Quarterly Report • May 31, 2022
Quarterly Report
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REPORT ON BUSINESS ACTIVITIES of ALLTERCO JSCo
FIRST QUARTER OF 2022
consolidated basis
Pursuant to Art. 100o, Para 7 in conjunction with Para 4of the Public Offering of Securities Act and Art. Art. 12 of Ordinance No. 2 dated 09.11.2021 on the prospectuses for public offering and admission to trading on a regulated securities market and on the disclosure of information
These Notes to the Interim Report on the Business Activities of Allterco JSCo on consolidated basis present information about the company, relevant to the end of first quarter of 2022 (the "reporting period').
Allterco JSCo is a public listed joint stock company, established in 2010 in the city of Sofia and entered in the Commercial Register at the Registry Agency on 11.02.2010 under UIC (unified identification code): 201047670 and LEI code (identification code of the legal entity) 8945007IDGKD0KZ4HD95 and is established for an unlimited period. Its name is written in Latin: ALLTERCO JSCo.
The company has its registered office and address of management: Republic of Bulgaria, Sofia County, Sofia Municipality, Sofia 1407, 103CherniVrah Blvd. The address for correspondence is the same; Tel: +359 2 957 12 47. The website of the Company iswww.allterco.com.
The Company is public listed within the meaning of the Public Offering of Securities Act and is registered as a public company in the register kept by the FSC with Decision 774 - PD of November 14, 2016 as a result of successfully completed initial public offering of shares from the Company's capital increase.
The company operates according to Bulgarian legislation.
The Issuer is part of an economic group, which consists of the parent company Allterco JSCo and its subsidiaries:
Allterco JSCo has participation in a company in China, Allterco Asia Ltd. (associated company) with headquarters and registered office in Shenzhen, Guangdong Province. The capital of the new company is CNY 100 000, as the participation of Allterco JSCo is 30% with an option to acquire additional up to 50% and reach a controlling stake of up to 80% in case of good development of the project.
The scope of business of the Allterco JSCo, according to Art. 4 of its Articles of Association is: Acquisition, management, evaluation and sale of share participations in Bulgarian and foreign companies; acquisition, management and sale of bonds; acquisition, evaluation, sale and assignment of licenses for the use of patents and other intellectual and industrial property rights; financing of companies in which Allterco JSCo participates; purchase of goods and other items for resale in their original, manufactured or processed form; sale of goods of own production; foreign trade transactions; commission, forwarding, warehousing and leasing transactions; transport transactions in the country and abroad; transactions of commercial representation and intermediation of local and foreign individuals and legal entities; consulting and marketing transactions; providing management and administration services to local and foreign legal entities; as well as any other commercial transactions not prohibited by law.
As a result of strategic deals, corporate changes and decisions in 2019 and 2021, the core business of the Issuer's Group in the reporting period of 2022 remains the development, production and sale of IoT devices.
Since 2015, the Group has grown organically in the IoT sector through the development and implementation of two main product categories - tracking devices under the brand MyKi and home automation systems under the brand Shelly.
During the reporting period no changes were made in the Board of Directors of the company.
As of 31.03.2022 members of the Board of Directors are:
After the end of the reporting period, there has been a change in the composition of the Board of Directors, with the resolution of the General Meeting of Shareholders of 08.04.2022 changing the number of the Board members from three to five, where Mr. Wolfgang Kirsch and Mr. Gregor Bieler join to the current members.
Pursuant to the resolution of the General Meeting of Shareholders at its first meeting held on 08.04.2022. the Board of Directors elects from among its members the following executive members, Chairman and Deputy-Chairman:
The representatives represent the Company together or individually.
As of the end of the reporting period the issued, subscribed, paid-in and registered capital of the Company amounts to BGN 17 999 999 (seventeen million nine hundred ninety-nine thousand nine hundred ninetynine), and is divided into 17 999 999 (seventeen million nine hundred ninety-nine thousand nine hundred ninety-nine) dematerialized ordinary registered voting shares, with a par value of 1 (one) BGN each.
The capital is fully paid in five contributions:
| NAME OF SHAREHOLDER | CAPITAL PERCENTAGE |
|---|---|
| Svetlin Todorov | 32,48 % |
| Dimitar Dimitrov | 32,48 % |
| Other individuals and legal entities |
35,04 % |
As of December 31, 2022 the capital structure of ALLTERCO JSCo is as follows:
The company has not carried out activities in the area of research and development and does not plan such in the near future. One of the subsidiaries of Allterco JSCo has carried out such activity during the reporting period, namely: Allterco Robotics Ltd.
Detailed information about the important events that occurred during the reporting period for ALLTERCO JSCo, as well as other information that could be important for investors is regularly disclosed by the company in accordance with regulatory requirements. In compliance with the requirement of Art.43a et seq. of Ordinance No. 2 of FSC, in conjunction with Art. 100t, Para 3 of the POSA, the Company discloses the regulated information to the public through selected information media. All information provided to the media in fully unedited text is available at: http://www.x3news.com/. The required information is submitted to the FSC - through the unified system for submission of information electronically, developed and maintained by the FSC - e-Register. The information is also available on the Company's website at: https://allterco.com/en/INVESTORS.
The announced important events that occurred during the reporting period did not have a significant impact on the financial results of the company on consolidated basis.
As of the end of the reporting period ALLTERCO JSCo reported on consolidated basis profit at the amount of BGN 3 909 thousand, which is a decrease by 3,4 % compared to the same reporting period of the previous year.
As of the end of the reporting period ALLTERCO JSCo reports on consolidated basis operating revenues at the amount of BGN 17 591, which is an increase of 14,59% in comparison with the same period of previous year. The revenue from sale of goods and production increased by 24.5% compared to the same period of previous year, while the revenue from services decreased by 98,4% as a result of the disposal of Group's telco business during third quarter of 2021
| REVENUE | Q1, 2021 BGN thousand |
Change % |
Q1, 2022 BGN thousand |
|---|---|---|---|
| Revenue from sale of goods and production | 13 759 | 24.5% | 17 131 |
| Revenue from services and rents | 1 208 | -98.4% | 19 |
| Other revenue | 384 | 14.8% | 441 |
| Total Operating revenue | 15 351 | 14.59% | 17 591 |
| Share in the profit of associated companies | - | - | 6 |
| Positive results from sale of financial assets | - | - | - |
As of the end of the reporting period the total operating expenses of ALLTERCO JSCo increased by 82,2% compared to the same reporting period of the previous year. This increase is mainly due to the increase of salaries and social security, which increased by 86,1% and external services, which increased by 206,4%.
Salaries and social security represent the biggest portion of the reported expenses for the period with a share of 59,0%, followed by external services with 17,6% and sales and marketing expenses with 14,3%
| EXPENSES | Q1 2021 | Change | Q1 2022 |
|---|---|---|---|
| BGN thousand | % | BGN thousand | |
| Materials | 39 | 123.1% | 87 |
| External services | 295 | 206.4% | 904 |
| Depreciation | 236 | 6.4% | 251 |
| Salaries and social security | 1 626 | 86.1% | 3 026 |
| Other | 39 | 123.1% | 87 |
| Total Administrative expenses | 2 204 | 94.6% | 4 289 |
| Other operating expenses | 580 | 26.4% | 733 |
| Sales and marketing | 31 | 245.2% | 107 |
| Total Operating expenses | 2 815 | 82.2% | 5 129 |
| LIQUIDITY RATIOS | 31.12.2021 | 31.03.2022 |
|---|---|---|
| Current ratio | 12.52 | 14.77 |
| Quick ratio | 10.93 | 12.74 |
| Immediate ratio | 6.44 | 7.13 |
| Cash ratio | 10.47 | 12.25 |
The total liquidity ratio at the end of the reporting period increased due to the following: the current assets increased by 5,2% compared to the end of 2021, while the current liabilities decreased by 10,8%.
The quick liquidity ratio at the end of the reporting period increased due to the following: the inventories increased by 13,5% compared to the end of 2021, while the current liabilities decreased by 10,8%.
The immediate liquidity ratio at the end of the reporting period increased due to the following: the cash decreased by 1,1% compared to the end of 2021, while current liabilities decreased by 10,8%.
The cash ratio at the end of the reporting period increased due to the following: The current liabilities decreased by 10,8% compared to the end of 2021, while the cash decreased by 1,1% while the short-term trade receivables increased by 13,0%.
| DEBT RATIOS | 31.12.2021 | 31.03.2022 |
|---|---|---|
| Debt / Equity | 0.10 | 0.09 |
| Debt / Assets | 0.09 | 0.08 |
| Equity / Debt | 9.60 | 10.96 |
The change in the debt/equity ratio at the end of the reporting period is due to the following: the Company's total liabilities decreased by 7,4 % compared to the end of 2021, and equity increased by 5,7%.
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 4,5% compared to the end of 2021, while the Company's total liabilities decreased by 7,4%.
The change in the financial autonomy ratio at the end of the reporting period is due to the following: the total liabilities of the Company decreased by 7,4% compared to the end of 2021, and the equity has increased by 5,7%.
The risks associated with the core business of the Company can generally be divided into systemic (general) and non-systemic (related specifically to its business and the industry in which it operates). Relevant for the Company are also the similar categories of risks inherent in the company business and the industry in which its subsidiaries operate, insofar as they are the main source of the Company's income. Separately, investors in the Company's financial instruments are also exposed to risks related to the investments in securities themselves (derivative and underlying)
Systemic risks are related to the market and the macro environment in which the Company operates, which is why they cannot be managed and controlled by the Company's management team. Systemic risks are: political risk, macroeconomic risk, inflation risk, currency risk, interest rate risk, tax risk and unemployment risk.
| Type of 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 turmoil and adverse changes in European and/or national legislation, as a result of which the environment in which local businesses operate will change negatively, and investors will incur losses. In November 2021, the country held for the second time early parliamentary electionsfor the Ordinary National Assembly, as a result of which for the political party ruling in last 12 years lost its position in the state governance and a new government is expected to be formed. |
| 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, limiting inefficient spending, on the one hand, as well as the strong destabilization of the countries of The Middle East, the increasing threat of terrorist attacks in Europe, refugee waves and instability of key countries in the immediate vicinity of Bulgaria. |
|
| 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. |
|
| The geopolitical situation in the region is further complicated by the development of the Russian-Ukrainian crisis after Russia recognized the independence of the two breakaway regions in eastern Ukraine and sent troops to Ukraine, while the US and the EU imposed economic sanctions on Russia. Currently, the effect of this risk on the Company is insignificant to the extent that the focus of the business is not directed towards the Russian and Ukrainian markets and accordingly a minimal portion of the Company's revenue is generated from sporadic one-off sales mainly to end users. |
|
| GENERAL MACROECONOMIC RISK |
According to the National Statistical Institute, in March 2022 the total business climate indicator decreased by 4.8 percentage points compared to the previous month. An increase in the indicator was observed in construction and retail trade and in the services sector, whereas in the industry sector there is a decrease. |
| Business climate - total |
| The March staff macroeconomic projections foresee annual real GDP growth at 5.4% in 2021, 3.7% in 2022, 2.8% in 2023 and 1.6% in 2024. Compared with the December projections, the outlook has been revised down for 2022 and 2023. This builds on the assumption that current disruptions to energy supplies and negative impacts confidence linked to the conflict are temporary and that global supply chains are not significantly affected. In an adverse scenario the growth would be 1.2 percentage points 2 lower than the baseline. |
Source: NSI1 on |
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|---|---|---|---|---|
| INTEREST RATE RISK |
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 meeting in March, 2022, the Governing Council expects the key ECB interest rates to remain at their present levels until it sees inflation reaching 2% well ahead of the end of its projection horizon and durably for the rest of the projection horizon, and judges that realized progress in underlying inflation is sufficiently advanced to be consistent with inflation stabilizing |
3 at 2% over the medium term |
||
| Date 01.04.2022 |
Percentage 0.00 |
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| 01.03.2022 | 0.00 | |||
| 01.02.2022 | 0.00 | |||
| 01.01.2022 | 0.00 | |||
| BNB4 *Source: |
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| INFLATION RISK | Inflation risk is a general rise in prices in which money depreciates and there exists probability of loss to households and firms. |
a | ||
| The consumer price index (CPI) Bulgaria. It estimates the total relative change in the prices of goods and services used by households for personal (non-production) consumption and applying the structure of the final cash |
the index | is an official measure of inflation in the Republic of is calculated by consumer expenditure of Bulgarian households. |
||
| According to the NSI the consumer price index for March 2022 is 102.2%, i.e., monthly inflation is 2.2%. year (March 2022 compared |
to December 2021) is 5.2% |
compared to February 2022 The annual inflation as from the beginning of the and the annual inflation for March |
1 http://nsi.bg/bg/content/14830/общ-показател-на-бизнес-климата
4 https://www.bnb.bg/Statistics/StBIRAndIndices/StBIBaseInterestRate/index.htm
5 https://www.nsi.bg/sites/default/files/files/pressreleases/Inflation2021-09\_8M1FIED.pdf
6 https://www.nsi.bg/sites/default/files/files/pressreleases/Inflation2021-09\_8M1FIED.pdf
| European Exchange Rate maintain the exchange rate compared to the allowed ones of ± 15%. |
Theoretically, currency risk could increase when Bulgaria joins the second stage of the Mechanism (ERM II). This is a regime in which the country must 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 EUR within +/- | 15% on the background of the | |
|---|---|---|---|---|
| On July potential loans. |
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.8 At the same time, our country must enter into close cooperation with the unified banking supervision. The fixed exchange rate of the BGN eliminate for the Bulgarian currency the risk of unfavorable 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 |
to the EUR does not movements of the euro |
||
| The Allterco JSCo |
Group companies operate in Bulgaria as well as in EU countries and first 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. |
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| procedures for ongoing | To limit the effects of the currency risk, the companies of the Group have system for planning the deliveries from countries inside and outside the EU, as well as monitoring of the movements in the exchange rates of the foreign currencies and control over the forthcoming payments. Currently, do not use derivative instruments for hedging the currency risk but, management is ready to enter into such transactions. |
introduced a the Group companies if necessary, the |
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| Credit risk of the state |
the state and for individual Table 1: Credit risk of Bulgaria |
Credit risk is the probability of deterioration of Bulgaria's international credit ratings, caused by the government's inability to repay its liabilities the country can lead to higher interest rates, more difficult financing conditions, both for prepared by specialized credit rating agencies and serve country's credit risk. Bulgaria's credit rating is presented in the following table: |
