Effective crisis management and preparation for future challenges - MOL's Articles of Association amended

MOL Plc held its annual general meeting today, 23 April 2009, in Budapest. The shareholders present accepted the Board of Directors’ report on business operations for 2008 and approved the consolidated 2008 annual reports drawn up according to IFRS as required by accounting law. The AGM has also made significant decisions to allow for effective protection against stealth attempts to acquire the company.

The AGM has listened to, and by a large majority accepted, the Board of Directors’ report following a hectic 2008 fiscal year which was laden with challenges. The credit crunch, leading to a global recession, had a negative effect on upstream results through lower oil prices and on refinery results through inventory holding losses. Discounting one time effects, the results of MOL Group were favorable during FY 2008 due to sound earlier decisions and former investments. The financial position of MOL Plc is stable (with access to financial headroom of EUR 1.5 bn of undrawn credit facilities and an EBITDA index under 2 after the INA transaction in 2008) and the valid decisions, together with conservative planning, has put MOL in a better position than its competitors to endure the current recession. Its high complexity refineries enable MOL to endure better periods of depressed margins than its competitors with simpler processing operations.

The report of the Board of Directors noted that MOL is among those companies that reacted immediately to the first signs of the crisis and adjusted its operational activities to cope with the increasingly difficult environment. In October 2008, MOL implemented a range of cost reduction measures to extend its leadership in efficiency, the benefits of which were reflected as early as the Q4 2008 results.

One of the most important business events of 2008 was that by the largest ever transaction in the company’s history (EUR 873 mn), MOL became the biggest shareholder of INA (47.16%) at the end of the year. Regarding this, the Board of Directors emphasized that MOL – by becoming the biggest shareholder of the Croatian national oil and gas company, INA – is positioned to deliver superior returns to its shareholders through improving efficiency and developing INA’s operational activities. MOL has outstanding operational efficiency in both of its key businesses and the new Shareholders' Agreement creates the potential for INA to deliver significant growth in revenues and profitability through improving efficiency.

The AGM approved several motions affecting Board composition. The mandates, due to expire on 28th April, 2009, of the members of the Board of Directors of MOL Plc., Dr. Sándor Csányi (vice-chairman) and Dr. Miklós Dobák, were extended by five years until 29th April, 2014. According to the request of the Workers’ Council, the AGM dismissed János Major from his position as employee member of the Supervisory Board from May 1, 2009 and has elected József Kohán as employee member of the Supervisory Board from May 1, 2009 to October 11, 2012.

According to the proposal of the Board of Directors, the AGM has amended several articles of the Company’s Act, inter alia to protect against possible stealth attempts to acquire the company. The mandate to purchase the company’s own shares and to increase the registered capital provides greater flexibility to the Company in the changing business environment.

After the meeting, MOL’s Chairman, Mr Zsolt Hernádi said, “The approval of the items on the agenda by the shareholders at today’s meeting puts the company in a new position to defend itself against stealth acquisitions and to maintain financial flexibility. The harmonization and development of the operations of MOL and INA, together with the efficiency improvement measures provide a stable foundation to allow MOL Group to come out of the current global crisis stronger than its competitors.”