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MOL Group

Annual Financial Report

2023

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MOL Hungarian Oil and Gas Plc.

MANAGEMENT DISCUSSION AND ANALYSIS

31 December 2023

Budapest, 21 March 2024

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MANAGEMENT DISCUSSION AND ANALYSIS OF 2023 BUSINESS OPERATIONS

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1. OVERVIEW OF THE MACROECONOMIC AND INDUSTRY ENVIRONMENT

Macroeconomic environment

Global output growth proved unexpectedly resilient last year, despite the fact that the 3.1% annual growth rate remains below the historical (2000-2019) average of 3.8%.[1] At the start of 2023, declining real incomes, rapid and widespread monetary policy tightening and the gradual but steady phase out of fiscal transfers in advanced economies projected a much harder landing for the global economy. In contrast, inflation has declined more quickly than initially anticipated and energy support schemes have helped to cushion household incomes and underpin activity in many economies. Still, outcomes diverged across countries, with stronger than expected growth in the United States and many emerging-market economies, offset by a slowdown in most European countries. China's economy grew 5.2% in 2023, slightly more than the official target, but the recovery was far shakier than expected, with a deepening property crisis, mounting deflationary risks and muted domestic demand.

The rising momentum was not felt everywhere, with notably subdued growth in the Euro area, reflecting the continued adverse effects of the energy price shock, the lagged effect of tight monetary policy, weak consumer sentiment and global trade providing little support on the external side. Global trade growth in 2023 was the slowest outside global recessions in the past 50 years as the ending of the zero Covid-19 policy in China did not generate the hoped-for boost to exports. The high dependence of the German economy on the manufacturing sector and external demand kept its performance below average compared to the other Euro zone countries. Following a robust post-pandemic expansion in 2021 and 2022, GDP increased only by 0.5% in both the Euro area and the EU in 2023[2], with the energy-intensive industry sector suffering most from still elevated energy and feedstock prices and a weaker economy.

The Central and Eastern European (CEE) countries performed below expectations, mainly due to the recession in Germany. Although the share of exports to Germany declined over the last two decades, Germany remains the main trading partner of the region. In addition, in many of these countries, growth was driven by a decline in imports, primarily on account of the strong base effects resulting from the high level of imports seen the previous year, when energy concerns led to stockpiling. The energy situation has improved since last year, with reduced gas dependence and diversified sources.

The Hungarian economy mostly stagnated after the significant fall in H2 2022 and Q1 2023, resulting in a recession of -0.8% year-on-year in 2023. Both lower domestic demand due to high inflation and tighter fiscal and monetary policies and sluggish external demand contributed to the downturn. Overall, the fall in domestic demand has been partly counterbalanced by the positive impact of net exports as imports of goods and services dropped at a steeper pace than exports last year.

Oil and natural gas market developments

Despite a brief surge above 90 USD/bbl in September and mid-October, Dated Brent crude prices have traded in the relatively narrow 70-90 USD/bbl range in 2023, averaging at 82.6 USD/bbl, 18% below the 101.3 USD/bbl average in 2022. The remarkable stability of oil prices came at the time when global markets had to adjust to new trade dynamics, with crude oil from Russia sustaining its destinations outside the EU, several surprise OPEC+ supply cuts during the year and intensifying geopolitical tensions in the Middle East after the outbreak of the Israel-Hamas war and the year-end Houthi attacks on shipping vessels in the Red Sea. The oil market was able to remain cold because fears of a wider geopolitical conflict and physical disruptions to supply were dominated by demand concerns and higher than expected non-OPEC supply growth, led by the U.S. throughout the year. With GDP growth below trend in major economies, global oil demand outlook growth slowed accordingly, with Europe making up more than half the decline. The impact of tighter monetary policies and decreasing real incomes fed through to the real economy while petrochemical activity shifted increasingly to China, undermining growth elsewhere. Europe has been particularly hit amid the continent’s broad manufacturing and industrial recession.

[1] IMF (2024): World Economic Outlook, January update.

[2] Eurostat Flash Estimate (January 2024).

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Figure 1 Selected crude, natural gas and coal prices dtd (USD/MWh, 2021-2023, Bloomberg data)

The fall in European natural gas prices is even more striking, the average price of TTF (Title Transfer Facility), Europe’s largest gas trading hub, dropped from an average of 130.9 EUR/MWh in 2022 to 41.3 EUR/MWh in 2023 (-68%). Despite the continuous downward trend in 2023, European prices remained overly reactive to even small changes in supply availability during the year, suggesting that the market continued to be fragile even amid consistently comfortable storage filling rates, low industrial gas demand and warmer temperatures. In the absence of enough flexible new supply, the lost Russian pipeline volumes triggered a painful demand side adjustment in the short-term. European gas demand dropped by over 100 bcm in just two years, falling to its lowest level since 1995. Following a 13% (or 70 bcm) drop in 2022, gas consumption fell by another 7% (or 35 bcm) in 2023. All sectors contributed to these declines, although the drivers have markedly shifted from one year to the other. In contrast with 2022, the demand reduction in 2023 was largely driven by the power sector, as the rapid expansion of renewables, together with improving nuclear availability reduced the call on gas-fired power plants. In addition, mild winter weather together with gas-saving efforts continued to weigh on gas use in the residential and commercial sectors. Industry, which suffered the steepest decline in 2022, moved towards a gradual recovery in the second half of 2023, as lower price levels incentivised higher operating rates, including the more gas-intensive industrial sectors.

Downstream

Although refinery runs remained stronger than expected in 2023, total year runs for the last year averaged around the same level as in 2022 in Europe while global refinery throughputs finally returned to their pre-pandemic, 2019 levels, led by new Chinese and Middle East capacities. While not returning to the extreme highs of 2022, margins stayed steady, supported by resilient gasoline demand and elevated diesel crack spreads as OPEC+ supply cuts squeezed supplies of medium crude oil grades characterized by relatively higher middle distillate yields. The diesel shortage has been a worldwide phenomenon, with stocks well below the five-year average in most regions including the U.S., ARA ports in Europe, and Singapore. In Europe, the lost access to Russian medium crude and increased processing of lighter U.S. and North Sea grades might have limited crude distillation runs despite the strong margin environment.

European petrochemicals have been hit by the perfect storm of sustained production cost rise, collapsing demand and intensifying import pressure due to global overcapacity. In 2023, China completed more than 20 petrochemical projects, pushing its global share of petrochemical capacity up to 25%. The decrease in competitiveness of European assets has been exaggerated by the U.S. Inflation Reduction Act, which reduced operational expenses for U.S. players and attracted producers to relocate overseas despite the announcement of the Green Deal Industrial Plan to counter U.S. subsidies and prevent an exodus of industrial activity from Europe.

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Macro figures (average) | FY 2023 | FY 2022 | Ch %
Brent dated (USD/bbl) | 82.6 | 101.3 | (18)
Ural Blend (USD/bbl)(15) | 64.3 | 75.1 | (14)
Brent Ural spread (USD/bbl)(5) | (19.2) | (24.9) | (23)
TTF gas price (EUR/MWh) | 41.3 | 130.9 | (68)
Premium unleaded gasoline 10 ppm (USD/t)(11) | 856.4 | 1,004.6 | (15)
Gas oil – ULSD 10 ppm (USD/t)(11) | 828.9 | 1,054.7 | (21)
Naphtha (USD/t)(12) | 602.9 | 722.5 | (17)
Fuel oil 3.5 (USD/t)(12) | 427.4 | 457.2 | (6)
Crack spread – premium unleaded (USD/t)(11) | 231.2 | 238.1 | (3)
Crack spread – gas oil (USD/t)(11) | 203.7 | 288.3 | (29)
Crack spread – naphtha (USD/t)(12) | (22.3) | (44.0) | (49)
Crack spread – fuel oil 3.5 (USD/t)(12) | (197.7) | (309.3) | (36)
Crack spread – premium unleaded (USD/bbl)(11) | 20.2 | 19.3 | 5
Crack spread – gas oil (USD/bbl)(11) | 28.6 | 40.3 | (29)
Crack spread – naphtha (USD/bbl)(12) | (14.9) | (20.1) | (26)
Crack spread – fuel oil 3.5 (USD/bbl)(12) | (15.1) | (29.1) | (48)
MOL Group refinery margin UPDATED (USD/bbl) (10) | 9.0 | 8.4 | n.a.
Complex refinery margin (MOL + Slovnaft) UPDATED (USD/bbl) (10) | 9.3 | 8.9 | n.a.
Ethylene (EUR/t) | 1,205.8 | 1,412.7 | (15)
Butadiene-naphtha spread (EUR/t) | 291.8 | 567.7 | (49)
MOL Group petrochemicals margin (EUR/t)(9) | 285.8 | 480.9 | (41)
MOL Group Variable petrochemicals margin (EUR/t) | 143.5 | 242.4 | (41)
HUF/USD average | 353.3 | 373.1 | (5)
HUF/EUR average | 382.0 | 391.3 | (2)
3m USD LIBOR (%) | 5.01 | 1.64 | na
3m EURIBOR (%) | 3.43 | 0.35 | na
3m BUBOR (%) | 14.30 | 9.97 | na
Macro figures (closing) | FY 2023 | FY 2022 | Ch %
Brent dated closing (USD/bbl) | 77.6 | 81.3 | (5)
Urals blend closing (USD/bbl) | 63.8 | 48.5 | 31
HUF/USD closing | 346.4 | 375.7 | (8)
HUF/EUR closing | 382.8 | 400.3 | (4)
MOL share price closing (HUF) | 2,826 | 2,602 | 9

Notes and special items are listed in Appendix I and II.
Historical macro figures are available in the annual Data Library on the company’s website.

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2. INTEGRATED CORPORATE RISK MANAGEMENT

As an operator in a high-risk industry MOL Group is committed to manage and maintain its risks within acceptable limits.

The aim of MOL Group Risk Management is to keep the risks of the business within acceptable levels and safeguard the resilience of its operations as well as the sustainable management of the company. For this purpose, as an integral part of our corporate governance structure, MOL Group has developed a comprehensive Enterprise Risk Management (ERM) system which focuses on the organisation’s value creation process, meaning factors critical to the success and threats related to the achievement of objectives but also occurrence of risk events causing potential impact to people, assets, environment or reputation. Within the ERM framework all significant risks throughout the whole Group are identified, assessed, evaluated, treated and monitored, covering all business and functional units, geographies as well as projects, taking into consideration multiple time horizons.

Regular risk reporting to top management bodies, including the Board of Directors with its committees provides oversight on overall the risk profile and the largest risks as well as assurance that updated responses, controls, and appropriate mitigation actions are set and followed.

The Group faces financial, operational and strategic risks, including but not limited to the below.

Risks/processes | Risk description | Risk mitigation methods
Market and financial risks
Commodity price risk | The Group is exposed to commodity price risk on both the purchasing side and the sales side. The main commodity risks stem from its long positions in crude oil, refinery margin and petrochemical margin. | · Integrated business model · Continuous monitoring · When necessary, commodity hedging instruments to mitigate other than ‘business as usual’ risks or general market price volatility
Foreign exchange (FX) risk | The Group has FX exposure due to mismatch of currency composition of cash inflows and outflows, investments, debts. | · Monitoring FX risk and balancing the FX exposures of the operating & investment cash flow with the financing cash flow exposures when necessary and optimal
Interest rate (IR) risk | MOL Group has a mixture of floating and fixed interest rate debts. Floating rate debt are subject to interest rate changes. | · Continuous monitoring · Adequate mix of funding portfolio · When necessary, interest rate swap hedging instruments to mitigate risks
Credit risk | MOL Group provides products and services with deferred payment terms to eligible customers which exposes it to credit risk. | · Diversified customer portfolio · Customer evaluation model, continuous monitoring · Group-wide credit insurance program
Financing/Refinancing risk | MOL Group has significant debt outstanding. Inability to refinance those or inability to draw down funds could cause liquidity problems. | · Diversified funding sources/instruments · Diversified, balanced, and decently long maturity profile · Investment grade rating (BBB-) supports smooth capital markets access
Operational Risks
Physical asset and process safety and equipment breakdown risk | Process Safety Event (Major Industrial accident) due to loss of mechanical integrity, technical, technological or operational issues, process maintenance difficulties, lack of competent human resources. | · Comprehensive HSE activities, a group-wide Process Safety Management system including asset related operational risk management process · Preventive & Predictive maintenance (Uptime program) with thorough equipment criticality assessment behind · Group-wide insurance management program
Crude oil and gas supply risk | Crude supply disruption (insufficient quantity or quality) can disrupt refineries and petchem sites continuous operation. | · Crude oil-supply diversification strategy implemented; · Emergency reserves available

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Critical material, equipment or service supply risk | Disruption in critical (raw) materials and/or equipment and/or services may cause delays in operation and/or increase costs | · Stock management · Supplier management · Sourcing and supply chain diversification
Exploration & Production reserve replacement | Higher than expected decline and failure to replace reserves. | · Production optimization programs and organic reserve replacement activities are both focus areas of Exploration & Production operations
Cyber risk | Global trends showing steadily growing frequency and intensity of Cyber-attacks / incidents. AI is a new global threat which is widely used by attackers as well as more specified Cyber Crime Groups targeting Industrial Control System’s weaknesses, which may have increasing economic impact and relevance on MOL Group. Ukraine War significantly reduce Russian and Ukraine hacker group activities as they focus on war, significant investment on attacking methods by all stakeholders, furthermore these grown capabilities could lead to huge impact on the future. | · Continuous improvement of cyber security capabilities · Continuous supervision of cyber security risks (Group and opco level) ensuring the protection of the confidentiality, integrity and availability of data · Cyber security is built into all the MOL Group products and services · Continuous education of employees and partners.
Fraud Risk | Fraudulent activities (external & internal fraud) may cause significant financial and reputational losses | · Control functions on local and group level · Anti-Fraud Awareness (Newsletter, Mandatory trainings) · Anti-Fraud & Investigation procedures, dedicated Team
Pandemic Risk | Pandemics may significantly adversely affect the Group’s business environment, including price and demand on the Group’s products and services, availability of contractors, subcontractors as well as raw materials, creditworthiness of credit customers, availability of the Group’s key personnel. | · Crisis Management plans in place · Our Group Pandemic Preparedness Framework methodology instruction was issued in January 2023, summarizing not only the WHO general approach but entire MOL Group internal experiences of last 2-3 years, ensuring a life-proof and working framework to manage any possible further endemic/ pandemic situations. · Continued and sustainable practices defined, adjusted to country local measures and company internal circumstances
Strategic risks
Regulatory and sanctions risk | MOL has significant exposure to a wide range of laws, regulations and policies on the global, the European and the individual country level, that may change significantly over time and may even require the Group to adjust its core business operation. | · Continuous monitoring of new regulations and sanctions · Strengthened compliance process · Participation in legislative processes, consultations · Adopting MOL strategy in response to changes
Country risk | The international presence of MOL Group contributes to diversification but also exposure to country specific risk at the same time. Government actions may be affected by the elevated risk of economic and, in some regions, (geo)political crisis, increasing their impact on MOL’s operations. | · Continuous monitoring of the (geo)political risk, compliance with local regulations and international sanctions · Investment opportunities are valuated with quantifying of country risk in discount rate
Reputation risk | MOL, as a major market player and employer in the region with a sizeable operational footprint, operates under special attention from a considerable number of external stakeholders. | · Stakeholder governance processes introduced to monitor and adjust to any reputational risks
Climate change risk | Transition and physical risks associated with climate change have the potential to negatively impact MOL’s current and future revenue streams, expenditures, assets and financing. | · MOL Group’s transformational strategy · Several operational steps taken to mitigate physical risks emanating from climate change (see TCFD disclosure)
Capex Project Execution Risk | Projects are delayed or less profitable than expected or unsuccessful for numerous reasons, including cost overruns, higher raw material or energy prices, longer lead time in equipment deliveries, limited availability of contractors and execution difficulties. | · Disciplined stage gate process across Capex project pipeline · Dedicated team to identify risks at earlier stages, plan for mitigation or avoidance by linking potential risks with schedule and budget to build realistic estimates and following it up through the project lifecycle · Supplier selection criteria, audits

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Human Capital Risk | The Group's ability to implement its 2030+ Strategy is dependent on the capabilities and performance of its people, management, experts and technical personnel. Unavailability of skilled workforce may lead to disruptions in the operation. | · HR framework to attract, develop, reward and retain employees · Capability development for all employee levels to ensure future-proof skillset · Intergenerational collaboration to enhance internal knowledge transfer · Focus on digital transformation, and employee experience · Developing innovative and collaborative culture · Working environment and conditions framework in order to attract and retain diverse talents

ESG risks are covered and considered as part of the following topics (including but not limited to): Climate Change, Human Capital, Physical asset and process safety and equipment breakdown risk, Cyber Risk, Fraud Risk, Pandemic Risk, Regulatory and sanctions risk.

Risk Review Process in 2023

Risk owners in the Group identified, analysed and evaluated their major risks during 2023 – both on medium-term and long-term time horizon - and defined and/or updated the relevant mitigation plans where it has been necessary. Risk reports have been discussed by the Finance and Risk Management Committee of the Board of Directors and the Audit Committee.

Due to continued geopolitical tension in 2023, the Group still considers related risks, such as sanctions, regulatory as well as supply-related risks, elevated and implements mitigation measures.

Supply-related risks: The Group has elaborated the crude diversification strategy; alternative crude slate was defined, relevant capex projects defined and started. Supply chain difficulties have been addressed, mitigated by stock, supply chain and supplier management actions.

Regulatory and sanctions risks: MOL Group has been continuously and closely monitoring the sanctions, countersanctions and strengthened the compliance processes. In several countries where the Group operates, various forms of government interventions in energy markets took place (margin caps, new taxes, government takes), which had material financial impact on the Group.

Main risk management tools

As described above, as a general risk management framework, we operate an Enterprise Risk Management system.

Hedging Policy: to ensure the profitability and the financial stability of the Group, financial risk management is in place to handle short-term, market related risks. Commodity price risks are measured regularly by using a complex model based on advanced statistical methods and are managed – if and when necessary - with hedging measures.

Insurance Policy: transferring the financial consequences of our operational risks is done by insurance management, which represents an important risk mitigation tool to cover the most relevant exposures and liabilities arising out of our operations. Insurance is managed through a joint program for the whole Group to exploit considerable synergy effects.

Crisis and Business Continuity Management: following best industry practice and focusing on low probability high potential risks that could disrupt our operations, value chain and cash generation, MOL Group has implemented and is currently working to integrate a crisis management and business continuity program in order to reduce recovery times within tolerable limits for processes critical to our business.

TCFD disclosure on Risk Management

Climate change related risks are covered within the ERM framework, both in the long-term and mid-term risk review process.

Top-down approach is taken to identify and assess risks affecting the long-term strategy of the Group. Climate change risk, including transition and physical risks are assessed, together with mitigation plans within the strategic risk review process. Oversight of management of such risks sits with executive leadership, while operative leaders directly reporting to executive leadership are nominated as risk owners, who are responsible for assessment, mitigation of these risks. Strategic risk reports are discussed by the Finance and Risk Management Committee of the Board of Directors.

Within the bottom-up mid-term risk process several climate change related individual risks (regulatory changes, demand for fossil fuels, legal risks, risks on physical assets) are and may be identified and reviewed regularly. Various organizational levels and geographies are involved in the process, with the aim of covering all material risks, including climate related ones. Operative managers are nominated as risk owners, being responsible for assessing and mitigating the relevant risks. Aggregated, consolidated risk report is discussed by the Finance and Risk Management Committee of the Board of Directors.

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Risk owners, with the involvement of subject matter experts, assess risks taking into consideration the probability of occurrence and the potential impact on the Group’s objectives. Depending on the level of risk acceptable for the Group, risk owners define appropriate mitigation plans.

MOL Group’s ESG risk management activity is evaluated by several ESG ratings (including MSCI, CDP, Sustainalytics, Ecovadis) which proves the high performance based on industry benchmarks.

Climate-related aspects are part of corporate processes: MOL Group measures the carbon footprint of its products, as well as ESG indicators are part of the management remuneration scheme (e.g. TRIR, Sustainable GHG emission reduction, and other relevant strategic objectives). The GHG emission estimates are essential part of project planning and approval documents. In parallel, a monitoring system has been operated to register and forecast project-related GHG emissions.

Identified climate change related risks

• Identified transition risks include a) policy and legal risks (actions that attempt to constrain activities that contribute to climate change and/or actions that encourage adaption/limitation of climate change, including stricter emission rules and carbon pricing), b) technological risks (innovation that supports transition to a low carbon world, including increasing efficiency and lower consumption in transportation), c) market risks (shift in supply/demand for certain products and services due to changes in customer preferences: decline in demand for the fossil fuel, and technology), and d) reputational risks (stakeholder pressure). MOL Group’s long-term strategy seeks not only to mitigate risks associated with the transition to a low carbon economy, but to capitalize on opportunities created by it.

• Identified physical risks include a combination of both acute risks (extreme rainfall and flooding), as well as chronic risks (extreme heat, fluctuating water levels and drought). If any of these events were to occur, they could have an adverse effect on the Group’s assets, operations and staff. MOL Group has incurred and is likely to continue incurring additional costs to protect its assets, operations and staff from physical risks. To the extent such severe weather events or other climate conditions increase in either frequency, severity or both, MOL Group may be required to adjust its operations and incur costs that could adversely affect its financial position.

MOL Group operates Risk Engineering program, where the potential impacts of water related events analysed in main Downstream sites. Below is presented a high level overview of water related risks.

Physical risk | Risk description | Risk mitigation
Flood Risk & Sea Level Rise | Major Downstream sites are located near to rivers, sea. Flood risk level is considered as low, as the sites’ parameters/design provides enough mitigation capacities (which is supported by risk engineering reports): insurance cover is in place.
Danube Refinery | The refinery site borders the River Danube, and the site is far above the sea level. | The site process is far above the river level, and the site is located outside of a river flood hazard area.
MOL Petrochemicals Tiszaújváros | The site is located about 1 km west of the Tisza River, and the site is far above sea level. | Control measures in place that would allow for the sacrificial flooding of nearby agricultural land to manage this risk.
Bratislava Refinery | The site’s western perimeter is approximately 0.8 km from the River Danube, and the site is far above the sea level. | No event so far (in 2022 flood, site was 1 m above highest water level). Gates in industrial water inflow/outflow canal, emergency & Crisis management plans, possibility of employing mobile flood defences.
Rijeka Refinery | The site is located on the Adriatic Sea, with the minimum elevation being 4 m above mean sea level. | There are no rivers or creeks in the area.
Fluctuating water level, drought risk | In case of drought event low level of Duna/Tisza rivers may hinder barge transport. Very low level of Danube/Tisza may lead to lack of industrial water supply from the river. | Railroad transportation can be applied as an alternative transport. Monitoring, review of the system’s capability, investment plan to recycle the waste water
Extreme rainfall | Water collecting pits may overflow in extreme rainfalls which may lead to contamination of receiving water body. | Site reviews and mitigation actions (e.g. channel connection supervision, regular cleaning of collecting chambers) are in progress.
Earthquake | Certain assets of the Group are located on earthquake area. | Crisis plans and insurance cover are in place.

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Extreme windstorm | Heavy windstorm can lead to property damage, electricity supply disruption. | Crisis plan in place, island-mode power supply to be implemented
Forest fire | Forest fires close to service stations may lead to property damage, injury | Regular mandatory drills, availability of local or own firefighting brigade
Extreme drought | Extreme drought may result in vegetation fire near to flares | Mandatory fire safety training, extinguishing drills, fire simulation drills

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3. FINANCIAL AND OPERATIONAL OVERVIEW OF 202 3

| HUF billion | USD million
Summary of results | FY 2023 | FY 2022 | Ch % | FY 2023 | FY 2022 | Ch %
Net sales | 8,908.5 | 9,868.2 | (10) | 25,217 | 26,331 | (4)
EBITDA | 1,149.3 | 1,734.6 | (34) | 3,235 | 4,600 | (30)
EBITDA excl. special items(1) | 1,123.7 | 1,734.6 | (35) | 3,162 | 4,600 | (31)
Clean CCS-based EBITDA (1) (2) | 1,098.4 | 1,774.0 | (38) | 3,093 | 4,702 | (34)
Profit from operation | 677.6 | 1,259.1 | (46) | 1,898 | 3,337 | (43)
Profit from operation excl. special items(1) | 722.8 | 1,253.1 | (42) | 2,026 | 3,307 | (39)
Clean CCS-based operating profit (1) (2) | 697.5 | 1,292.4 | (46) | 1,957 | 3,410 | (43)
Net financial gain / (expenses) | 12.5 | (74.3) | n.a. | 36 | (206) | n.a.
Net profit attributable to equity holders of the parent | 530.4 | 628.3 | (16) | 1,484 | 1,662 | (11)
Operating cash flow before change in working capital | 667.3 | 1,871.1 | (64) | 1,842 | 5,005 | (63)
Operating cash flow | 754.0 | 1,388.7 | (46) | 2,138 | 3,557 | (40)
EARNINGS PER SHARE |  |  |  |  |  |
Basic EPS, HUF | 715.0 | 851.0 | (16) | 2.0 | 2.3 | (11)
Basic EPS excl. special items, HUF (1) | 786.7 | 824.0 | (5) | 2.2 | 2.2 | 2
INDEBTEDNESS |  |  |  |  |  |
Simplified Net debt/EBITDA | 0.59 | 0.30 | - | 0.59 | 0.30 | -
Net gearing(4) | 14% | 11% | - | 14% | 11% | -

KEY FINANCIAL DATA BY BUSINESS SEGMENTS |  |  |  |  |  |
| HUF billion | USD million
Net Sales (HUF mn) (3) (6) | FY 2023 | FY 2022 | Ch % | FY 2023 | FY 2022 | Ch %
Upstream | 723.9 | 1,231.1 | (41) | 2,043 | 3,272 | (38)
Downstream | 7,210.7 | 9,066.2 | (20) | 20,410 | 24,189 | (16)
Gas Midstream | 141.5 | 214.4 | (34) | 400 | 577 | (31)
Consumer Services (13) | 3,634.8 | 3,255.3 | 12 | 10,295 | 8,657 | 19
Corporate and other | 508.9 | 306.3 | 66 | 1,441 | 810 | 78
Total Net Sales | 12,219.8 | 14,073.2 | (13) | 34,589 | 37,505 | (8)
Intersegment transfers(7) | (3,311.3) | (4,205.1) | (21) | (9,372) | (11,174) | (16)
Total external net sales from cont.op. | 8,908.5 | 9,868.2 | (10) | 25,217 | 26,331 | (4)
Total external net sales from discont.op. | - | 119.0 | (100) | - | 323 | (100)
Total External Net Sales(6) | 8,908.5 | 9,987.1 | (11) | 25,217 | 26,654 | (5)
EBITDA | FY 2023 | FY 2022 restated | Ch % | FY 2023 | FY 2022 restated | Ch %
Upstream | 365.5 | 827.5 | (56) | 1,026 | 2,212 | (54)
Downstream | 490.2 | 804.8 | (39) | 1,375 | 2,127 | (35)
Gas Midstream | 93.8 | 61.0 | 54 | 265 | 163 | 63
Consumer Services (13) | 244.8 | 121.2 | 102 | 695 | 320 | 117
Corporate and other | (60.0) | (66.4) | (10) | (172) | (181) | (5)
Intersegment transfers(7) | 15.0 | (13.6) | n.a. | 46 | (41) | n.a.
TOTAL EBITDA from cont.op. | 1,149.3 | 1,734.6 | (34) | 3,235 | 4,600 | (30)
Total EBITDA from discont.op. | (2.5) | 193.6 | n.a. | (8) | 513 | n.a.
Total EBITDA | 1,146.8 | 1,928.3 | (41) | 3,227 | 5,113 | (37)

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| HUF billion | USD million
Depreciation | FY 2023 | FY 2022 | Ch % | FY 2023 | FY 2022 | Ch %
Upstream | 126.8 | 213.6 | (41) | 358 | 558 | (36)
Downstream | 161.1 | 168.7 | (5) | 457 | 454 | 1
Gas Midstream | 17.4 | 16.7 | 4 | 49 | 45 | 9
Consumer Services | 122.8 | 44.7 | 175 | 349 | 119 | 193
Corporate and other | 44.5 | 33.3 | 34 | 126 | 90 | 40
Intersegment transfers(7) | (1.0) | (1.5) | (36) | (2) | (3) | (33)
Total depreciation from cont.op. | 471.7 | 475.5 | (1) | 1,337 | 1,263 | 6
Total depreciation from discont.op. | - | (17.3) | (100) | - | (50) | (100)
Total Depreciation | 471.7 | 458.2 | 3 | 1,337 | 1,213 | 10
Operating Profit | FY 2023 | FY 2022 | Ch % | FY 2023 | FY 2022 | Ch %
Upstream | 238.7 | 613.9 | (61) | 667 | 1,654 | (60)
Downstream | 329.1 | 636.1 | (48) | 919 | 1,673 | (45)
Gas Midstream | 76.4 | 44.3 | 72 | 216 | 118 | 83
Consumer Services (13) | 122.0 | 76.6 | 59 | 346 | 201 | 72
Corporate and other | (104.5) | (99.7) | 5 | (298) | (271) | 10
Intersegment transfers(7) | 15.9 | (12.1) | n.a. | 48 | (38) | n.a.
Total operating profit cont.op. | 677.6 | 1,259.1 | (46) | 1,898 | 3,337 | (43)
Total operating profit discont.op. | (2.5) | 210.9 | n.a. | (8) | 563 | n.a.
Total Operating Profit | 675.1 | 1,470.0 | (54) | 1,890 | 3,900 | (52)
EBITDA Excluding Special Items(1) | FY 2023 | FY 2022 | Ch % | FY 2023 | FY 2022 | Ch %
Upstream | 339.9 | 827.5 | (59) | 953 | 2,212 | (57)
Downstream | 490.2 | 804.8 | (39) | 1,375 | 2,127 | (35)
Downstream - clean CCS-based(2) | 472.4 | 848.4 | (44) | 1,328 | 2,240 | (41)
Gas Midstream | 93.8 | 61.0 | 54 | 265 | 163 | 63
Consumer Services (13) | 244.8 | 121.2 | 102 | 695 | 320 | 117
Corporate and other | (60.0) | (66.4) | (10) | (172) | (181) | (5)
Corporate and other – clean CCS-based(2) | (67.4) | (70.6) | (5) | (193) | (193) | 0
Intersegment transfers(7) | 15.0 | (13.6) | n.a. | 46 | (41) | n.a.
Total - clean CCS-based(2) | 1,098.4 | 1,774.0 | (38) | 3,093 | 4,702 | (34)
Total EBITDA excluding special items cont.op. | 1,123.7 | 1,734.6 | (35) | 3,162 | 4,600 | (31)
TOTAL EBITDA excluding special items discont.op. | (2.5) | 193.6 | n.a. | (8) | 513 | n.a.
Total EBITDA Excluding Special Items | 1,121.2 | 1,928.3 | (42) | 3,154 | 5,113 | (38)

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| HUF billion | USD million
Operating Profit Excluding Special Items | FY 2023 | FY 2022 | Ch % | FY 2023 | FY 2022 | Ch %
Upstream | 216.8 | 598.6 | (64) | 605 | 1,600 | (62)
Downstream | 329.1 | 645.3 | (49) | 919 | 1,697 | (46)
Gas Midstream | 76.4 | 44.3 | 72 | 216 | 118 | 83
Consumer Services | 183.3 | 76.6 | 139 | 521 | 201 | 159
Corporate and other | (98.6) | (99.7) | (1) | (282) | (271) | 4
Intersegment transfers(7) | 15.9 | (12.1) | n.a. | 47 | (38) | n.a.
Total operating profit excluding special items cont.op. | 722.8 | 1,253.1 | (42) | 2,026 | 3,307 | (39)
Total operating profit excluding special items discont.op. | (2.5) | 210.9 | n.a. | (8) | 563 | n.a.
Total Operating Profit Excluding Special Items | 720.3 | 1,464.0 | (51) | 2,018 | 3,870 | (48)
Capital Expenditures | FY 2023 | FY 2022 | Ch % | FY 2023 | FY 2022 | Ch %
Upstream | 129.6 | 141.0 | (8) | 367 | 375 | (2)
Downstream | 223.0 | 268.8 | (17) | 634 | 720 | (12)
Gas Midstream | 12.4 | 11.6 | 7 | 35 | 30 | 18
Consumer Services | 181.3 | 250.5 | (28) | 525 | 654 | (20)
Corporate and other | 75.4 | 89.0 | (15) | 215 | 237 | (9)
Intersegment transfers(7) | (3.0) | (1.7) | 76 | (9) | (5) | 89
Total | 618.7 | 759.2 | (19) | 1,767 | 2,012 | (12)

Notes and special items are listed in Appendix I and II.

3.1 KEY ACHIEVEMENTS AND SUMMARY OF 2023 RESULTS

In 2023, MOL reached Clean CCS EBITDA of HUF 1,098.4bn (USD 3,093mn), 38% lower in HUF terms than in the previous year and significantly exceeding the original capital market guidance of around USD 2.5bn. Operating cash flow was burdened by income tax payments amounting to HUF 455.5bn (USD 1,306mn), partly offset by working capital release of HUF 86.7bn (USD 296mn); accordingly operating cash flow generation after working capital arrived at HUF 754.0bn (USD 2,138mn) in 2023. Government interventions such as fuel price regulations and windfall taxation across the CEE burdened results by ca. USD 1bn on EBITDA level in 2023.

Key Financial Highlights

• Upstream segment’s EBITDA, excluding special items, reached HUF 339.9bn (USD 953mn) in 2023, representing a 59% decrease compared to 2022 on the back of normalising oil and gas prices.

• In 2023, Downstream generated HUF 472.4bn (USD 1,328mn) Clean CCS EBITDA, which is 44% below the previous year’s performance. The lower result was attributable to the narrowing of the Brent-Ural spread, the significant decrease in petrochemical margins, and the higher incidence of extra government takes in Hungary such as the Brent-Ural tax and the revenue-based extra tax.

• Consumer Services EBITDA increased by 102% in 2023, reaching HUF 244.8bn (USD 695mn) as the fuel station networks in Poland and Slovenia were integrated in 2023, non-fuel margins continued increasing organically, and 2022 fuel price regulations were discontinued in 2023 in various CEE countries.

• Gas Midstream reached HUF 93.8bn (USD 265mn) EBITDA in 2023, representing an increase of 54% compared to 2022, driven by rising cross-border capacity demand and changes of regulated tariffs evolved favourable as well mostly in line with rising costs.

• Total CAPEX spending reached HUF 618.7bn (USD 1,767mn), indicating a decrease of 19% year-on-year, reflecting mainly less acquisitions completed in 2023 than in 2022. Looking at organic CAPEX, the 2023 figure came in 7% lower than in 2022, mainly due to the Company’s cautious approach in an uncertain environment.

• Operating Cash Flow before Working Capital decreased by 64% year-on-year to HUF 667.3bn (USD 1,842mn), whilst a considerable working capital release drove operating cash flow generation to HUF 754.0bn (USD 2,138mn) in 2023.

• Indebtedness on a Net Debt/EBITDA basis rose to 0.59x from 0.30x, since operational cash flow generation could not fully cover organic and inorganic CAPEX spending, as well as the income taxes paid and also the record high dividend distributed in 2023.

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Key Operational Highlights

• Annual oil and gas production reached 90.4 mboepd in 2023, meeting the annual guidance of ~90 mboepd. First gas was announced in December 2023 in Kazakhstan, expected to be adding to the Group’s production significantly in 2024.

• The Consumer Services network grew to 2,421 stations mainly through the completion of the acquisition in Slovenia. The expansion of its non-fuel concept also continued, with a total 1,253 Fresh corners in place by year-end 2023.

• MOL steps up in the circular economy concept:

o MOL acquired the largest biogas plant in Hungary in May

o MOL’s waste management concession commenced in July

o Geothermal licenses won in Hungary and Croatia

• ESG achievements:

o MSCI confirmed MOL’s AA rating for the sixth year in a row.

o MOL maintained its B rating of the CDP climate management survey.

• Key group financial and operational figures and historical financial statements are available in the annual Data Library on the company’s website.

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3.2. CORPORATE STRATEGY

Amidst evolving regulatory landscapes and shifting consumer and industrial preferences, MOL Group formulated its 15-year strategy in 2016, centred on a gradual transition towards meeting the demands of a low-carbon economy. While reaffirming the fundamental principles of its strategic evolution set out in 2016, MOL Group introduced a more ambitious array of transformational initiatives in its revised "2030+ Shape Tomorrow" strategy in 2021.

After the end to COVID, and a year of upheaval in the oil and gas industry in 2022, 2023 showed normalization both globally and in the Central Eastern European region. At the same time, increased geopolitical tension and the regulatory push to accelerate the green transition have been shaping the year’s performance and the outlook. To adapt to the developments of the external environment, MOL decided it would be the right time to review its strategy, which was published in March 2024.

Shape Tomorrow strategy

In its updated Shape Tomorrow strategy, MOL’s climate neutrality commitment remains unabated. Learning from the challenges posed by the COVID-19 pandemic and geopolitical crises, MOL specified a more precise transition path until 2030, ambitioning eventually net climate neutrality by 2050. The transition path builds on the above-average growth trajectory expected in CEE economies and MOL’s ambition to retain or increase its presence in this area in its traditional wholesale and retail markets. This resilient growth model is foreseen to be maintained over the strategic horizon to 2030 and is the main engine to fund the transition.

Perhaps the most closely watched transition indicator for the sector is the path of emission reduction. By 2023, MOL has been able to reduce its Scope 1 & 2 CO2 emissions by 10% since 2019 on a like-for-like basis, in line with the transition path set out in its earlier strategy setting out a like-for-like emission reduction of 30% between 2019 and 2030. Emissions reduction targets have also evolved, with a more ambitious aim to achieve 25% less emissions in 2030 compared to the base year of 2019 for Scope 1 & 2 emissions on absolute terms. The 25% emission reduction target, set out in line with EU reporting regulations on an absolute basis, is a more ambitious transition goal as it translates to a 33% reduction target on a like-for-like basis, above the 30% set out in the 2021 strategy. The updated strategy also indicates expectations with regards to Scope 3 emissions for the first time, which is foreseen to indicate 5-10% decrease between 2019-2030 on absolute terms, depending primarily on the development of the regional fossil fuel demand.

MOL also set out a new path with regards to investments needed to achieve its green transition ambitions: between 2025-2030, ca. 30-40% of MOL’s CAPEX budget will be allocated to low-carbon initiatives. However, MOL remains conservative with regards to its CAPEX budget and expects that organic investments will amount to USD 1.9 bn on average in 2025-2030 in real terms, a notch higher than the USD 1.8 bn average in 2018-2023.

The revised Shape Tomorrow strategy enables MOL to maintain a conservative approach to indebtedness while offering competitive returns to shareholders. The commitment to prudent financial management is to be upheld, providing ample financial headroom for the Company to execute its strategic goals.

Segments contribution to the strategy

Recognizing the shift away from traditional fossil fuels, the Downstream segment has been deeply involved in transition since 2016. Downstream’s focus areas are expanding with circularity and sustainable solutions, including petchemization, biofuel, green hydrogen and biogas. Additionally, the commitment was reiterated to diversifying the crude mix to enhance energy security.

Downstream will be the segment most affected by the Group’s higher reliance on renewable energy sources, with the Group’s consumption aimed at ca. 2,500 GWh by 2030. MOL will be selective with regards to how much of this consumption will be generated in-house or bought from the market, depending on long-run return profiles and synergies to be exploited.

MOL’s entry into the waste management business in 2023 aims at no less than transforming waste collection and utilization in Hungary, and aligns with EU guidelines and supports the circular economy concept. In 2023, MOL already took a large step towards attaining these goals by preparing to introduce the Deposit Refund System, which commences in two waves in 2024. By 2030, MOL’s waste management arm aims to provide 1.5 million tons of waste-based feedstock to the Hungarian industry, including MOL’s downstream business.

The Consumer Services segment continues its transformation into a digitally driven consumer retailer and integrated mobility provider. The aim is to introduce multi-purpose service stations, shift towards customer-driven operations, and become a leading mobility provider in the region. With the EBITDA target of 700 mn USD for 2025 practically achieved already in 2023, the new ambition for the segment is reaching USD 1 billion EBITDA by 2030.

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The Upstream segment remains a key cash generator for the Group. Average daily production is expected north of 90 thousand barrels of oil equivalent, with unit direct production costs between 6-8 USD/boe by 2025-2030. The focus in the CEE region will be on production and infrastructure optimization and enhanced hydrocarbon recovery in order to keep production levels high and mitigate the supply security concerns in the region. Moreover, deploying low-carbon technologies such as geothermal, lithium extraction, methane emission reduction, and carbon capture, utilisation and storage will be also high on the agenda in the region over the strategic horizon. With regards to Upstream’s international portfolio, assets will continue to be managed actively, with return metrics and time-to-market expectations driving changes in the portfolio composition.

3.2.1 Use of scenarios

The Shape Tomorrow strategy update, published in March 2024, is based on a detailed analysis of the external environment, exploring the main trends and directions of general macroeconomic conditions, the oil and gas industry, and ancillary markets that have – or potentially have – a large impact on MOL’s operation. Based on the analyses of these markets, MOL prepares numeric forecasts of the key macroeconomic and industry-specific parameters. The forecasts are prepared for three scenarios: Slow Transition, Steady Transition & Net Zero Emission. The green energy transition is happening in all three scenarios, the biggest difference between them is the pace of the transition. The Shape Tomorrow Strategy is predominantly based on the Steady Transition scenario. If one of the other two scenarios would materialise, it would mostly affect the timing of the investments envisaged in the Shape Tomorrow Strategy and not the strategic directions themselves.

MOL operates a “Premises Committee” made up from representatives of the main business divisions and functional areas. The committee is tasked with monitoring the main indicators and assumptions used in the different scenarios and carrying out updates following changes to the external environment. This system can provide early notice that the external environment is moving to a different stage along the chosen scenario path, or potentially moving towards a different scenario altogether, providing senior management the opportunity to reassess and adjust its plans accordingly. Changes to the premises – partially or fully - automatically triggers a notification to the Executive Management and the Board of Directors, and as a result it may cause a modification of the strategy. Any changes to the strategy would need approval from the Board of Directors.

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3.3 UPSTREAM

Segment IFRS results (HUF bn) | FY 2023 | FY 2022 restated | Ch %
EBITDA | 365.5 | 827.5 | (56)
EBITDA excl. spec. items(1) | 339.9 | 827.5 | (59)
Operating profit/(loss) | 238.7 | 613.9 | (61)
Operating profit/(loss) excl. spec. items(1) | 216.8 | 598.6 | (64)
CAPEX and investments | 129.6 | 141.0 | (8)
o/w exploration CAPEX | 11.5 | 18.0 | (36)
Hydrocarbon Production (mboepd) | FY 2023 | FY 2022 restated | Ch %
Crude oil production | 38.1 | 40.0 | (5)
Hungary | 10.0 | 8.9 | 12
Croatia | 9.7 | 10.1 | (4)
Kurdistan Region of Iraq | 2.2 | 4.5 | (52)
Pakistan | 0.5 | 0.5 | 8
Azerbaijan | 13.9 | 13.9 | 0
Other International | 1.9 | 2.2 | (11)
Natural gas production | 37.7 | 37.9 | 0
Hungary | 21.3 | 20.4 | 4
Croatia | 11.9 | 12.9 | (7)
o/w. Croatia offshore | 3.4 | 3.4 | (2)
Pakistan | 4.5 | 4.6 | (3)
Condensate | 4.5 | 4.8 | (6)
Hungary | 2.7 | 2.8 | (2)
Croatia | 0.8 | 0.9 | (11)
Pakistan | 1.0 | 1.1 | (11)
Average hydrocarbon production of fully consolidated companies | 80.4 | 82.7 | (3)
Russia (Baitex) | 3.8 | 4.0 | (5)
Kurdistan Region of Iraq (Pearl Petroleum)* | 6.2 | 5.3 | 18
Average hydrocarbon production of joint ventures and associated companies | 10.0 | 9.3 | 8
Group level average hydrocarbon production | 90.4 | 92.0 | (2)
Main external macro factors | FY 2023 | FY 2022 | Ch %
Brent dated (USD/bbl) | 82.6 | 101.3 | (18)
HUF/USD average | 353.3 | 373.1 | (5)
TTF month ahead gas price (EUR/MWh) | 41.3 | 130.9 | (68)
Average realized hydrocarbon price | FY 2023 | FY 2022 | Ch %
Crude oil and condensate price (USD/bbl) | 76.8 | 94.2 | (19)
Average realized gas price (USD/boe) | 61.2 | 130.8 | (53)
Total hydrocarbon price (USD/boe) | 70.1 | 109.6 | (36)
Production cost | FY 2023 | FY 2022 | Ch %
Average unit OPEX of fully consolidated companies (USD/boe) | 6.6 | 5.5 | 20
Average unit OPEX of joint ventures and associated companies (USD/boe) | 2.3 | 2.2 | 6
Group level average unit OPEX (USD/boe) | 6.0 | 5.1 | 18

Capital Expenditures |  |  |  |  |  |  |
FY 2023 | Hungary | Croatia | Kurdistan Region of Iraq | Pakistan | Azerbaijan | Other | Total - FY 2023 | Total - FY 2022
HUF bn
Exploration | 8.4 | 4.1 | 0.0 | -1.3 | 0.2 | 0.1 | 11.5 | 18.0
Development | 20.1 | 15.9 | 4.2 | 0.4 | 49.0 | 5.1 | 94.8 | 107.7
Other | 6.1 | 12.9 | 2.2 | 0.3 | 1.3 | 0.0 | 22.9 | 15.3
Acquisition | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.4 | 0.4 | 0.0
Total - FY 2023 | 34.5 | 32.9 | 6.4 | -0.5 | 50.6 | 5.7 | 129.6 |
Total - FY 2022 | 24.6 | 35.4 | 10.0 | 6.4 | 57.9 | 6.7 |  | 141.0

Notes and special items are listed in Appendix I and II.
Tables regarding Hydrocarbon production (mboepd); Production cost (USD/boe); Average realised hydrocarbon price; Gross reserves (according to SPE rules): 1P – Proved reserve; 2P – Proved and Probable reserve; Costs incurred (HUF mn); Earnings (HUF mn); Exploration and development wells are available in the annual Data Library on the company’s website. * New methodology from 2020.

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3.3.1 Financial overview of 2023

Upstream EBITDA, excluding special items, decreased by 59% year-on-year in 2023 and amounted to HUF 339.9bn. The main reasons are lower average realized hydrocarbon prices (lower by 36%, amounting 70.1 USD/boe), higher production costs and the unfavourable royalty regime in Hungary.

Total group production (including JVs and associates) decreased by 2% compared to the previous year, resulting in an average 90.4 mboepd for the year. Lower production volume was mainly driven by lower volumes from Shaikan in Kurdistan, caused by the closure of the export pipeline, natural decline and planned turnaround in Croatia, while in Hungary natural decline was compensated and production overperformed during 2023.

Group-level average unit direct production cost, excluding DD&A but including JVs and associates, increased by 18% and reached 6.0 USD/boe in 2023, reflecting inflationary pressure and higher realized energy prices.

Upstream organic CAPEX without equity assets amounted to HUF 129.2bn in 2023, decreasing by 8% year-on-year. The lower amount is mainly driven by less exploration activities across our portfolio, the suspension of development projects in Kurdistan after the export pipeline closure, and a generally conscious approach amidst windfall regulatory environment. More than 90% of organic CAPEX was spent in the CEE region and Azerbaijan, mostly for development projects.

In 2023, Upstream continued to be a strong cash flow contributor of the MOL Group, with HUF 210.7bn (USD 587mn) simplified free cash flow generated.

Changes in the Upstream regulatory environment

Hungary: the Hungarian government introduced CO2 tax retroactively payable from 1 January 2023, which means that 40 EUR/t (changed later to 36 EUR/t) has to be paid after total CO2 emission by each company with significant free quota allocation. First payment liability was due on 15 November (for Q1-Q3), with an amount of HUF 443mn related to upstream.

Effective from 1 April 2023, the royalty rate of the gas sold at market price was decreased from 88% to 42% in Hungary, however an additional new revenue-based tax was also introduced for 2023, calculated at 2.8% of 2022 net revenue of MOL Plc. This was extended to 2024 with a reduced rate of 1%. The income tax of energy suppliers was raised from 31% to 41% for 2023 and was also extended to 2024. In parallel with these, mining contractors were exempted to pay potential penalties due to lower production levels in 2022 compared to 2021. Effective form 1 September 2023 a new option was introduced for mining contractors to reduce royalty payment with the commitment to exceed the production level of 2022. As MOL signed the contract with the government, the royalty liability decreased significantly from September.

Croatia: As previously reported from 2022 September, the Croatian government obliged INA to sell all of its domestically produced gas to HEP (national energy company) at a fixed price in order to secure gas supply to the domestic market. On 7 July 2023, the Croatian government revoked its decision and cancelled INA’s obligation to sell gas output.

Operational overview of 2023

Exploration

Total of 14 exploration or appraisal wells were drilled in 3 countries. Besides drilling, seismic acquisition campaigns and interpretation works progressed in Hungary, Pakistan and Romania.

In Hungary, the Shallow Gas exploration program continued with the successful drilling and testing of seven wells, and all wells were put into production. A conventional exploration well Rinyaújlak-D-1 was also drilled and drilling of Vecsés-1 appraisal well started in January 2024. Zala West and Bázakerettye license extensions have been granted. MOL acquired 49% interest in three exploration concessions, operated by O&GD. Two wells were drilled and tested, Tura-D-3 results are under evaluation, while Nagykáta-K-1 proved to be dry. In December, two geothermal exploration licenses were granted.

In Croatia, after the interpretation and analysis of seismic data acquired in 2022, three wells were drilled on Drava-03 block. Veliki Rastovac-1 well was drilled in June 2023 resulting in notice of commercial gas discovery to Croatian Hydrocarbon Agency. Obradovci-1 Jug and Mikleuš-1 wells were drilled back-to-back in August and September 2023, both as dry wells, and afterwards plugged and abandoned. Dinaridi-14 block was relinquished. In October, two geothermal exploration concessions were awarded.

In Romania, 3D seismic was acquired on the EX-1 block, while permitting for acquisition on the block EX-5 is in progress.

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In the Middle East, Asia and Africa region, exploration activities advanced in Pakistan and Egypt. In Pakistan, in operated TAL block Razgir-1 exploration well was spudded in January 2024. In operated Margala block, Tarnol-1 well was plugged and abandoned. Test Reprocessing of seismic data post-well evaluation is completed, while reprocessing of ~800 km of 2D seismic data is in progress. One-year extension of Margala’s exploration licence was granted, while requests for TAL, Karak, and DG Khan licence extensions have been submitted. In Egypt, East Bir El Nus (block WD-08), a new exploration concession in the Western Desert was awarded to INA and Energean, with a 50-50% participating interest split and Energean as the Operator. Concession Agreement was signed, while Join Operating Agreement signing is awaited. Contract for seismic acquisition was signed and preparation activities are in progress. In the East Damanhur concession, the third exploration well of the block, ED-3X was drilled with negative results, plugged and abandoned.

Field Development and Production

In 2023, Production optimization programs continued in Hungary and Croatia, which resulted in an annualized production uplift of 1.7 mboepd with a total of 84 well workovers performed. In Kazakhstan first gas from Rozhkovskoye field has been achieved.

In Hungary, field development activities continued as four wells were drilled. Sas-Ny-31 and Endrőd-É-20 are in production, tie-in of Endrőd-É-21 and completion of Forráskút-13 are in progress. Somogy Phase-3 project mechanical completion was achieved and gas production started in September. The production optimization program continued, resulting in a total of 26 well interventions completed, consequently adding to production approx. 1.2 mboepd increment on an annualized basis.

In Croatia, Zalata-Dravica location permits for pipelines have been issued and settlement of property legal relations on gas pipeline route is underway. Preparation of main design for construction works is finished. Tenders for procurement of construction works and LLI's have been launched. The Enhanced Oil Recovery (EOR) program continued with carbon dioxide injection on Ivanić and Žutica fields. Implementation of the Production Optimization project continued, and within its scope, a total of 58 well workovers were completed in 2023, contributing 0.5 mboepd additional production on an annualized basis. Turnaround (TA) was successfully executed on 2 production regions and 16 locations, including Gas Processing Facilities Molve and Fractionation Facilities Ivanić-Grad. Ivana D well was plugged and abandoned, gas pipeline was conserved and environmental impact study preparation is in progress.

In the CIS region, well workover program in Russia continued, with 27 well interventions completed. Within scope of the waterflooding program, injection wells have been converted to dump flood. Construction work program included pipelines construction and reconstruction, powerline reconstruction and partial modernization of oil treatment plant. In Kazakhstan, first gas from Rozhkovskoye field, U-21 well, has been achieved. EPCC Contract Addendum #2 was signed, and Phase 1 completion, with 4 additional wells bringing in production is expected in 2024. In Azerbaijan, a total of 16 wells were delivered within the 2023 drilling program, of which 8 are producers, 6 water injectors, 1 gas injector and 1 deep gas appraisal well. The Azeri Central East project continued its progress towards first oil, with Topside unit installation. Drilling of the first ACE well has commenced and first ACE production is expected to be delivered in the first quarter of 2024.

In Pakistan, Mamikhel South-01 well was put into production. Manzalai Secondary Compression project has been commissioned, while Makori East Secondary Compression Detailed engineering is in progress. Makori East-5 sidetrack drilling has been completed and well was put in production in January 2024. Makori Deep Reservoir Simulation study has been completed and Makori East Reservoir Simulation study initiated. By completing 8 production optimization jobs, an incremental production of 0.2 mboepd was realized, annualized and net to MOL.

In the Kurdistan Region of Iraq, drilling activities on Shaikan field continued in the first quarter, with the drilling of two wells, SH-17 and SH-18. In March, the closure of Iraq-Turkey pipeline led to the shut-in of the Shaikan field. Production for domestic sales was restarted in July, while imposed export restrictions are still in force. On Pearl, the Khor Mor gas plant expansion project, KM250, EPC activities are ongoing and all gas wells have been completed and tested. Well operations continued with the successful drilling and completion of wells KM-16, KM-17 and KM-18.

In Egypt, field development activities continued. On North Bahariya concession, total of 22 wells have been drilled, out of which 20 are producers and 2 water injectors, and 1 producer well on Ras Qattara. Regular maintenance activities and implementation of development projects advanced on all concessions. ED-2X exploration well, drilled as gas discovery in 2022, was put into production in September 2023. Accordingly, East Damanhur Development Lease was approved.

Discontinued operations: In Angola, divestment process of 4% interest in Block 3/05 and a 5.33% interest in Block 3/05A was completed.

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3.4 DOWNSTREAM

Segment IFRS results (HUF bn) | FY 2023 | FY 2022 | Ch %
EBITDA | 490.2 | 804.8 | (39)
EBITDA excl. spec. items(1) | 490.2 | 804.8 | (39)
Clean CCS-based EBITDA(1) (2) | 472.4 | 848.4 | (44)
o/w Petrochemicals(1) (2) | (55.2) | 66.5 | n.a.
Operating profit/(loss) reported | 329.1 | 636.1 | (48)
Operating profit/(loss) excl. spec. items(1) | 329.1 | 645.3 | (49)
Clean CCS-based operating profit/(loss)(1) (2) | 311.3 | 688.9 | (55)
CAPEX | 490.2 | 804.8 | (39)
o/w transformational | 68.7 | 117.7 | (42)
MOL Group without INA | FY 2023 | FY 2022 | Ch %
EBITDA excl. spec. items(1) | 492.2 | 811.4 | (39)
Clean CCS-based EBITDA(1) (2) | 385.6 | 831.7 | (54)
o/w Petrochemicals clean CCS-based EBITDA(1) (2) | -55.2 | 66.5 | (183)
Operating profit/(loss) excl. spec. items(1) | 356.3 | 679.7 | (48)
Clean CCS-based operating profit/(loss)(1) (2) | 340.2 | 695.4 | (51)
INA Group | FY 2023 | FY 2022 | Ch %
EBITDA excl. spec. items(1) | -2.0 | -6.6 | (70)
Clean CCS-based EBITDA(1) (2) | 86.7 | 16.7 | 418
Operating profit/(loss) excl. spec. items(1) | -27.2 | -34.4 | (21)
Clean CCS-based operating profit/(loss)(1) (2) | -28.9 | -6.5 | 344
Refinery margin | FY 2023 | FY 2022 restated | Ch %
MOL Group refinery margin UPDATED (USD/bbl) | 9.0 | 8.4 | 7
Complex refinery margin UPDATED (Mol+Slovnaft, USD/bbl) | 9.3 | 8.9 | 5
Updated MOL Group petrochemicals margin (EUR/t) (10) 2023 | 144 | 242 | (41)
NEW MOL Group petrochemicals margin (EUR/t) (9) 2022 | 286 | 481 | (41)
External refined product and petrochemical sales by country (kt) | FY 2023 | FY 2022 | Ch %
Hungary | 4,975 | 5,482 | (9)
Slovakia | 2,149 | 2,178 | (1)
Croatia | 2,454 | 2,292 | 7
Italy | 1,384 | 1,477 | (6)
Other markets | 7,996 | 7,483 | 7
Total | 18,959 | 18,912 | 0
External refined and petrochemical product sales by product (kt) | FY 2023 | FY 2022 | Ch %
Total refined products | 17,759 | 17,693 | 0
o/w Motor gasoline | 3,495 | 3,569 | (2)
o/w Diesel | 10,677 | 10,578 | 1
o/w Fuel oil | 289 | 291 | (1)
o/w Bitumen | 566 | 532 | 6
Total petrochemicals products | 1,200 | 1,219 | (2)
o/w Olefin products | 157 | 156 | 1
o/w Polymer products | 978 | 994 | (2)
o/w Butadiene products | 65 | 69 | (6)
Total refined and petrochemicals products | 18,959 | 18,912 | 0

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CAPEX (in HUF bn) | FY 2023 | FY 2022 | YoY Ch % | Main projects FY 2023
R&M CAPEX and investments | 130.3 | 155.2 | (16) | INA: Rijeka Refinery Upgrade Project, Metathesis Project (Olefin conversion); SN: Periodical mainten. IAS16 SN REF
Petrochemicals CAPEX | 85.0 | 110.3 | (23) | MPC: Metathesis Project (Olefin Conversion), Polyol Project; SPC: PP3 unit revamp (growth part)
Power and other | 3.1 | 3.2 | (5) | SN: en. IAS16 SN ENE
Total | 218.3 | 268.8 | (19) |

Change in regional motor fuel demand | Market | MOL Group sales
FY 2023 vs. FY 2022 in % | Gasoline | Diesel | Motor fuels | Gasoline | Diesel | Motor fuels
Hungary | (3) | (6) | (5) | (7) | (13) | (11)
Slovakia | 10 | (0) | 2 | 1 | (3) | (2)
Croatia | 13 | 15 | 15 | 12 | 15 | 14
Other | (6) | (14) | (12) | (6) | 4 | 1
CEE 10 countries | (5) | (12) | (10) | (3) | (2) | (2)

3.4.1 FINANCIAL OVERVIEW OF 2023

In 2023 Downstream achieved a Clean CCS EBITDA of HUF 472.4 billion (USD 1,328 million), which is 44% lower than the previous year’s performance. The base effect contributed significantly to the year-on-year decrease, as the abolition of price cap regulation was compensated by higher extra taxes. The macro environment had a negative impact on Refining and Marketing (R&M) results, partly offset by a higher sales margin and lower energy costs. Due to the continuing downward trend in the industry, the Petchem segment contributed negatively to Clean CCS EBITDA.

Windfall taxes imposed in Hungary continued to put pressure on Downstream’s performance in 2023 as it increased from USD 358 mn to USD 644 mn in a year. The tax based on the Urals-Brent spread increased to 95% from 8th of December 2022, but the legislation was amended and from 1st of April 2023, and a 7.5 USD/bbl floor was introduced, that is exempt from the tax. At the same time, a net revenue-based tax was introduced, based on the 2022 net sales revenues with a tax rate of 2.8%, retrospectively from the beginning of the year. In 2023 July a new type of tax, the CO2 quota tax, was introduced from 1st of January 2023 (also retrospectively). According to the legislation, for the Q1-Q3 period, 40 EUR/tCO2 had to be paid after the total CO2 emission by MOL Plc. and MPC with significant free quota allocation. In October, the Hungarian Government amended the legislation and reduced the tax rate to 36 EUR/t CO2 for Q4.

In Refining in 2023 despite the lower fuel crack spreads and the narrower Urals-Brent spread, the refinery margin averaged around 9 USD/bbl, 7% higher than in the base period. The improved result was driven by falling energy prices and wholesale fuel margins were at elevated levels and card sales reached an all time high. In Hungary, both fuel demand and sales decreased compared to 2022, where the consumption was boosted by the price cap regulation. In 2023, Croatia recorded all-time high sales due to the favourable summer period. Despite the volatile external environment and unplanned events, MOL Group ensured stable and sufficient market supply in domestic markets throughout the year.

MOL Group’s integrated petrochemical margin averaged 144 EUR/t, representing a 41% decrease year-on-year due to a deep economic crisis in the petchem industry, which resulted in narrower polymer-monomer spreads, weakening demand and shrinking polymer quotations. In addition, the newly introduced CO2 tax also negatively affected MPC’s performance. On the other hand, operational optimization, flexible pricing approach and energy efficiency initiatives contributed to partially offset the negative price effects.

Total investments in the Downstream business unit reached HUF 218.3 billion, representing a 19% decrease compared to 2022. About 60% of this amount was spent on Refining and Marketing projects. Strategic projects such as Polyol and the Rijeka Refinery Upgrade Project (RRUP) continued to play an important role within strategic organic investments. Strong efforts were also made to comply with EU sanctions and regulations, with crude diversification program a key factor in investment decisions.

Regarding ongoing transformational projects, Polyol Project is at 99.9% completion, engineering, procurement and construction is completed, commissioning is ongoing, the expected handover is in 2024 The RRUP reached 84% completion despite unfavourable external factors, such as lack of workforce and the increased prices of construction materials.

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3.4.2 OPERATIONAL OVERVIEW OF 2023

In light of the changing external environment, including the Russia-Ukraine war, the more ambitious green targets, new EU regulatory frameworks and the change in customers’ preferences, MOL Group has decided to review and revise its Shape Tomorrow Strategy. The strategic initiative aims to fortify our market position and guide us towards a more sustainable future. Under the new strategy, crude diversification, CO2 emission reduction, sustainable chemical transformation, circular economy, renewable fuels and green H2 will be the focus of the Downstream business. In 2023, one of our primary focus was to guarantee stable and sufficient market supply within the core region and to comply with the EU sanctions during our operations. Crude diversification program started in 2022 in response to the EU sanctions on the Urals and continued in 2023 and is on schedule at the Danube Refinery, Slovnaft and Logistics. Full Compliance was achieved in 2023, alternative crude oil processing in the Bratislava Refinery has been increased.

During the year of 2023, 6 new types of crude oils and their various blends in volume 800 kt+ were successfully processed in Slovnaft within the crude oil diversification program. By gradually increasing the processing of alternative oils, we are getting closer to the goal of meeting the regulations imposed by sanctions on the export of products from Russian oil and also to ensure the supply security of the region in the future.

Harvesting the positive external environment the direction was to utilize the Refining Production assets at the maximum available level. As a result total crude processing reached 13.9 mn tons in Refining, (0.2 mn tons above 2022). Production closed the year with moderate overall availability in Refining (93.3%) and also in Petrochemicals (92.5%), both slightly below the targeted level. Shrinking Petrochemical demand due to the evolving crisis and energy prices led to Petrochemical assets going through economical shutdowns during the year in order to maintain acceptable financial results. HSE received a high focus during the year, resulted improving trend in safety KPIs.

We continued with our greatest transformation program, titled ‘PROmotion’ (Production in Motion) to prepare Production for the challenges of the future. Targeting an over 150 mn EUR (at 2018 price level) OPEX efficiency improvement, advances were made in all key areas including Organisational Effectiveness, Energy efficiency, Cost excellence and Maintenance. Continuation of the program ensures not only OPEX benefit, but developing our mindset toward becoming a professional, reliable and valued backbone of the transforming value chain.

Logistics is focused on customers satisfaction through providing competitive services, adapting to everchanging environment, transforming to sustainable operation driven by engaged employees.

Although 2023 was a challenging year, Logistics still managed to achieve success in many territories. August was a record month from rail transportation point of view: Rijeka had the highest throughput ever, the highest ever loadings on fast fillers and also the highest ever domestic crude transfer from Sisak to Rijeka happened last summer. Despite these records we managed to serve our customers’ demands on time in full capacity. In Croatia we also had to face tough conditions in road transportation due to the regulated prices. Supporting Upstream, Moltrans started new business, delivering crude oil from domestic production sites. Sustainability is increasingly in focus, with switching from steam to LPG as an energy source on Sisak terminal a big milestone and we continued to deliver GHG emission savings by decreasing fuel consumption. Regarding investments, in case of our assets the reconstruction works on Adria and Friendship 2 pipelines were carried out within their deadline. We have further developed our terminals, the commissioning of the 3rd loading bay in Terminal Csepel is finished and it could improve the customer satisfaction by reducing the waiting time. We continued with digitization, automation and centralization of control rooms at Slovakian business units and will continue to do so in the upcoming years. We carried on with the distribution network optimization, in Austria it was finished on time.

Value Chain Management (VCM) provides the operating framework and sets the long term development path of MOL Group Downstream. Key focus areas include setting the DS strategy and optimization framework for short and long term, while providing managerial support, as well as feedstock sourcing and trading, risk management, scheduling and customer service operations. In 2023, VCM focused on maintaining the continuity of supply security in a changing external environment. In line with EU sanctions, MOL Group aims to increase its seaborne crude processing in both of its landlocked refineries. VCM contributes to this goal by securing the needed seaborne supply to meet the embargo and optimization goals. New Chapter organization changes were adapted in INA as well, resulting in the establishment of INA VCM, with smooth transition from C&O. Further progress was made by the launch of New Cycle of Growing Professional Skills (GPS) Development Program, which involves the largest white collar population area in Downstream. More emphasis was put on customer service processes and digitalization.

Group Fuels business unit oversees the fuel value chain of MOL Group in 12 countries with the help of more than 700 people, encompassing market supply, sales optimization, and sales activities across all downstream markets. Collaborating with Group Downstream Value Chain Management, it focuses on maximizing fuel margins and coordinates the management of fuels, fuel cards, biofuel compliance, and other refined products at the subsidiary level. The product portfolio includes motor gasolines, diesel and other gas oils, fuel oil, bunker fuel, sulphur, JET fuel, coke, biofuels, and fuel card management with digital solutions. In 2023, the business unit reached high margins and highest ever card sales of 3 billion liters. Group Fuels was able to maintain the position within the region and significantly strengthen position on Polish and Slovenian market, by acquisitions of strong players with long business history.

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Group Chemicals oversees the sale of over 2 million tons of chemicals products in more than 200 different product grades. We serve 2,500 customers in six segments (from automotives to packaging) in 55 countries in 4 continents. For many of the products we sell, we are in the top 10 market players in Europe.

Polymer sales volume in 2023 reached 975 kt, which represents a decrease of 2% (-19 kt) compared to 2022. The Petchem market was strongly affected by lower consumption of plastic producers. The main reason were higher interest rates and energy costs, along with inflationary pressures, which are affecting economic growth in Europe. Despite all these factors, customers remained in our focus and we have confirmed our position as a reliable supplier. Even though we had record low sales in polymers, we managed to mitigate the loss by more than 50mn euros by contract re-negotiations, energy efficiency actions and stop&go operation mode.

Base chemicals sales volume was 699 kt in 2023, in line with 2022. Despite challenging internal environment due to many unplanned S/Ds (reformer, cracker, base oil unit), stop&go operation of the crackers and unfavorable external environment (energy prices, strong Asian import competition, reduced demand) with customer portfolio optimization, strong customer focus and margin driven decision-making we managed to maintain our market positions and to ensure smooth refinery and Petchem operations.

In 2023, DS Development focused on projects that increase efficiency, promote the company's sustainability goals or expand the product portfolio.

The flagship Polyol Project of MOL Downstream has reached an overall 99.9% progress by the end of 2023. Construction activities have come close to completion by the end of 2023, with focus of the project management teams shifting towards the complex sequence of commissioning activities of all units. The operating teams have been set up and play an integral role in commissioning as “on the job” training. Trial production shall start in multiple steps in the second half of the year.

The project objective is to upgrade Rijeka Refinery and invest in building a Delayed Coker Unit with the additional necessary refinery assets in order to achieve the highest level of profitability for the refinery via enabling processing of heavy residues, minimizing black product yield and maximizing the production capability of the valuable white products.

Work on Rijeka Refinery Upgrade Project continued despite the challenging business environment caused by the COVID-19 pandemic and Ukraine crisis affecting the material, energy, and workforce prices. The Project has reached 84% completion overall. The engineering is finished while procurement activities are nearly finished, with completion above 99%. Furthermore, almost all long-lead items, together with other materials and equipment, were delivered.

3.4.3 DOWNSTREAM FUTURE PRODUCT PORTFOLIO

MOL Group Downstream is in a continuous process of developing its future product portfolio, launching new products and services that not only mitigate low-carbon transition risk, but capitalize on opportunities created by a carbon constrained, circular economy.

Biofuels in MOL Group

MOL Group's biofuel purchase with regards to both supply points (8 countries) and concluded amount (>600 kilotons) remained stable in 2023 as the national transport compliance mandates did not or hardly changed in its core countries compared to 2022.

The circle of bio components used is also similar like in the previous year: food- & waste based bioethanol and fatty acid methyl esters are still serving as basis for decarbonization of our fuels. In addition, bio components made of advanced feedstocks are further increasing in our portfolio: MOL successfully processed such material in its co-processing unit in Százhalombatta.

Key achievement for MOL Group is to have the first supply of aviation fuel blended with a remarkable share of Sustainable Aviation Fuel (SAF) as well as selling 100% renewable diesel (called Hydrotreated Vegetable Oil or HVO) in selected wholesale and retail outlets.

R&D

In 2023, Downstream R&D continued its activities and projects across three main product fields: Polyol, Polyolefin, and Refining. R&D has a vital role in the Polyol Project by continuing the development of product recipes and grades for the upcoming start-up of production. We extended the polyurethane application development know-how to ensure the necessary support for MOL Group’s future customers for polyols. Our Polyol R&D team is actively engaged with potential customers to prepare the ground for the market entry. In the Polyolefin area, the focus was to continue the portfolio transformation into a more sustainable one. The active portfolio management lead us to extend the co-operation framework through the whole Petchem product line, including waste-management activities. To meet the future demand of low carbon fuels, to diversify the feedstock portfolio and to accelerate the conversion to circular economy, several small-scale co-processing lab reactor tests were successfully completed. The focus was put on waste-based fraction and new waste-based/advanced feedstocks in order to produce higher proportion of non-crude-based middle distillates. We also continued the co-operation with international partners in the field of rubber bitumen production and completed successfully our project converting heavy fuel oil to non-fuel products. MOL Group is member of the consortia of several nationally funded R&D projects in collaboration with Hungarian universities (Budapest University of Technology and Economics, University of Szeged, University of Pannonia) and other industrial partners.

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With Biogas gaining a momentum in Europe, MOL has prepared its biogas roadmap with the ambition to build a unique position in CEE by 2030. As a first step of its implementation, the Group has acquired its first biogas plant near Szarvas, Hungary. The plant processes more than 100,000 tons of feedstock (residual waste from food producers, farmers and livestock producers in the region) producing more than 12.5 million cubic metres (mcm) of biogas per year. Furthermore, to support the Group’s strategic targets, INA Group is planning to invest in a biogas/biomethane plant using agricultural waste in Sisak, Croatia. With these developments, MOL Group has been establishing its presence in this new value chain, and can be considered as a stepping stone for further organic and inorganic developments.

Recently, Hydrogen became a key enabler of EU’s decarbonization and energy supply security targets. Realizing its advantages, as one of the largest hydrogen producer and consumer in the region, MOL Group has started to develop further its competencies in this value chain. According to the Company’s strategy and roadmap, MOL has been building its green hydrogen facility in the Danube Refinery, planned to be handed over in Q1 2024. The hydrogen plant is going to have 10 MW electrolyzer capacity and can produce 1600 tons of clean green hydrogen yearly, which going to be the largest operating renewable hydrogen production in CEE region. As the Croatian leg of the developments, the INA Group has started to implement its own hydrogen projects in Rijeka with a similar capacity as in Hungary. Through its initiatives, MOL is among the first players in the CEE region, who has started the renewable hydrogen value chain developments to maximize the shareholder value and assure green transition with profitable investments.

