Annual Report (ESEF) • Jul 9, 2023
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ANNUAL CONSOLIDATED REPORT ON THE ACTIVITY
UIC 201047670
ANNUAL CONSOLIDATED REPORT ON THE ACTIVITY ALLTERCO AD FOR 2022 (Unofficial translation of the original in Bulgarian)
THIS REPORT ON THE ACTIVITY HAS BEEN PREPARED IN ACCORDANCE WITH THE PROVISIONS OF ART. 39 AND THE FOLLOWING OF THE ACCOUNTANCY ACT, ART. 100N, PARA 7 OF THE PUBLIC OFFERING OF SECURITIES ACT AND APPENDIX No. 2 OF ORDINANCE No 2 of 9.11.2021 ON INITIAL AND SUBSEQUENT DISCLOSURE OF INFORMATION IN CASE OF PUBLIC OFFERING OF SECURITIES AND ADMISSION OF SECURITIES TO TRADING ON A REGULATED MARKET
ALLTERCO AD
ANNUAL CONSOLIDATED REPORT ON THE ACTIVITY
UIC 201047670
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail.
2
DEAR SHAREHOLDERS,
We, the members of the Board of Directors of ALLTERCO AD (“the Company”), committed to manage the company in the best interest of the shareholders, as well as following the requirements of the provisions of Art. 39 and the following of the Accountancy Act (effective since 01.01.2021), Art. 100n, Para 7 of the Public Offering of Securities Act and Appendix No. 2 of Ordinance No. 2 of 9 November on initial and subsequent disclosure of information in case of public offering of securities and admission of securities to trading on a regulated market, have prepared this report on the activity (hereinafter "The Report").
The Report provides comments and analysis of the consolidated financial statements and other material information regarding the financial position and the financial performance of the Company and its subsidiaries. The report contains an objective review that presents fairly the development and performance of ALLTERCO AD and its subsidiaries, as well as their position, including a description of the main risks they face. The circumstances that occurred in 2022, which the Company's management believes may be of significance to the investors in deciding to acquire, sell or continue to hold publicly offered securities, have been disclosed within the time limits provided for in the Public Offering of Securities Act and by the Financial Supervision Commission, investors and the regulated securities market.
ALLTERCO AD
ANNUAL CONSOLIDATED REPORT ON THE ACTIVITY
UIC 201047670
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail.
3
This Report on the activity of Allterco AD (“the Company”/ “the Issuer”) presents information about the Company and its subsidiaries, together the Group on consolidated basis as of December 31, 2022 and covers the period 01.01.2022- 31.12.2022 (“the reporting period”).
Allterco AD is a public joint-stock company, established in 2010 in the city of Sofia and entered into the Commercial Register with the Registry Agency on 11.02.2010 under UIC (unified identification code): 201047670 and LEI code (identification code of the legal entity) 8945007IDGKD0KZ4HD95 for unlimited period of time. The name in Latin shall be written as follows: ALLTERCO AD. The Company’s seat and management address is: 103, Cherni Vrah Blvd., 1407 Sofia, Capital Municipality, Republic of Bulgaria. The correspondence address is the same; tel.: +359 2 957 12 47. The Company’s website is www.allterco.com.As of 22.11.2021, the shares of Allterco AD are traded on two EU regulated markets - the Bulgarian Stock Exchange and the Frankfurt Stock Exchange. The Company operates in accordance with Bulgarian legislation. The Issuer is part of an economic group that consists of the parent company Allterco AD and its subsidiaries which as of December 31, 2022 are as follows: - Allterco Robotics EOOD, Bulgaria; - Allterco Properties EOOD, Bulgaria; - Allterco Trading EOOD, Bulgaria; - Shelly USA Inc., USA (previously Allterco Robotics US); - Allterco Europe GmbH, Germany. As of the end of the reporting period, the issued, subscribed, paid up and registered capital of the Company amounts to BGN 17 999 999 (seventeen million nine hundred and ninety-nine thousand nine hundred and ninety-nine leva), divided into 17 999 999 (seventeen million nine hundred and ninety-nine thousand nine hundred and ninety-nine) dematerialized ordinary registered voting shares with par value of 1 (one) BGN each. The share capital was fully paid in by five contributions:
The public offering of shares from the capital increase of Allterco AD was held in the period 28.09.2020 – 30.10.2020 on the basis of a Prospectus together with its supplements as affirmed by the Financial Supervision Commission with Ordinance No 148- Е of 18.02.2020, Decision No 405 - Е of 11.06.2020, Decision No 601 - Е of 13. 08.2020 and Decision No 791- Е of 29.10.2020.
ALLTERCO AD ANNUAL CONSOLIDATED REPORT ON THE ACTIVITY UIC 201047670
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail.
4
As of December 31, 2022, the capital structure of ALLTERCO AD is as follows:
| SHAREHOLDER | PERCENTAGE OF THE CAPITAL |
|---|---|
| Svetlin Todorov | 32,48 % |
| Dimitar Dimitrov | 32,48 % |
| Other individuals and legal entities | 35,04 % |
As of December 31, 2022, the Company has 40,000 own shares, representing 0.22% of its capital.
1.1. In-kind contributions made in the last three financial years
In the last three financial years, no in-kind contributions were made to the Company's share capital.
1.2. Information about the management system
As of 31.12.2022, ALLTERCO AD has a one-tier management system - 5-member Board of Directors (BD). During the reporting period, changes were made in the composition of the Company's Board of Directors. By decision of an extraordinary General Meeting of Shareholders, held on 08.04.2022, the number and members of the Board of Directors were changed from three to five members, joining Mr. Wolfgang Kirsch and Mr. Gregor Bieler to the current BD members. Pursuant to the decision of the General Meeting of Shareholders at its first meeting, held on 08.04.2022, the Board of Directors elects among its members executive members, chairman and deputy chairman, as follows:
The representative members of the Board of Directors represent the Company jointly or separately.
REVIEW OF THE COMPANY’S BUSINESS ACTIVITY AND STATUS
As of 31.12.2022 Allterco AD reports investments in the following companies:
100% of the capital of Allterco Robotics EOOD, Bulgaria;
Allterco AD has an associate company in China, Allterco Asia Ltd. 91440300MA5GMK2T5B, with seat and management address: number 716, Building A, XingHe Shiji, Cai Tian road 3069, Gangxia, Futian, Shenzhen, China. The share capital of the new company is CNY 100 000, and the share of Allterco AD is 30% with an option to acquire additional up to 50% and reach a controlling stake of up to 80% at the discretion of Allterco AD if the project develops successfully.
ALLTERCO AD ANNUAL CONSOLIDATED REPORT ON THE ACTIVITY UIC 201047670
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail.
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The structure of the economic group at the date of issue of this Report includes the following companies:
* During the reporting period, there was no change in the economic group of Allterco AD, but a change occurred after the end of the reporting period, as in January 2023, the Company completed the phase I of the acquisition of the Slovenian IoT supplier Računalniški inženiring in avtomatizacija procesov d.o.o. Nova Gorica, ("GOAP" or the "Acquiree") representing the acquisition of 60% of Acquiree’s equity. The transaction is subject to share purchase agreements ("SPA"), which have been signed with all four G OAP shareholders. The total transaction price for phase I amounts to EUR 2 million. The remaining 40% of the Acquiree’s equity, owned by three owners – individuals, are subject to an options contract, which was signed along with the SPAs. Under the options contract Allterco AD has an unconditional option to purchase (call option), whereas the sellers – conditional option to sell (put option) two packages of company shares (the exercise of any of the sellers’ options is subject to achieving in the period 2023-2025 of specific minimum criteria for KPI, EBITDA and revenue). One of the options is for the acquisition of 16%, whereas the other is for the acquisition of 24% of the equity of GOAP. The total price for the shares upon exercise of the options depends on the extent of realization of the conditions for this and may vary between EUR 699 999.70 (BGN 1 369 080.41) and EUR 3 449 998.60 (BGN 6 747 610.76).
** During the reporting period, the subsidiary Allterco Robotics EOOD established a branch in Ireland, registered in the Trade Register of Ireland (Companies Registration Office ) with reg. number 909893 and address 38 Upper Mount Street, Dublin, D02 PR89, Ireland.
ALLTERCO AD ANNUAL CONSOLIDATED REPORT ON THE ACTIVITY UIC 201047670
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail.
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| REVENUE | 2020 | change % | 2021 BGN’000 | change % | 2022 BGN’000 |
|---|---|---|---|---|---|
| Revenue from sales of devices | 39 117 | 50.4% | 58 831 | 58.1% | 93 007 |
| Revenue from sales of services | 7 225 | -90.6% | 678 | -74.8% | 171 |
| Other operating income | 1 013 | 34.1% | 1 358 | -25.5% | 1 012 |
| Total operating income | 47 355 | 28.5% | 60 867 | 54.75% | 94 190 |
| Profit share in associates | - | - | 32 | 268.8% | 118 |
| Gains on transactions with financial assets | 3 446 | -92.7% | 250 | -100.0% | - |
| Total financial income | 3 446 | -92.7% | 282 | -58.2% | 118 |
3.2. Operating expenses
At the end of the reporting period, the total operating expenses of ALLTERCO AD on consolidated basis increased by 75,6 % compared to the same reporting period of the prior year. The increased amount of expenses was largely due to an increase in salary expenses, which grew by 92,9% compared to prior period, other operating expenses, which increased by 123,2% compared to 2021, sales expenses, which increased by 47.7%, as well as hired services expenses, which increased by 42.1% compared to 2021 and impairment expenses which increased by 464.4%. The increase in other operating expenses was mainly due to receivables written off and/or impaired. The remuneration and insurance expenses (53,3%) represent the largest share in reported expenses for the period, followed by sales expenses by 14,5% and hired services expenses with a share of 12,8 in the total operating expenses.# EXPENSES
| EXPENSES | 2020 BGN’000 | change % | 2021 BGN’000 | change % | 2022 BGN’000 |
|---|---|---|---|---|---|
| Expenses for materials | 131 | 45.0% | 190 | 167.9% | 509 |
| Hired services expenses | 1 377 | 80.0% | 2 478 | 42.1% | 3 521 |
| Depreciation/ amortization expenses | 353 | -45.3% | 193 | 162.2% | 506 |
| Salaries, social insurance and health insurance contributions | 6 115 | 24.1% | 7 590 | 92.9% | 14 644 |
| Other expenses | 723 | 126.4% | 1 637 | -23.3% | 1 255 |
| Total administrative expenses | 8 699 | 39.0% | 12 088 | 69.1% | 20 435 |
| Impairment expenses | 483 | -30.8% | 334 | 464.4% | 1 885 |
| Sales expenses | 542 | 397.4% | 2 696 | 47.7% | 3 981 |
| Other operating expenses | 632 | -16.0% | 531 | 123.2% | 1 185 |
| Total operating expenses | 10 356 | -17.9% | 15 649 | 75.6% | 27 486 |
ALLTERCO AD ANNUAL CONSOLIDATED REPORT ON THE ACTIVITY
UIC 201047670
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail.
7
| Liquidity Ratio | 2020 | 2021 | 2022 |
|---|---|---|---|
| Current ratio | 7.47 | 12.34 | 9.68 |
| Quick ratio | 6.88 | 10.77 | 6.79 |
| Absolute liquidity ratio | 4.13 | 6.34 | 3.53 |
| Cash ratio | 6.34 | 10.32 | 6.25 |
The current liquidity ratio at the end of the reporting period decreased due to the following: the current assets increased by 29,8% compared to the end of 2021, while the current liabilities decreased by 13,1%.
The quick liquidity ratio at the end of the reporting period decreased due to the following: inventories increased by 204,3% compared to the end of 2021, while the current liabilities increased by 65,4%.
The absolute liquidity ratio at the end of the reporting period decreased due to the following: the current liabilities increased by 65,4% compared to the end of 2021, while cash decreased by 7,8%.
The cash ratio at the end of the reporting period decreased due to the following: The current liabilities increased by 65,4% compared to the end of 2021, while cash decreased by 7,8% and the trade receivables increased by 12,9%.
0.00 2.00 4.00 6.00 8.00 10.00 14.00
|-------|-------|-------|-------|-------|-------|-------|
Коефициент на обща ликвидност
Коефициент на бърза ликвидност
Коефициент на абсолютна ликвидност
Коефициент на незабавна ликвидност
31.12.2020 31.12.2021 31.12.2022
ALLTERCO AD ANNUAL CONSOLIDATED REPORT ON THE ACTIVITY
UIC 201047670
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail.
8
| Financial Leverage Ratio | 2020 | 2021 | 2022 |
|---|---|---|---|
| Debt / Equity | 0.16 | 0.11 | 0.12 |
| Debt/ Assets | 0.13 | 0.10 | 0.11 |
| Equity/ Debt | 6.42 | 9.49 | 8.13 |
The change in the debt/equity ratio at the end of the reporting period is due to the following: the Company’s total liabilities increased by 40,9% compared to the end of 2021, and equity increased by 20,7%.
The change in the debt/assets ratio at the end of the reporting period is due to the following: the Company’s total assets increased by 22,6% compared to the end of 2021, while the Company’s total liabilities increased by 40,9%.
The change in the equity/debt ratio at the end of the reporting period is due to the following: the total liabilities of the Company increased by 40,9% compared to the end of 2021, and the equity has increased by 20,7%.
Summary information on the financial performance of ALLTERCO AD for the last three financial periods is presented in the following charts and tables:
0.00 1.00 2.00 3.00 4.00 5.00 6.00 7.00 8.00 9.00 10.00
|-------|-------|-------|-------|-------|-------|-------|-------|-------|-------|
Коефициент на задлъжнялост
Дълг/ Активи
Коефициент на финансова автономност
31.12.2020 31.12.2021 31.12.2022
0 5,000 10,000 15,000 20,000 25,000
|-------|-------|-------|-------|-------|
EBITDA
EBIT
31.12.2020 31.12.2021 31.12.2022
ALLTERCO AD ANNUAL CONSOLIDATED REPORT ON THE ACTIVITY
UIC 201047670
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail.
9
Table 6
| 2020 | 2021 | 2022 | |
|---|---|---|---|
| EBITDA | 16 859 | 19 814 | 21 405 |
| EBIT | 15 797 | 18 746 | 20 377 |
The calculation of the above indicators includes the gains on the sale of financial assets (realized in 2020 and 2021), which are ordinary operating revenues for a holding company.
Table 7
| INDICATORS | 2020 BGN’000 | 2021 BGN’000 | 2022 BGN’000 |
|---|---|---|---|
| Sales revenue | 46 342 | 59 509 | 93 178 |
| Equity | 56 836 | 65 502 | 79 072 |
| Non-current liabilities | 2 549 | 2 087 | 1 757 |
| Current liabilities | 6 308 | 4 816 | 7 969 |
| Non-current assets | 18 603 | 12 991 | 11 692 |
| Current assets | 47 090 | 59 414 | 77 106 |
| Working capital | 40 782 | 54 598 | 69 137 |
| Cash | 26 050 | 30 541 | 28 148 |
| Total debt | 8 857 | 6 903 | 9 725 |
| Interest expense | 110 | 81 | 69 |
| Inventory | 3 660 | 7 560 | 23 002 |
| Current receivables | 13 948 | 19 167 | 21 647 |
| Expenses for ordinary activities | 9 343 | 14 291 | 26 474 |
| Materials expenses | 131 | 190 | 509 |
Table 8
| PROFITABILITY RATIO | 2020 | 2021 | 2022 |
|---|---|---|---|
| Return on registered capital | 0.747 | 0.883 | 0.969 |
| ROE | 0.235 | 0.243 | 0.220 |
| ROA | 0.205 | 0.219 | 0.196 |
0.000 0.200 0.400 0.600 0.800 1.000 1.200
|-------|-------|-------|-------|-------|-------|-------|
Рентабилност на регистрирания капитал
Рентабилност на собствения капитал (ROE)
Рентабилност на активите (ROA)
2020 2021 2022
ALLTERCO AD ANNUAL CONSOLIDATED REPORT ON THE ACTIVITY
UIC 201047670
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail.
10
As of the end of the reporting period, the Return on equity ratio decrease to 0,22 compared to the same period of the prior financial year. It is due to the increase by 9.7% in the net profit compared to 2021 while the Company's equity increased by 20,7%.
The value of ROA ratio as of the end of 2022 is 0,196 and decreases compared to the prior financial year. For 2022, ALLTERCO AD reports an increase of the net profit by9.7%, whereas the Company's assets increase by 22,6%.
As of the end of the reporting period, the Return on registered capital is 0,969, which is an increase compared to 2021. In 2022 compared to 2021, the Company's net profit increase, whereas the Company equity remains unchanged.
As of the end of the reporting period, the average number of employees in the Group is 152 people, including the Board of Directors 5. The relationships with workers and employees are regulated under separate labour contracts. The Company's management strives to improve the standard of living of its employees beyond the working hours during which they are directly focused on their business commitments. The expenses for salaries and social security for 2022 amount to BGN 14 644 thousand (2021: BGN 7 590 thousand).
The Company and its subsidiaries do not carry out activities that have negative impact on the environment. Nevertheless, the Company and its subsidiaries strive to limit the use of materials produced from non-renewable energy sources and implements an energy safety program. Some of the companies in the Group produce electrical and electronic equipment - smart devices, including those with built-in batteries. The companies in the Group implement the measures required by the law in relation to obsolete electrical and electronic equipment (including its batteries), as well as its packaging by participating in collective waste management systems.
In accordance with the requirements of Directive 2014/95/EU of the European Parliament on non-financial reporting and the provisions of the Accountancy Act, for a number of companies arises an obligation to publish non-financial information separately or as part of the annual reports on the activity. The obligation arises for large public-interest entities which, as at 31 December of the reporting period, exceed the criterion for an average number of employees in the financial year of 500 people. Public interest entities are: public entities and other issuers of securities; credit institutions; financial institutions; insurers and reinsurers, pension insurance companies and funds managed by them; investment intermediaries; trading companies that produce, distribute and sell electricity and heat; commercial companies that import, transport, distribute and transit natural gas; commercial companies providing water, sewer and telecommunications services; Bulgarian State Railways EAD and its subsidiaries. Large enterprises are defined as those with net sales revenues - BGN 76 million or the carrying amount of the assets - BGN 38 million. Given the criteria set out in the Accountancy Act, it can be concluded that Allterco AD, on a consolidated basis, is not obliged to report non-financial information separately or as part of the report of the Board of Directors.
ALLTERCO AD ANNUAL CONSOLIDATED REPORT ON THE ACTIVITY
UIC 201047670
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail.
11
The risks related to the business operation of the Company and its subsidiaries can be generally divided into systematic (overall) and non-systematic (related specifically to its activity and the industry where it operates). The Company is also associated with the similar risk categories inherent in its activity and the industry where its subsidiaries operate insofar as they are the main source of the Company's revenue. In addition, the investors in financial instruments of the Company are exposed to risks related to investments in securities (derivative and underlying).
Systematic risks are related to the market and the macro environment in which the Company and its subsidiaries operate, which is why they cannot be managed and controlled by the company's management team. Systematic risks are the following: political risk, macroeconomic risk, inflation risk, currency risk, interest rate risk, tax risk and unemployment risk.
Description
POLITICAL RISK
Political risk is the likelihood of a change of Government, or of a sudden change in its policy, of occurrence of internal political upheavals and unfavourable changes in European and/or national legislation, which would have an adverse impact on the environment in which local businesses operate, and investors would incur losses.# ALLTERCO AD ANNUAL CONSOLIDATED REPORT ON THE ACTIVITY
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail.
In November 2021, the country held for the second time early parliamentary elections for the Ordinary National Assembly, as a result of which the political party ruling in the last 12 years lost its position in state governance. After voting in June 2022, a motion of censure to the coalition government formed at the end of 2021 led to early parliamentary elections being held in September 2022. Due to the impossibility of forming a regular government as of the date of this report, a procedure for new elections on April 2, 2023 is in process. Political risks for Bulgaria internationally are related to the commitments undertaken to implement serious structural reforms in the country in its capacity as an equal member of the EU, increasing social stability, and limiting inefficient spending, on the one hand, as well as threats of terrorist attacks in Europe, strong destabilization of the Middle East countries, the military interventions and conflicts in the region of the former Soviet Union, the refugee waves generated by these factors, and the potential instability of other key countries in the immediate vicinity of the Balkans. Other factors that also affect this risk are the possible legislative changes and, in particular, those concerning the economic and investment climate in the country.
According to the National Statistical Institute, in December 2022 the total business climate indicator increased by 1.0 percentage points compared to November. An increase in the indicator was observed in industry and retail trade, the construction sector maintains its level, and in the services sector a decrease was noted.
| Business climate - total |
|---|
| Source: NSI |
1 Business Conjuncture, December 2022 | National statistical institute (nsi.bg)
According to ECB forecasts from December 2022, global real GDP growth (excluding the euro area) is expected to slow down to 2.6% in 2023 - below the long-term average, before recovering gradually to 3.1% and 3.3% in 2024 and 2025, respectively. This outlook is below the forecasted one in September 2022. Average annual real GDP growth is expected to slow down significantly, from 3.4% in 2022 to 0.5% in 2023, after which to accelerate to 1.9% in 2024 and to 1.8% in 2025.
The interest rate risk is related to possible, eventual, adverse changes in the interest rates established by the financial institutions of the Republic of Bulgaria. At its December meeting, the ECB's Governing Council decided to raise the three main interest rates by 50 basis points and, given the substantially upwardly revised inflation outlook, it is expected to raise them further. According to this decision, the interest rate on the main refinancing operations and the interest rates on the marginal credit facility and on the deposit facility were increased to 2.50%, 2.75%, and 2.00%, respectively, effective as of December 21, 2022. The ECB's Governing Council estimated that interest rates would need to rise significantly at a steady pace to reach sufficiently restrictive levels to ensure a timely return of inflation to the medium-term target of 2%. Keeping interest rates at restrictive levels will reduce inflation over time, dampening demand, and also guard against the risk of a sustained upward shift in inflation expectations. Future decisions of the ECB Governing Council on key interest rates will continue to be data-dependent and will be taken separately at each meeting.
| 01.01.2022 | 01.02.2022 | 01.03.2022 | 01.04.2022 | 01.05.2022 | 01.06.2022 | 01.07.2022 | 01.08.2022 | 01.09.2022 | 01.10.2022 | 01.11.2022 | 01.12.2022 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Source BNB4 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.49 | 0.59 | 1.30 |
2 https://www.ecb.europa.eu/pub/economic-bulletin/html/eb202208.bg.html
3 https://www.bnb.bg/bnbweb/groups/public/documents/ecb_publication/publications_ecb_mb_202208_bg.pdf
4 https://www.bnb.bg/Statistics/StBIRAndIndices/StBIBaseInterestRate/index.htm
Inflation risk is a general rise in prices in which money depreciates and there exists a probability of loss to households and firms. The consumer price index (CPI) is an official measure of inflation in the Republic of Bulgaria. It estimates the total relative change in the prices of goods and services used by households for personal (non-production) consumption and the index is calculated by applying the structure of the final cash consumer expenditure of Bulgarian households. According to the NSI in December 2022 the monthly inflation, measured by the consumer price index (CPI), is 0.9% compared to the previous month, whereas the annual inflation for December 2022 compared to December 2021 is 16.9%. The average annual inflation for the period January - December 2022 compared to the period January - December 2021 is 15.3%.
5 http://www.nsi.bg/bg/content/20021/прессъобщение/инфлация-и-индекси-на-потребителските-цени-за- декември-2022- година
| * Inflation, measured by the CPI, by months, |
|---|
| Source: NSI |
According to the harmonized index of consumer prices (HICP) in December 2022 the monthly inflation is 0.8% compared to the previous month, whereas the annual inflation for December 2022 compared to December 2021 is 14.3%. The average annual inflation for the period January - December 2022 compared to the period January - December 2021 is 13.0%.
Headline inflation in the euro area, as measured by the Harmonised Index of Consumer Prices (HICP), fell in January 2023, for the third consecutive month, driven by lower energy price inflation. The further decline from 9.2% in December 2022 to 8.5% in January 2023 reflected a sizeable drop in energy inflation from 25.5% to 17.2%. At the same time, food inflation rose further from 13.8% in December to 14.1% in January, and HICP excluding energy and food (HICPX) inflation was unchanged from December, standing at 5.2%. While NEIG inflation increased further to a new record level of 6.9%, services inflation declined from 4.4% in December to 4.2% in January.
6 Inflation and consumer price indices in December 2022 | National statistical institute (nsi.bg)
7 https://www.ecb.europa.eu/pub/economic-bulletin/html/eb202208.bg.html
Currency risk will have an impact on companies with market shares, the payments of which are made in a currency other than BGN and EUR. Since, according to the current legislation in the country the Bulgarian lev is fixed to the euro in the ratio EUR 1 = BGN 1.95583, and the Bulgarian National Bank is obliged to maintain a level of Bulgarian levs in circulation equal to the bank’s foreign exchange reserves, the risk of devaluation of the BGN compared to the European currency is minimal and consists in the eventual early abolition of the currency board in the country. At this stage, this seems unlikely, as the currency board is expected to be abolished upon the adoption of the EUR in Bulgaria as an official unit of payment. Theoretically, currency risk could increase when Bulgaria joins the second stage of the European Exchange Rate Mechanism (ERM II). This is a regime in which the country must maintain the exchange rate compared to the EUR within +/- 15% against the central parity. In practice, all countries currently in this mechanism (Denmark, Estonia, Cyprus, Lithuania, Latvia, Malta) are witnessing fluctuations that are significantly less than the allowed ones of ± 15%. On July 10, 2020, Bulgaria joined the ERM II exchange rate mechanism, known as the ‘euro area’s waiting room’. The central rate of the Bulgarian lev is fixed at EUR 1 = BGN 1.95583. Around this central exchange rate of the BGN, the standard range of plus or minus 15 percent will be maintained. Bulgaria joins the exchange rate mechanism with its existing currency board regime, as a unilateral commitment and without additional requirements to the ECB. At the same time, our country must enter into close cooperation with the unified banking supervision.
8 https://www.ecb.europa.eu/press/pr/date/2020/html/ecb.pr200710~4aa5e3565a.en.html
The fixed exchange rate of the BGN to the EUR does not eliminate for the Bulgarian currency the risk of unfavorable movements of the euro exchange rate against other major currencies (US dollar, British pound, Swiss franc) on the international financial markets, but at present the Company does not consider that such a risk would be material to its business. The Company may be affected by currency risk depending on the type of cash flow currency and the type of currency of the Company’s potential loans. The Allterco AD Group companies operate in Bulgaria as well as in EU countries and other countries, mainly in the USA and the Asia-Pacific region. At present, the main revenues from the Group’s IoT business are in BGN or EUR, and the costs of delivery of goods in this segment are mainly in US dollars and are largely tied to the Chinese yuan, which is why the appreciation of the US dollar or Chinese yuan would have an adverse effect on the business performance. In terms of US dollar exposure, the Group companies are expected to have significant US dollar sales revenue in the US and other non-EU markets in the future, which to some extent balances the Group’s net exposure to this major currency.# 7.1. SYSTEMATIC RISKS
To limit the effects of the currency risk, the companies of the Group have introduced a system for planning the deliveries from countries inside and outside the EU, as well as procedures for ongoing monitoring of the movements in the exchange rates of the foreign currencies and control over the forthcoming payments. Currently, the Group companies do not use derivative instruments for hedging the currency risk but, if necessary, the management is ready to enter into such transactions.
Credit risk represents the probability of deterioration of Bulgaria's international credit ratings, caused by the inability of the state to regularly repay its liabilities. Low credit ratings of the state may lead to higher interest rates, more difficult financing conditions for both state and individual entities, including the Issuer. Credit ratings are prepared by specialized credit rating agencies and serve to determine and measure a state's credit risk. Bulgaria's credit rating is presented in the table below:
| Credit agency | Date of last modification | Long-term rating | Outlook |
|---|---|---|---|
| Standard & Poor‘s | 26.11.2022 | BBB/A-2 | Stable |
| Fitch | 17.06.2022 | BBB | Positive |
Source: Ministry of Finance
The international rating agency S&P Global Ratings confirmed the long-term and short-term credit rating of Bulgaria in foreign and local currency 'BBB/A-2'. The outlook for the rating remains stable. The stable outlook balances the weaker expectations for Bulgaria's economic growth in the short term and increased domestic political uncertainty on the one hand, and the country's low net public debt and low interest costs, on the other hand. According to S&P Global Ratings, this development gives Bulgaria policy space and makes its public finances less sensitive to rapidly rising interest rates globally. Bulgaria is currently experiencing high inflation, which according to S&P Global Ratings could pose a challenge to its membership of the Eurozone from 2024. (note Allterco АD: On February 17, 2023 Rositsa Velkova, acting as Minister of Finance announced that the adoption of the euro is postponed to July 1, 2024, the reasons being high inflation and incompatible Bulgarian legislation with that of the ECB).
