CHIMCOMPLEX S.A.
STATUTORY CONSOLIDATED FINANCIAL STATEMENTS
Prepared in accordance with
Order of the Minister of Public Finance
no. 2844/2016 for the approval of Accounting Regulations in accordance with the Standards
International Financial Reporting Standards as adopted by EU.
AT AND FOR THE YEAR ENDED AT
DECEMBER 31, 2022
TABLE OF CONTENT:
PAGE:
PAGE:
INDEPENDENT AUDITOR’S REPORT FOR CONSOLIDATED FINANCIAL STATEMENTS
1 – 5
1 – 5
STATEMENT OF CONSOLIDATED FINANCIAL POSITION
6 – 7
6 – 7
STATEMENT OF
CONSOLIDATED
COMPREHENSIVE INCOME
8 – 9
CONSOLIDATED
COMPREHENSIVE INCOME
8 – 9
STATEMENT OF CONSOLIDATED CHANGES IN EQUITY
10
10
STATEMENT OF CONSOLIDATED CASH FLOW
11 – 12
11 – 12
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
13 – 73
13 – 73
CHIMCOMPLEX S.A.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS OF DECEMBER 31, 2022
(all amounts are expressed in RON, unless specified otherwise)
Notes attached form an integral part of these consolidated financial statements.
6
December 31,
December 31,
Note
2022
2021
ASSETS
Non-current assets
Property, plant and equipment
15
Right of use asset
23.b
Investment property
17
Intangible assets
16
Investments in associates and other equity investments
18
Other long term assets
Total non-current assets
Current assets
Inventories
19
Trade and other receivables
20
Short term loans granted
Cash and bank balances
21
Total current assets
Total assets
EQUITY AND LIABILITIES
Capital and reserves
Issued capital
22
Own shares
22
(
)
(
)
Share premium
22
Legal reserves
Retained earnings
(
)
(
)
Revaluation reserve
Non-controlling interest
30
Equity attributable to owners of the Group
LIABILITIES
Non-current liabilities
Subsidies
25
Lease liabilities
23.b
Deferred tax liability
14
Provisions
26
Long term loans
23.a
Other payables
24
Total non-current liabilities
CHIMCOMPLEX S.A.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS OF DECEMBER 31, 2022
(all amounts are expressed in RON, unless specified otherwise)
Notes attached form an integral part of these consolidated financial statements.
7
December 31,
December 31,
Note
2022
2021
Current liabilities
Subsidies
25
Trade and other payables
24
Lease liabilities
23.b
Corporate income tax liability
Provisions
26
Short term loans
23.a
Total current liabilities
Total liabilities
Total equity and liabilities
These consolidated financial statements were authorized to be issued by the management as at
March 27, 2023 and signed on its behalf by:
VUZA STEFAN,
STANCIUGEL NICOLAE,
GENERAL DIRECTOR
FINANCIAL DIRECTOR
CHIMCOMPLEX S.A.
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED DECEMBER 31, 2022
(all amounts are expressed in RON, unless specified otherwise)
Notes attached form an integral part of these consolidated financial statements.
8
Year ended
December 31,
Year ended
December 31,
Note
2022
2021
Revenue
5
Investment income
Other gains and losses
6
(
)
Cost of commodities sold
(
)
(
)
Increase in finished goods and production in progress
Raw materials and consumables
7
(
)
(
)
Employees benefits
8
(
)
(
)
Depreciation and amortization
9
(
)
(
)
Distribution costs
(
)
(
)
Water and energy expenses
(
)
(
)
Other third party services
10
(
)
(
)
Maintenance and repair expenses
(
)
(
)
Other income
11
Net revaluation loss of property, plant and equipment
15
(
)
Other expenses
12
(
)
(
)
Finance costs
13
(
)
(
)
Profit before tax
Income tax expense
14
(
)
(
)
Profit for the year
Earnings per share
Basic and diluted earnings per share
CHIMCOMPLEX S.A.
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED DECEMBER 31, 2022
(all amounts are expressed in RON, unless specified otherwise)
Notes attached form an integral part of these consolidated financial statements.
9
Note
Year ended
December 31,
Year ended
December 31,
2022
2021
Profit for the year
Other comprehensive income:
Items that will not be reclassified to profit or loss:
Impact of revaluation
15
Deferred tax related to revaluation
15
(
)
Impact of disposal of non-current assets
15
(
)
Other comprehensive income, net of tax
(
)
Total comprehensive income
Total comprehensive income attributable to:
Owners
Non-controlling interest
These consolidated financial statements were authorized to be issued by the management as at March 27, 2023 and signed
on its behalf by:
on its behalf by:
VUZA STEFAN,
STANCIUGEL NICOLAE,
GENERAL DIRECTOR
FINANCIAL DIRECTOR
CHIMCOMPLEX S.A.
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS EQUITY
FOR THE YEAR ENDED DECEMBER 31, 2022
(all amounts are expressed in RON, unless specified otherwise)
Notes attached form an integral part of these consolidated financial statements.
10
Share
capital
Own shares
Share
premium
Legal
reserve
Retained
earnings
Revaluation
reserve
Non-Controlling
interest
interest
Total
Balance at January 1, 2021
(
)
Profit for the year
Other comprehensive income –
revaluation gain
revaluation gain
Dividends distribution
(
)
(
)
Increase in share capital
Increase in share premium
Legal reserves
(
)
Redemption of own shares (note
22)
22)
(
)
(
)
Balance at December 31, 2021
(
)
(
)
Profit for the year
Dividends distribution
(
)
(
)
Other comprehensive income –
revaluation for disposed assets
revaluation for disposed assets
(
)
Legal reserves
(
)
Redemption of own shares ( note
22)
22)
(
)
(
)
Surplus resulting from acquisition
of Sistemplast S.A (note 29)
of Sistemplast S.A (note 29)
(
)
(
)
Acquisition of Sistemplast (note 29)
Adjustment arising from change in
noncontrolling interest (note 30)
noncontrolling interest (note 30)
Other movement
Balance at December 31, 2022
(
)
(
)
These consolidated financial statements were authorized to be issued by the management as at March 27, 2023 and signed on its behalf by:
VUZA STEFAN,
STANCIUGEL NICOLAE,
GENERAL DIRECTOR
FINANCIAL DIRECTOR
CHIMCOMPLEX S.A.
CONSOLIDATED STATEMENT OF CASH FLOW
FOR THE YEAR ENDED DECEMBER 31, 2022
(all amounts are expressed in RON, unless specified otherwise)
Notes attached form an integral part of these consolidated financial statements.
11
Year ended
December 31,
Year ended
December 31,
2022
2021
Cash flows from operating activities:
Profit before tax
Adjustments for non-cash items:
Interest expense
Impairment loss on investments
(
)
Impairment loss/(gain) on property, plant and equipment
(
)
Interest revenue
(
)
(
)
Loss/(gain) on disposal of non-current assets
(
)
Net loss/(gain) from provisions
(
)
Loss from revaluation of property, plant and equipment
Foreign exchange loss, net
Impairment loss on inventories, net
Depreciation and amortization
Subsidies income
(
)
(
)
Non-controlling interest
Movements in working capital:
Decrease/(increase) in inventory
(
)
(
)
Decrease/(increase) in trade and other receivables
(
)
(
)
Increase/ (decrease) in trade and other liabilities
(
)
Increase/ (decrease) in subsidies
Subsidy received for costs of electric energy
Cash generated from operating activities
Interest paid
(
)
(
)
Income tax paid
(
)
(
)
Net cash generated by/(used) in operating activities
Cash flows from investing activities:
Interest received
Proceeds from sale of non-current assets
Payment to acquire financial assets
(
)
Acquisition of non-current assets
(
)
(
)
Payments for participation in Sistemplast, net of purchased cash
(
)
Net cash used in investing activities
(
)
(
)
CONSOLIDATED STATEMENT OF CASH FLOW
FOR THE YEAR ENDED DECEMBER 31, 2022
(all amounts are expressed in RON, unless specified otherwise)
12
Year ended
December 31,
Year ended
December 31,
2022
2021
Cash flow from financing activities:
Proceeds from borrowings*
Lease liabilities repayments*
(
)
(
)
Dividends paid
(
)
(
)
Repayment of borrowings*
(
)
(
)
Share capital increase
Purchase of own shares
(
)
Net cash (used in)/generated by financing activities
(
)
(
)
Net (decrease) / increase in cash and cash equivalents
(
)
Cash and cash equivalents at beginning of the year
Effects of foreign exchange rate changes on the balance of cash held
in foreign currencies
in foreign currencies
Cash and cash equivalents at end of the year
*The Group present in the statement of cash flow changes in finance liabilities (proceeds from borrowings, lease liabilities
repayments, and repayment of borrowings). For the year ended December 31, 2022, and December 31, 2021 respectively,
the changes in finance lease comprise in principal cash changes, the effect of non-cash changes is not material therefore the
Group believes that the presentation truly reveals the cash changes in finance liabilities.
repayments, and repayment of borrowings). For the year ended December 31, 2022, and December 31, 2021 respectively,
the changes in finance lease comprise in principal cash changes, the effect of non-cash changes is not material therefore the
Group believes that the presentation truly reveals the cash changes in finance liabilities.
These consolidated financial statements were authorized to be issued by the management as at March 27, 2023 and signed
on its behalf by:
on its behalf by:
VUZA STEFAN,
STANCIUGEL NICOLAE,
GENERAL DIRECTOR
FINANCIAL DIRECTOR
CHIMCOMPLEX S.A.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022
(all amounts are expressed in RON, unless specified otherwise)
13
These financial statements are the consolidated financial statements of
CHIMCOMPLEX S.A. BORZESTI
(“the Company”) and
its subsidiaries (together “the Group”) as at and for the year ended 31 December 2021.
The Company is a
private limited company
incorporated in accordance with the Romanian legislation and recorded in 1991
to Trade Registry.
The Company’s headquarter is in
3 Industriilor Street, Onesti, Romania
.
The Group operates in the chemical industry and it’s main groups of products are:
–
Chloralkali,
Chloralkali,
–
Organic Solvents,
Organic Solvents,
–
Inorganic Chlorides,
Inorganic Chlorides,
–
Alkylamines, Polyols
Alkylamines, Polyols
–
Oxo-Alcholos.
Oxo-Alcholos.
As at December 31, 2022 and December 31, 2021 respectively, the Company’s subsidiaries and associates are the following:
% shareholding
Name
Activity
Type
Tax code
Head Office
December 31,
2022
2022
December 31,
2021
2021
Greenhouse Onesti
SRL
SRL
Manufacture of
other base
inorganic
chemicals
other base
inorganic
chemicals
Subsidiary
16030164
Onesti
99.9998%
99.9998%
A5 Invest
Intermediation in
the sale of
machinery,
industrial
equipment, ships
and airplanes
the sale of
machinery,
industrial
equipment, ships
and airplanes
Subsidiary
17701390
Onesti
100%
100%
A6 Impex SA
Electricity
production
production
Associate
21381692
Dej
49.4497%
33.6453%
Sistemplast SA
General
mechanical
operations
mechanical
operations
Subsidiary
11438007
RamnicuValcea
94,4000%
–
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022
(all amounts are expressed in RON, unless specified otherwise)
2.
APPLICATION OF NEW AND REVISED INTERNATIONAL FINANCIAL REPORTING STANDARDS
These annual consolidated financial statements have been prepared in accordance with International Financial Reporting
Standards (“IFRS”) as adopted by the European Union (“IFRS-EU”).
Standards (“IFRS”) as adopted by the European Union (“IFRS-EU”).
