years
Annual report 2010 CONTENTS
MESSAGE TO THE SHAREHOLDERS 3
BULGARIA IN 2010 5 Economy Overview 5 Bulgarian Insurance Market 6
ARMEEC IN 2010 9 About the Company 9 Business Results 12 Key Financial Data 17 New Products and Initiatives 19 Corporate Social Responsibility 19 Future Development 20
FINANCIAL STATEMENTS 21 Statement of Financial Position 21 Statement of Comprehensive Income 23 Statement of Changes in Equity 24 Statement of Cash Flows 26
INDEPENDENT AUDITOR’S REPORT 27
DISTRIBUTION AND BRANCH NETWORK 29
2
Annual report 2010 MESSAGE TO THE SHAREHOLDERS
Rumen Georgiev Tsvetanka Krumova Chairman of Member of the Management Board the Management Board and Executive Director and Executive Director
Dear Shareholders,
The year 2010 was among the best in the history of Armeec Jsc in terms of business performance – the company reported gross written premiums over BGN 155 million and at the year-end ranked third on the Bulgarian insurance market, which is the highest position reached over the years. At the same time the company image and credibility improved, which was evidenced by the appraisal of the rating agencies.
The objectives set by the management over the years, has been related to gaining a competitive advantage in the insurance market through an effective combination of basic insurance business
3
Annual report 2010 MESSAGE TO THE SHAREHOLDERS
processes, rational use of assets and enhancing value for customers. The results, especially in the last year, when the entire economy was affected by the economic crisis, proved that the chosen approach was correct – against the general decline of the market Armeec Jsc achieved a growth and gained the confidence of a wide range of clients and partners.
After a period of expansive imposition of new products on the market, in 2010 Armeec Jsc entered a new stage of development both in product offering and customer service. The company launched on the market such products, which were specifically designed to meet the customer needs in difficult economic conditions. The combined products Armeec Solidarity and Armeec Summer were accepted very well last year, as well as the cover of road assistance abroad, which was included free of charge in the motor casko policy of Armeec.
The adjustment of our products to the requirements of the clients is applied also to the methods of sale, by implementation of interactive conclusion of policies via internet and telephone, along with online payments.
The focus of our work is placed on the service, because the customer satisfaction is paramount for our success. We continuously increase the points of sale both by establishing new agencies and representative offices and through partnerships with the companies from Chimimport Holding, especially with Central Cooperative Bank. Our policies can be taken out in all offices of the bank and since the year 2010 we have our employees in many branch offices of CCB.
Our achievements over the years make us proud, because from a small company with less than 2% market share and 12th position in the ranking by premium income, Armeec Jsc is now number 3 in the Bulgarian insurance market with more than 11 per cent market share.
Our aim is to increase the efficiency and sustainability of sales by continuous enhancement of our services, improvement and flexibility of the product portfolio, better accessibility of services, highest optimization of the underwriting and claims handling processes, which will lead the company to the top positions in all lines of business in the coming years.
Although the year 2011 is expected to be a difficult one and full of regulatory changes, we are optimistic about the successful future of the company, because the challenges generate new effective solutions. In Armeec we have a clear vision how to achieve new results by further expansion of the opportunities for obtaining profits, professional risk management and use of the advantages of synergy.
Rumen Georgiev Tsvetanka Krumova Chairman of the Management Board and Member of the Management Board and Executive Director Executive Director
4 BULGARIA IN 2010
Economy Overview
In 2010 the Bulgarian economy started a gradual recovery. The GDP increased by 0.2 per cent, reaching BGN 70 474 million, for which the export of goods and services contributed most.
Over the year exports rose 16.2 per cent, exceeding pre-crisis levels in real terms.
Higher domestic demand pushed goods and services imports, whose real growth for the year 2010 came to 4.5%.
Uncertainty about world economic recovery curbed fixed asset investment by 16.5% in 2010. Slowing foreign direct investment, weak domestic demand and cautious bank lending constricted investment additionally.
In 2010 final household consumption declined by 1.3%. The consumer confidence index was on the rise over the year but uncertainty about labour market and household income improvement held back consumer expenditure.
Gross value added in 2010 rose 0.2% (having dipped 3.3% in 2009) and the adjustment of economy varied by sectors.
The labour market did not improve in 2010 despite the gradual recovery of economic activity. The employment fell 5.9 per cent (mainly through cuts in services), and the rate of unemployment continued rising, and reached 11.2% at the end of the year.
After falling 2.9 per cent in 2009, labour productivity increased 6.4% in 2010 due to decreased number of employed and gradual recovery of economic activity.
Rising global commodity prices were the major driver of inflation in Bulgaria. By the end of 2010 cumulative inflation reached 4.4 per cent (2.8 percentage points higher than in December 2009), and the average annual inflation was 3%.
5
Annual report 2010 BULGARIA IN 2010
The overall current and capital account deficit in 2010 contracted to Eur 65.4 million (0.2% of GDP) against Eur 2640.6 million (7.6% of GDP) in 2009. This improvement stemmed mainly from the trade deficit drop to Eur 2412.5 million in 2010, representing a decrease of Eur 1761.1 million compared to 2009.
Net direct investment inflow into Bulgaria was positive at Eur 1458.9 million (4% of GDP) in 2010. It went mainly into manufacturing (35.9%), electricity and heating generation and distribution (16.5%), transport and communications (15.4%), real estate operations (11.1%) and financial intermediation (9.84%).
In the period January-December 2010 the gross external debt dropped by Eur 1045 million to Eur 36.7 billion (101 per cent of GDP), decreased bank debt contributing most.
Source: Bulgarian National Bank
Bulgarian Insurance Market
In 2010 the insurance market continued to shrink as a result of the strong impact of the world financial crisis on the Bulgarian economy. Among the main factors, which influenced the lower demand for insurance products, were the decreasing business activity, shrinking household consumption, the decline in sales of both new and used cars, the reduction of lease purchases and the limited lending by banks.
However, unlike many other countries, in Bulgaria no insurer required support from the state to ensure its financial stability. The consumer confidence in the insurance business was preserved.
At the end of 2010 the total number of licensed insurers domiciled in the Republic of Bulgaria was 35, of which 19 were non-life insurance companies, 14 - life insurance companies and 2 were mutual insurance cooperatives. During the reporting period the non-life reinsurance business was carried out by GP Reinsurance EAD, which was licensed in 2008.
In 2010 the gross premium income generated by the Bulgarian insurers amounted to BGN 1623 million, down 3.5% on an annual basis, compared to BGN 1681 million in 2009, when a larger decrease of 5.9% was reported. The insurance penetration (gross premium income as percentage of GDP) over the last year decreased to 2.3%, and was back to its pre-2006 level. The insurance density (gross premium income per capita) also fell from BGN 222 in 2009 to BGN 216 over the last year.
