Maurel : Consolidated financial statements as of December 31, 2023

FINANCIAL

STATEMENTS

• Group consolidated financial statements as at 31 December 2023 *

1. Statement of financial position
2. Consolidated statement of profit & loss and other comprehensive income
3. Changes in shareholders' equity
4. Consolidated statement of cash flow
5. Notes to the consolidated financial statements

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3

4

5

6

• Audited accounts and reports currently being issued

MAUREL & PROM • 2023 FINANCIAL STATEMENTS

1

FINANCIAL STATEMENTS

Group consolidated financial statements as at 31 December 2023

• GROUP CONSOLIDATED FINANCIAL STATEMENTS AS AT 31 DECEMBER 2023

1.1 Statement of financial position

Assets

(in US$ thousands)	Notes	31/12/2023	31/12/2022
Intangible assets (net)	3.3	177,516	189,591
Property, plant and equipment (net)	3.3	869,403	818,520
Right-of-use assets	6.5	6,785	7,758
Equity associates	2.4	212,387	286,229
Non-current financial assets (net)	4.2	190,993	6,051
NON-CURRENT ASSETS		1,457,083	1,308,149
Inventories (net)	3.4	11,145	13,526
Underlift positions receivables	3.5	27,010	60,666
Trade receivables and related accounts (net)	3.6	98,700	40,021
Current tax receivables	6.1	122	61
Other current assets	3.7	56,714	29,564
Other current financial assets	4.2	114,068	87,676
Cash and cash equivalents	4.3	97,313	137,825
Current derivative financial assets	4.4	-	176
CURRENT ASSETS		405,071	369,515
TOTAL ASSETS		1,862,154	1,677,664

Liabilities

(in US$ thousands)	Notes	31/12/2023	31/12/2022
Share capital		193,831	193,831
Additional paid-in capital		26,559	29,567
Consolidated reserves(*)		588,386	428,297
Net income, Group share		210,195	204,817
EQUITY, GROUP SHARE		1,018,971	856,512
Non-controlling interests		35,259	13,954
TOTAL EQUITY		1,054,231	870,465
Deferred tax liabilities	6.1	224,512	163,805
Non-current provisions	3.1	95,594	83,499
Other non-current borrowings and financial debt	4.4	99,861	137,007
Non-current Shareholder loans	4.4	56,427	71,254
Non-current lease liabilities	4.4	6,527	7,048
NON-CURRENT LIABILITIES		482,920	462,613
Current provisions	3.1	15,492	18,788
Other current borrowings and financial debt	4.4	46,606	114,947
Current Shareholder loans	4.4	16,173	11,121
Current lease liabilities	4.4	1,197	1,843
Overlift position liability	3.5	16,729	5,030
Trade payables and related accounts	3.8	75,598	68,842
Current tax liabilities	6.1	13,009	12,186
Other current liabilities	3.9	140,200	111,829
CURRENT LIABILITIES		325,003	344,585
TOTAL LIABILITIES		1,862,154	1,677,664

(*) Treasures shares included

2	MAUREL & PROM • 2023 FINANCIAL STATEMENTS

FINANCIAL STATEMENTS

Group consolidated financial statements as at 31 December 2023

1.2 Consolidated statement of profit & loss and other comprehensive income

Net income for the period

(in US$ thousands)	Notes	31/12/2023	31/12/2022
Sales		682,150	676,480
Change in overlift/underlift position		(45,355)	12,902
Trading of third-party oil		(26,390)	-
Other operating expenses		(251,647)	(246,173)
EBITDA	3.2	358,758	443,209
Depreciation and amortisation & provisions related to production
activities net of reversals		(102,565)	(83,730)
Depreciation and amortisation & provisions related to drilling
activities net of reversals		(2,969)	(1,637)
Current operating income		253,225	357,841
Expenses and impairment of exploration assets net of reversals		(14,686)	(1,214)
Other non-current income and expenses		(45,667)	(3,008)
Income from asset disposals		(91)	(1,305)
OPERATING INCOME	3.2	192,780	352,314
• Cost of gross debt		(23,007)	(18,970)
• Income from cash		3,438	261

