S.N.G.N. ROMGAZ S.A.
SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2023
PREPARED IN ACCORDANCE WITH
MINISTRY OF FINANCE ORDER 2844/2016
CONTENTS: | PAGE: |
Statement of comprehensive income | 1 |
Statement of financial position | 2 |
Statement of changes in equity | 4 |
Statement of cash flow | 5 |
Notes to the financial statements | 7 |
1. Background and general business | 7 |
2. Significant accounting policies | 7 |
3. Revenue and other income | 19 |
4. Investment income | 20 |
5. Cost of commodities sold, raw materials and consumables | 20 |
6. Other gains and losses | 20 |
7. Depreciation, amortization and impairment expenses | 20 |
8. Employee benefit expense | 21 |
9. Finance costs | 21 |
10. Other expenses. Taxes and duties | 21 |
11. Income tax | 22 |
12. Property, plant and equipment. | 25 |
13. Exploration and appraisal for natural gas resources | 27 |
14. Intangible assets. Right of use assets | 28 |
15. Inventories | 29 |
16. Accounts receivable | 29 |
17. Share capital | 31 |
18. Provisions | 31 |
19. Deferred revenue | 34 |
20. Trade and other current liabilities | 34 |
21. Financial instruments | 35 |
22. Related party transactions and balances | 38 |
23. Information regarding the members of the administrative, management and | |
supervisory bodies | 39 |
24. Investment in subsidiaries and associates | 40 |
25. Other financial investments | 41 |
26. Cash and cash equivalents | 41 |
27. Other financial assets | 42 |
28. Interest bearing borrowings | 42 |
29. Assets held for disposal and related liabilities | 42 |
30. Commitments undertaken | 43 |
31. Commitments received | 43 |
32. Contingencies | 43 |
33. Joint arrangements | 44 |
34. Auditor's fees | 44 |
35. Events after the balance sheet date | 44 |
36. Approval of financial statements | 45 |
STATEMENT OF COMPREHENSIVE INCOME
Year ended | Year ended | ||
Note | December 31, 2023 | December 31, 2022 | |
Revenue | 3 | 8,619,286 | 13,071,969 |
Cost of commodities sold | 5 | (107,060) | (183,574) |
Investment income | 4 | 273,027 | 188,404 |
Other gains and losses | 6 | (12,957) | (10,795) |
Net impairment gains/(losses) on trade | |||
receivables | 16 | (57,546) | (55,166) |
Changes in inventory of finished goods and work | |||
in progress | (5,767) | (2,197) | |
Raw materials and consumables used | 5 | (94,857) | (102,326) |
Depreciation, amortization and impairment | |||
expenses | 7 | (433,391) | (461,425) |
Employee benefit expense | 8 | (819,207) | (769,026) |
Taxes and duties | 10 b) | (1,478,423) | (6,940,057) |
Finance cost | 9 | (61,913) | (27,233) |
Exploration expense | 13 | (83,051) | (59,069) |
Other expenses | 10 a) | (850,009) | (604,114) |
Other income | 3 | 122,126 | 78,503 |
Profit before tax | 5,010,258 | 4,123,894 | |
Income tax expense | 11 | (2,360,981) | (1,591,949) |
Profit for the year | 2,649,277 | 2,531,945 | |
Other comprehensive income | |||
Items that will not be reclassified | |||
subsequently to profit or loss | |||
Actuarial gains/(losses) on post-employment | |||
benefits | 18 c) | (9,338) | 14,096 |
Income tax relating to items that will not be | |||
reclassified subsequently to profit or loss | 11 | 1,494 | (2,255) |
Total items that will not be reclassified | |||
subsequently to profit or loss | (7,844) | 11,841 | |
Other comprehensive income for the year net | |||
of income tax | (7,844) | 11,841 | |
Total comprehensive income for the year | 2,641,433 | 2,543,786 |
'000 RON
These financial statements were endorsed by the Board of Directors on March 22, 2024.