In 2010 the insurance market in Bulgaria was still dominated by general insurance, whose share went down from 87% at the end of 2009 to 84.9% in 2010.
6 BULGARIA IN 2010
Premium Income of the Non-Life Insurance Market for the Period 2006 – 2010 (BGN ‘000)
BG’000
1,600,000 1 532 438 1 456 840 1 374 787 1,400,000 +263 856 1 268 582 1,200,000 1 060 138 +208 444 1,000,000 +140 949 1 532 438 1 456 840
800,000
1 060 138 600,000 919 189 1 268 582
400,000
200,000
0 -75 598 -82 053 -200,000 2006 2007 2008 2009 2010
The reported gross premium income from non-life insurance amounted to BGN 1375 million in 2010, down 5.6% on an annual basis. The insurance penetration index in general insurance was 2% compared to 2.1% in 2009. The insurance density was BGN 185.6 per capita against BGN 192.9 in 2009.
The market share of the four companies, which reported highest premium income at the end of 2010 (Bulstrad Vienna Insurance Group, DZI General Insurance, Armeec and Bul Ins) was 47.1% compared to 49.9% at the end of 2009. Over the last few years a trend of an increased competition and lower concentration was registered on the non-life market.
It was a positive trend for the industry that the incurred non-life claims fell by 1.6% on an annual basis and came to BGN 749 million. The amount of indemnities paid in the non-life sector also decreased by 0.2% and was BGN 678 million in 2010.
7 BULGARIA IN 2010
Breakdown of Premium Income by Line of Business in 2010
Marine 1% Cargo 1% Aviation 2% Financial Risks 2% Personal Accident 2% Liabilities 2%
Property 19%
Motor Casko 36%
Motor TPL 35%
The main market driver in 2010 was the motor business. The Motor Casko and Motor TPL policies comprised the largest share and generated respectively 36.1% and 35.1% of premiums. The premium income from Motor Casko for the period January-December 2010 was BGN 496 million, down 17.7% on an annual basis. The written premiums under Motor TPL insurance rose by 9.5% on an annual basis and reached BGN 482 million. The higher premium income was due to the increase of the average premium amount under the one-year contracts. In 2010 the average premium was BGN 185 compared to BGN 167 in 2009.
In the year 2010 the premium income from Property insurance amounted to BGN 261 million, down 5.9% on an annual basis, compared to a rise of 11.8% in the previous year.
Generally, all lines of non-life insurance business reported a decrease over the year with the exclusion of the Motor TPL, the aviation insurance and the insurance of liabilities and goods in transit.
8 ARMEEC IN 2010
ABOUT THE COMPANY
The joint-stock insurance company Armeec was incorporated on 9 April 1996.
Armeec Jsc was licensed to operate in the field of general insurance pursuant to Licence No 7 for performance of insurance activities, issued by the National Insurance Council on 15th June 1998. The company was granted a licence for reinsurance business in the year 2005.
In April 2008 Armeec Jsc was granted a permit by the Financial Supervision Commission to carry out activities on the territory of the European Union.
In July 2002 Armeec Jsc became a part of Chimimport Holding, which acquired 91.92% of the company capital.
As at 31 December 2010 the paid-up capital of Armeec Jsc was BGN 15 019 thousand.
The major shareholders of the company are, as follows:
Company Number of Shares %
CCB Group EAD 125 562 83,60
Niko Commerce 7 146 4.76
Chimimport Invest AD 6 920 4.61
Chimimport AD 6 455 4.30
and other minority shareholders.
9
Annual report 2010 ARMEEC IN 2010
Armeec Jsc has a two-tier management system consisting of Supervisory Board and Management Board.
Supervisory Board
Chairman: Chimimport AD, represented by Nikola Mishev
Members: Prof. Nansen Alfred Behar Central Cooperative Bank AD, represented by Georgi Konstantinov, Ivaylo Donchev, Sava Stoinov and Tihomir Atanasov
Management Board
Chairman: Rumen Georgiev
Members: Valentin Dimov, Alexander Kerezov, Tsvetanka Krumova
The company is represented by the Executive Directors Rumen Georgiev and Tsvetanka Krumova.
In August 2010 the Bulgarian Credit Rating Agency (BCRA) confirmed the long-term rating of Armeec Jsc for its capability to pay claims iBBB (stable perspective), short-term rating ia-3.
Armeec Jsc is a non-life insurance company, which is licensed to perform insurance activities in all lines of general insurance.
The company has a stable and adequate reinsurance program aiming to protect its clients. The program is based on several types of reinsurance contracts, such as combined quota share/excess of loss reinsurance, some surplus reinsurance treaties, one catastrophe and a number of proportional facultatives.
Traditionally Armeec Jsc places its reinsurance program with the large international reinsurance brokers such as Aon, Willis and others, based in London, UK.
Armeec Jsc has established business relations with reinsurance companies of the highest class, namely Mitsui Sumitomo Reinsurance Ltd, Japan; Hannover Re, Germany; Munich Re, Germany, etc.
Armeec Jsc is a member of a number of Bulgarian and international organizations, such as: the Association of Bulgarian Insurers, the National Bureau of Bulgarian Motor Insurers, the Bulgarian Chamber of Commerce and Industry, the Sofia Chamber of Commerce and Industry, the Bulgarian- Russian Chamber of Commerce and Industry, the Bulgarian National Insurance Nuclear Pool.
The company operates through 52 agencies and 68 representative offices in more than 80 towns all over the country. The distribution of the insurance products is also carried out by more than 300 insurance brokers and about 1500 insurance agents.
As at 31 December 2010 the number of employees totalled 572. The analysis of age shows that the majority of employees (57%) are aged up to 40 years and the university graduates comprise the largest part of all – 63%.
10 ARMEEC IN 2010
Distribution of Personnel by Positions (2006-2010)
Total number of employees
0 100 200 300 400 500 600
Insurers
Head Office Staff (experts and directors)
Administrative per- sonnel
0 100 200 300 400 500 600
2010 2009 2008 2007 2006
11 ARMEEC IN 2010
Business Results
As at 31 December 2010 Armeec Jsc reported a premium income of over BGN 155 million and a growth of about 5% compared to the previous year. This result placed the company on the stable third position in the market against the background of continuous shrinking of the insurance market and poor performance in the major lines of business.
Premium Income of Armeec Jsc Compared to the Non-life Insurance Market (2006-2010)
2006 2007 2008 2009 2010
INSURANCE MARKET
Premium income 1 060 137 931 1 268 582 389 1 532 438 440 1 456 839 769 1 374 786 758
Growth 15.33% 19.66% 20.9 % -4.93 % -5.63%
ARMEEC
Premium income 57 888 798 90 725 000 145 968 009 148 238 791 155 269 195
Growth 29.37% 56.72% 61.00% 1.53% 4.74%
Market share 5.46% 7.15% 9.53% 10.18% 11.29%
The premium income of Armeec Jsc reported a growth for eight consecutive years, despite the crisis in the country and the general decline of the Bulgarian non-life insurance business.
