Grupa LOTOS S.A. - Annual Report 2010

44.1 Special Rights of the State Treasury and How These Rights Are Exercised in Companies

The Act on Special Rights Vested in the Minister Competent for the State Treasury and How Those Rights Should Be Exercised at Certain Companies or Groups of Companies Operating in the Power, Crude Oil and Gaseous Fuels Sectors, dated March 18th 2010 (Dz.U. No. 65, item 404) (“the Act”), introduced the institution of a special officer responsible for the protection of critical infrastructure. Under the Act, the minister competent for the State Treasury has the right to raise and objection against a resolution adopted, or any other act in law performed, by the Company’s Management Board to make a disposition with respect to any of the assets included in the single list of facilities, installations, equipment, and services comprising critical infrastructure, referred to in Art. 5b.7.1 of the Polish Crisis Management Act of April 26th 2007, if such disposition constitutes a real threat for the operation, continuity of operation and integrity of critical infrastructure. The minister competent for the State Treasury may also raise an objection with respect to any resolution by the Company’s governing body providing for:

• dissolution of the Company,
• changes in the intended use or discontinuation of use of any of the Company’s assets(1) included in the single list of facilities, installations, equipment, and services comprising critical infrastructure, referred to in Art. 5b.7.1 of the Polish Crisis Management Act of April 26th 2007,
• change in the Company’s business profile,
• sale or lease of the Company’s business or its organised part, or creation of any proprietary interest therein,
• adoption of the budget, plan of investment activities, or a long-term strategic plan,
• relocation of the Company’s registered office abroad,

if the implementation of any such resolution could constitute a real threat for the operation, continuity of operation and integrity of critical infrastructure.

⁽¹⁾ such assets comprise:

• in the power sector – infrastructure used for the purpose of generation or transmission of electricity;
• in the oil sector – infrastructure used for the purpose of production, refining, processing, storage and transmission via pipelines of crude oil and petroleum products, as well as seaports used for handling crude oil and petroleum products;
• in the gaseous fuels sector – infrastructure used for the purpose of production, refining, processing, storage and transmission via gas pipelines of gaseous fuels, as well as LNG terminals.

In accordance with the Act, the Company’s Management Board, acting in consultation with the minister competent for the State Treasury and the Head of the Government Centre for Security, has the right to appoint and remove from office a special officer responsible for critical infrastructure protection at the Company. The special officer’s duties include in particular providing the minister competent for the State Treasury with information on the execution by the Company’s governing bodies of any of the acts in law referred to above, providing the Head of the Government Centre for Security with information on critical infrastructure whenever requested, and – in cooperation with the Head of the Government Centre for Security – providing and receiving to or from other entities information on any threats to the critical infrastructure.

The special officer responsible for protection of critical infrastructure is authorised to request from company governing bodies any documents or explanations regarding the issues referred to above, and, having analysed them, is required to submit the same to the minister competent for the State Treasury and the Head of the Government Centre for Security, along with the officer’s written position, including grounds, regarding any issue at hand.

Until the approval of these consolidated financial statements, Grupa Lotos S.A. has not received any notification to the effect that any of its assets have been included in the list of facilities, installations, equipment, and services comprising critical infrastructure, and therefore has not appointed a special officer responsible for protection of critical infrastructure.