S.N.G.N. ROMGAZ S.A. GROUP
CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2023
PREPARED IN ACCORDANCE WITH
THE ORDER OF THE MINISTRY OF PUBLIC FINANCE 2844/2016
CONTENTS: | PAGE: |
Statement of consolidated comprehensive income | 1 |
Statement of consolidated financial position | 2 |
Statement of consolidated changes in equity | 4 |
Statement of consolidated cash flow | 5 |
Notes to the consolidated 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 | 21 |
8. Employee benefit expense | 21 |
9. Finance costs | 21 |
10. Other expenses. Taxes and duties | 22 |
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. Earnings per share | 31 |
18. Provisions | 31 |
19. Deferred revenue | 33 |
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 | 38 |
24. Investment in associates | 40 |
25. Other financial investments | 41 |
26. Segment information | 42 |
27. Cash and cash equivalents | 45 |
28. Interest bearing borrowings | 45 |
29. Other financial assets | 45 |
30. Commitments undertaken | 46 |
31. Commitments received | 46 |
32. Contingencies | 46 |
33. Joint arrangements | 47 |
34. Auditor's fees | 47 |
35. Events after the balance sheet date | 48 |
36. Approval of financial statements | 48 |
STATEMENT OF CONSOLIDATED COMPREHENSIVE INCOME
Year ended | Year ended | ||
Note | December 31, 2023 | December 31, 2022 | |
Revenue | 3 | 9,001,878 | 13,359,653 |
Cost of commodities sold | 5 | (107,130) | (183,578) |
Investment income | 4 | 213,008 | 176,979 |
Other gains and losses | 6 | (17,748) | (9,441) |
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 | (109,441) | (118,037) |
Depreciation, amortization and | |||
impairment expenses | 7 | (476,568) | (550,076) |
Employee benefit expense | 8 | (914,054) | (846,001) |
Taxes and duties | 10 b) | (1,495,473) | (6,954,380) |
Finance cost | 9 | (62,003) | (27,295) |
Exploration expense | 13 | (84,640) | (59,714) |
Share of profit of associates | 24 | 4,873 | 2,350 |
Other expenses | 10 a) | (944,191) | (658,916) |
Other income | 3 | 122,264 | 80,068 |
Profit before tax | 5,067,462 | 4,154,249 | |
Income tax expense | 11 | (2,255,353) | (1,607,537) |
Profit for the year | 2,812,109 | 2,546,712 | |
Other comprehensive income | |||
Items that will not be reclassified | |||
subsequently to profit or loss | |||
Actuarial gains/(losses) on post- | |||
employment benefits | 18 c) | (10,970) | 15,839 |
Income tax relating to items that will | |||
not be reclassified subsequently to | |||
profit or loss | 11 | 1,755 | (2,534) |
Total items that will not be | |||
reclassified subsequently to profit | |||
or loss | (9,215) | 13,305 | |
Other comprehensive income for the | |||
year net of income tax | (9,215) | 13,305 | |
Total comprehensive income for the | |||
year | 2,802,894 | 2,560,017 | |
Basic and diluted earnings per share | 17 b) | 0.0073 | 0.0066 |
'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. GROUP |
STATEMENT OF CONSOLIDATED FINANCIAL POSITION |
Note |
December 31, 2023 | December 31, 2022 | ||
ASSETS | |||
Non-current assets | |||
Property, plant and equipment | 12 | 5,891,788 | 5,039,314 |
Intangible assets | 14 a) | 5,135,930 | 5,140,425 |
Investments in associates | 24 | 33,410 | 28,537 |
Deferred tax asset | 11 | 324,175 | 199,016 |
Right of use asset | 14 b) | 11,596 | 8,766 |
Other financial investments | 25 | 5,616 | 5,616 |
Total non-current assets | 11,402,515 | 10,421,674 | |
Current assets | |||
Inventories | 15 | 301,690 | 284,007 |
