One of the LOTOS Group's primary objectives until 2015 is the implementation of its social responsibility strategy, which supports the organization in the process of achieving the objectives of its business strategy. This creates opportunities for the best possible use of organizational resources and competences in order to generate economic and social values, benefiting both the company and its environment. Strategic directions in this respect are determined by the Board of Grupa LOTOS.

The social, environmental, ethical and human rights issues discussed in the social responsibility strategy have been integrated with our core operations and the business strategy of the LOTOS Group. In this way, we have managed to create a mechanism to:

• Increase our positive contribution to social development.
• Mitigate any possible adverse impact by our operations and the associated risk.

In 2011-2012, we conducted public consultations in order to optimise our organizational objectives in the area of social responsibility. These consultations and opinion polls involved key stakeholder groups, both internal and external. As a result, we managed to define the new perspective for the CSR Strategy of the LOTOS Group until 2015.

PILLARS OF THE LOTOS GROUP’S CORPORATE SOCIAL RESPONSIBILITY STRATEGY UNTIL 2015
I SOCIAL RESPONSIBILITY	II ENVIRONMENTAL RESPONSIBILITY	III BUSINESS RESPONSIBILITY
Creating values beneficial to social environments	Creating values beneficial to the natural environment	Creating economically beneficial values
We are committed to respect for intellectual capital and diversity, as well as respect for human rights, including the freedom of speech and freedom of association. We contribute to the creation of new jobs and the improvement of the quality of human capital in the areas of our impact. We actively counteract exclusion and other social problems in the spheres of our competences.	We strive to continuously reduce the negative impact of our business on the environment through the application of high standards of extraction, production and processing of hydrocarbons, and also by meeting demanding environmental standards in the production, transportation and sale of petroleum products. In our upstream operations we employ the best available techniques and rules of conduct, constantly analysing the opportunities offered in this area by new technologies. We also aim to identify and develop opportunities for obtaining energy from renewable sources.	We place great importance on the management of our relations with the environment in a predictable and reliable manner, consistently with the principles of ethics and in keeping with the rules of transparency and partnership. This has an impact on the way in which we aim to profit and increase in value in the long term perspective. Our responsibility manifests itself in our initiation of activities aimed at increasing security in the energy sector in a responsible manner, in terms of both society and the environment. We provide a stable supply of fuel to the market, and participate in the exploration and production of hydrocarbon deposits, including unconventional ones.

We have thoroughly analysed the opinions expressed by local communities, key residents of municipalities and provinces, representatives of non-governmental organizations, local government at all levels, state administration, research and development centres and educational institutions. Our key cooperation programmes are aimed at the residents of Pomerania on the Baltic coast and Jasło and Czechowice-Dziedzice in the south of Poland, where our main production plants, warehousing facilities and other installations are located. These programmes are directed at the development of the local communities there, and counteraction of any essential social and environmental problems that they struggle with.

Several LOTOS Group entities operate in these locations in the three provinces (Gdańsk, Katowice and Rzeszów), including the Grupa LOTOS refinery in Gdańsk and the former Southern Refineries, currently operating as LOTOS Czechowice and LOTOS Jasło.

During our consultations we identified the principal areas of involvement upon which - according to the stakeholders - we should focus with our social partners. These include:

• Road safety, which we influence through the quality of our products and comprehensive educational campaigns;
• Equal opportunity initiatives and prevention of social exclusion, especially among children and youth, to whom we address our scholarship grants, environmental education projects and sports-based education projects;
• Environmental protection and ecology, with (given the seaboard location of our refinery) special respect for the biodiversity of the Baltic Sea, as well as other areas of great natural value located in the imminent vicinity of LOTOS Group companies.

The fact that the social relations aspect of our involvement has been included in the Code of Ethics, in force since 2013, is a testimony to how important these issues are to the LOTOS Group.

No.	Institution	City/town	Purpose of grant
1.	Gmina Bisztynek	Bisztynek	Renovation of the state nursery damaged in a hail storm.
2.	Volunteer Fire Brigade	Trzcinica	Equipment purchase: SCBA with motion sensor.
3.	The 'Bezpieczni w Ruchu Drogowym' (Safe on the Road) Foundation	Gdańsk	Equipment purchase.
4.	Cappella Gedanensis	Gdańsk	Purchase of an instrument.
5.	Politechnika Gdańska (Gdańsk University of Technology)	Gdańsk	Co-financing of the renovation and modernisation of a rotary vacuum-drum filter unit.
6.	Primary School	Osowo	Computer purchase.
7.	Specialist Hospital in Jasło	Jasło	Purchase of medical equipment - electrosurgical diathermy unit.
8.	Pomorskie Centrum Chorób Zakaźnych i Gruźlicy (Pomeranian Infectious Diseases and TB Centre)	Gdańsk	Purchase of medical equipment - vital signs monitor for the paediatric ward.
9.	Ambulance Station	Gdańsk	Co-financing of a rescue motorbike.
10.	Wojewódzkie Centrum Onkologii (Provincial Oncology Centre)	Gdańsk	Purchase of medical equipment.
11.	Stowarzyszenie Pomocy Dzieciom Chirurgicznie Chorym (Children's Aid Association for Surgical Patients)	Gdańsk	Purchase of medical equipment - Body Wizz3D platform.
12.	The PCK Marine Hospital	Gdynia	Purchase of biopsy apparatus.
13.	Fundacja Agencja Regionalnego Monitoringu Aglomeracji Gdańskiej (Agency of Regional Air Quality Monitoring of Gdańsk Agglomeration)	Gdańsk	Replacement of the AM1 container at the monitoring station in Gdańsk and its connection to the monitoring network.
14.	Ornithological Station at the Museum and Institute of Zoology of the Polish Academy of Sciences	Gdańsk	Co-financing of statutory activities, including the purchase of 3 glass cabinets for a display of stuffed birds for educational purposes at the MIZ PAN Ornithological Station, Gdańsk.
15.	Fundacja Rozwoju Uniwersytetu Gdańskiego (Foundation for the Development of Gdańsk University)	Gdańsk	Co-financing of statutory activities in research objectives; provision of equipment for the Zelint research unit and purchase of research equipment.
16.	Grupa Badawcza Ptaków Wodnych KULING (Kuling Waterbird Research Group)	Gdańsk	Co-financing of statutory activities, including the construction of an observation deck, repairs to the nature trail and environmental protection actions in the Mewia Łacha Reserve.
17.	Municipality of Pruszcz Gdański	Pruszcz Gdański	Co-financing of the renovation of road surface of ul. Jesionowa in Przejazdowo.
18.	Specialist Hospital in Jasło	Jasło	Co-financing of roof renovations at the specialist surgical unit of the Specialist Hospital in Jasło.

