KORADO-BULGARIA AD
ANNUAL ACTIVITY REPORT
ANNUAL FINANCIAL STATEMENTS
31 December 2022
Financial statements in English are translation from the original in Bulgarian. This version of the financial statements is a
translation from the original, which was prepared in Bulgarian. All possible care has been taken to ensure that the
translation is an accurate representation of the original. However, in all matters of interpretation of information, views or
opinions, the original language version of the report takes precedence over this translation.
ANNUAL ACTIVITY REPORT
ANNUAL FINANCIAL STATEMENTS
31 December 2022
Financial statements in English are translation from the original in Bulgarian. This version of the financial statements is a
translation from the original, which was prepared in Bulgarian. All possible care has been taken to ensure that the
translation is an accurate representation of the original. However, in all matters of interpretation of information, views or
opinions, the original language version of the report takes precedence over this translation.
i
MANAGEMENT BOARD
Jiri Reznicek – Chairman of MB and Executive Director
Silviya Stefanova
Jana Havlova
SUPERVISORY BOARD
Tomas Kollert – chairman of SB
Eva Voborova
Ivan Lyaskov
Evelina Miltenova
AUDIT COMMITTEE
Sneznanka Kaloyanova
Martin Preisler
Irena Mihaylova
LEGAL CONSULTANTS
Ivan Asenov Lyaskov
Konechna and Zaha Legal Firm
REGISTERED AND MANAGEMENT ADDRESS
Town of Strazhitsa
28 Gladstone Street
REGISTRATION NUMBER
UIC 814190902
BANKERS
UBB
DSK Bank
AUDITOR
Deloitte Audit OOD
103, Alexander Stambolijski Blvd.
Sofia, 1303
MANAGEMENT BOARD
Jiri Reznicek – Chairman of MB and Executive Director
Silviya Stefanova
Jana Havlova
SUPERVISORY BOARD
Tomas Kollert – chairman of SB
Eva Voborova
Ivan Lyaskov
Evelina Miltenova
AUDIT COMMITTEE
Sneznanka Kaloyanova
Martin Preisler
Irena Mihaylova
LEGAL CONSULTANTS
Ivan Asenov Lyaskov
Konechna and Zaha Legal Firm
REGISTERED AND MANAGEMENT ADDRESS
Town of Strazhitsa
28 Gladstone Street
REGISTRATION NUMBER
UIC 814190902
BANKERS
UBB
DSK Bank
AUDITOR
Deloitte Audit OOD
103, Alexander Stambolijski Blvd.
Sofia, 1303
KORADO-BULGARIA AD
TABLE OF CONTENTS
31 December 2022
ii
Contents Page
Annual activity report iii-xxiii
Corporate governance statement xxiv-xxxiii
Remuneration report xxxiv-xli
Statement of comprehensive income 1
Statement of financial position 2
Statement of changes in equity 3
Statement of cash flows 4
Notes to the financial statements 5 - 35
Independent Auditor’s report
Declaration under art. 100m, para 4, p. 3 of the POSA
TABLE OF CONTENTS
31 December 2022
ii
Contents Page
Annual activity report iii-xxiii
Corporate governance statement xxiv-xxxiii
Remuneration report xxxiv-xli
Statement of comprehensive income 1
Statement of financial position 2
Statement of changes in equity 3
Statement of cash flows 4
Notes to the financial statements 5 - 35
Independent Auditor’s report
Declaration under art. 100m, para 4, p. 3 of the POSA
KORADO-BULGARIA AD
ANNUAL ACTIVITY REPORT
31 December 2022
iii
Dear Shareholders,
As a Chairman of the Management Board of KORADO-
Bulgaria AD (“The Company”) , I am pleased to announce
that despite the restrictions imposed due to the ongoing
military conflict between Russia and Ukraine, difficult
economic conditions and constantly rising prices
ofenergy, fuels and basic materials used in production,
influencing supplier-client business relations, KORADO-
Bulgaria AD ended 2022 with a profit after taxation in the
amount of BGN 4,382 thousand. We are glad that despite
the problems, the Company managed to achieve a positive
economic result.
In the future, we will only invest in those projects that
save costs, improve productivity, improve the lives of our employees or prevent technological downtime.
We optimized our costs as much as possible and sought favourable prices for raw materials for our production.
I would like to thank the entire management team of the Company, all employees and workers who, with their
energy and high professionalism, made our Company reliable for our partners and made it possible to meet the
expectations of our shareholders by fulfilling another successful year.
ENG. JIRI REZNICEK
Chairman of MB and Executive Director of
KORADO-BULGARIA AD
ANNUAL ACTIVITY REPORT
31 December 2022
iii
Dear Shareholders,
As a Chairman of the Management Board of KORADO-
Bulgaria AD (“The Company”) , I am pleased to announce
that despite the restrictions imposed due to the ongoing
military conflict between Russia and Ukraine, difficult
economic conditions and constantly rising prices
ofenergy, fuels and basic materials used in production,
influencing supplier-client business relations, KORADO-
Bulgaria AD ended 2022 with a profit after taxation in the
amount of BGN 4,382 thousand. We are glad that despite
the problems, the Company managed to achieve a positive
economic result.
In the future, we will only invest in those projects that
save costs, improve productivity, improve the lives of our employees or prevent technological downtime.
We optimized our costs as much as possible and sought favourable prices for raw materials for our production.
I would like to thank the entire management team of the Company, all employees and workers who, with their
energy and high professionalism, made our Company reliable for our partners and made it possible to meet the
expectations of our shareholders by fulfilling another successful year.
ENG. JIRI REZNICEK
Chairman of MB and Executive Director of
KORADO-BULGARIA AD
KORADO-BULGARIA AD
ACTIVITY REPORT (CONTINUED)
For the year ended 31 December 2022
iv
Management of KORADO-Bulgaria AD (“The Company”) presents the annual activity report and annual
financial statements as of 31 December 2022 prepared in accordance with International Financial Reporting
Standards (IFRS) as adopted for use in the European Union.
THIS MANAGEMENT REPORT HAS BEEN PREPARED IN ACCORDANCE WITH THE
PROVISIONS OF ART. 39 AND THE FOLLOWING OF THE ACCOUNTANCY ACT, ART. 100m,
PARA 7 OF THE LAW ON THE PUBLIC OFFERING OF SECURITIESACT AND ANNEXES 2 AND 3
OF ORDINANCE No. 2 OF 09.11.2021 ON INITIAL AND SUBSEQUENT DISCLOSURE OF
INFORMATION IN PUBLIC OFFERING OF SECURITIES AND ADMISSION OF SECURITIES TO
TRADING ON A REGULATED MARKET
DESCRIPTION OF THE ACTIVITY
KORADO-Bulgaria AD is registered with the Commercial Register at the Registry Agency under Unified
Identification Code (UIC) 814190902, incorporated and domiciled at its registered address in the Republic of
Bulgaria, VelikoTarnovo Region, Strazhitsa Municipality 5150, Strazhitsa town, 28 Gladstone Street.
The main scope of activity of the Company includes: manufacture and sale of heating equipment, domestic and
foreign trade in all their varieties, domestic and international transport, representation and agency. The Company
may perform also any other types of activities not prohibited by the laws of the Republic of Bulgaria.
The Company has no branches registered in the country and abroad.
Since 1994, the Company has been manufacturing primarily steel water heating panel radiators. The traditional
brand KORADO is perceived as a good product of European quality.
In 2022, the Company’s clients are mostly from the European market. The biggest share of sales is targeted to
KORADO a.s. Czech Republic (the „parent company” ).
The main suppliers of materials to the Company in 2022 were: Balkan Steel Engineering Sofia, Liberti Galati
Romania, Huss Ltd. Lom, Husung Corporation Korea, Bemas Metal Turkey, Comital Turkey, Borcelik Turkey,
CommitalTurkey, FreiLacke Germany and CWS Germany.
The Company does not depend on its suppliers, as it is able to choose among numerous companies because of
prices offered, quality and methods of payment.
RESEARCH AND DEVELOPMENT ACTIVITIES
In the area of research and development activity, the most important part is the continuing fruitful collaboration
with the parent company. The project completed, directed towards reducing the costs of maintenance and
improving the production efficiency and quality and satisfying the customer’s requirements towards the products
manufactured, is a good example of that collaboration.
The project aiming at replacing materials supplied by the parent the Company with Bulgarian supplies
continued. Successes and positive results had been achieved in this area.
ACTIVITY REPORT (CONTINUED)
For the year ended 31 December 2022
iv
Management of KORADO-Bulgaria AD (“The Company”) presents the annual activity report and annual
financial statements as of 31 December 2022 prepared in accordance with International Financial Reporting
Standards (IFRS) as adopted for use in the European Union.
THIS MANAGEMENT REPORT HAS BEEN PREPARED IN ACCORDANCE WITH THE
PROVISIONS OF ART. 39 AND THE FOLLOWING OF THE ACCOUNTANCY ACT, ART. 100m,
PARA 7 OF THE LAW ON THE PUBLIC OFFERING OF SECURITIESACT AND ANNEXES 2 AND 3
OF ORDINANCE No. 2 OF 09.11.2021 ON INITIAL AND SUBSEQUENT DISCLOSURE OF
INFORMATION IN PUBLIC OFFERING OF SECURITIES AND ADMISSION OF SECURITIES TO
TRADING ON A REGULATED MARKET
DESCRIPTION OF THE ACTIVITY
KORADO-Bulgaria AD is registered with the Commercial Register at the Registry Agency under Unified
Identification Code (UIC) 814190902, incorporated and domiciled at its registered address in the Republic of
Bulgaria, VelikoTarnovo Region, Strazhitsa Municipality 5150, Strazhitsa town, 28 Gladstone Street.
The main scope of activity of the Company includes: manufacture and sale of heating equipment, domestic and
foreign trade in all their varieties, domestic and international transport, representation and agency. The Company
may perform also any other types of activities not prohibited by the laws of the Republic of Bulgaria.
The Company has no branches registered in the country and abroad.
Since 1994, the Company has been manufacturing primarily steel water heating panel radiators. The traditional
brand KORADO is perceived as a good product of European quality.
In 2022, the Company’s clients are mostly from the European market. The biggest share of sales is targeted to
KORADO a.s. Czech Republic (the „parent company” ).
