2549009R7KJ38D9RW354-2024-12-31-en

SOCIETATEA NAȚIONALĂ DE GAZE NATURALE “ROMGAZ” SA

SEPARATE FINANCIAL STATEMENTS

FOR THE YEAR ENDED DECEMBER 31, 2024

PREPARED IN ACCORDANCE WITH

THE ORDER OF THE MINISTRY OF PUBLIC FINANCE NO. 2844/2016

CONTENTS:

PAGE:

Statement of comprehensive income

Statement of financial position

Statement of changes in equity

Statement of cash flow

Notes to the financial statements

1. Background and general business

2. Material accounting policies

3. Revenue and other income

4. Finance income

5. Cost of commodities sold, raw materials and consumables

6. Other gains and losses

7. Depreciation, amortization and impairment expenses

8. Employee benefit expense

9. Finance costs

10. Taxes and duties

11. Income tax

12. Property, plant and equipment

13. Exploration and evaluation for natural gas resources

14. Intangible assets. Right of use assets

15. Inventories

16. Accounts receivable. Contract liabilities

17. Share capital

18. Provisions and retirement benefit obligation

19. Deferred income

20. Trade and other current liabilities

21. Financial risk management

22. Related party transactions and balances

23. Information regarding the members of the administrative, management and supervisory bodies

24. Investment in subsidiaries and associates

25. Other financial investments

26. Cash and cash equivalents

27. Bank borrowings.Bonds

28. Bank deposits other than cash and cash equivalents

29. Correction of accounting errors and revision of prior period presentation

30. Guarantees granted by banks

31. Guarantees received from banks

32. Contingencies

33. Auditor’s fees

34. Events after the balance sheet date

35. Authorization of financial statements

S.N.G.N. ROMGAZ S.A.

STATEMENT OF COMPREHENSIVE INCOME

Note

Year ended

December 31, 2024

Year ended

December 31, 2023

restated*

'000 RON

Revenue

7,531,970

8,619,286

Cost of commodities sold

(119,694)

(107,060)

Finance income

289,197

273,027

Other gains and losses

(26,718)

(12,122)

Net impairment gains/(losses) on trade

receivables

38,479

43,714

Changes in inventory of finished goods and work

in progress

47,832

(5,767)

Work performed by the Company and

capitalized

307,228

250,977

Raw materials and consumables used

(180,389)

(136,917)

Depreciation, amortization and impairment

expenses

(604,074)

(549,665)

Employee benefit expense

(1,101,776)

(988,786)

Taxes and duties

(1,806,601)

(1,479,262)

Finance cost

(92,410)

(61,913)

Exploration expense

(73,786)

(83,051)

Greenhouse gas certificates expenses

(180,752)

(242,803)

Third party services and other costs

(584,331)

(617,840)

Other income

52,921

20,866

Profit before tax

3,497,096

4,922,684

Income tax expense

(406,399)

(2,347,636)

Profit for the year

3,090,697

2,575,048

Other comprehensive income

Items that will not be reclassified

subsequently to profit or loss

Actuarial gains/(losses) on post-employment

benefits

18 c)

(8,352)

(9,338)

Income tax relating to items that will not be

reclassified subsequently to profit or loss

1,336

1,494

Total items that will not be reclassified

subsequently to profit or loss

(7,016)

(7,844)

Other comprehensive income for the year net

of income tax

(7,016)

(7,844)

Total comprehensive income for the year

3,083,681

2,567,204

* see note 29

These financial statements were authorized for issue by the Board of Directors on March 27, 2025.

Răzvan Popescu Gabriela Trânbițaș

Chief Executive Officer Chief Financial Officer

S.N.G.N. ROMGAZ S.A.

STATEMENT OF FINANCIAL POSITION

Note

December 31,

2024

December 31,

2023

restated*

January 1,

2023

restated*

'000 RON

ASSETS

Non-current assets

Property, plant and equipment

5,663,767

5,370,169

5,205,504

Intangible assets

10,617

15,238

19,750

Investments in subsidiaries

24 a)

7,545,662

5,185,051

Investments in associates

24 b)

18,120

120

Deferred tax asset

181,620

137,539

134,514

Net lease investment

105

211

286

Other assets

16 b)

337,008

549,710

27,722

Right of use asset

10,179

10,774

6,786

Other financial investments

5,616

Total non-current assets

13,772,694

11,274,428

10,585,349

Current assets

Inventories

381,217

293,749

274,531

Greenhouse gas certificates

137,244

208,617

Trade and other receivables

16 a)

766,565

1,337,437

1,334,163

Bank deposits other than cash and cash

equivalents

2,456,527

2,344,349

8,481

Other assets

16 b)

47,623

50,152

250,925

Net lease investment

119

104

Cash and cash equivalents

1,712,183

518,831

1,867,570

Total current assets

5,501,478

4,753,239

3,735,758

Total assets

19,274,172

16,027,667

14,321,107

EQUITY AND LIABILITIES

Equity

Share capital

3,854,224

385,422

Reserves

3,712,043

4,834,685

3,492,228

Retained earnings

6,383,910

6,220,195

6,313,593

Total equity

13,950,177

11,440,302

10,191,243

Non-current liabilities

Retirement benefit obligation

191,416

177,721

158,934

Deferred income

292,657

276,749

230,419

Lease liabilities

8,797

10,450

7,090

Bank borrowings

27 a)

484,975

808,373

1,125,534

Bonds

27 b)

2,476,433

Provisions

351,789

373,536

210,838

Total non-current liabilities

3,806,067

1,646,829

1,732,815

S.N.G.N. ROMGAZ S.A.

STATEMENT OF FINANCIAL POSITION

Note

December 31,

2024

December 31,

2023

restated*

January 1,

2023

restated*

'000 RON

Current liabilities

Trade payables

197,622

139,733

86,903

Contract liabilities

16 e)

290,811

153,723

263,340

Current tax liabilities

(2,561)

1,712,158

1,127,927

Deferred income

486

Provisions

155,733

115,986

316,473

Lease liabilities

3,535

2,023

1,017

Bank borrowings

27 a)

323,371

323,349

321,581

Bonds

27 b)

24,545

Other liabilities

524,386

493,557

279,797

Total current liabilities

1,517,928

2,940,536

2,397,049

Total liabilities

5,323,995

4,587,365

4,129,864

Total equity and liabilities

19,274,172

16,027,667

14,321,107

* see note 29

These financial statements were authorized for issue by the Board of Directors on March 27, 2025.

Răzvan Popescu Gabriela Trânbițaș

Chief Executive Officer Chief Financial Officer

S.N.G.N. ROMGAZ S.A.

STATEMENT OF CHANGES IN EQUITY

capital

Legal

reserve

Geological

quota

reserve

Development

fund reserve

Reinvested

profit

reserve

Reserves for

investments

in strategic

projects

Other

reserves

Retained

earnings

Total

'000 RON

Balance as of January 1, 2024

before restatement

385,422

77,084

486,388

3,812,376

439,112

19,725

6,172,369

11,392,476

Effect of accounting errors (note

29)

47,826

Balance as of January 1, 2024 as

restated

385,422

77,084

486,388

3,812,376

439,112

19,725

6,220,195

11,440,302

Profit for the year

3,090,697

Other comprehensive income for

the year

(7,016)

Total comprehensive income for

the year

3,083,681

Increase in share capital

3,468,802

(3,468,802)

Dividends distribution*

(24,580)

(549,226)

(573,806)

Increase in reserves**

174,855

231,570

43,755

1,920,560

(2,370,740)

Balance as of December 31, 2024

3,854,224

251,939

486,388

550,564

482,867

1,920,560

19,725

6,383,910

13,950,177

*) In April 2024 the Company’s shareholders approved the distribution of dividends of RON 549,226 thousand (2023: RON 1,318,145 thousand), dividend per share being RON 0.1425 (year ended December 31, 2023: RON 0.342;

since the share capital increase did not involve any corresponding change in resources, the dividend per share calculation for the prior period was recalculated. Specifically, the updated number of shares was applied to the

dividend per share calculation for the comparative period, hence the dividend per share changed. Original dividend per share paid in the year ended December 31, 2023 was RON 3.42). Dividends of RON 24,580 were distributed

based on an inspection by the National Agency of Fiscal Administration performed during November 2019 - January 2020 on the application of Government Emergency Ordinance no. 114/2018.

**) The increase in reserves, other than the legal reserve and the reinvested profit reserve, was approved by shareholders in 2024. Profit distribution is based on the provisions of Government Ordinance no. 64/2001. The Ordinance

is applicable to companies owned by the Romanian State and states the reserves that can be set-up, the level of dividends that should be distributed and the terms of such distribution. Reserves for investments in strategic

projects were set up based on the changes introduced in 2024 to Government Ordinance no. 64/2001. Development fund reserve may be distributed if the majority shareholder asks for it. The reserve for investments in strategic

projects has to be distributed if the funds are not used or committed by the time the investments funded from this reserve are commissioned; as at December 31, 2024 the Company fully used the funds for the development of

Neptun Deep. All other reserves are not distributable. According to the legislation in force, the legal reserve and the reinvested profit reserve are set up at year end and will be subject to shareholders’ approval in the following

year.

S.N.G.N. ROMGAZ S.A.

STATEMENT OF CHANGES IN EQUITY

capital

Legal

reserve

Geological

quota

reserve

Development

fund reserve

Reinvested

profit

reserve

Reserves for

investments

in strategic

projects

Other

reserves

Retained

earnings

Total

'000 RON

Balance as of January 1, 2023

before restatement

385,422

77,084

486,388

2,543,502

365,529

19,725

6,191,538

10,069,188

Effect of accounting errors (note

29)

122,055

Balance as of January 1, 2023 as

restated

385,422

77,084

486,388

2,543,502

365,529

19,725

6,313,593

10,191,243

Profit for the year before

restatement

2,649,277

Effect of accounting errors on

profit for the year (note 29)

(74,229)

Profit for the year as restated

2,575,048

Other comprehensive income for

the year

(7,844)

Total comprehensive income for

the year

2,567,204

Dividends distribution*

(1,318,145)

Increase in reserves**

1,268,874

73,583

(1,342,457)

Balance as of December 31, 2023

before restatement

385,422

77,084

486,388

3,812,376

439,112

19,725

6,172,369

11,392,476

Effect of accounting errors (note

29)

47,826

Balance as of December 31, 2023

as restated

385,422

77,084

486,388

3,812,376

439,112

19,725

6,220,195

11,440,302

These financial statements were authorized for issue by the Board of Directors on March 27, 2025.

Răzvan Popescu Gabriela Trânbițaș

Chief Executive Officer Chief Financial Officer

S.N.G.N. ROMGAZ S.A.

STATEMENT OF CASH FLOW

Year ended

December 31, 2024

Year ended

December 31, 2023

restated*

'000 RON

Cash flows from operating activities

Net profit

3,090,697

2,575,048

Adjustments for:

Income tax expense (note 11)

406,399

2,347,636

Interest expense (note 9)

68,302

43,748

Income from dividends (note 4)

(30,643)

(50,247)

Unwinding of decommissioning provision (note

9, note 18)

24,108

18,165

Interest income (note 4)

(258,554)

(222,780)

Net loss on disposal of non-current assets (note

19,897

4,734

Change in decommissioning provision

recognized in profit or loss, other than

unwinding (note 18)

(14,820)

34,128

Change in other provisions (note 18)

48,202

(197,800)

Net impairment of exploration assets (note 13)

26,980

23,361

Exploration projects written off (note 13)

Net impairment of property, plant and

equipment and intangibles

86,745

72,085

Foreign exchange differences

(200)

7,382

Depreciation and amortization

462,796

426,255

Amortization of contract costs

Net receivable write-offs and movement in

allowances for trade receivables and other

assets (note 16 c)

(38,460)

(47,741)

Net movement in write-down allowances for

inventory (note 6, note 15)

6,818

4,568

Liabilities written off

(231)

(172)

Subsidies income (note 19)

(7)

Interest paid

(38,897)

(43,183)

Income taxes paid

(2,163,863)

(1,757,188)

Cash generated from operations before

movements in working capital

1,695,276

3,238,054

Movements in working capital:

(Increase)/Decrease in inventory

(94,038)

(23,027)

(Increase)/Decrease in trade and other

receivables and other assets

587,577

136,884

Increase/(Decrease) in trade and other

liabilities

270,562

22,001

Net cash generated by operating activities

2,459,377

3,373,912

S.N.G.N. ROMGAZ S.A.

STATEMENT OF CASH FLOW

Year ended

December 31, 2024

Year ended

December 31, 2023

restated*

'000 RON

Cash flows from investing activities

Contribution to associates

(18,000)

Investment in subsidiaries

(733,522)

Cash placed in bank deposits

(8,533,308)

(5,980,520)

Cash received from bank deposits matured

8,422,922

3,655,236

Loans granted to subsidiaries

(1,330,909)

(504,368)

Interest received

172,032

194,553

Proceeds from sale of non-current assets

424

1,684

Dividends received

30,643

50,247

Acquisition of property, plant and equipment

(688,973)

(491,739)

Acquisition of intangible assets

(1,945)

(1,238)

Acquisition of exploration assets (note 13)

(199,341)

(50,746)

Collection of lease payments

109

120

Subsidies received (note 19)

15,927

46,349

Net cash used in investing activities

(2,863,941)

(3,080,422)

Cash flows from financing activities

Cash received from bonds issued (note 27 b)

2,473,574

Repayment of bank borrowings (note 27 a)

(323,312)

(322,775)

Dividends paid

(549,379)

(1,317,745)

Repayment of lease liability

(2,967)

(1,709)

Net cash generated by/(used in) financing

activities

1,597,916

(1,642,229)

Net increase/(decrease) in cash and cash

equivalents

1,193,352

(1,348,739)

Cash and cash equivalents at the beginning of

the year

518,831

1,867,570

Cash and cash equivalents at the end of the

year

1,712,183

518,831

*) see note 29.

These financial statements were authorized for issue by the Board of Directors on March 27, 2025.

Răzvan Popescu Gabriela Trânbițaș

Chief Executive Officer Chief Financial Officer

S.N.G.N. ROMGAZ S.A.

NOTES

1. BACKGROUND AND GENERAL BUSINESS

Information regarding Societatea Națională de Gaze Naturale Romgaz S.A. (the “Company”/“Romgaz”)

Societatea Națională de Gaze Naturale Romgaz S.A. (“S.N.G.N. Romgaz S.A.”/”the Company”/"Romgaz") is a joint

stock company, incorporated in accordance with Romanian legislation. The Company is listed on the Bucharest Stock

Exchange.

The Company’s headquarter is in Mediaş, 4 Constantin I. Motaş Square, 551130, Sibiu County.

The Romanian State, through the Ministry of Energy is the majority shareholder of S.N.G.N. Romgaz S.A. together

with other legal entities and physical persons (note 17).

Romgaz has as main activity:

1. geological research for the discovery of natural gas, crude oil and condensate reserves;

2. operation, production and usage, including trading, of mineral resources;

3. natural gas production for:

• ensuring the storage flow continuity;

• technological consumption;

• delivery in the transmission system.

4. commissioning, interventions, capital repairs for wells equipping the deposits, as well as the natural gas

resources extraction wells, for its own activity and for third parties;

5. electricity production and supply.

2. MATERIAL ACCOUNTING POLICIES

Statement of compliance

The separate financial statements (“financial statements”) of the Company are prepared in accordance with Ministry

of Finance Order no. 2844/2016, with subsequent amendments, to approve accounting regulations in accordance

with International Financial Reporting Standards (IFRS) as adopted by the European Union (MOF 2844/2016). MOF

2844/2016, with subsequent amendments, is in accordance with the IFRS adopted by the European Union.

For the purpose of the preparation of these financial statements, the functional currency of the Company is deemed

to be the Romanian Leu (RON).

Basis of preparation

The financial statements are prepared on a going concern basis. The principal accounting policies are set out below.

The same accounting policies, methods of computation and presentation were followed in the preparation of these

financial statements as were applied in the most recent annual financial statements except for the changes in

presentation indicated in note 29.

