2019 Annual summary report On state-owned public enterprises

Table of contents

The state as an owner Overview of the state’s portfolio Key reforms in 2019 The state as an active owner Financial statements Overview Financial results for year 2019 Information on public enterprises categorized as "large" Accounting notes

THE STATE AS AN OWNER

Overview of the state’s portfolio

Within the meaning of the Law on Public Enterprises, state-owned public-interest enterprises are:  commercial companies with more than 50 per cent of state shareholding, or the ones in which the state otherwise exercises a dominant influence;  the subsidiaries of the above-mentioned commercial companies and of state-owned enterprises if through them the state controls more than 50 per cent of the voting shares/stock or otherwise exercises a dominant influence;  state-owned enterprises established by dedicated acts on the grounds of Article 62[3] of the Commerce Act.

In this annual report, the municipal public enterprises are not taken into account due to the fact that in them the property rights are exercised by the respective local self-government body and not by the state. The approach adopted by the law is in line with the OECD Guidelines on Corporate Governance of State- Owned Enterprises. The main goal of the state in public enterprises is to create maximum value for society through efficient management of resources, and for enterprises that have made public policy commitments - to ensure that these commitments are well implemented. The state's portfolio in public enterprises covers its shareholding in 258 enterprises, including subsidiaries from various sectors of the country's economy. In cases where a state-owned public enterprise controls more than 50 percent of the voting shares/stock or otherwise exercises a dominant influence in the capital of other enterprises, ie. there is a group, the whole group can be reported as one enterprise and in this case the state portfolio includes 174 public enterprises. Bodies exercising the rights of the state are the administrative bodies which by law or by order of the Council of Ministers exercise the rights of the state in the capital of public enterprises (ministers) and the public enterprise when exercising property rights in another public enterprise (holdings). According to the competence of the ministers, state-owned public enterprises (including the groups of enterprises) fall into 17 departments. The distribution of enterprises by departments does not completely coincide with their affiliation by industry. For example, the sector of economy includes enterprises from the branches of industry and trade, but also those from the branches of ecology and financial services. Several enterprises in the healthcare sector are included in the departments of transport, defence and youth and sports, as they specialize in servicing the respective circle of patients. For this reason, in this report the value of the government portfolio is illustrated in two charts - one by sector and the other - by industry.

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Portfolio (by number of public entrprises)

64

34 18 15 10 6 6 5 3 3 3 2 1 1 1 1 1

According to the equity criterion, the shareholding of the state in the energy sector is the most important - 57%, followed by the transport sector - 20% and the economy - 11%. The share of other departments - regional development and public works (1%), agriculture, food and forests (2%), healthcare (3%), youth and sports (2%), education and science (01.%), defence (1 %), culture (2%), finance (0.1%), tourism, labor and social policy, internal and external affairs, environment and water - make up a total of 0.8% of the portfolio.

Portfolio Energy, 57% (by sectors) Economy, 11%

Transport, 20%

Regional development, 1%

Agriculture, Food and Forestry, 2% Health, 3%

Youth and Sports, 2%

Education and Science, 0.1% Defence, 1%

Culture, 2%

Finance, 0.1%

Other, 0.8%

This report applies the method of book value of equity for the assessment of public enterprises. Outside the privatization process and with the exception of the companies listed on the Bulgarian Stock Exchange, no assessment of the state shareholding by other methods has been made.

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Value of the portfolio Agriculture Ecology Health 2% 0.1% (BGN million) 3% Services 21500 8.9%

21000 Construction 1% Energy 57% 20500

Transport 20% Industry 20000 8% 2015 2016 2017 2018 2019

In the state’s portfolio, 46 public enterprises are categorized as "large" according to the criteria in the Accountancy Act, according to which large enterprises are those that as of December 31 of the current reporting period exceed at least two of the following indicators: book value of assets - BGN 38,000,000; net sales revenues - BGN 76,000,000; average number of staff for the reporting period - 250 people. According to the legal form, 36 of them are commercial companies and 10 are state-owned enterprises.

Breakdown by Ministry Commercial companies State- Total Ministries Total Direct state Subsidiaries owned number number shareholding enterprises MoEconomy 2 0 2 0 2 MoEnergy 8 1 7 1 9 MTITC 7 5 2 3 10 MYS 1 1 0 1 2 MAFF 1 1 0 5 6 MD 1 1 0 0 1 MRDPW 5 5 0 0 5 MC 1 1 0 0 1 MH 10 10 0 0 10 Total 36 25 11 10 46

The majority of state-owned public enterprises operate as commercial companies – 159 in number. State- owned enterprises within the meaning of Article 62[3] of the Commerce Act are 15 public enterprises. The main feature of state-owned enterprises is that the property provided to them by the state does not form capital to serve as collateral for their creditors (i.e. the property provided to them is not distributed in the number of shares/stocks with a fixed nominal value). Some of them apply a specific regulatory framework, defined in the special law with which they were created, which distinguishes them from both companies and each other. However, they are also registered in the commercial register and apply the provisions of the Accountancy Act.

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Key reforms in 2019

On 26 September 2019, the National Assembly adopted the Law on Public Enterprises (promulgated, SG, No. 79 of 8 October 2019), which started the reform in the field of management of public enterprises. The purpose of the Law is to create a harmonized legal framework in which public enterprises operate and in which the rules for corporate governance and disclosure are the same for all. The Law on Public Enterprises regulates the manner of determining and publicly announcing the state policy in the field of public enterprises, the introduction of standards for their good corporate governance, as well as the obligations for disclosure and transparency of the activity of public enterprise management bodies. The bill was developed with the assistance of the Organization for Economic Co-operation and Development (OECD) in the framework of the project "Modernisation of the framework for management of state-owned enterprises in line with the good international practices" under the Structural Reform Support Programme of the European Union; the aim was to bring national legislation in compliance with the standards of the OECD Guidelines on Corporate Governance of State-Owned Enterprises. The Rules Implementing the Law on Public Enterprises (promulgated, SG, No. 40 of 5 May 2020) creates conditions for the implementation of the Law in its entirety, through the development of detailed rules regarding the following: . The content of the policy for the participation of the state in the public enterprises, provided in Article 10 of the Law, the order for its development, adoption and updating; . The activity of the Public Enterprises and Control Agency as a coordinating unit regarding the state public enterprises and its relations with the bodies exercising the rights of the state and the public enterprises themselves; . Special rules for the conclusion of certain types of contracts, which should be observed by the state public enterprises, in view of the fact that they are legal entities created with public funds; . The conditions and the order for conducting the competition procedure for selection of the members of the management and control bodies, according to Article 21 of the Law; . The assignment of the management and control of the public enterprises and the procedure for determining the remuneration of the members of the management and control bodies; . Defining the medium-term goals and the planned results of the activity of the public enterprises; . The scope of the obligation for public disclosure of financial and non-financial information by public enterprises in accordance with Article 28 of the Law.

The state as an active owner The Constitution of the Republic of Bulgaria assigns to the Council of Ministers, as a body of the executive power, to manage the state property. The owner of the shares and stock in the public enterprises is the state. The rights of the state in the capital of public enterprises are exercised by the individual ministers in accordance with their sectoral competence by decision of the Council of Ministers, as well as by state- 5 owned public enterprises, when they control more than 50 percent of the voting shares/stock or otherwise exercise a dominant influence in the capital of other enterprises. Public enterprises play an important role in the economic and social life of the country. They are legal entities that are created and managed in the interest of citizens and society in order to achieve maximum value for society through efficient allocation of resources. Most of them operate in competitive markets and therefore, just like private companies in the long run, they must be efficient and profitable and able to grow. Some public companies are entrusted with public functions or the provision of public services, which means that they contribute to the benefit of society, which cannot always be measured by financial means. However, public policy objectives need to be specified and clearly formulated, appropriate key indicators identified and results planned in order to be able to track their implementation. This is to be done with the policy for the participation of the state in public enterprises. The Council of Ministers is assigned to actively manage the state assets invested in the capital of public companies with state shareholding in a way that guarantees maximum benefit to society with balanced risk-taking, and that the accepted commitments of public policy are well implemented. Although public enterprises in Bulgaria are managed in the same way as private companies, and the provisions of the Commerce Act apply equally to both private and public companies, with the adoption of the Law on Public Enterprises and the rules on its implementation only the legal framework for improving corporate governance has been created while the big challenge for its implementation in practice is yet to be achieved. The goal set by the state with the launched reform is to largely follow the OECD Guidelines on Corporate Governance of State-Owned Enterprises, which provide the state, as owner and state-owned enterprises, with a predictable framework so that the role of the state as an owner is clearly separated from its other functions.

The role of the Public Enterprises and Control Agency (PECA) The Public Enterprises and Control Agency is the legal successor of the Agency for Privatization and Post- Privatization Control. With the Law on Public Enterprises, promulgated in the State Gazette, issue No.79 of 08.10.2019, the Privatisation and Post-Privatisation Control Agency was renamed Public Enterprises and Control Agency (PECA) and it was assigned the functions of a unit that carries out the coordination of the state policy with regard to public enterprises, monitors and reports to the Council of Ministers on its implementation. PECA is assigned the responsible task of a coordinating unit with regard to the state- owned public enterprises in the relations between the bodies exercising the rights of the state and the public enterprises themselves. The Public Enterprises and Control Agency (PECA) is an administration of the Council of Ministers on budget support. The governing bodies of the Public Enterprises and Control Agency are the Executive Board and the Supervisory Board; The Executive Board, which consists of three members - the Executive Director and two Deputy Executive Directors, is appointed by the Council of Ministers, and the members of the Supervisory Board are appointed by the National Assembly on a quota basis according to the parties represented in parliament. The Executive Director represents the Agency. At the same time, PECA is a secondary spender of budget funds as it is included in the budget of the Ministry of Economy.

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The total number of staff in the agency is 65 full-time positions, structured in 5 directorates:  Administrative Directorate - 18 employees, incl. 4 accountants and 1 lawyer;  Legal Directorate, including two departments - a total of 13 employees, incl. 5 legal advisers and 5 lawyers:  Public Enterprises Directorate - 11 employees;  Financial Directorate - 11 employees;  Control Directorate - 11 employees.

The Agency, in cooperation with the bodies exercising the rights of the state in enterprises and other state organizations participating in its implementation, develops the policy for the participation of the state in public enterprises and submits it to the Council of Ministers for approval, monitors its implementation and takes actions for its revision, when necessary. PECA prepares an annual summary report on the performance of state-owned public enterprises and compliance with applicable corporate governance standards. The preparation of the annual summary report is carried out with the assistance of public enterprises and bodies exercising the rights of the state, which provide the Agency with the necessary information. PECA will actively participate in the process of defining the general strategic goals of the enterprises and monitoring the planned results, the competitive selection of the members of the management and control bodies and the transparency of the activity of the public enterprises.

Targets and monitoring the implementation thereof Setting targets and monitoring the implementation thereof are important tools for the state as the owner of public enterprises. Even under the current legal framework before the adoption of the Law on Public Enterprises, enterprises had business programs approved by the annual general meeting of members/ shareholders, which set financial and non-financial goals, but specific planned results were not clearly formulated and the content of business programs was different for individual sectors. This complicated the process of monitoring the performance of enterprises for the entire portfolio of the state. The introduced reform in the corporate governance of enterprises envisages the determination of the general strategic goals to be done with the policy for the participation of the state in public enterprises, and the specific key indicators for fulfillment of financial and non-financial goals to be adopted by the annual general meeting upon approval of the business programs of the enterprises. The development of the companies can be measured since their performance in relation to the set goals will be monitored regularly by PECA with respect to public enterprises categorized as "large" and with respect to a number of public enterprises categorized as "micro", "small" and "medium" according to the Plan for evaluations of the implementation of the approved business programs, adopted by a decision of the Council of Ministers. Financial goals make it possible to measure and track the company's profitability, efficiency and level of risk. Public policy objectives are defined for specific companies and it is monitored how they are implemented. This information will be included in the annual summary reports prepared by the PECA and approved by the Council of Ministers.

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Dialogue between the owner and the management and control bodies of the enterprise The objectives of public policy and the financial and non-financial objectives of the enterprise are determined through dialogue with the owner. The purpose of this dialogue is for companies to get a clear idea of the owner's expectations of them. The results in relation to the objectives are discussed, as well as all actions planned to achieve the objectives. Current issues relevant to the company's activities are also discussed in dialogue with the owner.

Nomination of members of the management and control bodies All members of the management and control bodies should be selected and appointed following a publicly announced competition. This is one of the biggest challenges for the owner of the capital, as the Regulations on the Implementation of the Law on Public Enterprises, regulating the terms and conditions for competitions, were adopted in May 2020 and the first competitions started in 2020. In 2019 the nomination and appointment of the members of the management and control bodies was carried out according to the then acting procedure. The purpose of the introduced common unified principles for board structuring is to provide companies with the opportunity to include in their management and control bodies highly professional people, with integrity and independence. The importance of the correct selection of members of the management and control bodies can be seen from the great responsibility assigned to them - they organize and manage the activities of enterprises and determine their overall strategy.

Transparency requirement Public companies have the obligation to disclose both financial and non-financial information in a way that ensures the transparency of the company's activities and its management, e.g. on their websites as well as in the Commercial Register. The requirement for transparency aims to maintain the confidence of the public and the business community in them. In 2019 the publication of the quarterly and annual financial reports, analyzes and reports was done on the website of the Ministry of Finance, from now on the information will be published on the website of PECA, and from next year it will be announced through an electronic information system maintained by the Agency.

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FINANCIAL STATEMENTS Overview In 2019, public enterprises carried out their activities within the existing legislation and regulations until the adoption of the Law on Public Enterprises. A state policy is to be prepared and adopted, which will determine the general strategic goals and planned results for the enterprises, respectively to determine the key indicators for their implementation. For these reasons, this report does not monitor the achievement of objectives and the achievement of the planned results, but aims to review the performance of state-owned public enterprises and to disclose to the competent authorities and the public the results of their activities during the reporting period. The information used in this report is based on the data from the annual financial statements provided by the enterprises in the period 2015- 2019, collected and summarized by the Ministry of Finance pursuant to Decree № 114 of the Council of Ministers of 2010. An analysis of 46 public enterprises, categorized as "large", separately for each of them, using the usual data on the activity of the companies and adjustments were made in both revenues and expenses. For the purposes of the report, income and expenses from the ordinary course of business are taken into account, and those components that are extraordinary, i.e. are not typical for the realization of the activity or do not have the real nature of outgoing or incoming cash flow, are not taken into account.

To compare the performance of enterprises that are commercial companies in 2019, the net debt/equity ratio, among the group of indicators characterizing the capital structure, is used, and among the group of indicators characterizing the efficiency of the enterprise - the return on revenue (ROR). For state-owned enterprises, it is the current ratio of the group among indicators characterizing the solvency of the enterprise that is used, and the return on expenses (ROEX) ratio among the group of indicators characterizing the efficiency of the enterprise's activity. The comparison horizon is 4 years - 2016-2019. In addition, other indicators such as return on expenses, liquidity and leverage for year 2018 and year 2019 are also monitored for each individual enterprise which is a commercial company.

Sales

Sales (BGN billioni) Return on expenses 14 (BGN billion) 13 1,1 12 1,05 11 1 10 0,95 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019

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Consolidated sales revenues resulting from operating activities of state-owned public enterprises from the entire portfolio of the state over the past three years are sustainable, with a slight increase from year to year, reaching BGN 13.4 billion in 2019.