economic entities, including the Issuer. Credit ratings are | regularly. Low credit ratings of to determine and measure a |
| Credit agency | Date of last change | Long-term rating | Prospects | |
| Standard & Poor's | 30.11.2021 9 |
BBB | Stable | |
| Fitch | 22.01.20221 10 |
BBB | Stable | |
| Source: Ministry of Finance |
8 https://www.ecb.europa.eu/press/pr/date/2020/html/ecb.pr200710~4aa5e3565a.en.html
9 https://www.minfin.bg/bg/news/11577
10 https://www.minfin.bg/bg/news/11631
| The international credit rating agency S&P Global Ratings affirmed its long-term and short term foreign and local currency sovereign credit ratings on Bulgaria at "BBB/A-2". The |
|---|
| outlook remains stable. |
| According to the credit rating agency, the economic effects of the pandemic have been manageable, despite a significant health impact. Domestic demand, particularly private consumption, has recovered strongly and the increased absorption of EU funds will lift the medium-term growth outlook. The funds under the previous and current EU Multiannual Financial Framework (EU MFF) and the additional funds under the new Next Generation EU (NGEU) instrument available to the country are estimated at about 40% of the expected 2021 GDP. |
| Although some measures are projected to continue into 2022, S&P expects the deficits to start narrowing during 2022 and notes Bulgaria's established record of fiscal prudence under several governments. Despite the fiscal loosening and the increased public leverage, Bulgaria's net government debt levels remain low at around 20% of GDP, whereas sovereign funding costs have reduced to record-lows. |
| According to S&P, in line with global trends, inflation in Bulgaria has increased in 2021, due to a combination of rising food and energy prices, as well as strengthening domestic demand weighing on core inflation. Price increases should reduce in the second half of 2022. |
| External risks are manageable after several years of external net deleveraging, thanks to recurring current and capital account surpluses, which the credit rating agency expects to continue. |
| The credit rating agency also considers positive that the lev was included in the ERM II and Bulgaria joined the Banking Union in 2020. The ratings are constrained by the country's GDP per capita, which is moderate by global standards and the remaining structural and institutional impediments. |
| The stable outlook indicates the expectation that Bulgaria's economic recovery will progress over the next two years, backed by further absorption of additional EU funds. Although several fiscal support measures will extend into 2022, the credit rating agency expects fiscal balances to narrow over the next two years, which will keep public debt low. The stable rating outlook also reflects the expectations that the economy will not incur any external or financial sector imbalances11. |
| The international credit rating agency Fitch Ratings has affirmed Bulgaria's long-term foreign and local currency Issuer Default Ratings (IDR) at "BBB" with a Positive Outlook. |
| The Positive Outlook reflects the continued progress towards the euro adoption. According to the credit rating agency, short-term downside risks tied to the pandemic and electoral uncertainty are more than offset by prospects of substantial funding from the EU and a commitment to macro and fiscal stability. |
| Bulgaria's ratings are supported by its strong external and fiscal position, the credible policy framework, underpinned by EU membership and a long-standing currency-board arrangement. The ratings are constrained by the potential growth due to unfavorable demographics, which could weigh on government finances over the long term. Governance indicators and income levels are slightly above the median for peers. |
11 https://www.minfin.bg/bg/news/11577
| Fitch expects positive macroeconomic outlook for the next years, which will be supported by the EU funds (expected to reach 36% of GDP in the period 2022-2027). Real growth of GDP is expected to reach 3.7% in 2022, and to accelerate to 4.5% in 20223. |
|
|---|---|
| The national plan for Recovery and Resilience is approved and it is expected that the first amounts will enter the economy by the middle of 2022. Fitch Ratings expect some challenges related to efficient fulfilment of the plan, but the overall assessment is that funds related to the Plan combined with other investments programs of the Government will contribute to the increase of long-tern expected growth and potential slowdown in population decrease. |
|
| The agency forecasts that the average annual inflation will rise to 5,2% during 2022, which would be the highest level since 2008, and it will be driven by higher prices of raw materials and to a lesser extent by the pressure of internal demand. |
|
| The announced by the Government readiness to enter the Eurozone, the focus is on the fulfilment on the requirements related to ERM II and meeting the criteria for acceptance. In general Fitch expects that the Eurozone membership will support the long-term rating of Bulgaria and assess that it may increase with two steps in the period between entrance in ERM II and the acceptance of Euro. |
|
| The rating agency expects budget deficit 3,8% of GDP for 2021, which is more favorable that the previous expectations, and it is due to higher-than-expected growth of revenue. It is expected the budget deficit to further decrease to 3 % in 2023 г., from 4,6 % for 2022. Accordingly, the debt/GDP ratio will increase to 30% but still it will be below the median for the countries with similar ratings (60,3%). The bans sector is assessed as liquid and well capitalized. |
|
| The main factors that could lead to positive rating action/upgrade are: progress toward euro area accession and improvement in the economy's growth potential that leads to faster convergence with income levels of higher rated peers. The factors that could lead to negative rating action/downgrade are: adverse policy developments that reduce confidence in economic recovery; a prolonged rise in public debt; the materialization of contingent liabilities on the sovereign's balance sheet or weaker growth prospects. |
|
| Unemployment risk |
As a major factor influencing consumers' purchasing power, rising unemployment would reduce demand for IoT products. On the other hand, the demand for staff by the business remains extremely active, so that such a risk appears to be negligible within the next year. Euro area unemployment at 6.8 % in March 2022 and EU unemployment at 6.2 % in March 2022. According to the statistics published by Eurostat 13.374 million men and women in the EU, of whom 11.274 million in the euro area (EA), were unemployed in March 2022. Compared with February 2022, the number of persons unemployed decreased by 85 000 in the EU and by 76 000 in the euro area. Compared with February 2021, unemployment 12 decreased by 2,359 million in the EU and by 1,931 million in the euro area. |
| The registered unemployment rate in the country remains at a record low and in March it again reached a record low of 4.8%. The decrease compared to the previous month was by 0.1 percentage points, while on an annual basis there was a decrease of 1.7 percentage 13 points. |
12 https://ec.europa.eu/eurostat/statistics-explained/index.php?title=Unemployment\_statistics
| Risk associated with the legal system |
Although Bulgaria has introduced a number of significant legislative changes since joining the EU and most of the Bulgarian legislation has been harmonized 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 and other. Deficiencies in the legal infrastructure can result in uncertainties arising from the implementation of corporate actions, the implementation of supervision and other issues. |
|---|---|
| TAX RISK | 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. |
Such risks are: risk of shortage of key personnel, risk of strong competition, risk related to personal data security and hacker attacks, risk of technology change.
One of the biggest challenges for technology companies, such as the companies of the Group, as well as given the specific scope of their business in the field of telecommunications and engineering and software development, is the shortage of skilled personnel. Insufficient availability of suitable staff in the subsidiaries could adversely affect the future development of the Group due to delays in the development of new products/services and the maintenance of existing ones. On the other hand, the high competition in this sector raises the cost of labor. Thus, the financial position and market share of the Group companies could suffer.
After the sale of most of the telecommunication business of the group, the Group companies operate mainly in the segment of the Internet of Things (IoT). This segment is one of the most modern and promising sectors of the industry, which attracts the interest of many technology giants and start-up companies. The loss or inability to gain market share and the fall in final product prices due to increased competition may have a negative effect on revenue, profit and profit margins. Maintaining a competitive position requires investment in the creation of devices with new utilities, improvement of existing solutions and expansion of market share and it cannot be taken for granted that new developments will be established among the competing ones on the market.
The technology industry is characterized by digital transmission of information that could be strictly confidential, containing personal data of users of products, financial information of companies, information about new products and other. The protection of such information is a critical factor for the normal operation of companies in the industry, including of the Group. The sales of the devices and the use by the users of the accompanying mobile applications and cloud services provided by the Group are related to the exchange and storage of personal data. Potential breaches in information security can lead to: i) Loss of customers and/or partners and their migration to competing companies; (ii) Imposing sanctions and lawsuits related to breaches of applicable data protection and privacy laws; iii) Lost or delayed orders and sales; iv) Adverse effects on reputation, business, financial position, profits and cash flows.
The supply of IoT devices is related to regulation regarding the certification of products for sale in the respective country. In the European Union, products are required to bear the 'CE' marking, which indicates that the product has been evaluated and meets the requirements of safety, health and environmental protection. In the US, the equivalent is 'UL' certification. For certification purposes, accredited laboratories are assigned compliance tests, which involve significant costs. In addition, specifics in the requirements of local regulators and contractors (especially mobile operators) may require additional tests and certification to be performed, which increases the cost of entering a particular market or particular distribution channel.
Sales of the Group companies' products cover an increasing number of markets, which often have local regulation regarding the certification of similar products in the respective country. Meeting the requirements of local regulation is related to time and resources and may delay the Company in entering new markets or require additional costs in order to meet different standards.
The change in regulatory requirements for devices may involve additional costs for making them compliant with the new requirements, including costs for withdrawing products from the market to making them compliant with these requirements. The Group companies and their local partners regularly monitor planned changes in the legislation and take timely measures to ensure the compliance of products with them.
Eventual changes in the regulations in the telecommunications sector, could have some impact on the operation of the Group as mobile operators are one of the main sales channels for existing MyKi series products. Big part of the devices developed and sold by the companies in the IoT Group use Internet-based technology and can work with the services of any Internet provider. To that effect, the Group is now less dependent on regulations in the field of telecommunications, insofar as the companies in its structure are not providers of telecommunication services and mobile operators are only one of the channels for trade and distribution of IoT devices.
The Issuer and its subsidiaries operate in an extremely dynamic segment, in which technologies have a significant impact and are a source of competitive advantage. To that effect, there is a risk of delayed adaptation to new technologies due to lack of knowledge, experience or sufficient funding, which may have a negative impact on the Issuer. The slow adaptation to the new realities may lead to a loss of competitive positions and market shares, which in turn will lead to a deterioration of the Group's performance.
Such risks are: operational risk, risk related to business partners, risks arising from new projects and liquidity risk.
Operational risk
Operational risk can be defined as the risk of loss as a result of inadequate or non-functioning internal management procedures. Such risks may be caused by the following circumstances:
The effects of such circumstances would be a decrease in the Issuer's revenues and deterioration of its business performance.
Production activities in the IoT segment is outsourced, mainly to China, concentrated in several manufacturers. Potential risks associated with key subcontractors are related to the accurate and timely execution of deliveries or termination of business relationships. Although management believes that there is a wide range of alternative suppliers, the possible transfer of production to new partners and diversification of subcontractors may lead to delivery delays and additional costs, which may affect the ability of the Group companies to perform agreed orders from customers and adversely affect the Group's reputation and financial performance.
The main business activity of Allterco JSCo is related to investments in subsidiaries. There is a risk that some of the subsidiaries will not be able to meet their goals, which will lead to lower or negative return on investment.
The development of new products and services by the subsidiaries of Allterco JSCo is related to the investment in human resources, software, hardware, materials, goods and services. Should new products and services fail to be marketed, such investments would be unjustified. This in turn would have a negative impact on the costs and assets of the Company, as well as on the performance of its business activities. In order to manage the risk arising from new projects, the Group companies perform a market analysis, prepare a financial analysis containing different scenarios, and in some cases discuss with potential customers the concept of the new service/product.
The expression of the liquidity risk in relation to the Group is associated with the possibility of lack of timely and/or sufficient available funds to meet all current liabilities. This risk may appear both in case of significant delay of the payments by the debtors of the Company, as well as in case of insufficiently effective management of the cash flows from the operation of the Company.
Some of the Group companies use bank financing in the form of an investment loan, overdraft or revolving credit line, which can be used in case of liquidity problems.
The company pursues a conservative liquidity management policy, through which it constantly maintains an optimal liquidity cash reserve and good ability to finance its business activities. In order to control the risk, the Company monitors the timely payment of incurred liabilities. The company monitors and controls the actual and projected cash flows for periods ahead and maintains a balance between the maturity limits of the assets and liabilities.
For the reporting period the Company has not entered into transactions with interested parties in the meaning according to POSA.
The Company has not entered into any transactions with other Group companies that fall beyond their scope of regular business or that significantly deviate from the market conditions. The transactions with other Group companies were eliminated for the purpose of the consolidation.
During the reporting period, the members of the Board of Directors received gross remuneration at the total amount of 45 thousand BGN, which is in compliance with the approved remuneration policy of the Company.
There are no newly incurred significant receivables and/or liabilities.
| Date | Volume | Turnover | Highest value | Lowest value | Opening value | Closing value |
|---|---|---|---|---|---|---|
| 31.03.2022 | 123107 | 2 105 993,00 | 19,500 | 14,000 | 18,800 | 19,000 |
| 28.02.2022 | 55488 | 1 081 219,70 | 21,400 | 16,700 | 20,000 | 19,000 |
| 31.01.2022 | 103102 | 2 073 489,00 | 25,400 | 17,500 | 25,200 | 19,800 |
Historical data on trade
Source: Investor.bg
Information on the trading of Allterco JSCo shares during the reporting period on the Frankfurt Stock Exchange is available at https://www.boerse-frankfurt.de/equity/allterco-jsco/price-history/historicalprices-and-volumes
After the end of the reporting period, Allterco JSCo submitted to the FSC, the BSE and the public additional information.