Accounting is kept in Romanian and in the national currency (Romanian leu). Items included in these financial

statements are denominated in Romanian lei. Unless otherwise stated, the amounts are presented in lei thousand

(RON thousand).

Fair value

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction

between market participants at the measurement date, regardless of whether that price is directly observable or

estimated using another valuation technique. In estimating the fair value of an asset or a liability, the Company

takes into account the characteristics of the asset or liability if market participants would take those characteristics

into account when pricing the asset or liability at the measurement date. Fair value for measurement and/or

disclosure purposes in these financial statements is determined on such a basis, except for measurements that have

some similarities to fair value but are not fair value, such as net realizable value in IAS 2 “Inventory” or value in use

in IAS 36 “Impairment of assets”.

In addition, for financial reporting purposes, fair value measurements are categorized into Level 1, 2 or 3 based on

the degree to which the inputs to the fair value measurements are observable and the significance to the Company

of the inputs to the fair value measurement, which are described as follows:

S.N.G.N. ROMGAZ S.A.

NOTES

• level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the

Company can access at the measurement date;

• level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for the asset

or liability, either directly or indirectly; and

• level 3 inputs are unobservable inputs for the asset or liability.

Subsidiaries

A subsidiary is an entity controlled by the Company. In establishing the existence of control, the Company analyses

the following:

• if it has authority over the invested entity;

• if it is exposed to, or has rights to variable returns from its involvement in the invested entity;

• if it has the ability to use its authority over the invested entity to affect these returns.

The investment in a subsidiary is recognized at cost less accumulated impairment.

Associates

An associate is an entity over which the Company exercises significant influence through participation in decision

making on financial and operational policies of the entity invested in. Investments are recorded at cost less

accumulated impairment.

Joint arrangements

A joint arrangement is an arrangement of which two or more parties have joint control. Joint control is the

contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant

activities require the unanimous consent of the parties sharing control.

A joint arrangement is either a joint operation or a joint venture.

A joint operation is a joint arrangement whereby the parties that have joint control of the arrangement have rights

to the assets, and obligations for the liabilities, relating to the arrangement. Those parties are called joint operators.

A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have rights

to the net assets of the arrangement. Those parties are called joint ventures.

Joint operations

The Company recognizes in relation to its interest in a joint operation:

• its assets, including its share of any assets held jointly;

• its liabilities, including its share of any liabilities incurred jointly;

• its revenue from the sale of its share of the output arising from the joint operation;

• its share of the revenue from the sale of the output by the joint operation; and

• its expenses, including its share of any expenses incurred jointly.

As joint operator, the Company accounts for the assets, liabilities, revenues and expenses relating to its interest in

a joint operation in accordance with the IFRSs applicable to the particular assets, liabilities, revenues and expenses.

If the Company participates in, but does not have joint control of, a joint operation it accounts for its interest in

the arrangement in accordance with the paragraphs above if it has rights to the assets, and obligations for the

liabilities, relating to the joint operation.

If the Company participates in, but does not have joint control of, a joint operation, does not have rights to the

assets, and obligations for the liabilities, relating to that joint operation, it accounts for its interest in the joint

operation in accordance with the IFRSs applicable to that interest.

S.N.G.N. ROMGAZ S.A.

NOTES

Standards and interpretations valid for the current period

The following standards and amendments or improvements to existing standards issued by the IASB and adopted by

the EU have entered into force for the current period:

• 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 January 1, 2024);

• 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; Non-current Liabilities

with Covenants (effective for annual periods beginning on or after January 1, 2024);

• Amendments to IFRS 16 “Leases” – Lease liabilities in a sale and leaseback (applicable to annual periods

beginning on or after 1 January 2024).

The adoption of these amendments, interpretations or improvements to existing standards has not led to changes in

the Company's accounting policies. Disclosures on covenants required by IAS 1 are presented in note 27.

Standards and interpretations issued by IASB and adopted by the EU, but not yet effective

At the date of issue of the financial statements, the following standard was adopted by the EU, but not yet

effective:

• Amendments to IAS 21 “The Effects of Changes in Foreign Exchange Rates”: Lack of Exchangeability (applicable

to annual periods beginning on or after 1 January 2025).

The Company did not adopt this standard before its effective date. The Company does not expect this amendment

to have a material impact on the financial statements.

Standards and interpretations issued by IASB not yet endorsed by the EU

At present, IFRS endorsed by the EU do not significantly differ from IFRS adopted by the IASB except for the following

standards, amendments or improvements to the existing standards and interpretations, which were not endorsed

for use in the EU as at date of publication of financial statements:

• Amendments to the Classification and Measurement of Financial Instruments; Amendments to IFRS 9 and IFRS 7

(applicable to annual periods beginning on or after 1 January 2026);

• IFRS 18 “Presentation and Disclosure in Financial Statements” (applicable to annual periods beginning on or

after 1 January 2027);

• IFRS 19 “Subsidiaries without Public Accountability: Disclosures” (applicable to annual periods beginning on or

after 1 January 2027);

• Annual Improvements Volume 11 (applicable to annual periods beginning on or after 1 January 2026);

• Contracts Referencing Nature-dependent Electricity – Amendments to IFRS 9 and IFRS 7 (applicable to annual

periods beginning on or after 1 January 2026).

The Company is currently evaluating the effect that the adoption of these standards, amendments or improvements

to the existing standards and interpretations will have on the financial statements of the Company in the period of

initial application.

Segment information

The information reported to the chief operating decision maker (ie. the Chief Executive Officer) for the purposes of

resource allocation and assessment of segment performance focuses on the upstream segment, electricity production

and supply, and other activities, including headquarter activities.

Specifically, the Company is organized in the following segments:

• upstream, which includes exploration activities, natural gas production and trade of gas extracted by Romgaz

or acquired for resale; these activities are performed by the head office, Mediaș, Mureș and Buzău branches;

• electricity production and supply activities, performed by Iernut branch;

• other activities, such as technological transport, operations on wells and corporate activities.

Gas and electricity deliveries between Company’s segments are accounted for at market prices or at regulated

prices, as the case may be. All other transactions between Company’s segments are at cost.

Considering the insertion of separate and consolidated financial statements in a single annual financial report, the

S.N.G.N. ROMGAZ S.A.

NOTES

Company does not disclose segment information in the separate financial statements.

Revenue recognition

a) Revenue from contracts with customers

The Company recognizes revenue from the following major sources:

• sale of gas, either from its own production or acquired for resale, and related fulfilment activities (eg.

transmission, storage, distribution services);

• sale of electricity, either from its own production or acquired for resale.

Revenue is measured based on the consideration to which the Company expects to be entitled in a contract with a

customer and excludes amounts collected on behalf of third parties. Revenue is recognized when, or as the Company

transfers the goods or services to the customer, respectively, the client obtains control over them.

Depending on the nature of the goods or services, revenues are recognized over time or at a point in time.

Contracts concluded by the Company do not contain significant financing components.

The Company does not disclose information about the remaining performance obligations, applying the practical

expedient in IFRS 15, as contracts with customers are generally signed for periods of less than one year and the

revenues are recognized at the amount which the Company has the right to charge.

Revenue from sale of gas and electricity

The Company’s gas contracts include a single performance obligation which is satisfied upon delivery. The

performance obligation includes the gas delivered and the fulfilment activities required to provide the gas to the

customer. Revenue is recognized at the time of delivery to the customer and in line with the amount to which the

Company has the right to invoice. Gas deliveries are invoiced monthly. Revenue from these contracts is recognized

at a point in time on the basis of the actual quantities delivered at the prices fixed in the contracts concluded.

The Company’s electricity contracts include a single performance obligation which is satisfied over the delivery

period as the customer simultaneously receives and consumes electricity. Revenue is recognized at the time of

consumption by the customer and in line with the amount to which the Company has the right to invoice. Electricity

deliveries are invoiced on a monthly basis. Revenue from these contracts are recognized over time for the whole

month on the basis of the actual quantities delivered at the prices fixed in the contracts concluded.

Trade receivables from gas deliveries are generally due within 30 days of invoice issue. These must be guaranteed

by customers through bank letters of guarantee. If customers do not provide such a guarantee, they must ensure

that natural gas is paid in advance.

Trade receivables from the sale of electricity are generally due within 7 days of the date of invoice delivery. These

must be guaranteed by customers through bank letters of guarantee. If customers do not provide such a guarantee,

they must ensure that electricity is paid in advance.

b) Other revenue

Rental revenue for operating lease contracts where the Company operates as lessor is recognized on a straight-line

basis over the lease term, in accordance with the substance of the relevant agreements.

Finance income

Interest income is recognized periodically and proportionally as the respective income is generated, on accrual basis.

Dividends are recognized as income when the legal right to receive them is established.

Contract liabilities

Contract liabilities are obligations to transfer goods or services to a customer for which the Company has received

consideration (or an amount of consideration is due) from the customer. If a customer pays consideration, or the

Company has a right to an amount of consideration that is unconditional (ie. a receivable), before the Company

transfers the good or service to the customer, the Company recognizes the contract as a contract liability when the

payment is made or the payment is due (whichever is earlier).

S.N.G.N. ROMGAZ S.A.

NOTES

Exploration expenses

The costs of seismic exploration, geological, geophysical and other similar exploration activities are recognized as

exploration expenses in the statement of comprehensive income in the period in which they arise.

Exploration expenses also include the carrying value of exploration assets that have not identified gas resources and

have been written-off.

Foreign currencies

The functional currency is the currency of the primary economic environment in which the Company operates and

is the currency in which cash is primarily generated and expended. The Company operates in Romania and it has the

Romanian Leu (RON) as its functional currency. The majority of sales and acquisition are in Romanian currency.

In preparing the financial statements of the Company, transactions in currencies other than the functional currency

(foreign currencies) are recorded at the exchange rates prevailing at the dates of the transactions. At each reporting

date, monetary items denominated in foreign currencies are retranslated at the rates prevailing at the reporting

date.

Exchange differences are recognized in the statement of comprehensive income in the period in which they arise.

Non-monetary items that are measured in terms of historical cost in a foreign currency are not re-translated.

Employee benefits

Benefits granted upon retirement

In the normal course of business, the Company makes payments to the Romanian State on behalf of its employees at legal

rates. All employees of the Company are members of the Romanian State pension plan. These costs are recognized in the

statement of comprehensive income together with the related salary costs.

Based on the Collective Labor Agreements applicable within the Company, the Company is liable to pay to its

employees at retirement a number of gross salaries, according to the years worked in the gas industry/electrical

industry, work conditions etc. To this purpose, the Company recorded an obligation for benefits upon retirement.

This obligation is updated annually and computed according to actuary methods based on estimates of the average

salary, the average number of salaries payable upon retirement, on the estimate of the period when they shall be

paid and it is brought to present value using a discount factor based on interest related to a maximum degree of

security investments (government securities). As the benefits are paid, the obligation is reduced together with the

reversal of the obligation against income.

Gains or actuarial losses, are recognized in other comprehensive income. These are changes in the present value

of the defined benefit obligation as a result of statistical adjustments and changes in actuarial assumptions. Any

other changes in the obligation are recognized in the result of the year.

The Company does not operate any other pension scheme or post-retirement benefit plan and, consequently, has no

obligation in respect of pensions.

Employee participation to profit

The Company records in its financial statements a provision related to the fund for employee participation to profit

in compliance with legislation in force, namely Government Ordinance no. 64/2001. According to this, employees

may receive one average base monthly salary as a benefit.

Liabilities related to the fund for employee participation to profit are settled in less than a year and are measured

at the amounts estimated to be paid at the time of settlement.

Provisions

Provisions are recognized when the Company has a present legal or constructive obligation as a result of past events,

when it is probable that an outflow of resources embodying economic benefits will be required to settle the

obligation, and a reliable estimate of the amount of the obligation can be made.

S.N.G.N. ROMGAZ S.A.

NOTES

Greenhouse gas certificates acquired

The Company recognizes a liability for the obligation to settle actual CO

emissions (provision until greenhouse gas

certificates are purchased, current liability after such certificates are purchased, until their inclusion in the Unique

Registry of Greenhouse Gas Emissions). The provision is measured at the best estimate of the expenditure required

to settle the present obligation at the balance sheet date. The liability to be settled using certificates on hand is

measured at the carrying amount of those certificates; any excess emission is measured at the market value of

certificates at the period end. The related expense is recognized in the same amount as the liability. Greenhouse

gas certificates purchased during the period are those which will be included in the Unique Registry of Greenhouse

Gas Emissions. They are recognized as current assets (intangible assets) and measured at cost. When the certificates

are included in the Unique Registry, the respective liability is settled and the asset and liability are derecognized.

Provisions for decommissioning of wells

Liabilities for decommissioning costs are recognized due to the Company’s obligation to plug and abandon a well,

dismantle and remove a facility or an item of plant and to restore the site on which it is located, and when a reliable

estimate of that liability can be made.

The Company recorded a provision for decommissioning wells.

This provision was computed based on the estimated future expenditure determined in accordance with local

conditions and requirements and it was brought to present value using the weighted average cost of capital. The

rate and the estimated costs for decommissioning are updated annually.

The decommissioning provision is based on the economic life of the fields wells are located on, even if this is longer

than the period of the related concession agreements, as it is considered the period may be extended.

Economic life of fields is determined based on studies submitted to ANRMPSG for approval.

A corresponding item of property, plant and equipment of an amount equivalent to the provision is also recognized.

The item of property, plant and equipment is subsequently depreciated as part of the asset.

The Company applies IFRIC 1 “Changes in Existing Decommissioning, Restoration and Similar Liabilities” related to

changes in existing decommissioning, restoration and similar liabilities.

The change in the decommissioning provision for wells is recorded as follows:

a. subject to b., changes in the liability are added to, or deducted from, the cost of the related asset in the

current period;

b. the amount deducted from the cost of the asset does not exceed its carrying amount. If a decrease in the

liability exceeds the carrying amount of the asset, the excess is recognized immediately in the statement of

comprehensive income;

c. if the adjustment results in an addition to the cost of an asset, the Company considers whether this is an

indication that the new carrying amount of the asset may not be fully recoverable. If it is such an indication,

the Company tests the asset for impairment by estimating its recoverable amount, and accounts for any

impairment loss.

Once the related asset has reached the end of its useful life, all subsequent changes of the liability are recognized in the

income statement in the period when they occur.

The periodical unwinding of the discount is recognized in the comprehensive income as a finance cost, as it occurs.

Taxation

Income tax expense represents the sum of the tax currently payable and deferred tax.

Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit as reported in

the statement of comprehensive income because it excludes items of income or expense that are taxable or

deductible in other periods and it further excludes items that are never taxable or deductible. The Company’s

liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the end of

the reporting period.

S.N.G.N. ROMGAZ S.A.

NOTES

Deferred tax

Deferred tax is recognized on the differences between the carrying amounts of assets and liabilities in the financial

statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using

the balance sheet liability method.

Deferred tax liabilities are generally recognized for all taxable temporary differences, and deferred tax assets are

generally recognized for all deductible temporary differences to the extent that it is probable that taxable profits

will be available against which those deductible temporary differences can be utilized. Such assets and liabilities

are not recognized if the temporary difference arises from goodwill or from the initial recognition (other than in a

business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the

accounting profit.

Deferred tax liabilities are recognized for taxable temporary differences associated with investments in associates

and interests in joint ventures, except where the Company is able to control the reversal of the temporary difference

and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets

arising from deductible temporary differences associated with such investments and interests are only recognized

to the extent that it is probable that there will be sufficient taxable profits against which to utilize the benefits of

the temporary differences and they are expected to reverse in the foreseeable future.

The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that

it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be

recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which

the liability is settled or the asset realized, based on tax rates and tax laws that have been enacted or substantively

enacted by the end of the reporting period. The measurement of deferred tax liabilities and assets reflects the tax

consequences that would follow from the manner in which the Company expects, at the reporting date, to recover

or settle the carrying amount of its assets and liabilities.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets

against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the

Company intends to settle its current tax assets and liabilities on a net basis.