Profit and dividends

Companies with largest share in profits (BGN million) Net profit/loss (BGN million) 1000 BEH KOZLODUY NPP 800 BULGARTRANSGAZ 600 BDB 400 BULGARGAZ 200 Other Total 0 2015 2016 2017 2018 2019 0 200 400 600 800 1 000 1 200 1 400

The profit realized by public enterprises in 2019 amounts to a total of BGN 1,283 million, with the most significant contribution made by companies in the Energy sector - 88.13%, the Economy sector - 6.58%, the Transport sector - 2.55% and Others - 2.74%. The large increase in the net profit from the activity of public enterprises in 2019 is due to the simultaneous increase in total revenues and a significant reduction in their total expenses. The period 2015-2018 is characterized by an increase in the revenues of enterprises and an increase in their expenses. In 2019, however, compared to 2018, total revenues increased by BGN 226 million, from BGN 13,666 million to BGN 13,892 million, and total expenses decreased by BGN 425 million, from BGN 13,427 million to BGN 13,002 million.

Dividend policy It is within the competence of the Council of Ministers Dividend 2014 - 2018 to determine the dividend policy with regard to public (BGN million) enterprises in Bulgaria. 120 In 2020, the Council of Ministers set the amount of the 100 dividend for the financial year of 2019 to be 50% of 80 60 the profit for all state public enterprises. 40 The healthcare facilities for hospital care, the 20 companies from the "Water supply and sewerage" 0 sector, and specific enterprises that intend to make 2014 2015 2016 2017 2018 investments are exempted from the obligation to pay dividends. Enterprises in the Water Supply and Sewerage sector have been excluded from the scope of the Order of the Council of Ministers for determining and depositing in favor of the state deductions from the profits of state-owned enterprises and companies with state participation in the capital since year 2016. The reason is that there is a mechanism for re-investment of the dividend of the water supply and sewerage operators for construction and rehabilitation of the water supply and sewerage infrastructure, 10 as a condition for absorption of the European Structural and Investment Funds (ESIF) for water supply and sewerage for the 2014 - 2020 programming period. Healthcare facilities for hospital care form the Healthcare sector have also been exempted from paying dividends since 2014. The reason is their extreme dependence on a limited number of sources of funding (mainly the National Health Insurance Fund and the Ministry of Health, with a small relative share of own revenues), as well as the existence of a legal ban on commercial transactions, except for medical activities and for patient care (Article 3[4] of the Medical Establishments Act).

Financial results for year 2019 According to the data presented on the individual annual financial statements of the enterprises as of 31.12.2019, including those of the subsidiaries:  161 commercial enterprises report a positive financial result for 2019 in the total amount of BGN 1,283 million, incl. BGN 584 million profit reported by BEH EAD.  97 enterprises generated a loss during the period, in the total amount of BGN 334 million, incl. TPP MARITSA EAST 2 EAD (-202 million BGN).

Consolidated sales revenue of the enterprises increased by 0.4% and total revenues - by 1.6% compared to the previous 2018. More than half of sales revenues (61%) were realized by the Energy sector. Total expenses decreased by 4% and operating expenses of enterprises decreased by 3.1%.

Distribution of sales revenue NEK 21%

Bulgargaz 10%

Kozloduy NPP 10%

TPP Maritsa East 5%

ESO 5%

Other 49%

Statement of profit and loss

BGN million 2019 2018 Statement of profit and loss Total revenues 13 892 13 666 Sales revenues 13 320 13 280 Other revenues 571 386 Expenses Total expenses 13 002 13 427 Operating expenses 12 443 12 973 Other expenses 559 454 Net profit/loss 890 238 11

Balance sheet

BGN million 2019 2018 Assets Total assets, of which: 40 285 37 471 Long-term assets 29 403 28 574 Short-term assets 10 211 8 272 Cash and cash equivalents 3 068 3 471

Liabilities Total liabilities 19 161 17 150 Long-term liabilities 11 787 11 528 Short-term liabilities 6 836 5 107 Equity 21 124 20 320 Total liabilities and equity 40 285 37 470

Risk management State-owned public enterprises are not normally subject to acquisition or sale in order to control the overall risk in the state portfolio. Due to the significant relative share (61%) of companies in the energy sector in the portfolio, the risks arising in this area would have a significant impact on the entire government portfolio and on the revenues that state-owned enterprises generate in the state budget. Risk management is an integral part of the overall responsibility for the company's activities, therefore its management and control bodies (manager, respectively board of directors) are fully responsible for the organization and administration of the company and its affairs, determine the levels and limits of financial risk in public enterprises and manage the risks in their business operations. In this regard, each of the companies prepares its own risk management strategy, which is a requirement of Art. 12 of the Law on Financial Management and Control in the Public Sector.

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INFORMATION ON PUBLIC ENTERPRISES CATEGORIZED AS "LARGE"

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BULGARIAN ENERGY HOLDING EAD (BEH HEAD) 100% state-owned is a holding company that unites companies operating in the Minister of Energy production and transmission of electricity; transmission, transit and storage of natural gas, as well as extraction of lignite coal. Board of Directors: Petar Assenov Iliev – The company is the largest state-owned company in the Chairman until July, Petyo Angelov Ivanov country on the basis of owned assets. – CEO until July, Andon Petrov Andonov – Chairman since July, Zhivko Dimitrov The companies within the BEH Group form the basis of the Dinchev, Jacklen Yosif Cohen – CEO since energy sector in Bulgaria, generating a total of about 60% of July the country's electricity from a mix of nuclear, lignite and hydro energy sources and guaranteeing the supply of natural gas and Independent auditor: HLB Bulgaria Ltd., coal. BEH Group strives to achieve operational efficiency and Reg. №017 ensure sustainable energy in Bulgaria and the region. Remuneration paid to the Board of Directors for 2019: BGN 187,000 BEH EAD ended the year of 2019 with a profit before taxes in the amount of BGN 609,831 thousand. The financial result increased by 68.48% compared to 2018. The net profit of the 2019 2018 company amounts to BGN 584,225 thousand, which is an Statement of profit increase of BGN 220,060 thousand (60.4%). The main revenues and loss, BGN thsd. Total revenues 719 397 560 754 for the company are the dividends received from its Operating 355 607 435 592 subsidiaries (BGN 354,422 thousand for 2019) and the activity revenues of providing services to the subsidiaries through the concluded Net profit/loss 584 225 364 165 Balance sheet, holding agreements. For 2019, the operating expenses amount BGN thsd. to BGN 9,932 thousand, marking a significant decrease of BGN Total assets 6 296 059 5 701 288 79,498 thousand compared to those reported in 2018. Long-term assets 4 705 193 4 484 617 Short-term assets 1 590 866 1 216 671 Total liabilities 2 527 072 2 516 474 Capital structure Long-term 2 291 116 2 472 403 liabilities Net debt/equity ratio Short-term 235 956 44 071 liabilities 1 Equity 3 768 987 3 184 814 Financial ratios 0,8 Return on revenue 0.81 0.65 0,6 Return on 6.57 2.78 expenses 0,4 Liquidity ratio 6.74 27.61 0,2 Indebtedness ratio 0.67 0.79 Leverage ratio 1.67 1.79 0 Dividend, BGN thsd. - - 2016 2017 2018 2019 AFS certified by an Yes independent auditor AFS prepared in Yes Profitability accordance with IAS AFS prepared in No Return on revenue, ROR accordance with the NAS 1

0,8

0,6

0,4

0,2

0 2016 2017 2018 2019

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KOZLODUY NPP EAD is a nuclear power plant and is the 100% owned by BEH EAD largest power plant in Bulgaria, which is a significant factor for Minister of Energy economic stability, both nationally and regionally. After the shutdown of the first four power units, the two 1,000- Board of Directors: Jacklen Cohen - megawatt fifth and sixth units are in operation, which provide Chairman, Ivan Yonchev, Nasko Mihov - more than a third of the electricity produced annually in the CEO country. The financial result of Kozloduy NPP EAD for year 2019 is a Independent auditor: HLB Bulgaria Ltd., profit after tax in the amount of BGN 324,892 thousand, which Reg. №017 is BGN 161.3 million more than the one reported in the Remuneration paid to the Board of previous 2018. Directors for 2019: BGN 437,000 For 2019, the operating revenues from the activity of Kozloduy NPP EAD amount to BGN 1,328 million, by BGN 213 million (19.1%) more than in the previous year. 2019 2018 The expenses for carrying out the operational activity of the Statement of profit and loss, company (continuing activities) in 2019 have a book value of BGN thsd. BGN 969 million and are by BGN 29 million (3.1%) more than Total revenues 1 331 782 1 120 363 Operating the reported for year 2018. 1 327 776 1 114 817 revenues Net profit/loss 324 892 163 546 Balance sheet, Capital structure BGN thsd. Total assets 3 387 144 3 261 379 Net debt/equity ratio Long-term assets 2 448 688 2 594 339 Short-term assets 938 456 667 040 0,3 Total liabilities 705 821 650 170 Long-term 364 462 421 500 0,28 liabilities 0,26 Short-term 341359 228 670 liabilities 0,24 Equity 2 681 323 2 611 209 0,22 Financial ratios 2016 2017 2018 2019 Return on revenue 0.24 0.16 Return on 1.37 1.19 expenses Liquidity ratio 2.75 2.92 Indebtedness ratio 0.26 0.25 Profitability Leverage ratio 1.26 1.25 Dividend, BGN thsd. 162 446 230 056 AFS certified by an Yes Return on revenue, ROR independent auditor 0,3 AFS prepared in Yes accordance with IAS AFS prepared in No 0,2 accordance with the NAS 0,1

0 2016 2017 2018 2019

NATSIONALNA ELEKTRICHESKA KOMPANIA EAD

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(NEK EAD) is a company for trade and production of electricity. 100% owned by BEH EAD NEK EAD owns and operates 30 HPPs and PHESs with a total Minister of Energy installed capacity of 2713 MW in turbine mode and 937 MW in pump mode. Board of Directors: Hristo Velichkov NEK EAD operates and maintains 41 large dam walls, over 500 Georgiev – Chairman, Momchil Vekilov water intake facilities and hundreds of kilometers of non- Vanov, Petar Asenov Iliev/Ivan Todorov pressure and pressure derivations. The total built-up volume of Yonchev – CEO the dams is 50.1% of the total volume of the reservoirs in Bulgaria. Independent auditor: HLB Bulgaria Ltd., The financial result of NEK EAD for 2019 is a profit before taxes Reg. №017 in the amount of BGN 1,646 thousand. Compared to the Remuneration paid to the Board of previous 2018, the result has improved by BGN 79,173 Directors for 2019: BGN 143,980 thousand. The net financial result of the company for 2019 is a loss of BGN 1,260 thousand, with a loss of BGN 73,794 thousand for 2018. 2019 2018 For the period under review NEK EAD realized total revenues in Statement of profit the amount of BGN 2,781,206 thousand, which is by 12.6% less and loss, BGN thsd. Total revenues 2 781 206 3 182 390 compared to the reported revenues in 2018. Sales revenues Operating 2 781 206 3 182 390 decreased to BGN 1,458,672 thousand; as compared to the revenues ones reported in the previous year they are by BGN 677,250 Net profit/loss -1 260 -73 794 Balance sheet, thousand less. The realized revenues from the sale of electricity BGN thsd. to the company in 2019 amount to BGN 1,437,173 thousand, Total assets 5 218 170 5 253 438 which is a decrease of 19.9% (-357,765 thousand BGN). Long-term assets 4 873 659 4 867 952 Short-term assets 344 511 385 486 The total expenses of NEK EAD for 2019 amount to BGN Total liabilities 4 026 588 4 058 805 2,817,351 thousand. Compared to 2018, the expenses Long-term 2 692 839 2 825 620 decreased by BGN 395,449 thousand, or 14%. liabilities Short-term 1 333 749 1 233 185 liabilities Equity 1 191 582 1 194 633 Capital structure Financial ratios Return on revenue 0.00 -0.02 Net debt/equity ratio Return on 0.99 0.99 expenses 3,6 Liquidity ratio 0.26 0.31 Indebtedness ratio 3.38 3.40 3,4 Leverage ratio 4.38 4.40 3,2 Dividend, BGN thsd. - - AFS certified by an Yes 3 independent auditor 2,8 AFS prepared in Yes 2016 2017 2018 2019 accordance with IAS AFS prepared in No accordance with Profitablity the NAS

Return on revenue, ROR

0,01 0 -0,01 -0,02 -0,03 -0,04 -0,05 2016 2017 2018 2019

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ELECTRICITY SYSTEM OPERATOR EAD 100% owned by BEH EAD Minister of Energy Implements the unified operational planning, coordination and management of the electricity system of the Republic of Bulgaria, the joint work of the electricity system with the Supervisory Board: Severin Stefanov electricity systems of other countries, ensures the operation, Vertigov – Chairman until March, Petar maintenance and reliable operation of the electricity network, Statev Petrov – Chairman since March, maintenance of auxiliary networks and repairs and services in Kostadin Vassilev Yazov, Plamen in the field of energy. The company transits electricity through Georgiev Radonov the national network and organizes an electricity market. Management Board: Anton Slavov – Chairman, Plamen Yordanov, Angelin The financial result as of 31.12.2019 before taxes is a profit of Tsachev – CEO BGN 27,086 thousand. The net profit of the company amounts to BGN 24,045 thousand, as compared to the previous 2018 Independent auditor: Zaharinova Nexia there is a decrease in profit by BGN 8,193 thousand. Ltd., Reg. №138 Remunerations paid to the The total realized revenues of the company for 2019 amount Management and Supervisory Boards to BGN 643,311 thousand, including sales revenues amount to for 2019: BGN 522,000. BGN 582,259 thousand, other operating revenues BGN 53,879 thousand. The total reported expenses of the company for the period are BGN 640,569 thousand. 2019 2018 Statement of profit Capital structure and loss, BGN thsd. Total revenues 643 311 686 218 Operating 643 040 684 609 revenues Net debt/equity ratio Net profit/loss 24 045 32 238 0,3 Balance sheet, BGN thsd. Total assets 2 707 956 2 755 229 0,2 Long-term assets 2 408 582 2 334 739 Short-term assets 299 374 420 490 0,1 Total liabilities 583 714 550 186 Long-term 458 432 414 188 0 liabilities 2016 2017 2018 2019 Short-term 125 282 135 998 liabilities Equity 2 124 242 2 205 043 Profitability Financial ratios Return on revenue 0.04 0.05 Return on 1.00 1.03 Return on revenue, ROR expenses Liquidity ratio 2.39 3.09 0,15 Indebtedness ratio 0.27 0.25 Leverage ratio 1.27 1.25 Dividend, BGN thsd. 5 778 100 000 0,1 AFS certified by an Yes independent 0,05 auditor AFS prepared in Yes 0 accordance with IAS 2016 2017 2018 2019 AFS prepared in No accordance with the NAS