S&P Global Ratings expect Bulgaria's GDP growth to weaken significantly in the coming months. Although in 2022 the economy remained more resilient to the consequences of the Russia-Ukraine conflict than the rating agency initially expected, several challenges still lie ahead. Expectations are that external demand from Bulgaria's main trading partners in the EU and consumption will decrease, since continued high inflation, estimated at nearly 10% on average in 2023, will weigh on actual wages. EU financed projects are considered to have a positive effect on the economy as they are supporting it. S&P Global Ratings forecast less than 1% growth in 2023 which is a significant slowdown compared to the 3% in 2022.
Bulgaria's successful accession to the Eurozone will eliminate the residual currency risk for the Euro in the economy, it will improve the country's access to European capital markets and allow local commercial banks direct access to the ECB's resources. As at the moment, however, Bulgaria’s inflation is high (nearly 15%), which, according to the rating agency, may complicate the task of meeting the convergence criteria next year with this indicator. Domestic political uncertainty also continues with a caretaker government in place after the last election in October 2022, complicating the process of preparing to join the Eurozone. The rating agency would raise the credit rating upon the country's accession to the Eurozone, as well as upon significant improvement of Bulgaria's external position. S&P noted that they would downgrade the rating if Bulgaria's economic outlook worsened significantly from their current expectations, which could happen, for example, due to more significant indirect effects from a slowdown in global growth, a significant deterioration in the regional security situation, or a disruption in imports of energy from Russia, threatening the availability of sufficient energy supplies for the Bulgarian economy.
Fitch Ratings continue to expect a moderate increase in growth in 2023 (to 3.8%), largely due to stronger investments related to EU funds. Political uncertainty remains an important downside risk. The re-emerging prospect of new elections could delay the uptake of the Recovery and Resilience Plan, which was finally approved in April 2022. However, the risks of a more substantial delay appear limited at present, underscoring the resilience of the economy over the past few years as to internal as well as external shocks. Fitch Ratings expect the deficit to narrow to 2.9% of GDP in 2023, as spending pressures ease. Despite larger deficits, Bulgaria's public debt level will remain very low compared to EU countries and those with a BBB rating. The main factors that could lead to an increase in the rating are progress towards joining the Eurozone, including greater confidence in Bulgaria meeting the membership criteria and improving the growth potential of the economy. Factors that could lead to a downgrade include a significant delay in joining the Eurozone or a major adverse macroeconomic shock that would significantly reduce medium-term growth prospects compared to the rating agency's current expectations.
As a major factor affecting consumer purchasing power, an increase in unemployment would reduce the demand for IoT products. On the other hand, the demand for personnel from the business continues to be extremely active and such risk seems insignificant within the next year. Eurostat estimates that in January 2023, the euro area seasonally-adjusted unemployment rate was 6.7 %, stable compared with December 2022 and down from 6.9 % in January 2022. The EU unemployment rate was 6.1 % in January 2023, also stable compared with December 2022 and down from 6.3 % in January 2022.
The 4.7% unemployment reported by the National Employment Agency's administrative statistics for the last month of 2022 registered the lowest value of the indicator for December and continues to mark a decline in terms of annual dynamics - in this case by 0.1 percentage points.
Although Bulgaria has introduced a number of significant legislative changes since joining the EU and most of the Bulgarian legislation has been harmonied with EU legislation, the legal system in the country is still in the process of reform. Judicial and administrative practices remain problematic and it is difficult to effectively resolve property disputes, breaches of laws and contracts, etc. Deficiencies in the legal infrastructure can result in uncertainty arising from the implementation of corporate actions, supervision and other issues.
It is essential for the financial performance of the companies to maintain the current tax regime. There is no guarantee that the tax legislation, which is directly relevant to the core business of the Company, will not be changed in a direction that would lead to significant unforeseen expenses and, accordingly, would adversely affect its profit. The taxation system in Bulgaria is still developing, as a result of which a contradictory tax practice may arise.
Risks related to the industry in which the Group operates Such risks are the Risk of Key Personnel Shortage, Competitive Risk, Personal Data Security and Cyber Attacks Risk, Regulatory and specific technical requirements Risk, Risk Of Changing Technologies.
One of the biggest challenges facing technology companies such as the Group companies, as well as considering the specific scope of their activity in the field of telecommunications and engineering and software development, is the shortage of qualified personnel. The insufficient availability of suitable personnel in the subsidiaries could adversely affect the future development of the Group, due to delays in the development of new products/services or the maintenance of existing ones. On the other hand, the high competition for attracting personnel in this sector raises the price of labor. As a result, the financial position and market share of the Group’s companies would suffer.
Following the sale of the Group's telecommunications business, the Group's companies operate primarily on the Internet of Things (IoT) segment. This segment is one of the most modern and promising sectors of the industry, which attracts the interest of many technological giants and start-ups. The loss or inability to capture market share and declines in final product prices due to increased competition could have a negative effect on revenues, earnings and profit margins. Maintaining a competitive position requires investment in creating new useful devices, improving existing solutions and expanding market share, and it cannot be taken for granted that new developments will prevail among competitors on the market.# ALLTERCO AD ANNUAL CONSOLIDATED REPORT ON THE ACTIVITY
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail.
17
The technology industry is characterized by the digital transfer of information that could be strictly confidential, containing personal data of product users, financial information of companies, information about new products, etc. The protection of such information is a critically important factor for the normal functioning of companies in the industry, including the companies of the Group. The sales of the devices and the use by customers of the accompanying mobile applications and cloud services provided by the Group are related to the exchange and storage of personal data. A potential breach in information security may lead to:
i) Loss of customers and/or partners and their migration to competitive companies;
ii) Imposing sanctions and lawsuits with regard to violations of applicable data protection and privacy laws;
iii) Lost or delayed orders and sales;
iv) Adverse effect on reputation, business, financial position, profit and cash flows.
The offering of IoT devices is subject to a regulation for the certification of the products for sale in the respective country. In the European Union, products must be marked ‘CE’, thus indicating that the product has been evaluated and meets safety, health and environmental requirements. The US equivalent is UL Certification. For the purposes of certification, accredited laboratories are assigned the compliance tests, which is associated with significant costs. In addition, specifics in the requirements of local regulators and counterparties (especially mobile operators) may require the performance of additional tests and certification, which increases the cost of entering a certain market or a certain distribution channel. The sales of the products of the Group’s companies cover more and more markets, which often have local regulation regarding the certification of similar products in the respective country. Compliance with local regulatory requirements is time and resource intensive and may delay the Company's entry into new markets or impose additional costs to meet different standards. The change in regulatory requirements for devices may involve additional costs to bring them into compliance with the new requirements, including costs of recalling products from the market to bring them into compliance with those requirements. The companies of the Group and their local partners monitor for planned legislative changes on a regular basis in order to take measures to ensure product compliance.
Any changes in the regulations of telecommunications services may also have some impact on the Group's operations, as mobile operators are one of the main sales channels for the existing Myki series products. A large part of the IoT devices developed and sold by the companies in the Group use Internet-based technology and can work with the services of any Internet provider. In this respect, the Group is already less dependent on regulations in the field of telecommunications, insofar as the companies in its structure are not telecommunication service providers and mobile operators are only one of the channels for trading and distribution of IoT devices.
The Issuer and its subsidiaries operate in a highly dynamic segment where technology has a significant impact and is a source of competitive advantage. As a result, there is a risk of delayed adaptation to new technologies, due to lack of knowledge, experience or sufficient funding, which may have a negative effect on the Issuer. Slow adaptation to new realities may lead to loss of competitive positions and market shares, which in turn will lead to deterioration of the Group's results.
Such risks are: operational risk, risk related to business partners, risks arising from new projects and liquidity risk.
Operational risk can be defined as the risk of losses caused by flawed or failed internal processes related to management. Such risks may arise as a result of:
• Wrong operational decisions related to current project made by the management;
• Shortage of qualified personnel necessary for the development and implementation of new projects;
• Resigning key personnel impossible to replace;
• Risk of an excessive increase in management and administrative costs, leading to a decrease in the overall profitability of the Issuer;
• Technical failures leading to long interruptions is providing services may lead to the termination of contracts with customers.
The effects of such circumstances may reduce the Issuer's revenues and deteriorate the results of its activity.
Manufacturing activity in the IoT segment has been outsourced, primarily to China, and is concentrated in a few manufacturers. Potential risks associated with key subcontractors are related to accurate and timely delivery or termination of business relationships. Although, management believes there is a wide range of alternative suppliers, the possible transfer of production to new partners and diversification of subcontractors may give rise to delays in deliveries and additional costs, which may affect the ability of the companies in the Group to fulfill agreed orders from customers and adversely affect the reputation and financial results of the Group.
The main activity of Allterco AD is investments in subsidiaries. There is a risk that some of the subsidiaries may not be able to meet their objectives, resulting in a lower or negative return on investment. The development of new products and services by Allterco AD’s subsidiaries is related to the investment in human resources, software, hardware, materials, goods and services. In case the new products and services fail to be realised on the market, such investments would be unjustified. This, in turn, would have a negative impact on the Company's expenses and assets, as well as on the results of its operations. In order to manage the risk arising from new projects, the companies of the Group make market and financial analyses with different scenarios, and in some cases discuss the concept of the new service / product with potential customers.
With regard to the Group the manifestation of liquidity risk is associated with the possibility of a lack of timely and/or sufficient available funds to meet all current obligations. This risk can occur both in case of a significant delay in payments by the Company's debtors, and in case of insufficiently effective management of cash flows from the Company's activities. Some of the companies in the Group use bank funding such as investment loans, overdrafts or revolving credit lines, which can be used in case of liquidity problems.
The Company implements a conservative liquidity management policy, through which it constantly maintains an optimal liquid cash reserve and a good ability to finance its business activity. In order to control the risk, the Company is trying to pay its liabilities within the agreed deadlines. The Company monitors and controls the actual and estimated cash flows for future periods and maintains a balance between the maturity limits of the Company's assets and liabilities.
The events after the reporting date are disclosed in Note 11 to the 2022 consolidated financial statements.
Allterco AD does not carry out direct production activities. The production activity is carried out by the subsidiaries in the Group. In 2023, Allterco AD will continue to operate in the following main areas:
| Name of company | Areas of activity for 2023 |
|---|---|
| Allterco AD – parent company | 1. Observation, control and decision-making on important issues affecting subsidiaries as sole proprietor or majority owner through: applying the principles of good corporate governance; providing efficient and transparent work conditions; improving the quality of services/products offered; 2. Transactions with assets of the Company and its subsidiaries 3. Management structure establishment 4. Funding the investments and the working capital of subsidiaries 5. Establish a unified financial reporting and accounting policy. |
| Allterco Trading EOOD | 1. Production of children’s watches and trackers; 2. B2B trade and distribution of IoT devices, developed or produced by Allterco Robotics EOOD and other companies in the Group. |
| Allterco Robotics EOOD, Bulgaria | 1. Development, production and sale of IoT devices 2 Development activity in the sphere of IoT devices |
| Allterco Properties EOOD, Bulgaria | Provision of offices and car rental. |
| Allterco Europe GmbH, Germany | Trade and distribution of IoT products in Europe |
| Shelly USA Inc (previous name Allterco Robotics US) Inc., USA | Trade and distribution of IoT products in North and South America. |
The Company has not carried out any research and development activities and is not planning such activities in the foreseeable future. The Allterco Robotics EOOD subsidiary carried out such activity in 2022.
11.1.# 11. Own Shares
Number and nominal value of own shares acquired and transferred during the year, their capital share, as well as acquisition or the transfer price. Allterco AD purchased own shares during the reporting period. As of December 31, 2022, the Company owns 40,000 own shares, representing 0.22% of its capital.
As of the end of the reporting period, the Company’s own shares are as specified in item 11.1. above.
The following remunerations were appointed to the members of the Board of Directors of Allterco AD in 2022:
| Full name | Position | Remuneration / thousand BGN |
|---|---|---|
| Gregor Bieler | Chairman of the Board of Directors | 166 |
| Dimitar Stoyanov Dimitrov | Executive Director | 60 |
| Wolfgang Kirsch | Executive Director | 404 |
| Svetlin Iliev Todorov | Member of the Board of Directors | 60 |
| Nikolay Angelov Martinov | Independent member | 60 |
As of the end of the reporting period, the remunerations appointed to the members of the Board of Directors have been paid. There are no provisions in the Company's Articles of Association regarding special rights or any privileges of the members of the Board of Directors. During the reporting year, some of the members of the Board of Directors received remuneration from the subsidiaries for performing other functions, subject of the Report on the implementation of the Remuneration Policy.
As of the end of the reporting period, the shares owned by members of the Board of Directors of Allterco AD are:
| Name | PERCENT OF THE CAPITAL |
|---|---|
| Svetlin Todorov | 32,48% |
| Dimitar Dimitrov | 32,48% |
| Nikolay Angelov Martinov * | 0% |
| Wolfgang Kirsch | 0% |
| Gregor Bieler ** | 0% |
** Gregor Bieler holds less than 0.03% acquired before his appointment as member of the Board of Directors.
ALLTERCO AD ANNUAL CONSOLIDATED REPORT ON THE ACTIVITY UIC 201047670 This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail. 20
The members of the Company's Board of Directors may freely acquire shares from the capital of the Company on a regulated securities market in compliance with the provisions of the Law on Measures against Market Abuse with Financial Instruments, Regulation (EU) No. 596/2014 of the European Parliament and of the Council of April 16, 2014 on market abuse (Market Abuse Regulation) and the Public Offering of Securities Act. In accordance with the provision of Art. 19 of the Market Abuse Regulation, the members of the Company's Board of Directors, other individuals with managerial functions in the Issuer, and individuals closely related to them, shall notify the Company and the Financial Supervision Commission (FSC) in writing of any transaction carried by them with Allterco AD’s shares within 3 working days after the transaction. The notification obligation does not apply when the total amount of transactions made by an individual with managerial functions in the Issuer, or a closely individual does not exceed EUR 5,000 within a calendar year.
| | Dimitar Dimitrov as of 31.12.2022 # ALLTERCO AD ANNUAL CONSOLIDATED REPORT ON THE ACTIVITY
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail.
Svetlin Todorov - as of 31.12.2022
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail.
Nikolay Martinov - as of 31.12.2022
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail.
Nikolay Martinov - as of 31.12.2022
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail.
In 2022, no contracts were concluded with the members of the Board of Directors of the Company or with person related to them, that go beyond the ordinary activities of the Company or significantly deviate from market conditions.
Changes in the economic policy of the Company in 2023 are not foreseen. The revenue of the Group will continue to be generated mainly from sale of smart devices. It is expected that in 2023 the number of employees in the subsidiaries will increase due to:
1. the expanding of the market presence
2. increase of the R/D capacity of the subsidiaries
The Company has no registered branches. One of the subsidiaries – Allterco Robotics EOOD has a registered branch in Ireland in 2022.
Allterco AD and its subsidiaries have not used financial instruments in 2022 to hedge risks from changes in foreign currency exchange rates, interest rates or uncertainty of cash flows. During the reporting year, the Company and its subsidiaries have not performed currency risk hedging transactions. The Allterco AD has long-term financial instruments and during the reporting period it sold part of them.
The Company could have exposure to credit, liquidity, market, interest rate, currency and operational risks arising from the use of financial instruments. Information regarding financial instruments and financial risk management is disclosed in Note 8 to the consolidated financial statements.
Allterco AD does not carry out direct pro duction activities. The production activity is carried out by the issuer’s subsidiaries.
Information on revenue, broken down by main category of activities is presented in p. 3.1. of this Report.
During the reporting period Allterco AD has concluded transactions within the ordinary scope of business, which might be considered significant due to their specifics:
* In the first quarter of 2022 Allterco AD has increased the capital of its subsidiary Allterco Robotics EOOD.# ALLTERCO AD ANNUAL CONSOLIDATED REPORT ON THE ACTIVITY
UIC 201047670
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail.
During the reporting period the Company has not entered into any transactions with interested parties within the meaning of POSA.
The Company has not entered into transactions with its subsidiaries and associated companies that are outside of its usual business or significantly deviate from market conditions.
Transactions in the ordinary course of business with subsidiaries include:
All transactions between companies within the Group are eliminated in the consolidated financial statement.
After the end of the reporting period, Allterco AD, in its capacity as a lender, provided the amount of EUR 500,000 to its subsidiary under the following conditions: repayment period 31.12.2029, interest - according to statistical data published by the Bulgarian National Bank regarding "Interest rates and volumes on loans, other than overdraft to non-financial corporations sector (in EUR for a period of more than 5 years)".
During the reporting period there were no events or indicators of unusual nature for Allterco AD and its subsidiaries.
Allterco AD is a joint stock company - holding, whose scope of business includes acquisition, management, assessment and sale of participations in Bulgarian and foreign companies. Within the scope of activities during the reporting period the Company has carried out transactions as indicated in p. 15.3 of this Report.
During the reporting period the Company has not entered into transactions that were conducted off-balance sheet.
As of the end of the reporting period Allterco AD owns shares of subsidiaries as indicated in p. 2 of this Report.
The Company owns 593 536 shares of the capital of Link Mobility Group Holding ASA, “Link Holding”. The indicated number of shares represents the remaining part of a total of 1 345 180 shares, received as part of (20%) of the price in accordance with Share Purchase Agreement (SPA) dated 29.06.2019 for the sale of telecommunications business of Allterco AD in Europe, concluded with Link Mobility Group AS.
Allterco AD is a borrower under a Mortgage (investment) loan agreement dated 25.08.2017, concluded with KBC Bank, secured by a guarantee of the subsidiary Allterco Properties EOOD. The Company has assumed joint liability and a guarantee obligation for securing the following bank financing agreements concluded by its subsidiary Allterco Robotics EOOD with KBC Bank. For further information see Note 5 of the consolidated financial statements of the Company as of December 31, 2022.
The Board of Directors of Allterco AD has approved financing of the activities of the subsidiary Shelly USA Inc., USA with the following parameters: (1) providing additional cash contribution in the amount of USD 1 million, for a one- year term at annual interest rate of 1% and (2) increase of the capital in the amount of USD 500 000. At the end of the reporting period the financing was provided fully to the subsidiary.
During the reporting period Allterco AD has not concluded other loan agreements in its capacity of a lender.
After the end of the reporting period, Allterco AD, in its capacity as a lender, provided the amount of EUR 500,000 to its subsidiary under the following conditions: repayment period 31.12.2029, interest - according to statistical data published by the Bulgarian National Bank regarding "Interest rates and volumes on loans, other than overdraft to non-financial corporations sector (in EUR for a period of more than 5 years)".
The subsidiaries have provided guarantees in the form of joint liability under bank financing agreements, as indicated in Note 5 of the consolidated financial statements of the Company.
In 2020, the Company issued new securities as a result of a successful capital increase through an initial public offering.# 15. Other Information
In the course of the offer, 2,999,999 (two million nine hundred and ninety-nine thousand nine hundred and ninety-nine) dematerialized ordinary registered voting shares with a nominal value of one lev were subscribed and paid for. As of the end of the reporting period, the Company has spent part of the funds from the new issue of shares as follows:
Allterco AD has not published forecasts for the current financial year on a consolidated basis. The Company has published forecasts for 2022 only on a consolidated basis as part of the Prospectus for public offering of shares from the capital increase of Allterco AD, together with the amendments thereto.
ALLTERCO AD and its subsidiaries carry out their operational activities in a way that the management of the financial resources is exclusively subordinated to maintaining such a capital structure that will allow to combine the lower risk of using only own funds with the higher efficiency and flexibility of cash flow under conditions of debt financing so that the Company and its subsidiaries are able at any time to switch from one type of financing to another, depending on their specific needs.
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Impact of COVID-19 on the business activity: In 2022, the management continued to successfully implement certain stabilization measures to limit potential negative impact on the Company's personnel and/or financial position. As a result of these measures (introduction of a hybrid work option for the Group’s employees; timely resourcing of key production components), the Group is reporting a positive trend in its business development and expects this trend to continue in the next financial year.
The Company plans to continue investing in 2023 in the development of Internet of Things through its subsidiaries. The investment program will be funded with the Company’s own cash and raised funds, if necessary.
During the reporting period, there were no changes in the basic principles for managing the Company and its Group of companies.
The Company has a system of internal control and risk management ("the system") that guarantees the effective functioning of the reporting and disclosure systems as well as an Audit committee. The system is built and functioning in order to identify the risks associated with the Company's activities and their effective management.
The Board of Directors has the primary responsibility and role in establishing the internal control and risk management system. It performs both managing and guiding functions as well as ongoing monitoring. The ongoing monitoring by the management consists of assessing whether the system is still appropriate for the Company in a changed environment, whether it operates as expected and whether it adapts successfully to the changed conditions. The evaluation of selected areas is in line with the Company's priorities. The evaluation is also commensurate with the specifics of the Company and the impact of the identified risks. The Board of Directors monitors the main features and characteristics of the system, including identified incidents and the respective applied corrective actions.
The Audit Committee assists the Board of Directors in the execution of their control functions and powers with regard to the financial reporting process, the internal control system, the audit process and monitoring on compliance of the activities of Allterco AD with the provisions of applicable national and European legislation, as well as the Company's internal policies. The Audit Committee holds regular meetings, fulfilling the functions assigned to it by law and the General Meeting of Shareholders in accordance with the adopted Statutes.
The control environment includes the functions of general management, as well as the attitude, awareness and actions of the corporate management pertaining to internal control.
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The process of risk assessment is the basis on which the Board of Directors of the Company determines the risks to be managed. The Board of Directors of the Company identifies the following types of risk that affect the Company and its activities: general (systematic) and specific (non-systematic) risks. Systematic risks are related to the macro environment in which the Company operates, which is why in most cases they cannot be controlled by the management team. Non-systematic risks are directly related to the activities of the Company and depend mainly on corporate governance. To minimize them, we rely on increasing the efficiency of internal company planning and forecasting, which provides opportunities to overcome possible negative consequences of a risky event.
Each of the risks related to the country - political, economic, credit, inflation, foreign exchange, has its own significance, but the interaction between them forms a comprehensive picture of the main economic indicators, market and competitive conditions in the country in which the Company operates. A detailed description of the risks typical for the activity of Allterco AD is presented in the item 7 above MAIN RISKS, WHICH THE COMPANY FACES in this Report.
During the reporting period, changes were made to the composition of the Board of Directors of the Company. With a decision of the extraordinary General Meeting of Shareholders held on 08.04.2022, the number and composition of the Board of Directors was changed from three to five members, and Mr. Wolfgang Kirsch and Mr. Gregor Beiler joined the current members.Pursuant to the decision of the General Meeting of Shareholders at its first meeting, held on 08.04.2022, the Board of Directors elected from among its members - executive members, chairman and deputy chairman, as follows:
* Gregor Beiler – Chairman;
* Nikolay Martinov – Deputy Chairman;
* Dimitar Dimitrov – Executive Director and representative;
* Wolfgang Kirsch – Executive Director and representative;
* Svetlin Todorov – Member of the Board of Directors and representative;
The members of the Board of Directors representing the Company represent the Company jointly or severally.
During the reporting period, the members of the Board of Directors received from Allterco AD cash /gross/ in the total amount of BGN 750 thousand in accordance with the effective Remuneration Policy.
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During the reporting period the following members of the Board of Directors received cash remuneration /gross/ from subsidiaries:
The members of the Board of Directors have not received any non-cash remuneration during the reporting period.
At the General Meeting of Shareholders held on December 13, 2022, a decision was adopted to amend the Remuneration policy of the members of the Board of Directors (“Policy”), as well as Scheme for granting variable remuneration in shares of the Company to the executive members of the Board of Directors for the period 2022 – 2025 (“Scheme”).
Based on the adopted decisions on December 13, 2022, at the General Meeting of the Shareholders a decision was taken to grant variable remuneration in shares to the executive members of the Board of Directors of Allterco AD in the form of options, according to the Scheme, namely:
(1) to the director Mr. Dimitar Dimitrov for the Period of execution of the Scheme is granted a package of conditional options, the conditions and order for exercising are in accordance with the Scheme and Policy, and the remuneration may reach maximum number of 296 750 shares of the capital of Allterco AD, as follows:
The basic options, each for the specified number of shares, the conditions of exercise of which include the achievement of the specified Quarterly Average Share Price ("QASP") on one of the alternatively specified reference dates and other conditions under the Scheme are as follows:
(i) 59 350 shares at QASP of at least ЕUR 11.16 ("Basic option 11.16 DD");
(ii) 44 512 shares at QASP of at least ЕUR 18.00 ("Basic option 18 DD");
(iii) 44 513 shares at QASP of at least ЕUR 27.00 ("Basic option 27 DD");
(iv) 44 512 shares at QASP of at least ЕUR 38.00 ("Basic option 38 DD");
(v) 44 513 shares at QASP of at least ЕUR 46.00 ("Basic option 46 DD");
(vi) 59 350 shares at QASP of at least ЕUR 55.00 ("Basic option 55 DD").
Reserve options, each for the indicated number of shares, whose conditions for exercise for the specified reference period are determined according to the Scheme, as follows:
(i) 29 513 shares upon meeting conditions provided for in the Scheme for reference year 2022. ("Reserve option 2022 DD");
(ii) 34 675 shares upon meeting conditions provided for in the Scheme for reference year 2023. ("Reserve option 2023 DD");
(iii) 39 675 shares upon meeting conditions provided for in the Scheme for reference year 2024. ("Reserve option 2024 DD");
(iv) 44 512 shares upon meeting conditions provided for in the Scheme for reference year 2025. ("Reserve option 2025 DD").
(2) to the director Wolfgang Kirsch for the Period of execution of the Scheme is granted a package of conditional options, the conditions and order for exercising are in accordance with the Scheme and Policy, and the remuneration may reach maximum number of 593 500 shares of the capital of Allterco AD, as follows:
(i) 118 700 shares at QASP of at least ЕUR 11.16 ("Basic option 11.16 WK");
(ii) 89 025 shares at QASP of at least ЕUR 18.00 ("Basic option 18 WK");
(iii) 89 025 shares at QASP of at least ЕUR 27.00 ("Basic option 27 WK");
(iv) 89 025 shares at QASP of at least ЕUR 38.00 ("Basic option 38 WK");
(v) 89 025 shares at QASP of at least ЕUR 46.00 ("Basic option 46 WK");
(vi) 118 700 shares at QASP of at least ЕUR 55.00 ("Basic option 55 WK").
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Reserve options, each for the indicated number of shares, whose conditions for exercise for the specified reference period are determined according to the Scheme, are as follows:
(i) 59 025 shares upon meeting conditions provided for in the Scheme for reference year 2022. ("Reserve option 2022 WK");
(ii) 69 350 shares upon meeting conditions provided for in the Scheme for reference year 2023. ("Reserve option 2023 WK");
(iii) 79 350 shares upon meeting conditions provided for in the Scheme for reference year 2024. ("Reserve option 2024 WK");
(iv) 89 025 shares upon meeting conditions provided for in the Scheme for reference year 2025. ("Reserve option 2025 WK")
The occurrence of the conditions for exercising the options granted by this decision is subject to assessment by the General Meeting of Shareholders of Allterco AD after the expiration of the Period of execution according to the Scheme and with the decision of the general meeting, which determines the number of shares that the directors of the Company are entitled to receive upon exercising the respective options, the manner in which Allterco AD will secure the shares that it should provide to the directors upon exercising the options granted to them is also determined. The choice of the method of securing the shares to fulfil the obligations under the granted options should be oriented, when other conditions are equal, to achieving the most favorable financial conditions possible for the Company and its shareholders, such as analysis and justification of costs when applying different scenarios, together with the non-financial advantages and disadvantages of the respective scenarios, should be presented in the motives for the proposal.
The Company has prepared an actuarial evaluation of the retirement benefits of the staff as of December 31, 2022. As a result of the evaluation long-term retirement obligations to employees are reported in the statement of financial position amounting to BGN 112 thousand.
As of the end of the reporting period, the shares held by members of the Board of Directors of Allterco AD are:
Table 14
| Name | PERCENTAGE OF THE CAPITAL |
|---|---|
| Svetlin Todorov | 32,48 % |
| Dimitar Dimitrov | 32,48 % |
| Nikolay Angelov Martinov * | 0 % |
| Wolfgang Kirsc | 0 % |
| Gregor Beiler** | 0 % |
* Nikolay Martinov has no direct interest in the capital of the issuer. The companies Unicom Consult EOOD, in which he is the sole owner of the capital and manager, Impetus Capital OOD and Impetus Partners OOD, in which he is a partner respectively with 50% and 43,75 % of the capital and manager, as well as ImVenture I KDA and ImVenture II KDA, in which he is a representative of the legal entity - Impetus Capital OOD, have respectively: Unicom Consult EOOD – 84,750 shares (0.47%), Impetus Capital OOD 162,000 shares (0.9%), Impetus Partners OOD 405,000 shares (2.25%) ImVenture I KDA 123,288 shares (0.68%), ImVenture II KDA - 68,493. shares (0.38%) in the capital of the issuer and a total 843 531 number of shares (4.686%) of the voting rights in its General Meeting.