The main suppliers of materials to the Company in 2022 were: Balkan Steel Engineering Sofia, Liberti Galati
Romania, Huss Ltd. Lom, Husung Corporation Korea, Bemas Metal Turkey, Comital Turkey, Borcelik Turkey,
CommitalTurkey, FreiLacke Germany and CWS Germany.
The Company does not depend on its suppliers, as it is able to choose among numerous companies because of
prices offered, quality and methods of payment.
RESEARCH AND DEVELOPMENT ACTIVITIES
In the area of research and development activity, the most important part is the continuing fruitful collaboration
with the parent company. The project completed, directed towards reducing the costs of maintenance and
improving the production efficiency and quality and satisfying the customer’s requirements towards the products
manufactured, is a good example of that collaboration.
The project aiming at replacing materials supplied by the parent the Company with Bulgarian supplies
continued. Successes and positive results had been achieved in this area.
KORADO-BULGARIA AD
ACTIVITY REPORT (CONTINUED)
For the year ended 31 December 2022
v
ANALYSIS OF THE OPERATING RESULTS
Manufacture
In 2022 the Company manufactured 343,371 water heating panel radiators. The Holding’s management
implements an appropriate marketing strategy aiming at preserving the share on the existing markets and keeping
people in jobs. The radiators manufactured in 2022, as also in the previous years of 2021 and 2020, are shown in
the table and graph below:
As of 31.12.2022 the Company manufactured 102,287tubular heating units. The tubular radiators manufactured
during 2022, as also in the previous years of 2021 and 2020, are shown in the table and graph below:
I Quarter II Quarter III Quarter IV Quarter Total
2020 25 640 17 925 24 580 29 270 97 415
2021 27 290 35 610 33 980 17 033 113 913
2022 26 918 24 550 31 283 19 536 102 287
Year I Quarter II Quarter III Quarter IV Quarter Total
2020 93 522 85 766 132 203 116 846 428 337
2021 113 347 130 980 138 546 97 092 479 965
2022 118 053 94 194 81 915 49 209 343 371
0
20 000
40 000
60 000
80 000
100 000
120 000
140 000
I Quarter II Quarter III
Quarter
IV
Quarter
2020
2021
2022
ACTIVITY REPORT (CONTINUED)
For the year ended 31 December 2022
v
ANALYSIS OF THE OPERATING RESULTS
Manufacture
In 2022 the Company manufactured 343,371 water heating panel radiators. The Holding’s management
implements an appropriate marketing strategy aiming at preserving the share on the existing markets and keeping
people in jobs. The radiators manufactured in 2022, as also in the previous years of 2021 and 2020, are shown in
the table and graph below:
As of 31.12.2022 the Company manufactured 102,287tubular heating units. The tubular radiators manufactured
during 2022, as also in the previous years of 2021 and 2020, are shown in the table and graph below:
I Quarter II Quarter III Quarter IV Quarter Total
2020 25 640 17 925 24 580 29 270 97 415
2021 27 290 35 610 33 980 17 033 113 913
2022 26 918 24 550 31 283 19 536 102 287
Year I Quarter II Quarter III Quarter IV Quarter Total
2020 93 522 85 766 132 203 116 846 428 337
2021 113 347 130 980 138 546 97 092 479 965
2022 118 053 94 194 81 915 49 209 343 371
0
20 000
40 000
60 000
80 000
100 000
120 000
140 000
I Quarter II Quarter III
Quarter
IV
Quarter
2020
2021
2022
KORADO-BULGARIA AD
ACTIVITY REPORT (CONTINUED)
For the year ended 31 December 2022
vi
ANALYSIS OF THE OPERATING RESULTS (CONTINUED)
Sales
As of 31 December 2022, the major trading partners of the Company are KORADO a.s. and companies in the
European market.
In 2022, the sales of KORADO-Bulgaria AD amount to 449,701 incl. panel radiators, tubular radiators and
design radiators.
The sales in the territory of the country amount to 4,594, which forms a minimum share of total sales of 1%.
To EU partners there have been sold 433,621 panel radiators and tubular radiators, and to countries outside the
EU 11,486 units. Compared to the same period of the previous year, there is a significant decrease in the
volume of products sold to countries outside the EU, and 20% decrease in sales to countries in the European
Union. Sales in Bulgaria marked a 55% decrease compared to the previous period – January – December, 2021.
The sales of heating units in 2022 and the previous years of 2021 and 2020 are shown in the following table
and graph:
Period Units EU Bulgaria Other Total
I – XII. 2020 number 471 523 11 415 49 654 532 592
I – XII. 2021 number 543 425 10 144 47 288 600 857
I – XII. 2022 number 433 621 4 594 11 486 449 701
0
5 000
10 000
15 000
20 000
25 000
30 000
35 000
40 000
I Quarter II Quarter III Quarter IV Quarter
2020
2021
2022
ACTIVITY REPORT (CONTINUED)
For the year ended 31 December 2022
vi
ANALYSIS OF THE OPERATING RESULTS (CONTINUED)
Sales
As of 31 December 2022, the major trading partners of the Company are KORADO a.s. and companies in the
European market.
In 2022, the sales of KORADO-Bulgaria AD amount to 449,701 incl. panel radiators, tubular radiators and
design radiators.
The sales in the territory of the country amount to 4,594, which forms a minimum share of total sales of 1%.
To EU partners there have been sold 433,621 panel radiators and tubular radiators, and to countries outside the
EU 11,486 units. Compared to the same period of the previous year, there is a significant decrease in the
volume of products sold to countries outside the EU, and 20% decrease in sales to countries in the European
Union. Sales in Bulgaria marked a 55% decrease compared to the previous period – January – December, 2021.
The sales of heating units in 2022 and the previous years of 2021 and 2020 are shown in the following table
and graph:
Period Units EU Bulgaria Other Total
I – XII. 2020 number 471 523 11 415 49 654 532 592
I – XII. 2021 number 543 425 10 144 47 288 600 857
I – XII. 2022 number 433 621 4 594 11 486 449 701
0
5 000
10 000
15 000
20 000
25 000
30 000
35 000
40 000
I Quarter II Quarter III Quarter IV Quarter
2020
2021
2022
KORADO-BULGARIA AD
ACTIVITY REPORT (CONTINUED)
For the year ended 31 December 2022
vii
ANALYSIS OF THE OPERATING RESULTS (CONTINUED)
The following table illustrates the number of tubular and design heating units sold in 2022 and previous 2021
and 2020:
Period Units EU Bulgaria Total
I – XII. 2020 number 97 589 2 214 99 803
I – XII. 2021 number 114 285 2 414 116 699
I – XII. 2022 number 103 011 1 296 104 307
The trade relationships between KORADO-Bulgaria AD and the companies from the economic group are on
equal trade footing and no preferences or reliefs are provided on the basis that they are related parties.
0
100 000
200 000
300 000
400 000
500 000
600 000
700 000
I – XII. 2020 I – XII. 2021 I – XII. 2022
EU
Bulgaria
Other
Total
0
20 000
40 000
60 000
80 000
100 000
120 000
I – XII.
2020
I – XII.
2021
I – XII.
2022
EU
Bulgaria
Total
ACTIVITY REPORT (CONTINUED)
For the year ended 31 December 2022
vii
ANALYSIS OF THE OPERATING RESULTS (CONTINUED)
The following table illustrates the number of tubular and design heating units sold in 2022 and previous 2021
and 2020:
Period Units EU Bulgaria Total
I – XII. 2020 number 97 589 2 214 99 803
I – XII. 2021 number 114 285 2 414 116 699
I – XII. 2022 number 103 011 1 296 104 307
The trade relationships between KORADO-Bulgaria AD and the companies from the economic group are on
equal trade footing and no preferences or reliefs are provided on the basis that they are related parties.
0
100 000
200 000
300 000
400 000
500 000
600 000
700 000
I – XII. 2020 I – XII. 2021 I – XII. 2022
EU
Bulgaria
Other
Total
0
20 000
40 000
60 000
80 000
100 000
120 000
I – XII.
2020
I – XII.
2021
I – XII.
2022
EU
Bulgaria
Total
KORADO-BULGARIA AD
ACTIVITY REPORT (CONTINUED)
For the year ended 31 December 2022
viii
ANALYSIS OF THE OPERATING RESULTS (CONTINUED)
Operating expenses
The structure of operating expenses of the Company was not changed considerably in 2022 compared to the
previous year.
Comprehensive income
The Company’s Comprehensive income for 2022 is a profit after taxes amounting to BGN 4,382 thousand
(2021: BGN 4,759 thousand).
The Comprehensive income for the last three years is shown in the following table:
Comprehensive income (BGN’000)
2020 4,591
2021 4,759
2022 4,382
Share capital
Shareholders Share Number of shares Nominal value (BGN)
KORADOa.s., Czech Republic 82.15 % 10 817 923 10 817 923
Legal entities 15,95 % 2 099 942 2 099 942
Individuals 1.90 % 250 749 250 749
TOTAL 100 % 13 168 614 13 168 614
At 31 December 2022 the Company held no shares in the capital of other companies.
The Company has implemented a Quality Management System according to ISO 9001 system standard. The
system guarantees a much better quality through the continuous improvement of process management. In April
2018 the Company shifted to ISO 9001:2015.
The Company is committed on environmentally responsible behaviour in all aspects of its operations. Its activity
complies with the national environmental policy following the principles of the EU Directives and any activities
relating thereto, which underlie the effective Bulgarian law in the field of environment. In this context, the
processes are managed as follows:
Harmful emissions – Plan for the management of solvents and control measurements of emissions of
pollutants into the air. Since 2013 the Company has been using natural gas in the technological processes and for
heating.
Waste waters – periodic measurements of waste waters.
Waste – pursuant to the Waste Management Act
A contract was signed in 2017 with BULECOPACK AD, an organization that deals with the separate
collection and recycling of packaging waste.
All environmental protection activities are supervised by the relevant authorities and certified by protocols and
prescriptions.
Human resources
The main human resource processes in 2022 were directed towards improving the qualification of the Company
staff as the major resource to achieve the stated objectives and to improve effectiveness.
ACTIVITY REPORT (CONTINUED)
For the year ended 31 December 2022
viii
ANALYSIS OF THE OPERATING RESULTS (CONTINUED)
Operating expenses
The structure of operating expenses of the Company was not changed considerably in 2022 compared to the
previous year.
Comprehensive income
The Company’s Comprehensive income for 2022 is a profit after taxes amounting to BGN 4,382 thousand
(2021: BGN 4,759 thousand).
