MOL Hungarian Oil and Gas Public Limited Company Annual report ...

MOL HUNGARIAN OIL AND GAS PUBLIC LIMITED COMPANYSupplementary Notes for the year ending on 31 December 2012TABLE OF CONTENTS1. GENERAL INFORMATION .......................................................................................................................... 122. OWNERSHIP STRUCTURE ......................................................................................................................... 133. IMPORTANT ELEMENTS OF MOL PLC’S ACCOUNTING POLICY .......................................................... 15103.1. Method of bookkeeping, report format ........................................................................................................... 153.2. Method and time schedule for report preparation......................................................................................... 153.3. The form of Balance Sheet and the Income Statement................................................................................. 153.4. Valuation methods and procedures used in the preparation of annual report .......................................... 153.4.1. Changes in the Accounting Policy ................................................................................................................. 153.4.2. Valuation methods applied .............................................................................................................................. 163.4.3. Depreciation policy .......................................................................................................................................... 213.4.4. Rules for provisions ......................................................................................................................................... 233.4.5. Classification of errors for previous years .................................................................................................... 243.4.6. Application of Article 4 section (4) of the Accounting Act in the Company’s financial statements for year2012 .................................................................................................................................................................... 244. THE TRUE AND FAIR VIEW OF THE COMPANY’S FINANCIAL AND EARNINGS POSITION ................ 254.1 Company’s assets ............................................................................................................................................ 254.1.1. Changes in the Company’s assets ................................................................................................................. 254.1.2. Capital structure ............................................................................................................................................... 254.1.3. Current assets .................................................................................................................................................. 264.2. Financial position ............................................................................................................................................. 264.3. Return and performance indicators ................................................................................................................ 274.3.1. Revenues ........................................................................................................................................................... 274.3.2. Costs, expenditures compared to revenue .................................................................................................... 284.4. Return and performance indicators ................................................................................................................ 285. CASH FLOW STATEMENT ......................................................................................................................... 306. INTANGIBLE ASSETS ................................................................................................................................. 317. PROPERTY, PLANT AND EQUIPMENT ..................................................................................................... 338. DEPRECIATION ........................................................................................................................................... 359. REVISION OF ESTIMATED USEFUL LIFE OF INTANGIBLE ASSETS AND PROPERTY, PLANT ANDEQUIPMENT ................................................................................................................................................. 3610. PROPERTY, PLANT AND EQUIPMENT USED FOR ENVIRONMENTAL PROTECTION ......................... 3611. RESEARCH AND DEVELOPMENT ............................................................................................................. 3712. HAZARDOUS WASTE AND ENVIRONMENTALLY HARMFUL SUBSTANCES (NOT AUDITED) ........... 3713. LONG-TERM INVESTMENTS ...................................................................................................................... 3813.1. MOL Plc.’s subsidiaries, classified as long-term investments .................................................................... 3813.2. MOL Plc.’s joint venture, classified as long-term investment ...................................................................... 4213.3. MOL Plc.’s associated companies, classified as long-term investments ................................................... 4313.4. Shareholders’ equity of MOL Plc.’s subsidiaries and certain key investments ......................................... 4313.5. MOL Plc.’s other investments, classified as long-term investments .......................................................... 4513.6. Impairment of long-term investments and its reversal ................................................................................. 4614. DETAILS OF LONG-TERM LOANS TO RELATED PARTIES AND OTHER INVESTMENTS ................... 4715. IMPAIRMENT ON LONG-TERM LOANS ..................................................................................................... 47