Petrol AD - 3rd Quarter Results - Part 2
18/12/2015 09:45
- Part 2: For the preceding part double click ID:nRSR5542Ja
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51,131 4,807
Finance costs
Interest costs, including: (4,789) (10,281)
Interest expenses on trade loans (2,078) (5,834)
Interest expenses on debenture loans (2,403) (2,393)
Interest expenses on trade and other payables (308) (2,054)
Negative exchange differences, net - (7,378)
Bank fees, commissions and other finance costs (195) (34)
(4,984) (17,693)
Finance income, net 46,147 (12,886)
13. Finance income and costs (continued)
During the period ending on September 30, 2015 the Company disposed of five of
its investments, which resulted in a gain of BGN 34,245 thousand. (See also
note 17).
14. Taxation
14.1. Tax expenses
Tax expense recognised in profit or loss includes the amount of current and
deferred income tax expenses in accordance with IAS 12 Income taxes
30 September2015BGN'000 30 September2014BGN'000
Current tax benefit (expense) 222 -
Change in deferred tax, including (9,480) (7)
Temporary differences arising during the period (11,130) 34
Temporary differences recognised during the period 1,650 (41)
Total tax expense (benefit) (9,258) (7)
14.2. Effective tax rate
Reconciliation between accounting profit and tax expense and calculation of
the effective tax rate as of September 30, 2015 and year 2014 is presented in
the table below:
30 September2015BGN'000 30 September2014BGN'000
Accounting loss for the year (42,685) (4,147)
Applicable tax rate 10% 10%
Tax expense (benefit) at the applicable tax rate (4,269) (415)
Tax effect of:
Permanent differences (1,497) 65
Tax asset in the current year, arisen in previous periods (3,492) 343
Tax expense (income) (9,258) (7)
Effective tax rate - -
The respective tax periods of the Company may be subject to inspection by the
tax authorities until the expiration of 5 years from the end of the year in
which a declaration was submitted, or should have been submitted. Consequently
additional taxes or penalties may be imposed in accordance with the
interpretation of the tax legislation. The Company's management is not aware
of any circumstances which may give rise to a contingent additional liability
in this respect.
14.2. Effective tax rate (continued)
The last tax audit of the Company commenced in December 2014 and encompasses
social security's and personal income tax for the period December 2008 till
December 2013, corporate income tax and value added tax for year 2013. The
latest tax inspection dates from August, 2015and encompasses review of
company's corporate income tax for year 2014 and value added tax as at June,
2015.
As at the date of approval of these financial statements the tax audit,
neither inspection nor tax audit has been finalised.
14.3. Recognised deferred tax assets and liabilities
The Company has recognised deferred tax assets and liabilities and respective
movement attributable to the following positions:
Asset (liability) as at January 2014 Recognised in profit and loss Asset (liability) as at December, 31 2014 Recognised in profit and loss Asset (liability) as at 30 September 2015
BGN'000 BGN'000 BGN'000 BGN'000 BGN'000
Property, plant and equipment (598) (111) (709) 12 (697)
Impairment of assets 1,246 27,082 28,328 9,455 37,783
Provisions for unused paid leave and other provisions 97 (37) 60 13 73
Other temporary differences, including unpaid benefits to individuals 19 (19) - - -
764 26,915 27,679 9,480 37,159
15. Property, plant and equipment
Land BGN'000 Buildings BGN'000 Plant and equipment BGN'000 Vehicles BGN'000 Other BGN'000 Assets under constr.BGN'000 Total BGN'000
Cost
Balance at 01 January 2014 9,935 12,191 27,351 841 6,555 1,786 58,659
Additions 68 52 579 1 110 2,704 3,514