Răzvan Popescu
Chief Executive Officer
Gabriela Trânbițaș
Chief Financial Officer
'000 RON
Note | December 31, 2023 | December 31, 2022 | |
ASSETS | |||
Non-current assets | |||
Property, plant and equipment | 12 | 4,629,477 | 4,387,058 |
Intangible assets | 14 | 15,223 | 19,735 |
Investments in subsidiaries | 24 a) | 5,185,051 | 5,185,051 |
Investments in associates | 24 b) | 120 | 120 |
Deferred tax asset | 11 | 213,352 | 217,073 |
Net lease investment | 211 | 286 | |
Other assets | 16 b) | 549,710 | 27,722 |
Right of use asset | 14 | 10,774 | 6,786 |
Other financial investments | 25 | 5,616 | 5,616 |
Total non-current assets | 10,609,534 | 9,849,447 | |
Current assets | |||
Inventories | 15 | 293,749 | 274,531 |
Trade and other receivables | 16 a) | 1,337,437 | 1,334,163 |
Contract costs | - | 3 | |
Other financial assets | 27 | 2,344,349 | 8,481 |
Other assets | 16 b) | 258,769 | 250,922 |
Net lease investment | 104 | 88 | |
Cash and cash equivalents | 26 | 518,831 | 1,867,570 |
Total current assets | 4,753,239 | 3,735,758 | |
Assets held for sale | 29 | 687,453 | 677,634 |
Total assets | 16,050,226 | 14,262,839 | |
EQUITY AND LIABILITIES | |||
Equity | |||
Share capital | 17 | 385,422 | 385,422 |
Reserves | 4,834,685 | 3,492,228 | |
Retained earnings | 6,172,369 | 6,191,538 | |
Total equity | 11,392,476 | 10,069,188 | |
Non-current liabilities | |||
Retirement benefit obligation | 18 | 177,721 | 158,934 |
Deferred revenue | 19 | 276,749 | 230,419 |
Lease liabilities | 10,450 | 7,090 | |
Borrowings | 28 | 808,373 | 1,125,534 |
Provisions | 18 | 336,648 | 186,778 |
Total non-current liabilities | 1,609,941 | 1,708,755 |
'000 RON
'000 RON
Note | December 31, 2023 | December 31, 2022 | |
Current liabilities | |||
Trade payables | 20 | 139,733 | 86,903 |
Contract liabilities | 153,723 | 263,340 | |
Current tax liabilities | 11 | 1,762,716 | 1,171,873 |
Deferred revenue | 19 | 7 | 11 |
Provisions | 18 | 111,607 | 312,867 |
Lease liabilities | 2,023 | 1,017 | |
Borrowings | 28 | 323,349 | 321,581 |
Other liabilities | 20 | 493,557 | 279,797 |
Total current liabilities | 2,986,715 | 2,437,389 | |
Liabilities directly associated with the assets | |||
held for disposal | 29 | 61,094 | 47,507 |
Total liabilities | 4,657,750 | 4,193,651 | |
Total equity and liabilities | 16,050,226 | 14,262,839 |
'000 RON
These financial statements were endorsed by the Board of Directors on March 22, 2024.
Răzvan Popescu
Chief Executive Officer
Gabriela Trânbițaș
Chief Financial Officer
'000 RON
S.N.G.N. ROMGAZ S.A.
