Petrol AD - Half Yearly Report - Part 2
29/08/2014 13:22
- Part 2: For the preceding part double click ID:nRSc3744Qa
balances and transactions, and any unrealised income and expenses arising from intra-group transactions, are
eliminated. Unrealised gains arising from transactions with equity-accounted investees are eliminated against the
investment to the extent of the Group's interest in the investee. Unrealised losses are eliminated in the same way as
unrealised gains, but only to the extent that there is no evidence of impairment.
2.6.6. Associates
Associates are those entities in 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, but not control over
these policies.
Investments in associates are presented in the statement of financial position using the equity method of accounting. They
are recognised initially at cost, which includes transaction costs. Subsequent to initial recognition, the consolidated
financial statements include the Group's share of the profit or loss and other comprehensive income of equity-accounted
investees, until the date on which significant influence or joint control ceases.
When the Group's share of losses exceeds its interest in an equity-accounted investee, the carrying amount of that
interest, is reduced to zero, and the recognition of further losses is discontinued except to the extent that the Group has
an obligation or has made payments on behalf of the investee.
2.6.7. Goodwill
Goodwill arising on the acquisition of subsidiaries is measured at cost less accumulated impairment losses (see also note
2.6.1.).
2.7 Going concern basis of accounting
The consolidated financial statements have been prepared on a going concern basis. In assessing whether the going concern
assumption is appropriate, the Management has taken into account all available information about the future, which is at
least, but is not limited to, twelve months from the end of the reporting period. This assumes that the Group will be able
to repay regularly its bond and trade liabilities, loans and interest due in accordance with the contractual agreements.
3. Definition and valuation of items of the statement of financial position and the statement of comprehensive
income
3.1. Property, plant and equipment and intangible assets
Property, plant and equipment, and intangible assets are measured initially at acquisition cost. If significant parts of an
item of property, plant and equipment have different useful lives, they are accounted for as separate items (major
components) of property, plant and equipment.
After initial recognition property, plant and equipment, and intangible assets are measured at cost less accumulated
depreciation and any accumulated impairment loss (see also note 3.5.2.).
Subsequent costs, including replacement of a component of an asset, are capitalised in the cost of the asset, only when it
is probable that future economic benefits associated with the expenditure will flow to the Group. The carrying amount of
the replaced items is derecognized in accordance with the requirements of IAS 16 Property, Plant and Equipment. All other
subsequent costs are recognized as incurred.
Gains or losses on disposal of property, plant and equipment (calculated as a difference between the proceeds from disposal
and the carrying amount of the asset) are recognised net in the other income/ expenses in profit or loss for the period.
When the use of a property, plant and equipment changes from owner-occupied to investment property, the property is
reclassified as investment property.
Depreciation and amortisation are recognised over the estimated useful lives applying the straight-line method.
Depreciation and amortisation are recognised in profit or loss of the current period. Land, assets under construction and
fully depreciated assets are not depreciated/ amortised.
The estimated useful lives are as follows:
Administrative and commercial buildings 25 years
Machinery, plant and equipment 2 - 25 years
Vehicles 4 - 10 years
Office equipment 7 years
Intangible assets 2 - 7 years
Depreciation/amortisation commences from the beginning of the month following the month when the asset is available for
use, and ceases at the earlier of the date when 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.
As of the end of the reporting period, the Group's Management reviews the useful lifes and the depreciation method of
property, plant and equipment and intangible assets. If any difference between expectations and previous accounting
estimates exists, the relevant adjustments are made.
3.2. Investment property
Investment property is 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 properties are carried at cost less depreciation and any impairment loss (see also note 3.5.2.).
Any gain or loss on disposal of investment property (calculated as a difference between the proceeds from disposal and the
carrying amount of the asset) is recognized in profit or loss for the period.
Depreciation of investment properties are recognized in profit or loss, over their estimated useful lives, applying the
straight-line method.