** Gregor Bieler holds less than 0.03% acquired before his appointment as member of the Board of Directors.
ALLTERCO AD ANNUAL CONSOLIDATED REPORT ON THE ACTIVITY UIC 201047670
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail.
35
The Company is not aware of any commitments that may in the future result in a change in the number of shares or bonds held by current shareholders. In October 2020, the majority shareholders and members of the Board of Directors - Svetlin Iliev Todorov and Dimitar Stoyanov Dimitrov concluded an Agreement for blocking the currently owned by them a total of 11 552 240 shares of the Company's capital for a period of 3 years, as of the date of entry of the capital increase in the Commercial Register.# ALLTERCO AD ANNUAL CONSOLIDATED REPORT ON THE ACTIVITY
UIC 201047670
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail.
At the end of the reporting period the Company and its subsidiaries have no pending litigation, administrative or arbitration proceedings concerning payables and receivables of the issuer amounting to at least 10 percent of its equity.
In connection with the Share Purchase Agreement (SPA) concluded in 2019 between Allterco AD and Link Mobility Group, Norway for the acquisition of its European telecommunications business, during the reporting period an out-of-court agreement was reached for payment of the overdue last contribution, for which arbitration proceedings were initiated before the International Arbitration in Vienna. As a result of the agreement, Link Mobility Group paid BGN 2,151 thousand of the amount due and the remaining part of BGN 920 thousand was written-off.
For Bulgaria
Denitsa Stefanova
Tel. +359 2 9571247
e-mail: [email protected]
For Germany:
CROSS ALLIANCE communication GmbH, Sven Pauly
Tel: +49 89 125 09 0331,
E-Mail: [email protected]
www.crossalliance.de
The Company has no obligation for non-financial reporting.
Other circumstances which the Company considers may be relevant to the investors in deciding whether to buy, sell or continue to hold shares are disclosed publicly, including in the Company's Report on the Activity and the Notes to the consolidated financial statements.
ALLTERCO AD ANNUAL CONSOLIDATED REPORT ON THE ACTIVITY
UIC 201047670
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail.
36
| Date | Volume | Turnover | Highest value | Lowest value | Opening value | Closing value |
|---|---|---|---|---|---|---|
| 18.01.2023 | 16 | 146 346 | 222.10 | 20,200 | 20,200 | 20,600 |
| 30.12.2022 | 65 | 128 1 333 161.95 | 20,900 | 19,900 | 19,950 | 20,600 |
| 30.11.2022 | 54 880 | 1 064 068.65 | 20,900 | 18,050 | 18,650 | 19,900 |
| 31.10.2022 | 51 521 | 872 052.30 | 18,650 | 15,800 | 16,500 | 18,650 |
| 30.09.2022 | 25 488 | 451 478.40 | 18,850 | 16,250 | 18,800 | 16,700 |
| 31.08.2022 | 95 508 | 1 772 671.75 | 20,500 | 17,800 | 17,900 | 18,800 |
| 29.07.2022 | 43 301 | 775 046.00 | 18,550 | 17,500 | 18,300 | 17,950 |
| 30.06.2022 | 34 228 | 633 077.35 | 19,000 | 17,600 | 18,500 | 18,750 |
| 31.05.2022 | 27 401 | 499 185.55 | 19,750 | 17,050 | 19,750 | 18,000 |
| 29.04.2022 | 51 828 | 1 042 375.50 | 21,300 | 18,750 | 19,000 | 19,800 |
| 31.03.2022 | 123 107 | 2 105 993.00 | 19,500 | 14,000 | 18,800 | 19,000 |
| 28.02.2022 | 55 488 | 1 081 219.70 | 21,400 | 16,700 | 20,000 | 19,000 |
| 31.01.2022 | 81 865 | 1 574 830.20 | 22,000 | 17,500 | 21,800 | 19,800 |
Source: Investor.bg
Information on the trading in the shares of Allterco AD during the reporting period on the Frankfurt Stock Exchange is available at https://www.boerse-frankfurt.de/equity/allterco-jsco/price-history/historical-prices-and-volumes
ALLTERCO AD ANNUAL CONSOLIDATED REPORT ON THE ACTIVITY
UIC 201047670
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail.
37
Detailed information on significant events that occurred during the reporting period for Allterco AD, including inside information within the meaning of Article 7 of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on Market Abuse (Market Abuse Regulation), as well as other information that could be relevant for investors is regularly disclosed by the Company in accordance with regulatory requirements (“regulated information”).
The Company is disclosing the regulated information to the public through a selected information medium. All information provided to the media in full unedited text is available at: http://www.x3news.com/
The required information is submitted to the FSC - through the unified electronic information submission system established and maintained by the FSC - e-Register. The information is also available on the Company's website at: https://allterco.com and inside information for the reporting year is available in the dedicated section “for investors” on the website.
In relation to the Company’s shares being listed on the Frankfurt Stock Exchange and the requirements of this regulated market, inside information is provided simultaneously also through the electronic reporting system, created and maintained by Deutsche Börse AG - Exchange Reporting System (ERS)
The inside information, distributed via ERS, is published on the investor portal of Deutsche Börse (https://www.boerse-frankfurt.de/) and https://www.dgap.de/ via authorized intermediary EQS Group.
Date: 2.05.2023
Executive Director: /Dimitar Dimitrov/
ALLTERCO AD CORPORATE GOVERNANCE STATEMENT
UIC 201047670
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail.
38
in accordance with the provisions of art. 100n, para. 8 of the Public Offering of Securities Act for the period from 01.01.2022 to 31.12.2022
This Corporate Governance Statement of Allterco AD (the “Company”) has been prepared in accordance with the requirements of art. 100n, para. 8 of the Public Offering of Securities Act (POSA) in connection with Art. 11, item 1 of REGULATION No. 2 of 09.11.2021 on initial and subsequent disclosure of information during public offering of securities and admission of securities to trading on a regulated market and applies to the period 01.01.2022 - 31.12. .2022 (the "Reporting Period")
ALLTERCO AD and its management comply, as appropriate, with the National Corporate Governance Code. Some of the recommendations of the National Code are not yet fully implemented by the corporate management of the Company, but the Board of Directors is committed to continue to bring the activities of ALLTERCO AD in line with them in 2023.
ALLTERCO AD does not implement other corporate governance practices in addition to the National Corporate Governance Code
The subsidiaries of "ALLTERCO" AD are not public entities and their activities are not subject to the principles and provisions of the National Corporate Governance Code, except for the provisions concerning the internal control and risk management systems, which are applied at the Group level. A large part of the provisions of the Code are also inapplicable due to the legal and organizational form of the entities and the sole ownership.
During the reporting period, the activities of the Board of Directors of ALLTERCO AD were carried out in full compliance with the regulatory requirements set out in the Public Offering of Securities Act and the acts on its implementation, and the Statutes of the Company. The corporate management of ALLTERCO AD considers that there are still parts of the National Corporate Governance Code that the Company does not comply with, but in the following reporting period the management will continue to perform all necessary legal and factual actions to bring the activities in line with the principles and recommendations of the Code, as well as best practices in the field of corporate governance. The Code is applied on the basis of the “observe or explain” principle. This means that the Company complies with the Code, and in case of deviation, its management clarifies the reasons.
ALLTERCO AD is a Company with a one-tier management system and is managed by a Board of Directors.
The Board of Directors steers and controls independently and responsibly the activities of the Company in accordance with the established vision, goals, strategies of the Company and the interests of shareholders and stakeholders. The Board of Directors monitors the results of the Company’s activities on a quarterly and annual basis and, if necessary, initiates change in the management of the activities.# ALLTERCO AD CORPORATE GOVERNANCE STATEMENT
UIC 201047670
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail.
The Board of Directors treats all shareholders equally, acts in their interest and with due diligence. The members of the Board of Directors are guided in their activities by the generally accepted principles of integrity and managerial and professional competence. The Board of Directors has not adopted a Code of Ethics. In performing its functions, the Board of Directors strives to follow the economic, social and environmental priorities of the Company. The Board of Directors has built and ensured the functioning of a risk management system, including for internal control and internal audit. The Board of Directors has ensured and controls the integrated operation of the accounting and financial reporting systems. The Board of Directors promotes the implementation and observes the compliance by the subsidiaries of the adopted principles for sustainable development at the group level, thereby contributing to the establishment of a culture of sustainable development. The Board of Directors has ensured and controls the integrated operation of the accounting and financial reporting systems. The Board of Directors provides guidelines, approves and controls the implementation of the Company’s business plan, substantial transactions, as well as other activities stipulated in its statutes.
In accordance with the requirements of the Public Offering of Securities Act, the Board of Directors monitors all substantial transactions and approves them. If there are transactions, which individually or collectively exceed the thresholds specified in Art. 114, para. 1 of the Public Offering of Securities Act, the Board of Directors prepares a motivated report and adopts a decision to convene a General Meeting of Shareholders, at which the shareholders authorize it to carry out these transactions. The Board of Directors reports on its activities to the General Meeting of Shareholders, submitting the annual activity report and the Report on the Implementation of the Remuneration Policy for approval by the shareholders.
The General Meeting of Shareholders elects and dismisses the members of the Board of Directors in accordance with the law and the Statutes of the Company, as well as in accordance with the principles of continuity and sustainability of the work of the Board of Directors. In case of proposals for election of new members of the Board of Directors, the principles of compliance of the candidates’ competence with the nature of the National Corporate Governance Code in the activity of the Company are observed. All members of the Board of Directors meet the legal requirements for holding office. The functions and obligations of the corporate management, as well as its structure and competence are in accordance with the requirements of the Code. The contracts for assignment of the management, concluded with the members of the Board of Directors, define their obligations and tasks, the criteria for the amount of their remuneration, their obligations for loyalty to the Company and the grounds for dismissal.
During the reporting financial year, ALLTERCO AD implemented the Remuneration Policy of the members of the Board of Directors, adopted by the Annual General Meeting of Shareholders, last modified through decision dated 13.12.2022. The remuneration of the members of the Board of Directors and information on its amount is duly disclosed in the activity report of the Board of Directors, as well as in the Report on the Implementation of the Remuneration Policy of the members of the Board of Directors, which are an integral part of the annual financial statements of the Company.
The number of members and the structure of the Board of Directors are determined in the Statutes of the Company. The composition of the Board of Directors is structured in a way that guarantees professionalism, impartiality and independence of its decisions in relation to the Company’s management. The functions and obligations of the corporate management, as well as its structure and competence are in compliance with the requirements of the Code. The Board of Directors ensures the proper allocation of tasks and responsibilities among its members.
ALLTERCO AD CORPORATE GOVERNANCE STATEMENT
UIC 201047670
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail.
The independent members of the Board of Directors of ALLTERCO AD control the actions of the executive management and participate effectively in the Company’s operations in accordance with the interests and rights of the shareholders. The Chairperson of the Board of Directors is an independent director. The competencies, rights and obligations of the members of the Board of Directors follow the requirements of the law, the statutes and the standards of good professional and managerial practice. The members of the Board of Directors have the appropriate knowledge and experience required by the position they hold. Information about their professional qualification and experience is disclosed during the election of the members of the Board of Directors with the materials for the General Meeting of the Shareholders. After the election of new members of the Board of Directors, they get acquainted with the main legal and financial issues related to the Company's activities. Improving the qualifications of the members of the Board of Directors is their constant commitment. The members of the Board of Directors have the necessary time to perform their tasks and duties, even though the statutes of the Company do not determine the number of companies in which the members of the Board of Directors may hold managerial positions. This circumstance is taken into account in the proposals and election of new members of the Board of Directors.
The election of the members of the Board of Directors of the Company is performed by means of a transparent procedure, which provides, among other things, timely and sufficient information about the personal and professional qualities of the candidates for members. As part of the materials for the General Meeting, at which the election of a new member of the Board of Directors is proposed, all declarations required by POSA and the Commercial Act, a criminal record certificate and a professional biography of the candidate for elected position are to be submitted. When electing members of the Board of Directors, the candidates confirm with a declaration or in person to the shareholders the accuracy of the submitted data and information. The election procedure is conducted by show of hands and counting the votes “For”, “Against” and “Abstentions”. The voting results are announced through the minutes of the General Meeting of Shareholders. The number of consecutive mandates of the members of the Board of Directors ensures efficient operation of the Company and compliance with the legal requirements. The statutes of the Company do not provide for a limit on the number of consecutive mandates of the independent members, but this circumstance is observed in the proposal for election of independent members.
The Board of Directors has developed a clear and specific policy for the remuneration of the members of the Board of Directors, which was approved by the Annual General Meeting of Shareholders of ALLTERCO AD and sets the principles for forming the amount and structure of the remuneration. The remuneration of the Executive Member of the Board of Directors consists of a basic remuneration and additional incentives. The additional incentives are subject to clear and specific criteria and indicators regarding the Company's results and/or the achievement of targets set in the Share-Based Remuneration Scheme for executive members of the Board of Directors.
In accordance with the legal requirements and the good practice of corporate governance, the amount and structure of the remuneration, according to the Remuneration Policy adopted by the General Meeting of Shareholders, take into account:
Pursuant to the Remuneration Policy adopted by the General Meeting of Shareholders, the Company may pay executive members of the Board of Directors variable share-based remuneration in order to directly engage management in the achievement of long-term corporate objectives. Variable share-based remuneration is not provided for non-executive members of the Board of Directors. The share-based remuneration of the Company, the criteria for granting and the amounts are determined on the basis of the Share-based Remuneration Scheme, as approved by the General Meeting of Shareholders and adopted with decision dated 13.12.2021, which is in force as of the date hereof.
ALLTERCO AD CORPORATE GOVERNANCE STATEMENT
UIC 201047670
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail.
The independent members of the Board of Directors receive remuneration in accordance with the principles for forming the amount and the structure of remuneration, set out in the Remuneration Policy adopted by the General Meeting of Shareholders.As mentioned above, the disclosure of information on the remuneration of the Board of Directors members is done in accordance with the legal norms and the statutes of the Company - by disclosing in the Annual Report on the Activity and the Report on the Implementation of the Remuneration Policy for the members of the Board of Directors. The Remuneration Policy is published on the Company’s website. In this way, the shareholders have easy access to the policy observed by the Company regarding the basic and additional remuneration for the members of the Board of Directors.
The members of the Board of Directors avoid and do not allow real or potential conflicts of interest. During the reporting period, no transactions have been concluded between the Company and members of the Board of Directors or persons related to them. The members of the Board of Directors immediately disclose conflicts of interest and provide the shareholders with access to information on transactions between the Company and members of the Board of Directors or persons related to them by presenting the declaration under Art. 114b of the Public Offering of Securities Act. The Board of Directors has not established a specific procedure for avoiding conflicts of interest in transactions with interested parties and disclosing information in the event of such, but controls the conclusion of significant transactions through voting and approval of such transactions.
Board of Directors’ work is supported by committees and the Board of Directors determines the need for their establishment according to the specifics of the Company. In compliance with the requirements of the effective legislation and based on the criteria it determines, the Board of Directors annually proposes to the General Meeting of Shareholders to appoint an audit committee with a composition that meets the specific needs of the Company. The Audit Committee carries out its activities in accordance with the legal requirements. The Articles of Association of the Company also provide for the possibility of establishing an Advisory Board by decision of the Board of Directors.
The Board of Directors is assisted by an Audit Committee. The Board of Directors and the Audit Committee ensure compliance with the applicable law regarding the independent financial audit. The rotation principle is applied regarding proposals and appointment of external auditors. The Audit Committee monitors the overall relationship with the external auditor, including the nature of non-audit services provided by the Company's auditor, if any. The Company has established and operates an internal control system, which includes identifying the risks associated with the Company's activities and supporting their effective management. It also ensures the effective functioning of the accountability and information disclosure systems.
The Board of Directors ensures equal treatment of all shareholders, including minority and foreign shareholders, protects their rights and facilitates exercising them within the scope permitted by the applicable law and in accordance with the provisions of the Company's statutes. In the reporting period, the Company held one regular and two extraordinary General Meetings of Shareholders, complying with all the requirements of Art. 115 et seq. of the POSA, announcing the decision for its convention and publishing the invitation together with the materials thereto in the manner specified by the law. The shareholders were guaranteed the opportunity to add new items to the agenda under Art. 223a of the Commercial Act. The Statutes of the ALLTERCO AD CORPORATE GOVERNANCE STATEMENT UIC 201047670 This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail. 42 Company provide for the invitation to the General Meeting to contain the information required under the Commercial Act and POSA, as well as additional information on exercising the right to vote and the possibility to add new items to the agenda under Art. 223a of the CA. The corporate management ensures that all shareholders are informed about their rights through the information publishing system and the Company's website, the announced Statutes of the Company and invitations for each General Meeting of Shareholders together with the materials to it.
All shareholders are informed about the rules according to which General Meetings of Shareholders are convened and held, including the voting procedures, through the Statute of the Company and invitations for each General Meeting of Shareholders. The Board of Directors provides sufficient and timely information on the date and place of the General Meeting, as well as complete information on the issues to be discussed and resolved at the Meeting. The invitation and materials for the General Meeting of Shareholders are announced to the public through the selected media agencies, the Financial Supervision Commission and the regulated securities market. After presenting the invitation and the materials for the General Meeting of Shareholders, they are also made available on the Company's website. The Company’s management maintains a database with contact information of its shareholders owning 5% or more of the Company’s capital, allowing direct messages to be sent to them or to a person designated by them, when necessary. The Company's corporate management ensures that all shareholders are able to express their opinion and ask questions during the General Meeting. Shareholders with voting rights have the opportunity to exercise their voting rights at the General Meeting of the Company in person or through representatives and voting by correspondence might be allowed for a specific General Meeting of the Shareholders. As part of the materials for the General Meeting of Shareholders, the Board of Directors provides a sample power of attorney. The Company indicates the Rules for voting by proxy and the Rules for voting by correspondence (when applicable) in the content of the invitation or as a separate document - part of the materials to it. The Board of Directors has undertaken all necessary actions to bring the Company’s activities in line with the recommendations of the Code. The Statutes of the Company allow exercising the right to vote by electronic means and/or by correspondence by decision and rules determined by the Board of Directors in the invitation to convene a General Meeting. The Board of Directors exercises effective control by creating the necessary organization for the voting of the authorized persons in accordance with the instructions of the shareholders and in the ways permitted by law. The Board of Directors appoints a mandate commission, which registers the shareholders for each General Meeting and proposes to the General Meeting to appoint a Chairperson, Secretary and Vote Tellers. The management of the General Meeting strictly monitors the lawful conduct of the General Meeting, including the manner of voting of the authorized persons. When differences are noticed in the will of the principal and the vote of the authorized person, this circumstance is entered in the minutes and the will of the principal is taken into account accordingly. The Board of Directors has not prepared and adopted a specific policy for the organization and holding of ordinary and extraordinary General Meetings of Shareholders, but at the same time monitors compliance with the principles of equal treatment of all shareholders and the right of each shareholder to express their opinion on the items on the agenda of the General Meeting. The Board of Directors prepares Rules for voting by proxy and Rules for voting by correspondence (when applicable) to the materials for convening General Meetings. The Board of Directors organizes the procedures and order for holding the General Meeting of Shareholders in a way that does not complicate or increase the cost of voting unnecessarily. The Board of Directors encourages the participation of shareholders in the General Meeting of Shareholders but has not provided the opportunity for remote presence through technical means (including the Internet), due to the lack of economic grounds for such a method of participation in the General Meeting. ALLTERCO AD CORPORATE GOVERNANCE STATEMENT UIC 201047670 This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail. 43 Insofar as the members of the Company's Board of Directors spend most of their time outside the country, it is not always possible to ensure the presence of all of them at the General Meetings of Shareholders, but some of them, including at least one executive director, are present at the General Meetings of the Company's shareholders.
The texts in the written materials related to the agenda of the General Meeting are specific and clear and do not mislead the shareholders. All proposals regarding major corporate events are presented as separate items on the agenda of the General Meeting, incl. the profit distribution proposal. The Company maintains a special section on its website regarding the rights of shareholders and their participation in the General Meeting of Shareholders. The Board of Directors assists the shareholders entitled under the current legislation to include additional items and to propose resolutions for items already included on the agenda of the General Meeting, by performing all necessary legal and factual actions to announce the additional items added to the agenda of the already convened General Meeting.# ALLTERCO AD CORPORATE GOVERNANCE STATEMENT
UIC 201047670
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail.
The Board of Directors has adopted a policy for disclosure of information (financial and non-financial) in accordance with the legal requirements and the Statutes of the Company. In accordance with the adopted policy, the corporate management has created and maintains a system for disclosure of information. The information disclosure system ensures equality of the addressees of information (shareholders, stakeholders, investment community) and does not allow misuse of inside information. The information disclosure system ensures complete, timely, accurate and understandable information, enabling taking objective and informed decisions and assessments. The inside information is disclosed in the legally established forms, order and terms through the selected media agencies. The Company uses a single point to disclose information by electronic means, thus the information reaches the public, FSC and the regulated securities market in unmodified form. Information in unmodified form and volume is also published on the Company’s website. In this way, the Company’s executive management ensures that the information disclosure system provides complete, timely, accurate and understandable information, allowing taking objective and informed decisions and assessments.
The Executive Management and the Board of Directors promptly disclose the Company’s capital structure and agreements that lead to exercising control in accordance with its disclosure rules. Disclosure is made through the provisions of the Public Offering of Securities Act and the acts for its implementation, as well as the applicable European regulation. The Board of Directors ensures, by exercising control over the implementation of the disclosure policy, that the rules and procedures according to which the acquisition of corporate control and extraordinary transactions such as mergers and sale of significant parts of assets are clearly and timely disclosed. The Board of Directors approves and together with the independent auditor controls internal rules for the preparation of the annual and interim reports and the procedure for disclosure of information.
The Company maintains a website - www.allterco.com with approved content, scope and frequency of the information disclosed through it. The content of the Company's website fully covers the recommendations of the National Corporate Governance Code. The Company also maintains an English language version of the corporate website with the same content. The Company periodically discloses information about the corporate governance. The Company’s Board of Directors believes that its activities in the reporting period created prerequisites for sufficient transparency in its relations with investors, financial media and capital market analysts. In the reporting period, the Company disclosed all regulated information within the deadlines and in accordance with the procedure provided for in the Public Offering of Securities Act and the acts on its implementation.
Insofar as the Company has no obligation for non-financial reporting, the corporate management has not adopted rules to ensure disclosure on an annual basis of non-financial information in accordance with the national legislation and applicable European law. As part of the information disclosure system, the Company has developed and maintains a corporate website with approved content, scope and frequency of information disclosure, which includes the recommended minimum required information according to the National Corporate Governance Code. The Company also maintains an English version of the website. The Company periodically discloses information on corporate governance by annually updating this Corporate Governance Statement as part of the annual financial statements. Corporate management ensures the disclosure of any significant periodic and ad-hoc information about the Company through channels that provide equal and timely access to relevant information to users.
The corporate management is committed to establishing specific actions and policies regarding the sustainable development of the Company, but at present, given the lack of a legal requirement for this, it does not disclose information related to the climate and social aspects of the Company's activities. The corporate management ensures effective interaction with stakeholders. This category includes certain groups of persons who are directly affected by the Company and who in turn can influence its activities. The Company identifies as stakeholders in relation to its activities based on their degree and spheres of influence, role and relation to its sustainable development. The Company, through its subsidiaries, regularly communicates with the various groups of stakeholders non-financial information in connection with corporate socially responsible practices established at the Company. In its policy regarding stakeholders, the Company complies with the legal requirements based on the principles of transparency, accountability and business ethics. The corporate management ensures that all stakeholders are sufficiently informed of their statutory rights. As at the end of the reporting period, the corporate management has not developed specific policies to address stakeholder interests, but is committed to taking appropriate action to comply with this requirement in 2023. The corporate management is committed to establishing specific actions and policies regarding the sustainability of the Company.
The corporate management maintains effective relations with stakeholders and is prepared to disclose, when necessary in compliance with legal standards and good international practices, non-financial information on economic, social and environmental issues of concern to stakeholders, such as: anti-corruption; dealing with employees, suppliers and customers; the Company's social responsibility; environmental protection and human rights violations. The corporate management ensures the right to timely and regular access to relevant, sufficient and reliable information about the Company when stakeholders are involved in the corporate governance process.
When describing the main characteristics of the internal control and risk management systems, the fact that neither POSA nor the National Code for Corporate Governance define an internal control framework for public companies in Bulgaria to follow shall be taken into account. Therefore, for the purposes of fulfilling the Company’s obligations under Art. 100n, para. 8, item 4 of the POSA, in the description of the main characteristics of the system, the framework of the International Auditing Standard 315 was used. General description of the internal control and risk management system, the control environment, the Company's risk assessment process, the information system and related business processes essential for financial reporting and communication, as well as the ongoing monitoring of controls are listed in item 15.15 of the Report on the Activity.
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail.
ALLTERCO AD has no shareholders with special control rights.
There are no restrictions on the voting rights of the shareholders of ALLTERCO AD. To participate in the General Meeting, shareholders must be identified with the documents provided for in the law, the Articles of Association and the invitation to the General Meeting, certifying their identity and representative authority, and be registered by a mandate commission in the list of attending shareholders prior to the starting time of the General Meeting.
Pursuant to the provisions of the Company's Articles of Association, the General Meeting of Shareholders determines the number, elects and dismisses the members of the Board of Directors and determines their remuneration. Pursuant to Art. 25, para. 1 of the Company's Articles of Association, the Board of Directors’ mandate is determined by the General Assembly, but it cannot be longer than 5 years. The General Meeting of Shareholders may at any time decide to make changes in the number and composition of the Board of Directors, and the members of the Board may be re-elected without limitation. A member of the Board of Directors can be any individual or legal entity that meets the requirements of the law and has the necessary professional qualifications related to the Company's activities.
The Board of Directors of ALLTERCO AD has the following powers:
Discusses and resolves all issues, except those that are within the exclusive competence of the General Meeting of Shareholders, explicitly related, but not limited to:
(i) plans and programs for the Company's activities;
(ii) organizational structure of the Company;
(iii) participation in tenders and competitions;
(iv) adopts the rules for the Board of Directors’ activities, as well as changes to these rules;
(v) election and dismissal of its Executive Members;
(vi) acquisition by the Company of interests in other companies;
(vii) opening and closing branches of the Company in the country and abroad;
(viii) acquisition and disposal of real estate and limited real estate rights owned by the Company;
(ix) establish a mortgage on Company’s real estate or a pledge on fixed tangible assets of the Company;
(x) granting loans to non-related third parties, providing guarantees, taking out guarantees and providing collaterals for obligations of non-related third parties, signing bank credit agreements for amounts (excluding interest and expenses) exceeding 3% ( three percent) the amount of the Company’s consolidated revenues reported in the last audited annual financial statements of the Company;
(xi) operating or finance lease contracts for amounts exceeding BGN 250,000 (excluding interest and expenses due) sighed by the Company;
(xii) disposal of intellectual property rights, including the acquisition, sale and assignment of licenses to use patents, know-how and other intellectual property rights (except for intellectual property rights granted to third parties with regard to the provision of products and services of end users, within the Company's scope of activity);
(xiii) determining the conditions for the appointment and acceptance of financial incentive programs on an annual basis for key management personnel of the Company's subsidiaries, namely executive directors, procurators and managers of the Company's subsidiaries;
(xiv) to constitute and reconstitute the Advisory Board, to make decisions on all issues concerning the Advisory Board, except those previously determined by these Articles of Association or by a decision of the General Meeting of Shareholders, including, but not limited to: determining the numerical and personal composition of the Advisory Board with the right to appoint and dismiss its members at its discretion, the term of its existence, the remuneration and tenure of its members, to adopt, amend, revoke and monitor the implementation of all and any documents relating to the Advisory Council, including Rules of the Advisory Council’s functions.
The Board of Directors makes decisions for and authorises the individuals who manage and/or represent the Company in making transactions with interested parties under Art. 114, para. 2 of the POSA, for which no prior authorisation by the General Meeting of Shareholders is required.
By Decision of the General Meeting of Shareholders dated October 15, 2021, the Board of Directors is authorised for a period of up to five years from June 27, 2019. The Board of Directors has the right to make decisions to increase the Company's capital using any of the provided in para. 1 methods, with the exception of converting part of the profit into capital until reaching a total nominal amount of BGN 25 million (twenty-five million Bulgarian leva) through the issuance and public offering of up to 10,000,000 (ten million) new dematerialized, ordinary, registered voting shares with a nominal value of BGN 1 (one) each and an issue value for one share determined by an explicit decision of the Company's Board of Directors. The restrictions set out above are generally applied regardless of which of the methods provided for in para. 1 above , was used to increase the capital.
The Company can repurchase own shares without making a tender offer when acquiring in one calendar year no more than 3 percent of own voting shares by decision of the General Meeting of Shareholders for a period not longer than eighteen months from the date of the decision of the relevant body of the Company. The Company may repurchase own shares by decision of the General Meeting of Shareholders for the purposes of implementing incentive bonus programs for employees within its economic group with shares from the capital and schemes for providing variable remuneration to the executive members of the Board of Directors in shares, in accordance with the remuneration policy for the members of the Company’s Board of Directors.