MOL Recycling and Compounding initiatives were heavily impacted by external factors, such as the high energy prices, economic downturn and petchem cycle. ReMat Zrt. – Hungarian market leading LDPE plastics recycling company using waste for creating regranules – was also affected by strong decline on sales revenue. During 2023 MOL focus shifted to improve ReMat’s financial and operational performance on a short term and integrate the Company into the Group’s long term strategy. In 2019, MOL Group has acquired the German Based Aurora Kunstoffe GmbH, one of the leading engineering plastic scrap recycling company supplying automotive industry. As in the case of other players in the industry, effects from supply chain interruptions and inflation caused extreme slowdown of production in automotive, construction and other areas, resulting in strong decline in overall polymer demand.

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3.5 Innovative Businesses and services (14)

In the field of Retail, 2023 figures indicate normalisation of fuel demand after 2022 hit by price caps.

3.5.1 Consumer Services

Segment IFRS results (HUF bn) | FY 2023 | FY 2022 | Ch %
EBITDA | 244.8 | 121.2 | 102
EBITDA excl. spec. items(1) | 244.8 | 121.2 | 102
Operating profit/(loss) reported | 122.0 | 76.6 | 59
Operating profit/(loss) excl. spec. items(1) | 183.3 | 76.6 | (47)
CAPEX | 181.0 | 250.5 | (28)
o/w organic | 66.0 | 63.7 | 4

Total retail sales (kt) | FY 2023 | FY 2022 | Ch %
Hungary | 1,493 | 1,881 | (21)
Slovakia | 816 | 786 | 4
Poland | 717 | 64 | n.a.
Croatia | 1,423 | 1,180 | 21
Romania | 787 | 748 | 5
Czech Republic | 501 | 466 | 8
Other(8) | 714 | 472 | 51
Total retail sales | 5,597 | 4,771 | 17

Non-fuel indicators | FY 2023 | FY 2022
Non-fuel margin share of total margin | 34.2% | 38.2%
Number of Fresh corner sites | 1,253 | 1,179

Notes and special items are listed in Appendix I and II.

Tables regarding the number of MOL Group service stations, retail sales of refined products (kt) and gasoline and diesel sales by countries (kt) are available in the annual Data Library on the company’s website.

3.5.1.1 Financial overview of 2023

In 2023, EBITDA doubled compared to 2022, reaching HUF 244,8 bn. Fuel volumes increased by 15% year-on-year, premium fuel penetration developed to 14%. Non-fuel margin expansion (40% increase YoY) and sales volume increase shows the reliable growth of non-fuel segment thanks to network expansion, more tailored offers for customers and MOL Move loyalty program. By the end of 2023, the total number of service stations reached 2,421. Result are affected by inorganic effects and regulatory measures in Croatia, Slovenia, Serbia and Bosnia.

3.5.1.2 Operational overview of 2023

The segment consists of two main business lines: “Retail” includes both fuel and non-fuel retailing, while “Mobility” is comprised of all other services provided for people “on-the-go”.

Retail

In December 2022, MOL has entered to the 10 th country in Europe, Poland, by acquiring 417 service stations with the brand, LOTOS Paliwa based on a sets of agreement with PKN Orlen and Grupa LOTOS SA.

On 30th June, 2023, MOL completed the purchase of the company OMV Slovenija d. o. o., which was renamed MOL & INA d. o. o. The change of ownership meant taking over the company's entire operations, including the entire network of OMV service stations in Slovenia. The transaction included 120 service stations across Slovenia and MOL stepped up to become the second largest market player on the Slovenian market.

In 2023, MOL maintained a leading position on the Hungarian, Croatian and Slovakian markets, achieved second place in Slovenia, Serbia, while being the third largest market player in the Czech Republic, Montenegro, Romania and in Poland as well.

Rebranding of the acquired networks was the highest priority in 2023: 196 SeS were rebranded in Poland and 42 SeS were rebranded in Slovenia. Moreover, major reconstructions were completed on over 150 SeS, including forecourt, car- and jet-wash reconstructions and the installation of the Fresh Corner concept at the stations. More Fresh corners were added across the network taking the total number of Fresh Corners to 1,253. To enhance non-fuel transactions further in line with the increased fuel sales in 2023, 140 gastro acceleration projects were completed during 2023.

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Besides, the Fresh Corner concept is constantly being developed through the continuous expansion of the gastro and grocery categories. The offering was also expanded by a wider range of convenience services (e.g. self-service and innovative payment solutions), and own branded products across the Group. French-type hot dog and quality coffee remained the core products together with other options (sandwich, bakery etc.). During 2023, 64mn cups of coffee and 40mn pcs hot dog sold.

Retail Customer

Consumer Services systematically collects retail customer insights and tracks overall customer satisfaction through a number of channels. As a result, MOL Group does not operate with (and therefore does not report) a single score for Retail, as several customer satisfaction scores are applied depending on the insight channel.

We maintain ongoing monitoring of our customers' behaviours on a monthly basis through a comprehensive customer insight system known as Brand Tracking. This system is operational across seven countries, encompassing a total of 3,000 customers per country, resulting in a cumulative 21,000 participants within MOL Group. Monthly data collection, amounting to 250 customers per month per country, is a fundamental aspect of this process. Additionally, we conducted two waves of tracking in Poland during 2023, as Poland transitions to monthly tracking starting in 2024.

Brand Tracking provides invaluable data pertaining to brand awareness, usage patterns, overall brand performance, and 25 distinct key performance indicators (KPIs) related to fuel, gastronomy, store hygiene, loyalty programs, and staff behaviour. These insights inform the development of country-specific action plans while an important part of this tracking evaluates the effectiveness of our primary campaigns enabling continuous enhancement of their efficiency.

Emphasizing our commitment to quality, we place significant emphasis on ongoing product quality enhancement initiatives, facilitated by a series of rigorous product tests. For instance, our fuel quality assessments involve collaboration with DTC Austria, while blind taste tests conducted by third-party agencies evaluate key gastronomy offerings such as coffee and hot dogs. Prior to the launch of our new Fresh Corner coffee product, over 1500 individuals across six countries participated in taste tests to determine the best flavor profile for our customers.

Furthermore, we have continued to refine our product range and offerings based on insights gained from two of MOL Group's most extensive research endeavours: Fresh Corner and Fuel Usage & Attitude (U&A) research conducted in 2020 and 2021, respectively. These initiatives engaged nearly 10,000 customers for Fresh Corner and over 7,000 for fuel across seven countries through four different channels, enabling us to better understand customer expectations and shopping habits. Insights derived from these research endeavours drive a more customer-centric decision-making process, thereby supporting the retail transformation of the Group. Notable developments resulting from these insights include the renewal of our hot sandwich range, enhancements in fresh sandwich placement and packaging, our expanded hot-dog network coverage, and optimized prize winning games and other promotional activities.

To gain deeper insights into the evolving needs of our loyal customers and respond promptly to their changing habits, we have implemented an internal research system to obtain rapid feedback from members of our loyalty programs. The continuous refinement of our offerings and loyalty functionalities are informed by these insights.

MOL’s customer loyalty program constitutes a key element in the digital transformation of Consumer Services. MOL MOVE, the digital, gamified, tier-based rewards program has been introduced in 6 markets already (Croatia, Slovenia, Hungary, Czech Republic, Slovakia and Poland) and will be rolled out in Romania and Serbia at the end of Q1 2024. The platform enables MOL Group to provide personalized and highly automated communication with an omnichannel approach. With the help of the new program, number of mobile application downloads increased to 3.7 million representing a 4-times growth from 2021. During the last period, we significantly evolved our internal capabilities in segmentation, customer lifecycle and campaign management in order to support offer development and react faster the changing habits of the customers.

MOL consciously uses mystery shoppers (selected through tender) when measuring customer satisfaction across different channels to avoid internal biased systems. Digitization is also increasingly present in our internal operation via the extensive use of Artificial Intelligence and Machine learning-based tools and also support the execution via our online, gamified learning tool, eSMILE.

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E-smile

As a consumer facing business, employee engagement plays a major role in the transformation of Consumer Services and enhancing customer experience. In 2017 MOL Group introduced a face-to-face training program called ‘Smile’ for more than 15,000 service station staff, covering both hosts and station managers, with the aim to improve customer service. In 2020 MOL Group expanded employee training and development through a digital microlearning training platform called eSMILE, which is available on their smart phones. The mobile training platform expands the Group’s training portfolio on product, process, sales, compliance and HSE relevant topics and reinforces previously shared knowledge. Furthermore, the platform connects the Group directly to each member of staff working at the Group’s service stations. It allows real-time communication from head office about the latest sales promotions, company updates and it was especially important during the pandemic, when we were able to share the latest operational changes, ensuring a safe working environment and safe consumer experience. Since 2021 the platform also supports new-hires in their onboarding experience, helping them to hit the sales floor with higher confidence and shorter preparation.

In 2023, the Customer Service Protocol was introduced, a 5-step method designed to make life easier for our hosts by guiding them on which products to focus on and how to become proactive in selling. In addition, Poland joined the MOL Group last year and eSMILE now has more than 19,000 service station employees.

This year MOL conducted its second Employee Engagement Survey among frontline employees. The response rate is currently at 90%, although the survey is still in the open phase.

The platform is based on gamification elements which boosts employee engagement and wellbeing in the workplace. This results in a stable-high usage of the platform, with 96% of frontline staff using eSMILE every day when at work, resulting in an average 17% increase in knowledge from the training topics. These programs not only support the transformation of the Group’s service station network from fuel retail into FMCG retail but also the continuous increase of non-fuel revenues.

Mobility

In 2018, MOL Group launched MOL Plugee, a new EV charging brand under the Consumer Services division. By year end 2023, 268 MOL Plugee EV chargers were installed throughout the Group’s service station network across the CEE region. In 2023 MOL Group installed 2 ultra-fast and 10 DC charger solutions on 11 new locations in Hungary, 2 AC chargers in Czechia, and 2 new ultra-fast chargers in Poland. MOL Group launched its application based service in Hungary in 2020 and in Slovenia, Slovakia, Czech Republic, Croatia and Romania in 2021. At the end of 2023 it enabled our more than 30,000 registered users and other customers to have a seamless charging experience in 6 countries. Energy consumption for all EV chargers in 2023 reached 2,225,937 kWh, saving a total of above 660 tonnes of CO2-eq.

In 2018, MOL Group launched a car sharing service in Budapest (Hungary) called MOL LIMO. By the end of 2023, a fleet of 491 shared cars from 10 different models (2 electric, 3 hybrid, 5 ICE) were in operation, number of electric and hybrid vehicles were 145. In 2023, MOL LIMO introduced two new models to its fleet, the electric Tesla Model 3 and Toyota Yaris Hybrid. The client base is continuously growing, until the year-end total number of registered users reached approximately 150 thousand. Energy consumption of all LIMO EVs reached 68,660 kWh in 2023, saving an equivalent of around 20 tonnes of CO2-eq., all electricity used from renewable sources.

KEY MOL LIMO SUSTAINABILITY FIGURES | UNIT OF MEASURE | FY 2023 | FY 2022 | SASB
Average fleet size | number of vehicles | 478 | 450 | TR-CR-000.C
o/w electric | percentage | 5 | 29 | -
Average vehicle age at year end | in months | 35,6 | 33.5 | TR-CR-000.A
Vehicles rated by Euro NCAP programs with an overall 5-star safety rating | percentage of fleet | 36 | 23 | TR-CR-250a.1
Vehicles recalled during period | number | 0 | 0 | TR-CR-250a.2

As part of MOL Group’s mobility strategy, a fleet management service called MOL Fleet Solution was launched in 2018. The main target is to finance and manage vehicles owned and used by MOL Group and external clients, as well as the fleets of small-, medium-sized or large businesses in Hungary. The number of financed and managed cars reached almost 6,000 by the end of 2023.

KEY MOL FLEET SUSTAINABLITY FIGURES | UNIT OF MEASURE | FY 2023 | FY 2022 | SASB
Average fleet size | number of vehicles | 5,841 | 5,060 | TR-CR-000.C
o/w electric and hybrid | percentage | 8 | 8 | -
Average vehicle age at year end | in months | 37 | 32,7 | TR-CR-000.A
Vehicles recalled during period | number | 365 | 365 | TR-CR-250a.2

Neither MOL Limo nor MOL Fleet Solutions registered any incidents concerning a) non-compliance concerning product and service information and labelling, and/or b) non-compliance with marketing communication during 2023. Finally, no incidents or complaints concerning breaches of customer privacy and/or losses of customer data as a result of data breaches were registered at neither MOL Limo nor MOL Fleet Solutions during 2023.

|  | Sustainability information | 30

3.5.2 Group Industrial and Corporate Services

The organization oversees Group Maintenance Services Management, Group Renewables & Energy Efficiency, as well as Group Procurement and Asset & Services Management.

The low complexity of 2023 turnarounds enabled Maintenance Single Service Companies to focus on enhancing work execution (mainly planning and scheduling) and organizational standardization. The companies also concentrated on a concise preparation for 2024, a turnaround-heavy year.

For Renewables & Energy Efficiency, 2023 brought a successful start-up of two Croatian solar farms (Virje 9MW and Sisak 3MW), alongside with the favourable financial performance of the Hungarian solar plant operation company. In addition, a Croatian offshore wind project was awarded with EU-grant for the completion of the pre-feasibility study. As for solar projects, by the end of the year, the organization has started preparation works for PV developments in Algyő (37 MW) and Tiszaújváros, MPK site (48 MW). Group Procurement has successfully delivered the 1st phase of Ariba implementation in MOL Polska.

3.5.3 Group Oilfield Development & Solutions

In 2023, the ongoing Russian-Ukrainian war maintained economic uncertainties, securing oil and gas supply became a priority and new alternative energy resources came into focus which resulted in an increasing business need for Oil Field Service (OFS) companies. MOL Group enhanced drilling and workover activities, also third-party exploration and field development activity (both conventional and unconventional) has been increased which generated even more projects, works for every segment of OFS companies. Participation in the successful gas discovery at Veliki Rastovac was another milestone in OFS companies’ history. Additionally, they further tested themselves in several emerging geothermal projects. Location, staff, maintenance and operation management optimization was continued among OFS companies, cross-border utilization of the assets was managed. Service flexibility was still the key to serve the changed, uncertain business requirements and the increased workload. Several actions were taken to optimize CAPEX and OPEX in a business environment burdened in crisis of war, high energy prices and price inflation.

Oilfield Chemicals and Technologies’ international marketing activity has been further intensified, surfactant tests were held in 2023 in relation to the enhanced oil recovery (EOR) and rubber modified bitumen technology, strong focus was on the Gulf States relations.

3.5.4 Circular Economy Services – Waste Management

In 2021 the Hungarian state decided to bring the public task of waste management entirely under the state’s competence and published a call for a concession tender for the management of ~5 million tons of municipal solid waste for 35 years. The ultimate aim of the tender was to enable the state to meet the recycling and landfilling targets set by the European Union until 2035. MOL won the public concession tender in July 2022 and established the concession company, MOHU MOL Waste Management Ltd. to perform the task. After a one-year long preparation phase MOHU started its operation on 1st July 2023, when the transition to the new system was successfully completed.

In order to ensure this transition and the stable waste collection and treatment, MOHU contracted 6 regional coordinators and 16 regional subcontractors, all 56 pre-treatment partners, and 217 institutional service providers in 2023. As the concession came into force in July, MOHU introduced the extended producer responsibility system, in which producers are responsible for financing the cost of the waste management activity occurring when their product reaches the end of its lifecycle.

Creating a waste tracking IT system,and optimizing the utilization of waste treatment tasks along with efficiency increasement in transportation tasks were also necessary for MOHU to coordinate the work of 10,500 people on more than 1,000 sites throughout the country, and to serve its customers including 9.9 million residents and 1.8 million registered businesses in Hungary.

Besides crucial operation tasks, MOHU started to create the foundations for several main projects launching in 2024, such as the development of new separate collection of biodegradable household waste or the introduction of the deposit refund system. These projects aim that the various waste streams are to be collected in a clean and separate way, giving the opportunity to be directly recycled instead of incineration or landfilling.

|  | Sustainability information | 31

3.6 GAS MIDSTREAM

Segment IFRS results (HUF bn) | FY 2023 | FY 2022 | Ch %
EBITDA | 93.8 | 61.0 | 54
EBITDA excl. spec. items(1) | 93.8 | 61.0 | 54
Operating profit/(loss) reported | 76.4 | 44.3 | 72
Operating profit/(loss) reported excl. spec. items(1) | 76.4 | 44.3 | 72
CAPEX and investments | 12.4 | 11.6 | 7
o/w organic | 12.4 | 11.6 | 7

Key Gas Midstream ESG Indicators | Unit of measure | FY 2023 | FY 2022 | SASB
Total Direct GHG emissions (scope 1) | mn tonnes CO2 eq | 0.1 | 0.1 | EM-MD-110a.1
Volume of Spills (> 1m3) | m3 | 0 | 0 | EM-MD-540a.1
Lost Time Injury Frequency (own staff) | per 1 mn worked hours | 0.87 | 0 | EM-MD-540a.4

Tables regarding transmission volumes (million cmc) are available in the annual Data Library on the company’s website.

3.6.1 Financial overview of 2023

FGSZ Földgázszállító Ltd. (hereinafter referred to as: FGSZ) reached HUF 93.8bn EBITDA in 2023, a 54% increase from 2022, with the volatile external environment throughout 2023 altogether supportive compared to prior years. The financial result was determined by a blend of external and internal factors, such as shifting energy prices, stiffening external environment, varying market demand for transmission services – especially for cross-border capacity products – and changes of regulated tariffs.

Aggregated transmission volumes were lower by 9% in 2023 on YoY basis. The decrease is driven by domestic transmission volumes which showed a nearly 10% drop on YoY basis in parallel with the European energy saving initiatives and milder weather conditions. Persisting uncertainty in regional gas supply routes resulted in significant transmitted volumes towards gas storages (around 3.8 bcm), but due the higher opening stock level, transmissions to gas storages were behind prior year figures. Export transmission demand towards neighbouring countries (e.g. Romania, Ukraine, Serbia and Slovakia) showed a further 12% increase from a relatively low 2022 base but remained hectic compared to previous periods.

Regulated revenues were higher by 32% YoY mainly due to the significant cross-border capacity demand and increased demand for short-term capacity products in line with active usage of gas storage facilities and growing but fluctuating export activities. Average regulated tariffs were higher than in the prior year, mainly reflecting the challenges of the external economic environment. Calming energy market conditions and lower gas consumption of the transmission system had positive effect, while other external factors (e.g. elevated inflation rate) put strong pressure on FGSZ’s operational costs; strict cost control smoothened the overall impact of the operational expenditures.

The total value of CAPEX and investments remained similar compared to the prior year. In 2023 CAPEX spending covered mainly sustain-type projects (e.g. pipeline rehabilitation, reconstruction of compressor units) and the completion of the Városföld nod project, at the same time to support the green transition FGSZ also completed projects in relation to renewable gases and energy efficiency.

3.6.2 Operational overview of 2023

FGSZ is the sole operator of the nearly 6,000 km long high-pressure natural gas transmission system in Hungary, and as a natural monopoly it operates on a regulated basis governed by EU and domestic law. The Company’s main activity is the construction, operation, and allocation of natural gas transmission capacity, of which it offers yearly, quarterly, monthly, daily, and within day firm and interruptible capacities through online auctions. FGSZ plays an important role in delivering gas production to consumers in Hungary and in meeting the needs of domestic network users from imported supplies, and it also carries out cross-border gas transportation activities besides domestic gas transmission. It operates bidirectional interconnection points with Slovakia, Ukraine, Romania, Serbia, and Croatia and unidirectional entry point from Austria.

The security of supply of Hungary is inseparable from the energy security of the broader CEE region and the whole of Europe. Therefore, FGSZ aims to ensure the interoperability of the natural gas transmission networks of the region and it also aims to increase transit volumes through Hungary. The developments of the transmission grid and trade infrastructure implemented by FGSZ in the recent years helped Hungary and the broader region as well in reaching a more competitive gas market while increasing security of supply and making natural gas even more accessible as a lower carbon alternative in – among others – electricity generation.

To further enhance regional gas market integration, FGSZ completed several important agreements and developments on its network in 2023. In October 2023 the technical capacity at the Hungarian-Romanian border was further developed from 280 tcm/h to 300 tcm/h, whilst further expansion is also planned to enable more alternative sources towards the region. FGSZ also works on internal system development, new entry points also support the further increase of domestic gas production.

|  | Sustainability information | 32

4. APPENDICES

APPENDIX I - IMPACT OF SPECIAL ITEMS ON OPERATING PROFIT AND EBITDA

Special items are one-off items that are single, significant (more than USD 10 million P&L effect), non-recurring economic events which are not considered as part of the core operation of the segment therefore they do not reflect the actual performance of the given period.

| HUF million | USD million
Special items - operating profit | FY 2023 | FY 2022 | Ch % | FY 2023 | FY 2022 | Ch %
Operating profit excl.spec.items from continuing operation | 722,801 | 1,253,067 | (42) | 2,026 | 3,307 | (39)
Upstream | 21,898 | 15,273 | n.a. | 63 | 53 | n.a.
Impairment on Upstream assets in the Group | (3,654) | 15,273 | n.a. | (10) | 53 | n.a.
MOL Plc Decommissioning liability revision estimate | 16,904 |  | n.a. | 48 |  | n.a.
INA Decommissioning liability revision estimate | 8,648 |  | n.a. | 25 |  | n.a.
Downstream |  | (9,228) | n.a. |  | (24) | n.a.
Impairment of assets under construction at SN |  | (4,678) | n.a. |  | (12) | n.a.
Impairment of assets under construction at MOL Plc. |  | (4,550) | n.a. |  | (12) | n.a.
Corporate and other | (5,867) |  | n.a. | (16) |  | n.a.
ITK goodwill impairment | (5,867) |  | n.a. | (16) |  | n.a.
Consumer Services | (61,257) |  | n.a. | (175) |  | n.a.
Impairment of Retail assets | (61,257) |  | n.a. | (175) |  | n.a.
Total impact of special items on operating profit from continuing operation | (45,226) | 6,045 | n.a. | (129) | 29 | n.a.
Operating profit from continuing operation | 677,575 | 1,259,112 | (46) | 1,898 | 3,337 | (43)
Special items - EBITDA | FY 2023 | FY 2022 | Ch % | FY 2023 | FY 2022 | Ch %
EBITDA EXCLUDING SPECIAL ITEMS from continuing operation | 1,123,707 | 1,734,645 | (35) | 3,162 | 4,601 | (31)
Upstream | 25,552 |  | n.a. | 73 |  | n.a.
MOL Plc Decommissioning liability revision estimate | 16,904 |  | n.a. | 48 |  | n.a.
INA Decommissioning liability revision estimate | 8,648 |  | n.a. | 25 |  | n.a.
TOTAL IMPACT OF SPECIAL ITEMS ON EBITDA from continuing operation | 25,552 |  | n.a. | 73 |  | n.a.
EBITDA from continuing operation | 1,149,259 | 1,734,645 | (34) | 3,235 | 4,601 | (30)

|  | Sustainability information | 33

APPENDIX II – NOTES

Number of footnotes |
(1) | Special items that affected operating profit and EBITDA are detailed in Appendix I.
(2) | As of Q2 2013 our applied Clean CCS methodology eliminates from EBITDA/operating profit inventory holding gain / loss (i.e.: reflecting actual cost of supply of crude oil and other major raw materials); impairment on inventories; FX gains / losses on debtors and creditors; furthermore, adjusts EBITDA/operating profit by accurate CO2 cost recognition and capturing the results of underlying commodity derivative transactions. Clean CCS figures of the base periods were modified as well according to the improved methodology.
(3) | USD-denominated figures for both 2023 and 2022 figures have been calculated by converting the results of each month in the period on its actual monthly average HUF/USD rate.
(4) | Net gearing: net debt divided by net debt plus shareholders’ equity including non-controlling interests.
(5) | Brent dated price vs. average Ural MED and Ural ROTT prices.
(6) | Net external sales revenues and operating profit includes the profit arising both from sales to third parties and transfers to the other business segments. Upstream transfers domestically produced crude oil, condensates and LPG to Downstream and natural gas to the Gas Midstream segment. The internal transfer prices used are based on prevailing market prices. The gas transfer price equals the average import price. Divisional figures contain the results of the fully consolidated subsidiaries and the proportionally consolidated joint operations engaged in the respective divisions.
(7) | This line shows the effect on operating profit of the change in the amount of unrealized profit deferred in respect of transfers between segments. Unrealized profits arise where the item transferred is held in inventory by the receiving segment and a third-party sale takes place only in a subsequent quarter. For segmental reporting purposes the transferor segment records a profit immediately at the point of transfer. However, at the company level profit is only reported when the related third-party sale has taken place. Unrealized profits arise principally in respect of transfers from Upstream to Downstream and Gas Midstream.
(8) | From 2016 Austrian retail operations were reclassified into wholesale.
(9) | As of January 2018, an updated formula for calculating the „MOL Group petrochemicals margin” was introduced, replacing the previous „Integrated petrochemical margin”. The purpose of the new formula is to better reflect the petchem product slate of the group.
(10) | As of 2023, a new methodology has been introduced which includes purchased energy (enhanced fit to natural gas) and CO2
(11) | FOB Rotterdam parity
(12) | FOB Med parity
(13) | Figures and analysis of Consumer Services performance are presented in chapter 3.5. (“Innovative businesses and services”).
(14) | Internal corporate governance and external reporting structure of Innovative Businesses and Services are different, thus the financial result of the Industrial Services and new Ventures unit of the Innovative Businesses and Services segment is reported within „Corporate and other” segment.
(15) | Average Ural MED and Ural ROTT prices.

MOL Hungarian Oil and Gas Plc.

Consolidated financial statements prepared in accordance with international financial reporting standards as adopted by the european union (EU) together with the independent auditor’s report

31 December 2023

Budapest, 21 March 2024

|  | Consolidated Financial Statements 2023 | 2

Consolidated Financial
Statements

Introduction
General information MOL Hungarian Oil and Gas Public Limited Company (hereinafter referred to as MOL Plc., MOL or the parent company) was incorporated on 1 October 1991 in Hungary by the transformation of the predecessor National Oil and Gas Trust (OKGT). MOL Plc. and its subsidiaries (hereinafter referred to as the MOL Group or Group) is an integrated, international oil and gas, petrochemicals and consumer retail company, active in over 30 countries with a dynamic international workforce of 25,000 people and a track record of more than 100 years in the industry with its legal predecessor. MOL Group has over 80 years of experience in exploration and production and its diverse portfolio includes active oil and gas presence in 11 countries, with production activity in 7 countries. MOL Group’s Downstream division operates three refineries and two petrochemicals plants in Hungary, Slovakia and Croatia, and is made up of different business activities that are part of an integrated value chain and MOL Group’s retail network is composed of around 2,400 service stations in 10 countries. The registered office address of the Company is 1117 – Budapest, Dombóvári út 28, Hungary. The shares of the Company are listed on the Budapest and the Warsaw Stock Exchange. Depositary Receipts (DRs) are traded Over The Counter (OTC) market in the USA. There is no single ultimate controlling party of MOL Group. Authorisation and Statement of Compliance These consolidated financial statements have been approved and authorised for issue by the Board of Directors on 21 March 2024. These consolidated financial statements have been prepared in accordance with International Financial Reporting Standards and all applicable | IFRSs that have been adopted by the European Union (EU). IFRS comprise standards and interpretations approved by the International Accounting Standards Board (IASB) and the IFRS Interpretations Committee. The Mol Group complies with the requirements of European Securities and Markets Authority (ESMA) and publishes its annual financial report in XHTML format from 1 January 2021 and provide the consolidated financial statements prepared in accordance with IFRS as adopted by the European Union (EU) with Inline XBRL to make the consolidated data machine-readable.

|  | Consolidated Financial Statements 2023 | 3

Independent auditor’s report

The Mol Group complies with the requirements of European Securities and Markets Authority (ESMA) and publishes its annual financial report in XHTML format from 1 January 2021 and provide the consolidated financial statements prepared in accordance with IFRS as adopted by the European Union (EU) with Inline XBRL to make the consolidated data machine-readable. The independent auditor’s report is a separate document.

|  | Consolidated Financial Statements 2023 | 4

Consolidated Statement of
profit or loss

|  | 2023 | 2022
| Notes | HUF million | HUF million
Net sales |  | 8,908,499 | 9,868,163
Other operating income |  | 57,537 | 43,716
Total operating income | 3 | 8,966,036 | 9,911,879
Raw materials and consumables used |  | 6,761,197 | 7,458,413
Employee benefits expense |  | 384,356 | 342,513
Depreciation, depletion, amortisation and impairment |  | 471,684 | 475,533
Other operating expenses |  | 672,547 | 632,864
Change in inventory of finished goods and work in progress |  | 101,601 | (151,056)
Work performed by the enterprise and capitalised |  | (102,924) | (105,500)
Total operating expenses | 4 | 8,288,461 | 8,652,767
Profit from operation |  | 677,575 | 1,259,112
Finance income |  | 195,177 | 164,080
Finance expense |  | 182,651 | 238,412
Total finance expense, net | 5 | 12,526 | (74,332)
Share of after-tax results of associates and joint ventures | 6 | 1,317 | (29,486)
Profit/(Loss) before tax |  | 691,418 | 1,155,294
Income tax expense | 7 | 123,514 | 466,343
Profit/(Loss) for the year from continuing operations |  | 567,904 | 688,951
Profit / (Loss) for the period from discontinued operations | 15 | (449) | 223,297
PROFIT / (LOSS) FOR THE PERIOD |  | 567,455 | 912,248
Attributable to: |  |  |
Owners of parent from continuing operations |  | 530,367 | 628,293
Non-controlling interest from continuing operations |  | 37,537 | 60,658
Owners of parent from discontinued operations |  | (449) | 223,297
Non-controlling interest from discontinued operations |  | - | -
Owners of parent |  | 529,918 | 851,590
Non-controlling interest |  | 37,537 | 60,658
Basic earnings per share attributable to owners of the parent (HUF) cont.op. | 27 | 715.42 | 851.01
Diluted earnings per share attributable to owners of the parent (HUF) cont.op. |  | 715.42 | 848.94
Basic earnings per share attributable to owners of the parent (HUF) discont.op. |  | (0.61) | 302.45
Diluted earnings per share attributable to owners of the parent (HUF) discont.op. |  | (0.61) | 301.71
Basic earnings per share attributable to owners of the parent (HUF) |  | 714.81 | 1,153.46
Diluted earnings per share attributable to owners of the parent (HUF) | 27 | 714.81 | 1,150.65

|  | Consolidated Financial Statements 2023 | 5

Consolidated statement of
other comprehensive
income

|  | 2023 | 2022
| Notes | HUF million | HUF million
Profit/(Loss) for the year from continuing operations |  | 567,904 | 688,951
Profit/(Loss) for the year from discontinued operations |  | (449) | 223,297
Profit/(Loss) for the year |  | 567,455 | 912,248
Other comprehensive income |  |  |
Other comprehensive income to be reclassified to profit or loss in subsequent periods: |  |  |
Exchange differences on translating foreign operations, net of tax | 8 | (145,942) | 239,678
Exchange differences on translating discontinued operations, net of tax |  | - | (11,148)
Net investment hedge, net of tax | 8 | 18,626 | (34,768)
Changes in fair value of debt instruments at fair value through other comprehensive income, net of tax | 8 | 4,118 | (3,330)
Changes in fair value of cash flow hedges, net of tax | 8 | (787) | 527
Share of other comprehensive income of associates and joint ventures | 8 | (13,125) | 18,715
Other comprehensive income from continuing operation / (loss) for the year, net of tax |  | (137,110) | 220,822
Net other comprehensive income to be reclassified to profit or loss in subsequent periods |  | (137,110) | 209,674
Other comprehensive income not to be reclassified to profit or loss in subsequent periods: |  |  |
Changes in fair value of equity instruments at fair value through other comprehensive income, net of tax | 8 | 17,340 | (4,481)
Remeasurement of post-employment benefit obligations | 8 | (2,470) | 1,725
Net other comprehensive income not to be reclassified to profit or loss in subsequent periods |  | 14,870 | (2,756)
Other comprehensive income from continuing operation / (loss) for the year, net of tax |  | (122,240) | 218,066
Other comprehensive income for the period, net of tax |  | (122,240) | 206,918
Total comprehensive income from continuing operation for the period |  | 445,664 | 907,017
Total comprehensive income from discontinued operation for the period |  | (449) | 212,149
Total comprehensive income for the period |  | 445,215 | 1,119,166
Attributable to: |  |  |
Owners of parent from continuing operation |  | 426,536 | 814,979
Non-controlling interest from continuing operation |  | 19,128 | 92,038
Owners of parent from discontinued operation |  | (449) | 212,149
Non-controlling interest from discontinued operation |  | - | -
Owners of parent |  | 426,087 | 1,027,128
Non-controlling interest |  | 19,128 | 92,038

|  | Consolidated Financial Statements 2023 | 6

Consolidated statement of
financial position

|  | 31 Dec 2023 | 31 Dec 2022
| Notes | HUF million | HUF million
NON-CURRENT ASSETS |  |  |
Property, plant and equipment | 9 | 3,997,801 | 3,817,879
Investment property | 9 | 15,959 | 9,459
Intangible assets | 9 | 525,569 | 552,588
Investments in associates and joint ventures | 6 | 204,187 | 190,805
Other non-current financial assets | 21 | 312,084 | 340,291
Deferred tax assets | 7 | 135,123 | 109,899
Other non-current assets | 13 | 71,995 | 85,555
Total non-current assets |  | 5,262,718 | 5,106,476
CURRENT ASSETS |  |  |
Inventories | 14 | 830,573 | 997,045
Trade and other receivables | 23 | 959,082 | 931,511
Securities | 21 | 3,763 | 7,295
Other current financial assets | 21 | 64,643 | 177,963
Income tax receivable |  | 25,197 | 12,239
Cash and cash equivalents | 24 | 412,977 | 595,244
Other current assets | 15 | 134,400 | 96,563
Assets classified as held for sale | 19 | 9,772 | 43,363
Total current assets |  | 2,440,407 | 2,861,223
Total assets |  | 7,703,125 | 7,967,699
EQUITY | 20 |  |
Share capital |  | 79,192 | 79,013
Retained earnings and other reserves |  | 3,227,876 | 2,702,764
(Loss) / Profit for the year attr. to owners of parent |  | 529,918 | 851,589
Equity attributable to owners of parent |  | 3,836,986 | 3,633,366
Non-controlling interest |  | 360,326 | 378,770
Total equity |  | 4,197,312 | 4,012,136
NON-CURRENT LIABILITIES |  |  |
Long-term debt | 21 | 913,181 | 650,413
Other non-current financial liabilities | 21 | 5,142 | 20,671
Non-current provisions | 16 | 557,215 | 584,447
Deferred tax liabilities | 7 | 147,067 | 128,482
Other non-current liabilities | 17 | 40,290 | 39,258
Total non-current liabilities |  | 1,662,895 | 1,423,271
CURRENT LIABILITIES |  |  |
Short-term debt | 21 | 185,401 | 468,686
Trade and other payables | 21 | 961,965 | 1,001,634
Other current financial liabilities | 21 | 204,916 | 231,454
Current provisions | 16 | 114,748 | 115,001
Income tax payable |  | 60,832 | 362,466
Liabilities classified as held for sale | 19 | 0 | 2,161
Other current liabilities | 18 | 315,056 | 350,890
Total current liabilities |  | 1,842,918 | 2,532,292
Total liabilities |  | 3,505,813 | 3,955,563
Total equity and liabilities |  | 7,703,125 | 7,967,699

|  | Consolidated Financial Statements 2023 | 7

Consolidated statement of
changes in equity

|  | Share capital | Share premium | Fair valuation reserve | Reserve of exchange differences on translation | Retained earnings with profit for the year attr. to owners of parent | Total reserves | Equity attr. to owners of parent | Non-controlling interests | Total equity
|  | HUF million | HUF million | HUF million | HUF million | HUF million | HUF million | HUF million | HUF million | HUF million
| Notes |  |  |  |  |  |  |  |  |
Opening balance 1 Jan 2022 |  | 78,163 | 219,389 | 27,567 | 474,378 | 1,977,653 | 2,698,987 | 2,777,150 | 312,781 | 3,089,931
Profit / (loss) for the year from continuing operation |  | - | - | - | - | 628,293 | 628,293 | 628,293 | 60,658 | 688,951
Profit / (loss) for the year from discontinued operation |  | - | - | - | - | 223,297 | 223,297 | 223,297 | - | 223,297
Other comprehensive income / (loss) for the year from continuing operation |  | - | - | (10,090) | 195,261 | 1,515 | 186,686 | 186,686 | 31,380 | 218,066
Other comprehensive income / (loss) for the year from discontinued operation |  | - | - | - | (11,148) | - | (11,148) | (11,148) | - | (11,148)
Total comprehensive income / (loss) for the year |  | - | - | (10,090) | 184,113 | 853,105 | 1,027,128 | 1,027,128 | 92,038 | 1,119,166
Dividends | 20 | - | - | - | - | (191,285) | (191,285) | (191,285) | - | (191,285)
Dividends to non-controlling interests | 20 | - | - | - | - | - | - | - | (26,712) | (26,712)
Equity recorded for share-based payments | 4 | 22 | - | - | - | 3,265 | 3,265 | 3,287 | - | 3,287
Treasury share transactions | 20 | 828 | - | - | - | 16,923 | 16,923 | 17,751 | - | 17,751
Acquisition / divestment of subsidiaries |  | - | - | - | - | - | - | - | - | -
Acquisition of non-controlling interests |  | - | - | - | - | - | - | - | - | -
Other |  | - | - | - | - | (665) | (665) | (665) | 663 | (2)
Closing balance 31 Dec 2022 |  | 79,013 | 219,389 | 17,477 | 658,491 | 2,658,996 | 3,554,353 | 3,633,366 | 378,770 | 4,012,136
Opening balance 1 January, 2023 |  | 79,013 | 219,389 | 17,477 | 658,491 | 2,658,996 | 3,554,353 | 3,633,366 | 378,770 | 4,012,136
Profit / (loss) for the year from continuing operation |  | - | - | - | - | 530,367 | 530,367 | 530,367 | 37,537 | 567,904
Profit / (loss) for the year from discontinued operation |  | - | - | - | - | (449) | (449) | (449) | - | (449)
Other comprehensive income / (loss) for the year from continuing operation |  | - | - | 18,170 | (119,371) | (2,630) | (103,831) | (103,831) | (18,409) | (122,240)
Other comprehensive income / (loss) for the year from discontinued operation |  | - | - | - | - | - | - | - | - | -
Total comprehensive income / (loss) for the year |  | - | - | 18,170 | (119,371) | 527,288 | 426,087 | 426,087 | 19,128 | 445,215
Dividends | 20 | - | - | - | - | (224,435) | (224,435) | (224,435) | - | (224,435)
Dividends to non-controlling interests | 20 | - | - | - | - | - | - | - | (38,387) | (38,387)
Equity recorded for share-based payments | 4 | 179 | - | - | - | 3,652 | 3,652 | 3,831 | - | 3,831
Treasury share transactions | 20 | - | - | - | - | - | - | - | - | -
Acquisition / divestment of subsidiaries |  | - | - | - | - | (1,863) | (1,863) | (1,863) | 815 | (1,048)
Acquisition of non-controlling interests |  | - | - | - | - | - | - | - | - | -
Other |  | - | - | - | - | - | - | - | - | -
Closing balance 31 Dec 2023 |  | 79,192 | 219,389 | 35,647 | 539,120 | 2,963,638 | 3,757,794 | 3,836,986 | 360,326 | 4,197,312

|  | Consolidated Financial Statements 2023 | 8

Consolidated statement of
cash flows

|  | 2023 | 2022
| Notes | HUF million | HUF million
Profit/(Loss) before tax from continuing operation |  | 691,418 | 1,155,294
Profit/(Loss) before tax from discontinued operation |  | (449) | 225,410
Profit/(Loss) before tax |  | 690,969 | 1,380,704
Adjustments to reconcile profit before tax to net cash provided by operating activities |  |  |
Depreciation, depletion, amortisation and impairment | 4 | 471,684 | 458,242
Increase/(decrease) in provisions | 16 | (22,331) | 31,816
Net (gain)/loss on asset disposal and divestments |  | (9,135) | (98,120)
Net interest expense/(income) | 5 | (2,233) | 5,902
Other finance expense/(income) | 5 | (12,315) | 53,952
Share of after-tax results of associates and joint ventures | 6 | (1,317) | 29,486
Other items | 26 | 7,516 | 134,088
Income taxes paid | 7 | (455,505) | (124,937)
Cash flows from operations before changes in working capital |  | 667,333 | 1,871,133
Change in working capital |  | 86,683 | (482,387)
(Increase)/decrease in inventories | 14 | 160,853 | (271,245)
(Increase)/decrease in trade and other receivables | 23 | (62,968) | (629,517)
Increase/(decrease) in trade and other payables | 21 | 64,449 | 204,818
(Increase)/decrease in other assets and liabilities | 15, 18 | (75,651) | 213,557
Cash flows from operations |  | 754,016 | 1,388,746
Capital expenditures | 2 | (503,118) | (615,922)
Proceeds from disposal of fixed assets |  | 35,975 | 22,212
Acquisition of businesses (net of cash) | 10 | (124,817) | (193,685)
Proceeds from disposal of businesses (net of cash) | 11, 19 | 46,228 | (34,694)
(Increase)/Decrease in other financial assets | 21 | 19,230 | (83,231)
Interest received and other finance income | 5 | 36,347 | 26,559
Dividends received | 5 | 6,212 | 24,266
Cash flows used in investing activities |  | (483,943) | (854,495)
Proceeds from issue of bonds, notes and debentures |  | - | -
Repayments of bonds, notes and debentures |  | (279,735) | -
Proceeds from borrowings |  | 1,020,713 | 1,226,532
Repayments of borrowings |  | (805,764) | (1,380,177)
Interest paid and other finance expense | 5 | (61,371) | (23,896)
Dividends paid to owners of parent | 20 | (229,485) | (191,236)
Dividends paid to non-controlling interest | 20 | (38,894) | (27,054)
Transactions with non-controlling interest |  | - | -
Net issue / repurchase of treasury shares |  | - | 16,576
Other changes in equity |  | - | (1)
Cash flows used in financing activities |  | (394,536) | (379,256)
Currency translation differences relating to cash and cash equivalents |  | (66,256) | 72,802
Increase/(decrease) in cash and cash equivalents |  | (190,719) | 227,797
Cash and cash equivalents at the beginning of the year |  | 595,244 | 367,447
Cash and cash equivalents at the end of the year |  | 412,977 | 595,244
Change in Cash and cash equivalents |  | (182,267) | 227,797
Change in cash and cash equivalents classified as asset held for sale |  | - | -
Change in Overdraft |  | (8,452) | -
Increase/(decrease) in cash and cash equivalents |  | (190,719) | 227,797

|  | Consolidated Financial Statements 2023 | 9

notes to the consolidated financial statements – material Accounting policies and other explanatory information

This section describes the basis of preparation of the consolidated financial statements and the Group’s applicable accounting policies. Accounting policies, critical accounting estimates and judgements that are specific to a given area are set out in detail in the relevant notes. This section also provides a brief summary of new accounting standards, amendments and interpretations that have already been adopted in the current financial year or will be adopted as those will be in force in the forthcoming years.

1. Material accounting policies and other explanatory information

Basis of preparation

These consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board and interpretations issued by IFRS Interpretations Committee as adopted by the EU and effective on 31 December 2023.

The consolidated financial statements are prepared on a going concern basis. For the purposes of the application of the historical cost convention, the consolidated financial statements treat the Company as having come into existence as of 1 October 1991, at the carrying values of assets and liabilities determined at that date, subject to the IFRS adjustments.

Due to the technical limitations inherent to the block-tagging of the consolidated financial statements according to the European single electronic format, the content of certain tags of the notes may not be rendered identically to the accompanying consolidated financial statements.

Principles of consolidation

The consolidated financial statements as of and for the nine-month period ended 31 December 2023 comprise the accounts of the MOL Plc. and the subsidiaries that it controls together with the Group’s attributable share of the results of associates and joint ventures. MOL Plc. and its subsidiaries are collectively referred to as the ‘Group’.

Control is evidenced when the Group is exposed, or has rights, to variable returns from its involvement with a company, and has the ability to affect those returns through its power over the company. Power over an entity means having existing rights to direct its relevant activities. The relevant activities of a company are those activities which significantly affect its returns.

Where the Group has a long-term equity interest in an undertaking and over which it has the power to exercise significant influence, the Group applies the equity method.

An arrangement is under joint control when the decisions about its relevant activities require the unanimous consent of the parties sharing the control of the arrangements.

If the Company has rights to the assets and obligations for the liabilities relating to the arrangement, then the arrangement is qualified as a joint operation. The Company’s interests in a joint operation are accounted for by recognising its relative share of assets, liabilities, income and expenses of the arrangement, combining with similar items in the consolidated financial statements on a line-by-line basis.

If the Company has rights to the net assets of the arrangement, then the arrangement is qualified as a joint venture. The Group’s investments in joint ventures are accounted for using the equity method of accounting.

In case of participation interest in joint operating agreements which do not establish joint control, the Group analyses the parties’ rights to the assets and obligations for the liabilities relating to the arrangement and the parties’ rights to the corresponding revenues and obligations for the corresponding expenses. Given that the joint arrangement is not structured through a separate vehicle, the Group therefore recognises the operations proportionately, based on its share in revenue, costs, assets, and liabilities relating to the joint operation.

New and amended standards adopted by the Group

The Group has applied the following standards and amendments for the first time for the annual reporting period commencing 1 January 2023:

• IFRS 17 Insurance Contracts; including Amendments to IFRS 17

• Amendments to IAS 1 Presentation of Financial Statements and IFRS Practice Statement 2

• Amendments to IAS 8 Accounting policies, Changes in Accounting Estimates and Errors

• Amendments to IAS 12 Income Taxes

Issued but not yet effective International Financial Reporting Standards and Amendments are listed in Appendix I.

|  | Consolidated Financial Statements 2023 | 10

The above-mentioned amendments do not impact significantly the Group’s consolidated results, financial position or disclosures.

Amendments in accounting policies

Voluntary amendments

Entities within the group with several external customers calculate the expected credit loss on trade receivables as the average of yearly historical loss rates of last three years multiplied by the forward-looking element. The forward-looking element is based on robust positive correlation between banking sector credit losses and one year lag of unemployment rate instead of the previously applied robust negative correlation between banking sector credit losses and two years’ lags of real GDP growth.

The Group applies IAS 12 to income taxes arising from tax law enacted or substantively enacted to implement the Pillar Two model rules published by the Organisation for Economic Co-operation and Development (OECD), including tax law that implements qualified domestic minimum top-up taxes. In accordance with paragraph 4A of IAS 12 the Group applies the temporary exception and neither recognise nor disclose information about deferred tax assets and liabilities related to Pillar Two income taxes.

Issued but not yet effective International Financial Reporting Standards

Issued but not yet effective International Financial Reporting Standards are disclosed in the Appendix I.

Summary of material accounting policies

Functional and presentation currency

Based on the economic substance of the underlying events and circumstances the functional currency of the parent company and the presentation currency of the Group have been determined to be the Hungarian Forint (HUF).

Financial statement data is presented in millions of HUF, rounded to the nearest million HUF.

Croatia introduced the euro on 1 January 2023. The Group applies the translational procedures applicable to the new functional currency of the Croatian subsidiaries prospectively from the date of change using the conversion rate between the euro and the Croatian kuna at 7.53450 kuna per 1 euro set in the legal acts adopted by the Council of the European Union. The resulting translated amounts for non‑monetary items will be treated as their historical cost. Exchange differences arising from the translation of a foreign operation previously recognised in other comprehensive income will not be reclassified from equity to profit or loss until the recycling criteria is met.

Foreign Currency Transactions

Foreign currency transactions are recorded initially at the rate of exchange at the date of the transaction, except for advanced payments for non-monetary items for which the date of transaction is the date of initial recognition of the prepayment. Exchange differences arising when monetary items are settled or when monetary items are translated at rates different from those at which they were translated when initially recognised or in previous financial statements are reported in profit or loss in the period. Monetary items, goodwill and fair value adjustments arising on the acquisition of a foreign operation denominated in foreign currencies are retranslated at exchange rate ruling at the balance sheet date.

Foreign exchange differences on monetary items with a foreign operation are recognised in other comprehensive income if settlement of these items is neither planned nor likely to occur in the foreseeable future.

Financial statements of foreign entities are translated at year-end exchange rates with respect to the statement of financial position and at the weighted average exchange rates for the year with respect to the statement of profit or loss. All resulting translation differences are included in the translation reserve in other comprehensive income.

Currency translation differences are recycled to profit or loss when disposal or partial disposal of the given foreign operation occurs.

Discontinued operation

Discontinued operations are excluded from the results of continuing operations and are presented as a single amount as profit or loss after-tax from discontinued operations in the statement of profit or loss.

Additional disclosures are provided in Note 19. All other notes to the financial statements include amounts for continuing operations, unless indicated otherwise.

Significant accounting estimates and judgements

In the process of applying the accounting policies, management has made certain judgements that have significant effect on the amounts recognised in the financial statements which are set out in detail in the respective notes.

|  | Consolidated Financial Statements 2023 | 11

The preparation of consolidated financial statements in conformity with IFRS requires the use of estimates and assumptions that affect the amounts reported in the financial statements and the Notes thereto. Although these estimates are based on the management’s best knowledge of current events and actions, actual results may differ from those estimates. These are set out in detail in the respective notes.

In 2023, the Covid-19 pandemic had no significant impact on operations and financial results, and it became part of the usual business.

Effect of climate-related matters and energy transition on the significant accounting estimates

As part of the Enterprise Risk Management framework MOL Group identified climate-related matters as a material risk. MOL Group’s long-term transformational strategy was created assessing these risks and represents how MOL Group plans to mitigate the low-carbon economy transition risks. In addition, MOL Group’s strategy was revised in line with the European Union’s proposed Fit for 55 package in 2021 and the Board and its committees are continuously monitoring progress against climate related targets. For more information on MOL Group’s actions and plans regarding climate-related matters(including 2030 targets) please refer to the respective parts of the Integrated Annual Report of the Group. MOL has considered the future effects of MOL’s own strategic decisions and commitments on having its portfolio adhered to the energy transition targets (including emission targets), the short- and long-term effects of climate change and energy transition in preparing the consolidated financial statements. They are subject to uncertainty and they may have significant impacts on the assets and liabilities currently reported by the Group. Based on the management’s analysis on climate related matters and MOL Group’s 2030+ strategy, the risks associated with climate change and energy transition will not have a material impact on the Group’s going concern assessment neither in the short-term nor in the foreseeable future.

The Fit for 55 package refers to the EU legislative package that represents the EU’s target of reducing net greenhouse gas emissions by at least 55% by 2030 compared to 1990 levels. It covers several areas and sets a wide range of targets for the EU’s 2030 climate and energy framework such as: EU Emission trading system(EU ETS), EU wide renewable energy targets, including a specific target for renewables share in the transport sector (REDII &REDIII), renewable hydrogen targets, energy efficiency targets. From the regulatory background the EU ETS system has the most significant effect on the financial statement The EU ETS system sets a limit on the total amount of greenhouse gases that can be emitted by entities under the system. Companies whose emissions surpass the regulated level have the option of purchasing additional quotas. As the Group operation can be covered only partially by the free allocation, thus quota purchase is needed. MOL Group can ensure this shortfall with forward purchases throughout the issue year, while taking into account the quarterly updated needs. This mechanism ensures efficient risk management of quota prices and an optimal financing structure. The purchasing mechanism followed by MOL Group ensures that large shifts in quota prices have a more limited impact on the Group’s financial performance. During the year, a provision is also booked to cover the needs of the upcoming year. MOL Group purchases the CO2 quota distributed during the year to achieve that the average purchase price be on the level of the average CO2 price. For more information and accounting policy on the emission rights please refer to Note 9/c and Note 16.

When making assumptions and judgements affecting the amounts reported in the financial statement, the Group uses the latest available and reliable information. The significant accounting estimates affecting the amounts reported in the financial statements are prepared in line with the long-term strategy of the Group, which represents management’s best estimate of the possible outcomes and risks associated with the transition to a low carbon world. MOL Group acknowledges that the energy transition will occur, however the estimates of the impact of climate change and energy transformation on the Group's operations are subject to very high uncertainty and may change significantly in subsequent periods depending on the pace of the transition. MOL Group expects climate-related matters to have an impact on the long-term accounting estimates and incorporated these factors to the financial statements. Estimation inputs like: Brent oil prices, TTF gas prices CO2 quota price assumptions and discount rates take into consideration the effects of the climate related matters and are in line with external information and represent the effect of climate related expectations on the financial statement. In MOL’s view CO2 costs and price assumptions represent best the effects of climate change on the financial statements, as quotas are traded on an active market. Therefore, it is included as a risk element in the sensitivity analysis performed on the Clean CCS profit from operation, please refer to Note 20/b.

Significant accounting estimates that could be affected by the climate change and energy transition are:

Recoverability of assets: Impairment models are generally based on a going concern assumption, usually based on 3 years time series of business plan figures approved by the Board of Directors, further years are estimated assuming a growth rate according to relevant inflation rate. Any further initiative is subject to very high level of uncertainty, and may change significantly in subsequent periods depending on several factors. For more information on the impairment of assets please refer to Note 9.

Useful lives of tangible and intangible assets: The useful life of PPE is reviewed at least once a year prior to the annual planning process and if the expectations differ significantly from the prior estimations then the amount of depreciation relating to the current and the future periods must be adjusted. The useful life of assets are determined based on the currently valid regulations and obligations..For more information please refer to Note 9

Provision for future decommissioning liabilities: The value of liabilities required for calculation of the current value of provision is determined on the basis of estimated costs of works required for settlement of field suspension and field abandonment liabilities planned in full technical scope for each field The economy calculations and the plans for future exploitation and utilization of fields incorporate information about the time when site restoration can be expectedly started and ended in the field. The estimation is in line with currently valid regulation and obligations. For more information on the decommissioning provisions and provisions related to climate change please refer to Note 16.

|  | Consolidated Financial Statements 2023 | 12

Significant impact on operation

a) Russia – Ukraine conflict

The economic consequences of Russia’s invasion of Ukraine that commenced on 24 February 2022 may affect MOL Group. Management is continuously investigating and assessing the possible effects of the current geopolitical situation, international sanctions and other possible limitations on the supply chain and business activities. MOL Group has made decisions in its credit policy to minimise the exposure.

MOL Group is exposed to Russia mainly through BaiTex Llc. and related receivables. Payments made by BaiTex Llc. towards MOL Group in 2022 and 2023 are held on a restricted bank account as a result of counter-sanctions of Russia, therefore the amount is not available for general use. MOL Group impaired all the investment value, receivables, and the restricted bank account balance in 2022 and 2023. MOL Group exposure to Ukraine is not material.

MOL Group’s refining business is exposed to the physical flow of crude oil through the transportation system in Russia and Ukraine. The physical flow of the crude oil from Russia has been periodically disrupted due to war damage on Ukrainian energy infrastructure. An alternative supply route from the Mediterranean Sea, via Croatia, exists however that can supply MOL Group refineries in Hungary and Slovakia with seaborne cargoes of crude oil. The European Union has imposed a partial embargo on Russian crude oil imports as of 5 December 2022 and on Russian petroleum product imports as of 5 February 2023. At the same time, a ban on the export of petroleum products obtained from Russian crude oil has been put in place. The regulations however allow for the continued import of Russian crude oil by pipeline, including to Hungary and Slovakia, as well as the continued export of petroleum products obtained from Russian crude a) from Slovakia to the Czech Republic until 5 December 2024 and b) from Hungary and Slovakia indefinitely as long as the percentage of exports do not exceed the percentage of crude of non-Russian origin if blended with Russian crude as refinery feedstock.

b) Waste management concession

MOL was announced as a winner for the Hungarian state concession tender covering municipal waste management services. The concession agreement covers a period of 35 years with a commencement date of July 1, 2023. According to the agreement, MOL is responsible for the collection of close to 5 million tonnes of municipal solid waste, ensures its treatment and will make related investments.

c) Carbon dioxide quota tax

New carbon dioxide quota tax has been introduced for operators of an installation receiving a significant free allocation of CO2 emission rights for the tax year starting after 31 December 2022. The tax is based on the amount of carbon dioxide emissions in tons. The tax rate is 40 EUR/tCO2, equivalent in Hungarian forints. Qualifies as an operator of an installation receiving a significant free allocation if the following conditions are met:

- if the installation received free allocation rights equal to at least 50% of its average total verified carbon dioxide emissions in the four years preceding the current year and;

- whose annual average carbon dioxide emissions during this period exceeded 10 000 tons

The Government Decree has been amended and the following conditions must be met after 7 October 2023:

- does the operators of an installation have a reference value installation or a process emissions installation? If yes, the combined emission level of these installations (based on data for the three years preceding the reference year) exceed 25,000 tons;

- did the operators of an installation received a free carbon quota? If yes, it is necessary to review whether the amount of carbon quota received free of charge in the year preceding the year in question was equal or greater than 50% of the average carbon dioxide emissions in the three preceding years

The amending regulation reduces the tax rate from €40/tCO2 to €36/tCO2

d) Windfall Taxes

As a result of the Russian-Ukrainian conflict and the emerging energy crisis, the Hungarian government and the EU have introduced a number of significant measures, which also affect MOL Group.

· Mining royalty

The Hungarian oil and gas royalty rates were changed significantly in 2022; the fixed parts of the rates were tripled in those categories in which the majority of MOL's production takes place. Final effective rates include unchanged adjusting elements dependent from the spot Brent and TTF prices. The unit values that are determined by Government Decree to be used for calculating the royalty base include minimum thresholds for 2023 and 2024. Production to be taken into account for the tax base in the period concerned cannot be lower than the 2021 level. In the event of a technical impediment or major event impacting production, approval is to be requested from the Mining Authority for the lower production. If the lower production is unjustified, the Mining Authority will still impose the additional mining royalty.

|  | Consolidated Financial Statements 2023 | 13

The extra profit tax rules provided for the possibility of contracting in order to reduce the mining royalty. Accordingly, MOL Plc. has made commitments exceeding the production volume. This resulted in a significant reduction in mining royalty from September 2023. If the commitment in any category is not met, the total volume committed in that category will be paid as a penalty under the previous, less favourable rules.

· Extra profit tax on Brent-Ural spread

From 1 January 2022, the Hungarian government has introduced a Brent-Ural spread-based tax, which tax rate is 25% of the Brent-Ural spread on Ural type crude oil procurement. According to the amendment to the extra profit tax regulation issued by the Hungarian Government on 30 July 2022 effective from 1 August 2022 the Brent-Ural spread based extra profit tax rate on Ural type crude oil procurement was modified to 40%. According to the amendment to the extra profit tax regulation issued by the Hungarian Government on 18 December 2022 the Brent-Ural spread based extra profit tax rate on Ural type crude oil procurement has been modified to 95%. Prospectively from 1 April 2023, the tax based on the Brent-Ural spread would be 95% of the spread minus 7.5 USD. As a result, the tax base significantly reduced in the rest of 2023. At the same time, a net revenue based tax was introduced based on the 2022 net sales revenues with a tax rate of 2.8% and from 2024 the tax rate will be reduced to 1%.

· Retail tax

The Hungarian Government modified the retail tax effective from 1 July 2022 due to which 80% of the 2021 tax had to be paid as a one-off additional tax in 2022. Retail tax rate 3% on net sales of fuel above HUF 500 million, includes retail vehicle and motorcycle fuel, refrigerants and lubricants , but excludes the domestic heating fuel and bottled gas. For 2023, tax rate per revenue ranges increase: in the range of HUF 500 million – HUF 30,000 million the rate will increase from 0.1% to 0.15%, in the range of HUF 30,000 million – HUF 100,000 million the rate will increase from 0.4% to 1%, above HUF 100,000 million the rate will increase from 2.7% to 4.1%. From 2024, the tax rate for the highest revenue rate will be increased to 4.5% but decreased to 3% on fuel.

· Industrial safety related contribution

Certain operators of plants dealing with hazardous materials are obliged to pay industrial safety contribution. The amount of the contribution is 0,042% of prior year’s net revenue.

In the statement of profit or loss the mining royalty, the extra profit tax, retail tax, the industrial safety related contribution are recorded in other operating expenses. The windfall taxes were considered when assessing the assets recoverability.

|  | Consolidated Financial Statements 2023 | 14

Results for the year

This section explains the results and performance of the Group for the financial years ended 31 December 2023 and 31 December 2022. Disclosures are following the structure of statement of profit or loss and provide information on segmental data, total operating income, total operating expense, finance result, share of after-tax results of associates and joint ventures. For taxation, share-based payments, joint ventures and associates, statement of financial position disclosures are also provided in this section.

2. Segmental information

Accounting policies

For management purposes the Group is organised into five major operating business units: Upstream, Downstream, Consumer Services, Gas Midstream and Corporate and other segments. The business units are the basis upon which the Group reports its segment information to the management which is responsible for allocating business resources and assessing performance of the operating segments.

The major segments identified by MOL Group are the following:

Upstream segment consists of oil and gas exploration and production assets and the related activities.

Downstream segment consists of different business activities that are part of an integrated value chain. This value chain turns crude oil into a range of refined products, which are moved and marketed for household, industrial and transport use. The products include, among others, gasoline, diesel, heating oil, aviation fuel, lubricants, bitumen, sulphur and liquefied petroleum gas (LPG).

Consumer Services segment is a leading fuel retail operation in the CEE region, with a 10 million retail customer base and one million daily transactions. MOL Group owns numerous service companies covering oil field services, asset operations and maintenance management.

Gas Midstream segment includes our sole transmission system related activity in the nearly 6,000 km long high-pressure natural gas transmission pipeline system in Hungary.

Corporate and other segment includes all other business units of MOL Group including waste management. MOL Group does not provide separately information about waste management as it does meet the criteria of IFRS 8 reportable segments.

2023 | Upstream | Downstream | Consumer Services | Gas Midstream | Corporate and other | Inter-segment transfers | Total
HUF million | HUF million | HUF million | HUF million | HUF million | HUF million | HUF million
Net Revenue |  |  |  |  |  |  |
External sales | 121,709 | 4,802,543 | 3,620,427 | 134,223 | 229,597 | - | 8,908,499
Inter-segment transfers | 602,225 | 2,408,161 | 14,357 | 7,237 | 279,307 | (3,311,287) | -
Total revenue | 723,934 | 7,210,704 | 3,634,784 | 141,460 | 508,904 | (3,311,287) | 8,908,499
Profit/(loss) from operation | 238,659 | 329,134 | 121,994 | 76,368 | (104,492) | 15,912 | 677,575
Depreciation, depletion, amortisation and impairment | 126,823 | 161,105 | 122,794 | 17,393 | 44,525 | (956) | 471,684
From this: impairment losses recognised in statement of profit or loss (incl. dry-holes) | 8,967 | 2,947 | 62,728 | 583 | 5,987 | - | 81,212
From this: reversal of impairment recognised in statement of profit or loss | 3,414 | 182 | 1,583 | - | 2,031 | - | 7,210
EBITDA | 365,482 | 490,239 | 244,788 | 93,761 | (59,967) | 14,956 | 1,149,259

|  | Consolidated Financial Statements 2023 | 15

2022 | Upstream | Downstream | Consumer Services | Gas Midstream | Corporate and other | Inter-segment transfers | Total
HUF million | HUF million | HUF million | HUF million | HUF million | HUF million | HUF million
Net Revenue |  |  |  |  |  |  |
External sales | 204,594 | 6,167,891 | 3,242,675 | 208,564 | 42,490 | 1,949 | 9,868,163
Inter-segment transfers | 1,026,546 | 2,898,260 | 12,593 | 5,815 | 263,786 | (4,207,000) | -
Total revenue | 1,231,140 | 9,066,151 | 3,255,268 | 214,379 | 306,276 | (4,205,051) | 9,868,163
Profit/(loss) from operation | 613,917 | 636,070 | 76,573 | 44,310 | (99,694) | (12,064) | 1,259,112
Depreciation, depletion, amortisation and impairment | 213,570 | 168,724 | 44,671 | 16,726 | 33,343 | (1,501) | 475,533
From this: impairment losses recognised in statement of profit or loss (incl. dry-holes) | 51,489 | 10,681 | 2,027 | 488 | 711 | (400) | 64,996
From this: reversal of impairment recognised in statement of profit or loss | 52,191 | 214 | 150 | - | 1,945 | - | 54,500
EBITDA | 827,487 | 804,794 | 121,244 | 61,036 | (66,351) | (13,565) | 1,734,645

2023 | Upstream | Downstream | Consumer Services | Gas Midstream | Corporate and other | Inter-segment transfers | Total
HUF million | HUF million | HUF million | HUF million | HUF million | HUF million | HUF million
Other segment information |  |  |  |  |  |  |
Capital expenditure: | 135,480 | 337,665 | 64,808 | 13,462 | 79,584 | - | 630,999
Property, plant and equipment | 120,634 | 231,110 | 59,486 | 11,284 | 59,525 | - | 482,039
Intangible assets | 14,846 | 106,555 | 5,322 | 2,178 | 20,059 | - | 148,960
Provisions made and used during the year and revision of previous estimates | (35,475) | 11,745 | (996) | (187) | (3,184) | 1,639 | (26,458)
NON-CURRENT ASSETS |  |  |  |  |  |  |
Property, plant and equipment | 837,873 | 1,786,219 | 808,603 | 245,918 | 357,345 | (38,157) | 3,997,801
Intangible assets | 233,998 | 107,981 | 114,413 | 4,077 | 77,834 | (4,374) | 533,929
Investments in associates and joint ventures | 173,951 | 12,865 | - | - | 17,371 | - | 204,187

2022 | Upstream | Downstream | Consumer Services | Gas Midstream | Corporate and other | Inter-segment transfers | Total
HUF million | HUF million | HUF million | HUF million | HUF million | HUF million | HUF million
Other segment information |  |  |  |  |  |  |
Capital expenditure: | 156,375 | 342,916 | 67,630 | 13,694 | 103,163 | 227 | 684,005
Property, plant and equipment | 141,561 | 281,287 | 57,687 | 11,748 | 74,540 | 227 | 567,050
Intangible assets | 14,814 | 61,629 | 9,943 | 1,946 | 28,623 | - | 116,955
Provisions made and used during the year and revision of previous estimates | (12,623) | 38,579 | (494) | 1,125 | 1,066 | 130 | 27,783
NON-CURRENT ASSETS |  |  |  |  |  |  |
Property, plant and equipment | 878,870 | 1,726,376 | 722,575 | 247,861 | 278,693 | (36,496) | 3,817,879
Intangible assets | 260,111 | 103,267 | 125,947 | 4,306 | 61,373 | (2,416) | 552,588
Investments in associates and joint ventures | 176,197 | 12,320 | - | - | 2,288 | - | 190,805

The operating profit of the segments includes the profit arising both from external sales and transfers to other business segments. Corporate and other segment provides maintenance, financing and other services to the business segments. The internal transfer prices applied are based on prevailing market prices. Divisional figures contain the results of the fully consolidated subsidiaries engaged in the respective divisions. In the downstream, the capital expenditure of Intangible assets increased significantly due to purchases of CO2 quota (HUF + 30.5 million compared to 2022).

The differences between the capital expenditures presented above and the additions in the intangible and tangible movement schedule are due to the additions of emission rights, and non-cash items such as capitalisation of field abandonment provisions, and assets received free of charge.

|  | Consolidated Financial Statements 2023 | 16

a) Assets by geographical areas

2023 | Intangible assets | Property, plant and equipment | Investments in associates and joint ventures | Other non-current assets
(Note 9) | (Note 9) | (Note 6) | (Note 13)
HUF million | HUF million | HUF million | HUF million
Hungary | 176,819 | 1,755,639 | 28,827 | 14,409
Croatia | 73,487 | 714,706 | 1,484 | 7,763
Slovakia | 15,414 | 535,276 | 6,324 | 3,012
Azerbaijan | 181,450 | 410,790 | - | -
Rest of European Union | 72,064 | 475,641 | - | 44,190
Rest of Europe | 1,186 | 60,785 | - | 54
Rest of the World | 5,149 | 44,964 | 167,552 | 2,567
Total | 525,569 | 3,997,801 | 204,187 | 71,995

2022 | Intangible assets | Property, plant and equipment | Investments in associates and joint ventures | Other non-current assets
(Note 9) | (Note 9) | (Note 6) | (Note 13)
HUF million | HUF million | HUF million | HUF million
Hungary | 159,106 | 1,562,551 | 8,418 | 21,245
Croatia | 71,329 | 726,476 | 1,477 | 10,408
Slovakia | 16,064 | 581,505 | 6,200 | 3,429
Azerbaijan | 210,927 | 445,859 | 977 | -
Rest of European Union | 83,680 | 391,606 | - | 50,473
Rest of Europe | 1,407 | 61,986 | - | -
Rest of the World | 10,075 | 47,896 | 173,733 | -
Total | 552,588 | 3,817,879 | 190,805 | 85,555

|  | Consolidated Financial Statements 2023 | 17

3. Total operating income

Accounting policies

Net sales

IFRS 15 established a five-step model to account for revenue arising from contracts with customers and requires that revenue to be recognised at an amount that reflects the consideration to which the Group expects to be entitled in exchange for transferring goods or services to a customer. Revenue is recognised when it is probable that the economic benefits associated with a transaction will flow to the enterprise and the amount of the revenue can be measured reliably. Sales are recognised when control of the goods or services are transferred to the customer.

The Group has generally concluded that:

• it satisfies performance obligations at a point in time, because control is transferred to the customer on delivery of the goods. Under IFRS, the transfer of risk according to Incoterms rules applied by the Group is not a sufficient criterion for recognizing revenue, because IFRS 15 Revenue from Contracts with Customers is based on the control concept. For performance obligations to be satisfied at a particular point in time, the Group has to determine at which point in time the customer obtains control of the promised goods. The transfer of significant risk and rewards of ownership of an asset – which equals the transfer of risk as defined in the Incoterms rules – is only one indicator to consider in determining when control has been transferred. The Group may apply different Incoterms rules to different transactions (nearly all known Incoterms rules are used by the Group), thus the transfer of control shall be assessed individually in each case.

• it is the principal in its revenue arrangements, because it typically controls the goods or services before transferring them to customers (except to those cases, which are explicitly stated in the Consolidated Financial Statements);

• significant financing component does not exist, because the period between the transfer of the promised good or service to the customer and when the customer pays for that good or service is expected to be one year or less at contract inception.

Lease income

Lease income from operating lease is recognised on a straight-line basis over the lease term.

Sales taxes

Revenues, expenses and assets are recognised net of the amount of sales tax (e.g. excise duty), except:

- when the sales tax incurred on a purchase of assets or services is not recoverable from the taxation authority (e.g. if the entity is not subject of sales tax), in which case, the sales tax is recognised as part of the cost of acquisition of the asset or as part of the expense item, as applicable

- receivables and payables that are stated with the amount of sales tax included.

The net amount of sales tax recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the consolidated statement of financial position.