New standards and amendments to existing standards in issue not yet adopted
At the date of authorisation of these financial statements, the following new standard and amendments to existing
standards were in issue, but not yet effective:
standards were in issue, but not yet effective:
•
IFRS
17
“Insurance
Contracts”
including
amendments
to
IFRS
17
issued
on
25
June
2020
and
amendments
to
IFRS
17
“Initial
Application
of
IFRS
17
and
IFRS
9”
issued
on
9
December
2021
(effective
for
annual
periods
beginning
on
or
after
1 January 2023),
IFRS
17
“Insurance
Contracts”
including
amendments
to
IFRS
17
issued
on
25
June
2020
and
amendments
to
IFRS
17
“Initial
Application
of
IFRS
17
and
IFRS
9”
issued
on
9
December
2021
(effective
for
annual
periods
beginning
on
or
after
1 January 2023),
•
Amendments
to
IAS
1
“Presentation
of
Financial
Statements”
–
Classification
of
Liabilities
as
Current
or
Non-Current
(effective for annual periods beginning on or after 1 January 2023),
Amendments
to
IAS
1
“Presentation
of
Financial
Statements”
–
Classification
of
Liabilities
as
Current
or
Non-Current
(effective for annual periods beginning on or after 1 January 2023),
•
Amendments
to
IAS
1
“Presentation
of
Financial
Statements”
–
Disclosure
of
Accounting
Policies
(effective
for
annual
periods beginning on or after 1 January 2023),
Amendments
to
IAS
1
“Presentation
of
Financial
Statements”
–
Disclosure
of
Accounting
Policies
(effective
for
annual
periods beginning on or after 1 January 2023),
•
Amendments
to
IAS
8
“Accounting
Policies,
Changes
in
Accounting
Estimates
and
Errors”
–
Definition
of
Accounting
Estimates (effective for annual periods beginning on or after 1 January 2023),
Amendments
to
IAS
8
“Accounting
Policies,
Changes
in
Accounting
Estimates
and
Errors”
–
Definition
of
Accounting
Estimates (effective for annual periods beginning on or after 1 January 2023),
•
Amendments
to
IAS
12
“Income
Taxes”
–
Deferred
Tax
related
to
Assets
and
Liabilities
arising
from
a
Single
Transaction
(effective for annual periods beginning on or after 1 January 2023),
Amendments
to
IAS
12
“Income
Taxes”
–
Deferred
Tax
related
to
Assets
and
Liabilities
arising
from
a
Single
Transaction
(effective for annual periods beginning on or after 1 January 2023),
•
Amendments
to
IFRS
16
“Leases”
–
Lease
Liability
in
a
Sale
and
Leaseback
(effective
for
annual
periods
beginning
on
or
after 1 January 2024),
Amendments
to
IFRS
16
“Leases”
–
Lease
Liability
in
a
Sale
and
Leaseback
(effective
for
annual
periods
beginning
on
or
after 1 January 2024),
•
Amendments
to
IAS
1
“Presentation
of
Financial
Statements”
–
Non-current
Liabilities
with
Covenants
(effective
for
annual periods beginning on or after 1 January 2024),
Amendments
to
IAS
1
“Presentation
of
Financial
Statements”
–
Non-current
Liabilities
with
Covenants
(effective
for
annual periods beginning on or after 1 January 2024),
•
Amendments
to
IFRS
10
“Consolidated
Financial
Statements”
and
IAS
28
“Investments
in
Associates
and
Joint
Ventures”
–
Sale
or
Contribution
of
Assets
between
an
Investor
and
its
Associate
or
Joint
Venture
and
further
amendments
(effective date deferred indefinitely until the research project on the equity method has been concluded).
Amendments
to
IFRS
10
“Consolidated
Financial
Statements”
and
IAS
28
“Investments
in
Associates
and
Joint
Ventures”
–
Sale
or
Contribution
of
Assets
between
an
Investor
and
its
Associate
or
Joint
Venture
and
further
amendments
(effective date deferred indefinitely until the research project on the equity method has been concluded).
The
Group
has
elected
not
to
adopt
the
new
standard
and
amendments
to
existing
standards
in
advance
of
their
effective
dates.
[If
the
Company
/
Group
elected
to
adopt
some
of
the
standards
and
interpretations
in
advance,
the
information
under
IAS
8.28
should
be
disclosed.]
The
Group
anticipates
that
the
adoption
of
the
standard
and
amendments
to
existing
standards
will have no material impact on the financial statements of the
Group
in the period of initial application.
Group
has
elected
not
to
adopt
the
new
standard
and
amendments
to
existing
standards
in
advance
of
their
effective
dates.
[If
the
Company
/
Group
elected
to
adopt
some
of
the
standards
and
interpretations
in
advance,
the
information
under
IAS
8.28
should
be
disclosed.]
The
Group
anticipates
that
the
adoption
of
the
standard
and
amendments
to
existing
standards
will have no material impact on the financial statements of the
Group
in the period of initial application.
Standards and amendments to the existing standards issued by IASB and adopted by the EU but not yet effective
At the date of authorisation of these financial statements, the following amendments to the existing standards were issued
by IASB and adopted by the EU and which are not yet effective:
by IASB and adopted by the EU and which are not yet effective:
•
IFRS
17
“Insurance
Contracts”
including
amendments
to
IFRS
17
issued
by
IASB
on
25
June
2020
–
adopted
by
the
EU
on
19 November 2021 (effective for annual periods beginning on or after 1 January 2023),
IFRS
17
“Insurance
Contracts”
including
amendments
to
IFRS
17
issued
by
IASB
on
25
June
2020
–
adopted
by
the
EU
on
19 November 2021 (effective for annual periods beginning on or after 1 January 2023),
•
Amendments
to
IFRS
17
“Insurance
contracts”
–
Initial
Application
of
IFRS
17
and
IFRS
9
–
Comparative
Information,
adopted by the EU on 8 September 2022 (effective for annual periods beginning on or after 1 January 2023),
Amendments
to
IFRS
17
“Insurance
contracts”
–
Initial
Application
of
IFRS
17
and
IFRS
9
–
Comparative
Information,
adopted by the EU on 8 September 2022 (effective for annual periods beginning on or after 1 January 2023),
•
Amendments
to
IAS
1
“Presentation
of
Financial
Statements”
–
Disclosure
of
Accounting
Policies
adopted
by
the
EU
on
2 March 2022 (effective for annual periods beginning on or after 1 January 2023),
Amendments
to
IAS
1
“Presentation
of
Financial
Statements”
–
Disclosure
of
Accounting
Policies
adopted
by
the
EU
on
2 March 2022 (effective for annual periods beginning on or after 1 January 2023),
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022
(all amounts are expressed in RON, unless specified otherwise)
2. APPLICATION OF NEW AND REVISED INTERNATIONAL FINANCIAL REPORTING STANDARDS (continued)
•
Amendments
to
IAS
8
“Accounting
Policies,
Changes
in
Accounting
Estimates
and
Errors”
–
Definition
of
Accounting
Estimates adopted by the EU on 2 March 2022 (effective for annual periods beginning on or after 1 January 2023),
Amendments
to
IAS
8
“Accounting
Policies,
Changes
in
Accounting
Estimates
and
Errors”
–
Definition
of
Accounting
Estimates adopted by the EU on 2 March 2022 (effective for annual periods beginning on or after 1 January 2023),
•
Amendments
to
IAS
12
“Income
Taxes”
–
Deferred
Tax
related
to
Assets
and
Liabilities
arising
from
a
Single
Transaction
adopted by the EU on 11 August 2022 (effective for annual periods beginning on or after 1 January 2023).
Amendments
to
IAS
12
“Income
Taxes”
–
Deferred
Tax
related
to
Assets
and
Liabilities
arising
from
a
Single
Transaction
adopted by the EU on 11 August 2022 (effective for annual periods beginning on or after 1 January 2023).
New standards and amendments to the existing standards issued by IASB but not yet adopted by the EU
At
present,
IFRS
as
adopted
by
the
EU
do
not
significantly
differ
from
regulations
adopted
by
the
International
Accounting
Standards
Board
(IASB)
except
for
the following
new
standards
and
amendments
to
the
existing
standards,
which
were
not
endorsed
for
use
in
EU
as
at
the
date
of
publication
of
financial
statements
(the
effective
dates
stated
below
is
for
IFRS
as
issued by IASB)
:
present,
IFRS
as
adopted
by
the
EU
do
not
significantly
differ
from
regulations
adopted
by
the
International
Accounting
Standards
Board
(IASB)
except
for
the following
new
standards
and
amendments
to
the
existing
standards,
which
were
not
endorsed
for
use
in
EU
as
at
the
date
of
publication
of
financial
statements
(the
effective
dates
stated
below
is
for
IFRS
as
issued by IASB)
:
•
Amendments
to
IAS
1
“Presentation
of
Financial
Statements”
–
Classification
of
Liabilities
as
Current
or
Non-Current
(effective for annual periods beginning on or after 1 January 2023),
Amendments
to
IAS
1
“Presentation
of
Financial
Statements”
–
Classification
of
Liabilities
as
Current
or
Non-Current
(effective for annual periods beginning on or after 1 January 2023),
•
Amendments
to
IAS
1
“Presentation
of
Financial
Statements”
–
Non-current
Liabilities
with
Covenants
(effective
for
annual periods beginning on or after 1 January 2024),
Amendments
to
IAS
1
“Presentation
of
Financial
Statements”
–
Non-current
Liabilities
with
Covenants
(effective
for
annual periods beginning on or after 1 January 2024),
•
Amendments
to
IFRS
16
“Leases”
–
Lease
Liability
in
a
Sale
and
Leaseback
(effective
for
annual
periods
beginning
on
or
after 1 January 2024),
Amendments
to
IFRS
16
“Leases”
–
Lease
Liability
in
a
Sale
and
Leaseback
(effective
for
annual
periods
beginning
on
or
after 1 January 2024),
•
IFRS
14
“Regulatory
Deferral
Accounts”
(effective
for
annual
periods
beginning
on
or
after
1
January
2016)
–
the
European
Commission
has
decided
not
to
launch
the
endorsement
process
of
this
interim
standard
and
to
wait
for
the
final standard,
IFRS
14
“Regulatory
Deferral
Accounts”
(effective
for
annual
periods
beginning
on
or
after
1
January
2016)
–
the
European
Commission
has
decided
not
to
launch
the
endorsement
process
of
this
interim
standard
and
to
wait
for
the
final standard,
•
Amendments
to
IFRS
10
“Consolidated
Financial
Statements”
and
IAS
28
“Investments
in
Associates
and
Joint
Ventures”
–
Sale
or
Contribution
of
Assets
between
an
Investor
and
its
Associate
or
Joint
Venture
and
further
amendments
(effective date deferred indefinitely until the research project on the equity method has been concluded).
Amendments
to
IFRS
10
“Consolidated
Financial
Statements”
and
IAS
28
“Investments
in
Associates
and
Joint
Ventures”
–
Sale
or
Contribution
of
Assets
between
an
Investor
and
its
Associate
or
Joint
Venture
and
further
amendments
(effective date deferred indefinitely until the research project on the equity method has been concluded).
The
Group
anticipates
that
the
adoption
of
these
new
standards
and
amendments
to
the
existing
standards
will
have
no
material impact on the financial statements of the Company in the period of initial application.
Group
anticipates
that
the
adoption
of
these
new
standards
and
amendments
to
the
existing
standards
will
have
no
material impact on the financial statements of the Company in the period of initial application.
Hedge
accounting
for
a
portfolio
of
financial
assets
and liabilities
whose
principles
have
not
been
adopted
by
the
EU
remains
unregulated.
accounting
for
a
portfolio
of
financial
assets
and liabilities
whose
principles
have
not
been
adopted
by
the
EU
remains
unregulated.
According to the Group’s estimates, the application of hedge accounting to a portfolio of financial assets or liabilities pursuant to IAS 39: “Financial Instruments: Recognition and Measurement” would not significantly impact the financial statements, if applied as at the balance sheet date.
3.
SIGNIFICANT ACCOUNTING POLICIES
Statement of compliance
The Group’s consolidated financial statements were drawn up in accordance with the provisions of Order no. 2844/2016 for
approval of accounting regulations in accordance with the International Financial Reporting Standards applicable to
companies whose securities are admitted to trading on a regulated market, with subsequent amendments and clarifications
(“OMFP 28422/2016”). These provisions are in accordance with the provisions of the adopted International Financial
Reporting Standards by the European Union (“IFRS EU”).
approval of accounting regulations in accordance with the International Financial Reporting Standards applicable to
companies whose securities are admitted to trading on a regulated market, with subsequent amendments and clarifications
(“OMFP 28422/2016”). These provisions are in accordance with the provisions of the adopted International Financial
Reporting Standards by the European Union (“IFRS EU”).
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022
(all amounts are expressed in RON, unless specified otherwise)
3.SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Basis of preparation
The statutory consolidated financial statements have been prepared on a going concern basis and under the historical cost
basis except for certain classes of financial instruments and Property Plant and Equipment that are measured at revalued
amounts or fair values, as explained in the accounting policies below. Historical cost is generally based on the fair value of
the consideration given in the exchange for assets.
basis except for certain classes of financial instruments and Property Plant and Equipment that are measured at revalued
amounts or fair values, as explained in the accounting policies below. Historical cost is generally based on the fair value of
the consideration given in the exchange for assets.
The consolidated financial statements have been prepared on a going concern basis, under the historical cost convention
adjusted for the effects of hyperinflation until December 31, 2003 for share capital and reserves, respectively property,
plant and equipment.
adjusted for the effects of hyperinflation until December 31, 2003 for share capital and reserves, respectively property,
plant and equipment.
