Partex Holding B.V.
Financial statements for the year ended 31 December 2018
Partex Holding B.V.
Contents
Directors’ report 1
Consolidated statement of financial position as at 31 December 2018 6
Consolidated statement of profit or loss and other comprehensive income for the year ended 31 December 2018 8
Consolidated statement of changes in equity for the year ended 31 December 2018 10
Consolidated statement of cash flows for the year ended 31 December 2018 12
Notes to the consolidated financial statements for the year ended 31 December 2018 13
Appendix 1 – 60 Payments to Governments 60
Consolidated IFRS FS 2018 i Partex Holding B.V.
Directors’ report Directors of Partex Holding B.V. (the “Company” or Partex) hereby present its financial statements for the financial year ended on 31st December 2018.
General information The Company is a 100% subsidiary of the Calouste Gulbenkian Foundation, a Portuguese private institution of public utility. Its statutory aims are in the fields of arts, charity, education and science. The Company’s business is the production of oil and gas and operates in this market since 1938, well known as the Partex Oil and Gas Group. With its expertise and technical skills the company is a valued partner for major oil companies in different sized operations. The Partex Oil and Gas Group is organized primarily by geographical areas and holds interests in concessions and joint ventures engaged in upstream activities related to the oil and gas industry namely, exploration, development, production and sales. The group has a long tradition of participating in oil and gas concessions and joint ventures in the Middle East and in most recent years became an operator in oil upstream activities in other parts of the World. The Group was the operator for the initial phase of the Dunga field in Kazakhstan and is presently the operator of two fields in the Northeast of Brazil. Oil Exploration activities by the Group are currently in Angola, whereas exploration activities in Brazil and Portugal have ceased.
The Group is structured in sub-holding companies, management units, concession companies and service companies that provide all the necessary advice and financial, technical, management and human resources support to the joint ventures and operating companies in which the Group participates. All activities are carried out in accordance with the strategy and guidelines defined by the Company. In order to increase the efficiency of the group structure, management has decided to voluntary liquidate a few of the subsidiaries of which the activities were ceased in earlier years. This relates to Partex Iberia S.A., which held the prior concessions of the Group in Portugal and Partex Algeria Corporation. In addition to this, the liquidation of PMO services SA has been set forth and currently the Group is awaiting the final approval of the local authorities. Lastly, the prior holding company of the Group, Partex Oil and Gas Holdings Corp, is expected to be liquidated in the course of 2019.
Financial information The revenue for the year increased USD 99 million to USD 421 million. Main driver behind this revenue increase relates to the increase in average sales price per BBL of approximately USD 15 when compared with prior year. Production levels are slightly below prior year, whereas a decrease in the production levels of the concessions in the Sultanate of Oman, was compensated by an increased production from the Group’s concession in Abu Dhabi. The other concessions had a production in line with prior year. The profit for the year is approximately USD 11 million higher than prior year, despite a significant impairment for the year on oil and gas assets of USD 29 million, which was minimal last year.
Consolidated IFRS FS 2018 1 Partex Holding B.V.
This shows, and this was also the case for 2017, an increase in underlying profit (excluding impairment losses / reversal) of the Group of almost USD 40 million. The increased underlying profit positively affected the cash position of the Group. Despite a dividend payment of USD 90 million, the cash position shows only a relatively limited decrease of USD 17 million by the end of 2018, compared to prior year.
Dividends from our participation in OLNG were also positively influenced by the higher oil and gas price and amounted to USD 19.3 million. In prior year this amount was USD 12,5 million; however last year the company recorded a (non-cash) adjustment of USD 5.4 million to align the accounting policies of the investment with the Group accounting policies as described by IFRS (IAS 28). Reference is made to note 14 of the financial statements in this matter.
The administrative expenses for the financial year were influenced by some non-recurring items of approximately USD 5,4 million, which relate to additional consultancy costs for an aborted project to open the Group share capital (through a capital increase financed by a new partner) and subsequent negotiations with the potential partner, and a donation to the Government of Oman for the victims of the Mekunu cyclone which hit the country in May 2018.
The increase in revenue also had consequences on the tax charge of the Group, which increased USD 38 million compared to prior year, of which USD 6.3 million relates to the increase in deferred tax liability. This deferred tax liability fully relates to our Dunga investment in Kazakhstan.
The negotiations between the current partners and Government of Kazakhstan continues regarding a contract extension for another 15 years of the Dunga concession. Earlier in 2018, the Minister of Energy confirmed its interest in continuing to work closely with the Contractor on the matters included in the MoU dated September 2014. During 2018 and the beginning of 2019, several meetings between the contractor Group and relevant Ministries in the Republic of Kazakhstan (such as Ministry of Justice and Ministry of Oil and Gas) were held to conclude on the extension contract in place. Management of the Group is confident that the extension will follow in the next couple of months. With the extension until 2039 a full recoverability of the cost pool and a significant increase in the project economics is foreseen.
Significant risks and uncertainties Risk management is considered a continuous process within the Group and the underlying risk management framework adheres to the requirements set by Group management in this matter. Considering the Industry of the Group and underlying market circumstances, the Group is mainly exposed to the risks coming from the current volatility of oil prices. Management is actively managing these risks and sets the boundaries and maximum level of risk acceptable for the Group. The (development of) significant risks facing the Group are discussed periodically within the Management meetings and adequately actioned upon. In this matter, the risk appetite of Management can be considered conservative as the current exposure from ongoing exploration activities within new oil field is balanced with a regular return from the current long-term oil investments. A breakdown of the risk per category is noted below: • Strategy
Consolidated IFRS FS 2018 2 Partex Holding B.V.
While being strongly committed to the successful development of those ventures, Partex is actively engaged in the process of identifying new investment opportunities in the oil and gas business. It is the Company’s culture to preserve and further develop the historic partnerships in the Middle East where Partex will continue placing its human and technological resources in support of the continued development of the oil and gas industry. • Operational Despite the stable growth of the oil price, management of the Group will continue to closely monitor the cost of the Group and optimizing the administration structure of the Group. Equally the influence of Partex in operating companies will be used to optimize and improve the operational activities in the companies where the Group is a stakeholder. • Financial It’s the company’s goal to remain financially independent and maintain the ability to pay dividends to its shareholder, both current and future. • Financial reporting The solid and reliable financial reporting will be continued and adopted to new requirements, whenever needed. • Laws and regulations The entire Partex Group is adhering to existing laws and regulations. Whenever inconsistencies will be discovered Management will take all necessary steps and set corrective measures.
Financial and non-financial performance indicators Looking at the oil and gas industry in general the oil price development is a major factor for the success or non-success for current developed and new exploration projects. The expected oil price path has its effect on the impairment (loss) or reversal (gain) on the joint venture assets of the company. The investment in the Middle East have matured and the Group expects to benefit from a further increase in the oil price through these investments, as well as in the investment in Kazakhstan. As noted above as well as in note 12 to the financial statements, the current fair value of the joint venture assets in Kazakhstan is mostly sustained by the expected residual value proceed of fixed assets at the end of the concession. Therefore, there is an inherent uncertainty in this amount, as the proceeds are partly dependant on agreement with the local Government. However, following the current negotiations with the partners to the concession and local government, management expects that the current value of the assets will be recovered through extension of the concession. On the concession in Angola, the Group reached the end of the exploration stage for certain fields in the concession and consequently recorded an impairment charge of USD 17,490,000 related to unsuccessful exploration activities in Angola Block 17/06. After this impairment an amount of USD 21,460,000 related to E&E and intangible assets concerning Block 17/06 remain which relate to projects pending technical feasibility and commercial viability. Management is fully confident on the success of the ongoing initiatives that will allow the future development of the project and the recoverability of the carrying amount.
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Environmental and personnel related information The Company has a no-harm to people and environment policy. In fields operated by Partex the best oil field practices are applied. Management makes sure with permanent staff training that state-of-the-art technologies and safety rules are being applied and observed. The number of average full-time employees decreased to 82 in 2018 from 83 in 2017.
Information regarding financial instruments The group operates in an industry which is traditionally considered to be risky compared to other economic areas. The group is managed so as to obtain a reasonable balance between risk and expected reward. • Operational risk: The Partex Group is an active oil and gas exploration company and therefore runs the risk that its exploration activity may be unsuccessful. • Market risk: The Group sells most of its production on annual sales contracts thus reducing its short term exposure to price fluctuations.
• Credit risk: Credit risk is that a customer or counterparty fails to perform or to pay amounts due causing financial loss to the group. The Group carefully assesses the quality of its counterparties when entering into business relationships with them. • Liquidity risk: Liquidity risk is the risk that suitable sources of funding for group business activities may not be available. The Group believes that it has access to sufficient sources of funding to meet current commitments.
Research and development information As part of its effort to ensure adequate technical support to operations and competitive advantage, Partex undertakes several R&D programmes aimed at the development of specific knowledge and technologies in critical areas of the industry. These programmes are supported and further developed through contacts, partnerships and protocols which the Group has established with technical entities of recognised quality, such as leading technological centres, research institutes and universities. Areas that have been addressed include seismic, reservoir characterization, compositional simulation, fluid characterisation, geo–statistical modelling, geo-mechanics and facilities projects. Other information
• The Company uses standard IT systems for administration and financial reporting. These systems are kept up-to-date and the persons using them are properly trained to professionally use them.
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• Partex is seeking long term relationship with its clients. The Group is present at major events in the oil and gas industry and maintains good working relationships with other international oil companies and oil producing countries for being recognized as reliable partners for ongoing and future oil projects. • New and innovative ideas are supported from Group Management. • Financial development and financing is continuously monitored from finance department and Group Management.
Information concerning application of code of conduct
An important cornerstone in the day to day operation and management of activities is the timeous identification and management of Health, Safety and Environmental (HSE) issues. HSE and Social Responsibility principles and philosophies are set out in the HSE & SR policy statement, which has been formulated to ensure that the Company’s intentions are clear to all stakeholders.
Future developments The sole shareholder of the Group is looking for a divestment from the Partex Group and has set forth a competitive process to find a buyer for its position. At this moment the outcome is uncertain, but the shareholder is confident of being able to close the deal during 2019.
Subsequent events There were no material post balance sheet events, which have a bearing on the understanding of the financial statements. Amsterdam, 15 April 2019 The Board of Directors:
A. J. Da Costa Silva
M. C. E. van Gendt
Consolidated IFRS FS 2018 5 Partex Holding B.V.
Consolidated statement of financial position as at 31 December 2018
31 December 31 December 2018 2017
USD USD
Assets Intangible assets 11 56,624,416 38,970,937 Exploration and Evaluation Assets 11 6,454,271 17,065,850 Oil and Gas Properties 12 440,442,514 487,523,190 Property Plant and Equipment 10 504,810 624,481 Other Oil and Gas Financial Assets 13 58,580,394 57,997,481 Investment in joint venture 14 - -
Non-current assets 562,606,405 602,181,939
Inventories 16 13,249,671 14,208,120 Oil and Gas receivables 15 52,234,435 45,568,821 Trade receivables 15 702,376 1,535,376 Other receivables 1,364,315 2,931,357 Cash and cash equivalents 17 57,630,344 74,700,329
Current assets 125,181,141 138,944,003
Total assets 687,787,546 741,125,942
The notes on pages 13 to 59 are an integral part of these consolidated financial statements.
Consolidated IFRS FS 2018 6 Partex Holding B.V.
31 December 31 December 2018 2017
USD USD Equity Share capital 18 121,410 121,410 Share premium 18 573,266,061 573,266,061 Fair value reserve 18 - - Translation reserve 18 (6,449,280) (5,705,662) Retained earnings (71,138,907 ) (19,581,504)
Total equity attributable to the owners of the 495,799,284 548,100,305 Company
Liabilities Provisions 19 95,243,773 110,032,256 Other payables 20 202,735 197,958 Deferred tax liabilities 9 40,947,997 34,657,516
Total non-current liabilities 136,394,505 144,887,730
Oil and Gas payables 15 49,664,839 45,611,765 Trade and other payables 21 5,928,918 2,526,142
Total current liabilities 55,593,757 48,137,907
Total liabilities 191,988,262 193,025,637
Total equity and liabilities 687,787,546 741,125,942
The notes on pages 13 to 59 are an integral part of these consolidated financial statements.
Consolidated IFRS FS 2018 7 Partex Holding B.V.
