Eurohold Bulgaria AD
INTERIM CONSOLIDATED
MANAGEMENT REPORT AND
FINANCIAL STATEMENTS
1 January - 3 0 June 201 8
Interim consolidated management report , 30 June 2018
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TABLE OF
CONTENTS
1. Interim consolidated management
report as of June 30, 2018.
Interim consolidated financial
statements as of June 30, 2018.
2. Notes to the interim consolidated
financial statements.
3. Declarations by the responsible
persons
Interim consolidated management report , 30 June 2018
INTERIM CONSOLIDATED MANAGEMENT REPORT
containing information on important events that occurr ed during
the first half of 2018 according to Art. 100o, para graph 4, item 2 of
POSA
IMPORTANT EVENTS FOR THE EUROHOLD GROUP THAT OCCURRED IN THE
PERIOD 1 JANUARY - 30 JUNE 2018
During the reporting period, the following important events took place, affecting the
results in the financial statement s of Eurohold Bulgaria AD as of 30.06.2018 :
1. DIVIDEND PAYMENT
At a regular meeting of the General Meeting of Shareholders of Eurohold Bulgaria
AD, h eld on 29.06.2018, a decision was taken to allocate a net profit of BGN 1 800
000 (one million eight hundred thousand leva) as a gross dividend among the
shareholders. The gross dividend per share is BGN 0.009. Dividend payments will
be made within 60 (six ty) days of the date of approval by the General Meeting of
Shareholders of the decision to distribute the dividend.
2. EUROHOLD ACQUIRES THE RESIDUAL MINORITY SHARE IN THE EUROINS
INSURANCE GROUP
In June 2018, Eurohold Bulgaria AD agreed with South Eastern Eu rope Fund L.P.
(SEEF), managed by the Greek investment company Global Finance, for the
acquisition of the residual minority share of 10.64% of its subsidiary insurance
holding company Euroins Insurance Group (EIG).
After the transaction is finalized, Euro hold will own 100% of the capital of Euroins
Insurance Group AD and thus consolidate its ownership in all of its subsidiaries -
EIG, Avto Union AD, EuroLease Group EAD and Euro - Finance AD, which operate in
the respective sectors : insurance, car sales, lea sing and financial investment
intermediation. Currently Eurohold holds 100% of the shares of Avto Union AD,
Eurolease Group EAD and Euro - Finance AD.
3. FINANCING
At the end of May 2018 Eurohold Bulgaria signed a loan agreement with
International Investment Bank. The loan amounts to EUR 10 million, with a
repayment term of 18 March 2025 and an annual interest rate of 6% + Euribor.
4. REPAYMENT OF A MEZZANINE LOAN
On 31st of May, 2018, Eurohold Bulgaria fully repaid a mezzanine loan - interest
and principal.
The 15 - million - euro mezzanine credit agreement was signed in 2008 with
Accession Mezzanine Capital II.
The loan was used for the regional expansion of EIG.
The repayment of the loan will result in a reduction in the interest costs of
Eurohold.
Interim consolidated management report , 30 June 2018
IMPORTANT EVENTS FOR THE EUROHOLD GROUP THAT OCCURED AFTER THE
BALANCE SHEET DATE OF 30.06.2018
1. EUROINS INSURANCE GROUP RECEIVE D AUTHORIZATION FOR THE
ACQUISITION OF AN INSURANCE COMPANY IN UKRAINE
On 19.07.2018 the Ukrainian regulator - the National Commission for State
Regulation of the Financial Services Markets of Ukraine (Національна комісія, що
здійснює державне регулювання у сфері ринків фінансових послуг), issued a
decision 1302 / 19.07.2018, according to which it authorized Euroins Insurance
Group to acquir e a qualifying shareholding of 99.99998% of the capital of Private
Company “ European Tourist Insurance ” , Ukraine. The acquisition of shares on the
part of Euroins Insurance Group will take place in accordance with the provisions of
the Purchase and Sale Ag reement for Shares from 13.04.2018 and the applicable
provisions of the Ukrainian law.
2. FITCH RATINGS CONFIRMED THE CREDIT RATING S OF EUROINS ROMANIA
AND EUROHOLD BULGARIA
On August 1, 2018 , the international rating agency Fitch Ratings for the first time
awarded a rating "BB - " to Euroins Bulgaria, the B ulgarian insurance company of
Eurohold. As well as , Fitch Ratings confirmed Euroins Romania's rating for financial
s tability (Insurer Financial Strength Rating - IFSR) "BB - " . The outlook for the rating
was assessed as stable.
The long - term credit rating of Eurohold Bulgaria AD was also confirmed (Long - Term
Issuer Default Rating – IDR) “B” . The outlook for the rating was assessed as stable .
Fitch Ratings also confirmed the credit rating of Eurohold's medium - term Eurobond
program (EMTN programme) in the amount of up to EUR 200 million and the EUR
70 million medium - term Eurobonds issued under the programme as B'/'RR4'.
Fitch's rating analysis reported the following key factors in the development of
Eurohold:
➢ Improved leverage, capitalization and debt servicing capabilities;
➢ Eurohold’s consolidated Fitch - calculated financial leverage ratio improved to
63% at the end of 2017 from 84% in 2016 due to equity increases and debt
reduction in 2017;
➢ Eurohold’s fixed coverage ratio improved to 2.1 at the end of 2017 compared
0.9 as of the end o f 2016 supported by improved profitability. Fitch expects
that debt reduction in 4Q17, and more favourable rates on newly issued Euro
medium - term notes (EMTN) could lead to further improvement in Eurohold's
FCC ratio in 2018;
➢ Fitch considers Eurohold's bu siness profile as good. EIG holds strong market
positions in its core Romanian and Bulgarian non - life insurance markets,
especially in the MTPL segment;
➢ The S2 ratio of Eurohold's insurance activities grouped under the interim
holding company Euroins Insu rance Group (EIG) improved to 177% at end -
2017 (2016:123%) due to fresh equity injections, investment portfolio de -
risking, and lower catastrophe risk retention.
Interim consolidated management report , 30 June 2018
EUROHOLD BULGARIA
CONSOLIDATED FINANCIAL RESULTS
Eurohold Bulgaria reported as at June 30, 2018 a net consolidated profit of BGN 4.1 million,
gaining 3.9% compared to a profit of BGN 3.9 million for the first half of 2017. The
distribution of the financial result is as follows: for the Group, profit of BGN 1.9 million; for
non - controlling partic ipation profit of BGN 2.1 million . Accordingly, as of 30.06.2017: t he
Group realized a profit of BGN 2 million, whereas the relative result to the non - controlling
interest amounted to BGN 1.9 million profit .
Consolidated gross profit of Eurohold Group as at 30.06.2018 increased by BGN 6.6 million,
reaching BGN 59.6 million compared to BGN 53.1 million for the comparable period .
At the same time, EBITDA amounted to BGN 19.4 million, up 11.7% as compared to
30.06.2017, when EBITDA amounted to BGN 17.3 million .
According to the interim consolidated financial statements for the first half of 2018, the
consolidated operating income of Eurohold Group amounted to BGN 600.5 thousand,
accounting for a decrease of 7% compared to the comparable period of 2017 .
The Group's operating expenses decreased comparatively to revenues . T he reported
decrease of expenses for the reporting period was 7.2% and they amounted to BGN
540,852 thousand .
The net financial and depreciation costs of the Eurohold Group companies amou nted to
BGN 10.3 million and BGN 5 million respectively, while during the comparable period they
amounted to BGN 9.1 million and BGN 4.1 million . 53 050 59 605
17 324 19 356
3 926
4 079
010 00020 00030 00040 00050 00060 00070 000
30 June 2017 30 June 2018Eurohold Bulgaria comparative consolidated result as of the first half of 2018, in
thousands of BGN.
gross profit EBITDA net profit
Interim consolidated management report , 30 June 2018
Other expenses for the Group's activity increased by BGN 4.5 million and amounted to a
total of BGN 40.2 million .
CONSOLIDATED OPERATING RESULTS BY TYPE OF ACTIVITY BASED ON
CONSOLIDATED DATA
Insurance business
Revenues from insurance activity at the end of the first half of 2018 amounted to BGN
458.6 million. Compared to the same period in 2017, the reven ues from insurance activity
decreased by 14.9% .
The operating expenses for the period under review decreased by 16.8% to BGN 423.2
million compared to BGN 508.7 million at the end of the comparable period .
Despite the reported revenue decrease, the insurance sub - holding Euroins Insurance
Group realized a 16.9% increase in consolidated operating profit, which amounted to BGN
35.6 million compared to BGN 30.4 million as at 30.06.2017 .
Automotive business
Revenues from the automo tive business amounted t o BGN 127.2 million, with a significant
increase for the reported period of BGN 35.4 million .
Operating expenses for sold vehicles and spare parts increased by BGN 34.1 million and
reached BGN 114.6 million .
For the reporting period, the automotive sub - ho lding realized a consolidated operating
profit of BGN 12.6 million compared to BGN 11.2 million for the comparable period of 2017 .
Leasing business
Reported consolidated operating income from leasing activity amounted to BGN 11.6
million compared to BGN 12.6 million for the comparable period with a decrease of BGN
1.1 million .
The operating expenses related to the leasing activity amounted to BGN 1.8 million,
remaining relatively unchanged compared to the previous reporting period .
For the current period, the leasing activity realized a consolidated operating profit of BGN
9.7 million, while as of 30.06.2017 the consolidated operating profit was BGN 10.6 million .
Asset management and brokerage
Asset management and brokerage business generated revenue of BG N 1.8 million,
accounting for a growth of 24.4% compared to the comparable period .
The expenses for financial - investment activity for the reporting period increased by 35.6%
and amounted to BGN 1.3 million .
The result of the operating activity of the asset management and brokerage business for
the first half of 2018 is a profit of BGN 0.463 million, while the realized financial result as
at 30.06.2017 amounted to BGN 0.459 million .
Interim consolidated management report , 30 June 2018
Activity of the parent company
In the first half of 2018, Eurohold Bu lgaria generated revenues amounting to BGN 1.3
million .
The operating expenses of the parent company are insignificant in the amount of BGN 51
thousand .
The result of the operating activity is a profit of BGN 1.2 million .
RESULTS BY TYPE OF ACTIVITY BASED ON UNCONSOLIDATED DATA
The table below provides information on revenue ss earned by subsidiaries as of 30 June
2018 compared to 30 June 2017. A comparison of the EBITDA generated by Eurohold
subsidiaries was also made, as well as the financial result before the elimination by sector s .
TOTAL REVENUES BY SECTOR S
Sectors
H1.2018 H1.2017 Change
BGN ‘000 BGN ‘000 %
Insurance business 459 396 540 003
- 15%
Automotive business 131 630 95 349
38%
Leasing business 12 261 13 113
- 6%
Asset management and brokerage 2 138 1 931
11%
Total for the subsidiaries 605 425 650 396
- 7%
Parent company 1 834 2 627
- 30%
Total before eliminations 607 259 653 023
- 7%
Intra - group elimination s (6 802) (7 063)
- 4%
Total revenues by sectors 600 457 45 960 - 7%
PROFIT BEFORE INTEREST, AMORTISATION AND TAX ES
Sectors
H1.2018 H1.2017 Change
BGN ‘000 BGN ‘000 %
Insurance business 13 692 13 231
3%
Automotive business 3 091 3 079
0%
Leasing business 2 744 2 178
26%
Asset management and brokerage 73 201
- 64%
Total for the subsidiaries 19 600 18 689
5%
Parent company 840 854
- 2%
Total before eliminations 20 440 19 543
5%
Intra - group elimination s (1 084) (2 219)
- 51%
Total profit before interest, amortisation and
taxes 19 356 17 324
12%
FINANCIAL RESULTS
Sectors
H1.2018 H1.2017 Change
Interim consolidated management report , 30 June 2018
BGN ‘000 BGN ‘000 %
Insurance business 11 534 11 216
3%
Automotive business 395 434
9%
Leasing business 110 122
- 10%
Asset management and brokerage 36 171
- 79%
Total for the subsidiaries 12 075 11 943
1%
Parent company (7 787) (7 478)
- 4%
Total before eliminations 4 288 4 465
- 4%
Intra - group elimination s (209) (539)
- 61%
Total financial result 4 079 3 926
4%
Revenues from the activities of Eurohold Group companies decreased by 7% or by BGN
45.8 million before accounting for intragroup calculations. The decrease in revenues is
mainly due to the drop in subscribed premiums in Romania recorded during the reporting
period .
Profit before interest, depreciation and taxes increased by 5% or by BGN 0.9 million before
reporting for intragroup eliminations .
The realized financial results of the Group companies before intragroup elimination s
amounted to BGN 4.3 million, decreasing by just BGN 177 thousand .
FINANCIAL CONDITION
Consolidated Assets
During the first six months of 2018 Eurohold Group companies achieved an increase of
consolidated assets by 2.4%, which at the end of the reporting period amounted to BGN
1.358 billion compared to BGN 1.326 billion at 31.12.2017 .
The most significant change in consolidated assets was recorded in cash and deposits,
receivables, financial assets and reinsurers' share of technical reserves .
At the end of the first half of the year, the Eurohold Group has free cash and deposits in
banks amounting to BGN 62 million . At the end of 2017 they amounted to BGN 57.1 million .
Receivables increased by BGN 27 million for the period to BGN 259.2 million. The most
significant change was observed in non - current receivables, which increased by BGN 21.7
million and amounted to BGN 107.6 million .
The financial assets held by Eurohold Group companies as at 30.06.2018 reported a
decrease of BGN 24.7 million compared to the end of 2017 .
In the first half of 2018, the share of reinsurers in technical reserves grew by BGN 22.6
million .
Interim consolidated management report , 30 June 2018
Consolidated equity and liabilities
Total equity of Eurohold Bulgaria amounted to BGN 216.5 million, rising by BGN 2 million
as compared to 31.12.2017. T he consolidated capital of the Eurohold Group amounted to
BGN 174.5 million, while the capital belonging to the non - controlling interest for the period,
amounted to BGN 42 million . For comparison with the end of 2017, the consolidated capital
of the Eurohold Group amounted to BGN 170.8 million, and the capital belong ing to the
non - controlling interest amounted to BGN 43.7 million .
In support of equity, the Group holds subordinated debt instruments of BGN 28 million
compared to BGN 26 million as at the end of 2017 .
The total amount of equity and subordinated debt inst ruments amounted to BGN 244.6
million, while at the end of 2017 they amounted to BGN 240.6 million .
Non - current consolidated liabilities increased by 11.18% from BGN 280 million to BGN
311.4 million during the reporting period. A major part of non - current liabilities represent
liabilities to banks, other financial institutions and issued bond loans .
Liabilities on loans and bond issues : Н 1. 2 01 8 31.12. 201 7 %
BGN ‘000 BGN ‘000 Change
- bank and non - bank loans 1 16 610 99 245 17 . 5 %
- bond issues 163 267 150 757 8 . 3 %
Total loans 2 79 877 250 002 11 . 9 %
Current c onsolidated l iabilities decreased by the end of the reporting period by BGN 3.2
million and amounted to BGN 802.5 million .
A major part of the current liabilities represent assigned insurance reserves amounting to
BGN 630 million . F or the current reporting period they increased by BGN 34.1 million
compared to the end of 2017 .
ACTIVITY OF THE SUBSIDIAR IES FOR THE PERIOD
1 JANUARY - 30 JUNE 2018
EUROINS INSURANCE GROUP
In the first six months of 2018 Euroins Insurance Group (EIG, the Group) has realized
consolidated gross written premiums of BGN 299.5 million compared to BGN 359.4 million
for the same period of 2016. Reason for the decrease is the business written by Eur oins
Romania. All other subsidiaries have registered growth. The Group has reported an
unaudited consolidated profit of BGN 11.5 million compared to a profit of BGN 11.2 million
in Q2 2017.
In January 2018 was completed the process to increase EIG capital by BGN 195.6 million
(EUR 100 million), a decision that has been voted back in 2015. The amount of this increase
Interim consolidated management report , 30 June 2018
has been fully paid in and registered with the Trade Registry as well. As of now the total
share capital of Euroins Insurance Group amounts to BGN 483,445,791 .
At the end of the quarter a Group corporate governance plan was initiated. Based on good
practices, risk management and improved reporting it is in the context of a shared
o perational and IT environment. The aim is to achieve management synergies and to
improve the Group corporate governance so that it will lead to qualitative and quantitative
progress – from the very main elements (products, sales, claims) through reporting,
control and quality of the actuarial calculations and work.
➢ Euroins Bulgaria
In the first six months of 2018 Euroins Bulgaria has reported total GWP of BGN 80.3 million
c ompared to BGN 73.6 million written in 201 7. The reason for this growth of more than
9% is the direct insurance business written through brokers both locally in Bulgaria and in
Greece, Italy and Spain according to the EU directive for Freedom of services. MTPL line of
business grows but so do also main non - motor lines such as Health (67%)
and Accident and Travel (25%).
Net claims incurred are up by 17 % . The reasons for this growth is the growth of the
business. Net earned premiums have increased by more than 20% for the period.
An increase in the administrative expenses has be en reported compared to the same period
of 2017. Firstly, these are the expenses associated with the growth of the business. Next
are the substantial final costs related to the IFRS and Solvency II audits that also have
their impact. Because of the new reg ulatory requirement, the statements of the insurance
companies must be now signed off by two audit firms. There are also the significant costs
associated with the new regulatory requirements of Solvency II.
Despite this Euroins Bulgaria has reported a prof it for group purposes of BGN 470 thousand
compared to BGN 138 thousand in Q2 2017.
In 2017 the majority shareholder of Euroins Bulgaria Euroins Insurance Group has
reconfirmed its commitment to support its subsidiary by increasing its capital by BGN 16
mil lion. As at 30 June 2018 the share capital, fully paid in and registered, amounts to BGN
32,470,000.
