Petrol AD - Half Yearly Report - Part 3
29/08/2014 13:22
- Part 3: For the preceding part double click ID:nRSc3744Qb
Tax effect from consolidation adjustments 31 841
Tax expense 437 540
Effective tax rate - -
The respective tax periods of the Group 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 Group's management is not
aware of any circumstances which may give rise to a contingent additional liability in this respect.
13.3. Recognised deferred tax assets and liabilities
Deferred tax assets and liabilities were recognized in respect of the following positions:
Asset (liability) as at January 1, 2013 Recognised in profit and loss Asset (liability) as at June 30, 2013 Recognised in profit and loss Asset (liability) as at December 31, 2013 Recognised in profit and loss Asset (liability) as at June 30, 2014
BGN'000 BGN'000 BGN'000 BGN'000 BGN'000 BGN'000 BGN'000.
Property, plant and equipment (2,371) 63 (2,308) 13 (2,295) 29 (2,266)
Impairment of assets 1,779 (18) 1,761 (246) 1,515 (6) 1,509
Tax loss carry-forwards 26 13 39 21 60 (31) 29
Subsequent measurement of assets - - - 12 12 (12) -
Provisions for unused paid leave and other provisions 185 20 205 (28) 177 55 232
Excess of interest payments in accordance with CITA 6 4 10 (5) 5 (1) 4
Other temporary differences, including unpaid benefits to individuals 720 (7) 713 11 724 (6) 718
345 75 420 (222) 198 28 226
14. Property, plant, equipment and intangible assets
Land BGN'000 Buildings BGN'000 Plant andequip-mentBGN'000 Vehicles BGN'000 Other assets BGN'000 Assets underconstruc-tionBGN'000 Intan-gible assets BGN'000 Total BGN'000
Cost
Balance at January 1, 2013 43,110 57,392 161,068 15,288 15,953 1,499 5,261 299,571
Additions 211 10 1,258 15 1,381 1,161 10 4,046
Transfers 300 - 1,224 - 2 (1,746) 220 -
Disposals (230) (55) (1,004) (28) (407) (13) (33) (1,770)
Balance at June 30, 2013 43,391 57,347 162,546 15,275 16,929 901 5,458 301,847
Additions 52 79 737 797 335 2,793 26 4,819
Transfers 3,429 8,845 1,095 - 191 (755) - 12,805
Disposals (3) (91) (4,609) (150) (356) (213) (1) (5,423)
Balance at December 31, 2013 46,869 66,180 159,769 15,922 17,099 2,726 5,483 314,048
Additions 68 55 854 109 196 5,991 55 7,328
Transfers - 688 3,033 257 (3,978) -
Disposals - (27) (761) (212) (527) (5) (77) (1,609)
Balance at June 30, 2014 46,937 66,896 162,895 15,819 17,025 4,734 5,461 319,767
Accumulated depreciation
Balance at January 1, 2013 - 24,934 88,763 13,530 11,434 - 3,557 142,218
Accumulated - 918 3,440 408 601 - 603 5,970
Disposals - (20) (587) (28) (388) - (32) (1,055)
Balance at June 30, 2013 - 25,832 91,616 13,910 11,647 - 4,128 147,133
Accumulated - 917 3,459 413 626 - 553 5,968
Transfers - 1,326 8 - 128 - - 1,462
Disposals - (47) (4,057) (121) (336) - (1) (4,562)
Balance at December 31, 2013 - 28,028 91,026 14,202 12,065 - 4,680 150,001
Accumulated - 1,097 3,497 478 601 - 163 5,836
Disposals - (4) (751) (206) (500) - (77) (1,538)
Balance at June 30, 2014 - 29,121 93,772 14,474 12,166 - 4,766 154,299
Carrying amount atJanuary 1, 2013 43,110 32,458 72,305 1,758 4,519 1,499 1,704 157,353
Carrying amount atJune 30, 2013 43,391 31,515 70,930 1,365 5,282 901 1,330 154,714
Carrying amount atDecember 31, 2013 46,869 38,152 68,743 1,720 5,034 2,726 803 164,047
Carrying amount atJune 30, 2014 46,937 37,775 69,123 1,345 4,859 4,734 695 165,468
165,468
Vehicles with carrying amount of BGN 372 thousand (2013: BGN 773 thousand) were acquired under finance lease contracts.
