Prospectus Part 2

Transcription

Prospectus Part 2

IMPORTANT!!!
This document contains an English language translation of the Bulgarian prospectus prepared in the Bulgarian language,
pursuant to and in compliance with Bulgarian law (the “Prospectus”), which Bulgarian Prospectus was filed with the
Bulgarian Financial Supervision Commission/Комисия за финансов надзор (“FSC”) and was approved by the FSC with
resolution No. 601-E/21.07.2015.
This document is for information purposes only and should not be relied upon.
This is not an offering circular, information memorandum or any other form of offering document. SIRMA GROUP HOLDING
JSC (the “Issuer”) and ELANA TRADING JSC (the “Investment Intermediary”), make no representation or warranty, express
or implied, as to the fairness, accuracy, completeness or correctness of this English translation, and neither the Issuer nor
the Investment Intermediary accept any responsibility or liability whatsoever for any loss or damage however arising from
any use of this translation or its contents or arising in connection with it.
This English translation of the Prospectus is not an official translation. This translation is for information purposes only and
is not a substitute for the Prospectus. The only official version of the Prospectus is the Bulgarian version which has been
approved by the competent body of the issuer and prepared and published according to Bulgarian law and regulations. Any
discrepancies or differences between the Prospectus and this translation are not binding and the Prospectus shall prevail.
The Prospectus can be found in printed form at the head office of the Issuer and the Investment Intermediary, and in
electronic form on the websites of the Issuer (www.sirma.com/bg/) and the Investment Intermediary (www.elana.net). The
prospectus should be read in its entirety.
This English translation has not been filed or published according to Bulgarian law. Accordingly, any authorised recipient
should refer only to the official Bulgarian version of the Prospectus before making an investment decision and seek
appropriate professional advice before investing in any securities.
This English translation does not contain or constitute, and should not be relied upon as, an offer or invitation to make an
offer or to acquire any securities in any jurisdiction.
By accessing this document you acknowledge, accept and agree to the foregoing.
This translation is not for publication or any distribution, directly or indirectly, in whole or in part, in or into the United
States, Canada, Australia or Japan. These materials are not an offer of securities for sale in the United States, Canada,
Australia or Japan. Securities may not be offered or sold in the United States in absence of registration with the U.S.
Securities And Exchange Commission or an exemption from registration under the U.S. Securities Act of 1933, as amended.
SIRMA GROUP HOLDING JSC does not intend to register any part of the offering in the United States or to conduct a public
offering of securities in the United States.
<Intentionally left blank>
„SIRMA GROUP HOLDING” JSC
SECURITIES NOTE
SECOND PART FROM THE PROSPECTUS FOR INITIAL PUBLIC OFFERING OF UP TO 18 491 858 SHARES
TYPE OF SECURITIES OFFERED:
COMMON, DENATERIALIZED, REGISTERED, FREE TRANSFER
NUMBER OF NEW SHARES:
UP TO 16 000 000
TOTAL FARE VALUE:
UP TO BGN 16 000 000
FACE VALUE PER SHARE:
BGN 1.00
RANGE OF THE TOTAL ISSUE PRICE:
FROM BGN 19 200 000 TO BGN 26 400 000
PRICE RANGE PER SHARE:
MIN PRICE BGN 1.20 TO MAX PRICE BGN 1.65
MIN/MAX FEE OF THE MANAGER, APPOINTED TO PREPARE AND CONDUCT THE IPO*:
BGN 156 100 / BGN 496 500
MIN/MAX TOTAL EXPENSES FOR THE IPO:
BGN 163 560 / BGN 503 960
MIN/MAX NET PROCEEDING FROM THE IPO:
BGN 9 436 440 / BGN 18 696 040
NUMBER OF EXISTING SHARES, OFFERED DURING THE IPO:
UP TO 2 491 858
ISIN CODE:
BG1100032140
INVESTMENT INTERMEDIARY (THE MANAGER)
ELANA TRADING INC.
(HTTP://WWW.ELANA.NET/)
* - The fee of the Manager includes a fixed remuneration for administration and registration of the offering. The placement fee will be calculated additionally, depending on
the IPO results.
THE PROSPECTUS OF SIRMA GROUP HOLDING JSC CONTAINS ALL THE INFORMATION, NECESSARY FOR AN INVESTMENT DECISION, INCLUDING THE MAIN RISKS FOR THE
COMPANY AND ITS ACTIVITY. ALL INVESTORS ARE ADVISED TO READ BOTH THE REGISTRATION DOCUMENT AND THE SECURITIES NOTE BEFORE ADOPTING AN
INVESTMENT DECISION. THE SECURITIES NOTE CONTAINS INFORMATION WITH REGARD TO THE EXISTING AND NEW SHARES OF THE COMPANY. THE REGISTRATION
DOCUMENT WITH THE SECURITIES NOTE AND THE RESUME COMPILE THE PROSPECTUS FOR THE IPO. THE PROSPECTUS CONSISTS OF THE COMPLETE INFORMATION,
WHICH, IN LINE WITH THE SPECIFIC CHARACTERISTICS OF THE COMPANY AND THE SHARES, OFFERED THROUGH THE IPO, IS NECESSARY FOR ALL INVESTORS TO ARRIVE
AT A PRECISE VALUATION OF THE ECONOMIC AND THE FINANCIAL STATE, THE ASSETS AND THE LIABILITIES, THE FINANCIAL RESULTS, THE DEVELOPMENT PROSPECTS OF
THE COMPANY, AS WELL AS WITH THE RIGHTS, CONNECTED TO THE SHARES.
ALL PARTS OF THE PROSPECTUS ARE TRANSLATED IN ENGLISH. THE ENGLISH VERSION OF THE PROSPECTUS IS NOT SUBJECT TO APPROVAL BY THE FINANCIAL
SUPERVISION COMMISSION (FSC) IN BULGARIA. IN CASE OF ANY DISCREPANCIES BETWEEN THE BULGARIAN AND ENGLISH WORDING, THE BULGARIAN WORDING
SHALL PREVAIL. THE FSC HAS APPROVED THE BULGARIAN VERSION OF THE PROSPECTUS WITH ITS DECISION № 601-E/21.07.2015, BUT IS NOT LIABLE FOR THE
EXACTNESS OF THE INFORMATION PRESENTED INSIDE.
BASED ON THE APPROVED BY THE FSC PROSPECTUS, THE SHARES WILL BE OFFERED IN BULGARIA DURING THE IPO. HOWEVER, CERTAIN QUALIFIED INVESTORS MAY BE
APPROACHED WITH LIMITED MARKETING INITIATIVES. THE IPO WILL NOT BE CONDUCTED IN JURISDICTIONS OUTSIDE BULGARIA. THE LIMITED MARKETING INITIATIVES
MENTIONED ABOVE WILL BE CONFORMED TO THE LOCAL LEGISLATION OF ANY SUCH COUNTRIES (INCLUDING REGULATION S FOR THE ENFORCEMENT OF THE SECURITIES
ACT IN THE US) AND WILL NOT CONSIDERED A PUBLIC OFFERING IN THE RESPECTIVE COUNTRY.
ANY INVESTMENT IN SECURITIES IS RELATED TO CERTAIN RISKS. THE MAIN RISKS, RELATED TO SIRMA GROUP HOLDING JSC AND ITS ACTIVITIES, ARE ENLISTED IN THE
CURRENT SECURITIES NOTE, ITEM 2 “RISK FACTORS”.
THE
MEMBERS OF THE BOARD OF DIRECTORS OF
SIRMA GROUP HOLDING JSC SHALL
BE RESPONSIBLE FOR THE DAMAGES CAUSED BY FALSE, MISLEADING OR
INCOMPLETE DATA IN THE SECURITIES NOTE. ELANA TRADING INC, BEING AUTHORIZED FOR THE PREPARATION OF PROSPECTUS AS AN INVESTMENT INTERMEDIARY,
SHALL BE JOINTLY LIABLE FOR DAMAGES CAUSED BY FALSE, MISLEADING OR INCOMPLETE DATA IN THE SECURITIES NOTE. THE COMPILER OF THE ANNUAL FINANCIAL
STATEMENTS OF SIRMA GROUP HOLDING JSC SHALL BEAR JOINT RESPONSIBILITY WITH THE PERSONS UNDER THE PRECEDING SENTENCE FOR DAMAGES CAUSED BY
FALSE, MISLEADING OR INCOMPLETE DATA IN THE FINANCIAL STATEMENTS OF SIRMA GROUP HOLDING JSC. THE REGISTERED AUDITOR SHALL BE HELD RESPONSIBLE
FOR DAMAGES CAUSED BY THE AUDITED FINANCIAL STATEMENTS OF THE ISSUER.
DATE: MAY 31ST 2015
SIRMA GROUP HOLDING JSC
SECURITIES NOTE
All investors, interested in the Securities Note, can become acquainted with the original document in Bulgarina, as well
as receive a free copy and further information on it:
The Company
The Investment Intermediary
Sirma Group Holding JSC
address:
Sofia, 135 Tzarigradsko Shousse blvd., fl. 3
phone:
(02) 976 83 10
e-mail:
[email protected]
web-site:
http://www.sirma.com/bg/
Contact person:
Stefan Kiryakov
Elana Trading Inc.
address:
Sofia, 5 Lachezar Stanchev str., Sopharma
Business Towers, tower B, fl. 12
phone:
(+359) 2 810 00 00
fax:
(+359) 2 958 15 23
e-mail:
[email protected]
web-site:
www.elana.net
contact person:
Ivan Iliev
The abovementioned documents can be also obtained from the Bulgarian Stock Exchange – Sofia AD upon admission of
the shares to be traded on the regulated market.
The content of this document should not be considered as legal, financial, business or tax advice. To receive such advice,
each potential investor should consult their own legal, financial, or tax advisor. If you have any doubt about the contents
of this document, you should consult a stockbroker, bank manager, lawyer, accountant or other financial advisor. You
should be aware that share price may fall as well as rise in value.
2
SECURITIES NOTE
CONTENT:
1.
PERSONS RESPONSIBLE ...................................................................................................................................6
1.1. All persons responsible for the information given in the Securities Note. ............................................................... 6
1.2. Declaration by those responsible for the preparation of the Securities Note. ......................................................... 7
2.
RISK FACTORS ..................................................................................................................................................7
2.1. Risk factors, intrinsic to the shares, subject of the Offering ..................................................................................... 7
2.1.1. Price Risk ................................................................................................................................................................ 7
2.1.2. Liquidity Risk ........................................................................................................................................................... 8
2.1.3. Risk of inflation ....................................................................................................................................................... 8
2.1.4. Risk from dilution of shares’ value ......................................................................................................................... 8
2.1.5. Currency risk ........................................................................................................................................................... 8
2.1.6. No guarantee for annual dividend payment .......................................................................................................... 8
2.1.7. Risk factors included in the Registration document ............................................................................................... 9
3.
KEY INFORMATION ..........................................................................................................................................9
3.1. Working capital Statement ........................................................................................................................................ 9
3.2. Capitalization and indebtedness ............................................................................................................................... 9
3.3. Interest of natural and legal persons involved in the issue/offer ........................................................................... 12
3.4. Reasons for the offer and use of proceeds ............................................................................................................. 12
4.
INFORMATION CONCERNING THE SECURITIES TO BE OFFERED/ADMITTED TO TRADING ...........................14
4.1. TYPE AND THE CLASS OF THE SECURITIES BEING OFFERED....................................................................................................... 14
4.2. LEGISLATION UNDER WHICH THE SECURITIES HAVE BEEN CREATED........................................................................................... 14
4.3. FORM OF THE SECURITIES ............................................................................................................................................... 15
4.4. CURRENCY OF THE SECURITIES ISSUE ................................................................................................................................. 15
4.5. DESCRIPTION OF THE RIGHTS ATTACHED TO THE SECURITIES, INCLUDING ANY LIMITATIONS OF THOSE RIGHTS, AND PROCEDURE FOR THE
EXERCISE OF THOSE RIGHTS .................................................................................................................................................... 15
4.6. RIGHT TO SHARE IN THE ISSUER’S PROFITS .......................................................................................................................... 15
4.7. VOTING RIGHTS ............................................................................................................................................................ 16
4.8. RIGHTS IN THE EVENT OF LIQUIDATION .............................................................................................................................. 17
4.9. ADDITIONAL RIGHTS, CONNECTED TO THE SHARES ............................................................................................................... 17
4.10. RIGHTS TO MINORITY SHAREHOLDERS ............................................................................................................................. 17
4.11. REDEMPTION PROVISIONS ............................................................................................................................................ 17
4.12. CONVERSION PROVISIONS............................................................................................................................................. 18
4.13. A STATEMENT OF THE RESOLUTIONS, AUTHORIZATIONS AND APPROVALS BY VIRTUE OF WHICH THE SECURITIES WILL BE ISSUED ......... 18
4.14. IN THE CASE OF NEW ISSUES, THE EXPECTED ISSUE DATE OF THE SECURITIES ............................................................................ 19
4.15. A DESCRIPTION OF ANY RESTRICTIONS ON THE FREE TRANSFERABILITY OF THE SECURITIES .......................................................... 19
4.16. AN INDICATION OF THE EXISTENCE OF ANY MANDATORY TAKEOVER BIDS AND/OR SQUEEZE-OUT AND SELLOUT RULES IN RELATION TO
THE SECURITIES. .................................................................................................................................................................. 20
4.17. AN INDICATION OF PUBLIC TAKEOVER BIDS BY THIRD PARTIES IN RESPECT OF THE ISSUER’S EQUITY, WHICH HAVE OCCURRED DURING THE
LAST FINANCIAL YEAR AND THE CURRENT FINANCIAL YEAR. THE PRICE OR EXCHANGE TERMS ATTACHING TO SUCH OFFERS AND THE OUTCOME
THEREOF MUST BE STATED..................................................................................................................................................... 20
4.18. INFORMATION ON TAXES ON THE INCOME FROM THE SECURITIES WITHHELD AT SOURCE AND INDICATION AS TO WHETHER THE ISSUER
ASSUMES RESPONSIBILITY FOR THE WITHHOLDING OF TAXES AT THE SOURCE .................................................................................... 20
4.19. FOREIGN EXCHANGE LEGISLATION .................................................................................................................................. 23
4.20. INDICATION OF WHETHER THE ISSUER ASSUMES RESPONSIBILITY FOR THE WITHHOLDING OF TAXES AT THE SOURCE. ........................ 24
5.
TERMS AND CONDITIONS OF THE OFFER ......................................................................................................24
5.1. CONDITIONS, OFFER STATISTICS, EXPECTED TIMETABLE AND ACTION REQUIRED TO APPLY FOR THE OFFER........................................ 24
5.2. AN INDICATION OF WHEN, AND UNDER WHICH CIRCUMSTANCES, THE OFFER MAY BE REVOKED OR SUSPENDED AND WHETHER
REVOCATION CAN OCCUR AFTER DEALING HAS BEGUN ................................................................................................................. 28
5.3. A DESCRIPTION OF THE POSSIBILITY TO REDUCE SUBSCRIPTIONS AND THE MANNER FOR REFUNDING EXCESS AMOUNT PAID BY APPLICANTS
........................................................................................................................................................................................ 29
5.4. DETAILS OF THE MINIMUM AND/OR MAXIMUM AMOUNT OF APPLICATION (WHETHER IN NUMBER OF SECURITIES OR AGGREGATE
AMOUNT TO INVEST) ............................................................................................................................................................ 29
3
SECURITIES NOTE
5.5. AN INDICATION OF THE PERIOD DURING WHICH AN APPLICATION MAY BE WITHDRAWN, PROVIDED THAT INVESTORS ARE ALLOWED TO
WITHDRAW THEIR SUBSCRIPTION ............................................................................................................................................ 29
5.6. METHOD AND TIME LIMITS FOR PAYING UP THE SECURITIES AND FOR DELIVERY OF THE SECURITIES ................................................ 29
5.7. TRANSFER OF THE AMOUNTS FOR THE SOLD SHARES TO THE ACCOUNT OF THE SELLER ................................................................. 30
5.8. AN INDICATION OF THE ORDER TO RECEIVE THE CERTIFYING DOCUMENTS (DEPOSITORY RECEIPTS) ................................................. 30
5.9. A FULL DESCRIPTION OF THE MANNER AND DATE IN WHICH RESULTS OF THE OFFER ARE TO BE MADE PUBLIC ................................... 31
5.10. THE PROCEDURE FOR THE EXERCISE OF ANY RIGHT OF PRE-EMPTION, THE NEGOTIABILITY OF SUBSCRIPTION RIGHTS AND THE
TREATMENT OF SUBSCRIPTION RIGHTS NOT EXERCISED. ............................................................................................................... 31
6.
PLAN OF DISTRIBUTION AND ALLOTMENT ....................................................................................................31
6.1.
DIFFERENT POTENTIAL INVESTORS CATEGORIES, WHICH WILL BE ADDRESSED WITH THIS OFFER. THE DIVISION INTO TRANCHES OF THE
OFFER INCLUDING THE INSTITUTIONAL, RETAIL AND ISSUER’S EMPLOYEE TRANCHES AND ANY OTHER TRANCHES ...................................... 31
6.2.
AN INDICATION WHETHER THE CURRENT MAJOR SHAREHOLDERS OR THE MEMBERS OF THE MANAGEMENT, CONTROL OR
ADMINISTRATION BODIES INTEND TO ACQUIRE ANY OF THE OFFERED SHARES AND IF ANY OF THESE INDIVIDUALS INTEND TO ACQUIRE MORE
THAN 5% OF THE OFFERED SHARES, AS FAR AS SUCH INFORMATION IS AVAILABLE ............................................................................. 32
6.3.
6.4.
ANNOUNCEMENT OF ANY PRE-ALLOTMENT .................................................................................................................. 32
PROCESS FOR NOTIFICATION TO APPLICANTS OF THE AMOUNT ALLOTTED AND INDICATION WHETHER DEALING MAY BEGIN BEFORE
NOTIFICATION IS MADE ......................................................................................................................................................... 32
6.5.
OVER-ALLOTMENT AND 'GREEN SHOE’ ........................................................................................................................ 33
7.
PRICING .........................................................................................................................................................33
7.1.
AN INDICATION OF THE PRICE AT WHICH THE SECURITIES WILL BE OFFERED ......................................................................... 33
7.2.
IF THE ISSUER’S EQUITY HOLDERS HAVE PRE-EMPTIVE PURCHASE RIGHTS AND THIS RIGHT IS RESTRICTED OR WITHDRAWN,
INDICATION OF THE BASIS FOR THE ISSUE PRICE IF THE ISSUE IS FOR CASH, TOGETHER WITH THE REASONS FOR AND BENEFICIARIES OF SUCH
RESTRICTION OR WITHDRAWAL ............................................................................................................................................... 35
7.3.
WHERE THERE IS OR COULD BE A MATERIAL DISPARITY BETWEEN THE PUBLIC OFFER PRICE AND THE EFFECTIVE CASH COST TO
MEMBERS OF THE ADMINISTRATIVE, MANAGEMENT OR SUPERVISORY BODIES OR SENIOR MANAGEMENT, OR AFFILIATED PERSONS, OF
SECURITIES ACQUIRED BY THEM IN TRANSACTIONS DURING THE PAST YEAR, OR WHICH THEY HAVE THE RIGHT TO ACQUIRE, INCLUDE A
COMPARISON OF THE PUBLIC CONTRIBUTION IN THE PROPOSED PUBLIC OFFER AND THE EFFECTIVE CASH CONTRIBUTIONS OF SUCH PERSONS.
36
8.
PLACING AND UNDERWRITING .....................................................................................................................36
8.1.
NAME AND ADDRESS OF THE CO-ORDINATOR(S) OF THE GLOBAL OFFER AND OF SINGLE PARTS OF THE OFFER AND, TO THE EXTEND
KNOWN TO THE ISSUER OR TO THE OFFEROR, OF THE PLACERS IN THE VARIOUS COUNTRIES WHERE THE OFFER TAKES PLACE ...................... 36
8.2.
NAME AND ADDRESS OF ANY PAYING AGENTS AND DEPOSITORY AGENTS IN EACH COUNTRY ................................................... 36
8.3.
NAME AND ADDRESS OF THE ENTITIES AGREEING TO UNDERWRITE THE ISSUE ON A FIRM COMMITMENT BASIS, AND NAME AND
ADDRESS OF THE ENTITIES AGREEING TO PLACE THE ISSUE WITHOUT A FIRM COMMITMENT OR UNDER “BEST EFFORTS” ARRANGEMENTS ..... 36
8.4.
WHEN THE UNDERWRITING AGREEMENT HAS BEEN OR WILL BE REACHED ........................................................................... 36
9.
ADMISSION TO TRADING AND DEALING ARRANGEMENTS...........................................................................37
9.1.
AN INDICATION AS TO WHETHER THE SECURITIES OFFERED ARE OR WILL BE THE OBJECT OF AN APPLICATION FOR ADMISSION TO
TRADING, WITH A VIEW TO THEIR DISTRIBUTION IN A REGULATED MARKET OR OTHER EQUIVALENT MARKETS WITH INDICATION OF THE
MARKETS IN QUESTION. ........................................................................................................................................................ 37
9.2.
ALL THE REGULATED MARKETS OR EQUIVALENT MARKETS ON WHICH, TO THE KNOWLEDGE OF THE ISSUER, SECURITIES OF THE SAME
CLASS OF THE SECURITIES TO BE OFFERED OR ADMITTED TO TRADING ARE ALREADY ADMITTED TO TRADING. .......................................... 37
9.3.
IF SIMULTANEOUSLY OR ALMOST SIMULTANEOUSLY WITH THE CREATION OF THE SECURITIES FOR WHICH ADMISSION TO A
REGULATED MARKET IS BEING SOUGHT SECURITIES OF THE SAME CLASS ARE SUBSCRIBED FOR OR PLACED PRIVATELY OR IF SECURITIES OF OTHER
CLASSES ARE CREATED FOR PUBLIC OR PRIVATE PLACING, GIVE DETAILS OF THE NATURE OF SUCH OPERATIONS AND OF THE NUMBER AND
CHARACTERISTICS OF THE SECURITIES TO WHICH THEY RELATE. ...................................................................................................... 37
9.4.
DETAILS OF THE ENTITIES WHICH HAVE A FIRM COMMITMENT TO ACT AS INTERMEDIARIES IN SECONDARY TRADING, PROVIDING
LIQUIDITY THROUGH BID AND OFFER RATES AND DESCRIPTION OF THE MAIN TERMS OF THEIR COMMITMENT. ......................................... 37
9.5.
10.
STABILIZATION ....................................................................................................................................................... 37
SELLING SECURITIES HOLDERS ......................................................................................................................37
10.1.
NAME AND BUSINESS ADDRESS OF THE PERSON OR ENTITY OFFERING TO SELL THE SECURITIES, THE NATURE OF ANY POSITION
OFFICE OR OTHER MATERIAL RELATIONSHIP THAT THE SELLING PERSONS HAS HAD WITHIN THE PAST THREE YEARS WITH THE ISSUER OR ANY OF
ITS PREDECESSORS OR AFFILIATES. ........................................................................................................................................... 37
10.2.
THE NUMBER AND CLASS OF SECURITIES BEING OFFERED BY EACH OF THE SELLING SECURITY HOLDERS.................................. 40
4
SECURITIES NOTE
10.3.
LOCK-UP AGREEMENTS ........................................................................................................................................ 41
11.
EXPENSE OF THE ISSUE/OFFER. .....................................................................................................................41
12.
DILUTION .......................................................................................................................................................42
13.
ADDITIONAL INFORMATION ..........................................................................................................................43
13.1.
IF ADVISORS CONNECTED WITH AN ISSUE ARE MENTIONED IN THE SECURITIES NOTE, A STATEMENT OF THE CAPACITY IN WHICH
THE ADVISORS HAVE ACTED.................................................................................................................................................... 43
13.2.
AN INDICATION OF OTHER INFORMATION IN THE SECURITIES NOTE WHICH HAS BEEN AUDITED OR REVIEWED BY STATUTORY
AUDITORS AND WHERE AUDITORS HAVE PRODUCED A REPORT ...................................................................................................... 43
13.3.
WHERE A STATEMENT OR REPORT ATTRIBUTED TO A PERSON AS AN EXPERT IS INCLUDED IN THE SECURITIES NOTE, PROVIDE SUCH
PERSONS' NAME, BUSINESS ADDRESS, QUALIFICATIONS AND MATERIAL INTEREST IF ANY IN THE ISSUER.................................................. 43
13.4.
THIRD PARTY INFORMATION ................................................................................................................................. 43
13.5.
SOURCES OF ADDITIONAL INFORMATION ................................................................................................................. 43
ABBREVIATIONS:
“The Issuer”, „The Company” – Sirma Group Holding JSC, Sofia, Bulgaria, EIK 200101236
„Investment Intermediary“ – Elana Trading Inc.
“FSC” – Financial Supervision Commission, Bulgaria
“BSE” – Bulgarian Stock Exchange – Sofia AD
„POSA” – Public Offering of Securities Act
„SMEs” – Small and Medium-sized Enterprises
„CSD”– Central Securities Depository AD
„BNB” – Bulgarian National Bank
„IFRS” – International Financial Reporting Standards
„Prospectus” – Prospectus for IPO of common shares
„GDP“ – Gross Domestic Product
„EU“ – European Union
„NSI“ – Bulgarian National Statistical Institute
„ICT“ – Informational and Communicational Technologies
“New shares” – the shares from the capital increase of the Issuer
„Selling shareholders” – all shareholders of Sirma Group Holding JSC
“Commercial Register” – the companies register in Bulgaria
“Existing Shares” – the shares that belong to the Selling shareholders
“Additional shares” – the shares to be distributed in case of oversubscription
“Offering Price”, “Price” – the final subscription price
“Exceeding amount” – subscribed shares within the announced Price that exceed the maximum amount of
new shares
“Allotment List” – the list of shareholders after the allotment took place
5
SECURITIES NOTE
1. PERSONS RESPONSIBLE
1.1. ALL PERSONS RESPONSIBLE FOR THE INFORMATION GIVEN IN THE SECURITIES NOTE.
Sirma Group Holding AD, referred to as the Group, the Company or the Issuer is a joint stock company with a one-tier
management system.
Members of the BoD of Sirma Group Holding AD:

Georgi Parvanov Marinov – Chairman of BoD;

Chavdar Velizarov Dimitrov – Deputy Chairman of BoD;

Tzvetan Borisov Aleksiev – member of BoD and CEO;

Atanas Kostadinov Kiryakov – member of BoD;

Yordan Stoyanov Nedev – member of BoD.

Sasha Konstantinova Bezuhanova – member of BoD;

Petar Borisov Statev – member of BoD;

Tzvetomir Angelov Doskov – member of BoD;
Currently no legal entity has been elected as a member of the BoD of the Company.
As of the date of this Prospectus, the Board of Sirma Group Holding JSC has not authorized procurator or other proxy.
With the signing of the attached declaration under Art. 81, para 5 in connection to Art. 81, para 3 from POSA, the board
members of Sirma Group Holding JSC declare that the information, contained in the Securities Note, is true and
exhaustive. With the signing of the last page the executive director of Sirma Group Holding JSC declares that the Securities
Note abides the law and as far as he is aware it corresponds to the facts and contains no omission likely to affect the
import of the presented information.
COMPILERS AND AUDITORS OF THE FINANCIAL REPORTS
The persons, who prepared the financial statements of the Company for the period covered by the historical financial
information, are: Radoslava Minkova for financial years 2012 and 2013, and first two quarters of 2014 (currently Mrs.
Minkova is not employed at the Issuer), and Nikolay Yatzino – annual financial reports for 2014 and interim financial
reports Q1 2015.
Auditor of the Company at the prospectus date and the financial information covered by the considered historical period
after 2011 is Bisikom – 61 Ltd., UIC 121012512, address: Sofia, district Iztok, 15A Krum Kyulavkov str., fl. 7, office 13.
Bisikom - 61 Ltd. have checked the annual financial statements for 2012, 2013 and 2014 according to the Accounting Act
and IFRS. Bisikom - 61 Ltd. is a specialized audit firm with Reg. number 019.
The compliers of the annual and interim financial statements for the period covered by the historical financial information
are stated above. They are responsible together with the members of the Board of Directors of Sirma Group Holding Jsc
and Elana Trading Inc., through its employees Miroslav Stoyanov and Ivan Iliev, for damages caused by false, misleading
or incomplete data in the financial statements of Sirma Group Holding JSC. The registered auditor Bisikom - 61 Ltd. for
2012, 2013 and 2014 is responsible for any damage caused by the included in the Securities Note historical financial
information as a result of incorrectly expressed auditor’s opinion on the audited financial statements.
INVESTMENT INTERMEDIARY
The authorized investment intermediary: Elana Trading Inc. with its registered office in Sofia, region Sredets, 4 Kuzman
Shapkarev str., represented by the Chairperson of the Board Radoslava Maslarska and the CEO Momchil Tikov.
The preparation of the Securities Note, as well as the other parts of the Prospectus, was assigned to Elana Trading Inc.
(ET). The employees of ET, who prepared the economic and the legal information in the Securities Note, are Miroslav
Stoyanov, Director Investment Banking, and Ivan Iliev, Expert Investment Banking. Through their signature on the last
page of this document they declare that they have prepared the document with due care and that as far as they know,
all the information contained in the Securities Note corresponds to the facts and contains no omission likely to affect its
import.
The legal representation of ET is performed by any two of the following three individuals: Kamen Kolchev, Radoslava
Maslarska and Momchil Tikov. With their signatures on the last page of the Securities Note and as representatives of ET,
6
SECURITIES NOTE
Radoslava Maslarska and Momchil Tikov declare that to the best of their knowledge, all information contained in the
Securities Note corresponds to the facts and contains no omission likely to affect its import.
1.2. DECLARATION BY THOSE RESPONSIBLE FOR THE PREPARATION OF THE SECURITIES NOTE.
Declarations by the members of the Board of Directors of Sirma Group Holding JSC and Elana Trading Inc., by the auditor,
the compiler of the financial statements and the employees of Elana Trading Inc., who prepared the prospectus, are
attached as an integral part of the Prospectus.
2. RISK FACTORS
Investing in securities of Sirma Group holding JSC is associated with taking of various by type and degree of impact risks.
The specified risk factors should be carefully considered and evaluated by potential investors while adopting an investment
decision.
2.1. RISK FACTORS, INTRINSIC TO THE SHARES, SUBJECT OF THE OFFERING
The risk of investing in securities is associated with uncertainty and inability to predict accurately the future effects and
the impact on the expected return on investment.
The main risk and uncertainty for the shareholders of the Company is the probability for their investment in shares not
to retain its value and generate the expected return due to reduction in share price or lack of other income (dividends).
Sirma Group holding JSC informs potential investors that investing in shares is subject to certain risks. Investors should
carefully read and consider the risks associated with investing in shares of the current issue prior to making investment
decision.
Sirma Group Holding JSC strives to maintain a low risk profile by maintaining low levels of financial and operating leverage,
high operational efficiency, introduction of strict operations management rules and procedures and tight compliance
control, and diversification of customer base and suppliers.
The enlisted shows that the Company is resilient to external negative shocks; nevertheless, in the Company faces
significant risks that could adversely affect its results.
2.1.1. PRICE RISK
Fluctuations in the price of Sirma Group Holding JSC shares can be caused by both the fundamental state of the Company
- current and expected operating and financial results, and by the economic and market conditions in Bulgaria, and
indirectly by the market and economic conditions of the world economy.
The shareholders should be aware that certain events causing sudden fluctuations in market prices may occur. Such
events have previously occurred in the Bulgarian capital market and in the international financial markets, and such
fluctuations are likely to affect adversely the shares of Sirma Group Holding JSC.
The stock price of the shares is determined by the supply and demand, and that price may rise or fall. These price
"fluctuations" can lead to a certain moment, when the price of certain shares is much lower than when the share was
bought. That price dynamic is typical for common shares, whose market prices may be subject to sharp fluctuations as a
result of publicly disclosed information about the financial results of the Company, changes in legislation and other
significant events.
Significant sale pressure for a certain period of time may reflect negatively on the current price levels of the shares of
Sirma Group Holding JSC. Such an event would be possible of sellers prevail over the buyers within that period of time.
As of the date of the Prospectus, nor the Issuer or any other third party will engage in share price supporting and thus
significant sale pressure may lead to price reduction.
The Company does not guarantee that the share price will remain stable and / or will increase its value in the future. As
of the time of the preparation of this document, Sirma Group Holding JSC or, to the knowledge of the Company, any
other individuals/entities do not intend to acquire Company’s shares in order to maintain and / or increase their market
price upon the completion of the capital increase.
7
SECURITIES NOTE
2.1.2. LIQUIDITY RISK
Liquidity risk is directly related to the liquidity of the capital market itself and is valued by the potential opportunity to
buy or sell particular securities in the secondary market in short terms and in usual volumes. The liquidity of any stock
depends on the number of investors interested in investing in it. The liquidity risk is also tied to the development of the
capital market in terms of volume and variety of financial instruments, its ability to attract new investors, the financial
state of the issuer, etc.
Investors should be aware that BSE is considerably smaller and less liquid than the capital markets in most countries with
developed market economy. Thus, listing of the Company's shares on BSE does not guarantee to shareholders active
trading and sufficient liquidity.
2.1.3. RISK OF INFLATION
The impact from the risk of inflation for the shareholders of the Company would occur when the income (increase in
stock price and / or dividends received) is less than the inflation for the investment period. Inflationary processes lead to
reduction in the return to investors in real terms.
Although, the long-term return on common shares usually outperforms the inflation rates in Bulgaria and in other
countries with developed economies, there are no guarantees that the investment in the Company’s shares will be an
actual protection against inflation.
2.1.4. RISK FROM DILUTION OF SHARES’ VALUE
The articles of association of the Company does not stipulates any restrictions on the maximum size of any future
issuances. Based on that and in case of a capital increase, where an investor does not exercise his/her right to acquire
new shares proportionally to his/her stake, that stake may be decreased. In case that due to future capital increases the
number of the Company’s shares is increasing faster than its assets, it is possible that the asset value per share of the
Company is diminished.
2.1.5. CURRENCY RISK
The current issue is denominated in Bulgarian levs (BGN). Currency risk exists for investors whose funds are in U.S. dollars
or any other currency, other than BGN and euro, due to the constant movements of exchange rates. Investors who bear
currency risk through the purchase of this issue would experience an increase or decrease in the real return on investment
due to the strengthening or weakening of the exchange rate of BGN or EUR against the currency in which their funds are
denominated.
The stability and the high level of trust in the reliability of the currency board in the country, combined with the relatively
stable conduct of the euro on the international forex exchange, reduce the presence of a currency risk to minimum levels.
2.1.6. NO GUARANTEE FOR ANNUAL DIVIDEND PAYMENT
The financial result of the Company depends on many factors, including the skills and professionalism of the management
team, the development of the market in which the Company operates, the economic development of the country and
the region, etc. All investors bear the risk of no annual dividends due to the lack of a guarantee for their payment.
2.1.7. RISK FROM A CHANGE IN THE TAXATION REGIME ON SECURITIES INVESTMENTS
The potential risk from a change in the taxation regime on securities investments is connected to a change in the current
regime of taxation of such instruments. The latter may be considered favourable in the sense of free of tax capital gain.
The change in the capital gain taxation, as well as other potential changes in the taxation of securities investments may
negatively influence the final net result for a certain investor.
8
SECURITIES NOTE
2.1.8. RISK FACTORS INCLUDED IN THE REGISTRATION DOCUMENT
The specific risks, typical for Sirma Group Holding JSC main activity, as well as general risks, which influence that same
activity, are detailed in the Registration document, Risk factors segment.
3. KEY INFORMATION
3.1. WORKING CAPITAL STATEMENT
Combined with the long-term assets, the working capital is considered part of the operating capital and is calculated as
the short-term assets are decreased with the short-term liabilities. The management of the Company believes that has
disposed of enough working capital for its business needs during the examined historical period and up to the date of
this document.
3.2. CAPITALIZATION AND INDEBTEDNESS
The valance capitalization and indebtedness of the Company for the period January 1st 2012 ÷ March 31st 2015 are
presented in the following tables:
Table 1: Selected consolidated financial information for the period January 1st 2012 ÷ March 31st 2015
Indicator (BGN '000)
Revenues
Total expenses (w/o financial expenses)
Financial income/(expences)
2012**
2013
2014
3/31/2014 3/31/2015
17,636
22,768
27,865
5,443
7,044
(15,365)
(19,409)
(22,674)
(5,197)
(6,640)
(672)
(431)
(37)
(19)
5,494
Net profit/loss
1,881
2,950
9,778
209
385
Net profit/loss per share in BGN
0.026
0.040
0.196
0.003
0.008
86,521
92,496
94,154
104,024
101,273
4,836
6,163
11,825
9,404
13,730
Equity
81,685
86,333
82,329
94,620
87,543
Share capital
Total assets
Liabilities (current and long-term)
73,341
73,341
49,837
73,341
49,837
Dividend*
-
100
-
-
-
Dividend* per share
-
0.001
-
-
-
9
SECURITIES NOTE
Table 1.1: Selected individual financial information for the period January 1st 2012 ÷ March 31st 2015
Revenues
Total expenses (w/o financial expenses)
Financial income/(expences)
Net profit/loss
2012
2013
2014
3/31/2014 3/31/2015
1,068
1,248
1,755
394
314
(1,034)
(1,038)
(1,445)
(327)
(272)
(1)
(14)
(12)
217
277
19
406
529
66
28
0.000
0.006
0.011
0.00
0
79,104
80,101
58,112
80,095
58,176
1,670
2,261
3,347
2,188
3,383
Equity
77,434
77,840
54,765
77,907
54,793
Share capital
Net profit/loss per share in BGN
Total assets
Liabilities (current and long-term)
73,341
73,341
Dividend*
-
100
-
49,837
-
73,341
-
49,837
Dividend* per share
-
0.001
-
-
-
Source: Audited annual consolidated and individual financial reports for 2012, 2013 and 2014, as well as unaudited interim consolidated financial
reports as of March 31st 2015
* - The regular annual general assembly of the Company, conducted in 2014, has decided to distribute a total dividend of BGN 100
thousand from the profit for 2013. The amount has not been settled till the date of this document
** - The data for 2012 is restated through the annual audited consolidated financial report for 2013
10
SECURITIES NOTE
Table 2: Consolidated balance sheet – liabilities of the Company for the period January 1st 2012 ÷ March 31st 2015
2012
Long-term provisions
Pension and other liabilities to the personnel
Liabilities to financial entities
Financial leasing
Commercial and other liabilities
incl. Commercial liabilities
incl. Other liabilities
incl. Differer taxes
Received financing
Long-term liabilities to related entities
Total long-term liabilities
Short-term part of the long term liabilities
Provisions
Liabilities to related entities
Financial leasing
Commercial liabilities
Tax liabilities
Liabilities for received advances
Received financing
Other liabilities
Total short-term liabilities
Total liabilities and equity
2013
49
187
51
34
321
107
304
1,567
187
2,350
4,515
86,521
2014
3/31/2015
57
6
595
34
279
135
137
1,243
86
860
97
867
1,910
63
638
388
1,142
2,231
0
732
2,107
2,081
837
355
546
39
304
4,920
728
3,920
185
26
5,056
929
1,026
664
1,726
419
292
9,915
3,518
1,323
2,615
674
2,855
514
11,499
94,154
101,273
92,496
st
st
Table 2.1: Individual balance sheet – liabilities of the Company for the period January 1 2012 ÷ March 31 2015
Long-term provisions
Financial leasing
Long-term liabilities to related entities
Deffered taxes
Total long-term liabilities
Provisions
Financial leasing
Liabilities to related entities
Tax liabilities
Liabilities for received advances
Other liabilities
Total short-term liabilities
Total liabilities
Total liabilities and equity
2012
2013
2014
3/31/2015
3
1
51
285
4
344
22
63
489
8
620
35
74
15
1,326
1,670
3
441
51
201
25
721
28
74
635
1
24
641
51
74
12
1,540
2,261
6
583
277
489
1,355
51
94
475
277
514
328
103
3
147
1,992
3,347
6
1,290
51
210
769
29
490
347
82
2
113
2,093
3,383
79,104
80,101
58,112
58,176
553
242
489
Source: Audited annual consolidated and individual financial reports for 2012, 2013 and 2014, as well as unaudited interim consolidated financial
reports as of March 31st 2015
11
SECURITIES NOTE
Issuer’s Indebtness data, divided in guaranteed/unguaranteed, collateralized/non-collateralized, as well as
indirect/conditional is provided in the following table.
Table 3: Types of indebtness on consolidated basis as of December 31 2014 and as of March 31 2015
Collateralized liabilities
Non-collateralized liabilities
Conditional liabilities, incl.:
bank loans
provisions and temporary tax differences
Indirect liabilities
Guaranteed liabilities (collateralized plus bank guarantees)
Unguaranteed (excluded from the collateralized)
12/31/2014 3/31/2015
4,503
5,229
7,322
8,501
4,713
7,197
3,032
5,398
1,681
1,799
246
43
4,934
5,640
6,891
8,090
Source: Sirma Group Holding
Table 3.1: Types of indebtness on individual basis as of December 31 2014 and as of March 31 2015
Collateralized liabilities
Non-collateralized liabilities
Conditional liabilities, incl.:
bank loans
provisions and temporary tax differences
Indirect liabilities
Guaranteed liabilities (collateralized plus bank guarantees)
Unguaranteed (excluded from the collateralized)
12/31/2014 3/31/2015
1,336
1,025
2,011
2,358
3,724
4,419
3,667
4,339
57
80
55
109
1,336
1,025
2,011
2,358
Source: Sirma Group Holding
3.3. INTEREST OF NATURAL AND LEGAL PERSONS INVOLVED IN THE ISSUE/OFFER
None of the experts, consultants or intermediaries, stated in the document, owns a significant number of the Company’s
shares, nor does they have significant direct or indirect financial interest in the Company, or are in a long-term
relationship with it.
Elana Trading Inc., in its capacity of an authorized to prepare the Memorandum and conduct the public offering
investment intermediary, is the only legal entity which participates in the capital increase.
There are no individuals, who are authorized to take part in the current offering.
3.4. REASONS FOR THE OFFER AND USE OF PROCEEDS
The Company has contemplated certain investment based on the outcome of the IPO, which are enlisted in the following
table. Three scenarios are considered as it is possible to accumulate different amount in case of subscription and payment
of different number of shares under a different issue price: 1) successful IPO with minimal amount of shares under the
minimum issue price; 2) successful IPO with maximum amount of shares under the minimum issue price; and 3) successful
IPO with maximum amount of shares under the maximum issue price. The success of any of latter scenarios results in
higher IPO proceedings. All scenarios are ranked by priority (investments in scenario one are implemented first, followed
by the ones in scenario 2 and so on) and will be fulfilled depending on the IPO outcome.
The Company will not receive any proceeding from the sale of existing shares, the net proceedings of which are
appropriated for the Selling shareholders.
12
SECURITIES NOTE
Table 4. Scenarios for the IPO proceedings and contemplated investments
Scenario
Minimal
successful
IPO
Proceedings
BGN 9.6 million
Investments' list
1. Establishement of an US entity with the following two main business activities:
1) Consultant services focused on the main products and services of the companies in the
Group, verticle specialization by industries of priority. Set up teams of commercial managers,
technical and business consultants, project and software managers, who are going to be the
front end of the Company's presence in the states. They will be marketed as locals, rather than
eastern Europeans, aiming to increase the profitability of all orders and the recognition and
acceptance of the Group;
2) Set up a team of financial consultants to manage potential M&A deals on both sides, to
improve the financial management of the cashflow and assets of the Group, to attrack capital
from local investors for new projects, etc.
Size of
investment
/BGN '000/
3 500
1 100
2. Increase of the production capacity of the Group, which to lead to higher competitive power,
profitability, more detailed expertise and management of the human resources risks.
3. Development and marketing of the existing products of the Group in the field of CAD/CAM
systems, loyal systems, inteligent management of documents turnover, semanthic
technologies, systems for the financial and insurances sector, etc., as well as building new
commercial and distribution channels for their sale.
4. Setting up of a new R&D department, specialized in the development of high-tech projects
in the artificial inteligence area, robotics, remote healthcare services, computer sight, etc.,
aiming to arrive at new technologies and patents and their subsequent sale, licencing and/or
additional investments towards production and distribution channels.
Sum for scenario 1:
16 million
shares on
the
minimum
price per
share
BGN 19.2 million
5. Establishement of new companies in Germany, England and one location in Asia, to play the
role of commercial representatives and maintenance centers fro the existing products and
services for the Group.
6. Additional investments in point 4 above to the point of own prototypes and ready products.
7. Additional investments in point 3 above to increase the market share of these products and
services, as well as investments in new products in these areas to increase revenue volume
through the already developed commercial centers.
8. Acquisition of new technolofical companies to increase the expertise and new commercial
channels to speed up the sale of the existing products and services. Synergies will increase the
market value of the existing and the acquired companies for any future sale and/or next round
of investments.
Sum for scenario 2:
16 million
shares on
the
maximum
price per
share
BGN 26.4 million
9. Increase of the production capacity of the subsidieries outside Bulgaria through the
expansion of the current offices and opening new ones, hiring of new software engineers and
other technical specialists (Quality Assurance, Project Management, etc.), and higher profiling
of the existing units.
10. New products in the areas of mobile technologies, financial and insurance sector,
healthcare and public communications.
11. New companies to create products from the result of the R&D activities under point 4
above, including subsequent production, marketing, commercial channels organization,
European programs financing and additional investments.
Sum for scenario 3:
2 000
3 000
9 600
2 600
2 000
3 000
2 000
9 600
3 000
3 000
1 200
7 200
13
SECURITIES NOTE
4. INFORMATION CONCERNING THE SECURITIES TO BE OFFERED/ADMITTED TO
TRADING
4.1. TYPE AND THE CLASS OF THE SECURITIES BEING OFFERED
In line with the decision of the general assembly of the Company and the one of the board of directors, subject of this
offering is a total of 18 491 858 shares, face value BGN 1 each, out of which:

Up to 16 000 000 common, dematerialized, freely transferable and registered shares from the capital increase
of the Company (“New shares”), and

Up to 2 491 858 common, dematerialized, freely transferable, registered and existing shares (“Existing shares”),
ownership of all shareholders in Sirma Group Holding JSC (“Selling Shareholders”).
All shares, subject of this offering, will be subsequently listed on BSE where will be traded.
All shares have a face value of BGN 1 and represent one class: common, dematerialized, freely transferable and registered
and give their holders equal rights, namely: voting and dividend right and right to liquidation stake proportional to their
nominal value.
The ISIN code of the Company’s shares is BG1100032140.
4.2. LEGISLATION UNDER WHICH THE SECURITIES HAVE BEEN CREATED
This issue of shares is created in compliance with the legislation of the Republic of Bulgaria.
The following regulatory documents regulate the Offering and the following trade of this issue on a regulated market:
•
•
•
•
•
•
Commerce Act (CA);
Public Offering of Securities Act (POSA);
Markets of Financial Instruments Act;
Law against Market Misuse of Financial Instruments;
Ordinance No.38 on the requirements to the activities of the investment intermediaries;
Ordinance No.2 of the FSC for the prospectuses for the public offering of securities and the acceptance for
trading on a regulated market and the disclosure of information for the public companies and other issuers of
securities;
• Ordinance No.39 from 2007 for the disclosure of ownership in public companies;
• Ordinance No. 22 dd. 29.07.2005 on the conditions and order for registration and deregistration of public
companies, other issuers of securities and issues of securities in the register of the FSC;
• Ordinance No. 8 on the Central Depository of securities;
• Corporate Income Tax Act (CITA);
• Income Taxes on Natural Persons Act (ITNPA);
• Commission Regulation (EC) No 809/2004;
• Currency Act.
Governing the trading of securities on regulated market are also the Rules of BSE and the Rules of Central Depository.
The basic legislative acts, applicable to the shares of the Company are POSA and CA. CA consists of general rules for joint
stock companies, while POSA holds special rules for public companies.
The decrees of Chapter XI, Section I from POSA and Ordinance No.39 for the disclosure of ownership in public companies
cover the requirements for the disclosure of significant stakes in the Company.
Any deals with own shares of the Company are settled by Art. 111, para 5-9 from POSA and in the CA.
The tender offer regime is described in Chapter XI, Section II – Art. 148g to Art. 157e from POSA, in Ordinance No.41 for
the requirements to the content and the grounds of the public companies price per share, including the application of
the valuation methods, in case of a merger, contract for joint venture and tender offer, as well as in Ordinance No.13 for
the tender offer for purchase and exchange of shares.
14
SECURITIES NOTE
The condition for delisting from the public companies and other issuers of securities register stated in Art. 30, para 1,
point 3 from the FSC act, are settled in Art. 119 from POSA and in Ordinance No.22 on the conditions and order for
registration and deregistration of public companies, other issuers of securities and issues of securities in the register of
the FSC.
4.3. FORM OF THE SECURITIES
The shares, subject of this offering are registered and dematerialized. The shareholders book of Sirma Group Holding JSC
is kept by the Central Depository with address: Bulgaria, Sofia, 10 Tri Ushi Str., floor 4.
4.4. CURRENCY OF THE SECURITIES ISSUE
The currency of the securities offered is BGN.
4.5. DESCRIPTION OF THE RIGHTS ATTACHED TO THE SECURITIES, INCLUDING ANY LIMITATIONS OF THOSE RIGHTS, AND PROCEDURE FOR THE
EXERCISE OF THOSE RIGHTS
In line with Art. 7, para 1 from the articles of association of the Company, its share capital is divided in 49 837 156 (forty
nine million eight hundred and thirty seven thousand and one hundred and fifty six) common dematerialized registered
shares with voting rights and face value of BGN 1 each.
All shares of the Company are freely transferable and give equal rights to their holders. The articles of association of the
Company does not allow for bearer form shares to be issued, as well as privileged shares with more than one voting right
per share in the general assembly, with guaranteed dividend or with additional liquidation stake. Against the subscribed
common registered shares all shareholders receive depository receipts from the Central Depository.
Each share renders on vote in the general assembly, right to dividend and to liquidation stake, proportional to the face
value of the share. The articles of association of the Company does not include any limitation towards the exercise of the
shares rights. The rights, connected to the shares, are not and cannot be limited by rights, granted to another class of
securities, or by the decrees of a contract or another document.
Each shareholder may handle the shares of the Company without restriction and freely. The transfer of such shares has
its effect from the moment of the entry of the deal in the register of the Central Depository.
4.6. RIGHT TO SHARE IN THE ISSUER’S PROFITS
Each common share gives the right to dividend proportionate to its face value.
Sirma Group Holding JSC distributes dividends in line with the order and conditions stated in the CA, POSA and its articles.
The general assembly decides to distribute dividends upon approval of the annual financial report. In case that the general
assembly adopts such a decision, the profit of the Company is distributed in line with the articles and Art. 247a from CA.
On the grounds of Art. 115c from POSA, the right to receive dividend belongs to the shareholders enlisted in the Central
Depository register on the 14th day after the date of the general assembly, where the annual financial report is accepted
and a decision for profit distribution is taken. The Central Depository issues a shareholders list as of the mentioned date.
The presence of a shareholder on that list is a sufficient condition to receive dividend, once properly identified.
The Company is obliged to notify FSC, Central Depository and BSE immediately for any dividend decisions, including its
size, the conditions and rules for its payments, and at least one financial institution, which will complete the payments.
Once the notification from the previous sentence is received, BSE promptly announces the last date for deals with shares,
entitled to the dividend voted through the general assembly.
The Company is bounded to secure the payment of the voted dividend in a period of three months after the conduct of
the general assembly. The shareholder, entitled to dividend distribution, who does not collect the dividend during the
three months period, may exercise that right in a five years legal term, after which the amount of uncollected dividends
is returned back to the Company’s sheet.
15
SECURITIES NOTE
The articles of Sirma Group Holding JSC does not stipulate any limitation for dividend distribution, as well as certain
procedures for non-residing shareholders. The expenses involved in dividends distribution are paid by the Company.
4.7. VOTING RIGHTS
The general assembly includes all shareholders with voting rights as each share represents one vote in the assembly. The
voting right is exercised by individuals and entities enlisted in the register of the Central Depository 14 days prior the date
of the assembly. Upon an explicit request from the representative of the Company, the Central Depository is obliged to
issue a list of shareholders, stated in the previous sentence, including foreign holders under Art. 136, para 1 from POSA.
All shareholders in a public company are entitled to authorize any individual or an entity to participate and vote in the
assembly on their behalf. The board members of the Company can also be authorized by a shareholder but only after
explicit statement on how to vote on each of the points from the agenda. Shareholders and representatives identify
themselves and certify their presence by signature.
Requirements to the form and content of the authorization are introduced in Art. 116, para. 1 of POSA. Written power
of attorney to represent a shareholder at the general meeting of shareholders of a public company must be for a specific
general assembly, and expressly indicate at least:
 information about the shareholder and the proxy;
 the number of shares covered by the authorization;
 agenda of issues for discussion;
 proposals for decisions on each of the issues on the agenda;
 how to vote on each item, if applicable;
 date and signature.
If the way of voting on the individual agenda items is not stated in the power of attorney, it should pointed out that the
proxy is entitled to decide whether and how to vote. Reauthorization with the rights of the proxy and a power of attorney
granted in violation of the rules of art. 116, para. 1 of POSA, shall be void.
Proxies have the same rights to speak and ask questions at the general meeting, as the respective represented
shareholder. A proxy is obliged to exercise the voting right in accordance with the instructions of the shareholder, enlisted
in the power of attorney. Proxies may represent more than one shareholder at the general meeting of a public company.
In this case the proxy may vote differently under the shares held by the individual shareholders represented.
A public company is obliged to submit a template of the authorization letter on paper or by electronic means, if applicable,
together with the materials for the general meeting or on request after its convening. According to Art. 115, para. 6 of
POSA a company provides the FSC and publishes on its website a template of authorization letter for voting through a
proxy or by correspondence, if applicable. If the template cannot be published for technical reasons, the company must
indicate on its website the way in which the template can be obtained in a hard copy, as in this case and upon a request
of a shareholder, the company sends the template by post at its own expense.
The authorization may be performed through electronic means also. Any public company must provide at least one way
of receiving authorization letters via electronic means. The terms and conditions for the receipt of proxies by electronic
means shall be published on the company’s website.
Additional requirements on the authorization, the presentation of the power of attorney and the giving of instructions
by the shareholder on how to vote can be placed in the articles of the public company. These requirements are necessary
for the identification of shareholders and proxies or to allow for verification of instructions’ content and only to the extent
required to achieve those objectives.
16
SECURITIES NOTE
4.8. RIGHTS IN THE EVENT OF LIQUIDATION
Each common share is entitled to a liquidation stake in proportion to its nominal value. This right is conditional - it arises
and may be exercised only in the event that (so far) during the liquidation of the Company and after satisfying the claims
of all creditors certain assets are left for distribution to the shareholders, and to the size of these assets.
The right to a liquidation stake is available only to individuals and entities registered with the Central Depository as
shareholders at the time of termination of the Company.
4.9. ADDITIONAL RIGHTS, CONNECTED TO THE SHARES
Pre-emption rights in offers for subscription of securities of the same class;
Right to participate in the management, through the issues from the general meeting competence;
Right to information, including the right to get acquainted with the materials on the agenda of the general meeting and
to obtain them on request.
The articles of association of Sirma Group Holding JSC does not allow for shares with special rights and privileges for their
holders.
4.10. RIGHTS TO MINORITY SHAREHOLDERS
Individuals and/or entities holding together or separately at least 5 percent of the capital of a public company, in case of
inaction of the governing bodies, which threatens the interests of the company, may file lawsuits on behalf of the
company against third parties. The company is summoned as a party to this case. Above-mentioned persons may:

to bring a claim before the district court of the company for damages caused to the company by actions or inaction
of members of management and supervisory bodies and the procurators of the company;

to ask the general assembly or the district court to appoint controllers to inspect all accounting records of the
company and prepare a report on their findings;

to ask the district court to convene a general meeting or authorize their representative to convene a general
meeting with a determined by them agenda;

to request the inclusion of items and propose decisions on issues already included in the agenda of the General
Meeting pursuant to Art. 223a of the Commercial Act.

if the company has signed a joint venture agreement, shareholders holding together or separately at least 5% of the
capital of that company may claim before the district court for damages caused to the company by actions or
inactions of persons managing the joint venture.
Shareholders, that hold shares representing at least 5% of the capital of the company for more than three months, may
request the board of directors to convene a general meeting. If within one month from the request, it is not granted or
if the general meeting is not held within three months of the request, the district court of the company convenes a
general meeting or authorizes the shareholders (or their representative), who have requested that, to convene the
meeting.
4.11. REDEMPTION PROVISIONS
The Company may buy-back its own shares based on a decision of the general meeting of shareholders adopted with a
simple majority of the shares represented and in accordance with the legal requirements and provided procedures. In
one calendar year the Company may buy-back more than three percent of its own shares with voting rights in cases of
capital reduction by cancellation of shares and buy-back only under the terms and conditions for a tender offer under
Art. 149b of the POSA.
Outside that hypothesize, the decision of the general assembly determines:
a. the maximum number of shares subject to buy-back;
17
SECURITIES NOTE
b. terms and conditions under which the board of directors carry out the buy-back within a specified period not longer
than five years;
c. the minimum and maximum purchase price.
The capital of a public company cannot be reduced by forced cancelation of shares.
The buying-back is settled by Art. 111, para. 5-9 of POSA and the relevant provisions of the CA.
Any public company shall notify the FSC for the number of own shares to be bought-back within the limit of 3% and to
name the investment intermediary, which received the buy order. The notification must be made not later than the end
of the business day preceding the day of the buy-back. The FSC announces the information received in its register for
public companies and other issuers of securities.
When a public company acquires or transfers its own shares directly or through a person acting in his own name but on
that company’s behalf, it is obliged to disclose information on the number of votes attached to these shares following
the terms and conditions of Art. 100r and 100t of POSA immediately, but not later than four working days of the
acquisition or transfer, when their number reaches, exceeds or falls below 5 or 10 percent of the voting rights. The voting
rights are calculated based on the total number of shares with such rights.
The decision to buy-back shall be entered in the commercial register.
4.12. CONVERSION PROVISIONS
As of the moment of this document, Sirma Group Holding JSC has not issued convertible bonds. The Company’s articles
permit the issuance of convertible bonds in compliance with the CA.
4.13. A STATEMENT OF THE RESOLUTIONS, AUTHORIZATIONS AND APPROVALS BY VIRTUE OF WHICH THE SECURITIES WILL BE ISSUED
The general assembly of Sirma Group Holding JSC held on December 4th 2014 has adopted the following decisions:
1. A decision to change the type of shares of the Company from materialized into dematerialized;
2. Amendments to the articles of association with regard to its future possible publicity;
3. A capital increase through an initial public offering, under the condition that the FSC approves the prepared prospectus
for public offering of shares from that capital increase; Accepts the report from the board of directors under Art. 194,
para 4, second sentence of CA and cancel the preemptive rights of the shareholders under Art. 194, para. 1-3 of CA;
4. Appointing of an investment intermediary to conduct the capital increase in accordance with item 3 of the agenda;
5. Authorization of the board of directors to carry out the necessary actions for the implementation of the decisions
under items 3 and 4 from the agenda;
6. Approve to accept a public statute by the Company pursuant to Art. 110 para 1 of POSA, under the condition that the
FSC approves the prepared prospectus for the public offering of shares from the capital increase, the public offering is
conducted successfully and this capital increase is registered in the Commercial Register;
7. Change in the number of the board of directors. Selecting additional members of the board of directors in connection
with the requirement of Article 116 of the POSA.
The specific parameters, concerning point 3 from the decision of the general assembly, are:
1. Increase the capital from BGN 49 837 156 (forty nine million eight hundred thirty-seven thousand one hundred fiftysix) to BGN 65 837 156 (sixty-five million, eight hundred and thirty-seven thousand one hundred fifty-six), through an
initial public offering of 16 000 000 (sixteen million) New shares under the terms and conditions of the POSA, as follows:

Type of the shares - ordinary, freely transferable, with one vote each, and with the right to dividend and
liquidation stake in proportion to the nominal value;