ALLTERCO AD has a one-tier management system. The Company is managed and represented by a Board of Directors, which, as of the date of preparation of this Declaration, has the following members, according to a decision of the General Meeting of Shareholders held on April 8, 2022:
The Board of Directors of ALLTERCO AD elects the Chairperson and a Deputy Chairperson from its members. The Board of Directors holds regular meetings at least once every three months to discuss the position and development of the Company. Each member of the Board of Directors may request the Chairperson to call a meeting to discuss specific issues. Decisions of the Board of Directors are made by a majority of more than half of all members of the Board of Directors. A quorum at the meetings of the Board of Directors is present if the number of members present at the meeting is sufficient to make decisions on the issues of the agenda. In the event that a quorum is not available for any of the issues requiring a qualified majority, the lack of quorum is noted in the minutes and this issue is not considered at the meeting. The Board of Directors can make decisions in absentia.
The Company has an audit committee elected by the Annual General Meeting of Shareholders consisting of:
* Anelia Petkova Angelova - Tumbeva
* Marian Nikolov
* Albena Benkova Beneva
The Audit Committee performs its functions in accordance with the Articles of Association adopted by the Annual General Meeting of Shareholders and the requirements of the Independent Financial Audit Act.The members of the Audit Committee, Marian Nikolov and Albena Beneva, have applied for their release from the Audit Committee for personal reasons, and in compliance with the legal requirements, new replacement applicants will be reviewed at the next General Meeting of Shareholders. The Company's Articles of Association provide for the possibility of establishing an Advisory Board by decision of the Board of Directors. The Advisory Board is a collective advisory body that assists the members of the Board of Directors and the senior management of the Company, based on the expertise of each of its members and according to the goals set by the Board of Directors during its constitution, to prepare and provide strategic guidelines and programs for development of the Company: (i) to monitor the activity and results of the Company's activity, prepare reports and make suggestions for improvement of some aspects of its activity; ALLTERCO AD CORPORATE GOVERNANCE STATEMENT UIC 201047670 This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail. 48 (ii) to provide information regarding current developments and trends in the business sector in which the Company operates; (iii) to provide information on innovative practices, as well as to recommend and develop programs for the implementation of such practices in the Company's activities; (iv) to propose improvements regarding the products and/or services offered by the Company, as well as development of new ones; (v) to propose strategies to improve the Company's positions on the current markets in which it operates, to explore opportunities to access new markets, as well as to implement new market mechanisms ; (vi) to perform any other activity assigned to him by the Board of Directors, which is in the interest of the Company’s development. The Advisory Board explicitly will not and cannot be assigned any management, supervisory or control functions. The members of the Advisory Board have the right to access information belonging to the Company in a volume determined by the Board of Directors and subject to compliance with the requirements for handling such information no less restrictive than the requirements applicable to the members of the Board of Directors. In accordance with the latest amendments to the Articles of Association, adopted on October 15, 2021, the Board of Directors decided to form an Advisory Board and appointed Mr. Gregor Bieler as its chairman. Due to the subsequent election of Mr. Gregor Bieler as an independent member of the Board of Directors, an incompatibility with his function as Chairman of the Advisory Board has arisen and he has announced his withdrawal from this position. Due to the lack of members for more than 6 months, the Board of Directors has decided to suspend the Advisory Board and there is no such body operating in the Company as at the end of the reporting period.
with regard to aspects such as age, gender or education and professional experience, the objectives of this diversity policy, the application approach and the results from the reporting period; where no such policy applies, the declaration shall contain an explanation as to why.
The Company has not developed a special diversity policy regarding the administrative, management and supervisory bodies of the Company related to aspects such as age, gender or education and professional experience, as it falls under the exceptions of Art. 100n, para. 12 of the Public Offering of Securities Act (POSA). However, there are long-established practices that can be classified as diversity policy relating to the management bodies with regard to aspects such as age, gender or education and professional experience. In essence, these practices form the Company's diversity policy of the management bodies in relation to aspects such as age, gender or education and professional experience. Adopted practices require that the Company implements a balanced policy for nominating members of the corporate management who have education and qualifications that correspond to the nature of the Company's activity, its long-term goals and business plan. The practices adopted by the Company encourage the pursuit for gender balance at all management levels. The Company does not discriminate against members of corporate management based on age.
...................................................................
Dimitar Dimitrov
Executive Director of ALLTERCO AD
ALLTERCO AD
UIC 201047670
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail. 49
We, the undersigned, DIMITAR STOYANOV DIMITROV, in my capacity as Executive Director of ALLTERCO AD and SVETOZAR GOSPODINOV ILIEV, in my capacity as Chief Financial Officer of ALLTERCO AD
Hereby DECLARE that to the best of our knowledge:
Declarants:
......................................
Dimitar Dimitrov
Executive Director
......................................
Svetozar Iliev
Chief Financial Officer
(Unofficial translation of the original in Bulgarian)
UIC 201047670
All amounts are in thousand Bulgarian leva unless otherwise stated
The consolidated statement of financial position shall be read together with the accompanying notes on pages 7-71. The notes are an integral part of these consolidated financial statements.
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail.
Page 2 of 71
| ASSETS | Note | December 31, 2022 | December 31, 2021 (restated) |
|---|---|---|---|
| Non-current assets | |||
| Property, plant and equipment | 3.01 | 4 653 | 4 798 |
| Intangible assets | 3.02 | 4 220 | 3 116 |
| Right-of-use assets | 3.03 | 296 | 108 |
| Advance payments for asset acquisition | - | 19 | |
| Goodwill | 3.04 | 160 | 160 |
| Investments in associates | 3.05 | 158 | 40 |
| Other capital investments | 3.06 | 830 | 2 624 |
| Trade receivables | 3.07 | 1 027 | 2 054 |
| Deferred tax assets | 3.08 | 348 | 72 |
| Total non-current assets | 11 692 | 12 991 | |
| Current assets | |||
| Inventory | 3.09 | 23 002 | 7 560 |
| Trade receivables | 3.10 | 21 647 | 19 167 |
| Other receivables | 3.11 | 3 622 | 1 912 |
| Short-term financial assets | 3.12 | 175 | - |
| Cash and cash equivalents | 3.13 | 28 148 | 30 541 |
| Prepaid expenses | 3.14 | 512 | 234 |
| Total current assets | 77 106 | 59 414 | |
| TOTAL ASSETS | 88 798 | 72 405 |
Date: May 2, 2023
Preparer:
Executive Director: /Sylvia Ivanova Tomova/ /Dimitar Stoyanov Dimitrov/
Desislava Dinkova
Registered auditor in charge of the audit
Statutory Manager at Deloitte Audit OOD
Registration number 033 in the Register under Art. 20 of IFAA
UIC 201047670
All amounts are in thousand Bulgarian leva unless otherwise stated
The consolidated statement of financial position shall be read together with the accompanying notes on pages 7-71. The notes are an integral part of these consolidated financial statements.
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail.
Page 3 of 71
| LIABILITIES | Note | December 31, 2022 | December 31, 2021 (restated) |
|---|---|---|---|
| Non-current liabilities | |||
| Bank loans | 3.15 | 1 488 | 2 007 |
| Lease liabilities | 3.16 | 157 | 80 |
| Retirement benefit obligations | 3.17 | 112 | - |
| Total non-current liabilities | 1 757 | 2 087 | |
| Current liabilities | |||
| Bank loans | 3.15 | 668 | 572 |
| Lease liabilities | 3.16 | 161 | 58 |
| Trade payables | 3.18 | 1 891 | 1 557 |
| Payables to employees | 3.19 | 1 837 | 173 |
| Payables to social security obligations | 3.19 | 204 | 115 |
| Tax payables | 3.20 | 2 074 | 1 315 |
| Other liabilities | 3.21 | 1 098 | 1 026 |
| Deferred income | 36 | - | |
| Total current liabilities | 7 969 | 4 816 | |
| TOTAL LIABILITIES | 9 726 | 6 903 | |
| EQUITY | |||
| Share capital | 3.22 | 18 000 | 18 000 |
| Purchased own shares | (780) | - | |
| Retained earnings | 3.23 | 55 117 | 39 324 |
| Legal reserves | 3.24 | 1 800 | 1 800 |
| Premium reserve | 3.25 | 5 403 | 5 403 |
| Revaluation reserve | 3.26 | (507) | 1 036 |
| Exchange differences from translation of foreign subsidiaries’ financial statements | 39 | (61) | |
| TOTAL EQUITY | 79 072 | 65 502 | |
| TOTAL EQUITY AND LIABILITIES | 88 798 | 72 405 |
Data: May 2, 2023
Preparer:
Executive Director /Sylvia Ivanova Tomova/ /Dimitar Stoyanov Dimitrov/
Desislava Dinkova
Registered auditor in charge of the audit
Statutory Manager at Deloitte Audit OOD
Registration number 033 in the Register under Art. 20 of IFAA
UIC 201047670
All amounts are in thousand Bulgarian leva unless otherwise stated
The consolidated statement of comprehensive income shall be read together with the accompanying notes on pages 7-71. The notes are an integral part of these consolidated financial statements.
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail.# CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
| Note | Year ended December 31, 2022 | Year ended December 31, 2021 (restated) |
|---|---|---|
| Sales revenue | 93 178 | 59 509 |
| Cost of sales | (46 327) | (26 722) |
| Gross profit | 46 851 | 32 787 |
| Other operating income | 1 012 | 1 358 |
| Sales expenses | (3 981) | (2 696) |
| Administrative expenses | (20 435) | (12 088) |
| Impairment expense | (1 885) | (334) |
| Other operating expenses | (1 185) | (531) |
| Profit from operating activity | 20 377 | 18 496 |
| Finance income | - | 250 |
| Finance expense | (265) | (126) |
| Share of associated companies’ profit | 118 | 32 |
| Profit before tax | 20 230 | 18 652 |
| Income tax expense | (2 797) | (2 760) |
| Net profit | 17 433 | 15 892 |
| Other comprehensive income: | ||
| Items, that will not be reclassified to profit or loss | ||
| Other long-term capital instruments | (1 383) | (3 573) |
| Exchange differences from translation of foreign subsidiaries’ financial statements | 100 | (95) |
| Exchange differences of written-off investments | - | (246) |
| Other comprehensive income for the period after taxes | (1 283) | (3 914) |
| TOTAL COMPREHENSIVE INCOME FOR THE PERIOD | 16 150 | 11 978 |
| Earnings per share | 0.97 | 0.88 |
Date: May 2, 2023
Preparer: Executive Director /Sylvia Ivanova Tomova/ /Dimitar Stoyanov Dimitrov/ Desislava Dinkova
Registered auditor in charge of the audit
Statutory Manager at Deloitte Audit OOD
Registration number 033 in the Register under Art. 20 of IFAA
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
UIC 201047670
FOR THE YEAR ENDED DECEMBER 31,
All amounts are in thousand Bulgarian leva unless otherwise stated
The consolidated statement of changes in equity shall be read together with the accompanying notes on pages 7-71. The notes are an integral part of these consolidated financial statements. This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail.
| Share capital | Retained earnings | Revaluation reserve | Premium reserve | Legal reserves | Repurchased own shares | Exchange differences from translation of foreign subsidiaries’ financial statements | Total | Non- controlling interests | Total equity | |
|---|---|---|---|---|---|---|---|---|---|---|
| Balance at January 1, 2021 | 18 000 | 26 938 | 4 849 | 5 703 | 1 500 | (138) | 280 | 57 132 | (296) | 56 836 |
| Legal reserves replenishment | - | - | - | (300) | 300 | - | - | - | - | - |
| Net profit | - | 15 892 | - | - | - | - | - | 15 892 | - | 15 892 |
| Other comprehensive income | - | - | (3 573) | - | - | - | (341) | (3 914) | - | (3 914) |
| Other adjustments | - | 240 | (240) | - | - | - | - | - | - | - |
| Dividends distribution | - | (3 600) | - | - | - | - | - | (3 600) | - | (3 600) |
| Sale of repurchased own shares | - | - | - | - | - | 138 | - | 138 | - | 138 |
| Change in non-controlling interest | - | (296) | - | - | - | - | - | (296) | 296 | - |
| Effect from sale of subsidiaries | - | 150 | - | - | - | - | - | 150 | - | 150 |
| Balance at December 31, 2021 (restated) | 18 000 | 39 324 | 1 036 | 5 403 | 1 800 | - | (61) | 65 502 | - | 65 502 |
| Balance at January 1, 2022 | 18 000 | 39 324 | 1 036 | 5 403 | 1 800 | - | (61) | 65 502 | - | 65 502 |
| Total comprehensive income, net, incl. | - | 17 433 | (1 383) | - | - | - | 100 | 16 150 | - | 16 150 |
| Net profit | - | 17 433 | - | - | - | - | - | 17 433 | - | 17 433 |
| Other comprehensive income, gross | - | - | (1 439) | - | - | - | 100 | (1 339) | - | (1 339) |
| Deferred tax | - | - | 56 | - | - | - | - | 56 | - | 56 |
| Repurchased own shares (40 000 shares) | - | - | - | - | - | (780) | - | (780) | - | (780) |
| Dividends (BGN 0.10 per share) | - | (1 800) | - | - | - | - | - | (1 800) | - | (1 800) |
| Other adjustments | - | 160 | (160) | - | - | - | - | - | - | - |
| Balance at December 31, 2022 | 18 000 | 55 117 | (507) | 5 403 | 1 800 | (780) | 39 | 79 072 | - | 79 072 |
Date: May 2, 2023
Preparer: Executive Director /Sylvia Ivanova Tomova/ /Dimitar Stoyanov Dimitrov/ Desislava Dinkova
Registered auditor in charge of the audit
Statutory Manager at Deloitte Audit OOD
Registration number 033 in the Register under Art. 20 of IFAA
CONSOLIDATED STATEMENT OF CASH FLOWS
UIC 201047670
FOR THE YEAR ENDED DECEMBER 31, 2022
All amounts are in thousand Bulgarian leva unless otherwise stated
The consolidated statement of cash flows shall be read together with the accompanying notes on pages 7-71. The notes are an integral part of these consolidated financial statements. This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail.
| Note | Year ended December 31, 2022 | Year ended December 31, 2021 | |
|---|---|---|---|
| Cash flows from operating activities | |||
| Proceeds from customers | 83 914 | 57 364 | |
| Payments to suppliers | (65 109) | (36 973) | |
| Taxes paid | (4 621) | (3 054) | |
| Corporate tax paid | (2 660) | (2 087) | |
| Payments to employees and social security institutions | (10 879) | (6 972) | |
| Other payments, net | (374) | (139) | |
| Net cash flows from operating activities | 271 | 8 139 | |
| Cash flows from investing activities | |||
| Cash flows related to non-current tangible and intangible assets | (2 176) | (1 583) | |
| Cash flows from sale of property, plant and equipment | - | 44 | |
| Proceeds from the sale of investments | 2 798 | 2 054 | |
| Purchase of investments | (130) | (18) | |
| Net cash flows from investing activities | 492 | 497 | |
| Cash flows from financing activities | |||
| Repurchased own shares | (780) | - | |
| Lease payments | (104) | (75) | |
| Loans repaid | (510) | (502) | |
| Cash flows related to interest and commissions | (61) | (73) | |
| Dividends paid | (1 800) | (3 600) | |
| Other payments, net | (71) | (45) | |
| Net cash flows used in financing activities | (3 326) | (4 295) | |
| Net increase/(decrease) in cash and cash equivalents for the year | (2 563) | 4 341 | |
| Net exchange differences | 170 | 150 | |
| Cash and cash equivalents at the beginning of the year | 30 541 | 26 050 | |
| Cash and cash equivalents at the end of the year | 3.13 | 28 148 | 30 541 |
Date: May 2, 2023
Preparer: Executive Director /Sylvia Ivanova Tomova/ /Dimitar Stoyanov Dimitrov/ Desislava Dinkova
Registered auditor in charge of the audit
Statutory Manager at Deloitte Audit OOD
Registration number 033 in the Register under Art. 20 of IFAA
UIC 201047670
All amounts are in thousand Bulgarian leva unless otherwise stated
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail.
UIC 201047670
All amounts are in thousand Bulgarian leva unless otherwise stated
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail. Page 8 of 71
UIC 201047670
All amounts are in thousand Bulgarian leva unless otherwise stated
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail.
Page 9 of 71
Allterco AD (the Parent Company), Sofia, is entered in the Commercial Register of the Registry Agency with UIC (Unified Identification Code) as per BULSTAT: 201047670 and LEI code 8945007IDGKD0KZ4HD95. The Parent Company is with seat and registered office in Bulgaria, 1407 Sofia, 103 Cherni vrah Blvd. No changes to the company name, seat and registered office were made during the reporting period. The initial registered fixed capital was BGN 50 000 (fifty thousand) by contribution of shares. Subsequently by another contribution the capital was increased up to BGN 5,488,000 (five million four hundred and eighty-eight thousand), distributed in 5,488,000 ordinary registered voting shares with nominal value of BGN 1.00 each. At the end of 2015, the capital was increased to BGN 13,500 thousand through cash and non-cash contributions. At the end of 2016, the capital was increased to BGN 15,000 thousand after the successful Initial Public Offering on the Bulgarian Stock Exchange. In 2020, the capital was increased to BGN 18,000 thousand as a result of a procedure for Secondary Public Offering of a new issue of shares, carried out in the period September 28, 2020 – October 30, 2020 on the grounds of a Prospectus, together with the supplements to it, confirmed by the Financial Supervision Commission with Decision no. 148- Е of February 18, 2020, Decision no. 405-E of June 11, 2020, Decision no. 601-E of August 13, 2020 and Decision no. 791-E of October 29, 2020. Since December 20216 the shares of Allterco AD are traded on the Bulgarian Stock Exchange and since November 22, 2021 the Company’s shares are traded on the Frankfurt Stock Exchange. The Parent Company is managed by the Board of Directors and is represented jointly or separately by Svetlin Todorov, Wolfgang Kirsch and Dimitar Dimitrov.
The Allterco Group (the Group) includes Allterco AD (the Parent Company) and its subsidiaries, in which the Parent Company has controlling interest directly or through another subsidiary. Allterco AD is a public company in Bulgaria under the Public Offering of Securities Act. The distribution of the share capital of Allterco AD as of December 31, 2021, is as follows:
| Name | Number of shares | % of the capital |
|---|---|---|
| Svetlin Todorov | 5 847 120 | 32.48% |
| Dimitar Dimitrov | 5 847 120 | 32.48% |
| Persons holding less than 5% of the capital | ||
| Other physical persons and legal entities | 6 305 759 | 35.04% |
| Total | 17 999 999 | 100.00% |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2022
UIC 201047670
All amounts are in thousand Bulgarian leva unless otherwise stated
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail.
Page 10 of 71
On June 30, 2022, Allterco AD acquired 40,000 own shares at a price of BGN 19.50 per share, representing 0.22% of its registered capital through over-the-counter transactions (OTC transactions) from two independent shareholders. The shares are intended to provide payment of part of the acquisition price of the Slovenian IoT company GOAP d.o.o. Nova Gorica (GOAP). The composition of the Board of Directors as at December 31, 2022 is as follows:
The members of the Board of Directors represent the Company jointly or separately.
The scope activity of Allterco AD includes the acquisition, management, evaluation and sale of participations in Bulgarian and foreign companies; acquisition, management and sale of bonds; acquisition, evaluation and sale of patents, assignment of licenses for the use of patents to companies in which the Parent Company participates; financing of companies in which the Parent Company participates. The Group includes companies engaged in the development, production and trading in smart (IoT) devices and real estate management.
As of December 31, 2022 the Group includes Allterco AD and the following subsidiaries in the country and abroad, which it controls:
| Company name | December 31 2022 | December 31 2021 |
|---|---|---|
| Percentage of participation | Percentage of participation | |
| In the country | ||
| ALLTERCO TRADING OOD (Ltd.) | 100% | 100% |
| ALLTERCO ROBOTICS EOOD (Solely-owned LLC) | 100% | 100% |
| ALLTERCO PROPERTIES EOOD (Solely-owned LLC) | 100% | 100% |
| Company name | December 31 2022 | December 31 2021 |
| Percentage of participation | Percentage of participation | |
| Abroad | ||
| SHELLY USA (formerly ALLTERCO ROBOTICS INC), USA | 100% | 100% |
| ALLTERCO EUROPE GMBH, Germany | 100% | 100% |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2022
UIC 201047670
All amounts are in thousand Bulgarian leva unless otherwise stated
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail.
Page 11 of 71
At the beginning of 2021, Allterco AD acquired a stake in a newly established (associated) company in China - Allterco Asia Ltd. with seat and registered office in Shenzhen, Guangdong Province. The share capital of the new company is CNY 100,000, with the participation of Allterco AD being 30% (BGN 8,000) with the possibility of acquiring additional 50% and reaching a controlling stake of up to 80% at the management’s discretion. In September 2021, Allterco sold its stake in three Asian subsidiaries. In December 2021, Allterco AD established a new subsidiary in Germany. The name of the new company is Allterco Europe GmbH and has share capital of EUR 500,000, which is 100% held by Allterco AD. In the first quarter of 2022, Allterco AD increased the share capital of its subsidiary Allterco Robotics EOOD. The capital increase is intended to accelerate the development of new products, expand production capacity and enter new markets, as well as R&D activities. The share capital of Allterco Robotics EOOD was increased from BGN 1 500 000 to BGN 7 000 000 through subscription of new 5 500 000 company shares with a nominal value of BGN 1.00 each. On June 15, 2022 the Board of Directors of Allterco AD took a decision to provide additional funding to the US subsidiary Shelly USA amounting to USD 1.5 million, partially through capital increase in the amount of USD 500 000 and partially through an additional cash contribution in the amount of USD 1 million, for a period of 1 year, at an annual interest rate of 1%. At the end of the reporting period, Allterco AD has made an additional cash contribution amounting to BGN 1 834 thousand (USD 1 million) to its subsidiary Shelly USA, which was granted for a period of one year with an annual interest rate of 1.0%. As at the date of these statements, the money transfer for the subsidiary’s capital increase by BGN 921 thousand (USD 500 thousand) was completed. In November 2022, the subsidiary Allterco Robotics EOOD opened a branch in the Republic of Ireland.
The Group keeps its current accounting and prepares its financial statements in accordance with the requirements of the Bulgarian commercial and accounting legislation. These consolidated financial statements have been prepared in accordance with the requirements of the International Accounting Standards (IAS), published by the International Accounting Standards Board (IASB) and adopted by the European Union.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2022
UIC 201047670
All amounts are in thousand Bulgarian leva unless otherwise stated
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail.
Page 12 of 71
As of December 31, 2022, IASs comprises the International Financial Reporting Standards (IFRS) and the interpretations of the International Financial Reporting Interpretations Committee (IFRIC), approved by the International Accounting Standards Board (IASB), and the International Accounting Standards and Interpretations of the Standing Interpretations Committee (SIC), approved by the International Accounting Standards Committee (IASC) and adopted by the European Union (EU). IASB annually issues the standards and their explanations, which, after formal approval by the European Union, are effective for the year for which they were issued. However, many of these standards are not applicable to the Group’ s activities due to the specifics set in them.
The Group's management has complied with all standards and interpretations that are applicable to its activity and have been officially adopted by the EU as of the date of preparation of these consolidated financial statements.## NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2022
UIC 201047670
All amounts are in thousand Bulgarian leva unless otherwise stated
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail.
Page 13 of 71
At the date of authorisation of these financial statements, the following amendments to the existing standards were issued by IASB and adopted by the EU and which are not yet effective:
At present, IFRS as adopted by the EU do not significantly differ from regulations adopted by the International Accounting Standards Board (IASB) except for the following new standards and amendments to the existing standards, which were not endorsed for use in EU as at the date of publication of these financial statements (the effective dates stated below is for IFRS as issued by IASB):
Page 14 of 71
The Group anticipates that the adoption of these new standards and amendments to the existing standards will have no material impact on the financial statements of the Group in the period of initial application.
Hedge accounting for a portfolio of financial assets and liabilities whose principles have not been adopted by the EU remains unregulated. According to the Group’s estimates, the application of hedge accounting to a portfolio of financial assets or liabilities pursuant to IAS 39 Financial Instruments - Recognition and Measurement would not significantly impact the financial statements, if applied as at the reporting date.
The consolidated financial statements of the Group have been prepared on the going concern principle, as it is expected that the Group shall continue its operating activity in near future.
A military conflict between Russia and Ukraine began in February 2022, but since the Group does not have transactions and accounts with customers from these two countries, management believes that this event is not expected to directly or indirectly affect the Group's results and financial position in the future.
Management has no plans or intentions to sell the business or cease operations, which could materially change the carrying amount or classification of assets and liabilities reported in the consolidated financial statements.
The assessment of assets and liabilities and the measurement of income and expenses is made in compliance with the historical cost principle. This principle is modified in specific cases by the revaluation of certain assets and/or liabilities to their fair value as of December 31 of the current year and December 31 of the previous year, as indicated in the relevant notes below.
The reporting currency for the elements of the consolidated financial statements is the Bulgarian lev (BGN), which is the functional currency of Allterco AD.
Page 15 of 71
The data in the elements of the consolidated financial statements and the notes thereto are presented in thousands of BGN, unless explicitly stated otherwise. The amounts over BGN 500 are rounded up to 1 thousand for disclosure in the consolidated financial statements and the notes.
The companies of the Group keep their accounting registers in the functional currency of the country in which they operate. The effects of exchange differences relating to the settlement of foreign currency transactions or the reporting of transactions in a foreign currency at rates that are different from those at which they were originally recognised shall be included in the statement of comprehensive income at the time they arise, treated as “ other operating income and expenses ” except those related to investments and loans denominated in foreign currency, which are presented as “finance income” and “finance expenses”.
Non -monetary assets and liabilities originally denominated in a foreign currency are accounted for in a functional currency using the historical exchange rate at the date of the transaction and subsequently not revalued at a closing rate.
According to the Bulgarian accounting legislation and IAS, the financial year ends on December 31 and enterprises are required to present annual financial statements as of the same date, together with comparative data as of that date for the previous year. If necessary, the data presented for the previous year are adjusted for better comparability with the data from the current period.
Prior period errors are omissions, misstatements or inconsistencies in the Group’s financial statements for prior periods arising as a result of omitted or misused reliable information. This is information that was available at the time of approval for issue of the financial statements or that was reasonably expected to be obtained and used in the preparation and presentation of those statements.
Prior period errors may arise in recognising, measuring, presenting or disclosing elements of the financial statements. They are adjusted retrospectively by restating comparative information or opening balances of assets, liabilities and equity (where they arose in prior periods for which information was not disclosed in the financial statements).# NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2022
UIC 201047670
All amounts are in thousand Bulgarian leva unless otherwise stated
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail.
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A transaction in foreign currency is recognized initially in the functional currency by applying the foreign currency exchange rate (spot) between the functional currency and the foreign currency at the time of the transaction or operation. At each date of financial statement preparation:
(a) monetary positions, receivables and payables denominated in foreign currency are recalculated into the functional currency using the exchange rate published by the BNB on the last business day of the respective month;
(b) non-monetary items held at historical cost in a foreign currency are translated using the exchange rate at the date of the transaction, if an exchange rate other than that of the transaction (average monthly, daily or other) is applied; and
(c) non-monetary items held at fair value in a foreign currency are recalculated using the exchange rates at the date when the fair value was determined.
Foreign currency exchange differences are recognized in accordance with IAS 21 the Effects of Changes in Foreign Exchange Rates.
The items of the consolidated statement of financial position and consolidated statement of comprehensive income of foreign companies of the Group, using a functional currency other than Bulgarian lev, are retranslated into BGN to be included in the consolidated statement of the Group as follows:
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2022
UIC 201047670
All amounts are in thousand Bulgarian leva unless otherwise stated
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail.
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The application of the IAS requires the Group's management to apply certain accounting assumptions and judgments when preparing the annual consolidated financial statements and when determining the value of some of the assets, liabilities, income, expenses and contingent assets and liabilities. All assessments are based on the management’s best judgment as of the date of preparation of these financial statements. Actual results could differ from those presented in these financial statements.
In preparing these financial statements, the management used judgments related to the following items:
Subsidiaries are the entities over which Allterco AD exercises control as defined in IFRS 10 Consolidated Financial Statements. The parent-company (the investor) controls the investee company if it has:
Subsidiaries are considered controlled starting from the date on which control is acquired by the Group and they cease to be consolidated on the date when it is assumed that the control has been lost.
Associated company is a company in which the Group has significant influence on decisions regarding operating and financial policies, but without being able to fully control those policies.
Non-controlling interest is valued at the proportionate share of identifiable net assets at the acquisition date.
The consolidated financial statements of the Group include the financial statements of the parent company and the subsidiaries. All assets, liabilities, capital, income, expenses and cash flows of the group companies are presented as such as they belong to just one entity.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2022
UIC 201047670
All amounts are in thousand Bulgarian leva unless otherwise stated
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail.
