INDUSTRIAL HOLDING BULGARIA AD

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 30 June 2013

Industrial Holding Bulgaria Plc

Interim Consolidated Financial Statements

For the period ended 30 June 2013

INDUSTRIAL HOLDING BULGARIA AD

66

Managing Board

Daneta Angelova Zheleva

Bozhidar Vasilev Danev

Boyko Nikolov Noev

Borislav Emilov Gavrilov

Emilian Emilov Abadzhiev

Supervisory Board

Konstantin Kuzmov Zografov

DZH AD, represented by Elena Petkova Kircheva

Snezhana Ilieva Hristova

Auditor

Ernst & Young Audit OOD

Polygraphia Office Centre

47 A, Tsarigradsko shos Blvd., fl.4

1124 Sofia

Bulgaria

INDUSTRIAL HOLDING BULGARIA AD

General Information

In BGN thousand

Notes

30 June 2013

30 June 2012

Continuing operations

Revenue

8

47,955

40,104

Other operating revenue

9

21,042

972

Changes in inventories of work in progress and finished goods

10

915

(4,647)

Own work capitalised

11

637

34,766

Expenses for materials

12

(16,692)

(38,660)

Expenses for hired services

13

(10,128)

(8,647)

Depreciation and amortization

18,19

(6,452)

(4,955)

Personnel expenses

14

(11,077)

(11,722)

Other operating expenses

15

(3,480)

(1,914)

Loss from operations

22,720

5,297

Financial income

16

1,002

185

Financial expenses

16

(3,824)

(6,064)

Profit of associates

20

18

37

Profit before tax from continuing operations

19,916

(545)

Income tax (expense) / gain

17

(2,279)

(378)

Profit for the year from continuing operations

17,637

(923)

Discontinued operations

(Loss)/ profit after tax for the year from discontinued operations

7

(157)

(2,691))

Profit for the year

17,480

(3,614)

Attributable to:

Equity holders of the parent

18,552

(2,880)

Non-controlling interests

(1,072)

(734)

17,480

(3,614)

Earnings per share

Basic earnings per share attributable to ordinary equity holders of the parent (BGN)

27

0,273

(0,042)

Earnings per share for continuing operations

Basic earnings per share from continuing operations attributable to ordinary equity holders of the parent

27

0,271

(0,079)

The notes on pages 11 to 46 form an integral part of these consolidated financial statements. The consolidated financial statements were authorised for issue with a resolution of the Management Board and Supervisory Board dated 27August2013.

Daneta Zheleva

Chief Executive Director

Toshka Vassileva

Chief accountant

INDUSTRIAL HOLDING BULGARIA AD

CONSOLIDATED INCOME STATEMENT

For the year ended 30 June 2013

6

In BGN thousand

Note

30 June 2013

30 June 2012

Profit for the year

17,480

(3,614)

Other comprehensive income

Net movement on cash flow hedges

32

138

2

Income tax effect from hedging

17

-

-

Other changes

(14)

2

Other comprehensive income for the year, net of tax

124

4

Total comprehensive income for the year, net of tax

17,604

(3,610)

Attributable to:

Equity holders of the company

18,679

(2,875)

Non-controlling interests

(1,075)

(735)

17,604

(3,610)

The notes on pages 11 to 46 form an integral part of these consolidated financial statements. The consolidated financial statements were authorised for issue with a resolution of the Management Board and Supervisory Board dated 27August2013.

Daneta Zheleva

Chief Executive Director

Toshka Vassileva

Chief accountant

INDUSTRIAL HOLDING BULGARIA AD

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the year ended 30 June 2013

In BGN thousand

Note

30 June 2013

31 December 2012

Assets

Non current assets

Property, plant and equipment

18

367,350

371,262

Other intangible assets

19

5,762

6,654

Goodwill

19

6,212

6,212

Investments in associates

20

1,839

1,821

Investments held for sale

21

4

4

Non-current receivables

22

1,275

4,977

Deferred tax assets

17

415

429

Total non-current assets

382,857

391,359

Current assets

Inventories

23

20,456

24,086

Trade and other receivables

24

6,822

7,135

Receivables from related parties

34.2

274

576

Income tax receivable

301

270

Cash and cash equivalents

25

6,980

8,494

Total current assets

34,833

40,561

Assets classified as held for sale

7

458

969

TOTAL ASSETS

418,148

432,889

The notes on pages 11 to 46 form an integral part of these consolidated financial statements. The consolidated financial statements were authorised for issue with a resolution of the Management Board and Supervisory Board dated 27August2013.

Daneta Zheleva

Chief Executive Director

Toshka Vassileva

Chief accountant

(Continued)

In BGN thousand

Note

30 June 2013

31 December 2012

Equity

Share capital

26

67,978

67,978

Share premium

26

30,604

30,604

Shares buyback

(365)

Other reserves

26

56,834

57,558

Retained earnings

86,165

66,762

241,216

222,902

Non-controlling interests

14,637

16,094

Total equity

255,853

238,996

Liabilities

Non current liabilities

Interest-bearing loans and borrowings

28

43,252

43,684

Debenture loan

28

29,863

-

Payables to related parties

7,732

-

Grants

29

682

635

Provisions

30

-

52

Retirement benefit liability

31

54

172

Deferred tax liabilities

17

5,797

5,937

Total non-current liabilities

87,380

50,480

Current liabilities

Interest-bearing loans and borrowings

28

60,876

66,652

Debenture loan

28

394

21,946

Payables to related parties

34.2

-

16,820

Trade and other payables

32

10,996

35,788

Provisions

30

499

466

Grants

29

98

95

Retirement benefit liability

31

66

-

Income tax payable

1,943

1,059

Total current liabilities

74,872

142,826

Liabilities directly associated with the assets classified as held for sale

7

43

587

Total liabilities

162,295

193,893

TOTAL EQUITY AND LIABILITIES

418,148

432,889

The notes on pages 11 to 46 form an integral part of these consolidated financial statements. The consolidated financial statements were authorised for issue with a resolution of the Management Board and Supervisory Board dated 27August2013.

Daneta Zheleva

Chief Executive Director

Toshka Vassileva

Chief accountant

INDUSTRIAL HOLDING BULGARIA AD

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

As at 30 June 2013

In BGN thousand

Note

30 June 2013

30 June 2012

Operating activities

Receipts from customers

48,950

40,017

Payments to suppliers

(30,088)

(20,890)

Personnel and social security payments

(10,680)

(11,329)

Income tax paid

(1,589)

(723)

Exchange rate differences

(15)

(63)

Other proceeds

(1,021)

1,406

Cash flows from operating activities, net

5,537

8,418

Investing activities

Proceeds from sale of property, plant and equipment

2,149

457

Purchase and construction of property, plant and equipment

(1,434)

(17,333)

Proceeds from repaid loans and interests

-

911

Loans granted

-

(5,214)

Proceeds from sales of investments

-

15,203

Dividends received from investments

978

Interests received from loans granted, deposits and current bank accounts

10

116

Other proceeds

4,242

522

Cash flows used in investing activities, net

4,967

(4,360)

Financial activities

Debenture loa