Conditions (parameters) of the capital increase:
o Number of shares: 16 million units;
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SECURITIES NOTE
o Nominal value per share: BGN 1.00;
o Total nominal value: BGN 16 million;
o Minimum issue price per share: The issue price per share for the capital increase and within the IPO will be
determined by a subsequent decision of the board of directors, and should be in the range of BGN 1.20 to BGN
1.65 per share;
o In case that not all New shares are subscribed, but at least 8 000 000 (eight million) New shares are fully
subscribed and paid, the capital will be increased by the amount of the subscribed and paid shares pursuant to
Art. 192a para 2 of CA.
2. Approves the report from the board of directors under Art. 194, para 4 second sentence of CA and cancels the
preemptive rights of the shareholders pursuant to Art. 194, para 1-3 of CA. These rights grant all existing shareholders to
acquire New shares, corresponding to their stake, and during the capital increase through an IPO. Therefore, all
individuals and entities will be able to subscribe New shares from the capital increase, regardless whether they are an
existing shareholder or not.
In line with empowerment by the general assembly of the Company, the BoD of Sirma Group Holding JSC met on
December 4th 2014 and adopted the following decisions:
1.
Granting an option to all current shareholders to sell a part (up to 5%) of the holdings in shares of the Issuer
under the terms of the approved Prospectus for initial public offering;
2.
Define a method for pro rata allotment for the purpose of the public offering and in the case of oversubscription
of the offered shares from the capital increase;
3.
Approve a procedure, under which the current shareholders shall declare their interest to take advantage of the
option to sell up to 5% of their shares in the case of oversubscription;
4.
Approve methodology for Offering price determination.
4.14. IN THE CASE OF NEW ISSUES, THE EXPECTED ISSUE DATE OF THE SECURITIES
This IPO of Sirma Group Holding JSC will be in force upon its entry in the Commercial Register. The issuance of New shares
is performed also through its registration in the Central Depository, which is expected to take place around September October 2015.
4.15. A DESCRIPTION OF ANY RESTRICTIONS ON THE FREE TRANSFERABILITY OF THE SECURITIES
According to the articles of Sirma Group Holding JSC, all shares of the Company form one class - ordinary, dematerialized,
freely transferable shares with the right to vote. The articles does not provide for restrictions on the exercise of share
rights. The transfer of shares between shareholders and third parties shall be implemented freely, subject to the
provisions of the Bulgarian legislation. The transfer of shares takes effect upon the registration of that transfer in the
Central Depository.
After the approval of this prospectus for the initial public offering of Sirma Group Holding JSC and potentially successful
IPO, the shares of the Company will be registered with the FSC will then be listed on the BSE. All shares issued by the
Company will be offered for trading on the BSE.
Upon the registration of the IPO shares on the BSE, trading will be carried out through the regulated market or through
the OTC market - "Over-The-Counter" (OTC). Implementing the latter, an investment intermediary shall comply with the
requirements for public disclosure of information and the manner of its disclosure pursuant to Art. 38, para 4-6 of the
Financial Instruments Markets Act (FIMA). The transfer of shares shall take effect upon registration of the transaction in
the Central Depository.
To buy or sell shares on a regulated market, investors should submit "buy" or "sell" order with an investment
intermediary, which clients they are. That investment intermediary performs the necessary actions to register the
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SECURITIES NOTE
transaction in the Central Depository once a transaction is performed on the regulated market. The shares are transferred
from the seller’s to the buyer’s account after the settlement (transaction execution).
The transfer of shares outside the regulated market (an OTC deal) is performed on the ground of a sale-purchase
preliminary established contract between the parties of the transaction. In this case, the parties shall submit data and
documents to a licensed investment intermediary acting as a registration agent. The investment intermediary registers
the deal on BSE as off- market and carry out the necessary actions to register the transaction in the Central Depository
and its settlement. The transfer of shares in the case of donation and inheritance is performed in the same fashion
through an investment intermediary acting as a registration agent.
The transfer of shares is considered implemented from the time of registration in the Central Depository.
According to Ordinance № 38 on the requirements to the investment intermediaries, investment intermediaries are not
authorized to execute an order for sale of shares if the shares are not available in the customer's account or are blocked
by the depository institution, as well as if they are pledged or under distraint. Therefore, shareholders who hold shares
on which there is a pledge or distraint or are otherwise blocked, cannot sell them until this barrier is not removed. The
prohibition in the previous sentence in case of pledge does not apply if the transferee is informed about the pledge and
has explicitly agreed to acquire the pledged shares, and there is explicit consent of the pledgee as provided in the Special
Pledges Act. Prohibition of transfer of pledged shares shall not apply in the event that the pledge is set over an aggregate
under the Special Pledges Act.
Investment intermediary may not execute a client’s order, if the client or his representative refuse to submit the
declaration under Art. 35, para. 1 of Ordinance №38 or declares that the transaction - subject of the order represents
concealed purchase or sale of financial instruments. The refusal of the investment intermediary is certified by a separate
document signed by the client.
Transactions with shares of the Company are carried out under the terms and conditions of the Public Offering of
Securities Act, the Markets of Financial Instruments, Regulation №38 on the requirements to the investment
intermediaries and other regulations for the implementation of the POSA and FIMA, the BSE Regulations and rules of
Procedure of the Central Depository. More information on the transfer of shares can be obtained from the contact
persons listed at the end of this document for the offered securities and any investment intermediary.
4.16. AN INDICATION OF THE EXISTENCE OF ANY MANDATORY TAKEOVER BIDS AND/OR SQUEEZE-OUT AND SELLOUT RULES IN RELATION TO THE
SECURITIES.
At present there are no proposals for mandatory takeover / acquisition or rules on compulsory purchase and sale with
respect to the shares issued by "Sirma Group Holding" AD. After a successful listing of the shares they can be a subject of
compulsory purchase in line with the hypothesis of Art. 157a from POSA, where an entity/individual, as a result of a
tender offer to all shareholders with voting rights, acquires directly, through related parties or indirectly in line with Art.
149, para 2 from POSA, at least 95% of the voting shares in a public company, and is entitled to squeeze out the remaining
shareholders within three months of the tender offer ending date.
4.17. AN INDICATION OF PUBLIC TAKEOVER BIDS BY THIRD PARTIES IN RESPECT OF THE ISSUER’S EQUITY, WHICH HAVE OCCURRED DURING THE
LAST FINANCIAL YEAR AND THE CURRENT FINANCIAL YEAR. THE PRICE OR EXCHANGE TERMS ATTACHING TO SUCH OFFERS AND THE OUTCOME
THEREOF MUST BE STATED
As of the date of this document, the Company has not been a subject to tender offers, including in view of the fact that
"Sirma Group Holding" AD is not yet a public company within the meaning of the POSA and the Company's shares are not
listed for trading on BSE Sofia.
4.18. INFORMATION ON TAXES ON THE INCOME FROM THE SECURITIES WITHHELD AT SOURCE AND INDICATION AS TO WHETHER THE ISSUER
ASSUMES RESPONSIBILITY FOR THE WITHHOLDING OF TAXES AT THE SOURCE
Income from shares may be in the form of a positive difference between the sales price and the acquisition price (capital
gain) or in the form of dividends.
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SECURITIES NOTE
Dividend can be obtained after a decision of the competent authority of the Company for the distribution of part or the
entire positive financial result for the period between its shareholders.
4.18.1. TAXATION OF INCOME FROM DIVIDENDS AND LIQUIDATION SHARES
а) local entities
According to Art. 27, para. 1 pt. 1 of CITA income as a result of the distribution of dividends by local legal entities is not
recognized for tax purposes. Therefore, income from dividends distributed to resident legal entities are exempt from
corporate tax.
According to Art. 194, para. 1 of CITA the withholding tax is levied on dividends and liquidation quotas distributed
(personified) by local legal entities in favor of local legal persons who are not traders, including municipalities. This tax is
final and is withheld by local legal entities distributing dividends or liquidation proceeds. Therefore, income from
dividends distributed to persons under the preceding sentence is subject to withholding tax at the rate of 5 percent.
The Issuer, as the payer of the income from distributed dividends and paid liquidation quotas under the shares of this
issue will withhold the final tax according to the statutory requirements.
b) foreign entities:
According to Art. 194, para. 1 of CITA final withholding tax is withheld when local entities distribute dividends to foreign
entities, except where the dividends allocated to a mutual fund, a foreign entity who is resident for tax purposes in a
Member - State of the European Union or other state - party to the Agreement on the European Economic Area, or the
dividends are realized by a foreign legal entity through a permanent establishment in the country.
Therefore, income from dividends distributed to foreign legal entity (apart from the abovementioned cases) is subject to
withholding tax at the rate of 5 percent. This tax is final and is withheld by local legal entities when distributing dividends
or liquidation proceeds.
The Issuer, as the payer of the income from distributed dividends and paid liquidation quotas connected to the shares subject of this offering, will withhold the final tax according to the statutory requirements.
c) resident and non-resident individuals
According to Art. 38, para. 1 of Individuals’ Income Tax Act (IITA), final tax is levied on income from dividends and
liquidation shares in favor of local and foreign individuals from a source in Bulgaria.
The tax on dividends is calculated on the gross amount, determined by the decision for dividend distribution.
The tax on dividends in the form of hidden profit distribution is calculated on the gross amount of the accrued cost.
The final tax on the income from liquidation quotas is determined on the positive difference between the value of the
liquidation quota and documented cost of acquisition of the share in the company.
Income from dividends and liquidation quotas distributed to resident and non-resident individuals is subject to a final tax
of 5 percent, which is withheld and paid by the Issuer of shares - payer of the income.
The Issuers, as the payer of the income from distributed dividends and paid liquidation quotas connected to the shares subject of this offering, will withhold the final tax according to the statutory requirements.
4.18.2. CAPITAL GAIN
а) local entities
According to Art. 44 of CITA in determining the financial result for tax purposes, the accounting financial result shall be
reduced by the gain from financial instruments operations within the meaning of § 1, p. 21 of the additional provisions
of that Act, defined as the positive difference between the sales price and the purchase cost of these financial
instruments.
Under § 1, p. 21, letter "a" of the additional provisions of CITA "Dealing with financial instruments" for the purposes of
Art. 44 are transactions with shares and rights, performed on a regulated market within the meaning of Art. 73 of the
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SECURITIES NOTE
Markets in Financial Instruments Act; "Rights" for purposes of the preceding sentence are the securities giving the right
to subscribe a certain number of shares in relation to a decision to increase the capital;
Therefore, the income generated from transactions with shares performed on the regulated market organized by BSE is
not subject to corporate tax.
Loss from the same transactions is not recognized as an expense for tax purposes.
b) foreign entities:
According to Art. 196 CITA dealing with financial instruments within the meaning of § 1, p. 21 of the additional provisions
of that Act is not subject to withholding tax income.
Under § 1, p. 21, letter "a" of the additional provisions of CITA "Dealing with financial instruments" for the purposes of
Art. 44 are transactions with shares and rights performed on a regulated market within the meaning of Art. 73 of the
Markets in Financial Instruments Act; "Rights" for purposes of sentence one are securities giving the right to subscribe a
certain number of shares in relation to a decision to increase the capital;
Therefore, any income from transactions with the shares, subject of this offering, performed on the regulated market
organized by "Bulgarian Stock Exchange - Sofia" AD is not subject to withholding tax.
c) resident individuals
According to Art. 13 para. 1 pt. 3 PITA, in connection with §1, item. 11 of the additional provisions of PITA, income from
disposal of financial instruments within the meaning of § 1, p. 11 of the additional provisions is not taxable; Under § 1, p.
11, letter "a" of the additional provisions of the same Act "Dealing with financial instruments" for the purposes of Art. 13
para. 1 pt. 3 are transactions with units of collective investment schemes, shares and rights, performed on a regulated
market within the meaning of Art. 73 of the Markets in Financial Instruments Act; For purposes of sentence one, rights
are the securities giving the right to subscribe a certain number of shares in relation to a decision to increase the capital;
Therefore, any income of resident individuals based on transactions with the shares, subject of this offering, performed
on the regulated market organized by "Bulgarian Stock Exchange - Sofia" AD is not subject to withholding tax.
d) non-resident individuals
According to Art. 37, para. 1, p. 12 of IITA, final tax is levied on the income of foreign individuals from the sale, exchange
or other transfer of stocks, shares, compensatory instruments, investment bonds and other financial assets.
According to Art. 37, para. 7 of PITA, final tax is not levied on the income from the preceding sentence, when released
from taxation under PITA and are accrued/paid to foreign individuals, resident for tax purposes in a Member - State of
the European Union, as well as in another Member - State of the European Economic Area (EEA). Therefore, income from
transactions carried out on the regulated market of financial instruments within the meaning of Art. 73 of FIMA, are not
subject to withholding tax when they are paid to non-resident individuals, resident for tax purposes in a Member State
of the EU or EEA.
When the person is a resident of a country outside the EU or EEA, a tax amounting to 10 per cent is withheld. Tax shall
be declared and paid by the person - recipient of income, without commitment from the Issuer.
AGREEMENT FOR THE AVOIDANCE OF DOUBLE TAXATION
In case that the Republic of Bulgaria and the foreign country, whose resident has realized income in Bulgaria, has signed
an Agreement for double taxation avoidance (ADTA), its provisions shall apply with priority to the Bulgarian national
legislation. The procedure of application of ADTA is covered in detail in Chapter XVI, Section III of the Tax-Insurance
Procedure Code (TIPC). The foreign entity or individual shall certify before the revenue authority the existence of grounds
for ADTA application. The foreign entity or individual certifies that: 1) is a resident of the other State within the meaning
of the ADTA; 2) is the owner of the income source in Republic of Bulgaria; 3) does not have a permanent establishment
or fixed base in the territory of Bulgaria, with which the respective income is effectively connected; 4) the special
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SECURITIES NOTE
provisions for the implementation of ADTA or its individual provisions relating to specified in the ADTA entities or
individuals, when such special requirements are contained in the ADTA.
Circumstances referred to in TIPC are certified by official documents, including excerpts from public records and
statements. Other written proves are eligible when such official documents are not available. Documents that certify the
type, amount and grounds for the benefits, should be presented.
In case the income is originated from dividends from a public company, proves for that are: the decision of the general
meeting of the company; coupon for paid dividends; extract from the shareholders book, certified by the company;
temporary certificate; registered certificate of dematerialized shares; excerpt from the book of dematerialized shares or
other document certifying the type and amount of income and the amount of the foreign entity’s or individual’s stake.
In case the income is originated from liquidation stake - a document proving the investment size, final liquidation balance
after creditors’ satisfaction and document stating the distribution of the liquidation stake. If the distribution of the
liquidation stake is in kind - a decision of the partners or shareholders and documents, which serve for the definition of
the market price for liquidation;
In case the income is originated during a transfer of shares and tradable share rights and when they are not exempt from
taxation under the law - a document for transfer of rights and a document proving the sale and the acquisition price.
The foreign entity or individual submits the request and adjoining documents under Art. 139 of TIPC for ADTA application.
The ADTA provisions apply only if the opinion of the revenue authority on this request approves the request. Otherwise,
the provisions of the relevant material tax law, in this case the Bulgarian tax legislation, are in force. The foreign entity or
individual has the right to appeal if its request is rejected.
When the accounted income, which source is in the Bulgaria, amounts above BGN 100,000 per year, the above
circumstances are verified through the income payer. In any such cases, requests for application of ADTA are not
submitted with the revenue authority.
4.19. FOREIGN EXCHANGE LEGISLATION
The Foreign Exchange Act (FEA) establishes the legal regime for transactions and payments between local and foreign
entities and individuals, cross-border transfers and payments and the import and export of Bulgarian lev and foreign
currency. Applicable to imports and exports of cash are the provisions of Regulation (EU) 1889/2005 of the European
Parliament and of the Council, the FEA and Ordinance № N-1 01.02.2012 for the transfer of cash, precious metals,
precious stones and any craftwork with and from the same, across the country border, and for the keeping of customs
registers under Art. 10a from the FEA. The text below discusses these aspects of the legal regime relevant to foreign
entities and individuals who invest in shares. Under the provisions of Regulation (EC) 1889/2005 (implemented by
Ordinance № 10 of 2003 of the Minister of Finance), Bulgarian and foreign individuals may import or export cash up to €
10,000 or its equivalent in other currency freely, without any written declaration to the customs authorities. The import
and export of local and foreign individuals of more than EUR 10,000 in cash or its equivalent in another currency must be
declared to the customs authorities. Transfer of funds of EUR 10,000 or more or its equivalent in another currency across
the border to or from a Member - State of the European Union shall be declared upon a request of the customs
authorities. The declaration contains details of the owner and the recipient and the amount, size and type, origin, purpose
and nature of the transaction and its route. Furthermore, any individual who exports sum in excess of BGN 30,000 or its
equivalent in foreign currency must submit a certificate issued by the National Revenue Agency (NRA), certifying that the
person has no tax arrears or a document certifying that the person is not registered with the NRA. Such a declaration is
not required by foreign individuals who export a sum not exceeding the amount of imported cash that have been declared
to the customs authorities at their last entry.
An entity or an individual carrying out cross-border transfer or payment to a third party in the amount of BGN 30,000 or
more or its equivalent in another currency must submit to the payment service provider, documents certifying the
grounds and amount of the transfer, and a declaration in line with a joint Ordinance from the Minister of Finance and
the BNB (Ordinance № 28 of 18.12.2012 on the information and documents presented to the payment service providers
when carrying out cross-border transfers and payments to a third party.
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SECURITIES NOTE
4.20. INDICATION OF WHETHER THE ISSUER ASSUMES RESPONSIBILITY FOR THE WITHHOLDING OF TAXES AT THE SOURCE.
"Sirma Group Holding" Jsco. assumes responsibility for the withholding of relevant withholding tax.
5. TERMS AND CONDITIONS OF THE OFFER
5.1. CONDITIONS, OFFER STATISTICS, EXPECTED TIMETABLE AND ACTION REQUIRED TO APPLY FOR THE OFFER
This IPO will be carried out based on the decision of the general meeting of shareholders of Sirma Group Holding Jsco
held on 04.12.2014 and decision of the Board of Directors of the Company from 15.12.2014.
The Subject of the public offering are the shares issued by Sirma Group Holding Jsco. The Company offers 16 million New
shares with face value of BGN 1. The share capital before the public offering amounts to BGN 49,837,156, which in the
case of successful completion of the offering will eventually amount to BGN 65,837,156. Therefore, the New shares
represent 24.3% of the capital after its increase. The offering will be conducted only in the Republic of Bulgaria. To be
considered successful a minimum of 8,000,000 New Shares must be subscribed and paid. There are no restrictions on the
minimum or maximum number of shares that an investor can subscribe. The issue price of each share of this issue ranges
from minimum price of BGN 1.20 to the maximum price of BGN 1.65 according to the above decision of the General
meeting of Sirma Group Holding Jsco.
Subject of the IPO are also Existing shares of up to 5% of the share capital of the Issuer or up to 2,491,858 ordinary shares
currently owned by the existing shareholders of Sirma Group Holding Jsco. The Existing shares will be sold by the Selling
Shareholders at the price determined by the methodology for calculating the price of the New shares and within the
terms described below. The Existing shares will be offered only if the subscribed shares within the subscription period
and under the Offering Price exceed the maximum amount of New shares set by the general assembly – 16,000,000 units.
The Issuer may extend the term of the public offering once for up to 60 days, making the necessary amendments to the
prospectus and notify the Financial Supervision Commission. In this case, the last day of the extended period shall be
considered a deadline of the Offering. According to Art. 84, para. 2 of POSA, the Issuer immediately announces the
extension to the FSC, through the websites of the Issuer, and the Investment Intermediary, and through the Commercial
register and the daily newspapers under 5.1.2. below.
The IPO will be deemed unsuccessful if less than the minimum amount of 8,000,000 New shares is subscribed after the
closing date of the Offering. The Company shall inform FSC about the result of the Offering within 7 (seven) days of its
deadline. In that case no Offering Price and Allotment list will be determined and prepared. All Investors, that have
submitted Orders, will not receive any allocation confirmation and thus shall not be obliged to pay the amount of shares
subscribed. In this regard, no funds will be accumulated in the raising account and thus no funds will have to be returned
to any investors.
In the event that for reasons beyond the Issuer and/or the Investment Intermediary reasons the raising account is not
credited within the time allowed by the minimum amount of money (the minimum amount of 8,000,000 new shares
multiplied by the announced Price), the Company shall notify the FSC of the outcome of the Offering within 7 (seven)
days after its deadline. On the day of the notification under the preceding sentence, in accordance with Art. 89, para. 4
of POSA, the Issuer shall notify the bank about the results of the Offering and publish on its website and that of the
Investment Intermediary, managing the public offering, an invitation to the persons who have subscribed securities, in
which to declare the conditions and procedures for refunding the collected amounts. That invitation shall be published
in the Commercial register website as well as in the selected daily newspapers. Any accumulated funds are returned to
the persons who have subscribed shares within one (1) month after the notice, together with accrued interest, if any.
The terms and conditions for the return of the amounts will be stated in the invitation to the subscribed shares investors.
In the event that the capital increase is not entered in the Commercial register, Sirma Group Holding Jsco will announce
this circumstance in the order specified in the preceding paragraph and in line with art. 89, para. 4 of POSA. The funds
accumulated are returned to the persons who have subscribed shares again in the manner specified in the preceding
paragraph.
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5.1.1. Total amount of the issue/offer, distinguishing the securities offered for sale and those offered for subscription
Subject of the public offering are up to 18,491,858 (eighteen million four hundred and ninety-one thousand eight hundred
fifty-eight) ordinary shares, of which 16,000,000 (sixteen million) New Shares and up to 2,491,858 (two million four
hundred and ninety-one thousand eight hundred fifty-eight) Existing shares. The Existing shares will be offered only if the
subscribed shares within the subscription period and under the Offering Price exceed the maximum amount of New
shares set by the general assembly – 16,000,000 units.
The IPO will be successful only if at least 8,000,000 (eight million) New shares are subscribed and paid. The capital of the
Issuer will be increased by the amount of the subscribed shares. Each New share has a nominal value of BGN 1 (one) and
issue price range from a minimum price BGN 1.20 to a maximum price of BGN 1.65 each.
No deviation above the upper threshold of the issue of New shares is possible. The offered number of shares cannot be
reduced, but may be increased only in the case of oversubscription through "green-shoe" option as per item. 6.5. below.
Upon successful completion of the subscription, follows a registration of the capital increase of Sirma Group Holding Jsco