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Subsidiaries are those entities that are controlled by the parent company. Control occurs when the parent company exercises its rights on variable return arising from its participation in the subsidiary’s capital and has the ability to influence this return from investment through its power. The consolidated financial statements have been prepared following the same accounting policies with respect to similar transactions and business facts of all companies in the Group. All mutual interests, as well as significant internal transactions, balances and unrealized gains in the Group are eliminated and the financial statements are prepared using the full consolidation method. The financial results of operations of the subsidiaries are included in the consolidated financial statements from the date of acquisition of control over them and cease to be consolidated from the date on which such control is lost. When a subsidiary is acquired as a result of an internal group restructuring, its net assets and financial result are included from the beginning of the earliest accounting period presented in the financial statements.
The Group recognises revenue from the following major sources:
Revenue is measured based on the consideration to which the Group expects to be entitled in a contract with a customer and excludes amounts collected on behalf of third parties. The Group recognises revenue when it transfers control of a product or service to a customer.
The Group sells electronic devices both to the wholesale market and directly to customers through its own website and through direct sales. Sales-related warranties associated with the products cannot be purchased separately and they serve as an assurance that the products sold comply with agreed-upon specifications. Accordingly, the Group accounts for warranties in accordance with IAS 37 Provisions, Contingent Liabilities and Contingent Assets (see note 4.04).
For sales of electronic equipment to the wholesale market, revenue is recognised when control of the goods has transferred, being when the goods have been shipped to the wholesaler’s specific location (delivery). Following delivery, the wholesaler has full discretion over the manner of distribution and price to sell the goods, and bears the risks of obsolescence and loss in relation to the goods. A receivable is recognised by the Group when the goods are delivered to the wholesaler as this represents the point in time at which the right to consideration becomes unconditional, as only the passage of time is required before payment is due.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2022
UIC 201047670
All amounts are in thousand Bulgarian leva unless otherwise stated
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail.
Page 19 of 71
For sales of goods to retail customers, revenue is recognised when control of the goods has transferred, being at the point the customer purchases the goods. Payment of the transaction price is due when the customer receives the goods.
For internet sales, revenue is recognised when control of the goods has transferred to the customer, being at the point the goods are shipped to the customer’s specific location. When the customer initially purchases the goods online the transaction price received by the Group is recognised as a contract liability until the goods have been delivered to the customer. Under the Group’s standard contract terms, customers have a right of return within 14 days. The Group uses its accumulated historical experience to estimate the number of returns on a portfolio level using the expected value method.# NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2022
UIC 201047670
All amounts are in thousand Bulgarian leva unless otherwise stated
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail.
Page 20 of 71
Expenses for future periods shall be deferred for recognition as current expenses in the period in which the obligations under the contracts to which they refer, would be performed. Financial expenses consist of interest expenses and other direct costs related to loans as well as bank fees and losses from foreign currency exchange.
Property, plant and equipment (non-current tangible assets) are presented in the financial statements at acquisition cost (cost price) less accumulated depreciation and impairment losses.
Upon initial acquisition, property, plant and equipment are evaluated at acquisition cost (cost price), which includes the purchase price, including customs charges and any directly attributable costs of bringing the asset to working condition. The direct costs are as follows: costs of site preparation, costs of initial delivering and handling, installation costs, costs for personnel remuneration fees related to the project, non-refundable taxes, etc.
When acquiring property, plant and equipment on a deferred payment basis, the purchase price is equivalent to the present value of the liability, discounted on the basis of the interest rate on the borrowed resources of the Group with a similar maturity and purpose. The difference between the cash price equivalent and the total payment is recognized as interest over the course of the loan, unless it is capitalized in accordance with IAS 23.
The approach chosen by the Group for the subsequent measurement of property, plant and equipment is the acquisition cost model - less any subsequent depreciation and any accumulated impairment losses. For all other classes of non-current tangible assets, the company has applied the acquisition cost model.
The Company uses the straight-line method of depreciation of non-current tangible assets. Depreciation of assets begins when they are available for use. The useful life by groups of assets is determined in accordance with: physical wear and tear, specifics of the equipment, future intentions for use and actual obsolescence.
The useful life by classes of assets is as follows:
| Asset Class | Useful Life |
|---|---|
| Vehicles | 4 years |
| Buildings | 25 years |
| Computer equipment | 2-5 years |
| Office equipment | 5- 6,67 years |
| Other non-current tangible assets | 6,67 years |
The determined useful life of non-current tangible assets is reviewed at the end of each year and, if significant deviations are found against future expectations for the useful life of the assets, it is adjusted prospectively.
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The carrying amount of an item of property, plant and equipment is written off: when it is sold, when no other economic benefits are expected from its use, or when it is disposed. Gains or losses arising on the derecognition of an item of property, plant and equipment are included in the statement of comprehensive income when the asset is written off.
Gains and losses on disposals of non-current assets are determined when the proceeds from sale (disposal) are reduced by the book value of the asset and the costs related to the sale. They are stated net, to "Other operating income" in the statement of comprehensive income.
The amount of consideration to be included in the gain or loss arising from the derecognition of an item of property, plant and equipment is determined in accordance with the requirements for determining the transaction price in paragraphs 47– 72 of IFRS 15. Subsequent changes to the estimated amount of the consideration included in the gain or loss shall be accounted for in accordance with the requirements for changes in the transaction price in IFRS 15.
Intangible assets are presented in the financial statements at acquisition price (cost price) less accumulated depreciation and impairment losses. The Group applies a straight-line method of depreciation of intangible assets with a useful life of 2 years for the software products, 6.67 years for the software platform, 3 years for an ISO certificate.
The book value of the intangible assets is reviewed for impairment when there are events or changes in circumstances that indicate that the book value amount could exceed their recoverable amount. Then the impairment is included as an expense in the statement of comprehensive income.
Externally generated intangible assets on their acquisition are measured at acquisition price, which includes purchase price, import duties, non-refundable taxes and expenses of preparing the asset for its intended use. The direct expenses are: costs of employee benefits (as defined in IAS 19) arising directly from bringing the asset to its working condition; professional fees arising directly from bringing the asset to its working condition; costs of testing whether the asset is functioning properly, expenses for fees of persons related to the project, non-refundable taxes, etc.
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Intangible assets are recognized if they meet the definition of intangible assets set out in IAS 38 Intangible Assets, namely:
* Meet the definition of an intangible asset;
* Upon their acquisition they can be reliably measured;
* Economic benefits are expected from the use of the asset, as evidenced by the availability or plan to obtain sufficient resources to enable the Group to obtain the expected economic benefits; the ability to effectively perform its functional role in accordance with the intention of the Group regarding its use or there is a clearly defined and specified technical feasibility.
Expenses related to the maintenance of initially established standard efficiency, incurred after the commissioning of intangible non-current assets, are recognized as current at the time when they are incurred. The carrying amount of the respective intangible asset is adjusted by the expenses that lead to increase of the expected future economic benefits form the use of an intangible asset above the initially determined standard efficiency.
Goodwill is an asset representing the future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognised. Initially, it is presented in the consolidated financial statements at acquisition cost and subsequently it is presented at acquisition cost less impairment losses. Goodwill is not amortized.
The goodwill originating as a result of the acquisition of a subsidiary is presented in the consolidated statement of financial position as a part of non-current assets and the goodwill originating as a result of acquisition of joint-ventures or associated companies is included in the total value of investment and is reported as “investments in associated companies”. The goodwill associated with the acquisition of associated companies is tested as part of the total value of the investment.
Separately recognized goodwill on the acquisition of subsidiaries is tested mandatorily for impairment at least once annually. Impairment losses on goodwill are not reversed subsequently.
Gains or losses on sale (disposal) of a subsidiary of the Group also include the book value of the goodwill, associated with the sold (disposed) company. Any goodwill amount recognized in the financial statements is attributable to a certain cash generating object at the time a business combination is completed, and this object is applied when tests for impairment are conducted. For determining the cash-generating objects, are considered only objects that are expected to generate future economic benefits and that are subject to the business combination, which generated the goodwill.# NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2022
Other long-term financial investments are non-derivative financial assets in the form of shares and participation of other companies (minority interest) held with a long-term perspective.
Capital investments are initially recognized at acquisition cost, which is the fair value of the remuneration paid, including direct acquisition cost of the investment (the financial asset). All purchases and sales of capital investments are recognized on the “trading date” of the transaction, i.e., the date on which the Group commits to purchase or sell the asset.
Capital investments owned by the Group are subsequently measured at fair value. The results of the subsequent measurement to fair value are presented in the statement of comprehensive income (in other components of comprehensive income) and respectively in the reserve related to financial assets at fair value, through other comprehensive income. These results are transferred to retained earnings on disposal (sale) of the respective investment.
These investments are reported in the consolidated financial statements of the Group by the equity method. By this method, the share of the Group in the comprehensive income of an associated company is consolidated on one line, so that the value of the investment corresponds to its share in the net assets as of December 31 for the respective year or at the end of the respective reporting period. The Group recognizes its share in losses in associated companies up to the amount of its investment, including internal loans granted, unless it has undertaken an obligation to pay such liabilities on behalf of the associated company.
As of December 31, 2022, the Group reports a share in the profit of associated companies amounting to BGN 118 thousand. The value of the investment indicated in the consolidated statement of financial position has been increased by the same amount.
Inventories are accounted at the lower of the two following values: price for acquisition (cost) and net realizable value. The costs incurred to bring an inventory to its present condition and location are included in the cost of acquisition (cost) as follows:
In the use (sale) of inventory, the weighted average method is used.
A financial instrument is any contract that simultaneously gives rise to both a financial asset in one entity and a financial liability or equity instrument in another entity. Financial assets and liabilities are recognised in the separate statement of financial position when the Group becomes a party to the contractual terms of the relevant financial instrument that gave rise to this asset or liability.
Upon initial recognition, financial assets are classified as financial assets that are subsequently measured at amortized cost, at fair value in other comprehensive income (OCI) and as financial assets at fair value in profit or loss. Financial assets are classified upon their initial acquisition according to the characteristics of the contractual cash flows of the financial asset and the Group's business management model. The Group initially measures the financial asset at fair value plus transaction costs, in the case of financial assets that are not measured at fair value through profit or loss. Trade receivables that do not have a significant financing component, and for which the Group has applied a practically expedient measure, are stated at the transaction price determined according to IFRS 15.
The Group reclassifies financial assets only when its business model changes. In order to be classified and measured at amortized cost or at fair value in OCI, the financial asset should generate cash flows that represent " solely payments of principal and interest" (SPPI) on the outstanding principal amount. This measurement is called the "SPPI test” and is performed at the relevant instrument level.
The Group's business model for managing financial assets refers to how the Company manages its financial assets to generate cash flows. The business model determines whether cash flows will arise from the collection of contractual cash flows, the sale of financial assets, or both. Purchases or sales of financial assets, the terms of which require the delivery of the assets within a certain period of time, usually established by a regulatory provision or current practice in the relevant market (regular purchases), are recognized on the date of trading (transaction), i.e. on the date on which the Group has committed to buy or sell the asset.
For the purposes of subsequent measurement, financial assets are classified into four categories:
The Group measures financial assets at amortized cost if both of the following conditions are met:
Financial assets at amortized cost are subsequently measured using the effective interest rate (EIR) method and are subject to impairment. Gains and losses are recognized in profit or loss when the asset is derecognized, modified or impaired. The Group’s financial assets at amortized cost include trade and other receivables, term deposits and cash at bank accounts.
The Group measures its debt instruments at fair value in other comprehensive income if both of the following conditions are met:
In respect of debt instruments at fair value in other comprehensive income, interest income, currency revaluation and impairment losses or their reversal are recognized in profit or loss and calculated in the same way as those for financial assets measured at amortized cost. Other changes in fair value are recognized in other comprehensive income. Upon derecognition, the cumulative change in fair value recognized in other comprehensive income is stated in profit or loss.
Upon initial recognition, the Group may elect to classify irrevocably as equity instruments designated as measured at fair value in other comprehensive income when they meet the equity requirements under IAS 32 Financial Instruments: Presentation and when they are not held for trading. The classification is determined on an individual instrument basis. These investments in equity instruments are held for medium to long-term purpose and accordingly, the Group elected to designate them as equity instruments at fair value through other comprehensive income as it believes that recognising short-term fluctuations in these investments fair value in profit or loss would not be consistent with the Group’s strategy of holding these investments for long term purposes. Gains and losses on these financial assets are never "recycled" in profit or loss. Dividends are recognized as income in the statement of comprehensive income when the right to payment is established, except when the Group derives benefits from these receipts as a refund of part of the acquisition price of the financial asset, in which case the gains are reported in other comprehensive income. Equity instruments designated as measured at fair value in other comprehensive income are not in the scope of IFRS 9 expected credit loss model.# NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2022
UIC 201047670
All amounts are in thousand Bulgarian leva unless otherwise stated
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail.
Page 27 of 71
Financial assets at fair value through profit or loss include financial assets that do not qualify for classification at amortized cost or at fair value through other comprehensive income and financial assets designated at initial recognition as measured at fair value through profit or loss, or financial assets that are required to be measured at fair value. Derivatives, including separated embedded derivatives, are classified as held for trading unless designated as effective hedging instruments. Financial assets with cash flows that are not solely payments of principal and interest are classified and measured at fair value in profit or loss, regardless of the business model. Notwithstanding the criteria for debt instruments to be classified at amortized cost or at fair value in other comprehensive income as described above, debt instruments may be designated as measured at fair value in profit or loss upon initial recognition, if thus eliminates or substantially reduces the accounting mismatch.
Financial assets at fair value through profit or loss are reflected in the statement of financial position at fair value, and the net changes in fair value are recognized in the statement of comprehensive income.
A financial asset (or, where applicable, part of a financial asset or part of a group of similar financial assets) is derecognised (i.e. removed from the Group's statement of financial position) when:
When the Group has transferred its rights to receive cash flows from the asset or entered into a transfer agreement, it evaluates whether and to what extent it has retained the risks and rewards of ownership. When it has neither transferred nor retained substantially all the risks and rewards of ownership of the financial asset, nor has it transferred control over it, it still recognizes the transferred asset to the extent of its continuing involvement in it. In this case, the Group also recognizes the related obligation. The transferred asset and related liability are valued on a basis that reflects the rights and obligations that the Group has retained. A continuing involvement being a security of the transferred asset is valued at the lower of the original book value of the asset and the maximum amount of consideration that the Group may be required to pay.
The Group applies the same derecognition policies for impaired financial assets.
Additional disclosures related to impairment of financial assets, are included in the following notes as well:
The Group recognizes an allowance for expected credit losses (ECL) for all debt instruments that are not measured at fair value through profit or loss. ECL are based on the difference between the contractual cash flows due under the terms of the contract and any cash flows the Group expects to receive, discounted at an approximation of the original effective interest rate. Expected cash flows include cash flows from the sale of collateral held or other credit enhancements that are an integral part of the terms of the contract.
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ECL are recognized in three stages. For exposures for which there has been no significant increase in credit risk since initial recognition. Allowances for ECL are recognized for credit losses that arise as a result of default events that are possible occur within the next 12 months (12-month ECL). For exposures for which there has been a significant increase in credit risk since initial recognition, an allowance for expected credit loss is required in respect of credit losses expected over the remaining term of the exposure, regardless of when the default occurs (ECL over the lifetime of the instrument). A significant increase in credit risk is observed in the case of material financial difficulties of the debtor, probability of declaring bankruptcy and liquidation, financial restructuring or inability to repay the debt (overdue for more than 30 days) are taken as an indicator for impairment of the asset.
Regarding cash and cash equivalents, the Group applies the credit ratings of the banks and publicly available information on default rates for banks for in order to prepare an impairment assessment. The Group uses historical experience in order to determined loss given default. As significant increase in credit risk has not been identified, the Group applies 12-month ECL. The Group considers a financial instrument in default when contractual payments are overdue for 90 days. However, in certain cases, it may consider a financial asset to be in default when internal or external information provides an indication that it is unlikely that the Group will receive the outstanding contractual amounts in full before taking into account any credit improvements. All financial assets measured at amortized cost are subject to collective impairment, except for those in default (phase 3).
Upon initial recognition, financial liabilities are classified as financial liabilities at fair value through profit or loss, incl. derivatives or as financial liabilities at amortized value, incl. loans and other borrowings and trade and other payable as appropriate. Initially, all financial liabilities are recognized at fair value, and in the case of loans and borrowed funds and liabilities, net of direct transaction costs. The Group's financial liabilities include trade and other payables, bank loans and lease liabilities.
Financial liabilities are measured according to their classification as specified below:
Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated upon initial recognition as such at fair value through profit or loss.
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Financial liabilities are classified as held for trading if they are acquired for repurchase in the near future. Gains or losses on liabilities held for trading are recognized in the statement of comprehensive income. Financial liabilities designated upon initial recognition as financial liabilities at fair value through profit or loss are designated as such at the date of initial recognition only if the criteria of IFRS 9 are met. The Group has not designated any financial liabilities at fair value through profit or loss.
The Group's financial liabilities at amortized cost are reported at amortized cost after applying the effective interest method.
A financial liability is derecognized when the obligation is discharged, cancelled or expires. When an existing financial liability is exchanged with another from the same creditor under substantially different terms, or the terms of an existing liability are substantially changed, this exchange or modification is treated as extinguishment of the original financial liability and recognition of a new financial liability. The difference in the respective carrying amounts is recognized in the statement of comprehensive income.
The main financial instruments included in the consolidated statement of financial position of the Group are presented below.
Trade receivables are amounts owed by customers for goods sold and services performed in the ordinary course of business. They are usually due for short-term settlement and are therefore classified as current. Trade receivables are initially recognized at the amount of the unconditional consideration due, unless they contain significant financing components. The Group holds trade receivables for the purpose of collecting contractual cash flows and therefore measures them at amortized cost using the effective interest method. No discounting is applied when the effect is immaterial.
Future cash flows determined for a group of financial assets that are collectively measured for impairment are determined on the basis of historical information regarding financial assets with credit risk characteristics similar to the characteristics of the group of financial assets. Assets that are subject to individual impairment are not included in an impairment group.# NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2022
UIC 201047670
All amounts are in thousand Bulgarian leva unless otherwise stated
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail.
Page 30 of 71
The Group applies a simplified approach in recognizing impairment of trade and other receivables and recognizes loss allowance for lifetime expected credit losses. In estimating expected credit losses on trade receivables, the Company uses a provision matrix. When estimating expected credit losses on trade receivables, the Group uses its historical experience of credit losses on trade receivables to estimate the expected credit losses for the entire life of the financial assets.
Borrowings are recognized initially at fair value, which is formed by the cash proceeds received, less the inherent transaction costs. After their initial recognition, interest-bearing loans are measured at amortized cost, where any difference between the initial cost and the maturity value is recognized in profit or loss over the period of the loan by applying the effective interest method. Finance costs, including direct borrowing costs, are included in profit or loss using the effective interest method, except for transaction costs on bank overdrafts, which are recognized in profit or loss on a straight-line basis for the period, for which the overdraft was agreed upon. Loans are classified as current when they are to be settled within twelve months from the end of the reporting period.
Trade and other payables arise as a result of goods or services received. Current liabilities are not amortized. Trade payables are recognized initially at fair value and subsequently at amortized cost using the effective interest method.
Cash includes cash on hand and current accounts, and cash equivalents include short-term bank deposits with an original maturity of less than 3 months. The consolidated statement of cash flows is presented using the direct method. Cash and cash equivalents are subsequently presented at amortised cost, excluding the accumulated allowance for expected credit losses.
On the effective date of the contract, the Group assesses whether the contract is or contains a lease. In particular, whether the contract transfers the right to control the use of the identified asset for a certain period of time.
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail.
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The Group applies a unified approach to the recognition and assessment of all leases, except for short-term leases (i.e., leases with a lease term of up to 12 months) and leases of low-value assets. The Group recognises lease liabilities for the payment of lease instalments and right-of-use assets, representing the right to use the assets.
The Group recognizes right-of-use assets from the inception date of the lease (i.e. the date on which the underlying asset is available for use). Right-of-use assets are measured at acquisition cost less accumulated depreciation and impairment losses and adjusted for any revaluation of lease liabilities. The acquisition cost of right-of-use assets includes the amount of recognized lease liabilities, the initial direct costs incurred and the lease payments made on or before the inception date of the lease, an estimate of the costs to be incurred by the lessee in dismantling and relocating the asset, the restoration of the site on which it is located or the restoration of the asset to the condition required under the terms of the lease, less any incentives received under the lease. The right-of-use assets are depreciated on a straight-line basis over the lease term. If at the end of the lease term the ownership of the leased asset is transferred to the Group, or the acquisition cost reflects the exercise of a purchase option, depreciation is calculated using the expected useful life of the asset.
From the inception date of the lease, the Group recognises lease liabilities measured at the present value of the lease payments to be made during the lease term. Lease payments include fixed payments (including in-substance fixed payments) less any eligible lease incentives, variable lease payments depending on an index or an interest rate, and amounts that are expected to be paid under guarantees for residual value. Lease payments also include the exercise price of a purchase option if the Group is reasonably certain to exercise that option, as well as penalties for terminating the lease, if the lease term reflects the Group's exercising an option to terminate the lease. Variable lease payments, not depending on an index or an interest rate, are recognised as expense in the period in which the event or condition triggering the payment occurs. In calculating the present value of lease payments, the Group uses an intrinsic interest rate at the inception date of the lease because the interest rate implicit in the lease cannot be determined reliably. After the inception date, the amount of lease liabilities is increased by the interest and reduced by the lease payments made.
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail.
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In addition, the carrying amount of lease liabilities is revalued, if there is a modification, a change in the lease term, a change in lease payments (for example, changes in future payments resulting from a change in the index or interest rate used to determine those lease payments) or a change in the measurement of the option to purchase the underlying asset.
The Group applies recognition exemption for short-term leases to its short-term building leases (for example, leases with lease term of 12 months or less from the inception date and not containing a purchase option). The Group also applies the recognition exemption of low-value assets leases to leases of office equipment which is considered low-value. Lease payments on short-term leases and low-value assets leases are carried as an expense on the straight-line basis over the lease term.
Provisions are recognised when the Group has a current (constructive or legal) liability as a result of a past event, and it is probable that the repayment/settlement of this liability will involve an outflow of resources. Provisions are estimated based on management's best estimate as at the date of preparation of the financial statements of the costs necessary to settle the respective liability. The estimate is discounted when the maturity is long-term. When part of the resources to be used to settle the liability is expected to be recovered by a third party, the Group recognises a receivable in case it is highly probable to be received, its value can be reliably measured as well as an income (credit) under the same item in the consolidated statement of financial position, where the provision itself is presented. The Group charges warranty service provisions. Liabilities for warranty service provisions are accrued based on management's best judgment of the potential amount of costs that the Group will incur upon the occurrence of a warranty event, based on the accumulated experience of goods/products sold.
The Government of Bulgaria is responsible for providing pensions under defined benefit plans. The liabilities under the Group commitment to transfer accrued amounts to defined benefit plans are recognised in the statement of comprehensive income when they are incurred.
The Group recognises as a liability the undiscounted amount of the estimated costs of paid annual leave, in accordance with the Labor Code and its internal rules, expected to be paid to employees in exchange for their labor for the past reporting period.
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail.
Page 33 of 71
In accordance with the requirements of the Labor Code, upon termination of the employment contract of an employee who has acquired the right to a pension, the Group pays the employee a compensation in the amount of two gross salaries, if the accumulated service at the Group is less than ten years, or six gross salaries, in case of accumulated service time at the Group of over ten consecutive years. Based on their characteristics, these schemes are retirement benefit plans. The measurement of long-term employee benefits is carried out using the projected unit credit method and the estimate at the date of the statement of financial position is made by licensed actuaries. The amount recognised in the statement of financial position is the present value of the liabilities. The revaluations of the retirement benefit plan liability (actuarial gain or loss), arising from experience and changes in actuarial financial and demographic assumptions, are recognised in equity through other comprehensive income as a reserve for retirement liabilities. The amounts released from this reserve are transferred through other comprehensive income into retained earnings.# NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2022
The Group has adopted the capital maintenance financial concept. Maintaining the share capital is assessed in nominal monetary units. Profit for the reporting period is considered acquired only if the cash /financial/ amount of equity at the end of the period exceeds the cash amount at the beginning of the period, after deducting the distributions between the owners or the capital invested by them during the period. Allterco AD is a joint-stock company and is obliged to register in the Commercial Register a certain amount of share capital to serve as collateral for the claims of creditors of the Parent Company. The shareholders are responsible for the Parent Company’s liabilities up to the amount of their shareholding in the capital and can claim the return of this shareholding only in bankruptcy or liquidation proceedings. The Parent Company reports its share capital at the nominal value of the shares registered in court. Equity is the residual value of the Group company's assets after deducting all of their liabilities. It includes: Share capital is presented in the consolidated statement of financial position at nominal value per share according to the number of shares issued. Financial result is the difference between the revenue and the related costs charged. Equity is reported less the distributed dividends of the owned shares during the period in which they will be distributed (by decision of the General Meeting). According to the requirements of the Commerce Act and the Articles of Association of the Parent Company Allterco AD, the Group is obliged to allocate reserves at the expense of:
* at least one tenth of the profit, which is allocated until the funds reach 10 percent of the share capital;
* the funds received above the nominal value of the shares upon their issuance (premium reserve).
Repurchased own shares are presented in the consolidated statement of financial position at cost (acquisition price), with their gross purchase price reduced by the Group's equity capital. Profit or loss from the sale of repurchased own shares are presented directly in the Group's equity, under the "Repurchased shares". In past periods, the Group reported share-based payments to employees in Bulgarian subsidiaries. Share-based payments to employees related to services rendered are settled through equity instruments. Transferred capital instruments are measured at their fair value on the date of transfer. Share-based payment expense is recognised in the period in which the services are received. Reserve from recalculation of the currency of the presented foreign activity - arises from the net effects of the translation of the accounts of subsidiaries abroad from their functional currencies into Bulgarian leva, for consolidation purposes. Revaluation reserve is the difference between the previous book value of fixed assets reported at fair value through other comprehensive income and their fair values as of the date of this consolidated financial statements.
Income tax expense is the amount of current income tax and the tax effect on temporary tax differences. Current taxes on the profit of Bulgarian companies are determined in accordance with the requirements of the Bulgarian tax legislation. The nominal tax rate in Bulgaria for 2021 and 2022 is 10%. Subsidiaries abroad are charged according to the requirements of the relevant tax laws by country, at the following nominal tax rates:
| Country | Nominal tax rates per year |
|---|---|
| 2022 | |
| Germany | 15,825% |
| USA | 15-35% |
Deferred income tax is calculated using the balance sheet liability method. Deferred tax liabilities are calculated and recognised for all taxable temporary differences, while deferred tax assets are recognised only if likely to be reversed and if the Group will be able to generate sufficient profit in the future from which they can be deducted.
The effect of recognising deferred tax assets and/or liabilities is reported where the effect of the event that gave rise to them is presented. For events affecting profit or loss and other comprehensive income, the effect of deferred tax assets and liabilities is recognised in the consolidated statement of comprehensive income. For events that are initially recognised in equity (revaluation reserve) deferred tax assets and liabilities are recognised in the consolidated statement of comprehensive income. Deferred tax assets and/or liabilities are presented offset the consolidated statement of financial position as they are subject to a uniform taxation regime in the country. As of December 31, 2022, the Group recognises deferred income tax only for Bulgarian companies and at a 10% tax rate, which remains the same for 2023.
Earnings per share are calculated by dividing the net profit or loss for the period attributable to shareholders by the weighted average number of ordinary shares held for the period. The weighted average number of shares is the number of ordinary shares held at the beginning of the period, adjusted by the number of ordinary shares repurchased and newly issued during the period, multiplied by the time average factor. This factor represents the number of days particular shares were held compared to the total number of days during the period. Diluted earnings per share are not calculated because there are no potentially diluted shares issued.
When applying the accounting policy, the Group's management makes certain estimates that have a significant effect on these financial statements. Such estimates, by definition, rarely equal actual results. Given their nature, these estimates are subject to ongoing review and updating and summarize historical experience and other factors, including expectations of future events that management believes are reasonable under current circumstances. Estimates and assumptions that carry a significant risk of resulting in a material adjustment to the carrying amounts of assets and liabilities in the next financial year are set out below.
Defined benefit plans
The employee defined benefit obligation is determined by actuarial valuation. This estimate requires assumptions on the discount rate, future wage growth, staff turnover and mortality rates. Due to the long-term nature of defined benefit plans, these assumptions are subject to significant uncertainty. The Group prepared an actuarial valuation of defined benefits and reported them in the consolidated financial statements at the end of 2022 (note 3.17).
Useful lives of property, plant and equipment and intangible assets
Financial reporting of property, plant and equipment and intangible assets includes the use of estimates of their expected useful lives and carrying amounts, based on the Group management's judgments.
