Final Opinion Cons Petrol AD

RNS Number:9327W
Petrol AD
21 May 2007




               This document is a translation of the original in Bulgarian text,
                     in case of divergence the Bulgarian original is prevailing.



                          INDEPENDENT AUDITOR'S REPORT

To the shareholders of
Petrol AD



Report on the consolidated financial statements


1. We have audited the accompanying consolidated financial statements of
   Petrol AD (the "Parent company") and its subsidiary and associated companies
   (together referred to as "the Group"), which comprise the consolidated 
   balance sheet as at December 31, 2006 and the consolidated income statement,
   consolidated statement of changes in equity and consolidated cash flow 
   statement for the year then ended, and a summary of significant accounting 
   policies and other explanatory notes.


Management's responsibility for the consolidated financial statements


2. Management is responsible for the preparation and fair presentation of
   these consolidated financial statements in accordance with the International
   Financial Reporting Standards (IFRS), as adopted by the European Union
   Commission. This responsibility includes: designing, implementing and
   maintaining internal control relevant to the preparation and fair 
   presentation of financial statements that are free from material 
   misstatement, whether due to fraud or error; selecting and applying 
   appropriate accounting policies; and making accounting estimates that are 
   reasonable in the circumstances.


Auditor's responsibility


3. Our responsibility is to express an opinion on these consolidated financial
   statements based on our audit. Except as discussed in paragraphs 6, 7, 8 and 
   9 below, we conducted our audit in accordance with International Standards
   on Auditing. Those standards require that we comply with ethical requirements
   and plan and perform the audit to obtain reasonable assurance whether the
   consolidated financial statements are free from material misstatement.


4. An audit involves performing procedures to obtain audit evidence about
   the amounts and disclosures in the consolidated financial statements. The
   procedures selected depend on the auditor's judgment, including the 
   assessment of the risk of material misstatement of the consolidated financial
   statements, whether due to fraud or error. In making those risk assessments, 
   the auditor considers internal control relevant to the entity's preparations 
   and fair presentation of the consolidated financial statements in order to 
   design audit procedures that are appropriate in the circumstances, but not 
   for the purpose of expressing an opinion on the effectiveness of the entity's 
   internal control. An audit also includes evaluating the appropriateness of
   accounting policies used and the reasonableness of accounting estimates made 
   by management, as well as evaluating the overall presentation of the
   consolidated financial statements. 

5. We believe that the audit evidence we have obtained is sufficient and
   appropriate to provide a basis for our qualified audit opinion.


Basis for qualification


6. Trade and other payables, amounting in total to BGN 163,056 thousand,
   include current liabilities of the Parent company to a supplier amounting to 
   BGN 48,781 thousand, net, as of December 31, 2006, related to a fuel supply
   agreement signed with the supplier, reduced also by ceded receivables from 
   the same supplier. We have not received confirmation from this supplier of 
   the balance due to it. In addition, as disclosed in note 41 of the 
   accompanying consolidated financial statements, in March 2007 the supplier 
   filed a court claim against the Parent company for a total amount of 
   BGN 89,557 thousand, which includes claimed overdue amounts of BGN 59,585 
   thousand, and which also claims that the Parent company had understated sales
   reported to the supplier by BGN 11,361 thousand and thereby understated the
   amount due to the supplier. The supplier also claims penalty interest for 
   delay of BGN 18,611 thousand (the equivalent of USD 12,525 thousand). In 
   February 2007 the Parent company has communicated by letter to this supplier 
   its claim for BGN 83,973 thousand. The nature of the related agreement  and 
   the mutual claims between the parties give rise to significant uncertainty 
   as to the outcome of these disputes. In addition trade and other payables, 
   amounting in total to BGN 109,018 thousand as of December 31, 2005, include
   current liabilities to the same supplier amounting to BGN 10,796 thousand, 
   net,  related to the same fuel supply agreement, reduced also by ceded 
   receivable from the same supplier. We received a letter from this supplier, 
   which confirmed as of December 31, 2005 a net amount due to it of BGN 19,353
   thousand. As a result of the above, we were not able to satisfy ourselves as 
   to the valuation, completeness  and fair presentation of the current
   liabilities to this supplier, as reported in the consolidated financial
   statements as of December 31, 2006 and December 31, 2005, as well as the 
   valuation and fair presentation of reported sales amounting to
   approximately BGN 7,311 thousand and BGN 4,050 thousand for the years ended
   December 31, 2006 and 2005, respectively, as well as to the overall effect of
   this litigation on the consolidated financial statements of the Group.


