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CONPET SA - COTE

Auditor Report - art. 82 Law 24/2017 - H1 2019

Release Date: 7/30/2019 9:31:12 AM

IRIS Code: 59F9B

CONPET SA

No. 1-3 anul 1848 Street, Ploiesti, Prahova, Romania

TIN RO 1350020

NACE Code 4950

CRN J29/6/22.01.1991

Subscribed and paid-up share capital 28 569 842.40 RON

 

 

To: The Bucharest Stock Exchange

Phone no. +40 21.307.95.00/ Fax no. +40  021.307.95.19

 

The Financial Supervisory Authority 

Phone no. +40 021.659.60.57/ Fax no. +40 021.659.64.36; 021.659.60.51

 

REPORT ON AGREED UPON PROCEDURES ON THE INFORMATION INCLUDED IN THE CURRENT REPORTS ISSUED BY THE COMPANY IN ACCORDANCE WITH THE PROVISIONS OF LAW NO. 24/2017 (ARTICLE 82) AND REGULATION NO. 5/2018 ISSUED BY THE FINANCIAL SUPERVISORY AUTHORITY

To the Board of Directors of Conpet S.A.

 

We have been appointed by Conpet S.A. („the Company”) to perform certain procedures in accordance with the provisions of the Regulation no. 5/2018 of the Financial Supervisory Authority („ASF”) and to report on the information included in the Current Reports from 28 March 2019 and 24 April 2019 that have been prepared by the Company in accordance with the requirements of the Law  24/2017 (article 82) and of the Regulation no. 5/2018 of the Financial Supervisory Authority („ASF”) (“Reports” or “Current Reports”).

 

Our engagement was undertaken in accordance with the provisions of International Standard on Related Services („ISRS) no. 4400, „Engagements to Perform Agreed-Upon Procedures Regarding Financial Information”. The procedures were performed to analyze the transactions reported by the Company in the Current Reports and to check whether the price corroborated with the rights and obligations undertaken by the parties is correct by reference to the other offers existing on the market and are presented below:

 

1.    We obtained the contracts underlying the Current Reports issued by the Company and we verified the consistency between the reported information and the contracts.

2.    Regarding the Current Report from 28 March 2019, we obtained and examined the Report of the award procedure no. 7/15 February 2019, the offer received by the Company and the minutes of the negotiation session no. 7 /7 February 2019 regarding the negotiation of the offer submitted by CFR Marfa regarding transport services by rail of the crude oil and rich gas from the loading ramps to the destinations settled by Conpet S.A., as well as the relevant information mentioned in the report of the procedure.

3.    Regarding the Current Report from 24 April 2019 we obtained and analyzed the supporting information that was the basis for the calculation of the final quantities, and consequently of the final value of the contract concluded with CFR Marfa for the period 1 April 2015 – 31 March 2019.

4.    We obtained the Report prepared by the previous auditor on 10 August 2015 regarding the analysis of the price of the transport services contract concluded with CFR MARFA for the period 1 April 2015 – 31 March 2019.

5.    We have obtained the study performed in January 2019 by an external consultant employed by the Company on Transfer Pricing Policy on “transport services by rail of the crude oil and rich gas from the loading ramps to the destinations settled by Conpet S.A.”

 

We report below our conclusions based on procedures performed:

 

1.    The information included in the Current Reports is consistent with the information provided in the contracts and with the underlying calculation of the final value of the contract valid for the period 1 April 2015 – 31 March 2019.

2.    The analysis of the contract price concluded with CFR MARFA for the period 1 April 2015 – 31 March 2019 was the subject of the report issued by the previous auditor on 10 August 2015.

3.    Considering the results of the external consultant's study prepared in January 2019, independent companies involved in the provision of rail transport services have profit margins ranging from 0.4% to 4.62%, with a median of 1.7%. According to the initial offer made by CFR MARFA and subsequently reduced during the negotiation process, the profit margin mentioned in the offer is nil, lower than the value mentioned by the consultant.

 

Because the above mentioned procedures do not constitute either an audit or a review made in accordance with the National Auditing Standards or the National Standards on Review Engagements, we do not express any assurance on the financial information that was the subject of the report.

 

We have not performed other additional procedures to verify whether the Company reported all contracts with directors, employees, shareholders that have control, as well as the persons with whom they act concerted, to be reported according to article 82 of Law no. 24/2017 with subsequent amendments for the period 1 January 2019 – 30 June 2019.

 

Other Matters

 

Our report is solely issued for the purpose stated in the first paragraph hereof and for the Company’s Directorate information and for the information of Bucharest Stock Exchange (BVB) and ASF and is not to be used for any other purpose. Our report should not be regarded as suitable for use by any party wishing to acquire rights against us other than the Company for any purpose or in any context. Any party other than the Company that obtains access to our report or a copy of the report and chooses to rely on our report (or part thereof), should do so at their own risk. Our engagement was performed in order to report to the Board of Directors the Company on those aspects that need to be reported in an agreed upon procedures report, and for no other purpose. Our report relates only to the Current Reports mentioned above and does not extend to any other reports of the Company.

 

For and behalf of BDO Audit SRL

 

Registered in the Public Electronic Registry of financial auditors and audit firms with no. FA18

 

 

Partner’s name: Vasile Bulata

 

Registered in the Public Electronic Registry of financial auditors and audit firms with no. AF1480

Bucharest, Romania

      25 July 2019

 

 

Note: This is the English translation of the Romanian version of the agreed upon procedures report. In case of any discrepancies the Romanian version will prevail.

 

 

 

 

The BDO Audit S.R.L. auditor report, prepared in accordance with art. 144 lit. B paragraph (4) of A.S.F. Regulation no. 5/2018 regarding the issuers of financial instruments and market operations, can be consulted by accessing the link below:

 

 

 

Director General

eng. Timur – Vasile CHIS

S.s. Illegible

Stamp

 

 

 



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