Asbis Enterprises PLC — Annual Report 2020

Mar 31, 2021

REPORT AND CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020

REPORT AND CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020

CONTENTS PAGE

Officers and professional advisers	1
Declaration by the members of the Board of Directors and the Company officials responsible for the drafting of the consolidated and separate financial statements	2
Management report	3 – 5
Independent Auditors' report	6 – 12
Consolidated income statement	13
Consolidated statement of comprehensive income	14
Consolidated statement of financial position	15
Consolidated statement of changes in equity	16
Consolidated statement of cash flows	17
Parent Company statement of comprehensive income	18
Parent Company statement of financial position	19
Parent Company statement of changes in equity	20
Parent Company statement of cash flows	21
Notes to the financial statements	22 – 74

OFFICERS AND PROFESSIONAL ADVISERS

Board of Directors	Siarhei Kostevitch (Cypriot) Chairman and Chief Executive Officer
	Marios Christou (Cypriot) Chief Financial Officer
	Constantinos Tziamalis (Cypriot)
	Yuri Ulasovich (Cypriot)
	Demos Demou (Cypriot) Non-Executive Director
	Tasos A.Panteli (Cypriot) Non-Executive Director
	Maria Petridou (Cypriot) (appointed on 29 March 2021) Non-Executive Director
Secretary	Alfo Secretarial Limited Limassol, Cyprus
Registered office	Kolonakiou 43, Diamond Court Ayios Athanasios, 4103, Limassol, Cyprus
Independent auditors	KPMG Limited Limassol, Cyprus
Legal adviser	Costas Tsirides & Co. Law Office Limassol, Cyprus
Bankers	Alfa Bank JSC SB
	Tatrabanka a.s.
	Všeobecná Uverová Banka a.s.
	Sberbank
	Zenit Bank
	Barclays Bank Plc
	Bank of Cyprus Public Company Ltd
	Deutsche Bank
	Global Supply Chain Finance Ltd
	Fimbank Plc
	Joint-stock Company OTP Bank
	National Bank of Fujairah
	First Ukrainian International bank
	Société Générale Bank - Cyprus Limited
	CJSC VTB Bank
	CSOB Bank
	Mashereqbank Pcs
	Alpha Bank Romania S.A.
	National Bank of Greece (Cyprus) Ltd
	Unicredit Bulbank AD
	Erste Bank
	Tascombank Jsc, Bank Dabrabyt JSC
	OP Corporate Bank Plc Latvia Branch

DECLARATION BY THE MEMBERS OF THE BOARD OF DIRECTORS AND THE COMPANY OFFICIALS RESPONSIBLE FOR THE DRAFTING OF THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS

(In accordance with the provisions of Law 190(I)/2007 on Transparency Requirements)

In accordance with Article 9, sections (3c) and (7), of the Transparency Requirements (Traded Securities in a Regulated Market) Law 190(I)/2007, as amended from time to time (the "Law"), we, the members of the Board of Directors and the Financial Controller responsible for the drafting of the consolidated financial statements of Asbisc Enterprises Plc (the "Company") and its subsidiaries (the "Group") and the Company's separate financial statements for the year ended 31 December 2020, confirm to the best of our knowledge that:

a) the consolidated financial statements of the Group and the Company's separate financial statements for the year ended 31 December 2020 which are presented on pages 13 to 74:

• (i) have been prepared in accordance with the International Financial Reporting Standards as adopted by the European Union and the provisions of subsection (4) of Article 9 of the Law, and
• (ii) give a true and fair view of the assets, liabilities, financial position and profit or loss of the Group and the Company, and

b) the management report provides a fair review of the development and performance of the business and the position of the Group and the Company, together with a description of the principal risks and uncertainties that they face.

Members of the Board of Directors

Siarhei Kostevitch Chairman and Chief Executive Officer	………………………………………………………
Marios Christou Executive Director	………………………………………………………
Constantinos Tziamalis Executive Director	………………………………………………………
Yuri Ulasovich Executive Director	………………………………………………………
Demos Demou Non-Executive Director	………………………………………………………
Tasos A.Panteli Non-Executive Director	………………………………………………………
Maria Petridou Non-Executive Director	………………………………………………………
Financial Controller
Loizos Papavassiliou	………………………………………………………

Limassol, 30 March 2021

MANAGEMENT REPORT FOR THE YEAR ENDED 31 DECEMBER 2020

The Directors present their annual report on the affairs of Asbisc Enterprises Plc (the "Company" or the "parent Company") and its subsidiaries (together with the Company, the "Group") together with the Group's and the Company's audited financial statements for the year ended 31 December 2020.

Principal activity

The principal activity of the Group and the Company continues to be the worldwide trading and distribution of computer hardware and software.

Group financial statements

The consolidated financial statements include the financial statements of the Company and those of its subsidiary companies. The names and more details about the subsidiaries are shown in note 10 to the financial statements.

Review of the development, financial performance and current position of the Group and the Company and the description of its major risks and uncertainties

The Group's and the Company's development to date, financial results and position are presented in the financial statements on pages 13 to 74.

The key performance and financial position figures are as follows: (in thousands of US\$)

	The Group		The Company
	2020 US\$	2019 US\$	2020 US\$	2019 US\$
Revenue	2,366,441	1,914,881	1,896,200	1,449,084
Gross profit	138,285	104,146	42,915	25,405
Profit before tax	44,667	18,965	44,152	5,806
Taxation	(8,152)	(3,725)	(4,318)	(998)
Profit for the year	36,515	15,240	39,834	4,808
Earnings per share (US\$ cents)	66.15	27.54	N/A	N/A
Total equity	135,638	108,195	91,691	61,577
Average number of employees
during the year	1,837	1,594	150	136

In the year ended December 31, 2020 we have continued our strong growth trend observed in the previous year. Following our strategy to focus more on profitability rather than on revenues, we have enjoyed a significant growth in gross and net margins. We have managed to outperform the markets and competition and strengthen our market position. Profitability has exceeded our expectations and cash flow has significantly improved.

The Group and the Company face the following major risks and uncertainties:

• competitive pressures in the marketplace it operates that may significantly affect gross and net margins
• national and international economic and geopolitical factors
• technological changes and other market trends
• financial and other risks as described in notes 32 and 33.

The Group has systems and procedures in place to maintain its expertise and keep it aware of changes in its marketplace to help mitigate market risks. It also has rigorous controls to help mitigate financial and other risks. These are described in note 32 to the financial statements.

Significant events after the end of the financial year

There are no significant events after the reporting date that require disclosure in or adjustment to the financial statements.

Existence of branches

The Company also operates through a warehouse in the Czech Republic.

Expected future developments of the Group and the Company

The Directors do not expect any significant changes in the activities of the Group and the Company for the foreseeable future.

MANAGEMENT REPORT (continued)

Employees

During 2020 we have employed an average number of 1,837 employees, of whom 150 were employed by the Company and the remainder in the rest of the Group' s offices worldwide. The split of employees by area of activity is as follows:

	As at 31 December
	2020	2019
Sales and Marketing	954	832
Administration and IT	343	285
Finance	179	164
Logistics	361	313
Total	1,837	1,594

Research and Development

In 2020, the Group spent US\$ 1,030,798 (2019: US\$ 1,342,018) on Research and Development, focusing on development of tablets, small home appliances and other product lines that are sold under the Prestigio, Canyon and Perenio own brands in all regions of the Company's operations. The Group will continue to have research and development expenditures to support the design and development of own brand products in order to maintain and enhance its competitive position.

Dividends

Our dividend policy is to pay dividends at levels consistent with our growth and development plans, while maintaining a reasonable level of liquidity. During the year, the following dividends were declared and paid by the Company:

• A final dividend of US\$ 4,162,500 of US\$ 0.075 per share for the year 2019
• An interim dividend of US\$5,550,000 of US\$ 0.10 per share for the year 2020

The Board of Directors also proposes the payment of a final dividend of US\$ 0.20 per share for the year 2020, amounting to US\$ 11,100,000 based on improved 2020 profitability.

Share Capital

On 31 December 2020 the issued and fully paid up share capital of the Company consisted of 55,500,000 ordinary shares of US\$ 0.20 each. There were no changes in the share capital of the Company during the year and up to the date of these financial statements.

Board of Directors

The members of the Board of Directors at 31 December 2020 and at the date of this report are set out on page 1. They were all members of the Board of Directors throughout the year except Maria Petridou, who was appointed on March 29th 2021 as a Non-Executive Director of the Company. There were no significant changes in the assignment of the responsibilities of the members of the Board of Directors. The remuneration of the members of the Board of Directors is disclosed in notes 5 and 28 to the financial statements.

In accordance with the Company's Articles of Association, Mr. Yuri Ulasovich and Mr. Tasos A.Panteli who are subject to retirement by rotation, retire at the next annual general meeting of the Company and, being eligible, offer themselves for re-election. 

Corporate Governance

The Directors of the Company recognize the importance of corporate governance policies, practices and procedures. Being listed on the Warsaw Stock Exchange in Poland, the Company follows the provisions of Corporate Governance of the Warsaw Stock Exchange Code of Best Practices, to the extent practicable and appropriate for a public company of the size of the Company. Those rules, information on their application and any deviation can be found on the Company's internet site for investors at http://investor.asbis.com and http://inwestor.asbis.pl.

The Board of the Company has two committees:

• the Audit Committee and
• the Remuneration Committee

The Remuneration Committee consists of the three non-executive Directors together with the Chairman. The Audit Committee consists of the three non-executive Directors. More information on the composition and functions of the committees is given in the corporate governance statement.

MANAGEMENT REPORT (continued)

Main shareholders

The following table presents shareholders possessing directly or indirectly more than 5% of the Company's shares and shares held by the Company under the share buyback program as at 31 December 2020:

Name	Number of votes/shares	Votes/share capital %
Siarhei Kostevitch and KS Holdings Ltd	20,443,127	36.83
Asbisc Enterprises Plc (share buyback program)	325,389	0.59
Free float	34,731,484	62,58
	55,500,000	100.00

Following an extraordinary general meeting of the shareholders on the 15th of July 2019, a share buyback program with the following conditions was approved:

• the maximum amount of money that can be used to realize the program is US\$ 300,000
• the maximum number of shares that can be bought within the program is 500,000 shares
• the program's time frame is 12 months from the resolution's date
• the shares purchased within the program could be held for a maximum of two years from acquisition
• the minimum price for transaction of purchase of shares within the program is PLN 1.5 per share with the maximum price of PLN 3.0 per share

At the end of 2020 the Company held a total of 325,389 (2019: 274,389) shares purchased under the buyback program.

Auditors

The auditors of the Company, Messrs KPMG Limited, have expressed their willingness to continue in office and a resolution authorizing the Board of Directors to fix their remuneration will be submitted at the forthcoming annual general meeting.

BY ORDER OF THE BOARD OF DIRECTORS

Director

…………………….

Limassol, 30 March 2021

INDEPENDENT AUDITORS' REPORT TO

THE MEMBERS OF

ASBIS ENTERPRISES PLC

Report on the audit of the consolidated and separate financial statements

Opinion

We have audited the accompanying consolidated and separate financial statements of Asbisc Enterprises PLC (the ''Company'') and its subsidiaries (the ''Group''), which are presented on pages 13 to 74 and comprise the consolidated and separate statement of financial position of the Company as at 31 December 2020 and the consolidated and separate statements of profit or loss and other comprehensive income, changes in equity and cash flows for the year then ended, and notes to the consolidated and separate financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying consolidated financial statements and the separate financial statements give a true and fair view of the financial position of the Group and the Company, as at 31 December 2020, and of their financial performance and cash flows for the year then ended in accordance with International Financial Reporting Standards as adopted by the European Union (''IFRS-EU'') and the requirements of the Cyprus Companies Law, Cap. 113, as amended from time to time (the ''Companies Law, Cap.113'').

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (''ISAs''). Our responsibilities under those standards are further described in the ''Auditors' responsibilities for the audit of the consolidated and separate financial statements''' section of our report. We remained independent of the Group and the Company throughout the period of our appointment in accordance with the International Code of Ethics (Including International Independence Standards) for Professional Accountants of the International Ethics Standards Board for Accountants (''IESBA Code'') together with the ethical requirements in Cyprus that are relevant to our audit of the consolidated and separate financial statements, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the IESBA Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key audit matters incorporating the most significant risks of material misstatements, including assessed risk of material misstatements due to fraud

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated and separate financial statements of the current period. These matters were addressed in the context of our audit of the consolidated and separate financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Key audit matter 1 - Investments in subsidiaries: impairment assessment
Refer to Notes 2 and 10 to the financial statements
The key audit matter	How the matter was addressed in our audit
Significant judgement is required by the management of the Company in determining whether there are any indications for impairment and, where such indications exist, in assessing the recoverable amount of the investments. We focused on this area because of the significance of the carrying amount of the investments in the separate financial statements and because inherent uncertainty and subjectivity is involved the assessment of the recoverable amount.	Our audit procedures included, among others, testing of the principles and integrity of the Company's valuation model, including evaluating the methodology and assumptions used by the Company and comparing the Company's assumptions to our own assessments in relation to key inputs. KPMG Valuation specialists were involved in review of the model and recalculation of WACC.
Key audit matter 2 - Valuation of inventory
Refer to Notes 2 and 13 to the financial statements
The key audit matter	How the matter was addressed in our audit
There is an increased need to hold inventory to serve as a buffer in anticipation of customer needs. Given that the IT industry is characterized by rapid changes in technology and short product shelf lives, inventory may rapidly become obsolete. Significant judgment is required in determining the appropriate carrying amount of inventories.	Our audit procedures included among other: - understanding and evaluating the process applied by the Company and the Group in the determination of the impairment provision. testing the accuracy of the inventory - ageing report and assessing the ageing of inventory, inventory levels and selling prices by reference to post year-end sales and price lists for a sample of inventory items and by comparing year on year key indicators, including stock turnover and gross profit margins.

Key audit matter 3 - Valuation of trade receivables
Refer to Notes 2 and 14 to the financial statements
The key audit matter	How the matter was addressed in our audit
The Company and the Group have significant trade receivables as at the year end. Due to the market developments following the credit crisis that affected all countries the Group operates in, credit risk is an important factor that might impact results. Despite the fact that a large portion of these is credit insured, credit insurance companies are becoming more risk averse in granting credit limits to customers. Given the size of trade receivables and the risk that some of them may not be recoverable, significant judgment is required to estimate the level of the allowance required to reflect the risk. In addition, application of requirements of IFRS 9 "Financial Instruments" could increase the risk of misstatement as it is a complex accounting standard which requires considerable judgments to be made. Specifically, a model has been developed by management to calculate expected credit losses by applying judgement in a number of significant areas.	Our audit procedures included among other: - understanding and evaluating the process applied by the Company and the Group in the determination of the impairment provision; - testing accuracy and completeness of the trade receivables ageing report; - discussing with the responsible credit officers and the responsible Company director the recoverability and the procedures followed for the collection of significant overdue balances; - assessing on sample basis the recoverability of overdue amounts by reference to subsequent receipts from customers or, where there were no subsequent receipts, to sales and payment track records, we inspected relevant correspondence with customers and legal advisors, as applicable, and inspected insurance documents for the insured customers; - evaluating the reasonableness of management's key judgements made in applying IFRS 9 on the calculation of expected credit losses, including the selection of method, model, assumptions and data sources. We tested the mathematical accuracy of the model and assessed the completeness, accuracy and relevance of the data and assessed whether the related financial statements disclosure was in line with the requirements of IFRS 9. Reviewing disclosures to the financial - statements to ensure compliance with requirements of relevant IFRS.

Other information

The Board of Directors is responsible for the other information. The other information comprises the Directors' report on the Group operations part I and part II (pages 4-61); and information included in the Management Report but does not include the consolidated and separate financial statements and our auditors' report thereon.

Our opinion on the consolidated and the separate financial statements does not cover the other information and we do not express any form of assurance conclusion thereon, except as required by the Companies Law, Cap.113.

In connection with our audit of the consolidated and separate financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the consolidated and separate financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

With regards to the Directors report on the Group operations part I and part II we have nothings to report.

With regards to the Management Report, our report in this regard is presented in the ''Report on other legal and regulatory requirements'' section.

Responsibilities of the Board of Directors and those charged with governance for the consolidated and separate financial statements

The Board of Directors is responsible for the preparation of consolidated and separate financial statements that give a true and fair view in accordance with IFRS-EU and the requirements of the Companies Law, Cap. 113, and for such internal control as the Board of Directors determines is necessary to enable the preparation of consolidated and separate financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated and separate financial statements, the Board of Directors is responsible for assessing the Group's and the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting, unless there is an intention to either liquidate the Company or to cease the Group's operations, or there is no realistic alternative but to do so.

The Board of Directors and those charged with governance are responsible for overseeing the Group's and the Company's financial reporting process.

Auditors' responsibilities for the audit of the consolidated and separate financial statements

Our objectives are to obtain reasonable assurance about whether the consolidated and the separate financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors' report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated and the separate financialstatements.

As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the consolidated and the separate financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group's and the Company's internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Board of Directors.
• Conclude on the appropriateness of the Board of Directors' use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group's and the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors' report to the related disclosures in the consolidated and the separate financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors' report. However, future events or conditions may cause the Group and the Company to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the consolidated and the separate financial statements, including the disclosures, and whether the consolidated and the separate financial statements represent the underlying transactions and events in a manner that achieves a true and fair view.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities of the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the Group audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

Auditors' responsibilities for the audit of the consolidated and separate financial statements (continued)

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated and separate financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditors' report.

Report on other regulatory and legal requirements

Other regulatory requirements

Pursuant to the requirements of Article 10(2) of European Union (EU) Regulation 537/2014 we provide the following information in our Independent Auditors' Report, which is required in addition to the requirements of ISAs.

Date of appointment and period of engagement

We were appointed auditors in June 2012 by the General Meeting of the Company's members to audit the consolidated and the separate financial statements of the Group and the Company, respectively, for the year ended 31 December 2012. Our total uninterrupted period of engagement, having been renewed annually, is 9 years covering the periods ending 30 June 2012 to 31 December 2020.

Consistency of auditors' report to the additional report to the Audit Committee

We confirm that our audit opinion on the consolidated and separate financial statements expressed in this report is consistent with the additional report presented to the Audit Committee of the Company, which is dated 30 March 2021.

