On 22 March 2010 Lubelski Węgiel BOGDANKA S.A. published the Annual Report and financial results for the previous year. Figures confirm that Bogdanka is one of the largest and most advanced hard coal mines in Poland as well as a leader of the domestic market for power coal producers. In the whole 2009, the Company’s net profit amounted to PLN 190.84 million, while operating profit accounted for PLN 226.71 million, which exceeded the forecast by 7.2% and 1.9% respectively. Sales revenue in this period amounted to PLN 1,118.39 million. All figures exceed results achieved in 2008. The Company also recorded an increase in the gross margin - from 29.56% in 2008 up to 31.96%, as well as the net margin - from 15.08 % in 2008 up to 17.06%.
In March 2010 Polish Pension Funds acquired from the State Treasury a block of 46.7% of shares in LW Bogdanka for more than PLN 1 billion. Consequently, LW Bogdanka became a private company.
FINANCIAL RESULTS - DETAILS
Detailed financial results of the LW BOGDANKA Group after 2009 are presented in the table below:

PLN '000	2009	2008	Change (%)
Revenue on sales	1,118,393	1,033,275	+8.24
Gross profit	357,460	305,411	+17.04
EBITDA	367,988	339,639	+8.35
Operating profit	226,710	203,457	+11.43
Net profit	190,842	155,791	+22.50

The main source of revenue on sales of the LW BOGDANKA Group in the course of 2009 (and the year before) was the production and sale of power coal. In 2009 those activities generated 96.45% of the revenue on sales generated by the Group (compared to 96.42% in the same period of 2008). Most (approx. 85%) coal sales in the abovementioned period (as well as in the same period of the previous year) were carried out on the basis of long-term commercial contracts with regular key customers of the Group (primarily Elektrownia Kozienice S.A., GDF Suez Energia S.A. [former Elektrownia Połaniec], Zakłady Azotowe Puławy S.A. and Elektrownia Ostrołęka S.A.).

In 2009 the profitability ratios were higher than in the previous year. The Group’s gross margin achieved the level of 31.96% and was higher than in the analogous period of 2008 by more than 2 p.p. The growth of the abovementioned profitability ratio was attributable to the increase in sales by 8.24% with a simultaneous increase in costs by only approx. 5.8%. The profitability of EBIT reached 20.27%, which means an increase by approx. 1 p.p. in comparison to the same period in the previous year. Gross margin amounted to 21.27%, while net margin reached the level of 17.06%.

EXCEEDING RESULT FORECASTS In October 2009 the Company published update of the financial forecasts for 2009 of the LW Bogdanka Capital Group. Operating profit results as well as net profit results turned out to be considerably better than the previous estimates. Financial forecasts for 2009 of the LW BOGDANKA S.A. Capital Group and the extent to which they were performed is shown in the table below:

PLN '000	Forecast for 2009	Performance after 2009	Forecast performed in (%)
Revenue on sales	1,143,649	1,118,393	97.79 %
Operating profit	222,445	226,710	101.91 %
Net profit	178,070	190,842	107.17 %

ACCOMPLISHMENT OF ISSUE OBJECTIVES
The main strategic objectives of development defined by the LW BOGDANKA Group are:
•    doubling the level of extraction of raw materials and thereby doubling the share in the market for hard coal producers in Poland,
•    improving the efficiency of hard coal extraction and production,
•    ensuring that LW BOGDANKA S.A. is self-sufficient regarding the supply of electricity by developing electricity production activities,
•    environmental protection measures.
 Investment expenditure of LW Bogdanka in 2009-2010 is presented in the table below:

PLN '000	Performance in 2009	Plan 2010	Total
Development investments (extension of the Stefanów Field)	205,294	550,335	755,629
Purchase of finished investment goods	54,713	262,612	317,325
Replacement investments	54,274	61,260	115,534
Environmental protection	858	4,912	5,770
Performance and modernisation of pits in the Bogdanka and Nadrybie Fields	54,999	55,203	110,202
Total	370,138	934,322	1,304,460

LW Bogdanka’s key investment plans for 2010:
•    Stefanów Field: Continuing the construction of the excavation and ventilation shaft, construction of headframe and top shaft building for shaft 2.1 and construction of the lifting machine supply system Building facilities on the Stefanów Field - completion of construction of lifting machine S 2.1 building with switch room, lifting machine supply system and extension of the 110 kV station, construction of main fans station Central air-conditioning system of the Stefanów Field – works continued,
•    Extension of the Mechanical Coal Processing Plant – selection of a contractor and commencement of extension works to achieve the production capacity of 2400 Mg/h, continued construction of the excavated material haulage facilities from the Stefanów Field to the Mechanical Coal Processing Plant,
•    Extension of Bogdanka’s track system, in relation to the extraction increase planned for 2011 – tender procedure and start of extension,
•    Work related to getting access to coal deposits,
•    Purchase of finished products,
•    Launch of coal-ploughing complex,
•    Replacement investments,
•    Building and modernisation of workings in Bogdanka and Nadrybie fields,
Extension of the Stefanów Field will make it possible to double the production capacity of LW BOGDANKA S.A. and thus also the annual quantity of hard coal extraction from 2011 onwards (from the present 5.3 million tonnes to reach the target level of 11.1 million tonnes per annum in 2014).