STATEMENT OF CHANGES IN EQUITY
Geological | Reinvested | |||||||
Share | Legal | quota | Development | profit | Other | Retained | ||
capital | reserve | reserve**) | fund reserve | reserve | reserves | earnings ***) | Total | |
'000 RON | '000 RON | '000 RON | '000 RON | '000 RON | '000 RON | '000 RON | '000 RON | |
Balance as of January 1, 2023 | 385,422 | 77,084 | 486,388 | 2,543,502 | 365,529 | 19,725 | 6,191,538 | 10,069,188 |
Profit for the year | - | - | - | - | - | - | 2,649,277 | 2,649,277 |
Other comprehensive income for the year | - | - | - | - | - | - | (7,844) | (7,844) |
Total comprehensive income for the | ||||||||
year | - | - | - | - | - | - | 2,641,433 | 2,641,433 |
Allocation to dividends *) | - | - | - | - | - | - | (1,318,145) | (1,318,145) |
Allocation to development fund reserve | - | - | - | 1,268,874 | - | - | (1,268,874) | - |
Increase in reinvested profit reserves | - | - | - | - | 73,583 | - | (73,583) | - |
Balance as of December 31, 2023 | 385,422 | 77,084 | 486,388 | 3,812,376 | 439,112 | 19,725 | 6,172,369 | 11,392,476 |
Balance as of January 1, 2022 | 385,422 | 77,084 | 486,388 | 2,003,275 | 333,702 | 19,725 | 5,684,411 | 8,990,007 |
Profit for the year | - | - | - | - | - | - | 2,531,945 | 2,531,945 |
Other comprehensive income for the year | - | - | - | - | - | - | 11,841 | 11,841 |
Total comprehensive income for the | ||||||||
year | - | - | - | - | - | - | 2,543,786 | 2,543,786 |
Allocation to dividends *) | - | - | - | - | - | - | (1,464,605) | (1,464,605) |
Allocation to development fund reserve | - | - | - | 540,227 | - | - | (540,227) | - |
Increase in reinvested profit reserves | - | - | - | - | 31,827 | - | (31,827) | - |
Balance as of December 31, 2022 | 385,422 | 77,084 | 486,388 | 2,543,502 | 365,529 | 19,725 | 6,191,538 | 10,069,188 |
*) In 2023 the Company's shareholders approved the allocation of dividends of RON 1,318,145 thousand (2022: RON 1,464,605 thousand), dividend per share being RON 3.42 (2022: RON 3.8).
**) The geological quota reserve was set up until 2004 in accordance with the provisions of Government Decision no. 168/1998 on the establishment of the expense quota for the development and modernization of oil and natural gas production, refining, transportation and oil distribution. The reserve cannot be distributed.
***) Retained earnings include the geological quota reserve set up after 2004 in accordance with the provisions of Government Decision no. 168/1998 on the establishment of the expense quota for the development and modernization of oil and natural gas production, refining, transportation and oil distribution. Following the Company's transition to IFRS, the reserve existing as of December 31, 2012 was transferred to retained earnings. This result is allocated based on the depreciation, respectively write-off of the assets financed using this source, based on decision of General Meeting of Shareholders. As of December 31, 2023 the geological quota reserve available for distribution is of RON 627,612 thousand (December 31, 2022: RON 714,512 thousand).
These financial statements were endorsed by the Board of Directors on March 22, 2024.
Răzvan Popescu
Gabriela Trânbițaș
Chief Executive Officer
Chief Financial Officer
STATEMENT OF CASH FLOW
Year ended | Year ended | |
December 31, 2023 | December 31, 2022 | |
Cash flows from operating activities | ||
Net profit | 2,649,277 | 2,531,945 |
Adjustments for: | ||
Income tax expense (note 11) | 2,360,981 | 1,591,949 |
Interest expense (note 9) | 43,748 | 5,565 |
Income from dividends (note 4) | (50,247) | (13,583) |
Unwinding of decommissioning provision (note 9, | ||
note 18) | 18,165 | 21,668 |
Interest revenue (note 4) | (222,780) | (174,821) |
Net loss on disposal of non-current assets (note | ||
6) | 4,501 | 451 |
Change in decommissioning provision recognized | ||
in profit or loss, other than unwinding (note | ||
10, note 18) | 33,763 | (75,629) |