Provision of Non-audit Services ('NAS')

We have not provided any prohibited NAS referred to in Article 5 of EU Regulation 537/2014 as applied by Section 72 of the Auditors Law of 2017, L.53(I)2017, as amended from time to time (''Law L53(I)/2017''). In addition, there are no non-audit services which were provided by us to the Company and the Group and which have not been disclosed in the consolidated and the separate financial statements.

Other legal requirements

Pursuant to the additional requirements of law L.53(Ι)/2017, and based on the work undertaken in the course of our audit, we report the following:

• In our opinion, the management report, the preparation of which is the responsibility of the Board of Directors, has been prepared in accordance with the requirements of the Companies Law, Cap 113, and the information given is consistent with the consolidated and separate financial statements.
• In the light of the knowledge and understanding of the business and the Group's and the Company's environment obtained in the course of the audit, we have not identified material misstatements in the management report.
• In our opinion, based on the work undertaken in the course of our audit, the information included in the corporate governance statement in accordance with the requirements of subparagraphs (iv) and (v) of paragraph 2(a) of Article 151 of the Companies Law, Cap. 113, and which is also published in full on the Company's website, have been prepared in accordance with the requirements of the Companies Law, Cap, 113, and is consistent with the consolidated and separate financial statements.
• In light of the knowledge and understanding of the Group's and the Company's environment obtained in the course of the audit, we are required to report if we have identified material misstatements in the corporate governance statement in relation to the information disclosed for items (iv) and (v) of the subparagraph 2(a) of Article 151 of the Companies Law, Cap. 113. We have not identified material misstatements in this respect.
• In our opinion, based on the work undertaken in the course of our audit, the corporate governance statement includes all information referred to in subparagraphs (i), (ii), (iii), (vi) and (vii) of paragraph 2(a) of Article 151 of the Companies Law, Cap.113

Other Matter

This report, including the opinion, has been prepared for and only for the Company's members as a body in accordance with Article 10(1) of the EU Regulation 537/2014 and Section 69 of Law L.53(Ι)/2017 and for no other purpose. We do not, in giving this opinion, accept or assume responsibility for any other purpose or to any other person to whose knowledge this report may come to.

The engagement partner on the audit resulting in this independent auditors' report is John Nicolaou.

Certified Public Accountant and Registered Auditor for and on behalf of

KPMG Limited Certified Public Accountants and Registered Auditors KPMG Center, No.11, 16th June 1943 Street, 3022 Limassol, Cyprus

Limassol, 30 March 2021

CONSOLIDATED INCOME STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2020

(in thousands of US\$)

	Note	2020 US\$	2019 US\$
Revenue Cost of sales	3	2,366,441 (2,228,156)	1,914,881 (1,810,735)
Gross profit Selling expenses Administrative expenses		138,285 (48,541) (33,071)	104,146 (42,913) (28,147)
Profit from operations		56,673	33,086
Financial income Financial expenses Net finance costs	6 6	4,319 (16,708) (12,389)	3,488 (17,662) (14,174)
Other gains and losses Share of profit/(loss) of equity-accounted investees Negative goodwill on acquisition of subsidiary	4 11	377 6 -	(33) (25) 111
Profit before tax Taxation	5 7	44,667 (8,152)	18,965 (3,725)
Profit for the year		36,515	15,240
Attributable to: Equity holders of the parent Non-controlling interests		36,517 (2)	15,257 (17)
		36,515	15,240
		US\$ cents	US\$ cents
			27.54
Earnings per share Basic and diluted from continuing operations	30	66.15

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31 DECEMBER 2020

(in thousands of US\$)

	2020 US\$	2019 US\$
Profit for the year	36,515	15,240
Other comprehensive income/(loss): Exchange difference on the translation of foreign operations Reclassification adjustments relating to foreign operations liquidated and	629	(38)
disposed of in the year	-	10
Other comprehensive income/(loss) for the year	629	(28)
Total comprehensive income	37,144	15,212
Attributable to:
Equity holders of the parent	37,122	15,234
Non-controlling interests	22	(22)
	37,144	15,212

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 31 DECEMBER 2020

(in thousands of US\$)

		2020	2019
ASSETS	Notes	US\$	US\$
Non-current assets
Property, plant and equipment	8	32,728	29,680
Intangible assets	9	2,418	2,593
Equity-accounted investees	11	827	227
Goodwill	31	629	591
Deferred tax assets	21	466	227
Total non-current assets		37,068	33,318
Current assets
Inventories	13	277,557	266,039
Trade receivables	14	295,846	212,168
Other current assets	15	19,140	16,035
Derivative financial assets	26	199	945
Current taxation Cash at bank and in hand	7 27	204 158,898	595 103,687
Total current assets		751,844	599,469
Total assets		788,912	632,787
EQUITY AND LIABILITIES
Equity
Share capital	16	11,100	11,100
Share premium		23,518	23,518
Retained earnings and other components of equity		100,725	73,323
Equity attributable to owners of the parent		135,343	107,941
Non-controlling interests		295	254
Total equity		135,638	108,195
Non-current liabilities
Long-term borrowings	18	5,729	3,338
Other long-term liabilities Deferred tax liabilities	19 21	732 306	635 511
Total non-current liabilities		6,767	4,484
Current liabilities
Trade payables and prepayments	23	336,010	321,277
Trade payables factoring facilities	12	51,403	29,106
Other current liabilities Short-term borrowings	22 17	92,369 160,962	59,036 107,173
Derivative financial liabilities	25	883	2,082
Current taxation	7	4,880	1,434
Total current liabilities		646,507	520,108
Total liabilities		653,274	524,592
Total equity and liabilities		788,912	632,787

Signed on behalf of the Board of Directors on 30 March 2021.

.................................... .................................... Siarhei Kostevitch Marios Christou Director Director

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2020

(in thousands of US\$)	Attributable to equity holders of the parent Translation
	Share capital US\$	Share premium US\$	Treasury stock US\$	of foreign operations US\$	Retained earnings US\$	Total US\$	Non-controlling interests US\$	Total US\$
Balance at 1 January 2019	11,100	23,518	(14)	(11,334)	75,688	98,958	276	99,234
Total comprehensive income Profit/(loss) for the year Other comprehensive loss for the year Transactions with owners of the Company	- -	- -	- -	- (23)	15,257 -	15,257 (23)	(17) (5)	15,240 (28)
Contributions and distributions Final dividend declared (Note 34) Acquisition of treasury shares	- -	- -	- (162)	- -	(6,089) -	(6,089) (162)	- -	(6,089) (162)
Balance at 31 December 2019	11,100	23,518	(176)	(11,357)	84,856	107,941	254	108,195
Total comprehensive income Profit for the year Other comprehensive income for the year with owners of the Transactions Company	- -	- -	- -	- 605	36,517 -	36,517 605	(2) 24	36,515 629
Changes in ownership interests Minority interest on establishment of new subsidiary Contributions and distributions	-	-	-	-	-	-	19	19
Final dividend declared (Note 34) Acquisition of treasury shares	- -	- -	- (36)	- -	(9,684) -	(9,684) (36)	- -	(9,684) (36)
Balance at 31 December 2020	11,100	23,518	(212)	(10,752)	111,689	135,343	295	135,638

The retained earnings shown above at 31 December 2020 were readily distributable up to the amount of US\$ 57,285 which represents the retained earnings of the Company. The remaining amount in retained earnings of US\$ 54,404 represents the earnings retained in the subsidiary companies of the Group. Share premium represents the difference between the issue price of the shares of the Company and their nominal value. The share premium can only be resorted to for limited purposes, which do not include the distribution of dividends, and is otherwise subject to the provisions of the Cyprus Companies Law, Cap. 113 on reduction of share capital. The translation reserve comprises all foreign currency differences from the translation of the financial statements of foreign operations. Treasury stock represents the remaining balance of own shares bought back (note 16).

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 31 DECEMBER 2020

(in thousands of US\$)	Note	2020 US\$	2019 US\$
Profit for the year before tax		44,667	18,965
Adjustments for:
Exchange difference arising on consolidation Depreciation of property, plant and equipment	8	205 3,388	(850) 2,998
Amortization of intangible assets	9	999	1,033
Impairment loss on intangible assets	4	39	315
Provision for slow moving and obsolete stock	13	1,410	554
Share of loss of equity-accounted investees	11	(6)	25
Loss/(profit) from the sale of property, plant and equipment and intangible
assets	4	(24)	96
Provision for bad debts and receivables written off	14	477	(1,835)
Bad debts recovered	4	(24)	(80)
Impairment of investments in associates Interest received	6	- (231)	152 (249)
Interest paid		4,308	4,643
Operating profit before working capital changes		55,208	25,767
Increase in inventories		(12,926)	(86,383)
Increase in trade receivables		(84,131)	(35,675)
(Increase)/decrease in other current assets		(2,359)	967
Increase in trade payables and prepayments Increase/(decrease) in trade payables factoring facilities		14,734 22,297	113,132 (998)
Increase in other current liabilities		32,095	14,076
Increase in other non-current liabilities		97	57
Increase in factoring creditors		25,858	7,054
Cash inflows from operations		50,873	37,997
Interest paid	6	(3,948)	(4,643)
Taxation paid, net	7	(4,750)	(3,863)
Net cash inflows from operating activities		42,175	29,491
Cash flows from investing activities
Purchase of intangible assets	9	(808)	(515)
Purchase of property, plant and equipment		(3,608)	(2,355)
Proceeds from sale of property, plant and equipment and intangible assets		24	26
Payment for purchase of investments in subsidiaries		(594)	(1,045)
Interest received	6	231	249
Net cash outflows from investing activities		(4,755)	(3,640)
Cash flows from financing activities
Acquisition of treasury shares		(36)	(162)
Payment of final dividend		(9,684)	(6,089)
Proceeds of long-term loans and long-term obligations under finance lease		194	332
Proceeds of short-term borrowings and short-term obligations under
finance lease		7,483	266
Net cash outflows from financing activities		(2,043)	(5,653)
Net increase in cash and cash equivalents		35,377	20,198
Cash and cash equivalents at the beginning of the year		78,306	58,109
Cash and cash equivalents at the end of the year	27	113,683	78,307

PARENT COMPANY STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2020

(in thousands of US\$)

	Note	2020 US\$	2019 US\$
Revenue	3	1,896,200	1,449,084
Cost of sales		(1,853,285)	(1,423,679)
Gross profit		42,915	25,405
Selling expenses		(5,610)	(5,259)
Administrative expenses		(12,728)	(10,109)
Profit from operations		24,577	10,037
Financial income Financial expenses Net finance costs	6 6	2,404 (4,737) (2,333)	2,623 (7,647) (5,024)
Other gains and losses	4	21,908	733
Negative goodwill and goodwill written off, net		-	60
Profit before tax	5	44,152	5,806
Taxation	7	(4,318)	(998)
Profit for the year		39,834	4,808
Other comprehensive income for the year		-	-
Total comprehensive income for the year		39,834	4,808

PARENT COMPANY STATEMENT OF FINANCIAL POSITION

AS AT 31 DECEMBER 2020

(in thousands of US\$)

	Notes	2020 US\$	2019 US\$
ASSETS
Non-current assets
Property, plant and equipment	8	6,689	6,647
Intangible assets	9	1,872	2,159
Investment in subsidiary companies Equity-accounted investees	10	16,446 821	15,864 227
Total non-current assets		25,828	24,897
Current assets
Inventories	13	112,045	153,827
Trade receivables	14	46,486	46,041
Other current assets	15	183,096	112,028
Derivative financial assets	26	164	915
Cash at bank and in hand	27	118,065	73,346
Total current assets		459,856	386,157
Total assets		485,684	411,054
EQUITY AND LIABILITIES Equity
Share capital	16	11,100	11,100
Share premium		23,518	23,518
Retained earnings and other components of equity		57,073	26,959
Total equity		91,691	61,577
Non-current liabilities
Long-term borrowings	18	887	1,079
Deferred tax liabilities	21	232	240
Total non-current liabilities		1,119	1,319
Current liabilities
Trade payables and prepayments	23	269,991	256,028
Trade payables factoring facilities	12	51,403	29,106
Other current liabilities	22	52,546	50,719
Short-term borrowings	17	15,057	9,911
Derivative financial liability	25	613	1,977
Current taxation	7	3,264	417
Total current liabilities		392,874	348,158
Total liabilities		393,993	349,477
Total equity and liabilities		485,684	411,054

The financial statements were approved by the Board on 30 March 2021.

Siarhei Kostevitch Marios Christou Director Director

.................................... ....................................

PARENT COMPANY STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2020

(in thousands of US\$)

	Share capital US\$	Share premium US\$	Treasury stock US\$	Retained earnings US\$	Total US\$
Balance at 1 January 2019	11,100	23,518	(14)	28,389	62,993
Total comprehensive income Profit for the year Transfer of profit on disposal of equity-accounted investees through	-	-	-	4,809	4,809
other comprehensive income to retained earnings Transactions with owners of the Company				25	25
Contributions and distributions
Final dividend declared (Note 34) Acquisition of treasury shares	- -	- -	- (162)	(6,089) -	(6,089) (162)
Balance at 31 December 2019	11,100	23,518	(176)	27,134	61,576
Total comprehensive income Profit for the year Transactions with owners of the Company	-	-	-	39,835	39,835
Contributions and distributions Final dividend declared (Note 34) Acquisition of treasury shares	- -	- -	- (36)	(9,684) -	(9,684) (36)
Balance at 31 December 2020	11,100	23,518	(212)	57,285	91,691

The retained earnings shown above at 31 December 2020 were readily distributable up to the amount of US\$ 57,285 which represents the retained earnings of the Company. Share premium represents the difference between the issue price of the shares and their nominal value. The share premium can only be resorted to for limited purposes, which do not include the distribution of dividends, and is otherwise subject to the provisions of the Cyprus Companies Law, Cap. 113 on reduction of share capital.

Companies which do not distribute 70% of their profits after tax, as defined by the relevant Cyprus tax law, within two years after the end of the relevant tax year, will be deemed to have distributed as dividends 70% of these profits. Special contribution for defense at 17% is payable on such deemed dividends to the extent that the ultimate shareholders (physical persons) are Cyprus domiciled tax residents. The amount of deemed distribution is reduced by any actual dividends paid out of the profits of the relevant year at any time. This special contribution for defense is payable by the Company for the account of the shareholders.

Dividends paid to non-Cyprus tax resident shareholders are not subject to withholding tax in Cyprus. Dividends paid to Cyprus tax resident domiciled physical persons are subject to withholding tax at the above rates.

Treasury stock represents the remaining balance of own shares bought back (note 16).

PARENT COMPANY STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 31 DECEMBER 2020

(in thousands of US\$)

	Note	2020 US\$	2019 US\$
Profit for the year before tax		44,153	5,806
Adjustments for:
Depreciation of property, plant and equipment	8	651	578
Amortization of intangible assets	9	826	946
Impairment loss on investments in subsidiaries	4	727	31
Loss from the sale of property, plant and equipment and intangible assets	4	(41)	90
Provision for bad debts and receivables written off		(39)	(431)
Provision for slow moving and obsolete stock	13	783	646
Dividend income	4	(15,210)	(22)
Interest received Interest paid	6	(138) 348	(228) 644
Operating profit before working capital changes		32,060	8,060
Decrease/(increase) in inventories		40,999	(74,315)
Increase trade receivables		(406)	(25,443)
(Increase)/decrease in other current assets		(70,317)	22,252
Increase in trade payables and prepayments		13,963	105,941
Increase/(decrease) in trade payables factoring facilities		22,297	(998)
Increase in other current liabilities		(503)	6,568
Increase in factoring creditors		4,633	639
Cash inflows from operations		42,726	42,704
Interest paid Taxation paid, net	6 7	(277) (1,478)	(644) (1,955)
Net cash inflows from operating activities		40,971	40,105
Cash flows from investing activities
Purchase of intangible assets	9	(539)	(443)
Purchase of property, plant and equipment	8	(694)	(622)
Proceeds/(write-offs) from sale of property, plant and equipment and
intangible assets		41	(3)
Interest received		138	228
Dividends received	4	15,210	22
Acquisition of treasury shares		(35)	(162)
Net increase in equity-accounted investees		(594)	(83)
Net increase in investment in subsidiary companies		(345)	(6,366)
Net cash inflows/(outflows) from investing activities		13,183	(7,429)
Cash flows from financing activities
Dividends paid	34	(9,684)	(6,089)
Repayments of long-term loans		(263)	-
Proceeds/(repayments) of short-term borrowings		16	(66)
Net cash outflows from financing activities		(9,931)	(6,155)
Net increase in cash and cash equivalents		44,222	26,521
Cash and cash equivalents at the beginning of the year		72,168	45,647
Cash and cash equivalents at the end of the year	27	116,390	72,168

Incorporation and principal activities

Asbisc Enterprises Plc (the "Company or "the parent Company") was incorporated in Cyprus on 9 November 1995 with limited liability. The Group's and the Company's principal activity is the trading and distribution of computer hardware and software in a number of geographical regions as disclosed in note 24. The main shareholder of the Company is K.S. Holdings Limited, a Company incorporated in Cyprus. The details of the Company's registered office are disclosed on page 1.

The Company is listed on the Warsaw Stock Exchange since 30 October 2007.

2. Significant accounting policies

Changes in significant accounting policies

The accounting policies adopted for the preparation of these consolidated and separate financial statements for the twelve months ended 31 December 2020 are consistent with those followed for the preparation of the annual financial statements for the year 2019.

Statement of compliance

The financial statements have been prepared in accordance with International Financial Reporting Standards as adopted by the European Union ("IFRS-EU") and the requirements of the Cyprus Companies Law, Cap.113.

The financial statements were approved by the Board of Directors and authorized for issue on the 30th of March 2021.

Basis of preparation

The financial statements which are expressed in United States Dollars, the Group's presentation and the Company's presentation and functional currency, have been prepared under the historical cost convention except for certain financial instruments that are measured at fair value, as explained in the accounting policies below.

The financial statements are presented in US dollars (US\$), and all values are presented in US\$ thousand unless otherwise stated.

Use of estimates and judgements

The preparation of financial statements in conformity with IFRS-EU requires the use of certain critical accounting estimates and requires management to exercise its judgment in the process of applying the Group's and the Company's accounting policies. It also requires the use of assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Although these estimates are based on management's best knowledge of current events and actions, actual results may ultimately differ from those estimates. Estimates and underlying assumptions are reviewed on an ongoing basis; revisions to estimates are recognized prospectively.