in the Commercial Register, then a registration of the New shares in the Central Depository, FSC and the BSE-Sofia. The
Company's ordinary shares will be subsequently listed (secondary public offering) of the BSE-Sofia.
5.1.2. The time period, including any possible amendments, during which the offer will be open and description of the
application process
Start of the Offering: Pursuant to Art. 92a. 3 of POSA, the date of publication of the announcement under Art. 92a para.
1 is considered the beginning of the public offering. The Issuer will publish an announcement for the initial public offering
under Art. 92a. 1 of POSA (Announcement) in the Commercial register, in two daily newspapers ("Capital Daily" and
"Sega"), on its website and on the website of the Investment Intermediary Elana Trading. The Announcement may be
published only if the Financial Supervision Commission has approved the Prospectus.
Start and duration of the Subscription: The first day of the Subscription is the first working day following the expiration
of 7 calendar days from the last date on which the Announcement was published in any of the above places. Purchase
Orders (Orders) will be accepted within thirty calendar days from this date, every day - from 09.00 to 16.00. The
Subscription ends on the day of announcement of the Allotment list and informing all investors of the respective amount
of shares subscribed.
Types of Orders: Two types of Orders will be accepted:
• Limit is the order for subscription (purchase) of shares with defined share price. By submitting limit Orders each
investor agrees to receive shares in accordance with the methodology defined in paragraph 7.1. below if the
Offering Price is lower than or equal to the one, defined by his/her Limit Order. Limit Orders may be executed in
part; and
• Market is the order for subscription of shares, which contains only total amount in BGN or total number of shares,
that the respective investors wishes to subscribe. That order can also be executed partially or fully. With the
submission of the market Order each investor agrees to receive shares in accordance with the methodology
defined in paragraph 7.1. below.
The submission of an Order is considered confirmation that the investor:
• Has read the Prospectus and has accepted the terms and conditions of the Offering;
• Gives his/her consent to receive lesser than the stated in his/her Order number of shares, or to receive no shares
in line with the conditions, stated in this Securities Note;
• Agrees to receive New shares in a ratio with Existing shares, which is defined by the Issuer and the Investment
Intermediary;
• Agrees to transfer the amount, equal to the allotted shares multiplied by the Price and together with all fees and
commissions, connected to the Offering, following the instructions of the Investment Intermediary; and
• Agrees that if the due amount for the allotted shares has not entered the escrow account until the Last Date for
Payment (including), he/she will not receive any shares and will not be entitled to any claims to the Issuer and the
Investment Intermediary.
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SECURITIES NOTE
Orders may be submitted in the specified offices of the authorized Investment Intermediary, personally or through a
proxy. Orders (completed and signed by the investor) can be submitted through other licensed investment intermediary
which transmits them to the authorized Investment Intermediary within the terms of the Offering referred to in this
document.
Announcement of the Price per share (Price): The Price will be announced on the first working day after the deadline for
Orders submission. The Offering will be deemed unsuccessful should the submitted Orders does not cover the minimum
amount of New Shares offered. In that case, the Issuer shall notify the relevant institutions and the public about the
outcome of the Offering pursuant to item. 5.9. below. In case of unsuccessful Offering, no Price will be announced.
Calculation of the number of Existing shares to be sold: In the event that the total amount of subscribed shares
submitted at the price level of the announced Price exceeds the maximum number of New Shares, set by the
shareholders, the Selling shareholders will have 5 working days after the announcement of the Price to submit with the
Investment Intermediary their written statement. By doing so, they will declare their wish to sell up to 5% of their Existing
shares by the announced Price.
Allocation of Existing shares: Existing shares will be allotted on the first working day after the deadline for submission of
written statements by the Selling shareholders.
Announcement of the Allotment list: The Allotment list will be announced on the business day following the day of
allotment of existing shares, if such are to be distributed. Otherwise, the Allotment list will be announced on the day of
the announcement of the Price.
Last date for payment of any subscribed shares is the end of the third business day after the announcement of the
Allotment list for the distribution of the Offered shares.
End of Offering: The Offering will end after the payment of the subscribed shares in line with the preceding paragraph.
Irrevocable Orders
Under the Bulgarian law, no investor can withdraw his Order. However, he/she has the right to renounce the subscribed
shares in the cases, and under the terms and conditions of the Public Offering of Securities Act.
Submitting Orders through a proxy
Orders can be placed through a proxy that shall present a notarized power of attorney for subscription of new shares. If
the proxy is an individual, he/she shall present an identity document, and if the proxy is an entity - a certificate of good
standing, registration act or other analogous documents (depending on whether it is local or foreign entity).
Elana Trading Inc. and other investment intermediaries, that will accept Orders in the applicable regulations and their
general conditions and practice, have the right to refuse to accept the Order, if they are not satisfied with the type, form,
validity or other circumstances, related to the submitted documents.
Offices of Elana Trading Inc., which will accept Orders
Investment Center – Sopharma Business towers
Investment Center ELANA – “Rakovski” – Sofia
5 Lachezar Stanchev Str., Sofia 1756, Bulgaria
96 G.S. Rakovski Blvd., Sofia 1000, Bulgaria
Phone: +359 (2) 810 00 65, fax: +359 (2) 958 15 23
Phone: +359 (2) 810 00 60, 810 00 61, 810 00 62
Е-mail: [email protected]
E-mail: [email protected]
Investment Center ELANA – Plovdiv
Investment Center ELANA – Varna
1 Han Kubrat Str., Delovi Centre Plovdiv, Plovdiv 4000, Bulgaria
8 Slivnitza Blvd., Varna 9000, Bulgaria
Phone: +359 (32) 626 428, 275 657
Phone: +359 (52) 608 241, fax: +359 (52) 608 242
Investment Center ELANA – Pleven
Investment Center ELANA – Shumen
18 Sv. Sv. Kiril I Metodii Str. Business Center Prestige, Pleven
2 Rafail Popov Str., Shumen 9700, Bulgaria
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SECURITIES NOTE
5800, Bulgaria
Phone: +359 (54) 800 536, 800 535, 862 260
Phone: +359 (64) 840 114, (0887) 556 669
Fax: +359 (54) 800 536
Investment Center ELANA – Ruse
Investment Center ELANA – Burgas
12 Voden Str., Ruse 7000, Bulgaria
32 Lermontov Str., Burgas 8000, Bulgaria
Phone: +359 (82) 825 814
Phone: +359 (56) 825 238, 700 704
ORDERS’ CONTENT
The Order shall must contain at least:
• the names and the unique client number of the investor and his/her representative in the investment
intermediary, and if such numbers are absent: full name, PIN, and current address, respectively company / name,
MI (Unified Identification Number / BULSTAT), registered office and address the investor and its legal
representative or proxy, and if the investor is a foreign individual - similar identification data, including personal /
social security number of the individual and registration number or other similar number of a legal entity;
• The name of the Issuer (Sirma Group Holding Jsco) and ISIN code of the shares;
• Value of the Order;
• Date, place and exact time of Order’s submitting;
• Signature of the individual/representative of the entity submitting the Order, or its proxy.
Elana Trading Inc. has the right to prepare and demand the filling in of any additional content within the Order form.
ORDER’S ATTACHMENTS
The following documents are the minimum requirements for attachments to each order. The Investment Intermediary
and all other licensed intermediaries, which will accept Orders may provide additional instructions with regard to the
documents attached.
• for Bulgarian legal entities - original or notarized copy of a certificate of good standing issued not earlier than six
months before the date of the Order’s submitting and certified by the legal representative copies of documents
about the unified identification number;
• for foreign legal entities - a copy of the registration certificate (or other identifying document, proving the
existence / incorporation of the entity) in the respective foreign language, containing the full name of the legal
entity, date of issue and address of the legal entity; the names of the persons authorized to represent it,
accompanied by a translation of these documents in Bulgarian or English;
• for Bulgarian individuals – copy of their identity document certified by them;
• for foreign individuals – copy of their passport, containing information about the full name; passport number;
date of issue (if there is such in the passport); expiration date (if any); nationality; address (if included in the
passport) and a copy of the passport pages containing other information and a picture of the individual, and
translation of these documents in Bulgarian or English;
• original of notarized power of attorney in case the Order is submitted by a proxy
• bank account of the investor to be refunded if the Offering is terminated.
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SECURITIES NOTE
SUBMITTING ORDERS
Legal entities shall submit orders through their legal representatives or through a proxy with notarized power of attorney.
The latter identify themselves with an identity document (a copy of which is attached to the Order) and a certificate of
good standing of the legal entity.
Individuals submit orders in person or through a proxy, as all of them identify themselves with an identity document and
attach to the Order verified by them copy of the document.
Foreign individuals identify themselves with their original foreign passport for entry into Bulgaria and attach to the Order
legalized original translation of the pages of the passport containing information about the full name; passport number;
date of issue / if there is such in the passport /; expiration date / if any / nationality; address / if there is such in the
passport / and usually translated copy of passport pages containing other information and a photograph of the person.
The order can be submitted through a proxy, which is legitimized by a notarized power of attorney and the documents
listed above in for the authorizer (local or foreign, legal or an individual).
The order can be placed through a licensed investment intermediary, whose client is the investor willing to acquire the
offered shares. In this case the respective investment intermediary transmits the Order to the authorized Investment
Intermediary signed by the client or his authorized representative, together with the aforementioned appendices and /
or duly certified aggregated order through a provided in advance (by Elana Trading) form. In such cases, the power of
attorney authorizing the other investment intermediary by the respective client shall not be presented to Elana Trading.
The authorized Investment Intermediary, as well as all other licensed investment intermediaries through which Orders
are submitted, and based on the rules applicable to their business regulations, general conditions and practice, have the
right to refuse accepting Orders if they are not satisfied with the type, form, validity, attachments and other
circumstances related to the submitted documents. The Investment Intermediary and all other licensed investment
intermediaries have the right, in certain cases, to accept an Order without attaching all of the required documents, where
the information which is contained in the missing documents, is obtainable through a different source and they have no
reason to doubt the relevance of that source.
THE FSC, RESPECTIVELY THE DEPUTY CHAIRPERSON OF THE FSC, MAY RESTRAIN FOR UP TO 10 WORKING DAYS OR EVEN DISCONTINUE THE SALE OR
OTHER TRANSACTIONS WITH CERTAIN SECURITIES, IF THE FSC ESTABLISHES THAT ITS SUPERVISED ENTITIES ARE OPERATING IN VIOLATION OF THE
POSA, OTHER REGULATIONS OF ITS IMPLEMENTATIONS, FSC’S OR DEPUTY CHAIRPERSON’ DECISIONS. THAT ACTION CAN BE UNDERTAKEN IF THE
RESPECTIVE ACTIONS OF THE SUPERVISED ENTITIES PREVENT THE CONDUCTING OF THE FSC’S CONTROLLING ACTIVITY OR THREATEN THE INTEREST
OF INVESTORS.
5.2. AN INDICATION OF WHEN, AND UNDER WHICH CIRCUMSTANCES, THE OFFER MAY BE REVOKED OR SUSPENDED AND WHETHER REVOCATION
CAN OCCUR AFTER DEALING HAS BEGUN
The Issuer reserves the right, after consultation with the Investment Intermediary to terminate or suspend the Offering,
subject to the conditions below and without giving any reason. If the Board of Directors of Sirma Group Holding Jsco
decide to terminate or suspend the Offering, the Company must notify the FSC and BSE and all investors immediately,
but not later than the next working day after the decision. The Company shall also proceed to perform the respective
publications in the manner described below in section. 5.9. A full description of the manner and date in which results of
the offer are to be made public.
Based on the decision of the Board of Directors of the Issuer for the capital increase through an IPO, if at least 8 million
New shares are not subscribed (allotted) and paid the Offering will be terminated. The Offering will also be terminated if
the commercial register refuses the entry of the New shares and the capital increase.
Under Art. 92z, para. 1 pt. 4 and. 6 of POSA the Financial Supervision Commission is entitled to stop the public offering
for a maximum of 10 consecutive working days or to discontinue the public offering on any single occasion if it has
reasonable grounds to believe that the provisions of this Act or its regulations are violated.
Pursuant to Art. 85 para. 2 of POSA the Company is required, no later than the end of the next business day after the
occurrence, becoming aware of significant new factor, material mistake or inaccuracy relating to the information
contained in the prospectus, which may affect the assessment of the offered securities, to draw up an supplement to the
prospectus and submit it to the FSC. The Company is obliged to prepare and submit that supplement if such an event
28
SECURITIES NOTE
occurs during the period between the issuance and approval of the Prospectus and the closing date of the public offering
or the first date of trading on a regulated market. If the FSC finds that some of the requirements of POSA and its
implementing acts are not met, it may refuse to approve the supplement to the prospectus and stop the public offering
pursuant to Art. 212 of the POSA.
Pursuant to Art. 91 of the Financial Instruments Markets Act (FIMA), the market operator ("BSE-Sofia") may suspend
trading with certain financial instruments or to remove them from trading if they do not meet the requirements laid
down in the Rules of the regulated market. BSE-Sofia may execute that if it does not significantly damage the interests of
investors and the proper functioning of the market. The market operator shall make public the decision to suspend
trading with the financial instruments or to remove these instruments from trading, and notify the FSC about its decision.
Art. 212 of POSA, Art. 118 of FIMA and Art. 37 of the Act against market abuse through financial instruments regulate the
powers of the deputy chairperson of the FSC to stop the trading with certain financial instruments.
5.3. A DESCRIPTION OF THE POSSIBILITY TO REDUCE SUBSCRIPTIONS AND THE MANNER FOR REFUNDING EXCESS AMOUNT PAID BY APPLICANTS
The Company does not provide the opportunity to change the number of offered shares. If the subscribed shares are less
than the offered ones, but at least the minimum amount required by the Company to determine the capital increase for
successful are subscribed and paid, the Company increases its capital with the subscribed and paid shares.
5.4. DETAILS OF THE MINIMUM AND/OR MAXIMUM AMOUNT OF APPLICATION (WHETHER IN NUMBER OF SECURITIES OR AGGREGATE AMOUNT
TO INVEST)
Any potential investor has the opportunity to submit his/her Order for the any amount, as no restrictions on minimum
and maximum number of subscribed shares are stipulated.
5.5. AN INDICATION OF THE PERIOD DURING WHICH AN APPLICATION MAY BE WITHDRAWN, PROVIDED THAT INVESTORS ARE ALLOWED TO
WITHDRAW THEIR SUBSCRIPTION
According to the legal definition – subscription means unconditional and irrevocable intention to acquire shares in the
process of their issuance and payment of their full issue price (§ 1, p. 11 of the Additional Provisions of POSA). In this
sense, once an Order is submitted by an investor it cannot be withdrawn. He may deny the subscribed shares under the
terms and conditions of Art. 85 para. 6 in conjunction with para. 2 of POSA.
5.6. METHOD AND TIME LIMITS FOR PAYING UP THE SECURITIES AND FOR DELIVERY OF THE SECURITIES
The transfer of the issue price for the New shares shall be executed to a special joint raising account opened in the name
of Sirma Group Holding Jsco in UniCredit Bulbank AD. The account number will be stated in the announcement under
Art. 92a of POSA. In the case of oversubscription and, if desired by the current shareholders of the Company, Existing
shares will be allotted together with the New shares. The amount of the Existing shares that would be allotted will be
called Additional shares for the purposes of this document. The transfer of the value of the Additional shares shall be
executed towards the same special account.
The special raiging account should be credited with the payment for the subscribed shares not later than the end of the
third working day in the country, following the day of the announcement of the Allotment list. The verification document
for the executed payment is the bank transfer order or the deposit slip (if the payment is performed through cash
deposit). The payment document must contain at least the name (title) of the investor and the investment intermediary
acting on behalf of the investor, the total number of paid shares, and other data as instructed by Elana Trading Inc. These
instruction will be published on Elana’s website the day before the start of the Subscription at the latest, according item
5.1.1. above.
Any funds in the raising account cannot be used before the completion of the Offering and the registration of the capital
increase in the Commercial Register (Art. 89, para. 2 of POSA). UniCredit Bulbank AD will debit the raising account after
registration in the Commercial Register of the capital increase of Sirma Group Holding Jsco, crediting 1/ the escrow
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SECURITIES NOTE
account established for the funds for the transactions with Additional shares with the funds received for the allotted
Existing (Additional) shares and 2/ Issuer’s own account. The funds in the escrow account, received for the transactions
with Additional shares, shall be blocked and cannot be used by the Selling Shareholders, before the settlement of the
transactions with Additional shares with the Central Depository. Following the instructions of the Investment
Intermediary based on the implementation of the above transactions on the OTC segment of BSE, the Escrow Agent will
transfer the funds from the escrow account to the special DvP settlement accounts of the investment intermediaries
through which the Orders were submitted and / or to the respective custodian bank in accordance with the Rules of BSE
and the rules of the Central Depository.
The funds in the raising account will be released and made available to the Company after the registration of the capital
increase in the Commercial Register. The trading with the New Shares will commence simultaneously with the trading of
Existing Shares. That shall happen on the first date of trading fixed by the Bulgarian Stock Exchange. The Existing Shares
will be unblocked for the settlement in accordance with the Regulations of BSE, the rules of the Central Depository and
in agreement with UniCredit Bulbank, on the first day of trading with Existing shares.
END OF THE OFFERING BEFORE THE DEADLINE
The terms of the Offering does not provide for any reductions of the overall duration of the Offering. If all the shares of
this issue are subscribed before the deadline of the Offering, the Investment Intermediary and all other licensed
investment intermediaries will continue accepting orders from willing investors.
SUBSCRIPTION OF LESS THAN THE MAXIMUM AMOUNT OF NEW SHARES
Is less than the maximum amount of New shares is subscribed, but at least the minimum amount of New shares,
announced for successful public offering, are subscribed and paid, the Company increases its capital with the amount of
New shares paid.
SUBSCRIPTION OF MORE THAN THE MAXIMUM AMOUNT OF NEW SHARES
The number of New Shares offered will not be changed. More New Shares than those stated in the decision of the general
meeting of shareholders from 04.12.2014 is prohibited. The capital will be increased only if at least 8,000,000 New Shares
are subscribed and paid. If the submitted within the Subscription deadline Orders, on or above the announced Price,
exceed the maximum number of New shares set by the shareholders, an additional number of shares equal to up to 5%
of the current capital may be allotted amongst the submitted during the same period Orders.
5.7. TRANSFER OF THE AMOUNTS FOR THE SOLD SHARES TO THE ACCOUNT OF THE SELLER
The amounts from the Existing shares sale will be released to the Selling shareholders in line with the rules for DvP
transactions. These transactions will be carried out on the first day of trading of New Shares set by the Board of Directors
of the Bulgarian Stock Exchange.
5.8. AN INDICATION OF THE ORDER TO RECEIVE THE CERTIFYING DOCUMENTS (DEPOSITORY RECEIPTS)
After a successful Offering and registration of the capital increase in the Commercial Register, the Issuer will apply for
registration of shares from the increase in the registers of the Central Depository. The shares will be registered in client
accounts with the investment intermediaries through which investors’ Orders were submitted respectively. Once the
registration in the depository is complete and at the request of the holders of shares, Central Depository issues a
certifying document (depository receipt) for the securities held within the respective investment intermediary - member
of the Central Depository. Depositary receipts can be received personally by the shareholder or by an authorized
individual/entity at the address of the investment intermediary, through which the receipt has been issued.
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SECURITIES NOTE
No documents for the sale of Existing shares will be issued due to the fact that they will be transferred by the trading
rules of the Bulgarian Stock Exchange. Each investor, that has acquired any Existing shares, will be able to obtain a
depository receipt for them in the same manner as the above.
5.9. A FULL DESCRIPTION OF THE MANNER AND DATE IN WHICH RESULTS OF THE OFFER ARE TO BE MADE PUBLIC
The Issuer will notify the FSC for the implementation and results of the Offering, including any difficulties, disputes and
similar in the subscription, within 3 working days of its end.
Within 7 days from of the same date, Sirma Group Holding Jsco will send a notification to the FSC and BSE-Sofia on the
outcome of the Offering, including information on the closing date; total number of subscribed shares; the amount
received for the shares subscribed; and the fees and commissions and other offering expenses. To the Issuer shall attach
all required documents to the notification. Within the same term, the same information will be announced in the
newspapers "Capital Daily" and "Sega" and on the webpages of the Issuer and Elana Trading Inc.
The IPO will be considered unsuccessful in the event that the minimum amount of 8,000,000 New shares is not subscribed
by the closing date of the Offering. In this case the Company shall inform the FSC about the result of the Offering within
7 (seven) days after that closing date.
In case that for reasons beyond the Issuer and/or the Investment Intermediary the special raising account is not credited
within the time allowed with the minimum amount of money (the minimum amount of 8,000,000 new shares multiplied
by the announced Price), the Company shall notify the FSC of the outcome of the Offering within 7 (seven) days after its
end. On the day of the notification under the preceding sentence, and in accordance with Art. 89, para. 4 of POSA, the
Issuer shall notify UniCredit Bulbank about the results of the Offering and publish on both websites (Issuer’s and Elana’s)
an invitation to all investors that subscribed shares. That invitation should announce the conditions and procedures for
refunding of the transferred amounts. The invitation shall be announced through the Commercial Register and published
in the selected daily newspapers. The funds raised are returned to the investors that subscribed and paid the shares
within one (1) month after the notice, together with accrued interest, if any. The conditions for the refund will be
contained in the invitation.
In the event that the capital increase is not registered in the Commercial Register, Sirma Group Holding Jsco will announce
this circumstance in the order specified in the preceding paragraph and in accordance with art. 89, para. 4 of POSA. Any
funds raised will be returned in the manner specified in the preceding paragraph also.
5.10. THE PROCEDURE FOR THE EXERCISE OF ANY RIGHT OF PRE-EMPTION, THE NEGOTIABILITY OF SUBSCRIPTION RIGHTS AND THE TREATMENT
OF SUBSCRIPTION RIGHTS NOT EXERCISED.
The capital increase will be carried out through a public offering of New shares in line with the decision of the general
meeting of shareholders of Sirma Group Holding Jsco. Therefore, the general meeting has also adopted a decision to
cancel the preemptive rights of the existing shareholders to acquire New shares in proportion to their stake in the capital
prior the increase.
Based on the above, no rights under §1, item. 3 Provisions of POSA will be issued for this capital increase of Sirma Group
Holding Jsco. In case of a successful IPO and following registration, the Issuer will become a public company, after which
all capital increases based on new shares issuance will inevitably include rights under the same provisions.
6. PLAN OF DISTRIBUTION AND ALLOTMENT
6.1.
DIFFERENT POTENTIAL INVESTORS CATEGORIES, WHICH WILL BE ADDRESSED WITH THIS OFFER. THE DIVISION INTO TRANCHES OF THE
OFFER INCLUDING THE INSTITUTIONAL, RETAIL AND ISSUER’S EMPLOYEE TRANCHES AND ANY OTHER TRANCHES
Once this Securities Note, as well as the other parts of the Prospectus, is approved by the FSC, all groups of investors
classified for the purposes of §1 of the Additional Provisions of POSA can participate on an equal footing in the public
offering of shares. These groups of investors are:
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SECURITIES NOTE


