ASSETS
Notes 31.12.2025 31.12.2024
Property, plant and equipment
1
14 8
Investments in subsidiaries
2
16 642 16 642
Investments in associates
2
7 312 7 741
Other investments
2
5 559 6 537
Other non-current financial assets
3
609 609
Non-current receivables from related parties
4
4 182 5 414
Other non-current receivables
5
8 821 9 321
Deferred tax assets
6
137 38
43 276 46 310
Current receivables from related parties
7
4 361 4 368
Other current receivables
8
11 11
Deferred expenses 40 24
Cash and cash equivalents
9
6 753 5 609
11 165 10 012
54 441 56 322
Share capital
10
20 775 20 775
Reserves
10
11 750 12 630
Retained earnings
10
8 050 8 057
Net result for the period
10
5 237 6 537
45 812 47 999
Non-current liabilities to related parties
11
239 284
Deferred revenue
12
50 50
Deferred tax liabilities
13
452 451
741 785
Dividends payables
14
7 547 7 199
Other current liabilities
15
341 339
7 888 7 538
8 629 8 323
54 441 56 322
Date of compilation: 16.03.2026
Prepared by:
Kremena Dulgerova
Katya Zlatareva
TOTAL ASSETS
STARA PLANINA HOLD PLC
Current liabilities
STATEMENT OF FINANCIAL POSITION
For the period ended 31 December 2025
BGN’000s
Non-current assets
EQUITY
Total Non-current assets
Total equity
Registered Auditor, Diploma No 0610
Manager:
Vasil Velev
Current assets
Total current liabilities
Total non-current liabilities
TOTAL EQUITY AND LIABILITIES
Non-current liabilities
Total current assets
Total liabilities
Kremena
Gantcheva
Dulgerova
Digitally signed by
Kremena Gantcheva
Dulgerova
Date: 2026.03.30
08:58:43 +03'00'
Vasil
Georgiev
Velev
KATYA
RAYKOVA
ZLATAREVA
Digitally signed by
KATYA RAYKOVA
ZLATAREVA
Date: 2026.03.30
13:01:28 +03'00'
Notes
31.12.2025 31.12.2024
Divident income
16
5 782 7 466
Other financial income
17
727 484
Other income
18
1 221 1 205
Cost of materials
19
(33) (20)
Cost of hired services
20
(237) (218)
Depreciation (4) (3)
Employee expenses
21
(2 089) (2 226)
Other expenses
22
(129) (143)
Other financial expenses (1) (8)
Result for the period before tax 5 237 6 537
Tax expense, net
Net result for the period 5 237 6 537
Other comprehensive income
(978) 941
98 (94)
(880) 847
Total comprehensive income
4357 7384
Earnings per share
0,25 0,31
Date of compilation: 16.03.2025
Prepared by:
Kremena Dulgerova
Katya Zlatareva
Investments in equity instruments, reported at FVOCI
Tax effects
Other comprehensive income, net of taxes
Manager:
Vasil Velev
Registered Auditor, Diploma No 0610
STARA PLANINA HOLD PLC
STATEMENT OF COMPREHENSIVE INCOME
BGN’000s
For the period ended 31 December 2025
Kremena
Gantcheva
Dulgerova
Digitally signed by
Kremena Gantcheva
Dulgerova
Date: 2026.03.30
08:59:05 +03'00'
Vasil
Georgie
v Velev
Digitally signed
by Vasil
Georgiev Velev
Date: 2026.03.30
09:02:10 +03'00'
KATYA
RAYKOVA
ZLATAREV
A
Digitally signed
by KATYA
RAYKOVA
ZLATAREVA
Date: 2026.03.30
13:01:56 +03'00'
CASH FLOWS FROM OPERATING ACTIVITIES
31.12.2025 31.12.2024
Cash paid to suppliers (353) (332)
Cash paid to employees and social security institutions (2 192) (2 197)
Taxes paid (206) (206)
Bank charges paid (1) (1)
Other payments/proceeds from operating activities 2 (130)
Net cash used in operating activities (2 750) (2 866)
INVESTING ACTIVITIES
Purchase of non-current assets (9) (6)
Payments for loans granted (4 300) (6 100)
Proceeds from loans granted 6 032 4 736
Interests from loans received 512 537
Purchase of investments (1)
Proceeds from sale of investments 650 93
Dividends received from investments 5 782 7 466
Net cash used in investing activities
8 666 6 726
FINANCING ACTIVITIES
Dividends paid (4 772) (4 787)
Net cash used in financing activities (4 772) (4 787)
Net increase in cash and cash equivalents 1 144 (927)
Cash and cash equivalents at a beginning of the period 5 609 6 536
Cash and cash equivalents at the end of the period 6 753 5 609
Date of compilation: 16.03.2026
Prepared by: Manager:
Kremena Dulgerova
Katya Zlatareva
Registered Auditor, Diploma No 0610
STARA PLANINA HOLD PLC
BGN’000s
For the period ended 31 December 2025
STATEMENT OF CASH FLOWS
Vasil Velev
Kremena
Gantcheva
Dulgerova
Digitally signed by
Kremena Gantcheva
Dulgerova
Date: 2026.03.30
08:59:24 +03'00'
Vasil
Georgiev
Velev
Digitally signed
by Vasil Georgiev
Velev
Date: 2026.03.30
09:02:26 +03'00'
KATYA
RAYKOVA
ZLATAREVA
Digitally signed
by KATYA
RAYKOVA
ZLATAREVA
Date: 2026.03.30
13:02:15 +03'00'
Share
Capital
Reserves from
changes in fair
value of
investments in
equity
instruments
Other
reserves
Retained
earnings
Total
Balance 01 January 2024 20 775 2 874 8909 14 602 47 160
Net result for the period 6 537 6 537
Profit sharing for dividends (6 545) (6 545)
Other changes in equity
847
847
Balance 31 December 2024 20 775 3 721 8 909 14 594 47 999
Balance 01 January 2025 20 775 3 721 8 909 14 594 47 999
Net result for the period 5 237 5 237
Profit sharing for dividends (6 545) (6 545)
Other changes in equity
-880 1 (879)
Balance 31 December 2025 20 775 2 841 8 909 13 287 45 812
Date of compilation: 16.03.2025
Prepared by:
Kremena Dulgerova
Registered Auditor, Diploma No 0610
Katya Zlatareva
Vasil Velev
For the period ended 31 December 2025
BGN’000s
STARA PLANINA HOLD PLC
STATEMENT OF CHANGES IN EQUITY
Manager:
Kremena
Gantcheva
Dulgerova
Digitally signed by
Kremena Gantcheva
Dulgerova
Date: 2026.03.30
08:59:38 +03'00'
Vasil
Georgiev
Velev
Digitally signed by
Vasil Georgiev Velev
Date: 2026.03.30
09:02:41 +03'00'
KATYA
RAYKOVA
ZLATAREVA
Digitally signed by
KATYA RAYKOVA
ZLATAREVA
Date: 2026.03.30
13:02:37 +03'00'
to the separate financial statements
as of 31.12.2025
GENERAL INFORMATION
STARA PLANINA HOLD Plc (The company) was incorporated in Bulgaria on 27.09.1996 for an
unlimited period of time. The Holding is a successor of Central Privatization Fund AD. On 19.12.1997
Central Privatization Fund AD was renamed to Central Fund Hold Plc. Since 30.04.1999 the company
has been operating under its current name.
Stara Planina Hold Plc is registered in the Registry Agency under UICode 121227995.
The company is not registered under the VAT Act.
Stara Planina Hold Plc is a public company within the meaning of Art. 110 of the Public Offering
of Securities Act.
The registered seat and business address are in the city of Sofia, Iztok district, 26 A Latinka
street; telephone/fax: 02/9634159; 9630577; 9633754; e-mail office@sphold.com, website
www.sphold.com.
The scope of business activity of the holding is: acquisition, management, evaluation and sale
of shareholdings in Bulgarian and foreign companies; acquisition, management and sale of bonds,
evaluation and sale of patents, transfer of licenses for use of patents, belonging to companies where
the holding company has participations; financing companies where the holding company has
participations; other commercial operations, except those prohibited by law.
The registered capital of Stara Planina Hold Plc is BGN 21 000 000 (twenty-one million) leva
divided into 21 000 000 (twenty-one million) non-preferred registered voting shares with a nominal
value of BGN 1.00 each.
The management body of the company is the Board of Directors with the following members:
• Evgeniy Vasilev Uzunov – Chairman of the Board of Directors and representative of the company;
• Vasil Georgiev Velev – executive member of the Board of Directors and representative of the
company;
• Finance Invest OOD, having its registered seat and business address in the town of Plovdiv, 14,
Maria Luiza Blvd., UIC 115016144, represented for the purpose of performing its obligations as a
member of the Board of Directors by the legal representative Spas Borisov Videv;
• Due to his passing, as of December 31, 2025, Stefan Atanasov Nikolov no longer performs the
functions of a member of the Board of Directors.
Shareholders holding more than 5 % of the voting rights as of 31.12.2025:
• Potbul Invest Foundation - 4655400 shares, representing 22.17 % of the capital;
• Garant-5 Ltd - 2595972 shares, representing 12.36 % of the capital;
• ZUPF Allianz Bulgaria AD - 1285293 shares, representing 6.12 % of the capital.
The listed company staff includes 8.
2.
Statement of Compliance
The individual financial statements of Stara Planina Hold AD have been prepared in accordance
with IFRS accounting standards as adopted by the EU. The IFRS accounting framework as adopted by
the EU is essentially the designated national accounting basis International Accounting Standards (IAS)
as adopted by the EU, regulated by the Accounting Act and defined in item 8 of its Supplementary
Provisions.
Functional currency and presentation currency
These financial statements are presented in Bulgarian levs which is the functional currency of
the Company. All data for 2025 and 2024 are presented in thousands of BGN unless otherwise stated
at the respective place. The income per share is calculated and disclosed in BGN.
Upon initial recognition, foreign currency transactions are recorded in the functional currency
and the exchange rate at the time of the transaction or operation published by the BNB is applied to the
foreign currency amount. Cash, receivables and payables, such as monetary reporting items
denominated in foreign currency, are valued in Bulgarian levs using the final exchange rate of the BNB.
In preparing the financial statements, the management has made valuations, estimates and
assumptions that affect the application of accounting policies and the reported amounts of assets and
liabilities, income and expenses. The actual result may differ from these estimates.
Estimates and key assumptions are currently under review.
The Company presents comparative information in the financial statements for the previous
year, as the articles on the Statement of Financial Position and the Statement of Changes in Equity, as
well as the notes thereto, include comparative data as of the beginning of the earliest comparative
period.
Going concern statement
According to the assessment of the management of the holding as of the date of this report, the
military conflicts in Ukraine and the Middle East did not have a direct impact on the activities, insofar as
Stara Planina Hold Plc and the companies of the group do not have assets in the directly affected
regions, as well as relationships with persons/entities subject to the imposed sanctions. In the separate
financial statements of Stara Planina Hold Plc as of 31.12.2025, there are no assets and liabilities
whose valuation was influenced by the crises caused by the military conflicts. The Board of Directors
does not identify any significant risks that could lead to a material adjustment of the balance sheet
amounts of assets and liabilities within the next financial year or in the holding's business model and
plans.
The management believes that potential adverse developments do not represent a material
uncertainty for the application of the going concern principle. The management has reasonable
expectations that the Company has sufficient resources to continue the normal development of the
activity in the foreseeable future and does not intend to significantly limit or discontinue the activity. For
this reason, in preparing the financial statements, the Company continues to apply the going concern
principle.
ACCOUNTING POLICY
Assessment of the information materiality for the accounting policy
The assessment of the information materiality for the accounting policy is consistent with the
assessment of the materiality of any other information in the financial statements taking into account:
quantitative factors - the value of transactions, other events or conditions; and
qualitative factors - the nature of the transactions, other events or conditions.
Change in the accounting policy
Stara Planina Hold Plc has not changed its accounting policy during the reporting period due to the
absence of conditions that would lead to a significant change in the information in the financial
statements.
3.
No errors were identified, both for the current and for previous reporting periods, which
required the reflection of corrections.
The Company is preparing for the introduction of the new International Financial Reporting
Standards – IFRS 18 “Presentation and Disclosure in Financial Statements” and IFRS 19 “Non-Public
Subsidiaries: Disclosure”. The two standards will enter into force on January 1, 2027.
Selection of an accounting policy from one or more options permitted by IFRS
Stara Planina Hold Plc has chosen to evaluate the positions in its financial statement
according to the historical cost model with the exception of equity securities, reported according to the
fair value through other comprehensive income model.
The main emphasis in the disclosure of information about the accounting policy is the way
Stara Planina Hold Plc has applied the IFRS requirements according to its specifics, since information
specific to the enterprise is more useful for the financial statements users, unlike not so standardized
information or such which only repeats or summarizes the requirements of IFRS.
Financial assets
Investments in participations
Stara Planina Hold Plc's holdings in subsidiaries and associated enterprises are reported in
compliance with the requirements of IFRS 10: Consolidated Financial Statements; IFRS 12 Disclosure
of Equity Interests in Other Entities; IAS 27 Separate Financial Statements and IAS 28 Investments in
Associates and Joint Ventures.
Identification and evaluation of investments in subsidiaries
Subsidiary enterprises are all enterprises under the control of Stara Planina Hold Plc. The
control over the subsidiaries is conditioned by the fact that the company is exposed to and has rights to
the variable returns from its participation in the subsidiaries and is able to have impact on those returns
through its powers in the enterprises where investments were made. When recognizing investments in
subsidiary enterprises, all facts and circumstances are examined and assessed in order to determine
the existence of the conditions for control, including: - authority (powers) over the enterprises where the
investment was made; - exposure or rights to returns; and – the possibility of Stara Planina Hold Plc to
use the power over the enterprise it has invested in to influence the amount of return. Facts and
circumstances such as: - the purpose and objective of the enterprise where investments were made; -
what are the significant activities; - how decisions are made about these activities; - whether the rights
of Stara Planina Hold Plc give it a current opportunity to lead the significant activities; - whether Stara
Planina Hold Plc is represented or has the right to influence the returns from its participation in the
enterprise; and - whether Stara Planina Hold Plc has the ability to use its authority over the investee to
influence the amount of return, are continuously monitored and if there are any changes in facts or
circumstances, control is reassessed. As of the date of the financial statements, there have been no
changes in facts or circumstances that require a reassessment of the control over the subsidiaries.
Stara Planina Hold Plc has power over its subsidiaries due to the existing rights that give the current
opportunity to direct the significant activities that have an essential impact on the returns of these
enterprises. Stara Planina Hold Plc can control the activities that generate income. In the company's
separate financial statements, investments in subsidiaries are reported at acquisition cost. The
Company recognizes dividends from a subsidiary in the profit or loss in its separate financial statements
when its right to receive the dividend is established.
Identification and evaluation of investments in associates
The enterprises over which the Company exercises significant influence are associated.
Significant influence is the right to participate in decision-making related to the financial and operational
policy of the enterprise where Stara Planina Hold Plc has invested but is not control or joint control over
this policy. When assessing the significant influence, Stara Planina Hold Plc evaluates all facts and
circumstances, including the term of exercise of potential voting rights and all other contractual
commitments. Factors that are indicators of significant influence are taken into account during the
4.
evaluation: - representation in the board of directors or another equivalent governing body; -
participation in policy-related decision-making processes, including decisions on dividends and other
distributions; - significant transactions between the parties; - mutual exchange of management
personnel; - provision of essential technical information. Investments in associates are accounted for at
acquisition cost. The Company recognizes dividends from an associate in the profit or loss in its
separate financial statements when its right to receive the dividend is established.
Classification and valuation of investments in equity instruments (minority interests)
Stara Planina Hold Plc complies with the requirements of IFRS 9 Financial Instruments; IFRS 7
Financial instruments: disclosure when reporting investments in equity instruments (minority interests).
Stara Planina Hold Plc classifies these investments as accounted for at fair value through other
comprehensive income (FVOCI). When classifying in the category reported under the fair value through
other comprehensive income Stara Planina Hold Plc took into account the conditions: - the financial
assets are held within the framework of a business model, the purpose of which is achieved both by
reducing contractual cash flows and by selling financial assets; - the contractual terms of the financial
asset give rise to cash flows. Changes in the fair value of investments are recognized in other
comprehensive income (as an increase or decrease in reserves from subsequent valuation of financial
instruments).Income from dividends is recognized in the profit or loss for the period, only when: - the
right of Stara Planina Hold Plc to receive payment for dividends is established; - it is probable that the
economic benefits related to the dividends will be received by Stara Planina Hold Plc and - the amount
of the dividends can be reliably estimated.
Granted loans
Stara Planina Hold Plc recognizes a financial asset – a loan receivable when it becomes a party
to the contractual terms of the instrument. Initially, the financial asset is valued at the relevant
transaction price - transaction value. Loan income is accrued in the period when it arises.
Trade and other receivables
Trade and other receivables are initially recognized when they arise and are reported at the
relevant transaction price – their nominal value, reduced by the amount of impairment for uncollectible
amounts.
Cash
Cash includes cash on current accounts, bank deposits and cash on hand. They are reported at
their nominal value.
For the purposes of preparing the cash flows statements, cash receipts from customers and
cash payments to suppliers are presented gross, including VAT (20%).
The Company does not impair its cash on hand because they are held in a financial institution
with a high credit rating and have low credit risk.
Impairment of financial assets
Stara Planina Hold Plc has adopted the approach to recognize financial assets impairment
losses when an impairment event has occurred. The company recognizes an impairment loss for its
financial assets, reported to fair value through other comprehensive income, contract receivables and
credit commitments, and the expected credit loss model is used for the recognition. This is the part of
lifetime expected credit losses that represent expected credit losses that result from default events on
financial instruments that are possible within 12 months of the reporting date.
The Company's management has made significant judgments and estimates, developing
models covering historical information as well as forward-looking information in order to reliably
estimate expected credit losses. Stara Planina Hold Plc recognizes an adjustment for impairment
losses: - for financial instruments, in respect of which there is no significant increase in the credit risk
after the date of initial recognition, the recognized adjustment for losses must represent the expected
credit losses for 12 months; - for financial instruments in respect of which there is a significant increase
5.
in the credit risk after the date of initial recognition, an adjustment for expected credit losses is
recognized for the entire term. The Company's management makes valuations at each reporting date
whether the credit risk of the financial instrument has increased significantly since the initial recognition.
The valuation uses the change in default risk over the expected term of the financial instrument instead
of the change in the amount of expected credit losses. For the purposes of the valuation, the default
risk for the financial instrument at the reporting date is compared to the default risk for the financial
instrument as it was at the initial recognition and takes into account reasonable and hopeful information
that is available without undue cost and efforts and is indicative of the significant increase in the credit
risk since the initial recognition. Indicators that are relevant to the credit risk valuation include: - change
in internal interest rates or other valuations for instruments after the date of the initial recognition of the
instrument; - change in other conditions for the instrument, such as conditions or clauses, collateral,
etc.; - change in market interest rates and spreads for similar instruments; - internal and external credit
quality assessments; - change in the operations of the borrower, including financial results and
deviation from expectations and forecasts; - changes in economic conditions, including regulatory
changes that affect the borrower; - default on other instruments by the same borrower, etc.
At the end of the reporting period, the company's management has valuated the expected credit
losses and has assessed that the credit risk has not increased significantly since the initial recognition
as a result of which valuation no impairment has been recorded.
Derivative financial instruments
The company has not used derivative financial instruments to hedge risks of changes in
exchange rates, interest rates, or cash flows.
Fixed assets
The perceived value threshold of materiality, below which tangible assets, regardless of the fact
that they are long-lasting, are reported as a current expense upon their acquisition, is BGN 700.
Property, plant and equipment are immaterial to the Company's financial statements.
The Company has no intangible assets and goodwill.
In previous accounting periods, the Company has disclosed information about the accounting
policy related to the impairment of non-current assets, which repeats the requirements of IAS 36
Impairment of Assets and does not provide information specific to the Company.
The balance sheet amount of property, plant and equipment is reviewed at each reporting date to
determine whether there is any indication of impairment. If such an indication for impairment exists, the
estimated recoverable amount of the asset is determined. The recoverable amount is determined at
least once a year.
An impairment loss is recognized in the statement of profit or loss when the carrying amount of
the asset or cash-generating unit exceeds the recoverable amount.
The recoverable amount of the assets is the higher of their fair value less costs of disposal and their
value in use. When defining value in use, estimated future cash flows are discounted to their present
value using a pre-tax discount rate that reflects current market assessments of the time value of money
and the specific risks associated with the asset. In respect of an asset that does not generate
substantially independent cash flows, the recoverable amount is defined for the cash-generating unit to
which the asset belongs.
Once the Company's management has identified the assets subject to impairment testing as
material to the financial statements, the Company evaluates whether the accounting policy information
regarding the impairment is in fact material.
As part of its assessment, the Company considers that no impairment loss or impairment loss
recovery (in respect of property, plant and equipment) has occurred during the current or comparable
reporting periods. Therefore, information about the accounting policy regarding how the Company
recognizes and allocates impairment losses is unlikely to be material to primary users.
Similarly, because the Company has no intangible assets and goodwill, information about its accounting
policy regarding impairments of intangible assets and goodwill is unlikely to provide its primary users
with material information.
6.
Tangible fixed assets are recognized at acquisition cost less accumulated depreciation.
The amortized cost of tangible fixed assets is equal to their book value. Tangible fixed assets are
depreciated on a straight-line basis according to their expected useful life (service life). Service life is
defined according to the period during which it is assumed that the depreciable assets will be used by
the company taking into account their probable physical wear and obsolescence. The terms are defined
as follows:
• Buildings – 25 years
• Plant and equipment – 3.33 years
• Motor vehicles – 4 years
• Computers – 2 years
• Other fixed assets – 6.66 years
Inventory
The company does not have inventories.
Liabilities
Liabilities for dividends are recognized following a respective resolution by the General meeting of
shareholders.
Retirement benefits and other liabilities
The employer provides compulsory insurance of the employed personnel for retirement,
healthcare and unemployment.
Social security and retirement plans offered by the company in its capacity of an employer are
based on the Bulgarian legislation and constitute predetermined fixed instalments.
Short term employee benefits (due within 12 months following the end of the period when earned) are
recognized as expenses in the income statement during the period wherein the work was performed
and as a current liability (less all amounts paid out and any due deductions) without discounting. As of
the date of the annual financial statements the company makes valuation of the expected costs of the
accumulated compensated leave, which is expected to be paid as a result of the unused right. The
valuation includes undiscounted expenditures for the compensation itself and the respective obligatory
public social security insurance payable by the employer.
Provisions
Provisions are recognized when the company has current legal or constructive obligation
resulting from a past event the settlement of which requires the allocation of economically-beneficial
resources when it is possible to measure reliably the sum necessary to settle the obligation. When a
discount is used, the amount of the provision reported will be increased in each period in order to reflect
the expired time. Such an increase will be recognized as a financial expenditure.
Contingent liability is disclosed in the statements unless the probable necessity for outgoing cash flow
resources, including economic benefits to cover the liability, is deferred.
Temporary tax differences
Temporary tax differences are accrued using the balance sheet method for all temporary
differences arising between the tax base of the assets and liabilities and their book value, formed for
accounting purposes. When calculating temporary tax differences, tax rates are used, which refer to the
periods of reverse occurrence of the temporary tax differences.
The main temporary differences result from impairment of receivables, revaluations under fair
value and accrued provision expenses.
Recoverable temporary tax differences arising from the transfer of unused tax losses from
previous periods will be recognized only to the extent that it is probable to have sufficient future taxable
profit, within the legal terms, against which the losses can be utilized.
7.
Recognition of income and expenses
The Company's management establishes a comprehensive framework for determining whether,
how much and when to recognize revenue. Revenue is recognized when the customer obtains control
of the goods or services.
Interest income is recognized on a current basis in proportion to the time base that takes into
account the effective income from the asset.
Operating expenses are accrued at the time of their occurrence, regardless of the cash receipts
and payments. Reporting and recognition of expenses is performed in compliance with the requirement
for a causal link between income and expenses.
Related parties
For the purpose of preparing these financial statements, members of the Board of Directors
have presented in the annual report the legal entities related to them and controlled by them. Related
parties to the Board members are also close members of their families, within the meaning of the
international accounting standards. Related parties to the company are the subsidiaries and associates.
Changes in the related parties to Stara Planina Hold Plc are being followed for the entire
reporting period and for the previous reporting period, as far as this information concerns reporting of
transactions and events in the financial statements.
The Board of Directors of Stara Planina Hold Plc has adopted procedures to avoid and disclose
conflicts of interest. They impose obligations for the members to avoid and not to admit actual or
potential conflicts of interest and, if necessary, to immediately disclose conflicts of interest and provide
shareholders with access to information on transactions between them and the company or any related
party.
During the reporting period members of the Board of directors and parties related to them have
not entered into agreements with the company under terms beyond the regular business operations or
deviating significantly from the market conditions.
There are no transactions beyond the regular business operations of the issuer or deviating significantly
from the market conditions.
Transactions between Stara Planina Hold Plc and related parties during the reporting period
include mostly the loans provided to subsidiaries and associates.
Loan agreement dated 25.04.2019 granting Fazan Jsc the amount of BGN 407 000 with
maturity until 25.12.2027 at 2.5 % annual interest rate.
Loan agreement dated 09.01.2020 granting Fazan Jsc the amount of BGN 550 000 with
maturity until 08.01.2026 at 2.5 % annual interest rate.
Loan agreement dated 01.07.2024 granting Fazan Jsc the amount of BGN 100 000 with
maturity until 01.07.2027 at 4 % annual interest rate.
Loan agreement dated 15.11.2022 with Elhim-Iskra Plc - in the amount of BGN 1 200 000 for a
period until 30.11.2027 at an annual interest rate 2.5%. Repaid at the end of the reporting period.
Loan agreement dated 28.10.2024 with Elhim-Iskra Plc - in the amount of BGN 2 600 000 for a
period until 28.10.2029 at an annual interest rate 2.5%, unpaid principal as of 31.12.2025 in the amount
of BGN 1 525 thousand.
Loan agreement dated 01.07.2024 with HES Plc - in the amount of BGN 3 300 000 for a period
until 30.06.2026 at an annual interest rate 4%. Repaid at the end of the reporting period.
Loan agreement dated 01.07.2025 with HES Plc - in the amount of BGN 3 500 000 for a period
until 01.07.2026 at an annual interest rate 3,7%., unpaid principal as of 31.12.2025 in the amount of
BGN 3 300 thousand.
Loan agreement dated 01.11.2023 with SPH Invest Jsc in the amount of BGN 2 000 000 (two
million) for a period until 01.11.2027 at an annual interest of 3.5 %, unpaid principal as of 31.12.2025 in
the amount of BGN 1 600 thousand.
