OIL TERMINAL SA Economic Direction No. 834/ Supervised by, Board of Directors Chairman Toma Bogdan Costreie

Transcription

1 Submitted to be analyzed and supervised by the Board of Directors of and to be approved by Shareholders General Ordinary Assembly of 18.(19) OIL TERMINAL SA Economic Direction No. 834/ Supervised by, Board of Directors Chairman Toma Bogdan Costreie SUBSTANTIATION NOTE regarding the approval by SHAREHOLDERS GENERAL ORDINARY ASSEMBLY of proposal for REVENUES AND EXPENSES BUDGET FOR 2017 The revenues and expenses budget for 2017 represents for OIL TERMINAL SA Constanta the main planning instrument both for financial results and for the necessary funds, following the internal financial balance (terminal operational activity financing, the necessary liquidities provision to effect the investments, repairs, maintenance works, payment of obligations to employees, deliverers, state budget, social insurance budget and social protection, banks, shareholders and other third parties). Substantiation of indicators in the proposal of Budget of revenues and expenses for 2017 and of estimations for the period had as basis the prudence and of activity continuity principles, in economic efficiency terms in the financing resources dimension necessary for the entire activity. When issuing the Budget of revenues and expenses for 2017, the followings were taken in view: Government salary policy for 2017, provided in art. 59 of LAAW NO.6/ , State budget law for 2017 Provisions of Government Ordinance no.26/2013 regarding the enhance of financial discipline on the economic operators level, in which the state or the administrativeterritorial entities are unique or major shareholders or directly or indirectly own a major participation Provisions of Public Finances Ministry Order no.20/2016 regarding the budget of revenues and expenses format and structure and its substantiation annexes, Annexes no.1-5 approval Provisions of labour collective contract in force Supplies physical program, approved for 2017, by the Board of Directors decision no.24/ Preliminary economic financial results on Profit distribution for 2017 according to Government Ordinance no.64/2001 regarding the distribution of profit in national companies, national and commercial companies with full or state capital, and in independent administrations, with further alterations and additions Legislation and legal regulations applicable to the budget of revenues and expennses issue 1

2 Proposal for Budget of revenues and Expenses for 2017 (Annex no.1) Economic-financial indicators provided in Annex no.1 of Budget of revenues and Expenses for 2017 is as follows: I. TOTAL REVENUES The revenues related to the main activity (supplied services) represent revenues arisen from liquid petroleum products loading/discharging operations, their movement and storage. The company also achieves revenues from other services: hires, rail shuntings by own means on some clients request, various laboratory determinations. For 2017, the total revenues are estimated in an amount of 156,810 thousand lei, decreasing by 3.4% comparing to the preliminary level on , from which revenues from operation in an amount of 156,040 thousand lei and financial revenues in an amount of 770 thousand lei. I1 Revenues from operation are estimated in an amount of 156,040 thousand lei, decreasing by 3.3% comparing to preliminary 2016 and represent 99.5% of total revenues. When determining the revenues from operation, the followings were taken into account: tariffs approved by National Agency for Mineral Resources no.251/ , the supplies physical program for 2017 (namely 5,735 thousand tons), commercial contracts concluded in 2016, available in 2017, preliminary/extended commercial contracts for 2017, the preliminary achievements of the previous period, according to reports sent to the Public Finances Ministry (S1001) The revenues substantiation structure and way are as follows: 1.1 Revenues from the sold output estimated for 2017 are in an amount of 155,500 thousand lei, in the following structure: Revenues from sold output Piece Preliminary 2016 Revenues from sold output total, from which: Thousan d lei Proposal Differn Budget of ce revenues and Budget of expenses revenues abd 2017/ expenses 2017 preliminary , ,500-5, % From products sale From the supplied services From hires From revenues thousand lei thousand lei thousand lei thousand lei 1,017 2, % 158, ,183-6, % % % Revenues from products sale estimated in an amount of 2,426 thousand lei, increasing by 2.4 times comparing to the preliminary level of 2016, represent revenues to be achieved further the old iron waste revaluation arisen from fixed assets out of inventory and slams (oil residues arisen from technological process) 2

