NOT FOR DISTRIBUTION TO ANY U.S. PERSON OR TO ANY PERSON OR ADDRESS IN THE UNITEDSTATES.

IMPORTANT: You must read the following before continuing. The following applies to the base prospectusfollowing this page (the “Base Prospectus”), and you are therefore advised to read this carefully before reading, accessingor making any other use of this Base Prospectus. In accessing this Base Prospectus, you agree to be bound by the followingterms and conditions, including any modifications to them any time you receive any information from us as a result ofsuch access.

NOTHING IN THIS ELECTRONIC TRANSMISSION CONSTITUTES AN OFFER TO SELL OR THESOLICITATION OF AN OFFER TO BUY THE SECURITIES OF THE ISSUER IN THE UNITED STATES OR ANYOTHER JURISDICTION WHERE IT IS UNLAWFUL TO DO SO. THE SECURITIES AND THE GUARANTEEHAVE NOT BEEN, AND WILL NOT BE, REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, ASAMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE OF THE UNITEDSTATES OR OTHER JURISDICTION AND THE SECURITIES MAY NOT BE OFFERED OR SOLD WITHIN THEUNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS (AS DEFINED INREGULATION S UNDER THE SECURITIES ACT), EXCEPT PURSUANT TO AN EXEMPTION FROM, OR IN ATRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT ANDAPPLICABLE STATE OR LOCAL SECURITIES LAWS.

THE FOLLOWING BASE PROSPECTUS MAY NOT BE FORWARDED OR DISTRIBUTED TO ANY OTHERPERSON AND MAY NOT BE REPRODUCED IN ANY MANNER WHATSOEVER, AND IN PARTICULAR, MAYNOT BE FORWARDED TO ANY U.S. PERSON OR TO ANY U.S. ADDRESS. ANY FORWARDING,DISTRIBUTION OR REPRODUCTION OF THIS DOCUMENT IN WHOLE OR IN PART IS UNAUTHORISED.FAILURE TO COMPLY WITH THIS DIRECTIVE MAY RESULT IN A VIOLATION OF THE SECURITIES ACTOR THE APPLICABLE LAWS OF OTHER JURISDICTIONS.

This Base Prospectus has been delivered to you on the basis that you are a person into whose possession this BaseProspectus may be lawfully delivered in accordance with the laws of the jurisdiction in which you are located. Byaccessing this Base Prospectus, you shall be deemed to have confirmed and represented to us that (a) you have understoodand agree to the terms set out herein, (b) you consent to delivery of this Base Prospectus by electronic transmission and(c) you are not a U.S. person (within the meaning of Regulation S under the Securities Act) or acting for the account orbenefit of a U.S. person and the electronic mail address that you have given to us and to which this e-mail has beendelivered is not located in the United States, its territories and possessions (including Puerto Rico, the U.S. Virgin Islands,Guam, American Samoa, Wake Island and the Northern Mariana Islands) or the District of Columbia.

This Base Prospectus has been sent to you in an electronic form. You are reminded that documents transmitted via thismedium may be altered or changed during the process of electronic transmission and consequently none of NomuraInternational plc, Euro-Finance AD or Balkan Advisory Company IP EAD (the “Dealers”) nor any person who controlsany of them nor any director, officer, employee nor agent of any of them or affiliate of any such person accepts anyliability or responsibility whatsoever in respect of any difference between this Base Prospectus distributed to you inelectronic format and the hard copy version available to you on request from the Dealers.

EuroHold Bulgaria AD(incorporated with limited liability in Bulgaria)

EUR 200,000,000Euro Medium Term Note Programme

unconditionally and irrevocably guaranteed byEuroins Insurance Group AD

(incorporated with limited liability in Bulgaria)Under this EUR 200,000,000 Euro Medium Term Note Programme (the “Programme”), EuroHold Bulgaria AD (the “Issuer”) may from time to time issue notes(“Notes”) in tranches (each, a “Tranche”) denominated in any currency and on such other terms as may be agreed between the Issuer and the relevant Dealer (as definedbelow) in accordance with the terms set out in this base prospectus (the “Base Prospectus”) and specified in a final terms document (the “Final Terms”), (or, in the caseof “Exempt Notes” (as defined below), the pricing supplement (as defined below)), which should be read together for the purpose of any particular Tranche of Notes.

The payment of all amounts due in respect of the Notes will be unconditionally and irrevocably guaranteed by Euroins Insurance Group AD (the “Guarantor”) pursuantto a guarantee (the “Guarantee”) dated 15 November 2016 and executed by the Guarantor.

Notes may be issued in bearer or registered form (respectively “Bearer Notes” and “Registered Notes”). The maximum aggregate nominal amount of all Notes fromtime to time outstanding under the Programme will not exceed EUR 200,000,000 (or its equivalent in other currencies calculated as provided in the “ProgrammeAgreement” described herein), subject to increase in accordance with the terms of the Programme Agreement (as defined below).

Notes may be issued on a continuing basis to one or more of the Dealers specified under “Overview of the Programme” and any additional Dealer appointed under theProgramme from time to time by the Issuer (each a “Dealer” and together the “Dealers”), with any such appointment being for a specific issue or on an ongoing basis.References in this Base Prospectus to the relevant Dealer shall, in the case of an issue of Notes being (or intended to be) subscribed by more than one Dealer, be to allDealers agreeing to subscribe such Notes.

An investment in Notes issued under the Programme involves certain risks. For a discussion of these risks see “Risk Factors” on pages 1 to 15.

Application has been made to the Central Bank of Ireland, as competent authority for the purpose of Directive 2003/71/EC, as amended (which includes the amendmentsmade by Directive 2010/73/EU, (the “Prospectus Directive”) to approve this document as a base prospectus in accordance with the requirements imposed under EuropeanUnion (“EU”) and Irish law pursuant to the Prospectus Directive for the purpose of giving information with regard to the issue of Notes under the Programme describedin this Base Prospectus during the period of 12 months after the date hereof. Such approval relates only to Notes which are to be admitted to trading on a regulatedmarket for the purposes of Directive 2004/39/EC and/or which are to be offered to the public in any Member State of the European Economic Area.

Application has also been made to the Irish Stock Exchange for Notes issued under the Programme during the period of 12 months after the date hereof to be admitted tothe official list (the “Official List”) and to trading on the regulated market of the Irish Stock Exchange (the “Main Securities Market”).

References in this Base Prospectus to Notes being listed (and all related references) shall mean that such Notes have been admitted to the Official List and to trading onthe Main Securities Market. The Main Securities Market is a regulated market for the purposes of the Markets in Financial Instruments Directive (Directive 2004/39/EC)(the “Markets in Financial Instruments Directive” or “MiFID”). The requirement to publish a prospectus under the Prospectus Directive only applies to Notes whichare to be admitted to trading on a regulated market in the European Economic Area and/or offered to the public in the European Economic Area other than in circumstanceswhere an exemption is available under Article 3.2 of the Prospectus Directive. References in this Base Prospectus to Exempt Notes are to Notes which are neither to beadmitted to trading on a regulated market for the purposes of MiFID in the European Economic Area, nor offered in the European Economic Area in circumstances wherea prospectus is required to be published under the Prospectus Directive. The Central Bank of Ireland has neither approved nor reviewed information contained in thisBase Prospectus in connection with Exempt Notes.

Notice of the aggregate nominal amount of Notes, interest (if any) payable in respect of Notes, the issue price of Notes and any other terms and conditions not containedherein which are applicable to each Tranche of Notes (other than in the case of Exempt Notes, as defined below) will be set out in the Final Terms relevant to that Tranchewhich, with respect to Notes to be listed on the Irish Stock Exchange will be filed with the Central Bank of Ireland. Copies of Final Terms in relation to Notes to belisted on the Irish Stock Exchange will also be published on the website of the Irish Stock Exchange. In the case of Exempt Notes, notice of the aggregate nominal amountof Notes, interest (if any) payable in respect of the Notes and certain other information which is applicable to the relevant Tranche of Exempt Notes will be set out in apricing supplement document (the “Pricing Supplement”). Copies of Pricing Supplements in relation to Exempt Notes will only be obtainable by a holder of such Notesand such holder must produce evidence satisfactory to the Issuer or, as the case may be, the relevant Paying Agent as to its holding of such Notes and as to its identity.

The Programme provides that Notes may be listed or admitted to trading, as the case may be, on such other or further stock exchanges or markets as may be determinedby the Issuer and the Guarantor and notified to the relevant Dealer. The Issuer may also issue unlisted Notes or Notes not admitted to trading on any market.

The Notes and the Guarantee have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”) or under the securitieslaws of any state or other jurisdiction of the United States and may not be offered or sold, directly or indirectly, in or into the United States or to, or for the account or thebenefit of, U.S. persons (as defined in Regulation S under the Securities Act (“U.S. persons”)) except pursuant to an exemption from the registration requirements of theSecurities Act and otherwise in accordance with all applicable securities laws of any state or other jurisdiction of the United States. See “Form of the Notes” for adescription of the manner in which Notes will be issued. Registered Notes are subject to certain restrictions on transfer. See “Subscription and Sale and Transfer andSelling Restrictions”.

The Issuer and the Guarantor may agree with any Dealer that Notes may be issued in a form not contemplated by the Terms and Conditions of the Notes herein, in whichevent a supplement to the Base Prospectus, in the case of listed Notes only, if appropriate, will be made available which will describe the effect of the agreement reachedin relation to such Notes.

The Programme will not be rated. The rating of certain Series of Notes to be issued under the Programme may be specified in the applicable Final Terms or, in the caseof Exempt Notes, the applicable Pricing Supplement. Whether or not each credit rating applied for in relation to relevant Series of Notes will be issued by a credit ratingagency established in the European Union and registered under Regulation (EC) № 1060/2009 (as amended) (the “CRA Regulation”) will be disclosed in the FinalTerms. Please also refer to “Risk Factors—Risk related to market generally—Ratings of the Notes”.

A rating is not a recommendation to buy, sell or hold securities and may be subject to suspension, revision or withdrawal at any time by the assigning rating agent.

Arranger

Nomura

Dealers

Nomura Euro-Finance AD Balkan Advisory Company IP EAD

The date of this Base Prospectus is 15 November 2016.

i

This Base Prospectus comprises a base prospectus in respect of all Notes (other than Exempt Notes) for the purposes ofArticle 5.4 of the Prospectus Directive. This Base Prospectus should be read and construed together with any supplementshereto and, in relation to any Tranche of Notes, should be read and construed with the relevant Final Terms or PricingSupplement, as applicable.

The Issuer and the Guarantor (the “Responsible Persons”) accept responsibility for the information contained in thisBase Prospectus and each Final Terms or Pricing Supplement, as applicable. To the best of the knowledge of the Issuerand the Guarantor (each having taken all reasonable care to ensure that such is the case) the information contained in thisBase Prospectus is in accordance with the facts and does not omit anything likely to affect the import of such information.

Subject as provided in the applicable Final Terms, the only persons authorised to use this Base Prospectus in connectionwith an offer of Notes are the persons named in the applicable Final Terms as the relevant Dealer or the Managers, as thecase may be.

Copies of Final Terms will be available from the registered office of the Issuer and the specified office set out on the backcover of this Base Prospectus for each of the Paying Agents.

Certain information under the heading “Book-entry Clearance Systems” has been extracted from information provided bythe clearing systems referred to therein and from. In addition, certain market share information has been extracted frominformation published or compiled by the Bulgarian Financial Supervision Commission (the “FSC”), the RomanianFinancial Supervisory Authority (the “ASF”), the Insurance Supervision Agency of the Republic of Macedonia, the StateCommission for Regulation of Financial Services Markets of Ukraine and the Association of Car Manufacturers andAuthorised Representatives for Bulgaria (“ACM”). Each of the Issuer and the Guarantor confirms that such informationhas been accurately reproduced and that, so far as it is aware and is able to ascertain from information published by therelevant clearing systems, the FSC, the ASF, the Insurance Supervision Agency of the Republic of Macedonia, the StateCommission for Regulation of Financial Services Markets of Ukraine and the ACM, no facts have been omitted whichwould render the reproduced information inaccurate or misleading. In respect of statistics compiled by the ACM, statisticspublished by other entities may differ from those published by ACM as ACM’s figures rely on figures provided to it byindividual companies and certain companies only provide information to ACM for one or certain brands of cars they sell.Accordingly, investors should have caution when reviewing and relying on figures expressed in this Base Prospectus tohave been published by ACM.

The Dealers have not independently verified the information contained herein. Accordingly, no representation, warrantyor undertaking, express or implied, is made and no responsibility or liability is accepted by the Dealers as to the accuracyor completeness of the information contained or incorporated in this Base Prospectus or any other information providedby the Issuer or the Guarantor in connection with the Programme. No Dealer accepts any liability in relation to theinformation contained or incorporated by reference in this Base Prospectus or any other information provided by theIssuer or the Guarantor in connection with the Programme.

No person is or has been authorised by the Issuer or the Guarantor to give any information or to make any representationnot contained in or not consistent with this Base Prospectus or any other information supplied in connection with theProgramme or the Notes and, if given or made, such information or representation must not be relied upon as having beenauthorised by the Issuer, the Guarantor or any of the Dealers.

Neither this Base Prospectus nor any other information supplied in connection with the Programme or any Notes (i) isintended to provide the basis of any credit or other evaluation or (ii) should be considered as a recommendation by theIssuer, the Guarantor or any of the Dealers that any recipient of this Base Prospectus or any other information supplied inconnection with the Programme or any Notes should purchase any Notes. Each investor contemplating purchasing anyNotes should make its own independent investigation of the financial condition and affairs of the Issuer, consult its ownlegal and other advisers for any such advice relevant to it, and make its own appraisal of the creditworthiness of the Issuer,the Guarantor and its direct and indirect subsidiaries (the “Group”). Neither this Base Prospectus nor any otherinformation supplied in connection with the Programme or the issue of any Notes constitutes an offer or invitation by oron behalf of the Issuer or the Guarantor or any of the Dealers to any person to subscribe for or to purchase any Notes.

Neither the delivery of this Base Prospectus nor the offering, sale or delivery of any Notes shall in any circumstancesimply that the information contained herein concerning the Issuer, the Guarantor and the Group, the Programme or theNotes is correct at any time subsequent to the date hereof or that any other information supplied in connection with theProgramme is correct as of any time subsequent to the date indicated in the document containing the same. The Dealersexpressly do not undertake to review the financial condition or affairs of the Issuer or the Guarantor during the life of theProgramme or to advise any holder of Notes of any information coming to their attention.

ii

This Base Prospectus does not constitute an offer to sell or the solicitation of an offer to buy any Notes in any jurisdictionto any person to whom it is unlawful to make the offer or solicitation in such jurisdiction. The distribution of this BaseProspectus and the offer or sale of Notes may be restricted by law in certain jurisdictions. None of the Issuer, theGuarantor nor any of the Dealers represent that this Base Prospectus may be lawfully distributed, or that any Notes maybe lawfully offered, in compliance with any applicable registration or other requirements in any such jurisdiction, orpursuant to an exemption available thereunder, or assume any responsibility for facilitating any such distribution oroffering. In particular, unless specifically indicated to the contrary in the applicable Final Terms, no action has beentaken by the Issuer, the Guarantor or the Dealers which is intended to permit a public offering of any Notes or distributionof this Base Prospectus in any jurisdiction where action for that purpose is required. Accordingly, no Notes may beoffered or sold, directly or indirectly, and neither this Base Prospectus nor any advertisement or other offering materialmay be distributed or published in any jurisdiction, except under circumstances that will result in compliance with anyapplicable laws and regulations. Persons into whose possession this Base Prospectus or any Notes may come must informthemselves about, and observe, any such restrictions on the distribution of this Base Prospectus and the offering and saleof Notes. In particular, there are restrictions on the distribution of this Base Prospectus and the offer and sale of Notes inthe United States and the European Economic Area (including the United Kingdom and Bulgaria). See “Subscriptionand Sale and Transfer and Selling Restrictions”.

This Base Prospectus has been prepared on the basis that any offer of Notes in any Member State of the EuropeanEconomic Area which has implemented the Prospectus Directive (each, a “Relevant Member State”), will be madepursuant to an exemption under the Prospectus Directive, as implemented in that Relevant Member State, from therequirement to publish a prospectus for offers of Notes. Accordingly any person making or intending to make an offer inthat Relevant Member State of Notes which are the subject of an offering contemplated in this Base Prospectus ascompleted by the applicable Final Terms may do so only in circumstances in which no obligation arises for the Issuer,the Guarantor or any Dealer to publish a prospectus pursuant to Article 3 of the Prospectus Directive or supplement aprospectus pursuant to Article 16 of the Prospectus Directive, in each case, in relation to such offer. None of the Issuer,the Guarantor nor any Dealer has authorised, nor does any such person authorise, the making of any offer of Notes incircumstances in which an obligation arises for the Issuer, the Guarantor or any Dealer to publish or supplement aprospectus for such offer.

In making an investment decision, investors must rely on their own examination of the Issuer and the Guarantor and theterms of the Notes being offered, including the merits and risks involved. The Notes and the Guarantee have not beenapproved or disapproved by the U.S. Securities and Exchange Commission or any state securities commission or otherregulatory authority in the United States, nor have the foregoing authorities reviewed, passed upon or endorsed the meritsof any offering and sale of Notes or the accuracy or adequacy of this Base Prospectus. Any representation to the contraryis unlawful.

None of the Dealers, the Issuer or the Guarantor makes any representation to any investor in the Notes regarding thelegality of its investment under any applicable laws. Any investor in the Notes should be able to bear the economic riskof an investment in the Notes for an indefinite period of time.

iii

PRESENTATION OF FINANCIAL AND OTHER INFORMATION

Presentation of Financial Information

Unless otherwise indicated, the financial information in this Base Prospectus relating to the Issuer has been derived from(i) the audited consolidated financial statements of the Issuer as at and for the year ended 31 December 2014 (the “Issuer’s2014 Financial Statements”), (ii) the audited consolidated financial statements of the Issuer as at and for the year ended31 December 2015 (the “Issuer’s 2015 Financial Statements”) and (iii) the unaudited reviewed consolidated financialstatements of the Issuer as at and for the six months ended 30 June 2016, which includes comparative figures as at andfor the six months ended 30 June 2015 (the “Issuer’s Interim Financial Statements”) (collectively, the “Issuer’sFinancial Statements”).

The Issuer’s financial year ends on 31 December and references in this Base Prospectus to any specific year are to the 12-month period ended on 31 December of such year. The Issuer’s Financial Statements have been prepared in accordancewith International Financial Reporting Standards (“IFRS”) issued by the International Accounting Standards Board (the“IASB”).

Unless otherwise indicated, the financial information in this Base Prospectus relating to the Guarantor has been derivedfrom (i) the audited consolidated financial statements of the Guarantor as at and for the year ended 31 December 2014(the “Guarantor’s 2014 Financial Statements”), (ii) the audited consolidated financial statements of the Guarantor asat and for the year ended 31 December 2015 (the “Guarantor’s 2015 Financial Statements”) and (iii) the unauditedreviewed consolidated financial statements of the Guarantor as at and for the six months ended 30 June 2016, whichincludes comparative figures as at and for the six months ended 30 June 2015 (the “Guarantor’s Interim FinancialStatements”) (collectively, the “Guarantor’s Financial Statements”, and together with the Issuer’s FinancialStatements, the “Financial Statements”).

The Guarantor’s financial year ends on 31 December and references in this Base Prospectus to any specific year are tothe 12-month period ended on 31 December of such year. The Guarantor’s Financial Statements have been prepared inaccordance with IFRS issued by the IASB.

The 2014 comparative information included in the Issuer’s 2015 Financial Statements has been restated (see “Operatingand Financial Review——Restatements and Audit Reports”). The Issuer’s management (“Management”) believes thatthis restatement has no material impact on the financial condition, results of operations or equity of the Group. Investorsshould be aware that the financial data for the Group set out in this Base Prospectus as at and for the year ended 31December 2014 is taken from the Issuer’s 2015 Financial Statements and, accordingly, comparative data differs in certainrespects from the corresponding data previously published.

See “Operating and Financial Review—Restatements and Audit Reports” for a description of the audit and review reportsthat accompany the Financial Statements.

Certain Defined Terms and Conventions

Capitalised terms which are used but not defined in any particular section of this Base Prospectus will have the meaningattributed thereto in “Terms and Conditions of the Notes” or any other section of this Base Prospectus.

• Certain figures and percentages included in this Base Prospectus have been subject to rounding adjustments;accordingly figures shown in the same category presented in different tables may vary slightly and figures shownas totals in certain tables may not be an arithmetic aggregation of the figures which precede them.

• Notes may not be a suitable investment for all investors. Each potential investor in the Notes must determinethe suitability of that investment in light of its own circumstances. In particular, each potential investor should:have sufficient knowledge and experience to make a meaningful evaluation of the Notes, the merits and risks ofinvesting in the Notes and the information contained or incorporated by reference in this Base Prospectus or anyapplicable supplement;

• have access to, and knowledge of, appropriate analytical tools to evaluate, in the context of its particular financialsituation, an investment in the Notes and the impact the Notes will have on its overall investment portfolio;

• have sufficient financial resources and liquidity to bear all of the risks of an investment in the Notes, includingNotes with principal or interest payable in one or more currencies, or where the currency for principal or interestpayments is different from the potential investor’s currency;

iv

• understand thoroughly the terms of the Notes and be familiar with the behaviour of any relevant indices andfinancial markets; and

• be able to evaluate (either alone or with the help of a financial adviser) possible scenarios for economic, interestrate and other factors that may affect its investment and its ability to bear the applicable risks.

Some Notes are complex financial instruments. Sophisticated institutional investors generally do not purchase complexfinancial instruments as stand-alone investments. They purchase complex financial instruments as a way to reduce riskor enhance yield with an understood, measured, appropriate addition of risk to their overall portfolios. A potential investorshould not invest in Notes which are complex financial instruments unless it has the expertise (either alone or with afinancial adviser) to evaluate how the Notes will perform under changing conditions, the resulting effects on the value ofthe Notes and the impact this investment will have on the potential investor’s overall investment portfolio.

Legal investment considerations may restrict certain investments. The investment activities of certain investors are subjectto legal investment laws and regulations, or review or regulation by certain authorities. Each potential investor shouldconsult its legal advisers to determine whether and to what extent (i) Notes are legal investments for it, (ii) Notes can beused as collateral for various types of borrowing and (iii) other restrictions apply to its purchase or pledge of any Notes.Financial institutions should consult their legal advisors or the appropriate regulators to determine the appropriatetreatment of Notes under any applicable risk-based capital or similar rules.

In this document, all references to U.S. Dollars, U.S.$ and $ are to United States dollars; all references to Euro, EUR and€ are to the currency introduced at the start of the third stage of European economic and monetary union pursuant to theTreaty on the functioning of the European Union; all references to BGN, Lev and лв are to Bulgarian Lev; and allreferences to RON and Lei are to Romanian Leu.

References to a billion are to a thousand million.

v

Presentation of Alternative Performance Measures

In this Base Prospectus, the Group uses the following metrics in the analysis of its business and financial position, whichthe Issuer considers to constitute Alternative Performance Measures (“APMs”), as defined in the European Securities andMarket Authority Guidelines on Alternative Performance Measures dated 5 October 2015 (the “ESMA Guidelines”).

Set out below is a summary of the APM metrics used, the definition, bases of calculation and reconciliation of suchmetrics and the rationale for the inclusion of such metrics.

MetricDefinition, method of calculation and reconciliation tofinancial statement line item Rationale

Revenue growth rate Calculated as the difference between the current and previousperiod revenue, divided by previous period revenue.

Performance measure

EBIT Calculated as revenue minus expenses, excluding tax andinterest.

Performance measure

EBITDA (last twelve months) Calculated as revenue minus expenses, excluding tax, interest,depreciation and amortisation.

Performance measure

Total Debt (including currentportion)

Calculated as the sum of current and non-current liabilities tobanking and non-banking financial institutions, including bondobligations and other non-current liabilities.

Performance measure

Long Term Debt Calculated as the sum of non-current liabilities to banking andnon-banking financial institutions, including non-currentobligations on issued bonds and other non-current liabilities.

Performance measure

Total Debt (excluding leasing) Calculated as total debt minus all financial indebtedness of theGroup’s leasing business (including leasing liabilities to bankingand non-banking financial institutions and obligations on issuedbonds).

Performance measure

Debt to equity ratio Calculated as total debt divided by the sum of total equity andsubordinated debt.

Performance measure

The above APMs have been included in this Base Prospectus to facilitate a better understanding of the Group’s historictrends of operation and financial condition. The Group uses APMs as supplementary information to its IFRS operatingresults. See the Financial Statements incorporated by reference into this Base Prospectus, which have been prepared inaccordance with IFRS. The APMs are not defined by, or presented in accordance with, IFRS. The APMs are notmeasurements of the Group’s operating performance under IFRS and should not be considered as alternatives to anymeasures of performance under IFRS. In addition, other companies, including those in the Group’s industry, may calculatesimilarly titled APMs differently from the Group. Because companies do not calculate these APMs in the same manner,the Group’s presentation of such APMs may not be comparable to other similarly titled APMs used by other companies.EBIT and EBITDA are line items included in the Issuer’s consolidated statement of profit or loss. See the Issuer’sFinancial Statements incorporated by reference into this Base Prospectus.

vi

CAUTIONARY STATEMENT REGARDING FORWARD LOOKING STATEMENTS

Some statements in this Base Prospectus or any related supplement, Final Terms or Pricing Supplement may be deemedto be forward looking statements. Forward looking statements include statements concerning the Issuer’s and/or theGuarantor’s plans, objectives, goals, strategies, future operations and performance and the assumptions underlying theseforward looking statements. When used in this Base Prospectus, the words “anticipates”, “estimates”, “expects”,“believes”, “intends”, “plans”, “aims”, “seeks”, “may”, “will”, “should” and any similar expressions generally identifyforward looking statements. These forward looking statements are contained in the sections entitled “Risk Factors”,“Business” and “Operating and Financial Review” and other sections of this Base Prospectus. The Issuer and theGuarantor have based these forward looking statements on the current view of their management with respect to futureevents and financial performance. Although each of the Issuer and the Guarantor believes that the expectations, estimatesand projections reflected in its forward looking statements are reasonable as of the date of this Base Prospectus, if one ormore of the risks or uncertainties materialise, including those identified below or which the Issuer and/or the Guarantorhas otherwise identified in this Base Prospectus, or if any of the Issuer’s and/or the Guarantor’s underlying assumptionsprove to be incomplete or inaccurate, the Issuer’s and/or the Guarantor’s actual results of operation may vary from thoseexpected, estimated or predicted.

The risks and uncertainties referred to above include:

• the Group’s ability to achieve and manage the growth of its business;

• the Group’s ability to realise its strategic objectives;

• the Group’s ability to complete, integrate and manage acquisitions;

• the Group’s ability to obtain external financing or maintain sufficient capital to fund its existing and futureinvestments and projects;

• the performance of the markets in Bulgaria and countries within the Central and Eastern European/South-EastEuropean (CEE/SEE) region (and the wider region in which the Group operates);

• changes to the regulatory framework in the businesses in which the Group operates; and

• changes in political, social, legal or economic conditions in the markets in which the Group and its customersoperate.

Any forward looking statements contained in this Base Prospectus speak only as at the date of this Base Prospectus.Without prejudice to any requirements under applicable laws and regulations, each of the Issuer and the Guarantorexpressly disclaims any obligation or undertaking to disseminate after the date of this Base Prospectus any updates orrevisions to any forward looking statements contained herein to reflect any change in expectations thereof or any changein events, conditions or circumstances on which any such forward looking statement is based.

vii

SUPPLEMENTS TO THIS BASE PROSPECTUS

The Issuer and the Guarantor have undertaken, in connection with the listing of Notes, that in the event of a change in thecondition of the Group, which is material in the context of the Programme or the issue of Notes, and if there is a significantnew factor, material mistake or inaccuracy relating to the information contained in this Base Prospectus, which is capableof affecting the assessment of any Notes, the inclusion of which would be required by investors for the purpose of makingan informed assessment of the assets and liabilities, financial position, profit and losses and prospects of the Group, andthe rights attaching to the relevant Notes, the Issuer and the Guarantor will, if required to do so pursuant to Article 16 ofthe Prospectus Directive, prepare or procure the preparation of a supplement to this Base Prospectus or, as the case maybe, publish a new Base Prospectus, for use in connection with that or any subsequent issue by the Issuer of listed Notes.

viii

TABLE OF CONTENTS

Page

PRESENTATION OF FINANCIAL AND OTHER INFORMATION........................................................... iii

CAUTIONARY STATEMENT REGARDING FORWARD LOOKING STATEMENTS ............................vi

SUPPLEMENTS TO THIS BASE PROSPECTUS........................................................................................ vii

RISK FACTORS................................................................................................................................................1

DOCUMENTS INCORPORATED BY REFERENCE ...................................................................................16

OVERVIEW OF THE PROGRAMME ...........................................................................................................19

FORM OF THE NOTES..................................................................................................................................25

APPLICABLE FINAL TERMS.......................................................................................................................28

APPLICABLE PRICING SUPPLEMENT ......................................................................................................37

TERMS AND CONDITIONS OF THE NOTES.............................................................................................46

USE OF PROCEEDS .......................................................................................................................................90

SELECTED FINANCIAL INFORMATION AND OTHER DATA...............................................................91

OPERATING AND FINANCIAL REVIEW...................................................................................................94

BUSINESS .....................................................................................................................................................128

MANAGEMENT AND EMPLOYEES .........................................................................................................158

PRINCIPAL SHAREHOLDERS AND RELATED PARTY TRANSACTIONS.........................................164

BOOK-ENTRY CLEARANCE SYSTEMS ..................................................................................................165

TAXATION ...................................................................................................................................................166

SUBSCRIPTION AND SALE AND TRANSFER AND SELLING RESTRICTIONS................................170

GENERAL INFORMATION.........................................................................................................................175

ix

In connection with the issue of any Tranche of Notes, the Dealer or Dealers (if any) named as theStabilising Manager(s) (or persons acting on behalf of any Stabilising Manager(s)) in the applicableFinal Terms may over-allot Notes or effect transactions with a view to supporting the market price ofthe relevant Notes at a level higher than that which might otherwise prevail. However, there is noassurance that the Stabilising Manager(s) (or persons acting on behalf of a Stabilising Manager) willundertake stabilisation action. Any stabilisation action or over-allotment may begin on or after the dateon which adequate public disclosure of the terms of the offer of the relevant Tranche of Notes is madeand, if begun, may be ended at any time, but must end no later than the earlier of 30 days after the issuedate of the relevant Tranche of Notes and 60 days after the date of the allotment of the relevant Trancheof Notes. Any stabilisation action or over-allotment must be conducted by the relevant StabilisingManager(s) (or persons acting on behalf of any Stabilising Manager(s)) in accordance with all applicablelaws and rules.

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RISK FACTORS

Each of the Issuer and EIG, in its capacity as Guarantor, believes that the following factors may affect its ability to fulfilits obligations under the Notes or the Guarantee, as applicable, issued under the Programme. Some of these factors arecontingencies, which may or may not occur, and neither the Issuer nor the Guarantor is in a position to express a viewon the likelihood of any such contingency occurring or not occurring.

In addition, factors which are material for the purpose of assessing the market risks associated with Notes or theGuarantee issued under the Programme are also described below. If any of the risks described below materialises, theGroup’s business, financial condition, cash flows, results of operations or prospects may be materially adversely affected.If that were to happen, the trading price of the Notes may decline, or the Issuer may be unable to pay interest, principalor other amounts on, or in connection with, the Notes and the Guarantor may be unable to honour the Guarantee, andinvestors may lose all or part of their investment.

Each of the Issuer and the Guarantor believes that the factors described below represent the principal risks inherent ininvesting in Notes issued under the Programme, but the inability of the Issuer to pay interest, principal or other amountson or in connection with any Notes, or otherwise perform its obligations under any Notes, or of the Guarantor to honourthe Guarantee, may occur for other reasons which may not be considered significant risks by the Issuer and the Guarantorbased on information available to them as at the date of this Base Prospectus, or for reasons they may not currently beable to anticipate. Prospective investors should consider all of the below risk factors and also read the detailedinformation set out elsewhere in this Base Prospectus and reach their own views prior to making any investment decision.

Risks relating to Investments in Emerging Markets

Investors in emerging markets, such as Bulgaria and other countries in the Central and Eastern European/South-EastEuropean (“CEE/SEE”) region where the Group operates, should be aware that such emerging markets are subject togreater risk than more developed markets. In addition, adverse political or economic developments in other countries, andrelated market volatility and uncertainties, including any such developments, volatility and uncertainties that may resultfrom the results of the referendum in the United Kingdom in June 2016 in which the British people voted to leave the EU,could have a significant negative impact on gross domestic product (“GDP”), as well as the overall economic, politicaland social conditions, in Bulgaria and in the CEE/SEE region. Investors should exercise caution in evaluating the risksinvolved and must decide for themselves whether these risks warrant an investment in the Notes and whether it is suitablefor them.

Investors’ reactions to events occurring in one emerging market or region sometimes appear to demonstrate a “contagion”effect, in which an entire region or class of investment is disfavoured by such investors. If such a “contagion” effect occurs,the Group’s operations could be adversely affected by negative economic, security or financial developments in otheremerging market countries or regions. The markets in which the Group operates have been adversely affected by“contagion” effects in the past, including global events, such as the Eurozone crisis and the global financial crisis. Noassurance can be given that the Group’s business, financial condition, cash flows, results of operations or prospects will not be affected by similar events in the future.

Investing in emerging markets is only suitable for qualified and sophisticated investors who fully comprehend thesignificance of those risks. Investors should also note that market conditions in emerging markets change rapidly and,therefore, information contained in this Base Prospectus may become outdated relatively quickly.

Risks related to the Group’s Business

Macro-economic conditions in the countries in which the Group operates

The Group’s strategy focuses on maintaining its position as a leader in the CEE/SEE region for non-life, life and healthinsurance; leasing, used car sales and car rentals; new car sales and car repairs; financial services and investmentintermediation. The implementation of the Issuer’s strategy is contingent upon a range of factors that are beyond the Issuer’scontrol, including, in particular, market conditions, the general business environment, the regulatory environment and theactivities of its main competitors across its businesses. Any failure by the Issuer to maintain its leadership position in theCEE/SEE region in relation to the services and products it offers could materially reduce its attractiveness to existing andpotential customers, could damage its and its subsidiaries credit ratings and could result in increased costs or reducedrevenue as the Group seeks to regain lost market share.

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In particular, the Group conducts operations in Bulgaria, Romania, Macedonia, Ukraine, the Czech Republic, Slovakia,Greece, Spain, Italy and Poland and, accordingly, its overall financial position and its results of operations are affected bythe economic, legal and political conditions prevailing in those countries. Any deterioration of the macroeconomicconditions in such countries or in the wider CEE/SEE region may adversely affect certain products and services offeredby the Group and result in lower revenues than originally planned. In addition, general changes in government policy andregulatory systems in any such jurisdiction may lead to an increase in the Group’s operating expenses and capitalrequirements. For example, the impact of the global economic crisis on the Romanian economy was significant with aresulting decline in GDP of 0.8% in 2010 and low GDP growth of 1.1% in 2011 and 0.6% in 2012. This economicslowdown, in turn, had a material adverse effect on the Group’s sales of insurance products in Romania during the period.Any future periods of economic slowdown or slow economic growth in any of the markets in which the Group operatescould have a similar or more pronounced effect on the Group’s business, financial condition, cash flows, results of operations or prospects.

In 2014, the Group commenced operations in Greece under EU rules permitting the freedom of provision of services in theEU (the “EU Freedom of Services Regime”). The Group has also announced its intention to seek further expansion inGreece, including through the opening of a branch or an acquisition. Any such expansion would increase the Group’sexposure to macroeconomic and other risks relating to Greece. In recent years, Greece has faced an economic crisis. InJune 2015, following a failure to agree support measures, Greece defaulted on loans due to the International MonetaryFund (“IMF”), temporarily closed banks and imposed capital controls. In August 2015, Greece secured a €85 billion three-year bailout from the EU. While the economic situation in Greece has since appeared to be less volatile, any deterioratingconditions, continuing or additional volatility in Greece’s economy, including any decision to leave the Eurozone, or majorchanges to the political situation in Greece would adversely affect the Greek economy, which could, in turn, have a materialadverse effect on the Group’s business, financial condition, cash flows, results of operations or prospects.

Failure to complete, integrate and manage acquisitions

The Group’s expansion strategy has focused on acquisitions in the CEE/SEE region as Management’s view is that theregion has high growth potential due to the low density and penetration of insurance and inter-related products. The Groupmay not be able to identify promising future acquisition targets or, if such targets are identified, the Group may not beable to achieve its expected returns. Significant acquisitions involve a number of risks that could adversely impact theGroup, including:

• diversion of management attention and financial resources that would otherwise be available for the ongoingdevelopment or expansion of existing operations;

• difficulties in integrating the operations and personnel of the acquired business, including unexpectedresignations of senior management, other employees and clients of acquired businesses;

• difficulties in integrating the financial, technological and management standards, processes, procedures andcontrols of the acquired business with those of the Group’s existing operations;

• difficulties in realising the anticipated benefits of the acquisition, such as eliminating duplicative costs andreducing overheads;

• challenges in managing the increased scope, geographic diversity and complexity of the Group’s operations;

• exposure to unanticipated liabilities or difficulties in mitigating contingent or assumed liabilities;

• in relation to EIG and its subsidiaries (the “Euroins Group”), the lapse of any acquired insurance andreinsurance policies;

• revocation of licenses and permits; and

• failure of the due diligence process to identify certain liabilities or unprofitable business segments or to otherwiseadequately evaluate the business to be acquired.

If the Group is unable to integrate future acquisitions or such integration takes longer than originally planned, it may beunable to generate sufficient revenues to re-cover acquisition costs or may otherwise fail to realise anticipated benefitsfrom its acquisitions. Failure by the Group to integrate future acquisitions could result in a material adverse effect on theGroup’s business, financial condition, cash flows, results of operations or prospects.

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Regulatory risks; Dependence on prevailing norms and regulations

The results of the Group, particularly in respect of the Euroins Group, are influenced by changes in legislation and inthe regulatory environment in the countries in which it operates, namely, as at the date of this Base Prospectus, Bulgaria,Romania, Macedonia, Ukraine, Greece, the Czech Republic, Slovakia, Spain, Italy and Poland. The possibility ofsubstantial changes in the regulatory framework in any given country where the Issuer or any of its key subsidiariesoperates could result in a material adverse effect on the Group’s business, financial condition, cash flows, results of operations or prospects.

Although a large volume of legislation and regulation has been enacted in recent years (including, notably, in countrieswhich are member states of the EU (“Member States”)), the legal and regulatory frameworks in the countries in whichthe Group operates are continuing to evolve. In particular, judicial and regulatory authorities’ interpretations of lawsand regulations may be difficult to predict and decisions have, on occasion, been inconsistent. Any uncertainty in respectof the laws and regulations applicable to the Group’s operations could have a material adverse effect on the Group’sbusiness, financial condition, cash flows, results of operations or prospects.

See “—Risks related to the Euroins Group—Regulatory risks”, “—Risks related to the ELG Group—Regulatory risks”,“—Risks related to the Avto Union Group—Regulatory risks”, and “—Risks related to EF—Regulatory risks”.

Group funding risks

The Group’s possibility to grow and continue to implement its strategy depends to a significant degree on the ability of theIssuer and its subsidiaries to raise finance, including to refinance existing indebtedness. In particular, the EuroLease GroupEAD (“ELG”) and its subsidiaries (together, the “ELG Group”) require funding on an ongoing basis to support theirleasing activities (see “—Risks related to the ELG Group—Dependence on financing for leasing activities”). The Group’sability to raise financing on commercially acceptable terms, or at all, depends on, among other factors, the financialcondition of the Group and the overall economic conditions in the markets in which the Group operates, as well as thegeneral condition of the international capital markets. There can be no assurance that the Group will be able to obtain suchfinancing on commercially acceptable terms, or at all. Any inability to raise new finance or to refinance existingindebtedness could have a material adverse effect on the Group’s business, financial condition, cash flows, results ofoperations or prospects.

As at 30 June 2016, the Group had bank and non-bank loans of BGN 105.3 million (€53.8 million) and obligations on bondissues of BGN 32.7 million (€16.7 million), as compared to BGN 111.7 million and BGN 52.8 million, respectively, as at31 December 2015 and BGN 128.6 million and BGN 36.0 million, respectively, as at 31 December 2014. Each of theGroup’s credit facilities includes restrictive covenants, which require members of the Group to, among other things,maintain a net debt to EBITDA (as defined in the relevant credit facilities) ratio of 4.5 to 1. As a result of the impact ofone-off effects caused as a result of the adoption by the Euroins Group of a new accounting policy relating to thecalculation of technical reserves in compliance with Solvency II, in 2016, the Issuer was technically in breach of certaincovenants (including, namely, requirements in respect of minimum total equity value, the consolidated net debt toconsolidated EBITDA ratio and an interest leverage ratio) under its credit facilities. In September 2016, the Issuer receivedan unconditional waiver letter from International Investment Bank (“IIB”) in respect of its €15,000,000 loan facility withIIB (the “IIB Loan”), according to which IIB waived any and all breaches of the covenants under the IIB Loan until 31December 2016. Following discussions between the Issuer and its other relevant lenders in respect of facilities containingsimilar covenants, these lenders agreed that the relevant facilities permitted the calculation of EBITDA and other relevantitems excluding the impact of the one-off effects and, accordingly, that no breaches of the covenants had occurred and nowaivers were required.

In addition, as part of these financing arrangements, the Group has pledged certain lease receivables, as well as certainshares of EIG held by the Issuer to its lenders. See “Operating and Financial Review—Principal Debt Obligations of theGroup”.

Any failure by a member of the Group to meet any of the financial covenants or other restrictive covenants under itsfinancings may entitle the respective lenders to declare the amounts outstanding and accrued and unpaid interest thereonto be immediately due and payable and to enforce their security rights. Furthermore, any event or default or accelerationof payment pursuant to any financing may (depending on the amount involved) trigger cross-default or cross accelerationprovisions in other financings, including the Notes. Any acceleration of amounts due under the Group’s financings mayresult in the Group not having sufficient cash to repay amounts due in a timely manner and may disrupt the Group’s cashflow and liquidity plans. Any failure to repay amounts due may also result in the enforcement of the security granted tocertain lenders. Any of the foregoing could have a material adverse effect on the Group’s business, financial condition, cash flows, results of operations or prospects.

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Internal controls

The Group’s internal controls may not be sufficient in certain circumstances to monitor adequately the size and type ofactivities the Group carries out, particularly as it continues to grow its business through acquisitions. The Group’s internalcontrol system may be less developed in certain respects than those of companies of a similar size located in moredeveloped markets. As the Group expands its operations and seeks additional growth opportunities, it will also need toenhance its internal control system to reflect the demands of the size of the Group and its business activities, which couldresult in significant costs and potential operational disruption and, in turn, have a material adverse effect on the Group’sbusiness, financial condition, cash flows, results of operations or prospects.

Operational risk and losses can result from fraud, errors by employees, failure to document transactions properly, failureto obtain proper internal authorisation, failure to comply with regulatory requirements and conduct of business rules,systems and equipment failures, natural disasters or the failure of external systems (for example, those of the Group’scounterparties or vendors). Whilst not material in terms of monetary value or their impact on the Group’s activities, inthe past, the Group has experienced cases of non-compliance with its internal controls and fraud on the part of brokersand agents employed by the Euroins Group. Although the Group has launched legal proceedings to recover amounts lostas a result of such non-compliant or fraudulent activities, losses from such cases and any losses from any failure of theGroup’s system of internal controls in the future, as well as from breaches of the Group’s internal controls, could have amaterial adverse effect on its business, financial condition, cash flows, results of operations and prospects.

Audit qualifications and emphasis of matter

The Issuer’s 2014 Financial Statements, the Guarantor’s 2015 Financial Statements and the Guarantor’s 2014 FinancialStatements include certain audit qualifications, and the Issuer’s Interim Financial Statements and the Guarantor’s InterimFinancial Statements include a review qualification. In addition, the Issuer’s 2015 Financial Statements, the Guarantor’s2015 Financial Statements, the Guarantor’s 2014 Financial Statements, the Issuer’s Interim Financial Statements and theGuarantor’s Interim Financial Statements include certain emphases of matter. There can be no assurance that Managementwill adequately address the items raised in such qualifications or emphases of matter. In addition, particularly in light ofthe evolving regulatory environment and in the context of the Group’s expanding operations, there can be no assurancethat further issues will not be identified in the future, which may lead to new qualifications and emphases of matter beingincluded in the audit and review reports included in the Issuer’s and the Guarantor’s financial statements.

Risk management systems

The Group’s risk management systems may not be sufficient to prevent all risks occurring. The Group manages risk partlythrough the use of observed historical market behaviour and statistics based on historical models. These methods may notfully predict future risk exposures, which may be significantly greater than the Group’s historical measures indicate. Otherrisk management methods depend upon the evaluation of information regarding markets, clients, catastrophe occurrenceor other available information. This information may not always be accurate, complete, up-to-date or properly evaluated.In addition, certain risks could be greater than the Group’s empirical data would otherwise indicate. Any deficiency inthe Group’s risk management systems could result in a material adverse effect on the Group’s business, financial condition, cash flows, results of operations or prospects. See “—Risks related to Euroins Group—Solvency II”.

Liquidity risks

Liquidity is a measure of the Group’s ability to generate adequate amounts of cash to meet both current and futureobligations as they mature (including the obligations to repay the principal of, and to pay interest and other amounts inrespect of, the Notes) and to provide for planned capital expenditures.

The Group’s cash requirements for its operations and growth strategy are significant and the Group’s sources of cash include investment income, receipt of interest income and return of principal on shareholder loans and capitalcontributions by shareholders of the Issuer, which are then distributed to the relevant Group companies by way ofshareholder loans or other debt. If the economies of CEE/SEE and other countries in which the Group operates were tocontract in the future and revenues of the Group were to decrease, the Group may be unable to meet its working capitalrequirements, which could have a material adverse effect on the Group’s business, financial condition, cash flows, results of operations or prospects. See “—Risks related to the ELG Group—Dependence on financing for leasing activities”.

Credit risks

The Group is exposed to the risk that its counterparties will not meet their respective obligations to the Group. This riskspecifically applies to issuers of securities purchased by the Group, the banks with which the Group holds excess cash

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and, in the case of (i) the Euroins Group, the reinsurance companies to which it cedes risk; (ii) the ELG Group, its lessees,who may default on their payment obligations; and (iii) Avto Union AD (“AV”) and its subsidiaries (together, the “AvtoUnion Group”), the suppliers of new cars, motorcycles and scooters, which are sold by the Avto Union Group. Thirdparties may default on their obligations to the Group due to, among other reasons, bankruptcy, lack of liquidity, economicdownturns or operational failure. Investment losses that may occur due to credit risk include actual losses from defaults,fair value losses that may occur due to credit rating downgrades or credit spread widening and impairment write-downs.Any significant losses resulting from the impact of credit risk could, in turn, have a material adverse effect on the Group’sbusiness, financial condition, cash flows, results of operations or prospects. See “—Risks related to the Euroins Group—Credit risks”, “—Risks related to the ELG Group—Credit risks”, “—Risks related to the Avto Union Group—Credit risks”and, “—Risks related to EF—Credit risks”.

Foreign currency exchange rate risk

In Bulgaria, since 1 July 1997, a currency board, the Monetary Board of Bulgaria, has been in place whereby the localcurrency (the Bulgarian Lev) has been pegged to the Euro. A collapse of the Monetary Board of Bulgaria or anysignificant change in the corresponding fixed exchange rate of the Bulgarian Lev and the Euro could adversely impactthe strength of the Bulgarian Lev. A devaluation of the Bulgarian Lev against the Euro could have an impact on theGroup’s revenue base (a portion of which is received in Euros but translated to Bulgarian Lev for purposes of the Group’saccounts) and expenses paid in Euros, which could, in turn, have a material adverse effect on the Group’s business,financial condition, cash flows, results of operations or prospects.

In addition to Bulgaria, the Group has operations in several other CEE/SEE countries, namely, as at the date of this BaseProspectus, Romania, Macedonia, Ukraine, Greece, the Czech Republic, Slovakia, Spain, Italy and Poland. While Greece,Slovakia, Spain and Italy are members of the Eurozone and the Central Bank of the Czech Republic has committed tomaintain the Czech Koruna close to the Euro (although the Koruna is not pegged to the Euro), the Romanian Leu, theMacedonian Denar, the Ukrainian Hryvnia and the Polish Zloty are freely convertible currencies, whose values relativeto other currencies, are determined by free market forces. Accordingly, the Group is also subject to currency anddevaluation risks in respect of certain of its operations outside of Bulgaria. This is most notably the case in Romania dueto the operations of Euroins Romania Asigurare-Reasigurare S.A. (“Euroins Romania”), the Romanian subsidiary ofEIG. In the six months ended 30 June 2016 and the year ended 31 December 2015, 72.6% and 70.2%, respectively, of theEuroins Group’s gross written premiums (“GWP”) were derived from the Euroins Group’s business in Romania. In theevent that Greece, Slovakia, Spain or Italy were to exit from the Eurozone, the Group would also be subject to potentialrisks of redenomination of currency in respect of its operations in such countries.

Any devaluation or depreciation against the Bulgarian Lev of other currencies in which the Group or its subsidiariestransact could, upon consolidation of such financial results, have a negative impact on the contribution of that subsidiaryto the Group’s financial performance. Any depreciation or a devaluation of the Bulgarian Lev, the Romanian Leu or anyother currencies in the countries in which the Group or its subsidiaries operate could have a material adverse effect on theGroup’s business, financial condition, cash flows, results of operations or prospects.

Reputation risk

The Group is exposed to reputational risk and damage, which results from the actual or perceived manner in which theGroup conducts its business activities, from its financial performance or from actual or perceived practices in the industriesin which the Group operates. Many of the Group’s businesses have leading market positions, giving the Group a highprofile in the relevant markets, and the shares of the Issuer are listed on the Bulgarian Stock Exchange and the WarsawStock Exchange. These factors make the Group particularly susceptible to reputation risk. Reputational damage couldreduce, directly or indirectly, the attractiveness of the Group to lenders, investors and customers and may lead to negativepublicity, loss of revenue, litigation, regulatory or legislative action, loss of existing or potential client business, reducedworkforce morale and difficulties in recruiting qualified personnel. Any sustained reputational damage could have amaterial adverse effect on the Group’s business, financial condition, cash flows, results of operations or prospects.

Information management and technology systems

The Group depends on information technology (“IT”) systems to process a large number of transactions on an accurateand timely basis, and to store and process the Group’s business and operating data. The proper functioning of the Group’sinsurance handling, customer data, policies, claims and payment records, financial control, risk management, accountingand other IT-reliant systems, as well as the communication networks between members of the Group and its main dataprocessing centres, are critical to the Group’s business operations and its ability to operate effectively. The Group’s businessactivities could be materially disrupted if there was a partial or complete failure of any of these IT systems orcommunications networks, which could, in turn, have a material adverse effect on the Group’s business, financial

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condition, cash flows, results of operations or prospects. Such failures can be caused by a variety of factors, many of whichare wholly or partially outside the Group’s control, including natural disasters, extended power outages, cyber-attacks,computer viruses and system malfunctions. The proper functioning of the Group’s IT systems also depends on accurateand reliable data and other systems input, which are subject to human error. Any failure or delay in recording or processingthe Group’s transaction data could subject the Group to claims for losses and regulatory fines and penalties and could alsomaterially adversely affect its reputation. See “—Reputation risk”.

Shortage of qualified personnel and reliance on key personnel

The Group depends on its ability to recruit and develop appropriately qualified senior management and employees. TheGroup’s overall success is greatly dependent upon the individual contribution of, and the Group’s ability to retain andmotivate, such senior management and employees across all entities in the Group. Any inability of the Group to retaina team of loyal, experienced, qualified and well-trained staff could have a material adverse effect on the Group’s business,financial condition, cash flows, results of operations or prospects.

There is a shortage of adequately qualified personnel in the countries in which the Group operates. This shortage is caused,in part, by competition among employers for adequately qualified personnel and a demographic crisis in the region, drivenby an aging population, low birth rates and economic migration. If the shortage in adequate personnel persists or increases,the Group’s ability to offer the desired range and volume of products and services, to expand its key business segmentsand to maintain the quality of its assets may be adversely affected.

In particular, the Group’s success depends, in part, on the continued services of its key executive officers, including Mr.Assen Milkov Christov, Mr. Kiril Ivanov Boshov, Mr. Assen Minchev and Mr. Dimitar Stoianov Dimitrov, as well asother key personnel. The replacement of the Group’s key executive officers would likely involve significant time andcosts, and the loss of these employees may significantly delay or prevent the achievement of the Group’s businessobjectives.

Risks related to Euroins Group

In addition to the risks affecting the Group, as an insurance group, the Euroins Group faces the following principal risksrelating to its business:

Regulatory risks

The Euroins Group operates in a highly regulated industry and requires licences from the FSC, the ASF, the InsuranceSupervision Agency of the Republic of Macedonia, the State Commission for Regulation of Financial Services Marketsof Ukraine and other applicable regulators. If EIG establishes a branch or acquires an existing business in Greece, theEuroins Group will also be subject to licensing and supervision by the Department of Private Insurance Supervision ofthe Bank of Greece. Any regulatory authority with jurisdiction over the Group may revoke a licence held by a member ofthe Euroins Group if its operations fail to comply with the requirements of such regulatory authority in the applicablejurisdiction. There is no assurance that the Euroins Group will be able to maintain the licences it needs to operate in thejurisdictions where it currently conducts business or, if necessary, to renew or obtain new licences in those jurisdictionsor other jurisdictions where it may wish to operate in the future. If the Euroins Group ceases to hold required licences,this could result in an inability to provide some or all of the insurance products it currently provides or intends to provide.

In addition, a material breach of the terms of a required licence, leading to a loss or suspension of such licence, couldresult in penalties or fines imposed by the applicable regulatory authorities, which could, in turn, result in materialliabilities. Any failure to maintain or obtain required licenses, or any penalties, fines or censure, could result in a materialadverse effect on the Group’s business, financial condition, cash flows, results of operations or prospects. See “—Risksrelating to the Group’s Business—Regulatory risks; Dependence on prevailing norms and regulations”.

Solvency II

The EU has adopted a full-scale revision of the solvency framework and prudential regime applicable to insurancecompanies, reinsurance companies and insurance groups through the Solvency II Directive (Directive 2009/138/EC)(“Solvency II”), which became effective on 1 January 2016. As a directive, Solvency II is put into effect by each MemberState by implementing legislation and is aimed at creating a new solvency framework in which the minimum amounts ofcapital that insurance and reinsurance companies are required to hold in order to cover the risks to which they are exposedbetter reflect such companies’ specific risk profiles. Solvency II has introduced economic risk-based solvencyrequirements across all Member States for the first time. While the previous directives concentrated mainly on liability-side (i.e., insurance risks) and include a relatively simple formula, which is based on technical provisions and insurance

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premiums, Solvency II introduces more comprehensive solvency requirements, taking the asset-side risks into accountmore extensively, and provides new and more detailed rules regarding governance, risk management, scenario analyses,stress testing and risks associated with the other entities within the Euroins Group. The new regime is a “total balancesheet” based regime where the insurers’ material risks and their interactions are considered. The Solvency II requirementsfor governance, risk management and effective supervision establish norms in addition to the new quantitativerequirements, including the obligation to perform an own risk and solvency assessment and to comply with disclosureand transparency requirements. Through these norms, Solvency II introduces more forward-looking risk managementrequirements and a formal role for regulators in assessing the quality of risk management procedures implemented byinsurance and reinsurance companies.

Because Solvency II became effective only on 1 January 2016 and establishes agreed procedures for the calculation offigures to test compliance with Solvency II, the regime, procedures and tests to be applied are new and, accordingly, theimplementation measures for, and the interpretation by regulatory authorities of, Solvency II, as well as the interaction ofthis regime with pre-existing regulatory regimes in certain Member States, including in Bulgaria and Romania, are subjectto a degree of uncertainty. In Bulgaria, the FSC is applying Solvency II, but, at the same time, maintaining certain aspectsof the solvency regime in place prior to the introduction of Solvency II, resulting in an additional regulatory burden onthe Euroins Group. Further changes to Solvency II are also planned by the EU, certain Member States and national andsupra-national regulatory authorities. Any change to the assumptions, calculations or methodology used in Solvency IIcalculations could have a negative impact on the Solvency II ratio of the Euroins Group. While the aim of Solvency II isto introduce a harmonised, risk-based approach to solvency capital, there is the risk that regulators may introduce capitaladd-ons or strict, unexpected parameters for internal models, or that a lack of proper management information due touncertainty about the regulatory changes could lead to insufficient technical provisions once those changes are applied.In addition, there is a risk that the Group could under-estimate or over-estimate its capital position, which, in turn, couldresult in incorrect investment and risk return decisions. The Group is also subject to the risk that the regulatory authoritiesin each of the EU markets in which it operates may interpret and apply Solvency II differently, or require differentdeliverables, which, in turn, may make it harder for the Group to ensure full compliance. Any of the foregoing risks couldhave a material adverse effect on the Group’s business, financial condition, cash flows, results of operations or prospects. See “—Risks relating to the Group’s Business—Regulatory risks; Dependence on prevailing norms and regulations”.

Expansion of insurance operations

The planned expansion of the Euroins Group carries certain risks for the Group. As a result of such expansion, the EuroinsGroup could become exposed to additional regulations, with which it may not be able to comply. It could also be subjectto levies, taxes and additional solvency and capitalisation requirements, which could impose strains on its financialresources and limit its ability to carry on its business.

As at the date of this Base Prospectus, the Euroins Group has limited operations in Greece (conducted under the EUFreedom of Services Regime) and does not own any branch or subsidiary in Greece. The Euroins Group intends to pursuefurther expansion in the insurance sector in Greece, potentially including through the opening of a branch. The EuroinsGroup is also actively monitoring acquisition opportunities in Greece, as well as in other countries in the CEE/SEE region,including in Hungary. The Group also conducts operations in Spain, Italy and Poland through the EU Freedom of ServicesRegime. The risks related to the insurance sector in Greece and any other new market into which the Group expands couldbe significant and may differ from the risks the Euroins Group is subject to in the other markets in which the Euroins Groupoperates. Were any of these new market risks to materialise, the Euroins Group’s expansion in the insurance sector inGreece or other countries in the CEE/SEE region could have a material adverse effect on the Group’s business, financial condition, cash flows, results of operations or prospects. See “—Risks relating to the Group’s Business—Failure tocomplete, integrate and manage acquisitions” and “Business—EIG—History and Expansion of the Euroins Group”.

Unanticipated or excessive claims and benefits

Insurance companies assume risks concerning losses, which may be caused to property or to an insured person as a resultof an event covered by insurance. Some events may entail the obligation to pay out significant claims and some insuranceevents may lead to damage being caused to multiple insured persons and require the payment of significant claims. Beforeassuming insurance risks under particular insurance contracts, the Euroins Group analyses the risk of danger and adjuststhe insurance premium to a level of acceptable risk and, if needed, reinsures the risk with other insurance companies.Accordingly, the Euroins Group is exposed to the risk of inappropriate pricing, such as the risk of a discrepancy betweenactual claims under a particular insurance product and the assumptions made based on statistical estimates made at the timethe Euroins Group sells the relevant insurance product. Due to the inevitable uncertainty underlying such estimates, thefinal value of the damage may differ from the assumptions made by the Euroins Group. In addition, the costs of claimsmay increase if insured persons travel outside the country where they were insured, including to Western Europe wheremedical treatment and vehicle repair bills are generally more expensive, and such considerations need to be taken into

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account when setting the level of premium. Accordingly, a given insurance product may not generate the assumed profitand the premium amount obtained may be insufficient to cover insurance obligations under the contract. Ineffective pricingpolicies and insurance risk management procedures, risk mismanagement and inappropriate control of the insurance riskcould have a material adverse effect on the Group’s business, financial condition, cash flows, results of operations or prospects.

Inaccuracies in operational and risk management models and assumptions

The operations and risk management of the Euroins Group require complex models under which it needs to properlyreflect the value of its insurance business and an adequate allowance for risks associated with it. In this context,Management is required to undertake a constant assessment of numerous factors, such as the long-term development ofinterest rates, investment returns, the allocation of investments between equity, fixed income and other categories. TheEuroins Group monitors its actual experience regarding these assumptions and, to the extent that it considers that thisexperience may not continue in the longer term, it refines its long-term assumptions.

The actuarial practices and assumptions listed above are, among other factors, the basis for (i) its “best estimate” actuarialassumptions; (ii) capital requirements under applicable regulations; and (iii) the calculation of insurance premiums andreserves. In each of these cases, the Euroins Group must rely on its own assumptions and estimates when operating itsrisk analysis and risk management systems. The assumptions used may differ from actual developments in the future.Adjustments in such assumptions may have to be made in response to revised legal and regulatory requirements, changingfinancial markets or expected future actuarial experience, which may lead to changes in the Group’s solvency position,as well as the accounting of, and reserves required for, the operations of the Euroins Group, which could, in turn, have amaterial adverse effect on the Group’s business, financial condition, cash flows, results of operations or prospects.

Certain risks faced by the Euroins Group generally cannot be hedged and even risks that are subject to hedging carry theresidual risk that the hedging arrangements concluded by the Group do not or only partially mitigate such risks.

Insurance frauds

The Euroins Group is exposed to the risk of insurance fraud, typical for business activities conducted by the EuroinsGroup, involving the fraudulent obtaining of insurance or undue benefits, in particular, based on false documents or untruecircumstances or due to actions of employees and cooperating parties. If such instances of insurance fraud persist orincrease, this could have a material adverse effect on the Group’s business, financial condition, cash flows, results of operations or prospects.

Unavailability of reinsurance

Companies within the Euroins Group are party to reinsurance agreements under which all or a part of the insured risk orgroups of specific types of risks are transferred to reinsurance companies, which assume such risks in return for a portionof the insurance premium. Market conditions beyond the Group’s control determine the availability and cost ofreinsurance. Accordingly, the Group may be forced to incur additional expenses for reinsurance or may be unable toobtain sufficient reinsurance on acceptable terms, either of which could materially adversely affect its ability to obtainfuture business and could expose it to higher levels of losses.

Furthermore, the Euroins Group remains liable to its policyholders even where a reinsurer fails to meet its reinsuranceobligations. Reinsurers with whom the Euroins Group enters into reinsurance agreements may have difficulties inperforming their obligations, which may result in increased charges to the Euroins Group. There is no assurance thatreinsurance agreements executed by the Euroins Group will always provide sufficient protection. A default by a reinsurerto which the Euroins Group has material exposure could expose the Group to significant unexpected losses, which could,in turn, have a material adverse effect on the Group’s business, financial condition, cash flows, results of operations orprospects.

Policy lapses or surrenders

Insurance policy lapses or surrenders are of material importance to the operations of the Euroins Group. The risk of policylapses or the surrender of contracts may increase due to the use of automatic renewals (automatic extension), particularlyin the case of products such as motor insurance products, where there is no direct contact with the customer. A materialnumber of policy lapses or surrendered contracts may lead to a substantial decrease in income from GWP insurancepremium income and could have a material adverse effect on the Group’s business, financial condition, cash flows, resultsof operations or prospects.

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Competition

The Euroins Group is exposed to increasing competition in its various areas of business from both foreign and domesticmarket participants across the markets where it conducts its activities. The Euroins Group has experienced significantgrowth in its insurance operations in recent years, particularly in respect of its overall general insurance portfolio, andManagement intends to continue to concentrate on expanding the Euroins Group’s product offerings and geographicaloperations, and to strengthen further its capital base, in line with the Euroins Group’s strategic objectives. In the six monthsended 30 June 2016 and the year ended 31 December 2015, according to statistics published by the FSC, Euroins BulgariaAD (“Euroins Bulgaria”) was the eighth and sixth largest insurer in the Bulgarian non-life insurance market by GWP,respectively; according to statistics published by ASF, Euroins Romania was the sixth and fourth largest insurer in theRomanian non-life insurance market by GWP, respectively; and according to statistics published by InsuranceSupervisory Agency of the Republic of Macedonia, Euroins Osiguruvanje AD (“Euroins Skopje”) was the eighth largestinsurer in the Macedonian non-life insurance market by GWP. The CEE/SEE market for insurance and financial servicesis, however, becoming highly competitive, particularly in the general insurance business sphere. An increase in competitionmay limit the Euroins Group’s ability to grow its customer base and expand its insurance portfolio. Certain of the insurancecompanies that the Euroins Group competes with have a broader geographic reach and greater capital resources than theEuroins Group, which may further effect the Euroins Group’s ability to compete effectively.

In addition, the Euroins Group has taken advantage of the EU Freedom of Services Regime to commence operations inGreece, the Czech Republic, Slovakia, Spain, Italy and Poland. While this regime permits the Euroins Group to conductinsurance operations in EU jurisdictions where it currently does not have an operating subsidiary or branch, this regimealso permits insurance companies from other EU countries to conduct similar operations in the markets in which the EuroinsGroup operates, which could further increase competition.

Credit risks

The Euroins Group is exposed to credit risk in respect of: (a) receivables arising out of direct insurance arrangements;(b) receivables arising out of reinsurance arrangements; (c) reinsurers’ share of insurance liabilities; (d) loans andcorporate bonds; and (e) deposits and government securities. While the Euroins Group has no significant concentrationsof credit risk, any failure by its counterparts to meet their respective obligations to the Euroins Group could have a materialadverse effect on the Group’s business, financial condition, cash flows, results of operations or prospects.

Catastrophic events and extraordinary risks

The Euroins Group insures risks related to catastrophes caused by human activity, as well as natural disasters, such asflood, wind, rain, snow, tornado, hailstorm, frost, fire and drought. The frequency and intensity of catastrophes and naturaldisasters are hard to forecast. In addition, changes of weather and climatic conditions in recent years have created greateruncertainty as to the future occurrence of natural disasters. For example, in 2014, unprecedented hailstorms in Bulgarialed to an increase in claims under insurance policies granted by the Euroins Group.

Generally, the Euroins Group’s exposure to catastrophic risks depends on the frequency of such catastrophic events, aswell as the amount of claims paid in relation to them. If catastrophes damage the property protected by policies writtenby the Euroins Group with a significantly greater frequency or intensity than previously experienced, the benefits paidand the provisions created for that purpose could have a material adverse effect on the Group’s business, financial condition, cash flows, results of operations or prospects.

Risks related to the ELG Group

In addition to the risks affecting the Group, as a leasing group, the ELG Group faces the following principal risks relatingto its business:

Dependence on financing for leasing activities

The ELG Group depends on financing, primarily credit facilities secured by lease receivables and the issuance of localbonds, to finance its leasing activities. In order to continue to grow its volume of lease originations, the ELG Group requiresaccess to more financing and there can be no assurance that the ELG Group will be able to access additional funding, orrefinance existing funding, on commercially acceptable terms or at all. The availability of such financing depends, in part,on factors outside of the ELG Group’s, including regulatory capital treatment for unfunded bank lines of credit, the financialstrength and strategic objectives of the banks that participate in the ELG Group’s credit facilities, the availability of bankliquidity in general and local and international capital market conditions. If the ELG Group is unable to extend or replaceits existing facilities or to arrange new credit facilities or other types of financing, it would have to curtail or suspend its

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lease origination activities, which could have a material adverse effect on the Group’s business, financial condition, cash flows, results of operations or prospects.

ELG Group’s principal financing for its leasing activities contains borrowing bases or advance formulas, which require theELG Group to pledge lease receivables and lease-related assets (including the leased vehicles) in excess of the amounts itcan borrow under those facilities. Accordingly, credit deterioration in pledged collateral resulting from weakened economicconditions or any other factor, could require the ELG Group to pledge additional assets to support these borrowing levelsand to replace delinquent or defaulted collateral. The pledge of additional lease receivables and lease-related assets tosupport the ELG Group’s credit facilities could have a material adverse effect on the Group’s business, financial condition, cash flows, results of operations or prospects. See “—Risks related to the Group’s Business—Group funding risks”.

