TIDM74JJ
RNS Number : 4982H
Petrol AD
30 May 2011
Consolidated financial statements
as of March 31, 2011
and Notes to the consolidated financial statements
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the period ended March 31, 2011
March 31, March 31,
2011 2010
Note BGN'000 BGN'000
Revenue 6 293,496 238,296
Other income 7 799 1,012
Cost of goods sold (267,305) (214,390)
Materials and consumables 8 (2,294) (2,506)
Hired services 9 (5,583) (7,200)
Employee benefits expenses 10 (6,339) (5,243)
Depreciation and amortisation expenses 14 (3,955) (3,917)
Other expenses 11 (1,473) (1,080)
Finance income 12 25,297 1,582
Finance costs 12 (7,790) (9,438)
Share of profit of associates 15 - 106
--------- ---------
Profit (loss) before taxes 24,853 (2,778)
Income tax benefit (expense) 13 (982) 93
--------- ---------
Net profit (loss) for the period 23,871 (2,685)
--------- ---------
Attributable to:
Owners of the Parent company 23,863 (2,659)
Non-controlling interest 8 (26)
Total comprehensive income for the
period 23,871 (2,685)
========= =========
These consolidated financial statements have been approved on
behalf of Petrol AD by:
Svetoslav Yordanov Daniela Taskova-Stoykova
Executive Director Chief Accountant
May 30, 2011
(The accompanying notes from page 8 to page 38 are an integral
part of these consolidated financial statements)
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As of March 31, 2011
December
March 31, 31,
2011 2010
Note BGN'000 BGN'000
Non-current assets
Property, plant and equipment and
intangible assets 14 171,631 174,284
Investment properties 15 28,373 28,470
Goodwill 17 18,332 18,332
Deferred tax assets 13 852 1,344
Interest-bearing loans granted 18 7,124 34,902
Compulsory inventory 19 34,939 34,939
Total non-current assets 261,251 292,271
--------- ----------
Current assets
Inventories 19 47,632 77,733
Interest-bearing loans granted 18 93,679 94,437
Trade and other receivables 20 114,393 83,181
Cash 21 7,555 11,321
Total current assets 263,259 266,672
--------- ----------
Total assets 524,510 558,943
========= ==========
Shareholder's equity
Share capital 22 76,401 76,401
Reserve from adoption of IFRS 23 20,436 20,456
Legal reserves 18,914 18,914
Accumulated loss (57,564) (81,177)
--------- ----------
Total equity, attributable to the
owners of the Parent Company 58,187 34,594
--------- ----------
Non-controlling interest 4,579 4,301
--------- ----------
Total equity and reserves 62,766 38,895
Non-current liabilities
Borrowings 24 43,090 43,485
Obligations under finance lease 25 2,021 2,379
Retirement benefits obligations 26 190 190
Total non-current liabilities 45,301 46,054
--------- ----------
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As of March 31, 2011 (continued)
December
March 31, 31,
2011 2010
Note BGN'000 BGN'000
Current liabilities
Trade and other payables 27 204,819 228,620
Borrowings 24 207,404 240,207
Obligations under finance lease 25 1,483 1,517
Retirement benefits obligations 26 21 21
Current income tax payable 28 2,716 3,629
Total current liabilities 416,443 473,994
--------- --------
Total liabilities 461,744 520,048
--------- --------
Total equity and liabilities 524,510 558,943
========= ========
These consolidated financial statements have been approved on
behalf of Petrol AD by:
Svetoslav Yordanov Daniela Taskova-Stoykova
Executive Director Chief Accountant
May 30, 2011
(The accompanying notes from page 8 to page 38 are an integral
part of these consolidated financial statements)
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDER'S EQUITY
For the period ended March 31, 2010
Non-control-ling Total
Equity attributable to the owners of Interest equity
the Parent Company BGN'000 BGN'000
Reserve
from
Share adoption Legal Accumulated
Capital of IFRS reserves loss Total
BGN'000 BGN'000 BGN'000 BGN'000 BGN'000
Balance at
January 1, 2010 76,401 20,657 18,914 (83,918) 32,054 (101) 31,953
Loss for the
period - - - (2,685) (2,685) (26) (2,711)
Total
comprehensive
income - - - (2,685) (2,685) (26) (2,711)
-------- --------- --------- ------------ --------- ----------------- --------
Balance at
March 31, 2010 76,401 20,657 18,914 (86,603) 29,369 (127) 29,242
======== ========= ========= ============ ========= ================= ========
Profit (loss)
for the period - - - 4,991 4,991 (173) 4,818
Total
comprehensive
income - - - 4,991 4,991 (173) 4,818
-------- --------- --------- ------------ --------- ----------------- --------
Acquisition of
non-controlling
interest in
acquired
subsidiaries - - - - - 4,601 4,601
Dividends
payable written
off - - - 234 234 - 234
Reserve of
disposed
assets - (201) - 201 - - -
-------- --------- --------- ------------ --------- ----------------- --------
Balance at
December 31,
2010 76,401 20,456 18,914 (81,177) 34,594 4,301 38,895
======== ========= ========= ============ ========= ================= ========
Profit for the
period - - - 23,863 23,863 8 23,871
Total
comprehensive
income - - - 23,863 23,863 8 23,871
-------- --------- --------- ------------ --------- ----------------- --------
Reserve of
disposed
assets - (20) - 20 - - -
Acquisition of
additional
share in
subsidiary - - - (270) (270) 270 -
Balance at
March 31, 2011 76,401 20,436 18,914 (57,564) 58,187 4,579 62,766
======== ========= ========= ============ ========= ================= ========
These consolidated financial statements have been approved on
behalf of Petrol AD by:
Svetoslav Yordanov Daniela Taskova-Stoykova
Executive Director Chief Accountant
May 30, 2011
(The accompanying notes from page 8 to page 38 are an integral
part of these consolidated financial statements)
CONSOLIDATED STATEMENT OF CASH FLOWS
For the period ended March 31, 2011
March 31, March 31,
2011 2010
BGN'000 BGN'000
Cash flows from operating activities
Net loss before taxes 24,853 (2,778)
Adjustments for:
Depreciation/amortisation of property,
plant and equipment and intangible assets 3,955 3,917
Interest expense, bank fees and commissions,
net 7,118 3,932
Shortages and normal loss, net of excess
assets 574 (85)
Provisions for unused paid leave and
retirement benefits 272 69
Impairment of assets (1) -
Loss (gain) on liquidation of assets (21) 223
Net effect from applying the equity method - (106)
Gain on sale of property, plant and equipment (139) (130)
Gain on redeemed bonds (17,365) -
Unrealised foreign exchange differences (1,797) 45
17,449 5,087
Increase (decrease) in trade payables 240 (4,268)
Decrease (increase) in inventories 29,527 (4,841)
Decrease (increase) in trade receivables (31,065) 3,095
---------- ----------
Cash flows provided by
operating activities 16,151 (927)
Interest and bank fees and commissions
paid (3,067) (982)
Income taxes paid (1,402) (845)
---------- ----------
Net cash provided by (used in) operating
activities 11,682 (2,754)
CONSOLIDATED STATEMENT OF CASH FLOWS
For the period ended March 31, 2011 (continued)
March 31, March 31,
2011 2010
BGN'000 BGN'000
Cash flows from investing activities
Payments for acquisition of property,
plant and equipment and intangible assets (1,201) (2,949)
Proceeds from sale of property, plant
and equipment 283 159
Interest received on loans and deposits
granted 764 8
Proceeds from (payments for) loans and
deposits granted, net (6,679) (5,576)
Net cash provided by (used in) investing
activities (6,833) (8,358)
Cash flows from financing activities
Proceeds from bank and trade loans 4,338 4,967
Payments for bank and trade loans and
bond issue (12,124) (483)
Payments on leaseback agreements (290) -
Dividends paid (1) (1)
Lease payments (392) (466)
Net cash provided by (used in) financing
activities (8,469) 4,017
Net decrease in cash and cash equivalents
for the period (3,620) (7,095)
Cash and cash equivalents at the beginning
of the period 11,172 18,932
Cash and cash equivalents at the end
of the period (see also note 21) 7,552 11,837
========== ==========
These consolidated financial statements have been approved on
behalf of Petrol AD by:
Svetoslav Yordanov Daniela Taskova-Stoykova
Executive Director Chief Accountant
May 30, 2011
(The accompanying notes from page 8 to page 38 are an integral
part of these consolidated financial statements)
Notes
to the consolidated financial statements
as of March 31, 2011
1. Legal status
Petrol AD (the Parent Company) is registered in the city of
Sofia. The registered office of the Parent Company is 43 Cherni
Vruh Blvd, Sofia city. As of March 31, 2011 the majority
shareholder of Petrol AD is Petrol Holding AD with 55.48% ownership
of the share capital (see also note 22).
As of July 1, 1998 Petrol AD is registered as a public company
in the public register of the Financial Supervision Commission.