The Comprehensive income for the last three years is shown in the following table:
Comprehensive income (BGN’000)
2020 4,591
2021 4,759
2022 4,382
Share capital
Shareholders Share Number of shares Nominal value (BGN)
KORADOa.s., Czech Republic 82.15 % 10 817 923 10 817 923
Legal entities 15,95 % 2 099 942 2 099 942
Individuals 1.90 % 250 749 250 749
TOTAL 100 % 13 168 614 13 168 614
At 31 December 2022 the Company held no shares in the capital of other companies.
The Company has implemented a Quality Management System according to ISO 9001 system standard. The
system guarantees a much better quality through the continuous improvement of process management. In April
2018 the Company shifted to ISO 9001:2015.
The Company is committed on environmentally responsible behaviour in all aspects of its operations. Its activity
complies with the national environmental policy following the principles of the EU Directives and any activities
relating thereto, which underlie the effective Bulgarian law in the field of environment. In this context, the
processes are managed as follows:
Harmful emissions – Plan for the management of solvents and control measurements of emissions of
pollutants into the air. Since 2013 the Company has been using natural gas in the technological processes and for
heating.
Waste waters – periodic measurements of waste waters.
Waste – pursuant to the Waste Management Act
A contract was signed in 2017 with BULECOPACK AD, an organization that deals with the separate
collection and recycling of packaging waste.
All environmental protection activities are supervised by the relevant authorities and certified by protocols and
prescriptions.
Human resources
The main human resource processes in 2022 were directed towards improving the qualification of the Company
staff as the major resource to achieve the stated objectives and to improve effectiveness.
KORADO-BULGARIA AD
ACTIVITY REPORT (CONTINUED)
For the year ended 31 December 2022
ix
ANALYSIS OF THE OPERATING RESULTS (CONTINUED)
The average number of staff employed by KORADO-Bulgaria AD as at 31 December 2022 is 200, including 41
women.
Employees with higher education degree - 30, including 15women;
Employees with secondary education degree – 151, including 27 women.
Employees with elementary education degree – 19, including 1 women;
Management positions occupied by women – 3.
To reach a high level of development of professional skills and qualification of workers and employees,
professional training, participation in professional training courses and seminars on various topics were
organized in 2022.
The commitment of workers and employees to follow steadily the principles of integrity and morality in their
relationships and to precisely comply with the laws of the countries in which we operate is one of the basic
principles underlying the Code of Ethics of KORADO-Bulgaria AD. It is mandatory to follow these principles in
the relationships with clients and business partners, as also in personal and business relationships.
The Company’s management expects and requires all employees at all levels to comply unconditionally with the
above principles and requirements. Any non-compliance would jeopardize the confidence of our clients,
suppliers, employees and other counterparties, and would harm and seriously threaten not only our
competitiveness and image, but also our upward development.
KORADO-Bulgaria AD is committed to provide its employees with safe and secure work environment. Safety is
particularly critical in our production workshops that are subject to strict work safety regulations. Safety rules
apply to each workplace. We comply with all provisions, including with our own policies, which often introduce
requirements not covered by law. All employees and other persons working in our premises are well informed
about the safety requirements relating to their work. The lack of labour incidents during the last year supports
this fact.
In all its business initiatives, KORADO-Bulgaria AD is attempting to be fair and correct company. We compete
actively, but do it fairly and by observing all applicable competition laws and equality in the market. We adhere
strictly to the laws for the protection of global markets from unfair competition.
KORADO-Bulgaria AD will pursue the highest standards in its activity with the aim to maintain and develop in
the long run its positions won in the competitive environment, in which it has chosen to operate. We are
committed to the sustainable development of our society. This requires reaching a balance between short-term
and long-term interests and reporting of all economic, ecological and social concerns in taking business
solutions.
KORADO-Bulgaria AD acknowledges that its efforts to maintain confidence and security of shareholders,
employees, clients and all other stakeholders, as well as of the communities where it operates are of the utmost
importance to ensuring the Company’s constant development and success.
FINANCIAL RATIOS
Liquidity
General liquidity = Current assets / Current liabilities = BGN 18,160 thousand / BGN 3,202 thousand = 5,67
Quick liquidity = (Current assets – Inventories) / Current liabilities = (BGN 18,160 thousand – BGN 12,651
thousand) / 3,202 thousand = 1,72
Absolute liquidity = Cash and cash equivalents / Current liabilities = BGN 489 thousand / BGN 3,202 thousand
= 0,15
Net working capital = Current assets – Current liabilities = BGN 18,160 thousand – BGN 3,202 thousand =
BGN 14,958 thousand
ACTIVITY REPORT (CONTINUED)
For the year ended 31 December 2022
ix
ANALYSIS OF THE OPERATING RESULTS (CONTINUED)
The average number of staff employed by KORADO-Bulgaria AD as at 31 December 2022 is 200, including 41
women.
Employees with higher education degree - 30, including 15women;
Employees with secondary education degree – 151, including 27 women.
Employees with elementary education degree – 19, including 1 women;
Management positions occupied by women – 3.
To reach a high level of development of professional skills and qualification of workers and employees,
professional training, participation in professional training courses and seminars on various topics were
organized in 2022.
The commitment of workers and employees to follow steadily the principles of integrity and morality in their
relationships and to precisely comply with the laws of the countries in which we operate is one of the basic
principles underlying the Code of Ethics of KORADO-Bulgaria AD. It is mandatory to follow these principles in
the relationships with clients and business partners, as also in personal and business relationships.
The Company’s management expects and requires all employees at all levels to comply unconditionally with the
above principles and requirements. Any non-compliance would jeopardize the confidence of our clients,
suppliers, employees and other counterparties, and would harm and seriously threaten not only our
competitiveness and image, but also our upward development.
KORADO-Bulgaria AD is committed to provide its employees with safe and secure work environment. Safety is
particularly critical in our production workshops that are subject to strict work safety regulations. Safety rules
apply to each workplace. We comply with all provisions, including with our own policies, which often introduce
requirements not covered by law. All employees and other persons working in our premises are well informed
about the safety requirements relating to their work. The lack of labour incidents during the last year supports
this fact.
In all its business initiatives, KORADO-Bulgaria AD is attempting to be fair and correct company. We compete
actively, but do it fairly and by observing all applicable competition laws and equality in the market. We adhere
strictly to the laws for the protection of global markets from unfair competition.
KORADO-Bulgaria AD will pursue the highest standards in its activity with the aim to maintain and develop in
the long run its positions won in the competitive environment, in which it has chosen to operate. We are
committed to the sustainable development of our society. This requires reaching a balance between short-term
and long-term interests and reporting of all economic, ecological and social concerns in taking business
solutions.
KORADO-Bulgaria AD acknowledges that its efforts to maintain confidence and security of shareholders,
employees, clients and all other stakeholders, as well as of the communities where it operates are of the utmost
importance to ensuring the Company’s constant development and success.
FINANCIAL RATIOS
Liquidity
General liquidity = Current assets / Current liabilities = BGN 18,160 thousand / BGN 3,202 thousand = 5,67
Quick liquidity = (Current assets – Inventories) / Current liabilities = (BGN 18,160 thousand – BGN 12,651
thousand) / 3,202 thousand = 1,72
Absolute liquidity = Cash and cash equivalents / Current liabilities = BGN 489 thousand / BGN 3,202 thousand
= 0,15
Net working capital = Current assets – Current liabilities = BGN 18,160 thousand – BGN 3,202 thousand =
BGN 14,958 thousand
KORADO-BULGARIA AD
ACTIVITY REPORT (CONTINUED)
For the year ended 31 December 2022
x
FINANCIAL RATIOS (CONTINUED)
Profitability
Sales profit margin = Gross profit / Sales revenue = BGN 4,872thousand / BGN 55,133 thousand = 8,8%
Return on assets before taxes = Gross profit / Total assets = BGN 4,872thousand / BGN 32,941thousand =
14,8%
Return on equity = Comprehensive income / Equity = BGN 4,382thousand / BGN 22,886thousand = 19,1%
The amounts of the financial ratios for the last three years are shown in the following table:
CORPORATE GOVERNANCE
Pursuant to the effective Commercial Act of Bulgaria, at 31 December 2022 KORADO-Bulgaria AD is a joint-
stock company with a two-tier management system: Supervisory Board and Management Board.
Members of the Supervisory Board at 31 December 2022:
1. Tomas Kollert – Chairman
2. Eva Voborova
3. Ivan Lyaskov
4. Evelina Miltenova
Members of the Management Board at 31 December 2022:
1. Jiri Reznicek – Chairman of MB
2. Silviya Stefanova
3. Jana Havlova
Jiri Reznicek is the Executive Director of the Company.
FINANCIAL RISK MANAGEMENT
The Company’s activities expose it to various financial risks, such as market risk (including currency risk, interest
rate risk, and other price risk), credit risk and liquidity risk. Management monitors the overall risk exposure and
seeks ways to eliminate any potential negative effects on the financial position of the Company, as disclosed in
Note 19 to the financial statements.
Ratio 2020 2021 2022
Liquidity
General liquidity 2,07 2,40 5,67
Quick liquidity 1,35 0,82 1,72
Absolute liquidity 0,49 0,13 0,15
Net working capital 7,938 12,246 14,958
Profitability
Sales profit margin 13% 9,3% 8,8%
Return on assets before taxes 17% 15% 14,8%
Return on equity 21% 21,3% 19,1%
ACTIVITY REPORT (CONTINUED)
For the year ended 31 December 2022
x
FINANCIAL RATIOS (CONTINUED)
Profitability
Sales profit margin = Gross profit / Sales revenue = BGN 4,872thousand / BGN 55,133 thousand = 8,8%
Return on assets before taxes = Gross profit / Total assets = BGN 4,872thousand / BGN 32,941thousand =
14,8%
Return on equity = Comprehensive income / Equity = BGN 4,382thousand / BGN 22,886thousand = 19,1%
The amounts of the financial ratios for the last three years are shown in the following table:
CORPORATE GOVERNANCE
Pursuant to the effective Commercial Act of Bulgaria, at 31 December 2022 KORADO-Bulgaria AD is a joint-
stock company with a two-tier management system: Supervisory Board and Management Board.