Consolidated statement of profit or loss and other comprehensive income for the year ended 31 December 2018
2018 2017
Note USD USD USD USD
Continuing operations Revenue 5 420,973,343 321,849,463 Cost of sales 5 (95,410,088 ) (88,575,313)
Gross profit 325,563,255 233,274,150
Share of profit of a Joint Venture 14 19,319,369 7,385,800 Other income 5 2,041,077 2,649,330 Administrative expenses 6 (9,137,245) (3,733,356) Personnel costs 6 (9,641,927) (10,844,704) Depreciation and amortization 10/11/12 (94,113,437) (77,856,717) Impairment reversals/ (losses) 7 (27,834,517 ) 775,445
(119,366,680) (81,624,202)
Operating profit 206,196,575 151,649,948
Finance income 8 194,472 4,301,543 Finance costs 8 (1,523,863 ) (285,785)
Net finance costs (1,329,391) 4,015,758
Profit before tax 204,867,184 155,665,706
Income tax expense 9 (170,541,287 ) (132,409,669)
Profit attributable to the owners 34,325,897 23,256,037 of the Company
The notes on pages 13 to 59 are an integral part of these consolidated financial statements.
Consolidated IFRS FS 2018 8 Partex Holding B.V.
2018 2017
USD USD USD USD
Other comprehensive income Items that will never be
reclassified to profit or loss Re-measurement of defined benefit liability 4,116,700 - (asset) OCI movements of equity accounted joint - 16,740 ventures
4,116,700 16,740 Items that are or may be
reclassified to profit or loss Foreign operations – foreign currency (743,618) (915,746) translation reserves Available-for-sale financial assets – net - - change in fair value Available for sale financial assets- - (795,554) recycling through P&L
(743,618) (1,711,300)
Other comprehensive income, net 3,373,082 (1,694,560) of tax
Total comprehensive income attributable to the owners of the 37,698,979 Company 21,561,477
The notes on pages 13 to 59 are an integral part of these consolidated financial statements.
Consolidated IFRS FS 2018 9 Partex Holding B.V.
Consolidated statement of changes in equity for the year ended 31 December 2018
Attributable to owners of the Company Share capital Share premium Fair value Translation Retained Actuarial gains Total reserve reserve earnings and losses USD USD USD USD USD USD USD
Balance as at 1 January 2018 121,410 573,266,061 - (5,705,662) (19,581,504) - 548,100,305
Total comprehensive income Profit - - - - 34,325,897 - 34,325,897 Translation reserve - - - (743,618) - - (743,618) Net amount reclassified to Profit and Loss ------0 Other reclassifications in equity ------0 OCI movements in equity accounted investees and Joint Operations (*) - - - - 4,116,700 - 4,116,700
Total comprehensive income - - - (743,618) 38,442,597 - 37,698,979
Transactions with owners of the Company Increase in share premium ------Dividends paid - - - - (90,000,000) - (90,000,000)
Total transactions with owners of the Company - - - - (90,000,000) - (90,000,000)
Balance as at 31 December 2018 121,410 573,266,061 - (6,449,280) (71,138,907) - 495,799,284
(*) The majority of other movements in equity relate to the JV share of OCI items in PDO and Oman LNG following the accounting requirements of IFRS 11 for this investment. The accumulated amount of OCI items of Joint operations/Ventures included in retained earnings by the end of the year 2018 amounts to USD 8,425,660 (2017 USD: 4,308,960) and is not distributable to shareholders as dividend. The notes on pages 13 to 59 are an integral part of these consolidated financial statements.
Consolidated IFRS FS 2018 10 Partex Holding B.V.
Attributable to owners of the Company Share capital Share premium Fair value Translation Retained Actuarial gains Total reserve reserve earnings and losses USD USD USD USD USD USD USD
Balance as at 1 January 2017 121,410 590,266,061 795,554 (21,789,916) (47,135,663) - 522,257,446
Total comprehensive income Profit - - - - 23,256,037 - 23,256,037 Translation reserve - - - (915,746) - - (915,746) Net amount reclassified to Profit and Loss - - (795,554) - - - (795,554) Other reclassifications in equity - (17,000,000) - 17,000,000 - - 0 OCI movements in equity accounted investees and Joint Operations - - - - 4,298,122 - 4,298,122
Total comprehensive income - (17,000,000) (795,554) 16,084,254 27,554,159 - 25,842,859
Transactions with owners of the Company Increase in share premium ------Dividends paid ------
Total transactions with owners of the Company ------
Balance as at 31 December 2017 121,410 573,266,061 - (5,705,662) (19,581,504) - 548,100,305
The notes on pages 13 to 59 are an integral part of these consolidated financial statements.
Consolidated IFRS FS 2018 11 Partex Holding B.V.
Consolidated statement of cash flows for the year ended 31 December 2018 2018 2017
USD USD
Cash flows from operating activities
• Oil and Gas income received 414,926,309 314,813,229 • Trade and other payables (94,633,033) (83,997,069) • Personnel costs paid 6 (9,641,927) (10,844,704)
310,651,349 219,971,456
• Income taxes paid 9 (164,250,806) (105,009,105) • Other receipts/payments relating to operating activities 459,060 7,717,515
Net cash from operating activities 146,859,603 122,679,866
Cash flows from investing activities Property, Plant and Equipment (136,262) (402,935) Oil and Gas properties (92,353,284) (90,531,407) Exploration and evaluation (178,421) (121,319) Intangible assets (36,076) (21,290) Interest received 124,652 120,180 Dividends received 19,319,369 13,207,636
Net cash from (used in) investing activities (73,260,022) (77,749,135)
Cash flows from financing activities Interest paid - - Dividends paid (90,000,000) (33,374,100)
Net cash from (used in) financing activities (90,000,000) (33,374,100)
Net increase/decrease in cash and cash equivalents (16,400,419) 11,556,631 Cash and cash equivalents at 1 January 74,700,329 63,265,474 Effect of movements in exchange rates on cash held (669,566) (121,776)
Cash and cash equivalents at 31 December 18 57,630,344 74,700,329
The notes on pages 13 to 59 are an integral part of these consolidated financial statements.
Consolidated IFRS FS 2018 12 Partex Holding B.V.
Notes to the consolidated financial statements for the year ended 31 December 2018
1. Reporting entity Partex Holding B.V. (the ‘Company’) is a limited liability Company domiciled in Amsterdam, The Netherlands. The Company’s registered office is Claude Debussylaan 10, 1082 MD Amsterdam, the Netherlands and its registration number is 58329129. The Company is a wholly owned subsidiary of the Fundaçao Calouste Gulbenkian, a charitable foundation established under the laws of Portugal. The Company was set up in July 2013 as ultimate holding company of the Group which holds investments in the oil and gas industry. The subsidiaries of the Group are active in the oil and gas industry from participating in exploration and development of oil and gas concessions to upstream activities. These consolidated financial statements comprise the Company and its subsidiaries (collectively the ‘Group’ and individually ‘Group companies’).
2. Basis of preparation
(a) Statement of compliance These consolidated financial statements have been prepared in accordance with International Financial Reporting Standards as adopted by the European Union (EU-IFRSs). The consolidated financial statements were authorised for issue by the Board of Directors on 15 April 2019.
(b) Basis of preparation The consolidated financial statements have been prepared on the historical cost basis except for the below items: • Pension scheme investments, which are accounted for at fair value and housing loans stated at amortised costs in accordance with IFRS 9. The accounting policies applied by the Group in the preparation of these consolidated financial statements for the year ended 31 December 2018 are consistent with the ones used in the preparation of the Group’s financial statement as at 31 December 2017, except for those accounting standards that were adopted from 1 January 2018 (see note 3 below).
(c) Going concern The financial statements have been prepared under the going concern assumption. In assessing all available financial- and market information, as well as existing and available hydrocarbon reserves in combination with already existing business- and investment plans there are no reasons or indications for Management to assume that an economically successful continuation of the business could not be possible.
Consolidated IFRS FS 2018 13 Partex Holding B.V.
However, reference is made to note 27 in which is stated that the sole shareholder is planning to sell its share in the Group during the subsequent year. This however has no impact on the current going concern assumption of the Group.
(d) Functional and presentation currency These consolidated financial statements are presented in USD, which is the Group’s functional currency. For each entity, the Group determines the functional currency and items included in the financial statements of each entity are measured using that functional currency. The Group uses the direct method of consolidation and on disposal of a foreign operation, the gain or loss that is reclassified to profit or loss reflects the amount that arises from using this method.
(e) Significant accounting judgements, estimates and assumptions
In preparing these consolidated financial statements, management has made judgements, estimates and assumptions that affect the application of the Group’s accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to estimates are recognised prospectively.
Information about assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment in the year ending 31 December 2018 is included in the following notes:
(e.1) Recoverability of assets (non-financial assets)
The Group assesses, at each reporting date, whether there is an indication that an asset (or CGU) may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Group estimates the asset’s or CGU’s recoverable amount.
Assets are impaired when there are events or changes in circumstances that indicate that carrying amounts of the assets are not recoverable. Such impairment indicators include changes in the Group’s business plans, changes in commodity prices leading to unprofitable performance and, for Oil & Gas properties, significant downward revisions of estimated proved reserve quantities or significant increase of the estimated development costs.
Impairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable amount, which is the higher of its fair value less costs of disposal and its value in use. The fair value less costs of disposal calculation is based on available data from binding sales transactions, conducted at arm’s length, for similar assets or observable market prices less incremental costs of disposing of the asset. The value in use calculation is based on a DCF model. The expected future cash flows used for impairment analyses are based on judgmental assessments of future production volumes, prices and costs, considering available information at the date of review. For oil and natural gas properties, the expected future cash flows are estimated principally based on developed and undeveloped proved reserves including, among other elements, production taxes and the costs to be incurred for the reserves yet to be developed. The estimate of the future
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amount of production is based on assumptions related to the commodity future prices, lifting and development costs, field decline rates, market demand and other factors.
The cash flows associated to Oil & Gas commodities are estimated on the basis of forward market information, if there is a sufficient liquidity and reliability level, on the consensus of independent specialized analysts and on management’s forecasts about the evolution of the supply and demand fundamentals. The discount rate reflects the current market valuation of the time value of money and of the specific risks of the asset not reflected in the estimate of the future cash flows.
The recoverable amount is sensitive to the discount rate used for the DCF model as well as the expected future cash-inflows and the growth rate used for extrapolation purposes.
The key assumptions used to determine the recoverable amount for the different CGUs, including a sensitivity analysis, are disclosed and further explained in Note 7.
(e.2) Income taxes The Group is subject to income taxes in certain jurisdictions. Significant interpretation and estimates are required in determining the group income taxes. There are many transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business. Different interpretations and estimates would result in a different level of income taxes both current and deferred, recognized in the period. (e.3) Hydrocarbon reserve and resource estimates Hydrocarbon reserves are estimates of the amount of hydrocarbons that can be economically and legally extracted from the Group’s oil and gas properties. The estimation of crude oil and gas reserves is an integral part of the decision-making process relating to exploration activity and development assets.
The volume of proved crude oil and gas reserves is used to calculate depreciation of the exploration and production assets in accordance with the "Unit of Production" method, as well as to value the possible impairment of oil and gas assets relating to that activity.
Estimated proved reserves are subject to future revision, as new information becomes available, including information relating to development activities, drilling or production, exchange rates, prices, contract termination dates and development plans. Changes in estimated proved reserves are taken into account in calculating depreciation and provision for abandonment by appropriately adjusting the remaining net book value of the assets being depreciated and the provision for abandonment costs- based on the expected future production.
(e.4) Decommissioning liabilities The Group makes judgments and estimates to calculate provisions for decommissioning liabilities based on current information relating to expected costs and plans. Such costs can vary due to changes in legislation and regulations relating to a specific location. Any change in the circumstances relating to such provisions, as well as in the legislation and regulations can significantly affect the provisions for such matters.
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(e.5) Pension and other employee benefits Determining pension liabilities requires the use of assumptions and estimates, including the use of actuarial projections, estimated returns on investment, and other factors that could impact the cost and liability of the pension plan.
3. Significant accounting policies This note describes the Group’s significant accounting policies, which are those relevant to an understanding of the consolidated financial statements and includes the measurement basis used in their preparation. It allows an understanding as to how transactions, other events and conditions are reported. The accounting policies set out below have been applied consistently to all periods presented in these consolidated financial statements except for the adoption as from 1 January 2018 of IFRS 9 “Financial Instruments” and IFRS 15 “revenue from contracts with customers”.
(a) Basis of consolidation
(i) Subsidiaries The consolidated financial statements comprise the financial statements of the Company and its subsidiaries as at 31 December 2018. Subsidiaries are entities controlled by the Group. 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. Generally, there is a presumption that a majority of the voting rights result in control. To support this presumption and when the Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant facts and circumstances in assessing whether it has power over an investee. The financial statements of subsidiaries are included in the consolidated financial statements from the date on which control commences until the date on which control ceases. The group re assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control. Non-controlling interest are measured initially at their proportionate share of the acquiree’s identifiable net assets at the date of acquisition. Profit or loss and each component of OCI are attributed to the equity holders of the parent of the Group and to the non-controlling interest, even if this results in the non-controlling interest having a deficit balance. When necessary, adjustments are made to the financial statements of the subsidiaries to bring their accounting policies in line with the Group Accounting policies. All intra group assets and liabilities, equity, income, expenses and cash flows relating to transactions between members of the Group are eliminated in full on consolidation.