The main activities of Petrol AD and its subsidiaries (the
Group) are retail and wholesale of oil and non-oil products,
rendering of transport and maintenance services. The Parent Company
is one of the oldest commercial companies in Bulgaria and owns the
largest network of fuel stations in the country.
These consolidated financial statements were approved for issue
by the Management on May 30, 2011.
2. Basis for preparation of the consolidated financial
statements and accounting principles
2.1. General
These financial statements are prepared in accordance with
International Financial Reporting Standards (IFRS), issued by the
International Accounting Standards Board (IASB) and the
interpretations, issued by the International Financial Reporting
Interpretations Committee (IFRIC), as approved by the European
Union (the EU) and applicable in the Republic of Bulgaria.
These financial statements have been prepared on the historical
cost basis.
2.2. Applying new and revised IFRS
2.2.1. Standards and Interpretations effective and adopted in
the current period
The following amendments to the existing standards issued by the
IASB and adopted by the EU are effective for reporting periods
beginning on or after 1 January 2011:
-- Amendments to IAS 24 Related Party Disclosures - Simplifying
the disclosure requirements for government-related entities and
clarifying the definition of a related party, adopted by the EU on
19 July 2010 (effective for annual periods beginning on or after 1
January 2011),
-- Amendments to IAS 32 Financial Instruments:Presentation -
Accounting for rights issues, adopted by the EU on 23 December 2009
(effective for annual periods beginning on or after 1 February
2010),
-- Amendments to IFRS 1 First-time Adoption of IFRS - Limited
Exemption from Comparative IFRS 7 Disclosures for First-time
Adopters, adopted by the EU on 30 June 2010 (effective for annual
periods beginning on or after 1 July 2010),
-- Amendments to IFRIC 14 IAS 19 - The Limit on a defined
benefit Asset, Minimum Funding Requirements and their Interaction -
Prepayments of a Minimum Funding Requirement, adopted by the EU on
19 July 2010(effective for annual periods beginning on or after 1
January 2011),
-- Amendments to various standards and interpretations
"Improvements to IFRSs (2010)" resulting from the annual
improvement project of IFRS published on 6 May 2010 (IFRS 1, IFRS
3, IFRS 7, IAS 1, IAS 27, IAS 34, IFRIC 13) primarily with a view
to removing inconsistencies and clarifying wording, adopted by the
EU on 18 February 2011(amendments are to be applied for annual
periods beginning on or after 1 July 2010 or 1 January 2011
depending on standard/interpretation),
-- IFRIC 19 Extinguishing Financial Liabilities with Equity
Instruments, adopted by the EU on 23 July 2010 (effective for
annual periods beginning on or after 1 July 2010).
2.2.1. Standards and Interpretations effective and adopted in
the current period (continued)
The adoption of the above amendments has not led to any changes
in the Group's accounting policies.
2.2.2. Standards and Interpretations issued by IASB but not yet
adopted
At present, IFRS as adopted by the EU do not significantly
differ from regulations adopted by the International Accounting
Standards Board (IASB) except from the following standards,
amendments to the existing standards and interpretations, which
were not endorsed for use as of the date of authorisation of these
financial statements:
-- IFRS 9 Financial Instruments (effective for annual periods
beginning on or after 1 January 2013),
-- Amendments to IFRS 1 First-time Adoption of IFRS - Severe
Hyperinflation and Removal of Fixed Dates for First-time Adopters
(effective for annual periods beginning on or after 1 July
2011),
-- Amendments to IFRS 7 Financial Instruments: Disclosures -
Transfers of Financial Assets (effective for annual periods
beginning on or after 1 July 2011),
-- Amendments to IAS 12 Income Taxes - Deferred Tax: Recovery of
Underlying Assets (effective for annual periods beginning on or
after 1 January 2012).
-- IFRS 10 Consolidated Financial Statements (effective for
annual periods beginning on or after 1 January 2013),
-- IFRS 11 Joint Arrangements (effective for annual periods
beginning on or after 1 January 2013),
-- IFRS 12 Disclosure of Interests in Other Entities(effective
for annual periods beginning on or after 1 January 2013),
-- IFRS 13 Fair Value Measurement (effective for annual periods
beginning on or after 1 January 2013),
-- Amendments to IAS 27 Separate Financial Statements (effective
for annual periods beginning on or after 1 January 2013),
-- Amendments to IAS 28 Investments in Associates and Joint
Ventures (effective for annual periods beginning on or after 1
January 2013),
The Group anticipates that the adoption of these standards,
amendments to the existing standards and interpretations will have
no material impact on the financial statements of the Group in the
period of initial application.
At the same time, hedge accounting regarding the portfolio of
financial assets and liabilities, whose principles have not been
adopted by the EU, is still unregulated.
According to the Group's estimates, application of hedge
accounting for the portfolio of financial assets or liabilities
pursuant to IAS 39: Financial Instruments: Recognition and
Measurement, would not significantly impact the financial
statements, if applied as at the reporting date.
2.3. Functional and presentation currency of the consolidated
financial statements
Functional currency is the currency of the primary economic
environment in which an entity operates and in which it primary
generates and expends cash. An entity's functional currency
reflects the major transactions, events and conditions that are
significant to the Group.
The Group keeps its records and prepares its financial
statements in the national currency of the Republic of Bulgaria -
the Bulgarian Lev, which is adopted by the Group as its functional
currency.
These consolidated financial statements are presented in
thousand Bulgarian Levs.
2.4. Foreign currency
Transactions in foreign currency are initially recorded at the
official rate of exchange of the Bulgarian National Bank (BNB) as
of the date of the transaction. The foreign exchange rate
differences, arising upon the settlement of these monetary
positions or at restatement of these positions at rates, different
from those when initially recorded, are reported in profit or loss
for the period in which they arise.
The monetary positions denominated in foreign currency as of
March 31, 2011 and December 31, 2010 are stated in these
consolidated financial statements at the closing exchange rate of
BNB. The closing exchange rates of BGN against USD for the
respective reporting period of the consolidated financial
statements are as follows:
2.4. Foreign currency (continued)
March 31, 2011: 1 USD = BGN 1.37667
December 31, 2010: 1 USD = BGN 1.47276
2.5. Accounting estimates and reasonable assumptions
The preparation of consolidatedfinancial statements in
accordance with IFRS requires management to make certain accounting
estimates and reasonable assumptions that affect some of the
reported amounts of assets, liabilities, revenues and expenses.
These estimates and assumptions are based on the best estimate of
management, taking into account historical experience and analysis
of all factors of significance in the circumstances as of the date
of the consolidatedfinancial statements. The actual results could
differ from those estimates, presented in these consolidated
financial statements.
2.6. Subsidiary companies and consolidation
The consolidated financial statements incorporate the financial
statements of the Parent company and its subsidiaries. A subsidiary
is an entity that is controlled by the Parent company. Control is
the power to govern the financial and operating policies of an
enterprise, so as to obtain benefits from its activities.
In compliance with SIC 12 Consolidation - Special Purpose
Entities, the financial statements of two entities are consolidated
in their capacity of special purpose entities as of January 1, 2009
(see also note 36).
For consolidation purposes, the separate financial statements of
the Parent Company, its subsidiaries and the controlled special
purpose entities have been combined on a line-by-line basis by
adding together items of assets, liabilities, equity, income and
expenses. All intragroup balances as of March 31, 2011 and December
31, 2010 and intragroup transactions as of March 31, 2011 and 2010,
as well as all intragroup profits and losses, including unrealised
profits and losses as of March 31, 2011 and 2010 are eliminated in
full. The carrying amount of the investments in each subsidiary,
hold by the Parent Company or any of the subsidiaries and the
Parent Company's portion of equity of each subsidiary are
eliminated.
The results of subsidiaries, which have been acquired or
disposed by the Group during the reporting period, are included in
the consolidated statement of comprehensive income from the date of
the acquisition, till the date at which control ceases.
Non-controlling interest is the equity in a subsidiary not
attributable, directly or indirectly to the Parent Company.
Non-controlling interest is represented within equity in the
consolidated statement of financial position, separately from the
equity of the owners of the parent. In each business combination
the acquirer measure any non-controlling interest in the acquiree
either at fair value or by the proportional share of the
non-controlling interest in the identifiable net assets of the
acquiree.
2.6. Subsidiary companies and consolidation (continued)
Profit or loss or any component of the other comprehensive
income is attributed to the owners of the Parent Company and
non-controlling interests. The total comprehensive income is
attributable to the owners of the Parent Company and
non-controlling interests even if this results in the
non-controlling interests having a deficit balance.
2.7. Associates
An associate is an enterprise over which the Group has
significant influence. Significant influence is the right of
participation in, but not control over, the financial and operating
policy decisions of the investee.