Dependence on operations of the Avto Union Group

A material portion of ELG’s leasing activities consists of financing leases of new vehicles sold by the Avto Union Group,which, in turn, is dependent upon the Avto Union Group’s relationships with car manufacturers and importers in its marketsof operation. If there were significant changes in the Avto Union Group’s sales of new vehicles to customers, the qualityor resale value of vehicles sold by the Avto Union Group or other factors impacting the vehicles sold by the Avto UnionGroup, such changes could materially affect ELG’s profitability, which could, in turn, have a material adverse effect onthe Group’s business, financial condition, cash flows, results of operations or prospects. There is no assurance that the regional automobile market or the Avto Union Group’s share of that market will not suffer downturns in the future and anynegative impact could, in turn, result in a material adverse effect on the Group’s business, financial condition, cash flows, results of operations or prospects.

Risk of insurance provider not paying for damaged or stolen leased assets

The vast majority of all leased assets, which are mostly new and used vehicles, including passenger cars and lightcommercial vehicles, has historically been insured with the Euroins Group. Accordingly, the ELG Group is subject toconcentration risk in respect of the Euroins Group. Although, historically, the Euroins Group has fully honouredoutstanding insurance policies, it is possible that, due to any future financial difficulties, it may not be in a position tofully cover insurance claims. As EIG and ELG are affiliates, there is an increased risk that, if the Euroins Group experiencedfinancial difficulties, it may be more likely that the Euroins Group defaults against the ELG Group than a third party as itshould be easier to control the consequences of such a default. Such failure to pay could, in turn, cause financial losses tothe ELG Group, which could result in a material adverse effect on the Group’s business, financial condition, cash flows, results of operations or prospects.

Credit risk

The ELG Group is exposed to credit risk through its leasing services portfolio and, as such, management of credit risk iscarried out at the customer level. ELG is exposed to credit risk in respect of various industry sectors in each country ofoperation. Deterioration in the performance of any industry sector in respect of which ELG has significant credit exposuremay adversely impact its business, which mandates that it constantly monitors and identifies the risk of a specific debtorand establishes the impairment of financial assets, while also defining internal exposure limits by individual debtors,associated companies, individual industry sectors or market segments. Any form of material deterioration of the overallcredit quality of the leasing portfolio could result in a material adverse effect on the Group’s business, financial condition, cash flows, results of operations or prospects.

Risks related to the Avto Union Group

In addition to the risks affecting the Group, as a group engaged in new car sales, the Avto Union Group faces the followingprincipal risks relating to its business:

Supply chain risk

The sale of new cars, motorcycles and scooters and the sale of original spare parts, lubricants and accessories can beadversely impacted by the non-performance of supply and delivery contracts by suppliers. Such difficulties could arisefrom legal considerations and from technical problems in performing delivery and other reasons and could have asignificant adverse impact on sales by, and the profitability of, the Avto Union Group. Any such decrease in sales andprofitability could, in turn, result in a material adverse effect on the Group’s business, financial condition, cash flows,results of operations or prospects.

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Cyclicality of automobile market

The automobile markets in which the Avto Union Group operates may be subject to volatility in demand for passengercars. Demand for new cars depends to a large extent on general, economic, political and social conditions in a givenmarket and the introduction of new vehicles and technologies. Volatility in demand may lead to lower vehicle unit salesand increased inventory, which may result in downward price pressure and have a material adverse effect on the Group’sbusiness, financial condition, cash flows, results of operations or prospects.

Regulatory risks

Increasing environmental and safety standards for passenger cars and cargo vehicles within the EU may affect sales ofnew vehicles by the Avto Union Group, which at all times have to comply with the changing regulatory and administrativeenvironment (including, for example, technical requirements and environmental tax regulations). Any form of non-compliance with applicable regulations by car manufacturers providing cars to the Avto Union Group could lead to a lossin sales by the Avto Union Group, which could, in turn, have a material adverse effect on the Group’s business, financialcondition, cash flows, results of operations or prospects.

Credit risks

The Avto Union Group is exposed to credit risk as any deterioration in global financial markets may affect the availabilityand terms of consumer credit, which, in turn, affects the ability of the Avto Union Group’s customers to purchase its cars,as well as their ability to obtain lease financing for such purchases. The Avto Union Group may also experience difficultyin accessing working capital. These credit risks, and others, could have a material adverse effect on the Avto UnionGroup’s ability to complete car sales and generate profit and, in turn, have a material adverse effect on the Group’sbusiness, financial condition, cash flows, results of operations or prospects.

Competition

The Avto Union Group is exposed to increasing competition in its car sales business. According to statistics published byACM, in each of the six months ended 30 June 2016 and the year ended 31 December 2015, the Avto Union Group wasa dealer for four of the top ten selling brands of cars in Bulgaria; namely, Dacia, Renault, Nissan and Opel. The AvtoUnion Group’s competitiveness in the market depends on a number of factors, including its ability to maintain its existingrelationships with car manufacturers and, where the Avto Union Group is not the sole importer for a brand, the importer,and its ability to expand its relationships with car manufacturers, as well as on a number of factors outside of the AvtoUnion Group’s control, including the introduction of new car models by car manufacturers, pricing set by carmanufacturers and new entrants in the car sales market. Any increased competition in the markets in which the AvtoUnion Group operates could have a material adverse effect on the Group’s business, financial condition, cash flows,results of operations or prospects.

Risks related to EF

In addition to the risks affecting the Group, as a financial services company, Euro-Finance AD (“EF”) faces the followingprincipal risks relating to its business:

Market conditions and risks

Poor economic conditions and other adverse geopolitical conditions have adversely affected, and, if they recur, are likelyto continue to adversely affect, investor and client confidence, resulting in significant industry-wide declines in the sizeand number of financial advisory transactions and increased market risk as a result of increased volatility. These factorshave, in the past, had and, if they recur, are likely to continue to have an adverse effect on EF’s revenues and its profitmargins. EF’s trading income may be adversely impacted during times of subdued market conditions and client activityand increased market risk from higher volatility may lead to trading losses that could cause EF to reduce the size of itstrading businesses in order to limit its risk exposure. Such measures could have a material adverse effect on the Group’sbusiness, financial condition, cash flows, results of operations or prospects.

EF is exposed to changes in the value of financial instruments and other financial assets that are carried at fair marketvalue, as well as changes to the level of its advisory and other fees due to changes in interest rates, exchange rates, equityand commodity prices, credit spreads and other market risks. These changes may result from changes in economicconditions, monetary and fiscal policies, market liquidity, availability and cost of capital, international and regionalpolitical events, acts of war or terrorism, corporate, political or other scandals that reduce investor confidence in capitalmarkets, natural disasters or pandemics or a combination of these or other factors. EF trades in foreign exchange, futures,

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securities and other markets. EF may incur losses as a result of decreased market prices for products it trades, whichdecreases the valuation of its trading and investment positions.

In addition, reductions in the level of prices in the equity markets or increases in interest rates may reduce the value ofEF’s clients’ portfolios, which, in turn, may reduce the fees EF earns for managing assets. Increases in interest rates orattractive conditions in other investments could cause EF’s clients to transfer their assets to other managers or products.

Settlement and clearing risk

As a leading and active provider of financial services and investment intermediation services to individual, corporateand institutional clients, EF is required to settle various types of trades on a daily basis with multiple counterpartiesand clearing houses. The risk of miscommunication while settling multiple trades exists and could hamper EF’s abilityto effectively serve clients, which, in turn, could have a material adverse effect on the Group’s business, financial condition, cash flows, results of operations or prospects.

Regulatory risks

EF is licenced and supervised by the FSC and is subject to EU legislation in the businesses in which it operates.Accordingly, EF operates in a highly regulated environment and is required to carry out its activities in full compliancewith strict regulations. Any form of non-compliance or delay in complying with such regulations, or any changes tothe regulations imposed on EF, could result in fines or the revocation of its licences which could, in turn, have amaterial adverse effect on the Group’s business, financial condition, cash flows, results of operations or prospects.

In addition, scrutiny from governments, regulators, legislative bodies and law enforcement agencies with respect tomatters relating to the financial services sector generally has increased significantly in recent years. The globalfinancial crisis and the subsequent political and public sentiment regarding financial institutions has resulted in asignificant amount of adverse press coverage, as well as adverse statements or charges by regulators or othergovernment officials, and, in some cases, to increased regulatory scrutiny, investigations and litigation. Respondingto and addressing such matters, regardless of the ultimate outcome, is time-consuming and expensive. Adversepublicity, governmental scrutiny and legal and enforcement proceedings could also have a negative impact on EF’sreputation with clients and on the morale and performance of its employees, which could have a material adverse effecton the Group’s business, financial condition, cash flows, results of operations or prospects.

Competition

EF faces significant competition from local and international operators, which compete vigorously for participation inthe businesses in which EF operates. EF competes on the basis of a number of factors, including products and services,depth of client relationships, innovation, reputation and price. EF believes that it will continue to experience pricingpressures in the future as some of its competitors seek to obtain or increase market share. EF competes primarily withasset managers, retail and commercial banks, private banking firms, investment banking firms and brokerage firms.In addition, any trend toward consolidation in the global financial services industry may create stronger competitorswith broader ranges of product and service offerings, increased access to capital and greater efficiency and pricingpower. Many of EF’s competitors are larger than EF and may have significantly greater financial resources than EF ormay be able to offer a wider range of products, which may enhance their competitive position. The effect ofcompetitive market conditions may lead to an erosion in EF’s market share or margins, which could have a materialadverse effect on the Group’s business, financial condition, cash flows, results of operations or prospects.

Communication and data transmission risk

EF conducts all its trading, asset management, foreign exchange trading and settlement activities electronically and,accordingly, is exposed to the risk of loss of information and theft of confidential and proprietary information. Anyinability to secure uninterrupted and secure communication flow could compromise the integrity of EF’s electronic tradingplatforms, databases and deal-flow, which, in turn, could damage its credibility with clients and counterparties. Any suchloss of full control of information could have a material adverse effect on the Group’s business, financial condition, cash flows, results of operations or prospects.

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Risks related to the Notes and General Market Issues

Risks related to the structure of a particular issue of Notes

A wide range of Notes may be issued under the Programme. A number of these Notes may have features which containparticular risks for potential investors. Set out below is a description of the most common such features:

Notes subject to optional redemption by the Issuer

An optional redemption feature of Notes is likely to limit their market value. During any period when the Issuer may electto redeem Notes, the market value of those Notes generally will not rise substantially above the price at which they arescheduled to be redeemed. This also may be true prior to any redemption period.

The Issuer may be expected to redeem Notes when its cost of borrowing is lower than the interest rate on the Notes. Atthose times, an investor generally would not be able to reinvest the redemption proceeds at an effective interest rate ashigh as the interest rate on the Notes being redeemed and may only be able to do so at a significantly lower rate. Potentialinvestors should consider reinvestment risk in light of other investments available at that time.

Fixed/Floating Rate Notes

Fixed/floating rate Notes may bear interest at a rate that converts from a fixed rate to a floating rate, or from a floatingrate to a fixed rate. Where the Issuer has the right to effect such a conversion, this will affect the secondary market andthe market value of the Notes since the Issuer may be expected to convert the rate when it is likely to produce a loweroverall cost of borrowing. If the Issuer converts from a fixed rate to a floating rate in such circumstances, the spread onthe fixed/floating rate Notes may be less favourable than then prevailing spreads on comparable floating rate Notes tiedto the same reference rate. In addition, the new floating rate at any time may be lower than the rates on other Notes. Ifthe Issuer converts from a floating rate to a fixed rate in such circumstances, the fixed rate may be lower than thenprevailing rates on its Notes.

Notes issued at a substantial discount or premium

The market values of securities issued at a substantial discount or premium from their principal amount tend to fluctuatemore in relation to general changes in interest rates than do prices for conventional interest-bearing securities. Generally,the longer the remaining term of the securities, the greater the price volatility as compared to conventional interest-bearingsecurities with comparable maturities.

Risks related to Notes generally

Set out below is a brief description of certain risks relating to the Notes generally:

Modification, waivers and substitution

The Terms and Conditions of the Notes contain provisions for calling meetings of Noteholders to consider mattersaffecting their interests generally. These provisions permit defined majorities to bind all Noteholders includingNoteholders who did not attend and vote at the relevant meeting and Noteholders who voted in a manner contrary to themajority.

U.S. Foreign Account Tax Compliance Withholding

The Issuer and financial institutions through which payments on or with respect to the Notes are made may, under certaincircumstances, be required pursuant to Sections 1471 to 1474 of the US Internal Revenue Code of 1986, as amended, (the“Code”), the regulations promulgated thereunder, an agreement described in Section 1471(b) of the Code, and anyintergovernmental agreement and implementing laws in furtherance of such Sections of the Code (collectively,“FATCA”) to withhold at a rate of up to 30%. on all, or a portion of, payments in respect of the Notes made after 31December 2018 to an investor or any other non-U.S. financial institution through which payment on the Notes is madethat is not in compliance with FATCA. See “Taxation—Foreign Account Tax Compliance Act”.

The proposed Financial Transaction Tax

On 14 February 2013, the European Commission published a proposal (the “Commission’s Proposal”) for a Directivefor a common Financial Transaction Tax (“FTT”) in Belgium, Germany, Estonia, Greece, Spain, France, Italy, Austria,

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Portugal, Slovenia and Slovakia (the “participating Member States”). The Commission’s Proposal has very broad scopeand could, if introduced, apply to certain dealings in the Notes (including secondary market transactions) in certaincircumstances. Primary market transactions referred to in Article 5(c) of Regulation (EC) No 1287/2006 are expected tobe exempt. Under the Commission’s Proposal the FTT could apply in certain circumstances to persons both within andoutside of the participating Member States. Generally, it would apply to certain dealings in the Notes where at least oneparty is a financial institution and at least one party is established in a participating Member State. A financial institutionmay be, or be deemed to be, “established” in a participating Member State in a broad range of circumstances, including:(i) by transacting with a person established in a participating Member State; or (ii) where the financial instrument whichis subject to the dealings is issued in a participating Member State. However, the FTT proposal remains subject tonegotiation between the participating Member States. It may therefore be altered prior to any implementation, the timingof which remains unclear. Additional EU Member States may decide to participate. Prospective holders of the Notes areadvised to seek their own professional advice in relation to the FTT.

Change of law

The Terms and Conditions of the Notes are based on English law in effect as at the date of this Base Prospectus. Noassurance can be given as to the impact of any possible judicial decision or change to English law or administrativepractice after the date of this Base Prospectus.

Bearer Notes where denominations involve integral multiples: definitive Bearer Notes

In relation to any issue of Notes in bearer form which have denominations consisting of a minimum SpecifiedDenomination plus one or more higher integral multiples of another smaller amount, it is possible that such Notes maybe traded in amounts that are not integral multiples of such minimum Specified Denomination. In such a case a holderwho, as a result of trading such amounts, holds an amount which is less than the minimum Specified Denomination in hisaccount with the relevant clearing system at the relevant time may not receive a definitive Note in bearer form (a“Definitive Bearer Note”) in respect of such holding (should such Notes be printed) and would need to purchase aprincipal amount of Notes such that its holding amounts to a Specified Denomination.

If Definitive Bearer Notes are issued, holders should be aware that definitive Notes which have a denomination that isnot an integral multiple of the minimum Specified Denomination may be illiquid and difficult to trade.

Reliance on Euroclear and Clearstream, Luxembourg procedures

Notes issued under the Programme will be represented on issue by one or more Global Notes that may be deposited witha common depositary for Euroclear and Clearstream, Luxembourg (as defined under “Form the Notes”). Except in thecircumstances described in each Global Note, investors will not be entitled to receive Notes in definitive form. Each ofEuroclear and Clearstream, Luxembourg and their respective direct and indirect participants will maintain records of thebeneficial interests in each Global Note held through it. While the Notes are represented by a Global Note, investors willbe able to trade their beneficial interests only through the relevant clearing systems and their respective participants.

While the Notes are represented by Global Notes, the Issuer will discharge its payment obligation under the Notes bymaking payments through the relevant clearing systems. A holder of a beneficial interest in a Global Note must rely onthe procedures of the relevant clearing system and its participants to receive payments under the Notes. The Issuer hasno responsibility or liability for the records relating to, or payments made in respect of, beneficial interests in any GlobalNote.

Holders of beneficial interests in a Global Note will not have a direct right to vote in respect of the Notes so represented.Instead, such holders will be permitted to act only to the extent that they are enabled by the relevant clearing system andits participants to appoint appropriate proxies.

Risks related to the market generally

Set out below is a brief description of the principal market risks, including liquidity risk, exchange rate risk, interest raterisk and credit risk:

The secondary market generally

Notes may have no established trading market when issued and one may never develop. If a market does develop, it maynot be very liquid. Therefore, investors may not be able to sell their Notes easily or at prices that will provide them witha yield comparable to similar investments that have a developed secondary market. This is particularly the case for Notes

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that are especially sensitive to interest rate, currency or market risks, are designed for specific investment objectives orstrategies or have been structured to meet the investment requirements of limited categories of investors. These types ofNotes generally would have a more limited secondary market and more price volatility than conventional debt securities.Illiquidity may have a severely adverse effect on the market value of Notes.

Although application has been made to the Irish Stock Exchange for the Notes issued under the Programme to be admittedto the Official List and trading on the Main Securities Market, there is no assurance that such application will be accepted,that any particular Tranche of Notes will be so admitted or that an active trading market will develop.

Volatility of the Trading Price of the Notes

In recent years, stock markets have experienced significant price fluctuations. These fluctuations were often unrelated tothe operating performance of the companies whose securities are traded on such stock markets. Market fluctuations aswell as adverse economic conditions, have negatively affected the market price of many securities and may affect themarket price of the Notes,

In particular, the markets for securities bearing emerging market risks, such as risks relating to Bulgaria, may be volatile.Markets for such securities are, to varying degrees, influenced by economic and securities market conditions in otheremerging market countries. Although economic conditions are different in each country, investors’ reactions todevelopments in one country may affect securities of issuers in other countries, including Bulgaria.

Exchange rate risks and exchange controls

The Issuer will pay principal and interest on the Notes and the Guarantor will make any payments under the Guaranteerelating to the Notes in the Specified Currency. This presents certain risks relating to currency conversions if an investor’sfinancial activities are denominated principally in a currency or currency unit (the “Investor’s Currency”) other than theSpecified Currency. These include the risk that exchange rates may significantly change (including changes due todevaluation of the Specified Currency or revaluation of the Investor’s Currency) and the risk that authorities withjurisdiction over the Investor’s Currency may impose or modify exchange controls. An appreciation in the value of theInvestor’s Currency relative to the Specified Currency would decrease (1) the Investor’s Currency-equivalent yield onthe Notes, (2) the Investor’s Currency equivalent value of the principal payable on the Notes and (3) the Investor’sCurrency equivalent market value of the Notes.

Government and monetary authorities may impose (as some have done in the past) exchange controls that could adverselyaffect an applicable exchange rate. As a result, investors may receive less interest or principal than expected, or no interestor principal.

Interest rate risks

Investment in Fixed Rate Notes involves the risk that subsequent changes in market interest rates may adversely affectthe value of the Fixed Rate Notes.

Ratings of the Notes

One or more independent credit rating agencies may assign credit ratings to the Notes. The ratings may not reflect thepotential impact of all risks related to structure, market, additional factors discussed above, and other factors that mayaffect the value of the Notes. A credit rating is not a recommendation to buy, sell or hold securities and may be revisedor withdrawn by its assigning rating agency at any time.

In general, European regulated investors are restricted under the CRA Regulation from using a credit rating for regulatorypurposes if such rating is not issued by a credit rating agency established in the European Union and registered under theCRA Regulation or issued by a credit rating agency established in a third party country but whose credit ratings areendorsed by a credit rating agency established in the European Union and registered under the CRA Regulation unlessthe rating is provided by a credit rating agency operating in the European Union before 7 June 2010 which has submittedan application for registration in accordance with the CRA Regulation and such registration has not been refused, isprovided by a third party country rating entity whose ratings are disclosed in that registration application as being ratingsthat will be endorsed by the relevant entity in the EU, or the relevant non-EU rating agency is certified in accordance withthe CRA Regulation. The list of registered and certified rating agencies published by the European Securities and MarketsAuthority (“ESMA”) on its website in accordance with the CRA Regulation is not conclusive evidence of the status ofthe relevant rating agency included in such list, as there may be delays between certain supervisory measures being takenagainst a relevant rating agency and the publication of the updated ESMA list.

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DOCUMENTS INCORPORATED BY REFERENCE

The following documents, which are available on the Issuer’s website (www.eurohold.bg), in the case of the Issuer’sFinancial Statements, and on the Guarantor’s website (www.eig.bg), in the case of the Guarantor’s Financial Statements,have been filed with the Central Bank of Ireland and the Irish Stock Exchange, and shall be deemed to be incorporatedby reference in, and to form part of, this Base Prospectus:

(1) Eurohold Bulgaria AD Annual Consolidated Management Report and Consolidated Financial Statement - 31December 2014 (http://eurohold.bg/files/documents/articles/d042616aac42cc8fc09d1ee108743284.pdf), whichincludes the Issuer’s 2014 Financial Statements (and the auditor’s report thereon and notes thereto), including:

Cross Reference List PageIssuer’s 2014 Financial StatementsIndependent Auditor’s report ..................................................................................................... 46-48Consolidated Statement of Profit or Loss................................................................................... 49Consolidated Statement of Other Comprehensive Income......................................................... 50Consolidated statement of Financial Position ............................................................................ 51-52Consolidated Cash Flow Statement............................................................................................ 53-54Consolidated Statement of Changes in Equity ........................................................................... 55Notes to the Consolidated Financial Statements ........................................................................ 58-94

(2) Eurohold Bulgaria AD Consolidated Annual Report – 31 December 2015(http://eurohold.bg/files/documents/articles/1be5228883f290622794175a9a9269ff.pdf), which includes theIssuer’s 2015 Financial Statements (and the auditors’ report thereon and notes thereto), including:

Cross Reference List PageIssuer’s 2015 Financial StatementsIndependent Auditor’s report ..................................................................................................... 48-50Consolidated Statement of Profit or Loss................................................................................... 51Consolidated Statement of Other Comprehensive Income......................................................... 52Consolidated Statement of Financial Position............................................................................ 53-54Consolidated Cash Flow Statement............................................................................................ 55-56Consolidated Statement of Changes in Equity ........................................................................... 57Consolidated Statement of Profit or Loss by Business Segments .............................................. 58Notes to the Consolidated Financial Statements ........................................................................ 59-100

(3) Eurohold Bulgaria AD Interim Consolidated Management Report and Financial Statements (Reviewed) – 1January – 30 June 2016 (http://eurohold.bg/files/documents/articles/fc0cc35c3aa30e7f6188b726a836b710.pdf),which includes the Issuer’s Interim Financial Statements (and the auditor’s review report thereon and notesthereto), including:

Cross Reference List PageIssuer’s Interim Financial StatementsReview Report............................................................................................................................ 3-5

Interim Consolidated Statement of Profit or Loss ...................................................................... 6Interim Consolidated Statement of Profit or Loss and Other Comprehensive Income .............. 7Interim Consolidated Statement of Financial Position ............................................................... 8-9Interim Consolidated Statement of Cash Flows ......................................................................... 10-11Interim Consolidated Statement of Changes in Equity............................................................... 12Interim Consolidated Statement of Profit or Loss by Business Segments.................................. 13Notes to the Condensed Interim Consolidated Financial Statements ......................................... 14-46

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(4) Euroins Insurance Group AD Annual Consolidated Report on the Activities, Independent Auditor’s Report andAnnual Consolidated Financial Statements – December 31, 2014(http://eig.bg/uploads/assets/Consolidated%20FS%202014%20EIG.pdf), which includes the Guarantor’s 2014Financial Statements (and the auditors’ report thereon and notes thereto), including:

Cross Reference List PageGuarantor’s 2014 Financial StatementsIndependent Auditor’s report ..................................................................................................... 1-3Consolidated Statement of Comprehensive Income................................................................... 1-2Consolidated Statement of Financial Position............................................................................ 3Consolidated Statement of Cash Flows...................................................................................... 4Consolidated Statement of Changes in Equity ........................................................................... 5-6Notes to the Consolidated Financial Statements ........................................................................ 7-64

(5) Euroins Insurance Group AD Annual Consolidated Report on the Activities, Independent Auditor’s Report andAnnual Consolidated Financial Statements – December 31, 2015(http://eig.bg/uploads/assets/Consolidated%20FS%202015_EIG.pdf), which includes the Guarantor’s 2015Financial Statements (and the auditors’ report thereon and notes thereto), including:

Cross Reference List PageGuarantor’s 2015 Financial StatementsIndependent Auditor’s report ..................................................................................................... 1-3Consolidated Statement of Comprehensive Income................................................................... 1-2Consolidated Statement of Financial Position............................................................................ 3Consolidated Statement of Cash Flows...................................................................................... 4Consolidated Statement of Changes in Equity ........................................................................... 5-6Notes to the Consolidated Financial Statements ........................................................................ 7-69

(6) Euroins Insurance Group AD Review Report and Interim Financial Statements - June 30 2016(http://www.eig.bg/uploads/assets/Euroins%20Insurance%20Group%20AD%20Review%20Report%20and%20Interim%20FS%20at%2030-06-2016.pdf), which includes the Guarantor’s Interim Financial Statements (andthe auditors’ review report thereon and notes thereto), including:

Cross Reference List PageGuarantor’s Interim Financial StatementsReview Report............................................................................................................................ 1-3Interim Consolidated Statement of Profit or Loss and Other Comprehensive Income .............. 1-2Interim Consolidated Statement of Financial Position ............................................................... 3Interim Consolidated Statement of Cash Flows ......................................................................... 4Interim Consolidated Statement of Changes in Equity............................................................... 5-6Notes to the Condensed Interim Consolidated Financial Statements ......................................... 7-55

The information incorporated by reference that is not included in the cross-reference list above is considered as additionalinformation and is not required by the relevant schedules of Commission Regulation (EC) 809/2004.

The Issuer’s 2014 Financial Statements and the Issuer’s 2015 Financial Statements have been audited, and the Issuer’sInterim Financial Statements have been reviewed, by BDO Bulgaria OOD (as independent auditor to the Issuer). TheGuarantor’s 2014 Financial Statements and the Guarantor’s 2015 Financial Statements have been audited, and theGuarantor’s Interim Financial Statements have been reviewed, by Deloitte Audit OOD (as independent auditor to theGuarantor). As stated in their reports incorporated by reference in the Consolidated Financial Statements appearing herein.BDO Bulgaria OOD and Deloitte Audit OOD are members of the Institute of Certified Public Accountants of Bulgaria,the professional body which oversees audit firms in Bulgaria.

Any statement contained in a document incorporated by reference into this Base Prospectus or contained in anysupplement to this Base Prospectus or in any document incorporated by reference therein shall, to the extent applicable(whether expressly, by implication or otherwise), be deemed to modify or supersede earlier statements contained in thisBase Prospectus or in a document which is incorporated by reference in this Base Prospectus. Any statement so modifiedor superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Base Prospectus.

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Except as provided above, no other information, including information on the websites of the Issuer, the Guarantor or anyof their respective subsidiaries is incorporated by reference into this Base Prospectus.

Copies of documents incorporated by reference in this Base Prospectus can be obtained from the specified office of theFiscal Agent for the time being in Luxembourg. See “General Information—Documents Available”.

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OVERVIEW OF THE PROGRAMME

The following overview does not purport to be complete and is taken from, and is qualified in its entirety by, otherinformation set forth in this Base Prospectus and, in relation to the terms and conditions of any particular Tranche ofNotes, the applicable Final Terms (or, in the case of Exempt Notes, the applicable Pricing Supplement). The Issuer,the Guarantor and any relevant Dealer may agree that Notes shall be issued in a form other than that contemplatedin the Terms and Conditions of the Notes, in which event a new Base Prospectus or a supplement to the BaseProspectus, if appropriate, will be made available which will describe the effect of the agreement reached in relationto such Notes.

This Overview constitutes a general description of the Programme for the purposes of Article 22.5(3) of CommissionRegulation (EC) № 809/2004 implementing the Prospectus Directive.

Words and expressions defined in “Form of the Notes” and “Terms and Conditions of the Notes” shall have the samemeanings in this Overview.

Issuer: .................................................................... EuroHold Bulgaria AD

Guarantor:.............................................................. Euroins Insurance Group AD

Risk Factors:.......................................................... There are certain factors that may affect the ability of theIssuer to fulfil its obligations under Notes issued under theProgramme and of the Guarantor to fulfil its obligationsunder the Guarantee. These are also set out under “RiskFactors” and include, among others, the Group’s ability toachieve and manage the growth of its business, changes tothe regulatory framework in the businesses in which theGroup operates and the Group’s ability to obtain externalfinancing or maintain sufficient liquidity to fund its existingand future operations and investments. In addition, there arecertain factors which are material for the purpose ofassessing the market risks associated with Notes issuedunder the Programme. These are set out under “RiskFactors” and include certain risks relating to the structure ofparticular Series of Notes and certain market risks.

Description: ........................................................... Euro Medium Term Note Programme

Arranger: ............................................................... Nomura International plc

Dealers:.................................................................. Nomura International plc;

Euro-Finance AD;

Balkan Advisory Company IP EAD,

and any other Dealers appointed in accordance with theProgramme Agreement in respect of a specific Tranche ofNotes or on an ongoing basis.

Certain Restrictions: .............................................. Each Tranche of Notes denominated in a currency in respectof which particular laws, guidelines, regulations, restrictionsor reporting requirements apply will only be issued in

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circumstances which comply with such laws, guidelines,regulations, restrictions or reporting requirements from timeto time. See “Subscription and Sale and Transfer andSelling Restrictions”.

Fiscal Agent: ......................................................... BNP Paribas Securities Services, Luxembourg Branch

Irish Listing Agent: ............................................... Walkers Listing Services Limited

Programme Size: ................................................... Up to EUR 200,000,000 outstanding at any time. The Issuerand the Guarantor may increase the amount of theProgramme in accordance with the terms of the ProgrammeAgreement.

Distribution: .......................................................... Notes may be distributed by way of private or publicplacement and in each case on a syndicated or non-syndicated basis.

Currencies: ............................................................ Notes may be denominated in Euro or, subject to anyapplicable legal or regulatory restrictions, any othercurrency agreed between the Issuer and the relevant Dealer,as specified in the relevant Final Terms or PricingSupplement, as applicable.

Maturities: ............................................................. Notes will have such maturities as may be agreed betweenthe Issuer and the relevant Dealer or Dealers, subject to suchminimum or maximum maturities as may be allowed orrequired from time to time by the relevant central bank (orequivalent body) or any laws or regulations applicable to theIssuer or the relevant Specified Currency, as specified in therelevant Final Terms or Pricing Supplement, as applicable.

Issue Price: ............................................................ Notes may be issued on a fully-paid basis and at an issueprice which is at par or at a discount to, or premium over,par, as specified in the relevant Final Terms or PricingSupplement, as applicable.

Form of Notes:....................................................... The Notes will be issued in bearer or registered form asdescribed in “Form of the Notes”. Registered Notes will notbe exchangeable for Bearer Notes and vice versa.

Fixed Rate Notes: .................................................. Fixed interest will be payable on such date or dates as maybe agreed between the Issuer and the relevant Dealer orDealers and, on redemption, will be calculated on the basisof such Day Count Fraction as may be agreed between theIssuer and the relevant Dealer or Dealers, as specified in therelevant Final Terms or Pricing Supplement, as applicable.

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Floating Rate Notes: .............................................. Floating Rate Notes will bear interest at a rate determined:

(a) on the same basis as the floating rate under anotional interest rate swap transaction in therelevant Specified Currency governed by anagreement incorporating the 2006 ISDADefinitions (as published by the InternationalSwaps and Derivatives Association, Inc., and asamended and updated as at the Issue Date of thefirst Tranche of the Notes of the relevant Series);or

(b) on the basis of a reference rate appearing on theagreed screen page of a commercial quotationservice; or

(c) on such other basis as may be agreed between theIssuer and the relevant Dealer or Dealers.

The margin (if any) relating to such floating rate will beagreed between the Issuer and the relevant Dealer or Dealersfor each Series of Floating Rate Notes, as specified in therelevant Final Terms or Pricing Supplement, as applicable.

Other provisions in relation to Floating Rate

Notes: .................................................................... Floating Rate Notes may also have a maximum interest rate,a minimum interest rate or both.

Interest on Floating Rate Notes in respect of each InterestPeriod, as agreed prior to issue by the Issuer and the relevantDealer, will be payable on such Interest Payment Dates andwill be calculated on the basis of such Day Count Fraction,as may be agreed between the Issuer and the relevant Dealeror Dealers, as specified in the relevant Final Terms orPricing Supplement, as applicable.

Exempt Notes: ....................................................... The Issuer may agree with any Dealer that Exempt Notesmay be issued in a form not contemplated by the Terms andConditions of the Notes, in which event the relevantprovisions will be included in the applicable PricingSupplement, which will replace, modify or supplement theTerms and Conditions.

Redemption: .......................................................... The applicable Final Terms (or, in the case of Exempt Notes,the applicable Pricing Supplement) will indicate that therelevant Notes may not be redeemed prior to their statedmaturity (other than in specified instalments, if applicable,or for taxation reasons or following an Event of Default (asdefined in Condition 10 (Events of Default)), or following aChange of Control Event (as defined in Condition 7.5(Redemption at the Option of the Holder Upon a Change ofControl)) and, if applicable, that such Notes will beredeemable at the option of the Issuer and/or theNoteholders upon giving notice to the Noteholders or theIssuer, as the case may be, on a date or dates specified priorto such stated maturity and at a price or prices and on suchother terms as may be agreed between the Issuer and the

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relevant Dealer or Dealers, as specified in the relevant FinalTerms or Pricing Supplement, as applicable. The terms ofany such redemption, including notice periods, any relevantconditions to be satisfied and the relevant redemption datesand prices will be indicated in the applicable relevant FinalTerms or Pricing Supplement, as applicable.

The applicable Final Terms may provide that Notes may beredeemable in two or more instalments of such amounts andon such dates as are indicated in the applicable Final Terms.

Denomination of Notes: ........................................ The Notes will be issued in such denominations as may beagreed between the Issuer and the relevant Dealer orDealers, as specified in the relevant Final Terms or PricingSupplement, as applicable, save that the minimumdenomination of each Note will be such amount as may beallowed or required from time to time by the relevant centralbank (or equivalent body) or any laws or regulationsapplicable to the relevant Specified Currency, and save thatthe minimum denomination of each Note admitted to tradingon a regulated market within the European Economic Areaor offered to the public in a Member State of the EuropeanEconomic Area in circumstances which would otherwiserequire the publication of a prospectus under the ProspectusDirective will be €100,000 (or, if the Notes are denominatedin a currency other than Euro, the equivalent amount in suchcurrency).

Taxation:................................................................ All payments in respect of Notes will be made withoutdeduction for or on account of withholding taxes imposedby any Tax Jurisdiction as provided in Condition 8(Taxation). In the event that any such deduction is made,the Issuer or, as the case may be, the Guarantor will, save incertain limited circumstances provided in Condition 8(Taxation), be required to pay additional amounts to coverthe amounts so deducted.

Negative Pledge:.................................................... The Terms and Conditions applicable to Notes will containa negative pledge provision as further described inCondition 4.1 (Negative Pledge).

Cross Default:........................................................ The Terms and Conditions applicable to Notes will containa cross default provision as further described in Condition10 (Events of Default).

Other Covenants: ................................................... The Terms and Conditions applicable to Notes will containCovenants which will limit, among other things, the abilityof the Issuer and certain of its Subsidiaries to:

• create or permit to exist certain liens;

• incur or guarantee additional indebtedness;

• enter into certain transactions with affiliates;

• transfer, lease or sell certain assets includingSubsidiary stock; and

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• guarantee, impose restrictions on the ability to paydividends or make other payments.

Each of these covenants is subject to exceptions andqualifications as further described in Condition 4(Covenants).

Status of the Notes:................................................ The Notes will, upon issue, constitute direct, unconditional,unsubordinated and (subject to the provisions of Condition4.1 (Negative Pledge)) unsecured obligations of the Issuerand will rank pari passu, and without any preference amongthemselves, and (save for certain obligations required to bepreferred by law) at all times rank at least equally in right ofpayment with all of the present and future unsecuredobligations of the Issuer from time to time outstandingsubject as described in the Terms and Conditions of theNotes.

Guarantee: ............................................................. The Notes will be unconditionally and irrevocablyguaranteed by the Guarantor. The obligations of theGuarantor under the Guarantee will be direct, unconditionaland (subject to the provisions of Condition 4.1 (NegativePledge)) unsecured obligations of the Guarantor and willrank pari passu, and without any preference amongthemselves, and (save for certain obligations required to bepreferred by law) at all times rank at least equally in right ofpayment with all of the present and future unsecuredobligations of the Guarantor from time to time outstanding.

Rating: ................................................................... The rating of certain Series of the Notes to be issued underthe Programme may be specified in the applicable FinalTerms (or, in the case of Exempt Notes, the applicablePricing Supplement). Whether or not each credit ratingapplied for in relation to relevant Series of Notes will beissued by a credit rating agency established in the EuropeanUnion and registered under the CRA Regulation will bedisclosed in the applicable Final Terms (or, in the case ofExempt Notes, the Pricing Supplement).

Listing and admission to trading: .......................... Application has been made to the Central Bank of Ireland ascompetent authority under the Prospective Directive toapprove this document as a base prospectus which meets therequirements imposed under Irish and EU law pursuant tothe Prospectus Directive. Application has also been madeto the Irish Stock Exchange for Notes issued under theProgramme during the period of 12 months from the datehereof to be admitted to the Official List and trading on theMain Securities Market.

Notes may be listed or admitted to trading, as the case maybe, on other or further stock exchanges or regulated marketsagreed between the Issuer, the Guarantor and the relevantDealer or Dealers in relation to the Series.

Notes which are neither listed nor admitted to trading on anymarket may also be issued.

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Exempt Notes may also be listed or admitted to trading, asthe case may be, on such other or further stock exchange(s)or markets as may be agreed between the Issuer, theGuarantor and the relevant Dealer in relation to each Series(provided that such exchange or market is not a regulatedmarket for the purpose of MiFID).

The applicable Final Terms will state whether or not therelevant Notes are to be listed and/or admitted to tradingand, if so, on which stock exchanges and/or markets.

The applicable Pricing Supplement relating to each Trancheof Exempt Notes will state whether or not the relevant Notesare to be listed or admitted to trading and, if so, on whichstock exchanges and/or markets.

Governing Law:..................................................... The Notes and any non-contractual obligations arising outof or in connection with the Notes will be governed by, andconstrued in accordance with, English law.

Selling Restrictions: .............................................. There are restrictions on the offer, sale and transfer of theNotes in the United States and the European Economic Area(including the United Kingdom and Bulgaria) and there maybe addition restrictions in connection with the offer and saleof a particular Tranche of Notes. See “Subscription and Saleand Transfer and Selling Restrictions”.

United States Selling Restrictions: ........................ Regulation S, Category 2. TEFRA C or D/TEFRA notapplicable, as specified in the applicable Final Terms.

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FORM OF THE NOTES

Any reference in this section to “applicable Final Terms” shall be deemed to include a reference to “applicable PricingSupplement” where relevant.

The Notes of each Series will be in either bearer form, with or without interest coupons attached, or registered form,without interest coupons attached. All Notes will be issued outside the United States to non-U.S. persons in reliance onRegulation S under the Securities Act (“Regulation S”).

Bearer Notes

Each Tranche of Bearer Notes will be initially issued in the form of a temporary global note (a “Temporary BearerGlobal Note”) or, if so specified in the applicable Final Terms, a permanent global note (a “Permanent Bearer GlobalNote” and, together with a Temporary Bearer Global Note, each a “Bearer Global Note”) which, in either case, will:

(a) if the Global Notes are intended to be issued in new global note (“NGN”) form, as stated in the applicable FinalTerms, be delivered on or prior to the original issue date of the Tranche to a common safekeeper (the “CommonSafekeeper”) for Euroclear Bank SA/NV (“Euroclear”) and Clearstream Banking, société anonyme(“Clearstream, Luxembourg”); and

(b) if the Global Notes are not intended to be issued in NGN Form, be delivered on or prior to the original issue dateof the Tranche to a common depositary (the “Common Depositary”) for, Euroclear and Clearstream,Luxembourg.

Whilst any Bearer Note is represented by a Temporary Bearer Global Note, payments of principal, interest (if any) andany other amount payable in respect of the Notes due prior to the Exchange Date (as defined below) will be made (againstpresentation of the Temporary Bearer Global Note if the Temporary Bearer Global Note is not intended to be issued inNGN form) only to the extent that certification (in a form to be provided) to the effect that the beneficial owners ofinterests in the Temporary Bearer Global Note are not U.S. persons or persons who have purchased for resale to any U.S.person, as required by U.S. Treasury regulations, has been received by Euroclear and/or Clearstream, Luxembourg andEuroclear and/or Clearstream, Luxembourg, as applicable, has given a like certification (based on the certifications it hasreceived) to the Fiscal Agent.

On and after the date (the “Exchange Date”) which is 40 days after a Temporary Bearer Global Note is issued, interestsin such Temporary Bearer Global Note will be exchangeable (free of charge) upon a request as described therein eitherfor (i) interests in a Permanent Bearer Global Note of the same Series or (ii) for Definitive Bearer Notes of the sameSeries with, where applicable, receipts, interest coupons and talons attached (as indicated in the applicable Final Termsand subject, in the case of Definitive Bearer Notes, to such notice period as is specified in the applicable Final Terms), ineach case against certification of beneficial ownership as described above unless such certification has already been given.The holder of a Temporary Bearer Global Note will not be entitled to collect any payment of interest, principal or otheramount due on or after the Exchange Date unless, upon due certification, exchange of the Temporary Bearer Global Notefor an interest in a Permanent Bearer Global Note or for Definitive Bearer Notes is improperly withheld or refused.

Payments of principal, interest (if any) or any other amounts on a Permanent Bearer Global Note will be made throughEuroclear and/or Clearstream, Luxembourg (against presentation or surrender (as the case may be) of the PermanentBearer Global Note if the Permanent Bearer Global Note is not intended to be issued in NGN form) without anyrequirement for certification.

The applicable Final Terms will specify that a Permanent Bearer Global Note will be exchangeable (free of charge), inwhole but not in part, for Definitive Bearer Notes with, where applicable, receipts, interest coupons and talons attachedupon either (a) not less than 60 days’ written notice given at any time from Euroclear and/or Clearstream, Luxembourg(acting on the instructions of any holder of an interest in such Permanent Bearer Global Note) to the Fiscal Agent asdescribed therein or (b) only upon the occurrence of an Exchange Event. For these purposes, “Exchange Event” meansthat (i) an Event of Default has occurred and is continuing, (ii) the Issuer has been notified that both Euroclear andClearstream, Luxembourg have been closed for business for a continuous period of 14 days (other than by reason ofholiday, statutory or otherwise) or have announced an intention permanently to cease business or have in fact done so andno successor clearing system is available or (iii) the Issuer has or will become subject to adverse tax consequences whichwould not be suffered were the Notes represented by the Permanent Bearer Global Note in definitive form. The Issuerwill promptly give notice to Noteholders in accordance with Condition 14 (Notices) if an Exchange Event occurs. In theevent of the occurrence of an Exchange Event, Euroclear and/or Clearstream, Luxembourg or the Common Depositaryor the Common Safekeeper for Euroclear and Clearstream, Luxembourg, as the case may be, on their behalf (acting on

26

the instructions of any holder of an interest in such Permanent Bearer Global Note) may give notice to the Fiscal Agentrequesting exchange and, in the event of the occurrence of an Exchange Event as described in (iii) above, the Issuer mayalso give notice to the Fiscal Agent requesting exchange. Any such exchange shall occur not later than 45 days after thedate of receipt of the first relevant notice by the Fiscal Agent.

The following legend will appear on all Bearer Notes, including, where applicable, any receipts, interest coupons andtalons.

“ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO LIMITATIONSUNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING THE LIMITATIONS PROVIDED INSECTIONS 165(j) AND 1287(a) OF THE UNITED STATES INTERNAL REVENUE CODE 1986, AS AMENDED,AND THE REGULATIONS THEREUNDER.”

The sections referred to provide that United States holders, with certain exceptions, will not be entitled to deduct any losson Bearer Notes, receipts or interest coupons and will not be entitled to capital gains treatment of any gain on any sale,disposition, redemption or payment of principal in respect of such Notes, receipts or interest coupons.

Notes which are represented by a Bearer Global Note will only be transferable in accordance with the rules and proceduresfor the time being of Euroclear or Clearstream, Luxembourg, as the case may be.

Registered Notes

The Registered Notes of each Tranche offered and sold in reliance on Regulation S, which will be sold to non-U.S. personsoutside the United States, will initially be represented by a global note in registered form (a “Registered Global Note”).Prior to expiry of the distribution compliance period (as defined in Regulation S) applicable to each Tranche of Notes,beneficial interests in a Registered Global Note may not be offered or sold to, or for the account or benefit of, a U.S.person save as otherwise provided in Condition 2 (Transfers of Registered Notes) and may not be held otherwise thanthrough Euroclear or Clearstream, Luxembourg and such Registered Global Note will bear a legend regarding suchrestrictions on transfer.

Registered Global Notes will be deposited with a Common Depositary or Common Safekeeper, as the case may be, forEuroclear and Clearstream, Luxembourg, and registered in the name of a common nominee of, Euroclear and Clearstream,Luxembourg or in the name of a nominee of the Common Safekeeper, as specified in the applicable Final Terms. Personsholding beneficial interests in Registered Global Notes will be entitled or required, as the case may be, under thecircumstances described below, to receive physical delivery of definitive Notes in fully registered form.

Payments of principal, interest and any other amount in respect of the Registered Global Notes will, in the absence ofprovision to the contrary, be made to the person shown on the Register (as defined in Condition 6.4 (Payments in respectof Registered Notes)) as the registered holder of the Registered Global Notes. None of the Issuer, the Guarantor, anyPaying Agent or the Registrar will have any responsibility or liability for any aspect of the records relating to or paymentsor deliveries made on account of beneficial ownership interests in the Registered Global Notes or for maintaining,supervising or reviewing any records relating to such beneficial ownership interests.

Payments of principal, interest or any other amount in respect of the Registered Notes in definitive form (“DefinitiveRegistered Notes”) will, in the absence of provision to the contrary, be made to the persons shown on the Register on therelevant Record Date (as defined in Condition 6.4 (Payments in respect of Registered Notes)) immediately preceding thedue date for payment in the manner provided in that Condition.

Interests in a Registered Global Note will be exchangeable (free of charge), in whole but not in part, for DefinitiveRegistered Notes without receipts, interest coupons or talons attached only upon the occurrence of an Exchange Event.For these purposes, “Exchange Event” means that (i) an Event of Default has occurred and is continuing, (ii) the Issuerhas been notified that both Euroclear and Clearstream, Luxembourg have been closed for business for a continuous periodof 14 days (other than by reason of holiday, statutory or otherwise) or have announced an intention permanently to ceasebusiness or have in fact done so and, in any such case, no successor clearing system is available or (iii) the Issuer has orwill become subject to adverse tax consequences which would not be suffered were the Notes represented by theRegistered Global Note in definitive form. The Issuer will promptly give notice to Noteholders in accordance withCondition 14 (Notices) if an Exchange Event occurs. In the event of the occurrence of an Exchange Event, Euroclearand/or Clearstream, Luxembourg or any person acting on their behalf (acting on the instructions of any holder of aninterest in such Registered Global Note) may give notice to the Registrar requesting exchange and, in the event of theoccurrence of an Exchange Event as described in (iii) above, the Issuer may also give notice to the Registrar requesting

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exchange. Any such exchange shall occur not later than 10 days after the date of receipt of the first relevant notice by theRegistrar.

Transfer of Interests

Interests in a Registered Global Note may, subject to compliance with all applicable restrictions, be transferred to a personwho wishes to hold such interest in another Registered Global Note. No beneficial owner of an interest in a RegisteredGlobal Note will be able to transfer such interest, except in accordance with the applicable procedures of Euroclear andClearstream, Luxembourg, in each case to the extent applicable. Registered Notes are also subject to the restrictions ontransfer set forth therein (See “Subscription and Sale and Transfer and Selling Restrictions”) and will bear the followinglegend regarding such restrictions:

“THIS SECURITY HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE U.S. SECURITIES ACT OF1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE OR OTHERJURISDICTION OF THE UNITED STATES AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD,DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES OR TO, OR FOR THE ACCOUNT ORBENEFIT OF, U.S. PERSONS EXCEPT IN ACCORDANCE WITH THE AGENCY AGREEMENT AND PURSUANTTO EITHER AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OR AN EFFECTIVEREGISTRATION STATEMENT UNDER THE SECURITIES ACT. THIS LEGEND SHALL CEASE TO APPLYUPON THE EXPIRY OF THE PERIOD OF 40 DAYS AFTER THE COMPLETION OF THE DISTRIBUTION OFALL THE NOTES OF THE TRANCHE OF WHICH THIS NOTE FORMS PART.”

General

Pursuant to the Agency Agreement (as defined under “Terms and Conditions of the Notes”), the Fiscal Agent shall arrangethat, where a further Tranche of Notes is issued which is intended to form a single Series with an existing Tranche ofNotes, the Notes of such further Tranche shall be assigned a common code and ISIN which are different from the commoncode and ISIN assigned to Notes of any other Tranche of the same Series until at least the expiry of the distributioncompliance period (as defined in Regulation S) applicable to the Notes of such Tranche.

Any reference herein to Euroclear and/or Clearstream, Luxembourg shall, whenever the context so permits, be deemedto include a reference to any additional or alternative clearing system specified in the applicable Final Terms or as mayotherwise be approved by the Issuer, the Guarantor and the Fiscal Agent.

A Note may be accelerated by the holder thereof in certain circumstances described in Condition 10 (Events of Default).In such circumstances, where any Note is still represented by a Global Note and the Global Note (or any part thereof) hasbecome due and repayable in accordance with the Terms and Conditions of the Notes and payment in full of the amountdue has not been made in accordance with the provisions of the Global Note then the Global Note will become void at8.00 p.m. (London time) on the day immediately following such day. At the same time holders of interests in such GlobalNote credited to their accounts with Euroclear and/or Clearstream, Luxembourg, as the case may be, will become entitledto proceed directly against the Issuer on the basis of statements of account provided by Euroclear and Clearstream,Luxembourg on and subject to the terms of a deed of covenant (the “Deed of Covenant”) dated 15 November 2016 andexecuted by the Issuer.

The Issuer and the Guarantor may agree with any Dealer that Notes may be issued in a form not contemplated by theTerms and Conditions of the Notes herein, in which event, in the case of Notes other than Exempt Notes, a new BaseProspectus or a supplement to the Base Prospectus, if appropriate, will be made available which will describe the effectof the agreement reached in relation to such Notes.

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APPLICABLE FINAL TERMS

Set out below is the form of Final Terms which will be completed for each Tranche of Notes issued under the Programme

which are not Exempt Notes with a denomination of at least EUR 100,000 (or its equivalent in another currency).

[Date]

EuroHold Bulgaria AD

Issue of [Aggregate Nominal Amount of Tranche] [Title of Notes]

Guaranteed by Euroins Insurance Group AD

under the EUR 200,000,000

Euro Medium Term Note Programme

PART A – CONTRACTUAL TERMS

Terms used herein shall be deemed to be defined as such for the purposes of the Terms and Conditions of the Notes setforth in the Base Prospectus dated 15 November 2016 [and the supplemental Base Prospectus dated [•] which [together]constitutes a base prospectus for the purposes of the Prospectus Directive (Directive 2003/71/EC), as amended, (theProspectus Directive). This document constitutes the Final Terms of the Notes described herein for the purposes ofArticle 5.4 of the Prospectus Directive and must be read in conjunction with the Base Prospectus [as so supplemented].Full information on the Issuer, the Guarantor and the offer of the Notes is only available on the basis of the combinationof these Final Terms and the Base Prospectus [as so supplemented]. The Base Prospectus [and the supplemental BaseProspectus] [is] [are] available for viewing [at [website]] [and] during normal business hours at 43 Christopher ColumbusBlvd., 1592 Sofia, Bulgaria [and copies may be obtained from [address]].

[Include whichever of the following apply or specify as “Not Applicable” (N/A). Note that the numbering should remainas set out below, even if “Not Applicable” is indicated for individual paragraphs or subparagraphs. Italics denotedirections for completing the Final Terms.]

[When adding any other final terms or information consideration should be given as to whether such terms or informationconstitute “significant new factors” and consequently trigger the need for a supplement to the Base Prospectus underArticle 16 of the Prospectus Directive.]

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1. (a) Issuer: EuroHold Bulgaria AD

(b) Guarantor: Euroins Insurance Group AD

2. (a) Series Number: [ ]

(b) Tranche Number: [ ]

(If fungible with an existing Series, details of that Series,

including the date on which the Notes become fungible)

3. Specified Currency or Currencies: [ ]

4. Aggregate Nominal Amount:

(a) Series: [ ]

(b) Tranche: [ ]

5. Issue Price: [ ]% of the Aggregate Nominal Amount [plus accrued

interest from [insert date] (in the case of fungible issues

only, if applicable)]

6. (a) Specified Denominations: [ ]

(in the case of Registered Notes this

means the minimum integral amount in

which transfers can be made)

(Note – where Bearer Notes with multiple denominations

above €100,000 or equivalent are being used the following

sample wording should be followed:

“€100,000 and integral multiples of €1,000 in excess

thereof up to and including €199,000. No Notes in

definitive form will be issued with a denomination above

€199,000.”)

(b) Calculation Amount: [ ]

(If only one Specified Denomination, insert the Specified

Denomination. If more than one Specified Denomination,

insert the highest common factor. Note: There must be a

common factor in the case of two or more Specified

Denominations.)

7. (a) Issue Date: [ ]

(b) Interest Commencement Date: [specify/Issue Date/Not Applicable]

8. Maturity Date: [Fixed rate - specify date/

Floating rate - Interest Payment Date falling in or nearest

to [specify month and year]]

9. Interest Basis: [[ ]% Fixed Rate]

[[LIBOR/EURIBOR] +/- [ ]% Floating Rate]

(further particulars specified below)

30

10. Redemption/Payment Basis: [Redemption at par]

[Instalment]

11. Change of Interest Basis or

Redemption/Payment Basis:

[Specify details of any provision for change of Notes into

another Interest Basis or Redemption/Payment Basis]

12. Put/Call Options: [Investor Put]

[Issuer Call]

[(further particulars specified below)]

13. (a) Status of the Notes: Senior

(b) Status of the Guarantee: Senior

(c) Date Board approval for issuance of

Notes and Guarantee obtained:

[ ] [and [ ], respectively]]

(N.B. Only relevant where Board (or similar)

authorisation is required for the particular Tranche of

Notes or related Guarantee)

14. Method of distribution: [Syndicated/Non-syndicated]

PROVISIONS RELATING TO INTEREST (IF ANY) PAYABLE

15. Fixed Rate Note Provisions [Applicable/Not Applicable]

(If not applicable, delete the remaining subparagraphs

of this paragraph)

(a) Rate(s) of Interest: [ ]% per annum [payable[annually/

semi-annually/quarterly/other (specify)] in arrear]

(If payable other than annually, consider amending

Condition 5 (Interest))

(b) Interest Payment Date(s): [[ ] in each year up to and including the Maturity

Date]/

(N.B. This will need to be amended in the case of long

or short coupons)

(c) Fixed Coupon Amount(s):

(Applicable to Notes in definitive form.)

[ ] per Calculation Amount

(d) Broken Amount(s):

(Applicable to Notes in definitive form.)

[ ] per Calculation Amount, payable on the Interest

Payment Date falling [in/on] [ ]

(e) Day Count Fraction: [30/360 or Actual/Actual (ICMA)]

(f) Determination Date(s): [[ ] in each year] [Not Applicable]

(Insert regular interest payment dates, ignoring issue

date or maturity date in the case of a long or short first

or last coupon

N.B. This will need to be amended in the case of regular

interest payment dates which are not of equal duration

N.B. Only relevant where Day Count Fraction is

Actual/Actual (ICMA))

31

16. Floating Rate Note Provisions [Applicable/Not Applicable]

(If not applicable, delete the remaining subparagraphs

of this paragraph)

(a) Specified Period(s)/Specified Interest

Payment Dates:

[ ]

(b) Business Day Convention: [Floating Rate Convention/Following Business Day

Convention/Modified Following Business Day

Convention/Preceding Business Day Convention]

(c) Additional Business Centre(s): [ ] [Not Applicable]

(d) Manner in which the Rate of Interest and

Interest Amount is to be determined:

[Screen Rate Determination/ISDA Determination]

(e) Party responsible for calculating the Rate

of Interest and Interest Amount (if not the

Fiscal Agent):

[ ]

(f) Screen Rate Determination:

• Reference Rate: [ ]

(Either LIBOR or EURIBOR although additional

information is required if other - including fallback

provisions in the Agency Agreement)

• Interest Determination Date(s): [ ]

(Second London business day prior to the start of each

Interest Period if LIBOR (other than Sterling or Euro

LIBOR), first day of each Interest Period if Sterling

LIBOR and the second day on which the TARGET2

System is open prior to the start of each Interest Period

if EURIBOR or Euro LIBOR)

• Relevant Screen Page: [ ]

(In the case of EURIBOR, if not Reuters EURIBOR01

ensure it is a page which shows a composite rate or

amend the fallback provisions appropriately)

(g) ISDA Determination:

• Floating Rate Option: [ ]

• Designated Maturity: [ ]

• Reset Date: [ ]

(h) Margin(s): [+/-] [ ]% per annum

(i) Minimum Rate of Interest: [ ]% per annum

(j) Maximum Rate of Interest: [ ]% per annum

(k) Day Count Fraction: [Actual/Actual (ISDA)

32

Actual/365 (Fixed)

Actual/365 (Sterling)

Actual/360

30/360

30E/360

30E/360 (ISDA)]

(See Condition 5 (Interest) for alternatives)

(l) Fallback provisions or rounding

provisions relating to the method of

calculating interest on Floating Rate

Notes:

[ ]

PROVISIONS RELATING TO REDEMPTION

17. Issuer Call: [Applicable/Not Applicable]

(If not applicable, delete the remaining subparagraphs

of this paragraph)

(a) Optional Redemption Date(s): [ ]

(b) Optional Redemption Amount: [[ ] per Calculation Amount/see Appendix]

(c) If redeemable in part:

(i) Minimum Redemption Amount: [ ]

(ii) Maximum Redemption Amount: [ ]

(d) Notice period (if other than as set out in

the Conditions):

[ ]

18. Investor Put: [Applicable/Not Applicable]

(If not applicable, delete the remaining subparagraphs

of this paragraph)

(a) Optional Redemption Date(s): [ ]

(b) Optional Redemption Amount: [[ ] per Calculation Amount/ see Appendix]

(c) Notice period (if other than as set out in

the Conditions):

[ ]

19. Final Redemption Amount: [[ ] per Calculation Amount/ see Appendix]

20. Early Redemption Amount payable on redemption

for taxation reasons or on event of default and/or

the method of calculating the same (if required):

[[ ] per Calculation Amount/ see Appendix]

GENERAL PROVISIONS APPLICABLE TO THE NOTES

21. Form of Notes:

[(a) [Form:] [Bearer Notes

33

[Temporary Global Note exchangeable for a Permanent

Global Note which is exchangeable for Definitive

Notes [on 60 days’ notice given at any time/only upon

an Exchange Event]]

[Temporary Global Note exchangeable for Definitive

Notes on and after the Exchange Date]

[Permanent Global Note exchangeable for Definitive

Notes [on 60 days’ notice given at any time/only upon

an Exchange Event/at any time at the request of the

Issuer]]

(Ensure that this is consistent with the wording in the

“Form of the Notes” section in the Base Prospectus

and the Notes themselves. N.B. The exchange upon

notice/at any time at the request of the Issuer options

should not be expressed to be applicable if the Specified

Denomination of the Notes in paragraph 6 includes

language substantially to the following effect:

“€100,000 and integral multiples of €1,000 in excess

thereof up to and including €199,000.” Furthermore,

such Specified Denomination construction is not

permitted in relation to any issue of Notes which is to

be represented on issue by a Temporary Global Note

exchangeable for Definitive Notes.)

[Registered Notes:

[Registered Global Note (€[ ] nominal amount)

registered in the name of a nominee for [a common

depositary for Euroclear and Clearstream,

Luxembourg/a common safekeeper for Euroclear and

Clearstream, Luxembourg]]

(b) [New Global Note: [Yes][No]]

22. Additional Financial Centre(s) or other special

provisions relating to Payment Days:

[Not Applicable/give details]

(Note that this paragraph relates to the place of

payment and not Interest Period end dates to which

sub-paragraphs 16(c) relate)

23. Talons for future Coupons or Receipts to be

attached to Definitive Notes in bearer form (and

dates on which such Talons mature):

[Yes/No. If yes, give details]

24. Details relating to Instalment Notes:

(a) Instalment Amount(s):

(b) Instalment Date(s):

[Not Applicable/give details]

[Not Applicable/give details]

34

DISTRIBUTION

25. (a) If syndicated, names of Managers: [Not Applicable/give names]

(b) Date of [Subscription] Agreement: [ ]

(c) Stabilising Manager(s) (if any): [Not Applicable/give name]

26. If non-syndicated, name of relevant Dealer: [Not Applicable/give name]

27. U.S. Selling Restrictions: [Regulation S Category; TEFRA D/TEFRA C/TEFRA

not applicable]

PURPOSE OF FINAL TERMS

These Final Terms comprise the final terms required for issue and admission to trading on the Main Securities Market

and to listing on the Official List of the Irish Stock Exchange of the Notes described herein pursuant to the EUR

200,000,000 Euro Medium Term Note Programme of EuroHold Bulgaria AD.

RESPONSIBILITY

The Issuer and the Guarantor accept responsibility for the information contained in these Final Terms. The Issuer

confirms that such information has been accurately reproduced and that, so far as it is aware and is able to ascertain from

information published by [specify source], no facts have been omitted which would render the reproduced information

inaccurate or misleading.

Signed on behalf of EuroHold Bulgaria AD: Signed on behalf of Euroins Insurance Group AD:

By: .................................................................. By: .....................................................................

Duly authorised Duly authorised

35

PART B – OTHER INFORMATION

1. LISTING AND ADMISSION TO TRADING

(i) Listing and Admission to trading [Application has been made by the Issuer (or on its behalf) for

the Notes to be admitted to trading on [the Main Securities

Market of the Irish Stock Exchange] and to listing on the

[Official List of the Irish Stock Exchange]/[•] with effect from

[ ].]

(In the case of fungible issues indicate that the original Notes are

already admitted to trading.)

(ii) Estimate of total expenses

related to admission to trading:

[ ]

2. RATINGS

Ratings: [The Notes to be issued [[have been]/[are expected to be]] rated

[insert details] by [insert the legal name of the relevant credit

rating agency entity(ies)].] [Not Applicable.]

(The above disclosure should reflect the rating allocated to Notes

of the type being issued under the Programme generally or,

where the issue has been specifically rated, that rating.)

[Insert legal name of particular credit rating agency entity(ies)

providing rating] is established in the European Economic Area

and registered under the CRA Regulation.]

3. INTERESTS OF NATURAL AND LEGAL PERSONS INVOLVED IN THE ISSUE

[Save for any fees payable to the Dealer, so far as the Issuer is aware, no person involved in the issue of the

Notes has an interest material to the offer. - Amend as appropriate if there are other interests]

[(When adding any other description, consideration should be given as to whether such matters described

constitute “significant new factors” and consequently trigger the need for a supplement to the Base Prospectus

under Article 16 of the Prospectus Directive.)]

4. REASONS FOR THE OFFER, ESTIMATED NET PROCEEDS AND TOTAL EXPENSES

(i) Reasons for the offer [ ]

(ii) Estimated net proceeds: [ ]

(iii) Estimated total expenses: [ ]

5. YIELD (FIXED RATE NOTES ONLY)

Indication of yield: [ ]

The yield is calculated at the Issue Date on the basis of the Issue

Price. It is not an indication of future yield.

36

6. OPERATIONAL INFORMATION

(i) ISIN Code: [ ]

(ii) Common Code: [ ]

(iii) Any clearing system(s) other than

Euroclear and Clearstream,

Luxembourg and the relevant

identification number(s):

[Not Applicable/give name(s) and number(s)]

(iv) Delivery: Delivery [against/free of] payment

(v) Names and addresses of additional

Paying Agent(s) (if any):

[ ]

(vi) Intended to be held in a manner

which would allow Eurosystem

eligibility:

[Yes] [No]

[Note that the designation “yes” simply means that the Notes

are intended upon issue to be deposited with one of the ICSDs

as common safekeeper[, and registered in the name of a

nominee of one of the ICSDs acting as common safekeeper,

that is, held under the NSS,] [include this text for Registered

Notes which are to be held under the NSS] and does not

necessarily mean that the Notes will be recognised as eligible

collateral for Eurosystem monetary policy and intra-day credit

operations by the Eurosystem either upon issue or at any or all

times during their life. Such recognition will depend upon

satisfaction of the Eurosystem eligibility criteria.] [include this

text if “yes” selected in which case Bearer Notes must be

issued in NGN form]

[Whilst the designation is specified as “no” at the date of these

Final Terms, should the Eurosystem eligibility criteria be

amended in the future such that the Notes are capable of

meeting them the Notes may then be deposited with one of the

ICSDs as common safekeeper [(and registered in the name of

a nominee of one of the ICSDs acting as common safekeeper,)]

[include this text for Registered Notes]. Note that this does not

necessarily mean that the Notes will then be recognised as

eligible collateral for Eurosystem monetary policy and intra

day credit operations by the Eurosystem at any time during

their life. Such recognition will depend upon the ECB being

satisfied that Eurosystem eligibility criteria have been met.]

[include this text if “no” is selected.]

37

APPLICABLE PRICING SUPPLEMENT

Set out below is the form of Pricing Supplement which will be completed for each Tranche of Exempt Notes issued

under the Programme.

NO PROSPECTUS IS REQUIRED IN ACCORDANCE WITH DIRECTIVE 2003/71/EC AS AMENDED

FOR THE ISSUE OF NOTES DESCRIBED BELOW. THE CENTRAL BANK OF IRELAND HAS

NEITHER APPROVED NOR REVIEWED THIS PRICING SUPPLEMENT.

[Date]

EuroHold Bulgaria AD

Issue of [Aggregate Nominal Amount of Tranche] [Title of Notes]

Guaranteed by Euroins Insurance Group AD

under the EUR 200,000,000

Euro Medium Term Note Programme

PART A – CONTRACTUAL TERMS

Terms used herein shall be deemed to be defined as such for the purposes of the Terms and Conditions of the

Notes set forth in the Base Prospectus dated 15 November 2016. This Pricing Supplement contains the final terms

of the Notes and must be read in conjunction with the Base Prospectus [and the supplemental Base Prospectus

dated [•]]. Full information on the Issuer, the Guarantor and the offer of the Notes is only available on the basis

of the combination of this Pricing Supplement and the Base Prospectus [and the supplemental Base Prospectus

dated [•]].

[Include whichever of the following apply or specify as “Not Applicable” (N/A). Note that the numbering should

remain as set out below, even if “Not Applicable” is indicated for individual paragraphs or subparagraphs.

Italics denote directions for completing the Final Terms.]

1. (a) Issuer: EuroHold Bulgaria AD

(b) Guarantor: Euroins Insurance Group AD

2. (a) Series Number: [ ]

(b) Tranche Number: [ ]

(If fungible with an existing Series, details of that

Series, including the date on which the Notes become

fungible)

3. Specified Currency or Currencies: [ ]

4. Aggregate Nominal Amount:

(a) Series: [ ]

(b) Tranche: [ ]

5. Issue Price: [ ]% of the Aggregate Nominal Amount [plus

accrued interest from [insert date] (in the case of

fungible issues only, if applicable)]

38

6. (a) Specified Denominations: [ ]

(in the case of Registered Notes

this means the minimum integral

amount in which transfers can be

made)

(Note – where Bearer Notes with multiple

denominations above €100,000 or equivalent are

being used the following sample wording should be

followed:

“€100,000 and integral multiples of €1,000 in excess

thereof up to and including €199,000. No Notes in

definitive form will be issued with a denomination

above €199,000.”)