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MINI MARITSA IZTOK EAD operates the 100% owned by BEH EAD largest lignite deposit in Bulgaria with a productive Minister of Energy area of 240 sq. km. The company provides raw materials for the four thermal power plants in the Board of Directors: Nikolay Stefanov Maritza East complex, which produce over 30% of Dikov – Chairman, Georgi Ivanov Koev, Bulgaria's electricity. Coal is mined openly, under a Andon Petrov Andonov – CEO 35-year concession agreement with the Bulgarian government concluded in July 2008. Independent auditor: HLB Bulgaria Ltd., Reg. №017 The company ended 2019 with a net profit of BGN Remuneration paid to the Board of 57 thousand, with a reported profit for the previous Directors for 2019: BGN 170,135 2018 of BGN 1,424 thousand. The operating revenues for the analyzed period, including revenues from sales of coal, goods, services and others, amounted to BGN 513,964 2019 2018 thousand and decreased by BGN 18,989 thousand (a Statement of profit 3.56% decrease) compared to those realized for the and loss, BGN thsd. Total revenues 514 315 533 526 past 2018. Operating 513 964 532 953 revenues The total expenses incurred in 2019 amounted to Net profit/loss 57 1 424 BGN 577,502 thousand and an increase of BGN Balance sheet, 34,783 thousand (6.4%) was reported compared to BGN thsd. Total assets 1 188 820 1 204 302 the previous 2018. Long-term assets 816 544 895 808 Short-term assets 372 276 308 494 Total liabilities 350 064 361 903 Long-term 254 607 251 445 Capital structure liabilities Short-term 95 457 110 458 liabilities Equity 838 756 842 399 Net debt/equity ratio Financial ratios 0,44 Return on revenue 0.0001 0.0027 Return on 0.89 0.98 0,42 expenses 0,4 Liquidity ratio 3.90 2.79 Indebtedness ratio 0.42 0.43 0,38 Leverage ratio 1.42 1.43 Dividend, BGN thsd. 28 712 0,36 AFS certified by an Yes 2016 2017 2018 2019 independent auditor AFS prepared in Yes Profitability accordance with IAS AFS prepared in No Return on revenue, ROR accordance with the NAS 0,015

0,01

0,005

0 2016 2017 2018 2019

TPP MARITSA EAST 2 EAD is the largest

18 innovated thermal power plant in the Republic of 100% owned by BEH EAD Bulgaria and on the Balkan Peninsula. The plant Minister of Energy consists of eight power units, all of which operate with modern desulphurization plants. The plant Board of Directors: Prof. Dr. Eng. meets all Bulgarian and European requirements for Boncho Ivanov Bonev – Chairman, environmental protection. Diyan Stanimirov Dimitrov, Eng. Zhivko As of 31.12.2019 TPP Maritsa East 2 EAD reports a Dimitrov Dinchev – CEO negative financial result (loss) before taxes in the amount of BGN 207,512 thousand, which is an Independent auditor: HLB Bulgaria Ltd., improvement of BGN 172,384 thousand compared Reg. №017 to the reported negative financial result (-379,896 Remuneration paid to the Board of thousand BGN) as of 31.12.2018. The net loss of the Directors for 2019: BGN 220,000 company for 2019 amounts to BGN 201,975 thousand. One of the main reasons for the realized losses for the period 2014-2019 is the costs for the purchase of greenhouse gas emission allowances, which in 2019 2018 2019 amount to BGN 306,315 thousand. Statement of profit In 2019, the total amount of the total amount of and loss, BGN thsd. operating income realized by TPP Maritsa East 2 Total revenues 674 081 636 915 Operating 673 980 636 755 EAD amounts to BGN 673,980 thousand, compared revenues to BGN 636,755 thousand reported in the previous Net profit/loss -201 975 -355 349 2018. The increase in the total revenue is by BGN Balance sheet, BGN thsd. 37,225 thousand or 5.85%. Total assets 1 600 100 1 546 881 Long-term assets 1 409 222 1 398 280 Capital structure Short-term assets 190 878 148 601 Total liabilities 1 569 354 1 312 383 Long-term 822 553 231 413 Net debt/equity ratio liabilities 60 Short-term 746 801 1 080 970 liabilities 40 Equity 30 746 234 498 Financial ratios 20 Return on revenue -0.30 -0.56 Return on 0.76 0.64 expenses 0 Liquidity ratio 0.26 0.14 2016 2017 2018 2019 Indebtedness ratio 51.04 5.60 Leverage ratio 52.04 6.60 Dividend, BGN thsd. - - Profitability AFS certified by an Yes independent Return on revenue, ROR auditor AFS prepared in Yes 2 accordance with IAS 1 AFS prepared in No accordance with the NAS 0

-1 2016 2017 2018 2019

19

BULGARGAZ EAD holds the only license for the 100% owned by BEH EAD activity "public supply of natural gas on the territory Minister of Energy of the Republic of Bulgaria" for a period of 35 years. Bulgargaz EAD ensures the consumption on the Board of Directors: Petyo Angelov Ivanov – territory of the country by virtue of long-term and Chairman, Ilian Kirilov Dukov, Nikolay short-term contracts for supply of natural gas from Angelov Pavlov – CEO import and local production. In order to diversify the sources and routes of supply and expand its Independent auditor: HLB Bulgaria Ltd., Reg. activities, the company cooperates with partner №017 companies in the gas sector. Remuneration paid to the Board of Directors The company ended 2019 with a net profit of BGN for 2019: BGN 198,000 34,429 thousand, and in 2018 the company reported a loss of BGN 31,978 thousand. The largest share in the revenues of Bulgargaz EAD holds the revenues from the sale of natural gas - 2019 2018 BGN 1,383,428 thousand or 96.8%. The total Statement of profit revenues for 2019 amount to BGN 1,407,667 and loss, BGN thsd. Total revenues 1 407 667 1 303 874 thousand. Operating 1 404 739 1 303 861 Expenses by economic elements for 2019 amount revenues to BGN 1,364,926 thousand and compared to 2018 Net profit/loss 34 429 -31 978 Balance sheet, are 2.44% more. The cost of natural gas sold has the BGN thsd. largest relative share in the total costs - 98.78% Total assets 426 723 339 742 Long-term assets 21 456 14 031 Short-term assets 405 267 325 711 Total liabilities 187 059 134 499 Capital structure Long-term 50 963 50 316 liabilities Net debt/equity ratio Short-term 136 096 84 183 liabilities 1 Equity 239 664 205 243 Financial ratios Return on revenue 0.02 -0.02 0,5 Return on 1.03 0.97 expenses Liquidity ratio 2.98 3.87 0 Indebtedness ratio 0.78 0.66 2016 2017 2018 2019 Leverage ratio 1.78 1.66 Dividend, BGN thsd. - - AFS certified by an Yes independent Profitability auditor AFS prepared in Yes Return on revenue, ROR accordance with IAS AFS prepared in No 0,06 accordance with 0,04 the NAS 0,02 0 -0,02 -0,04 2016 2017 2018 2019

20

BULGARTRANSGAZ EAD is a nationally 100% owned by BEH EAD responsible combined gas operator, providing Minister of Energy licensed services for transmission and storage of natural gas in Bulgaria. Supervisory Board: Kiril Georgiev Georgiev – Chairman; Ventsislav Tsvetkov Tsvetanov; Bulgartransgaz EAD mission is to provide natural Vladimir Valchev Mitrushev gas transmission according to the interests of the state and society, to ensure secure conditions and Management Board: Tanya Trendafilova gas market sustainable development in the country Zaharieva – Chairperson, Delyan Valentinov and the region, to actively support the liberalization Dimitrov, Vladimir Assenov Malinov – process in the spirit of the common European Executive Director energy policy. As of 31.12.2019, Bulgartransgaz reported a net profit Independent auditor: Grand Thornton Ltd., of BGN 104,654 thousand, while in the previous 2018 Reg. №032 the realized profit amounted to BGN 47,138 thousand. Remuneration paid to the Management Revenues from operating activities amount to BGN Board for 2019: BGN 628,000 357,956 thousand; as compared to the previous year they decreased by BGN 14,872 thousand. Operating expenses (amounting to BGN 253,654 thousand) decreased by BGN 75,607 thousand BGN compared to 2019 2018 the previous year. Statement of profit Major event in 2019 and loss, BGN thsd. Total revenues 370 370 387 419 . The capital of the company has been Operating 357 956 372 828 increased from BGN 874,524,255 to BGN revenues 1,225,519,155. Net profit/loss 104 654 47 138 Balance sheet, BGN thsd. Capital structure Total assets 3 266 601 2 777 786 Long-term assets 2 579 861 2 117 121 Net debt/equity ratio Short-term assets 686 740 660 665 Total liabilities 732 443 323 426 0,4 Long-term 287 612 284 461 liabilities 0,3 Short-term 444 831 38 965 0,2 liabilities Equity 2 534 158 2 454 360 0,1 Financial ratios 0 Return on revenue 0.28 0.12 2016 2017 2018 2019 Return on 1.46 1.18 expenses Liquidity ratio 1.54 16.96 Indebtedness ratio 0.29 0.13 Profitability Leverage ratio 1.29 1.13 Dividend, BGN thsd. 23 569 - Return on revenue, ROR AFS certified by an Yes independent 0,3 auditor AFS prepared in Yes 0,2 accordance with IAS AFS prepared in No 0,1 accordance with the NAS 0 2016 2017 2018 2019

21

STATE ENTERPRISE RADIOACTIVE WASTE 100% state-owned was created on the basis of Article 62[3] of the Minister of Energy Commerce Act by the Safe Use of Nuclear Energy Act (SUNEA) as a non-commercial company for treatment Management Board: Ivan Todorov Andreev, and disposal of hazardous waste; it has no registered Sergey Kirilov Tsochev, Dilyan Milkov Petrov – capital. Executive Director

The object of the enterprise, as defined in the Safe Use Independent auditor: Veles Audit Ltd., Reg. of Nuclear Energy Act (SUNEA), is radioactive waste №170 management, which includes all activities related to the Remuneration paid to the Board of Directors handling, pre-treatment, processing, conditioning, for 2019: BGN 147,758 storage or disposal of radioactive waste.

The activities and maintenance of the enterprise are financed with funds from the Radioactive Waste Fund 2019 2018 (RAWF) and the Nuclear Facilities Decommissioning Statement of profit Fund (NFDF) to the Minister of Energy. and loss, BGN thsd. Total revenues 79 870 97 877 The decommissioning of nuclear facilities is also Operating 79 868 97 873 financed by the Kozloduy International revenues Decommissioning Support Fund (KIDSF) through the Net profit/loss 21 7 Balance sheet, European Bank for Reconstruction and Development BGN thsd. (EBRD). Total assets 258 706 251505 Long-term assets 240 434 235334 Short-term assets 18 272 16 171 The relations between the RAWF, NFDF and the State Total liabilities 262 491 254 792 Enterprise Radioactive Waste are regulated by Long-term 223 002 214 863 Pr contracts, which are concluded annually between the liabilities Short-term 39 489 39 929 of Chairman of the Management Board of the RAWF, liabilities it respectively of the NFDF, and the Executive Director of Equity -3 785 -3 287 ab the Enterprise, while the relations with the EBRD are Financial ratios Return on expenses 1.0003 1.0001 ilit regulated through agreements. Liquidity ratio 0.46 0.40 y AFS certified by an Yes independent auditor Capital structure AFS prepared in Yes accordance with IAS AFS prepared in No Current ratio accordance with 1,0006 the NAS 1,0004 1,0002 3 1 0,9998 2 0,9996

1

0 2016 2017 2018 2019

22

KINTEX EAD was established in 1966. The company has more 100% owned by State Consolidation than 50 years of experience in foreign trade with the full range of Company EAD military products and defense technologies. The main activity of Minister of Economy Kintex is the supply of military equipment for all branches and services of the armed forces, including: . Armament and ammunition; Board of Directors: Anita Petkova . Surveillance, localization and communication equipment; Velikova – Chairperson, Stefka Ivanova . Spare parts for: armament systems; tanks, armored Gramatikova, Yavor Dimitrov Stoykov/ vehicles, helicopters and aircrafts; Ivan Valeriev Penchev – CEO . Training activities and devices; . System engineering, project management, technical Independent auditor: ABVP-Audit assistance and technology transfer; Standard Ltd., Reg. №165 All its products and projects are specifically designed and intended Remuneration paid to the Board of to operate within a wide range of geographical locations and Directors for 2019: BGN 239,000 climatic conditions. The main foreign trade counterparties of the company are from India, Algeria and Ethiopia. As of 31.12.2019, Kintex reports a net profit of BGN 12,273 2019 2018 thousand, while in the previous 2018 the realized profit amounted Statement of profit and to BGN 21,624 thousand. loss, BGN thsd. Total revenues 124 743 256 447 Operating income amounts to BGN 119,800 thousand, and Operating revenues 119 800 244 552 compared to the previous year it decreased by BGN 124,752 Net profit/loss 12 273 21 624 thousand. Operating expenses (amounting to BGN 104,610 Balance sheet, BGN thsd. Total assets 157 334 155 116 thousand) decreased by BGN 112,595 thousand BGN compared to Long-term assets 6 158 7 489 the previous year. Short-term assets 151 176 147 627 Total liabilities 76 231 74 451 Long-term liabilities 21 428 23 879 Capital structure Short-term liabilities 54 803 50 572 Equity 81 103 80 665 Net debt/equity ratio Financial ratios Return on revenue 0.11 0.08 3 Return on expenses 1.12 1.11 Liquidity ratio 2.76 2.92 2 Indebtedness ratio 0.94 0.92 Leverage ratio 1.94 1.92 1 Dividend, BGN thsd. 2 000 10 812 AFS certified by an Yes 0 independent auditor 2016 2017 2018 2019 AFS prepared in No accordance with IAS AFS prepared in Yes Profitability accordance with the NAS

Return on revenue, ROR 0,15

0,1

0,05

0 2016 2017 2018 2019

VAZOVSKI MACHINOSTROITELNI ZAVODI EAD (VMZ) 100% owned by State Consolidation

23 is the largest enterprise of the military-industrial complex in Company EAD Bulgaria, with a subject of activity production and trade in special Minister of Economy products, tools and equipment. It was established in 1936 as a State Military Factory. Over the years, the company has mastered a Board of Directors: Ivan Yordanov number of special and civilian products. Getsov, Atanas Trifonov Bogdanov, Trifon Vasilev Kumchev, Ivan Yordanov As of 31.12.2019 VMZ reports a net profit of BGN 11,113 thousand, Getsov – CEO while in the previous 2018 the company realized a profit of BGN 7,236 thousand. Independent auditor: ABVP-Audit VMZ realized net sales revenues in the amount of BGN 227,122 Standard Ltd., Reg. №165 thousand; as compared to the previous year they increased by BGN Remuneration paid to the Board of 28,888 thousand. Operating expenses (amounting to BGN 240,779 Directors for 2019: BGN 151,000 thousand) increased by BGN 11,922 thousand compared to the previous year. The largest relative share in operating expenses is the cost of raw materials (67.45%), followed by staff costs (24%).