Members of the Supervisory Board at 31 December 2022:
1. Tomas Kollert – Chairman
2. Eva Voborova
3. Ivan Lyaskov
4. Evelina Miltenova
Members of the Management Board at 31 December 2022:
1. Jiri Reznicek – Chairman of MB
2. Silviya Stefanova
3. Jana Havlova
Jiri Reznicek is the Executive Director of the Company.
FINANCIAL RISK MANAGEMENT
The Company’s activities expose it to various financial risks, such as market risk (including currency risk, interest
rate risk, and other price risk), credit risk and liquidity risk. Management monitors the overall risk exposure and
seeks ways to eliminate any potential negative effects on the financial position of the Company, as disclosed in
Note 19 to the financial statements.
Ratio 2020 2021 2022
Liquidity
General liquidity 2,07 2,40 5,67
Quick liquidity 1,35 0,82 1,72
Absolute liquidity 0,49 0,13 0,15
Net working capital 7,938 12,246 14,958
Profitability
Sales profit margin 13% 9,3% 8,8%
Return on assets before taxes 17% 15% 14,8%
Return on equity 21% 21,3% 19,1%
KORADO-BULGARIA AD
ACTIVITY REPORT (CONTINUED)
For the year ended 31 December 2022
xi
GOING CONCERN PRINCIPLE
Based on the analysis described in Note 1.1. Going concern principle, management has not identified material
uncertainty that the Company will be able to continue to exist as a going concern.
EVENTS AFTER THE END OF THE REPORTING PERIOD
No events have occurred after the reporting date, which require adjustments and/or disclosures in the Company’s
financial statements.
INFORMATION ON THE PERFORMANCE OF THE RPOGRAM FOR IMPLEMENTATION OF THE
INTERNATIONALLY RECOGNISED GOOD CORPORATE GOVERNANCE STANDARDS
1. National Corporate Governance Code
KORADO-Bulgaria AD implements its own long-term good corporate governance program. The program
envisages various initiatives in a number of key directions, the performance of which facilitates the achievement
of its priority objectives: independence and responsibility of corporate management, protection of the rights of
shareholders; ensuring equal treatment of all shareholders (including minority and foreign shareholders);
ensuring recognition of the rights of any persons concerned of the Company’s management and steady
development and encouraging cooperation with them; ensuring timely and precise disclosure of important
information on the financial performance, operating results, property and management of KORADO-Bulgaria
AD, as required by law; facilitating strategic management of KORADO-Bulgaria AD; efficient control over the
activities of the Management Board (MB) and Supervisory Board (SB), and their reporting to all stakeholders.
Having regard to the important role of modern corporate governance in promoting the sustainable development
of the national economy of the Republic of Bulgaria and being guided by their commitment to continue
implementing the internationally recognized good corporate governance standards, MB and SB of KORADO-
Bulgaria AD have decided that the Company shall carry out its activity in compliance with the principles and
provisions of the National Corporate Governance Code.
2. Implementation of the National Corporate Governance Code
Management of KORADO- Bulgaria AD implements the National Code of the basis of the principle “comply or
explain”. The observance of this principle is based on the recommendation of the European Commission on the
quality of the reporting in the area of corporate governance.
The main direction in fulfilling the commitments of the Code was bringing all in-house acts of the Company and
its overall activity in accordance with the constantly changing effective regulations.
All financial statements of the Company are prepared in accordance with International Financial Reporting
Standards (IFRS) as adopted by EU and the annual audit is carried out by an independent auditor to ensure the
unbiased and objective assessment of the method of preparation and presentation of these financial statements.
These financial statements are accompanied by detailed activity reports.
ACTIVITY REPORT (CONTINUED)
For the year ended 31 December 2022
xi
GOING CONCERN PRINCIPLE
Based on the analysis described in Note 1.1. Going concern principle, management has not identified material
uncertainty that the Company will be able to continue to exist as a going concern.
EVENTS AFTER THE END OF THE REPORTING PERIOD
No events have occurred after the reporting date, which require adjustments and/or disclosures in the Company’s
financial statements.
INFORMATION ON THE PERFORMANCE OF THE RPOGRAM FOR IMPLEMENTATION OF THE
INTERNATIONALLY RECOGNISED GOOD CORPORATE GOVERNANCE STANDARDS
1. National Corporate Governance Code
KORADO-Bulgaria AD implements its own long-term good corporate governance program. The program
envisages various initiatives in a number of key directions, the performance of which facilitates the achievement
of its priority objectives: independence and responsibility of corporate management, protection of the rights of
shareholders; ensuring equal treatment of all shareholders (including minority and foreign shareholders);
ensuring recognition of the rights of any persons concerned of the Company’s management and steady
development and encouraging cooperation with them; ensuring timely and precise disclosure of important
information on the financial performance, operating results, property and management of KORADO-Bulgaria
AD, as required by law; facilitating strategic management of KORADO-Bulgaria AD; efficient control over the
activities of the Management Board (MB) and Supervisory Board (SB), and their reporting to all stakeholders.
Having regard to the important role of modern corporate governance in promoting the sustainable development
of the national economy of the Republic of Bulgaria and being guided by their commitment to continue
implementing the internationally recognized good corporate governance standards, MB and SB of KORADO-
Bulgaria AD have decided that the Company shall carry out its activity in compliance with the principles and
provisions of the National Corporate Governance Code.
2. Implementation of the National Corporate Governance Code
Management of KORADO- Bulgaria AD implements the National Code of the basis of the principle “comply or
explain”. The observance of this principle is based on the recommendation of the European Commission on the
quality of the reporting in the area of corporate governance.
The main direction in fulfilling the commitments of the Code was bringing all in-house acts of the Company and
its overall activity in accordance with the constantly changing effective regulations.
All financial statements of the Company are prepared in accordance with International Financial Reporting
Standards (IFRS) as adopted by EU and the annual audit is carried out by an independent auditor to ensure the
unbiased and objective assessment of the method of preparation and presentation of these financial statements.
These financial statements are accompanied by detailed activity reports.
KORADO-BULGARIA AD
ACTIVITY REPORT (CONTINUED)
For the year ended 31 December 2022
xii
INFORMATION ON THE PERFORMANCE OF THE RPOGRAM FOR IMPLEMENTATION OF THE
INTERNATIONALLY RECOGNISED GOOD CORPORATE GOVERNANCE STANDARDS
(CONTINUED)
2. Implementation of the National Corporate Governance Code (continued)
MB and SB manage the Company independently and responsibly, in line with the Company’s vision, goals,
strategies and the shareholders’ interests. They establish and monitor the strategic guidance for developing the
Company. MB and SB have established a risk management policy and supervise the development and operation
of an internal control and risk management system. MB and SB ensure compliance with statutory, regulatory and
contractual obligations of the Company, provide guidelines, approve and monitor the performance of the
Company’s business plan, significant transactions and activities provided for by in-house regulations. A financial
and information system of the Company has been developed and operates reliably.
SB has adopted an information disclosure and investor relations policy. Following the policy for more
transparency in its relationships with shareholders, investors and the public, KORADO-Bulgaria AD has
announced the media through which it discloses regulated information: X3-News platform of Service Financial
Markets EOOD, owned by Bulgarian Stock Exchange – Sofia AD.
The members of MB and SB base their actions on common principles of integrity and managerial and
professional competence, a basis of which is the adopted Code of Ethics. MB and SB report to the General
Meeting of Shareholders on their activities. The General Meeting of Shareholders appoints and discharges the
members of SB in compliance with the law and the Company’s Articles of Association, by observing the
principles of continuity and stability of the governing bodies’ activities. The members of SB are elected through
a transparent procedure, which ensures timely and sufficient information on the applicant’s personal and
professional skills. Management contracts comply with the requirements of the law, constituent acts and good
professional and management practice, and define the competences, rights and obligations of the members of SB
and MB, criteria to apply in determining their remuneration, their obligation to be loyal to the Company, as also
the grounds for their dismissal.
The number of the members of the governing bodies is defined by the Company’s Articles of Association. The
composition of Boards is structured in a manner which ensures that their decisions concerning the Company’s
management will be professional, unbiased and independent. MB and SB have made an appropriate division of
tasks and duties among its members. The members of the governing bodies possess appropriate skills and
experience, and after being elected new members are introduced to the major legal and financial matters relating
to the Company’s operations. It is a constant practice to improve the competence and qualification of the
members of the governing bodies. Consistency in mandates to ensure the effective operation of the Company and
compliance with legal requirements.
The members of the governing bodies have the time required to fulfil their tasks and obligations. The rules of
procedure of MB and SB define the maximum number of the companies outside the portfolio of KORADO-
Bulgaria AD, in which the members may occupy governing positions. The amount and structure of remuneration
of the members of the governing bodies are determined by the General Meeting of Shareholders. They take into
account the obligations and contribution of each member, the likelihood of selecting and retaining qualified and
loyal members, the need to ensure consistency between the member’s interests and the long-term interests of the
Company. The members of MB and SB receive fixed remuneration.
The General Meeting of Shareholders adopted a Remuneration Policy applicable to the members of MB and SB,
with the objective to support the long-term business goals of the Company and to encourage behaviour that
facilitates the creation of value for the shareholders, at the same time ensuring competitive remuneration that is
sufficient to attract and retain directors possessing the skills necessary for the successful management and
development of the Company. Information on the remuneration of the members of the governing bodies is
disclosed in an annual report, a separate document to the annual financial statements of the Company. The
Remuneration Policy and the annual report are published on the Company’s website.
MB and SB of KORADO-Bulgaria AD have adopted procedures for the avoidance and disclosure of conflicts of
interest. These procedure put the members under the obligation to avoid any real or potential conflicts of interest,
and if necessary, to disclose immediately any conflicts of interest and to ensure access for the shareholders to
information about transactions among them and the Company or their related parties. On the other hand, any
conflict of interest within the Company shall be notified to the governing bodies.
ACTIVITY REPORT (CONTINUED)
For the year ended 31 December 2022
xii
INFORMATION ON THE PERFORMANCE OF THE RPOGRAM FOR IMPLEMENTATION OF THE
INTERNATIONALLY RECOGNISED GOOD CORPORATE GOVERNANCE STANDARDS
(CONTINUED)
2. Implementation of the National Corporate Governance Code (continued)
MB and SB manage the Company independently and responsibly, in line with the Company’s vision, goals,
strategies and the shareholders’ interests. They establish and monitor the strategic guidance for developing the
Company. MB and SB have established a risk management policy and supervise the development and operation
of an internal control and risk management system. MB and SB ensure compliance with statutory, regulatory and
contractual obligations of the Company, provide guidelines, approve and monitor the performance of the
Company’s business plan, significant transactions and activities provided for by in-house regulations. A financial
and information system of the Company has been developed and operates reliably.