7. Inventories, as disclosed in note 23 to the accompanying consolidated
   financial statements, amounting in total to BGN 137,968 thousand, include 
   fuels with a carrying value of BGN 18,313 thousand as of December 31, 2006 
   (and respectively, BGN 82,290 thousand and BGN 20,093 thousand as of
   December 31, 2005), purchased under the fuel supply agreement signed with the
   supplier referred to in paragraph 6 above. We have not received confirmation
   from this supplier regarding the inventory quantities as of December 31, 2006.
   As of December 31, 2005 the supplier has confirmed  quantities of inventories 
   at the Parent company's gas stations, which are higher than the quantities 
   and values reported in the accompanying consolidated financial statements and 
   the difference amounted to approximately BGN 5,509 thousand. As a result of 
   the above, we were not able to satisfy ourselves through other alternative
   procedures as to whether inventories and current liabilities amounting to
   approximately BGN 18,313 thousand and BGN 5,509 thousand are fairly presented
   and valued in these consolidated financial statements as of December 31, 2006 
   and 2005, respectively.


8. Trade and other receivables amounting to BGN 81,901 thousand as of December 
   31, 2006 include various receivables overdue for over one year amounting to 
   approximately BGN 1,500 thousand, for which there are indications for 
   impairment. As of December 31, 2006 no impairment has been provided for
   these receivables. We have not been provided with sufficient evidence of the
   recoverability of these receivables to enable us to determine whether trade 
   and other receivables amounting to BGN 1,500 thousand are fairly presented 
   and valued as of December 31, 2006.


9. As disclosed in notes 31 to the accompanying consolidated financial
   statements, a subsidiary company has reported a loss of BGN 26,286 thousand
   resulting from sale of financial assets on the Bulgarian Stock Exchange 
   (BSE). As the volume of shares traded on BSE, excluding transactions between
   related parties, is relatively insignificant in relation to the total volume 
   of issued shares, the prices used may not be representative for the purposes 
   of the measurement of the investment to fair value and the reported losses 
   from their sale in 2005. As a result, we were unable to satisfy ourselves 
   through other independent sources whether the loss from transactions with 
   financial assets for 2005 and the related effects and disclosures thereon 
   are fairly presented in the consolidated financial statements.


Qualified Opinion


10.In our opinion, except for the effects, if any, on the consolidated
   financial statements of the matters discussed in paragraphs 6, 7, 8 and 9 
   above, the consolidated financial statements present fairly, in all material 
   respects, the financial position of the Group as of December 31, 2006, and 
   its financial performance and cash flows for the year then ended, in 
   accordance with IFRS, as adopted by the European Union Commission.


Emphasis of matter


11.Without further qualifying our opinion, we draw attention to the choice of
   the management for the accounting framework applied, disclosed in note 2.1 to
   the accompanying consolidated financial statements.



Other Reports on regulatory requirements - Annual report of the activities of
the Group according to article 33 of the Accountancy Act

Pursuant to the requirements of the Bulgarian Accountancy Act, article 38,
paragraph 4, we have read the Consolidated annual report of the activities of
the Parent company and its subsidiaries and associated companies (the Group),
prepared by the Group's management. The Consolidated annual report of the
activities of the Group is not a part of the consolidated financial statements
of the Group or the separate financial statements of the Parent company. The
historical financial information, presented in the Consolidated annual report of
the activities of the Group, prepared by the management, is consistent, in all
material respects, with the financial information, disclosed in the annual
consolidated financial statements of the Group as of December 31, 2006, prepared
in accordance with IFRS, as adopted by the European Union Commission. Group's
management is responsible for the preparation of the Consolidated annual report
of the activities of the Company, dated April 21, 2007. In accordance with the
Accountancy Act, article 33, paragraph 5, the Separate annual report of the
activities and the Consolidated annual report of the activities may be prepared
and presented together, in which case specific information should be included
for the entities that comprise the Group taken as a whole. Management has
elected to prepare only Consolidated annual report of the activities.





Deloitte Audit OOD




Sylvia Peneva
Managing Director
Registered Certified Public Accountant


May 7, 2007
Sofia




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