Transfers - 689 2,691 - 287 (3,667) -
Disposals (2,239) (4,360) (7,031) (151) (1,748) (1) (15,530)
Balance at 31 December 2014 7,764 8,572 23,590 691 5,204 822 46,643
Additions - - 143 - 24 450 617
Disposals (95) (420) (833) - (40) (70) (1,458)
Balance at 30 September 2015 7,669 8,152 22,900 691 5,188 1,202 45,802
Accumulated depreciation
Balance at 01 January 2014 - 5,035 15,076 780 4,717 - 25,608
Additions - 470 1,595 17 465 - 2,547
Transfers - - (2) - 2 - -
Disposals in the period - (1,481) (3,646) (151) (1,415) - (6,693)
Balance at 31 December 2014 - 4,024 13,023 646 3,769 - 21,462
Accumulated - 232 972 7 271 - 1,482
Disposals - (212) (787) - (38) - (1,037)
Balance at 30 September 2015 - 4,044 13,208 653 4,002 - 21,907
Carrying amount at 1 January 2014 9,935 7,156 12,275 61 1,838 1,786 33,051
Carrying amount at 31 December 2014 7,764 4,548 10,567 45 1,435 822 25,181
Carrying amount at 30 September 2015 7,669 4,108 9,692 38 1,186 1,202 23,895
23,895
Property, plant and equipment with carrying amount of BGN 9,343 thousand
(2014: BGN 7,079 thousand) were mortgaged as collateral under bank loans
granted to the Controlling company until November 2013 and to subsidiaries and
third not related parties. BGN 9.343 thousand also comprises PPP given as a
security in favour of NRA in relation to a tax inspection report (see also
notes 29 and 30).
Assets under construction include expenses in relation to reconstruction of
sites.
16. Intangible assets
Software BGN'000 Licenses BGN'000 Other BGN'000 Total BGN'000
Cost
Balance at 01 January 2014 367 3,116 702 4,185
Additions - 43 10 53
Disposals (7) (111) - (118)
Balance at 31 December 2014 360 3,048 712 4,120
Disposals - (2,856) - (2,856)
Balance at 30 September 2015 360 192 712 1,264
Accumulated depreciation
Balance at 01January 2014 219 2,990 449 3,658
Accumulated 120 43 107 270
Disposals (7) (111) - (118)
Balance at 31 December 2014 332 2,922 556 3,810
Accumulated 28 37 81 146
Disposals - (2,814) - (2,814)
Balance at 30 September 2015 360 145 637 1,142
Carrying amount at 1 January 2014 148 126 253 527
Carrying amount at 31 December 2014 28 126 156 310
Carrying amount at 30 September 2015 - 47 75 122
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47
75
122
17. Investments in subsidiaries
Subsidiary companies Activity 30 September 2015 31 December 2014
BGN000 Share (%) BGN000 Share (%)
BPI EAD Real estate management and other 5,364 100 5,364 100
Petrol Technologies OOD IT Services 821 98.8 - -
Petrol Gas EOOD Wholesale of fuels 451 100 451 100
Petrol Finances OOD Financial and accounting services, advisory services 99 99.0 - -
Petrol Properties EOOD Real Estate and Moveable Property Trading 5 100 5 100
Naftex Petrol EOOD Wholesale of fuels - 100 40,000 100
Elit Petrol AD Asset Management - 99.99 70,915 99.99
Petrol Eco Tour Invest EOOD Consultancy and engineering services - - 5 100
Varna Storage EOOD Trade with petrol and petrol products - - 18,749 100
Petrol Trans Express EOOD Transport services - - 996 100
Petrol Technika EOOD Service and maintenance of petrol stations - - 50 100
Petrol Zapad EOOD Trade with petrol products - - 2,991 100
6,740 139,526
In November, 2014 the Company established a 100% subsidiary Petrol Zapad EOOD
by a non-monetary equity contribution of property, plant and equipment and
other tangible and intangible assets pertaining the 10 fuel stations total
valued at BGN 2,992 thousand with carrying amount of BGN 5,402 thousand. As a
result from the equity contribution a loss of BGN 2,410 thousand was
accumulated. In the beginning of January, 2015 a decision to sell the
investment in Petrol Zapad EOOD was met to a third not related party. Selling
price agreed comes up to BGN 2,992 thousand and which was paid at the date on
signing the agreement.