Premium Income of Armeec Jsc for the Period 2006-2010 (BGN ‘000)
160 000 155 269 145 968 148 239 +7 030 140 000 +2 271
120 000 +55 243
100 000 90 725
80 000 +32 826 148 239 145 968 57 899 60 000 +13 153 90 725 40 000 57 899 20 000 44 746
0 2006 2007 2008 2009 2010
12 ARMEEC IN 2010
As of 31 December 2010 Armeec JSC ranked third on the non-life insurance market in Bulgaria with a market share of 11.29% against 10.18% at the end of 2009. Good performance was reported in most lines of business throughout the year, mainly in motor business, personal accident insurance, financial risks and liabilities insurance.
In 2010 the motor insurance dominated the company portfolio – at the year end the relative share of Motor Casko was 51%, and Motor TPL had over 26%, followed by Property and Aviation insurance – respectively 7.6% and 6.6%. The Personal Accident and Travel Assistance insurance lines comprised jointly 3.4% of the company portfolio.
Breakdown of Company Portfolio as at 31 December 2010
Motor TPL 26,5% Property 7,6%
Liabilities 1,6% Financial Risks 2,9%
Motor Casko Personal Accident 3,4% 50,9% Cargo 0,4%
Aviation 6,6%
Marine 0,3%
13 ARMEEC IN 2010
The Motor Casko insurance dominated Premium Income from casko insurance (BGN) the business portfolio of Armeec, with 600% Armeec Insurance Market a share of 51%. In 2010 the company 500% reported written premiums of BGN 600% Armeec 600%600% Armeec 400% 79 million and ranked second on the ArmeecInsurance Market InsuranceInsurance Market Market 500% 500% 500%300% market of this insurance with a market 79,1 M 400% 400% share of 15.93%. 62,6 M 88,2 M 89,4 M 400%200% 300% 30,7 M 79,1 M 300%300% 79,1 79,1M M 100% 62,6 M 88,2 M 89,4 M 200% 62,6 62,6M M 88,2 88,2 M M 89,4 89,4M M 200% 200%0% 30,72006 M 2007 2008 2009 2010 30,7 30,7M M 100% 100%100% 0% 2006 2007 2008 2009 2010 0% 0% 20062006 20072007 20082008 20092009 20102010 700% A significant growth reported the other PremiumArmeec Income from Motor tpl (BGN) Insurance Market motor insurance - the Motor TPL went 600% 700% Armeec 500%700% up 46% compared to 2009. In 2010 the Armeec 700% ArmeecInsurance Market Insurance Market 41,1 M 600% company generated about BGN 41.1 Insurance Market 400%600% 32,8 M 600% million from this line of business and 500% 28,1 M 500%300%500% 41,1 M ranked fifth on the insurance market. 18,2 M 41,1 41,1M M 400% 32,8 M 400%200%400% 32,8 32,8M M 13,8 M 300% 28,1 M 100%300% 28,1 28,1M M 300% 18,2 M 18,2 M 200% 18,2 M 200%0%200% 13,82006 M 2007 2008 2009 2010 13,8 13,8M M 100% 100%100% 0% 0% 2006 2007 2008 2009 2010 0% 20062006 20072007 20082008 20092009 20102010
900% PremiumArmeec Income from aviation insurance (BGN)800% In 2010 Armeec JSC maintained Insurance Market 700%900% its leading position in the Aviation 900%900% Armeec 600% Armeec 800% ArmeecInsurance Market 800%800% insurance sector with a market share of Insurance Market Insurance Market 500%700% approximately 43% and written premiums 700%700% 10,2 M 400%600% of BGN 10.2 million. 10,1 M 600%600% 300%500% 6,3 M 500%500% 200% 6,1 M 10,2 M 400% 3,7 M 10,1 M 10,2 10,2M M 400%400% 10,1 10,1M M 100%300% 6,3 M 300%300% 6,3 M 6,3 M 0%200% 3,72006 M 6,12007 M 2008 2009 2010 200%200% 3,7 M 6,1 M6,1 M 3,7 M 100% 100%100% 0% 0% 2006 2007 2008 2009 2010 0% 20062006 20072007 20082008 20092009 20102010
350% An upward trend was registered in the PremiumArmeec Income from property insurance (BGN) Insurance Market 300% Property insurance business, which 250%350% Armeec 11,8 M 350%350% increased its share in the company Armeec ArmeecInsurance Market 200%300% portfolio. In 2010 the company generated InsuranceInsurance Market Market 300%300% 150%250% 10,9 M 11,8 M 250%250% premium income of BGN 11.8 million from 11,8 11,8M M 100%200% 10,0 M 200%200% Property insurance, up 7.6% compared to 50%150% 10,9 M 150%150% 6,4 M 10,9 M the previous year. 4,0 M 10,9 M 0%100% 100% 10,0 M 100% 10,0 10,0M M - 50%50% 2006 2007 2008 2009 2010 50% 6,4 M 50% 4,0 M 6,4 M6,4 M 0% 4,0 M4,0 M 0% 0% 100%- 50% 2006 2007 2008 2009 2010 - 50%- 50% 2006Armeec2006 20072007 20082008 20092009 20102010 Insurance Market 80% 100% 100% Armeec 100%60% ArmeecArmeec Insurance Market 80% InsuranceInsurance Market Market 80%40%80% 3,1 M 2,7 M 2,7 M 60% 14 60%20%60% 2,3 M 2,6 M 40% 40%0%40% 2,7 M 3,1 M 2,7 M 2,7 M 3,1 M3,1 M 2,7 M2,7 M 2,7 M 20% 2,6 M 20%- 20%20% 2,3 M 2,6 M 2,3 M2,3 M 2,6 M 0% 0%- 40%0% 2006 2007 2008 2009 2010 - 20% - 20%- 20% - 40% 2006 2007 2008 2009 2010 - 40%- 40% 20062006 20072007 20082008 20092009 20102010
600% Armeec Insurance Market 500% 600% Armeec 600%600% Armeec ArmeecInsurance Market 400% InsuranceInsurance Market Market 500% 500%500% 2,1 M 300% 1,4 M 1,8 M 1,9 M 400% 1,8 M 400%400% 200% 2,1 M 300% 2,1 M2,1 M 300% 1,4 M 1,8 M 1,9 M 300% 1,4 M 1,8 M1,8 M 1,8 M 1,9 M 100% 1,4 M 1,8 M 1,9 M 1,8 M 200% 200%200% 0% 2006 2007 2008 2009 2010 100% 100%100%