Capital structure Net debt/equity ratio 2019 2018 Statement of profit and 0,8 loss, BGN thsd. Total revenues 256 675 240 499 0,6 Operating revenues 254 204 236 099 0,4 Net profit/loss 11 113 7 236 Balance sheet, BGN thsd. 0,2 Total assets 473 647 463 449 0 Long-term assets 134 985 129 557 2016 2017 2018 2019 Short-term assets 338 662 333 892 Total liabilities 183 588 180 885 Long-term liabilities 13 948 9 729 Short-term liabilities 169 640 171 156 Equity 290 059 282 564 Profitability Financial ratios Return on revenue 0.04 0.03 Return on revenue, ROR Return on expenses 1.05 1.04 Liquidity ratio 2.00 1.95 0,4 Indebtedness ratio 0.63 0.64 0,3 Leverage ratio 1.63 1.64 Dividend, BGN thsd. - - 0,2 AFS certified by an Yes independent auditor 0,1 AFS prepared in accordance No with IAS 0 AFS prepared in accordance Yes 2016 2017 2018 2019 with the NAS

24

BULGARIAN PORTS INFRASTRUCTURE COMPANY 100% state-owned According to the Maritime Spaces, Inland Waterways and Ports Minister of Transport, Information of the Republic of Bulgaria Act (MSIWPRBA) Bulgarian Ports Technology and Communications Infrastructure Company (BPI Co.) is a legal person within the meaning of Article 62[3] of the Commerce Act, with Management Board: Georgi Todorov – Headquarters in Sofia and Branches – Territorial Directorates in Chairman, Anguel Zabourtov – Director Burgas, Varna, Lom and Ruse. General The activity of the Management Board of The state has granted to Bulgarian Ports Infrastructure Company the enterprise is supported by an property – public and private state property, determined by the Economic Council, which consists of the Council of Ministers for implementation of its objects. directors of the branches - territorial divisions of the enterprise, and the Bulgarian Ports Infrastructure Company (BPI Co.) manages the director of the Director of Infrastructure, infrastructure of the ports for public transport of national Port Water Area and Property Directorate importance in accordance with the provisions of the with BPI Co. MSIWPRBA. BPI Co. is responsible for providing information on traffic management and shipping information services, Independent auditor: Audit Consult 2004 disseminating maritime safety information and maintaining. OOD, Reg. №122 Remuneration paid to the Management Board for 2019: BGN 140,535 Capital structure

Current ratio 2019 2018 15 Statement of profit and loss, BGN thsd. 10 Total revenues 43 854 38 604 Operating 43 854 38 604 5 revenues Net profit/loss -6 656 -12 744 0 Balance sheet, 2016 2017 2018 2019 BGN thsd. Total assets 1 214 619 941 481 Long-term assets 992 922 910 969 Short-term assets 221 697 30 512 Total liabilities 92 395 97 421 Profitability Long-term 70 920 77 509 liabilities Short-term 21 475 19 912 liabilities Return on expenses, ROEX Equity 1 122 224 844 060 Financial ratios Return on expenses 0.86 0.73 1,5 Liquidity ratio 10.32 1.53 1 AFS certified by an Yes independent 0,5 auditor AFS prepared in No 0 accordance with IAS 2016 2017 2018 2019 AFS prepared in Yes accordance with the NAS

25

TRANSPORT CONSTRUCTION AND RECOVERY EAD 100% state-owned was established as a joint stock company through the Minister of Transport, Information transformation of the State Enterprise "Transport Construction Technology and Communications and Reconstruction" in May 2019. Board of Directors: Todor Kondakov –, The state-owned enterprise continues the traditions of the Marin Hristov, Bozhidar Dzhelebov – CEO Transport Troops, which have a 114-year history. Established in 1888 by Prince Ferdinand, they performed tasks for the Independent auditor: Radka Boevska, operation, construction and reconstruction of railways and №0270 highways in the country and in the theater of operations during Remuneration paid to the Board of the Balkan Wars (1912-1913), the First World War and The Directors for 2019: BGN 109,000 Patriotic War (1944 - 1945).

The company specializes in construction, reconstruction, repair and electrification of railway lines, construction of new railway 2019 2018 stations and reconstruction of existing ones, construction of Statement of profit and railway signaling and telecommunication works, as well as loss, BGN thsd. Total revenues 21 817 construction of new tram and trolleybus lines and reconstruction Operating revenues 21 561 of existing ones. Net profit/loss 85 Balance sheet, BGN thsd. Total assets 235 340 As of 31.12.2019, Transport Construction and Recovery EAD Long-term assets 53 819 reported a net profit of BGN 85 thousand. Short-term assets 181 521 Operating revenues amount to BGN 21,561 thousand. Operating Total liabilities 191 839 Long-term liabilities 2 401 expenses amount to BGN 21,536 thousand. Short-term liabilities 189 438 Equity 43 501 Financial ratios Return on revenue 0.0039 Return on expenses 1,01 Liquidity ratio 0.96 Indebtedness ratio 4,41 Leverage ratio 5.41 Dividend, BGN thsd. 38 - AFS certified by an Yes independent auditor AFS prepared in accordance No with IAS AFS prepared in accordance Yes with the NAS

26

BULGARIAN AIR TRAFFIC SERVICES 100% state-owned Minister of Transport, Information Technology AUTHORITY (BULATSA) is a legal entity, a state and Communications enterprise within the meaning of Article 62[3] of the

Commerce Act, having its seat in the city of Sofia. BULATSA Management Board: Veselina Karamileva- holds a license to provide air navigation services and Todorova, Desislava Zamfirova, Georgi Peev – performs state functions for provision of air navigation Director General services in the serviced civil airspace of the Republic of

Bulgaria, in conformity with the Civil Aviation Act, the Independent auditor: Grand Thornton Ltd., Reg. ratified international agreements in the field of civil №032 aviation, to which the Republic of Bulgaria is a party, and Remuneration paid to the Management Board the applicable regulations of the European Union. for 2019: BGN 808,000

The state has provided BULATSA with property - public and private state property for the implementation of its objects. The activities of BULATSA are mainly financed by the collected fees for the provision of air navigation 2019 2018 Statement of profit services according to the principles of the 1944 Chicago and loss, BGN thsd. Convention on International Civil Aviation. Total revenues 256 429 218 142 Operating 256 142 218 020 The company's achievements in recent years are measured revenues Net profit/loss 18 252 30 884 by concrete results - increased levels of safety, modernized Balance sheet, BGN thsd. route network, significant increase in air traffic and improved quality of services provided. Total assets 429 852 416 672 Long-term assets 205 379 204 365 Short-term assets 224 473 212 307 Total liabilities 74 894 65 328 Major event in 2019 Long-term 25 136 24 657 liabilities . There are plans for the financial year 2019 for Short-term 49 758 40 671 liabilities BULATSA to distribute in favor of the state 100 percent of its profit on the annual financial Equity 354 958 351 344 Deductions for the 18 252 15 442 statements for 2019. The company marked stable state Pro financial results and accumulated reserves Financial ratios fita significantly exceeding the amount of the required Return on expenses 1.09 1.19 bilit premium reserve under Ordinance № 140/2001. Liquidity ratio 4.51 5.22 y AFS certified by an Yes Capital structure independent Return on expenses, ROEX auditor AFS prepared in Yes accordance with IAS 1,2 Current ratio AFS prepared in No 1,15 accordance with 6 the NAS 1,1 1,05 4 1 2016 2 0 2016 2017 2018 2019

HOLDING BDZ EAD is a holding company that unites companies operating in the field of passenger and freight 27 transportation by rail. 100% state-owned Minister of Transport, Information As of 31.12.2019, the holding reports a net loss of BGN Technology and Communications 8,038 thousand, while in the previous 2018 it realized a loss of BGN 8,657 thousand. Operating revenues Board of Directors: Grigori Grigorov, amounted to BGN 4,764 thousand; as compared to the Svetlomir Nikolov, Nikola Vassilev – previous year they decreased by BGN 3,603 thousand. Executive Director Operating expenses (amounting to BGN 8,116 thousand) decreased by BGN 4,438 thousand compared to the Independent auditor: ABVP-Audit previous year. Standard Ltd., Reg. №165 Remuneration paid to the Board of Major events in 2019 Directors for 2019: BGN 100,800 . The restructuring of companies, optimization of costs and increase of revenues have started in the

railway sector in order to improve their economic and financial condition. 2019 2018 . In December 2019, the Council of Ministers Statement of profit and decided to increase the capital of the company loss, BGN thsd. through a non-monetary contribution, Total revenues 4 800 8 367 Operating revenues 4 764 8 367 representing a receivable of the state against the Net profit/loss -8 038 -8 657 holding, amounting to BGN 219,972,933.81, Balance sheet, BGN thsd. following a notification by the European Total assets 256 338 256 272 Long-term assets 226 419 226 686 Commission for state aid. Short-term assets 29 919 29 586 Total liabilities 255 841 247 746 Capital structure Long-term liabilities 23 662 170 763 Short-term liabilities 232 179 76 983 Net debt/equity ratio Equity 497 8 526 Financial ratios 600 Return on revenue -1.67 -1.03 Return on expenses 0.23 0.38 400 Liquidity ratio 0.13 0.38 Indebtedness ratio 514.77 29.06 200 Leverage ratio 515.77 30.06 Dividend, BGN thsd. - - 0 AFS certified by an Yes 2016 2017 2018 2019 independent auditor AFS prepared in Yes accordance with IAS AFS prepared in No Profitability accordance with the NAS Return on revenue, ROR 0 -0,5 -1 -1,5 -2 -2,5 2016 2017 2018 2019

BDZ PASSENGER SERVICES LTD. specializes in rail passenger transport in domestic and/or international traffic, 100% owned by BDZ Holding hire of locomotive traction and wagons for rail passenger transport, maintenance and repair of rolling stock Manager – Lyuben Nanov 28

(locomotives and wagons). Procurator – Ivan Valchev The company is jointly represented by the As of 31.12.2019, the company reported a net loss of BGN Manager and the Procurator 5,109 thousand, while in the previous 2018 it realized a profit of BGN 1,892 thousand. Operating revenues amount Independent auditor: HLB Bulgaria Ltd., Reg. to BGN 265,995 thousand; as compared to the previous year №017 they decreased by BGN 2,434 thousand. Operating expenses Remunerations paid to the manager and the (amounting to BGN 280,634 thousand) increased by BGN procurator for 2019: BGN 80,640 11,428 thousand compared to the previous year.

Major event in 2019 2019 2018 . The restructuring of companies, optimization of Statement of profit and loss, costs and increase of revenues have started in the BGN thsd. railway sector in order to improve their economic Total revenues 266 232 268 694 Operating revenues 265 995 268 429 and financial condition. Net profit/loss -5 109 1 892 Balance sheet, BGN thsd. Capital structure Total assets 336 581 329 472 Long-term assets 245 140 253 697 Short-term assets 91 441 75 775 Total liabilities 189 136 174 000 Net debt/equity ratio Long-term liabilities 110 852 104 958 Short-term liabilities 78 284 69 042 2 Equity 147 445 155 472 1,5 Financial ratios Return on revenue -0.02 0.01 1 Return on expenses 0.95 1.00 0,5 Liquidity ratio 1.17 1.10 Indebtedness ratio 1.28 1.12 0 Leverage ratio 2.28 2.12 2016 2017 2018 2019 Dividend, BGN thsd. - - AFS certified by an independent Yes auditor AFS prepared in accordance with Yes Profitability IAS AFS prepared in accordance with No the NAS Return on revenue, ROR 0,02 0,01 0 -0,01 -0,02 -0,03 -0,04 2016 2017 2018 2019

BDZ CARGO SERVICES LTD. specializes in rail freight, hire of locomotive traction and wagons for rail freight, maintenance and 100% owned by BDZ Holding repair of rolling stock (locomotives and wagons).

Manager – Ivan Lichev As of 31.12.2019, the company reports a net loss of BGN 7,605 Procurator – Svetlomir Nikolov thousand; as compared to the previous 2018 the loss increased by The company is jointly represented by 29

BGN 4,809 thousand. Operating revenues amount to BGN 122,213 the Manager and the Procurator thousand; as compared to the previous year they increased by BGN 5,796 thousand. Operating expenses (amounting to BGN Independent auditor: HLB Bulgaria Ltd., 135,653 thousand) increased by BGN 13,461 thousand compared Reg. №017 to the previous year. Remunerations paid to the Manager and the Procurator for year 2019: BGN 69,430 Major event in 2019 . The restructuring of companies, optimization of costs and

increase of revenues have started in the railway sector in order to improve their economic and financial condition. 2019 2018 Statement of profit and Capital structure loss, BGN thsd. Total revenues 122 371 116 554 Operating revenues 122 213 116 417 Net debt/equity ratio Net profit/loss -7 605 -2 796 Balance sheet, BGN thsd. 1,5 Total assets 199 695 204 852 Long-term assets 158 836 160 719 1 Short-term assets 40 859 44 133 Total liabilities 115 037 111 915 0,5 Long-term liabilities 71 627 64 634 Short-term liabilities 43 410 47 281 0 Equity 84 658 92 937 Financial ratios 2016 2017 2018 2019 Return on revenue -0.06 -0.02 Return on expenses 0.90 0.95 Liquidity ratio 0.94 0.93 Indebtedness ratio 1.36 1.20 Profitability Leverage ratio 2.36 2.20 Dividend, BGN thsd. - - AFS certified by an Yes Return on revenue, ROR independent auditor AFS prepared in accordance Yes 0 with IAS AFS prepared in accordance No -0,02 with the NAS -0,04 -0,06 -0,08 2016 2017 2018 2019

NATIONAL RAILWAY INFRASTRUCTURE

COMPANY is a legal entity, a state enterprise within the 100% state-owned meaning of Article 62[3] of the Commerce Act, having its seat in Minister of Transport, Information the city of Sofia. Technology and Communications NRIC has existed since the beginning of 2002 and is the largest state-owned enterprise and the only railway infrastructure Management Board: Ivan Markov, Hristo manager in Bulgaria. Aleksiev, Krasimir Papukchiyski – Director

30

General The enterprise organizes, implements and is responsible for the fulfillment of obligations under a long-term contract concluded Independent auditor: ABVP-Audit Standard with the state, plans the overall activity for development of the Ltd., Reg. №165 railway infrastructure in accordance with it. Remuneration paid to the Management The main activity of the company is: carrying out activities for Board, the Director General and the Audit the development, repair, maintenance and operation of railway Committee for 2019: BGN 182,000 infrastructure and implementation of investment policy in the development and modernization, maintenance and repair of railway infrastructure for the implementation of European 2019 2018 criteria and standards, etc. Statement of profit and loss, BGN thsd. The state has provided NRIC with property - public and private Total revenues 478 826 425 245 Operating 477 797 424 549 state property for the implementation of its objects. NRIC is a revenues beneficiary under Operational Programme “Transport and Net profit/loss -23 001 -81 648 Transport Infrastructure” (2007–2013), Operational Programme Balance sheet, BGN thsd. “Transport and Transport Infrastructure” (2014–2020), Total assets 4 296 290 4 310 634 Connecting Europe Facility. Long-term assets 3 986 522 3 949 488 Short-term assets 309 768 361 146 Total liabilities 2 950 939 2 938 962 Capital structure Long-term 2 907 590 2 831 893 liabilities Short-term 43 349 107 069 Current ratio liabilities Equity 1 345 351 1 371 672 8 Financial ratios Return on expenses 0.95 0.83 6 Liquidity ratio 7.15 3.37 4 AFS certified by an Yes independent auditor 2 AFS prepared in accordance with No 0 IAS 2016 2017 2018 2019 AFS prepared in accordance Yes with the NAS

Profitability

Return on expenses, ROEX

1 0,95 0,9 0,85 0,8 0,75 2016 2017 2018 2019

PORT OF VARNA EAD is based in the third largest city in the

country and the main center of one of the most economically 100% state-owned developed areas. The company serves pan-European transport Minister of Transport, Information corridors: Pan-European Corridors No. 8, Optional No. 7 (Rhine- Technology and Communications Main-Danube) and TRACECA international transport corridor

(Europe-Caucasus-Asia). Its activities include port activities and Board of Directors: Tihomir Todorov, related agency, commercial and technical services; forwarding, Dimitar Atanasov, Petar Seferov – investment and engineering activities; research and development; Executive Director

31 training and qualification of staff; domestic and foreign trade. Independent auditor: Svrakov and Milev As of 31.12.2019, the port reported a net profit of BGN 1,082 Ltd., Reg. №087 thousand, while in the previous 2018 the company realized a profit Remuneration paid to the Board of of BGN 10,580 thousand. Directors for 2019: BGN 153,000 Operating revenues amount to BGN 61,545 thousand; as compared to the previous year they decreased by BGN 9,652 thousand. Operating expenses (amounting to BGN 60,324 thousand) increased by BGN 879 thousand compared to the previous year.

