Contents

• Annual Report
• Financial Statements
• Corporate Governance

Notes to the Consolidated Financial Statements – Contents

11. Property, Plant and Equipment

in PLN m

	Dec 31 2012	Dec 31 2011
Land	70	58
Buildings and structures	16,522	14,663
Plant and equipment	4,530	2,480
Vehicles and other	1,244	1,054
Total tangible assets	22,366	18,255
Tangible assets under construction - exploration for and evaluation of mineral resources	2,371	1,896
Other tangible assets under construction	9,047	9,168
Total property, plant and equipment	33,784	29,319

Tangible Assets

in PLN m

Dec 31 2012	Land	Buildings and structures	Plant and equipment	Vehicles and other	Total
As at Jan 1 2012, net of accumulated depreciation and impairment losses	58	14,663	2,480	1,054	18,255
Increase	-	367	10	3	380
Changes in the Group	8	803	1,606	7	2,424
Decrease	(1)	(133)	(19)	(19)	(172)
Currency translation differences	-	-	1	(1)	-
Transfers from tangible assets under construction and between groups	5	2,008	1,039	395	3,447
Impairment losses	-	(175)	(28)	7	(196)
Depreciation expense for the reporting period	-	(1,011)	(559)	(202)	(1,772)
As at Dec 31 2012, net of accumulated depreciation and impairment losses	70	16,522	4,530	1,244	22,366
As at Jan 1 2012
Gross value	60	22,411	4,887	2,019	29,377
Accumulated depreciation and impairment losses	(2)	(7,748)	(2,407)	(965)	(11,122)
Net carrying amount as at Jan 1 2012	58	14,663	2,480	1,054	18,255
As at Dec 31 2012
Gross value	72	25,430	7,470	2,366	35,338
Accumulated depreciation and impairment losses	(2)	(8,908)	(2,940)	(1,122)	(12,972)
Net carrying amount as at Dec 31 2012	70	16,522	4,530	1,244	22,366

Dec 31 2011	Land	Buildings and structures	Plant and equipment	Vehicles and other	Total
As at Jan 1 2011, net of accumulated depreciation and impairment losses	51	14,506	2,450	980	17,987
Increase	-	114	39	48	201
Decrease	-	(191)	(24)	(10)	(225)
Transfers from tangible assets under construction and between groups	7	1,126	398	233	1,764
Impairment losses	-	80	(18)	(12)	50
Depreciation expense for the year	-	(972)	(365)	(185)	(1,522)
As at Dec 31 2011, net of accumulated depreciation and impairment losses	58	14,663	2,480	1,054	18,255
As at Jan 1 2011
Gross value	53	21,425	4,539	1,812	27,829
Accumulated depreciation and impairment losses	(2)	(6,919)	(2,089)	(832)	(9,842)
Net carrying amount as at Jan 1 2011	51	14,506	2,450	980	17,987
As at Dec 31 2011
Gross value	60	22,411	4,887	2,019	29,377
Accumulated depreciation and impairment losses	(2)	(7,748)	(2,407)	(965)	(11,122)
Net carrying amount as at Dec 31 2011	58	14,663	2,480	1,054	18,255

11.1. Property, plant and equipment used under finance lease agreements

The PGNiG Group uses the following property, plant and equipment under finance lease agreements as a lessee.

in PLN m

	Dec 31 2012				Dec 31 2011
	Initial value of capitalised finance lease	Accumulated depreciation	Impairment loss	Net carrying amount	Initial value of capitalised finance lease	Accumulated depreciation	Impairment loss	Net carrying amount
Buildings and structures	-	-	-	-	-	-	-	-
Plant and equipment	225	(46)	-	179	115	(29)	-	86
Vehicles and other	50	(9)	-	41	42	(10)	-	32
Total	275	(55)	-	220	157	(39)	-	118

11.2. Impairment losses on property, plant and equipment

in PLN m

	Land	Buildings and structures	Plant and equipment	Vehicles and other	Total tangible assets	Tangible assets under construction - exploration for and evaluation of mineral resources	Other tangible assets under construction	Total property, plant and equipment
As at Jan 1 2012	2	461	119	18	600	299	152	1,051
Increase	1	357	74	5	437	138	24	599
Decrease	(1)	(182)	(45)	(11)	(239)	(155)	(72)	(466)
Transfers	-	-	-	-	-	53	(53)	-
Currency translation differences	-	-	(1)	(1)	(2)	-	-	(2)
Changes in the Group	-	-	-	-	-	-	23	23
As at Dec 31 2012	2	636	147	11	796	335	74	1,205
As at Jan 1 2011	2	541	101	6	650	299	244	1,193
Increase	-	36	22	12	70	-	90	160
Decrease	-	(116)	(4)	-	(120)	-	(182)	(302)
As at Dec 31 2011	2	461	119	18	600	299	152	1,051

As at the beginning of the period, impairment losses on tangible assets stood at PLN 600m, of which:

• PLN 361m were impairment losses on assets used directly in hydrocarbon production,
• PLN 7m were impairment losses on distribution assets,
• PLN 11m were impairment losses on assets of underground gas storage facilities,
• PLN 221m were impairment losses on other tangible assets.

New impairment losses recognised in the reporting period amounted to PLN 437m (of which PLN 405m was related to assets used directly in hydrocarbon production). Impairment losses were reduced by PLN 241m (including PLN 169m related to assets used directly in hydrocarbon production, PLN 12m related to storage assets, and the remaining amount relating to other assets, including unused assets or assets with unclear legal status).
As at the end of the period, impairment losses on tangible assets stood at PLN 796m, of which:

• PLN 597m were impairment losses on assets used directly in hydrocarbon production,
• PLN 8m were impairment losses on distribution assets,
• PLN 1m were impairment losses on assets of underground gas storage facilities,
• PLN 190m were impairment losses on other tangible assets.

Polish Oil & Gas Company (PGNiG SA) KRS 0000059492, NIP 525-000-80-28, share capital 5,900,000,000 PLN – fully paid Headquarters – 25 M. Kasprzaka Street, 01-224 Warsaw, Poland Phone: +48 22 589 45 55, Fax: +48 22 691 82 73