Other operating income

Other operating income is recognised on the same accounting policy basis as the net sales.

a) Sales by product lines

| 2023 | 2022
| HUF million | HUF million
Sales of crude oil and oil products | 6,658,446 | 7,194,127
Sales of petrochemical products | 911,249 | 1,174,808
Sales of services | 440,770 | 264,514
Sales of natural gas and gas products | 381,114 | 768,823
Sales of retail shop products | 310,438 | 240,782
Sales of other products | 206,482 | 225,109
Total | 8,908,499 | 9,868,163

Decrease in the Group’s sales revenue is due to the decrease in macroeconomic environment, elevated price environment in base due to sanctions on Russia which partly offset by higher diesel sales volumes in Slovnaft and in INA.

|  | Consolidated Financial Statements 2023 | 18

b) Sales by geographical area

| 2023 | 2022
| HUF million | HUF million
Hungary | 2,512,546 | 2,817,008
Croatia | 1,071,199 | 1,278,342
Slovakia | 1,025,388 | 1,148,028
Poland | 818,150 | 414,431
Czech Republic | 622,897 | 732,008
Romania | 581,143 | 602,369
Italy | 494,954 | 748,327
Austria | 325,856 | 426,524
Slovenia | 270,262 | 169,175
Serbia | 239,176 | 293,361
Bosnia-Herzegovina | 204,647 | 252,820
Germany | 174,863 | 203,850
Switzerland | 137,964 | 126,591
United Kingdom | 107,966 | 191,543
The Netherlands | 47,760 | 70,367
Rest of Central-Eastern Europe | 57,334 | 70,338
Rest of Europe | 130,225 | 166,807
Rest of the World | 86,169 | 156,274
Total | 8,908,499 | 9,868,163

The Group has no single major customer the revenue from which would exceed 10% of the total net sales revenues in 2023 (neither in 2022).

The sales revenue is split by the method of the customer's registered office.

Based on the IFRS 15 Revenue from Contracts with Customers standard agent-principal consideration, excise duties and similar levies or fees are recognised with net presentation in the financial statements as MOL and its companies act as an „agent” and collects the excise duties from third parties to the state. Total amount of the excise duty collected from customers was HUF 1,778,682 million in 2023 and HUF 1,666,186 million in 2022.

c) Other operating income

| 2023 | 2022
| HUF million | HUF million
Penalties, late payment interest, compensation received | 11,170 | 5,879
Gain on sales of intangibles, property, plant and equipment | 9,488 | 10,809
Net gain of non-hedge commodity price transactions* | 9,011 | -
Allowances and subsidies received | 5,871 | 11,704
Reimbursement of legal costs | - | 2,276
Gain from the sale of companies | 277 | -
Income from valuation of emission quotas | - | -
Other | 21,720 | 13,048
Total | 57,537 | 43,716
* The net result of the non-hedge commodity price transactions was loss in prior year (see Note 4) |  |

The Other operating income includes Penalties, late payment interest, compensation received increased by HUF 5,291 million compared to 31 December 2022. Penalties and compensation received involves two significant items in current year: one related to penalty of HUF 1,885 million received by MOL Plc. due to non-fulfilment of benzene deliveries, and one related to compensation of HUF 3,066 million received by INA d.d. for damages of Ivana-D offshore gas production platform.

|  | Consolidated Financial Statements 2023 | 19

4. Total operating expenses

Accounting policies

Total operating expense

If specific standards do not regulate, operating expenses are recognised at point in time or through the period basis. When a given transaction is under the scope of specific IFRS transaction it is accounted for in line with those regulations.

The Group has classified payments for leases of low value assets, short-term lease payments and variable lease payments not included in the measurement of lease liability within operating activities.

| 2023 | 2022
| HUF million | HUF million
Raw materials and consumables used | 6,761,197 | 7,458,413
Crude oil purchased | 2,377,141 | 2,806,921
Cost of goods purchased for resale | 2,516,785 | 2,643,273
Non-hydrocarbon-based material | 596,087 | 828,612
Value of material-type services used | 491,351 | 296,134
Other raw materials | 295,410 | 330,222
Utility expenses | 239,574 | 199,895
Purchased bio diesel component | 171,406 | 253,161
Value of inter-mediated services | 73,443 | 100,195
Employee benefits expense | 384,356 | 342,513
Wages and salaries | 271,779 | 242,098
Social security | 52,315 | 46,056
Other employee benefits expense | 60,262 | 54,359
Depreciation, depletion, amortisation and impairment | 471,684 | 475,533
Other operating expenses | 672,547 | 632,864
Taxes and contributions | 191,824 | 44,755
Mining royalties | 168,192 | 227,410
Other | 89,266 | 76,874
Other services | 71,169 | 47,609
Bank charges | 32,169 | 11,458
Rental cost | 22,623 | 21,022
Consultancy fees | 22,311 | 22,392
Advertising expenses | 19,206 | 18,238
Insurance fees | 15,248 | 12,816
Provision for greenhouse gas emission over quota allocated free of charge | 15,037 | 30,274
Cleaning costs | 11,449 | 9,515
Site security costs | 8,139 | 7,630
Contribution in strategic inventory storage | 5,914 | 4,025
Net loss of non-hedge commodity price transactions* | - | 98,846
Change in inventory of finished goods and work in progress | 101,601 | (151,056)
Work performed by the enterprise and capitalised | (102,924) | (105,500)
Total operating expenses | 8,288,461 | 8,652,767
* The net result of the non-hedge commodity price transactions was gain in current year (see Note 3/c) |  |

The extra profit tax rules provided for the possibility of contracting in order to reduce the extra mining royalty. Accordingly, MOL Plc. has made commitments exceeding the production volume. This resulted in a significant reduction in mining royalty from September 2023. If the commitment in any category is not met, the total volume committed in that category will be paid as a penalty under the previous, less favourable rules.

MOL Group considers the mining royalty in the cost of inventory.

Based on the IFRS 15 Revenue from Contracts with Customers standard agent-principal consideration, excise duties and similar levies or fees are recognised with net presentation in the financial statements as MOL and its companies act as an „agent” and collects the excise duties from third parties to the state.

Other item line contains several different types of expenses, which are individually not significant.

Employee benefit expenses

Other employee benefits expenses contain fringe benefits, reimbursement of expenses and severance payments.

|  | Consolidated Financial Statements 2023 | 20

Share-based payments

Certain employees (including directors and managers) of the Group receive remuneration in the form of share-based payment transactions, whereby employees render services in exchange for shares or rights over shares.

Equity-settled transactions

The cost of equity-settled transactions is measured at their fair value at grant date. The fair value is determined by applying generally accepted option pricing models (usually binomial model). In valuing equity-settled transactions, only market conditions are taken into consideration (which is linked to the share price of the parent company).

The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the period in which the performance conditions are fulfilled, ending on the date on which the relevant employees become fully entitled to the award (‘vesting date’). The cumulative expense recognised for equity settled transactions at each reporting date until the vesting date reflects the extent to which the vesting period has expired and the number of awards that, in the opinion of the directors of the Group at that date, based on the best available estimate of the number of equity instruments that will ultimately vest.

The dilutive effect of outstanding options is reflected as additional share dilution in the computation of earnings per share.

Cash-settled transactions

The cost of cash-settled transactions is measured initially at fair value at the grant date using the binomial model. This fair value is expensed over the vesting period with recognition of a corresponding liability. The liability is re-measured at each balance sheet date up to and including the settlement date to fair value with changes therein recognised in the statement of profit or loss.

| 2023 | 2022
| HUF million | HUF million
Absolute Share Value Based Remuneration | (13) | (33)
Relative Market Index Based Remuneration | (11) | 47
Restricted Share Plan | 440 | 156
Short-term Share Ownership Plan | 1,040 | 337
Share-based retirement benefit | 265 | 113
Total cash-settled share-based payment expense | 1,721 | 620
Absolute Share Value Based Remuneration | (277) | (1,185)
Relative Market Index Based Remuneration | (162) | 1,001
Restricted Share Plan | 2,707 | 2,306
Short-term Share Ownership Plan | 864 | 995
Share Incentive scheme for the members of the Board of Directors | 615 | 452
Total equity-settled share-based payment expense | 3,747 | 3,569
Total expense of share-based payment transactions | 5,468 | 4,189

The share-based payments serve as the management’s long-term incentives as an important part of their total remuneration package. They ensure the interest of the top and senior management of MOL Group in the long-term increase of MOL share price and so they serve the strategic interest of the shareholders.

Absolute Share Value Based Remuneration Plan

The Absolute Share Value Based Remuneration Plan is a call option to sell hypothetical MOL shares granted on a past strike price, at a spot price and so realise profit from the difference between these prices. The incentive has the following characteristics:

• Covers a four-year period starting annually, where periods are split into a two-year vesting period (it is not possible to exercise Share Options) and a two-year redeeming period. If unexercised, the Share Option lapses after 31 December of the redeeming period.

• The grants are defined centrally in line with MOL job category.

• The allocation is linked to individual performance.

• Payout is either in the form of providing MOL shares (in Hungary) or in cash payment (outside Hungary).

Payment is upon exercising of option by management. The value of the incentive is the difference between the strike price and a selected spot price for each unit of the entitlement.

In case the Annual General Meeting of MOL Plc. decides on dividend payment after the grant date, the managers, who are entitled to long-term incentives are eligible for a compensation in share equivalent when redeeming the share entitlement. Payment to one manager is the value equal to the dividend payment per share multiplied by the share unit numbers the manager is entitled to. This is paid at redemption.

|  | Consolidated Financial Statements 2023 | 21

Equity-settled share-based payment:

| 2023 | 2022
| Number of shares in conversion option units | Weighted average exercise price | Number of shares in conversion option units | Weighted average exercise price
| number of shares | HUF/share | number of shares | HUF/share
Outstanding at the beginning of the year | 1,695,704 | 2,918 | 5,096,873 | 2,981
Granted during the year | - | - | - | -
Forfeited during the year | (331,080) | 2,918 | (158,256) | 2,973
Exercised during the year | (1,364,624) | 2,918 | (914,214) | 2,918
Expired during the year |  |  | (2,328,699) | 3,052
Outstanding at the end of the year | - | - | 1,695,704 | 2,918
Exercisable at the end of the year | - | - | 1,695,704 | 2,918

Cash-settled share-based payment:

| 2023 | 2022
| Number of shares in conversion option units | Weighted average exercise price | Number of shares in conversion option units | Weighted average exercise price
| number of shares | HUF/share | number of shares | HUF/share
Outstanding at the beginning of the year | 108,306 | 2,918 | 263,578 | 2,987
Granted during the year | - | - | - | -
Forfeited during the year | - | - | (40,000) | 2,985
Exercised during the year | (108,306) | 2,918 | - | -
Expired during the year | - | - | (115,272) | 3,052
Outstanding at the end of the year | - | - | 108,306 | 2,918
Exercisable at the end of the year | - | - | 108,306 | 2,918

Liabilities in respect of share-based payment plans amount to HUF 0 million as at 31 December 2023, all options were exercised during the year. Fair value as of the statement of financial position date has been calculated using the binomial option pricing model.

| 2023 | 2022
Weighted average exercise price (HUF/share) | - | 2,918
Share price as of 31 December (HUF/share) | - | 2,602
Expected volatility based on historical data | - | 0.3613
Expected dividend yield | - | 0.1086
Estimated maturity (years) | - | 1.00
Risk free interest rate | - | 0.1525

Relative Market Index Based Remuneration Incentive for management

The Relative Market Index Based Remuneration Plan is a three-year programme using the Comparative Share Price methodology with following characteristics:

• Programme starts each year on a rolling scheme with a three-year vesting period. Payments are due after the third year.

• Target is the development of MOL’s share price compared to relevant and acknowledged regional and industry specific indicators (the CETOP and MSCI Emerging Markets Energy Index).

• Basis of the evaluation is the average difference in MOL’s year-on-year (12 months) share price performance in comparison to the benchmark indices for three years.

• Payout rates are defined based on the over/underperformance of MOL share price.

• The rate of incentive is influenced by the individual short-term performance.

• Payout is either in the form of providing MOL shares (in Hungary) or in cash payment (outside Hungary).

|  | Consolidated Financial Statements 2023 | 22

Restricted Share Plan for management

From 1 January 2021, the MOL Group established a new share-based payment remuneration plan to supersede Absolute Share Value Based Remuneration and Relative Market Index Based Remuneration programmes: Restricted Share Plan.

The Restricted Share Plan is a three-year incentive programme based on determined corporate and individual performance targets with following characteristics:

• Programme starts each year on a rolling scheme with a three-year vesting period. Payments are due after the third year.

• Target on corporate performance is based on the achievement of business plan for Clean CCS EBITDA.

• Payout rates are defined based on fulfilment of the corporate performance target and individual payout rate which is based on an individual performance.

• Payout is either in the form of providing of MOL shares (in Hungary) or in cash payment (outside Hungary).

• The fair value of the benefit has been determined with reference to the average quoted price of MOL shares at the date of grant of HUF 2,611 per share in 2023 (HUF 2,549 per share in 2022), which is the first trading day of the first year of the programme.

Short-term Share Ownership Incentive for management

Short-term Share Ownership Plan is a one-year programme with the following characteristics:

• Programme starts each year on a rolling scheme with a one-year vesting period. Payments are due in the following year.

• The grants are defined based on participant’s base salary, internal grade and related bonus rate.

• The rate of incentive is influenced by the individual short-term performance during vesting period.

• Payout is in the form of providing MOL shares or in cash payment.

Share Incentive scheme for the members of the Board of Directors

The members of the Board of Directors become entitled to defined annual amount of MOL shares based on the number of days spent in the position. 1,600 shares per month are granted to each director, the Chairman of the Board is entitled to an additional number of 400 shares per month. If not a non-executive director is in charge as the Chairman of the Board, then this additional number of shares should be granted to the non-executive Deputy Chairman. The new incentive system ensures the interest of the Board of Directors in the long-term increase of the MOL share price as 2/3 of the shares vested in the year are under transferring restriction for one year.

According to IFRS 2 – Share-based payment, the incentive qualifies as an equity-settled share-based scheme; therefore, the fair value of the benefit should be expensed during the one-year investing period with a corresponding increase in the equity. The fair value of the benefit has been determined with reference to the average quoted price of MOL shares at the date of grant, which is the first trading day of the year.

| 2023 | 2022
Number of shares vested | 216,000 | 163,200
Share price at the date of grant (HUF/share) | 2,611 | 2,549

Share-based retirement benefit

The MOL Group operates in some Group entities long-term benefit schemes that provide lump sum benefits to all employees at the time of their retirement. As part of the benefit programme employees are entitled to the amount of 8 or 10 MOL Plc. shares after every year of services. The amount of the liability has been determined using the projected unit credit method, based on financial and actuarial variables and assumptions that reflect relevant official statistical data which are in line with those incorporated in the business plan of the Group. The applied MOL Plc. share price is HUF 2,826 as of 31 December 2023, which is the average listed share price.

|  | Consolidated Financial Statements 2023 | 23

5. Finance result

Accounting policies

Foreign exchange gains and losses are aggregated separately on a monthly basis for transactions similar in nature. Foreign exchange gains or losses of each transaction group are aggregated and presented in the statement of profit or loss within finance income and expense.

Non-foreign exchange type items are not aggregated in such manner and presented separately based on the total income/expense for the year.

Finance result | 2023 | 2022
HUF million | HUF million
Interest income | 53,133 | 25,192
Dividend income | 1,666 | 1,997
Foreign exchange gains | 136,022 | 125,745
Other finance income | 4,356 | 11,146
Total finance income | 195,177 | 164,080
Interest expense | 27,765 | 15,279
Unwinding of discount on provisions | 25,157 | 12,057
Foreign exchange losses | 123,778 | 198,045
Other finance expense | 5,951 | 13,031
Total finance expense | 182,651 | 238,412
Net finance expense | (12,526) | 74,332

Interest expense on lease liabilities accounted for in the period is HUF 13,544 million (2022: HUF 4,673 million). Finance income on the net investment in the lease accounted for in the period is HUF 442 million (2022: HUF 382 million). For other information on lease agreements please refer to Note 9/a and Note 20/c. Dividend income relates to equity instruments which are designated upon initial recognition as at fair value through other comprehensive income.

6. Investments in associates and joint ventures

Accounting policies

Statement of financial position

An associate is an entity over which the Group has significant influence, and which is neither a subsidiary nor a joint venture. An arrangement is under joint control when the decisions about its relevant activities require the unanimous consent of the parties sharing the control of the arrangements. Joint arrangements can be joint operation and joint venture. The type of the arrangement should be determined by considering the rights and obligations of the parties arising from the arrangement in the normal course of business. Joint ventures are joint arrangements in which the parties that share control have rights to the net assets of the arrangement.

The Group’s investments in its associates and joint ventures are accounted for using the equity method of accounting. Under the equity method, the investment in the associate is carried at cost plus post acquisition changes in the Group’s share of net assets. Goodwill relating to an undertaking is included in the carrying amount of the investment and is not amortised.

Investments in associates and joint ventures are assessed to determine whether there is any objective evidence of impairment. If there is evidence of impairment the recoverable amount of the investment is determined to identify any impairment loss to be recognised. Where losses were made in previous years, an assessment of the factors is made to determine if any loss may be reversed.

Statement of profit or loss

The statement of profit or loss reflects the share of the results of operations of the associate and joint ventures. Profits and losses resulting from transactions between the Group and the equity accounted undertakings are eliminated to the extent of the interest in the undertaking. Impairment losses on associates and joint ventures for the period is recognised as a reduction on Share of after-tax results of associates and joint ventures line in the Statement of profit or loss.

|  | Consolidated Financial Statements 2023 | 24

Company name | Country | Range of activity | Ownership | Contribution to net income | Net book value of investments
2023 | 2023 | 2022 | 2023 | 2022
% | HUF million | HUF million | HUF million | HUF million
Investment in joint ventures |  |  |  |  |  |  |
BaiTex Llc. / MK Oil and Gas B.V. | Russia / Netherlands | Exploration and production activity / Exploration investment management | 51% | 2,368 | (25,092) | - | -
Terra Mineralna Gnojiva d.o.o. / Petrokemija d.d * | Croatia | Investment management | 27% | - | (2,051) | - | -
ENEOS MOL Synthetic Rubber Zrt. | Hungary | Production of synthetic rubber | 49% | (7,851) | (7,700) | 5 | 959
Rossi Biofuel Plc. | Hungary | Biofuel component production | 25% | 1,619 | 307 | 8,631 | 7,331
Dunai Vízmű Plc. | Hungary | Water production, supply | 33% | 8 | (1,283) | 127 | 118
Datapac Group | Slovakia | IT services | 25% | 28 | 37 | 721 | 725
ITK Holding Plc.*** | Hungary | Mobility and public transport service | - | - | (1,977) | - | -
ALTEO Nyrt | Hungary | Energy supplier | 25% | 1,092 |  | 15,150 |
Mogyoród Koncessziós Kft | Hungary | Exploration and production activity | 49% | 703 |  | 2,312 |
Nagykáta Koncessziós Kft | Hungary | Exploration and production activity | 49% | (5) |  | 2,204 |
Ócsa Koncessziós Kft | Hungary | Exploration and production activity | 49% | 392 |  | 397 |
Other |  |  |  | 66 | 8 | 2 | 9
Investment in associated companies |  |  |  |  |  |
Pearl Petroleum Ltd. | Kurdistan region/Iraq | Exploration of gas | 10% | 8,212 | 8,178 | 167,551 | 173,733
BTC | Cayman Islands | Oil transportation | 9% | (483) | 3,386 | - | 977
Ural Group Limited | Kazakhstan | Exploration and production activity | 28% | (6,447) | (4,039) | - | -
Meroco a.s. | Slovakia | Production of bio-diesel component (FAME) | 25% | 396 | 45 | 3,237 | 2,977
DAC ARENA a.s. | Slovakia | Facility management | 28% | 3 | 4 | 1,500 | 1,563
Messer Slovnaft s.r.o | Slovakia | Production of technical gases | 49% | 84 | 94 | 867 | 936
Plinara d.o.o. Pula ** | Croatia | Distribution and gas trading | 49% | 6 | 140 | 1,029 | 1,070
Plinara Istočne Slavonije d.o.o. za opskrbu plinom ** | Croatia | Distribution nework of gas fuels | 40% | 23 | 457 | 454 | 407
Total |  |  |  | 1,317 | (29,486) | 204,187 | 190,805
* Terra Mineralna investment was reclassified to held for sale assets with closing amount 11,004 HUF million in 2022. |  |
** These investments were reclassified as equity consolidated investment starting at 31.12.2022 |  |  |
*** ITK Holding became consolidated from Q3 2024, HUF 1,888 million loss previously accounted on IC loan has been recognised as gain in line with derecognition form Investment in joint ventures. Contribution to net income HUF 1,103 million (HUF 1,888 million gain offset by HUF -785 million loss from joint ventures).

Joint ventures

MK Oil and Gas B.V.

MOL Group has 51% ownership in MK Oil and Gas B.V. being the sole owner of Baitex Llc., where the activities are carried out through a concession agreement on Baitugan and Yerilkinksy blocks. Joint control exists over MK Oil and Gas B.V. as the relevant activities of the company require unanimous consent of the parties sharing the control of the operation giving the parties right to the net assets of the arrangement. MK Oil and Gas B.V. is primarily involved in the exploration and production of oil and gas through its subsidiary at the Baitugan field. MOL Group impaired all of its assets located in Russia including BaiTex Llc. Please refer to Note 1 a) for further information.

|  | Consolidated Financial Statements 2023 | 25

ENEOS MOL Synthetic Rubber Plc.

The company is governed and treated jointly with 51% of total shares held by ENEOS group and 49% of total shares held by MOL Group. JSR, the former majority shareholder of the company, sold its shares to ENEOS group in 2022. Share transfer transaction between JSR and ENEOS group was closed in April 2022 when ENEOS Materials Corporation became the 51% owner. As of May 1st 2022 the company name changed from JSR MOL to ENEOS MOL Synthetic Rubber Ltd. The transaction did not affect the everyday operation of the Tiszaújváros plant, where the company manufactures synthetic rubber.

Rossi Biofuel Plc.

MOL Group has minority ownership in Rossi Biofuel Plc. and it has joint control over the company. The core activity of Rossi Biofuel is biodiesel production from fresh vegetable oil and used cooking oil. This activity is carried out on the basis of IPPC Permit. The core activity of Rossi Biofuel is biodiesel production from fresh vegetable oil and used cooking oil. This activity is carried out on the basis of IPPC Permit.

Alteo Plc.

MOL Group acquired 24,607% ownership in Alteo Plc. at Q1 2023 (4.079% for 3,040 huf/share, 20.525% for 2,872 huf/share). The acquisition is in line with MOL Plc.'s 2030 strategy, which aims to increase its presence in the green market. Alteo has a wide portfolio, which includes 69 MW of renewable, mainly wind and solar energy capacity. Alteo also provides operation and maintenance services to power plants and also active in energy trading, waste management and e-mobility.

Terra mineralna gnojiva d.o.o.

INA d.d. had 50% ownership in the joint venture company, Terra mineralna gnojiva d.o.o., which owns 54% shareholder interests of and respective management rights over Petrokemija d.d., a mineral fertilizer producing company in Croatia. In 2022 the Group is committed to sell Terra. Conditions had to be classified as held for sale were met, it was classified as asset held for sale. The contract was signed on 10.11.2022. The effect of the sale was disclosed in the income from associated.

|  | Consolidated Financial Statements 2023 | 26

| BaiTex Llc. / MK Oil and Gas B.V. | Rossi Biofuel Zrt.
| 2023 | 2022 | 2023 | 2022
| HUF million | HUF million | HUF million | HUF million
The joint venture’s statement of financial position: |  |  |  |
Non-current assets | 33,574 | 47,085 | 35,298 | 36,907
Current assets | 17,259 | 9,345 | 28,746 | 33,683
Non-current liabilities | 8,627 | 24,472 | 12,594 | 11,472
Current liabilities | 10,462 | 9,322 | 16,927 | 29,794
Net assets | 31,744 | 22,636 | 34,523 | 29,324
Proportion of the Group's ownership at year end | 51% | 51% | 25% | 25%
Group's share of assets | 16,189 | 11,544 | 8,631 | 7,331
Fair value adjustment | 952 | 2,238 | - | -
Impairment | (17,141) | (13,782) | - | -
Carrying amount of the investment | - | - | 8,631 | 7,331
The joint venture’s statement of profit or loss: |  |  |  |
Net revenue | 57,471 | 73,960 | 91,805 | 135,956
Profit/(loss) from operations | 26,120 | (19,473) | 1,086 | 1,768
Net income attributable to equity holders | 15,164 | (20,023) | 6,477 | 1,227
Group's share of reported profit/(loss) for the year | 7,734 | (10,212) | 1,619 | 307
Fair value adjustment P&L impact | (790) | (1,221) | - | -
Inventory consolidation P&L impact | (6) | 456 | - | -
Impairment | (4,570) | (14,115) | - | -
Group's share of profit/(loss) for the year after consolidation | 2,368 | (25,092) | 1,619 | 307
| ALTEO Nyrt | ENEOS MOL Synthetic Rubber (EMSR) Zrt.
| 2023 | 2022 | 2023 | 2022
| HUF million | HUF million | HUF million | HUF million
The joint venture’s statement of financial position: |  |  |  |
Non-current assets | 39,966 | - | 108,654 | 114,259
Current assets | 45,104 | - | 42,031 | 33,359
Non-current liabilities | 31,671 | - | 134,145 | 115,762
Current liabilities | 18,724 | - | 15,716 | 29,473
Net assets | 34,675 | - | 824 | 2,383
Proportion of the Group's ownership at year end | 25% |  | 49% | 49%
Group's share of assets | 8,531 | - | 404 | 1,168
Goodwill | 6,619 | - | - | -
Inventory consolidation - margin elimination | - | - | (399) | (209)
Carrying amount of the investment | 15,150 | - | 5 | 959
The joint venture’s statement of profit or loss: |  |  |  |
Net revenue | 40,794 | - | 31,967 | 33,640
Profit/(loss) from operations | 6,303 | - | (7,741) | (21,101)
Net income attributable to equity holders | 5,602 | - | (16,022) | (15,714)
Group's share of reported profit/(loss) for the year | 1,378 | - | (7,851) | (7,700)
MRP | (286) | - | - | -
Group's share of profit/(loss) for the year after consolidation | 1,092 | - | (7,851) | (7,700)

|  | Consolidated Financial Statements 2023 | 27

Associates

Pearl Petroleum Company Limited

MOL Group owns 10% stake in Pearl Petroleum Company Limited (Pearl) which holds all of the companies’ legal rights in Khor Mor and Chemchemal gas-condensate fields in the Kurdistan Region of Iraq. MOL shall be entitled to appoint a director. 100% approval by the Board of Directors is required for financing and other contractual clauses. Since the agreement between the shareholders grants MOL Group a significant influence on Pearl’s operations, the company is treated as an associated company and is consolidated using the equity method accordingly. On Pearl investment an impairment of HUF 6,409 million was recognised for 2023 after a conservative assessment of Khor Mor reserves.

Annual dividend is depend on the repayment of outstanding receivables. There was no dividend in 2023 (2022: HUF 16,712 million).

Ural Group Limited

MOL Group has 27.5% of shareholding interest in Ural Group Limited through MOL (FED) Kazakhstan B.V., a holding company. Ural Group Limited is 100% owner of Ural Oil and Gas LLP having license of exploring Fedorovsky block in Kazakhstan. MOL Group has significant influence over the relevant activities of Ural Group Limited therefore the investment is classified as an associate. Loss from Ural Group Limited booked on loan is HUF 38,451 million as of it 31 December 2023.

Meroco

The Group has 25% ownership in Meroco a.s., a biodiesel producer company located in Slovakia. The biodiesel produced in the company is mixed with diesel fuel, which helps to reduce the dependence on oil imports, since a part of demand for fuel is covered by domestically produced biofuel. Biodiesel is a renewable source of energy that can be counted on in the future, since it is practically inexhaustible.

There was no dividend in 2023 (2022: HUF 916 million).

Below tables include the most relevant associates for the Group based on materiality.

| Pearl Petroleum Ltd. | Ural Group Limited | Meroco a.s.
| 2023 | 2022 | 2023 | 2022 | 2023 | 2022
| HUF million | HUF million | HUF million | HUF million | HUF million | HUF million
The associate’s statement of financial position: |  |  |  |  |  |
Non-current assets | 916,959 | 900,495 | 82,996 | 86,673 | 9,140 | 5,420
Current assets | 244,781 | 192,290 | 6,888 | 2,676 | 41,929 | 25,290
Non-current liabilities | 137,628 | 192,616 | 216,569 | 204,662 | 6,950 | 71
Current liabilities | 117,870 | 78,706 | 13,136 | 11,176 | 31,173 | 18,732
Net assets | 906,242 | 821,463 | (139,821) | (126,489) | 12,946 | 11,907
Proportion of the Group's ownership at year end | 10% | 10% | 27.5% | 27.5% | 25.0% | 25.0%
Group's share of assets | 90,624 | 82,146 | (38,451) | (34,784) | 3,237 | 2,977
Goodwill | 97,757 | 106,008 |  | - | - | -
Accumulated impairment | (20,830) | (14,421) |  | - | - | -
Impaired from given loan |  | - | 38,451 | 34,784 | - | -
Carrying amount of the investment | 167,551 | 173,733 | - | - | 3,237 | 2,977
The associate’s statement of profit or loss: |  |  |  |  |  |
Net revenue | 220,069 | 276,704 | 21 | 122 | 56,947 | 94,556
Profit/(loss) from operations | 151,687 | 211,474 | (2,238) | (2,992) | 1,986 | 165
Net income attributable to equity holders | 158,242 | 219,377 | (23,445) | (14,686) | 1,585 | 181
Group's share of reported profit/(loss) for the year | 15,824 | 21,938 | (6,447) | (4,039) | 396 | 45
Movements on impairment | (7,612) | (13,760) | - | - | - | -
Group's share of consolidated profit/(loss) for the year | 8,212 | 8,178 | (6,447) | (4,039) | 396 | 45

|  | Consolidated Financial Statements 2023 | 28

7. Income taxes

Accounting policies

Income tax is recognised in the statement of profit or loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity, in which case the related tax is recognised in other comprehensive income or directly in equity.

The current income tax is based on taxable profit for the year. Taxable profit differs from accounting profit because of temporary differences between accounting and tax treatments and due to items that are never taxable or deductible or are taxable or deductible in other years. Full provision for deferred tax is made on the temporary differences between the carrying value of assets and liabilities for financial reporting purposes and their value for tax purposes using the balance sheet liability method. Deferred tax is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting year and are expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.

Deferred tax assets are recognised where it is more likely than not that the assets will be realised in the future. At each balance sheet date, the Company re-assesses unrecognised deferred tax assets and the carrying amount of deferred tax assets. No deferred tax liability is provided in respect of any future remittance of earnings of foreign subsidiaries where the Group is able to control the remittance of earnings and it is probable that such earnings will not be remitted in the foreseeable future, or where no liability would arise on the remittance.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities which relate to income taxes imposed by the same taxation authority and the Group intends to settle its current tax assets and liabilities on a net basis.

Significant accounting estimates and judgements

Corporate tax is required to be estimated in each tax jurisdiction in which MOL Group operates. The recognition of tax benefits requires management judgement. Tax provisions are based on management’s judgement and interpretation of country specific tax law and the likelihood of settlement. The actual tax liability may differ from the provision and adjustment in subsequent period could have a material effect on the Group’s profit for the year.

MOL Group makes judgements in assessing the likelihood of potentially material exposures and develops estimates to determine provisions where required and considers whether contingent liability disclosures should be made.

The evaluation of deferred tax assets recoverability requires judgements regarding the likely timing and the availability of future taxable income. Deferred tax asset recoverability and any related judgement are based on the Group’s business plans.

Temporary exception related to Pillar Two income taxes according to IAS 12

The Group applies IAS 12 to income taxes arising from tax law enacted or substantively enacted to implement the Pillar Two model rules published by the Organisation for Economic Co-operation and Development (OECD), including tax law that implements qualified domestic minimum top-up taxes. In accordance with paragraph 4A of IAS 12 the Group applies the temporary exception and neither recognise nor disclose information about deferred tax assets and liabilities related to Pillar Two income taxes.

a) Analysis of taxation charge for the year

Total applicable income taxes reported in the consolidated financial statements for the years ended 31 December 2023 and 31 December 2022 include the following components:

| 2023 |
| 2022
| HUF million | HUF million
Current corporate income tax and industry taxes | 123,138 | 410,722
Local trade tax and innovation fee | 34,228 | 29,481
Deferred tax expense/(benefit) | (33,852) | 26,140
Income tax expense attributable to profit from continuing operation | 123,514 | 466,343
Income tax expense attributable to profit from discontinued operation | - | 2,114
Total income tax expense | 123,514 | 468,457

b) Current income taxes

The Group’s current income taxes are determined on the basis of taxable statutory profit of the individual companies of the Group. Group taxation is applied in jurisdictions where local legislation includes such provisions.

Industry taxes include tax on energy supply activities in Hungary with an effective tax rate of 27% (2022: 24%) on taxable statutory profit of MOL Plc.

Local trade tax represents mainly an income-based tax for Hungarian entities, payable to local municipalities. Tax base is calculated by deducting material costs, cost of goods sold and remediated services from sales revenue. Tax rates vary between 0-2% dependent on the regulation of local municipalities where the entities carry on business activities.

In 2023, deferred tax benefit is mainly driven by the changes in temporary differences between the carrying value and tax value of tangible assets and provision and by the increase of tax losses carried forward in industry tax.

In the statement of profit or loss the extra profit tax was recorded in other operating expenses which are out of the scope of IAS 12 Income taxes standard.

|  | Consolidated Financial Statements 2023 | 29

Change in tax rates

The change of corporate income tax rate from 25% to 24% in Austria and change in industry tax rate from 31% to 41% in Hungary both effective from 1 January 2023 were taken into account during the preparation of the financial statements.

c) Deferred tax assets and liabilities

The deferred tax balances as of 31 December 2023 and 31 December 2022 in the consolidated statement of financial position consist of the following items by categories:

| 31 Dec 2023 | 30 Dec 2022
| HUF million | HUF million
Property, plant and equipment and intangible assets | (66,926) | (90,259)
Statutory tax losses carried forward | 18,278 | 12,042
Provisions | 89,261 | 102,457
Elimination of intragroup transactions | 32,940 | 15,719
Other temporary differences (1) | (85,497) | (58,542)
Income tax expense attributable to profit from continuing operation | (11,944) | (18,583)
of which: |  |
Total deferred tax assets | 135,123 | 109,899
Total deferred tax liabilities | (147,067) | (128,482)
(1) Deferred tax on other temporary differences includes items such as receivables write-off, inventory valuation differences, valuation of financial instruments and foreign exchange differences.

As of 31 December 2023, deferred tax assets of HUF 135,123 million consist of deferred tax on tax losses carried forward of HUF 17,442 million at MOL Plc. Besides that, HUF 68,558 million at MOL Plc. and HUF 10,188 million at INA Group relates to timing differences of provisions. Additionally, HUF 27,121 million at INA Group relates to temporary differences on intangible and tangible assets.

As of 31 December 2023, deferred tax liabilities of HUF 147,067 million include temporary differences on intangible and tangible assets at MOL Azerbaijan Ltd. (HUF 21,252 million), Slovnaft a.s. (HUF 38,078 million) and FGSZ Zrt. (HUF 16,529 million). Deferred tax liabilities include HUF 17,780 million impact of revaluation due to the acquisition of OMV Slovenia and HUF 11,100 due to development reserve in MOL Petrochemicals also.

Analysis of movements during the year in the net deferred tax liability:

| 2023 | 2022
| HUF million | HUF million
Net deferred tax asset/(liability) as at 1 January | (18,583) | 47,939
Acquisition of business | (20,536) | (8,321)
Recognised in statement of profit or loss from continuing operation | 33,852 | (26,140)
Recognised in statement of profit or loss from discontinued operation | - | (2,114)
Recognised directly in equity (as other comprehensive income) | (9,237) | 11,540
Sale of business | (399) | (30,901)
Other | 2,959 | (10,586)
Net deferred tax asset/(liability) at 31 December | (11,944) | (18,583)

The amount recognised in the statement of profit or loss as a benefit is mainly driven by changes related to MOL Plc. (HUF 44,735 million) offsetted by expense related to MOL Azerbaijan Ltd. (HUF 7,367 million).

Acquisition of business relates mainly to the deferred tax impact of revaluation due to OMV Slovenia acquisition.

Other line include mainly exchange differences.

Change in tax rates

The following changes in corporate income tax rate effective from 1 January 2024 is taken into account in deferred tax calculation:

- change in Czech Republic to 21% (2023: 19%)

- change in Slovenia to 22% (2023: 19%)

Enacted and substantively enacted changes in tax rates are considered when calculating deferred tax assets and liabilities.

|  | Consolidated Financial Statements 2023 | 30

d) Reconciliation of taxation rate

A numerical reconciliation between tax expense and the product of accounting profit multiplied by the applicable tax rates is as follows.

The table above provides a reconciliation of the Hungarian corporate tax charge to the actual consolidated tax charge. As the Group is operating in multiple countries, the actual tax rates applicable to profits in those countries are different from the Hungarian tax rate. The impact is shown in the table above as differences in tax rates.

| 2023 | 2022
| HUF million | HUF million
Profit before tax per consolidated statement of profit or loss from continuing operation | 691,418 | 1,155,294
Profit before tax per consolidated statement of profit or loss from discontinued operation | (449) | 225,410
Profit before tax per consolidated statement of profit or loss | 690,969 | 1,380,704
Less: share of profit of joint ventures and associates | (1,317) | 29,486
Income before taxation and share of profit of joint ventures and associates | 689,652 | 1,410,190
Tax expense at the applicable tax rate (9%) | 62,069 | 126,917
Change in recognition of prior year tax losses carried forward | 6,006 | 1,154
Current year losses not recognised as deferred tax asset | 2,328 | (6,364)
Differences in tax rates at subsidiaries | 21,015 | 80,886
Other tax expenses (local trade tax, extra profit tax, industry tax) | 38,205 | 256,407
Non-taxable income | (1,665) | (1,997)
Tax allowance available | (76) | (110)
Permanent differences (tax value - IFRS value) | (4,433) | 11,571
Effect of tax audits | 65 | (7)
Total income tax expense for the year | 123,514 | 468,457
Income tax expense reported in the statement of profit or loss | 123,514 | 466,343
Income tax attributable to discontinued operation | - | 2,114
Effective tax rate | 18% | 34%

e) Income tax recognised in other comprehensive income

The amount of income tax relating to each component of other comprehensive income:

| 2023 | 2022
| HUF million | HUF million
Net gain/(loss) on hedge of a net investment | (7,630) | 12,707
Revaluations of debt instruments at fair value through other comprehensive income | (1,530) | 1,192
Revaluations of equity instruments at fair value through other comprehensive income | (466) | (2,072)
Revaluations of financial instruments treated as cash flow hedges | 78 | (47)
Equity recorded for actuarial gain/(loss) on provision for retirement benefit obligation | 311 | (240)
Total income tax recognised in other comprehensive income | (9,237) | 11,540

f) Unrecognised deferred tax assets

The following deferred tax assets have not been recognised in respect of tax losses and other temporary differences in the Group due to losses in companies whose ability to generate profits is uncertain:

| 31 Dec 2023 | 31 Dec 2022
| HUF million | HUF million
Tax losses - indefinite expiry | 41,099 | 45,018
Tax losses - expiry within 5 years | 73,490 | 59,148
Tax losses - expiry after 5 years | 288 | 92
Other temporary differences | 6,350 | 2,204
Total unrecognised deferred tax asset | 121,227 | 106,462

Other line include HUF 6,339 million unrecognised deferred tax asset for temporary differences arising from investments in subsidiaries, branches and associates, and interests in joint arrangements.

Unrecognised deferred tax liability for all taxable temporary differences associated with investments in subsidiaries, branches and associates, and interests in joint arrangements is HUF 11,121 million.

|  | Consolidated Financial Statements 2023 | 31

g) Impact of Pillar Two on deferred taxes and financial statement disclosures

MOL Group applies IAS 12 to income taxes arising from tax law enacted or substantively enacted to implement the Pillar Two model rules published by the Organisation for Economic Co-operation and Development (OECD), including tax law that implements qualified domestic minimum top-up taxes. In accordance with paragraph 4A of IAS 12 the Group applies the temporary exception and neither recognise nor disclose information about deferred tax assets and liabilities related to Pillar Two income taxes.

In 2023 no current tax expense was recognised in relation to the Pillar Two income taxes.

As of 31 December 2023 MOL Group is in the process of assessing the full impact of each jurisdiction’s legislation where it operates and the exposure of Pillar Two on the financial statements.

8. Components of other comprehensive income

Exchange differences on translating foreign operations

Accounting policies

The difference on translating consolidated foreign operations which functional currency is different from the presentation currency of the Group are recognised in other comprehensive income and cumulated in a separate component of equity until disposal or liquidation of the foreign operation when they become part of the gain or loss on disposal. These exchange differences are not recognised in profit or loss because the changes in exchange rates have little or no direct effect on the present and future cash flows from operations. When a subsidiary that is a foreign operation repays a quasi-equity loan or returns share capital there is a reduction in the parent’s absolute ownership interest, the pro rata share of the CTA should be reclassified to profit and loss.

| 2023 | 2022
| HUF million | HUF million
Gains/(losses) arising during the year | (149,650) | 265,500
Recycling reserves from OCI to profit or loss due to disposal | 3,708 | (25,822)
Exchange differences on translating continuing foreign operations, net of tax | (145,942) | 239,678
Gains/(losses) arising during the year on discontinued operations | - | (11,148)
Exchange differences on translating discontinued foreign operations, net of tax | - | (11,148)

Translation reserve has decreased compared to the previous year due to HUF slightly strengthening against EUR and USD.

Net investment hedge

Accounting policies

Exchange differences on translating foreign operations are recognised in other comprehensive income and the net assets of foreign operations may be designated as hedged items in net investment hedge. The foreign exchange gains or losses on the debts designated as hedging instruments are transferred from finance result to other comprehensive income, until the foreign operation is disposed of or liquidated, when such gains or losses become part of the gain or loss on disposal.

| 2023 | 2022
| HUF million | HUF million
Gains/(losses) arising during the year | 26,256 | (47,475)
Income tax effect | (7,630) | 12,707
Net investment hedge, net of tax | 18,626 | (34,768)

Changes in fair value of debt instruments at fair value through other comprehensive income

Accounting policies

Debt instruments which are held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets are measured at fair value through other comprehensive income. When the asset is derecognised or reclassified, changes in fair value previously recognised in other comprehensive income and accumulated in equity are reclassified to profit and loss.

| 2023 | 2022
| HUF million | HUF million
Gains/(losses) arising during the year | 5,648 | (4,522)
Income tax effect | (1,530) | 1,192
Changes in fair value of debt instruments at fair value through other comprehensive income, net of tax | 4,118 | (3,330)

Changes in fair value of equity instruments at fair value through other comprehensive income

Accounting policies

If an equity investment is not held for trading, an irrevocable election can be made at initial recognition to measure it at fair value through other comprehensive income. When the asset is derecognised changes in fair value previously recognised in other comprehensive income and accumulated in equity remain in other comprehensive income.

|  | Consolidated Financial Statements 2023 | 32

| 2023 | 2022
| HUF million | HUF million
Gains/(losses) arising during the year | 17,806 | (2,409)
Income tax effect | (466) | (2,072)
Changes in fair value of equity instruments at fair value through other comprehensive income, net of tax | 17,340 | (4,481)

Changes in fair value of cash flow hedges

Accounting policies

Cash flow hedges are hedges of the exposure to variability in cash flows that is attributable to a particular risk associated with a recognised asset or liability or a highly probable forecast transaction that could affect the statement of profit or loss. The effective portion of the gain or loss on the hedging instrument is recognised directly as other comprehensive income.

| 2023 | 2022
| HUF million | HUF million
Gains/(losses) arising during the year | (865) | 574
Income tax effect | 78 | (47)
Changes in fair value of cash flow hedges, net of tax | (787) | 527

Remeasurement of post-employment benefit obligations

Accounting policies

The effects of differences between the previous actuarial assumptions and what has actually occurred and the effects of changes in actuarial assumptions in the model used for determining provision for post-employment benefit obligations, called actuarial gains and losses, are recognised in the other comprehensive income immediately. The recognised amount is not reclassified to profit or loss in subsequent periods.

| 2023 | 2022
| HUF million | HUF million
Gains/(losses) arising during the year | (2,664) | 1,965
Recycling reserves from OCI to profit or loss due to disposal | (117) | -
Income tax effect | 311 | (240)
Remeasurement of post-employment benefit obligations | (2,470) | 1,725

Share of other comprehensive income of associates and joint ventures

Accounting policies

The other comprehensive income includes the Group’s share of the associates and joint ventures’ other comprehensive income. When the associate or joint ventures are disposed of or their consolidation with equity method is discontinued all amounts in other comprehensive income in relation to that investment is derecognised.

| 2023 | 2022
| HUF million | HUF million
Gains/(losses) arising during the year | (13,125) | 18,715
Share of other comprehensive income of associates and joint ventures | (13,125) | 18,715

|  | Consolidated Financial Statements 2023 | 33

Non-financial assets and liabilities

This section describes those non-financial assets that are used, and liabilities incurred to generate the Group’s performance. This section also provides detailed disclosures on the significant exploration and evaluation related matters as well as the Group’s recent acquisitions and disposals.

9. Property, plant and equipment, investment property and intangible assets

a) Property, plant and equipment

Accounting policies

Property, plant and equipment are stated at cost less accumulated depreciation, depletion and accumulated impairment loss. For investment properties, the cost model is applied by MOL Group.

The initial cost of property, plant and equipment comprises its purchase price, including import duties and non-refundable purchase taxes and any directly attributable costs of bringing the asset to its working condition and location for its intended use, such as borrowing costs. Estimated field abandonment and site restoration costs are capitalised upon initial recognition or subsequently, when there is a direct or indirect legal obligation and/or constructive obligation to do so. Expenditures incurred after the property, plant and equipment have been put into operation are charged to statement of profit or loss in the period in which the costs are incurred, except for periodic maintenance costs which are capitalised as a separate component of the related assets.

Construction in progress represents plant and properties under construction and is stated at cost without being depreciated. Construction in progress is reviewed for impairment annually.

|  | Consolidated Financial Statements 2023 | 34

| Land and buildings | Machinery and equipment | Other machinery and equipment | Construction in progress | Total
| HUF million | HUF million | HUF million | HUF million | HUF million
At 1 Jan 2022 |  |  |  |  |
Gross book value | 5,133,893 | 3,705,167 | 366,265 | 820,976 | 10,026,301
Accumulated depreciation and impairment | (3,360,746) | (3,003,061) | (251,331) | (17,060) | (6,632,198)
Net book value | 1,773,147 | 702,106 | 114,934 | 803,916 | 3,394,103
From this net value of assets held for sale | (12,636) | (1,720) | (880) | - | (15,236)
|  |  |  |  | 3,378,867
Net book value - at 1 Jan 2022 | 1,773,147 | 702,106 | 114,934 | 803,916 | 3,394,103
Additions and capitalisations | 212,272 | 210,023 | 78,889 | 60,374 | 561,558
Acquisition of subsidiaries | 135,740 | 15,038 | 41,266 | 3,570 | 195,614
Depreciation for the year | (265,939) | (149,686) | (32,437) | - | (448,062)
Impairment | (35,208) | (5,217) | (170) | (10,954) | (51,549)
Reversal of impairment | 45,387 | 25,642 | 67 | - | 71,096
Disposals | (4,721) | (367) | (1,570) | (144) | (6,802)
Disposal of subsidiaries | (136) | (59,379) | (11) | (3) | (59,529)
Exchange differences | 129,920 | 39,668 | 3,738 | 25,528 | 198,854
Transfers and other movements | 2,760 | (15,700) | 6,529 | (3,297) | (9,708)
Closing net book value | 1,993,222 | 762,128 | 211,235 | 878,990 | 3,845,575
At 31 Dec 2022 |  |  |  |  |
Gross book value | 5,802,963 | 3,574,108 | 498,171 | 898,922 | 10,774,164
Accumulated depreciation and impairment | (3,809,741) | (2,811,980) | (286,936) | (19,932) | (6,928,589)
Net book value | 1,993,222 | 762,128 | 211,235 | 878,990 | 3,845,575
From this net value of assets held for sale | (22,659) | (2,565) | (975) | (1,497) | (27,696)
|  |  |  |  | 3,817,879
Net book value - at 1 Jan 2023 | 1,993,222 | 762,128 | 211,235 | 878,990 | 3,845,575
Additions and capitalisations | 163,785 | 163,849 | 54,538 | 147,214 | 529,386
Acquisition of subsidiaries | 107,118 | 42,018 | 21,868 | 1,659 | 172,663
Depreciation for the year | (191,421) | (140,743) | (41,591) | - | (373,755)
Impairment | (27,928) | (1,171) | (292) | (4,142) | (33,533)
Reversal of impairment | 5,277 | 503 | 70 | - | 5,850
Disposals | (19,186) | (4,398) | (3,420) | (665) | (27,669)
Disposal of subsidiaries | - | - | - | - | -
Exchange differences | (65,034) | (18,694) | (585) | (18,971) | (103,284)
Transfers and other movements | 8,112 | (12,606) | (527) | (3,483) | (8,504)
Closing net book value | 1,973,945 | 790,886 | 241,296 | 1,000,602 | 4,006,729
At 31 Dec 2023 |  |  |  |  |
Gross book value | 5,708,367 | 3,594,515 | 552,014 | 1,018,691 | 10,873,587
Accumulated depreciation and impairment | (3,734,422) | (2,803,629) | (310,718) | (18,089) | (6,866,858)
Net book value | 1,973,945 | 790,886 | 241,296 | 1,000,602 | 4,006,729
From this net value of assets held for sale | (7,540) | (829) | (559) | - | (8,928)
|  |  |  |  | 3,997,801

Disposal of subsidiaries in 2022 mainly contains the disposal of the UK portfolio.

Leased assets

Accounting policies

The Group recognises the right-of-use assets and lease liabilities for most leases.

The Group measures the right-of-use asset at cost, less accumulated depreciation and any accumulated impairment losses. Capitalised leased assets are depreciated over the shorter of the estimated useful life of the asset or the lease term. The lease liability is initially measured at the present value of the lease payments payable over the lease term, discounted at the rate implicit in the lease if that can be readily determined, otherwise the Group as lessee applies incremental borrowing rate. The lease liability is measured subsequently using the effective interest rate method.

|  | Consolidated Financial Statements 2023 | 35

The Group has elected not to recognise right-of-use assets and lease liabilities for some leases of low-value assets and short-term leases. Low-value assets mainly comprise those assets which value, when new, do not exceed USD 5,000. Short-term leases are leases with a lease term of 12 months or less. The Group recognises the lease payments associated with these leases as expense on a straight-line basis over the lease term.

The Group presents right-of-use assets from leases in ‘Property, plant and equipment’, the same line item as it presents underlying assets of the same nature that it owns.

Significant accounting estimates and judgements

The Group has applied judgement to determine the lease term for some lease contracts that include renewal or termination options. The assessment of whether the Group is reasonably certain to exercise such options impacts the lease term, which significantly affects the amount of lease liabilities and leased assets recognised.

| Rights | Land and building and related rights | Machinery and equipment | Other machinery and equipment | Total
| HUF million | HUF million | HUF million | HUF million | HUF million
At 31 Dec 2022 |  |  |  |  |
Net book value of leased assets | - | 131,712 | 27,393 | 19,988 | 179,093
Period ended 31 Dec 2023 |  |  |  |  |
Additions and capitalisations | 46 | 18,786 | 20,068 | 5,508 | 44,408
Depreciation for the period | (10) | (6,056) | (3,315) | (5,757) | (15,138)
Impairment, termination |  | (1,511) | (2,038) | (54) | (3,603)
Closing net book value | 36 | 142,931 | 42,108 | 19,685 | 204,760

The leased assets include land and building related leases (office, land etc), machinery leases that are connected to assets used in the production (e.g. railway wagons), vehicle leases and other office equipment related leases.

MOL Group has presented lease liabilities within loans and borrowings, please refer to Note 20/c, for the interest paid and received on leasing agreements please refer to Note 5.

Borrowing costs

Accounting policies

Borrowing costs (including interest charges and other costs incurred in connection with the borrowing of funds, including exchange differences arising from foreign currency borrowings) directly attributable to the acquisition, construction or production of qualified assets are capitalised until these assets are substantially ready for their intended use or sale. All other costs of borrowing are expensed in the period in which they are incurred.

Property, plant and equipment include borrowing costs incurred in connection with the construction of qualifying assets. Additions to the gross book value of property, plant and equipment include borrowing costs of HUF 16,252 million in 2023 (2022: HUF 16,314 million). In 2023 the applicable capitalisation rate (including the impact of foreign exchange differences) has been 3.64% (2022: 5.16%).

Government grants

Accounting policies

Government grants are recognised at their fair value where there is reasonable assurance that the grant will be received, and all attaching conditions will be complied with. Where the grant relates to an asset, the fair value is credited to a deferred income account and is released to the statement of profit or loss over the expected useful life of the relevant asset. Grant relates to interest expense deducted in reporting the related expense and the borrowings also netted with the deferred income.

In 2023 property, plant and equipment includes assets with a value of HUF 24,570 million (2022: HUF 25,146 million) financed from government grants. The total amount reflects mainly the government grant received for the construction of the new polyol plant in MOL Petrochemicals which is HUF 11,683 million as of 31 December 2023 (31 December 2022: HUF 11,683 million). Further significant amounts are the assets of FGSZ Zrt. partly financed via a European Union grant for the construction of the Hungarian-Romanian and the Hungarian-Croatian natural gas interconnector and transformation of nodes, and the assets of Slovnaft a.s. financed by the grant received from Slovakian government in order to serve State Authorities in case of state emergencies.

| 2023 | 2022
| HUF million | HUF million
At 1 January | 25,146 | 19,788
Asset related government grants received | 1,650 | 7,296
Release of deferred grants | (1,945) | (2,265)
Foreign exchange differences | (281) | 327
At 31 December 2023 (see Note 17 and 18) | 24,570 | 25,146

Non-current assets pledged as security

The carrying amount of non-currents assets pledged as security for liabilities is HUF 61,107 million as of 31 December 2023 (2022: HUF 24,207 million) which relates to the MOL Fleet Solution Flottakezelő Kft. and the ITK Group.

|  | Consolidated Financial Statements 2023 | 36

b) Investment property

Accounting policies

Investment property is a property (land or a building or part of a building or both) held to earn rentals or for capital appreciation or both, rather than for:

- use in the production or supply of goods or services or for administrative purposes, or

- sale in the ordinary course of business.

For investment properties, the cost model is applied by MOL Group. Transfer to, or from, investment property shall be examined when there is an evident change in use.

Investment properties include real estates held by MOL Group to earn rental income from long-term operating leases or for capital appreciation. Investment properties are initially measured at cost and the Group applies the cost model for the subsequent measurement of these assets. The Group accounts for depreciation assuming 20-50 years useful life and applies the straight-line method for measuring depreciation.

The amount recognised in the consolidated statement of profit or loss for 2023 for investment property is HUF 1,969 million operating expense and HUF 3,406 million HUF rental income.The following table provides a reconciliation of the carrying amount of investment property at the beginning and end of the period:

| 2023
| HUF million
Opening gross carrying amount | 30,868
Opening accumulated depreciation | (21,409)
Opening carrying amount | 9,459
Addition from acquisitions | 55
Depreciation | (839)
Exchange differences | (298)
Transfer to / from tangible fixed assets (net value) | 7,914
Other changes (net value) | (332)
Closing gross carrying amount | 82,390
Closing accumulated depreciation | (66,431)
Closing carrying amount | 15,959

The fair value of investment property is HUF 89,522 million as of 31 December 2023. The valuation was performed by the Group's own valuation experts using DCF valuation method.

There are no contractual obligations to purchase, construct, or develop or for repairs, maintenance or enhancements of the Group’s investment property and there are no restrictions on the realisability of it as of 31 December 2023.

c) Intangible assets

Accounting policies

An intangible asset is recognised initially at cost. For intangible assets acquired in a business combination, the cost is the fair value at the acquisition date.

Following initial recognition, intangible assets, other than goodwill are stated at the amount initially recognised, less accumulated amortisation and accumulated impairment losses.

Intangible assets, excluding development costs, created within the business are not capitalised.

Development costs are capitalised if the recognition criteria according to IAS 38 are fulfilled. Costs in development stage can be not amortised. The carrying value of development costs is reviewed for impairment annually when the asset is not yet in use or more frequently when an indicator of impairment arises during the reporting year indicating that the carrying value may not be recoverable.

Free granted quotas are not recorded in the financial statements, while purchased emission quotas are initially recorded as intangible assets at cost less impairment, if any, taking into consideration the residual value. The quotas recognised are not amortised if the residual value is at least equal to carrying value.

|  | Consolidated Financial Statements 2023 | 37

| Rights | Software and other intellectual property | Exploration and evaluation assets | Goodwill | Total
| HUF million | HUF million | HUF million | HUF million | HUF million
At 1 Jan 2022 |  |  |  |  |
Gross book value | 272,015 | 96,775 | 272,263 | 231,621 | 872,674
Accumulated amortisation and impairment | (147,021) | (60,670) | (160,806) | (65,387) | (433,884)
Net book value | 124,994 | 36,105 | 111,457 | 166,234 | 438,790
From this net value of assets held for sale | - | - | (465) | (486) | (951)
|  |  |  |  | 437,839
Net book value - at 1 Jan 2022 | 124,994 | 36,105 | 111,457 | 166,234 | 438,790
Additions | 88,482 | 15,644 | 13,375 | 301 | 117,802
Acquisition of subsidiary | 14,286 | 1 | - | 37,743 | 52,030
Amortisation for the year | (12,127) | (7,690) | (523) | - | (20,340)
Impairment | (1,175) | (69) | (12,191) | - | (13,435)
Reversal of impairment | 3 | - | 4,554 | - | 4,557
Disposals | (59,424) | (4) | (503) | - | (59,931)
Disposal of subsidiaries | - | (5) | - | - | (5)
Exchange differences | (5,219) | 800 | 15,194 | 21,022 | 31,797
Transfers and other movements | 10,664 | (9,211) | 360 | - | 1,813
Closing net book value | 160,484 | 35,571 | 131,723 | 225,300 | 553,078
At 31 Dec 2022 |  |  |  |  |
Gross book value | 320,839 | 106,734 | 280,794 | 293,661 | 1,002,028
Accumulated amortisation and impairment | (160,355) | (71,163) | (149,071) | (68,361) | (448,950)
Net book value | 160,484 | 35,571 | 131,723 | 225,300 | 553,078
From this net value of assets held for sale | - | (4) | - | (486) | (490)
|  |  |  |  | 552,588
Net book value - at 1 Jan 2023 | 160,484 | 35,571 | 131,723 | 225,300 | 553,078
Additions | 120,518 | 16,640 | 12,407 | - | 149,565
Acquisition of subsidiary | 4,619 | 129 | 1 | 27,137 | 31,886
Amortisation for the year | (13,618) | (7,857) | (1,583) | (30) | (23,088)
Impairment | (505) | (211) | (3,723) | (43,240) | (47,679)
Reversal of impairment | - | - | 1,360 | - | 1,360
Disposals | (95,067) | (5) | - | - | (95,072)
Disposal of subsidiaries | - | - | - | - | -
Exchange differences | (8,537) | (413) | (6,452) | (11,508) | (26,910)
Transfers and other movements | 6,561 | (9,940) | (13,676) | (30) | (17,085)
Closing net book value | 174,455 | 33,914 | 120,057 | 197,629 | 526,055
At 31 Dec 2023 |  |  |  |  |
Gross book value | 341,179 | 110,583 | 204,850 | 308,674 | 965,286
Accumulated amortisation and impairment | (166,724) | (76,669) | (84,793) | (111,045) | (439,231)
Net book value | 174,455 | 33,914 | 120,057 | 197,629 | 526,055
From this net value of assets held for sale | - | - | - | (486) | (486)
|  |  |  |  | 525,569

Goodwill

Accounting policies

Goodwill should be initially measured as of the acquisition date at its cost, being the excess of the cost of the business combination plus any non-controlling interest and the acquisition date fair value of previously held equity interest in the acquiree over the net fair value of the identifiable assets, liabilities and contingent liabilities. As the excess of (a) over (b) below:

a) the aggregate of:

- the consideration transferred measured in accordance with IFRS 3, which generally requires acquisition-date fair value;

|  | Consolidated Financial Statements 2023 | 38

- the amount of any non-controlling interest in the acquiree measured in accordance with IFRS 3; and

- in a business combination achieved in stages, the acquisition-date fair value of the acquirer’s previously held equity interest in the acquiree.

b) the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed measured in accordance with IFRS 3.

Following initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Group’s cash generating units, or groups of cash generating units, that are expected to benefit from the synergies of the combination, irrespective of whether other assets or liabilities of the Group are assigned to those units or groups of units.

Goodwill acquired in a business combination is allocated, at acquisition, to the cash generating units (CGUs) that are expected to benefit from that business combination. Before recognition of impairment losses, the carrying amount of goodwill has been allocated as follows:

Goodwill (net book value) | 31 Dec 2023 | 31 Dec 2022
HUF million | HUF million
Upstream | 120,719 | 130,907
ACG field | 120,719 | 130,907
Consumer services | 63,377 | 80,237
Slovenian network (please refer to note 10) | 14,303 | -
Polish retail network (please refer to note 10) | - | 29,028
Croatian retail network | 18,897 | 19,759
Czech retail network | 9,131 | 9,780
Hungarian retail network | 7,972 | 7,972
Slovakian network | 8,021 | 8,387
Romanian retail network | 5,053 | 5,311
Downstream | 11,843 | 12,362
Austrian wholesale and logistic | 9,741 | 10,186
German plastic compounder | 1,625 | 1,699
MOL Petrochemicals | 477 | 477
Corporate | 1,204 | 1,308
Croatian oil field services | 964 | 1,007
Other production facilities | 240 | 301
Total goodwill | 197,143 | 224,814

Oil and natural gas exploration and development expenditures

Accounting policies

Oil and natural gas exploration and development expenditure is accounted for using the Successful Efforts method of accounting.

License and property acquisition costs

Costs of exploration and property rights are capitalised as intangible assets and amortised on a straight-line basis over the estimated period of exploration. Each property is reviewed on an annual basis to confirm that drilling activity is planned, and it is not impaired. If no future activity is planned, the remaining balance of the licence and property acquisition costs is written off. Upon recognition of proved reserves (‘proved reserves’ or ‘commercial reserves’) and internal approval for development, the relevant expenditure is transferred to property, plant and equipment.

Exploration expenditure

Geological and geophysical exploration costs are charged against income statement as incurred. Costs directly associated with an exploration well are capitalised as an intangible asset until the drilling of the well is complete and the results have been evaluated. These costs include employee remuneration, materials and fuel used, rig costs, delay rentals and payments made to contractors. If hydrocarbons are not found, the exploration expenditure is written off as a dry-hole. If hydrocarbons are found and, subject to further appraisal activity, which may include the drilling of further wells (exploration or exploratory-type stratigraphic test wells), are likely to be capable of commercial development, the costs continue to be carried as an asset. All such carried costs are subject to technical, commercial and management review at least once a year to confirm the continued intent to develop or otherwise extract value from the discovery. When this is no longer the case, the costs are written off. When proved reserves of oil and natural gas are determined and development is sanctioned, the relevant expenditure is transferred to property, plant and equipment.

Development expenditure

Expenditure on the construction, installation or completion of infrastructure facilities such as platforms and the drilling of development wells, including unsuccessful development or delineation wells, is capitalised within property, plant and equipment.

Significant accounting estimates and judgements

Application of Successful Efforts method of accounting for exploration and evaluation assets

Management uses judgement when capitalised exploration and evaluation assets are reviewed to determine capability and continuing intent of further development.

Exploration and evaluation assets

Transfers from exploration and evaluation assets represent expenditures which, upon determination of proved reserves of oil and natural gas are reclassified to property, plant and equipment.

|  | Consolidated Financial Statements 2023 | 39

Within exploration and evaluation assets, exploration expenses incurred in 2023 is HUF 2,640 million (2022: HUF 3,175 million), which were not eligible for capitalisation. Consistent with the Successful Efforts method of accounting they were charged to various operating cost captions of the consolidated statement of profit or loss as incurred.

Other research and development costs are less significant compared to exploration expenses. These research and development costs are HUF 1,228 million in 2023 (2022: HUF 991 million).

Write-offs of dry-holes

Dry-holes | 2023 | 2022
HUF million | HUF million
Norway | - | 153
Hungary | - | 14
Croatia | 2,600 | 1,493
Pakistan | 17 | 11,329
Egypt | 247 | -
Total | 2,864 | 12,989

Obradovci-1J well, Mikleus-1 well, Kozarice-43 well and Lipovljani-179 well in Croatia, and Ras Qatata in Egypt were drilled in 2023, the wells did not achieve the objectives and have been classified as dry.

Exploration Surghar-1 well, Tarnol well and DG Khan 1 well located in Pakistan were drilled and classified as dry in 2022, additional exploration cost related to these dry wells were recognised in 2023.

d) Depreciation, depletion and amortisation

Accounting policies

Depreciation of assets begin when the relevant asset is available for use. Depreciation of each component of an intangible asset, property, plant and equipment and investment property, except for given Upstream assets, is computed on a straight-line basis over their respective useful lives. Usual periods of useful lives for different types of assets are as follows:

• Software: 3 – 5 years

• Buildings: 10 – 50 years

• Refineries and chemicals manufacturing plants: 4 –12 years

• Gas and oil storage and transmission equipment: 7 – 50 years

• Petrol service stations: 5 – 30 years

• Telecommunication and automatization equipment: 3 – 10 years

In Upstream segment depletion and depreciation of production installations and transport systems for oil and gas is calculated for each individual field or field-dedicated transport system using the unit of production method, based on proved and developed commercially recoverable reserves. Recoverable reserves are reviewed on an annual basis prospectively. Transport systems used by several fields and other assets are calculated on the basis of the expected useful life, using the straight-line method. Amortisation of leasehold improvements is provided using the straight-line method over the term of the respective lease or the useful life of the asset, whichever period is less. Periodic maintenance costs are depreciated until the next similar maintenance takes place.

The useful lives of intangible assets are assessed to be either finite or indefinite. Amortisation is charged on assets with a finite useful life over the best estimate of their useful lives using the straight-line method.

The useful life and depreciation methods are reviewed at least annually. All the following factors must be considered in determining the useful life of an asset:

- expected usage of the asset. Usage is assessed by reference to the asset’s expected capacity or physical output;

- the expected physical wear-and-tear that depends on operation factors like the number of shifts, the repair and maintenance programme employed at the enterprise as well as the repair and maintenance done when the asset is out of use;

- technical obsoleteness due to changes and developments of the production process or changes in the market demands for the products that the assets can produce or for the services that the assets can provide;

- legal or other types of restrictions on the use of the asset, for example the expiry date of the related lease transactions.

Significant accounting estimates and judgements

The determination of the Group’s estimated oil and natural gas reserves requires significant judgements and estimates to be applied and these are yearly reviewed and updated. Numerous factors have an impact on determination of the Group’s estimates of its oil and natural gas reserves (e.g. geological and engineering data, reservoir performance, acquisition and divestment activity, drilling of new wells, and commodity prices). MOL Group bases its proved and developed reserves estimates on the requirement of reasonable certainty with rigorous technical and commercial assessments based on conventional industry practice and regulatory requirements. Oil and natural gas reserve data are used to calculate depreciation, depletion and amortisation charges for the Group’s oil and gas properties. The impact of changes in these estimations is handled prospectively by amortising the remaining carrying value of the asset over the expected future production. Oil and natural gas reserves also have a direct impact on the value in use calculations applied for determination of the recoverability of assets.

|  | Consolidated Financial Statements 2023 | 40

e) Impairment of assets

Accounting policies

Property, plant and equipment and intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Whenever the carrying amount of an asset exceeds its recoverable amount, an impairment loss is recognised in the statement of profit or loss for items of property, plant and equipment and intangibles carried at cost. The recoverable amount is the higher of an asset's fair value less costs to sell and value in use. The fair value is the amount obtainable from the sale of an asset in an arm's length transaction while value in use is the present value of estimated net future cash flows expected to arise from the continuing use of an asset and from its disposal at the end of its useful life. Recoverable amounts are estimated for individual assets or, if this is not practicable, for the cash-generating unit. Intangible assets with indefinite useful life are not depreciated, instead an impairment test is performed at each financial year-end.

The Group assesses at each reporting date whether there is any indication that previously recognised impairment losses may no longer exist or may have decreased. A previously recognised impairment loss is reversed only if there has been a change in the impairment assumptions considered when the last impairment loss was recognised. The reversal is limited so that the carrying amount of the asset neither exceeds its recoverable amount, nor is higher than its carrying amount net of depreciation, had no impairment loss been recognised in prior years.

Significant accounting estimates and judgements

Impairment of non-current assets, including goodwill

The impairment calculation requires an estimate of the recoverable amount of the cash generating units. Value in use is usually determined on the basis of discounted estimated future net cash flows. In determination of cash flows the most significant variables are discount rates, terminal values, the period for which cash flow projections are made, as well as the assumptions and estimates used to determine the cash inflows and outflows, including commodity prices, operating expenses, future production profiles and the global and regional supply-demand equilibrium for crude oil, natural gas and refined products. As approved by the year-end RRC, MOL Group has upgraded its reserve estimates of matured oil and gas fields in CEE. By this all reserves are determined at 2P basis consistently with industry best practice.

Impairments

Impairment indicators

During the financial year the following impairment indicators were identified: change in crude oil, gas and electricity prices, change in the discount rates, change in product quotations and, in Hungary change in royalty legislation.

Significant assumptions

The price and margin assumptions used in impairment testing are reviewed annually and approved by management. They are based on management’s best estimate and were consistent with external sources. Prices in the near term are based on recent forward prices and market developments, long-term price assumptions are developed considering long-term views of global supply and demand including analysis of industry experts. Long-term assumptions take into consideration the impacts of the climate change.

2023 key assumptions for impairment testing (nominal terms) | 2024-2026 (average) | 2027-2029 (average) | 2030 | 2040 | 2050
Brent oil price (USD/bbl) | 80 | 78 | 80 | 89 | 89
TTF Gas price (EUR/MWh) | 50 | 42 | 41 | 42 | 34
CO2 price EUA (EUR/t) | 100 | 116 | 121 | 175 | 174
MOL Group refinery margin (USD/bbl) | 3.51 | 1.64 | 1.02 | -0.05 | 0.36
MOL Group petrochemical margin (EUR/t) | 301 | 427 | 466 | 462 | 590

2022 key assumptions for impairment testing (nominal terms) | 2023-2025 (average) | 2026-2028 (average) | 2030 | 2040 | 2050
Brent oil price (USD/bbl) | 80 | 73 | 74 | 82 | 83
TTF Gas price (EUR/MWh) | 83 | 47 | 38 | 39 | 31
CO2 price EUA (EUR/t) | 100 | 104 | 111 | 160 | 160
MOL Group refinery margin (USD/bbl) | 5.07 | 2.47 | 2.49 | 2.87 | 3.43
MOL Group petrochemical margin (EUR/t) | 579 | 622 | 688 | 664 | 939

Brent prices beyond the planning horizon are modelled by matching the global oil cost curve with the in-house global oil demand projection.

TTF natural gas prices beyond the planning horizon are set to be in line with the average break-even price of new global LNG projects (based on IEA).

|  | Consolidated Financial Statements 2023 | 41

CO2 quota prices beyond the planning horizon are modelled by the projected ETS EUA demand-supply balance capped by the projected breakeven prices of green Hydrogen projects.

MOL Group's current strategy includes ‘green’ targets aligned with global trends in decarbonisation. MOL Group has included the required capital expenditures for decarbonization in the cash flows for the CGU’s to achieve its strategic goal of climate neutrality by 2050, and, in line with the announced strategy achieve -30% reduction in CO2 emission by 2030 as planned under Scope 1+2.

Calculation method of the applied discount rates

The discount rate represents the expectation of external parties about climate change. The discount rate used for valuations takes into account the weighted average cost of equity and net borrowings. The cost of equity is calculated using the capital asset pricing model (CAPM), which describes the relationship between market risk and the expected returns. The beta value expresses the volatility and market risk of a stock relative to a market index. The beta value in each segment is determined on the regresses the stock market returns of each company of the peer group to the return of the market index. The discount rate used for valuations takes into account the risk of climate change through these industry beta values. After taking the simple average of the betas to determine the segment beta, it is adjusted for the leverage and associated tax shield effect using ratios specific to MOL Group. The Group-WACC is then adjusted by the country specific risk factors to get country-by-country discount rate.

In 2023, the following significant impairment losses and impairment reversals were recognised. Impairment losses are positive, reversals are negative figures.