Going concern
Management have, at the time of approving the financial statements, a reasonable expectation that the Group has
adequate resources to continue in operational existence for the foreseeable future. This reasonable expectation is based
on the following:
on the following:
•
The Group recorded net profit in the amount of RON 271,613,984 for 2022 (2021: RON 388,654,469 );
The Group recorded net profit in the amount of RON 271,613,984 for 2022 (2021: RON 388,654,469 );
•
As disclosed in Note 23A. the Group is compliant with the financial covenants as stated in the borrowing
agreements and expects to be compliant with them in 2023, as well.
As disclosed in Note 23A. the Group is compliant with the financial covenants as stated in the borrowing
agreements and expects to be compliant with them in 2023, as well.
Thus, they continue to adopt the going concern basis of accounting in preparing the consolidated financial statements.
(a)
Property, plant and Equipment and intangible assets
Property, plant and Equipment and intangible assets
PROPERTY, PLANT AND EQUIPMENT
(i)
Recognition and measurement
Recognition and measurement
Property, plant and equipment are stated initially at cost, which includes purchase price and other costs directly attributable
to acquisition and bringing the asset to the location and condition necessary for their intended use.
to acquisition and bringing the asset to the location and condition necessary for their intended use.
The tangible assets are measured at revalued amounts less any accumulated depreciation and any accumulated impairment
losses since the most recent valuation. The assets in progress and advance payments for non-current assets are measured at
cost less any accumulated impairment losses.
losses since the most recent valuation. The assets in progress and advance payments for non-current assets are measured at
cost less any accumulated impairment losses.
Revaluations of property, plant and equipment are made with sufficient regularity to ensure that the carrying amount does
not differ materially from the one that would be determined using the fair value at the end of the reporting period. The last
revaluation was made as of December 31, 2021 by an independent certified appraiser – Darian DRS S.A
not differ materially from the one that would be determined using the fair value at the end of the reporting period. The last
revaluation was made as of December 31, 2021 by an independent certified appraiser – Darian DRS S.A
When an item of tangible assets is revalued, the accumulated depreciation is eliminated against the gross carrying amount
of that item, and the net amount is restated to the revalued amount of the asset.
of that item, and the net amount is restated to the revalued amount of the asset.
The cost of assets internally constructed by the Group includes the following:
i.
material costs and direct labour costs;
material costs and direct labour costs;
ii.
any amounts that can be directly attributable to bringing the asset into working condition;
any amounts that can be directly attributable to bringing the asset into working condition;
iii.
costs of dismantle, removal and restoration of the area in which they were placed, when the Group is required to
move the assets and restore land;
costs of dismantle, removal and restoration of the area in which they were placed, when the Group is required to
move the assets and restore land;
iv.
borrowing costs (capitalized).
borrowing costs (capitalized).
When parts of an item of property, plant and equipment have different useful lives, they are considered as separate parts.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022
(all amounts are expressed in RON, unless specified otherwise)
3.
SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
The borrowing costs directly attributable to the acquisition and installation major construction are capitalized in the cost of tangible assets in progress in accordance with IAS 23 „Borrowing costs”.
Fixed assets in progress are not depreciated. The depreciation of the fixed assets in progress commences when the assets are ready for their intended use.
SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(a)
Property, plant and Equipment and intangible assets (continued)
Property, plant and Equipment and intangible assets (continued)
PROPERTY, PLANT AND EQUIPMENT (continued)
A provision for unused tangible assets is recorded in the financial statements to the extent that these items are identified.
Gains or losses from the disposal of an assets (determined by comparing the proceeds from disposal with the carrying value
of tangible assets) are recognized in profit or loss account.
of tangible assets) are recognized in profit or loss account.
(ii)
Subsequent expenditure on maintenance
Subsequent costs on major maintenance and replacements are included in the asset’s carrying amount or recognized as a
separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to
the
Group
and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognized.
separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to
the
Group
and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognized.
Cost of other maintenance, repair and minor improvements are shown on expenses when they are carried out.
Impairment tests are performed with sufficient regularity such that the carrying amounts do not differ materially from those
that would be determined using fair values at the end of each reporting period.
that would be determined using fair values at the end of each reporting period.
(iii)
Depreciation
Tangible assets are depreciated using the straight-line method over their useful lives. The estimated useful lives used for
tangible assets are as follows:
tangible assets are as follows:
Category
Useful live
(years)
Buildings / special installations
30-50
Plant and machinery
2-30
Fixtures and fittings
2-15
The estimated useful lives, residual values and depreciation method are reviewed periodically to be ensured their consistency
with the estimated period of economic benefits that will result from the use of assets.
with the estimated period of economic benefits that will result from the use of assets.
(iv)
Revaluation reserve
Revaluation reserve
The difference between the revalued amount and the net carrying amount of property, plant and equipment is recognised
as revaluation reserve included in equity.
as revaluation reserve included in equity.
If an asset’s carrying amount is increased as a result of a revaluation, the increase is recognised and accumulated in equity
under the heading of revaluation reserve. However, the increase is recognised in profit and loss to the extent that it reverses
a revaluation decrease of the same amount of the asset previously recognised in profit and loss.
under the heading of revaluation reserve. However, the increase is recognised in profit and loss to the extent that it reverses
a revaluation decrease of the same amount of the asset previously recognised in profit and loss.
If an asset’s carrying amount is decreased as a result of a revaluation, the decrease is recognised in profit or loss. However,
the decrease is recognized in equity in revaluation reserves if there is any credit balance existing in the revaluation reserve in
respect of that asset.
the decrease is recognized in equity in revaluation reserves if there is any credit balance existing in the revaluation reserve in
respect of that asset.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022
(all amounts are expressed in RON, unless specified otherwise)
3.SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(a)
Property, plant and Equipment and intangible assets (continued)
Property, plant and Equipment and intangible assets (continued)
PROPERTY, PLANT AND EQUIPMENT (continued)
The revaluation surplus included in equity in respect of an item of property, plant and equipment may be transferred
directly to retained earnings when the asset is derecognised. This may involve transferring the whole of the surplus when
the asset is retired or disposed of. Transfers from revaluation surplus to retained earnings are not made through profit or
loss.
directly to retained earnings when the asset is derecognised. This may involve transferring the whole of the surplus when
the asset is retired or disposed of. Transfers from revaluation surplus to retained earnings are not made through profit or
loss.
The effects of taxes on income, if any, resulting from the revaluation of property, plant and equipment are recognised and
disclosed in accordance with IAS 12 Income Taxes.
disclosed in accordance with IAS 12 Income Taxes.
(v)
Impairment of non-financial assets
The carrying amounts of the Group ‘s non-financial assets, other than inventories and deferred tax assets are reviewed at
each reporting date to determine whether there is evidence of the existence of any impairment. An impairment loss is
recognized if the carrying amount of an asset or cash-generating unit exceeds its estimated recoverable amount.
each reporting date to determine whether there is evidence of the existence of any impairment. An impairment loss is
recognized if the carrying amount of an asset or cash-generating unit exceeds its estimated recoverable amount.
The recoverable amount of an asset or cash-generating unit is the greater of its value in use and fair value less costs to sell. In
determining value in use, the expected future cash flows are discounted to determine the present value using a pre-tax discount
rate that reflects current market assessments of the time value of money and the risks specific to the asset. For impairment
testing, assets that cannot be tested individually are grouped in the smallest group of assets that generate cash inflows from
continuing use and that are largely independent of the cash inflows from other assets or group of assets (“cash-generating
unit”).
determining value in use, the expected future cash flows are discounted to determine the present value using a pre-tax discount
rate that reflects current market assessments of the time value of money and the risks specific to the asset. For impairment
testing, assets that cannot be tested individually are grouped in the smallest group of assets that generate cash inflows from
continuing use and that are largely independent of the cash inflows from other assets or group of assets (“cash-generating
unit”).
An impairment loss should be recognised in profit or loss immediately unless it relates to an asset carried at a revalued
amount. If an asset has been revalued (e.g. an item of property, plant and equipment), the impairment loss is dealt with as a
revaluation decrease in accordance with the relevant Standard, (in this case, IAS 16).
amount. If an asset has been revalued (e.g. an item of property, plant and equipment), the impairment loss is dealt with as a
revaluation decrease in accordance with the relevant Standard, (in this case, IAS 16).
For all assets, impairment losses recognized in prior periods are assessed at each reporting date to determine whether there
is evidence that the loss has decreased or no longer exists.
is evidence that the loss has decreased or no longer exists.
An impairment loss is reversed if there have been changes in the estimates used to determine the recoverable amount. An
impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that
would have been determined, net of depreciation, if no impairment had been recognized.
impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that
would have been determined, net of depreciation, if no impairment had been recognized.
(vi)
Reclassification to and from investment property
The
Group
reclassifies elements of plant, property and equipment as investment property or elements of investment
property to plant, property and equipment when:
Group
reclassifies elements of plant, property and equipment as investment property or elements of investment
property to plant, property and equipment when:
•
when there is a change in use, a change in use occurs when the property meets, or ceases to meet, the definition
of investment property and there is evidence of the change in use;
when there is a change in use, a change in use occurs when the property meets, or ceases to meet, the definition
of investment property and there is evidence of the change in use;
•end of owner-occupation, for a transfer from owner-occupied property to investment property
INTANGIBLE ASSETS
Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a
business combination is its fair value as at the date of acquisition. Following initial recognition, intangible assets are carried
at cost less any accumulated amortisation and any accumulated impairment losses.
business combination is its fair value as at the date of acquisition. Following initial recognition, intangible assets are carried
at cost less any accumulated amortisation and any accumulated impairment losses.
Internally generated intangible assets, excluding capitalised development costs, are not capitalised and expenditure is
reflected in the income statement in the year in which the expenditure is incurred. The useful lives of intangible assets are
assessed as either finite or indefinite.
reflected in the income statement in the year in which the expenditure is incurred. The useful lives of intangible assets are
assessed as either finite or indefinite.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022
(all amounts are expressed in RON, unless specified otherwise)
3.SIGNIFICANT ACCOUNTING POLICIES (continued)
(a)
Property, plant and Equipment and intangible assets (continued)
Property, plant and Equipment and intangible assets (continued)
INTANGIBLE ASSETS
(continued)
(continued)
Intangible assets with finite lives are amortised over the useful economic life and assessed for impairment whenever there is
an indication that the intangible asset may be impaired. The estimated useful lives used for intangible assets are as follows:
an indication that the intangible asset may be impaired. The estimated useful lives used for intangible assets are as follows:
Category
Useful live
Licenses
2 years
Patents
2-12 years
Concessions
2 years
Trademarks and customers lists
Indefinite useful life
The amortisation period and the amortisation method for an intangible asset with a finite useful life is reviewed at least at
each financial year end.
each financial year end.
Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the
asset is accounted for by changing the amortisation period or method, as appropriate, and are treated as changes in
accounting estimates.
asset is accounted for by changing the amortisation period or method, as appropriate, and are treated as changes in
accounting estimates.
The amortisation expense on intangible assets with finite lives is recognised in the income statement in the depreciation and
amortization expense.
amortization expense.
Intangible assets with indefinite useful life are tested for impairment annually, irrespective of whether there is any indication of impairment, as well as whenever there is any indication that they may be impaired.
(b)
Investment property
An investment property is held to obtain revenues from rentals or to increase the capital or both. Therefore, an investment
property generates cash flows that are to a great extent independent from other assets held by an Group.
property generates cash flows that are to a great extent independent from other assets held by an Group.
The Group’s accounting policy regarding subsequent valuation of investment property is based on the cost model, and subsequently depreciated on its useful life, using the straight line method.
(c)
Foreign currencies
In preparing the consolidated financial statements of the Group, transactions in currencies other than the Group ‘s
functional currency (foreign currencies) are recognized at the rates of exchange prevailing at the dates of the transactions.
At the end of each reporting period, monetary items denominated in foreign currencies are translated at the rates prevailing
at that date. Non-monetary items carried at fair value that are denominated in foreign currencies are translated at the rates
prevailing at the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost
in a foreign currency are not retranslated.
functional currency (foreign currencies) are recognized at the rates of exchange prevailing at the dates of the transactions.
At the end of each reporting period, monetary items denominated in foreign currencies are translated at the rates prevailing
at that date. Non-monetary items carried at fair value that are denominated in foreign currencies are translated at the rates
prevailing at the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost
in a foreign currency are not retranslated.
Exchange differences on monetary items are recognized in profit or loss in the period in which they arise except for:
•
Exchange differences on foreign currency borrowings relating to assets under construction for future productive use,
which are included in the cost of those assets when they are regarded as an adjustment to interest costs on those
foreign currency borrowings;
Exchange differences on foreign currency borrowings relating to assets under construction for future productive use,
which are included in the cost of those assets when they are regarded as an adjustment to interest costs on those
foreign currency borrowings;
•
Exchange differences on transactions entered into in order to hedge certain foreign currency risks.
