Quarterly Report • Oct 31, 2017
Quarterly Report
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1 January – 30 September 017
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As of 30 September 2017 the financial result of Eurohold Bulgaria AD on stand alone base is a loss in amount of BGN 12.529 million compared to a profit in amount of BGN 7.218 million for the same period last year. The financial result for Q3'2016 was influenced by the realized profit from sale of securities in amount of BGN 15.455.
Eurohold Bulgaria AD as a holding company does not carry out regular commercial transactions, and in this respect, its main (operating) revenues are of a financial nature, as the most significant of them - revenues from financial operations occur in different reporting periods and do not have a permanent occurrence. The total revenues of the company over the reporting period amounted to BGN 2.932 million, of which BGN 0.527 million revenues from financial operations, BGN 2.140 million interest revenues and BGN 0.265 million represented dividend revenues. For comparison, as of the end of September'2016 the revenues from financial operations amounted to BGN 15.455 million, the interest revenues amounted to BGN 0.530 million and dividend in amount of BGN 0.245 million.
The operating expenses increased by 69.2% as amounted to BGN 15.6 million. This increase was mainly due to the interest expenses, which reached BGN 12.9 million compared to BGN 7 million for the comparable period in 2016. The interest expense growth was reported in relation to the five-year bonds issued in December'2016 at the amount of BGN 111.863 million on the EMTN Programme approved by the Central Bank of Ireland.
As of the end of H1'2017 the company's assets amounted to BGN 543.495 million compared to BGN 534.908 million as of the end of 2016.
During the reporting period the investments in subsidiaries increased by BGN 34 million due to a contribution in the equity of Euroins Insurance Group AD amounted to BGN 27.5 million, as well as a contribution in the equity of Eurofinance AD in amount of BGN 6.5 million. On an extraordinary session of GMS of Eurofinance AD held on 03.08.2017 was voted for capital increase of the company from BGN 14 100 000 to BGN 40 000 000 through issuance of new 25 900 000 shares with nominal and emission value of BGN 1.00 each one, the same type and class as the existing shares of the company.
The long-term assets decreased by BGN 24.2 million due to the reduction of non-current receivables from related parties by BGN 24.3 million. The short-term assets decreased by BGN 5.7 million, mainly due to the increasing of the other current receivables by BGN 6.6 million.
The total equity increased to BGN 295.8 million compared to BGN 275.9 million at the end of 2016. In February 2017 the company increased its share capital by BGN 34 million following a successful capital increase procedure. The company has provided
subordinated liabilities in amount of BGN 14.2 million as of 30.09.2017 compared to BGN 53.7 million as of 31.12.2016. The total equity and subordinated debts amounted to BGN 310 million compared to BGN 329.6 at the end of 2016.
The company's liabilities increased by BGN 23.7 million to BGN 229 million as of 30.09.2017. For the period the non-current liabilities increased by BGN 5.3 million to BGN 147.6 million comparted to BGN 142.3 million at the end of 2016. The current liabilities increased by BGN 17.319 million to BGN 80.323 million. The main growth of current liabilities was due to an increase in current liabilities on loans from financial and non-financial institutions by BGN 26.5 million and an increase of other short-term liabilities by BGN 8 million. On the other hand, the short-term liabilities to related parties decreased by BGN 15.9 million.
On the 2nd of October, 2017, was held an extraordinary meeting of shareholders of Eurohold Bulgaria AD. The General meeting of shareholders adopted the following decisions:
The main purpose of the decisions of the General Meeting of shareholders taken under items 1 and 2 is to reduce the indebtedness of Eurohold Bulgaria AD, repayment of debts of the company, incl. subordinated term debt and high interest bond loan, by issuing a new loan at a lower interest rate as well as other long-term and short-term debt. The reduction of the liabilities of Eurohold Bulgaria AD aims to improve the equity /debt ratio, profitability and capital adequacy. The interest expenses will be reduced, which will lead to an increase in free cash and higher net profit and hence the possibility of dividend distribution.
On 30th of October 2017, the Financial Supervision Commission approved the Prospectus of Eurohold Bulgaria AD for Initial Public Offering of an Issue of 40,336,250 shares with a
nominal value of BGN 1.00 and an issue value of BGN 1.30, as a result of the capital increase of the company, according to the decision of the General Meeting of Shareholders of the company dated 02.10.2017.
On 31st of October, 2017, the Central Bank of Ireland approved a Prospectus of Eurohold Bulgaria AD for a new bond issue in amount from EUR 40 up to EUR 100 million with a maximum interest rate of 8% per annum and a term of 5 years. The bond issue represents the next (second) tranche within the framework program approved by the Central Bank of Ireland in November 2016 for a medium-term Eurobond (EMTN) program with a limit of up to EUR 200 million.
Fitch Ratings-London-30 October 2017: Fitch Ratings has assigned Eurohold Bulgaria AD (Eurohold) a Long-Term Issuer Default Rating (IDR) of 'B'. The Outlooks are Stable. The agency has simultaneously assigned Eurohold's EUR200 million euro medium term note (EMTN) programme ratings of 'B'/'RR4'.
During the reporting period have no any important events that could affect results in the financial statements.
The global financial crisis, which started in 2007, led in many countries (including the US, EU countries, Russia, and Japan) to a slowdown of economic growth and an increase in unemployment, limited access to sources of financing and a significant devaluation of financial assets worldwide. The financial crisis also caused significant disturbances on the global financial market which led to reduced confidence on financial markets and, thus, difficulties of entities in the financial sector with maintaining liquidity and raising financing.
Also, the crisis on the global financial market may affect the non banking financial services sector and the sale of the range of products and services by the Group, particularly driven by the possible further decrease in unemployment and drop in disposable incomes. Deterioration in the regional financial system and markets coupled with corresponding low consumer consumption rates could seriously lower sales across all divisions of the Group and thus may also adversely affect the Group's outlook, results and financial situation.
The macroeconomic situation and the growth rate in the Balkans (Bulgaria, Romania, Macedonia and Serbia) are of key importance to the development of the Group, as well as government policy, particularly the regulatory policy and the decisions taken by the
respective National Banks affecting such external factors as money supply, interest rates and exchange rates, taxes, GDP, inflation rate, budget deficit and foreign debt, and unemployment rate and income structure.
Changes in the demographic structure, mortality or morbidity rate are also important elements affecting the Group's development. The above external factors, as well as other unfavorable political, military or diplomatic developments leading to social instability may lead to a curb on higher-level consumer expenditures, including limitation of funds allocated for insurance coverage, car buying and leasing.
This is the risk arising from political processes in the country - the risk of political instability, changes in government principles, legislation and economic policy. Political risk is directly related to the likelihood of unfavorable changes in the direction of governmental long-term policies. As a result there is a danger of adverse changes in the business climate.
The credit risk relates to the possibility for worsening of the international credit ratings of Bulgaria, Romania, Macedonia and Serbia. The low credit ratings may lead to higher interest rates and more restrictive financing conditions for business enterprises, including for the Company.
At the end of 2015, Standard&Poor's Credit Rating Agency affirmed Bulgaria's long-term and short-term foreign and local currency sovereign credit ratings "BB+/B", outlook stable. The ratings are supported by the low government debt and the moderate external indebtedness. The agency indicates as constraining factors the relatively low income-percapita levels and the weak institutional settings. Standard&Poor's estimates that the financial sector continues to face important challenges, but notes that efforts are underway to mitigate risks, including an asset quality review in the banking system slated for 2016.
Inflation risk is associated with the possibility inflation to adversely impact real returns. Inflation may affect the amount of expenses of the Issuer as a large part of the company's liabilities are interest bearing. Servicing them is related prevailing current interest rates, which reflect levels of inflation in the country. Therefore, low inflation rates in the countries of operation, is seen as a significant factor in the Company.
This risk is related to the possibility of devaluation of a local currency.
