Grupa LOTOS S.A. Annual Report 2010
Notes to the financial statements

34. Interest-Bearing Loans and Borrowings

PLN '000 Dec 31 2010 Dec 31 2009
Bank loans 6,302,467 5,666,207
Borrowings 32,992 34,864
Total 6,335,459 5,701,071
Non-current portion 4,403,453 4,942,590
Current portion 1,932,006 758,481
Loans and Borrowings by Lender
 
PLN '000 Dec 31 2010 Dec 31 2009
Non-current portion    
Kredyt Bank S.A. 20,987 26,987
Pekao S.A. 27,590 13,190
PKO BP S.A. 18,125 -
National Fund for Environmental Protection and Water Management 18,556 25,056
Raiffeisen Bank Polska S.A. 2,000 4,000
Bank Ochrony Środowiska S.A. 36,902 36,902
Stablewood Power Ventures (Władysławowo) Ltd. - 8
AB Geonafta 7,936 -
Bank consortium (1)*  - 1,139,513
Bank consortium (2)** 3,120,146 2,750,485
Bank consortium (3)*** 1,020,870 772,661
Bank consortium (5)***** 130,341 173,788
Total non-current portion 4,403,453 4,942,590
Current portion    
Kredyt Bank S.A. 6,000 7,619
Pekao S.A. 186,263 37,101
ING Bank Śląski S.A. 32,036 25,533
PKO BP S.A. 110,872 23,049
National Fund for Environmental Protection and Water Management 6,500 9,800
Raiffeisen Bank Polska S.A. 1,985 1,952
Nordea Bank Polska S.A. - 74,867
Nordea Bank Norge ASA - 65,434
DnB NOR Bank ASA 23,624 -
BRE Bank S.A. 3,207 -
Bank consortium (1)*  1,187,413 1,670
Bank consortium (2)** 91,439 6,477
Bank consortium (3)*** 37,214 1,760
Bank consortium (4)**** 201,979 459,756
Bank consortium (5)***** 43,474 43,463
Total current portion 1,932,006 758,481
Total 6,335,459 5,701,071

*Bank consortium (1): Pekao S.A., PKO BP S.A., BRE Bank S.A. and Rabobank Polska S.A.

**Bank consortium (2): Banco Bilbao Vizcaya Argentaria S.A., Bank of Tokyo-Mitsubishi UFJ (Holland) N.V., Pekao S.A., BNP Paribas S.A., Caja de Ahorros y Monte de Piedad de Madrid, Credit Agricole CIB (formerly Calyon), DnB Nor Bank ASA, DnB Nord Polska S.A., ING Bank Śląski S.A., KBC Finance Ireland, Kredyt Bank S.A., Nordea Bank AB, PKO BP S.A., The Royal Bank of Scotland plc, Société Générale S.A., Bank Zachodni WBK S.A., Rabobank Polska S.A., Bank Gospodarki Żywnościowej S.A. and Sumitomo Mitsui Banking Corporation Europe Ltd.

***Bank consortium (3): Banco Bilbao Vizcaya Argentaria S.A. and BNP Paribas S.A.

****Bank consortium (4): Pekao S.A., PKO BP S.A., BNP Paribas S.A., ING Bank Śląski S.A., Nordea Bank Polska S.A., Rabobank Polska S.A. and Bank Gospodarki Żywnościowej S.A.

*****Bank consortium (5): Pekao S.A., PKO BP S.A.

Bank Loans Contracted by the Parent Undertaking

As at December 31st 2010, the Company had drawn under the term loan facility USD 1,464,596 thousand (in nominal terms) (the equivalent of PLN 4,341,209 thousand, translated at the mid-exchange rate for USD quoted by the National Bank of Poland for December 31st 2010). As at December 31st 2009, the Company had drawn under the term loan facility USD 1,268,257 thousand (in nominal terms) (the equivalent of PLN 3,614,913 thousand, translated at the mid-exchange rate for USD quoted by the National Bank of Poland for December 31st 2009). The working capital loan was made available to Grupa LOTOS S.A. in the form of overdraft facilities which are used by the Company on an as-needed basis. By the date of these consolidated financial statements, funds drawn under the facility were used by Grupa LOTOS S.A. according to its needs.