Events after the balance sheet date
Events, both favorable or unfavorable, that occur between the end of the reporting period and
the date that the financial statements are approved for issuance, may be: (a) adjusting events – events
that provide further evidence on conditions that existed on the date of the annual financial statements,
8.
and (b) non-adjusting events – events that are indicative of conditions after the date of the annual
financial statements.
The Company adjusts recognized amounts or recognizes amounts which have not been
recognized, in case of reported adjusting events.
The Company does not adjust recognized amounts or does not recognize amounts which have
not been recognized in case of reported non-adjusting events. They are only disclosed in the Notes to
the annual financial statements.
According to the Law on the Introduction of the Euro in the Republic of Bulgaria, published in
the State Gazette, issue 70 of 20.08.2024, amended and supplemented, issue 25 of 25.03.2025, in
force from 1 January 2025, amended, issue 49 of 17.06.2025, amended and supplemented, issue 63 of
1.08.2025, in force from 1.08.2025, issue 65 of 8.08.2025 (the Law) and Decision (EU) 2025/1407 of
the Council of 8 July 2025, in force from 10.07.2025, on the adoption of the euro by the Republic of
Bulgaria, as of 1 January 2026, the currency conversion of the items in the company's financial
statements for the year ending 31 December 2026 will be carried out at the fixed rate of 1 euro =
1.95583 leva, with the balances on the accounting accounts in leva as of 1 January 2026 being
recalculated in accordance with the currency conversion rules pursuant to the provisions of Section II of
the Law.
The introduction of the euro as the official currency in the Republic of Bulgaria represents a
change in the functional (reporting) currency of the company, which will be reflected prospectively and
does not represent an event after the reporting period that requires an adjustment to the financial
statements for the year ending December 31, 2025. The company does not expect significant effects
from the translation of the opening balances as of January 1, 2026 into euros and from the process of
changing the functional (reporting) currency.
No events occurred after the reporting date until the date on which the financial statement was
prepared, which would require additional corrections and/or disclosures in the financial statement of
Stara Planina Hold Plc.
Financial risk management
The Management monitors the overall risk and finds ways to neutralize potential negative
effects on the company’s financial indicators.
Currency risk. Stara Planina Hold Plc does not hold any foreign currency instruments and
therefore the company is not exposed to significant currency risks.
Interest risk. The company is not exposed to significant market interest risks since it does not
hold significant interest-bearing assets or liabilities based on floating interest rates.
Other price risk. The Company is exposed to risk of changes in the price of equity stock
classified as FVOCI held for long-term investments.
The company is not exposed to other price risks related to financial assets associated with
inventory prices.
Credit risk. Stara Planina Hold Plc has granted loans to companies in its portfolio which have
longstanding credit reputation which minimizes the credit risk. Risk management is defined by the
management of the company.
Liquidity risk. The company is not exposed to liquidity risks. Liquidity risk management is
monitored by the management of the company.
All risk factors for the operations of the company are described in detail in the Activity Report.
Approximate accounting estimates
The accounting policy has been developed in accordance with the hierarchy of IAS 8
Accounting Policy, Changes in Accounting Estimates and Errors.
Accounting estimates are the monetary amounts in the financial statements, the estimation
of which has an element of uncertainty.
Stara Planina Hold Plc prepares accounting estimates when the accounting policy requires
the items in the financial statements to be valued in a way that includes uncertainty in the
9.
valuation, i.e. be valued at monetary amounts that cannot be directly observed but must instead be
estimated.
The company prepares accounting estimates to achieve the objective stated in the
accounting policy. Preparing accounting estimates involves the use of judgments or assumptions
based on the most current, reliable information available.
Accounting estimates have been applied to assess: - the fair value of financial assets and; -
the costs of depreciation of an asset of property, machinery and equipment.
Preparation of an accounting estimate includes the selection and simultaneous use of: -
valuation methods; - input data for evaluation. Valuation methods include: - estimation methods
(used to estimate the loss allowance for expected credit losses under IFRS 9 Financial
Instruments.
Estimates are subject to revision in case of changes in the circumstances they are based on
or resulting from further experience or subsequent developments. The effects of changes in the
accounting estimates are taken into account when defining the profit or loss, as follows:
a) For the period of the change - if the change affects only that period;
b) For the period of the change and future periods - if the change affects these periods as
well.
The effects of changes in accounting estimates are included in the same line item in the
statement of comprehensive income that was previously used for the estimate.
The error related to prior periods is reported during the current period by increasing or
decreasing the retained profit balance from previous years. The comparative information from the
previous reporting period is recalculated. When the decrease in retained earnings is greater than
the balance of retained earnings before the decrease, the difference is reported as an uncovered
loss from previous years.
Changes in the accounting policy are to be made only when required by law, accounting
standards, or if the change will lead to a more adequate representation of the events or
transactions reported in the financial statements.
Changes in the accounting policy are to be applied retrospectively. Any adjustment due to
the change is recorded as an adjustment to the balance of the retained earnings from previous
years. The comparative information is recalculated. The difference resulting from the recalculation
of tax expenses in the income statement for the previous period are reported as an adjustment to
the retained earnings (uncovered loss). The change in the accounting policy is applied retroactively
when the adjustment to the balance of retained earnings from previous years cannot be reliably
determined. A change in the accounting policy occurs when a new or amended accounting
standard is adopted, and is accounted for in accordance with the requirements specified in the new
or amended accounting standard, if any. When the respective accounting standard does not
stipulate specific requirements for reporting changes in the accounting policy, they are to be
reported in accordance with IAS 8.
10.
NOTES UNDER THE STATEMENT OF FINANCIAL POSITION
(In all applications amounts are shown in thousands BGN unless otherwise stated)
Note 1
Property, plant and equipment
Reporting period to
31.12.2025
Machinery and
equipment
Fixtures
Others
Total
Acquired
17
25
9
51
Depreciation
14
23
0
37
Closing balance
3
2
9
14
Note 2
Investments in subsidiaries, associates and other investments
Name and domicile of the companies
Amount
Fair
value
Percent
age of
the
capital
Investment
in
securities
listed on a
stock
exchange
Investment in
securities not
accepted for
trading on a
stock
exchange
I. Investments in Subsidiaries
Hydraulic elements and systems Plc,
Yambol
2 331
59 886
64,53
2 331
0
Elhim - Iskra Plc, Pazardzhik
8 323
9 039
51,40
8 323
0
Fazan Jsc, Ruse
2 413
2 413
92,65
0
2413
SPH Invest Jsc, Sofia
3 542
3 542
99,41
0
3 542
SPH Trans Ltd, Sofia
33
33
65,00
0
33
Total I
16 642
74 910
10 654
5 988
II. Investments in Associates
M+C Hydraulic Plc, Kazanluk
5 409
123 141
30,61
5 409
0
Bulgarian Rose Plc
1 903
3 480
49,99
1 903
0
Total II
7 312
126 621
7 312
0
III. Investments in Other Companies
Asset Insurance Jsc, Sofia
4 893
4 893
20,00
0
4 893
Leasing Company Jsc, Sofia
664
664
5,00
0
664
Ptici & Ptichi produkti Jsc, Pleven
0
0
24,20
0
0
Medical Center "Center for Prevention
of the health" Ltd, Sofia
2
2
20,00
0
2
Total III
5 559
5 559
0
5 559
TOTAL (I+II+III)
29 513
207 090
17 966
11 547
On August 27, 2025, Stara Planina Hold Plc sold its equity interest of 107 368 shares, with a
nominal value of BGN 2 each, representing 50.00 % of the share capital of Boryana AD, Cherven
Bryag, UIC 114006352, for the price of BGN 650 000 (six hundred and fifty thousand). As of the date of
the transaction, Boryana AD, Cherven Bryag, had repaid all liabilities under loan agreements to Stara
Planina Hold AD. The investment in Boryana AD, Cherven Bryag, was made by Stara Planina Hold Plc
11.
in 2012, with the 50.00 % equity interest in the company's capital valued at BGN 429 472 at the time of
acquisition
Data for the current period related to subsidiaries and associates such as company name,
registered seat, amount of the investment, fair value of stock exchange traded shares, as per the
bulletin of the Bulgarian Stock Exchange - Sofia as at 31.12.2025 and the % of the shareholdings are
presented in the table. For the fair value of investments in subsidiaries and associates not admitted to
trading on the BSE is used their historical price.
Investments in equity instruments (minority shares), pursuant to IFRS 9 are classified as
reported at fair value through the statement of other comprehensive income (FVOCI). For the
investments in ZAD Asset Insurance AD and Leasing Company Jsc, fair value market valuation was
made as of 31.12.2025 using the net asset value method.
Note 3
Other non-current financial assets
31.12.2025
31.12.2024
Additional cash contribution in accordance
with art. 246, para 2, item 4 of Commercial Act
609
609
In 2016 an additional monetary contribution was made in accordance with art. 246, para 2, item
4 of Commercial Act in the amount of BGN 609 thousand in the Reserve fund of Asset Insurance AD - a
minority interest company in the portfolio of Stara Planina Hold Plc portfolio.
An agreement for undertaking a subordinated contingent liability has been concluded between
Stara Planina Hold Plc and ZAD Asset Insurance AD. Pursuant to this agreement, Stara Planina Hold
Plc shall provide ZAD Asset Insurance AD upon request and upon occurrence of an activating event the
amount up to BGN 294 thousand.
Note 4
Non-current receivables from related
parties
31.12.2025
31.12.2024
Loans
4 182
5 414
Note 5
Other non-current receivables
31.12.2025
31.12.2024
Loans
8 750
9 250
Receivables from the sale of companies
71
71
Closing balance
8 821
9 321
Note 6
Deferred tax assets
31.12.2025
31.12.2024
Temporary tax differences since the
application of IFRS 9
137
38
Note 7
Current receivables from related parties
31.12.2025
31.12.2024
Loans
3 300
3 300
Interest on loans
61
68
Receivables from dividends
1 000
1000
Closing balance
4 361
4 368
Note 8
Other current receivables
31.12.2025
31.12.2024
Prepayments
11
11
Closing balance
11
11
12.
Note 9
Cash and cash equivalents
31.12.2025
31.12.2024
Cash
3
5
Cash in current accounts
4 977
3 831
Blocked cash deposits
1 773
150
Blocked cash for dividend payment
1 623
Closing balance
6 753
5 609
Note 10
Equity
31.12.2025
31.12.2024
Share capital
21 000
21 000
Bought own shares
-225
-225
Reserves
9 448
9 448
Discounts of repurchased shares
-539
-539
Reserves from changes in the fair value of
investments in equity instruments
2 841
3 721
Retained earnings
8 050
8 057
Net result for the period
5 237
6 537
Closing balance
45 812
47 999
Note 11
Non-current liabilities to related parties
31.12.2025
31.12.2024
Obligations for additional remuneration of the
members of the Board of Directors.
239
284
Closing balance
239
284
Note 12
Deferred revenue
31.12.2025
31.12.2024
Deferred income from the sale of a
subsidiary
50
50
Note 13
Deferred tax liabilities
31.12.2025
31.12.2024
Temporary tax differences since the
application of IFRS 9
452
451
Note 14
Dividends payables
31.12.2025
31.12.2024
Dividends payables
7 547
7 199
Note 15
Other current liabilities
31.12.2025
31.12.2024
Obligations bonuses Obligations for additional
remuneration of the members of the Board of
Directors.
255
269
Contributions
14
11
Income tax on individuals
16
17
Tax on expenditure
3
2
Оther liabilities
53
40
Closing balance
341
339
13.
NOTES ON THE PROFIT OR LOSS ACCOUNT AND OTHER COMPREHENSIVE INCOME
(In all applications amounts are shown in thousands BGN unless otherwise stated)
Note 16
Dividend income
31.12.2025
31.12.2024
Dividend income
5 782
7 466
Note 17
Other financial income
31.12.2025
31.12.2024
Interest income from loans
507
463
Positive differences from operations with financial
instruments
220
21
Closing balance
727
484
Note 18
Other income
31.12.2025
31.12.2024
Derecognition of dividends with expired limitation
period
1 221
1 205
Note 19
Cost of materials
31.12.2025
31.12.2024
Cost of office supplies
4
4
Expenses for office furniture
12
2
Maintenance costs for office equipment
10
7
Costs for sanitation
7
7
Closing balance
33
20
Note 20
Cost of hired services
31.12.2025
31.12.2024
Legal expenses
78
77
Auditing services
6
6
Advertising costs
21
33
Subscription costs
4
5
Postage
1
1
Maintenance of programs and computers
16
12
Fees for state institutions
12
11
Civil contracts
40
43
Consultancy services
23
19
Rentals
27
Other
9
11
Closing balance
237
218
Note 21
Employee expenses
31.12.2025
31.12.2024
Management salaries
921
962
Additional remuneration to the members of the
Board of Directors, according to a resolution of the
General Meeting of Shareholders
523
744
Staff salaries
560
450
Social security costs
85
70
Closing balance
2 089
2226
14.
Note 22
Other expenses
31.12.2025
31.12.2024
Expenses for representative purposes
23
14
Seminars
1
13
Membership fee
31
43
Donations
16
15
Medical service
31
30
Life insurance
23
21
Business trips
4
Other
4
3
Closing balance
129
143
The financial statements are prepared for the year ended on 31.12.2025 and approved by the
Board of Directors of Stara Planina Hold Plc on 27.03.2026
Pursuant to Article 30, paragraph 1 of the Accountancy Act, the Company announces that the fee
for the statutory audit for 2025 is BGN 6 thousand. For the period to which the statutory audit relates,
apart from the audit, the Company did not receive any other services from the registered auditor.
The financial statements of Stara Planina Hold Plc for the year ended on 31 December 2025
have been certified by the registered auditor Katya Zlatareva, diploma № 0610.
Chief Accountant: Kremena Dulgerova Executive Director: Vasil Velev
Kremena
Gantcheva
Dulgerova
Digitally signed by
Kremena
Gantcheva
Dulgerova
Date: 2026.03.30
09:00:10 +03'00'
Vasil
Georgiev
Velev
Digitally signed
by Vasil
Georgiev Velev
Date: 2026.03.30
09:03:04 +03'00'
CONTENTS
Introduction ................................................................................................................................................. 2
I. Activity overview ...................................................................................................................................... 2
1. Indicators characterizing the main activity results ................................................................................. 2
2. Investment Portfolio Standing ....................................................................................................................... 3
3. Operational results ......................................................................................................................................... 3
4. Risk factors for the activity ............................................................................................................................ 4
II. Analysis of major financial and nonfinancial indicators ....................................................................... 17
2. Non-financial information ............................................................................................................................. 18
2.1. Social and employee-related issues ....................................................................................................... 19
2.2. Human rights related issues .................................................................................................................... 21
2.3. Issues related to the fight against corruption and bribery ................................................................... 21
2.4. Environment ............................................................................................................................................... 22
2.5. Information on main intangible resources .............................................................................................. 23
III. Important Events Occurred Since the Beginning of the Year ............................................................. 23
ІV. Expected development of the company and planned business policy .............................................. 24
V. Research and Development Activity .................................................................................................... 27
1. Own shares. Buy-back ........................................................................................................................... 27
2. Changes in the company share prices ................................................................................................. 28
VIІ. Branches ............................................................................................................................................ 30
VІІI. Financial instruments used by the company .................................................................................... 30
1. Accounting policy .......................................................................................................................................... 30
3. Financial instruments .............................................................................................................................. 30
4. Liquidity .......................................................................................................................................................... 31
5. Risk Exposition of the Company ................................................................................................................ 31
ІX. Corporate Governance Declaration .................................................................................................... 31
1. National Corporate Governance Code ...................................................................................................... 31
2. Implementation of the Code ........................................................................................................................ 32
3. Assessment of the Implementation of the Code ................................................................................. 38
4. Description of the Internal Control and Risk Management System ...................................................... 38
5. Information under Art. 10 of Directive 2004/25/EC .................................................................................. 39
6. Diversity policy .............................................................................................................................................. 40
7. Information about the members of the Board of Directors ..................................................................... 40
Х. Additional information under Appendix 2 of Ordinance No 2 of the FSC ............................................ 42
XІ. Information under Appendix 3 of Ordinance No 2 of the FSC ........................................................... 47
Media .................................................................................................................................................................. 48
This document contains information on the possibilities for realization of published forecasts as well as future periods
forecasts as well as data representing inside information under Art. 7 Regulation (EU) No 596/2014 on market abuse
(Market Abuse Regulation). This information could significantly affect the price of the shares issued by the company.
2.
Introduction
The annual activity report of Stara Planina Hold Plc presents comments and analysis of the financial
statements and other relevant information regarding the financial standing and operational results of the
company. The Report contains an objective review which presents truly and fairly the development and
operational results of Stara Planina Hold Plc as well as its condition together with a description of the
main risks the company faces. It includes the information pursuant to art. 39 of the Accountancy Act, Art.
100n, para. 7 of the Public Offering of Securities Act (POSA) as well as art. 10 of Ordinance № 2 of the
Financial Supervision Commission.
STARA PLANINA HOLD PLC is a public company within the meaning of Art. 110 of the Public
Offering of Securities Act. The company is the successor of Central Privatization Fund AD, incorporated
on 27 September 1996.The holding company has shareholdings in the capital of industrial enterprises
operating in various fields of production. It actively participates in the development of the Bulgarian
industry by achieving European and world quality level and profitability.
I. Activity overview
1. Indicators characterizing the main activity results
Indicator (BGN’000)
Y2023
Y2024
Y2025
Income from main business activity
10 976
9 155
7 730
Profit from main business activity
9 295
6 537
5 237
Net profit from operations
9 295
6 537
5 237
Net profit per share (BGN)
0.443
0.311
0.249
Total assets
55 084
56 322
54 441
Net assets
47 160
47 999
45 812
Shareholders’ capital
20 775
20 775
20 775
Dividend per share (BGN)
0.31579
Investment portfolio structure
The economic group of Stara Planina Hold Plc consists of the parent company and its subsidiaries
and associates. The investment portfolio of the holding company is distributed mainly in the following
industries:
66,3
11,0
4,4
18,3
Machine Building
Electrical Engineering
Light Industry
Financial
3.
2. Investment Portfolio Standing
Major investments in the portfolio of Stara Planina Hold Plc as of 31.12.2025:
Investments in subsidiaries
Hydraulic Elements and Systems Plc
64.53 %
Elhim Iskra Plc
51.40 %
Fazan Jsc
92.65 %
SPH Invest Jsc
99.41 %
Investments in associates
M+C Hydraulic Plc
30.61 %
Bulgarian Rose Plc
49.99 %
Investments in other companies
Asset Insurance AD
20.00 %
Leasing Company Jsc
5.00 %
On August 27, 2025, Stara Planina Hold Plc sold its equity interest of 107 368 shares, with a
nominal value of BGN 2 each, representing 50.00 % of the share capital of Boryana AD, Cherven Bryag,
UIC 114006352, for the price of BGN 650 000 (six hundred and fifty thousand). As of the date of the
transaction, Boryana AD, Cherven Bryag, had repaid all liabilities under loan agreements to Stara Planina
Hold AD. The investment in Boryana AD, Cherven Bryag, was made by Stara Planina Hold Plc in 2012,
with the 50.00 % equity interest in the company's capital valued at BGN 429 472 at the time of acquisition.
3. Operational results
As a holding company, Stara Planina Hold Plc does not perform independent commercial
operations. The company has focused its activities primarily on the management of its subsidiaries and
associates.
The structure of income within the last three years is summarized in the table below:
INCOME (BGN’000)
Y 2023
Y 2024
Y 2025
Financial Income
9 843
7 950
6 509
Income from Interests
402
463
507
Income from Dividends
9 200
7 466
5 782
Other
1 133
1 205
1 221
Total Income
10 976
9 155
7 730
Net unconsolidated profit
(BGN’000)
5758
6427
5075
7800
8088
9295
6537
5237
2018 2019 2020 2021 2022 2023 2024 2025
4.
The net profit of Stara Planina Hold AD as of 31.12.2025 exceeded BGN 5.2 million which is a
19.86% decrease compared to the reported net profit in the amount of BGN 6.5 million for the previous
year and a decrease by 43.64 % compared to the 2023 net profit.
As of the date of this report, the sales of the companies in the group for the entire year 2025 reached
BGN 276.40 million (EUR 141.32 million) whereby consolidated sales revenues as of 31 December 2025
recorded an increase of 3.83% compared to consolidated revenues in 2024 and a decrease of 27.06%
compared to the reported consolidated revenues in 2023.
The Group's consolidated sales revenue for the first half of 2025 reached BGN 141 738 thousand,
representing a decrease of 0.59 % compared to the sales for the same period in 2024 and a 33.02 %
decrease compared to the reported consolidated sales for the first half of 2023. The total consolidated
net profit of the Group for the first half of 2025 amounted to BGN 7.13 million, reflecting an increase of
1.63 % compared to the reported consolidated net profit for the same period of the previous year and a
decrease of 73.26 % compared to the profit for the first half of 2023.
During the second half of 2025, we reported consolidated revenues amounting to BGN 134.66
million (EUR 68.85 million), representing an increase of 8.93% compared to the same period of the
previous year and a decrease of 19.53% compared to the second half of 2023.
Annual sales of all companies in the Group
(Million BGN)
* forecast
4. Risk factors for the activity
A significant effect on the financial standing of Stara Planina Hold Plc has the direct dependence
on the financial condition of the subsidiaries and associates as far as their operations are primarily export-
oriented - mainly to the countries of the European Union.
Major risks and uncertainties for Stara Planina Hold Plc are related to the possibility for the actual
income from a given investment not to correspond to the expected one which is conditioned by the
successful activities of the companies in the Group. In this sense, the main risks for Stara Planina Hold
Plc and the companies in the Group for 2026 are:
Overall macroeconomic risk: Macroeconomic conditions and trends for the development of the
market and the macro environment where the companies operate represent a systematic risk that cannot
be managed and controlled by the corporate board of the holding and those of the companies in the
Group but has a significant impact on the activities and results of the enterprises. By the end of 2025, the
224,4
200,0
278,4
375,3
379,0
266,2
276,4
2019 2020 2021 2022 2023 2024 2025*
5.
global economy is in a state of moderate but unstable growth, characterized by a high degree of
uncertainty and structural changes in global economic and trade relations. International financial
institutions such as the IMF, the World Bank, the OECD, and the UN confirm that the world economy is
entering a new stage where growth remains limited, and geopolitical and fiscal risks continue to exert a
significant influence on the business climate and international markets.
Macroeconomic indicators such as inflation, uncertainty about the price and security of energy
supplies, weak demand, geopolitical tensions and economic challenges related to escalating trade
tensions continue having a significant impact on business processes and prospects for economic
development in a global perspective.
According to the ECB Economic Bulletin from December 2025, experts expect average annual real
GDP growth in the Eurozone to be 1.4% in 2025, 1.2% in 2026, 1.4% in 2027, and 1.4% in 2028.
Compared to the September 2025 projections, GDP growth has been revised upwards for the entire
forecast horizon, reflecting better-than-expected data, reduced trade policy uncertainty, stronger external
demand, and lower energy commodity prices. Domestic demand is expected to remain the main driver
of growth in the Eurozone, stimulated by rising real wages and employment, amid stable labor markets
with record-low unemployment rates. The additional government spending on infrastructure and defense
announced in 2025, specifically in Germany, along with more favorable financing conditions due to the
reduction of key interest rates since June 2024, are also expected to support the domestic economy.
Regarding the external environment, although competitiveness challenges persist, including those of a
structural nature, exports are expected to accelerate in 2026.
The ECB Governing Council emphasizes the need for urgent measures to strengthen the Eurozone
and its economy within the current geopolitical context. It supports the European Commission's call for
governments to prioritize sustainable public finances, strategic investments, and growth-enhancing
structural reforms. It is of crucial importance to leverage the full potential of the Single Market.
Against this background, according to National Statistical Institute (NSI) data for 2025, Bulgaria's
trade turnover with its main trading partners from the EU and third countries has contracted for another
consecutive year. In 2025, Bulgaria's total exports amounted to BGN 83 894.5 million, representing a
3.2% decrease compared to 2024, when a decline of 0.2 % was reported, following a 6.5 % drop in 2023.
One of the reasons for this decline is the impact of the war in Ukraine on the markets. Concerningly, in
2025, the contraction was more pronounced in exports to EU countries, which are leading markets for
Bulgaria. At the same time, total imports into the country in 2025 reached BGN 105 605.1 million (at CIF
prices), or 6.1 % more than in 2024. The total foreign trade balance (FOB exports - CIF imports) for 2025
was negative, amounting to BGN 21 710.6 million. In December 2025, the total foreign trade balance
(FOB exports - CIF imports) was also negative, standing at BGN 2 909.1 million.
Also, according to National Statistical Institute data, in December 2025, the total business climate
indicator decreased by 3.1 points compared to the previous month (from 16.1 % to 13.0 %), with a decline
registered across all observed sectors – industry, construction, retail trade, and services. The composite
indicator 'business climate in industry' fell by 2.1 points (from 14.6 % to 12.5 %) as a result of the
unfavorable assessments and expectations of industrial entrepreneurs regarding the business condition
of their enterprises. Production activity is assessed as diminished, while activity expectations for the next
three months are more favorable. The uncertain economic environment, labor shortages, and insufficient
demand from abroad and domestically continue to be the main obstacles to business development.
Furthermore, according to Eurostat data, in December 2025, seasonally adjusted industrial
production decreased by 1.4 % in the Eurozone and by 0.8 % in the EU on a monthly basis. On an annual
basis, in December 2025, compared to the same month in 2024, industrial production in the EU increased
by 1.4 %, while in the Eurozone it rose by 1.2 %. The average annual industrial production for 2025,
compared to 2024, increased by 1.5 % in both the Eurozone and the EU.
On an annual basis, however, according to NSI data, industrial production in Bulgaria recorded a
6.7 % decline in December 2025, following a 9.0 % decrease in November; by this indicator, our country
6.
reported the third-largest annual drop in the EU, after Slovakia and Luxembourg. This represents a
contraction of production in our country for the thirteenth consecutive month.
Change in the Industrial Production Index compared to the same month
of the previous year (calendar adjusted)
Source: NSI
According to NSI data, in December 2025, the total Producer Price Index (PPI), which measures
the average change in the prices of industrial products manufactured and sold by Bulgarian enterprises,
recorded an increase of 1.4 % compared to the previous month and 9.6 % compared to the level in
December 2024. In the sectors where the main companies of the Stara Planina Hold AD group operate,
as of December 2025 compared to December 2024, an increase of 7.3 % was reported in the
manufacture of fabricated metal products, while a decrease of 1.1 % was noted in the manufacture of
machinery.
