SNGN Romgaz : Auditor Report – H 2 2020 Contracts

Societatea Naţională de Gaze Naturale Romgaz S.A. - Mediaş - România

CURRENT REPORT

In compliance with Law no. 24/2017 regarding Issuers of Financial Instruments and Market Operations

Report date: January 29, 2020

Company name: Societatea Nationala de Gaze Naturale ROMGAZ S.A.

Address: Medias, 4 Constantin I. Motas Square, Sibiu County - Romania, 551130

Phone/fax no: 004-0374-401020 /004-0269-846901

Fiscal Code: RO14056826

LEI Code: 2549009R7KJ38D9RW354

Trade Register registration number: J32/392/2001

Subscribed and paid in share capital: 385,422,400 RON

Regulated market where the issued securities are traded: Bucharest Stock Exchange (BVB),

London Stock Exchange (LSE)

Significant event to be reported:

• Publication of the Auditor's Report according to art. 923 from Law no. 24/2017 regarding the transactions reported in the 2nd Semester of 2020

In compliance with art. 923 paragraph 5 and 7 from Law no. 24/2017, S.N.G.N. ROMGAZ S.A. submits for publication the Independent Limited Assurance Report on the information included in the current and supplementary reports issued by the Company in accordance with the requirements of Law 24/2017, with all subsequent changes and clarifications, and with the provisions FSA Regulation no. 5/2018 during 2nd Semester of 2020.

The report is also available on company's website www.romgaz.ro- Investor Relations - News and events - Current Reports - Contracts.

For Chief Executive Officer,

Daniel Corneliu PENA

Capital social: 385.422.400 lei

CIF: RO 14056826

Nr. Ord.reg.com/an : J32/392/2001

RO08 RNCB 0231 0195 2533 0001 - BCR Mediaş RO12 BRDE 330S V024 6190 3300 - BRD Mediaş

S.N.G.N. Romgaz S.A. 551130, Piața C.I. Motaş, nr.4 Mediaş, jud. Sibiu - România Telefon [phone] Fax [phone]E-mail [e-mail] www.romgaz.ro

Ernst & Young Assurance Services SRL	Tel: [phone]
Bucharest Tower Center Building, 22nd Floor	Fax: [phone]
15-17 Ion Mihalache Blvd., Sector 1	[e-mail]
011171 Bucharest, Romania	ey.com

Independent Limited Assurance Report on the information included in the current reports issued by S.N.G.N. Romgaz S.A.`in accordance with requirements of Law 24/2017, with all subsequent changes and clarifications, and with the provisions FSA Regulation no. 5/2018

To the Board of Directors of S.N.G.N. Romgaz S.A.

We were engaged by S.N.G.N. Romgaz S.A. (hereinafter "the Company'') to report based on the requirements of Law 24/2017 for issuers of financial instruments and market operations, with all subsequent changes and clarifications (hereinafter referred to as "Law 24/2017") on the information included in the attached current and supplementary reports (hereinafter ''Reporting Schedules'') dated 21 July 2020, 28 July 2020, 30 July 2020, 04 August 2020, 13 August 2020, 25 August 2020, 18 September 2020 and 9 October 2020, that have been prepared by the Company in accordance with the requirements of article 923 from Law 24/2017 and with the provisions of Regulation no. 5/2018 of Financial Supervisory Authority ("FSA") as reported to Financial Supervisory Authority ("FSA") and to Bucharest Stock Exchange ("BVB") for the period 1 July 2020 - 31 December 2020, in the form of a limited assurance conclusion.

Specific Purpose

Our report is intended solely for the purpose specified in the first paragraph above and for the Company, BVB and FSA information and will not be used for any other purpose. Our report must not be considered appropriate for use by any other party willing to rely on our work, other than the Company for any purpose and in any context.

Any party other than the Company who obtains access to our report or a copy of it and chooses to rely on it (or part of it) will do so taking their own responsibility. We performed our engagement to be able to report those matters that we must report in a limited assurance report, and not for any other purposes. The current report refers only to the Reporting Schedules and should not be associated with the Company's financial statements or other reports of the Company, individually or taken as a whole.

Management's Responsibilities

The Company's management is responsible for the preparation of the Reporting Schedules and performing the transactions reported in accordance with the requirements of the Law 24/2017 and of FSA Regulation no. 5/2018, with subsequent changes and clarifications. In particular, the Company's management is responsible for internal controls being designed, implemented and maintained to prevent the preparation of the Reporting Schedules from being materially misstated, due to fraud or error.

In addition, the Company's management is responsible for ensuring that the supporting documents underlying the preparation of the current Reporting Schedules, as well as the evidence provided to the auditor is complete, accurate and justified.

The English version of the limited assurance report on the information included in the current reports issued by the Company in accordance with requirements of Law 24/2017 (Article 82) and Regulation no. 5/2018 represents a translation of the original limited assurance report issued in Romanian language. The Romanian language version is the official version.