In the case of Bulgaria this is the risk of a premature collapse of the Monetary Board and the drastic change in corresponding fixed exchange rate of the national currency. The official government and central bank policy are expected to maintain the currency board country to the adoption of the euro area.
In Romania, Serbia and Macedonia the exchange rates are determined by free market forces and rare interventions by central banks are driven primarily by sharp market movements in FX rates, caused by one-time extrinsic factors.
Any significant devaluation of currencies in the region (Bulgaria, Romania, Macedonia and Serbian) can have a significant adverse effect on businesses in the country, including that of the Company. Risks exist when revenues and expenditures of a firm are derived in different currencies.
Interest rate risk is related to the possibility of changes in the prevailing interest rates in a country. Its impact is most obvious on the Net Income of a firm, as in cases of increases in underlying interest rates, should the firm fund itself with leverage. Interest rate risks are part of general macro-economic risks, as it is most likely driven by instability and perceived risk in the overall financial system. This risk is best handled through the balanced use of multiple sources of funding. A typical example of this risk is the ongoing global economic crisis, caused by capital shortage and liquidity squeeze in large mortgage lenders and financial institutions in the U.S. and Europe. As a result of the crisis, the required interest rate premium were re-evaluated and consequently dramatically increased globally. The effect of the crisis on Balkans is very tangible and has hampered access to leverage.
Increases in general interest rate levels, ceteris paribus, would impact the cost of leverage used by the company in its business development efforts. In parallel, such changes could adversely impact the expenses of the Firm, as a large portion of the Firm's financial liabilities are interest bearing and have a floating interest rate component.
EuroHold Bulgaria AD is а holding company and any deterioration in the operating results, financial position and growth prospects of its subsidiaries may adversely affect financial position of the Company.
The Company is involved in managing assets and other companies and thus cannot be specifically attributed to being exposed to one particular industry segment. Broadly, the Company is focused on the industry segment – (1) non-banking financial service (leasing, insurance, asset management, brokerage and financial intermediation) and (2) new car sales and services. The main risk facing EuroHold is the possibility of decreasing revenue across business segments. This could possibly impact the dividends received. Correspondingly, this could have a negative effect on consolidated revenue growth and respectively return on equity.
The largest business risk comes from the largest business segment of the Company – namely the general insurance operations, as the subsidiaries operating in Bulgaria, Romania and Macedonia bring a very significant portion of the Firm's overall revenues.
The activities of all subsidiaries of the Company are adversely affected by continued increases in market prices of fuel and electricity that are subject to international supply and demand and are determined by factors far beyond the Firm's control.
The largest business risk comes from the largest business segment of the Company – namely the general insurance operations, as the subsidiaries operating in Bulgaria, Romania and Macedonia bring a very significant portion of the Firm's overall revenues.
The major risks in the leasing business stem from the needs of the regional leasing subsidiaries to raise sufficient leverage at favorable interest rates, which in turn leaves them room to grow and provides proper interest margins that drive profitability. The leading leasing subsidiary is EuroLease Auto which is the Bulgarian operating company. As such it has issued several tranches of public bonds traded on the Bulgarian Stock Exchange (BSE) and thus has publicly disclosed a lot of information, including certain risk considerations.
Eurohold's Brokerage and Asset management arm is Euro-Finance AD. The risks associated with financial intermediation, brokerage and asset management relate to the overall general financial markets condition and the inherent volatility, along with the investment awareness and activeness of the general audience.
The car-sales segment which is present only in Bulgaria and is hosted under the umbrella of Avto Union AD is active in new car sales and also provides after-sales services to customers. Along with that, it provides rent-a-car services under short and long-term operating lease contracts. The ability to sell certain brands is a result of having a valid license issued by the OEMs to market and sell a given brand on the local market. Should such licenses and agreement be revoked, the impact on sales and the financial position of the company could be materially negative. This is particularly important, given the ongoing global restructuring and repositioning of car brands and manufacturers. The business environment in the automotive industry could be dramatically impacted by purely internal drivers related to general purchasing power, access to lease-financing, general business sentiment, inventory levels, etc.
Deterioration in the performance of one or more subsidiaries could lead to a deterioration of the results on a consolidated basis. This in turn, is related to the price of the Company's shares as equity markets reflect the business potential and total net assets of the Group as a whole.
Future earnings and market value of the company depend on the strategy chosen by the senior management team of the company and its subsidiaries. Choosing the wrong strategy could lead to significant losses.
Eurohold seeks to manage the risk of strategic errors by continuous monitoring of various stages in the implementation of its marketing strategy and financial performance. It is absolutely crucial to be able to respond quickly if a sudden change is needed at some stage in the strategic development plan. Untimely or inappropriate changes in strategy may also have a significant negative impact on the Company's operating results and financial position.
The following risks are related to the management of the company:
Financial risk is the additional level of risk and uncertainty. This level of financial uncertainty adds an extra layer of risk business. When a part of the capital which a company uses to finance its development is borrowed, the company has taken on predictable and/or fixed financial obligations for periodic payments.
The larger the proportion of long-term indebtedness to equity, the greater will be the probability of default in the payment of future financial obligations. An increase in this proportion (leverage ratio) implies an increase in overall financial risk. Another group of indicators are related to the flow of revenues through which the payment of the company's obligations is possible. Another indicators is the so called debt-service coverage ratio, which is an indication of the free cash flow before interest and taxes, which in turn can be used to repay and service the currently due interest components of debt. This ratio is a good indicator of a firm's ability to service its financial liabilities.
Acceptable or "normal" level of financial risk is generally highly dependent on the business risk. In a low business risk environment, investors should generally be willing to take higher levels of financial risk.
EuroHold operates in several Balkan countries (Bulgaria, Romania, Macedonia and Serbia), as the national currency of each of the countries, except Bulgaria, is a freely convertible currency, whose value relative to other currencies is determined by free markets forces. In Bulgaria, since 1996 the local currency has been pegged to the EURO. Abrupt change in macro-framework of any of the countries, where the Company actively pursues business opportunities, may have a negative effect on its consolidated results. Ultimately, however, EuroHold reports consolidated Financial Results in Bulgaria in Bulgarian leva (BGN), which in turn is pegged to the Euro, which also changes its value against other global currencies, but is significantly less exposed to dramatic price fluctuations.
Liquidity risk is linked to the ability of the Company to service its maturing financial liabilities fully and on time. Low financial indebtedness and capitalization alone do not guarantee uninterrupted debt servicing capacity. Liquidity risks can also arise from a substantial delay in customer payment of amounts due.
EuroHold aims to manage this risk through an optimal allocation of internal resources on a consolidated basis. The Group seeks adequate liquidity levels in order to meet liabilities coming due, both under normal and unexpected market conditions, in a way that minimizes bearing of extra costs or losses, and that takes away reputation risk from nonpayment of obligations due.
All subsidiaries exercise proper financial planning and forecasting, taking into account amounts due within the next 90 days, including servicing of financial liabilities. This format of detailed planning minimizes or even completely eliminates the effects of unexpected events happening.
Company's senior management endorses use of financial leverage by the subsidiaries to the extent it is used for new business development or as working capital facilities. The level of such borrowed money is strictly controlled and is kept within pre-approved limits, after careful consideration of the needs of the specific business segment and the economic effect of such leverage. The general policy of EuroHold is to raise capital in the form of debt and equity financing on a centralized basis and then distribute it to the respective subsidiaries either in form of equity or debt.
The relations with the related parties arise from contract for temporary financial aid to the subsidiary companies and regarding transactions related to the normal business activity of the subsidiary companies.
The risk from the possible transactions between the companies in the Group under terms that are different from the market terms is a risk from achieving low profitability from the provided inter-group financing. Another risk which can be taken in inter-group transactions is failing to realize enough revenues and therefore good profit for the relevant company. On a consolidated level this can reflect negatively on the profitability of the whole group.
Transactions between the parent company and the subsidiary companies are constantly done inside the Holding which arise from their normal activity. All transactions with related parties are conducted under terms that are no different from the normal market prices, complying with IAS 24.