Investments in associates are presented in the statement of
financial position in accordance with IAS 28 Investments in
Associates, using the equity method of accounting, according to
which the investment is recorded initially at cost and adjusted by
post-acquisition changes in the investor's share in the net assets
of the associate.
2.8. Goodwill
Goodwill, arisen in business combination, is recognised as an
asset at the date when control over the company, subject to
business combination, is acquired. Goodwill represents the excess
of the aggregate of the consideration transferred, the amount of
any non-controlling interest in the acquiree and the acquisition
date fair value of the acquirer's previously held equity interest
in the acquiree over the net acquisition date amounts of the
identifiable assets acquired and the liabilities assumed. When the
acquisition cost is lower than the fair value of the net assets
acquired by the Group, the acquirer should reassess the
identification and measurement of the acquiree's identifiable
assets, liabilities and the cost of the business combination and
any excess remaining after that reassessment should be recognised
immediately in profit or loss.
Subsequent to its initial recognition goodwill is not amortised,
in compliance with IFRS 3 Business combinations, applicable for
reporting periods after March 31, 2004. At the end of each
reporting period a test for impairment is performed (see also note
4).
3. Definition and valuation of the statement of financial
position and the statement of comprehensive income items
3.1. Property, plant and equipment and intangible assets
Property, plant and equipment and intangible assets are
initially carried at acquisition cost, including the purchase
price, import duties and non-refundable taxes, as well as any costs
directly attributable to bringing the asset to the location and
condition necessary for it to be capable of operating in the manner
intended by management. After initial recognition, property, plant
and equipment and intangible assets are stated at cost less
accumulated depreciation/amortisation and impairment loss, if any
(see also note 3.3).
When property, plant and equipment include significant items
having various useful lives, such items are reported as separate
assets.
Subsequent costs, including costs for replacement of components
of property, plant and equipment are capitalised in the amount of
the asset, if they satisfy the recognition principle. The carrying
amount of the replaced item is derecognised in accordance with the
requirements of IAS 16 Property, Plant and Equipment. All other
subsequent costs are recognised as expenses for the period as
incurred.
3.1. Property, plant and equipment and intangible assets
(continued)
Depreciation and amortisation are charged over the estimated
useful lives, using the straight-line method.
As of the end of each reporting period, the Group's management
reviews useful lives and amortisation/depreciation methods of the
property, plant and equipment and intangible assets. If differences
between expectations and previous estimates are identified, changes
are made in accordance with IAS 8 Accounting Policies, Changes in
Accounting Estimates and Errors.
The assets' estimated useful lives are as follows:
Useful life 2011 2010
Administrative and trade buildings 25 years 25 years
Property, plant and equipment 2 - 25 years 2 - 25 years
Vehicles 4 - 10 years 4 - 10 years
Office equipment 7 years 7 years
Intangible assets 2 - 7 years 2 - 7 years
Depreciation of an asset begins in the month following the month
in which it is available for use and ceases at the earlier of the
date that the asset is classified as held for sale, in accordance
with IFRS 5 Non-current Assets Held for Sale and Discontinued
Operations and the date of its derecognition.
Land, assets under construction and fully depreciated assets are
not depreciated.
3.2. Investment properties
Investment property is a property held by the Group to
accumulate rent income or to increase the equity value, or both
(including property under construction for future use as investment
property).
Investment property is measured at its cost less any accumulated
depreciation and accumulated impairment losses, if any (see also
3.3).
Depreciation on investment property is charged in profit or loss
by using the straight-line method, based on its estimated useful
live.
The investment property's estimated useful lives are as
follows:
Useful life 2011 2010
Administrative and trade buildings 25 years 25 years
Machines, plant and equipment 2, 3 and 25 2, 3 and 25
years years
Office equipment 7 years 7 years
As of the end of each reporting period, the Group's management
reviews useful lives and depreciation methods of the investment
property. If differences between expectations and previous
estimates are identified, changes are made in accordance with IAS 8
Accounting Policies, Changes in Accounting Estimates and
Errors.
3.3. Impairment of property, plant and equipment, intangible
assets and goodwill
As of the end of each reporting period, the Group's management
estimates if there are indications for impairment of property,
plant and equipment, intangible assets and goodwill. If such
indication exists, the recoverable amount of the asset is
estimated. Where it is not possible to estimate the recoverable
amount of an individual asset, the Group estimates the recoverable
amount of the cash-generating unit, to which the asset belongs.
The recoverable amount is the higher of the asset's fair value
less costs to sell the asset and its value in use. If the
recoverable amount of an asset (or cash-generating unit) is
estimated to be less than its carrying amount, the carrying amount
of the asset (cash generating unit) is reduced to its recoverable
amount. Impairment loss is recognised immediately as expense in
profit or loss unless the asset is revalued when the impairment
loss is reported as decrease in the revaluation reserve.
Where an impairment loss subsequently reverses, the carrying
amount of the asset (cash generating unit) is increased to the
revised estimate of its recoverable amount, but so that the
increased carrying amount does not exceed the carrying amount that
would have been determined had no impairment loss been recognised
for the asset (cash generating unit) in prior years. A reversal of
an impairment loss is recognised immediately as income in profit or
loss.
Impairment loss is recognised for a cash-generating unit to
which goodwill was allocated only if the recoverable amount is
lower than its carrying amount. The impairment loss reduces the
carrying amount of the assets in the cash-generating unit, first
the carrying amount of goodwill is reduced and then, the carrying
amount of other assets in the unit, pro rata on the basis of the
carrying amount of each asset to the total amount of the unit. The
impairment loss of goodwill could not be reversed.
3.4. Inventories
Inventories are stated at lower of cost and net realisable
value. Cost comprises purchase price, transportation, customs
duties and other similar costs. Net realisable value represents the
estimated selling price less all estimated costs to be incurred in
selling.
Upon consumption, the cost of inventories is calculated using
the following methods:
Fuel and other goods Weighted average cost
Materials Weighted average cost
3.5. Financial instruments
A financial instrument is a contract that gives rights to both a
financial asset of one enterprise and a financial liability or
equity instrument of another enterprise.
Financial assets and liabilities are recognised in the statement
of financial position only when the Group becomes a party to the
contractual provisions of the instrument. Financial assets are
removed from the statement of financial position after the
contractual rights for receiving cash flows have expired or the
asset is transferred and the transfer meets the derecognition
requirements under IAS 39 Financial Instruments: Recognition and
Measurement. Financial liability is removed from the statement of
financial position when, and only when, it is extinguished - that
is when the obligation specified in the contract is discharged,
cancelled, or expires.
On initial recognition financial assets (liabilities) are
measured at fair value. Transaction costs, which are directly
attributable to the acquisition or issue of the financial assets
(liabilities), are included in their value, except when the
financial assets (liabilities) are measured at fair value through
profit or loss.
3.5. Financial instruments (continued)
For the purposes of subsequent measurement, in accordance with
the requirements of IAS 39 Financial Instruments: Recognition and
Measurement, the Group classifies the financial assets and
liabilities as: financial assets (liabilities) at fair value
through profit or loss; loans and receivables; financial
liabilities at amortised cost. Classification in the respective
category depends on the terms of the respective contract. The Group
does not apply this classification of the assets and liabilities
for the purposes of presentation in the statement of financial
position
3.5.1. Financial assets (liabilities), measured at fair value
through profit or loss
After their initial recognition these financial assets measured
at fair value though profit or loss are measured at fair value as
of the end of the reporting period and all differences from this
value are recognised in profit or loss for the period in which they
arise.
3.5.2. Loans granted and receivables
Loans granted and receivables are non-derivative financial
assets with fixed or determinable terms for settlement, which are
not quoted on an active market. The assets from this category are
presented in the statement of financial position of the Group as
receivables on interest-bearing loans, trade and other receivables
and cash.
Receivables on interest-bearing loans, trade and other
receivables
After its initial recognition, trade receivables and receivables
on interest bearing loans are measured at amortised cost by using
the effective interest rate method, less impairment loss, if any.
Current receivables are not subject to amortisation. Impairment
loss is accrued if any objective evidence exists, such as
significant financial difficulties of the borrower, probability the
borrower to be entered into liquidation and other (see also note
3.6.3).
Cash
For the purposes of the statement of cash flows preparation,
cash comprise cash in hand, cash at banks and cash in transfer,
with the exception of restricted cash, which the Group temporarily
has no right to use.
3.5.3. Impairment of financial assets
As of the end of the reporting period, the management reviews
whether there is any indication for impairment of all financial
assets, except for financial assets measured at fair value through
profit or loss. Financial assets are impaired only when there is
any objective evidence that as a result of one or more events
occurred after their initial recognition, the expected cash flows
have declined.
If any such evidence exists regarding assets measured at cost,
the impairment loss is determined as the difference between the
carrying amount and the present value of expected future cash flows
discounted by the present market interest rate for similar
assets.
