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

More documents

Recommendations

Info

MOL HUNGARIAN OIL AND GAS PUBLIC LIMITED COMPANYSupplementary Notes for the year ending on 31 December 2012purposes will be determined by cash flow calculation based on profit-generating ability. The Company has createdthe asset groups in its Accounting Policy for determining the profit generating ability.Impairment charged on the basis of market valuation will be reversed if the reasons for impairment do not exist anymoreor exist only in part. The Company will account for reversals only as part of the year-end evaluation of assets.In the Accounting Policy, the amounts of impairment and impairment reversal classified as significant have beendetermined separately for each asset group.3.4.4. Rules for provisionsMOL Plc. provides for contingent liabilities against profit before taxation.Provisions for contingent liabilitiesThe Company makes provisions for liabilities that are expected to arise due to severance payment and earlyretirement in case that it has an accepted plan for redundancies applicable to the coming years, which iselaborated in detail and has a significant financial impact furthermore if decisions related to redundancy aredocumented in details.MOL Plc. makes provisions for retirement bonuses granted to employees. The amount of provision is determinedconsidering actuarial calculation and MOL-specific financial assumptions.MOL Plc. recognises provision to cover liabilities arising from jubilee bonuses of employees who work for theCompany for a long time.Provision is recognised for guarantees and sureties granted by the Company if there is a probability of more than50 % that a part or all of the guarantee or surety amounts will be drawn. When determining this probability, it takesinto account the financial and liquidity position of the company benefiting from the guarantee or surety, itswillingness to pay in the normal course of business with MOL Plc. as well as any information obtained about itsoperation. The amount of provision is determined based on the possible draw downs weighted by probabilities.The Company makes provisions to cover liabilities arisen from wholesale customer complaints if the amount issignificant and if it is probable at the time of the balance sheet preparation that the quantity and quality ofcustomer’s complaint will be accepted..The Company recognises provisions against profit before tax or tangible assets for future liabilities related toenvironmental protection and future liabilities on abandoning production on hydrocarbon production fields(provisions for field abandonment). The amount of the provision is the discounted value of the future liabilitiesexpected to be incurred.If the environmental damages relate to the production process the provision is recognised against profit beforetaxation. If the liability relates directly to the future removal of the assets, restoration of the original conditions, theprovision is capitalised in the value of related oil and gas producing assets taking into consideration the expectedreturn on future production process pursuant to the accounting principle of comparability.Company capitalises in the value of property, plant and equipment (according to the regulations stipulated in Note3.4.6.) that amount of provision which is expected to be incurred in relation to the damage caused by theconstruction and removal of oil and gas producing assets as the mining activity is ceased according to the MiningAct.In line with the statutory obligation related to the emission of greenhouse gases, the Company recognisesprovisions on the following:• any CO 2 emission uncovered as a result of the sale of CO 2 emission rights, received free of charge, and• CO 2 emission in the current year, not covered by the emission rights received free of charge for the currentyear (surplus emission).23
MOL HUNGARIAN OIL AND GAS PUBLIC LIMITED COMPANYSupplementary Notes for the year ending on 31 December 2012The amount of provision is assessed based on emission not covered and market price at balance sheet date.The recognised provisions are proportionately released when the Company fulfils its return obligation arising fromthe statutory regulations with purchased CO 2 emission rights, either in part or in full.Provision is recognised for liabilities expected to arise in connection with ongoing litigations, for the expectedamount (based on a proportion determined subject to the litigation value and the expected outcome of the litigation)if at the time of preparing the balance sheet, it is probable that the Company will incur a financial liability on closingthe legal dispute.The Company recognises provisions for the value of unused points in the Regular Customer point collectionscheme operated by the Company itself and the Multipoint point collection scheme operated with other companies.The Company reviews provisions recognised based on all above title during the balance sheet preparation processand updates values, based on this revision, which is made irrespective of the amount and uses all availableinformation.3.4.5. Classification of errors for previous yearsMOL Plc. determines the limits of significant errors at HUF 0. This means that it accounts for the effect of all errorsconcerning previous years regardless of their value and positive or negative sign as adjustments of previous years,so they do not affect the profit or loss of current period. The errors identified concerning the profit and shareholder’sequity of previous years are shown in the middle column of the balance sheet and income statement, asadjustments to previous years.The combined value of errors and their consequesnces classified as substantially influencing the true and fair viewof the Company if their impact on profit and shareholder’s equity is the lower of 20 % of the shareholders’ equity ofthe year preceding the current reporting year or a change with correct sign exceeding 2 % of balance sheet total ofthe same year.3.4.6. Application of Article 4 section (4) of the Accounting Act in the Company’s financial statements foryear 2012In the course of the preparation of the 2005 annual financial statements, the Company departed from Article 41section (1) of the Accounting Act based on its allowance described in Article 4 section (4) to give a true and fairview of the equity and financial position of MOL Plc. as at 31 December 2005 and of the results of its operations forthe year then ended. Consequently, in order to appropriately match the expenditure with the related revenue,provision for field abandonment in the amount of HUF 50,076 million had been recognised as an increase ofproperty plant and equipment, instead of charging the amount directly to the profit before tax. This treatment isconsistent with that adopted in the consolidated financial statements of the Company prepared in accordance withInternational Financial Reporting Standards.As a result of the departure from the accounting law regarding the field abandonment as at 31 December 2012 theproperty plant and equipment is presented with a higher value of HUF 7,477 million. The Company has registeredcapital reserve (in the amount of HUF 7,477 million) corresponding to the capitalised field abandonment provisionincluded in the net balance of property, plant and equipment as of 31 December 2012 in order to cover futureliabilities from the Company’s equity.24
Page 1 and 2: MOL Hungarian Oil and Gas Public Li
Page 4: MOL HUNGARIAN OIL AND GAS PUBLIC LI
Page 7 and 8: MOL HUNGARIAN OIL AND GAS PUBLIC LI
Page 19 and 20: 18MOL HUNGARIAN OIL AND GAS PUBLIC
Page 23: 22MOL HUNGARIAN OIL AND GAS PUBLIC
Page 39 and 40: EWCcategoryMOL HUNGARIAN OIL AND GA
Page 45 and 46: IDMOL HUNGARIAN OIL AND GAS PUBLIC
Page 75 and 76:
MOL HUNGARIAN OIL AND GAS PUBLIC LI
Page 77 and 78:
MOL HUNGARIAN OIL AND GAS PUBLIC LI
show all

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

Create successful ePaper yourself

Delete template?

Save as template?