Eurohold Bulgaria AD operates through its subsidiary companies which means that its financial results are directly dependant on the financial results, the developments and the perspectives of the subsidiary companies. One of the main objectives of Eurohold Bulgaria AD is to realize significant synergies between its subsidiary companies due to the integration of the three business lines – insurance, leasing and car sales. Bad results of one or several subsidiary companies could lead to worsening of the consolidated financial results. This is related to the Issuer's share price which can change as a result of the expectations of the investors about the perspectives of the company.
The elements through which the Group manages risks, are directly related to specific procedures for prevention and solving any problems in the operations of EuroHold in due time. These include current analysis in the following directions:
Upon occurrence of unexpected events, the incorrect evaluation of current market tendencies, as well as many other micro- and macroeconomic factors could impact the judgment of management. The single way to overcome this risk is work with experienced professionals, maintain and update of fully comprehensive database on development and trends in all markets of operation.
The Group has implemented an integrated risk management system based on the Enterprise Risk Management model. The risk management process covers all the Group's organizational levels and is aimed at identifying, analyzing and limiting risks in all areas of the Group's operations. In particular, the Group minimizes insurance risk through proper selection and active monitoring of the insurance portfolio, matching the duration of asset and liabilities as well as minimizing F/X exposure. An effective risk management system allows the Group to maintain stability and a strong financial position despite the ongoing crisis on the global financial markets.
Risk management in the Group aims to:
Date: 27 October 2017
Asen Minchev,
Executive Member of the Management Board
Statement of profit or lost and other comprehensive income For the period ended September 30, 2017
| 30.9.2017 | 30.9.2016 | ||
|---|---|---|---|
| Notes | BGN '000 | BGN '000 | |
| Revenue from operating activities | |||
| Dividend income | 3 | 265 | 245 |
| Gains from financial activities | 4 | 527 | 15 455 |
| Interest income | 5 | 2 140 | 530 |
| 2 932 | 16 230 | ||
| Expenses on operating activities | |||
| Interest expenses | 6 | (12 906) | (7 030) |
| Losses on financial activities | 7 | (1 376) | (954) |
| Salaries and related expenses | (268) | (237) | |
| Depreciation | (6) | (6) | |
| Hired services and other expenses | 8 | (1 066) | (1 005) |
| (15 622) | (9 232) | ||
| Profit/(Loss) from operating activities | (12 690) | 6 998 | |
| Other revenue/expenses | 9 | 161 | 220 |
| Profit/(Loss) before tax | (12 529) | 7 218 | |
| Tax expenses | - | - | |
| Profit/(Loss) after tax | (12 529) | 7 218 | |
| Other comprehensive income | |||
| Other comprehensive income not to be reclassified to profit or loss in subsequent periods: |
|||
| Revaluation of investments in subsidiaries | - | - | |
| Total comprehensive income for the period | (12 529) | 7 218 |
Prepared by: Signed on behalf of BoD: Procurator:
/I. Hristov/ /А. Minchev/ /H.Stoev/
25.10.2017
| 30.9.2017 | 31.12.2016 | ||
|---|---|---|---|
| ASSETS | Notes | BGN '000 | BGN '000 |
| Non-current assets | |||
| Machinery and equipment | 10 | 17 | 21 |
| Receivables from related parties | 11 | 5 149 | 29 427 |
| Trade and other receivables | 12 | 9 851 | 9 779 |
| 15 017 | 39 227 | ||
| Investments | |||
| Investments in subsidiaries, associated and other | |||
| companies | 13 | 519 693 | 485 693 |
| Currents assets | |||
| Trade receivables | 14 | 79 | 33 |
| Receivables from related parties | 15 | 1 570 | 537 |
| Other currents receivables | 16 | 2 533 | 9 137 |
| Cash and cash equivalents | 17 | 98 | 281 |
| 4 280 | 9 988 | ||
| TOTAL ASSETS | 538 990 | 534 908 |
| 30.9.2017 | 31.12.2016 | ||
|---|---|---|---|
| EQUITY AND LIABILITIES | Notes | BGN '000 | BGN '000 |
| Equity | |||
| Share capital | 18 | 161 345 | 127 345 |
| Share premium | 38 714 | 38 714 | |
| General reserves | 7 641 | 7 641 | |
| Retained earnings | 100 605 | 99 909 | |
| Profit for the period | (12 529) | 2 309 | |
| Total equity | 295 776 | 275 918 | |
| Subordinated debts | 19 | 14 209 | 53 695 |
| Total equity and subordinated debts | 309 985 | 329 613 | |
| Non-current liabilities | |||
| Borrowings | 20 | 24 643 | 24 643 |
| Bond liabilities | 21 | 112 372 | 111 863 |
| Related parties liabilities | 22 | 10 548 | 3 878 |
| Other non-current liabilities | 23 | 66 | 1 907 |
| 147 629 | 142 291 | ||
| Current liabilities | |||
| Borrowings | 24 | 71 438 | 44 965 |
| Trade payables | 25 | 177 | 373 |
| Related parties liabilities | 26 | 390 | 16 262 |
| Other current liabilities | 27 | 9 371 | 1 404 |
| 81 376 | 63 004 | ||
| Total liabilities | 229 005 | 205 295 | |
| TOTAL EQUITY AND LIABILITIES | 538 990 | 534 908 |
Prepared by: Signed on behalf of BoD: Procurator:
/I. Hristov/ /А. Minchev/ /H.Stoev/
25.10.2017
These financial statements have been approved from the Board of Directors of Eurohold Bulgaria AD. The accompaning notes to the interim financial statements form an integral part of these statements. 3
| 30.9.2017 | 30.9.2016 | |||
|---|---|---|---|---|
| Notes | BGN '000 | BGN '000 | ||
| Profit/(Loss) before tax | CASH FLOWS FROM OPERATING ACTIVITIES | (12 529) | 7 218 | |
| Adjusted for: | ||||
| Depreciation | 6 | 6 | ||
| Interest income | 5 | (2 140) | (530) | |
| Interest expenses | 6 | 12 906 | 7 030 | |
| Dividend income | 3 | (265) | (245) | |
| Gains from sale of investments | 308 | (14 535) | ||
| Adjustments in working capital: | ||||
| Change in trade and other receivables | 5 525 | (15 937) | ||
| Change in trade and other payables | (6 798) | 15 908 | ||
| Net cash flows from operating activities | (2 987) | (1 085) | ||
| CASH FLOWS FROM INVESTING ACTIVITIES | ||||
| Payments for investments | (34 000) | (62 940) | ||
| Receipts from the sale of investments | - | 15 208 | ||
| Dividends received | 265 | 245 | ||
| Other cash receipts/ payments from investing activities | (85) | (851) | ||
| Net cash used by investing activities | (33 820) | (48 338) | ||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||
| Proceeds from issue of new shares | 34 000 | - | ||
| Proceeds from loans | 229 333 | 69 859 | ||
| Repayments of loans | (222 460) | (16 033) | ||
| Interest and commissions paid, net | (4 249) | (4 070) | ||
| Dividends paid | - | (326) | ||
| Other cash receipts/ payments from financing activities | - | - | ||
| Net cash generated/(used) by financing activities | 36 624 | 49 430 | ||
| Net increase/(decrease) in cash and cash | ||||
| equivalents | (183) | 7 | ||
| Cash and cash equivalents at the beginning of the period | 17 | 281 | 112 | |
| Cash and cash equivalents at the end of the period | 17 | 98 | 119 | |
| Prepared by: | Signed on behalf of BoD: | Procurator: | ||
| /I. Hristov/ | /А. Minchev/ | /H.Stoev/ |
25.10.2017
These financial statements have been approved from the Board of Directors of Eurohold Bulgaria AD. The accompaning notes to the interim financial statements form an integral part of these statements. 4
| Share capital |
General reserves |
Share premium |
Retained earnings |
Total Equity |
|
|---|---|---|---|---|---|
| BGN '000 | BGN '000 | BGN '000 | BGN '000 | BGN '000 | |
| Balance as at 1 January 2016 | 127 345 | 7 641 | 38 714 | 100 275 | 273 975 |
| Profit for the period | - | - | - | 2 309 | 2 309 |
| Dividends | - | - | - | (366) | (366) |
| Other comprehensive income for the period |
- | - | - | - | - |
| Balance as at 31 December 2016 | 127 345 | 7 641 | 38 714 | 102 218 | 275 918 |
| Balance as at 1 January 2017 | 127 345 | 7 641 | 38 714 | 102 218 | 275 918 |
| Share capital increase | 34 000 | - | - | - | 34 000 |
| Profit for the period | - | - | - | (12 529) | (12 529) |
| Dividends | - | - | - | (1 613) | (1 613) |
| Other comprehensive income for the period |
- | - | - | - | - |
| Balance as at 30 September 2017 | 161 345 | 7 641 | 38 714 | 88 076 | 295 776 |
Prepared by: Signed on behalf of BoD: Procurator:
/I. Hristov/ /А. Minchev/ /H.Stoev/
25.10.2017
Founded in 1996, Eurohold Bulgaria AD operates in Bulgaria, Romania and Macedonia. The company is owner of a large number of subsidiaries within the sectors of insurance, financial services and car sales.