Impairment loss on loans granted and receivables carried at
amortised cost is measured as the difference between the asset's
carrying amount and the present value of the estimated future cash
flows, discounted by the financial asset's original effective
interest rate. Impairment loss is immediately recognised in profit
or loss. It is recovered if a subsequent increase of the
recoverable amount could be objectively tied to the occurrence of
an event after the date on which the impairment loss was
recognised.
3.5.4. Financial liabilities at amortised cost
After their initial recognition, the Group measures all
financial liabilities at amortised cost except for financial
liabilities measured at fair value through profit and loss;
financial liabilities originating when the transfer of an asset
does not meet the derecognition conditions; agreements for
financial guarantees, engagements for granting loans at an interest
rate that is lower than the market interest rate. These liabilities
are presented in the Company's statement of financial position as
trade and other liabilities and Borrowings.
Trade and other payables
Trade and other payables incur as a result from purchased goods
or services. Current liabilities are not amortised.
Borrowings
Interest bearing loans are initially recognised at fair value,
determined from the cash proceeds less transaction costs. After
initial recognition, interest bearing loans are measured at
amortised cost, as any difference between the initial value and the
value at maturity is recognised in profit or loss over the loan
period, using the effective interest rate method. If no transaction
costs have been incurred in negotiating an interest bearing loan,
the loan is not subject to amortisation. The same applies to bank
overdrafts, where the borrower is entitled to utilise or repay the
borrowed funds many times within the pre-determined overdraft
limit.
Finance costs, including direct costs for obtaining the loan,
are accounted for on an accrual basis using the effective interest
rate method, except for transaction costs on bank overdrafts, which
are recognised in profit or loss on a straight line basis over the
overdraft period.
The effective interest rate method is a method of calculating
the amortised cost of a financial asset or a financial liability
and of allocating the interest income or interest expense over the
relevant period. The effective interest rate is the rate that
exactly discounts estimated future cash payments or proceeds
through the expected life of the financial instrument or, when
appropriate, a shorter period to the net carrying amount of the
financial asset or financial liability. When calculating the
effective interest rate, the Group estimates cash flows considering
all contractual terms of the financial instrument, except for
anticipated future impairment losses. The calculation includes all
fees, transaction costs, premiums or discounts paid or received
between parties to the contract that are an integral part of the
effective interest rate.
Interest bearing loans are classified as current when they are
expected to be settled within twelve month period after the
reporting period.
3.5.5. Share capital and redemption of own shares
The share capital of the Parent Company is presented at
historical cost as of the date of its registration.
When at the end of the reporting period the Group - through
Parent company or subsidiary - has reacquired shares of the Parent
company, their par value is presented as decrease of share capital,
and the difference below or above the par value - in retained
earnings, according to IAS 32 Financial Instruments: Disclosure and
Presentation.
3.6. Deferred income and deferred expenses
The Group has recognised in the statement of financial position
as deferred income and deferred expenses, income and expenses that
are paid in the current, but refer to future reporting periods -
guarantees, insurances, subscriptions, rents and other.
3.7. Retirement benefits obligations
The Government of the Republic of Bulgaria is liable to provide
pensions according to defined retirement benefits schemes. Costs
related to payment of contributions under these schemes are
recognised by the Group in profit or loss in the period they
occur.
In accordance with the Labour Code, the Group has an obligation
to pay retirement benefits to its employees, based on length of
service, age and labour category. In accordance with the
requirements of IAS 19 Employee benefits and its provisions, the
Group recognises the present amount of the benefits as a liability.
All actuarial gains and losses and past service cost is recognised
immediately in profit or loss.
3.8. Income tax
Income tax expense comprises current income tax and deferred
tax.
The current income tax is based on taxable profit for the year
by totalling of the current tax of each company within the Group
specified in the individual tax returns of the Parent Company and
its subsidiaries by applying the effective tax rate according to
the tax legislation as of the date of the financial statements.
Deferred tax is the income tax expected to be payable (recoverable)
on taxable (deductible) temporary differences. Temporary
differences are the differences between the carrying amount of an
asset and a liability in the statement of financial position, and
the corresponding tax basis. Deferred tax is calculated using the
balance sheet liability method. Deferred tax liabilities are
recognised for all taxable temporary differences, whereas deferred
tax assets are recognised for deductible temporary differences,
only to the extent that it is probable that taxable profit will be
available against which the deductible temporary difference can be
utilised.
Deferred tax assets and liabilities are calculated at the tax
rates that are expected to apply in the period when the liability
is settled or the asset realised, based on the information that the
Group is provided for as of the date of the issuance of the
financial statements. Deferred tax is recognised as an expense or
income in profit or loss, except when they relate to items that are
recognised in the same or other period outside profit or loss,
either in other comprehensive income or directly in equity.
In this case the deferred tax is also recognised outside profit
or loss either directly in other comprehensive income or directly
in equity.
Although the taxation in Bulgaria is not performed on a
consolidation basis, the Group has adopted a policy to recognise
deferred tax assets (liabilities) on all temporary differences
arising from the elimination of intra-group unrealised profits from
sales of property, plant and equipment treated as temporary
differences. The reversal of these temporary differences reflects
in subsequent adjustments of depreciation costs in the acquirer or
when the Group derecognises these assets and relevant margins are
realised.
The current amount of deferred tax assets is reviewed at the end
of each reporting period. The Group reduces their amount to the
extent that it is no probable that sufficient profit will be
available against which the deferred tax asset to be utilised.
Deferred tax assets and liabilities are reported on a net basis
when they are subject to a unified tax regime.
In accordance with the tax legislation enforceable for the years
ended 2011 and 2010, the tax rates applied for the calculation of
current tax liabilities of the Group is 10%, respectively. For the
calculation of the deferred tax assets and liabilities as of March
31, 2011 and December 31, 2010 the Group has used a tax rate of
10%.
3.9. Revenue and expenses recognition
3.9.1. Revenue from sales of goods, services and other
income
Revenues and expenses are accounted for on an accrual basis,
regardless of the date of cash receipts and payments. They are
reported in compliance with the matching concept.
Revenue is recognised at the fair value of the consideration
received or receivable, less any discounts allowed and includes the
gross economic benefits received by or due to the Group. The
amounts gathered on behalf of third parties such as sales taxes,
like value added tax, are excluded from the income. Revenue
generated from sale of fuel is reported on its gross amount with
the excise due, which is considered an integral part of the price
of the goods.
Revenue from sales of goods is recognised when:
-- The significant risks and rewards of ownership of the goods
are transferred to the buyer;
-- The Group retains neither continuing managerial involvement
nor effective control over the goods sold;
-- It is probable that the economic benefits associated with the
transaction will flow to the Group;
-- The amount of revenue and costs incurred in respect of the
transaction can be measured reliably.
When the outcome of a transaction involving rendering of
services can be estimated reliably, revenue is recognised by
reference to the stage of completion of the transaction at the end
of the reporting period. When the outcome of a transaction cannot
be estimated reliably revenue is recognised only to the extent that
the expenses recognised are recoverable.
Gain or loss from sales of property, plant and equipment,
intangible assets and materials is reported as other income or
other expense.
When economic benefits are expected to arise during few
reporting periods and their relation with the revenue can be
determined generally or indirectly, expenses are recognised in
profit or loss on the basis of procedures for systematic and
rational distribution.
Profit or loss arising from the exchange of assets is stated at
the amount equal to the difference between the fair value of the
asset received and the carrying amount of the asset exchanged.
3.9.2. Finance income and finance costs
Borrowing costs that may be directly attributed to the
acquisition, construction or production of a qualifying asset
should be capitalised as part of the asset's cost. All other
finance income and finance costs are accrued through profit or loss
for all instruments measured at amortised cost by using the
effective interest rate method.
3.10. Lease
3.10.1 Finance lease
Finance lease is a lease agreement which substantially transfers
all risks and rewards incidental to the ownership of an asset.
Assets acquired under finance lease are recognised at the lower
of their fair value as of the date of acquisition or the present
value of the minimum lease payments. The initial direct expenses
incurred by the lessee are included in the cost of the asset. The
corresponding liability to the lessor is included in the Group's
statements of financial position as obligations under finance
leases.
Lease payments are divided in interest payments and payments on
principal so that a constant interest rate of the residual lease
liability is obtained.
Finance lease causes depreciation expense for depreciable assets
as well as finance expense for each reporting period. The
depreciation policy for depreciable leased assets is consistent
with the same for owned depreciable assets.
For the purpose of presenting the financial instruments in
categories, defined in accordance with IAS 39 Financial
Instruments: Recognition and measurement, liabilities under finance
lease are classified as financial liabilities at amortised
cost.
3.10.2. Operating lease
Costs incurred for assets leased under the operating lease
contracts are recognised through profit or loss over the terms of
the contracts under the straight-line method.
Revenue realised from assets under operating lease contracts is
recognised through profit or loss on a straight-line basis over the
term of the lease contract. Initial costs directly related to the
signing of the lease contract are capitalised in the cost of the
asset and recognised as expenses on a straight-line basis over the
term of the lease contract.