Impairments and write-offs (without dry-holes) - 2023* | Upstream | Downstream | Consumer services | Corporate and other | Midstream | Total
HUF million | HUF million | HUF million | HUF million | HUF million | HUF million
Hungary | 3,654 | 2,343 | 101 | 5,949 | 583 | 12,630
Poland | - | - | 61,257 | - | - | 61,257
Croatia | 345 | 173 | 903 | (1,985) | - | (564)
Pakistan | (1,360) | - | - | - | - | (1,360)
Slovakia | - | 215 | 174 | (8) | - | 381
Other | 50 | 34 | (1,290) | - | - | (1,206)
Total | 2,689 | 2,765 | 61,145 | 3,956 | 583 | 71,138

Impairments and write-offs (without dry-holes) - 2022* | Upstream | Downstream | Consumer services | Corporate and other | Midstream | Total
HUF million | HUF million | HUF million | HUF million | HUF million | HUF million
Hungary | 18,268 | 5,636 | 722 | (124) | 488 | 24,990
Croatia | (46,876) | 65 | 993 | (1,512) | - | (47,330)
United Kingdom | (21,165) | - | - | - | - | (21,165)
Slovakia | - | 4,732 | 29 | 1 | - | 4,762
Other | 14,917 | 34 | 133 | 1 | - | 15,085
Total | (34,856) | 10,467 | 1,877 | (1,634) | 488 | (23,658)
*Including the intersegment impact |  |  |  |  |  |

In 2023 and 2022 impairment was accounted in:

• Upstream segment for production fields and for assets under construction.

o In Hungary in 2023 impairment was recorded due to

§ the return of the concession rights in Bucsa and Csanád;

§ write off of asset under construction;

§ change in the value in use for Füzesgyarmat cash generating unit.

o In Pakistan in 2023 government approval was received for a farmout agreement for the sale of 30% share in Margala Block and accordingly 30% share of cost was reversed.

o In the United Kingdom 2022 impairment reversal was recorded due to the divestment of the cash generation unit of the whole UK upstream portfolio. Reversal was made up to the theoretical cap of the assets.

o In Croatia in 2022 impairment reversal was due mainly to the change in macro environment.

o In Hungary in 2022 impairment was recorded due to decrease in the value in use related mainly to Algyő and Füzesgyarmat hubs (cash generating units) due to macro and regulation changes.

o Other line shows mainly the impairment of the Syrian cash generating unit.

• Downstream segment mainly for unutilised refinery assets.

o In Hungary impairment was recorded on the catalysts and assets under construction in 2022 and in 2023.

o In Slovakia impairment was recognised on assets under construction in 2022.

|  | Consolidated Financial Statements 2023 | 42

• Consumer services mainly for machineries and equipment in filling stations.

o In Poland impairment was recorded due to more complex dynamics in evaluation of the complex deal, and tougher market conditions on fuel availability and pricing than originally expected. From the impairment recognised on the network in 2023 HUF 37,714 million was recognised on goodwill.

o In Croatia impairment was recorded on buildings which are not suitable for business purposes in 2023.

o In Slovakia impairment was recorded on assets withdrawn from use and on one service station due to lower value in use in 2023.

o Other line shows impairment reversal on the Czech network and Tifon network.

o In Croatia impairment was recorded on a service station due to lower value in use in 2022.

o In Hungary impairment was recorded on land and equipment on service stations where the recoverable amount was lower than the carrying amount in 2022.

• Corporate and other segment for innovative businesses and IT equipment.

o In Hungary impairment was accounted for the goodwill recognised according to IFRS 3 on the step up acquisition of ITK Group in 2023.

o In Croatia 2023 impairment reversal was due to a misstatement in depreciation calculation.

o In Croatia 2022 impairment reversal was recorded due to higher value in use in Crosco onshore and offshore assets.

Impairment test of Upstream assets

The impairment tests were performed by MOL Group using the following assumptions:

• Recoverable amount is calculated with the assumption of using the assets in long-term in the future.

• The recoverable amount of the asset (cash-generating unit) is the value in use.

• Discount rates: the recoverable amount calculations take into account the time value of money, the risks specific to the asset and the rate of return that would be expected by a market participant for an investment with similar risk, cash flow and timing profile. It is estimated from current market transactions for similar assets or from the 'weighted average cost of capital' (WACC) of a listed entity that has a single asset or portfolio of assets that are similar in terms of service potential and risks to the asset under review.

• In assessing value in use, the estimated future cash flows are discounted to their present value using a post-tax discount rate. The pre-tax discount rate is determined by way of iteration.

• Exploration and Production segment post-tax discount rates were calculated using the WACC premise plus country risk premium of the related country. Based on the above, the post-tax discount rates used for the impairment tests in 2023 were in the range from 7.5% to 22%.

• The pre-tax discount rates used in 2023 ranged from 10.2% to 29.2% depending on the risk premium and the applicable tax rate in the geographic location of the CGU.

• The pre-tax discount rates used in 2022 ranged from 6.7% to 25.9% depending on the risk premium and the applicable tax rate in the geographic location of the CGU.

• The growth rates are based on industry growth forecasts. The Group prepares cash flow forecasts derived from the most recent financial budgets of upstream segment approved by management for financial years 2024-2026 and extrapolates cash flows for the following years based on an USD/EUR inflation rate varying between 2% and 2.5%.

|  | Consolidated Financial Statements 2023 | 43

Sensitivity of Upstream assets

MOL Group performed a sensitivity analysis on Upstream assets. The present values of Upstream assets were tested through the indicators for which the assets are most sensitive: Brent oil price, natural gas price and the discount rate.

Impairment test of Downstream assets

| Change in present value HUF million
Change in the present value of US assets |
Brent oil price sensitivity |
-10% case | (142,819)
+10% case | 142,504
Natural gas price sensitivity |
-10% case | (76,691)
+10% case | 77,017
Discount rate sensitivity |
-1%point | 98,527
+1%point | (88,157)

Impairment test of Downstream assets

The impairment tests performed by MOL Group were performed using the following assumptions:

• Recoverable amount is calculated with the assumption of using the assets in long-term in the future.

• The recoverable amount of the asset (cash-generating unit) is the value in use.

• Discount rates: the recoverable amount calculations take into account the time value of money, the risks specific to the asset and the rate of return that would be expected by a market participant for an investment with similar risk, cash flow and timing profile. It is estimated from current market transactions for similar assets or from the 'weighted average cost of capital' (WACC) of a listed entity that has a single asset or portfolio of assets that are similar in terms of service potential and risks to the asset under review.

• In assessing value in use, the estimated future cash flows are discounted to their present value using a post-tax discount rate. The pre-tax discount rate is determined by way of iteration.

• Downstream segment post-tax discount rates were calculated using the WACC premise plus country risk premium of the related country. Based on the above, the post-tax discount rates used for the impairment tests in 2023 were in the range from 7.9% to 10.9%.

• The pre-tax discount rates in 2023 ranged from 10.1% to 11.7% depending on the risk premium and the applicable tax rate in the geographic location of the CGU.

• The pre-tax discount rates in 2022 ranged from 8.7% to 11.0% depending on the risk premium and the applicable tax rate in the geographic location of the CGU.

• The growth rates are based on industry growth forecasts. The Group prepares cash flow forecasts derived from the most recent financial budgets of downstream segment approved by management for financial years 2024-2026 and extrapolates cash flows for the following years based on an estimated USD/EUR inflation rates varying between 2% and 2.5%.

|  | Consolidated Financial Statements 2023 | 44

Sensitivity of Downstream assets

MOL Group performed a sensitivity analysis on the downstream cash generating unit comprising of two refineries and two petrochemical plants. The present value of the cash generating unit were tested through the indicators for which the CGU is most sensitive: headline margin, Brent oil price, natural gas price, Co2 quota price and the discount rate.

| Change in present value HUF million
Change in the present value of the CGU |
Headline margin sensitivity |
-1USD/bbl / -100EUR/t case | (772,750)
+1USD/bbl / +100EUR/t case | 772,750
Brent oil price sensitivity |
-10% case | 111,757
+10% case | (111,757)
Natural gas price sensitivity |
-10% case | 110,287
+10% case | (110,287)
CO2 quota price sensitivity |
150 EUR/t case | (74,050)
Discount rate sensitivity |
-1%point | 275,517
+1%point | (232,742)

f) Impairment of goodwill

Accounting policies

Goodwill is reviewed for impairment, annually or more frequently if events or changes in circumstances indicate that the carrying value may be impaired. Impairment is determined for goodwill by assessing the recoverable amount of the cash-generating unit (or group of cash-generating units), to which the goodwill relates. Where the recoverable amount of the cash-generating unit (or group of cash-generating units) is less than the carrying amount of the cash-generating unit (or group of cash-generating units) to which goodwill has been allocated, an impairment loss is recognised. Impairment losses relating to goodwill cannot be reversed in future periods. The Group performs its annual impairment test of goodwill as at 31 December.

The Group determines the necessity of impairment of goodwill based on the recoverable amount of cash-generating units (CGUs) to which the goodwill is allocated.

The recoverable amounts of the CGUs are determined by net present value calculations of estimated future cash flows of the cash-generating units. The key assumptions for the calculation of net present values are the nominal cash flows, the growth rates during the period and the post-tax discount rates. Management considers that such post-tax rates shall be used for discounting purposes which reflect the most to the current market circumstances, the time value of money and the risks specific to the CGUs. The pre-tax discount rates are determined by way of iteration.

In MOL Group as the overall result of impairment tests performed at the end of 2023, impairment on goodwill was only recognised on the Polish retail network. An impairment of HUF 61,257 million was recognised on the network in 2023 out of which impairment recognised on goodwill was HUF 37,714 million.

Upstream

In the Upstream segment Azeri-Chirag-Gunashli (“ACG”) oil field is the only cash-generating unit for which goodwill is allocated.

Post-tax discount rate calculated using the weighted average cost of capital (WACC) rates and country risk premium (CRP) applied to discount the forecast cash flows reflecting risks specific to the segment for goodwill impairment calculation is 7.5%.

The value in use calculations take into account the time value of money, the risks specific to the asset and the rate of return that would be expected by market for an investment with similar risk, cash flow and timing profile.

The pre-tax discount rate is calculated by way of iteration and is 10.2%.

|  | Consolidated Financial Statements 2023 | 45

Impairment assessment of the assets of ACG:

• The recoverable amount of the asset (cash-generating unit) is the value in use.

• The value in use of the ACG assets is HUF 602,070 million.

• The book value of assets including goodwill is HUF 589,794 million.

• Sensitivity analysis of the key assumptions used in impairment test shows the following effects:

§ 1 percentage point increase in the post-tax discount rate indicates a decrease of HUF 43,368 million, 1 percentage point decrease results in an increase of HUF 49,210 million in the NPV.

§ 5 USD growth in oil price indicates an increase of HUF 39,605 million, 5 USD drop in oil price indicates a decrease of HUF 39,605 million in NPV.

§ +/- 1 percentage point alteration in production indicates HUF 6,618 million difference in NPV.

Downstream

In assessing recoverable amount, the estimated future cash flows are discounted to their present value using a post-tax discount rate. The pre-tax discount rate is determined by way of iteration.

Post-tax discount rates calculated using weighted average cost of capital (WACC) rates and country risk premium (CRP) applied to discount the forecast cash flows reflecting risks specific to the segment and specific to the certain countries vary 7.9% and 9.4% in current year.

Pre-tax discount rates range from 10.1% to 10.3% depending on the risk premium and the applicable tax rate in the geographic location of the CGU.

The growth rates are based on industry growth forecasts. The Group prepares cash flow forecasts derived from the most recent financial budgets of Consumer services segment approved by management for financial years 2024-2026 and extrapolates cash flows for the following years based on an estimated USD/EUR/HUF inflation rates varying between 2% and 2.5%.

Consumer Services

In assessing recoverable amount, the estimated future cash flows are discounted to their present value using a post-tax discount rate. The pre-tax discount rate is determined by way of iteration.

Post-tax discount rates calculated using weighted average cost of capital (WACC) rates and country risk premium (CRP) applied to discount the forecast cash flows reflecting risks specific to the segment and specific to the certain countries vary between 7.8% and 10.3% in current year.

Pre-tax discount rates range from 9.5% to 12.2% depending on the risk premium and the applicable tax rate in the geographic location of the CGU.

The growth rates are based on industry growth forecasts. The Group prepares cash flow forecasts derived from the most recent financial budgets of Consumer services segment approved by management for financial years 2024-2026 and extrapolates cash flows for the following years based on an estimated USD/EUR/HUF inflation rates varying between 2% and 2.5%.

As a result of the impairment test, the total amount of goodwill on the Polish Retail network was impaired by HUF 37,714 million.

Impairment sensitivity assessment of the assets of the Slovenian Retail network:

• The recoverable amount of the asset (cash-generating unit) is the value in use.

• The value in use of the Slovenian Retail network is HUF 201,065 million.

• The book value of assets including goodwill is HUF 158,226 million.

• Sensitivity analysis of the key assumptions used in impairment test shows the following effects:

§ 1 percentage point increase in the post-tax discount rate indicates a decrease of HUF 10,718 million, 1 percentage point decrease results in an increase of HUF 11,738 million in the NPV.

§ +/- 1 percentage point alteration in gross margin indicates HUF 3,832 million difference in NPV.

§ +/- 1 percentage point alteration in fuel volume sold indicates HUF 2,142 million difference in NPV.

§ +/- 1 percentage point alteration in OPEX indicates HUF 1,874 million difference in NPV.

Corporate and other

In Hungary impairment was accounted for the goodwill recognised according to IFRS 3 on the step up acquisition of ITK Group in 2023.

No other impairment was recognised on goodwill.

|  | Consolidated Financial Statements 2023 | 46

10. Business combinations, transactions with non-controlling interests

Accounting policies

The acquisition method of accounting is used for acquired businesses by measuring assets and liabilities at their fair values upon acquisition, the date of which is determined with reference to the settlement date. For each business combination the Group decides whether non-controlling interest is stated either at fair value or at the non-controlling interests’ proportionate share of the acquiree’s fair values of net assets. The income and expenses of companies acquired or disposed of during the year are included in the consolidated financial statements from the date of acquisition or up to the date of disposal.

Intercompany balances and transactions, including intercompany profits and unrealised profits and losses – unless the losses indicate impairment of the related assets – are eliminated. The consolidated financial statements are prepared using uniform accounting policies for like transactions and other events in similar circumstances.

Subsequently the carrying amount of non-controlling interests is the initially recognised amount of those interests adjusted with the non-controlling interests’ share of changes in equity after the acquisition.

Changes in the Group’s interests in subsidiaries that do not result in a loss of control are accounted for as equity transactions and recorded directly in retained earnings.

Acquisitions

a) Closed acquisitions

Acquisition of Lotos Paliwa Sp.z.o.o

On 12 January 2022 the Group signed a set of agreements with PKN Orlen and Grupa Lotos covering the sale and purchase of several portfolio elements within Consumer Services. As a result of the transaction, MOL Group acquired 417 service stations in Poland including 270 company owned sites with a country-wide coverage and the potential to reach a top 3 position in the local fuel retail market. An additional long-term agreement provides motor fuel supply for the acquired network in Poland at competitive terms. MOL Group signed an agreement to acquire the 100% share capital of Normbenz Magyarország Kft on 11 January 2022 consisting of 79 service stations with the aim to resell to PKN Orlen Group. The Group divested a total of 185 service stations to PKN Orlen located in Hungary and Slovakia for a total consideration of EUR 219 million (using year-end FX rate HUF 87,655 million). The divested assets include 143 service stations in Hungary and 39 stations in Slovakia. The closing is expected in 2023 and 2024 years for the divested assets. The two agreements are priced at their respective fair value, that is why reallocation between the two prices is not required.

The European Commission has approved the acquisition of 100% share of Lotos Paliwa Sp. z o.o. of Poland, by MOL and the acquisition of 100% share of Normbenz Magyarország Kft and of a number of assets of MOL, by PKN Orlen S.A. of Poland on 18 July 2022. The Commission concluded that the proposed acquisitions would raise no competition concerns, given the companies' moderate combined market position and the presence of strong competitors in Poland, in Hungary and in Slovakia. The transactions were examined under the normal merger review procedure.

The deal provides an outstanding inorganic expansion opportunity and an excellent fit to the Consumer Services segment’s ambitious growth strategy.

Through the completion of the acquisition MOL’s regional footprint further diversified and the captive market extended in the largest economy of the CEE region. The purchased set of assets provide a basis for future growth in the country, where MOL had limited presence thus far.

The acquired Lotos branded, Lotos Paliwa owned network captured particularly strong market positions amongst highway stations with further organic growth opportunity and significant upside to expand non-fuel sales. The transaction covered trademark licence arrangements and the takeover of fuel cards issued by Lotos Paliwa. The average throughput of the MOL service station network is expected to improve following the closing of the transaction.

Regarding the financial implications, the transaction is expected to have a mid-term positive annual EBITDA generation potential of around USD 70 million (using year-end FX rate HUF 24,251 million) to the Consumer Services segment and it is financed from available liquidity. The deal has no adverse effect to MOL Group’s dividend payment capacity.

The agreed total purchase price amounts to USD 610 million (using year-end FX rate HUF 211,328 million), the sum of a cash consideration and a finance lease liability in relation to the purchase transaction and subject to customary adjustments.

The acquisition was successfully closed on 1 December 2022.

The measurement period is closed by November 2023 for the acquisition of the polish retail network purchase price allocation.

The assets and liabilities recognised as a result of the acquisition are as follows:

|  | Consolidated Financial Statements 2023 | 47

Lotos Paliwa
| 1 Dec 2022
| HUF million
Non-current assets | 203.791
Intangible assets | 14.271
Property, plant and equipment | 188.819
Investment | -
Other non-current asset | 701
Deferred tax asset | -
Current assets | 54.025
Inventories | 12.103
Trade and other receivables | 33.356
Cash and cash equivalents | 2.018
Other current assets | 6.548
Non-current liabilities | (54.058)
Non-current provisions | (1.127)
Long-term debt | (41.446)
Other non-current liabilities | (40)
Deferred tax liability | (11.445)
Current liabilities | (62.139)
Current provisions | (72)
Short-term debt | (1.889)
Trade and other payables | (54.323)
Income tax payable | (1.041)
Other current liabilities | (4.814)
Net assets | 141.619
MOL Group's share of net assets | 141.619
Goodwill on acquisition |
Fair value of consideration transferred | 178.991
Less: fair value of identifiable net assets acquired | (141.619)
Goodwill on acquisition | 37.372
Net cash outflow on acquisition of subsidiaries
Consideration paid in cash | 175.320
Less: cash and cash equivalent balances acquired | (2.018)
Net cash outflow | 173.302

According to IFRS 3 the following intangible assets were identified and recognised: customer relationship in the amount of HUF 2,558 million and fuel supply agreement in the amount of HUF 11,267 million.

Factors that make up the goodwill recognised include expected synergies from a complex deal. It will not be deductible for tax purposes.

The acquired company contributed the following net sales and profit (+) / loss (-) after tax for the period between the acquisition and the balance sheet date to the Group's consolidated profit for the year:

Acquired Company 1 Dec 2022 - 31 Dec 2022 | Net revenue | Profit/(loss) for the period
HUF million | HUF million
Lotos Paliwa | 68,360 | 721

As described above during the acquisition of Lotos Paliwa SP.z.o.o, MOL Group has acquired several portfolio elements and not the whole business of Lotos Paliwa. Disclosing revenue and profit information for the combined entity for 2022 is impracticable, since such data is not readily available for the acquired portfolio elements and the costs of obtaining that information would exceed its utility to readers.

The amount of acquisition-related costs recognised as an expense is HUF 1,769 million, which mainly relate to taxes payable due to the acquisition.

|  | Consolidated Financial Statements 2023 | 48

Acquisition of OMV Slovenija d.o.o.

MOL Group reached an agreement with OMV to acquire OMV’s 92.25% stake in OMV Slovenija d.o.o. from OMV Downstream GmbH as direct shareholder. The agreed purchase price is EUR 301 million (using year-end FX rate HUF 115.217 million) (100% share of OMV Slovenija) and subject to customary adjustments. The transaction includes 120 service stations across Slovenia.

The acquisition was successfully closed on 30 June 2023.

MOL is determined to ensure business continuity, relying on the professionalism and the expertise of the teams at its extended Slovenian network. OMV Slovenija d. o. o. has been renamed to MOL & INA d. o. o., with its headquarters remaining in Koper. MOL & INA as a part of MOL Group will strengthen the Group’s position on the Slovenian market and enable retail and wholesale customers to access top quality products and services more conveniently in the future. Out of the newly acquired service stations, 27 will be operating under the INA brand.

To meet European Commission requirement to complete the OMV Slovenija transaction, MOL Group in March 2023 concluded an asset sales and purchase agreement with Shell regarding 39 service stations of its joint Slovenian network. The transaction with Shell was closed in 2023.

The measurement period is not closed yet for the acquisition of the Slovenian retail network purchase price allocation.

OMV Slovenija d.o.o.
| 30 June 2023
| HUF million
Non-current assets | 118,396
Intangible assets | 3,276
Property, plant and equipment | 115,120
Current assets | 47,501
Inventories | 18,858
Trade and other receivables | 25,406
Other financial assets (current) | 62
Cash and cash equivalents | 1,447
Other current assets | 1,728
Non-current liabilities | (22,805)
Non-current provisions | (205)
Long-term debt | (7,245)
Deferred tax liability | (15,355)
Current liabilities | (31,868)
Current provisions | (11)
Short-term debt | (1,536)
Trade and other payables | (16,127)
Other current financial liabilities | (96)
Income tax payable | (166)
Other current liabilities | (13,932)
Net assets | 111,224
Acquired net assets | 111,224
Goodwill on acquisition |
Fair value of consideration transferred | 102,481
INA investment valuated on fair value before additional acquisition | 9,695
Prepayment | 12,915
Contingent consideration |
Less: fair value of identifiable net assets acquired | (111,224)
Goodwill on acquisition | 13,867
Net cash outflow on acquisition of subsidiaries
Consideration paid in cash | 102,481
Less: cash and cash equivalent balances acquired | (1,447)
Net cash outflow | 101,034

According to IFRS 3 the following intangible assets were identified and recognised: customer relationship in the amount of HUF 3,215 million.

|  | Consolidated Financial Statements 2023 | 49

Factors that make up the goodwill recognised include expected synergies from fuel supply within MOL group. It will not be deductible for tax purposes.

The acquired company contributed the following net sales and profit (+) / loss (-) after tax for the period between the acquisition and the balance sheet date to the Group's consolidated profit for the year:

Acquired Company 30 June 2023 - 31 Dec 2023 | Net revenue | Profit/(loss) for the period
HUF million | HUF million
OMV Slovenija d.o.o. | 159,739 | 1,408

If the business combination had taken place on 1 January 2023, it is estimated that the acquired activities would have generated net revenue of HUF 328,229 million and profit/(loss) for the period of HUF 8,975 million.

Acquisition of NHSZ Nemzeti Hulladékgazdálkodási Szolgáltató Kft.

MOL was announced as the winner of the Hungarian government’s concession tender for municipal waste management services. The concession agreement covers a period of 35 years. Under the terms of the agreement, MOL will be responsible for the collection of nearly 5 million tonnes of municipal solid waste, will ensure its treatment and will make related investments.

The aim of the reorganization is to achieve the extremely strict waste management targets set by the European Union.

In accordance with the concession agreement, on 28 July 2022 MOL signed an agreement with the Hungarian State to acquire 100% of the shares of NHSZ Nemzeti Hulladékgazdálkodási Szolgáltató Kft and its subsidiaries and associates.

NHSZ is a public service provider on the municipal waste market, owner of 16 subsidiaries in different percentages, responsible for serve more than 700 thousand citizens. It owns of several depos, sorting equipment, junk yards and vehicles.

MOL closed the transaction on 31 July 2023. The acquisition is in line with MOL’s 2030+ Shape Tomorrow strategy by enabling the realisation of synergies in moving to a more integrated model of waste management services. NHSZ was renamed after closing to MOHU Holding Kft.

MOL conducted an assessment of the control in each of the 17 acquired companies and identified 10 companies for full consolidation. In assessing control MOL considered its power over the investee, its right to variable returns and its ability to use power to affect the level of returns.

|  | Consolidated Financial Statements 2023 | 50

NHSZ Nemzeti Hulladékgazdálkodási Szolgáltató Kft
| 31 July 2023
| HUF million
Non-current assets | 14,119
Intangible assets | 23
Property, plant and equipment | 10,448
Other non-current asset | 3,480
Deferred tax asset | 168
Current assets | 10,167
Inventories | 251
Other financial assets (current) | 219
Income tax receivables | 41
Trade and other receivables | 3,732
Cash and cash equivalents | 5,175
Other current assets | 649
Assets classified as held for sale | 100
Non-current liabilities | (4,525)
Non-current provisions | (1,499)
Long-term debt | (2,634)
Other non-current liabilities | -
Deferred tax liability | (392)
Current liabilities | (4,238)
Current provisions | (36)
Short-term debt | (544)
Trade and other payables | (2,562)
Other financial liabilities (current) | (7)
Income tax payable | (339)
Other current liabilities | (750)
Net assets | 15,523
Of which minority's part | (895)
MOL Group's share of net assets | 14,628
Goodwill on acquisition |
Fair value of consideration transferred | 14,486
Less: fair value of identifiable net assets acquired | (14,628)
Goodwill on acquisition | (142)
Net cash outflow on acquisition of subsidiaries
Consideration paid in cash | 14,486
Less: cash and cash equivalent balances acquired | (5,040)
Net cash outflow | 9,446

The acquired company contributed the following net sales and profit (+) / loss (-) after tax for the period between the acquisition and the balance sheet date to the Group's consolidated profit for the year:

Acquired Company 31 July 2023 - 31 Dec 2023 | Net revenue | Profit/(loss) for the period
HUF million | HUF million
NHSZ Nemzeti Hulladékgazdálkodási Szolgáltató Kft. | 3,543 | (2,833)

The acquired NHSZ company controlled more subsidiaries during the year, from which some were carved out during the closing process. Disclosing revenue and profit information for the combined entity for 2023 is impracticable, since such data is not readily available for the acquired portfolio elements and the costs of obtaining that information would exceed its utility to readers.

|  | Consolidated Financial Statements 2023 | 51

b) Other acquisitions closed in 2023

MOL Group signed an agreement with BayWa AG on the purchase of 100% stake in Szarvas Biogas Plant, a waste processing plant using organic wastes to produce electricity and heat through cogeneration with a peak electric power capacity of around 4 MW (megawatts).

MOL Group strives to expand its biofuel portfolio to meet the goals set by the European Union’s Renewable Energy Directive. This acquisition is also in line with the aims of the REPowerEU action plan, which has set a high target for biogas and methane production to reasonably increase the overall energy independence of the European Union. A sense of responsibility for the security of the energy supply in the Central and Eastern European region is a fundamental part of MOL Group’s identity and mindset for operation and development.

MOL and OGD signed an agreement in which MOL acquires a 49% stake in three exploration licenses of OGD in Central Hungary. The companies are joint ventures and MOL will consolidate the companies with equity method. The cooperation between the two companies will allow MOL to explore hydrocarbon prospects in the Paleogene Basin, a geological unit located in the vicinity of Budapest.

ITK Holding’s shareholding agreement with ITK Invest Ltd was amended on 6 July 2023 and successfully closed on 19 September 2023. ITK Holding is a company focusing mainly on the operation of buses in public transportation. ITK Holding, previosly accounted for under the equity method as investments in joint ventures, was consolidated as MOL obtained control over the entities in accordance with the shareholding agreement in force. The accounting for the acquisition in accordance with IFRS 3 resulted in goodwill, which was subsequently impaired.

All of the transactions are immaterial for the Group.

c) Update on acquisition of Aurora Kunststoffe GmbH and its subsidiaries

On 31 October 2019, MOL Group has acquired 100% shareholding of Aurora Kunststoffe GmbH. As of 31 December 2023, the fair value of contingent consideration is HUF 2,719 million presented in trade and other payables, calculated by the most conservative approach.

11. Disposals

The acquisition of OMV Slovenija d.o.o. described in Note 10 was approved by the European Commission in May 2023. The approval was conditional on the divesture of 39 fuel stations in Slovenia to the Shell Group, which transaction was closed in August 2023, with insignificant result of transaction.

On 13 July 2023, MOL Group has sold its shareholding interest in Panta Fuel with insignificant net book value, the result of the transaction was also insignificant.

On 23 March 2022, MOL Plc. signed an agreement with Waldorf Production Limited covering the sale of its entire Upstream portfolio in the United Kingdom. The deal was closed on 10 November 2022. The gain on sale is 83,498 HUF million.

SWS s.r.o. Slovakian transport supporting service company was also disposed in 2022. Both the net book value and the result of the transaction was immaterial for the Group.

Assets held for sale and discontinued operations are presented in Note 19.

12. Material non-controlling interest

Accounting policies

According to IFRS 12 Disclosure of Interest in Other Entities, MOL Group discloses information about non-controlling interests’ share of the profit or loss, cash flow and net asset of the subsidiaries that have non-controlling interests that are material to the reporting entity. Materiality is assessed by the Group on the basis of the consolidated financial statements. The disclosed information is based on balances before intercompany eliminations.

INA-Industrija nafte d.d.

MOL Group has 49% shareholding interest in INA-Industrija nafte d.d. (hereinafter INA d.d.), however based on the conditions of the shareholders’ agreement MOL Group has been provided control over INA d.d. resulting in full consolidation method with 51% non-controlling interest.

Based on the SHA signed in January 2009 between MOL Plc. and the Government of the Republic of Croatia MOL is entitled to control rights through the majority both in the Supervisory Board and the Management Board. MOL is entitled to nominate 5 members to the Supervisory Board of 9 members, furthermore nominate 3 members and the President to the Management Board of 6 members. In the event of tied vote, the President of the Management Board has the tie-breaking vote.

All other NCI are immaterial for the Group.

|  | Consolidated Financial Statements 2023 | 52

Proportion of equity interest held by non-controlling interests of INA Group:

| Proportion of non-controlling interest
Name | 31 Dec 2023 | 31 Dec 2022
INA-Industrija nafte d.d. | 51% | 51%
| 31 Dec 2023 | 31 Dec 2022
| HUF million | HUF million
Accumulated balances of material non-controlling interest | 357,673 | 377,329
Profit/(Loss) allocated to material non-controlling interest | 18,416 | 94,271

The summarised financial information of INA Group is provided below. This information is based on amounts before intercompany eliminations.

Summarised statement of profit or loss | 2023 | 2022
HUF million | HUF million
Total operating income | 1,513,795 | 1,855,124
Total operating expenses | (1,402,685) | (1,663,398)
Finance income/(expense), net | (12,265) | (6,398)
Profit/(loss) before income tax | 98,845 | 185,328
Income tax (expense)/income | (19,393) | (69,875)
Profit/(loss) for the year | 79,452 | 115,453
Total comprehensive income | 36,168 | 185,142
Attributable to non-controlling interests | 18,416 | 94,271
Dividends paid to non-controlling interests | (38,072) | (26,432)

Summarised statement of financial position | 31 Dec 2023 | 31 Dec 2022
HUF million | HUF million
Current assets | 329,107 | 440,524
Non-current assets | 968,631 | 958,632
Total assets | 1,297,738 | 1,399,156
Current liabilities | (296,543) | (324,943)
Non-current liabilities | (298,746) | (333,160)
Total liabilities | (595,289) | (658,103)
Total equity | 702,449 | 741,053
Attributable to owners of parent | 344,776 | 363,724
Attributable to non-controlling interest | 357,673 | 377,329

Summarised cash flow information | 31 Dec 2023 | 31 Dec 2022
HUF million | HUF million
Cash flows from operations | 163,796 | 181,429
Cash flows used in investing activities | (158,364) | (65,195)
Cash flows used in financing activities | (78,041) | (100,680)
Increase/(decrease) in cash and cash equivalents | (72,609) | 15,554

|  | Consolidated Financial Statements 2023 | 53

13. Other non-current assets

| 31 Dec 2023 | 31 Dec 2022
| HUF million | HUF million
Obligatory level of inventory required by state legislations | 48,027 | 49,783
Advance payments for assets under construction | 22,898 | 34,253
Prepaid fees of long-term rental fees | 517 | 424
Advance payments for intangible assets | 113 | 276
Other | 440 | 819
Total | 71,995 | 85,555

14. Inventories

Accounting policies

Inventories, including work-in-progress are valued at the lower of cost and net realisable value, after provision for slow-moving and obsolete items. Net realisable value is the selling price in the ordinary course of business, less the costs of making the sale. Cost of purchased goods, including crude oil and purchased gas inventory, is determined primarily on the basis of weighted average cost. The acquisition cost of own produced inventory consists of direct materials, direct wages and the appropriate portion of production overhead expenses including royalty. Inventory with nil net realisable value is fully written off.

| 31 Dec 2023 | 31 Dec 2022
At cost | Lower of cost or net realisable value | At cost | Lower of cost or net realisable value
HUF million | HUF million | HUF million | HUF million
Work in progress and finished goods | 427,051 | 420,907 | 579,542 | 564,673
Purchased crude oil | 203,861 | 203,387 | 212,399 | 211,926
Other goods for resale | 106,165 | 105,424 | 126,098 | 122,987
Other raw materials | 117,897 | 98,855 | 114,868 | 96,972
Purchased natural gas | 2,087 | 2,087 | 4,052 | 4,052
Inventories classified as held for sale | (87) | (87) | (3,565) | (3,565)
Total | 856,974 | 830,573 | 1,033,394 | 997,045

During the year 2023 HUF 6,549,781 million of inventories have been recognised as an expense, of which impairment of HUF 9,142 million has been recorded (2022: HUF 33,813 million), mainly on raw materials. Inventories are driven by strengthening HUF, lower crude oil and product prices and lower purchased alternative crude inventory volumes.

Inventories pledged as security

The carrying amount of inventories pledged as security for liabilities is HUF 3,095 million as of 31 December 2023.

15. Other current assets

| 31 Dec 2023 | 31 Dec 2022
| HUF million | HUF million
Prepaid and recoverable taxes and duties (excluding income taxes) | 91,018 | 48,552
Advance payments | 28,068 | 30,102
Prepaid expenses | 14,137 | 13,804
Dividend receivable | 301 | 3,526
Other | 876 | 579
Total | 134,400 | 96,563

Other item contains mainly revenue accruals and receivables regarding employees.

|  | Consolidated Financial Statements 2023 | 54

16. Provisions

Accounting policies

Provision is made for the best estimate of the expenditure required to settle the present obligation (legal or constructive) as a result of past event where it is considered to be probable that a liability exists, and a reliable estimate can be made of the outcome. Long-term obligation is discounted to the present value. Where discounting is used, the carrying amount of the provisions increases in each period to reflect the unwinding of the discount by the passage of time. This increase is recognised as interest expense. Provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimate.

Where it is possible that a settlement may be reached or it is not possible to make a reliable estimate of financial impact, appropriate disclosure is made but no provision created.

Provision for Environmental expenditures

Environmental expenditures that relate to current or future economic benefits are expensed or capitalised as appropriate. Liabilities for environmental costs are recognised when environmental assessments or clean-ups are probable, and the amount recognised is the best estimate of the expenditure required. In case of long-term liability, the present value of the estimated future expenditure is recognised.

Provision for Field abandonment

The Group records a provision upon initial recognition for the present value of the estimated future cost of abandonment of oil and gas production facilities following the termination of production. At the time the obligation arises, it is provided for in full by recognising the present value of future field abandonment and restoration expenses as a liability. An equivalent amount is capitalised as part of the carrying amount of long-lived assets. The estimate is based upon current legislative requirements, technology and price levels. A corresponding item of property, plant and equipment of an amount equivalent to the provision is also created. This is subsequently depreciated as part of the capital costs of the facility or item of plant (on a straight-line basis in Downstream and using the unit-of production method in Upstream). Any change in the present value of the estimated expenditure is reflected as an adjustment to the provision and the corresponding property, plant and equipment.

Provision for Redundancy

The employees of the Group are eligible, immediately upon termination, for redundancy payment pursuant to the terms of Collective Agreement between the Group and its employees. The amount of such a liability is recorded as a provision in the consolidated statement of financial position when the workforce reduction programme is defined, adopted, announced or has started to be implemented.

Provision for Long-term employee benefits

The cost of providing benefits under the Group’s defined benefit plans is determined separately for each plan using the projected unit credit actuarial valuation method. Actuarial gains and losses of retirement benefits are recognised as other comprehensive income immediately. Past service costs, resulting from the introduction of, or changes to the defined benefit scheme are recognised as an expense immediately.

Net interest expense is calculated on the basis of the net defined benefit obligation and disclosed as part of the finance result. Differences between the return on plan assets and interest income on plan assets included in the net interest expense is recognised in other comprehensive income.

Provision for Legal claims

Provision is made for legal cases if the negative expected outcome of the legal case is more likely than not.

Provision for Emission quotas

The Group recognises provision for the estimated CO2 emissions costs when actual emission exceeds the emission rights granted and still held. When actual emission exceeds the amount of emission rights granted, provision is recognised for the exceeding emission rights based on carrying amount of purchased quotas held for compliance, the purchase price of allowance concluded in forward contracts, and for any residual excess at market quotations at the reporting date. In addition, the Group recognises provision for estimated costs of Upstream emission reduction quotas (UER) intended to be used to fulfil obligations stipulated by EU Fuel Quality Directive.

Significant accounting estimates and judgements

A judgement is necessary in assessing the likelihood that a claim will succeed, or liability will arise, and to quantify the possible range of any settlement. Due to the inherent uncertainty on this evaluation process, actual losses may be different from the liability originally estimated.

Scope, quantification and timing of environmental and field abandonment provision

The Group holds provisions for the future decommissioning of oil and natural gas production facilities and pipelines at the end of their economic lives. Most of these decommissioning events are many years in the future and the precise requirements that will have to be met when the removal event occurs are uncertain. Decommissioning technologies and costs are constantly changing, as well as political, environmental, safety and public expectations. Management uses its previous experience and its own interpretation of the respective legislation to determine environmental and field abandonment provisions.

Actuarial estimates applied for calculation of retirement benefit obligations

The cost of defined benefit plans is determined using actuarial valuations, which involves making assumptions about discount rates, future salary increases and mortality or fluctuation rates. Due to the long-term nature of these plans, such estimates are subject to significant uncertainty.

Outcome of certain litigations

MOL Group entities are parties to a number of litigations, proceedings and civil actions arising in the ordinary course of business. Other provisions and liabilities are recognised in the period when it becomes probable that there will be a future outflow of funds resulting from past events and the amount of cash outflow can be reliably estimated. The timing of recognition and quantification of the liability require the application of judgement to existing facts and circumstances, which can be subject to change. Since the cash outflows can take place many years in the future, the carrying amounts of provisions and liabilities are reviewed regularly and adjusted to take account of changing facts and circumstances.

|  | Consolidated Financial Statements 2023 | 55

| Environ-mental | Field abandon-ment | Redundancy | Long-term employee benefits | Legal claims | Emission quotas and other | Total
| HUF million | HUF million | HUF million | HUF million | HUF million | HUF million | HUF million
Balance as of 1 Jan 2022 | 74,742 | 570,114 | 2,035 | 26,152 | 8,107 | 84,230 | 765,380
Acquisition / (sale) of subsidiaries | - | (119,688) | - | 835 | - | (60) | (118,913)
Additions and revision of previous estimates | 5,635 | (47,867) | 3,075 | 7,878 | 1,999 | 88,464 | 59,184
Unwinding of the discount | 807 | 12,511 | - | 415 | - | 283 | 14,016
Currency differences | 4,476 | 39,496 | 286 | 646 | 549 | (517) | 44,936
Provision used during the year | (6,173) | (130) | (2,582) | (1,777) | (4,859) | (47,105) | (62,626)
Other movements | - | - | - | (2,529) | - | - | (2,529)
Balance as of 31 Dec 2022 | 79,487 | 454,436 | 2,814 | 31,620 | 5,796 | 125,295 | 699,448
Acquisition / (sale) of subsidiaries | 1,434 | (68) | (23) | 77 | (932) | 578 | 1,066
Additions and revision of previous estimates | 940 | (32,394) | 306 | 12,453 | 1,638 | 105,870 | 88,813
Unwinding of the discount | 1,774 | 18,963 | - | 2,589 | - | 1,831 | 25,157
Currency differences | (2,682) | (14,400) | (62) | (419) | (228) | (7,643) | (25,434)
Provision used during the year | (5,609) | (8,668) | (1,128) | (6,034) | (2,118) | (93,530) | (117,087)
Other movements | - | - | - | - | - | - | -
Balance as of 31 Dec 2023 | 75,344 | 417,869 | 1,907 | 40,286 | 4,156 | 132,401 | 671,963
Current portion 31 Dec 2022 | 4,526 | 8,350 | 1,749 | 4,270 | 766 | 95,340 | 115,001
Non-current portion 31 Dec 2022 | 74,961 | 446,086 | 1,065 | 27,350 | 5,030 | 29,955 | 584,447
Current portion 31 Dec 2023 | 5,416 | 279 | 1,105 | 4,939 | 348 | 102,661 | 114,748
Non-current portion 31 Dec 2023 | 69,928 | 417,590 | 802 | 35,347 | 3,808 | 29,740 | 557,215

Provision for Environmental expenditures

As of 31 December 2023, provision of HUF 75,344 million has been made for the estimated cost of remediation of past environmental damages, primarily soil and groundwater contamination and disposal of hazardous wastes, such as acid tar, in Hungary, Croatia, Slovakia and Italy. The provision is made on the basis of assessments prepared by MOL Group’s internal environmental expert team. The amount of the provision has been determined on the basis of existing technology at current prices by calculating risk-weighted cash flows for a period up to 12 years, in case of upstream segment up to 50 years, discounted using estimated risk-free real interest rates.

MOL Group prepared a sensitivity analysis on the cash flow period applied on environmental provision. The analysis examined the impact of a +/- five-year change in the cash flow forecast period on the environmental provision compared to the year-end liability recognised. During the assessment the same discount rates were applied.

The results of the analysis are summarised in the table below showing the absolute and percentage change in the liability already recognised in the balance sheet:

|  | - 5 years |  | + 5 years
|  | HUF million |  | HUF million
Sensitivity analysis of environmental provision increase/(decrease) | % change in the amount of the liability |  | % change in the amount of the liability |
MOL | (5.6) | (421) | 4.7 | 351
MPK | (9.2) | (787) | 7.6 | 655
INA | (7.5) | (1,028) | 9.6 | 1,324
IES | (32.0) | (115) | 32.0 | 115
Slovnaft | (37.8) | (7,824) | 34.2 | 7,082
Total |  | (10,175) |  | 9,527

|  | Consolidated Financial Statements 2023 | 56

Provision for Field abandonment

As of 31 December 2023, provision of HUF 417,869 million has been made for estimated total costs of plugging and abandoning wells upon termination of production. Approximately 10% of these costs are expected to be incurred between 2024 and 2028 and the remaining 90% between 2029 and 2078. The amount of the provision has been determined on the basis of management’s understanding of the respective legislation, expected timing of cash flows calculated at current prices and discounted using estimated risk-free real interest rates based on current the best estimate of the management. Due to the climate change and energy transformation the timing of the expected cash flows of the field abandonement has high uncertainty and may change significantly in subsequent periods depending on the pace of the transition. Activities related to field suspension, such as plugging and abandoning wells upon termination of production and remediation of the area are planned to be performed by hiring external resources. Based on the judgement of the management, there will be sufficient capacity available for these activities in the area. As required by IAS 16 – Property, Plant and Equipment, the qualifying portion of the provision has been capitalised as a component of the underlying fields. Decommissioning rates used in the calculation of the liability are in a range of 5.6% and 27.9% depending on the risk free rate, the inflation and the country risk premium in the given country.

MOL Group performed sensitivity analysis on the field abandonment liability by examining the +/- 1 percentage point change of the decommissioning rate. Decommissioning rate higher by one percentage point reduces the provision by 15%, while a decommissioning rate lower by one percentage point increases the provision by 19%.

Provision for Redundancy

As part of continuing efficiency improvement projects, INA d.d., IES S.p.A. and other Group members decided to further optimise workforce. As the management is committed to these changes and the restructuring plan was communicated in detail to parties involved, the Group recognised a provision for the net present value of future redundancy payments and related tax and contribution. Relating to the restructuring of activities in Mantova, a provision for redundancy of HUF 9,145 million was recognised at IES S.p.A. in 2013 out of which HUF 462 million remained as of 31 December 2023. In 2015, a provision of HUF 9,804 million, in 2020, of HUF 6,269 million, in 2022, of HUF 3,015 million, and in 2023 of HUF 100 million was made for redundancy programme at INA d.d. out of which HUF 913 million remained as of 31 December 2023. The closing balance of provision for redundancy is HUF 1,907 million as of 31 December 2023 (31 December 2022: HUF 2,814 million).

Provision for Long-term employee benefits

As of 31 December 2023, the Group has recognised a provision of HUF 40,286 million to cover its estimated obligation regarding future retirement and jubilee benefits payable to current employees expected to retire from Group entities. These entities operate benefit schemes that provide lump sum benefit to all employees at the time of their retirement. MOL employees are entitled to 3 times of their final monthly salary regardless of the period of service, while MOL Petrochemicals and Slovnaft, a.s. provide a maximum of 2 and 7 months of final salary respectively, depending on the length of service period. In addition to the above-mentioned benefits, in Hungary the retiring employees are entitled to the absence fee for their notice period – which lasts for 1-3 months depending on the length of the past service – which is determined by the Hungarian Labour Code. None of these plans have separately administered funds; therefore, there are no plan assets. The amount of the provision has been determined using the projected unit credit method, based on financial and actuarial variables and assumptions that reflect relevant official statistical data which are in line with those incorporated in the business plan of the Group.

| 2023 | 2022
| HUF million | HUF million
Present value of total long-term employee benefit obligation at the beginning of the year | 31,620 | 26,152
Acquisitions / (disposals) | 77 | 835
Past service cost | 4,788 | 8,620
Current service cost | 3,298 | 1,862
Interest costs | 2,589 | 415
Provision used during the year | (6,034) | (1,777)
Net actuarial (gain) / loss | 4,367 | (2,604)
from which: |  |
Retirement benefit (See Note 8) | 2,664 | (1,615)
Jubilee benefit | 1,703 | (989)
Exchange adjustment | (419) | 646
Other movements | - | (2,529)
Present value of total long-term employee benefit obligation at year end | 40,286 | 31,620

The other movements contain reclassification in long-term employee benefits between provision and other current and non-current liabilities.

|  | Consolidated Financial Statements 2023 | 57

The following table summarises the components of net benefit expense recognised in the statement of total comprehensive profit or loss as employee benefit expense regarding provision for long-term employee retirement benefits:

| 2023 | 2022
| HUF million | HUF million
Current service cost | 3,298 | 1,862
Net actuarial (gain)/loss | 1,703 | (989)
Past service cost | 4,788 | 8,620
Balance as at year end | 9,789 | 9,493

The following table summarises the main financial and actuarial variables and assumptions based on which the amount of retirement benefits has been determined:

| 2023 | 2022
Discount rate in % | 2.79 - 7.12 | 1.82 - 13.04
Average wage increase in % | 0.6 - 12.0 | 0.6 - 10.0
Mortality index (male) | 0.03 - 3.01 | 0.03 - 3.01
Mortality index (female) | 0.02 - 1.33 | 0.02 - 1.33

Actuarial (gains) and losses comprises of the following items:

| Retirement benefits | Jubilee benefits
| 2023 | 2022 | 2023 | 2022
| HUF million | HUF million | HUF million | HUF million
Actuarial (gains)/losses arising from changes in demographic assumptions | (161) | 374 | (229) | 48
Actuarial (gains)/losses arising from changes in financial assumptions | 2,114 | (4,412) | 1,525 | (1,129)
Actuarial (gains)/losses arising from experience adjustments | 711 | 2,423 | 407 | 92
Total actuarial (gains)/losses | 2,664 | (1,615) | 1,703 | (989)

A quantitative sensitivity analysis for significant assumptions as at 31 December is, as shown below:

| Retirement benefits | Jubilee benefits
| 2023 | 2022 | 2023 | 2022
| HUF million | HUF million | HUF million | HUF million
Discount rate: |  |  |  |
0.5% decrease | 821 | 3,016 | 616 | 938
0.5% increase | (762) | (2,031) | (576) | (745)
Termination rate: |  |  |  |
50% decrease | 4,186 | 1,570 | 3,210 | 1,319
50% increase | (2,977) | (1,270) | (2,481) | (1,090)

Provision for legal claims

As of 31 December 2023, provision of HUF 4,156 million (31 December 2022: HUF 5,796 million) has been made for estimated total future losses from litigations.

Provision for emission quotas and other provisions

As of 31 December 2023, the Group has recognised a provision of HUF 90,852 million for the shortage of emission quotas (31 December 2022: 80,482 million). The amount reported as at 31 December 2023 also includes provision for estimated costs of UER quotas in the amount of HUF 1,603 million (31 December 2022: HUF 2,487 million). For further information regarding the calculation method of estimated cost please refer to the accounting policy section.

As of 31 December 2023, the Group had available 3,675,494 (31 December 2022: 3,731,675) free emission quotas granted by the Hungarian, Croatian and Slovakian authorities. The total emissions during 2023 amounted to equivalent of 5,840,026 tons of emission quotas (2022: 5,775,073 tons).

As of 31 December 2023, the Group has recognised a provision of HUF 583 million in relation to IFRS 9 requirements.

|  | Consolidated Financial Statements 2023 | 58

17. Other non-current liabilities

| 31 Dec 2023 | 31 Dec 2022
| HUF million | HUF million
Government grants received (see Note 9) | 21,641 | 22,357
Received and deferred other subsidies | 7,666 | 6,666
Deferred compensation for property, plant and equipment | 3,909 | 4,045
Deferred income for apartments sold | 1,348 | 1,409
Liabilities to government for sold apartments | 198 | 338
Other | 5,528 | 4,443
Total | 40,290 | 39,258

Other item contains mainly the liability of customer loyalty points and advances received from customers.

18. Other current liabilities

| 31 Dec 2023 | 31 Dec 2022
| HUF million | HUF million
Taxes, contributions payable (excluding corporate tax any mining royalty) | 230,508 | 233,770
Amounts due to employees | 36,978 | 42,886
Advances from customers | 23,502 | 22,002
Custom fees payable | 7,243 | 10,407
Fee payable for strategic inventory storage | 4,425 | 4,171
Government subsidies received and accrued (see Note 9) | 2,929 | 2,789
Other accrued incomes | 1,899 | 3,830
Dividend payable | 785 | 765
Mining royalty | - | 23,878
Other | 6,787 | 6,392
Total | 315,056 | 350,890

Taxes, contributions payable mainly contributions to social security, value added tax and excise tax.

19. Asset held for sale and discontinued operation

A. Asset held for sale

Accounting policies

Non-current assets and disposal groups are classified as held for sale if their carrying amounts are to be realised by sale rather than through continued use. This is the case when the sale is highly probable, and the asset or disposal group is available for immediate sale in its present condition. Management must be committed to the sale, which should be expected to qualify for recognition as a completed sale within one year from the date of classification as held for sale, and actions required to complete the plan of sale should indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn.

Immediately before the initial classification of the asset as held for sale, impairment test shall be carried out. Non-current assets and disposal groups classified as held for sale are measured at the lower of carrying amount and fair value less costs to sell. Property, plant and equipment and intangible assets are no longer depreciated or amortised once classified as held for sale.

As of 31 December 2023, assets held for sale contained mainly service stations located in Hungary and Slovenia.

As of 31 December 2022, assets held for sale contained service stations located in Hungary, Slovakia and Slovenia and investment in joint venture Terra mineralna gnojiva.

|  | Consolidated Financial Statements 2023 | 59

| 31 Dec 2023 | 31 Dec 2022
Assets and liabilities held for sale | HUF million | HUF million
Assets |  |
Property, plant and equipment | 8,928 | 27,696
Intangible assets | 486 | 490
Investment in associated companies and joint ventures | - | 11,004
Other non-current financial assets | 100 | 275
Deferred tax assets | 118 | 118
Inventories | 87 | 3,565
Other current assets | 53 | 215
Assets classified as held for sale | 9,772 | 43,363
Liabilities |  |
Trade and other payables | - | 2,161
Liabilities related to assets classified as held for sale | - | 2,161

B. Discontinued operation

Accounting policies

Discontinued operation is a component of an entity that either has been disposed of, or is classified as held for sale and:

• represents a separate major business line or geographical area of operations;

• its cash flows and operations are clearly distinguishable from the rest of the entity (both operationally and from financial reporting point of view);

• a single co-ordinate plan is in place to sell or otherwise dispose of it;

• a subsidiary acquired exclusively to resell it also qualifies as a discontinued operation.

In addition to the measurement and presentation requirements defined for disposal groups, the following disclosures are specified for discontinued operations:

• On the face of the income statement, the post-tax profit or loss from the discontinued operations and on the disposal or measurement to fair value (all other captions of the income statement therefore relate to continuing operations only)

• In the notes a detailed breakdown of this profit or loss

• Net cash flows attributable to the discontinued operations

On 23 March 2022, MOL Plc. signed an agreement with Waldorf Production Limited covering the sale of its entire Upstream portfolio in the United Kingdom.

The divested offshore assets included MOL Plc.’s 20% stake in the Catcher field, a 50% stake in Scolty & Crathes and a 21.8% stake in Scott as well as stakes in a number of other licences. MOL Plc.’s UK working interest production peaked above 18 mboepd in 2019 and was falling in 2020 and 2021, accordingly Q4 2021 production was marginally above 12 mboepd. MOL’s corresponding proved and probable reserves (SPE 2P) amounted to 14.9 MMboe at the end of 2021.

Waldorf offered a base cash consideration of USD 305 million, which was subject to customary purchase price adjustments and was based on an economic effective date of January 1, 2021. In addition, the agreement contained an earn-out scheme mainly dependent on oil prices during 2022-2025. Please refer to Note 22 for further information.

MOL Plc. has successfully closed the deal with Waldorf Production Limited regarding the sale of its entire E&P portfolio in the United Kingdom on 10 November 2022. As a result of the transaction, Waldorf retained all future field abandonment liabilities.

List of divested assets:

Asset | MOL Working Interest
Greater Catcher Area | 20.00%
Scott | 21.83%
Telford | 1.59%
Rochelle | 20.71%
Scolty & Cratches | 50.00%
Broom | 29.00%
Brent Pipeline System | 1.77%
Sullom Voe Terminal | 0.72%

The following tables include financial performance and cash flow information of the discontinued operation:

|  | Consolidated Financial Statements 2023 | 60

|  | 2023 | 2022
| HUF million | HUF million
Net sales |  | - | 118,983
Other operating income |  | - | 84,797
Total operating income |  | - | 203,780
Raw materials and consumables used |  | - | 8,828
Employee benefits expense |  | - | 638
Depreciation, depletion, amortisation and impairment |  | - | (17,291)
Other operating expenses |  | 2,471 | 672
Total operating expenses |  | 2,471 | (7,153)
Profit from discontinued operation |  | (2,471) | 210,933
Finance income |  | 2,022 | 23,377
Finance expense |  | - | 8,900
Total finance expense, net |  | 2,022 | 14,477
Profit/(Loss) before tax from discontinued operation |  | (449) | 225,410
Income tax expense |  | - | 2,113
Profit / (Loss) for the period from discontinued operations |  | (449) | 223,297

| 2023 | 2022
| HUF million | HUF million
Profit/(Loss) before tax from discontinued operation | (449) | 225,410
Cash flows from operations | - | 108,062
Cash flows used in investing activities | 30,550 | 61,524
Cash flows used in financing activities | - | (120,161)

|  | 2022
| HUF million
Non-current assets |  | 92,930
Current assets |  | 91,748
Total assets |  | 184,678
Non-current liabilities |  | (137,128)
Current liabilities |  | (45,305)
Total liabilities |  | (182,433)
Non-controlling interest |  | -
Net assets sold |  | 2,245
Cash consideration received |  | 9,122
Fair value of contingent consideration |  | 57,566
Gain on sale before income tax and reclassification of foreign currency translation reserve | 64,443
Reclassification of foreign currency translation reserve |  | 19,055
Gain on sale after income tax |  | 83,498
Analysis of cash in/outflow on sales |  |
Cash consideration received |  | 9,122
Net cash disposed of during the sale |  | (43,942)
Net cash in/outflow |  | (34,820)

|  | Consolidated Financial Statements 2023 | 61

Financial instruments, capital and financial risk management

This section explains policies and procedures applied to manage the Group’s capital structure and the financial risks the Group is exposed to. This section also describes the financial instruments applied to fulfil these procedures. Hedge accounting related policies and financial instruments disclosures are also provided in this section.

Accounting policies

Initial recognition

Financial instruments are recognised initially at fair value (including transaction costs, for assets and liabilities not measured at fair value through profit or loss) when the entity becomes a party to the contractual provisions of the instrument. Trade receivables are recognised at transaction price if they do not contain a significant financing component. A regular way purchase or sale of financial assets is recognised using settlement date accounting.

Financial assets - Classification

The Group’s financial assets are classified at the time of initial recognition depending on their nature and purpose. To determine which measurement category a financial asset falls into, it should be first considered whether the financial asset is an investment in an equity instrument or a debt instrument. Equity instruments should be classified as fair value to profit or loss, however if the equity instrument is not held for trading, fair value through other comprehensive income option can be elected at initial recognition. If the financial asset is a debt instrument the following assessment should be considered in determining its classification. All derivatives in scope of IFRS 9 are measured at fair value. Value changes are recognised in profit or loss unless the entity has elected to apply hedge accounting by designating the derivative as a hedging instrument in an eligible hedging relationship. In case of deliverable transactions, which are part of normal sales and purchases of the entity ,the accounting treatment of sale of goods shall be applied.

Amortised cost

Financial instruments measured at amortised cost are those financial assets that are held within a business model whose objective is to hold financial assets in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Fair value through other comprehensive income

Financial assets at fair value through other comprehensive income are those financial assets that is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Fair value through profit or loss

Financial assets at fair value through profit or loss include financial assets which are not classified in any of the two preceding categories or financial instruments designated upon initial recognition as at fair value through profit or loss.

Financial liabilities – Classification

By default, financial liabilities are measured at amortised cost, unless they are required to be measured at fair value through profit or loss or the entity has opted to measure a liability at fair value through profit or loss. A financial liability is required to be measured at fair value through profit or loss in case of liabilities that are classified as ‘held for trading’ and derivatives. An entity can, at initial recognition, irrevocably designate a financial liability as measured at fair value through profit or loss (fair value option) where doing so results in more relevant information, because either:

• it eliminates or significantly reduces a measurement or recognition inconsistency, or

• a group of financial liabilities or financial assets and financial liabilities is managed, and its performance is evaluated on a fair value basis.

Subsequent measurement

Subsequent measurement depends on the classification of the given financial instrument.

Amortised cost

The asset or liability is measured at the amount recognised at initial recognition minus principal repayments, plus or minus the cumulative amortisation of any difference between that initial amount and the maturity amount, and in case of financial assets any loss allowance. Interest income or expense is calculated using the effective interest method and is recognised in profit and loss. Changes in the carrying amounts are recognised in profit and loss when the asset is derecognised or reclassified.

Fair value through other comprehensive income – debt instrument

The asset is measured at fair value. Interest revenue, impairment gains and losses, and foreign exchange gains and losses, are recognised in profit and loss on the same basis as for amortised cost assets. Changes in fair value are recognised in other comprehensive income. When the asset is derecognised or reclassified, changes in fair value previously recognised in other comprehensive income and accumulated in equity are reclassified to profit and loss on a basis that always results in an asset measured at fair value through other comprehensive income having the same effect on profit and loss as if it were measured at amortised cost.

Fair value through other comprehensive income – equity instrument

Dividends are recognised when the entity’s right to receive payment is established, it is probable the economic benefits will flow to the entity and the amount can be measured reliably. Dividends are recognised in profit and loss unless they clearly represent recovery of a part of the cost of the investment, in which case they are included in other comprehensive income. Changes in fair value are recognised in other comprehensive income and are never recycled to profit and loss, even if the asset is sold.

Fair value through profit or loss

The asset or liability is measured at fair value. Changes in fair value are recognised in profit and loss as they arise.

|  | Consolidated Financial Statements 2023 | 62

Fair value measurement

Fair value of instruments is determined by reference to quoted market prices at the close of business on the balance sheet date without any deduction for transaction costs. For investments where there is no quoted market price, fair value is determined by reference to the current market value of another instrument which is substantially the same or is calculated based on the expected cash flows of the underlying net asset base of the investment.

Derecognition of Financial Instruments

Derecognition of a financial asset takes place when the Group no longer controls the contractual rights that comprise the financial asset, which is normally the case when the instrument is sold, or all the cash flows attributable to the instrument are passed through to an independent third party. When the Group neither transfers nor retains all the risks and rewards of the financial asset and continues to control the transferred asset, it recognises its retained interest in the asset and a liability for the amounts it may have to pay.

A financial liability should be removed from the balance sheet when, and only when, it is extinguished, that is, when the obligation specified in the contract is either discharged or cancelled or expires.

Hedging

For the purpose of hedge accounting, hedges are classified as either:

• cash flow hedges or

• hedges of a net investment in a foreign operation.

At the inception of a hedge relationship, the Group formally designates and documents the hedge relationship to which the Group wishes to apply hedge accounting together with the risk management objective and strategy for undertaking the hedge. The documentation includes identification of the hedging instrument, the hedged item or transaction, the nature of the risk being hedged and how the entity will assess the hedging instrument’s effectiveness in offsetting the exposure to changes in the hedged item’s fair value or cash flows attributable to the hedged risk. Such hedges are expected to be effective in achieving offsetting changes in fair value or cash flows and are assessed on an ongoing basis to determine that they actually have been highly effective throughout the financial reporting periods for which they were designated. The Group applies the rules of IFRS 9 in case of hedge accounting.

Hedges which meet the strict criteria for hedge accounting are accounted for as follows:

Cash flow hedges

Cash flow hedges are hedges of the exposure to variability in cash flows that is attributable to a particular risk associated with a recognised asset or liability or a highly probable forecast transaction that could affect the statement of profit or loss. The effective portion of the gain or loss on the hedging instrument is recognised directly as other comprehensive income, while the ineffective portion is recognised in the statement of profit or loss.

Amounts taken to other comprehensive income are transferred to the statement of profit or loss when the hedged transaction affects the statement of profit or loss. Where the hedged item is the cost of a non-financial asset or liability, the amounts previously taken to equity are transferred to the initial carrying amount of the non-financial asset or liability.

If the forecast transaction is no longer expected to occur, amounts previously recognised in other comprehensive income are transferred to the statement of profit or loss. If the hedging instrument expires or is sold, terminated or exercised without replacement or rollover, or if its designation as a hedge is revoked, amounts previously recognised in other comprehensive income remain in other comprehensive income until the forecast transaction occurs. If the related transaction is not expected to occur, the amount is taken to the statement of profit or loss.

Hedges of a net investment

Hedges of a net investment in a foreign operation, including a hedge of a monetary item that is accounted for as part of the net investment, are accounted for in a way similar to cash flow hedges. Gains or losses on the hedging instrument relating to the effective portion of the hedge are recognised as other comprehensive income while any gains or losses relating to the ineffective portion are recognised in the statement of profit or loss. On disposal of the foreign operation, the cumulative value of any such gains or losses recognised as other comprehensive income is transferred to the statement of profit or loss.

Impairment of Financial Assets

The impairment model of financial assets is based on the premise of providing for expected losses. The loss allowances for financial assets are based on assumptions about risk of default and expected loss rates. As a general approach, impairment losses on a financial asset or group of financial assets are recognised for expected credit losses at an amount equal to:

• 12-month expected credit losses (expected credit losses that result from those default events on the financial instrument that are possible within 12 months after the reporting date), or

• full lifetime expected credit losses (expected credit losses that result from all possible default events over the life of the financial instrument).

The loss allowance for financial instruments is measured at an amount equal to full lifetime expected losses if the credit risk of a financial instrument has increased significantly since initial recognition. If the credit risk of the financial instrument is low at the reporting date it can be assumed that credit risk on the financial instrument has not increased significantly since initial recognition and 12-month expected credit losses can be applied. The Group determines significant increase in credit risk in case of debt securities based on credit rating agency ratings. As there is a rebuttable presumption that the credit risk on a financial asset has increased significantly since initial recognition when contractual payments are more than 30 days past due assessment is required on a case-by-case basis whether the credit risk significantly increased in that financial asset when such an event occurs.

Additionally, the Group applies the simplified approach to recognise full lifetime expected losses from origination for trade receivables, IFRS 15 contract assets and lease receivables. For all other financial instruments, general approach is applied.

The Group calculates the expected credit loss on trade receivables as the average of yearly historical loss rates of the last three years multiplied by the forward-looking element. The forward-looking element is based on positive correlation between banking sector credit losses and one year lag of unemployment rate. In case of other financial assets the expected credit loss of the instrument will be determined by multiplying the probability of default rate of the instrument with the loss given default of the instrument.

An entity shall recognise in profit or loss, as an impairment gain or loss, the amount of expected credit losses (or reversal) that is required to adjust the loss allowance at the reporting date.

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Independently of the two approaches mentioned above, impairment losses recognised where there is an objective evidence on impairment due to a loss event and this loss event significantly impacts the estimated future cash flows of the financial asset or group of financial assets. These are required to be assessed on a case-by-case basis. The maximum amount of impairment accounted for by the Group is 100% of the unsecured part of the financial asset. The amount of loss is recognised in the statement of profit or loss. The following indicatators are objective evidence for impairment, but it is not limited to it:

• contractual payment is 180 days past due

• default of the issuer

• a breach of contract, such as a default or past-due event;

• partial release of claim

• legal procedure started against the debtor

• the disappearance of an active market for the financial asset because of financial difficulties

If the expected cash inflow of the financial asset significantly exceeds its carrying amount (the criteria of the impairment only partially or not at all exist), the impairment that was recognised earlier must be reversed partly or fully. As a result of the reversal the amount of the receivable must not exceed the original outstanding receivable

Significant accounting estimates and judgements

For determination of fair value, management applies estimates of the future trend of key drivers of such values, including, but not limited to yield curves, foreign exchange and risk-free interest rates, and in case of the conversion option volatility of MOL share prices and dividend yield.

The loss allowances for financial assets are based on assumptions about risk of default and expected loss rates. The Group uses judgement in making these assumptions and selecting the inputs to the impairment calculation, based on the Group’s past history and existing market conditions, as well as forward-looking estimates at the end of each reporting period.

20. Financial risk and capital management

Financial risk management

Financial risk management is a centralised function at MOL Group., which makes possible to monitor and measure all financial risks centrally. As a result, Treasury liquidity and Financial Risk Report are submitted to the senior management quarterly.

As a general approach, risk management considers the business as a well-balanced integrated portfolio. MOL Group. actively manages its commodity exposures for the following purpose:

· protection of financial ratios and targeted financial results

· reducing the exposure of cash flow to market price fluctuations

Management of Covenants

The Group monitors capital structure using net gearing ratio, which is net debt divided by total capital plus net debt. The Group is currently in low net gearing status, the credit metrics have been decreased in 2023. As of 31 December 2023 the net debt/EBITDA is at 0.59x level (2022: 0.3x) while the net gearing is 14% (2022: 11%).

Capital management

The primary objective of the MOL Group’s capital management is to ensure that it maintains a strong credit rating and healthy capital ratios in order to support its business and maximise shareholder value.

The MOL Group manages its capital structure and makes adjustments to it in light of changes in economic conditions.

2x is the early warning indicator in net debt to EBITDA where MOL Group might consider making changes in its capital structure. Since net debt to EBITDA ratio stabilized well below 1 during 2023, there is no open decision point on it.

The long-term healthy net gearing ratio is expected to be 30% debt and 70% equity at MOL Group. If the ratio diverges permanently from this level the MOL Group might consider making changes in its capital structure. Since the ratio does not differ from the 30% significantly (14% in 2023) there is no open decision point on it. For the calculation of the net gearing and net debt/EBITDA ratio please refer to Note 20/C.

To maintain or adjust the capital structure, the MOL Group may adjust the dividend payment to shareholders, return capital from shareholders or issue new shares. Treasury share (put-call option) transactions are also applied for such purposes.

a) Key exposures

Risk Management identifies and measures the key risk drivers and quantifies their impact on the MOL Group’s operating results. MOL Group is monitoring key exposures, the diesel crack spread, the crude oil price and gasoline crack spread have the biggest contribution to the cash flow volatility.

|  | Consolidated Financial Statements 2023 | 64

Commodity price risk

MOL Group as an integrated oil and gas company is exposed to commodity price risk on demand and supply side as well. The main commodity risks stem from the fact downstream processing more crude oil than our own crude oil production. In Upstream MOL Group has long position in crude oil and in Downstream MOL Group has a long position in refinery margin. Investors buying oil industry shares are generally willing to take the risk of oil business so commodity price risk should not be fully eliminated from the cash flow. When necessary, commodity hedging is considered to eliminate risks other than ‘business as usual’ risks or general market price volatility.

In 2023 MOL Group. concluded short and mid-term commodity swap and option transactions. These transactions are mainly conducted for operational hedging purposes, in order to mitigate the effects of the price volatility in our operations and at the same time, when possible, to lock in favourable forward curve structure.

Commodity risk is monitored based on Value at Risk measure.

Foreign currency risk

The Group has FX exposure due to mismatch of currency composition of cash inflows and outflows, investments, debts.

MOL Group relies on economic currency risk management principle that the currency mix of the debt portfolio should reflect the net long-term currency position of profit generation (‘natural hedge’). However in circumstances where insisting to this principle without any flexibility is disadvantageous for the company our practice allows using foreign exchange derivatives as well. The main motivation here is safeguarding the financial covenant compliance.

Interest rate risk

As an energy company, MOL Group has limited interest rate exposure. The ratio of fix / floating interest burdened debt is monitored by Group Treasury.

Beside contracting loan agreements with a given fix / float interest rate MOL Group also has the flexibility to manage its level of interest rate risk exposure via interest rate swaps.

Credit risk

MOL Group sells products and services to a diversified customer portfolio - both from business segment and geographical point of view – with a large number of customers representing acceptable credit risk profile.

Policies and procedures are in place to set the framework and principles for customer credit risk management and collection of receivables to minimise credit losses deriving from delayed payment or non-payment of customers, to track these risks on a continuous basis and to provide financial support to sales process in accordance with MOL Group’s sales strategy and ability to bear risk.

Creditworthiness of customers with deferred payment term is thoroughly assessed, regularly reviewed and appropriate credit risk mitigation tools are applied. According to the MOL Group’s policy, customer credit limits should be covered by payment securities where applicable: credit insurance, bank guarantee, letter of credit, cash deposit and lien are the most preferred types of security to cover customer credit risk.

Individual customer credit limits are calculated taking into account external and/or internal assessment of customers as well as the securities provided. Information on existing and potential customers is based on well-known and reliable Credit Agencies and available internal data.

Various solutions support the customer credit management procedures, including monitoring of credit exposures for immediate information on breach and expiry of credit limits or guarantees. When such credit situations occur, deliveries shall be blocked; decisions on the unblocking of deliveries shall be made by authorised persons on both Financial and Business sides.

Credit risk of the investment portfolio is safeguarded by a rating grid concept. For bank deposits, an Internal Rating system is applied to reasonably diversify and mitigate the partner bank counterparty risks of MOL Group by proper distribution of available cash among banks (both group and entity level) based on their external and respective sovereign ratings. For securities, external ratings are taken into account for the limit calculation. Limits, their utilisations and escalation procedures are continuously managed and controlled by Cash Management areas of the Group.

Liquidity risk

The Group aims to manage liquidity risk by covering liquidity needs from bank deposits, other cash equivalents and from adequate amount of committed credit facilities. Besides, on operational level various cash pools throughout the Group help to optimise liquidity surplus and need on a daily basis.

The existing bank facilities and the available cash and cash equivalents ensure both level of liquidity and financial flexibility for the Group.

|  | Consolidated Financial Statements 2023 | 65

The amount of undrawn major committed credit facilities | 31 Dec 2023 | 31 Dec 2022
HUF million | HUF million
Long-term loan facilities available | 953.092 | 1.186.071
Short-term facilities available | 101.013 | 125.499
Total loan facilities available | 1.054.105 | 1.311.570
Cash and cash equivalents | 412.977 | 595.244
Total available liquidity | 1.467.082 | 1.906.814

With the effective date of 1 June 2023, the total amount of the EUR 575 million revolving credit facility agreement signed on 29 November 2021 by MOL Group Finance Zrt. as borrower and MOL Plc. as guarantor for 5 years (with option for 1+1-year extension) has been increased by EUR 150 million. As a result of the increase total facility amount changed to EUR 725 million.

