PannErgy : Annual Report 1

PannErgy Plc. and its Subsidiaries Consolidated Financial Statements and Annual Report prepared in accordance with the IFRS standards 2023

Including the Independent Auditor's Report

THIS ANNOUNCEMENT IS PUBLISHED IN HUNGARIAN (MANDATORY, OFFICIAL) AND ENGLISH LANGUAGES. IN CASE OF ANY CONTRADICTION BETWEEN THESE TWO VERSIONS, THE OFFICIAL HUNGARIAN VERSION SHALL PREVAIL.

The attached pdf report is not the official report of the Company; the official report will be drawn up and published in ZIP (specifically XHTML-XBRL)format as required by applicable legislation. The contents of the attached pdf report are fully identical with those of the report published in ZIP (specifically XHTML-XBRL)format.

2023	PannErgy Plc.

Consolidated financial statements 31/12/2023

TABLE OF CONTENTS

1. Consolidated Financial Statements compiled in accordance with

	the International Financial Reporting Standards	3
	Consolidated statement of financial position	4
	Consolidated statement of profit or loss	5
	Consolidated statement of other comprehensive income	6
	Consolidated statement of changes in equity	7
	Consolidated statement of cash flows	8
	Notes to the consolidated financial statements compiled in
	conformity with the International Financial Reporting Standards	9
II.	Business and management report of the PannErgy Group	104

1. Statement of the Company under Sections 2.4. and 3.4 of Annex 1

to Decree No. 24/2008 (VIII. 15.) of the Ministry of Finance

138

PannErgy Plc. H-1112 Budapest, Boldizsár u. 2.; ° [phone]° fax: [phone]	2
The notes form an integral part of the consolidated financial statements.

2023	PannErgy Plc.

Consolidated financial statements 31/12/2023

Budapest, 27 March 2024

PannErgy Plc. and its Subsidiaries

Consolidated financial statements compiled in conformity with the IFRS standards

31 December 2023

THIS ANNOUNCEMENT IS PUBLISHED IN HUNGARIAN (MANDATORY, OFFICIAL) AND ENGLISH LANGUAGES. IN CASE OF ANY CONTRADICTION BETWEEN THESE TWO VERSIONS, THE OFFICIAL HUNGARIAN VERSION SHALL PREVAIL.

The attached pdf report is not the official report of the Company; the official report will be drawn up and published in ZIP (specifically XHTML-XBRL) format as required by applicable legislation. The contents of the attached pdf report are fully identical with those of the report published in ZIP (specifically XHTML-XBRL) format.

PannErgy Plc. H-1112 Budapest, Boldizsár u. 2.; ° [phone]° fax: [phone]	3
The notes form an integral part of the consolidated financial statements.

2023	PannErgy Plc.

Consolidated financial statements 31/12/2023

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

			Note no.			31 December 2023		31 December
						2022
						HUF Mn	HUF Mn
Goodwill	15	678		678
Other intangible assets	15	1,661		1,724
Tangible assets	16	19,528		20,053
Investment properties	16	89		101
Marketable properties	16	-		-
Other invested financial assets	17	-		-
Financial assets (concession assets)	18, 44	-		-
Receivables from deferred taxes	33	120		139
Long-term receivables	19	-		-
Total fixed assets				22,076		22,695
Inventories	21	30		25
Trade receivables	22	2,058		2,260
Other receivables	23	290		1,305
Prepaid income taxes	33	-		-
Securities	24	284		417
Liquid assets	35	1,514		629
Total current assets				4,176		4,636
TOTAL ASSETS					26,252		27,331

Subscribed capital

Reserves without comprehensive income for the reporting year

Net P/L of the reporting year

Reserve for repurchased treasury shares Minority shareholdings

Total shareholders' equity

Long-term loans, leases

Other long-term deferred incomes

Provisions

Total long-term liabilities Trade payables Short-termcredits

Short-term part of long-term credits

Short term part of other long-term deferred incomes

Other short-term liabilities

Total short-term liabilities

TOTAL LIABILITIES AND EQUITY

25

27

34

26

28

29

29.4

31

36

30

30

30.1

32

400	400
15,222	14,139
1,716	1,310
-5,880	-5,315
-	-
11,458	10,534
8,163	9,086
3,187	3,439
336	144
11,686	12,669
804	779
9	1,169
1,359	1,308
275	275
661	597
3,108	4,128
26,252	27,331

PannErgy Plc. H-1112 Budapest, Boldizsár u. 2.; ° [phone]° fax: [phone]	4
The notes form an integral part of the consolidated financial statements.

