercise due care in executing transactions with those trade partners and that it should at least have been aware that the transactions were connected to and resulted from a tax fraud committed at an earlier trading stage, which precluded the Company from making any VAT deductions.

Having reviewed the decisions, the Company dismissed the TAO Director’s allegations as entirely groundless and lodged the appeals.

In accordance with the accounting regulations applicable to the Company, the Management Board decided that the receipt of the decisions concerning tax arrears would be taken into account in the Company’s Q3 2015 financial report. The estimated effect of the related adjustment on the consolidated operating profit/loss is approximately PLN 161m. Furthermore, approximately PLN 78m attributable to interest on the tax arrears will be included in the period’s finance costs.

The legal basis for the publication of this Current Report is Art. 56.1.1 of the Act on Public Offering, Conditions Governing the Introduction of Financial Instruments to Organised Trading, and Public Companies, dated July 29th 2005.