2019 2018 Statement of profit and Capital structure loss, BGN thsd. Total revenues 61 622 71 257 Operating revenues 61 545 71 197 Net debt/equity ratio Net profit/loss 1 082 10 580 Balance sheet, BGN thsd. 0,6 Total assets 71 311 77 621 Long-term assets 41 571 44 358 0,4 Short-term assets 29 740 33 263 Total liabilities 20 326 22 275 0,2 Long-term liabilities 10 140 12 532 Short-term liabilities 10 186 9 743 0 Equity 50 985 55 346 Financial ratios 2016 2017 2018 2019 Return on revenue 0.02 0.15 Return on expenses 1.02 1.20 Liquidity ratio 2.92 3.41 Indebtedness ratio 0.40 0.40 Profitability Leverage ratio 1.40 1.40 Dividend, BGN thsd. 541 5 443 AFS certified by an Да independent auditor Return on revenue, ROR AFS prepared in Не 0,2 accordance with IAS AFS prepared in Да 0,15 accordance with the NAS 0,1 0,05 0 2016 2017 2018 2019

32

SOFIA AIRPORT EAD is the licensed airport operator of the largest 100% state-owned international airport in the Republic of Bulgaria and in the last 10 years Minister of Transport, Information has implemented an ambitious investment program, including the Technology and Communications construction of a second passenger terminal, a new runway and a number of ancillary facilities. Its activities include airport flight support, Board of Directors: Asya Ivanova, Maya ground handling of aircraft, passenger service, handling of luggage, Andreeva and Vladimir Rapondzhiev – cargo and mail. Executive Director

As of 31.12.2019, the airport reported a net profit of BGN 12,899 Independent auditor: Grand thousand, while in the previous 2018 the realized profit amounted to Thornton Ltd., Reg. №032 BGN 12,635 thousand. Remuneration paid to the Board of Operating revenues amount to BGN 181,408 thousand; as compared to Directors and the Audit Committee for the previous year they increased by BGN 13,042 thousand. Operating 2019: BGN 212,000 expenses (amounting to BGN 168,720 thousand) increased by BGN

13,641 thousand compared to the previous year.

2019 2018 Capital structure Statement of profit and loss, BGN thsd. Total revenues 183 059 169 144 Operating revenues 181 408 168 366 Net debt/equity ratio Net profit/loss 12 899 12 635 3 Balance sheet, BGN thsd. Total assets 307 619 252 088 2 Long-term assets 11 753 17 611 Short-term assets 295 866 234 477 1 Total liabilities 192 889 143 909 Long-term liabilities 1 237 1 221 0 Short-term liabilities 191 652 142 688 Equity 114 730 108 179 2016 2017 2018 2019 Financial ratios Return on revenue 0.07 0.07 Return on expenses 1.08 1.09 Liquidity ratio 1.54 1.64 Profitability Indebtedness ratio 1.68 1.33 Leverage ratio 2.68 2.33 Dividend, BGN thsd. 6 449 6 317 Return on revenue, ROR AFS certified by an Yes independent auditor 0,1 AFS prepared in Yes accordance with IAS 0,05 AFS prepared in No 0 accordance with the NAS -0,05 -0,1 -0,15 2016 2017 2018 2019

BULGARIAN POSTS EAD is the enterprise entrusted with 33 the construction, use and maintenance of the national postal 100% state-owned network, provision of domestic and international postal services, Minister of Transport, Information money transfer and payment activities, printing and distribution Technology and Communications of stamps and documentary books under control, printing of valuables. securities, according to a license obtained from the Board of Directors: Nikola Sherletov, Ministry of Finance, distribution of printed publications, Emilia Facheva; Deyan Daneshki – information services and others. Its network includes 2,981 post Executive Director offices, which cover even the most remote settlements in the country. Independent auditor: Grand Thornton Ltd., Reg. №032 As of 31.12.2019, the company realized a loss from its overall Remuneration paid to the Board of operations in the amount of BGN 1,111 thousand, with a Directors for 2019: BGN 147,588 reported loss of BGN 3,317 thousand for the previous year. The total amount of revenues for 2019 amounts to BGN 174,256 thousand. Compared to the report for 2018, BGN 16,307 thousand were realized in excess, or an increase of 10.326%. 2019 2018 Income from financing for services of general economic interest Statement of profit and (Universal Postal Service and “pension payment” service) and the loss, BGN thsd. financing under projects amount to BGN 62,084 thousand and is Total revenues 174 256 157 949 Operating revenues 174 220 157 864 by 21.9% more than reported for 2018. Net profit/loss -1 111 -3 317 The total amount of expenses for 2019 amounts to BGN 176,083 Balance sheet, BGN thsd. thousand. Compared to the previous year, the company realized Total assets 227 485 203 864 Long-term assets 135 829 98 347 higher expenses by BGN 9,747 thousand, or by 5.85%. Short-term assets 91 656 105 517 Total liabilities 191 092 164 100 Capital structure Long-term liabilities 37 792 22 125 Short-term liabilities 153 300 141 975 Equity 36 393 39 764 Financial ratios Net debt/equity ratio Return on revenue -0.01 -0.02 15 Return on expenses 0,99 0.95 Liquidity ratio 0.60 0.74 Indebtedness ratio 5.25 4.13 10 Leverage ratio 6.25 5.13 Dividend, BGN thsd. - - 5 AFS certified by an Yes independent auditor 0 AFS prepared in accordance Yes 2016 2017 2018 2019 with IAS AFS prepared in accordance No with the NAS Profitability

Return on revenue, ROR 0

-0,02

-0,04

-0,06 2016 2017 2018 2019

WATER SUPPLY AND SEWERAGE EAD, BURGAS is 100% state-owned Minister of Regional Development and 34 an enterprise that performs transactions in water supply and Public Works sewerage, irrigation, hydropower, drainage, construction, maintenance and use of water management systems or separate Board of Directors: Ioannis Parmenion reservoirs, research and design in the field of water supply and Parteniotis – Chairman, Krassimir sewerage, operation of dams, engineering geological and Atanasov Zhelev, Nasko Nikolov Drakov, hydrogeological; public works, landscaping, geodetic works, etc., Gancho Yovchev Tenev – Executive in all settlements in Burgas region. The company operates in 250 Director settlements. Independent auditor: RSM BG Ltd., Reg. As of 31.12.2019, WSS - Burgas reports a net profit of BGN 2,719 №173 thousand, while in the previous 2018 the realized profit Remuneration paid to the Board of amounted to BGN 2,834 thousand. Directors for 2019: BGN 196,000 Operating revenues amount to BGN 65,739 thousand, and compared to the previous year they increased by BGN 5,811 thousand. Operating expenses (amounting to BGN 75,473 2019 2018 thousand) increased by BGN 6,626 thousand compared to the Statement of profit and previous year. loss, BGN thsd. Total revenues 65 740 59 935 Operating revenues 65 739 59 928 Net profit/loss 2 719 2 834 Capital structure Balance sheet, BGN thsd. Total assets 78 736 86 127 Long-term assets 38 251 41 913 Net debt/equity ratio Short-term assets 40 485 44 214 Total liabilities 48 111 58 161 3 Long-term liabilities 29 892 33 545 Short-term liabilities 18 219 24 616 2 Equity 30 625 27 966 Financial ratios 1 Return on revenue 0.04 0.05 Return on expenses 0.85 0.85 0 Liquidity ratio 2.22 1.80 Indebtedness ratio 1.57 2.08 2016 2017 2018 2019 Leverage ratio 2.57 3.08 Exempt from dividend payment Profitability AFS certified by an Yes independent auditor AFS prepared in Yes Return on revenue, ROR accordance with IAS AFS prepared in No 0,06 accordance with the NAS

0,04

0,02

0 2016 2017 2018 2019

35

WATER SUPPLY AND SEWERAGE LTD., VARNA is an 51% state-owned enterprise operating in important areas – water supply, drainage Minister of Regional Development and and wastewater treatment, construction, design and engineering. Public Works The company maintains, operates and manages the water supply and sewerage networks and systems, facilities and treatment Manager: Valentin Donev Valkanov plants on the territory of Varna region. The service area has a population of over 468,220 inhabitants, living on the territory of 12 Independent auditor: Finance Audit municipalities with a total of 158 settlements. Consult 2002 Ltd., Reg. №101 Remuneration paid to the Manager for The state owns 51% of the company shares, and the other 2019: BGN 80,000 members are 10 municipalities in the Varna region.

As of 31.12.2019, WSS - Varna reports a net profit of BGN 1,500 2019 2018 thousand, while in the previous 2018 the realized profit amounted Statement of profit and to BGN 1,464 thousand. loss, BGN thsd. Total revenues 68 938 65 693 Operating revenues amount to BGN 67,817 thousand; as compared Operating revenues 67 817 64 538 to the previous year they increased by BGN 3,279 thousand. Net profit/loss 1 500 1 464 Operating expenses (amounting to BGN 66,013 thousand) Balance sheet, BGN thsd. Total assets 64 307 66 650 increased by BGN 5,462 thousand compared to the previous year. Long-term assets 37 431 39 810 Short-term assets 26 876 26 840 Capital structure Total liabilities 58 068 61 459 Long-term liabilities 42 120 45 670 Short-term liabilities 15 948 15 789 Equity 6 239 5 191 Net debt/equity ratio Financial ratios Return on revenue 0.02 0.02 20 Return on expenses 1.02 1.05 15 Liquidity ratio 1.69 1.70 Indebtedness ratio 9.31 11.84 10 Leverage ratio 10.31 12.84 5 Exempt from dividend payment 0 AFS certified by an Yes 2016 2017 2018 2019 independent auditor AFS prepared in Yes accordance with IAS Profitability AFS prepared in No accordance with the NAS Return on revenue, ROR 0,025 0,02 0,015 0,01 0,005 0 2016 2017 2018 2019

WATER SUPPLY AND SEWERAGE EOOD, PLOVDIV is

36 an enterprise whose activity includes operation, maintenance and 100% state-owned repair of water supply and sewerage networks and systems, Minister of Regional Development and sampling and testing of water for drinking and domestic purposes, Public Works groundwater, industrial, surface-flowing and wastewater and wastewater treatment. It serves 210 settlements, of which 194 Manager: Spartak Lavov Nikolov, villages and 16 towns with a population of 733,700 people from the Controller – Valentin Vassilev municipalities of Plovdiv, Karlovo, Parvomay, Asenovgrad, Hissar, Saedinenie, Rakovski, Brezovo, Maritsa, Rodopi, Krichim, Kuklen, Independent auditor: ZAHARINOVA Stamboliyski, Sopot, Perushtitsa, Sadovo, Kaloyanovo, Laki. NEXIA Ltd., reg. 38138 Remuneration paid to the Manager and As of 31.12.2019, WSS - Plovdiv reported a net profit of BGN 568 Controller for 2019: BGN 106,000 thousand, while in the previous 2018 the realized profit amounted to BGN 675 thousand.

Operating revenues amount to BGN 61,875 thousand; as compared to the previous year they decreased by BGN 280 thousand. 2019 2018 Operating expenses (amounting to BGN 59,546 thousand) increased Statement of profit and by BGN 698 thousand compared to the previous year. loss, BGN thsd. Total revenues 61 875 62 155 Operating revenues 61 875 62 155 Net profit/loss 568 675 Capital structure Balance sheet, BGN thsd. Total assets 53 026 53 790 Long-term assets 35 291 36 772 Net debt/equity ratio Short-term assets 17 735 17 018 Total liabilities 58 021 59 594 0 Long-term liabilities 31 444 37 871 Short-term liabilities 26 577 21 723 -5 Equity -4 995 -5 804 -10 Financial ratios Return on revenue 0.01 0.01 -15 Return on expenses 1.01 1.03 -20 Liquidity ratio 0.67 0.78 Indebtedness ratio -11.62 -10.27 2016 2017 2018 2019 Leverage ratio -10.62 -9.27 Exempt from dividend payment AFS certified by an Yes Profitability independent auditor AFS prepared in Yes accordance with IAS AFS prepared in No Return on revenue, ROR accordance with the NAS 0,08 0,06 0,04 0,02 0 2016 2017 2018 2019

37

WATER SUPPLY AND SEWERAGE EOOD, STARA 100% state-owned Minister of Regional Development and ZAGORA is an enterprise that provides drinking water supply, Public Works drainage and wastewater treatment of settlements in the Stara

Zagora province. The company maintains and operates the water Manager: Rumen Tenev Raykov supply systems of 202 settlements with a population of 370,962 inhabitants (99.65% of the population). Independent auditor: ANDA

CONSULTING Ltd., reg. № 128 The production processes in its main activities are largely Remuneration paid to the Manager and automated through implemented telesignaling and dispatching. Controller for 2019: BGN 116,000 When replacing external water supply systems and reconstructing the internal water supply networks, high-density polyethylene pipes and fiberglass are successfully used.

As of 31.12.2019, WSS - Stara Zagora reports a net profit of BGN 2019 2018 Statement of profit and 605 thousand, while in the previous 2018 the realized profit loss, BGN thsd. amounted to BGN 2,465 thousand. Total revenues 36 771 35 827 Operating revenues amount to BGN 36,472 thousand; as compared Operating revenues 36 472 35 550 to the previous year they increased by BGN 922 thousand. Net profit/loss 605 2 465 Balance sheet, BGN thsd. Operating expenses (amounting to BGN 35,399 thousand) increased Total assets 17 348 15 896 by BGN 3,614 thousand compared to the previous year. Long-term assets 10 550 7 415 Short-term assets 6 798 8 481 Total liabilities 13 712 15 875 Long-term liabilities 4 230 6 492 Short-term liabilities 9 482 9 383 Capital structure Equity 3 636 21 Financial ratios Return on revenue 0.02 0.07 Return on expenses 1.03 1.12 Net debt/equity ratio Liquidity ratio 0.72 0.90 1000 Indebtedness ratio 3.77 755.95 Leverage ratio 4.77 756.95 Exempt from dividend 500 payment AFS certified by an Yes 0 independent auditor AFS prepared in Yes -500 accordance with IAS 2016 2017 2018 2019 AFS prepared in No accordance with the NAS

Profitability

Return on revenue, ROR 0,08 0,06 0,04 0,02 0 -0,02 -0,04 2016 2017 2018 2019

38

AVTOMAGISTRALI EAD is an enterprise that maintains 100% state-owned sections and road connections of the highways Hemus, Trakia, Minister of Regional Development and Maritsa, Struma and Lyulin Motorway with a total length of 435 Public Works km. Its creation was imposed by the need for the sections of the Trakia Motorway and the Hemus Motorway put into operation to Board of Directors: Aleksander be maintained by an independent, specialized unit, taking into Kostadinov Filev – Chairman, Ivan account the special requirements for this class of roads.. Denchev Kolarov, Stoyan Fyodorov Belichev – Executive Director As of 31.12.2019, Avtomagistrali EAD reported a net profit of BGN 6,764 thousand, while in the previous 2018 the realized profit Independent auditor: EXISTRA Ltd., reg. amounted to BGN 5,682 thousand. № 143 Operating revenues amount to BGN 100,900 thousand, and Remuneration paid to the Board of compared to the previous year they increased by BGN 20,493 Directors for 2019: BGN 149,000

thousand. Operating expenses (amounting to BGN 93,010 thousand) increased by BGN 18,941 thousand compared to the previous year. 2019 2018 Statement of profit and loss, BGN thsd. Total revenues 101 901 80 407 Operating revenues 100 900 80 407 Net profit/loss 6 764 5 682 Capital structure Balance sheet, BGN thsd. Total assets 511 343 58 671 Long-term assets 14 938 7 946 Short-term assets 496 405 50 725 Net debt/equity ratio Total liabilities 485 326 38 105 Long-term liabilities 7 544 3 711 20 Short-term liabilities 477 782 34 394 15 Equity 26 017 20 566 26 071 10 Financial ratios 5 Return on revenue 0.07 0.07 Return on expenses 1.08 1.09 0 Liquidity ratio 1.04 1.47 2016 2017 2018 2019 Indebtedness ratio 18.65 1.85 Leverage ratio 19.65 2.85 Dividend, BGN thsd. 1 245 3 382 Profitability AFS certified by an Yes independent auditor AFS prepared in Yes accordance with IAS Return on revenue, ROR AFS prepared in No 0,3 accordance with the NAS