In February, 2015 the company acquired 99% of the share capital of Petrol
Technologies EOOD for BGN 495, which was subsequently renamed to Petrol
Finances OOD. In August, 2015 the Company participated in the capital increase
subscribing 98.505 new shares for a cash contribution in the amount of BGN 99
thousand.
In March 2015 the Company purchased 100% of the share capital of EuroCapital
Bulgaria EAD from a subsidiary for the purchase price of BGN 28,500 thousand.
During the same month, the Company sold 100% of the shares in Varna Storage
EOOD and EuroCapital Bulgaria EAD to another subsidiary company for a selling
price of BGN 80,100 thousand. At the date of signing of contracts for the sale
of shares, obligations arising under the transactions aforementioned are fully
repaid.
17. Investments in subsidiaries (continued)
In 2014 the Company recognizes loss from impairment of investments in
subsidiaries in the amount of BGN 228,311 thousand because of the reduced
trading volumes in one of its subsidiaries and its forthcoming restructuring
Naftex Petrol EOOD.
For the period ending on September 30, 2015 in connection with the cessation
of business activity and the insolvency proceedings initiated in Naftex Petrol
EOOD, the Company fully impaired its investment in that subsidiary,
recognizing additional impairment loss of BGN 40, 000 thousand.
As at September 30, 2015 Management performed analysis of Elit Petrol AD's
investment value, based on which a decision to fully impair that investment,
was met. The decision was driven by a foreclosure imposed on assets controlled
by Elit Petrol's subsidiaries.
In August 2015 the Company became a shareholder in Petrol Technologies OOD and
subscribed for 3,800 new shares, each with par value of BGN 100 in a capital
increase for a cash contribution of BGN 380 thousand, representing 99.74% of
the share capital the subsidiary. In the same month the Managing Board of the
Company met the decision that the Company is to participate in the capital
increase of Petrol Technologies Ltd form BGN 381 thousand to BGN 831 thousand
and subscribed for further 4,410 new shares for a cash contribution of BGN 441
thousand.
In August, the Company sold 100% of its share in Petrol Trans Express EOOD and
in Petrol Technika EOOD to none related parties of the selling price of BGN
2,360 thousand and BGN 80 thousand.
All subsidiaries are domiciled in Bulgaria.
18. Financial assets available for sale
As a result from the loss of control over the subsidiary company Petrol Eco
Tur Invest EOOD, the investment cost amounting to BGN 5 thousand in shown in
these financial statements as non-current asset available for sale.
19. Inventories
30 September2015BGN000 31 December2014BGN000
Goods, including: 17,356 18,831
Petrol products 11,099 12,407
Other goods 6,257 6,424
Materials 1,999 1,881
19,355 20,712
20. Loans granted
30 September2015BGN'000 31 December2014BGN'000
Long-term loans
Loans granted to related parties, including - 22,609
Initial value - 38,034
Allowance for impairment - (15,425)
Loans granted to third parties, including - -
Initial value 21,034 21,034
Allowance for impairment (21,034) (21,034)
- 22,609
Short-term loans
Loans granted to related parties, including 6,517 10,627
Initial value 13,299 16,133
Allowance for impairment (6,782) (5,506)
Loans granted to third parties, including 910 810
Initial value 6,099 5,999
Allowance for impairment (5,189) (5,189)
7,427 11,437
7,427 34,046
Receivables from loans granted to related parties are disclosed in note 29.
In 2014 the company recognised an impairment loss on receivables from the
related party that was a controlling entity till November 2013 on loans
granted and interest receivable in the amount of BGN 25,382 thousand.
Impairment loss was recognised because insolvency proceedings were initiated
and difficulties in collecting the receivables were experienced.
In 2014 due to fall in trading volumes an allowance for impairment was made on
a loan granted to a subsidiary company coming up to BGN 15,425 thousand, which
represented the amount of outstanding liability as at the date of issuance of
the individual financial statements of the Company for the year ending 2014.