| Date | NOTIFICATION |
|---|---|
| 08.04.2022 | The Company has announced to the FSC and to the Public the following information: |
| We hereby inform you that at its extraordinary session held on 08.04.2022, the General Meeting of Shareholders of Allterco JSCo adopted the following resolutions: |
|
| 1. The General Meeting of the Shareholders increased the number of the members of the Board of Directors from 3 to 5, where the General Meeting of the Shareholders confirms the current members of the Board of Directors and appoints, in addition, the following new members: Mr. Wolfgang Kirsch and Mr. Gregor Bieler |
|
| 2. The General Meeting of Shareholders approved amendments to the Remuneration Policy |
|
| 3. The General Meeting of Shareholders approved amendments and supplements to the Statute of the Company |
|
| 4. The General Meeting of Shareholders approved the remuneration, the management guarantee and the compensation of the new Board Members |
|
| 5. The General Meeting of the Shareholders approved the terms and conditions for buyback of up to 80,000 own shares until 31 December 2022 at price in the rage from BGN 15 to BGN 30 per share. The buyback can be done at once or in part in one or several buyback procedures (until the maximum number of shares is reached) by the Company and/or any of its subsidiaries through an investment intermediary from any shareholder through stock exchange and/or OTC transactions. The Board of Directors is authorized to undertake all other specific parameters of the buyback and to take all necessary legal and factual actions in execution of this resolution of the General Meeting of Shareholders |
|
| The Company will publish the minutes of the General Meeting within the legally established period. |
|
| Some of the decisions are subject to entry in the Commercial Register and the Register of Non-Profit Legal Entities. |
|
| In compliance with the decision of the General Meeting of the Shareholders and the Statute of the Company, the Board of Directors has appointed Mr. Wolfgang Kirsch and Mr. Dimitar Dimitrov as Chief Executive Officers of the Allterco JSCo in a later meeting today. |
|
| For further information, please visit allterco.com | |
| 14.04.2022 | The Company has announced to the FSC and to the Public the following information: |
| Based on preliminary consolidated data as of the end of the first quarter of 2022, we hereby inform you of the following: |
|
|---|---|
| Allterco JSCo announces a 26.2% year-on-year increase in consolidated revenue from sales of devices (including related services) to BGN 17.4 million (EUR 8.9 million) in the first quarter of 2022, based on preliminary data. While the revenue from sales of Shelly-branded smart home devices increased by 25.1%, amounting to BGN 16.6 million (EUR 8.5 million), the revenue from sales of MyKi tracking devices decreased by 8.7% to BGN 447 thousand (EUR 229 thousand), showing trend of recovery mainly as a result of the phasing out the anti pandemic measures taken by the governments of a number of countries where the devices are being sold. |
|
| Considering the seasonal fluctuations in sales the reported results are in line with the expectations of the management and their planning for 2022 and are based on sales growth of the Company's current main product lines. |
|
| The Company will officially disclose consolidated financials for Q1 2022 within the statutory deadlines until 30 May 2022. |
|
| EUR/BGN exchange rate as of 14 April 2022 – EUR 1 = BGN 1.95583 |
|
| For further information, please visit www.allterco.com. | |
| 26.04.2022 | The Company has announced to the FSC and to the Public the following information: |
| Separate Quarterly Financial Report for the first quarter of 2022 | |
| 29.04.2022 | The Company has announced to the FSC and to the Public the following information: |
| Consolidated Annual Financial Report for 2021 |
|
| 03.05.2022 | The Company has announced to the FSC and to the Public the following information: |
| Separate Quarterly Financial Report for the first quarter of 2021, which was republished due to technical issue with the XBRL format of the report – error type "Not Satisfied" |
|
| 20.05.2022 | The Company has announced to the FSC and to the Public the following information: |
| Invitation to Annual General Meeting of the Shareholders, that will take place on 27 June 2022 at on 27.06.2022 at 15.00 (Eastern European Time - EEST = UTC+3) or 12:00 (Coordinated Universal Time - UTC) in the city of Sofia, 1 Makedonia (КНСБ Building), 2nd floor, Congress Center "Globus", hall "Europe" with the following agenda: |
|
| Item 1. Approval of the Annual Report of the Board of Directors on the business activities for the year 2021, as part of the Company's Annual Financial Report 2021 prepared in accordance with Delegated Regulation (EU) 2019/815 |
|
| Item 2. Approval of the Annual Consolidated Report of the Board of Directors on the business activities for the year 2021, as part of the Company's Annual Consolidated Financial Report 2021 prepared in accordance with Delegated Regulation (EU) 2019/815. |
| Item 3. Approval of the Audited Annual Financial Report of the company for the year 2021, prepared in accordance with Delegated Regulation (EU) 2019/815 and the Report of the certified auditor. |
|---|
| Item 4. Approval of the Audited Annual Consolidated Financial Report of the company for the year 2021, prepared in accordance with Delegated Regulation (EU) 2019/815, and the Report of the certified auditor. |
| Item 5. Adoption of a decision in regard to the allocation of the reported company's profit for 2021. |
| Item 6. Adoption of a decision for distribution and payment of dividend from the retained earnings from the company's activities in 2020. |
| Item 7. Adoption of a decision for the parameters of allocation and payment of dividend to shareholders. |
| Item 8. Adoption of a decision to release from responsibility the members of the Board of Directors for their activities during 2021. |
| Item 9. Approvаl of the Annual Report on the activities of the IR director of Allterco JSCo for 2021 |
| Item 10. Election of a certified auditor for 2022 |
| Item 11. Approval of the Report for the implementation of the Remuneration Policy of the members of the Board of Directors of Allterco JSCo for 2021. |
| Item 12. Approval of the Annual Report of the Audit Committee for 2021 |
| Item 13. Adoption of a decision for change in the personnel of the Audit Committee and determination of its mandate |
| Item 14. Adoption of a decision for amendment of the remunerations of the members of the Audit Committee. |
The Company considers that there is no other information that has not been publicly disclosed that would be important to shareholders and investors in making an informed investment decision.
Date: 30.05.2022
For ALLTERCO JSCo:
Dimitar Dimitrov CEO REPORTING PERIOD
Unless otherwise stated, all amounts are in BGN thousand.
| ASSETS | Notes | March 31, 2022 |
December 31, 2021 |
|---|---|---|---|
| Non-current assets | |||
| Property, plant and equipment | 3.01 | 4 794 | 4 798 |
| Intangible assets | 3.02 | 3 325 | 3 116 |
| Advances for acquisition of assets | - | 19 | |
| Assets with right of use | 3.03 | 254 | 108 |
| Goodwill | 3.04 | 160 | 160 |
| Investments in associated companies | 3.05 | 46 | 40 |
| Other long-term capital investments | 3.06 | 2 419 | 2 624 |
| Trade receivables | 3.07 | 2 054 | 2 054 |
| Deferred tax assets | 3.08 | 72 | 72 |
| Total non-current assets | 13 124 | 12 991 | |
| Current assets | |||
| Inventory | 3.09 | 8 580 | 7 560 |
| Trade receivables | 3.10 | 21 665 | 19 167 |
| Other receivables | 3.11 | 1 973 | 1 912 |
| Cash and cash equivalents | 3.12 | 30 193 | 30 541 |
| Prepaid expenses | 3.13 | 111 | 234 |
| Total current assets | 62 522 | 59 414 | |
| TOTAL ASSETS | 75 646 | 72 405 |
Date: 30 May 2022
Compiler of the financial statements: Executive Director:
/Albena Benkova Beneva/ / Dimitar Stoyanov Dimitrov/
The consolidated statement of financial position should be read in conjunction with the explanatory notes set out on pages from 7 to 59, which form an integral part of the financial statements attached.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION (continued) AS OF MARCH 31, 2022
Unless otherwise stated, all amounts are in BGN thousand.
| LIABILITIES | Notes | March 31, 2022 |
December 31, 2021 |
|---|---|---|---|
| Non-current liabilities | |||
| Bank loans | 3.14 | 1 879 | 2 007 |
| Lease liabilities | 3.15 | 211 | 80 |
| Total non-current liabilities | 2 090 | 2 087 | |
| Current liabilities | |||
| Current share of bank loans | 3.14 | 594 | 572 |
| Current share of lease liabilities | 3.15 | 70 | 58 |
| Trade payables | 3.16 | 853 | 1 487 |
| Payables to employees | 3.17 | 170 | 173 |
| Social security liabilities | 116 | 115 | |
| Tax liabilities | 3.18 | 1 520 | 1 315 |
| Other liabilities | 3.19 | 911 | 1 026 |
| Total current liabilities | 4 234 | 4 746 | |
| TOTAL LIABILITIES | 6 324 | 6 833 | |
| EQUITY | |||
| Registered capital | 3.20 | 18 000 | 18 000 |
| Retained earnings | 3.21 | 43 303 | 39 394 |
| Reserves | 3.22 | 1 800 | 1 800 |
| Reserve from issue of shares | 3.23 | 5 403 | 5 403 |
| Other comprehensive income | 3.24 | 831 | 1 036 |
| Foreign exchange rate differences from translation of financial statements of foreign operations |
(15) | (61) | |
| TOTAL EQUITY | 69 322 | 65 572 | |
| TOTAL LIABILITIES AND EQUITY | 75 646 | 72 405 |
Date: 30 May 2022
Compiler of the financial statements: Executive Director:
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE PERIOD JANUARY 1, 2022– MARCH 31, 2022
Unless otherwise stated, all amounts are in BGN thousand.
| Notes | 3 months of 2022 |
3 months of 2021 |
|
|---|---|---|---|
| Revenue from sale | 4.01 | 17 150 | 14 967 |
| Cost price of sales | 4.01 | (7 883) | (7 829) |
| Gross profit | 9 267 | 7 138 | |
| Other operating income | 4.02 | 441 | 384 |
| Sales and marketing expenses | (733) | (580) | |
| Administrative expenses | 4.03 | (4 289) | (2 204) |
| Other operating expenses | 4.04 | (107) | (31) |
| Profit from operating activities | 4 579 | 4 707 | |
| Financial expenses | 4.05 | (87) | (123) |
| Share in the profit of associated companies | 2.10.7 | 6 | |
| Profit from the ordinary activities | 4 498 | 4 584 | |
| Profit before tax on profit | 4 498 | 4 584 | |
| Corporate profit tax income (expense) | (589) | (536) | |
| Profit for the period from continuing operations | 3 909 | 4 274 | |
| Profit/(loss) for the period from discontinued operations | - | (226) | |
| Net profit | 3 909 | 4 048 | |
| Other comprehensive income: Items that can be reclassified to the profit or loss |
|||
| From other long-term capital instruments | (205) | (419) | |
| Foreign exchange rate differences from translation of statements of foreign operations |
46 | (56) | |
| Other comprehensive income for the period, after taxation |
(159) | (475) | |
| TOTAL COMPREHENSIVE INCOME | 3 750 | 3 573 | |
| Net profit attributable to: | |||
| Owners of the Parent-company Minority interests |
3 909 - |
4 047 1 |
|
| Other comprehensive income attributable to: | |||
| Owners of the Parent-company | (159) | (33) | |
| Minority interests | - | (23) | |
| Total comprehensive income attributable to: | |||
| Owners of the Parent-company | 3 750 | 4 014 | |
| Minority interests | - | (22) | |
| Net income per share | 0.217 | 0.251 | |
Date: 30 May 2022
Compiler of the financial statements: Executive Director:
| Registere d capital |
Retained earnings |
Share premiu m reserves |
Reserve s |
Treasur y shares |
Foreign exchange rate differences from translation of fin. Stat. of foreign operations |
Total | Minority interest |
Total equity |
|
|---|---|---|---|---|---|---|---|---|---|
| Balance as of January 1, 2021 | 18 000 | 31 787 | 5 703 | 1 500 | (138) | 280 | 57 132 | (296) | 56 836 |
| Transfer to reserves | - | - | (300) | 300 | - | - | - | - | - |
| Total comprehensive income, including: |
- | 12 389 | - | - | - | (341) | 12 048 | - | 12 048 |
| Net Profit | - | 15 962 | - | - | - | - | 15 962 | - | 15 962 |
| Other comprehensive income | - | (3 573) | - | - | - | (341) | (3 914) | - | (3 914) |
| Other movements | - | (240) | - | - | - | - | (240) | - | (240) |
| Dividend distribution | - | (3 600) | - | - | - | - | (3 600) | - | (3 600) |
| Sale of treasury shares | - | - | - | - | 138 | 138 | - | 138 | |
| Change in minority interest | - | (296) | - | - | - | - | (296) | 296 | - |
| Effect from sale of subsidiaries | - | 390 | - | - | - | - | 390 | - | 390 |
| Balance as of December 31, 2021 | 18 000 | 40 430 | 5 403 | 1 800 | - | (61) | 65 572 | - | 65 572 |
| Balance as of January 1, 2022 | 18 000 | 40 430 | 5 403 | 1 800 | - | (61) | 65 572 | - | 65 572 |
| Total comprehensive income, including: |
- | 3 704 | - | - | - | 46 | 3 750 | - | 3 750 |
| Net Profit | - | 3 909 | - | - | - | - | 3 909 | - | 3 909 |
| Other comprehensive income | - | (205) | - | - | - | 46 | (159) | - | (159) |
| Balance as of March 31, 2022 | 18 000 | 44 134 | 5 403 | 1 800 | - | (15) | 69 322 | - | 69 322 |
Date: 30 May 2022
Compiler of the financial statements: Executive Director:
Unless otherwise stated, all amounts are in BGN thousand.
| Notes | 3 months of 2022 |
3 months of 2021 |
|
|---|---|---|---|
| Cash flows from operating activity | |||
| Proceeds from clients | 15 752 | 15 709 | |
| Payments to suppliers | (11 336) | (9 362) | |
| Payments for taxes | (874) | (488) | |
| Payments to employees and social security | (3 167) | (1 765) | |
| Cash flow from positive (negative) exchange rate differences | 24 | (16) | |
| Other proceeds/payments, net | (43) | 181 | |
| Net cash flows from operating activities | 356 | 4 259 | |
| Cash flow from investment activities | |||
| Cash flows related to non-current tangible and intangible assets | (433) | (84) | |
| Cash from sale of fixed assets | - | 20 | |
| Purchase of investments | (40) | - | |
| Net cash flows from investment activities | (473) | (64) | |
| Cash flow from financing activities | |||
| Financial leasing payments | (76) | (21) | |
| Loans paid | (127) | (125) | |
| Cash flows related to interest and commissions | (14) | (16) | |
| Other income / payments, net | (14) | (15) | |
| Net cash flow from financing activities | (231) | (177) | |
| Net increase in available cash and cash equivalents for the period | (348) | 4 018 | |
| Available cash and cash equivalents in the beginning of the period | 30 541 | 26 050 | |
| Available cash and cash equivalents at the end of the period | 3.12 | 30 193 | 30 068 |
| Available cash, assets held for sale | - | (48) | |
| Available cash and equivalents at the end of the period | 30 193 | 30 020 |
Compiler of the financial statements: Executive Director:
| 1. | Information about the Group 10 |
|
|---|---|---|
| 1.1. | Legal status10 | |
| 1.2. | Ownership and Management 10 |
|
| 1.3. | Scope of Activities11 | |
| 1.4. | Group structure 11 |
|
| 2. | Basics of preparation of financial statements and accounting policies13 | |
| 2.1. | General framework of financial reporting 13 |
|
| 2.2. | Initial application of new and amended IFRSs in force for the current accounting period13 | |
| 2.3. | Accounting principles14 | |
| 2.4. | Functional currency and recognition of currency exchange rate differences14 | |
| 2.5. | Transactions and balances 15 |
|
| 2.6. | Assumptions 16 |
|
| 2.7. | Subsidiaries and associated companies16 | |
| 2.8. | Minority interest 16 |
|
| 2.9. | Consolidation17 | |
| 2.10. | Definition and assessment of the items in the consolidated financial statements 17 |
|
| 2.10.1. | Revenues17 | |
| 2.10.2. | Expenses19 | |
| 2.10.3. | Property, plant and equipment 20 |
|
| 2.10.4. | Intangible assets21 | |
| 2.10.5. | Goodwill 22 |
|
| 2.10.6. | Other long-term capital investments23 | |
| 2.10.7. | Investments in Associated companies24 | |
| 2.10.8. | Non-current assets held for sale 24 |
|
| 2.10.9. | Inventories 24 |
|
| 2.10.10. | Financial instruments25 | |
| 2.10.11. | Cash and cash equivalent28 | |
| 2.10.12. | Leasing29 | |
| 2.10.13. | Provisions 30 |
|
| 2.10.14. | Liabilities to employees30 |
| 2.10.15. | Share capital31 | |
|---|---|---|
| 2.10.16. | Income tax expenses32 | |
| 2.10.17. | Earnings per share33 | |
| 2.10.18. | Judgments that are crucial in applying accounting policies of the Group34 | |
| 2.10.19. | Fair values35 | |
| 3. Notes to the consolidated statement of financial position36 | ||
| 3.01. | Property, plant and equipment 36 |
|
| 3.02. | Intangible assets37 | |
| 3.03. | Assets with right of use38 | |
| 3.04. | Goodwill 38 |
|
| 3.05. | Investments in associated companies39 | |
| 3.06. | Other long-term capital investments39 | |
| 3.07. | Long-term trade receivables 39 |
|
| 3.08. | Deferred tax assets40 | |
| 3.09. | Inventories 40 |
|
| 3.10. | Trade receivables41 | |
| 3.11. | Other receivables41 | |
| 3.12. | Cash and cash equivalents 41 |
|
| 3.13. | Prepaid expenses42 | |
| 3.14. | Bank loans 42 |
|
| 3.15. | Lease43 | |
| 3.16. | Trade payables44 | |
| 3.17. | Payables to employees44 | |
| 3.18. | Tax liabilities44 | |
| 3.19. | Other liabilities 44 |
|
| 3.20. | Registered capital44 | |
| 3.21. | Retained earnings46 | |
| 3.22. | Reserves46 | |
| 3.23. | Reserve from issue of shares46 | |
| 3.24. | Other comprehensive income 46 |
|
| 4. | Notes to the consolidated statement of comprehensive income47 | |
| 4.01. | Sales revenue and cost price of sales47 | |
| 4.02. | Other operating income 47 |
|
| 4.03. | Administrative expenses47 |
EXPLANATORY NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF MARCH 31, 2022
Unless otherwise stated, all amounts are in BGN thousand.
| 4.04. | Other operating expenses48 | |
|---|---|---|
| 4.05. | Financial expenses48 | |
| 5. | Contingent liabilities and commitments 49 |
|
| 6. | Transactions with related parties 49 |
|
| 7. | Financial instruments by category 50 |
|
| 8. | Financial risk management 51 |
|
| 9. | Fair value 57 |
|
| 10. | Events after the end of reporting period58 |
Allterco JSCo (the mother company), Sofia, is entered in the Commercial Register of the Registry Agency with UIC as per Bulstat (Unified Identification Code as per the Bulgarian Statistical Register): 201047670 and LEI code 8945007IDGKD0KZ4HD95. The company is with registered office and address of management in Bulgaria, Sofia 1407, 103, Cherni Vrah Blvd. No changes in the seat, address or the name of the company were made during the reporting period. The initial registered capital was 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. The public offering of shares 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 № 148-F of February 18, 2020, Decision № 405-E of June 11, 2020, Decision № 601-E of August 13, 2020 and Decision № 791-E of October 29, 2020.