3 Revenues from services supplied estimated in an amount of 152,183 thousand lei, represent the revenues related to the main activity, being in a strong connection to the service supplies physical plan, in decline by 3.4% in 2017, comparing to the level achieved on (namely 5,935 thousand tons). Revenues from receivables and hires are estimated in an amount of 455 thousand lei, on the preliminary The revenues from hires arise from hire/use of some areas, fields, fixed assets; revenues from re supply of utilities to physical and legal persons. Other revenues from operation are settled in an amount of 500 thousand lei, in decrease by 34.9% comparing to preliminary 2016 from which: Revenues from fines and penalties in an amount of 30 thousand lei; Other revenues in an amount of 470 thousand lei, decreasing by 18.4% than the preliminary 2016, representing rail shuntings achieved in own rail lines system further some clients request to effect such supplies. I.2. Financial revenues were settled in an amount of 770 thousand lei decreasing by 10% comparing to the preliminary II. TOTAL EXPENSES Total expenses volume and structure of the proposal for Budget of revenues and expenses for 2017 were settled according to the planned total revenues level to be achieved and to the value level of the plans/programs issued in the company. Total expenses were also dimensioned taking into account the followings: Inflation estimated index (1.4% annual average and 1.9% on ) Evolution of estimated exchange rates, namely exchange rate lei/euro for 2017, namely 4.46 lei/euro Influence of regulated tariffs for utilities (water, gas, energy) Annual plan of goods, works, services acquisition for 2017 activity, according to their real payment possibilities and to the necessities reports sent by the company departments Investments and equipments plan for 2017, according to their financial legal sources Normative acts in force, Law no.227/2015 regarding the Fiscal code, State budget law for 2017 for the costs such regulated: a) social expenses provided in art. 25 of Law no.227/2015 share 5%, b) rates regarding social protection in the employer responsibility, from which: - social insurances contribution in a share of 15.8% - unemployment insurances contribution in share of 0.5% - health social insurances contribution in share of 5.2% - special funds (contribution for holidays and indemnities of 0.85%; labor accidents contribution up to the risk class of in a share of 0.371%; contribution to the guarantee fund for the salary royalties 0.25%) c) oil royalty in a share of 10% due to state budget d) protocol expenses in the deductibility provided by Fiscal code report regarding the tangible and intangible assets estimation on (for amortization costs) labor contract provisions available in period regarding the salary expenses, bonuses, social actions expenses included previous achievements according to reports submitted to Ministry of public finances II.1 Expenses from operation in an amount of 149,791 thousand lei, representing 98.7% of the total expenses, increasing by 6.3% comparing to the preliminary achievements on 3

