Independent Auditor’s Report To the Members of ELTRAK BULGARIA EOOD Report on the Financial Statements We have audited the financial statements of ELTRAK BULGARIA EOOD (the ''Company'') on pages 5 to 20, which comprise the balance sheet as at 31 December 2007 and the income statement, statement of changes in equity and cash flow statement for the year then ended, and a summary of significant accounting policies and other explanatory notes. Board of Directors’ Responsibility for the Financial Statements The Company’s Board of Directors is responsible for the preparation and fair presentation of these financial statements in accordance with International Financial Reporting Standards as adopted by the European Union (EU) and International Financial Reporting Standarts as issued by the International Accounting Standarts Board (IASB). This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. Auditor’s Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Board of Directors as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
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Independent Auditor’s ReportTo the Members of ELTRAK BULGARIA EOOD
Report on the Financial Statements
We have audited the financial statements of ELTRAK BULGARIA EOOD (the ''Company'') on pages 5 to20, which comprise the balance sheet as at 31 December 2007 and the income statement, statement ofchanges in equity and cash flow statement for the year then ended, and a summary of significant accountingpolicies and other explanatory notes.
Board of Directors’ Responsibility for the Financial StatementsThe Company’s Board of Directors is responsible for the preparation and fair presentation of these financialstatements in accordance with International Financial Reporting Standards as adopted by the EuropeanUnion (EU) and International Financial Reporting Standarts as issued by the International AccountingStandarts Board (IASB). This responsibility includes: designing, implementing and maintaining internalcontrol relevant to the preparation and fair presentation of financial statements that are free from materialmisstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; andmaking accounting estimates that are reasonable in the circumstances.
Auditor’s ResponsibilityOur responsibility is to express an opinion on these financial statements based on our audit. We conductedour audit in accordance with International Standards on Auditing. Those Standards require that we complywith ethical requirements and plan and perform the audit to obtain reasonable assurance whether thefinancial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in thefinancial statements. The procedures selected depend on the auditor’s judgment, including the assessment ofthe risks of material misstatement of the financial statements, whether due to fraud or error. In making thoserisk assessments, the auditor considers internal control relevant to the entity's preparation and fairpresentation of the financial statements in order to design audit procedures that are appropriate in thecircumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internalcontrol. An audit also includes evaluating the appropriateness of accounting policies used and thereasonableness of accounting estimates made by the Board of Directors as well as evaluating the overallpresentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for ouraudit opinion.
OpinionIn our opinion, the financial statements give a true and fair view of the financial position of ELTRAKBULGARIA EOOD as of 31 December 2007 and of its financial performance and its cash flows for theyear then ended in accordance with International Financial Reporting Standards as adopted by the EU andInternational Financial Reporting Standards as issued by the IASB.
Report on Other Legal Requirements
Pursuant to the requirements of the Accountancy Law, Art.38, para 4, we report the following:
The Annual Report for Activity prepared by the Management is in compliance with the FinancialStatements of the Company as at 31 December 2007.
The financial statements have been issued for approval by the Directors on 22 March 2008
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Director
ELTRAK BULGARIA EOOD
CASH FLOW STATEMENTFOR THE YEAR ENDED 31/12/2007
31.12.2007 31.12.2006Note BGN BGN
Cash flows from operating activitiesProfit before tax 4 877 647 3 578 647Adjustments for:Depreciation 349 217 267 975Interest payable 466 157 284 179Interest receivable (278 009) (174 378)Operating profit / (loss) before working capital changes 5 415 012 3 956 423(Increase)/Decrease in stock (6 203 858) 344 689(Increase) / Decrease in debtors 934 491 (3 202 631)Increase in creditors 1 114 402 648 495Cash (used in)/generated from operations 1 260 047 1 746 976Interest paid (466 157) (284 179)Taxation paid (350 049) (227 858)Net cash (used in)/from operating activities 443 841 1 234 939Cash flows from investing activitiesInterest received 278 009 174 378Proceeds from disposals of tangible assets 189 726 -Cash paid for the purchase of fixed assets (4 919 866) (2 915 864)Net cash used in investing activities (4 452 131) (2 741 486)
Cash flows from financing activitiesProceeds from loans 46 707 562 20 543 501Repayment of loans (44 112 703) (17 890 128)Net cash generated from financing activities 2 594 859 2 653 373Net (decrease)/increase in cash and cash equivalents (1 413 431) 1 146 826Cash and cash equivalents at the beginning of the period 14 2 024 394 877 568Cash and cash equivalents at the end of the period 14 610 963 2 024 394