Petrol AD

Interim / Quarterly Report • Sep 3, 2024

National Storage Mechanism | Additional information

RNS Number : 7271C

Petrol AD

03 September 2024

PETROL AD

Legal Entity Identifier (LEI): 4851003SBNLWFQX4XS80

Petrol AD ("74JJ"), announces the publication of its

INTERIM CONSOLIDATED FINANCIAL STATEMENTS

OF PETROL GROUP

AND CONDENSED EXPLANATORY NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED JUNE 30, 2024

(This document is a translated condensed version of the original Bulgarian document,

in case of divergence the Bulgarian original text shall prevail)

CONSOLIDATED STATEMENT OF PROFIT OR LOSS

AND OTHER COMPREHENSIVE INCOME

For the period ended June 30

	Note№	2024 BGN'000		2023 BGN'000
Revenue	2	243,930		265,423
Other income	3	959		603
Cost of goods sold		(212,919)		(237,878)
Materials and consumables	4	(1,717)		(2,420)
Hired services	5	(10,206)		(10,479)
Employee benefits	6	(11,843)		(12,043)
Depreciation and amortisation	11,12,13	(4,002)		(6,392)
Reversal of (impairment) losses	7	279		(31)
Other expenses	8	(1,320)		(654)
Finance income	9	4,949		739
Finance costs	9	(9,627)		(2,961)
Loss before tax		(1,517)		(6,093)
Tax income / (expense)	10	(423)		102
Loss for the period		(1,940)		(5,991)
Total comprehensive income for the period		(1,940)		(5,991)
Loss for:
Owners of the Parent company		(1,940)		(5,991)
Non-controlling interest		-		-
Loss for the period		(1,940)		(5,991)
Total comprehensive income for:
Owners of the Parent company		(1,940)		(5,991)
Non-controlling interest		-		-
Total comprehensive income for the period		(1,940)		(5,991)
Loss per share (BGN)	19	(0.071)		(0.219)

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

		Note №		June 30 2024 BGN'000					December 31 2023 BGN'000
Non-current assets
Property, plant and equipment and intangible assets		11		116,146					118,627
Investment properties		12		1,528					1,552
Right-of-use asset		13		7,991					9,363
Goodwill		14		6,514					6,514
Deferred tax assets		11		2,455					2,593
Loans granted		16		37,873					34,334
Deposits		16		54,475					54,475
Total non-current assets				226,982					227,458
Current assets
Inventories		15		13,343					15,971
Loans granted		16		55,270					53,698
Trade and other receivables		17		35,515					28,202
Cash and cash equivalents		18		3,607					3,388
Total current assets				107,735					101,259
Total assets				334,717					328,717
Equity
Registered capital	19				109,250			109,250
General reserves					45,530			45,845
Accumulated loss					(133,830)			(132,205)
Total equity attributable to the owners of the Parent company			20,950					22,890
Non-controlling interests			38					38
Total equity			20,988					22,928
Non-current liabilities
Trade and other payables	22		262					262
Loans and borrowings	20		213,543					212,554
Liabilities under lease agreements	13		6,183					7,005
Deferred tax liabilities	10		1,149					1,069
Employee defined benefit obligations	21		691					691
Total non-current liabilities			221,828					221,581
Current liabilities
Trade and other payables	22		71,062					68,291
Loans and borrowings	20		17,224					11,696
Liabilities under lease agreements	13		2,173					2,955
Current income tax liabilities	23		1,442					1,266
Total current liabilities			91,901					84,208
Total liabilities			313,729					305,789
Total equity and liabilities			334,717					328,717

COMPREHENSIVE STATEMENT OF CHANGES IN EQUITY

For the period ended June 30, 2024

			Equity attributable to the owners of the Parent company								Non-controlling interests		Total equity
	Registered capital		General reserves		Reval. reserve		Accumulated profit (loss)		Total
	BGN'000		BGN'000		BGN'000		BGN'000		BGN'000		BGN'000		BGN'000
Balance at January 1, 2023	109,250		18,864		28,551		(136,645)		20,020		38		20,058
Changes in equity for 2023
Comprehensive income for the period
Profit for the period	-		-		-		2,645		2,645		-		2,645
Remeasurement on defined benefits obligations	-		-		-		225		225		-		225
Other comprehensive income	-		-		-		225		225		-		225
Total comprehensive income	-		-		-		2,870		2,870		-		2,870
Transfer of revaluation reserve of assets to retained earnings, net of assets	-		-		(1,570)		1,570		-		-		-
Balance at December 31, 2023	109,250		18,864		26,981		(132,205)		22,890		38		22,928
Changes in equity for the period ended on June 30,2024
Comprehensive income for the period
Loss for the period	-		-		-		(1,940)		(1,940)		-		(1,940)
Total comprehensive income	-		-		-		(1,940)		(1,940)		-		(1,940)
Transfer of revaluation reserve of assets to retained earnings, net of assets	-		-		(315)		315		-		-		-
Balance at June 30, 2024	109,250		18,864		26,666		(133,830)		20,950		38		20,988

CONSOLIDATED STATEMENT OF CASH FLOWS

For the period ended June 30

	2024 BGN'000		2023 BGN'000
Cash flows from operating activities
Loss for the period	(1,940)		(5,991)
Adjustments for:
Tax (income) / expense	423		(102)
Depreciation/amortization of property, plant and equipment and intangible assets	4,002		6,392
Interest expense and bank commissions, net	4,516		2,202
Shortages and normal loss, net of excess assets	(9)		122
Provisions for unused paid leave and retirement benefits	543		458
Impairment (Reversal of) loss on assets	(279)		31
Payables written-off	337		-
Profit from sale of assets	(733)		(1,536)
Profit from sale of a subsidiary	(27)		-
	6,833		1,576
Change in trade payables	6,028		(13,084)
Change in inventories	2,298		8,996
Change in trade and other receivables	(6,236)		2,627
Cash flows generated from operating activities	8,923		115
Interest, bank fees and commissions paid	(4,494)		(1,290)
Income tax paid	-		(22)
Net cash from operating activities	4,429		(1,197)
Cash flows from investing activities
Payments for purchase of property, plant and equipment excl. VAT	(82)		(97)
Proceeds from sale of property, plant and equipment excl. VAT	1,122		1,378
Payments for loans granted, net	(3,548)		(1,923)
Proceeds from loans granted, net	172		3
Interest received on loans granted	248		-
Net cash flows used in investing activities	(2,088)		(639)
Cash flows from financing activities
Proceeds from loans and borrowings	4,967		1,400
Payments of loans and borrowings	(2,400)		(1,100)
Lease payments	(1,279)		(5,404)
Payments on dividends	(3,421)		-
Net cash flows from financing activities	(2,133)		(5,104)
Net decrease in cash flows during the period	208		(6,940)
Cash and cash equivalents at the beginning of the period	3,347		8,732
Effect of movements in exchange rates	(24)		20
Cash and cash equivalents at the end of the period (see also Note 18)	3,531		1,812

Condensed notes

to the interim consolidated financial report

for the period ended June 30, 2024

1.         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;

·    Retail of fuels - retail of petroleum and other products through a network of petrol stations.

·    Other activities - financial and accounting services, consultancy, rental income and other activities.

The segment information, presented to the Group's Management for the periods ended as of June 30, 2024 and 2023 is as follows:

June 30 2024	Wholesale of fuels		Retail of fuels		All other segments		Total for the Group
	BGN'000		BGN'000		BGN'000		BGN'000
Total segment revenue	9,394		237,784		1,889		249,067
Intra-group revenue	36		3,292		850		4,178
Revenue from external customers	9,358		234,492		1,039		244,889
Adjusted EBITDA	(173)		6,480		577		6,884
Depreciation/amortization	(138)		(3,657)		(207)		(4,002)
Reversal of impairment, net	-		-		279		279

June 30 2023	Wholesale of fuels		Retail of fuels		All other segments		Total for the Group
	BGN'000		BGN'000		BGN'000		BGN'000
Total segment revenue	37,599		230,959		1,601		270,159
Intra-group revenue	3,149		20		964		4,133
Revenue from external customers	34,450		230,939		637		266,026
Adjusted EBITDA	(77)		2,086		543		2,552
Depreciation/amortization	(60)		(6,218)		(114)		(6,392)
Impairment loss, net	-		-		(31)		(31)

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 based on the adjusted EBITDA [1] . In the calculation of the adjusted EBITDA the effect of the impairment of assets is not taken into account.

A reconciliation of the reported segments with the interim consolidated financial report figures for the period ended June 30, 2024 and 2023 is presented in the table below:

	June 30 2024 BGN'000		June 30 2023 BGN'000
Revenue
Total revenue from reporting segments	247,178		268,558
Revenue from other segments	1,889		1,601
Elimination of revenue from inter-Group sales	(4,178)		(4,133)
Revenue from external customers	244,889		266,026
Adjusted EBITDA
Adjusted EBITDA - reporting segments	6,307		2,009
Adjusted EBITDA - all other segments	577		543
Consolidated adjusted EBITDA before taxes	6,884		2,552
Depreciation	(4,002)		(6,392)
Impairment (loss) / profit, net	279		(31)
Finance costs, net	(4,678)		(2,222)
Profit (loss) before tax	(1,517)		(6,093)

2.         Revenue from sales

	June 30 2024 BGN'000		June 30 2023 BGN'000
Sales of goods	240,776		262,862
Sales of services	3,154		2,561
	243,930		265,423

3.         Other income

	June 30 2024 BGN'000		June 30 2023 BGN'000
Gain on sale of property, plant, equipment and materials including:	733		327
Income from sales	1,176		676
Carrying amount	(443)		(349)
Insurance claims	61		6
Surpluses	39		26
Penalties and indemnities	17		5
Income from grants and financing	-		141
Other	109		98
	959		603

By Decision No 739 of 26 October 2021, amended by Decision No 771 of 06 November 2021 and Decision No 885 of 16 December 2021, the Council of Ministers adopted a program for compensation of non-residential end customers of electricity. The program aims to protect and assist all non-household end-users to deal with the effects of fluctuations in electricity prices. The Group has received and recognized income from grants for the period ending June 30, 2023 under this programme of BGN 141 thousand.