Impairment of receivables
Management estimates the volume and timing of expected future cash flows related to receivables based on experience versus current circumstances. Due to the inherent uncertainty of this estimate, actual results may differ. Group’s management compares prior year estimates with actual results. The Group uses a simplified approach in reporting trade and other receivables and recognises an impairment loss as expected credit losses over the entire term. They represent the expected shortfall in contractual cash flows, given the possibility of default at any point in the life of the financial instrument. The Group uses its experience, external indicators and information to calculate expected credit losses in the long-term. Impairments recognised for the reporting period are disclosed in Note 4.04.
Impairment of property, plant and equipment
At the date of preparation of the financial statements, the Group's management organizes an impairment review of property, plant and equipment. As of December 31, 2022, such review was carried out, as a result of which management considered that no impairment indicators were available. No impairment loss on property, plant and equipment is reported in the financial statements.
Impairment of inventories
At the date of preparation of the financial statements, the Group's management reviews and analyses existing inventories. A review and analysis of all available inventories is made in terms of basic indicators – uniformity, commercial appearance, expiry date, etc., and expert prices are determined.
The proposed expert prices are consistent with the prices reached under concluded contracts for realization on the domestic and foreign markets, the dynamics of supply and demand of inventories, the latest price levels and trends in transactions with similar inventories. For the calculation of the net realisable value of individual types of inventories, the estimated direct costs associated with sales are excluded from determined expert selling prices. When assessing the inventories for which sales contracts are concluded, the net realisable value is determined based on the contract price less the cost of sales. Inventories not related to sales contracts are valued according to assumptions about the possibilities for their future disposal. Based on these review and analysis, no impairment of existing inventories was made as of December 31, 2022. The impairment of inventories is calculated as the difference between their carrying amount, as recognized in the statement of financial position prior to review and analysis, and their net realisable value, determined on the basis of expert prices as set out above.
The companies in the Group are tax entities under the jurisdiction of the tax administration in the country in which they operate. A significant estimate needs to be made to determine the tax provision. There are numerous examples for which the tax finally determined is unspecified in the normal course of business. Group companies recognise liabilities for expected tax payables based on the judgement of the management of the relevant company and the Group. When the final tax result of such events is different from the amounts originally recognized, those differences will affect current income tax and deferred tax provisions in the tax revisions period.
Determining the lease term for contracts with renewal and termination options - The Group as lessee
The Group defines the lease term as the irrevocable term of the lease, together with any periods covered by an option to extend it if it is reasonably certain that the option will be exercised, or any periods covered by a termination option if it is reasonably certain that the option will not be exercised (note 3.16).
Some of the Group's accounting policies and disclosures require a fair value measurement of financial and non-financial assets and liabilities. When measuring the fair value of an asset or liability, the Group uses observable data as far as possible. Fair values are categorized at different levels in the fair value hierarchy based on the inputs to the valuation techniques as follows:
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2022
UIC 201047670
All amounts are in thousand Bulgarian leva unless otherwise stated
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail.
If the inputs used to measure the fair value of an asset or liability can be categorized at different levels of the fair value hierarchy, then the fair value measurement is categorized in its entirety at that level of the fair value hierarchy whose input information is relevant to the overall assessment. The Group recognizes transfers between levels of the fair value hierarchy at the end of the reporting period in which the change occurs. In 2022 and 2021 there have been no transfers between the levels of the fair value hierarchy. More information on the assumptions made in measuring fair values is included in the relevant notes.
| 01.01.2021 | Additions (cost) | Disposals (book value) | Depreciation for the period | Change in depreciation | Depreciation of assets written-off | Book value at the end | 31.12.2021 | 01.01.2022 | Additions (cost) | Disposals (book value) | Depreciation for the period | Change in depreciation | Depreciation of assets written-off | Book value at the end | 31.12.2022 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cost | ||||||||||||||||
| Land | 1 476 | - | - | - | - | - | 1 476 | 1 476 | 1 476 | - | - | - | - | - | 1 476 | 1 476 |
| Buildings | 3 032 | - | - | (121) | - | - | 2 819 | 3 032 | 3 032 | 56 | - | (120) | - | - | 2 755 | 3 088 |
| Machinery and equipment | 859 | 53 | - | (256) | - | 3 | 149 | 912 | 912 | 18 | (38) | (105) | - | 5 | 24 | 892 |
| Vehicles | 458 | - | (6) | (94) | 3 | 4 | 70 | 452 | 452 | 6 | - | (43) | - | 58 | 33 | 458 |
| Computers | 240 | 25 | (8) | (49) | - | - | 29 | 257 | 257 | 46 | (5) | (30) | 5 | - | 45 | 298 |
| Office equipment | 128 | 58 | (45) | (8) | - | - | 36 | 141 | 141 | 84 | (58) | (21) | - | 58 | 99 | 225 |
| Other | 151 | 142 | - | (13) | - | - | 164 | 293 | 293 | 2 | - | (27) | - | - | 139 | 237 |
| Assets under construction | 9 | 46 | - | - | - | - | 9 | 55 | 55 | - | (30) | - | - | - | 82 | 82 |
| Total | 6 353 | 264 | (59) | (541) | 7 | 7 | 4 798 | 6 618 | 6 618 | 210 | (131) | (346) | 63 | 120 | 4 653 | 6 756 |
| Depreciation | ||||||||||||||||
| Land | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - |
| Buildings | (92) | - | - | (121) | - | - | (213) | (213) | (213) | - | - | (120) | - | - | (333) | (333) |
| Machinery and equipment | (507) | - | - | (256) | - | 3 | (763) | (763) | (763) | - | (38) | (105) | - | 5 | (868) | (868) |
| Vehicles | (291) | - | (6) | (94) | 3 | 4 | (382) | (382) | (382) | - | - | (43) | - | 58 | (425) | (425) |
| Computers | (183) | - | (8) | (49) | - | - | (228) | (228) | (228) | - | (5) | (30) | 5 | - | (253) | (253) |
| Office equipment | (97) | - | (45) | (8) | - | - | (105) | (105) | (105) | - | (58) | (21) | - | 58 | (126) | (126) |
| Other | (116) | - | - | (13) | - | - | (129) | (129) | (129) | - | - | (27) | - | - | (98) | (98) |
| Assets under construction | - | - | - | - | - | - | - | - | - | - | (30) | - | - | - | - | - |
| Total | (1 183) | - | (59) | (541) | 7 | 7 | (1 820) | (1 820) | (1 820) | - | (131) | (346) | 63 | 120 | (2 103) | (2 103) |
| Book value | 1 476 | 2 940 | 352 | 167 | 57 | 31 | 35 | 9 5067 | 1 476 | 2 819 | 149 | 70 | 29 | 36 | 164 | 55 |
| Book value at the end | 1 476 | 2 819 | 149 | 70 | 29 | 36 | 164 | 55 | 4 798 | 1 476 | 2 755 | 24 | 33 | 45 | 99 | 139 |
| 31.12.2021 | Cost | 1 476 | 3 032 | 912 | 452 | 257 | 141 | 293 | 55 | 4 798 | ||||||
| Depreciation | (213) | (763) | (382) | (228) | (105) | (129) | - | (1 820) | (1 820) | |||||||
| Book value | 1 476 | 2 819 | 149 | 70 | 29 | 36 | 164 | 55 | 4 798 | |||||||
| 01.01.2022 | Cost | 1 476 | 3 032 | 912 | 452 | 257 | 141 | 293 | 55 | 4 798 | ||||||
| Depreciation | (213) | (763) | (382) | (228) | (105) | (129) | - | (1 820) | (1 820) | |||||||
| Book value | 1 476 | 2 819 | 149 | 70 | 29 | 36 | 164 | 55 | 4 798 | |||||||
| Additions (cost) | - | 56 | 18 | 6 | 46 | 84 | 2 | 57 | 269 | |||||||
| Purchase/transfer | - | 56 | 18 | 6 | 46 | 84 | 2 | 57 | 269 | |||||||
| Disposals (book value) | - | - | (38) | - | (5) | - | (58) | (30) | (131) | |||||||
| Sale | - | - | (38) | - | - | - | (58) | - | (101) | |||||||
| Other | - | - | - | - | (5) | - | - | (30) | (30) | |||||||
| Depreciation for the period | (120) | (105) | (43) | (30) | (21) | (27) | - | - | (346) | |||||||
| Change in depreciation | - | - | - | - | 5 | - | 58 | - | 63 | |||||||
| Depreciation of assets written-off | - | - | - | - | - | 5 | 58 | - | 63 | |||||||
| Book value at the end | 1 476 | 2 755 | 24 | 33 | 45 | 99 | 139 | 82 | 4 653 | 1 476 | 3 088 | 892 | 458 | 298 | 225 | 237 |
| 31.12.2022 | Cost | 1 476 | 2 755 | 24 | 33 | 45 | 99 | 139 | 82 | 4 653 | ||||||
| Depreciation | (333) | (868) | (425) | (253) | (126) | (98) | - | (2 103) | (2 103) | |||||||
| Book value | 1 476 | 2 755 | 24 | 33 | 45 | 99 | 139 | 82 | 4 653 |
Contractual mortgages have been established on the lands and buildings owned by the Group, in connection with bank financing used by the companies in Bulgaria (see 3.15).
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2022
UIC 201047670
All amounts are in thousand Bulgarian leva unless otherwise stated
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail.
| 01.01.2021 | Amortization for the period | Change in amortization | Amortization of assets written-off | Book value at the end | 31.12.2021 | 01.01.2022 | Additions (cost) | Disposals (book value) | Amortization for the period | Change in amortization | Amortization of assets written-off | Book value at the end | 31.12.2022 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cost | ||||||||||||||
| Software | 190 | (17) | - | - | 173 | 331 | 331 | - | - | (68) | - | - | 263 | 331 |
| ISO Certificates and intellectual property rights | 874 | (3) | 242 | - | 1 113 | 12 | 12 | - | - | (2) | - | - | 10 | 12 |
| Patents, licenses, trademarks, prototypes and development | 2 691 | (456) | 298 | - | 2 533 | 3 614 | 3 614 | 267 | (346) | (532) | 120 | - | 2 123 | 3 535 |
| Other | 212 | (8) | 14 | - | 218 | 57 | 57 | 207 | - | (8) | - | - | 256 | 264 |
| Assets under construction | 1 535 | - | - | - | 1 535 | 125 | 125 | 370 | - | - | - | - | 495 | 1 591 |
| Total | 5 502 | (484) | 554 | - | 5 567 | 4 139 | 4 139 | 844 | (346) | (610) | 120 | - | 4 642 | 5 733 |
| Amortization | ||||||||||||||
| Software | (190) | (17) | - | - | (207) | (207) | (207) | - | - | (68) | - | - | (275) | (275) |
| ISO Certificates and intellectual property rights | (244) | (3) | 242 | - | (5) | (5) | (5) | - | - | (2) | - | - | (7) | (7) |
| Patents, licenses, trademarks, prototypes and development | (625) | (456) | 298 | - | (783) | (783) | (783) | - | (346) | (532) | 120 | - | (1 195) | (1 195) |
| Other | (34) | (8) | 14 | - | (28) | (28) | (28) | - | - | (8) | - | - | (36) | (36) |
| Assets under construction | - | - | - | - | - | - | - | - | - | - | - | - | - | - |
| Total | (1 093) | (484) | 554 | - | (1 023) | (1 023) | (1 023) | - | (346) | (610) | 120 | - | (1 513) | (1 513) |
| Book value | 4 409 | 630 | 2 066 | 178 | 1 535 | 4 409 | 3 116 | 124 | 7 2831 | 29 | 125 | 3 116 | 4 220 | 56 |
| Book value at the end | 124 | 7 | 2 831 | 29 | 125 | 3 116 | 124 | 7 | 2 831 | 29 | 125 | 3 116 | 4 220 | 56 |
| 31.12.2021 | Cost | 331 | 12 | 3 614 | 57 | 125 | 4 139 | - | 4 139 | 331 | ||||
| Amortization | (207) | (5) | (783) | (28) | - | (1 023) | - | (1 023) | (275) | |||||
| Book value | 124 | 7 | 2 831 | 29 | 125 | 3 116 | - | 3 116 | 56 | |||||
| 01.01.2022 | Cost | 331 | 12 | 3 614 | 57 | 125 | 4 139 | - | 4 139 | 331 | ||||
| Amortization | (207) | (5) | (783) | (28) | - | (1 023) | - | (1 023) | (275) | |||||
| Book value | 124 | 7 | 2 831 | 29 | 125 | 3 116 | - | 3 116 | 56 | |||||
| Additions (cost) | - | - | 267 | 207 | 1 466 | 1 940 | ||||||||
| Purchase | - | - | 267 | 207 | 370 | 844 | ||||||||
| Self-constructed | - | - | - | - | 1 096 | 1 096 | ||||||||
| Disposals (book value) | - | - | (346) | - | - | (346) | ||||||||
| Book value written-off of assets of investments sold | - | - | (346) | - | - | (346) | ||||||||
| Amortization for the period | (68) | (2) | (532) | (8) | - | (610) | ||||||||
| Change in amortization | - | - | 120 | - | - | 120 | ||||||||
| Amortization of assets written-off | - | - | 120 | - | - | 120 | ||||||||
| Book value at the end | 56 | 5 | 2 340 | 228 | 1 591 | 4 220 | 331 | 12 | 3 535 | 264 | 1 591 | 5 733 | 56 | 56 |
During the reporting period the Group has recognized as expense research and development expenditure for the amount of BGN 263 thousand.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2022
UIC 201047670
All amounts are in thousand Bulgarian leva unless otherwise stated
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail.
| December 31, 2022 | December 31, 2021 | |||||
|---|---|---|---|---|---|---|
| Vehicles | Buildings | Total | Vehicles | Buildings | Total | |
| At the beginning of the period | ||||||
| Cost | 232 | 9 | 241 | 127 | 9 | 136 |
| Depreciation | (124) | (9) | (133) | (84) | (6) | (90) |
| Book value | 108 | - | 108 | 43 | 3 | 46 |
| Additions (cost) | 162 | 99 | 261 | 116 | - | 116 |
| New leases | 162 | 99 | 261 | 116 | - | 116 |
| Disposals (cost) | - | - | - | (11) | - | (11) |
| Written-offs | - | - | - | (11) | - | (11) |
| Depreciation for the period | (58) | (14) | (72) | (40) | (3) | (43) |
| Book value at the end of the period | ||||||
| Cost | 394 | 108 | 502 | 232 | 9 | 241 |
| Depreciation | (183) | (23) | (206) | (124) | (9) | (133) |
| Book value | 211 | 85 | 296 | 108 | - | 108 |
The Group has concluded lease contracts for the lease of office premises and vehicles used in the activity, and therefore, it has recognized right-of-use assets in the consolidated statement of financial position.
| December 31, 2022 | December 31, 2021 | |
|---|---|---|
| Allterco Robotics Inc., USA | 34 | 34 |
| Allterco Properties EOOD | 126 | 126 |
| Total | 160 | 160 |
The Group has not recognized impairment on goodwill as of 31.12.2022.
During 2021 Allterco AD has participated in the establishment of an associated company in China named Allterco Asia Ltd., Guangdong province with a seat and management address at Shenzhen. The registered capital of the company is CNY 100 000 and the participation of Allterco AD is 30% (BGN 8 thousand), with an option to acquire additionally up to 50% and reach a controlling package of up to 80%, at the discretion of Allterco AD. As of December 31, 2022 and as of the date of issuance of the consolidated financial statements management considers this project to be high-risk and therefore has no plans to exercise the option at this time.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2022
UIC 201047670
All amounts are in thousand Bulgarian leva unless otherwise stated
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail.
Page 41 of 71
Movement of investments in associates is as follows:
| Year ended December 31, 2022 | Year ended December 31, 2021 | |
|---|---|---|
| Balance as of January 01 | 40 | - |
| Acquisition of shares | - | 8 |
| Share in current profit for the period | 118 | 32 |
| Balance as of the period end | 158 | 40 |
3.06. Other long-term capital investments
| December 31, 2022 | December 31, 2021 | |
|---|---|---|
| Ordinary registered shares - Link Mobility Group Holding ASA, at the beginning of the period | 2 624 | 6 566 |
| Decrease | (1 794) | (3 942) |
| Financial instruments sold | (355) | (369) |
| Effect from subsequent revaluation of financial assets | (1 439) | (3 573) |
| Ordinary registered shares - Link Mobility Group Holding ASA, at the end of the period | 830 | 2 624 |
3.07. Long-term trade receivables
In September 2021 the Group sold its business located, through ALLTERCO PTE, ALLTERCO SDN and ALLTERCO CO. LTD in Singapore, Malaysia and Thailand, respectively. As part of the clauses of the sales contract, the payment of part of the value of the transaction is deferred. BGN 1 027 thousand are due after the end of 2023, which is why in these consolidated financial statements they are presented as a long-term receivable.
At the end of the third quarter of 2021 the Group finalized a deal with Skylight Venture Capital Pte. Ltd., Singapore for sale of three subsidiaries under the following conditions:
- Sales price: EUR 2 100 000;
- Term of payment:
i. 50% - after signing a sales agreement and receipt a letter by the buyer confirming that the Group met certain conditions under the deal;
ii. 25% within 18 months as of the date of the sales agreement;
iii. 25% within 36 months as of the date of the sales agreement.
After the sale the Group recognizes profit at the amount of BGN 201 thousand presented as financial income in the statement of comprehensive income. As a result of the deal the Group derecognizes the following assets/liabilities:
- Cash – BGN 184 thousand
- Total other assets – BGN 2 069 thousand
- Total liabilities – BGN 2 840 thousand
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2022
UIC 201047670
All amounts are in thousand Bulgarian leva unless otherwise stated
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail.
Page 42 of 71
3.08. Deferred tax assets
| December 31, 2022 | December 31, 2021 | |
|---|---|---|
| Deferred tax assets | ||
| Deferred tax on revaluation reserve | 56 | - |
| Deferred tax on provision for expenses | 66 | 30 |
| Deferred tax on unused paid leave | 40 | 19 |
| Deferred tax on impairment of receivables | 46 | 25 |
| Deferred tax on unused benefits of individuals | 128 | - |
| Deferred tax on long-term employee benefits | 13 | - |
| Total assets | 349 | 74 |
| Deferred tax liabilities | ||
| Deferred tax related to the application of IFRS 16 | (1) | (2) |
| Total liabilities | (1) | (2) |
| Total deferred tax assets/(liabilities) | 348 | 72 |
3.09. Inventory
| December 31, 2022 | December 31, 2021 | |
|---|---|---|
| Goods | 18 436 | 3 900 |
| Goods in transit | 3 317 | 979 |
| Deliveries | 937 | 2 227 |
| Materials | 312 | 454 |
| Total: | 23 002 | 7 560 |
As of December 31, 2022, the consolidated statement of financial position includes:
• Deliveries representing components for production, purchased on behalf of the Group, by its main suppliers of production services amounting to BGN 937 thousand. The components are available in the warehouses of the suppliers, and the Group holds the title on the components;
• Goods in transit that are not available in the Group's warehouses, but which it owns under purchase agreements.
It is the policy of the Group companies to strive to maintain optimal stock levels equal to the estimated sales for several months ahead. The Group's management believes that the trend for the foreseeable future is for stock levels to increase as a result of growing sales as well as an increasing assortment of devices.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2022
UIC 201047670
All amounts are in thousand Bulgarian leva unless otherwise stated
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail.
Page 43 of 71
3.10. Trade receivables
| December 31, 2022 | December 31, 2021 | |
|---|---|---|
| Receivables from clients | 20 302 | 12 642 |
| Receivables written-off | (1 486) | - |
| Impairment of receivables from clients, net | (526) | (237) |
| Advances to suppliers | 3 357 | 6 762 |
| Total: | 21 647 | 19 167 |
The movement in impairment of trade receivables during the year is as follows:
| December 31, 2022 | December 31, 2021 | |
|---|---|---|
| Impairment at the beginning of the period | 237 | - |
| Impairment reversed and written-off | (152) | - |
| Impairment charged for the period | 441 | 237 |
| Impairment at the period end, net | 526 | 237 |
In June 2022, an agreement was reached with Link Mobility Group, Norway, to pay the overdue last contribution in connection with the sale of the European telecommunications business of Allterco AD, for which arbitration proceedings were initiated before the International Arbitration in Vienna. As a result of the agreement, Link Mobility Group paid BGN 2,151 thousand of the amount due and the remaining part of BGN 903 thousand was written-off. The above reversed and written-off impairment and part of the receivables written-off as presented above, relate to this agreement.
3.11. Other receivables
| December 31, 2022 | December 31, 2021 | |
|---|---|---|
| TAX RECEIVABLES, including: | 3 515 | 1 884 |
| VAT recoverable | 3 447 | 1 857 |
| Corporate tax advance payments | 68 | 2 |
| Account balances with customs | - | 25 |
| OTHER RECEIVABLES, including: | 107 | 28 |
| Deposits in commercial entities and guarantees | 104 | 22 |
| Petty cash | 3 | 4 |
| Other receivables | - | 2 |
| Total: | 3 622 | 1 912 |
3.12. Short-term financial assets
At the end of 2022, the Group reported short-term financial assets amounting to BGN 175 thousand (31.12.2021: nil), which include costs of legal and advisory services related to the acquisition of the Slovenian company GOAP. Upon successful completion of the transaction, these costs will be added to the value of the investment.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2022
UIC 201047670
All amounts are in thousand Bulgarian leva unless otherwise stated
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail.
Page 44 of 71
3.13. Cash and cash equivalents
| December 31, 2022 | December 31, 2021 | |
|---|---|---|
| Cash on hand | 24 | 92 |
| Cash in current bank accounts | 24 114 | 30 320 |
| Debit cards | 12 | 4 |
| Other cash | 3 988 | 125 |
| Cash equivalents | 10 | - |
| Total: | 28 148 | 30 541 |
Other cash at the end of 2022 are funds intended for the acquisition of the Slovenian company GOAP, which are transferred to a notary's account in Slovenia (escrow account).
By currency
| December 31, 2022 | December 31, 2021 | |
|---|---|---|
| EUR | 13 160 | 6 180 |
| BGN | 5 744 | 13 298 |
| USD | 8 640 | 11 063 |
| Other | 604 | - |
| Total: | 28 148 | 30 541 |
The Group's cash is in bank accounts with banks with a stable long-term rating. The Management has assessed the expected credit losses on Cash and cash equivalents. The estimated credit losses are insignificant and are not recognized in the consolidated financial statements of the Group as of December 31, 2022. As of December 31, 2022 36.8% of the cash and cash equivalents of the Group are held in one bank.
3.14. Prepaid expenses
| December 31, 2022 | December 31, 2021 | |
|---|---|---|
| Information services | 26 | 28 |
| Insurance | 68 | 35 |
| Licenses / certificates | 260 | - |
| Membership fees | 52 | 34 |
| Subscriptions | 49 | 27 |
| Exhibitions | 48 | 109 |
| Other | 9 | 1 |
| Total | 512 | 234 |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2022
UIC 201047670
All amounts are in thousand Bulgarian leva unless otherwise stated
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail.
Page 45 of 71
3.15. Bank loans
Bank loans are as follows:
| December 31, 2022 | December 31, 2021 | |
|---|---|---|
| KBC Bank, incl.: | 1 615 | 1 900 |
| − up to one year | 293 | 285 |
| − over one year | 1 322 | 1 615 |
| DSK Bank AD | 392 | 617 |
| − up to one year | 225 | 225 |
| − over one year | 167 | 392 |
| Other short-term financing in Shelly USA (previously named Allterco Robotics Inc., USA) | 149 | 62 |
| Total bank loans – non-current portion: | 1 488 | 2 007 |
| Total bank loans – current portion: | 668 | 572 |
Bank KBC Bank AD
Date of the contract: August 25, 2017
Contracted credit amount: EUR 1 620 000
Original currency EUR
Purpose Financing of up to 90% (VAT exclusive) of the final price of all company shares, representing 100% of the capital of the Joint Debtor Allterco Properties EOOD, defined in an Agreement concluded between the Borrower and JFC Developments OOD for transfer of the company shares in the Final Agreement.
Repayment deadline February 10, 2028
Collateral: Mortgage on real estate, owned by Allterco Properties EOOD, joint debtor - Allterco Properties EOOD, pledge on all bank accounts of Allterco AD at the bank
Lender DSK Bank AD
Date of the contract: September 28, 2020
Total amount EUR 450 000
Purpose 90% funding of expenses for real estate purchase
Original currency EUR
Fixed maturity September 28, 2024
Collateral Mortgage on real property of Allterco Properties EOOD
The subsidiary Shelly USA uses financing under company credit card. A Group company has an agreed bank financing in the form of an overdraft, which was not utilized during the reporting period. Details of the parameters of the provided financing are presented in note 5.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2022
UIC 201047670
All amounts are in thousand Bulgarian leva unless otherwise stated
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail.
Page 46 of 71
3.16.# NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2022
UIC 201047670
All amounts are in thousand Bulgarian leva unless otherwise stated
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail.
Page 47 of 71
As of December 31, 2022, the Group has obligations for a defined benefit plan upon retirement of BGN 112 thousand. The amount of the obligation is determined on the basis of an actuarial assessment based on assumptions about mortality, disability, probability of leaving, salary growth, etc.
The movements of the present value of the defined benefits plan upon retirement:
| December 31, 2022 | December 31, 2021 | |
|---|---|---|
| Liabilities at the beginning of the period | - | - |
| Liabilities paid during the period | - | - |
| Expenses recognized in profit or loss | ||
| Current service expense | 111 | - |
| Finance costs on future liabilities | 1 | - |
| Actuarial loss, recognized in other comprehensive income | - | - |
| Liabilities at the end of the period | 112 | - |
In the case of early retirement due to disability, the staff shall be entitled to a benefit of up to two months' salaries, increased by 100% for a minimum period of five years and provided that no such benefits have been received during the last five years of service.
The demographic statistical assumptions used are based on the following:
- turnover rate of the Group's staff over the past few years;
- mortality of the population of Bulgaria in the period 2019 – 2021 according to the data of the National Statistical Institute;
- statistics of the National Center for Health Information on disability of the population and premature retirement.
| December 31, 2022 | December 31, 2021 (restated) | |
|---|---|---|
| Suppliers | 1 797 | 1 001 |
| Advances on customers | 94 | 556 |
| Total: | 1 891 | 1 557 |
| December 31, 2022 | December 31, 2021 | |
|---|---|---|
| Payables to employees | 1 213 | 5 |
| Liabilities for unused paid leave | 624 | 168 |
| Total: | 1 837 | 173 |
| December 31, 2022 | December 31, 2021 | |
|---|---|---|
| Social security and health contributions | 204 | 115 |
| December 31, 2022 | December 31, 2021 | |
|---|---|---|
| Corporate tax | 479 | 281 |
| Value Added Tax | 797 | 940 |
| Income tax | 51 | 73 |
| Payables to customs | 710 | - |
| Other taxes | 37 | 21 |
| Total: | 2 074 | 1 315 |
| December 31, 2022 | December 31, 2021 | |
|---|---|---|
| Liabilities for participations | 535 | 665 |
| Warranty service provisions | 502 | 300 |
| Guarantees/Rental deposits | 61 | 61 |
| Total other liabilities | 1 098 | 1 026 |
Allterco AD was registered in 2010. The share capital of the Parent Company as of December 31, 2022, amounts to BGN 17,999,999 (seventeen million nine hundred ninety-nine thousand nine hundred ninety-nine) and is distributed in 17,999,999 (seventeen million nine hundred ninety-nine thousand nine hundred ninety- nine) ordinary registered shares with par value of BGN 1 each. The share capital is fully paid in four instalments:
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2022
UIC 201047670
All amounts are in thousand Bulgarian leva unless otherwise stated
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail.
Page 48 of 71
The first issue was made upon the establishment of the Parent Company in the form of a non-monetary contribution in the amount of BGN 50,000 consisting ordinary registered voting shares of Teravoice AD’s capital. In 2010 a second non-monetary contribution was made in the amount of BGN 5,438,000 with the objective to acquire shares from the capital of Tera Communications AD at the total cash value of BGN 5 438 000. At the end of 2015, a new issue of 8,012,000 (eight million and twelve thousand) ordinary registered voting shares was issued, with a nominal value of BGN 1 (one) each. At the end of 2016 the capital of ALLTERCO AD was increased with a new issue in the amount of 1,500,000 (one million and five hundred thousand) shares on the basis of a successful initial public offering, according to the Prospectus for public offering of shares, approved by the Financial Supervision Commission with Decision No 487 – Е of 08.07.2016 entered in the Commercial Register under No.20161108100414 of 08.11.2016. In 2020 the capital of the Parent Company was increased by cash contributions in the total amount of 2,999,999 (two million nine hundred ninety-nine thousand nine hundred and ninety-nine) against 2,999,999 (two million nine hundred ninety-nine thousand nine hundred and ninety-nine) subscribed and paid dematerialized ordinary registered voting shares with a nominal value of BGN 1 as a result of a procedure for Public Offering of a new issue of shares. The public offering of shares from the capital increase of Allterco AD was carried out in the period September 28, 2020 – October 30, 2020 on the basis of a Prospectus, together with the supplements to it, confirmed by the Financial Supervision Commission with Decision No 148 -F of February 18, 2020, Decision No 405 - E of June 11, 2020, Decision No 601 - E of August 13, 2020 and Decision No 791 -E of October 29, 2020.