0% 2006 2007 2008 2009 2010 0% 0% 20062006 20072007 20082008 20092009 20102010 250% Armeec Insurance Market 200% 250% Armeec 250%150%250% Armeec ArmeecInsurance Market 4,4 M Insurance Market 200% Insurance Market 200%100%200% 150% 150% 4,4 M 150%50% 4,4 M4,4 M 100% 2,2 M 100%0%100% 1,6 M 50% 1,3 M 50%- 50%50% 0,7 M 2,2 M 0% 2,2 M2,2 M 0% 0% 1,6 M - 10% 2006 2007 20081,6 M 2009 2010 1,3 M 1,6 M - 50% 1,3 M1,3 M - 50% 0,7 M - 50% 0,7 M0,7 M - 10% 600%- 10% 2006Armeec 2007 2008 2009 2010 - 10% 20062006 20072007 20082008 20092009 20102010 Insurance Market 500% 600% Armeec 2,5 M 600%600% Armeec 400% ArmeecInsurance Market InsuranceInsurance Market Market 500% 500%500% 1,8 M 2,5 M 300% 2,5 M 2,5 M 400% 400%400% 1,4 M 200% 1,0 M 1,8 M 300% 1,8 M1,8 M 300%300% 100% 0,9 M 1,4 M 200% 1,4 M1,4 M 200%200% 1,0 M 0% 1,0 M1,0 M 2006 2007 2008 2009 2010 100% 0,9 M 100%100% 0,9 M0,9 M 0% 2006 2007 2008 2009 2010 0% 0% 20062006 20072007 20082008 20092009 20102010 600% Armeec Insurance Market 500%
400% 600% Armeec 300% Insurance Market 79,1 M 500% 62,6 M 88,2 M 89,4 M 200% 400% 30,7 M 100% 300% 79,1 M 0% 2006 2007 2008 2009 2010 62,6 M 88,2 M 89,4 M 200%
30,7 M 100% 600% 700% Armeec Armeec 0% Insurance Market 2006Insurance Market2007 2008 2009 2010 500% 600%
500% 400% 41,1 M 700%400% 300% Armeec 32,8 M 79,1 M Insurance Market 28,1 M 600%300% 88,2 M 89,4 M 62,6 M 600%200% Armeec 18,2 M 500%200% 30,7Insurance M Market 100% 13,8 M 41,1 M 500% 400%100% 32,8 M 400%0% 28,1 M 300%0% 2006 2007 2008 2009 2010 2006 2007 2008 2009 2010 18,2 M 300% 200% 79,1 M 13,8 M 88,2 M 89,4 M 100% 62,6 M 700%200% Armeec 0% 30,7Insurance M Market 600%100% 2006 2007 2008 2009 2010 900% 500% Armeec 0% 800% 2006 2007 2008 2009 41,12010 M Insurance Market 400% 700% 32,8 M 300% 600% 28,1 M 900% 500% 18,2 M 700% Armeec 200% Armeec 800% Insurance Market Insurance Market 10,2 M 400% 13,8 M 600% 10,1 M 100% 700% 300% 500% 6,3 M 600% 0% 200% 2006 2007 2008 2009 41,12010 M 3,7 M 6,1 M 400% 500% 32,8 M 100% 10,2 M 400% 28,1 M 300% 10,1 M 0% 2006 2007 2008 2009 2010 300% 18,2 M 200% 6,3 M 200% 13,8 M 3,7 M 6,1 M 900%100% 100% Armeec 800% Insurance Market 0% 0% 2006 2007 2008 2009 2010 700% 2006 2007 2008 2009 2010 350% 600% Armeec Insurance Market 300% 500% 250% 10,2 M 400% 10,1 M 11,8 M 900% 200% 300% 350% 6,3 M Armeec 800% Armeec 150% Insurance Market 200% 10,9 M 300% 3,7 M 6,1 M Insurance Market 700% 100% 100% 10,0 M 250% 600% 11,8 M 50% 0% 6,4 M 200% 2006 2007 2008 2009 2010 500% 4,0 M 0% 150% 10,2 M 400% 10,9 M - 50% 10,1 M 2006 2007 2008 2009 2010 100% 300% 10,0 M 6,3 M 50% 200% 6,1 M 6,4 M 3,7 M 4,0 M 0%100% 100%350% Armeec Armeec Insurance Market - 80%50% 0% Insurance Market 300% 2006 2007 2008 2009 2010 2006 2007 2008 2009 2010 60% 250% 11,8 M 100% ARMEEC 200% 40% Armeec 3,1 M IN 2010 150% Insurance Market 2,7 M 2,7 M 80% 20% 10,9 M 2,6 M 100% 2,3 M 60% 10,0 M 350% 0% Armeec 50% 300% 40% 4,0Insurance M Market6,4 M - 20% 0% 3,1 M In 2010 Armeec JSC reported a growth of 12.8% in Personal Accident and Travel2,7 M Assistance2,7 M 250% 20% - 50% - 40% 11,8 M 2,3 M 2,6 M insurance,2006 and2007 ranked second2008 on2009 the market2010 of200% these insurances.2006 The2007 written2008 premiums2009 from 2010 0% Personal Accident and Travel Assistance insurance150% amounted to about BGN 5.2 million and the 10,9 M 100% - 20% market share was 15.3%. 100% Armeec 10,0 M Insurance Market 50%80% - 40% 6,4 M 2006 2007 2008 2009 2010 4,0 M 0% 600% 60% Armeec - 50% Insurance Market Premium2006 Income2007 from2008 personal2009 accident2010 40% Premium Income from travel assistance 500% 3,1 M insurance2,7 M (BGN)2,7 M (BGN) 20% 400% 2,3 M 2,6 M 100% 600% Armeec Armeec 0% 2,1 M Insurance Market 80% Insurance Market 300% 1,4 M 1,8 M 1,9 M 500% - 20% 1,8 M 60% 200% 400% - 40% 2006 2007 2008 2009 2010 40% 100% 3,1 M 2,1 M 2,7 M 2,7 M 300% 20% 1,4 M 1,8 M 1,9 M 2,3 M 2,6 M 1,8 M 0% 2006 2007 2008 2009 2010 200% 0%
-600% 20% 100% Armeec Insurance Market - 40% 500% 0% 2006 2007 2008 2009 2010 2006 2007 2008 2009 2010 250% Armeec 400% Insurance Market 200%
150% 2,1 M 300% 4,4 M 1,4 M 1,8 M 1,9 M 250% 1,8 M 600% Armeec 100% The FinancialArmeec risks insurance registered highest200% growth in 2010 - 101%. The company generated Insurance Market 200% Insurance Market 50% premium income of over BGN 4.4 million and added500% more than BGN 2.2 million to its portfolio from 100% 150% this line of business. 2,2 M 0% 4,4 M 400% 1,6 M 0% 1,3 M 100%- 50% 2006 2007 2008 2009 2010 2,1 M 0,7 M 300% 50% 1,4 M 1,8 M 1,9 M - 10% 1,8 M Premium2006 Income2007 from2008 Liabilities2009 insurance2010 Premium Income from Financial risks 200% 2,2 M 0% insurance (BGN) (BGN)1,6 M 1,3 M 250% 600%- 50% Armeec 100% 0,7 M Armeec Insurance Market 200% Insurance Market - 10% 500% 0% 2006 2007 2008 2009 2010 2006 2007 2008 2009 2010 150% 2,5 M 4,4 M 400% 600% 100% Armeec 1,8 M Insurance Market 300% 50% 500% 250% Armeec 1,4 M 2,5 M 200% 2,2 M 0% 400% Insurance Market 1,0 M 1,6 M 200% 1,3 M - 50% 100% 0,9 M 1,8 M 0,7 M 150% 300% 4,4 M - 10% 0% 2006 2007 2008 2009 2010 100% 2006 2007 1,42008 M 2009 2010 200% 1,0 M 50% 100% 600% 0,9 M Armeec 2,2 M 0% Insurance Market 1,6 M 0% 500% 2006 2007 2008 2009 2010 The written1,3 premiums M generated from Liabilities- 50% insurance amounted to BGN 2.54 million, representing 0,7 M 2,5 M 400% nearly 40% growth compared to the previous -year. 10% 2006 2007 2008 2009 2010 1,8 M 300%