Since November 22, 2021 the shares of Allterco are traded on the Frankfurt Stock Exchange.
As of March 31, 2022 the Group is managed and represented by Svetlin Todorov and Dimitar Dimitrov jointly and separately.
The Allterco Group includes Allterco JSCo. (the parent-company) and its subsidiaries, in which the parentcompany has a direct or indirect controlling interest. Allterco JSCo. is a public company in Bulgaria under the Public Offering of Securities Act.
The distribution of the share capital of the company Allterco JSCo. as of 31 March 2022, is as follows:
| Name | Number of shares: |
% in 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% |
As of March 31, 2022 members of the Board of Directors are:
After the end of the reporting period, there has been a change in the composition of the Board of Directors, with the resolution of the General Meeting of Shareholders of 08.04.2022 changing the number of the Board members from three to five, where Mr. Wolfgang Kirsch and Mr. Gregor Bieler join to the current members.
Pursuant to the resolution of the General Meeting of Shareholders at its first meeting held on 08.04.2022. the Board of Directors elects from among its members the following executive members, Chairman and Deputy-Chairman:
The representatives represent the Company together or individually.
The scope of activities of Allterco JSCo 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 use of patents to companies in which the Company participates; financing of companies in which the Company participates.
The scope of activities of group companies includes development, production and trade with IoT (Internet of Things) devices and management of real estate owned by the Group.
As of March 31, 2022 the Group included Allterco JSCo. and the following subsidiaries:
| March 31 2022 |
December 31 2021 |
|
|---|---|---|
| Name of the company | 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% |
| December 31 2021 |
December 31 2020 |
|
|---|---|---|
| Name of the company | Percentage of participation |
Percentage of participation |
| Abroad | ||
| ALLTERCO ROBOTICS INC, USA |
100% | 100% |
| ALLTERCO EUROPE GMBH, GERMANY | 100% | 100% |
In the beginning of 2021 Allterco JSCo. acquired a stake in newly established (associated) company in China – Allterco Asia Ltd., with a seat and office in Shenzhen. The registered share capital of the newly registered company is CNY 100 000. Allterco acquired 30% stake and holds an option to acquire additional up to 50% extending its total shareholding up to 80%.
In September 2021 Allterco sold its participation in the capital of 3 Asian subsidiaries.
In December 2021 Alltreco JSCo. established a new subsidiary in Germany. The name of the new subsidiary is Allterco Europe GmbH and its registered capital is EUR 500 000 and it is 100% owned by Allterco.
During March 2022 Allterco JSCo increased the capital of its wholly owned subsidiary Allterco Robotics Ltd. The goal of the capital increase is to accelerate the development of new products, to increase the production capabilities and finance the entrance to new markets. The registered capital of Allterco Robotics was increased from BGN 1 500 000 to BGN 7 000 000 by issuing new 5 500 000 shares at par value of BGN 1,00 each. The whole new emission was subscribed by Allterco JSCo and was funded entirely with own funds.
The Group maintains its current accounting and prepares its financial statements in accordance with the requirements of the Bulgarian commercial and accounting legislation.
These financial statements have been prepared in accordance with the requirements of the International Accounting Standards, published by the International Accounting Standards Board and adopted by the European Union. As of March 31, 2022, IASs include the International Accounting Standards (IASs), the International Financial Reporting Standards (IFRSs), the Interpretations of the Standing Interpretation Committee and the Interpretations of the IFRS Interpretation Committee, approved by the IAS Committee.
The IAS Committee issues every year the standards and their interpretations, which after the formal approval by the EC, are valid for the year in which they are issued. However, a big part of them is not applicable to the company's business because of the specific issues that are addressed in them.
The management considered all standards and clarifications to the standards, which are applicable to the activities of the Company and which are officially adopted by the EU as of the date of preparation of the current financial statements.
The management reviewed the amendments in the existing accounting standards which are enforceable as of January 1, 2022 and assessed that no changes in the current accounting policy are necessary.
| Standard or clarification, date of amendment and enforcement |
Name of the standard or clarification | Adoption status by EU Commission |
||||
|---|---|---|---|---|---|---|
| Amendments to IAS 1 issued on 23 January 2020 and 15 July 2020, in effect for annual financial periods starting at or after 1 January 2023 |
Classification of liabilities as current or non-current and classification of assets as current and non-current – postponement of enforcement date |
Waiting adoption |
for | a | date | of |
| Amendments to IAS 1 issued on 12 February 2021, in effect for annual financial periods starting at or after 1 January 2023 |
Financial statements presentation and disclosure of accounting policies |
Waiting adoption |
for | a | date | for |
| Amendments to IAS 8 issued on |
Accounting policies, Amendments in | Waiting | for | a | date | for |
| 12 February 2021, in effect for annual financial periods starting at or after 1 January 2023 |
the accounting assessments and mistakes: Definition of accounting assessments |
adoption |
|---|---|---|
| Amendments to IAS 12, issued on 7 May 2021, in effect for annual financial periods starting at on after 1 January 2023 |
Corporate profit tax: Deferred tax related to assets and liabilities arising from one deal |
Waiting for a date for adoption |
| IFRS 17 issued on 9 December 2021, in effect for annual financial periods starting at or after 1 January 2023 |
Insurance contracts: Initial application of IFRS 17 and IFRS 9 – Comparable data |
Submitted for adoption by the Commission, expected to be adopted during the first quarter of 2022 |
The consolidated financial statements of the Group have been prepared in accordance with the going concern principle. The latter assumes that the Group will continue to exist in the foreseeable future.
During the last reporting period the COVID-19 pandemic did not cause any negative effect on the business activities of the Group. The military conflict between Russia and Ukraine, which started in February 2022, at this stage, also do not have negative effect on the business of the Group.
The Management has no plans or intentions to sell the business or discontinue the operations, which could significantly change the book value or classification of the assets and liabilities recognized in the financial statements.
The valuation of assets and liabilities and the measurement of income and expenses are carried out in compliance with the principle of historical cost. This principle has been modified in certain cases by revaluing certain assets and / or liabilities to their fair value at December 31 of the current or previous year, as set out below.
The accounting currency for the presentation of the elements of the consolidated financial statements is the Bulgarian Lev (BGN), which is the functional currency of Allterco JSCo.
The data in the elements of the consolidated financial statements and the notes thereto are presented in thousands of BGN, unless explicitly stated otherwise. When presented in the financial statements and the explanatory notes, amounts over BGN 500 are rounded to BGN 1 thousand.
The Group's companies keep their accounting records in the functional currency of the country in which
they operate. The effects of exchange rate differences related to the settlement of foreign currency transactions or the accounting of foreign exchange transactions at rates other than those at which they were initially recognized are included in the statement of comprehensive income at the time they occur, are treated as "other operating income and expenses", except for those related to investments and loans denominated in foreign currency, which are presented as "financial income" and "financial expenses". Nonmonetary assets and liabilities initially denominated in foreign currencies should be translated to the functional currency using the historical exchange rate at the date of the transaction and subsequently not revaluated at the closing exchange rate.
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 month of the report;
(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 translated into BGN to be included in the consolidated statement of the group as follows
All monetary and non-monetary assets and liabilities (including comparative information) are recalculated at the BNB closing exchange rate at the date of the relevant statement of financial position. As of March 31, 2022 the exchange rate of BGN to USD was 1,76185 and BGN to NOK
was 2,01404 BGN for 10 NOK (As of December 31, 2021 BGN/USD was 1,66809 and BGN/10 NOK was 1,95671);
The presentation of financial statements in accordance with International Financial Reporting Standards requires the management to make the best estimates, accruals and reasonable assumptions that have an effect on the reported values of assets and liabilities, of income and expenses, and of the disclosure of contingent receivables and liabilities. These estimates, accruals and assumptions are based on the best assessment using the available information at the date of preparation of the financial statements, and therefore future actual results may differ from the amounts presented in the current financial statements.
Subsidiaries are the entities over which Allterco JSCo. 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 the control have 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.
Minority 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.
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.
Revenue from sales and operating expenses has been accrued at the time of their occurrence, regardless of cash receipts and payments. The accounting and recognition of revenue and expenses should be carried out in compliance with the requirement for a cause-consequence connection between them.
Revenue is measured at the fair value of the remuneration received or to be received or paid, less any discounts provided.
The Group recognizes revenue when the amount of revenue can be measured reliably, when it is possible for the Group to obtain future economic benefits, and when it meets specific criteria for each of the Group's activities, as specified below.
Amounts collected on behalf of third parties, such as sales taxes and value added tax, are excluded from
revenue.
Revenues in the Group are recognized when the control over the goods and/or services promised in the contract with the customer are transferred to the customer. The control is transferred to the customer upon fulfilment of the contractual obligations by transferring the promised goods and/or rendering the promised services as in general the Group generally controls the goods or services before transferring them to the customer.
The Group recognizes revenue when it meets its obligations under the terms of the contract, by transferring the promised service to the customer. An asset (good or service) is recognized as transferred after the customer obtains control over that asset.
There is a contract with a customer only when upon its entry into force it:
A contract for which one of the above criteria has not yet been met is subject to a new evaluation in each reporting period. Remuneration received under such a contract is recognized as a liability (liability under the contract) in the Statement of financial position until:
In the initial evaluation of its contracts with customers, the Company makes an additional analysis and assessment of whether two or more contracts should be considered in their combination and should be reported as one and respectively whether the promised goods and / or services in each individual and / or combined contract must be accounted for as one and / or more performance obligations.
Any promise to transfer goods and / or services that are distinguishable (themselves and in the context of the contract) is accounted for as a single performance obligation.
The Company recognizes revenue for each individual obligation to perform within an individual contract with a customer by analyzing the type, term and conditions for each specific contract.
The revenue is measured on the basis of the transaction price determined for each contract.
The transaction price is the amount of the remuneration to which the Company expects to be entitled, except for the amounts collected on behalf of third parties. In determining the transaction price, the Company takes into account the terms of the contract and its usual commercial practices.
The transaction price usually includes a fixed sale price, according to a general or customer price list.
The Variable remuneration is included in the transaction price only to the extent that it is highly probable that no significant adjustment will be made to the amount of revenue recognized cumulatively.
The company reports revenues from services, complying with the commitments under the contract. Revenues from services are reported upon final completion of the services (by sites) recognized as performed.
Other income and revenues are recognized when the right to receive them is established.
The Group companies apply IFRS 15 and the management carefully examines its trade practices for possible changes at the time of revenue recognition. No change in the obligations for performance and the distribution of the price of the contracts and recognition of revenues is needed for the reporting period.
Depending on the nature of the activity and the contracts with the clients, the management has assessed the categories of revenue breakdown and has disclosed them in Note 4.01.
The expenses of the Group are recognized at the time of their occurrence and on the basis of the accrual
and comparability principles. Expenses are recognized when there is a decrease in future economic benefits associated with a decrease in an asset or an increase in a liability that can be measured reliably. Recognition of expenses for the current period is made when revenue is accrued. An expense is recognized immediately in the statement of comprehensive income when the expense does not create future economic benefits or when and to the extent that future economic benefits do not meet the requirements or cease to meet the requirements for recognition of an asset in the statement of financial position. Expenses are accounted for on an accrual basis and are comparable to recognized revenue. They are measured at the fair value of the remuneration paid or pending for payment.
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, nonrefundable 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 company with a similar maturity and purpose. The difference between the cash price equivalent and the general 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 evaluation 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:
| Vehicles | 4 years |
|---|---|
| Computer equipment | 2-5 years |
| Office equipment | 3- 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.
The book value 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 identified as missing.
Profits or losses arising on the write off of an item of property, plant and equipment are included in the statement of comprehensive income when the asset is written off (unless IAS 17 requires otherwise in a sale and leaseback). Profits and losses on disposals of non-current assets are determined by deducting the book value of the asset and the selling expenses from the proceeds from the sale (disposal). They are stated net, to "Other operating income" in the statement of comprehensive income.
The receivable on disposal of an asset of property, plant and equipment is initially recognized at fair value.
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 evaluated 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: expenses for preparation of the site (the place where the asset will be used), expenses for initial delivery, installation expenses, expenses for fees of persons related to the project, nonrefundable taxes, etc.
Intangible assets are recognized if they meet the definition of intangible assets set out in IAS 38 Intangible Assets, namely:
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 of their implementation. The book value of the intangible asset is adjusted to the extent of the expenses leading to the increase of the expected future economic benefits associated with the use of an intangible asset over the initially determined standard efficiency.
Goodwill is the excess of purchase prices over the fair value of identifiable net assets of company acquires as of the date of acquisition (business combination). Initially, it is presented in the consolidated financial statements at acquisition cost and subsequently it is presented at acquisition cost minus impairment. Goodwill is not amortized.
The goodwill generated as a result of the acquisition of a daughter company is presented in the consolidated statement of financial position as a part of non-current assets and the goodwill generated 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. The goodwill associated with the acquisition of daughter companies is tested for impairment at least one per year. Losses recognized as a result of impairment of goodwill are not reversable. Profit or loss from the sale of a daughter company include also book value of goodwill associated with this daughter 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.