The estimated useful lives for the current and comparative periods are as follows:
Administrative and trade buildings 25 years
Machinery, plant and equipment 2, 3 and 25 years
Office equipment 7 years
As at the end of each reporting period, the Management of the Group reviews useful lives and the depreciation/amortization
method of investment property. In case the Management identifies differences between expectations and previous accounting
estimates, the relevant adjustments are made.
3.3. Inventory
Inventories are stated at the lower of cost and net realizable value. The cost of inventories comprises purchase price,
transportation costs, custom duties, excise duties and other similar costs. The net realizable value represents the
estimated selling price less estimated selling expenses.
Upon its consumption, the cost of inventories is measured using the following methods:
Retail of fuels weighted average cost
Wholesale of fuels first in, first out
Materials and other goods weighted average cost
3.4. Financial instruments
The Group classifies non-derivative financial assets into the loans granted and receivables category, and non-derivative
financial liabilities into the other financial liabilities category.
3.4.1. Non-derivative financial assets and financial liabilities - recognition and derecognition
The Group initially recognises loans and receivables and debt securities issued on the date that they are originated. All
other financial assets and financial liabilities are initially recognised on the trade date.
The Group derecognises a financial asset when the contractual rights to the cash flows from the asset expire, or it
transfers the rights to receive the contractual cash flows on the financial asset in a transaction in which substantially
all the risks and rewards of ownership of the financial asset are transferred, or it neither transfers nor retains
substantially all of the risks and rewards of ownership and does not retain control over the transferred asset. Any
interest in such derecognised financial assets that is created or retained by the Group is recognised as a separate asset
or liability.
3.4.1. Non-derivative financial assets and financial liabilities - recognition and derecognition (continued)
The Group derecognises a financial liability when its contractual obligations are discharged or cancelled, or expire.
Financial assets and liabilities are offset and the net amount presented in the statement of financial position when, and
only when, the Group has a legal right to offset the amounts and intends either to settle on a net basis or to realise the
asset and settle the liability simultaneously.
3.4.2. Non-derivative financial assets - measurement
Loans granted and receivables
These assets are initially recognised at fair value plus any directly attributable transaction costs. Subsequent to initial
recognition they are measured at amortised cost using the effective interest method less any impairment loss. Current
receivables are not amortised.
Cash and cash equivalents
In the statement of cash flows, cash comprises cash in hand, cash at banks and cash in transit, except for restricted cash,
which the Group temporary has no right to use. Cash in transit comprises cash collected from petrol stations as at the end
of the reporting period but actually received in the bank accounts of the Group in the beginning of the next reporting
period.
3.4.3. Non-derivative financial liabilities - measurement
Non-derivative financial liabilities are initially recognised at fair value less any directly attributable transaction
costs. Subsequent to initial recognition, these liabilities are measured at amortised cost using the effective interest
method.
3.5. Impairment
3.5.1. Non-derivative financial assets
Financial assets, not classified as at fair value through profit or loss, are assessed at each reporting date to determine
whether there is an objective evidence of impairment. Objective evidence that financial assets are impaired includes:
· default or delinquency by a debtor;
· restructuring of an amount due to the Group on terms that the Group would not consider otherwise;
· indications that a debtor or issuer will enter bankruptcy;
· adverse changes in the payment status of borrowers or issuers;
· the disappearance of an active market for a security;
· observable data indicating that there is measurable decrease in expected cash flows from a group of financial assets.
3.5.1. Non-derivative financial assets (continued)
Financial assets carried at amortised cost
The Group considers evidence of impairment for financial assets measured at amortised cost (loans and receivables) at both
a specific asset and collective level. All individually significant assets are individually assessed for impairment. Those
found not to be impaired are then collectively assessed for any impairment that has been incurred but not yet individually
identified. Assets that are not individually significant are collectively assessed for impairment. Collective assessment is
carried out by grouping together assets with similar risk characteristics.
In assessing collective impairment the Group uses historical trends of the probability of default, the timing of recoveries
and the amount of loss incurred, adjusted according to the management's judgement as to whether the current economic and
credit conditions are such, that it would possible for the actual losses to be greater or less than the suggested by the
historical trends.