(ii) Loss of control When the Group loses control over a subsidiary, it derecognises the assets and liabilities of the subsidiary, and any non-controlling interests and other components of equity. Any resulting gain
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or loss is recognised in profit or loss. Any interest retained in the former subsidiary is measured at fair value when control is lost. The consolidated financial statements of Partex Holding BV include the financial statements of the following subsidiary companies, all wholly owned: Country of Share capital Company Name incorporation Share Capital denomination Activity Partex Oil and Gas (Holdings) Corp. USD (prior holding of the Group) Cayman Islands USD 50,000 c Participations and Explorations Corp. Panama USD 2,800 USD a Partex (Oman) Corporation Panama USD 2,500 USD a Partex Gas Corporation Panama USD 2,000,000 USD a Partex Services Corporation Panama USD 2,300,000 USD b Partex (Kazakhstan) Corporation Cayman Islands USD 5,000 USD a PMO Services, SA Liechtenstein USD 469,925 CHF b Partex Services Portugal S.A. Portugal USD 69,500 EUR b Partex Brasil Ltda. Brazil USD 67,416,137 BRL a Partex (Brazil) Corporation Cayman Islands USD 50,000 USD c Partex (Algeria) Corporation Cayman Islands USD 50,000 USD d Partex (Iberia) S.A. Portugal USD 65,894 EUR d Partex Brasil Oper. Petrolíferas Ltda. Brazil USD 1,715,738 BRL b Partex (Angola) Corporation Cayman Islands USD 50,000 USD a
(a) Companies with interest in oil concessions or contractual operations. (b) Supply of services. (c) Holding Company. (d) (Voluntary) liquidation in 2018
(b) Interests in joint arrangements
The Group undertakes a number of business activities through joint arrangements. A joint arrangement is an arrangement over which two or more parties have joint control. Joint control is the contractually agreed sharing of control over an arrangement which exists only when the decisions about the relevant activities (being those that significantly affect the returns of the arrangement) require the unanimous consent of the parties sharing control. The Group’s joint arrangements are of two types:
(a1) Joint operations A joint operation (JO) is a type of joint arrangement in which the parties with joint control of the arrangement have rights to the assets and obligations for the liabilities relating to the arrangement.
The activities of a joint operation are primarily designed for the provision of output to the parties to the arrangement, indicating that:
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• the parties have the rights to substantially all the economic benefits of the assets of the arrangement; and • all liabilities are satisfied by the joint participants.
This indicates that, in substance, the joint participants have an obligation for the liabilities of the arrangement.
In relation to its interests in JOs, the financial statements of the Group includes: • Assets, including its share of any assets held jointly • Liabilities, including its share of any liabilities incurred jointly • Revenue from the sale of its share of the output arising from the joint operation • Share of the revenue from the sale of the output by the joint operation • Expenses, including its share of any expenses incurred jointly
All such amounts are measured in accordance with the terms of each arrangement which are in proportion to the Group’s interest in each asset and liability, income and expense of the JO.
Significant joint operations of the Group, which are those with the most significant contributions to the Group’s net profit and/or net assets, are the following:
Country of 2018 2017 Significant joint operations Principal activity operation % % Oman Block 6 Oman Oil exploration (b) 2% 2% Mukhaizna – Block 53 Oman Oil exploration (b) 1% 1% ADNOC Gas Processing (AGP)1 Abu Dhabi Natural Gas Liquids (b) 2% 2% Dunga Kazachstan Oil exploration (b) 20% 20% Block 17/06 Angola Oil exploration (a) 2.5% 2.5% Espírito Santo Brazil Oil Exploration (a) 15% 15% Sergipe Alagoas Brazil Oil Exploration (a) 50% 50% Potiguar Basin Brazil Oil exploration (b) 50% 50% a) Exploration Phase b) Production Phase
(a2) Joint ventures A joint venture (JV) is a type of joint arrangement in which the parties with joint control of the arrangement have rights to the net assets of the arrangement. The Group’s investment in its JV is accounted for using the equity method.
Under the equity method, the investment in the JV is initially recognised at cost to the Group. In subsequent periods, the carrying amount of the JV is adjusted to recognise changes in the Group’s share of net assets of the JV since the acquisition date.
1 Former Gasco
Consolidated IFRS FS 2018 18 Partex Holding B.V.
The statement of profit or loss and other comprehensive income reflects the Group’s share of the results of the operations of the JV. In addition, when there has been a change recognised directly in the equity of the JV, the Group recognises its share of any changes, when applicable, in the statement of changes in equity. Unrealised gains and losses resulting from transactions between the Group and the JV are eliminated to the extent of the interest in the JV.
The financial statements of the JV are prepared for the same reporting period as the Group. When necessary, adjustments are made to bring the accounting policies in line with those of the Group.
The equity accounted investee held by the Group relates to the following: Country of 2018 2017 Joint Venture Principal activity operation % % Oman LNG LLC Oman Gas exploration (development) 2% 2%
(c) Revenue
Sale of goods (from 1 January 2018) Revenue from contracts with customers is recognised when or as the Group satisfies a performance obligation by transferring control of a promised good or service to a customer. The transfer of control of oil and natural gas usually coincides with title passing to the customer and the customer taking physical possession of the good, primarily through transferring of the good into the customers vessel. The Group principally satisfies its performance obligations at a point in time; the amounts of revenue recognised relating to performance obligation satisfied over time are not significant. The group has generally concluded that it is the principal in its revenue arrangements, because it typically controls the goods or services before transferring them to the customer. Revenue is measured net of returns, trade discounts and volume rebates. Revenue resulting from hydrocarbon production from properties in which the Group has an interest with partners in a joint arrangement is recognised based on the sales method, which implies that the Group does not adjust the revenue for imbalances between the entitlement from the joint operation and actual quantities lifted, but actually adjusts for the (additional) costs incurred for production of these additional quantities. This implies that, where the Group has lifted and sold more than the ownership interest, an accrual is recognised for the cost of the overlift. Where the Group has lifted and sold less than the ownership interest, costs are deferred for the underlift.
Sale of goods (before 1 January 2018) In relation to oil and gas sales, revenue is recognised when significant risks and rewards of ownership have been transferred to the buyer, recovery of the consideration is probable, the associated costs and possible return of goods can be estimated reliably, there is no continuing management involvement with the goods, and the amount of revenue can be measured reliably. Revenue is measured net of returns, trade discounts and volume rebates. Revenue resulting from hydrocarbon production from properties in which the Group has an interest with partners in a joint arrangement is recognised based on the sales method, which
Consolidated IFRS FS 2018 19 Partex Holding B.V.
implicates that the Group does not adjust the revenue for imbalances between the entitlement from the joint operation and actual quantities lifted, but actually adjusts for the (additional) costs incurred for production of these additional quantities. This implies that, where the Group has lifted and sold more than the ownership interest, an accrual is recognised for the cost of the overlift. Where the Group has lifted and sold less than the ownership interest, costs are deferred for the underlift.
Dividends and other income related to Oil and Gas
Dividends arising from the Group’s resources are recognised when the shareholders right to receive the payment is established and therefore it is probable that the economic benefits associated with the transaction will flow to the Group.
(d) Finance income and finance costs Interest received comprise of interest income on cash and cash deposits, interest received for timing differences between actual and agreed payment dates, unwinding of discount on provisions and the reversal of discounted interest on financial assets which are measured at their net present values. Interest income is recognised as it accrues unless collectability is in doubt.
Financial expenses comprise interest expense on borrowings, cash overdrafts, timing differences between actual and agreed payment dates, discounting of provisions and financial assets measured at net present value. Interest expense is recognised as it accrues.
(e) Foreign currency
(i) Foreign currency transactions Transactions in foreign currencies are translated into the respective functional currencies of Group companies at the date the transaction first qualifies for recognition. At the balance sheet date, monetary assets and liabilities in foreign currency are converted at the rate of exchange ruling at that date. Exchange differences are recognised in the income for the year. Non‐monetary assets and liabilities that are measured at historical cost in a foreign currency are translated using the exchange rate at the date of the transaction. Non‐monetary assets and liabilities denominated in foreign currencies that are stated at fair value are translated at the foreign exchange rates ruling at the dates the fair value was determined. The resulting exchange differences are accounted for in the income statement, except when related to equity instruments classified as fair through OCI, which are included in the fair value reserve.
(ii) Foreign operations
The assets and liabilities of foreign operations are translated into USD at the exchange rates of the reporting date. The income and expenses of foreign operations are translated into USD at the exchange rates at the dates of the transactions. Foreign currency differences are recognised in OCI and accumulated in the translation reserve, except to the extent that the translation difference is allocated to NCI.
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When a foreign operation is disposed of in its entirety or partially, such that control, significant influence or joint control is lost, the cumulative amount on the translation reserve related to that foreign operation is reclassified to profit or loss as part of the gain or loss on disposal. Exchange differences arising on a monetary item that forms part of the Group's net investment in a foreign operation are presented in the consolidated financial statements in other comprehensive income and reclassified from equity to profit or loss on disposal or partial disposal of the net investment.
(f) Employee benefits
(i) Short-term employee benefits Short-term employee benefits are expensed as the related service is provided. A liability is recognised for the amount expected to be paid if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.
(ii) Pensions
The Group, through one of its investments in Oman, operates a defined benefit pension scheme for certain staff, which requires contributions to be made to a separately administered unregistered fund. The investment holds legal title to the pension scheme investments on behalf of the scheme, with a corresponding pension liability included under “provisions”. The pension liability is calculated annually at the balance sheet date and the applicable provision is made in the accounts for the Group’s obligations under the scheme, on the basis of an actuarial valuation, using the projected unit credit method. The provision represents the estimated present value of benefits to be paid to existing pensioners and of future benefits payable to current employees in respect of service up to the balance sheet date.
Re-measurements, comprising actuarial gains and losses, and the return of plan assets (excluding interest) is reflected immediately in the balance sheet with a charge/credit recognised in OCI (revaluation reserve) in the period in which it occurs. The discount rate used in the calculation is determined by reference to interest rates of high-quality corporate bonds that are denominated in the currency in which the benefits will be paid and that have terms to maturity approximating to the terms of the related pension liabilities.
The annual costs of the scheme, the net total interest and current service costs, are charged to the income statement. In addition, the investment contributes the entire income from the pension scheme investments as it is earned to the separately administered staff pension scheme.
(iii) Other long-term employee benefits Other long-term employee benefits mostly relate to end of service benefits granted to employees, The Group’s net obligation in respect of long-term employee benefits is the amount of future benefit that employees have earned in return for their service in the current and prior periods. That benefit is discounted to determine its present value. Re-measurements are recognised in profit or loss in the period in which they arise.
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(g) Income tax Income tax expense comprise current and deferred tax. It is recognised in profit or loss, except to the extent that it relates to a business combination, or items recognised directly in equity or OCI. Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year and any adjustment to the tax payable or receivable in respect of previous years. The amount of current tax payable or receivable is the best estimate of the tax amount expected to be paid or received that reflects uncertainty related to income taxes, if any. It is measured using tax rates enacted or substantively enacted at the reporting date. Current tax assets and liabilities are offset only if certain criteria are met. Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and their respective tax basis, and is calculated using the tax rates in force at the balance sheet date in the respective jurisdiction and that are assumed will apply when the related deferred income tax asset is realised or the deferred income tax liability is settled. Deferred tax liabilities are recognised for all taxable temporary differences except for goodwill which is not deductible for tax purposes, differences arising on initial recognition of assets and liabilities that affect neither accounting nor taxable profit and differences relating to investments in subsidiaries to the extent that they will probably not reverse in the foreseeable future. Deferred tax assets are recognised to the extent it is probable that future taxable profits will be available, from which deductible temporary differences can be deducted. The Company offsets deferred taxes assets and liabilities for each subsidiary, whenever (i) the subsidiary has a legally enforceable right to set off current tax assets against current tax liabilities, and (ii) they relate to income taxes levied by the same taxation authority. This offset is therefore performed at the level of each subsidiary: thus the deferred tax asset presented in the consolidated balance sheet is the sum of the subsidiaries that present deferred tax assets and the deferred tax liability is the sum of the subsidiaries that present deferred tax liabilities.