• Income and expenses related to interest-rate derivative financial

instruments		(168)	(1,040)
Cost of net financial debt		(19,737)	(19,749)
Net foreign exchange adjustment		2,724	(2,076)
Other financial income and expenses		(2,781)	(1,539)
FINANCIAL INCOME	4.1	(19,794)	(23,364)
Income tax	6.1	(131,209)	(145,465)
Net income from consolidated companies		41,777	183,485
Share of income/loss of associates	2.4	200,309	22,404
CONSOLIDATED NET INCOME		242,087	205,889
o/w: - Net income, Group share		210,195	204,817
- Non-controlling interests		31,891	1,073
EARNINGS PER SHARE (US$)
Basic		1.06	1.03
Diluted		1.05	1.03

Other comprehensive income for the period

(in US$ thousands)	31/12/2023	31/12/2022
Net income for the period	242,087	205,889
Foreign exchange adjustment for the financial statements of foreign entities	(4,759)	374
Change in fair value of hedging Investments instruments	(176)	973
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD	237,152	207,237
•	Group share	206,232	207,150
•	Non-controlling interests	30,920	87

MAUREL & PROM • 2023 FINANCIAL STATEMENTS

3

FINANCIAL STATEMENTS

Group consolidated financial statements as at 31 December 2023

1.3 Changes in shareholders' equity

		Additional		Currency		Equity,	Non-
		paid-in	Other	translation	Income for	Group	controlling	Total
(in US$ thousands)	Capital	capital	reserves	adjustment	the period	share	interests	equity
JANUARY 1, 2023	193,831	29,567	343,362	(11,333)	119,733	675,159	13,867	689,026
Net income			-		204,817	204,817	1,073	205,889
Fair value of hedging
instruments			973			973		973
Other comprehensive
income			(36)	1,396		1,360	(986)	374
TOTAL
COMPREHENSIVE
INCOME	-	-	937	1,396	204,817	207,150	87	207,237
Appropriation of
income - dividends			90,558		(119,733)	(29,174)	-	(29,174)
Bonus shares			1,435			1,435		1,435
Changes in treasury
shares		-	1,942			1,942		1,942
TOTAL
TRANSACTIONS
WITH
SHAREHOLDERS	-	-	93,935	-	(119,733)	(25,798)	-	(25,798)
JANUARY 1, 2023	193,831	29,567	438,234	(9,937)	204,817	856,511	13,954	870,465
Net income			-		210,195	210,195	31,891	242,087
Fair value of hedging
instruments			(176)			(176)		(176)
Other comprehensive
income			23	(3,811)		(3,788)	(971)	(4,759)
TOTAL
COMPREHENSIVE
INCOME	-	-	(152)	(3,811)	210,195	206,232	30,920	237,152
Appropriation of
income - dividends			155,495		(204,817)	(49,321)	-	(49,321)
Change in CMBL
scope -
reclassification of
minority reserves			9,614			9,614	(9,614)	-
Bonus shares			520			520		520
Changes in treasury
shares		(3,008)	(1,577)			(4,584)		(4,584)
TOTAL
TRANSACTIONS
WITH
SHAREHOLDERS	-	(3,008)	164,052	-	(204,817)	(43,772)	(9,614)	(53,386)
DECEMBER 31, 2023	193,831	26,559	602,134	(13,748)	210,195	1,018,971	35,260	1,054,231