(b) Calculation Amount: [ ]

(If only one Specified Denomination, insert the

Specified Denomination. If more than one Specified

Denomination, insert the highest common factor.

Note: There must be a common factor in the case of

two or more Specified Denominations.)

7. (a) Issue Date: [ ]

(b) Interest Commencement Date: [specify/Issue Date/Not Applicable]

8. Maturity Date: [Fixed rate - specify date/

Floating rate - Interest Payment Date falling in or

nearest to [specify month and year]]

9. Interest Basis: [[ ]% Fixed Rate]

[[LIBOR/EURIBOR] +/- [ ]% Floating Rate]

[specify other]

(further particulars specified below)

10. Redemption/Payment Basis: [Redemption at par] [Instalment]

[specify other]

11. Change of Interest Basis or

Redemption/Payment Basis:

[Specify details of any provision for change of Notes

into another Interest Basis or Redemption/Payment

Basis]

12. Put/Call Options: [Investor Put]

[Issuer Call]

[(further particulars specified below)]

13. (a) Status of the Notes: Senior

(b) Status of the Guarantee: Senior

(c) Date Board approval for issuance

of Notes and Guarantee obtained:

[ ] [and [ ], respectively]]

(N.B. Only relevant where Board (or similar)

authorisation is required for the particular Tranche of

Notes or related Guarantee)

14. Method of distribution: [Syndicated/Non-syndicated]

39

PROVISIONS RELATING TO INTEREST (IF ANY) PAYABLE

15. Fixed Rate Note Provisions [Applicable/Not Applicable]

(If not applicable, delete the remaining

subparagraphs of this paragraph)

(a) Rate(s) of Interest: [ ]% per annum [payable[annually/

semi-annually/quarterly/other (specify)] in arrear]

(If payable other than annually, consider amending

Condition 5 (Interest))

(b) Interest Payment Date(s): [[ ] in each year up to and including the

Maturity Date]/[specify other]

(N.B. This will need to be amended in the case of

long or short coupons)

(c) Fixed Coupon Amount(s):

(Applicable to Notes in definitive

form.)

[ ] per Calculation Amount

(d) Broken Amount(s):

(Applicable to Notes in definitive

form.)

[ ] per Calculation Amount, payable on the Interest

Payment Date falling [in/on] [ ]

(e) Day Count Fraction: [30/360 or Actual/Actual (ICMA) or [specify

other]]

(f) Determination Date(s): [[ ] in each year] [Not Applicable]

(Insert regular interest payment dates, ignoring

issue date or maturity date in the case of a long or

short first or last coupon

N.B. This will need to be amended in the case of

regular interest payment dates which are not of

equal duration

N.B. Only relevant where Day Count Fraction is

Actual/Actual (ICMA))

(g) Other terms relating to the method of

calculating interest for Fixed Rate

Notes:

[None/Give details]

16. Floating Rate Note Provisions [Applicable/Not Applicable]

(If not applicable, delete the remaining

subparagraphs of this paragraph)

(a) Specified Period(s)/Specified Interest

Payment Dates:

[ ]

(b) Business Day Convention: [Floating Rate Convention/Following Business

Day Convention/Modified Following Business Day

Convention/Preceding Business Day

Convention/[specify other]]

40

(c) Additional Business Centre(s): [ ] [Not Applicable]

(d) Manner in which the Rate of Interest

and Interest Amount is to be

determined:

[Screen Rate Determination/ISDA Determination/

specify other]

(e) Party responsible for calculating the

Rate of Interest and Interest Amount

(if not the Fiscal Agent):

[ ]

(f) Screen Rate Determination:

• Reference Rate: [ ]

(Either LIBOR, EURIBOR or other, although

additional information is required if other -

including fallback provisions in the Agency

Agreement)

• Interest Determination

Date(s):

[ ]

(Second London business day prior to the start of

each Interest Period if LIBOR (other than Sterling

or Euro LIBOR), first day of each Interest Period if

Sterling LIBOR and the second day on which the

TARGET2 System is open prior to the start of each

Interest Period if EURIBOR or Euro LIBOR)

• Relevant Screen Page: [ ]

(In the case of EURIBOR, if not Reuters

EURIBOR01 ensure it is a page which shows a

composite rate or amend the fallback provisions

appropriately)

(g) ISDA Determination:

• Floating Rate Option: [ ]

• Designated Maturity: [ ]

• Reset Date: [ ]

(h) Margin(s): [+/-] [ ]% per annum

(i) Minimum Rate of Interest: [ ]% per annum

(j) Maximum Rate of Interest: [ ]% per annum

(k) Day Count Fraction: [Actual/Actual (ISDA)

Actual/365 (Fixed)

Actual/365 (Sterling)

Actual/360

30/360

30E/360

30E/360 (ISDA)

41

Other]

(See Condition 5 (Interest) for alternatives)

(l) Fallback provisions or rounding

provisions relating to the method of

calculating interest on Floating Rate

Notes:

[ ]

PROVISIONS RELATING TO REDEMPTION

17. Issuer Call: [Applicable/Not Applicable]

(If not applicable, delete the remaining

subparagraphs of this paragraph)

(a) Optional Redemption Date(s): [ ]

(b) Optional Redemption Amount and

method, if any, of calculation of such

amount(s):

[[ ] per Calculation Amount/specify other/see

Appendix]

(c) If redeemable in part:

(i) Minimum Redemption

Amount:

[ ]

(ii) Maximum Redemption

Amount:

[ ]

(d) Notice period (if other than as set out

in the Conditions):

[ ]

18. Investor Put: [Applicable/Not Applicable]

(If not applicable, delete the remaining

subparagraphs of this paragraph)

(a) Optional Redemption Date(s): [ ]

(b) Optional Redemption Amount and

method, if any, of calculation of such

amount(s):

[[ ] per Calculation Amount/specify other/see

Appendix]

(c) Notice period (if other than as set out

in the Conditions):

[ ]

19. Final Redemption Amount: [[ ] per Calculation Amount/specify other/see

Appendix]

20. Early Redemption Amount payable on

redemption for taxation reasons or on event of

default and/or the method of calculating the

same (if required or if different from that set

out in Condition 7.6 (Early Redemption

Amounts)):

[[ ] per Calculation Amount/specify other/see

Appendix]

42

GENERAL PROVISIONS APPLICABLE TO THE NOTES

21. Form of Notes:

[(a) [Form:] [Bearer Notes

[Temporary Global Note exchangeable for a

Permanent Global Note which is exchangeable for

Definitive Notes [on 60 days’ notice given at any

time/only upon an Exchange Event]]

[Temporary Global Note exchangeable for

Definitive Notes on and after the Exchange Date]

[Permanent Global Note exchangeable for

Definitive Notes [on 60 days’ notice given at any

time/only upon an Exchange Event/at any time at

the request of the Issuer]]

(Ensure that this is consistent with the wording in

the “Form of the Notes” section in the Base

Prospectus and the Notes themselves. N.B. The

exchange upon notice/at any time at the request of

the Issuer options should not be expressed to be

applicable if the Specified Denomination of the

Notes in paragraph 6 includes language

substantially to the following effect: “€100,000 and

integral multiples of €1,000 in excess thereof up to

and including €199,000.” Furthermore, such

Specified Denomination construction is not

permitted in relation to any issue of Notes which is

to be represented on issue by a Temporary Global

Note exchangeable for Definitive Notes.)

[Registered Notes:

[Registered Global Note (€[ ] nominal amount)

registered in the name of a nominee for [a common

depositary for Euroclear and Clearstream,

Luxembourg/a common safekeeper for Euroclear

and Clearstream, Luxembourg]]

(b) [New Global Note: [Yes][No]]

22. Additional Financial Centre(s) or other special

provisions relating to Payment Days:

[Not Applicable/give details]

(Note that this paragraph relates to the place of

payment and not Interest Period end dates to which

sub-paragraphs 16(c) relate)

23. Talons for future Coupons or Receipts to be

attached to Definitive Notes in bearer form

(and dates on which such Talons mature):

[Yes/No. If yes, give details]

43

24. Details relating to Instalment Notes:

(a) Instalment Amount(s):

(b) Instalment Date(s):

[Not Applicable/give details]

[Not Applicable/give details]

25. Other final terms: [Not Applicable/give details]

DISTRIBUTION

26. (a) If syndicated, names of Managers: [Not Applicable/give names]

(b) Date of [Subscription] Agreement: [ ]

(c) Stabilising Manager(s) (if any): [Not Applicable/give name]

27. If non-syndicated, name of relevant Dealer: [Not Applicable/give name]

28. U.S. Selling Restrictions: [Regulation S Category; TEFRA D/TEFRA

C/TEFRA not applicable]

29. Additional selling restrictions: [Not Applicable/give details]

[PURPOSE OF PRICING SUPPLEMENT

This Pricing Supplement comprises the pricing supplement required to list the issue of Notes described herein

pursuant to the EUR 200,000,000 Euro Medium Term Note Programme of EuroHold Bulgaria AD.]

RESPONSIBILITY

The Issuer and the Guarantor accept responsibility for the information contained in these Final Terms. The Issuer

confirms that such information has been accurately reproduced and that, so far as it is aware and is able to ascertain

from information published by [specify source], no facts have been omitted which would render the reproduced

information inaccurate or misleading.]

Signed on behalf of EuroHold Bulgaria AD: Signed on behalf of Euroins Insurance Group AD:

By: .................................................................. By: .....................................................................

Duly authorised Duly authorised

44

PART B – OTHER INFORMATION

1. LISTING AND ADMISSION TO TRADING

(i) Listing and Admission to trading [Application [has been made/is expected to be

made] by the Issuer (or on its behalf) for the Notes

to be listed on [specify market – note this must not

be a regulated market] with effect from [ ].] [Not

Applicable.]

(In the case of fungible issues indicate that the

original Notes are already admitted to trading.)

(ii) Estimate of total expenses related to

admission to trading:

[ ] [Not Applicable]

2. RATINGS

Ratings: [The Notes to be issued [[have been]/[are expected

to be]] rated [insert details] by [insert the legal name

of the relevant credit rating agency entity(ies)].]

[Not Applicable.]

(The above disclosure should reflect the rating

allocated to Notes of the type being issued under the

Programme generally or, where the issue has been

specifically rated, that rating.)

[Insert legal name of particular credit rating agency

entity(ies) providing rating] is established in the

European Economic Area and registered under the

CRA Regulation.]

3. OPERATIONAL INFORMATION

(i) ISIN Code: [ ]

(ii) Common Code: [ ]

(iii) Any clearing system(s) other than

Euroclear and Clearstream,

Luxembourg and the relevant

identification number(s):

[Not Applicable/give name(s) and number(s)]

(iv) Delivery: Delivery [against/free of] payment

(v) Names and addresses of additional

Paying Agent(s) (if any):

[ ]

45

(vi) Intended to be held in a manner

which would allow Eurosystem

eligibility:

[Yes] [No]

[Note that the designation “yes” simply means that

the Notes are intended upon issue to be deposited

with one of the ICSDs as common safekeeper[, and

registered in the name of a nominee of one of the

ICSDs acting as common safekeeper, that is, held

under the NSS,] [include this text for Registered

Notes which are to be held under the NSS] and does

not necessarily mean that the Notes will be

recognised as eligible collateral for Eurosystem

monetary policy and intra-day credit operations by

the Eurosystem either upon issue or at any or all

times during their life. Such recognition will depend

upon satisfaction of the Eurosystem eligibility

criteria.] [include this text if “yes” selected in which

case Bearer Notes must be issued in NGN form]

[Whilst the designation is specified as “no” at the

date of this Pricing Supplement, should the

Eurosystem eligibility criteria be amended in the

future such that the Notes are capable of meeting

them the Notes may then be deposited with one of

the ICSDs as common safekeeper [(and registered in

the name of a nominee of one of the ICSDs acting as

common safekeeper,)] [include this text for

Registered Notes]. Note that this does not

necessarily mean that the Notes will then be

recognised as eligible collateral for Eurosystem

monetary policy and intra day credit operations by

the Eurosystem at any time during their life. Such

recognition will depend upon the ECB being

satisfied that Eurosystem eligibility criteria have

been met.] [include this text if “no” is selected.]

46

TERMS AND CONDITIONS OF THE NOTES

The following are the Terms and Conditions of the Notes which will be incorporated by reference into each Global

Note (as defined below) and each definitive Note, in the latter case only if permitted by the relevant stock exchange

or other relevant authority (if any) and agreed by the Issuer and the relevant Dealer at the time of issue but, if not

so permitted and agreed, such definitive Note will have endorsed thereon or attached thereto such Terms and

Conditions. The applicable Final Terms in relation to any Tranche of Notes may complete the following Terms

and Conditions for the purpose of such Notes. The applicable Pricing Supplement in relation to any Tranche of

Exempt Notes may specify other terms and conditions which shall, to the extent so specified or to the extent

inconsistent with the following Terms and Conditions, replace or modify the following Terms and Conditions for

the purpose of such Notes. The applicable Final Terms or Pricing Supplement, as the case may be, (or the relevant

provisions thereof) will be endorsed upon, or attached to, each Global Note and definitive Note. Reference should

be made to “Form of the Notes” for a description of the content of the applicable Final Terms or Pricing

Supplement which will specify which of such terms are to apply in relation to the relevant Notes.

This Note is one of a Series (as defined below) of Notes issued by EuroHold Bulgaria AD (the “Issuer”) pursuant

to the Agency Agreement (as defined below).

References herein to the Notes shall be references to the Notes of this Series and shall mean:

(a) in relation to any Notes represented by a global note (a “Global Note”), units of each Specified

Denomination in the Specified Currency;

(b) any Global Note in bearer form (each a “Bearer Global Note”);

(c) any Global Note in registered form (each a “Registered Global Note”);

(d) any definitive Notes in bearer form (Definitive Bearer Notes) issued in exchange for a Bearer Global

Note; and

(e) any definitive Notes in registered form (“Definitive Registered Notes”) (whether or not issued in

exchange for a Registered Global Note).

The Notes, the Receipts (as defined below) and the Coupons (as defined below) have the benefit of an Agency

Agreement (such Agency Agreement as amended and/or supplemented and/or restated from time to time, the

“Agency Agreement”) dated 15 November 2016 and made between the Issuer, Euroins Insurance Group AD as

guarantor (the “Guarantor”), BNP Paribas Securities Services, Luxembourg Branch as fiscal agent and agent

bank (the “Fiscal Agent”, which expression shall include any successor Fiscal Agent) and the other paying agents

named therein (together with the Fiscal Agent, the “Paying Agents”, which expression shall include any

additional or successor paying agents) and as registrar (the “Registrar”, which expression shall include any

successor registrar) and as transfer agent and the other transfer agents named therein (together with the Registrar,

the “Transfer Agents”, which expression shall include any additional or successor transfer agents).

Interest bearing Definitive Bearer Notes have interest coupons (“Coupons”) and, if indicated in the applicable

Final Terms, talons for further Coupons (“Talons”) attached on issue. Any reference herein to Coupons or

coupons shall, unless the context otherwise requires, be deemed to include a reference to Talons or talons.

Definitive Bearer Notes repayable in instalments have receipts (“Receipts”) for the payment of the instalments of

principal (other than the final instalment) attached on issue. Definitive Registered Notes and Global Notes do not

have Receipts, Coupons or Talons attached on issue.

References herein to “Exempt Notes” are to Notes which are neither admitted to trading on a regulated market in

the European Economic Area nor offered in the European Economic Area in circumstances where a prospectus is

required to be published under the Prospectus Directive. The expression “Prospectus Directive” means Directive

2003/71/EC (as amended, including by Directive 2010/73/EU).

47

The final terms for this Note (or the relevant provisions thereof) are set out in (i) in the case of Notes other than

Exempt Notes, Part A of the Final Terms attached to or endorsed on this Note which complete these Terms and

Conditions (the “Conditions”) for the purpose of such Notes, or (ii) in the case of Exempt Notes, Part A of a

pricing supplement (the “Pricing Supplement”) attached to or endorsed on this Note which complete these

Conditions and may specify other terms and conditions which shall, to the extent so specified or to the extent

inconsistent with these Conditions, amend, modify or replace the Conditions for the purpose of such Notes.

References to the “applicable Final Terms” are, unless otherwise stated, to Part A of the Final Terms (or the

relevant provisions thereof) attached to or endorsed on this Note. If this Note is an Exempt Note, any reference in

the Conditions to applicable Final Terms shall be deemed to be a reference to “applicable Pricing Supplement”

where relevant.

The payment of all amounts in respect of the Notes has been guaranteed by the Guarantor pursuant to a guarantee

(the “Guarantee”) dated 15 November 2016 and executed by the Guarantor. The original of the Guarantee is

held by the Fiscal Agent on behalf of the Noteholders, the Receiptholders and the Couponholders at its specified

office.

Any reference to “Noteholders” or “holders” in relation to any Notes shall mean (in the case of Bearer Notes)

the holders of the Notes and (in the case of Registered Notes) the persons in whose name the Notes are registered

and shall, in relation to any Notes represented by a Global Note, be construed as provided below. Any reference

herein to “Receiptholders” shall mean the holders of the Receipts and any reference herein to “Couponholders”

shall mean the holders of the Coupons and shall, unless the context otherwise requires, include the holders of the

Talons.

As used herein, “Tranche” means Notes which are identical in all respects (including as to listing and admission

to trading) and “Series” means a Tranche of Notes together with any further Tranche or Tranches of Notes which

are (a) expressed to be consolidated and form a single series and (b) identical in all respects (including as to listing

and admission to trading) except for their respective Issue Dates, Interest Commencement Dates and/or Issue

Prices.

The Noteholders, the Receiptholders and the Couponholders are entitled to the benefit of the Deed of Covenant

(the “Deed of Covenant”) dated 15 November 2016 and made by the Issuer. The original of the Deed of Covenant

is held by the common depositary for Euroclear (as defined below) and Clearstream, Luxembourg (as defined

below).

Copies of the Agency Agreement and the Deed of Covenant are available for inspection during normal business

hours at the registered office for the time being of the Fiscal Agent at BNP Paribas Securities Services,

Luxembourg Branch, 60, avenue J-F Kennedy L-2085 Luxembourg City, Luxembourg and at the specified office

of each of the Fiscal Agent, the Registrar and the other Paying Agents and the Transfer Agents (such Agents and

the Registrar being together referred to as the “Agents”). Copies of the applicable Final Terms are available for

viewing at the registered office of the Issuer and of the Fiscal Agent and copies may be obtained from those

offices. If the Notes are to be admitted to trading on a regulated market in the European Economic Area, the

applicable Final Terms will be published on the website of such Stock Exchange. If the Note is an Exempt Note,

the applicable Pricing Supplement will only be obtainable by a Noteholder holding one or more Notes and such

Noteholder must produce evidence satisfactory to the Issuer and the relevant Agent as to its holding of such Notes

and identity. The Noteholders, the Receiptholders and the Couponholders are deemed to have notice of, are bound

by and are entitled to the benefit of, all the provisions of the Agency Agreement, the Guarantee, the Deed of

Covenant and the applicable Final Terms which are applicable to them. The statements in the Conditions include

summaries of, and are subject to, the detailed provisions of the Agency Agreement.

Words and expressions defined in the Agency Agreement or used in the applicable Final Terms shall have the

same meanings where used in the Conditions unless the context otherwise requires or unless otherwise stated and

provided that, in the event of inconsistency between the Agency Agreement and the applicable Final Terms, the

applicable Final Terms will prevail.

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In the Conditions, “euro” means the currency introduced at the start of the third stage of European economic and

monetary union pursuant to the Treaty on the Functioning of the European Union, as amended.

1. FORM, DENOMINATION AND TITLE

The Notes are in bearer form or in registered form as specified in the applicable Final Terms and, in the

case of definitive Notes, serially numbered, in the Specified Currency and the Specified

Denomination(s). Notes of one Specified Denomination may not be exchanged for Notes of another

Specified Denomination and Bearer Notes may not be exchanged for Registered Notes and vice versa.

This Note may be a Fixed Rate Note or a Floating Rate Note or a combination of any of the foregoing,

depending upon the Interest Basis shown in the applicable Final Terms.

This Note may be an Instalment Note depending upon the Redemption/Payment Basis shown in the

applicable Final Terms.

If this Note is an Exempt Note, this Note may include terms and conditions not contemplated by the

Conditions, in such event the relevant provisions will be included in the applicable Pricing Supplement.

Definitive Bearer Notes are issued with Coupons attached.

Subject as set out below, title to the Bearer Notes, Receipts and Coupons will pass by delivery and title

to the Registered Notes will pass upon registration of transfers in accordance with the provisions of the

Agency Agreement. The Issuer, the Guarantor and any Agent will (except as otherwise required by law)

deem and treat the bearer of any Bearer Note, Receipt or Coupon and the registered holder of any

Registered Note as the absolute owner thereof (whether or not overdue and notwithstanding any notice

of ownership or writing thereon or notice of any previous loss or theft thereof) for all purposes but, in

the case of any Global Note, without prejudice to the provisions set out in the next succeeding paragraph.

For so long as any of the Notes is represented by a Global Note held on behalf of Euroclear Bank SA/NV

(“Euroclear”) and/or Clearstream Banking, société anonyme (“Clearstream, Luxembourg”), each

person (other than Euroclear or Clearstream, Luxembourg) who is for the time being shown in the records

of Euroclear or of Clearstream, Luxembourg as the holder of a particular nominal amount of such Notes

(in which regard any certificate or other document issued by Euroclear or Clearstream, Luxembourg as

to the nominal amount of such Notes standing to the account of any person shall be conclusive and

binding for all purposes save in the case of manifest error) shall be treated by the Issuer, the Guarantor

and the Agents as the holder of such nominal amount of such Notes for all purposes other than with

respect to the payment of principal or interest on such nominal amount of such Notes, for which purpose

the bearer of the relevant Bearer Global Note or the registered holder of the relevant Registered Global

Note shall be treated by the Issuer, the Guarantor and any Agent as the holder of such nominal amount

of such Notes in accordance with and subject to the terms of the relevant Global Note and the expressions

“Noteholder” and “holder of Notes” and related expressions shall be construed accordingly.

Notes represented by a Global Note will be transferable only in accordance with the rules and procedures

for the time being of Euroclear and Clearstream, Luxembourg, as the case may be. References to

Euroclear and/or Clearstream, Luxembourg shall, whenever the context so permits, be deemed to include

a reference to any additional or alternative clearing system specified in the applicable Final Terms or as

may otherwise be approved by the Issuer, the Guarantor and the Fiscal Agent.

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2. TRANSFERS OF REGISTERED NOTES

2.1 Transfers of interests in Registered Global Notes

Transfers of beneficial interests in Registered Global Notes will be effected by Euroclear or Clearstream,

Luxembourg, as the case may be, and, in turn, by other participants and, if appropriate, indirect

participants in such clearing systems acting on behalf of transferors and transferees of such interests. A

beneficial interest in a Registered Global Note will, subject to compliance with all applicable legal and

regulatory restrictions, be transferable for Definitive Registered Notes or for a beneficial interest in

another Registered Global Note only in the authorised denominations set out in the applicable Final

Terms and only in accordance with the rules and operating procedures for the time being of Euroclear or

Clearstream, Luxembourg, as the case may be, and in accordance with the terms and conditions specified

in the Agency Agreement.

2.2 Transfers of Definitive Registered Notes

Upon the terms and subject to the conditions set forth in the Agency Agreement, a Definitive Registered

Note may be transferred in whole or in part (in the authorised denominations set out in the applicable

Final Terms). In order to effect any such transfer (a) the holder or holders must (i) surrender the

Definitive Registered Note for registration of the transfer of the Definitive Registered Note (or the

relevant part of the Definitive Registered Note) at the specified office of any Transfer Agent, with the

form of transfer thereon duly executed by the holder or holders thereof or his or their attorney or attorneys

duly authorised in writing and (ii) complete and deposit such other certifications as may be required by

the relevant Transfer Agent and (b) the relevant Transfer Agent must, after due and careful enquiry, be

satisfied with the documents of title and the identity of the person making the request.

Any such transfer will be subject to such reasonable regulations as the Issuer and the Registrar may from

time to time prescribe (the initial such regulations being set out in Schedule 8 to the Agency Agreement).

Subject as provided above, the relevant Transfer Agent will, within three business days (being for this

purpose a day on which banks are open for business in the city where the specified office of the relevant

Transfer Agent is located) of the request (or such longer period as may be required to comply with any

applicable fiscal or other laws or regulations), authenticate and deliver, or procure the authentication and

delivery of, at its specified office to the transferee or (at the risk of the transferee) send by uninsured

mail, to such address as the transferee may request, a new Definitive Registered Note of a like aggregate

nominal amount to the Definitive Registered Note (or the relevant part of the Definitive Registered Note)

transferred. In the case of the transfer of part only of a Definitive Registered Note, a new Definitive

Registered Note in respect of the balance of the Definitive Registered Note not transferred will be so

authenticated and delivered or (at the risk of the transferor) sent to the transferor.

In the case of a transfer of Definitive Registered Notes to an existing holder, a new Note representing the

enlarged holding shall be issued against the surrender of the Definitive Registered Notes representing the

existing holding.

In the event of a partial redemption of Notes under Condition 7 (Redemption and Purchase) a new

Definitive Registered Note shall be issued to the holder in respect of the balance of the holding not

redeemed. New Definitive Registered Notes shall only be issued against surrender of the existing

Definitive Registered Notes to the Registrar or any Transfer Agent.

2.3 Registration of transfer upon partial redemption

In the event of a partial redemption of Notes under Condition 7 (Redemption and Purchase), the Issuer

shall not be required to register the transfer of any Definitive Registered Note, or part of a Definitive

Registered Note, called for partial redemption.

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Delivery of a new Note issued in the event of a partial redemption shall be made as described above in

Condition 2.2 (Transfers of Definitive Registered Notes).

2.4 Costs of registration

Noteholders will not be required to bear the costs and expenses of effecting any registration of transfer

as provided above, except for any costs or expenses of delivery other than by regular uninsured mail and

except that the Issuer may require the payment of a sum sufficient to cover any stamp duty, tax or other

governmental charge that may be imposed in relation to the registration.

3. STATUS OF THE NOTES AND THE GUARANTEE

3.1 Status of the Notes

The Notes and any relative Receipts and Coupons are direct, unconditional, unsubordinated and (subject

to the provisions of Condition 4.1 (Negative Pledge)) unsecured obligations of the Issuer and rank pari

passu among themselves and (save for certain obligations required to be preferred by law) equally in

right of payment with all other unsecured obligations (other than subordinated obligations, if any) of the

Issuer, from time to time outstanding.

3.2 Status of the Guarantee

The payment of principal and interest in respect of the Notes and all other moneys payable by the Issuer

under or pursuant to the Agency Agreement has been unconditionally and irrevocably guaranteed by the

Guarantor under or pursuant to the Guarantee. The obligations of the Guarantor under the Guarantee are

direct, unconditional, unsubordinated and (subject to the provisions of Condition 4.1 (Negative Pledge))

unsecured obligations of the Guarantor and (save for certain obligations required to be preferred by law)

rank equally in right of payment with all other unsecured obligations (other than subordinated

obligations, if any) of the Guarantor, from time to time outstanding.

4. COVENANTS

So long as any of the Notes remains outstanding (as defined in the Agency Agreement):

4.1 Negative Pledge

Neither the Issuer nor the Guarantor will, or will permit any of its Material Subsidiaries to, create or have

outstanding any mortgage, charge, lien, pledge or other security interest (each a Security Interest), other

than a Permitted Security Interest, upon, or with respect to, any of its present or future business,

undertaking, assets or revenues (including any uncalled capital) to secure any Indebtedness (as defined

below) or to guarantee any Indebtedness, unless the Issuer, the Guarantor or, as the case may be, any

such Material Subsidiary in the case of the creation of a Security Interest, before or at the same time and,

in any other case, promptly, takes any and all action necessary to ensure that:

(a) all amounts payable under the Notes and the Coupons or the Guarantee, as the case may be, are

secured by the Security Interest equally and rateably with the Indebtedness otherwise secured

thereby; or

(b) such other Security Interest or other arrangement (whether or not it includes the giving of a

Security Interest) is provided in respect of such amounts as described in clause (a) as is approved

by an Extraordinary Resolution (as defined in the Agency Agreement) of the Noteholders.

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4.2 Asset Sales

Neither the Issuer nor the Guarantor will, or will permit any of its Material Subsidiaries to, directly or

indirectly, consummate any Asset Sale, unless in respect of an Asset Sale (1) the consideration received

by the Issuer, the Guarantor or the relevant Material Subsidiary, as the case may be, is at least equal to

the Fair Market Value of the assets subject to such Asset Sale (2) at least 75% of the consideration for

the Asset Sale is in cash or Temporary Investments provided, that, for purposes of this provision, each

of the following will be deemed to be cash: (A) any liabilities, as shown on the Issuer’s, the Guarantor’s

or any of their Subsidiaries’ most recent internal balance sheet (other than contingent liabilities, liabilities

that are by their terms subordinated to the Notes and liabilities to the extent owed by the Issuer or the

Guarantor), that are assumed by the transferee of any such assets (or a third party on behalf of the

transferee), (B) any securities, notes or other obligations or assets received by the Issuer, the Guarantor,

or any of their respective Subsidiaries from such transferee that are converted by the Issuer, the Guarantor

or Subsidiary into cash or Temporary Investments, to the extent of the cash or Temporary Investments

received in that conversion, within 180 days following the closing of the Asset Sale, and (C) any asset or

stock of the kind referred to in clause (b) or clause (e) below and (3) an amount equal to the Disposal

Proceeds is:

(a) applied to repay permanently any Indebtedness of the Group (other than Disqualified Stock and

subordinated obligations);

(b) invested in assets of a nature or type that is used or usable in the ordinary course of a Core or

Related Business;

(c) retained as cash deposited with a bank or invested in Temporary Investments;

(d) used by the Issuer to purchase the Notes, in whole but not in part, at their principal amount; or

(e) applied to finance an acquisition of the Capital Stock of a person that becomes a Subsidiary as

a result of the acquisition of such Capital Stock by a member of the Group, provided that such

member is primarily engaged in a Core or Related Business,

in each case within 365 days of the date when such Disposal Proceeds are received (it being understood

that receipt by a member of the Group of Capital Stock of any person who, following the consummation

of such Asset Sale is to become a member of the Group and is primarily engaged in a Core or Related

Business, as consideration for such Asset Sale shall be deemed to satisfy the financing of the acquisition

of Capital Stock requirement set out above).

4.3 Transactions with Affiliates

Neither the Issuer nor the Guarantor will, nor will permit any of its Material Subsidiaries to, enter into

or permit to exist any transaction or a series of related transactions (including the purchase, sale, lease or

exchange of any property, employee compensation arrangements or the rendering of any service) with,

or for the benefit of, any Affiliate of the Issuer, the Guarantor or any such Material Subsidiary (an

“Affiliate Transaction”) unless the terms of the Affiliate Transaction are no less favourable to the Issuer,

the Guarantor or such Material Subsidiary than those that could be obtained at the time of the Affiliate

Transaction in arm’s length dealings with a Person who is not an Affiliate, provided, however, that this

provision shall not apply to:

(i) any employment agreement, collective bargaining agreement or employee benefit

arrangements with any officer or director of the Issuer, the Guarantor or the relevant

Subsidiary, including under any stock option or stock incentive plans, entered into in the

ordinary course of business;

(ii) payment of reasonable fees and compensation to employees, officers, directors,

consultants or agents in the ordinary course of business;

52

(iii) transactions between the Issuer, the Guarantor and any of their respective Subsidiaries

or between their respective Subsidiaries;

(iv) the issuance or sales of Capital Stock (other than Disqualified Stock) of the Issuer or the

Guarantor or any of its Material Subsidiaries (provided that, in the case of Material

Subsidiaries, issuances or sales of Capital Stock are made to the Issuer, the Guarantor or

another Material Subsidiary);

(v) the issuance of securities or other payments, award or grants in cash, securities or similar

transfers pursuant to, or for the purpose of funding, employment arrangements and

deferred compensation, retirement, savings, stock options, stock ownership and

insurance plans;

(vi) any payments or other transactions pursuant to a tax-sharing agreement or arrangement

among the Issuer, the Guarantor and any of their respective Subsidiaries or other persons

with whom the Issuer, the Guarantor and any of their respective Subsidiaries files a

consolidated tax return or with which the Issuer, the Guarantor and any of their

respective Subsidiaries is or could be part of a group for tax purposes or any tax

advantageous group contribution made pursuant to applicable legislation, provided,

however, that any such tax sharing agreement or arrangement and any payment pursuant

thereto does not permit or require payments in excess of the amounts of tax that would

be payable by the Issuer, the Guarantor and any of their respective Subsidiaries on a

stand-alone basis;

(vii) transactions with customers, trade creditors, suppliers, vendors, sub-contractors, joint

venture partners or purchasers or sellers of goods and services, in each case, entered into

in the ordinary course of business and otherwise in compliance with the Conditions,

which are fair to the Issuer and the Guarantor and any of their relevant Subsidiaries or

are on terms not materially less favourable to the relevant person than those that would

have been obtained in a comparable transaction by such person with an unrelated person;

(viii) transactions with Affiliates solely in their capacity as holders of Indebtedness or Capital

Stock of the Issuer, the Guarantor or any of their respective Subsidiaries where such

Affiliates are treated not materially more favourably than holders of Indebtedness or

Capital Stock of the relevant person that are not Affiliates;

(ix) any agreement as in effect on the Issue Date, including pursuant to any amendment,

modification, supplement, extension, renewal or refinancing thereto, in any replacement

agreement or arrangement thereto so long as any such amendment, modification,

supplement, extension, renewal, refinancing or replacement agreement or arrangement

is not more disadvantageous to the Issuer or the Guarantor or any of their respective

Subsidiaries, as the case may be, in any material respect than the original agreement as

in effect on the Issue Date;

(x) transactions with a person that is an Affiliate of the Issuer, the Guarantor or any of their

respective Subsidiaries solely because the Issuer, the Guarantor or any of their respective

Subsidiaries owns shares of Capital Stock in, or controls, such person; and

(xi) loans or advances to officers, directors and employees of the Issuer, the Guarantor or

their respective Subsidiaries in the ordinary course of business but in any event not to

exceed, in aggregate, EUR 5,000,000 (or its equivalent in any other currency)

outstanding at any time.

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4.4 Limitations on Restrictions on Distributions from Subsidiaries

Neither the Issuer nor the Guarantor will, nor will permit any of its Material Subsidiaries to, create or

otherwise cause or permit to exist or become effective any consensual encumbrance or restriction on the

ability of any of its Material Subsidiaries to (A) pay dividends or make any other distributions on its

Capital Stock to the Issuer, the Guarantor or any of their respective Subsidiaries or pay any Indebtedness

owed to the Issuer, the Guarantor or any of their respective Subsidiaries, (B) make any loans or advances

to the Issuer, the Guarantor or any of their respective Subsidiaries or (C) transfer any of its property or

assets to the Issuer, the Guarantor or any of their respective Subsidiaries, except:

(a) with respect to (A), (B) and (C) above:

(i) any encumbrance or restriction pursuant to the Notes or the Guarantee or in an agreement

or required by a resolution of a competent body in effect at the Issue Date;

(ii) any such encumbrance or restriction, which is limited to the payment of dividends or

other payments or distributions in any period in an amount up to 50% of the Issuer’s, the

Guarantor’s or the relevant Material Subsidiary’s consolidated (as applicable) net profit

(howsoever captioned and calculated in accordance with Accounting Standards) for such

period;

(iii) any encumbrance or restriction with respect to a Subsidiary pursuant to an agreement

relating to any Indebtedness Incurred by such Subsidiary on or prior to the date on which

such Subsidiary was acquired by the Issuer or the Guarantor (other than Indebtedness

Incurred as consideration in, or to provide all or any portion of the funds or credit support

utilised to consummate, the transaction or series of related transactions pursuant to

which such Subsidiary became a Subsidiary or was acquired by the Issuer or the

Guarantor);

(iv) any encumbrance or restriction with respect to a Subsidiary imposed pursuant to an

agreement entered into for the sale or disposition of all or substantially all the Capital

Stock or assets of such Subsidiary pending the closing of such sale or disposition;

(v) any encumbrance or restriction on cash or other deposits or net worth imposed by leases

or other agreements entered into by a Subsidiary in the ordinary course of business;

(vi) any encumbrance or restriction existing under or by reason of applicable law, rule,

regulation, decree or order of any governmental, local or regulatory authority;

(vii) any encumbrance or restriction existing with respect to any person or the property or

assets of such person acquired by the Issuer, the Guarantor or any of their respective

Subsidiaries, existing at the time of such acquisition and not incurred in contemplation

thereof, which encumbrance or restriction is not applicable to any person or the property

or assets of any person other than such person or the property or assets of such person

so acquired, and any amendments, supplements, extensions, refinancings, renewals or

replacements thereof, provided that the encumbrances and restrictions in any such

amendment, supplement, extension, refinancing, renewal or replacement, taken as a

whole, are no less favourable to the holders of the Notes than the encumbrances or

restrictions that are then in effect and that are being amended, supplemented, extended,

refinanced, renewed or replaced;

(viii) any encumbrance or restriction consisting of customary non-assignment provisions in

leases, contracts and licences entered into in the ordinary course of business; and

(ix) any encumbrance or restriction pursuant to an agreement effecting a refinancing,

extension, modification or amendment of the relevant Indebtedness or otherwise

54

modifying, renewing or extending an encumbrance or restriction permitted by any of the

foregoing clauses (i) through (viii), inclusive, provided, however, that the encumbrances

and restrictions with respect to such Subsidiary contained in any relevant refinancing

agreement or amendment, supplement, extension, refinancing, renewal or replacement

of such Indebtedness are, taken as a whole, no less favourable to the Noteholders in any

material respect than encumbrances and restrictions with respect to such Subsidiary

contained in such predecessor agreements; and

(b) with respect to (C) above only:

(i) any encumbrance or restriction contained in security agreements or mortgages securing

Indebtedness of a Subsidiary to the extent such encumbrance or restriction restricts the

transfer of the property subject to such security agreements or mortgages; and

(ii) customary encumbrances or restrictions in connection with Indebtedness for property

acquired in the ordinary course of business.

4.5 Limitation on Restricted Distributions

(a) The Issuer will not make a Restricted Distribution if at the time the Issuer makes such Restricted

Distribution:

(i) an Event of Default shall have occurred and be continuing (or would result therefrom);

or

(ii) the aggregate amount of such Restricted Distribution and all other Restricted

Distributions since the Issue Date would exceed the sum of (without duplication):

(A) 50% of the Consolidated Net Income accrued during the period (treated as one

accounting period) from 1 January 2016 to the end of the most recent fiscal one-

year period for which financial statements exist prior to the date of such

Restricted Distribution (or, in case such Consolidated Net Income shall be a

deficit, minus 100% of such deficit); plus

(B) 100% of the aggregate net cash proceeds received by the Issuer since the Issue

Date as a contribution to its common equity capital or from the issue or sale of

Capital Stock of the Issuer (other than Disqualified Stock) or the amount by

which Indebtedness of the Group is reduced on the Issuer’s most recent annual

or semi-annual consolidated balance sheet upon the conversion or exchange

subsequent to the Issue Date of any Indebtedness of the Group convertible or

exchangeable for Capital Stock (other than Disqualified Stock) of the Issuer

((plus any cash proceeds received in connection with any such conversion or

exchange) less the amount of any cash, or the fair value of any other property,

distributed by the Issuer upon such conversion or exchange), provided, however,

that the foregoing amount shall not exceed the Net Cash Proceeds received by

the Issuer or any Subsidiary of the Issuer from such conversion or exchange

(excluding Net Cash Proceeds from sales to a Subsidiary of the Issuer or to an

employee stock ownership plan or a trust established by the Issuer or any of its

Subsidiaries for the benefit of their employees).

(b) The preceding provisions will not prohibit:

(i) the making of any Restricted Distribution in exchange for, or out of or with the net cash

proceeds of the substantially concurrent sale (other than to a Subsidiary of the Issuer)

of, Capital Stock of the Issuer (other than Disqualified Stock) or from the substantially

concurrent contribution of common equity capital to the Issuer, provided, however, that

55

such Restricted Distributions shall be excluded in the calculation of the amount of

Restricted Distributions;

(ii) the payment of dividends after the date of declaration thereof if at such date of

declaration such dividends would have complied with this covenant, provided, however,

that at the time of payment of such dividends, no Event of Default shall have occurred

and be continuing (or result therefrom), and provided further, however, that such

dividends shall be included in the calculation of the amount of Restricted Distributions;

(iii) so long as no Event of Default has occurred and is continuing, the purchase, redemption

or other acquisition of shares of Capital Stock of the Issuer, the Guarantor or any of their

respective Subsidiaries from employees, former employees, directors or former directors

of the Issuer, the Guarantor or any of their respective Subsidiaries (or permitted

transferees of such employees, former employees, directors or former directors),

pursuant to the terms of agreements (including employment agreements) or plans (or

amendments thereto) duly approved by the Issuer, the Guarantor or the relevant

Subsidiary and under which such individuals purchase or sell or are granted the option

to purchase or sell, shares of such Capital Stock, provided, however, that the aggregate

amount of such Restricted Distributions (excluding amounts representing cancellation

of Indebtedness) shall not exceed EUR 10,000,000 (or its equivalent in any other

currency) in any calendar year, and provided further that such Restricted Distributions

shall be excluded in the calculation of the amount of Restricted Distributions;

(iv) repurchases of Capital Stock deemed to occur upon exercise of stock options if such

Capital Stock represents a portion of the exercise price of such options, provided that

such repurchases shall be excluded in the calculation of the amount of Restricted

Distributions;

(v) cash payments in lieu of the issuance of fractional shares in connection with the exercise

of warrants, options or other securities convertible into or exchangeable for Capital

Stock of the Issuer, provided, however, that any such cash payment shall not be for the

purpose of evading the limitation of the covenant described under this subheading (as

determined in good faith by the Issuer’s board of directors), and provided further that

such payments shall be excluded in the calculation of the amount of Restricted

Distributions; and

(vi) in the event of a Change of Control Put Event (as defined in Condition 7.5), and if no

Event of Default shall have occurred and be continuing, the payment, purchase,

redemption, defeasance or other acquisition or retirement of subordinated obligations of

the Issuer or the Guarantor, in each case, at a purchase price not greater than 101% of

the principal amount of such subordinated obligations, plus any accrued and unpaid

interest thereon, provided, however, that prior to such payment, purchase, redemption,

defeasance or other acquisition or retirement, the Issuer (or a permitted third party) has

delivered a Change of Control Put Notice in respect of such Change of Control Put Event

and has repurchased the Notes to the extent validly tendered and not withdrawn pursuant

to the terms of the Change of Control Put Option, provided further, however, that such

payments, purchases, redemptions, defeasances or other acquisitions or retirements shall

be included in the calculation of the amount of Restricted Distributions.

4.6 Incurrence of Indebtedness

(a) The Issuer and the Guarantor will not, and will not permit any of their respective Subsidiaries to

incur, directly or indirectly, any Indebtedness except that if, on the date of such Incurrence and

after giving effect thereto on a pro forma basis (as determined in good faith by the Issuer’s chief

financial officer or group treasurer (or officer holding equivalent position)), the Consolidated

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Leverage Ratio would be 4.5 to 1.0 or lower, the Issuer, the Guarantor or any of their respective

Subsidiaries may Incur Indebtedness.

(b) Notwithstanding the foregoing, the Issuer, the Guarantor and/or any of their respective

Subsidiaries may incur any or all Permitted Indebtedness.

(c) Notwithstanding any other provision of this Condition 4.6, the maximum amount that the Issuer,

the Guarantor or any of their respective Subsidiaries may Incur pursuant to this Condition 4.6

shall not be deemed to be exceeded with respect to any outstanding Indebtedness due solely to

the result of fluctuations in the exchange rates of currencies.

(d) For purposes of determining compliance with this Condition 4.6:

(i) the outstanding principal amount of any particular Indebtedness shall be counted only

once and any obligations arising under any Guarantee, supporting such Indebtedness

shall not be double counted;

(ii) Indebtedness permitted by this Condition 4.6 need not be permitted solely by reference

to this Condition 4.6 or one provision of the definition of Permitted Indebtedness in

Condition 4.6 permitting such Indebtedness but may be permitted in part by one such

provision and in part by one or more other provisions of Condition 4.6 and the definition

of Permitted Indebtedness; and

(iii) in the event that any item of Indebtedness meets the criteria of more than one of the types

of Indebtedness described in this Condition 4.6 or one of the provisions of the definition

of Permitted Indebtedness permitting such Indebtedness, the Issuer, the Guarantor or any

of their respective Subsidiaries will be permitted, in its sole discretion, to divide, classify

or reclassify all or a portion of such item of Indebtedness in any manner that complies

with this condition.

(e) Notwithstanding any of the provisions of this Condition 4.6, if a Rating Change occurs, the

provisions of this Condition 4.6 will cease to apply for the purposes of all Series of Notes from

the date of publication of the Rating by the relevant Rating Agency until such date that the

relevant Rating Agency publishes any withdrawal or downgrade of the Rating, in which case

the provisions of this Condition 4.6 will again apply from the date of publication of such

withdrawal or downgrade by the relevant Rating Agency.

4.7 Financial Reporting

Each of the Issuer and the Guarantor shall publish, or cause to be published, on their respective websites

at www.eurohold.bg (in the case of the Issuer) and www.eig.bg (in the case of the Guarantor); (i) within

120 days of the date on which its most recent financial year ended, or such longer period as may be

required under applicable legislation or regulation, its annual consolidated financial statements for such

financial year, together with the report thereon by the Issuer’s or the Guarantor’s (as the case may be)

auditors; and (ii) within 90 days of the end of the first six months of each financial year, or such longer

period as may be required under applicable legislation or regulation, its interim consolidated financial

statements for such six month interim period. In addition, the Issuer shall deliver to the Agent, together

with the relevant annual consolidated financial statements or interim consolidated financial statements,

a Compliance Certificate confirming that each of the Issuer and Guarantor is in compliance with the

covenants applicable to it set out in this Condition 4 as at the date of such financial statements and shall,

upon the request of any Noteholder, provide a copy thereof to any such Noteholder.

4.8 Definitions

In these Conditions, the following terms have the meanings given to them in this Condition 4.8:

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“Accounting Standards” means IFRS.

“Affiliate” means, with respect to any specified person means any other person, directly or indirectly

controlling, controlled by, or under direct or indirect common control with, such specified person. For

purposes of this definition, “control” (including, with correlative meanings, the terms “controlling”,

“controlled by” and “under common control with”), as applied to any person, means the possession,

directly or indirectly, of the power to direct or cause the direction of the management and policies of

such person, whether through the ownership of voting securities, by contract or otherwise.

“Agency” means any agency, authority, central bank, department, committee, government, legislature,

minister, ministry, official or public or statutory person (whether autonomous or not) of, or of the

government of, any state or supra-national body.

“Approved Jurisdiction” means England & Wales, the United States of America, Bulgaria and any

other member nation of the European Union as constituted on the Issue Date.

“Asset Acquisition” means (i) an Investment by the Issuer, the Guarantor or any of their respective

Subsidiaries in any other Person pursuant to which such Person shall become a Subsidiary of the Issuer

or the Guarantor or any of their respective Subsidiaries or shall be consolidated or merged with the Issuer

or the Guarantor or any of their respective Subsidiaries or (ii) the acquisition by the Issuer or the

Guarantor or any of their respective Subsidiaries of assets of any Person which constitute all or

substantially all of the assets of such Person or which comprise a division or line of business of such

Person.

“Asset Sale” means any direct or indirect lease, sale, sale and lease-back, transfer or other disposition,

either in one transaction or in a series of related transactions, by the Issuer, the Guarantor or any of their

respective Material Subsidiaries to a person that is not part of the Group, including any disposition by

means of a merger, consolidation or similar transaction, of any of its assets (including any shares of

Capital Stock of a member of the Group (other than directors’ qualifying shares or shares required by

applicable law to be held by a person other than the Issuer, the Guarantor or any of their respective

Subsidiaries)) or properties, the value of which exceeds 10% of consolidated total assets as shown on the

latest available annual or semi-annual consolidated balance sheet of the Issuer prepared in accordance

with Accounting Standards for the relevant period, other than:

(a) the licensing or sublicensing of rights to intellectual property or other intangibles in the ordinary

course of business;

(b) the sale, lease or other disposition of damaged, obsolete, worn out, negligible, surplus or

outdated equipment or machinery or raw materials or inventory, in each case which is no longer

used or usable, in the ordinary course of business;

(c) the lease, assignment or sublease of any property in the ordinary course of business;

(d) sales or other dispositions of assets or property received by the Issuer, the Guarantor or any of

their respective Subsidiaries upon the foreclosure on a lien granted in favour of the Issuer, the

Guarantor or any of their respective Subsidiaries or any other transfer of title with respect to any

ordinary course secured investment in default;

(e) the surrender or waiver of contract rights or the settlement, release, or surrender of contract, tort

or other claims, in the ordinary course of business;

(f) sales and other dispositions of inventory in the ordinary course of business;

(g) sales and dispositions of cash and Temporary Investments in the ordinary course of business;

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(h) the exchange of assets provided that (A) the assets received will immediately constitute, be part

of, or be used or useful in a Core or Related Business, (B) the assets received are of a comparable

Fair Market Value to the assets exchanged and any cash or Temporary Investments received

from the exchange must be applied in accordance with Condition 4.2;

(i) the disposition of receivables in connection with the compromise, settlement or collection

thereof in the ordinary course of business or in bankruptcy or similar proceeds of any customers,

trade creditors, suppliers, vendors or sub-contractors of the Issuer, the Guarantor or any of their

respective Subsidiaries; and

(j) any royalty or similar arrangement in connection with a Core or Related Business to the extent

that such royalty or similar arrangement is included in the definition of Indebtedness.

“Capital Lease Obligation” means an obligation that is required to be classified and accounted for as a

capital lease for financial reporting purposes in accordance with Accounting Standards, with the amount

of Indebtedness represented by such obligation being the capitalised amount of such obligation in

accordance with Accounting Standards and, for purposes of Clause 4.1, such obligation being secured

by a Security Interest on the property being leased.

“Capital Stock” means, with respect to any person, any and all shares, interests (including partnership

interests), rights to purchase, warrants, options, participations or other equivalents (however designated,

whether voting or non-voting) of such person’s equity, including any Preferred Stock of such person,

whether now outstanding or issued after the Issue Date, including without limitation, all series and classes

of such Capital Stock but excluding any debt securities convertible into or exchangeable for such Capital

Stock.

“Compliance Certificate” means a certificate, in substantially the same form set out in Schedule 11 of

the Agency Agreement, signed and delivered by an authorised signatory of the Issuer in respect of both

the Issuer and Guarantor.

“Consolidated EBITDA” means, in respect of any period, EBITDA as shown on the consolidated

financial statements of the Issuer prepared in accordance with Accounting Standards for such period

calculated on a pro forma basis (as determined in good faith by the Issuer’s chief financial officer or

group treasurer (or officer holding equivalent position)) excluding any line items and amounts

attributable to Eurolease Group EAD or any of its Subsidiaries.

“Consolidated Leverage Ratio” means, as of any date of determination, the ratio of (x) Consolidated

Net Indebtedness as of such date of determination to (y) Consolidated EBITDA for the most recent two

fiscal six-month consecutive periods ended prior to such date of determination for which consolidated

annual or semi-annual financial statements of the Issuer exist (the “Reference Period”) after giving

effect on a pro forma basis (as determined in good faith by the Issuer’s chief financial officer or group

treasurer (or officer holding equivalent position), including with respect to anticipated expense and cost

reduction synergies) to:

(a) the Incurrence of any Indebtedness the permissibility of which is then being measured as well

as the incurrence, repayment, repurchase or other discharge of any other Indebtedness, in each

case, during the Reference Period and the receipt and application of the proceeds therefrom as

well as the funds for such repurchase, repayment or other discharge as if any such transaction

occurred on the date of determination with respect to clause (x) above and on the first date of

the Reference Period with respect to clause (y) above;

(b) the exclusion of Consolidated EBITDA directly attributable to any Asset Sale or the inclusion

of Consolidated EBITDA directly attributable to any Asset Acquisition (including, without

limitation, any Asset Acquisition giving rise to the need to make such calculation as a result of

the incurrence or assumption of Indebtedness) occurring during the Reference Period as if any

such transaction occurred on the first day of the Reference Period; and

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(c) Investments or Asset Acquisitions that have been made by the specified Person or any of its

Subsidiaries, including through mergers or consolidations, or any Person or any of its

Subsidiaries acquired by the specified Person or any of its Subsidiaries, and including any related

financing, transactions and including increases in ownership of Subsidiaries, during the

Reference Period or subsequent to such Reference Period and on or prior to the date of

determination, or that are to be made on the date of determination, as if they had occurred on the

first day of the Reference Period.

If any Indebtedness bears a floating rate of interest and is being given pro forma effect, the interest on

such Indebtedness shall be calculated as if the rate in effect on the date of determination had been the

applicable rate for the entire period (taking into account any interest rate swap, option, cap, collar or floor

agreement applicable to such Indebtedness if such agreement has a remaining term in excess of 12

months). If any Indebtedness is incurred under a revolving credit facility and is being given pro forma

effect, the interest on such Indebtedness shall be calculated based on the average daily balance of such

Indebtedness for the two fiscal six-month consecutive periods subject to the pro forma calculation to the

extent such Indebtedness was incurred solely for working capital purposes.

“Consolidated Net Income” means, for any period, the consolidated net income (howsoever captioned)

of the Issuer as shown on the consolidated financial statements of the Issuer prepared in accordance with

Accounting Standards for such period, provided, however, that there shall not be included in such

Consolidated Net Income (calculated on a pro forma basis (as determined in good faith by the Issuer’s

chief financial officer or group treasurer (or officer holding equivalent position)):

(a) any net income of any person (other than the Issuer or the Guarantor) if such person is not a

Subsidiary, except that:

(i) subject to the exclusion contained in paragraph (b) below, the Issuer’s or the Guarantor’s

equity in the net income of any such person for such period shall be included in such

Consolidated Net Income up to the aggregate amount of cash actually distributed by

such person during such period to the Issuer, the Guarantor or any of their respective

Subsidiaries as a dividend or other distribution; and

(ii) the Issuer’s or the Guarantor’s equity in a net loss of any such person for such period

shall be included in determining such Consolidated Net Income but only to the extent

that such loss has been funded by cash by the Issuer, the Guarantor or any of their

respective Subsidiaries;

(b) any gain (or loss) realised upon the sale or other disposition of any assets of the Issuer, the

Guarantor or their respective Subsidiaries, including upon the sale or other disposition of any

Capital Stock of any person, which, in any case, is not sold or otherwise disposed of in the

ordinary course of business and provided that any such gain (or loss) otherwise includable in

Consolidated Net Income, for purposes of calculating the Consolidated Leverage Ratio for any

Reference Period, will not exceed 2% of the Issuer’s consolidated total assets for such Reference

Period, as determined by reference to the most recent annual or semi-annual consolidated

financial statements prepared in accordance with Accounting Standards for such period;

(c) any exceptional or extraordinary net-of-tax gains or losses and any loss or gain associated with

an impairment of assets;

(d) non-operating foreign exchange gains and losses; and

(e) the cumulative effect of a change in accounting principles

in each case, for such period.

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“Consolidated Net Indebtedness” means, as of any date of determination (and without duplication), allconsolidated Indebtedness of the Issuer as shown in the most recently available consolidated annual orsemi-annual financial statements of the Issuer prepared in accordance with Accounting Standards, as ofsuch date of determination) (excluding any Indebtedness that a Group member has incurred from anotherGroup member and excluding Indebtedness of Eurolease Group EAD or any of its Subsidiaries oraffiliates) minus cash and cash equivalents and bank deposits, each howsoever captioned and as shownin the most recently available consolidated annual or semi-annual balance sheet of the Issuer calculatedin accordance with Accounting Standards as of such date of determination and minus treasury bills, bondsor notes or similar instruments issued by any Agency and held by the Issuer, the Guarantor or any oftheir respective Subsidiaries as of such date of determination.

“Core or Related Business” means any and all principal or ancillary activities of the Group in the

insurance, capital market and corporate finance, leasing or automotive sectors, as well as any other

activity reasonably related or complementary businesses to any of the foregoing.

“Disposal Proceeds” means, with respect to an Asset Sale, the proceeds thereof in the form of cash or

Temporary Investments, including payments in respect of deferred payment obligations when received

in the form of cash or Temporary Investments (except to the extent such obligations are financed or sold

with recourse to the Issuer, the Guarantor or any of their respective Subsidiaries) and proceeds from the

conversion of other property received when converted to cash or Temporary Investments, net of:

(a) brokerage commissions and other fees and expenses (including fees and expenses of accounting

and/or legal advisers and/or investment bankers), title and recording tax expenses, commissions

and other fees and expenses relating to such Asset Sale;

(b) provision for all taxes required to be paid or payable, or required to be accrued as a liability

determined in conformity with Accounting Standards as a result of such Asset Sale;

(c) payments made to repay Indebtedness or any other obligation outstanding at the time of such

Asset Sale that either is secured by a lien on the property or assets sold, or is required to be paid

as a result of such sale;

(d) all distribution and other payments required to be made to minority interest holders in

Subsidiaries as a result of such Asset Sale;

(e) any portion of the consideration for an Asset Sale placed in escrow, whether as a reserve for

adjustment of such consideration, for satisfaction of indemnities in respect of such Asset Sale or

otherwise in connection with that Asset Sale, provided, however, that upon the termination of

that escrow, the amount of the relevant Disposal Proceeds will be increased by any portion of

funds in the escrow that are released to the Issuer, the Guarantor, or any of their respective

Subsidiaries; and

(f) appropriate amounts to be provided by the Issuer, the Guarantor, or any of their respective

Subsidiaries as a reserve against any liabilities associated with such Asset Sale, including,

without limitation, pension and other postemployment benefit liabilities, liabilities related to

environmental matters and liabilities under any indemnification obligation associated with such

Asset Sale, all as determined in conformity with Accounting Standards.

“Disqualified Stock” means, with respect to any person, any Capital Stock which by its terms (or by the

terms of any security into which it is convertible or for which it is exchangeable at the option of the

holder) or upon the happening of any event:

(a) matures or is mandatorily redeemable (other than redeemable only for Capital Stock of such

person which is not itself Disqualified Stock) pursuant to a sinking fund obligation or

otherwise;

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(b) is convertible or exchangeable at the option of the holder for Indebtedness or Disqualified

Stock; or

(c) is mandatorily redeemable or must be purchased upon the occurrence of certain events or

otherwise, in whole or in part;

“Fair Market Value” means the price that would be paid in an arm’s-length transaction between an

informed and willing seller under no compulsion to sell and an informed and willing buyer under no

compulsion to buy, as determined in good faith by the Issuer or the Guarantor or, with respect to any

transaction or series of related transactions involving an aggregate value in excess of EUR 20,000,000

(or its equivalent in any other currency), the price as determined by an Independent Appraiser.

“Group” means the Issuer and its consolidated Subsidiaries taken as a whole.

“Incur” means, with respect to any Indebtedness or other obligation of any person, to create, issue, incur

(including by conversion, exchange or otherwise), assume, guarantee or otherwise become liable in

respect of such Indebtedness or other obligation of such person (and “Incurrence”, “Incurred” and

“Incurring” shall have meanings correlative to the preceding). Indebtedness of any acquired person or

any of its Subsidiaries existing at the time such acquired person becomes a Subsidiary of the Issuer, the

Guarantor or any of their respective Subsidiaries (or is merged into or consolidated with the Issuer, the

Guarantor or any of their respective Subsidiaries), whether or not such Indebtedness was Incurred in

connection with, as a result of, or in contemplation of, such acquired person becoming a Subsidiary of

the Issuer, the Guarantor or any of their respective Subsidiaries (or being merged into or consolidated

with the Issuer, the Guarantor or any of their respective Subsidiaries), shall be deemed Incurred at the

time any such acquired person becomes a Subsidiary of the Issuer, the Guarantor or any of their respective

Subsidiaries (or merges into or consolidates with the Issuer, the Guarantor or any of their respective

Subsidiaries) provided that the following will not be deemed to be an Incurrence:

(a) the accrual of interest or the accretion of original issue discount;

(b) the amortisation of debt discount or the accretion of principal with respect to a non-interest

bearing or other discount security;

(c) the payment of regularly scheduled interest in the form of additional Indebtedness of the same

instrument or the payment of regularly scheduled dividends on Capital Stock in the form of

additional Capital Stock of the same class and with the same terms; and

(d) the obligation to pay a premium in respect of Indebtedness arising in connection with the

issuance of the notice of redemption or the making of a mandatory offer to purchase such

Indebtedness.

“Indebtedness” means any present or future indebtedness (whether being principal, premium, interest

or other amounts, without double counting, which is treated as indebtedness under Accounting

Standards) for or in respect of:

(a) moneys borrowed;

(b) any notes, bonds, debentures, debenture stock, loan stock or other debt security;

(c) any acceptance credit, bill-discounting or note purchase facility;

(d) any deferred purchase price agreement in relation to any asset or service (excluding any such

deferred purchase price agreement which provides for a deferred price of no more than 180

days, and excluding any other deferred purchase price agreement in respect of any asset or

service entered into in the ordinary course of business);

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(e) any lease entered into primarily as a method of raising finance or financing the acquisition of

the asset leased;

(f) any receivables sold or discounted (otherwise than on a non-recourse basis) primarily as a

method of raising finance;

(g) any amount raised under any other transaction having the commercial effect of a borrowing of

money; or

any guarantee, indemnity or similar assurance against financial loss of any person arising under an

obligation falling within (a) to (g) above; provided that, for the avoidance of doubt, any amounts owed

to trade creditors, suppliers, vendors or sub-contractors in the ordinary course of business shall not be

counted as Indebtedness.

“Independent Appraiser” means any of PricewaterhouseCoopers LLP, KPMG LLP, Deloitte & Touche

LLP, Ernst & Young LLP, BDO or any other investment banking, accountancy or appraisal firm of

international standing selected by the competent management body of the Issuer, the Guarantor or the

relevant Subsidiary, provided it is not an Affiliate of the Issuer, the Guarantor or any of their respective

Subsidiaries.

“Investment” means, in any Person, any direct or indirect advance, loan (other than advances to

customers, trade creditors, suppliers, vendors or sub-contractors in the ordinary course of business that

are recorded as accounts receivable on the balance sheet of the lender) or other extensions of credit

(including by way of guarantee or similar arrangement but excluding amounts represented by deposits

with a bank or other financial institution) or capital contribution to (by means of any transfer of cash or

other property to others or any payment for property or services for the account or use of others), or any

purchase or acquisition of Capital Stock, Indebtedness or other similar instruments issued by such Person,

provided that each of the following shall not be deemed to be an Investment:

(a) any interest rate swap, option, cap, collar or floor agreement or any foreign currency swap

agreement or other similar agreement or arrangement designed to protect the Issuer, the

Guarantor or any Subsidiary against fluctuations in interest or foreign currency rates entered into

in the ordinary course of business; and

(b) endorsements of negotiable instruments and documents in the ordinary course of business.

If the Issuer or the Guarantor or any of their respective Subsidiaries issues, sells or otherwise disposes of

any Capital Stock of a Person that is a Subsidiary such that, after giving effect thereto, such Person is no

longer a Subsidiary, any Investment by the Issuer or the Guarantor or any of their respective Subsidiaries

in such Person remaining after giving effect thereto will be deemed to be a new Investment at such time.

The acquisition by the Issuer or the Guarantor or any of their respective Subsidiaries of a Person that

holds an Investment in a third Person will be deemed to be an Investment by the Issuer or the Guarantor

or any of their respective Subsidiaries in such third Person at such time. Except as otherwise provided

for herein, the amount of an Investment shall be its fair market value at the time the Investment is made

and without giving effect to subsequent changes in value.

“Net Cash Proceeds” means, with respect to any issuance or sale of Capital Stock or Indebtedness, the

cash proceeds of such issuance or sale net of legal fees, accountants’ fees, underwriters’ or placement

agents’ fees, discounts or commissions and brokerage, consultant and other fees actually incurred in

connection with such issuance or sale and net of taxes paid or payable as a result thereof.

“Permitted Indebtedness” means:

(a) Indebtedness Incurred on or before the Issue Date, provided that Permitted Indebtedness shall

also include (whether or not then Incurred) an additional principal amount of up to EUR

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10,000,000 to be made available to the Issuer under that certain loan facility dated 14 December

2014, as amended from time to time, with The International Investment Bank;

(b) intercompany and intra-Group Indebtedness owed to and held by the Issuer, the Guarantor or

any of their respective Subsidiaries; provided, however, that (i) any subsequent disposition,

pledge or transfer of such Indebtedness (other than to the Issuer, the Guarantor, or any of their

respective Subsidiaries) shall be deemed, in each case, to constitute the Incurrence of such

Indebtedness by the obligor thereon and (ii) if the Guarantor is the obligor on such Indebtedness,

such Indebtedness is unsecured and, if such Indebtedness is owed to a Subsidiary of the Issuer

that is not the Guarantor, is expressly subordinated to the prior payment in full in cash of all

obligations of the Guarantor in the Guarantee;

(c) Indebtedness represented by the Notes and the Guarantee;

(d) Indebtedness of the Issuer, the Guarantor or any of their respective Subsidiaries Incurred and

outstanding on or prior to the date on which such Subsidiary became a Subsidiary of the Issuer

or the Guarantor or on which the Issuer, the Guarantor or any of their respective Subsidiaries is

merged, consolidated, amalgamated or otherwise combined with (including pursuant to any

acquisition of assets and assumption of related liabilities) the Issuer, the Guarantor or any other

of their respective Subsidiaries (other than Indebtedness Incurred in connection with, or to

provide all or any portion of the funds or credit support utilised to consummate, the transaction

or series of related transactions pursuant to which such Subsidiary became a Subsidiary of the

Issuer or the Guarantor); provided, however, that, on the date of such acquisition and after giving

pro forma effect thereto (as determined in good faith by the Issuer’s chief financial officer or

group treasurer (or officer holding equivalent position and may include anticipated expense and

cost reduction synergies), the Issuer or the Guarantor would have been entitled to Incur at least

EUR 1.00 or its EURO equivalent of additional Indebtedness pursuant to Condition 4.6;

(e) any Guarantee of Indebtedness permitted to be incurred under Condition 4.6 or any other

provision of this definition;

(f) Indebtedness arising from agreements of the Issuer, the Guarantor or any of their respective

Subsidiaries providing for indemnification, obligations in respect of earn-outs, adjustment of

purchase price or similar obligations, in each case, Incurred in connection with any Asset

Acquisition or Asset Sale, or any other acquisition or disposition of any business or Capital

Stock of the Issuer, the Guarantor or any of their respective Subsidiaries; provided that, in the

case of an Asset Sale or other such disposition, the maximum aggregate liability in respect of all

such Indebtedness shall at no time exceed the net proceeds (including the fair market value of

non-cash consideration) actually received by (or held in escrow as collateral for such

Indebtedness for later release to) the Issuer, the Guarantor or any of their respective Subsidiaries

in connection with such Asset Sale or other disposition (without giving effect to any subsequent

changes in value);

(g) Capital Lease Obligations, mortgage financings, and purchase money obligations or other

Indebtedness Incurred to finance all or any part of the purchase price or cost of construction or

improvement of any vehicles or other property, plant or equipment or land or buildings or

otherwise Incurred to finance the purchase, lease, rental or cost of design, construction,

installation, replacement, or improvement of assets or property (real or personal) or equipment

(whether through the direct purchase of assets or the Capital Stock of any Person owning such

assets) (including any reasonably related fees or expenses incurred in connection therewith) by

the Issuer, the Guarantor or any of their respective Subsidiaries;

(h) subordinated Indebtedness Incurred by the Issuer, the Guarantor or any of their respective

Subsidiaries, provided that the terms of any such subordinated Indebtedness are such that the

Indebtedness qualifies as regulatory capital under applicable laws and regulations in the relevant

jurisdiction of the obligor;

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(i) Refinancing Indebtedness Incurred by Issuer, the Guarantor, or any of their respective

Subsidiaries in respect of Indebtedness Incurred by Issuer, the Guarantor, or any of their

respective Subsidiaries pursuant to clauses (b) through (h) inclusive, in this definition of

Permitted Indebtedness;

(j) Indebtedness in respect of any interest rate swap, option, cap, collar or floor agreement or any

foreign currency swap agreement or other similar agreement or arrangement designed to protect

the Issuer, the Guarantor or any Material Subsidiary against fluctuations in interest or foreign

currency rates provided, however, that all such agreements or arrangements are not entered into

for speculative purposes;

(k) any customary cash management, cash pooling or netting or setting off arrangements;

(l) obligations in respect of performance, bid and surety bonds, completion guarantees, advance

payment guarantees, warranty guarantees, letters of credit, or any similar obligations, provided

by the Issuer, the Guarantor or any of their respective Subsidiaries in the ordinary course of

business;

(m) Indebtedness arising from the honouring by a bank or other financial institution of a cheque,

draft or similar instrument inadvertently drawn against insufficient funds in the ordinary course

of business; provided, however, that such Indebtedness is extinguished within five Business

Days of its Incurrence;

(n) Indebtedness in respect of workers’ compensation claims or claims arising under similar

legislation, pursuant to payment obligations in connection with health or other types of social

security benefits, unemployment or other insurance or pursuant to self-insurance obligations,

statutory obligations, bankers’ acceptances, export, import, customs, VAT and other tax

guarantees and not in connection with the borrowing of money or the obtaining of advances or

credit;

(o) customer deposits and advance payments received from customers in the ordinary course of

business; and

(p) any other Indebtedness not expressly permitted above, provided that the aggregate amount of

such Indebtedness so permitted pursuant to this paragraph at any one time shall not exceed an

amount in any currency or currencies equivalent to 2% of the Issuer’s consolidated total assets,

determined by reference to the Issuer’s most recent annual or semi-annual consolidated financial

statements prepared in accordance with Accounting Standards as of such date of determination.