Eurohold Bulgaria AD is a public joint stock company established pursuant to the provisions of article 122 of the Law for Public Offering of Securities and article 261 of the Commerce Act.
The company is registered in the Sofia City Court under corporate file 14436/2006 and is formed through the merger of Eurohold AD registered under corporate file № 13770/1996 as per the registry of Sofia City Court, and Starcom Holding AD, registered under corporate file № 6333/1995 as per the registry of Sofia City Court.
Eurohold Bulgaria has its seat and registered address in the city of Sofia, Iskar Region, 43 Hristofor Kolumb Blvd., EIK 175187337.
The governing bodies of the company are: the general meeting of shareholders, the supervisory board /two-tier system/ and the management board.
The scope of activities of Eurohold Bulgaria AD is: acquisition, management, assessment and sales of participations in Bulgarian and foreign companies, acquisition, management and sales of bonds, acquisition, assessment and sales of patents, granting patent use licenses to companies in which the company participates, funding companies, in which the company participates.
The financial statements of Eurohold Bulgaria AD are prepared in compliance with the Accounting Act and all International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), interpretations of the Standing Interpretation Committee (SIC), interpretations of the IFRS interpretation committee (IFRIC), which are effectively in force since 01 January 2009 and are adopted by the Commission of the European Union.
The company has considered all standards and interpretations applicable to its activity as at the date of preparation of the present financial statement.
The financial statements are drafted in compliance with the historic cost principle, excluding those financial instruments and financial liabilities, which are measured at fair value. The financial statements are prepared in compliance with the principle of the going concern, which assumes that the company will continue its operations in the near future.
Eurohold Bulgaria AD presents comparative information for a single previous period.
The Bulgarian Lev (BGN) is the functional and reporting currency of the group. Data presented in the statement and the attachments thereto are in thousand BGN (000'BGN). Since 1 January 1999, the Bulgarian Lev is pegged to the EURO at the exchange rate: BGN 1, 95583 for EUR 1.
Cash, receivables and payables denominated in foreign currency are reported in the BGN equivalent on the basis of the exchange rate as at the date of the operation and are revaluated on annual basis using the official exchange rate of the Bulgarian National Bank on the last working day of the year.
Upon preparing the financial statement in compliance with IAS, the management is required to apply approximate estimates and assumptions, which affect the reported assets and liabilities, and the disclosure of the contingent assets and liabilities as at the date of the balance sheet. Despite the estimates are based on the management's knowledge of current developments, the actual results may vary from the estimates used.
The Company's income is recognized on the accrual basis and to the extent economic benefits are obtained by the Company and as far as the incomes may be reliably measured.
Upon sales of goods incomes are recognized when all material risks and benefits from the title of goods are transferred to the buyer.
Upon provision of services, incomes are recognized considering the stage of completion of the transaction as at the date of the balance sheet, if such stage may be reliably measured, as well as the costs incurred for the transaction.
Dividend incomes are recognized upon certifying the right to obtain them.
Eurohold Bulgaria AD generates financial income mainly from the following activities:
Income from dividends
Income from loan interest granted to subsidiaries
Expenses are recognized at the time of occurrence thereof and on the accrual and comparability basis.
Administrative expenses are recognized as expenses incurred during the year, and are relevant to the management and administration of the company, including expenses that relate to the administrative staff, officers, office expenses, and other outsourcing.
Financial expenses include: expenses incurred in relation to investment operations, negative differences from financial instruments operations and currency operations, expenses on interest under granted bank loans and obligatory issues, as well as commissions.
Deferred expenses (prepaid expenses) are carried forward for recognition as current expenses for the period in which the contracts they pertain to are performed.
Other operating income and expenses include items of secondary character in relation to the main activity of the Company.
Interest income and expenses are recognized in the Statement of profit or lost and other comprehensive income using the effective interest rate method. The effective interest rate is the rate for discounting the expected cash payments and proceeds during the term of the financial asset or liability up to the net book value of the respective asset or liability. The effective interest rate is calculated upon the initial recognition of the financial asset or liability and is not adjusted subsequently.
The calculation of the effective interest rate includes all received or paid commissions, transaction costs, as well s discounts or premiums, which are an integral part of the effective interest rate. Transaction costs are the inherent costs directly attributable to the financial asset or liability acquisition, issue or derecognition.
The interest income and expenses stated in the Statement of profit or lost and other comprehensive income include interest recognized on the basis of effective interest rate under financial assets and liabilities carried at amortized value.
Fees and commissions costs, which are an integral part of the effective interest rate for a financial asset or liability, are included in the calculation of the effective interest rate.
Other fees and commissions incomes, including logistic services fees, insurance and other intermediation fees, are recognized upon providing the respective services.
The other fees and commissions costs relevant mainly to banking services are recognized upon receipt of the respective services.
As a holding company with a main activity of acquisition and management of subsidiaries, Eurohold Bulgaria AD performs mainly financial activities.
The companies within the issuer's portfolio operate on the following markets: insurance, leasing, finance and automobile.
Business combinations are reported by using the purchase method. This method requires the
assignee to recognize, on the date of acquisition, the acquired differentiated assets, undertaken liabilities and participation, which is not controlling the acquired entity, separately from the goodwill. Any costs directly pertaining to the acquisition are reported in the statement of profit or loss and other comprehensive income for the period. Differentiated acquired assets and undertaken liabilities and contingent obligations within a business combination are measured at fair value on the date of acquisition, regardless of the extent of noncontrolled participation.
The company is able to measure participations, which are not controlling for the acquired entity, either at fair value, or as proportional share in the differentiated net assets of the acquired entity.The acquisition cost in excess of the share of assignee in the net fair value of differentiated assets, liabilities and contingent obligations of acquisitions, is reported as goodwill. In case the acquisition cost is less than the investor share in the fair values of the company's net assets, the difference is recognized directly in the statement of profit or lost and other comprehensive income.
The current tax includes the tax amount, which should be paid over the expected taxable profit for the period on the basis of the effective tax rate or the tax rate applicable on the day of preparation of the balance sheet and all adjustments of due tax for previous years.
The company calculates the income tax in compliance with the applicable legislation.
The income tax is calculated on the basis of taxable profit after adjustments of the financial result in accordance with the Corporate Income Tax Act.
Current income taxes are defined in compliance with the Bulgarian tax legislation – the Corporate Income Taxation Act. The nominal tax rate for 2016 is 10% of the taxable profit.
Deferred tax is calculated using the balance sheet method for all temporary differences between the net book value as per the financial statements and the amounts used for taxation purposes.