Change in other provisions (note 10, note 18) | (197,434) | 110,976 |
Net impairment of exploration assets (note 7, | ||
note 13) | 23,361 | 66,447 |
Exploration projects written off (note 13) | 3 | 16 |
Net impairment of property, plant and equipment | ||
and intangibles (note 7) | 61,271 | 73,710 |
Foreign exchange differences | 7,382 | (453) |
Depreciation and amortization (note 7) | 348,759 | 321,268 |
Amortization of contract costs | 59 | 773 |
Net receivable write-offs and movement in | ||
allowances for trade receivables and other | ||
assets (note 16 c) | 53,519 | 55,765 |
Other gains and losses | 1,069 | 1,793 |
Net movement in write-down allowances for | ||
inventory (note 6, note 15) | 4,568 | 4,814 |
Liabilities written off | (172) | (512) |
Subsidies income (note 19) | (7) | (7) |
Cash generated from operations before | ||
movements in working capital | 5,139,786 | 4,522,135 |
Movements in working capital: | ||
(Increase)/Decrease in inventory | (23,027) | 19,556 |
(Increase)/Decrease in trade and other | ||
receivables | (172,993) | (232,183) |
Increase/(Decrease) in trade and other liabilities | 236,006 | (573,356) |
Cash generated from operations | 5,179,772 | 3,736,152 |
Interest paid | (43,183) | (5,040) |
Income taxes paid | (1,757,188) | (404,171) |
Net cash generated by operating activities | 3,379,401 | 3,326,941 |
'000 RON
'000 RON
STATEMENT OF CASH FLOW
Year ended | Year ended | |
December 31, 2023 | December 31, 2022 | |
Cash flows from investing activities | ||
Bank deposits set up and acquisition of state | ||
bonds | (5,980,520) | (3,220,306) |
Bank deposits and state bonds matured | 3,655,236 | 3,599,005 |
Loans granted to subsidiaries | (504,368) | (27,359) |
Interest received | 194,553 | 179,571 |
Proceeds from sale of non-current assets | 1,684 | 1,033 |
Dividends received | 50,247 | 13,583 |
Acquisition of shares in ExxonMobil Exploration | ||
and Production Romania Limited | - | (5,126,347) |
Acquisition of non-current assets | (498,466) | (336,969) |
Acquisition of exploration assets | (50,746) | (96,500) |
Collection of lease payments | 120 | 105 |
Net cash (used in)/generated by investing | ||
activities | (3,132,260) | (5,014,184) |
Cash flows from financing activities | ||
Borrowings received | - | 1,606,475 |
Repayment of borrowings | (322,775) | (158,907) |
Dividends paid | (1,317,745) | (1,463,984) |
Repayment of lease liability | (1,709) | (1,422) |
Grants received (note 19) | 46,349 | - |
Net cash used in financing activities | (1,595,880) | (17,838) |
Net increase/(decrease) in cash and cash | ||
equivalents | (1,348,739) | (1,705,081) |
Cash and cash equivalents at the beginning of | ||
the year | 1,867,570 | 3,572,651 |
Cash and cash equivalents at the end of the | ||
year | 518,831 | 1,867,570 |
'000 RON
These financial statements were endorsed by the Board of Directors on March 22, 2024.
Răzvan Popescu
Chief Executive Officer
Gabriela Trânbițaș
Chief Financial Officer
'000 RON
1. BACKGROUND AND GENERAL BUSINESS
Information regarding S.N.G.N. Romgaz S.A. (the "Company"/"Romgaz")
S.N.G.N. Romgaz S.A. is a joint stock company, incorporated in accordance with Romanian legislation.
The Company's headquarter is in Mediaş, 4 Constantin I. Motaş Square, 551130, Sibiu County.
The Romanian State, through the Ministry of Energy is the majority shareholder of S.N.G.N. Romgaz S.A. together with other legal and physical persons (note 17).
Romgaz has as main activity:
1. geological research for the discovery of natural gas, crude oil and condensate reserves;
2. operation, production and usage, including trading, of mineral resources;
3. natural gas production for:
ensuring the storage flow continuity;
technological consumption;
delivery in the transmission system.
4. commissioning, interventions, capital repairs for wells equipping the deposits, as well as the natural gas resources extraction wells, for its own activity and for third parties;
5. electricity production and distribution.