non-professional investor - a person who puts cash resources or other property rights at risk for his or her own
account by means of acquisition, holding and transfer of securities, without possessing the requisite
qualifications and experience;
institutional investor - a bank which does not operate as an investment intermediary, a collective investment
scheme and a national investment fund, an insurance company, a pension fund or another corporation whereof
the objects require the acquisition, holding and transfer of securities;
The Offering will be conducted only within the territory of Republic of Bulgaria.
At the date of this document Sirma Group Holding Jsco and Elana Trading Inc. are not and do not intend to specify any
tranches and/or quantities of New Shares and/or Existing shares to be allotted among different categories of investors.
There is no predefined treatment in terms of shares allotment to provide certain classes of investors or any other groups
with a percentage of the shares, which is preliminary reserved for such preferential treatment.
The offered shares will be allotted on a pro rata basis among all investors. Based on the Price, determined pursuant to
paragraph. 7 below, the Investment Intermediary will prepare an Allotment list (The List), where the Order of each
investor will be satisfied with the same allotment ratio (The Ratio).
No additional number of shares can be offered during the Offering process outside the 18,491,858 New and Existing
shares.
6.2.
AN INDICATION WHETHER THE CURRENT MAJOR SHAREHOLDERS OR THE MEMBERS OF THE MANAGEMENT, CONTROL OR
ADMINISTRATION BODIES INTEND TO ACQUIRE ANY OF THE OFFERED SHARES AND IF ANY OF THESE INDIVIDUALS INTEND TO ACQUIRE MORE THAN
5% OF THE OFFERED SHARES, AS FAR AS SUCH INFORMATION IS AVAILABLE
Sirma Group Holding Jsco has no information on whether any of the major shareholders (described in the Registration
Document - Major shareholders) intends to acquire New shares.
Sirma Group Holding Jsco has no information whether a member of the Board of Directors of the Company intends to do
the same.
6.3.
ANNOUNCEMENT OF ANY PRE-ALLOTMENT
No pre-allotment of the shares is contemplated within the IPO of Sirma Group Holding Jsco. There is no preferential
treatment within the allotment of shares to any investors’ category.
6.4.
PROCESS FOR NOTIFICATION TO APPLICANTS OF THE AMOUNT ALLOTTED AND INDICATION WHETHER DEALING MAY BEGIN BEFORE
NOTIFICATION IS MADE
Based on the received Orders, the Investment Intermediary will prepare an Allotment list containing the names of all
investors, or the investment intermediaries through which the Orders are placed, together with the number of shares
ordered and the number of shares allotted to each of them.
The Investment Intermediary will notify the investors included in The List by sending a message in agreement with the
respective investor or, as appropriate, with other licensed investment intermediary acting on behalf of the client.
Messages are sent to the address specified in the Order, as well as other known to the Investment Intermediary addresses
of investors from The List, no later than the end of the second business day following the end of the Offering.
Summary information on The List will be available at the following locations from the date of its announcement:


The office of Elana Trading Inc. at: 5 Lachezar Stanchev Str., Sofia, Bulgaria, Phone: +359 (2) 810 00 00;
the website of Elana Trading Inc.: www.elana.net
Detailed results from the subscription of shares will not be publicly disclosed. The List will not be publicly disclosed or
disclosed in any way, except as to the persons and institutions referred to in the legislation.
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SECURITIES NOTE
6.5.
OVER-ALLOTMENT AND 'GREEN SHOE’
Within the Offering and pursuant to a decision of the Board of Directors of the Company dated 15.12.2014 an additional
"green shoe" option for over-allotment is placed. This option is provided by the Selling Shareholders and amounts to 5%
of the capital of the Issuer or to 2,491,858 the number of the Existing shares. The Existing shares will be offered only in
the case of oversubscription, where the amount of shares based on the submitted Orders and within the announced Price
exceed the maximum number of New shares - 16 million units.
Calculation of the number of Existing shares for sale: In the event of oversubscription, the Selling Shareholders will have
5 working days after the Price announcement, to submit their own written statement with the Investment Intermediary.
That statement will declare their willingness to sell up to 5% of their own Existing shares on the announced Price. Based
on the statements received, the Investment Intermediary will determine the number of Existing shares that can be
allotted to potential investors (Additional shares).
Allotment of Existing shares: Once the number of Additional shares is determined, it is compared with the number of
shares subscribed on the announced Price that exceeds the amount of New Shares (Exceeding amount). In the event that
the Additional shares are less than the Exceeding amount, all Additional shares will be distributed among the investors
pro rata. In the event that the Additional shares surpass the Exceeding amount the written statements from the Selling
Shareholders will be satisfied pro rata, depending on the amount that each of them is declared for sale.
7. PRICING
7.1.
AN INDICATION OF THE PRICE AT WHICH THE SECURITIES WILL BE OFFERED
The Issue price per share through the IPO for the capital increase of Sirma Group Holding Jsco will be in the price range
of the minimum price BGN 1.20 to the maximum price of BGN 1.65.
While determining the issue price and using well-known and proven methods such as, but not limited to: discounted cash
flow method and market analogues, the Issuer has taken into account a number of factors in addition – valuation of the
Company, assessment of the particular market in the country and markets abroad, assessment of macroeconomic
conditions in the country as a whole, the prevailing market conditions and the desire to achieve a liquid aftermarket for
the Shares.
All shares that are the subject of the public offering will be subscribed at the announced Price. The Price will be within
the announced price range and will be determined by the Board of Directors of the Issuer after PRO-RATA ALLOTMENT,
conducted by the Investment Intermediary. In the event of oversubscription, all Orders will be treated equally. The weight
of each ranking Order will be calculated as the shares in that respective Order are divided by the total number of
demanded shares at the Price. The resulting ratio will be multiplied by the total number of shares in the Offering (New
and Existing shares, if such). The result of this multiplication will give the number of shares to be allotted to the respective
Order. If this result is not a whole number, the result is rounded down to give the final number of shares allotted under
this Order.
CRITERIA FOR ORDERS’ RANKING
In order to be ranked, all Orders should be eligible for their type, their content and method of submission as defined in
point 5.1.2. above. All Orders that meet these conditions will be classified according to their type - limit and market. All
Limit Orders will be ranked in line with their specified price per share. The price per share should be within the price
range of a minimum price of BGN 1.20 to the maximum price of BGN 1.65 determined by the general meeting of
shareholders of the Company. All limit Orders, which contain a price per share outside that range will be disqualified and
will not receive any allotment.
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SECURITIES NOTE
METHODOLOGY FOR PRICE PER SHARE CALCULATION
The methodology for Price per share calculation is defined by a decision of the Board of Directors of the Issuer dated
15.12.2014. The methodology aims to determine the price level at which the Company will receive the highest amount
of proceeds from the public Offering. According to this methodology and while implementing the ranking the Investment
Intermediary will:
1.
2.
3.
4.
5.
6.
7.
8.
Divide all qualified limit and market Orders and check the total amount of shares declared to be subscribed
through only market Orders. If this number exceeds the total amount of New shares, the Price will be set at the
maximum price of the price range, namely BGN 1.65 per share. If the number of shares declared to be subscribed
through market orders is less than the maximum amount of New shares, the Investment Intermediary proceeds
to the next step;
Rank all limit Orders depending on the price stated in them;
Calculate the amount of declared to be subscribed shares for each price level, where a limit Order has been
submitted. The number of shares demanded by limit Orders at the highest price, will be added to the number
of each one of the lower price levels due to the nature of the limit orders (an investor files a limit order at a price
and agrees to subscribe shares on any price equal or lower than his/her price but within the price range). That
action will be repeated for each subsequent lower price level until the lowest price submitted through limit
Order is reached. The amount shares, declared to be subscribed at that lowest price, will be the total of all
amounts declared for subscription throughout all limit Orders at any price;
Add separately to each specified price level the total number of declared shares through market Orders (nature
of the market order determines the desire of its submitter to subscribe shares on any price level within the
announced price range);
Determine which price levels meet the criterion of a minimum amount of shares for a successful IPO - 8,000,000
shares, and disqualified all remaining price levels where an insufficient number of shares is demanded. In the
event that there is no price level corresponding to this criterion, the Investment Intermediary will announce this
public offering as unsuccessful in line with the decision of the General Meeting of shareholders of the Issuer;
In the event that any of the defined price levels, holds a number of demanded shares which exceeds the
maximum number of New shares (16 million), the amount of shares of each such price level will be equated to
16 million units for the purposes of Price calculation;
Multiply the number of shares submitted for each price ranked level by the price level to receive the total
proceeds in any such level;
Determine the price level at which the calculated as per item. 7 above proceeds from the public Offering are
greatest. The price at this price level will be the Price of the Offering.
The Board of Directors of the Company will verify the methodology compliance and will declare the Price of the IPO
through its own decision.
There is no predetermined preferential treatment within the allotment procedure, which to provide certain investors or
certain preferentially treated groups with a percentage of the offered shares, which is reserved for any such preferential
treatment.
The Existing shares will be offered only in the case of oversubscription. In the event that, the total number of demanded
New shares at the calculated Price exceeds the total number of New shares offered, the Investment Intermediary shall
immediately notify the Company for the oversubscription. Within the same day after the notification under the preceding
sentence and through its executive director, the Issuer will invite the Selling Shareholders to submit their written
statements whether they wish to sell up to 5% of their own Existing shares. That written notification shall be sent to the
address of the Investment Intermediary. All Selling Shareholders will have 5 business days to submit their statements.
Once the statements are gathered, the Investment Intermediary will draw up a list of the Selling Shareholders and the
number of shares that each of them wishes to sell. The number of these shares (the Additional shares) will be compared
with the shares that exceed the maximum number of New Shares (the Exceeding number) at the Price. In the event that
the Additional shares are more than the Exceeding number, then all investors that submitted orders at the announced
Price will receive full allotment, while the Selling Shareholders will sell their shares on a pro rata basis. In the event that
the Additional shares are less than the Exceeding number, the Investment Intermediary will determine the allotment
ratio (Ratio) on a pro rata basis. The Ratio will be equal to the sum of New and Additional shares divided by the total
34
SECURITIES NOTE
amount of shares demanded at the announced Price. To determine the specific number of shares allotted to any Order,
the shares in the respective Order shall be multiplied by the Ratio. The resulting amount shall be rounded down to the
nearest whole number. In the event that these round downs lead to less than the maximum number of shares (both New
and Existing) within the Offering, the Investment Intermediary reserves the right to allot that difference between certain
investors aiming at full subscription of the shares offered.
In order to simplify the above procedure and perform a minimum number of transactions with Existing shares, the Issuer
and the Investment Intermediary reserves the right, to allocate the Additional shares among certain investors in case
they have no obstructions. Thus, the outcome of number of shares owned by various investors will be the same, but
transactions with the Existing shares will be the fewest. That simplicity will be beneficial for the Investment Intermediary,
UniCredit Bulbank and all investors.
ANY EXPENSES FOR ALL POTENTIAL INVESTORS
Any expenses for the potential investors would be formed by the commission (fee), which will be charged in connection
with the submission of Orders. The authorized Investment Intermediary Elana Trading Inc. will not collect any
commissions or fees from any investors, who have submitted their Orders in the offices of Elana Trading Inc. The existence
and the amount of this commission while submitting the Order through another investment intermediary will depend on
the tariff or intended commissions of the investment intermediary who accepts the Order. Any expenses related to the
transfer of the amount for any allotted shares should be consulted with the respective servicing bank of the investor.
PROCEDURE FOR PRICE ANNOUNCEMENT
The Price will be announced on the first working day after the deadline for Orders acceptance. In the event that the FSC
approves this document, Orders for subscription of shares will be accepted within thirty days. The Price announcement
will be made on the working day after the deadline for Orders submission, at the address of the Investment Intermediary,
including its website.
PROCEDURE FOR ALLOTMENT LIST DETAILS ANNOUNCEMENT
If the demanded shares at the announced Price do not exceed the maximum number of New shares, the details of the
Allotment list will be announced on the day of the Price calculation and announcement. If the demanded shares at the
announced Price exceed the maximum number of New shares, the details of the Allotment list will be announced on the
first working day following the deadline for the acceptance of written statements from the Selling Shareholders.
7.2.
IF THE ISSUER’S EQUITY HOLDERS HAVE PRE-EMPTIVE PURCHASE RIGHTS AND THIS RIGHT IS RESTRICTED OR WITHDRAWN, INDICATION
OF THE BASIS FOR THE ISSUE PRICE IF THE ISSUE IS FOR CASH, TOGETHER WITH THE REASONS FOR AND BENEFICIARIES OF SUCH RESTRICTION OR
WITHDRAWAL
All pre-emptive rights during a capital increase and based on the Commercial Act are canceled by the general meeting of
shareholders of Sirma Group Holding Jsco dated 04.12.2014. According to the same decision, the entire issue from the
capital increase will be offered for subscription during the IPO. The reason for the cancelling of the pre-emptive rights of
the existing shareholders is their desire to change the capital structure of the Company and to attract fresh funds for the
implementation of their investment intentions. Another reason is compliance with customary market practice in initial
public offerings (particularly in the percent of the capital offered during the IPO).
35
SECURITIES NOTE
7.3.
WHERE THERE IS OR COULD BE A MATERIAL DISPARITY BETWEEN THE PUBLIC OFFER PRICE AND THE EFFECTIVE CASH COST TO MEMBERS
OF THE ADMINISTRATIVE, MANAGEMENT OR SUPERVISORY BODIES OR SENIOR MANAGEMENT, OR AFFILIATED PERSONS, OF SECURITIES ACQUIRED
BY THEM IN TRANSACTIONS DURING THE PAST YEAR, OR WHICH THEY HAVE THE RIGHT TO ACQUIRE, INCLUDE A COMPARISON OF THE PUBLIC
CONTRIBUTION IN THE PROPOSED PUBLIC OFFER AND THE EFFECTIVE CASH CONTRIBUTIONS OF SUCH PERSONS.
Over the past year, no member of the Board of Directors has acquired shares in the Company.
Members of the Board or any related individuals/entities are not entitled to acquire any of the offered shares under
conditions and/or price, other than those that apply to other investors.
8. PLACING AND UNDERWRITING
8.1.
NAME AND ADDRESS OF THE CO-ORDINATOR(S) OF THE GLOBAL OFFER AND OF SINGLE PARTS OF THE OFFER AND, TO THE EXTEND
KNOWN TO THE ISSUER OR TO THE OFFEROR, OF THE PLACERS IN THE VARIOUS COUNTRIES WHERE THE OFFER TAKES PLACE
The Manager (Investment Intermediary) of this issue, conducting this IPO is "Elana Trading" AD, with registered office at:
4 Kuzman Shapkarev, Sofia, Bulgaria and correspondence address: 5 Lachezar Stanchev, Sopharma Business Towers,
tower B, Sofia, Bulgaria
This issue of the Company’s capital increase will not be the subject of a global offering.
8.2.
NAME AND ADDRESS OF ANY PAYING AGENTS AND DEPOSITORY AGENTS IN EACH COUNTRY
8.2.1.
Paying agents
After a successful IPO, all shares (New and Existing) will be registered with BSE. Following that registration, all investors
will be able to submit bid and ask orders through a licensed investment intermediary.
According to regulatory requirements investment intermediaries are required to keep its clients’ money in a depository
institution within the meaning of Art. 34, para. 3 of the Markets in Financial Instruments Act. When establishing relations,
each investment intermediary shall inform its clients of the depository institution, where any cash provided or obtained
in connection with submitted orders will be stored.
Upon signing the contract with an investment intermediary, each customer should state the bank and the bank account
where he/she would like to receive any proceedings from a potential sale.
8.2.2.
Depository institution (clearing house)
The depository institution for the shares of Sirma Group Holding Jsco. is Central Depository AD, having its registered
address at: 4 Tri Ushi, Sofia, Bulgaria.
8.3.
NAME AND ADDRESS OF THE ENTITIES AGREEING TO UNDERWRITE THE ISSUE ON A FIRM COMMITMENT BASIS, AND NAME AND
ADDRESS OF THE ENTITIES AGREEING TO PLACE THE ISSUE WITHOUT A FIRM COMMITMENT OR UNDER “BEST EFFORTS” ARRANGEMENTS
No entities or individuals are authorized to underwrite or guarantee shares from the IPO of "Sirma Group Holding" JSC,
subject of this document.
8.4.
WHEN THE UNDERWRITING AGREEMENT HAS BEEN OR WILL BE REACHED
The Issuer Sirma Group Holding Jsco. Does not intend to negotiate and sign any underwriting agreements.
36
SECURITIES NOTE
9. ADMISSION TO TRADING AND DEALING ARRANGEMENTS
9.1.
AN INDICATION AS TO WHETHER THE SECURITIES OFFERED ARE OR WILL BE THE OBJECT OF AN APPLICATION FOR ADMISSION TO
TRADING, WITH A VIEW TO THEIR DISTRIBUTION IN A REGULATED MARKET OR OTHER EQUIVALENT MARKETS WITH INDICATION OF THE MARKETS
IN QUESTION.
Once the capital increase is registered with the Commercial Register, the Issuer will apply for the registration of the New
shares distributed in investors’ accounts with the Central Depository. Registration as a public company with the Financial