The deferred tax is calculated on the basis of the tax rate that is expected to be effective upon the realization of the asset or the settlement of the liability.
The effect from changes in the tax rates on the deferred tax is reported in the income statement, except in cases when it concerns amounts, which are earlier accrued or reported directly in equity.
Based on IAS 12, Income Taxes, the Company recognizes only the portion of a current tax asset or liability from the acquisition or sale of financial instruments for which the Company expects to realize a reverse benefit in the foreseeable future, or does not control the timing of the reverse benefit. The Company's policy applies equally to each class of financial instruments.
Eurohold Bulgaria AD has a VAT registration and charges 20% tax upon delivery of services.
Pursuant to the Corporate Income Tax Act, payment of incomes to foreign individuals or legal entities is subject to withholding tax within the territory of the Republic of Bulgaria.
Withholding tax is not due provided the foreign legal entity has proved grounds for application of the Agreements for Avoidance of Double Taxation before tax rate or applicable tax rate on the day of expiration of the tax payment term.
Fixed tangible assets are measured at acquisition cost, less the amount of accrued amortization and possible impairment losses.
The company has fixed the 2017 value capitalization threshold to BGN 700, under which acquired assets, regardless if they have the
characteristics of fixed assets, are reported as current expenses at the time of acquisition thereof.
Fixed tangible assets are initially measured:
at acquisition cost, which includes: purchase price (including duties and nonrefundable taxes), all direct costs for bringing the asset into working condition according to its purpose – for assets acquired from external sources;
at fair value: for assets obtained as a result of a charitable transaction;
at evaluation: approved by the court and all direct costs for bringing the asset into working condition according to its purpose – for assets acquired as a contribution of physical assets.
Borrowing costs directly related to acquisition, construction or production of eligible assets are included in the acquisition cost (cost) of this asset. All other borrowing costs are reported on current basis in the profit or loss for the period.
Further costs for repairs and maintenance are accounted in statement of financial position when the same criteria as at initial recognition are in place.
Upon sales of fixed assets, the difference between the net book value and the sales price of the asset is reported as profit or loss in the statement of profit or lost and other comprehensive income, in "Other Incomes" item.
Fixed tangible assets are derecognized from the balance sheet upon sale or when the asset is finally decommissioned and no further economic benefits are expected after derecognition.
The company applies the straight-line method of depreciation/amortization. Depreciation/Amortization of assets begins from the month following the month of acquisition thereof. Land and assets in process of construction are not depreciated.
The useful life by groups of assets depends on: the usual wear and tear, equipment specificity, future
intentions for use and the probable moral aging.
The estimated useful lives by groups of assets are as follows:
| Buildings | 25 years |
|---|---|
| Machinery and equipment | 3–10 years |
| Vehicles | 4–6 years |
| Fixtures and fittings | 3–8 years |
| Computers | 2–3 years |
Net book values of fixed tangible assets are subject to review for impairment, when events or changes in circumstances have occurred, which evidence that the net book value might permanently differ from their recoverable amount. If there are indicators that the estimated recoverable value is less than their net book value, the latter is adjusted up to the recoverable value of assets.
Impairment losses are recognized as expense in the statement of profit or lost and other comprehensive income during the year of occurrence thereof.
Intangible assets are presented in the financial statement at cost, less the accumulated amortization and possible impairment losses.
The Company applies the straight-line method of amortization of intangible assets at expected useful lives of 5-7 years.
Net book value of intangible assets is subject to review for impairment, when events or changes in circumstances have occurred, which evidence that their net book value might exceed their recoverable value.
Investment property is property held either to earn rental income or for capital appreciation or for both, but not for sale in the ordinary course of business, or use in supply of services or for administrative purposes.
Investment property is measured at fair value.
After initial recognition, goodwill is accounted at acquisition cost, less accumulated impairment losses.
Goodwill is reviewed for impairment on annual basis. The impairment loss of goodwill is not subject to recovery in future periods.
The Company recognizes the undiscounted amount of estimated costs relevant to annual leaves that are expected to be paid against the employees' service for the ended period as a liability.
Investments in subsidiaries are measured at costs in the separate statement of the parent-company.
The companies in which the company holds between 20% and 50% of the voting rights and may significantly affect, but not perform control functions, are considered associated companies.
Investments in associated companies are reported by using the equity method. By using the equity method, the investment in the associated company is carried in the statement of financial position at acquisition cost, plus the changes in the share in the net assets of the associated entity after the acquisition. The goodwill related to the associated entity is included in the net book value of the investment and is not amortized.
The remuneration that the acquirer transfers to the acquiree in exchange for a company includes any asset or liability arising from the arrangement under consideration. The acquirer shall recognize the fair value of the contingent consideration at the acquisition date as part of the consideration transferred to the acquiree in exchange for the company.
The acquirer shall classify an obligation to pay the remuneration condition as a liability or as own equity on the basis of the definitions of an equity instrument and financial liability in paragraph 11 of IAS 32, Financial Instruments: presentation and other applicable IFRS regulations.
The acquirer shall classify as an asset the right to return the previously transferred consideration, if specified conditions are met. Paragraph 58 provides guidance on subsequent accounting for conditional remuneration.
Financial assets within the scope of IAS 39 are classified as financial assets at fair value in the profit or loss, loans and receivables, held-tomaturity investments, available-for-sale financial assets or derivatives defined as hedging instruments in effective hedge, where appropriate.
The company classifies its financial instruments at their initial recognition.
Financial assets include cash and short-term deposits, trade and other receivables, financial instruments and financial instrument derivatives quoted and unquoted on the stock exchange.
Financial assets at fair value in profit or loss include financial assets held for trading and those designated at fair value at inception. Financial assets, which are usually acquired for the purposes of selling in the near term, are classified as held for trading.
Investments held-to-maturity are financial assets, which are non-derivative and have fixed or determinable payments and fixed maturity, that the company has the positive intention and ability to hold to maturity. Initially, these investments are recognized at acquisition cost, which includes the amount of consideration paid for acquisition of the investment. All transaction costs directly related to the acquisition are also included in the acquisition cost.
After the initial measurement, held-to-maturity investments are carried at amortized cost by using the method of the effective interest rate.
Gains and losses from held-to-maturity investments are recognized in the statement of profit or lost and other comprehensive income when the investment is derecognized or impaired.
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market.
Such financial assets are initially recognized at acquisition cost, which is the fair value paid for acquisition of financial assets. All directly attributable acquisition transaction costs are also included in the acquisition cost. Subsequent to initial recognition, loans and receivables are measured at amortized cost using the effective interest rate method. Gains and losses from loans and receivables are recognized in the statement of profit or lost and other comprehensive income when derecognized or impaired.
Financial assets available for sale are nonderivative financial assets that are so classified and are not classified in any of the three categories listed above. Initially, these investments are presented at fair value. Subsequent to initial recognition, financial assets available for sale are measured at fair value. Unrealized gains and losses from fair value are carried in separate item of the other comprehensive income until the financial assets are not derecognized or are not defined as impaired. Upon derecognition or impairment, cumulative gains and losses previously recognized in equity, are recognized in the statement of profit or lost and other comprehensive income.
Derivative financial instruments are classified as held-for-trading, unless they are effective hedging instruments. All derivatives are carried as assets, when their fair values are positive and as liabilities when the fair values are negative.
Materials and goods are measured at delivery cost. Their value includes the sum of all purchase expenses, as well as other expenses incurred in relation to the delivery thereof to their current location and condition.
Receivables are measured at amortized cost, which usually corresponds to the nominal value. Impairment is estimated for the purposes of meeting the expected loss on the basis of separate measurement of individual arrangements.
Liability provisions include expected costs related to obligations under guarantees, restructuring, etc., as well as deferred tax assets.
Current tax liabilities and current tax receivables are recognized in the statement of financial position as tax calculated on taxable income for the year adjusted for the tax on taxable income for previous years and paid taxes.
Equity is presented at its nominal value pursuant to the court decisions for its registration.