(h) Inventories Inventories are measured at the lower of cost and net realizable value. Cost of crude oil is determined using the first-in first-out cost method. Crude oil inventory consists of amounts in pipelines, tanks and stock held by transportation companies, where the right of ownership has not been transferred to the customers. The cost of crude oil inventory includes all direct costs and an appropriate share of overheads. Cost of other inventories is determined at cost using the weighted average cost method. Net realizable value is the estimated selling price in the ordinary course of business, less the cost of completion and selling expenses.
(i) Property, plant and equipment (as included in Oil & Gas properties) Property, plant and equipment are measured at cost less accumulated depreciation and any accumulated impairment losses. In the case of a present obligation for dismantling and removal of assets and restoration of sites, the initial carrying amount of an item of property, plant and equipment includes the estimated (discounted) costs to be incurred when the removal event occurs (a corresponding amount is
Consolidated IFRS FS 2018 22 Partex Holding B.V.
recognised as part of a specific provision). Changes resulting from revisions to the timing or the amount of the original estimate of the provision are accounted for as described in the accounting policy for “Provisions”. Depreciation of oil and gas properties is calculated using the unit-of-production method based upon proved and certain probable developed reserves, except in the case of assets whose useful live is shorter than the lifetime of the field in which case the straight line method is applied. The reserve estimates include only crude oil which management believes can reasonably be produced within the current terms of the respective production agreements. The reserves for this purpose are determined in accordance with generally accepted procedures in the oil and gas industry. Significant individual items of property, plant and equipment (components), except for oil and gas properties, whose useful lives are different from the useful life of the asset as a whole, are depreciated individually, applying depreciation rates reflecting their anticipated useful lives. The cost of replacing major parts or components of property, plant and equipment items is capitalised and the replaced part is retired. Any gain or loss arising is recognised in the income statement when the asset is retired. Subsequent costs are recognized as separate assets 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. All repair and maintenance costs are charged to the income statement during the financial period in which they are incurred. Depreciation is calculated using the straight-line method over the assets estimated useful life as follows: Number of Years/Method
Furniture and fixtures 4 to 6 Office equipment 4 to 6 Vehicles 3 to 4 Facilities and machinery (incl. in oil & Gas assets) UOP or 8-33.33 years Wells (incl. in oil & Gas assets) Unit-of-production
Changes in estimates, which affect unit of production calculations, are taken into account for the year of the change and for future years. When there is an indication that an asset may be impaired, IAS 36 requires that its recoverable amount be estimated, and an impairment loss recognized when the net book value of the asset exceeds its recoverable amounts. Recoverable amount is determined by greater of fair value less cost to sell and the value in use. Impairment losses are recognized in the income statement. On an annual basis the Group determines the value in use of (its share in) Oil & Gas assets relating to joint arrangements with third parties. Based on the recoverable amount determined from this calculation, the Group records an impairment on its (proportionate) share in the joint oil producing assets, if relevant. In assessing value in use, the estimated future cash flows are discounted to their present value using a discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Expected cash flows are determined on the basis of reasonable and supportable assumptions that represent management’s best estimate of the range of economic
Consolidated IFRS FS 2018 23 Partex Holding B.V.
conditions that will exist over the remaining useful life of the asset, giving greater weight to external evidence. With reference to commodity prices, management assumes the price scenario adopted for economic and financial projections and for whole life appraisal for capital expenditures. In particular, for the cash flows associated to oil, natural gas and petroleum products prices (and prices derived from them), the price scenario is approved by Management. When commodity prices fluctuate quite considerably, management considers the most updated variables available. The discount rate used is the Weighted Average Cost of Capital (WACC) adjusted for the specific country risk of the asset. These adjustments are measured considering information from external parties.
(j) Intangible assets, exploration and evaluation assets
Exploration and evaluation Exploration costs are accounted for under the successful efforts’ method for exploration and development activities from the start of the operation until the beginning of the production phase.
Exploration expenditure is initially capitalized as an intangible asset until the drilling of the well is complete and the results have been evaluated. If hydrocarbons are not found, the exploration expenditure is written off as a dry hole. If hydrocarbons are found and, subject to further appraisal activity which may include the drilling of further wells, are likely to be capable of commercial development, the costs continue to be carried as an intangible asset. All such carried costs are subject to management review at least once a year to confirm the continued intent to develop or otherwise extract value from the discovery. When this is no longer the case, the costs are written off. When proved reserves of hydrocarbons are determined and these are considered commercially producible quantities of reserves and consequent development is determined, the respective expenditure is transferred to Oil and Gas properties.
Concession rights Concession acquisition costs are capitalized within intangible assets and are amortized over the useful life of the concession on a straight-line basis, which varies from 10 to 21 years. The Group assesses at each reporting date whether there is an indication that an asset (or CGU) may be impaired. Other intangible assets Other intangible assets that are acquired by the Group and have finite useful lives are measured at cost less accumulated amortisation and accumulated impairment losses.
Amortisation is calculated to write off the cost of intangible assets less their estimated residual values using the straight-line method over their estimated useful lives and is generally recognised in profit or loss.
Consolidated IFRS FS 2018 24 Partex Holding B.V.
The estimated useful lives for the other intangible assets vary between 4 to 10 years. Amortisation methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.
(k) Financial instruments (from 1 January 2018) Financial assets and liabilities are presented separately in the consolidated balance sheet except where there is a legally enforceable right of offset and the Group has the intention to settle on a net basis or realise the asset and settle the liability simultaneously. Financial asset Financial assets are classified at initial recognition and subsequently measured at amortised cost, fair value through OCI or fair value through profit and loss. The classification of financial assets is determined by the contractual cash flows and where applicable the business model for managing the asset. A financial asset is measured at amortised cost, if the objective of the business model is to hold the financial asset in order toc collect contractual cash flows and the contractual terms give rise to cash flows that are solely payments of principal and interest. It is initially recognised at fair value plus or minus the transaction costs that are directly attributable to the acquisition or issue of the financial asset. Subsequently the financial asset is measured using the effective interest method less any impairment. Gains or losses are recognised in profit and loss when the asset is derecognised, modified or impaired. All financial assets of the Group are considered to belong this category, except for the pension scheme assets which are recognised at fair value as per IAS 19 (refer to note 2b above). A financial asset is primarily derecognised when: 1. The rights to receive cash flows from the asset is expired, or; 2. The Group has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a “pass- through” arrangement and the Group has either 1) transferred substantially all the risk and rewards of the asset or 2) the group has neither transferred nor retained substantially all the risk and rewards of the asset, but has transferred control of the asset. Impairment of financial asset The expected credit loss model is applied for recognition and measurement of impairments in financial assets measured at amortised costs. The loss allowance for the financial asset is measured at an amount equal to the 12 month expected credit losses. If the credit risk of the financial asset has increased significantly since initial recognition, the loss allowance for the financial asset is measured at an amount equal to the lifetime expected credit losses. Changes in allowances are recognised in profit and loss. For trade receivables, a simplified impairment approach is applied recognising expected lifetime losses from initial recognition. The Group has established a provision matrix that is based on its historical credit loss experience, adjusted for forward looking factors specific to the debtors and the economic environment. Financial liabilities Financial liabilities are measured at amortised cost, unless they are requested to be measured at fair value through profit and loss such as instruments held for trading or the Group has opted to
Consolidated IFRS FS 2018 25 Partex Holding B.V.
measure them at fair value through profit and loss. Debt and trade payables are recognised initially at fair value based on amounts exchanged, net of transaction costs and subsequently at amortised costs. Interest expense on debt is accounted for using the effective interest method and is recognised in profit and loss. All financial liabilities of the Group are measured at amortised costs. A financial liability is derecognised when the obligation under the liability is discharged, cancelled or expires. Financial assets and financial liabilities are offset, and the net amount is reported in the consolidated statement of financial position if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.
Financial instruments (prior to 1 January 2018)
Classification The Group classifies non derivative financial assets into the following categories: financial assets at fair value through profit and loss, held to maturity financial assets, loans and receivables and available for sale financial assets. The Group classifies non derivative financial liabilities into the following categories: financial liabilities at fair value through profit and loss and other financial liabilities. Non derivative financial assets and liabilities - Initial recognition, measurement and de- recognition The Group initially recognises loans and receivables and debt securities on the date when they are originated. All other financial assets and financial liabilities are initially recognised on trade date when the entity becomes a party to the contractual provisions of the instrument. The Group derecognises a financial asset when the contractual rights to the cash flows from the asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risk and rewards of ownership of the financial asset are transferred, or it neither transfers nor retains substantially all of the risk and rewards of ownership and does not retain control over the transferred asset. Any interest in such derecognised financial assets that is created or retained by the Group is recognised as a separate asset or liability. The Group derecognises a financial liability when its contractual obligations are discharged or cancelled or expire. Financial assets and liabilities are offset and the net amount presented in the statement of financial position when, and only when, the Group currently has a legally enforceable right to offset the amounts and intends either to settle them on a net basis or to realise the asset and settle the liability simultaneously. Available for sale financial assets These financial assets are non-derivative financial assets (i) intended to be held for an indefinite period of time, (ii) designated as available-for-sale at initial recognition or (iii) that are not classified in the other categories referred to above. Available for sale financial assets are initially recognised at fair value plus transaction costs.
Consolidated IFRS FS 2018 26 Partex Holding B.V.
Available-for-sale financial assets are subsequently carried at fair value. However, gains and losses arising from changes in their fair value are recognised directly in the shareholders’ equity, until the financial assets are derecognised or impaired, at which time the cumulative gain or loss previously recognised in the shareholders’ equity is recognised in the income statement. Foreign exchange differences arising from equity investments classified as available-for-sale are also recognised in shareholders’ equity, while foreign exchange differences arising from debt investments are recognised in the income statement. Interest is calculated using the effective interest rate method, and dividends are recognised in the income statement. Loans and receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. Such assets are initially recorded at fair value plus any directly attributable transaction costs and subsequently at amortized cost using the effective interest method. Gains and losses are recognized in income when the loans and receivables are derecognized or impaired, as well as through the amortization process. This category of financial assets includes trade and other receivables. Impairment
The Group assesses periodically whether there is objective evidence that a financial asset or group of financial assets is impaired.
A financial asset or a group of financial assets is impaired if there is objective evidence of impairment as a result of one or more events that occurred after their initial recognition, such as: (i) for equity securities, a significant or prolonged decline in the fair value of the security below its cost, and (ii) for debt securities, when that event (or events) has an impact on the estimated future cash flows of the financial asset or group of financial assets, that can be reliably estimated.
If there is objective evidence that an impairment loss on available-for-sale financial assets has been incurred, the cumulative loss recognised in the shareholders’ equity – measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that financial asset previously recognised in the income statement – is taken to the income statement. If, in a subsequent period, the amount of the impairment loss decreases, the previously recognised impairment loss is reversed through the income statement up to the acquisition cost if the increase is objectively related to an event occurring after the impairment loss was recognised, except in relation to equity instruments, in which case the reversal is recognised in OCI.
Financial liabilities An instrument is classified as a financial liability when it contains a contractual obligation to transfer cash or another financial asset, independently from its legal form. Non-derivatives financial liabilities include Group payables and other payables. The financial liabilities are recognised (i) initially at fair value less transaction costs and (ii) subsequently at amortised cost, using the effective interest rate method.
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(l) Share capital
Ordinary shares Incremental costs directly attributable to the issue of ordinary shares, net of any tax effects, are recognised as a deduction from equity.
(m) Cash and cash equivalent Cash and cash equivalents comprise cash at banks and on hand with a maturity of less than three months from the balance sheet date, which are subject to an insignificant risk of changes in value.
(n) Leases The determination of whether an arrangement is (or contains) a lease is based on the substance of the arrangement at the inception of the lease. The arrangement is, or contains, a lease if fulfilment of the arrangement is dependent on the use of a specific asset or assets and the arrangement conveys a right to use the asset or assets, even if that right is not explicitly specified in an arrangement.
(i) Group as lessee
A lease is classified at the inception date as a finance lease or an operating lease. A lease that transfers substantially all risks and rewards incidental to ownership to the Group is classified as a finance lease. Finance leases are capitalised at the commencement of the lease at the inception date fair value of the leased property or, if lower, at the present value of the minimum lease payments. Lease payments are apportioned between finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are recognised in finance costs in the statement of profit or loss. A leased asset is depreciated over the useful life of the asset. However, if there is no reasonable certainty that the Group will obtain ownership by the end of the lease term, the asset is depreciated over the shorter of the estimated useful life of the asset and the lease term. An operating lease is a lease other than a finance lease. Operating lease payments are recognized as an operating expense in the statement of profit or loss on a straight-line basis over the lease term.
(ii) Group as lessor Leases in which the Group does not transfer substantially all the risks and rewards of ownership of an asset are classified as operating leases. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised over the lease term on the same basis as rental income. Contingent rents are recognised as revenue in the period in which they are earned.