0,2

0,1

0 2016 2017 2018 2019

SOUTH-WEST STATE ENTERPRISE – 39

BLAGOEVGRAD is a legal entity, a state enterprise within the meaning of Article 62[3] of the Commerce Act, established 100% state-owned on the basis of the Forest Act in 2011. Minister of Agriculture, Food and Forestry The company manages the state forest territories in eight administrative districts – Blagoevgrad, Kyustendil, Sofia city, Management Board: Maria Yordanova Sofia province, Pazardzhik (Belovo State Forestry), Plovdiv Marinova – Chairperson, Eng. Vanya (Krichim State Hunting Farm), Pernik and Lovech (Teteven State Blagoeva Kamenova, Damyan Iliev Forestry). It consists of 40 territorial divisions, of which 34 state Damyanov – Director forestries and 6 – state hunting farms. Independent auditor: Nadka Stoyanova, The total area of the forest territories included in the scope of №0143 and Milena Stoyanova, №0783 the Southwestern State Enterprise is 955,756 ha, of which Remuneration paid to the Management 677,316 hectares are the state forest territories (70.9%). This is Board for 2019: BGN 109,615

an extremely rich natural resource, which determines a large volume of activities in the forests. 2019 2018 Hunting economic activity is concentrated in the five state Statement of profit hunting farms - "Iskar", "Vitoshko Studena", "Aramliets", and loss, BGN thsd. Total revenues 74 753 71 872 "Dikchan", "Osogovo" and "Krichim". The efforts of hunting Operating 74 420 71 576 specialists are aimed at improving the gene pool and health of revenues game populations in order to achieve better exterior and trophy Net profit/loss 171 678 Balance sheet, qualities. BGN thsd. Total assets 292 392 282 887 The state has provided the South-West State Enterprise with Long-term assets 267 984 260 250 Short-term assets 24 408 22 637 property – public and private state property for the Total liabilities 96 996 86 976 implementation of its objects. Long-term 68 766 68 280 liabilities Short-term 28 230 18 696 Capital structure liabilities Equity 195 396 195 911 Deductions for the 77 305 Current ratio state Financial ratios 2 Return on expenses 1.01 1.01 Liquidity ratio 0.86 1.21 1,5 AFS certified by an Yes 1 independent auditor 0,5 AFS prepared in No 0 accordance with IAS 2016 2017 2018 2019 AFS prepared in Yes accordance with the NAS Profitability

Return on expenses, ROEX

1,04 1,03 1,02 1,01 1 2016 2017 2018 2019

40

SOUTH-EAST STATE ENTERPRISE – SLIVEN is a legal 100% state-owned entity, a state enterprise within the meaning of Article 62[3] of Minister of Agriculture, Food and the Commerce Act, established on the basis of the Forest Act in Forestry 2011. Management Board: Maria Petkova The company manages the state forest territories in five Mihailova – Chairperson, Slavina Ivanova administrative districts – Burgas, Sliven, Haskovo, Stara Zagora Popova-Koleva, Eng. Peycho Ivanov and Yambol. The company includes 31 territorial divisions, incl. Varbanov – Director twenty-six state forestries and five state hunting farms. The total area of the forest territories falling within the Independent auditor: BISICOM 61 Ltd., territorial scope of the enterprise is 918,467 hectares, incl. state Reg. №19 forest territories 648,644 hectares (70.6%). Remuneration paid to the Management The average annual use of wood in the state forest fund, Board for 2019: BGN 38,704 provided for in the forest management projects of the territorial divisions, amounts to 966,034 cubic meters. The planned average annual afforestation is on an area of 400 hectares, for the production of the necessary planting material 2019 2018 the company has thirty-one forest nurseries, including four Statement of profit nurseries of national importance. and loss, BGN thsd. Total revenues 68 667 69 719 Operating 68 432 69 690 The state has provided the South-East State Enterprise with revenues property – public and private state property for the Net profit/loss 1 337 1 343 Balance sheet, implementation of its objects. BGN thsd. Total assets 59 812 60 245 Capital structure Long-term assets 46 112 46 674 Short-term assets 13 700 13 571 Total liabilities 35 340 36 672 Long-term 23 763 23 781 Current ratio liabilities Short-term 11 577 12 891 1,5 liabilities Equity 24 472 23 573 1 Deductions for the 602 604 state 0,5 Financial ratios Return on expenses 1.02 1.02 0 Liquidity ratio 1.18 1.05 2016 2017 2018 2019 AFS certified by an Yes independent auditor Profitability AFS prepared in No accordance with IAS AFS prepared in Yes accordance with Return on expenses, ROEX the NAS

1,03 1,02 1,01 1 0,99 2016 2017 2018 2019

SOUTH-CENTRAL STATE ENTERPRISE –

SMOLYAN is a legal entity, a state enterprise within the 100% state-owned

41

meaning of Article 62[3] of the Commerce Act, established on Minister of Agriculture, Food and the basis of the Forest Act in 2011. Forestry

The company consists of 35 territorial divisions – 28 state Management Board: Nikolay Vasilev forestries and 7 state hunting farms. Yanchev, Ventsislav Mitkov Cholakov, Eng. The company manages state forest territories in four districts – Botyo Malinov Arabadzhiev – Director Smolyan, Plovdiv, Pazardzhik and Kardzhali. The total area is 866,652 hectares, and the state forest territories occupy Independent auditor: BISICOM 61 Ltd., 718,511 ha, or 82.9 percent. Reg. №19 The total stock of the forest massifs, owned by the state, Remuneration paid to the Management which is managed by SCSE is 141,107,416 cubic meters, and Board for 2019: BGN 127,377 the average annual growth amounts to 2,265,876 cubic

meters. The average age of the forests is 67 years. The forest 2019 2018 management projects of the territorial divisions envisage the Statement of profit average annual use in the amount of 1,128,048 cubic meters, and loss, BGN thsd. which is 50% of the annual growth. Total revenues 100 956 95 154 Operating 100 813 95 047 The annual afforestation covers an area of 206 hectares. The revenues planting material is produced in 35 forest nurseries, 7 of which Net profit/loss 2 491 2 625 are of national importance. Balance sheet, BGN thsd. Total assets 158 800 150 214 The state has provided the South-Central State Enterprise with Long-term assets 60 882 50 865 property – public and private state property for the Short-term assets 97 918 99 349 Total liabilities 121 985 114 730 implementation of its objects. Long-term 105 169 94 959 liabilities Capital structure Short-term 16 816 19 771 liabilities Equity 36 815 35 484 Current ratio Deductions for the 1 167 1 203 8 state Financial ratios 6 Return on expenses 1.02 1.03 4 Liquidity ratio 5.69 4.92 AFS certified by an Yes 2 independent auditor 0 AFS prepared in No 2016 2017 2018 2019 accordance with IAS AFS prepared in Yes accordance with Profitability the NAS

Return on expenses, ROEX

1,035 1,03 1,025 1,02 1,015 2016 2017 2018 2019

NORTH-EAST STATE ENTERPRISE – SHUMEN is a 100% state-owned

42 legal entity, a state enterprise within the meaning of Article Minister of Agriculture, Food and 62[3] of the Commerce Act, established on the basis of the Forestry Forest Act in 2011. The enterprise is located in the eastern part of the Danube plain Management Board: and Beyzat Sadak and occupies the southern ends of Ludogorie. It consists of Yahya Veselin Marinov Ninov, Momchil eighteen territorial divisions, of which thriteen are state Raichev Yondrov forestries and five are state hunting farms. Independent auditor: Svetla Petrova, The total area of the state forest territories, included in the area №0632 of activity of the North-East State Enterprise – Shumen, is Remuneration paid to the Management 369,088 hectares, as the afforested forest territories amount to Board for 2019: BGN 153,255 94.6% with an area of 349,073 hectares. The total stock of stands amounts to 37.5 million cubic meters, and the average annual use of wood from the state forest territories is 658 thousand cubic meters. 2019 2018 The enterprise also has fifteen forest nurseries, three of which Statement of profit are of national importance, where the number of saplings and loss, BGN thsd. produced amounts to 1.1 million. There are protected areas and Total revenues 52 831 47 877 Operating 52 801 47 854 sites, as well as many protected areas. revenues Net profit/loss 546 310 The state has provided the North-East State Enterprise with Balance sheet, BGN thsd. property – public and private state property for the Total assets 67 156 64 043 implementation of its objects. Long-term assets 45 653 43 646 Short-term assets 21 503 20 397 Total liabilities 40 618 37 927 Capital structure Long-term 31 481 28 738 liabilities Short-term 9 137 9 189 Current ratio liabilities Equity 26 538 26 116 2,8 Deductions for the 124 246 state 2,6 Financial ratios 2,4 Return on expenses 1.01 1.01 Liquidity ratio 2.35 2.22 2,2 AFS certified by an Yes 2 independent 2016 2017 2018 2019 auditor AFS prepared in No accordance with IAS AFS prepared in Yes Profitability accordance with the NAS Return on expenses, ROЕХ

1,025 1,02 1,015 1,01 1,005 1 2016 2017 2018 2019

NORTH-CENTRAL STATE ENTERPRISE - GABROVO is a legal entity, a state enterprise within the meaning of Article 100% state-owned 43

62[3] of the Commerce Act, established on the basis of the Forest Minister of Agriculture, Food and Act in 2011. Forestry

The company manages state forest territories located on the Management Board: Aleksandar Dimitrov northern slopes of Central Balkan Mountains, the Middle Fore- Penkov, Ivan Olegov Stepanov, Tsvetelin Balkans and parts of the Danube Plain and Dobrudzha, on the Georgiev Milanov – Director territory of the following administrative districts: Gabrovo, Veliko Tarnovo, Ruse, Razgrad and Silistra. The structure of the Independent auditor: Accounting Auditing enterprise consists of a central management and 16 territorial Ltd., Reg. №150 divisions, of which 12 state forestries and 4 state hunting farms. Remuneration paid to the Management In the most general form, the area of the enterprise is an irregular Board for 2019: BGN 136,783 polygonal figure, which is 128 km long in the east-west direction and 157 km in the north-south direction. The total area of the forest territories included in the scope of the enterprise is 2019 2018 393,726 hectares, of which 246,618 hectares (63%) are state Statement of profit forest territories. The afforested area is 231,539 hectares - 94% of and loss, BGN thsd. the total area. The unforested area is 15,079 hectares. Total revenues 39 841 41 557 Operating 39 780 41 483 revenues The state has provided the North-Central State Enterprise with Net profit/loss 1 150 1 868 property - public and private state property for the Balance sheet, BGN thsd. implementation of its subject of activity. Total assets 80 243 80 550 Long-term assets 53 861 54 468 Capital structure Short-term assets 26 382 26 082 Total liabilities 27 497 28 085 Long-term 18 848 18 899 liabilities Current ratio Short-term 8 649 9 186 liabilities 4 Equity 52 746 52 465 3 Deductions for the 517 840 state 2 Financial ratios 1 Return on expenses 1.04 1.06 Liquidity ratio 3.05 2.84 0 AFS certified by an Yes 2016 2017 2018 2019 independent auditor AFS prepared in No accordance with IAS AFS prepared in Yes accordance with the NAS Profitability

Return on expenses, ROЕХ

1,06 1,05 1,04 1,03 2016 2017 2018 2019

IRRIGATION SYSTEMS EAD is an enterprise whose main 100% state-owned 44 activity is related to the supply of water for irrigation and industrial Minister of Agriculture, Food and water supply and the provision of public services for protection Forestry against the harmful effects of water. It maintains and operates the state hydro-ameliorative fund for capture, storage, distribution and Board of Directors: Atanas Slavchev sale of water for irrigation of agricultural crops, supplying water for Katsarchev/ Krastyo Valentinov Petkov – industrial needs with part of the managed facilities. The enterprise Chairman, Antoaneta Nikolova manages, maintains and operates sites and facilities, the main Drandeva/ Stanislava Atanasova purpose of which is protection from the harmful effects of water, Atanasova/ Veselka Georgieva Ninova, incl. flood protection of settlements, roads, railways, enterprises, Snezhina Dimitrova Dineva – Executive agricultural lands and other sites. Director

The company has 14 regional offices in the country with the status of Independent auditor: ECOVIS AUDIT branches. They supply water for irrigation, industrial and drinking BULGARIA Ltd., Reg. №114 water supply, drainage and prevention of flooding of agricultural Remuneration paid to the Board of land, industrial sites, settlements and others. 236 irrigation systems Directors for 2019: BGN 132,000 and a large number of irrigation fields have been built, covering a total of 7,406 thousand decares.