4.         Materials and consumables

	June 30 2024 BGN'000		June 30 2023 BGN'000
Electricity and heating	883		1,495
Fuels and lubricants	288		316
Office consumables	195		219
Spare parts	148		152
Working clothes	99		96
Water supply	43		62
Advertising materials	8		10
Other	53		70
	1,717		2,420

5.         Hired services

	June 30 2024 BGN'000		June 30 2023 BGN'000
Dealer and other commissions	5,618		5,510
Maintenance and repairs	1,481		1,731
Consulting, training and audit	618		524
State, municipal fees and other costs	542		318
Security	358		384
Rents	287		603
Communications	258		298
Cash collection	223		269
Insurances	167		187
Software licenses	104		144
Advertising	65		142
Transport	56		43
Other	429		326
	10,206		10,479

The rent expenses include rent costs of trade sites for BGN 146 thousand (June, 30 2023: BGN 446 thousand) leased under operating lease, which fall under the exclusions of IFRS 16 and whose agreements comprise a contractual clause, that the both parties have the right to cease the contract for separate trade sites or as a whole with an insignificant sanction.

6.         Employee benefits

	June 30 2024 BGN'000		June 30 2023 BGN'000
Wages and salaries	9,326		9,351
Social security contributions and benefits	2,517		2,692
	11,843		12,043

The Group has signed a contract with licensed operators for giving food vouchers to its workers and/or employees, working under employment obligations or to persons hired under management and control agreements, separately of their remuneration. As a result as at June 30, 2024 are given food vouchers for total amount of BGN 941 thousand (BGN 1,076 thousand as at June 30, 2023).

7.         Impairment losses

	June 30 2024 BGN'000		June 30 2023 BGN'000
Recognised impairment loss on financial assets, including:	43		43
Impairment loss on loans granted	43		43
Reversed impairment loss on financial assets, including:	(322)		(12)
Reversed impairment loss on trade loans granted	(202)		(3)
Reversed impairment loss on trade and other receivables	(120)		(9)
)
Recognised (reversal of) losses, net	(279)		31

8.         Other expenses

	June 30 2024 BGN'000		June 30 2023 BGN'000
Entertainment expenses and sponsorship	558		196
Payables written-off	337		-
Local taxes and taxes on expenses	317		204
Scrap and shortages	28		136
Penalties and indemnities	10		60
Loss on liquidation of property, plant, equipment and materials including:	2		12
Carrying amount	2		12
Revenue from sales	-		-
Business trips	8		8
Other	60		38
	1,320		654

9.         Finance income and costs

	June 30 2024 BGN'000		June 30 2023 BGN'000
Finance income
Interest income, including	4,898		739
Interest income on loans granted	3,032		706
Interest income on granted deposits	1,837		-
Interest income on trade receivables	29		33
Profit on sale of subsidiary	27		-
Foreign exchange gain, net	24		-
	4,949		739
Finance costs
Interest costs, including:	(9,329)		(2,713)
Interest expenses on debenture loans	(829)		(851)
Interest expenses on trade and other payables	(661)		(310)
Interest expenses on bank loans	(7,551)		(366)
Interest expenses on leases	(285)		(1,181)
Interest expenses on trade loans	(3)		(5)
Loss from cession contracts	(213)		-
Foreign exchange loss, net	-		(20)
Bank fees, commissions and other financial expenses	(85)		(228)
	(9,627)		(2,961)
Finance costs, net	(4,678)		(2,222)

10.       Taxation

10.1.    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.

	June 30 2024 BGN'000		June 30 2023 BGN'000
Current tax expense	209		12
Change in deferred tax, including:	214		(114)
Temporary differences recognised during the period	(38)		77
Temporary differences arising during the period	252		(191)
Adjustments	-		-
Tax (income) expense	423		(102)

10.2.    Effective tax rate

The reconciliation between the accounting loss and tax expense, as well as calculation of the effective tax rate as of June 30, 2024 and June 30, 2023 is presented in the table below:

	June 30 2024 BGN'000		June 30 2023 BGN'000
Profit (loss) before tax for the period from continuing operations	(1,517)		(6,093)
Applicable tax rate	10%		10%
Tax expense at the applicable tax rate	(152)		(609)
Tax effect of permanent differences	73		96
Tax effect of a tax asset not recognised in the current period that arose in the current period	425		400
Tax effect from consolidation adjustments	77		11
Tax income	423		(102)
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.

10.3.    Recognised deferred tax assets and liabilities

Recognised deferred tax assets

	Asset (liability) as at January 1, 2023	Acquired through business combination	Recognised in profit and loss- all operations	Asset (liabilitiy) as at December 31, 2023	Disposals through business combination	Recognised in other compre-hensive income-all operations	Asset (liability) as at June 30, 2024
	BGN'000	BGN'000	BGN'000	BGN'000	BGN'000	BGN'000	BGN'000
Property, plant and equipment	(3,031)	(13)	203	(2,841)	-	(65)	(2,906)
Impairment of assets	4,715	84	246	5,045	(4)	(32)	5,009
Tax loss carry-forwards	35	49	(5)	79	-	-	79
Provisions for unused paid leave and other provisions	148	-	15	163	-	11	174
Excess of interest payments in accordance with CITA	-	-	118	118	-	(87)	31
Other temporary differences, including unpaid benefits to individuals	29	-	-	29	-	39	68
	1,896	120	577	2,593	(4)	(134)	2,455

Recognised deferred tax liabilities

	Asset (liability) as at January 1, 2023	Acquired through business combination	Recognised in profit and loss- all operations	Asset (liabilitiy) as at December 31, 2023	Recognised in other compre-hensive income-all operations	Asset (liability) as at June 30, 2024
	BGN'000	BGN'000	BGN'000	BGN'000	BGN'000	BGN'000
Property, plant and equipment	-	(1,034)	(59)	(1,093)	(70)	(1,163)
Impairment of assets	-	10	3	13	-	13
Tax loss carry-forwards	-	30	(20)	10	(10)	-
Other temporary differences, including unpaid benefits to individuals	-	1	-	1	-	1
	-	(993)	(76)	(1,069)	(80)	(1,149)

The Group has the right to carry forward deferred tax assets on tax losses until 2029.

10.4.    Unrecognized deferred tax assets

As of June 30, 2024 the Group's Management reviews the recoverability of deductible temporary differences and tax loss carry-forward, forming tax assets. Because of this review, the Group's Management estimates that there might be no sufficient taxable profits in the near future against which the assets will be utilized. Consequently, the Group does not recognize tax assets on the following deductible temporary differences and tax loss carry-forward and impairment of assets, incurred during the current and previous reporting periods.

11.       Property, plant, equipment and intangible assets

	Land BGN'000		Buildings BGN'000		Plant and equipment BGN'000		Vehicles BGN'000		Other BGN'000		Assets under constr. BGN'000		Intangible assets BGN'000		Total BGN'000
Cost Balance at January 1, 2023	15,455		7,145		18,205		428		2,571		86		588		44,478
		T
Additions	21		32		370		-		175		131		215		944
Acquired through business combination	30,712		18,337		20,210		-		7,961		171		13		77,404
Transfers	54		1		21		-		-		(61)		(15)		-
Disposals	(338)		(152)		(1,222)		-		(106)		(42)		(146)		(2,006)
Balance at December 31, 2023	45,904		25,363		37,584		428		10,601		285		655		120,820
Additions	-		110		146		-		119		183		33		591
Transfers	-		-		134		-		99		(233)		-		-
Disposals	(171)		(54)		(219)		-		(46)		(4)		-		(494)
Balance at June 30, 2024	45,733		25,419		37,645		428		10,773		231		688		120,917
Accumulated depreciation
Balance at January 1, 2023	-		1		17		26		-		-		-		44
Accumulated	-		427		1,207		10		454		-		113		2,211
Disposals for the period	-		(3)		(45)		-		(13)		-		(1)		(62)
Balance at December 31, 2023	-		425		1,179		36		441		-		112		2,193
Additions	-		501		1,373		5		664		-		63		2,606
Transfers	-		(4)		(14)		-		(10)		-		-		(28)
Balance at June 30, 2024	-		922		2,538		41		1,095		-		175		4,771
Carrying amount at January 1, 2023	15,455		7,144		18,188		402		2,571		86		588		44,434
Carrying amount at December 31, 2023	45,904		24,938		36,405		392		10,160		285		543		118,627
Carrying amount at June 30, 2024	45,733		24,497		35,107		387		9,678		231		513		116,146

As at June 30, 2024 property, plant and equipment with a carrying amount of BGN 98,758 thousand (December 31, 2023: BGN 102,710 thousand) are mortgaged or pledged as collaterals under bank loans, granted to the Parent company and to unrelated parties, under credit limit agreements for issuance of bank guarantees.

The assets under construction include mainly incurred expenses for reconstruction of trade sites.

12.       Investment property

	June 30, 2024 BGN'000		December 31, 2023 BGN'000
Cost
Balance at the beginning of the period	1,883		1,883
Acquisitions	-		-
Balance at the end of the period	1,883		1,883
Accumulated depreciation
Balance at the beginning of the period	331		282
Depreciation	24		49
Balance at the end of the period	355		331
Carrying amount at the beginning of the period	1,552		1,601
Carrying amount at the end of the period	1,528		1,552

Investment property representing land and building were acquired through business combination in December 2016. The Group determines the fair value of the investment property for reporting purposes, using a valuation report of independent appraiser, which is calculated by the method of comparatives, the method of discounted free cash flows and the amortised cost method. The fair value of the investment properties as at June 30, 2024 and December 31, 2023 is BGN 2,358 thousand. The investment properties are part of a set of assets, which serve to secure a bank revolving credit line.

13.       Assets and liabilities under leases

In the consolidated statement of financial position as at June 30, 2024 and December 31, 2023 are disclosed the following items and amounts related to lease agreements:

Consolidated statement of financial position	June 30, 2024 BGN'000		December 31, 2023 BGN'000
Right-of-use assets, incl.:	7,991		9,363
Property (lands and buildings)	7,526		8,666
Machinery, plants and equipment	18		23
Transport vehicles	447		674
Liabilities under leases, incl.:	(8,356)		(9,960)
Current liabilities	(2,173)		(2,955)
Non-current liabilities	(6,183)		(7,005)
Net effect on equity	(365)		(597)

The expenses recognized in the these consolidated statement of profit or loss and other comprehensive income from continuing operations and discontinued operations:

Consolidated statement of profit or loss and other comprehensive income	June 30, 2024 BGN'000		June 30, 2023 BGN'000
Depreciation of right-of-use assets, incl.:	1,372		5,768
Property (lands and buildings)	1,140		5,591
Machinery, plants and equipment	5		9
Transport vehicles	227		168
Interest on lease agreements for right-of-use assets	285		1,181
	1,657		6,949

In September and October 2023 the Group acquired control over the most of the companies, from which it rented the petrol stations under long-term agreements from 2022, which lead to a significant decrease in the depreciation and interest expenses, as well as the carrying amounts of assets and liabilities under lease agreements in the consolidated financial statements.