The EUR 750 million 7-year maturity fixed-rate Eurobond (coupon 2.625%) issued in 2016 by MOL has been fully repaid along with the last coupon payment on the maturity date in April.

MOL and its subsidiary MOL Group Finance Zrt. have established a EUR 2,000,000,000 Euro Medium Term Note (“EMTN”) Programme. Based on the EMTN Programme MOL and MGF will be able to issue Eurobonds up to an aggregated principal amount of EUR 2 billion. Net proceeds from potential future issuances can be applied for general corporate purposes.

MOL Group Finance Zrt. as borrower and MOL Plc. as guarantor signed 3 revolving credit facilities on 25 October 2023 in the amount of: (i) EUR 600 million multicurrency (EUR/USD), (ii) JPY 14.6 billion (approximately EUR 100 million) and (iii) EUR 50 million bilateral multicurrency (EUR/RMB). Conclusion of the agreements constitutes a full refinancing of the revolving credit facility agreement signed on 15 December 2017 in the amount of EUR 750 million, which would have matured in 2024.

Maturity profile of financial liabilities based on contractual undiscounted payments | Due within 1 month | Due between 1 and 12 months | Due between 1 and 5 years | Due after 5 years | Total
31 Dec 2023 | HUF million | HUF million | HUF million | HUF million | HUF million
Borrowings | 69,032 | 122,571 | 770,634 | 174,392 | 1,136,629
Transferred "A" shares with put&call options | - | 174,184 | - | - | 174,184
Trade and other payables | 522,166 | 439,800 | - | - | 961,966
Other financial liabilities | 3,728 | 14,736 | 1,730 | - | 20,194
Non-derivative financial instruments | 594,926 | 751,291 | 772,364 | 174,392 | 2,292,973
Derivatives | - | 16,979 | 3,412 | - | 20,391
Total financial liabilities | 594,926 | 768,270 | 775,776 | 174,392 | 2,313,364
Guarantees | 350,392 | - | - | - | 350,392
Undrawn loan commitments** | 1,054,105 | - | - | - | 1,054,105
Total Off-balance sheet commitments* | 1,404,497 | - | - | - | 1,404,497
* the maximum amount of the off-balance sheet commitments is allocated to the earliest period in which they could be called or drawn down **refers to any potential drawndowns made by MOL Group under available revolving credit facilities

Maturity profile of financial liabilities based on contractual undiscounted payments | Due within 1 month | Due between 1 and 12 months | Due between 1 and 5 years | Due after 5 years | Total
31 Dec 2022 | HUF million | HUF million | HUF million | HUF million | HUF million
Borrowings | 46,172 | 448,086 | 546,367 | 174,613 | 1,215,238
Transferred "A" shares with put&call options | - | 181,656 | - | - | 181,656
Trade and other payables | 536,129 | 465,505 | - | - | 1,001,634
Other financial liabilities | 2,107 | 14,422 | 20,732 | - | 37,261
Non-derivative financial instruments | 584,408 | 1,109,669 | 567,099 | 174,613 | 2,435,789
Derivatives | - | 35,352 | (61) | - | 35,291
Total financial liabilities | 584,408 | 1,145,021 | 567,038 | 174,613 | 2,471,080
Guarantees | 143,980 | - | - | - | 143,980
Undrawn loan commitments** | 1,311,570 | - | - | - | 1,311,570
Total Off-balance sheet commitments | 1,455,550 | - | - | - | 1,455,550
* the maximum amount of the off-balance sheet commitments is allocated to the earliest period in which they could be called or drawn down **refers to any potential draw downs made by MOL Group under available revolving credit facilities. From 2023 the total amount of the undrawn loan commitments, as presented among available credit facilities, is presented on a separate line in the maturity analysis.

|  | Consolidated Financial Statements 2023 | 66

b) Sensitivity analysis

In line with the international benchmark, Group Risk Management prepares sensitivity analysis. According to the Financial Risk Management Model, the effect of the key risk elements on clean-CCS-based profit/loss are the following:

Effect on Clean CCS-based* (Current Cost of Supply) profit/(loss) from operation | 2023 | 2022
HUF billion | HUF billion
Brent crude oil price (change by +/- 10 USD/bbl; with fixed crack spreads and petrochemical margin)
Upstream | +37.8/-37.8 | +45.4/-45.4
Downstream | -6.7/+6.7 | -8/+8
TTF gas price (change by +/- 15 EUR/MWh; with fixed crack spreads and petrochemical margin)
Upstream | +36.4/-36.4 | +44.1/-44.1
Downstream | -56.5/+56.5 | -52.6/+52.6
Gas Midstream | -2.1/+2.1 | -2.2/+2.2
Exchange rates (change by +/- 15 HUF/USD; with fixed crack spreads)
Upstream | +16.3/-16.3 | +21.2/-21.2
Downstream** | +38.5/-38.5 | +23.6/-23.6
Exchange rates (change by +/- 15 HUF/EUR; with fixed crack spreads/petrochemical margin)
Upstream | +5.2/-5.2 | +15.6/-15.6
Downstream | +19.2/-19.2 | +26.5/-26.5
Refinery margin (change by +/- 1 USD/bbl)
Downstream | +39.4/-39.4 | +41.6/-41.6
Integrated petrochemical margin (change by +/- 100 EUR/t)
Downstream | +44.1/-44.1 | +46.4/-46.4
CO2 price EUA (Change by '+/- 10 EUR/t) |  |
Upstream | -0.6/+0.6 | -0.7/+0.7
Downstream | -8.2/+8.2 | -7.8/+7.8
*Clean CCS-based profit/(loss) from operation (EBIT) and its calculation methodology is not regulated by IFRS. Please see the reconciliation of reported profit/(loss) from operation (EBIT) and Clean CCS profit/(loss) from operation (Clean CCS EBIT) with the relevant definitions in the Appendix III. **The HUF/USD Downstream sensitivity is restated for FY22 due to calculation error

|  | Consolidated Financial Statements 2023 | 67

c) Borrowings

Accounting policies

All loans and borrowings are initially recognised at the fair value of the consideration received net of issue costs associated with the borrowing. After initial recognition, loans and borrowings are subsequently measured at amortised cost using the effective interest method.

| 31 Dec 2023 | 31 Dec 2022
| HUF million | HUF million
Long-term debt |  |
Eurobond €650 million due 2027 | 246,830 | 257,605
HUF bond HUF 28,400 million due 2029 | 28,552 | 28,576
HUF bond HUF 36,600 million due 2030 | 35,151 | 34,958
HUF bond HUF 35,500 million due 2031 | 35,425 | 35,415
HUF bond HUF 20,000 million due 2031 | 20,257 | -
HRK bond HRK 2,000 million due 2026 | 101,094 | 105,510
Schuldschein €130 million due between 2020-2027 | 7,630 | 19,987
Bank loans | 254,147 | 12,126
Finance lease liabilities | 182,700 | 156,082
Other | 1,395 | 154
Total long-term debt | 913,181 | 650,413
Short-term debt |  |
Eurobond €750 million due 2023 | - | 305,303
Eurobond €650 million due 2027 | 964 | 1,009
HUF bond HUF 28,400 million due 2029 | 146 | 146
HUF bond HUF 36,600 million due 2030 | 161 | 161
HUF bond HUF 35,500 million due 2031 | 486 | 486
HRK bond HRK 2,000 million due 2026 | 72 | 75
Schuldschein €130 million due between 2020-2027 | 11,861 | 180
Bank loans | 139,526 | 129,089
Finance lease liabilities | 30,669 | 31,289
Other | 1,516 | 948
Total short-term debt | 185,401 | 468,686
Gross debt (long-term and short-term) | 1,098,582 | 1,119,099
Cash and cash equivalents | 412,977 | 595,244
Current debt securities | 3,763 | 7,295
Net Debt* | 681,842 | 516,560
Total equity | 4,197,312 | 4,012,136
Capital and net debt | 4,879,154 | 4,528,696
Gearing ratio (%)** | 14.0% | 11.4%
Profit from operation | 677,575 | 1,259,112
Depreciation, depletion, amortisation and impairment | 471,684 | 475,533
Reported EBITDA from continuing operations | 1,149,259 | 1,734,645
Net Debt/Reported EBITDA | 0.59 | 0.30
*Long-term debt plus Short-term debt less Cash and cash equivalents less Current debt securities, based on the Group’s capital management policy the other financial liabilities are not included in the Net Debt calculation **Net Debt divided by Net Debt plus Total equity.

The EUR 750 million 7-year maturity fixed-rate Eurobond (coupon 2.625%) issued in 2016 by MOL has been fully repaid along with the last coupon payment on the maturity date in April.

|  | Consolidated Financial Statements 2023 | 68

The analysis of the gross debt of the Group by currencies is the following:

Gross debt by currency | 31 Dec 2023 | 31 Dec 2022
HUF million | HUF million |
EUR | 806,092 | 788,801 |
USD | 34,628 | 6,078 |
HUF | 176,711 | 136,782 |
HRK | - | 110,434 |
CZK | 14,504 | 12,577 |
Other | 66,647 | 64,427 |
Gross debt | 1,098,582 | 1,119,099 |

The following issued bonds were outstanding as of 31 December 2023:

| Ccy | Amount Issued (orig ccy, million) | Amount Issued (million HUF) | Coupon | Type | Cpn Freq | Issue date | Maturity | Issuer
Eurobond | EUR | 650 | 248,807 | 1.5% | Fixed | Annual | 08.10.2020 | 08.10.2027 | MOL Plc.
HRK bond | HRK | 2,000 | 101,607 | 0.875% | Fixed | Semi-annual | 06.12.2021 | 06.12.2026 | INA d.d.*
HUF bond | HUF | 28,400 | 28,400 | 2.0% | Fixed | Annual | 24.09.2019 | 24.09.2029 | MOL Plc.
HUF bond | HUF | 36,600 | 36,600 | 1.1% | Fixed | Annual | 22.09.2020 | 22.09.2030 | MOL Plc.
HUF bond | HUF | 35,500 | 35,500 | 1.9% | Fixed | Annual | 12.04.2021 | 12.04.2031 | MOL Plc.
HUF bond | HUF | 20,000 | 20,000 | 2.9% | Fixed | Annual | 23.06.2021 | 23.06.2031 | ITK Holding Zrt.
*The bond was issued in HRK, the amount in EUR is EUR 256 million,EUR/HRK rate is 7,5345 |  |  |

The reconciliation between the Group’s total of future minimum lease payments as a lessee and their present value is the following:

Leases as a lessee | 31 Dec 2023 | 31 Dec 2022
Minimum lease payments | Lease liability | Minimum lease payments | Lease liability
HUF million | HUF million | HUF million | HUF million
Due within one year | 35,632 | 30,669 | 33,984 | 31,289
Due later than one year but not later than five years | 106,236 | 84,241 | 104,521 | 96,591
Due later than five years | 124,277 | 98,459 | 65,909 | 59,491
Total | 266,145 | 213,369 | 204,414 | 187,371
Future finance charges | 52,776 | - | 17,043 | -
Lease liability | 213,369 | 213,369 | 187,371 | 187,371

The reconciliation between the Group’s total of future minimum lease payments as a lessor and their present value is the following:

Finance leases as a lessor | 31 Dec 2023 | 31 Dec 2022
Minimum lease payments receivable | Lease receivable | Minimum lease payments receivable | Lease receivable
HUF million | HUF million | HUF million | HUF million
Due within one year | 894 | 665 | 894 | 636
Due later than one year but not later than five years | 3,674 | 3,071 | 4,531 | 3,779
Due later than five years | 2,516 | 1,938 | 2,768 | 2,080
Residual value | n/a | 1,563 | n/a | 1,487
Total | 7,084 | 7,237 | 8,193 | 7,982
Future finance income/(expense) | (153) | - | 211 | -
Lease receivable | 7,237 | 7,237 | 7,982 | 7,982

F or other information on lease agreements please refer to Note 5 and Note 9/a

|  | Consolidated Financial Statements 2023 | 69

d) Equity

Accounting policies

Retained earnings and other reserves shown in the consolidated financial statements do not represent the distributable reserves for dividend purposes. Reserves for dividend purposes are determined based on the reconciliation of MOL Plc.’s equity prepared in accordance with Act C of 2000 on Accounting (“Hungarian Accounting Law”).

Reserves of exchange differences on translation

The reserves of exchange differences on translation represents translation differences arising on consolidation of financial statements of foreign entities. Exchange differences arising on such monetary items that, in substance, forms part of the company's net investment in a foreign entity are classified as other comprehensive income in the consolidated financial statements until the disposal of the net investment. Upon disposal of the corresponding assets, the cumulative revaluation or reserves of exchange differences on translation are recognised as income or expenses in the same period in which the gain or loss on disposal is recognised. When a subsidiary that is a foreign operation repays a quasi-equity loan or returns share capital there is a reduction in the parent’s absolute ownership interest, the pro rata share of the CTA should be reclassified to profit and loss.

Fair valuation reserves

The fair valuation reserve includes the cumulative net change in the fair value of effective cash flow hedges and financial assets at fair value through other comprehensive income.

Equity component of debt and difference in buy-back prices

Equity component of compound debt instruments includes the residual amount of the proceeds from the issuance of the instrument above its liability component, which is determined as the present value of future cash payments associated with the instrument. The equity component of compound debt instruments is recognised when the Group becomes party to the instrument.

Treasury Shares

The nominal value of treasury shares held is deducted from registered share capital. Any difference between the nominal value and the acquisition price of treasury shares is recorded directly to retained earnings. In order to consistently distinguish share premium and retained earnings impact of treasury share transactions, repurchase and resale of treasury transactions affect retained earnings instead of having impact on share premium.

Share capital

There was no change in the number of issued shares in 2023. As of 31 December 2023, the issued share capital was HUF 102,429 million, consisting of 819,424,824 series “A” shares with par value of HUF 125, one series “B” share with par value of HUF 1,000 and 578 series “C” shares with par value of HUF 1,001. Outstanding share capital as of 31 December 2023 and 31 December 2022 is 79,192 HUF million and HUF 79,013 million, respectively.

Every “A” class share with a par value of HUF 125 each (i.e. one hundred and twenty-five forint) entitles the holder thereof to have one vote and every “C” class share with a par value of 1,001 each (i.e. one thousand one forint) entitles the holder to have eight and eight thousandth vote, with the following exceptions. Based on the Articles of Association, no shareholder or shareholder group may exercise more than 10% of the voting rights with the exception of organisation(s) acting at the Company’s request as depository or custodian for the Company’s shares or securities representing the Company’s shares.

Series “B” shares are voting preference shares with a par value of HUF 1,000 that entitles the holder thereof to preferential rights as specified in the Articles of Association. The "B" series share is owned by MNV Zrt. exercising ownership rights on behalf of the Hungarian State. The “B” series share entitles its holder to eight votes in accordance with its nominal value. The supporting vote of the holder of “B” series of share is required to adopt decisions in the following matters pursuant to Article 12.4. of the Articles of Association: decision on amending the articles regarding the B series shares, the definition of voting rights and shareholder group, list of issues requiring supermajority at the general meeting as well as Article 12.4. itself; further, the “yes” vote of the holder of “B” series of shares is required to adopt decisions on any proposal not supported by the Board of Directors in the following matters: election and dismissal of the members of the Board of Directors, the Supervisory Board and the auditors, decision of distribution of profit after-taxation and amending of certain provisions of the Articles of Association.

Based on the authorisation granted in the Article 17.D of the Articles of Association the Board of Directors is entitled to increase the share capital until 10 April 2024 in one or more instalments by not more than HUF 30 billion in any form and method provided by the Civil Code.

Reserves and retained earnings

Between 2023 and 2026 MOL Group plans to spend more than HUF 100 billion on capital expenditures, therefore it created HUF 100 billion development reserve based on the paragraph 7 of Act LXXXI of 1996 on corporate tax and dividend tax, which amount is transferred from the retained earnings to tied-up reserves on 31 December 2022. In 2023 HUF 43,177 million was used up for several projects, the balance of the tied-up reserves is HUF 56,823 million on 31 December 2023.

|  | Consolidated Financial Statements 2023 | 70

Changes in the number of ordinary, treasury and authorised shares:

Series “A” and “B” shares | Number of shares issued | Number of treasury shares | Shares under repurchase obligation | Shares under retransfer agreement | Number of shares outstanding | Authorised number of shares
1 Jan 2022 | 819,424,825 | 36,920,309 | 114,222,907 | 42,977,996 | 625,303,613 | 1,059,424,825
Share distribution for the members of the Board of Directors and participants of MRP | - | (190,625) | - | - | 190,625 | -
Settlement of share option agreement with Commerzbank A.G. | - | 9,844,626 | (9,844,626) | - | - | -
Settlement of share option agreement with ING Bank N.V. | - | 2,438,877 | (2,438,877) | - | - | -
Settlement of share option agreement with Unicredit Bank A.G. | - | (6,872,214) | 6,872,214 | - | - | -
Treasury shares sold to MOL Plc. SESOP Organizations | - | (6,609,424) | - | - | 6,609,424 | -
31 Dec 2022 | 819,424,825 | 35,531,549 | 108,811,618 | 42,977,996 | 632,103,662 | 1,059,424,825
Share distribution for the members of the Board of Directors and participants of MRP | - | (1,431,297) | - | - | 1,431,297 | -
Settlement of share option agreement with ING Bank N.V. | - | 3,353,987 | (3,353,987) | - | - | -
Settlement of share option agreement with Unicredit Bank A.G. | - | 3,704,188 | (3,704,188) | - | - | -
31 Dec 2023 | 819,424,825 | 41,158,427 | 101,753,443 | 42,977,996 | 633,534,959 | 1,059,424,825
Series “C” shares |  |  |  |  |  |
1 Jan 2022 | 578 | 578 | - | - | - | 578
31 Dec 2022 | 578 | 578 | - | - | - | 578
31 Dec 2023 | 578 | 578 | - | - | - | 578

The par value of the treasury shares owned by the Group companies is HUF 23,236 million (31 December 2022: HUF 23,415 million).

Dividend

In April 2023 the Board of Directors on behalf of the 2023 Annual General Meeting of MOL Plc. approved to pay HUF 279,751 million dividend in respect of 2022, which equals to HUF 354.26 dividend per share. The total amount of reserves legally available for distribution based on MOL Plc.’s reconciliation of equity is HUF 2,243,360 million as of 31 December 2023.

The approved dividend (HUF 279,751 million) and the dividend shown in the statement of changes in equity (HUF 224,435 million) are different because the following movements are not presented as dividend payments: dividend of shares under retransfer agreement (HUF 15,225 million) represents in substance MOL's contribution to social responsibility activities and therefore charged to the statement of profit or loss; dividend of shares under put and call option transactions (HUF 21,847 million) presented as a decrease in financial liability; dividends of shares in OTP-MOL swap agreement(HUF 14,200 million) presented as change in fair value of derivative instruments, dividend towards MOL Plc.’s Employee Share Ownership Programme Organisation (HUF 4,044 million) has no effect on the statement of financial position because the organisation is consolidated to the group.

Treasury share put and call option transactions

MOL Plc. has two option agreements concluded with financial institutions in respect of 61,669,435 pieces of series “A” shares (“Shares”) as of 31 December 2023. Under the agreements, MOL Plc. holds American call options and the financial institutions hold European put options in respect of the Shares. The expiry of both the put and call options are identical. (More information about the treasury shares with put&call options are included in Note 21.)

Counterparty | Underlying pieces of MOL ordinary shares | Strike price per share | Expiry
ING Bank N.V. | 30,927,069 | EUR 7.5819 | 24 Jun 2024
UniCredit Bank AG | 30,742,366 | EUR 7.1746 | 24 Jun 2024

|  | Consolidated Financial Statements 2023 | 71

MOL agreed with ING Bank N.V. (“ING”) on 20 June 2023, that the option rights in relation to 34,281,056 MOL Series “A” Ordinary shares (“Shares”) under the share option agreement executed between ING and MOL on 20 June 2022 are either fully cash settled or partly physically and partly cash settled on 23 June 2022. Simultaneously, MOL and ING entered into a new share option agreement. According to the new share option agreement MOL received American call options and ING received European put options in relation to 30,927,069 Shares, with the effective date of 27 June 2023. The maturity date of both the call and put options is 24 June 2024, and the strike price of both options is EUR 7.5819 per Share.

MOL agreed with UniCredit Bank AG (“UniCredit”) on 20 June 2023, that the option rights in relation to 34,446,554 MOL Series “A” Ordinary shares (“Shares”) under the share option agreement executed between UniCredit and MOL on 20 June 2022 are either fully cash settled or partly physically and partly cash settled on 23 June 2022. Simultaneously, MOL and UniCredit entered into a new share option agreement. According to the new share option agreement MOL received American call options and UniCredit received European put options in relation to 30,742,366 Shares, with the effective date of 27 June 2023. The maturity date of both the call and put options is 24 June 2024, and the strike price of both options is EUR 7.1746.

Treasury shares sold to MOL Plc. SESOP Organizations

On 27 of January 2022, based on the authorisation of the Extraordinary General Meeting of the Company held on 22 December 2021 MOL have sold 3,304,712 pieces of „A” Series MOL Ordinary Shares to MOL Plc. SESOP Organization 2021-1 and 3,304,712 pieces of MOL Shares to MOL Plc. SESOP Organization 2021-2.

Share swap agreement with OTP

MOL Plc. and OTP entered into a share-exchange and a share swap agreement in 2009. Under the agreements, initially MOL transferred 40,084,008 “A” series MOL ordinary shares to OTP in return for 24,000,000 pieces OTP ordinary shares. The agreement contains settlement provisions in case of certain movement of relative share prices of the parties, subject to net cash or net share settlement. The agreement, concluded on 16 April 2009 has been further extended in 2022 until 11 July 2027, which did not trigger any movement in MOL Plc.’s treasury shares.

Until the expiration date each party can initiate a cash or physical (i.e. in shares) settlement of the deal.

|  | Consolidated Financial Statements 2023 | 72

21. Financial instruments

| Fair value through profit or loss | Derivatives used for hedging | Amortised cost | Fair value through other comprehensive income | Total carrying amount
31 Dec 2023 | hedge acc.*
Carrying amount of financial instruments | HUF million | HUF million | HUF million | HUF million | HUF million
Financial assets |  |  |  |  |  |
Other non-current financial assets | Equity instruments | 12,938 | - | - | 111,827 | 124,765
Loans given | - | - | 63,622 | - | 63,622
Deposit | - | - | 2,156 | - | 2,156
Finance lease receivables | - | - | 6,572 | - | 6,572
Debt securities | - | - | - | 63,269 | 63,269
Commodity derivatives | 1,304 | - | - | - | 1,304
Other derivatives | 2,975 | - | - | - | 2,975
Other | 14,370 | - | 33,051 | - | 47,421
Total non-current financial assets | 31,587 | - | 105,401 | 175,096 | 312,084
Trade and other receivables | - | - | 959,082 | - | 959,082
Cash and cash equivalents | - | - | 412,977 | - | 412,977
Debt securities |  | - | - | - | 3,763 | 3,763
Other current financial assets | Commodity derivatives | 23,811 | - | - | - | 23,811
Loans given | - | - | 5,480 | - | 5,480
Deposit | - | - | 18 | - | 18
Finance lease receivables | - | - | 665 | - | 665
Other derivatives | 3,806 | - | - | - | 3,806
Other | 10,346 | - | 20,517 | - | 30,863
Total current financial assets | 37,963 | - | 1,398,739 | 3,763 | 1,440,465
Total financial assets |  | 69,550 | - | 1,504,140 | 178,859 | 1,752,549
Financial liabilities |  |  |  |  |  |
Borrowings (long-term debt) | - | - | 730,481 | - | 730,481
Finance lease liabilities |  | - | - | 182,700 | - | 182,700
Other non-current financial liabilities | Commodity derivatives | 643 | - | - | - | 643
Other derivatives | 2,454 | - | - | - | 2,454
Other | - | - | 1,730 | - | 1,730
Interest rate derivatives | - | 315 | - | - | 315
Total non-current financial liabilities | 3,097 | 315 | 914,911 | - | 918,323
Trade and other payables | - | - | 961,965 | - | 961,965
Borrowings (short-term debt) | - | - | 154,732 | - | 154,732
Finance lease liabilities |  | - | - | 30,669 | - | 30,669
Other current financial liabilities | Transferred "A" shares with put&call options** | - | - | 169,474 | - | 169,474
Commodity derivatives | 16,933 | - | - | - | 16,933
Foreign exchange derivatives | 46 | - | - | - | 46
Other | - | - | 18,463 | - | 18,463
Total current financial liabilities | 16,979 | - | 1,335,303 | - | 1,352,282
Total financial liabilities | 20,076 | 315 | 2,250,214 | - | 2,270,605
*hedge acc: under hedge accounting **more information about the transferred "A" shares with put&call options is included in Note 20/c

|  | Consolidated Financial Statements 2023 | 73

| Fair value through profit or loss | Derivatives used for hedging | Amortised cost | Fair value through other comprehensive income | Total carrying amount
31 Dec 2022 | hedge acc.*
Carrying amount of financial instruments | HUF million | HUF million | HUF million | HUF million | HUF million
Financial assets |  |  |  |  |  |
Other non-current financial assets | Equity instruments | 15,781 | - | - | 104,251 | 120,032
Loans given | - | - | 80,988 | - | 80,988
Deposit | - | - | 391 | - | 391
Finance lease receivables | - | - | 7,346 | - | 7,346
Debt securities | - | - | - | 42,027 | 42,027
Commodity derivatives | 7,141 | - | - | - | 7,141
Other | 28,342 | - | 54,024 | - | 82,366
Total non-current financial assets | 51,264 | - | 142,749 | 146,278 | 340,291
Trade and other receivables | - | - | 931,511 | - | 931,511
Finance lease receivables | - | - | - | - | -
Cash and cash equivalents | - | - | 595,244 | - | 595,244
Debt securities | - | - | - | 7,295 | 7,295
Other current financial assets | Commodity derivatives | 55,792 | - | - | - | 55,792
Loans given | - | - | 3,506 | - | 3,506
Deposit | - | - | 103 | - | 103
Finance lease receivables | - | - | 636 | - | 636
Foreign exchange derivatives | - | - | - | - | -
Other derivatives | 650 | - | - | - | 650
Other | 27,071 | - | 90,205 | - | 117,276
Total current financial assets | 83,513 | - | 1,621,205 | 7,295 | 1,712,013
Total financial assets |  | 134,777 | - | 1,763,954 | 153,573 | 2,052,304
Financial liabilities |  |  |  |  |  |
Borrowings (long-term debt) | - | - | 494,331 | - | 494,331
Finance lease liabilities |  | - | - | 156,082 | - | 156,082
Other non-current financial liabilities | Foreign exchange derivatives | - | - | - | - | -
Other derivatives | 509 | - | - | - | 509
Other | - | - | 20,732 | - | 20,732
Interest rate derivatives | - | (570) | - | - | (570)
Total non-current financial liabilities | 509 | (570) | 671,145 | - | 671,084
Trade and other payables | - | - | 1,001,634 | - | 1,001,634
Borrowings (short-term debt) | - | - | 437,397 | - | 437,397
Finance lease liabilities |  | - | - | 31,289 | - | 31,289
Other current financial liabilities | Transferred "A" shares with put&call options** | - | - | 179,573 | - | 179,573
Commodity derivatives | 35,349 | - | - | - | 35,349
Foreign exchange derivatives | - | - | - | - | -
Other derivatives | - | - | - | - | -
Other | - | - | 16,529 | - | 16,529
Interest rate derivatives | - | 3 | - | - | 3
Total current financial liabilities | 35,349 | 3 | 1,666,422 | - | 1,701,774
Total financial liabilities | 35,858 | (567) | 2,337,567 | - | 2,372,858
*hedge acc: under hedge accounting **more information about the transferred "A" shares with put&call options is included in Note 20/c

The Group does not have any instrument where the Group chose the fair value option to designate an instrument upon initial recognition at fair value through profit or loss in order to reduce a measurement or recognition inconsistency. The Group does not have any financial instrument whose classification has changed as a result of amendments in business model categorisation.

The Group elected upon initial recognition to measure investments in equity instruments at fair value through other comprehensive income, as these instruments are not held for trading. Investments in venture funds are measured at fair value through profit or loss. The most significant equity instrument is JANAF interest held by INA d.d., the company that owns and operates the Adria pipeline system. The market value of the shares as of 31 December 2023 amounted to HUF 37,761 million (31 December 2022: HUF 37,243 million). The fair value is calculated using available market prices and is considered level 1 among the fair value hierarchy.

|  | Consolidated Financial Statements 2023 | 74

The most significant items among debt securities are bonds issued by listed entities and banks. For the changes in the other comprehensive income due to the valuation of debt instruments please refer to Note8.

The Group uses several valuation techniques to determine the fair value of the financial instruments. The fair value of commodity derivatives is determined based on the present value of estimated future cash flows using observable forward prices.

The fair value of debt instruments is calculated by discounting the present value of estimated future cash flows with observable zero coupon bond yield curves adjusted with issuer-specific credit risk factors.

The fair values of financial instruments measured at amortised cost approximate their carrying amounts except for the issued bonds. The fair value of the issued bonds is HUF 403,830 million, while their carrying amount is HUF 469,138 million as of 31 December 2023 (31 December 2022: fair value was HUF 667,427 million, carrying amount was HUF 769,244 million). HUF 225,075 million of the fair value of the issued bonds is categorised as Level 1 and HUF 178,756 million is categorised as Level 2.The Level 1 fair value is determined by the latest observed bid market prices available from an external market data vendor, while in case of Level 2 fair value the prices are defined by the external data vendor using a benchmark yield with an additional estimated spread.

Impairment only accounted for on trade receivables and loans given. No impairment is recognised on the remaining financial instruments based on materiality, history, expectations and change in credit risk.

Contract assets and contract liabilities from contracts with customers are not material for the Group.

The carrying amount of hedging instruments designated in hedge accounting programmes are the followings:

Carrying amounts of hedging instrument | 2023 | 2022
HUF million | HUF million
Net investment hedge | Liabilities | Borrowings | 487,827 | 584,384
Cash flow hedge | Liabilities | Interest rate derivatives | 315 | (567)

Hedge of net investments in foreign operations

The Group has EUR denominated net investments in foreign operations and EUR denominated borrowings. These borrowings are being used to hedge the Group’s exposure to EUR foreign exchange risk on these investments. Gains or losses on the retranslation of this borrowing are transferred to other comprehensive income to offset any gains or losses on translation of the net investments in the subsidiaries. There is an economic relationship between the hedged items and the hedging instruments as the net investments creates a translation risk that will match the foreign exchange risk on the borrowings. The Group has established a hedge ratio of 1:1 as the underlying risk of the hedging instrument is identical to the hedged risk component. The hedge ineffectiveness will arise when the amount of the investment in the foreign subsidiary becomes lower than the amount of the borrowing.

The notional amount of the EUR denominated borrowings are EUR 1,274 million.(31 December 2022: EUR 1,460 million)The weighted average hedged rates, where the weight is the balance of the hedging instrument, for the year are 382 HUF/EUR (31 December 2022: 391 HUF/EUR)

The movements of the currency translation reserve due to net investment hedging are the following:

|  |  | 2023 | 2022
Net investment in foreign operation |  | Notes | HUF million | HUF million
Opening Balance of the foreign currency translation reserve due to hedging, net of tax |  | 185,188 | 150,420
Change in value of hedged item used to determine hedge effectiveness |  | (26,256) | 47,475
Change in carrying amount of borrowings as a result of foreign currency movements recognised in other comprehensive income | 8 | 26,256 | (47,475)
Change in foreign currency translation reserve due to hedging, net of tax |  | 8 | (18,626) | 34,768
Closing Balance of the foreign currency translation reserve due to hedging, net of tax |  | 166,562 | 185,188

The hedging gain recognised in other comprehensive income before tax is equal to the change in fair value used for measuring effectiveness. There was no ineffectiveness to be recorded from net investments in foreign entity hedges.

|  | Consolidated Financial Statements 2023 | 75

22. Fair value measurement of financial instruments

| 31-Dec-2023 |  | 31-Dec-2022
| Level 1 Unadjusted quoted prices in active markets | Level 2 Valuation techniques based on observable market input | Level 3 Valuation techniques based on unobservable input | Total fair value | Level 1 Unadjusted quoted prices in active markets | Level 2 Valuation techniques based on observable market input | Level 3 Valuation techniques based on unobservable input | Total fair value
Fair value hierarchy | HUF million | HUF million | HUF million | HUF million | HUF million | HUF million | HUF million | HUF million
Financial assets |  |  |  |  |  |  |  |
Equity instruments | 37,761 | 87,004 | - | 124,765 | 37,243 | 82,789 | - | 120,032
Debt securities | - | 67,032 | - | 67,032 | - | 49,322 | - | 49,322
Commodity derivatives | - | 25,115 | - | 25,115 | - | 62,933 | - | 62,933
Other derivatives | - | 6,781 | - | 6,781 | - | 650 | - | 650
Other | - | - | 24,716 | 24,716 | - | - | 55,413 | 55,413
Total financial assets | 37,761 | 185,932 | 24,716 | 248,409 | 37,243 | 195,694 | 55,413 | 288,350
Financial liabilities |  |  |  |  |  |  |  |
Commodity derivatives | - | 17,576 | - | 17,576 | - | 35,349 | - | 35,349
Foreign exchange derivatives | - | 46 | - | 46 | - | - | - | -
Other derivatives | - | 2,454 | - | 2,454 | - | 509 | - | 509
Interest rate derivatives | - | 315 | - | 315 | - | (567) | - | (567)
Total financial liabilities | - | 20,391 | - | 20,391 | - | 35,291 | - | 35,291

Other financial assets (both current and non-current) relate to the disposal of MOL’s UK portfolio and INA’s Angolan portfolio which are classified as a financial asset and measured at fair value through profit or loss. The fair values of these considerations are considered level 3 valuation inputs under the fair value hierarchy. The fair value of the UK and the Angolan Block 3/05 earn-out consideration is determined by multiplying the average daily Brent price exceeding a pre-agreed Brent price and the number of produced oil barrels for the companies’ percentage interest under the relevant Joint Operation Agreements and Production Sharing Agreement. Cash flows are estimated based on inputs including quoted Brent price and production volumes related to the disposed operations. The fair value of the consideration for the Angolan Block 3/05a is determined by the restart of the production on each Punja and Caco-Gazela field together with reaching the predetermined threshold production. Future cash flows are estimated based on best estimation on when production will restart and when threshold would be reached.

Quantitative sensitivity analysis for the changes in unobservable inputs

§ A 10% increase in the Brent oil price would result in an increase of the contingent assets in the amount of HUF 6,137 million(UK portfolio) and HUF 126 million(Angolan portfolio), while a 10% decrease in the Brent oil price would result in a decrease of the contingent assets in the amount of HUF 6,137 million(UK Portfolio) and HUF 126 million(Angolan Portfolio)

§ A 1 percentage point increase in the discount rate would result in a decrease of the contingent assets in the amount of HUF 250 million(UK portfolio) and HUF 29 million (Angolan Portfolio), a 1 percentage point decrease in the discount rate would result in an increase of the contingent asset in the amount of HUF 256 million(UK Portfolio) and HUF 30 Million(Angolan portfolio)

§ A 10% increase in production would result in an increase of the contingent assets in the amount of HUF 1,304 million(UK Portfolio) and HUF 24 million (Angolan portfolio), a 10% decrease in production would result in a decrease of the contingent asset in the amount of HUF 1,304 million(UK Portfolio) and HUF 24 million (Angolan portfolio)

The following table shows the changes in the value of level 3 financial assets for the period ended at 13 December 2023

|  | 2023 | 2022
|  | HUF million | HUF million
Opening Balance |  | 55,413 | -
Increase due to new sale |  | 1,714 | 57,566
Decrease due to payments received |  | (27,331) |
Gains/losses arising during the year |  | (5,080) | (2,153)
Closing Balance |  | 24,716 | 55,413

|  | Consolidated Financial Statements 2023 | 76

23. Trade and other receivables

Accounting policies

Trade and other receivables are amounts due from customers for goods sold and services performed in the normal course of business, as well as other receivables such as margining receivables.Trade receivables are recognised at transaction price if they do not contain a significant financing component . A provision for impairment is made for full-lifetime expected credit losses using the simplified approach.The Group calculates the expected credit loss on trade receivables as the average of yearly historical loss rates of the last three years multiplied by the forward-looking element. The forward-looking element is based on positive correlation between banking sector credit losses and one year lag of unemployment rate. Impaired receivables are derecognised when they are assessed as uncollectible.

If collection of trade receivables is expected within the normal business cycle which is one year or less, they are classified as current assets. In other cases, they are presented as non-current assets.

| 31 Dec 2023 | 31 Dec 2022
Trade and other receivables
HUF million | HUF million
Trade receivables | 766,199 | 803,634
Other receivables | 192,883 | 127,877
Total | 959,082 | 931,511

| 31 Dec 2023 | 31 Dec 2022
Trade receivables
HUF million | HUF million
Trade receivables (gross) | 775,991 | 817,239
Loss allowance for receivables | (9,792) | (13,605)
Total | 766,199 | 803,634

The gross amount of trade receivables decreased mainly due to the decrease in net sales due to lower fuel and gas prices, which was slightly offsetted by increase on the receivables due to acquisitions of new entities. The loss allowance for receivables also decreased due to the improvement both in forward looking element and 3-year average historical loss rates applied in the impairment model.

Movements in the loss allowance for receivables | 2023 | 2022
HUF million | HUF million |
At 1 January | 13,605 | 16,167 |
Additions | 2,185 | 2,684 |
Reversal | (4,881) | (5,649) |
Amounts written off | (853) | (233) |
Foreign exchange differences | (264) | 636 |
At 31 December 2023 | 9,792 | 13,605 |

Ageing analysis of trade receivables | 31 Dec 2023 | 31 Dec 2022
Gross book value | Net book value | Gross book value | Net book value
HUF million | HUF million | HUF million | HUF million
Not past due | 719,384 | 718,457 | 731,618 | 730,959
Past due | 56,607 | 47,742 | 85,621 | 72,675
Within 180 days | 47,767 | 46,666 | 69,377 | 65,178
Over 180 days | 8,840 | 1,076 | 16,244 | 7,497
Total | 775,991 | 766,199 | 817,239 | 803,634

Current assets pledged as security

The carrying amount of currents assets pledged as security for liabilities is HUF 1,228 million as of 31 December 2023.

|  | Consolidated Financial Statements 2023 | 77

24. Cash and cash equivalents

Accounting policies

Cash includes cash on hand and cash at banks. Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash and that are subject to an insignificant risk of change in value. The Group considers the term “insignificant risk of change in value” not being limited to three-month period.

| 31 Dec 2023 | 31 Dec 2022
| HUF million | HUF million
Short-term bank deposits | 192,048 | 322,290
Demand deposit | 186,925 | 250,065
Cash on hand | 34,004 | 22,889
Total | 412,977 | 595,244

Cash and cash equivalents pledged as security

The carrying amount of cash and cash equivalents pledged as security for liabilities is HUF 13,047 million as of 31 December 2023 (2022: HUF 13,152 million).

|  | Consolidated Financial Statements 2023 | 78

Other financial information

This section includes additional financial information that are either required by the relevant accounting standards or management considers these to be material information for shareholders.

25. Commitments and contingent liabilities

Accounting policies

Contingent liabilities are not recognised in the consolidated financial statements unless they are acquired in a business combination. They are disclosed in the Notes unless the possibility of an outflow of resources embodying economic benefits is remote. A contingent asset is not recognised in the consolidated financial statements but disclosed when an inflow of economic benefits is probable.

a) Guarantees

The total value of bank guarantees, letter of credits and other commitments undertaken to parties outside the Group and equity consolidated investments is contractually HUF 350,392 million (31 December 2022: HUF 143,980 million).

b) Capital and Contractual Commitments

The total value of the capital commitments of fully consolidated companies as of 31 December 2023 is HUF 276,866 million (31 December 2022: HUF 299,287 million), of which HUF 86,030 million relates to Croatian operation, HUF 81,080 million to operation in Hungary and HUF 54,366 million to operation in Slovakia.

MOL Group has the most significant commitments in upstream to drill and complete new wells, reach new oil reserves, improve reservoir pressure maintenance, de-risk the wells with a 4D seismic programme and cover annual work programme (HUF 55,390 million).

MOL is committed to the transformation of the refinery business and raising the competitiveness of the Rijeka Refinery (HUF 62,787 million). The investment will make the Rijeka Refinery one of the most modern refineries in Europe and will increase the proportion of profitable "white" products, i.e. motor fuels, to better serve market needs. Other large commitments in Croatia are connected to the replacement of condensing turbines with electric drive (HUF 7,850 million).

MOL Group's most significant commitments in Hungary relate to the MOL Petrochemicals, to the poliol project (HUF 26,351 million) and to the implementation of a metathesis project (HUF 22,373 million). The aim of the polyol project is for MOL to become a major producer of polyether polyols (high-value intermediate products for the automotive, packaging and furniture industries) in Europe, and the metathesis project is a greenfield investment, providing propylene for the polyol complex.
In Hungary, additional contractual and investment obligations are attached to expanding the capacity of the Maleic Anhydride Unit at Danube Refinery (HUF 10,353 million).

The largest investment commitment in Slovakia relates to a debottlenecking and process optimisation project in petrochemical business (HUF 12,211 million).

As part of corporate social responsibility MOL Group is committed to spending HUF 755 millio n via sponsorship agreements next year.

In December 2023 MOL Group signed an agreement to purchase Indotek Group's 15% stake in Waberer's International Plc. The Transaction will become effective upon receipt of the regulatory approvals required by applicable law. The share price of Waberer's International Plc. is 3,840 HUF/Share as of 31 December 2023.

c) Unrecognised lease commitments

Unrecognised lease commitments* | 31 Dec 2023 | 31 Dec 2022
HUF million | HUF million
Due within one year | 1,888 | 2,266
Due later than one year but not later than five years | 849 | 1,328
Due later than five years | - | 306
Total | 2,737 | 3,900
*Lease commitments for short-term leases and leases of low-value assets |  |

d) Authority procedures, litigation

General

None of the litigations described below have any impact on the accompanying consolidated financial statements except as explicitly noted. MOL Group entities are parties to a number of civil actions arising in the ordinary course of business. Currently, no further litigation exists that could have a material adverse effect on the financial condition, assets, results or business of the Group.

The value of litigation where members of the MOL Group act as defendant is HUF 21,106 million for which HUF 4,156 million provision has been made.

|  | Consolidated Financial Statements 2023 | 79

ICSID arbitration (MOL Plc. vs. Croatia)

The International Centre for Settlement of Investment Disputes (ICSID) delivered its verdict in the arbitration case between the Republic of Croatia and MOL Plc. on the 5 July 2022. MOL filed a request for arbitration against Croatia in 2013 for breaching contractual obligations on multiple occasions under the agreements signed between the parties in 2009 mainly concerning gas trading.

The ICSID award clearly states that Croatia’s bribery related allegations are unfounded. The three-member council unanimously rejected Croatia’s objection that the 2009 agreements were a result of criminal conduct. Similarly, to the UNCITRAL Tribunal in 2016, this international judicial forum also characterized the story of the Croatian criminal proceedings’ crown witness as weak and full of contradictions. Furthermore, the court expressed strong doubts about the truthfulness and reliability both in the arbitral and criminal proceedings in Zagreb.

According to the ruling of the arbitration tribunal Croatia caused substantial damages to INA, and thus indirectly to MOL by failure to take over the gas trading business of INA as well as by breaching contractual obligations of natural gas pricing and royalty rate increases, thus awarding MOL with damages in the amount of USD 167.8 million. The tribunal awarded a further USD 16.1 million in damages caused by Croatia by forcing the sale of stored natural gas of INA’s subsidiary (Prirodni Plin). Together with interest MOL was awarded a total of around USD 236 million in damages. In 2023 an enforcement procedure was initiated due to non-payment of the awarded amount. The contingent asset has not been recognised in the Statement of Financial Position.

BELVEDERE, INA No Nš-14/17

In July 2017 INA received a lawsuit from Belvedere d.d. Dubrovnik with a claim of HRK 220 million. The claim relates to a loan provided by INA in 2005 to Belvedere d.d. (hotel “Belvedere” in Dubrovnik served as security for the loan). Since Belvedere d.d. has not returned the loan, enforcement procedure was initiated in 2012, and the hotel was sold to a highest bidder on a public auction. Belvedere d.d. now claims that the hotel was sold below its market value and also claims damage to its reputation and loss of profit.

Although the outcome of this procedure is uncertain it is more likely in favour of INA than not. Notwithstanding the possible outcome, request for the damage is deemed to set too high considering three independent court experts already discussed the market price issue. Case is interrupted until resolution of case INA No. 018-11/17 which represents preliminary issue for resolving this case. In case INA No. 018-11/17 final decision was reached in favour of INA. Currently this case is before Supreme Court of the Republic of Croatia since Belvedere filled proposal for permission to file a revision.

Revision court has rejected proposal for permission to file revision. Case Nš-14/17 will now continue.

Also, in June 2023, INA received a new claim from BELVEDERE d.d., where BELVEDERE d.d. is trying to establish INA loan agreement concluded in year 2005 to be null and void. INA delivered a reply fully rejecting BELVEDERE’s claim.

Nova Natura d.o.o.

The plaintiff filed a lawsuit for damages in the total amount of EUR 1,853,087.50 caused by the impossibility of using part of the agricultural land for agricultural production due to the defendant's underground pipelines buried on the land. In the lawsuit, the plaintiff states that the defendant has the right of easement, however, it never carried out the expropriation procedure and did not pay any compensation for the use of the land, neither to the plaintiff, nor to its predecessors. In its response, the defendant disputed the grounds and the claimed amount and suggested the intervention of company Plinacro d.o.o. in the litigation, since its pipelines also pass through the land in question. The defendant has valid use and construction permits for the pipelines in question and alleged that the plaintiff must have been aware of the pipelines. On December 6, 2023, a first-instance verdict was issued, whereby the claim was rejected in its entirety.

RSG Europe Service Centre Limited

The lawsuit was filed on August 4, 2021 by the plaintiff as the insurer of the ship operator of ship FIDELITY, against defendants INA and its subcontractor MANŠPED. The plaintiff claims compensation for damages (recourse) for the total amount paid according to the settlements it concluded with the Republic of Croatia, the County of Istria and other legal and natural persons due to the damages that (allegedly) occurred to them as a result of the fuel spill from the ship FIDELITY into the sea in the Raša Bay on June 22, 2018. The plaintiff paid an advance for the litigation costs (EUR 236,536) according to the Act on Private International Law. The main hearing was held on December 4, 2023, the officers of the Port Authority of Pula were heard, who stated that there were problems in the communication between the fuel loader and the ship's crew, which was also aggravated by the bad weather, and that they did not do everything necessary to prevent pollution, but confirmed that all the fuel passed the point at the ship's bunker station after which all risk passes to the shipowner. The judge already ordered that an expert report be conducted on the circumstances of the cause of the accident.

Ivana D (State Inspectorate, Sector for Supervision of Mining, Energy and Pressure Equipment, Supervision in the field of energy)

The State Inspectorate, on June 26, 2023 filed an indictment against the first defendant INA, d.d. and the second defendant Nikola Mišetić for allegedly committing two violations in relation to the Law on Safety in Offshore Exploration and Hydrocarbon Exploitation. The grounds for the Indictment is the Decision of the State Inspectorate, which became enforceable on September 22, 2021, allowing a deadline of one year to remove the exploitation facilities Ivana D. It is not disputed that the facilities were not removed.

However, it is questionable whether there was an obligation to remove the facilities, given that the platform sank due to an accident and given the statements of the Ministry of Economy from which it follows that an environmental impact study must be carried out before removing the platform.

The State Inspectorate, the Independent Service for Second-instance Proceedings, is to decide on the Appeal after the expiry of the deadline against the disputed Decision ordering the removal, which Appeal has not been decided on by the date of this Report.

|  | Consolidated Financial Statements 2023 | 80

Dispute value: 1. Violation: €66,361 – 10% of the offender's total income (fine for a legal entity, and €19,908 – €66,361 for the responsible person)

2. Violation: €3,980 – €15,920 (fine for a legal entity, and €390 – €2,650 for the responsible person)

e) Environmental liabilities

MOL Group’s operations are subject to the risk of liability arising from environmental damage or pollution and the cost of any associated remedial work. MOL Group is currently responsible for significant remediation of past environmental damage relating to its operations. Accordingly, MOL Group has established a provision of HUF 68,981 million for the estimated cost as at 31 December 2023 for probable and quantifiable costs of rectifying past environmental damage (see Note 16). In addition, a provision of HUF 6,362 million was recorded to cover an expected intervention where the timing, cost and nature of the intervention is still uncertain. Although the management believes that these provisions are sufficient to satisfy such requirements to the extent that the related costs are reasonably estimable, future regulatory developments or differences between known environmental conditions and actual conditions could cause a revaluation of these estimates.

Some of the Group’s premises may be affected by contamination where the cost of rectification is currently not quantifiable or legal requirement to do so is not evident. The main case where such contingent liabilities may exist is the Tiszaújváros site, including both the facilities of MOL Petrochemicals Plc. and the area of MOL’s Tisza refinery, where the Group has identified significant underground water and subsurface soil contamination. In accordance with the resolutions of the regional environmental authorities combined for MOL Petrochemicals and MOL Group, the Group completed a detailed investigation and submitted the results and technical specifications to the authorities in July 2021. Based on these documents the authorities brought a resolution on 7 September 2021 requiring MOL Petrochemicals and MOL Group to jointly perform this plan in order to manage the soil and underground water contamination. The total amount of liabilities originating from this plan can be estimated properly and MOL Petrochemicals and MOL Group set the required amount of environmental provision.

Contingent liabilities exist for uncertain remediation tasks; their magnitude cannot be estimated currently, but it is not expected to exceed HUF 4,000 million.

The technology applied in oil and gas exploration and development activities by the Group’s Hungarian predecessor before 1995 may give rise to future remediation of drilling mud produced (in 1995 there was modification in the drilling technology). In accordance with legal requirements the treatment (extraction and disposal) of the resulting pollutant is required. The potential expenses associated with such an obligation depend on the extent, volume and composition of the drilling mud left behind at the various production sites. According to current estimates the amount of the environmental liability is HUF 1,118 million.

Further to more detailed site investigations to be conducted in the future and the advancement of national legislation or authority practice, additional contingent liabilities may arise at the industrial park around Mantova refinery which has been acquired in previous business combinations. As at 31 December 2023, on Group level the amount of environmental liabilities, recorded in the statement of financial position is HUF 19,337 million (31 December 2022: HUF 20,219 million).

26. Notes to the consolidated statements of cash flows

Accounting policies

Bank overdrafts repayable on demand are included as component of cash and cash equivalent in case where the use of short-term overdrafts forms an integral part of the entity’s cash management practices.

The Group has classified cash payments for the principal portion of lease payments and cash payments for the interest portion of lease payments as financing activities.

Analysis of net cash outflow on acquisition of subsidiaries, joint operations as business combinations | 2023 | 2022
HUF million | HUF million
Cash consideration | (122,168) | (194,477)
Cash at bank or on hand acquired | 6,238 | 796
Net cash outflow on acquisition of subsidiaries, joint operations | (115,930) | (193,681)

|  | Consolidated Financial Statements 2023 | 81

Analysis of net cash flow related to sale of subsidiaries, joint operations as business combinations | 2023 | 2022
HUF million | HUF million |
Cash consideration | 46,286 | 9,415 |
Cash at bank or on hand disposed | (58) | (44,109) |
Net cash inflow/(outflow) related to sale of subsidiaries, joint operations | 46,228 | (34,694) |
Analysis of increas/decrease in other financial assets | 2023 | 2022 |
HUF million | HUF million |
Change of escrow account of decommissioning | 2,505 | (21,991) |
Bought/sold bonds | 5,599 | (30,166) |
Net change of given loans | 2,604 | (15,210) |
Other changes | 8,522 | (15,864) |
Total change in other financial assets | 19,230 | (83,231) |

Analysis of cash flow related to joint ventures and associates | 2023 | 2022
HUF million | HUF million
Cash consideration of acquisition and capital increase | (8,887) | (4)
Dividend from joint ventures and associates | 4,471 | 21,206
Net movements of loans | 8,537 | (28,253)
Total | 4,121 | (7,051)
Analysis of other items | 2023 | 2022
HUF million | HUF million |
Fair value change - commodity | (9,011) | 98,846 |
Write-off of inventories, net | 9,142 | 33,813 |
Write-off of receivables, net | 9,099 | 1,451 |
Other non-highlighted items | (1,714) | (22) |
Total | 7,516 | 134,088 |

| 01 Jan 2023 balance | Cash flows used in financing activities | Non-cash changes | Non-financing CF related movements | 31 Dec 2023 balance
Acquisitions/ Disposals | Realised and non-realised FX | FV change on derivatives | Accrued Interest | New lease liabilities
HUF million | HUF million | HUF million | HUF million | HUF million | HUF million | HUF million | HUF million | HUF million
Long-term debt | 650,413 | 130,504 | 62,276 | (5,030) | - | 34,384 | 40,634 | - | 913,181
Other non-current financial liabilities | 20,671 | 3,370 | - | (31) | - | - | - | (18,868) | 5,142
Short-term debt | 468,686 | (251,221) | - | (50,965) | - | 10,448 | - | 8,453 | 185,401
Other current financial liabilities | 231,454 | (2,465) | - | (8,278) | 2,042 | - | - | (17,837) | 204,916
Total Cash flows used in financing activities from financial liabilities | (119,812) |  |  |  |  |  |  |
Other items impacting Cash flows used in financing activities | (274,724) |  |  |  |  |  |  |
Total Cash flows used in financing activities | (394,536) |  |  |  |  |  |  |

From the HUF 274,724 million Other items impacting Cash flows used in financing activities, HUF 268,379 million is the paid dividend to shareholders from retained earnings.

|  | Consolidated Financial Statements 2023 | 82

27. Earnings per share

Accounting policies

Basic earnings per share are calculated by dividing the net profit for the period attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period, after deduction of the average number of treasury shares held over the period.

The calculation of diluted earnings per share is consistent with the calculation of basic earnings per share taking into consideration all dilutive potential ordinary shares that were outstanding during the period:

• the net profit for the period attributable to ordinary shares is increased by the after-tax number of dividends and interest recognised in the period in respect of the dilutive potential ordinary shares and adjusted for any other changes in income or expense that would result from the conversion of the dilutive potential ordinary shares.

• the weighted average number of ordinary shares outstanding is increased by the weighted average number of additional ordinary shares which would have been outstanding assuming the conversion of all dilutive potential ordinary shares.

| Income | Weighted average number of shares | Earnings/(Loss) per share
| HUF million | HUF
Basic Earnings Per Share cont.op. 2022 | 628,293 | 738,288,487 | 851.01
Diluted Earnings Per Share cont.op. 2022 | 628,293 | 740,092,497 | 848.94
Basic earnings per share attributable to owners of the parent (HUF) discont.op. 2022 | 223,297 | 738,288,487 | 302.45
Diluted earnings per share attributable to owners of the parent (HUF) discont.op. 2022 | 223,297 | 740,092,497 | 301.71
Basic Earnings Per Share 2022 | 851,590 | 738,288,487 | 1,153.47
Diluted Earnings Per Share 2022 | 851,590 | 740,092,497 | 1,150.65
Basic Earnings Per Share cont.op. 2023 | 530,367 | 741,337,396 | 715.42
Diluted Earnings Per Share cont.op. 2023 | 530,367 | 741,337,396 | 715.42
Basic earnings per share attributable to owners of the parent (HUF) discont.op. 2023 | (449) | 741,337,396 | (0.61)
Diluted earnings per share attributable to owners of the parent (HUF) discont.op. 2023 | (449) | 741,337,396 | (0.61)
Basic Earnings Per Share 2023 | 529,918 | 741,337,396 | 714.81
Diluted Earnings Per Share 2023 | 529,918 | 741,337,396 | 714.81

The diluted earnings per share differs from the basic earnings per share due to dilutive effect of outstanding number of shares with conversion option in equity-settled share-based payment ( 2023.12.31: 0 2022.12.31.: 1,695,704) and cash-settled share-based payment (2023 12.31: 0 2022.12.31.: 108,306 ) programs.

28. Related party transactions

a) Transactions with associated companies and joint ventures

| 31 Dec 2023 | 31 Dec 2022
| HUF million | HUF million
Trade and other receivables due from related parties | 8,851 | 7,313
Long-term loans given to related parties | 55,350 | 71,792
Long-term receivables from related parties due to finance lease | 5,830 | 6,419
Short-term loans given to related parties | 157 | 2,644
Short-term receivables from related parties due to finance lease | 665 | 636
Trade and other payables due to related parties | 18,444 | 14,461
Long-term liabilities to related parties due to finance lease | 2,862 | 3,481
Short-term liabilities to related parties due to finance lease | 538 | 541
Net sales to related parties | 40,448 | 55,947
Other expenses from impairment of receivables due from related parties | - | 31
Financial expenses from impairment of receivables due from related parties | 5,407 | 9,907

The Group purchased and sold goods and services with associated companies and joint ventures during the ordinary course of business in 2023 and 2022. All of the transactions were conducted under market prices and conditions.

b) Remuneration of the members of the Board of Directors

Directors’ remuneration approximated HUF 156 million in 2023 (2022: HUF 145 million). In addition, the directors participate in a long-term incentive scheme details of which are given in Note 4.

|  | Consolidated Financial Statements 2023 | 83

Directors are remunerated with the following net amounts in addition to the incentive scheme:

Executive and non-executive directors 25,000 EUR/year

Committee chairmen 31,250 EUR/year

In case the position of the Chairman is not occupied by a non-executive director, it is the non-executive vice Chairman who is entitled to this payment. Directors who are not Hungarian citizens and do not have permanent address in Hungary are provided with EUR 1,500 on each Board meeting (maximum 15 times a year) when travelling to Hungary.

c) Number of shares held by the members of the Board of Directors, Chief Executives’ Committee and the Management

| 2023 | 2022
| Number of shares | Number of shares
Board of Directors | 4,972,405 | 2,903,184
Chief Executives' and Management Committee (except Board of Directors members) | 250,000 | 250,000
Senior Management (except Board of Directors, Chief Executives', Supervisory Board and Management Committee members) | 19,618 | 233,305
Total | 5,242,023 | 3,386,489

d) Transactions with Management, officers and other related parties

In 2023 entities controlled by the members of key management personnel purchased fuel and other retail services from MOL Group in the total value of HUF 4,584 million (2022: HUF 3,921 million). MOL Group provided subsidies through sponsorship for sport organisations controlled by key management personnel in the total value of HUF 720 million (2022: HUF 642 million). MOL Group purchased other services (including PR, media, business operations related services) from companies controlled by key management personnel in the total value of HUF 3,462 million (2022: HUF 1,557 million). All of the transactions were conducted under market prices and conditions.

Entities controlled by key management personnel hold 3,793,145 shares (2022: 2.100.000 shares).

e) Key management compensation

The amounts disclosed contain the compensation of managers who qualify as a key management member of MOL Group.

| 2023 | 2022
| HUF million | HUF million
Salaries and wages | 1,204 | 958
Other short-term benefits | 421 | 896
Share-based payments | 553 | 331
Total | 2,178 | 2,185

f) Loans to the members of the Board of Directors and Supervisory Board

No loans have been granted to key management personnel.

29. Events after the reporting period

a) MOL, Volánbusz, MÁV and Waberer's strategic cooperation

In January of 2024, the MOL signed the strategic cooperation agreement with national autobus transportation provider VOLÁNBUSZ; MÁV, the national railway company, and WÁBERER’s, the leading Hungarian innovative logistics provider to join efforts for the development of the hydrogen economy. In the framework of the cooperation, MOL will investigate opportunities for green hydrogen production, applicable in industry and mobility, coordinate our development activities and project proposals. Also, will explore concepts to boost the growth of hydrogen fuel cell technology in mobility, as well as the infrastructure supporting it.

b) Agreement with Újpest 1885 Futball Llc.

An agreement has been reached between MOL Asset Management Ltd. And Újpest 1885 Football Ltd., under which the MOL Group subsidiary will acquire a majority stake in the company operating Újpest Football Club. The closing of the transaction and the actual change of ownership is expected to take place by the end of April 2024.

MOL's aim is to provide long-term support to Újpest FC as a trustworthy owner in order to build a future worthy of the club's illustrious past in the ever-evolving Hungarian football scene.

|  | Consolidated Financial Statements 2023 | 84

The arrival of the new owner will open up new horizons, resources and opportunities for the club, which can be one of the foundations for development and success.

MOL has always been a committed supporter of Hungarian sport and football. As the most popular team sport, football has played a distinguished role in Hungarian sport, MOL is one of the biggest sponsors of the sport and a key partner of the Hungarian Football Association and the men's national team.

c) Waste management joint company in Budapest region with Budapest Public Utilities Ltd. (BKM)

On 22 November 2022 MOL Plc. and BKM Ltd. have reached an alignment regarding the set-up of MOHU Budapest Ltd., a 50-50% owned company to provide waste management services in the Budapest region. In 2024 March the Board of Directors approved the transaction by which BKM Ltd. will contribute the collection and transportation assets to MOHU Budapest Ltd. while MOL Plc. will inject the equivalent amount in cash. Besides the collection and transportation services MOHU Budapest Ltd. will also operate the industrial-scale waste incinerator and the waste disposal site located in Pusztazámor, both of them are essential to manage waste generated in the Budapest region.

|  | Consolidated Financial Statements 2023 | 85

30. Appendices

a) Appendix I.: Issued but not yet effective International Financial Reporting Standards and Amendments

At the date of authorisation of these financial statements, the following standards and interpretations were in issue but not yet effective:

• Amendments to IFRS 16 Leases: Lease Liability in a Sale and Leaseback (effective for annual periods beginning on or after 1 January 2024 and endorsed by EU)

• Amendments to IAS 1 Presentation of Financial Statements: Classification of Liabilities as Current or Non-current, Classification of Liabilities as Current or Non-current - Deferral of Effective Date and Non-current Liabilities with Covenants (effective for annual periods beginning on or after 1 January 2024 and endorsed by EU)

• Amendments to IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments: Disclosures: Supplier Finance Arrangements (effective for annual periods beginning on or after 1 January 2024 not yet endorsed by EU)

• Amendments to IAS 21 The Effects of Changes in Foreign Exchange Rates: Lack of Exchangeability (effective for annual periods beginning on or after 1 January 2025 not yet endorsed by EU)

MOL is in the process of evaluating the impact of these amendments. They are not expected to have a significant effect on future financial reporting.

|  | Consolidated Financial Statements 2023 | 86

b) Appendix II.: Subsidiaries

| Country (Incorporation/Branch) |  | Ownership
Company name | Range of activity | 2023 | 2022
Integrated subsidiaries |  |  |  |
INA-Industrija nafte d.d. | Croatia | Integrated oil and gas company | 49% | 49%
Upstream |  |  |  |
Adriagas S.r.l. | Italy | Pipeline project company | 49% | 49%
Csanád Szénhidrogén Koncessziós Kft. | Hungary | Exploration and production activity | 100% | 100%
EMSZ Első Magyar Szénhidrogén Koncessziós Kft. | Hungary | Exploration and production activity | 100% | 100%
Kalegran B.V. | Netherlands | Exploration financing | 100% | 100%
Kalegran B.V Erbil Branch Office | Iraq | Exploration and production activity | 100% | 100%
KMSZ Koncessziós Kft. | Hungary | Exploration and production activity | 100% | 100%
MH Oil and Gas BV. | Netherlands | Investment management | 100% | 100%
MNS Oil and Gas B.V. | Netherlands | Exploration financing | 100% | 100%
MOL Bázakerettye Szénhidrogén Koncessziós Kft. | Hungary | Exploration and production activity | 100% | 100%
MOL Bucsa Szénhidrogén Koncessziós Kft. | Hungary | Exploration and production activity | 100% | 100%
MOL Crossroads B.V. | Netherlands | Exploration financing | 100% | 100%
MOL Azerbaijan Ltd. | Bermuda | Exploration and production activity | 100% | 100%
MOL Dráva Szénhidrogén Koncessziós Kft. | Hungary | Exploration and production activity | 100% | 100%
MOL (FED) Kazakhstan B. V. - Head office | Netherlands | Exploration financing | 100% | 100%
MOL (FED) Kazakhstan B.V. - Branch office | Kazakhstan | Investment management | 100% | 100%
MOL Nordsjön B.V. | Netherlands | Exploration financing | 100% | 100%
MOL Norge AS 3 | Norway | Exploration activity | - | 100%
MOL Nyírség-Dél Szénhidrogén Koncessziós Kft. | Hungary | Exploration and production activity | 100% | 100%
MOL Nyírség-Észak Szénhidrogén Koncessziós Kft. | Hungary | Exploration and production activity | 100% | 100%
MOL Okány-Nyugat Szénhidrogén Koncessziós Kft. | Hungary | Exploration and production activity | 100% | 100%
MOL Őrség Szénhidrogén Koncessziós Kft. | Hungary | Exploration and production activity | 100% | 100%
MOL Pakistan Oil and Gas Co. B.V. - Head Office | Netherlands | Exploration financing | 100% | 100%
MOL Pakistan Oil and Gas Co. B.V. - Branch Office | Pakistan | Exploration and production activity | 100% | 100%
MOL-RUSS Ooo. | Russia | Management services | 100% | 100%
MOL Somogyvámos Szénhidrogén Koncessziós Kft. | Hungary | Exploration and production activity | 100% | 100%
MOL SZMDK Szénhidrogén Koncessziós Kft. | Hungary | Exploration and production activity | 100% | 100%
MOL Zala-Nyugat Szénhidrogén Koncessziós Kft. | Hungary | Exploration and production activity | 100% | 100%
Panfora Oil and Gas S.r.l. | Romania | Exploration and production activity | 100% | 100%
Tápió Szénhidrogén Koncessziós Kft. | Hungary | Exploration and production activity | 100% | 100%
Gas-Midstream |  |  |  |
FGSZ Földgázszállító Zrt. | Hungary | Natural gas transmission | 100% | 100%
Downstream |  |  |  |
Aufwind Schmack Első Biogáz Kft. 2 | Hungary | Biogas production | 100% | -
Croplin, d.o.o. | Croatia | Natural gas trading | 49% | 49%
IES S.p.A. | Italy | Refinery and marketing of oil products | 100% | 100%
Panta Distribuzione S.r.l. | Italy | Trading of oil products | 100% | 100%
INA d.o.o. | Serbia | Trading of oil products | 49% | 49%
INA Kosovo d.o.o. | Kosovo | Trading of oil products | 49% | 49%
INA Maziva Ltd. | Croatia | Lubricants production and trading | 49% | 49%
Leodium Investment Kft. | Hungary | Financial services | 100% | 100%
MOL Austria GmbH | Austria | Wholesale trade of lubricants and oil products | 100% | 100%
Roth Energie GmbH (former: Roth Heizöle GmbH) | Austria | Trading of oil products | 100% | 100%
MOL Commodity Trading Kft. | Hungary | Financial services | 100% | 100%
MOL Germany GmbH | Germany | Trading of oil products | 100% | 100%
Aurora Kunststoffe GmbH | Germany | Plastic compounding | 100% | 100%
Aurora Kunststoffe Walldürn GmbH | Germany | Plastic compounding | 100% | 100%
Aurora Kunststoffe VS GmbH | Germany | Plastic compounding | 100% | 100%
MOL Kunststoff Kft. | Hungary | Investment management | 100% | 100%
MOL-LUB Kft. | Hungary | Production and trade of lubricants | 100% | 100%
MOL Petrolkémia Zrt. | Hungary | Petrochemical production and trading | 100% | 100%
Tisza-WTP Kft. 1 | Hungary | Feed water and raw water supply | 0% | 0%
TVK-Erőmű Kft. | Hungary | Electricity production and distribution | 100% | 100%
MOL REMA Holding Kft. | Hungary | Investment management | 100% | 100%
Recrea Asset Management Zrt. | Hungary | Business management | 100% | 100%
ReMat Hulladékhasznosító Zrt. | Hungary | Recycling and wholesale of waste | 100% | 100%
ReMat Slovakia s.r.o. | Slovakia | Recycling and wholesale of waste | 100% | 100%
MOL Slovenia Downstream Investment B.V. | Netherlands | Investment management | 100% | 100%
Moltrans Kft. | Hungary | Transportation services | 100% | 100%
MOLTRADE-Mineralimpex Zrt. | Hungary | Importing and exporting of energetical products | 100% | 100%
MOL CZ Downstream Investment B.V. | Netherlands | Investment management | 100% | 100%
MOL Ukraine LLC | Ukraine | Wholesale and retail trade | 100% | 100%
OT Industries Fővállalkozó Zrt. | Hungary | Technical consultancy | 100% | 100%
OLAJTERV Tervező Zrt. (former: OT Industries Tervező Zrt.) | Hungary | Engineering activity | 100% | 100%
SLOVNAFT a.s. | Slovakia | Refinery and marketing of oil and petrochemical products | 100% | 100%
Dalby a.s. | Slovakia | Wholesale and retail trade | 100% | 100%
Slovnaft Polska S.A. | Poland | Wholesale and retail trade | 100% | 100%
Slovnaft Trans a.s. | Slovakia | Transportation services | 100% | 100%
Vúrup a.s. | Slovakia | Research and development | 100% | 100%
Terméktároló Zrt. | Hungary | Oil product storage | 74% | 74%
Zväz pre skladovanie zásob a.s. | Slovakia | Wholesale and retail trade, warehousing | 100% | 100%
Consumer Services |  |  |  |
Energopetrol d.d. | Bosnia and Herzegovina | Retail trade | 44% | 44%
Fresh Corner Restaurants Holding Kft. | Hungary | Investment management | 100% | 100%
Fresh Corner Restaurants Kft. | Hungary | Catering services | 100% | 100%
Holdina d.o.o. | Bosnia and Herzegovina | Trading of oil products | 49% | 49%
INA Crna Gora d.o.o. | Montenegro | Trading of oil products | 49% | 49%
INA Maloprodajni servisi d.o.o. | Croatia | Trade agency in the domestic and foreign market | 49% | 49%
INA Slovenija d.o.o. | Slovenia | Trading of oil products | 49% | 49%
MOL Česká republika s.r.o. | Czech Republic | Wholesale and retail trade | 100% | 100%

|  | Consolidated Financial Statements 2023 | 87

| Country (Incorporation/Branch) |  | Ownership
Company name | Range of activity | 2023 | 2022
MOL Fleet Holding Kft. | Hungary | Investment management | 100% | 100%
MOL Fleet Solution Flottakezelő Kft. | Hungary | Fleet management | 100% | 100%
MOL & INA d.o.o. 2 | Slovenia | Trading of oil products | 100% | -
MOL Limitless Mobility Holding Kft. | Hungary | Investment management | 100% | 100%
MOL Limitless Mobility Kft. | Hungary | Car sharing | 100% | 100%
MOL Polska sp. z o.o. | Poland | Retail sale of fuel for motor vehicles at service stations | 100% | 100%
MOL Retail Holding Kft. | Hungary | Real estate management | 100% | 100%
MOL Kiskereskedelmi Ingatlan Kft. | Hungary | Real estate management | 100% | 100%
MOL Romania PP s.r.l. | Romania | Retail and wholesale trade of fuels and lubricants | 100% | 100%
MOL Serbia d.o.o. | Serbia | Retail trade of fuels and lubricants | 100% | 100%
MOL Slovenia d.o.o. | Slovenia | Retail trade of fuels and lubricants | 100% | 100%
MOL Vendéglátó Kft. | Hungary | Hospitality, operating café houses | 100% | 100%
Slovnaft Mobility Services, s.r.o. | Slovakia | Rental services | 100% | 100%
Slovnaft Retail, s.r.o. 4 | Slovakia | Wholesale and retail trade | - | 100%
Tifon d.o.o. | Croatia | Retail trade of fuels and lubricants | 100% | 100%
Corporate and other |  |  |  |
FER Tűzoltó és Szolgáltató Kft. | Hungary | Fire services | 100% | 100%
Geoinform Kft. | Hungary | Hydrocarbon exploration | 100% | 100%
Hostin d.o.o. | Croatia | Tourism | 49% | 49%
INA Industrijski servisi d.o.o. | Croatia | Investment management | 49% | 49%
Crosco Naftni Servisi d.o.o. | Croatia | Oilfield services | 49% | 49%
Crosco S.A. DE C.V | Mexico | Maintaining services | 49% | 49%
Crosco Ukraine Llc. | Ukraine | Oilfield services | 49% | 49%
Rotary Zrt. | Hungary | Oilfield services | 49% | 49%
Rotary D&WS SRL 3 | Romania | Oilfield services | - | 49%
Sea Horse Shipping Inc. 3 | Marshall Islands | Platform ownership | - | 49%
Plavi Tim d.o.o. | Croatia | IT services | 49% | 49%
STSI integrirani tehnički servisi d.o.o. | Croatia | Repairs and maintenance services | 49% | 49%
INA Vatrogasni Servisi d.o.o. | Croatia | Firefighting services | 49% | 49%
MOL Aréna Kft. | Hungary | Investment management | 100% | 100%
MOL Biztonsági Szolgáltatások Kft. | Hungary | Security services | 100% | 100%
MOL CVC Investment Kft. | Hungary | Investment management | 100% | 100%
MOL E-mobilitás Vagyonkezelő Kft. | Hungary | Investment management | 100% | 100%
ITK Holding Zrt. 2 | Hungary | Investment management | 94% | -
Inter Traction Electrics Kft. 2 | Hungary | Motor vehicle manufacturing | 94% | -
Inter Tan-Ker Zrt. 2 | Hungary | Passenger transportation | 94% | -
Inter Tan-Ker City Kft. 2 | Hungary | Passenger transportation | 94% | -
Inter-Traffic Management Kft. 2 | Hungary | Renting and operating of owned and leased vehicles | 94% | -
ITE Bus & Truck Kereskedelmi Kft. 2 | Hungary | Vehicle sales and aftersales | 94% | -
Pandant TMSZ Kft. 2 | Hungary | Security services | 94% | -
MOL GBS Magyarország Kft. | Hungary | Accounting services | 100% | 100%
MOL GBS Slovensko s.r.o. | Slovakia | Accounting services | 100% | 100%
MOL Group Finance Zrt. | Hungary | Investment management | 100% | 100%
MOL Group International Services B.V. | Netherlands | Financial and accounting services | 100% | 100%
MOL Ingatlan Holding Kft. | Hungary | Investment management | 100% | 100%
MOL Campus Kft. | Hungary | Real estate management | 100% | 100%
MOL C.F. Kft. | Hungary | Real estate management | 100% | 100%
MOL Investment Kft. | Hungary | Financial services | 100% | 100%
MOL IT & Digital GBS Magyarország Kft. | Hungary | IT services | 100% | 100%
MOL IT & Digital GBS Slovensko, s.r.o. | Slovakia | IT services | 100% | 100%
MOL IT Holding Kft. | Hungary | Investment management | 100% | 100%
MOL Körforgásos Gazdálkodás Kft. 2 | Hungary | Waste Management | 100% | -
MOL Magyarország Társasági Szolgáltató Kft. | Hungary | Company services | 100% | 100%
MOL Reinsurance Co. DAC | Ireland | Captive insurance | 100% | 100%
MOL RES Investments Zrt. | Hungary | Geothermal energy production | 100% | 100%
MOL Solar Energy Holding Kft. | Hungary | Business services | 100% | 100%
MOL Solar Operator Kft. | Hungary | Power production | 100% | 100%
MOL Transportation Services Kft. | Hungary | Transportation services | 100% | 100%
MOHU Holding Kft. 2 | Hungary | Investment management | 100% | -
NHSZ Észak-KOM Nonprofit Kft. 2 | Hungary | Waste Management | 94% | -
NHSZ Gyöngyösi Reg. Hulladékkezelő Kft. 2 | Hungary | Waste Management | 98% | -
NHSZ Mátra Hulladékkezelő Nonporfit Kft. 2 | Hungary | Waste Management | 99% | -
NHSZ Miskolc Kft. 2 | Hungary | Waste Management | 100% | -
NHSZ Tatabánya Zrt. 2 | Hungary | Waste Management | 67% | -
NHSZ Vértes Vidéke HG Nonprofit Kft. 2 | Hungary | Waste Management | 65% | -
NHSZ Tapolca Nonprofit Kft. 2 | Hungary | Waste Management | 96% | -
NHSZ Csobánc Kft. 2 | Hungary | Waste Management | 96% | -
NHSZ TISZA Nonprofit Kft. 2 | Hungary | Waste Management | 77% | -
MOHU MOL Hulladékgazdálkodási Zrt. 2 | Hungary | Waste Management | 100% | -
MOL Vagyonkezelő Kft. | Hungary | Investment management | 100% | 100%
Neptunus Investment Kft. | Hungary | Investment management | 100% | 100%
Fonte Viva Kft. | Hungary | Mineral water production and distribution | 100% | 100%
Petrolszolg Kft. | Hungary | Repairs and maintenance services | 100% | 100%
Slovnaft Montáže a opravy a.s. | Slovakia | Repairs and maintenance services | 100% | 100%
MOL Industrial Services Investment Kft. | Hungary | Investment management | 100% | 100%
ISO-SZER Kft. | Hungary | Construction services | 100% | 100%
KVV Zrt. (former: OT Industries-KVV Kivitelező Zrt.) | Hungary | Pipeline construction | 100% | 100%
OT Industries Eszközhasznosító Kft. | Hungary | Leasing activity | 100% | 100%
Top Računovodstvo Servisi d.o.o. | Croatia | Accounting services | 49% | 49%
TVK Ingatlankezelő Kft. | Hungary | Real estate management | 100% | 100%
1) Fully consolidated because MOL Petrolkémia Zrt. and TVK Erőmű Kft. is the only costumer of Tisza-WTP Kft.; 2) Fully consolidated from 2023; 3) Liquidated in 2023; 4) Merged to Slovnaft a.s. in 2023

|  | Consolidated Financial Statements 2023 | 88

c) Appendix III.: Clean CCS profit/(loss) from operation (Clean CCS EBIT)

Clean CCS-based profit/(loss) from operation and its calculation methodology is not regulated by IFRS. CCS stands for Current cost of supply. Clean CCS EBIT is the most closely watched earnings measure in the oil and gas industry as it best captures the underlying performance of a refining operation as it removes non-recurring special items, inventory holding gains and losses, impairment on raw materials, purchased finished products and own-produced inventory and derivative transactions.