14. Property, plant, equipment and intangible assets (continued)
As at June 30, 2014 property, plant and equipment with carrying amount of BGN 60,144 thousand are pledged as collateral
under bank and trade loans granted to the Group and non-related parties and also to secure trade payables to non-related
parties (see also note 24).
As at June 30, 2014 in order to secure a claim against a Company from the Group, a collateral deed has been imposed on
tangible assets owned by the Group with total carrying amount BGN 1,866 thousand.
15. Investment property
June 30, 2014BGN '000 March 31, 2014BGN '000 December31, 2013BGN '000
Cost
Balance at the beginning of the period 23,227 23,227 36,042
Additions 19 18 38
Transfers - - (12,805)
Disposals (42) (42) (48)
Balance at the end of the period 23,204 23,203 23,227
Accumulated depreciation
Balance at the beginning of the period 2,609 2,609 3,538
Charged for the period 58 30 577
Transfers (41) (41) (1,462)
Disposals - - (44)
Balance at the end of the period 2,626 2,598 2,609
Carrying amount at the beginning of the period 20,618 20,618 32,504
Carrying amount at the end of the period 20,578 20,605 20,618
The fair value of the investment properties is determined by using the services of a licensed expert valuer with required
professional qualification and experience in the location and category of the property to be valued. The fair value is
based on a market price, which is the estimated price at which a property could be exchanged on the date of the valuation
between knowledgeable, willing parties in normal market conditions after the appropriate marketing, in which the
counterparties have acted consciously.
15. Investment property (continued)
The fair value of land is determined based on the comparative method and real estate agencies database. Buildings are
valued at more than one method as the market value is defined as the weighted value of the results obtained by different
methods and expert weights according to the reliability of the information used and the valuation experience. The valuation
of other assets - machines, equipment, fixtures and other, comes from the information available and its reliability and
faithfulness. The new recoverable amount is taken from manufacturers or brokers, exchanges, and foreign trade
organizations, adjusted by coefficients reflecting the condition of valued assets. For assets with developed secondary
market, the method of market analogues is used.
As at June 30, 2014 the fair value of investment property amounting to BGN 31,440 thousand has been categorised as a Level
3 fair value based on the inputs to the valuation technique used.
As of June 30, 2014, investment properties with carrying amount of BGN 12,229 thousand serve as collaterals under
interest-bearing loans received by the Group and non-related parties (see also note 24).
16. Investments in other companies
As of June 30, 2014, March 2014 and December 31, 2013 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
June 30, 2014BGN '000 March 31, 2014BGN '000 December 31, 2013BGN '000
Cost 19,575 19,575 19,575
Impairment loss (1,243) (1,243) (1,243)
18,332 18,332 18,332
As at June 30, 2014 the goodwill with carrying amount of BGN 18,332 thousand is attributable to the acquisition of the
subsidiaries Naftex Petrol EOOD and BPI EAD.
The goodwill attributable to the acquisition of Naftex Security EAD at the amount of BGN 1,243 thousand was completely
impaired as at the date of the acquisition.
18. Loans granted
June 30,2014BGN'000 March 31,2014BGN'000 December 31,2013BGN'000
Long-term loans
Loans granted to non-related parties, including 21,709 21,509 21,034
Initial value 22,534 22,334 21,859
Allowance for impairment (825) (825) (825)
21,709 21,509 21,034
Short-term loans
Loans granted to non-related parties, including 52,580 51,261 58,475
Initial value 56,551 55,232 62,446
Allowance for impairment (3,971) (3,971) (3,971)
52,580 51,261 58,475
74,289 72,770 79,509
In January 2014 a company from the Group granted a loan to a non-related party amounting to EUR 15,553 thousand with
maturity in 2015 and interest rate 9%.
In January 2014, under art. 311, par.1 of Commercial Act and a Real Pledge Contract with the Controlling Company till
November 2013, the interests in three of its subsidiaries were sold due to expired notary invitation. The shares were sold
to a licensed investment intermediary for a total amount of BGN 29,850 thousand.