Current and deferred tax for the period

Current tax for the period is recognized as an expense in the statement of comprehensive income. Deferred tax for

the period is recognized as an expense or income in the statement of comprehensive income, except when they

relate to items credited or debited directly to equity, in which case the tax is also recognized directly in equity, or

where it arises from the initial accounting for a business combination. In the case of a business combination, the tax

effect is taken into account in calculating goodwill or in determining the excess of the acquirer’s interest in the net

fair value of the acquirer’s identifiable assets, liabilities and contingent liabilities over cost.

Property, plant and equipment

(1) Cost

(i) Property, plant and equipment

Property, plant and equipment are stated at cost, less accumulated depreciation and accumulated impairment

losses. The initial cost of an asset comprises its purchase price or construction cost, any costs directly attributable

to bringing the asset into the location and condition necessary for it to be capable of operating in the manner

intended by management and the initial estimate of any decommissioning obligation. The purchase price or

construction cost is the aggregate amount paid and the fair value of any other consideration given to acquire the

asset.

(ii) Gas cushion

This is a quantity of natural gas constituted as a reserve at the level of gas storages, physically recoverable, which

ensures the optimum conditions necessary to maintain their technical-productive flow characteristics.

(iii) Development expenditure

Expenditure on the construction, installation and completion of infrastructure facilities such as platforms, pipelines

and the drilling of development wells, including the commissioning of wells, is capitalized within property, plant

and equipment and is depreciated from the commencement of production as described below in the property, plant

and equipment accounting policies.

S.N.G.N. ROMGAZ S.A.

NOTES

(iv) Maintenance and repairs

The Company does not recognize within the assets’ costs the current expenses and the accidental expenses for that asset.

These costs are expensed in the period in which they are incurred.

The costs for current maintenance are mainly labor costs and consumables and also small inventory items. The purpose of

these expenses is usually described as “repairs and maintenance” for property, plant and equipment.

The expenses with major activities, inspections and repairs comprise the replacement of the assets or other asset’s

parts, the inspection cost and major overhauls. These expenses are capitalized if an asset or part of an asset, which

was separately depreciated, is replaced and is probable that they will bring future economic benefits for the

Company. If part of a replaced asset was not considered as a separate component and, as a result, was not separately

depreciated, the replacement value will be used to estimate the net book value of the asset which is replaced and

is immediately written-off. The inspection costs associated with major overhauls are capitalized and depreciated

over the period until next inspection.

The costs for major overhauls for wells are also capitalized and depreciated using the unit of production depreciation

method.

All other costs with the current repairs and usual maintenance are recognized directly in expenses.

(2) Depreciation

The depreciable amount of a tangible asset is the cost less the residual value of the asset. The residual value is the

estimated value that the Company would currently obtain from the disposal of an asset, after deducting the

estimated costs associated with the disposal if the asset would already have the age and condition expected at the

end of its useful life.

For directly productive tangible assets (ie. wells), the Company applies the depreciation method based on the unit

of production (UoP) in order to reflect in the statement of comprehensive income, an expense proportionate with

the production obtained from the total natural gas reserve certified at the beginning of the period. According to this

method, the carrying value of each production well is depreciated according to the ratio of the natural gas quantity

extracted during the period compared to the proved developed reserves at the beginning of the period.

Assets representing gas cushion are not depreciated, as it is expected that the residual value exceeds their cost.

For indirectly productive tangible assets and storage assets, depreciation is computed using the straight-line method

over the estimated useful life of the asset as follows:

Asset Years

Gas properties (others than the properties with UoP depreciation) 1 - 50

Buildings 1 - 70

Fixtures, fittings and office equipment 1 – 18

Plant, machinery and equipment 1 – 30

Storage assets 2 - 36

Land is not depreciated as it is considered to have an indefinite useful life.

Properties in the course of construction for production, rental or administrative purposes, or for purposes not yet

determined, are carried at historical cost, less any recognized impairment loss. Depreciation of these assets, on the

same basis as other property assets, commences when the assets are ready for their intended use.

Items of tangible fixed assets that are disposed of are eliminated from the statement of financial position along with

the corresponding accumulated depreciation and impairment. Any gain or loss resulting from such retirement or

disposal is included in other gains and losses.

For items of tangible fixed assets that are retired from use, but not written off by reporting date, an impairment

adjustment is recorded for the carrying value at the time of retirement.

(3) Impairment

Non-current assets must be recognized at the lower of the carrying amount and recoverable amount. If and only if

the recoverable amount of an asset is less than its carrying amount, the carrying amount of the asset should be

reduced to be equal to its recoverable amount. Such a reduction represents an impairment loss that is recognized

in the result of the period.

S.N.G.N. ROMGAZ S.A.

NOTES

Thus at the end of each reporting period, the Company assesses whether there is any indication of impairment of

assets, whether at individual asset level or at cash-generating unit level. If such indication is identified, the Company

tests the assets to determine whether they are impaired.

Company’s assets are allocated to cash-generating units. The cash-generating unit is the smallest identifiable asset

group that generates independent cash inflows to a large extent from cash inflows generated by other assets or asset

groups. The Company considers each commercial field as a separate cash-generating unit.

All gas storages held by the Company leased to Depogaz are considered as part of a single cash-generating unit, as

the tariffs are set by analyzing the storage activity as a whole, not every single storage.

In 2024, the Company did not conduct an impairment test in the Upstream segment (for onshore operations), as it

did not identify any impairment indicators.

No impairment indicators were identified related to the investment in Romgaz Black Sea Limited.

Recoverable amount is the largest of the fair value of an asset or a cash-generating unit less costs associated with

disposal and its value in use.

Exploration and evaluation assets

(1) Cost

Natural gas exploration (other than seismic, geological, geophysical and other similar activities), evaluation and

development expenditure is accounted for using the principles of the successful efforts method of accounting.

Costs directly associated with an exploration well are initially capitalized as an asset until the drilling of the well is

complete and the results have been evaluated. These costs include employee remuneration, materials and fuel used,

drilling costs and payments made to contractors. If potentially commercial quantities of hydrocarbons are not found,

the exploration well is impaired in the statement of financial position until the National Regulatory Authority for

Mining, Petroleum and Geological Storage of Carbon Dioxide (Autoritatea Națională de Reglementare în Domeniul

Minier, Petrolier și al Stocării Geologice a Dioxidului de Carbon – ANRMPSG) approvals are obtained in order to be

written off; the impairment allowance previously recorded is released against the cost of the asset. If hydrocarbons

are found and, subject to further evaluation activity, are likely to be capable of commercial development, the costs

continue to be carried as an asset. Costs directly associated with evaluation activity, undertaken to determine the

size, characteristics and commercial potential of a reservoir following the initial discovery of hydrocarbons, including

the costs of evaluation wells where hydrocarbons were not found, are initially capitalized 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, an

impairment is recorded for the assets, until the completion of the legal steps necessary for them to be written off.

When proved reserves of natural gas are determined and development is approved by management, the relevant

asset is transferred to property, plant and equipment other than exploration and evaluation assets.

(2) Impairment

At each reporting date, the Company's management reviews its exploration and evaluation assets and establishes

the necessity for recording in the financial statements an impairment loss in these situations:

• the period for which the Company has the right to explore in the specific area has expired during the period

or will expire in the near future, and is not expected to be renewed;

• substantive expenditure on further exploration for and evaluation of gas resources in the specific area is

neither budgeted nor planned;

• exploration for and evaluation of gas resources in the specific area have not led to the discovery of

commercially viable quantities of gas resources and the Company has decided to discontinue such activities

in the specific area;

• sufficient data exist to indicate that, although a development in the specific area is likely to proceed, the

carrying amount of the exploration and evaluation asset is unlikely to be recovered in full from successful

development or by sale.

Intangible assets

(1) Cost

Licenses for software, patents and other intangible assets are recognized at acquisition cost.

Intangible assets are not revalued.

(2) Amortization

S.N.G.N. ROMGAZ S.A.

NOTES

Patents and other intangible assets are amortized using the straight-line method over their useful life, but not

exceeding 20 years. Licenses related to the right of use of computer software are amortized over a period of 3 years.

Inventories

Inventories are recorded initially at cost of production, or acquisition cost, as the case may be. The cost of finished

goods and production in progress includes materials, labour, expenses incurred in bringing the finished goods at the

location and in the existent form and related indirect production costs. Write down adjustments are booked against

slow moving, damaged and obsolete inventory, when necessary.

At each reporting date, inventories are measured at the lower of cost and net realizable value. The net realizable

value is estimated based on the selling price less any completion and selling expenses. The cost of inventories is

assigned by using the weighted average cost formula.

Financial assets and liabilities

The Company’s financial assets include cash and cash equivalents, trade receivables, other receivables, loans

granted, bank deposits with a maturity from acquisition date of over three months and investments in equity

instruments.

Financial liabilities include interest-bearing bank borrowings, overdrafts, bonds and trade and other payables.

For each item, the accounting policies on recognition and measurement are disclosed in this note.

Cash and cash equivalents include petty cash, cash in current bank accounts and short-term deposits with a maturity

of less than three months from the date of acquisition.

The Company recognizes a financial asset or financial liability in the statement of financial position when and only

when it becomes a party to the contractual provisions of the instrument. Upon initial recognition, financial assets

are classified at amortized cost or measured at fair value through profit or loss. The classification depends on the

Company's business model for managing the financial assets and their contractual cash flows.

The Company does not have financial assets measured at fair value through other comprehensive income.

On initial recognition, financial assets and financial liabilities are measured at fair value plus or minus, in the case

of assets and liabilities measured at amortized cost, transaction costs that are directly attributable to the acquisition

or issue of the financial asset or financial liability.

Receivables resulting from contracts with customers represent the unconditional right of the Company to a

consideration. The right to a consideration is unconditional if only the passage of time is required before payment

of the consideration is due. These are measured at initial recognition at the transaction price.

The amortized cost of a financial asset or financial liability is the amount at which the financial asset or financial

liability is measured at initial recognition minus principal repayments plus or minus cumulative depreciation using

the effective interest method for each difference between the initial amount and the amount at maturity and, for

financial assets, adjusted for any loss allowance impairment.

Any difference between the initial amount and the amount at maturity is recognized in the statement of

comprehensive income for the period of the borrowings or bonds using the effective interest method.

Financial instruments are classified as liabilities or equity in accordance with the nature of the contractual

arrangement. Interest, dividends, gains and losses on a financial instrument classified as a liability are reported as

expense or income. Distributions to holders of financial instruments classified as equity are recorded directly in

equity.

Financial instruments are offset when the Company has a legally enforceable right to offset and intends to settle

either on a net basis or to realize the asset and discharge the obligation simultaneously.

Impairment of financial assets

Financial assets, other than those at fair value through profit and loss, are assessed for impairment at each reporting

period.

Except for trade receivables, the Company measures the loss allowance for a financial instrument at an amount

equal to the lifetime expected credit losses if the credit risk associated with the financial instrument, has increased

significantly since initial recognition. If, at the reporting date, the credit risk for a financial instrument has not

increased significantly since the initial recognition, the Company measures the loss allowance for that financial

instrument at a value equal to 12 month expected credit losses.

The loss allowance on trade receivables resulting from transactions that are subject to IFRS 15 is measured using

the simplified approach.

S.N.G.N. ROMGAZ S.A.

NOTES

The Company measures the expected credit losses of a financial instrument in a manner that reflects reasonable

and supportable information that is available without undue cost or effort at the reporting date about past events,

current conditions and forecasts of future economic conditions.

The carrying amount of the financial asset, other than those at fair value through profit or loss, is reduced through

the use of an allowance account.

De-recognition of financial assets and liabilities

The Company derecognizes a financial asset only when the contractual rights to the cash flows from the asset expire,

or it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another

entity.

The Company derecognizes financial liabilities when, and only when, the Company’s obligations are discharged,

cancelled or they expire.

Reserves

Reserves include:

• legal reserves, which are used annually to transfer to reserves up to 5% of the statutory profit, but not more

than 20% of the statutory share capital of the Company;

• development fund reserves, which represent allocations from profit in accordance with Government

Ordinance no. 64/2001, paragraph (g); the reserve is set up from net profit, as a balance after all other

reserves are set up;

• reserves from reinvested profit, set up based on the Fiscal Code. The amount of profit that benefited from

tax exemption under the fiscal legislation less the legal reserve, is distributed at the end of the year by setting

up the reserve;

• geological quota reserve, non-distributable, set up until 2004. Geological quota reserve set up after 2004 is

distributable and presented in retained earnings. Geological quota set up after 2004 is allocated together

with the profit allocation, as approved by the General Meeting of Shareholders, based on depreciation,

respectively write-off of the assets financed using the development quota;

• other non-distributable reserves, set up from retained earnings representing translation differences recorded

at transition to IFRS. These reserves are set up in accordance with MOF 2844/2016;

• reserves for investments in strategic projects are set up in accordance with Government Ordinance no.

64/2001 for the difference between the general dividend payout ratio requested by the Government and the

lower ratio approved for the Company to support major investments of national interest to increase the energy

capacity of Romania.

Government grants

Grants are non-reimbursable financial resources given by a government to the Company with the condition of

meeting certain criteria. Grants include grants related to assets and grants related to income.

Grants related to assets are government grants for whose primary condition is that the Company should purchase,

construct, or otherwise acquire long-term assets.

Grants related to income are government grants other than those related to assets.

Grants are not recognized until there is reasonable assurance that:

(a) the Company will comply with the conditions attaching to it; and

(b) grants will be received.

Grants related to assets are presented in the statement of financial position as “Deferred revenue”, which is then

recognized in profit or loss on a systematic basis over the useful life of the asset.

Grants related to income are recognized in the statement of profit or loss under "Other income", as the related

expenses are recorded. Until the time the expense occurs, the grant received is recognized as “Deferred revenue”.

If a government grant becomes receivable as compensation for expenses or losses incurred in a previous period, the

Company recognizes such grant in the profit or loss of the period in which it becomes receivable.

S.N.G.N. ROMGAZ S.A.

NOTES

Significant estimates and judgments

The preparation of the financial information requires management to make estimates and assumptions that affect

the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the end of

reporting date, and the reported amounts of revenue and expenses during the reporting period. Actual results could

vary from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions

to accounting estimates are recognized in the period in which the estimate is revised, if the revision affects only

that period, or in the period of the revision and future periods if the revision affects both current and future periods.

The following are the critical estimates and judgments that the management has made in the process of applying

the Company’s accounting policies, and that have the most significant effect on the amounts recognized in the

financial statements.

Judgment related to government grants related to income

Government Emergency Ordinance no. 27/2022 as subsequently amended (GEO 27) includes the obligation of the

Company to sell the electricity it produces at a regulated price. According to GEO 27, electricity producers must

calculate a contribution to the Energy Transition Fund. For the period January 1, 2023-March 31, 2024, if the value

of the CO

certificates related to the energy sold at the regulated price exceeds the contribution to the Energy

Transition Fund, electricity producers are entitled to receive the excess. Until December 2024, the legislation did

not provide for the mechanism to request these amounts from the Romanian State nor the competent authority for

the settlement of such requests. As such, the right to receive the grant is not enforceable.

The government does not act as a shareholder or a client of the Company in this matter. As such, the relevant

standard considered in the accounting of the grant is IAS 20.

By December 31, 2024 the Company should receive RON 188,260 thousand. Until the amount becomes a receivable,

the Company discloses the grant as a contingent asset.

Estimates related to impairment losses on trade receivables

At each period end, the Company evaluates the risks attached to current and overdue receivables and the probability

of such risks to materialize. The Company’s receivables are generally due in maximum 30 days from the date of

issue. Based on the information available at period end and previous experience, the Company estimates the lifetime

expected credit loss of receivables, both current and overdue, on a client-by-client basis and records appropriate

impairment losses (note 16).

Judgment related to the exploration expenditure on undeveloped fields

If field works prove that the geological structures are not exploitable from an economic point of view or that they

do not have hydrocarbon resources available, an impairment is recorded. The impairment assessment is performed

based on geological experts’ technical expertise (note 7).