600% Armeec 1,4 M 200% Insurance Market1,0 M 500% 100% 0,9 M 2,5 M 400% 0% 2006 2007 2008 2009 2010 1,8 M 300%
1,4 M 200% 1,0 M 100% 0,9 M
0% 2006 2007 2008 2009 2010 15 ARMEEC IN 2010
Premium Income of Armeec JSC by Line of Business (2009-2010)
As of 31 December 2010 As of 31 December 2009 +/- BGN Share (%) BGN Share (%) % Personal Accident 3 124 166 2.01% 2 699 675 1.82% 15.72%
Motor Casko 79 072 139 50.93% 89 410 509 60.32% -11.56%
Aviation 10 187 515 6.56% 10 055 446 6.78% 1.31%
Marine 470 034 0.30% 548 350 0.37% -14.28%
Cargo 536 168 0.35% 546 409 0.37% -1.87%
Property 11 751 931 7.57% 10 917 938 7.37% 7.64%
Motor TPL 41 074 586 26.45% 28 123 489 18.97% 46.05%
Liabilities 2 543 221 1.64% 1 823 554 1.23% 39.47%
Financial Risks 4 436 424 2.86% 2 206 290 1.49% 101.08%
Travel Assistance 2 073 012 1.34% 1 907 133 1.29% 8.70%
Total: 155 269 195 100.00% 148 238 791 100.00% 4.74%
In 2010 the claims paid by Armeec Jsc increased by 4%. The claims paid under Motor Casko comprised the largest share - about 66%, and the claims paid under Motor TPL accounted for 20%. The number of paid claims rose by 8% in 2010 compared to the previous year. A decrease in the average paid claim was reported - in 2010 it amounted to BGN 935 against 964 in 2009. Over the last year the risk development in most lines of business was within the expected limits.
Claims Paid by Armeec Jsc by Line of Business (2009-2010)
As of 31 December 2010 As of 31 December 2009
BGN Share (%) BGN Share (%)
Personal Accident 1 142 567 1.76% 460 680 0.74%
Motor Casko 42 576 139 65.60% 43 350 069 69.77%
Aviation 140 773 0.22% 1 758 477 2.83%
Marine 95 197 0.15% 180 311 0.29%
Cargo 8 922 0.01% 20 759 0.03%
Property 2 706 540 4.17% 1 064 590 1.71%
Motor TPL 12 714 198 19.59% 14 332 111 23.07%
Liabilities 402 623 0.62% 21 338 0.03%
Financial Risks 4 274 996 6.59% 447 756 0.72%
Travel Assistance 838 350 1.29% 494 271 0.80%
Total: 64 900 305 100.00% 62 130 362 100.00%
16 ARMEEC IN 2010
Market Share of Armeec JSC by Line of Business as of 31 December 2010
87% 13% 84% 16% 57% 43%
Personal Accident Motor Casco Aviation
96% 4% 95% 5% 92% 8%
Cargo Property Motor TPL
92% 8% 80% 20% 79% 21%
Liabilities Financial Risks Travel Assistance
Key Financial Data
The own funds of Armeec Jsc as of 31.12.2010 amounted BGN 34 414 thousand, and the solvency margin (pursuant to Art. 20 of the Ordinance on the own funds and solvency margin of insurers and health insurance companies) was BGN 24 530 thousand. The own funds of the company meet the requirements of the law in respect of the solvency margin. The guarantee capital of Armeec Jsc is BGN 8 177 thousand.
The assets of the company guarantee the commitments under the insurance contracts and ensure its financial stability together with the reinsurance program. The long-term assets of the Company as of 31.12.2010 amounted to BGN 28 966 thousand and comprised 16.47% of the company assets.
17 ARMEEC IN 2010
Key Financial Indicators
2010 2009 2008 2007 2006
Gross premium income (thousand BGN) 155 269 148 239 145 968 90 725 57 889
Market share (%) 11.29% 10,18% 9,53% 7,15% 5,46%
Annual growth of gross premium income (%) 4.74% 1.56% 60.90% 56.72% 29.37%
Annual growth of the non-life insurance -5.63% -4.93% 20.90% 19.66% 15.33% market (%)
Profit / loss (thousand BGN) 6 917 3 745 1 595 15 123 19 945
Net profit / net loss (thousand BGN) 6 718 2 975 1 937 14 910 17 497
Assets (thousand BGN) 175 799 156 133 140 920 117 972 80 876
Equity (thousand BGN) 41 131 35 158 31 644 48 388 33 478
Share capital (thousand BGN) 15 019 15 019 15 019 15 019 15 019
Net written premiums (thousand BGN) 139 343 132 425 134 378 81 325 52 097
Technical result (thousand BGN) 614 1 430 318 1 164 (3 284)
Loss ratio (%) 49% 53% 50% 46% 52%
Armeec Jsc ended the year 2010 with positive financial result, which was due to the good development of risk under the Motor TPL insurance and the achieved return on investments. The net profit amounted to BGN 6.7 million, and was more than twice bigger than the 2009 result.
Net Profit for the Period 2006-2010 (BGN ‘000)
BG '000 17 497 18 000
16 000 14 910
14 000
12 000
10 000
8 000 6 718 6 000
4 000 2 975 1 937 2 000
0 2006 2007 2008 2009 2010
18 ARMEEC IN 2010
New Products and Initiatives
In 2010 the company continued its work on improving customer service and providing better accessibility to its services through the use of its branch network and distribution channels; enhancing the technological processes and finding new and better solutions for optimization of the overall work with clients.