Information about judgments made in applying accounting policies and the estimates and assumptions, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are discussed in note 2 on pages 35 and 36.

Adoption of new and revised International Financial Reporting Standards

In the current year, the Group and the Company have adopted all of the new and revised standards and interpretations issued by the International Accounting Standards Board (the IASB) and the International Financial Reporting Interpretations Committee (the IFRIC) of the IASB that are relevant to its operations and effective for annual periods beginning on 1 January 2020. This adoption did not have a material effect on the financial statements of the Company.

The following Standards, Amendments to Standards and Interpretations have been issued by the International Accounting Standards Board (IASB) but are not yet effective for annual periods beginning on 1 January 2020. Those which may be relevant to the Company are set out below. The Company/Group does not plan to adopt these Standards early.

(i) Standards and Interpretations adopted by the EU

• Amendments to IFRS 16 Leases Covid 19-Related Rent Concessions (issued on 28 May 2020) (effective for annual periods beginning on or after 1 June 2020).
• Amendments to IFRS 4 Insurance Contracts deferral of effective date of IFRS 9 (issued on 25 June 2020) (effective for annual periods beginning on or after 1 January 2021).
• Amendments to IFRS 9, IAS 39 and IFRS17: Interest Rate Benchmark Reform Phase 2 (issued on 27 August 2020) (effective for annual periods beginning on or after 1 January 2021).

(ii) Standards and Interpretations not adopted by the EU

• IFRS 17 ''Insurance Contracts'' (effective for annual periods beginning on or after 1 January 2023).
• Amendments to IAS 1 Presentation of Financial Statements: Classification of Liabilities as Current or Noncurrent (issued on 23 January 2020) (effective for annual periods beginning on or after 1 January 2022).
• Amendments to IFRS 3 Business Combinations; IAS 16 Property, Plant and Equipment; IAS 37 Provisions, Contingent Liabilities and Contingent Assets; Annual Improvements 2018-2020 (All issued 14 May 2020) (effective for annual periods beginning on or after 1 January 2022).
• IFRS 10 (Amendments) and IAS 28 (Amendments) ''Sale or Contribution of Assets between an Investor and its Associate or Joint Venture'' (effective date postponed indefinitely).

Basis of consolidation

The consolidated financial statements incorporate the financial statements of the Company and entities (including special purpose entities) controlled by the Company (its subsidiaries). The Group "controls" an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. The financial statements of subsidiaries are included in the consolidated financial statements from the date on which control commences until the date on which control ceases.

Income and expenses of subsidiaries acquired or disposed of during the year are included in the consolidated statement of comprehensive income from the effective date of acquisition and up to the effective date of disposal as appropriate.

Total comprehensive income of subsidiaries is attributed to the owners of the Company and to the non-controlling interest even if this results in the non-controlling interest having a deficit balance.

Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies in line with those used by the Group.

All intra-group transactions, balances, income and expenses are eliminated in full on consolidation. Unrealized gains arising from transactions from equity-accounted investees are eliminated against the investment to the extent of the Group's interest in the investee. Unrealized losses are eliminated in the same way as unrealized gains, but only to the extent that there is no evidence of impairment.

Business combinations

Acquisitions of subsidiaries and businesses are accounted for using the acquisition method. The consideration of each acquisition is measured as the aggregate of the fair values (at the date of exchange) of assets given, liabilities incurred or assumed, and equity instruments issued by the Group in exchange for control of the acquiree. Acquisition related costs are recognized in profit or loss as incurred.

Where applicable, the consideration for the acquisition includes any asset or liability resulting from a contingent consideration arrangement, measured at its acquisition date fair value. Subsequent changes in such fair values are adjusted against the cost of acquisition where they qualify as measurement period adjustments. All other subsequent changes in the fair value of contingent consideration classified as an asset or liability are accounted for in accordance with relevant IFRSs. Changes in the fair value of contingent consideration classified as equity are not recognized.

The acquiree's identifiable assets, liabilities and contingent liabilities that meet the conditions for recognition under IFRS 3 are recognized at their fair value at the acquisition date, except that:

• deferred tax assets or liabilities and liabilities or assets related to employee benefit arrangements are recognized and measured in accordance with IAS 12 Income Taxes and IAS 19 Employee Benefits respectively;
• liabilities or equity instruments related to the replacement by the Group of an acquiree's share based payment awards are measured in accordance with IFRS 2 Share based payment; and
• assets (or disposal groups) that are classified as held for sale in accordance with IFRS 5 Noncurrent Assets Held for Sale and Discontinued Operations are measured in accordance with that Standard.

Non-controlling interests in subsidiaries are identified separately from the Group's equity therein. The interests of noncontrolling shareholders may be initially measured either at fair value or at the non-controlling interests' proportionate share of the fair value of the acquiree's identifiable net assets. The choice of measurement basis is made on an acquisition-by-acquisition basis. Subsequent to acquisition, the carrying amount of non-controlling interests is the amount of those interests at initial recognition plus the non-controlling interests' share of subsequent changes in equity. Total comprehensive income is attributed to non-controlling interests even if this results in the non-controlling interests having a deficit balance.

Changes in the Group's ownership interests in existing subsidiaries

Changes in the Group's ownership interests in subsidiaries that do not result in the Group losing control over the subsidiaries are accounted for as equity transactions. The carrying amounts of the Group's interests and the non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiaries. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognized directly in equity and attributed to the owners of the Company.

When the Group loses control of a subsidiary, it derecognizes the assets and liabilities of the subsidiary and any related NCI and other components of equity. The profit or loss on disposal is calculated as the difference between:

(i) the aggregate of the fair value of the consideration received and the fair value of any retained interest and (ii) the previous carrying amount of the assets (including goodwill), and liabilities of the subsidiary and any non-controlling interests. Amounts previously recognized in other comprehensive income in relation to the subsidiary are accounted for in the same manner as would be required if the relevant assets or liabilities were disposed of (i.e. reclassified to profit or loss or transferred directly to retained earnings). The fair value of any investment retained in the former subsidiary at the date when control is lost is regarded as the fair value on initial recognition for subsequent accounting under IAS 39 Financial Instruments: Recognition and Measurement or, when applicable, the cost on initial recognition of an investment in an associate or jointly controlled entity.

Investments in subsidiary and associates

In the individual accounts of the Company, investments in subsidiary, associate and jointly controlled companies are presented at cost less provision for impairment. The Group's interests in equity-accounted investees comprise interests in associates. Associates are those entities in which the Group has significant influence, but not control or joint control, over the financial and operating policies. Significant influence is presumed to exist when the Group holds between 20% and 50% of the voting power of another entity. Interest in associates is accounted for using the equity method and is recognized initially at cost. The cost of the investment includes transaction costs.

The consolidated financial statements include the Group's share of the profit or loss and other comprehensive income of equity accounted investees from the date that significant influence commences until the date that significant influence ceases. When the Group's share of losses exceeds its interest in an equity-accounted investee, the carrying amount of that interest including any long-term investments, is reduced to zero, and the recognition of further losses is discontinued, except to the extent that the Group has an obligation or has made payments on behalf of the investee.

Goodwill

Goodwill arising in a business combination is recognized as an asset at the date that control is acquired (the acquisition date). Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any non-controlling interests in the acquiree, and the fair value of the acquirer's previously held equity interest in the acquiree (if any) over the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed.

If, after reassessment, the Group's interest in the fair value of the acquiree's identifiable net assets exceeds the sum of the consideration transferred, the amount of any non-controlling interests in the acquiree and the fair value of the acquirer's previously held equity interest in the acquiree (if any), the excess is recognized immediately in profit or loss as a bargain purchase gain.

For the purpose of impairment testing, goodwill is allocated to each of the Group's cash-generating units expected to benefit from the synergies of the combination.

Cash-generating units to which goodwill has been allocated are tested for impairment annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than its carrying amount, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit. An impairment loss recognized for goodwill is not reversed in a subsequent period.

On disposal of a subsidiary, the attributable amount of goodwill is included in the determination of the profit or loss on disposal.

Segmental reporting

The Group is organized by geographical segments and this is the primary format for segmental reporting. Each geographical segment is subject to risks and returns that are different from those of other segments.

Revenue recognition

The Group recognizes revenue mainly from the following major sources:

• Sale of goods
• Sale of optional warranties related to the aforementioned products
• Sale of software licenses
• Rendering of services

Revenue is measured based on the consideration to which the Group expects to be entitled in a contract with a customer. The Group recognizes revenue when it transfers control of a product to a customer.

Sale of goods

The Group sells IT components and finished products mainly to small-medium businesses and retail market. Revenue represents amounts invoiced to customers in respect of sales of goods during the year and is stated net of trade discounts, rebates, customer returns and other similar allowances. Based on historical data and using the "most likely amount" method, the expected returns for the year were of insignificant value. Therefore, a significant reversal of revenue was not expected, and the effect of the returns was recorded as occurred.

Revenue from the sale of goods is recognized when the control of the product is transferred to the customer. The point in time at which the control is transferred and the performance obligation is considered as satisfied, is decided based on the incoterms of each sale of goods and also by considering the following indicators:

• the entity has a present right to payment for the asset
• the customer has legal title to the asset
• the entity has transferred physical possession of the asset
• the customer has the significant risks and rewards related to the ownership of the asset and
• the customer has accepted the asset.

More specifically, for each of the most used incoterms, revenue is recognized at the following point in time:

• Ex-works (EXW) when the goods become available to the buyer
• Carriage-paid-to (CPT) when the goods have been delivered to the carrier
• Carriage-and-insurance-paid-to (CIP) when the goods have been delivered to the carrier
• Free carrier (FCA) when the goods have been delivered to the carrier at the named place or point

Sale of optional warranties

The Group sells optional warranties only when the vendor offers this option. The Group enters into agreements with purchasers of its goods to perform necessary repairs falling outside of the products standard warranty period. Since it is the vendor that has the ultimate liability regarding the optional warranties sold, the performance obligation is considered satisfied upon sale and the related revenue is recognized immediately.

Sale of software licenses

The Group sells licenses only for software created by third parties. Software licenses are neither customized nor subject to significant integration services by the Group. Since the Group only acts just as the distributor of the licenses, the performance obligation is considered satisfied upon sale and the related revenue is recognized immediately.

Rendering of services

The Group provides mainly Value-Added Services (VAD) relating to the sale of IT components and finished products when the vendor offers this option. The Group enters into fixed price maintenance contracts with its customers between one and three years in length. Customers are required to pay in advance for each twelve-month service period and the relevant payment due dates are specified in each contract. Since it is the vendor that has the ultimate liability regarding the services sold, the performance obligation is considered satisfied upon sale and the related revenue is recognized immediately.

Dividend and interest income

Dividend income from investments is recognized when the Company's right to receive payment has been established.

Interest income is recognized when it is probable that the economic benefits will flow to the Group and the Company and the amount of revenue can be measured reliably.

Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset's net carrying amount.

Borrowing costs

All borrowing costs are recognized in the income statement in the period in which they are incurred using the effective interest method.

Employee benefits

.

Defined contribution pension plans

A defined contribution plan, the Employee Provident Fund, is a post-employment benefit plan under which the Company pays fixed contributions into a separate entity and will have no legal or constructive obligation to pay further amounts. The Company operates a defined contribution scheme, the assets of which are held in a separate trustee-administered fund. Obligations for contributions to defined contribution pension plans are recognized as staff costs in the statement of comprehensive income in the year during which services are rendered by employees.

Contributions to the Government Social Insurance Fund

The Company and the employees contribute to the Government Social Insurance Fund at the prevailing statutory rate which is applied on employees' salaries. The scheme is funded by payments from employees and by the Company. The Company's contributions are expensed as incurred and are included in staff costs. The Company has no further payment obligations once the contributions have been paid. Prepaid contributions are recognized as an asset to the extent that a cash refund or a reduction in the future payments is available.

Share-based payment transactions

The grant-date fair value of share-based payment awards granted to employees is recognized as an employee expense, with a corresponding increase in equity, over the period that the employees become unconditionally entitled to the awards. The amount recognized as an expense is adjusted to reflect the number of awards for which the related service and non-market performance conditions are expected to be met, such that the amount ultimately recognized as an expense is based on the number of awards that meet the related service and non-market performance conditions at the vesting date. For share-based payment awards with non-vesting conditions, the grant-date fair value of the share-based payment is measured to reflect such conditions and there is no true-up for differences between expected and actual outcomes.

Foreign currencies

The individual financial statements of each Group entity are presented in the currency of the primary economic environment in which the entity operates (its functional currency). For the purpose of the consolidated financial statements, the results and financial position of each entity are expressed in United States Dollars (US\$), which is the functional currency of the Company and the presentation currency for both the consolidated and separate financial statements

In preparing the financial statements of the individual entities, transactions in currencies other than the entity's functional currency (foreign currencies) are recorded at the rates of exchange prevailing at the dates of the transactions. At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing at the date when the fair value was determined. Non-monetary items are measured in terms of historical cost in a foreign currency and are not retranslated.

Exchange differences are recognized in the profit and loss in the period in which they arise. For the purpose of presenting consolidated financial statements, the assets and liabilities of the Group's foreign operations are expressed in United States Dollars using exchange rates prevailing at the end of the reporting period. Income and expense items are translated at the average exchange rates for the period, unless exchange rates fluctuated significantly during the period, in which case the exchange rates at the date of the transactions are used. Exchange differences arising, if any, are recognized in other comprehensive income and accumulated in equity (attributed to non-controlling interests as appropriate).

On the disposal of a foreign operation (i.e. a disposal of the Group's entire interest in a foreign operation, or a disposal involving loss of control over a subsidiary that includes a foreign operation, loss of joint control over a jointly controlled entity that includes a foreign operation, or loss of significant influence over an associate that includes a foreign operation), all of the accumulated exchange differences in respect of that operation attributable to the Group are reclassified to profit or loss. Any exchange differences that have previously been attributed to non-controlling interests are reclassified to other comprehensive income.

Goodwill and fair value adjustments arising on the acquisition of a foreign operation are treated as assets and liabilities of the foreign operation and translated at the closing rate.

Tax

Income tax expense represents the sum of the tax currently payable and deferred tax.

Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit reported in the income statement because it excludes items of income or expenses that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Group's liability for current tax is calculated using the tax rates that have been enacted or substantively enacted by the end of the reporting period.

Deferred tax

Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognized for all taxable temporary differences, and deferred tax assets are generally recognized for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilized. Such deferred tax assets and liabilities are not recognized if the temporary differences arise from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realized, based on tax rates (and tax laws) that have been enacted or substantially enacted by the end of the reporting period. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Group expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.

Deferred tax assets and liabilities are offset when there is legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Group intends to settle its current tax assets and liabilities on a net basis.

2. Significant accounting policies (continued)

Current and deferred tax for the period

Current and deferred tax are recognized as an expense or income in profit or loss, except when they relate to items that are recognized in other comprehensive income, in which case the tax is also recognized in equity.

Dividend distribution

Dividend distribution to the shareholders is recognized in the financial statements in the year in which dividends are declared.

Property, plant and equipment

Property, plant and equipment are carried at cost less accumulated depreciation and any accumulated impairment losses.

Properties in the course of construction for production, rental or administrative purposes, are carried at cost less any recognized impairment loss. Such properties are classified to the appropriate categories of property, plant and equipment when completed and are ready for their intended use. Depreciation of these assets, on the same basis as other property assets, commences when the assets are ready for their intended use.

Depreciation is provided at rates calculated to write off the cost less the estimated residual value of property, plant and equipment (other than freehold land and properties under construction) on a straight-line basis over their estimated useful economic lives as follows:

Leasehold property	Over the remaining period of the right for usage of the land
Buildings	46 - 100 years
Computer hardware	5 years
Warehouse machinery	3 - 5 years
Motor vehicles	5 years
Furniture, fittings and office equipment	10 years

No depreciation is provided on land.

An item of property, plant and equipment is derecognized upon disposal or when no future economic benefits are expected to arise from the continued use of the asset.

The gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sale proceeds and the carrying amount of the asset and is recognized in the profit and loss.

The estimated useful life and depreciation method are reviewed at the end of each annual reporting period, with the effect of any changes in estimate being accounted for on a prospective basis.

Intangible assets

Intangible assets consist of computer software, patents and licenses which are stated at cost less accumulated amortization and accumulated impairment losses. Amortization is provided at rates calculated to write off the cost less the estimated residual value of the assets using the straight-line method as follows:

Computer software	3 - 10 years
Patents and licenses	3 years

The estimated useful life and amortization method are reviewed at the end of each reporting period, with the effect of any changes in estimate being accounted for on a prospective basis.

An intangible asset is derecognized on disposal, or when no future economic benefits are expected from use. Gains or losses arising from derecognition of an intangible asset, measured as the difference between the net disposal proceeds and the carrying amount of the asset, and are recognized in profit or loss when the asset is derecognized.

Repairs and maintenance

Expenditure for repairs and maintenance of property, plant and equipment and costs associated with maintenance of computer software programs are recognized as an expense as incurred.

Impairment of tangible and intangible assets excluding goodwill

At the end of each reporting period, the Group and the Company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the Group and the Company estimates the recoverable amount of the cash-generating unit to which the asset belongs. Where a reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to individual cash-generating units, or otherwise they are allocated to the smallest Group of cash-generating units for which a reasonable and consistent basis of allocation is identified.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimated of future cash flows have not been adjusted.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognized immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognized immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

Financial instruments

Financial assets and financial liabilities are recognized when a Group entity becomes a party to the contractual provisions of the instrument.

Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognized immediately in profit or loss.

Financial assets

All regular way purchases or sales of financial assets are recognized and derecognized on a trade date basis. Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the time frame established by regulation or convention in the marketplace.

All recognized financial assets are measured subsequently in their entirety at either amortized cost or fair value, depending on the classification of the financial assets.

(i) Classification and subsequent measurement

On initial recognition, a financial asset is classified as measured at: amortized cost; Fair Value through Other Comprehensive Income – debt investment; Fair Value through Other Comprehensive Income – equity investment; or Fair value through profit or loss.

Financial assets are not reclassified subsequent to their initial recognition unless the Group changes its business model for managing financial assets, in which case all affected financial assets are reclassified on the first day of the first reporting period following the change in the business model.

• Financial assets at FVTPL

These assets are subsequently measured at fair value. Net gains and losses, including any interest or dividend income, are recognized in profit or loss.