The improved financial condition of the company has been also confirmed by the updated
Long - Term Claims Paying Ability Rating assigned by BCRA, Credit rati ng Agency, in January
2018. The assigned rating is “BBB - ” with outlook updated to Stable confirming the
improvement. On August 1, 2018 , the international rating agency Fitch Ratings for the first
time awarded a rating "BB - " to Euroins Bulgaria .
All the circumstances above would help the management of Euroins Bulgaria in focusing
on the challenges waiting in 2018, which are the intr oduction by way of enactment of the
bonus malus system on the local MTPL insurance market and the establishment of an
insurance branch in Greece.
The bonus malus system has been already part of the underwriting policy of Euroins
Bulgaria since 2012. But so far, the company has applied it only on drivers that are either
current or former clients. With the introduction of the system on the entire market Euroins
Bulgaria will be in position to perfect it and apply its conservative underwriting approach
to all its clients and thus improve its technical result.
➢ Euroins Romania
In the first ясй months of 2018 Euroins Romania has written total GWP of BGN 200 . 1
million compared to BGN 1 66 . 2 million in 2017. The decrease is a result of the stabilization
of the Romani an MTPL market after two years of significant increase of the average
Interim consolidated management report , 30 June 2018
premium. Unlike the Motor business the major non - Motor lines of business such as Liability
(4 2 %), Accident ( 19 %), Property (18%) and Cargo (3%).
Net claims incurred grow as result of an increase in the number of reported claims. At the
same time there is a decrease in the average paid claim.
Acquisition costs have registered significant decrease of more than 17% with the reason
being the decrease in the written business. Administrative ex pense has registered slight
increase compared to the same period of 2017 but there currently are certain initiatives
under way to optimize several processes related not only to the administrative
management but also to processes that are yet to benefit act ivities such as claims handling
and internal controls.
As a result, this is another quarter for Euroins Romania where it can be witnessed the
positive effect of the re - segmentation combined with the strengthening of the reserves in
2015. Subsequently the p rofit for group purposes rises to BGN 11 million before tax.
At the beginning of 2018 Euroins Romania has received the final regulatory approval for
the acquisition of the insurance portfolio of ATE Insurance, a Romanian general insurer. It
consists of non - Motor business only. The transaction is part of the long - term strategy of
Euroins Romania to increase the share of the non - Motor business of the company.
➢ Euroins Macedonia
In Q2 2018 gross premiums written by Euroins Macedonia have registered a growth of
nearly 19% reaching BGN 10 million. Main business lines that grow are Liability by 57%,
Property – 26%, Motor Hull – 12%, Cargo – 9 %, MTPL – 5%.
Net claims incurred have increased by 8% with the net earned premiums having grown by
16% in the same period.
B ecause of the ongoing initiatives of the management of the company administrative costs
have registered a decrease of 8%.
The result of the above is a profit for group purposes of BGN 800 thousand compared to
BGN 4 thousand in 2017.
➢ Euroins Life
In the first six months of 2018 Euroins Life has written total GWP of BGN 931 thousand
registering growth of 6% compared to Q2 2017.
The management of the company is currently reviewing the products on offer. In addition
the company also started offering on the market new life insurance solutions including
online sales solutions. These initiatives, however, are still at the very beginning with the
positive portfolio effect yet to be seen.
➢ Euroins Ukraine
On 12 August 2016 Euroins Insurance Group has compl eted the acquisition of PJSC HDI
Strakhuvannya Insurance Company. On 30 September the General Assembly of the
Shareholders voted the company’s name to be changed to PJSC Euroins Ukraine Insurance
Company. The newly acquired company writes both motor and no n - motor business .
In Q2 2018 gross written premiums amount to BGN 9 million, which is a growth of 77%.
Nearly 40% of the written business has been non - Motor. Because of the administrative and
acquisition costs related to the current ongoing restructuring o f the company Euroins
Ukraine has reported a loss for Group purposes of BGN 861 thousand.
Interim consolidated management report , 30 June 2018
➢ EIG Re
The previous name of Insurance Company EIG Re EAD is HDI Insurance AD. Euroins
Insurance Group has acquired the company at the end of 2015. For the six months of 201 8
EIG Re has written gross premiums of BGN 11 million showing some slight growth. The
profit for Group purposes amounts to BGN 140 thousand.
➢ Euroins Russia
On 23 November 2017 Euroins Insurance Group has acquired 14.144% of the capital of
Insurance Company Euroins Russia.
On 13 February 2018 the increase of the capital of the company where Euroins Insurance
Group AD participated with RUB 80 million has been completed. As a result, at the end of
the quarter the participation of the Group in the capita l of Euroins Russia is 32.195%.
In the first half of 2018 the company has reported gross written premiums of BGN 11
million. As continuation of the sound performance from last year the company reports a
profit of BGN 336 thousand in Q2 2018 .
AVTO UNION
The consolidated financial result of the Group for the period from 01.01.2018 until
30.06.2018 is a profit of BGN 395 thousand (2017 - profit of BGN 434 thousand). The
consolidated financial result for the parent company's owners for the same period was a
loss of BGN 488 thousand, compared to 2017 when it was a profit of BGN 3 thousand.
The number of cars sold for the second quarter of 2018 increased by 34.6% compared to
the same period of 2017. Revenues from sales of cars, spare parts, oils and fuels incre ased
by 39.3%, and the revenues from sales of services grew by 7.2% .
Interim consolidated management report , 30 June 2018
Sales of new cars from Avto Union in the second quarter of 2018 compared to those on the
Bulgarian market as a whole , number of cars – Q 2 201 6 , Q 2 201 7 and Q 2 201 8 , source :
ACM
Operating expenses for the second quarter of 2018 show an increase of 16.7% over the
same period in 2017, due to the higher realized revenues in 2018 compared to 2017. The
highest growth was recorded in the personnel costs, which increased by 17.6% or BGN
1,060 thousand, as well as the expenses for external services, which increased by 16.7%
or BGN 716 thousand. The financial expenses decreased by 12.7%, or BGN 203 thousand,
due to the optimization of the structure and the cost of the borrowed capital for t he Group.
Revenues from financial operations also decreased by 86% or BGN 280 thousand in the
period under review compared to the previous year 2017, due to a decrease in interest
income under loan agreements.
For the period ending on 30.06.2018 the sales of new cars and light commercial vehicles
realized by Avto Union - the automobile holding in the group of Eurohold Bulgaria amounted
to 3 210 units, compared to 2 358 units sold in the same period in 2017, which represents
a growth of 36.1%. According to t he Union of Automobile Importers in Bulgaria, the market
for new cars and light commercial vehicles registered a growth of 20.8% for the second
quarter of 2018 compared to the same period of 2017. During the reporting period Opel
dropped 15% for Varna and 8% for Sofia. Espas Auto OOD has registered sales growth for
both of its brands compared to 2017 - 35% for Renault and 7.7% for Dacia. In the case of
N A uto , there was a growth in sales of 119% for Nissan cars. Auto Italia EAD increased its
sales of Fiat b y 146% and Alfa Romeo by 160%, while its sales of Maserati decreased by
61%. Star Motors marks a 7% decline in sales of new Mazda cars compared to last year .
Number of cars sold and market share of automotive companies in the Auto Union Group
for the second quarter of 2018 .
Interim consolidated management report , 30 June 2018
During the reporting period the companies from the automobile holding have concluded
flotation transactions for a total of 1 109 automobiles with a total value of BGN 28.6 million,
while the ratio for the previous year was 823 auto mobiles with a total value of BGN 18.3
million .
Avto Union Group Sales %
2018 2017 Change
January – June
3 210 2 385 34,6%
(with accumulation)
By quarter:
first quarter (Jan - Mar) 1 313 1 023 28,3%
second quarter (Apr - June) 1 897 1 362 39,3%
At a constituent meeting held on January 8, 2018, a decision was taken for the
establishment of a joint stock company "Sofia Auto Bulvaria" AD, the decision being
entered in the Commercial Register on 07.02.2018. The founders of the company are
Bulvaria Ho lding EAD (controlling 51% of the capital) and Sofia Auto Bulgaria EAD (with
minority participation of 49% of the capital) - two of Opel's three largest dealers in the
country. The j oint stock company , as a new legal entity, will start to carry out an
inde pendent economic activity of importing and selling new Opel cars in the country , selling
spare parts for them and provi ding service activities. Bulvaria Holding EAD and Sofia Auto
Bulgaria EAD will exercise joint control by stopping self - activity in the import and sale of
new Opel cars, original spare parts for them, including warranty service.
On May 3, 2018 , Star Motors Ltd. signed a contract with UniCredit Bulbank AD, whereby
the parties agreed to provide a bank revolving loan of EUR 350,000 for operational
payments, the deadline for which to be utilized is 30.04.2019.
On 17.05.2018, with a record of an extraordinary general meeting of the shareholders of
Espas Au to OOD, a decision was made to distribute BGN 500,000 of undistributed profit
from the Company's activities to its shareholders H Auto Sofia EAD (51%) and M G Ltd
(49%).
On May 28, 2018 , Star Motors Ltd. signed an annex to its Contract for a Bank Loan with
UniCredit Bulbank AD, through which the parties agreed to reduce the credit limit granted
to the Borrower in the form of bank guarantees and documentary credits by EUR 1 050
000. Thus, the total bank guarantee limit at the end of the reporting period gran ted to the
borrower Star Motors EOOD amounts to EUR 3 250 000.
On 13.06.2018 , Motobul EAD successfully carried out, under the terms of a primary
private offering, a first issue of ordinary, registered, dematerialized, interest - bearing,
secured, non - convert ible, freely transferable corporate bonds with the following
parameters:
ISIN : BG2100006183
Currency : BGN
Price : 8 800 000 leva .
Amount : 8 800
Nominal value : 1 000 leva.
Fixed interest rate: 3.85% annually
Maturity : 13.06.2028
Coupon payment: every 6 months
Interim consolidated management report , 30 June 2018
On 15.06.2018 Motobul EAD signed an annex to its Revolving Bank Loan Agreement with
Raiffeisenbank Bulgaria EAD, which extended the term by one year and reduced the
interest rate under the loan agreement. Under the new conditions, the interest rate is 3 -
month EURIBOR + 3.3% .
On 29.06.2018 an a nnex was signed to the credit agreement between H Auto Sofia EAD
and Raiffeisenbank Bulgaria EAD, which reached an agreement for a gradual reduction of
the limit used up to EUR 250 000 until 30.09.2018. Under t he new conditions set out in
the Annex, the interest rate is reduced and amounts to a 3 - month EURIBOR + 3.3% .
EUROLEASE GROUP
For the reporting period Eurolease Group reports consolidated profit of BGN 110 thousand
compared to BGN 122 thousand for the second quarter of 2017.
The consolidated revenues of the company are formed by the different business lines of
the subholding, namely: revenue from financial and op erating leases, rent - a - car services
and sale of used cars, the distribution of which is shown in the following graphic .
The observed changes are caused by the following factors:
- During the reporting period the total revenues from the different lines of the
business increased by 13.28 % to BGN 10,932 thousand compared to BGN 9,650
thousand at the end of the second quarter of 2017. The relative shares of each of
the lines of business are kept relatively constant, proving the consistency of the
revenues in the leasing sub - holding;
- Financial leasing - In absolute terms, revenues from this business line increase and
as at 30 June 2018 amounted to BGN 2,559 thousand compared to BGN 2,432
thousand for the comparable period
- Operating lease - the increase in the s econd quarter of 2018 is due to the significant
increase in the number of long - term rental cars. Revenues from operating leases in
the two comparable periods increased by 26%, reaching BGN 3,652 thousand as
compared to BGN 2,898 thousand at the end of June 2017.
- Rent - a - car services - the amount of revenues decreases by 6.34 % to BGN 1,640
thousand compared to BGN 1,751 thousand at the end of June 2017. Revenues
from operating leases and short - term rentals are reported in other operating income 23%
33%16% 28%Q2, 2018
25%
30%18% 27% Q2, 2017
Financial
Leases
Operartng
Leases
Car Rentals
Used vehicles
Sale
Interim consolidated management report , 30 June 2018
and for the second quarter of 2018 they show an increase of 13.34 % to reach BGN
5,292 thousand compared to BGN 4,649 thousand for the same period in 2017.
- Sale of used cars - the share of revenues from the sale of used cars remains
unchanged. In absolute terms, an increase of 19.93 % to BGN 3,081 thousand was
reported, compared to BGN 2,569 thousand as of 30.06 .2017.
An increase o f 15.09 % was also reported in operating expenses amounting to BGN 6,414
thousand at the end of the second quarter of 2018 compared to BGN 5,573 thousand for
the same period in 2017.
Assets at the consolidated level amounted to BGN 120,104 thousand compared to BGN
115,171 thousand as at 31 December 2017.
Consolidated net investment in finance leases slight increase to BGN 56,954 thousand
compared to BGN 56,581 thousand as at the end of 2017.
The following graph shows the movement in the net investment in a f inancial lease of the
sub - holding for the specified periods, together with the movement in the number of the
leasing assets, part of the portfolio of the company .
As at the end of the reporting period, consolidated fixed assets amounted to BGN 27,546
tho usand compared to BGN 25,436 thousand at the end of December 2017.
As of the end of June 2018 there were no significant changes in the relative share of the
type of funding used:
- Due to banks as of 30 June 2018 amounted to BGN 55 , 536 thousand compared to
B GN 47,768 thousand for the comparable reporting period.
- Due to other financial institutions increase by 4.06% to BGN 13 , 237 thousand
compared to BGN 12,719 thousand as at 31 December 2017. The amount is payable
by the subsidiary Eurolease Rent A Car to lea sing companies that finance its
activities ;
- At the end of the second quarter of 2018, amounts due under debt securities issued
are BGN 27 803 thousand compared to BGN 28,985 thousand as at 31 December
2017 . Q2, 2018 2017 2016
Net Investment in finance lease
(in '000 BGN) 56 954 56 580 50 363
Total number of vehicles
3 034 2 888 2 776 1 6001 8002 0002 2002 4002 6002 8003 0003 200
35 00040 00045 00050 00055 00060 000
Interim consolidated management report , 30 June 2018
Stand - alone financial result of Eurolease Group is loss of BGN 164 thousand compared to
loss of BGN 154 thousand at the end of relative reporting period of 2017. Total assets of
the company are BGN 40,496 thousand.
➢ Eurolease Auto Bulgaria
Financial result of Eurolease Auto Bulgaria for the second quarter of 2018 is profit of BGN
367 thousand compared to profit of BGN 375 thousand for the second quarter of 2017.
Net interest income increases by 14.86 per cent and as of the end of June 2018 amount to
BGN 1,232 thousand vs BGN 1,073 thousand as of 3 0 June 2017.
The administrative expenses of the Company at the end of reporting period amount to BGN
1,040 thousand compared to BGN 941 thousand at the end of second quarter of 2017.
As of the end of June total assets of the Company amount to BGN 88,914 th ousand
compared to BGN 86,987 thousand at the end of December 2017.
The net investment in financial leasing reported a decrease of 1.68 per cent and as at 30
June 2018 amounted to BGN 56,474 thousand compared to BGN 57,439 thousand at the
end of 2017.
The following graph shows the movement in the net investment in a financial lease of the
company for the specified period, together with the movement in the number of the leasing
assets, part of the company's portfolio . 58
%
14
%29
%Q2, 2018
54%
14%32% 2017
Due to Banks
Due to on the financial
institutions
Debt securities issued
Interim consolidated management report , 30 June 2018
As at the end of June 2018, company’s equity amounted to BGN 22,749 compared to BGN
22,382 thousand as at 31 December 2017.
At the end of the reporting period the liabilities of the company amounted to BGN 66,165
thousand and BGN 64,605 thousand as at 31 December 2017.
Eurolease Auto finances its activities through borrowed funds in the form of bank loans
from local and international financing institutions and issuance of d ebt instruments .
The following table shows the distribution of the funding used by the company .
During the reporting period no significant changes occurred in this type of obligation:
- Bank loans - at the end of June 2018 amounted to BGN 44,152 thousand compared
to BGN 38,431 thousand at the end of 2017.
- Company’s liabilities under debt instruments issued decrease by 5.5 8 % to BGN
19,240 thousand compared to BGN 20,376 thousand as at 31 December 2017.
➢ Eurolease Auto Romania
At the end of the reporting period Eurolease Auto Romania reports loss of BGN 17 thousand
compared to loss of BGN 41 thousand for the relative reporti ng period of 2017 . Q2, 2018 2017 2016
Net Investment in finance lease (in
'000 BGN) 56 474 57 439 48 964
Total number of vehicles
2 556 2 473 2 377 1 8001 9002 0002 1002 2002 3002 4002 5002 600
30 00035 00040 00045 00050 00055 00060 000
70
%30
%Q2, 2018
65%35% 2017
Due to Banks
Debt securities
issued
Interim consolidated management report , 30 June 2018
➢ Eurolease Auto Macedonia
The financial result of Eurolease Auto Macedonia as at the end of second quarter of 2018
is profit of BGN 47 thousand vs loss of BGN 64 thousand for the same period of 2017.
As of 3 0 .0 6 .201 8 interest income increase d by 6.15 per cent to BGN 276 thousand
compared to BGN 260 thousand at the end of the second quarter of 2017.
During the reporting period interest expenses decrease by 24.11 per cent to BGN 192
thousand compared to BGN 253 thousand as of 30.06.2017 . The decrease is due to
renegotiation in 2017 of the interest rates under the funding the company uses.
During the period the net investment in financial leasing decreases a bit and at the end of
June 2018 amounts to BGN 6,196 thousand in comparison to BG N 6,449 thousand at the
end of 2017.
The following graph ic shows the movement in the net investment in financial lease of the
sub - holding for the specified periods , along with the movement in the number of leas ed
assets part of the company's portfolio .
As at 30 June 2018 Company’s total assets amounted to BGN 8,441 thousand compared
to BGN 8,019 thousand as at 31 December 2017.