Subsequently the shares were resold by the licensed investment intermediary to a non-related party which acquired the
investments through a bank loan which was secured by the Group by a first pledge of cash at bank account amounting to BGN
30,520 thousand. In May 2014 the bank loan agreement expired and the bank collected the pledged outstanding principal as
well as due interest at the amount of BGN 30,511 thousand. As a result the Group recognised a regression claim in
compliance with the Real Pledge Contract between the second buyer and the Group.
On February 17, 2014 The Group signed a loan agreement with the second buyer. The loan amount is BGN 200 thousand and it
relates to paid outstanding interest (see above). The loan maturity is February 5, 2015 and the interest rate is 9%. The
loan is secured by a pledge of shares of borrower subsidiaries.
During the reporting period loans granted to non-related parties amounting to BGN 2,706 thousand were settled. At the
reporting date the outstanding balance on these loans is BGN 35 thousand.
The Management has performed an analysis of loans granted in order to determine their fair values and their respective
level in the fair value hierarchy. The Management of the Group considers that the carrying amounts of the granted loans in
the consolidated statement of financial position are reasonable approximations of their fair value as at June 30, 2014,
March 31, 2014 and December 31, 2013 within Level 3 category.
19. Inventory
June 30,2014BGN'000 March 31,2014BGN'000 December 31,2013BGN'000
Non-current assets
Compulsory stock of fuels 70,915 71,865 73,493
70,915 71,865 73,493
Current assets
Goods, including: 42,640 34,057 75,466
Fuels 36,332 27,643 68,781
Lubricants and other goods 6,308 6,414 6,685
Materials 2,574 2,720 2,633
45,214 36,777 78,099
116,129 108,642 151,592
The Group stores compulsory stock of fuels in compliance with the Stocks of Crude Oil and Petroleum Products Act.As of June
30, 2014, March 31, 2014 and December 31, 2013 such inventory is presented as non-current assets with a total amount of BGN
70,915 thousand, BGN 71,865 thousand and BGN 73,493 thousand, respectively.
As at June 30, 2014 fuels at the amount of BGN 93,778 thousand are pledged as collateral under trade liabilities and bank
loans received by the Group (see also note 24).
20. Trade and other receivables
June 30,2014BGN'000 March 31,2014BGN'000 December 31,2013BGN'000
Receivables from clients, including 77,791 66,213 65,541
Initial value 88,060 76,519 76,001
Allowance for impairment (10,269) (10,306) (10,460)
Regression claim 30,279 - -
Receivables under cession contracts 23,900 23,900 17,698
Advances granted, including 1,000 1,716 723
Initial value 2,049 2,765 1,772
Allowance for impairment (1,049) (1,049) (1,049)
Receivables from related parties, including - 1,153 1,153
Guarantees for participation in tender procedures 788 677 883
Deferred expenses 537 442 617
Litigations and writs, including 387 381 378
Initial value 755 749 746
Allowance for impairment (368) (368) (368)
Tax receivables, including 65 21 51
VAT 58 13 43
Other taxes 7 8 8
Other 3,111 831 456
Initial value 3,423 1,143 768
Allowance for impairment (312) (312) (312)
137,858 95,334 87,500
20. Trade and other receivables (continued)
The receivables from related parties are disclosed in note 30.
In May 2014 bank loan granted to a non-related party and guaranteed by the Group expired and the outstanding principal and
due interest at the amount of BGN 30,511 thousand were collected by the bank. Consequently the Group recognised a
regression claim in compliance with the Real Pledge Contract between the non-related party and the Group (see also note
18).
The 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
consolidated statement of financial position are reasonable approximations of their fair value as at June 30, 2014, March
31, 2014 and December 31, 2013 within Level 3 category.
The Group considers 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.
As at June 30, 2014 trade receivables from clients amounting to BGN 35,759 thousand are pledged as collateral under bank
loans received by the Group (see also note 24).
21. Current income tax
The excess of corporate taxes paid during the current and prior periods above tax payables as at June 30, 2014, March 31,
2014 and December 31, 2013 at the amount of BGN 546 thousand, BGN 188 thousand and BGN 353 thousand respectively, is
presented in the consolidated statement of financial position as refundable income tax.