Estimates related to developed proved reserves

The Company applies the unit-of-production depreciation method for gas producing wells in order to reflect in the

income statement an expense proportionate with the production obtained from the total developed proved natural

gas reserve at the beginning of the period. According to this method, the carrying value of each production well is

depreciated according to the ratio of the natural gas quantity extracted during the period compared to the gas

reserve at the beginning of the period. The gas reserves are updated annually by ANRMPSG-certified internal experts

according to internal policies and assessments that are based on certifications of ANRMPSG (note 7).

The estimated developed proved gas reserves are a key input in management’s impairment indicators assessment of

assets within the Upstream segment.

Periodically, Romgaz engages a reputable international company to perform an independent assessment of its gas

reserves, the most recent one being as of December 31, 2023. However, the depreciation of producing wells and the

assessment of impairment indicators are based on the developed proved gas reserves estimated by Romgaz’ internal

experts.

If gas reserves increased by 5%, the depreciation charge of assets depreciated using the unit of production method

would be RON 8,932 thousand lower than current levels (2023: RON 8,066 thousand).

If gas reserves decreased by 5%, the depreciation charge of assets depreciated using the unit of production method

would be RON 9,857 thousand higher than current levels (2023: RON 8,875 thousand).

S.N.G.N. ROMGAZ S.A.

NOTES

Estimates related to the decommissioning provision

Liabilities for decommissioning costs are recognized for the Company’s obligation to plug and abandon a well,

dismantle and remove a facility or an item of plant and to restore the site on which it is located, and when a reliable

estimate of that liability can be made.

This provision is computed based on the estimated future expenditure determined in accordance with local

conditions and requirements and it is brought to present value using the weighted average cost of capital. The rate

and estimated decommissioning costs are updated annually (note 18).

Costs to plug and abandon a well are calculated as an average of current year’s costs actually incurred for such

activities. These costs are brought to present value over the period over which the Company believes the field will

be economically viable, even if the current term of concession agreements is shorter, as the Company believes it

will be able to extend the term of the agreements.

If economic life of existing concession agreements increased by 5 years, the decommissioning provision would

decrease by RON 69,137 thousand (2023: RON 54,652 thousand).

If economic life of existing concession agreements decreased by 5 years, the decommissioning provision would

increase by RON 78,437 thousand (2023: RON 59,927 thousand).

Estimates related to the retirement benefit obligations

Under the Collective Labor Agreement applicable within the Company, the Company must pay its employees when

they retire a multiplicator of the gross salary, depending on the seniority within the gas industry/electricity industry,

working conditions etc. This obligation is updated annually. It is calculated based on actuarial methods to estimate

the average wage, the average number of employees to pay at retirement, the estimate of the period when they

will be paid and is brought to present value using a discount factor based on interest on investments with the highest

degree of safety (government bonds) (note 18).

The Company does not operate any other pension plan or retirement benefits, and therefore has no other obligations

relating to pensions.

Judgment on depreciation and expected useful lives of property, plant and equipment

The energy transition may curtail the expected useful lives of the Company’s assets thereby accelerating

depreciation charges. However, it is expected that most of the existing assets will likely have immaterial carrying

values by 2050. The Company’s core strategy is focused on its upstream segment and will continue to have an

important part of the Company’s activities over that period. Therefore, management does not expect the useful

lives of the Company’s property, plant and equipment to change. Significant capital expenditure is still required for

ongoing projects as well as renewal and/or replacement of aged assets and therefore the useful lives of future

capital expenditure may be different.

If useful life of property, plant and equipment depreciated on a straight-line basis increased by 5%, depreciation for

the year would have decreased by RON 4,360 thousand (2023: RON 10,205 thousand).

If useful life of property, plant and equipment depreciated on a straight-line basis decreased by 5%, depreciation

for the year would have increased by RON 13,171 thousand (2023: RON 7,721 thousand).

Judgment related to impairment of assets

The Company assesses whether indications of impairment exist both at CGU level and for individual assets.

Impairment indicators considered at CGU level include: significant changes in developed proved gas reserves,

analysis of profitability of existing fields, regulations related to gas prices, regulations on tax environment and

decisions to end existing concessions.

Impairment indicators for individual assets include lack of production, decisions to abandon or write-off an individual

asset.

Judgment related to the residual value of the gas cushion

Gas cushion is recorded at cost. The Group estimates that future gas prices (ie. residual value) will exceed the cost

of the gas cushion. Therefore the gas cushion is not depreciated.

Contingencies

By their nature, contingencies end only when one or more uncertain future events occur or not. In order to determine

the existence and the potential value of a contingent element, is required to exercise the professional judgment

and the use of estimates regarding the outcome of future events (note 32).

S.N.G.N. ROMGAZ S.A.

NOTES

Judgments related to the application of Pillar Two

In December 2023, the Romanian Parliament enacted legislation to implement the Pillar Two Model rules. The

legislation is effective for the Company from January 1, 2024 and includes an income inclusion rule and a domestic

minimum tax, which together are designed to ensure a minimum effective tax rate of 15% in each country in which

the companies in the Romgaz Group operate.

The Romgaz Group is formed of Societatea Națională de Gaze Naturale Romgaz S.A., as ultimate parent company,

and its fully owned subsidiaries S.N.G.N. ROMGAZ S.A. - Filiala de Înmagazinare Gaze Naturale DEPOGAZ Ploiești

S.R.L. (“Depogaz”) and Romgaz Black Sea Limited. Depogaz is the main gas storage operator in Romania. Romgaz

Black Sea Limited holds 50% of the rights and obligations for the Neptun Deep offshore block.

The Romanian legislation includes an initial phase of exclusion from the income inclusion rule for multinational

groups subject to the additional tax or national additional tax, by which the tax will be reduced to zero in the first

5 years of the initial phase of the international activity of the multinational group. The initial phase of the

international activity started on January 1, 2024.

A multinational group shall be considered to be in the initial phase of its international activity if, for a financial

year:

a) it has constituent entities in no more than 6 jurisdictions; and

b) the sum of the carrying value of the tangible assets of all the constituent entities of the multinational group

having their headquarters in all jurisdictions, except the reference jurisdiction, does not exceed EUR 50,000

thousand. The reference jurisdiction represents the jurisdiction in which the constituent entities of the multinational

group have the highest total carrying value of tangible assets in the financial year in which the multinational group

initially falls within the scope of the law. The total value of tangible assets in a jurisdiction is the sum of the carrying

amount of all tangible assets of all constituent entities of the multinational group that are established in that

jurisdiction.

Romgaz Group is a multinational group, as Romgaz Black Sea Limited is a company incorporated in the

Commonwealth of the Bahamas. However, Romgaz Black Sea Limited has no operations outside Romania, the

company being involved in only one project, namely the development of the Neptun Deep project in Romania. As

such, all tangible assets are located in Romania, which is considered to be the reference jurisdiction.

Considering the above, the Group did not recognize any additional income tax from the application of Pillar Two

Model rules.

Judgments made in assessing the impact of climate change and the transition to a lower carbon economy

Romgaz pays special attention to decarbonization policies, to its contribution to achieving the decarbonization

targets assumed by the Paris Agreement and to the implementation of the legislation related to the European

Commission's Green Deal package. The Company's current strategy for the period 2022-2030 includes a series of

directions of action to reduce carbon emissions. Moreover, Romgaz is in the process of developing a decarbonization

strategy through which a detailed plan of long-term actions/projects/investments will be defined in order to achieve

the decarbonization targets. The Company’s strategy will also be updated after the completion of the

decarbonization strategy, in close correlation with it.

At the same time, taking into account a series of European legal acts related to the Green Deal policies that came

into force in 2024 and which involve a series of obligations on natural gas producers, Romgaz has initiated the

following steps:

a) Implementing Regulation (EU) No. 2024/1735 of the European Parliament and of the Council of June 13, 2024

on establishing a framework of measures for strengthening Europe’s net-zero technology manufacturing

ecosystem and amending Regulation (EU) 2018/1724 (NZIA Regulation)

The NZIA Regulation includes a chapter on carbon capture, transport and storage technology, the intention of which

is to accelerate and facilitate investments in such technologies.

It also sets a target of at least 50 million tons of CO

per year in storage capacity in depleted oil and gas fields and

in saline aquifers. In order to achieve this target, Article 23 (1) provides for oil and gas producers in the European

Union to create and make available, by 2030, CO

storage capacities, which will be established by the European

Commission and calculated proportionally to the share of oil and natural gas production at EU level between January

1, 2020 and December 31, 2023. According to our estimates, Romgaz will have to ensure a capacity of about 4 million

tons/year. The exact capacity related to the storage obligation that will be incumbent on each entity will be

established by the European Commission in 2025.

S.N.G.N. ROMGAZ S.A.

NOTES

In order to implement the requirements of this regulation, and from the perspective of a potential diversification of

the Company's business and the orientation towards activities with a low carbon footprint, Romgaz will start an

analysis on the opportunity and technical feasibility of transforming depleted natural gas fields into CO

storage

sites.

At the same time, taking into account the obligation imposed by the NZIA Regulation, the Company will continue

the steps towards the implementation of carbon capture and storage (CCS) projects if the technical, economic and

commercial studies and analyses demonstrate the feasibility of such investments.

b) Implementing Regulation (EU) 2024/1787 of the European Parliament and of the Council of June 13, 2024 on

the reduction of methane emissions in the energy sector and amending Regulation (EU) 2019/942 (REM

Regulation)

The REM Regulation establishes strict rules for the European energy sector on (i) the measurement and reporting of

methane emissions, (ii) the periodic monitoring of installations/equipment to detect gas leaks early and eliminate

them through immediate interventions, (iii) the limitation of the release of methane into the atmosphere and (iv)

actions to reduce emissions from inactive or abandoned wells.

The implementation of the REM Regulation represents a challenge for the Company in the context in which the

company operates one of the largest and most complex natural gas extraction infrastructures located throughout

the country, much of this infrastructure having a remarkable age. However, given the importance of adopting the

measures provided for by the REM Regulation both from an environmental point of view and from that of reducing

losses and increasing efficiency, the necessary steps were taken to implement the provisions of the Regulation.

NZIA Regulation and REM Regulation did not lead to the recognition of any impairment on current gas fields or to

the reduction of gas reserves. Gas is a transition fuel and management believe such regulations will not lead to

accelerated closure of existing fields.

The Company is monitoring the evolution of regulations at EU and national level and continuously assesses their

impact on its activities. Currently, the Company does not consider climate change will have an effect on the useful

life on property, plant and equipment, decommissioning provision, impairment or other general provisions.

Comparative information

For each item of the statement of financial position, the statement of comprehensive income and, where is the

case, for the statement of changes in equity and for the statement of cash flows, for comparative information

purposes is presented the value of the corresponding item for the previous period ended, unless the changes are

insignificant. In addition, the Company presents an additional statement of financial position at the beginning of the

earliest period presented when there is a retrospective application of an accounting policy, a retrospective

restatement, or a reclassification of items in the financial statements, which has a material impact on the Company.

3. REVENUE AND OTHER INCOME

Year ended

December 31, 2024

Year ended

December 31, 2023

'000 RON

Revenue from gas sold, including fulfilling

activities - own production

6,886,938

7,960,763

Revenue from gas sold – other arrangements

25,471

28,628

Revenue from gas acquired for resale

20,351

19,542

Revenue from electricity

374,990

406,363

Revenue from services

30,626

30,154

Revenue from sale of goods

96,879

61,977

Other revenues from contracts

708

Total revenue from contracts with customers

7,435,963

8,508,135

Revenues from rental activities

96,007

111,151

Total revenue

7,531,970

8,619,286

Other operating income

52,921

20,866

Total revenue and other income

7,584,891

8,640,152

S.N.G.N. ROMGAZ S.A.

NOTES

Year ended

December 31, 2024

Year ended

December 31, 2023

'000 RON

Revenue at a point in time

7,030,387

8,071,652

Revenue over time

405,576

436,483

Total revenue from contracts with customers

7,435,963

8,508,135

4. FINANCE INCOME

Year ended

December 31, 2024

Year ended

December 31, 2023

'000 RON

Income from dividends

30,643

50,247

Interest income

258,554

222,780

Total

289,197

273,027

Interest income is derived from the Company’s investments in bank deposits.

5. COST OF COMMODITIES SOLD, RAW MATERIALS AND CONSUMABLES

Year ended

December 31, 2024

Year ended

December 31, 2023

restated

'000 RON

Consumables used

147,955

100,485

Technological consumption

25,476

30,392

Other consumables

6,958

6,040

Total cost of raw materials and consumables

180,389

136,917

Cost of gas acquired for resale, sold

24,643

20,291

Cost of electricity imbalances *

93,820

85,477

Cost of other goods sold

1,231

1,292

Total cost of commodities sold

119,694

107,060

*) Imbalances are generated when quantities actually delivered are lower than the quantities contracted. The difference must be

purchased.

6. OTHER GAINS AND LOSSES

Year ended

December 31, 2024

Year ended

December 31, 2023

'000 RON

Foreign exchange gain

7,073

25,676

Foreign exchange loss

(7,057)

(32,528)

Net gain/(loss) on disposal of non-current assets

(19,897)

(4,734)

Net allowances for other receivables (note 16 c)

(19)

4,029

Net write down allowances for inventory (note

15)

(6,818)

(4,568)

Losses from trade receivables

(2)

Other gains and losses

Total net gain/(net loss)

(26,718)

(12,122)

S.N.G.N. ROMGAZ S.A.

NOTES

7. DEPRECIATION, AMORTIZATION AND IMPAIRMENT EXPENSES

Year ended

December 31, 2024

Year ended

December 31, 2023

restated

'000 RON

Depreciation and amortization

490,349

454,219

out of which:

- depreciation of property, plant and equipment

481,031

446,814

- amortization of intangible assets (note 14 a)

6,583

5,920

- amortization of right-of use assets (note 14 b)

2,735

1,485

Net impairment of property, plant and

equipment, including exploration assets

113,725

95,446

Total depreciation, amortization and

impairment

604,074

549,665

8. EMPLOYEE BENEFIT EXPENSE

Year ended

December 31, 2024

Year ended

December 31, 2023

restated

'000 RON

Wages and salaries

962,776

863,262

Social security charges

34,577

30,735

Meal tickets

44,201

34,814

Other benefits according to collective labor

contract

39,116

39,362

Private pension payments

10,325

10,295

Private health insurance

10,781

10,318

Total employee benefit expense

1,101,776

988,786

9. FINANCE COSTS

Year ended

December 31, 2024

Year ended

December 31, 2023

'000 RON

Interest expense

68,302

43,748

Unwinding of the decommissioning provision

(note 18 a)

24,108

18,165

Total

92,410

61,913

10. TAXES AND DUTIES

Year ended

December 31, 2024

Year ended

December 31, 2023

restated

'000 RON

Royalties

572,691

583,516

Windfall tax

1,201,360

889,799

Energy transition fund

23,626

(1,546)

Other taxes and duties

8,924

7,493

Total

1,806,601

1,479,262

S.N.G.N. ROMGAZ S.A.

NOTES

11. INCOME TAX

Year ended

December 31, 2024

Year ended

December 31, 2023

restated

'000 RON

Current tax expense (note 11 a)

449,144

661,356

Deferred income tax (income)/expense (note 11

(42,745)

(1,531)

Solidarity contribution (note 11 b)

1,687,811

Income tax expense

406,399

2,347,636

December 31, 2024

December 31, 2023

restated

'000 RON

Current income tax liability

14,048

41,848

Solidarity contribution (note 11 b)

(16,609)

1,670,310

Current tax liability

(2,561)

1,712,158

a) Current and deferred income tax

The tax rate used for the reconciliations below for the year ended December 31, 2024, respectively year ended

December 31, 2023 is 16% payable by corporate entities in Romania on taxable profits.