According to data of the European Commission, in December 2025, the Economic Sentiment
Indicator (ESI) decreased both in the EU (-0.1 points to 96.8) and in the Eurozone (-0.4 points to 96.7),
after reaching a 31-month high of 97.1 points for the Eurozone in November. The result remains slightly
below market expectations (97.0) and below the long-term average of 100 points. The decline in the ESI
is due to lower confidence in the services and retail trade sectors, as well as among consumers. Among
the largest economies in the Eurozone, confidence fell in Germany (-1.1), France (-0.9), Italy (-0.6), and
Spain (-0.5), while the Netherlands was the only major economy to record an improvement (+0.5).
According to data from EUROFER (the European Steel Association), although the EU's mechanical
engineering industry demonstrated resilience throughout 2023 and 2024, sector growth remains exposed
to persistent downside risks. These include the prolonged impact of the war in Ukraine, escalating global
geopolitical tensions, and the ongoing deterioration of the industrial outlook observed to date. Despite
these challenges, mechanical engineering output recorded a growth of +1.6% in 2023, followed by a
pronounced contraction of -5.2% in 2024. EUROFER anticipates another recession in 2025, albeit a more
moderate one (-1%, revised upward from -1.7%), with a modest recovery projected only in 2026 (+1%,
revised from +1.4%).
According to the EUROFER Economic and Steel Market Outlook – Q4 2025 (data was published
prior to the escalation of the military conflict between the US/Israel and Iran), EU industrial production
exhibited signs of weakness throughout 2024 and into the latest monthly data for 2025. This trend
persisted across most individual European economies nearly until the end of 2025. The latest available
monthly figures indicate that industrial production in Spain and France has returned to pre-pandemic
levels, whereas Germany and Italy have yet to reach this benchmark. Industrial output is expected to
7.
remain impacted by a combination of factors, including uncertainty arising from escalating trade tensions
related to US tariff policy, ongoing conflicts and geopolitical risks, inflation, interest rates, and energy
prices, which remain volatile. Following a further decline in 2024 (-2.2 %), EUROFER projects near-flat
growth for 2025 (+0.3 %, revised upward from +0.1 %), before achieving modest growth in 2026 (+1.4%).
EUROFER Forecast for the Mechanical Engineering and Mechanical Components Sectors
(EU-28, Year-on-Year)
In its latest World Economic Outlook update from January 2026, the IMF forecasts global economic
growth to remain resilient at 3.3% in 2026 and 3.2% in 2027. For the past year, 2025, global growth is
expected to have reached 2.9%, while growth in the Eurozone is estimated at 0.9%. The IMF notes that
the United States and China are the primary contributors to the upward revision of the 2026 estimate,
while warning that an escalation of the tariff war and new geopolitical shocks could rapidly deteriorate the
outlook and unsettle financial markets. Regarding the United States, the IMF has raised its forecast by
0.3 percentage points, projecting growth of 2.4% in 2026 and a slowdown to 2.0% in 2027. For the
Eurozone, which Bulgaria joined on January 1st, the outlook remains more moderate due to unresolved
structural issues, weak domestic demand, and ongoing pressure from higher energy prices following the
Russian invasion of Ukraine. The IMF projects a growth rate of 1.7% for the current year (an increase of
0.1 percentage points compared to October) and 1.3% for 2027 (unchanged from the October forecasts).
As for the Eurozone's largest economy, the IMF expects the German economy to grow by 1.0% in 2026
and 1.5% in 2027. Among the forecasts for other major economies, the IMF expects China's growth to
reach 4.5% in 2026 - lower than the 5.0% expected in 2025, but 0.3 percentage points higher than the
October estimates. The IMF emphasizes that the outlook remains tilted to the downside. A continuing
trade war could increase uncertainty and weigh on economic activity. Furthermore, an escalation of
geopolitical tensions could disrupt supply chains and lead to higher volatility in financial markets. At the
same time, larger budget deficits and high levels of public debt could put upward pressure on interest
rates. Policies to promote stability and sustainably improve medium-term growth prospects require a
strong emphasis on rebuilding fiscal buffers, maintaining price and financial stability, reducing uncertainty,
and implementing structural reforms without further delay, the IMF highlights.
In the beginning of 2026, the manufacturing sector in Europe shows signs of recovery, but growth
is too fragile due to structural economic and geopolitical difficulties on the one hand, and due to intense
competition, high energy regulatory costs, and heavy global pressure on the other. Overall, the main risks
remain the dependence on energy imports, as high energy prices increase production costs and inflation,
especially in industry. The new military conflict in the Middle East intensifies concerns regarding the
accessibility and pricing of energy commodities and other material resources. Potential logistics and
supply chain disruptions, alongside rising transportation and freight costs, are expected to have a direct
impact on production costs (cost of sales). Consequently, these factors pose a significant risk to the
competitiveness of the Bulgarian industry and may lead to a potential loss of market share. The US -
-1,00
0,00
0,60
2,00
1,40
1,00
-0,60
1,40
2,50
3,40
2,80
2,50
Y2025 1Q26 2Q26 3Q26 4Q26 Y2026
Mechanical engineering Metal goods
8.
China trade relations, and especially the customs tariffs on Chinese goods in the US, intensify the
Chinese supply in Europe, which in turn reduces the competitiveness of European manufacturers.
The interest rate risk is related to changes in the levels of the market interest rates, which could
lead to an increase in the interest expenses and a corresponding decrease in the financial result of the
companies in the Group.
In the first half of the year, the ECB reduced interest rates by a total of 100 basis points (1.00 %)
through four consecutive steps of 0.25 % each, in January, March, April, and June 2025, respectively.
At its monetary policy meetings on September 11, 2025, and October 30, 2025, the Governing
Council decided to keep the three key ECB interest rates unchanged, as inflation remains close to the
medium-term target of 2% and its assessment of the inflation outlook remains broadly unchanged, while
noting that the outlook remains uncertain, particularly due to ongoing global trade disputes and
geopolitical tensions.
Following the ECB Governing Council meeting in October 2025, market interest rates rose. Bank
lending rates for firms have remained generally stable since the summer, after falling in response to the
Council's key rate cuts in the previous year. In October, they stood at 3.5%, unchanged from September.
Bank lending to firms grew by 2.9 % year-on-year in October, unchanged from September. Mortgage
lending strengthened, rising by 2.8 % after 2.6 % in September.
At its meeting on December 18, 2025, the Governing Council again decided to keep the three key
ECB interest rates unchanged. As of December 31, 2025, the interest rates on the deposit facility, the
main refinancing operations, and the marginal lending facility remain at 2.00%, 2.15%, and 2.40%,
respectively.
The ECB's decisions are based on the expectation that inflation will settle durably around the 2%
target in the medium term. The Governing Council emphasized that it is not committing to a pre-defined
rate path but rather making decisions meeting-by-meeting based on economic indicators.
At its first meeting of 2026 in February - in which Bulgaria participated for the first time as a full
member of the currency union - the ECB decided to keep these interest rate levels unchanged.
According to BNB data, the base interest rate recorded a decrease from 2.95 percentage points as
of January 1, 2025, to 1.81 percentage points as of December 1, 2025.
Source: BNB
Changes in interest rate levels have an impact depending on the share of attracted bank and
commercial loans. In 2025, the 12-month EURIBOR went through a period of gradual decline and
stabilization, reflecting the shift in the European Central Bank's monetary policy from fighting inflation
toward supporting economic growth. The highest value of 2.576 % was recorded in January 2025, while
the lowest (2.024 %) was in May 2025. As of December 31, 2025, the 12-month EURIBOR reached a
value of 2.243%.
The reduction in interest payments on existing floating-rate loans increased consumers' disposable
income, which was a primary driver of economic growth in 2025. The Eurozone economy grew by 1.4 %
– 1.5% for 2025, supported by domestic demand and stabilized financial conditions. The decline in
EURIBOR did not lead to a new surge in inflation, which ended 2025 at levels of 1.9% in the Eurozone -
just below the ECB's target. Despite lower interest rates, banks remained cautious in lending due to risks
in the economic environment. Trade conflicts with the US and China continue to weigh on export-oriented
companies, limiting the positive effect of cheaper money.
2,95
2,82
2,59
2,39
2,24
2,07
1,91
1,82 1,82
1,81
1,80
1,81
01.01.2025 01.02.2025 01.03.2025 01.04.2025 01.05.2025 01.06.2025 01.07.2025 01.08.2025 01.09.2025 01.10.2025 01.11.2025 01.12.2025
BNB Base Interest Rate
01.01.2025 г. - 01.12.2025 г.
9.
12-month EURIBOR
(01.01.2025 - 31.12.2025)
Stara Planina Hold Plc uses optimally the available resource in order to reduce the impact of the
interest rate levels.
Inflation risk is related to the probability for the purchase prices of goods and services to increase
significantly which leads to lower incomes, shrinking consumers’ demand and limiting the country's
economy growth. Inflation can directly affect the real return on a given investment since with high inflation,
even high nominal incomes can appear to have a negative nominal return.
In 2025, inflationary pressure is gradually easing but remains above the target levels of central
banks. Average inflation in OECD countries is expected to be around 4.2 %, with significant regional
disparities persisting. The World Trade Organization reports a moderate recovery in international trade
in goods, forecasting growth of approximately 2.4 % for 2025, with emerging markets in Asia and Africa
serving as the primary drivers, while transatlantic flows between Europe and North America remain
volatile.
According to the ECB macroeconomic projections of December 2025, annual inflation in the
Eurozone, measured by the Harmonized Index of Consumer Prices (HICP), has fluctuated within a narrow
range since the spring of 2025 and remained at 2.1 % in November. Energy prices were 0.5 % lower
compared to November 2025, following a more significant decline recorded in October. According to ECB
staff, most indicators of long-term inflation expectations remain at around 2%, supporting the stabilization
of inflation around the target level set by the Governing Council. Inflation is projected to slow from 2.1 %
in 2025 to 1.9 % in 2026, and further to 1.8 % in 2027, before rising to the Governing Council’s medium-
term target of 2 % in 2028. The expected decline in headline inflation in early 2026 reflects downward
base effects related to energy prices, while inflation for non-energy components is expected to continue
slowing throughout 2026. The contribution of energy inflation to headline inflation is expected to remain
low until the end of 2027, before increasing significantly in 2028 as a result of the anticipated introduction
of the EU Emissions Trading System 2 (ETS2), which is expected to accelerate headline inflation by 0.2
percentage points. HICP inflation excluding energy is projected to slow from 2.5 % in 2025 to 2.2 % in
2026 and to 2.0 % in both 2027 and 2028.
According to the European Commission’s Autumn 2025 Economic Forecast, inflation in the
Eurozone is expected to continue decreasing to 2.1% in 2025 and to remain around 2% throughout the
forecast period. Inflation in the EU is expected to stay slightly higher, falling to 2.2% in 2027. The inflation
forecast for Bulgaria is 3.5 % for 2025, 2.9 % for 2026, and 3.7 % for 2027, respectively.
According to the IMF World Economic Outlook update from January 2026, global inflation is
projected to decelerate from an estimated 4.1% in 2025 to 3.8% in 2026 and further to 3.4% in 2027. In
the Eurozone, headline inflation is expected to stabilize around 2%, with core inflation projected to
converge to this target level by 2027. These inflation forecasts remain broadly unchanged compared to
10.
the October projections and suggest that inflation will return to target more gradually in the United States
than in other major economies.
According to Eurostat data, annual inflation in the European Union slowed to 2.3 % in December
2025, down from 2.4% in November. In the Eurozone, annual inflation in December stood at 1.9 %,
following 2.1 % in November. According to preliminary data, Eurostat had initially estimated December's
inflation at 2 %. In Bulgaria, based on the Harmonized Index of Consumer Prices (HICP), the annual
inflation rate slowed to 3.5 % in December compared to 3.7 % in November, a level that ranks the country
sixth in the EU.
According to National Statistical Institute (NSI) data, monthly inflation in December 2025, measured
by the Consumer Price Index (CPI), was 0.1%, while annual inflation for December 2025 compared to
December 2024 was 5.0%. The average annual inflation for the period January 2025 – December 2025,
compared to the period January 2024 – December 2024, was 4.6%. In December 2025, monthly inflation
in Bulgaria measured by the HICP was 0.1%, and annual inflation for December 2025 compared to
December 2024 was 3.5%. The average annual inflation measured by the HICP for the period January
2025 – December 2025, compared to the period January 2024 – December 2024, was 3.5%.
In connection with the conflict in the Middle East and its duration, it is possible that global inflation
may rise to levels that currently cannot be predicted.
The systematic currency risk is the probability of a possible change in the currency regime of the
country (currency board) which would lead either to the devaluation of the lev or to the appreciation of
the lev against foreign currencies. According to the current legislation in the country, the Bulgarian lev is
fixed to the common European currency - euro in the ratio EUR 1 = BGN 1.95583.
On 8 July 2025, Bulgaria received the final necessary approval for its accession to the Eurozone
from 1 January 2026. Following the European Parliament's vote in favor of our country’s transition to the
Eurozone, the Economic and Financial Affairs Council (ECOFIN) adopted three legal acts finalizing the
approval process: regarding the adoption of the euro by Bulgaria from 1 January 2026 pursuant to Article
140(2) of the TFEU; regarding the introduction of the euro in Bulgaria pursuant to Council Regulation
(EC) No 974/98; and regarding the exchange rate of 1 euro = 1.95583 BGN for Bulgaria pursuant to
Council Regulation (EC) No 2866/98. This successfully concluded the approval process for our
membership application, and our country officially joined the Eurozone from 1 January 2026.
Currency conversion is carried out at the fixed rate of 1 euro = 1.95583 BGN; therefore, there is no
risk of devaluation of the lev against the European currency. However, there is a risk of unfavorable
changes in the euro's exchange rate against other major currencies, such as the US dollar, Swiss franc,
British pound, etc.
According to an analysis by the Fiscal Council regarding the introduction of the single currency in
Bulgaria, as of the date of this notification, available facts and indicators confirm that the transition to the
euro from January 1, 2026, is proceeding smoothly and in an organized manner, with a high degree of
institutional readiness and effective process management. The exchange of banknotes and coins is
progressing according to plan, and as of mid-March 2026, approximately 89 % of the leva in circulation
have been withdrawn.
Given the export orientation of a significant number of the companies within the group of Stara
Planina Hold Plc, changes in currency values have a certain effect and are a risk factor for their
operations. Exchange rates influence revenues from foreign sales and costs for raw material imports; the
main part of sales and imports are agreed upon in euros, which significantly reduces the impact of this
risk on operations. Since these companies conduct their primary settlements in BGN and EUR and realize
the bulk of their sales revenue in EUR, the impact of this risk on their operations is significantly reduced.
The management of the holding company monitors exchange rate fluctuations and takes measures to
mitigate their negative consequences.
Political risk is the probability of serious domestic political turmoil occurring, leading to a negative
shift in the government’s economic program and its priorities for economic development; as a result, the
environment in which the companies operate may change for the worse, and investors may incur losses.
11.
The degree of political risk is determined by the likelihood of unfavorable changes in the government’s
long-term economic policy, which could have a negative impact on investment decisions.
As of the date of this report, the political instability in the country over the past four years has not
been overcome; on the contrary, it appears to be further deepening following the Government's
resignation on December 11, 2025, and the upcoming new snap elections. This instability continues to
be assessed as a primary factor negatively impacting not only economic activity but also all social
systems in Bulgaria. The lack of substantive reforms has further deteriorated the business environment,
and as a result, we continue to observe a deepening decline in industry, a slump in exports, and job
losses.
The country ended 2025 without an adopted 2026 Budget or a public finance framework for the
2026-2029 period, characterized by higher-than-projected GDP but coupled with high inflation, weak
revenues, inflated current expenditures, and unfulfilled investments. According to a summary of the
analysis on the 2025 Budget execution published by the Fiscal Council of Bulgaria on February 13, 2026,
this is viewed as a signal of lacking discipline, with the Council urging for serious reforms rather than
'innovations' that merely postpone problems. The Council states that the 2025 Budget projections were
unrealistic and overly optimistic, while 'fiscal tricks' - such as 100 % dividends from state-owned
enterprises, advance taxes from banks, and the capitalization of the Bulgarian Development Bank in lieu
of budget expenditures - circumvent rules and create long-term issues. Furthermore, the Council points
out that current expenditures (specifically wages) undermine sustainability; they argue that given the
healthy growth, the deficit should have been capped at 0.8 % of GDP. The Fiscal Council once again
appeals for structural reforms, including the limitation of current spending and administrative reform, to
manage pressures from defense, pensions, healthcare, and demographics, adding that failure to do so
risks higher taxes or increased debt.
According to the state budget for 2026 and the medium-term budgetary framework initially
presented by the Ministry of Finance, public debt was projected to reach EUR 37.6 billion (31.3 % of
GDP) in 2026, EUR 43.5 billion (34.2 % of GDP) in 2027, and EUR 49.0 billion (36.6 % of GDP) in 2028.
For 2026, new borrowings of BGN 20.5 billion (approximately EUR 10.5 billion) were planned, which
would triple the interest expenses for debt servicing. The draft budget proposed a two-fold increase in the
dividend tax and a 2-percentage-point hike in social security contributions for the 'Pensions' fund
(resulting in a more than 10 % increase in pension contribution costs). As a result, BGN 1.4 billion would
be extracted annually from those employed in the real sector starting as early as 2026, with this amount
growing progressively to finance inefficient spending in the public sector, including new double-digit wage
increases in the 'Security and Defense' and 'Higher Education' sectors. Leading economists and the
business community expressed firm disagreement with this fiscal policy and concern that it deepens the
risk of an unsustainable fiscal spiral, threatening macroeconomic stability and the country’s medium- and
long-term economic growth. The Governor of the BNB, Dimitar Radev, also expressed concern that the
2026 budget faces serious difficulties, highlighting that debt accumulation should be offset by investments
and economic growth, and wage increases should be matched by reforms. He noted that in systems
where personnel costs account for 70-80 %, or even over 90 % of total expenditures, efficiency cannot
be achieved.
In this regard, the Association of Bulgarian Employers’ Organizations (ABEO) presented a
reasoned proposal for a specific package of measures with a positive fiscal effect exceeding BGN 6
billion. These measures would allow for the preservation of the tax and social security model, even with
public sector wage growth aligned with inflation, provided that automatic wage-setting mechanisms are
abolished, the increase in maintenance costs is limited to 5 %, the capital program is reduced by 3%, and
vacant positions in the administration are cut. Escalating public discontent nationwide led to the
withdrawal of the initially proposed budget and prevented the adoption of a revised new budget that
partially incorporated the measures proposed by the business sector; consequently, in early December,
the Government submitted its resignation.
12.
Against this background, the European Commission’s assessments - part of the autumn package
released on November 25, 2025, within the framework of the European Semester, which analyzes key
economic and social challenges in the EU and provides policy guidance to Member States - identified
Bulgaria among the countries deemed at risk of non-compliance with the EU fiscal framework based on
the 2026 Draft Budgetary Plan. This indicates the Commission's concern that the national fiscal policy for
2026 may not fully align with the current European fiscal requirements. Furthermore, in the social
dimension of the analysis, Bulgaria was included among the nine countries subject to an in-depth review
in the spring of 2026. This analysis addresses risks to social convergence with other Member States,
including challenges such as low productivity, labor and skills shortages, and higher levels of poverty or
other social disparities.
In 2025, the country once again received unsatisfactory ratings from prestigious studies in the areas
of competitiveness and economic freedom. According to the 37th edition of the 2025 World
Competitiveness Ranking by the Institute for Management Development (IMD) – Switzerland, published
on June 17, in 2025 Bulgaria ranks 57th out of 69 countries, marking an improvement of only one position
compared to last year, when it was ranked 58th but out of 67 economies. Compared to the previous year
2024, our country marks a decline in terms of economic performance (from 45th to 50th place) and
business efficiency (from 65th to 67th place). For comparison, since 2020 Bulgaria has seen a
deterioration of a total of 9 positions, and since 2009 – by 19, which places it among the most
uncompetitive economies in Europe. Furthermore, according to information from the Institute for Market
Economics, based on the latest study by the Canadian Fraser Institute, Bulgaria ranks 56th in economic
freedom globally among 165 countries, dropping 4 positions compared to the previous year's ranking.
For another consecutive year, Bulgaria receives its lowest score regarding the legal system and property
rights; in this category, which measures the rule of law, judicial independence, the work of law
enforcement agencies, and the protection of property rights, our country lags behind all other EU member
states. According to the report, Bulgaria also sees a decline in the size of government category, which
includes indicators such as the share of redistribution through the budget, transfers and subsidies, the
size of state assets, and taxes. Bulgaria receives a maximum score only for its flat tax. The two categories
where Bulgaria receives its highest scores in the index are sound money and freedom to trade
internationally, which are predetermined by the currency board and Bulgaria's EU membership,
respectively. Meanwhile, in the remaining categories concerning current policies and the implementation
of reforms, the scores remain low and freedom remains restricted.
An unsatisfactory level of the rule of law in our country was also noted in the European
Commission's annual Rule of Law Report, presented on 8 July 2025. The European Commission reported
that Bulgaria has made 'limited progress' in fulfilling its commitments. The Commission expressed serious
concern regarding the state of the rule of law in Bulgaria in 2025, reminding that reforms have stalled
since 2023, which calls into question the sustainability of key changes in the judicial system and the fight
against corruption. One of the most serious problems outlined in the report is the exceptionally low level
of trust in the judiciary among both citizens and businesses. According to the Commission's data, only
27 % of citizens and companies rate the independence of the courts as 'good,' which is a slight increase
compared to 2024 but represents a significant decline compared to 2021, when 32 % of citizens and 43
% of companies held such an opinion.
Furthermore, according to data published on February 10, 2026, in the 2025 Corruption
Perceptions Index (CPI) by the international organization Transparency International, Bulgaria recorded
its worst performance since 2012. Ranking 84th out of 182 countries with a score of just 40 out of 100
points, Bulgaria stands as the worst-performing EU member state alongside Hungary. According to the
Transparency International report, Bulgaria’s score has deteriorated by five points over the last two years
alone. The lack of progress on key reforms, unfulfilled international recommendations, and the ineffective
enforcement of anti-corruption legislation place the country in an unfavorable position both within the EU
and in its accession process to the Organization for Economic Co-operation and Development (OECD).
13.
Furthermore, according to information from the website of the global supervisory body, the
Financial Action Task Force (FATF), as of the end of 2025, Bulgaria remains on the “grey list” for money
laundering and continues to be subject to increased monitoring. In June 2025, Croatia, Mali, and Tanzania
were removed from the FATF “grey list”, leaving Bulgaria as the only European country on it, alongside
nations such as Burkina Faso, Cameroon, the Democratic Republic of the Congo, Haiti, Kenya, Nepal,
etc.
At the same time, political volatility in recent years has led to delays in the practical implementation
of the structural measures necessary to accelerate the absorption of funds under the Recovery and
Resilience Plan. The severely compromised principle of the rule of law and the failure to meet reform
commitments in this area led to a decision by the European Commission on October 6, 2025, to delay
the transfer of EUR 214.5 million, representing part of the second payment for Bulgaria under the
Recovery and Resilience Plan, due to the non-fulfillment of a key objective - the reform of the Anti-
Corruption Commission. In early November, Bulgaria received a new tranche of EUR 438.6 million,
bringing the total utilization to 29.5 % of the agreed EUR 6.17 billion under the Recovery and Resilience
Facility. At the end of the year, Bulgaria received EUR 1.47 billion under the third payment of the NRRP,
while the European Commission again 'frozen' the transfer of EUR 152 million due to the stalled anti-
corruption reform, clearly stating that the final release of the full amount will depend on the actual
implementation of the remaining reforms.
Last but not least, electricity prices in Bulgaria continue to be among the highest in all of Europe,
according to real-time data from electricity exchanges across the European Union, while electricity prices
in Europe remain significantly higher compared to Asia and North America. This places European, and
consequently Bulgarian business, in an unfavorable competitive position. This places European - and
consequently Bulgarian businesses in a more disadvantaged competitive position. At the European level,
historical divisions between Eastern, Central-Western, and Northern Europe still impact networking
opportunities. Therefore, efforts to improve connectivity by integrating national energy grids into a broader
European context must be significantly accelerated. A key challenge remains the 'Green Deal,' which
urgently and promptly requires a serious review to ensure it does not act as a bottleneck for industrial
development.
Internationally, in the context of the current geopolitical situation, the risks for Bulgaria are
increasingly tied to European policies. On one hand, they stem from the failure to achieve sustainable
results regarding our country's commitments to implement serious structural reforms in accordance with
EU policies. On the other hand, the effectiveness of common European policies in the area of trade
relations with the USA and other trade partners, reindustrialization through the reduction of over-
regulation and bureaucratic costs, the recalibration of the 'Green Deal,' and the rapid creation of effective
mechanisms for the equitable provision of energy resources at competitive prices for all participants in
the European energy market, are fundamental to the possibility of preserving and increasing the
competitiveness of the European and, specifically, the Bulgarian economy.
The deterioration of the business environment in the European Union, driven by the military
conflicts in Ukraine and the Middle East, high energy prices, over-regulation, and the shortage of skilled
labor, continues to demotivate entrepreneurial activity, leading to capital flight and declining
competitiveness. Europe continues to lag significantly behind its primary competitors, the US and China,
in terms of economic growth, innovation, high technology, and demographics. Overcoming these
multifaceted challenges requires a comprehensive reform of EU governance: accelerating strategic
decision-making, a profound shift in EU budget expenditure management, action plans for every leading
sector, and 'self-restraint' through the simplification of EU rules and regulations, which are currently
viewed as the most significant obstacle to business, particularly for small and medium-sized enterprises.
Against this background, President Donald Trump has decisively altered US trade policy. Under
his pressure, NATO allies have agreed to increase defense spending to 5 % of GDP by 2035, forcing
European governments to reallocate massive budgets toward rearmament. Relations between Europe
and the US remain strained, and ongoing global trade tensions pose a serious risk to supply chains,
14.
import/export costs, and the global transport of goods, which could lead to a further loss of
competitiveness for the European economy.
Regulatory risk - Regulatory risk is related to the impact of the existing regulatory framework at
national and European level or its change, as well as the potential possibility of imposing sanctions as a
result of non-compliance with this framework.
In recent years, Bulgarian and European businesses continue to be increasingly affected by the
intensifying European and national regulation in many directions, including an increased focus on
sustainability issues. The trend of continuing growth in the administrative burden on business, in the
absence of reasonable and adequate relief, significantly increases the costs required to comply with new
regulations and their associated reporting requirements. The ongoing deterioration of the business
environment in the European Union - manifested in high energy price levels and the imposition of
numerous regulations that significantly increase the administrative burden on business, alongside new
geopolitical challenges - continues to demotivate entrepreneurial activity and leads to capital outflows
from Europe, reduced competitiveness, and hindered economic growth. In recent years, the EU economy
has lagged behind those of the US and China. The EU's share of the global economy decreased from
25.8 % in 2004 to 17.6% in 2024. During the same period, the EU's share of global exports fell from
18.9% to 14 %.