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(o) Provisions
Provisions are recognised when the Group has a legal or constructive obligation, and it is probable that a cost will be incurred as a result of past events and a reasonable estimate can be made of the liability.
Provisions for asset retirement are measured based on current requirements, technology and price levels and the present value is calculated using amounts adjusted for expected future inflation and discounted over the useful economic life of the assets. The liability is recognised (together with a corresponding amount as part of the related property, plant and equipment) once an obligation crystallizes in the period when a reasonable estimate can be made. The effects of changes resulting from revisions to the timing or the amount of the original estimate of the provision are reflected through adjustments to the carrying amount of the related oil and gas property.
4. New standards and interpretations
(i) New and amended standards and interpretations
The Group applied for the first-time certain amendments to the standards, which are effective for annual periods beginning on or after 1 January 2018. The Group has not early adopted any standards, interpretations or amendments that have been issued but are not yet effective.
The nature and the impact of each amendment is described below:
IFRS 9 “Financial Instruments”
IFRS 9 sets out requirements for recognising and measuring financial assets, financial liabilities and certain contracts to buy or sell non financial items. Furthermore, on a prospective basis the standard facilitates use of hedge accounting and results in different income recognition upon the sale of certain investments in securities. IFRS 9 brings together all three aspects of the accounting for financial instruments project: classification and measurement, impairment and hedge accounting. Moreover, the standard provides a single classification and measurement approach for financial assets that reflects the business model in which they are managed and their cash flow characteristics. The Group has applied the new standard in accordance with the transition provisions of IFRS 9. Comparatives have therefore not been restated and adjustments on transition, if any, have been reported in opening retained earnings at 1 January 2018.
The assessment of the Group’s business model was made at the date of the initial application, 1 January 2018 and concerns an assessment of whether contractual cash flows on debt instruments are solely comprised of principal and interest based on facts and circumstances at the date of initial recognition.
The most significant change effecting the Group from a measurement perspective relates to the impairment of financial assets, following the “expected credit loss” model prescribed in the standard. The adoption of IFSR 9 has fundamentally changed the Group’s accounting for impairment losses for financial assets by replacing IAS 39’s incurred loss model with a forward- looking expected credit loss approach. IFRS 9 requires the Group to recognise an allowance for
Consolidated IFRS FS 2018 29 Partex Holding B.V.
expected credit losses for all debt instruments not held at fair value through profit and loss. The Group has assessed the effect of this expected credit loss model on the financial assets as per 1 January 2018 and has concluded the effect to be insignificant.
From a classification perspective the changes are also limited, whereas financial assets classified as loans and receivables under the prior standard (IAS 39), are now classified as debt instruments at amortised costs. In addition, the classification and measurement of cash and cash equivalents and financial liabilities have been largely retained, compared to the prior standard.
IFRS 15 “Revenue from contacts with customers”
IFRS 15 supersedes IAS 11 construction contracts, IAS 18 revenue and related interpretations and it applies with limited exceptions, to all revenue arising from contracts with its customers. IFRS 15 establishes a five-step model to account for revenue arising from contracts with customers and requires that revenue be recognised at an amount that reflects the consideration to which an entity expects to be entitled in exchange for transferring goods or services to a customer.
The group adopted IFRS 15 from 1 January 2018 and applied the “modified retrospective” transition approach to implementation. The Group identified certain minor changes in accounting relating to its revenue from contracts with customers, but the new standard had no material effect on the Group’s net assets as at 1 January 2018 and therefore no transition adjustment is recorded.
(ii) IFRS not yet effective
The IASB has issued IFRS 16 “leases”, which will become effective from financial reporting periods beginning on or after 1 January 2019 and has been adopted by the EU. The Group has not adopted IFRS 16 in these consolidated financial statements and will adopt it from 1 January 2019. There are no other standards and interpretations in issue but not yet adopted that management of the Group anticipate having a material impact on the reported income or net assets of the Group.
IFRS 16 Leases
IFRS 16 introduces a single on-balance lease accounting model for lessees. Under the new standard all lease contracts, with limited exceptions, are recognised in the financial statements by way of a right of use asset representing its right to use the underlying asset and a lease liability representing its obligation to make lease payments. There are optional exemptions for short term leases and leases of low value items. As a lessee, the Group can either apply the standard using a:
1.Retrospective approach; 2. Modified retrospective approach with optional practical expedients.
IFRS 16 replaces existing lease guidance including IAS 17, SIC 15 and SIC 27.
The Group will apply IFRS 16 initially on 1 January 2019, using the modified retrospective approach, which means that the cumulative effect of initially applying the standard is recognised at the date of initial application and there is no restatement of comparative information. In addition, the Group has elected not to reassess the existing population of leases under the new definition and will only apply the new definition for the assessments of contract entered into after the transition date.
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Finally, the Group will also apply the exemption proposed by the standard on lease contracts for which the term ends within 12 months as of the date of transition and lease contracts for which the underlying asset is of low value.
Compared with the existing accounting for operating leases, the standard is expected to have a significant impact on (mainly) the classification of expenditures and consequently the Group cash flow statement.
Currently, several major investments of the Group are in the process of assessing the full impact of the adoption of this standard and as such the Group has not finalised the full assessment of the potential impact on its consolidated financial statements.
5. Revenue, cost of sales and other income The geographic information below analyses the Group’s revenue by the Company’s country of domicile and other countries. In presenting the following information, segment revenue has been based on the geographical location of customers.
2018 2017 USD USD
Brazil 3,600,177 3,434,597 Kazakhstan 53,155,246 41,577,319 Sultanate of Oman 311,281,374 236,723,785 United Arab Emirates 52,936,546 40,113,762
420,973,343 321,849,463
Sales breakdown The sales breakdown (in price and quantity) is as follows: Average 31 December 2018 Quantity price Revenue
(BOE) (USD) (USD)
Sultanate of Oman 4,475,127 69,56 311,281,374 United Arab Emirates 1,116,454 47,41 52,936,546 Kazahkstan 893,826 59.47 53,155,246 Brazil 54,496 66.06 3,600,177 Total for the year 6,539,903 64.37 420,973,343
Consolidated IFRS FS 2018 31 Partex Holding B.V.
Average 31 December 2017 Quantity price Revenue
(BOE) (USD) (USD) Sultanate of Oman 4,573,185 51.76 236,723,785 United Arab Emirates 989,793 40.53 40,113,762 Kazahkstan 916,542 45,36 41,577,319 Brazil 71,073 48.32 3,434,597 Total for the year 6,550,593 49.13 321,849,463
Cost of sales 2018 2017 USD USD
Share in joint oil production costs 60,671,283 63,944,387 Share in joint gas production costs 34,738,805 24,630,926
95,410,088 88,573,313
Other income 2018 2017 USD USD
Secondment and technical services 1,698,787 2,284,123 Other operational gains 342,290 365,207
2,041,077 2,649,330
6. Administrative expenses 2018 2017 USD USD
Employee benefit expenses 9,641,927 10,844,704 Other administrative expenses 9,137,245 3,733,356
18,779,172 14,578,060
Consolidated IFRS FS 2018 32 Partex Holding B.V.
Employee benefit expenses Directors and key management 865,807 802,526 Salaries and wages personnel 6,426,782 1,284,884 Social security charges 1,115,087 1,284,884 Pension charges 295,502 1,000,247 Other personnel costs 938,749 779,155
9,641,927 10,844,704
Headcount 2018 2017 USD USD Directors 2 2 Staff 80 81
82 83
The Group incurred several one-time expenses during this year amounting to approximately USD 5,4 million. These expenses relate to consultancy fees concerning an aborted project to open the Group share capital (through a capital increase financed by a new partner) and subsequent negotiations with the potential partner, as well as a donation to the Government of Oman for the victims of the cyclone Mekunu which hit the country in May 2018.
7. Impairment 2018 2017 USD USD Impairment of concession rights and E&E assets Block 17/06 (Angola) (17,490,000) - Impairment of exploration costs Portugal (Peniche/Algarve) - 487,415 Impairment/ (reversal) of (joint share in) fixed assets in Oman (Block 6) (44,197,000) 11,943,000 Impairment/ (reversal) of (joint share in) fixed assets Oman (Mukhaizna) 1,835,000 2,231,000 Impairment/ (reversal) of (joint share in) fixed assets Abu Dhabi (AGP) 26,662,000 405,000 Impairment/ (reversal) of (joint share in) fixed assets Kazakhstan (Dunga) (1,828,000) (15,017,000) Impairment/(reversal) of (joint share) in fixed assets Brazil 6,400,000 (925,218) Write off of assets in Abu Dhabi (AGP) - 287,660 Impairment of assets on dry wells in Oman (Block 6) (644,060) 151,600 Gain/loss on sales of fixed assets 181,820 (338,902) Gain on asset retirement obligation and asset retirement write off 1,245,723 -
Total impairment losses/(reversals)for the year 27,834,517 775,445
The impairment loss (reversal) on the joint share in fixed assets of the Group was calculated by comparing the Group’s joint venture share in the net book value of the fixed assets with the fair value of the investment as per year end 2018. The recoverable amount of the investments was calculated by discounting the estimated free cash flows generated through the respective investment, considering the period until the end of the concession.
Consolidated IFRS FS 2018 33 Partex Holding B.V.
In order to calculate the free cash flow, the Group used an estimated Brent price projection for 2019 to 2023 which includes the projection of relevant financial institutions and research analyst estimated until 2023. For the year 2019 this implies an estimated average Brent price of USD 67.8 per bbl. For the period after 2024 an average real (nominal) growth rate of the Brent price of 1.65% (3.9%) was considered, which is in line with the latest Energy Information Administration (EIA) publication available from January 2019. The discount rate used for calculating the present value of the cash flows amounts to 10.9% for the Oman joint arrangements of PDO and Mukhaizna (2017:10.4%), 10% for the Abu Dhabi joint arrangement of AGP (2017: 9.9%), 9.7% for the Kazakhstan joint arrangement of Dunga (2017: 10.2%) and 10.6% for the Brazilian joint arrangement of Potiguar (2017:10.8%) respectively. For the first-year fair value calculation of the Begonia field of Block 17/06 in Angola2 was computed using a discount rate of 13.6%. The value in use estimated for each investment as per 31 December 2018 and related sensitivity analysis is as follows: (i) The maximum (minimum) value shows the estimated value in use considering a growth rate in the price scenario of 3% and 0% respectively.
Max. Value Actual Min. Value
MUSD MUSD MUSD PDO 250.2 219.5 185.6 Mukhaizna 14.3 12.2 9.8 Dunga 144.5 141.9 138.8 AGP 50.7 48.3 45.1 Potiguar 10.5 9.1 7.5 Begonia 6.0 5.2 3.3
(ii) Underlying table shows the sensitivity of the estimated values considering a 2% increase/decrease in the discount rate used.
2% decrease Actual 2% increase
USD USD USD PDO 245.5 219.5 198.0 Mukhaizna 13.8 12.2 10.9 Dunga 152.4 141.9 132.4 AGP 52.5 48.3 44.5 Potiguar 10.3 9.1 8.0 Begonia 6.3 5.2 4.9
2 In 2018, the development study, cost estimates and economic results of the Begonia project were completed and, as a result Management considers that technical feasibility and commercial viability of the project have been determined. To be further noted that, the Field Development Plan (FDP) is expected to be submitted to the Angolan National Concessionaire for approval until the end of 2nd quarter of 2019 and the Final Investment Decision (FID) expected in February 2021.
Consolidated IFRS FS 2018 34 Partex Holding B.V.
8. Net finance costs 2018 2017 USD USD
Unwinding of discount abandonment liability - 1,216,482 Interest arising on bank accounts/deposits 194,472 166,541 Profit on disposal of available for sale financial assets - 785,998 Release of withholding tax payable on intercompany interest - 2,132,522
Finance income 194,472 4,301,543
Interest and other financial expenses - (117,648) Withholding taxes on interest (69,820) (46,361) Unwinding of discount abandonment liability (784,477) - Net foreign exchange loss (669,566) (121,776)
Finance costs (1,523,863) (285,785)
Net finance costs recognised in profit or loss (1,329,391) 4,015,758
In 2017, this caption was impacted by non-recurrent items such as: (i) profit related to disposal of available for sale financial assets; (ii) profit related to release of the accumulated withholding tax liability relating to the accumulated interest charged on the loans as a result of the loan conversion exercise executed during the year 2017 for intercompany loans outstanding to equity, within the Brazilian subsidiaries.