The total charge for the period can be reconciled to the accounting profit as follows:

Year ended

December 31, 2024

Year ended

December 31, 2023

restated

'000 RON

Accounting profit before tax (after solidarity

contribution)

3,497,096

3,234,873

Income tax expense calculated at 16%

559,535

517,580

Effect of income exempt of taxation

(56,768)

(97,647)

Effect of expenses that are not deductible in

determining taxable profit (note 11 b)

25,870

367,464

Effect of current income tax reduction, *)

(79,040)

(90,835)

Effect of tax incentive for reinvested profit

(7,001)

(11,773)

Effect of tax incentive for legal reserves

(27,977)

Effect of the benefit from tax credits, used to

reduce current tax expense

(8,220)

(25,071)

Effect of income tax expense related to previous

years

107

Income tax expense (without solidarity

contribution)

406,399

659,825

*) Income tax reductions are calculated according to Government Emergency Ordinance no. 153/2020 which allows

for certain reductions in the level of the income tax if equity is positive or if equity is increased against a specific

period (2020 level or previous year’s level). Reductions vary based on the level of the increase in equity.

S.N.G.N. ROMGAZ S.A.

NOTES

Components of deferred tax (asset)/liability:

December 31, 2024

December 31, 2023

Cumulative

temporary

differences

Deferred tax

(asset)/ liability

Cumulative

temporary

differences

Deferred

tax (asset)/

liability

'000 RON

Provisions

(655,030)

(104,805)

(667,242)

(106,759)

Property, plant and equipment

274,611

43,938

459,778

73,565

Exploration assets *)

(438,382)

(70,141)

(513,724)

(82,196)

Financial investments

(182)

(29)

(182)

(29)

Inventory

(69,838)

(11,174)

(40,676)

(6,508)

Trade receivables and other

receivables

(246,309)

(39,409)

(97,576)

(15,612)

Total

(1,135,130)

(181,620)

(859,622)

(137,539)

*) According to the Fiscal Code applicable in Romania, expenses related to location, exploration, development or

any preparatory activity for the exploitation of natural resources, which, according to the applicable accounting

regulations, are recorded directly in the result, are recovered in equal rates for a period of 5 years, starting with

the month in which the expenses are incurred. Also, for fixed assets specific to the exploration and production of

gas resources, the carrying tax value of fixed assets written-off is deducted using the tax depreciation method used

before their write-off for the remaining period of depreciation, had the asset not been written-off. All of these costs

are treated as assets only from a tax point of view and generate a deferred tax asset.

Movement in deferred tax balances

Deferred

tax (asset)/

liability

December

31, 2022

Recorded

in profit or

loss in

2023

Charged to

OCI in

2023

Deferred

tax (asset)/

liability

December

31, 2023

Recorded

in profit or

loss in

2024

Charged to

OCI in

2024

Deferred

tax (asset)/

liability

December

31, 2024

'000 RON

Provisions

(73,300)

(31,965)

(1,494)

(106,759)

3,290

(1,336)

(104,805)

Property, plant and equipment

39,344

34,221

73,565

(29,627)

43,938

Exploration assets

(79,197)

(2,999)

(82,196)

12,055

(70,141)

Financial investments

(156)

127

(29)

Inventory

(5,593)

(915)

(6,508)

(4,666)

(11,174)

Trade receivables and other

receivables

(15,612)

(23,797)

(39,409)

Total

(134,514)

(1,531)

(1,494)

(137,539)

(42,745)

(1,336)

(181,620)

OCI – other comprehensive income

b) Solidarity contribution

According to legislation, the solidarity contribution was owed only for the years 2022 and 2023. From 2024, the

contribution is no longer owed. The tax was non-deductible in the current income tax calculation.

Following the correction of the error mentioned in note 29, the Company recalculated the effect of the error on the

solidarity contribution, resulting a receivable of RON 16,609.

S.N.G.N. ROMGAZ S.A.

NOTES

12. PROPERTY, PLANT AND EQUIPMENT

Land and

land

improvements

Buildings

Gas

properties

Plant,

machinery

and

equipment

Fixtures,

fittings and

office

equipment

Storage

assets **)

Exploration

assets

Capital

work in

progress

Total

'000 RON

Cost

As of January 1, 2024 before

restatement

98,968

764,756

7,518,951

1,053,318

109,898

213,201

340,161

1,907,982

12,007,235

Effect of restatements (note

29)

20,165

214,488

(4,221)

173,284

8,163

1,434,189

1,846,068

As of January 1, 2024 as

restated

119,133

979,244

7,514,730

1,226,602

118,061

1,647,390

340,161

1,907,982

13,853,303

Additions *)

23,827

199,871

743,116

966,829

Transfers

2,291

15,369

475,460

77,529

8,574

(17,836)

(561,387)

Disposals

(1,952)

(162,576)

(15,941)

(7,744)

(4,733)

(7,813)

(3,801)

(204,560)

As of December 31, 2024

121,424

992,661

7,851,441

1,288,205

118,891

1,642,657

514,383

2,085,910

14,615,572

Accumulated depreciation

As of January 1, 2024 before

restatement

347,246

5,081,262

748,820

79,149

8,082

6,264,559

Effect of restatements (note

29)

94,085

1,008

120,741

6,907

868,866

1,091,607

As of January 1, 2024 as

restated

441,331

5,082,270

869,561

86,056

876,948

7,356,166

Depreciation

26,641

325,316

67,973

8,929

52,172

481,031

Disposals

(1,198)

(37,792)

(15,282)

(7,740)

(4,397)

(66,409)

As of December 31, 2024

466,774

5,369,794

922,252

87,245

924,723

7,770,788

S.N.G.N. ROMGAZ S.A.

NOTES

Land and

land

improvements

Buildings

Gas

properties

Plant,

machinery

and

equipment

Fixtures,

fittings and

office

equipment

Storage

assets **)

Exploration

assets

Capital

work in

progress

Total

'000 RON

Impairment

As of January 1, 2024 before

restatement

3,180

80,048

511,694

89,389

1,586

1,598

144,674

281,030

1,113,199

Effect of restatements (note

29)

971

12,776

13,769

As of January 1, 2024 as

restated

3,180

81,019

511,694

89,401

1,596

14,374

144,674

281,030

1,126,968

Charge ***)

2,310

55,468

4,572

716

112

29,897

67,521

160,596

Transfers

69,019

(69,019)

Release/utilization

(1,661)

(84,939)

(3,362)

(1,233)

(450)

(10,200)

(4,702)

(106,547)

As of December 31, 2024

3,180

81,668

551,242

90,611

1,079

14,036

164,371

274,830

1,181,017

Carrying value

As of January 1, 2024 before

restatement

95,788

337,462

1,925,995

215,109

29,163

203,521

195,487

1,626,952

4,629,477

Effect of restatements (note

29)

20,165

119,432

(5,229)

52,531

1,246

552,547

740,692

As of January 1, 2024 as

restated

115,953

456,894

1,920,766

267,640

30,409

756,068

195,487

1,626,952

5,370,169

As of December 31, 2024

118,244

444,219

1,930,405

275,342

30,567

703,898

350,012

1,811,080

5,663,767

*) Additions of capital work in progress include RON 209,847 thousand related to the new Iernut power plant.

**) Including gas cushion of RON 216,343 thousand. No changes were recorded during the year.

***) The impairment recorded during the year refers to individual assets; such assets are fully impaired, as described in note 2.

S.N.G.N. ROMGAZ S.A.

NOTES

Land and

land

improvements

Buildings

Gas

properties

Plant,

machinery

and

equipment

Fixtures,

fittings and

office

equipment

Storage

assets **)

Exploration

assets

Capital

work in

progress

Total

'000 RON

Cost

As of January 1, 2023 before

restatement

97,428

718,294

7,181,827

999,680

105,136

213,387

336,494

2,027,403

11,679,649

Effect of restatements (note

29)

20,542

214,783

(15,387)

173,330

8,412

1,440,226

1,841,906

As of January 1, 2023 as

restated

117,970

933,077

7,166,440

1,173,010

113,548

1,653,613

336,494

2,027,403

13,521,555

Additions *)

377

110,100

50,747

545,414

706,648

Transfers

1,163

47,584

505,052

73,066

16,846

(6,249)

(637,462)

Disposals

(1,132)

(278,028)

(19,428)

(12,084)

(186)

(40,831)

(27,373)

(379,062)

Effect of restatements during

the year (note 29)

(377)

(295)

11,166

(46)

(249)

(6,037)

4,162

As of December 31, 2023 as

restated

119,133

979,244

7,514,730

1,226,602

118,061

1,647,390

340,161

1,907,982

13,853,302

Accumulated depreciation

As of January 1, 2023 before

restatement

329,168

4,890,092

715,794

84,125

7,767

6,026,946

Effect of restatements (note

29)

86,380

1,175

105,861

6,745

820,143

1,020,304

As of January 1, 2023 as

restated

415,548

4,891,267

821,655

90,870

827,910

7,047,250

Depreciation

18,656

291,231

52,382

7,029

369,318

Disposals

(578)

(100,061)

(19,356)

(12,005)

295

(131,705)

Effect of restatements during

the year (note 29)

7,705

(167)

14,880

162

48,723

71,303

As of December 31, 2023 as

restated

441,331

5,082,270

869,561

86,056

876,948

7,356,166

S.N.G.N. ROMGAZ S.A.

NOTES

Land and

land

improvements

Buildings

Gas

properties

Plant,

machinery

and

equipment

Fixtures,

fittings and

office

equipment

Storage

assets **)

Exploration

assets

Capital

work in

progress

Total

'000 RON

Impairment

As of January 1, 2023 before

restatement

3,180

51,964

651,677

86,425

1,174

2,097

161,509

307,619

1,265,645

Effect of restatements (note

29)

1,077

2,061

3,156

As of January 1, 2023 as

restated

3,180

53,041

651,677

86,442

1,175

4,158

161,509

307,619

1,268,801

Charge ***)

28,598

91,030

1,782

494

491

25,311

57,296

205,002

Transfers

38,882

1,252

(40,134)

Release/utilization

(514)

(269,895)

(70)

(82)

(990)

(42,146)

(43,751)

(357,448)

Effect of restatements during

the year (note 29)

(106)

(5)

10,715

10,613

As of December 31, 2023 as

restated

3,180

81,019

511,694

89,401

1,596

14,374

144,674

281,030

1,126,968

Carrying value

As of January 1, 2023 before

restatement

94,248

337,162

1,640,058

197,461

19,837

203,523

174,985

1,719,784

4,387,058

Effect of restatements (note

29)

20,542

127,326

(16,562)

67,452

1,666

618,022

818,446

As of January 1, 2023

restated

114,790

464,488

1,623,496

264,913

21,503

821,545

174,985

1,719,784

5,205,504

As of December 31, 2023

before restatement

95,788

337,462

1,925,995

215,109

29,163

203,521

195,487

1,626,952

4,629,477

Effect of restatements (note

29)

20,165

119,432

(5,229)

52,531

1,246

552,547

740,692

As of December 31, 2023 as

restated

115,953

456,894

1,920,766

267,640

30,409

756,068

195,487

1,626,952

5,370,169

*) Additions of capital work in progress include RON 56,026 for the new Iernut power plant.

**) Including gas cushion of RON 216,343 thousand. No changes were recorded during the year.

***) The impairment recorded during the year refers to individual assets; such assets are fully impaired, as described in note 2.

S.N.G.N. ROMGAZ S.A.

NOTES

Rented assets

Carrying value of property plant and equipment rented to third parties:

December 31, 2024

December 31, 2023

'000 RON

Buildings

111,061

118,965

Plant, machinery and equipment

37,698

52,531

Fixtures, fittings and office equipment

893

1,246

Storage assets

485,802

535,737

Carrying value of rented property plant and

equipment

635,454

708,479

Buildings

Fixtures, fittings

and office

equipment

Plant, machinery

and equipment

Storage assets

Total

'000 RON

Cost

As of January 1,

2024

214,013

8,163

173,284

1,406,991

1,802,451

Additions

2,194

Disposals

(113)

(260)

(259)

(3,240)

(3,872)

As of December

31, 2024

213,900

7,903

173,025

1,405,946

1,800,773

Accumulated

depreciation

As of January 1,

2024

93,733

6,908

120,751

860,003

1,081,394

Depreciation

7,840

353

14,832

52,164

75,190

Disposals

(49)

(260)

(259)

(3,212)

(3,780)

As of December

31, 2024

101,524

7,001

135,324

908,956

1,152,804

Impairment

As of January 1,

2024

1,315

11,251

12,578

Charge

112

Release/

utilization

(175)

As of December

31, 2024

1,315

11,187

12,515

Carrying value

As of January 1,

2024

118,965

1,246

52,530

535,737

708,479

As of December

31, 2024

111,061

893

37,698

485,802

635,454

S.N.G.N. ROMGAZ S.A.

NOTES

Buildings

Fixtures, fittings

and office

equipment

Plant, machinery

and equipment

Storage assets

Total

'000 RON

Cost

As of January 1,

2023

214,783

8,412

173,330

1,407,799

1,804,324

Additions

11,368

Disposals

(770)

(249)

(46)

(12,175)

(13,240)

As of December

31, 2023

214,013

8,163

173,284

1,406,991

1,802,451

Accumulated

depreciation

As of January 1,

2023

86,438

6,746

105,870

816,293

1,015,346

Depreciation

7,899

411

14,926

54,428

77,664

Disposals

(603)

(249)

(46)

(10,718)

(11,616)

As of December

31, 2023

93,733

6,908

120,751

860,003

1,081,394

Impairment

As of January 1,

2023

1,414

343

1,765

Charge

11,059

11,068

Release/

utilization

(99)

(5)

(151)

(255)

As of December

31, 2023

1,315

11,251

12,578

Carrying value

As of January 1,

2023

126,931

1,666

67,452

591,164

787,213

As of December

31, 2023

118,965

1,246

52,531

535,737

708,479

Maturity analysis of revenue from rented assets

December 31, 2024

December 31, 2023

'000 RON

Year 1

84,013

85,174

S.N.G.N. ROMGAZ S.A.

NOTES

13. EXPLORATION AND EVALUATION FOR NATURAL GAS RESOURCES

The following financial information represents the amounts included within the Company’s totals relating to activity

associated with the exploration for and evaluation of natural gas resources.

Year ended

December 31, 2024

Year ended

December 31, 2023

'000 RON

Exploration assets written off

Seismic, geological, geophysical studies

73,786

83,048

Total exploration expense

73,786

83,051

Net movement in exploration assets’

impairment (net income)/net loss

26,980

23,361

Net cash used in exploration investing activities

(199,341)

(50,746)

December 31, 2024

December 31, 2023

'000 RON

Exploration assets included in property, plant

and equipment (note 12)

350,012

195,487

Liabilities included in trade payables

(32,303)

(13,342)

Net assets

317,709

182,145

14. INTANGIBLE ASSETS. RIGHT OF USE ASSETS

a) Intangible assets

2024

2023

restated

'000 RON

Cost

As of January 1 as restated

116,846

122,587

Additions

3,405

1,409

Disposals

(1,443)

(7,150)

As of December 31

118,808

116,846

Accumulated amortization

As of January 1 as restated

101,608

102,837

Charge

6,583

5,920

Disposals

(7,149)

As of December 31

108,191

101,608

Carrying value

As of January 1 as restated

15,238

19,750

As of December 31

10,617

15,238

S.N.G.N. ROMGAZ S.A.

NOTES

b) Right of use assets

2024

2023

'000 RON

Cost

As of January 1

15,391

9,918

Effects of rent index updates

640

1,170

New contracts

1,500

4,303

As of December 31

17,531

15,391

Accumulated amortization

As of January 1

4,617

3,132

Charge

2,735

1,485

As of December 31

7,352

4,617

Carrying value

As of January 1

10,774

6,786

As of December 31

10,179

10,774

15. INVENTORIES

December 31, 2024

December 31, 2023

'000 RON

Spare parts and materials

303,200

248,787

Finished goods (gas)

113,560

90,594

Other inventories

984

694

Inventories at third parties

33,312

16,695

Write-down allowance for spare parts and

materials

(69,566)

(62,925)

Write-down allowance for other inventories

(273)

(96)

Total

381,217

293,749

16. ACCOUNTS RECEIVABLE. CONTRACT LIABILITIES

a) Trade and other receivables

December 31, 2024

December 31, 2023

'000 RON

Trade receivables *

1,280,462

1,891,001

Allowances for expected credit losses (note 16

(513,897)

(553,564)

Total

766,565

1,337,437

*) Trade receivables as of December 31, 2024 include RON 161,531 thousand (December 31, 2023: RON 333,096 thousand) that

have to be paid by the Ministry of Energy (for non-household clients) and the Ministry of Labor (for household clients) based on

Government Emergency Ordinance no. 27/2022.