At the national level, the lack of serious structural reforms aimed at introducing strict fiscal
consolidation measures could lead to an increase in the tax and social security burden on businesses
and private sector employees. This would have an additional negative impact on economic activity,
alongside the expected effects of global geopolitical shifts. According to business analyses, the tax and
social security burden in Bulgaria is currently already higher than the European average, characterized
by a broad tax base to which low rates are applied. A tax hike would not guarantee an increase in budget
revenues; instead, it would lead to a decrease in economic growth and investment.
In addition to the indicated systematic risks, the activities of the companies in the group of Stara
Planina Hold Plc are related to non-systematic risks such as industry risk, concerning the state and trends
for development of a given industry as a whole and a company risk arising from the specifics of the
company.
Impact of the main risks and uncertainties
According to the ECB Economic Bulletin of December 2025, although trade tensions are easing,
the still volatile international environment could cause supply chain disruptions, dampen exports, and
weigh on consumption and investment. A deterioration in global financial market sentiment could lead to
tighter financing conditions, increased risk aversion, and weaker growth. Geopolitical tensions remain a
significant source of uncertainty. Conversely, planned defense and infrastructure spending, alongside
productivity-enhancing reforms, could result in higher-than-expected growth. A strengthening of
confidence could further stimulate private spending.
The inflation outlook remains more uncertain than usual due to the persistently unstable
international environment. Inflation could turn out lower if U.S. tariff hikes weaken demand for euro area
exports or if countries with overcapacity increase their exports to the region. Furthermore, an appreciation
of the euro could lead to a larger-than-expected decline in inflation. Heightened volatility and risk aversion
in financial markets could reduce demand, thereby slowing down inflation. Conversely, inflation could be
higher if greater fragmentation of global supply chains leads to rising import prices, supply constraints for
critical raw materials, and additional capacity constraints within the euro area economy.
Under these conditions, the ECB maintains that fiscal and structural policies should be aimed at
making the economy more productive and competitive, which would help raise potential growth and
reduce price pressures in the medium term.
Against this background, and in complete contradiction to the intentions for active deregulation
announced in February 2025 to support and promote the competitiveness of European business, on July
16, 2025, the European Commission presented a record draft EU budget for the 2028-2034 period
15.
amounting to nearly €2 trillion. According to the proposal, while Member State contributions remain
steady, Brussels is relying on five new sources of revenue to cover rising costs - particularly those related
to security, the green transition, and post-pandemic recovery. These include a new annual corporate tax
on mid-sized companies with a net annual turnover exceeding €100 million within the EU. Two other
sources of additional revenue are expected from the redirection of a portion of Emissions Trading System
(ETS) revenues, which currently flow into national budgets, with an anticipated €9.6 billion annually for
the EU budget. Furthermore, revenue from a new 'Carbon Border Adjustment Mechanism' (CBAM),
designed to tax imports from countries with weaker environmental regulations, is expected to contribute
approximately €1.4 billion annually to the EU budget. Germany, the Netherlands, and Hungary have
already issued sharp criticisms, warning that 'a general increase in the EU budget is unacceptable at a
time when all Member States are making significant efforts toward national budget consolidation' and that
the Commission's proposed 2028-2034 budget “lacks clear strategic foundations and could ruin the
European Union.”
In this context, a study by the consulting firm EY on Europe's attractiveness to investors in 2024,
published on July 17, 2025, indicates a 5% decline in foreign direct investment (FDI) in Europe and a
16% contraction in job creation. According to the report, 45% of surveyed companies stated that Europe’s
approach to rules and requirements is diminishing its appeal as an investment destination, and that
optimizing regulations and harmonizing approaches across Member States could be essential to
bolstering Europe’s investment attractiveness. The study also found that 37% of companies have
postponed, cancelled, or scaled back their investment plans due to high energy prices, complex
regulatory requirements, and geopolitical tensions. Based on the views of business leaders from 45
countries, EY proposes a 12-step collective action plan to regain investor interest in Europe including
reducing energy prices and increasing energy independence as a top priority; optimizing regulations and
harmonizing approaches among Member States; reducing corporate tax rates and ensuring a predictable
tax environment; a new trade strategy and the protection of critical industries; accelerating the transition
to low-carbon energy and simplifying access to decarbonization programs; stimulating investment in
innovation, including Artificial Intelligence and clean energy, etc.
At the European level, a comprehensive review of the Union's policies across all key aspects is
necessary to establish conditions that facilitate economic development and foster competitiveness. This
conclusion is further supported by data from the first monitoring report on the implementation of the 2024
Antwerp Declaration, which outlines severe structural issues in Europe: 83% of competitiveness
indicators show stagnation or decline, while energy prices remain significantly higher than those in other
leading economies. Over the past three years, the share of companies identifying regulation as a primary
obstacle to investment has increased by 42%. The EU remains fully dependent on imports for more than
half of its critical raw materials, while internal barriers within the Single Market create costs equivalent to
tariffs of approximately 65% for goods and up to 100% for services. Furthermore, innovation lags behind
China by 20 percentage points and the US by 15 points. Revising the Union's climate targets and
implementing policies that do not hinder competitiveness or growth, nor lead to deindustrialization, must
become a core priority.
At the national level, an urgent revision of our country’s budgetary priorities and the implementation
of strict fiscal consolidation measures are imperative to prevent a potential financial and economic crisis
with severe consequences for both business and society. Reducing regulatory and other administrative
burdens, particularly for small and medium-sized enterprises, including through the comprehensive rollout
of e-government across all sectors, as well as a genuine fight against the shadow economy, corruption,
monopolization, and cartelization, must become actual state policies. Furthermore, a structured and
balanced approach to forming and implementing national green transition policies, ensuring the
sustainable energy development of the country while considering national priorities and guaranteeing
energy supplies at minimal prices, is essential. Facilitating and accelerating procedures for the admission
of third-country workers and promoting their sustainable employment in Bulgaria should also be prioritized
16.
to achieve Bulgaria's strategic goal of OECD membership. This will ensure accelerated economic growth
and an improved quality of life in our country.
At the same time, the negative effects of price imbalances in the European electricity market and
prolonged periods of excessively high prices in Southeast Europe, consistently lead to increased inflation
and production costs. These factors further result in the deterioration of industrial competitiveness and
the business environment for developing supply chains. The price disparities in Southeast Europe have
proven to be of a persistent nature. This situation continues at present, and the war in Ukraine, along with
its destroyed energy infrastructure and the limited interconnectivity at the borders of Hungary and Croatia,
are factors suggesting that these imbalances will persist for a long time. Overcoming these imbalances
requires the introduction of additional national regulations to adequately protect domestic consumers,
applicable at least until the development and implementation of EU-wide mechanisms to compensate for
significant price deviations. In response to this need, the Electricity Cost Compensation Program
proposed by the Council of Ministers is intended to apply to non-household end customers only when the
weighted average base load price on the 'Day Ahead' segment of the 'Independent Bulgarian Energy
Exchange' EAD for the respective six-month period (from 01.07.2025 to 31.12.2025 and from 01.01.2026
to 30.06.2026) exceeds BGN 240/MWh. According to calculations by the Bulgarian Industrial Capital
Association, this effectively means that the program does not actually provide compensation for non-
household electricity consumers, as the weighted average six-month price for the first period is below
BGN 206/MWh, and for the following six-month period of January-June 2026, it is expected to be below
BGN 200/MWh.
Against this background, the Bulgarian Branch Chamber of Machine Building reports a 30 %
reduction in orders within Bulgaria’s machine-building sector as a result of the industrial crisis in the
country over the last three years. Bulgarian machine building continues to record significant turnover
declines from the beginning of the year to date, with expectations that the negative trend will persist
beyond the end of 2025. The data showing a continuous decline in production are highly concerning for
Bulgaria's economic growth prospects, as machine building is a cornerstone of the national industry, with
its output accounting for over 10 % of the Gross Domestic Product in recent years.
A primary risk with a growing negative impact on every business in Bulgaria remains the shortage
and quality of labor - there is a lack of high-skilled and mid-skilled specialists, as well as low-skilled
workers. Coupled with the country's negative demographic trend, the absence of a state policy facilitating
labor immigration and a business-aligned methodology for workforce planning and training ensures that
the human resource deficit remains a critical issue. This shortage is among the reasons for the withdrawal
of international companies from the country. At the same time, the implementation of an inadequate
income policy, specifically, increasing the minimum wage at a rate entirely disproportionate to productivity
growth and inflation, exacerbates this problem. It further degrades the business environment and leads
to wage leveling (egalitarianism), which demotivates employees and staff alike.
Under these conditions, the companies in the Group of the Stara Planina Hold Plc make serious
efforts to guarantee their security with orders also for 2026, as well to maintain their market positions.
The companies continue their investment policies aimed at technological renewal, digitization of
processes and expansion of production capabilities with a view to increasing productivity variety and
quality of the manufactured products in parallel with their policies on optimizing the production process
and stimulating the persons employed in the Group.
Possible changes in the demand for the manufactured products are also risky due to changes in
the price levels, quality, reliability and solvency of the consumers, the technologies used and the
organization of the production.
Factors that will continue influencing the activities in 2026 as well are the market price of raw
materials and materials for production, the transport of supplies, the regional market labor price, the prices
of energy resources and the security of their supplies. Given the ongoing military conflict in Ukraine and
the uncertainty in the Middle East, as of the date of preparation of this report, we assess the risks
17.
associated with ensuring the supply of materials, as well as the sale of finished products to partners
related to the affected regions as high.
The country’s macroeconomic development, the unstable political climate, fiscal policy, and
geopolitical factors continue to be the most concerning circumstances impacting business operations.
Alongside the threat to European and regional stability, the geopolitical situation places energy resource
supplies and the prospects for sustainable economic growth at further risk. The effect of measures taken
at both European and national levels, as well as any corresponding countermeasures, will impact the
activities of the group’s enterprises and may lead to adjustments in expected business results.
Against the background of the risks described, the company's management reports high
uncertainty regarding the global economic and geopolitical prospects, which deteriorated significantly
over the past year due to numerous factors, all of which may continue to intensify.
II. Analysis of major financial and nonfinancial indicators
1. Financial indicators
Profitability Indicator
31.12.2021 г.
31.12.2022 г.
31.12.2023 г.
31.12.2024 г.
31.12.2025 г.
К1
0.183
0.182
0.197
0.136
0.114
К2
0.158
0.156
0.169
0.116
0.096
К1 Profitability of Shareholders’ equity ratio = Net profit / Shareholders’ equity
К2 Asset capitalization ratio = Net profit / Total assets
Profitability (yield) is the ability of the company to provide economic profit to its owners through the
skillful management of the assets, the shareholders’ equity and the borrowed capital and the other
liabilities. It is the most important indicator for the efficiency of the activity carried out by us.
Return on equity shows the profit obtained from a unit of invested equity and the profitability of the
enterprise from all the activities carried out.
Efficiency Indicator
31.12.2021 г.
31.12.2022 г.
31.12.2023 г.
31.12.2024 г.
31.12.2025 г.
К3
6.277
6.353
6.529
3.497
3.101
К4
0.159
0.157
0.153
0.286
0.323
К3 Expenses efficiency ratio = Total income / Total expenses
К4 Income efficiency ratio = Total expenses / Total income
The analysis of the efficiency of revenues and expenses for 2025 shows that BGN 3.101 revenues
were received per BGN 1.00 of the expenses. Revenues fully cover the expenses of the company, which
is a pre-condition for a positive cash flow from operational activity, meeting the undertaken dividend
commitments as well as for partial financing of the companies in the portfolio of the Holding.
Liquidity Indicator
31.12.2021 г.
31.12.2022 г.
31.12.2023 г.
31.12.2024 г.
31.12.2025 г.
К5
1.617
1.471
1.650
1.328
1.415
К6
1.304
0.840
0.921
0.744
0.856
К5 Total liquidity ratio = Current assets / Current liabilities
К6 Absolute liquidity ratio = Cash / Current liabilities
In 2025 again Stara Planina Hold Plc has been covering its current liabilities on time with the
available current assets. The liquid structure of current assets and liabilities allows part of the funds to be
directed to long-term financing of the companies under control.
18.
Financial autonomy Indicators
31.12.2021 г.
31.12.2022 г.
31.12.2023 г.
31.12.2024 г.
31.12.2025 г.
К7
6.185
5.987
5.952
5.767
5.309
К8
0.162
0.167
0.168
0.173
0.188
К7 Financial Autonomy ratio = Shareholders’ equity / Borrowed capital
К8 Debt ratio = Borrowed capital / Shareholders’ equity
The financial autonomy ratios characterize the financial independence of Stara Planina Hold Plc
from creditors and the ability to meets its liabilities. We achieve good financial autonomy which
guarantees the interests of the owners.
2. Non-financial information
As a parent company in a large Group, Stara Planina Hold Plc will include a consolidated non-
financial declaration and taxonomy related disclosures in the consolidated activity report.
The corporate policy of Stara Planina Hold Plc and the companies in the group is based on
responsible, sustainable and transparent management in accordance with the recognized standards and
principles of good corporate governance, with the changes in the regulatory, financial and economic
environment where it operates and with the principles of corporate social responsibility, reflecting the
responsibility of enterprises for their impact on employees, society, the environment and the economy as
a whole.
In 2024 The Board of Directors of the company adopted a new Code of Ethics and Professional
Conduct, which is part of the company's overall policy for sustainable development, and is based on the
principles and recommendations of the following leading global agreements:
• The United Nations Global Compact (UN GC)
• The United Nations Sustainable Development Goals (UN SDG)
• The United Nations Guiding Principles on Business and Human Rights
• The Organization for Economic Co-operation and Development (OECD) Guidelines for
Multinational Enterprises
• The International Labor Organization (ILO) Core Conventions, which include the principles of
good corporate and socially responsible governance as a means of contributing to sustainable
development. The rules of conduct set out in the new Code of Ethics and Professional Conduct are
subject to the following basic principles:
• Professionalism – performing official duties and functions in a manner that is in full compliance
with the rules and professional requirements for the position held, possessing specialized competence in
a specific area and maintaining and updating it with the acquisition of new knowledge and skills;
demonstrating responsibility for actions and decisions in the performance of official duties in accordance
with ethical standards and values.
• Competence - use and application of the knowledge, skills, abilities and experience that managers
and employees possess in the performance of their official duties and the performance of their
professional functions and continuous improvement of their professional qualifications.
• Objectivity - true, accurate and impartial collection, analysis and assessment of all facts and
circumstances in or on the occasion of the performance of official duties and functions based solely on
sound professional judgment.
• Good faith - demonstrating integrity, correctness and ethics in all official and professional matters,
in accordance with generally established rules and norms for personal and professional conduct, honest
reflection and responsible use of the facts and circumstances established in the performance of official
duties and functions.
19.
• Impartiality and independence - preventing managers or employees from being influenced by
persons related to them in relation to the official duties and professional functions performed by them and
the obligation to disclose potential or real conflicts of interest.
• Confidentiality - protecting and not disclosing data, facts and circumstances that have become
known to managers and employees during or in connection with the performance of their official duties
and professional functions.
The success of Stara Planina Hold Plc and the companies in the group is based on social
responsibility, which requires taking into account the impact that the activities of the companies have on
the local community, society, the environment and the economy as a whole. This approach contributes
to achieving the long-term goals of the group and sustainable growth, as well as to establishing
transparent and honest relationships with all stakeholders.
Each company identifies stakeholders in relation to its activities based on their level and spheres
of influence, role and effect on its sustainable development, which in turn may affect its activities, including
shareholders, stakeholders, customers, suppliers, employees, creditors, public groups and bodies of
state power and local self-government, and others.
2.1. Social and employee-related issues
As of 31.12.2025, Stara Planina Hold Plc has an average staff of 8 people, appointed under an
employment contract. The company uses external services of a law firm. All employees of the company
have higher education and qualifications that meet the requirements for the position held. During the last
calendar year, the company did not hire persons on temporary employment.
There are no arrangements for employees to participate in the issuer's capital, including through
the issuance of shares, options or other securities of the issuer.
Stara Planina Hold Plc and the companies in the group have approved human resources
management policies, mainly aimed at improving working conditions, raising qualifications, raising
incomes, social support while respecting basic human rights and carrying out other activities, that
contribute to maintaining the health and working capacity of employees.
The following policies are applied to the persons employed in the companies in the group of Stara
Planina Hold Plc:
• The requirements and standards for safe and healthy working conditions have been introduced
and applied. All companies in the group undergo a mandatory audit of the provided working conditions in
accordance with the requirements of the Bulgarian legislation. Periodically repairs and renovations of the
working premises are carried out in order to improve working conditions.
• Periodic risk assessments are carried out to identify remaining risks of accidents or illness in the
workplace and to reduce the impact of these risks on employees by taking the necessary measures in a
timely manner.
• The management of the companies in the group maintain effective social dialogue with the trade
unions, which, along with the existing collective labor agreements in force, supports the implementation
and improvement of good practices for corporate social responsibility, both for the employees themselves
and for their families.
• All companies adopt and implement annual occupational health and safety programs.
• Free medical examinations and care for all employees of the companies are provided and
regularly performed.
• Equal rights and opportunities for work and career development of employees are provided,
based solely on the qualification, personal qualities and results achieved in the work process. Direct or
indirect discrimination in employment or at work is not allowed.
• The remuneration setting system is based on uniform, objective criteria, and the system for
applying bonuses to the payment of employees is based only on the achieved good results at work.
20.
• A policy for providing social allowances to the remuneration of employees has been introduced
and is being implemented - food vouchers are provided on a monthly basis; travel expenses for distance
from the place of work to the permanent address of the employees are paid; treatment aids are provided,
as well as for personal occasions; bonuses are provided for the Easter and Christmas holidays.
• On the territory of all companies in the group are separated rest areas, conditions for sports
activities are provided, which are financed by the companies. In some of the companies, sport teams
have been formed in various team sports where each employee has the opportunity to join.
• For the employees of the companies in the group, insurances are concluded, such as life
insurance, “Accident at work” and “Accident and general illness”.
• A policy for continuous promotion of training and qualification is in place - all of the companies in
the group organize and conduct introductory trainings, courses for acquiring professional qualification
and /or trainings for raising the qualification.
• For employees willing to increase their education and qualification in a profession in the
company’s scope of activity, the larger enterprises in the Group pay 50% of the semester fees for the
respective higher education.
• Larger companies work in partnership with vocational secondary technical schools in the
respective city, providing conditions for conducting a dual form of education (work-based learning) with
students from 11th and 12th grade and provide scholarships for student education from 8th to 10th grade.
Stara Planina Hold Plc and the companies in the group annually support the development of the
local community by financing various sports and social organizations, cultural events, construction of
infrastructure facilities in partnership with the relevant municipal authorities and participate in socially
significant donations.
Stara Planina Hold Plc and the companies in the group annually support the development of the
local community by financing various sports and social organizations, cultural events, the construction of
infrastructure facilities in partnership with the relevant municipal authorities and participate in socially and
publicly significant donation campaigns. Stara Planina Hold Plc participates annually in publicly significant
donation campaigns.
The holding owns 20 % of the capital of the Medical Center for Health Prevention, which provides
early diagnosis, treatment, rehabilitation and prophylaxis for employees in the companies in the group.
Number of people employed by all enterprises of the Holding Group
In 2025 the number of employees in the Group of Stara Planina Hold Plc reported a decrease by
almost 6 % compared to the previous year.
1943
2004
2164
2124
1859
1751
2276
2318
2450
2353
2071
1946
2020 2021 2022 2023 2024 2025
Total
The three largest
enterprises
21.
Against the background of the indicated decrease in the number of employees in the Group, labor
productivity in 2025 reported a growth of 10.8 % compared to the previous 2024 and a decrease of
11.63% compared to 2023.
Labor productivity per employee in the group (BGN’000)
2.2. Human rights related issues
The corporate policy of Stara Planina Hold Plc and the companies in the group is subject to the
principle of respect for and observance of human rights. The companies support the principles of the UN
Universal Declaration of Human Rights, the International Labor Organization (ILO) Declaration on
Fundamental Rights and Rights at Work, the UN Guiding Principles on Business and Human Rights,
adopted by the UN Human Rights Council and we apply them in the established labor relations with our
employees. Any direct or indirect discrimination based on gender, race, nationality, ethnicity, citizenship,
origin, religion, education, beliefs, political affiliation, personal or social status, disability, age, sexual
orientation, marital status, property status or any other characteristics established in the Constitution of
the Republic of Bulgaria and the Law on Protection against Discrimination is prohibited in Stara Planina
Hold Plc and the companies in the group.
Stara Planina Hold Plc and the companies in the group do not allow discrimination in the
workplace, in relations with business contractors - suppliers and customers, as well as in relations with
all groups of stakeholders based on discrimination on any grounds. The company implement policies to
promote equality of women and men by ensuring their equal treatment and preventing gender-based
discrimination and violence; equal opportunities for women and men in all company activities; equal
access to all resources; balanced representation of women and men in decision-making departments.
Stara Planina Hold Plc and the companies in the group do not use or support the use of child
labor or any form of forced labor, as well as any form of human trafficking. The companies do not employ
children, and young workers are hired only for the purpose of conducting production practices in pre-
approved specialties, such as practical training under a dual system of education for the acquisition of
professional experience or in short-term internships approved by the companies. The methods of
discipline and control in the workplace categorically exclude and do not allow the use of any form of
physical, psychological or verbal violence.
In 2025, there were no reported signals or complaints due to discrimination in the workplace in
the company.
2.3. Issues related to the fight against corruption and bribery
In 2024, the Board of Directors adopted an Anti-Corruption Policy of Stara Planina Hold Plc and
the companies in the group. The Policy is part of the Group’s overall policy for sustainable development
88,0
119,6
153,1
161,1
128,5
142,3
2020 2021 2022 2023 2024 2025
22.
and is based on the principles and recommendations of the following leading global agreements:
• The United Nations Global Compact (“Global Compact”) (UN GC)
• The United Nations Sustainable Development Goals (UN SDG)
• The Organization for Economic Cooperation and Development (OECD) Guidelines for
Multinational Enterprises, which include the principles of good corporate and socially responsible
governance as a means of contributing to sustainable development.
The Policy is applied in addition to and in accordance with the Code of Ethics and Professional
Conduct, the Whistleblowing Rules and all other internal corporate rules and policies of Stara Planina
Hold AD and the Group Companies and based on the current Bulgarian anti-corruption legislation.
Stara Planina Hold Plc and the companies in the group do not allow or tolerate any form of
corruption, unethical and illegal business and professional behavior by employees and management, as
well as by all third parties related to the company's activities. Persons falling within the scope of the Policy
are not entitled to offer, give, request or accept a personal payment, gift or service in exchange for more
favorable treatment or for the purpose of obtaining a business advantage in an illegal manner, as well as
to engage in any other form of corrupt behavior.
Stara Planina Hold Plc and the companies in the group are committed to actively fighting all forms
of corruption and other manifestations of unethical and/or illegal business and professional behavior in
the environment in which it operates and reserves the right to refrain from relations with third parties when
there are reasonable suspicions of a potential manifestation of such behavior.
Stara Planina Hold Plc and the companies in the group consider all signals of corruption, including
anonymous ones, unless the signal lacks sufficient information regarding the nature of the alleged form
of corrupt behavior, which provides an objective opportunity to determine it as such within the meaning
of the Policy, or when the signals received contain obviously false or misleading statements of fact
In Stara Planina Hold Plc and the companies in the group, strict accounting is carried out, which
is subject to annual internal and external independent audit control. All transactions are assessed in
advance and are subject to approval by the relevant corporate management.
In 2025, no signals of violation of the rules of the policy or other cases of corrupt behavior were
reported in the company.
2.4. Environment
As a holding company with no independent commercial operations, Stara Planina Hold Plc has
focused its activities primarily on the management of subsidiaries and associates. The holding company
pays special attention to the environmental impact of the production of our companies. They annually
report on the assessment of the impact on the environment and the measures taken in this direction and
annually make investments in the implementation of the general corporate policy for the transition to a
cleaner and greener economy.
The main policies of the companies in the group are focused on compliance with the environmental
norms and standards for the production activities, reduction of harmful emissions from electricity
consumption through construction and commissioning of photovoltaic systems for generating energy for
their own needs and implementing other energy efficiency measures.
With regard to all new projects and investments of Stara Planina Hold Plc and the companies in
the group, including the purchase of new technical equipment, a preliminary assessment is made on the
environmental impact.
The policies of the production companies in the group require a periodic review of the
environmental impact of the energy use and are mainly aimed at:
• reducing energy consumption from conventional sources;
• increasing energy efficiency;
• use of less polluting fuels;
• implementation of renewable energy technologies.
23.
The companies in the Stara Planina Hold AD group annually report on the assessment of the impact
on the environment and the measures taken in this direction.
2.5. Information on main intangible resources
The main intangible resources of Stara Planina Hold Plc and the companies in the group are the
employees and the social activities related to them, including working conditions, continuing education,
improving qualifications and experience, which the companies annually stimulate and encourage, as well
as the introduced high-tech processes for the implementation of production operations and the annual
investments in technological renewal, modernization and improvement of production processes. In
addition, the companies in the Group have implemented software systems for resource planning (ERP),
which help the companies to rationalize their main business processes - including finance, human
resources, production, supply chain, sales and deliveries. All this contributes to higher productivity and
the creation of high-quality products that strengthens the reputation of the companies among customers
and competitors. Stara Planina Hold Plc and the companies in the group find human capital and high
technologies as key resources, contributing to the development of the holding.
Directive 2013/34/EU does not require the disclosure of information on intangible resources other
than intangible assets recognized in the balance sheet. The management of Stara Planina Hold Plc
discloses that on an individual basis as of December 31, 2025, the company does not have intangible
assets.
More information on the intangible resources of the group companies can be found in their
individual activity reports and will be presented in the annual consolidated activity report.
III. Important Events Occurred Since the Beginning of the Year
Pursuant to the Law on the Introduction of the Euro in the Republic of Bulgaria, as of January 1,
2026, the official monetary unit and legal tender in the Republic of Bulgaria is the euro. The fixed
exchange rate is BGN 1.95583 per EUR 1. The introduction of the euro as the official currency in the
Republic of Bulgaria constitutes a change in the functional currency, which does not represent an
adjusting event after the reporting date.
On March 4, 2026, the Board of Directors of the subsidiary Elhim-Iskra Plc resolved to suspend the
enterprise's operations effective March 23, 2026. Following the expiration of 19 working days from the
commencement of the suspension, and effective from the 20th working day of the layoff period,
procedures shall be initiated to terminate the employment contracts of workers and employees pursuant
to Art. 328, Para. 1, Item 4 of the Labor Code. As of the date of this report, the company's management
has concentrated its efforts on developing a strategy and a plan for more decisive restructuring of Elhim-
Iskra Plc’s operations. This initiative aims to mitigate and ultimately eliminate the production-related
losses that have persisted for a third consecutive year. The primary factor necessitating this decision is
the erosion of market share in Western Europe, driven by a prolonged downturn in industrial production
and the emergence of alternative manufacturers from Turkey, China, and India. These competitors
benefit from significantly lower energy and labor costs, enabling more competitive pricing. Furthermore,
the company has lost its most profitable markets in the CIS countries due to the military conflict in Ukraine
and the subsequent sanctions imposed by the EU.