At the end of reporting period bank loans amount to BGN 5,471 thousand compared to
BGN 5,380 thousand as at 31 December 2017.
➢ Eurolease Rent a Car
Eurolease Rent A Car is a provider of short - term and long - term rent of vehicles under AVIS
and BUDGET brands.
The financial result as of the company during the reporting period is loss of BGN 115
thousand compared to loss of 113 thous and as of the end of second quarter of 2017.
The following chart shows the breakdown of revenue by origin for the first quarters of 201 8
and 201 7 : Q2, 2018 2017 2016
Net Investment in finance
lease (in '000 BGN) 6 196 6 448 5 819
Total number of vehicles
392 415 399 300320340360380400420440
2 0002 5003 0003 5004 0004 5005 0005 5006 0006 5007 000
Interim consolidated management report , 30 June 2018
At the end of the second quarter of 2018, the interest expense of the company remained
unchanged and amoun ts BGN 271 thousand compared to BGN 268 thousand as at June
2017.
The administrative expenses of the Company as at 30 June 2018 decrease by 2.66 per
cent and amounted to BGN 3,471 thousand compared to BGN 3,566 thousand for the same
period in 2017.
The cha rt below shows the relationship between the Company's fixed assets, revenues and
EBITDA. With the increase in the book value of fixed assets, there was a slight increase in
EBITDA .
Total assets of the company amount to BGN 21,023 thousand compared to BGN 19,459
thousand as of December 2017.
Total liabilities are BGN 20,013 thousand vs BGN 18,319 thousand for the comparable
period.
➢ Autoplaza 0,0%10,0%20,0%30,0%40,0%50,0%60,0%70,0%80,0%90,0%100,0%
Q2, 2018 Q2, 201755,4%
50,9%36,9%
42,5%7,6% 6,6%
Other
Rent-a-car services
Operating lease
8 0009 00010 00011 00012 00013 00014 00015 00016 00017 000
Q2, 2018 Q2, 2017 05001 0001 5002 0002 5003 0003 5004 000
Fixed Assets Revenue EBITDA
Interim consolidated management report , 30 June 2018
The main activity of Autoplaza EAD involves the sale of vehicles returned from lease,rent -
a - car and "buy - back". The company operates in cooperation with Avto Union, Eurolease
Bulgaria and Eurolease – Rent - A Car.
Financial result of Autoplaza as of the end of second quarter of 2018 is profit of BGN 50
thousand compared to profit of BGN 116 thousand for the comparable period.
During the reporting period Autoplaza reports gross profit of BGN 257 thousand compared
to BGN 271 thousand at the end of June 2017.
The chart below shows the change in the total revenue, the cost of goods sold and the
gross pro fit realized by the company .
The total assets of the company amounted to BGN 2,289 thousand vs. BGN 2,523 thousand
as of 31 December 2017.
➢ Sofia Motors
The main activity of Sofia Motors is related to the rental of vehicles to individuals and small
and medium enterprises.
The financial result of Sofia Motors at the end of second quarter of 2018 is profit of BGN
37 thousand compared to loss of BGN 3 thousand for the comparable period.
The chart below shows the relationship between the company's fixed assets, revenue and
EBITDA. It is observed that the revenue growth is slower compared to the growth in book
value of fixed assets. This is due the larger volume of new deals generated in the second
half of 2017 . 150170190210230250270290310330350
05001 0001 5002 0002 5003 0003 500
Q2, 2018 Q2, 2017 Total Revenue
Cost of goods sold
Gross profit
Interim consolidated management report , 30 June 2018
During the reporting period, the revenues from services increased by 77.63% compared
to the second quarter of 2017. This trend is again due to the large number of transactions
realized in the second half of 2017.
Total assets of the company as of 30 June 2018 amounted to BGN 9,772 thousand
compare d to BGN 8,593 thousand as at 31 December 2017.
The total liabilities of the company amounted to BGN 9,596 thousand compared to BGN
8,653 thousand for the comparable reporting period.
➢ Amigo Leasing
By order of listing BNB - 32591 dated March 20, 2018, EuroLease Auto Retail EAD was
registered as a financial institution in the registers of the BNB. From April 2018, the
company was renamed to Amigo Leasing EAD.
The Company's activities started at the end of the first quarter.
Amigo Leasing reports a loss o f BGN 95 thousand - related to the expenses incurred in the
preparation stage of business development.
For the period since the beginning of the business operations, the company has built a
portfolio of financial leasing amounting to BGN 675 thousand and h as provided loans
amounting to BGN 76 thousand.
In June 2018, the company entered into a credit agreement with Bulgarian American Credit
Bank AD for an amount of EUR 1.5 million. The funds will be used to finance the activities
of Company .
EURO - FINANCE
EURO - FINANCE is an investment intermediary, a member of the Frankfurt Stock Exchange,
providing a direct access to Xetra® through the EFOCS trade platform. The Company also
offers trade in currencies, indexes, shares and precious metals by way of contracts for
difference through the EF MetaTrader 5 platform.
According to the FSC data, the Company is the one having the highest amount of equity
from among all the investment intermediaries. 02004006008001 0001 2001 4001 6001 800
7 0007 2007 4007 6007 8008 0008 2008 4008 6008 8009 000
Q2, 2018 Q2, 2017
Fixed Assets EBITDA Revenue (in '000 BGN)
Interim consolidated management report , 30 June 2018
During the reporting period EURO - FINANCE AD continues carrying out the activities set
forth in the development programme, which are directed at developing the online services
for individual clients, increasing the funds under management and participation i n projects
related to corporate consulting and restructuring.
As at 30 June 2018, EURO - FINANCE AD is holding clients’ financial assets in the amount of
BGN 627 961 thousand, BGN 12 642 thousand thereof being ones under management.
The Company’s net operat ing revenue for the first six months of the year 2018 amounts
to BGN 857 thousand and is generated from:
· Interest revenue – BGN 412 thousand;
· Other operating revenue – BGN 445 thousand;
Those expenses for the period which are connected with the current servicing of the
Company amount to BGN 819 thousand.
The Company develops in accordance with the expectations and, in view of the economic
situation, the expenses are preserved close to the estimates. Part of the revenues of EURO -
FINANC E is generated from the services that the Company has been actively developing
since the year 2012.
The table below shows the structure of the investments of EURO - FINANCE AD as at 30
June 2018, which complies with the risk management policy pursued by the Company .
Name 30 June
2018
Equity
share in % 31 Dec.
2017
Equity share
in % amount in
thousand
BGN amount in
thousand
BGN
Cash, current accounts and short -
term deposits 4 139 18.71% 4 528 20.31%
Equity securities (shares, rights,
and the like) 5 599 25.31% 6 096 27.34%
Debt securities (bonds and
treasury bills issued by
governments and financial
institutions) 198 0.89% - -
Debt securities of other issuers 2 393 10.82% 2 115 9.49%
Net receivables under repo
transactions 9 592 43.36% 9 678 43.40%
Total: 21 921 99.08% 22 417 100.54%
Part of the investments in equity securities shown in the table above is reported in the
investment portfolio of the Company. The items in the investment portfolio are as follows:
Issuer Number
available Unit value
in BGN Book value in
BGN
Central Depository AD 1 476.20 476.20
EF Asset Management AD 79 840 2.51 200 701.79
Varengold Bank AG 413 000 6.83 2 819 074.69
Varengold Bank AG 206 500 5.63 1 163 171.22
Total: 4 183 424.00
During the latest reporting period EURO - FINANCE AD has constantly monitored the
fulfilment of those requirements regarding capital adequacy and liquidity which ensue from
Ordinance № 50 of the FSC on capital adequacy and liquidity of investment intermediar ies
and Regulation (EU) No. 575/2013 of the European Parliament and of the Council. No
departures have been established. At any point in time the Company’s own funds
considerably exceeded the amount of capital requirements for covering all risks arising
fr om the activity of EURO - FINANCE AD. As at 30 June 2018 the Company’s own funds
exceed by 68% the equity requirements under Regulation 575/2013, the Company’s total
capital adequacy ratio being 8%.
The rules and procedures for the assessment and maintenanc e of the amount, types and
distribution of the internal capital that are necessary for adequately covering those risks
to which EURO - FINANCE AD is exposed constitute an element of the Rules on Risk
Assessment and Management, the reliability and effectivene ss of these Rules being
checked by the Board of Directors not later than 30th January each year.
EUROHOLD BULGARIA
( Standalone base )
FINANCIAL RESULT
As of 30th of June,2018 Eurohold Bulgaria AD reported for the negative financial result on
standalone base in amount of BGN 7.8 million versus a loss of BGN 7.5 million for the
comparable period last year .
REVENUES
Eurohold Bulgaria AD as a holding company does not carry out regular commercial
transactions, a nd 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 revenues of the company over the reporting period increased by 6.6% amounting to
BGN 2.7 million, of which BGN 0.9 million interest revenues, other financial revenues in
amount of BGN 1 million, BGN 0.6 million revenues from financial operations and BGN 0.2
million represented revenu es from dividend.
Interim consolidated management report , 30 June 2018
For comparison, as of the end of June, 2017 the company’s revenues amounted to BGN
2.5 million, of which and interest revenues in amount of BGN 1.7 million, revenues from
financial operations in amount of BGN 0.5 million and revenues fro m dividend in amount
of BGN 0.3 million .
EXPENSES
For the observed period the operating expenses increased by 4.9% as amounted to BGN
10.5 million compared to BGN 10 million as of 30.06.2017. The expenses growth was due
to the increased interest expenses during the current period, while all other operating
expenses decreased .
ASSETS
As of 30th of June 2018 the company's assets increased by 3% and amounted to BGN
574.7 million compared to BGN 557.9 million as of the end of 2017.
The increase in assets is due to an increase in investments in subsidiaries by BGN 7.9
million, as well as due to the increased current assets by BGN 8.8 million .
In the past six months Eurohold Bulgaria AD has invested in its subsidiary Euroins
Insurance Group AD, in two direction s:
1. On 3 January 2018, the last installment of the subsidiary company Euroins Insurance
Group AD amounting to BGN 1,963 million was made in accordance with the decision to
increase the capital of the insurance sub - holding in 2015;
2. Acquisitio n of a share of its subsidiary insurance holding company Euroins Insurance
Group (EIG) in connection with an agreement for the purchase of the 10.64% residual
minority share held by the South Eastern Europe Fund L.P. (SEEF), managed by the Greek
investment company Global Finance.
During the reporting period, the current assets increased significantly mainly due to the
increase of receivables from related parties by BGN 6.5 million and increased other
receivables by BGN 2.2 million .
EQUITY AND LIABILITIES
The total equity amounted to BGN 328.4 million, decreasing by the reported loss in the
first six months of the current year. For comparison, as at 31.12.2017, the equity of
Eurohold Bulgaria amounted to BGN 338 million.
The company's liabilities increased by 12% from BGN 219.9 million as at 31.12.2017
reached BGN 246.2 million.
For the period the non - current liabilities increased by 16.3% or BGN 27.8 million. The
growth of non - current assets is due to an increase in the amount of Eurobonds (EMTN
Program) from BGN 141.5 million to BGN 153.5 million, as well as due to the increase in
the amount of loans received from financial and non - financial institutions from BGN 21.1
million as of 31.12.2017 to BGN 37 million in the current period.
The current liabilities decreased by BGN 1.5 million to BGN 53.1 million as of the end of
reporting period. The bulk of current liabilities is current borrowings from financial and
non - financial institutions, as well as the current portion of debenture obligations. During
the reporting period total current liabilities on loans decreased by 5.4% to BGN 50.3
million, while as of 31.12.2017 they amounted to BGN 53.2 million .
DESCRIBTION OF THE KEY RISK FACTORS
1. Systematic risks
Influence of the global economic and financial crisis
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 ac cess 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, part icularly 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 div isions of the Group
and thus may also adversely affect the Group’s outlook, results and financial situation.
Risks related to the general macroeconomic, political and social situation, and
government policy
The macroeconomic situation and the growth rate i n 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
eleme nts 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 f unds
allocated for insurance coverage, car buying and leasing.
Political risk
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.
Sovereign credit risk
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.
Interim Management Report , 30 June 201 8
The ratings are supported by the low government debt and the moderate exter nal
indebtedness. The agency indicates as constraining factors the relatively low income - per -
capita levels and the weak institutional settings. Standard&Poor's estimates that the
financial sector continues to face important challenges, but notes that effor ts are underway
to mitigate risks, including an asset quality review in the banking system slated for 2016.
Inflation risk
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 oper ation, is seen as a significant factor in the Company.
Currency risk
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 i n 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 dete rmined 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
Interest rate risk is related to the p ossibility 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 g eneral 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 glo bal
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 eff orts. 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.
Interim Management Report , 30 June 201 8
2. Unsystematic risks
Risk relating to the business ope rations of the Company
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 mana gement, 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 co uld 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 Bulgar ia,
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 internat ional 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,
Rom ania 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 vo latility, 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 service s 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 ma nufacturers. The business
environment in the automotive industry could be dramatically impacted by purely internal
Interim Management Report , 30 June 201 8
drivers related to general purchasing power, access to lease - financing, general business
sentiment, inventory levels, etc.
Deterioration in t he 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 Grou p
as a whole.
Strategic development risks
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.
Eurohol d 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.
Risks related to the management of the company
The following risks are related to the management of the company:
Poor investment management and liquidity management decisions by either top
management or other senior employees;
Inability to launch and execute new projects under development;
Possible information syste m errors;
Possible external control failures;
Departure of key employees and inability to retain and hire qualified personnel;
Possible jump in SG&A expense, leading to shrinkage in overall margins and
profitability levels.
Financial risk
Financial risk i s 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 fi xed 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.
Interim Management Report , 30 June 201 8
Acceptable o r “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.
Currency risk
EuroHold operates in several Balkan cou ntries (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 t he 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 report s 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
Liquid ity 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 fro m 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 non - payment 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 t he 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
eit her in form of equity or debt.
Risk related to the possible transactions between companies in the group with
terms different from the market terms as well as related to the dependence on the
group activity
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 ar e 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
Interim Management Report , 30 June 201 8
is failing to realize enough revenues and therefore good profit for the releva nt 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. Al l 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 de pendant 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
expectatio ns of the investors about the perspectives of the company.
RISK MANAGEMENT
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:
Market share, pricing policy and marketing researches for the development of the
market and the market share;
Active management of investments in different sectors;
Comprehensive policy in asset and liabilities management aiming to optimize the
structure, quality and return on assets;
Optimization of the structure of raised funds aiming to ensure liquidity and decrease
of financial expenses for the group;
Effective management of cash flows;
Admini strative expenses optimization, management of hired services;
Human resources management.
Upon occurrence of unexpected events, the incorrect evaluation of current market
tendencies, as well as many other micro - and macroeconomic factors could impact the
j udgment 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 mana gement 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 stabil ity and a strong financial position despite the ongoing
crisis on the global financial markets.
Risk management in the Group aims to:
Interim Management Report , 30 June 201 8
identify potential events that could impact the Group’s operations in terms of
achieving business objectives and achieveme nt related risks;
manage risk so that the risk level complies with the risk appetite specified and
accepted by the Group;
ensure that the Group’s objectives are attained with a lower than expected risk
level.
INFORMATION FOR TRANSACTIONS BETWEEN RELATED PARTIES
IN THE FIRST SIX MONTHS OF 2018
There were no significant transactions between related parties during the reporting
period.
Date: 8 August 2018
Asen Minchev ,
Executive Member of the
Management Board
Management Board
Interim Consolidated Financial Statement s for H 1. 201 8
These Interim consolidated F inanc ial S tatements have been approved from the Board of Directors of Eurohold Bulgaria .
The notes are an integral part of the interim consolidated f inancial s tatement s for H 1.2018 . 1 5 Eurohold Bulgaria AD
Interim Consolidated S tatement of profit or loss
For the period ended June 30 , 2018
In thousand BGN Notes
30.6. 201 8 30.6. 201 7
Revenue from operating activities
Revenue from Insurance business
3
458 635 539 127
Revenue from car sales and after sales
5 127 243 91 801
Revenue from Leasing business
6
11 560 12 612
Revenue from asset management and brokerage
8
1 761 1 416
Revenue from the activities of the parent company
1 0
1 258 1 004
600 457 645 960
Expenses of operating activities
Expenses of I nsurance business
4
(423 076) (508 700)
Cost of cars and spare parts sold
(114 610) (80 553)
E xpenses of Leasing business
7
(1 817) (1 968)
E xpenses of asset management and brokerage
9
(1 298) (957)
E xpenses of the activities of the parent company
1 1
(51) (732)
(540 852) (592 910)
Gross Profit
59 605 53 050
Other income/ ( expenses ), net
1 2
(2 644) (4 461)
Other operating expenses
1 3
(37 605) (31 265)
EBITDA
19 356
17 324
Financial expenses
1 4
(11 259) (9 444)
Financial income
1 5
41 316
Foreign exchange gains/losses , net
18
944 7
EBTDA
9 08 2
8 203
Depreciation and amortization
1 6
(5 001) (4 118)
EBT
4 081
4 085
Tax expenses
1 7
(2) (159)
Net income for the period
4 079 3 926
Attributable to:
Equity holders of the parent
1 938 2 011
Non - controlling interests
2 141 1 915
Prepared by : Signed on behalf of BoD : Procurator:
/ I. Hristov / /А . Minchev / /H.Stoev/
31.7. 2018
Interim Consolidated Financial Statement s for H 1. 201 8
These Interim consolidated F inanc ial S tatements have been approved from the Board of Directors of Eurohold Bulgaria .