S.N.G.N. ROMGAZ S.A.

NOTES

b) Other assets

December 31, 2024

December 31, 2023

'000 RON

Loans to subsidiaries

302,080

531,727

Interest on loans to subsidiaries

34,928

17,983

Total other assets (long term)

337,008

549,710

Advances paid to suppliers

490

Joint operation receivables

2,932

7,974

Other receivables

28,682

20,541

Allowance for expected credit losses other

receivables (note 16 c)

(169)

Other debtors

46,667

46,823

Allowance for expected credit losses for other

debtors (note 16 c)

(46,048)

(46,029)

Prepayments

5,637

13,579

VAT not yet due

9,015

7,415

Other taxes receivable

417

Total other assets (short term)

47,623

50,152

c) Changes in the allowance for expected credit losses for trade and other receivables and other assets

2024

2023

'000 RON

At January 1

599,762

689,352

Charge in the allowance for other receivables

(note 6)

453

204

Charge in the allowance for trade receivables

36,366

7,940

Write-off against trade receivables *)

(1,188)

(41,847)

Release in the allowance for other receivables

(note 6)

(434)

(4,233)

Release in the allowance for trade receivables

(74,845)

(51,654)

At December 31

560,114

599,762

d) Credit risk exposure for trade and other receivables

December 31, 2024

Gross carrying amount

Expected credit loss

rate

Lifetime expected

credit losses

'000 RON

‘000 RON

Current receivables, including

accrued receivables

749,823

0.00%

less than 30 days overdue

14,391

6.08%

875

30 to 90 days overdue

1,897

93.83%

1,780

90 to 360 days overdue

31,815

98.66%

31,390

over 360 days overdue

482,536

99.44%

479,852

Total trade receivables

1,280,462

513,897

Current receivables were collected in 2025, hence no allowance was recorded on December 31, 2024.

S.N.G.N. ROMGAZ S.A.

NOTES

December 31, 2023

Gross carrying amount

Expected credit loss

rate

Lifetime expected

credit losses

'000 RON

‘000 RON

Current receivables, including

accrued receivables

1,320,745

0.00%

less than 30 days overdue

16,913

7.56%

1,278

30 to 90 days overdue

1,558

33.44%

521

90 to 360 days overdue

3,678

99.08%

3,644

over 360 days overdue

548,107

100.00%

548,107

Total trade receivables

1,891,001

553,564

e) Contract liabilities

Contract liabilities refer to cash received by the Company in advance for future deliveries; usually, advances are

received for deliveries during the following month.

Revenue was recognized in 2024 from the whole amount of outstanding contract liabilities on December 31, 2023.

Changes in contract liabilities on December 31, 2024 compared to December 31, 2023 are mainly caused by gas

prices.

17. SHARE CAPITAL

December 31, 2024

December 31, 2023

‘000 RON

3,854,224,000 fully paid ordinary shares (2023:

385,422,400 fully paid ordinary shares)

3,854,224

385,422

Total

3,854,224

385,422

The shareholding structure presenting the main shareholders as at December 31, 2024 is as follows:

No. of shares

Value

Percentage

‘000 RON

(%)

The Romanian State through the

Ministry of Energy

2,698,230,800

2,698,231

70.01

Legal entities

962,639,519

962,640

24.98

Physical persons

193,353,681

193,353

5.01

Total

3,854,224,000

3,854,224

100

All shares are ordinary and were subscribed and fully paid as at December 31, 2024. All shares carry equal voting

rights and have a nominal value of RON 1/share (December 31, 2023: RON 1/share).

In December 2023 the Extraordinary General Meeting of Shareholders approved Romgaz’ share capital increase

through the incorporation of reserves of RON 3,468,802 thousand by issuing 3,468,801,600 shares with a nominal

value of RON 1/share, each shareholder registered on the Registration Date being entitled to 9 free shares for each

share held. The increase was registered in January 2024 at the Trade Register.

S.N.G.N. ROMGAZ S.A.

NOTES

18. PROVISIONS AND RETIREMENT BENEFIT OBLIGATION

December 31, 2024

December 31, 2023

'000 RON

Decommissioning provision (note 18 a)

351,789

373,536

Retirement benefit obligation (note 18 c)

191,416

177,721

Total long term provisions and obligations

543,205

551,257

Decommissioning provision (note 18 a)

28,937

32,049

Litigation provision (note 18 b) *)

6,579

18,839

Other provisions (note 18 b) **)

120,217

65,098

Total short term provisions

155,733

115,986

Total

698,938

667,243

*) The value of litigating cases in which the Company is involved is estimated at RON 41,698 thousand, being the

maxim exposure of the Company. The Company’s management considers that the provision of RON 6,579 thousand

is sufficient, based on current available information.

**) On December 31, 2024, other provisions of RON 120,217 thousand include the provision for employee’s

participation to profit of RON 46,939 thousand (December 31, 2023: RON 42,364 thousand), the provision for taxes

of RON 7,018 thousand (December 31, 2023: RON 6,514 thousand), the provision for CO

certificates of RON 43,907

thousand (December 31, 2023: RON 0),a provision of RON 6,939 thousand for the variable remuneration of the board

of directors and officers with a mandate contract to which they will be entitled if they meet the key performance

indicators approved by shareholders (December 31, 2023: RON 4,666 thousand) and the provision for vacation days

not taken of RON 15,415 thousand (December 31, 2023: RON 11,554 thousand).

a) Decommissioning provision

2024

2023

restated

'000 RON

At January 1

405,585

236,490

Additional provision recorded against non-

current assets

23,853

118,230

Unwinding effect (note 9)

24,108

18,165

Recorded in profit or loss

(14,820)

33,763

Decrease recorded against non-current assets

(58,000)

(1,063)

At December 31

380,726

405,585

The Company makes full provision for the future cost of decommissioning natural gas wells on a discounted basis

upon installation. The provision for the costs of decommissioning these wells at the end of their economic lives has

been estimated using existing technology, at current prices or future assumptions, depending on the expected timing

of the activity, and discounted using a rate of 7.37% (year ended December 31, 2023: 6.23%). While the provision is

based on the best estimate of future costs and the economic lives of the wells, there is uncertainty regarding both

the amount and timing of these costs.

The increase with 1 percentage point of the discount rate would decrease the decommissioning provision with RON

52,698 thousand (2023: RON 62,650 thousand). The decrease with 1 percentage point of the discount rate would

increase the decommissioning provision with RON 66,849 thousand (2023: RON 81,201 thousand).

The increase with 1 percentage point of the inflation rate would increase the decommissioning provision with RON

69,237 thousand (2023: RON 83,103 thousand). The decrease with 1 percentage point of the inflation rate would

decrease the decommissioning provision with RON 55,105 thousand (2023: RON 64,871 thousand).

S.N.G.N. ROMGAZ S.A.

NOTES

b) Other provisions

Litigation provision

Other provisions

Total

‘000 RON

At January 1, 2024

18,839

65,098

83,937

Additional provision in the period

9,770

206,801

216,571

Provisions used in the period

(12,144)

(148,636)

(160,780)

Unused amounts during the period,

reversed

(9,886)

(3,046)

(12,932)

At December 31, 2024

6,579

120,217

126,796

Litigation provision

Other provisions

Total

‘000 RON

At January 1, 2023

6,620

284,201

290,821

Additional provision in the period

18,762

155,713

174,475

Provisions used in the period

(4,025)

(369,311)

(373,336)

Unused amounts during the period,

reversed

(2,518)

(5,505)

(8,023)

At December 31, 2023

18,839

65,098

83,937

The movement in other provisions refers mainly to the CO

certificates.

c) Retirement benefit obligation

Movement of the retirement benefit

obligation

2024

2023

'000 RON

At January 1

177,721

158,934

Interest cost

9,967

12,392

Cost of current service

11,464

10,127

Payments during the year

(16,088)

(13,070)

Actuarial (gain)/loss for the period

8,352

9,338

At December 31

191,416

177,721

Except for actuarial gains/losses, all movements in the retirement benefit obligation are recognized as employee

benefit expenses.

In determining the retirement benefit obligation, the following significant assumptions were used:

• No layoffs or restructurings are planned;

• Average discount rate: 6.8% (2023: 5.9%);

• Average inflation rate: 3.8% in 2025; 2.9% in 2026; 2.7% in 2027; 2.5% in 2028-2031 period, following a

decreasing trend in the next years (2023: 4.8% in 2024; 3.5% in 2025; 3.0% in 2026; 2.5% in 2027-2031 period,

following a decreasing trend in the next years.

S.N.G.N. ROMGAZ S.A.

NOTES

Sensitivity analysis

The discount rate has a significant effect on the obligation. Isolated change in assumptions with 1 percentage point

would have the following effect on the obligation:

Increase of 1% in assumptions

Decrease of 1% in assumptions

'000 RON

December 31, 2024

Average discount rate

(16,030)

18,343

Salaries’ growth rate

18,777

(16,647)

December 31, 2023

Average discount rate

(15,499)

17,826

Salaries’ growth rate

17,636

(15,620)

Maturity analysis of cash outflows

2024

2023

'000 RON

Up to 1 year

16,676

16,351

1-2 years

13,972

8,190

2-5 years

52,550

45,986

5-10 years

145,866

124,933

Over 10 years

611,347

503,046

19. DEFERRED INCOME

December 31, 2024

December 31, 2023

'000 RON

Amounts collected from NIP (see below)

292,446

276,519

Other deferred revenue

122

133

Other amounts received as subsidies

Total long term deferred revenue

292,657

276,749

Other amounts received as subsidies

486

Total short term deferred revenue

486

Total deferred revenue

293,143

276,756

National Investment Plan (“NIP”)

In Government Decision no. 1096/2013 approving the mechanism for free allocation of greenhouse gas emission

allowances to electricity producers for the period 2013-2020, Annex no. 3 "National Investment Plan", Romgaz is

included with the investment "Combined Gas Turbine Cycle".

For this investment, in 2017 Romgaz signed a financing agreement with the Ministry of Energy, whereby the Ministry

of Energy undertakes to grant a non-reimbursable financing of RON 320,912 thousand, representing a maximum of

25% of the total value of eligible expenditure of the investment. By December 31, 2024 the Company collected RON

292,446 thousand. Amounts received under this contract will be transferred to income based on the depreciation

rate of the investment. No income was recognized by December 31, 2024 as the plant was not yet commissioned.

As per Government Decision no. 1489/November 21, 2024 the completion and commissioning period of investments

financed from the National Investment Plan was extended until June 30, 2025 and the reimbursement period until

December 31, 2025. If the plant is not commissioned by June 30, 2025, the government grant must be repaid to the

Ministry of Energy.

S.N.G.N. ROMGAZ S.A.

NOTES

20. TRADE AND OTHER CURRENT LIABILITIES

December 31, 2024

December 31, 2023

'000 RON

Accruals

116,479

60,934

Trade payables

23,186

48,062

Payables to fixed assets suppliers

57,957

30,737

Total trade payables

197,622

139,733

Payables related to employees

41,860

36,226

Royalties

157,419

170,255

Contribution to Energy Transition Fund

6,510

Social security taxes

37,586

30,270

Other current liabilities

11,983

10,343

Greenhouse gas certificates surrender

liability*)

137,244

208,618

VAT

12,016

4,284

Dividends payable

1,365

1,453

Windfall tax

114,527

29,420

Other taxes

3,876

2,650

Total other liabilities

524,386

493,557

Total trade and other liabilities

722,008

633,290

*) According to legislation, greenhouse gas certificates must be submitted to the relevant bodies until September, 2025. The

balance as of December 31, 2024 relates to certificates acquired in 2024, not yet submitted.

21. FINANCIAL RISK MANAGEMENT

Financial risk factors

The Company’s activities expose it to a variety of financial risks: market risk (including currency risk, inflation risk,

interest rate risk), credit risk, liquidity risk. The Company’s overall risk management program focuses on the

unpredictability of financial markets and seeks to minimize potential adverse effects on the Company’s financial

performance within certain limits. However, the use of this approach does not prevent losses outside of these limits

in the event of more significant market movements. The Company does not use derivative financial instruments to

hedge risk exposures.

The Company has formal procedures on risk management that ensure risks are identified and controlled by putting

in place a system that keeps risks at an acceptable level. Risk management is an ongoing process that involves

identifying the risks that could affect meeting the companies’ objectives, assessing the risks identified, managing

the risks, identifying control measures for significant risks and setting up an annual plan to implement control

measures for significant risks.

Risk assessment considers probability and impact to determine whether measures need to be taken. Based on the

risk exposure, the tolerance level is determined based on a matrix. Tolerance levels range from tolerable risk that

do not require any measure, to intolerable risks that need urgent control measures.

Risks identified may be accepted, monitored, avoided, treated or transferred.

(a) Market risk

(i) Foreign exchange risk

The Company is exposed to currency risk as a result of exposure to various currencies. Foreign exchange risk arises

from future commercial transactions and recognized assets and liabilities.

The Company is mainly exposed to currency risk generated by EUR against RON as a result of the cash, bank

borrowings and bonds. The Company does not hedge the risk, but monitors the changes in exchange rates.

As of December 31, 2024, the official exchange rate was RON 4.9741 to EUR 1 (December 31, 2023: RON 4.9746 to EUR 1).

S.N.G.N. ROMGAZ S.A.

NOTES

EUR

GBP

USD

MDL

RON

December 31, 2024

1 EUR =

4.9741

1 GBP =

5.9951

1 USD =

4.7768

1 MDL =

0.2576

1 RON

Total

'000 RON

Financial assets

Cash and cash

equivalents

109,332

263

1,602,577

1,712,183

Loans to subsidiaries

337,008

Bank deposits other than

cash and cash

equivalents

2,450,433

6,094

2,456,527

Trade and other

receivables

766,565

Total financial assets

2,559,765

263

2,712,244

5,272,283

Financial liabilities

Trade payables and other

payables

(9)

(197,613)

(197,622)

Lease liability

(6,811)

(5,521)

(12,332)

Bank borrowings

(808,346)

Bonds

(2,500,978)

Total financial liabilities

(3,316,135)

(9)

(203,134)

(3,519,278)

Net

(756,370)

(6)

263

2,509,110

1,753,005

EUR

GBP

USD

RON

December 31, 2023

1 EUR =

4.9746

1 GBP =

5.7225

1 USD =

4.4958

1 RON

Total

'000 RON

Financial assets

Cash and cash equivalents

6,816

512,010

518,831

Loans to subsidiaries

549,710

Bank deposits other than cash

and cash equivalents

2,344,349

Trade and other receivables

1,337,437

Total financial assets

6,816

4,743,506

4,750,327

Financial liabilities

Trade payables and other

payables

(31)

(43)

(8)

(139,651)

(139,733)

Lease liability

(7,396)

(5,077)

(12,473)

Bank borrowings

(1,131,722)

Total financial liabilities

(1,139,149)

(43)

(8)

(144,728)

(1,283,928)

Net

(1,132,333)

(42)

(4)

4,598,778

3,466,399

The Company is mainly exposed to currency risk generated by EUR against RON. The table below details the

sensitivity of the Company’s result to a 5% increase/decrease in the EUR exchange rate against the RON. The 5% rate

is the rate used in internal reports to management on foreign currency risk and represents management's assessment

of reasonable changes in the exchange rate. Sensitivity analysis includes only monetary items denominated in foreign

currency in the balance sheet.

S.N.G.N. ROMGAZ S.A.