After the date of the annual accounting closing, the management of Stara Planina Hold Plc is not
aware of any significant or material events that could impact investor interest, with the exception of global
trade tensions, the ongoing military conflict in Ukraine, and the new conflict in the Middle East. These
factors heighten risks associated with securing material supplies and the realization of finished goods.
The conflict involving the US/Israel and Iran has already triggered an increase in oil and gas prices,
which is expected to further drive up electricity costs - which in Bulgaria were already above the EU
average prior to the escalation. Military actions have effectively led to the closure of the Strait of Hormuz,
disrupting over one-third of global oil and liquefied natural gas (LNG) exports. Tanker transits have been
24.
halted for over a week, forcing several Persian Gulf producers to suspend operations. Furthermore, metal
prices are rising due to supply constraints and higher energy-related extraction and processing costs.
The rerouting of vessels and increased marine insurance premiums are extending lead times and
increasing logistics costs, impacting not only Bulgarian exporters to Asia and the Middle East but global
trade at large.
Escalating energy prices, rising raw material costs, and increased transportation and logistics
expenses resulting from the new military conflict in the Middle East directly impact the competitiveness
of the Bulgarian industry and may lead to a loss of market share.
In addition to threatening European and regional stability, the geopolitical situation places energy
and raw material supply chains at further risk. The impact of the deepening conflict, along with measures
taken at both European and national levels, will continue to influence the operations of the Group’s entities
and may necessitate adjustments to projected business results.
ІV. Expected development of the company and planned business policy
In 2025, the operations of the companies within the Stara Planina Hold PLC Group continued to be
shaped by the impact of negative factors exerting a strong influence on global trade and economic
relations. The world economy remained heavily affected by the complex geopolitical situation, which
continues to generate uncertainty and volatility in international markets. Among the primary factors
impacting business are U.S. trade policy, tensions between leading economic powers, and regional
conflicts that directly affect global supply chains, raw material prices, and demand dynamics. Tariffs
introduced by the Trump administration, covering a wide range of goods, continued to create uncertainty
for long-term contracts, particularly in the machine-building sector. Concurrently, the military conflict in
Ukraine and the escalation of tensions in the Middle East exerted additional pressure on energy markets,
leading to periodic increases in fuel and metal prices.
The ongoing uncertainty by the end of 2025 regarding economic development trends is also
reflected in the Manufacturing PMI, with data for December 2025 showing that in the Eurozone, the index
fell to 48.8 compared to 49.6 points in November, marking the fastest rate of contraction since March.
These data reflect declines in production and new orders, with Germany registering the sharpest
deterioration and its weakest performance since February 2025. Italy and Spain also remained in the
contraction zone, while France bucked the trend, marking its strongest expansion since June 2022. Data
remains concerning for the leading European economies of Italy and Germany, where manufacturing PMI
values fell to 47.9 points for Italy and 47.0 points for Germany – the lowest levels in Europe after
Switzerland. In Germany, production recorded a decline for the first time after nine months of growth,
while new orders decreased for the third time in four months, with export sales falling at their fastest rate
since December 2024. The US Manufacturing PMI for December 2024 stood at 51.8 points, also declining
compared to the previous month, indicating a drop in new orders for the first time in the past year and a
decrease in exports for the seventh consecutive month, primarily linked to trade disputes resulting from
President Donald Trump's trade policies. India's index also reported a decline from the previous month
to a value of 55.0, remaining at a significantly higher level compared to Europe and the US. In China, the
manufacturing PMI increased to 50.1 points, signaling a slight uptick in production activity supported by
a larger influx of new orders, despite a modest decline in new export sales.
On a global scale, the Manufacturing PMI towards the end of 2025 showed a continued but
weakening global economic expansion, reaching a six-month low in December with diminished business
confidence despite some regional resilience. A further expansion of the global economy was indicated by
S&P Global Market Intelligence's PMI surveys in December, albeit with the rate of growth slowing to the
weakest since June. Historical comparisons indicate that the latest PMI is broadly consistent with global
GDP growing at an annualized rate of 2.4 % in December, with a 2.8 % expansion signaled for the fourth
quarter as a whole.
25.
Prior to the escalation of the Middle East conflict in February 2026, the Eurozone Manufacturing
PMI reached 50.8 points - its highest level since June 2022 - signaling the sector's first expansion in
nearly two years. The index recorded growth, surpassing the 50.0 threshold for several leading European
economies, including Germany. However, by mid-March 2026, the deepening conflict has exerted
significant downward pressure on the European manufacturing sector, stalling the recovery observed at
the beginning of the year. Economists are now expressing growing concerns regarding a potential
recession.
The state of the German economy, which is a major trading partner of the companies in the group
of Stara Planina Hold Plc, remains a cause for concern. According to preliminary data from the German
Federal Statistical Office, Destatis, after two consecutive years of recession, the German economy
returned to growth in 2025, with the country's GDP increasing by 0.2 %. In 2023, Germany's GDP
decreased by 0.9% and in 2024 - by 0.5 %. Despite the reported minimal growth in 2025, the challenges
facing the country remain historic in scale. German industrial production contracted for the third
consecutive year, with the automotive and mechanical engineering sectors suffering significant declines.
Contributing to the poor results are higher US tariffs and the appreciation of the Euro, which makes
exports less competitive. German exports to the US fell by 7.8 %, and car sales plummeted last year. For
2026, forecasts are more optimistic, though growth is unlikely to return to significantly higher levels yet.
The German central bank, the Bundesbank, forecasts a growth rate of 0.6 % in 2026.
Despite the more optimistic expectations for 2026, the German Ministry for Economic Affairs
warned on March 8, 2026, that the risk of a severe industrial downturn has increased significantly due to
the war in the Middle East - a development not yet fully reflected in current economic indicators. According
to data released by the Federal Statistical Office (Destatis) on March 8, 2026, industrial orders in January
fell by 11.1% month-on-month on a seasonally and calendar-adjusted basis, breaking a trend of four
consecutive monthly increases. Industrial production also declined, unexpectedly dropping by 0.5 % in
January compared to the previous month, diverging from analyst forecasts of a modest 1.0 % increase.
In the World Economic Outlook report presented on January 19, 2026, the IMF forecasts global
GDP growth of 3.3 % in 2026 (an upward revision of 0.2 percentage points from the previous October
estimate) and 3.2 % in 2027 (unchanged from the October forecast). The Fund expects growth of 3.3%
for 2025, which also exceeds the October estimate by 0.1 percentage points. For the Eurozone, which
Bulgaria joined on January 1, the IMF projects a growth rate of 1.7% for the current year (a 0.1 percentage
point increase from October) and 1.3% next year (unchanged from the October forecasts).
Meanwhile, earlier in December 2025, the international credit rating agency Fitch Ratings
announced that it is maintaining Bulgaria's credit rating unchanged at 'BBB+'. However, it noted that
“Bulgaria's fiscal position has deteriorated in recent years due to increased social spending, significant
public sector wage hikes, and delays in implementing reforms.” Fitch forecasts the country’s budget deficit
to rise to 3.2% in 2026 and to 4.3% in 2027 (factoring in Bulgaria’s commitment to higher defense
spending). “More broadly, institutional constraints and political instability have slowed progress on
structural reforms relative to peers, despite the successful completion of the Eurozone accession
process. Bulgaria is lagging in the absorption of EU funds under the Recovery and Resilience Facility
(RRF), as well as regular cohesion funds. Delays could create challenges for disbursements, as the
implementation deadline is the end of August 2026.”
Against this background, the consolidated sales revenues of the Group of Stara Planina Hold Plc
on an annual basis reached BGN 276.4 million (EUR 141.3 million) whereby sales revenue reported an
increase by 3.8 % compared to the 2024 sales and a decrease of by 27.06 % compared to reported sales
in 2023.
26.
Net sales revenue
(Quarterly, BGN’000s)
For 2025, Stara Planina Hold Plc reports a net profit of BGN 5.2 million (EUR 2.7 million), which
represents a decrease of 19.86 % compared to the reported net profit in the amount of BGN 6.5 million
(EUR 3.3. million) for the previous year. Despite the reported decline, we are confident that for the 29th
consecutive year, will be preserved the tradition for distribution of dividend to the shareholders of the
holding company.
The formation of the holding company's profit is a process highly dependent on the condition and
sentiment of our markets. The Group's expected gross profit for 2025 amounts to BGN 20 185 thousand
(EUR 10 320 thousand), representing an 58.15 % increase compared to the reported consolidated gross
profit for the previous year.
The level of our exports is directly dependent on the markets where the group operates—primarily
within the European Union. In 2025, we largely succeeded in maintaining our core markets, while the
expectations and forecasts of our partners in the country, Europe, and globally continue to be shaped by
a high degree of uncertainty at this stage.
The trend of ongoing decline in the Bulgarian industry is confirmed by data from the National
Statistical Institute, which indicate that the Industrial Production Index in January 2026 decreased by
2.6% compared to the previous month, while compared to January 2025, a decrease of 8.6% was
recorded. After more than two years of the index showing negative year-on-year values, with growth
reported only in September and November 2024, the industrial production index in Bulgaria continues its
downward trend for the fourteenth consecutive month and for the 35th out of the last 37 months.
Based on the performance results from the beginning of the year, we confirm our forecast that
consolidated sales for the first quarter of 2026 will reach EUR 37.2 million. This would represent an
increase of approximately 6.7 % compared to the same period in 2025 and a decrease of approximately
3.4% compared to the first quarter of 2024. In light of the upcoming restructuring of our subsidiary, Elhim-
Iskra Plc, and the subsequent adoption of a new business plan for 2026, we are currently revising
downward our forecast for the first half of 2026. By excluding the projected operating revenues from
Elhim-Iskra Plc for the second quarter of 2026, we anticipate that the consolidated sales revenues of
Stara Planina Hold Plc for the first half of 2026 will show a decrease of approximately 3% compared to
the same period in 2025. The forecast expectations of Stara Planina Hold AD for the second half of the
year and, accordingly, for the entire year will be announced additionally.
Our forecasts may not be achieved due to the influence of external factors. The EU economy
continues to be exposed to risks, negatively affected by factors such as new challenges in trade policy
with the US, energy prices and security, weaker demand in external markets, as well as geopolitical
factors related to military conflict in Ukraine and the Middle East tensions. The effect of the deepening
military conflict between the US/Israel and Iran, as well as the measures taken at the European and
national levels, will impact operations and may lead to adjustments in the expected business results.
0
20000
40000
60000
80000
100000
2023 2024
2025 г.
27.
In 2025, the investments of our enterprises reached BGN 23.8 million (EUR 12.17 million),
representing a year-on-year growth of 35.86 %. These funds were primarily allocated to ongoing
technological modernization, the introduction of high-margin products and manufacturing processes,
asset acquisition, and innovations for the green and digital transition, as well as to enhancing labor
productivity and the corresponding increase in employee compensation.
Investments (Quarterly, EUR’000s)
* forecast
The presented graph does not include planned investments by the subsidiary Elhim-Iskra Plc.
For 2026, in view of the ongoing high level of national and global uncertainty, we plan a significant
reduction in investments of over 50%. The planned investments are primarily intended for new
technological equipment and reconstruction, as well as for new technologies, automation, robotics, and
the digitalization of processes. Furthermore, they will support the continued green transition and the
expansion of production capabilities aimed at enhancing productivity and product quality, reducing unit
costs, optimizing the production process, and incentivizing employees.
The companies plan to participate in procedures under existing and new European operational
programs aimed at developing human resources and increasing competitiveness.
Sustainable achievement of good financial results with expected sales will continue to be a key
task in order to guarantee shareholders' investments and their profitability.
V. Research and Development Activity
As a holding company, Stara Planina Hold Plc does not perform independent commercial
operations. The holding company provides support to the enterprises in the Group in the research and
development activity since it views this activity as an integral part of the annual business plans of the
companies.
The companies have departments and units developing operations for process improvement, and
research and development of new products. In 2023 as well, the main objectives of the units carrying out
R&D activities were focused on meeting the growing requirements of the customers by developing new
types of products.
VI. Company shares
1. Own shares. Buy-back
In 2025 Stara Planina Hold Plc has not acquired its own shares. During the reporting year the
company has not sold own shares.
As of 31.12.2025 Stara Planina Hold Plc owns 225 337 own shares, representing 1.07 % of the
capital of the holding company. 50 000 shares are also hold by the subsidiary company SPH Invest Jsc.
0
1000
2000
3000
4000
5000
1Q 2Q 3Q 4Q
2024 г. 2025 г. 2026 г.
28.
Pursuant to the provision of Art. 187a, Para. 3 of the Commercial Act, the exercise of any rights,
including the right to vote, on these 225 337 shares shall cease until their transfer.
2. Changes in the company share prices
The shares of Stara Planina Hold Plc are traded on the main market, “Standard” segment of the
Bulgarian Stock Exchange. BSE code: SPH.
Stara Planina Hold Plc has a free float of 59.35 % and its shares are among the most actively
traded on the BSE-Sofia where liquidity continues being a major issue.
Closing price per share (in BGN) at year-end
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
3.95
6.49
8.01
6.55
4.76
5.45
10.10
9.30
10.30
9.00
9.99
Share price over Y2025
Source: BSE-Sofia AD
------- closing price in EUR
The graph shows the price movement of the shares of Stara Planina Hold Plc on the Bulgarian
Stock Exchange for the period 01.01.2025 – 31.12.2025.
• Start price: EUR 4.4365 (01.01.2025)
• Last price: EUR 5.1129 (31.12.2025)
• Max price: EUR 5.1640 (23.09.2025)
• Min price: EUR 3.9435 (11.04.2025)
• Value change: EUR +0.6764
• Percentage change: +15.2463 %.
The market capitalization of the holding as of 31.12.2025 is EUR 107 370 900.
Market capitalization (BGN million)
0
50
100
150
200
20152016201720182019202020212022202320242025
29.
Four of the companies in the investment portfolio of the holding company are public companies
and their market capitalization is being set by the stock exchange. This allows for the ratio between the
market capitalization of the holding company and the market capitalization of its holdings to be calculated.
Traditionally the price of the holding is lower than the total price of its holding.
3. Dividend policy
Stara Planina Hold Plc follows a policy of annual dividend distribution. The Board of Directors
assumes that at the annual general meeting of the shareholders, the tradition of distributing part of the
financial profit for paying out dividends will be continued.
Distributed dividends (BGN million)
Every year since its incorporation Stara Planina Hold Plc has paid out dividends. The total amount
of the distributed dividends up to and including 2024 is over BGN 62.15 million. The initial investment in
the holding company has a dividend coverage of 35.5 times.
Stara Planina Hold Plc pays out dividends in accordance with the requirements of the Public
Offerings of Securities Act and the other applicable regulations – under an agreement with the Central
Depository and through the branch network of International Asset Bank AD in regional cities.
Gross Dividend Per 1 Share for the Last 10 Years in BGN
0,82
0,16
0,19
0,21
0,23
0,23
0,23
0,24
0,24
0,25
0,26
0,18
0,25
0,27
0,29
0,32
1,02
2,10
4,27
4,53
4,75
5,04
5,09
5,16 5,16
6,18
6,54 6,54 6,54
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2020 2021 2022 2023 2024
0,20
0,22
0,23
0,24
0,25
0,25
0,30
0,32 0,32 0,32
2015 г. 2016 г. 2017 г. 2018 г. 2019 г. 2020 г. 2021 г. 2022 г. 2023 г. 2024 г.
Брутен дивидент на 1 бр. акция за последните
10 години в BGN
30.
VIІ. Branches
Stara Planina hold Plc does not have any registered branches in the country and abroad.
VІІI. Financial instruments used by the company
1. Accounting policy
In compliance with the accounting legislation in force in Bulgaria, since the beginning of 2003 Stara
Planina Hold Plc has been applying the International Financial Reporting Standards.
These annual financial statements are prepared in compliance with the International Financial
Reporting Standards adopted by the European Union. The company continues applying the same
accounting policy as for the preparation of the 2025 annual financial statements.
The accounting policy of the Company is described in the Explanatory Notes presented together
with the Annual Financial Statements.
In accordance with the accounting policy applied, investments in subsidiaries and associates are
reported under the historical cost method and the capital growth of these companies is not reflected in
the separate statements of Stara Planina Hold Plc.
Major business operations of the company are sale, purchase and management of shareholdings
in companies. Main part of the 2025 revenues is formed by dividend revenues.
This current income is mainly used for financing the companies in the holding's portfolio, meeting
the commitments under the adopted dividend policy, as well as for administrative needs.
In the reporting year, the accounting policy of the company has not been changed compared to the
previous reporting period. No errors have been found regarding both the current and previous reporting
periods. Therefore, there are no adjustments due to errors.
3. Financial instruments
The most essential part of the financial instruments used by the company is taken by the holdings
of Stara Planina Hold Plc in the subsidiaries and associates.
Financial instruments of the Company are detailed in the Explanatory Notes presented together
with the Annual Financial Statements.
Typical for the investments of Stara Planina Hold Plc (BSE code SPH) in subsidiaries and
associates is that four of them are public companies with their shared being admitted to trading on the
Bulgarian Stock Exchange: M+S Hydraulic Plc MSH, Hydraulic Elements and Systems Plc HES, Elhim
Iskra Plc ELHM and Bulgarian Rose Plc ROZA.
Next, in terms of significance, come the loans granted to the companies in the portfolio of Stara
Planina Hold Plc. They are filed as per their nominal value as of the date of occurrence. In accordance
with the IFRS 9, loans are classified as financial instruments reported at amortized value. At the end of
the reporting period, the management of the company has made a valuation of the expected credit losses
under these receivables and has found that no impairment must be carried out and therefore no such
impairment has been performed.
Their distribution as of 31.12.2025 is detailed in Section Х, item 9 of the Report.
The Financial Resources Management Policy of Stara Planina Hold Plc is focused mainly in the
management of the companies in the portfolio. The free cash amounts are directed towards financing the
companies.
31.
4. Liquidity
Considering the specifics of the activity, a major part of the incoming cash flows is generally formed
by dividends received and the outgoing cash flows are used for payment of dividends to the shareholders
and for covering administrative overheads related to its maintenance.
It is a long-term corporate governance policy of Stara Planina Hold Plc to use the available cash
resource to fund projects of its portfolio companies.
The company has not undertaken any obligations to incur capital expenses at the end of the
reporting period.
5. Risk Exposition of the Company
Market risk comprises three types of risk:
Currency risk – the risk that the value of a financial instrument will fluctuate due to changes in the
currency exchange rates
Interest risk – the risk that the value of a financial instrument will fluctuate due to changes in the
market interest rates
Price risk – the risk that the value of a financial instrument will fluctuate as a result of changes in
the market prices.
As of 31.12.2025 Stara Planina Hold Plc does not have any financial instruments in foreign
currency. Interest bearing financial instruments of Stara Planina Hold Plc are primarily the granted loans.
All of them are with fixed annual interest rate of 2.5 – 4 %.
Investments in subsidiary and associated enterprises are reported and presented as per the
acquisition price method. The nature of the financial instruments used by the company indicates that
market risk does not have a significant effect on the financial results.
The risk of changes in the market prices of equity instruments arises from equity stocks classified
as reported at fair value through other comprehensive income (FVOCI), held for long-term investment.
Credit risk – Stara Planina Hold Plc has granted loans to companies in its portfolio which have
longstanding and unblemished credit reputation which minimizes the credit risk.
Due to the nature of the financial instruments used by Stara Planina Hold Plc, the liquidity risk and
the interest risk of the cash flow are also kept at a minimum.
ІX. Corporate Governance Declaration
1. National Corporate Governance Code
Stara Planina Hold Plc implements its own long-term Good Corporate Governance Program. The
Program provides for the implementation of a number of initiatives in several main areas, the
implementation of which is subordinated to its priority objectives: responsibility and independence of the
corporate Board, shareholders' rights protection; ensuring equal treatment of each shareholder (including
minority and foreign shareholders); ensuring recognition of the rights of the parties interested in the
management and sustainable development of the company and promoting the co-operation with them;
ensuring prompt and accurate disclosure of the statutory required information related to Stara Planina
Hold Plc regarding important issues of the financial standing, activity results, ownership and management
of the company; supporting the strategic management of Stara Planina Hold Plc, the efficient control over
the activity of the Board of Directors and its accountability to all stakeholders.
On 30.10.2007 the Board of Directors of Stara Planina Hold Plc considering the important role of
modern corporate governance to support the sustainable development of the national economy of the
Republic of Bulgaria and lead by its willingness to continue implementing the internationally recognized
good corporate governance standard, resolved that the holding company will carry out its activity in
compliance with the principles and provisions of the National Corporate Governance Code.
32.
2. Implementation of the Code
The management of Stara Planina Hold Plc applies the National Code based on the “comply or
explain” principle. The application of this principle is based on the Recommendation of the EU
Commission on the quality of reporting in corporate governance.
The main direction when executing the commitments of the code was to bring the internal acts of
the company and its overall activity in accordance with the changing legal regulations. All of the internal
regulations listed below may be found in the Corporate Governance section on the company website.
Stara Planina Hold Plc participates in discussions of draft amendments and supplements or
projects for new acts in the field of public offering of securities presented by the competent authorities.
As a member of the National Corporate Governance Committee, Stara Planina Hold Plc participates
through its representative in the process of discussion and adoption of amendments to the National Code
in 2024.
Chapter One
Corporate Boards
The Board of Directors of Stara Planina Hold Plc directs and controls the company in a responsible
and independent manner according to the vision, objectives and strategies of the company and in the
best interest of all shareholders and stakeholders. It monitors the results of the company's performance
and initiates changes in the management of its operations, when necessary. The Board of Directors treats
all shareholders equally, acts in their best interest and in a diligent manner. The members of the Board
of Directors are guided in their activities by the generally accepted principles of integrity and managerial
and professional competence. In 2024, the Board of Directors adopted a new Code of Ethical and
Professional Conduct of Stara Planina Hold Plc and the companies in the Group, as well as an Anti-
Corruption Policy, which are part of the overall sustainable development policy and are prepared based
on the principles and recommendations of the United Nations Global Compact ("Global Compact") (UN
GC), the United Nations Sustainable Development Goals (UN SDG), the United Nations Guiding
Principles on Business and Human Rights, and the Organization for Economic Co-operation and
Development (OECD) Guidelines for Multinational Enterprises.
The Board of Directors promotes the implementation and monitors compliance of the adopted
principles for sustainable development by the companies in the group; provides and controls the
establishment and proper functioning of a risk management system, including risks related to information
security, environmental risks, risks along the value chain; ensures and controls the integrated functioning
of the accounting, financial reporting and internal control systems; gives guidelines, approves and
controls the strategy, business plans implementation of the companies in the Group, the material
transactions as well as other activities, required by the company's Rules of Procedure.
The Board of Directors reports on its activities to the General Meeting of Shareholders. In case of
proposals for election of new members of the Board of Directors, the principles of compliance of the
competence of the nominees with the nature of the company’s activities are observed.
The contracts for assignment of the management, concluded with the members of the Board of
Directors, define their responsibilities and tasks, the criteria for the amount of their remuneration, their
obligations for loyalty to the company and the grounds for dismissal.
The number of members of the Board of Directors is defined by the company’s Articles of
Association. The composition of the Board is structured in a way that guarantees the professionalism,
impartiality and independence of its decisions related to the management of the company. The Board of
Directors has allocated the tasks and responsibilities between its members. The Company has adopted
general rules for the members of the Board of Directors, which define the Board's functions and duties,
the procedures for election and dismissal of members, as well as the requirements for adequate
knowledge and experience. Annually, Stara Planina Hold Plc organizes and conducts training sessions
in various areas related to the business activities and competitive positions of the group companies, with
the participation of members of the Board of Directors.
33.
The election of board members takes place through a transparent procedure that provides timely
and sufficient information on the personal and professional qualities of the nominees. The members of
the Board of Directors are elected by the general meeting of shareholders, and information regarding
their education, professional qualifications and experience is presented together with the written materials
for the meeting and published on the company's website.
The independent directors control the executive management and participate effectively in the
company's performance in accordance with the shareholders’ interests and rights. The Chairman of the
Board of Directors is an independent director. The members of the Board of Directors have appropriate
knowledge, experience and are regularly informed about new trends in the field of corporate governance
and sustainable development. After their election new members are acquainted with the main legal and
financial issues related to the company's performance. Enhancing the competence and qualification of
the Board members is a constant practice and their training is encouraged. The succession of mandates
ensures efficient operation of the company and compliance with the legal requirements.
The members of the Board of Directors are male and one legal entity, which is also represented by
a male. The Company applies a selection procedure for Board candidates based on a comparative
assessment of each candidate's qualifications, utilizing clear and objective criteria applied in a non-
discriminatory manner throughout the entire process. As of the end of the reporting year, no female
candidacies for elective positions within the management body were received by Stara Planina Hold Plc.
The Board of Directors regularly reviews the composition and structure of the Company’s management
body. Management’s analysis concludes that the current composition results from the core business
activities of the majority of the group companies, the requirement for corporate management to possess
specialized knowledge, qualifications, and experience in the mechanical engineering industry alongside
finance and economics, and the traditionally low representation of women in engineering and technical
sciences, coupled with a domestic shortage of such human resources. Through its recruitment policies,
the Company’s management strives to attract qualified, competent, and responsible individuals to all
positions, including elective roles within the management body, regardless of gender.
The members of the Board of Directors have sufficient time to perform their tasks and duties. The
Rules of Procedure of the Board of Directors define the maximum number of companies outside the
portfolio of Stara Planina Hold Plc where Board members may hold management positions, as well as
the number of consecutive mandates of the independent members.
The amount and the structure of the remuneration to the members of the Board of Directors are
defined by the General Meeting of the Shareholders. They take into account the responsibilities and
contribution of each member, the possibility of selection and retention of qualified and loyal members, the
need to align the interests of members with the long-term interests of the company. The remuneration of
the independent members of the Board of Directors is permanent (fixed). Pursuant to a decision of the
Shareholders, it may also have a variable part. Variable remuneration is linked to clear criteria and
measurable indicators regarding the company's performance, as defined in the Remuneration Policy for
the members of the Board of Directors. The total amount of variable remuneration is based on a
combination of performance evaluations of the individual Board member, the Board of Directors as a
whole, and the company's overall operational results.