• Financial assets at amortized cost

These assets are subsequently measured at amortized cost using the effective interest method. The amortized cost is reduced by impairment losses. Interest income, foreign exchange gains and losses and impairment are recognized in profit or loss. Any gain or loss on derecognition is recognized in profit or loss. Financial assets at amortized cost comprise of the following:

Trade receivables including factored trade receivables

The Group enters into various invoice discounting agreements with factoring companies from which a percentage of approved invoices are collected in advance. The invoices which are given for collection in advance are with recourse and included within trade receivables, whereas the amount collected from the factoring Company is presented in the statement of financial position under current liabilities until the date of settlement by the debtors. Factoring expenses are charged to the statement of comprehensive income.

Loans granted

Loans granted by the Company/Group to the borrower are categorized as loans. All loans are recognized when cash is advanced to the borrower.

Cash and cash equivalents

The Group considers all short-term highly liquid instruments with maturities of 3 months or less which are subject to insignificant risk of changes in value to be cash equivalents.

• Debt investments at FVOCI

These assets are subsequently measured at fair value. Interest income calculated using the effective interest method, foreign exchange gains and losses and impairment are recognized in profit or loss. Other net gains and losses are recognized in OCI. On derecognition, gains and losses accumulated in OCI are reclassified to profit or loss

• Equity investments at FVOCI

These assets are subsequently measured at fair value. Dividends are recognized as income in profit or loss unless the dividend clearly represents a recovery of part of the cost of the investment. Other net gains and losses are recognized in OCI and are never reclassified to profit or loss

(ii) Derecognition

The Group derecognises a financial asset when the contractual rights to the cash flows from the financial asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred or in which the Group neither transfers nor retains substantially all of the risks and rewards of ownership and it does not retain control of the financial assets.

The Group enters into transactions whereby it transfers assets recognized in its statement of financial position but retains either all or substantially all of the risks and rewards of the transferred assets. In these cases, the transferred assets are not derecognized.

Financial liabilities

(i) Classification and subsequent measurement

Financial liabilities are classified as measured at amortized cost or FVTPL. A financial liability is classified as at FVTPL if it is classified as held-for-trading, it is a derivative or it is designated as such on initial recognition. Financial liabilities at FVTPL are measured at fair value and net gains and losses, including any interest expense, are recognized in profit or loss. Other financial liabilities are subsequently measured at amortized cost using the effective interest method. Interest expense and foreign exchange gains and losses are recognized in profit or loss. Any gain or loss on derecognition is also recognized in profit or loss.

Financial guarantee contracts

A financial guarantee contract is a contract that requires the issuer to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payments when due in accordance with the terms of a debt instrument.

Financial guarantee contracts issued by the Company/Group are accounted for and measured initially at their fair values, and subsequently measured at the higher of:

• the amount of the obligation under the contract, as determined in accordance with IAS 37 Provisions, Contingent Liabilities and Contingent Assets and
• the amount initially recognized less, where appropriate, cumulative amortization recognized in accordance with the revenue recognition policies as set out below.

As at each reporting date presented in these financial statements, the Company participates in financial guarantee contracts and provide financial guarantees to its subsidiaries.

To be classified as a financial guarantee contract, a contract needs to comply with all of the following conditions:

• The reference obligation is a debt instrument.
• The holder is compensated only for a loss that it incurs.
• The contract does not compensate the holder for more than the actual loss that it incurs.

Financial guarantee contract in the scope of IFRS 9 is initially recognized at fair value. If the financial guarantee contract was issued in a stand-alone arm's length transaction to an unrelated party, then its fair value at inception is considered to be equal to the premium received unless there is evidence to the contrary.

In the case of a guarantee provided by the Company over the liability of a subsidiary, when no consideration is or will be received, the Company recognize a liability in its financial statements for the fair value of the guarantee at the date of granting the financial guarantee and the respective increase in the cost of the investment in subsidiary.

Subsequently, all financial guarantee contracts mentioned above are measured at the higher of:

• the amount of the loss allowance determined in accordance with IFRS 9 over the loan balance as at reporting date; and
• the amount initially recognized less, when appropriate, the cumulative amount of income recognized in accordance with the principles of IFRS 15.

Fee income recognized in accordance with the principles of IFRS 15 is posted within "finance income" caption of statement of profit and loss and other comprehensive income.

Any gain or loss caused by remeasurement of guarantee liabilities is posted through respective "finance income" and "finance expenses" captions of statement of profit and loss and other comprehensive income.

Bank borrowings

Interest-bearing bank loans and overdrafts are recorded at the proceeds received, net of direct issue costs. Finance charges, including premiums payable on settlement or redemption and direct issue costs, are accounted for on an accrual basis to the income statement using the effective interest method and are added to the carrying amount of the instrument to the extent that they are not settled in the period in which they arise.

(ii) Derecognition

The Group derecognizes a financial liability when its contractual obligations are discharged or cancelled or expire. The Group also derecognizes a financial liability when its terms are modified and the cash flows of the modified liability are substantially different, in which case a new financial liability based on the modified terms is recognized at fair value.

On derecognition of a financial liability, the difference between the carrying amount extinguished and the consideration paid (including any non-cash assets transferred or liabilities assumed) is recognized in profit or loss.

Effective interest method

The effective interest method is a method of calculating the amortized cost of a financial asset or liability and allocating interest income or expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash flows (including all fees on points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial asset or liability, or, where appropriate, a shorter period.

Inventories

Inventories comprise IT products (components and finished products) which are stated at the lower of cost and net realizable value. Cost is determined on the basis of standard cost method for the price protected stock items and on the weighted average cost method for the non-price protected stock items and comprises the cost of acquisition plus any other costs that are incurred to bring the stock items to their present location and condition. Net realizable value represents the estimated selling price for inventories less all cost necessary to make the sale

Equity instruments

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by the Group are recorded at the proceeds received, net of direct issue costs.

Repurchase of the Company's own equity instruments is recognized and deducted directly in equity. No gain or loss is recognized in profit or loss on the purchase, sale, issue or cancellation of the Company's own equity instruments.

Provisions

A provision is recognized in the statement of financial position when the Company/Group has a legal or constructive present obligation as a result of a past event, it is probable that an outflow of economic benefits will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.

The amount recognized as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cash flow estimated to settle the present obligation, its carrying amount is the present value of those cash flows.

When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, the receivable is recognized as an asset if it is virtually certain that the reimbursement will be received and the amount of the receivable can be measured reliably.

Warranties

Provisions for the expected cost of warranty are recognized at the date of sale of the relevant products, at the Directors' best estimate of the expenditure required to settle the Company's/Group's obligations.

Marketing

Provisions for the expected cost of marketing activities are recognized based on purchase of products, cost of goods sold and other various vendors rebates depending on turnover and marketing strategy. Marketing provisions are mainly used to support promotional and advertising related activities.

Impairment

(i) Financial assets

The Group uses 'expected credit loss' (ECL) model. This impairment model applies to financial assets measured at amortized cost, contract assets and debt instruments at FVOCI but not to investments in equity instruments. ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Group expects to receive, discounted at an approximation of the original effective interest rate. The expected cash flows will include cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms.

The Group recognizes loss allowances for ECLs on financial assets measured at amortized cost.

ECLs are recognized in two stages. For credit exposures for which there has not been a significant increase in credit risk since initial recognition, ECLs are provided for credit losses that result from default events that are possible within the next 12-months (a 12-month ECL). For those credit exposures for which there has been a significant increase in credit risk since initial recognition, a loss allowance is required for credit losses expected over the remaining life of the exposure, irrespective of the timing of the default (a lifetime ECL) due.

For trade receivables and contract assets, the Group applies a simplified approach in calculating ECLs. Therefore, the Group does not track changes in credit risk, but instead recognizes a loss allowance based on lifetime ECLs at each reporting date. The Group has established a provision matrix that is based on its historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the economic environment.

An impairment loss is calculated as the difference between an asset's carrying amount and the present value of the estimated future cash flows discounted at the asset's original effective interest rate. Losses are recognized in profit or loss. When the Group considers that there are no realistic prospects of recovery of the asset, the relevant amounts are written off. If the amount of impairment loss subsequently decreases and the decrease can be related objectively to an event occurring after the impairment was recognized, then the previously recognized impairment loss is reversed through profit or loss.

Loss allowances for financial assets measured at amortized cost are deducted from the gross carrying amount of the assets.

(ii) Non-financial assets

At each reporting date, the Group reviews the carrying amounts of its non-financial assets to determine whether there is any indication that those assets have suffered an impairment loss. An impairment loss is recognized if the carrying amount of an asset or cash-generating unit (CGU) exceeds its recoverable amount. Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the CGU to which the asset belongs. Goodwill is tested annually for impairment.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.

If the recoverable amount of an asset (or CGU) is estimated to be less than its carrying amount, the carrying amount of the asset (CGU) is reduced to its recoverable amount. An impairment loss is recognized immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Where an impairment loss subsequently reverses, the carrying amount of the asset (CGU) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset (CGU) in prior years. A reversal of an impairment loss is recognized immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

Leases

At inception or on reassessment of a contract that contains a lease component, the Group and the Company allocates the consideration in the contract to each lease and non-lease component on the basis of their relative stand-alone prices. However, for leases of properties in which it is a lessee, the Group and the Company elected not to separate components and will instead account for the lease and non-lease components as a single lease component.

The Group and the Company leases land and buildings and motor vehicles. As a lessee, the Group and the Company previously classified leases as operating or finance leased based on its assessment of whether the lease transferred substantially all the risks and rewards of ownership. Under IFRS 16, the Group and the Company recognizes right-of-use assets and lease liabilities for most leases – i.e. these leases are on balance sheet. The Group and the Company presents lease liabilities in 'long-term borrowings' and 'short-term borrowings' in the statements of financial position.

The Group recognizes a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received.

The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the end of the lease term, unless the lease transfers ownership of the underlying asset to the Group by the end of the lease term or the cost of the right-of-use asset reflects that the Company will exercise a purchase option. In that case the right-of-use asset will be depreciated over the useful life of the underlying asset, which is determined on the same basis as those of property and equipment. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Group's incremental borrowing rate. Generally, the Group y uses its incremental borrowing rate as the discount rate.

The Group determines its incremental borrowing rate by obtaining interest rates from various external financing sources and makes certain adjustments to reflect the terms of the lease and type of the asset leased.

Lease payments included in the measurement of the lease liability comprise the following:

• fixed payments, including in-substance fixed payments;
• variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date;
• amounts expected to be payable under a residual value guarantee; and
• the exercise price under a purchase option that the Company is reasonably certain to exercise, lease payments in an optional renewal period if the Company is reasonably certain to exercise an extension option, and penalties for early termination of a lease unless the Company is reasonably certain not to terminate early.

The lease liability is measured at amortized cost using the effective interest method. It is remeasured when there is a change in future lease payments arising from a change in an index or rate, if there is a change in the Company's estimate of the amount expected to be payable under a residual value guarantee, if the Company changes its assessment of whether it will exercise a purchase, extension or termination option or if there is a revised in-substance fixed lease payment.

When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.

Non-recoverable VAT is excluded from lease accounting as VAT payments are not made to lessor in exchange for the right to use an underlying asset. Instead, they are levies imposed by the government and are in the scope of IFRIC 21 (Levies) and are recognized when they are due under the tax law (when the invoice is issued). They are expensed in Statement of profit or loss and other comprehensive income immediately at the moment they are recognized.

Short-term leases and leases of low-value assets

The Company has elected not to recognize right-of-use assets and lease liabilities for leases of low-value assets and short-term leases. The Company recognizes the lease payments associated with these leases as an expense on a straight-line basis over the lease term.

Critical judgements in applying the entity's accounting policies and key sources of estimation uncertainty

The preparation of financial statements in conformity with IFRSs requires the use of certain critical accounting estimates and requires management to exercise its judgement in the process of applying the Group's accounting policies. It also requires the use of assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Although these estimates are based on management's best knowledge of current events and actions, actual results may ultimately differ from those estimates. The estimates and assumptions, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are discussed below:

Revenue recognition

In making its judgment, management considered the detailed criteria for the recognition of revenue from the sale of goods as set out in IFRS 15 Revenue from Contracts with Customers and, in particular, whether the Company/Group had transferred to the buyer the significant risks and rewards of ownership of the goods. The timing of the transfer of control is decided based on related incoterms. The management is satisfied that the significant risks and rewards have been transferred and the recognition of the revenue in the current year is appropriate.

Provision for bad and doubtful debts

The Company/Group reviews its trade and other receivables for evidence of their recoverability. Such evidence includes the customer's payment record, the customer's overall financial position and expected recovery from credit insurance. If indications of non-recoverability exist, the recoverable amount is estimated and a respective provision for bad and doubtful debts is made. The amount of the provision is charged through the income statement. The review of credit risk is continuous and the methodology and assumptions used for estimating the provision are reviewed regularly and adjusted accordingly.

Calculation of loss allowance

When measuring ECL the Group uses reasonable and supportable forward-looking information, which is based on assumptions for the future movement of different economic drivers and how these drivers will affect each other. Loss given default is an estimate of the loss arising on default. It is based on the difference between the contractual cash flows due and those that the lender would expect to receive, taking into account cash flows from collateral and integral credit enhancements.

2. Significant accounting policies (continued)

Probability of default constitutes a key input in measuring ECL. Probability of default is an estimate of the likelihood of default over a given time horizon, the calculation of which includes historical data, assumptions and expectations of future conditions. Loss rates are calculated separately for exposures in different segments which share common credit risk characteristics and are based on actual credit loss experience over the past four years. Significant customers, if any, are assessed individually.

Provision for obsolete and slow-moving inventory

The Company/Group reviews its inventory records for evidence regarding the salability of inventory and its net realizable value on disposal. The provision for obsolete and slow-moving inventory is based on management's past experience, taking into consideration arrangements with suppliers for price protection and for returning defective stock; the value of inventory as well as the movement and the level of stock of each category of inventory.

The amount of provision is recognized in the income statement. The review of the net realizable value of the inventory is continuous and the methodology and assumptions used for estimating the provision for obsolete and slow-moving inventory are reviewed regularly and adjusted accordingly.

Impairment of investments in subsidiaries, associated and jointly controlled enterprises

The Company periodically evaluates the recoverability of investments in subsidiaries, associates and jointly controlled enterprises/jointly controlled enterprises whenever indicators of impairment are present. Indicators of impairment include such items as declines in revenues, earnings or cash flows or material adverse changes in the economic or political stability of a particular country, which may indicate that the carrying amount of an asset is not recoverable. If facts and circumstances indicate that the investment in subsidiaries/associates/jointly controlled enterprises may be impaired, the estimated future undiscounted cash flows associated with these entities would be compared to their carrying amounts to determine if a write-down to fair value is necessary.

Warranty provisions

Warranty provisions represent the Company's/Group's best estimate of the liability as a result of the warranties granted on certain products and is based on past experience and industry averages for defective products.

Income taxes

Significant judgment is required in determining the provision for income taxes. There are transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business. The Company/Group recognizes liabilities for anticipated tax audit issues based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such difference will impact the income tax and deferred tax provisions in the period in which such determination is made.

Trade payables factoring facilities

Significant judgment is required in determining the appropriate presentation of supply-chain factoring facilities in the statement of financial position and statement of cash flow. The Group and the Company disclose the amounts factored by suppliers separately from trade payables because the nature and function of the financial liabilities is sufficiently different from a trade payable that a separate presentation is appropriate. The payments to the bank are included within operating cash flows because they continue to be part of the normal operating cycle of the Group and their principal nature remains operating – i.e. payments for the purchase of goods and services.

NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020 (in thousands of US\$)

3. Revenue

3.1 Disaggregation of revenue from contracts with customers

Analysis of revenue by category under revenue from contracts with customers is disaggregated by products and service lines:

	The Group		The Company
	2020 US\$	2019 US\$	2020 US\$	2019 US\$
Sales of goods	2,337,831	1,885,927	1,890,861	1,444,678
Sales of optional warranty	615	250	99	190
Sales of licenses	27,853	28,651	5,240	4,216
Rendering of services	142	53	-	-
Total revenue from contracts with customers	2,366,441	1,914,881	1,896,200	1,449,084

Revenue analysis by geographical market

The Group and the Company

The Group operates as a trader and distributor of computer hardware and software in a number of geographical regions. The following table shows an analysis of the Group's sales by geographical market, irrespective of the origin of the goods.

	The Group		The Company
	2020	2019	2020	2019
	US\$	US\$	US\$	US\$
Former Soviet Union	1,289,513	1,024,436	1,085,185	769,253
Central Eastern Europe	574,389	505,974	417,549	293,049
Middle East & Africa	279,419	217,855	223,010	169,241
Western Europe	171,104	127,464	103,796	107,855
Other	52,016	39,152	66,660	109,686
Total revenue from contracts with customers	2,366,441	1,914,881	1,896,200	1,449,084

Timing of revenue recognition

Goods transferred at a point in time	2,366,299	1,914,828	1,896,200	1,449,084
Services transferred at a point in time	142	53	-	-
Total revenue from contracts with customers	2,366,441	1,914,881	1,896,200	1,449,084

NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020 (in thousands of US\$)

3. Revenue (continued)

Revenue analysis by currency

		The Group		The Company
	2020	2019	2020	2019
	US\$	US\$	US\$	US\$
US Dollar	911,879	785,403	1,706,989	1,264,282
Euro	438,409	354,008	187,289	183,396
Russian Ruble	205,995	106,330	1,020	1,406
Ukraine Hryvnia	208,690	189,083	-	-
Kazakhstan Tenge	233,597	167,908	-	-
Czech Koruna	61,464	55,527	-	-
Romanian New Lei	49,400	38,893	-	-
Belarusian Ruble	135,686	116,837	-	-
Bulgarian Lev	33,974	30,757	-	-
Croatian Kuna	20,790	18,936	-	-
Hungarian Forint	6,383	13,424	-	-
Polish Zloty	14,496	6,621	-	-
Bosnian Mark	18,459	16,679	-	-
Other	27,219	14,475	902	-
	2,366,441	1,914,881	1,896,200	1,449,084

3.2 Contract balances

		The Group		The Company
	2020 US\$	2019 US\$	2020 US\$	2019 US\$
Trade and other receivables	295,846	212,168	46,486	46,041

The Group

Trade receivables are non-interest bearing. On 31 December 2020, US\$ 2,097 (2019: US\$ 1,657) was recognized as provision for impairment of trade receivables.

Contract assets are initially recognized for revenue earned from provision of series of services as receipt of consideration is conditional on successful completion of these services. Upon completion of the services and acceptance by the customer, the amounts recognized as contract assets are reclassified to trade receivables. During 2020 and 2019, the impact of contract assets was not material at the Group level.

