6.1.  Condensed financial information on equity-accounted investees

 Under the agreement of May 20th 1997, made between the Company shareholders and SGT EUROPOL GAZ S.A. (“EUROPOL GAZ”), the parties agreed that until EUROPOL GAZ fully discharges its liabilities under borrowings incurred in connection with construction of the gas pipeline, no decision on payment of dividend by EUROPOL GAZ will be made. EUROPOL GAZ's liabilities under its borrowings mature in 2018. There are no other restrictions at EUROPOL GAZ with respect to payment of dividend or repayment of borrowings or prepayments provided to it by the Company.

At GAS-TRADING S.A., with respect to payment of dividend or repayment of borrowings or prepayments provided to it by the Company.

6.2.  Net carrying amount of interests in equity-accounted investees

6.3.  Reconciliation of carrying amount of interests in equity-accounted investees

The Parent estimated the amount of its equity interest in EUROPOL GAZ on the basis of the company’s equity disclosed in its financial statements at December 31st 2014 prepared in accordance with the Polish Accountancy Act, adjusted for differences in the accounting policies applied within the Group and results on intercompany transactions. The differences in the accounting policies concerned recognition of interest expenses in the net value of property, plant and equipment (until the end of 2008). Until the end of 2008, the Group applied the standard approach (in accordance with IAS 23) and did not recognise borrowing costs in the initial value of property, plant and equipment. As of the beginning of 2009, the Group capitalises borrowing costs in the value of property, plant and equipment, therefore the adjustment consists in elimination of these costs with respect to the previous years.

Subsequently, the Parent tested its interest in EUROPOL GAZ for impairment using the discounted cash flow method, on the basis of information on the company's target net profit as specified in the Inter-Governmental Protocol dated October 29th 2010. The calculations were based on the assumption that in each year in 2011-2021 EUROPOL GAZ's net profit will be PLN 21m. The discounted cash flows include all cash flows generated by EUROPOL GAZ, including cash flows related to the servicing of interest-bearing borrowings (interest expenses and repayment of the principal).

As at December 31st 2014, the Parent measured the carrying amount of its equity interest in the joint venture using the equity method at PLN  1,565m. The company's value estimated as at the same date using the discounted cash flow method was PLN 840m.

Therefore, the Parent made a revaluation adjustment to the investment's net carrying amount to reflect the its current valuation of PLN 840m. As at the end of 2014, the difference in valuation relative to December 31st 2013 was PLN 129m and was recognised in the statement of profit or loss for the current period in “Share in net profit/loss of equity-accounted entities”.