The General Meeting of Shareholders held on 20 May, 2021 adopted a new Remuneration Policy
for the members of the Board of Directors which is consistent with the amendments to the regulation and
aims to support the long-term business objectives of the company and promote behavior that supports
the value creation for shareholders, while providing competitive remuneration sufficient to attract and
retain directors with qualities necessary for the successful management and development of the
company.
In accordance with the requirements of Art. 11, Para. 3 and Para. 4 of Ordinance No. 48 of the
Financial Supervision Commission (FSC), the Company’s Board of Directors reviewed the Remuneration
Policy for the members of the Board of Directors in 2025. The Board decided that the policy complies
with the requirements of FSC Ordinance No. 48 and is built upon principles that ensure alignment with
34.
the Company’s size, internal organization, and the nature, scope, and complexity of its activities;
therefore, no grounds or necessity for amendments were identified. The agenda of the Regular Annual
General Meeting of Shareholders, held on June 5, 2025, included a separate item for the review of the
Remuneration Policy for the members of the Board of Directors, and the General Meeting of Shareholders
adopted no changes to the Policy.
The Remuneration Policy defines the principles for setting the amount and the structure of the
remuneration and specifies the particular additional incentives which are based on clear criteria and
indicators related to the results of the company and the economic group. In the Remuneration Policy,
variable remuneration and performance are linked to pre-specified performance-related criteria and
include measurable standards that highlight the long-term interests of the company and shareholders.
None of the members of the Board of Directors has been granted variable remuneration in the form of
shares, stock options or other financial instruments. Information on the remunerations of the members of
the Board of Directions is disclosed in an annual report which is part of the Annual Financial Statements
of the company. Shareholders and stakeholders have easy access to the adopted policy for defining the
remuneration of the board members and the report on its implementation which are published on the
company's website.
The Board of Directors of Stara Planina Hold Plc has adopted procedures to avoid and disclose
conflicts of interest which are published on the company’s website. They impose obligations for the
members to avoid and not to admit actual or potential conflicts of interest and, if necessary, to immediately
disclose conflicts of interest and provide shareholders with access to information on transactions between
them and the company or any related party. On the other hand, each conflict of interests in the company
should be disclosed to the Board of Directors.
Stara Planina Hold Plc does not and will not allow transactions between the company and members
of the Board of Directors and any related parties.
The Company has an approved Information Disclosure and Investor Relations Policy, which is
published on its website alongside all corporate documents. All corporate acts are regularly reviewed by
the Board of Directors, as well as upon changes to the relevant regulations.
Chapter Two
Audit And Internal Control
In accordance with the requirements of the current legislation and based on the criteria defined
thereof, Stara Planina Hold Plc has established an operating audit committee with members that meets
the legal requirements and specific needs of the company. The audit committee supervises the internal
audit activities and monitors the overall relations with the external auditor, including the nature of non-
audit services provided by the latter. Its activities are aimed at increasing the efficiency of the financial
reporting processes, the internal control and risk management systems. The specific areas in which the
Audit Committee supports the activities of the Board of Directors are regulated in the Rules of Procedure
of the Audit Committee, published on the company's website. In 2025, upon the Audit Committee’s
proposal, the Board of Directors adopted new Rules of Procedure for the committee, updated and aligned
with the requirements of the current regulations and best corporate practices.
The Board of Directors provides the necessary resources for the Audit Committee to perform its
functions, as well as access to the company's documents and assets; it approves the Audit Committee
Charter, which clearly defines its functions, rights, and relationships with the management bodies; it is
responsible for the establishment and functioning of the internal control and risk management systems,
while the Audit Committee monitors their effectiveness and reports any identified weaknesses to the
Board of Directors. The Board of Directors and the Audit Committee collaborate in the preparation of
internal acts and procedures.
The Audit Committee prepares a written recommendation, based on which the corporate board
proposes to the General Meeting the election of an independent auditor to verify and certify the annual
financial statements. In the proposals for election of an external auditor, the rotation principle is applied
in accordance with the requirements of the relevant regulation.
35.
The Board of Directors, with the assistance of the Audit Committee, ensures compliance with the
applicable legislation in terms of the independent financial audit. The company has developed an internal
control system that ensures the effective functioning of the reporting and disclosure systems in order to
identify the risks associated with the company's activities and support their effective management.
Chapter Three
Shareholders' Rights Protection
The corporate Board of Stara Planina Hold Plc ensures the equal treatment of all shareholders,
including minority and foreign shareholders, and is responsible for the protection of their rights. The Board
facilitates the exercising of these rights within the limits permitted by the applicable legislation and in
accordance with the company's internal rules. The corporate Board has provided information to all
shareholders about their rights, the financial results of the company and corporate events through the
information disclosure system and the company's website.
All shareholders have access to information about the rules under which General meetings are
convened and held, including voting procedures. The company provides sufficient and timely information
on the date and venue of the General meeting, as well as detailed information on the issues to be
discussed and decided on at the meeting. The corporate Board ensures the right of all shareholders to
express their opinion, as well as to ask questions at the general meeting. A database is maintained with
contacts of shareholders holding 5 % or more than 5 % of the company's capital.
The Company’s Board of Directors ensures that all shareholders are informed of their rights through
information published in a dedicated section of the Company’s website, the Articles of Association, other
internal corporate acts, and the notice for each specific General Meeting of Shareholders.
The sessions of the General Meeting of Shareholders are convened and held in accordance with
regulatory requirements, the Articles of Association, and the Rules for Convening and Conducting
Regular and Extraordinary Sessions of the GMS of Stara Planina Hold Plc.
The invitation for the general meeting of shareholders contains the information required under the
Commercial Act and the Public Offering of Securities Act, as well as additional information on exercising
the right to vote and the possibility to add new items to the agenda under Art. 223a of the Commercial
Act.
The invitation and the materials for the general meeting of the shareholders of Stara Planina Hold
Plc are announced through the X3 News media to the public, the Financial Supervision Commission and
the regulated securities market. Pursuant to the legal requirements the company announces a notice for
holding a general meeting of the shareholders and for dividend payment, upon a decision adopted by the
GMS, also through the corporate actions announcement system of the Central Depository. After
presenting the invitation and the materials for the general meeting of shareholders, they are available on
the company's website. The texts of the written materials related to the agenda of the General Meeting
are particular and clear and do not mislead shareholders. All proposals regarding major corporate events
are presented as separate items on the agenda of the General Meeting, including the profit distribution
proposal.
Shareholders with voting rights have the opportunity to exercise their voting rights at the General
Meeting of the company in person, through representatives/proxies or through correspondence. As part
of the materials for the General Meeting of Shareholders, the Board of Directors presents a sample power
of attorney and Proxy Voting Rules as well as a sample voting through correspondence and the Rules
for voting through correspondence.
Rules for Organization and Holding Regular and Extraordinary Sessions of the General Meeting of
Shareholders have been adopter in order to guarantee equal treatment of all shareholders and the right
of each shareholder to express opinion on the items in the agenda of the meeting. The rules and
procedures for holding a general meeting of shareholders do not complicate or increase the cost of voting
unnecessarily. These procedures encourage the participation of shareholders in the general meeting but
do not provide the possibility of remote attendance by technical means, insofar as this would make
36.
holding of the meeting more expensive. Proxy Voting Rules have been adopted. Following the adopted
amendments to the Articles of Association of the company in 2021, the right to vote at the General
Meeting of Shareholders may be exercised through correspondence based on a decision of the Board of
Directors. Proxy Voting Rules and Rules for Voting Through Correspondence have been adopted and
are published on the company's website. All members of the corporate Board attend the general meetings
of the shareholders. When necessary, they assist shareholders with the inclusion of additional items in
the agenda of the General Meeting and guarantee the right of the shareholders to be informed on the
adopted resolutions.
The Rules for Organizing and Holding General Meetings provide a mechanism for assisting the
shareholders who have exercised the right to include additional items and propose resolutions on issues
already included in the agenda of the meeting. The resolutions of the General Meeting are published on
the company’s website for a period of 10 years. The company has not issued shares of a different class.
The company does not have shareholders with control rights. All shareholders of Stara Planina Hold Plc
are treated equally.
The Company has an appointed Investor Relations Director (IRD). The Board of Directors consults
with the IRD and provides guidance on the long-term investor relations strategy, approving specific
operational goals and initiatives; coordinates with the IRD to define the communication policy, the policy
for protecting shareholder rights, and the assurance of equitable treatment for all shareholders; ensures
an appropriate administrative and organizational structure is in place to facilitate the effective
performance of the IRD’s duties; oversees the integrated functioning of financial reporting and disclosure
systems; reviews proposals for amendments to internal corporate instruments submitted by the IRD and
may commission motivated reports on specific cases or to clarify new regulatory requirements or National
Corporate Governance Code (NCGC) recommendations; discusses with the Investor Relations Director
and provides guidance regarding the publication of specific information for shareholders, investors, and
stakeholders on the corporate website, including standard forms, document templates, and other
materials.
Increasing the trust of shareholders, investors and stakeholders has been one of the major
commitments of the corporate Board. In this regard, the company is continually strengthening its position
of a stable institution. In 2025, we continued endorsing and applying various ways to disclose current
information on the financial and economic standing of the company and important corporate events as
well as their promotion. All shareholders of Stara Planina Hold Plc are treated equally.
Chapter Four
Disclosure of information related to sustainable development, financial reporting and other
corporate information
Stara Planina Hold Plc has approved a policy and an information disclosure system in accordance
with legal requirements. It guarantees equal access to information to all addressees (shareholders,
stakeholders, investment community) and prevents inside information abuse. The holding has internal
rules for preparation of the annual and interim reports and rules for financial and non-financial information
disclosure, including information related to sustainable development. With regard to any information that
Stara Planina Hold Plc discloses, there is a connection between its various components. The company
annually discloses a non-financial statement on a consolidated basis where detailed information on the
activities and initiatives of all companies in the holding's portfolio in the field of non-financial reporting is
provided.
The company maintains its own website with an English version, providing information about the
company, the management bodies, the statutory acts and the adopted policies related to the activities
and functioning of the company, the shareholder structure and the companies in the portfolio of Stara
Planina Hold Plc. The corporate governance section includes internal regulatory documents, information
on the shareholders' rights and their participation in the general meeting, financial statements for the last
10 years, information for dividend payments as well as personal data protection and whistleblowing
information. A special section includes materials on forthcoming general meetings of the shareholders,
37.
information on the resolutions adopted at the general meetings. Data on the company's initiatives,
auditors and media publishing news about the holding company is publicly available. The News section
is particularly comprehensive, providing information on the company’s periodic publications, upcoming
events, and all material information regarding the holding's activities. Annually, the Company adopts and
publishes a corporate calendar of upcoming events on its website.
The Q&A system for shareholders, stakeholders via electronic means proves its efficiency. A
procedure has been provided for receiving dividends from previous years by the shareholders. We
continue the practice of sending prompt replies to letters and inquiries from shareholders, including to
those received by e-mail and their storage in a register duly kept by the Investor Relations Director. A
practice has been introduced for the answers to any questions, regardless of their nature, to include a
detailed explanation of the shareholders’ rights. The procedure for shares inheritance is described in
detail. Each shareholder who addresses the holding on a different occasion is being provided with
comprehensive information about his rights and receives information on various issues regarding the
business activities and the current standing of the company, including the historical prices of the shares
of Stara Planina Hold Plc on the stock exchange. The company uses the X3 News media which provides
equal and timely access to the relevant information to all users.
Any regulated information regarding the company, its management, its corporate boards, its
operational activities, its shareholder structure is disclosed in a timely manner and published on the
website. No violations of disclosure regulations or deadlines have been identified. Reports and
notifications regarding the financial position are published on the Company’s website immediately after
being disclosed to the FSC, the Bulgarian Stock Exchange (BSE), and the public, enabling oversight by
shareholders, investors, and all stakeholders. Another form of oversight regarding the information
disclosure process is exercised by the members of the Board of Directors over the Director of Investor
Relations.
When applicable, the annual consolidated report presents information pursuant to Article 8 of the
Taxonomy Regulation, including the part of turnover resulting from products and services related to
economic activities qualified as environmentally sustainable, the part of capital expenditure for such
activities and the part of operating expenses related to assets or processes related to economic activities
that qualify as environmentally sustainable.
The information disclosure system ensures full, timely, accurate and understandable information
which provides a possibility for objective and informed decisions and assessments.
Chapter Five
Stakeholders. Sustainable Development
The corporate governance of Stara Planina Hold Plc ensures effective interaction with the
stakeholders, identified by the company as such. The stakeholders’ policy complies with the legal
requirements in accordance with the principles of transparency, accountability and business ethics. A
policy has been developed that takes into account the stakeholders’ interests that ensures their attraction
and guarantees the balance between the development of the company and the environment where it
operates. Effective relations are maintained with the stakeholders. The company periodically informs
shareholders, stakeholders and the investment community about various important issues. The internal
rules were supplemented by commitments regarding the provision of comprehensive information and the
interaction of the company with its shareholders - institutional investors, as well as with the Bulgarian
Stock Exchange – Sofia Plc, which is a regulated market of financial instruments and with the investment
intermediaries on this market. The company’s shares are not admitted to trading in a different jurisdiction.
Stara Planina Hold Plc takes active part in various forms of joint collaboration with state institutions
and non-government organizations engaged with corporate governance in the country. Throughout the
reporting year we, once again, recognize the benefit from our co-operation and membership in the
Bulgarian Industrial Capital Association. The Investor Relations Directors of the holding and the public
subsidiaries are members of the Association of Bulgarian Investor Relations Directors.
38.
The control related to the information disclosure process on the part of Stara Planina Hold Plc is
multidirectional. No violations of the provisions and deadlines for disclosure have been found so far. The
financial reports are published on the website of the holding immediately after they are presented to the
regulating authority and the public, which provides a possibility for control by the shareholders, investors
and all stakeholders. Another form of control in terms of the information disclosure process is exercised
by the members of the Board of Directors over the Investor Relations Director.
The overall policy of the Board of Directors of Stara Planina Hold Plc regarding the management
of the companies in the economic group is in accordance with the principles of socially justified and
environmentally friendly economic development. The corporate Boards of the companies in the group
annually develop and approve business plans of the enterprises which envisage the specific actions and
policies regarding the sustainable development of each company. In their investment programs, projects
aimed at the environmentally friendly development of the respective company are set and implemented
annually, as well as social projects aimed mainly at employees.
The Board of Directors of Stara Planina Hold Plc has approved Whistleblowing Rules relevant for
the company and for the subsequent actions thereto. The company has created an internal channel
through which a signal can be submitted - in writing or verbally. A form for registering a signal for
submitting information on violations according to the Whistleblower Protection Act can be found on the
company's website, on the website of the Commission for Protection of Personal Data or can be provided
in the company's office. Signals are submitted to the responsible employee, designated by a decision of
the company's Board of Directors. Stara Planina Hold AD maintains on its website up-to-date information
under Art. 12, para. 4 of Whistleblower Protection Act which is also available at the company's office.
3. Assessment of the Implementation of the Code
Applying the National Corporate Governance Code is a process to continue throughout the current
year as well.
The review of the Code in relation to the implementation of the underlying “comply or explain”
principle leads to the conclusion that the company complies with the Code as a whole.
The Company discloses information regarding its current financial and economic standing, as well
as its overall activities, including the work of the Board of Directors; this serves as an objective
prerequisite for increasing the confidence of shareholders and stakeholders in the Company's
management.
The practice of updating internal corporate acts in accordance with changes in the regulatory
framework has been maintained. The Company’s activities are in full compliance with the latest 2024
update of the Corporate Governance Code.
Implementation of the recommendations in the Code is responsibility of the corporate Board. In this
sense, applying particular texts of the Code does not depend on the corporate Board, insofar as the
appointment of members of the Board of Directors is a right and prerogative of the shareholders.
In conclusion, we can summarize that the activities of the Board of Directors of Stara Planina Hold
Plc throughout 2024 complied with the National Corporate Governance Code.
4. Description of the Internal Control and Risk Management System
The internal control and risk management systems of the holding ensure effective reporting and
information disclosure, identification of the risks accompanying the activity of the company and their
effective management. Their purpose is to ensure compliance between legal and regulatory requirements
and the proper functioning of internal processes. These systems are established in accordance with the
specifics of the company - its activities, financial characteristics, industry, needs and resources.
The Board of Directors has the primary responsibility for the internal control and risk management
systems. The Board performs both a management and guidance function as well as ongoing monitoring,
assessing whether the systems are suitable for the company in a changed environment, whether they
operate as well as expected and whether they are being adapted periodically to the changed conditions.
39.
The management’s responsibility includes implementing an internal control system to prevent,
detect and correct errors and misstatements resulting from the actions of the accounting system. In this
regard, the management observes the following basic principles in its activity:
o Adherence to a specific management and accounting policy, disclosed in the financial
statements;
o Performance of all operations in accordance with the laws and statutory regulations;
o Recording all events and transactions in a timely manner, with the exact amount in the
relevant accounts and for the relevant reporting period, so as to allow the financial statements to be
prepared in accordance with the specified accounting framework;
o Observing the principle of prudence in valuation of assets, liabilities, income and
expenses; detection and termination of fraud and errors;
o Completeness and correctness of the accounting information;
o Preparation of reliable financial and non-financial information; adherence to international
financial reporting standards and compliance with the going concern principle as well as the applicable
non-financial reporting requirements.
The company's Board of Directors is responsible for the risk management, which includes
identifying, assessing and controlling potential events or situations that may adversely affect the
achievement of the organization's objectives, and is designed to give reasonable assurance that the
company's business objectives will be achieved.
The management of the holding prepares an annual activity report as well as a financial statement
for every financial year which gives an accurate and honest estimate of the financial standing of the
company at the end of the year, operational financial results, and the cash flows in compliance with the
applicable accounting framework. In order to ensure an independent and objective assessment of the
financial statements the annual audit of the holding is performed by an independent statutory auditor. All
financial statements are prepared in accordance with the International Accounting Standards. The current
financial and accounting activity of the company is subject to periodic control and analysis by the
management body. There is an established practice for periodic discussion at meetings of the Board of
Directors of the current financial results of the company's activities, including the implementation of the
investment program.
5. Information under Art. 10 of Directive 2004/25/EC
The company does not have significant direct or indirect shareholdings (including indirect
shareholdings through pyramid structures and cross-shareholding) within the meaning of Art. 85 of
Directive 2001/34/EC.
There are no holders of securities with special control rights.
There are no restrictions on the voting right.
The rules that regulate the appointment and replacement of members of the Board of Directors and
the introduction of amendments to the memorandum of association are specified in the published Articles
of Association of the company and are not regulated by the corporate Board. According to the Articles of
Association of Stara Planina Hold Plc, only the General Meeting of Shareholders has the right to elect
and dismiss members of the Board of Directors of the company and decisions are taken by a majority of
2/3 of the shares represented.
Only the General Meeting of Shareholders has the right to make amendments and supplements to
the Articles of Association of the company. Decisions are taken by a majority of 2/3 of the shares
represented.
Resolutions for buy-back procedures or issuance of shares are to be adopted by the shareholders
in accordance with the legislation in force.
The powers of the Board of Directors are regulated in detail under Art. 43, para. 2 of the Articles of
Association of the company. The Board of Directors, without being expressly authorized to do so by the
40.
General Meeting, may not carry out transactions specified under Art. 114 of the Public Offering of
Securities Act.
Transactions of the company with the participation of interested parties, other than those mentioned
above, are subject to prior approval by the Board of Directors.
The Articles of Association also provide for the powers of the Board of Directors to increase the
capital of the company by issuing shares.
6. Diversity policy
The management structure of Stara Planina Hold Plc is defined in the company's Articles of
Association. The Board of Directors consists of three individuals and one legal entity, which has
respectively appointed a physical person as its representative. The members of the Board of Directors
have the education, qualification, knowledge and professional experience necessary for the responsible
and competent performance of their functions and responsibilities. The company does not apply a
diversity policy regarding the management body in relation to aspects such as age and gender.
The election of the members of the board of directors is the right and prerogative of the
shareholders in accordance with the requirements of the law and the Articles of Association.
7. Information about the members of the Board of Directors
Stara Planina Hold Plc has a one-tier management system. The Board of Directors is the managing
body of Stara Planina Hold Plc, responsible for the planning and coordination of the company’s overall
performance, as laid down in the scope of its business activity, by means of undertaking all actions for
organization, management and control, provided by law and the Articles of Association.
As of 31.12.2024 the Board of Directors of Stara Planina Hold Plc includes the following members:
o Evgeniy Vasilev Uzunov – Chairman of the Board of Directors
o Vasil Georgiev Velev – Member of the Board of Directors and Executive Director
o Finance Invest LTD, Plovdiv, UIC 115016144; represented in the Board of Directors by Spas
Borisov Videv – Member of the Board of Directors
Due to his passing, as of December 31, 2025, Stefan Atanasov Nikolov no longer performs the
functions of a member of the Board of Directors.
During the reporting year, no changes were made to the members of the Board of Directors and
the manner of representing the company. By decision of the regular annual general meeting of the
shareholders, held on 06.06.2024, all members of the Board of Directors were re-elected for a new 5-
year term.
The organization of work, as well as all duties, responsibilities and competences are regulated and
specified by the Rules of Regulation of the of the Board of Directors of Stara Planina Hold Plc. The Board
of Directors takes its decisions at meetings held at least once every three months, in accordance with the
statutory requirements of the terms and procedures for their convocation and holding.
The composition of the Board of Directors elected by the General Meeting guarantees the
independence and objectiveness of the assessments and actions of its members in terms of the
company’s operation.
During the reporting year, members of the Board of Directors or parties related to them have not
entered into transactions with the company which are beyond its usual business activity or significantly
deviate from the market conditions.
The statutory requirement for at least one third of the members of the Board of Directors to be
independent persons is observed. There are no changes in the special criteria for election of Board
members. In its practice so far, the Board of Directors has not encountered a situation of direct or indirect
conflict of interest between a member of the management body and a shareholder. There has not been
found any instance of direct or indirect conflicts between the interest of a Board member and the
company’s interest.
The next sections of the report contain additional data.
41.
Participation of the members of the Board of Directors as of December 31,2025
Member of the
Board of Directors
Commercial companies, in
which the member owns
more than 25 percent of the
capital
Participation in the management of other
companies or co-operations as procurators,
managers or board members
Evgeniy Vasilev
Uzunov
Sostra Engineering Ltd.
Elhim-Iskra Plc. – Pazardzhik, representative of
Garant-5 Ltd.;
Hydraulic elements and systems Plc. - Yambol,
representative of Loma Ltd.;
M+S Hydraulic Plc. – Kazanlak, representative of
Sostra Engineering Ltd.;
Bulgarian Rose Plc. – Karlovo, representative of
Bic Hold Ltd.;
Fazan Jsc. – Ruse, representative of Stara
Planina Hold Plc.;
M+S–97 Jsc. – Kazanlak;
Vasil Georgiev Velev
Velev Invest Ltd.
Hydraulic elements and systems Plc. - Yambol,
representative of Velev Invest Ltd.;
M+S Hydraulic Plc. – Kazanlak, representative of
Velev Invest Ltd.;
Bulgarian Rose Plc. – Karlovo, representative of
„Leasing Company” Jsc;
Fazan Jsc. – Ruse, representative of Bic Hold
Ltd.;
M+S–97 Jsc. – Kazanlak, representative of Bic
Hold Ltd.;
Elhim-Iskra Plc. – Pazardzhik;
Bic Hold Ltd. – Sofia;
Garant-5 Ltd. – Plovdiv;
Velev Invest Ltd. – Sofia;
Finance Invest Ltd
None
None
Spas Borisov Videv
BMP Ltd.
Finance Invest Ltd.
Hydraulic elements and systems Plc. - Yambol,
representative of Maya-PL Ltd.;
Bulgarian Rose Plc. – Karlovo, representative of
Stara Planina Hold Plc.;
M+S Hydraulic Plc. – Kazanlak, representative of
Stara Planina Hold Plc.;
Boryana Jsc, Cherven Bryag – representative of
SPH Invest Jsc
Elhim-Iskra Plc. – Pazardzhik;
Garant 5 Ltd. – Plovdiv;
Finans Invest Ltd. – Plovdiv;
BMP Ltd. – Plovdiv;
Fazan Jsc. – Ruse;
Stefan Atanasov
Nikolov
N/A
N/A
None of the members of the Board of Directors participates in companies as an unlimited liability
partner.
42.
Х. Additional information under Appendix 2 of Ordinance No 2 of the FSC
1. Information given in value or quantitative terms about the main categories of commodities, products
and/or provided services, with indication of their share in the sales revenues of the issuer as a whole and
the changes that occurred during the reporting fiscal year
As a holding company, Stara Planina Hold Plc does not perform independent commercial
operations and has only financial income.
2. Information about the revenues allocated by separate categories of activities, domestic and external
markets as well as information about the sources for supply of materials required for the manufacture of
commodities or the provision of services with indication of the degree of dependence in relation to any
individual seller or buyer/user, where if the share of any of them exceeds 10 per cent of the expenses or
revenues from sales, information shall be provided about every person separately about such person’s
share in the sales or purchases and his relations with the company
As a holding company, Stara Planina Hold Plc does not perform independent commercial
operations and has only financial income.
3. Information on concluded material transactions
In 2025, no transactions of significant importance for the activities of Stara Planina Hold Plc were
concluded, with the exception of lending to companies in the Group. Information regarding loans granted
to subsidiaries and associated enterprises is presented under item 9 of this section of the report.
4. Information about the transactions concluded between the company and related parties during the
reporting period, proposals for conclusion of such transactions as well as transactions which are outside
its usual activity or substantially deviate from the market conditions, to which the issuer or its subsidiary
is a party, indicating the amount of the transactions, the nature of relatedness and any information
necessary for an estimate of the influence over the issuer’s financial status
Transactions concluded between Stara Planina Hold Plc and related parties during the reporting
period are only the loans granted to subsidiaries and associates, specified under item 9 of this section of
the Report.
There are no transactions outside the scope of the issuer's usual business activity or transactions
significantly different from the market conditions.
5. Information about events and indicators of unusual for the issuer nature, having substantial influence
over its operation and the revenues realized thereof and expenses made; assessment of their influence
over the results during the current year
As a holding company Stara Planina Hold Plc does not perform independent commercial
operations and the company has focused its activities primarily on the management of the subsidiaries
and associates in the Group. Therefore, a significant effect on the financial standing of Stara Planina
Hold Plc has the direct dependence on the financial standing of the subsidiaries and associates whose
operations are primarily export-oriented - mainly to the countries of the European Union.
In 2025, the activities of the companies in the group continued to be shaped by adverse factors
exerting a strong influence on global trade and economic relations. The global economy remained heavily
affected by a complex geopolitical landscape, which continues to generate uncertainty and volatility in
international markets. Key factors impacting the business include U.S. trade policy, tensions between
leading economic powers, and regional conflicts that directly affect global supply chains, commodity
prices, and demand dynamics. The tariffs introduced by the Trump administration, covering a wide range
of goods, continued to create uncertainty regarding long-term contracts, particularly in the machinery
sector. Concurrently, the military conflict between Russia and Ukraine and the escalation of tensions in
43.
the Middle East placed additional pressure on energy markets, leading to periodic spikes in fuel and metal
prices.