The total outgoing cash flow under right-of-use assets lease agreements as at June 30, 2024 is at the amount of BGN 1,279 thousand (June 30, 2023: BGN 5,404 thousand) excluding the paid value added tax.

The Group has leased various assets: land, retail premises, small offices and buildings, vehicles, photocopiers. The leases are normally for a period of 3 to 10 years, but may contain extension options.

14.       Goodwill

			June 30, 2024 BGN'000				December 31, 2023 BGN'000
	Balance at the beginning of the period
Cost		26,914				19,844
Impairment loss		(20,400)				(19,787)
			6,514				57
	Changes
	Cost of arising goodwill		-				7,070
	Impairment loss		-				(613)
			-				6,457
	Balance at the end of the period
	Cost		26,914				26,914
	Impairment loss		(20,400)				(20,400)
			6,514				6,514

The goodwill recognised arose as a result of the acquisitions of the subsidiaries in prior periods - Varna Storage Ltd - in the amount of BGN 19,787 thousand, Lozen Asset JSC - in the amount of BGN 29 thousand and Petrol Technologies Ltd - in the amount of BGN 28 thousand and the acquisitions in 2023 - Crystal Asset Property Ltd in the amount of BGN 5,330 thousand, Crystal Asset Trade Ltd in the amount of BGN 1,690 thousand, Crystal Asset Bulgaria Ltd in the amount of BGN 50 thousand. Following an analysis as at 31 December 2023, using valuations by an independent licensed valuer, the goodwill of Crystal Asset Property Ltd is impaired by BGN 512 thousand, and the goodwill of Crystal Asset Trade Ltd by BGN 51 thousand and the goodwill of Crystal Asset Bulgaria Ltd is fully impaired.

At the end of February 2022 the subsidiary Varna Storage Ltd returned a License No 544 for tax warehouse operation, issued by the Customs Agency, due to an inability to negotiate an acceptable remuneration for the lease tax warehouse, subject to the license. In this relation in the consolidated financial statement for the year ended on December 31, 2021, an impairment of the goodwill arising from the acquisition of the subsidiary at the amount of BGN 19,787 thousand is reported.

15.       Inventory

	June 30, 2024 BGN'000		December 31, 2023 BGN'000
Goods, including:	12,654		15,267
Fuels	6,529		9,607
Lubricants and other goods	6,125		5,660
Materials	689		704
	13,343		15,971

16.       Loans granted

	June 30, 2024 BGN'000		December 31, 2023 BGN'000
Non-current receivables
Granted guaranteed deposits	54,475		54,475
Initial value	55,000		55,000
Allowance for impairment	(525)		(525)
Loans granted to unrelated parties, including	37,873		34,334
Initial value	38,478		35,143
Allowance for impairment	(605)		(809)
	92,348		88,809
Current receivables
Loans granted to unrelated parties, including	55,270		53,698
Initial value	70,653		69,036
Allowance for impairment	(15,383)		(15,338)
	55,270		53,698
	147,618		142,507

In September 2023, the Parent company deposited cash with a commercial bank under Debt Product Agreements (pursuant to Regulation 575/2013 of the European Parliament and of the Council of 26.06.2013) against interest linked to the Bank's Base Interest Rate (BIR) plus a margin of 2.9093 points with a ten-year maturity until 15.08.2033. As at June 30, 2024 and December 31, 2023 the deposit amounts to BGN 55,000 thousand.

The Parent company has entered into agreements for the blocking of these funds in order to secure the performance of a credit line granted to the Parent company by the same bank, with the same term. As at June 30, 2024 and December 31, 2023, an impairment charge of BGN 525 thousand has been made on the cash provided, in accordance with the policy for recognition of expected credit losses on financial assets.

The loans granted to unrelated parties, registered in Bulgaria are disclosed in the following table with interest rates and maturities:

Borrower	Receivables June, 30 2024 net	Principal	Interest	Accrued Interest	Annual Interest	Maturity
	BGN'000	BGN'000	BGN'000	BGN'000	%
Commercial company	20,139	19,500	667	(28)	6.70%	Principal -31.dec.28 Interest - currently.
Commercial company	15,423	14,800	623		7.20%	31.dec.28
Commercial company	9,648	9,681	518	(551)	7.00%	31.dec.24
Commercial company	8,140	7,786	420	(66)	7.00%	31.dec.24
Commercial company	6,113	5,830	309	(26)	7.00%	31.dec.24
Commercial company	5,797	4,672	2,175	(1,050)	6.70%	31.dec.24
Commercial company	5,599	5,410	1,653	(1,464)	6.70%	31.dec.24
Commercial company	4,840	3,555	1,862	(577)	5.00%	Principal -31.dec.25 Interest - currently
Commercial company	3,777	3,615	194	(32)	7.00%	Interest - currently
Commercial company	3,668	3,000	1,155	(487)	5.00%	31.dec.24
Commercial company	3,153	3,225	160	(232)	7.00%	31.dec.24
Commercial company	2,027	1,937	101	(11)	7.00%	31.dec.24
Commercial company	1,361	1,323	38	-	5.00%	31.dec.24
Commercial company	995	986	48	(39)	7.00%	31.dec.24
Commercial company	866	829	37	-	7.20%	31.dec.24
Commercial company	599	509	118	(28)	5.00%	31.dec.24
Commercial company	507	490	24	(7)	7.00%	31.dec.24
Commercial company	417	313	104	-	7.00%	07.aug.25
Commercial company	71	65	6	-	6.70%	31.dec.24
Commercial company	3	121	16	(134)	5.00%	31.dec.24
Commercial company	-	5,190	-	(5,190)	0.00%	28.oct.15
Commercial company	-	2,210	-	(2,210)	9.50%	28.oct.15
Commercial company	-	1,500	133	(1,633)	8.75%	17.jul.15
Commercial company	-	1,258	452	(1,710)	6.70%	31.dec.24
Commercial company	-	44	-	(44)	9.50%	21.jan.17
Commercial company	-	22	5	(27)	6.70%	31.dec.24
Commercial company	-	12	1	(13)	8.50%	26.aug.15
Commercial company	-	-	429	(429)	6.70%	31.dec.19
	93,143	97,883	11,248	(15,988)

Borrower	Receivables December, 31, 2023 net	Principal	Interest	Accrued Interest	Annual Interest	Maturity
	BGN'000	BGN'000	BGN'000	BGN'000	%
Commercial company	16,732	16,500	260	(28)	6.60%	Principal -31.dec.28 Interest - currently.
Commercial company	14,884	14,800	84	-	7.20%	31.dec.28
Commercial company	9,316	9,690	177	(551)	7.00%	31.dec.24
Commercial company	7,987	7,909	144	(66)	7.00%	31.dec.24
Commercial company	5,910	5,830	106	(26)	7.00%	31.dec.24
Commercial company	5,639	4,672	2,017	(1,050)	6.70%	31.dec.24
Commercial company	5,416	5,410	1,470	(1,464)	6.70%	31.dec.24
Commercial company	4,750	3,555	1,772	(577)	5.00%	Principal 31.dec.25
Commercial company	3,694	3,660	67	(33)	7.00%	31.dec.24
Commercial company	3,592	3,000	1,079	(487)	5.00%	31.dec.24
Commercial company	3,067	3,252	47	(232)	7.00%	31.dec.24
Commercial company	2,059	2,040	30	(11)	7.00%	31.dec.24
Commercial company	1,251	1,296	184	(229)	6.70%	31.dec.19
Commercial company	973	961	12	-	5.00%	31.dec.24
Commercial company	961	986	14	(39)	7.00%	31.dec.24
Commercial company	836	829	7	-	7.20%	31.dec.24
Commercial company	490	490	7	(7)	7.00%	31.dec.24
Commercial company	406	313	93	-	7.00%	07.aug.24
Commercial company	69	65	4	-	6.70%	31.dec.24
Commercial company	-	-	429	(429)	6.70%	31.dec.19
Commercial company	-	121	13	(134)	5.00%	31.dec.24
Commercial company	-	5,190	-	(5,190)	0.00%	28.oct.15
Commercial company	-	2,210	-	(2,210)	9.50%	28.oct.15
Commercial company	-	1,500	133	(1,633)	8.75%	17.jul.15
Commercial company	-	1,259	409	(1,668)	6.70%	31.dec.24
Commercial company	-	44	-	(44)	9.50%	21.jan.17
Commercial company	-	22	4	(26)	6.70%	31.dec.24
Commercial company	-	12	1	(13)	8.50%	26.aug.15
	88,032	95,616	8,563	(16,147)

17.       Trade and other receivables

	June 30, 2024 BGN'000		December 31, 2023 BGN'000
Receivables from clients, including:	22,534		19,105
Initial value	26,143		22,834
Allowance for impairment	(3,609)		(3,729)
Receivables under cession agreements, assumption of debt and regress	3,514		1,964
Initial value	5,772		4,222
Allowance for impairment	(2,258)		(2,258)
Receivables from related parties, including:.	2,926		2,660
Initial value	2,932		2,666
Allowance for impairment	(6)		(6)
Financial assets, measured at fair value through profit or loss	1,995		1,995
Prepaid expenses	1,144		918
Guarantees for participation in tender procedures	631		810
Advances granted, including	277		425
Initial value	346		494
Allowance for impairment	(69)		(69)
Tax reimbursement, including:	62		52
Value added tax	62		52
Litigations and writs, including	-		92
Initial value	10		102
Allowance for impairment	(10)		(10)
Other	2,432		181
Initial value	2,443		206
Allowance for impairment	(11)		(25)
	35,515		28,202

In accordance with the established policy, the Group provides its clients a credit period, after which an interest for delay is charged on the unpaid balance. An interest for delay is provided for in every particular contract. As at the end of every reporting period the Group carries out a detailed review and analysis of the significant due trade receivables and the assessed as uncollectible are impaired.