Losses from impairment of goodwill are presented in the statements of comprehensive income as part of "Impairment of non-current assets.
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 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 company commits to purchase or sell the asset.
Capital investments owned by the Group are subsequently evaluated at fair value. The results of the subsequent evaluation 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.
Investments in associated companies are reported following the capital method. The share of the Group in the comprehensive income of an associated company is shown on one line in the consolidated statements in a way that the amount of investment reflects the share of the Group in the net assets of the associated company as of the date of the financial statements. The Group recognizes its share in the losses of an associated company up to the amount of its investment, including all internal loans extended, unless it has undertaken an obligation to pay such liabilities on behalf of the associated company.
As of 31.03.2022 the Group reports a share in the profit of associated companies at the amount of BGN 6 thousand. The balance sheet amount of investments in associated companies was increased with the amount of reported profit.
Non-current assets are classified as held for sale if their book value will be recovered through sale rather than through continuing use in the Company's operations. This condition is considered to exist only when the sale is highly secure and the relevant non-current assets are available for immediate sale in their present condition.
Non-current assets classified as held for sale are measured at the lower value between the fair value and the book value less the costs to sell.
Inventories are accounted at the lower of the two following values: acquisition cost (cost price) 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 first-in-first-out method is used.
A financial instrument is any contract that gives rise to both a financial asset in one entity and a financial liability or equity instrument in another enterprise.
Upon initial recognition, financial assets are classified into three groups, according to which they are subsequently assessed at depreciated value, at fair value through other comprehensive income and at fair value through profit or loss.
The classification of financial assets upon initial recognition depends on the characteristics of the contractual cash flows of the respective financial asset and the business model of the Company for its management.
The business model of the Company for management of financial assets reflects how the Group manages its financial assets to generate cash flows. The business model determines whether cash flows are the result of contractual cash flows, the sale of financial assets, or both.
The Group initially presents financial assets at fair value, and in the case of financial assets that are not carried at fair value through profit or loss, the direct transaction costs are added. An exception is trade receivables that do not contain a material financing component - they are estimated based on the transaction price determined in accordance with IFRS 15 and the invoices issued.
For the purposes of Subsequent evaluation, financial assets are classified into four categories:
During the current period, the Group reports financial assets in one of these categories - financial assets at
depreciated value.
This category is the most significant for the Group.
The Group measures financial assets at depreciated value when both of the following conditions are satisfied:
The management of the Group has assessed the financial assets representing cash in banks, interest-bearing receivables from related companies, trade receivables and other receivables (i.e., trade loans receivables and others) are held by the Group in order to obtain the agreed cash flows and they are expected to result in cash flows that represent solely principal and interest payments under the business model applied.
Financial assets at depreciated value are subsequently measured using the effective interest rate method (EIR). They are subject to impairment. Profits and losses are recognized in the statement of comprehensive income (in profit or loss for the year) when the asset is written off, modified or impaired.
A financial asset is written off in the statement of financial position of the Group when:
Continuing involvement, which is in the form of a guarantee on the transferred asset, is measured at the lower of the two values: the initial book value of the asset and the maximum amount of consideration that the Group may be required to pay.
The Group recognizes an adjustment (provision for impairment) for expected credit losses on all debt
instruments that are not accounted at fair value through profit or loss. Expected credit losses are calculated as the difference between the contractual cash flows payable under the terms of the contract and all the cash flows that the Group expects to receive discounted at the initial effective interest rate.
At each accounting date, the Group determines whether the debt instrument is assessed as such with low credit risk using all reasonable and well-grounded information that is available without incurring unnecessary expense or effort. In making this assessment, the Group reviews the internal credit rating of the debt instrument. In addition, the Group assesses whether there is a significant increase in credit risk when contractual payments are overdue for more than 30 days.
The Group considers a financial instrument as default when contractual payments are overdue for more than 60 days. However, in certain cases, it may treat a financial asset as default when internal or external information provides an indication that it is unlikely that the Group will receive the full amount of the outstanding contractual amounts before taking into account any credit improvements held by it. Financial assets are written off when there is no reasonable expectation for collection of contractual cash flows.
To calculate the expected credit losses of trade receivables and assets under contracts with customers, the Group has chosen and applies a simplified matrix-based approach for calculating expected credit losses and does not track subsequent changes in their credit risk. In this approach, it recognizes an adjustment (provision for impairment) based on the expected credit loss for the entire receivable period at each reporting date. The Group has developed and applies a provisioning matrix based on historical experience with respect to credit losses, adjusted for prognostic factors, specific for the debtors and the economic environment, and correlated with the percentage of credit losses. The collectability of receivables from related companies are assessed on individual basis considering factors as financial needs of each related company and the business development plan for the next periods.
Financial assets are written-off when there is no reasonable expectation of collection of contractual cash flows.
Initially, all financial liabilities are recognized at fair value, and in the case of loans and borrowings and trade and other payables, the net of directly related transaction costs.
Subsequent evaluation of financial liabilities depends on their classification as described below.
This category is essential for the Group. Subsequent to their initial recognition, the Group evaluates interestbearing loans and borrowings at depreciation value using the effective interest method. Profits and losses are recognized in the statement of comprehensive income (in profit or loss for the year) when the corresponding financial liability is derecognized, as well as through depreciation at the effective interest rate method.
Depreciation value is calculated by taking into account any discounts or acquisition premiums, as well as fees or expenses, which are an integral part of the effective interest rate. Depreciation is included as a "financial expense" in the statement of comprehensive income (in profit or loss for the year).
Financial liabilities are written off when the liability is repaid, terminated or expires. When an existing financial liability is replaced by another of the same creditor under substantially different conditions, or the terms of an existing liability are substantially altered, such exchange or modification shall be treated as derecognition of the original liability and recognition of a new one. The difference with the book value of a financial liability settled or transferred to another party in cash and/or non-monetary assets is recognized in profit or loss for the period.
Cash includes cash on hand and amounts in current accounts, and cash equivalents are short-term deposits with banks whose original maturity is less than 3 months.
The cash flow statement is presented using the direct method.
For the purpose of preparing the cash flow statement:
Cash and cash equivalents are subsequently presented at depreciated value, without any accumulated adjustments for expected credit losses.
At the inception of the contract, the company assesses whether the contract represents or contains a lease. A contract represents or contains elements of a lease if, under that contract, the right to control the use of an asset for a specified period of time is transferred in exchange for consideration. The assessment includes an assessment of the following factors:
The lease contract under which all risks and economic benefit of ownership of the asset are transferred to the company of the Group is classified as a financial leasing and the leased asset is capitalized in the consolidated statement of financial position of the lessee and presented as property, plant and equipment. Upon initial recognition, leased assets are accounted at the lower value of the following two: their current fair value or the present value of the minimum lease payments. The minimum lease payments are apportioned between the finance expenses (interest) and the reduction of the lease liability (principal). Financial expenses are allocated to each period over the lease term so that a constant interest rate is reached
on the remaining outstanding portion of the principal under the lease liability. Interest expenses are included in the consolidated statement of comprehensive income as "Financial expenses".
Assets acquired under a financial leasing are depreciated based on the useful life of the asset and within the lease term.
Provisions are recognized when the Group has a present (constructive or legal) obligation as a result of a past event, and it is probable that an outflow of resources will be required to settle the obligation. Provisions are estimated on the basis of the best estimate of the management at the date of preparation of the financial statements for the expenses necessary for the settlement of the respective obligation. The estimate is discounted when the maturity of the liability is long-term. When it is expected that part of the resources that will be used to settle the obligation will be recovered from a third party, the company recognizes a receivable, if there is a high degree of certainty of its receipt, its value can be reliably determined as income (credit) on the same position in the Statement of Comprehensive Income, where the provision itself is presented.
The Group accrues provisions for guarantee service of devices sold. The provision is calculated on the basis of best estimate of management about the expected expenses, which the Group will incur in case of guarantee events and based on the past experience about the sold products/ services. As of the date of the consolidated financial statements, the management estimated the provision for guarantee services to be 0,5% of net revenue from sale of goods and production, generated from clients outside the group of Allterco.
The government of the Republic of Bulgaria undertakes the liability to ensure pension payments on the basis of defined contribution plans. The liability of the Company to pay the amounts booked under the defined contribution plans for the employees is recognized the in statement of comprehensive income at the time of occurrence of the liability.
The Group recognize as a liability undiscounted amount of estimated cost of annual paid leave, which is expected to be paid to employees in return to their labor for the past reporting period.
In compliance with the Labor Code, when a labor contract of an employee that obtained the right for pension is terminated, the Company pays a compensation at the amount of two gross monthly salaries, if the employee worked for the Company less than 10 years, or six gross monthly salaries if the employee worked for the Company more than 10 years. The Group estimates that the amount is not significant and therefore it is not included in the financial report.
The Group has adopted the financial concept of maintaining the capital. The financial capital maintaining is assessed in nominal monetary units. Profit for the reporting period is considered to be acquired only if the total equity amount at the end of the period exceeds the amount in the beginning of the period, after deducting the distributions to owners or their investments in capital during the period.
Allterco JSCo is a joint-stock company and is obliged to register in the Commercial Register its statutory share capital, which shall serve as a security for its creditors. The shareholders are responsible for the liabilities of the mother-company up to the amount of their shareholding in the capital and may claim the return of that holding only in case of bankruptcy or liquidation proceedings. The mother-company reports it registered capital at par value of the number of shares registered.
Equity is the residual value of an entity's assets after deducting all its liabilities. This includes:
Registered capital – it is presented in the Statement of financial position according to the number of issued shares with nominal value of each share.
Financial result – it is formed as the difference between the income and expenses accrued for it. This includes:
The Equity is decreased by the dividends paid to the shareholders during the period in which they are distributed (voted by the General Meeting).
In accordance with the requirements of the Commercial Law and the Statute of Allterco JSCo., the company
is obliged to form reserves at the expense of:
Treasury shares are reported in the statements of financial position at acquisition cost, which is used to decrease the equity of the Group. The profit and losses from the sale of treasury shares are reported in the equity of the Group, as part of the retained earnings.
During the past reporting periods the company made payments to the employees of its Bulgarian subsidiaries in shares.
The payment in shares against labor services is made with shares of the mother-company. The equity instruments are valued at fair value as of the date of share transfer. The expense related to the payment in shares is recognized for the period in which the labor services were rendered.
Reserve from translation of financial statement of foreign operations - arises from the net effects of foreign currency conversion of the subsidiaries' financial statements from their functional currencies into Bulgarian levs for the purpose of consolidation.
Other comprehensive income is formed by the difference between previous book value of financial assets reported at fair value and the fair value of such assets as of the date of the report.
Treasury shares are presented in the financial statements at fair value as of the date of the statements and are reported as a decrease in the shareholder's equity. Profits and losses from the sale of treasury shares are reported directly in the shareholder's equity.
Income tax expense represents the sum of the current income taxes and the tax effect on temporary tax differences. The current income tax is determined in accordance with the tax legislation of the respective country. The nominal corporate profit tax rate in Bulgaria for 2021 and 2022 is 10%.
The foreign daughter companies are subject to corporate profit tax in accordance with the local legislation. The applicable tax rates are as follows:
Unless otherwise stated, all amounts are in BGN thousand.
| Country | Nominal tax rate | |
|---|---|---|
| 2022 | 2021 | |
| Singapore | - | 17 % |
| Malaysia | - | Up to MYR 500 000 - 20% |
| and for the excess - 25% |
||
| USA | 15-35% | 15-35 % |
| Thailand | - | 20 % |
| Germany | 15,825% | 15,825% |
Deferred tax assets and / or liabilities are the amounts of recoverable and payable income taxes for future periods in respect of deductible and taxable temporary tax differences.
Temporary tax differences are established by comparing the book value of an asset or liability presented in the Statement of financial position with its tax base when applying the tax rules.
Deferred income taxes are calculated using the balance sheet liability method. Deferred tax liabilities are calculated and recognized for all taxable temporary differences, while deferred tax assets are recognized only if it is probable that they will be recovered and if the company will be able to generate sufficient profit in the future from which they to be deducted.
The effect of recognizing the deferred tax assets and / or liabilities is reflected where the effect of the event that gave rise to them is presented.
For events that affect the statement of profit or loss and other comprehensive income, the effect of deferred tax assets and liabilities is also recognized in the statement of comprehensive income.
For events that are initially reported in equity (revaluation reserve) and deferred tax assets and liabilities are recognized at the expense of equity.
In the Statement of financial position, deferred tax assets and / or liabilities are presented as compensation, as they are subject to a single taxation regime.
As of December 31, 2021 and March 31, 2022 the Group recognize deferred corporate profit taxes only for the Bulgarian companies and they are estimated using 10% rate, which remains unchanged for 2022.
The basic earnings per share are calculated by dividing the net profit or loss for the period that is subject to distribution among shareholders of ordinary shares, by the average weighted number of ordinary shares held during the period.
The weighted average number of shares represents the number of ordinary shares hold in the beginning of the period, adjusted by the number of repurchased ordinary shares and the new issued shares during the period multiplied by a time-weighting factor. This factor represents the number of days in which specific shares have been held relative to the total number of days in the period.
Earning of shares with reduced value should not be calculated because there are no shares with reduced value issued.
In the process of applying accounting policies, the management of the Group makes judgments that have a material effect on these financial statements. Such judgments by definition are rarely equal to actual results.
As a result of their nature, they are subject to constant review and updating and include historical experience and other factors as expectations for future events that management believes are reasonable in the current circumstances.
The estimates and assumptions that carry a significant risk of a material adjustment in the carrying amounts of assets and liabilities in the next financial year are set out below.
The financial statements of property, plant and equipment and intangible assets include the use of estimates of their useful lives and carrying values, which are based on judgments made by the management of the Group.
The Management estimates the amount and timing of expected future cash flows related to receivables based on experience in current circumstances in the following groups: individual accounts, households and other small consumers and legal receivables. Due to the inherent uncertainty of this assessment, the actual results may differ from those expected. The management of the Group reviews the estimates from previous years against the actual results from the previous year.
In connection with the implementation of IFRS 9 Financial Instruments, the Group have used their accumulated experience in the area of credit losses, and have taken into account current conditions and their
forecasts to estimate the expected credit losses on their trade receivables.
Fair value is the price that could be obtained from the sale of an asset or could be paid for the transfer of a liability in the ordinary course of trade between market participants at the date of assessment (starting price). Fair value assessment is based on the assumption that the transaction to sell an asset or transfer a liability has been carried out:
The principal or the most advantageous market should be accessible for the Company.
The fair value of an asset or liability is estimated by making the assumptions that market participants would make when establishing the price of the asset or liability, assuming that they act in their best economic interest.