2. MATERIAL ACCOUNTING POLICIES
Statement of compliance
The separate financial statements ("financial statements") of the Company are prepared in accordance with Ministry of Finance Order 2844/2016, with subsequent amendments, to approve accounting regulations in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union (MOF 2844/2016). MOF 2844/2016, with subsequent amendments, is in accordance with the IFRS adopted by the European Union.
For the purpose of the preparation of these financial statements, the functional currency of the Company is deemed to be the Romanian Leu (RON).
Basis of preparation
The financial statements are prepared on a going concern basis. The principal accounting policies are set out below.
Accounting is kept in Romanian and in the national currency. Items included in these financial statements are denominated in Romanian lei. Unless otherwise stated, the amounts are presented in thousand lei (thousand RON).
Fair value
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or a liability, the Company takes into account the characteristics of the asset or liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement date. Fair value for measurement and/or disclosure purposes in these financial statements is determined on such a basis, except for measurements that have some similarities to fair value but are not fair value, such as net realizable value in IAS 2 "Inventory" or value in use in IAS 36 "Impairment of assets".
In addition, for financial reporting purposes, fair value measurements are categorized into Level 1, 2 or 3 based on the degree to which the inputs to the fair value measurements are observable and the significance to the Company of the inputs to the fair value measurement, which are described as follows:
level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company can access at the measurement date;
level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly; and
level 3 inputs are unobservable inputs for the asset or liability.
Subsidiaries
A subsidiary is an entity controlled by the Company. In establishing the existence of control, the Company analyses the following:
if it has authority over the invested entity;
if it is exposed to, or has rights to variable returns from its involvement in the invested entity;
if it has the ability to use its authority over the invested entity to affect these returns.
The investment in a subsidiary is recognized at cost less accumulated impairment.
Associated entities
An associate is a company over which the Company exercises significant influence through participation in decision making on financial and operational policies of the entity invested in. Investments are recorded at cost less accumulated impairment.
Joint arrangements
A joint arrangement is an arrangement of which two or more parties have joint control. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require the unanimous consent of the parties sharing control.
A joint arrangement is either a joint operation or a joint venture.
A joint operation is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the assets, and obligations for the liabilities, relating to the arrangement. Those parties are called joint operators.
A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the arrangement. Those parties are called joint ventures.
Joint operations
The Company recognizes in relation to its interest in a joint operation:
its assets, including its share of any assets held jointly;
its liabilities, including its share of any liabilities incurred jointly;
its revenue from the sale of its share of the output arising from the joint operation;
its share of the revenue from the sale of the output by the joint operation; and
its expenses, including its share of any expenses incurred jointly.
As joint operator, the Company accounts for the assets, liabilities, revenues and expenses relating to its interest in a joint operation in accordance with the IFRSs applicable to the particular assets, liabilities, revenues and expenses.
If the Company participates in, but does not have joint control of, a joint operation it accounts for its interest in the arrangement in accordance with the paragraphs above if it has rights to the assets, and obligations for the liabilities, relating to the joint operation.
If the Company participates in, but does not have joint control of, a joint operation, does not have rights to the assets, and obligations for the liabilities, relating to that joint operation, it accounts for its interest in the joint operation in accordance with the IFRSs applicable to that interest.
Standards and interpretations valid for the current period
The following standards and amendments or improvements to existing standards issued by the IASB and adopted by the EU have entered into force for the current period:
Amendments to IAS 12 "Income taxes: Deferred Tax related to Assets and Liabilities arising from a single transaction" (effective for annual periods beginning on or after January 1, 2023);
Amendments to IAS 12 "Income taxes: International Tax Reform - Pillar Two Model" (effective for annual periods beginning on or after January 1, 2023);
Amendments to IFRS 17 "Insurance Contracts: initial application of IFRS 17 and IFRS 9 - comparative information" (applicable to annual periods beginning on or after January 1, 2023);
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Disclaimer
SNGN Romgaz SA published this content on 24 March 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 25 March 2024 13:15:21 UTC.