“Permitted Security Interest” means any Security Interest:

(a) in existence on the Issue Date;

(b) granted by the Issuer, the Guarantor or any Material Subsidiary in favour of the Issuer, the

Guarantor or any Material Subsidiary;

(c) incurred in connection with workers’ compensation, unemployment insurance and other social

security benefits, and leases, appeal bonds and other similar obligations in the ordinary course

of business;

(d) securing Indebtedness of a person existing at the time that such person is merged into or

consolidated with the Issuer, the Guarantor or a Material Subsidiary or becomes a Material

Subsidiary; provided that such Security Interests were not created in contemplation of such

merger or consolidation or event and do not extend to any assets or property of the Issuer, the

Guarantor or any Material Subsidiary already existing other than those of the surviving person

and its Subsidiaries or the person acquired and its Subsidiaries;

65

(e) already existing on assets or property acquired or to be acquired by the Issuer, the Guarantor or

any Material Subsidiary; provided that such Security Interests were not created in contemplation

of such acquisition and do not extend to any other assets or property (other than proceeds of

such acquired assets or property);

(f) granted upon or with regard to any property hereafter acquired, leased or constructed in the

ordinary course of business by the Issuer, the Guarantor or any Material Subsidiary to secure

the purchase price of such property, or to secure Capital Lease Obligations, mortgage

financings, purchase money obligations or other Indebtedness Incurred to finance the

acquisition, lease or construction of such property or to secure Indebtedness incurred solely for

the purpose of financing the acquisition, lease or construction of such property and transactional

expenses related to such acquisition and repairs related to such property; provided that the

maximum amount of Indebtedness thereafter secured by such Security Interest does not exceed

the purchase price of such property (including transactional expenses) or the Indebtedness

incurred solely for the purpose of financing the acquisition of such property and related

transactional expenses;

(g) which arises pursuant to any order of attachment, distraint or similar legal process arising in

connection with court proceedings or as security for costs and expenses in any such proceedings,

so long as the execution or other enforcement thereof is effectively stayed and the claims

secured thereby are being contested in good faith by appropriate proceedings;

(h) being liens or rights of set off or to combine accounts or any analogous rights arising by

operation of law or otherwise in the ordinary course of business, including, without limitation,

any rights of set off with respect to demand or time deposits or any credit balance maintained

with financial institutions and bankers’ liens with respect to property of the Issuer, the Guarantor

or any Material Subsidiary held by financial institutions;

(i) arising in the ordinary course of the Issuer’s, the Guarantor’s or a Material Subsidiary’s business

and which (i) are necessary in order to enable the Issuer, the Guarantor or such Material

Subsidiary to comply with any mandatory or customary requirement imposed on it by applicable

regulatory authorities or as otherwise required by applicable law in connection with the Issuer’s,

the Guarantor’s or such Material Subsidiary’s business, (ii) limited to deposits made in the name

of the Issuer, the Guarantor or such Material Subsidiary to secure obligations of the Issuer’s,

the Guarantor’s or such Material Subsidiary’s customers or (iii) are required by trade creditors,

suppliers, vendors or sub-contractors;

(j) on property acquired (or deemed to be acquired) under a financial lease, or claims arising from

the use or loss of or damage to such property, provided that any such encumbrance secures only

rentals and other amounts payable under such lease;

(k) in respect of any interest rate swap, option, cap, collar or floor agreement or any foreign

currency swap agreement or other similar agreement or arrangement designed to protect the

Issuer, the Guarantor or any Material Subsidiary against fluctuations in interest or foreign

currency rates;

(l) any netting or set off arrangement entered into by the Issuer, the Guarantor or any Material

Subsidiary in the ordinary course of its banking arrangements for the purpose of netting debit

and credit balances;

(m) for ad valorem, income or property taxes or assessments and similar charges which either are

not delinquent or are being contested in good faith by appropriate proceedings and for which

the Issuer , the Guarantor or any Material Subsidiary has set aside its books of account

appropriate reserves;

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(n) easements, rights of way, restrictions (including zoning restrictions), reservations, permits,

servitudes, minor defects or irregularities in title and other similar charges or encumbrances,

and Security Interests arising under leases or subleases granted to others, in each case not

interfering in any material respect with the business of the Group;

(o) statutory landlords’ Security Interests (so long as such Security Interests do not secure

obligations constituting Indebtedness and such Security Interests are incurred in the ordinary

course of business);

(p) other pledges or deposits in connection with leases, tenders, bid and surety bonds, completion

guarantees, advance payment guarantees, letters of credit, warranty guarantees or similar

obligations (provided such Security Interests do not secure obligations constituting

Indebtedness and are incurred in the ordinary course of business);

(q) upon, or with respect to, any present or future assets or revenues of the Issuer or Eurolease

Group EAD or any of their respective Subsidiaries or any part thereof which is created pursuant

to any securitisation of receivables, asset-backed financing or similar financing structure and

whereby all payment obligations secured by such Security Interest or having the benefit of such

Security Interest are to be discharged solely from such assets or revenues;

(r) upon, or with respect to, any present or future assets or revenues or any part thereof which is

created pursuant to any repo transaction;

(s) not covered by the provisions of (a) through (p) above, on the property, income or assets of the

Issuer, the Guarantor or any Material Subsidiary securing Indebtedness, provided that the

aggregate amount of Indebtedness so secured pursuant to this paragraph (s) at any one time shall

not exceed an amount in any currency or currencies equivalent to 10% of the Issuer’s

consolidated total assets, determined by reference to the Issuer’s most recent annual or semi-

annual consolidated financial statements prepared in accordance with Accounting Standards as

of such date of determination;

(t) securing Indebtedness represented by bonds, notes, debentures or similar instruments issued by

Eurolease Group EAD or any of its Subsidiaries or affiliates in an amount in any currency or

currencies which shall not exceed 2% of the Issuer’s consolidated total assets determined by

reference to the most recent annual or semi-annual consolidated financial statements prepared

in accordance with Accounting Standards as of such date of determination; or

(u) arising out of the refinancing, extension, renewal or refunding of any Indebtedness secured by

a Security Interest either existing on or before the Issue Date or permitted by any of the above

exceptions, provided that the Indebtedness thereafter secured by such Security Interest does not

exceed the amount of the original Indebtedness and such Security Interest is not extended to

cover any assets, property or revenues not previously subject to such Security Interest (other

than replacement assets of equivalent type and value).

“Person” means any individual, corporation, partnership, joint venture, trust, unincorporated

organisation or government or any Agency or political subdivision thereof.

“Preferred Stock” means, as applied to the Capital Stock of any person, Capital Stock of any class or

classes (however designated) which is preferred as to the payment of dividends or distributions, or as to

the distribution of assets upon any voluntary or involuntary liquidation or dissolution of such person,

over shares of Capital Stock of any other class of such person.

“Rating Change” means that if, on any date, either the Issuer’s or the Guarantor’s long term credit rating

(the Rating) is assigned BB+ (or better) by Standard & Poor’s Credit Market Services Europe Limited,

BB+ (or better) by Fitch Ratings Limited or Ba1 (or better) by Moody’s Investors Service Limited (each

67

a Rating Agency), either at the invitation of the Issuer or Guarantor (or if no Rating Agency is assigned

at the invitation of the Issuer or Guarantor then from any Rating Agency of its own volition).

“Restricted Distribution”, with respect to any person, means:

(a) the declaration or payment of any dividends or any other distributions of any sort in respect of

its Capital Stock (including any payment in connection with any merger or consolidation

involving such person) or similar payment to the direct or indirect holders of its Capital Stock

(other than (A) dividends or distributions payable solely in its Capital Stock (other than

Disqualified Stock) or in options, warrants or other rights to purchase such stock, (B) dividends

or distributions payable solely to the Issuer or a Subsidiary and (C) pro rata dividends or other

distributions made by a Subsidiary that is not a wholly owned Subsidiary to minority

stockholders (or owners of an equivalent interest in the case of a Subsidiary that is an entity

other than a corporation));

(b) the purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of

any Capital Stock of the Issuer held by any person (other than by a Subsidiary), including in

connection with any merger or consolidation and including the exercise of any option to

exchange any Capital Stock (other than into Capital Stock of the Issuer that is not Disqualified

Stock); or

(c) the purchase, repurchase, redemption, defeasance or other acquisition or retirement for value,

prior to scheduled maturity, scheduled repayment or scheduled sinking fund payment of any

subordinated obligations of the Issuer or the Guarantor (other than (A) from or by the Issuer or

a Subsidiary or (B) the purchase, repurchase, redemption, defeasance or other acquisition or

retirement of subordinated obligations purchased in anticipation of satisfying a sinking fund

obligation, principal instalment or final maturity, in each case due within one year of the date of

such purchase, repurchase, redemption, defeasance or other acquisition or retirement).

“Subsidiary” or “Subsidiaries” means any corporation, partnership, joint venture, association or other

business entity, whether now existing or hereafter organised or acquired:

(a) in the case of a corporation, of which more than 50% of the total share capital of such corporation

is, or shares in the capital of such corporation carrying more than 50% of the voting rights

normally exercisable at a general meeting of such corporation, are held by the Issuer, the

Guarantor and/or any of their respective Subsidiaries or in respect of which the Issuer, the

Guarantor and/or any of their respective Subsidiaries has the power to direct the management,

policies and affairs;

(b) in the case of a partnership, joint venture, association, or other business entity, with respect to

which the Issuer, the Guarantor and/or any of their respective Subsidiaries has the power to

direct or cause the direction of the management and policies of such entity by contract; or

(c) whose financial statements are, in accordance with applicable law and Accounting Standards,

consolidated with those of the Issuer, the Guarantor and/or any of their respective Subsidiaries.

“Temporary Investments” means:

(a) any evidence of Indebtedness with a maturity of one year or less issued or directly and fully

guaranteed or insured by a corporation organised under the laws of an Approved Jurisdiction or

any Agency or instrumentality thereof, provided that the full faith and credit of an Approved

Jurisdiction (or similar concept under the laws of the relevant Approved Jurisdiction) is pledged

in support thereof;

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(b) commercial paper with a maturity of one year or less issued by a corporation organised under

the laws of an Approved Jurisdiction and rated at all times at least investment grade by the

relevant Rating Agency;

(c) commercial paper with a maturity of one year or less, issued by a corporation organised under

the laws of an Approved Jurisdiction, and at all times listed or traded on the London Inter-bank

Currency Exchange;

(d) current account balances, deposits, certificates of deposit, promissory notes, acceptances or

money market deposits with a maturity of one year or less of (i) any institution organised in an

Approved Jurisdiction having combined, consolidated, capital and surplus and undivided profits

(or any similar concept) of not less than EUR 250,000,000 (or the equivalent in another

currency) determined in conformity with Accounting Standards and as set forth in the most

recent publicly available financial reports published by such institution;

(e) repurchase agreements and reverse repurchase agreements relating to marketable direct

obligations issued or unconditionally guaranteed by the government of an Approved

Jurisdiction, which obligations mature within 30 days from the date of acquisition; and/or

(f) interests in any money market funds at least 95% of the assets of which consist of Temporary

Investments of the type referred to in paragraphs (a) to (e) above.

5. INTEREST

5.1 Interest on Fixed Rate Notes

Each Fixed Rate Note bears interest from (and including) the Interest Commencement Date at the rate(s)

per annum equal to the Rate(s) of Interest. Interest will be payable in arrear on the Interest Payment

Date(s) in each year up to (and including) the Maturity Date.

If the Notes are in definitive form, except as provided in the applicable Final Terms, the amount of

interest payable on each Interest Payment Date in respect of the Fixed Interest Period ending on (but

excluding) such date will amount to the Fixed Coupon Amount. Payments of interest on any Interest

Payment Date will, if so specified in the applicable Final Terms, amount to the Broken Amount so

specified.

As used in the Conditions, “Fixed Interest Period” means the period from (and including) an Interest

Payment Date (or the Interest Commencement Date) to (but excluding) the next (or first) Interest

Payment Date.

Except in the case of Notes in definitive form where an applicable Fixed Coupon Amount or Broken

Amount is specified in the applicable Final Terms, interest shall be calculated in respect of any period

by applying the Rate of Interest to:

(a) in the case of Fixed Rate Notes represented by a Global Note, the aggregate outstanding nominal

amount of the Fixed Rate Notes represented by such Global Note; or

(b) in the case of Fixed Rate Notes in definitive form, the Calculation Amount;

and, in each case, multiplying such sum by the applicable Day Count Fraction and rounding the resultant

figure to the nearest sub-unit of the relevant Specified Currency, half of any such sub-unit being rounded

upwards or otherwise in accordance with applicable market convention. Where the Specified

Denomination of a Fixed Rate Note in definitive form is a multiple of the Calculation Amount, the

amount of interest payable in respect of such Fixed Rate Note shall be the product of the amount

69

(determined in the manner provided above) for the Calculation Amount and the amount by which the

Calculation Amount is multiplied to reach the Specified Denomination, without any further rounding.

“Day Count Fraction” means, in respect of the calculation of an amount of interest, in accordance with

this Condition 5.1:

(i) if “Actual/Actual (ICMA)” is specified in the applicable Final Terms:

(A) in the case of Notes where the number of days in the relevant period from (and

including) the most recent Interest Payment Date (or, if none, the Interest

Commencement Date) to (but excluding) the relevant payment date (the “Accrual

Period”) is equal to or shorter than the Determination Period during which the Accrual

Period ends, the number of days in such Accrual Period divided by the product of (1)

the number of days in such Determination Period and (2) the number of Determination

Dates (as specified in the applicable Final Terms) that would occur in one calendar

year; or

(B) in the case of Notes where the Accrual Period is longer than the Determination Period

during which the Accrual Period ends, the sum of:

(1) the number of days in such Accrual Period falling in the Determination Period

in which the Accrual Period begins divided by the product of (x) the number

of days in such Determination Period and (y) the number of Determination

Dates that would occur in one calendar year; and

(2) the number of days in such Accrual Period falling in the next Determination

Period divided by the product of (x) the number of days in such Determination

Period and (y) the number of Determination Dates that would occur in one

calendar year; and

(ii) if “30/360” is specified in the applicable Final Terms, the number of days in the period from

(and including) the most recent Interest Payment Date (or, if none, the Interest Commencement

Date) to (but excluding) the relevant payment date (such number of days being calculated on

the basis of a year of 360 days with 12 30-day months) divided by 360.

In these Conditions:

“Determination Period” means each period from (and including) a Determination Date to but excluding

the next Determination Date (including, where either the Interest Commencement Date or the final

Interest Payment Date is not a Determination Date, the period commencing on the first Determination

Date prior to, and ending on the first Determination Date falling after, such date); and

“sub-unit” means, with respect to any currency other than euro, the lowest amount of such currency that

is available as legal tender in the country of such currency and, with respect to euro, one cent.

5.2 Interest on Floating Rate Notes

(a) Interest Payment Dates

Each Floating Rate Note bears interest from (and including) the Interest Commencement Date and such

interest will be payable in arrear on either:

(i) the Specified Interest Payment Date(s) in each year specified in the applicable Final Terms; or

70

(ii) if no Specified Interest Payment Date(s) is/are specified in the applicable Final Terms, each date

(each such date, together with each Specified Interest Payment Date, an “Interest Payment

Date”) which falls the number of months or other period specified as the Specified Period in

the applicable Final Terms after the preceding Interest Payment Date or, in the case of the first

Interest Payment Date, after the Interest Commencement Date.

Such interest will be payable in respect of each Interest Period (which expression shall, in these

Conditions, mean the period from (and including) an Interest Payment Date (or the Interest

Commencement Date) to (but excluding) the next (or first) Interest Payment Date).

If a Business Day Convention is specified in the applicable Final Terms and (x) if there is no numerically

corresponding day on the calendar month in which an Interest Payment Date should occur or (y) if any

Interest Payment Date would otherwise fall on a day which is not a Business Day, then, if the Business

Day Convention specified is:

(A) in any case where Specified Periods are specified in accordance with Condition 5.2(a)(ii) above,

the Floating Rate Convention, such Interest Payment Date (i) in the case of (x) above, shall be

the last day that is a Business Day in the relevant month and the provisions of (c) below shall

apply mutatis mutandis or (ii) in the case of (y) above, shall be postponed to the next day which

is a Business Day unless it would thereby fall into the next calendar month, in which event (1)

such Interest Payment Date shall be brought forward to the immediately preceding Business

Day and (2) each subsequent Interest Payment Date shall be the last Business Day in the month

which falls the Specified Period after the preceding applicable Interest Payment Date occurred;

or

(B) the Following Business Day Convention, such Interest Payment Date shall be postponed to the

next day which is a Business Day; or

(C) the Modified Following Business Day Convention, such Interest Payment Date shall be

postponed to the next day which is a Business Day unless it would thereby fall into the next

calendar month, in which event such Interest Payment Date shall be brought forward to the

immediately preceding Business Day; or

(D) the Preceding Business Day Convention, such Interest Payment Date shall be brought forward

to the immediately preceding Business Day.

In these Conditions, “Business Day” means a day which is:

(i) a day on which commercial banks and foreign exchange markets settle payments and are open

for general business (including dealing in foreign exchange and foreign currency deposits) in

each Additional Business Centre (other than Trans-European Automated Real-Time Gross

Settlement Express Transfer (TARGET 2) System (the “TARGET 2 System”)) specified in the

applicable Final Terms;

(ii) if TARGET 2 System is specified as an Additional Business Centre in the applicable Final

Terms, a day on which the TARGET 2 System is open; and

(iii) either (1) in relation to any sum payable in a Specified Currency other than euro, a day on which

commercial banks and foreign exchange markets settle payments and are open for general

business (including dealing in foreign exchange and foreign currency deposits) in the principal

financial centre of the country of the relevant Specified Currency or (2) in relation to any sum

payable in euro, a day on which the TARGET 2 System is open.

71

(b) Rate of Interest

The Rate of Interest payable from time to time in respect of Floating Rate Notes will be determined in

the manner specified in the applicable Final Terms.

(i) ISDA Determination for Floating Rate Notes

Where ISDA Determination is specified in the applicable Final Terms as the manner in which

the Rate of Interest is to be determined, the Rate of Interest for each Interest Period will be the

relevant ISDA Rate plus or minus (as indicated in the applicable Final Terms) the Margin (if

any). For the purposes of this subparagraph (i), “ISDA Rate” for an Interest Period means a

rate equal to the Floating Rate that would be determined by the Fiscal Agent under an interest

rate swap transaction if the Fiscal Agent were acting as Calculation Agent for that swap

transaction under the terms of an agreement incorporating the 2006 ISDA Definitions, as

published by the International Swaps and Derivatives Association, Inc. and as amended and

updated as at the Issue Date of the first Tranche of the Notes (the “ISDA Definitions”) and

under which:

(A) the Floating Rate Option is as specified in the applicable Final Terms;

(B) the Designated Maturity is a period specified in the applicable Final Terms; and

(C) the relevant Reset Date is either (1) if the applicable Floating Rate Option is based on

the London interbank offered rate (“LIBOR”) or on the Euro-zone interbank offered

rate (“EURIBOR”), the first day of that Interest Period or (2) in any other case, as

specified in the applicable Final Terms.

For the purposes of this subparagraph (i), “Floating Rate, Calculation Agent”, “Floating Rate

Option”, “Designated Maturity” and “Reset Date” have the meanings given to those terms in

the ISDA Definitions.

Unless otherwise stated in the applicable Final Terms, the Minimum Rate of Interest shall be

deemed to be zero.

(ii) Screen Rate Determination for Floating Rate Notes

Where Screen Rate Determination is specified in the applicable Final Terms as the manner in

which the Rate of Interest is to be determined, the Rate of Interest for each Interest Period will,

subject as provided below, be either:

(A) the offered quotation; or

(B) the arithmetic mean (rounded if necessary to the fifth decimal place, with 0.000005

being rounded upwards) of the offered quotations,

(expressed as a percentage rate per annum) for the Reference Rate which appears or appear, as

the case may be, on the Relevant Screen Page as at 11.00 a.m. (London time, in the case of

LIBOR, or Brussels time, in the case of EURIBOR) on the Interest Determination Date in

question plus or minus (as indicated in the applicable Final Terms) the Margin (if any), all as

determined by the Fiscal Agent. If five or more of such offered quotations are available on the

Relevant Screen Page, the highest (or, if there is more than one such highest quotation, one only

of such quotations) and the lowest (or, if there is more than one such lowest quotation, one only

of such quotations) shall be disregarded by the Fiscal Agent for the purpose of determining the

arithmetic mean (rounded as provided above) of such offered quotations.

72

The Agency Agreement contains provisions for determining the Rate of Interest in the event

that the Relevant Screen Page is not available or if, in the case of (A) above, no such offered

quotation appears or, in the case of (B) above, fewer than three such offered quotations appear,

in each case as at the time specified in the preceding paragraph.

(c) Minimum Rate of Interest and/or Maximum Rate of Interest

If the applicable Final Terms specifies a Minimum Rate of Interest for any Interest Period, then, in the

event that the Rate of Interest in respect of such Interest Period determined in accordance with the

provisions of paragraph (b) above is less than such Minimum Rate of Interest, the Rate of Interest for

such Interest Period shall be such Minimum Rate of Interest.

If the applicable Final Terms specifies a Maximum Rate of Interest for any Interest Period, then, in the

event that the Rate of Interest in respect of such Interest Period determined in accordance with the

provisions of paragraph (b) above is greater than such Maximum Rate of Interest, the Rate of Interest for

such Interest Period shall be such Maximum Rate of Interest.

(d) Determination of Rate of Interest and calculation of Interest Amounts

The Fiscal Agent, in the case of Floating Rate Notes, will at or as soon as practicable after each time at

which the Rate of Interest is to be determined, determine the Rate of Interest for the relevant Interest

Period.

The Fiscal Agent will calculate the amount of interest (the Interest Amount) payable on the Floating

Rate Notes for the relevant Interest Period by applying the Rate of Interest to:

(i) in the case of Floating Rate Notes which are represented by a Global Note, the aggregate

outstanding nominal amount of the Notes represented by such Global Note; or

(ii) in the case of Floating Rate Notes in definitive form, the Calculation Amount;

and, in each case, multiplying such sum by the applicable Day Count Fraction and rounding the resultant

figure to the nearest sub-unit of the relevant Specified Currency, half of any such sub-unit being rounded

upwards or otherwise in accordance with applicable market convention. Where the Specified

Denomination of a Floating Rate Note in definitive form is a multiple of the Calculation Amount, the

Interest Amount payable in respect of such Note shall be the product of the amount (determined in the

manner provided above) for the Calculation Amount and the amount by which the Calculation Amount

is multiplied to reach the Specified Denomination without any further rounding.

“Day Count Fraction” means, in respect of the calculation of an amount of interest in accordance with

this Condition 5.2:

(i) if “Actual/Actual (ISDA)” or “Actual/Actual” is specified in the applicable Final Terms, the

actual number of days in the Interest Period divided by 365 (or, if any portion of that Interest

Period falls in a leap year, the sum of (I) the actual number of days in that portion of the Interest

Period falling in a leap year divided by 366 and (II) the actual number of days in that portion of

the Interest Period falling in a non-leap year divided by 365);

(ii) if “Actual/365 (Fixed)” is specified in the applicable Final Terms, the actual number of days in

the Interest Period divided by 365;

(iii) if “Actual/365 (Sterling)” is specified in the applicable Final Terms, the actual number of days

in the Interest Period divided by 365 or, in the case of an Interest Payment Date falling in a leap

year, 366;

73

(iv) if “Actual/360” is specified in the applicable Final Terms, the actual number of days in the

Interest Period divided by 360;

(v) if “30/360”, “360/360” or “Bond Basis” is specified in the applicable Final Terms, the number

of days in the Interest Period divided by 360, calculated on a formula basis as follows:

Day Count Fraction =

where:

Y1 is the year, expressed as a number, in which the first day of the Interest Period falls;

Y2 is the year, expressed as a number, in which the day immediately following the last day of

the Interest Period falls;

M1 is the calendar month, expressed as a number, in which the first day of the Interest Period

falls;

M2 is the calendar month, expressed as a number, in which the day immediately following the

last day of the Interest Period falls;

D1 is the first calendar day, expressed as a number, of the Interest Period, unless such number

is 31, in which case D1 will be 30; and

D2 is the calendar day, expressed as a number, immediately following the last day included in

the Interest Period, unless such number would be 31 and D1 is greater than 29, in which case D2

will be 30;

(vi) if “30E/360” or “Eurobond Basis” is specified in the applicable Final Terms, the number of days

in the Interest Period divided by 360, calculated on a formula basis as follows:

Day Count Fraction =

where:

Y1 is the year, expressed as a number, in which the first day of the Interest Period falls;

Y2 is the year, expressed as a number, in which the day immediately following the last day of

the Interest Period falls;

M1 is the calendar month, expressed as a number, in which the first day of the Interest Period

falls;

M2 is the calendar month, expressed as a number, in which the day immediately following the

last day of the Interest Period falls;

D1 is the first calendar day, expressed as a number, of the Interest Period, unless such number

would be 31, in which case D1 will be 30; and

D2 is the calendar day, expressed as a number, immediately following the last day included in

the Interest Period, unless such number would be 31, in which case D2 will be 30;

360

)D-(D)]M-(Mx[30)]Y-(Yx[360 121212 ++

360

)D-(D)]M-(Mx[30)]Y-(Yx[360 121212 ++

74

(vii) if “30E/360 (ISDA)” is specified in the applicable Final Terms, the number of days in the

Interest Period divided by 360, calculated on a formula basis as follows:

Day Count Fraction =

where:

Y1 is the year, expressed as a number, in which the first day of the Interest Period falls;

Y2 is the year, expressed as a number, in which the day immediately following the last day of

the Interest Period falls;

M1 is the calendar month, expressed as a number, in which the first day of the Interest Period

falls;

M2 is the calendar month, expressed as a number, in which the day immediately following the

last day of the Interest Period falls;

D1 is the first calendar day, expressed as a number, of the Interest Period, unless (i) that day is

the last day of February or (ii) such number would be 31, in which case D1 will be 30; and

D2 is the calendar day, expressed as a number, immediately following the last day included in

the Interest Period, unless (i) that day is the last day of February but not the Maturity Date or

(ii) such number would be 31, in which case D2 will be 30.

(e) Notification of Rate of Interest and Interest Amounts

The Fiscal Agent or, if applicable, the Calculation Agent will cause the Rate of Interest and each Interest

Amount for each Interest Period and the relevant Interest Payment Date to be notified to the Issuer and

any stock exchange on which the relevant Floating Rate Notes are for the time being listed (by no later

than the first day of each Interest Period) and notice thereof to be published in accordance with Condition

14 (Notices) as soon as possible after their determination but in no event later than the fourth Business

Day thereafter. Each Interest Amount and Interest Payment Date so notified may subsequently be

amended (or appropriate alternative arrangements made by way of adjustment) without prior notice in

the event of an extension or shortening of the Interest Period. Any such amendment will be promptly

notified to each stock exchange on which the relevant Floating Rate Notes are for the time being listed

and to the Noteholders in accordance with Condition 14 (Notices). For the purposes of this paragraph,

the expression “Business Day” means a day (other than a Saturday or a Sunday) on which banks and

foreign exchange markets are open for general business in London and Luxembourg.

(f) Certificates to be final

All certificates, communications, opinions, determinations, calculations, quotations and decisions given,

expressed, made or obtained for the purposes of the provisions of this Condition 5.2, whether by the

Fiscal Agent or, if applicable, the Calculation Agent, shall (in the absence of wilful default, bad faith or

manifest error) be binding on the Issuer, the Guarantor, the Fiscal Agent, the Calculation Agent (if

applicable), the other Agents and all Noteholders, Receiptholders and Couponholders and (in the absence

of wilful default or bad faith) no liability to the Issuer, the Guarantor, the Noteholders, the Receiptholders

or the Couponholders shall attach to the Fiscal Agent or, if applicable, the Calculation Agent in

connection with the exercise or non-exercise by it of its powers, duties and discretions pursuant to such

provisions.

360

)D-(D)]M-(Mx[30)]Y-(Yx[360 121212 ++

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5.3 Accrual of interest

Each Note (or, in the case of the redemption of part only of a Note, that part only of such Note) will cease

to bear interest (if any) from the date for its redemption unless payment of principal is improperly

withheld or refused. In such event, interest will continue to accrue until whichever is the earlier of:

(a) the date on which all amounts due in respect of such Note have been paid; and

(b) five days after the date on which the full amount of the moneys payable in respect of such Note

has been received by the Fiscal Agent or the Registrar, as the case may be, and notice to that

effect has been given to the Noteholders in accordance with Condition 14 (Notices).

6. PAYMENTS

6.1 Method of payment

Subject as provided below:

(a) payments in a Specified Currency other than euro will be made by credit or transfer to an

account in the relevant Specified Currency maintained by the payee with, or, at the option of

the payee, by a cheque in such Specified Currency drawn on, a bank in the principal financial

centre of the country of such Specified Currency; and

(b) payments will be made in euro by credit or transfer to a euro account (or any other account to

which euro may be credited or transferred) specified by the payee or, at the option of the payee,

by a euro cheque.

Payments will be subject in all cases to (i) any fiscal or other laws and regulations applicable thereto in

the place of payment, but without prejudice to the provisions of Condition 8 (Taxation) and (ii) any

withholding or deduction required pursuant to an agreement described in Section 1471(b) of the U.S.

Internal Revenue Code of 1986 (the “Code”) or otherwise imposed pursuant to Sections 1471 through

1474 of the Code, any regulations or agreements thereunder, any official interpretations thereof) or any

law implementing an intergovernmental agreement thereto (collectively, “FATCA”).

6.2 Presentation of Definitive Bearer Notes, Receipts and Coupons

Payments of principal in respect of Definitive Bearer Notes will (subject as provided below) be made in

the manner provided in Condition 6.1 above only against presentation and surrender (or, in the case of

part payment of any sum due, endorsement) of Definitive Bearer Notes and payments of interest in

respect of Definitive Bearer Notes will (subject as provided below) be made as aforesaid only against

presentation and surrender (or, in the case of part payment of any sum due, endorsement) of Coupons, in

each case at the specified office of any Paying Agent outside the United States (which expression, as

used herein, means the United States of America (including the States and the District of Columbia and

its possessions)).

Payments of instalments of principal (if any) in respect of Definitive Bearer Notes, other than the final

instalment, will (subject as provided below) be made in the manner provided in Condition 6.1 above only

against presentation and surrender (or, in the case of part payment of any sum due, endorsement) of the

relevant Receipt in accordance with the preceding paragraph. Payment of the final instalment will be

made in the manner provided in Condition 6.1 above only against presentation and surrender (or, in the

case of part payment of any sum due, endorsement) of the relevant Bearer Note in accordance with the

preceding paragraph. Each Receipt must be presented for payment of the relevant instalment together

with the Definitive Bearer Note to which it appertains. Receipts presented without the Definitive Bearer

Note to which they appertain do not constitute valid obligations of the Issuer. Upon the date on which

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any Definitive Bearer Note becomes due and repayable, unmatured Receipts (if any) relating thereto

(whether or not attached) shall become void and no payment shall be made in respect thereof.

Fixed Rate Notes in definitive bearer form should be presented for payment together with all unmatured

Coupons appertaining thereto (which expression shall for this purpose include Coupons falling to be

issued on exchange of matured Talons), failing which the amount of any missing unmatured Coupon (or,

in the case of payment not being made in full, the same proportion of the amount of such missing

unmatured Coupon as the sum so paid bears to the sum due) will be deducted from the sum due for

payment. Each amount of principal so deducted will be paid in the manner mentioned above against

surrender of the relative missing Coupon at any time before the expiry of 10 years after the Relevant

Date (as defined in Condition 8 (Taxation)) in respect of such principal (whether or not such Coupon

would otherwise have become void under Condition 9 (Prescription)) or, if later, five years from the date

on which such Coupon would otherwise have become due, but in no event thereafter.

Upon any Fixed Rate Note in definitive bearer form becoming due and repayable prior to its Maturity

Date, all unmatured Talons (if any) appertaining thereto will become void and no further Coupons will

be issued in respect thereof.

Upon the date on which any Floating Rate Note in definitive bearer form becomes due and repayable,

unmatured Coupons and Talons (if any) relating thereto (whether or not attached) shall become void and

no payment or, as the case may be, exchange for further Coupons shall be made in respect thereof.

If the due date for redemption of any Definitive Bearer Note is not an Interest Payment Date, interest (if

any) accrued in respect of such Note from (and including) the preceding Interest Payment Date or, as the

case may be, the Interest Commencement Date shall be payable only against surrender of the relevant

Definitive Bearer Note.

6.3 Payments in respect of Bearer Global Notes

Payments of principal and interest (if any) in respect of Notes represented by any Bearer Global Note

will (subject as provided below) be made in the manner specified above in relation to Definitive Bearer

Notes or otherwise in the manner specified in the relevant Global Note, where applicable against

presentation or surrender, as the case may be, of such Global Note at the specified office of any Paying

Agent outside the United States. A record of each payment, distinguishing between any payment of

principal and any payment of interest, will be made on such Global Note either by the Paying Agent to

which it was presented or in the records of Euroclear and Clearstream, Luxembourg, as applicable.

6.4 Payments in respect of Registered Notes

Payments of principal (other than instalments of principal prior to the final instalment) in respect of each

Registered Note (whether or not in global form) will be made against presentation and surrender (or, in

the case of part payment of any sum due, endorsement) of the Registered Note at the specified office of

the Registrar or any of the Paying Agents. Such payments will be made by transfer to the Designated

Account (as defined below) of the holder (or the first named of joint holders) of the Registered Note

appearing in the register of holders of the Registered Notes maintained by the Registrar (the “Register”)

(i) where in global form, at the close of the business day (being for this purpose a day on which Euroclear

and Clearstream, Luxembourg are open for business) before the relevant due date, and (ii) where in

definitive form, at the close of business on the third business day (being for this purpose a day on which

banks are open for business in the city where the specified office of the Registrar is located) before the

relevant due date. Notwithstanding the previous sentence, if (a) a holder does not have a Designated

Account or (b) the principal amount of the Notes held by a holder is less than U.S.$250,000 (or its

approximate equivalent in any other Specified Currency), payment will instead be made by a cheque in

the Specified Currency drawn on a Designated Bank (as defined below). For these purposes,

“Designated Account” means the account (which, in the case of a payment in Japanese yen to a non-

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resident account of Japan, shall be a non-resident account) maintained by a holder with a Designated

Bank and identified as such in the Register and “Designated Bank” means (in the case of payment in a

Specified Currency other than euro) a bank in the principal financial centre of the country of such

Specified Currency and (in the case of a payment in euro) any bank which processes payments in euro.

Payments of interest and payments of instalments of principal (other than the final instalment) in respect

of each Registered Note (whether or not in global form) will be made by a cheque in the Specified

Currency drawn on a Designated Bank and mailed by uninsured mail on the business day in the city

where the specified office of the Registrar is located immediately preceding the relevant due date to the

holder (or the first named of joint holders) of the Registered Note appearing in the Register (i) where in

global form, at the close of the business day (being for this purpose a day on which Euroclear and

Clearstream, Luxembourg are open for business) before the relevant due date, and (ii) where in definitive

form, at the close of business on the fifteenth day (whether or not such fifteenth day is a business day)

before the relevant due date (the “Record Date”) at his address shown in the Register on the Record

Date and at his risk. Upon application of the holder to the specified office of the Registrar not less than

three business days in the city where the specified office of the Registrar is located before the due date

for any payment of interest in respect of a Registered Note, the payment may be made by transfer on the

due date in the manner provided in the preceding paragraph. Any such application for transfer shall be

deemed to relate to all future payments of interest (other than interest due on redemption) and instalments

of principal (other than the final instalment) in respect of the Definitive Registered Notes which become

payable to the holder who has made the initial application until such time as the Registrar is notified in

writing to the contrary by such holder. Payment of the interest due in respect of each Registered Note

on redemption and the final instalment of principal will be made in the same manner as payment of the

principal amount of such Registered Note.

Holders of Registered Notes will not be entitled to any interest or other payment for any delay in receiving

any amount due in respect of any Registered Note as a result of a cheque posted in accordance with this

Condition arriving after the due date for payment or being lost in the post. No commissions or expenses

shall be charged to such holders by the Registrar in respect of any payments of principal or interest in

respect of the Registered Notes.

None of the Issuer, the Guarantor or the Agents will have any responsibility or liability for any aspect of

the records relating to, or payments made on account of, beneficial ownership interests in the Registered

Global Notes or for maintaining, supervising or reviewing any records relating to such beneficial

ownership interests.

6.5 General provisions applicable to payments

The holder of a Global Note shall be the only person entitled to receive payments in respect of Notes

represented by such Global Note and the Issuer or, as the case may be, the Guarantor will be discharged

by payment to, or to the order of, the holder of such Global Note in respect of each amount so paid. Each

of the persons shown in the records of Euroclear or Clearstream, Luxembourg as the beneficial holder of

a particular nominal amount of Notes represented by such Global Note must look solely to Euroclear or

Clearstream, Luxembourg as the case may be, for his share of each payment so made by the Issuer or, as

the case may be, the Guarantor to, or to the order of, the holder of such Global Note.

Notwithstanding the foregoing provisions of this Condition, if any amount of principal and/or interest in

respect of Bearer Notes is payable in U.S. dollars, such U.S. dollar payments of principal and/or interest

in respect of such Notes will be made at the specified office of a Paying Agent in the United States if:

(a) the Issuer has appointed Paying Agents with specified offices outside the United States with the

reasonable expectation that such Paying Agents would be able to make payment in U.S. dollars

at such specified offices outside the United States of the full amount of principal and interest on

the Bearer Notes in the manner provided above when due;

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(b) payment of the full amount of such principal and interest at all such specified offices outside

the United States is illegal or effectively precluded by exchange controls or other similar

restrictions on the full payment or receipt of principal and interest in U.S. dollars; and

(c) such payment is then permitted under United States law without involving, in the reasonable

opinion of the Issuer and the Guarantor, adverse tax consequences to the Issuer or the Guarantor.

6.6 Payment Day

If the date for payment of any amount in respect of any Note, Receipt or Coupon is not a Payment Day,

the holder thereof shall not be entitled to payment until the next following Payment Day in the relevant

place and shall not be entitled to further interest or other payment in respect of such delay. For these

purposes, “Payment Day” means any day which (subject to Condition 9 (Prescription)) is:

(a) a day on which commercial banks and foreign exchange markets settle payments and are open

for general business (including dealing in foreign exchange and foreign currency deposits) in:

(i) in the case of Notes in definitive form only, the relevant place of presentation;

(ii) each Additional Financial Centre (other than TARGET 2 System) specified in the

applicable Final Terms, and

(b) if TARGET 2 System is specified as an Additional Financial Centre in the applicable Final

Terms, a day on which the TARGET 2 System is open; and

(c) either (1) in relation to any sum payable in a Specified Currency other than euro, a day on which

commercial banks and foreign exchange markets settle payments and are open for general

business (including dealing in foreign exchange and foreign currency deposits) in the principal

financial centre of the country of the relevant Specified Currency or (2) in relation to any sum

payable in euro, a day on which the TARGET 2 System is open.

6.7 Interpretation of principal and interest

Any reference in the Conditions to principal in respect of the Notes shall be deemed to include, as

applicable:

(a) any additional amounts which may be payable with respect to principal under Condition 8

(Taxation);

(b) the Final Redemption Amount of the Notes;

(c) the Early Redemption Amount of the Notes;

(d) the Optional Redemption Amount(s) (if any) of the Notes;

(e) in relation to Notes redeemable in instalments, the Instalment Amounts; and

(f) any premium and any other amounts (other than interest) which may be payable by the Issuer

under or in respect of the Notes.

Any reference in the Conditions to interest in respect of the Notes shall be deemed to include, as

applicable, any additional amounts which may be payable with respect to interest under Condition 8

(Taxation) and any arrears of interest in relation thereto.

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7. REDEMPTION AND PURCHASE

7.1 Redemption at maturity

Unless previously redeemed or purchased and cancelled as specified below, each Note will be redeemed

by the Issuer at its Final Redemption Amount specified in the applicable Final Terms in the relevant

Specified Currency on the Maturity Date.

7.2 Redemption for tax reasons

The Notes may be redeemed at the option of the Issuer in whole, but not in part, at any time (if this Note

is not a Floating Rate Note) or on any Interest Payment Date (if this Note is a Floating Rate Note), on

giving not less than 30 nor more than 60 days’ notice to the Fiscal Agent and, in accordance with

Condition 14 (Notices), the Noteholders (which notice shall be irrevocable), if:

(a) on the occasion of the next payment due under the Notes, the Issuer has or will become obliged

to pay additional amounts as provided or referred to in Condition 8 (Taxation) or the Guarantor

would be unable for reasons outside its control to procure payment by the Issuer and in making

payment itself would be required to pay such additional amounts, in each case as a result of any

change in, or amendment to, the laws or regulations of a Tax Jurisdiction (as defined in

Condition 8 (Taxation)) or any change in the application or official interpretation of such laws

or regulations, which change or amendment becomes effective on or after the date on which

agreement is reached to issue the first Tranche of the Notes; and

(b) such obligation cannot be avoided by the Issuer or, as the case may be, the Guarantor taking

reasonable measures available to it,

provided that no such notice of redemption shall be given earlier than 90 days prior to the earliest date

on which the Issuer or, as the case may be, the Guarantor would be obliged to pay such additional

amounts were a payment in respect of the Notes then due.

Prior to the publication of any notice of redemption pursuant to this Condition, the Issuer shall deliver to

the Fiscal Agent a certificate signed by two Directors of the Issuer or, as the case may be, two Directors

of the Guarantor stating that the Issuer is entitled to effect such redemption and setting forth a statement

of facts showing that the conditions precedent to the right of the Issuer so to redeem have occurred and

an opinion of independent legal advisers of recognised standing to the effect that the Issuer or, as the

case may be, the Guarantor has or will become obliged to pay such additional amounts as a result of such

change or amendment.

Notes redeemed pursuant to this Condition 7.2 will be redeemed at their Early Redemption Amount

referred to in Condition 7.6 below together (if appropriate) with interest accrued to (but excluding) the

date of redemption.

7.3 Redemption at the option of the Issuer (Issuer Call)

If Issuer Call is specified in the applicable Final Terms, the Issuer may, having given:

(a) not less than 15 nor more than 30 days’ notice to the Noteholders in accordance with Condition

14 (Notices); and

(b) not less than 15 days before the giving of the notice referred to in (a) above, notice to the Fiscal

Agent and, in the case of a redemption of Registered Notes, the Registrar;

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(which notices shall be irrevocable and shall specify the date fixed for redemption), redeem all or some

only of the Notes then outstanding on any Optional Redemption Date and at the Optional Redemption

Amount(s) specified in the applicable Final Terms together, if appropriate, with interest accrued to (but

excluding) the relevant Optional Redemption Date. Any such redemption must be of a nominal amount

not less than the Minimum Redemption Amount and not more than the Maximum Redemption Amount

in each case as may be specified in the applicable Final Terms. In the case of a partial redemption of

Notes, the Notes to be redeemed (“Redeemed Notes”) will be selected individually by lot, in the case of

Redeemed Notes represented by definitive Notes, and in accordance with the rules of Euroclear and/or

Clearstream, Luxembourg (to be reflected in the records of Euroclear and Clearstream, Luxembourg as

either a pool factor or a reduction in nominal amount, at their discretion), in the case of Redeemed Notes

represented by a Global Note, in each case not more than 30 days prior to the date fixed for redemption

(such date of selection being hereinafter called the “Selection Date”). In the case of Redeemed Notes

represented by definitive Notes, a list of the serial numbers of such Redeemed Notes will be published

in accordance with Condition 14 (Notices) not less than 15 days prior to the date fixed for redemption.

No exchange of the relevant Global Note will be permitted during the period from (and including) the

Selection Date to (and including) the date fixed for redemption pursuant to this Condition 7.3 and notice

to that effect shall be given by the Issuer to the Noteholders in accordance with Condition 14 (Notices)

at least five days prior to the Selection Date.

7.4 Redemption at the option of the Noteholders (Investor Put)

If Investor Put is specified in the applicable Final Terms, upon the holder of any Note giving to the Issuer

in accordance with Condition 14 (Notices) not less than 15 nor more than 30 days’ notice the Issuer will,

upon the expiry of such notice, redeem, subject to, and in accordance with, the terms specified in the

applicable Final Terms, such Note on the Optional Redemption Date and at the Optional Redemption

Amount together, if appropriate, with interest accrued to (but excluding) the Optional Redemption Date.

Registered Notes may be redeemed under this Condition 7.4 in any multiple of their lowest Specified

Denomination. It may be that before an Investor Put can be exercised, certain conditions and/or

circumstances will need to be satisfied. Where relevant, the provisions will be set out in the applicable

Final Terms.

To exercise the right to require redemption of this Note the holder of this Note must, if this Note is in

definitive form and held outside Euroclear and Clearstream, Luxembourg, deliver, at the specified office

of any Paying Agent (in the case of Bearer Notes) or the Registrar (in the case of Registered Notes) at

any time during normal business hours of such Paying Agent or, as the case may be, the Registrar falling

within the notice period, a duly completed and signed notice of exercise in the form (for the time being

current) obtainable from any specified office of any Paying Agent or, as the case may be, the Registrar

(a “Put Notice”) and in which the holder must specify a bank account (or, if payment is required to be

made by cheque, an address) to which payment is to be made under this Condition and, in the case of

Registered Notes, the nominal amount thereof to be redeemed and, if less than the full nominal amount

of the Registered Notes so surrendered is to be redeemed, an address to which a new Registered Note in

respect of the balance of such Registered Notes is to be sent subject to and in accordance with the

provisions of Condition 2.2 (Transfers of Registered Notes – Transfers of Registered Notes in definitive

form). If this Note is a Definitive Bearer Note, the Put Notice must be accompanied by this Note or

evidence satisfactory to the Paying Agent concerned that this Note will, following delivery of the Put

Notice, be held to its order or under its control.

If this Note is represented by a Global Note or is in definitive form and held through Euroclear or

Clearstream, Luxembourg to exercise the right to require redemption of this Note the holder of this Note

must, within the notice period, give notice to the Fiscal Agent of such exercise in accordance with the

standard procedures of Euroclear or Clearstream, Luxembourg (which may include notice being given

on his instruction by Euroclear or Clearstream, Luxembourg or any depositary for them to the Fiscal

81

Agent by electronic means) in a form acceptable to Euroclear or Clearstream, Luxembourg from time to

time.

Any Put Notice or other notice given in accordance with the standard procedures of Euroclear or

Clearstream, Luxembourg given by a holder of any Note pursuant to this Condition 7.4 shall be

irrevocable except where, prior to the due date of redemption, an Event of Default has occurred and is

continuing, in which event such holder, at its option, may elect by notice to the Issuer to withdraw the

notice given pursuant to this Condition 7.4 and instead to declare such Note forthwith due and payable

pursuant to Condition 10 (Events of Default).

7.5 Redemption at the Option of the Holders Upon a Change of Control

If a Change of Control Put Event (as defined below) is specified in the applicable Final Terms and a

Change of Control Put Event occurs, the holder of any Note will have the option (a “Change of Control

Put Option”) (unless prior to the giving of the relevant Change of Control Put Event Notice (as defined

below) the Issuer has given notice of redemption under Condition 7.3 above) to require the Issuer to

redeem that Note on the Change of Control Put Date (as defined below) at 101% of its principal amount

together with interest accrued to (but excluding) the Change of Control Put Date.

A “Change of Control Put Event” will be deemed to occur if:

(a) Starcom Holding AD, a company incorporated in Bulgaria under corporate file No.6333/1995,

ceases to own (directly or indirectly) (A) more than 50% of the total share capital of the Issuer

or (B) shares in the capital of the Issuer carrying more than 50% of the voting rights normally

exercisable at a general meeting of the Issuer; or

(b) the Issuer ceases to own (directly or indirectly) (A) more than 50% of the total share capital of

the Guarantor or (B) shares in the capital of the Guarantor carrying more than 50% of the voting

rights normally exercisable at a general meeting of the Guarantor.

Within 14 days of the Issuer becoming aware that a Change of Control Put Event has occurred, the Issuer

shall give notice (a “Change of Control Put Event Notice”) to the Noteholders in accordance with

Condition 14 (Notices) specifying the nature of the Change of Control Put Event and the procedure for

exercising the Change of Control Put Option.

If this Note is a Definitive Bearer Note, to exercise the Change of Control Put Option, the holder of such

Bearer Note must deliver such Note to the specified office of any Paying Agent at any time during normal

business hours of such Paying Agent falling within the period (the “Change of Control Put Period”) of

30 days after a Change of Control Put Event Notice is given, accompanied by a duly signed and

completed notice of exercise in the form ( for the time being current) obtainable from the specified office

of any Paying Agent (a “Change of Control Put Notice”). The Note should be delivered together with

all Coupons appertaining thereto maturing after the date which is seven days after the expiration of the

Change of Put Period (the “Change of Control Put Date”), failing which the Paying Agent will require

payment from or on behalf of the Noteholder of an amount equal to the face value of any missing such

Coupon. Any amount so paid will be reimbursed to the Noteholder against presentation and surrender

of the relevant missing Coupon (or any replacement therefor issued pursuant to Condition 11

(Replacement of Notes, Receipts, Coupons and Talons)) at any time after such payment, but before the

expiry of the period of five years from the date on which such Coupon would have become due, but not

thereafter. The Paying Agent to which such Note and Change of Control Put Notice are delivered will

issue to the Noteholder concerned a non-transferable receipt in respect of the Note so delivered. Payment

in respect of any Note so delivered will be made, if the holder duly specified a bank account in the

Change of Control Put Notice to which payment is to be made, on the Change of Control Put Date by

transfer to that bank account and, in every other case, on or after the Change of Control Put Date against

presentation and surrender or (as the case may be) endorsement of such receipt at the specified office of

82

any Paying Agent. A Change of Control Put Notice, once given, shall be irrevocable. For the purposes

of these Conditions, receipts issued pursuant to this Condition 7.5 shall be treated as if they were Notes.

To exercise the Change of Control Put Option, the holder of a Registered Note must deposit the

Certificate evidencing such Note(s) with the Registrar or any Transfer Agent at its specified office,

together with a duly signed and completed Change of Control Put Notice obtainable from the Registrar

or any Transfer Agent within the Change of Control Put Period. No Certificate so deposited and option

so exercised may be withdrawn without the prior consent of the Issuer. Payment in respect of any

Certificate so deposited will be made, if the holder duly specified a bank account in the Change of Control

Put Notice to which payment is to be made, on the Change of Control Put Date by transfer to that bank

account and, in every other case, by cheque drawn on a Bank and mailed to the holder (or to the first

named of joint holders) of such Note at its address appearing in the Register.

The Issuer shall redeem or purchase (or procure the purchase of) the relevant Notes on the Change of

Control Put Date unless previously redeemed (or purchased) and cancelled.

If 75% or more in principal amount of the Notes then outstanding have been redeemed or purchased

pursuant to this Condition 7.5, the Issuer may (but shall not be obligated to), on giving not less than 30

nor more than 60 days’ notice to the Noteholders (such notice being given within 30 days after the Change

of Control Put Date), redeem or purchase (or procure the purchase of), at its option, all but not some only

of the remaining outstanding Notes at their principal amount, together with interest accrued to (but

excluding) the date fixed for such redemption or purchase.

7.6 Early Redemption Amounts

For all purposes of this Condition 7 and Condition 10 (Events of Default), each Note will be redeemed

at its Early Redemption Amount calculated as follows:

(a) in the case of a Note with a Final Redemption Amount equal to the Issue Price, at the Final

Redemption Amount thereof; or

(b) in the case of a Note with a Final Redemption Amount which is or may be less or greater than

the Issue Price or which is payable in a Specified Currency other than that in which the Note is

denominated, at the amount specified in the applicable Final Terms or, if no such amount or

manner is so specified in the applicable Final Terms, at its nominal amount.

7.7 Instalments

Instalment Notes will be redeemed in the Instalment Amounts and on the Instalment Dates. In the case

of early redemption, the Early Redemption Amount will be determined pursuant to paragraph 7.6 above.

7.8 Purchases

The Issuer, the Guarantor or any Subsidiary of the Issuer or the Guarantor may at any time purchase

Notes (provided that, in the case of Definitive Bearer Notes, all unmatured Receipts, Coupons and Talons

appertaining thereto are purchased therewith) at any price in the open market or otherwise. All Notes so

purchased may, at the Issuer’s option, be retained and resold or surrendered to a Paying Agent or the

Registrar for cancellation.

7.9 Cancellation

All Notes which are redeemed will forthwith be cancelled (together with all unmatured Receipts,

Coupons and Talons attached thereto or surrendered therewith at the time of redemption). All Notes so

cancelled and any Notes purchased and cancelled pursuant to Condition 7.7 above (together with all

83

unmatured Receipts, Coupons and Talons cancelled therewith) shall be forwarded to the Fiscal Agent

and cannot be reissued or resold.

8. TAXATION

All payments of principal and interest in respect of the Notes, Receipts and Coupons by the Issuer or the

Guarantor will be made without withholding or deduction for or on account of any present or future taxes

or duties of whatever nature imposed or levied by or on behalf of any Tax Jurisdiction unless such

withholding or deduction is required by law or in connection with FATCA. In such event, the Issuer or,

as the case may be, the Guarantor will pay such additional amounts as shall be necessary in order that

the net amounts received by the holders of the Notes, Receipts or Coupons after such withholding or

deduction shall equal the respective amounts of principal and interest which would otherwise have been

receivable in respect of the Notes, Receipts or Coupons, as the case may be, in the absence of such

withholding or deduction; except that no such additional amounts shall be payable with respect to any

Note, Receipt or Coupon:

(a) the holder of which is liable for such taxes or duties in respect of such Note, Receipt or Coupon

by reason of his having some connection with a Tax Jurisdiction other than the mere holding of

such Note, Receipt or Coupon;

(b) presented for payment more than 30 days after the Relevant Date (as defined below) except to

the extent that the holder thereof would have been entitled to an additional amount on presenting

the same for payment on such thirtieth day assuming that day to have been a Payment Day (as

defined in Condition 6.6 (Payment Day)); or

(c) where such withholding or deduction is imposed in connection with FATCA.

As used herein:

(i) “Tax Jurisdiction” means the Republic of Bulgaria or any political subdivision or any authority

thereof or therein having power to tax (in the case of payments by the Issuer or the Guarantor);

and

(ii) the “Relevant Date” means the date on which such payment first becomes due, except that, if

the full amount of the moneys payable has not been duly received by the Fiscal Agent or the

Registrar, as the case may be, on or prior to such due date, it means the date on which, the full

amount of such moneys having been so received, notice to that effect is duly given to the

Noteholders in accordance with Condition 14 (Notices).

9. PRESCRIPTION

The Notes (whether in bearer or registered form), Receipts and Coupons will become void unless claims

in respect of principal and/or interest are made within a period of 10 years (in the case of principal) and

five years (in the case of interest) after the Relevant Date (as defined in Condition 8 (Taxation)) therefor.

There shall not be included in any Coupon sheet issued on exchange of a Talon any Coupon the claim

for payment in respect of which would be void pursuant to this Condition or Condition 6.2 (Presentation

of Definitive Bearer Notes, Receipts and Coupons) or any Talon which would be void pursuant to

Condition 6.2 (Presentation of Definitive Bearer Notes, Receipts and Coupons).

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10. EVENTS OF DEFAULT

10.1 Events of Default

If any one or more of the following events (each an “Event of Default”) shall occur and be continuing

with respect to any Note:

(a) if default is made in the payment in the Specified Currency of any principal or interest due in

respect of the Notes or any of them and the default continues for a period of 3 days in the case

of principal and 5 days in the case of interest; or

(b) if the Issuer or the Guarantor fails to perform or observe any of its other obligations under these

Conditions or the Guarantee (as applicable) and (except in any case where the failure is

incapable of remedy when no such continuation or notice as is hereinafter mentioned will be

required) the failure continues for the period of 30 days next following the service by a

Noteholder on the Issuer or the Guarantor (as the case may be) of notice requiring the same to

be remedied; or

(c) if: (i) any Indebtedness of the Issuer, the Guarantor or any Material Subsidiary (as defined

below) becomes due and repayable prematurely by reason of an event of default (however

described) and a demand is made for such payment; or (ii) the Issuer, any Guarantor or any

Material Subsidiary fails to make any payment in respect of any Indebtedness on the due date

for payment as extended by any originally applicable grace period provided that no event

described in this subparagraph (c) shall constitute an Event of Default unless the relevant

amount of Indebtedness due and unpaid, either alone or when aggregated (without duplication)

with other amounts of Indebtedness due and unpaid relative to all (if any) other events specified

in (i) and (ii) above which have occurred and are continuing, exceeds EUR15,000,000 (or its

equivalent in any other currency or currencies);

(d) if any order is made by any competent court or resolution passed for the winding up or

dissolution of the Issuer, the Guarantor or any of its Material Subsidiaries, save for the purposes

of reorganisation on terms previously approved by an Extraordinary Resolution; or

(e) if the Issuer, the Guarantor or any of its Material Subsidiaries ceases or threatens to cease to

carry on the whole or a substantial part of its business, save for the purposes of reorganisation

on terms previously approved by an Extraordinary Resolution, or the Issuer, the Guarantor or

any of its Material Subsidiaries stops or threatens to stop payment of, or is unable to, or admits

inability to, pay, its debts (or any class of its debts) as they fall due, or is deemed unable to pay

its debts pursuant to or for the purposes of any applicable law, or is adjudicated or found

bankrupt or insolvent; or

(f) if (i) proceedings are initiated against the Issuer, the Guarantor or any of its Material

Subsidiaries under any applicable liquidation, insolvency, composition, reorganisation or other

similar laws, or an application is made (or documents filed with a court) for the appointment of

an administrative or other receiver, manager, administrator or other similar official, or an

administrative or other receiver, manager, administrator or other similar official is appointed, in

relation to the Issuer, the Guarantor or any of its Material Subsidiaries or, as the case may be,

in relation to the whole or a substantial part of the undertaking or assets of any of them, or an

encumbrancer takes possession of the whole or a substantial part of the undertaking or assets of

any of them, or a distress, execution, attachment, sequestration or other process is levied,

enforced upon, sued out or put in force against the whole or a substantial part of the undertaking

or assets of any of them and (ii) in any case (other than the appointment of an administrator)

such proceedings are not discharged within 60 days; or

85

(g) if the Issuer, the Guarantor or any of its Material Subsidiaries initiates or consents to judicial

proceedings relating to itself under any applicable liquidation, insolvency, composition,

reorganisation or other similar laws (including the obtaining of a moratorium) or makes a

conveyance or assignment for the benefit of, or enters into any composition or other

arrangement with, its creditors generally (or any class of its creditors) or any meeting is

convened to consider a proposal for an arrangement or composition with its creditors generally

(or any class of its creditors); or

(h) if the Guarantee ceases to be, or is claimed by the Issuer or the Guarantor not to be, in full force

and effect,

then any holder of a Note may, by written notice to the Issuer at the specified office of the Fiscal Agent,

effective upon the date of receipt thereof by the Fiscal Agent, declare any Note held by it to be forthwith

due and payable whereupon the same shall become forthwith due and payable at its Redemption Amount,

together with accrued interest (if any) to the date of repayment, without presentment, demand, protest or

other notice of any kind.

10.2 Definitions

For the purposes of the Conditions:

“Material Subsidiary” means at any time a Subsidiary of the Issuer:

(a) whose gross revenues (consolidated in the case of a Subsidiary which itself has Subsidiaries) or

whose total assets (consolidated in the case of a Subsidiary which itself has Subsidiaries)

represent in each case (or, in the case of a Subsidiary acquired after the end of the financial

period to which the then latest audited consolidated accounts of the Issuer and its Subsidiaries

relate, are equal to) not less than 10% of the consolidated gross revenues or, as the case may be,

consolidated total assets of the Issuer and its Subsidiaries taken as a whole, all as calculated

respectively by reference to the then latest audited accounts (consolidated or, as the case may

be, unconsolidated) of such Subsidiary and the then latest audited consolidated accounts of the

Issuer and its Subsidiaries, provided that, in the case of a Subsidiary of the Issuer acquired after

the end of the financial period to which the then latest audited consolidated accounts of the

Issuer and its Subsidiaries relate, the reference to the then latest audited consolidated accounts

of the Issuer and its Subsidiaries for the purposes of the calculation above shall, until

consolidated accounts for the financial period in which the acquisition is made have been

prepared and audited as aforesaid, be deemed to be a reference to such first-mentioned accounts

as if such Subsidiary had been shown in such accounts by reference to its then latest relevant

audited accounts, adjusted as deemed appropriate by the Issuer or the Auditors;

(b) to which is transferred the whole or substantially the whole of the undertaking and assets of a

subsidiary of the Issuer which immediately prior to such transfer is a Material Subsidiary,

provided that the transferor Subsidiary shall upon such transfer forthwith cease to be a Material

Subsidiary and the transferee Subsidiary shall cease to be a Material Subsidiary pursuant to this

subparagraph (b) on the date on which the consolidated accounts of the Issuer or, as the case

may be, the Guarantor and its Subsidiaries for the financial period current at the date of such

transfer have been prepared and audited as aforesaid but so that such transferor Subsidiary or

such transferee Subsidiary may be a Material Subsidiary on or at any time after the date on

which such consolidated accounts have been prepared and audited as aforesaid by virtue of the

provisions of subparagraph (a) above or, prior to or after such date, by virtue of any other

applicable provision of this definition; or

(c) to which is transferred an undertaking or assets which, taken together with the undertaking or

assets of the transferee Subsidiary, generated (or, in the case of the transferee Subsidiary being

86

acquired after the end of the financial period to which the then latest audited consolidated

accounts of the Issuer and its Subsidiaries relate, generate gross revenues equal to) not less than

10% of the consolidated gross revenues, or represent (or, in the case aforesaid, are equal to) not

less than 10% of the consolidated total assets, of the Issuer and its Subsidiaries taken as a whole,

all as calculated as referred to in subparagraph (a) above, provided that the transferor Subsidiary

(if a Material Subsidiary) shall upon such transfer forthwith cease to be a Material Subsidiary

unless immediately following such transfer its undertaking and assets generate (or, in the case

aforesaid, generate gross revenues equal to) not less than 10% of the consolidated gross

revenues, or its assets represent (or, in the case aforesaid, are equal to) not less than 10% of the

consolidated total assets, of the Issuer and its Subsidiaries taken as a whole, all as calculated as

referred to in subparagraph (a) above, and the transferee subsidiary shall cease to be a Material

Subsidiary pursuant to this subparagraph (c) on the date on which the consolidated accounts of

the Issuer and its Subsidiaries for the financial period current at the date of such transfer have

been prepared and audited but so that such transferor Subsidiary or such transferee Subsidiary

may be a Material Subsidiary on or at any time after the date on which such consolidated

accounts have been prepared and audited as aforesaid by virtue of the provisions of

subparagraph (a) above or, prior to or after such date, by virtue of any other applicable provision

of this definition,

all as more particularly defined in the Agency Agreement.

A report by Directors of the Issuer, the Guarantor or the Auditors that in their opinion a Subsidiary of

the Issuer or, as the case may be, the Guarantor is or is not or was or was not at any particular time or

throughout any specified period a Material Subsidiary, shall, in the absence of manifest error, be

conclusive and binding on all parties.

11. REPLACEMENT OF NOTES, RECEIPTS, COUPONS AND TALONS

Should any Note, Receipt, Coupon or Talon be lost, stolen, mutilated, defaced or destroyed, it may be

replaced at the specified office of the Fiscal Agent (in the case of Bearer Notes, Receipts or Coupons) or

the Registrar (in the case of Definitive Registered Notes) upon payment by the claimant of such costs

and expenses as may be incurred in connection therewith and on such terms as to evidence and indemnity

as the Issuer may reasonably require. Mutilated or defaced Notes, Receipts, Coupons or Talons must be

surrendered before replacements will be issued.

12. AGENTS

The names of the initial Agents and their initial specified offices are set out below.

The Issuer is entitled to vary or terminate the appointment of any Agent and/or appoint additional or

other Agents and/or approve any change in the specified office through which any Agent acts, provided

that:

(a) there will at all times be a Fiscal Agent and a Registrar;

(b) so long as the Notes are listed on any stock exchange or admitted to trading by any other relevant

authority, there will at all times be a Paying Agent (in the case of Bearer Notes) and a Transfer

Agent (in the case of Registered Notes) with a specified office in such place as may be required

by the rules and regulations of the relevant stock exchange or other relevant authority; and

(c) there will at all times be a Paying Agent in a jurisdiction within Europe, other than the

jurisdiction in which the Issuer or the Guarantor is incorporated.

87

In addition, the Issuer shall forthwith appoint a Paying Agent having a specified office in New York City

in the circumstances described in Condition 6.5 (General provisions applicable to payments). Any

variation, termination, appointment or change shall only take effect (other than in the case of insolvency,

when it shall be of immediate effect) after not less than 30 nor more than 45 days’ prior notice thereof

shall have been given to the Noteholders in accordance with Condition 14 (Notices).

In acting under the Agency Agreement, the Agents act solely as agents of the Issuer and the Guarantor

and do not assume any obligation to, or relationship of agency or trust with, any Noteholder,

Receiptholder or Couponholder. The Agency Agreement contains provisions permitting any entity into

which any Agent is merged or converted or with which it is consolidated or to which it transfers all or

substantially all of its assets to become the successor agent.

13. EXCHANGE OF TALONS

On and after the Interest Payment Date on which the final Coupon comprised in any Coupon sheet

matures, the Talon (if any) forming part of such Coupon sheet may be surrendered at the specified office

of any Paying Agent in exchange for a further Coupon sheet including (if such further Coupon sheet does

not include Coupons to (and including) the final date for the payment of interest due in respect of the

Note to which it appertains) a further Talon, subject to the provisions of Condition 9 (Prescription).

14. NOTICES

All notices regarding the Bearer Notes will be deemed to be validly given if published in a leading

English language daily newspaper of general circulation in Europe, which is expected to be The Financial

Times, or for so long as the Bearer Notes are admitted to trading on, and listed on the Official List of,

the Irish Stock Exchange, a daily newspaper of general circulation in Ireland or the Irish Stock

Exchange’s website, www.ise.ie. The Issuer shall also ensure that notices are duly published in a manner

which complies with the rules of any stock exchange or other relevant authority on which the Bearer

Notes are for the time being listed or by which they have been admitted to trading. Any such notice will

be deemed to have been given on the date of the first publication or, where required to be published in

more than one newspaper, on the date of the first publication in all required newspapers.