An impairment loss is calculated as the difference between an asset's carrying amount and the present value of the
estimated future cash flows discounted at the asset's original effective interest rate. Losses are recognised in profit or
loss and reflected in an allowance account. When the Group considers that there are no realistic prospects of recovery of
the asset, the relevant amounts are written off. If the amount of impairment loss subsequently decreases and the decrease
can be related objectively to an event occurring after the impairment was recognised, then the previously recognised
impairment loss is reversed through profit or loss.
3.5.2. Non-financial assets
The carrying amounts of the Group's non-financial assets (other than inventories and deferred tax assets) are reviewed at
each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the
asset's recoverable amount is estimated. Intangible assets that have indefinite useful lives, or that are not yet available
for use, are tested annually for impairment. An impairment loss is recognised if the carrying amount of an asset or its
related cash-generating unit (CGU) exceeds its recoverable amount.
The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to sell. In
assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate
that reflects current market assessments of the time value of money and the risks specific to the asset or CGU. For
impairment testing, assets that cannot be tested individually are grouped together into the smallest group of assets that
generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or CGUs.
An impairment loss is reversed only to the extent that the asset's carrying amount does not exceed the carrying amount that
would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.
3.6. Registered capital and redemption of own shares
The registered capital is the capital of the Parent company, presented at historical cost as of the date of its
registration. The registered capital also comprises the equity of the special purpose entities 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 its subsidiaries - has reacquired shares of
the Parent company, their par value is presented as a decrease in share capital, and the difference below or above the par
value - in retained earnings, according to IAS 32 Financial Instruments: Disclosure and Presentation.
3.7. Deferred income and deferred expenses
Deferred income and deferred expenses in the statement of financial position of the Group comprises revenue and expenses,
which are prepaid in the current period, but relate to future periods, such as guarantees, insurance, subscriptions, rent,
etc.
3.8. Employment benefits
Defined benefit plans
In accordance with the Labour Code, the Group has an obligation to pay retirement benefits to its employees upon
retirement, based on the length of service, age and labour category. Since these benefits qualify for defined benefits plan
in accordance with IAS 19 Employee benefits, in accordance with the requirements of this standard the Group recognises the
present amount of the benefits as a liability.
The Group's obligation in respect of defined benefit plans is calculated separately for each plan by estimating the amount
of future benefit that employees have earned in the current and prior periods and discounting that amount.
The calculation is performed annually by a qualified actuary using the projected unit credit method. The Group determines
the net interest expense on the net defined benefit liability for the period by applying the discount rate used to measure
the defined benefit obligation at the beginning of the annual period to the net defined benefit liability.
The projected unit credit method presents a liability that may arise in future, based on a number of assumptions. From this
point of view, the method is sensitive to assumptions of values of main parameters, on which the obligation and the due
amount are dependent. The main assumptions, on which the amount of the obligation is dependent, are based on demographic,
financial and other assumptions.
Remeasurements arising from defined benefit plans comprise actuarial gains and losses and are recognised in other
comprehensive income. Net interest expense and other expenses related to defined benefit plans are recognised in profit or
loss.
Short-term employee benefits
Short-term employee benefit obligations are expensed as the related service is provided. A liability is recognised for the
amount expected to be paid if the Group has a present legal or constructive obligation to pay this amount as a result of
past service provided by the employee and the obligation can be estimated reliably.
3.9. Income tax
Income tax expense comprises current and deferred tax. It is recognised in profit or loss except to the extent that it
relates to a business combination, or items recognised directly in equity or in other comprehensive income.
Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted
or substantively enacted at the reporting date, and any adjustment to tax payable or receivable in respect of previous
years.
3.9. Income tax (continued)
Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for
financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for:
· temporary differences on the initial recognition of assets or liabilities in a transaction that is not a business
combination and that affects neither accounting nor taxable profit or loss;
· temporary differences related to investments in subsidiaries and jointly controlled entities to the extent that it is
probable that they will not reverse in the foreseeable future; and
· taxable temporary differences arising on the initial recognition of goodwill.
Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, based
on the laws that have been enacted or substantively enacted by the reporting date.
In accordance with the tax legislation enforceable for the years ended 2014 and 2013 the tax rate applied in calculation of
the tax payables of the Group is 10%. For the calculation of the deferred tax assets and liabilities as at June 30, 2014,
March 31, 2014 and December 31, 2013 a tax rate of 10% has been used.
Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities
and assets, and they relate to income taxes levied by the same tax authority.
A deferred tax asset is recognised for unused tax losses, tax credits and deductible temporary differences, to the extent
that it is probable that future taxable profits will be available against which they can be utilised. Deferred tax assets
are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax
benefit will be realised.
In determining the amount of current and deferred tax the Group takes into account the impact of uncertain tax positions
and whether additional taxes and interest may be due. The Group believes that the accruals for tax payables are sufficient
for all open tax periods for a number of factors, including interpretations of tax law and prior experience. This
assessment relies on estimates and assumptions and may involve a series of judgments about future events. New information
may become available that causes the Group to change its judgment regarding the adequacy of existing tax liabilities; such
changes to tax liabilities will impact tax expense in the period that such a determination is made.
3.10. Revenue and expenses recognition
3.10.1. Revenue from sales of goods, services and other income
Revenue is recognised when significant risks and rewards of ownership have been transferred to the customer, recovery of
the consideration is probable, the associated costs and possible return of goods can be estimated reliably, there is no
continuing management involvement with the goods, and the amount of revenue can be measured reliably.
Revenue is recognised at the fair value of the consideration received or receivable net of any granted discounts and
including the gross economic benefits received by or due to the Group. The amounts gathered on behalf of third parties such
as sales taxes (value added tax) are excluded from revenue. Revenue generated from sale of fuel is reported at its gross
amount with the excise due, which is considered an integral part of the price of the goods.
When the result of a transaction for services rendering 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
reliably estimated, the revenue is recognised to the extent that the expenses recognised are recoverable.
3.10.1. Revenue from sales of goods, services and other income (continued)
Rental income from investment property is recognised as revenue on a straight-line basis over the term of the lease. Lease
incentives granted are recognised as an integral part of the total rental income, over the term of the lease. Rental income
from other property is recognised as other income.
Gain (loss) from the sale of property, plant and equipment, and intangible assets and materials are presented as other
income (expenses).
When economic benefits are expected to arise in several financial periods and their relation to revenue can only be
generally or indirectly estimated, expenses are recognised in profit or loss based on procedures for systematic and
rational distribution.
In exchange of assets, revenue (expense) is reported as a result of the exchange transaction to the amount of the
difference between the fair value of the received asset and the carrying amount of the exchanged asset.
3.10.2. Finance income and finance costs
Finance income comprises interest income, gain on transactions with own bonds, foreign exchange rate gains and other
finance income. Finance costs comprise interest expenses, foreign exchange rate losses, bank fees, commissions and other
financial expenses.
Borrowing costs, which may be directly attributable to the acquisition, construction or production of a qualifying asset
prior to its being ready for its intended use or sale, and necessarily takes extended period of time, are capitalized in
part of the cost of the asset. All other finance income and costs are recognized in profit or loss for all instruments,
measured at amortized cost using the effective interest rate method.
Income for equity interests is recognised when the Group is entitled to receive the income.
Gains and losses from exchange rate differences are reported on a net basis.
3.11. Leases
3.11.1. Determining whether an arrangement contains a lease
At inception of an arrangement, the Group determines whether such an arrangement is or contains a lease. At inception or
upon reassessment of an arrangement that contains a lease, the Group separates payments and other consideration required by
the arrangement into those for the lease and those for other elements on the basis of their relative fair values. If the
Group concludes for a finance lease that it is impracticable to separate the payments reliably, then an asset and a
liability are recognised at an amount equal to the fair value of the underlying asset; subsequently the liability is
reduced as payments are made and an imputed finance charge on the liability is recognised using the Group's incremental
borrowing rate.
