in PLN millions, unless otherwise stated

To the Shareholders and Supervisory Board of KGHM Polska Miedź S.A.

Auditor’s report

We have audited the attached financial statements of KGHM Polska Miedź S.A. with its registered office in Lubin, ul. Marii Skłodowskiej-Curie 48 (hereinafter: the “Company”), including statement of financial position prepared as at 31 December 2016, statement of profit or loss, statement of comprehensive income, statement of changes in equity, statement of cash flows for the financial year from 1 January 2016 to 31 December 2016 and notes comprising a summary of significant accounting policies and other explanatory information.

Responsibility of the Company’s manager and those charged with governance for the financial statements

The Management Board of the Company is responsible for the preparation of the financial statements, based on properly kept accounting records, and their fair presentation in accordance with the International Accounting Standards, International Financial Reporting Standards, related interpretations published as European Commission regulations and applicable laws. It is also obliged to ensure internal control as it determines necessary for the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

Under the Accounting Act of 29 September 1994 (Journal of Laws of 2016 item 1047 as amended), hereinafter referred to as the “Accounting Act” the Management Board of the Company and members of its Supervisory Board are obliged to ensure that the financial statements meet the requirements of the Accounting Act.

Auditor’s responsibility

Our responsibility is to express an opinion on these financial statements based on our audit works.

We conducted our audit in accordance with Section 7 of the Accounting Act and the National Auditing Standards in line with the wording of the International Standards on Auditing adopted by Resolution No. 2783/52/2015 of the National Council of Statutory Auditors of 10 February 2015 as amended. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Management Board of the Company are properly kept, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion on financial statements

In our opinion the attached financial statements:

  • give a true and fair view of the economic and financial position of the Company as at 31 December 2016 and its financial performance for the financial year from 1 January 2016 to 31 December 2016 in accordance with the International Accounting Standards, International Financial Reporting Standards, related interpretations published as European Commission regulations and the adopted accounting principles (policies),
  • have been prepared based on properly kept accounting books,
  • comply, with respect to their form and content, with the applicable provisions of law and the articles of association of the Company.

The financial statements of the Company for the prior financial year ended 31 December 2015 were audited by another certified auditor who issued an opinion on those financial statements on 15 March 2016.


Report on other legal and regulatory requirements

Opinion on the report on the activities

We do not express an opinion on the report on the activities.

It is the responsibility of the Management Board of the Company to prepare the report on the activities in accordance with the Accounting Act and other applicable laws. Moreover, the Management Board of the Company and members of the Supervisory Board are obliged to ensure that the financial statements and the report on the activities meet the requirements of the Accounting Act.

When auditing the financial statements we were obliged to examine the report on the activities and indicate whether the information contained therein complies with Article 49 of the Accounting Act and the Ordinance of the Minister of Finance of 19 February 2009 on current and periodic information published by issuers of securities and the rules of equal treatment of the information required by the laws of non-member states (Journal of Laws of 2014 item 133 as amended) and is consistent with underlying information disclosed in the attached financial statements. Additionally, it was our responsibility to indicate whether we have detected any material misstatement in the report on the activities based on our knowledge of the Company and its business environment obtained in the course of the audit.

In our opinion, the information contained in the report on the activities complies with Article 49 of the Accounting Act and the Ordinance of the Minister of Finance of 19 February 2009 on current and periodic information published by issuers of securities and the rules of equal treatment of the information required by the laws of non-member states (Journal of Laws of 2014 item 133 as amended) and is consistent with underlying information disclosed in the attached financial statements. Moreover, based on our knowledge of the Company and its business environment obtained in the course of the audit, we have not detected any material misstatements in the report on the activities.

Statement of compliance with corporate governance principles

In relation to our audit of the financial statements, it was our responsibility to examine 
the Company’s statement of compliance with corporate governance principles, which constitutes a separate part of the report on the activities. In our opinion, the Company’s statement provides all information required by the secondary legislation issued under Article 60.2 of the Act on public offering, conditions governing the introduction of financial instruments to organized trading, and public companies of 29 July 2005 (Journal of Laws of 2016 item 1639 as amended) and regulations issued under Article 61 thereof. The information is compliant with the applicable laws and information presented in the financial statements.

Requirements of the Energy Law - regulatory financial information

Regulatory financial information presented in note 12.12, covering the statement of financial position and statement of profit or loss prepared separately for each type of business activity in the distribution of electricity, distribution of gas and gas trading, as well as the appropriate basis for the preparation of this information and rules of allocation of assets, liabilities, costs and revenues for each of these activities has been prepared by the Management Board in order to meet the requirements of Article 44 of the Act dated 10 April 1997 of the Energy Law (Journal of Laws of 2012 item 1059 as amended - hereinafter referred to as "Energy Law") (the "Act"), including assurance of equal treatment of customers and the elimination of cross-subsidization between those activities.

The scope of the regulatory financial information has been determined in the Act. Our audit did not include the assessment of the adequacy of the information required by the Act from the point of view of preparing the regulatory financial information, including the assurance of equal treatment of customers and the elimination of cross-subsidization between those activities.

In our opinion, the Company’s regulatory financial information has been prepared, in all material respects, in accordance with the basis of preparation specified in note 12.12 and meets the requirements of Article 44.2 of the Act.

Adrian Karaś
Key certified auditor
conducting the audit
No. 12194

On behalf of Deloitte Polska Spółka z ograniczoną odpowiedzialnością Sp. k. – entity authorized to audit financial statements entered under number 73 on the list kept by the National Council of Statutory Auditors:

Adrian Karaś – Vice-President of the Management Board of Deloitte Polska Sp. z o.o. – which 
is the General Partner of Deloitte Polska Spółka z ograniczoną odpowiedzialnością Sp. k.

Warsaw, 15 March 2017