Bank loans and borrowings as at December 31st 2010, by currency and by maturity
PLN '000 EUR loans USD loans NOK loans PLN loans

Total
2011 19,656 1,656,709 23,624 232,017 1,932,006
2012 2,334 238,365 - 61,006 301,705
2013 2,334 242,190 - 58,506 303,030
2014 2,334 330,567 - 27,093 359,994
2015 10,270 343,314 - 19,457 373,041
beyond 2015 - 2,986,580 - 79,103 3,065,683
Total 36,928 5,797,725 23,624 477,182 6,335,459

The above table presents loans and borrowings by maturity date.

Bank loans and borrowings as at December 31st 2009, by currency and by maturity
PLN '000 EUR loans USD loans PLN loans

Total
2010 2,447 337,886 418,148 758,481
2011 2,421 1,223,154 57,995 1,283,570
2012 2,421 193,696 57,995 254,112
2013 2,421 196,949 55,495 254,865
2014 2,421 272,140 55,551 330,112
beyond 2014 2,422 2,777,643 39,866 2,819,931
Total 14,553 5,001,468 685,050 5,701,071

The above table presents loans and borrowings by maturity date.

As at December 31st 2010, the average effective interest rate for the loans (including loans in USD and EUR) was approx. 2.44% (3.15% as at December 31st 2009). The average effective interest rate for PLN-denominated loans other than the Parent Undertaking's syndicated loans is approximately 4.81% (as at December 31st 2009: 4.72%).

Loans and borrowings as at December 31st 2010:

 
Bank name; form of incorporation Registered office Registered office Outstanding loan amount
(current portion)(1)		 Outstanding loan amount
(non-current portion)(1)		 Maturity date Financial terms and conditions (interest rate, interest payment schedule etc.) Type of security
PLN
('000)		 Foreign currency
('000)		 PLN
('000)		 Foreign currency
('000)		 PLN
('000)		 Foreign currency
('000)		 Current portion Non-current portion
Bank Consortium (1) - - USD 400,000 1,187,413 USD 400,553 - -  Dec 20 2011 - based on 3M or 6M LIBOR USD, depending on the interest period selected at a given time + bank's margin registered pledge over inventories, registered pledge over bank accounts, assignment of rights under inventory insurance agreements, assignment of rights under inventory storage agreements, submission to enforcement
Bank Consortium (2) - - USD 1,125,000 91,439 USD 30,775 3,120,146 USD 1,049,856 Jul 15 2011 Jan 15 2021 based on 1M, 3M or 6M LIBOR USD, depending on the interest period selected at a given time + bank's margin mortgage, registered pledge over existing and future movables, registered pledge over bank accounts, assignment of rights under agreements for the implementation and management of the 10+ Programme, assignment of rights under insurance agreements relating to the Gdańsk refinery, assignment of licence, hedging and sale agreements with a value of over PLN 10,000 thousand per year, submission to enforcement
Bank Consortium (3) - - USD 425,000 37,214 USD 12,550 1,020,870 USD 344,228 Jul 15 2011 Jan 15 2021 fixed interest rate
Bank Consortium (4) - USD 200,000 or equivalent 76,328 - - - Overdraft facility - 3M WIBOR + bank's margin
17,322 EUR 4,374 - - 3M EURIBOR + bank's margin
108,329 USD 36,547 - - 3M LIBOR USD + bank's margin
Pekao S.A. Warsaw 150,000 - 30,165 - - - Overdraft facility (2) - 1M WIBOR + bank's margin submission to enforcement
Bank Consortium (5) Warsaw 340,000 - 43,474 - 130,341 - Dec 31 2011 Dec 31 2014 1M WIBOR + bank's margin mortgage
Kredyt Bank S.A. Warsaw 60,000 - 6,000 - 20,987 - Dec 31 2011 Jun 30 2015 1M WIBOR + bank's margin mortgage
PKO BP S.A. Warsaw 20,000 - 1,500 - 18,125 - Dec 31 2011 Dec 31 2019 1M WIBOR + bank's margin mortgage
Pekao S.A. Warsaw 20,000 - 1,500 - 18,125 - Dec 31 2011 Dec 31 2019 1M WIBOR + bank's margin mortgage
Pekao S.A. Warsaw 14,000 - 9,170 - - - Overdraft facility - 1M WIBOR + bank's margin power of attorney over bank account, representation on submission to enforcement
Raiffeisen Bank Polska S.A. Rzeszów 10,000 - 1,985 - 2,000 - Dec 31 2011 Dec 28 2012 1M WIBOR + bank's margin power of attorney over bank account, submission to enforcement, security (deposit) mortgage (hipoteka kaucyjna), assignment of rights under insurance policy, registered pledge over inventories, registered pledge over tangible assets
PKO BP S.A. Warsaw 14,000 - 2,143 - - - Jun 17 2011 - 1M WIBOR + bank's margin assignment of receivables, power of attorney over bank account
Pekao S.A. Kraków 26,837 EUR 7,060 2,334  EUR 589 9,336 EUR 2,357 Oct 31 2011 Oct 31 2015 1M EURIBOR + bank's margin mortgage
Pekao S.A. Kraków 30,000 - 14,186 - - - Overdraft facility - 1M WIBOR + bank's margin assignment of receivables, pledge over inventories
Pekao S.A. Kraków 44,754 - 33 - 129 - Oct 31 2011 Oct 31 2015 1M WIBOR + bank's margin mortgage
NFOŚiGW Warsaw 35,000 - 6,500 - 18,556 - Dec 20 2011 Dec 20 2014 0.8 of the rediscount rate for promissory notes bank guarantee, promissory note
BRE Bank S.A. Warsaw 30,000 - 3,207 - - - Overdraft facility - O/N WIBOR + bank margin blank promissory note
ING Bank
Śląski S.A.		 Warsaw 35,000 - 32,036 - - - Overdraft facility - 1M WIBOR + bank's margin representation on submission to enforcement
Pekao S.A Warsaw 30,000 - 3,790 - - - Overdraft facility - 1M WIBOR + bank's margin power of attorney over bank account
Bank Ochrony Środowiska S.A. Warsaw 68,000 - - - 22,312 - - Jun 30 2016 1M WIBOR + bank's margin mortgage, transfer of ownership of tangible assets, assignment of rights under insurance policy, promissory note, assignments of rights under sales agreements
Bank Ochrony Środowiska S.A. Warsaw 14,688 - - - 9,490 - - Jun 30 2016
Bank Ochrony Środowiska S.A. Warsaw 5,100 - - - 5,100 - - Dec 20 2016
DnB NOR 
Bank ASA		 Stavanger Norway - NOK 180,000 23,624 NOK 46,586 - - Dec 22 2011 - 9M NIBOR + bank's margin tax receivable - refunded exploration expenses
PKO BP S.A. Warsaw - USD 32,500 96,766 USD 32,500 - - Nov 30 2011 - 1M LIBOR USD + bank's margin pledge, guarantee
PKO BP S.A. Warsaw - USD 32,500 10,463 USD 3,523 - - Overdraft facility - 1M LIBOR USD + bank's margin pledge, guarantee
Pekao S.A. Warsaw 160,000 or equivalent in USD or EUR 125,085 USD 42,200 - - Nov 15 2011 - 3M LIBOR USD + bank's margin blank promissory note
AB Geonafta Gargždai, Lithuania - EUR 2,000 - - 7,936 EUR 2,004 - Dec 31 2015 fixed interest rate none
  TOTAL 232,017 - 245,165 -  
1,656,709 USD 558,648 4,141,016 USD 1,394,084
19,656 EUR 4,963 17,272 EUR 4,361
23,624 NOK 46,586 - -
1,932,006 - 4,403,453 -

(1) Measured at amortised cost, including arrangement fees.