SB has adopted an information disclosure and investor relations policy. Following the policy for more
transparency in its relationships with shareholders, investors and the public, KORADO-Bulgaria AD has
announced the media through which it discloses regulated information: X3-News platform of Service Financial
Markets EOOD, owned by Bulgarian Stock Exchange – Sofia AD.
The members of MB and SB base their actions on common principles of integrity and managerial and
professional competence, a basis of which is the adopted Code of Ethics. MB and SB report to the General
Meeting of Shareholders on their activities. The General Meeting of Shareholders appoints and discharges the
members of SB in compliance with the law and the Company’s Articles of Association, by observing the
principles of continuity and stability of the governing bodies’ activities. The members of SB are elected through
a transparent procedure, which ensures timely and sufficient information on the applicant’s personal and
professional skills. Management contracts comply with the requirements of the law, constituent acts and good
professional and management practice, and define the competences, rights and obligations of the members of SB
and MB, criteria to apply in determining their remuneration, their obligation to be loyal to the Company, as also
the grounds for their dismissal.
The number of the members of the governing bodies is defined by the Company’s Articles of Association. The
composition of Boards is structured in a manner which ensures that their decisions concerning the Company’s
management will be professional, unbiased and independent. MB and SB have made an appropriate division of
tasks and duties among its members. The members of the governing bodies possess appropriate skills and
experience, and after being elected new members are introduced to the major legal and financial matters relating
to the Company’s operations. It is a constant practice to improve the competence and qualification of the
members of the governing bodies. Consistency in mandates to ensure the effective operation of the Company and
compliance with legal requirements.
The members of the governing bodies have the time required to fulfil their tasks and obligations. The rules of
procedure of MB and SB define the maximum number of the companies outside the portfolio of KORADO-
Bulgaria AD, in which the members may occupy governing positions. The amount and structure of remuneration
of the members of the governing bodies are determined by the General Meeting of Shareholders. They take into
account the obligations and contribution of each member, the likelihood of selecting and retaining qualified and
loyal members, the need to ensure consistency between the member’s interests and the long-term interests of the
Company. The members of MB and SB receive fixed remuneration.
The General Meeting of Shareholders adopted a Remuneration Policy applicable to the members of MB and SB,
with the objective to support the long-term business goals of the Company and to encourage behaviour that
facilitates the creation of value for the shareholders, at the same time ensuring competitive remuneration that is
sufficient to attract and retain directors possessing the skills necessary for the successful management and
development of the Company. Information on the remuneration of the members of the governing bodies is
disclosed in an annual report, a separate document to the annual financial statements of the Company. The
Remuneration Policy and the annual report are published on the Company’s website.
MB and SB of KORADO-Bulgaria AD have adopted procedures for the avoidance and disclosure of conflicts of
interest. These procedure put the members under the obligation to avoid any real or potential conflicts of interest,
and if necessary, to disclose immediately any conflicts of interest and to ensure access for the shareholders to
information about transactions among them and the Company or their related parties. On the other hand, any
conflict of interest within the Company shall be notified to the governing bodies.
KORADO-BULGARIA AD
ACTIVITY REPORT (CONTINUED)
For the year ended 31 December 2022
xiii
INFORMATION ON THE PERFORMANCE OF THE RPOGRAM FOR IMPLEMENTATION OF THE
INTERNATIONALLY RECOGNISED GOOD CORPORATE GOVERNANCE STANDARDS
(CONTINUED)
2. Implementation of the National Corporate Governance Code (continued)
Taking into account the specifics of the Company, the SB has judged that an Audit Committee should be
established. Simultaneously, following the amendments to the law, the Audit Committee was established by the
General Meeting of Shareholders and its composition and mandate were set. The Audit Committee operates on
its own operational rules and work schedule. Its activity is directed towards improving effectiveness of financial
reporting processes, internal control systems and risk management.
The Audit Committee, being guided by the established professional requirements, makes a substantiated
proposal to the General Meeting of Shareholders for the election of an external auditor. The Company has
implemented an internal control system, which guarantees the effective functioning of the reporting systems and
disclosure of information aimed at identifying the risks inherent to the activity of the Company and facilitating
their efficient management.
The corporate governance of KORADO-Bulgaria AD ensures equal treatment for all shareholders, including
minority and foreign shareholders, and protects their rights. All shareholders have the right to participate in the
General Meeting of Shareholders and to express their opinions. They are able to exercise their right to vote at the
General Meeting of Shareholders of the Company through representatives as well.
Rules have been adopted for the organization and holding of regular and extraordinary General Meetings of
Shareholders, which guarantee equal treatment for all shareholders and the right of each shareholder to express
his/her opinion on the agenda topics. The procedures and order for convening a General Meeting of Shareholders
do not prevent or make the voting unnecessary more expensive. These procedures encourage the shareholders’
participation in the General Meeting of Shareholders, but do not envisage a possibility for remote presence
through technical devices as this would make the holding of the General Meeting more onerous. Rules on proxy
voting have been adopted. The wording of written materials on the agenda of the General Meeting of
Shareholders are specific and clear, and do not mislead the shareholders. All proposals on major corporate events
are presented as separate agenda items, including the proposal for profit distribution.
To improve the confidence of shareholders, investors and stakeholders in the Company’s management and
operations is one of the key tasks of corporate governance. With respect to that, the Company constantly
reaffirms its position of a stable institution.
In 2022 as well, the approval and implementation of various ways for disclosure of current information on the
Company’s financial and business performance and important corporate events, and their promotion, continued.
KORADO-Bulgaria AD has approved a policy and system for disclosure of information in compliance with the
legal requirements. It guarantees equality of the information addressees (shareholders, stakeholders, investment
society) and prevents abuses in the form of insider dealing.
The system for disclosure of information ensures complete, timely, true and understandable information, which
enables objective and informed decisions and valuations. The Company has implemented in-house rules for the
preparation of annual and interim reports, and disclosure procedure.
The Company maintains its website, which contains corporate information, information about the governing
bodies and shareholding structure of KORADO-Bulgaria AD. The investor section contains internal documents
of the Company, information about the shareholders’ rights and their participation in the General Meeting of
Shareholders, the financial statements for the last 10 years, information about the payment of dividends, as also
for personal data protection. This section also contains materials for the forthcoming General Meetings of
Shareholders of the Company, information on the decisions passed by the General Meeting of Shareholders.
Information about initiatives of the Company, for the auditors and the media that publish news about the holding
is publicly available.
The News section contains information on the periodical publications of the Company, forthcoming events and
important information concerning the Company’s activity. There is a procedure for payment of prior year’s
dividends to be followed by the shareholders.
ACTIVITY REPORT (CONTINUED)
For the year ended 31 December 2022
xiii
INFORMATION ON THE PERFORMANCE OF THE RPOGRAM FOR IMPLEMENTATION OF THE
INTERNATIONALLY RECOGNISED GOOD CORPORATE GOVERNANCE STANDARDS
(CONTINUED)
2. Implementation of the National Corporate Governance Code (continued)
Taking into account the specifics of the Company, the SB has judged that an Audit Committee should be
established. Simultaneously, following the amendments to the law, the Audit Committee was established by the
General Meeting of Shareholders and its composition and mandate were set. The Audit Committee operates on
its own operational rules and work schedule. Its activity is directed towards improving effectiveness of financial
reporting processes, internal control systems and risk management.
The Audit Committee, being guided by the established professional requirements, makes a substantiated
proposal to the General Meeting of Shareholders for the election of an external auditor. The Company has
implemented an internal control system, which guarantees the effective functioning of the reporting systems and
disclosure of information aimed at identifying the risks inherent to the activity of the Company and facilitating
their efficient management.
The corporate governance of KORADO-Bulgaria AD ensures equal treatment for all shareholders, including
minority and foreign shareholders, and protects their rights. All shareholders have the right to participate in the
General Meeting of Shareholders and to express their opinions. They are able to exercise their right to vote at the
General Meeting of Shareholders of the Company through representatives as well.
Rules have been adopted for the organization and holding of regular and extraordinary General Meetings of
Shareholders, which guarantee equal treatment for all shareholders and the right of each shareholder to express
his/her opinion on the agenda topics. The procedures and order for convening a General Meeting of Shareholders
do not prevent or make the voting unnecessary more expensive. These procedures encourage the shareholders’
participation in the General Meeting of Shareholders, but do not envisage a possibility for remote presence
through technical devices as this would make the holding of the General Meeting more onerous. Rules on proxy
voting have been adopted. The wording of written materials on the agenda of the General Meeting of
Shareholders are specific and clear, and do not mislead the shareholders. All proposals on major corporate events
are presented as separate agenda items, including the proposal for profit distribution.
To improve the confidence of shareholders, investors and stakeholders in the Company’s management and
operations is one of the key tasks of corporate governance. With respect to that, the Company constantly
reaffirms its position of a stable institution.
In 2022 as well, the approval and implementation of various ways for disclosure of current information on the
Company’s financial and business performance and important corporate events, and their promotion, continued.
KORADO-Bulgaria AD has approved a policy and system for disclosure of information in compliance with the
legal requirements. It guarantees equality of the information addressees (shareholders, stakeholders, investment
society) and prevents abuses in the form of insider dealing.
The system for disclosure of information ensures complete, timely, true and understandable information, which
enables objective and informed decisions and valuations. The Company has implemented in-house rules for the
preparation of annual and interim reports, and disclosure procedure.
The Company maintains its website, which contains corporate information, information about the governing
bodies and shareholding structure of KORADO-Bulgaria AD. The investor section contains internal documents
of the Company, information about the shareholders’ rights and their participation in the General Meeting of
Shareholders, the financial statements for the last 10 years, information about the payment of dividends, as also
for personal data protection. This section also contains materials for the forthcoming General Meetings of
Shareholders of the Company, information on the decisions passed by the General Meeting of Shareholders.
Information about initiatives of the Company, for the auditors and the media that publish news about the holding
is publicly available.
The News section contains information on the periodical publications of the Company, forthcoming events and
important information concerning the Company’s activity. There is a procedure for payment of prior year’s
dividends to be followed by the shareholders.