4	MAUREL & PROM • 2023 FINANCIAL STATEMENTS

FINANCIAL STATEMENTS

Group consolidated financial statements as at 31 December 2023

1.4 Consolidated statement of cash flow

(in US$ thousands)	Notes	31/12/2023	31/12/2022
Net income		242,087	205,889
Tax expense for continuing operations		131,209	145,465
Consolidated income before tax		373,296	351,354
Net increase (reversals) of amortisation, depreciation	3.3 & 3.4 & 3.6 &
and provisions	3.10	125,869	82,699
Exploration expenses	3.3	14,686	1,214
Share of income from equity associates	2.4	(200,309)	(22,404)
Other income and expenses calculated on bonus shares		520	1,435
Gains (losses) on asset disposals		91	1,305
Other financial items		19,794	28,323
CASH FLOW BEFORE TAX		333,946	443,926
Income tax paid		(73,059)	(112,497)
Inventories	3.4	1,842	(1,103)
Trade receivables	3.6	(67,402)	(15,974)
Trade payables	3.8	3,993	17,643
Overlift/underlift position	3.5	45,355	(12,902)
Other receivables	3.7 & 4.2	(2,450)	65,353
Other payables	3.9	28,110	(18,551)
Change in working capital requirements for operations		9,449	34,466
NET CASH FLOW FROM OPERATING ACTIVITIES		270,335	365,895
Proceeds from disposals of property, plant and equipment
and intangible assets		-	103
Disbursements for acquisitions of property, plant and equipment
and intangible assets	3.3	(145,756)	(102,512)
Dividends received from equity associates	2.4	19,866	12,040
Change in deposits	4.2	57,707	(77,575)
Change in scope ( Wentworth Ressources Plc acquisition)		(45,319)	-
NET CASH FLOW FROM INVESTMENT ACTIVITIES		(113,502)	(167,944)
Treasury share acquisitions/sales		(4,584)	(1,905)
Dividends paid out		(49,321)	(29,174)
Loan repayments	4.4	(121,288)	(456,250)
Proceeds from new loans	4.4	(5,120)	250,675
Additional paid-in capital on hedging instruments		-	(330)
Interest paid on financing	4.4	(18,082)	(18,676)
Interest received on investment	4.1	3,236	264
NET CASH FLOW FROM FINANCING ACTIVITIES		(195,160)	(255,396)
Impact of exchange rate fluctuations		(2,185)	(405)
CHANGE IN CASH POSITION(*)		(40,512)	(57,850)
CASH(*) AT BEGINNING OF PERIOD		137,825	195,675
CASH(*) AT END OF PERIOD		97,313	137,825

(*) Banks overdrafts are included in cash.

MAUREL & PROM • 2023 FINANCIAL STATEMENTS

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FINANCIAL STATEMENTS

Group consolidated financial statements as at 31 December 2023

1.5 Notes to the consolidated financial statements

NOTE 1	GENERAL INFORMATION	7	NOTE 4
	Note 1.1	Key events	7
	Note 1.2	Basis for preparation	8
NOTE 2	SCOPE OF CONSOLIDATION	9
	Note 2.1	Consolidation methods	9
	Note 2.2	Information on the scope		NOTE 5
		of consolidation and non-
		consolidated equity interests	10
	Note 2.3	List of consolidated entities	11
	Note 2.4	Equity method investments	11
NOTE 3	OPERATIONS	14
	Note 3.1	Segment reporting	14
	Note 3.2	Operating Income	15
	Note 3.3	Fixed assets	17
	Note 3.4	Inventories	20	NOTE 6
	Note 3.5	Under-offtake/over-offtake
		position	21
	Note 3.6	Trade receivables	21
	Note 3.7	Other assets	22
	Note 3.8	Trade payables	22
	Note 3.9	Other current liabilities	23
	Note 3.10	Provisions	23

FINANCING	24
Note 4.1	Financial income	24
Note 4.2	Other financial assets	24
Note 4.3	Cash and cash equivalents	25
Note 4.4	Borrowings and financial
	debt	25

FINANCIAL RISKS AND FAIR VALUE	26
Note 5.1	Risks from fluctuations
	in oil prices	26
Note 5.2	Foreign exchange risk	26
Note 5.3	Liquidity risk	27
Note 5.4	Interest rate risk	28
Note 5.5	Counterparty risk	28
Note 5.6	Country risks	29
Note 5.7	Fair value	29