There are no other events or indicators of an unusual nature that have had a significant impact on
the Issuer's activities, other than the military conflicts in Ukraine and the Middle East and the resulting
negative effects on economic activity, trade relations, the cost of key raw materials, including energy
resources, and inflation.
6. Information about off-balance kept transactions – nature and business objective, indication of the
financial impact of the transactions on the operation, if the risk and benefits of these transactions are
substantial for the assessment of the issuer’s financial status
There are no such transactions.
7. Information about holdings of the issuer, about its main investments in the country and abroad (in
securities, financial instruments, intangible assets and real estate), as well as the investments in equity
securities outside its economic group and the sources/ways of financing
Investments of Stara Planina Hold Plc are in securities and shareholdings in Bulgarian companies.
Information on the shareholdings of Stara Planina Hold Plc is provided under Section І of this Report -
Investment Portfolio Standing.
8. Information about the concluded by the issuer, by its subsidiary, in their capacity of borrowers, loan
contracts with indication of the terms and conditions thereof, including the deadlines for repayment as
well as information on the provided guarantees and assuming of liabilities
As of 31.12.2025 Stara Planina Hold Plc has no obligations under loan agreements.
An agreement for undertaking a subordinated contingent liability has been concluded between
Stara Planina Hold Plc and ZAD Asset Insurance AD. Pursuant to this agreement, Stara Planina Hold Plc
shall provide ZAD Asset Insurance AD upon request and upon occurrence of an activating event the
amount up to BGN 294 thousand.
An agreement for undertaking a subordinated contingent liability has been concluded between HES
Plc and ZAD Asset Insurance AD. Pursuant to this agreement, HES Plc shall provide ZAD Asset
Insurance AD, upon request and upon occurrence of an activating event the amount up to BGN 294
thousand.
Loan agreements concluded by the subsidiaries:
Fazan Jsc.: Loan agreement dated 25.04.2019 with Stara Planina Hold Plc granting the amount of
BGN 407 000 with maturity until 25.12.2027, last Annex dated 18.12.2025, at 2.5 % annual interest rate,
unpaid principal as of 31.12.2025 in the amount of BGN 407 thousand.
Fazan Jsc.: Loan agreement dated 09.01.2020 with Stara Planina Hold Plc granting the amount of
BGN 550 000 with maturity until 08.01.2026, last Annex dated 05.01.2024 at 2.5 % annual interest rate,
unpaid principal as of 31.12.2025 in the amount of BGN 550 thousand.
Fazan Jsc.: Loan agreement dated 01.07.2024 with Stara Planina Hold Plc granting the amount of
BGN 100 000 with maturity until 01.07.2027 at 4 % annual interest rate, unpaid principal as of 31.12.2025
in the amount of BGN 100 thousand.
Fazan Jsc.: Loan agreement dated 18.01.2022 with Prizma Lux Ltd. UIC 121194709 granting BGN
350 thousand with maturity until 31.12.2025 at 4.8 % annual interest rate, unpaid principal as of
31.12.2025 in the amount of BGN 100 thousand.
HES Plc: Loan agreement dated 12.07.2025 with Stara Planina Hold Plc - parent company crediting
its subsidiary HES Plc under the terms of Art. 114, para. 10, item 3 of the Public Offering of Securities
Act by providing a cash loan in the amount of BGN 3 500 000 for a period until 01.07.2026, at an annual
interest on the principal amount of the used loan in the amount of 3.7 %; unpaid principal as of 31.12.2025
in the amount of BGN 3 300 thousand.
44.
HES Plc: Loan agreement dated 01.07.2024 with Stara Planina Hold Plc - parent company crediting
its subsidiary HES Plc under the terms of Art. 114, para. 10, item 3 of the Public Offering of Securities
Act by providing a cash loan in the amount of BGN 3 300 000 (three million and three hundred thousand)
for a period until 30.06.2026, last Annex dated 25.06.2025, at an annual interest on the principal amount
of the used loan in the amount of 4 % starting from 12.07.2024; as of 31.12.2025 the loan has been
repaid.
Elhim-Iskra Plc: Loan agreement dated 15.11.2022 with Stara Planina Hold Plc - parent company
crediting its subsidiary Elhim-Iskra Plc under the terms of Art. 114, para. 10, item 3 of the Public Offering
of Securities Act by providing a cash loan in the amount of BGN 1 200 000 (one million and two hundred
thousand) for a period of five years at an annual interest on the principal amount of the used loan in the
amount of 2.5 % starting from 15.11.2022; as of 31.12.2025 the loan has been repaid.
Elhim-Iskra Plc: Loan agreement dated 28.10.2024 with Stara Planina Hold Plc - parent company
crediting its subsidiary Elhim-Iskra Plc under the terms of Art. 114, para. 10, item 3 of the Public Offering
of Securities Act by providing a cash loan in the amount of BGN 2 600 000 (two million and six hundred
thousand) for a period of five years at an annual interest on the principal amount of the used loan in the
amount of 2.5 %; unpaid principal as of 31.12.2025 in the amount of BGN 1 525 000.
SPH Invest Jsc: Loan agreement dated 01.11.2023 with Stara Planina Hold Plc - parent company
crediting its subsidiary SPH Invest Jsc under the terms of Art. 114, para. 10, item 3 of the Public Offering
of Securities Act by providing a cash loan in the amount of up to BGN 2 000 000 (two million) for a period
until 01.11.2027, last Annex dated 31.10.2025, with an annual interest on the principal of the used loan
in the amount of 3.5 % starting from 01.11.2023; unpaid principal as of 31.12.2025 in the amount of BGN
1 600 thousand.
9. Information on the loans granted by the issuer or its subsidiaries, provision of guarantees or assuming
of liabilities in total to one person or its subsidiary, including to related parties, indicating the name or title
and UIC of the person, the nature of relationship between the issuer or their subsidiaries and the
borrower, the amount of outstanding principal, interest rate, date of conclusion of the contract, repayment
period, amount of commitment, specific conditions other than those specified in this provision, and the
purpose for which they were granted, in case they are concluded as targets
Loan agreement dated 25.04.2019 granting Fazan Jsc, UIC:827182916 – subsidiary company, the
amount of BGN 407 thousand with maturity until 25.12.2025, last Annex as of 18.12.2025, at 2.5 % annual
interest rate, unpaid principal as of 31.12.2025 in the amount of BGN 407 thousand.
Loan agreement dated 09.01.2020 granting Fazan Jsc, UIC:827182916 – subsidiary company, the
amount of BGN 550 thousand with maturity until 08.01.2026, last Annex as of 05.01.2024, at 2.5 % annual
interest rate, unpaid principal as of 31.12.2025 in the amount of BGN 550 thousand.
Loan agreement dated 01.07.2024 granting Fazan Jsc, UIC:827182916 – subsidiary company, the
amount of BGN 100 thousand with maturity until 01.07.2027, at 4 % annual interest rate, unpaid principal
as of 31.12.2025 in the amount of BGN 100 thousand.
Loan agreement dated 01.10.2013 granting Leasing Company Jsc, UIC: 121126583 - a company
with a minority stake in the portfolio of Stara Planina Hold Plc, the amount of BGN 4 250 thousand with
maturity until 01.10.2027, last Annex as of 06.10.2025, at 2.5 % annual interest, unpaid principal as of
31.12.2025 in the amount of BGN 3 750 thousand.
Loan agreement dated 28.04.2015 granting Leasing Company Jsc, UIC: 121126583 - a company
with a minority stake in the portfolio of Stara Planina Hold Plc, the amount of BGN 6500 thousand with
maturity until 28.04.2027, last Annex as of 28.04.2025, at 2.5 % annual interest, unpaid principal as of
31.12.2025 in the amount of BGN 5 000 thousand.
Loan agreement dated 01.07.2025 with Stara Planina Hold Plc - parent company crediting its
subsidiary HES Plc under the terms of Art. 114, para. 10, item 3 of the Public Offering of Securities Act
by providing a cash loan in the amount of BGN 3 500 000 for a period until 01.07.2026, at an annual
45.
interest on the principal amount of the used loan in the amount of 3.7 %; unpaid principal as of 31.12.2025
in the amount of BGN 3 300 thousand.
Loan agreement dated 01.07.2024 with Stara Planina Hold Plc - parent company crediting its
subsidiary HES Plc under the terms of Art. 114, para. 10, item 3 of the Public Offering of Securities Act
by providing a cash loan in the amount of BGN 3 300 000 (three million and three hundred thousand) for
a period until 30.06.2026, last Annex as of 25.06.2025, at an annual interest on the principal amount of
the used loan in the amount of 4 % starting from 12.07.2025; as of 31.12.2025 the loan has been repaid.
Loan agreement dated 15.11.2022 with Stara Planina Hold Plc - parent company crediting its
subsidiary Elhim-Iskra Plc under the terms of Art. 114, para. 10, item 3 of the Public Offering of Securities
Act by providing a cash loan in the amount of BGN 1 200 000 (one million and two hundred thousand)
for a period of five years at an annual interest on the principal amount of the used loan in the amount of
2.5 % starting from 15.11.2022; as of 31.12.2025 the loan has been repaid.
Loan agreement dated 28.10.2024 with Stara Planina Hold Plc - parent company crediting its
subsidiary Elhim-Iskra Plc under the terms of Art. 114, para. 10, item 3 of the Public Offering of Securities
Act by providing a cash loan in the amount of BGN 2 600 000 (two million and six hundred thousand) for
a period of five years at an annual interest on the principal amount of the used loan in the amount of 2.5
%; unpaid principal as of 31.12.2025 in the amount of BGN 1 525 000.
Loan agreement dated 01.11.2023 with Stara Planina Hold Plc - parent company crediting its
subsidiary SPH Invest Jsc under the terms of Art. 114, para. 10, item 3 of the Public Offering of Securities
Act by providing a cash loan in the amount of up to BGN 2 000 000 (two million) for a period until
01.11.2027, last Annex dated 31.10.2025, with an annual interest on the principal of the used loan in the
amount of 3.5 % starting from 01.11.2023; unpaid principal as of 31.12.2025 in the amount of BGN 1 600
thousand.
10. Information on the use of the funds from a new issue of securities carried out during the reported
period
During the reporting period has not been issued a new issue of securities.
11. Analysis of the ratio between the achieved financial results reflected in the financial statement for the
fiscal year, and previously published forecasts for these results
Stara Planina Hold Plc publishes monthly forecasts for the sales of the companies in the Group,
the gross profit and accordingly reports the real results compared to the forecasts. Forecasts are being
updated on a quarterly basis based on the reported results. The achieved financial results in the financial
statements for the financial year do not differ from the published forecast results.
12. Analysis and assessment of the policy concerning the management of the financial resources with
indication of the possibilities for servicing of the liabilities, eventual jeopardizations and measures which
the issuer has undertaken or is to undertake with a view to their removal
The policy of Stara Planina Hold Plc is focused mainly on the management of the companies in its
portfolio. Free funds are used for financing the companies. The loans are specified under item 9 of this
section of the Report. An expression of this policy is also the deferred dividend payment to Stara Planina
Hold Plc in its capacity of a majority or major shareholder on the part of the respective companies.
Stara Planina Hold Plc services all of its liabilities in a timely manner hence there is no possible
threats which necessitate measures for their elimination.
13. Assessment of the possibilities for realization of the investment intentions, indicating the amount of
the available funds and stating the possible changes in the structure of the financing of this activity
The activity of Stara Planina Hold Plc is focused mainly on the management of its current
investments. As of the date of this Report, there are no close plans for new investments to be made by
the company. The holding gives priority to the development of the companies in the portfolio.
46.
14. Information about occurred during the reporting period changes in the basic management principles
of the issuer and its group of enterprises within the meaning of the Accountancy Act
Stara Planina Hold Plc manages its investments by setting high but achievable goals in terms of
quality, output and profitability. Particular attention is being paid to the aspect of environmental protection,
human resources development and corporate and social responsibility.
During the reporting period, no changes were made to the core management principles within the
meaning of the Accountancy Act, which guarantee the reliability and transparency of business operations,
the assessment and reporting of potential risks and eventual losses to achieve an accurate financial
result, and the consistency and fair presentation of information.
Detailed information regarding the Company’s accounting policy is provided in the explanatory
notes to the annual financial statements in accordance with IFRS.
Effective January 1, 2026, in accordance with the requirements of the Act on the Introduction of the
Euro in the Republic of Bulgaria, the Company performs all accounting entries and ongoing reporting in
Euro. All interim reports and public notifications of financial position, as well as all forecasts after the Euro
adoption date of January 1, 2026, will be prepared and submitted to the Financial Supervision
Commission (FSC), the regulated securities market, and investors in Euro.
15. Information about the main characteristics of the internal control system and risk management system
applied by the issuer in the course of preparation of the financial statements
In order to ensure an independent and objective assessment of the financial statements the annual
audit of the holding is performed by an independent statutory auditor. All financial statements are
prepared in accordance with the International Accounting Standards. The current financial and
accounting activity of the company is subject to periodic control and analysis by the management body.
The holding has an established practice for periodic discussion of the current financial results of the
companies included in its strategic investment portfolio, in order to ensure implementation of their
business programs and accurate analysis of the opportunities for future investment projects.
Detailed information on the internal control and risk management systems is presented under
Section IX, item 4 of this Report.
16. Information on the changes in the management and supervisory bodies during the reporting fiscal
year
Stara Planina Hold Plc has a one-tier management system. The Board of Directors includes 4
persons. During the reporting financial year, were not made changes in the members of the Board of
Directors and the representation of the holding company.
Detailed information on the Board of Directors is specified under Section IX, item 6 of the Report.
17. Information on the shares of the issuer held by the members of the management and control bodies
and the procurators, including the shares held by each of them separately and as a percentage of the
shares of each class, as well as options provided by the issuer on its securities - type and amount of the
securities on which the options are based, exercise price of the options, purchase price, if any, and the
term of the options
Member of the Board of Directors
Number of shares
as of 31.12.2024
% of the
capital
Number of shares
as of 31.12.2025
% of the
capital
Evgeniy Vasilev Uzunov
256933
1.22
294753
1.40
Vasil Georgiev Velev
420000
2.00
420000
2.00
Finance Invest Ltd
219408
1.04
219408
1.04
Stefan Atanasov Nikolov
7000
0.03
N/A
/
47.
The issuer has not provided options on securities to the members of the Board of Directors.
There are no special rights or restrictions for the members of the management body to acquire
shares of the company. They may freely acquire shares from the capital of the company on a regulated
securities market in compliance with the applicable provisions of the Bulgarian legislation and the
European regulation.
18. Information on the arrangements known to the company (including also after the closure of the fiscal
year), as a result of which in future periods may occur changes in the relative portion of shares or
debentures owned by shareholders or debenture holders – no such arrangements are known
The company is not aware of such arrangements.
19. Information about pending legal, administrative or arbitration proceedings relating to issuer’s liabilities
or receivables at amount at least 10 percent of its equity
Stara Planina Hold Plc is not involved in any pending legal, administrative or arbitration proceedings
as well as in any judgments or requests for dissolution or declaration of liquidation.
20. Information on the Investor Relations Director, including telephone and address for correspondence
Investor Relations Director is Sofia Kirilova Argirova-Atanasova, tel. 02/9634161, 0879899469,
address for correspondence: 20A, Latinka Str., 1113 Sofia, Bulgaria, investor@sphold.com.
XІ. Information under Appendix 3 of Ordinance No 2 of the FSC
1. Information on the securities that have not been admitted to trading on a regulated market in the
Republic of Bulgaria or another Member State
There are no shares of Stara Planina Hold Plc which have not been admitted to trading on a
regulated market in the Republic of Bulgaria or other Member State.
As of 31.12.2025 the registered capital of the company amounts to BGN 21000000, fully registered
and paid. The capital is distributed in 21000000 registered, dematerialized, ordinary (non-preferred),
freely transferable shares with a nominal value of BGN 1.00, with the right to one vote at the General
meeting of the shareholders, the right to dividend and liquidation share. All shares are of one class.
Effective January 1, 2026, the Company's share capital has been redenominated in accordance
with Art. 31 of the Act on the Introduction of the Euro in the Republic of Bulgaria and amounts to EUR
10,710,000.00, with a nominal value per share of EUR 0.51.
Pursuant to data received by Central Depository AD, as of 31 December 2025, Stara Planina Hold
Plc has 54 shareholders - legal entities, holding 12 980 642 shares (61.81 % of the company’s capital)
and 21726 shareholders - physical persons holding 8 019 358 shares (38.19 % of the company’s capital).
2. Information on the direct and indirect holding of 5 or more percent of the voting rights in the
company’s general meeting, including data about the shareholders, the amount of their holding and
the manner in which the shares are owned
Shareholders holding more than 5 % of the voting rights as of 31.12.2024:
• Potbul Invest Foundation - 4655400 shares, representing 22.17 % of the capital;
• Garant-5 Ltd - 2595972 shares, representing 12.36 % of the capital;
• ZUPF Allianz Bulgaria AD - 1376254 shares, representing 6.12 % of the capital.
3. Information about the shareholders with special control rights and description of these rights
There are no shareholders with special control rights.
48.
4. Agreements among the shareholders, which are known to the company and which may result in
limitations over the transfer of shares or the voting right
The company is not aware of any arrangements among the shareholders which may lead to
restrictions on the transfer of shares or voting right.
5. Significant contracts of the company that give rise to action, are amended or terminated due to a
change in the control of the company upon implementation of obligatory tender offer and the
consequences thereof, except for the cases where disclosure of this information may cause serious
damages to the company; the exception under the previous sentence shall not apply in the cases
when the company is obliged to disclose the information by virtue of the law
There are such contracts.
Other information at the discretion of the company
The company considers that there is no other information that has not been publicly disclosed by
the company and which would be important for shareholders and investors in making an informed
investment decision.
Media
Stara Planina Hold Plc discloses statutory information to the public through information media X3
News.
The inside information for Stara Planina Hold Plc under Art. 7 of Regulation (EU) № 596/2014 of
the European Parliament and of the Council of 16 April 2014 concerning the circumstances occurred in
2025 is published on the company's website in the News section - https://www.sphold.com/novini, as well
as in the X3News media -
http://www.x3news.com/?page=Company&target=InsiderInformation&BULSTAT=121227995&MESSAGE_T
YPE=2 through which the company publicly discloses inside information.
Vasil Velev, Executive Director
Vasil
Georgiev
Velev
Digitally signed by
Vasil Georgiev Velev
Date: 2026.03.30
09:03:37 +03'00'
1
STARA PLANINA HOLD PLC
REPORT
on the Implementation of the Remuneration Policy for
the Members of the Board of Directors of
STARA PLANINA HOLD Plc
This Report has been prepared on the grounds of Art. 12 of Ordinance No. 48 of the FSC. The
report describes the way the Company implements the Remuneration Policy for the Members of the
Board of Directors adopted at the regular annual General Meeting of Shareholders in 2021 and
remained unchanged by the regular annual general meeting of shareholders held in 2025. The
Remuneration Policy was adopted pursuant to Art. 116c, para. 1 of the Public Offering of Securities Act.
The Report includes a remuneration policy implementation program for the next financial year
and an overview of the implementation of the remuneration policy throughout the reported year - 2025.
І. Implementation of the Remuneration Policy in the reporting period
Pursuant to the requirements of Ordinance No. 48, the Company shall provide the following
information in relation to the implementation of the Remuneration Policy for the Members of the Board
of Directors in 2025:
1. Information on the decision-making process in defining the remuneration policy, including if
applicable, information on the mandate and composition of the remuneration committee, the names of
external consultants whose services have been used in defining the remuneration policy
The Remuneration Policy for the Members of the Board of Directors has been developed in
compliance with the requirements set out in Ordinance No. 48 of the FSC while taking into account the
recommendations of the National Corporate Governance Code. The Policy was adopted at the regular
annual meeting of the Company’s shareholders in 2021. In accordance with the requirements of Art. 11,
para. 3 and para. 4 of Ordinance No. 48 of the Financial Supervision Commission (FSC), in 2025, the
Board of Directors of the Company conducted a review of the Remuneration Policy for the members of
the Board of Directors. The Board assessed that the policy complies with the requirements of
Ordinance No. 48 of the FSC and is based on principles ensuring its alignment with the size and
internal organization of the company, as well as the nature, scope, and complexity of its activities;
therefore, no grounds or necessity for amendments to the policy were identified. The agenda of the
regular annual general meeting of shareholders, held on June 5, 2025, included the review of the
Remuneration Policy for the members of the Board of Directors as a separate agenda item, and the
General Meeting of Shareholders did not adopt any changes to the Policy.
According to the current Remuneration Policy for the Members of the Board of Directors, no
Remuneration Committee has been established in the Company, with the remuneration policy being
monitored by the independent members of the Board of Directors. No external advisors have been
involved in the development of the Policy.
2. Information on the relative weight of variable and fixed remuneration of the members of
management and supervisory bodies
Members of the Board of Directors are entitled to remuneration where the type, amount and
period of time it is payable for are to be specified by a resolution of the General Meeting of
Shareholders and is payable subject to the terms and conditions of the Management Contracts
concluded between these members and the Company.
2
Fixed remuneration comprises payments that are not calculated based on performance
assessment and includes remunerations of permanent nature that have been precisely defined or can
be unambiguously determined and is in compliance with the applicable legislation.
Variable remuneration is a component of the total remuneration in the form of profit-sharing
bonuses, incentives, benefits – related to retirement and other material incentives and financial
instruments which are awarded based on activity performance assessment criteria.
The members of the Board received variable remuneration for their activities in 2025 pursuant to
a decision of the General Meeting of Shareholders.
The proportion between the variable and fixed remuneration is 44/56. 40 % of the variable
remuneration, defined by a resolution of the general meeting of shareholders, is deferred for a period of
three years.
3. Information on performance criteria, based on which stock options, company shares or other
variable compensation is granted together with an explanation on how the criteria under art. 14, para. 2
and 3 of Ordinance No. 48 of the FSC contribute to the long-term interests of the company
No stock options, including company shares, rights to acquire financial instruments have been
granted to the members of the Board of Directors.
Performance criteria for 2025, based on which another type of variable remuneration is possible
to be granted comprise the business results and other non-financial indicators set out in the company’s
Policy.
4. Explanation of the methods applied to assess whether the performance criteria are met
Fixed remunerations of the members of the Board of Directors are not set out based on
business performance. They are precisely defined or are unambiguously definable and in compliance
with the applicable legislation
Performance criteria for 2025, used as a basis for a possible payout of another type of variable
remuneration, are as follows:
1. Financial indicators:
(а) Level and dynamics of EBITDA (the earnings of the company and its subsidiaries before
interest, tax, depreciation and amortization): 2025 – BGN 37 571 thousand; 2024 – BGN 30 928
thousand; 2023 – BGN 64 432 thousand.
The achieved earnings of Stara Planina Hold Plc and its subsidiaries before interest, tax,
depreciation and amortization for the year 2025 reports a growth of 22.9 % compared to the value for
the previous year and a decrease of 41.81 % compared to 2023.
The 2025 net profit of the company amounts to BGN 5 240 thousand compared to BGN 6 537
thousand for 2024 which is a 19.84 % decrease compared to the previous year. The profit decrease is
due to the reported profit declines of the companies in the Group.
(b) Level and dynamics of subsidiaries' sales:
At the end of 2025 – BGN 276 401 thousand; At the end of 2024 – BGN 266 139 thousand; At
the end of 2023 – BGN 378 954 thousand.
Against the background of a continuing decline in Bulgarian industry, which in December 2025
recorded its thirteenth consecutive month of contraction and the 34th out of the last 36 months, the
consolidated sales of Stara Planina Hold Plc in 2025 saw an increase of 3.83 % compared to the
previous year and a decrease of 27.06 % compared to the consolidated sales for 2023. The slightly
higher sales levels in 2025 are due to the efforts of the corporate and operational management to
secure deliveries for the companies within the Stara Planina Hold Plc group and to maintain their
market positions despite the effects of the complex geopolitical situation, which continues to generate
uncertainty and volatility in international markets. U.S. trade policy, tensions between leading economic
powers, and regional conflicts had a direct impact on global supply chains, raw material prices, and
demand dynamics. The military conflict in Ukraine and the escalating tensions in the Middle East placed
additional pressure on energy markets, leading to periodic spikes in fuel and metal prices amidst
significant price imbalances in the European electricity market and prolonged periods of ultra-high
prices in Southeast Europe, which systematically lead to increased inflation and production costs, as
3
well as a deterioration in industrial competitiveness and the business environment for supply chain
development.
(c) Level and dynamics of subsidiaries' receivables:
At the end of 2025 – BGN 64 561 thousand; At the end of 2024 – BGN 58 440 thousand; At the
end of 2023 – BGN 69 486 thousand.
In 2025, receivables represent 24.43 % of the net sales revenues of sold production by the
companies in the Group, while in 2024 this share is 23.10 %, and in 2023 the receivables represent
19.3 % of the net sales revenues of sold production.
By the end of 2025, receivables recorded an increase of 10.14% compared to the end of 2024,
following a 15.9 % decrease reported at the end of 2024 compared to 2023.
Pursuant to art.4, item 7 of the Remuneration Policy, the assessment on the implementation of
the financial indicators for 2024 was made on the basis of the published consolidated public notice on
the financial standing as of 31.12.2024 and the corresponding values of the indicators are indicated in
accordance with the financial statement thereto.
2. Non-financial indicators as follows:
(a) Compliance with the principles of the National Corporate Governance Code;
(b) Enforcement and compliance with the adopted Code of Ethical Conduct, Information
Provision and Disclosure Policy and other internal rules and policies of the company.
Non-financial indicators: as evident from the annual report, based on the report on the
accomplishment of the particularly set initiatives, an assessment has been made of the overall
implementation of the National Corporate Governance Code on the part of the corporate board of Stara
Planina Hold Plc. In 2025 the activity of the Board of Directors has complied with the principles laid
down in the National Corporate Governance Code. The Code of Ethical and Professional Conduct of
Stara Planina Hold Plc and the companies in the Group, the Anti-Corruption Policy of Stara Planina
Hold Plc and the companies in the Group, the Rules of Procedure of the Audit Committee, the
Information Disclosure Policy and the other internal rules and policies of the Company have been
consistently applied and adhered to. The socially responsible policies and practices of the holding
company and the companies of the Group and the policies related to the sustainable development of
the companies lead to creation of a more favorable social environment and a better quality of life for the
employed, annual improvement of the necessary conditions and prerequisites for the fulfillment of the
professional duties of employees, improvement of good production practices, motivation and
satisfaction with the working conditions and remunerations received.