NOTES

December 31, 2024

December 31, 2023

‘000 RON

RON weakening – loss

37,818

(56,618)

RON strengthening - gain

(37,818)

56,618

(ii) Inflation risk

The official annual inflation rate in Romania for 2024 was 5.59% as provided by the National Institute of Statistics. The

cumulative inflation rate for the last 3 years was under 100%. This factor, among others, led to the conclusion that Romania

is not a hyperinflationary economy.

(iii) Interest rate risk

The Company is exposed to interest rate risk, due to interest-bearing bank loans.

An increase of 1% in the interest rate on the bank borrowings would lead to an increase of the interest expense in 2025 of

RON 6,936 thousand.

Bank deposits, treasury bills and the bonds issued bear a fixed interest rate.

The Company does not hedge the risk, but monitors the changes in interest rates.

(b) Credit risk

Financial assets, which potentially subject the Company to credit risk, consist principally of trade receivables, cash and

cash equivalents, bank deposits other than cash equivalents. The Company has policies in place to ensure that sales are

made to customers with low credit risk. Also, sales have to be secured, either through advance payments, either through

bank letters of guarantee. The carrying amount of trade receivables, net of loss allowances, represents the maximum

amount exposed to credit risk. The Company has a concentration of credit risk in respect of its top three clients, which

amounts to 29.80% of net trade receivable balance at December 31, 2024 (its top 3 clients: 46.66% as of December 31,

2023).

Although collection of receivables could be influenced by economic factors, management believes that there is no

significant risk of loss to the Company beyond the loss allowance already recorded.

Romgaz’ Board of Directors approved an internal policy on placing excess cash in state bonds or bank deposits. Regarding

bank deposits, cash is only placed with banks having a good credit rating. If bank have no credit rating, excess cash may

be placed at them if they are majority state owned or maturity is short. Exposure to each bank cannot be higher than a

certain percent, a higher allocation being permitted only for banks having the Romanian State as majority shareholder.

Credit quality of cash and cash equivalent and bank deposits other than cash and cash equivalents is presented below:

Equivalent to external credit rating

December 31, 2024

December 31, 2023

‘000 RON

A+

474,311

536,427

BBB+

2,500,299

272,224

BBB

221,626

BBB-

1,013,590

1,618,785

100,001

No credit rating assigned

180,509

114,521

Total

4,168,710

2,863,583

Cash is placed with 14 banks, of which top 5 represent 95% of the Company’s cash, cash equivalent and bank deposits

other than cash and cash equivalents (2023: top 3 banks represent 77% of the Company’s cash, cash equivalent and

bank deposits other than cash and cash equivalents).

The Company’s objectives when managing capital are to safeguard the Company’s ability to continue as a going

concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal

capital structure to minimize the cost of capital. Capital includes equity, bank borrowings and bonds issued.

In order to maintain or adjust the capital structure, the Company may adjust the dividend policy, issue new shares

or sell assets to reduce debt.

The Company’s policy is to only resort to borrowing if investment needs cannot be financed internally.

S.N.G.N. ROMGAZ S.A.

NOTES

The Company’s capital management aims to ensure that it meets financial covenants attached to the interest-

bearing loans. Breaches in meeting the financial covenants would permit the bank to immediately call borrowings.

There have been no breaches of the financial covenants of interest-bearing loans in the current period. Covenants

on existing loans need to be complied at each year end; however, these are monitored regularly to identify any risk

of non-compliance, so that measures are taken timely.

(d) Fair value estimation

Carrying amount of financial assets and liabilities is assumed to approximate their fair value.

Financial instruments in the balance sheet include trade receivables, cash and cash equivalents, bank deposits other

than cash equivalents, trade payables, interest-bearing borrowings and bonds issues. Due to their short-term nature,

trade receivables, cash and cash equivalents, bank deposits other than cash equivalents, trade payables, fair value

approximates the carrying amount.

Bank borrowings’ fair value approximate their carrying amount, as these bear a variable rate of interest.

The bonds’ carrying value approximate their fair value. The bonds’ closing price on Luxembourg Stock Exchange on

December 31, 2024 was 101.011% (level 1 information).

(e) Liquidity risk management

Liquidity risk is addressed by constant monitoring the maturities of assets and liabilities. The Company’s policy is to

have collection periods shorter than payment terms. For unforeseen events that may disturb the cash at hand,

Romgaz signed two committed revolving credit facilities (see note 27) that may be drawn to meet payment terms.

The table below shows financial liabilities of the Company on contractual maturities. The amounts represent non-

discounted future cash flows generated by financial liabilities.

December

31, 2024

Due in

less than

a month

Due in

1-3 months

Due in

3 months

to 1 year

Due in

1-5 years

Due in over

5 years

Total

‘000 RON

Trade

payables

72,209

125,384

197,622

Bank

borrowings

80,884

242,487

484,975

808,346

Lease

liabilities

211

1,365

1,959

3,862

4,935

12,332

Bonds

24,545

2,476,433

2,500,978

Total

72,420

207,633

269,020

2,965,270

4,935

3,519,278

December

31, 2023

Due in

less than

a month

Due in

1-3 months

Due in

3 months

to 1 year

Due in

1-5 years

Due in over

5 years

Total

‘000 RON

Trade

payables

74,001

65,730

139,733

Bank

borrowings

80,837

242,512

808,373

1,131,722

Lease

liabilities

137

575

1,311

5,854

4,596

12,473

Total

74,138

147,142

243,825

814,227

4,596

1,283,928

Ultimate responsibility for liquidity risk management rests with the Company’s management, which has established

an appropriate liquidity risk management framework for the management of the Company’s short, medium and long-

term funding and liquidity management requirements. The Company manages liquidity risk by maintaining adequate

reserves, by continuously monitoring forecast and current cash flows and by matching the maturity profiles of

financial assets and liabilities.

S.N.G.N. ROMGAZ S.A.

NOTES

22. RELATED PARTY TRANSACTIONS AND BALANCES

i. Sales of goods and services

Year ended

Dec 31, 2024

Year ended

Dec 31, 2023

'000 RON

Subsidiaries *)

113,797

134,343

Associates

23,590

22,055

Total

137,387

156,398

*) Of RON 113,797 thousand representing revenue obtained from transactions with subsidiaries, RON 84,476 thousand

relate to rental revenues (2023: RON 101,122 thousand).

ii. Government related entities

The Company is controlled by the Ministry of Energy, on behalf of the Romanian State (note 17). As such, all

companies over which the Romanian State has control or significant influence are considered related parties of the

Company. The Company applies the disclosure exemption for Government related entities in IAS 24, and therefore

discloses significant transactions and balances. Significance is determined based on size and based on existing

regulatory/supervisory disclosure requirements (Law no. 24/2017 regarding Issuers of Financial Instruments and

Market Operations and F.S.A. Regulation no. 5/2018). Except for the transactions listed below, no other individually

significant transactions or collectively significant transactions were identified. Related party transactions are carried

out on market terms and there are no transactions outside normal day-to-day operations.

The table below shows the collectively significant sales of the Company to companies over which the Romanian State

has control or significant influence:

Year ended

Dec 31, 2024

Year ended

Dec 31, 2023

'000 RON

Electrocentrale București SA

566,334

1,115,191

Engie România SA

676,197

1,932,803

E.On Energie România SA

1,660,825

2,309,541

Total

2,903,356

5,357,535

The table below shows the collectively material cash and cash equivalents and bank deposits other than cash

equivalents balances at banks over which the Romanian State has control.

December 31, 2024

December 31, 2023

'000 RON

CEC Bank

100,000

Exim Banca Românească

988,086

1,044,284

Total

988,086

1,144,284

iii. Purchase of goods and services

Year ended

Dec 31, 2024

Year ended

Dec 31, 2023

'000 RON

Subsidiaries

62,338

33,342

Total

62,338

33,342

S.N.G.N. ROMGAZ S.A.

NOTES

iv. Interest and dividend income

Year ended

Dec 31, 2024

Year ended

Dec 31, 2023

'000 RON

Subsidiaries – interest income

83,496

17,643

Subsidiaries – dividend income

29,957

50,247

Total

113,453

68,230

v. Trade receivables

December 31, 2024

December 31, 2023

'000 RON

Subsidiaries

1,795

11,217

Total

1,795

11,217

vi. Net lease investment

December 31, 2024

December 31, 2023

'000 RON

Subsidiaries

225

315

Total

225

315

vii. Loans granted

December 31, 2024

December 31, 2023

'000 RON

Subsidiaries

337,008

549,710

Total

337,008

549,710

viii. Trade payables

December 31, 2024

December 31, 2023

'000 RON

Subsidiaries

1,950

Total

1,950

S.N.G.N. ROMGAZ S.A.

NOTES

23. INFORMATION REGARDING THE MEMBERS OF THE ADMINISTRATIVE, MANAGEMENT AND SUPERVISORY BODIES

The remuneration of executives and directors

The Company has no contractual obligations on pensions to former executives and directors of the Company.

During the years ended December 31, 2024 and December 31, 2023, no loans and advances were granted to

executives and directors of the Company, except for work related travel advances, and they do not owe any amounts

to the Company from such advances.

Executives include directors with mandate contracts and directors with labor contracts. Directors in the table below

refer to members of the Board of Directors.

Year ended

December 31, 2024

Year ended

December 31, 2023

'000 RON

Salaries expense with executives (gross)

35,407

27,578

of which, bonuses and variable component

(gross)

5,337

1,259

Remuneration expense with directors (gross)

3,513

1,934

of which, variable component (gross)

1,543

December 31, 2024

December 31, 2023

'000 RON

Salaries payable to executives

726

581

Salaries payable to directors

In addition to the above, on December 31, 2024 the Company recorded a provision for bonuses for executives and

directors of RON 6,939 thousand (December 31, 2023: RON 4,666 thousand).

24. INVESTMENTS IN SUBSIDIARIES AND ASSOCIATES

a) Investment in subsidiaries

Subsidiaries’ name

Main activity

Country of residence

and operations

Percentage of interest held (%)

December 31,

2024

December 31,

2023

SNGN ROMGAZ SA –

Filiala de

Înmagazinare Gaze

Naturale DEPOGAZ

Ploiesti SRL

Natural gas storage

Romania

100

Romgaz Black Sea

Limited

Gas exploration

and production

Country of

incorporation –

Bahamas

Country of operations –

Romania

100

Cost at

December 31, 2024

Cost at

December 31, 2023

’000 RON

SNGN ROMGAZ SA – Filiala de Înmagazinare Gaze

Naturale DEPOGAZ Ploiesti SRL

66,056

Romgaz Black Sea Limited *)

7,479,606

5,118,995

Total

7,545,662

5,185,051

*) In 2024, the Company converted RON 733,522 thousand, representing loans granted to Romgaz Black Sea Limited

and accumulated interest, in subsidiary’s share capital. Currently, the Company contributes equity to Romgaz Black

Sea Limited to finance the development of the Neptun Deep offshore block.

S.N.G.N. ROMGAZ S.A.

NOTES

b) Investments in associates

The Company’s investments in associates are accounted at cost less accumulated impairment. The shares are not

quoted on the stock exchange. No dividends were received in the years ended December 31, 2024, respectively,

December 31, 2023.

The Company’s investment in Agri LNG Project Company is not material. The investment is fully impaired.

Name of associate

Main activity

Place of

incorporation

and operation

Proportion of interest held (%)

December 31, 2024

December 31,

2023

SC Depomures SA

Tg.Mures

Storage of natural

gas

Romania

40.4014

SC Agri LNG Project

Company SRL

Feasibility projects

Romania

Name of

associate

Gross

carrying

value

as of

December

31, 2024

Impairment

as of

December

31, 2024

Carrying

value as of

December

31, 2024

Gross

carrying

value

as of

December

31, 2023

Impairment

as of

December

31, 2023

Carrying

value as of

December

31, 2023

’000 RON

SC Depomures

SA Tg.Mures

18,120

120

SC Agri LNG

Project

Company

SRL

182

(182)

182

(182)

Total

18,302

(182)

18,120

302

(182)

120

*) In 2024 the Company contributed RON 18,000 thousand to the share capital of SC Depomures SA Tg. Mures.

25. OTHER FINANCIAL INVESTMENTS

Other financial investments are recognized at fair value through profit or loss.

Except for the investment in Patria Bank, which is classified as level 1 instrument in the fair value hierarchy, all

other investments are included in level 3 category, according to IFRS 13.

Company

Principal activity

Place of

incorporation and

operation

Proportion of ownership interest and voting

power held (%)

December 31,

2024

December 31,

2023

Electrocentrale

București S.A.

Electricity and thermal

power producer

Romania

2.49

Patria Bank S.A.

Other activities –

financial

intermediations

Romania

0.02

Mi Petrogas

Services S.A.

Services related to oil

and natural gas

extraction, excluding

prospections

Romania

Lukoil

association

Petroleum exploration

operations

Romania

12.2

Electricity

Producers

Association-

HENRO

Non-governmental, non-

profit, independent

association

Romania

33.33

S.N.G.N. ROMGAZ S.A.

NOTES

Company

Fair value as of

December 31, 2024

Fair value as of

December 31, 2023

’000 RON

Electrocentrale București S.A. *)

Patria Bank S.A.**)

Mi Petrogas Services S.A.

Lukoil association

5,227

Electricity Producers Association-HENRO

250

Total

5,616

*) The fair value of the investment in Electrocentrale Bucuresti was reduced to zero after entering into insolvency.

The investment in Electrocentrale Bucuresti is not quoted. The company concluded the restructuring plan in February

2023, however its current financial position does not justify a modification of its value.

**) In 2016, the Company's shareholders decided to withdraw Romgaz from the bank's shareholders, as a result of the

merger process in which Patria Bank was involved. In 2021, the approval of the National Bank of Romania was

obtained for the partial redemption of the shares that the Company holds in Patria Bank. The shares of Patria Bank

S.A. are listed, but following the merger process, the price at which the redemption of the shares held by the

shareholders who requested the withdrawal from the shareholding was set to a fixed value. Thus, the investment is

measured at this redemption value.

26. CASH AND CASH EQUIVALENTS

December 31, 2024

December 31, 2023

'000 RON

Current bank accounts *)

122,106

135,129

Petty cash

Term deposits

1,588,325

381,761

Restricted cash **)

1,715

1,902

Total

1,712,183

518,831

*) Current bank accounts include overnight deposits.

**) At December 31, 2024 restricted cash refers to bank accounts used only for dividend payments to shareholders,

according to stock market regulations.

27. BANK BORROWINGS. BONDS

a) Bank borrowings

Maturity

December 31,

2024

December 31,

2023

'000 RON

EUR 325,000 thousand bank borrowing equivalent of RON

1,616,583 thousand at RON 4.9741/EUR 1) (unsecured) *)

June 2027

808,346

1,131,722

RON 745,875 revolving credit facility (unsecured) **)

September 2027

EUR 100,000 revolving credit facility (equivalent of RON

497,410 thousand at RON 4.9741/EUR 1) (unsecured) **)

December 2026

Total

808,346

1,131,722

*) In March 2022, Romgaz signed a EUR 325 million financing deal with Raiffeisen Bank S.A. to finance part of the

purchase price of the shares of ExxonMobil Exploration and Production Romania Limited (now Romgaz Black Sea

Limited) that holds 50% of the rights and obligations for the Neptun Deep block.

In June 2022, an addendum to the facility contract was signed between Romgaz acting as borrower and Raiffeisen

Bank S.A. and Banca Comercială Română S.A. as lenders.

S.N.G.N. ROMGAZ S.A.

NOTES

The loan agreement includes two covenants that have to be met each December 31:

- leverage ratio has to be lower than 300%. Leverage ratio means the ratio between net debt on December 31 and

earnings before interest, tax, depreciation and amortization expenses (EBITDA) for the year. Net debt means

the aggregate principal amount owed by Romgaz pursuant to financial indebtedness (ie. outstanding bank

borrowings, bonds issued, lease liabilities) after deducting the aggregate of cash and cash equivalents.