Trade and other receivables | 16 a) | 1,398,953 | 1,373,664 |
Contract costs | - | 3 | |
Other financial assets | 30 | 2,505,463 | 99,597 |
Other assets | 16 b) | 321,799 | 265,232 |
Cash and cash equivalents | 27 | 535,210 | 1,883,882 |
Total current assets | 5,063,115 | 3,906,385 | |
Total assets | 16,465,630 | 14,328,059 | |
EQUITY AND LIABILITIES | |||
Equity | |||
Share capital | 17 a) | 385,422 | 385,422 |
Reserves | 4,971,109 | 3,579,274 | |
Retained earnings | 6,204,783 | 6,111,869 | |
Total equity | 11,561,314 | 10,076,565 | |
Non-current liabilities | |||
Retirement benefit obligation | 18 | 189,314 | 168,830 |
Deferred revenue | 19 | 370,941 | 230,419 |
Lease liabilities | 10,450 | 7,499 | |
Borrowings | 28 | 808,373 | 1,125,534 |
Provisions | 18 | 373,536 | 210,838 |
Total non-current liabilities | 1,752,614 | 1,743,120 |
'000 RON
'000 RON
S.N.G.N. ROMGAZ S.A. GROUP |
STATEMENT OF CONSOLIDATED FINANCIAL POSITION |
Note |
December 31, 2023 | December 31, 2022 | ||
Current liabilities | |||
Trade payables | 20 | 146,111 | 110,006 |
Contract liabilities | 153,723 | 263,340 | |
Current tax liabilities | 11 | 1,766,637 | 1,177,498 |
Deferred revenue | 19 | 7 | 11 |
Provisions | 18 | 121,732 | 321,489 |
Lease liabilities | 2,579 | 2,181 | |
Borrowings | 28 | 323,349 | 321,581 |
Other liabilities | 20 | 637,564 | 312,268 |
Total current liabilities | 3,151,702 | 2,508,374 | |
Total liabilities | 4,904,316 | 4,251,494 | |
Total equity and liabilities | 16,465,630 | 14,328,059 |
'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. GROUP |
STATEMENT OF CONSOLIDATED CHANGES IN EQUITY |
Share |
capital |
'000 RON |
Geological | ||||||||
Legal | quota | Development | Reinvested | Other | Retained | |||
reserve | reserve**) | fund reserve | profit reserve | reserves | earnings ***) | Total | ||
'000 RON | '000 RON | '000 RON | '000 RON | '000 RON | '000 RON | '000 RON | ||
Balance as of January 1, 2023 | 385,422 | 90,294 | 486,388 | 2,586,687 | 396,180 | 19,725 | 6,111,869 | 10,076,565 |
Profit for the year | - | - | - | - | - | - | 2,812,109 | 2,812,109 |
Other comprehensive income for the year | - | - | - | - | - | - | (9,215) | (9,215) |
Total comprehensive income for the year | - | - | - | - | - | - | 2,802,894 | 2,802,894 |
Allocation to dividends *) | - | - | - | - | - | - | (1,318,145) | (1,318,145) |
Allocation to development fund reserve | - | - | - | 1,315,735 | - | - | (1,315,735) | - |
Increase in reinvested profit reserves | - | - | - | - | 76,100 | - | (76,100) | - |
Balance as of December 31, 2023 | 385,422 | 90,294 | 486,388 | 3,902,422 | 472,280 | 19,725 | 6,204,783 | 11,561,314 |
Balance as of January 1, 2022 | 385,422 | 85,250 | 486,388 | 2,046,460 | 361,152 | 19,725 | 5,596,756 | 8,981,153 |
Profit for the year | - | - | - | - | - | - | 2,546,712 | 2,546,712 |
Other comprehensive income for the year | - | - | - | - | - | - | 13,305 | 13,305 |
Total comprehensive income for the year | - | - | - | - | - | - | 2,560,017 | 2,560,017 |
Allocation to dividends *) | - | - | - | - | - | - | (1,464,605) | (1,464,605) |
Increase in legal reserves | - | 5,044 | - | - | - | - | (5,044) | - |
Allocation to development fund reserve | - | - | - | 540,227 | - | - | (540,227) | - |
Increase in reinvested profit reserves | - | - | - | - | 35,028 | - | (35,028) | - |
Balance as of December 31, 2022 | 385,422 | 90,294 | 486,388 | 2,586,687 | 396,180 | 19,725 | 6,111,869 | 10,076,565 |
*) In 2023 the Group'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 3.80).