Financial liabilities are recognized during the loan period with the amount of gained proceeds, principal, less the transaction expenses.
During subsequent periods financial liabilities are measured at amortized cost, equal to the capitalized value, when applying the effective interest rate method. In the statement of profit or lost and other comprehensive income, loan expenses are recognized during the loan term period.
Current liabilities, such as payables to suppliers, group and associated companies and other payables, are measured at amortized cost, which is usually equal to the nominal value.
In the implementation of its activity, the Company is exposed to diverse financial risks: market risk (including currency risk, risk from change of financial instruments fair value under the impact of market interest rates and price risk), credit risk, liquidity risk and risk from change of future cash flows due to a change in market interest rates. The overall risk management program emphasizes the unpredictability of financial markets and is aimed at mitigating the possible adverse effects on the Company's financial result.
The Company is exposed to currency risk through payments in foreign currency and through its assets and liabilities, which are denominated in foreign currency.
As a result of foreign currency exposures, gains and losses occur, which are carried in the statement of profit or lost and other comprehensive income. These exposures include the cash assets of the Company, which are not denominated in the currency used in the local companies' financial statements.
Eurohold Bulgaria AD has no investments in other countries, except in the countries in which it operates – Bulgaria, Romania, Macedonia, and the Netherlands. In case the local currency is exposed to currency risk, it is managed through investments in assets denominated in Euro.
The company is exposed to interest risk in relation to the used bank and trade loans as part of the loans obtained have floating interest rate agreed as basis interest (EURIBOR/LIBOR) increased with the respective allowance. In 2010, the floating interest rate loans are denominated in euro.
The interest rates are specified in the respective appendixes.
Credit risk is mainly related to trade and financial receivables. The amounts stated in the statement of financial position are on net basis, excluding the provisions for doubtful receivables determined as such by the management on the basis of previous experience and current economic conditions.
Liquidity risk is the risk that the company may encounter difficulties in servicing its financial obligations when they become payable. Policy in this field is aimed at ensuring that there will be enough cash available to service its maturing obligations, including in exceptional and unforeseen conditions. The management's objective is to maintain continuous balance between continuity and flexibility of financial resources by using adequate forms of funding.
The company's management is responsible for managing the liquidity risk and involves maintaining enough cash available, arranging adequate credit lines, preparation of analysis and update of cash flows estimates.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:
In the principal market for the asset or liability,
or
In the absence of a principal market, in the most advantageous market for the asset or liability.
The principal or the most advantageous market must be accessible to the Company.
A fair value measurement of a non-financial asset takes into account a market participant's ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.
The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:
External valuers are involved for valuation of significant assets, such as investments in subsidiaries.
The statement of cash flows shows the cash flows for the year in relation to operating, investment and financial activity during the year, the change in cash and cash equivalents for the year, cash and cash equivalents at the beginning and at the end of the year.
The operating cash flows are calculated as result for the year adjusted with the non-cash operating positions, changes in net turnover capital and corporate tax.
Investment activity cash flows include payments in relation to purchase and sale of fixed assets and cash flows related to the purchase and sale of entities and operations. Purchase and sale of other securities which are not cash and cash equivalents are also included in the investment activity.
Financial activity cash flows include changes in the amount or composition of share capital and the related costs, the borrowings and the repayment of interest bearing loans, purchase, and sale of own shares and payment of dividends.
Cash and cash equivalents include bank overdraft, liquidity cash and securities for term less than three months.
| 3. Dividend income | 30.9.2017 | 30.9.2016 |
|---|---|---|
| BGN'000 | BGN'000 | |
| Euro-Finance AD | 265 | 245 |
| 265 | 245 | |
| 4. Gains from financial activities | ||
| 30.9.2017 | 30.9.2016 | |
| BGN'000 | BGN'000 | |
| Gains from sale of investments | 507 | 15 455 |
| Foreign exchange gains | 20 | - |
| 527 | 15 455 | |
| 5. Interest income | ||
| 30.9.2017 | 30.9.2016 | |
| BGN'000 | BGN'000 | |
| Interest income – from related party loans | 1 463 | 9 |
| Interest income – from subordinated term loan | 156 | 521 |
| Interest income – from third party loans | 521 | - |
| 2 140 | 530 | |
| 5.1 Interest income on loans granted to subsidiaries | ||
| 30.9.2017 | 30.9.2016 | |
| хил. лв. | хил. лв. | |
| Avto Union AD | 566 | 9 |
| Euroins Insurance Group AD | 897 | - |
| 1 463 | 9 |
| 12 906 | 7 030 | |
|---|---|---|
| Interest expense – from third party loans | 2 203 | 2 040 |
| Interest expense – from related party loans | 141 | 408 |
| Interest expense – bonds | 7 536 | - |
| Interest expense – bank loans and non-bank financial institutions | 4 357 | 4 582 |
| BGN'000 | BGN'000 | |
| 30.9.2017 | 30.9.2016 |
| 30.9.2017 | 30.9.2016 | |
|---|---|---|
| BGN'000 | BGN'000 | |
| Euroins Insurance Group AD | - | 85 |
| Avto Union AD | - | 6 |
| Avto Union Service EOOD | - | 41 |
| Eurolease Group EAD | 1 | 1 |
| Eurolease Auto EAD | 140 | 275 |
| 141 | 408 |
| 1 376 | 954 | |
|---|---|---|
| Other financial expenses | 561 | 34 |
| Losses on sale of investments | 815 | 920 |
| BGN'000 | BGN'000 | |
| 30.9.2017 | 30.9.2016 |
| 30.9.2017 | 30.9.2016 | |
|---|---|---|
| BGN'000 | BGN'000 | |
| Hired services expenses | 982 | 937 |
| Other expenses | 84 | 68 |
| 1 066 | 1 005 |
| 30.9.2017 | 30.9.2016 | |
|---|---|---|
| BGN'000 | BGN'000 | |
| Revenue/expenses from revaluation | - | - |
| Other revenue | 161 | 220 |
| 161 | 220 |
| Fixtures and | |||
|---|---|---|---|
| Vehicles | fittings | Total | |
| BGN'000 | BGN'000 | BGN'000 | |
| Cost: | |||
| At 1 January 2016 | 16 | 60 | 76 |
| Additions | 20 | 3 | 23 |
| Disposals | (16) | - | (16) |
| At 31 December 2016 | 20 | 63 | 83 |
| Additions | - | 2 | 2 |
