MOL GROUP Annual Report

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1.) We have audited the accompanying 2010 consolidated annual financial statements of MOL Hungarian Oil and Gas Plc. Keyfinancial data by business segmentsNET SALES REVENUES2009(HUF mn)2010(HUF mn)20092010(USD mn) 5 (USD mn) 5EBITDA EXC. SPEC ITEM 42009(HUF mn)2010(HUF mn)20092010(USD mn) 5 (USD mn) 5Exploration and Production 489,863 772,260 2,421 3,711Refining and Marketing 2,720,839 3,636,792 13,450 17,476Gas & Power 513,756 517,712 2,540 2,488Petrochemicals 388,280 524,205 1,919 2,519Corporate and other 164,678 164,486 814 790TOTAL NET SALES REVENUES 4,277,416 5,615,455 21,144 26,984NET EXTERNAL2009SALES REVENUES 1 (HUF mn)2010(HUF mn)20092010(USD mn) 5 (USD mn) 5Exploration and Production 301,788 518,406 1,491 2,491Refining and Marketing 2,396,450 3,160,919 11,846 15,189Gas & Power 236,166 190,638 1,168 916Petrochemicals 289,128 395,590 1,429 1,901Corporate and other 31,168 33,156 154 160TOTAL NET EXTERNAL SALES REVENUES 3,254,700 4,298,709 16,088 20,657OPERATING PROFIT2009(HUF mn)2010(HUF mn)20092010(USD mn) 5 (USD mn) 5Exploration and Production 136,722 206,857 676 994Refining and Marketing 15,474 31,808 76 153Gas & Power 61,902 67,666 306 325Petrochemicals (15,219) 1,098 (75) 5Corporate and other 28,000 (68,716) 138 (330)Inter-segment transfers 2 5,500 345 28 2TOTAL OPERATING PROFIT 232,379 239,058 1,149 1,149Exploration and Production 212,271 375,195 1,049 1,803Refining and Marketing 116,988 157,618 578 757Gas & Power 77,593 88,018 384 423Petrochemicals 3,089 19,247 15 92Corporate and other (29,139) (38,770) (144) (186)Inter-segment transfers 2 2,384 (3,109) 12 (14)TOTAL EBITDA EXC. SPEC ITEM 383,186 598,199 1,894 2,8751 Net external sales revenues and operating profit include the profit arising both from sales to third parties and transfers to the other business segments. Exploration and Production transfersdomestically produced crude oil, condensates and LPG to Refining and Marketing and natural gas to the Gas and Power segment. Refining and Marketing transfers chemical feedstock,propylene and isobutane to Petrochemicals and Petrochemicals transfers various by-products to Refining and Marketing. The internal transfer prices used are based on prevailing marketprices. Divisional figures contain the results of the fully consolidated subsidiaries engaged in the respective divisions.2 This line shows the change in the amount of unrealised operating profit in respect of transfers between segments. Unrealised profits arise when the item transferred is held as inventoryby the receiving segment at the end of the period and a third party sale takes place only in a subsequent period. For segmental reporting purposes the transferor segment records the profitimmediately at the point of transfer. However, at the company level profit is only recognised when the related third party sale has taken place. In previous years this unrealised profit effect wasnot shown separately, but was included in the reported segmental result of the receiving segment. Unrealised profits arise principally in respect of transfers from Exploration & Production toGas and Power and from Refining & Marketing to Petrochemicals.3 Operating profit excluding the additional expense of the turnover of inventories of INA which were recognized at fair market value upon initial consolidation as opposed to the carryingamounts reflected in INA Group’s separate financial statements (HUF 4.2 bn in Q1 2010), the additional mining royalty (HUF 30.4 bn at Exploration and Production division) paid in Q3 2010based on the decision of the EU Commission for which provision was recognised in Q2 2010, the provision for redundancy recorded at INA in Q3 2010 (HUF 15.5 bn, the majority of which hasbeen paid in Q4 2010), the provision for tax penalty recorded at INA in Q4 2010 (HUF 4.2 bn), the crisis tax imposed by the Hungarian state on domestic energy sector recorded in H2 2010(HUF 25.8 bn), the one-off gain on the subsequent settlement from E.ON and the Q2 2009 termination of the risk-sharing mechanism in connection with the sale of MOL’s gas business for Q1and Q2 2009 (HUF 14.0 bn and HUF 14.2 bn), the HUF 28.2 bn one-off non-cash revaluation gain, related to consolidating INA into MOL Group in 2009 for the first time as required by IFRS 3R,and the impact of impairment on the goodwill of IES and on certain exploration assets recognised in Q4 2009 and Q4 2010, respectively (HUF 4.7 bn and HUF 11.0 bn).4 EBITDA excluding the additional expense of turnover of the inventories