The refundable, respectively due income taxes, are formed as follows:
June 30,2014BGN'000 March 31,2014BGN'000 December 31,2013BGN'000
Income tax receivable at the beginning of the period 353 353 455
Corporate income tax accrued (465) (343) (1,152)
Corporate income tax paid 658 178 1,131
Corporate income tax offset - - (81)
Refundable corporate income tax at the end of the period 546 188 353
22. Cash and cash equivalents
June 30,2014BGN'000 March 31,2014BGN'000 December 31,2013BGN'000
Cash at financial institution under surveillance 7,443 - -
Cash at banks 6,105 5,332 7,919
Cash in transit 3,241 2,112 3,453
Cash on hand 79 71 135
Cash as per cash flow statement 16,868 7,515 11,507
Restricted cash - 30,392 -
Cash as per statement of financial position 16,868 37,907 11,507
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 Group in the beginning of the next reporting period.
Restricted cash comprises cash, which the Group temporary has no right to use and which is pledged as collateral under bank
loan granted to non-related party (see also note 18).
In June 2014Corporate Commercial Bank AD was placed under special surveillance by the Bulgarian National Bank. All
transactions were limited to intra-bank payments and repayment of loans granted by the CCB.
As at June 30, 2014 cash amounting to BGN 13,027 thousand serve as collateral under bank loans granted to the Group (see
also note 24).
23. Registered capital
The Group's registered capital is presented at its nominal value. The registered capital of the Group represents the
registered capital of the Parent company Petrol AD, reduced by redeemed own shares as at June 30, 2014, March 31, 2014 and
December 31, 2013.
As at June 30, 2014, March 31, 2014 and December 31, 2013 the shareholders in the Parent company are as follows:
Shareholder June 30,2014 March 31,2014 December 31,2013
Alfa Capital AD 28.85% 28.85% 28.85%
Julinor EOOD 23.11% 23.11% -
Correct Pharm EOOD 18.31% 18.31% 18.31%
VIP Properties EOOD 18.31% 18.31% -
Corporate Commercial Bank AD 5,51% 7.96% 7.96%
Ministry of Economics 0.65% 0.65% 0.65%
Naftex Petrol EOOD 0.34% 0.34% 41.85%
Varna Storage EOOD 0.04% 0.04% 0.04%
Other minority shareholders 10.39% 2.43% 2.34%
100.00% 100.00% 100.00%
In January 2014, Naftex Petrol EOOD sold 45,349,000 of Petrol AD's shares on the regulated stock exchange market,
representing 41.51% of the share capital. The main buyers are Julinor EOOD (25,244,585 shares) and VIP Properties EOOD
(20,000,000 shares).
24. Loans and borrowings
June 30,2014BGN'000 March 31, 2014BGN'000 December 31, 2013BGN'000
Non-current liabilities
Loans from financial institutions 60,023 65,905 65,844
Trade loans from non-related parties 71,072 70,402 70,428
Debenture loans 35,962 35,933 35,902
Liabilities under leaseback agreements 34,707 35,430 35,923
Finance lease 119 136 153
201,883 207,806 208,250
Current liabilities
Loans from financial institutions 156,959 131,918 101,514
Trade loans from non-related parties 38,015 36,971 77,841
Debenture loans 1,298 536 2,838
Liabilities under leaseback agreements 1,726 2,036 1,610
Finance lease 475 632 788
198,473 172,093 184,591
400,356 379,899 392,841
In 2013 a long-term trade loan was utilized amounting to USD 60,000 thousand, with maturity in November 2019 and
contractual interest rate of 9%. The loan is secured by cash in bank accounts, mortgage and pledge on lands and buildings,
machines and equipment and a guarantee in creditor's favour.
In 2013 a short-term trade loan from non-related party was utilized amounting to USD 16,200 thousand (BGN 32,197 thousand)
with maturity in October 2014 and contracted interest rate of 8.5%. The loan is secured by a mortgage on lands and
buildings, pledge on machines and equipment, trade receivables from non-related parties and cash in bank accounts, as well
as a guarantee in creditor's favour.