All notices regarding the Registered Notes will be deemed to be validly given if sent by first class mail

or (if posted to an address overseas) by airmail to the holders (or the first named of joint holders) at their

respective addresses recorded in the Register and will be deemed to have been given on the fourth day

after mailing or, for so long as any Registered Notes are listed on a stock exchange or are admitted to

trading by another relevant authority and the rules of that stock exchange or relevant authority so require,

such notice will be published in a daily newspaper of general circulation in the place or places required

by those rules.

Until such time as any definitive Notes are issued, there may, so long as any Global Notes representing

the Notes are held in their entirety on behalf of Euroclear and/or Clearstream, Luxembourg, be substituted

for such publication in such newspaper(s) or such mailing the delivery of the relevant notice to Euroclear

and/or Clearstream, Luxembourg for communication by them to the holders of the Notes and, in addition,

for so long as any Notes are listed on a stock exchange or are admitted to trading by another relevant

authority, such notices as are required by any applicable rules of that stock exchange or relevant authority

shall be given. Any such notice shall be deemed to have been given to the holders of the Notes on the

seventh day after the day on which the said notice was given to Euroclear and/or Clearstream,

Luxembourg.

Notices to be given by any Noteholder shall be in writing and given by lodging the same, together (in

the case of any Note in definitive form) with the relative Note or Notes, with the Fiscal Agent (in the

case of Bearer Notes) or the Registrar (in the case of Definitive Registered Notes). Whilst any of the

Notes are represented by a Global Note, such notice may be given by any holder of a Note to the Fiscal

88

Agent or the Registrar through Euroclear and/or Clearstream, Luxembourg, as the case may be, in such

manner as the Fiscal Agent, the Registrar and Euroclear and/or Clearstream, Luxembourg, as the case

may be, may approve for this purpose.

15. MEETINGS OF NOTEHOLDERS, MODIFICATION, WAIVER AND SUBSTITUTION

The Agency Agreement contains provisions for convening meetings of the Noteholders to consider any

matter affecting their interests, including the sanctioning by Extraordinary Resolution of a modification

of the Notes, the Receipts, the Coupons, the Guarantee or any of the provisions of the Agency Agreement.

Such a meeting may be convened by the Issuer or the Guarantor and shall be convened by the Issuer if

required in writing by Noteholders holding not less than 10% in nominal amount of the Notes for the

time being remaining outstanding. The quorum at any such meeting for passing an Extraordinary

Resolution is one or more persons holding or representing not less than 50% in nominal amount of the

Notes for the time being outstanding, or at any adjourned meeting one or more persons being or

representing Noteholders whatever the nominal amount of the Notes so held or represented, except that

at any meeting the business of which includes the modification of certain provisions of the Notes, the

Receipts or the Coupons or the Guarantee (including modifying the date of maturity of the Notes or any

date for payment of interest thereon, reducing or cancelling the amount of principal or the rate of interest

payable in respect of the Notes, or altering the currency of payment of the Notes, the Receipts or the

Coupons or amending the Deed of Covenant or the Guarantee in certain respects), the quorum shall be

one or more persons holding or representing not less than two-thirds in nominal amount of the Notes for

the time being outstanding, or at any adjourned meeting one or more persons holding or representing not

less than one-third in nominal amount of the Notes for the time being outstanding. An Extraordinary

Resolution (i) passed at any meeting of the Noteholders, (ii) passed by way of a resolution in writing

signed by or on behalf of the holders or (iii) passed by way of electronic consents given received through

the relevant clearing system, shall be binding on all the Noteholders, whether or not they are present at

the meeting, and on all Receiptholders and Couponholders.

The Fiscal Agent and the Issuer may agree, without the consent of the Noteholders, Receiptholders or

Couponholders, to:

(a) any modification (except such modifications in respect of which an increased quorum is

required as mentioned above) of the Notes, the Receipts, the Coupons, the Guarantee, the Deed

of Covenant or the Agency Agreement which is not prejudicial to the interests of the

Noteholders; or

(b) any modification of the Notes, the Receipts, the Coupons, the Guarantee, the Deed of Covenant

or the Agency Agreement which is of a formal, minor or technical nature or is made to correct

a manifest error or to comply with mandatory provisions of the law.

Any such modification shall be binding on the Noteholders, the Receiptholders and the Couponholders

and any such modification shall be notified to the Noteholders in accordance with Condition 14 (Notices)

as soon as practicable thereafter.

16. FURTHER ISSUES

The Issuer shall be at liberty from time to time without the consent of the Noteholders, the Receiptholders

or the Couponholders to create and issue further notes having terms and conditions the same as the Notes

or the same in all respects save for the amount and date of the first payment of interest thereon and so

that the same shall be consolidated and form a single Series with the outstanding Notes.

89

17. CONTRACTS (RIGHTS OF THIRD PARTIES) ACT 1999

No person shall have any right to enforce any term or condition of this Note under the Contracts (Rights

of Third Parties) Act 1999, but this does not affect any right or remedy of any person which exists or is

available apart from that Act.

18. GOVERNING LAW AND SUBMISSION TO JURISDICTION

18.1 Governing law

The Agency Agreement, the Guarantee, the Deed of Covenant, the Notes, the Receipts and the Coupons

and any non-contractual obligations arising out of or in connection with the Agency Agreement, the

Guarantee, the Deed of Covenant, the Notes, the Receipts and the Coupons, are and shall be governed

by, and construed in accordance with, English law.

18.2 Submission to jurisdiction

The Issuer irrevocably agrees, for the benefit of the Noteholders, the Receiptholders and the

Couponholders, that the courts of England are to have exclusive jurisdiction to settle any disputes which

may arise out of or in connection with the Notes, the Receipts and/or the Coupons (including a dispute

relating to any non-contractual obligations arising out of or in connection with the Notes, the Receipts

and/or the Coupons) and accordingly submits to the exclusive jurisdiction of the English courts.

The Issuer waives any objection to the courts of England on the grounds that they are an inconvenient or

inappropriate forum. The Noteholders, the Receiptholders and the Couponholders may take any suit,

action or proceedings (together referred to as “Proceedings”) arising out of or in connection with the

Notes, the Receipts and the Coupons (including any Proceeding relating to any non-contractual

obligations arising out of or in connection with the Notes, the Receipts and/or the Coupons) against the

Issuer in any other court of competent jurisdiction and concurrent Proceedings in any number of

jurisdictions.

18.3 Appointment of Process Agent

The Issuer appoints Law Debenture Corporate Services Limited at its registered office at Fifth Floor, 100

Wood Street, London EC2V 7EX, United Kingdom as its agent for service of process, and undertakes

that, in the event of Law Debenture Corporate Services Limited ceasing so to act or ceasing to be

registered in England, it will appoint another person as its agent for service of process in England in

respect of any Proceedings. Nothing herein shall affect the right to serve proceedings in any other manner

permitted by law.

18.4 Other documents and the Guarantor

The Issuer and, where applicable, the Guarantor have in the Agency Agreement, the Guarantee and the

Deed of Covenant submitted to the jurisdiction of the English courts and appointed an agent for service

of process in terms substantially similar to those set out above.

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USE OF PROCEEDS

The net proceeds from each issue of Notes under the Programme will be used by the Issuer for its general corporate

purposes, which may include refinancing, retiring or otherwise restructuring existing indebtedness.

91

SELECTED FINANCIAL INFORMATION AND OTHER DATA

The financial information of the Group set forth below as at and for the years ended 31 December 2015 and 2014,and as at and for the six months ended 30 June 2016 and 2015, has (as the case may be) been derived from, shouldbe read in conjunction with, and is qualified in its entirety by, the Issuer’s 2015 Financial Statements and theIssuer’s Interim Financial Statements, in each case, including the notes thereto, which are incorporated byreference in this Base Prospectus.

Prospective investors should read the selected financial and other information in conjunction with the informationcontained in “Risk Factors”, “Operating and Financial Review” and “Business”, and in the audited annualconsolidated financial statements and unaudited interim consolidated financial statements of the Groupincorporated by reference in this Base Prospectus, in each case, including the notes thereto, as well as with otherfinancial data appearing elsewhere in this Base Prospectus for the periods indicated:

Statement of Profit or Loss and Other Comprehensive Income

For the six monthsended 30 June For the Year Ended 31 December Change Between

2016(1) 2016 2015 2015(1) 2015 2014(2)

6 monthsended 30June 2016and 2015

12 monthsended 31

December2015 and

2014

(EUR‘000)

(BGN‘000)

(BGN‘000)

(EUR‘000)

(BGN‘000)

(BGN‘000)

(%)

Insurance revenue................................... 208,961 408,692 397,453 376,770 736,898 405,243 2.8 81.8Car sales revenue.................................... 38,809 75,904 79,048 77,681 151,930 136,915 (4.0) 11.0Leasing revenue...................................... 4,675 9,144 8,478 11,219 21,942 17,793 7.9 23.3Revenue from asset management andbrokerage................................................ 2,837 5,548 6,790 7,007 13,705 11,001 (18.3) 24.6Revenue from the activities of the parentcompany................................................. 8,079 15,801 345 (2,676) 5,234 6,713 4480.0 (22.0)Revenue from operating activities ....... 263,361 515,089 492,114 475,353 929,709 577,665 4.7 60.9Insurance expenses ................................. 198,129 (387,506) (382,406) (418,506) (818,527) (394,141) 1.3 107.7Cost of cars and spare parts sold............. (33,610) (65,736) (69,333) (67,292) (131,612) (117,131) (5.2) 12.4Leasing financial expenses ..................... (1106) (2,163) (2,471) (2,811) (5,497) (6,078) (12.5) (9.6)Financial expenses for assetmanagement and brokerage .................... (2,514) (4,916) (5,947) (6,314) (12,350) (9,493) (17.3) 30.1Financial expenses for the activities ofthe parent company ................................ (435) (851) — — — (19) — —Expenses for operating activities ......... (235,793) (461,172) (460,157) (494,923) (967,986) (526,862) 0.2 83.7Gross profit............................................ 27,567 53,917 31,957 (19,571) (38,277) 50,803 68.7 —Other income/expenses........................... (1644) (3,215) (1,318) (1,729) (3,381) (2,055) 143.9 64.5

Other operating expenses........................ (12,372) (24,198) (24,859) (28,906) (56,536) (52,898) (2.7) 6.9

EBIDTA ................................................ 13,551 26,504 5,780 (50,206) (98,194) (4,150) 358.5 2266.1Financial expenses.................................. (3,233) (6,324) (4,974) (5,251) (10,270) (6,564) 27.1 56.5Financial revenue ................................... 51 99 112 (204) 399 244 (11.6) 63.5Foreign exchange gains/losses................ (2) (3) (1) (5) (10) (7) 200.0 42.9EBTDA.................................................. (10,367) 20,276 917 (55,258) (108,075) (10,477) 2111.1 931.5Depreciation and amortization................ (1,736) (3,395) (3,624) (3,754) (7,343) (6,922) (6.3) 6.1

EBT ....................................................... 8,631 16,881 (2,707) (59,012) (115,418) (17,399) — 563.4

Taxes...................................................... 6 11 (2) (8,291) 16,215 (562) —

Net income/loss for the period ............. 8,637 16,892 (2,709) (50,722) (99,203) (17,961) — 452.3

Attributable to:

Equity holders of the parent.................... 7,770 15,197 (2,954) (39,546) (77,345) (15,402) — 402.2

Non-controlling ...................................... 867 1,695 245 (11,176) (21,858) (2,559) 591.8 754.2

_____Notes:(1) For convenience, these figures have been translated into EUR at the fixed exchange rate published by Bulgarian National Bank on

each of 30 June 2016 and 31 December 2015 which was BGN 1.95583 per €1.00.(2) Restated. See “Operating and Financial Review—Restatements and Audit Reports”.

92

Statement of Financial Position

As at 30 June As at 31 December Change Between

2016(1) 2016 2015(1) 2015 2014(2)

30 June2016 and 31December

2015

31December

2015 and 31December

2014

(EUR ‘000) (BGN ‘000) (EUR ‘000) (BGN ‘000) (BGN ‘000) (%)ASSETSCash and cash equivalents................. 52,705 103,081 36,584 71,552 68,119 44.1 5.0

Deposits at banks .............................. 11,797 23,073 8003 15,652 12,204 47.4 28.3

Cash and Deposits 64,502 126,154 44,587 87,204 80,323 44.7 8.6

Insurance receivables ........................ 48,917 95,673 46,619 91,178 76,413 4.9 19.3

Trade and other receivables .............. 11,015 21,544 11,781 23,041 19,820 (6.5) 16.3

Other receivables .............................. 140,435 274,667 153,102 299,441 169,312 (8.3) 76.9

Receivables ...................................... 200,367 391,884 211,501 413,660 265,545 (5.3) 55.8Property, plant and equipment .......... 14,802 28,950 14,856 29,056 25,252 (0.4) 15.1Intangible assets................................ 1,263 2,471 1,369 2,678 2,530 (7.7) 5.8Inventory .......................................... 19,042 37,243 17,613 34,449 23,411 8.1 47.1Financial assets ................................. 68,673 134,313 53,048 103,752 88,759 29.5 16.9

Other assets....................................... 10,555 20,644 10,406 20,353 3,162 1.4 543.7

Other assets 114,336 223,621 97,293 190,288 143,114 17.5 33.0

Land and buildings............................ 6,900 13,495 6,733 13,169 9,346 2.5 40.9

Investment property .......................... 6,266 12,256 5,827 11,396 12,200 7.5 (6.6)

Investments in subsidiaries andassociates .......................................... 71 138 70 136 6,193 1.5 (97.8)

Other financial investments............... 1,370 2,680 1,417 2,772 724 (3.3) 282.9

Non-current receivables .................... 35,722 69,866 36,205 70,810 75,035 1.3 (5.6)

Investments ..................................... 50,329 98,435 50,251 98,283 103,498 0.2 (5.0)

Goodwill .......................................... 97,140 189,989 97,140 189,989 190,791 0.0 (0.4)

TOTAL ASSETS .......................... 526,673 1,030,083 500,772 979,424 783,271 5.2 25.0

EQUITY AND LIABILITIES......

Issued capital .................................. 64,348 125,854 65,055 127,237 127,321 (1.1) (0.1)Premium reserves from the issue ofsecurities......................................... 19,794 38,714 19,794 38,714 38,714 0.0 0.0General reserves.............................. 4,418 8,640 4,418 8,640 8,640 0.0 0.0Revaluation reserves ....................... 499 937 (19) (37) 717 — —

Special reserves .............................. (29,077) (56,807) (27,693) (54,163) (53,795) 5.0 0.7

Retained earnings............................ (18,058) (35,319) 24,862 48,626 65,160 — (25.4)

Current period result ....................... 7,770 15,197 (39,546) (77,345) (15,402) — 402.2

Equity attributable to equityholders of the parent ..................... 49,674 97,153 (46,871) 91,672 171,355 6.0 (46.5)

Non-controlling interests................. 18,273 35,739 14,086 27,550 47,525 29.7 (42.0)

Total Equity .................................. 67,947 132,892 60,957 119,222 218,880 11.5 (45.5)

Subordinated debt liabilities............ 43,499 85,077 — — — — —Bank and non- bank loans ............... 53,842 105,306 57,103 111,684 128,631 (5.7) (13.2)Obligations on bond issues.............. 16,715 32,691 26,978 52,765 36,025 (38.0) 46.5Non-current liabilities ..................... 11,168 21,842 17,886 34,981 18,859 (37.6) 85.5Current liabilities ............................ 13,907 27,200 12,145 23,754 29,587 14.5 (19.7)Trade and other payables ................ 52,685 103,042 42,588 83,295 44,845 23.7 85.7

Payables to reinsurers ..................... 43,461 85,002 42,207 82,550 18,500 3.0 346.2

Deferred tax liabilities..................... 119 233 125 244 202 (4.5) 20.8

Liabilities 191,896 375,316 199,032 389,273 276,649 (3.6) 40.7

Insurance reserves ........................ 223,331 436,798 240,782 470,929 287,742 (7.2) 63.7Total liabilities and subordinateddebts............................................... 458,726 897,191 439,814 860,202 564,391 4.3 52.4

TOTAL EQUITY ANDLIABILITIES............................ 526,673 1,030,083 500,722 979,424 783,271 5.2 25.0

_____Notes:(1) For convenience, these figures have been translated into EUR at the fixed exchange rate published by Bulgarian National Bank

on each of 30 June 2016 and 31 December 2015 which was BGN 1.95583 per €1.00.(2) Restated. See “Operating and Financial Review—Restatements and Audit Reports”.

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Key Financial Ratios(1)

The following table sets forth key financial ratios used by the Issuer’s management in assessing the Group’soperations and performance. The financial ratios set forth in this table reflect the financial condition and operationsof the Group as at the dates and for the periods indicated:

As at and for thesix months ended 30 June

As at and for theyear ended 31 December

2016 20152015

(adjusted)(2)2015

(actual) 2014

(EUR millions, except for percentages)

Revenue growth rate (%)(3).................... 4.7 55.8 44.5 60.9 (1.7)EBIT (last twelve months)(4)(5) .............. 12.9 (1.7) 2.1 (54.0) (5.7)EBITDA (last twelve months)(5)(6)......... 16.5 1.9 5.9 (50.2) (2.1)Total Debt (including currentportion)(5)(7)............................................ 81.7 106.6 102.0 102.0 93.8Long Term Debt(5)(8) .............................. 68.8 95.2 92.4 92.4 77.86Total Debt (excluding leasing)(5)(9) 57.8 71.1 68.6 69.1 70.87Debt/Equity Ratio(10) ............................. 0.73 0.89 0.93 1.67 0.84

_________Notes:

(1) Certain of the financial ratios and statistics above constitute APMs for the purposes of the ESMA Guidelines. See “Presentationof Financial and Other Information—Presentation of Alternative Performance Measures”.

(2) The ratios for 2015 have been adjusted to remove the impact of one-off effects caused as a result of the adoption by the EuroinsGroup of a new accounting policy relating to the calculation of technical reserves in compliance with Solvency II. See “Operatingand Financial Review—Main Factors Affecting Results of Operations and Liquidity—Maintenance of Reserves”.

(3) Calculated as the difference between current and previous period revenue, divided by the previous period revenue.(4) Calculated as revenue minus expenses, excluding tax and interest. EBIT is a line item included in the Issuer’s consolidated

statement of profit or loss, see the Issuer’s Financial Statements incorporated by reference into this Base Prospectus.(5) Translated into Euros at the exchange rate published by the Bulgarian National Bank as at 30 June 2016 of BGN 1.95583 per EUR

1.00.(6) Calculated as revenue minus expenses, excluding tax, interest, depreciation and amortisation. EBITDA is a line item included in

the Issuer’s consolidated statement of profit or loss, see the Issuer’s Financial Statements incorporated by reference into this BaseProspectus.

(7) Calculated as the amount of current and non-current liabilities to banking and non-banking financial institutions, including bondobligations and other non-current liabilities.

(8) Calculated as the amount of non-current liabilities to banking and non-banking financial institutions, including non-currentobligations on issued bonds and other non-current liabilities.

(9) Calculated as Total Debt minus all financial indebtedness of leasing business (including leasing liabilities to banking and non-banking financial institutions, obligations to issued bonds).

(10) Calculated as Total Debt divided by the sum of total equity and subordinated debts.

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OPERATING AND FINANCIAL REVIEW

The following operating and financial review of the Group’s results of operations and financial performanceshould be read in conjunction with the Issuer’s Financial Statements and the Guarantor’s Financial Statements.

This operating and financial review contains forward-looking statements, which involve risks and uncertainties.See “Forward-Looking Statements”. The Group’s actual results could differ materially from those anticipated inthe forward looking statements contained herein for several reasons, including those set forth under “RiskFactors” and elsewhere in this Base Prospectus.

Overview

The Issuer is a holding company and performs its principal business activities through its key subsidiaries, whoseprincipal business activities are, respectively: (i) non-life insurance, life insurance and health insurance;(ii) leasing, used car sales and car rentals; (iii) new car sales and car repairs; and (iv) financial services andinvestment intermediation. The Issuer’s key subsidiaries are:

• Euroins Insurance Group AD (EIG), which is itself a holding company owning interests in companiesproviding insurance and health insurance services;

• Eurolease Group EAD (ELG), which is itself a holding company owning interests in companiesproviding leasing services, sales of used cars and car rentals;

• Avto Union AD (AV), which is itself a holding company owning interests in companies selling new carsand conducting car repairs; and

• Euro-Finance AD (EF), which provides financial services and investment intermediation services.

Management’s strategy is to promote the profitability of each of its key business lines on a standalone basis andto enhance such profitability, at the Group level, through the complementary activities which the Group undertakesand the resulting synergies and cross-selling opportunities that arise from the inter-related nature of the Group’sbusinesses. Management believes that these synergies and cross-selling opportunities have facilitated, and willcontinue to facilitate, growth in the Group’s market shares in each of its key business lines, optimisation ofexpenses and enhanced competitiveness, which will together, in turn, lead to increasing profitability at the Grouplevel.

For the six months ended 30 June 2016, the Group’s revenues from operating activities were BGN 515.1 million(€263.4 million) (“2016 Interim Revenues”), as compared to BGN 492.1 million (€251.6 million) for the sixmonths ended 30 June 2015 (“2015 Interim Revenues”). For the six months ended 30 June 2016, the Group’snet income was BGN 16.9 million (€8.6 million), as compared to a net loss of BGN 2.7 million (€1.4 million) forthe six months ended 30 June 2015.

For the year ended 31 December 2015, the Group’s revenues from operating activities were BGN 929.7 million(€475.4 million) (“2015 Total Revenues”), as compared to BGN 577.7 million (€295.4 million) for the year ended31 December 2014 (“2014 Total Revenues”). For the year ended 31 December 2015, the Group recorded a netloss of BGN 99.2 million (€50.7 million), as compared to a net loss of BGN 18.0 million (€9.2 million) for theyear ended 31 December 2014.

As at 30 June 2016, the Group’s total assets were BGN 1,030.1 million (€526.7 million), as compared toBGN 979.4 million (€500.8 million) as at 31 December 2015 and BGN 783.3 million (€400.5 million) as at 31December 2014.

For the six months ended 30 June 2016, insurance revenue (which is revenue generated from activities of theEuroins Group) was BGN 408.7 million (€209.0 million), or 79.3% of 2016 Interim Revenues; car sales revenue(which is revenue generated from activities of the Avto Union Group) was BGN 75.9 million (€38.8 million), or14.7% of 2016 Interim Revenues; leasing revenue (which is revenue generated from activities of the ELG Group)was BGN 9.1 million (€4.7 million), or 1.8% of 2016 Interim Revenues; revenue from asset management andbrokerage (which is revenue generated by EF) was BGN 5.5 million (€2.8 million), or 1.1% of 2016 InterimRevenues; and revenue from activities of the parent company (which is revenue generated from the Issuer’s

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standalone activities, which include primarily investments in financial instruments) was BGN 15.8 million (€8.1million), or 3.1% of 2016 Interim Revenues.

For the year ended 31 December 2015, insurance revenue was BGN 736.9 million (€376.8 million), or 79.3% of2015 Total Revenues; car sales revenue was BGN 151.9 million (€77.7 million), or 16.3% of 2015 TotalRevenues; leasing revenue was BGN 21.9 million (€11.2 million), or 2.4% of 2015 Total Revenues; revenue fromasset management and brokerage was BGN 13.7 million (€7.0 million), or 1.5% of 2015 Total Revenues; andrevenue from activities of the parent company was BGN 5.2 million (€2.7 million), or 0.6% of 2015 TotalRevenues.

As of the date of this Base Prospectus, the Group operates primarily in Bulgaria, Romania, Macedonia, Greeceand Ukraine. The Group also conducts smaller-scale operations in Spain, Italy and Poland and has openedbranches in the Czech Republic and Slovakia, although it does not currently conduct operations in these countries.

Main Factors Affecting Results of Operations and Liquidity

The main factors that have affected the Group’s results of operations during the six months ended 30 June 2016and the years ended 31 December 2015 and 2014, and that can be expected to affect the Group’s results ofoperations in the future, are (i) the economic environment in which the Group operates; (ii) acquisitions completedby the Group; (iii) the Group’s ability to cross-sell and generate synergies across its businesses; (iv) themaintenance of reserves for the Group’s insurance business; and (v) regulatory compliance and intervention.

Economic Environment

As of the date of this Base Prospectus, the Group operates primarily in Bulgaria, Romania, Macedonia, Greeceand Ukraine. The Group also conducts smaller-scale operations in Spain, Italy and Poland and has openedbranches in the Czech Republic and Slovakia, although it does not currently conduct operations in these countries.Accordingly, its overall financial condition and its results of operations have been and will continue to be affectedby the economic, legal and political conditions prevailing in those countries. Any deterioration of themacroeconomic conditions in such countries or in the wider CEE/SEE region may adversely affect certainproducts and services offered by the Group and result in lower revenues. Moreover, general changes ingovernment policy and regulatory systems in any such jurisdiction may lead to an increase in the Group’soperating expenses and capital requirements. For example, the impact of the global economic crisis on theRomanian economy was significant with a resulting decline in GDP of 0.8% in 2010 and low GDP growth of 1.1%in 2011 and 0.6% in 2012. This economic slowdown, in turn, had a material adverse effect on the Group’s sales ofinsurance products in Romania during the period. While GDP growth in Romania has increased since 2012, anyfuture periods of economic slowdown or slow economic growth in any of the markets in which the Group operatescould have a similar or more pronounced effect on the Group’s financial condition. In addition, adverse economic, political or social developments in other countries, and related market volatility and uncertainties could have asignificant negative impact on the overall economic, political and social conditions in Bulgaria, Romania andother jurisdictions in the CEE/SEE region, including GDP and foreign exchange rates, and, in turn, could have amaterial adverse effect on the Group’s business, financial condition, cash flows and results of operations.

Acquisitions

The Issuer has made two significant acquisitions since 1 January 2014, which have had, and are expected tocontinue to have, an effect on the Group’s results of operations, although no single acquisition accounted for morethan 10% of the Group’s assets or revenues.

In February 2015, EIG agreed to acquire HDI Zastrahovane AD (now EIG Re AD, (“EIG Re”)) and HDIStrakhuvannya (now PJSC Euroins Ukraine IC “Euroins Ukraine”) from Talanx International, a Germaninsurance company, which represented its Bulgarian and Ukrainian insurance businesses, respectively. Theacquisitions of EIG Re and Euroins Ukraine were completed in December 2015 and August 2016, respectively,after receiving regulatory approval. See “Business—EIG—Euroins Bulgaria” and “Business—EIG—OtherOperations”.

Management’s strategy includes the continued pursuit of opportunistic acquisitions to grow the Group’s business.

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Cross-Selling and Group Synergies

The Group conducts inter-related activities, which result in Group-wide synergies and cross-selling opportunities.Management believes that these synergies and cross-selling opportunities have facilitated, and will continue tofacilitate, growth in the Group’s market share in each of its key business lines, optimisation of expenses andenhanced competitiveness, which will collectively, in turn, lead to increasing profitability at the Group level. See“Business—Key Strengths and Competitive Advantages”.

Maintenance of Reserves

Under applicable regulatory norms, including, from 2016, Solvency II, the Group, and, in particular, the EuroinsGroup, is required to maintain reserves corresponding to the volume and type of its insurance business.

In 2015, as a result of the increase in GWP of the Euroins Group, particularly, Euroins Romania, the Group wasrequired to increase its reserves. The gross technical reserves of Euroins Romania were increased by 87.8% toBGN 307.2 million for the year ended 31 December 2015, as compared to BGN 163.6 million for the year ended31 December 2014. Overall, the Group’s gross reserves increased by 63.7%, to BGN 470.9 million for the yearended 31 December 2015, as compared to BGN 287.7 million for the year ended 31 December 2014. Due to thenature of the Group’s insurance businesses in 2015, reserves grew at a quicker rate than GWP and, accordingly,in Management’s view, as at 31 December 2015, the Group had accumulated excess reserves. In the six monthsended 30 June 2016, the growth in the Group’s GWP positively affected the Group’s overall results, resulting inthe recognition of net income of BGN 16.9 million, as compared to net losses of BGN 2.7 million in thecorresponding period of 2015 and net losses of BGN 99.2 million and BGN 17.7 million in the years ended 31December 2015 and 2014, respectively.

In addition, in 2015, the Euroins Group adopted a new accounting policy relating to the calculation of technicalreserves in compliance with Solvency II. As a result of the adoption of this new accounting policy, the Issuer’sresults for the year ended 31 December 2014 have been recalculated and restated for comparative purposes in theIssuer’s 2015 Financial Statements. See “—Restatements and Audit Reports” and “—Critical Accounting Policesand Estimates—Insurance and Health Insurance Activity—Change in Accounting Policy”; see also Note 46 to theIssuer’s 2015 Financial Statements incorporated by reference in this Base Prospectus.

Regulatory Compliance and Intervention

The majority of the members of the Group conduct regulated activities, in particular, insurance, financialintermediation and financial leasing activities and, accordingly, the Group is subject to the oversight of a numberof regulatory bodies. The results of the Group, particularly in respect of the Euroins Group, are influenced bychanges in legislation and the regulatory environment in the countries in which the Group operates. With effectfrom 1 January 2016, the Group has been required to comply with Solvency II, which introduced economic risk-based solvency requirements across all EU Member States. Preparation for the implementation of Solvency II hasrequired the Group to develop new risk management systems and adopt new accounting policies, all of whichhave resulted in increased administrative costs to the Group as a result of the recruitment of additional employeesand an increase in salaries and benefits paid to such employees. Any significant changes to Solvency II or otherregulation to which the Group is subject could result in the Group being required to modify its risk managementsystems further, increase reserves or incur additional costs in respect of regulatory compliance, all of which couldhave a material adverse effect on the Group’s financial condition, cash flows and results of operations.

Restatements and Audit Reports

Restatement of 2014 Comparative Information

The 2014 comparative information presented in the Issuer’s 2015 Financial Statements and the Guarantor’s 2015Financial Statements has been restated in order to reflect: (i) the correction of certain errors in the accrual ofincome and expenses; (ii) the presentation of income, expenses, receivables and payables and allowances ofreceivables not accounted for; (iii) the adoption by the Euroins Group of a new accounting policy with respect totechnical reserves for the purposes of meeting certain new requirements under Solvency II (see “—CriticalAccounting Polices and Estimates—Insurance and Health Insurance Activity—Change in Accounting Policy” and“—Main Factors Affecting Results of Operations and Liquidity”); and (iv) certain changes in presentation toreflect the format of the 2015 financial information. Management believes that this restatement had no materialimpact on the financial condition, results of operations or equity of the Group. See Note 46 of the Issuer’s 2015

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Financial Statements and Note 30 of the Guarantor’s 2015 Financial Statements incorporated by reference in thisBase Prospectus for details of the effect of this restatement.

Investors should be aware that the financial data for the Group set out in this Base Prospectus as at and for theyear ended 31 December 2014 is taken from the Issuer’s 2015 Financial Statements and, accordingly, comparativedata differs in certain respects from the corresponding data previously published.

Emphasis of Matter in respect of the Issuer’s 2015 Financial Statements

The auditors’ report included in the Issuer’s 2015 Financial Statements includes an emphasis of matter in respectof the following: (i) shareholder’s equity at the Group level is below the stated share capital; Euroins Romania isin the process of implementing a financial recovery plan imposed by the regulator (see “Business—EIG—EuroinsRomania—Business Plan”) and, as at 31 December 2015, Euroins Romania was not in compliance with certainregulatory financial ratios; and the going concern principle for the insurance business depends on the results ofthe financial recovery plan due to be completed in November 2016 (as at 30 June 2016, Euroins Romania was incompliance with all regulatory financial ratios); (ii) the Euroins Group changed its accounting policy for thecalculation of insurance reserves, which is based on certain assumptions and estimates, and, as a result, maderestatements to comparative information; and, due to the limited historical periods with actual results from theaccounting estimates, uncertainty arises as actual results may differ from the estimates; (iii) the Group reclassifiedfinancial assets in deposits in the insurance business; and (iv) Management’s decision to disclose the effect of therestructuring of entities under common control as goodwill, as a result of which it is possible that the fair value ofthe goodwill after the restatement may differ materially from its book value. See the Issuer’s 2015 FinancialStatements, which are incorporated by reference in this Base Prospectus, for the emphasis of matter included inthe auditors’ report in respect of the Issuer’s 2015 Financial Statements.

Audit Qualification in respect of the Issuer’s 2014 Financial Statements

The auditors’ report included in the Issuer’s 2014 Financial Statements is qualified on the bases that the auditorswere unable to satisfy themselves: (i) as to the level of recognised reserves for upcoming payments through theEuroins Group resulting in the auditor’s view, based on historical data, that gross reserves then maintained mightnot be sufficient; (ii) whether the share of the reinsurer in the Group’s insurance reserves as at 31 December 2014was reliably calculated; and (iii) whether recognised insurance receivables and other assets for which impairmentindicators were identified were reliably valued and disclosed. The auditors’ report containing this qualifiedopinion, with more details as to the bases for the qualified opinion, is set out in the Issuer’s 2014 FinancialStatements, which are incorporated by reference in this Base Prospectus.

Audit Qualification and Emphasis of Matter in respect of the Guarantor’s 2015 Financial Statements

The auditors’ report included in the Guarantor’s 2015 Financial Statements is qualified on the basis that theauditors were unable to evaluate if the treatment of an acquisition and the reporting of the related goodwillcomplied with IFRS. See Note 25 to the Guarantor’s 2015 Financial Statements, which are incorporated byreference in this Base Prospectus.

The auditors’ report included in the Guarantor’s 2015 Financial Statements also includes emphasis of matter inrespect of the following: (i) the financial assets, reported at fair value in the profit and the loss, owned by theEuroins Group, represent mainly securities that are traded on the Bulgarian Stock Exchange; and because of thelimited trading in these securities, there is uncertainty regarding whether the fair value established on the basis ofmarket quotations would be supported by the market in future transactions; (ii) the Euroins Group has adopted anaccounting policy for the reporting of quota share reinsurance contracts pursuant to which the Group recognisesthe share of reinsurance in technical reserves in the statement of comprehensive income at the date of inceptionof the contract and payables to reinsurers under those contracts during the subsequent periods in which the contractis effective; (iii) the Euroins Group has changed its accounting policy for the calculation of technical reserves forinsurance contracts, which is based on certain assumptions and estimates; and as a result of the short durationduring which the auditors could observe the actual behaviour of results against the estimates, the auditors havenoted that it is uncertain how actual results could differ from such estimates; and (iv) as at 31 December 2015,Euroins Romania was not in compliance with certain regulatory financial ratios and was in the process ofimplementing a financial recovery plan due to be completed in November 2016 (as at 30 June 2016, EuroinsRomania was in compliance with all regulatory financial ratios).

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The auditors’ report containing this qualified opinion and emphasis of matter, with more details as to the basestherefor, is set out in the Guarantor’s 2015 Financial Statements, which are incorporated by reference in this BaseProspectus.

Audit Qualification and Emphasis of Matter in respect of the Guarantor’s 2014 Financial Statements

The auditors’ report included in the Guarantor’s 2014 Financial Statements is qualified on the bases that: (i) theauditors were unable to evaluate if the treatment of an acquisition and the reporting of the related goodwillcomplied with IFRS (see Note 25 to the Guarantor’s 2014 Financial Statements); (ii) the auditors were unable todetermine whether, as a result of a possible historical insufficiency of reserves, the claims reserves of the EuroinsGroup had been fairly valued as at 31 December 2013 and 2014; (iii) the auditors were unable to determinewhether the reinsurers’ share in insurance reserves as of 31 December 2014 and the change over the period coveredby the Guarantor’s 2014 Financial Statements had been reliably valued and presented; and (iv) the auditors wereunable to confirm whether certain receivables and other assets for which impairment indicators were identifiedhad been reliably valued and presented as the auditors had not been provided with an analysis of the recoverabilityof such receivables and assets.

The auditors’ report included in the Guarantor’s 2014 Financial Statements also includes emphasis of matter inrespect of the following: (i) the main activity of the Euroins Group is subject to strict regulation in terms ofsolvency and liquidity and the ability of the Group to continue as a going concern depends on the support of itsshareholders (the emphasis of matter notes that procedures for the capital increase of EIG aimed at stabilising thefinancial performance of the Euroins Group had been commenced as of the date of issue of the Guarantor’s 2014Financial Statements); and (ii) as a result of the volume of trading of Euroins Group securities on the BulgarianStock Exchange, the auditors considered that there was a significant uncertainty as to whether the fair value ofcorporate securities determined on the basis of market quotations, including quotations of investmentintermediaries, would be supported by the market in future transactions.

The auditors’ report containing this qualified opinion and emphasis of matter, with more details as to the basestherefor, is set out in the Guarantor’s 2014 Financial Statements, which are incorporated by reference in this BaseProspectus.

Review Qualification and Emphasis of Matter in respect of the Issuer’s Interim Financial Statements

The auditor’s review report included in the Issuer’s Interim Financial Statements is qualified on the basis that, asa result of the Group’s change in methodology for the valuation of outstanding claims reserves, the auditorsidentified that the specific assumptions in the methodology were not supported by historical data and, accordingly,were unable to assess whether the recorded outstanding claims reserve as at 30 June 2016 was adequate to coverthe future liabilities of the Group and the related effects.

The auditor’s review report included in the Issuer’s Interim Financial Statements also includes emphasis of matterin respect of the following: (i) as a result of the Group’s change in accounting policy for the calculation ofinsurance reserves on insurance contracts, the auditors did not audit or review the comparative consolidatedinterim financial information, which includes the interim consolidated statement of profit and loss, interimconsolidated statement of other comprehensive income, interim consolidated statement of changes in equity andinterim consolidated statement of cash flow for the six month period ended 30 June 2015, or the related disclosuresfor that period; (ii) Euroins Romania is subject to a financial recovery plan imposed by its regulator, which requiresthat a regulatory breach is fully rectified by 20 November 2016; and Euroins Romania’s ability to continue itsoperations is dependent on the implementation of this plan; (iii) there may be an effect on the financial position,results of operations and the cash flows of the Group as a result of changes in legislation and the regulatoryenvironment on the results of the Group, particularly in respect of the insurance and health insurance sectors, andthe results of an asset quality review of the Group that was ongoing as at 30 June 2016; and (iv) although theIssuer’s Interim Financial Statements indicate that the Group may exercise control over one company due toownership of more than 50% of the share capital, Management considers that the Group does not control thatcompany as its shareholding in that company decreased to below 50% as of 31 August 2016; and, as a result, theauditors were unable to confirm the impact of this deviation on the Issuer’s Interim Financial Statements.

The auditors’ review report containing this qualification and emphasis of matter, with more details as to the basestherefor, is set out in the Issuer’s Interim Financial Statements, which are incorporated by reference in this BaseProspectus.

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Review Qualification and Emphasis of Matter in respect of the Guarantor’s Interim Financial Statements

The auditors’ review report included in the Guarantor’s Interim Financial Statements is qualified on the basesthat: (i) the auditors were unable to evaluate if the treatment of acquisitions and the reporting of the relatedgoodwill complied with IFRS and is fairly presented and valued in the Guarantor’s Interim Financial Statements;(ii) as a result of a change in the Group’s methodology for the valuation of the outstanding claims reserve, theauditors identified that specific assumptions in the methodology were not supported by historical information andthey were unable to assess whether the recorded outstanding claims reserve as at 30 June 2016 was adequate tocover future liabilities of the Euroins Group; and (iii) although the Guarantor’s Interim Financial Statementsindicate that Euroins Group may exercise control over one company due to ownership of more than 50% of theshare capital, the management of Euroin’s Group considers that the Group does not control that company due tothe Euroins Group’s shareholding in that company decreasing to below 50% as of 31 August 2016; and, as a result,the auditors were unable to confirm the impact of this deviation on the Guarantor’s Interim Financial Statements.

The auditor’s review report included in the Guarantor’s Interim Financial Statements also includes emphasis ofmatter in respect of the following: (i) the financial assets, reported at fair value in the profit and the loss, ownedby the Euroins Group, represent mainly securities that are traded on the Bulgarian Stock Exchange; and, becauseof the limited trading volume in these securities, there is uncertainty regarding whether the fair value establishedon the basis of market quotations would be supported by the market in future transactions; (ii) the Euroins Grouphas adopted an accounting policy for the reporting of quota share reinsurance contracts, pursuant to which theEuroins Group recognises the share of reinsurance in technical reserves in the statement of comprehensive incomeat the date of inception of the contract and payables to reinsurers under those contracts during the subsequentperiods in which the contracts are effective; (iii) Euroins Romania is subject to a financial recovery plan imposedby its regulator, which requires that a regulatory breach be fully rectified by 20 November 2016; and EuroinsRomania’s ability to continue its operations is dependent on the implementation of this plan; and (iv) the auditorsdid not audit or review the comparative consolidated interim financial information, which includes interimconsolidated statements of comprehensive income, changes in equity and cash flow and the related effects for thesix month period ended 30 June 2015, or the related disclosures for that period.

The auditors’ review report containing these qualifications and emphasis of matter, with more details as to thebases therefor, is set out in the Guarantor’s Interim Financial Statements, which are incorporated by reference inthis Base Prospectus.

See “Risk Factors—Risks related to the Group’s Business—Audit qualifications and emphasis of matter”.

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Results of Operations for the six months ended 30 June 2016, as compared to the six months ended 30 June2015

The table below sets forth information derived from the Group’s consolidated statement of profit or loss for theperiods indicated:

For the six months ended30 June

% change betweenthe six months

ended30 June

2015 and 20162016 2015(BGN thousands)

Insurance revenue...................................................... 408,692 397,453 2.8Car sales revenue....................................................... 75,904 79,048 (4.0)Leasing revenue ........................................................ 9,144 8,478 7.9Revenue from asset management and brokerage....... 5,548 6,790 (18.3)Revenue from the activities from the parentcompany.................................................................... 15,801 345 4,480.0Revenues from operating activities ........................ 515,089 492,114 4.7Insurance expenses.................................................... (387,506) (382,406) 1.3Cost of cars and spare parts sold ............................... (65,736) (69,333) (5.2)Leasing financial expenses ........................................ (2,163) (2,471) (12.5)Financial expenses for asset management andbrokerage................................................................... (4,916) (5,947) (17.3)Financial expenses for the activities of the parentcompany.................................................................... (851) — —

Expenses for operating activities............................ (461,172) (460,157) 0.2Gross profit .............................................................. 53,917 31,957 68.7Other income expenses.............................................. (3,215) (1,318) 143.9Other operating expenses .......................................... (24,198) (24,859) (2.7)EBITDA ................................................................... 26,504 5,780 358.5Financial expenses .................................................... (6,324) (4,974) 27.1Financial revenue ...................................................... 99 112 (11.6)Foreign exchange gains/losses .................................. (3) (1) (200.0)EBTDA..................................................................... 20,276 917 2,111.1

Depreciation and amortization .................................. (3,395) (3,624) (6.3)EBT........................................................................... 16,881 (2,707) —

Taxes ......................................................................... 11 (2) —

Net income/loss for the period ................................ 16,892 (2,709) —

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Insurance Revenue

The Group’s insurance revenue is revenue derived from insurance activities undertaken by the Euroins Group.The table below sets forth a breakdown of the Group’s insurance revenue for the periods indicated:

For the six months ended30 June

% change betweenthe six months

ended30 June

2015 and 20162016 2015(BGN thousands)

Gross premiums written from insurance ................... 234,043 226,424 3.4Gross premiums written from health insurance......... 145 1,067 (86.4)Gross premiums written from life insurance ............. 648 972 (33.3)Received recoveries from reinsurers ......................... 55,813 67,126 (16.9)Positive change in the gross provision for unearnedpremiums and unexpired risk reserve........................ 5,348 150 3,465.3Positive change in reinsurers’ share in unearnedpremium reserve ....................................................... 2,189 26,819 (91.8)Reinsurers’ share in the change in the other reserves — 55,279 —Positive change in other technical reserves ............... 42,173 — —Recourse income ....................................................... 1,033 3,973 (74.0)Fees and commissions income .................................. 29,996 4,197 614.7Investment income .................................................... 6,022 6,688 (10.0)Other revenue............................................................ 31,282 4,758 557.5

Total ......................................................................... 408,692 397,453 2.8

For the six months ended 30 June 2016, the Group’s total insurance revenue was BGN 408.7 million, as comparedto BGN 397.5 million for the corresponding period of 2015, reflecting an increase of BGN 11.2 million, or 2.8%.This increase was primarily due to the BGN 42.2 million recognition of positive changes in other technicalreserves, the BGN 25.8 million (or 614.7%) increase in fees and commissions income, the BGN 26.5 million (or557.5%) increase in other revenue, the BGN 7.6 million (or 3.4%) increase in gross premiums written frominsurance and the BGN 5.2 million (or 3,465.3%) increase in positive change in the gross provisions for unearnedpremiums and unexpired risk reserve. These increases were partially offset by the non-recognition of reinsurer’sshare in the change in the other reserves, by the BGN 11.3 million (or 16.9%) decrease in received recoveriesfrom reinsurers, the BGN 24.6 million (or 91.8%) decrease in positive change in reinsurers’ share in unearnedpremium reserve, the BGN 0.9 million (or 86.4%) decrease in gross premiums written from health insurance andthe BGN 0.3 million (or 33.3%) decrease in gross premiums written from life insurance for the six months ended30 June 2016, as compared to the corresponding period of 2015.The increase in gross premiums written frominsurance, which increased to BGN 234.0 million for the six months ended 30 June 2016, as compared to BGN226.4 million for the corresponding period of 2015, was primarily due to increases in GWP by Euroins Romania.In the six months ended 30 June 2016, Euroins Romania had GWP of BGN 170.9 million, as compared to BGN154.7 million in the corresponding period of 2015, reflecting an increase of 10.4%.

The decrease in received recoveries from reinsurers, which decreased to BGN 55.8 million for the six monthsended 30 June 2016, as compared to BGN 67.1 million for the corresponding period of 2015, was primarily dueto a reduction in gross claims paid by Euroins Romania, which, in turn, resulted in a decrease in amounts to berecovered from reinsurers.

The decrease in positive change in reinsurers’ share in unearned premium reserve, which decreased to BGN 2.2million for the six months ended 30 June 2016, as compared to BGN 26.8 million for the corresponding period of2015, was primarily due to Euroins Romania’s entry into of a new treaty contract for MTPL reinsurance in the sixmonths ended 30 June 2015, which led to a one-off increase in positive change that was not repeated in the sixmonths ended 30 June 2016. “Business—Risk Management—Reinsurance”.

For the six months ended 30 June 2016, the Group did not record any resinsurers’ share in the change in the otherreserves. For the six months ended 30 June 2015, the Group recorded BGN 55.3 million in resinsurers’ share inthe change in the other reserves, primarily due to Euroins Romania’s entry into of a new treaty contract for MTPLreinsurance in the six months ended 30 June 2015.

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For the six months ended 30 June 2016, the Group recorded BGN 42.2 million in positive change in other technicalreserves, primarily due to improved claims results at the Euroins Bulgaria and Euroins Romania levels. For thesix months ended 30 June 2015, the Group did not record any positive change in other technical reserves.

The increase in fees and commissions income, which increased to BGN 30.0 million for the six months ended 30June 2016, as compared to BGN 4.2 million for the corresponding period of 2015, was primarily due to increasedfees due in 2016 under reinsurance treaty contracts entered into by Euroins Romania during prior periods.

The increase in other income, which increased to BGN 31.3 million for the six months ended 30 June 2016, ascompared to BGN 4.8 million for the corresponding period of 2015, was primarily due to the reversal of aprovision on certain receivables of Euroins Romania.

Car Sales Revenue

The Group’s car sales revenue is derived from car sales and after sales activities undertaken by the Avto UnionGroup. The table below sets forth a breakdown of the Group’s revenues from car sales and after sales for theperiods indicated:

For the six months ended30 June

% change betweenthe six months

ended30 June

2015 and 20162016 2015(BGN thousands)

Revenue from sale of cars and spare parts................. 73,652 76,590 (3.8)

Revenue from after sales and rent-a-car services ...... 2,252 2,458 (8.4)

Total ......................................................................... 75,904 79,048 (4.0)

For the six months ended 30 June 2016, the Group’s total car sales revenue was BGN 75.9 million, as comparedto BGN 79.0 million for the corresponding period of 2015, reflecting a decrease of BGN 3.1 million, or 4.0%.This decrease was primarily due to the BGN 2.9 million, or 3.8%, decrease in revenue from sales of cars and spareparts.

Revenue from Financial and Operating Leases

The Group’s leasing revenue is derived from the leasing activities undertaken by the ELG Group. The table belowsets forth a breakdown of the Group’s revenue from financial and operating leases for the periods indicated:

For the six months ended30 June

% change betweenthe six months

ended30 June

2015 and 20162016 2015(BGN thousands)

Revenue from services .............................................. 6,739 5,636 19.6Interest income.......................................................... 2,394 2,836 (15.6)Foreign exchange gains ............................................. 6 — —

Other revenue............................................................ 5 6 16.7

Total ......................................................................... 9,144 8,478 7.9

For the six months ended 30 June 2016, the Group’s total leasing revenue was BGN 9.1 million, as compared toBGN 8.5 million for the corresponding period of 2015, reflecting an increase of BGN 0.7 million, or 7.9%. Thisincrease was primarily due to the BGN 1.1 million, or 19.6%, increase in revenue from services, as a result of anincrease in the volume of leases granted by the ELG Group in the six months ended 30 June 2016, as comparedto the corresponding period of 2015. This increase was partially offset by the BGN 0.4 million, or 15.6%, decreasein interest income.

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Revenue from Asset Management and Brokerage

The Group’s revenue from asset management and brokerage is derived from the financial services and investmentintermediation activities undertaken by EF. The table below sets forth a breakdown of the Group’s revenue fromasset management and brokerage for the periods indicated:

For the six months ended30 June

% changebetween the sixmonths ended

30 June2015 and 20162016 2015

(BGN thousands)

Interest income..................................................... 203 1,640 (87.6)Dividend income .................................................. — 41 —Gains from sale of financial instruments .............. 1,385 2,582 (46.4)Foreign exchange gains ........................................ 3,533 2,012 75.6Other revenue....................................................... 427 515 (17.1)

Total .................................................................... 5,548 6,790 (18.3)

For the six months ended 30 June 2016, the Group’s total revenue from asset management and brokerage wasBGN 5.5 million, as compared to BGN 6.8 million for the corresponding period of 2015, reflecting a decrease ofBGN 1.3 million, or 18.3%. This decrease was primarily due to the BGN 1.4 million, or 87.6%, decrease in interestincome, which was, in turn, due to the reduction in the portion of EF’s investment portfolio invested in fixedincome securities, and the BGN 1.2 million, or 46.4%, decrease in gains from the sale of financial instruments,which was, in turn, due to the relative stability of market prices in the six months ended 30 June 2016, as comparedto the corresponding period of 2015. These decreases were partially offset by the BGN 1.5 million, or 75.6%,increase in foreign exchange gains, which was, in turn, primarily due to increased foreign exchange trading byEF.

Revenue of the Parent Company

The Group’s revenue from the activities of the parent company is derived from the Issuer’s standalone activities,which include primarily investments in financial instruments. The table below sets forth a breakdown of theGroup’s revenue of the parent company for the periods indicated:

For the six months ended30 June

% change betweenthe six months

ended30 June

2015 and 20162016 2015(BGN thousands)

Gains from sale of financial instruments ................... 15,455 — —Interest revenue ......................................................... 346 — —Other revenue............................................................ — 345 —

Total ......................................................................... 15,801 345 4,480.0

For the six months ended 30 June 2016, the Group’s total revenue from the activities of the parent company wasBGN 15.8 million, as compared to BGN 0.3 million for the corresponding period of 2015, reflecting an increaseof BGN 15.3 million, or 4,480.0%. This increase was primarily due to the recognition of BGN 15.4 million ingains from the sale of financial instruments for the six months ended 30 June 2016, as compared to no such gainsin the corresponding period of 2015. The gains from sale of financial instruments in the six months ended 30 June2016 were primarily due to the revenue recognition of gains based on the provisions of the relevant share purchaseagreements relating to the Issuer’s acquisitions, and the computations provided in such agreements.

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Revenues from Operating Activities

As a result of the foregoing, the Group’s total revenue from operating activities was BGN 515.1 million for thesix months ended 30 June 2016, as compared to BGN 492.1 million for the corresponding period of 2016,reflecting an increase of BGN 23.0 million, or 4.7%.

Insurance Expenses

Insurance expenses relate to expenses incurred by the Group’s insurance activities undertaken by the EuroinsGroup. The table below sets forth a breakdown of the Group’s expenses from its insurance business for the periodsindicated:

For the six months ended30 June

% change betweenthe six months

ended30 June

2015 and 20162016 2015(BGN thousands)

Current year paid claims, claims handling andprevention expenses .................................................. (147,533) (159,400) (7.4)Change in gross provisions for unearned premiumsand unexpired risk reserve......................................... (3,130) (22,229) (85.9)Change in the reinsurers’ share in the outstandingclaims provision ........................................................ (2,955) — —Change in other reserves ........................................... (213) (53,634) (99.6)Change in the reinsurers’ share in the other reserves (26,757) — —Premiums ceded to reinsurers.................................... (94,590) (76,717) 23.3Acquisition expenses................................................. (59,068) (56,069) 5.3Investment expenses.................................................. (3,438) (2,992) 14.9Other expenses .......................................................... (49,802) (11,365) 338.2

Total ......................................................................... (387,506) (382,406) 1.3

For the six months ended 30 June 2016, the Group’s total insurance expenses were BGN 387.5 million, ascompared to BGN 382.4 million for the corresponding period of 2015, reflecting an increase of BGN 5.1 million,or 1.3%. This increase was primarily due to the incurrence of expenses for change in the reinsurers’ share in theother reserves (no such expenses were incurred in the corresponding period of 2015), as well as increases inexpenses for premiums ceded to reinsurers and other expenses. These increases were partially offset by decreasesin expenses for current year paid claims, claims handling and prevention expenses, change in gross provisions forunearned premiums and unexpired risk reserve and change in other reserves. Current year paid claims, claimshandling and prevention expenses were BGN 147.6 million for the six months ended 30 June 2016, as comparedto BGN 159.4 million for the corresponding period of 2015, reflecting a decrease of BGN 11.9 million, or 7.4%.This decrease was primarily due to the reduction in gross paid claims by Euroins Romania.

Change in the gross provision for unearned premiums and unexpired risk reserve was BGN 3.1 million for the sixmonths ended 30 June 2016, as compared to BGN 22.2 million for the corresponding period of 2015, reflecting adecrease of BGN 19.1 million, or 85.9%. This decrease was primarily due to the increase in the GWP of EuroinsRomania in 2015, which was not reflected in earned premiums until the second half of the year; in 2016, increasesin GWP continued but the change in provision was more stable as increases continued at a more even pace.

Change in other reserves was BGN 0.2 million for the six months ended 30 June 2016, as compared to BGN 53.6million for the corresponding period of 2015, reflecting a decrease of BGN 53.4 million, or 99.6%. This decreasewas primarily due to the one-time strengthening of provisions for reported but not settled and incurred but notreported claims by Euroins Bulgaria and Euroins Romania in the six months ended 30 June 2015, as a result ofthe increase in GWP.

For the six months ended 30 June 2016, the Group recorded changes in the reinsurers’ share in the other reservesof BGN 26.8 million, as compared to no such change in the corresponding period of 2015. The recognition ofchanges in the reinsurers’ share in the other reserves for the six months ended 30 June 2016 was primarily due tothe claims development of Euroins Bulgaria and Euroins Romania, which, in turn, led to a release of other reservesand a corresponding release in the reinsurers’ share in such reserves.

105

Premiums ceded to reinsurers were BGN 94.6 million for the six months ended 30 June 2016, as compared toBGN 76.7 million for the corresponding period of 2015, reflecting an increase of BGN 17.9 million, or 23.3%.This increase was primarily due to the increase in the GWP by Euroins Bulgaria and Euroins Romania, which, inturn, resulted in an increase in premiums due to reinsurers.

Other expenses were BGN 49.8 million for the six months ended 30 June 2016, as compared to BGN 11.4 millionfor the corresponding period of 2015, reflecting an increase of BGN 38.4 million, or 338.2%. This increase wasprimarily due to an increase in non-collected insurance premiums written off by Euroins Bulgaria and EuroinsRomania as a result of the adoption of a more conservative write-off policy for overdue receivables by the EuroinsGroup.

Cost of Cars and Spare Parts Sold

The Group’s cost of cars and spare parts sold relates to expenses incurred by the Avto Union Group. For the sixmonths ended 30 June 2016, the Group’s total cost of cars and spare parts sold was BGN 65.7 million, as comparedto BGN 69.3 million for the corresponding period of 2015, reflecting a decrease of BGN 3.6 million, or 5.2%.This decrease was primarily due to a 3.9% decrease in car and spare part sales from BGN 76.6 million for the sixmonths ended 30 June 2015 to BGN 73.7 million for the corresponding period of 2016.

Leasing Expenses

The Group’s leasing financial expenses are derived from the leasing activities undertaken by the ELG Group. Thetable below sets forth a breakdown of the Group’s financial expenses from leasing services for the periodsindicated:

For the six months ended30 June

% change betweenthe six months

ended30 June

2015 and 20162016 2015(BGN thousands)

Interest expenses ....................................................... (1,966) (2,294) (14.3)Foreign exchange losses............................................ (20) (16) 25.0Other expenses .......................................................... (177) (161) 9.9

Total ......................................................................... (2,163) (2,471) (12.5)

For the six months ended 30 June 2016, the Group’s total leasing expenses were BGN 2.2 million, as comparedto BGN 2.5 million for the corresponding period of 2015, reflecting a decrease of BGN 0.3 million, or 12.5%.This decrease was primarily due to a BGN 0.3 million, or 14.3%, decrease in interest expenses as a result of theentry into of new funding at lower interest rates and an overall reduction in the ELG Group’s debt exposure.

Financial Expenses from Asset Management and Brokerage

The Group’s financial expenses for asset management and brokerage are derived from the financial services andinvestment intermediation activities undertaken by EF. The table below sets forth a breakdown of the Group’sfinancial expenses from asset management and brokerage for the periods indicated:

For the six months ended30 June

% change betweenthe six months

ended30 June

2015 and 20162016 2015(BGN thousands)

Interest expenses ........................................................ (64) (1,441) (95.6)Negative result from sales of financial instruments.... (1,338) (2,481) (46.1)Foreign exchange losses............................................. (3,456) (1,971) 75.3Other expenses ........................................................... (58) (54) 7.4

Total .......................................................................... (4,916) (5,947) (17.3)

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For the six months ended 30 June 2016, the Group’s total financial expenses for asset management and brokeragewere BGN 4.9 million, as compared to BGN 5.9 million for the corresponding period of 2015, reflecting a decreaseof BGN 1.0 million, or 17.3%. This decrease was primarily due to the BGN 1.4 million, or 95.6%, decrease ininterest expenses, which was, in turn due to the reduction in the portion of EF’s liabilities structured as fixedincome instruments, and the BGN 1.1 million, or 46.1%, decrease in negative results from sales of financialinstruments, which was, in turn, due to more favourable market prices in the six months ended 30 June 2016, ascompared to the corresponding period of 2016. These decreases were partially offset by the BGN 1.5 millionincrease in foreign exchange losses as a result of increased foreign exchange trading by EF.

Financial Expenses for the Activities of the Parent Company

For the six months ended 30 June 2016, the Group recognised financial expenses of the parent company ofBGN 0.9 million, which were related to negative results from sales of financial instruments. The Group did notrecognise financial expenses for the activities of the parent company for the six months ended 30 June 2015.

Expenses from Operating Activities

As a result of the foregoing, the Group’s total expenses from operating activities were BGN 461.2 million for thesix months ended 30 June 2016, as compared to BGN 460.2 million for the corresponding period of 2015,reflecting an increase of BGN 1.0 million, or 0.2%.

Gross Profit

As a result of all of the foregoing, the Group recorded a gross profit of BGN 53.9 million for the six months ended30 June 2016, as compared to BGN 32.0 million for the corresponding period of 2015.

Other Income/Expenses

The Group’s other income is comprised of other income from the automotive business and asset management andbrokerage services, and the Group’s other expenses are primarily comprised of other expenses from leasingservices. For the six months ended 30 June 2016, the Group’s total other income/expenses comprised an expenseof BGN 3.2 million, as compared to an expense of BGN 1.3 million for the corresponding period of 2015,reflecting an increase in other expenses of BGN 1.9 million, or 143.9%. The increase in expense was primarilydue to a BGN 1.9 million, or 140.9%, increase in other leasing expenses as a result of an increase in sales ofvehicles returned from operating leases by ELG’s subsidiary EuroLease Rent-a-car.

Other Operating Expenses

The table below sets forth a breakdown of the Group’s operating expenses for the periods indicated:

For the six months ended30 June

% change betweenthe six months

ended30 June

2015 and 20162016 2015(BGN thousands)

Expenses on materials ............................................... (1,149) (1,263) (9.0)Expenses on hired services......................................... (8,356) (10,770) (22.4)Employee benefits expense ........................................ (12,207) (10,795) 13.1Other expenses ........................................................... (2,486) (2,031) 22.4

Total .......................................................................... (24,198) (24,859) (2.7)

For the six months ended 30 June 2016, the Group’s total operating expenses were BGN 24.2 million, as comparedto BGN 24.9 million for the corresponding period of 2015, reflecting a decrease of BGN 0.7 million, or 2.7%.This decrease was primarily due to the BGN 2.4 million, or 22.4%, decrease in expenses on hired services, whichwas, in turn, primarily due to the BGN 1.3 million, or 37.6%, decrease in expenses on hired services of theinsurance business (i.e., the Euroins Group) and the BGN 0.04 million, or 0.7%, decrease in expenses on hiredserves of the automotive business (i.e., the Avto Union Group). The decrease in total operating expenses waspartially offset by the BGN 1.4 million increase in employee benefits expense, which was primarily due to the

107

BGN 1.4 million increase in employee benefits expense of the insurance business. See Note 13 to the Issuer’sInterim Financial Statements, incorporated by reference in this Base Prospectus.

EBITDA

As a result of the foregoing, the Group’s EBITDA for the six months ended 30 June 2016 was BGN 26.5 million,as compared to BGN 5.8 million for the corresponding period of 2015, reflecting an increase of BGN 20.7 million,or 358.5%.

Financial Expenses

For the six months ended 30 June 2016, the Group’s total financial expenses were BGN 6.3 million, as comparedto BGN 5.0 million for the corresponding period of 2015, reflecting an increase of BGN 1.4 million, or 27.1%.This increase was primarily due to the BGN 1.4 million, or 30.8%, increase in interest expenses, which was, inturn, primarily due to an increase in parent company interest expenses as a result of the entry into of shareholderloans in connection with the capital increase of EIG in the six months ended 30 June 2016. See “PrincipalShareholders and Related Party Transactions—Related Party Transactions”.

Financial Revenue

The Group’s financial revenue is comprised of interest income earned by the automotive business. For each of thesix months ended 30 June 2016 and 2015, the Group’s total financial revenue was BGN 0.1 million.

Foreign Exchange Gains/Losses (net)

The Group’s foreign exchange gains and losses are those incurred by the parent company. For the six monthsended 30 June 2016, the Group’s total foreign exchange losses were BGN 3,000, as compared to BGN 1,000 forthe corresponding period of 2015, reflecting an increase of BGN 2,000, or 200.0%.

EBTDA

As a result of the foregoing, the Group’s EBTDA (earnings before taxes, depreciation and amortisation) for thesix months ended 30 June 2016 was BGN 20.3 million, as compared to BGN 0.9 million for the correspondingperiod of 2015, reflecting an increase of BGN 19.4 million, or 2,111.1%.

Depreciation and amortization

The table below sets forth a breakdown of the Group’s depreciation for the periods indicated:

For the six months ended30 June

% change betweenthe six months

ended30 June

2015 and 20162016 2015(BGN thousands)

Insurance business..................................................... (728) (725) 0.4Automotive business ................................................. (1,274) (1,182) 7.8Leasing services ........................................................ (1,365) (1,691) (19.3)Asset management and brokerage services ............... (23) (20) 15.0Parent company......................................................... (5) (6) (16.7)

Total ......................................................................... (3,395) (3,624) (6.3)

The Group’s total depreciation expenses were BGN 3.4 million for the six months ended 30 June 2016, ascompared to BGN 3.6 million for the corresponding period of 2015, reflecting a decrease of BGN 0.2 million, or6.3%. This decrease was primarily due to the BGN 0.3 million decrease in depreciation expenses attributable toleasing services.

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EBT

As a result of the foregoing, the Group’s EBT (earnings before taxes) for the six months ended 30 June 2016 wasBGN 16.9 million, as compared to a loss of BGN 2.7 million for the corresponding period of 2015.

Taxes

The table below sets forth a breakdown of the Group’s taxes for the periods indicated:

For the six months ended30 June

% change betweenthe six months

ended30 June

2015 and 20162016 2015(BGN thousands)

Income tax expense ................................................... (218) (2)

Deferred tax............................................................... 229 — —

Total ......................................................................... 11 (2) —

For the six months ended 30 June 2016, the Group’s total tax income was BGN 11,000, as compared to a taxexpense of BGN 2,000 for the corresponding period of 2015.

Net Income/Loss for the Period

As a result of all of the foregoing, the Group’s net income for the six months ended 30 June 2016 was BGN 16.9million, as compared to a net loss of BGN 2.7 million for the corresponding period of 2015.

109

Results of Operations for the year ended 31 December 2015, as compared to the year ended 31 December2014

The table below sets forth information derived from the Group’s consolidated statement of profit or loss for theperiods indicated:

For the year ended31 December

% change betweenthe year ended31 December

2014 and 20152015 2014(1)

(BGN thousands)

Insurance revenue...................................................... 736,898 405,243 81.8Car sales revenue....................................................... 151,930 136,915 11.0Leasing revenue ........................................................ 21,942 17,793 23.3Revenue from asset management and brokerage....... 13,705 11,001 24.6Revenue from the activities from the parentcompany.................................................................... 5,234 6,713 (22.0)Revenues from operating activities ........................ 929,709 577,665 60.9Insurance expenses.................................................... (818,527) (394,141) 107.7Cost of cars and spare parts sold ............................... (131,612) (117,131) 12.4Leasing financial expenses ........................................ (5,497) (6,078) (9.6)Financial expenses for asset management andbrokerage................................................................... (12,350) (9,493) 30.1Financial expenses for the activities of the parentcompany.................................................................... — (19) —

Expenses for operating activities............................ (967,986) (526,862) 83.7Gross profit .............................................................. (38,277) 50,803 —Other income expenses.............................................. (3,381) (2,055) 64.5Other operating expenses .......................................... (56,536) (52,898) 6.9EBITDA ................................................................... (98,194) (4,150) 2266.1Financial expenses .................................................... (10,270) (6,564) 56.5Financial revenue ...................................................... 399 244 63.5Foreign exchange gains/losses .................................. (10) (7) 42.9EBTDA..................................................................... (108,075) (10,477) 931.5

Depreciation and amortization .................................. (7,343) (6,922) 6.1EBT........................................................................... (115,418) (17,399) 563.4

Taxes ......................................................................... 16,215 (562) —

Net income/loss for the period ................................ (99,203) (17,961) 452.3

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Insurance Revenue

The table below sets forth a breakdown of the Group’s insurance revenue for the years indicated:

For the year ended31 December

% change betweenthe year ended31 December

2014 and 20152015 2014(1)

(BGN thousands)

Gross premiums written from insurance ................... 448,570 305,062 47.0Gross premiums written from health insurance......... 1,557 3,343 (53.4)Gross premiums written from life insurance ............. 2,201 2,484 (11.4)Received recoveries from reinsurers ......................... 126,113 14,024 799.3Positive change in the gross provision for unearnedpremiums and unexpired risk reserve........................ — 161 —Positive change in reinsurers’ share in unearnedpremium reserve ....................................................... 16,199 5,823 178.2Reinsurers’ share in the change in the other reserves 105,335 21,543 389.0Positive change in other technical reserves ............... — 30,547 —Recourse income ....................................................... 9,638 5,385 79.0Fees and commissions income .................................. 5,614 2,815 99.4Investment income .................................................... 18,383 11,096 65.7Other revenue............................................................ 3,288 2,960 11.1

Total ......................................................................... 736,898 405,243 81.8

_______Note:(1) Restated. See “—Restatements and Reports” and Note 46 to the Issuer’s 2015 Financial Statements.

For the year ended 31 December 2015, the Group’s total insurance revenue was BGN 736.9 million, as comparedto BGN 405.2 million for the year ended 31 December 2014, reflecting an increase of BGN 331.7 million, or81.8%. This increase was primarily due to the BGN 143.5 million (or 47.0%) increase in gross premiums writtenfrom insurance, the BGN 112.1 million (or 799.3%) increase in received recoveries from reinsurers and theBGN 83.8 million (or 389.0%) increase in reinsurers’ share in the change in the other reserves. These increaseswere only partially offset by the non-recording of positive change in other technical reserves for the year ended31 December 2015, as compared to BGN 30.5 million for the year ended 31 December 2014.