The adoption of the new IFRS 9 changed essentially the accounting of the impairment losses of financial assets and substitute the method of the accrued losses under IAS 39 with the oriented to a greater extent to the future model of the expected credit losses. The IFRS 9 obligates the Group to recognize a provision for the expected credit losses for all debt instruments, which are not recognised at fair value in the profit or loss and for the assets under contracts.

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.

18.       Cash and cash equivalents

	June 30, 2024 BGN'000		December 31, 2023 BGN'000
Cash in transit	3,141		2,547
Cash at banks	318		751
Cash on hand	72		49
Cash in statement of cash flows	3,531		3,347
Blocked cash	76		41
Cash in statement of financial position	3,607		3,388

As at June 30, 2024 and December 31, 2023 cash at the amount of BGN 41 thousand, blocked under enforcement court cases to which the Group is a party, were presented as blocked cash (December 31, 2023 BGN 41 thousand).

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.

19.       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.

As at June 30, 2024 and December 31, 2023 the shareholders in the Parent company are as follows:

Shareholder	June 30, 2024		December 31, 2023
Alfa Capital AD	28.85%		28.85%
Storage Invest EOOD	26.77%		26.77%
Perfeto consulting EOOD	16.43%		16.43%
Trans Express Oil EOOD	9.82%		9.82%
Petrol Bulgaria AD	7.05%		7.05%
Gryphon Power AD	5.39%		5.49%
The Ministry of Energy	0.65%		0.65%
Other minority shareholders	5.04%		4.94%
	100.00%		100.00%

Given the structure of shareholding, there is no ultimate Parent company above the Parent company Petrol AD.

On 02.11.2023 (date of settlement) the shareholder Storage Invest Ltd. purchased 6 311 147 registered dematerialized shares with a nominal value of BGN 4 /four/ each, representing 23.11% of the capital of the Parent company. As a result of the purchase, the percentage of voting shares in the capital of Petrol AD owned by Storage Invest Ltd. has increased by 23.11% (twenty-three point eleven per cent), thus the shareholding of Storage Invest Ltd. in the capital of Petrol AD has become 26.769%, crossing the threshold of 20%, considered to exert significant influence.

The Management of the Parent company has undertaken a series of measures to optimize its capital adequacy. As a result of several general meetings of shareholders held in the period 2016-2017, a resolution was passed to implement the reverse share split procedure to merge 4 old shares with a par value of BGN 1 into 1 new share with a par value of BGN 4 and a subsequent reduction of the Parent company's capital to cover losses by reducing the par value of the shares from BGN 4 to BGN 1.  In March 2018, following a ruling of the Lovech District Court, which reversed the refusal of the Commercial Register (CR) to register the decision taken by the EGMS to merge 4 old shares with a nominal value of BGN 1 into 1 new share with a par value of BGN 4, the requested change was registered in the CR, resulting in the registered capital of the Parent company amounting to BGN 109,249,612, divided into 27,312,403 shares with a par value of BGN 4 each. The change in the capital structure was also entered in the register of the Central Depository AD. The application filed in April 2018 for the registration of the EGMS's decision on the second stage of the procedure to reduce the Parent company's capital by reducing the nominal value of the shares from BGN 4 to BGN 1 to cover losses was rejected by the Commercial Register.

On EGMS of Petrol AD held on November 8, 2018 the decision to decrease the capital of the Parent company in order to cover losses by decreasing the nominal value of the shares from BGN 4 to BGN 1 was voted again. A refusal of the application for registration of the decision in CR was enacted, which was appealed by the Parent company within the legal term. Minority shareholders disputed the decision of the EGMS and additionally to the refusal, the application proceedings was postponed until the pronouncing of the Lovech Regional Court on the court proceedings, initiated on minority shareholders request. In March 2019 Lovech Regional Court enacted a decision, which indicates CR to register the decrease of the capital after a resumption of the registration proceedings after the pronouncing on the legal proceedings initiated by the minority shareholders.

At EGMS held in February 2019 a decision for the replacement of the deceased member of the Supervisory Board Ivan Voynovski with Rumen Konstantinov was taken. The application for registration of these circumstances in the account of the Parent company was refused, which was disputed within the legal term by the Parent company. In addition to the refusal, the registration proceedings was postponed by a request of minority shareholders until the pronouncing of the Lovech Regional Court on applications for annulment of the decision.

In May 2019 the Lovech Regional Court enacted a decision, which repealed the enacted refusal and turn back the case to the Registry Agency for registration of the applied entry after a resumption of the ceased registration proceedings. At present, the court proceedings for repealing of the decisions of EGMS from February 2019 are pending.

At the AGM of Petrol AD convened on 29 March 2023, a new resolution was passed to reduce the Company's capital to cover losses by reducing the nominal value of the shares from BGN 4 to BGN 1.

The procedure for distribution of profits and coverage of losses is provided in the Commercial Act and the Articles of Association of the Parent company.

Profit (loss) per share

The loss per share is calculated by dividing the net loss for the period by the weighted average number of ordinary shares held during the reporting period.

	30 June 2024		30 June 2023
Weighted-average number of shares (in thousand)	27,312		27,312
Loss in BGN thousand	(1,940)		(5,991)
Loss per share (BGN)	(0.071)		(0.219)

20.       Loans and borrowings

	June 30, 2024 BGN'000		December 31, 2023 BGN'000
Non-current liabilities
Loans from financial institutions	177,171		176,204
Debenture loans	36,372		36,350
	213,543		212,554
Current liabilities
Loans from financial institutions	16,553		11,023
Debenture loans	664		668
Trade loans from related parties	4		2
Trade loans from unrelated parties	3		3
	17,224		11,696
	230,767		224,250

20.1.    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 purpose of the emission is to provide working capital funds, financing of investment projects and restructuring of outstanding debt of the Parent company. The principal is due in one payment at the maturity date. The bond term is 5 years and the maturity date is in October 2011. 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. On December 23, 2016, a procedure of extension of the bond issue to 2022 and reduction of the interest rate in the range from 5.5% to 8% was successfully completed with payments of interest once in a year.

In September 2020 the Parent company successfully completed a new procedure for renegotiating the conditions of the debenture loan. The maturity of the debenture loan principal is deferred until January 2027, the agreed interest rate is reduced to 4.24% per annum, with six months regularity of the interest (coupon) payments - in January and in July of each year until the maturity of the loan.

As at the date of these financial statements, the nominal value of the bond loan is EUR 18,659 thousand and the fair value is BGN 20,517 thousand (2023: BGN 19,667 thousand) calculated at an interest rate of 74.31% (2023: 52.71%).

The debenture loan liabilities are disclosed in the statement of financial position at amortised cost. In 2024 the annual effective interest rate on the issue is 4.52% (including a 4.24% annual coupon rate).

20.2.    Loans from financial institutions

In July 2023, the Parent company entered into an agreement with a commercial bank for a revolving line of credit in the amount of BGN 220,000 thousand to be used for purposes including, but not limited to, investment purposes, working capital, issuance of bank guarantees and opening letters of credit. The funds may be drawn down and repaid repeatedly until 15 August 2033 and the repayment period for all obligations arising from the credit line is until 15 September 2033. The annual interest payable on the amount drawn down consists of the Base Interest Rate (BLPA) for the leva applied by the Bank plus a surcharge of 3.21 percentage points, but not less than 5.9%. The credit line is secured by a specific pledge of the commercial enterprise of Petrol AD, subsidiaries Kremikovtzi Oil Ltd, Shumen Storage Ltd, Office Estate Ltd, Crystal Asset Properties Ltd, Crystal Asset Trade Ltd, Crystal Asset Bulgaria Ltd, Prima Asset Bulgaria Ltd, Prima Asset Trade Ltd, Prima Consult Properties Ltd, Prima Land Property Ltd. and unrelated parties, suretyship by an unrelated party, contractual mortgages on real estate of co-borrowers, including unrelated parties, suretyship and financial security over accounts receivable with the bank and cash deposited by the borrower under a debt product agreement.

The funds under the revolving credit line with a total credit limit of BGN 220,000 thousand are provided in tranches further approved by the Bank and further terms agreed by annexes between the parties.

In July 2023, due to the revolving credit line agreement with a total credit limit of BGN 220,000 thousand, an annex agreed to grant tranche 1 in the amount of BGN 90,000 thousand as an investment loan for the purchase of assets and company shares with a drawdown period until 30 October 2023. The interest rate and the final repayment term do not differ from those agreed in the main contract. The funds under this tranche have been drawn down and as of December 31, 2023, the principal liability amounts to BGN 87,000 thousand. The liability at June 30, 2024 is principal of BGN 84,750 thousand and interest of BGN 2,171 thousand.

In July 2023, due to the revolving credit line agreement with a total limit of BGN 220,000 thousand, an annex agreed to grant tranche No. 2 in the amount of BGN 30,000 thousand for working capital, funds for refinancing obligations under an existing revolving credit line granted by the same bank and funds for payment of bank guarantees and letters of credit. The drawdown period is until 14 August 2033. The interest rate and repayment deadline do not differ from those agreed in the main contract. In November 2023, the funds under tranche 2 were drawn down and the Group has a principal obligation of BGN 24,621 thousand and interest for BGN 145 thousand as at December 31, 2023. As at June 30, 2024, the liability was BGN 24,621 thousand principal and BGN 541 thousand interest.

In July 2023, due to the revolving line agreement with a total limit of BGN 220,000 thousand, an annex agrees to disburse tranche No. 3 in the amount of BGN 55,000 thousand as working capital in the form of an overdraft. The period for multiple drawdown and utilization of the amount under this tranche is up to 14 August 2033. The interest rate and repayment deadline do not differ from those agreed in the main contract. As at December 31, 2023, the Group has a principal obligation of BGN 54,533 thousand and interest for BGN 1,018 thousand under this tranche. As at June 30, 2024 the liability under this tranche is BGN 55,000 thousand principal and BGN 1,873 thousand interest.

In July 2023, due to the revolving line agreement with a total limit of BGN 220,000 thousand, an annex agreed to grant tranche No. 4 in the amount of BGN 45,000 thousand as a revolving working capital loan. The drawdown and utilisation of the amount under this tranche shall be up to 14 August 2033. The interest rate and the final repayment term do not differ from those agreed in the main agreement. As at December 31, 2023 the Group has a liability under this tranche for the principal amount of BGN 16,700 thousand and interest for BGN 260 thousand. As at June 30, 2024 the liability under this tranche is BGN 21,200 thousand principal and BGN 705 thousand interest.