The notes are an integral part of the interim consolidated f inancial s tatement s for H 1.2018 . 1 5
Eurohold Bulgaria AD
Interim Consolidated Statement of Other Comprehensive I ncome
For the period ended June 30 , 2018
In thousand BGN
Notes
30.6. 201 8 30.6. 201 7
Profit for the period
4 4
4 079 3 926
Other comprehensive income
Other comprehensive income to be reclassified to profit or loss in
subsequent periods :
Net (loss)/gain on financial assets available - for - sale
184 46
Exchange differences on translating foreign operations
1 234 (392)
Other comprehensive income for the period , net of tax
1 418 (346)
Total compr ehensive income for the period , net of tax
5 497 3 580
Attributable to:
Equity holders of the parent
3 235 1 715
Non - controlling interests
2 262 1 865
5 497 3 580
Prepared by : Signed on behalf of BoD : Procurator:
/ I. Hristov / /А . Minchev / /H.Stoev/
31.7. 2018
Interim Consolidated Financial Statement s for H 1. 201 8
These Interim consolidated F inanc ial S tatements have been approved from the Board of Directors of Eurohold Bulgaria .
The notes are an integral part of the interim consolidated f inancial s tatement s for H 1.2018 . 1 5 Eurohold Bulgaria AD
Interim Consolidated Statement of Financial Position
As at June 30 , 2018
In thousand BGN
Notes
30.6. 2018 31.12.201 7
ASSETS
Cash and cash equivalents
19
47 581
45 945
Deposits at banks
2 0
14 445
11 171
*71
Reinsurers’ share in technical reserves
21.1
383 818
361 247
Insurance receivables
2 1 .2
85 202
87 941
Trade receivables
2 2
31 489
27 474
Other receivables
2 3
34 844
30 822
*71
Machi nery , plant and equipment
2 4 , 2 4 .2 - 5
51 516 44 630
Intangible assets
2 6
2 276 2 198
Inventory
27
51 461 59 125
Financial assets
28
302 365 327 053
Deferred tax assets
29
13 171 13 184
*71
Land and buildings
2 4 , 2 4 .1
1 9 618 20 090
Investment property
2 5
13 259 12 698
Investments in associates and other investments
3 0
7 646 4 724
Other financial investments
3 1
2 395 2 391
Non - current receivables
3 2
107 616 85 908
*71
Goodwill
3 3
189 813 189 813
TOTAL ASSETS
1 358 515 1 326 414
Interim Consolidated Financial Statement s for H 1. 201 8
These Interim consolidated F inanc ial S tatements have been approved from the Board of Directors of Eurohold Bulgaria .
The notes are an integral part of the interim consolidated f inancial s tatement s for H 1.2018 . 1 5 Eurohold Bulgaria AD
Interim Consolidated Statement of Financial Position (continued)
As at June 30 , 2018
In thousand BGN
Notes
30.6. 2018 31.12.201 7
EQUITY AND LIABILITIES
Equity
Issued capital
43 .1
197 526 197 526
Treasury shares
43 .1
(6 077) (77)
Share Premium
43.2
49 568 49 568
General reserves
7 641 7 641
Revaluation and other reserves
(48 568) (57 203)
Retained earnings /(losses)
(27 54 8) (44 825)
Profit for the year
44
1 938 18 174
Equity attributable to equity holders of the parent
174 480 170 804
Non - controlling interests
4 5
42 027 43 702
Total equity
216 507 214 506
Subordinated debts
34
28 058 26 058
LIABILITIES
B ank and non - bank loans
3 5
116 610 99 245
Obligations on bond issues
3 6
163 267 150 757
Non - current liabilities
3 7
31 534 30 087
Current liabilities
38
22 245 25 587
Trade and other payables
39
85 776 102 192
Payables to reinsur ers and from direct insurance
4 0
64 305 81 863
Deferred tax liabilities
4 1
251 284
483 988 490 015
Insurance reserves
4 2
629 962 595 835
629 962 595 835
Total liabi lities and subordinated debts
1 142 008 1 111 908
TOTAL EQUITY AND LIABILITIES
1 358 515 1 326 414
Prepared by : Signed on behalf of BoD : Procurator:
/ I. Hristov / /А . Minchev / /H.Stoev/
31.7. 2018
Interim Consolidated Financial Statement s for H 1. 201 8
These Interim consolidated F inanc ial S tatements have been approved from the Board of Directors of Eurohold Bulgaria .
The notes are an integral part of the interim consolidated f inancial s tatement s for H 1.2018 . 1 5 Eurohol d Bulgaria AD
Interim Consolidated Statement of Cash Flows
For the period ended June 30 , 2018
In thousand BGN
Notes
30.6. 201 8 30.6. 201 7
Cash flow s from operating activities
Profit for the period before tax:
4 081
4 085
Adjustments for:
Depreciation
16
5 001
4 118
Foreign exchange gain/loss
(21)
90
Impairment of assets
45
52
Interest expense
12 590
10 987
Interest revenue
(5 762)
(6 227)
Dividend revenue
(113)
(159)
Other non - cash adjustments
(4 980)
(4 511)
Operating profit before change in working capital
10 841
8 435
Change in trade and other receivables
17 273
(69 145)
Change in inventory
7 677
3 162
Change in trade and other payables and other adjustments
(5 065)
82 817
Cash generated from operating activities
30 726
25 269
Interest ( paid ) /received
149
1 149
Income tax paid
(468)
(585)
Net cash flows from operating activities
30 407
25 833
Investing activities
Purchase of property, plant and equipment
(4 228)
(2 204)
Proceeds from the disposal of property, plant and equipment
1 249
3 882
Loans granted
(23 064)
(2 322)
Repayment of loans, including financial leases
18 549
9 144
Interest received on loans granted
781
296
Purchase of investments
(110 313)
(295 308)
Sale of investments
76 835
288 925
Dividends received
49
188
Effect of exchange rate changes
121
1 099
Other proceeds/ ( payments ) from investing activities , net
(1 819)
(483)
Net cash flow s from investing activities
(41 840)
3 217
Interim Consolidated Financial Statement s for H 1. 201 8
These Interim consolidated F inanc ial S tatements have been approved from the Board of Directors of Eurohold Bulgaria .
The notes are an integral part of the interim consolidated f inancial s tatement s for H 1.2018 . 1 5 Eurohold Bulgaria AD
Interim Consolidated Statement of Cash Flows (continued)
For the period ended June 30 , 2018
In thousand BGN
Notes
30.6. 201 8 30.6. 201 7
F inancing activities
Proceeds f rom issuance of shares
-
34 000
Proceeds from loans
133 957
216 438
Repayment of loans
(106 136)
(227 786)
Repayment of financial leases
(8 916)
(5 274)
Payment of interest, charges , commissions on investment loans
(6 716)
(3 471)
Dividends paid
(244)
-
Other proceeds/ ( payments ) from financing activities , net
1 124
(352)
Net cash flow s from financing activities
13 069
13 555
Net increase (decrease) in cash and cash equivalents
1 636
42 605
C ash and cash equivalents at the beginning of the year
19
45 945
100 948
C ash and cash equivalents at the end of the year
19
47 581
143 553
Prepared by : Signed on behalf of BoD : Procurator:
/ I. Hristov / /А . Minchev / /H.Stoev/
31.7. 2018
Interim Consolidated Financial Statement s for H 1. 201 8
These Interim consolidated F inanc ial S tatements have been approved from the Board of Directors of Eurohold Bulgaria .
The notes are an integral part of the interim consolidated f inancial s tatement s for H 1.2018 . 1 5 Eurohold Bulgaria AD
Interim Consolidated Statement of Changes in Equity
For the period ended June 30 , 2018
In thousand BGN
Share
capital Share
premium
Retained
earnings /
(losses) Equity
attributable
to equity
holders of
the parent Non -
controlling
interest s Total
equity General
reserves Revaluation
and other
reserves
Balance as at 1 January 201 7 124 399 39 736 7 641 (56 477) (36 185) 79 114 36 145 115 259
Issue of share capital 7 0 181 10 854 - - - 81 035 - 81 035
Dividends - - - - (1 613) (1 613) (4 9 0) (2 103)
Treasury shares 2 869 (1 022) - - - 1 847 - 1 847
Change in non - controlling interest s
without change in cont rol - - - 481 (7 027) (6 546) 1 684 ( 4 862 )
Profit for the year - - - - 18 174 18 174 6 241 24 415
Other comprehensive income :
Exchange differences on translating
foreign operations - - - (734) - (734) 135 (599)
Change in the fair value of financial
assets available - for - sal e - - - (473) - (473) (13) (486)
Total other comprehensive income - - - (1 207) - (1 207) 122 (1 085)
Total comprehensive income - - - (1 207) 18 174 16 967 6 363 23 330
Balance as of 31 December 201 7 197 44 9 49 568 7 641 (57 203) (26 651) 170 804 43 702 214 506
Balance as at 1 January 201 8 197 449 49 568 7 641 (57 203) (26 651) 170 804 43 702 214 506
Treasury shares (6 000) - - - - (6 000) - (6 000)
Dividends - - - - (1 800) (1 800 ) (244) (2 044)
Change in non - controlling interest s
without change in control - - - 7 338 903 8 241 (3 693) 4 548
Profit for the period - - - - 1 938 1 938 2 141 4 079
Other comprehensive income :
Exchange differences on translating
foreign op erations - - - 1 100 - 1 100 134 1 234
Change in the fair value of financial i
assets available - for - sale - - - 197 - 197 (13) 184
Total other comprehensive income - - - 1 297 - 1 297 121 1 418
Total comprehensive income - - - 1 297 1 938 3 235 2 262 5 497
Balance as of 30 June 2018 19 1 449 49 568 7 641 (48 568) (25 610) 174 480 42 027 216 507
Prepared by : Signed on behalf of BoD : Procurator:
/ I. Hristov / /А . Minchev / /H.Stoev/
31.7. 2018
Interim Consolidated Financial Statement s for H 1. 201 8
These Interim consolidated F inanc ial S tatements have been approved from the Board of Directors of Eurohold Bulgaria .
The notes are an integral part of the interim consolidated f inancial s tatement s for H 1.2018 . 1 5 Consolidated statement of profit or loss by Business Segments
For the period ended June 30 , 2018
In thousand BGN
30.6. 2018 30.6. 2018 30.6. 2018 30.6. 2018 30.6. 2018 30.6. 2018 30.6. 2018
Notes Consolidated Insuran ce
business Automo tive Leasing
business Asset
manage -
ment and
brokerage Parent
company Elimination
Revenues from operating activities
Revenue from Insurance business
3 458 635 459 396 - - - - (761)
Revenue from car sales and after sales
5 127 243 - 131 630 - - - (4 387)
Revenue from Leasing business
6 11 560 - - 12 261 - - (701)
Revenue from asset management and
brokerage
8 1 761 - - - 2 138 - (377)
Revenue from the activities of the parent
company
10 1 258 - - - - 1 834 (576)
600 457 459 396 131 630 12 261 2 138 1 834 (6 802)
Expenses of operating activities
Expenses of I nsurance business
4 (423 076) (426 828) - - - - 3 752
Cost of cars and spare parts sold
(114 610 ) - (114 628) - - - 18
E xpenses of Leasing business
7 (1 817) - - (1 998) - - 181
E xpense s of asset management and
brokerage
9 (1 298) - - - (1 299) - 1
E xpenses of the activities of the parent
company
11 (51) - - - - (51) -
(540 852) (426 828) (114 628) (1 998) (1 299) (51) 3 952
Gross Profit
59 605 32 568 17 002 10 263 839 1 783 (2 850)
Other income/ ( expenses ), net
12 (2 644) - - (3 446) 19 - 783
Other operating expenses
13 (37 605) (18 876) (13 911) (4 073) (785) (943) 983
EBITDA
19 356 13 692 3 091 2 744 73 840 (1 084)
Financial expenses
14 (11 259) (1 179) (1 401) - - (9 560) 8 81
Financial income
15 41 - 47 - - - (6)
Foreign exchange gains/losses , net
18 944 - - - - 944 -
EBTDA
9 082 12 513 1 737 2 744 73 (7 776) (209)
Depreciation and amortization
16 (5 001) (979) (1 342) (2 634) (35) (11) -
EBT
4 081 11 534 395 110 38 (7 787) (209)
Taxes
17 (2) - - - (2) - -
Net income for the period
4 079 11 534 395 110 36 (7 787) (209)
Consolidated statement of profit or loss by Business Segments
For the period e nded June 30 , 201 7
In thousand BGN
30.6. 2017 30.6. 2017 30 .6. 2017 30.6. 2017 30.6. 2017 30.6. 2017 30.6. 2017
Notes Consolidated Insurance
business Automo tive Leasing
business Asset
manage -
ment and
brokerage Parent
company Elimination
Revenues from operating activities
Revenue from Insurance bus iness
3 539 127 540 003 - - - - (876)
Revenue from car sales and after sales
5 91 801 - 95 349 - - - (3 548)
Revenue from Leasing business
6 12 612 - - 1 3 113 - - (501)
Revenue from asset management and
brokerage
8 1 416 - - - 1 931 - (515)
Revenue from the activities of the parent
company
10 1 004 - - - - 2 627 (1 623)
645 960 540 003 95 349 13 113 1 931 2 627 (7 063)
Expenses of operating activities
Expenses of I nsurance business
4 (508 700) (511 794) - - - - 3 094
Cost of cars and spare parts sold
(80 553) - (80 562) - - - 9
E xpenses of Leasing business
7 (1 968) - - (2 082) - - 114
E xpenses of asset management and
brokerage
9 (957)
- - - (958) - 1
E xpenses of the activities of the parent
company
11 (732) - - - - (813) 81
(592 910) (511 794) (80 562) (2 082) (958) (813) 3 299
Gross Profit
53 050 28 209 14 787 11 031 973 1 814 (3 764)
Other income/ ( expenses ), net
12 (4 461) - - (5 154) - - 693
Other operating expenses
13 (31 265) (14 978) (11 708) (3 699) (772) (960) 852
EBITDA
17 324 13 231 3 079 2 178 201 854 (2 219)
Financial expenses
14 (9 444) (1 196) (1 604) - - (8 335) 1 691
Financial income
15 316 - 327 - - - (11)
Foreign exchange gains/losses , net
18 7 - - - - 7 -
EBTDA
8 203 12 035 1 802 2 178 201 (7 474) (539)
Depreciation and amortiza tion
16 (4 118) (672) (1 358) (2 056) (28) (4) -
EBT
4 085 11 363 444 122 173 (7 478) (539)
Taxes
17 (159) (147) (10) - (2) - -
Net income for the period
3 926 11 216 434 122 171 (7 478) (539)
Interim Consolidated Financial Statement for H1. 201 8
22 Notes to the Interim Consolidated
Financial Statements for H 1.2018
Found in 1996, Eurohold Bulgaria AD operates in Bulgaria, Romania and
Macedonia. The company is an owner of a great number of subsidiaries in the
insurance, financial service and car sa le sectors.
1. DETAILS ABOUT THE ECONOMIC
GROUP
Eurohold Bulgaria AD (parent company) is a
public joint stock company established by virtue
of article 122 of the Public Offering of Securities
Act and article 261 of the Commerce Act.
The parent company is registered in Sofia City
Court under corporate file 14436/2006 and is
established by merger of Eurohold AD registered
under corporate file № 13770/1996 as per the
inventory of Sofia City Court and Starcom
Holding AD registered under corporate file №
633 3/1995 as per the inventory of Sofia City
Court.
The seat and registered address of Eurohold
Bulgaria AD are as follows: city of Sofia, 43
Christopher Columbus Blvd.
The parent company has the following managing
bodies: General Meeting of Shareholders,
Supervisory Board /two - tier system/ and
Management Board, with the following members
as at 30.6. 201 8 :
Supervisory Board:
Assen Milkov Christov – Chairman;
Dimitar Stoyanov Dimitrov – Deputy Chairman;
Radi Georgiev Georgiev – Member;
Kustaa Lauri Ayma – In dependent member;
Lyubomir Stoev – Indendent member.
Management board:
Kiril Ivanov Boshov - Chairman, Executive
Member;
Assen Mintchev Mintchev – Executive Member;
Velislav Milkov Hristov – Member;
Assen Emanouilov Assenov – Member;
Dimitar Kirilov Dimit rov – Member;
Razvan Stefan Lefter – Member. As at 30.6. 201 8 , the Company is represented and
managed by Kiril Ivanov Boshov and Assen
Mintchev Mintchev – Executive Members of the
Management Board, and Hristo Stoev –
Procurator, jointly by the one of the e xecutive
members and the Procurator of the Company.
1.1 Scope of activities
The scope of activities of the parent company is
as follows: acquisition, management, assessment
and sales of participations in Bulgarian and
foreign companies, acquisition, man agement and
sales of bonds, acquisition, assessment and sales
of patents, granting patent use licenses to
companies in which the parent company
participates, funding companies, in which the
parent company participates .
1.2 Structure of the economic group
The investment portfolio of Eurohold Bulgaria AD
comprises three economic sectors: insurance,
finance and automobile. The insurance sector has
the biggest share in the holding’s portfolio, and
the automobile sector is the newest line.
Companies involve d in the consolidation and
percentage of participation in equity
Insurance Sector
Company % of
participation in
the share capital
30.6. 201 8 % of
participation in
the share capital
201 7
Euroins Insurance Group AD *
90 . 74 % 89.36%
Indirect participation thr ough EIG AD :
Insurance Company Euroins AD 98.2 2 % 98.21%
Euroins Romania Insurance AD 98.50 % 98.50 %
Euroins Insurance AD Macedonia 93 . 36 % 93 . 36 %
Euroins Life Insurance EAD 100 .00% 100 .00%
Insurance Company EIG Re AD 100 .00% 100 .00%
Euroins Ukraine AD 98.32% 98.32%
* direct participation
Interim Consolidated Financial Statement for H1. 201 8
23
Finance Sector
Company % of
participation in
the share capital
30.6. 201 8 % of
participation in
the share capital
201 7
Euro Finance AD *
99.99% 99.99%
Eurolease Group EAD * 100.00% 100.00%
Indirect participatio n through
Eurolease Group EAD :
Eurolease Auto EAD 100.00% 100.00%
Eurolease Auto Romania AD 77.98% 77.98%
Eurolease Auto Romania AD through
Euroins Romania Insurance AD 22.02 % 22.02 %
Eurolease Auto DOOEL, Macedonia 100.00% 100.00%
Eurolease Rent A Car EOOD 100.00% 100.00%
Eurolease Auto Retail EAD 100.00% 100.00%
Autoplaza EAD 100.00% 100.00%
Sofia Motors EOOD 100.00% 100.00%
* direct participation
In 2017 the company Eurolease Auto Retail EAD
was established.