Inventory holding gain/loss

EBIT after excluding the inventory holding gain/loss reflects the actual cost of supplies of the analysed period therefore it provides better portray on the underlying production and sales results and makes the results comparable to other companies in the industry.

Impairment on inventory

Inventories must be measured at the lower of cost or net realisable value.

The cost of inventories must be reduced - i.e. impairment must be recognised on closing inventory of the period- if the cost is significantly higher than the expected sales price minus cost to sell.

In case of finished products, impairment should be recognised if the closing value of the inventory at the end of period is above the future sales price of the product minus cost to sell. In case of raw materials and semi-finished products that will be used further in production, it has to be examined whether, following their use in production; their value can be recovered in the selling price of the produced finished products. If their value is not fully recoverable impairment must be recognised to the recoverable level.

Derivative transactions

CCS methodology is based on switching to period average crude oil prices, but the CCS effect together with the effect of commodity derivative transactions would lead to unnecessary duplication, therefore the P&L effect of commodity derivatives are eliminated, except for the results of strategic hedges and rotation transactions

CO2 adjustment

CO2 adjustment revaluates provisions created in Downstream operation for CO2 consumption above freely allocated quotas, as defined in accounting policy. This adjustment ensures the accurate cost recognition for the given period in the clean CCS result, also including the smoother distribution within the financial year. It consequently eliminates rolled-over impacts between financial years, too.

Non-recurring special items

One-off items are single, significant (more than USD 10 million P&L effect), non-recurring economic events which are not considered as part of the core operation of the segment therefore they do not reflect the actual performance of the given period.

| 2023 | 2022
Clean CCS profit/(loss) from operation reconciliation | HUF million | HUF million
Profit from operation | 677,575 | 1,259,112
Inventory holding gain/(loss) | 400 | (82,167)
Impairment on raw materials and own-produced inventory | (8,249) | 18,693
- thereof affects raw materials | 351 | 134
- thereof affects own-produced inventory | (8,534) | 13,426
- thereof affects purchased goods/products inventory | (65) | 5,133
Cargo commodity derivatives | (1,799) | 103,396
CO2 adjustment | (2,030) | 4,111
CCS profit from operation | 665,897 | 1,303,145
Impact of derivative transactions | (13,410) | (4,770)
Other Clean adjustment | (245) | -
Special items | 45,226 | (6,045)
Clean CCS profit from operation | 697,468 | 1,292,330

|  | Consolidated Financial Statements 2023 | 89

Special items | 2023 | 2022
HUF million | HUF million
Profit from operation excluding special items | 722,801 | 1,253,067
Upstream |  |
Impairment on Upstream assets in the Group | (3,654) | 15,273
MOL Plc. Decommissioning liability revision estimate | 16,904 | -
INA Decommissioning liability revision estimate | 8,648 | -
Total special items in Upstream | 21,898 | 15,273
Downstream |  |
Impairment of assets under construction at SN | - | (4,678)
Impairment of assets under construction at MOL Plc. | - | (4,550)
Total special items in Downstream | - | (9,228)
Consumer services |  |
Impairment of Retail assets | (61,257) | -
Total special items in Consumer services | (61,257) | -
Corporate and Other |  |
ITK Goodwill impairment | (5,867) | -
Total special items in Corporate and Other | (5,867) | -
Total impact of special items on profit from operation | (45,226) | 6,045
Profit from operation | 677,575 | 1,259,112

|  | Consolidated Financial Statements 2023 | 90

d) Appendix IV.: Additional presentations according to the Hungarian Accounting Law

Person responsible for supervising transactional accounting and preparation of IFRS financial statements

Name: Ervin Berki

Registration number: 195106 (IFRS specialisation)

Person required to sign the statement of responsibility

Name: József Molnár, Group Chief Executive Officer

Address: HU – 1165 Budapest, Hunyadvár utca 42.

Name: József Simola, Group Chief Financial Officer

Address: HU – 1112 Budapest, Ördögorom út 3/C A ép. 1.

Contacts

Company name: MOL Plc.

Registered address: HU – 1117 Budapest, Dombóvári út 28.

Official website: www.molgroup.info

Presentation of company controls

In accordance with paragraph 89 of the Hungarian Accounting Law the financial statements include the itemised list of the name, registered address and voting percentage of all business associations in which the company has majority control according to the provisions of the Civil Code governing business associations. See Appendix II.

There is no such company which holds majority control or qualified majority control in MOL Plc.

Audit fees

In accordance with paragraph 133 of the Hungarian Accounting Law the financial statements include the total fees for the financial year charged by the auditor or audit firm for the audit of consolidated accounts and for non-audit services. The fee charged by the audit firm (Deloitte Könyvvizsgáló és Tanácsadó Kft.) for the statutory audit of the 2023 consolidated and separate financial statements of MOL Plc. is HUF 110 million. The auditor including its network charged HUF 280 million for other assurance and audit-related services, HUF 60 million for tax advisory services and HUF 130 million for other non-audit-related services to MOL Plc. and its subsidiaries for 2023 excluding fees for statutory audits of annual financial statements.

|  | Consolidated Financial Statements 2023 | 91

e) Appendix V.: Presentation of licensed activities

Act LXXXVI of 2007 on Electricity (hereafter “Vet.”) stipulates that an integrated electricity enterprise and an enterprise holding several licenses shall present its various licensed activities independently in the notes of its consolidated financial statements. Separate presentation of licensed activities - in the case of several licensed activities of the same type - means accumulated separate statement of financial position and accumulated statement of profit or loss.

Government Decree No. 273/2007 (X.19.) provide for the implementation of the Act.

Act XL of 2008 on Natural Gas (hereafter “Get.”) stipulates that an integrated natural gas enterprise and an enterprise holding several licenses shall present its various licensed activities independently in the notes of its consolidated financial statements. Separate presentation of licensed activities - in the case of several licensed activities of the same type - means accumulated separate statement of financial position and accumulated statement of profit or loss.

Government Decree No. 19/2009 (I.30.) provide for the implementation of the Act.

Separation method

The separation method is described in the relevant internal policies of the companies. Short description of the policies presented in the below tables.

Companies prepares the activity separation annually.

In case of the separation of the statement of financial position, the individual activity statements of financial position are not closed on their own at certain companies. Any differences are presented on the “Technical income/(expense) for the period” line in conformance with official guidelines.

| STATEMENT OF PROFIT OR LOSS
| 2023 |
| Electricity | Natural gas
| MOL Plc. | TVK-Erőmű Kft. | MOL Solar Operátor Kft. | Total | FGSZ Földgázszállító Zrt. | MOL Commodity Trading Kft. | Total
| Trading | Manufacturing | Manufacturing |  | Transportation | Trading |
| HUF million | HUF million | HUF million | HUF million | HUF million | HUF million | HUF million
Net sales | 152,195 | 6,487 | 1,585 | 160,267 | 139,931 | 47,316 | 187,247
Other operating income | 146 | 1 | - | 147 | 6,362 | -37 | 6,325
Total operating income | 152,341 | 6,488 | 1,585 | 160,414 | 146,293 | 47,279 | 193,572
Raw materials and consumables used | 139,370 | 4,406 | 290 | 144,066 | 40,082 | 48,204 | 88,286
Employee benefits expense | 105 | - | - | 105 | 11,519 | - | 11,519
Depreciation, depletion, amortisation and impairment | 510 | 298 | 617 | 1,425 | 20,412 | - | 20,412
Other operating expenses | 726 | 24 | 48 | 798 | 3,954 | 165 | 4,119
Change in inventory of finished goods and work in progress | - | - | - | 0 | - | - | 0
Work performed by the enterprise and capitalised | 240 | - | - | 240 | -2,112 | - | -2,112
Total operating expenses | 140,951 | 4,728 | 955 | 146,634 | 73,855 | 48,369 | 122,224
Profit/(Loss) from operation | 11,390 | 1,760 | 630 | 13,780 | 72,438 | -1,090 | 71,348
Finance income | 979 | 162 | 353 | 1,494 | 520 | 62 | 582
Finance expense | -33 | 64 | 30 | 61 | 20,067 | 26 | 20,093
Total finance income/(expense) | 1,012 | 98 | 323 | 1,433 | -19,547 | 36 | -19,511
Profit/(Loss) before tax | 12,402 | 1,858 | 953 | 15,213 | 52,891 | -1,054 | 51,838
Income tax income/(expense) | - | -198 | -86 | -284 | -5,478 | - | -5,478
Profit/(Loss) for the year | 12,402 | 1,660 | 867 | 14,929 | 47,413 | -1,054 | 46,359

|  | Consolidated Financial Statements 2023 | 92

| STATEMENT OF FINANCIAL POSITION
| 31 Dec 2023
| Electricity | Natural gas
| MOL Plc. | TVK-Erőmű Kft. | MOL Solar Operátor Kft. | Total | FGSZ Földgázszállító Zrt. | MOL Commodity Trading Kft. | Total
| Trading | Manufacturing |  | Transportation | Trading |
| HUF million | HUF million | HUF million | HUF million | HUF million | HUF million | HUF million
NON-CURRENT ASSETS |  |  |  |  |  |  |
Property, plant and equipment | 1,827 | 2,236 | 6,940 | 11,003 | 275,571 | - | 275,571
Investment property | - | - | - | - | - | - | -
Intangible assets | - | - | - | - | 4,017 | - | 4,017
Investments | - | - | - | - | - | - | -
Other non-current financial assets | - | 884 | 3,479 | 4,363 | 1,443 | 5,070 | 6,513
Deferred tax asset | - | - | - | - | - | - | -
Other non-current assets | - | - | - | - | 120 | - | 120
Total non-current assets | 1,827 | 3,120 | 10,419 | 15,366 | 281,151 | 5,070 | 286,221
CURRENT ASSETS |  |  |  |  |  |  |
Inventories | 421 | 44 | 32 | 497 | 5,950 | - | 5,950
Trade and other receivables | 19,176 | 607 | 279 | 20,062 | 7,153 | 3,820 | 10,973
Securities | - | - | - | - | - | - | -
Other current financial assets | - | - | - | - | - | - | -
Income tax receivable | - | 285 | - | 285 | - | - | -
Cash and cash equivalents | - | 45 | - | 45 | 6,399 | 4,195 | 10,594
Other current assets | 30,571 | 91 | 14 | 30,676 | 1,780 | 2 | 1,782
Assets classified as held for sale | - | - | - | - | - | - | -
Total current assets | 50,168 | 1,072 | 325 | 51,565 | 21,282 | 8,017 | 29,299
Total assets | 51,995 | 4,192 | 10,744 | 66,931 | 302,433 | 13,087 | 315,520
EQUITY |  |  |  |  |  |  |
Share capital | 432 | 686 | 105 | 1,223 | 18,719 | 15 | 18,734
Retained earnings and other reserves | 3,101 | - | 9,232 | 12,333 | 84,487 | 1,715 | 86,202
Profit/(Loss) for the year | 12,402 | 1,660 | 866 | 14,928 | 47,413 | (1,054) | 46,359
Technical income/(expense) for the period | 17,400 | 1,069 | - | 18,469 | 724 | (231) | 493
Total equity | 33,335 | 3,415 | 10,203 | 46,953 | 151,343 | 445 | 151,788
NON-CURRENT LIABILITIES |  |  |  |  |  |  |
Long-term debt | (94) | - | 245 | 151 | 82,289 | - | 82,289
Other non-current financial liabilities | - | - | - | - | - | - | -
Non-current provisions | - | - | - | - | 2,506 | - | 2,506
Deferred tax liabilities | - | - | 164 | 164 | 20,872 | - | 20,872
Other non-current liabilities | - | - | - | - | 12,405 | - | 12,405
Total non-current liabilities | (94) | - | 409 | 315 | 118,072 | - | 118,072
CURRENT LIABILITIES |  |  |  |  |  |  |
Short-term debt | - | - | 9 | 9 | 1,417 | - | 1,417
Trade and other payables | 15,673 | 777 | 90 | 16,540 | 8,645 | 12,448 | 21,093
Other current financial liabilities | - | - | - | - | 11,642 | - | 11,642
Current provisions | - | - | - | - | 3,414 | - | 3,414
Income tax payable | - | - | 4 | 4 | 482 | - | 482
Liabilities classified as held for sale | - | - | - | - | - | - | -
Other current liabilities | 3,081 | - | 29 | 3,110 | 7,418 | 194 | 7,612
Total current liabilities | 18,754 | 777 | 132 | 19,663 | 33,018 | 12,642 | 45,660
Total liabilities | 18,660 | 777 | 541 | 19,978 | 151,090 | 12,642 | 163,732
Total equity and liabilities | 51,995 | 4,192 | 10,744 | 66,931 | 302,433 | 13,087 | 315,520

|  | Consolidated Financial Statements 2023 | 93

| Method of activity separation in the statement of profit or loss
| MOL Plc. | TVK-Erőmű Kft. | MOL Solar Operátor Kft. | FGSZ Földgázszállító Zrt. | MOL Commodity Trading Kft.
Net sales | Can be allocated directly to the activities. | Can be allocated directly to the activities. | Can be allocated directly to the activities. | Can be allocated directly to activities. | Can be allocated directly to the activities.
Other operating income | Can be allocated directly to the activities and adding company level other incomes attributed in proportion of the net sales revenue. | Distributed in proportion to net sales revenue. | Can be allocated directly to the activities. | Can be allocated directly to activities or in proportion to the direct asset. | Can be allocated directly to the activities.
Raw materials and consumables used | Can be allocated directly to the activities and adding company level cost of raw materials in proportion of the net sales revenue. | Distributed in proportion to net sales revenue, except of the contracted services, which are distributed in proportion of fixed assets. | Can be allocated directly to the activities. | Can be allocated directly to activities. | Can be allocated directly to the activities.
Employee benefits expense | Directly attributable employee benefits expenses in proportion of the headcount. | - | - | Distributed based on cost-centre classification of people. | -
Depreciation, depletion, amortisation and impairment | Directly attributable depreciation in proportion of the headcount allocated to the activity. | Can be allocated directly to the activities. | Can be allocated directly to the activities. | Distributed based on cost-centre classification of assets or in proportion to the direct asset. | -
Other operating expenses | Directly attributable other operating expenses and adding company level other operating expenses in proportion of the headcount and the net sales revenue. | Distributed in proportion to net sales revenue, except of the directly attributable authority fees and the insurance fees, which are distributed in proportion of fixed assets. | Can be allocated directly to the activities. | Can be allocated directly to activities. | Can be allocated directly to the activities.
Change in inventory of finished goods and work in progress | - | - | - | - | -
Work performed by the enterprise and capitalised | Directly attributable work performed by the enterpirse and capitalise in proportion of the headcount and the net sales revenue. | - | - | Can be allocated directly to activities. | -
Finance income | Distributed in proportion to net sales revenue. | Distributed in proportion to net sales revenue. | Can be allocated directly to the activities. | Can be allocated directly to activities or in proportion to the direct asset. | Can be allocated directly to the activities.
Finance expense | Distributed in proportion to net sales revenue. | Distributed in proportion to net sales revenue. | Can be allocated directly to the activities. | Can be allocated directly to activities or in proportion to the direct asset. | Can be allocated directly to the activities.
Income tax income/(expense) | - | Distributed in proportion to net sales revenue, except of the directly attributable industrial tax. | Can be allocated directly to the activities. | Distributed in proportion to profit before tax. | -

|  | Consolidated Financial Statements 2023 | 94

| Method of activity separation in the statement of financial position
| MOL Plc. | TVK-Erőmű Kft. | MOL Solar Operátor Kft. | FGSZ Földgázszállító Zrt. | MOL Commodity Trading Kft.
Property, plant and equipment | Can be allocated directly to the activities. | Distributed in proportion of fixed assets. | Can be allocated directly to the activities. | Distributed based on cost-centre classification of assets. | -
Investment property | - | - | - | - | -
Intangible assets | - | - | - | Distributed based on cost-centre classification of assets or in proportion to the direct asset. | -
Investments | - | - | - | - | -
Other non-current financial assets | - | Distributed in proportion of fixed assets. | Can be allocated directly to the activities. | Based on item-by-item inspection. | Based on item-by-item inspection.
Deferred tax asset | - | - | - | - | -
Other non-current assets | - | - | - | Based on item-by-item inspection. | -
Inventories | Can be allocated directly to the activities. | Distributed in proportion of fixed assets. | Can be allocated directly to the activities. | It is divided in proportion to the direct asset. | -
Trade and other receivables | Can be allocated directly to the activities. | Can be allocated directly to the activities. | Can be allocated directly to the activities. | Can be allocated directly to activities. | Based on item-by-item inspection.
Securities | - | - | - | - | -
Other current financial assets | - | - | - | - | -
Income tax receivable | - | Distributed in proportion to fixed assets, except of the directly attributable industrial tax. | - | - | -
Cash and cash equivalents | - | Distributed in proportion of fixed assets. | - | It is divided in proportion to the direct asset. | Based on item-by-item inspection.
Other current assets | Directly attributable other current assets and adding company level other current assets in proportion of the employee benefit expenses. | Distributed in proportion of fixed assets. | Can be allocated directly to the activities. | It is divided in proportion to the direct asset. | Based on item-by-item inspection.
Assets classified as held for sale | - | - | - | - | -

|  | Consolidated Financial Statements 2023 | 95

| Method of activity separation in the statement of financial position
| MOL Plc. | TVK-Erőmű Kft. | MOL Solar Operátor Kft. | FGSZ Földgázszállító Zrt. | MOL Commodity Trading Kft.
Share capital | Distributed in proportion of related assets. | Distributed in proportion of fixed assets. | Can be allocated directly to the activities. | Opening balance sheet in proportion to fixed assets. | Distributed in proportion of related assets.
Retained earnings and other reserves | Distributed in proportion of related assets. | - | Can be allocated directly to the activities. | Based on item-by-item inspection. | Distributed in proportion of related assets.
(Loss) / Profit for the year attr. to owners of parent | Can be allocated directly to the activities. | Can be allocated directly to the activities. | Can be allocated directly to the activities. | Activity breakdown of profit and loss account. | Can be allocated directly to the activities.
Technical income/(expense) for the period | Value ensuring equality between allocated assets and liabilities and shareholder's equity. | Value ensuring equality between allocated assets and liabilities and shareholder's equity. | - | Provides accounting equation. | Value ensuring equality between allocated assets and liabilities and shareholder's equity.
Long-term debt | Can be allocated directly to the activities. | - | Can be allocated directly to the activities. | It is divided in proportion to the direct asset. | -
Other non-current financial liabilities | - | - | - | - | -
Non-current provisions | - | - | - | It is divided in proportion to the direct asset. | -
Deferred tax liabilities | - | - | Can be allocated directly to the activities. | It is divided in proportion to the direct asset. | -
Other non-current liabilities | - | - | - | It is divided in proportion to the direct asset. | -
Short-term debt | - | - | Can be allocated directly to the activities. | It is divided in proportion to the direct asset. | -
Trade and other payables | Can be allocated directly to the activities. | Distributed in proportion to net sales revenue. | Can be allocated directly to the activities. | It is divided in proportion to the direct asset. | Based on item-by-item inspection.
Other current financial liabilities | - | - | - | It is divided in proportion to the direct asset. | -
Current provisions | - | - | - | It is divided in proportion to the direct asset. | -
Income tax payable | - | - | Can be allocated directly to the activities. | Distributed in proportion to profit before tax. | -
Liabilities classified as held for sale | - | - | - | - | -
Other current liabilities | Directly attributable other current liabilities and adding company level liabilities in proportion of the raw material cost and the employee benefit expenses. | - | Can be allocated directly to the activities. | It is divided in proportion to the direct asset. | Based on item-by-item inspection.

Statistical code: 10625790-1920-114-01

Company registration number: 01-10-041683

MOL HUNGARIAN OIL AND GAS PUBLIC LIMITED COMPANY

1117 Budapest, Dombóvári út 28.

2023

Separate FINANCIAL STATEMENTS PREPARED IN ACCORDANCE WITH INTERNATIONAL FINANCIAL REPORTING STANDARDS as adopted by the european union (EU) TOGETHER WITH THE INDEPENDENT AUDITOR’S REPORT

Budapest, 21 March 2024

|  | MOL Plc. Separate Financial Statements 2023 | 2

Separate Financial
Statements

Introduction
General information MOL Hungarian Oil and Gas Public Limited Company (hereinafter referred to as MOL Plc. or Company) was incorporated on 1 October 1991 in Hungary by the transformation of the predecessor National Oil and Gas Trust (OKGT). In accordance with the law on the transformation of unincorporated state-owned enterprises, the assets and liabilities of OKGT were revalued as at that date. MOL Plc. is involved in the exploration and production of crude oil, natural gas and other gas products, refining, transportation and storage of crude oil and wholesale and retail marketing of crude oil products. The registered office address of the Company is 1117 – Budapest, Dombóvári út 28, Hungary. The shares of the Company are listed on the Budapest and the Warsaw Stock Exchange. Depositary Receipts (DRs) are traded Over The Counter (OTC) market in the USA. There is no single ultimate controlling party of Mol Plc. Authorisation and Statement of Compliance These separate financial statements have been approved and authorised for issue by the Board of Directors on 21 March 2024. These separate financial statements have been prepared in accordance with International Financial Reporting Standards as adopted by the European Union (EU). Notes to the separate financial statements also contain disclosures required by Act C of 2000 on Accounting (“Hungarian Accounting Law”). Mol Plc. complies with the requirements of European Securities and Markets Authority (ESMA) and publishes its annual separate financial statements in XHTML format from 1 January 2021. |

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Independent auditor’s reporT

The independent auditor’s report is a separate document.

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Separate Statement of profit or loss

|  | 2023 | 2022
| Notes | HUF million | HUF million
Net sales |  | 3,335,935 | 3,858,458
Other operating income |  | 11,866 | 8,405
Total operating income | 3 | 3,347,801 | 3,866,863
Raw materials and consumables used |  | 2,605,710 | 3,009,135
Employee benefits expense |  | 96,312 | 89,656
Depreciation, depletion, amortisation and impairment |  | 90,781 | 120,073
Other operating expenses |  | 412,001 | 403,591
Change in inventory of finished goods & work in progress |  | 46,393 | (96,091)
Work performed by the enterprise and capitalised |  | (16,145) | (12,000)
Total operating expenses | 4 | 3,235,052 | 3,514,364
Profit from operation |  | 112,749 | 352,499
Finance income |  | 463,075 | 452,991
Finance expense |  | 227,350 | 212,013
Total finance income/(expense), net | 5 | 235,725 | 240,978
Profit/(Loss) before tax |  | 348,474 | 593,477
Income tax expense/(benefit) | 6 | 4,700 | 85,573
PROFIT/(LOSS) FOR THE YEAR |  | 343,774 | 507,904

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Separate Statement of Other comprehensive income

|  | 2023 | 2022
| Notes | HUF million | HUF million
Profit/(loss) for the year |  | 343,774 | 507,904
Other comprehensive income |  |  |
Other comprehensive income to be reclassified to profit/(loss) in subsequent periods: |  |  |
Changes in fair value of debt instruments at fair value through other comprehensive income, net of tax | 7 | 4,010 | (3,157)
Other comprehensive income/(loss) to be reclassified to profit/(loss) in subsequent periods |  | 4,010 | (3,157)
Other comprehensive income not to be reclassified to profit/(loss) in subsequent periods: |  |  |
Remeasurement of post-employment benefit obligations, net of tax | 7 | (522) | 594
Other comprehensive income/(loss) not to be reclassified to profit/(loss) in subsequent periods |  | (522) | 594
Other comprehensive income/(loss) for the year |  | 3,488 | (2,563)
Total comprehensive income/(loss) for the year |  | 347,262 | 505,341

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Separate Statement of financial position

|  | 12/31/2023 | 12/31/2022
|  | HUF million | HUF million
NON-CURRENT ASSETS |  |  |
Property, plant and equipment | 8 | 428,365 | 379,647
Intangible assets | 8 | 74,906 | 65,919
Investments | 9 | 3,070,766 | 3,016,528
Other non-current financial assets | 18 | 106,348 | 98,592
Deferred tax assets | 6 | 65,921 | 50,752
Other non-current assets | 10 | 1,075 | 1,302
Total non-current assets |  | 3,747,381 | 3,612,740
CURRENT ASSETS |  |  |
Inventories | 11 | 296,342 | 458,359
Trade and other receivables | 20 | 390,636 | 505,842
Securities | 18 | 3,763 | 830
Other current financial assets | 18 | 25,450 | 52,895
Income tax receivable | 6 | 23,367 | -
Cash and cash equivalents | 21 | 144,659 | 309,592
Other current assets | 12 | 26,655 | 19,630
Assets classified as held for sale | 16 | 1,192 | 2,586
Total current assets |  | 912,064 | 1,349,734
Total assets |  | 4,659,445 | 4,962,474
EQUITY |  |  |
Share capital |  | 80,723 | 80,544
Retained earnings and other reserves |  | 2,176,094 | 1,885,484
Profit/(Loss) for the year |  | 343,774 | 507,904
Total equity |  | 2,600,591 | 2,473,932
NON-CURRENT LIABILITIES |  |  |
Long-term debt | 18 | 385,633 | 400,148
Other non-current financial liabilities | 18 | 245 | 305
Non-current provisions | 13 | 230,502 | 210,877
Other non-current liabilities | 14 | 4,687 | 3,523
Total non-current liabilities |  | 621,067 | 614,853
CURRENT LIABILITIES |  |  |
Short-term debt | 18 | 74,368 | 356,617
Trade and other payables | 18 | 368,029 | 484,262
Other current financial liabilities | 18 | 864,105 | 814,258
Current provisions | 13 | 29,439 | 21,171
Income tax payable | 6 | - | 36,637
Other current liabilities | 15 | 101,846 | 160,744
Total current liabilities |  | 1,437,787 | 1,873,689
Total liabilities |  | 2,058,854 | 2,488,542
Total equity and liabilities |  | 4,659,445 | 4,962,474

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Separate statement of changes in equity

|  | Issued share capital | Treasury shares 1 | Share capital | Share premium | Fair valuation reserve | Retained earnings | Retained earnings and other reserves | Profit/(loss) for the year | Total equity
| Notes | HUF million | HUF million | HUF million | HUF million | HUF million | HUF million | HUF million | HUF million | HUF million
Opening balance 1 January 2022 |  | 102,429 | (21,437) | 80,992 | 219,389 | 56 | 1,453,258 | 1,672,703 | 410,366 | 2,164,061
Profit/(loss) for the year |  | - | - | - | - | - | - | - | 507,904 | 507,904
Other comprehensive income/(loss) for the year |  | - | - | - | - | (3,157) | 594 | (2,563) | - | (2,563)
Total comprehensive income/(loss) for the year |  | - | - | - | - | (3,157) | 594 | (2,563) | 507,904 | 505,341
Transfer to reserves |  | - | - | - | - | - | 410,366 | 410,366 | (410,366) | -
Dividends |  | - | - | - | - | - | (191,285) | (191,285) | - | (191,285)
MOL share purchase from MOL Vagyonkezelő Kft. |  | - | (1,298) | (1,298) | - | - | (26,233) | (26,233) | - | (27,531)
Treasury shares sold to MOL Plc. SESOP Organizations |  | - | 826 | 826 | - | - | 15,750 | 15,750 | - | 16,576
Equity recorded for share-based payments |  | - | 24 | 24 | - | - | 4,437 | 4,437 | - | 4,461
Other |  | - | - | - | - | - | 2,309 | 2,309 |  | 2,309
Closing balance 31 December 2022 |  | 102,429 | (21,885) | 80,544 | 219,389 | (3,101) | 1,669,196 | 1,885,484 | 507,904 | 2,473,932
Opening balance 1 January 2023 |  | 102,429 | (21,885) | 80,544 | 219,389 | (3,101) | 1,669,196 | 1,885,484 | 507,904 | 2,473,932
Profit/(loss) for the year |  | - | - | - | - | - | - | - | 343,774 | 343,774
Other comprehensive income/(loss) for the year |  | - | - | - | - | 4,010 | (522) | 3,488 | - | 3,488
Total comprehensive income/(loss) for the year |  | - | - | - | - | 4,010 | (522) | 3,488 | 343,774 | 347,262
Transfer to reserves | 17 | - | - | - | - | - | 507,904 | 507,904 | (507,904) | -
Dividends | 17 | - | - | - | - | - | (224,435) | (224,435) | - | (224,435)
Equity recorded for share-based payments |  | - | 179 | 179 | - | - | 3,653 | 3,653 | - | 3,832
Closing balance 31 December 2023 |  | 102,429 | (21,706) | 80,723 | 219,389 | 909 | 1,955,796 | 2,176,094 | 343,774 | 2,600,591
1 Including shares under repurchase obligation

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Separate statement of cash flows

|  | 2023 | 2022
| Notes | HUF million | HUF million
Profit/(Loss) before tax |  | 348,474 | 593,477
Adjustments to reconcile profit before tax to net cash provided by operating activities |  |  |
Depreciation, depletion, amortisation and impairment | 4 | 90,781 | 120,073
Increase / (decrease) in provisions | 13 | 597 | 1,863
Net (gain) / loss on asset disposal and divestments |  | 1,789 | (3,020)
Net interest expense / (income) | 5 | 128,452 | 77,818
Other finance expense / (income) | 5 | (364,309) | (318,706)
Other items | 23 | 11,477 | 123,229
Income taxes paid | 6 | (81,324) | (27,386)
Cash flows from operations before changes in working capital |  | 135,937 | 567,348
Change in working capital |  | 107,789 | (253,404)
(Increase) / decrease in inventories | 11 | 149,385 | (159,808)
(Increase) / decrease in trade and other receivables | 20 | 40,528 | (224,617)
Increase / (decrease) in trade and other payables | 18 | (13,550) | 158,764
(Increase)/decrease in other assets and liabilities | 12,15 | (68,574) | (27,743)
Cash flows from operations |  | 243,726 | 313,944
Capital expenditures | 2 | (103,310) | (73,873)
Proceeds from disposal of fixed assets |  | 2,762 | 6,635
(Increase) / Decrease in other finance assets |  | 5,042 | 54,135
Interest received and other financial income | 5 | 23,147 | 19,344
Dividends received | 5 | 376,159 | 148,506
Cash flows from investing activities |  | 303,800 | 154,747
Repayments of bonds, notes and debentures |  | (279,735) | -
Proceeds from borrowings |  | 53,009 | 312,991
Repayments of borrowings |  | (66,252) | (376,395)
Interest paid and other finance expense | 5 | (170,855) | (96,621)
Dividends paid to owners of parent | 17 | (224,386) | (191,234)
Net issue / repurchase of treasury shares |  | 3,845 | (9,133)
Cash flows from financing activities |  | (684,374) | (360,392)
Currency translation differences relating to cash and cash equivalents |  | (28,152) | 16,858
Increase/(decrease) in cash and cash equivalents |  | (165,000) | 125,157
Cash and cash equivalents at the beginning of the year |  | 309,592 | 184,435
Cash and cash equivalents at the end of the year |  | 144,659 | 309,592
Change in Cash and cash equivalents |  | (164,933) | 125,157
Change in Overdraft |  | (67) | -
Increase / (decrease) in cash and cash equivalents |  | (165,000) | 125,157

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Notes to the Separate financial statements – MATERIAL Accounting policies and other explanatory information

This section describes the basis of preparation of the separate financial statements and MOL Plc.’s applicable accounting policies. Accounting policies, critical accounting estimates and judgements that are specific to a given area are set out in detail in the relevant notes. This section also provides a brief summary of new accounting standards, amendments and interpretations that have already been adopted in the current financial year or will be adopted as those will be in force in the forthcoming years.

1. Material accounting policies and other explanatory information

Basis of preparation

These separate financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board and interpretations issued by IFRS Interpretations Committee as adopted by the EU and effective on 31 December 2023. Notes to the separate financial statements also contain disclosures required by Hungarian Accounting Law.

The separate financial statements are prepared on a going concern basis. For the purposes of the application of the historical cost convention, the separate financial statements treat the Company as having come into existence as of 1 October 1991, at the carrying values of assets and liabilities determined at that date, subject to the IFRS adjustments.

New and amended standards adopted by MOL Plc.

MOL Plc. has applied the following standard and amendments for the first time for the reporting period commencing 1 January 2023:

• IFRS 17 Insurance Contracts; including Amendments to IFRS 17

• Amendments to IAS 1 Presentation of Financial Statements and IFRS Practice Statement 2

• Amendments to IAS 8 Accounting policies, Changes in Accounting Estimates and Errors

• Amendments to IAS 12 Income Taxes

The above-mentioned amendments do not impact significantly the Company’s separate results, financial position or disclosures.

Issued but not yet effective International Financial Reporting Standards

Issued but not yet effective International Financial Reporting Standards are disclosed in the Appendix I.

Summary of material accounting policies

The accounting policies are detailed in the respective notes.

Functional and presentation currency

Based on the economic substance of the underlying events and circumstances the functional currency and presentation currency of MOL Plc. have been determined to be the Hungarian Forint (HUF).

Financial statement data is presented in millions of HUF, rounded to the nearest million HUF.

Foreign Currency Transactions

Foreign currency transactions are recorded initially at the rate of exchange at the date of the transaction, except for advanced payments for non-monetary items for which the date of transaction is the date of initial recognition of the prepayment. Exchange differences arising when monetary items are settled or when monetary items are translated at rates different from those at which they were translated when initially recognised or in previous separate financial statements are reported in profit or loss in the period. Monetary items denominated in foreign currencies are retranslated at exchange rate prevailing at the balance sheet date.

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Significant accounting estimates and judgements

In the process of applying the accounting policies, management has made certain judgements that have significant effect on the amounts recognised in the separate financial statements which are set out in detail in the respective notes.

The preparation of separate financial statements in conformity with IFRS requires the use of estimates and assumptions that affect the amounts reported in the separate financial statements and the notes thereto. Although these estimates are based on the management’s best knowledge of current events and actions, actual results may differ from those estimates. These are set out in detail in the respective notes.

In 2023, the Covid-19 pandemic had no significant impact on operations and financial results, and it became part of the usual business.

Effect of climate-related matters and energy transition on the significant accounting estimates

As part of the Enterprise Risk Management framework MOL Plc. identified climate-related matters as a material risk. MOL Plc’s long-term transformational strategy was created assessing these risks and represents how MOL Plc plans to mitigate the low-carbon economy transition risks. In addition, MOL Plc’s strategy was revised in line with the European Union’s proposed Fit for 55 package in 2021 and the Board and its committees are continuously monitoring progress against climate related targets. For more information on MOL Plc’s actions and plans regarding climate-related matters (including 2030 targets) please refer to the respective parts of the Integrated Annual Report of MOL Plc. MOL has considered the future effects of MOL’s own strategic decisions and commitments on having its portfolio adhered to the energy transition targets (including emission targets), the short- and long-term effects of climate change and energy transition in preparing the separate financial statements. They are subject to uncertainty and they may have significant impacts on the assets and liabilities currently reported by the Plc. Based on the management’s analysis on climate related matters and MOL’s 2030+ strategy, the risks associated with climate change and energy transition will not have a material impact on the MOL Plc.’s going concern assessment neither in the short-term nor in the foreseeable future.

The Fit for 55 package refers to the EU legislative package that represents the EU’s target of reducing net greenhouse gas emissions by at least 55% by 2030 compared to 1990 levels. It covers several areas and sets a wide range of targets for the EU’s 2030 climate and energy framework such as: EU Emission trading system(EU ETS), EU wide renewable energy targets, including a specific target for renewables share in the transport sector (REDII &REDIII), renewable hydrogen targets, energy efficiency targets. From the regulatory background the EU ETS system has the most significant effect on the financial statement The EU ETS system sets a limit on the total amount of greenhouse gases that can be emitted by entities under the system. Companies whose emissions surpass the regulated level have the option of purchasing additional quotas. As MOL Plc’s operation can be covered only partially by the free allocation, thus quota purchase is needed. MOL can ensure this shortfall with forward purchases throughout the issue year, while taking into account the quarterly updated needs. This mechanism ensures efficient risk management of quota prices and an optimal financing structure. The purchasing mechanism followed by MOL ensures that large shifts in quota prices have a more limited impact on the Plc’s financial performance. During the year, a provision is also booked to cover the needs of the upcoming year. MOL purchases the CO2 quota distributed during the year to achieve that the average purchase price be on the level of the average CO2 price. For more information and accounting policy on the emission rights please refer to Note 8/c and Note 13.

When making assumptions and judgements affecting the amounts reported in the financial statement, MOL uses the latest available and reliable information. The significant accounting estimates affecting the amounts reported in the financial statements are prepared in line with the long-term strategy of MOL Plc, which represents management’s best estimate of the possible outcomes and risks associated with the transition to a low carbon world. MOL acknowledges that the energy transition will occur, however the estimates of the impact of climate change and energy transformation on the MOL’s operations are subject to very high uncertainty and may change significantly in subsequent periods depending on the pace of the transition. MOL expects climate-related matters to have an impact on the long-term accounting estimates and incorporated these factors to the financial statements. Estimation inputs like: Brent oil prices, TTF gas prices CO2 quota price assumptions and discount rates take into consideration the effects of the climate related matters and are in line with external information and represent the effect of climate related expectations on the financial statement. In MOL’s view CO2 costs and price assumptions represent best the effects of climate change on the financial statements, as quotas are traded on an active market. Therefore, it is included as a risk element in the sensitivity analysis performed on the Clean CCS profit from operation, please refer to Note 17/b.

Significant accounting estimates that could be affected by the climate change and energy transition are:

Recoverability of assets: Impairment models are generally based on a going concern assumption, usually based on 3 years time series of business plan figures approved by the Board of Directors, further years are estimated assuming a growth rate according to relevant inflation rate. Any further initiative is subject to very high level of uncertainty, and may change significantly in subsequent periods depending on several factors. For more information on the impairment of assets please refer to Note 8.

Useful lives of tangible and intangible assets: The useful life of PPE is reviewed at least once a year prior to the annual planning process and if the expectations differ significantly from the prior estimations then the amount of depreciation relating to the current and the future periods must be adjusted. The useful life of assets are determined based on the currently valid regulations and obligations. For more information please refer to Note 8.

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Provision for future decommissioning liabilities: The value of liabilities required for calculation of the current value of provision is determined on the basis of estimated costs of works required for settlement of field suspension and field abandonment liabilities planned in full technical scope for each field The economy calculations and the plans for future exploitation and utilization of fields incorporate information about the time when site restoration can be expectedly started and ended in the field. The estimation is in line with currently valid regulation and obligations. For more information on the decommissioning provisions and provisions related to climate change please refer to Note 13.

Amendments in accounting policies

Voluntary amendments

MOL Plc. calculate the expected credit loss on trade receivables as the average of yearly historical loss rates of last three years multiplied by the forward-looking element. The forward-looking element is based on robust positive correlation between banking sector credit losses and one year lag of unemployment rate instead of the previously applied robust negative correlation between banking sector credit losses and two years’ lags of real GDP growth.

MOL Plc. applies IAS 12 to income taxes arising from tax law enacted or substantively enacted to implement the Pillar Two model rules published by the Organisation for Economic Co-operation and Development (OECD), including tax law that implements qualified domestic minimum top-up taxes. In accordance with paragraph 4A of IAS 12 the company applies the temporary exception and neither recognise nor disclose information about deferred tax assets and liabilities related to Pillar Two income taxes.

Significant impact on operation

e) Russia – Ukraine conflict

The economic consequences of Russia’s invasion of Ukraine that commenced on 24 February 2022 may affect MOL Plc. Management is continuously investigating and assessing the possible effects of the current geopolitical situation, international sanctions and other possible limitations on the supply chain and business activities. MOL Plc has made decisions in its credit policy to minimise the exposure.

MOL Plc. is exposed to Russia as an indirect minority owner of BaiTex Llc. which is a joint venture. Baitex Llc. is indirectly owned by MH Oil and Gas B.V., which is a MOL Plc. investment, which is fully impaired as at 31 December 2023 (investment value as at 31 December 2022 was fully impaired). MOL Plc exposure to Ukraine is not material.

MOL Plc’s refining business is exposed to the physical flow of crude oil through the transportation system in Russia and Ukraine. The physical flow of the crude oil from Russia has been periodically disrupted due to war damage on Ukrainian energy infrastructure. An alternative supply route from the Mediterranean Sea, via Croatia, exists however that can supply MOL Plc refineries with seaborne cargoes of crude oil. The European Union has imposed a partial embargo on Russian crude oil imports as of 5 December 2022 and on Russian petroleum product imports as of 5 February 2023. At the same time, a ban on the export of petroleum products obtained from Russian crude oil has been put in place. The regulations however allow for the continued import of Russian crude oil by pipeline, as well as the continued export of petroleum products obtained from Russian crude from Hungary indefinitely as long as the percentage of exports do not exceed the percentage of crude of non-Russian origin if blended with Russian crude as refinery feedstock.

f) Waste management concession

MOL was announced as a winner for the Hungarian state concession tender covering municipal waste management services. The concession agreement covers a period of 35 years with a commencement date of July 1, 2023. According to the agreement, MOL will be responsible for the collection of close to 5 million tonnes of municipal solid waste, will ensure its treatment and will make related investments.

g) Carbon dioxide quota tax

New carbon dioxide quota tax has been introduced for operators of an installation receiving a significant free allocation of CO2 emission rights for the tax year starting after 31 December 2022. The tax is based on the amount of carbon dioxide emissions in tons. The tax rate is 40 EUR/tCO2, equivalent in Hungarian forints. Qualifies as an operator of an installation receiving a significant free allocation if the following conditions are met:

- if the installation received free allocation rights equal to at least 50% of its average total verified carbon dioxide emissions in the four years preceding the current year and;

- whose annual average carbon dioxide emissions during this period exceeded 10 000 tons

The Government Decree has been amended and the following conditions must be met after 7 October 2023:

- does the operators of an installation have a reference value installation or a process emissions installation? If yes, the combined emission level of these installations (based on data for the three years preceding the reference year) exceed 25,000 tons;

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- did the operators of an installation received a free carbon quota? If yes, it is necessary to review whether the amount of carbon quota received free of charge in the year preceding the year in question was equal or greater than 50% of the average carbon dioxide emissions in the three preceding years

The amending regulation reduces the tax rate from €40/tCO2 to €36/tCO2.

h) Windfall Taxes

As a result of the Russian-Ukrainian conflict and the emerging energy crisis, the governments introduced significant measures, which also affect the MOL Plc.

· Mining royalty

The Hungarian oil and gas royalty rates were changed significantly in 2022; the fixed parts of the rates were tripled in those categories in which the majority of MOL's production takes place. Final effective rates include unchanged adjusting elements dependent from the spot Brent and TTF prices. The unit values that are determined by Government Decree to be used for calculating the royalty base include minimum thresholds for 2023 and 2024. Production to be taken into account for the tax base in the period concerned cannot be lower than the 2021 level. In the event of a technical impediment or major event impacting production, approval is to be requested from the Mining Authority for the lower production. If the lower production is unjustified, the Mining Authority will still impose the additional mining royalty

The extra profit tax rules provided for the possibility of contracting in order to reduce the mining royalty. Accordingly, MOL Plc. has made commitments exceeding the production volume. This resulted in a significant reduction in mining royalty from September 2023. If the commitment in any category is not met, the total volume committed in that category will be paid as a penalty under the previous, less favourable rules.

§ Extra profit tax on Ural-Brent spread

From 1 January 2022, the Hungarian government has introduced a Brent-Ural spread-based tax, which tax rate is 25% of the Brent-Ural spread on Ural type crude oil procurement. According to the amendment to the extra profit tax regulation issued by the Hungarian Government on 30 July 2022 effective from 1 August 2022 the Brent-Ural spread based extra profit tax rate on Ural type crude oil procurement was modified to 40%. According to the amendment to the extra profit tax regulation issued by the Hungarian Government on 18 December 2022 the Brent-Ural spread based extra profit tax rate on Ural type crude oil procurement has been modified to 95%. Prospectively from 1 April 2023, the tax based on the Brent-Ural spread would be 95% of the spread minus 7.5 USD. As a result, the tax base significantly reduced in the rest of 2023. At the same time, a net revenue based tax was introduced based on the 2022 net sales revenues with a tax rate of 2.8% and from 2024 the tax rate will be reduced to 1%.

§ Retail tax

The Hungarian Government modified the retail tax effective from 1 July 2022 due to which 80% of the 2021 tax had to be paid as a one-off additional tax in 2022. Retail tax rate 3% on net sales of fuel above HUF 500 million, includes retail vehicle and motorcycle fuel, refrigerants and lubricants , but excludes the domestic heating fuel and bottled gas. For 2023, tax rate per revenue ranges increase: in the range of HUF 500 million – HUF 30,000 million the rate will increase from 0.1% to 0.15%, in the range of HUF 30,000 million – HUF 100,000 million the rate will increase from 0.4% to 1%, above HUF 100,000 million the rate will increase from 2.7% to 4.1%. From 2024, the tax rate for the highest revenue rate will be increased to 4.5% but decreased to 3% on fuel.

· Industrial safety related contribution

Certain operators of plants dealing with hazardous materials are obliged to pay industrial safety contribution. The amount of the contribution is 0,042% of prior year’s net revenue.

In the statement of profit or loss the mining royalty, the extra profit tax and retail tax are recorded in other operating expenses. The windfall taxes were considered when assessing the assets recoverability.

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Results for the year

This section explains the results and performance of MOL Plc. for the financial years ended 31 December 2023 and 31 December 2022. Disclosures are following the structure of statement of profit or loss and provide information on segmental data, total operating income, total operating expense, finance result. For taxation and share-based payments, disclosures related to the statement of financial position are also provided in this section.

2. Segmental information

Accounting policies

For management purposes MOL Plc. is organised into four major operating business units: Upstream, Downstream, Consumer Services and Corporate and other segments. The business units are the basis upon which MOL Plc. reports its segment information to the management which is responsible for allocating business resources and assessing performance of the operating segments.

The major segments identified by MOL Plc. are the following:

Upstream segment consists of oil and gas exploration and production assets and the related activities.

Downstream segment consists of different business activities that are part of an integrated value chain. This value chain turns crude oil into a range of refined products, which are moved and marketed for household, industrial and transport use. The products include, among others, gasoline, diesel, heating oil, aviation fuel, lubricants, bitumen, sulphur and liquefied petroleum gas (LPG).

Consumer Services segment is a leading fuel retail operation in the CEE region, with a 10 million retail customer base and one million daily transactions.

Corporate and other segment includes all other business units of MOL Plc.

2023 | Upstream | Downstream | Consumer Services | Corporate and other | Inter-segment transfers | Total
HUF million | HUF million | HUF million | HUF million | HUF million | HUF million
Net Revenue |  |  |  |  |  |
External sales | 13,983 | 2,341,144 | 948,443 | 32,365 | - | 3,335,935
Inter-segment transfers | 289,017 | 770,305 | 996 | 25,960 | (1,086,278) | -
Total revenue | 303,000 | 3,111,449 | 949,439 | 58,325 | (1,086,278) | 3,335,935
Profit / (loss) from operation | 24,393 | 103,424 | 58,465 | (88,910) | 15,377 | 112,749
Depreciation, depletion, amortisation and impairment | 22,150 | 46,260 | 5,463 | 16,908 | - | 90,781
From this: impairment losses recognised in statement of profit or loss (incl. dry-holes) | 3,748 | 1,939 | - | 399 | - | 6,086
From this: reversal of impairment recognised in statement of profit or loss | 1,816 | - | - | - | - | 1,816
EBITDA | 46,543 | 149,684 | 63,928 | (72,002) | 15,377 | 203,530

In 2023 total 3rd party net revenue was 1,535,615 mHUF in Downstream segment.

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2022 | Upstream | Downstream | Consumer Services | Corporate and other | Inter-segment transfers | Total
HUF million | HUF million | HUF million | HUF million | HUF million | HUF million
Net Revenue |  |  |  |  |  |
External sales | 28,048 | 2,729,858 | 1,072,369 | 28,183 | - | 3,858,458
Inter-segment transfers | 573,336 | 973,416 | 1,127 | 20,455 | (1,568,334) | -
Total revenue | 601,384 | 3,703,274 | 1,073,496 | 48,638 | (1,568,334) | 3,858,458
Profit / (loss) from operation | 261,428 | 172,326 | (4,911) | (76,345) | - | 352,499
Depreciation, depletion, amortisation and impairment | 52,765 | 46,670 | 4,695 | 15,943 | - | 120,073
From this: impairment losses recognised in statement of profit or loss (incl. dry-holes) | 19,743 | 5,288 | 111 | 238 | - | 25,380
From this: reversal of impairment recognised in statement of profit or loss | 2,146 | - | - | - | - | 2,146
EBITDA | 314,193 | 218,996 | (216) | (60,402) | - | 472,572

31/12/2023 | Upstream | Downstream | Consumer Services | Corporate and other | Inter-segment transfers | Total
HUF million | HUF million | HUF million | HUF million | HUF million | HUF million
Other segment information |  |  |  |  |  |
Capital expenditure: | 33,007 | 57,188 | 9,851 | 29,413 | - | 129,459
Property, plant and equipment | 27,877 | 42,216 | 5,037 | 14,584 | - | 89,714
Intangible assets | 5,130 | 14,972 | 4,814 | 14,829 | - | 39,745
Provisions made and used during the year and revision of previous estimates | (7,117) | 5,543 | 169 | 2,655 | - | 1,250
NON-CURRENT ASSETS |  |  |  |  |  |
Property, plant and equipment | 135,674 | 266,042 | 23,291 | 3,358 | - | 428,365
Intangible assets | 8,957 | 5,038 | 15,912 | 44,999 | - | 74,906
Investments in associates and joint ventures | 637,355 | 713,593 | 359,963 | 1,359,855 | - | 3,070,766

12/31/2022 | Upstream | Downstream | Consumer Services | Corporate and other | Inter-segment transfers | Total
HUF million | HUF million | HUF million | HUF million | HUF million | HUF million
Other segment information |  |  |  |  |  |
Capital expenditure: | 21,024 | 42,700 | 9,905 | 33,741 | - | 107,370
Property, plant and equipment | 19,843 | 39,409 | 5,245 | 9,364 | - | 73,861
Intangible assets | 1,181 | 3,291 | 4,660 | 24,378 | - | 33,510
Provisions made and used during the year and revision of previous estimates | 152 | 5,259 | (317) | 705 | - | 5,799
NON-CURRENT ASSETS |  |  |  |  |  |
Property, plant and equipment | 103,956 | 255,807 | 22,569 | (2,685) | - | 379,647
Intangible assets | 3,322 | 9,171 | 12,114 | 41,312 | - | 65,919
Investments in associates and joint ventures | 634,908 | 693,241 | 373,981 | 1,314,399 | - | 3,016,529

The operating profit of the segments includes the profit arising both from external sales and transfers to the other business segments. Corporate and other segment provides maintenance, financing and other services to the business segments. The internal transfer prices applied are based on prevailing market prices.

The differences between the capital expenditures presented above and the additions in the intangible and tangible movement schedule are due to the additions of emission rights, and non-cash items such as capitalisation of field abandonment provisions, and assets received free of charge.

|  | MOL Plc. Separate Financial Statements 2023 | 15

3. Total operating income

Accounting policies

Net sales

IFRS 15 established a five-step model to account for revenue arising from contracts with customers and requires that revenue to be recognised at an amount that reflects the consideration to which an entity expects to be entitled in exchange for transferring goods or services to a customer. Revenue is recognised when it is probable that the economic benefits associated with a transaction will flow to the enterprise and the amount of the revenue can be measured reliably. Sales are recognised when control of the goods or services are transferred to the customer.

The entity has generally concluded that:

• it satisfies performance obligations at a point in time, because control is transferred to the customer on delivery of the goods. Under IFRS, the transfer of risk according to Incoterms rules applied by the MOL Plc. is not a sufficient criterion for recognizing revenue, because IFRS 15 Revenue from Contracts with Customers is based on the control concept. For performance obligations to be satisfied at a particular point in time, the MOL Plc. has to determine at which point in time the customer obtains control of the promised goods. The transfer of significant risk and rewards of ownership of an asset – which equals the transfer of risk as defined in the Incoterms rules – is only one indicator to consider in determining when control has been transferred. The MOL Plc may apply different Incoterms rules to different transactions (nearly all known Incoterms rules are used by the MOL Plc), thus the transfer of control shall be assessed individually in each case.

• it is the principal in its revenue arrangements, because it typically controls the goods or services before transferring them to customers (except to those cases, which are explicitly stated in the Separate Financial Statements);

• significant financing component does not exist, because the period between the transfer of the promised good or service to the customer and when the customer pays for that good or service is expected to be one year or less at contract inception.

Lease income

Lease income from operating lease is recognised on a straight-line basis over the lease term.

Sales taxes

Revenues, expenses and assets are recognised net of the amount of sales tax (e.g. excise duty), except:

• when the sales tax incurred on a purchase of assets or services is not recoverable from the taxation authority (e.g. if the entity is not subject of sales tax), in which case, the sales tax is recognised as part of the cost of acquisition of the asset or as part of the expense item, as applicable

• receivables and payables that are stated with the amount of sales tax included

The net amount of sales tax recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the statement of financial position.

Other operating income

Other operating income is recognised on the same accounting policy basis as the net sales.

b) Sales by product lines

| 2023 | 2022
| HUF million | HUF million
Sales of crude oil and oil products | 2,968,467 | 3,329,743
Sales of natural gas and gas products | 198,452 | 334,170
Sales revenue of services | 96,283 | 103,796
Sales of other products | 72,733 | 90,749
Total | 3,335,935 | 3,858,458

Revenue is decreased compered to 2022 which is arising from the decrease in volume sold to customers in retail segment.

|  | MOL Plc. Separate Financial Statements 2023 | 16

c) Sales by geographical area

| 2023 | 2022
| HUF million | HUF million
Hungary | 2,305,215 | 2,767,226
Slovakia | 317,468 | 212,494
Romania | 235,893 | 242,978
Slovenia | 97,854 | 118,225
Serbia | 79,081 | 71,604
Austria | 67,357 | 92,717
Croatia | 48,330 | 63,888
Poland | 34,048 | 30,207
Germany | 33,576 | 53,546
Switzerland | 22,826 | 30,314
Italy | 16,282 | 23,323
The Netherlands | 12,915 | 21,663
Great Britain | 865 | 27,155
Spain | 426 | 29,610
Guernsey | - | 21,628
Rest of Europe | 49,185 | 47,453
Rest of the World | 14,614 | 4,427
Total | 3,335,935 | 3,858,458

MOL Plc. has one single major customer the revenue from which is around 10% of the total net sales revenues (MOL Petrochemicals Plc with HUF 306,960 million in 2023 and HUF 373,415 million in 2022).

Based on the IFRS 15 Revenue from Contracts with Customers standard agent-principal consideration, excise duties and similar levies or fees are recognised with net presentation in the financial statements as MOL Plc and its companies act as an „agent” and collects the excise duties from third parties to the state. Total amount of the excise duty collected from customers was HUF 534,786 million in 2023 and HUF 505,345 million in 2022.

d) Other operating income

| 2023 | 2022
| HUF million | HUF million
Gain of non-hedge commodity price transactions | 5,167 | -
Penalties, late payment interest, compensation received | 2,955 | 755
Gain on sales of intangibles, property, plant and equipment | 1,272 | 3,048
Reimbursement of costs from exploration | 605 | 515
Income due to the termination of a lease (IFRS 16) | 552 | 486
Allowances and subsidies received | 328 | 418
Reimbursement of legal costs | - | 2,276
Other | 987 | 907
Total | 11,866 | 8,405

The Penalties, late payment interest, compensation received includes one significant item related to non-fulfilment of benzene deliveries, the received penalty is HUF 1,885 million in 2023.

|  | MOL Plc. Separate Financial Statements 2023 | 17

4. Total operating expenses

Accounting policies

Total operating expense

If specific standards do not regulate, operating expenses are recognised at point in time or through the period basis. When a given transaction is under the scope of a specific IFRS transaction it is accounted for in line with those regulations.

Mol Plc. has classified payments for leases of low value assets, short-term lease payments and variable lease payments not included in the measurement of lease liability within operating activities.

| 2023 | 2022
| HUF million | HUF million
Raw material and consumables used | 2,605,710 | 3,009,135
Material expenses | 1,728,177 | 1,949,115
Cost of goods purchased for resale | 710,188 | 910,834
Value of material-type services used | 147,225 | 127,765
Value of intermediated services | 20,120 | 21,421
Employee benefits expense | 96,312 | 89,656
Wages and salaries | 63,691 | 55,161
Social security | 9,528 | 8,208
Other employee benefits expenses | 23,093 | 26,287
Depreciation, depletion, amortisation and impairment | 90,781 | 120,073
Other operating expenses | 412,001 | 403,591
Taxes and contributions | 156,945 | 26,312
Mining royalties | 138,698 | 180,370
Other services | 29,506 | 22,573
Rental costs | 28,000 | 15,250
Net loss of Emission quotas | 18,979 | 13,403
Donation | 17,083 | 14,027
Consultancy fees | 7,754 | 11,501
Advertising expenses | 5,410 | 8,308
Bookkeeping services | 4,459 | 3,791
Insurance fees | 4,455 | 3,523
Environmental provision made during the year | 3,098 | 1,928
Contribution to strategic inventory storage | 2,579 | 1,158
Penalties, late payment interest, compensation (net of provision utilized) | 1,871 | 4,307
Net loss on commodity price transactions | - | 94,509
Net provision for legal and other claims | (250) | (150)
Net provision for field abandonment | (16,904) | (4,346)
Other | 10,318 | 7,127
Change in inventory of finished goods & work in progress | 46,393 | (96,091)
Work performed by the enterprise and capitalised | (16,145) | (12,000)
Total operating expenses | 3,235,052 | 3,514,364

Rental costs within other operating expenses relate to short-term leases, leases of low-value assets and variable lease payments.

The extra profit tax rules provided for the possibility of contracting in order to reduce the extra mining royalty. Accordingly, MOL Plc. has made commitments exceeding the production volume. This resulted a significant reduction in mining royalty from September 2023. If the commitment in any category is not met, the total volume committed in that category will be paid as a penalty under the previous, less favourable rules. MOL Plc considers the mining royalty in the cost of inventory.

Based on the IFRS 15 Revenue from Contracts with Customers standard agent-principal consideration, excise duties and similar levies or fees are recognised with net presentation in the financial statements as MOL Plc and its companies act as an „agent” and collects the excise duties from third parties to the state.

Other item line contains several different types of expenses, which are individually not significant.

Raw materials and consumables used

Raw materials mainly consist of crude oil and other products, maintenance materials and other chemical and non-chemical materials that are inevitable for production.

|  | MOL Plc. Separate Financial Statements 2023 | 18

Employee benefit expenses

Other employee benefits expenses contain fringe benefits, reimbursement of expenses and severance payments.

Share-based payments

Certain employees (including directors and managers) of MOL Plc. receive remuneration in the form of share-based payment transactions, whereby employees render services in exchange for shares or rights over shares.

MOL Plc.’s Employee Share Ownership Programme Organisation works in alignment with the provisions of the so-called employee Share Ownership Programme (’MRP’) legislation.

Equity-settled transactions

The cost of equity-settled transactions is measured at their fair value at grant date. The fair value is determined by applying generally accepted option pricing models (usually binomial model). In valuing equity-settled transactions, only market conditions are taken into consideration.

The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the period in which the performance conditions are fulfilled, ending on the date on which the relevant employees become fully entitled to the award (‘vesting date’). The cumulative expense recognised for equity settled transactions at each reporting date until the vesting date reflects the extent to which the vesting period has expired and the number of awards that, in the opinion of the directors of the MOL Plc. at that date, based on the best available estimate of the number of equity instruments that will ultimately vest.

Cash-settled transactions

The cost of cash-settled transactions is measured initially at fair value at the grant date using the binomial model. This fair value is expensed over the vesting period with recognition of a corresponding liability. The liability is re-measured at each balance sheet date up to and including the settlement date to fair value with changes therein recognised in the statement of profit or loss.

| 2023 | 2022
| HUF million | HUF million
Short-term Share Ownership Plan | 1,040 | 337
Share based retirement benefit | 26 | 58
Total cash-settled share-based payment expense | 1,066 | 395
Absolute Share Value Based Remuneration | (277) | (128)
Relative Market Index Based Remuneration | (162) | 1,001
Restricted Share Plan | 2,700 | 2,288
Short-term Share Ownership Plan | 806 | 945
Share Incentive scheme for the members of the Board of Directors | 615 | 452
Total equity-settled share-based payment expense | 3,682 | 4,558
Total expense of share-based payment transactions | 4,748 | 4,953

The share-based payments serve as the management’s long-term incentives as an important part of their total remuneration package. They ensure the interest of the top and senior management of MOL Plc. in the long-term increase of MOL share price and so they serve the strategic interest of the shareholders.

Equity-settled share based payment:

| 2023 | 2022
| Number of shares in conversion option units | Weighted average exercise price | Number of shares in conversion option units | Weighted average exercise price
| number of shares | HUF/share | Number of shares | HUF/share
Outstanding at the beginning of the year | 1,677,704 | 2,918 | 5,063,857 | 2,981
Granted during the year | - | - | - | -
Forfeited during the year | (313,080) | 2,918 | (158,256) | 2,973
Exercised during the year | (1,364,624) | 2,918 | (914,214) | 2,918
Expired during the year | - | - | (2,313,683) | 3,052
Outstanding at the end of the year | - | - | 1,677,704 | 2,981
Exercisable at the end of the year | - | - | 1,677,704 | 2,918

Absolute Share Value Based Remuneration Incentive for management

The Absolute Share Value Based Remuneration Plan is a call option to sell hypothetical MOL shares granted on a past strike price, at a spot price and so realise profit from the difference between these prices. The incentive has the following characteristics:

|  | MOL Plc. Separate Financial Statements 2023 | 19

• Covers a four-year period starting annually, where periods are split into a two-year vesting period (it is not possible to exercise Share Options) and a two-year redeeming period. If unexercised, the Share Option lapses after 31 December of the redeeming period.

• The grants are defined centrally in line with MOL job category.

• The allocation is linked to individual performance.

• Payout is in the form of providing MOL shares.

Payment is upon exercising of option by management. The value of the incentive is the difference between the strike price and a selected spot price for each unit of the entitlement.

In case the Annual General Meeting of MOL Plc. decides on dividend payment after the grant date, the managers, who are entitled to long-term incentives are eligible for a compensation in share equivalent when redeeming the share entitlement. Payment to one manager is the value equal to the dividend payment per share multiplied by the share unit numbers the manager is entitled to. This is paid at redemption.

The programme has no longer started from 2021 and all options were exercised in 2023.

Relative Market Index Based Remuneration Incentive for management

The Relative Market Index Based Remuneration Plan is a three-year programme using the Comparative Share Price methodology with following characteristics:

• Programme starts each year on a rolling scheme with a three-year vesting period. Payments are due after the third year.

• Target is the development of MOL’s share price compared to relevant and acknowledged regional and industry specific indicators (the CETOP and MSCI Emerging Markets Energy Index).

• Basis of the evaluation is the average difference in MOL’s year-on-year (12 months) share price performance in comparison to the benchmark indices for three years.

• Payout rates are defined based on the over/underperformance of MOL share price.

• The rate of incentive is influenced by the individual short-term performance.

• Payout is in the form of providing MOL shares.

The programme has no longer started from 2021 and the last running programme ended in 2023.

Restricted Share Plan for management

From 1 January 2021, MOL Plc established a new share-based payment remuneration plan to supersede Absolute Share Value Based Remuneration and Relative Market Index Based Remuneration programmes: Restricted Share Plan.

The Restricted Share Plan is a three-year incentive programme based on determined corporate and individual performance targets with following characteristics:

• Programme starts each year on a rolling scheme with a three-year vesting period. Payments are due after the third year.

• Target on corporate performance is based on the achievement of a business plan for Clean CCS EBITDA.

• Payout rates are defined based on fulfilment of the corporate performance target and individual payout rate which is based on an individual performance.

• Payout is in the form of providing MOL shares.

• The fair value of the benefit has been determined with reference to the average quoted price of MOL shares at the date of grant of HUF 2,611 per share in 2023 (HUF 2,549 per share in 2022), which is the first trading day of the first year of the programme.

Short-term Share Ownership Incentive for management

Short-term Share Ownership Plan is a one-year programme with the following characteristics:

• Programme starts each year on a rolling scheme with a one-year vesting period. Payments are due in the following year.

• The grants are defined based on participant’s base salary, internal grade and related bonus rate.

• The rate of incentive is influenced by the individual short-term performance during vesting period.

• Payout is in the form of providing MOL shares or in cash payment. The form of settlement depends on specific circumstances outside the control of the company and the counterparty. The treatment as an equity-settled plan is based on the probability of a contingent event.

|  | MOL Plc. Separate Financial Statements 2023 | 20

Share Incentive scheme for the members of the Board of Directors

The members of the Board of Directors become entitled to defined annual amount of MOL shares based on the number of days spent in the position. 1,600 shares per month are granted to each director, the Chairman of the Board is entitled to an additional number of 400 shares per month. If not a non-executive director is in charge as the Chairman of the Board, then this additional number of shares should be granted to the non-executive Deputy Chairman. The incentive system ensures the interest of the Board of Directors in the long-term increase of the MOL share price as 2/3 of the shares vested in the year are under transferring restriction for one year.

According to IFRS 2 – Share-based payment, the incentive qualifies as an equity-settled share-based scheme, therefore the fair value of the benefit should be expensed during the one year investing period with a corresponding increase in the equity. The fair value of the benefit has been determined with reference to the average quoted price of MOL shares at the date of grant, which is the first trading day of the year.

| 2023 | 2022
Number of shares vested | 216,000 | 163,200
Share price at the date of grant (HUF / share) | 2,611 | 2,549

Share-based retirement benefit

MOL Plc. operates long-term benefit schemes that provide lump sum benefits to all employees at the time of their retirement. As part of the benefit program employees are entitled to the amount of 10 MOL Plc. shares after every year of services. The amount of the liability has been determined using the projected unit credit method, based on financial and actuarial variables and assumptions that reflect relevant official statistical data which are in line with those incorporated in the business plan of MOL Plc. The applied MOL Plc. share price is HUF 2,826 as of 31 December 2023 (2,602 as of 31 December 2022), which is the listed average share price.