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Auditor's Responsibilities

We conducted our limited assurance engagement in accordance with International Assurance Standards, particularly ISAE 3000 (revised) "International Standard on Assurance Engagements Other than Audits or Reviews of Historical Financial Information". These standards require that we comply with ethical standards and plan and perform our assurance engagement to obtain limited assurance about the Reporting Schedules.

We apply International Standard on Quality Control 1 (ISQC 1), and accordingly, we maintain a robust system of quality control, including policies and procedures documenting compliance with relevant ethical and professional standards and requirements from the applicable laws or regulations.

We comply with the independence and other ethical requirements of the International Code of Ethics for Professional Accountants (including International Independence Standards) as issued by the International Ethics Standards Board for Accountants ("IESBA Code"), which establishes the fundamental principles of integrity, objectivity, professional competence and due care, confidentiality and professional behavior.

The procedures selected depend on the auditor's judgment and our understanding of the transactions included in the Reporting Schedules and of other circumstances of the engagement, as well as our consideration of areas where material misstatements may occur. In obtaining an understanding of the reported transactions included in the Reporting Schedules, we considered the process applied by the Company to conclude the transactions and to prepare and present the Reporting Schedules in accordance with the requirements of Law 24/2017 and FSA Regulation no. 5/2018 in order to design audit procedures that are appropriate in these circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control related to concluding the reported transactions or preparation and presentation of the attached Reporting Schedules.

The procedures include, in particular, inquiry of the personnel responsible for financial reporting and risk management and additional procedures aimed at obtaining evidence about the information included in the Reporting Schedules.

The nature, timing and extent of procedures performed in a limited assurance engagement is limited compared with that necessary in a reasonable assurance engagement. Consequently, the level of assurance obtained in a limited assurance engagement is considerably lower as compared to the one obtained in a reasonable assurance engagement.

In respect of the Reporting Schedules of the Company, in order to assess correctness and justification of the transactions reported, we have performed the following procedures:

1. We have obtained the attached Reporting Schedules from the Company for the current period and the detail of the transactions included in these Reporting Schedules.
2. We observed if the approving persons of the Reporting Schedules are the authorised representatives of the Company and we have requested the authorized signatures schedule.

The English version of the limited assurance report on the information included in the current reports issued by the Company in accordance with requirements of Law 24/2017 (Article 92^3) and Regulation no. 5/2018 represents a translation of the original limited assurance report issued in Romanian language. The Romanian language version is the official version.

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1. For the transactions included in the Reporting Schedules, selected on a sample basis, we have considered if the details included of the Reporting Schedules are consistent, in all material respects, with information as per signed contracts/contractual documentation presented to us and that the presented documents have been signed by representatives of the Company that are indicated in the authorized signature schedule provided to us. As applicable, in performing our procedures we have compared information included in the Reporting Schedules to the contract/ contractual documentation for consistency of details on: the parties which signed the supporting documentation; the date when documentation was signed and its nature; the description of the type of goods/services as indicated in the documentation; the actual or estimated total value of the contract/ contractual documentation, and, as applicable, the guarantees constituted and the stipulated penalties, the terms and the method of payment; as well as the related contractual conditions.
2. For the transactions selected on a sample basis, we have compared details disclosed in the attached Reporting Schedules for consistency with the information obtained by us based on the inquiries made to the management and other responsible personnel within the Company and based on other documents attached to the contracts, as applicable.
3. For the transactions selected on a sample basis, to the extent that there is a market price available for the goods delivered or services rendered between the Company and its related parties, we have discussed with the Company's management the basis for the price determination and considered if, to the extent applicable, the prices agreed are consistent with those applied in the contracts signed with third (other) parties, where similar goods or services could be provided, and if the related contracts are approved by the by the appropriate level of management or the Board of Directors or by the General Meeting of Shareholders .
   To the extent that no market prices are available, we have analyzed if the respective transactions have been performed based on the Company's internal procedures for price determination and if the related contracts are approved by the appropriate level of management or by the Board of Directors or by the General Meeting of Shareholders of the Company in accordance with its internal procedures.
4. Regarding the supplementary reports, we verified that the reported realized values represent the sum of the invoices issued or received according to the contracts mentioned in the supplementary reports, in the period mentioned by the supplementary reports. We also checked, on a sample basis, the accuracy of the invoice details related to each additional report.

Our procedures have been performed, as described above, only on the selected transactions included in the attached Reporting Schedules, that are referring to the period 1 July 2020 - 31 December 2020. We have not performed any procedures to verify whether the Reporting Schedules include all the transactions that the Company has to report according to Article 923 of Law 24/2017 for the current period.

The English version of the limited assurance report on the information included in the current reports issued by the Company in accordance with requirements of Law 24/2017 (Article 92^3) and Regulation no. 5/2018 represents a translation of the original limited assurance report issued in Romanian language. The Romanian language version is the official version.