Automobile Sector
Company % of
pa rticipation in
the share capital
30.6. 201 8 % of
participation in
the share capital
201 7
Auto Union AD * 99.99% 99.99%
Indirect participation through AU
AD:
Bulvaria Varna EOOD 100.00% 100.00%
N Auto Sofia AD 100.00% 100.00%
Espas Auto through N Aut o Sofia
EAD
51.00%
51.00%
EA Properties EOOD
51.00% 51.00%
Daru Car AD
99.84% 99.84%
Auto Italia EAD
100.00% 100.00%
Bulvaria Holding EAD
100.00% 100.00%
Sofia Auto Bulvaria OOD
51 .00% -
Star Motors EOOD
100.00% 100.00%
Star Motors DOOEL , Macedonia
through Star Motors EOOD
100.00% 100.00%
Star Моторс SH.P.K. through Star
Motors EOOD
100.00%
100.00%
Auto Union Service EOOD
100.00% 100.00%
Motobul EAD
100.00% 100.00%
Bopar Pro S.R.L., Romania through
Moto bul EOOD
99.00% 99.00%
* direct participation 2. SUMMARY OF THE GROUP’S
ACCOUNTING POLICY
2.1 Basis for Preparation of the Financial
Statement
The interim consolidated financial statements of
Eurohold Bulgaria AD are prepared in compliance
with all Int ernational 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 and are adopted by the
Commission of the European Union .
The Group has considered all standards and
interpretations applicable to its activity as at the
date of preparation of the present financial
statement .
The interim consolidated financial statement is
draft ed in compliance with the historic cost
principle , excluding those financial instruments
and financial liabilities, which are measured at fair
value . The report are drafted in accordance with
the principle of going concern, which assumes
that the company w ill continue to operate in the
near future.
2.2 Comparative Data
The group keeps on presenting the information in
the financial statements during the periods.
Whenever needed, comparative data are
reclassified in order to achieve comparability
between t he changes in the presentation for the
current year.
2.3 Consolidation
Consolidated financial statements comprise
consolidated statement of financial position,
consolidated statement of profit or loss,
consolidated statement of other comprehensive
inco me, consolidated statement of cash flows and
consolidated statement of changes in equity as at
30.6. 201 8 .
Interim Consolidated Financial Statement for H1. 201 8
24 These statements comprise the holding – parent
company and all subsidiaries. A subsidiary is
consolidated by the parent company through the
direct or indirect holding of more than 50% of the
voting shares in the capital or through the ability
to manage its financial and operational policy for
the purposes of obtaining economic benefits from
its operations.
The method of full consolidation is applied.
Statements are aggregated line by line, and items
such as assets and liabilities, properties, income
and expenses are summed up. All internal
transactions and balances between the group
companies are eliminated. Opposing elements:
equity, financial, trade, calculation of goodwill as
at the date of acquisition, are eliminated.
Non - controlled participation in the net assets of
subsidiaries is defined in accordance with the
shareholding structure of such subsidiaries as at
the date of the consolidated stateme nt of financial
position.
With regard to business combinations
comprising group entities or business subject to
joint control, the Group has chosen to apply the
purchase method in accordance with IFRS 3 –
Business Combinations. The Group has chosen
the ac counting policy with regard to these
transactions, as for the time being they do not
fall within the scope of application of IFRS 3 and
the existing IFRSs do not provide any guidance
to this effect. In accordance with IAS 8, when
there is no standard or in terpretation that are
particularly application to an operation, another
vent or condition, the management uses its own
judgments to develop and apply the accounting
policy.
Principles of Consolidation
Business combinations are accounted by using the
purc hase method. This method requires the
investor to recognize the acquired identifiable
assets, undertaken liabilities and the participation,
which is not a control in the investee, separately
from the goodwill as at the date of acquisition.
Expenses that ar e directly related to the acquisition
are stated in the statement of profit or loss for the
period.
Acquired identifiable assets and undertaken
liabilities and contingent liabilities in a business
combination are measured at fair value at the date of acqu isition, irrespective of the level of non -
controlled participation. The Group is able to
measure participations, which are not control in the
investee either at fair value, or as a proportionate
share in the identifiable net assets of the investee.
The ex cess of the acquisition price over the share
of the investor in the net fair value of identifiable
assets, liabilities and contingent liabilities of the
investee is stated as goodwill. In case the
acquisition price is less than the investor’s share
in the fair value of the net assets of the company,
the difference is recognised directly in the
consolidated statement of profit or loss.
Separately recognised goodwill with regard to the
acquisition of subsidiaries is always tested for
impairment at least once a year. Goodwill
impairment losses are not subsequently
reimbursed. Profits or losses from sale (disposal)
of a subsidiary by the Group also comprise the
book value of the goodwill deducted for the sold
(disposed) company.
R ecognised goodwill is affiliat ed to a specific cash
inflow generating unit yet at the realization of a
business combination, and such unit is applied for
the impairment tests. When defining the cash flow
generating units, the Group takes into account
the units that have been expected t o generate
future economic benefits upon the acquisition
through the business combination, and with
regard to which the goodwill has occurred.
Non - controlling participation transactions
The Group treats the operations with non -
controlling participation as transactions with
entities holding Group’s equity instruments. The
effects from sale of shares of the parent
company, without losing control, to the holders of
non - controlling participations are not treated as
elements of the current profit or loss of the
Group, but as movement within the components
of its equity. And vice versa, upon purchases by
the parent company, without acquiring control, of
additional shares in the participation of holders of
non - controlling participations, every difference
between t he amount paid and the respective
acquired share from the book value of the
subsidiary’s net assets is recognised directly in
the consolidated statement of equity, usually as
“retained earnings/ (non - covered loss)”.
Interim Consolidated Financial Statement for H1. 201 8
25
When the Group does not have control and
significant influence any more, every minority
investment remaining as a share in the capital of
the respective company is revaluated at fair
value, and the difference up to the book value is
recognised in the current profit or loss, whereas
all amount s recognised before in other elements
of the comprehensive income, are stated as like
as for operation of direct disposal of all associated
to the initial investment (in the subsidiary or
associate), respectively.
2.4 Functional and Reporting Currency
T he Bulgarian Lev (BGN) is the functional and
reporting currency of the group. Data presented
in the consolidated statements and the annexes
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
exchang e rate of the Bulgarian National Bank on
the last working day of the year.
2.5 Accounting Assumptions and Accounting
Estimates
Upon preparing the financial statement in
compliance with IAS, the management of the
Group is required to apply accounting esti mates
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 .
Deferred tax assets
Tax loss
The assessment of probability for future taxable
income for the utilisation of deferred tax assets is
based on the last approved budget forecast
adjusted with regard to m aterial untaxable
income and expenses and specific restrictions for
carrying forward unused tax losses or credits.
If a reliable estimate for taxable income suggests
the probable use of deferred tax asset, in
particular in case the asset may be used wi thout
time limit, then the deferred tax asset is
recognised in full. The recognition of deferred tax
assets that are subject to specific legal or
economic restrictions or uncertainty should be
judged by the management on case by case basis
on the grounds o f specific facts and
circumstances.
Inventories – Impairment
As at the end of the reporting period, the
management reviews the available inventories –
supplies, goods, in order to identify if there are
inventories whose net realizable value is less than
their book value. No indications for impairment of
inventories have been found during the review as
at 30.6. 201 8 .
Impairment of property, plant, machinery
and equipment
In accordance with the requirements of IAS 36, as
at the end of the reporting period the
management judges if there are indications that
the value of an asset within the property, plant
and equipment is impaired. In case such
indications exist, the replacement cost of this
asset is measured and the impairment loss is
calculated. As at 30. 6. 201 8 , no impairment of
property, plant, machinery and equipment has
been stated.
Actuarial valuations
When defining the current value of long - term
employee benefits upon retirement, calculations
of certified actuaries are used based on
assumptions for mortality, staff turnover rate,
future level of salaries and discount factor, which
assumptions are estimated by the management
as reasonable and appropriate for the Group.
Impairment of goodwill
The Group makes a test for impairment of
goodwill at least once a year. The refundable
amounts from cash generating units are defined
on the basis of their value in use or their fair
value, without calculation of the sale cost.
Interim Consolidated Financial Statement for H1. 201 8
26
Impairment of borrowings and receivables
The Group uses an adjustment account to re port
the impairment of difficultly collectible and
uncollectible receivables from counterparties. The
management judges the adequacy of this
impairment on the basis of age analysis of
receivables, previous experience about the level
of derecognition of unc ollectible receivables, and
analysis of the counterparty’s solvency,
amendments of contractual payment terms and
conditions, etc. If the financial position and
performance of the counterparties become worse
than the expected, the value of receivables that
should be derecognised during the next reporting
periods may be higher than the one expected as
at the reporting date.
Fair value of financial instruments
The management uses techniques to measure the
fair value of financial instruments if here are no
quoted prices at active market. Detailed
information about the assumptions used are
presented in the explanatory notes to the financial
assets and liabilities. When applying assessment
techniques, the management uses, to the
maximum extent, market data and assumptions,
that market stakeholders would adopt upon
assessing a financial instrument. In case there are
no applicable market data, the management uses
its best estimate of assumptions that the market
stakeholders would make. These assessments
may diffe r from the actual prices that would be
defined in an arm’s length transaction between
informed and willing parties at the end of the
reporting period.
2.6 Income
Group’s income is recognized on the accrual
basis and to the extent economic benefits are
o btained by the Group and as far as the income
may be reliably measured.
Upon sales of goods income is recognized when
all material risks and benefits from the title of
goods are transferred to the buyer.
Upon provision of services, income is recognized
c onsidering 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 income is recognized upon certifying
the right to obtain them.
In the consolidated statement of profit or loss,
dividends declared for the financial year by the
subsidiaries are recognised as intra - account and
are thus eliminated and are not taken in
consideration upon calculation of the financial
performance.
Euro hold Group generates financial income from
the following activities:
• Operations with investments;
• Dividends;
• Interests from granted loans.
2.7 Expenses
Group’s 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 Group companies, ng expenses that relate
to the administrative staff, officers, office
expenses, and other out sourcing.
Financial expenses include: expenses incurred in
relation to investment operations, losses from
financial instruments operations and currency
operations, expenses on interest under granted
bank loans and obligatory issues, as well as fees
and co mmissions.
Prepa id expenses (deferred 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 rela tion to the
main activity of the Group.
2.8 Interest
Interest income and expenses are recognised in
the consolidated statement of profit or loss using
the effective interest rate method. The effective
interest rate is the rate for discounting the
expect ed cash payments and proceeds during the
Interim Consolidated Financial Statement for H1. 201 8
27
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 a nd is
not adjusted subsequently.
The calculation of the effective interest rate
includes all received or paid commissions,
transaction costs, as well as discounts or
premiums, which are an integral part of the
effective interest rate.
Transaction costs a re the inherent costs directly
attributable to the financial asset or liability
acquisition, issue or derecognition.
Interest income and expenses stated in the
consolidated statement of profit or loss include:
interest recognized on the basis of effective
interest rate under financial assets and liabilities
carried at amortized value .
Unearned financial income (interest) is the
difference between the gross and net investment
in the lease, whereas the gross investment in a
lease is the amount of minimum le ase payments
and the non - guaranteed residual value charged
by the lessor. Interest income under lease
operations (financial income) is distributed for the
term o f validity of the lease and is recognised on
the basis of constant periodic rate of return of t he
lessor’s net investment.
2.9 Fees and commissions
Fee and commission income and expenses 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.
Oth er fee and commission income, including
logistic services fees, insurance and other
intermediation fees, is recognized upon providing
the respective services.
The other fee and commission costs relevant
mainly to banking services are recognized upon
recei pt of the respective services.
2.10 Reporting by segments
An operating segment is a component of the
Group, which deals with activities that can
generate income and incur expenses related to
transactions with any of the other Group’s
components.
Fo r management purposes, the Group is
organised in business units on the basis of the
products and services they offer and provide, and
includes the following segments subject to
reporting:
Insurance:
• Insurance services
Financial services:
• Lease services
• Investment intermediation
Automobiles:
• Sale of new cars
• Car repair services
• Rent - a - car
2.10.1 Insurance activities
Recognition and measurement of insurance
contracts
Non - life insurance premiums
Non - life insurance premiums are accounted on
annual basis . Gross written premiums under non -
life insurance are premiums under contracts for
direct insurance or co - insurance, which are
entered into during the year, although the
premiums may be fully or partially relate to a
later accounting period. Premiums are d isclosed
gross of commissions payable to brokers.
The earned part of written insurance premiums,
including for unexpired insurance contracts, is
recognised as income. Written insurance
premiums are recognised as at the date of
entering into the insurance contract.
Premiums paid to reinsurers are recognised as an
expense in accordance with the received
reinsurance services.
Health insurance premiums
Written health insurance premiums are recognised
as income on the basis of the annual premium
due by the in sured individuals for the premium
period beginning during the financial year, or the
lump - sum premium payable for the whole period
Interim Consolidated Financial Statement for H1. 201 8
28
of cover for one year health insurance contracts
entered into during the financial year.
Gross written premiums from heal th insurance are
not recognised when the future cash inflows
related thereto are uncertain. Written health
insurance premiums are stated gross of
commissions payable to agents.
Life insurance premiums
Written premiums from life insurance are
recognised as income on the basis of the annual
premium due by the insured persons for the
premium period beginning during the financial
year, or the lump - sum premium payable for the
whole period of cover for policies entered into
durin g the financial year .
Gross writ ten premiums from are not recognised
when the future cash inflows related thereto are
uncertain. Written premiums are stated gross of
commissions payable to agents .
Unearned premium reserve
Unearned premium reserve comprises that part of
written gross ins urance/ health insurance
premiums that is calculated to be earned during
the next or subsequent financial periods.
Unearned premium reserve comprises the
insurance premiums charged and recognised as
income during the reporting period, less ceded
premiums t o reinsurers, which should be
recognised during the next financial year or
during subsequent financial periods. The reserve
is calculated individually for each insurance/
health insurance contract by using a proportionate
method on daily basis. The unearne d premium
reserve is calculated net of commissions to
brokers, advertising and other acquisition costs.
Unexpired risk reserve
This reserve is established to cover risks for the
time between the end of the reporting period and
the date on which the respec tive insurance/
health insurance contract expires, in order to
cover payments and expenses that are expected
to exceed the established unearned premium
reserve .
Compensations incurred under non - life
insurance and health insurance and reserves
for pending claims
Compensations incurred with regard to non - life
insurance and health insurance comprise
compensations and their administration costs
payable during the financial year, together with
the change in the pending claims reserve.
The management believ es that the gross pending
claims reserve and the respective share of the
reinsurer’s reserve are presented fairly based on
the information available as at the date of the
consolidated financial statements. The final
liability will be changed as a result of subsequent
information and events and may require material
adjustment of the amount accrued initially.
Adjustments in the pending claims reserve found
during previous years are stated in the financial
statements for the period in which such
adjustments ha ve been made, and are disclosed
independently, if they are material. The methods
used and the assessments made for the accrual of
the reserve are subject to regular review.
Reinsurance
In its principal activity, Group’s insurance
companies cede risk to re insurers with view of
decreasing their potential net losses through risk
differentiation.
Reinsurance activity does not release the direct
obligations of the respective company to the
insured persons.
Reinsurance assets comprise the balance payable
by r einsurance companies for ceded insurance
liabilities. The amounts to be reimbursed by
reinsurers are calculated in a way similar to the
way for calculation of the reserves for pending
claims or for settled claims related to reinsurance
policies.
Premiums and claims related to these reinsurance
contracts are considered income and expenses in
the same way as they would be considered if
reinsurance was a direct activity, while taking into
account the classification of reinsurance business’
products.
Ceded (o r accepted) premiums and reimbursed
compensations (or paid claims) are stated in the
consolidated statement of profit or loss and the
consolidated statement of financial position as
gross amounts.
Contracts which cede material insurance risk are
accounted as insurance contracts. The amounts
refundable under these contracts are recognised
during the year of occurrence of the respective
claim.
Interim Consolidated Financial Statement for H1. 201 8
29
Premiums for long - term reinsurance contracts are
accounted in parallel with the term of validity of
the related i nsurance policies by using
assumptions similar to those for the accounting of
the respective policies.
The replacement cost of receivables under
reinsurance contracts is subject to impairment
review at each date of the consolidated statement
of financial position. Such assets are impaired if
there is objective evidence as a result of event
that has occurred after their initial recognition.
Deferred acquisition expenses
Deferred acquisition expenses are the amount of
acquisition expenses deducted upon calc ulating
the unearned premium reserve. They are defined
as that part of the acquisition costs under the
contracts valid as at the end of the period, which
are estimated as a percentage in the insurance
technical schedule and relevant to the time
between the end of the reporting period and the
date of expiration of the term of validity of the
insurance/ health insurance contract. Current
acquisition expenses are recognised in full as an
expense during the reporting period.
Acquisition expenses
Commission exp enses comprise charged broker’s
commissions, expenses for share in the result,
which are accrued in favour of the insured/ health
insured persons in case of low claims ratio.
Indirect acquisition costs comprise expenses for
advertising and expenses incurre d for entering
into/ renewal of insurance/ health insurance
contracts.
2.10.2 Lease activities
The lease activity of the Group is related to the
lease of motor vehicles and other industrial
equipment, real estates, etc. under financial and
operating leas e agreements.
Finance lease is an agreement by virtue of which
the lessor gives the lessee the right to use an
asset for an agreed time period for consideration.