KORADO-BULGARIA AD
ACTIVITY REPORT (CONTINUED)
For the year ended 31 December 2022
xiv
INFORMATION ON THE PERFORMANCE OF THE RPOGRAM FOR IMPLEMENTATION OF THE
INTERNATIONALLY RECOGNISED GOOD CORPORATE GOVERNANCE STANDARDS
(CONTINUED)
2. Implementation of the National Corporate Governance Code (continued)
The practice of sending timely responses to letters and inquiries of shareholders, including such received by
email and their recording in a register duly kept by the Investor relation Directors continues. There is a practice
that, irrespective of the nature of the question, the answer shall contain a detailed explanation of the rights of the
shareholders of the holding. The procedure for transfer of shares by way of inheritance is described in detail.
Each shareholder who, on various occasions, addresses the Company is thoroughly informed of his rights and
provided with information on various matters concerning the activity and current status of the Company,
including for the movement of share prices of KORADO-Bulgaria AD on the stock market.
The corporate governance of KORADO-Bulgaria AD ensures efficient relationships with all stakeholders,
identified by the Company as such. The policy to stakeholders is compliant with statutory requirements and in
conformity with the principles of transparency, reporting and business ethics. A policy for taking into account
the stakeholders’ interest, which ensures their attraction and guarantees the balance between the development of
the Company and the environment, in which it operates, has been developed. Efficient connections with all
stakeholders are maintained. The Company informs periodically its shareholders, stakeholders and the
investment society on significant matters.
KORADO-Bulgaria AD participates actively in various forms of mutual cooperation with government
institutions and non-governmental organizations on corporate government matters. The process of information
disclosure by KORADO-Bulgaria AD is subject to multiple controls. So far, no violations of the provisions and
terms of disclosure have been established. The financial statements are published on the Company’s website
immediately after they have been forwarded to the regulatory authority and the public, thus providing for
controls by the shareholders, investors and all stakeholders.
In conclusion, we may summarize that the activities of the governing bodies of KORADO-Bulgaria AD in 2022
were compliant with the National Corporate Governance Code and international standards.
The review and the report on the implementation of the program have found that the basic principles have been
observed, and namely:
Fair presentation and transparency with respect to the occurrence of important corporate events relating to the
Company’s activity;
Protection of the shareholders’ rights and their equal treatment;
Good corporate governance aiming at attracting the interest of potential investors;
Loyalty to the Company;
Regular control over the Co mpany’s business activity by employees of Internal Audit of the parent company;
Compliance with the Code of Ethics with respect to the internal rules of ethics, business behaviour standards,
and prevention of abuses in the form of insider dealing.
In the course of the year, through their regular meetings, Management Board and Supervisory Board, and the
independent Audit Committee assist in ensuring efficient management of the Company.
The procedure for prior notification to the members of SB and MB of the meetings, and their detailed and
precise recording, has been complied with.
As a result of the current control on the activity of the person in charge of investor relations it has been found the
following:
Timely presentation of reports and current information to the Financial Supervision Commission,
Bulgarian Stock Exchange, Central Depository. Information is published on the Company’s website at
www.korado.bg and presented to the public through the e-media www.X3news.com.
Regular keeping of registers for the materials of the General Meeting of Shareholders, minutes of the
meetings of MB and SB, reports and current information sent;
The deadlines for publication of the official notices convening a General Meeting of Shareholders have
been complied with and the notifications required by POSA have been sent;
ACTIVITY REPORT (CONTINUED)
For the year ended 31 December 2022
xiv
INFORMATION ON THE PERFORMANCE OF THE RPOGRAM FOR IMPLEMENTATION OF THE
INTERNATIONALLY RECOGNISED GOOD CORPORATE GOVERNANCE STANDARDS
(CONTINUED)
2. Implementation of the National Corporate Governance Code (continued)
The practice of sending timely responses to letters and inquiries of shareholders, including such received by
email and their recording in a register duly kept by the Investor relation Directors continues. There is a practice
that, irrespective of the nature of the question, the answer shall contain a detailed explanation of the rights of the
shareholders of the holding. The procedure for transfer of shares by way of inheritance is described in detail.
Each shareholder who, on various occasions, addresses the Company is thoroughly informed of his rights and
provided with information on various matters concerning the activity and current status of the Company,
including for the movement of share prices of KORADO-Bulgaria AD on the stock market.
The corporate governance of KORADO-Bulgaria AD ensures efficient relationships with all stakeholders,
identified by the Company as such. The policy to stakeholders is compliant with statutory requirements and in
conformity with the principles of transparency, reporting and business ethics. A policy for taking into account
the stakeholders’ interest, which ensures their attraction and guarantees the balance between the development of
the Company and the environment, in which it operates, has been developed. Efficient connections with all
stakeholders are maintained. The Company informs periodically its shareholders, stakeholders and the
investment society on significant matters.
KORADO-Bulgaria AD participates actively in various forms of mutual cooperation with government
institutions and non-governmental organizations on corporate government matters. The process of information
disclosure by KORADO-Bulgaria AD is subject to multiple controls. So far, no violations of the provisions and
terms of disclosure have been established. The financial statements are published on the Company’s website
immediately after they have been forwarded to the regulatory authority and the public, thus providing for
controls by the shareholders, investors and all stakeholders.
In conclusion, we may summarize that the activities of the governing bodies of KORADO-Bulgaria AD in 2022
were compliant with the National Corporate Governance Code and international standards.
The review and the report on the implementation of the program have found that the basic principles have been
observed, and namely:
Fair presentation and transparency with respect to the occurrence of important corporate events relating to the
Company’s activity;
Protection of the shareholders’ rights and their equal treatment;
Good corporate governance aiming at attracting the interest of potential investors;
Loyalty to the Company;
Regular control over the Co mpany’s business activity by employees of Internal Audit of the parent company;
Compliance with the Code of Ethics with respect to the internal rules of ethics, business behaviour standards,
and prevention of abuses in the form of insider dealing.
In the course of the year, through their regular meetings, Management Board and Supervisory Board, and the
independent Audit Committee assist in ensuring efficient management of the Company.
The procedure for prior notification to the members of SB and MB of the meetings, and their detailed and
precise recording, has been complied with.
As a result of the current control on the activity of the person in charge of investor relations it has been found the
following:
Timely presentation of reports and current information to the Financial Supervision Commission,
Bulgarian Stock Exchange, Central Depository. Information is published on the Company’s website at
www.korado.bg and presented to the public through the e-media www.X3news.com.
Regular keeping of registers for the materials of the General Meeting of Shareholders, minutes of the
meetings of MB and SB, reports and current information sent;
The deadlines for publication of the official notices convening a General Meeting of Shareholders have
been complied with and the notifications required by POSA have been sent;
KORADO-BULGARIA AD
ACTIVITY REPORT (CONTINUED)
For the year ended 31 December 2022
xv
INFORMATION ON THE PERFORMANCE OF THE RPOGRAM FOR IMPLEMENTATION OF THE
INTERNATIONALLY RECOGNISED GOOD CORPORATE GOVERNANCE STANDARDS
(CONTINUED)
2. Implementation of the National Corporate Governance Code (continued)
All quarterly, six months and annual financial statements have been prepared in accordance with International
Financial Reporting Standards, as adopted by EU.
In addition to the above-specified information, the Executive Director has drawn up and signed a Statement of
Corporate Governance pursuant to Article 100m, paragraphs 7 – 9 of POSA, which is enclosed to this report and
forms an integral part hereof.
INFORMATION UNDER ARTICLE 187E AND ARTICLE 247 OF THE COMMERCIAL ACT
Dividend
The General Meeting of Shareholders held on 18 May 2022, approved distribution of dividends for 2021
amounting to BGN 2,502 thousand. Gross dividend of BGN 0.19 per share.
The dividends were paid through the system of Central Depository AD and the branches of DSK Bank. Their
payment commenced on 15 June 2022
On 14 September 2022 the Extraordinary General Meeting of Shareholders approved distribution of dividends
for the first half of 2022 amounting to BGN 1,317 thousand, gross dividend of BGN 0.10 per share.
The dividends are paid through the system of Central Depository AD and the branches of DSK Bank. Their
payment commenced on 12 October 2022.
The unpaid dividends will be paid at the registered address of the Company within the statutory deadlines and by
applying the statutory methods.
ISIN code of issue - BG11LUSTAT13.
Holding of own shares by the Company
As at 31 December 2022 the Company holds no own shares.
Holding of shares of the Company by the members of the corporate management of the Company
At 31 December 2022 the chairman of Management Board Jiri Reznicek, held 180 shares, the member of the
Management Board, Silviya Stefanova, held 507 shares of the Company and the member of the Supervisory
board Evelina Miltenova, held 900 shares of the Company.
The other members of the Management and Supervisory Boards hold no shares or bonds of KORADO-Bulgaria
AD, or rights to acquire shares and bonds of the Company. These shares were acquired on the free market on the
conditions of public offering carried out. The other members of the Management and Supervisory Boards hold
no shares or bonds of KORADO-Bulgaria AD, or rights to acquire shares and bonds of the Company, and no
such shares, bonds or rights were acquired in 2022.
Rights of the corporate management members to acquire shares and bonds of the Company
There are no plans at group level of KORADO Group for the acquisition of shares or share options by
management or employees, relating to the shares of the Company. Rights for the acquisition of bonds of the
Company have not been granted to any of the member of the Management Board and/or Supervisory Board.
ACTIVITY REPORT (CONTINUED)
For the year ended 31 December 2022
xv
INFORMATION ON THE PERFORMANCE OF THE RPOGRAM FOR IMPLEMENTATION OF THE
INTERNATIONALLY RECOGNISED GOOD CORPORATE GOVERNANCE STANDARDS
(CONTINUED)
2. Implementation of the National Corporate Governance Code (continued)
All quarterly, six months and annual financial statements have been prepared in accordance with International
Financial Reporting Standards, as adopted by EU.
In addition to the above-specified information, the Executive Director has drawn up and signed a Statement of
Corporate Governance pursuant to Article 100m, paragraphs 7 – 9 of POSA, which is enclosed to this report and
forms an integral part hereof.
INFORMATION UNDER ARTICLE 187E AND ARTICLE 247 OF THE COMMERCIAL ACT
Dividend
The General Meeting of Shareholders held on 18 May 2022, approved distribution of dividends for 2021
amounting to BGN 2,502 thousand. Gross dividend of BGN 0.19 per share.