3.10.3. Leaseback agreements
A leaseback transaction is related to the sale of an asset and
the hiring back the same asset. The accounting treatment of the
leaseback depends on the type of the respective lease contract and
the nature of the transaction.
If the leaseback is a finance lease, the transaction is a mean
of granting financing to the lessee by the lessor and the asset
serves as collateral. If according to the provisions of the finance
lease contract there are no changes in the right of use of the
asset by the seller/lessee before and after the transaction, then
the transaction is not within the scope of IAS 17 Leases and is, in
fact, financing. In this case, the proceeds received from the
transaction are presented as Borrowings in the statement of
financial position, while the direct costs incurred by the lessee
during the transaction are deferred for the period of the lease
contract.
3.11. Segment reporting
Operating segments data in these consolidated financial
statements is presented likewise the operating reports submitted to
Group's management. Based on these reports decisions are taken in
respect of the resources to be allocated to the segment and the
results of its activity are evaluated.
4. Critical accounting estimates and key sources of estimation
uncertainty
In the application of the adopted accounting policy, management
makes certain estimates which have significant effect on these
consolidated financial statements. Such estimates, by definition,
may differ from actual results. Due to their nature, they are
subject to constant review and update, and comprise the historical
experience and other factors, including expectation of future
events, which the management believes are reasonable under the
present circumstances.
A critical accounting estimate, which includes significant risk
of considerable adjustments to the carrying amount of assets and
liabilities in subsequent reporting periods, is the test for
impairment of goodwill, arising from business combination. As of
the end of the previous reporting period review of the carrying
amount of the goodwill was performed. As a result goodwill arising
from the acquisition of Naftex Security EAD was impaired (see also
note 17).
5. Segments reporting
The Group has identified the following operating segments based
on the reports presented to the Group's management which are used
in the process of strategic decision making:
-- Wholesale of fuels - wholesale of oil products in Bulgaria in
own storage facilities of the Group; fuel bunkering abroad;
-- Retail of fuels - retail of oil and other products in network
of own petrol stations; servicing of petrol stations and the
belonging commercial objects;
-- Other activities - transportation of fuel with own and hired
vehicles; rental income and other activities
Segment information, presented to the Group's management for the
periods ended as of March 31, 2011 and 2010 is as follows:
Wholesale Retail All other Total for
March 31, 2011 of fuels of fuels segments the Group
BGN'000 BGN'000 BGN'000 BGN'000
Total segment revenue 327,007 119,748 2,218 448,973
Inter-group revenue 147,100 6,171 1,407 154,678
Revenue from external
customers 179,907 113,577 811 294,295
Adjusted EBITDA 6,458 4,096 748 11,302
Depreciation/amortisation 667 3,049 239 3,955
Impairment - - 1 1
5. Segments reporting (continued)
Wholesale Retail All other Total for
March 31, 2010 of fuels of fuels segments the Group
BGN'000 BGN'000 BGN'000 BGN'000
Total segment revenue 259,882 109,909 912 370,703
Inter-group revenue 124,993 5,919 483 131,395
Revenue from external
customers 134,889 103,990 429 239,308
Adjusted EBITDA 3,472 4,959 458 8,889
Depreciation/amortisation 640 3,037 240 3,917
Impairment - - - -
The policies for recognition of revenue from intra-group sales
and sales to external clients for the purposes of the reporting by
segments are not differing from these applied by the Group for
revenue recognition in the consolidated statement of comprehensive
income.
The Management of the Group evaluates the results from
performance of the segments on the basis of the adjusted EBITDA. In
the calculation of the adjusted EBITDA the effect of impairment of
assets is not taken into account the effect of impairment of
assets.
The reconciliation of the adjusted EBITDA and the loss before
tax is presented below:
March 31, March 31,
2011 2010
BGN'000 BGN'000
Adjusted EBITDA reporting segments 10,554 8,431
Adjusted EBITDA all other segments 748 458
Depreciation/amortisation (3,955) (3,917)
Impairment of assets (1) -
Finance expense, net 17,507 (7,856)
Share of profit of associates - 106
-------------- --------------
Profit (loss) before taxes 24,853 (2,778)
============== ==============
Revenue from external sales of segment Wholesale of fuels in the
first quarter of 2011 and 2010 includes sales to the largest
customer of the segment amounting to BGN 57,973 thousand and BGN
46,438 thousand, which represents respectively 32% and 34% from the
total external sales of the segment.
6. Revenue
March 31, March 31,
2011 2010
BGN'000 BGN'000
Sale of goods 290,687 233,968
Sale of services 2,809 4,328
-------------- --------------
293,496 238,296
============== ==============
7. Other income
March 31, March 31,
2011 2010
BGN'000 BGN'000
Surplus of assets 320 503
Income from penalties 109 156
Gain from sales of property, plant
and equipment, incl. 139 130
Income from sales 278 162
Carrying amount (139) (32)
Gain from liquidation and sale of non-current
assets and materials 21 -
Income from liquidation of non-current
assets 21 -
Insurance claims 126 65
Other 84 158
-------------- --------------
799 1,012
============== ==============
8. Materials and consumables
March 31, March 31,
2011 2010
BGN'000 BGN'000
Electricity and heating 954 881
Fuels and lubricants 880 1,208
Spare parts 178 124
Office consumables 149 116
Water 30 30
Advertising materials 9 64
Working clothes 5 18
Other 89 65
--------------- -----------------
2,294 2,506
=============== =================
9. Hired services
March 31, March 31,
2011 2010
BGN'000 BGN'000
Fees and commissions 1,092 1,309
Rents 799 1,110
Holding fee 605 519
Transport 422 547
State and municipal fees 420 473
Maintenance and repairs 413 450
Cash collection expense 328 248
Advertising 300 150
Insurances 293 293
Software licenses 179 400
Consulting and training 178 618
Communications 178 396
Security 109 516
Other 267 171
-------------- --------------
5,583 7,200
============== ==============
10. Employee benefits expenses
March 31, March 31,
2011 2010
BGN'000 BGN'000
Wages and salaries 5,226 4,387
Social security contributions and benefits 1,113 856
-------------- --------------
6,339 5,243
============== ==============
11. Other expenses
March 31, March 31,
2011 2010
BGN'000 BGN'000
Shortages and written-off assets 555 356
Entertainment expenses and
sponsorship 315 42
Taxes and charges 311 151
Business trips 100 94
Penalties and indemnities 61 71
Scrapped assets 19 62
Impairment of assets 1 -
Loss from liquidation of property, plant
and equipment - 223
Income from sale - -
Carrying amount - 223
Other 111 81
-------------- --------------
1,473 1,080
============== ==============
12. Finance income and costs
March 31, March 31,
2011 2010
BGN'000 BGN'000
Finance income
Interest income, including: 2,429 1,582
Interest income on loans granted 1,807 1,200
Interest income on trade and other
receivables 166 375
Other interest income 456 7
Foreign exchange rate gains, net 5,498 -
Gain from redeemed own bonds 17,365 -
Other finance income 5 -
25,297 1,582
-------------- --------------
Finance costs
Interest expenses, including: (7,004) (5,003)
Interest expenses on debenture loans (4,402) (4,452)
Interest expenses on trade and other
payables (869) (242)
Interest expenses on bank loans (812) (216)
Interest expenses on leasebacks (579) -
Interest expenses on trade loans (308) (44)
Interest expenses on obligations under
finance lease (34) (49)
Foreign exchange rate losses, net - (3,702)
Bank fees, commissions and other costs
financial expenses (786) (733)
-------------- --------------
(7,790) (9,438)
-------------- --------------
Finance income (costs), net 17,507 (7,856)
============== ==============
In 2011 the Group redeemed bonds, issued by its subsidiary
Petrol AD (see also note 24), with nominal value of EUR 26,643
thousand at the amount of BGN 36,476 thousand. As a result of the
transactions for redemption of own bonds, in 2011 the Group
realised a gain of BGN 17,365 thousand.
13. Taxation
Tax expense recognised in profit or loss comprises the amount of
current and deferred income tax in accordance with the requirements
of IAS 12 Income taxes.