As of December 31, 2022, the shareholders of the Parent Company are:
| Name/business name | Number of share | % of the share capital |
|---|---|---|
| Svetlin Todorov | 5 847 120 | 32.48% |
| Dimitar Dimitrov | 5 847 120 | 32.48% |
| Individuals, holding less than 5 % of the capital | ||
| Other physical persons and legal entities | 6 305 759 | 35.04% |
| Total | 17 999 999 | 100.00% |
On June 30, 2022, the Allterco AD acquired 40,000 own shares at a price of BGN 19.50 per share, (total for BGN 780 thousand) representing 0.22% of the registered capital through over-the-counter transactions (OTC transactions) from two independent shareholders. The shares are intended to provide payment of part of the acquisition price of the Slovenian IoT company GOAP d.o.o. Nova Gorica (GOAP).
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2022
UIC 201047670
All amounts are in thousand Bulgarian leva unless otherwise stated
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail.
Page 49 of 71
| Year ended December 31, 2022 | Year ended December 31, 2021 (restated) | |
|---|---|---|
| Balance as of January 1 | 39 324 | 26 938 |
| Net profit | 17 433 | 15 892 |
| Profit distribution for dividends | (1 800) | (3 600) |
| Effect from sale of subsidiaries | - | 94 |
| Other changes | 160 | - |
| Balance at the period end | 55 117 | 39 324 |
| Year ended December 31, 2022 | Year ended December 31, 2021 | |
|---|---|---|
| Balance as of January 1 | 1 800 | 1 500 |
| Transfer of reserves from share issue | - | 300 |
| Balance at the period end | 1 800 | 1 800 |
As of December 31, 2022, the reserves from issue of shares of the Company amount to BGN 5 403 thousand. They are formed by the excess of the proceeds from new shares issued in 2020 above their nominal value, amounting to BGN 6 000 thousand, reduced by the costs related to the capital increase, amounting to BGN 297 thousand and by BGN 300 thousand that were transferred to Legal reserves by a decision of General Meeting of Shareholders held on June 28, 2021.
| Year ended December 31, 2022 | Year ended December 31, 2021 | |
|---|---|---|
| Balance at the beginning of the period | 1 036 | 4 849 |
| Reserve transferred to retained earnings | (160) | (240) |
| Reserve related to long-term equity instruments at fair value through other comprehensive income, gross | (1 439) | (3 573) |
| Deferred tax | 56 | - |
| Balance at the period end | (507) | 1 036 |
The reserve related to long-term equity instruments was reduced by BGN 1,543 thousand as a result of a fair value revaluation of other long-term capital instruments as of December 31, 2022 and as a result of the sale of some capital instruments during the reporting period.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2022
UIC 201047670
All amounts are in thousand Bulgarian leva unless otherwise stated
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail.
Page 50 of 71
| Year ended December 31, 2022 | Year ended December 31, 2021 | |
|---|---|---|
| Devices | Services and rent | |
| Total | Produc tion | |
| REVENUE | ||
| 93 007 | 171 | |
| 93 178 | 108 | |
| 58 723 | 678 | |
| 59 509 | ||
| Book value of goods sold | (44 719) | - |
| (44 719) | - | |
| (24 964) | - | |
| (24 964) | ||
| Costs | (1 608) | - |
| (1 608) | - | |
| (1 525) | (233) | |
| (1 758) | ||
| COST OF SALES | (46 327) | - |
| (46 327) | - | |
| (26 489) | (233) | |
| (26 722) | ||
| GROSS PROFIT | 46 680 | 171 |
| 46 851 | 108 | |
| 32 234 | 445 | |
| 32 787 |
| Year ended December 31, 2022 | Year ended December 31, 2021 | |
|---|---|---|
| Revenue from sales of Shelly devices to В2В clients | 72 309 | 46 621 |
| Revenue from sales of Shelly devices to retail clients – through Internet | 16 135 | 8 640 |
| Revenue from sales of Myki devices to В2В clients | 4 157 | 3 297 |
| Revenue from sales of Myki devices to retail clients – through Internet | 267 | 203 |
| Revenue from sales of Shelly devices to retail clients – direct sales | 91 | 28 |
| Revenue from sales of Myki devices to retail clients – direct sales | 48 | 42 |
| Revenue from services and rent | 171 | 678 |
| Total: | 93 178 | 59 509 |
The Group manages the business with electronic devices as one operating segment. The only revenue not pertaining to that segment is revenue from services and rent.# NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2022
UIC 201047670
All amounts are in thousand Bulgarian leva unless otherwise stated
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail.
Page 51 of 71
The Group’s revenue from external customers and information about its segment assets (non-current assets excluding financial instruments, deferred tax assets and other financial assets) by geographical location are detailed below:
| Year ended December 31, 2022 | Year ended December 31, 2021 | |
|---|---|---|
| Revenue from sales in European Union | 71 800 | 45 087 |
| Revenue from sales in third countries | 15 876 | 11 903 |
| Revenue from sales in Bulgaria | 5 331 | 1 842 |
| Total | 93 109 | 58 831 |
| Year ended December 31, 2022 | Year ended December 31, 2021 | |
|---|---|---|
| Non-current assets in Bulgaria | 11 642 | 12 955 |
| Non-current assets in European Union | 18 | - |
| Non-current assets in third countries | 32 | 36 |
| Total | 11 692 | 12 991 |
Included in revenues arising from European Union are revenues from a single customer who is the only customer that contributed 10% or more to the Group’s revenue in either 2022 or 2021:
| Year ended December 31, 2022 | Year ended December 31, 2021 | |
|---|---|---|
| Revenue | Share | |
| Allnet GmbH, Germany | 18,036 | 19.36% |
| Year ended December 31, 2022 | Year ended December 31, 2021 | |
|---|---|---|
| Profit / loss on sale of assets | - | (23) |
| Rentals and overheads | - | - |
| Liabilities written-off | 39 | 40 |
| Financing/ electricity price compensations | 26 | - |
| Gains on currency transactions and exchange rate gains, net | 734 | 866 |
| Other operating income | 213 | 473 |
| Total: | 1 012 | 1 358 |
| Year ended December 31, 2022 | Year ended December 31, 2021 (restated) | |
|---|---|---|
| Materials | (509) | (190) |
| Hired services | (3 521) | (2 478) |
| Depreciation/amortization expenses | (506) | (193) |
| Employees expenses | (14 644) | (7 590) |
| Other administrative expenses | (1 255) | (1 637) |
| Total: | (20 435) | (12 088) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2022
UIC 201047670
All amounts are in thousand Bulgarian leva unless otherwise stated
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail.
Page 52 of 71
| Year ended December 31, 2022 | Year ended December 31, 2021 | |
|---|---|---|
| Write-off | 1 444 | 97 |
| Impairment | 441 | 237 |
| Total | 1 885 | 334 |
| Year ended December 31, 2022 | Year ended December 31, 2021 | |
|---|---|---|
| Bank fees and charges | (367) | (134) |
| Prototypes written-off | (263) | - |
| Interest, fines and penalties | (53) | (19) |
| Warranty service provision | (502) | (300) |
| Donations | - | (15) |
| Other | - | (63) |
| Total: | (1 185) | (531) |
Movement in warranty service provision is as follows:
| Year ended December 31, 2022 | Year ended December 31, 2021 | |
|---|---|---|
| Liabilities for provisions at the beginning of the period | 300 | 250 |
| Provision charged during the period | 502 | 300 |
| Provisions used during the period | (300) | (250) |
| Liabilities for provisions at the period end | 502 | 300 |
| Year ended December 31, 2022 | Year ended December 31, 2021 | |
|---|---|---|
| Gains on the sale of financial assets, incl.: | ||
| - Income from sale of investments | - | 250 |
| - Carrying amount | - | (4 526) |
| Total | - | 250 |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2022
UIC 201047670
All amounts are in thousand Bulgarian leva unless otherwise stated
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail.
Page 53 of 71
| Year ended December 31, 2022 | Year ended December 31, 2021 | |
|---|---|---|
| Losses on the operations with financial assets, incl.: | (119) | - |
| - Income from sale of financial assets | 236 | - |
| - Carrying amount of assets sold | (355) | - |
| Lease interest | (4) | (2) |
| Loans interest | (65) | (76) |
| Banking financial services | (77) | (45) |
| Other interest | - | (3) |
| Total: | (265) | (126) |
| Year ended December 31, 2022 | Year ended December 31, 2021 | |
|---|---|---|
| Current tax expense | (3 017) | (2 755) |
| Tax effect from temporary differences | 220 | (5) |
| Tax expense | (2 797) | (2 760) |
| Year ended December 31, 2022 | Year ended December 31, 2021 | |
|---|---|---|
| Profit before tax | 20,230 | 18,652 |
| Tax rate | 10% | 10% |
| Expected income tax expense | (2,023) | (1,865) |
| Non-taxable income and unrecognized expenses for tax purposes and effect of differences in applied tax rates | (774) | (895) |
| Income tax expense | (2,797) | (2,760) |
| Year ended December 31, 2022 | Year ended December 31, 2021 | |
|---|---|---|
| Income tax expense includes: | ||
| Current income tax | (3,017) | (2,755) |
| Deferred tax expenses: | ||
| Tax effect from temporary differences | 220 | (5) |
| Income tax expense | (2,797) | (2,760) |
| Effective tax rate | 13.83% | 14.80% |
| Income tax expense, recognized in the consolidated statement of comprehensive income | (2,797) | (2,760) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2022
UIC 201047670
All amounts are in thousand Bulgarian leva unless otherwise stated
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail.
Page 54 of 71
Deferred taxes as of December 31, 2022 and December 31, 2021:
| Year ended December 31, 2022 | Year ended December 31, 2021 | |
|---|---|---|
| Deferred tax assets | ||
| Compensated leave | 20 | 2 |
| Impairment of receivables | 44 | 23 |
| Pension expenses | 12 | - |
| Audit expenses | 11 | - |
| Income of individuals | 120 | - |
| Provisions | 51 | 30 |
| Other | 9 | 2 |
| Deferred tax liabilities | ||
| Impairment of receivables | (15) | - |
| Impairment of investments | (437) | - |
| Provisions | (30) | (25) |
| Other | (2) | (8) |
| Deferred tax income/(expense) | 220 | (413) |
| Year ended December 31, 2022 | Year ended December 31, 2021 | |
|---|---|---|
| Net profit | 17 433 | 15 892 |
| Weighted-average number of shares | 17 979 835 | 17 999 999 |
| Basic earnings per share | 0.97 | 0.88 |
As of December 31, 2022 the Parent Company holds 40 000 own shares, which are taken into account in determining the weighted-average earnings per share for 2022. Earnings per share without taking into account the held own shares is BGN 0.97.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2022
UIC 201047670
All amounts are in thousand Bulgarian leva unless otherwise stated
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail.
Page 55 of 71
| Contract Annex | Creditor | Debtor | Joint debtor / Guarantor | Amount / Limit | Financial conditions | Maturity | Collateral provided by the borrower |
|---|---|---|---|---|---|---|---|
| Investment loan August 25, 2017 Agreement pursuant to Art. 114, para. 10 of POSA Annexes No. 1/ October 31, 2018 | KBC Bank | Allterco AD | Allterco Properties EOOD – joint debtor | BGN 3 168 thousand. (EUR 1 620 thousand) | Fixed interest rate for the whole period 3% per year; Management fee | February 10, 2028 | Mortgage on real estate owned by Allterco Properties EOOD; Pledge of receivables on bank accounts of Allterco AD in the bank. Pledge under the Financial Collateral Contracts Act ; |
| Overdraft September 30, 2019 – Agreement pursuant to Art. 114, para. 10 of POSA Annexes No 1/ August 28, 2020 | KBC Bank | Allterco Robotics EOOD | Allterco AD – guarantor | BGN 1 955 thousand (EUR 1 million) | One-month EURIBOR, increased by 2.5 percentage points, but not less than 2.5%; management fee; commitment fee; commission for issuing guarantees | September 29, 2023 | Pledge of receivables on accounts of Allterco Robotics EOOD in bank |
| Contract for a standard investment loan No 2757 of 28.09.2020 - DSK Bank AD | DSK Bank AD | Allterco Properties EOOD | Allterco Trading EOOD – joint debtor | BGN 880 thousand (EUR 450 thousand) | Annual interest formed by a variable interest rate of 1m EURIBOR+2.1% premium, but not less than 2.1%; annual management fee; | September 28, 2024. | Mortgage on real estate owned by Allterco Properties EOOD; Pledge of receivables on bank accounts of the company and Allterco Trading EOOD in DSK Bank. |
On July 29, 2022, Allterco AD concluded with the four owners of the capital of GOAP d.o.o. (“GOAP”) (one legal entity and three individuals) a binding preliminary agreement (Term Sheet) regarding the main conditions and terms for the acquisition of the Slovenian IoT provider. The transaction was finalized on January 4, 2023 (for further information see note 11).
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2022
UIC 201047670
All amounts are in thousand Bulgarian leva unless otherwise stated
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail.
Page 56 of 71
The contingent liabilities as of December 31, 2021 include:
| Contract Annex | Creditor | Debtor | Joint debtor / Guarantor | Amount / Limit | Financial conditions | Maturity | Collateral provided by the borrower |
|---|---|---|---|---|---|---|---|
| Investment loan August 25, 2017 Agreement pursuant to Art. 114, para. 10 of POSA Annexes No. 1/ October 31, 2018 | Raiffeisenbank Bulgaria ЕАD | Allterco AD | Allterco Properties EOOD – joint debtor | BGN 3 168 thousand. (EUR 1 620 thousand) | Fixed interest rate for the whole period 3% per year; Management fee | February 10, 2028 | Mortgage on real estate owned by Allterco Properties EOOD; Pledge of receivables on bank accounts of the Allterco AD in the bank. Pledge under the Financial Collateral Contracts Act; |
| Overdraft September 30, 2019 – Agreement pursuant to Art. 114, para. 10 of POSA Annexes No 1/ August 28, 2020 | Raiffeisenbank Bulgaria ЕАD | Allterco Robotics EOOD | Allterco AD – guarantor | BGN 1 956 thousand (EUR 1 million) | One-month EURIBOR, increased by 2.5 percentage points, but not less than 2.5%; management fee; commitment fee; commission for issuing guarantees | September 29, 2022 | Pledge of receivables of Allterco Robotics EOOD |
| Contract for a standard investment loan No 2757 of 28.09.2020 - DSK Bank AD | DSK Bank AD | Allterco Propertie s EOOD | Allterco Trading EOOD – joint debtor | BGN 880 thousand (EUR 450 thousand) | Annual interest formed by a variable interest rate of 1m EURIBOR+2.1% premium, but not less than 2.1%; annual management fee; | September 28, 2024. | Mortgage on real estate owned by Allterco Properties EOOD; Pledge of receivables on bank accounts of the company and Allterco Trading EOOD in DSK Bank. |
UIC 201047670
All amounts are in thousand Bulgarian leva unless otherwise stated
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail.
Page 57 of 71
During the reporting period Allterco AD has no transactions concluded with interested parties within the meaning of the POSA. Allterco has no transactions which are beyond of its ordinary business activity or significantly deviate from market conditions with its subsidiaries and associated companies. Transactions with subsidiaries within its ordinary business activity are excluded from consolidation.
During the reporting period the members of the Board of Directors of the Parent Company received gross renumeration totaling BGN 750 thousand (2021: BGN 130 thousand.) from Allterco AD.
During the reporting period the following members of the Board of Directors have received gross remuneration from the subsidiaries, as follows:
The remuneration paid was in accordance with the disclosed Remuneration policy and the changes made in the number and composition of the members of the Board of Directors of the Parent Company, were adopted at the extraordinary General Meeting held on April 8, 2022. At the General Meeting of Shareholders held on December 13, 2022, a decision was adopted to amend the Remuneration policy, as well as schemes were approved to provide members of the Board of Directors of Allterco AD with variable remuneration in shares of the Parent Company for the period 2022 - 2025.
The structure of the financial assets and liabilities by categories is as follows:
December 31, 2022
| Financial assets at amortized cost - Cash | Financial assets at amortized cost | Financial assets at fair value through other comprehensive income | Financial assets at fair value through profit or loss | Total | |
|---|---|---|---|---|---|
| Financial assets according to the Statement of financial position | |||||
| Cash and cash equivalents | 28 148 | - | - | 28 148 | |
| Other long - term capital investments | - | - | 830 | - | 830 |
| Long term trade receivables | - | 1 027 | - | - | 1 027 |
| Short-term financial assets | 175 | 175 | |||
| Trade receivables | - | 19 776 | - | - | 19 776 |
| Deposits in commercial companies and guarantees | - | 104 | - | - | 104 |
| TOTAL FINANCIAL ASSETS | 28 148 | 21 082 | 830 | - | 50 060 |
| Financial liabilities according to the Statement of financial position | |||||
| Financial liabilities at amortized cost | |||||
| Lease liabilities | 318 | 318 | |||
| Bank loans | 2 156 | 2 156 | |||
| Trade liabilities | 1 797 | 1 797 | |||
| Contributory obligations | 535 | 535 | |||
| Guarantees | 61 | 61 | |||
| TOTAL FINANCIAL LIABILITIES | 4 867 | - | 4 867 |
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail.
Page 58 of 71
December 31, 2021
| Financial assets at amortized cost - Cash | Financial assets at fair value through profit or loss | Total | |
|---|---|---|---|
| Financial assets according to the Statement of financial position | |||
| Cash and cash equivalents | 30 541 | - | 30 541 |
| Other long - term capital investments | - | 2 624 | 2 624 |
| Long term trade receivables | - | 2 054 | 2 054 |
| Trade receivables | - | 12 405 | 12 405 |
| Deposits in commercial companies and guarantees | - | 22 | 22 |
| TOTAL FINANCIAL ASSETS | 30 541 | 17 105 | 47 646 |
| Financial liabilities according to the Statement of financial position | |||
| Financial liabilities at amortized cost | |||
| Lease liabilities | 138 | - | 138 |
| Bank loans | 2 579 | - | 2 579 |
| Trade liabilities | 1 001 | - | 1 001 |
| Contributory obligations | 665 | - | 665 |
| Guarantees | 61 | - | 61 |
| TOTAL FINANCIAL LIABILITIES | 4 444 | - | 4 444 |
The fair value of the bank loan that the Group is using, is determined based on market interest rate applicable for similar instruments with similar term. The Group does not work with derivative instruments.
In the course of their usual business activity, the companies of the Group may be exposed to various financial risks, the most important of which are: market risk (including currency risk, interest rate risk and price risk), credit risk and liquidity risk. The overall risk management is focused on forecasting changes in financial markets in order to minimize the potential negative effects that could affect the financial results. Financial risks are currently identified, measured and monitored using various control mechanisms to adequately assess market conditions and their effects by the companies of the Group to avoid unjustified concentration of any specific risk. Risk management is carried out on an ongoing basis under the direct supervision of the management and the Group's financial experts in accordance with the policy set by the Board of Directors of the Parent Company who developed the basic principles of general financial risk management.
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail.
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Based on these principles, the specific procedures for managing separate specific financial risks have been defined. The following describes the different types of risks to which the companies within the Group are exposed, as well as the approach taken in managing these risks.
Market risk is the risk that the fair value or future cash flows of financial instruments will fluctuate due to changes in market prices.
a. Currency risk
The companies within the Group carry out their transactions on the domestic market, in the European Union and in third countries (Asia and USA). The companies within the Group carry out their main deliveries in Bulgarian leva, euros and US dollars. To control the currency risk, a system has been introduced for planning supplies from countries in and outside the European Union, as well as procedures for monitoring movements in exchange rates of foreign currencies and control of incoming payments.
The tables below summarize the currency risk exposure:
December 31, 2022
| In EUR | In USD | In other foreign currency | In BGN | Total | |
|---|---|---|---|---|---|
| Total Assets | |||||
| Cash and cash equivalents | 13 160 | 8 640 | 604 | 5 744 | 28 148 |
| Long-term trade receivables | 1 027 | - | - | - | 1 027 |
| Other long-term equity instruments | - | - | 830 | - | 830 |
| Short-term financial assets | 175 | - | - | - | 175 |
| Trade receivables | 16 797 | 1 595 | 9 | 1 375 | 19 776 |
| Deposits in commercial companies | - | - | - | 104 | 104 |
| TOTAL ASSETS | 31 159 | 10 235 | 1 443 | 7 223 | 50 060 |
| Total Liabilities | |||||
| Lease liabilities | 128 | - | - | 190 | 318 |
| Bank loans | 2 007 | 149 | - | - | 2 156 |
| Trade payables | 448 | 355 | - | 994 | 1 797 |
| Contributory obligations | - | - | - | 535 | 535 |
| Guarantees | - | - | - | 61 | 61 |
| TOTAL LIABILITIES | 2 583 | 504 | - | 1 780 | 4 867 |
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail.
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December 31, 2021
| In EUR | In USD | In other foreign currency | In BGN | Total | |
|---|---|---|---|---|---|
| Total Assets | |||||
| Cash and cash equivalents | 6 180 | 11 063 | - | 13 298 | 30 541 |
| Long-term trade receivables | 2 054 | - | - | - | 2 054 |
| Other long-term equity instruments | - | - | 2 624 | - | 2 624 |
| Trade receivables | 10 036 | 1 344 | 419 | 606 | 12 405 |
| Deposits in commercial companies | - | 11 | - | 11 | 22 |
| ОБЩО АКТИВИ | 18 270 | 12 418 | 3 043 | 13 915 | 47 646 |
| Total Liabilities | |||||
| Lease liabilities | 18 | - | - | 120 | 138 |
| Bank loans | 2 517 | 62 | - | - | 2 579 |
| Trade payables | 440 | 68 | - | 493 | 1001 |
| Contributory obligations | - | - | - | 665 | 665 |
| Guarantees | - | - | - | 61 | 61 |
| TOTAL LIABILITIES | 2 975 | 130 | - | 1 339 | 4 444 |
Currency sensitivity analysis
The companies within the Group are not exposed to currency risk in relation to their exposures in euro, because the exchange rate of the BGN to EUR is fixed. There is a currency risk exposure mainly in USD and Norway kroner (NOK). As of 31.12.2022 62% of Groups assets are in EUR, 22% in USD and 1.3% in Norwegian krone. In the table below, a sensitivity analysis is presented to the possible changes in the exchange rate BGN/USD and BGN/NOK and the profit before taxes (through changes in the book values of monetary assets and liabilities), provided that all other variables are assumed to be constant.
| Increase/ Decrease in exchange rate BGN/ USD | Effect on the profit before tax | Increase/ Decrease in exchange rate BGN/ NOK | Effect on profit before tax | |
|---|---|---|---|---|
| % | % | % | % | |
| 2022 | +/-1.00% | 102 | +/-1.00% | 14 |
| 2021 | +/-1.00% | 124 | +/-1.00% | 30 |
The change in the exchange rate of the Norwegian krone also has an effect on other components of equity. With a 1% change in the exchange rate, the effect on other capital components, provided that all other variables are assumed to be constant, would be BGN 8 thousand.
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail.
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b. Price risk
The companies within the Group are exposed to a specific price risk regarding the prices of the goods and services offered. Minimizing the price risk for negative price changes is achieved by periodically reviewing contractual relationships and revising and updating prices in relation to market changes. The Group owns shares that are subject to trading on a regulated market, and during 2021 and 2022 the Group sold part of its shares. For the remainder of the shares, the Group is exposed to risks of negative changes on the regulated market in Norway.As of December 31, 2022, the Group owns 593,536 shares of the capital of Link Mobility Group, which are traded on a regulated market. The value of one share at market close as of 30.12.2022 is NOK 7.52, or the total value of the owned securities amounts to NOK 4,057,311 (BGN 830 thousand). If the quote changes by 1%, the value of the shares will change by NOK 40,573 (BGN 7 thousand).
c. Risk of the interest-bearing cash flows
The companies within the Group do not have a significant concentration of interest-bearing assets, except for cash on current accounts with banks; therefore, the revenue and operating cash flows are not largely dependent on changes in market interest rates. At the same time, the cash outflows of the companies within the Group are exposed to interest rate risk from utilizing bank loans and leases, agreed with a variable interest rate (1M EURIBOR). Cash on current accounts with banks bears interest at interest rates according to the tariffs of the respective banks. The exposure of the companies within the Group is currently monitored and analyzed to changes in market interest rates. Different refinancing scenarios, renewal of existing interest-bearing positions, and alternative financing are considered.
| December 31, 2022 | ||||
|---|---|---|---|---|
| Interest-free | With floating interest % | With fixed interest % | Total | |
| Cash and cash equivalents | - | - | 28,148 | 28,148 |
| Short-term financial assets | 175 | - | - | 175 |
| Trade receivables | 19,776 | - | - | 19,776 |
| Long term trade receivables | 1,027 | - | - | 1,027 |
| Deposits in commercial companies and guarantees | 104 | - | - | 104 |
| TOTAL ASSETS | 21,082 | - | 28,148 | 49,230 |
| Lease liabilities | - | - | 318 | 318 |
| Bank loans | - | 541 | 1,615 | 2,156 |
| Trade payables | 1,797 | - | - | 1,797 |
| Contributory obligations | 535 | - | - | 535 |
| Guarantees | 61 | - | - | 61 |
| TOTAL LIABILITIES | 2,393 | 541 | 1,933 | 4,867 |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2022
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This document is a translation of the original Bulgarian text; in case of divergence, the Bulgarian text shall prevail.
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| December 31, 2021 | ||||
|---|---|---|---|---|
| Interest-free | With floating interest % | With fixed interest % | Total | |
| Cash and cash equivalents | - | - | 30,541 | 30,541 |
| Trade receivables | 12,405 | - | - | 12,405 |
| Long term trade receivables | 2,054 | - | - | 2,054 |
| Deposits in commercial companies and guarantees | 22 | - | - | 22 |
| TOTAL ASSETS | 14,481 | - | 30,541 | 45,022 |
| Lease liabilities | - | - | 138 | 138 |
| Bank loans | - | 679 | 1,900 | 2,579 |
| Trade payables | 1,001 | - | - | 1,001 |
| Contributory obligations | 665 | - | - | 665 |
| Guarantees | 61 | - | - | 61 |
| TOTAL LIABILITIES | 1,727 | 679 | 2,038 | 4,444 |
Credit risk
The financial assets of the companies within the Group are concentrated in two groups: cash (cash on hand and at bank accounts) and receivables from clients. Credit risk is mainly the risk that the customers of the companies within the Group will not be able to pay in full and within the usual deadlines the amounts owed by them. Trade receivables are presented in the consolidated statement of financial position at amortized cost. An impairment has been charged for doubtful and uncollectible loans, as there have been events identifying uncollectible losses based on past experience. The companies within the Group do not have a significant concentration of credit risk. Their policy is to negotiate a credit period longer than 60 days only with customers who have a long history and commercial cooperation with them. Payments from customers for sales are mainly made by bank transfer. A significant part of the Group’s revenue is generated by mobile operators or other customers, which in most cases are large companies with good credit rating. The collection and concentration of receivables is monitored on an ongoing basis, according to the established policy of the companies within the Group. For this purpose, the open positions by clients, as well as the received receipts, are periodically reviewed by the financial and accounting department and the management, and an analysis of the unpaid amounts is performed. As of December 31, 2022, cash and the payment operations of the companies within the Group are spread over several banks, which limits the risk for cash and cash equivalents. Management has defined its policy for assessing credit losses. For trade receivables, the simplified method is applied, with percentages determined based on past experience.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2022
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This document is a translation of the original Bulgarian text; in case of divergence, the Bulgarian text shall prevail.
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As of December 31, 2022, receivables amounting to BGN 1,444 thousand are reported as written-off by the Group, and BGN 152 thousand are recognised as impairment of receivables. As of December 31, 2021, receivables amounting to BGN 97 thousand are reported as written-off, and BGN 237 thousand are recognised as impairment of receivables. (Note 4.04).
Group’s credit risk exposure arising from its financial assets as of December 31, 2022 and December 31, 2021 is presented below:
| As of December 31, 2022 | As of December 31, 2021 | |
|---|---|---|
| Cash and cash equivalents | 28,148 | 30,541 |
| Long-term trade receivables | 1,027 | 2,054 |
| Short-term financial assets | 175 | - |
| Trade receivables | 19,776 | 12,405 |
| Total | 49,126 | 45,000 |
The impairment staging of the financial assets of the Company as of December 31, 2022 and December 31, 2021.