We also provide non-profit support in Lithuania through AB LOTOS Geonafta, implementing social investments in the areas of education, culture and sports. AB LOTOS Geonafta's socially motivated activities also provide support to blind and partially-sighted children in Lithuania. The company also sponsored production of a book written in Braille, which was published both as an audiobook and a print edition.

We are the main sponsor of sports clubs, sporting events, cultural institutions and cultural events in the regions where LOTOS Group companies operate. In 2012, we implemented 56 sponsorship projects in sports, culture and the arts, as well as 12 social projects, including educational and ecological activities. One of the criteria we use when choosing which activities to sponsor is their social dimension, their significance to local communities and their impact on their region's national and international reputation. If we were to cease our sponsorship activities, it would cause a deterioration of the cultural sphere and a lowering of the potential for young people to become involved in sports.

Companies that belong to the LOTOS Group have no negative impact on the quality of life in their immediate environment. However, we take preventive measures and observe all our duties stemming from the provisions of environmental protection law because of the high-risk plants within our structure. Pursuant to these laws, we communicate with local government on the procedures and safety measures that need to be implemented in case of serious industrial disasters. These are also published on the websites of our companies, with specific instructions for residents on how to proceed in such cases, and are also communicated to the entities and social institutions which might be affected by the consequences of such emergencies. The information included in such documents as the Environmental Impact Assessment (which we commission to meet the requirements of the Marshall's Offices, Regional Environmental Protection Boards, Provincial Environmental Protection Inspectorates) is also available to the public. Since these are not confidential documents, anyone who wishes do so can acquaint themselves with their content. They are also available in reports published on the environmental conditions in the provinces, as informative materials for the needs of local communities.

Significant support given by the state

Grupa LOTOS	2010	2011	2012
			PLN '000
Grants received in the year	-	5,206	2,186
Grants settled in the year	-	433	733
Carrying amount of grants at the end of the year	25,275	23,580	25,033

^{Grants are licences received free of charge.}

LOTOS Group	2010	2011	2012
			PLN '000
Grants received	791	7,431	2,186
Grants settled	122	1,654	2,059
Carrying amount of grants at the end of the year	40,012	39,321	39,448

Moreover, the LOTOS Group makes use of government assistance, as regulated by IAS 20 concerning "Accounting for Government Grants and Disclosure of Government Assistance".

Until April 30th 2011 the LOTOS Group (LOTOS Biopaliwa) was a beneficiary of tax relief available to producers of biocomponents, under the Act of February 15th 1992, Corporate Income tax (consolidated text: Dz.U. of 2011, No 74, item 397) - Art. 19a. The public assistance granted within the quoted regulations was approved by the decision of the European Commission No. N 57/08 of September 18th 2009, concerning authorisation for state operated assistance in the area of biofuels. This relief has enabled biofuel producers to deduct from their payable income tax up to 19% of the surplus value of their produced biofuels, over the value of their produced liquid fuels of the same calorific value, calculated at average prices. European Commission approval for the tax relief expired on April 30th 2011, and the unsettled amount of the relief is accounted for in current prepayments for corporate income tax. The tax effect of the biocomponent relief was presented in Notes 10.2 and 10.3 of Additional information and clarifications to the LOTOS Group's Consolidated Financial Statement for the year 2012.

LOTOS Asfalt operates in the area of the Tarnobrzeg Special Economic Zone, EURO-PARK WISŁOSAN, under Permit No. 158/ARP S.A./2008 of January 23rd 2008, granted until November 15th 2017. Because the company invests in the Tarnobrzeg Special Economic Zone itself, it is entitled to a tax relief on up to 50% of capital expenditure incurred in the TSEZ from its income tax payable. The tax effect of this relief was presented in Notes 10.2 and 10.3 of Additional information and clarifications to the LOTOS Group's Consolidated Financial Statement for the year 2012.

The LOTOS Group is also taking advantage of the relief for acquiring new technologies under the Act of February 15th 1992 on corporate income tax (consolidated text: Dz. U. of 2011, No. 74, item 397) - Art. 18b. This enables the LOTOS Group to deduct from payable income tax no more than 50% of its expenditure on the purchase of new technologies.