the club is profitable but violates the Trade Act

Levski” reports a profit of just over 2 million BGN. This is shown in the annual financial report (AFG) of the football club for 2023, published on its official website.

The Blues also present a report of the independent auditor “Zhelyazkov Audit 2004 OOD”.

The club reports an increase in revenues, which are BGN 21.4 million (compared to BGN 17.4 million a year earlier), but also in expenses – BGN 18.6 million (BGN 17.9 million for 2022). The salary fund was increased to 8.5 million compared to 7.3 million for the previous year.

The total profit of the football club is BGN 2,215 million, which is double the profit registered in 2022 – 1,001 million.

However, the published report of the independent auditor indicates a violation of a requirement of the Commercial Law. The registered capital of the company (BGN 30,787,000) exceeds its net assets, which amount to BGN 1,535,000.

This violates Article 252 of the Commercial Code. It states that the joint-stock company is terminated “if the net value of the company’s assets falls below the amount of the registered capital” and also “if within one year the general meeting does not decide to reduce the capital, to convert or to terminate”.

“These circumstances give rise to material uncertainty about the company’s ability to continue as a going concern,” the auditor concluded.

A year ago, the club’s net assets were 13,390 million, and now they are 1,535 million. The difference is the valuation of the football club and the value of the players.

You can see the annual financial report of “Levski” here.

Report and evaluation of the independent auditor – here.