3.11.2. Leased assets
Assets held by the Group under leases which transfer to the Group substantially all of the risks and rewards of ownership
are classified as finance leases. On initial recognition the leased asset is measured at an amount equal to the lower of
its fair value and the present value of the minimum lease payments. Subsequent to initial recognition, the asset is
accounted for in accordance with the accounting policy applicable to that asset.
Assets held under other leases are classified as operating leases and are not recognised in the Group's consolidated
statement of financial position.
3.11.3. Lease payments
Payments made under operating leases are recognised in profit or loss on a straight-line basis over the term of the lease.
Lease incentives received are recognised as an integral part of the total lease expense, over the term of the lease.
Minimum lease payments made under finance leases are apportioned between the finance expense and the reduction of the
outstanding liability. The finance expense is allocated to each period during the lease term so as to produce a constant
periodic rate of interest on the remaining balance of the liability.
3.11.4. Operating lease
Costs incurred for assets leased under operating lease contracts are recognized in profit or loss on a straight-line basis
for the term of the contract. Lease incentives received is recognised as a reduction of the lease expenses on a
straight-line basis for the term of the lease contract.
Revenue realized from assets under operating lease contracts is recognized in profit or loss on a straight-line basis for
the term of the contract. Initial costs, directly related to the conclusion of the lease agreement, are capitalized in the
cost of the asset and are recognized as expenses on a straight-line basis for the term of the lease contract.
3.11.5. Leaseback agreements
A leaseback transaction is related to the sale of an asset and the hiring back of the same asset. The accounting treatment
of 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 means of granting financing to the lessee by the lessor, where
the asset serves as collateral. If, according to the provisions of the finance lease contract, there are no changes in the
rights 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 loans and borrowings liabilities 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.
3.12. Segments reporting
The information about operating segments in these consolidated financial statements is presented in accordance with 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. Determination of fair values
A number of the Group's accounting policies and disclosures require the measurement of fair value, for both financial and
non-financial assets and liabilities.
The Group has an established control framework with respect to the measurement of fair values. This includes a valuation
team that has overall responsibility for overseeing all significant fair value measurements, including Level 3 fair values
and reports directly to the Management.
4. Determination of fair values (continued)
The valuation team regularly reviews significant unobservable inputs and valuation adjustments. If third party information,
such as broker quotes or pricing services is used to measure fair values, then the valuation team assesses the evidence
obtained from third parties to support the conclusion that such valuations meet the requirements of IFRS, including the
level in the fair value hierarchy in which such valuations should be classified.
Significant unobservable inputs and valuation adjustments are reviewed regularly. If third party information, such as
broker quotes or pricing services is used to measure fair values, then the valuation team assesses the evidence obtained
from third parties to support the conclusion that such valuations meet the requirements of IFRS, including the level in the
fair value hierarchy in which such valuations should be classified.
Significant valuation issues are reported to the Management of the Group.
When measuring the fair value of an asset or liability, the Group uses market observable data as far as possible. Fair
values are categorised into different level in a fair value hierarchy based on the inputs in the valuation techniques as
follows.
· Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.
· Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either
directly (i.e. as prices) or indirectly (i.e. derived from prices).
· Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
If the inputs used to measure the fair value of an asset or liability might be categorised in different levels of the fair
value hierarchy, then the fair value measurement is categorised in its entirety in the same level of the fair value
hierarchy as the lowest level input that is significant to the entire measurement.
The Group recognises transfers between levels of the fair value hierarchy at end of the reporting period during which the
change has occurred.
Further information about the assumptions made in measuring fair values is included in note 15 - Investment property;
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 petroleum products in Bulgaria through own storage facilities of the Group; fuel
bunkering abroad;
· Retail of fuels - retail of petroleum and other products through a network of own petrol stations; servicing of
petrol stations and their belonging commercial and service facilities;
· Other activities - transportation of fuel with own and hired vehicles; revenue from rent and other activities.