As of 31.12.2019, Irrigation Systems EAD reported a net profit of BGN 2019 2018 496 thousand, while in the previous 2018 the realized profit Statement of profit and amounted to BGN 881 thousand. loss, BGN thsd. Operating revenues amount to BGN 42,609 thousand; as compared Total revenues 42 609 41 870 Operating revenues 42 609 41 870 to the previous year they increased by BGN 739 thousand. Operating Net profit/loss 496 881 expenses (amounting to BGN 42,951 thousand) increased by BGN 41 Balance sheet, BGN thsd. thousand compared to the previous year. Total assets 94 094 95 324 Long-term assets 70 457 72 366 Short-term assets 23 637 22 958 Total liabilities 42 938 44 761 Capital structure Long-term liabilities 15 648 12 749 Short-term liabilities 27 290 32 012 Equity 51 156 50 563 Financial ratios Net debt/equity ratio Return on revenue 0.01 0.02 1 Return on expenses 0.98 0.97 Liquidity ratio 0.87 0,72 Indebtedness ratio 0.84 0.89 0,9 Leverage ratio 1.84 1.89 Dividend, BGN thsd. - - 0,8 AFS certified by an Yes independent auditor 0,7 AFS prepared in accordance Yes 2016 2017 2018 2019 with IAS AFS prepared in accordance No with the NAS Profitability Return on revenue, ROR

0,1 0 -0,1 -0,2 -0,3 2016 2017 2018 2019

45

N.I. PIROGOV UNIVERSITY MULTIPROFILE HOSPITAL 100% state-owned FOR ACTIVE TREATMENT AND EMERGENCY Minister of Health

MEDICINE EAD, SOFIA is one of the largest hospitals in Board of Directors: Dr. Hristo Ivanov Bulgaria and a leader in the field of emergency and disaster Shivachev – Chairman, Zhivka medicine. It is unique in its structure and functions, created for the Sevdalinova Savova, Dr. Asen Georgiev competent treatment of emergencies. Its activities include Baltov – Executive Director diagnostics and treatment of diseases, rehabilitation, activities of tissue and cell transplantation, clinical trials of medicinal products Independent auditor: Radka Boevska, and medical devices, teaching and research activities. Reg. №0270 Remuneration paid to the board of directors for 2019: BGN 133,000 As of 31.12.2019 it reports a net loss of BGN 108 thousand, while in the previous 2018 the realized loss was in the amount of BGN 1 194 thousand. 2019 2018 Operating revenues amount to BGN 88,928 thousand; as compared Statement of profit and to the previous year they increased by BGN 8,446 thousand. loss, BGN thsd. Operating expenses (amounting to BGN 88,694 thousand) increased Total revenues 89 023 80 619 Operating revenues 88 928 80 482 by BGN 6,814 thousand compared to the previous year. Net profit/loss -108 -1 194 Balance sheet, BGN thsd. Capital structure Total assets 72 400 50 674 Long-term assets 53 751 34 501 Short-term assets 18 649 16 173 Net debt/equity ratio Total liabilities 70 279 49 783 Long-term liabilities 37 490 21 055 100 Short-term liabilities 32 789 28 728 Equity 2 121 891 50 Financial ratios Return on revenue 0.00 -0.01 0 Return on expenses 1.00 0.99 Liquidity ratio 0.57 0.56 -50 Indebtedness ratio 33.13 55.87 Leverage ratio 34.13 56.87 2016 2017 2018 2019 Exempt from dividend payment AFS certified by an Yes independent auditor Profitability AFS prepared in No accordance with IAS AFS prepared in Yes accordance with the NAS Return on revenue, ROR

0

-0,02

-0,04

-0,06 2016 2017 2018 2019

ALEXANDROVSKA UNIVERSITY MULTIPROFILE 100% state-owned Minister of Health

46

HOSPITAL FOR ACTIVE TREATMENT EAD, SOFIA is known as the Alexandrovska Hospital and is the oldest hospital and Board of Directors: As of 22.04.2019 - one of the largest in the country. It is a leading national university Prof. Ivan Georgiev Mitov, Dr. Alexander and medical center, providing 24-hour medical care for diagnosis, Hugo Oscar, Prof. Dr. Kostadin Georgiev treatment and rehabilitation of persons with acute and chronic Angelov – Executive Director diseases, injuries, conditions requiring surgical treatment in hospital, incl. medical and cosmetic procedures. Independent auditor: Radka Boevska, The medical-diagnostic, transplantation, dispensary, educational reg. №0270 and research activity is carried out in 26 independent clinics, 3 Remuneration paid to the Board of reference laboratories, wards, centers and consulting rooms, some Directors for 2019: BGN 141,000 with unique functions and significance for the country.

As of 31.12.2019, the hospital reported a net loss of BGN 6,047 2019 2018 thousand, while in the previous 2018 the realized loss amounted to Statement of profit and BGN 6,388 thousand. loss, BGN thsd. Total revenues 69 595 61 367 Operating revenues amount to BGN 69,583 thousand; as compared Operating revenues 69 583 61 362 to the previous year they increased by BGN 8,221 thousand. Net profit/loss -6 047 -6 388 Operating expenses (amounting to BGN 75,585 thousand) increased Balance sheet, BGN thsd. Total assets 81 702 798 683 by BGN 7,802 thousand compared to the previous year. 78 683 Long-term assets 67 425 71 011 Capital structure Short-term assets 14 277 7 672 Total liabilities 75 663 67 694 Long-term liabilities 44 660 31 662 Short-term liabilities 31 003 36 032 Net debt/equity ratio Equity 6 039 10 989 Financial ratios 15 Return on revenue -0.09 -0.10 Return on expenses 0.92 0.91 10 Liquidity ratio 0.46 0.21 Indebtedness ratio 12.53 6.16 5 Leverage ratio 13.53 7.16 Exempt from dividend 0 payment 2016 2017 2018 2019 AFS certified by an Yes independent auditor AFS prepared in No Profitability accordance with IAS AFS prepared in Yes accordance with the NAS Return on revenue, ROR

0

-0,05

-0,1

-0,15 2016 2017 2018 2019

ST. EKATHERINA UNIVERSITY MULTIPROFILE

HOSPITAL FOR ACTIVE TREATMENT EAD, SOFIA has a 100% state-owned leading position among hospitals, cardiac and cardiac surgery Minister of Health 47 centers in Bulgaria, the Balkans and the European Union. It is the only hospital in Bulgaria where cardiac transplants are routinely Board of Directors: Nadezhda performed. It performs the largest in volume and difficulty modern Brankovska-Kirilova – Chairperson, vascular surgery. Assoc. Prof. Krassimir Angarski, Prof. Dr. Gencho Nachev, MD – Executive Director

As of 31.12.2019, the hospital reported a net loss of BGN 2,283 Independent auditor: Boyko Kostov, reg. thousand, while in the previous 2018 it made a profit of BGN 39 №017 thousand. Remuneration paid to the Board of Operating revenues amount to BGN 33,639 thousand; as compared Directors for 2019: BGN 122,000 to the previous year they decreased by BGN 3,436 thousand. Operating expenses (amounting to BGN 35,924 thousand) decreased by BGN 1,096 thousand compared to the previous year.

2019 2018 Statement of profit and Capital structure loss, BGN thsd. Total revenues 33 685 37 103 Operating revenues 33 639 37 075 Net debt/equity ratio Net profit/loss -2 283 39 Balance sheet, BGN thsd. 0,3 Total assets 65 013 67 135 Long-term assets 42 573 34 392 0,2 Short-term assets 22 440 32 743 Total liabilities 6 919 6 758 0,1 Long-term liabilities 4 000 3 228 Short-term liabilities 2 919 3 530 0 Equity 58 094 60 377 Financial ratios 2016 2017 2018 2019 Return on revenue -0.07 0.00 Return on expenses 0.94 1.00 Liquidity ratio 7.69 9.28 Indebtedness ratio 0.12 0.11 Leverage ratio 1.12 1.11 Profitability Exempt from dividend payment AFS certified by an Yes independent auditor Return on revenue, ROR AFS prepared in accordance No with IAS AFS prepared in accordance Yes 0,05 with the NAS 0

-0,05

-0,1 2016 2017 2018 2019

DR. GEORGI STRANSKI UNIVERSITY MULTIPROFILE

HOSPITAL FOR ACTIVE TREATMENT EAD, PLEVEN was 100% state-owned established more than 145 years ago and is the largest medical Minister of Health institution for hospital care in Northern Bulgaria. Its main activities

48 include diagnosis and treatment of diseases in all profiles of medical Board of Directors: Prof. Dr. Sevelina specialties; treatment of emergencies; highly specialized research Lyubenova Popovska – Chairperson, Dr. and consultations of patients from other medical institutions. The Ventsislav Tsvetanov Grozev, Assoc. hospital is one of the established centers included in the program for Prof. Dr. Tsvetan Hristoforov Lukanov, donation of organs and tissues for transplantation. It is a center for Ph.D. – Executive Director university education and provides modern training opportunities for students, trainee doctors, postgraduates and health care Independent auditor: Siyka Dankova, professionals. reg. №0220 Remuneration paid to the Board of As of 31.12.2019, the hospital reported a net loss of BGN 1,103 Directors for 2019: BGN 111,887 thousand, while the loss realized in the previous year of 2018 amounted to BGN 110 thousand.

Operating revenues amount to BGN 78,668 thousand; as compared to the previous year they increased by BGN 8,701 thousand. 2019 2018 Operating expenses (amounting to BGN 79,809 thousand) increased Statement of profit and by BGN 9,786 thousand compared to the previous year. loss, BGN thsd. Total revenues 78 671 69 969 Operating revenues 78 668 69 967 Net profit/loss -1 103 -110 Capital structure Balance sheet, BGN thsd. Total assets 49 239 46 30 Long-term assets 24 519 28 702 Net debt/equity ratio Short-term assets 24 720 20 600 Total liabilities 19 972 17 121 0,8 Long-term liabilities 6 633 6 016 Short-term liabilities 13 339 11 105 0,6 Equity 29 267 28 676 0,4 Financial ratios Return on revenue -0.01 0.00 0,2 Return on expenses 0.99 1.00 0 Liquidity ratio 1.85 1.86 Indebtedness ratio 0.68 0.60 2016 2017 2018 2019 Leverage ratio 1.68 1.61 Exempt from dividend payment AFS certified by an Yes Profitability independent auditor AFS prepared in accordance No with IAS AFS prepared in accordance Yes Return on revenue, ROR with the NAS 0,02 0,01 0 -0,01 -0,02 2016 2017 2018 2019

ST. IVAN RILSKI UNIVERSITY MULTIPROFILE HOSPITAL FOR ACTIVE TREATMENT EAD, SOFIA is a leader in high-tech medical diagnostics and practice, incl. 100% state-owned neurosurgery, rheumatology, gastroenterology, hematology and Minister of Health

49 oncology, radiotherapy and imaging. What distinguishes it from Board of Directors: Krasimir Borisov other hospitals is the combination of excellently trained specialists, Gigov, Atanas Ivanov Kundurdzhiev, Dr. the availability of the latest generation of medical equipment, which Anton Petkov Petkov – Executive allows the performance of medical activities with extreme Director complexity, and very good conditions for patients. Independent auditor: Radka Boevska, As 31.12.2019, the hospital reported a net profit of BGN 1,078 №0270 thousand, while in the previous 2018 it realized a profit of BGN Remuneration paid to the Board of 2,631 thousand. Directors for 2019: BGN 157,000 Operating revenues amount to BGN 83,457 thousand; as compared to the previous year they increased by BGN 15,541 thousand. Operating expenses (amounting to BGN 82,163 thousand) increased 2019 2018 by BGN 17,515 thousand compared to the previous year. Statement of profit and loss, BGN thsd. Total revenues 83 518 67 962 Operating revenues 83 457 67 916 Capital structure Net profit/loss 1 078 2 631 Balance sheet, BGN thsd. Total assets 54 173 48 524 Net debt/equity ratio Long-term assets 30 282 27 302 Short-term assets 23 891 21 222 1,5 Total liabilities 28 066 23 843 Long-term liabilities 15 120 17 742 1 Short-term liabilities 12 946 6 101 Equity 26 107 24 681 0,5 Financial ratios Return on revenue 0.01 0.04 0 Return on expenses 1.01 1.05 2016 2017 2018 2019 Liquidity ratio 1.85 3.48 Indebtedness ratio 1.08 0.97 Leverage ratio 2.08 1.97 Exempt from dividend payment AFS certified by an Yes Profitability independent auditor AFS prepared in No accordance with IAS AFS prepared in Yes Return on revenue, ROR accordance with the NAS

0,15

0,1

0,05

0 2016 2017 2018 2019

ST. MARINA UNIVERSITY MULTIPROFILE HOSPITAL

FOR ACTIVE TREATMENT EAD, VARNA is the largest 100% state-owned diagnostic-treatment and consulting university hospital complex in Minister of Health Northeastern Bulgaria, serving people from all over the country, which has over 1,300 beds, state-of-the-art equipment and highly Board of Directors: Prof. Dr. Viliyan qualified staff – university professors, national and regional Platikanov, MD – Chairman, Prof. Dr. 50 consultants. Radoslav Radev, MD, Prof. Dr. Valentin Ignatov, MD – Executive Director As of 31.12.2019, the hospital reported a net profit of BGN 3,063 thousand, while in the previous 2018 it realized a profit of BGN Independent auditor: Pavlinka Penkova, 2,374 thousand. №0392 Operating revenues amount to BGN 119,291 thousand; as Remuneration paid to the Board of compared to the previous year they increased by BGN 5,047 Directors for 2019: BGN 177,000 thousand. Operating expenses (amounting to BGN 116,870 thousand) increased by BGN 6,317 thousand compared to the previous year. 2019 2018 Statement of profit and loss, BGN thsd. Capital structure Total revenues 120 323 114 251 Operating revenues 119 291 114 244 Net profit/loss 3 063 2 374 Balance sheet, BGN thsd. Net debt/equity ratio Total assets 73 659 70 511 Long-term assets 43 418 46 981 0,8 Short-term assets 30 241 23 530 0,6 Total liabilities 15 381 15 298 Long-term liabilities 7 939 7 937 0,4 Short-term liabilities 15 381 15 298 0,2 Equity 50 339 47 276 Financial ratios 0 Return on revenue 0.03 0.02 2016 2017 2018 2019 Return on expenses 1.03 1.02 Liquidity ratio 1.97 1.54 Indebtedness ratio 0.31 0.32 Leverage ratio 1.46 1.49 Profitability Exempt from dividend payment AFS certified by an Yes independent auditor Return on revenue, ROR AFS prepared in accordance No with IAS AFS prepared in accordance Yes 0,04 with the NAS 0,02 0 -0,02 -0,04 2016 2017 2018 2019

ST. GEORGE UNIVERSITY MULTIPROFILE HOSPITAL 100% state-owned FOR ACTIVE TREATMENT EAD, PLOVDIV is a major Minister of Health center for emergency care of patients from the city and regions of

Southern Bulgaria. In 2000 it was transformed into a commercial Board of Directors: Prof. Dr. Stefan company. It is one of the established centers included in the Stoilov Kostyanov, MD – Chairman, Prof. program for donation of organs and tissues for transplantation. It Dr. Angel Petrov Uchikov, MD, Prof. Dr. has medical equipment and facilities from the most reputable Karen Brianov Dzhambazov, MD – 51 companies, which is used in the diagnostic and treatment and Executive Director educational process. Independent auditor: Deyan As of 31.12.2019, the hospital reported a net profit of BGN 4,190 Konstantinov, №0652 thousand, while in the previous 2018 it realized a profit of BGN Remuneration paid to the board of 4,248 thousand. directors for 2019: BGN 148,000 Operating revenues amount to BGN 153,605 thousand; as compared to the previous year they increased by BGN 15,658 thousand. Operating expenses (amounting to BGN 149,285 2019 2018 thousand) increased by BGN 16,087 thousand compared to the Statement of profit and previous year. loss, BGN thsd. Total revenues 153 606 137 948 Operating revenues 153 605 137 947 Net profit/loss 4 190 4 248 Capital structure Balance sheet, BGN thsd. Total assets 115 957 116 049 Long-term assets 89 326 92 327 Net debt/equity ratio Short-term assets 26 626 23 717 Total liabilities 43 199 47 969 1 Long-term liabilities 8 039 7 035 Short-term liabilities 35 160 40 934 Equity 72 758 68 080 0,5 Financial ratios Return on revenue 0.03 0.03 Return on expenses 1.03 1.04 0 Liquidity ratio 0.76 0.58 2016 2017 2018 2019 Indebtedness ratio 0.59 0.70 Leverage ratio 1.59 1.70 Exempt from dividend payment AFS certified by an Yes Profitability independent auditor AFS prepared in accordance No with IAS AFS prepared in accordance Yes Return on revenue, ROR with the NAS

0,04 0,03 0,02 0,01 0 2016 2017 2018 2019

UNIVERSITY SPECIALIZED HOSPITAL FOR ACTIVE 100% state-owned TREATMENT IN ONCOLOGY EAD, SOFIA is a leading Minister of Health center for diagnosis and treatment of malignant tumors, as well as for specialization and qualification of oncology staff in the Board of Directors: Assoc. Prof. Dr. Iglika country. The hospital provides comprehensive oncology care of Spasova Mihaylova – Chairperson, high quality, according to the official oncology doctrine and in Teodora Vladimirova Angelova- accordance with the accepted medical standards, within the Todorova, Dr. Stefan Konstantinov