As at the date of these financial statements, the subsidiary managed to
partially repay its obligation, thus resulting in a reversed impairment
allowance of BGN 13.309 thousand.
For the period ending on September 30, 2015 Company managed to collect BGN 840
thousand from loans granted to other related parties, which were fully
impaired in previous periods.
Management performed an analysis of loans granted in order to determine their
fair values and their respective level in the fair value hierarchy. Management
considers that the carrying amounts of granted loans in the statement of
financial position are reasonable approximations of their fair value as at
September 30, 2015 and December 31, 2014 within Level 3 category.
21. Trade and other receivables
30 September2015BGN'000 31 December2014BGN'000
Receivables from clients, including 30,438 23,554
Initial value 36,181 29,297
Allowance for impairment (5,743) (5,743)
Cession 4,196 -
Receivables from related parties 3,238 25,828
Initial value 3,305 25,895
Allowance for impairment (67) (67)
Advances granted 2,918 1,218
Initial value 3,967 2,267
Allowance for impairment (1,049) (1,049)
Guarantees for participation in tender procedures 1,387 1,477
Deferred expenses 331 109
Litigations and writs 144 45
Initial value 444 345
Allowance for impairment (300) (300)
Other 1,287 1,146
Initial value 2,709 2,568
Allowance for impairment (1,422) (1,422)
43,939 53,377
Receivables from related parties are disclosed in note 29.
In accordance with the adopted policy, the Company grants to its customers a
credit period after the expiry of which penalty interest for overdue payment
is accrued on the unsettled balance to the amount set in each individual
contract.
As at the end of each reporting period the Company performs a detailed review
and analysis of overdue trade receivables, as a result of which receivables
evaluated as uncollectable are impaired. Other trade receivables usually
overdue by more than 360 days are completely impaired, since the historical
experience indicates they are not recoverable.
Management performed an analysis of the trade receivables in order to
determine their fair values and their level in the fair value hierarchy. The
Management considers that the carrying values of the trade and other
receivables in the statement of financial position are reasonable
approximations of their fair value as at September 30, 2015 and December 31,
2014 within Level 3 category.
The Company is of the opinion that unimpaired overdue receivables are
collectible based on historical information about payments, guarantees
received and a detailed analysis of the credit risk and collaterals of its
customers.
22. Current income tax
The excess of corporate taxes paid during the current and prior periods above
tax payables as at September 30, 2015 and December 31, 2014 is at the amount
of BGN 277 thousand and BGN 499 thousand respectively, and is presented in the
statement of financial position as refundable income tax
23. Cash and cash equivalents
30 September2015BGN'000 31 December2014BGN'000
Cash at banks - 2,855
Cash in transit 1,987 3,167
Cash on hand 71 71
Cash and cash equivalents in Statement of Cash Flows 2,058 6,093
Blocked cash amount 3,706 450
Cash and cash equivalents in the Statement of Financial Position 5,764 6,543
The amounts presented as blocked cash as at September 30, 2015 in Cash and
Cash Equivalents comprise:
BGN 1,050 thousand held at a bank account that is blocked as a bank guarantee
under a bank loan agreement to serve as a security for a public tender
participation
BGN 1,207 thousand bank guarantees issued in favor of National Revenue Agency
with respect to a proceeding of an appeal against a tax audit
BGN 1,449 thousand held in bank accounts, representing restricted cash arising
from a disputed in court by the Company creditor's claim against guarantee
contract of a subsidiary of the Company (see also note 30)
Cash in transit comprises cash collected from fuel stations as at the end of
the reporting period but actually received in the bank accounts of the Company
in the beginning of the next reporting period.
24. Registered capital
The registered capital is presented at its nominal value in accordance with
the court decision for registration. As at September 30, 2015 and December 31,
2014 the fully paid-in capital to the amount of BGN 109,250 thousand is
distributed in 109,249,612 registered shares with a nominal value of BGN 1
each.