The lease is reported as finance lease when the
lessor transfers with the agreement all subs tantial
risks and benefits related to the ownership of the
asset to the lessee.
Typical indicators reviewed by the Group to
identify whether all substantial risks and benefits
are transferred are as follows: present value of
minimum lease payments in c omparison to the
beginning of the lease; term of validity of the
lease in comparison to the economic life of the
leased asset; whether the lessee will acquire the
title of the leased asset at the end of the finance
lease term of validity. All other leases that do not
transfer substantially all risks and benefits of the
ownership of the asset are classified as operating
lease.
Minimum lease payments
Minimum lease payments are those payments
that the lessee will make or may be obliged to
make during the term of validity of the lease.
From Group perspective, minimum lease
payments also comprise the residual value of the
asset guaranteed by a third party not related to
the Group, provided such party is financially
capable to perform its engagements under the
gu arantee or the repurchase agreement. In the
m inimum lease payments, the Group also
comprises the price of exercising possible option
that the lessee has to purchase the asset,
whereas it is to a great exte n t certain at the
beginning of the lease that the o ption will be
exercised.
Minimum lease payments do not include amounts
related to conditional leases, as well as service
and tax expenses, which are paid by the Group
and are subsequently re - invoiced to the lessee.
Beginning of the lease and beginning of the
term of validity of the lease
There is a difference between the beginning of the
lease and the beginning of the term of validity of
the lease. The beginning of the lease is the earlier
than the two dat e s – of the lease agreement or
the parties’ bindi ng with the main conditions of
the lease. As at this date: the lease is classified as
finance or operating lease; and in case of finance
lease, the amounts that should be recognised at
the beginning of the term of validity of the lease
are defined. The beg inning of the term of validity
of the lease is the date on which the lessee may
exercise its right to use the leased asset. This is
also the date on which the Group initially
recognizes the receivable under the lease.
Interim Consolidated Financial Statement for H1. 201 8
30
Initial and subsequent measurement
Initially the Group recognizes receivable under
lease that is equal to its net investment, which
comprises the present value of minimum lease
payments and every non - guaranteed residual
value for the Group. The present value is
calculated by discounting th e minimum lease
payments due with an interest rate inherent to
the lease. Initial direct expenses are included in
the calculation of the receivable under finance
lease. During the term of validity of the lease, the
Group accrues financial income (interest income
from finance lease) over the net investment.
Receivables under finance lease
Received lease payments are considered a
decrease of the net investment (repayment of
principal) and recognition of financial income in a
way that ensures permanent rate o f return of the
net investment. Subsequently, the net investment
in financial leases is stated net, after offsetting
individual and portfolio provisions for
in collectibility.
2.10.3 Financial intermediation - related
activity
The financial intermediation a ctivity is related to
transactions with financial instruments. They are
classified as held for trading.
Financial instruments are measured upon
acquisition at cost, which comprises their fair
value plus all transaction - related expenses.
Financial instrum ents are subsequently measured
at fair value, which is the sales, stock exchange or
market price.
The Group states its financial assets in the
following way:
• Securities of Bulgarian issuers traded on BSE
– Sofia AD – the mean weighted price of the
transac tions they have made on regulated
market for the closest day of the last 30 - days’
period in which such securities have been
traded in an amount not less than the amount
of securities held by the subsidiary Euro -
Finance AD. If there is not transaction made,
the market price of the securities is defined on
the basis of the “ask” rate announced on the
regulated market for the respective session of
the closest day of the last 30 - days period;
• Shares in foreign currency of foreign issuers –
at market prices o f the foreign stock
exchanges: FRANKFURT, XETRA, NASDAQ;
• Government securities issued by the Bulgarian
government – the market price is the price
quoted by the Bulgarian National Bank or the
primary dealers of government securities
within the meaning of Or dinance № 5/ 1998;
• Securities issued by Bulgarian non -
governmental issuers – market price of
REUTERS;
• Securities issued and guaranteed by foreign
countries and securities issued by foreign non -
governmental issuers – market price of
REUTERS.
Derivatives
D erivatives are off - balance financial instruments
whose value is measured on the basis of interest
rates, foreign exchange rates, or other market
prices. Derivatives are effective means to manage
the market risk and to limit the exposure to
specific counter party.
Most frequently used derivatives are:
• Currency swap;
• Interest swap;
• Floors and caps;
• Forward currency and interest contracts;
• Futures;
• Options.
The conditions and time periods under the
contracts are defined by means of standard
documents.
With regard to derivatives, the same procedures
for control of market and credit risk are applied,
as for the other financial instruments. They are
aggregated with the other exposures for the
purposes of monitoring the general exposure to a
specific counterpart y and are managed within the
frames of the limits approved for the respective
counterparty.
Derivatives are held both for trading and as
hedging instruments used for the management of
the interest and currency risk. Derivatives held for
trading are measur ed at fair value and profits and
losses are stated in the consolidated statement of
profit or loss as a result of trade operations.
Interim Consolidated Financial Statement for H1. 201 8
31
Derivatives used as hedging instruments are
recognised in accordance with the accounting
treatment of the hedged item.
Cr iteria for recognition of a derivative as a
hedging instrument is the existence of
documented evidence for the intention to hedge a
specific instrument and such hedging instrument
should ensure reliable basis for elimination of the
risk.
When a hedged exp osure is closed, the hedging
instrument is recognised as held for trading at fair
value. The profit and loss are recognised in the
consolidated statement of profit or loss,
analogically to the hedged instrument.
Hedging transactions that are terminated be fore
the hedged exposure are measured at fair value
and the profit or loss are stated for the period of
existence of the hedged exposure .
2.11 Taxes
Income tax
The current tax includes the tax amount, which
should be paid over the expected taxable profi t
for the period on the basis of the effective tax
rate or the tax rate applicable on the day of
preparation of the consolidated statement of
financial position and all adjustments of due tax
for previous years.
Current income taxes of the Bulgarian Group
companies are defined in compliance with the
requirements of the Bulgarian tax legislation – the
Corporate Income Tax Act . The nominal tax rate
in Bulgaria for 201 8 is 10 % (201 7 : 10%).
The foreign subsidiaries are subject to taxation in
accordance with the requirements of the
respective tax legislations of the countries, with
the following tax rates :
Country Tax rate
201 8 201 7
Romania 16% 16%
Macedonia 10% 10%
Ukraine 18% 18%
Deferred tax
Deferred tax is calculated using the balance sheet
met hod for all temporary differences between the
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 th e asset or the settlement of the
liability. The effect from changes in the tax rates
on the deferred tax is reported in the consolidated
statement of profit or loss, except in cases when
it concerns amounts, which are earlier accrued or
reported directly i n equity.
Deferred tax asset is recognised only to the
amount to which it is expected to gain future
profits against which unused tax losses or tax
credit can be used. Deferred tax assets are
decreased in accordance with the decrease of the
probability fo r realisation of tax benefits.
As at 30.6. 201 8 , the deferred income taxes of the
Group companies are measured at a tax rate valid
for 2018, which is in the amount of 10% for the
Bulgarian companies, and for the foreign
companies it is as follows:
Country Tax rate for 2018
Romania 16%
Macedonia 10%
Ukraine 18%
2.12. Non - current assets
2.12.1 Property, plant, machinery and
equipment
Fixed tangible assets are measured at acquisition
cost, less the amount of accrued amortization and
possible impair ment losses.
The Group has fixed the value of 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.
Initial acqu isition
Fixed tangible assets are initially measured:
At acquisition cost , which includes: purchase price
(including duties and non - refundable taxes), all
direct costs for bringing the asset into working
condition according to its purpose – for assets
ac quired from external sources;
Interim Consolidated Financial Statement for H1. 201 8
32
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 acq uired 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 i n the profit or loss for the period.
Subsequent measurement
The Group has chosen the cost model under IAS
16 – historic price of acquisition, less accrued
amortisation and accumulated impairment losses,
as an approach for subsequent book value of
propert y, plant and equipment.
Subsequent expenses
Subsequent expenses for repairs and
maintenance are stated in the consolidated
statement of profit or loss at the time of
incurrence thereof, unless there is clear evidence
that their incurrence will result in i ncreased
economic benefits from the use of the asset. In
this case, these expenses are capitalized in the
carrying amount of the asset.
Sales profits and losses
Upon sales of fixed assets, the difference between
the book value and the sales price of the a sset is
reported as profit or loss in the consolidated
statement of profit or loss.
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 der ecognition thereof.
Amortisation methods
The Group applies the straight - line method of
amortization. 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:
Group of assets Useful life
in yea rs
Buildings 25 - 46
Plant and equipment 3 - 10
Vehicles 4 - 6
Fixtures and fittings 3 - 19
Computers 2 - 5
Impairment
The book values of fixed tangible assets are
subject to review for impairment, when events or
changes in circumstances have occurred, whi ch
evidence that the 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.
Impairmen t losses are recognised as an expense in
the consolidated statement of profit or loss during
the year of occurrence thereof.
2.12.2 Fixed intangible assets
Intangible assets are stated in the consolidated
financial statements at cost, less accrued
amorti sation and possible impairment losses.
The Group applies the straight - linear method for
amortisation of intangible assets with fixed useful
life of 5 - 7 years.
The book value of intangible assets is subject to
review for impairment when there are events o r
changes in circumstances that identify that the
book value could exceed their recoverable value.
2.12.3 Investment property
Investment property is a property that is held for
the purposes generating income from rent or
capital profit or both, but not f or sale in the
ordinary course of business of the Group, or for
use of services or administrative needs.
Interim Consolidated Financial Statement for H1. 201 8
33
Investment properties are measured on the basis
of present fair value, whereas each change is
stated as profit or loss .
2.13 Pension and other emp loyee benefits
under the labour and social legislation
Employment and social insurance relationships
with workers and employees in the Group are
governed by the provisions of the Labour Code
and the provisions of the applicable social
insurance legislatio n for the companies operating
in Bulgaria, of the Romanian Code – for the
companies in Romania, of the labour legislation
for the companies in Ukraine, of the labour
legislation for the companies in Macedonia .
Short - term employee benefits
Short - term empl oyee benefits are measured at
non - discounted basis and are stated as an
expense whent the related services are provided.
A liability is recongised for the amount that is
expected to be paid under a short - term bonus in
cash or profit sharing plans, provided the Group
has legal or constructive obligation to pay this
amount as a result of previous services provided
by an employee, and this obligation may be
reliably measured .
The Group recognises as an obligation the non -
discounted amount of measured expenses for paid
annual leave expected to be paid to the
employees in return of their service for the
previous reporting period .
Defined contribution plans
Defined contribution plan is a plan for post -
employment benefits in accordance with which
the Group pays c ontributions to another person
and does not have any legal or constructive
obligations to make further payments. The
Bulgarian government is responsible for providing
pensions under the defined contribution plans.
The group ’s engagement costs for transferr ing
contributions under defined contribution plans are
recognised currently in profit and loss .
Retirement benefits
Retirement benefits are recognised as an expense
when the Group has clear engagements, without
actual opportunity to withdraw, with an off icial
detailed plan either for termination of
employment relations before the normal
retirement date, or for payment of compensation
upon termination as a result of proposal for
voluntary retirement .
Benefits upon voluntary retirement are recognised
a s an expense if the Group has made an official
proposal for voluntary termination and the offer
would be probably accepted, and the number of
employees who has accepted the offer may be
reliably measured. If compensations are payable
for more than 12 month s after the end of the
reporting period, they are discounted up to their
present value .
2.14 Financial assets
2.14.1 Investments in non - current financial
assets
Entities in which the Group holds between 20%
and 50% of the voting right and have significa nt
influence but is not able to exercise control
functions, are considered associates .
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 stat ement 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 a mortized . The
consolidated statement of profit or loss presents
the results from the associate’s business. The
profit share is shown on the face side of the
statement .
2.14.2 Investments in Financial Instruments
Financial assets within the scope of IAS 3 9 are
classified as financial assets stated at fair value in
the profit or loss, as loans and receivables, held -
to - maturity investments, available - for - sale
financial assets or derivatives defined as hedging
instruments in effective hedge, where
appropriate . The Group classifies its financial
instruments at their initial recognition .
Financial assets of the Group include cash and
short - term deposits, trade and other receivables ,
financial instruments and financial instrument
derivatives quoted and unquoted on the stock
exchange .
Interim Consolidated Financial Statement for H1. 201 8
34
Cash
Cash comprise cash on hand, current accounts
and short - term deposits in banks with original
maturity of up to 3 moths .
Term deposits in banks
Bank deposits are receivables from banks from
invested free monetary resources i n the form of
term deposits with original maturity exceeding 3
months. Deposits are measured and stated in the
consolidated statement of financial position at
amortised cost .
Financial Assets at Fair Value in Profit or
Loss
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 - t o - Maturity
Investments held - to - maturity are financial assets ,
which are non - derivative and have fixed or
determinable payments and fixed maturity , that
the Group 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 i s
derecognized or impaired .
Loans and Other Receivables
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
acquisitio n 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 consolidated
statement of profit or loss, when derecognized
and impaired, as well as through the process of
amortisation .
Financial Assets Av ailable for Sale
Financial assets available for sale are non -
derivative 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 in itial 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 consolidated
statement of profit or loss .
Derivative financial instruments
Derivative financial instruments are classified a s
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 .
Interim Consolidated Financial Statement for H1. 201 8
35
2.15 Inventories
Supplies and goods are measured at deli very
value. Their value is equal to the sum of all
purchase costs as well as any other costs incurred
in relation to the delivery thereof at their current
location and condition .
Supplies and goods are derecognised at their
consumption at specifically de fined or mean
weighted value, depending on the segments .
The net realisable value of inventories is stated at
sales price, less the completion costs and the
expenses incurred for the realisation of the sale
and is defined with view of the marketing, moral
aging and development of expected sales prices .
When the carrying amount of inventories is higher
than their net realisable value, it is reduced to the
amount of the net realisable value. The decrease
is stated as other current expenses .
2.16 Short - term receivables
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 .
2.17 Liability provisions
Liability provisions include expected costs related
to obligations under guarantees , restructuring ,
etc ., as well as deferred tax assets .
2.18 Equity
Equity is presented at its nominal value pursuant
to the court decisions for its registrat ion .
Equity that is not held by the economic group
/non - controlled participation/ is part of the net
assets, including of the net result of the
subsidiaries for the year, which may be attributed
to participations that are not directly or indirectly
held b y the parent company .
2.19 Earning per share
The basic earnings per share are calculated by
dividing the net profit or loss for the period that is
subject to distribution among shareholders –
holders of ordinary shares, by the mean weighted
number of ordinary shares held during the period .
The mean weighted number of shares is the
number of ordinary shares held at the beginning
of the period adjusted with the number of
redeemed ordinary shares and the number of
newly issued shares multiplied by the av erage
time factor. Such factor expresses the number of
days in which the respective shares have been
held towards the total number of days during the
period .
Upon capitalisation, bonus issue or fractioning,
the number of outstanding ordinary shares until
the date of such event is adjusted to reflect the
proportionate change in the number of
outstanding ordinary shares as if the event has
occurred at the beginning of the earliest period
presented. Earnings per shares with decreased
value are not calculated as no potential shares
with decreased value are issued .
2.20 Liabilities
Financial liabilities are recognized during the loan
period with the amount of gained proceeds ,
principal , less the transaction expenses . During
subsequent periods financial liabi lities are
measured at amortized cost , equal to the
capitalized value , when applying the effective
interest rate method . In the consolidated
statement of profit or loss , loan expenses are
recognized during the loan term period .
Current liabilities , such as payables to suppliers ,
group and associate s and other payables , are
measured at amortized cost , which is usually
equal to the nominal value .
Deferred income recognised as liabilities comprise
received payments in terms of income for
subsequent years .
Interim Consolidated Financial Statement for H1. 201 8
36
2.21 Financial Risk Management
Factors Determining Financial Risk
While operating, the Group companies are exposed
to diverse financial risks : market risk ( including
currency risk , risk from change of financial
instrument fair value under the impact o f 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 Group ’s financial result .
Currency risk
The Group is exposed to currency risk through
payments in foreign currency and through its
assets and liabilities, which are denominated in
foreign currency . As a r esult of exposures in
foreign currency, profits and losses are generated
which are stated in the consolidated statement of
profit or loss. These exposures are the monetary
assets of the Group which are not denominated in
the currency used in the financial statements of
the local companies .
In case the local currency is exposed to a
significant currency risk, its management is
achieved through investments in assets
denominated in euro .
Interest risk
The Group is exposed to interest risk in relation to
the used trade loans, as some of the received
borrowings have floating interest rate agreed as a
base interest (EURIBOR/LIBOR) increased with a
specific margin. Borrowings with floating interest
rates are denominated in euro. The amount of
interest rates is de scribed in the respective notes .
Credit risk
The credit risk if the Group is mainly related to
the trade and financial receivables .
The amounts stated in the consolidated statement
of financial position are on net basis, excluding
the provisions for doub tful receivables determined
as such by the management on the basis of
previous experience and current economic
conditions .
Liquidity risk
Liquidity risk is the risk that the Group may
encounter difficulties in servicing its financial
obligations when th ey 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
bet ween continuity and flexibility of financial
resources by using adequate forms of funding .
The management is responsible for managing the
liquidity risk and involves maintaining enough
cash available, arranging adequate credit lines,
preparation of analy sis and update of cash flows
estimates .
2.22 Measuring Fair Values
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 v alue measurement is based on the
presumption that the transaction to sell the asset
or transfer the liability takes place either :
• on the principal market for the asset or
liability ; or
• i n 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 Group .
A fair value measurement of a non - financial asset
takes into account a market participant's ability to
generate economic benefits by using the asse t 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 Group 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 consolidated
financial statements , are categorized within the
Interim Consolidated Financial Statement for H1. 201 8
37
fair value hierarchy, described as follows based on
the lowest level input that is significant to the fair
value measurement as a whole :
• Level 1 — Quoted (unadjusted) market prices
in active markets for identical assets or
liabilities the entity m ay have access to as at
the date of measurement ;
• Ниво 2 – Valuation techniques for which the
lowest level input that is significant to the fair
value measurement is directly or indirectly
observable ;
• Level 3 — Valuation techniques for which the
lowest level input that is significant to the fair
value mea surement is unobservable .