All assets and liabilities that are measured at fair value or for which fair value disclosure is required in the financial statements, are grouped into categories according to the fair value hierarchy, as described below, based on the lowest level of input data used, which has a significant impact on fair value measurement in general:
For the assets and liabilities that are regularly evaluated at fair value the Company shall review their categorization at the appropriate level of the fair value hierarchy (based on the lowest level of used input data, that have a significant impact on the fair value evaluation as a whole) to the end of the reporting period and determine whether there is a need to make a transfer(s) from one level to another.
| Lands | Buildings | Facilities | Machinery and equipment |
Vehicles | Computer equipment |
Office equipme nt |
Other | Expenses for acquisition of fixed tangible assets |
Total | |
|---|---|---|---|---|---|---|---|---|---|---|
| January 01, 2021 | ||||||||||
| Acquisition cost | 1 476 | 3 032 | 131 | 728 | 458 | 240 | 128 | 151 | 9 | 6 353 |
| Accumulated depreciation | - | (92) | (55) | (452) | (291) | (183) | (97) | (116) | - | (1 286) |
| Book value | 1 476 | 2 940 | 76 | 276 | 167 | 57 | 31 | 35 | 9 | 5 067 |
| Acquisitions | - | - | - | 53 | - | 24 | 58 | 142 | 46 | 323 |
| Purchase | - | - | - | 53 | - | 24 | 58 | 142 | 46 | 323 |
| Decrease (book value) | - | - | - | - | (3) | (3) | (45) | - | - | (51) |
| Disposals | - | - | - | - | - | - | (43) | - | - | (43) |
| Other way | - | - | - | - | (3) | - | - | - | - | (3) |
| Written off book value | (3) | (2) | - | - | (5) | |||||
| related to sold investments | ||||||||||
| Depreciation for the | - | (121) | (39) | (217) | (94) | (49) | (8) | (13) | - | (541) |
| period | ||||||||||
| Changes in depreciation | - | - | - | - | 3 | 4 | 84 | 51 | - | 142 |
| Depreciation of written off | - | - | - | - | 3 | 4 | 84 | 51 | - | 142 |
| assets | ||||||||||
| December 31, 2021 | ||||||||||
| Acquisition cost | 1 476 | 3 032 | 131 | 781 | 452 | 257 | 57 | 242 | 55 | 6 483 |
| Accumulated depreciation Book value at the end |
- 1 476 |
(213) 2 819 |
(94) 37 |
(669) 112 |
(382) 70 |
(228) 29 |
(21) 36 |
(78) 164 |
- 55 |
(1 685) 4 798 |
| January 01, 2022 | ||||||||||
| Acquisition cost | 1 476 | 3 032 | 131 | 781 | 452 | 257 | 57 | 242 | 55 | 6 483 |
| Accumulated depreciation | - | (213) | (94) | (669) | (382) | (228) | (21) | (78) | - | (1 685) |
| Book value at the end | 1 476 | 2 819 | 37 | 112 | 70 | 29 | 36 | 164 | 55 | 4 798 |
| Acquisitions | - | 11 | - | 18 | 4 | 21 | 20 | - | 37 | 111 |
| Purchase | - | 11 | - | 18 | 4 | 21 | 20 | - | 37 | 111 |
| Decrease (book value) | - | - | - | - | - | (5) | - | (57) | - | (62) |
| Disposals | - | - | - | - | - | (5) | - | (57) | - | (62) |
| Depreciation for the | - | |||||||||
| period | (30) | (10) | (43) | (12) | (13) | (2) | (8) | - | (118) | |
| Changes in depreciation | - | - | - | - | - | (6) | - | (59) | - | (65) |
| Depreciation of written off | - | |||||||||
| assets | - | - | - | - | (6) | - | (59) | - | (65) | |
| March 31, 2022 | ||||||||||
| Acquisition cost | 1 476 | 3 043 | 131 | 799 | 456 | 273 | 77 | 185 | 92 | 6 532 |
| Accumulated depreciation | - | (243) | (104) | (712) | (394) | (235) | (23) | (27) | - | (1 738) |
| Book value at the end | 1 476 | 2 800 | 27 | 87 | 62 | 38 | 54 | 158 | 92 | 4 794 |
The land and building owned by the Group are pledged in relation with bank financing used for their purchase (see point 3.14).
EXPLANATORY NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
AS OF MARCH 31, 2022
Unless otherwise stated, all amounts are in BGN thousand.
| Software | ISO certificates and intellectual |
Trademarks and prototypes |
Others | Capitalized R&D expenses |
Total | |
|---|---|---|---|---|---|---|
| property rights | ||||||
| January 01, 2021 | ||||||
| Acquisition cost | 190 | 874 | 2 691 | 212 | 1 535 | 5 502 |
| Accumulated amortization | (190) | (244) | (625) | (34) | - | (1 093) |
| Book value | - | 630 | 2 066 | 178 | 1 535 | 4 409 |
| Acquisitions | 141 | 5 | 1 767 | - | 2 285 | 4 198 |
| Purchase | 6 | 5 | 11 | - | - | 22 |
| Capitalized | - | - | - | - | 2 285 | 2 285 |
| Put into operation | 135 | - | 1 756 | - | - | 1 891 |
| Disposals | - | (625) | (546) | (141) | (3 695) | (5 007) |
| Written off book value of assets | ||||||
| related to sold investments | - | (625) | - | (141) | - | (766) |
| Other way | - | - | (546) | - | (3 695) | (4 241) |
| Amortization for the period | (17) | (3) | (456) | (8) | - | (484) |
| Changes in amortization | - | 242 | 298 | 14 | - | 554 |
| Amortization of written off assets | - | - | 298 | - | - | 298 |
| Written off amortization of assets | ||||||
| related to sold investments | - | 242 | - | 14 | - | 256 |
| Book value as of the end | 124 | 7 | 2 831 | 29 | 125 | 3 116 |
| December 31, 2021 | ||||||
| Acquisition cost | 331 | 12 | 3 614 | 57 | 125 | 4 139 |
| Accumulated amortization | (207) | (5) | (783) | (28) | - | (1 023) |
| Book value | 124 | 7 | 2 831 | 29 | 125 | 3 116 |
| January 1, 2022 | ||||||
| Acquisition cost | 331 | 12 | 3 614 | 57 | 125 | 4 139 |
| Accumulated amortization | (207) | (5) | (783) | (28) | - | (1 023) |
| Book value | 124 | 7 | 2 831 | 29 | 125 | 3 116 |
| Acquisitions | - | - | - | - | 363 | 363 |
| Capitalized | - | - | - | - | 363 | 363 |
| Amortization for the period | (17) | (1) | (134) | (2) | - | (154) |
| March 31, 2022 | - | |||||
| Acquisition cost | 331 | 12 | 3 614 | 57 | 488 | 4 502 |
| Accumulated amortization | (224) | (6) | (917) | (30) | - | (1 177) |
| Book value | 107 | 6 | 2 697 | 27 | 488 | 3 325 |
EXPLANATORY NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF MARCH 31, 2022
Unless otherwise stated, all amounts are in BGN thousand.
| March 31, 2022 | December 31, 2021 | |||||
|---|---|---|---|---|---|---|
| Vehicles | Buildings | Total | Vehicles | Buildings | Total | |
| In the beginning of the period | ||||||
| Acquisition cost | 232 | 9 | 241 | 127 | 9 | 136 |
| Amortization | (124) | (9) | (133) | (84) | (6) | (90) |
| Book value | 108 | - | 108 | 43 | 3 | 46 |
| Acquisitions | 161 | - | 161 | 116 | - | 116 |
| Operating leasing | 161 | - | 161 | 116 | - | 116 |
| Disposals | - | - | - | (11) | - | (11) |
| Written off | - | - | - | (11) | - | (11) |
| Amortization for the period | (15) | - | (15) | (40) | (3) | (43) |
| Book value at the end of the period | ||||||
| Acquisition cost | 393 | 9 | 402 | 232 | 9 | 241 |
| Amortization | (139) | (9) | (148) | (124) | (9) | (133) |
| Book value | 254 | - | 254 | 108 | - | 108 |
The Group has concluded lease agreements for renting office spaces and vehicles used in its activity.
| March 31, 2022 |
December 31, 2021 |
|
|---|---|---|
| 34 | 34 | |
| 126 | 126 | |
| 160 | 160 | |
The management of the Croup has undertaken the necessary procedures to perform the mandatory impairment test of the goodwill recognized in the consolidated statement of financial position for the acquisition of the subsidiaries. For this purpose, it is assumed that each individual company appears as a "cash-generating unit". The calculations are made by the management, based on a detailed review of whether events and facts have occurred, which are indicators of changes in the assumptions and estimates made as of March 31, 2022 and December 31, 2021.
As a result of the analyses performed by the Group's management no impairment of goodwill is recognized as of march 31, 2022.
During 2021 Allterco participated in the establishment of a new company in China – Allterco Asia Ltd. , with seat and management address Shenzhen, Guangdong Province. The registered capital of the new company is CNY 100 000 as Allterco holds 30% (8 thousand BGN) and has an option to acquire additional up to 50%, reaching up to 80%, if the development of the company meets the expectations of Allterco.
The movement of the investments in associated companies is as follows:
| March 31, 2022 | December 31, | |
|---|---|---|
| 2021 | ||
| Opening balance at Jan 1 | 40 | - |
| Acquisition of participation in the capital | - | 8 |
| Share in the profit for the period | 6 | 32 |
| Balance as of December 31 | 46 | 40 |
| March 31, 2022 |
December 31, 2021 |
|
|---|---|---|
| Ordinary registered shares – Link Mobility, in the beginning of the period |
2 624 | 6 566 |
| Decrease | (205) | (3 942) |
| Effect from transactions with financial assets | - | (369) |
| Revaluation of other financial instruments | (205) | (3573) |
| Ordinary registered shares – Link Mobility, at the end of the period |
2 419 | 2 624 |
In September 20201 the Company sold its investments in Allterco PTE, Singapore, Allterco SDN Malaysia and Allterco Co. LTD Thailand. In compliance with the requirements of IFRS 5 Non-current assets Held for Sale and Discontinued Operations as of December 31, 2020 those assets are presented as held for immediate sale. The terms of the sale contract stipulate that 50% of the purchase price at the amount of 1 050 thousand EUR (2 054 thousand BGN) is due after 2022 (525 thousand EUR (1 027 thousand BGN) is due in 18 months after the date of the deal and the remaining 535 thousand EUR (1 027 thousand BGN) is due in 36 months after the date of the deal). Because of this, the receivable related to the sale of the daughter companies which is due after 2022 is shown as long-term receivable.
The management assess that the value of other long-term receivables presented in the statement of financial
EXPLANATORY NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF MARCH 31, 2022 Unless otherwise stated, all amounts are in BGN thousand.
position as of March 31, 2022 is equal to their fair value.
| March 31, 2022 |
December 31, 2021 |
|
|---|---|---|
| Deferred tax assets | ||
| Accruals for unused leave | 19 | 19 |
| Provisions for liabilities | 30 | 30 |
| Impairment of receivables | 25 | 25 |
| Total deferred tax assets | 74 | 74 |
| Deferred tax liabilities | ||
| Depreciation | (2) | (2) |
| Total deferred tax liabilities | (2) | (2) |
| Total deferred tax asset (liability) | 72 | 72 |
| March 31, 2022 | December 31, 2021 |
|
|---|---|---|
| Goods | 4 815 | 3 900 |
| Supplies | 1 247 | 2 227 |
| Goods in transit | 2 367 | 979 |
| Materials | 151 | 454 |
| Total: | 8 580 | 7 560 |
As of March 31, 2022 in the consolidated statement of financial position are presented:
The Group policy is to try to maintain optimal quantity of goods equal to a several months forecast of sales. The management of the Group expects that in the near future the level of inventories will continue to increase as a consequence of increasing sales as well as a result of increasing deficit of certain electronic components necessary for the production of devices.
| March 31, 2022 | December 31, 2021 |
|
|---|---|---|
| Receivables from customers | 14 450 | 12 642 |
| Advances to suppliers | 7 452 | 6 762 |
| Impairment of receivables | (237) | (237) |
| Total | 21 665 | 19 167 |
The management made an assessment for impairment of a receivable related to the sale of its European telecom business, which was due in August 2021. The management stared a procedure for collection of the receivable following the provisions of the share purchase agreement signed, which provides for initiation of an arbitrage proceedings in front of the International Arbitrage in Vienna. The impairment recognized for this receivable is at the amount of 152 thousand BGN (5% of due amount). One of the group companies recognized an impairment of receivable ate the amount of 85 thousand BGN (50% of the receivable from EDS Ltd., Serbia).
As of March 31, 2022 no additional impairment is recognized.
| March 31, 2022 | December 31, 2021 |
|
|---|---|---|
| TAX RECEIVABLES | 1 943 | 1 884 |
| Overpaid corporate profit tax | 2 | 2 |
| VAT refund receivable | 1 940 | 1 857 |
| Customs duties | 1 | 25 |
| OTHER RECEIVABLES | 30 | 28 |
| Advances to employees | 10 | 4 |
| Deposits with companies and guarantees | 12 | 22 |
| Other receivables | 8 | 2 |
| Total: | 1 973 | 1 912 |
| March 31, 2022 | December 31, 2021 | |
|---|---|---|
| Cash on hand | 83 | 92 |
| Cash in current accounts | 30 101 | 30 320 |
Unless otherwise stated, all amounts are in BGN thousand.
| Other cash - debit cards |
9 | 4 |
|---|---|---|
| Restricted cash (guarantees) | - | 125 |
| Total: | 30 193 | 30 541 |
| By currency | March 31, 2022 | December 31, 2021 |
| BGN | 11 636 | 13 298 |
| EUR | 9 318 | 6 180 |
| USD | 9 239 | 11 063 |
| Total | 30 193 | 30 541 |
The Group's cash funds are in bank accounts with banks with stable long-term ratings. The Management has assessed the expected credit losses on cash funds and cash equivalents. The estimated value is determined as insignificant and is not accrued in the consolidated financial statements of the Group as of March 31, 2022
| March 31, 2022 |
December 31, 2021 | |||||
|---|---|---|---|---|---|---|
| Up to one year |
Over one year |
Total | Up to one year |
Over one year |
Total | |
| Operating activity | ||||||
| Insurances | 26 | - | 26 | 35 | - | 35 |
| Information Services | 3 | - | 3 | 28 | - | 28 |
| Subscriptions | 17 | - | 17 | 27 | - | 27 |
| Memberships | 27 | - | 27 | 34 | - | 34 |
| Licenses/ certificates | 30 | - | 30 | |||
| Trade fairs | - | - | - | 109 | - | 109 |
| Other | 8 | - | 8 | 1 | - | 1 |
| Total | 111 | - | 111 | 234 | - | 234 |
Then depreciable portion of bank loans is as follows:
| March 31, 2022 |
December 31, 2021 |
|
|---|---|---|
| Raiffeisenbank AD, including: | 1 830 | 1 900 |
| up to one year - |
287 | 285 |
| over one year - |
1 543 | 1 615 |
| DSK bank EAD | 561 | 617 |
| up to one year - |
225 | 225 |
| over one year - |
336 | 392 |
EXPLANATORY NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF MARCH 31, 2022
Unless otherwise stated, all amounts are in BGN thousand.