As at June 30, 2014 the Group has an obligation under a trade loan amounting to BGN 1,959 thousand due to a non-related
party, which was a Controlling company till November 2013 (2013: BGN 1,878 thousand). The agreed interest rate is 3m
SOFIBOR plus margin.
In December 2012 the Group received a short tem loan at the amount of EUR 15,000 thousand (BGN 29,337 thousand) with
maturity in 2014 and interest rate of 9%. In January 2014 the Group fully repaid the loan.
24.1. Debenture 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 bond. The bond term is 5 years and the
maturity date is in October 2011. The principal is due in one payment at the maturity date. At the general meetings of the
bondholders conducted in October and December 2011, it was decided to extend the term of the issue until January 26, 2017.
The issue is secured by the Group's receivables on granted loans to the Controlling Company till November 2013 and to a
subsidiary, as well as by corporate guarantee, issued by a subsidiary. Interest is paid once a year. The annual effective
interest rate after the extension is 8.61%. The purpose of the issue is to provide working capital, financing in investment
projects and restructuring of a previous debt of the Group.
In 2013 the Group repurchased bonds with face value EUR 2,555 thousand. As at the date of these consolidated financial
statements the nominal value of debenture loans is EUR 18,659 thousand.
The debenture loans are presented in the consolidated statement of financial position at amortized cost.
As at June 30, 2014 the fair value of debenture loans is BGN 36,494 thousand (2013: BGN 36,494 thousand), estimated at
interest rate 9.12% (2013: 9.12%).
24.2. Leaseback agreements
In prior reporting periods, the Group has signed several contracts for sale of property, where a commitment of the seller
to repurchase the assets, under the condition of a finance lease, was agreed. That scheme, also known as leaseback, in fact
represents attracting financing, secured with the asset. Proceeds from leaseback agreements are presented as liabilities
under interest-bearing loans received (see also note 3.11.5.).
Nominal interest Maturity June 30,2014BGN'000 March 31,2014BGN'000 December 31,,2013BGN'000
Hotel complex in Burgas 1m Euribor + 2.25% (min 0.25%) 07.2023 19,410 20,214 20,120
Administrative building in Varna 1m Euribor + 2.25%(min 5.25%) 04.2023 5,065 5,152 5,142
Administrative building in Sofia 1m Euribor + 2.25% (min 5.25%) 04.2023 8,412 8,452 8,524
Fuel storage depot in Svilengrad BIR + 1.75% 12.2020 3,546 3,648 3,747
36,433 37,466 37,533
The effective interest rate on loans received under leaseback agreements is between 4.75% - 8.08%.
The obligations under leaseback agreements are avalled by the Controlling until November 2013 company.
24.3. Loans from financial institutions
Nominal interest Maturity June 30,2014BGN'000 March 31,2014BGN'000 December 31,2013BGN'000
Investment loan 8.5% 11.2018 75,684 83,028 81,112
Investment loan 3m Euribor + 3.1% (min 7%) 02.2018 1,956 2,089 2,222
Working capital loan 9% 07.2014 54,416 49,648 37,468
Working capital loan 9% 07.2015 21,636 21,276 21,359
Working capital loan 3m Euribor + 7.6% (min 9%) 12.2014 13,305 13,545 15,162
Working capital loan 9% 02.2015 28,505 28,237 -
Working capital loan 9.1% 01.2014 - - 10,035
Working capital loan 9% 06.2015 21,480
216,982 197,823 167,358
The average effective interest rate on bank loans received is between 8% and 9.5% (2013: 8% - 10%).
In February 2014 a company from the Group entered into a bank credit line agreement amounting to USD 20,000 thousand. The
credit line is secured by a pledge on cash in bank accounts, trade receivables and inventories.
In April 2014 a Group's subsidiary entered into a bank loan agreement amounting to USD 15,000 thousand. The loan is secured
by a pledge on cash in bank accounts, trade receivables and inventories.
The liabilities on loans received from financial institutions are secured by property, plant and equipment, inventory, cash
and receivables of the Group, as well as guarantees, promissory notes and pledge of a commercial enterprise.