Contract liabilities primarily relates to the advance consideration received from customers for delivery of series of services for which revenue is recognized over time. During 2020 and 2019, the impact of contract liabilities was not material at the Group level.

The Company

Trade receivables are non-interest bearing. On 31 December 2020, US\$ 200 (2019: US\$ 240) was recognized as provision for expected credit losses on trade receivables.

NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020

(in thousands of US\$)

3. Revenue (continued)

Contract assets are initially recognized for revenue earned from provision of series of services as receipt of consideration is conditional on successful completion of these services. Upon completion of the services and acceptance by the customer, the amounts recognized as contract assets are reclassified to trade receivables. During 2020 and 2019, the impact of contract assets was not material at the Group level.

Contract liabilities primarily relates to the advance consideration received from customers for delivery of series of services for which revenue is recognized over time. During 2020 and 2019, the impact of contract liabilities was not material at the Group level.

4. Other gains and losses

	The Group		The Company
	2020 US\$	2019 US\$	2020 US\$	2019 US\$
Dividend received	-	-	15,210	22
Profit/(loss) on disposal of property, plant and
equipment	24	(96)	41	(90)
Other net income	290	404	7,303	775
Bad debts recovered	24	80	-	-
Rental income	78	46	81	57
Impairment of investments		-	(727)	(31)
Impairment of investments in associates	-	(152)	-	-
Impairment loss on goodwill (Note 31)	(39)	(315)	-	-
	377	(33)	21,908	733

5. Profit before tax

	The Group		The Company
	2020	2019	2020	2019
	US\$	US\$	US\$	US\$
Profit before tax is stated after charging:
(a) Amortization of intangible assets (Note 9)	999	1,033	826	946
(b) Depreciation (Note 8)	3,388	2,998	651	578
(c) Auditors' remuneration – audit fees	432	390	243	229
(d) Directors' remuneration – executive (Note 28)	1,047	654	1,047	654
(e) Directors' remuneration – non-executive (Note 28)	28	23	28	23

NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020

(in thousands of US\$)

6. Financial expense, net

	The Group		The Company
	2020 US\$	2019 US\$	2020 US\$	2019 US\$
Financial income
Interest income	231	249	88	167
Interest income from loans to subsidiary
companies (Note 28)	-	-	50	61
Other financial income	2,976	3,239	2,266	2,395
Net exchange gain	1,112	-	-	-
	4,319	3,488	2,404	2,623
Financial expense
Bank interest	3,948	4,643	277	644
Bank charges	3,533	2,736	1,120	1,013
Derivative charges	1,102	1,827	912	1,263
Interest on lease liabilities	360	297	71	83
Factoring interest	5,558	5,437	386	453
Factoring charges	358	315	150	147
Other financial expenses	143	22	-	26
Other interest	1,706	2,301	1,667	2,266
Interest on loans from subsidiary companies	-	-	-	48
Net exchange loss	-	84	154	1,704
	16,708	17,662	4,737	7,647
Net	(12,389)	(14,174)	(2,333)	(5,024)

7. Tax

	The Group		The Company
	2020 US\$	2019 US\$	2020 US\$	2019 US\$
Payables balance 1 January	839	1,411	417	1,581
Provision for the year	8,544	3,708	4,309	1,101
Under/(over) provision of prior year	40	(400)	16	(311)
Exchange difference on retranslation	3	(17)	-	-
Amounts paid, net	(4,750)	(3,863)	(1,478)	(1,954)
Net payable balance 31 December	4,676	839	3,264	417

		The Group		The Company
	2020 US\$	2019 US\$	2020 US\$	2019 US\$
Tax receivable	(204)	(595)	-	-
Tax payable	4,880	1,434	3,264	417
Net	4,676	839	3,264	417

The taxation charge of the Group comprises corporation tax charge in Cyprus on the taxable profits of the Company and those of its subsidiaries which are subject to tax in Cyprus and corporation tax in other jurisdictions on the taxable results of the foreign subsidiary companies.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020

(in thousands of US\$)

7. Tax (continued)

The Company and all Cyprus resident companies of the Group are subject to corporation tax at the rate of 12.5% (2019: 12.5%). The tax rates of subsidiaries in foreign jurisdictions range between 0% and 30%.

Dividends received by the Cyprus companies of the Group are exempt from corporation tax and they are also exempt from defence tax.

Bank interest received by the Company and all Cyprus resident companies of the Group is subject to defence tax of 30% (2019: 30%).

Tax charge for the year

	The Group		The Company
	2020 US\$	2019 US\$	2020 US\$	2019 US\$
Provisions and withholding tax for the year	8,544	3,708	4,309	1,101
Under/(over) provision of prior year	40	(400)	17	(311)
Deferred tax charge	(432)	417	(8)	208
Net	8,152	3,725	4,318	998

The charge for taxation is based on the Group's/Company's profits for the year as adjusted for tax purposes. The reconciliation of the charge for the year is as follows:

	The Group		The Company
	2020 US\$	2019 US\$	2020 US\$	2019 US\$
Profit before tax	44,667	18,965	44,152	5,806
Corporation tax thereon at the applicable tax rates	7,063	1,949	5,519	726
Tax on income not taxable in determining taxable
profit	(2,356)	(924)	(2,087)	(124)
Effect of using tax losses brought forward	(49)	(82)	-	-
Effect of unused current year tax losses	18	174	-	-
Temporary differences	773	989	289	61
Tax charges and penalties	12	6	6
Tax on non-allowable expenses	3,081	1,594	582	436
	8,542	3,706	4,309	1,099
Special contribution to defense fund	2	2	-	2
Over/(under) provision of prior years	40	(400)	17	(311)
Deferred tax charge	(432)	417	(8)	208
Tax charge	8,152	3,725	4,318	998

NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2020

(in thousands of US\$)

8. Property, plant and equipment

The Group	Land and buildings US\$	Computer hardware US\$	Warehouse machinery US\$	Motor vehicles US\$	Furniture and fittings US\$	Office equipment US\$	Total US\$
Cost at 1 January 2019	24,820	6,746	416	2,124	2,892	3,589	40,587
Recognition of right-of-use assets on initial application of IFRS 16 Adjusted balance at 1 January 2019	3,771 28,591	- 6,746	- 416	722 2,846	2,892	- - 3,589	4,493 45,080
Additions	863	762	139	247	39	277	2,327
Disposals	(235)	(397)	(31)	(98)	(73)	(119)	(953)
Foreign exchange difference on retranslation	469	139	-	114	(52)	92	762
At 31 December 2019	29,688	7,250	524	3,109	2,806	3,839	47,216
Additions	2,361	978	115	1,573	411	616	6,054
Disposals	(575)	(137)	(24)	(561)	(155)	(18)	(1,470)
Foreign exchange difference on retranslation	767	10	25	(38)	35	(237)	562
At 31 December 2020	32,241	8,101	640	4,083	3,097	4,200	52,362
Accumulated depreciation
At 1 January 2019	4,275	5,283	244	1,254	2,015	2,266	15,337
Charge for the year	1,532	503	167	484	37	275	2,998
Disposals	(235)	(397)	(31)	(98)	(9)	(119)	(889)
Foreign exchange difference on retranslation	69	58	-	(5)	(22)	(10)	90
At 31 December 2019	5,641	5,447	380	1,635	2,021	2,412	17,536
Charge for the year	1,347	682	36	664	310	349	3,388
Disposals	(575)	(137)	(24)	(561)	(155)	(18)	(1,470)
Foreign exchange difference on retranslation	22	87	24	8	76	(37)	180
At 31 December 2020	6,435	6,079	416	1,746	2,252	2,706	19,634
Net book value
At 31 December 2020	25,806	2,022	224	2,337	845	1,494	32,728
At 31 December 2019	24,047	1,803	144	1,474	785	1,427	29,680

Land and buildings are mortgaged for financing purposes. The cost of fully depreciated assets of the Group that are still in use amounted to US\$ 9,980 (2019: US\$ 8,076).

NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020 (in thousands of US\$)

8. Property, plant and equipment (continued)

Included in the net carrying amount of property, plant and equipment are right-of-use assets as follows:

	Land and buildings US\$	Warehouse machinery US\$	Motor vehicles US\$	Total US\$
Balance at 1 January 2019	3,771	-	722	4,493
Depreciation charge for the year	(1,049)	-	(289)	(1,338)
Additions to right of use assets	1,086	-	161	1,247
Derecognition of right of use assets	(323)	-	-	(323)
Foreign exchange difference on retranslation	448	-	(64)	384
Balance at 31 December 2019	3,933	-	530	4,463
Depreciation charge for the year	(1,036)	(1)	(353)	(1,390)
Additions to right of use assets	2,395	37	740	3,172
Derecognition of right of use assets	(726)	-	-	(726)
Foreign exchange difference on retranslation	509	(1)	141	650
Balance at 31 December 2020	5,055	35	1,058	6,169

The Group leases offices, warehouses and stores in various locations throughout the countries of operation. In addition, the Group leases motor vehicles for business use and employee commuting, as well as some warehouse machinery for warehouse operations.

The total cash outflows for the leases related to the above right-of-use assets were US\$ 860 (2019: US\$ 1,082).

The Company	Land and buildings US\$	Computer hardware US\$	Warehouse machinery US\$	Motor vehicles US\$	Furniture and fittings US\$	Office equipment US\$	Total US\$
Cost at 1 January 2019	5,816	3,058	-	376	504	822	10,576
Recognition of right-of-use assets on
initial application of IFRS 16	1,672	-	-	-	-	-	1,672
Adjusted balance at 1 January 2019	7,488	3,058	-	376	504	822	12,248
Additions	16	267	-	-	7	14	304
Disposals	-		- -	(49)		- -	(49)
At 31 December 2019	7,504	3,325	-	327	511	836	12,503
Additions	11	169	69	273	26	146	694
Disposals	-	(5)	-	(151)	(2)	-	(158)
At 31 December 2020	7,515	3,489	69	449	535	982	13,039
Accumulated depreciation
At 1 January 2019	1,195	2,742	-	224	412	734	5,307
Charge for the year	379	117	-	43	18	21	578
Disposals	-		- -	(29)	-	-	(29)
At 31 December 2019	1,574	2,859	-	238	430	755	5,856
Charge for the year	379	149	2	76	17	28	651
Disposals	-	(5)	-	(150)	(2)	-	(157)
At 31 December 2020	1,953	3,003	2	164	445	783	6,350
Net book value
At 31 December 2020	5,562	486	67	285	90	199	6,689
At 31 December 2019	5,930	466	-	89	81	81	6,647

The land and buildings have been mortgaged as securities for financing purposes. The cost of fully depreciated assets of the Company that are still in use amounted to US\$ 5,144 (2019: US\$ 3,718).

NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020 (in thousands of US\$)

8. Property, plant and equipment (continued)

Included in the net carrying amount of property, plant and equipment are right-of-use assets as follows:

	Land and buildings US\$	Total US\$
Balance at 1 January 2019	1,672	1,672
Depreciation charge for the year	(318)	(318)
Additions to right of use assets	-	-
Derecognition of right of use assets	-	-
Foreign exchange difference on retranslation	-	-
Balance at 31 December 2019	1,354	1,354
Depreciation charge for the year	(318)	(318)
Additions to right of use assets	-	-
Derecognition of right of use assets	-	-
Foreign exchange difference on retranslation	-	-
Balance at 31 December 2020	1,036	1,036

The Company leases the distribution center in Prague, Czech Republic.

The total cash outflows for the leases related to the above right-of-use assets were US\$ 367 (2019: US\$ 346).

9. Intangible assets

The Group	Computer software US\$	Patents and licenses US\$	Total US\$
Cost at 1 January 2019	9,746	2,383	12,129
Additions	514	1	515
Disposals/ write-offs	(112)	(1,100)	(1,212)
Foreign exchange difference on retranslation	(11)	(3)	(14)
At 31 December 2019	10,137	1,281	11,418
Additions	398	410	808
Disposals/ write-offs	(31)	(120)	(151)
Foreign exchange difference on retranslation	88	2	90
At 31 December 2020	10,592	1,573	12,165
Accumulated amortization
At 1 January 2019	7,124	1,937	9,061
Charge for the year	802	231	1,033
Disposals/ write-offs	(112)	(1,043)	(1,155)
Foreign exchange difference on retranslation	(114)	-	(114)
At 31 December 2019	7,700	1,125	8,825
Charge for the year	905	94	999
Disposals/ write-offs	(31)	(120)	(151)
Foreign exchange difference on retranslation	71	3	74
At 31 December 2020	8,645	1,102	9,747
Net book value
At 31 December 2020	1,947	471	2,418
At 31 December 2019	2,437	156	2,593

The cost of fully amortized intangibles of the Group that are still in use amounted to US\$ 2,186 (2019: US\$ 2,074).

NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020

(in thousands of US\$)

9. Intangible assets (continued)

The Company	Computer	Patents and
	software	licenses	Total
	US\$	US\$	US\$
Cost at 1 January 2019	9,122	1,644	10,766
Additions	443	-	443
Disposals/write offs	-	(1,112)	(1,112)
At 31 December 2019	9,565	532	10,097
Additions	249	290	539
Disposals/write offs	-	-	-
At 31 December 2020	9,814	822	10,636
Accumulated amortization
At 1 January 2019	6,671	1,366	8,037
Charge for the year	762	184	946
Disposals/ write offs	-	(1,045)	(1,045)
At 31 December 2019	7,433	505	7,938
Charge for the year	784	42	826
Disposals/ write offs	-	-	-
At 31 December 2020	8,217	547	8,764
Net book value
31 December 2020	1,597	275	1,872
31 December 2019	2,132	27	2,159

The cost of fully amortized intangibles of the Company that are still in use amounted to US\$ 1,372 (2019: US\$ 1,240).

NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020

(in thousands of US\$)

10. Investments

Investment in subsidiary companies

	As at 31 December 2020 US\$	As at 31 December 2019 US\$
The Company
Cost
At 1 January	18,192	11,826
Increase in investments (i), (ii), (vi), (vii)	345	6,416
Fair value of financial guarantees to subsidiaries (iii)	964	-
Liquidation of investments (viii)	-	(50)
At 31 December	19,501	18,192
Accumulated impairment
At 1 January	(2,328)	(2,297)
Impairment charge for the year (iv), (v)	(727)	(31)
At 31 December	(3,055)	(2,328)
Carrying amount of investment in subsidiary companies	16,446	15,864

• (i) In March 2020, the Company acquired the 55% shareholding of Real Scientists Ltd for the total consideration of US\$ 17. In September 2020, the Company acquired the 100% shareholding of ASBIS IT Solutions Hungary Kft (Hungary) for the total consideration of US\$ 10. In October 2020, the Company acquired the 70% shareholding of I.O.N. Clinical Trading Ltd and 85% shareholding of R.SC. Real Scientists Cyprus Ltd for the consideration of US\$8 and US\$ 10 respectively.
• (ii) In October 2020, the Company increased its investment in its wholly owned subsidiary ASBC LLC for the amount of US\$ 300.
• (iii) During 2020, the Company provided to subsidiaries financial guarantees of fair value US\$ 964.
• (iv) During 2020, the wholly owned subsidiary ASBIS Hungary Commercial Ltd has ceased majority of its operations, hence the impairment of the full amount of the respective investment.
• (v) During 2019, the wholly owned subsidiary ASBIS DE GmbH has ceased its operations, hence the impairment of the full amount of the respective investment.
• (vi) In January and July 2019, the Company acquired the 100% shareholding of ASBC LLC (Georgia) for the total consideration of US\$ 260. On December 2019, the Company acquired the remaining 3% of CJSC Asbis, for the consideration of US\$ 1.
• (vii) In January 2019, the Company increased its investment in its wholly owned subsidiaries ASBC F.P.U.E. and ASBIS ROMANIA SRL for the amount of US\$ 120 and US\$ 5,976 respectively.
• (viii) In January 2019, Asbis Limited (Ireland) has been liquidated, being a dormant company. On July 2019, ASBIS CLOUD Ltd has been merged with Asbis OOO, given all assets, liabilities and equity to Asbis OOO and finally has been liquidated.

All subsidiaries are involved in the trading and distribution of computer hardware and software.

The Company periodically evaluates the recoverability of investments in subsidiaries whenever indicators of impairment are present. Indicators of impairment include such items as declines in revenues, earnings or cash flows or material adverse changes in the economic or political stability of a particular country, which may indicate that the carrying amount of an asset is not recoverable. If facts and circumstances indicate that investment in subsidiaries may be impaired, the estimated future discounted cash flows associated with these subsidiaries would be compared to their carrying amounts to determine if a write-down to fair value is necessary. Based on the results of the impairment assessment performed as at 31 December 2020, the management decided to fully impair investment in ASBIS Hungary Commercial Ltd (note iv). The total amount of impairment loss amounting to US\$ 727 is recognized in the statement of profit and loss and other comprehensive income.

NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020 (in thousands of US\$)

10. Investments (continued)

At the year end the Company held a participation in the following subsidiaries:

	Country of
Subsidiary Company	incorporation	Percentage of participation
		2020	2019
		%	%
ASBIS UKRAINE LTD	Ukraine	100	100
ASBIS KAZAKHSTAN LLP	Kazakhstan	100	100
ASBIS PL SP. Z O.O. - dormant	Poland	100	100
ASBIS POLAND SP. Z.O.O	Poland	100	100
ASBIS ROMANIA SRL	Romania	100	100
ASBISC-CR D.O.O.	Croatia	100	100
ASBIS D.O.O.	Serbia	100	100
ASBIS HUNGARY COMMERCIAL LTD	Hungary	100	100
ASBIS BULGARIA LTD	Bulgaria	100	100
ASBIS CZ, SPOL S.R.O.	Czech Republic	100	100
ASBIS VILNIUS UAB	Lithuania	100	100
ASBIS D.O.O.	Slovenia	100	100
ASBIS ME FZE	United Arab Emirates	100	100
ASBIS SK SPOL S.R.O.	Slovakia	100	100
ASBC F.P.U.E.	Belarus	100	100
E.M. EURO-MALL LTD	Cyprus	100	100
ASBIS OOO	Russia	100	100
ASBIS MOROCCO SARL – dormant	Morocco	100	100
ASBIS LV SIA	Latvia	100	100
ASBIS KYPROS LIMITED	Cyprus	100	100
PRESTIGIO PLAZA LTD	Cyprus	100	100
PERENIO IoT SPOL S.R.O. (iv)	Czech Republic	100	100
EURO-MALL SRO (ii)	Slovakia	100	100
PRESTIGIO CHINA CORP.	China	100	100
EUROMALL BULGARIA EOOD – dormant (ii)	Bulgaria	100	100
ASBIS D.O.O.	Bosnia Herzegovina	90	90
ASBIS DE GmbH – dormant (i)	Germany	100	100
PRESTIGIO PLAZA SP.ZO.O. - dormant (i) (ii)	Poland	100	100
ASBIS TR BILGISAYAR LIMITED SIRKETI – dormant (v)	Turkey	100	100
CJSC ASBIS	Belarus	100	100
ADVANCED SYSTEMS COMPANY LLC (v)	Saudi Arabia	100	100
"E-VISION" UNITARY ENTERPRISE	Belarus	100	100
SHARK COMPUTERS a.s. (i)	Slovakia	-	100
I ON LTD (ii)	Ukraine	100	100
ASBC LLC	Azerbaijan	65.85	65.85
ASBIS SERVIC LTD (vii)	Ukraine	100	100
ASBC KAZAKHSTAN LLP (v)	Kazakhstan	100	100
Atlantech LTD (v)	United Arab	100	100
	Emirates
ALC Avectis (viii)	Belarus	100	100
OOO Avectis (x)	Russia	100	100
ASBC LLC	Georgia	100	100
LLC Vizuatika (xiv)	Belarus	75	75
Private Educational Institution "Center of excellence in		100	100
Education for executives and specialists in Information	Belarus
Technology" (xi)
OOO Must (xii)	Russia	100	100
LLC Vizuator (xv)	Belarus	75	75

NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020 (in thousands of US\$)

Country of

10. Investments (continued)

(i) Liquidated during 2020, or under liquidation (ii) Held by E.M. Euro-Mall Ltd – Cyprus (iii) Established/acquired during 2020 (iv) Held by Prestigio Plaza Ltd (v) Held by Asbis Middle East FZE (vi) Held by Euro-mall s.r.o (vii) Held by Asbis Ukraine Ltd (viii) Held by Atlantech Ltd (x) Held by ALC Avectis (xi) Held by CJSC ASBIS (xii) Held by Asbis OOO (xiii) Held by ASBC Kazakhstan LLC (xiv) Held by "E-VISION" UNITARY ENTERPRISE (xv) Held by ASBC F.P.U.E.

Subsidiary Company	incorporation	Percentage of participation
		2020	2019
		%	%
i-Care LLC (xiii)	Kazakhstan	100	100
Real Scientists Ltd (iii)	United Kingdom	55	-
ASBIS IT Solutions Hungary Kft (iii)	Hungary	100	-
MakSolutions LLC (ii) (iii)	Belarus	100	-
Café-Connect LLC (iii) (xv)	Belarus	100	-
TOO "ASNEW" (iii) (xiii)	Kazakhstan	100	-
Breezy Ltd (iii) (vii)	Ukraine	100	-
I.O.N Clinical Trading Ltd (iii)	Cyprus	70	-
R.SC. Real Scientists Cyprus Ltd (iii)	Cyprus	85	-

11. Equity-accounted investees

	As at 31 December 2020 US\$	As at 31 December 2019 US\$
Cost
At 1 January	274	366
Additions (i), (ii) Full acquisition of investment in associate (iii), (iv)	594 -	227 (319)
At 31 December	868	274
Accumulated share of profit/(loss) from equity-accounted investees
At 1 January	(47)	(30)
Share of profit/(loss) from equity-accounted investees during the year Exchange difference	6 -	(25) 8
At 31 December	(41)	(47)
Carrying amount of equity-accounted investees	827	227

• (i) In January 2020, the Company acquired 40% shareholding in Clevetura LLC (Belarus), for the consideration of US\$ 594. The investment is accounted for as an associate.
• (ii) In April 2019, the Company acquired 50% shareholding in Redmond Europe Ltd (Cyprus), for the consideration of US\$ 227. The investment is accounted for as an associate.
• (iii) In July 2019, the Company acquired the remaining 60% shareholding of ASBC LLC (Georgia) and the investment was derecognized from associate.
• (iv) In July 2019, the Company acquired the remaining 75% shareholding of ALC Avectis (Belarus) and the investment was derecognized from associate.

NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020

(in thousands of US\$)

11. Equity-accounted investees (continued)

(v) During the period ended 31 December 2020, the Group concluded a loan agreement with its associate LLC Clevetura for the amount of US\$ 30. The loan bears interest of 4% p.a and is repayable in 31 December 2021. In addition, the Group acquired services for the total amount of US\$435 from the associate.

12. Trade payables factoring facilities

	The Group		The Company
	2020 US\$	2019 US\$	2020 US\$	2019 US\$
Trade payables factoring facilities	51,403	29,106	51,403	29,106

The Group and the Company participate in trade payables factoring facilities (or "supply chain financing facilities" - "SCFs") programs which enable the Group and the Company to obtain extended payment terms for pre-approved suppliers. The Group incurs additional interest towards the SCFs on the amounts due to suppliers. The Company may elect to have any of its SCFs pay its suppliers either on the discount date or on due date and then obtain extended payment terms from them.

The Group discloses the amounts factored by suppliers separately from trade payables because the nature and function of the financial liabilities is sufficiently different from a trade payable that a separate presentation is appropriate. The payments to the bank are included within operating cash flows because they continue to be part of the normal operating cycle of the Group and their principal nature remains operating – i.e. payments for the purchase of goods and services.

As at 31 December 2020, the Company and the Group enjoyed trade payables factoring facilities of US\$ 52,000 (2019 US\$ 44,000).

13. Inventories

	The Group		The Company
	2020 US\$	2019 US\$	2020 US\$	2019 US\$
Goods in transit	55,119	50,309	24,941	42,238
Goods held for resale	227,746	219,459	90,693	114,395
Provision for slow moving and obsolete stock	(5,308)	(3,729)	(3,589)	(2,806)
	277,557	266,039	112,045	153,827

The Group

As at 31 December 2020, inventories pledged as security for financing purposes amounted to US\$ 73,274 (2019: US\$ 72,470).

The Company

As at 31 December 2020, inventories pledged as security for financing purposes amounted to US\$ 13,000 (2019: US\$ 13,000).

NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020

(in thousands of US\$)

13. Inventories (continued)

Movement in provision for slow moving and obsolete

stock	The Group		The Company
	2020 US\$	2019 US\$	2020 US\$	2019 US\$
On 1 January	3,728	3,182	2,806	2,160
Provisions during the year	3,105	1,361	2,117	1,052
Provided stock written off	(1,695)	(807)	(1,334)	(406)
Exchange difference	170	(7)	-	-
On 31 December	5,308	3,729	3,589	2,806

14. Trade receivables

	The Group		The Company
	2020 US\$	2019 US\$	2020 US\$	2019 US\$
Trade receivables	294,515	210,704	44,476	43,827
Prepayments to trade vendors	3,427	3,121	2,210	2,454
Allowance for doubtful debts	(2,096)	(1,657)	(200)	(240)
	295,846	212,168	46,486	46,041

The Group

As at 31 December 2020, receivables of the Group that have been pledged as security for financing purposes amounted to US\$ 66,884 (2019: US\$ 98,670).

The Company

As at 31 December 2020, receivables of the Company that have been pledged as security for financing purposes amounted to US\$ 6,866 (2019: US\$ 8,403).

Movement in provision for doubtful debts:	The Group		The Company
	2020 US\$	2019 US\$	2020 US\$	2019 US\$
Provisions during the year	1,226	904	11	(4)
Amount written-off as uncollectible	(749)	(2,739)	(50)	(427)
Bad debts recovered	(24)	(80)	-	-
Exchange difference	(14)	27	-	-
On 31 December	2,096	1,657	200	240

Ageing of trade receivables

Year	Total receivables US\$	Outstanding but not due yet US\$	Overdue between 1-30 days US\$	Overdue between 30-60 days US\$	Overdue more than 60 days US\$
2020	294,515	260,035	17,916	1,913	14,651
2019	210,704	179,672	18,173	4,683	8,176

NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020

(in thousands of US\$)

14. Trade receivables (continued)

The Group

Ageing of impaired receivables (provision for bad debts)

Year	Total US\$	Outstanding but not due yet US\$	Overdue between 1-30 days US\$	Overdue between 30-60 days US\$	Overdue more than 60 days US\$
2020	2,096	775	-	18	1,303
2019	1,657	230	61	6	1,360

The Company

Ageing of trade receivables

Total receivables US\$	Outstanding but not due yet US\$	Overdue between 1-30 days US\$	Overdue between 30-60 days US\$	Overdue more than 60 days US\$
44,476	25,141	5,450	1,115	12,770 4,999
	43,827	26,467	8,624	3,737

Ageing of impaired receivables (provision for bad debts)

Year	Total	Outstanding but not due yet US\$	Overdue between 1-30 days US\$	Overdue more 30-60 days US\$	Overdue more than 60 days US\$
	US\$
2020	200	-	-	-	200
2019	239	-	-	-	239

15. Other current assets

	The Group		The Company
	2020 US\$	2019 US\$	2020 US\$	2019 US\$
VAT and other taxes refundable	14,065	7,900	8,788	3,566
Deposits and advances to service providers	554	733	204	190
Employee floats	171	584	88	505
Other debtors and prepayments	4,350	6,818	1,105	1,157
Amount due from non-consolidated related parties	-	-	219	413
Amount due from subsidiary companies (Note 28)	-	-	162,600	98,860
Loans due from subsidiary companies (Note 28)	-	-	10,092	7,337
	19,140	16,035	183,096	112,028

NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020

(in thousands of US\$)

16. Share capital

(for the purposes of this note the amounts are stated in full)

	2020 US\$	2019 US\$
Authorized 63,000,000 (2019: 63,000,000) shares of US\$ 0.20 each	12,600.000	12,600,000
Issued and fully paid 55,500,000 (2019: 55,500,000) ordinary shares of US\$ 0.20 each	11,100,000	11,100,000

On 31 December 2020 the issued and fully paid share capital of the Company consisted of 55,500,000 ordinary shares of US \$0.20 each.

Following an extraordinary general meeting of the shareholders on the 15th of July 2019, a share buyback program with the following conditions was approved:

• the maximum amount of money that can be used to realize the program is US\$ 300,000
• the maximum number of shares that can be bought within the program is 500,000 shares
• the program's time frame is 12 months from the resolution's date
• the shares purchased within the program could be held for a maximum of two years from acquisition
• the minimum price for transaction of purchase of shares within the program is PLN 1.5 per share with the maximum price of PLN 3.0 per share

At the end of 2020 the Company held a total of 325,389 (2019: 274,389) shares purchased for a total consideration of US\$ 212 (2019: US\$ 176).

17. Short-term borrowings

	The Group		The Company
	2020 US\$	2019 US\$	2020 US\$	2019 US\$
Current borrowings
Bank overdrafts (Note 27)	45,215	25,380	1,675	1,178
Current portion of long-term loans	61	176	-	-
Bank short-term loans	34,256	26,089	-	-
Current lease liabilities (Note 20)	1,373	1,329	347	331
Total short-term debt	80,905	52,974	2,022	1,509
Factoring creditors	80,057	54,199	13,035	8,402
	160,962	107,173	15,057	9,911

Summary of borrowings and overdraft arrangements

The Group

As at 31 December 2020 the Group had factoring facilities of US\$ 117,775 (2019: US\$118,035).

In addition, the Group as at 31 December 2020 had the following financing facilities with banks in the countries that the Company and its subsidiaries operate:

• overdraft lines of US\$ 111,439 (31 December 2019: US\$ 97,398)
• short-term loans/revolving facilities of US\$ 52,939 (31 December 2019: US\$ 42,700)
• bank guarantee and letters of credit lines of US\$ 52,183 (31 December 2019: US\$ 41,266)

The Group had for the year ended 31 December 2020 cash lines (overdrafts, loans and revolving facilities) and factoring lines.

NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020

(in thousands of US\$)

17. Short-term borrowings (continued)

The Weighted Average Cost of Debt (cash lines and factoring lines) for the period is 8.0% (2019: 7.6%).

The factoring, overdraft and revolving facilities as well as the loans granted to the Company and its subsidiaries by their bankers are secured by:

• Floating charges over all assets of the Company
• Mortgage on land and buildings that the Group owns in Cyprus, Czech Republic, Belarus, Middle East, Bulgaria, Slovakia and Ukraine
• Charge over receivables and inventories
• Corporate guarantees
• Assignment of insurance policies
• Pledged deposits of US\$ 33,322 (31 December 2019: US\$ 27,485)

The Company

As at 31 December 2020 the Company enjoyed factoring facilities of US\$ 14,000 (2019: US\$ 14,000).

In addition, the Company, as at 31 December 2020 had the following financing facilities with banks:

• Overdraft facilities of US\$ 36,190 (2019: US\$ 27,859)
• Long-term loan facilities US\$ nil (2019: US\$ nil)
• Bank guarantee and letter of credit lines of US\$ 49,118 (2019: US\$ 39,213)

The Company had cash lines (overdrafts and revolving facilities) with average cost for the year of 5.0% (2019: 5.8%).

The overdraft, revolving and factoring facilities granted to the Company are secured by:

• Floating charges over all assets of the Company
• Pledged deposits US\$ 29,660 (2019: US\$ 25,228)
• Mortgage on immovable properties in the amount of US\$ 8,952 (2019 US\$ 8,687)

18. Long-term borrowings

	The Group		The Company
	2020 US\$	2019 US\$	2020 US\$	2019 US\$
Bank loans Non-current lease liabilities (note 20)	523 5,206	35 3,303	- 887	- 1,079
	5,729	3,338	887	1,079
19. Other long-term liabilities	The Group		The Company
	2020 US\$	2019 US\$	2020 US\$	2019 US\$
Other long-term liabilities	732	635	-	-

NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020 (in thousands of US\$)

20. Lease liabilities

	The Group		The Company
	2020 US\$	2019 US\$	2020 US\$	2019 US\$
Current lease liabilities (Note 17) Non-current lease liabilities (Note 18)	1,373 5,206	1,329 3,303	347 887	331 1,079
	6,579	4,632	1,234	1,410

21. Deferred tax

The Group	Temporary differences between accounting and tax base of PPE and intangibles (note i) US\$	Tax losses (note ii) US\$	Other temporary differences (note iii) US\$	Total US\$
Credit/(debit) balance on 1 January 2019	457	(395)	(161)	(99)
Deferred tax (charge)/credit for the year	(68)	395	90	417
Exchange difference on retranslation	(20)	-	(14)	(34)
Credit/(debit) balance on 31 December 2019	369	-	(85)	284
Deferred tax charge for the year	(338)	-	(94)	(431)
Exchange difference on retranslation	(10)	-	(2)	(13)
Credit/(debit) balance on 31 December 2020	21	-	(181)	(160)

The Company	Temporary differences between accounting and tax base of PPE and intangibles (note i) US\$	Tax losses (note ii) US\$	Other temporary differences (note iii) US\$	Total US\$
Credit/(debit) balance on 1 January 2019 Deferred tax (credit)/charge for the year Credit balance on 31 December 2019 Deferred tax charge for the year	275 (35)	(217) 217	(26) 26	32 208
	240 (8)	- -	- -	240 (8)
Credit balance on 31 December 2020	232	-	-	232

NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020

(in thousands of US\$)

21. Deferred tax (continued)

Note (i)

The Group and the Company

The deferred tax liability relates to excess of capital allowances over depreciation and amortization.

Note (ii)

The Group

The deferred tax asset arises from the tax losses that can be carried forward and setoff against the first available taxable profits of the Group companies subject to the carry forward of losses restrictions stipulated in the relevant laws of the country of each relevant subsidiary.

The Company

The deferred tax asset arises from the tax losses that can be carried forward and set-off against the first available taxable profits of the Company.

In accordance with the Cyprus tax legislation, tax losses can be carried forward for 5 years.

Note (iii)

The Group and the Company

Other temporary differences relate mainly to different accounting bases between treatment in accordance with IFRSs and treatment in accordance with local tax standards and mainly consist of the tax effect of unrealized profits/losses on revaluation of working capital and of different treatment in valuing inventory.

Note (iv)

Deferred tax assets and liabilities are offset when there is a legally unforeseeable right to set-off current tax assets against current tax liabilities and when the deferred taxes relate to the same fiscal authority.

	The Group		The Company
	2020 US\$	2019 US\$	2020 US\$	2019 US\$
Deferred tax assets	(466)	(227)	-	-
Deferred tax liabilities	306	511	232	240
Net deferred tax (assets)/liabilities	(160)	284	232	240

22. Other current liabilities

	The Group		The Company
	2020 US\$	2019 US\$	2020 US\$	2019 US\$
Salaries payable and related costs	3,103	2,406	518	289
VAT payable	9,413	6,332	8	-
Provision for warranties	5,903	4,573	4,117	3,466
Accruals, deferred income and other provisions	56,041	31,408	33,038	18,057
Provision for marketing	11,935	8,973	9,178	7,174
Amount payable to subsidiary companies (Note 28)	-	-	4,045	20,364
Non-trade accounts payable	5,974	5,344	1,642	1,369
	92.369	59,036	52,546	50,719

NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020 (in thousands of US\$)

23. Trade payables and prepayments

	The Group		The Company
	2020 US\$	2019 US\$	2020 US\$	2019 US\$
Trade payables Prepayments from customers	312,066 23,944	298,991 22,286	251,244 18,747	238,337 17,691
	336,010	321,277	269,991	256,028

24. Operating segments

The Group

1.1 Segment information

The Group mainly operates in a single industry segment as a distributor of IT products. Information reported to the chief operating decision maker for the purposes of allocating resources to the segments and to assess their performance is based on geographical locations. The Group operates in four principal geographical areas – Former Soviet Union, Eastern Europe, Western Europe and Middle East & Africa.

There are varying levels of integration between the segments and includes distribution of IT products and services. Inter-segment pricing is determined on an arm's length basis.

