Sopharma : Consolidated management report as at 30 June 2021

MANAGEMENT REPORT for the first half of 2021

SOPHARMA GROUP

30 August 2021

Management report - Sopharma Group for the first half of 2021

Sopharma Group

CONTENT:

I.	General information about Sopharma Group........................................................................................	3
	1.	Main activities ...................................................................................................................................	3
	2.	Registration and activity of the Company .........................................................................................	3
	3.	Controlled companies .......................................................................................................................	3
	4.	Board of directors..............................................................................................................................	6
	5.	Shareholder structure as at 30 June 2021.........................................................................................	7
	6.	Information about the shares ...........................................................................................................	7
II.	Recent developments.............................................................................................................................	7

1. Significant events for the first half of 2021 and until the date of the consolidated management report
   .............................................................................................................................................................12

IV.	Review of the main risks faced by the Group ......................................................................................	13
V.	Information on related party transactions ..........................................................................................	16

2

This is a translation from Bulgarian of the Management report of Sopharma Group for the first half of

2021.

In case of divergence Bulgarian text should prevail.

Sopharma Group

1. General information about Sopharma Group

1. Main activities

Sopharma Group (the Group) is a leading Bulgarian producer, exporter and local distributor of pharmaceutical products with a strong presence in Eastern and South-eastern Europe, offering a wide range of prescription medicines and OTC products, food supplements, cosmetics and medical devices.

The Group operates in the following areas:

• production of pharmaceutical products, including medicines, mainly generics, herbal-based substances and food supplements, which is mainly done by "Sopharma" AD (the Company);
• production of medicinal products and medicinal cosmetics, as plasters, bandages and sanitary-hygiene products concentrated on the production site in Sandanski city;
• distribution of pharmaceuticals, medical supplies, sanitary materials, vitamins, food supplements, cosmetics and others, which is mainly performed by "Sopharma Trading" in Bulgaria and Serbia.

2. Registration and activity of the Company

"Sopharma" AD is a company registered in Bulgaria under the Provisions of the Commercial Law, with its registered office in Sofia, 16 Iliensko shose str.

"Sopharma" was established in 1933. The court registration of the Group is from 15 November 1991, decision №1/1991 of Sofia City Court. "Sopharma" AD is a public company under the Law on Public Offering of Securities.

The Group conducts the production and marketing of medicinal substances and dosage forms; research, engineering and implementation activities in the field of phytochemistry, chemistry and pharmacy, production of medical devices and cosmetic products, incl. - plasters, dressings, sanitary - hygienic products, medical cosmetics, concentrates for hemodialysis. "Sopharma" AD provides services related to production, as well as to ancillary and supporting activities.

3. Controlled companies

Sopharma Group consists of "Sopharma" AD and the following subsidiaries, directly or indirectly controlled by the Company. Additionally, the Group has investments in one associated

3

This is a translation from Bulgarian of the Management report of Sopharma Group for the first half of

2021.

In case of divergence Bulgarian text should prevail.

Sopharma Group

company ("Doverie - obedinen holding" AD, 24.81% stake) and in one joint venture ("Momina krepost" AD, 37.46% stake).

Company	Interest as at
	30.06.2021 in %
"Sopharma Trading" AD	76.33
"Pharmalogistica" AD	89.39
"Elektroncommerce" EOOD	100.00
"Biopharm Engineering" AD	97.15
"Sopharma Buildings" REIT	40.38
"Phyto Palauzovo" AD	95.00
"Veta Pharma" AD	99.98
"Sopharmacy" EOOD **	76.33
"Sopharmacy 2" EOOD **	76.33
"Sopharmacy 3" EOOD **	76.33
"Sopharmacy 4" EOOD **	76.33
"Sopharmacy 5" EOOD **	76.33
"Sopharmacy 6" EOOD **	76.33
"Sopharmacy 7" EOOD **	76.33
"Sopharmacy 8" EOOD **	76.33
"Sopharmacy 9" EOOD **	76.33
"Sopharmacy 10" EOOD **	76.33
"Sopharmacy 11" EOOD **	76.33
"Sopharmacy 12" EOOD **	76.33
"Sopharmacy 13" EOOD **	76.33
"Sopharmacy 14" EOOD**	76.33
"Sopharmacy 15" EOOD**	76.33
"Sopharmacy 16" EOOD**	76.33
"Sopharmacy 17" EOOD**	76.33
"Sopharmacy 18" EOOD**	76.33
"Sanita Franchising" AD **	76.33
"Sopharmacy 19" EOOD (Valentina Vasileva - Lyulin EOOD) **	76.33
"Sopharmacy 20" EOOD (Vasilka Lilovska EOOD) **	76.33
"Sopharmacy 21" EOOD (Venera Mutashka EOOD) **	76.33
"Sopharmacy 22" EOOD (Veselka Vasileva EOOD) **	76.33
"Sopharmacy 23" EOOD (Victoria Angelova EOOD) **	76.33
"Sopharmacy 24" EOOD (Desislava Jordanova EOOD) **	76.33
"Sopharmacy 25" EOOD (Dimka Vladeva EOOD) **	76.33
"Sopharmacy 26" EOOD (Donka Chivganova EOOD) **	76.33
"Sopharmacy 27" EOOD (Ekaterina Mihaylova - Shumen 1 EOOD) **	76.33