| Other short-term financing Allterco Robotics USA | 82 | 62 |
|---|---|---|
| Total bank loans - non-current portion: |
1 879 | 2 007 |
| Total bank loans - current portion: |
594 | 572 |
| Bank | Raiffeisenbank AD |
|---|---|
| Date of the contract: | August 25, 2017 |
| Agreed loan amount: | 1 620 000 |
| Original currency | EUR |
| Purpose | Financing up to 90% (excluding VAT) of the final price of all company shares representing 100% of the capital of the joint debtor Allterco Properties EOOD (Solely-owned LLC), designated in the concluded between the Borrower and JFC Developments OOD (Ltd.) Share Transfer Contract into Final Contract |
| Term | May 10, 2029 |
| Collaterals: | Mortgage on real estate, owned by Allterco Properties EOOD (Solely-owned LLC), joint debtor - Allterco Properties EOOD (Solely-owned LLC), pledge of all bank accounts of Allterco JSCo. with the bank |
| Creditor | DSK Bank AD |
|---|---|
| Date of the contract: | September 28, 2020 |
| Total amount | EUR 450 thousand |
| Purpose | Financing of 90% of the expenses for purchase of real estate |
| Currency | EUR |
| Fixed term | September 28, 2024 |
| Collaterals: | Mortgage of real estate owned by Allterco Properties Ltd. |
A subsidiary of Allterco has an agreement for bank financing in the form of overdraft, which was not used during the reporting period. Details about the parameters of this financing are presented in point 5.
| March 31, 2022 |
December 31, 2021 | |||||
|---|---|---|---|---|---|---|
| Up to one year |
Over one year |
Total | Up to one year |
Over one year |
Total | |
| Finance lease liabilities | 39 | 90 | 129 | 31 | - | 31 |
| Operating lease liabilities | 31 | 121 | 152 | 27 | 80 | 107 |
| Lease liabilities | 70 | 211 | 281 | 58 | 80 | 138 |
Liabilities under lease agreements presented in the consolidated statement of financial position include the
liabilities of the Group under rental agreements for offices and vehicles, which are recognized in accordance with the requirements of IFRS 16 Leasing.
| March 31, 2022 |
December 31, 2021 |
|
|---|---|---|
| Suppliers | 586 | 931 |
| Advances from clients | 267 | 556 |
| Total: | 853 | 1 487 |
| March 31, 2022 | December 31, 2021 |
|
|---|---|---|
| Payables to employees | 35 | 5 |
| Payables for unused paid leave | 135 | 168 |
| Total: | 170 | 173 |
| March 31, 2022 | December 31, 2021 |
|
|---|---|---|
| Corporate tax | 874 | 281 |
| Value Added Tax | 493 | 940 |
| Income tax | 135 | 73 |
| Other taxes | 18 | 21 |
| Total: | 1 520 | 1 315 |
| March 31, 2022 | December 31, 2021 |
|
|---|---|---|
| Liabilities for purchase of shares | 625 | 665 |
| Guarantees/deposits for rent | 61 | 61 |
| Guarantee service provision | 225 | 300 |
| Total other liabilities | 911 | 1 026 |
Allterco JSCo was registered in 2010. The registered capital of the Company as of March 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 ninetynine) ordinary registered shares with a nominal value of BGN 1 each. The registered capital is fully paid in four installments:
The first issue was made upon the establishment of the Company in the form of a non-monetary contribution in the amount of BGN 50 000, which had as its subject ordinary registered voting shares of the capital of Teravoice AD.
In 2010 a second non-monetary contribution was made in the amount of BGN 5 438 000, which had as its subject shares from the capital of Tera Communications AD.
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 JSCo 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, confirmed by the Financial Supervision Commission with Decision № 487 – Е of July 08, 2016 entered in the Commercial Register under No.20161108100414 of November 08, 2016.
In 2020 the capital of the 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 JSCo 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 № 148- F of February 18, 2020, Decision № 405-E of June 11, 2020, Decision № 601-E of August 13, 2020 and Decision № 791-E of October 29, 2020.
As of March 31, 2022 the shareholders in the company are:
| Name | Number of shares: |
% in the capital |
|---|---|---|
| Svetlin Todorov | 5 847 120 | 32.48% |
| Dimitar Todorov | 5 847 120 | 32.48% |
| Persons holding 5% of the capital |
EXPLANATORY NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
AS OF MARCH 31, 2022
Unless otherwise stated, all amounts are in BGN thousand.
| Other physical persons and legal entities | 6 305 759 |
35.04% |
|---|---|---|
| Total | 17 999 999 |
100.00% |
| March 31, 2022 |
December 31, 2021 |
|
|---|---|---|
| Opening balance | 39 394 | 13 531 |
| Net profit | 3 909 | 15 962 |
| Distribution of dividends | - | (3 600) |
| Change due to sale of subsidiaries | - | 94 |
| Closing balance at the end of the period | 43 303 | 39 394 |
| March 31, 2022 | December 31, 2021 |
|
|---|---|---|
| Opening balance | 1 800 | 1 500 |
| Reserve from issue of shares | - | 300 |
| Balance at the end of the period | 1 800 | 1 800 |
As of March 31. 2022 the reserves from issue of shares are at the amount of 5 403 thousand BGN. They are formed by the excess of share price of newly issued shares during 2020 over the par value of shares. The excess amount was 6 000 thousand BGN and was decreased by the expenses related to the share issue at the amount of 2967 thousand BGN and by 300 thousand BGN, which were transferred to reserves, pursuant to a decision of the general meeting of shareholders held on June 28, 2021.
| March 31, | December 31, | |
|---|---|---|
| 2022 | 2021 | |
| Value at the beginning of the period | 1 036 | 4 849 |
| Reserves transferred to retained earnings | - | (240) |
| Reserves related to financial instruments reported at fair value | (205) | (3 573) |
| Value at the end of the period | 831 | 1 036 |
The reserves related to the long-term financial instruments decreased by 205 thousand BGN as a result of
the revaluation of the long-term financial instruments held at fair value as of March 31, 2022.
| 3 months of 2022 | 3 months of 2021 | ||||||
|---|---|---|---|---|---|---|---|
| Goods | Services and rents |
Total: | Produc tion |
Goods | Services and rents |
Total: | |
| Sales revenues | 17 131 | 19 | 17 150 | 108 | 13 651 | 1 208 | 14 967 |
| Cost of goods sold | (7 795) | - | (7 795) | - | (6 355) | - | (6 355) |
| Other direct costs | (49) | (39) | (88) | (35) | (454) | (985) | (1 474) |
| Cost of sales | (7 844) | (39) | (7 883) | (35) | (6 809) | (985) | (7 829) |
| Gross profit | 9 287 | (20) | 9 267 | 73 | 6 842 | 223 | 7 138 |
| 3 months of 2022 |
3 months of 2021 |
|
|---|---|---|
| Loss from sale of fixed assets | - | (22) |
| Rents | 11 | - |
| Written off liabilities | 5 | 2 |
| Insurance indemnity | 26 | |
| Penalties | - | 1 |
| Financing / electricity price compensations | 7 | - |
| Exchange rate differences gains | 389 | 400 |
| Other operating income | 3 | 3 |
| Total: | 441 | 384 |
| 3 months of 2022 |
3 months of 2021 |
|
|---|---|---|
| Material expense | 87 | 39 |
| External services | 904 | 295 |
| Depreciation | 251 | 236 |
| Salaries and social security | 3 026 | 1 626 |
| Other administrative expenses | 21 | 8 |
| Total: | 4 289 | 2 204 |
| 3 months of 2022 |
3 months of 2021 |
|
|---|---|---|
| Bank fees | 19 | 16 |
| Written off receivables | 52 | 1 |
| Interest and penalties | 2 | - |
| Development cost recognized as expense | 6 | - |
| Penalties | 20 | 9 |
| Other | 8 | 5 |
| Total: | 107 | 31 |
| 3 months of 2022 |
3 months of 2021 |
|
|---|---|---|
| Currency exchange rates losses | 43 | 77 |
| Interest on financial lease | 2 | - |
| Interest on loans | 13 | 16 |
| Bank fees on cash balances | 29 | 30 |
| Total: | 87 | 123 |
EXPLANATORY NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
AS OF MARCH 31, 2022
Unless otherwise stated, all amounts are in BGN thousand.
| Contract | Annex | Creditor | Debtor | Joint debtor /Guarantor |
Amount/Li mit |
Financial conditions |
Term | COLLATERAL provided by the borrower |
|---|---|---|---|---|---|---|---|---|
| Investment loan August 25, 2017 contract under art. 114 para 10 of the Public Offering of Securities Act |
Annex No.1 October 31, 2018 |
Raiffeisen bank Bulgaria EAD |
Allterco JSCo |
Allterco Properties EOOD - solidary |
1 620 000 EUR |
Fixed interest rate for the whole period 3% per year; Management fee |
May 10, 2029 |
Mortgage on real estate owned by Allterco Properties EOOD; Pledge of receivables on bank accounts with the bank. Pledge under the law for financial security contracts; |
| Overdraft September 30, 2019 – contract under art. 114 para 10 of the Public Offering of Securities Act |
Annex No.1 of August 28, 2020 |
Raiffeisen bank Bulgaria EAD |
Allterco Robotics EOOD |
Allterco JSCo - guarantor |
1 000 000 EUR |
One-month EURIBOR, +2.5 %, but not less than 2.5%; management commission; commitment commission; commission for issuing guarantees; |
Septembe r 29, 2022 |
Pledge of receivables on accounts; |
| Contract for standard investment loan No.2757 dated September 28, 2020 |
none | DSK Bank AD |
Allterco Propertie s EOOD |
Allterco Trading EOOD – solidary debtor |
450 000 EUR |
Annual interest rate formed by a variable interest rate of 1m EURIBOR + 2.1% but not less than 2.1%; annual management fee; |
Septembe r 28, 2024 |
Mortgage on real estate owned by Allterco Properties EOOD; Pledge of receivables on bank accounts of Allterco Properties EOOD and Allterco Trading EOOD in DSK Bank. |
The companies included in the Group are disclosed in item 1.4. During the reporting period the Group did not engage in transactions with its shareholders or entities, which could be considered as related parties.
The accounting policies for financial instruments are applied to the items listed below
Structure of financial assets and liabilities by categories is as follows:
| March 31, 2022 | |||||||
|---|---|---|---|---|---|---|---|
| Financial assets according to the Statement of financial position |
Cash | Financial assets reported at depreciated value |
Financial assets reported at fair value through other comprehensive income |
Financial assets reported at fair value through profit or loss |
Total | ||
| Cash and cash equivalents | 30 193 | - | - | - | 30 193 | ||
| Other long term financial assets | - | - | 2 419 | - | 2 419 | ||
| Non-current trade receivables | - | 2 054 | - | - | 2 054 | ||
| Current trade receivables | - | 14 213 | - | - | 14 213 | ||
| Deposits and guarantees | - | 12 | - | - | 12 | ||
| TOTAL FINANCIAL ASSETS | 30 193 | 16 279 | 2 419 | - | 48 891 |
| March 31, 2022 | ||||||
|---|---|---|---|---|---|---|
| Financial liabilities according to the Statement of financial position |
Financial Financial liabilities liabilities reported at a reported at specifically depreciated value determined value |
Financial liabilities reported at fair value through profit or loss |
Total | |||
| Lease | 281 | - | - | 281 | ||
| Bank loans | 2 473 | - | - | 2 473 | ||
| Trade liabilities | 586 | - | - | 586 | ||
| Liabilities for purchase of shares | 625 | - | - | 625 | ||
| Guarantees | 61 | - | - | 61 | ||
| TOTAL FINANCIAL LIABILITIES | 4 026 | - | - | 4 026 |
| December 31, 2021 | ||||||
|---|---|---|---|---|---|---|
| Financial assets according to the Statement of financial position |
Cash | Financial assets reported at depreciated value |
Financial assets reported at fair value through other comprehensive |
Financial assets reported at fair value through profit |
Total | |
| income | or loss |
Unified Identification Code (UIC): 201047670 EXPLANATORY NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
AS OF MARCH 31, 2022
Unless otherwise stated, all amounts are in BGN thousand.
| Cash and cash equivalents | 30 541 | - | - | - | 30 541 |
|---|---|---|---|---|---|
| Other long term financial assets | - | - | 2 624 | - | 2 624 |
| Non-current trade receivables | - | 2 054 | - | - | 2 054 |
| Current trade receivables | 12 405 | - | - | 12 405 | |
| Deposits and guarantees | 22 | - | - | 22 | |
| TOTAL FINANCIAL ASSETS | 30 541 | 14 481 | 2 624 | - | 47 646 |
| December 31, 2021 | |||||||
|---|---|---|---|---|---|---|---|
| Financial liabilities according to the Statement of financial position |
Financial liabilities reported at depreciated value |
Financial liabilities reported at a specifically determined value |
Financial liabilities reported at fair value through profit or loss |
Total | |||
| Leasing | 138 | - | - | 138 | |||
| Bank loans | 2 579 | - | - | 2 579 | |||
| Trade liabilities | 931 | - | - | 931 | |||
| Liabilities for purchase of shares | 665 | - | - | 665 | |||
| Guarantees | 61 | - | - | 61 | |||
| Other liabilities | - | - | - | - | |||
| TOTAL FINANCIAL LIABILITIES | 4 374 | - | - | 4 374 |
In the course of their normal business, the Group companies may be exposed to various financial risks, the most significant of which are: market risk (currency risk, risk of changes in fair value and price risk), credit risk, liquidity risk and interest rate risk. The general financial risk management is focused on forecasting the changes in the financial markets to minimize potential adverse effects on financial performance. Financial risks are currently identified, measured and monitored through various control mechanisms to determine adequate measures and to avoid unjustified exposure to any potential financial risk.
Financial risk management is an ongoing process directly supervised by the management of the Group and financial experts. It is carried in accordance with a policy established by the Board of Directors of the Parent-company, which has developed the basic principles of general financial risk management. On the basis of those principals specific procedures for managing the individual specific financial risks are defined.
The various types of financial risks to which Group companies are exposed in the course of their business operations are described below, as well as the approach taken to mitigate them.
The Group companies carry out their transactions in Bulgaria, some in the European Union and others in third countries (Asia and USA). The biggest portion of supplies made by the Group companies are in Bulgarian lev (BGN), Euro and US dollars. In order to control the currency risk, a system for planning the supplies from countries inside and outside the European Union is used, as well as procedures for periodic monitoring of movements in exchange rates of foreign currencies and control of forthcoming payments.