The dividends were paid through the system of Central Depository AD and the branches of DSK Bank. Their
payment commenced on 15 June 2022
On 14 September 2022 the Extraordinary General Meeting of Shareholders approved distribution of dividends
for the first half of 2022 amounting to BGN 1,317 thousand, gross dividend of BGN 0.10 per share.
The dividends are paid through the system of Central Depository AD and the branches of DSK Bank. Their
payment commenced on 12 October 2022.
The unpaid dividends will be paid at the registered address of the Company within the statutory deadlines and by
applying the statutory methods.
ISIN code of issue - BG11LUSTAT13.
Holding of own shares by the Company
As at 31 December 2022 the Company holds no own shares.
Holding of shares of the Company by the members of the corporate management of the Company
At 31 December 2022 the chairman of Management Board Jiri Reznicek, held 180 shares, the member of the
Management Board, Silviya Stefanova, held 507 shares of the Company and the member of the Supervisory
board Evelina Miltenova, held 900 shares of the Company.
The other members of the Management and Supervisory Boards hold no shares or bonds of KORADO-Bulgaria
AD, or rights to acquire shares and bonds of the Company. These shares were acquired on the free market on the
conditions of public offering carried out. The other members of the Management and Supervisory Boards hold
no shares or bonds of KORADO-Bulgaria AD, or rights to acquire shares and bonds of the Company, and no
such shares, bonds or rights were acquired in 2022.
Rights of the corporate management members to acquire shares and bonds of the Company
There are no plans at group level of KORADO Group for the acquisition of shares or share options by
management or employees, relating to the shares of the Company. Rights for the acquisition of bonds of the
Company have not been granted to any of the member of the Management Board and/or Supervisory Board.
KORADO-BULGARIA AD
ACTIVITY REPORT (CONTINUED)
For the year ended 31 December 2022
xvi
INFORMATION UNDER ARTICLE 187E AND ARTICLE 247 OF THE COMMERCIAL ACT
(CONTINUED)
Participation of the corporate management members in other companies
The members of the Management and Supervisory Boards do not participate in entities as unlimited liability
shareholders.
The members of the Management and Supervisory Boards hold more than 25% of the capital of other entities, as
follows:
Ivan Lyaskov Smile OOD
Vitop OOD
Esam OOD
Dike-2003 OOD
Citistroy OOD
Krameks OOD
Shares of the Company were neither acquired nor transferred by the Board members in 2022.
Membership in the management board of other entities
The members of the Management Board and Supervisory Board participate in the management of the following
entities:
Tomas Kollert Licon Heat s.r.o. – member of the Supervisory board
Contracts with Board members and their related parties
No contracts, which fall beyond the ordinary course of business or significantly deviate from market conditions,
were concluded between members of the Management Board and / or Supervisory Board in 2022.
ADDITIONAL INFORMATION UNDER APPENDIX 2 TO ORDINANCE 2 OF FSC
1. Information given in value or quantitative terms about the main categories of commodities, products and/or
provided services, with indication of their share in the revenues from sales of the Company as a whole and the
changes that occurred during the reporting fiscal year.
Information is given in the following table:
Finished product
manufactured, Pcs. Finished products sold (without goods)
Quantity
Amount (BGN
thousand)
2021 2022 2021 2022 2021 2022
Panel radiators 479 965 343 371 480 425 343 649 49 304 46,712
Steel rail bathroom radiators 113 913 102 287 113 913 102 287 6 288 7,535
ACTIVITY REPORT (CONTINUED)
For the year ended 31 December 2022
xvi
INFORMATION UNDER ARTICLE 187E AND ARTICLE 247 OF THE COMMERCIAL ACT
(CONTINUED)
Participation of the corporate management members in other companies
The members of the Management and Supervisory Boards do not participate in entities as unlimited liability
shareholders.
The members of the Management and Supervisory Boards hold more than 25% of the capital of other entities, as
follows:
Ivan Lyaskov Smile OOD
Vitop OOD
Esam OOD
Dike-2003 OOD
Citistroy OOD
Krameks OOD
Shares of the Company were neither acquired nor transferred by the Board members in 2022.
Membership in the management board of other entities
The members of the Management Board and Supervisory Board participate in the management of the following
entities:
Tomas Kollert Licon Heat s.r.o. – member of the Supervisory board
Contracts with Board members and their related parties
No contracts, which fall beyond the ordinary course of business or significantly deviate from market conditions,
were concluded between members of the Management Board and / or Supervisory Board in 2022.
ADDITIONAL INFORMATION UNDER APPENDIX 2 TO ORDINANCE 2 OF FSC
1. Information given in value or quantitative terms about the main categories of commodities, products and/or
provided services, with indication of their share in the revenues from sales of the Company as a whole and the
changes that occurred during the reporting fiscal year.
Information is given in the following table:
Finished product
manufactured, Pcs. Finished products sold (without goods)
Quantity
Amount (BGN
thousand)
2021 2022 2021 2022 2021 2022
Panel radiators 479 965 343 371 480 425 343 649 49 304 46,712
Steel rail bathroom radiators 113 913 102 287 113 913 102 287 6 288 7,535
KORADO-BULGARIA AD
ACTIVITY REPORT (CONTINUED)
For the year ended 31 December 2022
xvii
ADDITIONAL INFORMATION UNDER SECTION ІVА OF APPENDIX 2 TO ORDINANCE 2 OF FSC
(CONTINUED)
2. Information about the revenues allocated by separate categories of activities, domestic and external markets as
well as information about the sources for supply of materials required for the manufacture of finished products or
the provision of services with indication of the degree of dependence in relation to any individual seller or
buyer/user and in the event that the relative share of any of them exceeds 10 percent of the costs or revenues
from sales, information is provided for each person separately, about his share in sales or purchases and his
relations with the issuer, respectively the person under § 1e of the additional provisions of the POSA.
REVENUE in BGN’000
Net sales revenue:
1.Finished products 54,247
2.Goods 810
3. Services 76
Total revenue 55,133
Sales revenue by markets:
Domestic market – amounting to BGN 916 thousand, representing 1.66 %.
Export market - amounting to BGN 54,217 thousand, representing 98,34%, including sales amounting
to BGN 46,924 thousand to KORADO a.s., Czech Republic – 85.1%, BGN1,209 sales to clients in Ukraine –
2.2% and BGN 2,041thousand sales to a client Sekpral Pro Instalatii (Romania) - 3.7%, BGN 2,182 thousand
sales to client Hegedus Hungary – 3.95%, client from Greece BGN 1,439 thousand - 2.6% and other clients -
BGN 422 thousand.
Total purchases of materials for 2022 amount to BGN 36,911 thousand. Purchases are concentrated in 6 major
suppliers, which constitute 70% of total purchases. The general suppliers which deliver more than 10 % of all
materials are:
BorcelikTikaret (Turkey) - BGN 15,507 thousand or 42%
Liberty Galati ( Romania) - BGN 4,179 thousand or 11%
3. Information about concluded large transactions and such of material importance for the Company’s
activity.
In the reporting year of 2022, there were no large transactions or such of significant importance to the activity of
the Company.
4. Information about the transactions concluded between the issuer, respectively the person under § 1e of
the additional provisions of the POSAand related parties during the reporting period, proposals for
conclusion of such transactions as well as transactions, which are outside its usual activity or substantially
deviate from the market conditions, to which the issuer, respectively the person under § 1e of the
additional provisions of the POSA or its subsidiary, is a party, indicating the value of the transactions, the
nature of the relation and any information necessary to assess the impact on the issuer's financial
condition, respectively, the person under § 1e of the additional provisions of the POSA.
During the reporting period, there were no transactions, which are outside the usual activity of the Company, and
proposals for conclusion of such transactions were not received. Besides with the parent company KORADO
a.s., Czech Republic, in 2022, the Company had deals with other related parties as well, such as LICON HEAT,
Czech Republic (a 100% subsidiary of KORADO a.s., Czech Republic).All related party transactions of the
Company are concluded on usual market conditions, including, but not limited to, their price levels. Related
party transactions concluded in 2022 are disclosed in Note 16 to the financial statements.
ACTIVITY REPORT (CONTINUED)
For the year ended 31 December 2022
xvii
ADDITIONAL INFORMATION UNDER SECTION ІVА OF APPENDIX 2 TO ORDINANCE 2 OF FSC
(CONTINUED)
2. Information about the revenues allocated by separate categories of activities, domestic and external markets as
well as information about the sources for supply of materials required for the manufacture of finished products or
the provision of services with indication of the degree of dependence in relation to any individual seller or
buyer/user and in the event that the relative share of any of them exceeds 10 percent of the costs or revenues
from sales, information is provided for each person separately, about his share in sales or purchases and his
relations with the issuer, respectively the person under § 1e of the additional provisions of the POSA.
REVENUE in BGN’000
Net sales revenue:
1.Finished products 54,247
2.Goods 810
3. Services 76
Total revenue 55,133
Sales revenue by markets:
Domestic market – amounting to BGN 916 thousand, representing 1.66 %.
Export market - amounting to BGN 54,217 thousand, representing 98,34%, including sales amounting
to BGN 46,924 thousand to KORADO a.s., Czech Republic – 85.1%, BGN1,209 sales to clients in Ukraine –
2.2% and BGN 2,041thousand sales to a client Sekpral Pro Instalatii (Romania) - 3.7%, BGN 2,182 thousand
sales to client Hegedus Hungary – 3.95%, client from Greece BGN 1,439 thousand - 2.6% and other clients -
BGN 422 thousand.
Total purchases of materials for 2022 amount to BGN 36,911 thousand. Purchases are concentrated in 6 major
suppliers, which constitute 70% of total purchases. The general suppliers which deliver more than 10 % of all
materials are:
BorcelikTikaret (Turkey) - BGN 15,507 thousand or 42%
Liberty Galati ( Romania) - BGN 4,179 thousand or 11%
3. Information about concluded large transactions and such of material importance for the Company’s
activity.
In the reporting year of 2022, there were no large transactions or such of significant importance to the activity of
the Company.
4. Information about the transactions concluded between the issuer, respectively the person under § 1e of
the additional provisions of the POSAand related parties during the reporting period, proposals for
conclusion of such transactions as well as transactions, which are outside its usual activity or substantially
deviate from the market conditions, to which the issuer, respectively the person under § 1e of the
additional provisions of the POSA or its subsidiary, is a party, indicating the value of the transactions, the
nature of the relation and any information necessary to assess the impact on the issuer's financial
condition, respectively, the person under § 1e of the additional provisions of the POSA.