OTHER INFORMATION	30
Note 6.1	Income tax	30
Note 6.2	Earnings per share	31
Note 6.3	Shareholders' equity	32
Note 6.4	Related parties	32
Note 6.5	Off-balance sheet
	commitments - Contingent
	assets and liabilities	33
Note 6.6	Group employees	34
Note 6.7	Directors' remuneration	34
Note 6.8	Auditors' fees	34
Note 6.9	Acquisition of Wentworth	35
Note 6.10	Post-balance sheet events	36

6	MAUREL & PROM • 2023 FINANCIAL STATEMENTS

FINANCIAL STATEMENTS

Group consolidated financial statements as at 31 December 2023

NOTE 1 GENERAL INFORMATION

Établissements Maurel & Prom S.A. ("the Company" or "M&P") is domiciled in France. The Company's registered office is at 51 rue d'Anjou, 75008 Paris. The Company's consolidated financial statements include the Company and its subsidiaries (collectively referred to as "the Group" and each individually as "Group entities") and the Group's share of its joint ventures. The Group, which is listed on Euronext Paris, primarily acts as an operator specialising in the exploration and production of hydrocarbons (oil and gas).

The consolidated financial statements as at 31 December 2023 were approved by the Board of Directors on 29 February 2024. They will be submitted for approval at the Annual General Meeting on 28 May 2024.

The financial statements are presented in US dollars ($).

Amounts are rounded to the nearest thousand dollars, unless otherwise indicated.

Note 1.1 Key events

Activity

In Gabon, M&P's oil production (80% share) from the Ezanga permit averaged 15,354 bopd. This is 5% more than in 2022.

A well stimulation campaign was carried out at the end of 2023 with good results.

In Tanzania, M&P's gas production (48.06% share) from the Mnazi Bay permit was 51.6 mmcfd in 2023, up 19% from 2022.

Following the completion of M&P's acquisition of Wentworth Resources Plc in December 2023, TPDC exercised its call option to acquire an additional 20% share in Mnazi Bay in January 2024. M&P's share in the assets is now 60% with TPDC holding the remaining 40%. Details of this transaction are given in Note 6.9.

In Angola, M&P's production of Blocks 3/05 (20% share) and 3/05A (26.7% share) reached 4,103 bopd in 2023, an increase of 10% compared to 2022. Year-end production was significantly higher: Q4 2023 production (4,534 bopd M&P share) was 21% higher than the 2022 average (3,732 bopd).

Following the publication of the presidential decree of approval on May 10, the license for Block 3/05 was extended from 2025 until mid-2040. In addition, discussions between the bloc's partners and the regulator resulted in an amendment to the production sharing contract leading to an improvement in the tax terms applicable from October 2023.

In Venezuela, M&P Iberoamerica's production (40%) in the Urdaneta Oeste field was 5,490 bopd in Q4 2023 (13,724 bopd at 100%).

Following the lifting of US sanctions and the publication on 18 October 2023 of a General Licence (GL44) authorising the resumption of oil operations in Venezuela for a renewable period of six months, a framework agreement was signed with the Venezuelan authorities on 7 November 2023.

Under the terms of these agreements, Maurel & Prom's dividend claim of $914 million will be settled in kind through the allocation of oil volumes based on the production of PRDL - the semi-public company in which M&P is a shareholder.

The impact of these arrangements on the Group's results is included in the share of results of associates and is further described in Note 2.4.

The resumption of activities in the Urdaneta Oeste field continues, with the new organisation put in place at the end of November and the first well operations and equipment orders in January. The associated increase in production is on schedule.

After an initial offtake in early January to fund the resumption of operations, two shipments to settle M&P's debt were made in January and February 2024. Further offtakes will take place in the coming months.

General License 44 ("GL 44") from the Office of Foreign Assets Control ("OFAC"), which governs the temporary lifting of US sanctions in Venezuela, is currently scheduled to expire on 18 April 2024. In the event that this is not extended, M&P has the option of continuing to operate in the country under the agreements signed with PdVSA in November 2023, while remaining in strict compliance with the restrictions imposed by the US authorities.