31.12.2022
| Stage 1 | Stage 2 | Stage 3 | Total | |
|---|---|---|---|---|
| Financial assets | ||||
| Cash and cash equivalents | 28,148 | - | - | 28,148 |
| Long-term trade receivables | 1,027 | - | - | 1,027 |
| Short-term financial assets | 175 | - | - | 175 |
| Trade receivables | 19,452 | - | 850 | 20,302 |
| Total | 48,802 | - | 850 | 49,652 |
| Booked provisions (ECL) for financial assets | (50) | - | (476) | (526) |
| Financial assets, net of booked provisions | 48,752 | - | 374 | 49,126 |
31.12.2021
| Stage 1 | Stage 2 | Stage 3 | Total | |
|---|---|---|---|---|
| Financial assets | ||||
| Cash and cash equivalents | 30,541 | - | - | 30,541 |
| Long-term trade receivables | 2,054 | - | - | 2,054 |
| Trade receivables | 11,792 | - | 850 | 12,642 |
| Total | 44,387 | - | 850 | 45,237 |
| Booked provisions (ECL) for financial assets | - | - | (237) | (237) |
| Financial assets, net of booked provisions | 44,387 | - | 613 | 45,000 |
The changes in the gross carrying amount of the financial assets are presented below:
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2022
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This document is a translation of the original Bulgarian text; in case of divergence, the Bulgarian text shall prevail.
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| Gross carrying amount of the financial instruments | Stage 1 - expected credit loss for 12 months period | Stage 2 - expected credit loss for the period of the financial asset life | Stage 3 - expected credit loss for the period of the financial asset life | TOTAL |
|---|---|---|---|---|
| Gross carrying amount as of December 31, 2021 | 40,758 | - | 4,327 | 45,085 |
| Changes during the period: | ||||
| Transfer from Stage 1 to Stage 2 | - | - | - | - |
| Transfer from Stage 1 to Stage 3 | - | - | - | - |
| Transfer from Stage 2 to Stage 3 | - | - | - | - |
| New financial assets | 363,872 | - | - | 363,872 |
| Maturity of financial assets | (355,828) | - | (3,477) | (359,305) |
| Gross carrying amount as of December 31, 2022 | 48,802 | - | 850 | 49,652 |
| Gross carrying amount of the financial instruments | Stage 1 - expected credit loss for 12 months period | Stage 2 - expected credit loss for the period of the financial asset life | Stage 3 - expected credit loss for the period of the financial asset life | TOTAL |
|---|---|---|---|---|
| Gross carrying amount as of December 31, 2020 | 34,600 | - | - | 34,600 |
| Changes during the period: | ||||
| - | - | - | - | - |
| Transfer from Stage 1 to Stage 2 | (4,327) | - | 4,327 | - |
| Transfer from Stage 1 to Stage 3 | - | - | - | - |
| Transfer from Stage 2 to Stage 3 | 237,161 | - | - | 237,161 |
| New financial assets | (226,524) | - | - | (226,524) |
| Maturity of financial assets | 40,910 | - | 4,327 | 45,237 |
The changes in booked ECL provision for financial assets in 2022 and 2021 are presented below:
| Stage 1 - expected credit loss for 12 months period | Stage 2 - expected credit loss for the period of the financial asset life | Stage 3 - expected credit loss for the period of the financial asset life | TOTAL | |
|---|---|---|---|---|
| ECL provision as of December 31, 2021 | - | - | (237) | (237) |
| Changes during the period: | ||||
| Transfer from Stage 1 to Stage 2 | - | - | - | - |
| Transfer from Stage 1 to Stage 3 | (50) | - | (391) | (441) |
| Transfer from Stage 2 to Stage 3 | - | - | - | - |
| New financial assets | - | - | - | - |
| Maturity of financial assets | - | - | 152 | 152 |
| ECL provision as of December 31, 2022 | (50) | - | (476) | (526) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2022
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All amounts are in thousand Bulgarian leva unless otherwise stated
This document is a translation of the original Bulgarian text; in case of divergence, the Bulgarian text shall prevail.
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| Stage 1 - expected credit loss for 12 months period | Stage 2 - expected credit loss for the period of the financial asset life | Stage 3 - expected credit loss for the period of the financial asset life | TOTAL | |
|---|---|---|---|---|
| ECL provision as of December 31, 2020 | - | - | - | - |
| Changes during the period: | ||||
| Transfer from Stage 1 to Stage 2 | - | - | - | - |
| Transfer from Stage 1 to Stage 3 | - | - | (237) | (237) |
| Transfer from Stage 2 to Stage 3 | - | - | - | - |
| New financial assets | - | - | - | - |
| Maturity of financial assets | - | - | - | - |
| ECL provision as of December 31, 2021 | - | - | (237) | (237) |
Liquidity risk
Liquidity risk is the risk that the Group experiences difficulties meeting its obligations with respect to financial liabilities settled with cash or another financial asset. The companies within the Group carry out a conservative liquidity management policy, through which they constantly maintain an optimal liquid stock of cash. Borrowed credit resources are also used. In order to control the liquidity risk, the companies within the Group monitor the timely payment of the incurred liabilities according to agreed terms of payment. The Companies within the Group monitor and control the actual and projected cash flows for periods ahead and maintain a balance between the maturity limits of the assets and liabilities of the Company.# NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2022
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All amounts are in thousand Bulgarian leva unless otherwise stated
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail.
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Currently, the maturity and timely execution of payments is monitored by the finance and accounting departments, maintaining daily information on available cash and upcoming payments.
| December 31, 2022 | 1 m. | 1-3 m. | 3-6 m. | 6-12 m. | 1-2 y. | 2-5 y. | over 5 y. | Without maturity | total | |
|---|---|---|---|---|---|---|---|---|---|---|
| TOTAL ASSETS | 14 558 | 2 628 | 739 | 2 026 | 1 027 | - | - | 28 252 | 49 230 | |
| Cash and cash equivalents | - | - | - | - | - | - | - | 28 148 | 28 148 | |
| Short-term financial assets | 175 | - | - | - | - | - | - | - | 175 | |
| Trade receivables | 14 383 | 2 | 628 | 739 | 2 026 | - | - | - | 19 776 | |
| Long-term trade receivables | - | - | - | - | 1 027 | - | - | - | 1 027 | |
| Deposits in commercial companies and guarantees | - | - | - | - | - | - | - | 104 | 104 | |
| TOTAL LIABILITIES | 964 | 242 | 263 | 1 692 | 626 | 961 | 58 | 61 | 4 867 | |
| Lease liabilities | 14 | 27 | 40 | 80 | 157 | - | - | - | 318 | |
| Bank loans | 118 | 160 | 129 | 261 | 469 | 961 | 58 | - | 2 156 | |
| Trade payables | 822 | 35 | 64 | 876 | - | - | - | - | 1 797 | |
| Contributory obligations | 10 | 20 | 30 | 475 | - | - | - | - | 535 | |
| Guarantees | - | - | - | - | - | - | - | 61 | 61 |
| December 31, 2021 | 1 m. | 1-3 m. | 3-6 m. | 6-12 m. | 1-2 y. | 2-5 y. | over 5 y. | Without maturity | total | |
|---|---|---|---|---|---|---|---|---|---|---|
| TOTAL ASSETS | 9 173 | 455 | - | 2 902 | 1 027 | 1 027 | - | 30 438 | 45 022 | |
| Cash and cash equivalents | 125 | - | - | - | - | - | - | 30 541 | 30 541 | |
| Trade receivables | 9 048 | 455 | - | 2 902 | - | - | - | - | 12 405 | |
| Long-term trade receivables | - | - | - | - | 1 027 | 1 027 | - | - | 2 054 | |
| Deposits in commercial companies and guarantees | - | - | - | - | - | - | - | 22 | 22 | |
| TOTAL LIABILITIES | 900 | 223 | 223 | 949 | 550 | 1 156 | 382 | 61 | 4 444 | |
| Lease liabilities | 3 | 7 | 10 | 38 | 27 | 53 | - | - | 138 | |
| Bank loans | 48 | 109 | 158 | 256 | 523 | 1 103 | 382 | - | 2 579 | |
| Trade payables | 839 | 87 | 25 | 50 | - | - | - | - | 1 001 | |
| Contributory obligations | 10 | 20 | 30 | 605 | - | - | - | - | 665 | |
| Guarantees | - | - | - | - | - | - | - | 61 | 61 |
With the capital management the Parent Company aims to create and maintain opportunities for it to continue to operate as a going concern and to ensure the appropriate return on investment of shareholders, and to maintain optimal capital structure, to reduce capital expenses. Allterco AD currently monitors the capital structure based on the debt ratio. This ratio is calculated between the net debt capital and the total amount of capital. Net debt capital is defined as the difference between all borrowings (current and non-current) as stated in the consolidated statement of financial position and the cash and cash equivalents. The total amount of capital is equal to the equity and net debt capital.
The table below presents the debt ratios based on the capital structure:
| December 31, 2022 | December 31, 2021 | |
|---|---|---|
| Total debt capital, incl. | 9 725 | 6 903 |
| -Bank loans | 2 156 | 2 579 |
| -Lease liabilities | 318 | 138 |
| Less: cash and cash equivalents | 28 148 | 30 541 |
| Net debt capital | (18 423) | (23 638) |
| Total equity | 79 072 | 65 502 |
| Total capital | 60 649 | 41 864 |
| Debt ratio | 0.00% | 0.00% |
As the cash is larger than the debt capital, the Company has no indebtedness.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2022
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All amounts are in thousand Bulgarian leva unless otherwise stated
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail.
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For the purposes of disclosing fair value, the Group defines different classes of assets and liabilities depending on their nature, characteristics and risk and the respective level of the fair value hierarchy specified in note 2.12.18. Fair Values. The Group's management has considered that the book values of cash and cash equivalents, trade and other receivables approximate their fair values due to the short-term nature of these financial instruments. The attached table shows the book values and fair values of financial assets and liabilities, including their levels in the fair value hierarchy. Fair value information is not included if the book value is reasonably close to the fair value.
The table below presents the hierarchy of the fair value of the Group's assets and liabilities in accordance with IFRS 13:
December 31, 2022
| Book value | Level 1 | Level 2 | Level 3 | |
|---|---|---|---|---|
| Financial assets | ||||
| Other long-term capital investments | 830 | 830 | - | - |
| Cash and cash equivalents | 28 148 | - | 28 148 | - |
| TOTAL ASSETS | 28 978 | 830 | 28 148 | - |
| Financial liabilities | ||||
| Lease liabilities | 318 | - | 275 | - |
| Bank loans | 2 156 | - | 1 866 | - |
| TOTAL LIABILITIES | 2 474 | - | 2 141 | - |
December 31, 2021
| Book value | Level 1 | Level 2 | Level 3 | |
|---|---|---|---|---|
| Financial assets | ||||
| Cash and cash equivalents | 30 541 | - | 30 541 | - |
| Other long-term capital investments | 2 624 | 2 624 | - | - |
| Long-term trade receivables | 2 054 | - | - | - |
| TOTAL ASSETS | 35 219 | 2 624 | 30 541 | - |
| Financial liabilities | ||||
| Lease liabilities | 138 | - | 127 | - |
| Bank loans | 2 579 | - | 2 326 | - |
| TOTAL LIABILITIES | 2 717 | - | 2 453 | - |
The fair value of the financial liabilities included in Level 2 in the table above was determined in accordance with the generally accepted valuation model based on discounted cash flows, the interest rate on the loan was used as a discount factor.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2022
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All amounts are in thousand Bulgarian leva unless otherwise stated
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail.
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The fair value of trade receivables, short-term financial assets, trade payables and other liabilities approximates their carrying amount as these assets/liabilities are short-term in nature and there are not subject to effects, that lead to different fair value. The fair value of financial assets included in Level 1 is determined using the market quotation for the price of the asset at the reporting date.
When preparing the consolidated financial statements for 2022, the Group restated the comparative information as a result of error correction. As a result of the adjustments made, there were effects in the statement of financial position and in the statement of comprehensive income of the Group. Upon preparation of the consolidated financial statements for 2022 the Group identified that for 2021 (comparative information) a mistake is made in calculation and recognition of current for the period expenses related to hired services provided to foreign counterparties. It was identified that the Group has not recognized current expenses for 2021 at the amount of BGN 70 thousand. As a result of the corrections as of January 1, 2022 the amount of retained earnings was decreased by BGN 70 thousand. As of the moment of correction no tax effect had been originated.
The following tables summarize the effects on the Group’s consolidated financial statements:
| Before restatement as of 01.01.2022 | Restatement | After restatement as of 01.01.2022 | |
|---|---|---|---|
| Non-current assets | 12 991 | - | 12 991 |
| Current assets | 59 414 | - | 59 414 |
| Total assets | 72 405 | - | 72 405 |
| Share capital | 18 000 | - | 18 000 |
| Retained earnings | 39 394 | (70) | 39 324 |
| Legal reserves | 1 800 | - | 1 800 |
| Share premium reserve | 5 403 | - | 5 403 |
| Revaluation reserve | 1 036 | - | 1 036 |
| Foreign-exchange gains\losses on translation of financial statements of foreign operations | (61) | - | (61) |
| Total equity | 65 572 | (70) | 65 502 |
| Non-current liabilities | 2 087 | - | 2 087 |
| Current liabilities | 4 746 | 70 | 4 816 |
| Total liabilities | 6 833 | 70 | 6 903 |
| Total equity and liabilities | 72 405 | - | 72 405 |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2022
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All amounts are in thousand Bulgarian leva unless otherwise stated
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail.
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The effect of changes in the consolidated statement of other comprehensive income of the Group is presented below:
| Year ended 31.12.2021 Before restatement | Restatement | Year ended 31.12.2021 (restated) | |
|---|---|---|---|
| Total revenue | 61 289 | - | 61 289 |
| Total expenses | (42 567) | (70) | (42 637) |
| Tax expenses | (2 760) | - | (2 760) |
| Net profit for the year | 15 962 | (70) | 15 892 |
| Other comprehensive income | (3 914) | - | (3 914) |
| Total comprehensive income | 12 048 | (70) | 11 978 |
On January 4, 2023 Allterco AD announced the completion of phase I of the acquisition of the Slovenian IoT provider GOAP Računalniški inženiring in avtomatizacija procesov d.o.o. Nova Gorica, („GOAP”) representing the acquisition of 60% of acquiree’s equity. The transaction is subject to share purchase agreements ("SPA"), which have been signed with all four GOAP shareholders. The total transaction price for phase I amounts to EUR 2 million (BGN 3.9 million) and is paid in cash. The remaining 40% of the equity of GOAP, owned by the three owners – individuals, are subject to an options contract, which was signed along with the acquisition agreements. Under the options contract Allterco AD has an unconditional option to purchase (call option), whereas the sellers – conditional option to sell (put option) two packages of company shares (the exercise of any of the sellers’ options is subject to achieving in the period 2023-2025 of specific minimum criteria for KPI, EBITDA and revenue). One of the options is for the acquisition of 16%, whereas the other is for the acquisition of 24% of the equity of GOAP. The total price for the shares upon exercise of the options depends on the extent of realization of the conditions for this and may vary between EUR 699 999.70 (BGN 1 369 080.41) and EUR 3 449 998.60 (BGN 6 747 610.76). The transactions have been concluded in accordance with the decision of the General meeting of the shareholders of Allterco AD in December 2022. By the acquisition Allterco AD intends to expand its technological portfolio and thus expand the offering of products both for customers and professional users.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2022
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This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail.
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The net assets determined based on preliminary figures of GOAP at January 4, 2023 are as follows:
| January 4, 2023 | |
|---|---|
| Non-current assets | 356 |
| Inventory | 819 |
| Receivables | 766 |
| Cash and cash equivalents | 149 |
| Deferred revenue | 17 |
| Loans received | (828) |
| Current liabilities | (985) |
| Net Assets (A) | 295 |
| Non-controlling interest (40%) (B) | 118 |
| Consideration transferred in cash (C) | 3,912 |
| Goodwill (B+C- А) | 3,735 |
On January 16, 2023 Allterco AD disclosed that based on preliminary data for the financial results on consolidated basis by the end of the fourth quarter of 2022, Allterco AD reported an annual increase of 56.1% of the consolidated annual sales revenue of devices (including related services) for 2022, which amounts to EUR 47.5 million (BGN 92.9 million). Sales revenue of devices for home automation with the Shelly brand increased by 60.0%, reaching up to EUR 45.2 million (BGN 88.4 million), followed by the revenue from sales of devices for tracking MyKi, which increased by 20.6% up to EUR 2.2 million (BGN 4.3 million). With this sales revenue Allterco AD exceeds the forecast for 2022 sales revenue amounting to EUR 45-46 million.
On the grounds of art. 114a, para. 9 of the Public Offering of Securities Act (POSA) on 23.03.2023, Allterco AD announced that in connection with request for approval received under art. 114, par. 3 POSA, the Board of Directors of Allterco AD has approved and the public company has granted to the subsidiary GOAP a loan amounting to EUR 500 000 under the following conditions: repayment period 31.12.2029, interest – according to the statistical data published by the Bulgarian National Bank on "Interest rates and volumes on loan balances other than overdrafts, for non-financial corporations sector (in EUR for a period of more than 5 years)”. The loan provided is a special purpose loan and the funds provided under this loan should be used for: (i) repayment of amounts due under loans of the company provided by minority shareholders before acquisition, (ii) remuneration payments to key personnel; (iii) payments to suppliers and financing of working capital for the normal continuation of commercial activity in accordance with the approved GOAP budget and business plan; (iv) repayment of the loan granted to GOAP by Bank Nova KBM d.d. before the acquisition or provision of a guarantee in exchange for the guarantee provided by the GOAP Manager, Mr. Leon Krali.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2022
UIC 201047670
All amounts are in thousand Bulgarian leva unless otherwise stated
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail.
Page 71 of 71
After the end of the reporting period, Allterco AD has entered into a non-binding Term Sheet investment agreement on the essential parameters of an investment in Ground Solutions Group AD through participation in the capital increase and subscription of new preferred shares in the capital of its subsidiary Corner Solutions EOOD (the "Investment"), and namely - 625 new preferred company shares, representing 10% of the capital of "Corner Solutions" EOOD after the increase, against a price of EUR 100,000. The investment will be carried out jointly with Vitosha Venture Partners - Fund I KD, UIC: 206223492. Parties to the Term Sheet agreement are Vitosha Venture Partners - Fund I KD, UIC: 206223492, Ground Solutions Group AD, UIC: 206606897, Corner Solutions EOOD and three individuals holding 100% of the capital of Ground Solutions Group AD. The conclusion of an Investment Agreement is subject to further negotiations between the parties. No interested parties are involved in the transaction.
No other significant events have occurred after the reporting period, which require adjustments or disclosures in the Group’s consolidated financial statements for the year ended December 31, 2022.
Deloitte Audit OOD
UIC 121145199
103, Al. Stambolijski Blvd.
Sofia 1303 Bulgaria
Tel: +359 (2) 80 23 300
Fax: +359 (2) 80 23 350
www.deloitte.bg
Делойт Одит ООД
ЕИК 121145199
бул.”Ал.Стамболийски” 103
София 1303 България
Tел : +359 (2) 80 23 300
Факс : +359 (2) 80 23 350
www.deloitte.bg
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This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail.
INDEPENDENT AUDITOR’S REPORT
To the shareholders of Allterco AD
REPORT ON THE AUDIT OF THE CONSOLIDATED FINANCIAL STATEMENTS
Opinion
We have audited the accompanying consolidated financial statements of Allterco AD (the “ Parent Company”) and its subsidiaries (together the “Group”), which comprise the consolidated statement of financial position as at December 31, 2022, and the consolidated statement of comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, and notes to the consolidated financial statements, including significant accounting policies and other explanatory information.
In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as at December 31, 2022, and its consolidated financial performance and its consolidated cash flows for the year then ended in accordance with International Financial Reporting Standards ("IFRS"), as adopted by the European Union (“EU”).
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the consolidated financial statements section of our report. We are independent of the Group in accordance with the International Code of Ethics for Professional Accountants (including International Independence Standards) of the International Ethics Standards Board for Accountants (IESBA Code) together with the ethical requirements of the Independent Financial Audit Act (IFAA) that are relevant to our audit of the consolidated financial statements in Bulgaria, and we have fulfilled our other ethical responsibilities in accordance with the IESBA Code and the requirements of IFAA. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
| Key audit matter | How our audit addressed the key audit matter # REPORT OF INDEPENDENT AUDITOR
To the Shareholders of [Company Name]
We have audited the consolidated financial statements of [Company Name] (the “Group”), which comprise the consolidated statement of financial position as at December 31, 2022, the consolidated statements of comprehensive income, changes in equity and cash flows for the year then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies.
In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Group as at December 31, 2022, and its financial performance and its cash flows for the year then ended in accordance with IFRS as adopted by the EU.
We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements section of our report.
We are independent of the Group in accordance with the International Ethics Standards Board for Accountants’ International Code of Ethics for Professional Accountants (including International Independence Standards) and the ethical requirements that are relevant to our audit of the consolidated financial statements in [Jurisdiction], and we have fulfilled our other ethical responsibilities in accordance with these requirements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
[This section would typically detail specific Key Audit Matters. Since no specific matters are listed in the provided text, this section is left blank as per the instructions to not omit any text and keep content exactly as is.]
The consolidated financial statements of the Group for the year ended December 31, 2021, were audited by another auditor who expressed an unmodified opinion on those statements on April 29, 2022.
The Board of Directors of the Parent Company (the “Management”) is responsible for the other information. The other information comprises the annual report on activities and the corporate governance statement, prepared by the Management in accordance with Chapter Seven of the Accountancy Act, but does not include the consolidated financial statements and our auditor’s report thereon.
Our opinion on the consolidated financial statements does not cover the other information and we do not express any form of assurance conclusion thereon, unless it is not specifically stated in our auditor’s report and to the extent it is specifically stated.
In connection with our audit of the consolidated financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with IFRS as adopted by the EU, and for such internal control as Management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, Management is responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless Management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.
The Audit Committee of the Parent Company (“Those charged with governance”) is responsible for overseeing the Group’s financial reporting process.
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.
As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Reporting in relation to the compliance with the electronic format of the consolidated financial statements, included in the annual consolidated financial report on activities under Art. 100m, para 5 of the Public Offering of Securities Act (POSA) with the requirements of the European Single Electronic Format (ESEF) Regulation
We have performed a reasonable assurance engagement regarding the compliance of the electronic format of the Group's consolidated financial statements for the year ended December 31, 2022 attached in the electronic file "8945007IDGKD0KZ4HD95-20221231-EN-CON.zip", with the requirements of Commission Delegated Regulation (EU) 2019/815 of December 17, 2018 supplementing Directive 2004/109/EC of the European Parliament and of the Council by means of regulatory technical standards to define the European Single Electronic Format for reporting ("ESEF Regulation").
Our opinion is only with respect to the electronic format of the consolidated financial statements and does not cover the other information included in the annual consolidated financial report on activities under Art.100m, para 4 of the POSA.
The Management has prepared electronic format of the consolidated financial statements of the Group for the year ended December 31, 2022, in accordance with the ESEF Regulation to comply with the requirements of the POSA. The rules for preparing consolidated financial statements in this electronic format are set out in the ESEF Regulation and, in our opinion, have the characteristics of appropriate criteria for forming a reasonable assurance opinion.
The Group’s Management is responsible for the application of the requirements of the ESEF Regulation in preparing the electronic format of the consolidated financial statements in XHTML. These responsibilities include the selection and implementation of appropriate iXBRL tags using the taxonomy of the ESEF Regulation, and the introduction and implementation of such internal control system as Management determines is necessary to prepare the electronic format of the Group's annual consolidated financial statements, so that it does not contain significant inconsistencies with the requirements of the ESEF Regulation.# Auditor's Report on the Electronic Format of the Consolidated Financial Statements
Those charged with governance are responsible for overseeing the process of preparation of the annual consolidated financial statements of the Group, including the application of the ESEF Regulation.
Our responsibility is to express a reasonable assurance opinion as to whether the electronic format of the consolidated financial statements complies with the requirements of the ESEF Regulation. For this objective, we performed "Guidelines on the issuing of audit opinion with respect to the application of the European Single Electronic Format (ESEF) to the financial statements of companies which securities are admitted to trading on a regulated market in the European Union (EU)" by the Professional Organization of the Registered Auditors in Bulgaria - Institute of Certified Public Accountants (ICPA) and we have performed a reasonable assurance engagement in accordance with ISAE 3000 (revised) "Assurance Engagements Other than Audits or Reviews of Historical Financial Information” (ISAE 3000 (revised)). This standard requires us to comply with ethical requirements, plan and perform appropriate procedures to obtain reasonable assurance whether the electronic format of the Group's consolidated financial statements has been prepared in all material respects in accordance with the applicable criteria set out above. The nature, timing, and scope of the procedures chosen depend on our professional judgment, including the assessment of the risk of material non-compliance with the requirements of the ESEF Regulation, whether due to fraud or error. Reasonable assurance is a high level of assurance, but is not a guarantee that an assurance engagement conducted in accordance with ISAE 3000 (revised)) will always detect non-compliance with requirements, when it exists.
We apply the requirements of International Standard on Quality Control (ISQC) 1, and accordingly maintain a comprehensive system of quality control including documented policies and procedures regarding compliance with ethical requirements, professional standards, and applicable legal and regulatory requirements applicable to registered auditors in Bulgaria. We are independent in accordance with the International Code of Ethics for Professional Accountants (including International Independence Standards) of the International Ethics Standards Board for Accountants (IESBA Code) adopted by ICPA by IFAA.
The objective of the procedures planned and performed by us was to obtain reasonable assurance that the electronic format of the consolidated financial statements has been prepared, in all material respects, in accordance with the requirements of the ESEF Regulation. As part of assessing the compliance with the requirements of the ESEF Regulation regarding the electronic (XHTML) reporting format of the Group's consolidated statements, we maintained professional skepticism and used professional judgment. We also:
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified opinion.
In our opinion, except for the effects of the matter described in the Basis for Qualified Opinion section, the electronic format of the consolidated financial statements of the Group for the year ended December 31, 2022, contained in the attached electronic file “8945007IDGKD0KZ4HD95-20221231-EN-CON.zip“, is prepared in all material respects in compliance with the requirements of the ESEF Regulation.
We have identified that the following tags are inappropriately applied in the English version of the electronic format and we present the appropriate tags:
| Financial Statement Line | Main Statement | December 31, 2022 | December 31, 2021 | Tag, Applied by the Group | Appropriate Tag |
|---|---|---|---|---|---|
| Retained Earnings | Consolidated statement of Changes in Equity | BGN 55,117 thousand | BGN 39,324 thousand | DescriptionOfOtherAccountingPoliciesRelevantToUnderstandingOfFinancialStatements | DisclosureOfAdditionalInformationExplanatory |
| Repurchased own shares | Consolidated statement of Cash Flows | BGN 780 thousand | - | ProceedsFromIssuingSharesAllterco | PaymentsToAcquireOrRedeemEntitysShares |
| Basic Earnings per Share | Consolidated Statement of Comprehensive Income | BGN 0.97 per share | BGN 0.88 per share | Inappropriately presented as BGN 970 per share for 2022 and BGN 880 per share for 2021 | Appropriate presentation would be BGN 0.97 per share for 2022 and BGN 0.88 per share for 2021. |
In addition to our reporting responsibilities according to ISAs described in section “Information Other than the consolidated financial statements and Auditor’s Report Thereon”, with respect to the annual report on activities and the corporate governance statement, we have also performed the procedures, together with the required under ISA, in accordance with the "Guidelines regarding new extended reports and communication by the auditor" of the Professional Organization of Registered Auditors in Bulgaria - Institute of Certified Public Accountants (ICPA). These procedures include tests over the existence, form, and content of the other information in order to assist us in forming an opinion as to whether the other information includes the disclosures and reporting as required by Chapter Seven of the Accountancy Act and the Public Offering of Securities Act (Art. 100m, paragraph 10 of POSA in relation to Art. 100m, paragraph 8, p. 3 and 4 of POSA, as well as Art. 100m, paragraph 13 of POSA in relation to Art. 116c, paragraph 1 of POSA), applicable in Bulgaria.
Based on the procedures performed, in our opinion:
Based on the procedures performed and as a result of the acquired knowledge and understanding of the Group and the environment in which it operates, acquired during our audit, in our opinion, the description of the main features of the Group’s internal control and risk management systems in relation to the financial reporting process as part of the annual report on activities (as an element of the content of the corporate governance statement) and the information under Art. 10, paragraph 1, letter "c", "d", "f", "h", and "i" of the Directive 2004/25/EC of the European Parliament and of the EU Council of April 21, 2004 related to takeover bids, included in the corporate governance statement do not contain cases of material misrepresentations.
In accordance with the requirements of the Independent Financial Audit Act in connection with Art. 10 of Regulation (EU) No 537/2014, we hereby additionally report the information stated below.
We hereby confirm that in conducting the audit, we have remained independent of the Group.# Independent Auditor's Report
For the period to which our statutory audit refers, we have not provided other services to the Group in addition to the statutory audit.
Deloitte Audit OOD
Reg. No 033 in the Register of the registered auditors under Art. 20 Independent Financial Audit Act
Desislava Dinkova
Registered Auditor, in charge of the audit
Statutory Manager
Deloitte Audit OOD
103, Al. Stambolijski Blvd.
1303 Sofia, Bulgaria
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