**) 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 Group'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 CONSOLIDATED CASH FLOW
Year ended | Year ended | |
December 31, 2023 | December 31, 2022 | |
Cash flows from operating activities | ||
Net profit | 2,812,109 | 2,546,712 |
Adjustments for: | ||
Income tax expense (note 11) | 2,255,353 | 1,607,537 |
Share of associates' result (note 24) | (4,873) | (2,350) |
Interest expense (note 9) | 43,838 | 5,627 |
Unwinding of decommissioning provision (note 9, | ||
note 18) | 18,165 | 21,668 |
Interest revenue (note 4) | (213,008) | (176,979) |
Net loss on disposal of non-current assets (note 6) | 6,867 | 451 |
Change in decommissioning provision recognized in | ||
profit or loss, other than unwinding (note | ||
10,18) | 33,861 | (75,652) |
Change in other provisions (note 10,18) | (196,640) | 111,564 |
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) | 59,537 | 74,726 |
Foreign exchange differences | 7,382 | (453) |
Depreciation and amortization (note 7) | 393,670 | 408,903 |
Amortization of contract costs | 59 | 773 |
Net receivable write-offs and movement in | ||
allowances for trade receivables and other | ||
assets (note 16 c) | 53,523 | 55,765 |
Net movement in write-down allowances for | ||
inventory (note 6, note 15) | 5,647 | 5,438 |
Liabilities written off | (172) | (512) |
Subsidies income (note 19) | (7) | (7) |
Cash generated from operations before | ||
movements in working capital | 5,298,675 | 4,649,674 |
Movements in working capital: | ||
(Increase)/Decrease in inventory | (22,571) | 21,731 |
(Increase)/Decrease in trade and other receivables | (243,732) | (276,839) |
Increase/(Decrease) in trade and other liabilities | 330,817 | (526,915) |
Cash generated from operations | 5,363,189 | 3,867,651 |
Interest paid | (43,183) | (5,040) |
Income taxes paid | (1,781,868) | (410,976) |
Net cash generated by operating activities | 3,538,138 | 3,451,635 |
'000 RON
'000 RON
STATEMENT OF CONSOLIDATED 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 | (6,184,938) | (3,355,306) |
Bank deposits and state bonds matured | 3,790,236 | 3,669,504 |
Interest received | 201,844 | 181,067 |
Proceeds from sale of non-current assets | 1,684 | 1,033 |
Acquisition of non-current assets | (1,141,956) | (5,529,611) |
Acquisition of exploration assets | (50,746) | (96,500) |
Net cash (used in)/generated by investing | ||
activities | (3,383,876) | (5,129,813) |
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 | (2,955) | (1,936) |
Grants received (note 19) | 140,541 | - |
Net cash used in financing activities | (1,502,934) | (18,352) |
Net increase/(decrease) in cash and cash | ||
equivalents | (1,348,672) | (1,696,530) |
Cash and cash equivalents at the beginning of | ||
the year | 1,883,882 | 3,580,412 |
Cash and cash equivalents at the end of the year | 535,210 | 1,883,882 |
'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
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1. BACKGROUND AND GENERAL BUSINESS
Information regarding S.N.G.N. Romgaz S.A. Group (the "Group")
The Group is formed of S.N.G.N. Romgaz S.A. ("the Company"/"Romgaz"), as parent company, and its fully owned subsidiaries S.N.G.N. ROMGAZ S.A. - Filiala de Înmagazinare Gaze Naturale DEPOGAZ Ploiești S.R.L. ("Depogaz") and Romgaz Black Sea Limited.
Romgaz is a joint stock company, incorporated in accordance with the 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).
The Group 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. underground storage of natural gas provided by Depogaz;
5. 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;
6. electricity production and distribution.
2. MATERIAL ACCOUNTING POLICIES
Statement of compliance
The consolidated financial statements ("financial statements") of the Group 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 Group 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 Group 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 Group 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 Group can access at the measurement date;
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
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.
Basis for consolidation
Subsidiaries
The Group controls an entity when it has power over the investee, is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee.
Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and ceases when it loses control of that subsidiary.
Upon obtaining control of a newly acquired subsidiary, the Group assesses whether the acquisition constitutes an acquisition of a business or an acquisition of assets.
Business combinations are accounted for using the acquisition method. The cost of an acquisition is measured as the aggregate of the consideration transferred, which is measured at acquisition date fair value, and the amount of any non-controlling interests in the investee. Acquisition-related costs are expensed as incurred.
The Group determines that it has acquired a business when the acquired set of activities and assets include an input and a substantive process that together significantly contribute to the ability to create outputs. The acquired process is considered substantive if it is critical to the ability to continue producing outputs, and the inputs acquired include an organized workforce with the necessary skills, knowledge, or experience to perform that process or it significantly contributes to the ability to continue producing outputs and is considered unique or scarce or cannot be replaced without significant cost, effort, or delay in the ability to continue producing outputs.
When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition date.
If the acquisition is not a business, it is accounted for as an acquisition of assets.
Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies in line with those used by the Group. All intra-group assets and liabilities, income and expenses relating to transactions between members of the Group are eliminated in full on consolidation.
Associated entities
An associate is a company over which the Group exercises significant influence through participation in decision making on financial and operational policies of the entity invested in. Investments in associates are recorded using the equity method of accounting. By this method, the investment is initially recognized at cost and adjusted thereafter for the post-acquisition change in the Group's share of the investee's net assets. The Group's profit or loss includes its share of the investee's profit or loss and the Group's other comprehensive income includes its share of the investee's other comprehensive income.
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.
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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.