The Group's valued production (income from production activities, excluding offtake imbalances and inventory revaluation) was $608 million in 2023, 13% lower than the previous year. The restatement of offtake imbalances, net of inventory revaluation, had a positive impact of $25 million for the year. Including revenue from drilling activities ($23 million) and third-party oil marketing in Angola ($26 million), consolidated revenue for 2023 was $682 million, up 1% from 2022.

The average price of the selling oil for 2023 was $79.3/bbl, a decrease of 19% compared to 2022 ($97.8/bbl) due to the decline in crude oil prices.

Financial position

Available liquidity as at 31 December 2023 was $159 million, including $97 million of cash and $62 million of undrawn-down RCF tranches.

During 2023, M&P repaid a total of $120 million of gross debt, reducing gross debt to $217 million as at 31 December 2023 (compared to $337 million at the end of 2022), including $146 million of bank loans (including $5 million of RCFs drawn down as at 31 December 2023) and $71 million of shareholder loans.

MAUREL & PROM • 2023 FINANCIAL STATEMENTS

7

FINANCIAL STATEMENTS

Group consolidated financial statements as at 31 December 2023

As a result, net debt decreased by $80 million to $120 million in 2022, compared to $200 million as at 31 December 2022.

It should also be noted that in January 2024, M&P received a total of $98 million representing the payment for the December 2023 offtake in Gabon and TPDC's exercise of its call option to acquire the 20% interest in Mnazi Bay.

Information on the Assala acquisition

Following M&P's signing of a share purchase agreement ("SPA") with Carlyle for the acquisition of Assala on 15 August 2023, the state-owned Gabon Oil Company ("GOC") announced in late 2023 its intention to exercise its pre-emption right in respect of the sale.

The pre-emption option is part of the sovereign rights of the Gabonese State and the state-owned GOC. As soon as

the SPA was signed in August 2023, M&P made proposals to the Gabonese authorities to increase its stake in Assala and strengthen the existing partnership between M&P and the Gabonese Republic.

M&P noted the signing on 15 February 2024 of a share purchase agreement ("SPA") between Gabon's national oil company Gabon Oil Company ("GOC") and Carlyle for the acquisition by GOC of Assala Energy Holdings Ltd and all its subsidiaries ("Assala"). The agreement was signed within the framework of GOC's sovereign pre-emption right. The SPA signed by M&P with Carlyle on 15 August 2023 is no longer applicable.

M&P confirms and reiterates its intention to remain a trusted partner of the Republic of Gabon, as evidenced by its presence and all its projects in the country for almost 20 years now.

Note 1.2 Basis for preparation

Normative framework

In accordance with Regulation (EC) No 1606/2002 of the European Parliament and of the Council of 19 July 2002 on the application of international accounting standards, the consolidated financial statements of the Maurel & Prom Group for the year ended 31 December 2023 have been prepared in accordance with the IAS/IFRS international accounting standards applicable as at 31 December 2023 and adopted by the European Union and published by the IASB.

The accounting policies used in the preparation of the consolidated financial statements for the year ended 31 December 2023 are consistent with those used in the consolidated financial statements for the year ended 31 December 2022, except for the following IFRS standards, amendments and interpretations adopted by the European Union and the IASB that are mandatory for the Group's accounting periods beginning on or after 1 January 2023 (which have not been early adopted by the Group):

IFRS 17 and amendments to IFRS 17, IAS 1, IAS 8, IAS 12

The adoption of these amendments and other interpretations did not have a material impact on the Group's financial statements as at 31 December 2023.