The increase in gross premiums written from insurance, which increased to BGN 448.6 million for the year ended31 December 2015, as compared to BGN 305.1 million for the year ended 31 December 2014, was primarily dueto increases in GWP by Euroins Romania. In 2015, Euroins Romania had GWP of €162.5 million (approximately70.2% of the Euroins Group’s total GWP), as compared to €108.3 million in 2014.

The increase in received recoveries from reinsurers, which increased to BGN 126.1 million for the year ended 31December 2015, as compared to BGN 14.0 million for the year ended 31 December 2014, was primarily due tothe growth of GWP by Euroins Romania, which has, in turn, resulted in increased claims and, in turn, increasedclaims under Euroins Romania’s reinsurance contracts. In addition, the structure of the Euroins Group’sreinsurance contracts changed in 2015, as compared to 2014, as a result of the entry into of new reinsurance treatycontracts by Euroins Bulgaria and Euroins Romania, which contributed to the increase in received recoveries frominsurers in 2015.

The increase in reinsurers’ share in the change in other recoveries, which increased to BGN 105.3 million for theyear ended 31 December 2015, as compared to BGN 21.5 million for the year ended 31 December 2014, wasprimarily due to the same reasons.

For the year ended 31 December 2015, the Group did not record any positive change in other technical reserves.For the year ended 31 December 2014, the Group recorded BGN 30.5 million in positive change in other technicalreserves. This was primarily due to a non-recurring increase in technical reserves in 2015, which was triggered bythe growth in GWP of the Euroins Group, as well as preparatory measures taken in advance of the introduction ofSolvency II. See “—Main Factors Affecting Results of Operations and Liquidity—Maintenance of Reserves” and“—Main Factors Affecting Results of Operations and Liquidity—Regulatory Compliance and Intervention”.

111

Car Sales Revenue

The table below sets forth a breakdown of the Group’s revenues from car sales and after sales for the yearsindicated:

For the year ended31 December

% change betweenthe year ended31 December

2014 and 20152015 2014(BGN thousands)

Revenue from sale of cars and spare parts................. 143,656 131,080 9.6Revenue from after sales and rent-a-car services ...... 6,720 4,835 39.0

Revenue from sale of investments............................. 1,554 1,000 55.4

Total ......................................................................... 151,930 136,915 11.0

For the year ended 31 December 2015, the Group’s total car sales revenue was BGN 151.9 million, as comparedto BGN 136.9 million for the year ended 31 December 2014, reflecting an increase of BGN 15.0 million, or 11.0%.This increase was primarily due to the BGN 12.6 million, or 9.6%, increase in revenue from sales of cars andspare parts as a result of the increased volume of sales by the Avto Union Group in 2015, as compared to 2014.

Revenue from Financial and Operating Leases

The table below sets forth a breakdown of the Group’s revenue from financial and operating leases for the yearsindicated:

For the year ended31 December

% change betweenthe year ended31 December

2014 and 20152015 2014(1)

(BGN thousands)

Revenue from services .............................................. 16,118 12,223 31.9Interest income.......................................................... 5,793 5,560 4.2Gains from sale of financial instruments ................... 9 10 (10.0)

Foreign exchange gains ............................................. 22 — —

Total ......................................................................... 21,942 17,793 23.3

_________Note:(1) Restated. See “—Restatements and Audit Reports”.

For the year ended 31 December 2015, the Group’s total leasing revenue was BGN 21.9 million, as compared toBGN 17.8 million for the year ended 31 December 2014, reflecting an increase of BGN 4.1 million, or 23.3%.This increase was primarily due to the BGN 3.9 million, or 31.9%, increase in revenue from services, as a resultof an increase in the volume of leases granted by the ELG Group in 2015, as compared to 2014.

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Revenue from Asset Management and Brokerage

The table below sets forth a breakdown of the Group’s revenue from asset management and brokerage for theyears indicated:

For the year ended31 December

% change betweenthe year ended31 December

2014 and 20152015 2014(BGN thousands)

Interest income........................................................... 1,978 2,138 (7.5)Dividend income ........................................................ 419 188 122.9Gains from sale of financial instruments .................... 5,159 7,054 (26.9)Foreign exchange gains .............................................. 5,318 986 439.4Other revenue............................................................. 831 635 30.9

Total .......................................................................... 13,705 11,001 24.6

For the year ended 31 December 2015, the Group’s total revenue from asset management and brokerage wasBGN 13.7 million, as compared to BGN 11.0 million for the year ended 31 December 2014, reflecting an increaseof BGN 2.7 million, or 24.6%. This increase was primarily due to the BGN 4.3 million, or 439.4%, increase inforeign exchange gains, which was, in turn, primarily due to increased foreign exchange trading by EF. Thisincrease was partially offset by the BGN 1.9 million, or 26.9%, decrease in gains from sale of financialinstruments, which was primarily due to the relative stability of market prices in 2015, as compared to 2014.

Revenue of the Parent Company

The Group’s revenue from the activities of the parent company is derived from the Issuer’s standalone activities,which include primarily investments in financial instruments. The table below sets forth a breakdown of theGroup’s revenue of the parent company for the years indicated:

For the year ended31 December

% change betweenthe year ended31 December

2014 and 20152015 2014(BGN thousands)

Gains from sale of financial instruments ................... — 6,016 —Interest revenue ......................................................... 695 697 (0.3)Other revenue............................................................ 4,539 — —

Total ......................................................................... 5,234 6,713 (22.0)

The main activity of the Issuer is the acquisition and management of shares in, and the financing of, itssubsidiaries. For the year ended 31 December 2015, the Group’s total revenue from the activities of the parentcompany was BGN 5.2 million, as compared to BGN 6.7 million for the year ended 31 December 2014, reflectinga decrease of BGN 1.5 million, or 22.0%. This decrease was primarily due to the non-recognition of gains fromsale of financial instruments for the year ended 31 December 2015, as compared to gains of BGN 6.0 million forthe year ended 31 December 2014, as a result of the Issuer not undertaking transactions with financial instrumentsin 2015. This non-recognition of gains from sale of financial instruments in 2015 was partially offset by therecognition of BGN 4.5 million in other revenue for the year ended 31 December 2015. The Group did notrecognise other revenue for the year ended 31 December 2014.

Revenues from Operating Activities

As a result of the foregoing, the Group’s total revenue from operating activities was BGN 929.7 million for theyear ended 31 December 2015, as compared to BGN 577.7 million for the year ended 31 December 2014,reflecting an increase of BGN 352.0 million, or 60.9%.

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Insurance Expenses

The table below sets forth a breakdown of the Group’s expenses from insurance business for the years indicated:

For the year ended31 December

% change betweenthe year ended31 December

2014 and 20152015 2014(1)

(BGN thousands)

Current year paid claims, claims handling andprevention expenses .................................................. (302,187) (216,142) 39.8Change in the outstanding claims provisions ............ (37,702) (4,654) 710.1Change in other reserves ........................................... (146,464) (20,432) 616.8Change in the reinsurers’ share in the other reserves — (30) —Premiums ceded to reinsurers.................................... (184,741) (13,657) 1,252.7Acquisition expenses................................................. (112,854) (86,484) 30.5Investment expenses.................................................. (10,601) (11,171) (5.1)Goodwill write-off .................................................... (802) — —Other expenses .......................................................... (23,176) (41,571) (44.2)

Total ......................................................................... (818,527) (394,141) 107.7

_________Note:(1) Restated. See “—Restatements and Audit Reports”.

For the year ended 31 December 2015, the Group’s total insurance expenses were BGN 818.5 million, ascompared to BGN 394.1 million for the year ended 31 December 2014, reflecting an increase of BGN 424.4million, or 107.7%. This increase was due to increases in all expenses, apart from other expenses and change inthe reinsurers’ share in the other reserves and investment expenses. The most notable increases in expenses werefor current year paid claims, claims handling and prevention expenses, change in other reserves and premiumsceded to reinsurers, as well as, to a lesser extent, change in the outstanding claims provisions and acquisitionexpenses.

Current year paid claims, claims handling and prevention expenses were BGN 302.2 million for the year ended31 December 2015, as compared to BGN 216.1 million for the year ended 31 December 2014, reflecting anincrease of BGN 86.0 million, or 39.8%. This increase was primarily due to the increase in the number of policiesunderwritten and subsequent claims thereunder, particularly, by Euroins Romania.

Change in other reserves was BGN 146.5 million for the year ended 31 December 2015, as compared to BGN20.4 million for the year ended 31 December 2014, reflecting an increase of BGN 126.0 million, or 616.8%. Thisincrease was primarily due to the required increase in gross technical reserves as a result of the increase in GWPby Euroins Romania. See “—Revenue from Insurance Business”. In 2015, gross technical reserves of EuroinsRomania increased by 87.8% to BGN 307.2 million, as compared to BGN 163.6 million for the year ended 31December 2014, while the Group’s total gross reserves increased by 63.7% to BGN 470.9 million, as comparedto BGN 287.7 million for the year ended 31 December 2014. In addition, the Euroins Group implemented a newreserves policy for all its subsidiaries as part of its preparation for the implementation of Solvency II, whichresulted in an overall increase in reserves when calculated on a consolidated basis. See “—Main Factors AffectingResults of Operations and Liquidity—Maintenance of Reserves”, “Critical Accounting Polices and Estimates—Insurance and Health Insurance Activity—Change in Accounting Policy” and “—Restatements and AuditReports”.

Premiums ceded to reinsurers were BGN 184.7 million for the year ended 31 December 2015, as compared toBGN 13.7 million for the year ended 31 December 2014, reflecting an increase of BGN 171.1 million, or1,252.7%. This increase was primarily due to the growth of GWP by Euroins Romania, which has, in turn, resultedin increased premiums due to reinsurers. In addition, the structure of the Euroins Group’s reinsurance contractschanged in 2015, as compared to 2014, as a result of the entry into of new reinsurance treaty contracts by EuroinsBulgaria and Euroins Romania.

114

Cost of Cars and Spare Parts Sold

For the year ended 31 December 2015, the Group’s total cost of cars and spare parts sold was BGN 131.6 million,as compared to BGN 117.1 million for the year ended 31 December 2014, reflecting an increase of BGN 14.5million, or 12.4%. This increase was primarily due to a 9.6% increase in sales of cars and spare parts from BGN131.1 million in 2014 to BGN 143.7 million in 2015.

Leasing Expenses

The Group’s leasing financial expenses are derived from the leasing activities undertaken by the ELG Group. Thetable below sets forth a breakdown of the Group’s financial expenses from leasing services for the years indicated:

For the year ended31 December

% change betweenthe year ended31 December

2014 and 20152015 2014(BGN thousands)

Interest expenses ....................................................... (4,907) (4,835) 1.5Foreign exchange losses............................................ (41) (42) (2.4)Other expenses .......................................................... (549) (1,201) (54.3)

Total ......................................................................... (5,497) (6,078) (9.6)

For the year ended 31 December 2015, the Group’s total leasing expenses were BGN 5.5 million, as compared toBGN 6.1 million for the year ended 31 December 2014, reflecting a decrease of BGN 0.6 million, or 9.6%. Thisdecrease was primarily due to a BGN 0.7 million, or 54.3%, decrease in other expenses as a result of a decreasein impairment recognised on charged lease receivables.

Financial Expenses from Asset Management and Brokerage

The table below sets forth a breakdown of the Group’s financial expenses from asset management and brokeragefor the years indicated:

For the year ended31 December

% change betweenthe year ended31 December

2014 and 20152015 2014(BGN thousands)

Interest expenses ........................................................ (1,566) (1,716) (8.7)Negative result from sales of financial instruments.... (5,400) (6,746) (20.0)Foreign exchange losses............................................. (5,265) (924) 469.8Other expenses ........................................................... (119) (107) 11.2

Total .......................................................................... (12,350) (9,493) 30.1

For the year ended 31 December 2015, the Group’s total financial expenses for asset management and brokeragewere BGN 12.4 million, as compared to BGN 9.5 million for the year ended 31 December 2014, reflecting anincrease of BGN 2.9 million, or 30.1%. This increase was primarily due to the BGN 4.3 million, or 469.8%,increase in foreign exchange losses as a result of increased foreign exchange trading by EF, which was onlypartially offset by the BGN 1.3 million, or 20.0%, decrease in negative results from the sales of financialinstruments as a result of more favourable market prices for financial instruments in EF’s portfolio in 2015, ascompared to 2014, as well as the BGN 0.2 million, or 8.7%, decrease in interest expenses.

Financial Expenses for the Activities of the Parent Company

For the year ended 31 December 2015, the Group did not record any financial expenses of the parent company.For the year ended 31 December 2014, the Group recorded financial expenses of the parent company ofBGN 19,000, which were related to negative results from sales of financial instruments.

115

Expenses from Operating Activities

As a result of the foregoing, the Group’s total expenses from operating activities were BGN 968.0 million for theyear ended 31 December 2015, as compared to BGN 526.9 million for the year ended 31 December 2014,reflecting an increase of BGN 441.1 million, or 83.7%.

Gross Profit

As a result of the foregoing, the Group recorded a gross loss of BGN 38.3 million for the year ended 31 December2015, as compared to gross profit of BGN 50.1 million for the year ended 31 December 2014.

Other Income/Expenses

For the year ended 31 December 2015, the Group’s total other income/expenses comprised an expense of BGN 3.4million, as compared to an expense of BGN 2.1 million for the year ended 31 December 2014, reflecting anincrease in other expenses of BGN 1.3 million, or 64.5%. The increase in expense was primarily due to a BGN 1.3million, or 62.4%, increase in other leasing expenses as a result of sales of vehicles returned from operating leasesby ELG’s subsidiary, Eurolease Rent a Car.

Other Operating Expenses

The table below sets forth a breakdown of the Group’s operating expenses for the periods indicated:

For the year ended31 December

% change betweenthe year ended31 December

2014 and 20152015 2014(BGN thousands)

Expenses on materials ............................................... (2,964) (2,712) 9.3Expenses on hired services......................................... (23,137) (22,437) 3.1Employee benefits expense ........................................ (24,512) (21,865) 12.1Other expenses ........................................................... (5,923) (5,884) 0.7

Total .......................................................................... (56,536) (52,898) 6.9

For the year ended 31 December 2015, the Group’s total operating expenses were BGN 56.5 million, as comparedto BGN 52.9 million for the year ended 31 December 2014, reflecting an increase of BGN 3.6 million, or 6.9%.This increase was primarily due to the BGN 2.6 million, or 12.1%, increase in employee benefits expense, whichwas primarily due to the BGN 1.8 million, or 22.9%, increase in employee benefits expense of the insurancebusiness (i.e., the Euroins Group) and the BGN 0.9 million, or 8.4%, increase in employee benefits expense of theautomotive business (i.e., the Avto Union Group). See Note 13 to the Issuer’s 2015 Financial Statementsincorporated by reference in this Base Prospectus.

EBITDA

As a result of the foregoing, the Group’s EBITDA for the year ended 31 December 2015 was a loss of BGN 98.2million, as compared to a loss of BGN 4.2 million for the year ended 31 December 2014, reflecting an increasedloss of BGN 94.0 million, or 2,266.1%.

Financial Expenses

For the year ended 31 December 2015, the Group’s total financial expenses were BGN 10.3 million, as comparedto BGN 6.6 million for the year ended 31 December 2014, reflecting an increase of BGN 3.7 million, or 56.5%.This increase was primarily due to the BGN 3.6 million, or 59.9%, increase in interest expenses, which was, inturn, primarily due to the growth in insurance business interest expenses. For the year ended 31 December 2015,insurance business financial expenses accounted for 29.8% of total financial expenses (as compared to 9.4% in2014), automotive business financial expenses accounted for 18.7% of total financial expenses (as compared to28.0% in 2014) and parent company financial expenses accounted for 51.5% of total financial expenses (ascompared to 62.5% in 2014). The increase in insurance business interest expense was primarily due to the interest

116

payments due under EIG’s €10 million subordinated notes issued in December 2014. See “—Debt Obligations—Bond Issues”.

Financial Revenue

For the year ended 31 December 2015, the Group’s total financial revenue was BGN 0.4 million, as compared toBGN 0.2 million for the year ended 31 December 2014, reflecting an increase of BGN 0.2 million, or 63.5%.

Foreign Exchange Gains/Losses (net)

For the year ended 31 December 2015, the Group’s total foreign exchange losses were BGN 10,000, as comparedto BGN 7,000 for the year ended 31 December 2014, reflecting an increase of BGN 3,000, or 42.9%.

EBTDA

As a result of the foregoing, the Group’s EBTDA (earnings before taxes, depreciation and amortisation) for theyear ended 31 December 2015 was a loss of BGN 108.1 million, as compared to a loss of BGN 10.5 million,reflecting an increased loss of BGN 97.6 million, or 931.5%.

Depreciation and amortization

The table below sets forth a breakdown of the Group’s depreciation for the years indicated:

For the year ended31 December

% change betweenthe year ended31 December

2014 and 20152015 2014(BGN thousands)

Insurance business..................................................... (1,471) (1,513) (2.8)Automotive business ................................................. (2,540) (2,133) 19.1Leasing services ........................................................ (3,275) (3,224) 1.6Asset management and brokerage services ............... (45) (41) 9.8Parent company......................................................... (12) (11) 9.1

Total ......................................................................... (7,343) (6,922) 6.1

The Group’s total depreciation expenses were BGN 7.3 million for the year ended 31 December 2015, ascompared to BGN 6.9 million for the year ended 31 December 2014, reflecting an increase of BGN 0.4 million,or 6.1%. This increase was primarily due to the BGN 0.4 million increase in depreciation expenses attributable tothe automotive business.

EBT

As a result of the foregoing, the Group’s EBT for the year ended 31 December 2015 was a loss ofBGN 115.4 million, as compared to a loss of BGN 17.4 million, reflecting an increased loss of BGN 98.0 million,or 563.4%.

Taxes

The table below sets forth a breakdown of the Group’s taxes for the years indicated:

For the year ended31 December

% change betweenthe year ended31 December

2014 and 20152015 2014(BGN thousands)

Income tax expense ................................................... (234) (341) (31.4)

Deferred tax............................................................... 16,449 (221) —

Total ......................................................................... 16,215 (562) —

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For the year ended 31 December 2015, the Group’s total tax income was BGN 16.2 million, as compared to a taxexpense of BGN 0.6 million for the year ended 31 December 2014. The tax income for the year ended 31December 2015 was primarily due to the recognition of BGN 16.4 million of deferred tax, which was primarilyderived from the insurance business. See Note 17 to the Issuer’s 2015 Financial Statements.

Net Income/Loss for the Period

As a result of the foregoing, the Group’s had a net loss of BGN 99.2 million for the year ended 31 December2015, as compared to a net loss of BGN 18.0 million for the year ended 31 December 2014, reflecting an increasednet loss of BGN 81.2 million, or 452.3%.

Segment Reporting

For the purposes of facilitating the management of the overall activities of the Group, the Group is organisedalong its principal business lines on the basis of products and services rendered. As a result, the Group’s operatingsegments include the following:

Insurance and Health Insurance

• Insurance Services

• Health Insurance Services

• Life Insurance Services

Financial Services

• Leasing Services (including leasing services, rent-a-car services and sales of used cars)

• Investment Intermediation

Automobiles

• Sales of New Cars

• Car Repair Services

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The tables below sets forth the consolidated statement of profit or loss, by business segment, for the periods indicated:

ConsolidatedInsuranceBusiness Automotive

LeasingBusiness

AssetManagement

and BrokerageParent

Company Elimination

For the six months ended 30 June 2016 (BGN thousands)

Insurance revenue.................................................. 408,692 408,990 — — — — (298)Car sales revenue................................................... 75,904 — 79,230 — — — (3,326)Leasing revenue .................................................... 9,144 — — 9,869 — — (725)Revenue from asset management and brokerage... 5,548 — — — 5,984 — (436)

Revenue from the activities from the parentcompany................................................................ 15,801 — — — — 16,144 (343)

Revenues from operating activities .................... 515,089 408,990 79,230 9,869 5,984 16,144 (5,128)

Insurance expenses................................................ (387,506) (391,386) — — — — 3,880Cost of cars and spare parts sold ........................... (65,736) — (65,737) — — — 1Leasing financial expenses .................................... (2,163) — — (2,274) — — 111

Financial expenses for asset management andbrokerage............................................................... (4,916) — — — (4,916) — —Financial expenses for the activities of the parent

company................................................................ (851) — — — — (851) —Expenses for operating activities........................ (461,172) (391,386) (65,737) (2,274) (4,916) (851) 3,992

Gross profit .......................................................... 53,917 17,604 13,493 7,595 1,068 15,293 (1,136)

Other income/expenses ......................................... (3,215) — 4 (3,219) — — —Other operating expenses ...................................... (24,198) (9,042) (10,985) (2,933) (804) (977) 543EBITDA ............................................................... 26,504 8,562 2,512 1,443 264 14,316 (593)Financial expenses ................................................ (6,324) (1,198) (1,156) — — (4,382) 412Financial revenue .................................................. 99 — 163 — — — (64)Foreign exchange gains/losses .............................. (3) — — — — (3) —EBTDA................................................................. 20,276 7,364 1,519 1,443 264 9,931 (245)Depreciation and amortization .............................. (3,395) (728) (1,274) (1,365) (23) (5) —EBT....................................................................... 16,881 6,636 245 78 241 9,926 (245)Taxes ..................................................................... 11 13 — — (2) — —Net income/loss for the period ............................ 16,892 6,649 245 78 239 9,926 (245)

119

ConsolidatedInsuranceBusiness Automotive

LeasingBusiness

AssetManagement

and BrokerageParent

Company Elimination

For the six months ended 30 June 2015 (BGN thousands)

Insurance revenue.................................................. 397,453 397,714 — — — — (261)Car sales revenue................................................... 79,048 — 82,625 — — — (3,577)Leasing revenue .................................................... 8,478 — — 9,275 — — (797)Revenue from asset management and brokerage... 6,790 — — — 7,009 — (219)

Revenue from the activities from the parentcompany................................................................ 345 — — — — 1,658 (1,313)

Revenues from operating activities .................... 492,114 397,714 82,625 9,275 7,009 1,658 (6,167)

Insurance expenses................................................ (382,406) (388,216) — — — — 5,810Cost of cars and spare parts sold ........................... (69,333) — (69,334) — — — 1Leasing financial expenses .................................... (2,471) — — (2,585) — — 114

Financial expenses for asset management andbrokerage............................................................... (5,947) — — — (5,948) — 1Financial expenses for the activities of the parent

company................................................................ — — — — — — —Expenses for operating activities........................ (460,157) (388,216) (69,334) (2,585) (5,948) — 5,926

Gross profit .......................................................... 31,957 9,498 13,291 6,690 1,061 1,658 (241)

Other income/expenses ......................................... (1,318) — 4 (1,336) 14 — —Other operating expenses ...................................... (24,859) (9,097) (11,660) (3,644) (708) (435) 685EBITDA ............................................................... 5,780 401 1,635 1,710 367 1,223 444Financial expenses ................................................ (4,974) (2,088) (1,244) — — (2,940) 1,298Financial revenue .................................................. 112 — 337 — — — (225)Foreign exchange gains/losses .............................. (1) — — — — (1) —EBTDA................................................................. 917 (1,687) 728 1,710 367 (1,718) 1,517Depreciation and amortization .............................. (3,624) (725) (1,182) (1,691) (20) (6) —EBT....................................................................... (2,707) (2,412) (454) 19 347 (1,724) 1,517Taxes ..................................................................... (2) — — — (2) — —Net income/loss for the period ............................ (2,709) (2,412) (454) 19 345 (1,724) 1,517

120

ConsolidatedInsuranceBusiness Automotive

LeasingBusiness

AssetManagement

and BrokerageParent

Company Elimination

For the year ended 31 December 2015 (BGN thousands)

Insurance revenue.................................................. 736,898 737,526 — — — — (628)Car sales revenue................................................... 151,930 — 162,289 — — — (10,359)Leasing revenue .................................................... 21,942 — — 23,553 — — (1,611)Revenue from asset management and brokerage... 13,705 — — — 14,129 — (424)

Revenue from the activities from the parentcompany................................................................ 5,234 — — — — 7,678 (2,444)

Revenues from operating activities .................... 929,709 737,526 162,289 23,553 14,129 7,678 (15,466)

Insurance expenses................................................ (818,527) (826,981) — — — — 8,454Cost of cars and spare parts sold ........................... (131,612) — (131,618) — — — 6Leasing financial expenses .................................... (5,497) — — (5,771) — — 274

Financial expenses for asset management andbrokerage............................................................... (12,350) — — — (12,352) — 2Financial expenses for the activities of the parent

company................................................................ — — — — — — —Expenses for operating activities........................ — (826,981) (131,618) (5,771) (12,352) — 8,736

Gross profit .......................................................... (38,277) (89,455) 30,671 17,782 1,777 7,678 (6,730)

Other income/expenses ......................................... (3,381) — — (5,668) 14 — 2,273Other operating expenses ...................................... (56,536) (21,652) (25,791) (8,233) (1,462) (1,159) 1,761EBITDA ............................................................... (98,194) (111,107) 4,880 3,881 329 6,519 (2,696)Financial expenses ................................................ (10,270) (4,598) (2,143) — — (6,090) 2,561Financial revenue .................................................. 399 — 835 — — — (436)Foreign exchange gains/losses .............................. (10) — — — — (10) —EBTDA................................................................. (108,075) (115,705) 3,572 3,881 329 419 (571)Depreciation and amortization .............................. (7,343) (1,471) (2,540) (3,275) (45) (12) —EBT....................................................................... (115,418) (117176) 1,032 606 284 407 (571)Taxes ..................................................................... 16,215 16,424 (133) (37) (39) — —Net income/loss for the period ............................ (99,203) (100,752) 899 569 245 407 (571)

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ConsolidatedInsuranceBusiness Automotive

LeasingBusiness

AssetManagement

and BrokerageParent

Company Elimination

For the year ended 31 December 2014 (BGN thousands)

Insurance revenue.................................................. 405,243 405,875 — — — — (632)Car sales revenue................................................... 136,915 — 143,468 — — — (6,553)Leasing revenue .................................................... 17,793 — — 19,615 — — (1,822)Revenue from asset management and brokerage... 11,001 — — — 11,505 — (504)Revenue from the activities from the parentcompany................................................................ 6,713 — — — — 7,844 (1,131)Revenues from operating activities .................... 577,665 405,875 143,468 19,615 11,505 7,844 (10,642)

Insurance expenses................................................ (394,141) (400,227) — — — — 6,086Cost of cars and spare parts sold ........................... (117,131) — (117,134) — 3Leasing financial expenses .................................... (6,078) — — (6,311) — — 233Financial expenses for asset management andbrokerage............................................................... (9,493) — — — (9,494) — 1Financial expenses for the activities of the parentcompany................................................................ (19) — — — — (19) —Expenses for operating activities........................ (526,862) (400,227) (117,134) (6,311) (9,494) (19) 6,323

Gross profit .......................................................... 50,803 5,648 26,334 13,304 2,011 7,825 (4,319)

Other income/expenses ......................................... (2,055) — 34 (2,090) 1 — —Other operating expenses ...................................... (52,898) (19,925) (23,347) (8,539) (1,337) (1 069) 1,319EBITDA ............................................................... (4,150) (14,277) 3,021 2,675 675 6,756 (3,000)Financial expenses ................................................ (6,564) (1,577) (2,214) — — (5,073) 2,300Financial revenue .................................................. 244 — 748 — — — (504)Foreign exchange gains/losses .............................. (7) — — — — (7) —EBTDA................................................................. (10,477) (15,854) 1,555 2,675 675 1,676 (1,204)Depreciation and amortization .............................. (6,922) (1,513) (2,133) (3,224) (41) (11) —EBT....................................................................... (17,399) (17,367) (578) (549) 634 1,665 (1,204)Taxes ..................................................................... (562) (326) (184) 11 (63) — —Net income/loss for the period ............................ (17,961) (17,693) (762) (538) 571 1,665 (1,204)

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Liquidity and Capital Resources

Cash Flows

The table below sets forth certain information derived from the Group’s consolidated statement of cash flows for the yearsindicated:

For the six months ended 30June

For the year ended31 December

2016 2015

% changebetween thesix months

ended 30 June2015 and 2016 2015 2014

% changebetween the

year ended 31December 2014

and 2015

(BGN thousands)(BGN

thousands)

Net cash flowsused inoperatingactivities .......... 3,384 (30,530) 111.1 (24,785) (55,382) (55.2)Net cash flowsfrom/used ininvestingactivities .......... (32,263) (33,316) (3.2) (40,091) 70,905 (156.5)Net cash flowsfrom financingactivities .......... 60,408 31,443 92.1 68,309 13,567 403.5

Net Cash Flows from/used in Operating Activities

Net cash flows from operating activities were BGN 3.4 million for the six months ended 30 June 2016, as compared tonet cash flows used in operating activities of BGN 30.5 million for the corresponding period of 2015. The net cash flowsfrom operating activities for the six months ended 30 June 2016, were primarily due to the BGN 3.2 million of cashgenerated from operations, as compared to a BGN 31.4 million loss in the corresponding period of 2015. The cashgenerated from operations for the six months ended 30 June 2016 was primarily due to the BGN 7.4 million, or 274.1%,increase in operating profit before change in working capital and the BGN 114.0 million, or (88.2)%, decrease in cashused in changes in trade and other receivables for the six months ended 30 June 2016, as compared to the correspondingperiod of 2015. These increases were partially offset by the BGN 5.5 million in cash used in change in trade and otherpayables and other adjustments in the six months ended 30 June 2016, as compared to BGN 88.5 million in cash fromsuch activities in the corresponding period of 2015.

Net cash flows used in operating activities were BGN 24.8 million for the year ended 31 December 2015, as compared toBGN 55.4 million for the year ended 31 December 2014, reflecting a decrease of net cash flows used in operating activitiesof BGN 30.6 million, or 55.2%. This decrease was primarily due to the BGN 216.1 million, or 613.3%, increase in cashfrom changes in trade and other payables and other adjustments, which was partially offset by the BGN 176.6 million, or243.9%, increase in cash used in changes in trade and other receivables.

Net Cash Flows from Investing Activities

Net cash flows used in investing activities were BGN 32.3 million in the six months ended 30 June 2016, as compared toBGN 33.3 million in the corresponding period of 2015, reflecting a decrease of BGN 1.1 million, or 3.2% This decreasewas primarily due to the BGN 194.2 million, or 299.0%, increase in net cash flows from the purchase of investments,which was, in turn, due to sales by the insurance business. This increase was partially offset by the BGN 186.7 million,or 431.2%, increase in net cash flows used in the purchase of investments, which was, in turn, due to purchases by theinsurance business.

Net cash flows used in investing activities were BGN 40.1 million for the year ended 31 December 2015, as compared tonet cash flows from investing activities of BGN 70.9 million Net cash flows used in investing activities in 2015 primarilycomprised cash flows used in the purchase of investments (BGN 111.3 million) and repayment of loans, includingfinancial leases (BGN 66.0). Net cash flows from investing activities in 2014 primarily comprised cash flows from salesof investments (BGN 129.6 million), partially offset by repayment of loans, including financial leases (BGN 49.5 million).

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Net Cash Flows from Financing Activities

Net cash flows from financing activities were BGN 60.4 million for the six months ended 30 June 2016, as compared toBGN 31.4 million for the corresponding period of 2015, reflecting an increase of BGN 29.0 million, or 92.1%. Thisincrease was primarily due to; (i) the BGN 31.9 million, or 54.5%, decrease in net cash flows used in the repayment ofloans, which was, in turn, primarily a result of repayments by the Issuer of BGN 0.5 million for the six months ended 30June 2016, as compared to the repayment by the Issuer of BGN 10.0 million due under the Mezzanine Loan (as definedbelow) in the corresponding period of 2015, as well as a BGN 3.1 million decrease in cash used for the repayment ofloans by the ELG Group in the six months ended 30 June 2016, as compared to the corresponding period of 2015.

Net cash flows from financing activities were BGN 68.3 million for the year ended 31 December 2015, as compared toBGN 13.6 million for the year ended 31 December 2014, reflecting an increase of BGN 54.7 million, or 403.5%. Thisincrease was primarily due to the BGN 76.3 million, or 66.6%, increase in cash flows from proceeds from loans, partiallyoffset by the BGN 18.6 million, or 18.7%, increase in cash flows used in the repayment of loans, as well as the BGN 1.3million, or 104.8%, increase in cash flows used for the repayment of financial leases and the BGN 2.0 million, or 58.3%,increase in payment of interest and commission on loans. The increase in cash flows from proceeds from loans in 2015,as compared to 2014, primarily reflected loans entered into in connection with the capital increase of the Euroins Groupin 2015, while the increase in cash flows used for the repayment of financial leases in 2015, as compared to 2014, reflecteda BGN 1.4 million increase in cash used for the repayment of financial leases of Auto Union. The increase in payment ofinterest and commission on loans related to the higher level of new borrowings in 2015, as compared to 2014. See “—Debt Obligations”.

Capital Expenditure

The following table sets forth certain information regarding the Group’s capital expenditures or the periods indicated:

For the six months ended30 June

For the Year Ended 31December Change Between

2016 2015 2015 2014

Six monthsended 30

June 2016and 2015

12 monthsended 31

December2015 and

2014

(BGN ‘000) (%)

Euroins Group................................ 143 — 886 — — —Of which: — — —

Euroins Bulgaria ....................... 55 — 284 — — —Euroins Romania ....................... 80 — 409 — — —Euroins Skopje........................... — — 110 — — —Euroins Life ............................... 8 — 84 — — —

Avto Union Group ......................... 2,214 4,633 5,883 — (52.5) —Of which:

Showroom renovation ................ 814 247 643 — 229.6 —Showroom construction ............. 1,300 4,386 5,220 — (70.4) —IT software................................. — — 20 — —Other.......................................... 100 — — — — —

ELG Group .................................... — — — — — —EF................................................... — — — — — —

Capital expenditures incurred by the Euroins Group during the periods indicated were due to the purchase of IT softwarerequired for Solvency II accounting. In the six months ended 30 June 2016, capital expenditures incurred by the AvtoUnion Group primarily related to the renovations of showrooms in Bulgari (Sofia and Plovdiv) and Macedonia;construction of a new showroom in Sofia and the purchasing of equipment for a new the Avto Union Group servicebranch. In 2015, capital expenditures incurred by the Avto Union Group primarily related to the renovation of a Maseratishowroom, purchasing land plots and construction costs for a new showroom for the Nissan, Renault and Dacia brandsand information technology software purchases.

Debt Obligations

General

In recent years, in order to supplement the net cash generated by the Group’s operating activities, the Group has raisedfunding through short-term and long-term borrowings, including bank and non-bank loans and local and internationalbond issues.

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Bank and Non-Bank Loans

The Group’s total bank and non-bank loans were BGN 105.3 million as at 30 June 2016, as compared to BGN 111.7million as at 31 December 2015, reflecting a decrease of BGN 6.4 million, or 5.7%. The Group’s total bank and non-bankloans were BGN 128.6 million as at 31 December 2014, reflecting a decrease of BGN 16.9 million, or 13.2%, as comparedto 31 December 2015.

The following table sets forth the Group’s bank and non-bank loans by business line as at the dates indicated:

As at 30June 2016

As at 31 December % changebetween

31December2015 and30 June

2016

% changebetween

31December2014 and

20152015 2014(1)

(BGN thousands)

Insurance business .................................................. 9,736 6,119 15,093 59.1 (59.5)Automotive business ............................................... 19,143 21,623 13,945 (11.5) 55.1Leasing services ..................................................... 31,861 38,887 54,538 (18.1) (28.7)Parent company....................................................... 44,566 45,055 45,055 (1.1) 0.0

Total ....................................................................... 105,306 111,684 128,631 (5.7) (13.2)_________Note:(1) Restated. See “—Restatements and Audit Reports”.

Principal Debt Obligations of the Group

As at the date of this Base Prospectus, the Group had the following principal bank and non-bank loans:

• On 29 August 2008, the Issuer entered into a €15,000,000 loan facility with Accession II ScandinavianMezzanine AB (the “Mezzanine Loan”). This loan has been amended on a number of occasions, including, mostrecently on 24 February 2015. The Mezzanine Loan bears interest at a rate of 8.7% per annum, plus mandatorycosts. The Mezzanine Loan matures on 31 December 2017. As at 30 June 2016, the outstanding principal amountunder the Mezzanine Loan was €7.8 million (BGN 15.2 million). The Mezzanine Loan is secured by, inter alia:(i) a first ranking share pledge over 76,112,128 of the Issuer’s shares in the Guarantor; and (ii) a first rankingpledge over 4,500,000 of Starcom Holding AD’s (“Starcom”) shares in the Issuer. The Mezzanine Loan containscertain financial and other restrictive covenants (based on relevant defined terms, as set out therein), including,inter alia, that the Issuer must ensure that at the end of its financial year it has: (i) a ratio of consolidated net debtto consolidated EBITDA of not more than 4.5; (ii) shareholders’ equity of not less than BGN 180.0 million(€92.0 million); (iii) a ratio of consolidated debt to shareholders’ equity of not more than 0.75; and (iv) an interestcoverage ratio of consolidated EBIT to amounts payable of not more than 1.5, calculated on a rolling 12 monthsbasis.

• On 18 December 2014, the Issuer entered into a €15,000,000 loan facility with the IIB Loan. The IIB Loan bearsinterest at a rate equal to the sum of three month EURIBOR plus 7.5% per annum and matures on 18 December2021. As at 30 June 2016, the outstanding principal amount under the IIB Loan was €15.0 million (BGN 29.3million). The IIB Loan is secured by, inter alia: (i) a first ranking pledge over the rights of the Issuer to amountspayable to it under the related €15,000,000 intercompany loan agreement between the Issuer and the Guarantor;and (ii) a first ranking share pledge over 80,478,837 of the Issuer’s shares in the Guarantor. The IIB Loancontains certain financial and other restrictive covenants (based on relevant defined terms, as set out therein),including that the Issuer must maintain: (i) a ratio of net debt to consolidated EBITDA of less than 4.5; (ii) alevel of total equity less revaluation reserves of not less than BGN 180,000,000; (iii) a ratio of debt andobligations on bond issues to total equity of not more than 1.5; (iv) a ratio of the aggregate of the outstandingprincipal of the loan and the interest accruable in the next six months to market value of the security under theloan of not more than 50%; and (v) a ratio of earnings before interest and tax (“EBIT”) (not including theconsolidated results of the leasing business) and interest expenses of not less than 1.5.

• On 15 May 2014, Eurolease Auto Bulgaria AD (“EuroLease Bulgaria”) entered into a €15,000,000 loan facilitywith, inter alia, VTB Bank (Austria) AG (the “VTB Loan”). The VTB Loan bears interest at a rate equal to thesum of three month EURIBOR plus 4.75% per annum and matures on 31 August 2019. This VTB Loan issecured by, inter alia, first ranking Bulgarian law pledges over certain vehicles and certain lease receivables andis guaranteed by the Issuer, ELG and AV. As at 30 June 2016, the outstanding principal amount under the VTB

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Loan was €8.8 million (BGN 17.2 million). The VTB Loan contains certain financial and other restrictivecovenants (based on relevant defined terms, as set out therein), including that Eurolease Bulgaria must ensurethat: (i) on each interest payment date and on the last day of each month that does not contain an interest paymentdate, the aggregate amount of the VTB Loan is less than 80% of the value of insurance coverage carried byEurolease Bulgaria over the pledged vehicles; (ii) on each interest payment date and on the last day of eachmonth that does not contain an interest payment date, the aggregate amount of the VTB Loan is less than 90%of the net value of the pledged lease receivables; (iii) for each period of three months ending on an interestpayment date, the sum of its net income plus interest expenses is greater than 110% of its interest expenses; (iv)at all times, the ratio of its shareholder equity to its total assets is greater than 15%; (v) at all times, its net debtis less than 80% of its net investment in leasing; (vi) in any financial year, its capital expenditure does not exceed€50,000 (vii) at all times, it maintains a ratio of cash, cash equivalents and lease receivables to debt obligationsand other liabilities falling due within a year of at least 1.1:1; (viii) for each period of three months ending on aninterest payment date, the sum of ELG Group’s net income plus net interest expenses is greater than 100% ofELG Group’s net interest expenses; (ix) at all times, the ratio of ELG Group’s shareholder equity to ELG Group’stotal assets is greater than 15%; (x) at all times, ELG Group’s total net debt is less than 90% of ELG Group’s netinvestment in leasing; and (xi) for each period of three months ending on an interest payment date, theconsolidated net debt of the Group is less than 4.5 times consolidated EBITDA of the Group.

As a result of the impact of one-off effects caused as a result of the adoption by the Euroins Group of a new accountingpolicy relating to the calculation of technical reserves in compliance with Solvency II, in 2016, the Issuer was technicallyin breach of certain covenants (including, namely, requirements in respect of minimum total equity value, the consolidatednet debt to consolidated EBITDA ratio and an interest leverage ratio) under its credit facilities. In September 2016, theIssuer received an unconditional waiver letter from IIB in respect of the IIB Loan, according to which IIB waived anyand all breaches of the covenants under the IIB Loan until 31 December 2016. Following discussions between the Issuerand its other relevant lenders in respect of facilities containing similar covenants, these lenders agreed that the relevantfacilities permitted the calculation of EBITDA and other relevant items excluding the impact of the one-off effects and,accordingly, that no breaches of the covenants had occurred and no waivers were required.

Bond Issues

The Group’s total obligations on bond issues and subordinated debt liabilities were BGN 52.7 million as at 30 June 2016,as compared to BGN 52.8 million as at 31 December 2015, reflecting a decrease of BGN 0.1 million, or 0.1%. TheGroup’s total obligations on bond issues were BGN 52.8 million as at 31 December 2015, as compared to BGN 36.0million as at 31 December 2014, reflecting an increase of BGN 16.7 million, or 46.5%.

The table below sets forth the Group’s bond obligations and subordinated debt liabilities as at the dates indicated.

As at 30June 2016

As at 31 December % changebetween

31December2015 and30 June

2016

% changebetween

31December2014 and

20152015 2014(BGN thousands)

Euroins Group – for the purpose of insurancebusiness(1)................................................................ 19,558 19,558 19,558 0.0 0.0AV – for the purpose of automotive business ......... 6,761 6,763 6,583 0.0 2.7

ELG – for the purpose of leasing services .............. 25,930 26,444 9,884 (0.5) 167.5

Total ....................................................................... 52,691 52,765 36,025 (0.5) 46.5

_________Note:(1) In the Issuer’s and the Guarantor’s Interim Financial Statements, obligations on bond issues are presented under the line item

“subordinated debt”. This subordinated debt refers to the €10 million subordinated notes issued by EIG.

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In December 2014, EIG issued its €10 million subordinated notes due 2021. Following the exercise of the guaranteeoption in the terms and conditions of these notes, these notes are guaranteed by the Issuer and bear interest, which ispayable quarterly in arrear, at a rate of 9.75% per annum above the Euro-zone interbank offered rate for three-monthEuro-denominated deposits (as compared to an original interest rate of 13.00%). These notes are listed on the Irish StockExchange.

Each of AV and ELG issue bonds on the local market to finance working capital requirements. See Note 36 to the Issuer’sInterim Financial Statements and Note 36 to the Issuer’s 2015 Financial Statements.

Critical Accounting Policies and Estimates

The Issuer’s Financial Statements and the Guarantor’s Financial Statements have been prepared in compliance with IFRS,International Accounting Standards (“IAS”), Interpretations of the Standing Interpretation Committee (“SIC”),Interpretations of the IFRS Interpretation Committee (“IFRIC”), which were effectively in force and are adopted by theCommission of the EU. For a full description of the Group’s significant accounting policies, see Note 2 to the 2015Issuer’s Financial Statements.

The notes to the Issuer’s Financial Statements and the Guarantor’s Financial Statements, appearing elsewhere in this BaseProspectus, contain an overview of the Group’s significant accounting policies, including a discussion of changes inaccounting policies resulting from the adoption of new or revised standards. In preparing the Issuer’s Financial Statementsand the Guarantor’s Financial Statements, Management is required to apply approximate estimates and assumptions,which affect the reported assets and liabilities, and the disclosure of the contingent assets and liabilities, as at the date ofthe balance sheet. While estimates are based on Management’s knowledge of current developments, the actual resultsmay vary from the estimates used. Summaries of the most critical accounting estimates and judgments required of theGroup’s management are set forth below. See Note 2 to the 2015 Issuer’s Financial Statements.

Insurance and Health Insurance Activity

Recognition and Measurement of Insurance Contracts

General Insurance Premiums

General insurance premiums are accounted on annual basis. Gross written premiums under general insurance are thepremiums under general insurance or co-insurance contracts, which are concluded during the year, regardless of thepremiums that may be fully or partially related to a later accounting period. Premiums are disclosed gross of paidcommissions to intermediaries.

The earned part of written insurance premiums, including for unexpired insurance contracts, is recognised as an income.Written insurance premiums are recognised as at the date of conclusion of the insurance contracts. Premiums paid toreinsurers are recognised as cost in compliance with the received reinsurance services.

Health Insurance Premiums

The written health insurance premiums are recognised as income on the basis of the annual premium due by the insuredindividuals for the premium period beginning during the financial year, or the due lump sum premium for the entire coverperiod for one year health insurance contracts concluded during the financial year.

The gross written health insurance premiums are not recognised when the future cash receipts thereof are uncertain.Written health insurance premiums are stated gross of commissions due to agents.

Life Insurance Premiums

The written life insurance premiums are recognised as income on the basis of the annual premium due by the insuredindividuals for the premium period beginning during the financial year, or the due lump sum premium for the entire coverperiod for one year life insurance contracts concluded during the financial year.

The gross written life insurance premiums are not recognised when the future cash receipts thereof are uncertain. Writtenlife insurance premiums are stated gross of commissions due to agents.

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Change in Accounting Policy

In 2015, the insurance segment has changed its accounting policy related to the calculation of the technical reserves byapplying new methodology on a group level. The methodology is based on specific assumptions and accountingassessments.

The new Group reserving methodology aims at a unified approach for the calculation of the incurred but not reported(“IBNR”) reserve in the MTPL line of business for all companies in the insurance segment. The Methodology applies the“Chain Ladder Method” based on the number of reported claims for a period not shorter than 3 years. The IBNR reserveis calculated taking into account the expected number of reported claims and the average claim amount.

The number of claims, expected to be reported with delay, should be calculated using the “Chain Ladder Method” basedon actuarial triangles of reported claims/paid claims and reported but not settled (“RBNS”) reserves at the date of thefinancial statements.

In previous accounting periods, the insurance segment has been calculating its technical reserves as per the specificstatutory requirements towards the subsidiaries in accordance with the jurisdiction in which they operate.

As a result of the change in the accounting policy, the Group has performed a recalculation of comparative informationpresented in the Issuer’s 2015 Financial Statements. See Note 46 to the Issuer’s 2015 Financial Statements and “—Restatements and Audit Reports”.

Business Combinations and Goodwill

Business combinations are accounted by using the purchase method. This method requires the assignee to recognise, onthe date of acquisition, the acquired differentiated assets, undertaken liabilities and participation, which is not controllingthe acquired entity, separately from the goodwill. Any costs directly pertaining to the acquisition are carried in thestatement of profit or loss for the period.

Differentiated acquired assets and undertaken liabilities and contingent obligations within a business combination aremeasured at fair value on the date of acquisition, regardless of the extent of non-controlled participation. The Group isable to measure participations, which are not controlling for the acquired entity, either at fair value, or as proportionalshare in the differentiated net assets of the acquired entity.

The acquisition cost excess above the share of assignee in the net fair value of differentiated assets, liabilities andcontingent obligations of acquisitions, is carried as goodwill. In case the acquisition cost is less than the share of investorin the fair value of the company’s net assets, the difference is recognised directly in the statement of comprehensiveincome.

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BUSINESS

Overview

The Issuer is a holding company and performs its principal business activities through its key subsidiaries, whose principalbusiness activities are, respectively: (i) non-life insurance, life insurance and health insurance; (ii) leasing, used car salesand car rentals; (iii) new car sales and car repairs; and (iv) financial services and investment intermediation. The Issuer’skey subsidiaries are:

• EIG, which is itself a holding company owning interests in companies providing insurance and health insuranceservices;

• ELG, which is itself a holding company owning interests in companies providing leasing services, sales of usedcars and car rentals;

• AV, which is itself a holding company owning interests in companies selling new cars and conducting car repairs;and

• EF, which provides financial services and investment intermediation services.

Management’s strategy is to promote the profitability of each of its key business lines on a standalone basis and to enhancesuch profitability, at the Group level, through the inter-related activities which the Group undertakes and the resultingsynergies and cross-selling opportunities that arise from the inter-related nature of the Group’s businesses. Managementbelieves that these synergies and cross-selling opportunities have facilitated, and will continue to facilitate, growth in theGroup’s market shares in each of its key business lines, optimisation of expenses and enhanced competitiveness, whichwill together, in turn, lead to increasing profitability at the Group level.

For the six months ended 30 June 2016, the Group’s revenues from operating activities were BGN 515.1 million (€ 263.4million), as compared to BGN 492.1 million (€251.6 million) for the six months ended 30 June 2015. For the six monthsended 30 June 2016, the Group’s net income was BGN 16.9 million (€ 8.6 million), as compared to a net loss of BGN2.7 million (€1.4 million) for the six months ended 30 June 2015.

For the year ended 31 December 2015, the Group’s revenues from operating activities were BGN 929.7 million (€ 475.3million), as compared to BGN 577.7 million (€295.4 million) for the year ended 31 December 2014. For the year ended31 December 2015, the Group recorded a net loss of BGN 99.2 million (€50.7 million), as compared to a net loss of BGN18.0 million (€9.2 million) for the year ended 31 December 2014.

As at 30 June 2016, the Group’s total assets were BGN 1,030.1 million (€526.7 million), as compared to BGN 979.4million (€500.8 million) as at 31 December 2015 and BGN 783.3 million (€400.5 million) as at 31 December 2014.

For the six months ended 30 June 2016, insurance revenue (which is revenue generated from activities of the EuroinsGroup) was BGN 408.7 million (€209.0 million), or 79.3% of 2016 Interim Revenues; car sales revenue (which is revenuegenerated from activities of the Avto Union Group) was BGN 75.9 million (€38.8 million), or 14.7% of 2016 InterimRevenues; leasing revenue (which is revenue generated from activities of the ELG Group) was BGN 9.1 million (€4.7million), or 1.8% of 2016 Interim Revenues; revenue from asset management and brokerage (which is revenue generatedby the EF) was BGN 5.5 million (€2.8 million), or 1.1% of 2016 Interim Revenues; and revenue from activities of theparent company (which is revenue generated from the Issuer’s standalone activities, which include primarily investmentsin financial instruments) was BGN 15.8 million (€8.1 million), or 3.1% of 2016 Interim Revenues.

For the year ended 31 December 2015, insurance revenue was BGN 736.9 million (€376.8 million), or 79.3% of 2015Total Revenues; car sales revenue was BGN 151.9 million (€77.7 million), or 16.3% of 2015 Total Revenues; leasingrevenue was BGN 21.9 million (€11.2 million), or 2.4% of 2015 Total Revenues; revenue from asset management andbrokerage was BGN 13.7 million (€7.0 million), or 1.5% of 2015 Total Revenues; and revenue from activities of theparent company was BGN 5.2 million (€2.7 million), or 0.6% of 2015 Total Revenues. See “Operating and FinancialReview”.

As of the date of this Base Prospectus, the Group operates primarily in Bulgaria, Romania, Macedonia, Greece andUkraine. The Group also conducts smaller-scale operations in Spain, Italy and Poland and has opened branches in theCzech Republic and Slovakia, although it does not currently conduct operations in these countries.

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The following map shows the Group’s principal businesses by location:

Key Strengths and Competitive Advantages

The Issuer believes that the Group’s key strengths are as follows:

• The Group’s strong underlying business: The Group’s total revenues increased by 60.9% for the year ended31 December 2015, as compared to the year ended 31 December 2014, and by 4.7% for the six months ended 30June 2016, as compared to the six months ended 30 June 2015. This growth in revenues (among other things)has resulted in the Group achieving improved profitability over the same periods. The Group’s net loss for theyears ended 31 December 2014 and 2015 was BGN 17.7 million and BGN 99.2 million, respectively. In the sixmonths ended 30 June 2016, the Group’s net income was BGN 16.9 million, as compared to a net loss of BGN2.7 million in the corresponding period of 2015.

• The Group’s solid track record of gross premiums written (GWP): GWP from insurance increased by 45.5%for the year ended 31 December 2015, as compared to the year ended 31 December 2014, and by 2.8% for thesix months ended 30 June 2016, as compared to the six months ended 30 June 2015. According to informationpublished by the FSC, the Romanian Insurance Supervision Agency, the Romanian National Insurance Bureauand the Macedonian Insurance Supervision Agency, respectively, in the six months ended 30 June 2016 and theyear ended 31 December 2015, the Euroins Group had a market share of more than 6.7% of GWP in each ofBulgaria, Romania and Macedonia.

• The Group’s leading position in the SEE region in the insurance and automotive businesses: As of the dateof this Base Prospectus, the Group is active in a market with a population of over 100 million and has a significantpresence in five countries (Bulgaria, Romania, Macedonia, Greece and Ukraine). The Group also conductssmaller-scale operations in Spain, Italy and Poland and has opened branches in the Czech Republic and Slovakia,although it does not currently conduct operations in these countries. Euroins Bulgaria was the sixth largest insurerin the Bulgarian non-life insurance market in 2015 with a market share of 7.5% of total GWP (according tostatistics published by the FSC); Euroins Romania was the fourth largest Romanian insurer in 2015 with amarket share of 10.4% of total GWP (according to statistics published by the Romanian Insurance SupervisionAgency and the Romanian National Insurance Bureau); and Euroins Skopje was the eighth largest insurer in theMacedonian non-life insurance market with a market share of 7.5% of GWP in 2015 (according to statisticspublished by the Macedonian Insurance Supervision Agency). In addition, the Avto Union Group had a 12.9%market share in the new car sales market in Bulgaria in 2015, according to statistics published by the ACM.

• The integral nature of the Group’s businesses and its various geographical locations: The Group operates inthe insurance, financial services, leasing and car sales businesses in a number of SEE/CEE countries, takingadvantage of both the geographical presence of its subsidiaries and the operations conducted in other countries

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through the EU Freedom of Services Regime. As of the date of this Base Prospectus, the Group operates primarilyin Bulgaria, Romania, Macedonia, Greece and Ukraine. The Group also conducts smaller-scale operations inSpain, Italy and Poland and has opened branches in the Czech Republic and Slovakia, although it does notcurrently conduct operations in these countries. The complementary nature of the business lines conducted acrossthe Group’s segments and the similarities across its markets provide synergies and cross-selling opportunities.

• The Group’s prudent cost management strategy: The Group has continued to focus on managing expensesacross its businesses over the past year. As a result, in the six months ended 30 June 2016, operating expensesincreased by only 0.2%, as compared to the corresponding period of 2015, while revenues increased by 4.7%over the same period.

• The Group’s access to diversified sources of funding: The Group is funded by a diverse range of local andinternational investors through loans, bonds and commercial paper. Leading institutional investors in the Groupinclude (among others) the European Bank for Reconstruction and Development, IIB, Twelve Capital and KJKCapital.

• The history and development of the Group’s insurance and other financial services businesses: The Grouphas been active in its key market sectors for more than 20 years making it an established reputable player in eachof its key business lines.

• The strong support of the Group’s ultimate shareholders: Since its listing on the Bulgarian Stock Exchange in2007, the Group has successfully completed two further capital increases, raising an aggregate amount ofEUR 50 million in new equity. As at the date of this Base Prospectus, the Group is in the process of undertakinganother capital increase, which is expected to be completed by 31 December 2016 and raise up to an additionalEUR 43 million from the Group’s existing shareholders and to enhance further the Group’s capital position.

• The Group’s committed and professional management: The Group benefits from a management team withsignificant experience in the sectors and countries in which the Group operates, with members of seniormanagement having an average of more than 20 years of experience in their respective fields.

Overall Group Strategy

The Group’s strategy focuses on maintaining its position as a leading group in the CEE/SEE region for its key businesslines and enhancing its profitability through the inter-related business activities which the Group undertakes and theresulting synergies and cross-selling opportunities. See “—Key Strengths and Competitive Advantages—The inter-relatednature of the Group’s businesses, providing synergies and cross-selling opportunities”.

In furtherance of the Group’s key goals, the Issuer has identified strategic objectives that aim to improve of the integration,financial condition, results of operations and profitability of each of its key business segments, as well as of the Groupoverall. In particular, the Issuer seeks to:

• promote customer satisfaction and a loyal and diversified client base by offering innovative and competitiveproducts and services across all its business segments;

• promote synergies, referrals and cross-selling across all its business segments through the centralisation andoptimisation of its operations, marketing and businesses processes;

• optimise profitability through growing sales volume across its business segments, in combination with activemanagement of inventory, fixed expenses and financial expenses;

• expand the markets where its business segments operate and increase the market shares of each of its subsidiaries;

• develop and utilise highly skilled management and by providing opportunities for professional development andimplementing performance based compensation schemes for key personnel; and

• establish common goals within each business segment concerning the negotiation of better supplier conditions,advertising and participation in public tenders, which, aim to materially decrease expenses in the Group’s keybusinesses.

The Issuer has set goals and strategies for each of its businesses, which are focused on the overall goal of strengtheningthe Group’s market positions and developing the Group’s existing business. See “—Key Business Segments andSubsidiaries—EIG—Segment Strategy”, “—Key Business Segments and Subsidiaries—ELG—Segment Strategy”, “—Key

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Business Segments and Subsidiaries—AV—Segment Strategy” and “—Key Business Segments and Subsidiaries—EF—Segment Strategy”.

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The Group

The chart below sets forth the organisational structure of the Group:

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The following table sets forth summary descriptions of the Issuer and its key subsidiaries:

Entity Principal Activities

Ownershipas at 30 June2016 (%)

The Issuer (Bulgaria).............. The Issuer is a holding company of insurance and healthinsurance, leasing and car rentals, new car sales and carrepairs and financial services and investment intermediationbusinesses, which performs the majority of its principalbusiness activities through its subsidiaries.

—

Subsidiaries

EIG (Bulgaria) EIG is a holding company of insurance and health insurancebusinesses, which performs the majority of its principalbusiness activities through its subsidiaries. See “EIG”.

89.36(1)

ELG (Bulgaria) ELG is a holding company of leasing, used car sales and carrentals businesses, which performs the majority of itsprincipal business activities through its subsidiaries. See“ELG”.

100.0

AV (Bulgaria) AV is a holding company of new car sales and car repairsbusinesses, which performs the majority of its principalbusiness activities through its subsidiaries. See “AV”.

99.98(2)

EF (Bulgaria) EF is engaged in the non-banking financial services andinvestment intermediation sector in the Balkans. See “EF”.

99.9(3)

__________Notes:(1) 10.64% is owned by Basildon Holding S.A.(2) 0.02% is individually owned by Kiril Ivanov Boshov.

(3) 0.01% is owned by Euroins Bulgaria.

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History of the Group

In 1996, following the implementation of a mass “voucher” privatisation scheme by the Bulgarian government,Agroinvest was established as a privatisation fund to invest in manufacturing businesses in Bulgaria. In 1998, Agroinvestchanged its name to Eurohold AD and changed its focus from manufacturing businesses to the financial services sector.

In 2006, Eurohold AD acquired EF from Bulbank (the predecessor of UniCredit BulBank) and IC Orel, as the Grouprequired a banking licence to expand its financial services product offering.

In 2006, Eurohold AD entered the car sales business, acquiring 100% of Nissan Sofia (now N Auto), the authorised dealerof Renault, Nissan and Dacia in Sofia, Bulgaria.

In 2007, the shares of Eurohold AD were admitted to trading on the Bulgarian Stock Exchange.

In September 2007, Eurohold AD entered the Romanian insurance services market with its acquisition of AsitransAsigurari, a Romanian insurance company, which was subsequently renamed EuroLease Auto Romania.

In November 2007, Eurohold AD incorporated EIG for the purpose of consolidating its insurance operations in Bulgariaand Romania. Eurohold made an in-kind contribution to EIG of its interests in its subsidiaries then engaged in insuranceand health insurance services.

In March 2008, Eurohold AD and Starcom effected a merger pursuant to which the Issuer was established as the parentholding company of the Group. At such time, the Issuer had many subsidiaries in its structure, which operated in thefields of insurance, leasing, real estate and manufacturing. To optimise overall costs and recognise synergies among allsubsidiaries, Management realigned the Group’s then existing subsidiaries by business line under separate legal entities.

In 2008, the Issuer acquired BG AutoLease Holding B.V (“Eurolease Dutch Holdco”) and BG AutoLease Group B.V.from Orangefield Management Services B.V. to manage the Group’s interests in the leasing business.

In 2008, the Issuer incorporated EuroHold Automotive Group EAD for the purpose of consolidating its investments inthe automobile sector. In April 2009, EuroHold Automotive Group EAD was renamed the Avto Union Group EAD.

In June 2009, the Avto Union Group EAD acquired a 100% indirect stake in AV, which expanded the Group’s presencein the automobile business and, at the time of the acquisition AV’s subsidiaries included:

• Auto Italia EAD (official importer of Fiat and Lancia for Bulgaria);

• Bulvaria Holding EAD (Opel and Chevrolet dealer in Sofia);

• Gransport Auto EOOD (official importer of Maserati for Bulgaria);

• Milano Motors EOOD (official importer of Alfa Romeo and the scooters Piaggio, Vespa and Guillera forBulgaria);

• Star Motors EOOD (official representative of Mazda in Bulgaria and Bulvaria); and

• Rent-a-Car EOOD (franchise partner of Avis Europe in Bulgaria).

In 2010, the Issuer consolidated all of its investments in the automobile sector under AV.

In December 2011, the Issuer’s shares were admitted to trading on the Warsaw Stock Exchange.

In 2013, the Issuer divested its interests in a number of real estate companies to focus on the Group’s key business lines.

As regional economies and businesses began to recover from the global financial crisis, the Group re-initiated itsexpansion strategy in 2013, with EIG acquiring the non-life insurance portfolio of InterAmerican Non-life Insurance inOctober 2013 and the entire share capital of InterAmerican Life Insurance and the Bulgarian and Romanian insuranceportfolios of QBE in December 2013.

In November, 2013, the Issuer conducted an internal Group reorganisation pursuant to which Eurolease Dutch Holdcowas merged into ELG. The merger was recorded in the Bulgarian Commercial Register on in January 2014.

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EIG further expanded its insurance operations in 2015 through the acquisition of the Bulgarian and Ukrainian insurancebusinesses of Talanx International, HDI Zastrahovane AD (now EIG Re) and HDI Ukraine (now Euroins Ukraine).

The Issuer

As the Issuer is a holding company, it performs its principal business activities through its key subsidiaries. The Issuergenerates its financial income primarily from dividends from its subsidiaries, interest from loans granted to its subsidiariesand gains from sales of investments.

The Issuer is a public joint stock company established pursuant to the provisions of article 122 of the Law for PublicOffering of Securities and article 261 of the Commerce Act. The Issuer was formed on 10 March 2008 through the mergerof Eurohold AD (originally established in 1996) and Starcom (originally established in 1995). The Issuer is registered inthe Sofia City Court under corporate file 14436/2006. The unique identification code (UIC) of the Issuer is 175187337.The shares of the Issuer are listed on the Bulgarian Stock Exchange under the symbol EUBG and on the Warsaw StockExchange under the symbol EHG. As of the date of this Base Prospectus, the Issuer is owned by Starcom (50.05%), DarFinance EOOD (19.04%) and KJK Fund II Sicav-Sif Balkan Discovery (12.00%), with the remaining 18.91% beingowned by various companies and individuals. The Issuer’s head office and the address of the Issuer’s management is at43 Christopher Columbus Blvd, Iskar district, 1592, Sofia, Republic of Bulgaria AD. The telephone number of the Issueris (+359) 2 9651651.

As a publicly listed company, the Issuer is subject to the supervision of the Investment Activity Supervision Division ofthe FSC.

EIG

Overview

EIG is the holding company for the Group’s investments in the insurance sector in the CEE/SEE region. The EuroinsGroup, which comprises EIG and its subsidiaries, is one of the largest privately owned insurance groups operating in theCEE/SEE region, by GWP, according to information published by the FSC. While motor insurance makes up the majorityof the Euroins Group’s business, the Euroins Group focuses on providing a full range of insurance products in the areasof general, health and life insurance. The products offered by the Euroins Group include:

• Motor Third Parties Liability (“MTPL”) insurance (mandatory liability insurance for motor vehicles);

• Auto Casualty and Collision (“Casco”) insurance (which covers risks that could lead to damage or complete lossof the car);

• Property insurance;

• Cargo insurance;

• General third parties liability insurance (which protects businesses against third party claims for injury orproperty damage);

• Crops and livestock insurance;

• Vessels insurance;

• Aircraft insurance;

• Financial risks insurance;

• Life insurance;

• Travel assistance insurance; and

• Accident and sickness insurance.

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The Euroins Group distributes its products through its own sales network of more than 300 agencies, tied agents and otherGroup companies, including members of the Avto Union Group and the ELG Group. As at the date of this BaseProspectus, the Euroins Group has over two-million clients and 1,400 employees.

While the Euroins Group started its operations in Bulgaria, it has expanded, through acquisitions, to seven Europeancountries and, in 2015, had total GWP of approximately €232 million, of which 70.2% was derived from Romania, 23.7%from Bulgaria, 3.8% from Macedonia and 1.9% from Greece. In the six months ended 30 June 2016, the Euroins Grouphad total GWP of approximately €120.1 million (BGN 234.8 million), as compared to €116.8 million (BGN 228.5 million)for the corresponding period of 2015. According to information published by the FSC, the Romanian InsuranceSupervision Agency, the Romanian National Insurance Bureau and the Macedonian Insurance Supervision Agency, theEuroins Group has a market share of more than 6.7% of GWP in each of Bulgaria, Romania and Macedonia.

For the six months ended 30 June 2016, insurance revenue of the Group (which is revenue generated from activities ofthe Euroins Group) was BGN 408.7 million (€209.0 million), or 79.3% of 2016 Interim Revenues, as compared to BGN397.5 million, or 80.8% of 2015 Interim Revenues, for the six months ended 30 June 2015. For the year ended 31December 2015, the Group’s insurance revenue was BGN 736.9 million (€376.8 million), or 79.3% of 2015 TotalRevenues, as compared to BGN 405.2 million, or 70.2% of 2014 Total Revenues, for the year ended 31 December 2014.See “Operating and Financial Review”.

EIG was incorporated on 6 November 2007 as a joint-stock company, registered under court decision № 1302/2007 in Sofia City Court with registered number 175394058. As at the date of this Base Prospectus, the Issuer owns 86.5% of theshares of EIG and the remaining 13.5% of the shares are owned by Basildon Holding S.A.R.L. (“Basildon”), aninvestment holding company headquartered in Luxembourg. EIG’s head and registered office is at 43 ChristopherColumbus Blvd, Iskar region, 1592 Sofia, Bulgaria. There are no formal measures in place to ensure that control of EIGby the Issuer is not abused. The telephone number of EIG is (+359) 2 9651500. See “—History of the Group”.

EIG is the Guarantor of Notes issued under the Programme.

Subsidiaries of EIG

As EIG is a holding company, it performs its principal business activities through its subsidiaries. The following tablesets forth summary descriptions of each member of the Euroins Group:

Entity Principal Activities

Ownershipas at 30 June2016 (%)

Holding Company

EIG (Bulgaria) EIG is a holding company of insurance businesses, whichperforms the majority of its principal business activitiesthrough its subsidiaries.