Supervision Commission and as a traded company with BSE will follow consecutively. First day of trading will be set
through a decision of the board of directors of the stock exchange and it will be the day when the deals with Existing
shares will be performed.
9.2.
ALL THE REGULATED MARKETS OR EQUIVALENT MARKETS ON WHICH, TO THE KNOWLEDGE OF THE ISSUER, SECURITIES OF THE SAME
CLASS OF THE SECURITIES TO BE OFFERED OR ADMITTED TO TRADING ARE ALREADY ADMITTED TO TRADING.
The Company does not intend to apply for admission in any other regulated market, apart from BSE.
9.3.
IF SIMULTANEOUSLY OR ALMOST SIMULTANEOUSLY WITH THE CREATION OF THE SECURITIES FOR WHICH ADMISSION TO A REGULATED
MARKET IS BEING SOUGHT SECURITIES OF THE SAME CLASS ARE SUBSCRIBED FOR OR PLACED PRIVATELY OR IF SECURITIES OF OTHER CLASSES ARE
CREATED FOR PUBLIC OR PRIVATE PLACING, GIVE DETAILS OF THE NATURE OF SUCH OPERATIONS AND OF THE NUMBER AND CHARACTERISTICS OF
THE SECURITIES TO WHICH THEY RELATE.
The management of Sirma Group Holding Jsco. has no information for simultaneous or almost simultaneous admission
to a regulated market concerning securities of the same or different class with the ones offered through this document
Shares, nor does it possess information about public or private placement of such securities.
9.4.
DETAILS OF THE ENTITIES WHICH HAVE A FIRM COMMITMENT TO ACT AS INTERMEDIARIES IN SECONDARY TRADING, PROVIDING
LIQUIDITY THROUGH BID AND OFFER RATES AND DESCRIPTION OF THE MAIN TERMS OF THEIR COMMITMENT.
The Issuer has not contracted any investment intermediaries, which shall provide liquidity of the shares through bid and
ask quotations.
9.5.
STABILIZATION
The Issuer, as well as its shareholders, has not contracted for any additional options to exceed the offered quantity of
shares, or any other actions towards price stabilization.
10. SELLING SECURITIES HOLDERS
10.1.
NAME AND BUSINESS ADDRESS OF THE PERSON OR ENTITY OFFERING TO SELL THE SECURITIES, THE NATURE OF ANY POSITION OFFICE
OR OTHER MATERIAL RELATIONSHIP THAT THE SELLING PERSONS HAS HAD WITHIN THE PAST THREE YEARS WITH THE ISSUER OR ANY OF ITS
PREDECESSORS OR AFFILIATES.
Together with the New shares, this IPO presents the current shareholders with the opportunity to sell up to 5% of the
existing shares in case of oversubscription on pro-rata basis in line with to the conditions set above. All Selling
Shareholders are individuals who are long-term employees and managers in the Issuer or its subsidiaries. The following
table lists the names of all shareholders and their positions within the Group in the last three years. Business addresses
of all of them are the same, namely: 135 Tsarigradsko Shosse, Sofia, Bulgaria. The only exception is Mr. Dejan Nenov,
whose address is: 14439 Catalina Street, San Leandro, 94577California, USA.
37
SECURITIES NOTE
Table №5. List of current shareholders and their respective positions within the Group
Company
Date of
appointment
Last day
Position
Asen Nelchinov
Sirma Solutions AD
7/1/2003
Sirma Solutions AD
3/1/2014
Sirma Solutions AD
2/13/2009
Daticum AD
3/1/2014
3/1/2014 Manager, sales department
Developer semantics, computer science
BoD member
8/11/2014 Member of the supervisory board
3/25/2009
BoD member
8/3/2012
BoD member
Atanas Kiryakov
Sirma Solutions AD
Ontotext AD
10/1/2008
Ontotext AD
1/1/2014
Senior programmer, software applications
EngView Systems Sofia AD
6/4/2014
BoD member
Sirma ITT AD
5/8/2013
BoD member
4/25/2008
Executive director
Member of the management board
Boryana Stoimenova
6/1/2006
Sales manager
12/6/2012
BoD member
6/1/2011
Valentin Vachkov
10/1/2001
9/16/2010
Project manager
6/3/2014 BoD member
Veselin Denchev
Sirma Business Consulting AD
1/1/2008
11/17/2008
5/14/2013 Deputy chairman supervisory board, BoD
11/5/2012 Finance director
3/23/2009 11/17/2012 Member of the management board
Veselin Kirov
Sirma Solutions AD
10/1/1993
Sirma Solutions AD
2/1/2014
2/1/2014 Department manager, research and development
Sirma Solutions AD
2/13/2009
8/3/2012 BoD member
4/25/2008
Ontologies researcher - expert data extraction
Vladimir Alexiev
Ontotext AD
12/1/2010
Project manager
Deyan Nenov
Panaton Software Inc.
GMG Systems Inc.
1/1/2011
Executive director
1/23/2009
BoD member
1/1/2008
BoD member
Georgi Marinov
9/16/2010
Executive director
4/25/2008
BoD member
10/1/2001
Director information systems
9/16/2010
BoD member
4/25/2008
Krasimir Bozhkov
38
SECURITIES NOTE
Marin Dimitrov
Ontotext AD
10/1/2008
Director information technologies
Mladen Alexiev
Sirma Solutions AD
6/1/2003
Sirma Solutions AD
2/13/2009
8/16/2012 Director information systems
8/3/2012 BoD member
Momchil Zarev
Sirma Solutions AD
5/17/1999
Sirma Solutions AD
6/1/2013
Sirma Solutions AD
8/3/2012
6/20/2009
5/31/2013 Project manager
3/1/2014 Developer semantics, computer science
BoD member
Ognyan Chernokozhev
Sirma Solutions AD
4/1/2004
7/4/2012
Designer, software
Rosen Varbanov
Sirma Solutions AD
10/1/1996
6/1/2011
Project manager
Rumen Harsev
Sirma Solutions AD
1/11/2000
3/21/2012 Designer, software
9/17/1999
7/24/2011 Department manager
Svetla Varbanova
Sirma Solutions AD
Stanislav Ivanov
7/1/2002
9/16/2010
6/3/2014 BoD member
Computer systems manager: systems development
5/14/2013
1/1/2014 Senior programmer, software applications
Stanislav Jordanov
Tzvetan Alexiev
Sirma Solutions AD
6/1/2007
Sirma Solutions AD
2/1/2013
Sirma Solutions AD
6/1/2013
Project manager
6/4/2014
BoD member
1/1/2008
Chairman management board, BoD
Ontotext AD
Executive director
5/31/2013 Computer systems manager: systems development
6/29/2012
BoD member
2/1/2009
BoD member
Sirma ITT AD
10/14/2008
BoD member
Datikum AD
3/25/2009
BoD member
Sirma Solutions AD
2/13/2009
Executive director
Sirma Solutions AD
10/1/1993
Sirma Solutions AD
8/1/2013
Director/manager information technologies
2/1/2010
Manager administrative department
2/1/2009
BoD member
3/25/2009
BoD member
9/16/2010
12/5/2012 BoD member
4/25/2008
Chavdar Dimitrov
Datikum AD
7/31/2013 Software developer
Yavor Dzhonev
39
SECURITIES NOTE
Sirma ITT AD
7/1/2008
Executive director
8/1/2005
Senior programmer, software applications
6/1/2011
Petar Konyarov
Radka Peneva
Sirma Solutions AD
9/14/2011
Sirma Solutions AD
Sirma ISG AD
8/13/2012 Chief legal council
1/1/2003
Manager finance and legal issues through Rapema OOD
11/1/2012
Manager finance and legal issues through Rapema OOD
12/18/2012
Procurator
Source: Sirma Group Holding JSC
10.2.
THE NUMBER AND CLASS OF SECURITIES BEING OFFERED BY EACH OF THE SELLING SECURITY HOLDERS
The total number of the Existing Shares, which may be offered by the Selling shareholders, amounts to 5% of the Issuer's
capital or up to 2,491,858 shares. All shares of the Issuer represent the same class and render equal rights to their owners.
The maximum amount that each current shareholder may sell in the case of oversubscription is as follows:
Table №6. Amount of Existing shares for each shareholder
№
1 Asen
2 Atanas
3 Boryana
4 Valentin
5 Veselin
6 Veselin
7 Vladimir
8 Deyan
9 Georgi
10 Krasimir
11 Marin
12 Mladen
13 Momchil
14 Ognyan
15 Rosen
16 Rumen
17 Svetla
18 Stanislav
19 Stanislav
20 Tzvetan
21 Chavdar
22 Yavor
23 Petar
24 Radka
Name
Family name
Nelchinov
Kiryakov
Stoimenova
Vachkov
Denchev
Kirov
Alexiev
Nenov
Marinov
Bozhkov
Dimitrov
Alexiev
Zarev
Chernokozhev
Varbanov
Harsev
Varbanova
Ivanov
Jordanov
Alexiev
Dimitrov
Dzhonev
Konyarov
Peneva
Number of
Max amount of
shares
shares for the green
possessed
shoe option
422,248
21,112
5,250,686
262,534
162,728
8,136
340,443
17,022
75,603
3,780
5,250,686
262,534
2,177,483
108,874
518,757
25,938
5,250,686
262,534
5,250,686
262,534
210,946
10,547
51,840
2,592
254,367
12,718
3,727,730
186,387
2,156,687
107,834
104,269
5,213
104,269
5,213
257,268
12,863
370,060
18,503
5,250,686
262,534
5,250,686
262,534
5,250,686
262,534
1,649,288
82,464
498,365
24,918
40
SECURITIES NOTE
10.3.
LOCK-UP AGREEMENTS
As of the date of this document, all current shareholders of the Issuer agree keep their shares outside the terms of the
current offer within 6 months from the first day of trading of the Company's shares on the Bulgarian Stock Exchange.
11. EXPENSE OF THE ISSUE/OFFER.
Related to the initial public offering expenses are presented in the following table. The table does not include the costs
that relate to the overall business of the Company or to more than one issue of securities.
All of the following are at the expense of the Company. Those one-off costs in connection with the capital increase
amounted to 0.0205 lev per share with a minimum increase of capital and 0.0315 per share on the maximum capital
increase shall be paid in full by "Sirma Group Holding" AD. All costs are calculated on the basis of the minimum issue price
voted by the General Meeting of Shareholders.
Table №7. Expenses of Sirma Group Holding
Type of expense (approximate)
Minimum
increase
Maximum
increase
Fee for prospectus approval from FSC
5,000
5,000
Central Depository fees *
1,000
1,000
Publish and announcement of the public offering
800
800
Listing on BSE
600
600
156,100
496,500
60
60
163,560
503,960
Investment intermediary fee **
Registration of the capital increase in the Commercial Register
Total expenses
*-THE FEE FOR "CENTRAL DEPOSITORY" AD INCLUDES REGISTRATION FEE FOR NEWLY ISSUED SHARES AND CALCULATED AS A MINIMUM OF BGN 1,000 PLUS THE
NUMBER OF ACCOUNTS (SHAREHOLDERS) MULTIPLIED BY BGN 1 FOR EACH ACCOUNT. THE FEE IS LIMITED TO BGN 50,000. THE FEE IS RECORDED WITH ITS MINIMUM
VALUE DUE TO THE UNCERTAINTY OF THE NUMBER OF PROSPECTIVE SHAREHOLDERS.
**- THE REMUNERATION OF THE INVESTMENT INTERMEDIARY IN SIZE OF BGN 15,000 COVERS ADMINISTRATION AND REGISTRATION OF THE ISSUE, INCLUDING THE
PREPARATION OF ALL PARTS OF THE PROSPECTUS AND COMMUNICATION WITH RELEVANT INSTITUTIONS IN THE PROCESS OF PUBLIC OFFERING OF SECURITIES; + IN THE
EVENT THAT THE OFFER IS CONSIDERED SUCCESSFUL: 1.35% OF THE TOTAL FUNDS RAISED FROM INTERMEDIARY UP TO BGN 5,000,000; + 1.60% FOR THE CUT
BETWEEN BGN 5,000,000 AND BGN 10,000,000; + 2.00% FOR THE CUT BETWEEN BGN 10,000,000 AND BGN 15,000,000; + 5.00% FOR THE CUT
BETWEEN BGN 15,000,000 AND BGN 18,000,000; + 7.00% FOR ACCUMULATED FUNDS ABOVE BGN 18,000,000.
Any costs connected to transactions on the regulated market, including fees of any investment intermediary and other
fees, if not included in the commission of the intermediary (charges of "BSE-Sofia" and "Central Depository" AD), are at
the expense of the potential investors.
In case of subscription and payment of the maximum quantity shares offered (16 million units), the net proceedings for
the Issuer will amount to BGN 18,696,040. In case of subscription and payment of the minimum quantity shares offered
(8 million units), pursuant to the decision of the general meeting of the Company, the net proceedings for the Issuer will
amount to BGN 9,436,440. The expenses for the public offering are variable depending on the size of the capital increase.
The estimated costs of the Issuer at the minimum IPO size amount to BGN 163,560.
41
SECURITIES NOTE
12. DILUTION
As defined in §.1, 8 of Ordinance 2 from 17.09.2003 for the prospectuses for public offering of securities and admission
to trading on a regulated market and disclosure of information by public companies and other issuers of securities,
"Dilution of equity (the value of the shares)" is the reduction of profit per ordinary share and its balance value as a result
of conversion of bonds and warrants into shares or the exercise of options issued, and as a result of the issuance of
ordinary shares at a price lower than the book value per share.
Table №8. Dilution of shares on consolidated basis
Total assets
Total liabilities
Equity
Number of shares
Face value per share
Balance value per share in BGN
Minimum
increase
2012
2013
2014
3/31/2015
86,521
92,496
94,154
101,273
110,710
Maximum
increase
119,969
4,836
6,163
11,825
13,730
13,730
13,730
81,685
86,333
82,329
87,543
96,980
106,239
73,340,818
73,340,818
49,837,156
49,837,156
57,837,156
65,837,156
1.00
1.00
1.00
1.00
1.00
1.00
1.114
1.177
1.652
1.757
1.677
1.614
According to the above values, the minimum issue price of the new shares (BGN 1.20) is lower than the book value per
share on consolidated basis before the increase (BGN 1.757) and thus there is a dilution of the Company's capital
concerning the book value per share and amounting to 31.69%. The book value per share after the increase amounts to
BGN 1.614 at maximal initial public offering and to BGN 1.677 at minimal IPO, and there is a reduction in the balance
value by respectively 8.14% and 4.54% in both cases.
To calculate the immediate dilution for shareholders who will not participate in the capital increase of the Company the
ratio between the number of newly issued shares and the total number of shares after the increase is calculated. Thus,
in case of minimal initial public offering, each shareholder not involved in the subscription of new shares, will dilute
his/her stake by 13.83%, while in case of maximum IPO by 24.30%.
Table №8.1. Dilution of shares on individual basis
Total assets
Total liabilities
Equity
Number of shares
Face value per share
Balance value per share in BGN
Minimum
increase
Maximum
increase
2012
2013
2014
3/31/2015
79,104
80,101
58,112
58,176
67,612
1,670
2,261
3,347
3,383
3,383
3,383
77,434
77,840
54,765
54,793
64,229
73,489
73,340,818
73,340,818
49,837,156
49,837,156
57,837,156
65,837,156
76,872
1.00
1.00
1.00
1.00
1.00
1.00
1.056
1.061
1.099
1.099
1.111
1.116
According to the above values, the minimum issue price of the new shares (BGN 1.20) is lower than the book value per
share on individual basis before the increase (BGN 1.099) and thus there is no dilution of the Company's capital
concerning the book value per share. The book value per share after the increase amounts to BGN 1.116 at maximal
initial public offering and to BGN 1.111 at minimal IPO, and there is an increase in the balance value by respectively 1.53%
and 1.01% in both cases.
42
SECURITIES NOTE
13. ADDITIONAL INFORMATION
13.1.
IF ADVISORS CONNECTED WITH AN ISSUE ARE MENTIONED IN THE SECURITIES NOTE, A STATEMENT OF THE CAPACITY IN WHICH THE
ADVISORS HAVE ACTED
This document does not include statements, reports or other expert opinions about the offered securities, except those
of the experts who prepared the prospectus.
13.2.
AN INDICATION OF OTHER INFORMATION IN THE SECURITIES NOTE WHICH HAS BEEN AUDITED OR REVIEWED BY STATUTORY AUDITORS
AND WHERE AUDITORS HAVE PRODUCED A REPORT
Other than the information from the annual audited consolidated and individual financial statements as of 31.12.2012,
31.12.2013 and 31.12.2014, no other information has been audited or reviewed by statutory auditors.
This Securities Note does not include information provided by third parties.
13.3.
WHERE A STATEMENT OR REPORT ATTRIBUTED TO A PERSON AS AN EXPERT IS INCLUDED IN THE SECURITIES NOTE, PROVIDE SUCH
PERSONS' NAME, BUSINESS ADDRESS, QUALIFICATIONS AND MATERIAL INTEREST IF ANY IN THE ISSUER
This Securities Note or any part of the Prospectus does not include statements, reports or expert opinions, thus the
requirement of 13.3. is not applicable.
13.4.
THIRD PARTY INFORMATION
This Securities Note does not include any information, including statements, reports or opinions prepared by third parties.
Therefore, the requirement of 13.4. is not applicable.
13.5.
SOURCES OF ADDITIONAL INFORMATION
Investors may obtain this Securities Note, the Registration Document and the Summary, parts of the Prospectus for Initial
Public Offering of shares of "Sirma Group Holding" AD, as well as additional information about "Sirma Group Holding" JSC
and for the publicly offered securities from:
Bulgarian Stock Exchange – Sofia AD
10 Tri Ushi Str., Sofia, Bulgaria
Phone: (+359 2) 937 09 34 fax: (+359 2) 937 09 46
e-mail: [email protected]
43
SECURITIES NOTE
THE SECURITIES NOTE WAS PREPARED BY:
___________________
___________________
MIROSLAV STOYANOV
IVAN ILIEV
DIRECTOR „INVESTMENT BANKING”
EXPERT „INVESTMENT BANKING”
THE UNDERSIGNED INDIVIDUALS IN THEIR CAPACITY OF REPRESENTATIVES OF THE COMPANY AND THE INVESTMENT INTERMEDIARY ELANA
TRADING INC, DECLARE THAT THE SECURITIES NOTE CORRESPONDS TO THE PROVISIONS OF THE LAW.
FOR SIRMA GROUP HOLDING JSCO:
____________________
TZVETAN ALEXIEV
EXECUTIVE DIRECTOR
FOR ELANA TRADING INC.:
____________________
_____________________
MOMCHIL TIKOV
RADOSLAVA MASLARSKA
EXECUTIVE DIRECTOR
CHAIRPERSON OF THE BOARD
44

Prospectus Part 2

Transcription

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