1.2 Segment revenues and results

	Segment revenue 2020 US\$	2019 US\$	Segment operating profit 2020 US\$	2019 US\$
Former Soviet Union Central Eastern Europe Middle East & Africa Western Europe Other Total	1,289,513 574,389 279,419 171,104 52,016 2,366,441	1,024,436 505,974 217,855 127,464 39,152 1,914,881	29,275 14,500 7,016 3,354 2,528 56,673	16,411 9,839 3,980 2121 735 33,086
Net financial expenses Other gains and losses Negative goodwill and goodwill written off, net Share of profit/(loss) from equity-accounted investees			(12,389) 6 - 377	(14,174) (33) 111 (25)
Profit before taxation			44,667	18,965

NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020

(in thousands of US\$)

24. Operating segments (continued)

1.3 Segment capital expenditure (CAPEX) and depreciation & amortization

The following is an analysis of the Group's capital expenditure in both tangible and intangible assets as well as their corresponding charges in the income statement:

		Segment CAPEX		Segment depreciation and amortization
	2020 US\$	2019 US\$	2020 US\$	2019 US\$
Former Soviet Union	8,491	7,794	1,488	1,198
Central Eastern Europe	14,943	12,946	1,169	1,048
Middle East & Africa	3,745	3,318	199	215
Unallocated	8,596	8,806	1,531	1,570
	35,775	32,864	4,387	4,031

1.4 Segment assets and liabilities

Segment assets	2020 US\$	2019 US\$
Former Soviet Union	453,802	366,466
Central Eastern Europe	69,654	91,037
Middle East & Africa	65,653	45,356
Western Europe	125,934	74,246
Total	715,043	577,105
Assets allocated in capital expenditure (1.3)	35,775	32,864
Other unallocated assets	38,093	22,819
Consolidated assets	788,911	632,788

For the purposes of monitoring segment performance and allocating resources between segments only assets were allocated to the reportable segments. As the Group liabilities are mainly used jointly by the reportable segments, these were not allocated to each segment.

1.5 Geographical information

Since the Group's operating segments are based on geographical location and this information has been provided above (1.2 – 1.4) no further analysis is included.

1.6. Information about major customers

During 2020 (same for 2019) none of the Group's customers accounted for more than 3% of total sales; it is of strategic importance for the Group not to rely on any single customer.

25. Derivative financial liabilities

	The Group		The Company
	2020 US\$	2019 US\$	2020 US\$	2019 US\$
Derivative financial liabilities carried at fair value through profit or loss
Foreign currency derivative contracts	883	2,082	613	1,977

NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020 (in thousands of US\$)

25. Derivative financial liabilities (continued)

Fair value measurement of derivative financial liabilities

The Group	Nominal amount	Nominal amount	Fair value	Fair value
	2020	2019	2020	2019
	US\$	US\$	US\$	US\$
Buying US\$/Selling EUR	-	24,330	-	(240)
Buying US\$/Selling PLN	329	3,303	(1)	(37)
Buying US\$/Selling RON	2,400	2,062	(34)	(22)
Buying US\$/Selling RUB	7,660	10,210	(306)	(515)
Buying US\$/Selling KZT	-	3,000	-	(94)
Buying US\$/Selling GBP	-	126	-	(2)
Buying US\$/Selling CZK	4,000	3,280	(80)	(35)
Buying US\$/Selling UAH	884	3,500	(220)	(4)
Buying US\$/Selling BGN	-	275	-	(3)
Buying US\$/Selling BYN	-	2,105	-	(12)
Buying EUR/Selling US\$	3,145	-	(72)	-
Buying EUR/Selling CZK	-	1,110	-	(2)
Buying EUR/Selling HRK	-	-	-	(2)
Buying GBP/Selling US\$	305	-	(12)	-
Charges on open contracts	-	-	(158)	(1,114)
	18,723	53,301	(883)	(2,082)

The Company

	Nominal amount	Nominal amount	Fair value	Fair value
	2020 US\$	2019 US\$	2020 US\$	2019 US\$
Buying US\$/Selling PLN	329	3,303	(1)	(37)
Buying US\$/Selling RUB	7,660	10,210	(306)	(515)
Buying US\$/Selling CZK	4,000	3,280	(80)	(35)
Buying US\$/Selling EUR	-	24,330	-	(240)
Buying US\$/Selling KZT	-	1,500	-	(73)
Buying US\$/Selling RON	2,400	2,062	(34)	(22)
Buying US\$/Selling GBP	-	126	-	(2)
Buying EUR/Selling US\$	3,145	-	(72)	-
Buying EUR/Selling CZK	-	1,110	-	(2)
Buying GBP/Selling US\$	305	-	(12)	-
Charges on open contracts	-	-	(108)	(1,051)
	17,839	45,921	(613)	(1,977)

(i) The Group and the Company enter into currency derivative contracts, namely forward and future currency derivatives, as part of their overall hedging strategy in order to minimize the exposure to foreign currency fluctuations.

(ii) A foreign currency forward derivative contract is a contractual agreement between two parties to exchange two currencies at a given exchange rate at some point in the future. The fair value of the derivative can be either positive (asset) or negative (liability) as a result of fluctuations in the forward exchange rates.

(iii) A foreign currency future derivative contract is a contractual agreement between two parties to buy or sell currency at a predetermined price in the future. The fair value of the derivative can be either positive (asset) or negative (liability) as a result of fluctuations in the period end exchange rate.

NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020

(in thousands of US\$)

25. Derivative financial liabilities (continued)

(iv) During the year the Group realized a loss from execution of foreign currency derivative contracts of US\$ 1,644 (2019: loss of US\$ 865) and the Company realized a gain of US\$ 1,826 (2019: gain of US\$ 313).

26. Derivative financial assets

	The Group		The Company
	2020 US\$	2019 US\$	2020 US\$	2019 US\$
Derivative financial assets carried at fair value through profit or loss
Foreign currency derivative contracts	199	945	164	915
The Group	Nominal amount 2020 US\$	Nominal amount 2019 US\$	Fair value 2020 US\$	Fair value 2019 US\$
Buying US\$/Selling RUB	308	-	148	-
Buying US\$/Selling EUR	-	2,387	-	28
Buying US\$/Selling RON	50	-	7	-
Buying US\$/Selling BGN	6	415	6	5
Buying US\$/Selling HRK	1,410	1,190	30	24
Buying US\$/Selling PLN	5,387	-	106	-
Buying EUR/Selling HRK	-	263	-	1
Buying EUR/Selling US\$	861	-	3	-
Buying EUR/Selling CZK	-	507	-	5
Charges on open contracts	-	-	(101)	882
	8,022	4,762	199	945

The Company	Nominal amount 2020 US\$	Nominal amount 2019 US\$	Fair value 2020 US\$	Fair value 2019 US\$
Buying US\$/Selling EUR	-	2,387	-	28
Buying US\$/Selling PLN	5,387	-	106	-
Buying US\$/Selling RUB	308	-	148	-
Buying US\$/Selling RON	50	-	7	-
Buying US\$/Selling CZK	-	-	-	5
Buying EUR/Selling US\$	861	-	3	-
Buying EUR/Selling CZK	-	507	-	-
Charges on open contracts	-	-	(100)	882
	6,606	2,894	164	915

Fair value measurement of derivative financial assets

(i) The Group and the Company enter into currency derivative contracts, namely forward and future currency derivatives, as part of their overall hedging strategy in order to minimize the exposure to foreign currency fluctuations.

(ii) A foreign currency forward derivative contract is a contractual agreement between two parties to exchange two currencies at a given exchange rate at some point in the future. The fair value of the derivative can be either positive (asset) or negative (liability) as a result of fluctuations in the forward exchange rates.

NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020

(in thousands of US\$)

26. Derivative financial assets (continued)

(iii) A foreign currency future derivative contract is a contractual agreement between two parties to buy or sell currency at a predetermined price in the future. The fair value of the derivative can be either positive (asset) or negative (liability) as a result of fluctuations in the period end exchange rate.

(iv) During the year the Group realized a loss from execution of foreign currency derivative contracts of US\$ 1,644 (2019: loss of US\$ 865) and the Company realized a gain of US\$ 1,826 (2019: gain of US\$ 313).

27. Cash and cash equivalents

	The Group		The Company
	2020 US\$	2019 US\$	2020 US\$	2019 US\$
Cash at bank and in hand	158,898	103,687	118,065	73,346
Bank overdrafts (Note 17)	(45,215)	(25,380)	(1,675)	(1,178)
	113,683	78,307	116,390	72,168

The Group

The cash at bank and in hand balance includes an amount of US\$ 33,322 (31 December 2019: US\$ 27,485) which represents pledged deposits against financial facilities granted and margin accounts for foreign exchange hedging.

The Company

The cash at bank and in hand balance includes an amount of US\$ 29,660 (2019: US\$ 25,228) which represents pledged deposits.

28. Related party transactions and balances

Main shareholders

The following table presents shareholders possessing directly or indirectly more than 5% of the Company's shares and shares held by the Company under the share buyback program as at 31 December 2020:

Name	Number of votes/shares	Votes/share capital %
Siarhei Kostevitch and KS Holdings Ltd	20,443,127	36.83
Asbisc Enterprises Plc (share buyback program)	325,389	0.59
Free float	34,731,484	62.58
	55,500,000	100.00

Transactions and balances between the Company and its subsidiaries have been eliminated on consolidation.

The Company

In the normal course of business, the Company undertook during the year transactions with its subsidiary companies and had year end balances as follows:

NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020 (in thousands of US\$)

28. Related party transactions and balances (continued)

Intercompany (trading) transactions

		Sales of goods		Purchases of goods
	2020 US\$	2019 US\$	2020 US\$	2019 US\$
Subsidiaries	1,371,781	885,990	45,489	39,108
	Sales of services		Purchases of services
	2020	2019	2020	2019
	US\$	US\$	US\$	US\$
Subsidiaries	435	384	9,939	9,392

Intercompany (trading) balances

	Amounts owed by subsidiary companies		Amounts owed to subsidiary companies
	2020 US\$	2019 US\$	2020 US\$	2019 US\$
Subsidiaries	162,600	98,860	4,045	20,364

Loans to subsidiary companies	2020 US\$	2019 US\$
Loans to subsidiary companies (Note 15)	10,092	7,337

The total loans to subsidiary companies before provision for doubtful loans are unsecured and analyzed below:

Subsidiary companies	Interest rate %	Source currency	2020 US\$	2019 US\$
ALC Avectis (iii)	4	US Dollar	-	514
ASBC LLC (Georgia) (iv)	7.5	US Dollar	-	42
ASBIS SK spol. S.r.o (ii)	0	US Dollar	9,000	5,672
CJSC ASBIS (i)	4	US Dollar	1,092	1,109
			10,092	7,337

The total interest received from subsidiary companies is analyzed below:

2020	2019
US\$	US\$
7	18
1	1
42	42
50	61

NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020

(in thousands of US\$)

28. Related party transactions and balances (continued)

• (i) CJSC ASBIS entered into a loan agreement with the Company on the 24th of November 2014, with the obligation to settle the loan by 22nd of October 2022. The loan is unsecured.
• (ii) ASBIS SK spol. S.r.o entered into a loan agreement with the Company on 22nd of December 2020, with the obligation to settle the loan by the 5th of January 2021. The loan is unsecured.
• (iii) ALC Avectis entered into a loan agreement with the Company on the 7th of March 2019, with the obligation to settle the loan by the 15th of January 2020. The loan has been settled.
• (iv) ASBC LLC (Georgia) entered into a loan agreement with the Company on the 1st of July 2019, with the obligation to settle the loan by the 1st of January 2020. The loan has been settled.

Financial guarantees liabilities

	2020 US\$	2019 US\$
Financial guarantee liabilities granted to subsidiaries	964	-

The Company provides free of charge financial guarantee services to its subsidiaries (note 35). The Company accounted for such financial guarantees as for financial guarantee contracts in accordance with IFRS 9. Financial guarantee facilities of subsidiaries are mainly presented by overdrafts and factoring contracts, thus financial guarantee liability recognized in short-term.

Transactions and balances of key management

	The Group		The Company
	2020 US\$	2019 US\$	2020 US\$	2019 US\$
Directors' remuneration and benefits - executive	1,047	654	1,047	654
Directors' remuneration - non-executive	28	23	28	23
Key management remuneration
In capacity as other key management personnel	1,143	829	86	65
Employer's contributions - provident fund	4	22	2	22
Employer's contributions - social insurance and
other benefits	132	158	10	56
	2,354	1,686	1,173	820

Share-based payment arrangements

Following an extraordinary general meeting of the shareholders on the 15th July 2019, a share buyback program with the following conditions was approved:

At 31 December 2020, the Group had the following share-based payment arrangement.

Share option program (equity-settled)

• the maximum amount of money that can be used to realize the program is US\$ 300,000
• the maximum number of shares that can be bought within the program is 500,000 shares
• the program's time frame is 12 months from the resolution's date
• the shares purchased within the program could be held for a maximum of two years from acquisition
• the minimum price for transaction of purchase of shares within the program is PLN 1.5 per share with the maximum price of PLN 3.0 per share

NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020

(in thousands of US\$)

28. Related party transactions and balances (continued)

At the end of 2020 the Company held a total of 325,389 (2019: 274,389) shares purchased for a total consideration of US\$ 211 (2019: US\$ 176)

	The Group		The Company
	2020 US\$	2019 US\$	2020 US\$	2019 US\$
Salaries and other benefits	52,610	43,396	7,773	5,743
The average number of employees for the year was	1,837	1,594	150	136

29. Commitments and contingencies

The Group

As at 31 December 2020 the Group was committed in respect of purchases of inventories of a total cost value of US\$ 35,109 (2019: US\$ 12,684) which were in transit at 31 December 2020 and delivered in January 2021. Such inventories and the corresponding liability towards the suppliers have not been included in these financial statements since, according to the terms of purchase, title of the goods has not passed to the Group at year end.

As at 31 December 2020 the Group was contingently liable to banks in respect of bank guarantees and letters of credit lines of US\$ 52,183 (2019: US\$ 41,266) which the Group has extended to its suppliers and other counterparties.

As at the 31st December 2020 the Group had no other capital or legal commitments and contingencies.

The Company

As at 31 December 2020 the Company was committed in respect of purchases of inventories of a total cost value of US\$ 35,109 (2019: US\$ 12,684) which were in transit at 31 December 2020 and delivered in January 2021. Such inventories and the corresponding liability towards the suppliers have not been included in these financial statements since, according to the terms of purchase, title of the goods has not passed to the Group at year end.

As at 31 December 2020, the Company was contingently liable to banks in respect of bank guarantees and letters of credit of US\$ 49,118 (2019: US\$39,212) which the Company has extended to its suppliers and other counterparties.

The liabilities towards the Company's suppliers covered by these guarantees are reflected in the financial statements under trade payables.

In addition, the Company has issued corporate guarantees to banks in respect of financing facilities extended to its subsidiaries in the amount of US\$ 200,315 (2019: US\$ 188,744).

30. Earnings per share

	2020 US\$	2019 US\$
Profit for the year attributable to members	36,515	15,257
Weighted average number of shares for the purposes of basic and diluted earnings per share	55,200,111	55,396,528
Basic and diluted earnings per share	US\$ cents 66,15	US\$ cents 27.54

NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020

(in thousands of US\$)

31. Business combinations

The Group

1. Acquisitions

1.1 Acquisitions of subsidiaries to 31 December 2020

During the period, the Group has acquired 55% of the share capital of Real Scientists Ltd, 70% of the share capital of I.O.N Clinical Trading Ltd, 85% of the share capital of R.SC. Real Scientists Cyprus Ltd and 100% of share capital of ASBIS IT Solutions Hungary Kft, MakSolutions LLC, Café-Connect LLC, TOO "ASNEW" and Breezy Ltd by means of the entity's incorporation.

Name of entity	Type of operations	Date acquired	% acquired	% owned
Real Scientists Ltd	Information Technology	16 March 2020	55%	55%
ASBIS IT Solutions Hungary Kft	Information Technology	2 September 2020	100%	100%
MakSolutions LLC	Information Technology	10 September 2020	100%	100%
Café-Connect LLC	Information Technology	10 September 2020	100%	100%
TOO "ASNEW"	Information Technology	11 November 2020	100%	100%
Breezy Ltd	Information Technology	24 October 2020	100%	100%
I.O.N Clinical Trading Ltd	Information Technology	2 October 2020	70%	70%
R.SC. Real Scientists Cyprus Ltd	Information Technology	2 October 2020	85%	85%

Acquisitions of subsidiaries to 31 December 2019

During the year, the Group has acquired 75% of the share capital of Vizuatika LLC and Vizuators LLC, the remaining 60% of the share capital of ASBC LLC and 100% of share capital of OOO Aksiomtech, OOO IT Training, OOO Must, ALC Avectis and Center of excellence in Education for executives and specialists in Information Technology.

Name of entity	Type of operations	Date acquired	% acquired	% owned
Vizuatika LLC	Information Technology	28 March 2019	75%	75%
Vizuators LLC	Information Technology	28 March 2019	75%	75%
ALC Avectis	Information Technology	12 July 2019	100%	100%
ASBC LLC	Information Technology	31 July 2019	60%	100%
OOO Avectis (former OOO Aksiomtech) Information Technology		12 July 2019	100%	100%
OOO IT Training	Educational and training Services	7 August 2019	100%	100%
Center of excellence in Education for
executives and specialists in
Information Technology	Educational Institution	7 August 2019	100%	100%
OOO Must	Information Technology	30 August 2019	100%	100%

NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020

(in thousands of US\$)

31. Business combinations (continued)

1.a. Acquired assets and liabilities

The net carrying value of underlying separately identifiable assets and liabilities transferred to the group at the date of acquisition was as follows:

	As at 31 December 2020 US\$	As at 31 December 2019 US\$
Tangible and intangible assets	233	504
Inventories	200	12,670
Receivables	71	13,289
Other non-current assets	15	31
Other receivables	1	3,333
Short-term loans	(15)	(3,080)
Payables	(321)	(2,721)
Other payables and accruals	(135)	(24,142)
Other non-current liabilities	-	(1)
Cash and cash equivalents	102	558
Net identifiable assets	151	441
Share of loss previously recognized as investment in associate	-	48
Group's interest in net assets acquired	151	489
Impairment of investment in associate on the acquisition	-	152
Total purchase consideration	(190)	(1,045)
Net loss	(39)	(404)
Negative goodwill credited in income statement	-	(111)
Impairment loss on Goodwill	39	141
Goodwill capitalized in statement of financial position	-	(374)

1.2. Goodwill arising on acquisitions

	2020 US\$	2019 US\$
At 1 January	591	400
Additions	39	515
Impairment loss (ii)	(39)	(315)
Foreign exchange difference on retranslation	38	(9)
At 31 December (i)	629	591

(i) The capitalized goodwill arose from the business combinations of the following subsidiaries:

	2020 US\$	2019 US\$
OOO Must	201	201
ASBIS d.o.o. (BA)	428	390
	629	591

NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020 (in thousands of US\$)

31. Business combinations (continued)

(ii) The impairment loss on goodwill relates to the following cash generating units and subsidiaries:

	2020 US\$	2019 US\$
Vizuatika LLC	-	(13)
Vizuators LLC	-	(1)
OOO IT Training	-	(4)
OOO Aksiomtech	-	(123)
ASBC LLC	-	(174)
Café-Connect LLC	12	-
MakSolutions LLC	27	-
	(39)	(315)

1.3. Impairment testing

For ASBIS d.o.o. (BA) and OOO Must, a detailed impairment analysis was performed and based on the results it has been concluded that no impairment is required.