The Group has not adopted early any of the new standards and amendments listed below that are mandatory for annual periods beginning on or after

1 January 2023:

• IFRS 17 - Insurance Contracts;
• Amendments to IFRS 17 - Initial Application of IFRS 17 and IFRS 9―Comparative Information;
• Amendments to IAS 1 and Practice Statement 2 "Materiality";
• Amendments to IAS 8 - Definition of Accounting Estimates;
• Amendment to IAS 12 - Deferred Tax related to Assets and Liabilities arising from a Single Transaction;
• Amendment to IAS 12 - International Tax Reform-Pillar Two Model Rules.

The application of these standards has no impact on the Group's financial statements.

On 23 May 2023, the IASB published amendments to IAS 12 concerning the "Pillar Two" global minimum tax mechanism. On 8 November 2023, the European Commission adopted Commission Regulation (EU) 2023/2468 of 8 November 2023 amending Regulation (EU) 2023/1803 as regards International Accounting Standard 12 making these provisions applicable to the Member States. On the basis of an initial analysis carried out in 2023, the M&P Group considers it unlikely that the application of the new Pillar 2 mechanism will have a material impact on its financial statements in 2024 (when the new legislation comes into force). For the financial year 2023, the M&P Group has applied the temporary exemption from recognition of deferred tax relating to Pillar 2.

Going concern

In preparing the financial statements, the Group has assessed its ability to continue as a going concern, which is not in question as at 31 December 2023, with respect to the following information:

• The cash flow generating capacity of its assets is increasing in an environment where prices remain high;
• Compliance with covenants;
• A cash position of $97 million as at 31 December 2023 (compared to $138 million as at 31 December 2022). In early January, the Group received $98 million in respect of the December 2023 offtake in Gabon and the sale of 20% of the Mnazi Bay permit in Tanzania to TPDC;
• An $80 million reduction in net debt, resulting in a net closing position of $120 million compared to $200 million as at 31 December 2022;
• Finally, M&P has the ability to draw down additional liquidity on demand thanks to the unused $100 million tranche of the shareholder loan.

Use of judgement and estimates

In preparing the consolidated financial statements, the Group has analysed the potential risks related to climate change. Based on the Group's current assessment of the risks and opportunities associated with climate change, this analysis has not resulted in a reassessment of the value of the Group's property, plant and equipment.

The preparation of consolidated financial statements in conformity with IFRS requires the Group to make judgements, estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of

8	MAUREL & PROM • 2023 FINANCIAL STATEMENTS

FINANCIAL STATEMENTS

Group consolidated financial statements as at 31 December 2023

contingent assets and liabilities as at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Changes in facts and circumstances may cause the Group to revise such estimates.

Actual results could differ materially from those estimates if different circumstances or assumptions were applied.

In addition, when a particular transaction is not addressed by a standard or interpretation, the Group's management uses its judgement to determine and apply the accounting policies that will provide relevant and reliable information. The financial statements give a true and fair view of the financial position, results of operations and cash flows of the Group. They reflect the substance of the transactions, have been prepared prudently and are complete in all material respects.

Management estimates used in the preparation of the financial statements relate principally to:

• Impairment testing of oil assets;
• The actualization as at fair value of receivables;
• The recognition of oil carry transactions;
• Provisions for site remediation;
• The valuation of equity method investments and underlying assets;
• The accounting treatment of derivative financial instruments entered into by the Group;
• Under- and over-offtake positions;
• The recognition of deferred tax assets;
• Estimates of proven and probable hydrocarbon reserves.

NOTE 2 SCOPE OF CONSOLIDATION

Note 2.1 Consolidation methods

Consolidation

Companies controlled by Établissements Maurel & Prom SA are fully consolidated.

The Group controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. The financial statements of subsidiaries are included in the consolidated financial statements from the date on which control is obtained until the date on which control ceases.

Intercompany balances, transactions, income and expenses are eliminated on consolidation.

Equity method

Joint ventures and associates are accounted for using the equity method of accounting.

Joint ventures are arrangements in which the Group has joint control and therefore has rights to the net assets of the arrangement rather than rights to the assets and obligations for the liabilities of the arrangement.