9. Income taxes
Income tax recognised in profit or loss 2018 2017 USD USD
Current tax expense (164,250,806) (106,245,042) Movement in deferred tax (6,290,481 ) (26,164,627)
Tax expense recognised in profit and loss (170,541,287 ) (132,409,669)
Deferred tax movement Balance at the beginning of the year (34,657,516) (8,492,889) Recognised in the income statement (6,290,481 ) (26,164,627)
Balance at the end of the year (40,947,997) (34,657,516)
Consolidated IFRS FS 2018 35 Partex Holding B.V.
Deferred taxes
Deferred tax Deferred tax 31 December 2018 31 December 2017 assets liabilities USD USD USD USD
Tax losses carried forward 7,040,684 - 7,040,684 14,041,617 Provision for asset retirement obligation 1,664,669 - 1,664,669 367,464 Provision for obsolete stock 1,952,739 - 1,952,739 1,921,043 Property, Plant and Equipment - (51,606,089 ) (51,606,089 ) (50,987,640)
10,658,092 (51,606,089 ) (40,947,997 ) (34,657,516)
The deferred tax asset/(liability) fully relates to the Kazakhstan subsidiary. Current income tax relates to (income) taxes paid on oil and gas sales incurred following the agreed upon tax payments as stipulated in the individual concession agreements of the Group with the local governments. The majority of the income taxes paid relates to the Government of Oman amounting to USD 155,103,975 (2017: USD 99,065,355) and Abu Dhabi amounting to USD 9,017,373 (2017: USD 6,787,198).
10. Property, plant and equipment
Reconciliation of the carrying amount
Building, Office equipment Vehicles Total furniture and fixtures
USD USD USD USD Cost Balance at 1 January 2017 768,274 1,113,821 579,815 2,461,910 Additions 20,886 151,649 230,400 402,935 Disposals - (54,575) (136,299) (190,874) Effect of movements in exchange rates 86,958 118,397 66,066595 271,421
Balance at 31 December 2017 876,118 1,329,292 739,982 2,945,392
Balance at 1 January 2018 876,118 1,329,292 739,982 2,945,392 Additions 1,540 23,965 110,757 136,262 Disposals (4,355) (36,736) (181,960) (223,051) Effect of movements in exchange rates (32,016) (78,412) (25,545)595 (135,972)
Balance at 31 December 2018 841,288 1,238,110 643,233 2,722,631
Consolidated IFRS FS 2018 36 Partex Holding B.V.
Building, Office equipment Vehicles Total furniture and fixtures
USD USD USD USD Accumulated depreciation and impairment Balance at 1 January 2017 758,247 944,081 383,272 2,085,600 Depreciation / Depletion 9,025 76,044 75,878 160,947 Disposals - (53,668) (107,031) (160,699) Effect of movements in exchange rates 86,972 105,867 42,224 235,063
Balance at 31 December 2017 854,244 1,072,324 394,343 2,320,911
Balance at 1 January 2018 854,244 1,072,324 394,343 2,320,911 Depreciation / Depletion 10,052 98,498 107,490 216,041 Disposals (4,355) (31,379) (170,742) (206,476) Effect of movement in exchange rates (31,900 ) (65,928) (14,826) (112,654)
Balance at 31 December 2018 828,042 1,073,515 316,265 2,217,821
Carrying amounts At 31 December 2017 21,874 256,969 345,638 624,481 At 31 December 2018 13,246 164,595 326,969 504,810
11. Exploration and evaluation assets and Intangible assets
Reconciliation of carrying amount Exploration Concession Software Total and evaluation rights assets USD USD USD USD
Cost Balance at 1 January 2017 63,188,573 126,116,170 1,220,473 190,525,216 Additions 121,319 - 21,290 142,609 Effect of movements in exchange rates 2,037,055 (110,409) 164,013 2,090,659
Balance at 31 December 2017 65,346,947 126,005,761 1,405,776 192,758,484
Balance at 1 January 2018 65,346,947 126,005,761 1,405,776 192,758,484 Additions 178,421 - 36,076 214,497 Disposals (25,147,455) - - (25,147,455) Effect of movements in exchange rates (3,034,145) (1,072,883 ) (66,708) (4,173,736)
Balance at 31 December 2018 37,343,767 124,932,878 1,375,143 163,651,789
Consolidated IFRS FS 2018 37 Partex Holding B.V.
Exploration Concession Software Total and evaluation rights assets USD USD USD USD
Accumulated amortisation and impairment losses Balance at 1 January 2017 46,174,545 84,510,643 1,052,704 131,737,892 Amortization - 2,338,537 96,825 2,435,362 Disposals - - - - Impairment loss/(reversals) 72,049 405,000 - 477,049 Effect of movements in exchange rates 2,034,503 (110,409) 147,300 2,071,394
Balance at 31 December 2017 48,281,097 87,143,771 1,296,829 136,721,697
Balance at 1 January 2018 48,281,097 87,143,771 1,296,829 136,721,697 Amortization - 2,301,721 38,811 2,340,532 Disposals (25,147,455) - - (25,147,455) Impairment loss/(reversals) 10,790,000 (19,962,000) - (9,172,000) Effect of movements in exchange rates (3,034,146 ) (1,072,881 ) (62,646) (4,169,672 )
Balance at 31 December 2018 30,889,496 68,410,611 1,272,994 100,573,102
Carrying amounts At 31 December 2017 17,065,850 38,861,990 108,947 56,036,787 At 31 December 2018 6,454,271 56,522,267 102,149 63,078,687
Exploration and evaluation (E&E) assets includes the capitalized expenditures incurred in Angola Block 17/06, amounting to USD 6,454,721 (2017: 17,065,850). The movements in the year related to: (i) Derecognised E&E assets (USD 25,147,455) related to Portugal and Algeria interests, which were already fully impaired earlier; (ii) Impairment charge (USD 10,790,000) related to unsuccessful exploration activities in Angola Block 17/06. Intangible assets includes concession rights paid for interests in Angola Block 17/06 and in AGP, amounting to USD 19,153,008 and USD 37,369,260, respectively (2017: USD 27,084,004 and USD 11,777,985). The movements in the year related to: (i) Depreciation of the bonus, amounting to USD 2,301,721 (2017: 2,338,537); (ii) Impairment charge of USD 6,700,000 in Angola Block 17/06; (iii) Impairment reversal of USD 26,662,000 in AGP; This amount is off set with an amortisation adjustment recorded on share in O&G assets of AGP, which useful life of the assets were adjusted by AGP following its formal implementation of IFRS during the year.
Consolidated IFRS FS 2018 38 Partex Holding B.V.
12. Oil and Gas properties
Mukhaizna PDO Dunga field AGP PBL Total USD USD USD USD USD USD Cost Balance as at 1 January 2017 92,139,870 926,126,144 281,617,131 53,453,692 15,853,961 1,369,190,797 Additions 5,008,042 71,098,600 9,875,759 1,150,020 39,198 87,171,619 Disposals - (1,795,200) - (343,300) - (2,138,500) Translation adjustments - - - - (237,633) (237,633)
Balance as at 31 December 2017 97,147,912 995,429,544 291,492,890 54,260,412 15,655,526 1,453,986,283
Balance as at 1 January 2018 97,147,912 995,429,544 291,492,890 54,260,412 15,655,526 1,453,986,283 Additions 4,323,316 65,991,320 12,737,340 852,460 994,622 84,899,058 Disposals - (3,004,820) - (277) - (3,005,097) Translation adjustments - - - - (2,260,214 ) (2,260,214 )
Balance as at 31 December 2018 101,471,228 1,058,416,044 304,230,230 55,112,595 14,389,934 1,533,620,031
Acc. amortization and impairment losses Balance as at 1 January 2017 77,064,565 648,197,820 145,853,568 13,148,954 12,455,238 896,720,145 Amortization for the year 5,228,945 52,686,680 10,428,554 4,250,817 740,297 73,335,293 Disposals - (1,522,928) - (55,640) - (1,578,568) Impairment loss 2,231,000 11,943,000 (15,017,000) - (997,267) (1,840,267) Translation adjustment - - - - (173,510) (173,510)
Balance as at 31 December 2017 84,524,510 711,304,572 141,265,122 17,344,131 12,024,757 966,463,092
Balance as at 1 January 2018 84,524,510 711,304,572 141,265,122 17,344,131 12,024,757 966,463,092 Amortization for the year 4,338,684 51,736,840 11,761,740 23,746,241 947,870 92,531,375 Disposals - (1,813,540) - - - (1,813,540) Impairment loss/ (reversals) (1,835,000) 44,197,000 1,828,000 - (6,400,000) 37,790,000 Translation reserve - - - - (1,793,410 ) (1,793,410 )
Balance as at 31 December 2018 87,028,194 805,424,872 154,854,862 41,090,372 234,779,217 1,093,177,517
Carrying amounts Mukhaizna PDO Dunga field AGP PBL Total USD USD USD USD USD USD As at 31 December 2017 12,623,402 284,124,972 150,227,768 36,916,281 3,630,768 487,523,190 As at 31 December 2018 14,443,034 252,991,172 149,375,368 14,022,223 9,610,718 440,442,514
Consolidated IFRS FS 2018 39 Partex Holding B.V.
A significant portion of the recoverable amount of Dunga field is attributed to the residual value related to the repayment of 50% of the total unrecovered capital expenditures at the end of the concession (1st of May 2024), estimated to be around USD 103 million. Management notes that as per the Dunga Production Sharing Agreement (PSA), the Kazakh Party has the right (not the obligation) to acquire such equipment from Contractor for the unrecovered Recoverable Cost of such equipment. This entails the risk of negotiation and “cherry picking” by the Authority.
The Group, with its local partners, already secured a MoU with the local authorities to extend the concession for another 15-year term. This extension is in the final phase of negotiation with the Government of the RoK and is expected to be signed in the coming months. With the extension until 2039, the alternative development plan, which was submitted in October 2016, foresees the full recoverability of the cost pool and a significant increase in the project economics. As such Management considers that the carrying amount will be fully recovered.
The Group has production facilities in Brazil where two fields are operated. The share on PDO, AGP, Dunga and Mukhaizna property, plant and equipment is recorded under the terms of IFRS 11 with their respective proportional share of the values reported by the Company. The Group makes provision for the abandonment of wells (see note 19), dismantling of facilities, installations and to restore the exploration sites which has been capitalized in the corresponding assets, in the accumulated amount (net of depreciation) of USD 35,642,510 (2017: USD 48,270,488).
13. Other Oil and Gas financial assets 2018 2017 USD USD
Pension scheme investments 44,886,260 45,418,480 Housing loans 5,248,180 5,199,040 Deferred staff benefits 3,415,560 2,882,180 Restricted cash 3,364,654 2,830,181 Prepayments and other receivables 1,630,300 1,667,600 Net retirement benefit asset 35,440 -
58,580,394 57,997,481
The maturity of the Oil and Gas financial assets can be classified as follows:
2018 2017 USD USD
Between 6 -12 months 8,133,200 8,815,900 Between 1 to 5 years 32,282,740 33,121,520 After 5 years 18,164,454 16,060,061
58,580,394 57,997,481
Consolidated IFRS FS 2018 40 Partex Holding B.V.
The majority of the amounts relate to pension scheme investments from the Omani pension scheme executed by the joint operation of the Group. A breakdown of the underlying investments held by the Company for this specific purpose is noted below:
Market value Cost 2018 2017 2018 2017 USD USD USD USD
Quoted equity securities - Local (Oman) 2,223,640 2,510,320 2,513,780 2,613,440 - Foreign 25,116,880 27,050,960 22,916,920 16,792,580
Quoted bonds - Local (Oman) 9,060 17,020 9,300 13,200 - Foreign 15,486,240 15,034,140 15,825,880 14,505,540
Investment properties 976,520 607,840 793,820 423,080 Foreign short-term investments 441,120 3,820 441,120 3,820 Cash and bank balances (including short term deposits) 225,880 99,440 225,880 99,440 Fixed income investments (work in progress) 406,920 94,940 406,920 94,940
Total pension scheme investment 44,886,260 45,418,480 43,133,620 34,546,040
The corresponding liability is recorded under the provisions as “staff pension joint operation”. Information about the Group’s exposure to credit and market risks, and fair value measurement, is included in note 22.
14. Investment in joint venture
USD
Balance as at 1 January 2017 4,847,930 Profit for the period 12,848,260 Dividend payments (12,250,400) Other movements (OCI) 16,740 Adjustment alignment accounting policies (5,462,530)
Balance as at 31 December 2017 -
Profit for the period 21,583,920 Other movements (OCI) 152,040 Dividend payments (19,319,369) Adjustment alignment accounting policies (2,416,591 )
Balance as at 31 December 2018 -
Consolidated IFRS FS 2018 41 Partex Holding B.V.