(2) Not treated as cash equivalents.

The bank margins on the contracted loans and borrowings are in the range of 0.45 pp. – 3.50 pp.

Loans and borrowings as at December 31st 2009:

 
Bank name; form of incorporation Registered office Loan amount as per agreement Outstanding loan amount
(current portion)(1)		 Outstanding loan amount
(non-current portion)(1)		 Maturity date Financial terms and conditions (interest rate, interest payment schedule etc.) Type of security
PLN
('000)		 Foreign currency
('000)		 PLN
('000)		 Foreign currency
('000)		 PLN
('000)		 Foreign currency
('000)		 Current portion Non-current portion
Bank Consortium (1) - - USD 400,000 1,670 USD 549 1,139,513 USD 399,751 Mar 15 2010 Dec 20 2011 based on 3M or 6M LIBOR USD, depending on the interest period selected at a given time + bank's margin registered pledge over inventories, registered pledge over bank accounts, assignment of rights under inventory insurance agreements, assignment of rights under inventory storage agreements, submission to enforcement
Bank Consortium  (2) - - USD 1,125,000 6,477 USD 2,016 2,750,485 USD 962,395 Mar 15 2010 Jan 15 2021 based on 1M, 3M or 6M LIBOR USD, depending on the interest period selected at a given time + bank's margin mortgage, registered pledge over existing and future movables, registered pledge over bank accounts, assignment of rights under agreements for the implementation and management of the 10+ Programme, assignment of rights under insurance agreements relating to the Gdańsk refinery, assignment of licence, hedging and sale agreements with a value of over PLN 10,000 thousand per year, submission to enforcement
Bank Consortium  (3) - - USD 425,000 1,760 USD 680 772,661 USD 271,852 Mar 15 2010 Jan 15 2021 fixed interest rate
Bank Consortium  (4) - USD 200,000 or equivalent 278,567 - - - Overdraft facility - 3M WIBOR + bank's margin
26 EUR 6 - - 3M EURIBOR + bank's margin
181,163 USD 63,559 - - 3M LIBOR USD + bank's margin
Pekao S.A. Warsaw 100,000 - 2,263 - - - Overdraft facility - 1M WIBOR + bank's margin submission to enforcement
Bank Consortium (5) Warsaw 340,000 - 43,463 - 173,788 - Dec 31 2010 Dec 31 2014 1M WIBOR + bank's margin mortgage
Kredyt Bank S.A. Warsaw 60,000 - 7,619 - 26,987 - Dec 31 2009 Jun 30 2015 1M WIBOR + bank's margin mortgage
PKO BP S.A. Warsaw 25,000 - 18,248 - - - Overdraft facility - 1M WIBOR + bank's margin none
Pekao S.A. Warsaw 15,000 - 114 - - - Overdraft facility - 1M WIBOR + bank's margin power of attorney over bank account, representation on submission to enforcement, registered pledge over inventories, assignment of rights under insurance policy
Raiffeisen Bank Polska S.A. Rzeszów 10,000 - 1,952 - 4.000 - Dec 31 2009 Dec 28 2012 1M WIBOR + bank's margin power of attorney over bank account, submission to enforcement, security (deposit) mortgage (hipoteka kaucyjna), assignment of rights under insurance policy, registered pledge over inventories, registered pledge over tangible assets
Pekao S.A. Warsaw 15,000 - 4,452 - - - Jun 30 2010 - 1M WIBOR + bank's margin power of attorney over bank account, submission to enforcement, registered pledge over inventories
ING Bank
Śląski 		 Katowice 23,500 - 22,592 - - - Overdraft facility - 1M WIBOR + bank's margin submission to enforcement