The results under item 1 recorded higher levels compared to the previous year's values, while
consolidated sales revenue increased by 3.83 % year-on-year, despite the prolonged and severe
decline in Bulgarian industrial production and against the backdrop of a reported increase in the
average annual industrial production in the Eurozone and the EU for 2025 of 1.5 % compared to 2024.
In connection with the reported positive values of the financial indicators and the performance of
the non-financial indicators under item 2, we propose to the General Meeting of Shareholders to
distribute part of the company's profit for 2025 as additional remuneration for each member of the
Board of Directors in the form of profit-sharing bonuses.
On the grounds of Art. 5, para. 3 of the Remuneration Policy, the payout of 40 % of the variable
remuneration defined in the resolution of the General Meeting of Shareholders shall be deferred for a
period of 3 years.
5. Clarification on the relations between remuneration and performance (results achieved)
There are performance criteria in place based on which a payout of another type of variable
remuneration is possible, however, no such has been applied.
6. Main payments and justification of the annual bonus payment scheme and/or any other non-
monetary additional compensations
In 2025, the members of the Board of Directors were paid permanent/fixed monthly
remunerations in accordance with the Remuneration Policy for the members of the Board of Directors,
4
adopted at the regular annual general meeting of shareholders held on 20.05.2021 and remained
unchanged at the regular annual general meeting of shareholders held on 05.06.2025. At the regular
annual general meeting of shareholders held in 2024, the members of the Board of Directors were re-
elected for a new 5-year term, with the amount of their remuneration remaining unchanged. The period
for which the resolution on the fixed remuneration amount shall apply is equal to the mandate of the
members of the Board of Directors.
7. Description of the main characteristics of the supplementary voluntary pension insurance
scheme together with information on the paid and / or payable contributions by the company in favor of
the respective Board member for the respective financial year, if applicable
No provision has been made for additional voluntary pension insurance of the Board members.
8. Information for periods of delayed payment of variable remuneration
Payment of 40 % of the variable remuneration defined in the resolution of the General Meeting
of Shareholders is deferred for a period of 3 years as payout of the deferred part of the variable
remuneration is to be made proportionately over the deferred period.
9. Information on the severance payment policy
Early contract termination compensation is set out in the Remuneration Policy for the Members
of the Board of Directors adopted by the General Meeting of Shareholders, and it is dependent on the
amount of the fixed remunerations paid over the last 24 months.
No compensation is due where the dismissal is due to poor performance or culpable conduct on
the part of the Board member.
Management contracts concluded with members of the Board of Directors and the Executive
Director on behalf of the Company mandatorily include a clause providing the Company with an option
to demand a payback of the variable remuneration paid out based on data which have subsequently
been found to be false. Resolution to demand payback shall be taken by the General Meeting of
Shareholders of the Company.
10. Information on the period during which shares cannot be transferred and stock options
cannot be exercised, in case of variable remuneration based on shares
No provision has been made for remunerations comprising shares, including company shares
and rights to acquire financial instruments.
11. Information on the policy to retain a number of shares until the end of the mandate under
item 10 of the members of the supervisory and managing boards
The Company does not have such a policy.
12. Information on the contracts of the members of the managing and supervisory boards,
including the terms of the individual contracts, termination notice periods and details on any
compensation and/or other redundancy payouts
The contract with each member of the Board of Directors is concluded for a period until the end
of the mandate for which he was elected by the General Meeting of Shareholders. During the reporting
financial year, the company has not terminated contract with a member of the Board of Directors.
In case of early termination of a management contract with a member of the Board of Directors,
respectively with an Executive Director, the total amount of compensations due in relation to the early
termination, as well as payments related to the notice period may not exceed the amount of the paid
annual remuneration for the last 24 months.
13. Full amount of the remunerations and other financial incentives for the members of the
managing and supervisory bodies for the respective financial year
5
The full amount of the remunerations of the Board members for the financial 2025 stands at a
total of BGN 1443702,67.
The remunerations received by the members of the Board of Directors, including from
subsidiaries, are as follows:
• Evgeniy Vasilev Uzunov – BGN 434903,45
• Vasil Georgiev Velev – BGN 434903,45
• Finance Invest Ltd. – BGN 315903,45
• Stefan Atanasov Nikolov – BGN 257992,32.
The deferred part of the total amount of the remunerations stands at a total of BGN 209186,16
as follows:
• Evgeniy Vasilev Uzunov – BGN 52296,54
• Vasil Georgiev Velev – BGN 52296,54
• Finance Invest Ltd. – BGN 52296,54
• Stefan Atanasov Nikolov – BGN 52296,54
14. Information on the remuneration of each person who had been a member of a managing or
supervisory body of a public company for a certain period in the respective financial year
Not applicable for the reporting financial year.
15. Information in respect of shares and/or stock options and / or other incentive schemes based
on shares
The Remuneration Policy for the Members of the Board of Directors adopted by the General
Meeting of Shareholders provides for an option for variable remunerations in the form of shares, stock
options, rights to acquire shares or other financial instruments to be provided. No such options have
been provided so far.
16. Annual change in the remuneration, the company’s results and the average amount of the
remunerations of the company’s full-time employees who are not directors, during the previous at least
five financial years, presented together in a way that allows comparison
6
17. information on exercising the possibility to demand a refund of the variable remuneration
During the reporting financial year, there were no grounds for exercising the possibility to
demand a refund of the variable remuneration from a member of the board of directors, therefore such
an opportunity was not exercised.
18. information on all deviations from the remuneration policy implementation procedure in
connection with extraordinary circumstances under Art. 11, para. 13 of Ordinance 48 of the FSC,
including an explanation of the extraordinary circumstance’s nature and an indication of the specific
components that have not been applied
The Remuneration Policy does not specify extraordinary circumstances under which the
company may temporarily not apply part of the policy and during the reporting financial year no
deviations from the procedure for its implementation have been made.
ІІ. Remuneration Policy Implementation Program for the next financial year
At the regular annual general meeting of shareholders in 2021 a new Remuneration Policy for
the members of the Board of Directors was adopted, in accordance with the amendments to Ordinance
№ 48 of the FSC. The agenda of the regular annual general meeting of shareholders of the company,
held on June 5, 2025, included the review of the Remuneration Policy for the members of the Board of
Directors as a separate agenda item, and the General Meeting of Shareholders did not adopt any
changes to the Policy.
The Remuneration Policy aims to support the long-term business goals of the company and
encourage behavior which facilitates value creation for the shareholders while ensuring competitive
level of the remunerations, sufficient to attract and retain directors possessing qualities required for the
successful management and development of the company.
The Policy has been developed to be implemented over a long period of time and is subject to
review every four years, except when significant amendments or supplements are necessary.
Amendments to the Policy approved by the General Meeting of Shareholders shall be adopted as per
the rules for its elaboration and approval.
The Board of Directors considers that the Policy principles for setting up the remunerations are
at this point effective considering the financial results achieved in the reporting period. Their
implementation will continue to be a priority of the Board of Directors.
The Board of Directors is responsible for the prompt announcement of the Remuneration Policy
adopted by the General Meeting of Shareholders and any subsequent amendments thereto.
At its meeting, the Board of Directors reviewed the Policy in terms of the remuneration of the
executive directors. The Board of Directors has given its recommendations for setting up the
employees’ remunerations occupying other management positions in the administration of the company.
It monitors the level and structure of the employees’ remunerations occupying other management
positions in the administration based on information provided by the executive director of the company
and ensures that the remuneration of each executive member of the board of directors is fairly defined
compared to the remuneration of other board members and the senior managers in the administration.
Executive Director:
Vasil Velev
Vasil
Georgiev
Velev
Digitally signed
by Vasil
Georgiev Velev
Date: 2026.03.30
09:03:59 +03'00'
DECLARATION
under Art. 100n, para. 4, item 4 of the POSA
The undersigned Vasil Georgiev Velev - Executive Director of Stara Planina Hold Plc
certify that, to the best of my knowledge:
(a) the annual financial statements on the activities of Stara Planina Hold Plc for the
financial year 2025, prepared in accordance with applicable accounting standards, accurately and
fairly reflect the information on the assets and liabilities, financial standing and profit or loss of the
issuer and the companies included in the consolidation;
(b) the annual activity report of Stara Planina Hold Plc for the financial year 2025 provides
a reliable overview of the issuer's development and performance, as well as the standing of the
issuer and the companies included in the consolidation, together with a description of the main
risks and uncertainties to be faced.
Declarer: Vasil Velev
DECLARATION
under Art. 100n, para. 4, item 4 of the POSA
The undersigned Kremena Gantcheva Dulgerova – Chief Accountant of Stara Planina
Hold Plc certify that, to the best of my knowledge:
(a) the annual financial statements on the activities of Stara Planina Hold Plc for the
financial year 2025, prepared in accordance with applicable accounting standards, accurately and
fairly reflect the information on the assets and liabilities, financial standing and profit or loss of the
issuer and the companies included in the consolidation;
(b) the annual activity report of Stara Planina Hold Plc for the financial year 2025 provides
a reliable overview of the issuer's development and performance, as well as the standing of the
issuer and the companies included in the consolidation, together with a description of the main
risks and uncertainties to be faced.
Declarer: Kremena Dulgerova
Kremena
Gantcheva
Dulgerova
Digitally signed by
Kremena Gantcheva
Dulgerova
Date: 2026.03.30
09:00:27 +03'00'
Vasil
Georgiev
Velev
Digitally signed
by Vasil
Georgiev Velev
Date: 2026.03.30
09:04:18 +03'00'
Attn.
The shareholders
of STARA PLANINA HOLD PLC
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REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS
Opinion
We have audited the financial statements of Stara Planina Hold PLC (the Company), including the
statement of financial position as of 31.12.2025 and the profit and loss, and other comprehensive income
statements, the statements on changes in equity and the cash flows statements for the year then ended and the
explanatory notes to the financial statements including material information on the accounting policy and
other explanatory informationл
In our opinion, the enclosed financial statements present fairly, in all material aspects, the financial
position of the Company as of 31.12.2025 and its financial results from business operations and its cash
flows for the year then ended, in accordance with IFRS accounting standards adopted in the European Union
(EU).
Basis for the opinion
We conducted our audit in accordance with the International Audit Standards (IAS). Our
responsibilities under these standards are further described in the section of our report "Responsibilities of
the auditor for the audit of the financial statements". We are independent from the Company in accordance
with the Code of Ethics for Professional Accountants (including the International Independence Standards)
of the International Ethic Standards for Accountants Council (the Code of IESAC), together with the ethical
requirements of the Independent Financial Audit and Sustainability Assurance Act (IFASAA), applicable to
our audit of the financial statements in Bulgaria, while we have also fulfilled our other ethical responsibilities
in accordance with the IFASAA and the Code of IESAC. We consider that the audit evidence we obtained as
sufficient and appropriate to provide a basis for our opinion.
Key audit issues
The key audit issues are those which as per our professional judgment were of the greatest significance
in the audit of the financial statements for the current period. These issues are reviewed as part of our audit
of the financial statements as a whole and the formation of our opinion thereof, as we do not provide a
separate opinion on these issues. Key issues are indicated in the "Responsibilities of the auditor for the audit
of the financial statements" section of this report.
Other information different from the financial statements and the auditor report thereon
The management is responsible for this other information. The other information, that we received
prior to the date of our auditor report, includes an activity report (incl.) and a corporate governance
declaration and a Report on the implementation of the Remuneration Policy, prepared by the management in
accordance with Chapter seven of the Accountancy Act but does not include the financial statements and our
auditor report thereon.
Our opinion on the financial statements does not include the other information and we do not express
any conclusion of certainty related thereto, unless explicitly specified in our report and to the extent stated.
With regard to our audit of the financial statements, our responsibility is to read this other information
and thus to consider whether this other information is materially inconsistent with the financial statements or
with our knowledge, gained during the audit, or otherwise it seems to contain substantially incorrect
reporting. If based on the work we have performed, we conclude that there is materially incorrect reporting
in this other information, we are required to report on this fact.
We have nothing to report with this regard.
Responsibility of the management and the persons engaged with general management in terms
of the financial statements
The management is responsible for the preparation and the fair presentation of these financial
statements in accordance with the IFRS accounting standards, adopted in the EU and for such an internal
control system as the management has considered being necessary to ensure the preparation of financial
statements that are free from material misstatements, whether due to fraud or error.
When preparing the financial statements, the management is responsible for the assessment of the
Company's ability to continue operating as a going concern, disclosing, when applicable, any issues related
to the going concern assumption and using the accounting basis on the grounds of the going concern
assumption unless the management intends to liquidate the Company or to cease its operations, or if the
management does not actually have any alternative but to do so.
The persons engaged with general management are responsible for supervising the financial reporting
processes of the Company.
The management is responsible for the fact that the electronic format of the separate financial
statements of the Company for the year ending on December 31, 2025, comprised in the attached electronic
file „8945006HQ7VN30FUR531-20251231-EN-SEP“ has been prepared in all material aspects in
accordance with the requirements of the Commission Delegated Regulation (EU) 2019/815 of 17 December
2018 supplementing Directive 2004/109 / EC of the European Parliament and of the Council ("EEEF
Regulation").
Responsibilities of the auditor for the audit of the financial statements
Our objectives are to obtain reasonable assurance on whether the financial statements as a whole are
free from material misstatements, whether due to fraud or error, and to issue an auditor report that includes
our audit opinion. Reasonable assurance is a high level of assurance but it does not guarantee that an audit
conducted in accordance with the IAS will always reveal materially incorrect reporting whenever such
reporting exists. Incorrect reporting may occur as a result of fraud or error and are considered to be material
if it could reasonably be expected that they, individually or in the aggregate, could influence the economic
decisions of users based on these financial statements.
As part of the audit in accordance with the IAS, we apply professional judgment and maintain
professional skepticism during the entire audit. We also:
- identify and assess risks from material misstatements in the financial statements, whether due to
fraud or error, develop and implement audit procedures in response to these risks and obtain sufficient and
appropriate audit evidence to provide a basis for our opinion. The risk for a given significant misstatement,
resulting from fraud, not to be revealed is higher than the risk of material misstatements resulting from error
due to the fact that fraud may involve secret collusions, falsification, deliberate omissions, statements
intended to mislead the auditor as well as disregard or circumvention of the internal control.
- obtain understanding of the internal control related to the audit in order to develop audit procedures
that are appropriate under the particular circumstances but not for the purpose of expressing an opinion on
the effectiveness of the Company’s internal control.
- evaluate the appropriateness of accounting policies used and the reasonableness of the accounting
estimates and related disclosures made by the management.
- reach a conclusion on the appropriateness of the accounting basis, used by the management, based on
the going concern assumption, and, based on the audit evidence obtained as to whether there is a material
uncertainty related to events or conditions that might provoke significant doubts on the Company's ability to
continue functioning as a going concern. If we reach the conclusion that there is a significant uncertainty, we
are required to draw attention in our audit report to the disclosures related to this uncertainty in the financial
statements or in the event that these disclosures are inadequate to modify our opinion. Our conclusions are
based on audit evidence obtained before the date of our auditor report. Future events or conditions may,
however, cause the Company to suspend its operations as a going concern.
- evaluate the overall performance, structure and contents of the financial statements, including the
disclosures and whether the financial statements present material transactions and events in a manner that
achieves fair presentation.
Communication with the persons, engaged with general governance
We communicate with the persons, engaged with general governance, among other matters, the
planned scope and timing of the audit and significant audit findings, including any significant deficiencies in
internal control that we identify during our audit.
We also provide the persons, engaged with general governance with a statement that we have
complied with relevant ethical requirements regarding independence and that we will communicate with
them all relationships and other matters that may reasonably be considered relevant to our independence,
and, where applicable, the actions taken to eliminate threats or safeguards applied.
Among the matters communicated with the persons, engaged with general governance, we determine
those matters that were of most significance in the audit of the financial statements of the current period and
are therefore the key audit matters. We describe these matters in our auditor report except when the law or
regulation precludes public disclosure of information about the matter or when, in extremely rare
circumstances, we determine that a matter should not be communicated in our report because the adverse
consequences of doing so would reasonably be expected to outweigh the public interest benefits of such
communication.
REPORT RELATED TO OTHER LEGAL AND REGULATORY REQUIREMENTS
Additional issues subject to reporting pursuant to the Accountancy Act and the Public Offering
of Securities Act
In addition to our responsibilities and reporting under the International Audit Standards described
above under the section "Information other than the financial statements and the auditor report thereon" in
terms of the activity report, the corporate governance declaration and the report on the implementation of the
remuneration policy, we have also implemented procedures, added to those required under the International
Audit Standards as per the Guidelines on new and extended audit reports and auditor communication of the
professional organization of the Statutory Auditors in Bulgaria – the Institute of Certified Public Accountants
(ICPA). These procedures concern verifications on the availability as well as verifications on the form and
contents of such other information with the objective to assist us in forming our opinion on whether the other
information includes disclosures and reports provided for under Chapter Seven of the Accountancy Act and
the Public Offering of Securities Act (Art. 100n, para. 10 of the Public Offering of Securities Act in relation
to Art. 100n, para. 8, item. 3 and 4 of the Public Offering of Securities Act) as well as art. 100n, para 15 in
relation to Art.116c, para.1 of the Public Offering of Securities Act, applicable in Bulgaria.
Opinion with regard to Art. 37, Para. 6 of the Accountancy Act
Based on the procedures performed, our opinion is that:
a) The information included in the activity report for the financial year for which the financial
statements are prepared is consistent with the financial statements.
b) The activity report is prepared in accordance with the requirements of Chapter seven of the
Accountancy Act and Art. 100n, Para. 7 of the Public Offering of Securities Act.
c) The corporate governance declaration for the financial year for which the financial statements are
prepared presents the information as required by Chapter seven of the Accountancy Act and Art. 100n, Para.
8 of the Public Offering of Securities Act.
d) The report on the implementation of the Remuneration Policy for the financial year for which the
financial statements are prepared is presented and meets the requirements set out in the ordinance under Art.
116c, para. 1 of the Public Offering of Securities Act.
Opinion with regard to Art. 100n, Para. 10 and in relation to Art. 100n, Para 8, Items 3 and 4 of the
Public Offering of Securities Act
Based on the audit procedures performed and the acquired knowledge and understanding of the
company's activities and the environment it operates in, our opinion is that the description of the main
characteristics of the internal control and risk management systems of the company in relation to the
financial reporting process, which is part of the activity report (as part of the contents of the corporate
governance declaration) and the information under Article 10, Paragraph 1, Letters "c", "d", "f", "h" and "i"
of Directive 2004/25/EC of the European Parliament and of the Council of 21 April 2004 regarding take-
over offers, does not contain materially incorrect reporting.
Additional reporting on the financial statements audit in connection with Art. 100n, Para. 4,
Item 3 of the Public Offering of Securities Act
Statement with regard to Art. 100n, Para. 4, Item 3, letter "b" of the Public Offering of Securities Act
Information on related parties’ transactions is disclosed under Enclosure to the financial statements.
Based on the audit procedures that we conducted in terms of the related parties’ transactions as part of our
audit of the financial statements as a whole, no facts, circumstances or other information has become known
to us, based on which to conclude that the related parties’ transactions are not disclosed in the accompanying
financial statements for the year ended on 31.12.2025 in all material aspects, in accordance with IAS 24
"Related Party Disclosures". The results from our audit procedures on related parties’ transactions have been
reviewed in the context of forming our opinion on the financial statements as a whole, but not to express a
separate opinion on related parties’ transactions.
Statement with regard to Art. 100n, Para. 4, Item 3, letter "c" of the Public Offering of Securities Act
Our responsibilities for the audit of the financial statements as a whole, described in the section of our
report "Responsibilities of the auditor for the audit of the financial statements" include an assessment on
whether the financial statements present material transactions and events in a manner that achieves fair
presentation. Based on the audit procedures performed on essential transactions underlying the financial
statements for the year ended on 31.12.2025, no facts, circumstances or other information has become known
to us, based on which to conclude that there are cases of materially incorrect reporting and disclosure in
accordance with the requirements of IFRS adopted by the European Union. The results from our audit
procedures on the material to the financial statements transactions and events of the Company are reviewed
by us in the context of forming our opinion on the financial statements as a whole, but not to express a
separate opinion on these material transactions.
Statement with regard to Commission Delegated Regulation (EU) 2019/815 of 17 December 2018
supplementing Directive 2004/109/EC of the European Parliament and of the Council ("EEEF Regulation")
In addition to our responsibilities and our reporting under IAS, described above in the section
"Responsibilities of the auditor for the audit of the financial statements", we have followed the procedures in
accordance with the "Guidelines on the expression of the Audit Opinion with regard to the implementation
of the Single European Electronic Format (EEEF) for the financial statements of companies whose securities
are admitted to trading on a regulated market in the European Union (EU)" of the professional organization
of registered auditors in Bulgaria, the Institute of the Certified Public Accountants (ICPA)". These
procedures concern verification of the format and whether the readable part of this electronic format
corresponds to the audited separate financial statements and expressing an opinion regarding the compliance
of the electronic format of the separate financial statements of Stara Planina Hold Plc for the year ended on
31 December 2024 attached in the electronic file „8945006HQ7VN30FUR531-20251231-EN-SEP “ with the
requirements of Commission Delegated Regulation (EU) 2019/815 of 17 December 2018 supplementing
Directive 2004/109 / EC of the European Parliament and of the Council by means of regulatory technical
standards to define the uniform electronic format for reporting ("EEEF Regulation"). Based on these
requirements, the electronic format of the separate financial statements included in the annual separate report
on the activities under Art. 100n, para. 4 of the Public Offering of Securities Act must be provided in
XHTML format.
Based on the performed procedures, our opinion is that the electronic format of the individual financial
statements of Stara Planina Hold AD for the year ending December 31, 2025, contained in the attached
electronic file „8945006HQ7VN30FUR531-20251231-EN-SEP“, has been prepared in all material aspects in
accordance with the requirements of the EEEF Regulation.
Reporting under Art. 10 of Regulation (EC) No 537/2014 in relation to the requirements of Art.
59 of the Independent Financial Audit and Sustainability Assurance Act
Pursuant to the requirements of the Independent Financial Audit Act in relation to Art. 10 of
Regulation (EC) No 537/2014, we further report the following information.
- Katya Zlatareva as a key auditor was appointed as a statutory auditor of the financial statement for
the year ended on 31.12.2025 of Stara Planina Hold Plc ("the Company") at the General Meeting of
Shareholders held on 5.06.2025 for a period of one year.
- The audit of the financial statements for the year ended on 31.12.2025 of the Company represents a
sixth full continuous commitment to a statutory audit of this enterprise, performed by us.
- We confirm that our audit opinion is consistent with the additional report provided to the Audit
Committee of the Company in accordance with the requirements of Art. 60 of the Independent Financial
Audit and Sustainability Assurance Act.
- We confirm that we have not provided the banned services except for the audit as specified under
Art. 64 of the Independent Financial Audit and Sustainability Assurance Act.
- We confirm that we have preserved our independence in relation to the Company when conducting
the audit.
- For the period covered by our statutory audit, apart from the audit, we have not provided any other
services to the Company and the entities under the control of the Company.
Responsible auditor:
/Katya Zlatareva, registered auditor, diploma No. 0610/
1000, Sofia, 52, Simeon Radev Str.
Date: 30.03.2026
KATYA
RAYKOVA
ZLATAREVA
Digitally signed by
KATYA RAYKOVA
ZLATAREVA
Date: 2026.03.30
14:12:22 +03'00'
TO
THE SHAREHOLDERS OF
STARA PLANINA HOLD AD
DECLARATION
PURSUANT TO ART. 100N, PARA.4, ITEM.3 OF
THE PUBLIC OFFERING OF SECURITIES ACT
The undersigned Katya Zlatareva, registered auditor, diploma № 0610, appointed statutory auditor of
the financial statements for the year ended 31.12.2025 of Stara Planina Hold Plc (the Company) by the
General Meeting of Shareholders held on 06.06.2024, for period of one year, based on Art. 100n, para. 4,
item 3 of the Public Offering of Securities Act I DECLARE that:
1. Art. 100n, para. 4, item 3, letter “a” of the POSA: In our opinion, the attached separate annual
financial statements, prepared in accordance with the applicable accounting standards, accurately and fairly
reflect the information on the assets and liabilities, financial condition and profit or loss of the Company as
of 31.12.2025, in accordance with International Financial Reporting Standards from the European Union.
2. Art. 100n, para. 4, item 3, letter “b” of the POSA: In our opinion, the information relating to
related party transactions has been properly announced and disclosed in accordance with applicable
accounting standards. Based on our audit procedures on related party transactions as part of our audit of the
annual financial statements as a whole, we have not become aware of any facts, circumstances or other
information on the basis of which we can conclude that related party transactions are not disclosed in the
attached separate annual financial statements for the year ended on 31 December 2025, in all material
aspects, in accordance with the requirements of IAS 24 “Related Party Disclosures”. The results of our audit
procedures on related party transactions are reviewed by us in the context of forming our opinion on the
annual financial statements as a whole, and not for the purpose of expressing a separate opinion on related
party transactions.
3. Art. 100n, para. 4, vol. 3, p. "C" of the POSA: In our opinion, the information relating to the
material transactions for the public company for the respective reporting period is duly disclosed in the notes
to the financial statements. Our responsibilities for auditing the separate annual financial statements as a
whole, described in the section Responsibilities of the Auditor for the Audit of the Financial Statements,
include assessment on whether the separate annual financial statements present material transactions and
events in a manner that provides reliable presentation. Based on our audit procedures on the material
transactions underlying the separate annual financial statements for the year ended on 31 December 2025, we
are not aware of any facts, circumstances or other information on the basis of which we can conclude that
there are cases of material misstatement in accordance with the applicable requirements of IFRS adopted by
the European Union. The results of our audit procedures on the material transactions and events of the
Company are considered by us in the context of forming our opinion on the separate annual financial
statements as a whole, and not for the purpose of expressing a separate opinion on these material
transactions.
Certifications made with this declaration should be considered only in the context of the audit report
issued by us as a result of the independent financial audit of the separate annual financial statements of Stara
Planina Hold Plc for the reporting period ending on 31 December 2024, with the date of the auditor's report
March 30, 2025. This declaration is intended only for the above addressee and has been prepared solely in
compliance with the requirements of Art. 100n, para. 4, item 3 of the Public Offering of Securities Act and
should not be taken as a substitute for our conclusions included in the audit report issued by us on March 30,
2025 in relation to the issues covered by Art. 100n, item 3 of the Public Offering of Securities Act.
Responsible auditor: /Katya Zlatareva, registered auditor, diploma No. 0610/
1000, Sofia, 52, Simeon Radev Str.
Date: 30.03.2026
KATYA
RAYKOVA
ZLATAREVA
Digitally signed by
KATYA RAYKOVA
ZLATAREVA
Date: 2026.03.30
14:12:59 +03'00'