Exchange differences on transactions entered into in order to hedge certain foreign currency risks.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022
(all amounts are expressed in RON, unless specified otherwise)
3.SIGNIFICANT ACCOUNTING POLICIES (continued)
(c)
Foreign currencies (continued)
Foreign currencies (continued)
The official conversion rates used to convert foreign currency denominated balance sheet items at the end of the reporting
periods were as follows:
periods were as follows:
CCY
December 31,
2022
December 31,
2021
December 31,
2020
EUR
4.9474
4.9481
4.8694
USD
4.6346
4.3707
3.9660
(d)
Trade receivables and other receivables
Trade Receivables and other receivables include invoices issued at nominal value and revenues for goods delivered until the
end of the year but invoiced in the first days after the end of the year. Trade receivables and similar accounts are initially
recognized at transaction price and subsequently presented at amortized cost less impairment losses. Trade and other
receivables do not contain any significant financing component, the amortized costs amounts approximates the fair value.
end of the year but invoiced in the first days after the end of the year. Trade receivables and similar accounts are initially
recognized at transaction price and subsequently presented at amortized cost less impairment losses. Trade and other
receivables do not contain any significant financing component, the amortized costs amounts approximates the fair value.
. Ultimate losses may vary from current estimates.
The nominal value of receivables to be collected in instalments due over one year is discounted considering the best
estimate of an interest rate, to take into account the time value of money and risk profile of the counterparty.
estimate of an interest rate, to take into account the time value of money and risk profile of the counterparty.
Please refer to note 3 (g) for how the Group recognizes lifetime expected credit losses on trade receivables. The Group uses
the simplified method of expected credit losses.
the simplified method of expected credit losses.
(e)
Inventories
Inventories are stated at the lower of cost and net realizable value.
Inventories like raw materials, consumables, materials in the form of inventory items, goods and packages are valued at
acquisition cost or the price in foreign currency at the exchange rate on the date of acquisition, plus custom duties, custom
fees and travel expenses such as insurance.
acquisition cost or the price in foreign currency at the exchange rate on the date of acquisition, plus custom duties, custom
fees and travel expenses such as insurance.
Costs of inventories is determined on a first-in-first-out basis. Net realisable value represents the estimated selling price for
inventories less all estimated costs of completion and costs necessary to make the sale.
inventories less all estimated costs of completion and costs necessary to make the sale.
If the Group considers it necessary, value adjustments are made for obsolete inventory or scrap.
(f)
Bank deposits, cash and cash equivalents
Cash and cash equivalents comprise cash balances and deposits with an original maturity up to 3 months which are subject
to an insignificant risk in fair value change. Cash in foreign currencies are revalued at the exchange rate at the end of the
period. Bank overdrafts are treated as current liabilities.
to an insignificant risk in fair value change. Cash in foreign currencies are revalued at the exchange rate at the end of the
period. Bank overdrafts are treated as current liabilities.
Bank deposits refer to those who have an initial maturity of more than 3 months.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022
(all amounts are expressed in RON, unless specified otherwise)
3.SIGNIFICANT ACCOUNTING POLICIES (continued)
(g)
Impairment of financial assets
The Group recognizes a loss allowance for expected credit losses on investments in debt instruments that are measured at
amortized cost or at fair value through other comprehensive income. The amount of expected credit losses is updated at
each reporting date to reflect changes in credit risk since initial recognition of the respective financial instrument. The Group
assumes that the credit risk on a financial asset has increased significantly if it is more than 30 days past due.
amortized cost or at fair value through other comprehensive income. The amount of expected credit losses is updated at
each reporting date to reflect changes in credit risk since initial recognition of the respective financial instrument. The Group
assumes that the credit risk on a financial asset has increased significantly if it is more than 30 days past due.
The Group always recognizes lifetime expected credit losses for trade receivables. The expected credit losses on these
financial assets are estimated using a provision matrix based on the Group’s historical credit loss experience, adjusted for
factors that are specific to the debtors, general economic conditions and an assessment of both the current as well as the
forecast direction of conditions at the reporting date, including time value of money where appropriate.
financial assets are estimated using a provision matrix based on the Group’s historical credit loss experience, adjusted for
factors that are specific to the debtors, general economic conditions and an assessment of both the current as well as the
forecast direction of conditions at the reporting date, including time value of money where appropriate.
i.
Definition of default
Definition of default
The Group considers the following as constituting an event of default for internal credit risk management purposes as
historical experience indicates that financial assets that meet either of the following criteria are generally not recoverable:
historical experience indicates that financial assets that meet either of the following criteria are generally not recoverable:
•
when there is a breach of financial covenants by the debtor; or
when there is a breach of financial covenants by the debtor; or
•
information developed internally or obtained from external sources indicates that the debtor is unlikely to pay its
creditors, including the Group, in full (without taking into account any collateral held by the Group).
information developed internally or obtained from external sources indicates that the debtor is unlikely to pay its
creditors, including the Group, in full (without taking into account any collateral held by the Group).
Irrespective of the above analysis, the Group considers that default has occurred when a financial asset is more
than 90 days past due unless the Group has reasonable and supportable information to demonstrate that a more lagging
default criterion is more appropriate.
default criterion is more appropriate.
ii.
Credit-impaired financial assets
Credit-impaired financial assets
A financial asset is credit-impaired when one or more events that have a detrimental impact on the estimated future cash
flows of that financial asset have occurred. Evidence that a financial asset is credit-impaired includes observable data about
the following events:
flows of that financial asset have occurred. Evidence that a financial asset is credit-impaired includes observable data about
the following events:
a)
significant financial difficulty of the issuer or the borrower;
significant financial difficulty of the issuer or the borrower;
b)
a breach of contract, such as a default or past due event (see (ii) above);
a breach of contract, such as a default or past due event (see (ii) above);
c)
the lender(s) of the borrower, for economic or contractual reasons relating to the borrower’s financial difficulty,
having granted to the borrower a concession(s) that the lender(s) would not otherwise consider;
the lender(s) of the borrower, for economic or contractual reasons relating to the borrower’s financial difficulty,
having granted to the borrower a concession(s) that the lender(s) would not otherwise consider;
d)
it is becoming probable that the borrower will enter bankruptcy or other financial reorganisation; or
it is becoming probable that the borrower will enter bankruptcy or other financial reorganisation; or
e)
the disappearance of an active market for that financial asset because of financial difficulties.
the disappearance of an active market for that financial asset because of financial difficulties.
iii.
Write-off policy
Write-off policy
The Group writes off a financial asset when there is information indicating that the debtor is in severe financial
difficulty and there is no realistic prospect of recovery, e.g. when the debtor has been placed under liquidation or has
entered into bankruptcy proceedings. Financial assets written off may still be subject to enforcement activities under the
Group’s recovery procedures, taking into account legal advice where appropriate. Any recoveries made are recognised in
profit or loss.
entered into bankruptcy proceedings. Financial assets written off may still be subject to enforcement activities under the
Group’s recovery procedures, taking into account legal advice where appropriate. Any recoveries made are recognised in
profit or loss.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022
(all amounts are expressed in RON, unless specified otherwise)
3.SIGNIFICANT ACCOUNTING POLICIES (continued)
(g)
Impairment of financial assets (continued)
Impairment of financial assets (continued)
iv.
Measurement and recognition of expected credit losses
Measurement and recognition of expected credit losses
The measurement of expected credit losses is a function of the probability of default, loss given default (i.e. the magnitude
of the loss if there is a default) and the exposure at default. The assessment of the probability of default and loss given
default is based on historical data adjusted by forward-looking information as described above. As for the exposure at
default, for financial assets, this is represented by the assets’ gross carrying amount at the reporting date.
of the loss if there is a default) and the exposure at default. The assessment of the probability of default and loss given
default is based on historical data adjusted by forward-looking information as described above. As for the exposure at
default, for financial assets, this is represented by the assets’ gross carrying amount at the reporting date.
For financial assets, the expected credit loss is estimated as the difference between all contractual cash flows that are due to
the Group in accordance with the contract and all the cash flows that the Group expects to receive, discounted at the
original effective interest rate.
the Group in accordance with the contract and all the cash flows that the Group expects to receive, discounted at the
original effective interest rate.
The Group recognises an impairment loss and reversal of impairment loss in profit or loss for all financial assets in the scope
of expected credit loss (ECL) model with a corresponding adjustment to their carrying amount through a loss allowance
account, except for investments in debt instruments that are measured at fair value through other comprehensive income
(FVTOCI, for which the loss allowance is recognised in other comprehensive income and accumulated in the investment
revaluation reserve, and does not reduce the carrying amount of the financial asset in the statement of financial position.
of expected credit loss (ECL) model with a corresponding adjustment to their carrying amount through a loss allowance
account, except for investments in debt instruments that are measured at fair value through other comprehensive income
(FVTOCI, for which the loss allowance is recognised in other comprehensive income and accumulated in the investment
revaluation reserve, and does not reduce the carrying amount of the financial asset in the statement of financial position.
Derecognition of financial assets
The Group derecognises a financial asset only when the contractual rights to the cash flows from the asset expire, or when it
transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity.
transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity.
If the Group neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the
transferred asset, the Group recognises its retained interest in the asset and an associated liability for amounts it may have
to pay. If the Group retains substantially all the risks and rewards of ownership of a transferred financial asset, the Group
continues to recognise the financial asset and also recognises a collateralised borrowing for the proceeds received.
transferred asset, the Group recognises its retained interest in the asset and an associated liability for amounts it may have
to pay. If the Group retains substantially all the risks and rewards of ownership of a transferred financial asset, the Group
continues to recognise the financial asset and also recognises a collateralised borrowing for the proceeds received.
On derecognition of a financial asset measured at amortised cost, the difference between the asset’s carrying amount and
the sum of the consideration received and receivable is recognised in profit or loss.
the sum of the consideration received and receivable is recognised in profit or loss.
(h)
Share capital
Ordinary shares are classified as part of equity. The Group recognizes changes in the share capital as provided by law and
only after their approval by the Shareholders and registration at Trade Register. Additional costs directly attributable to issue
of shares are recognized as a deduction from equity, net of the effects of taxation.
only after their approval by the Shareholders and registration at Trade Register. Additional costs directly attributable to issue
of shares are recognized as a deduction from equity, net of the effects of taxation.
(i)
Trade and other payables
Trade payables and other liabilities are initially recorded at fair value and subsequently measured using the effective interest
method and include the invoices issued by suppliers of goods and services rendered.
method and include the invoices issued by suppliers of goods and services rendered.
(j)
Interest bearing loans
Interest bearing borrowings are recognized initially at fair value, net of transaction costs. Subsequent to initial recognition,
borrowings are presented at amortized cost, any difference between cost and redemption value being recognized in the
income statement over the period of a loan based on the effective interest rate.
borrowings are presented at amortized cost, any difference between cost and redemption value being recognized in the
income statement over the period of a loan based on the effective interest rate.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022
(all amounts are expressed in RON, unless specified otherwise)
3.SIGNIFICANT ACCOUNTING POLICIES (continued)
(k)
Leasing
The Group as lessee
The Group assesses whether a contract is or contains a lease component, at inception of the contract. The Group recognises
a right-of-use asset and a corresponding lease liability with respect to all lease arrangements in which it is the lessee, except
for short-term leases (with a lease term of 12 months or less) and leases of low value assets (of less than USD 5,000). For
these leases, the Group recognizes the lease payments as an operating expense on a straight-line basis over the term of the
lease unless another systematic basis is more representative of the time pattern in which economic benefits from the leased
assets are consumed.
a right-of-use asset and a corresponding lease liability with respect to all lease arrangements in which it is the lessee, except
for short-term leases (with a lease term of 12 months or less) and leases of low value assets (of less than USD 5,000). For
these leases, the Group recognizes the lease payments as an operating expense on a straight-line basis over the term of the
lease unless another systematic basis is more representative of the time pattern in which economic benefits from the leased
assets are consumed.
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement
date, discounted by using the interest rate implicit in the lease. If this rate cannot be readily determined, the Group uses its
incremental borrowing rate.
date, discounted by using the interest rate implicit in the lease. If this rate cannot be readily determined, the Group uses its
incremental borrowing rate.
The lease liability is presented as a separate line in the consolidated statement of financial position. The lease liability is
subsequently measured by increasing the carrying amount to reflect interest on the lease liability (using the effective
interest method) and by reducing the carrying amount to reflect the lease payments made.
subsequently measured by increasing the carrying amount to reflect interest on the lease liability (using the effective
interest method) and by reducing the carrying amount to reflect the lease payments made.
