In determining the content of the non-financial sections of the Annual Report, we were guided by the GRI Reporting Framework. The information contained in the Report was selected based on the materiality criterion, which we define as being the potential to affect our enterprise's compliance with sustainable development principles, as well as our external stakeholders when looking for reliable, comparable and accurate information with which to inform their decisions.

The non-financial information of this Report was prepared using the majority of core and additional indicators provided for in the GRI Guidelines, including economic, environmental and social performance.

An important improvement on the previous report is our use, for the first time, of the newly established GRI Oil & Gas Sector Supplement. This adds additional indicators to the Report designed specifically for our industry. The Supplement itself was prepared using the G3.1 GRI Guidelines, which created the need to update the indicators reported in previous years based on G3 Guidelines. Although we had no obligation to do so, we wanted to include the Sector Supplement, so migration to the new revision of the Guidelines proved inevitable.

The methods used to calculate the figures presented in this Report were the same as those used in preparation of the LOTOS Group’s consolidated financial statements for 2012. These methods are in accordance with the IFRS effective as at December 31st 2012.

For a vast majority of thematic areas, the facts and non-financial data presented in the Report pertain to Grupa LOTOS, the parent entity. However, all due care and consideration has been given on our part to account for the LOTOS Group’s consolidated data where possible. Regarding areas of key importance to social and environmental responsibility, we have presented data on the largest commercial companies of the group and, as a natural addition to the Sector Supplement, on the LOTOS Petrobaltic Group. In each case, we make a clear distinction by specifically indicating the LOTOS Group entity currently being discussed in the Report.

Whenever we refer to the largest commercial companies of the LOTOS Group (both in terms of revenue and head count), this applies to LOTOS Asfalt, LOTOS Kolej, LOTOS Oil and LOTOS Paliwa. This Report is our first attempt at a comprehensive presentation of results from the largest of the LOTOS Petrobaltic Group companies active in the exploration and production business. After the parent, LOTOS Petrobaltic (operating in Poland), these include LOTOS Geonafta in Lithuania and LOTOS Norge in Norway. The Report also considers another vital company of the group, Energobaltic, which is a CHP operator in Władysławowo. Since this is the first reporting period following the implementation of the Sector Supplement, it has not been possible to present all results of the companies covered by the Report in a uniform and consistent manner. However, given the challenges of sustainable development that lie ahead for the production business, we decided to present the collected data anyway. In subsequent reports, we will strive to improve the aggregation method for non-financial data on entities operating in the exploration and production segment.

The current Report offers a larger pool of performance indicators reported by the above-mentioned commercial companies. This results from continuous improvements in non-financial reporting, now more geared towards the broadest-possible presentation of the scale and nature of the impact of our operations, products and services on key stakeholders and the environment.

In the previous reporting period, no material changes or other circumstances occurred with respect to the LOTOS Group’s entities which would affect the overall assessment of the organisation, either in terms of its individual activities or in comparison with its domestic peers. In January 2012, Grupa LOTOS sold 100% of the shares in LOTOS Parafiny, one of its marketing segment companies. Results from LOTOS Parafiny are no longer presented in this Annual Report.

GRI indicators as reported by the LOTOS Group companies: LOTOS Asfalt, LOTOS Kolej, LOTOS Oil, LOTOS Paliwa, and the LOTOS Petrobaltic Group * (LOTOS Petrobaltic, LOTOS Geonafta, LOTOS Norge, Energobaltic)

The Annual Report for 2012 accounts for a total of 84 GRI indicators, relative to 74 indicators in 2011. We decided to discontinue reporting of twelve indicators: HR5, HR6, HR7, HR9, HR10, HR11, EN2, OG2, OG3, OG9, OG12 core indicators, and the HR9 additional indicator, as the issues they cover were deemed immaterial to our organization.
An index for looking up specific performance indicators and descriptive parts relating to specific issues discussed in this Report is included in the GRI Performance Indicators and Global Compact Principles, in the “Useful information” section of this Report.