March 31, March 31,
2011 2010
BGN'000 BGN'000
Current tax expense 489 1,586
Change in deferred taxes, incl.: 493 (1,679)
Temporary differences recognised during
the year 1,440 (938)
Temporary differences originated during
the year (942) (741)
Prior year adjustments (5) -
Total tax expense (benefit) 982 (93)
============== ==============
The reconciliation between accounting loss and tax benefit is
presented in the table below:
March 31, March 31,
2011 2010
BGN'000 BGN'000
Accounting loss 24,853 (2,778)
Applicable tax rate 10% 10%
Tax expense (benefit) at the applicable
tax rate 2,485 (278)
Aggregate tax effect from permanent
differences 234 75
Tax effect from unrecognised during the
current year temporary difference originated
during the current period 107 3
Tax effect from adjustments during the
current year of tax liability originated
in prior period (1) -
Recognised tax assets originated in prior
periods 5 (6)
Tax effect from consolidation adjustments (1,848) 113
-------------- --------------
Tax expense (benefit) 982 (93)
============== ==============
The deferred tax asset (liability) presented in the consolidated
statement of financial position arises as a result of income tax
charges on deductible temporary differences, the effect of which is
as follows:
March 31, 2011 December 31, 2010
Temporary Tax Temporary Tax
difference effect difference effect
BGN'000 BGN'000 BGN'000 BGN'000
Balance at the beginning
of the period
Property, plant and
equipment (27,401) (2,740) (22,594) (2,261)
Tax loss carry forward 33,270 3,328 1,944 195
Unused paid leave and
retirement compensations 1,238 125 2,087 210
Excess of interest payments 18,807 1,879 30,990 3,098
Investments in associates (16,869) (1,687) (16,869) (1,687)
Impairment of assets 3,844 384 4,110 411
Other 550 55 1,052 106
------------ -------- -------------- --------
13,439 1,344 720 72
============ ======== ============== ========
13. Taxation (continued)
March 31, 2011 December 31, 2010
Temporary Tax Temporary Tax
difference effect difference effect
BGN'000 BGN'000 BGN'000 BGN'000
Acquired through business
combination
Property, plant and
equipment - - (16,497) (1,649)
Unused paid leave and
retirement compensations - - 111 10
Excess of interest payments - - 19 2
Impairment of assets - - 162 17
Other - - 6 1
------------ -------- -------------- --------
- - (16,199) (1,619)
============ ======== ============== ========
Originated during the
period
Property, plant and
equipment 108 11 825 82
Tax loss carry forward 784 78 33,270 3,327
Unused paid leave and
retirement compensations 272 28 256 25
Excess of interest payments 7,871 787 25 2
Impairment of assets 1 - 108 11
Other 386 38 501 50
------------ -------- -------------- --------
9,422 942 34,985 3,497
============ ======== ============== ========
Recognised during the
period
Property, plant and
equipment 132 12 10,865 1,088
Tax loss carry forward (13,491) (1,349) (713) (71)
Unused paid leave and
retirement compensations (904) (90) (1,216) (120)
Excess of interest payments (4) - (10,690) (1,069)
Impairment of assets (3) - (536) (55)
Other (136) (13) (1,009) (102)
------------ -------- -------------- --------
(14,406) (1,440) (3,299) (329)
============ ======== ============== ========
Adjustments
Property, plant and
equipment 56 6 - -
Tax loss carry forward - - (1,231) (123)
Excess of interest payments - - (1,537) (154)
56 6 (2,768) (277)
============ ======== ============== ========
Balance at the end of
the period
Property, plant and
equipment (27,105) (2,711) (27,401) (2,740)
Tax loss carry forward 20,563 2,057 33,270 3,328
Unused paid leave and
retirement compensations 606 63 1,238 125
Excess of interest payments 26,674 2,666 18,807 1,879
Investments in associates (16,869) (1,687) (16,869) (1,687)
Impairment of assets 3,842 384 3,844 384
Other 800 80 550 55
------------ -------- -------------- --------
8,511 852 13,439 1,344
============ ======== ============== ========
14. Property, plant and equipment and intangible assets
Plant and Other Assets under Intangible
Land Buildings equipment Vehicles assets construc-tion assets Total
BGN'000 BGN'000 BGN'000 BGN'000 BGN'000 BGN'000 BGN'000 BGN'000
Cost
Balance at
January 1,
2010 38,855 50,634 147,361 24,752 13,528 9,781 2,415 287,326
-------- ---------- ---------- --------- -------- -------------- ----------- --------
Additions - 29 224 - - 1,778 - 2,031
Transfers - 1,085 4,637 - 499 (6,252) 31 -
Disposals (3) (58) (863) (710) (108) (2) - (1,744)
-------- ---------- ---------- --------- -------- -------------- ----------- --------
Balance at
March 31,
2010 38,852 51,690 151,359 24,042 13,919 5,305 2,446 287,613
-------- ---------- ---------- --------- -------- -------------- ----------- --------
Additions 298 604 1,385 56 378 3,858 2,740 9,319
Acquisitions
through
business
combinations 6,499 5,519 129 - 156 109 10 12,422
Transfers (15) 1,840 562 - 149 (2,551) 15 -
Disposals (459) (114) (712) (5,277) (194) - - (6,756)
-------- ---------- ---------- --------- -------- -------------- ----------- --------
Balance at
December
31, 2010 45,175 59,539 152,723 18,821 14,408 6,721 5,211 302,598
-------- ---------- ---------- --------- -------- -------------- ----------- --------
Additions - 27 136 - 21 1160 - 1,344
Transfers - - 109 - - (109) - 0
Disposals (51) (8) (301) (680) (3) (7) - (1,050)
-------- ---------- ---------- --------- -------- -------------- ----------- --------
Balance at
March 31,
2011 45,124 59,558 152,667 18,141 14,426 7,765 5,211 302,892
-------- ---------- ---------- --------- -------- -------------- ----------- --------
Accumulated
Depreciation/
Amortisation
Balance at
January 1,
2010 - 19,888 70,715 18,116 8,748 - 1,686 119,153
Charged for
the period - 365 2,610 607 293 - 42 3,917
Disposals - - (694) (699) (34) - - (1,427)
-------- ---------- ---------- --------- -------- -------------- ----------- --------
Balance at
March 31,
2010 - 20,253 72,631 18,024 9,007 - 1,728 121,643
-------- ---------- ---------- --------- -------- -------------- ----------- --------
Charged for
the period - 1,265 8,583 1,532 996 - 182 12,558
Transfers - 309 (311) 2 - - -
Disposals - (100) (603) (5,153) (30) - (1) (5,887)
-------- ---------- ---------- --------- -------- -------------- ----------- --------
Balance at
December
31, 2010 - 21,727 80,300 14,403 9,975 - 1,909 128,314
-------- ---------- ---------- --------- -------- -------------- ----------- --------
Charged for
the period - 478 2394 423 292 - 266 3853
Disposals - (5) (268) (630) (3) - - (906)
-------- ---------- ---------- --------- -------- -------------- ----------- --------
Balance at
March 31,
2011 - 22,200 82,426 14,196 10,264 - 2,175 131,261
-------- ---------- ---------- --------- -------- -------------- ----------- --------
Carrying
amount at
January 1,
2010 38,855 30,746 76,646 6,636 4,780 9,781 729 168,173
======== ========== ========== ========= ======== ============== =========== ========
Carrying
amount at
March 31,
2010 38,852 31,437 78,728 6,018 4,912 5,305 718 165,970
======== ========== ========== ========= ======== ============== =========== ========
Carrying
amount at
December
31, 2010 45,175 37,812 72,423 4,418 4,433 6,721 3,302 174,284
Carrying
amount at
March 31,
2011 45,124 37,358 70,241 3,945 4,162 7,765 3,036 171,631
======== ========== ========== ========= ======== ============== =========== ========
14. Property, plant and equipment and intangible assets
(continued)
As of March 31, 2011 property, plant and equipment with carrying
amount of BGN 28,078 thousand serves as collaterals under bank
loans extended to the Group, the Controlling Company and other
related parties (see also note 32.2).
15. Investment properties
March December
31, 2011 31, 2010
BGN'000 BGN '000
Cost
Balance at the beginning of the period 28,505 -
Acquisitions through business combinations - 28,592
Acquisitions 5
Disposals - (87)
-------------- ----------
Balance at the end of the period 5 28,505
-------------- ----------
Accumulated Depreciation
Balance at the beginning of the period 35 -
Charged for the period 102 35
--------------
Balance at the end of the period 137 35
-------------- ----------
Carrying amount at the beginning of the
period 28,470 -
============== ==========
Carrying amount at the end of the period 28,373 28,470
============== ==========
Investment properties amounting to BGN 28,592 thousand were
acquired in November 2010 through business combinations. The
properties were measured at fair value determined by licensed
valuation expert.
As of March 31, 2011, investment properties with carrying amount
of BGN 25,595 thousand serve as collaterals under bank loans
extended to the Group (see also note 28).
16. Investments in other companies
As of March 31, 2011 and December 31, 2010 the Group owns 6.92%
of the equity of Capital 3000 AD. The investment in Capital 3000 AD
has been fully impaired in prior reporting periods.
17. Goodwill
March December
31, 2011 31, 2010
BGN '000 BGN '000
Cost
Cost at the beginning of the period 19,575 18,297
Goodwill recognised during the year through
business combinations - 1,278
---------- -----------------
Cost at the end of the period 19,575 19,575
---------- -----------------
Impairment loss
Recognised during the period - (1,243)
---------- -----------------
Impairment loss at the end of the period (1,243) (1,243)
---------- -----------------
18,332 18,332
========== =================
As of March 31, 2011 goodwill with carrying amount of BGN 18,332
thousand (2010: BGN 18,332 thousand) has arisen as a result of the
acquisition of the subsidiary Naftex Petrol EOOD and BPI EAD.