| Disposals | - | - | - |
| At 30 September 2017 | 20 | 65 | 85 |
| Depreciation: | |||
| At 1 January 2016 | 14 | 56 | 70 |
| Accrued depreciation | 4 | 4 | 8 |
| Written-off | (16) | - | (16) |
| At 31 December 2016 | 2 | 60 | 62 |
| Accrued depreciation | 3 | 3 | 6 |
| Written-off | - | - | - |
| At 30 September 2017 | 5 | 63 | 68 |
| Carrying value: | |||
| At 1 January 2016 | 2 | 4 | 6 |
| At 31 December 2016 | 18 | 3 | 21 |
| At 30 September 2017 | 15 | 2 | 17 |
| 30.9.2017 | 31.12.2016 | |
|---|---|---|
| Loan principal | BGN'000 | BGN'000 |
| Euroins Insurance Group AD – subordinated term loan | - | 19 500 |
| Euroins Insurance Group AD | - | 1 171 |
| Avto Union AD | 5 149 | 8 756 |
| 5 149 | 29 427 |
| 9 851 | 9 779 | |
|---|---|---|
| Trade and other receivables | - | - |
| Loans granted | 9 851 | 9 779 |
| BGN'000 | BGN'000 | |
| 30.9.2017 | 31.12.2016 |
| 485 520 | 34 000 | - | 519 520 | |||
|---|---|---|---|---|---|---|
| Eurolease Group EAD | 27 368 | - | - | 27 368 | 27 241 | 100.00% |
| Euro-Finance AD | 18 145 | 6 500 | - | 24 645 | 20 600 | 99.99% |
| Avto Union AD | 66 775 | - | - | 66 775 | 40 004 | 99.99% |
| Euroins Insurance Group AD | 373 232 | 27 500 | - | 400 732 | 441 483 | 89.36% |
| BGN'000 | BGN'000 | BGN'000 | BGN'000 | BGN'000 | BGN'000 | |
| Value as at 1.1.2017 |
Increase | Decrease | Value as at 30.9.2017 |
Share capital of the subsidiary |
% control in the subsidiary |
| Value as at 1.1.2017 |
Increase | Decrease | Value as at 30.9.2017 |
|
|---|---|---|---|---|
| BGN'000 | BGN'000 | BGN'000 | BGN'000 | |
| Juliunica AD | 1 | - | - | 1 |
| 1 | - | - | 1 |
| Value as at 1.1.2017 |
Increase | Decrease | Value as at 30.9.2017 |
|
|---|---|---|---|---|
| BGN'000 | BGN'000 | BGN'000 | BGN'000 | |
| Greenhouse Properties AD | 162 | - | - | 162 |
| Sevko AD | 9 | - | - | 9 |
| Hebar AD | 1 | - | - | 1 |
| 172 | - | - | 172 |
| 30.9.2017 | 31.12.2016 | |
|---|---|---|
| BGN'000 | BGN'000 | |
| Trade receivables | 51 | 21 |
| Tax receivables | 28 | 12 |
| 79 | 33 |
| 1 303 | 386 | |
|---|---|---|
| Euroins Insurance Group AD | 737 | 374 |
| Bulvaria Holding EAD | 1 | 1 |
| Avto Union AD | 565 | 11 |
| 15.1 Interest receivables | BGN'000 | BGN'000 |
| 30.9.2017 | 31.12.2016 |
| 30.9.2017 | 31.12.2016 | |
|---|---|---|
| BGN'000 | BGN'000 | |
| Auto Italia EAD | 8 | 32 |
| Avto Union Service EOOD (Espas Auto EOOD) | 37 | 16 |
| Avto Union Properties EOOD | - | - |
| Bulvaria Varna EOOD | 8 | 3 |
| Daru Car AD | 32 | 55 |
| Euroins - Health Insurance AD | - | - |
| Euroins AD | 52 | 31 |
| Euroins - Romania | 125 | 10 |
| Bulvaria Holding EAD | - | - |
| Eurolease Auto EAD | 1 | - |
| Autoplaza EAD | 3 | - |
| Star Motors EOOD | 1 | 4 |
| 267 | 151 |
| 30.9.2017 | 31.12.2016 | |
|---|---|---|
| BGN'000 | BGN'000 | |
| Receivables from sale of investments | 1 | 8 |
| Interest receivables | 191 | 519 |
| Interest receivables on subordinated term loan | 293 | 118 |
| Deferred expenses | 1 810 | 391 |
| Other receivables | 238 | 8 101 |
| 2 533 | 9 137 |
| 98 | 281 | |
|---|---|---|
| Short-term deposits | 6 | 6 |
| Cash in hand | 20 | 15 |
| Cash at banks | 72 | 260 |
| BGN'000 | BGN'000 | |
| 30.9.2017 | 31.12.2016 | |
| 30.9.2017 | 31.12.2016 | |
|---|---|---|
| BGN'000 | BGN'000 | |
| Issued shares | 161 345 000 | 127 345 000 |
All ordinary shares are fully paid.
The share capital is distributed as follows:
| Share holders | % | Number of shares |
Par value |
|---|---|---|---|
| Starcom Holding AD | 53,22% | 85 875 026 | 85 875 026 |
| KJK Fund II Sicav-Sif Balkan Discovery | 13,83% | 22 309 181 | 22 309 181 |
| Other companies | 29,43% | 47 483 159 | 47 483 159 |
| Other individuals | 3,52% | 5 677 634 | 5 677 634 |
| 100.00% | 161 345 000 | 161 345 000 |
| 14 209 | 53 695 | |
|---|---|---|
| Other entities | - | 23 575 |
| Shareholders | 14 209 | 30 120 |
| BGN'000 | BGN'000 | |
| 30.9.2017 | 31.12.2016 |
| 30.9.2017 | 31.12.2016 | |
|---|---|---|
| BGN'000 | BGN'000 | |
| Accession Mezzanine | - | - |
| International Investment Bank | 24 643 | 24 643 |
| 24 643 | 24 643 |
| Bank | Type | Currency | Size contracted |
Balance as at 30.9.2017 |
Balance as at 31.12.2016 |
Interest rate |
Maturity date |
Security |
|---|---|---|---|---|---|---|---|---|
| Accession Mezzanine |
Loan - Principal |
EUR | 15,000,000 € | 4,510,000 € | 7,286,615 € | 8.70% | 12.2017 | Pledge on shares |
| Inter national Invest ment Bank |
Loan - Principal |
EUR | 15,000,000 € | 15,000,000 € | 15,000,000 € | 7,5%+3m EURIBOR |
12.2021 | Pledge on shares |
| 30.9.2017 BGN'000 |
31.12.2016 BGN'000 |
|
|---|---|---|
| EMTN Programme in EUR | 91 924 | 91 924 |
| EMTN Programme in PLN | 20 448 | 19 939 |
| 112 372 | 111 863 |
| Type | Currency | Size contracted | Balance as at 30.9.2017 |
Balance as at 31.12.2016 |
Interest rate |
Maturity date |
|---|---|---|---|---|---|---|
| EMTN Programme | EUR | 47,000,000 € | 47,000,000 € | 47,000,000 € | 8.00% | 12.2021 |
| EMTN Programme | PLN | 45,000,000 PLN | 45,000,000 PLN | 45,000,000 PLN | 8.00% | 12.2021 |
| 30.9.2017 | 31.12.2016 | |
|---|---|---|
| BGN'000 | BGN'000 | |
| Starcom Holding AD | 7 956 | 520 |
| Eurolease Auto EAD | 2 576 | 3 342 |
| Eurolease Group EAD | 16 | 16 |
| Avto Union AD | - | - |
| Bulvaria Varna EOOD | - | - |
| Avto Union Service EOOD | - | - |
| 10 548 | 3 878 |
| 66 | 1 907 | |
|---|---|---|
| Non-current loans from third parties | 66 | 1 907 |
| BGN'000 | BGN'000 | |
| 30.9.2017 | 31.12.2016 |
| 30.9.2017 | 31.12.2016 | |
|---|---|---|
| BGN'000 | BGN'000 | |
| Accession Mezzanine | 8 821 | 14 251 |
| International Investment Bank | 4 694 | 4 694 |
| Other | 57 923 | 26 020 |
| 71 438 | 44 965 |
| 177 | 373 | |
|---|---|---|
| Payables to employees and social security institutions | 40 | 46 |
| Trade payables | 137 | 327 |
| BGN'000 | BGN'000 | |
| 30.9.2017 | 31.12.2016 |
| 26.1 Interest payables | ||
|---|---|---|
| 30.9.2017 | 31.12.2016 | |
| BGN'000 | BGN'000 | |
| Starcom Holding AD | 218 | 861 |
| Avto Union AD | - | - |
| Eurolease Auto EAD | 112 | 20 |
| Euroins Insurance Group AD | - | - |
| Eurolease Group EAD | 8 | 7 |
| Bulvaria Varna EOOD | - | - |
| Avto Union Service EOOD | 20 | 20 |
| 358 | 908 |
| - | 15 330 | |
|---|---|---|
| Euroins Insurance Group AD | - | - |
| Starcom Holding AD | - | 15 330 |
| BGN'000 | BGN'000 | |
| 30.9.2017 | 31.12.2016 |
| 30.9.2017 | 31.12.2016 | |
|---|---|---|
| BGN'000 | BGN'000 | |
| Eurolease Auto EAD | 17 | 10 |
| Sofia Motors EOOD | 9 | 9 |
| Bulvaria Holding ЕAD | 6 | 5 |
| 32 | 24 |
| 30.9.2017 | 31.12.2016 | |
|---|---|---|
| BGN'000 | BGN'000 | |
| Payables for acquisition of investments | 18 | 43 |
| Interest payables | 345 | 714 |
| Interest payables on issued bonds | 6 904 | 214 |
| Tax payables | 312 | 337 |
| Dividend payables | 1 691 | 85 |
| Other liabilities | 101 | 11 |
| 9 371 | 1 404 |
No significant events after the reporting date have been identified by the Board of Directors of Eurohold Bulgaria AD, that may influence the financial statements.
