14.7. Loans, borrowings and bonds

SELECTED ACCOUNTING PRINCIPLES

Loans, borrowings and bonds

At initial recognition, all loans, borrowings and bonds are recognised at fair value, less transaction costs and discounts or premiums. After initial recognition, loans, borrowings and bonds are measured at amortized cost using the effective interest rate method.

During the 2021, as a part of cash flows from financing activities:

• the Group has made drawings and repayments of borrowings and loans from available credit lines in the total amount of PLN 14,392 million and PLN (14,705) million. ORLEN Unipetrol Group converted short-term loan debt for long-term debt by signing appropriate agreements with banks,
• PKN ORLEN issued corporate bonds of D series in the amount of PLN 1,000 million (which corresponds to cash flow of PLN 995 million less about discount) and Eurobonds of A series in the amount of EUR 500 million (which corresponds to cash flow of PLN 2,230 million less about discount), and also redeemed retail bonds of A series in the nominal amount of PLN 200 million,
• ORLEN Capital executed the redemption of Eurobonds from 2014 in the amount of EUR 500 million (corresponding to a cash flow of PLN 2,252 million).

In addition, the change in the balance of loans as at 31 December 2021 was affected by the Group’s acquisition of new subsidiaries with debt in the total amount of PLN 335 million.

In addition, four series of PKN ORLEN retail bonds, series C and series D, with a total nominal value of PLN 400 million, maturing in June 2022, series E with a nominal value of PLN 200 million maturing in July 2022 as well as series B with a nominal value of PLN 200 million, maturing in December 2022, were reclassified from the long-term to the short-term part.