In November, the Group signed a bank loan agreement in the amount of BGN 3,000 thousand intended to finance Group's working capital, at an annual interest rate of BIRA per BGN of the creditor bank, increased by a margin of 2.61 points, but not less than 5.9% on an annual basis. The repayment plan is for 5 (five) years with equal monthly installments on principal, the deadline for repayment is November 25, 2028. The loan is secured by mortgages of fixed tangible assets owned by the Parent company and a subsidiary co-debtor under the contract, pledge of plant and equipment machinery, subrogation to the obligation of a subsidiary, as well as financial collateral by providing a pledge under the Personal Income Tax Act on the receivables on the accounts opened by the parent company and the co-debtor in the creditor bank. As at December 31, 2023, the Group's principal obligation amounted to BGN 2,950 thousand. As at June 30, 2024 the liability under this tranche is BGN 2,800 thousand principal and BGN 63 thousand interest.

21.       Obligation for defined benefit retirement compensations

As at June 30, 2024 and December 31, 2023, the Group's defined benefit obligations for retirement plans amount to BGN 691 thousand. The amount of the obligation has been determined based on actuarial valuations based on assumptions for mortality, disability, probability of leaving, salary growth and others. The discount rate applied is 4.03% per annum and future salary increases of 4%. The assumptions regarding mortality growth reflect the likelihood that individuals will live to the defined pensionable age. It is calculated for each person individually based on his or her sex and age at the time of the valuation.

22.       Trade and other payables

	June 30, 2024 BGN'000		December 31, 2023 BGN'000
Non-current liabilities
Payables under commercial agreements	262		262
	262		262
Current liabilities
Payables to suppliers	41,795		37,878
Payables to related parties	13,564		12,359
Dividends liabilities to unrelated parties	8,056		11,477
Payables to personnel and social security funds	2,910		3,249
Tax payables, including	2,337		1,104
VAT	1,573		706
Excise duty and other taxes	764		398
Received advances and deferred income	813		1,001
Other	1,587		1,223
	71,062		68,291

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, 2024 BGN'000		December 31, 2023 BGN'000
Balance at the beginning of the year	711		668
Accrued during the period	543		625
Utilised during the period	(432)		(582)
Balance at the end of the period, including:	822		711
Paid leaves	693		600
Social security on paid leaves	129		111

The balance at the end of the year is presented in the consolidated statement of financial position together with current payables to personnel.

23.       Current income tax

	June 30, 2024 BGN'000		December 31, 2023 BGN'000
Income tax payable at the beginning of the period	1,266		22
Corporate income tax accrued	209		141
Corporate income tax paid	-		(88)
Offseting	(20)		-
Acquired through business combination	-		1,191
Dispensed through business combination	(13)		-
Due corporate income tax at the end of the period	1,442		1,266

24.       Subsidiaries

The subsidiaries, included in the consolidation, over which the Group has control as of June 30, 2024 and December 31, 2023 are as follows:

Subsidiary	Main activity	Investment as at June 30, 2024	Investment as at December 31, 2023
Varna Storage Ltd	Trade of petrol and petroleum products	100%		100%
Petrol Finance Ltd	Financial and accounting services	100%		100%
Elit Petrol -Lovech JSC	Trade of petrol and petroleum products	100%		100%
Lozen Asset JSC	Acquisition, management and exploitation of property	100%		100%
Petrol Properties Ltd	Trading movable and immovable property	100%		100%
Kremikovtsi Oil Ltd	Processing, import, export and trading with petroleum products	100%		100%
Shumen Storage Ltd	Processing, import, export and trading with petroleum products	100%		100%
Office Estate Ltd	Ownership and management of real estates	100%		100%
Svilengrad Oil Ltd	Processing, import, export and trading with petroleum products	100%		100%
Varna 2130 Ltd	Trade of petrol and petroleum products	100%		100%
Bulgaria Cargo Rail Ltd	Export and transport of petrol and petroleum products	100%		100%
Crystal Assets Trade Ltd	Real estate management	100%		100%
Crystal Asset Property Ltd	Real estate management	100%		100%
Crystal Assets Bulgaria Ltd	Real estate management	100%		100%
Prima Assets Bulgaria Ltd	Real estate management	100%		100%
Prima Assets Trade Ltd	Real estate management	100%		100%
Prima Consult Property Ltd	Real estate management	100%		100%
Prima Lend Property Ltd	Real estate management	100%		100%
Petrol Oil Recycling Ltd	Management and processing of collection and recycling of waste oil products	100%		100%
Petrol Investment JSC	Acquisition, management, operation and disposal of real estates	99.98%		99.98%
Petrol Finances Ltd	Financial and accounting services	99%		99%
Petrol Technologies Ltd	IT services and consultancy	98,80%		98,80%
Petrol Technology Ltd	IT services and consultancy	98,80%		98,80%
Petrol Export Ltd	Trade of fuels for export	-		100%

All subsidiaries are with address and registration in Republic of Bulgaria

24.1     Acquisition of subsidiaries

In June 2023, a new subsidiary named Petrol Oil Recycling Ltd was established by making a cash contribution. In return for the cash contribution, the Group acquires 5,000 company shares, each with a nominal value of one BGN, representing 100% of the capital.

Subsidiaries acquired during the year ending 31 December 2023 (excluding those established with non-cash contributions and additional cash contributions)

Subsidiariy	Abbreviation	Share %		Purchase price BGN'000
Crystal Asset Property Ltd	KAP	100%		42,000
Prima Lend Property Ltd	PLP	100%		24,500
Crystal Assets Trade Ltd	КАТ	100%		8,500
Prima Consult Property Ltd	PKP	100%		7,800
Prima Assets Trade Ltd	PAT	100%		4,000
Prima Assets Bulgaria Ltd	PAB	100%		2,000
Crystal Assets Bulgaria Ltd	KAB	100%		1,200
				90,000

In September 2023, through a share transfer agreement and an investment bank loan, the Group acquired 364,512 shares with a nominal value per share of BGN 100, representing 100% of the capital of Crystal Asset Property ltd. for an acquisition price of BGN 42,000 thousand.

In September 2023, through a share transfer agreement and an investment bank loan, the Group acquired 66,958 company shares with a nominal value per share of BGN 100, representing 100% of the capital of Crystal Assets Trade Ltd., for an acquisition price of BGN 8,500 thousand.

In October 2023, through a share transfer agreement and an investment bank loan, the Group acquired 17,250 shares with a nominal value per share of BGN 100 (one hundred), representing 100% of the capital of Crystal Assets Bulgaria Ltd. for an acquisition price of BGN 1,200 thousand.

In October 2023, through a share transfer agreement and an investment bank loan, the Group acquired 1,670,713 company shares with a nominal value per share of BGN 1 (one), representing 100% of the capital of Prima Assets Bulgaria Ltd. for an acquisition price of BGN 2,000 thousand.

In October 2023, through a share transfer agreement and an investment bank loan, the Group acquired 364,923 shares with a nominal value per share of BGN 10 (ten), representing 100% of the capital of Prima Assets Trade Ltd. for an acquisition price of BGN 4,000 thousand.

In October 2023, through a share transfer agreement and an investment bank loan, the Group acquired 740,310 shares with a nominal value per share of BGN 10 (ten), representing 100% of the capital of Prima Consult Property Ltd. for an acquisition price of BGN 7,800 thousand.

In October 2023, through a share transfer agreement and an investment bank loan, the Group acquired 1,868,280 shares with a nominal value per share of BGN 10 (ten), representing 100% of the capital of Prima Land Property Ltd. for an acquisition price of BGN 24,500 thousand.

24.2.    Assets acquired and liabilities recognised at the acquisition date

Acquired during the period ending December 31, 2023

	KAT	KAP	KAB	PAB	PAT	PKP	PLP	Total
	BGN'000	BGN'000	BGN'000	BGN'000	BGN'000	BGN'000	BGN'000	BGN'000
Non-current assets
Property, plant and equipment and intangible assets	4,898	32,200	671	2,057	4,596	9,222	23,760	77,404
Right-of-use assets	-	74	-	-	-	-	-	74
Deferred tax assets	-	-	50	3	-	20	47	120
Total non-current assets	4,898	32,274	721	2,060	4,596	9,242	23,807	77,598
Current assets
Loans granted	9,443	7,843	483	947	2,032	3,020	9,139	32,907
Trade and other receivables	111	84	22	29	8	163	780	1,197
Cash	59	10	2	1	3	1	17	93
Total current assets	9,613	7,937	507	977	2,043	3,184	9,936	34,197
Total assets	14,511	40,211	1,228	3,037	6,639	12,426	33,743	111,795
Non-current liabilities
Deferred tax liabilities	134	859	-	-	-	-	-	993
Trade and other receivables	-	262	-	-	-	-	-	262
Payables under lease agreements	-	54	-	-	-	-	-	54
Total non-current liabilities	134	1,175	-	-	-	-	-	1,309
Current liabilities
Trade and other payables	6,737	1,443	4	344	796	1,466	3,306	14,096
Current income tax	660	-	-	34	77	110	310	1,191
Payables under lease agreements	-	25	-	-	-	-	-	25
Loans received	1	-	-	-	-	-	-	1
Total current liabilities	7,398	1,468	4	378	873	1,576	3,616	15,313
Total liabilities	7,532	2,643	4	378	873	1,576	3,616	16,622
Net assets	6,979	37,568	1,224	2,659	5,766	10,850	30,127	95,173

24.3.    Goodwill / Income arising on acquisition

A goodwill of BGN 7,070 thousand (note 14) and bargain purchase income/gain of BGN 9,164 thousand (note 8) has been recognised for subsidiaries acquired during the year ended 31 December 2023 (continued) as follows:

	KAT	KAP	KAB	PAB	PAT	PKP	PLP	Total
	BGN'000	BGN'000	BGN'000	BGN'000	BGN'000	BGN'000	BGN'000	BGN'000
Price	8,500	42,000	1,200	2,000	4,000	7,800	24,500	90,000
(-) Fair value of net assets as at the date of acquisition	(6,979)	(37,568)	(1,224)	(2,659)	(5,766)	(10,850)	(30,127)	(95,173)
Effect of assets and liabilities settlement under lease agreements within the scope of IFRS 16	169	898	74	204	495	244	995	3,079
Goodwill / (Bargain)	1,690	5,330	50	(455)	(1,271)	(2,806)	(4,632)	(2,094)

24.4.    Net cash flows from the acquisition of subsidiaries

Acquisition consideration of BGN 90,000 thousand was paid in full by bank loan and in the consolidated cash flow statement the payments are presented net of cash acquired of BGN 93 thousand as a cash outflow of BGN 89,907 thousand.