24.4. Obligations under finance lease
June 30, 2014 March 31, 2014 December 31, 2013
Future minimum lease payments Interest Present value of minimum lease payments Future minimum lease payments Interest Present value of minimum lease payments Future minimum lease payments Interest Present value of minimum lease payments
BGN'000 BGN'000 BGN'000 BGN'000 BGN'000 BGN'000 BGN'000 BGN'000 BGN'000
Within one year 492 (17) 475 652 (20) 632 816 (28) 788
Between one and five years 127 (8) 119 144 (8) 136 167 (14) 153
619 (25) 594 796 (28) 768 983 (42) 941
Assets acquired by the Group under finance lease agreements comprise of vehicles. The lease term of the contracts varies
between 3 and 6 years. As at June 30, 2014 the average effective interest rate under finance lease agreements is 4.31%.
The Management of the Group believes that the fair value of the obligations under finance leases does not differ
significantly from their carrying amount.
The liabilities under finance lease agreements are secured by promissory notes issued by the Group in favour of the
lessors, which expire at the termination date of the respective agreements. The promissory notes issued by the Group are
avalled by the Controlling until November 2013 company.
25. Obligation for defined benefit retirement compensations
In the current period the Group accrued obligation for defined benefit retirement compensations amounting to BGN 849
thousand. The amount of the liability is determined on the basis of an actuarial valuation, based on assumptions for
mortality, disability, employment turnover, salary increases, etc.
The present value of the liability is calculated using a discount factor of 3-4% and expected salary increases between 3%
and 4%.
26. Trade and other payables
June 30,2014BGN'000 March 31, 2014BGN'000 December 31, 2013BGN'000
Payables to suppliers 91,403 65,686 153,176
Tax payables, including 22,548 25,321 44,489
VAT 7,079 7,407 21,544
Excise duty and other taxes 15,469 17,914 22,945
Payables to personnel and social security funds 3,779 3,803 3,538
Deferred income 175 142 308
Advances received 170 211 189
Other 7,732 7,820 23,759
125,807 102,983 225,459
Other payables include obligations to acquire receivables under cessions agreements amounting to BGN 1,745 thousand (2013:
BGN 17,529 thousand) and a liability to a counterparty, who repaid the Group's payables at the amount of BGN 4,587 thousand
(2013: BGN 4,587 thousand).
The Group accrues unused paid leave provision of employees in compliance with IAS 19 Employee Benefits. The movement of
these provisions for the period is as follows:
June 30,2014BGN'000 March 31, 2014BGN'000 December 31, 2013BGN'000
Balance at the beginning of the period 688 688 803
Accrued during the period 665 241 363
Utilised during the period (127) (97) (460)
Written off due to expired term - - (18)
Balance at the end of the period, including: 1,226 832 688
Paid leaves 1,037 705 584
Social security on paid leaves 189 127 104
The balance at the end of the period is presented in the consolidated statement of financial position together with current
payable to personnel.
The Management performed an analysis of trade payables in order to determine their fair values and their level in the fair
value hierarchy. The Management of the Group considers that the carrying amounts of the current payables in the
consolidated statement of financial position are reasonable approximations of their fair value as at June 30, 2014, March
31, 2014 and December 31, 2013 within Level 3 category.
Non-current assets with carrying amount of BGN 1,558 thousand serve as collateral under trade payables.
27. Subsidiaries
The subsidiaries, included in the consolidation, over which the Group has control as of
June 30, 2014, March 31, 2014 and December 31, 2013 are as follows:
Subsidiary Main activity Investmentas oJune 30,2014 Investmentas of March 31, 2014 Investmentas of December31, 2013
Naftex Petrol EOOD Wholesale with fuels 100% 100% 100%
Petrol Trans Express EOOD Transport services 100% 100% 100%
Petrol Technika EOOD Service and maintenance of fuel stations 100% 100% 100%
Petrol Gas EOOD Wholesale with fuels 100% 100% 100%
Petrol Properties EOOD Real estate and moveable property trade 100% 100% 100%
Elite Petrol AD Management, rent and sale of properties 99.99%
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