4 The expenses from operation contain the expenses dedicated to the safe operation of oil terminal. The main expenses from operation categories are the followings: Expenses regarding stocks are according to the Acquisitions plan to provide the resources necessary for maintenance, safety assurance, environment safety, facilities security, for auxiliary and administrative activities, being planned in an amount of 11,422 thousand lei, decreasing by 10% than the preliminary on Expenses regarding third parties services supplies are settled in an amount of 14,365 thousand lei, in increase by 8.7% comparing to the preliminary on Expenses of taxations, taxes and similar expenses, are provided in decline by 14.3% than the preliminary on further the taxation elimination on special constructions. The percentage is owned by the oil royalty expense (73%) being calculated up to the gross revenues level achieved on operation infrastructure related to state public domain. The rest of 27% is represented by different taxes and taxations due to state budget and local one: taxation on field, buildings, constructions, different taxes. Staff expenses planned for 2017 are in a total amount of 74,030 thousand lei, increasing by 14.3% than the preliminary Salaries expenses are planned on the level of 47,294 thousand lei, and bonuses expenses (12,851 thousand lei) present the following structure: Social expenses (18.4% from bonuses total) are settled in an amount of 5% from the planned level of salaries expenses according to art.25 of Law no.227/2015 regarding Fiscal code. Meal tickets (23.2% from bonuses total) given according to Law no. 142/1998 regarding the meals tickets, their nominal value taken into consideration being of 15 lei/ticket. Expenses regarding the employees participation to the profit of the previous year are estimated in an amount of 1,583 thousand lei, representing 10% of the preliminary net profit of 2016, distributed by complying the provisions of GO no. 64/2001 regarding the profit distribution in state major capital companies. Other expenses according to Labor collective contract (46% from bonuses total) being settled according to Labor collective contract provisions, registered in Constanta Labor teritorial inspectorate under no. 2029/ , available in period We mention that, for the Budget of revenues abd expenses substantion for 2017, the provisions of art.59, paragraph (7) of Law no.6/2017 of state budget for 2017, namely the following terms cumulative achievement were taken into consideration: a) the company does not record gross consecutive loss in the last 2 years b) the company complies with the outstanding payments level approved by the budget of revenues and expenses for 2016 c) the company does not plan outstanding payments and gross loss by the budget of revenues and expenses in 2017 Expenses related to the mandate contract and other management and control entities are planned in an amount of 926 thousand lei, increasing by 1.9 times than the preliminary Other operation expenses (representing regulations, provisions, amortization, compensations given to third parties further some final decisions, unfavourable for the company), are settled in a total amount of 16,517 thousand lei, increasing by 24.9% than the preliminary II.2 Financial expenses are settled in an amount of 2,019 thousand lei, increasing by 10.9% than the preliminary 2016, from which: expenses regarding interests are estimated in an amount of 1,019 thousand leo and expenses from exchange rate in an amount of 1,000 thousand lei. II. GROSS RESULT 4

5 On , the company planned a gross profit in an amount of 5,000 thousand. IV. TAXATION ON PROFIT Profit taxation expenses for 2017 were estimated in an amount of 1,811 thousand lei, decreasing by 55.3% than the preliminary level on , being settled according to Law no.227/2015 regarding Fiscal code. The fiscally undeductible expenses (representing representing regulations, provisions, amortization, the salaries participation to profit provision for 2017 included, other undeductible expenses provided by Fiscal code) were estimated in an amount of 22,333 thousand lei, namely increasing by 2.5 times than the preliminary level for 2016, and the untaxable revenues were estimated in an amount of 15,436 thousand lei, namely increasing by 4.7 times comparing to the preliminary level on Elements Preliminary 2015 Gross profit 5,000 Legal frreserve Nontaxable revenues -15,436 Fiscally undeductible expenses, from which : +22,333 Regulations and provisions expenses 7,557 Reserves from fixed assets reevaluation 6,126 Other undeductible expenses 8,600 Sponsorships expenses 50 Taxable profit 11,361 Profit taxation 16% 1,861 Profit taxation after the sponsorshipexpenses deduction 1,811 V. ACCOUNTANT PROFIT AFTER THE PROFIT TAXATION DEDUCTION The net profit planned for 2017 is in an amount of 3,189 thousand lei, being distributed according to GO no.64/2001 regarding the profit distribution in national companies, national and commercial companies with full or major state capital, and the independent administrations, with further alterations and additions. The net profit planned for 2017 is proposed to be distributed as follows: a. minimum 50% dividends due to shareholders b. 10% employees participation to profit c. 40% own financing source VI-VII REVENUES AND EXPENSES FROM EUROPEAN FUNDS The investments project planned for 2017 are in an amount of 25,384 thousand lei, increasing by 73.2% according to Annex no.4 of the Budget of revenues and expenses and have as financing source amortization (12,384 thousand lei) and internal bank credits (13,000 thousand lei). IX. EXPENSES FOR INVESTMENTS The investments program was settled taking into account the Investments Plan approved for 2017, annex to oil agreement concluded with the National Agency for Mineral Resources, and 5