2. Disposals

Disposals of subsidiaries to 31 December 2020

During the period the following Group's subsidiaries went into liquidation. No gain or loss arose on the event.

Name of disposed entity	Type of operations	Date liquidated	% liquidated
Shark Computers a.s.	Information Technology	20 November 2020	100%

Disposals of subsidiaries to 31 December 2019

During the period the following Group's subsidiaries went into liquidation. No gain or loss arose on the event.

Name of disposed entity	Type of operations	Date liquidated	% liquidated
Asbis Limited	Information Technology	25 January 2019	100%
ASBIS Cloud Ltd	Information Technology	12 July 2019	100%
OOO IT Training	Information Technology	27 November 2019	100%

NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020

(in thousands of US\$)

32. Financial risk management

1. Financial risk factors

In this note, references to the Group also relate to the Company.

The Group's activities expose it to credit risk, interest rate risk, liquidity risk and currency risk arising from the financial instruments it holds. The risk management policies employed by the Group to manage these risks are discussed below:

1.1. Credit risk

Credit risk is defined as the risk of failure of debtors to discharge their obligations towards the Group. The Group sets up and maintains specific controls to mitigate its credit risk, as it realizes its importance for the Group's viability.

The Group had established and systematically follows a thorough procedure prior to registering new customers into its system. Every new customer is checked both internally and via various reputable credit sources prior to such registration and, more importantly, prior to granting of any credit. The Group runs an internal credit department consisting of local, regional and corporate credit managers. Corporate managers decide for all significant credit line requests and review the work of regional and local managers. The Group uses all available credit tools – i.e. credit insurance, credit information bureaus, letter of guarantee – to safeguard itself from the credit risk. We have insured the majority of our receivables during 2020.

During 2020 none of the Group's customers accounted individually for more than 2.2% (2019: 3%) of total sales; it is of strategic importance for the Group not to rely on any single customer.

Ongoing credit evaluation is performed on the financial condition of accounts receivable and, where appropriate, credit insurance is purchased. The credit risk on liquid funds and derivative financial instruments is determined by the credit ratings assigned to the financial institutions with which these funds are held.

The aging profile of trade receivables is disclosed in note 14.

The tables below show an analysis of the Group's and Company's bank deposits at year end by credit rating of the bank in which they are held:

The Group 2020 2019 Based on credit ratings by Moody's; the cash at banks the Group held as at year end are: US\$ US\$ Aa1 - 500 Aa2 - 568 Aa3 2,632 51 A1 50,517 29,963 A2 30,100 23,579 A3 20,442 7,454 Baa1 939 7,124 Baa2 - 1 Baa3 1,024 2,449 Ba1 22 23 Ba2 920 3,943 Ba3 - 2,825 B1 24,538 35 B2 812 1,583 B3 - 15,508 Caa1 - 1,062 Without credit rating 26,952 7,019 158,898 103,687

NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020 (in thousands of US\$)

32. Financial risk management (continued)

The Company

	2020	2019
Based on credit ratings by Moody's; the cash at banks the Company held as at year	US\$	US\$
end are:
Aa1	-	500
Aa2	-	205
A1	50,476	27,416
A2	29,793	21,281
A3	7,439	5,032
Ba2	-	209
B3	-	15,466
B1	24,087	-
Caa1	-	1,006
Without credit rating	6,270	2,231
	118,065	73,346

Impairment on cash and cash equivalents has been measured on a twelve-month expected loss basis and reflects short maturities of the exposures. The Group and the Company considers that its cash and cash equivalents have low credit risk based on the external credit ratings of the counterparties and there is no material impact on the Group's and Company's financial statements.

Trade receivables and contract assets

Expected credit loss assessment based on collective model net of specific provision as at 31 December 2020

The Group

	Default rate %	Gross carrying amount US\$	Loss allowance US\$
Outstanding but not due yet	0.02	260,343	57
Overdue between 1-30 days	0.03	17,916	6
Overdue between 30-60 days	0.20	1,899	4
Overdue more than 60 days	0.40	13,848	55
		294,006	122

The Company

	Default rate %	Gross carrying amount US\$	Loss allowance US\$
Outstanding but not due yet	0.00	170,780	3
Overdue between 1-30 days	0.01	14,771	1
Overdue between 30-60 days	0.01	4,974	1
Overdue more than 60 days	0.05	16,551	9
		207,076	14

Loss rates are based on actual credit loss experience over the past four years.

NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020

(in thousands of US\$)

32. Financial risk management (continued)

1.2. Interest rate risk

Interest rate risk is the risk that the value of financial instruments will fluctuate due to changes in market interest rates. The Group's income and operating cash flows are dependent on changes in market interest rates. The Group deposits excess cash and borrows at variable rates. The Group's management monitor the interest rate fluctuations on a continuous basis and act accordingly.

		The Group		The Company
	2020 US\$	2019 US\$	2020 US\$	2019 US\$
Variable rate instruments
Overdrafts	45,215	25,380	1,675	1,178
Short-term loans	34,317	26,266	-	-
Long-term loans	523	35	-	-
Factoring advances	80,057	54,199	13,035	8,403
	160,112	105,880	14,710	9,581

At the reporting date the profile of interest-bearing financial instruments was:

Sensitivity analysis

An increase of 100 basis points in interest rates at 31 December 2020 would have decreased by the amounts shown below. This analysis assumes that all other variables, in particular foreign currency rates, remain constant, as well as it assumes that financial facilities outstanding at the end of the reporting period were also outstanding for the whole year. For a decrease of 100 basis points there would be an equal and opposite impact on the profit and loss.

	Profit & loss
		The Group		The Company
	2020 US\$	2019 US\$	2020 US\$	2019 US\$
Variable rate instruments
Overdrafts	452	254	17	12
Short-term loans	343	263	-	-
Long-term loans	5	-	-	-
Factoring advances	801	542	130	84
	1,601	1,059	147	96

1.3. Liquidity risk

Liquidity risk is the risk that arises when the maturity of assets and liabilities does not match. An unmatched position potentially enhances profitability but can also increase the risk of losses. The Group has procedures with the object of minimizing such losses such as maintaining sufficient cash and other highly liquid current assets and by having available an adequate amount of committed credit facilities.

The following tables detail the remaining contractual maturity for financial liabilities. The tables have been drawn up based on the earliest date on which the Group/Company can be required to pay and include only principal cash flows.

NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020 (in thousands of US\$)

32. Financial risk management (continued)

The Group

31 December 2020	Carrying amounts US\$	Contractual cash flows US\$	3 months or less US\$	3-12 months US\$	1-2 years US\$	2-5 years US\$
Bank loans	34,840	34,840	18,762	15,555	414	109
Bank overdrafts	45,215	45,215	7,637	37,578	-	-
Factoring advances	80,057	80,057	80,057	-	-	-
Lease liabilities	6,579	6,579	385	988	1,692	3,514
Trade and other payables Other short and long-term	484,663	484,663	472,356	12,307	-	-
liabilities	1,615	1,615	883	-	1	731
	652,968	652,968	580,080	66,428	2,106	4,354

31 December 2019	Carrying amounts	Contractual cash flows	3 months or less	3-12 months	1-2 years	2-5 years
	US\$	US\$	US\$	US\$	US\$	US\$
Bank loans	26,300	26,300	19,933	6,332	35	-
Bank overdrafts	25,380	25,380	4,768	20,613	-	-
Factoring advances	54,199	54,199	52,424	1,775	-	-
Lease liabilities	4,632	4,632	260	1,069	1,400	1,903
Trade and other payables Other short and long-term	410,853	410,853	407,952	2,901	-	-
liabilities	2,717	2,717	2,082	-	-	635
	524,081	524,081	487,419	32,690	1.435	2.538

The Company

	Carrying	Contractual 3 months or		3-12
31 December 2020	amounts US\$	cash flows US\$	less US\$	months US\$	1-2 years US\$	2-5 years US\$
Bank loans	-	-	-	-	-	-
Bank overdrafts	1,675	1,675	1,675	-	-	-
Factoring advances	13,035	13,035	13,035	-	-	-
Lease liabilities	1,234	1,234	69	278	375	512
Trade and other payables Other short and long-term	377,203	377,203	377,203	-	-	-
liabilities	613	613	613	-	-	-
	393,760	393,760	392,595	278	375	512

31 December 2019	Carrying amounts US\$	Contractual cash flows US\$	3 months or less US\$	3-12 months US\$	1-2 years US\$	2-5 years US\$
Bank loans	-	-	-	-	-	-
Bank overdrafts	1,178	1,178	1,178	-	-	-
Factoring advances	8.403	8.403	8.403	-	-	-
Lease liabilities	1,410	1,410	83	248	508	571
Trade and other payables Other short and long-term	336,269	336,269	336,269	-	-	-
liabilities	1,978	1,978	1,978	-	-	-
	349,238	349,238	347,911	248	508	571

NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020

(in thousands of US\$)

32. Financial risk management (continued)

1.4. Currency risk

Currency risk is the risk that the value of financial instruments will fluctuate due to changes in foreign exchange rates. Currency risk arises when future commercial transactions and recognized assets and liabilities are denominated in a currency that is not the Group's/Company's measurement currency.

The Group uses short-term derivative financial instruments to minimize the risk on balances and material transactions denominated in currencies other than US Dollars, the Group's reporting currency. As a significant portion of the Group's cash flow is denominated in Russian Ruble, Euro and other local currencies (i.e. the Czech Crown, the Polish Zloty, the Hungarian Forint, etc.), the Group raises debt in such currencies in order to hedge against foreign exchange risk.

The carrying amounts of the monetary assets and monetary liabilities at the reporting date are denominated in the following currencies:

The Group

31 December 2020	Cash at bank and in hand	Receivables	Trade and other liabilities	Borrowings
	US\$	US\$	US\$	US\$
US Dollar	133,694	82,229	(338,183)	(15,166)
Euro	4,470	55,760	(56,890)	(39,196)
Russian Ruble	13	27,049	(10,367)	(17,828)
Polish Zloty	472	5,205	(2,067)	(949)
Czech Koruna	3,040	10,951	(2,368)	(10,072)
Belarusian Ruble	1,152	8,487	(3,483)	(9,067)
Croatian Kuna	3,832	1,860	(1,012)	(3,054)
Romanian New Lei	1,261	5,567	(1,277)	(1,664)
Bulgarian Lev	385	3,778	(1,541)	(1,998)
Hungarian Forint	571	600	(576)	(846)
Kazakhstan Tenge	1,454	55,043	(8,668)	(43,149)
Ukrainian Hryvnia	6,782	32,428	(6,351)	(14,600)
Bosnian Mark	266	4,552	(768)	(2,314)
United Arab Emirates Dirham	620	-	-	(4,125)
Other	886	3,205	(897)	(2,662)
	158,898	296,714	(434,448)	(166,690)

31 December 2019	Cash at bank and in hand	Receivables	Trade and other liabilities	Borrowings
	US\$	US\$	US\$	US\$
US Dollar	78,188	73,308	(312,985)	(9,889)
Euro	4,906	36,629	(41,126)	(21,144)
Russian Ruble	426	11,918	(11,114)	(5,895)
Polish Zloty	551	1,323	(76)	(582)
Czech Koruna	2,630	7,718	(1,866)	(6,616)
Belarusian Ruble	1,347	8,836	(2,824)	(6,583)
Croatian Kuna	2,064	2,016	(599)	(2,773)
Romanian New Lei	1,164	3,819	(977)	(2,112)
Bulgarian Lev	275	3,678	(972)	(2,943)
Hungarian Forint	592	1,223	(361)	(1,323)
Kazakhstan Tenge	2,418	32,239	(6,283)	(27,362)
Ukrainian Hryvnia	3,863	25,802	(3,908)	(15,308)
Bosnian Mark	124	3,163	(578)	(1,652)
United Arab Emirates Dirham	4,762	-	-	(4,807)
Other	377	2,264	(670)	(1,524)
	103,687	213,936	(384,339)	(110,513)

NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020 (in thousands of US\$)

32. Financial risk management (continued)

The Company

31 December 2020

31 December 2020			Trade and
	Cash at bank and in hand	Receivables	other liabilities	Borrowings
	US\$	US\$	US\$	US\$
US Dollar	114,996	211,717	(311,553)	(13,714)
Euro	1,997	7,188	(14,571)	(2,067)
Czech Koruna	767	-	(508)	-
Great British Pound	185	282	(12)	(163)
Polish Zloty	120	-	-	-
Other	-	155	(3)	-
	118,065	219,342	(326,647)	(15,944)

31 December 2019			Trade and
	Cash at bank and in hand	Receivables	other liabilities	Borrowings
	US\$	US\$	US\$	US\$
US Dollar	71,913	142,959	(301,077)	(9,100)
Euro	962	10,123	(6,038)	(1,841)
Czech Koruna	205	-	(217)	-
Great British Pound	109	71	(7)	(47)
Polish Zloty	157	-	-	(2)
Other	-	-	(1,929)	-
	73,346	153,153	(309,268)	(10,990)

The Company is not exposed to any material foreign exchange risk, as most of its operations are conducted in US Dollars, the Company's reporting currency. Any exposure to foreign exchange risk is restricted to monetary assets denominated in foreign currencies, mainly Euro, Polish Zloty and Russian Ruble, and this risk is mitigated by the appropriate use of currency derivative contracts.

2. Fair values

The Group and the Company

Financial instruments comprise financial assets and financial liabilities. Financial assets mainly consist of bank balances, receivables and investments. Financial liabilities mainly consist of trade payables, factoring balances, bank overdrafts and loans. The Directors consider that the carrying amount of the Company's/Group's financial instruments approximate their fair value at the reporting date. Financial assets and financial liabilities carried at fair value through profit or loss represent foreign currency derivative contracts categorized as a Level 2 (quoted prices (unadjusted) in active markets for identical assets or liabilities) fair value hierarchy.

3. Capital risk management

The Group manages its capital to ensure that entities in the Group will be able to continue as a going concern while maximizing the return to stakeholders through optimization of debt and equity. The Group's overall strategy remains unchanged from 2020.

The capital structure of the Group consists of debt, which includes borrowings, cash and cash equivalents and equity attributable to equity holders of the parent, comprising issued capital, reserves and retained earnings.

Gearing ratio

The Group's risk management committee reviews the capital structure on a semi-annual basis. As part of this review, the committee considers the cost of capital and the risk associated with it.

NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020

(in thousands of US\$)

32. Financial risk management (continued)

The Group

The gearing ratio at the year-end was as follows:

	2020 US\$	2019 US\$
Debt (i) Cash at bank and in hand	160,111 (158,898)	105,879 (103,687)
Net debt	1,213	2,192
Equity (ii)	135,638	108,195
Net debt to equity ratio	0.9%	2%

(i) Debt includes short-term (factoring advances, overdrafts and short-term loans) and long-term borrowings.

(ii) Equity includes all capital and reserves.

The Company

The gearing ratio at the year-end was as follows:

	2020 US\$	2019 US\$
Debt (i) Cash at bank and in hand Net debt	14,710 (118,065) (103,355)	9,581 (73,346) (63,765)
Equity (ii)	91,691	61,577

Net debt to equity ratio - -

• (i) Debt includes short-term (factoring advances, overdrafts and short-term loans) and long-term borrowings.
• (ii) Equity includes all capital and reserves.

4. Fair value estimation

The table below analyses financial instruments carried at fair value by valuation method. The different levels have been defined as follows:

• Quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1).
• Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices) (level 2).
• Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs) (level 3).

The following table presents the fair value hierarchy of the Group's and the Company's assets:

	The Group Level 2 US\$	The Company Level 2 US\$
Assets
Derivative financial assets	199	164
Liabilities
Derivative financial liabilities	883	613

NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020

(in thousands of US\$)

32. Financial risk management (continued)

The fair value of financial instruments that are not traded in an active market (for example, unlisted equity securities) is determined by using valuation techniques. These valuation techniques maximize the use of observable market data where it is available and rely as little as possible on entity specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.

33. Other risks

Operational risk

Operational risk is the risk that derives from the deficiencies relating to the Group's/Company's information technology and control systems as well as the risk of human error and natural disasters. The Group's/Company's systems are evaluated, maintained and upgraded continuously.

Compliance risk

Compliance risk is the risk of financial loss, including fines and other penalties, which arises from non-compliance with laws and regulations of the state. The risk is limited to a significant extent due to the supervision applied by the Compliance Officer, as well as by the monitoring controls applied by the Group/Company.

Litigation risk

Litigation risk is the risk of financial loss, interruption of the Group's operations or any other undesirable situation that arises from the possibility of non-execution or violation of legal contracts and consequentially of lawsuits. The risk is restricted through the contracts used by the Group/Company to execute its operations.

Reputation risk

The risk of loss of reputation arising from the negative publicity relating to the Group's/Company's operations (whether true or false) may result in a reduction of its clientele, reduction in revenue and legal cases against the Group. The Group/Company applies procedures to minimize this risk.

Other risks

The general economic environment may affect the Group's/Company's operations to a great extent. Concepts such as inflation, unemployment, and development of the gross domestic product are directly linked to the economic course of every country and any variation in these and the economic environment in general may create chain reactions in all areas hence affecting the Group/Company.

34. Dividends

Our dividend policy is to pay dividends at levels consistent with our growth and development plans, while maintaining a reasonable level of liquidity. During the year, the following dividends were declared and paid by the Company:

• A final dividend of US\$4,162,500 of US\$ 0.075 per share for the year 2019
• An interim dividend of US\$ 5,550,000 of US\$0.10 per share for the year 2020

The Board of Directors also proposes the payment of a final dividend of US\$ 0.20 per share for the year 2020, amounting to US\$ 11,100,000 based on improved 2020 profitability.