24.5.    Disposal of interest in subsidiaries

In May 2024, by means of a contract for purchase and sale of company shares, the Parent company transferred to a third party 50 company shares, each with a nominal value of BGN 1,000, representing 100% of the capital of Petrol Export Ltd., for a sale price of BGN 50 thousand. At the date of the transaction the consolidated net assets amounted to BGN 23 thousand and the result of the sale was a gain of BGN 27 thousand.

In July 2023, a share purchase agreement was concluded under which the Parent company is to transfer to a third party 1,841,700 shares, each with a nominal value of one lev, representing 100% of the capital of Svilengrad Oil Ltd. No payments have been made under this contract and an agreement was reached in November 2023 to terminate it retroactively.

Disposal of interest in subsidiaries during previous years

In December 2015 a contract with notarized signatures, whereby Petrol AD transferred to a company outside the Group 100% of Naftex Petrol EOOD's equity shares against BGN 1. Changing the sole owner of Naftex Petrol EOOD is filed timely for entry in the Commercial register at the Registry Agency, but has not been recorded because of incompleteness in the documents attached to the application. However, since the contract, as at December 2015, has been concluded properly according to the prescribed by the Commercial Code form, it raises legal action between the parties involved, due to which Petrol AD is no longer the sole shareholder of Naftex Petrol EOOD. Consequently, it is accepted that the Group has lost control and assets and liabilities of the subsidiary were written off and the gain was recognized resulting from the loss of control in the consolidated statement of profit or loss and other comprehensive income. As at the transaction date the consolidated net assets of the subsidiary amounted to negative BGN 314,452 thousand. The result of the sale of the Group was a profit amounted to BGN 314,452 thousand.

In March 2016, the change of the sole owner of Naftex Petrol EOOD (subsidiary until December 2015) has been repeatedly applied for registration with the Commercial Register when a completed set of documents as instructed by the officials has been submitted. The registration was suspended by the court because of a request by a shareholder of the Parent company, on the grounds that the sale contract was challenged in court because executives were not authorized to conclude the agreement by the general meeting of the company contrary to the provisions of POSA. Before the conclusion of the transaction, it was thoroughly checked for compliance with the law and that fall below the thresholds for convening the General Meeting pursuant to Art. 114 of the POSA as documents proving this circumstance are duly implemented in the Commercial Register with the application for registration of the change of the sole owner of the Group. In December 2021, the Lovech District Court issued a final decision on the pending litigation, rejecting the claim filed against the Parent company. In its decision, the court found that the contract for sale of company's shares was concluded validly in the form required by law and in compliance with the provisions of the POSA. The procedure for change in Commercial Register must be initiated again by the buyer.

25.       Capital management

In accordance with the provisions of Art. 252 of the Commercial Act (CA), the Group must maintain the value of its net assets above the value of its registered capital.

In order to ensure the functioning of the Group as a going concern, Management has undertaken a series of measures, both purely procedural and business-oriented, aimed at bringing the Group's capital in line with the requirements of the Commercial Act (CA) as well as improving the overall financial position.

The Management of the Group has undertaken series of measures in order to optimize the capital adequacy of the company. As a result of the several General Meetings of Shareholders held during 2016 and 2017 a decision for reverse split procedure for merging 4 old shares with a nominal of BGN 1 into 1 new share with nominal of BGN 4 and subsequent decrease of capital of the Parent company in order to cover losses by decreasing the nominal value of the shares from BGN 4 to BGN 1 was voted.

In March 2018 following a decision of the Lovech Regional Court, which cancelled the refusal of the Commercial Register (CR) to register the decision taken on EGMS for merging of 4 old shares with BGN 1 nominal in 1 new share with BGN 4 nominal. The submitted change was registered in the Commercial Register and the registered capital of the Parent company of BGN 109 249 612 was distributed in 27 312 403 shares with nominal of BGN 4 each. The change in capital structure was registered also in the register of Central Depository AD. The Commercial Register enacted a refusal on the submitted in April 2018 application for registration of the decision of EGMS for the second stage of the procedure reducing the nominal value of the shares of the Parent company from BGN 4 to BGN 1 to cover losses.

At EGMS of Petrol AD held on November 8, 2018 the decision to decrease the capital of the Parent company in order to cover losses by decreasing the nominal value of the shares from BGN 4 to BGN 1 was voted again. A refusal was given on the application for registration of the decision in CR, which was appealed by the Group within the statutory term. The minority shareholders disputed the decision of EGMS and additionally to the refusal, the application proceedings were postponed until the pronouncing of the Lovech Regional Court on the court proceedings, initiated on minority shareholders' request. In March 2019, the Lovech Regional Court ruled a decision instructing Commercial Register to reflect the reduction of capital after the resumption of the registration proceedings and ruling on the cases initiated at the request of the minority shareholders.

The decision for decreasing the capital was voted again on a new EGMS held in February 2019. On the same EGMS was also taken a decision for replacement of the deceased member of the Supervisory Board Ivan Voynovski with Rumen Konstantinov. The application for registration of these circumstances in the account of the Parent company was refused, which was disputed within the legal term by the Group.

In addition to the refusal the registration proceedings were postponed at a request of minority shareholders until the pronouncing of the Lovech Regional Court. In May 2019 the Lovech Regional Court enacted a decision, which repealed the enacted refusal and turn back the case to the Registry Agency for a registration of the application after a resumption of the ceased registration proceedings. At present, the court proceedings for repealing of the decisions of EGMS from February 2019 are pending.

At the AGM of Petrol AD convened on 29 March 2023, a resolution was again passed to reduce the Company's capital to cover losses by reducing the nominal value of the shares from BGN 4 to BGN 1.

Next capital adequacy measure, which the Group has taken is a change in accounting policy in relation to non-current tangible assets - property, plant and equipment and intangible fixed assets of the policy applied in its financial statements until 2019 including the cost model, with the application from the beginning of 2020 of the other model - the revaluation model, which the Management considers to reflect more objectively the value of the held non-current tangible and intangible assets.

As a consequence of the effects of the pandemic and the resulting military conflict in Ukraine since the beginning of 2022 and the economic consequences they have caused and continue to cause, together with geopolitical risks and high commodity prices, the Group's management expects competition to intensify in the coming years, mainly in the retail market, with a gradual exit of some of the smaller independent traders from the fuel business. At the same time, trading margins are forecast to be around or below the European average.

In 2024, the Management will continue the process of analyzing and exploring opportunities to expand wholesale trade, including through the import and export of petroleum products.

The future development plans of the Group's business are closely linked to the stated expectations of changes in the market environment. The management continues to follow the outlined restructuring program of the Petrol Group's activities, which has to be changed as a result of the rapidly changing market environment and the risks and difficulties encountered, with the aim of concentrating efforts in the direction of optimizing the core business - retail and wholesale fuel trading, and at the same time developing and expanding the Group's activities in line with climate changes and new prospects. In order to improve the financial position, the Management continues to actively analyze all cost items in search of hidden reserves for their optimization, including closing or leasing underperforming petrol stations, increasing the number of self-service petrol stations, or switching to a mixed mode of operation. In 2024, Management will continue the process of analyzing and exploring opportunities to expand wholesale, including through the import and export of petroleum products.

In the coming years, the Group's performance will also depend on the ability to make investments and the successful implementation of new projects. The Group's investments will be preferably focused to build new petrol stations, modernize others, provide them with charging stations and increase Petrol AD's sales and market share, mainly by transforming the petrol stations operated by the Group into modern full-service and leisure facilities.

In 2024 the number of petrol stations under franchise agreements is maintained, but following the strategy of expanding market share in the retail market, the Group plans to attract new petrol stations under the Petrol flag under the franchise programme. In addition, in the coming years, the Group's management will seek opportunities, through external financing, to build several new service stations in prime locations.

The Group's management carries out an active marketing policy. Marketing events are planned, supported by sufficient media appearances to drive fuel sales growth. Management will continue to develop its card system and the establishment of a customer loyalty system.

The actions of the Petrol Group's Management are aimed at promoting the principles and traditions of good corporate governance, enhancing the confidence of stakeholders, namely shareholders, investors and counterparties, as well as disclosing timely and accurate information in accordance with legal requirements.

The Group's management monitors the emergence of risks and negative consequences as a result of the pandemic caused by COVID-19, the military conflict between Russia and Ukraine and the high levels of inflation, making ongoing assessments of the possible effects on the Group's assets, liabilities and operations, seeking to comply as far as possible with contractual commitments, despite the force majeure circumstances that have arisen. In view of the effects of the pandemic, military conflicts and high inflation, which are challenging economic activity in the country and creating significant uncertainty about future business developments, there is a real risk of a decline in sales and losses for the Group. However, the Group's management believes that it will be able to successfully lead the Group out of the emergency in which it has been placed.

To carry out its business, the Group requires unrestricted capital resources primarily to provide the working capital required for its operations, to service its obligations in a timely manner and to pursue its investment intentions. The principal sources of liquidity are cash and cash equivalents, long-term and short-term borrowings, a reduction in the period for collection of trade receivables and an extension of the period for payment of trade payables, which the Group's management seeks to optimise.

The major ratios, which give information about the financial position of the Group are disclosed in Selected performance indicators from the Annual consolidated management report of Petrol Group for the first half of 2024.

In the first half of 2024, the Group's current ratio decreased to 1.17 compared to 1.20 at the end of 2023. As at June 30, 2024, current assets increased by BGN 6,476 thousand to BGN 107,735 thousand, while current liabilities increased by BGN 7,693 thousand compared to the end of 2023 to BGN 91,901 thousand. The increase in current assets and liabilities is, on the one hand, the result of seasonality and the usually stronger summer months, resulting in an increase in the Group's monthly sales and accounts receivable.

An additional effect is the higher average selling prices in the current period, which leads to the commitment of more working capital. In addition, the increase in short-term liabilities is a consequence of the increase of BGN 5,530 thousand in bank loan liabilities.