24. Registered Capital (continued)
As of the end of the reporting period, the shareholders in the Company are as
follows:
Shareholder 30 September2015 31 December2014
Alfa Capital AD 28.85% 28.85%
Julinor EOOD 23.11% 23.11%
Correct Pharm EOOD 18.31% 18.31%
Perfeto consulting EOOD 16.43% -
Corporate Commercial Bank AD 5.51% 5.51%
VIP Properties EOOD 2.26% 18.31%
The Ministry of Economy and Energy of the Republic of Bulgaria 0.65% 0.65%
Naftex Petrol EOOD - 0.34%
Varna Storage EOOD - 0.04%
Other minority shareholders 4.88% 4.88%
100.00% 100.00%
The order of distribution of profits and covering of losses is set out in the
Commercial Act and the Articles of Association of the Company. The Company
retains at least 1/10 of the profit in fund "Reserves" until it reaches 1/10
of the capital.
25. Basic net earnings (loss) per share
Loss per share is calculated on the basis of net profit (loss) attributable to
ordinary shareholders and the weighted average number of ordinary shares
outstanding during the period.
30 September 2015 30 September 2014
Weighted average number of shares (in thousands) 109,250 109,250
Profit (loss) in thousands of BGN (33,427) (4,140)
Earnings (loss) per share in BGN (0.31) (0.04)
26. Loans and borrowings
30 September2015BGN'000 31 December2014BGN'000
Non-current liabilities
Trade loans from related parties 813 81,149
Debenture loans 36,190 36,073
37,003 117,222
Current liabilities
Debenture loans 2,068 2,838
2,068 2,838
39,071 120,060
The loans received from related parties are disclosed in note 29.
26. Loans and borrowings (continued)
In October, 2006 the Company issued 2,000 registered transferable debenture
notes 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 bond. The principal is due
in one payment at the maturity date. At the general meetings of the note
holders conducted in the end of year 2011, it was decided to extend the term
of the issue until January 26, 2017
The issue is secured by the Company's receivables on granted loans to the
Controlling Company until November 2013 and by a corporate guarantee issued by
a subsidiary. Interest is paid once a year. The annual effective interest rate
after the extension is 8.6%. The purpose of issue is providing of working
capital, financing in investment projects and restructuring of a previous
Company's debt.
As at the date of the present financial statements the nominal value of the
bond liability is EUR 18,659 thousand and the fair value of the bond liability
is BGN 36,494 thousand (2014: BGN36,494 thousand) calculated at an interest
rate of 9.12%(2014:9.12%).
27. Obligation for defined benefit retirement compensations
During the current reporting period the Company accrued retirement benefits to
the amount of BGN 383 thousand. The liability is determined on the basis of an
actuarial valuation grounded on assumptions for mortality, disability,
employment turnover, salary increases, etc. The present value of the liability
is calculated using a discount factor of 3.5% (2014: 3.5%).
Actuarial assumptions
The following are the principal actuarial assumptions at the reporting date:
30 September2015 31 December2014
Discount rate at the end of the period 3.5% 3.5%
Future salary increases 4% 4%
Assumptions regarding mortality growth presents the probability employees to
live to a certain age giving them right to a pension. It is calculated for
each employee separately based on their gender and their current age at the
moment of performing the valuation. As at September 30, 2015 and December 31,
2014 a table was used indicating mortality and average longevity of Bulgarian
population for the period 2008-2010 of the National Statistical Institute.
The following table presents a sensitivity analysis against the main mortality
assumptions as at September 30, 2015 based on a method which extrapolates the
effect on the retirement benefit obligations with a reasonable change in the
main assumptions as at the end of the reporting period
27. Obligation for defined benefit retirement compensations (continued)
Major assumptions Change with one point EffectBGN'000
Discount rate 1% (26)
Discount rate -1% 29
Staff turnover, annually -1 27
Staff turnover, annually 1 (27)
Salary growth 1% 19
Salary drop -1% (19)
Mortality (probability for dying by age) -50% 17
Mortality (probability for dying by age) 50% (16)
Although the analysis does not take account of the full distribution of cash
flows expected under the plan, it does provide an approximation of the
sensitivity of the assumptions shown.