4

This is a translation from Bulgarian of the Management report of Sopharma Group for the first half of

2021.

In case of divergence Bulgarian text should prevail.

Sopharma Group

"Sopharmacy 28" EOOD (Elka Neykova EOOD) **	76.33
"Sopharmacy 29" EOOD (Emilia Angelova EOOD) **	76.33
"Sopharmacy 30" EOOD (Juliana Kotova EOOD) **	76.33
"Sopharmacy 31" EOOD (Ivan Ivanov 1 EOOD) **	76.33
"Sopharmacy 32" EOOD (Iliana Kalushkova EOOD) **	76.33
"Sopharmacy 33" EOOD (Irina Toncheva EOOD) **	76.33
"Sopharmacy 34" EOOD (Kapka Nikolova - Military Hospital EOOD) **	76.33
"Sopharmacy 35" EOOD (Kostadin Gorchev EOOD) **	76.33
"Sopharmacy 36" EOOD (Krasimira Shunina EOOD) **	76.33
"Sopharmacy 37" EOOD (Lora Doncheva EOOD) **	76.33
"Sopharmacy 38" EOOD (Lyudmila Zlatkova EOOD) **	76.33
"Sopharmacy 39" EOOD (Lyudmila Kovacheva EOOD) **	76.33
"Sopharmacy 40" EOOD (Manik Burgazyan EOOD) **	76.33
"Sopharmacy 41" EOOD (Mariyka Jaigarova EOOD) **	76.33
"Sopharmacy 42" EOOD (Mariya Agova EOOD) **	76.33
"Sopharmacy 43" EOOD (Mariya Gancheva EOOD) **	76.33
"Sopharmacy 44" EOOD (Mariya Kenova EOOD) **	76.33
"Sopharmacy 45" EOOD (Mariya Hristova - Motopista EOOD) **	76.33
"Sopharmacy 46" EOOD (Mariyana Markova EOOD) **	76.33
"Sopharmacy 47" EOOD (Mary Ivanova EOOD) **	76.33
"Sopharmacy 48" EOOD (Nelly Stavreva EOOD) **	76.33
"Sopharmacy 49" EOOD (Preslava Becheva EOOD) **	76.33
"Sopharmacy 50" EOOD (Rayna Madzharova-St. Georgi Sofiyski EOOD) **	76.33
"Sopharmacy 51" EOOD (Rumyana Ignatova - Gancheva EOOD) **	76.33
"Sopharmacy 52" EOOD (Sashka Todorova EOOD) **	76.33
"Sopharmacy 53" EOOD (Svetla Harizanova EOOD) **	76.33
"Sopharmacy 54" EOOD (Svetlana Pirpirova EOOD) **	76.33
"Sopharmacy 55" EOOD (Ceiba-Blagoevgrad-1 EOOD) **	76.33
"Sopharmacy 56" EOOD (Silviya Veneva EOOD) **	76.33
"Sopharmacy 57" EOOD (Siyana Milanova EOOD) **	76.33
"Sopharmacy 58" EOOD (Stoyanka Radenkova EOOD) **	76.33
"Sopharmacy 59" EOOD (Avdzhieva EOOD) **	76.33
"Sopharmacy 60" EOOD (Radina Bekova EOOD) **	76.33
"Sopharmacy 61" EOOD (Rumen Raynov EOOD) **	76.33
"Sopharmacy 62" EOOD (Hani Modhi EOOD) **	76.33
"Sopharmacy 63" EOOD (SCS Franchise EAD) **	76.33
"BRIZ" SIA	100.00
"Brititrade" SOOO **	80.00
PAO "Vitamini"	100.00
"Sopharma" Warsaw Sp. z. o. o	100.00

5

This is a translation from Bulgarian of the Management report of Sopharma Group for the first half of

2021.

In case of divergence Bulgarian text should prevail.