The financial investments fully relate to the equity share of the company in Oman LNG LLC. As per IAS 28, the Group has aligned the accounting policies of OLNG with the group accounting policies and following this has recorded an adjustment on its share in the result of the Company of USD 5,462,530 during the year 2017. Underlying table provides summarised financial information relating to Oman LNG LLC. This is information is presented on Partex Group ownership basis (2%) and reflects adjustments made by the Group in applying the equity method of accounting.
2018 2017 USD USD
Revenue 70,099,960 43,922,180 Operating profit 26,271,940 17,243,760 Profit for the year 22,743,920 14,668,260 Total comprehensive income for the year 22,814,880 14,691,080
2018 2017 USD USD
Current assets 10,854,240 10,259,720 Non-current assets 13,318,580 14,024,540 Current liabilities (10,741,600) (11,632,260) Non-current liabilities (15,381,260 ) (17,670,540)
Net assets (1,950,040) (5,018,540)
15. Oil and Gas receivables and payables 2018 2017 USD USD
Oil and Gas receivables and prepayments 51,006,510 43,764,099 Oil and Gas related taxes receivable 1,227,925 1,804,722
Subtotal Oil and Gas receivables 52,234,435 45,568,821
Oil and gas payables 41,752,897 39,843,972 Oil and Gas taxes payable 7,911,942 5,767,793
Subtotal Oil and Gas payables 49,664,839 45,611,765
Net position Oil and Gas receivables/payables 2,569,596 (42,944)
Consolidated IFRS FS 2018 42 Partex Holding B.V.
Oil and Gas receivables and payables relate to balances receivable from clients and payable for oil and gas which arise from the group’s normal business. Trade receivables relate to the outstanding amount to third parties for seconded services provided. Information about the Group’s exposure to credit and market risks, and fair value measurement, is included in note 22.
16. Inventories 2018 2017 USD USD Raw materials, spares and supplies 13,138,499 14,044,507 Crude oil 111,172 163,613
13,249,671 14,208,120
The Group holds working stores of spare parts. The stocks are held at the lower of cost and market value.
17. Cash and cash equivalents 2018 2017 USD USD Cash on hand 2,693 3,316 Bank balances and short-term deposits 57,627,651 74,697,013
Cash and cash equivalents 57,630,344 74,700,329
Cash and cash equivalents are available on demand.
18. Equity
Share capital Ordinary shares 2018 2017 USD USD
In issue at 1 January 121,410 121,410 Issued for cash - -
In issue at 31 December – fully paid 121,410 121,410
Authorised – par value 1.214 1.214
Consolidated IFRS FS 2018 43 Partex Holding B.V.
Ordinary shares The share capital of Partex Holding B.V. (issued and fully paid as at 31 December 2016) is EUR 100,000 (USD 121,410) divided into 100,000 shares of EUR 1 each.
Nature and purpose of reserves
Translation reserve The translation reserve comprises all foreign currency differences arising from the translation of the financial statements of foreign operations, as well as the effective portion of any foreign currency differences arising from hedges of a net investment in a foreign operation.
Share premium At the end of 2013 the Calouste Gulbenkian Foundation held a loan of USD 556,105,376 for a period of five years starting from 21 December 2012. This loan has been converted to share premium in July 2014. The share premium reserve is not available for distribution to the shareholder.
Consolidated IFRS FS 2018 44 Partex Holding B.V.
OCI accumulated in reserves, net of tax
Attributable to owners of the Company Fair value Translation Actuarial Retained earnings Total reserve reserve gains and
losses
USD USD USD USD USD 2018 Foreign operations – foreign currency translation reserves - (743,618) - - (743,618) Available-for-sale financial assets – recycles through P&L - - - - - OCI movements of equity accounted investees - - - 4,116,700 4,116,700
Total - (743,618 ) - 4,116,700 3,373,082
2017 Foreign operations – foreign currency translation reserves - (915,746) - - (915,746) Available-for-sale financial assets – recycles through P&L (795,554) - - - (795,554) OCI movements of equity accounted investees - - - 16,740 16,740
Total (795,554) (915,746) - 16,740 1,694,560
Consolidated IFRS FS 2018 45 Partex Holding B.V
19. Liabilities
Provisions
2018 2017 USD USD
Staff pension joint operations 44,886,260 49,767,020 Asset retirement obligation 46,695,503 56,198,553 End of service benefits group companies 800,110 873,446 End of service benefits joined operations 2,861,900 2,840,000 Other provisions - 353,237
95,243,773 110,032,256
Staff pension joint operations The staff pension for joint operations relates to the pension obligation for Omani staff employees through Petroleum Development Oman (“PDO”). The Omani staff pension scheme is a defined benefit retirement scheme. The contribution by Omani staff is 7% of their basic salaries plus allowances whilst the contributions made by PDO are on the basis of actuarial valuations. The contributions are used to purchase investments, which are legally held in the name of PDO, on behalf of the pension scheme. As such, the value of these investments has a corresponding liability in relation to the pension obligations to employees. As at 31 December 2018, the fair value of the pension assets amounts to USD 44,886,260, with a corresponding liability in the staff pension for joint operations.
The assumptions used in the calculation of the pension liability were as follows:
2018 2017 Projected unit credit Discount rate 7.3% 6.2% Expected rate of return on assets 7.3% 6.2% Future salary increases 3.0% 3.0% Rate of pension increase 1% 1%
The Scheme exposes the Company to actuarial risks such as investment risk, longevity risk and salary risk.
Consolidated IFRS FS 2018 46 Partex Holding B.V
Investment risk The present value of the defined benefit plan liability is calculated using a discount rate determined by reference to high quality bond yields; if return on plan assets is below this rate, it will create a plan deficit.
Interest risk A decrease in the bond interest rate will increase the plan liability; however, this will be partially offset by an increase in the return on the plan’s debt investments.
Longevity risk The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the plan’s liability.
Salary risk The present value of the defined benefit plan liability is calculated by reference to future salaries of the plan participants. As such, an increase in the salary of the plan participants will increase the plan’s liability.
Significant actuarial assumptions for the determination of the defined obligation are discount rate, expected salary increase and mortality. The sensitivity analyses below have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period, while holding all other assumptions constant.
- If the discount rate is 100 basis points lower (higher), the defined benefit obligation would increase by USD 9.04 million (decrease by USD 6.9 million) approximately. - If the expected salary growth increases (decreases) by 1%, the defined benefit obligation would increase by USD 3.9 million (decrease by USD 3.3 million). - If the life expectancy increases (decreases) by one year for both men and women, the defined benefit obligation would increase by USD 0.7 million (decrease by USD 0.7 million).
In accordance with IAS 19, the Company’s staff pension provision as at 31 December 2018, is analysed as follows:
2018 2017 USD USD
Defined benefit obligation 44,886,260 49,767,020
Consolidated IFRS FS 2018 47 Partex Holding B.V
The amounts recognized in profit and loss are as follows:
2018 2017 USD USD
Cost of current service 3,422,200 3,345,440 Net Interest expense 251,480 511,180
Cost of current service 3,673,680 3,856,620
Less: contribution paid 3,940,960 3,731,960
267,280 124,660
Amounts recognised in other comprehensive income:
2018 2017 USD USD
Return on plan assets (other than net interest) (5,464,580) 3,384,680 Actuarial gain form changes in financial assumptions 10,626,840 - Actuarial gain form changes in experience adjustments (1,045,560) 896,700
4,116,700 4,281,380
The movements in the provision have been the following:
2018 2017 USD USD
Opening balance 49,767,020 46,223,660 Pensions paid (1,996,920) (2,080,620) Interest costs 3,095,980 2,656,600 Cost of current service 3,422,200 3,345,440 Actuarial gains/(losses) (9,941,280) (896,700) Contribution paid by employees 539,260 518,640
Balance at the end of the year 44,886,260 49,767,020
Consolidated IFRS FS 2018 48 Partex Holding B.V
Change in fair value of pension scheme assets during the year is as follows:
2018 2017 USD USD
Opening balance fair value scheme assets 45,418,480 37,718,400 Interest income 2,584,800 2,145,420 Re-measurement (loss)/gain: Return on plan assets (other than net interest) (5,600,320) 3,384,680 Contribution paid by the investment 3,940,960 3,731,960 Contribution paid by the employees 539,260 518,640 Benefits paid (1,996,920) (2,080,620)
Balance at the end of the year 44,886,260 45,418,480
End of service benefits provision The Group, through its subsidiaries and its joint operations (PDO and AGP), has made provision for end of service benefits payable to employees on termination of their contracts in the Middle East. 2018 2017 USD USD
Balance as at 1 January 3,713,446 13,313,261 - Additions/reversal 568,787 (7,664,139) - Amounts paid (596,444) (1,915,732) - Foreign currency effect (24,018) 98,961
Gross liability 3,661,771 3,832,351 Effect of discounting to net present value 239 (118,905)
Net present value as at 31 December 3,662,010 3,713,446
The assumptions for the end of service benefits operated by the subsidiaries of the group were future increase rates for salaries of 2% (2017: 2%), average remaining employment period of 5 years (2017: 5 years) and the discount rate used for discounting was 0.43% (2017: 0.54%).
Defined contribution pension scheme Total contributions paid by the Group for defined contribution pension schemes amount to USD 240,562 for the year 2018 (2017: USD 299,000). This amount is included in the income statement under employee benefit expense (refer to note 6).
Asset retirement provision The Group records its share in the obligation on the abandonment and relinquishment of installations at the end of the concession and/or joint operation and has provided for such cost on
Consolidated IFRS FS 2018 49 Partex Holding B.V
the basis of amortized costs. These liabilities are recognised as part of the related property, plant and equipment, as mentioned in note 12.
The movement of the provision during the year was as follows: 2018 2017 USD USD
At the beginning of the period 56,198,553 58,849,343 Additions/(reversal) (10,487,548) (1,326,703) Amortised cost effect 984,498 (1,097,461) Foreign currency effect - (226,626)
At the end of the period 46,659,503 56,198,553
The discount rate used in 2018 is between 4.75% and 8.5 % (2017: 6.15% and 7.5%). The amount and timing of settlement of this provision is uncertain and dependent on various factors that are not always within management’s control. Reviews of estimated future decommissioning and restoration costs and the discount rate applied are carried out annually. In 2018 there was a decrease in the provision resulting from changes in cost estimates, reported within additions/reversals. Of the asset retirement provision as at 31 December 2018 an estimated USD 3 million is expected to be utilised between one to five years (2017: USD 3 million) and the remainder in later periods.
Other provisions
The movement in other provisions was as follows:
2018 2017 USD USD
At the beginning of the period 353,237 353,237 Payments done (353,237) -
Balance at the end of period - 353,237
Consolidated IFRS FS 2018 50 Partex Holding B.V
20. Other payables-non current 2018 2017 USD USD
Finance lease liabilities 202,735 197,958
202,735 197,958
The group finances part of the acquisition of vehicles through finance lease contracts. The amount payable in coming 12 months relating to these finance lease obligations amounts to approximately USD 93,229 and is recorded as other current account payables. The non-current amount of USD 189,117 is payable between 2-5 years.
21. Trade and other payables Other payables and accrued expenses
2018 2017 USD USD
Tax and social security liabilities 352,931 309,924 Other accrued expenses and other payables 5,575,987 2,216,218
5,928,918 2,526,142
Information about the Group’s exposure to interest rate, foreign currency and liquidity risk is included in note 22.
22. Financial instruments
Financial risk management
The Group has exposure to the following risks arising from financial instruments:
• credit risk; • liquidity risk; • market risk.
Risk management framework The Board of Directors has overall responsibility for the establishment and oversight of the Group’s risk management framework and Risk Management Policies. The Group’s risk management policies are established to identify and analyse the risks faced by the Group, to set appropriate risk limits and controls, and to monitor risks and adherence to limits.