External valuers are involved for valuation of the
fair value of significant assets, such as goodwill
and investment property .
2.23 Cash flows
Consolidated statement of cash flows shows the
cash flows of the Group for the year in relation to
the operating, invenstment 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 r esult
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 a nd 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 .
3. Revenue from insurance business 30.6. 201 8 30.6. 2017
BGN ‘000 BGN ‘000
Gross premiums written from ins urance 299 137 359 134
Received recoveries from reinsurers 74 229 69 290
Positive change in the gross provision for unearned premiums and
unexpired risk reserve 6 754 66
Positive change in reinsurers’ share in unearned premium reserve 5 218 40 780
Change in the r einsurers’ share in other reserves 17 433 6 117
Positive change in other technical reserves - 7 724
Recourse income 4 747 3 111
Fees and commissions income 19 966 30 645
Investment income 14 239 18 594
Other revenue 16 912 3 666
458 635 539 127
Interim Consolidated Financial Statement for H1. 201 8
38
4. Expenses of insurance business
30.6. 201 8 30.6. 2017
BGN ‘000 BGN ‘000
Current year paid claims, claims handling and prevention expenses (192 211) (172 753)
C hange in the gross provision for unearned pr emiums and unexpired
risk reserve (11 128) (60 559)
Share of reinsurers in the change of the unearned premium reserve - (6)
Change in other reserves (29 778) (9 195)
Change in the reinsurers’ share in the other reserves - (5 089)
Premiums ceded to reinsurers (98 811) (154 585)
Acquisition expenses (70 636) (74 549)
Investment expenses (8 335) (8 638)
Other expenses (12 177) (23 326)
(423 076) (508 700)
5. Revenues from car sales and after sales
30.6. 201 8 30.6. 2017
BGN ‘000 BGN ‘000
Revenue from sale of cars and spare parts 123 405 87 924
Revenue from after sales and rent - a - car services 3 838 3 877
127 243 91 801
6. Revenue from Leasing business
30.6. 201 8 30.6. 2017
BGN ‘000 BGN ‘000
Revenue from services 9 285 10 345
Interest income 2 234 2 250
Foreign exchange gains 2 5
Other financial revenue 36 12
11 560 12 612
7 . Expenses of Leasing business
30.6. 201 8 30.6. 2017
BGN ‘000 BGN ‘000
Inte rest expenses (1 687) (1 830)
Foreign exchange losses (12) (12)
Other expenses (111) (126)
(1 817) (1 968)
Interim Consolidated Financial Statement for H1. 201 8
39
8. Revenue from asset management and broke rage
30.6. 201 8 30.6. 2017
BGN ‘000 BGN ‘000
Interest income 356 191
Dividend income 91 -
Positive result from sales of financial instruments 686 934
Gains from sale of financial instruments 279 27
Other revenue 349 264
1 761 1 416
9. E xpenses of asset management and brokerage
30.6. 201 8 30.6. 2017
BGN ‘000 BGN ‘000
Interest expenses (13) (17)
Negative result from sales of financial instruments (1 232) (891)
Other expenses (53) (49)
(1 298) (957)
1 0 . Revenue from the activities of the parent company
30.6. 201 8 30.6. 2017
BGN ‘000 BGN ‘000
Gains from sale of financial instruments 570 507
Interest revenue 688 497
1 258 1 004
1 1 . Expenses of the activities of the parent company
30.6. 201 8 30.6. 2017
BGN ‘000 BGN ‘000
Negative result from sales of financial instruments (51) (732)
(51) (732)
1 2 . Other revenue / (expenses), net
30.6. 201 8 30.6. 2017
BGN ‘000 BGN ‘000
Other income/ ( expenses ), net (2 644) (4 461)
(2 644) (4 461)
Interim Consolidated Financial Statement for H1. 201 8
40
1 2 .1. Other expenses
30.6. 20 1 8 30.6. 2017
BGN ‘000 BGN ‘000
Leasing business (2 663) (4 461)
(2 663) (4 461)
1 2 . 2 . Other revenue
30.6. 201 8 30.6. 2017
BGN ‘000 BGN ‘000
Asset management and brokerage 19 -
19 -
1 3 . Other op erating expenses
30.6. 201 8 30.6. 2017
BGN ‘000 BGN ‘000
Expenses on materials (1 412) (1 349)
Expenses on hired services (14 180) (12 268)
Employee benefits expense (16 916) (14 508)
Oth er expenses (5 097) (3 140)
(37 605) (31 265)
1 3 .1 Expenses on materials by segments
30.6. 201 8 30.6. 2017
BGN ‘000 BGN ‘000
Insurance business (309) (295)
Automotive business (974) (878)
Leasing business (111) (149)
Asset management and brokerage (15) (22)
Parent company (3) (5)
(1 412) (1 349)
1 3 .2 Exp enses on hired services by segments
30.6. 201 8 30.6. 2017
BGN ‘000 BGN ‘000
Insurance business (6 751) (5 493)
Automotive business (4 680) (4 045)
Leasing business (1 780) (1 776)
Asset management and brokerage (313) (246)
Parent company (656) (708)
(14 180) (12 268)
Interim Consolidated Financial Statement for H1. 201 8
41
1 3 .3 Employee benefits expense by segments
30.6. 201 8 30.6. 2017
BGN ‘000 BGN ‘ 000
Insurance business (8 065) (6 895)
Automotive business (7 076) (6 016)
Leasing business (1 221) (1 059)
Asset management and brokerage (338) (361)
Parent company (216) (177)
(16 916) (14 508)
1 3 .4 Other expenses by segments
30.6. 201 8 30.6. 2017
BGN ‘000 BGN ‘000
Insurance business (3 751) (2 295)
Automotive business (867) (536)
Leasing business (319) (108)
Asset management and brokerage (93) (138)
Parent company (67) (63)
(5 097) (3 140)
1 4 . Financial expenses
30.6. 201 8 30.6. 2017
BGN ‘000 BGN ‘000
Interest expenses (10 890) (9 140)
Other financial expenses (369) (304)
(11 259) (9 444)
1 4 .1 Financial expenses by segm ents
30.6. 201 8 30.6. 2017
BGN ‘000 BGN ‘000
Insurance business (1 073) (413)
Automotive business (708) (797)
Parent company (9 109) (7 930)
(10 890) (9 1 40)
1 4 .2 Other financial expenses by segments
30.6. 201 8 30.6. 2017
BGN ‘000 BGN ‘000
Automotive business (347) (276)
Parent company (22) (28)
(369) (304)
Interim Consolidated Financial Statement for H1. 201 8
42
1 5 . Financial income
30.6. 201 8 30.6. 2017
BGN ‘000 BGN ‘000
Interest revenue 41 316
41 316
1 5 .1 Financial income by segments
30.6. 201 8 30.6. 2017
BGN ‘000 BGN ‘000
Automotive business 41 316
41 316
1 6 . Depreciation by segments
30.6. 201 8 30.6. 2017
BGN ‘000 BGN ‘000
Insurance business (979) (672)
Automotive bu siness (1 342) (1 358)
Leasing business (2 634) (2 056)
Asset management and brokerage (35) (28)
Parent company (11) (4)
(5 001) (4 118)
1 7 . Tax
30.6. 201 8 30.6. 2017
BGN ‘000 BGN ‘000
Income tax expense (2) (159)
(2) (159)
1 7 . 1 Tax by segments
30.6. 201 8 30.6. 2017
BGN ‘000 BGN ‘000
Insurance business - (147)
Automotive business - (10)
Asset management and brokerage (2) (2)
(2) (159)
Interim Consolidated Financial Statement for H1. 201 8
43
18 . Foreign exchange gains/losses , net
30.6. 201 8 30.6. 2017
BGN ‘000 BGN ‘000
Automotive busi ness 944 7
Parent company - -
944 7
19 . Cash and cash equivalents
30.6. 201 8 3 1 . 12 . 2017
BGN ‘000 BGN ‘000
Cash on hand 1 824 1 637
Cash at bank 45 348 43 511
Restricted cash 70 490
Cash equivalents 339 307
47 581 45 945
2 0 . Deposits at banks with maturity 3 to 12 months, by segments
30.6. 201 8 3 1 . 12 . 2017
BGN ‘000 BGN ‘000
Insurance business 14 445 11 171
14 445 11 171
2 1 . 1 R einsurers’ share in technical reserves
30.6. 201 8 3 1 . 12 . 2017
BGN ‘000 BGN ‘000
Unearned premium reserve 122 868
117 578
Unexpired risk reserve -
-
Claims reserves , incl. : 260 950
240 509
Reserves for incurred , but not reported claims 108 891
102 594
Reserves for reported , but not settled claims 152 059
137 915
Other technical reserves -
3 160
383 818 361 247
2 1 . 2 Receivables from insurance business
30.6. 201 8 3 1 . 12 . 2017
BGN ‘000 BGN ‘000
Receivables from direct insurance 69 092 69 720
Receivables from reinsurers or cedants 9 179
7 545
Recourse receivables 6 931 10 676
85 202 87 941
Interim Consolidated Financial Statement for H1. 201 8
44
2 2 . Trade receivables
30.6. 201 8 3 1 . 12 . 2017
BGN ‘000 BGN ‘000
Trade receivables 26 192 26 576
Advances paid 4 716 614
Other 581 284
31 489 27 474
2 2 .1. Trade receivables b y segments
30.6. 201 8 3 1 . 12 . 2017
BGN ‘000 BGN ‘000
Insurance business 2 095 1 905
Automotive business 14 705 13 500
Leasing services 9 195 11 164
Asset management and brokerage 33 2
Parent company 164 5
26 192 26 576
2 3 . Ot her receivables
30.6. 201 8 3 1 . 12 . 2017
BGN ‘000 BGN ‘000
Insurance business 13 968 16 547
Automotive business 4 460 3 688
Leasing services 985 758
Parent company 6 639 1 637
Prepaid expenses 6 066 2 868
Receivables under court procedu res 1 626 3 311
Tax receivables 1 100 2 013
34 844 30 822
2 3 .1. Tax receivables by segments
30.6. 201 8 3 1 . 12 . 2017
BGN ‘000 BGN ‘000
Insurance business 148 137
Automotive business 173 223
Leasing services 712 1 643
Parent comp any 67 10
1 100 2 013
Interim Consolidated Financial Statement for H1. 201 8
45
2 4 . Property, plant and equipment
Land plots Buildings Machinery
and
equipment Vehicles Furniture
and
fittings Assets under
construction Other Total
BGN ‘000 BGN ‘000 BGN ‘000 BGN ‘000 BGN ‘000 BGN ‘000 BGN ‘000 BGN ‘000
Cost
At 1 January 201 7 5 486 13 470 7 926 43 744 5 805 4 717 1 713 82 861
Additions 37 4 297 1 255 28 056 1 441 490 2 188 37 764
Disposals (33) (95) (123) (15 922) (63) (4 178) (2 147) (22 561)
At 3 1 December 2 017 5 490 17 672 9 058 55 878 7 183 1 029 1 754 98 064
At 1 January 201 8 5 490 17 672 9 058 55 878 7 183 1 029 1 754 98 064
Additions - 42 393 16 287 242 1 211 29 18 204
Disposals (207) (160) (23 ) (7 317) (69) (1 198) - (8 974)
At 30 June 2018 5 283 17 554 9 428 64 848 7 356 1 042 1 783 107 294
Depreciation
At 1 January 201 7 - 2 749 6 401 17 768 4 147 5 1 069 32 139
Depreciation for the p eriod - 335 672 6 134 365 - 100 7 606
Disposals - (12) (77) (6 265) (45) - (2) (6 401)
At 3 1 December 2017 - 3 072 6 996 17 637 4 467 5 1 167 33 344
At 1 January 201 8 - 3 072 6 996 17 637 4 467 5 1 167 33 344
Depreciatio n for the period - 209 376 3 864 249 - 50 4 748
Disposals - (62) (27) (1 762) (81) - - (1 932)
At 30 June 2018 - 3 219 7 345 19 739 4 635 5 1 217 36 160
Net book v alue :
At 1 January 201 7 5 486 10 721 1 525 25 976 1 658 4 712 644 50 722
At 1 January 201 8 5 490 14 600 2 062 38 241 2 716 1 024 587 64 720
At 30 June 2018 5 283 14 335 2 083 45 109 2 721 1 037 566 71 134
2 4 .1. Land and buildings by segments
30.6. 201 8 3 1 . 12 . 2017
BGN ‘000 BGN ‘000
Insurance business 9 597 9 918
Automotive business 10 021 10 172
19 618 20 090
Interim Consolidated Financial Statement for H1. 201 8
46
2 4 .2. Machinery and equipment by segments
30.6. 201 8 3 1 . 12 . 2017
BGN ‘000 BGN ‘000
Insurance business 525 385
Automotive business 1 512 1 632
Leasing business 46 45
2 083 2 062
2 4 .3. Vehicles by segments
30.6. 201 8 3 1 . 12 . 2017
BGN ‘000 BGN ‘000
Insurance business 5 944 2 199
Automotive busi ness 11 658 10 692
Leasing services 27 366 25 281
Asset management and brokerage 47 55
Parent company 94 14
45 109 38 241
2 4 .4. Furniture and fittings and other assets by segments
30.6. 201 8 3 1 . 12 . 2017
BGN ‘000 BGN ‘000
Insurance b usiness 215 214
Automotive business 2 988 3 033
Leasing services 66 38
Asset management and brokerage 14 16
Parent company 4 2
3 287 3 303
2 4 .5. Assets under construction by segments
30.6. 201 8 3 1 . 12 . 2017
BGN ‘000 BGN ‘000
Insur ance business 332 224
Automotive business 705 800
1 037 1 024
2 5 . Investment property
30.6. 201 8 3 1 . 12 . 2017
BGN ‘000 BGN ‘000
Net book value at 1 January 12 698 13 215
Additions - 68
Revaluation 561 (130)
Other changes - (455 )
Net book value as at the period end 13 259 12 698
Interim Consolidated Financial Statement for H1. 201 8
47 2 6 . Intangible assets
Software Licenses Other Total
BGN ‘000 BGN ‘000 BGN ‘000 BGN ‘000
Cost
At 1 January 201 7 6 095 155 1 483 7 733
Additions 1 037 - 150 1 187
Disp osals (388) (40) (21) (449)
At 3 1 December 201 7 6 744 115 1 612 8 471
At 1 January 201 8 6 744 115 1 612 8 471
Additions 390 - 49 439
Disposals (72) (1) (35) (108)
At 30 June 2018 7 062 114 1 626 8 8 02
Depreciation
At 1 January 201 7 5 076 154 764 5 994
Depreciation for the year 412 - 92 504
Disposals (184) (40) (1) (225)
At 3 1 December 201 7 5 304 114 855 6 273
At 1 January 201 8 5 304 114 855 6 273
Depreciati on for the period 198 - 55 253
Disposals - - - -
At 30 June 31 5 502 114 910 6 526
Net book value :
At 1 January 201 7 1 019 1 719 1 739
At 1 January 201 8 1 440 1 757 2 198
At 30 June 2 018 1 560 - 716 2 276
27 . Inventories by segments
30.6. 201 8 3 1 . 12 . 2017
BGN ‘000 BGN ‘000
Insurance business 228 248
Automotive business 49 087 53 249
Leasing business 2 146 5 628
51 461 59 125
Interim Consolidated Financial Statement for H1. 201 8
48
28 . Financial ass ets
30.6. 201 8 3 1 . 12 . 2017
BGN ‘000 BGN ‘000
Financial assets held for trading 275 057 305 715
Available for sale financial assets 15 493 15 638
Other financial assets 11 815 5 700
302 365 327 053
28 .1. Financial assets held for tradin g by segments
30.6. 201 8 3 1 . 12 . 2017
BGN ‘000 BGN ‘000
Insurance business , incl.: 263 584 294 500
Government bonds 121 627 133 742
Asset management and brokerage 11 473 11 215
275 057 305 715
28 .2. Available for sale financial assets b y segments
30.6. 201 8 3 1 . 12 . 2017
BGN ‘000 BGN ‘000
Insurance business , incl.: 15 493 15 638
Government bonds 4 436 4 680
15 493 15 638
28 .3. Other financial assets by segments
30.6. 201 8 3 1 . 12 . 2017
BGN ‘000 BGN ‘000
Insurance business 11 815 5 700
11 815 5 700
29 . Deferred tax asset
30.6. 201 8 3 1 . 12 . 2017
BGN ‘000 BGN ‘000
Insurance business 12 607 12 618
Automotive business 467 469
Leasing business 97 97
13 171 13 184
3 0 . Investments in subsidiarie s and associates
30.6. 201 8 3 1 . 12 . 2017
BGN ‘000 BGN ‘000
Investments of the parent company 3 463 -
Investments of the subsidiaries 4 183 4 724
7 646 4 724
Interim Consolidated Financial Statement for H1. 201 8
49
3 1 . Other financial investments by segments
30.6. 201 8 3 1 . 12 . 2017
BGN ‘000 BGN ‘000
Insurance business 2 386 2 382
Parent company 9 9
2 395 2 391
3 2 . Non - current receivables
30.6. 201 8 3 1 . 12 . 2017
BGN ‘000 BGN ‘000
Finance lease receivables 47 692 45 414
Parent company 9 779 9 779
Subsidiaries 50 145 30 715
107 616 85 908
3 3 . Goodwill
30.6. 201 8 3 1 . 12 . 2017
BGN ‘000 BGN ‘000
Euroins Insurance Group AD 164 478 164 478
Motobul EAD 12 538 12 538
Bulvaria Varna EOOD 5 591 5 591
Daru Car OOD 1 461 1 461
Eurolease Group EAD 1 312 1 312
Eurolease Rent - a - Car EOOD 1 803 1 803
Sofia Motors EOOD 10 10
Euro - Finance AD 2 620 2 620
189 813 189 813
3 4 . Subordinated debts by segments
30.6. 201 8 3 1 . 12 . 2017
BGN ‘000 BGN ‘000
Insurance business - issued 19 558 19 558
Insurance business - other 8 500 6 500
28 058 26 058
3 5 . Bank and non - bank loans by segments
30.6. 201 8 3 1 . 12 . 2017
BGN ‘000 BGN ‘000
Insurance business 17 -
Automotive business 16 896 17 382
Leasing business 55 536 47 768
Par ent company 44 161 34 095
116 610 99 245
Interim Consolidated Financial Statement for H1. 201 8
50
35.1. Bank and non - bank loans by segments – long term
30.6. 201 8 3 1 . 12 . 2017
BGN ‘000 BGN ‘000
Automotive business , incl.: 4 455 4 918
Bank loans 4 455 4 918
Leasing business, incl.: 54 35 8 46 404
Bank loans 54 358 46 404
Parent company, incl.: 37 015 21 123
Bank loans 37 015 21 123
95 828 72 445
35.1. Bank and non - bank loans by segments – short term
30.6. 201 8 3 1 . 12 . 2017
BGN ‘000 BGN ‘000
Insurance busines s , incl.: 17 -
Bank loans 17 -
Automotive business , incl.: 12 441 12 464
Bank loans 11 929 12 222