The Group remeasures the lease liability (and makes a corresponding adjustment to the related right-of-use asset)
whenever:
whenever:
•
the lease term has changed or there is a significant event or change in circumstances resulting in a change in the
assessment of exercise of a purchase option, in which case the lease liability is remeasured by discounting the
revised lease payments using a revised discount rate;
the lease term has changed or there is a significant event or change in circumstances resulting in a change in the
assessment of exercise of a purchase option, in which case the lease liability is remeasured by discounting the
revised lease payments using a revised discount rate;
•
the lease payments change due to changes in an index or rate or a change in expected payment under a
guaranteed residual value, in which cases the lease liability is remeasured by discounting the revised lease
payments using an unchanged discount rate (unless the lease payments change is due to a change in a floating
interest rate, in which case a revised discount rate is used)
the lease payments change due to changes in an index or rate or a change in expected payment under a
guaranteed residual value, in which cases the lease liability is remeasured by discounting the revised lease
payments using an unchanged discount rate (unless the lease payments change is due to a change in a floating
interest rate, in which case a revised discount rate is used)
•
a lease contract is modified and the lease modification is not accounted for as a separate lease, in which case the
lease liability is remeasured based on the lease term of the modified lease by discounting the revised lease
payments using a revised discount rate at the effective date of the modification.
a lease contract is modified and the lease modification is not accounted for as a separate lease, in which case the
lease liability is remeasured based on the lease term of the modified lease by discounting the revised lease
payments using a revised discount rate at the effective date of the modification.
Right-of-use assets are depreciated over the shorter period of lease term and useful life of the underlying asset. If a lease
transfers ownership of the underlying asset or the cost of the right-of-use asset reflects that the Group expects to exercise a
purchase option, the related right-of-use asset is depreciated over the useful life of the underlying asset. The depreciation
starts at the commencement date of the lease.
transfers ownership of the underlying asset or the cost of the right-of-use asset reflects that the Group expects to exercise a
purchase option, the related right-of-use asset is depreciated over the useful life of the underlying asset. The depreciation
starts at the commencement date of the lease.
The right-of-use assets are presented as a separate line in the consolidated statement of financial position.
Please refer to note 3 (a) (v) for the accounting policy for impairment testing.
(l)
Employee benefits
The Group, in the normal course of business, makes payments to the Romanian State on behalf of its employees for
pensions, health care and unemployment cover. The cost of these payments is charged to profit or loss account in the same
period as the related salary cost.
pensions, health care and unemployment cover. The cost of these payments is charged to profit or loss account in the same
period as the related salary cost.
The Group pays employees retirement benefits, benefits which are defined in the Collective Labor Agreement of the Group.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022
(all amounts are expressed in RON, unless specified otherwise)
3.SIGNIFICANT ACCOUNTING POLICIES (continued)
For defined benefit retirement benefit plans, the cost of providing benefits is determined using the Projected Unit Credit Method, with actuarial valuations being carried out at the end of each annual reporting period. Remeasurements comprising actuarial gains and losses, the effect of the asset ceiling (if applicable) and the return on plan assets (excluding interest) are recognised immediately in the statement of financial position with a charge or credit to other comprehensive income in the period in which they occur. Remeasurements recognized in other comprehensive income are not reclassified.
(l)
Employee benefits (continued)
Employee benefits (continued)
(m)
Governmental Grants
Government grants are not recognised until there is reasonable assurance that the Group will comply with the conditions
attaching to them and that the grants will be received.
attaching to them and that the grants will be received.
Government grants are recognised in profit or loss on a systematic basis over the periods in which the Group recognises as
expenses the related costs for which the grants are intended to compensate. Specifically, government grants whose primary
condition is that the Group should purchase, construct or otherwise acquire non-current assets (including property, plant
and equipment) are recognised as deferred income in the consolidated statement of financial position and transferred to
profit or loss on a systematic and rational basis over the useful lives of the related assets.
expenses the related costs for which the grants are intended to compensate. Specifically, government grants whose primary
condition is that the Group should purchase, construct or otherwise acquire non-current assets (including property, plant
and equipment) are recognised as deferred income in the consolidated statement of financial position and transferred to
profit or loss on a systematic and rational basis over the useful lives of the related assets.
Government grants that are receivable as compensation for expenses or losses already incurred or for the purpose of giving
immediate financial support to the Group with no future related costs are recognised in profit or loss in the period in which
they become receivable.
immediate financial support to the Group with no future related costs are recognised in profit or loss in the period in which
they become receivable.
(n)
Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is
probable that the Group will be required to settle the obligation, and a reliable estimate can be made of the amount of the
obligation.
probable that the Group will be required to settle the obligation, and a reliable estimate can be made of the amount of the
obligation.
Provisions are determined by discounting the expected future cash flows using a pre-tax rate that reflects current market
assessments of the time value of money and the risks specific to the liability. Unwinding of the discount is recognized as
financial expense. Where the effect of time value of money is material, the amount of a provision is the present value of the
expenditures that are foreseen to be required to settle the obligation.
assessments of the time value of money and the risks specific to the liability. Unwinding of the discount is recognized as
financial expense. Where the effect of time value of money is material, the amount of a provision is the present value of the
expenditures that are foreseen to be required to settle the obligation.
When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, a
receivable is recognized as an asset if it is virtually certain that reimbursement will be received and the amount of the
receivable can be measured reliably.
receivable is recognized as an asset if it is virtually certain that reimbursement will be received and the amount of the
receivable can be measured reliably.
Onerous contracts
Present obligations arising under onerous contracts are recognized and measured as provisions. An onerous contract is
considered to exist where the
Group
has a contract under which the unavoidable costs of meeting the obligations under the
contract exceed the economic benefits expected to be received from the contract.
considered to exist where the
Group
has a contract under which the unavoidable costs of meeting the obligations under the
contract exceed the economic benefits expected to be received from the contract.
Decommissioning provisions
Liabilities for decommissioning costs are recognized when the Group has an obligation to 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.
According with the Integrated Environmental Authorisation no. 1/10.01.2013 from the Agency of Environmental Protection
Bacau, the Group should dismantle the equipment when the activity will be ceased, and restore the land to its initial
condition. As at December 31, 2022, the Group have no plans to cease totally or partially the Group’s activity.
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.
According with the Integrated Environmental Authorisation no. 1/10.01.2013 from the Agency of Environmental Protection
Bacau, the Group should dismantle the equipment when the activity will be ceased, and restore the land to its initial
condition. As at December 31, 2022, the Group have no plans to cease totally or partially the Group’s activity.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022
(all amounts are expressed in RON, unless specified otherwise)
3.SIGNIFICANT ACCOUNTING POLICIES (continued)
(n)
Provisions (continued)
Provisions (continued)
However, a decommissioning provision was recorded in relation to warehouses with dangerous and non-hazard substances for which the decommissioning part should be performed in order to comply with the environmental requirements.
(o)
Income tax
Income tax expenses comprise current tax and deferred tax.
Current tax is the tax expected to be paid or received for taxable income or loss realized in the year, using tax rates enacted
or substantively enacted at the reporting date, and any adjustment to the payment obligations of corporation tax for the
previous years. Current tax payable also includes any tax arising from declaring dividends.
or substantively enacted at the reporting date, and any adjustment to the payment obligations of corporation tax for the
previous years. Current tax payable also includes any tax arising from declaring dividends.
Deferred tax is recognized in respect of temporary differences between the carrying amounts of assets and liabilities for
financial reporting purposes and the tax base used to calculate the tax. Deferred tax is not recognized for the following
temporary differences:
•
the initial recognition of assets or liabilities originating in a transaction that is not a business combination and
that is not affecting the accounting or taxable profit or loss;
the initial recognition of assets or liabilities originating in a transaction that is not a business combination and
that is not affecting the accounting or taxable profit or loss;
•
differences on investments in subsidiaries or jointly controlled entities, to the extent that it is probable that they
will not be reversed in the foreseeable future; and
differences on investments in subsidiaries or jointly controlled entities, to the extent that it is probable that they
will not be reversed in the foreseeable future; and
•
taxable temporary differences arising from the initial recognition of goodwill.
taxable temporary differences arising from the initial recognition of goodwill.
Deferred tax receivables and liabilities are offset only if there is a legally enforceable right to offset current tax liabilities and
receivables, and relate to taxes levied by the same taxation authority to the same Group or different taxable Group, and the
Group intends to settle its current tax assets and liabilities on a net basis.
receivables, and relate to taxes levied by the same taxation authority to the same Group or different taxable Group, and the
Group intends to settle its current tax assets and liabilities on a net basis.
A deferred tax asset is recognized for unused tax losses, tax credits and deductible temporary differences to the extent that
it is probable the realization of taxable profits which will be available in the future and will be used. Deferred tax assets are
reviewed at each reporting date and are reduced to the extent that it is no longer probable that a tax benefit will be
realized. Effect of tax rate change on deferred tax is recognized in profit or loss, except when it relates to items recognized in
other comprehensive income or directly in equity.
it is probable the realization of taxable profits which will be available in the future and will be used. Deferred tax assets are
reviewed at each reporting date and are reduced to the extent that it is no longer probable that a tax benefit will be
realized. Effect of tax rate change on deferred tax is recognized in profit or loss, except when it relates to items recognized in
other comprehensive income or directly in equity.
Statutory income tax rate for the year ended December 31, 2022 was 16% (December 31, 2021: 16%).
(p)
Related parties
Companies are considered related if one party, through ownership, contractual rights, family relationship or other kind, has
the opportunity to directly or indirectly control or significantly influence the other party.
the opportunity to directly or indirectly control or significantly influence the other party.
(q)
Revenues
Revenues are measured
in accordance with IFRS 15 – Revenues from Contracts with Customers
.
in accordance with IFRS 15 – Revenues from Contracts with Customers
.
IFRS 15 establishes a 5-step model to record the revenues resulted from contracts with customers:
•
Step 1: Identification of a contract with a customer
Step 1: Identification of a contract with a customer
•
Step 2: Identification of performance obligations established in the contract.
Step 2: Identification of performance obligations established in the contract.
•
Step 3: Determination of the transaction price
Step 3: Determination of the transaction price
•
Step 4: Allocation of the transaction price for the performance obligations included in the contract
Step 4: Allocation of the transaction price for the performance obligations included in the contract
•
Step 5: Recognition of revenues as the company fulfils each performance obligation
Step 5: Recognition of revenues as the company fulfils each performance obligation
In accordance with IFRS 15, revenues are recognized in the amount which reflects the consideration at which an entity
expects to be entitled in exchange of the transfer of goods or services to a customer
expects to be entitled in exchange of the transfer of goods or services to a customer
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022
(all amounts are expressed in RON, unless specified otherwise)
3.SIGNIFICANT ACCOUNTING POLICIES (continued)
(q)
Revenues (continued)
Revenues (continued)
Revenues from sales of goods
Revenue from sales of goods is recognized at a point in time when it transfers control of a product to the buyer.
The consideration promised in sales contracts doesn’t include a variable consideration such as discounts, rebates, refunds,
credits, price concessions, incentives, performance bonuses or other similar items.
credits, price concessions, incentives, performance bonuses or other similar items.
The Group invoices the customer for the agreed-upon price with a typical 30-day payment terms, some group of clients
might have a maximum length of 90-day payment terms. Advance payments are requested by the Group to the external
clients and once the advance is received the goods are delivered in less than 30 days.
might have a maximum length of 90-day payment terms. Advance payments are requested by the Group to the external
clients and once the advance is received the goods are delivered in less than 30 days.
The Group does not applies long term frame contracts with minimal purchase commitment as all purchases are ad-hoc
orders.
orders.
In accordance with IFRS 15, the revenues will be recognized when a customer gets control of the goods. The Group delivers
goods under contractual conditions based on delivery terms.
goods under contractual conditions based on delivery terms.
For the contracts with customers, the sale of goods (mainly polyols, chloralkali and oxo alcohols products) is generally
estimated to be one single performance obligation. The Group
charges extra for shipping if the customer requires delivery
services and the delivery fees are included in the price of products sold. Thereby delivery necessarily occurs before control
of the goods transfers to the customer and the Group policy is to consider that the delivery fees are not a separate service
provided to the customer and are included in the transaction price. The Group does not provide transportation services as a
standalone service and these are done in connection with the sale of goods to certain customers.
estimated to be one single performance obligation. The Group
charges extra for shipping if the customer requires delivery
services and the delivery fees are included in the price of products sold. Thereby delivery necessarily occurs before control
of the goods transfers to the customer and the Group policy is to consider that the delivery fees are not a separate service
provided to the customer and are included in the transaction price. The Group does not provide transportation services as a
standalone service and these are done in connection with the sale of goods to certain customers.