The tables below summarize the exposure to currency exchange rates:
| In other | ||||
|---|---|---|---|---|
| in EUR | in USD | foreign currency |
In BGN | Total |
| BGN'000 | BGN'000 | BGN'000 | BGN'000 | BGN'000 |
| 9 318 | 9 239 | - | 11 636 | 30 193 |
| 2 054 | - | - | - | 2 054 |
| 13 029 | 175 | 435 | 574 | 14 213 |
| - | - | - | 12 | 12 |
| 24 401 | 9 414 | 435 | 12 222 | 46 472 |
| 152 | 129 | 281 | ||
| 2391 | 82 | - | - | 2 473 |
| 202 | 58 | - | 326 | 586 |
| - | - | - | 625 | 625 |
| - | - | - | 61 | 61 |
| 2 745 | 140 | - | 1 141 | 4 026 |
| in another | |||||
|---|---|---|---|---|---|
| December 31, 2021 | in EUR | in USD | foreign currency |
in BGN | Total |
| Cash and cash equivalents | 6 180 | 11 063 | - | 13 298 | 30 541 |
| Non-current trade receivables | 2 054 | - | - | - | 2 054 |
| Current trade receivables | 10 036 | 1 344 | 419 | 606 | 12 405 |
| Deposits | - | 11 | - | 11 | 22 |
| TOTAL ASSETS | 18 270 | 12 418 | 419 | 13 915 | 45 022 |
| Lease | 18 | - | - | 120 | 138 |
| Bank loans | 2 517 | 62 | - | - | 2 579 |
| Trade payables | 370 | 68 | - | 493 | 931 |
| Liabilities for purchase of shares | - | - | - | 665 | 665 |
| Guarantees | - | - | - | 61 | 61 |
| TOTAL LIABILITIES | 2 905 | 130 | - | 1 339 | 4 374 |
The Group companies are not exposed to foreign currency risk with respect to their euro transactions. Currency risk is associated mainly to payments in US dollars and Norwegian krone (NOK). As of March 31, 2022, 20.3% of the Group's current financial assets are in USD and 0.9% in NOK.
The Group companies are exposed to a specific price risk with respect to the prices of the services provided and goods sold. Minimizing the price risk of negative changes in prices is achieved by periodically analyzing and renegotiating contractual terms in order to update prices in the light of market changes.
Allterco JSCo. owns shares of Link Mobility Group that are traded on a regulated market. During 2021 the Company sold part of its shares and reported profit from the transaction. The remaining shares are exposed to price risk.
There is no significant concentration of interest-bearing assets in the Group companies, except for loans granted and free cash on current accounts with banks. For this reason, the operating cash flows are to a great extend independent of changes in market interest rates.
At the same time, the cash outflows of the Group companies for the reporting period are exposed to interest rate risk due to the use of bank loans in EUR agreed at a variable interest rate.
Cash in current accounts with banks is subject to interest at interest rates according to the tariffs of the respective banks.
The exposure of the Group companies to changes in market interest rates is constantly monitored and analyzed. Different scenarios of refinancing, renewal of existing interest rates and alternative financing are simulated. The calculations cover significant interest-bearing positions.
| March 31, 2022 | interest-free | with floating interest rate % |
with fixed interest rate % |
Total |
|---|---|---|---|---|
| BGN'000 | BGN'000 | BGN'000 | BGN'000 | |
| Cash and cash equivalents | 30 193 | - | - | 30 193 |
| Current trade receivables | 14 213 | - | - | 14 213 |
| Non-current trade receivables | 2 054 | - | - | 2 054 |
| Deposits | 12 | - | - | 12 |
Unified Identification Code (UIC): 201047670 EXPLANATORY NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Unless otherwise stated, all amounts are in BGN thousand.
| TOTAL ASSETS | 46 472 | - | - | 46 472 |
|---|---|---|---|---|
| Lease | - | - | 281 | 281 |
| Bank loans | - | 643 | 1 830 | 2 473 |
| Trade payables | 586 | - | - | 586 |
| Liabilities for purchase of shares | 625 | - | - | 625 |
| Guarantees | 61 | - | - | 61 |
| TOTAL LIABILITIES | 1 272 | 643 | 2 111 | 4 026 |
| December 31, 2021 | interest-free | with floating interest rate % |
with fixed interest rate % |
Total |
|---|---|---|---|---|
| BGN'000 | BGN'000 | BGN'000 | BGN'000 | |
| Cash and cash equivalents | 30 541 | - | - | 30 541 |
| Current trade receivables | 12 405 | - | - | 12 405 |
| Non-current trade receivables | 2 054 | - | - | 2 054 |
| Deposits | 22 | - | - | 22 |
| TOTAL ASSETS | 45 022 | - | - | 45 022 |
| Lease | - | - | 138 | 138 |
| Bank loans | - | 679 | 1 900 | 2 579 |
| Trade payables | 931 | - | - | 931 |
| Liabilities for purchase of shares | 665 | - | - | 665 |
| Guarantees | 61 | - | - | 61 |
| TOTAL LIABILITIES | 1 657 | 679 | 2 038 | 4 374 |
The financial assets of the Group companies are concentrated mainly in two groups - cash (cash on hand and in bank accounts) and receivables from clients.
Credit risk is basically the risk that the customers of the Group companies will not be able to pay the due amounts in full and in the usual terms. Receivables from customers are presented in the consolidated statement of financial position at fair value. An impairment for doubtful and difficult-to-collect receivables has been accrued, based on previous experience with events leading to losses from uncollectability.
The Group companies do not have a significant concentration of credit risk. Their policy is to negotiate a credit period longer than 60 days only with customers that have a long trading history and cooperation with the Group companies. Payments from customers are made by bank transfers.
Significant part of Group's revenue is generated by mobile operators or other client, which in most cases are large companies with very good credit ratings.
The collectability and concentration of trade receivables is monitored on an ongoing basis, in accordance with the established policy of the Group companies. For this purpose, regularly the Finance and Accounting Departments review the open positions by customers and receipts, and make an analysis of outstanding amounts.
As of March 31, 2022 cash and banks transfers are allocated to several banks, which mitigates the risk related to cash and cash equivalents exposure.
Liquidity risk is the risk that the companies face difficulties in meeting their financial obligations. Part of the Group customers are mobile operators or other big companies that have a very good credit rating and meet their payment deadlines.
The Group companies maintain a conservative liquidity management policy aimed at constantly maintaining an optimum cash reserve and the ability to finance their business. They also use some borrowed credit resources.
To control liquidity risk, the Group companies control the timely payment of liabilities in accordance with the agreed payment terms with each client.
The Group companies monitor and control the actual and forecasted cash flows and try to match the maturities of assets and liabilities. On an ongoing basis the maturity and timely payment are monitored by accounting department and daily information on available cash and the obligations for future payments is maintained.
| 31 March 2022 | up to 1 month BGN'000 |
1-3 months BGN'000 |
3-6 months BGN'000 |
6-12 months BGN'000 |
1-2 years BGN'000 |
2-5 years BGN'000 |
over 5 years BGN'000 |
with no maturit y BGN'000 |
total BGN'000 |
|---|---|---|---|---|---|---|---|---|---|
| Cash and cash equivalents |
- | - | - | - | - | - | - | 30 193 | 30 193 |
| Current trade receivables |
10 391 | 698 | 481 | 2 643 | - | - | - | - | 14 213 |
| Non-current trade receivables |
- | - | - | - | 1 027 | 1 027 | - | - | 2 054 |
| Deposits | - | - | - | - | - | - | - | 12 | 12 |
| TOTAL ASSETS | 10 391 | 698 | 481 | 2 643 | 1 027 | 1 027 | - | 30 205 | 46 472 |
| Lease liabilities | 6 | 12 | 18 | 34 | 84 | 127 | - | - | 281 |
| Bank loans | 49 | 110 | 162 | 263 | 556 | 1 057 | 276 | - | 2 473 |
| Trade payables | 459 | 12 | 22 | 93 | - | - | - | - | 586 |
AS OF MARCH 31, 2022
Unless otherwise stated, all amounts are in BGN thousand.
| Liabilities for purchase of shares |
10 | 20 | 30 | 565 | - | - | - | - | 625 |
|---|---|---|---|---|---|---|---|---|---|
| Guarantees | -- | - | - | - | - | - | 61 | 61 | |
| TOTAL LIABILITIES |
524 | 154 | 232 | 955 | 640 | 1184 | 276 | 61 | 4 026 |
| December 31, 2021 | up to 1 month BGN'000 |
1-3 months BGN'000 |
3-6 months BGN'000 |
6-12 months BGN'000 |
1-2 years BGN'000 |
2-5 years BGN'00 0 |
over 5 years BGN'00 0 |
with no maturity BGN'00 0 |
total BGN'000 |
| Cash and cash | |||||||||
| equivalents | 125 | - | - | - | - | - | - | 30 416 | 30 541 |
| Current trade | |||||||||
| receivables | 9 048 | 455 | - | 2 902 | - | - | - | - | 12 405 |
| Non-current trade | |||||||||
| receivables | - | - | - | - | 1 027 | 1 027 | - | - | 2 054 |
| Deposits | - | - | - | - | - | - | - | 22 | 22 |
| TOTAL ASSETS | 9 173 | 455 | - | 2 902 | 1 027 | 1 027 | - | 30 438 | 45 022 |
| Lease liabilities | 3 | 7 | 10 | 38 | 27 | 53 | - | - | 138 |
| Bank loans | 48 | 109 | 158 | 256 | 523 | 1 103 | 382 | - | 2 579 |
| Trade payables | 839 | 17 | 25 | 50 | - | - | - | - | 931 |
| Liabilities for purchase | |||||||||
| of shares | 10 | 20 | 30 | 605 | - | - | - | - | 665 |
| Guarantees | - | - | - | - | - | - | - | 61 | 61 |
| TOTAL | |||||||||
| LIABILITIES | 900 | 153 | 223 | 949 | 550 | 1 156 | 382 | 61 | 4 374 |
With the capital management the Parent Company aims to create and maintain the ability for continuous operations (going concern company) and to ensure the appropriate return on investment to shareholders, as well as to maintain optimal capital structure in order to reduce capital costs.
Allterco JSCo monitors its capital structure using the debt ratio. It is calculated as the ratio between the net debt capital and the total amount of capital. Net debt is defined as the difference between all borrowings (current and non-current) as stated in the consolidated statement of financial position and cash and cash equivalents. The total amount of capital is equal to the equity and the net debt capital.
The table below presents the debt ratios based on the capital structure as of:
| March 31, 2022 |
December 31, 2021 | |
|---|---|---|
| Total debt capital, incl.: | 6 324 | 6 833 |
| - Bank loans |
2 473 | 2 579 |
| - Lease liabilities |
281 | 138 |
| Reduced by cash and cash equivalents | 30 193 | 30 541 |
| Net debt capital | (23 869) | (23 708) |
EXPLANATORY NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Unless otherwise stated, all amounts are in BGN thousand.
| 69 322 | 65 540 |
|---|---|
| 45 453 | 41 832 |
| 0.00% | 0.00% |
The Group is not in debt for the reporting periods, as cash exceeds the total debt capital.
Usually, external independent appraisers are used for the assessment of fair value of significant assets. The need of external appraisers is assessed annually by the management of the Company. External appraisers are chosen based on their professional experience, qualities and reputation.
The Group's policy is to disclose in its financial statements the fair value of financial assets and liabilities for which information about market prices is available.
For the purpose of fair value disclosure, the Company determines different classes of assets and liabilities, depending on their nature, characteristics and risk, and on the relevant level in the fair value hierarchy set out in Significant Accounting Policies.
The Company's management has estimated that the fair values of cash and cash equivalents, trade receivables, trade payables, finance lease and bank loans are close to their book values due to the shortterm nature of these instruments and their timely payment over time.
The table below shows the book value and fair value of financial assets and liabilities, including their levels in the value hierarchy. Fair value information is not presented if the book value is considered reasonably equal to the fair value.
| Book value | Level 1 | Level 2 | Level 3 | |
|---|---|---|---|---|
| March 31, 2022 | ||||
| Financial assets | ||||
| Other long term financial investments | 2 419 | 2 419 | - | - |
| Cash and cash equivalents | 30 193 | - | - | - |
| Trade receivables | 14 213 | - | - | - |
| Long-term trade receivables | 2 054 | - | - | - |
| Deposits in companies and guarantees | 12 | - | - | |
| TOTAL ASSETS | 48 891 | 2 419 | - | - |
| Financial liabilities | ||||
| Lease | 281 | - | - | - |
| Bank loans | 2 473 | - | 2 473 | - |
AS OF MARCH 31, 2022
Unless otherwise stated, all amounts are in BGN thousand.
| - - |
|---|
| - - |
| - - |
| December 31, 2021 | Book value | Level 1 | Level 2 | Level 3 |
|---|---|---|---|---|
| Financial assets | ||||
| Cash and cash equivalents | 30 541 | - | - | - |
| Current trade receivables | 12 405 | - | - | - |
| Other long term financial investments | 2 624 | 2 624 | - | - |
| Non-current trade receivables | 2 054 | - | - | - |
| Deposits | 22 | - | - | - |
| TOTAL ASSETS | 47 646 | 2 624 | - | - |
| Financial liabilities | ||||
| Lease | 138 | - | - | |
| Bank loans | 2 579 | - | 2 545 | - |
| Trade payables | 931 | - | - | - |
| Liabilities for purchase of shares | 665 | - | - | - |
| Guarantees | 61 | - | - | - |
| Other liabilities | 0 | - | - | - |
| TOTAL LIABILITIES | 4 374 | - | 2 545 | - |
No transfers have been made during the reporting period.
The following important events occurred after the end of the reporting period:
The Company has announced to the FSC and to the Public the following information:
We hereby inform you that at its extraordinary session held on 08.04.2022, the General Meeting of Shareholders of Allterco JSCo adopted the following resolutions:
The General Meeting of the Shareholders increased the number of the members of the Board of Directors from 3 to 5, where the General Meeting of the Shareholders confirms the current members of the Board of Directors and appoints, in addition, the following new members: Mr. Wolfgang Kirsch and Mr. Gregor Bieler
The General Meeting of Shareholders approved amendments to the Remuneration Policy
The General Meeting of Shareholders approved amendments and supplements to the Statute of the Company
The General Meeting of Shareholders approved the remuneration, the management guarantee and the compensation of the new Board Members
The General Meeting of the Shareholders approved the terms and conditions for buyback of up to 80,000 own shares until 31 December 2022 at price in the rage from BGN 15 to BGN 30 per share. The buyback can be done at once or in part in one or several buyback procedures (until the maximum number of shares is reached) by the Company and/or any of its subsidiaries through an investment intermediary from any shareholder through stock exchange and/or OTC transactions. The Board of Directors is authorized to undertake all other specific parameters of the buyback and to take all necessary legal and factual actions in execution of this resolution of the General Meeting of Shareholders
In compliance with the decision of the General Meeting of the Shareholders and the Statute of the Company, the Board of Directors has appointed Mr. Wolfgang Kirsch and Mr. Dimitar Dimitrov as Chief Executive Officers of the Allterco JSCo in a later meeting held the same day (8 April 2022). In compliance with the decisions taken by the general meeting of shareholders, during the first meeting of the new Board of Directors, carried on April 8, 2022, the following appointments were made:
The representative members of the Board of Directors represent the company jointly or separately. For further information, please visit ww.allterco.com
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