2023	PannErgy Plc.

Consolidated financial statements 31/12/2023

CONSOLIDATED STATEMENT OF PROFIT OR LOSS

Revenue from sales

Direct cost of sales

Gross margin Gross profit ratio %

Gross cash flow

Gross cash flow rate %

Indirect costs of sales Other revenues

Other expenditures

Operating profit Operating profit ratio %

EBITDA

EBITDA rate %

Financial profit

Profit before taxes

Income tax

Net profit for the year

Note no.

6

8

7

11

10

12-13

33

2023	2022
HUF Mn		HUF Mn
9,668	7,145
-6,625	-5,047
3,043	2,098
31%	29%
4,883	3,813
51%	53%
-688	-582
320	748
-597	-368
2,078	1,896
21%	27%
3,930	3,612
41%	51%
-241	-480
1,837	1,416
-121	-106
1,716	1,310

Profit/loss, attributable to Shareholders of the Company		1,716	1,310
Share of non-controlling interests in net profit for the year	28	-	-
Earnings per ordinary share - Basic (HUF)		112	82
Earnings per ordinary share - Diluted (HUF)		112	82

PannErgy Plc. H-1112 Budapest, Boldizsár u. 2.; ° [phone]° fax: [phone]	5
The notes form an integral part of the consolidated financial statements.

2023	PannErgy Plc.

Consolidated financial statements 31/12/2023

CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE INCOME

	2023	2022
	HUF Mn	HUF Mn
Net profit for the year	1,716	1,310
Other comprehensive income
Other comprehensive income in the period with tax implications	-	-
Total comprehensive income for the year / attributable to	1,716	1,310
Shareholders of the Company	1,716	1,310
Share of minority (external) shareholders in total other comprehensive income	-	-

PannErgy Plc. H-1112 Budapest, Boldizsár u. 2.; ° [phone]° fax: [phone]	6
The notes form an integral part of the consolidated financial statements.

2023	PannErgy Plc.

Consolidated financial statements 31/12/2023

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

Description

Balance as at 31 December 2021

P/L for 2022

Changes in the participation of

external members Difference arising from

consolidation or transformation

							Participation
	Subscribed				Repurchased
		Reserves			of external		Equity
	capital			treasury share
					members
	421		14,404	-4,845		-		9,980
	-		1,310	-		-		1,310
	-		-	-		-		-
	-		-3	-		-		-3

Share option programme

Repurchased treasury shares

Decrease in treasury shares

Distribution of dividends

Changes in the Accounting Policy

Balance as at 31 December 2022

P/L for 2023

Changes in the participation of

external members Difference arising from

consolidation or transformation

-	-	-	-	-
-	1,055	-1,514	-	-459
-21	-1,023	1,044	-	-
-	-294	-	-	-294
-	-	-	-	-
400	15,449	-5,315	-	10,534
-	1,716	-	-	1,716
-	-	-	-	-
-	17	-	-	17

Share option programme	-	-	-	-	-
Repurchased treasury shares	-	-	-809	-	-809
Decrease in treasury shares	-	-244	244	-	-
Distribution of dividends	-	-	-	-	-
Changes in the Accounting Policy	-	-	-	-	-
Balance as at 31 December 2023	400	16,938	-5,880	-	11,458

PannErgy Plc. H-1112 Budapest, Boldizsár u. 2.; ° [phone]° fax: [phone]	7
The notes form an integral part of the consolidated financial statements.