5. Segments reporting (continued)
The segment information, presented to the Group's Management for the periods ended as of June 30, 2014 and 2013 is as
follows:
June 30, 2014 Wholesale of fuels Retail of fuels All other segments Total for the Group
BGN'000 BGN'000 BGN'000 BGN'000
Total segment revenue 390,412 266,812 6,072 663,296
Intra-group revenue 175,621 12,481 3,741 191,843
Revenue from external customers 214,791 254,331 2,331 471,453
Adjusted EBITDA (8,863) 10,223 1,064 2,424
Depreciation/amortization 1,494 3,947 453 5,894
June 30, 2013 Wholesale of fuels Retail of fuels All other segments Total for the Group
BGN'000 BGN'000 BGN'000 BGN'000
Total segment revenue 573,572 282,035 4,338 859,945
Intra-group revenue 242,047 13,218 2,862 258,127
Revenue from external customers 331,525 268,817 1,476 601,818
Adjusted EBITDA (5,406) 6,975 1,272 2,841
Depreciation/amortization 1,287 4,499 471 6,257
Impairment loss (137) - - (137)
The policies for recognition of revenue from intra-group sales and sales to external clients for the purposes of the
reporting by segments do not differ from these applied by the Group for revenue recognition in the consolidated statement
of profit and loss and other comprehensive income.
The Management of the Group evaluates the results of the performance of the segments on the basis of the adjusted EBITDA.
In the calculation of the adjusted EBITDA the effect of the impairment of assets is not taken into account. The
reconciliation of the adjusted EBITDA and the profit (loss) before tax is presented in the table below:
June30,2014BGN'000 June30,2013BGN'000
Adjusted EBITDA - reporting segments 1,360 1,569
Adjusted EBITDA - all other segments 1,064 1,272
Depreciation/amortization (5,894) (6,257)
Impairment loss - 137
Finance costs, net (19,101) (19,965)
Loss before tax (22,571) (23,244)
The revenue from sales to external customers in segment Wholesale of fuels for the second quarter of 2014 includes sales to
the largest customer of the segment at the amount of BGN 67,812 thousand.
6. Revenue from sales
Six months ended June 30, 2014BGN'000 Six months ended June 30, 2013BGN'000 Three months ended June 30,2014BGN'000 Three months ended June 30,2013BGN'000
Sale of goods 465,773 596,333 243,291 315,465
Sale of services 4,868 4,488 2,586 2,079
470,641 600,821 245,877 317,544
7. Other income
Six months ended June 30, 2014BGN'000 Six months ended June 30, 2013BGN'000 Three months ended June 30,2014BGN'000 Three months ended June 30,2013BGN'000
Surplus of assets 292 519 33 109
Insurance claims 51 81 28 49
Gain from sales of property, plant and equipment, incl. 46 50 11 35
Income from sales 81 127 32 89
Carrying amount (35) (77) (21) (54)
Income from penalties 40 39 24
Gain from liquidation of property, plant and equipment and materials, incl. - 106 - -
Income from liquidation - 781 - -
Carrying amount - (675) - -
Other 383 202 193 86
812 997 265 303
8. Materials and consumables
Six months ended June 30, 2014BGN'000 Six months ended June 30, 2013BGN'000 Three months ended June 30,2014BGN'000 Three months ended June 30,2013BGN'000
Fuels and lubricants 1,605 1,665 757 858
Electricity and heating 1,290 1,569 524 613
Spare parts 315 338 176 178
Office consumables 276 290 132 152
Working clothes 129 53 13 27
Water supply 65 49 34 26
Advertising materials 19 147 11 94
Other 199 130 102 50
3,898 4,241 1,749 1,998
9. Hired services
Six months ended June 30, 2014BGN'000 Six months ended June 30, 2013BGN'000 Three months ended June 30,2014BGN'000 Three months ended June 30,2013BGN'000
Commissions 2,856 2,303 1,632 1,353
Rents 1,240 1,166 614 573
Maintenance and repairs 890 803 467 381
Insurances 662 668 274 321
Transportation 626 795 318 487