- debt service coverage ratio has to be higher than 110%. Debt service coverage ratio means the ratio between

EBITDA for the year and debt service (ie. interest and bank commissions of any financial indebtedness, scheduled

repayments of principal related to any financial indebtedness) paid or payable during the year.

- all metrics are calculated based on these financial statements.

On December 31, 2024 and December 31, 2023 the Company complied with both covenants. There are no indications

that the Company may face difficulties complying with the covenants when they will be next tested as at December

31, 2025.

The facility’s final maturity is in five years from utilization. There are no borrowing costs other than interest. The

loan is repayable in quarterly instalments. The loan is not secured.

The average interest rate during the period was 4.02%/year.

**) In 2024, Romgaz signed two revolving credit facilities of RON 745,875 thousand (with Banca Transilvania SA) and

EUR 250,000 thousand (with UniCredit Bank SA). The two facilities may be used for general corporate purposes.

Romgaz has not drawn any amount from the facilities.

2024

2023

'000 RON

Balance as at January 1

1,131,722

1,447,115

Interest charged

38,962

43,838

Interest paid

(38,897)

(43,838)

Repayments

(323,312)

(322,775)

Foreign exchange differences

(129)

7,382

Carrying amount as at December 31

808,346

1,131,722

b) Bonds

In September 2024 Romgaz launched its first Euro Medium Term Note program for a total value of EUR 1,500,000

thousand. The first tranche of EUR 500,000 thousand of the program was issued in October 2024. The coupon rate is

4.75%. The bonds are repayable in 5 years at par value. The coupon is payable on an annual basis. The bonds are not

convertible and are unsecured. The bonds have no covenants.

Bonds are listed on Luxembourg Stock Exchange and Bucharest Stock Exchange.

2024

2023

'000 RON

Proceeds from bond issue

2,485,488

Transaction costs

(11,914)

Net proceeds from bond issue

2,473,574

2024

2023

'000 RON

Carrying amount as at January 1

Net proceeds from bond issue

2,473,574

Interest charged

28,655

Foreign exchange differences

(1,251)

Carrying amount as at December 31

2,500,978

The bonds’ carrying value approximate their fair value. The bond’s closing price on Luxembourg Stock Exchange on

December 31, 2024 was 101.011%.

S.N.G.N. ROMGAZ S.A.

NOTES

28. BANK DEPOSITS OTHER THAN CASH AND CASH EQUIVALENTS

Bank deposits other than cash and cash equivalents represent deposits with a maturity of over 3 months, from

acquisition date. The Company did not identify any risk of loss for these assets, therefore it did not record any

impairment.

December 31, 2024

December 31, 2023

'000 RON

Bank deposits

2,434,436

2,325,284

Accrued interest receivable on bank deposits

22,091

19,065

Total

2,456,527

2,344,349

29. CORRECTION OF ACCOUNTING ERRORS AND REVISION OF PRIOR PERIOD PRESENTATION

a) Correction of accounting errors

As of April 1, 2018, natural gas storage was transferred from Romgaz to SNGN ROMGAZ SA – Filiala de Înmagazinare

Gaze Naturale DEPOGAZ Ploiesti SRL.

The transfer of activity occurred as a result of the Company's legal obligation to achieve separation of natural gas

storage activity from natural gas production and supply in accordance with Directive 2009/73 / EC of the European

Parliament and of the Council of July 13, 2009 and the provisions of art. 141 align (1) of Law 123/2012.

The transfer involved the transfer of the license to the storage subsidiary, transfer of employees and the transfer of

the unfinished acquisitions until 31 March 2018. The transfer did not involve a sale. As a result of the transfer of

activity, the fixed assets were not transferred and they were leased to Depogaz.

At the end of 2018, the shareholders of the Company approved, in principle, to increase the share capital of Depogaz

with the assets used in the storage activity. Based on this decision, in 2019 the Company’s assets were measured in

order to determine the value of the share capital increase. In December 2019, the Company’s majority shareholder

called for a meeting to take a final decision on the increase; the final decision was taken in January 2020. Based on

the call of the majority shareholder in December 2019, the assets to be transferred, according to the Company’s

Board of Directors’ decision in February 2020, together with other related assets and liabilities were classified as

held for disposal starting December 31, 2019. Since the assets were not available for immediate transfer in their

present condition, the Company reconsidered their classification on the statement of financial position; thus

property, plant and equipment was recognised and assets held for disposal were derecognised as at January 1, 2023

and December 31, 2023. The Company reconsidered the classification of the assets and treated it as an accounting

error. As such, all accounting records recorded when the assets were first presented as held for disposal were

reversed; as assets are no longer presented as assets held for disposal, the Company recorded a depreciation charge

for the items of property, plant and equipment previously presented as held for disposal. As the Company recovers

the value of the assets through a rent contract, the impairment previously recorded when the assets were first

presented as assts held for disposal was reversed; instead, the Company recorded annual depreciation of such assets;

the effect of the release of the impairment and the recognition of depreciation charges until December 31, 2023

was an increase in retained earnings of RON 53,250 thousand This change triggered changes in taxation, namely in

corporate income tax and deferred tax for the period 2020-2023 and in solidarity contribution for the years 2022-

2023.

b) Changes in presentation

In the current period, the Company revised the presentation of certain items in its financial statements for the

better understanding of the financial position and results of the Company. As such, certain prior periods’ information

was presented in line with the new presentation, to ensure comparability with the financial statements of the current

period.

i. Statement of financial position

The following changes were made:

- a new line was introduced in the Current assets section, namely “Greenhouse gas certificates”. In the 2023

financial statements these were included in “Other assets”, also presented as Current assets.

- “Other financial assets” were renamed to “Bank deposits other than cash and cash equivalents”.

S.N.G.N. ROMGAZ S.A.

NOTES

ii. Statement of comprehensive income

The following changes were made:

- Work performed by the Company and capitalized as non-current assets, now presented as an income, was

reported net of expenditure incurred. Starting 2024, expenditure capitalized to build non-current assets is

presented gross, its influence on profit for the period being offset by the presentation of an income “Work

performed by the Company and capitalized” (1);

- “Other expenses” line was broken down into its main components represented by “Taxes and duties”, “Employee

benefit expense”, “Greenhouse gas certificate expenses” and “Third party services and other costs” (2);

- Previously, impairment losses on trade receivables for other income were presented on a gross basis; currently,

they are presented on a net basis (3);

- Line name changes (4).

iii. Statement of cash flow

Changes in ii. above affected the presentation of the statement of cash flow. In 2024, the Company also reconsidered

the presentation of collections from government grants; previously, these were presented as financing cash-flows;

currently they are presented as investing cash-flows.

The effect of the correction of errors in a) and of changes in presentation in b) in the statement of

comprehensive income for the year ended December 31, 2023 is shown below:

Year ended

December 31,

2023

as previously

reported

Impact of

change (1)

Impact of

changes

(2) and (3)

Impact of

accounting

errors

Year ended

December 31,

2023

restated

'000 RON

Revenue

8,619,286

Cost of commodities sold

(107,060)

Finance income/(previously presented as

Investment income) (4)

273,027

Other gains and losses

(12,957)

835

(12,122)

Net impairment (losses)/gains on trade

receivables

(57,546)

101,260

43,714

Changes in inventory of finished goods

and work in progress

(5,767)

Work performed by the Company and

capitalized

250,977

Raw materials and consumables used

(94,857)

(42,060)

(136,917)

Depreciation, amortization and

impairment expenses

(433,391)

(27,964)

(88,310)

(549,665)

Employee benefit expense

(819,207)

(152,079)

(17,500)

(988,786)

Taxes and duties

(1,478,423)

(839)

(1,479,262)

Finance cost

(61,913)

Exploration expense

(83,051)

Greenhouse gas certificate expenses

(242,803)

Third party services and other costs

(617,741)

(99)

(617,840)

Other expenses

(850,009)

(28,035)

878,044

Other income

122,126

(101,260)

20,866

Profit before tax

5,010,258

(87,574)

4,922,684

Income tax expense

(2,360,981)

13,345

(2,347,636)

Profit for the year

2,649,277

(74,229)

2,575,048

Total comprehensive income for the

year

2,649,277

(74,229)

2,575,048

S.N.G.N. ROMGAZ S.A.

NOTES

The effect of the correction of errors in a) and of changes in presentation in b) in the statement of financial

position as of January 1, 2023 and December 31, 2023 is shown below:

January 1, 2023

as previously reported

Impact of accounting

errors

January 1, 2023

restated

'000 RON

Property, plant and equipment

4,387,058

818,446

5,205,504

Intangible assets

19,735

19,750

Deferred tax asset

217,073

(82,559)

134,514

Assets held for disposal

677,634

(677,634)

Retained earnings

6,191,538

122,055

6,313,593

Provisions (long term portion)

186,778

24,060

210,838

Current tax liabilities

1,171,873

(43,946)

1,127,927

Provisions (short term portion)

312,867

3,606

316,473

Liabilities directly associated with the

assets held for disposal

47,507

(47,507)

December 31,

2023

as previously

reported

Impact of change

in b) i

Impact of

accounting errors

December 31,

2023

restated

'000 RON

Property, plant and equipment

4,629,477

740,692

5,370,169

Intangible assets

15,223

15,238

Deferred tax asset

213,352

(75,813)

137,539

Greenhouse Gas Certificates

208,617

Other assets

258,769

(208,617)

50,152

Assets held for disposal

687,453

(687,453)

Retained earnings

6,172,369

47,826

6,220,195

Provisions (long term portion)

336,648

36,888

373,536

Current tax liabilities

1,762,716

(50,558)

1,712,158

Provisions (short term portion)

111,607

4,379

115,986

Liabilities directly associated with the

assets held for disposal

61,094

(61,094)

The effect of the correction of errors in a) and changes in presentation in b) in the statement of cash flow for

the year ended December 31, 2023 is shown below:

Year ended

December 31,

2023

as previously

reported

Impact of changes

in b) iii

Impact of

accounting errors

Year ended

December 31,

2023

restated

'000 RON

Net cash generated by operating activities

3,379,401

(5,390)

(99)

3,373,912

Net cash generated by/(used in) investing

activities

(3,132,260)

51,739

(3,080,422)

Net cash used in financing activities

(1,595,880)

(46,349)

(1,642,229)

S.N.G.N. ROMGAZ S.A.

NOTES

30. GUARANTEES GRANTED BY BANKS

December 31, 2024

December 31, 2023

'000 RON

Guarantees granted

173,851

273,425

Total

173,851

273,425

In 2024, Romgaz signed an addendum to the credit agreement with BCR SA representing a facility for issuing letters

of guarantee and opening letters of credit for a maximum amount of RON 500,000 thousand. On December 31, 2024

are still available for use RON 328,915 thousand.

As of December 31, 2024, the Company’s contractual commitments for the acquisition of non-current assets are of

RON 832,267 thousand (December 31, 2023: RON 704,601 thousand).

31. GUARANTEES RECEIVED FROM BANKS

December 31, 2024

December 31, 2023

'000 RON

Guarantee received

1,939,112

2,593,693

Total

1,939,112

2,593,693

Guarantees are received from the Company’s clients to secure payment of deliveries.

32. CONTINGENCIES

(a) Litigations

The Company is subject to several legal actions arisen in the normal course of business. The management of the

Company considers that they will have no material adverse effect on the results and the financial position of the

Company.

On December 28, 2011, 27 former and current employees of Romgaz were notified by DIICOT regarding an

investigation related to sale contracts signed with one of the Company’s clients for allegedly unauthorized discounts

granted to this client during the period 2005-2010. DIICOT mentioned that this may have resulted in a loss of USD

92,000 thousand for the Company. On that sum, an additional burden to the state budget consists of income tax in

amount of USD 15,000 thousand and VAT in amount of USD 19,000 thousand. The internal analysis carried out by the

Company’s specialized departments concluded that the agreement was in compliance with the legal provisions and

all discounts were granted based on Orders issued by the Ministry of Economy and Finance and decisions of the

General Shareholders’ Board and Board of Directors. The management of the Company believes the investigation

will not have a negative impact on the financial statements, to justify the registration of an adjustment. The

Company is fully cooperating with DIICOT in providing all information necessary. On March 18 2014, Romgaz received

an address from DIICOT, by which the investigators ordered an accounting expertise, indicating the objectives of the

expertise.

Romgaz was notified that, as injured party, it may submit comments relating to objectives of the expertise

(additions/changes), and may appoint an additional expert to participate in the expertise.

Thus, Romgaz proceeded to identify and appoint an expert with accounting and financial expertise that can

participate to the expertise. After the report was completed, the parties could submit objections by November 2,

2015.

On March 16, 2016, DIICOT – Central Structure informed the persons involved in the cause about the start of legal

actions against them. At the request of investigators, the Company announced that in case of a prejudice being

established during the investigation, the Company will join the case as civil party.

In November 2016, DIICOT informed the Company the prejudice established in amount of RON 282,630 thousand.

Following this request, Romgaz announced that will join the case as a civil party for the amount of RON 282,630

thousand to recover this amount from the respective client and any other person that may be found guilty for causing

the prejudice.

In June 2017, DIICOT issued a press release announcing the referral to court of several persons involved in the case.

In January 2018, the High Court of Cassation and Justice ruled that the indictment prepared by DIICOT was not legal.

The Court issued a decision in December, 2022 stating there is no offence and the civil complaint filed by Romgaz

was left unresolved. Romgaz appealed the decision. According to the final decision issued by the court in 2024, no

person was charged.

S.N.G.N. ROMGAZ S.A.

NOTES

(b) Taxation

The Romanian taxation system is undergoing a process of consolidation and harmonization with the European Union

legislation. However, there are still different interpretations of the fiscal legislation. In various circumstances, the

tax authorities may have different approaches to certain issues, and assess additional tax liabilities, together with

late payment interest and penalties. In Romania, tax periods remain open for fiscal verification for 5 years. The

Company’s management considers that the tax liabilities included in these financial statements are fairly stated.

Environmental regulations are developing in Romania and the Company has not recorded any liability at December

31, 2024 for any anticipated costs, including legal and consulting fees, impact studies, the design and

implementation of remediation plans related to environmental matters, except the amount of RON 362,998 thousand

(December 31, 2023: RON 405,585 thousand), representing the decommissioning liability.

(d) Contingencies related to grants related to income

Government Emergency Ordinance no. 27/2022 as subsequently amended (GEO 27) included the obligation of the

Group, until March 31, 2024, to sell the electricity it produces at a regulated price of RON 450/MWh. According to

GEO 27, electricity producers must calculate a contribution to the Energy Transition Fund. If the value of the

greenhouse gas certificates related to the energy sold at RON 450/MWh exceeds the contribution to the Energy

Transition Fund, electricity producers are entitled to receive the excess. Until December 31, 2024, the legislation

did not provide for the mechanism to request these amounts from the Romanian State nor the competent authority

for the settlement of such requests. As such, the right to receive the grant is not enforceable. Thus, as of December

31, 2024 the Group disclosed a contingent asset of RON 188,260 thousand until legislation will provide for a

mechanism for recovering this amount (December 31, 2023: RON 167,743 thousand).

33. AUDITOR’S FEES

The fee charged by the Company’s statutory auditor, PricewaterhouseCoopers Audit SRL for the statutory audit of

the 2024 annual financial statements is RON 758 thousand.

The fee charged by the Company’s statutory auditor (PricewaterhouseCoopers Audit SRL starting June 2024 and Ernst

& Young Assurance Services S.R.L until May 2024) for other assurance services in 2024 are RON 2,414 thousand.

34. EVENTS AFTER THE BALANCE SHEET DATE

In March 2025 the Romanian Government issued Emergency Ordinance no. 6 which extends the provisions of

Government Emergency Ordinance no. 27/2022. Gas sold under the Ordinance will continue to be sold at a regulated

price until March 31, 2026; no windfall tax will be charged for quantities sold under the Ordinance.

35. AUTHORIZATION OF FINANCIAL STATEMENTS

These financial statements were authorized for issue by the Board of Directors on March 27, 2025.

Răzvan Popescu Gabriela Trânbițaș

Chief Executive Officer Chief Financial Office