Auditor Ernst & Young Confirms “Concern Galnaftogaz” 2004 Financial Results as Accurate

On June 21, 2005, the international audit firm Ernst & Young completed its audit of the consolidated financial statement of “Concern Galnaftogaz”, prepared in accordance with the International Financial Reporting Standards. As of December 31, 2004, the company’s audited consolidated assets totaled UAH 476 mln (US$ 94.3 mln), with 2004 consolidated net income of UAH 22.2 mln (US$ 4.4 mln) and sales of UAH 1,283.6 mln (US$ 254.2 mln). Operating profit before changes in working capital stood at UAH 42.2 mln (US$ 8.35 mln). It will be recalled that under the Ukrainian Standards of Accounting, in 2004 “Concern Galnaftogaz“ posted UAH 17 mln (US$ 3.4 mln) in consolidated net income.

“It’s a second time that our company has held an international audit,” says “Concern Galnaftogaz” Financial Department director Nazar Kupybida, adding: “We are actively preparing for the company’s entry into international equity markets.”

On June 30 ING Bank Ukraine, the underwriter for the second bond issue of “Concern Galnaftogaz”, stopped accepting applications for Series D bonds. The placement of Series D bonds begins today, July 1. “Concern Galnaftogaz” is conducting a second bond issue (Series D, E, F bonds) worth UAH 90 mln (US$ 17.8). According to the PFTS trading system, in the week ended June 30, 2005, “Concern Galnaftogaz” shares yet again topped the list of most actively traded shares on the First Stock Trading System (PFTS). In this week UAH 10,275,000 (US$ 2.035 mln) worth of shares changed hands.