The Group expects that the revenue recognition will take place at a certain moment in time, when the control of the asset is
transferred to the customer, namely upon delivery of the goods in accordance with the Incoterms established. The main
incoterm used by the Group is Free Carrier “FCA” is on over 70% of the Group’s sales followed by Delivered at Place “DAP”,
Delivered Duty Paid “DDP” and Carriage and Insurance Paid to “CIP”.
transferred to the customer, namely upon delivery of the goods in accordance with the Incoterms established. The main
incoterm used by the Group is Free Carrier “FCA” is on over 70% of the Group’s sales followed by Delivered at Place “DAP”,
Delivered Duty Paid “DDP” and Carriage and Insurance Paid to “CIP”.
As at December 31, 2022 and 2021 the Group didn’t have any bill-and-hold arrangement concluded.
Revenues from service
Revenue from sales of services is measured based on the consideration to which the Group expects to be entitled in a
contract with a customer. The Group recognises revenue when it transfers control of a service to a
customer. The services
provided by the Group are recognized monthly once the service is performed. The
Group applies a typical 30-day payment
terms
contract with a customer. The Group recognises revenue when it transfers control of a service to a
customer. The services
provided by the Group are recognized monthly once the service is performed. The
Group applies a typical 30-day payment
terms
(r)
Financial income and expenses
Financial income includes interest income, dividend income, changes in fair value of financial assets through profit or loss.
Interest income is recognized as it accumulates in profit or loss using the effective interest method. Dividend income is
recognized in profit or loss at the date when is determined the Group’s right to receive dividends.
Interest income is recognized as it accumulates in profit or loss using the effective interest method. Dividend income is
recognized in profit or loss at the date when is determined the Group’s right to receive dividends.
Financial expenses comprise interest expenses of loans, unwinding of the discount of provisions, changes in the fair value of
financial assets recognized at fair value through profit or loss.
financial assets recognized at fair value through profit or loss.
All borrowing costs that are not directly attributable to an acquisition, construction or production of assets on long-term, are
recognized in profit or loss, using the effective interest method.
recognized in profit or loss, using the effective interest method.
Gains and losses on exchange differences are carried on a net basis.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022
(all amounts are expressed in RON, unless specified otherwise)
3.SIGNIFICANT ACCOUNTING POLICIES (continued)
(s)
Contingencies
Contingent liabilities are not recognized in the consolidated financial statements. They are presented if there is the
possibility of an outflow of resources representing possible economic benefits, but not probable, and / or the amount can be
estimated reliably. A contingent asset is not recognized in the accompanying consolidated financial statements, but
disclosed when an inflow of economic benefits is probable but not remote and the amount cannot be reliably estimate
possibility of an outflow of resources representing possible economic benefits, but not probable, and / or the amount can be
estimated reliably. A contingent asset is not recognized in the accompanying consolidated financial statements, but
disclosed when an inflow of economic benefits is probable but not remote and the amount cannot be reliably estimate
(t)
Fair value
Certain accounting policies of the Group and presentation of information requirements need the determination of fair value
for financial assets and liabilities such as for non-financial. The fair values were determined in order to evaluate and present
the information in the consolidated financial statements using the methods described below. When applicable, further
information about the assumptions used in determining fair values are disclosed specific to the asset or liability.
for financial assets and liabilities such as for non-financial. The fair values were determined in order to evaluate and present
the information in the consolidated financial statements using the methods described below. When applicable, further
information about the assumptions used in determining fair values are disclosed specific to the asset or liability.
(u)
Business combinations
Acquisitions of businesses are accounted for using the acquisition method. The consideration transferred in a business
combination is measured at fair value, which is calculated as the sum of the acquisition-date fair values of assets transferred
by the Group, liabilities incurred by the Group to the former owners of the acquiree and the equity interest issued by the
Group in exchange for control of the acquiree. Acquisition-related costs are recognised in profit or loss as incurred.
combination is measured at fair value, which is calculated as the sum of the acquisition-date fair values of assets transferred
by the Group, liabilities incurred by the Group to the former owners of the acquiree and the equity interest issued by the
Group in exchange for control of the acquiree. Acquisition-related costs are recognised in profit or loss as incurred.
At the acquisition date, the identifiable assets acquired and the liabilities assumed are recognised at their fair value at the
acquisition date, except that:
acquisition date, except that:
•
deferred tax assets or liabilities and assets or liabilities related to employee benefit arrangements are recognised
and measured in accordance with IAS 12 Income Taxes and IAS 19 Employee Benefits respectively;
deferred tax assets or liabilities and assets or liabilities related to employee benefit arrangements are recognised
and measured in accordance with IAS 12 Income Taxes and IAS 19 Employee Benefits respectively;
•
liabilities or equity instruments related to share-based payment arrangements of the acquiree or share-based
payment arrangements of the Group entered into to replace share-based payment arrangements of the acquiree
are measured in accordance with IFRS 2 Share-Based Payments at the acquisition date (see below); and
liabilities or equity instruments related to share-based payment arrangements of the acquiree or share-based
payment arrangements of the Group entered into to replace share-based payment arrangements of the acquiree
are measured in accordance with IFRS 2 Share-Based Payments at the acquisition date (see below); and
•
assets (or disposal groups) that are classified as held for sale in accordance with IFRS 5 Non-current Assets Held
for Sale and Discontinued Operations are measured in accordance with that Standard.
assets (or disposal groups) that are classified as held for sale in accordance with IFRS 5 Non-current Assets Held
for Sale and Discontinued Operations are measured in accordance with that Standard.
Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any non-controlling interests
in the acquiree, and the fair value of the acquirer’s previously held equity interest in the acquiree (if any) over the net of the
acquisition-date amounts of the identifiable assets acquired and the liabilities assumed. If, after reassessment, the net of the
acquisition-date amounts of the identifiable assets acquired and liabilities assumed exceeds the sum of the consideration
transferred, the amount of any non-controlling interests in the acquiree and the fair value of the acquirer’s previously held
interest in the acquiree (if any), the excess is recognised immediately in profit or loss as a bargain purchase gain.
When the consideration transferred by the Group in a business combination includes contingent consideration arrangement,
the contingent consideration is measured at its acquisition-date fair value and included as part of the consideration
transferred in a business combination. Changes in fair value of the contingent consideration that qualify as measurement
period adjustments are adjusted retrospectively, with corresponding adjustments against goodwill. Measurement period
adjustments are adjustments that arise from additional information obtained during the ‘measurement period’ (which
cannot exceed one year from the acquisition date) about facts and circumstances that existed at the acquisition date.
the contingent consideration is measured at its acquisition-date fair value and included as part of the consideration
transferred in a business combination. Changes in fair value of the contingent consideration that qualify as measurement
period adjustments are adjusted retrospectively, with corresponding adjustments against goodwill. Measurement period
adjustments are adjustments that arise from additional information obtained during the ‘measurement period’ (which
cannot exceed one year from the acquisition date) about facts and circumstances that existed at the acquisition date.
The subsequent accounting for changes in the fair value of the contingent consideration that do not qualify as measurement
period adjustments depends on how the contingent consideration is classified. Contingent consideration that is classified as
equity is not remeasured at subsequent reporting dates and its subsequent settlement is accounted for within equity. Other
contingent consideration is remeasured to fair value at subsequent reporting dates with changes in fair value recognised in
profit or loss.
period adjustments depends on how the contingent consideration is classified. Contingent consideration that is classified as
equity is not remeasured at subsequent reporting dates and its subsequent settlement is accounted for within equity. Other
contingent consideration is remeasured to fair value at subsequent reporting dates with changes in fair value recognised in
profit or loss.
When a business combination is achieved in stages, the Group’s previously held interests in the acquired entity are
remeasured to its acquisition-date fair value and the resulting gain or loss, if any, is recognised in profit or loss. Amounts
arising from interests in the acquiree prior to the acquisition date that have previously been recognised in other
comprehensive income are reclassified to profit or loss, where such treatment would be appropriate if that interest were
disposed of.
remeasured to its acquisition-date fair value and the resulting gain or loss, if any, is recognised in profit or loss. Amounts
arising from interests in the acquiree prior to the acquisition date that have previously been recognised in other
comprehensive income are reclassified to profit or loss, where such treatment would be appropriate if that interest were
disposed of.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022
(all amounts are expressed in RON, unless specified otherwise)
3.SIGNIFICANT ACCOUNTING POLICIES (continued)
(u)
Business combinations (continued)
Business combinations (continued)
If the initial accounting for a business combination is incomplete by the end of the reporting period in which the
combination occurs, the Group reports provisional amounts for the items for which the accounting is incomplete. Those
provisional amounts are adjusted during the measurement period (see above), or additional assets or liabilities are
recognised, to reflect new information obtained about facts and circumstances that existed as of the acquisition date that, if
known, would have affected the amounts recognised as of that date.
combination occurs, the Group reports provisional amounts for the items for which the accounting is incomplete. Those
provisional amounts are adjusted during the measurement period (see above), or additional assets or liabilities are
recognised, to reflect new information obtained about facts and circumstances that existed as of the acquisition date that, if
known, would have affected the amounts recognised as of that date.
(v)
Investments in associates
An associate is an entity over which the Group has significant influence and that is neither a subsidiary nor an interest in a
joint venture. Significant influence is the power to participate in the financial and operating policy decisions of the investee
.
joint venture. Significant influence is the power to participate in the financial and operating policy decisions of the investee
.
The results and assets and liabilities of associates are incorporated in these financial statements using the equity method of
accounting, except when the investment is classified as held for sale, in which case it is accounted for in accordance with
IFRS 5.
accounting, except when the investment is classified as held for sale, in which case it is accounted for in accordance with
IFRS 5.
Under the equity method, an investment in an associate is recognised initially in the consolidated statement of financial
position at cost and adjusted thereafter to recognise the Group’s share of the profit or loss and other comprehensive
income of the associate. When the Group’s share of losses of an associate exceeds the Group’s interest in that associate
(which includes any long-term interests that, in substance, form part of the Group’s net investment in the associate), the
Group discontinues recognising its share of further losses. Additional losses are recognised only to the extent that the Group
has incurred legal or constructive obligations or made payments on behalf of the associate.
position at cost and adjusted thereafter to recognise the Group’s share of the profit or loss and other comprehensive
income of the associate. When the Group’s share of losses of an associate exceeds the Group’s interest in that associate
(which includes any long-term interests that, in substance, form part of the Group’s net investment in the associate), the
Group discontinues recognising its share of further losses. Additional losses are recognised only to the extent that the Group
has incurred legal or constructive obligations or made payments on behalf of the associate.
An investment in an associate is accounted for using the equity method from the date on which the investee becomes an
associate. On acquisition of the investment in an associate, any excess of the cost of the investment over the Group’s share
of the net fair value of the identifiable assets and liabilities of the investee is recognised as goodwill, which is included within
the carrying amount of the investment. Any excess of the Group’s share of the net fair value of the identifiable assets and
liabilities over the cost of the investment, after reassessment, is recognised immediately in profit or loss in the period in
which the investment is acquired.
associate. On acquisition of the investment in an associate, any excess of the cost of the investment over the Group’s share
of the net fair value of the identifiable assets and liabilities of the investee is recognised as goodwill, which is included within
the carrying amount of the investment. Any excess of the Group’s share of the net fair value of the identifiable assets and
liabilities over the cost of the investment, after reassessment, is recognised immediately in profit or loss in the period in
which the investment is acquired.
(w)
Consolidation of entities under common control
Acquisitions of entities under common control is a transaction where the acquired entities are ultimately controlled by the
same party or parties both before and after the consolidation, and that control is not transitory. Under the predecessor
value method, the consolidation is performed as follow:
same party or parties both before and after the consolidation, and that control is not transitory. Under the predecessor
value method, the consolidation is performed as follow:
•
the acquired assets and liabilities are recorded at their existing carrying values;
the acquired assets and liabilities are recorded at their existing carrying values;
•
no goodwill is recorded, the surplus from the acquisition is recorded in the Group retained earnings;
no goodwill is recorded, the surplus from the acquisition is recorded in the Group retained earnings;
•
the carrying amounts of assets, liabilities, income and expenses of entities under common control have
been aggregated and all balances and transactions between the entities have been eliminated.
the carrying amounts of assets, liabilities, income and expenses of entities under common control have
been aggregated and all balances and transactions between the entities have been eliminated.
4.
CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY
In the application of the Group’s accounting policies, which are described in note 3, the directors are required to make
judgements (other than those involving estimations) that have a significant impact on the amounts recognised and to make
estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other
sources. The estimates and associated assumptions are based on historical experience and other factors that are considered
to be relevant.
judgements (other than those involving estimations) that have a significant impact on the amounts recognised and to make
estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other
sources. The estimates and associated assumptions are based on historical experience and other factors that are considered
to be relevant.
Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognised 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.
Revisions to accounting estimates are recognised 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.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022
(all amounts are expressed in RON, unless specified otherwise)
4. CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY (continued)
Critical judgements in applying the Group’s accounting policies
The
following
are
the
critical
judgements,
apart
from
those
involving
estimations
(which
are
presented
separately
below),
that
the
management
have
made
in
the
process
of
applying
the
Group’s
accounting
policies
and
that
have
the
most
significant
effect on the amounts recognised in financial statements.
following
are
the
critical
judgements,
apart
from
those
involving
estimations
(which
are
presented
separately
below),
that
the
management
have
made
in
the
process
of
applying
the
Group’s
accounting
policies
and
that
have
the
most
significant
effect on the amounts recognised in financial statements.
Revaluation of tangible assets
The Group records its tangible assets based on the revaluation method. The last revaluation of property plant and
equipment has been performed as at December 31, 2021, using the depreciated cost method and adjusted, as necessary,
based on an impairment test exercise.
equipment has been performed as at December 31, 2021, using the depreciated cost method and adjusted, as necessary,
based on an impairment test exercise.
Impairment of tangible and intangible assets
At each balance sheet date, the Group reviews the carrying amounts of the intangible and tangible assets to determine
whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the
recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). As at
December 31, 2022 and December 31, 2021 respectively, the management assessed if there is any impairment indicators for
tangible and intangible assets. There was no impairment indicator identified.
whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the
recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). As at
December 31, 2022 and December 31, 2021 respectively, the management assessed if there is any impairment indicators for
tangible and intangible assets. There was no impairment indicator identified.
In assessing the recoverable amount of tangible and intangible assets, management estimates future cash flows discounted
to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and
the risks specific to the tangible and intangible assets for which the estimates of future cash flows have not been adjusted.
The Company considers that the disposal costs are not negligible and the fair value less costs of disposal of the revalued
asset is necessarily less than its fair value.
to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and
the risks specific to the tangible and intangible assets for which the estimates of future cash flows have not been adjusted.
The Company considers that the disposal costs are not negligible and the fair value less costs of disposal of the revalued
asset is necessarily less than its fair value.
The Group considers that the disposal costs of the tangible assets are not negligible and the fair value less costs of disposal
of the revalued asset is necessarily less than its fair value. Therefore, the revalued asset will be impaired if its
of the revalued asset is necessarily less than its fair value. Therefore, the revalued asset will be impaired if its
fair values less
cost to sell
is less than its revalued amount. In this case, after the revaluation requirements have been applied, the Group
applies this to determine whether the asset may be impaired.
Recoverable amount for intangible assets with indefinite useful life (trademarks and customer lists) is determined annually
as the fair value less costs to sell of the specific intangible asset. The Group determine the fair value for impairment analysis
specifically for each item of intangible assets with indefinite useful life.
as the fair value less costs to sell of the specific intangible asset. The Group determine the fair value for impairment analysis
specifically for each item of intangible assets with indefinite useful life.
When measuring the fair value of tangible and intangible assets, the Group uses market observable data as far as possible.
Fair values are categorised into different levels in a fair value hierarchy based on the inputs used in the valuation techniques
as follows:
•
Level 1: quoted prices (unadjusted) in active markets for identical assets;
Level 1: quoted prices (unadjusted) in active markets for identical assets;
•
Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset, either directly (i.e. as
prices) or indirectly (i.e. derived from prices);
Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset, either directly (i.e. as
prices) or indirectly (i.e. derived from prices);
•
Level 3: inputs for the asset that are not based on observable market data (unobservable inputs).
Level 3: inputs for the asset that are not based on observable market data (unobservable inputs).
The budgets used includes forecast for revenue, raw materials, utilities, staff costs and other operating expenses and income
based on current and anticipated market conditions and are approved by the board. However, the budgets used are subject
to uncertainties mainly determined by the market volatility and assumptions used by management, the headroom is
significant.
based on current and anticipated market conditions and are approved by the board. However, the budgets used are subject
to uncertainties mainly determined by the market volatility and assumptions used by management, the headroom is
significant.
Key sources of estimation uncertainty
The key assumptions concerning the future, and other key sources of estimation uncertainty at the reporting period that
may have a significant risk of causing a material adjustment to the carrying amounts of liabilities within the next financial
year, are discussed below.
may have a significant risk of causing a material adjustment to the carrying amounts of liabilities within the next financial
year, are discussed below.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022
(all amounts are expressed in RON, unless specified otherwise)
4. CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY (continued)
Useful life’s of property, plant and equipment items
The management reviews for adequacy the estimated useful lives of property, plant and equipment at the end of each
annual reporting period.
annual reporting period.
Provisions and contingent liabilities
The management exercises judgment in measuring and recognizing provisions (e.g., decommissioning provision, retirement
provision, CO2 emissions provision, commercial litigation, etc.) and the exposures to contingent liabilities related to pending
litigation or other outstanding claims subject to negotiated settlement, mediation, arbitration or government regulation, as
well as other contingent liabilities. Judgment is necessary in assessing the likelihood that a pending claim will succeed, or a
liability will arise, and to quantify the possible range of the financial settlement. Because of the inherent uncertainty in this
evaluation process, actual losses may be different from the originally estimated provision.
provision, CO2 emissions provision, commercial litigation, etc.) and the exposures to contingent liabilities related to pending
litigation or other outstanding claims subject to negotiated settlement, mediation, arbitration or government regulation, as
well as other contingent liabilities. Judgment is necessary in assessing the likelihood that a pending claim will succeed, or a
liability will arise, and to quantify the possible range of the financial settlement. Because of the inherent uncertainty in this
evaluation process, actual losses may be different from the originally estimated provision.
5.
REVENUES
The following is an analysis of the Group’s revenue for the year from continuing operations.
Year ended
December 31,
December 31,
2022
Year ended
December 31,
December 31,
2021
Sales of finished goods
2,134,650,231
2,170,556,518
Services rendered
7,940,980
3,072,833
Sale of goods purchased for resale
89,027,959
34,069,277
Sales of residual products
630,655
51,638
Revenues from transportation services
31,333,880
27,931,954
Total
2,263,583,705
2,235,682,220
Presentation of revenue on business lines:
Year ended
December 31,
December 31,
2022
Year ended
December 31,
December 31,
2021
Polyols
1,095,896,741
1,483,901,682
Chloralkali
995,302,506
442,133,305
Oxo-alcohols
66,746,104
261,699,919
Goods for resale
89,027,959
34,069,277
Other
16,610,395
13,878,037
Total
2,263,583,705
2,235,682,220
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022
(all amounts are expressed in RON, unless specified otherwise)
5. REVENUES (continued)
Presentation of revenues on geographical segments:
Year ended
December 31,
December 31,
2022
Year ended
December 31,
December 31,
2021
Europe
2,092,939,716
1,901,966,292
Middle East
153,819,813
250,270,969
America
5,317,899
17,060,435
Asia-Pacific
10,105,615
57,213,981
Africa
1,400,662
9,170,543
Total
2,263,583,705
2,235,682,220
Presentation of revenue on countries:
Year ended
December 31,
December 31,
2022
Year ended
December 31,
December 31,
2021
Total sales
2,263,583,705
2,235,682,220
Domestic sales
666,031,508
485,451,509
Export sales
1,597,552,197
1,750,230,711
Out of which:
Poland
375,375,331
516,194,880
Turkey
153,045,518
238,202,336
Bulgary
147,469,036
70,798,524
Italy
134,002,652
109,317,532
Hungary
125,482,910
140,419,596
Bosnia and Herzegovina
73,364,518
19,229,550
Germany
68,423,055
105,836,253
Ukraine
68,118,694
59,918,888
Czech Republic
61,860,992
44,009,939
Belgium
57,963,726
56,193,754
Other
332,445,765
390,109,459
As at December 31, 2022, the Group has sales commitments in the amount of RON 262,995,623 (December 31, 2021: RON
1,985,196,366), the entity expects to recognise as revenue in 2023 the amount disclosed.
1,985,196,366), the entity expects to recognise as revenue in 2023 the amount disclosed.
6.
OTHER GAINS AND LOSSES
Year ended
December 31,
December 31,
2022
Year ended
December 31,
December 31,
2021
Net loss/(gain) from bad debts written off
6,067
18,602
Net loss/(gain) from provisions
7,529,741
30,577,917
Net loss/(gain) from foreign exchange
85,500
(2,760,282)
Net loss/(gain) from impairments of current assets
(5,521,300)
1,765,249
Net loss/(gain) on disposed fixed assets
(171,926)
(445,200)
Net loss/(gain) from impairments of financial assets
8,655,349
875,592
Other gains and losses
10,620
(385)
Total
(10,594,051)
30,031,493
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022
(all amounts are expressed in RON, unless specified otherwise)
Year ended
December 31,
December 31,
2022
Year ended
December 31,
December 31,
2021
Raw materials
698,663,708
736,709,982
Other consumables and inventories
38,815,063
30,382,919
Total
737,478,771
767,092,901
8.
EMPLOYEE BENEFITS EXPENSES
Year ended
December 31,
December 31,
2022
Year ended
December 31,
December 31,
2021
Wages and salaries
145,444,674
159,833,797
out of which:
– amount paid to management
22,339,330
22,646,872
– amount paid to board of directors
11,282,590
14,163,983
Meal tickets expenses
10,013,355
10,636,407
Gift tickets expenses
–
–
Holiday tickets expenses
4,606,850
18,550
Social security expenses
9,836,016
9,589,904
Total
169,900,895
180,078,658
9.
DEPRECIATION AND AMORTISATION
Year ended
December 31,
December 31,
2022
Year ended
December 31,
December 31,
2021
Depreciation of right of use asset
8,820,555
4,995,437
Depreciation of investment property
1,893,860
648,137
Depreciation of property plant and equipment
138,823,571
98,817,556
Amortization of intangible assets
4,450,419
6,661,739
Total
153,988,404
111,122,869
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022
(all amounts are expressed in RON, unless specified otherwise)
Year ended
December 31,
December 31,
2022
Year ended
December 31,
December 31,
2021
Consulting expenses
832,371
1,379,554
Other third party out of which:
44,212,208
28,347,674
Logistic services
10,809,980
10,195,438
Security services
4,266,098
3,333,780
Consulting services
1,057,861
2,069,861
Monitoring of waste water
946,904
1,057,341
Other services
27,131,365
11,691,254
Total
45,044,579
29,727,228
11.
OTHER INCOME
Year ended
December 31,
December 31,
2022
Year ended
December 31,
December 31,
2021
Compensations, fines and penalties
50,567
146,321
Amortization of investment subsidies
2,178,343
2,315,162
State-aid for indirect greenhouse emission costs for 2021*
32,404,226
–
Other income
3,005,545
2,574,086
Total
37,638,681
5,035,569
* The Group benefited from a state aid scheme provided by the Romanian Government to support companies in the sectors
and subsectors exposed to a significant risk of relocation due to the transfer of the cost of greenhouse gas emissions to the
price of electricity. The measure covers indirect emission costs incurred in years 2021 and 2022.
and subsectors exposed to a significant risk of relocation due to the transfer of the cost of greenhouse gas emissions to the
price of electricity. The measure covers indirect emission costs incurred in years 2021 and 2022.
The Group recorded as Other income the amount of RON 32,404,226 representing the subsidy for 2021 indirect emission
cost. The subsidy related to 2022 indirect emission costs in the amount of RON 64,173,308 has been recorded under Water
and energy expenses in the Consolidated Statement of Profit or loss and other comprehensive income. The aid scheme was
approved by the Government in October 2022 therefore, the entries were performed by the Group in 2022 when was
certain that the aid is granted by the Government.
cost. The subsidy related to 2022 indirect emission costs in the amount of RON 64,173,308 has been recorded under Water
and energy expenses in the Consolidated Statement of Profit or loss and other comprehensive income. The aid scheme was
approved by the Government in October 2022 therefore, the entries were performed by the Group in 2022 when was
certain that the aid is granted by the Government.
12.