28. Trade and other payables
30 September2015BGN'000 31 December2014BGN'000.
Payables to suppliers 12,764 38,111
Advances received 2,573 883
Payables to personnel and social security funds 1,830 1,346
Payables to related parties 1,549 27,402
Withholding and other tax payables 1,429 1,219
Deferred income 214 329
Other 1,121 964
21,480 70,254
Related party payables are disclosed in note 29.
The Company accrues unused paid leave provision of employees in compliance
with IAS 19 Employee Benefits. The movement in the provision for the period is
as follows:
:
30 September2015BGN'000 31 December2014BGN'000
Balance at the beginning of the period 300 343
Accrued during the period 199 165
Utilised during the period (135) (208)
Balance at the end of the year, including: 364 300
Paid leaves 309 243
Social security on paid leaves 55 57
28. Trade and other payables (continued)
The balance at the end of the year is presented in the statement of financial
position together with current payable to personnel.
Management performed an analysis of trade payables in order to determine their
fair values and their level in the fair value hierarchy. Management considers
that the carrying amounts of the current payables in the statement of
financial position are reasonable approximations of their fair value as at
September 30, 2015 and December 31, 2014 within Level 3 category
29. Disclosure of related parties and related parties transactions
Related parties which the Company controls are disclosed in note 17.
During the reporting period transactions with the following related parties
have been performed:
Related Party
Naftex Petrol EOOD Subsidiary
Naftex Security EAD Subsidiary of Naftex Petrol EOOD
Jurex Consult AD Subsidiary of Naftex Petrol EOOD till November 2014
EuroCapital Bulgaria AD Subsidiary of Naftex Petrol EOOD till September 2014. Related party with loss of control from October, 2014
Varna Storage EOOD Subsidiary of Petrol AD till March 2015 and subsidiary of Elit Petrol AD from March, 2015
Elit Petrol -Lovech EAD Subsidiary of Elit Petrol AD
Petrol Trans Express EOOD Subsidiary till July, 2015
Petrol Technika EOOD Subsidiary till August, 2015
BPI EAD Subsidiary
Petrol Gas EOOD Subsidiary
Petrol Properties EOOD Subsidiary
Elit Petrol AD Subsidiary
Petrol Eco Tur Invest EOOD Subsidiary till September 2014, control lost effective October 2014
Petrol Finances OOD Subsidiary from February, 2015
Petrol-Zapad EOOD Subsidiary from January, 2015
Petrol Sever EOOD Subsidiary of Naftex Petrol EOOD
Petrol Technologies OOD Subsidiary from August, 2015
Subsidiary from August, 2015
The performed transactions mainly relate to:
· purchase and sale of liquid fuels;
· loans grants and receipts;
· purchase and sale of property, plant and equipment;
· rental fees and other services.