In November 2010 the Group acquired control in BPI EAD and
Naftex Security EAD and as a result goodwill at the amount of BGN
35 thousand and BGN 1,243 thousand respectively was recognised.
Goodwill arising from the acquisition of Naftex Security EAD was
completely impaired as at the date of the acquisition.
A review for impairment of the carrying amount of goodwill
originated as a result of the acquisition of Naftex Petrol EOOD is
performed as of March 31, 2011 and the method of discounted net
cash flows is used. The method is based on the cash flows forecasts
prepared by the subsidiary's management for four-year period after
March 31, 2011. The assumption that the net cash flows after the
last forecast period will be constant is used. The used discount
rate of 12.76% is calculated as subsidiary's weighted average cost
of capital of the subsidiary. The result of the applied method
shows that the amount of the investment in the subsidiary exceeds
the total amount of net assets and goodwill as of March 31, 2011
and therefore no impairment loss on goodwill is recognised.
18. Interest-bearing loans granted
December
March 31, 31,
2011 2010
BGN'000 BGN'000
Long-term loans granted
Interest-bearing loans to related parties 7,124 34,902
7,124 34,902
---------- ---------
Short-term loans granted
Interest-bearing loans and deposits to
related parties 93,636 94,320
Interest-bearing loans to non-related parties 43 117
93,679 94,437
---------- ---------
100,803 129,339
========== =========
Receivables on interest-bearing loans granted to related parties
are disclosed in note 31.
19. Inventories
December
March 31, 31,
2011 2010
BGN'000 BGN'000
Non-current assets
Compulsory stock of fuel 34,939 34,939
---------- ---------
34,939 34,939
---------- ---------
Current assets
Goods, including: 45,285 75,347
Fuels 34,666 63,852
Lubricants and other goods 10,619 11,495
Materials 2,347 2,386
----------
47,632 77,733
---------- ---------
82,571 112,672
========== =========
As of March 31, 2011 and December 31, 2010 the Group stores
compulsory stock of fuel in compliance with the Mandatory Stock of
Crude Oil and Oil Products Act amounting to BGN 34,939.
As of March 31, 2011 available fuels are pledged as collateral
under utilised by the Group bank loans (see also note 24).
20. Trade and other receivables
December
March 31, 31,
2011 2010
BGN'000 BGN'000
Receivables from customers, incl. 80,727 48,610
Initial cost 82,989 50,631
Allowance for doubtful debts (2,262) (2,021)
Receivables from related parties 17,523 19,809
Guarantees for tender participation 2,241 2,284
Litigations and writs 9,020 8,825
Initial cost 3,064 3,240
Allowance for doubtful debts (16) (16)
Tax audit act 5,972 5,601
Advances granted 802 810
Refundable taxes, incl. 794 1,118
VAT 599 922
Other taxes 195 196
Other 3,286 1,725
---------- ---------
114,393 83,181
========== =========
The Group considers that the carrying amount of trade and other
receivables does not significantly differ from their fair value as
of March 31, 2011 and December 31, 2010.
Receivables from related parties are disclosed in note 31.
21. Cash
December
March 31, 31,
2011 2010
BGN'000 BGN'000
Cash at banks 5,354 7,628
Cash in transit 2,047 3,410
Cash on hand 151 134
---------- ---------
Cash as per cash flow statement 7,552 11,172
---------- ---------
Restricted cash 3 149
---------- ---------
Cash as per statement of financial position 7,555 11,321
========== =========
As of December 31, 2010 cash at the amount of BGN 149 thousand
is presented as restricted cash which serves as collateral for the
excise duty payable.
As of March 31, 2011 cash at the amount of BGN 4,121 thousand
(2010: BGN 6,963 thousand) serve as collateral under utilised bank
loans (see also note 24).
Cash in transit is cash collected from the petrol stations as of
the end of the reporting period which is to be received on the
Group's accounts in the beginning of the next reporting period.
22. Share capital
The share capital of the Group is presented at its nominal
value, according to the court decision for registration.
As of March 31, 2011 and December 31, 2010 the shareholders of
the Parent company are as follows:
December
March 31, 31,
2011 2010
% of share % of share
Shareholders capital capital
Petrol Holding AD 55.48% 55.48%
Naftex Petrol EOOD 41.82% 41.82%
Ministry of Economics 0.66% 0.66%
Other minority shareholders 2.04% 2.04%
100% 100%
============ ============
23. Reserve from adoption of IFRS
The reserve from adoption of IFRS as of March 31, 2011 and
December 31, 2010 amounts to BGN 20,436 thousand and BGN 20,456
thousand, respectively, and it has been formed as a result of a
revaluation of property, plant and equipment and intangible assets,
carried out in the period 1998 - 2001, as well as of revaluation as
of December 31, 2002, in relation to the first time adoption of
IFRS in the preparation of Parent company's separate financial
statements.
24. Borrowings
December
March 31, 31,
2011 2010
BGN'000 BGN'000
Non-current liabilities
Loans from financial institutions 3,274 3,442
Liabilities under leaseback
agreements 39,816 40,043
43,090 43,485
================== ==================
Current liabilities
Loans from financial institutions 44,230 27,326
Debenture loans 145,854 195,505
Liabilities under leaseback
agreements 1,497 1,509
Trade loans from related parties 13,867 15,867
Trade loans from non-related parties 1,956 -
------------------ ------------------
207,404 240,207
================== ==================
250,494 283,692
================== ==================
The average effective interest rate on loans from financial
institutions is within the range of 4% to 10% (2010: from 4% to
10%). Goods, cash in current accounts, receivables and promissory
notes are pledged as collateral for the loans.
In October 2006 the Parent company issued 2,000 registered,
transferable bonds with fixed annual interest rate of 8.375% and
issue value - 99.507% of the face value, which is determined at EUR
50,000 per one bond. The term of the bond issue is 5 years and the
maturity date is in October 2011. The principal is due in one
payment at the maturity date. As of March 31, 2011 the fair value
of the bonds, based on market prices is 66.5% of the nominal value.
The issue is secured by Group's receivables under loans, granted to
related parties and a corporate guarantee, issued by a subsidiary.
The transaction costs for the bond issue amount to BGN 3,049
thousand. Interest is paid once a year. The annual effective
interest rate is 8.955%. The purpose of the issue is working
capital financing, financing of investment projects and
restructuring of the Group's debt.
In 2011 the Group has repurchased bonds from the issue stated
above with nominal EUR 26,643 thousand at the price of EUR 18,650
thousand. The repurchased bonds are reported in these consolidated
financial statements as decrease of the debenture loan.
The liabilities under bank loans and leaseback agreements are
secured with pledge of property, plant and equipment, inventory,
cash and receivables of the Group as well as guarantees, promissory
notes and assets of related parties.
The liabilities to related parties are disclosed in note 31.
25. Obligations under finance lease
Present value of
Minimum lease payments minimum lease payments
March December March December
31, 2011 31, 2010 31, 2011 31, 2010
BGN'000 BGN'000 BGN'000 BGN'000
Amounts payable under
finance leases
Within one year 1,585 1,634 1,483 1,517
From one to two years 786 986 728 920
From three to five
years 1,337 1,515 1,293 1,459
Less: Interest payable
Within one year (102) (117) - -
From one to two years (58) (66) - -
From three to five
years (44) (56) - -
Present value of
finance lease
obligations 3,504 3,896 3,504 3,896
------------ ----------- ------------ ------------
Less: Present value of
finance lease
obligations with
maturity less than 1
year (1,483) (1,517)
------------ ------------
Present value of
finance lease
obligations with
maturity over 1 year 2,021 2,379
============ ============
Assets acquired by the Group under finance leases comprise of
vehicles. The lease term of the contracts is between 3 to 5
years.
Management believes that the fair value of the obligations under
finance leases does not differ significantly from their carrying
amount.
Liabilities under finance lease agreements are secured by
promissory notes issued by the Group in favour of the lessors and
expire at the termination date of the respective agreements.
26. Retirement benefits obligations
The Group accrues liabilities for retirement benefits at the
amount of BGN 211 thousand (BGN 21 thousand as short-term portion
and BGN 190 thousand as long-term portion). The amount of the
liabilities is based on an actuary valuation, taking into
consideration assumptions for mortality, disability, employment
turnover, salaries' growth, etc. The present value of the liability
is calculated by applying a discount factor of 4%.