—

Direct Subsidiaries

Euroins Bulgaria AD (EuroinsBulgaria) (Bulgaria)

Euroins Bulgaria is EIG’s general insurance subsidiary inBulgaria. Euroins Bulgaria is a public company, traded on theofficial segment of the Bulgarian Stock Exchange (ticker:5IC).

80.92

Euroins Romania Asigurare-Reasigurare S.A. (EuroinsRomania) (Romania)

Euroins Romania is EIG’s general insurance subsidiary inRomania.

96.54

Euroins Osiguruvanje AD,Skopje (Euroins Skopje)(Macedonia)

Euroins Skopje is EIG’s general insurance subsidiary inMacedonia.

93.36

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Euroins Health InsuranceEAD (Euroins Health)(Bulgaria)

Euroins Health is one of the largest health assurancecompanies in Bulgaria.

100.00

Euroins Life EAD (“EuroinsLife”) (Bulgaria)

Euroins Life is EIG’s life insurance subsidiary in Bulgaria 100.00

EIG Re AD (EIG Re)(Bulgaria)

EIG Re is the Bulgarian insurance business acquired fromTalanx International in December 2015.

100.00

Euroins Ukraine (formerlyHDI Strakhuvannya) (EuroinsUkraine)

Euroins Ukraine is the Ukrainian insurance business acquiredfrom Talanx International.

9.99(1)

__________Notes:(1) As at 30 June 2016, EIG held 9.9% of the share capital of HDI Ukraine. On 12 August 2016, the remaining shares of HDI Ukraine were

transferred to EIG. As a result of this transaction, since 12 August 2016, EIG has held 99.29% of the share capital of HDI Ukraine. On 29September 2016, the name of HDI Ukraine was officially changed to Euroins Ukraine.

History and Expansion of the Euroins Group

Since its incorporation, the Euroins Group has grown primarily through the acquisition of companies and portfolios ofinsurance business. Opportunities for expansion have arisen as a result of the restructuring and exit of internationalinsurance groups from the CEE/SEE region, use of the EU Freedom of Services Regime and Management’s search foradvantageous opportunities.

EIG’s expansion strategy has focused on acquisitions in the CEE/SEE region, which Management believes has highgrowth potential due to the low insurance density and penetration rates in the region. See “—Segment Strategy”. EIG’skey acquisitions include the following:

• In September 2007, Eurohold AD entered the Romanian insurance services market with its acquisition ofAsitrans Asigurari, a Romanian insurance company, which was subsequently renamed Euroins Romania.

• In January 2008, EIG entered the Macedonian insurance services market with its acquisition of MacospedOsiguruvanje AD, Skopje, which was subsequently renamed Euroins Skopje.

• In 2008, EIG commenced operations in Spain under the EU Freedom of Services Regime.

• In December 2012, EIG acquired United Health Insurance, which was subsequently merged into Euroins Health.

• In October 2013, EIG acquired the insurance portfolio of InterAmerican Non-life from Achmea, which wasmerged into Euroins Bulgaria.

• In December 2013, EIG acquired 100% of the share capital of InterAmerican Life from Achmea, which wassubsequently renamed Euroins Life.

• In December 2013, EIG acquired QBE’s insurance portfolios in Bulgaria and Romania. These portfoliosprimarily comprised property, goods in transit and travel insurance.

• In August 2014, EIG commenced operations in Greece (under the EU Freedom of Services Regime).

• In February 2015, EIG agreed to acquire HDI Zastrahovane AD (now EIG Re) and HDI Ukraine (now EuroinsUkraine) from Talanx International, a German insurance company, which represented its Bulgarian and Ukrainianinsurance businesses, respectively. The acquisitions of EIG Re and Euroins Ukraine were completed in December2015 and August 2016, respectively, after receiving regulatory approval. In 2015, the Euroins Group commencedoperations in Italy under the EU Freedom of Services Regime.

The Euroins Group has obtained an approval from the FSC for, and has, established branches in the Czech Republic andSlovakia, although, it does not currently conduct operations in these countries. In June 2016, EIG announced its intentionto open a branch in Greece. The Euroins Group may pursue other expansion opportunities in Greece, depending on marketconditions. See “Risk Factors—Risks related to the Group’s Business—Failure to complete, integrate and manageacquisitions” and “Risk Factors—Risks related to the Euroins Group—Expansion of insurance operations”.

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Segment Strategy

The overall strategic objective for the Euroins Group is to focus on expanding its presence in the CEE/SEE region. In thiscontext, Management will review opportunities in new markets through equity and portfolio acquisitions, establishinglocally licenced branches or by taking advantage of the EU Freedom of Services Regime (as it has done in Greece, Italy,Poland and Spain). According to information published by the FSC, the Romanian Insurance Supervision Agency, theRomanian National Insurance Bureau and the Macedonian Insurance Supervision Agency, respectively, in the six monthsended 30 June 2016 and the year ended 31 December 2015, the Euroins Group had a market share of more than 6.7% ofGWP in each of Bulgaria, Romania and Macedonia. The Euroins Group’s long-term strategic goal is to achieve asustainable market share in the region, create a geographically diversified portfolio across the region and graduallyimprove its profitability and return on equity.

Management believes that there is significant potential for further expansion of the Group’s insurance business due to thelow level of insurance density and penetration in the CEE/SEE region, as compared to the EU average. Insurancepenetration is calculated as GWP divided by GDP. According to statistics published by Axco Statistics, in 2014, the EUaverage penetration rate in the non-life insurance market was 2.1%, while insurance penetration rates in Ukraine, theCzech Republic and Bulgaria were below 2.0% and the insurance penetration rates in Poland, Greece, Slovakia, Romaniaand Macedonia were below 1.5%. Management expects insurance penetration gaps to reduce, thereby, creating thepotential for additional insurance premiums to be generated.

In furtherance of its strategy and in order to take advantage of under-penetration in the markets where it operates, theEuroins Group is focused on introducing and offering an expanding range of general insurance products to respond to thegrowing needs and spending habits of increasingly affluent local clients and the general development of the insurancemarket in the CEE/SEE region. In particular, the Euroins Group seeks to:

• further develop and promote the system of customer referrals and the cross-selling of products by the EuroinsGroup to the ELG Group and AV Group;

• maintain a balanced investment strategy in managing insurance reserves and centralising its asset management;

• harmonise the branding and marketing strategies of its insurance operations;

• maintain a well-balanced portfolio of insurance products tailored to the specific features of the regional markets,focused on non-motor business growth;

• develop and consolidate its country-wide distribution networks of tied agencies with remuneration based on bothfinancial and non-financial performance indicators; and

• harmonise its software and back office infrastructure with the implementation of real-time reporting and risk-management software.

Underwriting Strategy and Process

The Euroins Group’s underwriting team, which sits at EIG’s headquarters, is comprised of four motor insuranceunderwriters, six non-motor insurance underwriters, four health insurance underwriters, two methodology and analysisspecialists, two persons responsible for tenders and one person responsible for corporate business. The authority levelsgranted to the Euroins Group underwriters depend on their position (i.e., whether they are an underwriting director (thehighest authority), underwriting department manager, underwriting product manager or agency director) and the amountand type of insurance involved. Agencies that the Euroins Group works with are given only limited authority, which mustcomply with underwriting guidelines and tariffs provided to them by the Euroins Group. For example, for health insuranceproducts, agency directors and underwriting product managers can authorise underwriting up to €10,000, underwritingdepartment managers up to €25,000 and underwriting directors up to €35,000.

Motor Insurance Underwriting Strategy

Since 2013, the Euroins Group has adopted a complex segmentation underwriting strategy for MTPL insurance, which isaimed at optimising the portfolio, retaining profitable clients and aligning premiums with the level of risk insured. Thereare two pricing components to this strategy: (i) an a priori (or forward-looking) component based on the analysis of theportfolio over the last five years (in respect of frequency of claims, average claims and loss ratio) and on actuarialcalculations of expected values and frequency of claims, which are adjusted by specific loaded factors; and (ii) an aposteriori (or retrospective) component applied through a bonus malus system at the client level based on the frequencyof claims and loss ratio registered for that client over the last five years (i.e., where the premium is increased if there is a

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higher frequency of claims or a higher loss ratio registered for the relevant client). The segmentation factors on which theEuroins Group’s tariffs are based include vehicle type, cylinder capacity or maximum authorised weight of the car, enginepower, whether the insured person is an individual or a company, the age of the insured, the country of residence of theinsured, the number of inhabitants in the insured’s town of residence and the economic sector in which an insuredcompany is engaged. A tariff increase of up to 250% will apply for fleets of vehicles (classed as five vehicles or morewith the same owner) based on the frequency of claims and loss ratio, while a discount of up to 20% will apply to fleetsand clients with a no or low claims history, as well as a history of timely payment of premiums. Since the implementationof this strategy, Management has identified an improvement in the structure of the Euroins Group’s MTPL portfolio,including an approximately 25% decrease in claims frequency.

For motor hull insurance (insurance for self-damage, rather than third party liability cover), Management believes theEuroins Group approach to underwriting is conservative and the Euroins Group is working to reduce the number of higherrisk clients in its portfolio. In this respect, the Euroins Group does not offer discounts to unprofitable customers or inrespect of vehicles that are older than ten years or vehicles involved in high-risk activities, including taxis, rental cars anddelivery vehicles. In addition, the Euroins Group has gradually raised its insurance premiums over the last few years, withthe aim of optimising and balancing its portfolio, as well as to reduce overall loss.

Non-Motor Insurance Underwriting Strategy

In the non-motor portfolio, the Euroins Group aims to continue its growth strategy, tailoring its tariffs to individual,commercial and industrial risks and offering preferential tariffs and conditions for profitable and corporate clients. Cross-selling opportunities from the MTPL portfolio has led to an increase in accident and illness insurance policies.

Risk Management

In order to effectively manage the risks to which the Euroins Group is exposed, EIG has established a system of internalcontrols and processes, which is applied, both at the EIG level and at all of EIG’s subsidiaries. EIG’s risk managementsystem is based on written policies and rules of governance, agreed processes and internal risk limits, as well as tools toidentify, monitor, manage and control the Group’s exposure to risk by reference to the nature, scale and complexity ofthe risks inherent to the Euroins Group’s business.

EIG’s Board of Directors have adopted a written Group Risk Policy and has implemented a risk management system inall of EIG’s subsidiaries. This risk policy and risk management system aims to: (i) define the main objectives for theEuroins Group risk management system and monitor compliance by EIG’s subsidiaries with risk-related policies; (ii)properly identify, measure, monitor, manage and report all risk categories; (iii) mitigate risks outside of the EuroinsGroup’s risk appetite; (iv) establish, control and facilitate the internal risk control system at the Euroins Group level; and(v) ensure that the level of capital held by EIG’s subsidiaries is compatible with the risks taken by the Euroins Group.Pursuant to applicable legislation, each of EIG’s subsidiaries has established its own risk management system, which isin compliance with the Euroins Group’s risk management policy. EIG oversees the risk management process of itssubsidiaries, receives risk management reports on a quarterly basis and provides guidance when appropriate and asneeded. The Group Risk Policy and the risk management policies of EIG’s subsidiaries have been adapted to comply withthe requirements of Solvency II.

At the EIG level, risk management is mainly conducted by EIG’s Board of Directors and the Chief Risk Officer. TheBoard of Directors is tasked with setting the overall business and risk management strategy, as well as approving thebusiness plans for each of EIG’s subsidiaries. The Chief Risk Officer is responsible for monitoring and measuring theEuroins Group’s risk exposure, preparing prudential reports and managing the internal Euroins Group risk reportingprocess. The Chief Risk Officer manages the implementation of risk policies and procedures and monitors compliancewith such policies and procedures at the Euroins Group level.

EIG has established three risk-related committees to help manage risk: (i) the assets and liabilities managementcommittee, which conducts asset and liabilities assessments in line with IFRS and Solvency II requirements and reportsto the risk committee; (ii) the risk committee, which is responsible for risk identification, evaluation and control (includingsolvency capital requirements and minimum capital requirement calculations) and reports to the capital adequacycommittee; and (iii) the capital adequacy committee, which is responsible for setting EIG’s capital management andinvestment policies and reports to the Board of Directors of EIG. The risk committee is responsible for carrying out stresstests and scenario analyses, as well as for investigating risk reward optimisation.

In order to control the Euroins Group’s asset allocation risks, EIG has established allocation limits on investments of amaximum of 55% in bonds and shares listed on a regulated market, a maximum of 5% in unlisted shares and bonds, amaximum of 40% in real estate (with no more than 10% in a single asset), a maximum of 90% in deposits with financial

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and credit institutions (with no more than 10% at any one credit institution) and a maximum of 3% cash in hand. Theselimits also apply at the subsidiary level.

Each of EIG’s subsidiaries has a similar risk management framework in place, with risk management overseen by theBoard of Administrators of the relevant subsidiary. Any significant issues identified at the subsidiary level are referred tothe Board of Directors of EIG through EIG’s risk committee.

Each of EIG and its subsidiaries also has independent control systems and compliance functions, which monitor theadequacy and the efficiency of the system of internal control and the other governance systems.

Reinsurance

As a tool of risk management, members of the Euroins Group have entered into reinsurance contracts to reinsure certainclaims. The Euroins Group’s reinsurance activities are co-ordinated by the reinsurance department. Its mainresponsibilities are to develop, approve and implement a reinsurance strategy tailored to the overall risk profile ofmembers of the Group, based on the nature, size and complexity of their activities. The reinsurance department regularlyidentifies, assesses and reviews the insurer’s risk appetite and risk tolerance levels in respect of reinsurance in close co-operation with Euroins Group management and the risk management department. The current reinsurance programmesdiffer among the members of the Euroins Group, as a result of the volume, type of business of the relevant EIG subsidiariesand the impact of market conditions. In general, the Euroins Group enters into treaty reinsurance contracts pursuant towhich the reinsurer covers a specified share of all insurance policies issued by the relevant member of the Euroins Groupthat come within the scope of the contract, rather than separately negotiated reinsurance contracts for each policy (i.e.,facultative reinsurance).

Solvency positions of the Euroins Group

As at 30 June 2016, the position of EIG under Solvency II requirements shows coverage of the Solvency CapitalRequirement (“SCR”) of 122.68%. The EIG aims to achieve coverage of the SCR of 180% in the next three to five years.The table below shows the detailed position of the Guarantor as of 30 June 2016:

BGN (other than percentages) EUR (other than percentages)

Eligible Own Funds to meet the SCR....................... 118,205,096 60,437,306Eligible Own Funds to meet the Minimum CapitalRequirement (“MCR”) ............................................

88,313,609 45,154,031

SCR.......................................................................... 96,354,580 49,265,314MCR......................................................................... 40,600,000 20,758,450Ratio of Eligible Own Funds to SCR ....................... 122.68% 122.68%Ratio of Eligible Own Funds to MCR...................... 218.52% 218.52%

EIG is in compliance with all applicable regulations. As at 30 June 2016, EIG is in compliance with all applicableregulatory requirements. See “Risk Factors—Risks related to Euroins Group—Solvency II”.

Euroins Bulgaria

Overview

Euroins Bulgaria is EIG’s general insurance subsidiary in Bulgaria, which offers a full range of non-life insuranceproducts. In 2015, Euroins Bulgaria and EIG’s health insurance subsidiary, Euroins Health (see “—Euroins Health”) hadGWP of €59.0 million (BGN 115.4 million) (and including EIG Re for 2015) (approximately 22.7% of the EuroinsGroup’s total GWP), as compared to €44.2 million (BGN 86.4 million) in 2014. In the six months ended 30 June 2016,Euroins Bulgaria had GWP of €27.2 million (BGN 53.2 million), as compared to €32.5 million (BGN 63.5 million) forthe corresponding period of 2015.

The non-life insurance market in Bulgaria is predominantly focused on motor insurance, with MTPL insurance accountingfor approximately 38% of the market and Casco insurance accounting for approximately 31% of the market, according toinformation published by the FSC. MTPL and Casco insurance accounted for 49% and 23% of Euroins Bulgaria’sbusiness in 2015, respectively. In 2015, Euroins Bulgaria’s GWP from MTPL insurance increased by 7%, while GWPfrom Casco insurance increased by 11%, as compared to 2014. In 2015, the average premium for MTPL policies sold byEuroins Bulgaria decreased by between 2% and 5% (depending on the level of insurance and vehicle insured), while theaverage premium paid for MTPL policies for trucks and motorcycles increased, as compared to 2014. In the six monthsended 30 June 2016, the average premium for MTPL policies increased by approximately 1%.

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In October 2013, EIG acquired the insurance portfolio of InterAmerican Non-life from Achmea, which portfolio wasintegrated with the Euroins Bulgaria portfolio. As a result of this acquisition, Euroins Bulgaria became an exclusivepartner of Piraeus Bank Bulgaria in its bancassurance scheme and gained a number of large Greek corporate clients. Onintegration, Euroins Bulgaria adopted a selective approach to InterAmerican Non-life’s portfolio, retaining only profitablebusiness. Accordingly, as at the date of this Base Prospectus, less than 50% of InterAmercian Non-life’s portfolio hasbeen retained.

Following the acquisition of QBE’s Bulgarian insurance portfolio in December 2013, Euroins Bulgaria retained asignificant part of the portfolio and became an exclusive partner of QBE for its business in Bulgaria.

Since August 2014, Euroins Bulgaria has underwritten motor insurance products in Greece under the EU Freedom ofServices Regime. In the six months ended 30 June 2016 and the year ended 31 December 2015, Euroins Bulgaria’soperations in Greece generated €5.6 million and €4.4 million in GWP, respectively. In June 2016, EIG announced itsintention to open a branch in Greece. The Euroins Group may pursue other expansion opportunities in Greece, dependingon market condition.

Euroins Bulgaria also conducts operations in Spain, Italy and Poland under the EU Freedom of Services Regime. In thesix months ended 30 June 2016 and the year ended 31 December 2015: (i) Euroins Bulgaria’s operations in Spaingenerated €0.6 million and €0.5 million in GWP, respectively; (ii) Euroins Bulgaria’s operations in Italy generated €0.7million and €0.3 million in GWP, respectively; and (iii) Euroins Bulgaria’s operations in Poland generated €0.4 millionand €0.03 million, respectively. See “—History and Expansion of the Euroins Group”.

Following the acquisition of EIG Re from Talanx International in 2015, the operational integration of EIG Re into EuroinsBulgaria has been completed and the agencies and personnel of EIG Re have been transferred to Euroins Bulgaria, withmore than 80% of the portfolio of EIG Re existing at the time of the acquisition having been retained.

Euroins Bulgaria offers its products to individuals and corporate entities. In 2015, individuals comprised 45% andcorporate entities comprised 55% of Euroins Bulgaria’s total portfolio. In the six months ended 30 June 2016, individualscomprised 54% and corporate entities comprised 46% of Euroins Bulgaria’s total portfolio. The increase in the share ofindividual clients is primarily due to GWP generated by Euroins Bulgaria outside of Bulgaria under the EU Freedom ofServices Regime.

Distribution

Euroins Bulgaria distributes its insurance products through its own network of 91 branches (which accounted for 67% ofEuroins Bulgaria’s total GWP in 2015). The share of brokers’ business accounted for 34% of Euroins Bulgaria’s totalGWP in 2015 and agents and travel agents accounted for 53% of Euroins Bulgaria’s total GWP in 2015.

Regulation

Euroins Bulgaria is a fully licenced general insurance company (permit No. 8/15.06.1998, as amended), operating underthe laws and regulations of Bulgaria and under the supervision of the FSC. Since 1 January 2016, the activities of insurancecompanies in Bulgaria have been regulated and prescribed by a new Bulgarian Insurance Code, which implements thenew capital and risk management requirements applicable to insurance and reinsurance companies under Solvency II.The main objectives of the Bulgarian Insurance Code are to guarantee the protection of consumer interests in the insuranceservices sector and establish conditions for the development of a stable, transparent and efficient insurance market inBulgaria.

Competition

According to statistics compiled by the FSC, the Bulgarian non-life insurance market had 11 main general insurers as of31 December 2015, with the largest top six insurers by GWP, covering 63.5% of the market.

Euroins Bulgaria has increased its market share in recent years and was the sixth largest insurer in the Bulgarian non-lifeinsurance market in 2015, with a market share of 7.5%, according to statistics published by the FSC. According to thesame source, in the six months ended 30 June 2016, Euroins Bulgaria was the eighth largest insurer in Bulgarian non-lifeinsurance, with a market share of 6.8% of GWP. Euroins Bulgaria’s key competitors include local and internationalinsurance companies, including Armeec (13.2% market share in 2015), Bulstrad (Vienna Insurance Group) (12.3% marketshare) and Lev Ins (10.4% market share). As of 30 June 2016, Euroins Bulgaria had the seventh largest motor insuranceportfolio in the Bulgarian market, with the motor insurance business accounting for 68.6% of Euroins Bulgaria’s insuranceportfolio (as compared to approximately 72% as of 31 December 2015), according to statistics published by the FSC.Competition is primarily based on pricing and breadth of product range. A competitive advantage of Euroins Bulgaria is

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its ability to offer insurance products in partnership with the Avto Union Group’s sales of new cars, offering customers a“one-stop-shop” service.

See “Risk Factors—Risks related to the Euroins Group—Competition”.

Euroins Romania

Overview

Euroins Romania is EIG’s general insurance subsidiary in Romania, which offers a full range of non-life insuranceproducts. In 2015, Euroins Romania had GWP of €162.5 million (approximately 70.2% of the Euroins Group’s totalGWP), as compared to €108.3 million in 2014. In the six months ended 30 June 2016, Euroins Romania had GWP of€87.4 million (Lei 392.7 million), as compared to €79.1 million (Lei 351.9 million) for the corresponding period of 2015.The increases in 2015 and the six months ended 30 June 2016 are primarily due to the development and implementationof the Euroins Group’s segmentation underwriting strategy, which allows the company to differentiate profitableportfolios from those with high claims ratios.

The non-life insurance market in Romania is predominantly focused on motor insurance, with MTPL and motor hullinsurance comprising 71.7% of the market in 2015 and 76.3% of the market in the six months ended 30 June 2016,according to information published by the ASF. MTPL and motor hull insurance accounted for 47.4% and 24.3%,respectively, of Romania’s non-motor business in 2015 and 56.0% and 20.3% for the three months ended 31 March 2016.In 2015, the average premium in MTPL policies sold by Euroins Romania increased by 10.6% to €123.6 million (Lei 550million), as compared to €111.9 million (Lei 498 million) in 2014, primarily due to the continuing implementation of theEuroins Group’s segmentation underwriting strategy. In the six months ended 30 June 2016, the average premiumincreased by 14.4% to €135.2 million (Lei 611 million), as compared to €119.5 million (Lei 534) for the correspondingperiod of 2015. See “—Underwriting Strategy and Process—Motor Insurance Underwriting Strategy”.

Euroins Romania offers its products to individuals and corporate entities. For MTPL insurance, individuals aged between35 and 59 comprise the majority of the individual portfolio, representing 78.1% of the total number of policies forindividuals and 75.0% of total individuals’ GWP in 2015. In the six months ended 30 June 2016, individuals aged between35 and 59 accounted for 86.6% of the total number of policies for individuals, and 83.7% of total individuals’ GWP. Theaverage premium to individuals for MTPL insurance has increased from €93.6 million (Lei 419 million) as at 31December 2014 to €103.1 million (Lei 466) as at 31 December 2015 and €104.6 million (Lei 473 million) as at 31 March2016. The average premium to corporate entities for MTPL insurance has also increased from €171.9 million (Lei 770million) as at 31 December 2014 to €193.6 million (Lei 875 million) as at 31 December 2015 and €328.5 million (Lei1,485 million) as at 30 June 2016. The average premium continues to grow due to the continuing implementation of theEuroins Group’s segmentation underwriting strategy. Euroins Romania is focused on increasing the MTPL averagepremiums for those segments of the market with high claims frequency.

In 2015, Euroins Romania began offering health insurance products, with a particular focus on the employee benefitsmarket. Euroins Romania has hired a team of health insurance specialists to grow this product line and develop a networkof partner hospitals in Romania.

On 29 September 2016, the general meeting of shareholders of Euroins Romania approved a capital increase of RON 100million, which is intended to serve as capital buffer and to facilitate both the organic growth of the company andacquisition opportunities. This capital increase is in line with the objectives of Euroins Romania’s business plan. See “—Business Plan” and “Operating and Financial Review—Restatements and Audit Report”.

Distribution

Euroins Romania distributes its insurance products through its own network of 50 branches (which accounted for 1.6%of Euroins Romania’s total GWP in 2015 and 1.9% of GWP in the six months ended 30 June 2016), brokers (whichaccounted for 96.3% of Euroins Romania’s total GWP in 2015 and 97.5% of GWP in the six months ended 30 June 2016)and agents and travel agents (which accounted for 2.1% of Euroins Romania’s total GWP in 2015 and 0.6% of GWP inthe six months ended 30 June 2016).

Regulation

Euroins Romania is a fully licenced general insurance company, operating under the laws and regulations of Romaniaand under the supervision of the ASF. Romanian insurance law and regulations are in compliance with EU rules andregulations. In October 2015, Law № 237/2015, which regulates the authorisation and operation of insurance and reinsurance undertakings operating in Romania, was published in the context of the implementation of Solvency II. In

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order to further adapt the Romanian legal framework to the requirements of Solvency II and regulate the authorisationand monitoring of insurance and reinsurance undertakings operating Romania (including Euroins Romania), the ASF alsoadopted Norm 20/2016, which became effective on 11 April 2016.

Competition

According to statistics compiled by the Romanian Insurance Supervision Agency and the Romanian National InsuranceBureau, the Romanian non-life insurance market was comprised of 35 general insurers as of 31 December 2015, with thelargest four insurers by GWP covering 40.9% of GWP and the largest ten insurers covering 79.3% of GWP. Accordingto the same source, in the three months ended 31 March 2016, the number of insurers was unchanged, with the largestfour insurers by GWP covering 46.2% of GWP and the largest ten insurers covering 86.5% of GWP.

Euroins Romania has increased its market share in recent years, from 4.49% of GWP in 2010 to 10.4% in 2015, makingit the fourth largest insurer, by GWP, according to statistics published by the Romanian Insurance Supervision Agencyand the Romanian National Insurance Bureau. Euroins Romania’s key competitors include local and internationalinsurance companies, including Omniasig (Vienna Insurance Group) (14.1% market share in 2015), Allianz-Tiriac(13.8% market share) and Groupama (10.9% market share). Competition is primarily based on pricing and breadth ofproduct range. In the three months ended 31 March 2016, Euroins Romania further improved its position, increasing itsmarket share to 10.5% of the non-life insurance market and 8.6% of the total insurance market, according to statisticspublished by the Romanian Financial Supervisory Authority. See “Risk Factors—Risks related to the Euroins Group—Competition”.

Business Plan

In 2015, and following discussions with the ASF regarding run-off coverage (i.e., insurance that provides liabilitycoverage against claims against companies that have been acquired, merged or have ceased operations), Euroins Romaniarecorded an accounting loss due to increasing its reserves, writing off overdue receivables and paying claims fromprevious periods. On 20 November 2015, the ASF approved Euroins Romania’s business plan, pursuant to which EuroinsRomania has increased its share capital by Lei 200 million (€44.2 million), reviewed its main reinsurance contract,changed its external auditors and reviewed its internal corporate governance policies and procedures. As part of thisbusiness plan, Euroins Romania intends to continue its strategy to further diversify its insurance portfolio. See “Operatingand Financial Review—Restatements and Audit Report”.

Euroins Skopje

Overview

Euroins Skopje is EIG’s insurance subsidiary in Macedonia, which offers a full range of non-life and life insuranceproducts. In 2015, Euroins Skopje had GWP of €8.8 million (approximately 3.4% of the Euroins Group’s total GWP), ascompared to €8.3 million in 2014. In the six months ended 30 June 2016, Euroins Skopje had GWP of € 4.1 million, ascompared to € 4.2 in the corresponding period of 2015.

MTPL and motor hull (Casco) insurance accounted for 65.6% and 8.8% of Euroins Skopje’s business in 2015, ascompared to 64.5% and 9.3% in 2014, respectively. MTPL and motor hull (Casco) insurance accounted for 65.2% and8.4% of Euroins Skopje’s business in the six months ended 30 June 2016, as compared to 62.5% and 8.1% in thecorresponding period of 2015.

Distribution

Euroins Skopje distributes its insurance products through direct sales (though its own network of branches, whichaccounted for 7.9% of Euroins Skopje’s total GWP in 2015 and for 12.8% in the six months ended 30 June 2016), brokers(which accounted for 23.8% of Euroins Skopje’s total GWP in 2015 and for 26.0% in the six months ended 30 June 2016),agents (which accounted for 66.8% of Euroins Skopje’s total GWP in 2015 and for 60.0% in the six months ended 30June 2016) and sales by the ELG Group (which accounted for 1.4% of Euroins Skopje’s total GWP in 2015 and for 1.1%in the six months ended 30 June 2016).

Regulation

Euroins Skopje is a fully licenced general insurance company, operating under the laws and regulations of the Republicof Macedonia and under the supervision of the Macedonian Insurance Supervision Agency. The Macedonian insurancesector is regulated by the Insurance Supervision Law of 2002, as amended (the “Insurance Supervision Law”). TheInsurance Supervision Law regulates the conditions of carrying out insurance, reinsurance and co-insurance activity in

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Macedonia. The Macedonian Insurance Supervision Agency is the main regulatory body that oversees and regulates thesector. According to the Insurance Supervision Law, insurance companies should be established as joint-stockcompanies, be located in Macedonia and conduct their activities in compliance with the Insurance Supervision Law andthe Law on Trade Companies of 1996.

Competition

According to statistics compiled by the Macedonian Insurance Supervision Agency, the Macedonian insurance market iscomprised of 11 non-life and four life insurers. The non-life insurance market grew by 6.5% in 2015, as compared to2014. The life insurance market grew by 24% in 2015, as compared to 2014.

Euroins Skopje ranked eighth in the Macedonian non-life insurance market, with a market share of 7.5% in 2015 and6.4% in the six months ended 30 June 2016, according to statistics published by the Macedonian Insurance SupervisionAgency. The Macedonian insurance sector’s key players, by market share, are Triglav, Osiguruvanje Macedonia andEurolink, with market shares of 18.03%, 12.9% and 12.3%, respectively, in 2015, according to the same source. In thesix months ended 30 June 2016, the top three insurers in the Macedonian market were Triglov, Osiguruvanje Macedoniaand Winner, with market shares of 18.0%, 14.3% and 11.8%, respectively. In motor hull (Casco) insurance and MTPLinsurance, which together represent the majority of Euroins Skopje’s insurance business, Euroins Skopje’s principalcompetitors are Winner (Vienna International Group), Uniqa and Insurance Policy. Competition is primarily based onpricing and breadth of product range. See “Risk Factors—Risks related to the Euroins Group—Competition”.

Euroins Health

Overview

Euroins Health is EIG’s health insurance subsidiary in Bulgaria, which offers a full range of health insurance products.Euroins Health has approximately 30,000 customers and 400 partner medical facilities, as well as two self-owned medicalcentres. Since January 2016, the self-owned medical centres have been managed by Medical Centre Kristal. EuroinsHealth has developed a digital health insurance and claims handling service to increase the efficiency and cost of itsproduct offering.

Pursuant to an amendment of the Bulgarian Insurance Code, which entered into force in August 2014, general insurancecompanies are now authorised to provide health insurance. Prior to this amendment, only health insurances companieslicenced pursuant to the Health Insurance Act were authorised to provide health insurance. As a result of this amendment,EIG is in the process of transferring Euroins Health’s business to Euroins Bulgaria and, as of 30 September 2016,approximately 99% of clients had been successfully transferred. Euroins Health intends to sell its insurance licence during2017.

Distribution

Approximately 99% of Euroins Health’s GWP is generated through products offered as part of employee benefitprogrammes. Euroins Health has an account management team that works with local employers to tailor its healthinsurance products for the relevant employee benefit programme.

Regulation

Euroins Health is a fully licenced health insurance company and is supervised by the FSC (Licence № 07-Z0D/03.11.2004).

Competition

The top three insurers in the Bulgarian health insurance market, by GWP, are Generali Insurance AD, Bulgaria InsuranceAD and United Health Insurance Fund Doverie AD, all of which also offer general insurance. Bulstrad Life ViennaInsurance Group AD and Uniqa Life Insurance AD are the largest life insurance licenced companies operating on theBulgarian health insurance market.

According to statistics published by the FSC, the Bulgarian health insurance market is valued, in terms of GWP, atapproximately €22 million. In 2015, Euroins Health was the third largest health insurer in Bulgaria, with more than 30,000customers. Following the transfer of the majority of Euroins Health’s business to Euroins Bulgaria, Euroins Health’smarket share was 0.02% as at 30 June 2016, according to statistics published by the FSC.

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Euroins Life

Overview

In December 2013, EIG acquired 100% of the share capital of InterAmerican Life from Achmea, which was subsequentlyrenamed Euroins Life. Euroins Life is EIG’s life insurance subsidiary in Bulgaria, offering a full range of life insuranceproducts.

Distribution

In each of 2015 and the six months ended 30 June 2016, approximately 85% of Euroins Life’s GWP was derived frombancassurance products, while approximately 15% of GWP was derived from direct sales.

Regulation

Euroins Life is a fully licenced life insurance company subject to regulation by the FSC and it conducts its operations inline with applicable Bulgarian and EU legislation and regulation, including Solvency II and Law № 237/2015 and Norm 20/2016.

Competition

According to statistics published by the FSC, in the six months ended 30 June 2016, the Bulgarian life insurance marketwas, in terms of GWP, valued at approximately €117.5 million. In the year ended 31 December 2015, the Bulgarian lifeassurance market accounted for approximately €190 million of GDP. As of the date of this Base Prospectus, there are 12life insurance companies active in the Bulgarian market, with the five largest main players representing a 80.7% marketshare. Euroins Life’s key competitors for bancassurance products include BNP Paribas Cardif, Bulstrad (ViennaInternational Group), UBB Metlife and Uniqa.

According to statistics published by the FSC, Euroins Life had a 0.6% market share in 2015 and a 0.3% market share inthe six months ended 30 June 2016. Euroins Life is developing new product offerings, including forms of cancerinsurance, to increase its competitiveness in the market and, ultimately, its market share.

Other Operations

In February 2015 and as part of the transaction to acquire HDI Zastrahovane AD (now EIG Re) in Bulgaria, EIG agreedto acquire HDI Ukraine from Talanx International, which represented its Ukrainian insurance business. The acquisitionwas completed in August 2016 following the approval of the Antimonopoly Committee of Ukraine and the StateCommission for Regulation of Financial Services Markets of Ukraine.

Credit Ratings

On 5 December 2014, the BCRA Credit Agency (“BCRA”) assigned Euroins Bulgaria a long-term credit rating for itsability to pay claims of iBBB, with a stable outlook. According to BCRA’s rating scale, this long-term credit rating is aninvestment category and represents a “moderate ability for claims payment”. The stable outlook reflects the expectationthat no change to the rating category is expected within a year. On 26 November 2015, BCRA confirmed the assignediBBB rating.

Management

The Board of Directors is responsible for the day-to-day management of EIG, with support from the Chief ExecutiveOfficers and Chief Operating Officer. The Board of Directors is comprised of Mr Assen Milkov Christov (Chairman ofthe Board of Directors), Mr Dominique Victor François Joseph Bauduin (Vice Chairman of the Board of Directors) andMr Kiril Ivanov Boshov (Executive Director). The Chief Executive Officer of EIG is Mr. Kiril Ivanov Boshov and theChief Operating Officer of EIG is Mr. Jeroen van Leeuwen. The business address of EIG’s Board of Directors, ChiefExecutive Officers and Chief Operating Officer is 43 Christopher Columbus Blvd, Iskar region, 1592 Sofia, Bulgaria.There are no potential conflicts of interest between any duties of the members of the Board of Directors towards EIG andtheir private interests and/or other duties.

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ELG

Overview

ELG is the holding company for the Group’s investments in the leasing services sector, rental cars and used car sales inthe CEE/SEE region. The ELG Group has operations in Bulgaria, Romania and Macedonia.

The ELG Group offers leasing services in respect of both new and used vehicles, including passenger cars and lightcommercial vehicles, to small and medium sized enterprises and private individuals. The leasing operations of the ELGGroup focus on developing products offering flexible repayment plans and interest rates that are tailored to the client’srisk profile.

The ELG Group sells used cars, which were the subject of leases granted by the ELG Group to customers throughAutoplaza EAD (“Autoplaza”), that have expired. ELG acquired Autoplaza from AV in January 2013 to consolidate theGroup’s business activities relating to sales of used vehicles. This realignment of activities had the additional benefit ofcreating inter-related services between the ELG Group and the Avto Union Group, in line with the Group’s strategy.

The ELG Group also provides rental cars and fleet management services through EuroLease Rent-a-car.

For the six months ended 30 June 2016, leasing revenue (which is revenue generated from activities of the ELG Group)was BGN 9.1 million (€4.7 million), or 1.8% of 2016 Interim Revenues, as compared to BGN 8.5 million (€4.3 million),or 1.7% of 2015 Interim Revenues, for the six months ended 30 June 2015. For the year ended 31 December 2015, leasingrevenue was BGN 21.9 million (€11.2 million), or 2.4% of 2015 Total Revenues, as compared to BGN 17.8 million (€9.1million), or 3.1% of 2014 Total Revenues. See “Operating and Financial Review”.

Subsidiaries of ELG

As ELG is a holding company, it performs its principal business activities through its subsidiaries. The following tablesets forth summary descriptions of members of the ELG Group:

Entity Principal Activities

Ownershipas at 30 June2016 (%)

Holding Company

ELG (Bulgaria) ELG is a holding company of leasing businesses, whichperforms the majority of its principal business activitiesthrough its subsidiaries

—

Direct Subsidiaries

EuroLease Auto Bulgaria AD(“EuroLease Bulgaria”)(Bulgaria)

EuroLease Bulgaria provides non-bank affiliated leasingservices in Bulgaria and is the biggest generator of insurancepremiums for EIG

100

EuroLease Auto IFN SA(“EuroLease Romania”)(Romania)

EuroLease Romania provides non-bank affiliated leasingservices in Romania

77.98

EuroLease Auto EAD(“EuroLease Macedonia”)(Macedonia)

EuroLease Macedonia provides non-bank affiliated leasingservices in Macedonia

100

Autoplaza (Bulgaria) Autoplaza is a used vehicle dealership and acts as anintermediary in the resale of vehicles after repossession or theexpiry of the relevant operating lease

100

EuroLease Rent-a-car EOOD(EuroLease Rent-a-car)(Bulgaria)

EuroLease Rent-a-car provides fleet management services tothird parties, operating leases of vehicles and short-termvehicle rentals under the “Avis” and “Budget” rental brands

100

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Segment Strategy

The strategic objective for the ELG Group is to become one of the leading leasing providers in each country in which itoperates. To this end, the ELG Group aims to build strong and sustainable brand awareness based on the provision ofhigh quality, wide-ranging service, to enhance its reputation as an innovative and flexible partner to a diverse pool ofclients and to offer new, client-specific products and services in cooperation with the Group’s insurance and car dealershipbusinesses.

In furtherance of its strategic objective, the ELG Group seeks to:

• secure new and long-term lines of financing at competitive interest rates in order to increase the ELG Group’snet interest margin;

• promote organic growth in several markets;

• acquire and develop strategic leasing companies;

• offer fast and flexible approval of client applications (being one of the biggest advantages over bank-ownedleasing companies);

• promote simplicity in its business relationships with dealers, including simplified document processing, paymentand vehicle registration services;

• offer a well-balanced product package (insurance, registration, extended warranty, etc.), which better respondsto customer needs;

• expand its offering to brands that are not included in the Avto Union Group’s portfolio;

• continue to refine the ELG Group’s loan approval and customer risk assessment procedures to better determinethe term of each lease and size of down payment required in order to mitigate exposure to non-performing leases;

• further penetrate in existing markets with a focus on Macedonia, where the car leasing market is relativelyundeveloped; and

• work closely with the EIG Group and the Avto Union Group to benefit from further cross-selling opportunitiesand combinations of products that could be offered together.

Principal Business Activities

The principal business activity of the ELG Group is the provision of leasing services in respect of new and used vehicles,including passenger cars and light commercial vehicles, to small and medium sized enterprises and private individuals.The ELG Group also sells used cars and offers car rental services.

Leasing activities

ELG conducts leasing activities in Bulgaria through EuroLease Bulgaria, which is the oldest non-bank affiliated leasingcompany in Bulgaria. As at 30 June 2016, EuroLease Bulgaria had a lease portfolio of approximately €25 million. Inaddition, ELG conducts leasing activities in Romania and Macedonia, through its subsidiaries, EuroLease Romania andEuroLease Macedonia, which had lease portfolios of approximately €0.2 million and €3 million, respectively, as at 30June 2016. As at the date of this Base Prospectus, as a result of, among other things, intense competition on the domesticmarket and the difficulty in attracting competitive financing for its leasing operations, EuroLease Romania is not offeringfurther leasing services and its sole function is to service its existing portfolio.

The ELG Group plays a key role in the Group’s overall strategy, as it connects car dealers and insurers through packagedlease financing offerings. Some of the best-selling products offered by the ELG Group, which were developed incollaboration with the Euroins Group and the Avto Union Group, include lease packages with free insurance offered forthe first year and all-inclusive lease payments, which include a built-in component for insurance coverage.

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Sales of Used Cars

ELG, through its wholly owned subsidiary, Autoplaza, provides car resale services to other members of the Group andsells used cars to individual retail customers, as well as corporate customers. Autoplaza is not associated with anyparticular car brand and acquires the majority of its inventory from other Group companies as a result of repossessions,end of term buybacks and the depletion of rental stocks.

Rental Cars

Through its wholly owned subsidiary, EuroLease Rent-a-car, ELG provides self-drive car rental services to bothindividual and corporate customers under the “Avis” and “Budget” brands in Bulgaria. Short-term car rentals are primarilyprovided to individual customers on a daily, weekly or monthly basis. Long-term car rentals are primarily provided tocorporate clients and are negotiated on a case-by-case basis. As at 30 June 2016, EuroLease Rent-a-car’s fleet includedapproximately 600 vehicles of over 100 models from 25 major car manufacturers, including Fiat, Renault, Opel, Mazdaand BMW.

Distribution

Leasing

EuroLease Bulgaria offers leasing products through its network of 22 branches and at the Avto Union Group, other cardealerships and Autoplaza outlets.

EuroLease Macedonia offers leasing products through Star Motors Macedonia (a subsidiary of AV) and other dealerships.

Rental Cars

EuroLease Rent-a-car has outlets at all major airports in Bulgaria, as well as at ELG’s head office in Sofia.

Funding for leasing activities

ELG finances the activities of its subsidiaries primarily through bank loans from local and international banks, credit linesfrom other leasing institutions and the issuance of bonds to the local market. Such financing is often secured by leasereceivables. A key value driver for ELG Group profits is the net interest margin that it achieves on each lease entered intowith a lessee. ELG Group seeks to obtain financing at the lowest cost possible in order to enable it to provide attractiveleasing solutions to clients, while generating positive net interest margins. See “Operating and Financial Review—DebtObligations” for details of the ELG Group’s principal borrowings.

Pricing of leasing activities

The ELG Group’s pricing strategy for its leasing activities is based on the ELG Group’s borrowing rates (see “—Fundingfor leasing activities”) and current market rates. The ELG Group’s key competitors are bank-owned companies, whichhave direct access to lower borrowing rates. See “—Competition”.

Lease Approval and Monitoring

The ELG Group’s approach to the provision of leasing services is based on risk and return factors at the individualtransaction level and portfolio monitoring at both the individual and leasing portfolio levels.

Prior to approving a leasing transaction, a scoring model is used to determine the eligibility of the proposed client. TheELG Group has developed a two dimensional scoring model, which is applied to each individual transaction. The firstlimb of the scoring model concentrates on key commercial metrics of the transaction, such as the term of the lease, thesize of down payment and the value of the underlying asset. The second limb of the scoring model concentrates on thesuitability of the lessee. For individual lessees, the metrics that are taken into account include the income of the individual,the profession in which the individual is employed, their employment status, education and property ownership. Forcorporate lessees, the metrics that are taken into account include turnover, asset base, the number of personnel and otherfinancial indicators identifiable on the client’s income statement. To further enhance the accuracy of the scoring model,ELG’s subsidiary, EuroLease Bulgaria, has access to data held by the Central Credit Register of Bulgaria, the BulgarianNational Social Security Institute and the Bulgarian National Property Registry. Authority for transaction sign-off iscascaded in accordance with the amount to be financed. For example, a credit risk manager has authority to sign-off onindividual transactions with a value of up to €20,000, the chief executive officer of the ELG Group has authority to sign-

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off on individual transaction with a value of up to €60,000 and the board of directors of ELG has authority to sign-off onany transaction with a value in excess of €60,000.

The performance of the leasing portfolio is monitored by the ELG Group on a regular basis to mitigate against the risk ofnon-performing leases. The ELG Group has developed policies and procedures for monitoring its exposure to non-performing leases and ensuring that delinquent payments are recovered to the fullest extent possible. The ELG Group’sleasing personnel typically contact a lessee within five days of a late payment under a lease. Early stage contact allowsthe ELG Group to identify the cause of late payment and, if appropriate, adjust the repayment schedule of the lease toensure that late payments are avoided in future. If a restructuring of the repayment schedule is not appropriate for aparticular client, the leasing personnel can employ alternative methods to reduce the ELG Group’s exposure to non-performing leases, in accordance with the terms of the lease agreement. Such methods include repossession of the leasedasset and resale of the repossessed asset through Autoplaza, termination of the lease agreement and debt collection byagreement or by initiating legal proceedings. As at 30 June 2016, the ELG Group had portfolio delinquencies of morethan 90 days of 1.2% of the overall portfolio, which the ELG Group believes is better than the market average.

Regulation

ELG and its Bulgarian subsidiaries are subject to supervision by the Bulgarian National Bank, which is responsible foroverseeing compliance with the regulatory framework. ELG and its Bulgarian subsidiaries are also subject to regulationby the Commission for the Protection of Consumers, the National Social Security Institute, the State Agency for NationalSecurity and the FSC.

EuroLease Macedonia, and, in turn, ELG, are also subject to the supervision of the Ministry of Finance of Macedonia,and EuroLease Macedonia is licenced by the Ministry of Finance under the Law on Leasing and is required to submitreports on a regular basis to the National Bank of Macedonia.

Competition

Competitors of the ELG Group include other leasing companies in the region, particularly those specialised in the leasingof new passenger cars. ELG Group’s principal competitors include Interlease, Raiffeisen Leasing, UniCredit Leasing andERB Leasing, as well as importers that offer captive leasing.

Many of these competitors are members of large financial groups, which have direct access to lower borrowing rates.Bank affiliated companies are sometimes, however, subject to stricter regulatory constraints. Key factors that affect theability of the ELG Group to compete include the number of new vehicles sold on the domestic market, the price andavailability of customers’ financial resources and the ELG Group’s ability to attract clients with unique products. TheELG Group relies on its customer-oriented and efficient service and its ability to offer inter-related products with othermembers of the Group on a one-stop-shop model to compete with companies offering lower priced products.

In its rental car business, the ELG Group operates under the Avis and Budget international brands and, accordingly, isone of the key players in the market. The ELG Group’s key competitors in the rental car business are Hertz and Sixt.

AV

Overview

AV is the holding company for the Group’s investments in companies in the automobile sector (other than leasing andinsurance), which are engaged in the sale of new cars, motorcycles and scooters, the sale of original spare parts, lubricantsand accessories in Bulgaria, Romania and Macedonia. AV, through its subsidiaries, acts as an official importer and dealerof certain brands of car, as well as an official distributor of lubricants and alternative spare parts in Bulgaria. Accordingto statistics published by the ACM, the Avto Union Group had a 12.9% share of the new car sales market in Bulgaria in2015 and a 13.0% market share of the new car sales market in the six months ended 30 June 2016.

The Avto Union Group also offers its customers leasing and insurances services, which are, in turn, provided throughELG Group companies and Euroins Group companies, respectively. The leasing and insurance arrangements with ELGGroup companies are entered into on an arm’s length basis. AV also offers its customers leasing services through certainnon-ELG Group providers, including, Raiffeisen Leasing Bulgaria OOD, Unicredit Leasing EAD and ERB Leasing EAD.

For the six months ended 30 June 2016, car sales revenue (which is revenue generated from activities of the Avto UnionGroup) was BGN 75.9 million (€38.8 million), or 14.7% of 2016 Interim Revenues, as compared to BGN 79.0 million(€40.4 million), or 16.1% of 2015 Interim Revenues, for the six months ended 30 June 2015. For the year ended 31

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December 2015, the Group’s car sales revenue was BGN 151.9 million (€77.7 million), or 16.3% of 2015 Total Revenues,as compared to BGN 136.9 million, or 23.7% of 2014 Total Revenues. See “Operating and Financial Review”.

As at the date of this Base Prospectus, AV is 99.9% owned by the Issuer. See “—History of the Group”.

Subsidiaries of AV

As AV is a holding company, it performs its principal business activities through its subsidiaries. The following table setsforth summary descriptions of the members of the Avto Union Group:

Entity Principal Activities

Ownershipas at 30 June2016 (%)

Holding Company

AV AV is a holding company of the Group’s investments in theautomobile sector in Bulgaria, Romania and Macedonia, whichperforms the majority of its principal business activitiesthrough its subsidiaries.

—

Direct Subsidiaries

Bulvaria Holding EAD(“Bulvaria Holding”)(Bulgaria)

Bulvaria Holding is a dealer of Opel and Chevrolet in Sofia andan authorised service centre for SAAB.

100.00

N Auto Sofia EAD (formerlyNissan Sofia EAD) (“N Auto”)(Bulgaria)

N Auto is the largest Nissan dealer in Sofia and Veliko Turnovoand the only approved “high performance centre” in Bulgariaand the wider Balkan region, certified to maintain and repairNissan GT-R automobiles.

100.00

Star Motors EOOD (“StarMotors”) (Bulgaria)

Star Motors is an official importer of Mazda for Bulgaria,operating ten showrooms across the country.

100.00

Bulvaria Varna EOOD(“Bulvaria Varna”)(Bulgaria)

Bulvaria Varna is the exclusive dealer of Opel and Chevrolet inVarna.

100.00

Motobul EOOD (“Motobul”)(Bulgaria)

Motobul is an official importer for BP and Castrol oil productsfor Bulgaria. In 2014, Motobul signed a dealership agreementwith the Polish manufacturer Orlen.

100.00

Auto Italia EAD (“AutoItalia”) (Bulgaria)

Auto Italia is an official importer of Fiat, Fiat Professional,Maserati and Alfa Romeo cars and Piaggio, Vespa and Gilerascooters in Bulgaria.

100.00

Avto Union Service EOOD(“Avto Union Service”)(Bulgaria)

Avto Union Service is a company offering mechanical andspecialised repairs, diagnosis, technical service andmaintenance services for all car brands.

100.00

Daru Car AD (“Daru Car”)(Bulgaria)

Daru Car is an authorised BMW repairer for Bulgaria andoperates a BMW service centre in Bulgaria.

99.84

Indirect Subsidiaries(1)

EA Properties OOD (Bulgaria) EA Properties is a real estate company established in October2014 to construct new outlets for sales of Renault, Nissan and

51.00(through

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Dacia cars. Construction of the outlets is expected to becompleted by the end of September 2016.

Espace AutoEOOD)

Espace Auto EOOD (“EspaceAuto”) (Bulgaria)

Espace Auto was established in 2006 and is of the biggestRenault and Dacia dealer in Bulgaria, operating from fourshowrooms and six workshops across Sofia, Pazardzhik,Blagoevgrad and Veliko Turnovo, which are built and equippedin accordance with the latest Renault S.A.S requirements.

51.00(through NAuto)

Star Motors DOEELMacedonia (“Star MotorsMacedonia”) (Macedonia)

Star Motors Macedonia has been an official importer of Mazdain Macedonia since 2013 and operates from an outlet in Skopje.

100.00(through StarMotors)

Star Motors SH P.K. (Kosovo) Star Motors SH P.K. is an authorised Mazda and Maseratidealer in Kosovo.

100.00(through StarMotors)

__________Note:(1) On 13 September 2016, a new company, Bopar Pro, was established in Romania as a direct subsidiary of Motobul.

Segment Strategy

The Avto Union Group’s development of new product offerings focuses on increasing car sales and after-sale (i.e., repairsand servicing) revenues, further solidifying its portfolio of brands, further improving client satisfaction and completingselected openings of new client service centres. In furtherance of its strategic objectives, the Avto Union Group seeks to:

• increase its market share of new car sales in Bulgaria by extending its portfolio of mid-range and luxury cars;

• offer a greater variety of car brands and models in order to achieve higher customer satisfaction;

• achieve market recognition for its products and services, as well as its skilled sales and repair professionals;

• increase revenues generated from after-sales activities and the sale of spare parts and accessories;

• participate in more public tenders to provide car leasing solutions to a broader range of government entities; and

• monitor market trends, sales performance and customer requirements for different services in order to improvethe quality and range of services offered on an ongoing basis.

Principal Business Activities

The principal business activities of the Avto Union Group are the sale of new cars, motorcycles and scooters, the sale oforiginal spare parts, lubricants and accessories and car buy-backs. AV also offers its customers leasing and insurancesservices, which it provides through ELG Group companies.

The Avto Union Group’s portfolio, which is the largest, by number of brands, in Bulgaria, according to statistics publishedby the European Automobile Manufacturer’s Association, includes 11 automobile brands, three scooter-brands, lubricantsand car services. Through its subsidiaries, the Avto Union Group is an exclusive importer in Bulgaria for Mazda, FIAT,Alfa Romeo, Maserati and SAAB vehicles and Vespa, Piaggio and Gilera scooters, as well as an authorised dealer ofOpel, Nissan, Renault, Dacia and Chevrolet. In 2012, AV completed construction of the largest car mall in Bulgaria,which is located at the Issuer’s head office and houses showrooms for the Avto Union Group’s brands.

The Avto Union Group also promotes the cross-selling of insurance and leasing products with the EIG Group and theELG Group, respectively. In the six months ended 30 June 2016 and the year ended December 2015, sales with a leasingelement provided by the ELG Group comprised approximately 49.7% and 45.0% of the Avto Union Group’s total carsales, respectively. For each car brand offered by the Avto Union Group, a leasing product is developed jointly with amember of the ELG Group to meet client requirements. Among others, these products include Mazda Cash Leasing,Mazda Lease six Months (which offers the opportunity to spread payments over six months) and Fiat Leasing.

The Avto Union Group has entered into either a distribution contract or a dealership agreement in respect of the brandsof cars it sells. Distribution contracts (or official brand representation in the country) generally grant the Avto Union

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Group rights to market the brand, develop dealership networks, implement marketing campaigns and activities, definepricing and trade conditions and act as an ambassador for the brand in the agreed jurisdiction. The Avto Union Group’sdealings with Fiat, Alfa Romeo, Mazda, Maserati, Piaggio, Vespa and Gilera are covered by distribution contracts.Dealership agreements generally grant the Avto Union Group rights to sell and service certain brands imported officiallythrough an independent representative office. Under such dealership agreements, the Avto Union Group is bound to acceptthe pricing and marketing policies set by the car manufacturers or their representatives in the relevant country. The AvtoUnion Group’s dealings with Opel, Chevrolet, Renault, Nissan and Dacia are covered by dealership agreements.

Regulation

Sales of cars in the markets in which the Avto Union Group operates is not subject to licensing. The prices at which theAvto Union Group sells cars is dependent on the agreement with the relevant car manufacturer or importer.

Competition

According to statistics published by the ACM, the Avto Union Group had a market share of 12.9% and 13.0% of the newcar sales market in Bulgaria, based on the number of cars sold, in the year ended 31 December 2015 and the six monthsended 30 June 2016, respectively.

The following table sets forth details regarding new car sales in Bulgaria in the periods indicated, according to statisticspublished by ACM:

Vehicles Sold Market Share (%)For the six months ended 30 June

2016 2015 2016 2015

Avto Union Group ..................................... 1,898 1,885 12.95% 13.66%Toyota Balkans .......................................... 1,354 1,161 9.24% 8.41%Moto Pfohe ................................................ 1,497 1,291 10.21% 9.36%Porsche BG................................................ 1,592 1,390 10.86% 10.07%Euratek....................................................... 1,349 1,259 9.20% 9.12%Sofia France Auto ...................................... 932 809 6.36% 5.86%BMW Vertriebs GmbH – Bulgaria Branch 422 427 2.88% 3.09%Balkan Star Motors .................................... 86 40 0.59% 0.29%

Total New Car Sales Market................... 14,661 13,799 100.0 100.0

__________Note:(1) Statistics published by other entities may differ from those published by ACM as ACM’s figures rely on figures provided to it by individual

companies. Certain companies only provide information to ACM for one or certain brands of cars they sell. In addition, the figures presentedabove include the relevant companies’ share of the re-export market. These figures are not publicly available. Accordingly, investors shouldhave caution when reviewing and relying on the figures presented in the above table or in connection with other figures expressed in this BaseProspectus to have been published by ACM.

The Avto Union Group competes with other sellers of Nissan, Dacia, Renault and Opel branded cars. Avto Union Group’sprincipal competitors include: (i) Omnicar Auto, Mavro, TIT, ES Trans, FB Auto and Alliance Auto for Nissan sales inBulgaria; (ii) Auto France 3000, Omnicar Auto, Alliance Auto, Auto Express, TIT, Auto Tashev and FB Auto for Renaultand Dacia sales in Bulgaria; and (iii) Sofia Auto Bulgaria, Generous Auto, Sofia Auto GD, Poli Auto, Auto Via, OlimpiaAuto, Onix Avto, Avtosviat, Bova, Auto V1 and Stefanov Motors for Opel sales in Bulgaria. N Auto, which is 100%owned by AV, is the only dealer permitted to sell the Nissan GTR in Bulgaria.

The Avto Union Group also competes with sellers of other brands of cars with diversified business models similar to AvtoUnion Group, such as Toyota Balkans AD (Toyota and Lexus), Moto-Pfohe (Ford, Volvo, Jaguar and Land Rover) andPorsche Bulgaria (Volkswagen and Audi). Management believes that the company with the most similar business modelto the Avto Union Group is Balkan Star AD, which sells Mercedes, Mitsubishi, Chrysler, Dodge and Jeep vehicles andalso acts as a dealer for Renault and Dacia.

The Avto Union Group can offer a “one-stop-shop” for car sales, leasing (through the ELG Group) and insurance (throughthe Euroins Group), which Management believes provides The Avto Union Group with a competitive advantage overmany of its competitors.

The Avto Union Group also competes with authorised and non-authorised car repair shops in respect of its repair services.

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Although the automobile market generally has no legal or administrative entry barriers, sizeable investments ininfrastructure, working capital and inventory are required to conduct competitive and profitable operations. Profitabilityis often achieved only following sales of a critical volume of cars. Achieving the required sales levels is, in turn, generallychallenging, particularly for marginal regional players and particularly in a market environment of shrinking sales andselective buyers. As a result, the market has historically been dominated, and Management believes will continue to bedominated, by leading integrated multi-brand players with their own established sales network.

In general, competitiveness in the market is driven by pricing and the offering of discounts. To increase itscompetitiveness, the Avto Union Group offers certain price discounts and sales packages, including a 20% VAT waiverfor Mazda, new models of Fiat Punto Evo, Dacia Duster, Opel Astra and Chevrolet Cruize, as well as sales discounts forRenault and Nissan equipment.

EF

Overview

EF is engaged in the provision of non-banking financial services and investment intermediation services in Bulgaria. EFis a licenced investment intermediary, operating in accordance with EU legislation. EF is licenced and regulated by theFSC. It is a member of the Bulgarian Stock Exchange and the only Bulgarian member of the Deutsche Börse Group. EFalso holds a license to perform investment intermediary activities outside of Bulgaria and, in particular, in Germany.

In addition to brokerage services, EF provides asset management, investment banking, mergers and acquisition advisoryand other investment services to corporate and institutional clients.

For the six months ended 30 June 2016, revenue from asset management and brokerage (which is revenue generated bythe EF) was BGN 5.5 million (€2.8 million), or 1.1% of 2016 Interim Revenues, as compared to BGN 6.8 million (€3.5million), or 1.4% of 2015 Interim Revenues, for the six months ended 30 June 2015. For the year ended 31 December2015, the Group’s revenue from asset management and brokerage was BGN 13.7 million (€7.0 million), or 1.5% of 2015Total Revenues, as compared to BGN 11.0 million (€5.6 million), or 1.9% of 2014 Total Revenues, for the year ended 31December 2014. See “Operating and Financial Review”.

As at the date of this Base Prospectus, EF is 99.9% owned by the Issuer. See “—History of the Group”.

Segment Strategy

The strategic objective for EF is to promote profitable, long-term growth through diversifying its business base andincreasing its presence in growing markets and segments. The foundation of EF’s strategy is innovation and client focuswith the goal of covering a complete range of investment services and activities and providing opportunities forinvestments in the local and international capital markets.

In furtherance of its strategic objective, EF seeks to:

• increase revenue from existing clients and accelerate the growth of local business;

• become one of the leading investment intermediaries in Bulgaria and expand its offering outside of Bulgaria byentering into strategic partnerships, with a particular focus on the United Kingdom and Germany where it alreadyconducts limited activities, including accepting and executing orders for the purchase and sale of financialinstruments listed on the Deutsche Börse Group;

• continue to develop software platforms to enhance the user experience in order to increase trading activity andEF’s market share;

• develop activities in selected new segments and for identified new target groups, including through increasinginstruments available for trading on EF MetaTrader 5 (currently more than 260 instruments), providing increasedtraining and customer service opportunities and offering attractive bonus programmes;

• develop and maintain long-term relationships with clients based on trust; and

• build lasting value for its clients, shareholders, staff and the global investment community.

Management intends to evaluate opportunities for expansion of the advisory services offered by, and the geographicalreach of, EF as and when they arise.

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Principal Business Activities

The principal business activity of EF is the provision of investment and financial services and investment intermediationto individuals, corporate, institutional clients and other members of the Group. Through its network of internationalbroker-dealers, EF offers a wide range of investment products, including equity, fixed income, derivatives, foreignexchange and commodity trading, contracts for differences (“CFDs”), repos, domestic and international SWIFTpayments. In addition to brokerage services, EF provides asset management, investment banking, mergers and acquisitionadvisory, financial advisory, custody services and other investment services to corporate and institutional clients.

Brokerage services

EF acts a broker for securities transactions, including dealing in government securities, both on the Bulgarian StockExchange, of which it is a member, and on the “Over-the-Counter” market. Through its on-line trading platform, EFprovides access to a wide variety of financial instruments, including instruments traded on the Bulgarian Stock Exchange,foreign exchange transactions and CFDs. EF also offers repo-agreements, swap transactions and other instruments,according to the specific requirements of the client. EF has the capability to settle transactions globally on behalf ofinstitutional clients. EF also offers direct access to more than 40,000 financial instruments listed on the Deutsche BörseGroup through the Xetra electronic securities trading system and maintains good relationships with internationalinvestment banks.

Portfolio management

EF offers management services for financial assets, predominantly to individual and institutional investors domiciled inBulgaria. EF offers three types of individual investment portfolios (conservative, balanced and aggressive) based on theclient’s risk characteristics and assets structure, which are actively managed by EF in accordance with the specific needsof the client and typically comprise investments in stocks, bonds, alternative investments and cash. Balanced portfoliosmay be invested up to 60% in shares and alternative investments, while aggressive portfolios may be invested up to 100%in shares and alternative investments. EF computes value added risk using both the analytical and historical method anduses stress testing as a complement to value added risk. As at 30 June 2016, EF had assets under management of €7.4million, as compared to €7.3 million as at 31 December 2015 and €9.5 million as at 31 December 2014.

Investment banking

EF has a well-developed internal and external infrastructure to enable it to offer complete solutions and investmentservices to institutional clients. On behalf of institutional clients, EF performs the following investment banking services:

• management and placement (public offering) of stocks and derivative securities;

• management, underwriting and placement (public/private offering) of debt and equity instruments;

• market making for tender offers for purchasing of securities;

• assisting with the preparation of prospectuses for public offerings of securities on the local market;

• market research; and

• advisory services, including in respect of business company valuations, restructuring, mergers and acquisitions,financial analysis, debt analysis, capital structure, investment projects and credit consulting.

In line with its investment banking mandate, EF is acting as a Dealer under the Programme.

Consultancy Services

EF offers consultancy services in relation to mergers and acquisitions in Bulgaria and has the capabilities to providefinancial, legal and operational consultations on a broad range of transaction structures, including mergers and demergers,privatisations, management buyouts and acquisitions and disposals of private companies. EF also has the expertise toprovide independent valuations of businesses or companies, which are designed to allow clients to consider a wide varietyof risk factors when contemplating strategic business decisions.

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Software development

EF has developed EFOCS (Euro-Finance On-line Customer Services), a software product for direct trading on theBulgarian Stock Exchange and the Deutsche Börse Group. Using this platform, investors are able to trade simultaneouslyon different markets and to monitor in real-time the status of their assets.

EF also launched EF MetaTrader 5 in 2011, which became a popular trading platform. EF was the first investmentintermediary in Bulgaria to provide MetaTrader 5 for real trading, which is the latest version of MetaTrader.

Fees and commissions

EF derives its revenues from fees and commission from transactions with financial instruments, interest income revenuesand trading book revenues. Since 2012, EF has been increasing fees and commission revenues as a proportion of its totalrevenues. Brokerage and asset management fees are generally volume based, with special rates and discounts negotiatedfor key clients.

Key Customers

EF’s products are targeted at individual, corporate and institutional investors. EF’s customers include Bulgaria’s leadinginsurance companies and pension assurance funds and foreign investment funds. The Group is a customer of EF, inparticular, the members of the Euroins Group in Bulgaria, Romania and Macedonia. Such intra-group transactions areconducted on an arm’s length basis. As at the date of this Base Prospectus, EF has approximately 34,000 customers, ofwhich approximately 96% are individual customers and 4% are corporate and institutional customers.

EF’s customers can be divided into the following groups:

• Natural persons with limited financial experience - customers with limited investment experience that relyon EF for advice in order to reduce exposure to market risks.

• Natural persons with good financial resources – investors, which alone or assisted by investmentintermediaries, manage more actively and more effectively their own financial assets.

• Companies - commercial entities, which, according to their activity, use specific financial services to minimiserisk, obtain more effective cash flow management, acquire stakes or control of other companies and conductdirect speculative transactions.

• Institutional investors – mutual funds, insurance companies and other entities that receive information,brokerage and custody services, as well as investment consulting advisory services.

Regulation

EF is a licenced investment intermediary, operating in accordance with EU legislation. EF is licenced and regulated bythe FSC. It is a member of the Bulgarian Stock Exchange and the only Bulgarian member of the Deutsche Börse Group.EF is registered to perform investment intermediary activities in Germany.

Competition

As at 31 December 2015, there were 76 investment intermediaries active in the Bulgarian market, including 25 banks and51 non-banking financial institutions. According to statistics published by the Bulgarian Stock Exchange, EF contributedadvised on or brokered approximately 30% of the annual trading volume on the Bulgarian Stock Exchange, ranking EFfirst in terms of market turnover in 2015. EF’s key competitors for investment intermediary services are First FinancialBrokerage House (2nd largest investment intermediary in 2015, by market turnover on the Bulgarian Stock Exchange) andElana Trading (3rd largest investment intermediary in 2015, by market turnover on the Bulgarian Stock Exchange).

Intellectual Property

The Issuer registered a combined trade mark, CTM 5670591 “EUROHOLD”, on 17 October 2008 with the Patent Officeof Republic of Bulgaria covering services from class 36 according to the Nice Classification, which contains the image

element and the word element EUROHOLD.

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The Euroins Group, the ELG Group and AV have also registered and currently use trademarks in their day-to-daybusiness, including the name “EUROINS MEMBER OF EUROHOLD”, and various logos.

To the best of the Issuer’s and the Guarantor’s knowledge, there has been no material infringement of any of the Group’sintellectual property by third parties or of any third party intellectual property by the Group.