52 framework of good medical practice. Konstantinov – Executive Director

As of 31.12.2019, the hospital reported a net loss of BGN 283 Independent auditor: Margarita Radeva, thousand, while in the previous 2018 it made a profit of BGN 1 №0134 thousand. Remuneration paid to the Board of Operating revenues amount to BGN 39,133 thousand, and Directors for 2019: BGN 105,000 compared to the previous year they increased by BGN 5,913 thousand. Operating expenses (amounting to BGN 39,241 thousand) increased by BGN 6,183 thousand compared to the 2019 2018 previous year. Statement of profit and loss, BGN thsd. Total revenues 39 166 33 221 Operating revenues 39 133 33 220 Capital structure Net profit/loss -283 1 Balance sheet, BGN thsd. Total assets 58 491 58 650 Net debt/equity ratio Long-term assets 45 166 43 390 Short-term assets 13 325 15 260 0,85 Total liabilities 25 995 25 870 0,8 Long-term liabilities 19 240 21 886 Short-term liabilities 6 755 3 984 0,75 Equity 32 496 32 780 Financial ratios 0,7 Return on revenue -0.01 0.00 0,65 Return on expenses 0.99 1.00 2016 2017 2018 2019 Liquidity ratio 1.97 3.83 Indebtedness ratio 0.80 0.79 Leverage ratio 1.80 1.79 Profitability Exempt from dividend payment AFS certified by an Yes independent auditor Return on revenue, ROR AFS prepared in accordance No with IAS AFS prepared in accordance Yes 0 with the NAS -0,02 -0,04 -0,06 -0,08 2016 2017 2018 2019

NATIONAL COMPLEX OF SPECIALIZED 100% state-owned REHABILITATION HOSPITALS EAD, SOFIA is a leader in Minister of Health physical and rehabilitation medicine, using established medical standards in combination with natural resources. The company has no analogue in the healthcare system in Bulgaria, which includes Board of Directors: Plamka Nikolova 13 specialized hospitals for rehabilitation, located throughout the Ninkova – Chairperson, Dr. Vladislav country in established spa resorts. Georgiev Genov, Plumelina Dimitrova

Micheva – Executive Director 53

NC SRH offers a wide range of physiotherapy and rehabilitation methods in its specialized hospitals. Natural and healing factors are Independent auditor: Radka Boevska, used – climate, mineral waters, healing mud in combination with №0270 hardware physiotherapy, kinesitherapy. Remuneration paid to the Board of Directors for 2019: BGN 74,000 As of 31.12.2019, the company reports a net profit of BGN 591 thousand, while in the previous 2018 it realized a profit of BGN 916 thousand. 2019 2018 Operating revenues amount to BGN 31,709 thousand; as compared Statement of profit and to the previous year they increased by BGN 1,249 thousand. loss, BGN thsd. Operating expenses (amounting to BGN 30,834 thousand) Total revenues 31 710 30 462 Operating revenues 31 709 30 460 increased by BGN 1,567 thousand compared to the previous year. Net profit/loss 591 916 Balance sheet, BGN thsd. Capital structure Total assets 39 213 38 436 Long-term assets 30 101 29 473 Short-term assets 9 112 8 963 Total liabilities 10 602 8 155 Net debt/equity ratio Long-term liabilities 9 157 7 136 Short-term liabilities 1 445 1 019 0,4 Equity 28 611 30 281 0,3 Financial ratios Return on revenue 0.02 0.03 0,2 Return on expenses 1.02 1.04 0,1 Liquidity ratio 6.31 8.80 Indebtedness ratio 0.37 0.27 0 Leverage ratio 1.37 1.27 2016 2017 2018 2019 Exempt from dividend payment AFS certified by an Yes Profitability independent auditor AFS prepared in accordance No with IAS AFS prepared in accordance Yes Return on revenue, ROR with the NAS

0,05 0,04 0,03 0,02 0,01 0 2016 2017 2018 2019

BUL BIO – NCIPD EOOD, SOFIA manufactures over 600 medicinal products and medical supplies, divided into two main 100% state-owned groups: human medicines and in vitro diagnostic medicinal Minister of Health products, incl. vaccines and immunostimulants. As a result of the research and development activities of the company's specialists, new technologies have been introduced, meeting the highest Manager: Nikolai Borisov requirements of international standards. Independent auditor: Izabela Dzhalazova, №0422

54

As of 31.12.2019, the company reports a net profit of BGN 4,878 Remuneration of the Manager for 2019: thousand, while in the previous 2018 it realized a profit of BGN BGN 96,000 5,355 thousand.

Operating revenues amount to BGN 28,285 thousand; as compared to the previous year they decreased by BGN 2,271 2019 2018 thousand. Operating expenses (amounting to BGN 22,921 Statement of profit and thousand) decreased by BGN 1,830 thousand compared to the loss, BGN thsd. previous year. Total revenues 28 711 30 952 Operating revenues 28 285 30 556 Net profit/loss 4 878 5 355 Balance sheet, BGN thsd. Capital structure Total assets 39 674 36 508 Long-term assets 15 231 14 820 Short-term assets 24 443 21 688 Total liabilities 4 770 3 737 Net debt/equity ratio Long-term liabilities 2 369 2 495 Short-term liabilities 2 401 1 242 0,15 Equity 34 904 32 771 Financial ratios 0,1 Return on revenue 0.17 0.17 Return on expenses 1.23 1.24 0,05 Liquidity ratio 10.18 17.46 Indebtedness ratio 0.14 0.11 0 Leverage ratio 1.14 1.11 2016 2017 2018 2019 Dividend, BGN thsd. 2 439 2 677 AFS certified by an Yes independent auditor AFS prepared in No Profitability accordance with IAS AFS prepared in Yes accordance with the NAS Return on revenue, ROR

0,3

0,2

0,1

0 2016 2017 2018 2019

STATE ENTERPRISE BULGARIAN SPORTS

TOTALIZER is a legal entity, a state enterprise within the 100% state-owned meaning of Article 62[3] of the Commerce Act, established for Minister of Youth and Sports organizing lottery games and games with bets on the results of sports competitions on the territory of the country. Management Board: Zhivko Atanasov

Vangelov – Chairman, Goryana Grigorova It is the legal successor of the Bulgarian Sports Totalizer, formed Todeva, Belcho Boychev Ivanov, under the Law on Persons and the Family and the Law on Konstantin Lyubomirov Bazhdekov, Physical Education and Sports. Damyan Georgiev Damyanov – Executive 55

Director Pursuant to the TFP of the Law on Amendments to the Law on Gambling, in 2011 the State Enterprise "State Monetary Lottery" Independent auditor: IsaAudit OOD, Reg. was merged into the State Enterprise Bulgarian Sports Totalizer, 30130 under the conditions of universal succession. Remuneration paid to the Executive Director and the members of the The State has provided BST with property - state property for Management Board for 2019: BGN the implementation of its objects. 185,000

Capital structure 2019 2018 Statement of profit and loss, BGN thsd. Current ratio Total revenues 175 648 161 723 Operating 175 647 161 722 1,5 revenues Net profit/loss -7 139 -10 210 1 Balance sheet, BGN thsd. 0,5 Total assets 60 533 53 866 Long-term assets 40 063 38 074 0 Short-term assets 20 470 15 792 2016 2017 2018 2019 Total liabilities 64 842 52 112 Long-term 44 228 31 415 liabilities Short-term 20 614 20 697 liabilities Profitability Equity -4 309 1 754 Financial ratios Return on expenses 1.12 1.09 Return on expenses, ROЕХ Liquidity ratio 0.99 0.76 AFS certified by an Yes independent 1,5 auditor AFS prepared in No 1 accordance with IAS 0,5 AFS prepared in Yes 0 accordance with 2016 2017 2018 2019 the NAS

56

NATIONAL SPORTS BASE EAD is a company established to 100% state-owned maintain sports facilities and facilities of national importance, incl. Minister of Youth and Sports the Vasil Levski National Stadium, Arena Armeec Hall Sofia, Sport Palace Sports Complex, Belmeken High Mountain Base and others. Board of Directors: Emilia Assenova Grueva – Chairperson, Krassimir Zdravkov Kerezov, As of 31.12.2019, the company reports a net loss of BGN 3,269 Anton Nikolov Popov, thousand, and in the previous 2018 the realized loss amounted to Stoyan Trayanov Tanev, BGN 3,964 thousand. Plamen Tsvetkov Manolov – Executive Operating revenues amount to BGN 11,708 thousand; as compared Director to the previous year they increased by BGN 357 thousand. Operating expenses (amounting to BGN 14,598 thousand) Independent auditor: Stoyanka Ivanova, decreased by BGN 385 thousand compared to the previous year. №0615 Remuneration paid to the Board of Directors for 2019: BGN 179,760

Capital structure

2019 2018 Net debt/equity ratio Statement of profit and 0,2 loss, BGN thsd. Total revenues 11 744 11 435 0,15 Operating revenues 11 708 11 351 0,1 Net profit/loss -3 269 -3 964 Balance sheet, BGN thsd. 0,05 Total assets 204 945 207 970 Long-term assets 194 522 178 335 0 Short-term assets 10 423 29 635 2017 2018 2019 Total liabilities 8 157 33 047 Long-term liabilities 5 723 5 488 Short-term liabilities 2 434 27 559 Equity 196 788 174 923 Financial ratios Profitability Return on revenue -0.28 -0.35 Return on expenses 0.80 0.76 Liquidity ratio 4.28 1.08 Indebtedness ratio 0.04 0.19 Return on revenue, ROR Leverage ratio 1.04 1.19 Dividend, BGN thsd. - - AFS certified by an Yes 0 independent auditor -0,1 AFS prepared in accordance Yes -0,2 with IAS -0,3 AFS prepared in accordance No -0,4 with the NAS -0,5 2017 2018 2019

57

TEREM – HOLDING EAD is a holding company that unites 100% state-owned companies specializing in the repair, modernization and logistics Minister of Defence maintenance of aircraft, ships and vessels, armored vehicles, small arms, artillery, missile weapons and ammunition, radar Board of Directors: Svetlozar Tsvetanov and communication equipment. Veshkov – Chairman; Joanna Krasteva Dimitrova, Ivan Angelov Doskov – Major event in 2019 Executive Director . realized transformation through merger of TEREM - Ovech EOOD (transforming company) into TEREM - Independent auditor: ABVP-Audit Khan Krum EOOD (host company) Standard Ltd., Reg. № 165 Remuneration paid to the Board of The company ended 2019 with a net profit of BGN 1,196 Directors for 2019: BGN 185,000 thousand, and in the previous 2018 the realized profit amounted to BGN 2,556 thousand. Operating revenues amount to BGN 15,709 thousand; as 2019 2018 compared to the previous year they increased by BGN 10,473 Statement of profit thousand. Operating expenses (amounting to BGN 15,841 and loss, BGN thsd. Total revenues 16 606 8 381 thousand) increased by BGN 9,463 thousand compared to the Operating 15 709 5 236 previous year. revenues Net profit/loss 1 196 2 556 Balance sheet, Capital structure BGN thsd. Total assets 135 519 135 132 Net debt/equity ratio Long-term assets 100 970 100 189 Short-term assets 34 549 34 943 0,3 Total liabilities 17 703 18 508 0,25 Long-term 102 67 0,2 liabilities Short-term 17 601 18 441 0,15 liabilities 0,1 Equity 117 816 116 624 0,05 Financial ratios Return on revenue 0.07 0.30 0 Return on 1.05 1.31 2016 2017 2018 2019 expenses Liquidity ratio 1.96 1.89 Indebtedness ratio 0.15 0.16 Leverage ratio 1.15 1.16 Profitability Dividend, BGN thsd. - - AFS certified by an Yes independent Return on revenue, ROR auditor 0,4 AFS prepared in Yes accordance with IAS 0,3 AFS prepared in No accordance with 0,2 the NAS 0,1

0 2016 2017 2018 2019

NATIONAL PALACE OF CULTURE – CONGRESS

58

CENTER SOFIA EAD is a company established to manage the 100% state-owned National Palace of Culture – the largest congress center in Minister of Culture Southeast Europe. The company organizes and conducts cultural, scientific and educational events, congresses, conferences and Board of Directors: Borislav Slavchev socio-political events. Velkov, Krassimir Petkov Petkov, Angel Ivanov Mitev – Executive Director As of 31.12.2019, the company reports a net loss of BGN 11,050 thousand, and in the previous 2018 the realized loss amounted to Independent auditor: Stoyanka Ivanova, BGN 12,323 thousand. №0615 Operating revenues amount to BGN 12,008 thousand; as compared Remuneration paid to the Board of to the previous year they increased by BGN 919 thousand. Directors for 2019: BGN 163,830

Operating expenses (amounting to BGN 22,967 thousand) decreased by BGN 309 thousand compared to the previous year. 2019 2018 Statement of profit and Capital structure loss, BGN thsd. Total revenues 12 008 11 089 Operating revenues 12 008 11 089 Net profit/loss -11 050 -12 323 Net debt/equity ratio Balance sheet, BGN thsd. Total assets 363 607 374 503 0,04 Long-term assets 361 494 370 500 0,03 Short-term assets 2 113 4003 Total liabilities 6 554 6 400 0,02 Long-term liabilities 721 637 0,01 Short-term liabilities 5 833 5 763 Equity 357 053 368 103 0 Financial ratios 2016 2017 2018 2019 Return on revenue -0.92 -1.11 Return on expenses 0.52 0.48 Liquidity ratio 0.36 0.69 Indebtedness ratio 0.02 0.02 Leverage ratio 1.02 1.02 Dividend, BGN thsd. - - Profitability AFS certified by an Yes independent auditor AFS prepared in accordance Yes Return on revenue, ROR with IAS AFS prepared in accordance No with the NAS 0

-0,5

-1

-1,5 2016 2017 2018 2019

Accounting notes to the report

59

The consolidated financial statements in this report are a summary of the financial information provided by the respective public enterprises in the Annual Financial Statements for 2019. This summary aims to provide a clear and uniform picture of the management of state-owned companies in financial terms during the reporting period.

Companies in which the state has a share of less than 50 percent and those that are in insolvency proceedings or liquidation proceedings are not included in this financial review. Included are state-owned enterprises established on the basis of Article 62[3] of the Commerce Act. The financial results of the Bulgarian Development Bank AD are not included in this report because it is excluded from the scope of the Public Enterprises Act.

The ratios used for the purposes of this report are the liquidity ratio (as a ratio of current/short-term assets to current liabilities),the indebtedness ratio (as a ratio of total liabilities to equity), the return on revenue (as a ratio of net profit to total revenue), the return on expenses (as a ratio of total revenue to total costs) and the leverage ratio (as a ratio of total assets to equity).

The main distinguishing feature of state-owned enterprises is that the property provided to them by the state does not form capital to serve as collateral for their creditors (i.e. the property provided to it is not distributed in the number of stock/shares with a fixed nominal value). Some of them apply a specific regulatory framework, which distinguishes them from both companies and each other. However, they are also registered in the Commercial Register and apply the provisions of the Accountancy Act. For this reason, and in order to get a more complete and clear picture of the state's participation in the economic life of the country, this report includes the financial results of their activities, in a similar way as commercial companies, but under Article 62[3] of the Commerce Act does not contain other financial and economic indicators, but only a liquidity ratio and a return on expenses ratio - both in a 4-year horizon - 2016-2019.

For information on the accounting principles in a particular company, see the respective company's annual financial statements.

60