5. Finance result

Accounting policies

Foreign exchange gains and losses are aggregated separately on monthly basis for transactions similar in nature. Foreign exchange gains or losses of each transaction groups are aggregated and presented in the statement of profit or loss within finance income and expense.

Non-foreign exchange type items are not aggregated in such manner, and presented separately based on the total income/expense for the year.

| 2023 | 2022
Finance result | HUF million | HUF million
Dividend income | 376,119 | 333,214
Impairment reversal of investments in subsidiaries | - | 77,113
Foreign exchange gains | 44,820 | 16,858
Interest income | 41,316 | 21,348
Provision reversal for intercompany obligation | - | -
Other finance income | 820 | 4,458
Total finance income | 463,075 | 452,991
Interest expense | 157,937 | 92,959
Foreign exchange losses | 28,519 | 71,516
Impairment of investments in subsidiaries | 24,507 | 39,594
Unwinding of discount on provisions | 11,831 | 6,207
Other finance expense | 4,556 | 1,737
Total finance expense | 227,350 | 212,013
Net finance income/(expense) | 235,725 | 240,978

Interest expense on lease liabilities accounted for 2023 is HUF 1,789 million (2022: HUF 785 million). Finance income on the net investment in the lease accounted for in 2023 is HUF 209 million (2022: HUF 82 million).

|  | MOL Plc. Separate Financial Statements 2023 | 21

6. Income taxes

Accounting policies

Income tax is recognised in the statement of profit or loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity, in which case the related tax is recognised in other comprehensive income or directly in equity.

The current income tax is based on taxable profit for the year. Taxable profit differs from accounting profit because of temporary differences between accounting and tax treatments and due to items that are never taxable or deductible or are taxable or deductible in other years. Full provision for deferred tax is made on the temporary differences between the carrying value of assets and liabilities for financial reporting purposes and their value for tax purposes using the balance sheet liability method. Deferred tax is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting year and are expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.

Deferred tax assets are recognised where it is more likely than not that the assets will be realised in the future. At each balance sheet date, the Company re-assesses unrecognised deferred tax assets and the carrying amount of deferred tax assets.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities which relate to income taxes imposed by the same taxation authority and MOL Plc. intends to settle its current tax assets and liabilities on a net basis.

Significant accounting estimates and judgements

Corporate tax is required to be estimated in each tax jurisdiction in which MOL Plc. operates. The recognition of tax benefits requires management judgement. The actual tax liability may differ from the provision and adjustment in subsequent period could have a material effect on MOL Plc.’s profit for the year.

MOL Plc makes judgements in assessing the likelihood of potentially material exposures and develops estimates to determine provisions where required and considers whether contingent liability disclosures should be made.

The evaluation of deferred tax assets recoverability requires judgements regarding the likely timing and the availability of future taxable income. Deferred tax asset recoverability and any related judgement are based on the MOL Plc’s business plans.

a) Analysis of taxation charge for the year

Total applicable income taxes reported in the separate financial statements for 31 December 2023 and 31 December 2022 include the following components:

| 2023 | 2022
| HUF million | HUF million
Local trade tax and innovation fee | 21,248 | 22,880
Deferred taxes | (16,620) | 31,206
Current corporate tax and industry income taxes | (160) | 31,306
Other taxes | 232 | 181
Total income tax (benefit)/expense | 4,700 | 85,573

b) Current income taxes

The applicable corporate income tax rate on the taxable income was 9% in 2023 and in 2022.

Industry taxes include tax on energy supply activities in Hungary with an effective tax rate of 27% (2022: 18%) on tax base calculated using local regulations.

Local trade tax represents an income-based tax for Hungarian entities, payable to local municipalities. Tax base is calculated by deducting material costs, cost of goods sold, remediated services and subcontracts services from sales revenue. Tax rates vary between 0-2% depending on the regulation of local governments where the entities carry on business activities.

Extra profit taxes introduced in Hungary are out of the scope of IAS 12 Income taxes standard. Extra profit tax refers to the Solidarity contribution based on EU regulation or enacted equivalent national measures. See details in Note 1.

c) Deferred tax assets and liabilities

The deferred tax balances as of 31 December 2023 and 31 December 2022 in the statement of financial position consist of the following items by categories:

|  | MOL Plc. Separate Financial Statements 2023 | 22

| 12/31/2023 | 12/31/2022
| HUF million | HUF million
Statutory losses carried forward | 17,442 | 8,187
Provisions | 68,558 | 54,937
Property, plant and equipment and intangible assets | (12,996) | (4,602)
Development reserve | (6,924) | (9,000)
Other temporary differences 1 | (159) | 1,230
Net deferred tax asset | 65,921 | 50,752
of which: |  |
Total deferred tax assets | 86,216 | 64,354
Total deferred tax liabilities | (20,295) | (13,602)
1 Deferred tax on other temporary differences includes receivables write-off and gains or losses on FVTOCI debt instruments. |  |

MOL Plc. has a deferred tax asset related to the negative tax base cumulated until 2014, which can be utilised without a time limit against taxable incomes according to the corporate income tax law.

Deferred tax income is driven by the industry income tax law modification in 2021 in Hungary, which introduced the future usability of losses carried forward in the industry income tax. For the first time, the 2020 tax loss can be carried forward and used as a tax base reduction for the next 5 years, up to a maximum of 50% of tax base. The full amount of losses carried forward accrued in the industry income tax was used in 2022. In 2023 losses carried forward again in amount 35.3 billion in the industry income tax.

Changes in deferred tax assets and liabilities are recorded against profit or loss in the amount of HUF 16,620 million and against other comprehensive income in the amount of HUF -1,451 million.

Change in tax rates

The following change in industry tax rates effective from 1 January 2023 to 31 December 2024 is taken into account in deferred tax calculation only for those temporary differences that are expected to reverse within this time of period:

- change in Hungary to 41% (2022: 31%)

d) Reconciliation of taxation rate

A numerical reconciliation between tax expense and the product of accounting profit multiplied by the applicable tax rates is as follows:

| 2023 | 2022
| HUF million | HUF million
Profit/(loss) before tax | 348,474 | 593,477
Tax expense at the applicable tax rate (2023: 9%, 2022: 9%) | 31,363 | 53,413
Effect of group corporate taxation | 0 | (2,457)
Other tax expenses | 18,397 | 46,869
of which: |  |
local trade tax | 18,443 | 19,863
innovation fee | 2,805 | 3,017
industry income tax | (124) | 25,706
Deferred tax impact of industry tax | (16,321) | 17,399
Recognition of current year tax losses carried forward | 3,025 | -
Non-deductible expenses | 1,540 | 769
Effect of tax audit | 605 | (32)
Tax allowance available | (58) | (25)
Non-taxable income | (33,851) | (30,363)
Total income tax (benefit)/expense for the year | 4,700 | 85,573
Effective tax rate | 1% | 14%

Non taxable income mainly relates to dividends which are recognised as finance income during the 2023 financial year.

|  | MOL Plc. Separate Financial Statements 2023 | 23

e) Unrecognised deferred tax assets

No deferred tax assets have been recognised in respect of the following tax losses due to uncertainty of realisation:

| 12/31/2023 | 12/31/2022
| HUF million | HUF million
Tax losses - expiry within 5 years | 0 | 3,760
Total tax losses | 0 | 3,760

In 2023, only losses incurred before 2014 and losses incurred from 2018 can be used. However, on 31 December 2023, the 2018 loss expired and no longer to be used as a deferred tax asset.

f) Uncertain tax positions

MOL Plc is subject to periodic tax authority reviews in the normal course of business. In common with all oil and gas companies, taxation is particularly challenging because of industry specific taxes, duties and levies. MOL Plc makes judgements in assessing the likelihood of potentially material exposures and develops estimates to determine provisions where required and considers whether contingent liability disclosures should be made. The impact of a more aggressive tax stance by tax authorities to deal with the current energy crisis and changes in local tax regulations could materially impact the tax exposures. In respect of uncertain tax position, no provision was created as it is probable that tax authorities would accept all tax positions of MOL Plc as recorded in the separate financial statements as of 31 December 2023.

The tax administration conducted comprehensive tax audit at MOL Plc concerning the years of 2016-2017.

In November 2023 began a tax audit of the IFRS TAO group, of which MOL Plc is a member, concerning the year of 2019. The tax administration may inspect the books and records and may impose additional tax or penalty. The management of MOL Plc is not aware of any such circumstances that may generate material liabilities to MOL Plc under this title.

7. Components of other comprehensive income

Changes in fair value of debt instruments at fair value through other comprehensive income

Accounting policies

Debt instruments which are held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets are measured at fair value through other comprehensive income. When the asset is derecognised or reclassified, changes in fair value previously recognised in other comprehensive income and accumulated in equity are reclassified to profit and loss.

Remeasurement of post-employment benefit obligations

Accounting policies

The effects of differences between the previous actuarial assumptions and what has actually occurred and the effects of changes in actuarial assumptions in the model used for determining provision for post-employment benefit obligations, called as actuarial gains and losses, are recognised in the other comprehensive income immediately. The recognised amount is not reclassified to profit or loss in subsequent periods.

| 2023 | 2022
| HUF million | HUF million
Changes in fair value of debt instruments at fair value through other comprehensive income, net of tax |  |
Gains / (losses) arising during the year | 4,010 | (3,157)
Total | 4,010 | (3,157)
Remeasurement of post-employment benefit obligations, net of tax |  |
Gains / (losses) arising during the year | (522) | 594
Total | (522) | 594

|  | MOL Plc. Separate Financial Statements 2023 | 24

Non-financial assets and liabilities

This section describes those non-financial assets that are used, and liabilities incurred to generate MOL Plc.’s performance. This section also provides detailed disclosures on the significant exploration and evaluation related matters as well as MOL Plc.’s recent acquisitions and disposals.

8. Property, plant and equipment and intangible assets

a) Property, plant and equipment

Accounting policies

Property, plant and equipment are stated at cost less accumulated depreciation, depletion and accumulated impairment loss.

The initial cost of property, plant and equipment comprises its purchase price, including import duties and non-refundable purchase taxes and any directly attributable costs of bringing the asset to its working condition and location for its intended use, such as borrowing costs. Estimated field abandonment and site restoration costs are capitalised upon initial recognition or, if decision on field abandonment is made subsequently, at the time of the decision. Expenditures incurred after the property, plant and equipment have been put into operation are charged to statement of profit or loss in the period in which the costs are incurred, except for periodic maintenance costs which are capitalised as a separate component of the related assets.

Construction in progress represents plant and properties under construction and is stated at cost without being depreciated. Construction in progress is reviewed for impairment annually.

| Land and buildings | Machinery and equipment | Other machinery and equipment | Construction in progress | Total
| HUF million | HUF million | HUF million | HUF million | HUF million
At 1 Jan 2022 |  |  |  |  |
Gross book value | 838,790 | 661,937 | 83,053 | 45,903 | 1,629,683
Accumulated depreciation and impairment | (644,992) | (508,964) | (59,214) | (65) | (1,213,235)
Net book value | 193,798 | 152,973 | 23,839 | 45,838 | 416,448
Year ended 31 Dec 2022 |  |  |  |  |
Additions and capitalisations | 19,142 | 58,450 | 8,697 | 6,829 | 93,118
Depreciation for the year | (39,752) | (38,630) | (6,829) | - | (85,211)
Impairment | (18,833) | (649) | (8) | (5,231) | (24,721)
Reversal of impairment | 2,146 | - | - | - | 2,146
Disposals | (3,229) | (3) | (372) | (140) | (3,744)
Transfers and other movements | (6,969) | (5,017) | (387) | (3,431) | (15,804)
Closing net book value | 146,303 | 167,124 | 24,940 | 43,865 | 382,232
At 31 Dec 2022 |  |  |  |  |
Gross book value | 843,583 | 707,752 | 86,583 | 43,930 | 1,681,848
Accumulated depreciation and impairment | (697,279) | (540,627) | (61,644) | (65) | (1,299,615)
Net book value | 146,304 | 167,125 | 24,939 | 43,865 | 382,232
From this net value of assets held for sale | (1,410) | (627) | (549) | - | (2,586)
|  |  |  |  | 379,647
Net book value - at 1 Jan 2023 | 146,304 | 167,125 | 24,939 | 43,865 | 382,232
Additions and capitalisations | 28,512 | 43,672 | 13,372 | 24,198 | 109,754
Depreciation for the year | (25,843) | (39,538) | (7,919) | - | (73,300)
Impairment | (2,454) | (109) | (85) | (2,526) | (5,174)
Reversal of impairment | 1,552 | 261 | 3 | - | 1,816
Disposals | (1,049) | (13) | (228) | (22) | (1,312)
Transfers and other movements | 30,970 | (11,925) | (294) | (3,211) | 15,541
Closing net book value | 177,992 | 159,473 | 29,788 | 62,304 | 429,557
At 31 Dec 2023 |  |  |  |  |
Gross book value | 893,061 | 738,142 | 97,673 | 62,369 | 1,791,245
Accumulated depreciation and impairment | (715,069) | (578,669) | (67,885) | (65) | (1,361,688)
Net book value | 177,992 | 159,473 | 29,788 | 62,304 | 429,557
From this net value of assets held for sale | (1) | (632) | (559) | - | (1,192)
|  |  |  |  | 428,365

|  | MOL Plc. Separate Financial Statements 2023 | 25

Leased assets

Accounting policies

MOL Plc. recognises the right-of-use assets and lease liabilities for most leases.

MOL Plc. measures the right-of-use asset at cost, less accumulated depreciation and any accumulated impairment losses. Capitalised leased assets are depreciated over the shorter of the estimated useful life of the asset or the lease term. The lease liability is initially measured at the present value of the lease payments payable over the lease term, discounted at the rate implicit in the lease if that can be readily determined, otherwise MOL Plc. as lessee applies incremental borrowing rate. The lease liability is measured subsequently using the effective interest rate method.

MOL Plc. has elected not to recognise right-of-use assets and lease liabilities for some leases of low-value assets and short-term leases. Low-value assets mainly comprise those assets which value, when new, do not exceed USD 5,000. Short-term leases are leases with a lease term of 12 months or less. MOL Plc. recognises the lease payments associated with these leases as expense on a straight-line basis over the lease term.

MOL Plc. presents right-of-use assets from leases in ‘Property, plant and equipment’, the same line item as it presents underlying assets of the same nature that it owns.

Significant accounting estimates and judgements

MOL Plc. has applied judgement to determine the lease term for some lease contracts that include renewal or termination options. The assessment of whether the MOL Plc. is reasonably certain to exercise such options impacts the lease term, which significantly affects the amount of lease liabilities and leased assets recognised.

| Land and building and related rights | Machinery and equipment | Other machinery and equipment | Total
| HUF million | HUF million | HUF million | HUF million
At 31 Dec 2022 |  |  |  |
Net book value of leased assets | 419 | 23,929 | 3,548 | 27,896
Period ended 31 Dec 2023 |  |  |  |
Additions and capitalisations | 591 | 17,544 | 1,907 | 20,042
Depreciation for the period | (430) | (7,669) | (1,378) | (9,477)
Impairment, termination | (23) | (5,798) | (244) | (6,065)
Closing net book value | 557 | 28,006 | 3,833 | 32,396

Leased assets include land and building related leases (office, land etc), machinery leases which are connected to assets used in production (e.g. railway wagons), vehicle leases and other office equipment related leases.

MOL Plc. has presented lease liabilities within loans and borrowings, please refer to Note 17/c, for the interest paid an received on leasing agreements please refer to Note 5.

Borrowing costs

Accounting policies

Borrowing costs (including interest charges and other costs incurred in connection with the borrowing of funds, including exchange differences arising from foreign currency borrowings) directly attributable to the acquisition, construction or production of qualified assets are capitalised until these assets are substantially ready for their intended use or sale. All other costs of borrowing are expensed in the period in which they are incurred.

Property, plant and equipment include borrowing costs incurred in connection with the construction of qualifying assets. Additions to the gross book value of property, plant and equipment include borrowing costs of HUF 2,286 million in 2023 (2022: HUF 1,966 million). In 2023 the applicable capitalisation rate (including the impact of foreign exchange differences) has been 6.3 % (2022: 6.1 %).

b) Intangible assets

Accounting policies

An intangible asset is recognised initially at cost.

Following initial recognition, intangible assets, other than goodwill are stated at the amount initially recognised, less accumulated amortisation and accumulated impairment losses.

Intangible assets, excluding development costs, created within the business are not capitalised.

Development costs are capitalised if the recognition criteria according to IAS 38 are fulfilled. Costs in development stage can be not amortised. The carrying value of development costs is reviewed for impairment annually when the asset is not yet in use or more frequently when an indicator of impairment arises during the reporting year indicating that the carrying value may not be recoverable.

Free granted quotas are not recorded in the separate financial statements, while purchased quotas are initially recorded as intangible assets at cost less impairment, if any, taking into consideration the residual value. The quotas recognised are not amortised if the residual value is at least equal to carrying value.

|  | MOL Plc. Separate Financial Statements 2023 | 26

| Rights | Software and other intellectual property | Exploration and evaluation assets | Emission quotas | Goodwill | Total
| HUF million | HUF million | HUF million | HUF million | HUF million | HUF million
At 1 Jan 2022 |  |  |  |  |  |
Gross book value | 104,756 | 40,786 | 53,184 | 2,503 | 281 | 201,510
Accumulated amortisation and impairment | (81,756) | (16,793) | (51,496) | - | (93) | (150,138)
Net book value | 23,000 | 23,993 | 1,688 | 2,503 | 188 | 51,372
Year ended 31 Dec 2022 |  |  |  |  |  |
Additions | 1,616 | 12,265 | 1,106 | 18,523 | - | 33,510
Amortisation for the year | (8,851) | (2,821) | - | - | - | (11,672)
Impairment | (533) | (69) | (14) | (43) | - | (659)
Disposals | - | - | - | (10,465) | - | (10,465)
Transfers and other movements | 12,647 | (8,911) | 1,225 | (1,128) | - | 3,833
Closing net book value | 27,879 | 24,457 | 4,005 | 9,390 | 188 | 65,919
At 31 Dec 2022 |  |  |  |  |  |
Gross book value | 118,433 | 43,991 | 55,500 | 9,390 | 281 | 227,595
Accumulated amortisation and impairment | (90,554) | (19,534) | (51,495) | - | (93) | (161,676)
Net book value | 27,879 | 24,457 | 4,005 | 9,390 | 188 | 65,919
At 31 Dec 2023 |  |  |  |  |  |
Additions | 3,710 | 13,428 | 4,783 | 17,825 | - | 39,746
Amortisation for the year | (9,392) | (3,707) | (169) | - | - | (13,268)
Impairment | (28) | (210) | (617) | (57) | - | (912)
Disposals | - | - | - | (18,117) | - | (18,117)
Transfers and other movements | 5,815 | (9,546) | 5,341 | (72) | - | 1,538
Closing net book value | 27,984 | 24,422 | 13,343 | 8,969 | 188 | 74,906
At 31 Dec 2023 |  |  |  |  |  |
Gross book value | 125,490 | 47,649 | 65,007 | 8,969 | 281 | 247,396
Accumulated amortisation and impairment | (97,506) | (23,227) | (51,664) | - | (93) | (172,490)
Net book value | 27,984 | 24,422 | 13,343 | 8,969 | 188 | 74,906

Oil and natural gas exploration and development expenditures

Accounting policies

Oil and natural gas exploration and development expenditure is accounted for using the Successful Efforts method of accounting.

License and property acquisition costs

Costs of exploration and property rights are capitalised as intangible assets and amortised on a straight-line basis over the estimated period of exploration. Each property is reviewed on an annual basis to confirm that drilling activity is planned, and it is not impaired. If no future activity is planned, the remaining balance of the license and property acquisition costs is written off. Upon recognition of proved reserves (‘proved reserves’ or ‘commercial reserves’) and internal approval for development, the relevant expenditure is transferred to property, plant and equipment.

Exploration expenditure

Geological and geophysical exploration costs are charged against income statement as incurred. Costs directly associated with an exploration well are capitalised as an intangible asset until the drilling of the well is complete and the results have been evaluated. These costs include employee remuneration, materials and fuel used, rig costs, delay rentals and payments made to contractors. If hydrocarbons are not found, the exploration expenditure is written off as a dry-hole. If hydrocarbons are found and, subject to further appraisal activity, which may include the drilling of further wells (exploration or exploratory-type stratigraphic test wells), are likely to be capable of commercial development, the costs continue to be carried as an asset. All such carried costs are subject to technical, commercial and management review at least once a year to confirm the continued intent to develop or otherwise extract value from the discovery. When this is no longer the case, the costs are written off. When proved reserves of oil and natural gas are determined and development is sanctioned, the relevant expenditure is transferred to property, plant and equipment.

Development expenditure

Expenditure on the construction, installation or completion of infrastructure facilities such as platforms and the drilling of development wells, including unsuccessful development or delineation wells, is capitalised within property, plant and equipment.

Significant accounting estimates and judgements

Application of Successful Efforts method of accounting for exploration and evaluation assets

Management uses judgement when capitalised exploration and evaluation assets are reviewed to determine capability and continuing intent of further development.

|  | MOL Plc. Separate Financial Statements 2023 | 27

Exploration and evaluation assets

Transfers from exploration and evaluation assets represent expenditures which, upon determination of proved reserves of oil and natural gas are reclassified to property, plant and equipment.

Within exploration and evaluation assets, exploration expenses incurred in 2023 is HUF 1,544 million (2022: HUF 2,308 million), which were not eligible for capitalisation. Consistent with the Successful Efforts method of accounting they were charged to various operating cost captions of the separate statement of profit or loss as incurred.

Other research and development costs are less significant compared to exploration expenses. These research and development costs are HUF 369 million in 2023 (2022: HUF 438 million).

Write-off of dry-holes

| 2023 | 2022
Dry-hole | HUF million | HUF million
Hungary | - | 14

c) Depreciation, depletion and amortisation

Accounting policies

Depreciation of assets begin when the relevant asset is available for use. Depreciation of each component of an intangible asset and property, plant and equipment, except for given Upstream assets, is computed on a straight-line basis over their respective useful lives. Usual periods of useful lives for different types of property, plant and equipment are as follows:

Software: 3 – 5 years

Buildings: 10 – 50 years

Refineries and chemicals manufacturing plants: 4 –12 years

Gas and oil storage and transmission equipment: 7 – 50 years

Petrol service stations: 5 – 30 years

Telecommunication and automatization equipment: 3 – 10 years

In Upstream segment depletion and depreciation of production installations and transport systems for oil and gas is calculated for each individual field or field-dedicated transport system using the unit of production method, based on proved and developed commercially recoverable reserves. Recoverable reserves are reviewed on an annual basis prospectively. Transport systems used by several fields and other assets are calculated on the basis of the expected useful life, using the straight-line method.

Amortisation of leasehold improvements is provided using the straight-line method over the term of the respective lease or the useful life of the asset, whichever period is less.

Periodic maintenance costs are depreciated until the next similar maintenance takes place.

The useful lives of intangible assets are assessed to be either finite or indefinite. Amortisation is charged on assets with a finite useful life over the best estimate of their useful lives using the straight-line method.

The useful life and depreciation methods are reviewed at least annually.

Significant accounting estimates and judgements

The determination of MOL Plc.’s estimated oil and natural gas reserves requires significant judgements and estimates to be applied and these are yearly reviewed and updated. Numerous factors have an impact on determination of MOL Plc.’s estimates of its oil and natural gas reserves (e.g. geological and engineering data, reservoir performance, acquisition and divestment activity, drilling of new wells, and commodity prices). MOL Plc. bases its proved and developed reserves estimates on the requirement of reasonable certainty with rigorous technical and commercial assessments based on conventional industry practice and regulatory requirements. Oil and natural gas reserve data are used to calculate depreciation, depletion and amortisation charges for MOL Plc.’s oil and gas properties. The impact of changes in these estimations is handled prospectively by amortising the remaining carrying value of the asset over the expected future production. Oil and natural gas reserves also have a direct impact on the value in use calculations applied for determination of the recoverability of assets.

d) Impairment of assets

Accounting policies

Property, plant and equipment and intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Whenever the carrying amount of an asset exceeds its recoverable amount, an impairment loss is recognised in the statement of profit or loss for items of property, plant and equipment and intangibles carried at cost. The recoverable amount is the higher of an asset's fair value less costs to sell and value in use. The fair value is the amount obtainable from the sale of an asset in an arm's length transaction while value in use is the present value of estimated net future cash flows expected to arise from the continuing use of an asset and from its disposal at the end of its useful life. Recoverable amounts are estimated for individual assets or, if this is not practicable, for the cash-generating unit. Intangible assets with indefinite useful life are not depreciated, instead an impairment test is performed at each financial year-end.

|  | MOL Plc. Separate Financial Statements 2023 | 28

MOL Plc. assesses at each reporting date whether there is any indication that previously recognised impairment losses may no longer exist or may have decreased. A previously recognised impairment loss is reversed only if there has been a change in the impairment assumptions considered when the last impairment loss was recognised. The reversal is limited so that the carrying amount of the asset neither exceeds its recoverable amount, nor is higher than its carrying amount net of depreciation, had no impairment loss been recognised in prior years.

Significant accounting estimates and judgements

Impairment of non-current assets, including goodwill

The impairment calculation requires an estimate of the recoverable amount of the cash generating units. Value in use is usually determined on the basis of discounted estimated future net cash flows. In determination of cash flows the most significant variables are discount rates, terminal values, the period for which cash flow projections are made, as well as the assumptions and estimates used to determine the cash inflows and outflows, including commodity prices, operating expenses, future production profiles and the global and regional supply-demand equilibrium for crude oil, natural gas and refined products. As approved by the year-end RRC, MOL Plc. has upgraded its reserve estimates of matured oil and gas fields in CEE. By this all reserves are determined at 2P basis consistently with industry best practice.

Impairments

Impairment indicators

During the financial year the following impairment indicators were identified: change in crude oil, gas and electricity prices, change in the discount factors, change in product quotations and, in Hungary change in royalty legislation.

Significant assumptions

The price and margin assumptions used in impairment testing are reviewed annually and approved by management. They are based on management’s best estimate and were consistent with external sources. Prices in the near term are based on recent forward prices and market developments, long-term price assumptions are developed considering long-term views of global supply and demand including analysis of industry experts. Long-term assumptions take into consideration the impacts of the climate change.

2023 key assumptions for impairment testing (nominal terms) | 2024-2026 (average) | 2027-2029 (average) | 2030 | 2040 | 2050
Brent oil price (USD/bbl) | 80 | 78 | 80 | 89 | 89
TTF Gas price (EUR/MWh) | 50 | 42 | 41 | 42 | 34
CO2 price EUA (EUR/t) | 100 | 116 | 121 | 175 | 174
MOL refinery margin (USD/bbl) | 3,51 | 1,64 | 1,02 | -0,05 | 0,36
MOL petrochemical margin (EUR/t) | 301 | 427 | 466 | 462 | 590

2022 key assumptions for impairment testing (nominal terms) | 2023-2025 (average) | 2026-2028 (average) | 2030 | 2040 | 2050
Brent oil price (USD/bbl) | 80 | 73 | 74 | 82 | 83
TTF Gas price (EUR/MWh) | 83 | 47 | 38 | 39 | 31
CO2 price EUA (EUR/t) | 100 | 104 | 111 | 160 | 160
MOL refinery margin (USD/bbl) | 5,07 | 2,47 | 2,49 | 2,87 | 3,43
MOL petrochemical margin (EUR/t) | 579 | 622 | 688 | 664 | 939

Brent prices beyond the planning horizon are modelled by matching the global oil cost curve with the in-house global oil demand projection.

TTF natural gas prices beyond the planning horizon are set to be in line with the average break-even price of new global LNG projects (based on IEA).

CO2 quota prices beyond the planning horizon are modelled by the projected ETS EUA demand-supply balance capped by the projected breakeven prices of green Hydrogen projects.

MOL Plc's current strategy includes ‘green’ targets aligned with global trends in decarbonisation. MOL Plc has included the required capital expenditures for decarbonization in the cash flows for the CGU’s to achieve its strategic goal of climate neutrality by 2050, and has planned reduction in CO2 Scope 1+2 emissions to a level of -30% by 2030, in line with the announced Strategy.

|  | MOL Plc. Separate Financial Statements 2023 | 29

Calculation method of the applied discount rates

The discount rate represents the expectation of external parties about climate change. The discount rate used for valuations takes into account the weighted average cost of equity and net borrowings. The cost of equity is calculated using the capital asset pricing model (CAPM), which describes the relationship between market risk and the expected returns. The beta value expresses the volatility and market risk of a stock relative to a market index. The beta value in each segment is determined on the regresses the stock market returns of each company of the peer group to the return of the market index. The discount rate used for valuations takes into account the risk of climate change through these industry beta values. After taking the simple average of the betas to determine the segment beta, it is adjusted for the leverage and associated tax shield effect using ratios specific to MOL Plc.

In 2023, the following significant impairment losses and impairment reversals were recognised. Impairment losses are positive, reversals are negative figures.

| 2023 | 2022
Impairments and write-offs (without dry-holes) | HUF million | HUF million
Downstream | 1,940 | 5,288
Upstream | 3,747 | 19,728
Corporate and other | 399 | 239
Consumer services | - | 111
Total | 6,086 | 25,366
Impairment reversals |  |
Upstream | (1,816) | (2,146)
Total | (1,816) | (2,146)

In 2023 impairment was accounted in:

• Downstream segment for on the catalysts and assets under construction,

• Upstream segment for production fields and for assets under construction

• Corporate and other segment for assets under construction.

Impairment reversal was book for Algyő in Upstream segment.

Impairment test of Upstream assets

The impairment tests performed by MOL Plc. were performed using the following assumptions:

• Recoverable amount is calculated with the assumption of using the assets in long-term in the future.

• The recoverable amount of the asset (cash-generating unit) is the value in use.

• Discount rates: the value in use calculations take into account the time value of money, the risks specific to the asset and the rate of return that would be expected by the market for an investment with similar risk, cash flow and timing profile. It is estimated from current market transactions for similar assets or from the 'weighted average cost of capital' (WACC) of a listed entity that has a single asset or portfolio of assets that are similar in terms of service potential and risks to the asset under review.

• In assessing value in use, the estimated future cash flows are discounted to their present value using a post-tax discount rate. The pre-tax discount rate is determined by way of iteration.

• Exploration and Production segment post-tax discount factors were calculated using the WACC premise plus country risk premium of the related country. Based on the above, the post-tax discount factors used for the impairment tests in 2023 was 8.5%.

• The pre-tax discount rate in 2023 was 10.3% depending on the risk premium and the applicable tax rate in the geographic location of the CGU.

• The pre-tax discount rate in 2022 was 6.6 % depending on the risk premium and the applicable tax rate in the geographic location of the CGU.

• The growth rates are based on industry growth forecasts. MOL Plc. prepares cash flow forecasts derived from the most recent financial budgets of upstream segment approved by management for financial years 2024-2026 and extrapolates cash flows for the following years based on an USD/EUR inflation rate varying between 2% and 2.5%.

|  | MOL Plc. Separate Financial Statements 2023 | 30

Sensitivity of Upstream assets

MOL Plc. performed a sensitivity analysis on Upstream assets. The present values of Upstream assets were tested through the indicators for which the assets are most sensitive: Brent oil price, gas price and the discount factor.

| Change in the present value
Change in the present value of the CGU | HUF million
Brent oil price sensitivity |
-10% case | (14,437)
+10% case | 14,248
Natural gas price sensitivity |
-10% case | (25,851)
+10% case | 25,955
Discount factor sensitivity |
-1%point | 11,330
+1%point | (10,603)

Impairment test of Downstream assets

The impairment tests performed by MOL Plc. were performed using the following assumptions:

• Recoverable amount is calculated with the assumption of using the assets in long-term in the future.

• The recoverable amount of the asset (cash-generating unit) is the value in use.

• Discount rates: the value in use calculations take into account the time value of money, the risks specific to the asset and the rate of return that would be expected by the market for an investment with similar risk, cash flow and timing profile. It is estimated from current market transactions for similar assets or from the 'weighted average cost of capital' (WACC) of a listed entity that has a single asset or portfolio of assets that are similar in terms of service potential and risks to the asset under review.

• In assessing value in use, the estimated future cash flows are discounted to their present value using a post-tax discount rate. The pre-tax discount rate is determined by way of iteration.

• Downstream segment post-tax discount factors were calculated using the WACC premise plus country risk premium of the related country. Based on the above, the post-tax discount factors used for the impairment tests in 2023 was 9.4%

• The pre-tax discount rate in 2023 was 11.5% depending on the risk premium and the applicable tax rate in the geographic location of the CGU.

• The pre-tax discount rate in 2022 was 6.8% depending on the risk premium and the applicable tax rate in the geographic location of the CGU.

• The growth rates are based on industry growth forecasts. MOL Plc. prepares cash flow forecasts derived from the most recent financial budgets of downstream segment approved by management for financial years 2024-2026 and extrapolates cash flows for the following years based on an estimated USD/EUR inflation rates varying between 2% and 2.5%.

Sensitivity of Downstream assets

MOL Plc. performed a sensitivity analysis on the downstream cash generating unit. The present value of the cash generating unit were tested through the indicators for which the CGU is most sensitive: Brent oil price, gas price, Co2 quota price and the discount factor.

| Change in the present value
Change in the present value of the CGU | HUF million
Brent oil price sensitivity |
-10% case | 15,466
+10% case | (15,466)
Natural gas price sensitivity |
-10% case | 49,862
+10% case | (49,862)
CO2 quota price sensitivity |
150 EUR/t case | (23,304)
Discount factor sensitivity |
-1%point | 60,070
+1%point | (51,086)

|  | MOL Plc. Separate Financial Statements 2023 | 31

9. Investments in subsidiaries, associated companies and joint ventures

Accounting policies

In the separate financial statements investments in subsidiaries, associated companies and joint ventures are presented at cost according to IAS 27. Cost at initial recognition is the paid amount in cash or cash equivalent, irrevocable obligation to pay or the fair value of other consideration given by the purchaser. Cost include those costs which are directly attributable to the acquisition.

In case of investments paid in foreign currency:

· if the consideration of the purchase is paid before acquiring the owner’s rights, cost is the amount calculated by applying the official foreign currency rate of Hungarian National Bank on the day of the bank transfer,

· if the consideration of the purchase is paid after acquiring the owner’s rights, cost is the amount calculated by applying the official foreign currency rate of the Hungarian National Bank on the day of the transfer of owner’s rights.

There is no subsequent revaluation of investments paid in foreign currency due to foreign exchange rate changes.

Investments in subsidiaries, associated companies and joint ventures are subject of impairment test when indicator of potential impairment exists. When an external or internal indicator of impairment exists, the recoverable amount is to be determined and compared with net investment. If the recoverable amount is materially or permanently lower than net investment, impairment should be recorded. If the recoverable amount is materially or permanently higher than net investment, impairment reversal should be recorded. In case of upstream investments, impairment reversal cannot be recorded, only if the project turns into development phase.

The net recoverable amount is the higher of its fair value less cost of disposal and the present value of future cash flows of the investment proportioned based on ownership except for those upstream investments which are in exploration phase. In such cases recoverability depends on the existence of successful exploration and proved trading reserve. Therefore, future cash flows cannot be properly estimated and considered, until the project is qualified commercially successful. In these cases, net recoverable amount equals the IFRS net assets of the company.

Investments | 12/31/2023 | 12/31/2022
HUF million | HUF million
Subsidiaries | 2,991,227 | 2,940,796
Associates | 74,837 | 74,837
Joint ventures | 4,268 | 461
Other investments | 434 | 434
Total investments | 3,070,766 | 3,016,528

| Subsidiaries | Joint ventures | Associates | Other investments | Total
| HUF million | HUF million | HUF million | HUF million | HUF million
Opening net balance of 2022 | 2,733,109 | 1,750 | 74,837 | 434 | 2,810,130
Capital increase | 95,902 | - | - | - | 95,902
Acquisition | 175,814 | - | - | - | 175,814
Impairment reversal | 77,113 | - | - | - | 77,113
Establishment | 16 | - | - | - | 16
Contribution in kind | (54,237) | - | - | - | (54,237)
Dissolution | (353) | - | - | - | (353)
Impairment | (38,305) | (1,289) | - | - | (39,594)
Capital decrease | (48,180) | - | - | - | (48,180)
Other | (83) | - | - | - | (83)
Closing net balance of 2022 | 2,940,796 | 461 | 74,837 | 434 | 3,016,528
Capital increase | 55,302 | 3,817 | - | - | 59,119
Acquisition | 19,049 | - | - | - | 19,049
Establishment | 100 | - | - | - | 100
Dissolution | (28) | - | - | - | (28)
Impairment | (24,507) |  | - | - | (24,507)
Other | 515 | (10) | - | - | 505
Closing net balance of 2023 | 2,991,227 | 4,268 | 74,837 | 434 | 3,070,766

|  | MOL Plc. Separate Financial Statements 2023 | 32

Significant economic events regarding investments in 2023 were the following:

Investments | Capital increase | Acquisition | Establishment | Dissolution | Impairment | Other | Total
HUF million | HUF million | HUF million | HUF million | HUF million | HUF million | HUF million
Upstream | 5,818 | - | - | - | (3,361) | (10) | 2,447
Downstream | 19,690 | 229 | - | - | (102) | 572 | 20,389
Consumer Services | - | 4,334 | - | - | (18,326) | (25) | (14,017)
Corporate and other | 33,611 | 14,486 | 100 | (28) | (2,718) | (32) | 45,419
Total changes in investments | 59,119 | 19,049 | 100 | (28) | (24,507) | 505 | 54,238

Significant economic events regarding investments in 2022 were the following:

Investments | Capital increase | Impairment reversal | Acquisition | Establishment | Contribution in kind | Dissolution | Impairment | Capital decrease | Other | Total
HUF million | HUF million | HUF million | HUF million | HUF million | HUF million | HUF million | HUF million | HUF million | HUF million
Upstream | 6,296 | 77,113 | - | - | (54,237) | (329) | (37,611) | (47,343) | - | (56,111)
Downstream | 4,034 | - | - | 3 | - | (24) | (1,339) | - | (40) | 2,634
Consumer Services | 670 | - | 175,814 | - |  | - | (465) | - | - | 176,019
Corporate and other | 84,902 | - | - | 13 |  | - | (179) | (837) | (43) | 83,856
Total changes in investments | 95,902 | 77,113 | 175,814 | 16 | (54,237) | (353) | (39,594) | (48,180) | (83) | 206,398

In case of investments in subsidiaries, joint ventures and associates an impairment test is made, if there is an indication of impairment. The impairment tests were performed by MOL Plc. using the following assumptions:

• The recoverable amounts of the investments is the higher of its fair value less cost of disposal and its value in use.

• Discount rates: the value in use calculations take into account the time value of money, the risks specific to the asset and the rate of return that would be expected by the market for an investment with similar risk, cash flow and timing profile. It is estimated from current market transactions for similar assets or from the 'weighted average cost of capital' (WACC) of a listed entity that has a single asset or portfolio of assets that are similar in terms of service potential and risks to the asset under review. Based on the above, the WACC rate (which contains the country risk premium as well) used for the impairment tests in 2023 was in the range from 8.5% to 9.9%; for high risk countries 22%.

• The WACC rate (which contains the country risk premium as well) used for the impairment tests in 2022 was in the range from 6.5% to 7.1% and for high risk countries 20.5%.

• The growth rates are based on industry growth forecasts. MOL Plc. prepares cash flow forecasts derived from the most recent financial budgets approved by management for financial years 2024-2026 and extrapolates cash flows for the following years based on an USD/EUR inflation rate varying between 2% and 2.5%.

10. Other non-current assets

| 12/31/2023 | 12/31/2022
| HUF million | HUF million
Advance payments for assets under construction | 1,075 | 1,017
Over-year part of prepaid expenses | - | 285
Total | 1,075 | 1,302

11. Inventories

Accounting policies

Inventories, including work-in-progress are valued at the lower of cost and net realisable value, after provision for slow-moving and obsolete items. Net realisable value is the selling price in the ordinary course of business, less the costs of making the sale. Cost of purchased goods, including crude oil and purchased gas inventory, is determined primarily on the basis of weighted average cost. The acquisition cost of own produced inventory consists of direct materials, direct wages and the appropriate portion of production overhead expenses including royalty. Inventory with nil net realisable value is fully written off.

|  | MOL Plc. Separate Financial Statements 2023 | 33

| 12/31/2023 | 12/31/2022
At cost | Lower of cost or net realisable value | At cost | Lower of cost or net realisable value
HUF million | HUF million | HUF million | HUF million
Purchased crude oil | 106,991 | 106,991 | 170,361 | 170,361
Work in progress and semi-finished goods | 68,954 | 68,954 | 130,822 | 130,822
Finished goods | 75,866 | 75,866 | 95,659 | 90,934
Other raw materials | 33,848 | 30,664 | 38,944 | 35,516
Other goods for resale | 13,867 | 13,867 | 31,388 | 30,726
Total | 299,526 | 296,342 | 467,174 | 458,359

During the year 2023 HUF 2,330,743 million of inventories have been recognised as an expense, of which impairment of HUF 4,329 million has been recorded in 2023 (2022: HUF 6,638 million), mainly on finished goods. Inventories driven by strengthening HUF, lower crude oil and product prices and lower purchased alternative crude inventory volumes.

12. Other current assets

| 12/31/2023 | 12/31/2022
| HUF million | HUF million
Prepaid and recoverable taxes and duties (excluding income taxes) | 13,549 | 5,347
Prepaid expenses | 7,809 | 7,225
Advance payments | 5,070 | 4,374
Dividend receivables | 15 | 2,642
Other | 212 | 42
Total | 26,655 | 19,630

Other item contains receivables regarding employees and revenue accruals.

13. Provisions

Accounting policies

Provision is made for the best estimate of the expenditure required to settle the present obligation (legal or constructive) as a result of past event where it is considered to be probable that a liability exists, and a reliable estimate can be made of the outcome. Long-term obligation is discounted to the present value. Where discounting is used, the carrying amount of the provisions increases in each period to reflect the unwinding of the discount by the passage of time. This increase is recognised as interest expense. Provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimate.

Where it is possible that a settlement may be reached or it is not possible to make a reliable estimate of financial impact, appropriate disclosure is made but no provision created.

Provision for Environmental expenditures

Environmental expenditures that relate to current or future economic benefits are expensed or capitalised as appropriate. Liabilities for environmental costs are recognised when environmental assessments or clean-ups are probable, and the amount recognised is the best estimate of the expenditure required. In case of long-term liability, the present value of the estimated future expenditure is recognised.

Provision for Field abandonment

MOL Plc. records a provision upon initial recognition for the present value of the estimated future cost of abandonment of oil and gas production facilities following the termination of production. At the time the obligation arises, it is provided for in full by recognising the present value of future field abandonment and restoration expenses as a liability. An equivalent amount is capitalised as part of the carrying amount of long-lived assets. The estimate is based upon current legislative requirements, technology and price levels. A corresponding item of property, plant and equipment of an amount equivalent to the provision is also created. This is subsequently depreciated as part of the capital costs of the facility or item of plant (on a straight-line basis in Downstream and using the unit-of production method in Upstream). Any change in the present value of the estimated expenditure is reflected as an adjustment to the provision and the corresponding property, plant and equipment.

Provision for Redundancy

The employees of MOL Plc. are eligible, immediately upon termination, for redundancy payment pursuant to the terms of Collective Agreement between the MOL Plc. and its employees. The amount of such a liability is recorded as a provision in the statement of financial position when the workforce reduction programme is defined, adopted, announced or has started to be implemented.

Provision for Long-term employee benefits

The cost of providing benefits under MOL Plc.’s defined benefit plans is determined separately for each plan using the projected unit credit actuarial valuation method. Actuarial gains and losses of retirement benefits are recognised as other comprehensive income immediately. Past service costs, resulting from the introduction of, or changes to the defined benefit scheme are recognised as an expense immediately.

|  | MOL Plc. Separate Financial Statements 2023 | 34

Net interest expense is calculated on the basis of the net defined benefit obligation and disclosed as part of the finance result. Differences between the return on plan assets and interest income on plan assets included in the net interest expense is recognised in other comprehensive income.

Provision for Legal claims

Provision is made for legal cases if the negative expected outcome of the legal case is more likely than not.

Provision for Intercompany obligations

MOL Plc. provides comfort letters to its subsidiaries. This financial support might be necessary in the future for a subsidiary to fulfil its obligations under its loan facilities and accrued interest. Estimated probable expenditure is the outstanding loan liability at balance sheet date which is not covered by the recoverable value of the supported subsidiary.

Provision for Emission quotas

MOL Plc. recognises provision for the estimated CO2 emissions costs when actual emission exceeds the emission rights granted and still held. When actual emission exceeds the amount of emission rights granted, provision is recognised for the exceeding emission rights based on carrying amount of purchased quotas held for compliance, the purchase price of allowance concluded in forward contracts, and for any residual excess at market quotations at the reporting date. In addition, MOL Plc. recognises provision for estimated costs of Upstream Emission Reduction quotas (UER) intended to be used to fulfil obligations stipulated by EU Fuel Quality Directive.

Significant accounting estimates and judgements

A judgement is necessary in assessing the likelihood that a claim will succeed, or liability will arise, and to quantify the possible range of any settlement. Due to the inherent uncertainty on this evaluation process, actual losses may be different from the liability originally estimated.

Scope, quantification and timing of environmental and field abandonment provision

MOL Plc. holds provisions for the future decommissioning of oil and natural gas production facilities and pipelines at the end of their economic lives. Most of these decommissioning events are many years in the future and the precise requirements that will have to be met when the removal event occurs are uncertain. Decommissioning technologies and costs are constantly changing, as well as political, environmental, safety and public expectations. Management uses its previous experience and its own interpretation of the respective legislation to determine environmental and field abandonment provisions.

Actuarial estimates applied for calculation of retirement benefit obligations

The cost of defined benefit plans is determined using actuarial valuations, which involves making assumptions about discount rates, future salary increases and mortality or fluctuation rates. Due to the long-term nature of these plans, such estimates are subject to significant uncertainty.

Outcome of certain litigations

MOL Plc. is party to number of litigations, proceedings and civil actions arising in the ordinary course of business. Other provisions and liabilities are recognised in the period when it becomes probable that there will be a future outflow of funds resulting from past events and the amount of cash outflow can be reliably estimated. The timing of recognition and quantification of the liability require the application of judgement to existing facts and circumstances, which can be subject to change. Since the cash outflows can take place many years in the future, the carrying amounts of provisions and liabilities are reviewed regularly and adjusted to take account of changing facts and circumstances.

| Environmental | Field abandonment | Redundancy | Long-term employee benefits | Legal claims | Emission rights and other | Total
| HUF million | HUF million | HUF million | HUF million | HUF million | HUF million | HUF million
Balance as of 01 Jan 2022 | 9,905 | 199,757 | 234 | 8,195 | 402 | 13,937 | 232,431
Additions and revision of previous estimates | (480) | (11,246) | 31 | 4,904 | - | 14,336 | 7,545
Unwinding of the discount | 294 | 5,667 | - | 240 | - | 6 | 6,207
Currency differences | - | - | - | - | - | 198 | 198
Provision used during the year | (1,348) | - | (156) | (481) | (150) | (10,997) | (13,132)
Other movement | 0 | - | 0 | (1,200) | 0 | 0 | (1,200)
Balance as of 31 Dec 2022 | 8,371 | 194,178 | 109 | 11,658 | 252 | 17,480 | 232,048
Additions and revision of previous estimates | 182 | 9,184 | 53 | 2,085 | - | 33,861 | 45,365
Unwinding of the discount | 427 | 9,936 | - | 1,463 | - | 5 | 11,831
Currency differences | - | - | - | - | - | (115) | (115)
Provision used during the year | (1,520) | - | (80) | (1,556) | (250) | (25,782) | (29,188)
Other movement | - | - | - | 0 | - | - | 0
Balance as of 31 Dec 2023 | 7,460 | 213,298 | 82 | 13,650 | 2 | 25,449 | 259,941
Current portion 31 Dec 2022 | 1,392 | 332 | 29 | 1,877 | 250 | 17,291 | 21,171
Non-current portion 31 Dec 2022 | 6,979 | 193,846 | 80 | 9,781 | 2 | 189 | 210,877
Current portion 31 Dec 2023 | 2,124 | - | 65 | 1,850 | - | 25,399 | 29,438
Non-current portion 31 Dec 2023 | 5,336 | 213,298 | 17 | 11,800 | 2 | 50 | 230,503

Provision for Environmental expenditures

The closing balance of provision for the estimated cost of remediation of past environmental damages, primarily soil and groundwater contamination and disposal of hazardous wastes, such as acid tar is HUF 7,460 million. The provision is made on the basis of assessments prepared by MOL Plc.’s internal environmental expert team. The amount of the provision has been determined on the basis of existing

|  | MOL Plc. Separate Financial Statements 2023 | 35

technology at current prices by calculating risk-weighted cash flows for a period up to 12 years; in case of upstream segment up to 50 years, discounted using estimated risk-free real interest rates.

MOL Plc. prepared a sensitivity analysis on the cash flow period applied on environmental provision. The analysis examined the impact of a +/- five-year change in the cash flow forecast period on the environmental provision compared to the year-end liability recognised. During the assessment the same discount rates were applied.

The results of the analysis are summarised in the table below showing the absolute and percentage change in the liability already recognised in the balance sheet:

| - 5 years | + 5 years
Sensitivity analysis on environmental provision | % | HUF million | % | HUF million
increase/(decrease)
Change in the amount of the liability | (5.6) | (421,2) | 4.7 | 350,5

Provision for Field abandonment

As of 31 December 2023, provision of HUF 213,298 million has been made for estimated total costs of plugging and abandoning wells upon termination of production. Approximately 1% of these costs are expected to be incurred between 2024 and 2028 and the remaining 99% between 2029 and 2078. The amount of the provision has been determined on the basis of management’s understanding of the respective legislation, expected timing of cash flows calculated at current prices and discounted using estimated risk-free real interest rates based on current the best estimate of the management. Due to the climate change and energy transformation the timing of the expected cash flows of the field abandonement has high uncertainty and may change significantly in subsequent periods depending on the pace of the transition.

Activities related to field suspension, such as plugging and abandoning wells upon termination of production and remediation of the area are planned to be performed by hiring external resources. Based on the judgement of the management, there will be sufficient capacity available for these activities in the area. As required by IAS 16 – Property, Plant and Equipment, the qualifying portion of the provision has been capitalised as a component of the underlying fields. Decommissioning rates used in the calculation of the liability are in a range of 6.86% and 8.31% depending on the risk free rate, the inflation and the country risk premium in the given country.

MOL Plc performed sensitivity analysis on the field abandonment liability by examining the +/- 1 percentage point change of the decommissioning rate. Decommissioning rate higher by one percentage point reduces the provision by 19%, while a decommissioning rate lower by one percentage point increases the provision by 25%.

Provision for Redundancy

As part of continuing efficiency improvement projects MOL Plc. decided to further optimise workforce. As the management is committed to these changes and the restructuring plan was communicated in detail to parties involved, MOL Plc. recognised a provision for the net present value of future redundancy payments and related tax and contribution. The closing balance of provision for redundancy is HUF 82 million as of 31 December 2023 (31 December 2022: HUF 109 million).

Provision for Long-term employee benefits

As of 31 December 2023, MOL Plc. has recognised a provision of HUF 13,650 million to cover its estimated obligation regarding future retirement and jubilee benefits payable to current employees expected to retire from MOL Plc. The company operates benefit schemes that provide lump sum benefit to all employees at the time of their retirement. Employees of MOL Plc. are entitled to 3 times of their final monthly salary regardless of the period of service. In addition to the above-mentioned benefits, in Hungary the retiring employees are entitled to the absence fee for their notice period – which lasts for 1-3 months depending on the length of the past service – which is determined by the Hungarian Labour Code. None of these plans have separately administered funds, therefore there are no plan assets. The amount of the provision has been determined using the projected unit credit method, based on financial and actuarial variables and assumptions that reflect relevant official statistical data which are in line with those incorporated in the business plan of MOL Plc.

|  | MOL Plc. Separate Financial Statements 2023 | 36

| 2023 | 2022
| HUF million | HUF million
Present value of total retirement and jubilee benefit obligation at the beginning of the year | 11,658 | 8,195
Current service cost | 620 | 355
Past service cost | - | 5,484
Interest expense | 1,463 | 240
Provision used during the year | (1,511) | (481)
Net actuarial (gain)/loss | 1,420 | (935)
from which: |  |
Retirement benefit | 554 | (550)
Jubilee benefit | 866 | (385)
Other movements | 0 | (1,200)
Present value of total long-term employee benefit obligation at year end | 13,650 | 11,658

The other movements contain reclassification in long-term employee benefits between provision and other current and non-current liabilities.

The following table summarises the components of net benefit expense recognised in the statement of total comprehensive profit or loss as employee benefit expense regarding provision for long-term employee retirement and jubilee benefits:

| 2023 | 2022
| HUF million | HUF million
Current service cost | 620 | 355
Past service cost | - | 5,484
Net actuarial (gain)/loss | 1,420 | (935)
Balance as at year end | 2,040 | 4,904

The following table summarises the main financial and actuarial variables and assumptions based on which the amount of retirement benefits has been determined:

| 2023 | 2022
Discount rate in % | 5.66 - 7.12 | 13.04 - 8.09
Average wage increase in % | 1. year 9.00;after 3.00 | 1. year 10.00;after 3.00
Mortality index (male) | 0.04 - 3.01 | 0.04 - 3.01
Mortality index (female) | 0.02 - 1.33 | 0.02 - 1.33

Actuarial (gains) and losses comprises of the following items:

| Retirement benefits | Jubilee benefits
| 2023 | 2022 | 2023 | 2022
| HUF million | HUF million | HUF million | HUF million
Actuarial (gains) / losses arising from changes in demographical assumptions | (116) | 54 | (126) | 8
Actuarial (gains) / losses arising from changes in financial assumptions | 1,119 | (1,362) | 868 | (384)
Actuarial (gains) / losses arising from experience adjustments | (449) | 758 | 124 | (9)
Total actuarial (gains) / losses | 554 | (550) | 866 | (385)

A quantitative sensitivity analysis for significant assumptions as at 31 December is, as shown below:

| Retirement benefits | Jubilee benefits
| 2023 | 2022 | 2023 | 2022
| HUF million | HUF million | HUF million | HUF million
Discount rate: |  |  |  |
0.5% decrease | 232 | 175 | 196 | 166
0.5% increase | (217) | (160) | (185) | (148)
Termination rate: |  |  |  |
50% decrease | 1,208 | 845 | 1,072 | 821
50% increase | (902) | (636) | (855) | (668)

|  | MOL Plc. Separate Financial Statements 2023 | 37

Provision for legal claims

As of 31 December 2023, provision of HUF 2 million (31 December 2022: HUF 252 million) has been made for estimated total future losses from litigations.

Provision for emission quotas

As of 31 December 2023, the MOL Plc. has recognised provision of HUF 18,567 million for the shortage of emission quotas (31 December 2022: HUF 12,723 million). In 2023, MOL Plc. has been granted 1,052,591 tons emission quotas by the Hungarian authorities (in 2022: 1,055,173 tons). The total emissions during 2023 amounted to equivalent of 1,644,801 tons of emission quotas (in 2022: 1,560,741 tons). In addition, MOL Plc. has recognised provision of HUF 959 million for Upstream Emission Reduction (UER) liability (31 December 2022: HUF 1,239 million).

MOL Plc. has recognised provision of HUF 3,911 million for Energy Efficiency quota (EKR) on 31 December 2023 (31 December 2022: 1,311 million).

For further information regarding the calculation method of estimated cost please refer to the accounting policies.

14. Other non-current liabilities

| 12/31/2023 | 12/31/2022
| HUF million | HUF million
Government grants received | 1,625 | 1,169
Loyalty provision | 1,430 | 996
Retirement benefit (share based payments) | 1,209 | 1,170
Compensation received for pipeline eliciting | 369 | 131
Other | 54 | 57
Total | 4,687 | 3,523

15. Other current liabilities

| 12/31/2023 | 12/31/2022
| HUF million | HUF million
Taxes, contributions payable (excluding corporate tax and mining royalty) | 69,759 | 113,363
Advances from customers | 13,622 | 9,665
Amounts due to employees | 10,240 | 9,739
Other accrued incomes | 3,898 | 4,010
Deferred revenue from government grants | 2,296 | 2,137
Fee payable for strategic inventory storage | 1,765 | 765
Mining royalty | - | 20,847
Other | 266 | 218
Total | 101,846 | 160,744

Taxes, contributions payable mainly include value added taxes, excise taxes, CO2 tax and contributions to social security.

16. Assets classified as held for sale

Accounting policies

Non-current assets and disposal groups are classified as held for sale if their carrying amounts are to be realised by sale rather than through continued use. This is the case when the sale is highly probable, and the asset or disposal group is available for immediate sale in its present condition. Management must be committed to the sale, which should be expected to qualify for recognition as a completed sale within one year from the date of classification as held for sale, and actions required to complete the plan of sale should indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn.

Immediately before the initial classification of the asset as held for sale, impairment test shall be carried out. Non-current assets and disposal groups classified as held for sale are measured at the lower of carrying amount and fair value less costs to sell. Property, plant and equipment and intangible assets are no longer depreciated or amortised once classified as held for sale.

As of 31 December 2023 and 2022 assets held for sale contains service stations at carrying amount, furthermore unused office buildings. These assets classified as held for sale are reported in Consumer Services and Corporate and other segments.

|  | MOL Plc. Separate Financial Statements 2023 | 38

| 12/31/2023 | 12/31/2022
Assets and liabilities held for sale | HUF million | HUF million
Assets |  |
Property, plant and equipment | 1,192 | 2,586
Assets classified as held for sale | 1,192 | 2,586
Liabilities |  |
Liabilities related to assets classified as held for sale | - | -

|  | MOL Plc. Separate Financial Statements 2023 | 39

Financial

instruments, capital and financial risk management

This section explains policies and procedures applied to manage MOL Plc.’s capital structure and the financial risks MOL Plc. is exposed to. This section also describes the financial instruments applied to fulfil these procedures. Financial instruments disclosures are also provided in this section.

Accounting policies

Initial recognition

Financial instruments are recognised initially at fair value (including transaction costs, for assets and liabilities not measured at fair value through profit or loss) when the entity becomes a party to the contractual provisions of the instrument. Trade receivables are recognised at transaction price if they do not contain a significant financing component. A regular way purchase or sale of financial assets is recognised using settlement date accounting.

Financial assets - Classification

The MOL Plc.’s financial assets are classified at the time of initial recognition depending on their nature and purpose. To determine which measurement category a financial asset falls into, it should be first considered whether the financial asset is an investment in an equity instrument or a debt instrument. Equity instruments should be classified as fair value to profit or loss, however if the equity instrument is not held for trading, fair value through other comprehensive income option can be elected at initial recognition. If the financial asset is a debt instrument the following assessment should be considered in determining its classification. All derivatives in scope of IFRS 9 are measured at fair value. Value changes are recognized in profit or loss unless the entity has elected to apply hedge accounting by designating the derivative as a hedging instrument in an eligible hedging relationship. In case of deliverable transactions, which are part of normal sales and purchases of the entity ,the accounting treatment of sale of goods shall be applied.

Amortised cost

Financial instruments measured at amortised cost are those financial assets that is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Fair value through other comprehensive income

Financial assets at fair value through other comprehensive income are those financial assets that is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Fair value through profit or loss

Financial assets at fair value through profit or loss include financial assets which are not classified in any of the two preceding categories or financial instruments designated upon initial recognition as at fair value through profit or loss.

Financial liabilities – Classification

By default, financial liabilities are measured at amortised cost, unless they are required to be measured at fair value through profit or loss or the entity has opted to measure a liability at fair value through profit or loss. A financial liability is required to be measured at fair value through profit or loss in case of liabilities that is classified as ‘held for trading’ and derivatives. An entity can, at initial recognition, irrevocably designate a financial liability as measured at fair value through profit or loss (fair value option) where doing so results in more relevant information, because either:

• it eliminates or significantly reduces a measurement or recognition inconsistency, or

• a group of financial liabilities or financial assets and financial liabilities is managed, and its performance is evaluated on a fair value basis.

Subsequent measurement

Subsequent measurement depends on the classification of the given financial instrument.

Amortised cost

The asset or liability is measured at the amount recognised at initial recognition minus principal repayments, plus or minus the cumulative amortisation of any difference between that initial amount and the maturity amount, and any loss allowance. Interest income is calculated using the effective interest method and is recognised in profit and loss. Changes in the carrying amounts are recognised in profit and loss when the asset is derecognised or reclassified.

Fair value through other comprehensive income – debt instrument

The asset is measured at fair value. Interest revenue, impairment gains and losses, and a portion of foreign exchange gains and losses, are recognised in profit and loss on the same basis as for amortised cost assets. Changes in fair value are recognised in other comprehensive income. When the asset is derecognised or reclassified, changes in fair value previously recognised in other comprehensive income and accumulated in equity are reclassified to profit and loss on a basis that always results in an asset measured at fair value through other comprehensive income having the same effect on profit and loss as if it were measured at amortised cost.

|  | MOL Plc. Separate Financial Statements 2023 | 40

Fair value through other comprehensive income – equity instrument

Dividends are recognised when the entity’s right to receive payment is established, it is probable the economic benefits will flow to the entity and the amount can be measured reliably. Dividends are recognised in profit and loss unless they clearly represent recovery of a part of the cost of the investment, in which case they are included in other comprehensive income. Changes in fair value are recognised in other comprehensive income and are never recycled to profit and loss, even if the asset is sold or impaired.

Fair value through profit or loss

The asset or liability is measured at fair value. Changes in fair value are recognised in profit and loss as they arise.

Fair value measurement

Fair value of instruments is determined by reference to quoted market prices at the close of business on the balance sheet date without any deduction for transaction costs. For investments where there is no quoted market price, fair value is determined by reference to the current market value of another instrument which is substantially the same or is calculated based on the expected cash flows of the underlying net asset base of the investment.

Derecognition of Financial Instruments

Derecognition of a financial asset takes place when the MOL Plc. no longer controls the contractual rights that comprise the financial asset, which is normally the case when the instrument is sold, or all the cash flows attributable to the instrument are passed through to an independent third party. When the MOL Plc. neither transfers nor retains all the risks and rewards of the financial asset and continues to control the transferred asset, it recognises its retained interest in the asset and a liability for the amounts it may have to pay.

A financial liability should be removed from the balance sheet when, and only when, it is extinguished, that is, when the obligation specified in the contract is either discharged or cancelled or expires.

Impairment of Financial Assets

The impairment model of financial assets is based on the premise of providing for expected losses. The loss allowances for financial assets are based on assumptions about risk of default and expected loss rates. As a general approach, impairment losses on a financial asset or group of financial assets are recognised for expected credit losses at an amount equal to:

• 12-month expected credit losses (expected credit losses that result from those default events on the financial instrument that are possible within 12 months after the reporting date), or

• full lifetime expected credit losses (expected credit losses that result from all possible default events over the life of the financial instrument).

The loss allowance for financial instruments is measured at an amount equal to full lifetime expected losses if the credit risk of a financial instrument has increased significantly since initial recognition. If the credit risk of the financial instrument is low at the reporting date it can be assumed that credit risk on the financial instrument has not increased significantly since initial recognition and 12-month expected credit losses can be applied. MOL Plc. determines significant increase in credit risk in case of debt securities based on credit rating agency ratings. As there is a rebuttable presumption that the credit risk on a financial asset has increased significantly since initial recognition when contractual payments are more than 30 days past due assessment is required on a case-by-case basis whether the credit risk significantly increased in that financial asset when such an event occurs.

Additionally, the MOL Plc. applies the simplified approach to recognise full lifetime expected losses from origination for trade receivables, IFRS 15 contract assets and lease receivables. For all other financial instruments, general approach is applied.

The Company calculates the expected credit loss on trade receivables as the average of yearly historical loss rates of last three years multiplied by the forward-looking element. The forward-looking element is based on positive correlation between banking sector credit losses and one year lag of unemployment rate. In case of other financial assets the expected credit loss of the instrument will be determined by multiplying the probability of default rate of the instrument with the loss given default of the instrument.

An entity shall recognise in profit or loss, as an impairment gain or loss, the amount of expected credit losses (or reversal) that is required to adjust the loss allowance at the reporting date.

Independently of the two approaches mentioned above, impairment losses recognised where there is an objective evidence on impairment due to a loss event and this loss event significantly impacts the estimated future cash flows of the financial asset or group of financial assets. These are required to be assessed on a case-by-case basis. The maximum amount of impairment accounted for by the MOL Plc. is 100% of unsecured part of the financial asset. The amount of loss is recognised in the statement of profit or loss. The following indicatators are objective evidence for impairment, but it is not limited to it:

• contractual payment is 180 days past due

• default of the issuer

• a breach of contract, such as a default or past-due event;

• partial release of claim

• legal procedure started against the debtor

• the disappearance of an active market for the financial asset because of financial difficulties;

If the expected cash inflow of the financial asset significantly exceeds its carrying amount (the criteria of the impairment only partially or not at all exist), the impairment that was recognised earlier must be reversed partly or fully. As a result of the reversal the amount of the receivable must not exceed the original outstanding receivable

Significant accounting estimates and judgements

For determination of fair value, management applies estimates of the future trend of key drivers of such values, including, but not limited to yield curves, foreign exchange and risk-free interest rates, and in case of the conversion option volatility of MOL share prices and dividend yield.

The loss allowances for financial assets are based on assumptions about risk of default and expected loss rates. The MOL Plc. uses judgement in making these assumptions and selecting the inputs to the impairment calculation, based on the MOL Plc’s past history and existing market conditions, as well as forward-looking estimates at the end of each reporting period.

|  | MOL Plc. Separate Financial Statements 2023 | 41

17. Financial risk and capital management

Financial risk management

Financial risk management is a centralised function at MOL Plc., which makes possible to monitor and measure all financial risks centrally. As a result, Treasury liquidity and Financial Risk Report are submitted to the senior management quarterly.

As a general approach, risk management considers the business as a well-balanced integrated portfolio. MOL Plc. actively manages its commodity exposures for the following purpose:

- protection of financial ratios and targeted financial results

- reducing the exposure of cash flow to market price fluctuations

Capital management

The primary objective of the MOL Plc’s capital management is to ensure that it maintains a strong credit rating and healthy capital ratios in order to support its business and maximise shareholder value.

The MOL Plc manages its capital structure and makes adjustments to it in light of changes in economic conditions.

2x is the early warning indicator in net debt to EBITDA where MOL Plc might consider making changes in its capital structure. Since the ratio is currently low (1.53 in 2023) there is no open decision point on it.

The long-term healthy net gearing ratio is expected to be 30% debt and 70% equity at MOL Plc. If the ratio diverges permanently from this level the MOL Plc might consider making changes in its capital structure. Since the ratio does not differ from the 30% significantly (11% in 2023) there is no open decision point on it. For the calculation of the net gearing and net debt/EBITDA ratio please refer to Note 17/C.

To maintain or adjust the capital structure, the MOL Plc may adjust the dividend payment to shareholders, return capital from shareholders or issue new shares. Treasury share (put-call option) transactions are also applied for such purposes.

a) Key exposures

Risk Management identifies and measures the key risk drivers and quantifies their impact on the MOL Plc.’s operating results. MOL Plc. is monitoring key exposures, the diesel crack spread, the crude oil price and gasoline crack spread have the biggest contribution to the cash flow volatility.

Commodity price risk

MOL Plc. as an integrated oil and gas company is exposed to commodity price risk on demand and supply side as well. The main commodity risks stem from the fact downstream processing more crude oil than our own crude oil production. In Upstream MOL Plc. has long position in crude oil and in Downstream MOL Plc. has a long position in refinery margin. Investors buying oil industry shares are generally willing to take the risk of oil business so commodity price risk should not be fully eliminated from the cash flow. When necessary, commodity hedging is considered to eliminate risks other than ‘business as usual’ risks or general market price volatility.

In 2023 MOL Plc. concluded short and mid-term commodity swap and option transactions. These transactions are mainly conducted for operational hedging purposes, in order to mitigate the effects of the price volatility in our operations and at the same time, when possible, to lock in favourable forward curve structure.

Commodity risk is monitored based on Value at Risk measure.

Foreign currency risk

MOL Plc. has FX exposure due to mismatch of currency composition of cash inflows and outflows, investments, debts.

MOL Plc. relies on economic currency risk management principle that the currency mix of the debt portfolio should reflect the net long-term currency position of profit generation (‘natural hedge’). However in circumstances where insisting to this principle without any flexibility is disadvantageous for the company our practice allows using foreign exchange derivatives as well. The main motivation here is safeguarding the financial covenant compliance.

Interest rate risk

As an energy company, MOL Plc. has limited interest rate exposure. The ratio of fix / floating interest burdened debt is monitored by Group Treasury.

Beside contracting loan agreements with a given fix / float interest rate MOL Plc. also has the flexibility to manage its level of interest rate risk exposure via interest rate swaps.

Credit risk

MOL Plc. sells products and services to a diversified customer portfolio - both from business segment and geographical point of view – with a large number of customers representing acceptable credit risk profile.

Policies and procedures are in place to set the framework and principles for customer credit risk management and collection of receivables to minimise credit losses deriving from delayed payment or non-payment of customers, to track these risks on a continuous basis and to provide financial support to sales process in accordance with MOL Plc.’s sales strategy and ability to bear risk.

|  | MOL Plc. Separate Financial Statements 2023 | 42

Creditworthiness of customers with deferred payment term is thoroughly assessed, regularly reviewed and appropriate credit risk mitigation tools are applied. According to the MOL Plc.’s policy, customer credit limits should be covered by payment securities where applicable: credit insurance, bank guarantee, letter of credit, cash deposit and lien are the most preferred types of security to cover customer credit risk.

Individual customer credit limits are calculated taking into account external and/or internal assessment of customers as well as the securities provided. Information on existing and potential customers is based on well-known and reliable Credit Agencies and available internal data.

Various solutions support the customer credit management procedures, including monitoring of credit exposures for immediate information on breach and expiry of credit limits or guarantees. When such credit situations occur, deliveries shall be blocked; decisions on the unblocking of deliveries shall be made by authorised persons on both Financial and Business side.

Credit risk of the investment portfolio is safeguarded by a rating grid concept. For bank deposits, an Internal Rating system is applied to reasonably diversify and mitigate the partner bank counterparty risks of MOL Plc by proper distribution of available cash among banks based on their external and respective sovereign ratings. For securities, external ratings are taken into account for the limit calculation. Limits, their utilisations and escalation procedures are continuously managed and controlled by Cash Management areas of the MOL Plc.

Liquidity risk

MOL Plc. aims to manage liquidity risk by covering liquidity needs from bank deposits, other cash equivalents and from adequate amount of committed credit facilities. Besides, on operational level various cash pools help to optimise liquidity surplus and need on a daily basis.

The existing bank facilities and the available cash and cash equivalents ensure both sufficient level of liquidity and financial flexibility for MOL Plc.

| 2023 | 2022
The amount of undrawn major committed credit facilities* | HUF million | HUF million
Long-term loan facilities available | 837,673 | 1,066,066
Short-term facilities available | 71,756 | 78,994
Total loan facilities available | 909,429 | 1,145,060
Cash and cash equivalents | 144,659 | 309,592
Total available liquidity | 1,054,088 | 1,454,652
*The table contains MOL Plc.'s own credit facilities and where the MOL Plc. is a guarantor. |  |

With the effective date of 1 June 2023, the total amount of the EUR 575 million revolving credit facility agreement signed on 29 November 2021 by MOL Group Finance Zrt. as borrower and MOL Plc. as guarantor for 5 years (with option for 1+1-year extension) has been increased by EUR 150 million. As a result of the increase total facility amount changed to EUR 725 million.

The EUR 750 million 7-year maturity fixed-rate Eurobond (coupon 2.625%) issued in 2016 by MOL Plc. has been fully repaid along with the last coupon payment on the maturity date in April.

MOL Plc. and its subsidiary MOL Group Finance Zrt. have established a EUR 2,000,000,000 Euro Medium Term Note (“EMTN”) Programme. Based on the EMTN Programme MOL and MGF will be able to issue Eurobonds up to an aggregated principal amount of EUR 2 billion. Net proceeds from potential future issuances can be applied for general corporate purposes.