Consulting and training 521 445 352 282
Cash collection 423 434 215 221
Communications 409 409 232 233
Software licenses 394 240 192 108
Advertising costs 324 196 258 100
State and municipal fees 277 560 126 236
Security 146 196 99 78
Holding fee - 1,052 - 525
Other 370 233 241 116
9,138 9,500 5,020 5,014
10. Personnel expenses
Six months ended June 30, 2014BGN'000 Six months ended June 30, 2013BGN'000 Three months ended June 30,2014BGN'000 Three months ended June 30,2013BGN'000
Wages and salaries 16,251 11,308 9,481 5,881
Social security contributions and benefits 2,841 2,791 1,373 1,611
19,092 14,099 10,854 7,492
11. Other expenses
Six months ended June 30, 2014BGN'000 Six months ended June 30, 2013BGN'000 Three months ended June 30,2014BGN'000 Three months ended June 30,2013BGN'000
Local taxes, taxes on expenses and other taxes 889 843 656 662
Penalties and indemnities 810 112 790 61
Scrap, shortages and derecognized assets 743 1,401 468 686
Entertainment expenses and sponsorship 227 290 69 218
Business trips 166 172 92 88
Loss from liquidation of property, plant and equipment and materials, incl. 47 - 46 24
Income from liquidation - - - (513)
Carrying amount 47 - 46 537
Impairment of assets - (137) - (137)
Other 59 58 37 40
2,941 2,739 2,158 1,642
12. Finance income and costs
Six months ended June 30, 2014BGN'000 Six months ended June 30, 2013BGN'000 Three months ended June 30,2014BGN'000 Three months ended June 30,2013BGN'000
Finance income
Interest income, including: 2,569 4,451 1,346 2,292
Interest income on loans granted 2,327 4,171 1216 2,127
Interest income on trade receivables 231 279 127 164
Other interest income 11 1 3 1
Gain on transactions with own bonds - - - -
Foreign exchange gain, net - - - 8,655
Other finance income - 5 - 1
2,569 4,456 1,346 10,948
Finance costs
Interest expenses, including: (16,706) (18,849) (8,635) (9,734)
Interest expenses on debenture loans (1,576) (1,729) (791) (853)
Interest expenses on bank loans (8,891) (9,693) (4,920) (5,078)
Interest expenses on finance lease (18) (29) (8) (14)
Interest expense on leasebacks (1,090) (1,129) (561) (562)
Interest expenses on trade loans (4,466) (3,517) (2,175) (2,324)
Interest expenses to the state budget (62) (19) (1) (1)
Interest expenses on trade payables (603) (2,733) (179) (902)
Foreign exchange rate loss, net (3,709) (4,451) (3,397) -
Bank fees, commissions and other financial expenses (1,255) (1,121) (608) (567)
(21,670) (24,421) (12,640) (10,301)
Finance income (costs), net (19,101) (19,965) (11,294) 647
13. Taxation
13.1. 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.
Six months ended June 30, 2014BGN'000 Six months ended June 30, 2013BGN'000 Three months ended June 30,2014BGN'000 Three months ended June 30,2013BGN'000
Current tax expense 465 615 122 312
Change in deferred tax, including: (28) (75) (45) (61)
Temporary differences recognized during the period 31 6 (5) (20)
Temporary differences originated during the period (59) (81) (40) (41)
Total tax expense 437 540 77 251
13.2. Effective tax rate
The reconciliation between the accounting profit (loss) and tax expense, as well as calculation of the effective tax rate
as of June 30, 2014 and 2013 is presented in the table below:
Six months ended June 30,2014BGN'000 Six months ended June 30,2013BGN'000
Loss before tax (22,571) (23,244)
Applicable tax rate 10% 10%
Tax benefit at the applicable tax rate (2,257) (2,324)
Tax effect of permanent differences 46 (772)
Tax effect of recognised in the current period tax asset unrecognised in prior periods 3 2,803
Tax effect of unrecognised tax asset in the current period, arisen in the current period 2,614 (8)
- More to follow, for following part double click ID:nRSc3744Qc