of INA which were recognized at fair market values upon initial consolidation as opposed to the carrying amountsreflected in INA Group’s separate financial statements (HUF 4.2 bn in Q1 2010), the additional mining royalty (HUF 30.4 bn at Exploration and Production division) paid in Q3 2010 basedon the decision of the EU Commission for which provision was recognised in Q2 2010, the provision for redundancy recorded at INA in Q3 2010 (HUF 15.5 bn, the majority of which has beenpaid in Q4 2010), the provision for tax penalty recorded at INA in Q4 2010 (HUF 4.2 bn), the crisis tax imposed by the Hungarian state on domestic energy sector recorded in H2 2010 (HUF25.8 bn), the one-off gain on the subsequent settlement from E.ON and the Q2 2009 termination of the risk-sharing mechanism in connection with the sale of MOL’s gas business for Q1 andQ2 2009 (HUF 14.0 bn and HUF 14.2 bn), the HUF 28.2 bn one-off non-cash revaluation gain, related to consolidating INA into MOL Group in 2009 for the first time as required by IFRS 3R.5 In converting HUF financial data into USD, the following average NBH rates were used: for FY 2009: 202.3 HUF/USD, for FY 2010: 208.1 HUF/USD.Management Discussionand AnalysisOPERATING PROFITEXC. SPEC ITEM 32009(HUF mn)2010(HUF mn)20092010(USD mn) 5 (USD mn) 5Exploration and Production 144,735 258,572 715 1,243Refining and Marketing 28,150 58,518 139 281Gas & Power 61,902 68,119 306 327Petrochemicals (15,219) 1,400 (75) 7Corporate and other (44,366) (56,808) (219) (274)Inter-segment transfers 2 5,500 345 27 2TOTAL OPERATING PROFIT EXC. SPEC ITEM 180,702 330,146 893 1,586EBITDA2009(HUF mn)2010(HUF mn)20092010(USD mn) 5 (USD mn) 5Exploration and Production 204,258 334,496 1,010 1,607Refining and Marketing 108,968 130,908 539 629Gas & Power 77,593 87,565 384 421Petrochemicals 3,089 18,945 15 91Corporate and other 43,227 (50,678) 213 (243)Inter-segment transfers 2 2,384 (3,109) 12 (15)TOTAL EBITDA 439,519 518,127 2,173 2,49050 MOL Group annual report 2010 51
MOL Group excluding INA Group dataOPERATING PROFIT2009(HUF mn)2010(HUF mn)20092010(USD mn) 4 (USD mn) 4Exploration and Production 108,686 86,731 537 417Refining and Marketing 43,061 65,813 213 316Gas & Power 61,902 67,666 306 325Petrochemicals (15,219) 1,098 (75) 5Corporate and other (13,314) (24,648) (66) (118)Inter-segment transfers 1 5,500 545 27 3TOTAL 190,616 197,205 942 948OPERATING PROFITEXC. SPEC ITEM 22009(HUF mn)2010(HUF mn)20092010(USD mn) 4 (USD mn) 4Exploration and Production 108,686 130,696 537 628Refining and Marketing 47,717 87,709 236 421Gas & Power 61,902 68,119 306 327Petrochemicals (15,219) 1,400 (75) 7Corporate and other (41,470) (24,107) (205) (116)Inter-segment transfers 1 5,500 545 27 3TOTAL 167,116 264,362 826 1,270EBITDA2009(HUF mn)2010(HUF mn)20092010(USD mn) 4 (USD mn) 4Exploration and Production 143,881 131,484 711 632Refining and Marketing 130,949 152,331 647 732Gas & Power 77,593 87,565 384 421Petrochemicals 3,089 18,945 15 91Corporate and other (856) (13,031) (4) (63)Inter-segment transfers 1 2,383 (2,906) 12 (14)TOTAL 357,039 374,388 1,765 1,799Management Discussionand AnalysisEBITDA EXC. SPEC ITEM 32009(HUF mn)2010(HUF mn)20092010(USD mn) 4 (USD mn) 4Exploration and Production 143,881 164,433 711 790Refining and Marketing 130,949 174,227 647 837Gas & Power 77,593 88,018 384 423Petrochemicals 3,089 19,247 15 92Corporate and other (29,012) (12,490) (143) (59)Inter-segment transfers 1 2,383 (2,906) 12 (14)TOTAL 328,883 430,529 1,626 2,0691 This line shows the change in the amount of unrealised operating profit in respect of transfers between segments. Unrealised profits arise when the item transferred is held as inventoryby the receiving segment at the end of the period and a third party sale takes place only in a subsequent period. For segmental reporting purposes the transferor segment records the profitimmediately at the point of transfer. However, at the company level profit is only recognised when the related third party sale has taken place. In previous years this unrealised profit effect wasnot shown separately, but was included in the reported segmental result of the receiving segment. Unrealised profits arise principally in respect of transfers from Exploration & Production toGas and Power and from Refining & Marketing to Petrochemicals.2 Operating profit excluding the additional mining royalty (HUF 30.4 bn at Exploration and Production division) paid in Q3 2010 based on the decision of the EU Commission for whichprovision was recognised in Q2 2010, the crisis tax imposed by the Hungarian