MOL Group Finance Zrt. as borrower and MOL Plc. as guarantor signed 3 revolving credit facilities on 25 October 2023 in the amount of:

(i) EUR 600 million multicurrency (EUR/USD),

(ii) JPY 14.6 billion (approximately EUR 100 million) and

(iii) EUR 50 million bilateral multicurrency (EUR/RMB).

Conclusion of the agreements constitutes a full refinancing of the revolving credit facility agreement signed on 15 December 2017 in the amount of EUR 750 million, which would have matured in 2024.

Maturity profile of financial liabilities based on contractual undiscounted payments | Due within 1 month | Due between 1 and 12 months | Due between 1 and 5 years | Due after 5 years | Total
12/31/2023 | HUF million | HUF million | HUF million | HUF million | HUF million
Borrowings | 33,104 | 46,106 | 309,929 | 101,268 | 490,407
Transferred "A" shares with put&call options | - | 174,184 | - | - | 174,184
Trade and other payables | 328,626 | 39,403 | - | - | 368,029
Other financial liabilities | 685,444 | - | 59 | - | 685,503
Non-derivative financial instruments | 1,047,174 | 259,693 | 309,988 | 101,268 | 1,718,123
Derivatives | - | 9,188 | 186 | - | 9,374
Total financial liabilities | 1,047,174 | 268,881 | 310,174 | 101,268 | 1,727,497
Guarantees* | 354,445 | - | - | - | 354,445
Guarantees for potential drawdowns** | 904,131 | - | - | - | 904,131
Total off-balance sheet commitments | 1,258,576 | - | - | - | 1,258,576
*The maximum amount of the guarantee is allocated to the earliest period in which the guarantee could be called
**Refers to MOL Plc guarantees for any drawdowns made by MGF under available revolving credit facilities

|  | MOL Plc. Separate Financial Statements 2023 | 43

Maturity profile of financial liabilities based on contractual undiscounted payments | Due within 1 month | Due between 1 and 12 months | Due between 1 and 5 years | Due after 5 years | Total
12/31/2022 | HUF million | HUF million | HUF million | HUF million | HUF million
Borrowings | 18,776 | 342,010 | 340,522 | 127,726 | 829,034
Transferred "A" shares with put&call options | - | 181,656 | - | - | 181,656
Trade and other payables | 401,256 | 83,006 | - | - | 484,262
Other financial liabilities | 656 | - | 305 | - | 961
Non-derivative financial instruments | 420,688 | 606,672 | 340,827 | 127,726 | 1,495,913
Derivatives | - | 23,131 | - | - | 23,131
Total financial liabilities | 420,688 | 629,803 | 340,827 | 127,726 | 1,519,044
Guarantees* | 423,201 | - | - | - | 423,201
Guarantees for potential drawdowns** | 833,253 | - | - | - | 833,253
Total off-balance sheet commitments | 1,256,454 | - | - | - | 1,256,454
*The maximum amount of the guarantee is allocated to the earliest period in which the guarantee could be called
**Refers to MOL Plc guarantees for any drawdowns made by MGF under available revolving credit facilities

b) Sensitivity analysis

In line with the international benchmark, MOL Plc. Risk Management prepares sensitivity analysis. According to the Financial Risk Management Model, the effect of the key risk elements on clean-CCS-based profit/loss are the following:

| 2023 | 2022
Effect on Clean CCS-based 1 (Current Cost of Supply) profit / (loss) from operations | HUF billion | HUF billion
Brent crude oil price (change by +/- 10 USD/bbl; with fixed crack spreads) |  |
Upstream | +6.9/-6.9 | +7.6/-7.6
Downstream | -2.8/+2.8 | -2.9/+2.9
TTF gas price (change by +/- 15 EUR/MWh; with fixed crack spreads) |  |
Upstream2 | +21.3/-21.3 | +21.2/-21.2
Downstream | -23.1/+23.1 | -22.6/+22.6
Exchange rates (change by +/- 15 HUF/USD; with fixed crack spreads) |  |
Upstream | +2.4/-2.4 | +3.1/-3.1
Downstream | +23.7/-23.7 | +14.5/-14.5
Exchange rates (change by +/- 15 HUF/EUR; with fixed crack spreads) |  |
Upstream | +2.2/-2.2 | +10.1/-10.1
Downstream | +0.6/-0.6 | +0.1/-0.1
Refinery margin (change by +/- 1 USD/bbl) |  |
Downstream | +19.5/-19.5 | +19.9/-19.9
1 Clean CCS-based profit / (loss) from operation (EBIT) and its calculation methodology is not regulated by IFRS. Please see the reconciliation of reported profit / (loss) from operation (EBIT) and Clean CCS profit / (loss) from operation (Clean CCS EBIT) with the relevant definitions in the Appendix III. 2 Upstream: the calculation of FX sensitivity was refined in 2023 |  |

|  | MOL Plc. Separate Financial Statements 2023 | 44

c) Borrowings

Accounting policies

All loans and borrowings are initially recognised at the fair value of the consideration received net of issue costs associated with the borrowing. After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the effective interest method.

| 2023 | 2022
| HUF million | HUF million
Long-term debt |  |
Eurobond €650 million due 2027 | 246,830 | 257,605
HUF bond III. HUF 35.500 million due 2031 | 35,425 | 35,415
HUF bond II. HUF 36,600 million due 2030 | 35,151 | 34,958
Finance lease liabilities | 32,040 | 23,608
HUF bond I. HUF 28,400 million due 2029 | 28,552 | 28,576
Schuldschein €130 million due between 2020-2027 | 7,630 | 19,987
Other | 5 | (1)
Total long-term debt | 385,633 | 400,148
Short-term debt |  |
Bank loans | 32,588 | 18,114
Liabilities to subsidiaries | 21,133 | 21,800
Schuldschein €130 million due between 2020-2027 | 11,861 | 180
Finance lease liabilities | 7,029 | 9,418
Eurobond €650 million due 2027 | 964 | 1,009
HUF bond III. HUF 35.500 million due 2031 | 486 | 486
HUF bond II. HUF 36,600 million due 2030 | 161 | 161
HUF bond I. HUF 28,400 million due 2029 | 146 | 146
Eurobond €750 million due 2023 | - | 305,303
Total short-term debt | 74,368 | 356,617
Gross debt (long-term and short-term) | 460,001 | 756,765
Cash and cash equivalents | 144,659 | 309,592
Current debt securities | 3,763 | 830
Net Debt* | 311,579 | 446,343
Total equity | 2,600,591 | 2,473,932
Capital and net debt | 2,912,170 | 2,920,275
Gearing ratio (%)** | 11% | 15%
Profit from operation | 112,749 | 352,499
Depreciation, depletion, amortisation and impairment | 90,781 | 120,073
Reported EBITDA | 203,530 | 472,572
Net Debt / Reported EBITDA | 1.53 | 0.94
*Long-term debt plus Short-term debt less Cash and cash equivalents less Current debt securities, based on the MOL Plc’s capital management policy the other financial liabilities are not included in the Net Debt calculation **Net Debt divided by Net Debt plus Total equity.

The EUR 750 million 7-year maturity fixed-rate Eurobond (coupon 2.625%) issued in 2016 by MOL has been fully repaid along with the last coupon payment on the maturity date in April.

The analysis of the gross debt of MOL Plc. by currencies is the following:

| 31/12/2023 | 12/31/2022
Gross debt by currencies | HUF million | HUF million
EUR | 280,226 | 588,754
HUF | 159,072 | 149,283
USD | 20,703 | 18,728
Gross debt | 460,001 | 756,765

The following issued bonds were outstanding as of 31 December 2023:

| Ccy | Amount Issued (orig ccy, millions) | Amount Issued (HUF million) | Coupon | Type | Cpn Freq | Issue date | Maturity | Issuer
Eurobond | EUR | 650 | 248,807 | 1.5% | Fix | Annual | 08.10.2020 | 08.10.2027 | MOL Plc.
HUF bond | HUF | 28,400 | 28,400 | 2.0% | Fix | Annual | 24.09.2019 | 24.09.2029 | MOL Plc.
HUF bond | HUF | 36,600 | 36,600 | 1.1% | Fix | Annual | 22.09.2020 | 22.09.2030 | MOL Plc.
HUF bond | HUF | 35,500 | 35,500 | 1.9% | Fix | Annual | 12.04.2021 | 12.04.2031 | MOL Plc.

|  | MOL Plc. Separate Financial Statements 2023 | 45

The reconciliation between the total of future minimum lease payments as a lessee and their present value is the following:

| 12/31/2023 | 12/31/2022
| Minimum lease payments | Lease liability | Minimum lease payments | Lease liability
Finance leases as a lessee | HUF million | HUF million | HUF million | HUF million
Due within one year | 8,746 | 7,030 | 10,848 | 9,418
Due later than one year but not later than five years | 34,360 | 30,714 | 11,695 | 19,050
Due later than five years | 2,674 | 1,325 | 5,778 | 4,558
Total | 45,780 | 39,069 | 28,321 | 33,026
Future finance charges | (6,711) | n/a | 4,705 | n/a
Lease liability | 39,069 | 39,069 | 33,026 | 33,026

The reconciliation between the total of future minimum lease payments as a lessor and their present value is the following:

| 12/31/2023 | 12/31/2022
| Minimum lease payments receivable | Lease receivable | Minimum lease payments receivable | Lease receivable
Finance leases as a lessor | HUF million | HUF million | HUF million | HUF million
Due within one year | 542 | 262 | 344 | 275
Due later than one year but not later than five years | 2,683 | 1,465 | 542 | 106
Due later than five years | 3,221 | 2,278 | 1,066 | 868
Total | 6,446 | 4,005 | 1,952 | 1,249
Future finance income/(expenses) | 2,441 | n/a | 703 | n/a
Lease receivable | 4,005 | 4,005 | 1,249 | 1,249

F or other information on lease agreements please refer to Note 5 and Note 8/a.

d) Equity

Accounting policies

Retained earnings and other reserves shown in the financial statements do not represent the distributable reserves for dividend purposes. Reserves for dividend purposes are determined based on the reconciliation of equity prepared in accordance with the Hungarian Accounting Law, which is disclosed in Appendix IV.

Fair valuation reserves

The fair valuation reserve includes the cumulative net change in the fair value of effective cash flow hedges and financial assets at fair value through other comprehensive income.

Equity component of debt and difference in buy-back prices

Equity component of compound debt instruments includes the residual amount of the proceeds from the issuance of the instrument above its liability component, which is determined as the present value of future cash payments associated with the instrument. The equity component of compound debt instruments is recognised when the MOL Plc. becomes party to the instrument.

Treasury Shares

The nominal value of treasury shares held is deducted from registered share capital. Any difference between the nominal value and the acquisition price of treasury shares is recorded directly to retained earnings. In order to consistently distinguish share premium and retained earnings impact of treasury share transactions, repurchase and resale of treasury transactions affect retained earnings instead of having impact on share premium.

Share capital

There was no change in the number of issued shares in 2023. As of 31 December 2023, the issued share capital was HUF 102,429 million, consisting of 819,424,824 series “A” shares with par value of HUF 125, one series “B” share with par value of HUF 1,000 and 578 series “C” shares with par value of HUF 1,001. Outstanding share capital as of 31 December 2023 and 31 December 2022 is HUF 80,723 million and HUF 80,544 million, respectively.

Every “A” class share with a par value of HUF 125 each (i.e. one hundred and twenty-five forint) entitles the holder thereof to have one vote and every “C” class share with a par value of 1,001 each (i.e. one thousand one forint) entitles the holder to have eight and eight thousandth vote, with the following exceptions. Based on the Articles of Association, no shareholder or shareholder group may exercise more than 10% of the voting rights with the exception of organisation(s) acting at the Company’s request as depository or custodian for the Company’s shares or securities representing the Company’s shares.

|  | MOL Plc. Separate Financial Statements 2023 | 46

Series “B” shares are voting preference shares with a par value of HUF 1,000 that entitles the holder thereof to preferential rights as specified in the Articles of Association. The "B" series share is owned by MNV Zrt., exercising ownership rights on behalf of the Hungarian State. The “B” series share entitles its holder to eight votes in accordance with its nominal value. The supporting vote of the holder of “B” series of share is required to adopt decisions in the following matters pursuant to Article 12.4. of the Articles of Association: decision on amending the articles regarding the B series shares, the definition of voting rights and shareholder group, list of issues requiring supermajority at the general meeting as well as Article 12.4. itself; further, the “yes” vote of the holder of “B” series of shares is required to adopt decisions on any proposal not supported by the Board of Directors in the following matters: election and dismissal of the members of the Board of Directors, the Supervisory Board and the auditors, decision of distribution of profit after taxation and amending of certain provisions of the Articles of Association.

Based on the authorisation granted in the Article 17.D of the Articles of Association the Board of Directors is entitled to increase the share capital until 10 April 2024 in one or more instalments by not more than HUF 30 billion in any form and method provided by the Civil Code.

Reserves and retained earnings

Between 2023 and 2026 MOL Plc plans to spend more than HUF 100 billion on capital expenditures, therefore it created HUF 100 billion development reserve based on the paragraph 7 of Act LXXXI of 1996 on corporate tax and dividend tax, which amount is transferred from the retained earnings to tied-up reserves on 31 December 2022. In 2023 HUF 43,177 million was used up for several projects, the balance of the tied-up reserves is HUF 56,823 million on 31 December 2023.

Changes in the number of ordinary, treasury and authorised shares:

Series “A” and “B” shares | Number of shares issued | Number of treasury shares | Shares under repurchase obligation | Shares under retransfer agreement | Number of shares outstanding | Authorised number of shares
01 Jan 2022 | 819,424,825 | (26,532,315) | (114,222,907) | (30,737,356) | 647,932,247 | 1,059,424,825
Share distribution for the members of the Board of Directors and participants of MRP | - | 190,625 | - | - | 190,625 | -
Settlement of share option agreement with Commerzbank A.G. | - | (9,844,626) | 9,844,626 | - | - | -
Settlement of share option agreement with ING Bank N.V. | - | (2,438,875) | 2,438,875 | - | - | -
Settlement of share option agreement with Unicredit Bank A.G. | - | 6,872,214 | (6,872,214) | - | - | -
MOL share purchase from MOL Vagyonkezelő Kft. | - | (10,387,994) | - | - | - | -
Treasury shares sold to MOL Plc. SESOP Organizations | - | 6,609,424 | - | 0 | 6,609,424 | -
31 Dec 2022 | 819,424,825 | (35,531,547) | (108,811,620) | (30,737,356) | 654,732,296 | 1,059,424,825
Share distribution for the members of the Board of Directors and participants of MRP | - | 1,431,297 | - | - | 1,431,297 | -
Settlement of share option agreement with ING Bank N.V. | - | (3,353,987) | 3,353,987 | - | - | -
Settlement of share option agreement with Unicredit Bank A.G. |  | (3,704,188) | 3,704,188 |  |  |
31 Dec 2023 | 819,424,825 | (41,158,425) | (101,753,445) | (30,737,356) | 656,163,593 | 1,059,424,825
Series “C” shares |  |  |  |  |  |
31 Dec 2022 | 578 | - | - | - | 578 | 578
31 Dec 2023 | 578 | - | - | - | 578 | 578

The par value of the treasury shares owned by MOL Plc. is HUF 21,885 million (31 December 2022: HUF 21,706 million).

Dividend

In April 2023 the Board of Directors on behalf of the 2023 Annual General Meeting of MOL Plc. approved to pay HUF 279,751 million dividend in respect of 2022, which equals to HUF 354.26 dividend per share.

The total amount of reserves legally available for distribution based on the reconciliation of equity (see Appendix IV. f)) is HUF 2,243,360 million as of 31 December 2023 (31 December 2022: HUF 2,081,599 million).

|  | MOL Plc. Separate Financial Statements 2023 | 47

The approved dividend (HUF 279,751 million) and the dividend shown in the statement of changes in equity (HUF 224,435 million) are different because the following movements are not presented as dividend payments: dividend of shares under retransfer agreement (HUF 15,225 million) represents in substance MOL's contribution to social responsibility activities and therefore charged to the statement of profit or loss; dividend of shares under put and call option transactions (HUF 21,847 million) presented as a decrease in financial liability; dividends of shares in OTP-MOL swap agreement (HUF 14,200 million) presented as change in fair value of derivative instruments, dividend towards MOL Plc.’s Employee Share Ownership Programme Organisation (HUF 4,044 million) has no effect on the statement of financial position because the organisation is consolidated to the group.

Treasury share put and call option transactions

MOL Plc. has two option agreements concluded with financial institutions in respect of 61,669,435 pieces of series “A” shares (“Shares”) as of 31 December 2023. Under the agreements, MOL Plc. holds American call options and the financial institutions hold European put options in respect of the Shares. The expiry of both the put and call options are identical. (More information about the treasury shares with put&call options are included in Note 18.)

Counterparty | Underlying pieces of MOL ordinary shares | Strike price per share | Expiry
ING Bank N.V. | 30,927,069 | EUR 7.5819 | 24 Jun 2024
UniCredit Bank AG | 30,742,366 | EUR 7.1746 | 24 Jun 2024

MOL agreed with ING Bank N.V. (“ING”) on 20 June 2023, that the option rights in relation to 34,281,056 MOL Series “A” Ordinary shares (“Shares”) under the share option agreement executed between ING and MOL on 20 June 2022 are either fully cash settled or partly physically and partly cash settled on 23 June 2022. Simultaneously, MOL and ING entered into a new share option agreement. According to the new share option agreement MOL received American call options and ING received European put options in relation to 30,927,069 Shares, with the effective date of 27 June 2023. The maturity date of both the call and put options is 24 June 2024, and the strike price of both options is EUR 7.5819 per Share.

MOL agreed with UniCredit Bank AG (“UniCredit”) on 20 June 2023, that the option rights in relation to 34,446,554 MOL Series “A” Ordinary shares (“Shares”) under the share option agreement executed between UniCredit and MOL on 20 June 2022 are either fully cash settled or partly physically and partly cash settled on 23 June 2022. Simultaneously, MOL and UniCredit entered into a new share option agreement. According to the new share option agreement MOL received American call options and UniCredit received European put options in relation to 30,742,366 Shares, with the effective date of 27 June 2023. The maturity date of both the call and put options is 24 June 2024, and the strike price of both options is EUR 7.1746.

Treasury shares sold to MOL Plc. SESOP Organizations

On 27 of January 2022, based on the authorisation of the Extraordinary General Meeting of the Company held on 22 December 2021 MOL have sold 3,304,712 pieces of „A” Series MOL Ordinary Shares (“MOL Shares”) to MOL Plc. SESOP Organization 2021-1 and 3,304,712 pieces of MOL Shares to MOL Plc. SESOP Organization 2021-2.

Share swap agreement with OTP

MOL Plc. and OTP entered into a share-exchange and a share swap agreement in 2009. Under the agreements, initially MOL transferred 40,084,008 “A” series MOL ordinary shares to OTP in return for 24,000,000 pieces OTP ordinary shares. The agreement contains settlement provisions in case of certain movement of relative share prices of the parties, subject to net cash or net share settlement. The agreement, concluded on 16 April 2009 has been further extended in 2022 until 11 July 2027, which did not trigger any movement in MOL Plc.’s treasury shares.

Until the expiration date each party can initiate a cash or physical (i.e. in shares) settlement of the deal.

|  | MOL Plc. Separate Financial Statements 2023 | 48

18. Financial instruments

|  | Fair value through profit or loss | Amortised cost | Fair value through other comprehensive income | Total carrying amount
12/31/2023 |
Carrying amount of financial instruments |  | HUF million | HUF million | HUF million | HUF million
Financial assets |  |  |  |  |
Other non-current financial assets | Loans given | - | 39,284 | - | 39,284
Finance lease receivables | - | 3,742 | - | 3,742
Commodity derivatives | 1,001 | - | - | 1,001
Debt securities |  |  | 62,321 | 62,321
Total non-current financial assets | 1,001 | 43,026 | 62,321 | 106,348
Trade and other receivables | - | 390,636 | - | 390,636
Debt securities |  | - | - | 3,763 | 3,763
Other current financial assets | Loans given | - | 181 | - | 181
Commodity derivatives | 15,245 | - | - | 15,245
Finance lease receivables | - | 262 | - | 262
Other derivatives | 3,700 |  |  | 3,700
Other | - | 6,062 | - | 6,062
Cash and cash equivalents | - | 144,659 | - | 144,659
Total current financial assets |  | 18,945 | 541,800 | 3,763 | 564,508
Total financial assets |  | 19,946 | 584,826 | 66,084 | 670,856
Financial liabilities |  |  |  |  |
Borrowings |  | - | 353,594 | - | 353,594
Finance lease liabilities |  | - | 32,039 | - | 32,039
Other non-current financial liabilities | Commodity derivatives | 186 | - | - | 186
Other | - | 59 | - | 59
Total non-current financial liabilities | 186 | 385,692 | n/a | 385,878
Borrowings |  | - | 67,338 | - | 67,338
Finance lease liabilities |  | - | 7,030 | - | 7,030
Trade and other payables | - | 368,029 | - | 368,029
Other current financial liabilities | Cash-pool liabilities | - | 684,426 | - | 684,426
Transferred "A" shares with put&call options* | - | 169,474 | - | 169,474
Commodity derivatives | 9,188 | - | - | 9,188
Other derivatives | - | - | - | -
Other | - | 1,017 | - | 1,017
Total current financial liabilities | 9,188 | 1,297,314 | n/a | 1,306,502
Total financial liabilities |  | 9,374 | 1,683,006 | n/a | 1,692,380
*More information about the transferred “A” shares with put&call options are included in the Note 17 D).

|  | MOL Plc. Separate Financial Statements 2023 | 49

| Fair value through profit or loss | Amortised cost | Fair value through other comprehensive income | Total carrying amount
12/31/2022
Carrying amount of financial instruments | HUF million | HUF million | HUF million | HUF million
Financial assets |  |  |  |  |
Other non-current financial assets | Loans given | - | 50,001 | - | 50,001
Finance lease receivables | - | 974 | - | 974
Commodity derivatives | 6,513 | - | - | 6,513
Debt securities | - | - | 41,104 | 41,104
Total non-current financial assets | 6,513 | 50,975 | 41,104 | 98,592
Trade and other receivables | - | 505,842 | - | 505,842
Debt securities |  | - | - | 830 | 830
Other current financial assets | Loans given | - | 2,558 | - | 2,558
Commodity derivatives | 41,331 | - | - | 41,331
Finance lease receivables | - | 275 | - | 275
Other derivatives | 650 | - | - | 650
Other | - | 8,081 | - | 8,081
Cash and cash equivalents | - | 309,592 | - | 309,592
Total current financial assets |  | 41,981 | 826,348 | 830 | 869,159
Total financial assets |  | 48,494 | 877,323 | 41,934 | 967,751
Financial liabilities |  |  |  |  |
Borrowings |  | - | 376,540 | - | 376,540
Finance lease liabilities |  | - | 23,608 | - | 23,608
Other non-current financial liabilities | Commodity derivatives | - | - | - | -
Other | - | 305 | - | 305
Total non-current financial liabilities | - | 400,453 | n/a | 400,453
Borrowings |  | - | 347,199 | - | 347,199
Finance lease liabilities |  | - | 9,418 | - | 9,418
Trade and other payables | - | 484,262 | - | 484,262
Other current financial liabilities | Cash-pool liabilities | - | 586,250 | - | 586,250
Transferred "A" shares with put&call options* | - | 179,573 | - | 179,573
Commodity derivatives | 23,131 | - | - | 23,131
Other derivatives | - | - | - | -
Other | - | 25,304 | - | 25,304
Total current financial liabilities | 23,131 | 1,632,006 | n/a | 1,655,137
Total financial liabilities |  | 23,131 | 2,032,459 | n/a | 2,055,590
*More information about the transferred “A” shares with put&call options are included in the Note 17 D).

The MOL Plc. does not have any instrument that the MOL Plc. designated upon initial recognition as at fair value through profit or loss in order to reduce a measurement or recognition inconsistency.

The MOL Plc. does not have any financial instrument whose classification has changed as a result of amendments in business model categorization.

The fair values of financial instruments measured at amortised cost approximate their carrying amounts except for the issued bonds. The fair value of the issued bonds is HUF 296,929 million, while their carrying amount is HUF 347,715 million as of 31 December 2023 (31 December 2022: fair value was HUF 574,113 million, carrying amount was HUF 663,658 million). HUF 225,075 million of the fair value of the issued bonds is categorised as Level 1 and HUF 71,854 million is categorised as Level 2. (Classification of the debt securities are Level 2 fair value category. See note 19).

MOL Plc. uses several valuation techniques to determine the fair value of the financial instruments. The fair value of commodity derivatives is determined based on the present value of estimated future cash-flows using observable forward prices. The fair value of debt instruments is calculated by discounting the present value of estimated future cash-flows with observable zero coupon bond yield curves adjusted with issuer-specific credit risk factors. The most significant item among debt securities are bonds issued by listed entities and banks. For the changes in the other comprehensive income due to the valuation of debt instruments please refer to Note 7.

Impairment only accounted for on trade receivables and loans given. No impairment is recognised on the remaining financial instruments based on materiality, history, expectations and change in credit risk.

Contract assets and contract liabilities from contracts with customers are not material for MOL Plc.

|  | MOL Plc. Separate Financial Statements 2023 | 50

19. Fair value measurement of financial instruments

| 12/31/2023 | 12/31/2022
| Level 2 Valuation techniques based on observable market input | Total fair value | Level 2 Valuation techniques based on observable market input | Total fair value
Fair value hierarchy | HUF million | HUF million | HUF million | HUF million
Financial assets |  |  |  |
Debt securities | 66,084 | 66,084 | 41,934 | 41,934
Commodity derivatives | 16,247 | 16,247 | 47,844 | 47,844
Other derivatives | 3,700 | 3,700 | 650 | 650
Total financial assets recognised at fair value | 86,031 | 86,031 | 90,428 | 90,428
Financial liabilities |  |  |  |
Commodity derivatives | 9,328 | 9,328 | 23,131 | 23,131
Other derivatives | 46 | 46 | - | -
Total financial liabilities recognised at fair value | 9,374 | 9,374 | 23,131 | 23,131

Neither in 2023 nor in 2022, MOL Plc. had any instruments with fair value categorised as Level 1 (Unadjusted quoted prices in active markets) and Level 3 (valuation techniques based on significant unobservable market input).

20. Trade and other receivables

Accounting policies

Trade and other receivables are amounts due from customers for goods sold and services performed in the normal course of business, as well as other receivables such as margining receivables. Trade receivables are recognised at transaction price if they do not contain a significant financing component . A provision for impairment is made for full-lifetime expected credit losses using the simplified approach. MOL Plc. calculates the expected credit loss on trade receivables as the average of yearly historical loss rates of the last three years multiplied by the forward-looking element. The forward-looking element is based on positive correlation between banking sector credit losses and one year lag of unemployment rate. Impaired receivables are derecognised when they are assessed as uncollectible.

If collection of trade receivables is expected within the normal business cycle which is one year or less, they are classified as current assets. In other cases, they are presented as non-current assets.

| 12/31/2023 | 12/31/2022
Trade and other receivables | HUF million | HUF million
Trade receivables | 300,791 | 346,604
Other receivables | 89,845 | 159,238
Total | 390,636 | 505,842

| 12/31/2023 | 12/31/2022
Trade receivables | HUF million | HUF million
Trade receivables (gross) | 302,342 | 347,479
Loss allowance for receivables | (1,551) | (875)
Total | 300,791 | 346,604

The gross amount of trade receivables decreased mainly due to the decrease in net sales due to lower fuel and gas prices.

Loss rates are based on actual credit loss experience over the past three years. 3-year average historical loss rate is 0.031% in 2023 (0.064% in 2022).

These rates are adjusted by forward looking element to reflect differences between economic conditions. In 2023 expected credit loss rate is 0.07% (0.15% in 2022).

|  | MOL Plc. Separate Financial Statements 2023 | 51

| 2023 | 2022
Movements in the allowance for doubtful trade receivables | HUF million | HUF million
At 1 January | 875 | 1,082
Additions | 981 | 498
Reversal | (1) | (140)
Amounts written off | (304) | (526)
Foreign exchange differences | 0 | (39)
At 31 December | 1,551 | 875

| 12/31/2023 | 12/31/2022
| Gross book value | Net book value | Gross book value | Net book value
Ageing analysis of trade receivables | HUF million | HUF million | HUF million | HUF million
Not past due | 283,210 | 282,558 | 298,102 | 297,674
Past due | 19,132 | 18,233 | 49,377 | 48,930
Within 180 days | 18,754 | 18,559 | 48,434 | 48,382
Over 180 days | 378 | (326) | 943 | 548
Total | 302,342 | 300,791 | 347,479 | 346,604

21. Cash and cash equivalents

Accounting policies

Cash includes cash on hand and cash at banks. Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash and that are subject to an insignificant risk of change in value. MOL Plc. considers the term “insignificant risk of change in value” not being limited to three-month period.

| 12/31/2023 | 12/31/2022
| HUF million | HUF million
Short-term bank deposits | 103,630 | 272,909
Demand deposit | 33,807 | 31,581
Cash on hand | 7,222 | 5,102
Total | 144,659 | 309,592

Cash and cash equivalents pledged as security

The carrying amount of cash and cash equivalents pledged as security for liabilities is HUF 333 million as of 31 December 2023 (31 December 2022: HUF 904,4 million).

|  | MOL Plc. Separate Financial Statements 2023 | 52

Other financial information

This section includes additional financial information that are either required by the relevant accounting standards or management considers these to be material information for shareholders.

22. Commitments and contingent liabilities

Accounting policies

Contingent liabilities are not recognised in the separate financial statements. They are disclosed in the notes unless the possibility of an outflow of resources embodying economic benefits is remote. A contingent asset is not recognised in the separate financial statements but disclosed when an inflow of economic benefits is probable.

a) Guarantees

The total value of guarantees undertaken to related parties is HUF 325,641 million in 2023 and HUF 423,201 million in 2022. The value of third-party guarantees which are bank guarantees is HUF 932,935 million in 2023 and HUF 845,599 million in 2022.

b) Capital and Contractual Commitments

The total value of capital commitments as of 31 December 2023 is HUF 35,221 million (31 December 2022: HUF 31,336 million). The most significant amounts contractual and investment obligations are attached to expanding the capacity of the Maleic Anhydride Unit at Danube Refinery (HUF 10,353 million).

As part of corporate social responsibility MOL Plc. is committed to spending HUF 755 million via sponsorship agreements in the next year.

MOL Plc. has a take-or-pay contract with JANAF in amount of HUF 14,388 million. Also, contingent liability exists from crude oil contract with INA in the amount of HUF 31,180 million by promissory note.

c) Unrecognised lease commitments

| 12/31/2023 | 12/31/2022
Unrecognised lease commitments* | HUF million | HUF million
Due within one year | 20,305 | 13,542
Due later than one year but not later than five years | - | -
Due later than five years | - | -
Total | 20,305 | 13,542
*Lease commitments for short-term leases and leases of low-value assets. |  |

d) Authority procedures, litigation

General

None of the litigations described below have any impact on the accompanying separate financial statements except as explicitly noted. MOL Plc. is party to a number of civil actions arising in the ordinary course of business. Currently, no further litigation exists that could have a material adverse effect on the financial condition, assets, results or business of MOL Plc.

The value of litigation where MOL Plc. acts as defendant is HUF 3 million for which HUF 2 million provision has been made.

ICSID arbitration (MOL Plc. vs. Croatia)

The International Centre for Settlement of Investment Disputes (ICSID) delivered its verdict in the arbitration case between the Republic of Croatia and MOL Plc. on the 5 July, 2022. MOL filed a request for arbitration against Croatia in 2013 for breaching contractual obligations on multiple occasions under the agreements signed between the parties in 2009 mainly concerning gas trading.

The ICSID award clearly states that Croatia’s bribery related allegations are unfounded. The three-member council unanimously rejected Croatia’s objection that the 2009 agreements were a result of criminal conduct. Similarly, to the UNCITRAL Tribunal in 2016, this international judicial forum also characterized the story of the Croatian criminal proceedings’ crown witness as weak and full of contradictions. Furthermore, the court expressed strong doubts about the truthfulness and reliability both in the arbitral and criminal proceedings in Zagreb. According to the ruling of the arbitration tribunal Croatia caused substantial damages to INA, and thus indirectly to MOL by failure to take over the gas trading business of INA as well as by breaching contractual obligations of natural gas pricing and royalty rate increases, thus awarding MOL with damages in the amount of USD 167.8 million. The tribunal awarded a further USD 16.1 million in damages caused by Croatia by forcing the sale of stored natural gas of INA’s subsidiary (Prirodni Plin). Together with interest MOL was awarded a total of around USD 236 million in damages. In 2023 an enforcement procedure was initiated due to non-payment of the awarded amount.

|  | MOL Plc. Separate Financial Statements 2023 | 53

The contingent asset has not been recognized in the Statement of Financial Position.

e) Environmental liabilities

MOL Plc.’s operations are subject to the risk of liability arising from environmental damage or pollution and the cost of any associated remedial work. MOL Plc. is currently responsible for significant remediation of past environmental damage relating to its operations. Accordingly, MOL Plc. has established a provision of HUF 7,460 million for the estimated cost as at 31 December 2023 for probable and quantifiable costs of rectifying past environmental damage (see Note 13). Although the management believes that these provisions are sufficient to satisfy such requirements to the extent that the related costs are reasonably estimable, future regulatory developments or differences between known environmental conditions and actual conditions could cause a revaluation of these estimates.

In addition, some of MOL Plc.’s premises may be affected by contamination where the cost of rectification is currently not quantifiable or legal requirement to do so is not evident. The main case where such contingent liabilities may exist is the Tiszaújváros site, including both the facilities of MOL Petrochemicals Plc. and area of MOL’s Tisza refinery, where MOL Plc. has identified significant underground water and subsurface soil contamination. In accordance with the resolutions of the regional environmental authorities, MOL Plc. completed a detailed investigation and submitted the results and technical specifications to the authorities in July 2021. Based on these documents the authorities brought a resolution on 7 September 2021 requiring MOL Plc. to perform this plan in order to manage the soil and underground water contamination. The total amount of liabilities originating from this plan can be estimated properly and MOL Plc. sets the required amount of environmental provision.

Furthermore, the technology applied in oil and gas exploration and development activities by the MOL Plc.’s Hungarian predecessor before 1995 may give rise to future remediation of drilling mud produced (in 1995 there was modification in the drilling technology). In accordance with legal requirements the treatment (extraction and disposal) of the resulting pollutant is required. The existence of such obligation, and consequently the potential expenditure associated with it is dependent on the extent, volume and composition of drilling mud left behind at the numerous production sites. According to current estimates the amount of the environmental liability is HUF 1,357 million (31 December 2022: HUF 791 million).

23. Notes to the statement of cash flows

Accounting policies

Bank overdrafts repayable on demand are included as component of cash and cash equivalent in case where the use of short‑term overdrafts forms an integral part of the entity’s cash management practices.

Analysis of Other items related to the Cash flows from operations before changes in working capital:

| 2023 | 2022
Analysis of other items | HUF million | HUF million
Transferred "A" shares with put&call options | 11,619 | 19,131
Write-off of inventories, net | 4,273 | 6,594
Write-off of receivables, net | 907 | 340
Share-based payments | (14) | 2,640
Realised and unrealised (gain) / loss of fair valuation of commodity derivatives | (5,167) | 94,509
Other non-highlighted items | (141) | 15
Total | 11,477 | 123,229

|  | MOL Plc. Separate Financial Statements 2023 | 54

Analysis of the cash flows from financing activities:

| 12/31/2022 balance | Cash flows used in financing activities | Acquisition/ Disposals | Realised and non-realised FX | FV change on derivatives | Accrued Interest | Liabilities to subsidiaries | New lease liabilities | 12/31/2023 balance
| HUF million | HUF million | HUF million | HUF million | HUF million | HUF million | HUF million | HUF million | HUF million
Long-term debt | 400,148 | (145,710) | - | (13,358) | - | 158,816 | - | (14,263) | 385,633
Short-term debt | 356,617 | (356,107) | - | 73,731 | - | 88 | - | 39 | 74,368
Other current financial liabilities | 814,258 | 37,984 | - | 11,909 | (46) | - | - | - | 864,105
Total Cash flows used in financing activities from financial liabilities |  | (463,833) |  |  |  |  |  |  |
Other items impacting Cash flows used in financing activities 1 |  | (220,541) | - |  |  |  |  |  |
Total Cash flows used in financing activities |  | (684,374) | - |  |  |  |  |  |
1 HUF 224,386 million from Other items impacting Cash flows Used in financing activities is Dividends paid to owners.

The total cash outflow for leases in the period is HUF 20,041 million.

24. Related party transactions

a) Transactions with subsidiaries in the normal course of business

| 12/31/2023 | 12/31/2022
| HUF million | HUF million
Loans given | 5,180 | 7,498
Loans received | 2,573 | 753,571

| 12/31/2023 | 12/31/2022
| HUF million | HUF million
Trade receivables | 124,508 | 31,828
Trade payables | 94,342 | 122,483

| 12/31/2023 | 12/31/2022
| HUF million | HUF million
Other receivables, other financial assets and other current assets | 214,348 | 294,623
Other payables, other financial assets and other current liabilities | 584,856 | 75,381

| 2023 | 2022
| HUF million | HUF million
Net sales | 1,069,536 | 1,191,571
Other operating income | 8,486 | 3,312
Finance income | 379,218 | 403,301
from which |  |
dividend | 375,456 | 313,394
interests | 1,397 | 1,508
Finance expense | 166,967 | 97,717
from which |  |
impairment of investments, loss of capital decrease and loss of loan receivables | 24,507 | 39,594
interests | 142,814 | 75,194

|  | MOL Plc. Separate Financial Statements 2023 | 55

b) Transactions with associated companies in the normal course of business

| 12/31/2023 | 12/31/2022
| HUF million | HUF million
Trade and other receivables due from related parties | 7,583 | 5,433
Trade and other payables due to related parties | 1,360 | 2,308
Net sales to related parties | 3,690 | 5,522

MOL Plc. purchased and sold goods and services with associated companies during the ordinary course of business in 2023 and 2022. All of these transactions were conducted under market prices and conditions.

c) Guarantees

See note 22. Commitments and contingent liabilities a) Financial contingent liabilities.

d) Remuneration of the members of the Board of Directors

Directors’ remuneration approximated HUF 156 million in 2023 (2022: HUF 145 million). In addition, the directors participate in a long-term incentive scheme details of which are given in Note 4.

Directors are remunerated with the following net amounts in addition to the incentive scheme:

• Executive and non-executive directors | 25,000 EUR / year
• Committee chairmen | 31,250 EUR / year

In case the position of the Chairman is not occupied by a non-executive director, it is the non-executive vice Chairman who is entitled to this payment. Directors who are not Hungarian citizens and do not have permanent address in Hungary are provided with EUR 1,500 on each Board meeting (maximum 15 times a year) when travelling to Hungary.

e) Number of shares held by the members of the Board of Directors, Chief Executives’ Committee, and the Management

| 2023 | 2022
| Number of shares | Number of shares
Board of Directors | 4,972,405 | 2,903,184
Chief Executives' and Management Committee (except Board of Directors members) | 250,000 | 250,000
Senior Management (except Board of Directors, Chief Executives', Supervisory Board and Management Committee members) | 19,618 | 233,305
Total | 5,242,023 | 3,386,489

f) Transactions with Management, officers and other related parties

In 2023 entities controlled by the members of key management personnel purchased fuel and other retail services from MOL Plc. in the total value of HUF 4,455 million (2022: HUF 3,857 million). MOL Plc. provided subsidies through sponsorship for sport organisations controlled by key management personnel in the total value of HUF 720 million (2022: HUF 642 million). MOL Plc. purchased other services (business operations related services) from companies controlled by key management personnel in the total value of HUF 2,525 (2022: HUF 1,535 million) million.

Entities controlled by key management personnel hold 3,793,145 shares (2022: 2,100,000 shares).

g) Key management compensation

The amounts disclosed contain the compensation of managers who qualify as a key management member of MOL Plc.

| 2023 | 2022
| HUF million | HUF million
Salaries and wages | 1,204 | 958
Other short-term benefits | 421 | 896
Share-based payments | 553 | 331
Total | 2,178 | 2,185

|  | MOL Plc. Separate Financial Statements 2023 | 56

h) Loans to the members of the Board of Directors and Supervisory Board

No loans have been granted to key management personnel.

25. Events after the reporting period

a) MOL, Volánbusz, MÁV and Waberer's strategic cooperation

In January of 2024, the MOL signed the strategic cooperation agreement with national autobus transportation provider VOLÁNBUSZ; MÁV, the national railway company, and WÁBERER’s, the leading Hungarian innovative logistics provider to join efforts for the development of the hydrogen economy. In the framework of the cooperation, MOL will investigate opportunities for green hydrogen production, applicable in industry and mobility, coordinate our development activities and project proposals. Also, will explore concepts to boost the growth of hydrogen fuel cell technology in mobility, as well as the infrastructure supporting it.

b) Agreement with Újpest 1885 Futball Llc.

An agreement has been reached between MOL Asset Management Ltd. And Újpest 1885 Football Ltd., under which the MOL Plc.’s subsidiary will acquire a majority stake in the company operating Újpest Football Club. The closing of the transaction and the actual change of ownership is expected to take place by the end of April 2024.

MOL's aim is to provide long-term support to Újpest FC as a trustworthy owner in order to build a future worthy of the club's illustrious past in the ever-evolving Hungarian football scene.

The arrival of the new owner will open up new horizons, resources and opportunities for the club, which can be one of the foundations for development and success.

MOL has always been a committed supporter of Hungarian sport and football. As the most popular team sport, football has played a distinguished role in Hungarian sport, MOL is one of the biggest sponsors of the sport and a key partner of the Hungarian Football Association and the men's national team.

c) Waste management joint company in Budapest region with Budapest Public Utilities Ltd. (BKM)

On 22 November 2022 MOL Plc. and BKM Ltd. have reached an alignment regarding the set-up of MOHU Budapest Ltd., a 50-50% owned company to provide waste management services in the Budapest region. In 2024 March the Board of Directors approved the transaction by which BKM Ltd. will contribute the collection and transportation assets to MOHU Budapest Ltd. while MOL Plc. will inject the equivalent amount in cash. Besides the collection and transportation services MOHU Budapest Ltd. will also operate the industrial-scale waste incinerator and the waste disposal site located in Pusztazámor, both of them are essential to manage waste generated in the Budapest region.

|  | MOL Plc. Separate Financial Statements 2023 | 57

26. Appendices

Appendix I.: Issued but not yet effective International Financial Reporting Standards and Amendments

At the date of authorisation of these financial statements, the following standards and interpretations were in issue but not yet effective:

• Amendments to IFRS 16 Leases: Lease Liability in a Sale and Leaseback (effective for annual periods beginning on or after 1 January 2024 and endorsed by EU)

• Amendments to IAS 1 Presentation of Financial Statements: Classification of Liabilities as Current or Non-current, Classification of Liabilities as Current or Non-current - Deferral of Effective Date and Non-current Liabilities with Covenants (effective for annual periods beginning on or after 1 January 2024 and endorsed by EU)

• Amendments to IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments: Disclosures: Supplier Finance Arrangements (effective for annual periods beginning on or after 1 January 2024 not yet endorsed by EU)

• Amendments to IAS 21 The Effects of Changes in Foreign Exchange Rates: Lack of Exchangeability (effective for annual periods beginning on or after 1 January 2025 not yet endorsed by EU)

MOL is in the process of evaluating the impact of these amendments. They are not expected to have a significant effect on future financial reporting.

|  | MOL Plc. Separate Financial Statements 2023 | 58

Appendix II.: Investments in subsidiaries, associated companies and joint ventures

|  |  | Carrying value | Direct ownership
Company name | Country | Range of activity | 12/31/2023 | 12/31/2022 | 12/31/2023 | 12/31/2022
|  |  | HUF million | HUF million | % | %
MOL Group Finance Zrt. | Hungary | Investment management | 492,709 | 492,709 | 100% | 100%
MOL Crossroads B.V. | Netherlands | Financial holding | 434,275 | 434,275 | 100% | 100%
INA d.d. | Croatia | Integrated oil and gas company | 423,096 | 423,096 | 49% | 49%
MOL Petrolkémia Zrt. | Hungary | Petrochemical production and trading | 405,089 | 405,164 | 100% | 100%
Slovnaft a.s. | Slovakia | Refinery and marketing of oil and petrochemical products | 233,867 | 233,867 | 100% | 100%
MOL Ingatlan Holding Kft. | Hungary | Investment management | 142,234 | 142,234 | 100% | 100%
FGSZ Földgázszállító Zrt. | Hungary | Natural gas transmission | 83,589 | 83,589 | 100% | 100%
Pearl Petroleum Company Ltd. | British Virgin Islands | Oil and gas exploration, production and transportation | 74,837 | 74,837 | 10% | 10%
MOL Retail Holding Kft. | Hungary | Real estate management | 56,151 | 56,151 | 100% | 100%
MOL Vagyonkezelő Kft. | Hungary | Investment management | 56,083 | 56,083 | 100% | 100%
MNS Oil&Gas B.V. | Netherlands | Exploration financing | 83,869 | 83,869 | 100% | 100%
MOL Romania PP Srl. | Romania | Retail and wholesale trade of fuels and lubricants | 39,239 | 39,239 | 100% | 100%
MOL Slovenia DS Investment BV | Netherlands | Investment management | 32,366 | 32,366 | 100% | 100%
TIFON d.o.o. | Croatia | Retail trade of fuels and lubricants | 31,384 | 31,384 | 100% | 100%
MH Oil and Gas B.V. | Netherlands | Investment management | - | - | 100% | 100%
MOL Serbia (Intermol) d.o.o. | Serbia | Retail trade of fuels and lubricants | 22,003 | 22,003 | 100% | 100%
MOL (FED) Kazakhstan B.V. | Netherlands | Exploration financing | 20,726 | 20,726 | 100% | 100%
Zväz pre skladovanie zásob, a.s. | Slovakia | Wholesale and retail trade, warehousing | 16,667 | 16,667 | 90% | 90%
MOL Reinsurance Co. | Ireland | Captive insurance | 15,790 | 15,790 | 100% | 100%
Leodium Kft. | Hungary | Financial services | 26,389 | 19,430 | 100% | 100%
MOL Industrial Services Investment Kft. | Hungary | Investment management | 12,162 | 12,162 | 100% | 100%
MOL Nordsjön B.V. | Netherlands | Exploration financing | 10,729 | 11,609 | 100% | 100%
MOL CVC Investment Kft. | Hungary | Investment management | 18,558 | 18,558 | 100% | 100%
MOL Magyarország Szolgáltató Központ Kft. | Hungary | Business services | 9,514 | 9,514 | 100% | 100%
MOL CZ Downstream Investment B.V. | Netherlands | Investment management | 6,971 | 6,971 | 15% | 15%
MOL Austria GmbH. | Austria | Wholesale trade of lubricants and oil products | 5,365 | 5,365 | 100% | 100%
FER Tűzoltóság és Szolgáltató Kft. | Hungary | Fire service, ambulance service | 3,170 | 3,170 | 100% | 100%
Neptunus Investment Kft. | Hungary | Investment management | 3,304 | 2,913 | 100% | 100%
Fresh Corner Restaurant Holding Kft. | Hungary | Property management | 2,802 | 2,802 | 100% | 100%
MOL Fleet Holding Kft. | Hungary | Investment management | 2,657 | 2,657 | 100% | 100%
Tápió Szénhidrogén Koncessziós Kft. | Hungary | Exploration and production activity | 2,640 | 2,640 | 100% | 100%
MOL LUB Kft. | Hungary | Production and trade of lubricants | 2,603 | 2,603 | 100% | 100%
Csanád Szénhidrogén Koncessziós Kft. | Hungary | Exploration and production activity | 2,280 | 2,280 | 100% | 100%
Geofizikai Szolgáltató Kft. | Hungary | Engineering activity, engineering consultancy | 1,882 | 1,882 | 100% | 100%
MOL E-mobilitás Vagyonkezelő Kft. | Hungary | Electrical traffic solutions | - | 1,642 | 100% | 100%
Dunai Vízmű Zrt. | Hungary | Water production, -treatment, -supply | 111 | 111 | 33% | 33%
MOLTRADE-Mineralimpex Zrt. | Hungary | Importing and exporting of energetical products | 1,340 | 1,340 | 100% | 100%
MOL Aréna Kft. | Hungary | Investment management | 1,298 | 1,298 | 100% | 100%
Geoinform Kft. | Hungary | Hydrocarbon exploration | 1,125 | 1,129 | 100% | 100%
MOL Investment Kft. | Hungary | Financial services | 728 | 728 | 100% | 100%
MOL Somogyvámos Szénhidrogén Koncessziós Kft. | Hungary | Exploration and production activity | 514 | 637 | 100% | 100%
MOL Pakistan Oil and Gas Co B.V. | Netherlands | Exploration financing | 671 | 671 | 100% | 100%
MOLTRANS Kft. | Hungary | Transportation services | 624 | 625 | 100% | 100%

|  | MOL Plc. Separate Financial Statements 2023 | 59

|  |  | Carrying value | Direct ownership
Company name | Country | Range of activity | 12/31/2023 | 12/31/2022 | 12/31/2023 | 12/31/2022
|  |  | HUF million | HUF million | % | %
MOL Bucsa Szénhidrogén Koncessziós Kft. | Hungary | Exploration and production activity | 297 | 569 | 100% | 100%
MOL Germany GmbH | Germany | Trading of oil products | 9,807 | 556 | 100% | 100%
MOL Bázakerettye Szénhidrogén Koncessziós Kft. | Hungary | Exploration and production activity | 531 | 531 | 100% | 100%
MOL IT Holding Kft. | Hungary | Financial holding | 538 | 538 | 100% | 100%
Budapesti Értéktőzsde Zrt. | Hungary | Stock exchange | 431 | 431 | 2% | 2%
MOL Zala-Nyugat Szénhidrogén Koncessziós Kft. | Hungary | Exploration and production activity | - | 382 | 100% | 100%
MOL Nyírség-Észak Szénhidrogén Koncessziós Kft. | Hungary | Exploration and production activity | 106 | 106 | 100% | 100%
Rossi Biofuel Zrt. | Hungary | Biofuel production | 350 | 350 | 25% | 25%
MOL Nyírség-Dél Szénhidrogén Koncessziós Kft. | Hungary | Exploration and production activity | 253 | 253 | 100% | 100%
MOL Dráva Szénhidrogén Koncessziós Kft. | Hungary | Oil and gas production | 323 | 431 | 100% | 100%
MOL Okány-Nyugat Szénhidrogén Koncessziós Kft. | Hungary | Exploration and production activity | 356 | 356 | 100% | 100%
MOL GBS Magyarország Kft | Hungary | Accounting, bookkeeping and auditing activities, tax consultancy | 227 | 229 | 100% | 100%
MOL SZMDK Szénhidrogén Koncessziós Kft. | Hungary | Oil and gas production | 380 | 503 | 100% | 100%
Panfora Oil&Gas S.r.l. | Romania | Exploration and production activity | - | - | 99% | 99%
KMSZ Kelet-Magyarországi Szénhidrogén Koncessziós Kft. | Hungary | Exploration and production activity | 685 | 185 | 100% | 100%
MOL Group International Services B.V. | Netherlands | Financial and accounting services | 54,401 | 54,401 | 100% | 100%
Petrolszolg Kft. | Hungary | Repairs and maintenance services | 354 | 154 | 100% | 100%
MOL Vendéglátó Kft. | Hungary | Restaurants and mobile food service activities | 330 | 330 | 100% | 100%
RES Zrt. (CEGE Közép-európai Geotermikus Energia Termelő Zrt.) | Hungary | Geothermal energy production | - | 109 | 100% | 100%
MOL RUSS OOO | Russia | Management services | - | - | 100% | 100%
MULTIPONT Program Zrt. | Hungary | Marketing agent activity | 80 | 80 | 100% | 100%
MOL Commodity Trading Kft. | Hungary | Financial services | 60 | 60 | 100% | 100%
MOL Racing Kft. | Hungary | Chemical material refining, filling, retail and wholesale trade | 25 | 25 | 100% | 100%
MOL IT & Digital GBS Kft | Hungary | Computer facilities management activities | 15 | 37 | 100% | 100%
MOL Ukraine Ltd. | Ukraine | Wholesale and retail trade | 41 | 41 | 100% | 100%
Terméktároló Zrt. | Hungary | Oil product storage | 24 | 24 | 74% | 74%
MOL Trading&Shipping SA* | Switzerland | Trading, shipping | - | 28 | 100% | 100%
Alfagas Kft. | Hungary | LPG gas transloading, chemical analysis of incoming gases, issuance of certifications | 23 | 23 | 60% | 60%
MOL-Aspect DNY-Magyarországi Közös Szénhidrogén Kutató és Termelő Kft. | Hungary | Exploration and production activity | 13 | 11 | 50% | 50%
RMB Russ LLC | Russia | Production, marketing and sale of synthetic rubber bitumen | 15 | 15 | 51% | 51%
MOL Biztonsági Szolgáltatások Kft | Hungary | Private security activity | 3 | 3 | 100% | 100%
MOL Magyarország Társasági Szolgáltatások Kft | Hungary | Combined office administrative service activities | 3 | 3 | 100% | 100%
MOL Sustainable Future Holding Kft. | Hungary | Investment management | 9 | 3 | 100% | 100%
Everen Ltd. | Bermuda | Financial services | 3 | 3 | 1% | 1%
EMSZ Első Magyar Koncessziós Kft. | Hungary | Exploration and production activity | - | - | 100% | 100%
MOL Somogybükkösd Szénhidrogén Koncessziós Kft. | Hungary | Exploration and production activity | - | - | 100% | 100%
MOL Jászárokszállás Szénhidrogén Koncessziós Kft. | Hungary | Exploration and production activity | - | - | 100% | 100%
MOL Kunststoff Kft. | Hungary | Investment management | - | - | 100% | 100%
Italiana Energia e Servizi S.p.A. | Italy | Refinery and marketing of oil products | - | - | 100% | 100%
MOL Cameroon B.V. | Netherlands | Exploration financing | - | - | 100% | 100%
MOL Central Asia B.V. | Netherlands | Exploration and production activity | 62 | 38 | 100% | 100%
MOL Limitless Mobility Holding Kft. | Hungary | Investment management | - | - | 100% | 100%
MOL Mezőtúr Szénhidrogén Koncessziós Kft. | Hungary | Exploration and production activity | - | - | 100% | 100%

|  | MOL Plc. Separate Financial Statements 2023 | 60

|  |  | Carrying value | Direct ownership
Company name | Country | Range of activity | 12/31/2023 | 12/31/2022 | 12/31/2023 | 12/31/2022
|  |  | HUF million | HUF million | % | %
MOL Őrség Szénhidrogén Koncessziós Kft. | Hungary | Exploration and production activity | - | - | 100% | 100%
OTP Bank Nyrt. | Hungary | Banking services | - | - | 9% | 9%
OVERDOSE Vagyonkezelő Kft. "kt.a" | Hungary | Asset management | - | - | 10% | 10%
MOL REMA Holding Kft. | Hungary | Property management | 3,381 | 3 | 100% | 100%
MOL Körforgásos Gazdálkodás Kft. | Hungary | Collection of non-hazardous waste | 405 | 5 | 100% | 100%
MOL Transportation Services Kft. | Hungary | Air passenger transport | 3,110 | 3,110 | 100% | 100%
MOL Hulladékgazdálodási Zrt. | Hungary | Waste management | 30,005 | 5 | 100% | 100%
MOL Polska sp. z o.o. (Lotos Paliwa) | Poland | Raetail sale of fuel for motor vehicles at service stations | 163,439 | 175,814 | 100% | 100%
MOHU Budapest Zrt. | Hungary | Waste management | 100 | - | 100% | 0%
MOHU Holding Kft. | Hungary | Waste management | 14,486 | - | 100% | 0%
A. S. Első Biogáz Szolg. Kft. | Hungary | Biofuel production | 877 | - | 100% | 0%
Mogyoród Koncessziós Kft. | Hungary | Exploration and production activity | 1,606 | - | 49% | 0%
Nagykáta Koncessziós Kft. | Hungary | Exploration and production activity | 2,193 | - | 49% | 0%
Ócsa Koncessziós Kft. | Hungary | Exploration and production activity | 8 | - | 49% | 0%
Total |  |  | 3,070,766 | 3,016,528 |  |

*MOL Trading&Shipping SA was dissolved in 2023.

|  | MOL Plc. Separate Financial Statements 2023 | 61

Appendix III.: Clean CCS profit / (loss) from operation (Clean CCS EBIT)

Clean CCS-based profit / (loss) from operation and its calculation methodology is not regulated by IFRS. CCS stands for Current cost of supply. Clean CCS EBIT is the most closely watched earnings measure in the oil and gas industry as it best captures the underlying performance of a refining operation as it removes non-recurring special items, inventory holding gains and losses, impairment on raw materials and own-produced inventory and derivative transactions.

Inventory holding gain/(loss)

EBIT after excluding the inventory holding gain/loss reflects the actual cost of supplies of the analysed period therefore it provides better portray on the underlying production and sales results and makes the results comparable to other companies in the industry.

Impairment on raw materials and own-produced inventory and goods

Inventories must be measured at the lower of cost or net realisable value.

The cost of inventories must be reduced - i.e. impairment must be recognised on closing inventory of the period- if the cost is significantly higher than the expected sales price minus cost to sell.

In case of finished products and goods impairment should be recognised if the closing value of them at the end of period is above the future sales price of the product minus cost to sell. In case of raw materials and semi-finished products that will be used further in production, it has to be examined whether, following their use in production; their value can be recovered in the selling price of the produced finished products. If their value is not fully recoverable impairment must be recognised to the recoverable level.

Derivative transactions

CCS methodology is based on switching to period average crude oil prices, but the CCS effect together with the effect of commodity derivative transactions would lead to unnecessary duplication, the P&L effect of all commodity derivatives are eliminated.

Non- recurring special items

One-off items are single, significant (more than USD 10 million P&L effect), non-recurring economic events which are not considered as part of the core operation of the segment therefore they do not reflect the actual performance of the given period.

| 2023 | 2022
Clean CCS EBIT Reconciliation | HUF million | HUF million
Reported EBIT total | 112,749 | 352,499
inventory holding gain/(loss) | 6,003 | (93,175)
impairment on raw materials and own-produced inventory and goods | (65) | 5,133
- thereof affects goods | (65) | 5,133
- thereof affects own-produced inventory | - | -
cargo hedge | (5,167) | 94,509
CCS EBIT | 113,520 | 358,966
Impact of derivative transactions | (7,545) | -
GHG one-off items | 274 | (5)
special items | (16,904) | 4,550
Clean CCS EBIT | 89,345 | 363,511

| 2023 | 2022
Special items | HUF million | HUF million
Operating profit excluding special items | 95,845 | 357,049
Downstream |  |
MOL DS impairments | - | (4,550)
Total special items on impairments | - | (4,550)
Corporate and Other |  |
Decommissioning liability revision estimate | 16,904 | -
Total special items in Corporate and Other | 16,904 | -
Total impact of special items on operating profit | 16,904 | (4,550)
Operating profit | 112,749 | 352,499

|  | MOL Plc. Separate Financial Statements 2023 | 62

Appendix IV.: Additional presentations according to the Hungarian Accounting Law

a) Person responsible for supervising transactional accounting and preparation of IFRS financial statements

Name: Ervin Berki

Registration number: 195106 (IFRS specialisation)

b) Person required to sign the statement of responsibility

Name: József Simola, Group Chief Financial Officer

Address: HU – 1112 Budapest, Ördögorom út 3/C A ép. 1.

Name: József Molnár, Group Chief Executive Officer

Address: HU – 1165 Budapest, Hunyadvár utca 42.

c) Contacts

Company name: MOL Plc.

Registered address: HU – 1117 Budapest, Dombóvári út 28.

Official website: www.molgroup.info

d) Presentation of company controls

In accordance with paragraph 89 of the Hungarian Accounting Law the separate financial statements include the itemised list of the name, registered address, the amount of subscribed capital and voting percentage of all business associations in which the company has majority control or qualified majority control, according to the provisions of the Civil Code governing business associations. See Appendix II.

There is no such company which holds majority control or qualified majority control in MOL Plc.

e) Audit fees

In accordance with paragraph 88 of the Hungarian Accounting Law the separate financial statements include the total fees for the financial year charged by the auditor or audit firm for the audit of annual accounts and for non-audit services. The fee charged by the audit firm (Deloitte Könyvvizsgáló és Tanácsadó Kft.) for the statutory audit of the 2023 consolidated and separate financial statements of MOL Plc. is HUF 110 million. The auditor including its network charged HUF 280 million for other assurance and audit-related services, HUF 60 million for tax advisory services and HUF 130 million for other non-audit related services to MOL Plc. and its subsidiaries for 2023 excluding fees for statutory audits of annual financial statements.

f) Reconciliation of equity

Basis of preparation of equity reconciliation

In accordance with paragraph 114/B of the Hungarian Accounting Law the separate financial statements include a reconciliation of the equity per financial statement prepared in accordance with the basis of preparation note and the equity per Hungarian Accounting Law.

The reconciliation of the equity per financial statement prepared in accordance with the basis of preparation and the equity per Hungarian Accounting Law contains the balances as of 31 December 2022 and 31 December 2023 for the following equity elements:

Equity

• Issued (share) capital

• Capital reserve

• Retained earnings

• Revaluation reserve

• Net profit or loss

• Tied-up reserves

The equity reconciliation schedule also discloses:

• the reconciliation of the amount of capital registered by the registry court and the share capital per the financial statement prepared in accordance with the basis of preparation note above;

• retained earnings available for distribution which is the amount of retained earnings which also include the net profit for last financial year closed with annual financial statements.

|  | MOL Plc. Separate Financial Statements 2023 | 63

| 2023 | 2022
| HUF million | HUF million
Section 114 B (4) Equity under IFRS |  |
Share capital | 80,723 | 80,544
Reserves | 2,176,094 | 1,885,484
Profit/(loss) for the year | 343,774 | 507,904
Total equity | 2,600,591 | 2,473,932
Section 114 B (4) a) Equity |  |
Equity under IFRS | 2,600,591 | 2,473,932
Supplementary payments as liabilities under IFRS (+) | - | -
Supplementary payments as assets under IFRS (-) | (25) | (25)
Sum of the deferred income from cash, assets that received and transferred to the capital reserve under legislation (+) | - | -
Sum of receivables from owners classified as equity instrument under capital contribution (-) | - | -
Total equity | 2,600,566 | 2,473,907
Section 114 B (4) b) Share capital under IFRS |  |
Share capital according to the effective articles of association if classified as an equity instrument | 102,429 | 102,429
Treasury shares at nominal value (-) | (21,706) | (21,885)
Total share capital | 80,723 | 80,544
Section 114 B (4) c) Registered but unpaid capital |  |
Unpaid capital under IFRS | - | -
Total registered but unpaid capital | - | -
Section 114 B (4) d) Capital reserve |  |
Sum of all equity components that are not considered as share capital, registered but unpaid capital, retained earnings, revaluation reserve, profit/(loss)for the period or tied-up reserve | 223,865 | 223,865
Total capital reserve | 223,865 | 223,865

|  | MOL Plc. Separate Financial Statements 2023 | 64

| 2023 | 2022
| HUF million | HUF million
Section 114 B (4) e) Retained earnings |  |
Accumulated profit after taxation of previous' years under IFRS that is not yet distributed among owners and not include other comprehensive income (±) | 1,951,320 | 1,664,720
Supplementary payments as assets under IFRS (-) | (25) | (25)
Unused reserve for development purposes (-) | (56,823) | (100,000)
Unused reserve for development purposes net of deferred tax liabilities under IAS 12 (+) | 5,114 | 9,000
Total retained earnings | 1,899,586 | 1,573,695
Section 114 B (4) f) Revaluation reserve |  |
Accumulated other comprehensive income from statement of other comprehensive income (±) | 909 | (3,101)
Accumulated and current year other comprehensive income from statement of other comprehensive income (±) | - | -
Total revaluation reserve | 909 | (3,101)
Section 114 B (4) g) Profit after taxation |  |
Net profit/(loss) after tax from ongoing activities in the comprehensive income statement or in the statement of profit/(loss) (±) | 343,774 | 507,904
Net profit/(loss) after tax from discontinued activities in the comprehensive income statement or in the statement of profit/(loss) (±) | - | -
Total profit/(loss) after taxation | 343,774 | 507,904
Section 114 B (4) h) Tied-up reserve |  |
Supplementary payments as liabilities under IFRS (+) | - | -
Unused reserve for development purposes (+) | 56,823 | 100,000
Unused reserve for development purposes net of deferred tax liabilities under IAS 12 (-) | (5,114) | (9,000)
Total tied-up reserve | 51,709 | 91,000
Section 114 B (5) a) Reconciliation of registered capital with the share capital under IFRS |  |
Registered share capital | 102,429 | 102,429
Share capital under IFRS | 80,723 | 80,544
Difference (treasury shares at nominal value) | 21,706 | 21,885
Section 114 B (5) b) Retained earnings available for distribution |  |
Retained earnings (include the net profit after tax for last financial year closed with annual financial statements) | 2,243,360 | 2,081,599
Accumulated, unrealised profit from the increase of fair value of investment properties under IAS 40 | - | -
Retained earnings available for distribution | 2,243,360 | 2,081,599

|  | MOL Plc. Separate Financial Statements 2023 | 65

g) Licensed electricity statements

Accounting policies

In order to achieve the Company’s aims, MOL Plc. has started electricity trading activity and connected services on 1 March 2011. The Company mainly concentrates on fulfilling the electrical energy requirements of MOL Plc. utilizing the synergies of purchases and other electricity trading activities.

The electricity trading activity of MOL Plc. is in effect under Act LXXXVI of 2007 on Electricity (hereafter “Vet.”). On the basis of Vet., the Company is classified as horizontally integrated electricity enterprise, therefore is obliged to present the licensed activity in the notes as an independent activity.

The presentation of the equity and financial position of the licensed electricity trading activity based on the Company’s internal methodology prepared as “Methodology on Accounting Separation of Electricity Trading Activity”. The separation methodology of MOL Plc.’s licensed activity conforms to law and legal rules, as well as the accounting rules and controlling principles of the Company.

The year-ended separate Financial Statements is prepared on the basis of actual data (actual naturals, actual comparison basis).

Principles of activity separation based on law:

• principle of completeness

• principle of transparency and simplicity principle

• principle of going constancy

• principle of continuity

• principle of consistency

• principle of matching

• principle of cost-benefit

The activity separation based on artificial separation method does not provide a totally balanced Statement of financial position. That is the reason why the required balance between assets and liabilities prescribed by accounting law provided by a technical balancing line on the liability side of Statement of financial position.

Principles of activity separation on the basis of business rationality

• The purchased and consumed electrical energy are presented in the Statement of profit or loss account among incomes and expenditures as purchased for trading, or rather sold to third parties by the Company.

• The services used at MOL Plc. are presented as services provided by third parties and these internal transfer accounts are recorded in the appropriate statements of profit or loss lines. The amounts recorded in the proper Statement of profit or loss account equals the value of recorded internal performance accounted in the internal accounting system of MOL Plc.

The Company prepares the activity separation annually for the whole reporting period. The itemised revision and the separation of expenditures and assets are not prepared on monthly basis.

Method of separation:

The regulation of separation and the method are established by principles mentioned below. During the elaboration of detailed separation rules, the possibilities of the applied accounting system (SAP) in MOL Plc. and the principle of cost-benefit were taken into account.

• Directly related Cost centres/Profit centres of the licensed electricity trading activity

Cost centres/Profit centres related directly to the licensed activity shall be recorded directly. In the course of separation the main goal is to account the significant part of assets, liabilities, incomes and costs/expenditures reported directly as licensed activity. The direct items shall be maximised with proper assignment of costs object and the indirect ones shall be minimised.

• Indirectly related Cost centres/Profit centres of the licensed electricity trading activity

Separation of indirect items is prepared by appropriate determined comparison method. Assets, liabilities, incomes and costs, expenditures not related directly to the licensed activity shall be separated on the basis of appropriate determined comparison method or itemised examination. If the internal service item is appropriate to licensed activity in connection of items separable, the procedure of that shall be applied.

• Non-related Cost centres/Profit centres of the licensed electricity trading activity

Based on the activity and organisation structure of the Company, there are some assets, liabilities, incomes and costs, expenditures not related to the licensed activity at all. These shall be left out of consideration during the separation process.

|  | MOL Plc. Separate Financial Statements 2023 | 66

Licensed electricity statement of Profit OR loss

| 2023 | 2022
| HUF million | HUF million
Net sales | 152,195 | 139,728
Other operating income | 146 | 108
Total operating income | 152,341 | 139,836
Raw materials and consumables used | 139,370 | 142,684
Employee benefits expense | 105 | 110
Depreciation, depletion, amortisation and impairment | 510 | 764
Other operating expenses | 726 | 87
Change in inventory of finished goods & work in progress | - | -
Work performed by the enterprise and capitalised | 240 | (611)
Total operating expenses | 140,951 | 143,034
Profit / (loss) from operation | 11,390 | (3,198)
Finance income | 979 | (1,015)
Finance expense | (33) | (11)
Total finance income, net | 1,012 | (1,004)
Profit / (loss) before tax | 12,402 | (4,202)
Income tax expense (benefit) | - | -
PROFIT / (LOSS) FOR THE YEAR | 12,402 | (4,202)

|  | MOL Plc. Separate Financial Statements 2023 | 67

Licensed electricity statement of financial position

| 12/31/2023 | 12/31/2022
| HUF million | HUF million
NON-CURRENT ASSETS |  |
Property, plant and equipment | 1,827 | 2,501
Intangible assets | - | -
Investments | - | -
Other non-current financial assets | - | -
Deferred tax asset | - | -
Other non-current assets | - | 20
Total non-current assets | 1,827 | 2,521
CURRENT ASSETS |  |
Inventories | 421 | 604
Trade and other receivables | 19,176 | 18,274
Securities | - | -
Other current financial assets | - | -
Income tax receivable | - | -
Cash and cash equivalents | - | -
Other current assets | 30,571 | 57
Total current assets | 50,168 | 18,935
Total assets | 51,995 | 21,456
EQUITY |  |
Share capital | 432 | 442
Retained earnings and other reserves | 3,101 | 687
Profit / (loss) for the year | 12,402 | (4,202)
Technical net income for the period | 17,400 | 5,429
Total equity | 33,335 | 2,356
NON-CURRENT LIABILITIES |  |
Long-term debt | (94) | 51
Other non-current financial liabilities | - | -
Non-current provisions | - | -
Other non-current liabilities | - | -
Total non-current liabilities | (94) | 51
CURRENT LIABILITIES |  |
Short-term debt | - | -
Trade and other payables | 15,673 | 16,614
Other current financial liabilities |  | -
Current provisions |  | -
Other current liabilities | 3,081 | 2,435
Total current liabilities | 18,754 | 19,049
Total liabilities | 18,660 | 19,100
Total equity and liabilities | 51,995 | 21,456

Statement of responsibility

Undersigned, authorized representatives of MOL Hungarian Oil and Gas Public Limited Company (MOL Plc.) the issuer of MOL ordinary shares, hereby declare that MOL Plc. takes full responsibility for its announced 2023 consolidated financial statement, and parent company financial statement which has been prepared to the best of our knowledge based on Section 10 of the Hungarian Accounting Act, in accordance with International Financial Reporting Standards (IFRS), and give a true and fair view of the assets, liabilities, financial position, and profit and loss of MOL Plc.

Moreover, we hereby declare that MOL Plc. takes full responsibility for its announced 2023 parent company financial statement, which has been prepared to the best of our knowledge based on Section 9/A of the Hungarian Accounting Act, in accordance with the International Financial Reporting Standards as adopted by the European Union (IFRS), and give a true and fair view of the assets, liabilities, financial position, and profit and loss of MOL Plc.

Finally, we declare that the Management Discussion and Analysis presents a fair review of the position, development and performance of MOL Plc. and its consolidated companies with a description of principal risks and uncertainties.

Budapest, 21 March 2024

József Molnár |  | József Simola
Group Chief Executive Officer |  | Group Chief Financial Officer