29. Disclosure of related parties and related parties transactions
(continued)
The volume of transactions with related parties as at September 30, 2015 and
September 30, 2014 are as follows:
Related party 30 September2015 30 September2014 30 September2015 30 September2014
BGN'000 BGN'000 BGN'000 BGN'000
Sales of goods and services Sales of goods and services Purchase of goods and services Purchase of goods and services
Subsidiaries 1,383 2,909 8,567 209,394
Subsidiaries of Naftex Petrol EOOD - 33 - 431
Subsidiaries of Elit Petrol AD 17 - 6,178 -
Other related parties 19 - 22 -
1,419 2,942 14,767 209,825
Related party 30 September2015 30 September2014 30 September2015 30 September2014
BGN'000 BGN'000 BGN'000 BGN'000
Finance income Finance income Finance costs Finance costs
Subsidiaries 16,487 2,849 2,253 7,801
Subsidiaries of Elit Petrol AD 169 - 130 -
16,656 2,849 2,383 7,801
In March, 2015 the Company bought 100% of EvroCapital Bulgaria EAD share
capital through a subsidiary for BGN 28.500 thousand. During the same period,
the Company sold 100% of its shares in EvroCapital Bulgaria EAD and in Varna
Storage EOOD to a subsidiary for BGN 80.100 thousand. As at the date of the
agreements signings for the above two transactions, liabilities incurred there
under have been settled in full. (See also note 17)
As at September 30, 2015 and as at December 31, 2014 outstanding balances with
related parties are as follows:
Related party 30 September2015 31 December2014 30 September2015 31 December2014
BGN'000 BGN'000 BGN'000 BGN'000
Receivables Receivables Payables Payables
Subsidiaries, including 6,097 59,054 2,298 108,551
Long-term loans - 22,609 813 81,149
Short-term loans 4,494 10,627 - -
Receivables from dividends 142 23,470 - -
Subsidiaries of Naftex Petrol EOOD 6 10 - -
Subsidiaries of Elit Petrol AD, incl.: 3,625 - 28 -
Short-term loans 2,023 - - -
Other related parties 27 - 36 -
9,755 59,064 2,362 108,551
29. Disclosure of related parties and related parties transactions
(continued)
In December 2011 the Company received a long-term loan from a subsidiary in
relation with the repurchase of issued bonds at the amount of USD 80,400
thousand, with the Bulgarian leva equivalent of the principal as at December
31, 2014 amounting to BGN 79,784 thousand, at nominal interest rate 9.6% and
with maturity date November 25, 2018. In December 2014 the currency of the
loan was changed from USD to BGN.
The loans granted and trade receivables from related parties are not secured.
The total amount of key management personnel remuneration of the Company
included in the personnel expenses amounts to BGN 950 thousand. (Sept., 2014:
BGN 846 thousand).
30. Contingent liabilities
As at September 30, 2015 the Company has contingent liabilities including
guaranteed promissory notes amounting to BGN 15 thousand; promissory notes for
mortgages on plant, machinery and equipment in relation with bank loans
granted to third parties and related parties with a total carrying amount of
BGN 8,764 thousand. Pledged property in NRA's favor is with total carrying
value of BGN 585 thousand.
The Company is a co-debtor for lease obligations amounting to BGN 3,695
thousand and a guarantor under a loan agreement for amounts up to BGN 35,000
thousand; a guarantor of a stand-by credit to a third party for the issuance
of a bank guarantee of BGN 10,000 thousand; a guarantor of a subsidiary for
the amount of BGN 29,522 thousand.
The Company has pledged inventory in the amount of BGN 478 and cash
equivalents in the amount of BGN 2,257 thousand.
In order to secure its liabilities under the Public Procurement Act the
Company has set up a bank guarantee amounting to BGN 1,024 thousand and
another one in favor of National Revenue Agency with respect to a proceeding
of an appeal against a tax audit act for the amount of BGN 1,962 thousand.
A creditor of a subsidiary has unreasonably claimed in court responsibility of
Petrol AD under a guarantee contract for credit limit, which resulted in
restriction imposed on the bank accounts of the Parent company up to the
amount of USD 29,983 thousand. That claim is disputed in court by Petrol AD,
since its responsibility as a guarantor is not occurred or/and is extinguished
pursuant to art. 147 paragraph 2 of the Obligations and Contracts Act.
At the time of signing the guarantee agreement, the due term to settle the
contractual framework arrangements between the lender and subsidiary was July
1, 2014.
The term of the credit limit agreement was further extended without the
consent of the guarantor, so that the latter responsibility has fallen upon
the expiration of six months after the originally agreed time limit, within
which the creditor has brought an action against the principal debtor.
The term set forth in art. 147, paragraph 1 of Obligations and Contracts Act
is final and upon its expiry it represents a terminated guarantee by the
Company. Therefore Management believes that its arguments would be upheld in
full by the competent court.
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