6 the provisions of investments plan related to the company. The main investments works for 2017: Thousand lei Objective name Program 2016 Total general (thousand lei), from which: Investments going on, from which: a) for goods in the company private propriety : Gas oil bunkerage flowmeter Skids jetties 70 and 75 - project Upgrading of gas oil flowmeter Port Storage Farm Overgrounded laying of network Port Storage Farm -South Storage Farm (execution project) 134 New rail line project (future line 5) for South Storage Farm platform Sud SF b) for goods of state public domain UpgradingT30 35 Upgrading of gas oil flowmeter Port Storage Farm Upgrading R34/S New investments, from which: a) for goods in the company private propriety: 665 Commun metallic platform L2 si L3 Rail platform South Storage Farm (project + execution) 665 b) for goods in the company private propriety: Overgrounded laying of network Port Storage Farm (T1_T2) Investments effected to existent tangible assets (upgradings), from which: a for goods in the company private propriety: RepairR23/P - project b) for goods in the company private propriety Upgrading R34/S Equipments (other tangible assets acquisitions) Reimbursements of rates related to investments credits, from which: a) - internal b)- external X. SUBSTANTATION DATA Outstanding payments and receivables The outstanding payments level planned in Budget of revenues and expenses is zero. The outstanding payments level estimated for 2017 is 316 thousand lei, on the preliminary level on XI. PERFORMANCE INDICATORS AND CRITERIA 6

7 The degree of performance annual overall indicator achievement for 2017 was determined according to performance indicators, to each of them percentage, to planned data in the budget for 2017, being 100%. Percenta Proposal Performance indicarors Performance criteria Piece No. ge year Turnover Turnover maximizing over planned level by services supplies diversification Th. lei 10% Gross profit Operational expenses diminishing Th. lei 10% Compliance in the level approved in Outstanding payments Budget of revenues and expenses 2017 Th. lei 10% 0 4 Compliance in the level approved in Th. Outstanding receivables Budget of revenues and expenses 2017 lei 10% 316 Th.lei/ 5 Work productivity in Increase of work productivity in value value units units pers 10% Total expenses for 1000 lei total revenues Compliance in the level approved in Budget of revenues and expenses 2017 lei 10% EBITDA Exceeding of the level approved in Budget of revenues and expenses 2017 Th. lei 20% Overall specific technological consumption (crude oil) Investments annual value plan achievement Specific consumption reduction % 10% 95.0 Investments works completion in planned terms Th. lei 10% ESTIMATIONS OF THE BUDGET OF REVENUES AND EXPENSES FOR THE PERIOD For the prognosis issue for , the hypotheses according to which the budget for 2017 was settled, the request and market terms were taken into account. In view to settle the budget estimations for period in Annex no.1, it was taken into account the followings: the prognosed inflation index for period supplied by the National Prognosis Commission tariffs approved by National Agency for Mineral Resources no.251/ and by internal decisions provisions of labor collective contract available until legislation and regulations applicable in force supplies physical program level estimated for the BVC proposal for Gross profit estimated for is 5,065 th.lei, namely 5,160 th.lei 7

8 Net profit related to period will be distributed according to provisions of GD no.64/2001 regarding the profit distribution in national companies, national and commercial companies with full or major state capital, and the independent administrations, with further alterations and additions. We mention that, the estimated indicators for are indicative and are not final ones regarding the company performance for those years, they will be updated according to legislation in force, when budgets of revenues and expenses are issued for each of these years. Budget of revenues and expenses project for 2017 was under the administration financial control according to GD no.1551/2012 for the Methodological Regulations approval regarding the administration financial control organization and exercising. Budget of revenues and expenses project for 2017 was supervised by Decision no.22/ of the Board of Directors. According to art.12 paragraph (3) letter f of the company Constitutive act, we submit to Shareholders General Ordinary Assembly approval the Budget of revenues and expenses proposal for 2017 and estimation for period together with annex no.1. General Director, Sorin CIUTUREANU Economic Director, Adriana Frangu Chief of Financial-Budgets Dept., Daniela Moldoveanu 8