SOFIX Index

Initial date: 20 October 2000

Initial value: 100

Description:

1. SOFIX is an index based on the market capitalisation of the included issues of common shares, adjusted with the free-float of each of them.

2. The index covers the 15 issues of shares complying with the general requirements for selection of constituent issues that have the greatest market value of the free-float.

3. An issue included in the index base of SOFIX, in addition to the general requirements, shall also meet the following criteria:

- The issues should have been admitted to trading on the Main Market of the Exchange (Bulgarian Stock Exchange or BSE);

- The issues should have been traded on a market, organised by the Exchange, for at least 3 (three) months before their introduction into the SOFIX portfolio. Provided an issue has been transferred for trading from one market segment to another, the first quotation date of the issue shall be assumed as its first trading date;

- The market capitalisation of the issue shall not be less than BGN 40,000,000 and the free-float shall not be less than 25 per cent of the amount of the issue, or the market value of the free-float shall not be less than BGN 10,000,000;

- The number of shareholders of the issue shall not be less than 500 persons;

4. The first n-issues (n shall be lower or equal to 30) complying with the requirements as per item 3, with the highest median value of the weekly turnover and the greatest number of transactions during the last 1 (one) year as the two criteria shall have equal weight, shall be admitted to the ranking as per item 2. If as a result of the ranking under the preceding sentence it occurs that two or more issues have been ranked at the same place, the issues with the greater number of transactions shall be treated with priority in respect to the inclusion.

 SOFIX constituents and their respective free-floats and weight factors (effective as of 18.03.2013):

Stock symbol	Issue	Free-float	Weight factor
3JR	Sopharma AD-Sofia	0.3490	1.0000
4CF	CB Central Cooperative Bank AD-Sofia	0.2630	1.0000
4EH	Eurohold Bulgaria AD-Sofia	0.2696	1.0000
4ID	Industrial Holding Bulgaria PLC-Sofia	0.3807	1.0000
57B	Bulgartabac Holding AD-Sofia	0.1515	1.0000
5BU	Bulgarian Real Estate Fund REIT-Sofia	0.6970	1.0000
5F4	CB First Investment Bank AD-Sofia	0.1500	1.0000
5MB	Monbat AD-Sofia	0.2123	1.0000
5MH	M+S Hydraulic AD-Kazanlak	0.2262	1.0000
5SR	Stara Planina Hold AD-Sofia	0.6000	1.0000
6A6	Advance Terrafund REIT-Sofia	0.6316	0.8032
6AB	Albena AD-Albena	0.1831	1.0000
6C4	Chimimport AD-Sofia	0.2778	1.0000
6K1	Kaolin AD-Senovo	0.3051	1.0000
T43	Zarneni Hrani Bulgaria AD-Sofia	0.2567	1.0000

* The next Indices Committee meeting, when the free-float factors shall be updated, will be held on 03.06.2013. Respectively, the updated factors will become effective since 24.06.2013.

Formula for calculation of SOFIX

Where:

SOFIX is index of the regulated markets of BSE-Sofia;

N i,t is the number of shares of the issue of the respective company on the t day;

N i,t-1 is the number of shares of the issue of the respective company on the t-1 day;

P i,t is the price of the last trade in the i-th security on the t day;

P i,t-1 is the price of the last trade in the i-th security on the t-1 day;

FF i,t is the free-float of the i-th security on the t day;

FF i,t-1 is the free-float of the i-th security on the t-1 day;

W i,t is the weight factor of the i-th security on the t day (Wi=1, unless the weight of the security would exceed 15 % of the index);

W i,t-1 is the weight factor of the i-th security on the t-1 day;

n is the number of issues included in the index portfolio;

i is the indicator of the specific security;

t is the day for which the index is calculated;

D i,t is the divisor effective for the current trading session for the i-th security;

D i,t-1 is the divisor for the i-th security on the t-1 day;

K is the adjustment factor (Ê=1, unless the index base has been changed).

Upon the occurrence of a corporate event that requires a change in the divisor, the value of the divisor for the next trading session shall be calculated in the following way:

Where:

D i,t+1 is the divisor of the i-th security for the next trading session;

D i,t is the divisor of the i-th security for the current trading session;

P^a i,t is the adjusted price of the last trade in the i-th security after the end of the trading session on the t day as result of the corporate event on the t+1 day;

N^a i,t is the adjusted number of shares of the i-th security after the end of the trading session on the t day as result of the corporate event on the t+1 day;

FF i,t (old) is the value of the free-float factor of the i-th security for the t day;

FF i,t (new) is the new value of the free-float factor of the i-th security for the t day;

W i,t (old) is is the weight factor of the i-th security for the t day;

W i,t (new) is the new value of the weight factor of the i-th security for the t day;

After re-balancing of the index, the value of the divisor is set to 1 (one).

The SOFIX daily value shall be calculated as its base value is multiplied by the ratio of the sum of the market capitalisations of the issues currently included in the index portfolio adjusted by the divisor, the weight factor and by the free-float of each issue, to the sum of the adjusted by the weight factor and by the free-float market capitalisations at the base moment.

The Index Committee shall define the free-float factors at its meetings held on 2nd March, 2nd June, 2nd September and 2nd December, but if the respective date occurs on a non-working day then on the first working day thereafter. The new factors shall become effective as from the first trading session following the third Friday of the month, in which the respective meeting has been held.

When defining the weight factors, the free-float factors for the new period shall be taken into consideration.

If as of 1st March and 1st September the weight of the issues of companies belonging to one economic group exceeds 20 (twenty) per cent of the market value of the SOFIX free-float, one or more companies of that group shall be consecutively taken out from the index base until their combined weight falls below the mentioned threshold.

If by the day preceding the date of enforcement of the decision for change in the base of SOFIX the market value of the free-float of a certain issue exceeds 15 (fifteen) per cent of the market value of the SOFIX free-float, the weight factor of the respective issue shall be defined so that the market value of its free-float to equal 15 (fifteen) per cent of the market value of the free-float of the whole index.

Decisions for a change in the SOFIX base shall be taken twice per annum – on the first attendance meeting of the Board following 2nd March respectively 2nd September. The decisions shall become effective as from the first trading session following the third Friday of the month, in which the respective meeting has been held.

A change in the base of SOFIX shall be made on the grounds of a Decision of the Board of Directors of BSE-Sofia pursuant to Section V of the Rules for Calculating the Indices of BSE-Sofia. In this case, the adjustment factor for the next day (the t+1 day) shall be calculated in the following way:

Where:

SOFIX oldbase is the value of the index after the end of the session;

SOFIX newbase is the value of the index after the end of the session but calculated using the new base.

Once the index base is changed, the adjustment factor K shall be reset to 1 (one).