Asen Minchev Hristo Stoev Executive member of the BD Procurator
Eurohold Bulgaria AD,
25.10.2017
During the accounting period 01.01.2017 - 30.09.2017, have occurred the following essential facts and circumstances in Eurohold Bulgaria AD, representing an important information that may affect the price of securities:
There was no change in the persons exercising a control over the Company. As of 30.09.2017 they were:
| Name/Address of the Company | UIC |
|---|---|
| Starcom AD, Etropole, 191 Rusky Blvd. | 121610851 |
On 30th of June 2017, the General Meeting of the Shareholders release from duty the member of the Supervisory Board – Mr. Razvan Stefan Lefter and elects Mr. Kustaa Lauri Äimä. The General Meeting of the Shareholders release from duty the member of the Supervisory Board Dar Finance EOOD and in its place elects Lyubomir Stoev. The changes were listed in a Trade register on 27th of July 2017.
On the extraordinary session of GMS of Eurohold Bulgaria AD from 30th of June 2017 was voted the following decisions - http://eurohold.bg/30-06-2017-658.html
On the extraordinary session of GMS of Eurohold Bulgaria AD from 2nd of October 2017 was voted the following decisions - http://eurohold.bg/02-10-2017-668.html
With reference to the adopted decision by the General Meeting of Shareholders of EUROHOLD BULGARIA AD, held on 30th of June, 2017, the Management Board of the Company approved the following conditions for dividend payment:
Issue identification - ISIN BG1100114062 Number of shares – 161 345 000 Nominal value per share – BGN 1.00 Total amount of dividend – BGN 1 613 450.00 Gross dividend per share – BGN 0.0100 Net dividend per share – BGN 0.0095 Commercial Bank for payment of dividend - Unicredit Bulbank AD Date, according Article 115v, para 1 of POSA – 14.07.2017 Initial date for dividend payment – 30.09.2017 Final date for dividend payment – 30.12.2017 Way of dividend payment - To shareholders whose securities accounts are located in personal accounts, the dividend will be paid through the branches of Unicredit Bulbank AD, to shareholders whose securities accounts are located in accounts with an investment intermediary, dividend will be paid by the investment firm in cooperation with the Central Depository.
After expiration of the final date for payment of the dividend 30.12.2017, all shareholders which had not received their dividends for the year 2016 will have the right to receive their dividends from the company. Unclaimed and unreceived dividends after the expiry of the five-year limitation period shall be taken in the Company's Reserve Fund.
The company's liabilities increased by BGN 23.7 million to BGN 229 million as of 30.09.2017. For the period the non-current liabilities increased by BGN 5.3 million to BGN 147.6 million comparted to BGN 142.3 million at the end of 2016. The current liabilities increased by BGN 17.319 million to BGN 80.323 million. The main growth of current liabilities was due to an increase in current liabilities on loans from financial and non-financial institutions by BGN 26.5 million and an increase of other short-term liabilities by BGN 8 million. On the other hand, the short-term liabilities to related parties decreased by BGN 15.9 million.
In February 2017 the company increased its share capital by BGN 34 million following a successful capital increase procedure.
In July 2017 BCRA – Credit Rating Agency AD rated the long-term credit rating of Eurohold Bulgaria AD: BBB-, outlook: stable, short-term credit rating: A-3.
During the reporting period there were no other important events.
Date:27.10.2017 г.
Asen Minchev, Executive Director of Eurohold Bulgaria AD
in accordance with art. 33, par. 1of Ordinance No. 2 of September 17, 2003 on the prospectuses to be published when securities are offered to the public or admitted to trading on a regulated market and on disclosure of information by the public companies and the other issuers of securities
1. Information about the changes in the accounting policy during the reported period, the reasons for carrying them out and how they affect the financial results and equity of the issuer.
No changes have been made in the accounting policy of the company during the reported period.
2. Information about changes in the economic group of the issuer, if it belongs to such a group.
No changes have been made in the economic group of the issuer.
3. Information about results of organizational changes in the issuer's structure, such as conversion, sale of companies from the same economic group, in-kind contributes from the company, property rental, long-term investments, withdrawal from business.
No organizational changes in the issuer's structure during the reported period.
4. Opinion of the Governing Body of the feasibility of published estimates of the results of the current financial year, taking into account the results of the current three months, as well as information on the factors and circumstances, which will affect the achievement of the forecasted results at least in the next three months.
No estimates of financial results of the company have been published for the first nine months of 2017.
5. Data on the persons, holding directly and indirectly at least 5 per cent of the votes in the General Meeting as of the end of the reported period, and changes in the votes, held by the persons in the end of the previous three months period.
| Shareholder | Number of shares |
% participation | |
|---|---|---|---|
| 1. | Starcom Holding AD | 85 875 026 | 53.22% |
| 2. | KJK Fund II Sicav-Sif Balkan Discovery | 22 309 181 | 13,83% |
6. Data of the shares, held by the management and supervisory bodies of the issuer at the end of the respective three months and changes, which took place since the end of the previous three months period for each person individually.
| Shareholder | Number of shares |
% participation | |
|---|---|---|---|
| 1. | Dimitar Stoyanov Dimitrov | 200 | - |
| 2. | Assen Emanuilov Assenov | 78,000 | 0.05% |
7. Information about pending judicial, administrative or arbitration proceedings concerning claims or liabilities of at least 10 per cent of the equity of the issuer; if the total amount of the debts or the obligations of the issuer in all proceedings exceeds 10 per cent of its own capital , information about each case separately is provided.
For the reported period the Company has no pending legal, administrative or arbitration proceedings.
8. Information about granted by the issuer or its subsidiary company loans, guarantees or commitments totally to one person or its subsidiary, including to related to it persons, showing the type of relation between the issuer and the person, the amount of unpaid principal, the interest rate, the final maturity, the size of the commitment, the term and conditions.
| 30.9.2017 | 31.12.2016 | |
|---|---|---|
| BGN'000 | BGN'000 | |
| Starcom Holding AD | 7 956 | 520 |
| Eurolease Auto EAD | 2 576 | 3 342 |
| Eurolease Group EAD | 16 | 16 |
| 10 548 | 3 878 |
| 30.9.2017 | 31.12.2016 | |
|---|---|---|
| 1. Interest payables | BGN'000 | BGN'000 |
| Starcom Holding AD | 218 | 861 |
| Eurolease Auto EAD | 112 | 20 |
| Eurolease Group EAD | 8 | 7 |
| Avto Union Service EOOD | 20 | 20 |
| 358 | 908 |
| 2. Current borrowings | 30.9.2017 | 31.12.2016 |
|---|---|---|
| BGN'000 | BGN'000 | |
| Starcom Holding AD | - | 15 330 |
| - | 15 330 |
| 30.9.2017 | 31.12.2016 | |
|---|---|---|
| BGN'000 | BGN'000 | |
| Eurolease Auto EAD | 17 | 10 |
| Sofia Motors EOOD | 9 | 9 |
| Bulvaria Holding AD | 6 | 5 |
| 32 | 24 |
Date:
27.10.2017 г. Asen Minchev, Executive Director of Eurohold Bulgaria AD
| Declarers: | |
|---|---|
| 1. Kiril Boshov | |
| 2. Asen Minchev | |
| 3. Ivan Hristov | |
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