ING Bank
Śląski 		 Katowice 4,500 - 2,941 - - - Overdraft facility - 1M WIBOR + bank's margin mortgage, assignment of receivables
PKO BP S.A. Warsaw 5,000 - 4,801 - - - Overdraft facility - 1M WIBOR + bank's margin mortgage, assignment of receivables, promissory notes, pledge over inventories
NFOŚiGW Warsaw 15,000 - 3,300 - - - Sep 30 2010 - 0.5 of the rediscount rate for promissory notes surety, promissory note
Pekao S.A. Kraków 26,837 EUR 7,060 2,421 EUR 590 12,106 EUR 2,945 Oct 31 2010 Oct 31 2015 1M EURIBOR + bank's margin mortgage
Pekao S.A. Kraków 30,000 - 21,304 - - - Jun 25 2010 - 1M WIBOR + bank's margin mortgage
Pekao S.A. Kraków 44,754 - 32 - 161 - Oct 31 2010 Oct 31 2015 1M WIBOR + bank's margin mortgage
NFOŚiGW Warsaw 35,000 - 6,500 - 25,056 - Dec 20 2010 Dec 20 2014 0.8 of the rediscount rate for promissory notes bank guarantee, promissory note
Pekao S.A. Warsaw 56,409 USD 14,800 6,515 USD 2,286 923 USD 324 Dec 31 2010 Feb 28 2011 1M LIBOR USD + bank's margin mortgage
Nordea Bank Polska S.A. Gdynia 100,000 - 74,867 USD 26,315 - - Nov 18 2010 - Depending on the loan currency, 3M WIBOR, EURIBOR or LIBOR USD + bank's margin blank promissory note, assignment of receivables under crude oil sales agreements, submission to enforcement
Nordea Bank
Norge ASA  		 Stavanger - USD 8,000 22,837 USD 7,994 - - Jul 31 2010 - 1W LIBOR + bank's margin Bank guarantee
Nordea Bank
Norge ASA		 Stavanger - USD 11,000  31,179 USD 10,911 - - Jul 31 2010 - 1W LIBOR + bank's margin surety
Nordea Bank
Norge ASA		 Stavanger - USD 4,000 11,418 USD 3,996 - - Jul 31 2010 - 1W LIBOR + bank's margin Bank guarantee
Bank Ochrony Środowiska S.A. Warsaw 68,000 - - - 22,312 - - Jun 30 2016 1W LIBOR + bank's margin mortgage, transfer of ownership of tangible assets, assignment of rights under insurance policy, promissory note, assignments of rights under sales agreements
Bank Ochrony Środowiska S.A. Warsaw 14,688 - - - 9,490 - - Dec 20 2016
Bank Ochrony Środowiska S.A. Warsaw 5,100 - - - 5,100 - - Jun 30 2016
Stablewood Power Ventures (Wladyslawowo) Ltd. Worcester 8 - - - 8(2) - - Dec 31 2017 1W LIBOR + bank's margin blank promissory note
  TOTAL 418,148 - 266,902 -  
337,886 USD 118,306 4,663,582 USD 1,634,322
2,447 EUR 596 12,106 EUR 2,945
758,481 - 4,942,590 -

(1) Measured at amortised cost, including arrangement fees.

(2) On March 1st 2010, LOTOS Petrobaltic S.A. concluded an agreement on assignment of claims with Stablewood Power Vetures (Władysławowo) Ltd., whereby LOTOS Petrobaltic S.A. acquired from Stablewood Power Vetures (Władysławowo) Ltd. a debt claim of PLN 8 thousand related to the outstanding amount of the shareholder loan advanced to Energobaltic Sp. z o.o. under the agreement of November 12th 2001, as amended. The price for the acquisition of the debt claims from Stablewood Power Vetures (Władysławowo) Ltd. was paid by LOTOS Petrobaltic S.A. on March 30th 2010.
  

The bank margins on the contracted loans and borrowings are in the range of 0.20pp. – 4.00pp.

This is a translation of a document originally issued in Polish
The notes to the financial statements, presented on following pages, are their integral part.

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