INDUSTRIAL HOLDING BULGARIA PLC

NOTES TO THE FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 31 MARCH 2013

#### 11. Non-current tangible and intangible assets (continued)

The Company has no limitations imposed in respect of the title of ownership of tangible non-current assets, and there are no assets pledged as collateral on liabilities or for other reasons.

########## Intangible Assets

As the non-current intangible assets held by the Company represent an insignificant portion, no detailed note on their movement for the period has been prepared. The carrying amount of non-current intangible assets as at 31 March 2013 is BGN 117 thousand (31.12.2012: BGN 63 thousand). The increase is due to reported acquisition costs associated with improvements to new leased office in which the Company moved earlier in 2013. The depreciation charged for the period amounts to BGN 3 thousand.

### 12. Investments in subsidiaries

Investments held by the Company as of 31 March 2013 and 31 December 2012 are as follows:

31.03.2013	31.12.2012
In BGN thousand	Country	Amount of participation	Percentage of participation	Amount of participation	Percentage of participation
ZMM Bulgaria Holding AD	Bulgaria	7,885	99.998	7,885	99.998
Privat Engineering AD	Bulgaria	56,992	99.790	56,992	99.790
Dockyard Port Burgas AD	Bulgaria	4,774	99.640	4,774	99.640
Bulyard AD	Bulgaria	11,682	61.500	11,682	61.500
Maritime Holding AD	Bulgaria	400	61.000	400	61.000
International Industrial Holding Bulgaria AG	Switzerland	130	100.000	130	100.000
KLVK AD	Bulgaria	39,980	64.47	39,980	64.47
Hydropower Bulgaria AD-in liquidation	Bulgaria	-	-
Rekolta 2011 EAD	Bulgaria	2,300	100.000	2,300	100.000
124,143	124,143

For the period 01.01 2013 - 31.03. 2013 there are no changes in the investment in subsidiaries and associates.

In 2012 the General Meeting of KLVK AD voted twice for the capital increase of the company – in March when the capital was increased by 2 515 873 ordinary registered voting shares with an issue price of BGN 3.15 each, and in May 2012 when the capital was increased by 4 900 000 new ordinary registered voting shares with an issue price of BGN 2,97 and a nominal value of BGN 1 each. IHB took part in the two capital increases: it subscribed for 100% of the shares in the first increase, and bought 86,56 % of the newly subscribed shares in the second increase. On 22 June 2012 the Registry Agency entered the capital increase of Privat Engineering AD from BGN 9 588 to BGN 10 788 through the issue of 1 200 000 new ordinary registered voting shares with a nominal value of BGN 1 each and an issue price of BGN 10. IHB took part in the capita increase and subscribed for 1 197 497 shares. The remaining shares were subscribed for by the shareholder Bulkari AD (indirect subsidiary of IHB). The Company holds 2 shares from the capital of Leyarmash AD, subsidiary of ZMM Bulgaria Holding.

########## Impairment test

As of 31.12.2012, the Company has made an analysis and has concluded that there are indications of impairment of investments in subsidiaries. As of 31.12.2012 the carrying value of these investments in Privat Engineering AD, KLVK AD and Bulyard amounts to BGN 56,992 thousand, BGN 39,980 thousand and BGN 11,682 thousand. As at 31.12. 2012 the Company has recognised an impairment loss on its investment in Bulyard at the amount of BGN 12,161 thousand.

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