2023	PannErgy Plc.

Consolidated financial statements 31/12/2023

CONSOLIDATED STATEMENT OF CASH FLOWS

				Note			2023		2022
				no.
	Liquid assets from operations						HUF M		HUF M
						n		n
	Profit before taxes						1,837	1,416
	Adjustments in relation to the profit before taxes and the cash flow of
	business operations	15-16.		1,845	1,716
	Amortisation and depreciation of tangible and intangible assets
	Effect of deferred taxes	33			19	44
	Income tax expenditures	33			-121	-106
	Exchange gain/loss on credits	14			-116	37
	Impairment of tangible assets, goodwill	10,16			6	-
	Impairment losses and shortage of inventories	10,21			-	-
	Impairment losses of receivables	10,39			-	1
	Change in provisions in the reporting year	31			192	144
	Changes in the fair value of properties	11,16			-	-
	Profit on the sales of tangible assets	11			-	-
	Changes in minority participations	28			-	-
	Changes in working capital elements
	Increase/decrease in inventories	21			-5	-18
	Income taxes paid	23			-	-
	Increase/decrease in receivables	22,23			1,217	-1,447
	Increase/decrease in payables	32,36			89	58
	Increase/decrease in prepaid income taxes	23			-	23
	Net liquid assets originating/used from operations						4,963	1,868
	Liquid assets from investments
	Acquisition of investments in private companies	16			-	-
	Increase/decrease in existing investments	16			-	-
	Acquisition of tangible and intangible assets	15-16			-1,251	-1,715
	Change in financial assets (concession assets)	18			-	-
	Sales of tangible and intangible assets	15-16			-	90
	Change in long-term and short-term deferred income	29.4			-252	-275
	Changes in long-term receivables	19			-	-
	Liquid assets from investment operations						-1,503	-2,106
	Financial operations
	Increase/decrease in long-term loans	14,29			-807	-952
	Increase/decrease in short-term loans	30			-1,109	880
	Difference from consolidation and changes in other reserves	27			17	-3
	Purchase of treasury shares	26			-809	-459
	Distribution of dividends	27			-	-294
	Increase/decrease in securities	24			133	213
	Liquid assets used for financial operations						-2,575	-615
	Net increase/decrease in cash and cash equivalents						885	-647
	Cash and cash equivalents as at 1 January						629	1,276
	Cash and cash equivalents as at 31 December						1,514	629

PannErgy Plc. H-1112 Budapest, Boldizsár u. 2.; ° [phone]° fax: [phone]	8
The notes form an integral part of the consolidated financial statements.

2023	PannErgy Plc.

Consolidated financial statements 31/12/2023

Table of contents

1. GENERAL BACKGROUND AND DESCRIPTION OF ACTIVITIES	13
2. BASIS OF THE COMPILATION OF THE FINANCIAL STATEMENTS	13
3. INFORMATION ON THE PREPARATION OF THE ESEF REPORT	14
4. SUMMARY OF THE KEY ELEMENTS OF THE ACCOUNTING POLICIES	15
General description	15
Basis of consolidation	15
Effects of the amended rules of the IFRS standards to be implemented on 1 January 2023
and of the introduction of new standards on the financial statements	16
Functional currency, presentation currency (SIGNIFICANT POLICY)	17
Translation of foreign currencies, foreign exchange transactions and balances (SIGNIFICAN
POLICY)	17
Fair value measurement (SIGNIFICANT POLICY)	18
Intangible assets (SIGNIFICANT POLICY)	18
Impairment of non-financial assets (IAS 36) (SIGNIFICANT POLICY)	19
Recognition of Research and Development	20
Property, plant and equipment (SIGNIFICANT POLICY)	21
Investments	25
Goodwill (SIGNIFICANT POLICY)	25
Accounting Policy change - Financial assets related to concession agreements (IFRIC 12)
(SIGNIFICANT POLICY)	26
Inventories	29
Financial instruments (SIGNIFICANT POLICY)	29
Cash and cash equivalents (SIGNIFICANT POLICY)	35
Equity, subscribed capital (SIGNIFICANT POLICY)	35
Repurchased treasury share (SIGNIFICANT POLICY)	36
Earnings per share (SIGNIFICANT POLICY)	37
Current and deferred income tax (SIGNIFICANT POLICY)	37
Provisioning (SIGNIFICANT POLICY)	39
Share option programme, share-based payments	40
Accounting for revenue from sales (SIGNIFICANT POLICY)	41
Interest income and dividend income	43
Leases (SIGNIFICANT POLICY)	43
Dividend payment (SIGNIFICANT POLICY)	44
State aid, recognition of related deferred income (SIGNIFICANT POLICY)	44
Comparative information across periods (SIGNIFICANT POLICY)	44
Segment reporting (SIGNIFICANT POLICY)	45
Gross cash flow and EBITDA definition (SIGNIFICANT POLICY)	47