An important role to this effect played the website of the company, which was fully renovated in 2010 and facilitated to a large extent the customers’ access to information about the product range of Armeec and the opportunities and services provided by the company.
Over the year Armeec continued to launch on the market new flexible and optimized products and packages of products, offering a variety of coverage at competitive prices. The package product Armeec Summer was introduced to provide protection of the policyholder’s life, health, car and home throughout the summer. In the high tourist season Armeec introduced a new motor insurance Solidarity, which allowed the clients, insured under motor TPL with Armeec, to be issued one-month Green Card certificate, required for trips abroad.
Since August 2010 the Motor Casko insurance of Armeec for motor vehicles of total weight up to 3.5 tons has been extended to include free road assistance for trips abroad. It provides 24-hour technical support in case of a car accident or breakdown on the territory of the member-states of the Green Card Agreement.
Over the year a new cover was introduced in the product Rescue costs of Armeec Jsc. Besides the “standard” risks, the policy covers mountain rescue for those practising free-ride and extreme skiing, and snowboarding. To facilitate the mountain sports fans, the insurance can be taken out by sending SMS.
In the beginning of the year 2010 Armeec Jsc obtained a license to insure rail vehicles and expanded its product portfolio with this new segment.
Corporate Social Responsibility
In the year 2010 Armeec Jsc was an active participant and sponsor of a number of local and national initiatives for prevention of various risks and providing better awareness of the advantages of insurance. The company became part of the national campaign “Walk to school”, which aimed to reduce the road accidents involving children by improving their knowledge of traffic rules and fostering the accountability and discipline of young people. It was a joint initiative of Armeec Jsc, the Pedestrians Foundation, the Ministry of Education, Youth and Science, the Centre for Training Firms, Bulgarian Business Leaders Forum, Sofia Municipality and the Traffic Police authorities. Driven by the belief that each of us can help for the improved traffic safety, the company participated in the traffic police campaign “It is vacation time! Let us preserve the lives of children on the road!” with the brochure “Tips for safe travel” and the booklet „Protect me, I am a student”, issued together with the newspaper 24 Hours in the beginning of the new school year.
19 ARMEEC IN 2010
Armeec Jsc actively supports the Bulgarian sport and encourages physical activity. In 2010 the company took part in various sports initiatives, both for professionals and amateurs. Over the year, the Bulgarian kyokushin athletes, supported by Armeec Jsc, achieved good results at the Third Open European Championship of this sport in the city of Varna, as well as at other international events. Armeec Jsc was a sponsor of the professional football club Cherno more Varna, and supported two crews, which successfully participated in the Bulgarian rally championship.
Future Development
The future development both of Armeec Jsc and the insurance market in the country is closely related to the improving macroeconomic environment and the overcoming of the negative effects of the crisis, which will be a prerequisite for its higher rates of development. Factors, which have a longer-term impact on the activities of the insurance industry, are the introduction of 2% tax on insurance premiums and the regulations adopted by the Financial Supervision Commission, aimed at improving the financial stability of the companies and the correct reporting of risk (and hence achieving of a fair price) in the Motor TPL insurance. The company activities will be directed at maintaining its market position and achieving positive financial results through higher quality and professionalism in customer service; development of flexible packages of products ensuring comprehensive care for the policyholders; enhanced claims settlement procedures, and expanded network of intermediaries across the country. The company expects a positive effect of the introduction of the electronic policy and the implementation of the bonus-malus system, using a unified approach and unified source of information for all companies. In the year 2011 Armeec Jsc will continue to take part in joint initiatives and projects with the companies of Chimimport Holding, aimed at enhancing their flexibility, stability and identification. The company philosophy in the competitive market environment is based on the awareness of the need for innovation, searching and providing the best solutions, as well as quick and timely adaptation to the changing customer requirements.
20 FINANCIAL STATEMENTS
STATEMENT OF FINANCIAL POSITION
2010 2009 Assets BGN ‘000 BGN ‘000 Non-current assets Intangible assets 324 344 Property, plant and equipment 1 431 1 943 Investments in subsidiaries 50 50 Investment property 26 253 26 438 Long-term financial assets 360 - Deferred tax assets 546 - Non-current assets 28 964 28 775 Current assets Financial assets, held for trading 57 127 53 809 Financial assets, available for sale 3 031 3 858 Insurance and reinsurance contract receivables 42 991 42 858 Related parties receivables 4 721 1 077 Other receivables 9 419 7 818 Cash and cash equivalents 29 546 18 354 Current assets 146 835 127 774 Total assets 175 799 156 549
Prepared by: ...... Executive Director: ...... (Julia Staneva) Rumen Georgiev) Date: 10.03.2010 Executive Director:...... Tsvetanka Krumova)
Audited according to the auditor’s Audited according to the auditor’s report dated 30.03.2011: ...... report dated 30.03.2011 ...... (Mariy Apostolov) (Dr. Mariana Mihaylova)
21
Annual report 2010 FINANCIAL STATEMENTS
STATEMENT OF FINANCIAL POSITION (CONTINUED)
2010 2009 Equity, insurance reserves, and liabilities BGN ‘000 BGN ‘000 Equity Share capital 15 019 15 019 Other reserves 38 281 35 306 Revaluation reserve (18 887) (18 142) Retained earnings 6 718 2 975 Total equity 41 131 35 158
Insurance reserves 116 286 105 005
Liabilities Non-current liabilities Pension and other employee obligations 257 262 Finance lease liabilities 100 414 Deferred tax liabilities - 35 Non-current liabilities 357 711
Current liabilities Pension and other employee obligations 1 535 1 430 Finance lease liabilities 257 197 Insurance and reinsurance contracts payables 14 515 13 015 Short-term related party payables 61 392 Tax liabilities 792 462 Other liabilities 865 179 Current liabilities 18 025 15 675
Total liabilities 18 382 16 386
Total equity, insurance reserves, and liabilities 175 799 156 549
Prepared by: ...... Executive Director: ...... (Julia Staneva) Rumen Georgiev) Date: 10.03.2010 Executive Director:...... Tsvetanka Krumova)
Audited according to the auditor’s Audited according to the auditor’s report dated 30.03.2011: ...... report dated 30.03.2011 ...... (Mariy Apostolov) (Dr. Mariana Mihaylova)
