PROFESSIONAL JUDGEMENT

The group exercises joint control over an entity if it must cooperate with all co-investors to manage its significant activities, which means that none of the co-investors individually controls it and cannot direct it without co-operation with the other co-investors. Based on its own judgement, the Group determines the type of joint arrangement to which it is a party, taking into account its rights and obligations, taking into account the structure and legal form as well as the terms and conditions of the agreement agreed by the sides.

The Group has classified below as joint ventures, which are accounted for in the consolidated financial statements using the equity method, investments in those entities where the agreements give all parties to the agreement (co-investors) joint control over the enterprises, decisions regarding significant activities require unanimous consent of all parties to the agreement, and the legal form of the separate entities does not give the sides to the contract a right to their assets and an obligation to pay their liabilities.

Baltic Gas spółka z ograniczoną odpowiedzialnością i wspólnicy sp. k. and Baltic Gas Sp. z o. o. (Komplementarius) were classified as investments accounted for using the equity method based on the analysis of the cooperation agreement between LOTOS Upstream Sp. z o. o. and CalEnergy Resources Poland Sp. z o. o. in the field of development and exploitation of the B-4 and B-6 gas condensate deposits in the Baltic Sea. The presented below percentage share in the ownership of Baltic Gas spółka z ograniczoną odpowiedzialnością i wspólnicy sp. k. was determined on the basis of contributions made by individual partners to the total of contributions on 31 December 2022:

• Baltic Gas Sp. z o.o. (Komplementariusz) – 0,0004%
• LOTOS Upstream Sp. z o.o. (Komandytariusz) – 46,1158%
• CalEnergy Resources Poland Sp. z o.o. (Komandytariusz) – 53,8838%

Baltic Gas Spółka z ograniczoną odpowiedzialnością i Wspólnicy Spółka komandytowa (Baltic Gas Sp. z o.o. i Wspólnicy Sp. k.) is a partnership. The company's articles of association stipulated the shareholders' participation in its profits and losses in such a way that Baltic Gas Sp. z o. o. holds a 0.001% share in profits and 100% in losses, LOTOS Upstream Sp z o.o. holds a 50.9995% share in profits and 0% in losses, and CalEnergy Resources Poland Sp. z o. o. has a 48.9995% share in profits and 0% in losses. At the same time, it is not possible to indicate the percentage share in votes, as matters remaining to be decided by the shareholders, as specified in the articles of association, require unanimous consent in matters expressly defined in the articles of association, or a unanimous resolution of the shareholders on the determination of the decision-making procedure in the case of other matters, not specified in the articles of association.

In addition, based on professional judgment, the Group assessed that its investments in Butadien Kralupy and Rafineria Gdańska constitute a joint operation, and therefore the Group recognizes its share (respectively 51% in the case of Butadien Kralupy and 70% in relation to Rafineria Gdańska) in assets, liabilities, revenues and costs of these entities.

The contractual arrangements for these investments indicate that sides to the contract are entitled to substantially all economic benefits generated by the companies' assets and are their main source of income ensuring the continuity of these companies' operations.

The obligation of the sides to the agreement to purchase the entire production of Butadien Kralupy reflects the exclusive dependence of this company on the sides in terms of generating cash flows, which means that the parties are effectively obliged to finance the settlement of the company's liabilities.

In the case of Rafineria Gdańska, the applicable processing agreement grants the sides to the agreement (processors) access to the production capacity of the refinery in Gdańsk and excludes the possibility of using the refinery's production capacity by third sides. In addition, based on the signed agreement, processors are obliged to cover the fixed costs of the refinery's operation, even during its downtime, so liabilities incurred by Rafineria Gdańska are covered almost exclusively by cash flows obtained from Processors, which indicates that Processors have obligations arising from the liabilities of Rafineria Gdańska and are the main source of cash flows contributing to the continuity of this company's operations.

As part of the merger with LOTOS Group and PGNIG Group, the following investments were acquired:

1. Joint ventures: Baltic Gas Sp. z o.o., Baltic Gas Sp. z o. o. and partners Sp. k., UAB Minijos Nafta, EuRoPol GAZ S.A., Elektrociepłownia Stalowa Wola S.A., Ash Separation Plant Siekierki S.A.,
   As a result of the merger with LOTOS Group, the share of ORLEN in the investment in Naftoport increased by 8.97%,       as a result of which the investment was classified as a joint venture.
2. Associates - Zakład Wytwarzanie Urządzeń Gazowniczych "Intergaz" Sp. z o.o., PFK Gaskon S.A., DEWON S.A.
   In addition, as a result of the merger with PGNiG, the investment in Polimex Mostostal increased to 32.52%

Upstream activities conducted by ORLEN Upstream Canada Ltd were largely conducted as joint operations in all areas of activity, i.e. Ferrier, Kakwa, Kaybob, Lochend.
The ORLEN Upstream Group shows the value of assets, as well as revenues and costs related to them, in proportion to its shares.

Investments accounted for under equity method

Share in profit from investments accounted for under equity method

Condensed financial information of the joint ventures of Basell ORLEN Polyolefines Group

Condensed financial information of the joint ventures of Baltic Power Sp. z o.o.

Condensed financial information of the joint ventures of EuRoPol GAZ S.A

Condensed financial information of the associate of POLIMEX-Mostostal S.A. (ENERGA Group)
The terms of the investment agreement signed in 2017 give the Group the opportunity to influence the financial and operating policy of Polimex-Mostostal as well as determine the composition of the company's governing bodies, which translates into the Group's significant influence. In connection with the above, the share in Polimex-Mostostal was classified as an associate accounted for using the equity method.

Following the merger with the PGNiG Group, the Group's shareholding in Polimex-Mostostal increased to 32.52%.

Significant restrictions on the ability to transfer funds to the Group from interests in joint ventures
Elektrociepłownia Stalowa Wola S.A. is a special purpose vehicle established in 2010 on the initiative of Tauron Polska Energia S.A. and the former company PGNiG S.A., as part of which the investment for the construction of a gas and steam unit in Stalowa Wola was completed, commissioned on 30 September 2020. As at 31 December 2022, ECSW has signed loan agreements with Bank Gospodarstwa Krajowego (BGK) and the former company PGNiG S.A. and a subordination agreement with the former company PGNiG S.A., PGNiG Termika S.A., Tauron Polska Energia S.A., Tauron Wytwarzanie S.A. and BGK, where there are restrictions on transfers of funds. In particular, ECSW cannot:

• declaring or paying any compensation, dividend, fee or other distribution (or interest on any unpaid compensation, dividend, fee or other distribution, whether in cash or in kind) in respect of the shares held;
• repay or distribute dividends or undistributed profits until the loan to BGK and ORLEN (as the legal successor of PGNiG) is repaid (senior debt), the repayment date of which is 14 June 2030.

The value of investments in ECSW as at 31 December 2022 amounted nil.