Several companies from the Avto Union Group are entitled to use in their business the trademarks of car manufacturersexclusively in respect of the performance of distribution agreements signed with such manufactures and in strictcompliance with the manufacturers’ instructions in relation to the use of the trademarks indicated in the agreements.

Dividend Policies

The Issuer and its subsidiaries pay dividends in accordance with their respective articles of association and applicablelaw, including the Commerce Act of 1996, as amended (the “Commerce Act”). Dividends are declared by the Board ofDirectors or Board of Administrators, as the case may be, of the relevant company. The payment of dividends is subjectto approval of the general meeting of the shareholders of the relevant company. The dividends are paid within one yearof date of approval by the shareholders.

The Issuer’s dividend policy is to distribute at least 35% of its net profit as dividends to its shareholders, while the dividendpolicies of the subsidiary companies, including EIG, are to distribute 90% of net profit as dividends.

In 2015, the Issuer distributed 35% of its net profit for 2014, in dividends in an amount of BGN 0.6 million. In 2016, theIssuer distributed approximately 90% of its net profit for the 2015, in dividends in amount of BGN 0.4 million.

In 2015, EF paid dividends of BGN 0.6 million to the Issuer in respect of its 2014 net profits. In 2016, EF paid dividendsof BGN 0.3 million to the Issuer in respect of its 2015 net profits. EIG, ELG and AV have not made dividend distributionsfor the last two years.

Legal Proceedings

There are no governmental, legal or arbitration proceedings (including any such proceedings which are pending orthreatened) of which the Issuer is aware which may have, or have had during the 12 months preceding the date of thisBase Prospectus, a significant effect on the financial position or profitability of the Issuer and its subsidiaries.

Information Systems and Technology

The Group’s IT management is undertaken by the IT departments of the relevant members of the Group.

Since 2006, the Euroins Group has had an integrated insurance system, INACS, which acts as the Euroins Group’s coreIT system providing a fully-integrated insurance, IT and accounting system, including policy administration, claimshandling, work with intermediaries and accounting for all lines of the Euroins Group’s business. This core IT system alsoincludes an intermediaries portal, which automates the underwriting activity, premiums billing and collection andreporting for each intermediary. Improvements to the INACS system are conducted on a regular basis. In 2015, theEuroins Group also implemented specific software to assist with the calculations and monitoring required by SolvencyII. This software includes components for the calculation of solvency capital, Own Risk and Solvency Assessments(“ORSAs”) (a set of processes forming a tool for decision-making and strategic analysis) and quantitative reporting. TheEuroins Group’s IT support function is outsourced to Profonika Ltd., an ISO 27001:2013 certified company.

Since 2010, companies within the Avto Union Group have used an enterprise resource planning (“ERP”) IT systempowered by Microsoft Dynamics. Through the ERP system, the financial management, supply chain, warehousing,distribution, manufacturing, service, customer relationships, projects and human resources functions are integrated andautomated.

Companies within the ELG Group use an end-to end lease management system designed to support the entire lifecycle ofleases and assets, which has been developed by ITSoft Ltd.

All companies within the Group maintain disaster recovery plans in local data centres in every country in which theyoperate. Back-up information is stored in external data centres and is updated at least once a day. For certain companies(mainly Euroins Group companies) back-up information is stored in real time. All companies within the Group haveentered into contracts with local suppliers to provide IT infrastructure to support their disaster recovery plans.

No major IT upgrades or other projects involving material capital expenditures are expected in the next three years.

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Insurance

The Group maintains insurance policies in respect of a number of real estate properties owned by it, which are insuredprimarily with Euroins Bulgaria and Euroins Romania. The vehicles owned by members of the Group are also insured,primarily with Euroins Bulgaria, Euroins Romania and Euroins Skopje.

Each of the Issuer, EIG, AV, ELG and EF maintain health insurance policies for the benefit of their employees. Employeehealth insurance covers expenses for illness prevention, hospital care and medication expenses. The Group does notmaintain key man insurance.

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MANAGEMENT AND EMPLOYEES

Objects

Pursuant to the Issuer’s articles of association, the scope of the Issuer’s business is: (i) the acquisition, management,assessment and sales of participations in Bulgarian and foreign companies; (ii) the acquisition, management and sales ofbonds; (iii) the acquisition, assessment and sales of patents; (iv) the granting of patent use licenses to companies in whichthe Issuer participates; and (v) the funding of companies in which the Issuer participates.

The articles of association of the Issuer further provide that it is prohibited from participating in companies that are notlegal entities; acquiring licenses not intended for use by the Group and acquiring real estate which is not intended for theIssuer’s own use. The Issuer has been incorporated for an indefinite term.

Corporate Governing Bodies

The Issuer’s articles of association provide for the following corporate governing bodies:

• a general meeting of the shareholders of the Issuer, which is the supreme governing body of the Issuer;

• the Issuer’s Supervisory Board, which is responsible for the supervision of the work of the Issuer’s ManagementBoard; and

• the Issuer’s Management Board, which is responsible for the day-to-day management and administration of theIssuer under the supervision of the Supervisor Board.

General Meeting of the Shareholders

The shareholders of the Issuer perform the functions of the general meeting of the shareholders as set forth in theCommerce Act and the articles of association, the latest version of which was approved by a decision of the shareholdersdated 29 June 2012, and published in the commercial register on 16 July 2012.

The functions of a general meeting of the shareholders include, among others, the following:

• appointing the Issuer’s external auditors;

• approving any amendment of, or supplement to, the articles of association;

• approving any increase or decrease in the Issuer’s share capital;

• adopting decisions relating to dividend payments by the Issuer;

• approving the appointment or dismissal of the members of the Issuer’s Supervisory Board; and

• approving the annual financial statements of the Issuer.

The Issuer’s Supervisory Board

The Issuer’s Supervisory Board is responsible for the general management of the Issuer’s activities, except for thosematters that, in accordance with applicable laws, are reserved to the exclusive competence of the shareholders or delegatedto the Issuer’s Management Board. In accordance with the articles of association, unless otherwise specified by applicablelaw, the following matters, among others, fall within the exclusive competence of the Issuer’s Supervisory Board:

• approving the appointment or dismissal of the members of the Issuer’s Management Board;

• determining the remuneration of the members of the Issuer’s Management Board;

• approving the rules of procedure applicable to the conduct of the Issuer’s Management Board;

• supervising the work of the Issuer’s Management Board, including hearing information and reports on each issuerelevant to the Issuer’s operations and carrying on investigations in relation to such issues and the otherperformance obligations of the Issuer’s Supervisory Board;

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• convening general meetings of the shareholders; and

• performing any other tasks delegated to it by legal regulations applicable to the Issuer, the articles of associationand any resolution of a general meeting of shareholders of the Issuer.

As at the date of this Base Prospectus, the members of the Issuer’s Supervisory Board are:

Name Age Position Date Appointed

Mr. Assen Milkov Christov 53 Chairman of theSupervisory Board

27 November 2006

Mr. Dimitar StoianovDimitrov

46 Vice Chairman of theSupervisory Board

27 November 2006

Mr. Radi Georgiev 47 Member of the SupervisoryBoard

17 April 2015

Mr. Razvan Stefan Lefter 36 Independent Member of theSupervisory Board

17 April 2015

Dar Finance EOOD,through its representativeLubomir Stoev

41 Independent Member of theSupervisory Board

13 July 2015

Summary biographical information regarding each member of the Issuer’s Supervisory Board is set out below:

Mr. Assen Milkov Christov

Mr. Christov graduated from “Sv. Klimet Ohridski” University in Sofia in 1990 with a master’s degree in physics andfrom the Open University in London in 1993 with a degree in management. He began his career as a dealer at Mobicom,the first mobile phone operator in Bulgaria. From 1996 to 2006, Mr. Christov served as chairman of the board of directorsof Starcom. From 1997 to 2000, Mr. Christov served as chairman of the board of directors of Eurobank. From 2003 to2007, Mr. Christov served as chairman of the supervisory board of EIG. Mr. Christov was appointed chairman of theboard of directors of Scandinavia Motors in 2005. Mr. Christov was appointed chairman of the board of directors of theIssuer in November 2006. Mr. Christov was appointed chairman of the board of directors of EF in 2006. Mr. Christov isalso a director of a number of other Group companies, including AV, Euroins Skopje and Euroins Romania. Mr.Christov’s brother is Mr. Velislav Christov, who is a member of the Issuer’s Management Board.

Mr. Dimitar Stoianov Dimitrov

Mr. Dimitrov graduated from the Technical University, Sofia in 1995 with a master’s degree in electronics andautomation. He began his career as an information technology manager at Starcom. From 1998 to 2005, Mr. Dimitrovserved as director of information services, statistics and analysis of EIG. From 1998 to 2006, Mr. Dimitrov served asexecutive director of Starcom. Mr. Dimitrov was appointed as procurator of the Euroins Bulgaria in 2005. Mr. Dimitrovwas appointed as vice chairman of the Issuer’s Supervisory Board in November 2006.

Mr. Radi Georgiev

Mr. Georgiev graduated from “Sv. Klimet Ohridski” University in Sofia in 1994 with a master’s degree in law. Mr.Georgiev became a member of the Sofia Bar Association in 1996. He began his career as an attorney-at-law at CorporateAdvisors Ltd. Mr. Georgiev was appointed as a member of EIG’s Supervisory Board in March 1998. Mr. Georgievbecame managing partner of Kalaidjiev and Georgiev Law Form in 2006. Mr. Georgiev was appointed as a member ofthe Issuer’s Supervisory Board in April 2015.

Mr. Razvan Stefan Lefter

Mr. Lefter graduated from the Academy of Economic Studies Bucharest, Department of Finance, Insurance, Banking andStock Exchanges with a master’s degree in banking and stock exchanges in 2003. Mr. Lefter became a chartered financialanalyst in 2008. He began his career as a corporate banker at ING Bank Romania. From June 2014 to April 2016, Mr.Lefter served as an adviser to the board of directors of Cemacon Zalau, Romania. Since October 2014, Mr. Lefter hasserved as a director of Teraplast Bistrita, Romania. Mr. Lefter became a member of the audit committee of the CFA

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Romania in 2013. Mr. Lefter was appointed as a director of Condmag Brasov, Romania in 2014. Mr. Lefter was appointedmanaging partner of RSL Capital Advisers, Romania in 2014. Mr. Lefter was appointed as a member of the Issuer’sSupervisory Board in April 2015.

Dar Finance EOOD

Dar Finance EOOD is a limited liability company incorporated and operating under the laws of Bulgaria. The Companyis registered in the commercial register at the Registry Agency, UIC: 131385495 and has its registered office at 39 ShipkaStr, Sofia, Republic of Bulgaria. As at 30 June 2016, Dar Finance EOOD held 19.04% of the Issuer’s share capital.

The business address of the members of the Issuer’s Supervisory Board of Directors is the registered office of the Issuer,namely, 43 Christopher Columbus Blvd, Iskar district, 1592, Sofia, Republic of Bulgaria AD.

The Issuer’s Management Board

In accordance with the Commerce Act and the articles of association, the Issuer’s Management Board is the executivebody of the Issuer. The competencies and powers of the Issuer’s Management Board are set out in the articles ofassociation. The Issuer’s Management Board is responsible for the day-to-day management of the Issuer’s activities andhas, in particular, the following duties:

• organising, managing and controlling the Issuer’s operations and ensuring the management and safe keeping ofthe Issuer’s property;

• approving the entry into of contracts with the Issuer’s employees, as well as amending and terminating suchcontracts;

• reporting to the Issuer’s Supervisory Board at least quarterly;

• performing any legal actions relevant to ensuring the normal functioning of the Issuer in accordance withapplicable laws, the articles of association and any resolutions of the general meeting of the shareholders;

• approving all disclosures and other public announcements relevant to the Issuer’s operations;

• presenting the annual financial statements of the Issuer, together with the director’s report for the previousfinancial year and the auditor’s report to the Issuer’s Supervisory Board and making recommendations for theallocation of profits (and payment of dividends) of the Issuer;

• adopting decisions for the dissolution or transfer of a subsidiary of the Issuer, the acquisition or alienation ofshares in other companies or the financing of any company the Issuer has shares in;

• adopting decisions for the acquisition or disposal of the Issuer’s fixed assets and property rights, the use of loans,the granting of securities, warrants, guarantees, mortgages or pledges over the Issuer’s assets and the entry intoof contracts; and

• preparing and presenting programmes and plans for the Issuer’s development for the adoption by the generalmeeting of the shareholders.

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As at the date of this Base Prospectus, the members of the Issuer’s Management Board are:

Name Age Position Date Appointed

Mr. Kiril Ivanov Boshov 45 Chairman of theManagement Board

27 November 2006

Mr. Assen Minchev 46 CEO 27 November 2006

Mr. Velislav Christov 50 Member of theManagement Board

22 October 2012

Mr. Assen Assenov 38 Member of theManagement Board

31 August 2009

Mr. Dimitar KirilovDimitrov

60 Member of theManagement Board

1 July 2012

Summary biographical information regarding each member of the Issuer’s Management Board is set out below.

Mr. Kiril Ivanov Boshov

Mr. Boshov graduated from the University of National and World Economy, Sofia in 1995 with a master’s degree inaccounting. He began his career as accountant at Mobicom, the first mobile phone operator in Bulgaria. From 1995 to1997, Mr. Boshov served as the chief accountant of Mobicom. From 1997 to 2000, Mr. Boshov served as vice chairmanof the board of directors of, and as chief operating officer of Eurobank. From 2000 to 2008, Mr. Boshov served on themanagement and supervisory board of EIG. Mr. Boshov was appointed chairman of the board of directors of EIG in 2006.Mr. Boshov was appointed vice chairman of the board of directors of EF in 2006. Mr. Boshov is also a director of anumber of other Group companies, including AV, Euroins Skopje and Euroins Romania Mr. Boshov was appointed aschairman of the Issuer’s Management Board in November 2006.

Mr. Assen Minchev

Mr. Minchev graduated from the University of National and World Economy, Sofia in 1996 with a master’s degree inaccounting. He began his career as an accountant at Starcom. From 1999 to 2007, Mr. Minchev served as a member ofthe management board of EIG. From 2000 to 2006, Mr. Minchev served as the chief executive officer of Eurohold. From2004 to 2009, Mr. Minchev served as a member of the supervisory board of Euroins Health. Mr. Minchev was appointedchief executive officer of Scandinavia Motors in 2005. Mr. Minchev was appointed chief executive officer of the Issuerin 2006.

Mr. Velislav Milkov Christov

Mr. Velislav Christov graduated from “Sv. Klimet Ohridski” University in Sofia in 1992 with a master’s degree in lawand from the New Bulgarian University with a qualification in management in 1997. Mr. Velislav Christov became amember of the Sofia Bar Association in 1993. He began his career as an attorney-at-law at Corporate Advisors Ltd. From1997 to 2000, Mr. Velislav Christov served as a head of the legal department and a member of the board of directors ofEurobank. From 1998 to 2003, Mr. Velislav Christov served as a head of the legal department and a member of thesupervisory board of EIG. From 2007 to 2015, Mr. Christov was a member of the board of directors of EIG. Mr. Christovwas appointed as a member of the Issuer’s Management Board in October 2012. Mr. Velislav Christov’s brother is Mr.Assen Christov, who is a member of the Issuer’s Supervisory Board.

Mr. Assen Emanouilov Assenov

Mr. Assenov graduated from the University of National and World Economy, Sofia in 2003 with a degree in internationaleconomic relations and, in 2002, with a master’s degree in accounting and from the University of Economics Vienna in2004, with a master’s degree in international accounting standards and international business. He began his career as anaccountant at Starcom. From 2002 to 2004, Mr. Assenov served as chief accountant for Eurohold. Mr. Assenov wasappointed as chief executive officer of Eurolease Auto in 2004. Mr. Assenov was appointed as executive director of AVin 2009. Mr. Assenov was appointed as a member of the Issuer’s Management Board in August 2009.

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Mr. Dimitar Kirilov Dimitrov

Mr. Dimitar Kirilov Dimitrov graduated from the University of National and World Economy, Sofia in 1979 with amaster’s degree in economics. He began his career as an expert at the National Statistics Institute. From 1982 to 1987,Mr. Dimitar Kirilov Dimitrov served as head office and chief expert of the Bulgarian National Bank. From 1987 to 1993,Mr. Dimitar Kirilov Dimitrov served in a number of positions at Stroitelna Bank AD. From 1993 to 1995, Mr. DimitarKirilov Dimitrov served as executive director of United Bulgarian Bank. In 1995, Mr. Dimitar Kirilov Dimitrov servedas Deputy Minister of Economic Development. In 1996, Mr. Dimitar Kirilov Dimitrov served as deputy governor ofBulgarian National Bank. From 1995 to 1996, Mr. Dimitar Kirilov Dimitrov served as chairman of the board of the BankConsolidation Company. In 1997, Mr. Dimitar Kirilov Dimitrov served as executive director of the Bank ConsolidationCompany. From 1998 to 1999, Mr. Dimitar Kirilov Dimitrov served as a member of the board of directors of DoverieHolding AD and its subsidiaries. From 2001 to 2011, Mr. Dimitar Kirilov Dimitrov served as executive director andchairman of the management board of the Bulgarian Development Bank (previously known as the Encouragement BankAD). Mr. Dimitrov was appointed as a member of the Issuer’s Management Board in July 2012.

The business address of the members of the Issuer’s Management Board is the registered office of the Issuer, namely, 43Christopher Columbus Blvd, Iskar district, 1592, Sofia, Republic of Bulgaria AD.

Corporate Governance Programme

In 2011, the Issuer adopted its Corporate Governance Programme, which aims to incorporate international standards forgood corporate governance and is based on the principles of transparency, equality, reporting and objectivity.

The main principles underlying the programme are as follows:

• protection of the rights of shareholders;

• equal treatment of shareholders, including minority and foreign shareholders;

• recognition of the rights of stakeholders and encouraging cooperation with stakeholders to achieve prosperity, createnew jobs and ensure the sustainable development of the Issuer;

• ensuring the strategic governance of the Issuer, controlling the activities of the Issuer’s management bodies andensuring these bodies are accountable to the Issuer and its shareholders; and

• ensuring the timely and correct disclosure of information on all issues pertaining to the Issuer, including its financialposition, activities, ownership and management.

Management Board Committees

As at the date of this Base Prospectus, the Issuer’s Management Board has established an audit committee.

Audit Committee

The Audit Committee was established to facilitate the monitoring of the Issuer’s financial and economic activities and toensure that there is an adequate system of internal control and risk management in operation and to monitor the activitiesof the Management Board. The Audit Committee is responsible for the promotion and strengthening of the Issuer’sinternal and external audit functions and reports directly to the Supervisory Board.

As at the date of this Base Prospectus, the members of the Audit Committee are Dimitar Stoyanov Dimitrov, IvanGeorgiev Munkov and Milena Vassilieva Avramova, each of whom are appointed for a three year term, which isautomatically renewable if other members of the Audit Committee are not appointed.

Management Remuneration

The amounts and terms of remuneration (including salaries, bonuses and other benefits) for the Chairman and themembers of the Issuer’s Management Board are determined by the Issuer’s Supervisory Board. Similar regulations onsalaries for members of the Issuer’s Management Board and employees are applied across the Issuer’s key subsidiaries.

For the year ended 31 December 2015, total remuneration received by members of the Issuer’s Supervisory Board andManagement Board was BGN 695,116 as compared to BGN 727,184 for the year ended 31 December 2014. In the six

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months ended 30 June 2016, total remuneration received by members of the Issuer’s Supervisory Board and ManagementBoard was BGN 364,242 and BGN 300,079 for the corresponding period of 2015.

Procurator

In accordance with the provisions of the Commerce Act and the Issuer’s articles of association, in 2016, the Issuerappointed a procurator. The procurator, which is a largely formal role, is nominated by the Management Board and istasked with carrying out instructions from the Management Board and representing the Issuer, and signing documents onbehalf of the Issuer, jointly with the Chief Executive Officer or the Chairman of the Management Board of the Issuer.The procurator may not block decisions of the Management Board or refuse to represent or sign on behalf of the Issuerwhen requested to do so by the Management Board. The current procurator is Mr. Hristo Stoev.

Conflicts of Interest

There are no potential conflicts of interest between any duties of the members of the Issuer’s Supervisory Board,Management Board or the Procurator towards the Issuer and their private interests and/or other duties.

Employees

As at 30 June 2016, the total number of employees of the Group was 1,790 people. The following table sets forth certaininformation regarding the Group’s employees, by key subsidiary/business line as at the dates indicated:

As at 30 June As at 31 December

2016 2015 2014

Issuer................................................................... 15 12 12Euroins Group 1,196 1,186 1,107ELG Group 94 80 98EF 23 35 26Avto Union Group 462 442 450

Total 1,790 1,755 1,693

The Group does not currently have plans to increase or decrease significantly the total number of employees within theGroup.

Employees of the Issuer and its subsidiaries are remunerated by salaries and bonuses. Employees of the Avto UnionGroup are awarded discretionary performance-related bonuses on a monthly basis.

In addition to salaries and bonuses, the Group’s employees receive monthly food vouchers (in an amount of BGN 60 peremployee), discounts for insurance, leasing and cars sold by the Group and discounts for certain leisure and touristattractions. The Group maintains employee health insurance policies. See “—Insurance”. The Group does not provideor contribute to any private pension plans.

Members of the Group provide training for its employees on a regular basis. In particular, the Avto Union Group offerstraining to its sales agents when new models of cars are launched. The Euroins Group provides training for employees,brokers and agents offering its insurance products, including anti-money laundering training. In addition, all Groupemployees are required to comply with Bulgarian anti-money laundering law by virtue of the provisions of theiremployment contracts.

Neither the Issuer nor its subsidiaries has entered into a collective bargaining agreement with its employees.

The Issuer does not employ temporary employees or officers. Temporary personnel are hired on occasion by members ofthe Euroins Group to assist with various campaigns and initiatives.

The Issuer has not issued options in favour of the members of its Management Board, Supervisory Board, employees orthird parties.

As of the date of this Base Prospectus, there are no agreements or other arrangements with the Issuer’s employees thatprovide for employee participation in the Issuer’s share capital.

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PRINCIPAL SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

Share Capital of the Issuer

As at 30 June 2016, Eurohold Bulgaria AD’s (“Eurohold Bulgaria”) authorised share capital was BGN 127,345,000,divided into BGN 127,345,000 ordinary, registered, non-privileged, dematerialised voting shares, with dividend rightsand liquidation quota, each with a nominal value of BGN 1. All ordinary shares are fully paid.

The share capital of the Issuer has not been increased by contributions in kind. The Issuer has not issued any shares thatdo not represent equity. All shares, issued by the Issuer, give their owners the right to vote at the general meeting of theshareholders.

Shareholders of the Issuer

As at the date of this Base Prospectus, the shareholders of Eurohold Bulgaria are:

Name of Shareholder Number of shares held % of shares

Starcom Holding AD................................................................................ 63,740,885 50.05%Dar Finance EOOD.................................................................................. 24,244,755 19.04%KJK Fund II Sicav-Sif Balkan Discovery................................................. 15,281,400 12.00%Other companies .................................................................................... 18,788,157 14.75%

Other individuals...................................................................................... 5,289,803 4.16%

Total shares............................................................................................. 127,345,000 100.0%

Starcom is a company based in Etropole, Sofia district, Bulgaria. Starcom is owned 51% by Assen Christov who is alsothe Chairman of the Supervisory Board of the Issuer.

Dar Finance EOOD is a limited liability company duly incorporated and operating under the laws of the Republic ofBulgaria. Dar Finance EOOD is an independent member of the Supervisory Board of Issuer.

KJK Fund II Sicav Sif Balkan is an investment fund headquartered in Luxembourg.

Related Party Transactions

In the ordinary course of its business, the Issuer has engaged, and continues to engage in transactions with related parties.Related parties include associates, subsidiaries and jointly controlled entities of the Issuer. The Issuer seeks to conduct allrelated party transactions on market terms and at market prices. As at the date of this Base Prospectus, there are notransactions with related parties, which are not conducted at arm’s length.

As at 30 June 2016, there are no transactions or proposals for transactions with related parties, which are significant forIssuer or its subsidiaries or unusual in type and conditions.

Within the Group, transactions are regularly conducted between the Issuer and its subsidiaries as a result of the nature oftheir major business activities. All transactions are performed on an arm’s length basis. Typical transactions between theIssuer and the subsidiaries include intergroup loans by which the liquidity of the separate companies is managed and aninvestment policy is followed. The Issuer grants loans to its subsidiaries for the purposes of working capital funding.Intergroup loans granted by and to the Issuer are unsecured and the interest rates are based on market rates.

As at 30 June 2016, the Issuer had outstanding loan agreements with related parties in an amount of BGN 32.7 million,BGN 26.2 million of which related to shareholder loans with Starcom.

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BOOK-ENTRY CLEARANCE SYSTEMS

The information set out below is subject to any change in or reinterpretation of the rules, regulations and procedures ofEuroclear or Clearstream, Luxembourg (together, the “Clearing Systems”) currently in effect. Investors wishing to usethe facilities of any of the Clearing Systems are advised to confirm the continued applicability of the rules, regulationsand procedures of the relevant Clearing System. None of the Issuer, the Guarantor nor any other party to the AgencyAgreement will have any responsibility or liability for any aspect of the records relating to, or payments made on accountof, beneficial ownership interests in the Notes held through the facilities of any Clearing System or for maintaining,supervising or reviewing any records relating to such beneficial ownership interests.

Book-entry Systems

Euroclear and Clearstream, Luxembourg

Euroclear and Clearstream, Luxembourg each holds securities for its customers and facilitates the clearance andsettlement of securities transactions by electronic book-entry transfer between their respective account holders. Euroclearand Clearstream, Luxembourg provide various services including safekeeping, administration, clearance and settlementof internationally traded securities and securities lending and borrowing. Euroclear and Clearstream, Luxembourg alsodeal with domestic securities markets in several countries through established depository and custodial relationships.Euroclear and Clearstream, Luxembourg have established an electronic bridge between their two systems across whichtheir respective participants may settle trades with each other.

Euroclear and Clearstream, Luxembourg customers are world-wide financial institutions, including underwriters,securities brokers and dealers, banks, trust companies and clearing corporations. Indirect access to Euroclear andClearstream, Luxembourg is available to other institutions that clear through or maintain a custodial relationship with anaccount holder of either system.

Transfers of Notes Represented by Registered Global Notes

Transfers of any interests in Notes represented by a Registered Global Note within Euroclear and Clearstream,Luxembourg will be effected in accordance with the customary rules and operating procedures of the relevant clearingsystem.

On or after the Issue Date for any Series, transfers of Notes of such Series between accountholders in Clearstream,Luxembourg and Euroclear will generally have a settlement date three business days after the trade date (T+3). Thecustomary arrangements for delivery versus payment will apply to such transfers.

Clearstream, Luxembourg and Euroclear have each published rules and operating procedures designed to facilitatetransfers of beneficial interests in Registered Global Notes among participants and accountholders of Clearstream,Luxembourg and Euroclear. However, they are under no obligation to perform or continue to perform such procedures,and such procedures may be discontinued or changed at any time. None of the Issuer, the Guarantor, the Agents or anyDealer will be responsible for any performance by Clearstream, Luxembourg or Euroclear or their respective direct orindirect participants or accountholders of their respective obligations under the rules and procedures governing theiroperations and none of them will have any liability for any aspect of the records relating to or payments made on accountof beneficial interests in the Notes represented by Registered Global Notes or for maintaining, supervising or reviewingany records relating to such beneficial interests.

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TAXATION

General

Prospective purchasers of Notes are advised to consult their tax advisers as to the consequences, under the tax laws of thecountries of their respective citizenship, residence or domicile, of a purchase of Notes, including, but not limited to, theconsequences of receipt of payments under the Notes and their disposal or redemption.

Bulgaria Taxation

The following is a general discussion of certain Bulgarian tax consequences of the acquisition, ownership and disposal ofNotes. It does not purport to be a comprehensive description of all tax considerations which may be relevant to a decisionto purchase Notes, and, in particular, does not consider any specific facts or circumstances that may apply to a particularpurchaser of Notes, availability of double tax treaty relief in respect of the Notes, or procedural steps for claiming suchdouble tax treaty relief. This summary is based on the laws of Bulgaria currently in force and as applied on the date ofthis Base Prospectus, which are subject to change, possibly with retroactive effect.

Prospective purchasers of Notes are advised to consult their own tax advisers as to the tax consequences of the purchase,ownership and disposal of Notes, including the effect of any state or local taxes, under the tax laws of Bulgaria and eachcountry in which they are tax-residents. The acquisition of the Notes by non-Bulgarian tax-resident Noteholders or thepayment of interest under the Notes may trigger additional tax payments in the country of tax residence of the Noteholder.Such payments are not covered by this summary; it is, therefore, advisable to review the provisions of the applicabletreaties on the avoidance of double taxation.

Taxation of Bulgarian tax-resident Noteholders other than individuals

Pursuant to the Bulgarian Corporate Income Tax Act (“Corporate Income Tax Act”), Bulgarian tax-resident taxpayersother than individuals are subject to full, all-inclusive corporate income tax liability on their worldwide profits. Bulgariantax-resident entities are legal entities established under Bulgarian law, including different form of partnership companiesestablished under Regulation (EC) № 2157/2001 of the Council and cooperative societies established under Regulation (EC) № 1435/2003 of the Council where they have their registered office within the country and are entered in a Bulgarian register.

In addition, non-Bulgarian legal entities shall be taxed under the laws of Bulgaria in respect of profit realised through apermanent establishment in Bulgaria, or from the administration of and/or deriving income from property in such apermanent establishment. The broad definition of “permanent establishment’’ in Bulgarian law provides that it comprisesof: (i) a definite place (owned, rented or used on another ground), through which the foreign person/entity implementsfully or partially an economic activity in the country, e.g. place of management, branch or trade representative officeregistered in the country; office; chamber; studio; shop and others; (ii) activity in Bulgaria by persons (other than certainrepresentatives with an independent status), authorised to conclude contracts on behalf of foreign persons; (iii) executionof commercial transactions, including the provision of services through personnel assigned locally, and constructionworks, which have been completed in a lasting manner in Bulgaria, even when the foreign person has no permanentrepresentative or a definite place in the country. The scope of the activities of a non-resident that may amount to aBulgarian permanent establishment may be governed by commonly accepted international standards when the state ofresidence has concluded a double tax treaty with Bulgaria.

Taxable income is based on pre-tax profit, as shown in an entity’s financial statements and is subject to adjustment bycertain increasing (add-backs) and decreasing (deductions) items set forth by the corporate income tax legislation.

Taxable income includes all types of income realised during the financial year, such as interest income and income fromcapital gains realised with respect to the Notes, subject to certain exceptions.

The statutory rate of Bulgarian corporate income tax is 10%

Interest income of corporate residents

Interest income earned by Bulgarian corporate residents should normally form part of their annual taxable profits in linewith the applicable accounting framework and should be taxed at the standard corporate income tax rate of 10%. However,certain categories of Bulgarian investors, such as collective investment schemes and pension funds, may benefit from fullcorporate tax exemption.

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Capital gains of corporate residents

Capital gains realised by resident legal persons on the disposal of debt instruments are normally included in their annualtaxable income following the applicable accounting framework and taxed at the standard income tax rate of 10%.

Taxation of individual Bulgarian tax-resident Noteholders

Pursuant to the Bulgarian Personal Income Tax Act (the “Personal Income Tax Act”), individual Bulgarian tax-residentNoteholders are subject to tax on their worldwide income.

Interest received and capital gains realised with respect to debt securities, such as the Notes, are generally subject topersonal income tax at 10%.

Individual Bulgarian tax residents are, in general:

(a) any individuals whose permanent place of residence is in Bulgaria;

(b) any individual whose stay in Bulgaria exceeds 183 days in each period of 12 consecutive months;

(c) any individual who resides abroad on assignment of the Bulgarian State, its authorities and/or its organisations,or Bulgarian establishments, and the members of his/her family; and

(d) whose centre of vital interests (център на жизнени интереси) is located in Bulgaria, where “centre of vitalinterests” means the country to which the individual is closely connected due to family ties, property, the placefrom which the person carries out a labour, professional or economic activity, and the place from which theperson manages the property thereof.

An applicable treaty on the avoidance of double taxation may set forth a definition of tax residence that prevails overthe domestic definition of tax residence set out in the Personal Income Tax Act.

Interest income of individuals

Interest income and discounts, accruing to Bulgarian individuals, on Notes or on similar debt instruments, issuedaccording to the laws of another EU Member State or EEA State, should not be subject to tax in Bulgaria.

Capital gains of individuals

Capital gains realised by resident individuals on debt instruments are normally included in their annual taxable incomeand taxed at the standard income tax rate of 10%.

Taxation of non-Bulgarian tax-resident Noteholders

According to Bulgarian law, as the Issuer is a Bulgarian tax resident, income from the Notes, as well as gain realised ondisposition of such Notes, originate from a source within Bulgaria.

Interest income

Generally, a 10% withholding tax shall be levied on the gross amount of the interest on Notes accrued to a legal entitywhich is a non-Bulgarian tax-resident Noteholder. Interest income is subject to tax on an accruals basis in Bulgaria wherethe taxable event follows the accrual dates in the book ledgers of the Bulgarian issuer. Therefore, even if no payment ofinterest is due on the instrument, withholding taxes may still apply to the extent the borrower/issuer accrues interestexpense over the term of the instrument in line with the applicable accounting framework.

The withholding tax may be subject to reduction or elimination pursuant to the terms of an applicable double tax treaty.Effective from 1 January 2014, interest income from Notes and other debt securities issued by Bulgarian residentcompanies which have been admitted for trading on a regulated market within the European Union (EU) or the EuropeanEconomic Area (EEA) as defined in Directive 2004/39/EC is exempt from Bulgarian withholding tax irrespective of theresident status of the income recipient.

If interest income or proceeds of disposition of the Notes are considered as being received through a permanentestablishment in Bulgaria of a non-Bulgarian legal entity, it shall be treated by Bulgarian law as a Bulgarian tax-payer

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Noteholder and subject to taxation as a local legal entity (see “— Taxation of Bulgarian tax-resident Noteholders otherthan individuals”).

Individual Noteholders, residents for tax purposes in an EU Member State or EEA country, shall benefit from thepreferential treatment granted to Bulgarian tax-resident individuals and their interest income on the Notes shall not betaxable. Individual Noteholders, resident for tax purposes outside of an EU Member State or EEA country shall be subjectto withholding tax in Bulgaria at the rate of 10%.

Capital Gains

Capital gains realised on sale or other disposition of the Notes (determined as the positive difference between thedisposition price and the acquisition price) received by a non-Bulgarian tax-resident Noteholder are subject to a tax inBulgaria at the rate of 10%, unless reduced or exempt under a double tax treaty (see below “— Non-Bulgarian tax-residentNoteholders: Tax Treaty Relief”). Although the law names this tax on capital gains as a “withholding tax’’, it is providedto be paid by the recipient of the income. Payment is due on a quarterly basis, in arrears, until the end of the monthfollowing the calendar quarter, with the income recipient being subject to an obligation to file a form tax return to theSofia Territorial Office of the Bulgarian National Revenue Agency, and pay the tax due. The National Revenue Agencywill issue a certificate for the tax paid, upon request.

Where the sale price is partly paid and the income recipient is a non-Bulgarian tax-resident individual, the capital gainstax is levied on the positive difference between the received part of the sale proceeds and the documented acquisitionprice of the Notes corresponding to such received selling price. The tax is due upon receipt of the sales consideration.

Non-Bulgarian Tax-resident Noteholders: Tax Treaty Relief

A reduction in the rate of Bulgarian withholding tax or complete exemption from the applicable Bulgarian taxation maybe provided under a double tax treaty between Bulgaria and the country of which the non-Bulgarian Noteholder is aresident for tax purposes.

To obtain a benefit of such tax treaty a Noteholder must provide to the Bulgarian tax authorities (or to the payer of theincome, if the income does not exceed BGN 500,000 per year) with a certificate of tax residence issued by the competenttax authority of the relevant treaty country, an affidavit evidencing that the Noteholder is beneficial owner of the incomeand that the Noteholder does not have a permanent establishment in Bulgaria, as well as any other documents andinformation as set out in tax laws and regulations or requested by the tax authorities in the course of the tax treaty clearanceprocedure. If the tax authorities are satisfied by the documentary evidence submitted they will issue an opinion for theapplication of the tax treaty (tax relief). This tax relief, in principle, is valid for all identical income received under thesame relationship (e.g., for all interest payments on the Notes), unless changes in relevant circumstances occur; however,according to certain court rulings the certificate of tax residence and affidavits must be renewed on an annual basis.Because of uncertainties related to the substantive and procedural requirements, including their interpretation by theconcrete tax officials, Non-Resident Noteholders in practice may not be able in certain occasions to obtain advance treatyrelief on receipt of proceeds from a source within Bulgaria. This is often the case when the requirements for beneficialownership of the income are not met and tax relief is denied on the basis of perceived tax treaty abuse. In suchcircumstances, the non-resident may be asked to prove that it directly bears substantial part of the risk associated with theinvestment, has the right to dispose of the income and is not bound to repatriate it further, etc.

Taxation of Payments to the Noteholders from the Guarantor

In case of a default by the Issuer, the Guarantee may be enforced and the Guarantor caused to make direct payments tothe benefit of the Noteholders. Bulgarian law is silent regarding the tax treatment of such payments and the Issuer is notaware of any publicly available guidelines of the tax authorities addressing this matter. If payments are made by theGuarantor under the Note Guarantee, such payments may, for Bulgarian tax purposes, or the parts of such paymentsreferable to interest on the Notes, be re-qualified as payments of interest income and be subjected to the abovementionedwithholding tax of 10% (absent tax treaty relief, see “— Non-Bulgarian tax-resident Noteholders: Tax Treaty Relief”).

U.S. Taxation

Foreign Account Tax Compliance Withholding

The Issuer and financial institutions through which payments on or with respect to the Notes are made may, under certaincircumstances, be required pursuant to Sections 1471 through 1474 of the Code, the regulations promulgated thereunder,an agreement described in Section 1471(b) of the Code, and any intergovernmental agreement and implementing laws infurtherance of such Sections of the Code (collectively, “FATCA”) to withhold at a rate of up to 30%. on all, or a portion

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of, payments in respect of the Notes made after 31 December 2018 to an investor or any other non-U.S. financialinstitution through which payment on the Notes is made that is not in compliance with FATCA. Neither the Issuer northe Guarantor will pay additional amounts in respect of amounts deducted in connection with FATCA. This withholdingdoes not apply to payments on Notes that are outstanding on the date that is six months after the date on which the finalregulations that define “foreign passthru payments” are published (which have not yet been published) unless the Notesare characterised as equity or do not provide for a fixed term for U.S. federal income tax purposes.

Bulgaria and the United States of America have signed an intergovernmental agreement (“IGA”) to implement FATCA.Under the terms of the IGA, the Issuer expects to be treated as a “Reporting Bulgarian Financial Institution” for purposesof FATCA and has registered with the U.S. Internal Revenue Service. The Issuer should not be subject to FATCAwithholding on payments it receives and currently is not required to withhold under FATCA on payments of non-U.S.source income it makes. The obligations of the Issuer under the IGA include reporting certain information to the Bulgariantax authorities and obtaining information from its account holders, which may include investors in the Notes. Additionalintergovernmental agreements similar to the IGA have been entered into or are under discussion by other jurisdictionswith the United States. Different rules than those described above may apply depending on whether a payee is resident ina jurisdiction that has entered into an intergovernmental agreement to implement FATCA.

FATCA may also affect payment to any ultimate investor that is a financial institution that is not entitled to receivepayments free of FATCA withholding, or an ultimate investor that fails to provide its broker (or other custodian orintermediary from which it receives payment) with any information, forms, other documentation or consents that may benecessary for the payments to be made free of FATCA withholding. Investors should choose custodians or intermediarieswith care (to ensure each is compliant with FATCA or other laws or agreements related to FATCA) and provide eachcustodian or intermediary with any information, forms, other documentation or consents that may be necessary for suchcustodian or intermediary to make a payment free of FATCA withholding. Investors should consult their own tax adviserto obtain a more detailed explanation of FATCA and how FATCA may affect them. Pursuant to the Terms and Conditionsof the Notes, the Issuer’s obligations under the Notes are discharged once it has paid the common safekeeper for theclearing systems (as bearer of the Notes) and neither the Issuer nor any Paying Agent will be required to pay additionalamounts should FATCA withholding apply to any amount transmitted through the clearing systems and thereafter throughcustodians or other intermediaries.

Application of FATCA to the Notes is uncertain at this time. The above description is based in part on regulations, officialguidance and intergovernmental agreements implementing FATCA, all of which are subject to change. Prospectiveinvestors should consult their tax advisers on how these rules may apply to the Issuer and to payments they may receivein connection with the Notes.

The Proposed Financial Transaction Tax

On 14 February 2013, the European Commission published a proposal (the “Commission’s Proposal”) for a Directivefor a common FTT in Belgium, Germany, Estonia, Greece, Spain, France, Italy, Austria, Portugal, Slovenia and Slovakiathe participating Member States. The Commission’s Proposal has very broad scope and could, if introduced, apply tocertain dealings in the Notes (including secondary market transactions) in certain circumstances. Primary markettransactions referred to in Article 5(c) of Regulation (EC) № 1287/2006 are expected to be exempt. Under the Commission’s Proposal the FTT could apply in certain circumstances to persons both within and outside of theparticipating Member States. Generally, it would apply to certain dealings in the Notes where at least one party is afinancial institution, and at least one party is established in a participating Member State. A financial institution may be,or be deemed to be, “established” in a participating Member State in a broad range of circumstances, including: (i) bytransacting with a person established in a participating Member State; or (ii) where the financial instrument which issubject to the dealings is issued in a participating Member State. However, the FTT proposal remains subject tonegotiation between the participating Member States. It may, therefore, be altered prior to any implementation, the timingof which remains unclear. Additional EU Member States may decide to participate. Prospective holders of the Notes areadvised to seek their own professional advice in relation to the FTT.

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SUBSCRIPTION AND SALE AND TRANSFER AND SELLING RESTRICTIONS

The Dealers have, in a programme agreement (the “Programme Agreement”) dated 15 November 2016, agreed with theIssuer and the Guarantor a basis upon which they or any of them may from time to time agree to purchase Notes. Anysuch agreement will extend to those matters stated under “Form of the Notes” and “Terms and Conditions of the Notes”.In the Programme Agreement, the Issuer (failing which, the Guarantor) has agreed to reimburse the Dealers for certain oftheir expenses in connection with the establishment and any future update of the Programme and the issue of Notes underthe Programme and to indemnify the Dealers against certain liabilities incurred by them in connection therewith.

In order to facilitate the offering of any Tranche of Notes, certain persons participating in the offering of the Tranche mayengage in transactions that stabilise, maintain or otherwise affect the market price of the relevant Notes during and afterthe offering of the Tranche. Specifically such persons may over-allot or create a short position in the Notes for their ownaccount by selling more Notes than have been sold to them by the Issuer. Such persons may also elect to cover any suchshort position by purchasing Notes in the open market. In addition, such persons may stabilise or maintain the price ofthe Notes by bidding for or purchasing Notes in the open market and may impose penalty bids, under which sellingconcessions allowed to syndicate members or other broker-dealers participating in the offering of the Notes are reclaimedif Notes previously distributed in the offering are repurchased in connection with stabilisation transactions or otherwise.The effect of these transactions may be to stabilise or maintain the market price of the Notes at a level above that whichmight otherwise prevail in the open market. The imposition of a penalty bid may also affect the price of the Notes to theextent that it discourages resales thereof. No representation is made as to the magnitude or effect of any such stabilisingor other transactions. Such transactions may commence on or after the date on which adequate public disclosure of theterms of the offer of the relevant Tranche of Notes is made and, if commenced, may be discontinued at any time. UnderU.K. laws and regulations stabilising activities may only be carried on by the Stabilising Manager(s) named in theapplicable Final Terms (or persons acting on behalf of any Stabilising Manager(s)) and must end no later than the earlierof 30 days after the issue date of the relevant Tranche of Notes and 60 days after the date of the allotment of the relevantTranche of Notes.

Transfer Restrictions

Transfer of Notes in or into the United States or to U.S. persons is restricted. Prospective purchasers of Notes in theUnited States are advised to consult legal counsel prior to making any purchase, offer, sale, resale or other transfer ofany Notes.

Each purchaser of Registered Notes (other than a person purchasing an interest in a Registered Global Note with a viewto holding it in the form of an interest in the same Global Note) or person wishing to transfer an interest from oneRegistered Global Note to another or from global to definitive form or vice versa, will be required to acknowledge,represent and agree, and each person purchasing an interest in a Registered Global Note with a view to holding it in theform of an interest in the same Global Note will be deemed to have acknowledged, represented and agreed, as follows(terms used in this paragraph that are defined in Regulation S are used herein as defined therein):

(a) that it is acquiring the Notes in an “offshore transaction” within the meaning of Regulation S under the SecuritiesAct and is not a U.S. person;

(b) that it is not acquiring the Notes as a result of any “directed selling efforts” as defined in Regulation S under theSecurities Act;

(c) that the Notes and the Guarantee are being offered and sold in a transaction not involving a public offering inthe United States within the meaning of the Securities Act, and that the Notes and the Guarantee have not beenand will not be registered under the Securities Act under the securities laws of any state or other jurisdiction ofthe United States and may not be offered or sold, directly or indirectly, in or into the United States or to, or forthe account or benefit of, U.S. persons except as set forth below;

(d) that, unless it holds an interest in a Registered Global Note and is a person located outside the United States whois not a U.S. person, if in the future it decides to resell, pledge or otherwise transfer the Notes or any beneficialinterests in the Notes, it will do so, prior to the date which is two years after the later of the last Issue Date forthe Notes in the relevant Series and the last date on which the Issuer or an affiliate of the Issuer was the ownerof such Notes, only (i) to the Issuer or any affiliate thereof, (ii) outside the United States in compliance with Rule903 or Rule 904 under the Securities Act, or (iii) pursuant to an effective registration statement under theSecurities Act, in each case in accordance with all applicable securities laws of any state or other jurisdiction ofthe United States;

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(e) that it will, and will require each subsequent holder to, notify any purchaser of Notes from it of the resalerestrictions referred to in paragraph (d) above, if then applicable;

(f) that Notes offered outside the United States in reliance on Regulation S will be represented by one or moreRegistered Global Notes;

(g) that, if it is outside the United States and is not a U.S. person, if it should resell or otherwise transfer Notes priorto the expiration of the distribution compliance period (defined as 40 calendar days after the later of thecommencement of the offering and the closing date with respect to the original issuance of the Notes), it will doso only (i) outside the United States in compliance with Rule 903 or 904 under the Securities Act and (ii) inaccordance with all applicable securities laws of any state or other jurisdiction of the United States; and itacknowledges that the Registered Global Notes will bear a legend to the following effect unless otherwise agreedto by the Issuer:

“THIS SECURITY HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE U.S. SECURITIESACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANYSTATE OR OTHER JURISDICTION OF THE UNITED STATES AND, ACCORDINGLY, MAY NOT BEOFFERED OR SOLD, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES OR TO, ORFOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT IN ACCORDANCE WITH THEAGENCY AGREEMENT AND PURSUANT TO EITHER AN EXEMPTION FROM REGISTRATIONUNDER THE SECURITIES ACT OR AN EFFECTIVE REGISTRATION STATEMENT UNDER THESECURITIES ACT. THIS LEGEND SHALL CEASE TO APPLY UPON THE EXPIRY OF THE PERIOD OF40 DAYS AFTER THE COMPLETION OF THE DISTRIBUTION OF ALL THE NOTES OF THE TRANCHEOF WHICH THIS NOTE FORMS PART.”; and

(h) that the Issuer, the Guarantor and others will rely upon the truth and accuracy of the foregoingacknowledgements, representations and agreements and that it agrees that, if any of such acknowledgements,representations or agreements made by it are no longer accurate, it shall promptly notify the Issuer and theGuarantor; and that, if it is acquiring Notes as a fiduciary or agent for one or more accounts it represents that ithas sole investment discretion with respect to each such account and that it has full power to make the foregoingacknowledgements, representations and agreements on behalf of each such account.

Selling Restrictions

United States

The Notes and the Guarantee have not been and will not be registered under the Securities Act or under the securitieslaws of any state or other jurisdiction of the United States and may not be offered or sold, directly or indirectly, in or intothe United States or to, or for the account or benefit of, U.S. persons except pursuant to an exemption from the registrationrequirements of the Securities Act, and otherwise in accordance with all applicable securities laws of any state or otherjurisdiction of the United States. Terms used in this paragraph have the meanings given to them by Regulation S underthe Securities Act.

Bearer Notes are subject to U.S. tax law requirements and may not be offered, sold or delivered within the United Statesor its possessions or to a United States person, except in certain transactions permitted by U.S. Treasury regulations.Terms used in this paragraph have the meanings given to them by the U.S. Internal Revenue Code of 1986 and Treasuryregulations promulgated thereunder.

Each Dealer has represented and agreed, and each further Dealer appointed under the Programme will be required torepresent and agree, that it has not offered sold or delivered and will not offer, sell or deliver any Notes (a) as part of theirdistribution at any time or (b) otherwise until 40 calendar days after the completion of the distribution of all Notes of theTranche of which such Notes are a part (the “distribution compliance period”), as determined and certified by the relevantDealer or, in the case of an issue of Notes on a syndicated basis, the relevant lead manager, directly or indirectly, in orinto the United States or to, or for the account or benefit of, U.S. persons. Each Dealer has further agreed, and eachfurther Dealer appointed under the Programme will be required to agree, that it will send to each distributor, dealer orperson receiving a selling concession, fee or other remuneration that purchases any Notes from it during the distributioncompliance period a confirmation or other notice setting forth the restrictions on offers and sales of Notes in or into theUnited States or to, or for the account or benefit of, U.S. persons. Terms used in this paragraph have the meanings givento them by Regulation S under the Securities Act.

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Until 40 calendar days after completion of the distribution of all Notes of a Tranche, an offer or sale of such Notes, directlyor indirectly, in or into the United States by any dealer (whether or not participating in the offering) may violate theregistration requirements of the Securities Act.

Public Offer Selling Restriction under the Prospectus Directive

In relation to each Member State of the European Economic Area which has implemented the Prospectus Directive (each,a “Relevant Member State”), each Dealer has represented and agreed, and each further Dealer appointed under theProgramme will be required to represent and agree, that with effect from and including the date on which the ProspectusDirective is implemented in that Relevant Member State (the “Relevant Implementation Date”) it has not made and willnot make an offer of Notes which are the subject of an offering contemplated by this Base Prospectus as completed bythe Final Terms (or, in the case of Exempt Notes, the applicable Pricing Supplement) in relation thereto to the public inthat Relevant Member State, except that it may, with effect from and including the Relevant Implementation Date, makean offer of such Notes to the public in that Relevant Member State:

(a) at any time to any legal entity which is a qualified investor as defined in the Prospectus Directive;

(b) at any time to fewer than 150 natural or legal persons (other than qualified investors as defined in the ProspectusDirective) subject to obtaining the prior consent of the relevant Dealer or Dealers nominated by the Issuer forany such offer; or

(c) at any time in any other circumstances falling within Article 3(2) of the Prospectus Directive,

provided that no such offer of Notes referred to in (a) to (c) above shall require the Issuer, the Guarantor or any Dealer topublish a prospectus pursuant to Article 3 of the Prospectus Directive or supplement a prospectus pursuant to Article 16of the Prospectus Directive.

For the purposes of this provision, the expression an “offer of Notes to the public” in relation to any Notes in anyRelevant Member State means the communication in any form and by any means of sufficient information on the termsof the offer and the Notes to be offered so as to enable an investor to decide to purchase or subscribe the Notes, as thesame may be varied in that Relevant Member State by any measure implementing the Prospectus Directive in thatRelevant Member State and the expression “Prospectus Directive” means Directive 2003/71/EC (as amended, includingby Directive 2010/73/EU), and includes any relevant implementing measure in the Relevant Member State.

United Kingdom

Each Dealer has represented and agreed, and each further Dealer appointed under the Programme will be required torepresent and agree, that:

(a) in relation to any Notes which have a maturity of less than one year, (i) it is a person whose ordinary activitiesinvolve it in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes ofits business and (ii) it has not offered or sold and will not offer or sell any Notes other than to persons whoseordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or asagent) for the purposes of their businesses or who it is reasonable to expect will acquire, hold, manage or disposeof investments (as principal or agent) for the purposes of their businesses where the issue of the Notes wouldotherwise constitute a contravention of Section 19 of the Financial Services and Markets Act 2000 (FSMA) bythe Issuer;

(b) it has only communicated or caused to be communicated and will only communicate or cause to becommunicated an invitation or inducement to engage in investment activity (within the meaning of Section 21of the FSMA) received by it in connection with the issue or sale of any Notes in circumstances in which Section21(1) of the FSMA does not apply to the Issuer or the Guarantor; and

(c) it has complied and will comply with all applicable provisions of the FSMA with respect to anything done by itin relation to any Notes in, from or otherwise involving the United Kingdom.

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Bulgaria

Reference is made to the general selling restriction for the European Economic Area, which applies to offers made inBulgaria. The terms and conditions of this Base Prospectus have not been approved by and will not be submitted forapproval as a prospectus to the Financial Supervision Commission of the Republic of Bulgaria (the “FSC”) nor theapproval of the terms and conditions of this Base Prospectus as a prospectus by the competent authority of anotherRelevant Member State have been or will be notified to the FSC in accordance with the Prospectus Directive for purposesof public offering or admission of securities for trade on a regulated market in the Republic of Bulgaria. Accordingly, theNotes which are subject to the offering contemplated by this Base Prospectus may not be offered to the public in Bulgariaor admitted to trading on a regulated market in Bulgaria in a manner that would require the publication of a prospectuscompliant with the Bulgarian Law on Public Offering of Securities, approved by the FSC, or approved by the competentauthority of another Relevant Member State and notified to the FSC in accordance with the Prospectus Directive. Theobligation to publish a prospectus would not apply to the public offering in Bulgaria of the Notes in any of thecircumstances specified in Article 3(2) of the Prospectus Directive. Under the Bulgarian Law on Public Offering ofSecurities and for the purposes of this provision public offering of the Notes in Bulgaria means the communication to 100and more persons or indefinite number of persons in any form and by any means of sufficient information on the termsof the offer and the Notes to be offered so as to enable an investor to decide to purchase or subscribe the Notes, exceptwhen such offer is made as part of liquidation, enforcement or insolvency proceedings.

Unless otherwise provided in this Base Prospectus, any person making or intending to make any offer within Bulgaria ofthe Notes which are the subject of the offering contemplated in this Base Prospectus should only do so in circumstancesin which no obligation arises for the Issuer, the Guarantor or any of the Dealers to produce a prospectus for such offercompliant with the Bulgarian Law on Public Offering of Securities, approved by the FSC, or approved by the competentauthority of another Relevant Member State and notified to the FSC in accordance with the Prospectus Directive. Save asprovided in this Base Prospectus, none of the Issuer, the Guarantor or any Dealer has authorised the making of any publicoffer of the Notes in Bulgaria and neither the Issuer nor the Guarantor has consented to the use of this Base Prospectusby any other person in connection with any public offering of the Notes in Bulgaria.

Each Dealer has represented and agreed that it has not taken, and will not take, any action which would result in the Notesbeing classed as “public attracting of deposits or other refundable funds” by the Issuers in Bulgaria within the meaningof § 1 (1), item 3 of the Complementary Provision of the Bulgarian Law on Credit Institutions.

Romania

MEMBERS OF THE GENERAL PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN ANY OFFERING OF NOTESUNDER THE PROGRAMME. ANY OFFERING OF NOTES UNDER THE PROGRAMME IS ONLY DIRECTED ATAND ADDRESSED TO (I) PERSONS WHO ARE QUALIFIED INVESTORS WITHIN THE MEANING OFARTICLE 2 PARA 1 ITEM 15 OF THE ROMANIAN CAPITAL MARKETS LAW NO. 297/2004, AS AMENDEDAND ARTICLE 2 PARA 2 ITEM G1 OF REGULATION 1/2006 REGARDING ISSUERS AND SECURITIESOPERATIONS, AS AMENDED AND/OR (II) FEWER THAN 150 INDIVIDUALS OR LEGAL ENTITIES OTHERTHAN QUALIFIED INVESTORS AND/OR (III) INVESTORS, EACH ACQUIRING SECURITIES FOR A TOTALCONSIDERATION OF AT LEAST THE RON EQUIVALENT OF EUR 100,000 AND/OR (IV) INVESTORSACQUIRING SECURITIES WHOSE DENOMINATION PER UNIT AMOUNTS TO AT LEAST EUR 100 000AND/OR (V) ANY OTHER PERSONS WHO MAY LAWFULLY SUBSCRIBE AND PURCHASE NOTES OFFEREDUNDER THE PROGRAMME WITHOUT THE DRAWING UP AND/OR PUBLICATION OF A PROSPECTUS ORANY OTHER APPROVALS BEING REQUIRED, IN RELIANCE OF ONE OR MORE EXEMPTIONS SET OUT INART. 3 PARA. 2. OF THE PROSPECTUS DIRECTIVE, AS IMPLEMENTED IN THE RELEVANT NATIONALIMPLEMENTATION MEASURES.

No prospectus or offering document has been or will be prepared in connection with the offering of Notes under theProgramme in Romania. Any investment decision to buy Notes to be issued under the Programme must be made solelyon the basis of publicly available information. Such information is not the responsibility of and has not been independentlyverified by any of the Issuer, the Guarantor, the Arranger or the Dealers or any of their respective affiliates.

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Switzerland

(a) the Securities may not be offered, sold or otherwise distributed in or from Switzerland, as such term is definedor interpreted under the Swiss Federal Code of Obligations or the Swiss Federal Act on Collective InvestmentSchemes, and neither the Programme nor any documents related to the Securities shall constitute a prospectus inthe sense of article 652a or 1156 of the Swiss Federal Code of Obligations, or constitute a simplified prospectusin the sense of article 5 of the Swiss Federal Act on Collective Investment Schemes. The Securities do notconstitute a participation in a collective investment scheme in the meaning of the Swiss Federal Act on CollectiveInvestment Schemes and they are neither subject to approval nor supervision by the Swiss Financial MarketSupervisory Authority FINMA; and

(b) such Securities may only be distributed in or from Switzerland to individually selected qualified investors withinthe meaning of, and in accordance with, the Swiss Federal Act on Collective Investment Schemes and the SwissCollective Investment Schemes Ordinance. Qualified investors within the meaning of the Swiss Federal Act onCollective Investment Schemes and the Swiss Collective Investment Schemes Ordinance are:

(i) regulated financial intermediaries such as banks, brokers dealers, fund administrations and assetmanagers of collective investment schemes as well as central banks;

(ii) regulated insurance companies;

(iii) public entities and pension funds with a professional treasury (professional treasury is assumed if thereis at least one qualified employee with experience in the financial sector who is responsible for themanagement of the investments);

(iv) corporations organised under private law having a professional treasury;

(v) high net worth individuals (i.e. according to article 6 of the Swiss Collective Investment SchemesOrdinance (a) individuals having the knowledge necessary to understand the risks in connection withthe investment based on personal education and professional experience or similar experience in thefinancial sector and possessing bankable assets of at least CHF 500,000.00 or (b) individuals possessingbankable assets of at least CHF 5,000,000.00), provided they declare in writing that they want to betreated as qualified investors; and

(vi) investors who have concluded a written discretionary asset management contract with a regulatedfinancial intermediary or with an independent asset manager, provided that the independent assetmanager is (a) a financial intermediary within the meaning of the Swiss Anti-Money Laundering Actand (b) subject to conduct of business rules of an organisation in the financial sector that have beenrecognised by the Swiss Financial Market Supervisory Authority FINMA as minimum standard andthat the discretionary asset management contract is in accordance with the recognised guidelines of suchorganisation, except for investors having declared in writing that they do not want to be treated asqualified investors.

General

Each Dealer has represented and agreed and each further Dealer appointed under the Programme will be required torepresent and agree that it will (to the best of its knowledge and belief) comply with all applicable securities laws andregulations in force in any jurisdiction in which it purchases, offers, sells or delivers Notes or possesses or distributes thisBase Prospectus and will obtain any consent, approval or permission required by it for the purchase, offer, sale or deliveryby it of Notes under the laws and regulations in force in any jurisdiction to which it is subject or in which it makes suchpurchases, offers, sales or deliveries and neither the Issuer, the Guarantor nor any of the other Dealers shall have anyresponsibility therefor.

None of the Issuer, the Guarantor and the Dealers represents that Notes may at any time lawfully be sold in compliancewith any applicable registration or other requirements in any jurisdiction, or pursuant to any exemption availablethereunder, or assumes any responsibility for facilitating such sale.

With regard to each Tranche, the relevant Dealer(s) will be required to comply with such other restrictions as the Issuerand the relevant Dealer shall agree and as shall be set out in the applicable Final Terms (or, in the case of Exempt Notes,the applicable Pricing Supplement).

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GENERAL INFORMATION

Authorisation

The establishment of the Programme and the issue of Notes under the Programme up to an aggregate principal amount of€100,000,000 have been duly authorised by a resolution of the Shareholders of the Issuer dated 28 December 2015 andthe giving of the Guarantee has been duly authorised by a resolution of the Board of Directors of the Guarantor dated 24October 2016 and by a resolution of the Management Board of the Issuer dated 21 October 2016.

Listing of Notes

Application has been made to the Central Bank of Ireland to approve this document as a base prospectus. Applicationhas also been made to the Irish Stock Exchange for Notes issued under the Programme to be admitted to trading on theMain Securities Market and to be listed on the Official List of the Irish Stock Exchange. The Main Securities Market isa regulated market for the purposes of the Markets in Financial Instruments Directive (Directive 2004/39/EC).

Documents Available

For the period of 12 months following the date of this Base Prospectus, copies of the following documents will, whenpublished, be available for inspection in physical form from the registered office of the Issuer and from the specifiedoffice of the Paying Agent for the time being in Sofia and Luxembourg, respectively:

(a) the constitutional documents (with an English translation thereof) of the Issuer and the constitutional documents(with an English translation thereof) of the Guarantor;

(b) the Issuer’s 2014 Financial Statements and the Issuer’s 2015 Financial Statements (with an English translationthereof), in each case, together with the audit reports prepared in connection therewith. ;

(c) the Issuer’s Interim Financial Statements and the Guarantor’s Interim Financial Statements (in each case withan English translation thereof), in each case together with any review reports prepared in connection therewith.;

(d) the Programme Agreement, the Agency Agreement, the Guarantee, the Deed of Covenant and the forms of theGlobal Notes, the Notes in definitive form, the Receipts, the Coupons and the Talons;

(e) a copy of this Base Prospectus; and

(f) any future Base Prospectus, prospectuses, information memoranda, supplements and Final Terms (save that aPricing Supplement relating to a Note which is neither admitted to trading on a regulated market in the EuropeanEconomic Area nor offered in the European Economic Area in circumstances where a prospectus is required tobe published under the Prospectus Directive will only be available for inspection by a holder of such Note andsuch holder must produce evidence satisfactory to the Issuer and the Paying Agent as to its holding of Notes andidentity) to this Base Prospectus and any other documents incorporated herein or therein by reference.

In addition, copies of this Base Prospectus and each Final Terms relating to Notes which are admitted to trading on theMain Securities Market are available on the websites of the Irish Stock Exchange (www.ise.ie) and of the Central Bankof Ireland (www.centralbank.ie).

Clearing Systems

Notes to be issued under the Programme have been accepted for clearance through Euroclear and Clearstream,Luxembourg which are the entities in charge of keeping the records. The appropriate Common Code and ISIN for eachTranche of Notes allocated by Euroclear and Clearstream, Luxembourg will be specified in the applicable Final Terms.If the Notes are to clear through an additional or alternative clearing system the appropriate information will be specifiedin the applicable Final Terms.

The address of Euroclear is Euroclear Bank SA/NV, 1 Boulevard du Roi Albert II, B-1210 Brussels. The address ofClearstream, Luxembourg is Clearstream Banking, 42 Avenue JF Kennedy, L-1855 Luxembourg.

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Conditions for Determining Price

The price and amount of Notes to be issued under the Programme will be determined by the Issuer and the relevant Dealerat the time of issue in accordance with prevailing market conditions.

Significant or Material Change

There has been no significant change in the financial or trading position of the Issuer or the Guarantor since 30 June 2016,and there has been no material adverse change in the prospects of the Issuer or the Guarantor since 31 December 2015.

Litigation

Neither the Issuer nor the Guarantor nor any other member of the Group is or has been involved in any governmental,legal or arbitration proceedings (including any such proceedings which are pending or threatened of which the Issuer orthe Guarantor is aware) in the 12 months preceding the date of this document which may have or have in such period hada significant effect on the financial position or profitability of the Issuer, the Guarantor or the Group.

Auditors

The auditors of the Issuer are BDO Bulgaria OOD, who have audited the Issuer’s 2015 Financial Statements and theIssuer’s 2014 Financial Statements in accordance with IFRS. The Issuer’s 2015 Financial Statements did not include aqualification in the audit report. BDO Bulgaria OOD included a qualification in its audit report on the Issuer’s 2014Financial Statements. BDO Bulgaria OOD, reviewed the Issuer’s Interim Financial Statements. BDO Bulgaria OOD hasno material interest in the Issuer.

The auditors of the Guarantor are Deloitte Audit OOD, who have audited the Guarantor’s 2015 Financial Statements andthe Guarantor’s 2014 Financial Statements in accordance with IFRS. Deloitte Audit OOD included a qualification in itsaudit report for each of the Guarantor’s 2015 Financial Statements and the Guarantor’s 2014 Financial Statements.Deloitte Audit OOD reviewed the Guarantor’s Interim Financial Statements. Deloitte Audit OOD has no material interestin the Guarantor.

The reports of the auditors of the Issuer and the Guarantor are incorporated by reference in this Base Prospectus in theform and context in which they are included, with the consent of the auditors who have authorised the contents of thatpart of this Base Prospectus.

See “Operating and Financial Review” for further information.

Dealers transacting with the Issuer and the Guarantor

Certain of the Dealers and their affiliates have engaged, and may in the future engage, in investment banking and/orcommercial banking transactions with, and may perform services to the Issuer, the Guarantor and their affiliates in theordinary course of business.

ISSUER GUARANTOR

EuroHold Bulgaria AD

Christopher Columbus blvd. 43,

Eurohold Business Centre

Sofia 1592, Bulgaria

Euroins Insurance Group AD

Christopher Columbus blvd. 43,

Eurohold Business Centre

Sofia 1592, Bulgaria

DEALERS

Nomura International plc1 Angel Lane

London, EC4R 3ABUnited Kingdom

Euro-Finance AD

Christopher Columbus blvd. 43,

Eurohold Business CentreSofia 1592, Bulgaria

Balkan Advisory Company IP EAD

20 Damyan Gruev str., fl.2, office 4

1606 Sofia

Bulgaria

FISCAL AGENT

BNP Paribas Securities Services, Luxembourg Branch

60, avenue J-F Kennedy

L-2085 Luxembourg City

Luxembourg

REGISTRAR, PAYING AGENT AND TRANSFER AGENT

BNP Paribas Securities Services, Luxembourg Branch

60, avenue J-F Kennedy

L-2085 Luxembourg City

Luxembourg

LEGAL ADVISERS

To the Issuer and the Guarantor as to English law

Dechert LLP

160 Queen Victoria St

London EC4V 4QQ

United Kingdom

To the Arranger and the Dealers

As to English law As to Bulgarian law

Ashurst LLP

Broadwalk House

5 Appold Street

London EC2A 2HA

United Kingdom

Kinstellar, s.r.o., a.k./Branch Sofia/Ševčík

69 Bulgaria Blvd.

Infinity Tower, 14th floor

1404 Sofia

Bulgaria

AUDITORS

To the Issuer To the Guarantor

BDO Bulgaria OOD

bul. Bulgaria 51B, fl.4

1404 Sofia

Bulgaria

Deloitte Audit OOD

103, Alexander Stambolijski Blvd.

Sofia Tower (Mall of Sofia)

1303 Sofia, Bulgaria

LISTING AGENT

Walkers Listing Services Limited

The Anchorage

17/19 Sir John Rogerson’s Quay

Dublin, D02 DT18

Ireland