5. MATERIAL/CRITICAL ACCOUNTING ASSUMPTIONS AND ESTIMATES IN THE APPLICATION OF THE ACCOUNTING POLICY

(SIGNIFICANT POLICY)	48
Events after the end of the reporting period	48
Material error	48
Critical accounting estimates and assumptions	48
6. REVENUE FROM SALES	50
Breakdown of sales revenues by core activity	50
Breakdown of sales revenues by geographical location	50
Breakdown of sales revenues by activity or service	50
Breakdown of fixed assets related to sales revenues by geographical segment	51
Concentration of sales revenue, information regarding key customers	51

PannErgy Plc. H-1112 Budapest, Boldizsár u. 2.; ° [phone]° fax: [phone]	9
The notes form an integral part of the consolidated financial statements.

2023	PannErgy Plc.

Consolidated financial statements 31/12/2023

7.	INDIRECT COSTS OF SALES	52
8.	DIRECT COSTS OF SALES	53
9.	HEADCOUNT AND WAGE COSTS	54
10.	OTHER EXPENDITURES	55
11.	OTHER INCOMES	56
12.	FINANCIAL INCOMES	56
13.	FINANCIAL EXPENDITURES	57
14.	OTHER INFORMATION RELATING TO FINANCIAL TRANSACTIONS	58
15.	INTANGIBLE ASSETS	59
16.	TANGIBLE ASSETS	61
	Year-end measurement of high-value tangible assets	63
17.	OTHER INVESTED FINANCIAL ASSETS	64
18.	FINANCIAL ASSETS (CONCESSION ASSETS)	64
19.	LONG-TERM RECEIVABLES	65
20.	LEASE RECEIVABLES	65
21.	INVENTORIES	65
22.	TRADE RECEIVABLES	66
23.	OTHER RECEIVABLES	66
24.	SECURITIES HELD FOR SALE	67
25.	SUBSCRIBED CAPITAL	67
26.	REPURCHASED TREASURY SHARE	68
27.	RESERVES	68
28.	MINORITY INTERESTS	69
29.	LONG-TERM LIABILITIES	69
	Weighted average interest rate on long-term loans	70
	Maturity dates of long-term loans	70
	Lease liabilities recorded among long-term liabilities	70
	Other long-term deferred incomes	70
	Details of aids relating to deferred revenues	71
30.	SHORT-TERM CREDITS	72
	Short-term part of other long-term deferred incomes	72
31.	PROVISIONS	72
32.	OTHER SHORT-TERM LIABILITIES	73
33.	TAXATION, INCOME TAX	74
	Income tax payable for the reporting year	74
	Receivables from deferred taxes	74
	Calculation of the effective income tax	75
34.	EARNINGS PER SHARE	76
35.	CASH AND CASH EQUIVALENTS	76
36.	TRADE PAYABLES	77
37.	FINANCIAL INSTRUMENTS	77
38.	SHARE-BASED BENEFITS	78
39.	IMPAIRMENTS	79
40.	OFF-BALANCE SHEET LIABILITIES AND COMMITMENTS	80
	Contractual obligations and commitments for investment	80
	Other contingent liabilities	81
41.	FINANCIAL RISK MANAGEMENT	83
	Financial risk factors	83
	Market risk	83
	Lending risk	85
	Liquidity risk	86
	Capital management	87
	Offsetting of financial assets and financial liabilities	88
	Regulatory risk	88
	Technological risk	88

PannErgy Plc. H-1112 Budapest, Boldizsár u. 2.; ° [phone]° fax: [phone]	10
The notes form an integral part of the consolidated financial statements.