Loans from non - bank financial institutions 512 242
Leasing business, incl.: 1 178 1 364
Bank loans 1 178 1 364
Parent compa ny, incl.: 7 146 12 972
Bank loans 7 146 5 940
Loans from non - bank financial institutions - 7 032
20 782 26 800
3 6 . Bond obligations by segments
30.6. 201 8 3 1 . 12 . 2017
BGN ‘000 BGN ‘000
A utomotive business 13 681 4 769
Leasi ng business 20 372 20 863
Parent company 129 214 125 125
163 267 150 757
Interim Consolidated Financial Statement for H1. 201 8
51
3 6 . 1 Bond obligations – long term , by segments
30.6. 201 8 3 1 . 12 . 2017
BGN ‘000 BGN ‘000
A utomotive business 13 516 4 769
Leasing business 20 372 20 863
Parent company 124 081 124 178
157 969 149 810
3 6 . 2 Bond obligations – short term, by segments
30.6. 201 8 3 1 . 12 . 2017
BGN ‘000 BGN ‘000
A utomotive business 165 -
Parent company 5 133 947
5 298 947
3 7 . Non - current liabilities
30.6. 201 8 3 1 . 12 . 2017
BGN ‘000 BGN ‘000
Other non - current liabilities 6 398 10 198
Finance l eas e liabilities 25 136 19 885
Deferred revenue - 4
31 534 30 087
3 7 .1. Other non - current liabilities by segments
30.6. 201 8 3 1 . 12 . 2017
BGN ‘000 BGN ‘ 000
Insurance business 18 11
A utomotive business 5 593 9 336
Leasing business 783 811
Parent company 4 40
6 398 10 198
3 7 .2. Finance lease liabilities – non - current, by segments
30.6. 201 8 3 1 . 12 . 2017
BGN ‘000 BGN ‘000
A utomotive business 12 582 7 166
Leasing business 12 554 12 719
25 136 19 885
Interim Consolidated Financial Statement for H1. 201 8
52
38 . Current liabilities
30.6. 201 8 3 1 . 12 . 2017
BGN ‘000 BGN ‘000
Payables to employees 3 708 3 304
Social - security liabilities 1 830 1 619
Tax liabilities 4 545 5 707
Other current liabilities 10 700 9 792
Finance l eas e liabilities 463 4 449
Deferred revenue 446 270
Provisions 553 446
22 245 25 587
38 .1. Payables to employees by segments
30.6. 201 8 3 1 . 12 . 2017
BGN ‘000 BGN ‘000
Insurance b usiness 2 417 2 357
A utomotive business 1 017 721
Leasing business 233 187
Parent company 41 39
3 708 3 304
38 .2. Social - security liabilities bys segments
30.6. 201 8 3 1 . 12 . 2017
BGN ‘000 BGN ‘000
Insurance busi ness 1 308 1 325
A utomotive business 375 209
Leasing business 129 75
Parent company 18 10
1 830 1 619
38 .3. Tax liabilities by segments
30.6. 201 8 3 1 . 12 . 2017
BGN ‘000 BGN ‘000
Insurance business
A utomotive business
Le asing business
Asset management and brokerage
Parent company
Interim Consolidated Financial Statement for H1. 201 8
53
38 .4. Other current liabilities by segments
30.6. 201 8 3 1 . 12 . 2017
BGN ‘000 BGN ‘000
Insurance business 7 717 6 322
A utomotive business 895 2 084
Leasing busi ness 871 795
Asset management and brokerage 141 293
Parent company 1 076 298
10 700 9 792
3 8 . 5 . Finance l eas e liabilities – current, by segments
30.6. 201 8 3 1 . 12 . 2017
BGN ‘000 BGN ‘000
A utomotive business 463 4 449
463 4 449
38 . 6 . Deferred revenue – current, by segments
30.6. 201 8 3 1 . 12 . 2017
BGN ‘000 BGN ‘000
Insurance business 128 -
A utomotive business 318 270
446 270
39 . Trade and other payables by segments
30.6. 201 8 3 1 . 12 . 2017
BGN ‘000 BGN ‘000
Insura nce business 3 390 7 380
A utomotive business 54 582 51 080
Leasing business 3 037 3 852
Asset management and brokerage 3 6
Parent company 24 764 39 874
85 776 102 192
4 0 . Payables to reinsurers , I nsurance business
30.6. 201 8 3 1 . 12 . 2017
BGN ‘000 BGN ‘000
Payables to reinsurers 60 346 77 807
Payables from direct insurance 3 959 4 056
64 305 81 863
Interim Consolidated Financial Statement for H1. 201 8
54
4 1 . Deferred tax liabilities
30.6. 201 8 3 1 . 12 . 2017
BGN ‘000 BGN ‘000
Insurance business 69 104
A utomotive b usiness 122 120
Leasing business 60 60
251 284
4 2 . Insurance reserves
30.6. 201 8 3 1 . 12 . 2017
BGN ‘000 BGN ‘000
Unearned premium reserve, gross amount 199 243 187 985
Reinsurers’ share in unearned premium reserve (122 868) ( 117 578 )
Unexpired risks reserve, gross amount 539 7 288
Reinsurers’ share in unexpired risks reserve - -
Reserve for incurred but not reported claims, gross amount 174 992 165 038
Reinsurers’ share in reserve for incurred but not reported claims (108 891) ( 102 594 )
Reserve for reported but not settled claims, gross amount 250 210 231 443
Reinsurers’ share in reserve for reported but unsettled claims (152 059) ( 137 915 )
Other technical reserve 4 978 4 081
629 962 595 835
4 3 . S hare capital and s hare p remium
4 3 .1 Issued capital
30.6. 201 8 3 1 . 12 . 2017
BGN ‘000 BGN ‘000
Issued shares 197 526 197 526
Treasury shares (Shares held from subsidiaries) (6 077) (77)
Share capital 191 449 197 449
Number of shares 197 525 600 197 525 600
As at 30.6. 201 8 - 6 0 77 067 shares of Eurohold Bulgaria AD are held by the Eurohold Group companies (as
at 31.12.201 7 – 77 387 share s ) .
The share capital is distributed as follows :
Share holders % Number of
shares Par valu e
Starcom Holding AD 54.55% 107 740 952 107 740 952
KJK Fund II Sicav - Sif Balkan Discovery 12.46% 24 616 873 24 616 873
Other companies 30.52% 60 291 557 60 291 557
Other individuals 2.47% 4 876 218 4 876 218
1 00 . 00% 197 525 600 197 525 600
Interim Consolidated Financial Statement for H1. 201 8
55
43.2 Share premium 30.6. 201 8 3 1 . 12 . 2017
BGN ‘000 BGN ‘000
Share premium 49 568 49 568
49 568 49 568
4 4 . Net income for the year
30.6. 201 8 3 1 . 12 . 2017
BGN ‘000 BGN ‘000
Current result attributable to the shareholders 1 938 18 174
Current result attributable to the non - controlling interest 2 141 6 241
Net income for the year 4 079 24 415
4 4 .1. Net income for the year by segments
30.6. 201 8 3 1 . 12 . 2017
BGN ‘000 BGN ‘000
Insurance busine ss 11 534 41 681
Automotive business 395 258
Leasing business 110 112
Asset management and brokerage 36 209
Parent company (7 787) (17 306)
Income attributable to the non - controlling interest (2 141) (6 241)
Intercompany eliminatio ns of dividends and other (209) (539)
1 938 18 174
4 5 . Non - controlling interests
30.6. 201 8 3 1 . 12 . 2017
BGN ‘000 BGN ‘000
Non - controlling interest attributable to current result 2 141 6 241
Non - controlling interest attributable to equit y 39 886 37 461
42 027 43 702
4 6 . Events after the end of the reporting period
At the end of 2017, the companies in the Eurohold Group carried out an assessment of the effects of the
three aspects of IFRS9, based on information available on 31.12.2017. On the basis of this assessment and
in order to minimize the effect of the entry into force of the new standard, receivables totaling BGN 4,888
thousand were sold at the beginning of 2018.
An agreement with an external consultant has been signed to investigate and confirm the effects of the
valuations at 31.12.2017 and there is no indication of significant impact on the consolidated statement of
financial position and equity as of the date of this report .
The Management Board of Eurohold Bulgaria AD is not aware of any other important or material events that
have occurred after the end of the reporting period .
INSIDE INFORMATION
pursuant to Article 7 of Market Abuse Regulation (EU) No
596/201 4 of the European Parliament and of the Council of 16
April in respect of circumstances occurring during the reporting
period
EUROHOLD BULGARIA AD has disclosed the foll owing information:
4 July , 201 8
Notification concerning Regulation (EU) No 596/2014 of the European Parlia ment and of
the Council of 16 April 2014;
2 July , 201 8
Announcement for di vidend payment ;
2 July , 201 8
Minutes from the regular session of GMS of Eurohold Bulgaria AD, held on 29 th
of June,
2018 ;
22 June , 2018
Notification concerning Regulation (EU) No 596/2014 of the European Parliament and of
the Council of 16 April 2014;
11 June , 2018
Notification concerning Regulation (EU) No 596/2014 of the European Parliament and of
the Council of 16 April 2014;
8 June , 2018
Notification concerning Regulation (EU) No 596/2014 of the European Parliament and of
the Council of 16 April 2014;
5 June , 2018
Notification concerning Regulation (EU) No 596/2014 of the European Parliament and of
the Council of 16 April 2014;
31 May , 2018
Notification concerning Regulation (EU) No 596/2014 of the European Parliament and of
the Council of 16 April 2014;
30 May , 201 8
Interim Consolidated Financial Report for Q 1 ’ 201 8 :
1. Interim Consolidated Financial Statements as of 3 1 st
of March , 201 8 , IFRS ;
2. N otes to the Interim Consolidated Financial Statements for Q 1 ’ 201 8 ;
3. Interim Consolidated Management Report ;
4. Interim Consolidated Financial Statements – FSC forms ;
5. Internal Information ;
6. Additional Information ;
7. Information according to Annex 9;
8. Declarations ;
29 May , 201 8
Invitation for the regular session of GMS of Eurohold Bulgaria AD on 29 th
of June, 2018 ;
30 April , 201 8
Interim Financial Report for Q 1 ’ 201 8 :
1. Interim Financial Statements as of 3 1 st
of March , 201 8 , IFRS ;
2. N otes to the Interim Financial Statements for Q 1 ’ 201 8 ;
3. Interim Management Report ;
4. Interim Financial Statements – FSC forms ;
5. Internal Information ;
6. Additional Information ;
7. Information according to Annex 9;
8. Declarations ;
19 April , 2018
Notification concerning Regulation (EU) No 596/2014 of the European Parlia ment and of
the Council of 16 April 2014;
18 April , 201 8
Annual Consolidated Financial Report for the year ended on 31 December 201 7 :
1. Annual Consolidated Financial Report as of 31 December 201 7 , IFRS ;
2. Notes to the Annual Consolidated Financial Statements ;
3. Independent Auditor’s Repor t ;
4. Consolidated Management Report for 201 7 ;
5. Corporate Governance Declaration ;
6. Annual Consolidated Financial Report – FSC forms ;
7. Independent Auditor’s Declaration ;
8. Declarations;
1 7 April , 2018
Notification concerning Regulation (EU) No 596/2014 of the European Parlia ment and of
the Council of 16 April 2014;
4 April , 201 8
Annual Financial Report for the year ended on 31 December 201 7 :
1. Annual Financial Report as of 31 December 201 7 , IFRS ;
2. Notes to the Annual Financial Statements ;
3. Independent Auditor’s Repor t ;
4. Management Report for 201 7 ;
5. Corporate Governance Declaration ;
6. Annual Financial Report – FSC forms ;
7. Independent Auditor’s Declaration ;
8. Declarations;
7 March , 2018
Notification concerning Regulation (EU) No 596/2014 of the European Parlia ment and of
the Council of 16 April 2014;
7 March , 2018
Notification concerning Regulation (EU) No 596/2014 of the European Parliament and of
the Council of 16 April 2014;
2 7 February , 201 8
The shares from the last capital increase of Eurohold Bulga ria AD have been admitted to
trading on the Warsaw Stock Exchange ( News Release ) ;
2 February , 201 8
2017 cons results for Eurohold: Profit doubled and upsurge in the profitability of the main
business lines ( News Release ) ;
1 Febr uary , 201 8
Interim Conso lidated Financial Report for Q4’ 201 7 :
1. Interim Consolidated Financial Statements as of 3 0 December 201 7 , IFRS ;
2. Notes to the Interim Consolidated Financial Statements for Q4’ 201 7 ;
3. Interim Consolidated Management Report ;
4. Interim Consolidated Financ ial Statements – FSC forms ;
5. In ternal Information ;
6. Additional Information ;
7. Information according to Annex 9;
8. Declarations ;
1 February , 201 8
Interim Financial Report for Q4’ 201 7 :
1. Interim Financial Statements as of 3 0 December 201 7 , IFRS ;
2. N otes to the Interim Financial Statements for Q4’ 201 7 ;
3. Interim Management Report ;
4. Interim Financial Statements – FSC forms ;
5. Internal Information ;
6. Additional Information ;
7. Information according to Annex 9;
8. Declarations ;
9 January , 2018
No tification pursuant to Article 148b of POSA;
4 January , 2018
Notification concerning Regulation (EU) No 596/2014 of the European Parliament and of
the Council of 16 April 2014;
2 January , 2018
Notification concerning Regulation (EU) No 596/2014 of the European Parliament and of
the Council of 16 April 2014;
30.0 7 .2018
Asen Minchev ,
Executive Member of the Man agement Board
of Eurohold Bulgaria AD
1
ADDITIONAL INFORMATION
TO THE INTERIM FINANCIAL REPORT OF EUROHOLD
BULGARIA FOR Q 2 ’ 201 8
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 th ey 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 chang es 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 ha ve been published for 2018 .
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 t hree
months period
Shareholder Number of
shares % participation
1. Starcom Holding AD
107 740 952 54, 55 %
3. KJK Fund II Sicav - Sif Balkan Discovery
24 616 873 12.46 %
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
2
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. Ass en Emanuilov Assenov 78,000 0.0 4 %
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 o f 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 gra nted 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 i nterest rate, the final
maturity, the size of the commitment, the term and conditions.
Non - current liabilities to r elated parties
30.6. 2018 31.12.2017
Loans principal BGN’000 BGN’000
Eurolease Auto EAD 2 591 2 576
2 591 2 576
30.6. 2018 31.12.2017
Financial lease liabilities BGN’000 BGN’000
Eurolease Auto EAD 48 -
48 -
Current liabilities to r elated parties
Interest payables
30.6. 2018 31.12.2017
BGN’000 BGN’000
Eurolease Auto EAD 17 157
Eurolease Group EAD 8 8
25 165
Current borrowings
30.6. 2018 31.12.2017
BGN’000 BGN’000
Starcom Holding AD - 18
Eurolease Group EAD 16 16
3
16 34
Other payables
30.6. 2018 31.12.2017
BGN’000 BGN’000
Eurolease Auto EAD 63 17
Sofia Motors EOOD - 9
Bulvaria Holding E AD - 7
63 33
Date:
30 . 0 7 .201 8 г. Asen Minchev,
Executive Director of Eurohold Bulgaria AD
1
INFORMATION ACCORDING TO ANNEX 9
according to the requirements of Article 33, paragraph 1, item 3 of
ORDINANCE № 2 of 17.09.2003 on prospectuses for public offering
and admission to trading on a regulated securities market and for
the disclosure of info rmation
1. There has no c hange of persons exercising a control over the Company
2. Opening of insolvency proceedings for the company or its subsidiary and
all essential stages of the proceedings
No insolvency proceedings have been opened for the company o r its subsidiary
3. Conclusion or execution of significant transactions
There are no significant transactions during the observed period.
4. No decision on the conclusion or termination of the joint venture
agreement
5. Change in company auditors and reasons f or change
There has no change in company auditors.
6. No court o r arbitration case relating to the debts or claims of the
company or its subsidiary has been initiated or terminated at a purchase
price of at least 10% of the capital of the company
7. There is no purchase, sale or pledge of shareholdings in commercial
comp anies by the issuer or its subsidiary
8. There are no other circumstances that the Company believes could be
relevant to investors in taking a decision to acquire, sell or continue to
hold publicly - traded securities
Date : 30 . 0 7 .201 8 г.
Asen Minchev,
Executive Director of Eurohold Bulgaria AD
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