22 FINANCIAL STATEMENTS
STATEMENT OF COMPREHENSIVE INCOME
2010 2009 BGN ‘000 BGN ‘000 Premium income 155 269 148 239 Reinsurers’ share premium (15 926) (15 814) Net premium income 139 343 132 425
Insurance expenses (69 748) (66 848) Income from reinsurance compensations 2 435 2 904 Insurance amounts and compensations, net (67 313) (63 944)
Net change in insurance reserves (15 035) (10 309) Other insurance and reinsurance expenses, net (32 637) (34 725) Operating profit 24 358 23 447
Administrative expenses (10 809) (11 560) Employee benefits expenses (13 587) (12 538) Other income 677 805 Changes in the fair value of investment property (334) (291) Net gain from financial assets held for trading 6 467 3 509 Finance expenses (282) (220) Finance income 427 593 Profit before tax 6 917 3 745 Income tax expense (199) (770) Profit for the year 6 718 2 975 Other comprehensive income Financial assets available for sale - current year losses/(gains), net from taxes (745) 539 Other comprehensive income for the year, net of tax (745) 539 Total comprehensive income for the year 5 973 3 514
Earnings per share BGN BGN Basic earnings per share 44.73 19.81
Prepared by: ...... Executive Director: ...... (Julia Staneva) Rumen Georgiev) Date: 10.03.2010 Executive Director:...... Tsvetanka Krumova)
Audited according to the auditor’s Audited according to the auditor’s report dated 30.03.2011: ...... report dated 30.03.2011 ...... (Mariy Apostolov) (Dr. Mariana Mihaylova)
23 FINANCIAL STATEMENTS
STATEMENT OF CHANGES IN EQUITY
Re- All amounts are present in Other Retained Total Share capital valuation BGN ‘000 reserves earnings equity reserve Balance at 1 January 2010 15 019 35 306 (18 142) 2 975 35 158 Reserves set aside - 2 975 - (2 975) - Profit for the year - - - 6 718 6 718
Other comprehensive losses: Available-for-sale financial assets: - current year losses, net - - (745) - (745) from taxes Total comprehensive income - - (745) 6 718 5 973 for the year Balance at 31 December 15 019 38 281 (18 887) 6 718 41 131 2010
Prepared by: ...... Executive Director: ...... (Julia Staneva) Rumen Georgiev) Date: 10.03.2010 Executive Director:...... Tsvetanka Krumova)
Audited according to the auditor’s Audited according to the auditor’s report dated 30.03.2011: ...... report dated 30.03.2011 ...... (Mariy Apostolov) (Dr. Mariana Mihaylova)
24 FINANCIAL STATEMENTS
STATEMENT OF CHANGES IN EQUITY (continued)
Re- All amounts are present in Other Retained Total Share capital valuation BGN ‘000 reserves earnings equity reserve Balance at 1 January 2009 15 019 33 369 (18 681) 1 937 31 644 Reserves set aside - 1 937 - (1 937) - Profit for the year - - - 2 975 2 975
Other comprehensive income: Available-for-sale financial assets: - current year gains, net of - - 539 - 539 taxes Total comprehensive income - - 539 2 975 3 514 for the year Balance at 31 December 15 019 35 306 (18 142) 2 975 35 158 2009
Prepared by: ...... Executive Director: ...... (Julia Staneva) Rumen Georgiev) Date: 10.03.2010 Executive Director:...... Tsvetanka Krumova)
Audited according to the auditor’s Audited according to the auditor’s report dated 30.03.2011: ...... report dated 30.03.2011 ...... (Mariy Apostolov) (Dr. Mariana Mihaylova)
25 FINANCIAL STATEMENTS
STATEMENT OF CASH FLOWS
2010 2009 BGN ‘000 BGN ‘000 Operating activities Cash receipts from insurance contracts 144 042 135 228 Cash receipts from reinsurance contracts 3 988 155 Cash payments for insurance contracts (64 903) (66 720) Cash payments for reinsurance contracts (8 758) (128) Cash receipts from customers 864 2 007 Cash payments to suppliers (6 455) (16 574) Cash payments to employees and social security institutions (33 265) (13 269) Income tax payments (359) - Other taxes payments (94) (1 385) Other payments for operating activities (24 897) (30 916) Net cash flow from operating activities 10 163 8 398
Investing activities Purchase of property, plant and equipment (296) (1 364) Purchase of intangible assets (130) (76) Proceeds from disposal and redemption of non-derivative financial 2 399 1 805 assets Purchase of non-derivative financial assets (574) (10 461) Net cash flow from investing activities 1 399 (10 096) Financing activities Finance lease liabilities payments (253) (332) Interest payments (31) (39) Net cash flow from financing activities (284) (371) Net change in cash and cash equivalents 11 278 (2 069) Cash and cash equivalents, beginning of year 18 354 20 387 Exchange losses/(gains) from currency translation (86) 36 Cash and cash equivalents, end of year 29 546 18 354
Prepared by: ...... Executive Director: ...... (Julia Staneva) Rumen Georgiev) Date: 10.03.2010 Executive Director:...... Tsvetanka Krumova)
Audited according to the auditor’s Audited according to the auditor’s report dated 30.03.2011: ...... report dated 30.03.2011 ...... (Mariy Apostolov) (Dr. Mariana Mihaylova)
26 INDEPENDENT AUDITOR’S REPORT
To the Shareholders of ARMEEC JSC Sofia Report on the Financial Statements
We have audited the accompanying financial statements of Armeec JSC, which comprise the statement of financial position as of 31 December 2010, and the statement of comprehensive income statement of changes in equity and statement of cash flows for the year then ended, and a summary of significant accounting policies and other explanatory notes.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance with International Financial Reporting Standards, as adopted by EU and the national legislation and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement.
27
Annual report 2010 INDEPENDENT AUDITOR’S REPORT
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the financial statements give a true and fair view of the financial position of Armeec JSC as of 31 December 2010, and of its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards, as adopted by EU and the national legislation.
Report on Other Legal and Regulatory Requirements – Management’s report for the year ended 31 December 2010
We have reviewed the management’s report for the year ended 31 December 2010 of Armeec JSC, which is not part of the financial statements. The historical financial information in the management’s report complies in its main aspects with the financial information, presented in the financial statements for the year ended 31 December 2010, prepared in accordance with International Financial Reporting Standards, as adopted by EU and the national legislation. The preparation of the management’s report is responsibility of the management.
Mariy Apostolov Dr. Mariana Mihaylova Registered Auditor Registered Auditor Managing partner
Grant Thornton Ltd. Auditing Company
30 March 2011 Bulgaria, Sofia
28 DISTRIBUTION AND BRANCH NETWORK
As at 31 December 2010 the company performed activities in 80 towns through 52 agencies and 68 representative offices. All types of non-life insurance products are offered in the offices of Armeec JSC and through insurance intermediaries, working for the company.