Associates are entities over whose financial and operating policies the Group has significant influence without controlling or jointly controlling them. Significant influence is presumed to exist when the Group owns 20% or more of the voting power of an entity, unless the Group does not participate in the management of the entity. If the percentage is less, the Company is consolidated using the equity method if significant influence can be demonstrated.

Gains on transactions with equity-accounted entities are eliminated against the equity method investments to the extent of the Group's interest in the associate. Losses are eliminated in the same way as gains, but only to the extent that they do not represent an impairment.

If the impairment criteria in IAS 39 "Financial Instruments: Recognition and Measurement" indicate that equity method investments may be impaired, the amount of the impairment loss is determined in accordance with IAS 36 "Impairment of Assets."

Business combinations

Business combinations are accounted for using the acquisition method in accordance with IFRS 3 "Business Combinations." When control is acquired, the assets and liabilities of the acquiree are measured at fair value (with some exceptions) in accordance with IFRS requirements.

The Group measures goodwill as at the date of acquisition as:

• The fair value of the consideration transferred; plus
• The amount recognised for any non-controlling interest in the acquiree; plus
• if the business combination is achieved in stages, the fair value of any previously held interest in the acquiree; less
• The net amount recognised (generally at fair value) for the identifiable assets acquired and liabilities assumed.

If the difference is negative, a bargain purchase gain is recognised immediately in operating profit.

Acquisition-related costs, other than those relating to the issue of debt or equity securities by the Group as a result of a business combination, are expensed as incurred.

The identification of goodwill is completed within one year from the date of acquisition.

Such goodwill is not amortised but is tested for impairment at the end of each reporting period and whenever there is an indication that an asset may be impaired.

MAUREL & PROM • 2023 FINANCIAL STATEMENTS

9

FINANCIAL STATEMENTS

Group consolidated financial statements as at 31 December 2023

Changes in the Group's ownership interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions.

Goodwill relating to associates is included in equity method investments.

Foreign currency translation

The consolidated financial statements are presented in US dollars, which is the Group's presentation currency.

The functional currency of the major operating subsidiaries is the US dollar.

The financial statements of foreign subsidiaries for which the functional currency is not the US dollar are translated using the closing rate method. Assets and liabilities, including goodwill, of foreign subsidiaries are translated at the closing rate. Income and expenses are translated at the average exchange rate for the period. Translation differences are recognised in other comprehensive income, in shareholders' equity under "Translation differences" and in the case of minority interests under "Non-controlling interests." Translation differences relating to a net investment in a foreign operation are recognised directly in other comprehensive income.

Income and expenses denominated in foreign currencies are translated into the functional currency of the respective entity as at the transaction date. Monetary

assets and liabilities denominated in foreign currencies are recorded in the balance sheet at their equivalent value in the functional currency of the entity concerned at the closing rate. Differences arising from the translation at the closing rate are recognised in the income statement as other financial income or expenses.

When the settlement of a monetary item that is a receivable or payable to a foreign operation is neither planned nor likely to occur in the foreseeable future, the resulting foreign exchange gains and losses are considered to be part of the net investment in the foreign operation and are recognised in other comprehensive income as a translation reserve.

Where there is a functional currency difference, the Group applies hedge accounting to the foreign exchange differences between the functional currency of the foreign operation and the holding company's functional currency.

Exchange differences arising on the translation of financial liabilities designated as hedges of a net investment in a foreign operation are recognised in other comprehensive income for the effective portion of the hedge and accumulated in the translation reserve. Any adjustment relating to the ineffective portion of the hedge is recognised in net income. When the net investment hedged is sold, the amount of the adjustments recognised as the translation reserve related to it is reclassified in the income statement as disposal income.

Note 2.2 Information on the scope of consolidation and non-consolidated equity interests

Pursuant to ANC Recommendation 2017-01 of 2 December 2017, the full list of Group entities is presented in the Annual Report, Chapter 7 for the financial year.

10	MAUREL & PROM • 2023 FINANCIAL STATEMENTS