The Group's total assets increased by BGN 6,000 thousand to BGN 334,717 thousand mainly as a result of the increase of BGN 7,313 thousand in trade and other receivables and the increase of BGN 3,539 thousand in trade loans granted. The Company's total liabilities increased by BGN 7,940 thousand to BGN 313,729 thousand, almost entirely due to the increase of BGN 6,517 thousand in bank loans payable compared to the end of 2023.

In the first half of 2024, the turnover ratio declines to 12 days, compared to 15 days at the end of 2023. The time taken by the Group to collect its receivables from customers increases to 16 days vs. 13 days in 2023.

Guarantees given and contingent liabilities assumed by the Group are disclosed in note 27 Contingent liabilities.

Macroeconomic conditions and legal framework

The Petrol Group's activity is influenced by the general economic condition of the country and in particular the degree of the successful adoption of the market-oriented economic reforms by the government, changes in the gross domestic product (GDP) and the purchasing power of the Bulgarian customers. In the long term the change in the fuels consumption in the country is commensurate with the GDP.

COVID-19 influence on the Group's activity

Long-term impact of the COVID-19 pandemic

The global spread of the COVID-19 virus and the subsequent introduction of anti-epidemic measures in the country have created a number of obstacles and negative consequences for the Bulgarian economy. Disruptions in international supply chains, forced restrictions on the movement of citizens, and the suspension of specific sectors have resulted in disruptions to economic activity in the country. In contrast to 2020 and 2021, no anti-epidemic measures restricting the movement of people and goods were imposed in the last two years. Despite the absence of the imposition of restrictive measures in 2022 and 2023, the country's GDP recorded a decline in growth, with The country's GDP grew by 3.4% and 1.8% year over year, compared to 7.6% in 2021. For the first three months of 2024, the country's GDP, according to the National Revenue Agency (NSI), grew by 1.8% year-on-year and by 0.4% compared to the fourth quarter of 2023.

In 2020 and 2021, COVID-19 had a significant effect on the Petrol Group's operations, with the Group's sales revenue decreasing by 27.5% year-on-year in 2020, which was partially recovered in 2021 to BGN 499,841 thousand (before restatement of discontinued operations of the comparative period) compared to BGN 538,499 thousand in 2019. In 2022, the Group increased its sales revenue to BGN 812,431 thousand due to strong demand for fuel exports. In 2023, the Group's sales revenue amounts to BGN 571,584 thousand, reporting an increase of 6.1% compared to the 2019 pre-forecast levels. Despite the growth in sales revenue over the last two calendar years, the Group has not yet been able to restore retail fuel sales to pre-pandemic levels, which, in the event of adverse future developments and the spread of the virus, could become a long-term negative impact for the Group from the pandemic.

The accumulated historical information on the financial condition of the Petrol Group for the last three consecutive years and the effects on the Group caused by COVID-19 for this period create future preconditions in the medium and long term if the pandemic continues to spread at certain intervals, the Group will fail to restore sales to its pre-pandemic levels. Subsequent restrictions on the movement of people may permanently change people's attitudes and habits in the medium term, which would directly reflect on the financial performance, liquidity, cash flow and sales of the Group, as double-digit sales declines close to those of 2020 (-27.5%) and loss of market share in such a scenario are not excluded.

In response to the complex economic and geopolitical situation, the Group's management takes action to optimize costs and diversify products and services for its customers. One of the projects in this direction is the construction of a chain of self-service petrol stations that provide customers with an alternative to the standard service, reduce the carbon footprint, including electricity, heating and water consumption, and last but not least the costs for the Group. As at June 30, 2024 the Group operates 20 full or partial self-service petrol stations, and the Group plans to double them in the coming years. With the self-service chain projects and processes undertaken by the Petrol Group management, the Group will try to respond to the change in consumer demand and the new challenges posed by COVID-19 and the increase in expenses during the last year.

COVID-19 recovery

Following the initial shock caused by COVID-19, the Group recovered some of the sales lost due to COVID-19 in 2021, with the Petrol Group reporting annual growth in sales of goods and services of 28% to BGN 499,841 thousand (before restatement for discontinued operations) as at 31 December 2021. In 2022, it was able to realise a further 64.7% year-on-year growth, mainly driven by wholesale fuel sales and strong demand for energy products following the war in Ukraine. In 2023, the decrease in demand for fuel and energy products for export resulted in a decrease in Petrol Group's sales revenue to BGN 571,584 thousand or 29.6% compared to sales revenue from continuing operations in 2022. Despite the partial recovery of sales revenues from goods and services compared to the pandemic year 2020, in 2023 the Petrol Group failed to reach retail fuel sales from pre-pandemic levels.

The rapid recovery after the pandemic inspires a dose of optimism that the main shocks for Oil caused by the virus have passed. Growth in fuel and other commodity sales revenues in 2021 and 2022 have helped the Group to return to a largely normal operating rhythm, yet the negative effects on liquidity, retail fuel sales and the Group's overall financial position have not fully dissipated. For the first half of 2024, the Group reported sales revenue of BGN 243,930 thousand, compared to BGN 265,423 thousand for the same period in 2023. High inflation, minimum wage increases and fuel price increases are preventing the Group from achieving pre-pandemic levels of financial performance and retail fuel sales. In addition, the dynamics of the spread of COVID-19, combined with the newly emerging military conflict between Russia and Ukraine and its potential risks, as well as the high volatility of international crude oil prices in recent months, which directly affect the Petrol Group's operations, create significant risks for the Group and at the same time prevent the Group from capturing and planning for the potential intensity of the negative effects on its operations.

War conflict between Russia and Ukraine and Middle east

On February 24, 2022 Russian military units enter the territory of Ukraine, while the Russian army begins to launch missile strikes on strategic Ukrainian targets. From that day in February, the military conflict between Russia and Ukraine began. The clash between the two countries and the departure of Ukrainian civilians of their homelands to save themselves from Russia's military invasion in Ukraine has created an unprecedented humanitarian crisis in Europe since World War II. All business sectors are influenced to some extent by the military conflict.

The arising military conflict and the imposed by the EU and the US economic, financial and other sanctions on Russia to end the conflict are blocking the economic activity between the European Union and Russia, restricting the payments and the free movement of people, goods and services, and simultaneously cause significant ubiquitous disruptions on financial markets and non-financial sector.

The military conflict has further affected the prices of many goods, resources and services, as Russia is a major exporter of fossil fuels, metals and other resources, and the purpose of sanctions imposed by the European Union and the United States is to limit Russia's economic activity. Fossil fuels are still a major part of the process from the creation to final consumption of almost all goods in the EU, as a result of which a future uncertainty about prices and availability of fossil fuels and other resources worsens the economic prospects for the EU and Bulgaria in particular. The warm winter and the increase in the fossil supplies from alternative sources help the EU countries to overcome the breaking out short-term anomalies caused by the sanctions and restrictions.

As the main activity of the Petrol Group is wholesale and retail trading and storage of fuels and other petroleum products, a lasting increase in international fossil fuel prices will have a negative impact on the Group's sales, leading to significant losses and deterioration of the financial condition and operational results of the Petrol Group. As the majority of fossil fuel supplies in the country in 2023 are of Russian origin, a potential complete ban on fuel supplies from Russia could lead to a shortage of fuels in the country and problems for the Petrol Group to secure its sales, with the risk of closure of retail petrol stations, temporary working hours and other negative consequences.

To respond to this scenario, the Group's management is examining the possibility of importing fuels from third countries, thus being able to reduce the potential future consequences for the Petrol Group of the EU and the US sanctions imposed on Russia and potential reciprocal sanctions.

An important decision for the activities of Petrol Group is the amendment by the Council of the European Union, adopted on June 4, 2022 of Council Regulation (CR) № 833/2014 of July 31, 2014 regarding the restrictive measures concerning the Russia's destabilizing actions in Ukraine, which amendment allows, after approval by the Council of Ministers of Republic of Bulgaria, import by sea of crude oil and petroleum products under Annex XXV of Council Regulation (EU) 833/2014 with a origin from  Russia under contracts signed before June 4, 2022 or under additional contracts necessary for execution of such contracts.

Additionally, with a decision of the Council of Ministers from December 2, 2022 is allowed the execution in the period from December 5, 2022 to December 31, 2024 of contracts signed before June 4, 2022 or of additional contracts necessary for the execution of such contracts, for the purchase, import or transfer of crude oil transported by sea, and of petroleum products listed in Annex XXV of Council Regulation (EU) 833/2014 concerning restrictive measures in view of Russia's actions destabilizing the situation in Ukraine, originating in Russia or exported from Russia, in accordance with Art. 3m, paragraph 5 of the European Regulation.

At the end of 2023, after long political discussions, the National Assembly of the Republic of Bulgaria adopted the Law on Amendments and Additions to the Law on Control of the Implementation of Restrictive Measures in View of Russia's Activities Destabilizing the Situation in Ukraine, and its subsequent amendment on 22 December 2023, the purchase, import or transfer, directly or indirectly, of crude oil or petroleum products listed in Annex XXV of Regulation (EU) No 833/2014, if they originate in or are exported from Russia, is prohibited as at 1 March 2024.

The Petrol Group does not carry out any economic activity on the territory of Ukraine and Russia and does not suffer any direct negative consequences from the ongoing military conflict. The Group realized a significant decrease in revenues from wholesale fuel sales, which for the first half of 2024 decreased to BGN 9,332 thousand against BGN 34,432 thousand for the comparative period of 2023.

On 07 October 2023, supporters of the Hamas group entered Israeli territory, killing and kidnapping Israeli civilians. Israel then carried out retaliatory rocket strikes, resulting in numerous casualties, while Israeli troops entered the Gaza Strip. At the date of this financial report, the military conflict has not ended.

The military conflict in the Gaza Strip does not currently impact the Group's operations and results.

With the adopted decisions by the Council of the European Union and the Council of Ministers aiming to ensure the consumption of fuels, the Management of the Group believes that in the short-term disruptions leading to significant losses for the Group should not be expected. However in a situation of war on the territory of a country close to Bulgaria, there is always a risk of expansion and/or worsening of the military conflict with a subsequent destructive consequences.

26.       Disclosure of transactions with related parties

The Parent company (Controlling company) is Petrol AD. It has a two-tier management system, which includes a Management Board (MB) and a Supervisory Board (SB). Below are the names and functions of the members of the Supervisory and Management Board of Petrol AD.