state on domestic energy sector recorded in H2 2010 (HUF 25.8 bn), the one-off gain on the subsequentsettlement from E.ON and the Q2 2009 termination of the risk-sharing mechanism in connection with the sale of MOL’s gas business for Q1 and Q2 2009 (HUF 14.0 bn and HUF 14.2 bn), andthe impact of impairment on the goodwill of IES and on certain exploration assets recognised in Q4 2009 and Q4 2010, respectively (HUF 4.7 bn and HUF 11.0 bn).3 EBITDA excluding the additional mining royalty (HUF 30.4 bn at Exploration and Production division) paid in Q3 2010 based on the decision of the EU Commission for which provision wasrecognsied in Q2 2010, the crisis tax imposed by the Hungarian state on domestic energy sector recorded in H2 2010 (HUF 25.8 bn), the one-off gain on the subsequent settlement from E.ONand the Q2 2009 termination of the risk-sharing mechanism in connection with the sale of MOL’s gas business for Q1 and Q2 2009 (HUF 14.0 bn and HUF 14.2 bn).4 In converting HUF financial data into USD, the following average NBH rates were used: for FY 2009: 202.3 HUF/USD, for FY 2010: 208.1 HUF/USD.Duna Refinery in Hungary52 MOL Group annual report 2010 53
Page 1 and 2: MOL GROuP ANNuAL REPORT 2010MOL GRO
Page 4 and 5: Key financial and operating dataKey
Page 6 and 7: Overview of the environmentWorld ec
Page 8 and 9: Exploration and ProductionHIGHLIGHT
Page 10 and 11: OTHER RESuLTSSustainable developmen
Page 12 and 13: upstreaPortfolio EleentsRuSSIASPE 2
Page 14 and 15: ize MOL and INA sales channels in C
Page 16 and 17: PetrochemicalsPetrochemicalsPetroch
Page 18 and 19: Downstream portfolioelementsDomesti
Page 20 and 21: The most important events of 2010Th
Page 22 and 23: Gas and PowerGas and PowerThe Gas a
Page 24 and 25: Financial and Operational Performan
Page 28 and 29: Moderating growth in world economy,
Page 30 and 31: Higher personal expenses due to ful
Page 32 and 33: Unit OPEX slightly increasedStronge
Page 34 and 35: …and in SPE P1 reserves2010 was t
Page 36 and 37: In Slovakia sales volumes recovered
Page 38 and 39: has been granted an IPPC and a Buil
Page 40 and 41: Refining & MarketingCAPEX down by 5
Page 42 and 43: INDEPENDENT AuDITOR’S REPORTMOL H
Page 44 and 45: Consolidated balance sheet31 Decemb
Page 46 and 47: Consolidated cash flow statement31
Page 48 and 49: Joint venturesA joint venture is a
Page 50 and 51: vi) HedgingFor the purpose of hedge
Page 52 and 53: off. Upon determination of economic
Page 54 and 55: At each balance sheet date, the Com
Page 56 and 57: IAS 1 Presentation of Financial Sta
Page 58 and 59: Exploration costsTransfers from exp
Page 60 and 61: 6 Subsidiaries and jointly controll
Page 62 and 63: The purchase price allocation for t
Page 64 and 65: 10 Investments in associated compan
Page 66 and 67: 15 Other current assets16 Cash and
Page 68 and 69: Changes in the number of ordinary,
Page 70 and 71: The following table summarises the
Page 72 and 73: 28 Financial (income) / expense30 I
Page 75 and 76: The Group may use cross currency sw
Page 77 and 78:
Capital managementThe primary objec
Page 79 and 80:
Operating leasesOperating lease lia
Page 81 and 82:
37 Notes to the consolidated statem
Page 83 and 84:
Historical SummaryHistorical Summar
Page 85 and 86:
Gross reserves (according to SPE ru
Page 87 and 88:
Petrochmical production (kt) 2005 2
Page 89 and 90:
InterviewwithGyörgy MosonyiThe str
Page 91 and 92:
Objective Result Fulfillment of the
Page 93 and 94:
effluents. We found that the persis
Page 95 and 96:
The main programme elements are Ext
Page 97 and 98:
Employee engagementWe conduct a Gro
Page 99 and 100:
Ethical notifications received and
Page 101 and 102:
4 Sustainability data (Performance
Page 103 and 104:
5 Notes on Non-Financial Reporting5
Page 105 and 106:
6 Assurance statements6.1 Independe
Page 107 and 108:
CorporateCorporate GovernanceCorpor
Page 109 and 110:
The Board of Directors prepares a f
Page 111 and 112:
The chairman of the Supervisory Boa
Page 113 and 114:
The main role of Financial Risk Man
Page 115 and 116:
7.10.11.8.9.7. Mr. József Molnár
Page 117 and 118:
6. Mr. József Simola (44)Corporate
Page 119 and 120:
7.Mr. József Kohán (59)Member of
Page 121 and 122:
Ownership Structure31.12.2009 31.12
Page 123 and 124:
GlossaryAverage production costTota
Page 125 and 126:
Putting into productionAccomplishme
Page 127 and 128:
Content tableTopic of interestCover
Page 129:
Statementresponsibilityofundersigne
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MOL GROUP Annual Report

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