OTHER EXPENSES
Year ended
December 31,
December 31,
2022
Year ended
December 31,
December 31,
2021
Penalty expenses*
19,758,878
21,636,468
Sponsorship granted
14,248,728
14,065,513
Other taxes, duties and similar expenses
5,753,272
5,353,835
Insurance premiums
2,579,799
4,763,729
Royalties and rental expenses
4,152,564
1,750,655
Other operating expenses
5,820,081
1,709,884
Entertaining, promotion and advertising
1,641,212
1,584,379
Travel and accommodation expenses
1,373,721
618,551
Compensations, fines and penalties
1,397,092
610,306
Transportation expenses
440,178
480,954
Post and telecommunication expenses
275,645
269,930
Materials not stored
95,502
77,963
Total
57,536,672
52,922,167
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022
(all amounts are expressed in RON, unless specified otherwise)
12.OTHER EXPENSES (continued)
*The penalty expenses for the year 2022 in amount of RON 19,758,878 (December 31, 2021: RON 21,636,468) represent
penalties for exceeding the maximum admissible concentration of chemical indicators in wastewater, paid to Romanian
Waters and varies depending on propylene production level.
penalties for exceeding the maximum admissible concentration of chemical indicators in wastewater, paid to Romanian
Waters and varies depending on propylene production level.
13.
FINANCE COSTS
Year ended
December 31,
December 31,
2022
Year ended
December 31,
December 31,
2021
Commissions and fees paid
277,898
13,399,271
Warrant expenses
–
14,210,214
Interest expense
20,123,112
66,952,514
Effects of foreign exchange rate changes on the balance of loans held in
foreign currencies
foreign currencies
1,215,678
9,134,797
Total
21,615,668
103,696,796
14.
INCOME TAX EXPENSE
Year ended
December 31,
December 31,
2022
Year ended
December 31,
December 31,
2021
Current income tax expense
56,681,502
70,655,027
Deferred tax (gain) / expense
(10,013,865)
(9,936,704)
Income tax expense/(revenue)
46,667,637
60,718,323
Accounting profit before tax
318,281,621
449,372,792
Income tax expense/(gain) calculated at 16%
59,925,059
71,899,647
Sponsorship
(377,880)
(410,512)
Effect of non-taxable income
–
–
Effect of reinvested profit*
(463,253)
(752,542)
Effect of non-deductible expenses
5,008,456
3,694,909
Effect of bonification
–
–
Effect of other permanent differences
(4,480,135)
178,503
Effect of other fiscal facilities
(9,868,076)
(9,547,194)
Legal reserve
(3,076,534)
(4,344,488)
Income tax expense/(gain) for the year
46,667,637
60,718,323
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022
(all amounts are expressed in RON, unless specified otherwise)
14.
INCOME TAX EXPENSE (continued)
INCOME TAX EXPENSE (continued)
Components of deferred tax liability:
Cumulative
temporary
differences
temporary
differences
2022
Deferred tax
(asset) / liability
2022
Cumulative
temporary
differences
temporary
differences
2021
Deferred tax
(asset) / liability
2021
Provisions and retirement benefit obligation
34,683,970
5,549,435
52,503,344
8,400,535
Property, plant and equipment
(807,962,043)
(129,273,927)
(894,496,814)
(143,119,490)
Other intangible assets
(121,473,111)
(19,435,698)
(125,641,276)
(20,102,604)
Right of use and lease liability
762,731
122,037
813,017
130,083
Impairment allowances for financial investments
27,991,559
4,478,649
36,646,908
5,863,505
Impairment allowances for inventories
5,597,608
895,617
1,940,689
310,510
Impairment allowances for trade and other receivables
2,991,558
478,649
8,142,409
1,302,785
Loans
–
–
–
–
Loans interest deductible in the next years
–
–
–
–
Trade and other payables
6,552,185
1,043,550
6,619,528
1,059,126
TOTAL
(850,855,542)
(136,141,686)
(913,472,195)
(146,155,550)
Impact in the income statement
(10,013,865)
(9,936,704)
Impact in other comprehensive income
–
69,965,234
Variation in deferred tax liability
(10,013,865)
60,028,530
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022
(all amounts are expressed in RON, unless specified otherwise)
15.
PROPERTY, PLANT AND EQUIPMENT
Land
Buildings and
other
constructions
other
constructions
Plant,
machinery and
equipment
machinery and
equipment
Furniture and
fittings
fittings
Assets in
progress
progress
Decommissionin
g provision
g provision
Advance
payments non-
current assets
payments non-
current assets
Total
COST
At January 1, 2021
103,628,985
419,129,181
1,079,805,013
5,195,100
79,445,886
6,634,752
2,724,604
1,696,563,519
Increase, out of which:
20,516,255
275,238,397
314,150,214
595,534
50,323,608
–
24,992,841
685,816,849
Increase from revaluation
19,500,287
273,457,209
299,580,362
439,402
–
–
–
592,977,261
Transfers
–
1,781,189
7,109,332
156,132
5,806,081
–
–
14,852,733
Decrease, out of which:
9,992,004
7,250,937
104,251,077
315,684
9,450,203
–
5,806,081
137,065,986
Decrease from revaluation
9,992,004
7,187,457
101,046,854
301,604
–
–
–
118,527,919
Transfers
–
–
–
–
9,046,653
–
5,806,081
14,852,734
Cancelation of accumulated
amortization
amortization
–
79,358,094
224,198,979
902,760
–
–
–
304,459,834
At December 31, 2021
114,153,236
607,758,547
1,065,505,171
4,572,190
120,319,290
6,634,752
21,911,365
1,940,854,548
Increase, out of which:
5,528,249
20,122,563
53,274,640
1,156,562
207,709,525
–
27,915,580
315,707,119
Additions
5,528,249
–
13,351,898
–
192,301,663
–
27,915,580
239,097,393
Transfers
–
15,485,363
29,621,855
1,143,685
15,373,250
–
–
61,624,153
Acquisition of subsidiary
–
–
10,300,887
12,875
34,611
–
–
10,348,373
Transfers from investment
property
property
–
4,637,200
–
–
–
–
–
4,637,200
Decrease, out of which:
–
588,062
6,368,292
56,711
47,148,433
–
15,373,250
69,534,748
Transfers
–
–
–
–
46,250,904
–
15,373,250
61,624,154
At December 31, 2022
119,681,485
627,293,048
1,112,411,518
5,672,039
280,880,381
6,634,752
34,453,694
2,187,026,919
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022
(all amounts are expressed in RON, unless specified otherwise)
15.
PROPERTY, PLANT AND EQUIPMENT (continued)
PROPERTY, PLANT AND EQUIPMENT (continued)
Land
Buildings and
other
constructions
other
constructions
Plant,
machinery and
equipment
machinery and
equipment
Furniture and
fittings
fittings
Assets in
progress
progress
Decommissionin
g provision
g provision
Advance
payments non-
current assets
payments non-
current assets
Total
ACCUMULATED
DEPRECIATION
DEPRECIATION
At January 1, 2021
–
54,887,360
152,125,668
605,311
–
5,309,933
–
212,928,272
Additions
–
24,534,214
73,365,979
312,558
–
949,344
–
99,162,095
Disposals out of which
–
79,421,574
225,491,647
917,869
–
–
–
305,831,090
Cancelation of accumulated
depreciation
depreciation
–
79,358,094
224,198,979
902,760
–
–
–
304,459,834
At December 31, 2021
–
–
–
–
–
6,259,277
–
6,259,277
Additions
–
31,072,360
107,141,581
496,989
–
112,641
–
138,823,571
Acquisition of subsidiary
–
–
1,260,915
12,875
–
–
–
1,273,790
Disposals out of which
–
7,186
2,650,954
–
–
–
–
2,658,140
Cancelation of accumulated
depreciation
depreciation
–
–
–
–
–
–
–
–
At December 31, 2022
–
31,065,174
105,751,541
509,864
–
6,371,918
–
143,698,497
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022
(all amounts are expressed in RON, unless specified otherwise)
15. PROPERTY, PLANT AND EQUIPMENT (continued)
Land
Buildings and
other
constructions
other
constructions
Plant,
machinery and
equipment
machinery and
equipment
Furniture and
fittings
fittings
Assets in
progress
progress
Decommissionin
g provision
g provision
Advance
payments non-
current assets
payments non-
current assets
Total
IMPAIRMENT ALLOWANCE
At January 1, 2021
–
65,013,055
67,578,624
253,910
3,235,865
–
–
136,081,454
Increase
–
138,254,841
45,058,291
140,531
–
–
–
183,453,663
Out of which, recognized
in other comprehensive
income
in other comprehensive
income
–
134,609,097
36,873,208
32,669
–
–
–
171,514,974
Decrease
64,872,653
67,548,605
290,125
–
–
–
132,711,383
Out of which, recognized
in other comprehensive
income
in other comprehensive
income
–
57,510,008
28,119,738
–
–
–
–
85,629,746
At December 31, 2021
–
138,395,243
45,088,310
104,316
3,235,865
–
–
186,823,734
Increase
–
–
–
–
–
–
–
–
Decrease
–
56,335
3,357,826
117
–
–
–
3,414,278
At December 31, 2022
–
138,338,908
41,730,484
104,199
3,235,865
–
–
183,409,456
NET BOOK VALUE
At December 31, 2021
114,153,236
469,363,304
1,020,416,860
4,467,874
117,083,425
375,471
21,911,230
1,747,771,404
At December 31, 2022
119,681,485
457,888,966
964,929,493
5,057,977
277,644,516
262,834
34,453,694
1,859,918,966
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022
(all amounts are expressed in RON, unless specified otherwise)
15. PROPERTY, PLANT AND EQUIPMENT (continued)
Measurement of fair value
The Company’s land, buildings and equipment are stated at their revalued amounts, being the fair value at the date of
revaluation, less any subsequent accumulated depreciation and subsequent accumulated impairment losses.
revaluation, less any subsequent accumulated depreciation and subsequent accumulated impairment losses.
The fair value measurements of the Group’s tangible assets as at 31 December 2021 were performed by Darian DRS S.A. an
independent valuer. Darian DRS S.A. is member of the National Association of Authorised Romanian Valuers, and has
appropriate qualifications and recent experience in the fair value measurement of properties in the relevant locations. The
valuation conforms to International Valuation Standards and was based on recent market transactions on arm’s length
terms for similar properties, whenever possible and discounted cash-flows method.
independent valuer. Darian DRS S.A. is member of the National Association of Authorised Romanian Valuers, and has
appropriate qualifications and recent experience in the fair value measurement of properties in the relevant locations. The
valuation conforms to International Valuation Standards and was based on recent market transactions on arm’s length
terms for similar properties, whenever possible and discounted cash-flows method.
The Group considers that there is no material change in the fair value of the property, plant and equipment as of 31
December 2022 compared with the last revaluation.
December 2022 compared with the last revaluation.
Property, plant and equipment located on Onesti industrial platform has been mortgaged for bank loans (please see note
23.a). The term loans from CEC Bank and Alpha Bank are jointly secured with mortgage on property, plant and equipment
located on the industrial platform from Onesti and assignment of the insurance policy.
23.a). The term loans from CEC Bank and Alpha Bank are jointly secured with mortgage on property, plant and equipment
located on the industrial platform from Onesti and assignment of the insurance policy.
The Group has developed internally fixed assets in amount of RON 23,221,751 for 2022 and RON 16,188,982 for 2021. These
are included under cost of buildings and other constructions.
are included under cost of buildings and other constructions.
Had the Group’s freehold land, buildings and equipment been measured on a historical cost basis, their carrying amount
would have been as follows:
would have been as follows:
December 31,
2022
2022
December 31,
2021
2021
January 1,
2021
2021
Freehold land
88,274,785
38,723,277
37,676,622
Buildings
269,622,589
171,943,567
167,724,112
Equipment and others
776,096,676
526,689,544
507,378,062
Total
1,133,994,050
737,356,388
712,778,796
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022
(all amounts are expressed in RON, unless specified otherwise)
16.
INTANGIBLE ASSETS
Concessions,
patents, licenses,
trademarks and
similar rights and
assets
patents, licenses,
trademarks and
similar rights and
assets
Other intangible
assets
assets
Total
COST
At January 1, 2021
149,825,054
1,365,815
151,190,868
Additions
247,855
10,049
257,904
Disposals
247,663
574,928
822,591
At December 31, 2021
149,825,246
800,936
150,626,181
Additions
203,061
24,198
227,259
Acquisition of subsidiary
–
19,597
19,597
Disposals
247,855
–
247,855
At December 31, 2022
149,780,452
844,731
150,625,183
ACCUMULATED AMORTIZATION
At January 1, 2021
17,789,872
376,020
18,165,893
Amortization expense
6,455,408
206,331
6,661,739
Eliminated on disposals of assets
247,663
574,928
822,591
At December 31, 2021
23,997,617
7,422
24,005,039
Amortization expense
4,433,275
17,144
4,450,419
Acquisition of subsidiary
–
7,333
7,333
Eliminated on disposals of assets
247,855
9,619