Silistra Vidin Dulovo Lom Ruse Isperih
Dobrich Svishtov Razgrad
Montana Pleven Targovishte Shumen Varna Berkovitsa Vratsa Gorna Oryahovitsa Provadia Mezdra Lovech Veliko Omurtag Sevlievo Tarnovo Svoge Troyan Strezimirovtsi Botevgrad Gabrovo Bankya Sliven Sofia Pirdop Aytos Karlovo Kazanlak Pernik Panagyurishte Yambol Burgas Stara Zagora Kyustendil Samokov Dupnitsa Pazardzhik Plovdiv Blagoevgrad Asenovgrad Dimitrovgrad Velingrad Peshtera Haskovo Razlog Bansko Svilengrad
Gotse Delchev Kardzhali Sandanski Smolyan Petrich
29
Annual report 2010 DISTRIBUTION AND BRANCH NETWORK
Head Office
Sofia, 2 Stefan Karadzha Str., tel.: +359 2/ 8119100
Claims Handling and Subrogation Department
Sofia, 20 Frederic Joliot Curie Str., tel.: +359 2/ 8190946 Sofia, 357А Slivnitsa Blvd., tel.: +359 2/ 8264309 Varna, 279A Vladislav Varnenchik Blvd., tel.: +359 52/ 733055 Bourgas, 81 Stefan Stambolov Str., tel.: +359 56/ 846742 Plovdiv, 2А Mendeleev Str., tel.: +359 32/ 623198 Veliko Tarnovo, 15 Kozludzha Str., tel.: +359 62/ 604252 Pleven,11 Ivan Rilski Str., tel.: +359 64/ 824070 Gabrovo, 54 Bryanska Str., tel.: +359 66/ 804898 Pernik, 1 Yuri Gagarin Str., Industrial area, tel.: +359 76/ 670331 Stara Zagora, 59 Hadji Dimitar Assenov Str., tel.: +359 42/ 620197 Haskovo, 124 Bulgaria Blvd., 1st floor, office 11, tel.: +359 38/ 666126 Blagoevgrad, 1 Alexander von Humboldt Str., tel.: +359 73/ 831630 Lovech, 81 Bulgaria Blvd., tel.: +359 68/ 600103
Agencies of Armeec Jsc
Bansko, 79 Pirin Str., tel.: +359 749/ 83704 Blagoevgrad, 7 Bratja Kitanovi Str., tel.: +359 73/ 880137 Bourgas, 1 Konstantin Fotinov Str., tel.: +359 56/ 842829 Varna, 35 Radko Dimitriev Str., tel.: +359 52/ 630775 Varna, 13 Kapitan Petko Voyvoda Str., tel.: +359 52/ 603726 Veliko Tarnovo, 42 Nikola Gabrovski Str., tel./ fax:: +359 62/ 600238 Vidin, 48 Tzar Simeon Str., tel.: +359 94/ 600434 Vratsa, 7 Krastyu Balgariyata Str., tel.: +359 92/ 660496 Gabrovo, 54 Bryanska Str., tel.: +359 66/ 804897 Gotze Delchev, 4 Rakovski Str., tel.: +359 751/ 60964 Dobrich, 7 Ekzarh Yosif Str., tel.: +359 58/ 602564 Dupnica, 21А Hristo Botev Str., tel.: +359 701/ 51151 Kazanlak, 43 Al. Batenberg Blvd., office 1,2; tel./ fax: 0431/ 63961 Kardzhali, 47 Republikanska Str., tel.: +359 361/ 65817 Lovech, 5 Bulgaria Blvd. fl. 1, tel.: +359 68/ 601791 Lovech, 8 Dimitar Pashkov Str., tel.: +359 68/ 601900 Montana, 3A Graf Ignatiev Str., tel.: +359 96/ 304305 Pazardzhik, 1 Konstantin Velichkov Str, tel.: +359 34/ 440474
30 DISTRIBUTION AND BRANCH NETWORK
Pazardzhik, 18 Al. Stamboliyski Blvd., tel.: +359 34/ 443090 Pernik, Yuri Gagarin Str. bl. 7, tel.: +359 76/ 672090 Pernik, 61 Krakra Str., tel.: +359 76/ 601100 Pleven, 7 Danail Popov Str., tel.: +359 64/ 830531 Pleven, 18 Kiril I Metodij Str., tel./ fax: +359 64/ 822010 Plovdiv, 2А Mendeleev Str., tel.: +359 32/ 622402; 633061 Plovdiv, 2 Tzaribrod Str. / Jumajata/ , tel.: +359 32/ 638565 Razgrad, 36 Beli Lom Str., 1st floor., apt.1, tel.: +359 84/ 660638 Rousse, 10 Sveta Troitza Sq., tel.: +359 82/ 834377; fax: 082/ 834640 Samokov, 64 Iskar Blvd., tel.: +359 722/ 66194 Sandanski, 55 Makedonia Str., tel.: +359 746/ 32808; 0746/ 33130 Silistra, 3 Rakovska Str., tel.: +359 86/ 821675 Sliven, 11 Tzar Osvoboditel Blvd., tel.: +359 44/ 662962 Smolyan, 1 Dimitar Blagoev Str., tel.: +359 301/ 63937 Sofia, 21 General Gurko Str., tel.: +359 2/ 9811112; 9815554 Sofia, 71 James Baucher Blvd., 2nd floor, tel.: +359 2/ 8662596 Sofia, 9-11 Hadzhi Dimitar Str., tel.: +359 2/ 9867784; 9867785 Sofia, 134 Alexander Stamboliyski Blvd., tel.: +359 2/ 4219693 Sofia, Iztok, 17 Frederic Joliot Curie Str., Bl.156-2, tel.: +359 2/ 8703038 Sofia, 2 Shipchenski prohod Blvd. bl. 40, entr. А,1st floor, tel.: +359 2/ 9797011 Sofia, 71 Vitosha Blvd. entr. 1, 1st floor, tel.: +359 2/ 9516255 Sofia, Mladost 1, 14B Andrey Saharov Blvd., tel.: +359 2/ 9744336 Sofia, Lozenetz, 78 Hristo Smirnenski Str., tel.: +359 2/ 8686133 Sofia, Ovcha Kupel, 5-7 Yasna Mesechinka, 2nd floor, office 2, tel.: +359 2/ 4894502 Sofia, 31 Gotze Delchev Blvd., bl. 76, tel.: +359 2/ 8598341 Sofia, Iztok, 46А Rayko Alexiev Str., tel.: +359 2/ 8701340 Sofia, 2 Dragan Tzankov Blvd., tel.: +359 2/ 9635032 Sofia, Lozenetz, 26 Stoyan Mihailovski Str., Ground floor, tel.: +359 2/ 8626011 Stara Zagora, 7 Metodi Kusev Str., tel.: +359 42/ 623303; 620333 Stara Zagora, 58 General Gurko Str., 2nd floor, tel.: +359 42/ 601378 Targovishte, 2 Vassil Levski Str., tel.: +359 601/ 61606 Haskovo, 26 Saedinenie Blvd., tel.: +359 38/ 622584; 665451 Shumen, 10 Patleyna Str., tel./ fax: 054/ 884102 Yambol, 44 Strahil Voyvoda Str., 1st floor, office 1, tel./ fax: 046/ 661167
31