27. Trade and other payables
December
March 31, 31,
2011 2010
BGN'000 BGN'000
Payables to suppliers 122,994 151,859
Related party payables 2,465 2,923
Tax payables, incl.: 65,181 49,457
VAT 30,820 18,278
Excise duties and other taxes 34,361 31,179
Payables to personnel and social security
funds 2,995 2,932
Advances received 8,543 18,161
Deferred income 161 174
Other 2,480 3,114
-------------- -------------
204,819 228,620
============== =============
Related party payables are disclosed in note 31.
The Group accrues liabilities for unused annual paid leave of
employees in compliance with IAS 19 Employee Benefits. The movement
of these liabilities for the reported periods is as follows:
December
March 31, 31,
2011 2010
BGN'000 BGN'000
Balance at the beginning of the period 747 1,568
Acquisitions through business combinations - 111
Accrued during the period 273 256
Utilised during the period (92) (1,188)
Balance at the end of the period, including: 928 747
============== =============
Paid leave 787 605
Social security contributions 141 142
The balance at the end of the period is presented in the
statement of financial position together with the current
liabilities for employee benefits.
The management believes that the carrying amount of the current
liabilities, presented in the consolidated statement of financial
position, approximates their fair value.
28. Current income tax payable
Current income tax includes corporate income tax accruals for
the current period and prior periods up to the amount, which is not
settled at the end of the reporting period.
March 31, December
2011 31, 2010
BGN'000 BGN'000
Income tax payable (recoverable) as of
January 1 3,629 662
Accrued corporate income tax 489 4,096
Corporate income tax paid (1,402) (1,137)
Acquisitions through business combinations - 8
Income tax payable at the end of the period 2,716 3,629
========== ==========
29. Subsidiaries
The subsidiaries, included in the consolidation, over which the
Group has control as of March 31, 2011 and December 31, 2010 are as
follows:
Investment
Investment as of
as of March December
Subsidiary Main activity 31, 2011 31, 2010
Wholesale with
Naftex Petrol EOOD fuels 100% 100%
Petrol Trans Express Transport
EOOD services 100% 100%
Service and
maintenance of
Petrol Technika EOOD fuel stations 100% 100%
Wholesale with
Petrol Gas EOOD fuels 100% 90%
Real estate and
Petrol Properties moveable
EOOD property trade 100% 100%
Naftex Petrol Trade Wholesale with
EOOD fuels 100% -
Management, rent
and sale of
Elite Petrol AD properties 99.99% 99.99%
Management, rent
and sale of
properties and
construction
Eurocapital-Bulgaria works through
AD sub-contractors 89.97% 89.97%
BPI EAD Rent of property 100% 100%
Security
services -
personal and
Naftex Security EAD properties 100% 100%
Legal advises,
management and
consulting
Jurex Consult AD services 79.95% 79.95%
In January 2011 the Parent company purchased the shares of the
minority owner of Petrol Gas OOD at the amount of BGN 1. As a
result the legal form of the subsidiary is changed to EOOD.
In January 2011 Naftex Petrol Trade EOOD, a new subsidiary, was
established. The share capital of the company is BGN 5 thousand, of
which BGN 10 are paid as of the date of these consolidated
financial statements.
30. Special purpose entities
In compliance with SIC 12 Consolidation - Special Purpose
Entities (SPE) and the approved accounting policy, the Group of
Petrol AD consolidates such entities because the substance of the
relationship between the Group and the SPEs indicates that they are
controlled by the Group, as follows:
-- The activities of the SPEs are being conducted on behalf of
Naftex Petrol EOOD according to its specific business needs so that
Naftex Petrol obtains benefits from the SPEs' operations,
-- Naftex Petrol EOOD has the decision-making powers to obtain
the majority of the benefits of the activities of the SPEs,
-- Naftex Petrol has rights to obtain the majority of the
benefits of the SPEs and is therefore exposed to risks incident to
their activities.
The consolidated SPEs controlled by the Group as at March 31,
2011 and December 31, 2010 are as follows:
Name of SPE Main activity
Petrol Trade EOOD Import of petroleum products
Naftex Trade EOOD Import of petroleum products
31. Disclosure of related parties and transactions
The related parties which the Parent company controls and has
significant influence on are disclosed in notes 29 and 30.
The Parent company is controlled by Petrol Holding AD.
The following transactions with related parties have been
performed during the reporting period:
Related party
Petrol Holding AD Controlling Company and Parent Company
New Co Zagora EOOD Company under common control
Interhotel Bulgaria Burgas Company under common control
EOOD
BC Izvor AD Company under common control
Ross Oil EOOD Company under common control
Air Lazur - General Aviation Company under common control
EOOD
Transcard D Company under common control
orsko Kazino D Company under common control
ransat AD Company under common control
Varna Business Services Company under common control
EOOD
rans Operator D Company under common control
Transcard Financial Services Company under common control
EAD
ma Sport E D Company under common control
Balneohotel Pomorie AD Company under common control
PSFC Chernomoretz D Company under common control
Black Sand Resort AD Company under common control
SOCCRAT EAD Company under common control
Federal Bulgaria Management Company under common control
AD
Petrol Card Service EOOD Company under common control
Vratzata OOD Company under common control
Transcard Payment Services Company under common control
EAD
31. Disclosure of related parties and transactions
(continued)
Related party
Bulgarian Rose Gardens EOOD Company under common control
Fransis Residence EOOD Company under common control
rans Telecom AD Associate of Petrol Holding AD
ma News D Associate of Petrol Holding D
Rex Lotto D Associate of Petrol Holding D
Petrol Engineering AD Associate of Petrol Holding D
The transactions performed relate primarily to:
-- purchase and sale of liquid fuels;
-- granting and receiving loans;
-- purchase and sale of property, plant and equipment;
-- holding fees and services.
The volume of the transactions performed with related parties
for first three months of 2011 and 2010 is as follows:
March March March March
Related 31, 31, 31, 31,
parties 2011 2010 2011 2010
BGN'000 BGN'000 BGN'000 BGN'000
Sale of Sale of Purchase of Purchase of
goods, goods, goods, goods,
services and services and services and services and
non-current non-current non-current non-current
assets assets assets assets
Controlling
company 92 53 672 977
Companies
under common
control 592 523 589 1,369
Associates - 1 - 66
Associates of
Petrol
Holding AD 67 76 1 6
751 653 1,262 2,418
============== ============== ============== ==============
March March March March
31, 31, 31, 31,
Related parties 2011 2010 2011 2010
BGN'000 BGN'000 BGN'000 BGN'000
Finance Finance Finance Finance
income income cost cost
Controlling company 19,114 1,284 18 -
Companies under common
control 113 5 5 1
Associates of Petrol
Holding AD 2 2 - -
Key management - - 290 -
19,229 1,291 313 1
======== ======== ======== ========
31. Disclosure of related parties and
transactions(continued)
As of March 31, 2011 and December 31, 2010 the outstanding
balances with related parties are as follows:
March March
31, December 31, December
Related parties 2011 31, 2010 2011 31, 2010
BGN'000 BGN'000 BGN'000 BGN'000
Receivables Receivables Payables Payables
Controlling company, incl. 106,629 138,255 3,071 3,626
Long-term
interest-bearing loans 2,538 30,727 - -
Short-term
interest-bearing loans 93,332 94,016 1,472 1,472
Companies under common
control, incl. 9,028 8,227 308 461
Long-term
interest-bearing loans 4,586 4,175 - -
Short-term
interest-bearing loans 304 304 - -
Associates of Petrol
Holding AD 1,473 1,446 21 20
Key management staff,
incl. 1,153 1,103 12,932 14,683
Short-term
interest-bearing loans - - 12,395 14,395
------------ ------------ --------- ----------
118,283 149,031 16,332 18,790
============ ============ ========= ==========
As of March 31, 2011 the Group has granted to its Controlling
Company unsecured interest bearing loans with interest rate in the
range from 4.93% to 9.50%, which are fully disbursed. The maturity
of these loans is in 2012.
The total amount of management remuneration of the members of
the Board of Directors and of the Supervisory Board, included in
the employee benefits expenses amount to BGN 286 thousand (2010:
BGN 388 thousand).
32. Contingent assets and liabilities
32.1. Contingent assets
In 2006 the Group invoiced and recognised income from penalties
at the amount of BGN 8,196 thousand which were accrued to
counterparty due to quantitative non-execution of a contract for
fuel supply. As of December 31, 2006 this recorded income was
reversed as the management estimated that the criteria for income
recognition in compliance with IAS 18 Revenue were not met. In this
relation a contingent receivable at the amount of BGN 8,196
thousand occurred for the Group because the receivable from the
Counterparty is not recognised in the financial statements.
32.2. Contingent liabilities
As of March 31, 2011 assets with a carrying amount of BGN 12,338
thousand are mortgaged and pledged as collateral on bank loans,
granted to related parties (see also note 14).
33. Events after the reporting period
In April 2011 the Group acquired additional 59,961 shares of the
capital of Eurocapital Bulgaria AD for the amount of BGN 4,543
thousand and thus the Group became a sole shareholder.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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