Supervisory Board
Ivan Voynovski [2]	Chairman
Petrol Correct EOOD, represented by Nikolay Gergov	Member
Petrol Asset Management EOOD, represented by Armen Nazaryan	Member
Management Board
Grisha Ganchev	Chairman of the Management Board
Georgy Tatarski	Deputy chairman of MB and Executive director
Milko Dimitrov	Member of MB and Executive director
Lachezar Gramatikov	Member of MB
Kiril Shilegov	Member of MB

The total amount of the accrued remunerations of the members of Management and Supervisory Board of the Parent company, included in the personnel expenses as at June 30, 2024 , amounts to BGN 845 thousand (BGN 652 thousand as at June 30, 2023) and unsettled liabilities of BGN 68 thousand, including BGN 54 thousand liabilities to personnel and BGN 12 thousand liabilities to legal entities (BGN 85 thousand, including BGN 73 thousand to personnel and BGN 12 thousand to legal entities as at December 31, 2023).

Related parties of the Petrol Group are the shareholder with significant influence in the Parent company, Storage Invest ltd. and its related parties.

Included in purchases from related parties - a shareholder with significant influence - for the period ending 30 June 2024 are lease costs of property, plant and equipment amounting to BGN 29 thousand, accounted for as lease expenses in accordance with the provisions of IFRS 16 in the statement of profit or loss and other comprehensive income, including depreciation expense and interest expense. Included in sales to related parties - a shareholder with significant influence - for the period ending June 30, 2024 is service revenue of BGN 1 thousand.

As of June 30, 2024 and December 31, 2023, the outstanding balances with related party entities are as follows:

Related party	June 30, 2024		December 31, 2023		June 30, 2024		December 31, 2023
	BGN'000		BGN'000		BGN'000		BGN'000
	Receivables		Receivables		Payables		Payables
Other related parties	2,926		2,646		13,525		12,302
Short-term loans	-		-		4		2
Shareholder with a significant influence	-		14		31		47
Key management - legal entities	-		-		12		12
	2,926		2,660		13,568		12,361

27.       Contingent liabilities

As at June 30, 2024 the Group has contingent liabilities, including issued mortgages and pledges of property, plant and equipment, which serve as a collateral for bank loans and credit limits for issuance of bank guarantees, as well as factoring agreements granted to the Group and unrelated parties with a total carrying amount of BGN 100,286 thousand, including in favour of First Investment Bank AD - BGN 94,940 thousand, in favour of Investbank AD - 3,294 thousand, and in favour of DSK AD - BGN 2,052 thousand.

Pursuant to an agreement dated October 17, 2018 and its annexes the Group is a joint co-debtor and avalist on promissory note for BGN 47,667 thousand in favour of Investbank AD under loan agreement of unrelated supplier, including limit for overdraft and limit for stand-by credit for issuance of bank guarantees in favour of Customs Agency. The total amount of the utilized funds and issued bank guarantees of all borrower's exposures to the Bank shall not exceed BGN 44,000 thousand. In relation to this credit agreement, the Group has established in favour of Investbank AD a special pledge on its cash in the bank account opened in the bank-creditor with total amount of BGN 9 thousand as at June 30, 2024 and a special pledge on receivables from contractors for BGN 4,000 thousand average monthly turnover.

Pursuant to an agreement dated June 17, 2021 the Group is a joint debtor for BGN 600 thousand in favour of Investbank AD under a credit limit for bank guarantees, granted to an unrelated party - a supplier.

As at June 30, 2024 the Group bears a joint obligation for BGN 2,346 thousand according to a contract for debt dated January 13, 2017 on an obligation of a subsidiary until March 2018 - Elit Petrol AD.

Under a bank agreement for revolving credit line dated July 21, 2023, bank guarantees were issued for a total amount of BGN 5,164 thousand as at June 30, 2024, including BGN 4,250 thousand in favor of third parties - Group's suppliers, BGN 500 thousand in favour of Ministry of Economy to its registration under the Law on the Administrative Regulation of Economic Activities Related to Oil and Petroleum Products and BGN 914 thousand to secure own liabilities related to contracts under the Public Procurement Act. As at June 30, 2024 the contract is secured by a pledge of all receivables on bank accounts of the Parent company to cover contract obligations and а mortgages of real estate and pledge of plants and equipment, as well as assets owned by a subsidiary totaling BGN 4,400 thousand.

In the previous reporting periods companies from the Group have entered into the debt under two loan agreements of a subsidiary with a bank-creditor (until December 2015) for USD 15,000 thousand and USD 20,000 thousand, respectively. In 2015 the bank -creditor acquired court orders for immediate execution and receiving orders against the subsidiaries - joint debtors. In relation to the claims filed by the subsidiaries, the competent court has revoked the immediate enforcement orders and has invalidated the receiving orders. In October and December 2015 the creditor has filed claims under Art. 422 of Civil Procedure Code (CPC) against the subsidiaries for the existence of the receivables under each loan agreement. The court proceedings of the creditor are still pending.

In December 2016 the first-instance court decreed a decision (the Decision) which admit for established that the bank has a receivable amounted to USD 15,527 thousand from the subsidiaries - joint debtors, arising from a signed loan agreement for USD 15,000 thousand. With the same decision the court has ordered the joint-debtors to pay BGN 411 thousand to the bank - creditor for legal advisory fees and court dispute expenses and BGN 538 thousand state fee in favor of the judiciary state for the ordered proceedings and BGN 538 thousand state fee for claim proceedings. In January 2017, the co-debtors have filed in time appeals against the court decision, because of that the decision did not come into force. As at the date of the preparation of these consolidated financial statements, the court dispute is pending in the appeal court. The Group's Management considers that there are grounded chances the Decision to be entirely repealed.

As at the date of the preparation of these financial statements, the filed proceedings against the subsidiaries - joint debtors for estimation of the bank receivables due to the loan agreement for USD 20,000 thousand is pending before the first-instance court. The Management expects favorable decision by the competent court. In 2018 the Parent company sold its interest in one of co-debtor subsidiaries and the potential risk for the Group is reduced to the court proceedings against the second subsidiary.

Corporate Commercial bank AD (in insolvency) - a creditor of a subsidiary (until December 2015) unreasonably claimed in court the responsibility of the Parent company under a contract of guarantee for liabilities arising from a contract for a framework credit limit as a result of that the bank accounts of the Parent company amounting to USD 29,983 thousand were garnished. This claim was disputed in court by the Group because the liability as guarantor has not occurred and / or extinguished pursuant to Art. 147, par. 2 of the LOC. At the time of signing of the guarantee agreement, the deadline of the arrangements between the lender and subsidiary contractual framework for credit limit was July 1, 2014. The term of the framework credit limit was extended without the consent of the customer, therefore the responsibility of the latter has fallen by six months after initially agreed period, during which the creditor has brought an action against the principal debtor. The term of Art. 147, par. 1 of the LOC is final and upon its expiration the company's guarantee has been terminated, so the objection of the Parent company was granted by the court and imposed liens on bank accounts lifted.

After the writ of execution, pursuant to order proceedings, was canceled on which were imposed liens on bank accounts of the Parent company, the creditor has initiated legal claim proceedings under Art. 422 of the CPC to establish the same claims against the subsidiary (until December 2015) and the guarantor the Parent company. In these proceedings the objections are repeated, that liability as guarantor has not occurred and / or extinguished pursuant to Art. 147, par. 2 of the LOC, and therefore the Management expects that the claim of the creditor against the Parent company will be dismissed permanently by a court decision on those cases. At present, the case is suspended due to the existence of a preliminary ruling, which is important for the correct resolution of the case.

As at 30 June 2024, cash in the Group's bank accounts amounting to BGN 76 thousand is blocked in enforcement proceedings to which the Group is a party.

As collateral, a promissory note in the amount of BGN 15 thousand has been issued to the Parent company's counterparty under a deferred fuel purchase agreement signed in 2023.

Under a revolving credit line agreement signed in 2023 with a total limit of BGN 220,000 thousand. In July 2023, a pledge of a commercial enterprise was established as a set of rights and obligations and de facto relations of Petrol AD, Kremikovtzi Oil Ltd, Shumen Storage Ltd, Office Estate Ltd, Crystal Asset Property Ltd, Crystal Asset Trade Ltd, Crystal Asset Bulgaria Ltd, Prima Asset Bulgaria Ltd, Prima Asset Trade Ltd, Prima Consult Property Ltd, Prima Land Property Ltd As collateral under the same agreement, the Group has pledged receivables from bank accounts opened with the Bank, including funds deposited under a debt product agreement with a carrying amount as at 30 June 2024, net of impairment under IFRS 9, of BGN 54,475 thousand. The Group's financial statements for the year ended 31 December 2007 are presented in the table below.

Pursuant to the covenants under a bank loan agreement entered into in November 2023, the Group has established a mortgage on property and a pledge of plant and equipment with a total carrying amount as at June 30, 2024 of BGN 3,064 thousand. The agreement is also secured by a pledge over all of the Parent Company's receivables on bank accounts.

Pursuant to an agreement dated May 2024, the Parent company is a guarantor under an overdraft agreement granted to an unrelated party - a commercial counterparty as at June 30, 2024 with a credit limit of BGN 1,400 thousand. In connection with this credit commitment, the Parent company has pledged cash receivables in the Parent company's bank accounts in favour of First Investment Bank AD and mortgages on real estate and pledge of movable assets are to be established.

28. Events after the reporting date

In July 2024, through an in-kind contribution of PB - Sandanski, a subsidiary company of Petrol AD - Sandanski Storage Ltd. was established with UIC: 207916364 and registered capital of BGN 2,231 thousand.

Up to the date of issue of these consolidated financial statements, the Group has established contractual mortgages on three of its real estates, pursuant to a bank loan agreement in the amount of BGN 1,400 thousand granted to an unrelated party, securing in full the loan obligations.

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[1] EBITDA ( earnings before interest , tax , depreciation and amortization )

[2] [2] Ivan Alipiev Voinovski - died on February 23, 2017. On February 18, 2019, an EGMS of Petrol AD was held, where was voted a replacement of the deceased Ivan Voynovski. The application for entry in the CR was rejected, which was appealed by Petrol AD within the statutory term, and the registration proceedings were suspended at the request of minority shareholders until the District Court - Lovech rules on proceedings for annulment of decisions taken. In May 2019, the Lovech District Court ruled with a decision revoking the refusal and returning the file to the Registry Agency to make the requested entry after the resumption of the suspended registration proceedings. At present, the court proceedings on the claims for annulment of the decisions of EGMS from February 2019 are pending.

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