Consolidated IFRS FS 2018 51 Partex Holding B.V
Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Group’s activities. The Group, through its training and management standards and procedures, aims to develop a disciplined and constructive control environment in which all employees understand their roles and obligations. Credit risk Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations and arises principally from the Group’s receivables from customers and financial assets. On an ongoing basis the Group carefully assesses the quality of its counterparties when entering upon and during the business relationship. The carrying amount of financial assets represents the maximum credit exposure. With the vast majority of the Group’s customers a long-term co-operation has been established and no impairment loss has been recognised against these customers since. Management considers and assesses the past experience of working with these respective customers, as well as the continuous screening of the credit risk of the customers going forward as an appropriate measure to adequately manage the credit risk of the Group. As noted in the accounting policies, the Group recognises revenue at a point time when control is transferred to the customer. Payment terms are usually set at 30 days from delivery. In case of a default in payment management assesses the effect on the credit risk considered and if needed takes appropriate action in determining the revised expected credit losses on this specific customer, if any. A default is considered if the 30 days payment term of the customer has not been met. At 31 December 2018, the maximum exposure to credit risk for trade and other receivables by geographic region was as follows:
Oil and gas receivables Carrying amount 2018 2017 2018 2017 USD USD USD USD
Brazil 858,596 899,646 858,596 899,646 Kazakhstan 10,495,343 14,376,288 10,495,343 14,376,288 Japan 26,402,965 19,457,124 26,402,965 19,457,124 Sultanate of Oman 4,776,034 4,347,216 4,776,034 4,347,216 United Arab Emirates 9,701,497 6,488,547 9,701,497 6,488,547
52,234,435 45,568,821 52,234,435 45,568,821
At 31 December 2018, the Group’s most significant customer accounted for USD 26,403 thousand of the trade and other receivables (2017: USD 19,457 thousand). Impairment Based on the subsequent receipt of customer receivables and historical loss data, management estimates that no allowance for expected credit losses on Oil & Gas receivables is considered necessary by the end of the financial year 2018.
Consolidated IFRS FS 2018 52 Partex Holding B.V
Cash and cash equivalents The Group held cash and cash equivalents of USD 57,630 thousand at 31 December 2018 (2017: USD 74,700 thousand). The cash and cash equivalents are held with banks with solid credit ratings: (A-). The far majority of the Group bank accounts is held with Credit Suisse (credit rating A1). A smaller amount is held with a Dutch Bank in the Netherlands (credit rating Aa3) and an insignificant amount is held with Middle East banks regarding its representative offices based in this region (credit rating Baa1 to Baa3). Liquidity risk Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Group’s approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group’s reputation. The liquidity risk is monitored on local as well as Group consolidated level by means of liquidity and cash flow forecasting per relevant entity. Through this, local funding needs are determined and anticipated. Management of the Group is continuously reported and updated on the liquidity status of the Group. The Group believes that it has access to sufficient sources of funding to meet current commitments. Exposure to liquidity risk At 31 December, the exposure to liquidity risk is as follows:
1 year 1-5 years 31 December 2018 Carrying amount More than 5 years or less USD USD USD USD
Other Oil &Gas Financial Assets 58,580,394 8,133,200 32,282,740 18,164,454
Oil & Gas Receivables 52,243,435 52,243,435 - - Trade Receivables 702,376 702,376 - - Other Receivables 1,364,315 1,364,315 - - Cash and Cash Equivalents 57,630,344 57,630,344 - - Pension provisions 44,826,260 2,000,000 8,000,000 34,826,260 Asset retirement obligation 46,695,503 600,000 2,400,000 43,695,503 End of service benefits 3,662,010 - 3,662,010 - Other long term payables 202,735 - 202,735 - Oil & Gas Payables 49,664,839 49,664,839 - - Other payables and accrued 5,928,919 5,928,919 - - expenses
Consolidated IFRS FS 2018 53 Partex Holding B.V
1 year 1-5 years 31 December 2017 Carrying amount More than 5 years or less USD USD USD USD
Other Oil &Gas Financial Assets 57,997,481 7,148,300 34,789,120 16,060,061
Financial Investments - - - - Oil & Gas Receivables 45,568,821 45,568,821 - - Trade Receivables 1,535,376 1,535,376 - - Other Receivables 2,931,357 2,931,357 - - Cash and Cash Equivalents 74,700,329 74,700,329 - - Pension provisions 49,767,020 2,000,000 8,000,000 39,767,020 Asset retirement obligation 56,198,553 616,000 2,646,000 53,118,553 End of service benefits 3,713,446 - 3,713,446 - Other provisions 353,237 353,237 - - Other long term payables 197,958 - 197,958 - Oil & Gas Payables 45,611,765 45,611,765 - - Trade Payables 472,194 472,194 - - Other Payables and Accrued 2,053,948 2,053,948 - - expenses
Market risk Market risk is the risk that changes in market prices – such as foreign exchange rates, interest rates and equity prices – will affect the Group’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return. Currency risk The Group is exposed to currency risk to the extent that there is a mismatch between the currencies in which sales, purchases and borrowings are denominated and the respective functional currencies of Group companies. The functional currencies of Group companies are primarily US Dollars. The currencies in which these transactions are primarily denominated are US Dollars and Euros. Exposure to currency risk The summary of quantitative data about the Group’s exposure to currency risk as reported to the management of the Group is as follows: Foreign exchange risk: The group’s functional currency is the US dollar. As at 31 December 2018 the exposure to foreign currency rate risk is as follows:
Consolidated IFRS FS 2018 54 Partex Holding B.V
31/12/18 USD AED EUR OMR Other
Other Oil &Gas Financial Assets 44,546,500 - (347,160) 8,683,300 5,697,754 Oil & Gas receivables 48,940,889 - - - 3,293,546 Trade Receivables 39,265 - 663,111 - - Other Receivables 152,300 101,472 446,845 43,894 619,804 Cash and Cash Equivalents 46,564,904 602,906 8,606,360 10,163 1,846,011 Other Payables / Provisions - - 202,735 - - Oil & Gas Payables 42,300,466 3,461,819 - - 3,902,554 Trade Payables - - 231,320 - 103 Other Payables and Accrued 176,359 56,424 4,634,879 25,919 803,915 expenses
31/12/17 USD AED EUR OMR Other Other Oil &Gas Financial Assets 52,161,061 - 274,820 3,234,600 2,876,640 Oil & Gas Receivables 42,932,397 - - - 2,636,424 Trade Receivables 39,265 - 1,496,111 - - Other Receivables 3,301,269 143,930 278,369 - - Cash and Cash Equivalents 63,092,327 9,481 9,970,897 8,804 1,618,820 Other Payables / Provisions - - 197,958 - - Oil & Gas Payables 42,043,052 - - - 3,568,713 Trade Payables 5,207 - 461,748 - 5,239 Other Payables and Accrued expenses 320,465 28,019 1,142,185 14,565 548,714
Sensitivity analysis Due to the limited foreign currency outstanding as per year end noted above, the Group’s exposure to foreign currency is considered limited. The following significant exchange rates have been applied during the year:
Average rate Year-end spot rate
2018 2017 2018 2017
USD USD USD USD
EUR 1 1.1809 1.13 1.1469 1.2005
BRL 1 0.2754 0.3134 0.2576 0.3019
OMR 1 2.5975 2.5973 2.5974 2.5971
Consolidated IFRS FS 2018 55 Partex Holding B.V
Exposure to interest rate risk The Group’s exposure to interest rate risk is considered limited as the Group has no outstanding external debt. The interest rate profile of the Group’s interest-bearing financial instruments is as follows:
Carrying amount 2018 2017 USD USD Variable rate instruments Loans and advances - - Cash and cash equivalents 57,630,344 74,700,329 Financial liabilities - -
57,630,344 74,700,329
23. Capital management The Group manages its capital to ensure that it will be able to continue as a going concern while maximising the return to its shareholders through the optimization of debt and equity balance.
24. Fair value of financial assets and liabilities As at 31 December 2018 and 2017 there were no significant differences between the carrying amount and the fair value of the financial assets and liabilities. Cash and cash equivalents: Considering the short-term nature of these financial instruments, carrying value is believed to be a reasonable estimate of its fair value.
Debtors, advances and creditors and other liabilities: Considering the short-term nature of these assets and liabilities, the carrying value is believed to be a reasonable estimate of its fair value. Advances and creditors and other non-current liabilities: Considering that these assets and liabilities are booked at their present value, the carrying value is believed to be a reasonable estimate of their fair value.
Consolidated IFRS FS 2018 56 Partex Holding B.V
25. Commitments and contingencies (i) Guarantees Banks, through the shareholder of the Group, have given performance guarantees to the value of USD nil (2017: USD 612,625) that the group will carry out undertakings given in relation to Angolan and Portuguese concessions held.
(ii) Commitments Contractual obligations related to leases can be set forth as follows:
Due in 1 year Due in 1-5 years Due in more than 5 31 December 2018 Total commitment or less years USD USD USD USD Financial lease obligation 295,964 93,229 202,735 - Operational lease liabilities 552,458 447,091 105,367 -
Due in 1 year Due in 1-5 years Due in more than 5 31 December 2017 Total commitment or less years USD USD USD USD Financial lease obligations 304,676 106,721 197,955 - Operational lease liabilities 528,782 429,071 99,711 -
Total operational lease expenses for the year amounted to USD 523,596 (2017: USD 557,621). Capital expenditures are considered to be committed when the project has received the appropriate level of internal management approval. Estimated share in capital expenditure of the Group in its joint operations for the following year amounts to USD 102 million approximately. For the 5 years following this amount to USD 537 million approximately.
(iii) Contingent liabilities Currently there are no civil actions and administrative and arbitral and other judicial proceedings outstanding.
26. Related parties
Parent The Company is a wholly owned subsidiary of the Fundaçao Calouste Gulbenkian, a charitable foundation established under the laws of Portugal.
Consolidated IFRS FS 2018 57 Partex Holding B.V
Transactions with key management personnel
Key management personnel compensation Key management personnel compensation comprises the following:
2018 2017 USD USD Salaries and other short term benefits 1,691,796 1,569,523 Post-employment benefits 85,055 81,392
1,776,851 1,650,915
Compensation of the Group’s key management personnel includes salaries, accrued performance bonuses and contributions to a post-employment defined benefit plan.
Key management personnel transactions None of the directors of the Company are holding any interest in the Company’s share capital.
Other related party transactions
Transaction values for the Balance outstanding
year ended 31 December as at 31 December
2018 2017 2018 2017
USD USD USD USD
Dividend to shareholder 90,000,000 - - -
Payables to shareholder - - - -
All outstanding balances with these related parties are priced on an arm’s length basis.
27. Subsequent events There were no subsequent events identified which could have a material effect on the financial statements of the Group. However, after an aborted attempt to open the share capital of Partex Holding BV (through a capital increase financed by a new partner), the sole shareholder decided to divest the full share held in the Group. There is a competitive process going on, and the sole shareholder is confident of being able to complete the deal during 2019.
Consolidated IFRS FS 2018 58 Partex Holding B.V
Amsterdam, 15 April 2019
The Board of Directors: The Supervisory Board: A.J. Da Costa Silva I.M. De Lucena Vasconcelos Cruz de Almeida Mota
M.C.E. van Gendt J.M. Trindade Neves Adelino
E. Carrega Marçal Grilo
J.F.B. Sampaio
M.S. Essayan
M.T. Pinto Basto Gouveia
E.R. Da Veiga Peixoto Vilar
G.V. Pereira de Oliveira Martins
P. Lopo de Carvalho Norton de Matos
Consolidated IFRS FS 2018 59 Partex Holding B.V
Appendix 1 – UNAUDITED
Payments to Governments
According to the Directive 2013/34/EU of the European Parliament, extractive companies have to report payments made to Governments linked to the activity. In this list, we have excluded corporate income tax paid for services income (in Portugal, Liechtenstein and the Netherlands). All values are presented in USD and represent only the share of Partex Group in all operations.
Payments to Governments 2018
Country Beneficiary Operation Production Taxes Royalties Bonuses Fees Infrastructure Total Entitlement Improvements Abu Dhabi National Government GASCO 27,661,942 9,017,373 0 0 0 0 36,679,315 Total Abu Dhabi 27,661,942 9,017,373 0 0 0 0 36,679,315
Angola National Government Block 17/06 0 0 0 0 0 0 0 Total Angola 0 0 0 0 0 0 0
Brazil National Government BM-SEAL-9 17,960 17,960 Brazil Local Authorities BM-SEAL-9 0 Brazil National Government Colibri/Cardeal PBL 491,665 338,250 829,915 Brazil Regional Authorities Colibri/Cardeal PBL 15,876 15,876 Brazil Local Authorities Colibri/Cardeal PBL 81,581 81,581 Brazil National Government Colibri/Cardeal PBOPL 23,423 23,423 Brazil Regional Authorities Colibri/Cardeal PBOPL 0 Brazil Local Authorities Colibri/Cardeal PBOPL 2,102 2,102 Total Brazil 0 632,608 338,250 0 0 0 970,857
Kazakhstan National Government Dunga 0 0 0 0 0 0 0 Total Kazakhstan 0 0 0 0 0 0 0
Oman National Government PDO 0 156,878,789 0 0 0 0 156,878,789 Oman National Government Mukhaizna 0 13,000,221 0 0 5,000 0 13,005,221 Oman National Government OLNG 0 4,135,560 0 0 0 0 4,135,560 Total Oman 0 174,014,570 0 0 5,000 0 174,019,570
TOTAL 27,661,942 183,664,551 338,250 0 5,000 0 211,669,743
Consolidated IFRS FS 2018 60