During the reporting period, there were no transactions, which are outside the usual activity of the Company, and
proposals for conclusion of such transactions were not received. Besides with the parent company KORADO
a.s., Czech Republic, in 2022, the Company had deals with other related parties as well, such as LICON HEAT,
Czech Republic (a 100% subsidiary of KORADO a.s., Czech Republic).All related party transactions of the
Company are concluded on usual market conditions, including, but not limited to, their price levels. Related
party transactions concluded in 2022 are disclosed in Note 16 to the financial statements.
KORADO-BULGARIA AD
ACTIVITY REPORT (CONTINUED)
For the year ended 31 December 2022
xviii
ADDITIONAL INFORMATION UNDER APPENDIX 2 TO ORDINANCE 2 OF FSC (CONTINUED)
5. Information about events and indicators of unusual for the issuer, respectively the person under § 1e of
the additional provisions of the POSAnature, having substantial influence over its operation and the
realized revenues and expenses incurred; assessment of their influence over the results during the current
year.
In 2022, there were no events or indicators of unusual for the Company nature.
6. Information about off-balance transactions- nature and business purpose, indication of the financial
impact of the transactions on the activity, if the risk and benefits of these transactions are material for the
issuer, respectively the person under § 1e of the additional provisions of the POSA, and if the disclosure of
this information is essential for the assessment of the financial position of the issuer, respectively, the
person under § 1e of the additional provisions of the POSA.
Off-balance sheet transactions were not concluded in 2022.
7. Information about holdings of the issuer, respectively the person under § 1e of the additional pro visions
of the POSA, about its main investments in the country and abroad (in securities, financial instruments,
intangible assets and real estate), as well as the investments in equity securities outside its economic group
according to the Accountancy Act and the sources/ways of financing.
At 31 December 2022, KORADO-Bulgaria AD held no shares in other companies and/or participations in
subsidiaries. Information with regards to the acquired intangible assets and property, plant and equipment is
disclosed in Notes 7 and 8 to the financial statements.
8. Information about the concluded by the issuer, respectively the person under § 1e of the additional
provisions of the POSA, by its subsidiary in their capacity as borrowers, loan contracts with indication of
the terms and conditions thereof, including the deadlines for repayment as well as information on the
provided guarantees and assuming of liabilities.
In February 2016, the Company signed a loan contract with the parent company KORADO a.s. Czech Republic
in the amount of BGN 1,174 thousand was received and in April 2016, the second tranche of BGN 3,520
thousand was received. The total amount of the loan utilized is BGN 4,694 thousand. The loan funds are
intended mainly to finance the acquisition and commissioning of a production line for tube heating units and
renovation of production corpuses. In October 2016 part of the principle amounting to BGN 978 thousand was
paid. The loan was long-term and with initial maturity on 31 December 2022 The agreed interest rate was 1.75
percentage points + 1M EURIBOR.
In October 2016 part of the loan at the amount of BGN 978 thousand was settled by offsetting trade receivables
from the same contractor and thus at 31 December 2022 the loan amounted to BGN 3,716 thousand
(2021 BGN 3,716 thousand).
With an annex from22.12.2021 the maturity date is changed to 31.12.2024, all other terms and conditions remain
unchanged.
In October 2022 the Company signed a new loan contract with the parent company KORADO a.s. with amount
of BGN 2,347 thousand with due date to 31.12.2027.
Contracts were not concluded and commitments for provision of guarantees and assumption of liabilities were
not taken by the Company.
The parent company has received financing for the total amount of 75 356 mil CZK (2021: 92 306 mil CZK)
maturing in 2023-2025 years from financial institutions with an interest rate of 1M EURIBOR+1.55% and 1M
EURIBOR +0.95, 1M PRIBOR+1.55%.
ACTIVITY REPORT (CONTINUED)
For the year ended 31 December 2022
xviii
ADDITIONAL INFORMATION UNDER APPENDIX 2 TO ORDINANCE 2 OF FSC (CONTINUED)
5. Information about events and indicators of unusual for the issuer, respectively the person under § 1e of
the additional provisions of the POSAnature, having substantial influence over its operation and the
realized revenues and expenses incurred; assessment of their influence over the results during the current
year.
In 2022, there were no events or indicators of unusual for the Company nature.
6. Information about off-balance transactions- nature and business purpose, indication of the financial
impact of the transactions on the activity, if the risk and benefits of these transactions are material for the
issuer, respectively the person under § 1e of the additional provisions of the POSA, and if the disclosure of
this information is essential for the assessment of the financial position of the issuer, respectively, the
person under § 1e of the additional provisions of the POSA.
Off-balance sheet transactions were not concluded in 2022.
7. Information about holdings of the issuer, respectively the person under § 1e of the additional pro visions
of the POSA, about its main investments in the country and abroad (in securities, financial instruments,
intangible assets and real estate), as well as the investments in equity securities outside its economic group
according to the Accountancy Act and the sources/ways of financing.
At 31 December 2022, KORADO-Bulgaria AD held no shares in other companies and/or participations in
subsidiaries. Information with regards to the acquired intangible assets and property, plant and equipment is
disclosed in Notes 7 and 8 to the financial statements.
8. Information about the concluded by the issuer, respectively the person under § 1e of the additional
provisions of the POSA, by its subsidiary in their capacity as borrowers, loan contracts with indication of
the terms and conditions thereof, including the deadlines for repayment as well as information on the
provided guarantees and assuming of liabilities.
In February 2016, the Company signed a loan contract with the parent company KORADO a.s. Czech Republic
in the amount of BGN 1,174 thousand was received and in April 2016, the second tranche of BGN 3,520
thousand was received. The total amount of the loan utilized is BGN 4,694 thousand. The loan funds are
intended mainly to finance the acquisition and commissioning of a production line for tube heating units and
renovation of production corpuses. In October 2016 part of the principle amounting to BGN 978 thousand was
paid. The loan was long-term and with initial maturity on 31 December 2022 The agreed interest rate was 1.75
percentage points + 1M EURIBOR.
In October 2016 part of the loan at the amount of BGN 978 thousand was settled by offsetting trade receivables
from the same contractor and thus at 31 December 2022 the loan amounted to BGN 3,716 thousand
(2021 BGN 3,716 thousand).
With an annex from22.12.2021 the maturity date is changed to 31.12.2024, all other terms and conditions remain
unchanged.
In October 2022 the Company signed a new loan contract with the parent company KORADO a.s. with amount
of BGN 2,347 thousand with due date to 31.12.2027.
Contracts were not concluded and commitments for provision of guarantees and assumption of liabilities were
not taken by the Company.
The parent company has received financing for the total amount of 75 356 mil CZK (2021: 92 306 mil CZK)
maturing in 2023-2025 years from financial institutions with an interest rate of 1M EURIBOR+1.55% and 1M
EURIBOR +0.95, 1M PRIBOR+1.55%.
KORADO-BULGARIA AD
ACTIVITY REPORT (CONTINUED)
For the year ended 31 December 2022
xix
ADDITIONAL INFORMATION UNDER APPENDIX 2 TO ORDINANCE 2 OF FSC (CONTINUED)
9. Information about the loans, granted by the issuer, respectively by a person under § 1e of the
Additional Provisions of the POSA, or by their subsidiaries, providing guarantees or assuming obligations
in total to one person or his subsidiary, including related parties with name and UIC of the person, the
nature of the relationship between the issuer, respectively the person under § 1e of the additional
provisions of the POSA, or their subsidiaries and the borrower, the amount of outstanding principal,
interest rate, contract date, repayment deadline, the amount of the commitment, specific conditions other
than those provided for in this provision, as well as the purpose for which they were granted, in case they
were concluded as targeted.
Contracts were not concluded by the Company in the capacity as a lender and guarantees of any type were not
provided by the Company in 2022. The parent company has provided financing to Licon Heat in the total amount
of 37 mil CZK (2021: 42 395 mil CZK) maturing on 31.12.2027 with an interest rate of 1MPRIBOR+1%, to
KORADO Polska in the total amount of 37 062 mil CZK (2021: 37 062 mil CZK) maturing on 31.12.2023 and
with an interest rate of 1.7% and ThermWet 4 mil CZK (2021: 4 mil CZK) maturing on 31.12.2023 and with an
interest rate of 1MPRIBOR+1%.
10. Information on the use of the funds from a new issue of securities carried out during the reported
period.
The Company has not issued new securities in 2022.
11. Analysis of the ratio between the achieved financial results reflected in the financial statement for the
fiscal year and previously published forecasts for these results.
The Company has published forecasted results for 2022.
12. Analysis and assessment of the policy concerning the management of the financial resources with
indication of the possibilities for servicing of the liabilities, eventual jeopardizes and measures which the
issuer, respectively by a person under § 1e of the Additional Provisions of the POSA, has undertaken or is
to undertake with a view to their removal.
In 2022, the Company continued to implement systemically its financial resource management policy and thanks
to that, it has sufficient funds to meet its liabilities in 2023. The Company’s management is of the opinion that
there are no threats to such current servicing, which go beyond the ordinary course of the activity. Therefore,
measures for the removal of such threats are not envisaged. Liquidity ratios are described above.
13. Assessment of the possibilities for realization of the investment intentions indicating the amount of
available funds and showing possible changes in the financing structure of this activity.
The activity of KORADO-Bulgaria AD is directed primarily towards management of current investments.
In 2022 no investment funds are budgeted for reconstruction and renovation of the newly acquired production
facilities and terrains.
14. Information about changes occurred during the reporting period changes in the basic principles for
management of the issuer, respectively by a person under § 1e of the Additional Provisions of the POSA
and its economic group according to the Accountancy Act.
The base principles for management of the Company and its economic group have not been changed.
15. Information about the main characteristics of the applied by the issuer, respectively by a person under
§ 1e of the Additional Provisions of the POSA in the course of preparation of the financial statements
internal controls system and risk management system.
In the process of preparation of the financial statements for 2022, internal control activities include stocktaking
of inventories carried out once a year and of work in progress carried out on a monthly basis, with all required
accounting adjustments according to the inventory lists expressed in values.
ACTIVITY REPORT (CONTINUED)
For the year ended 31 December 2022
xix
ADDITIONAL INFORMATION UNDER APPENDIX 2 TO ORDINANCE 2 OF FSC (CONTINUED)
9. Information about the loans, granted by the issuer, respectively by a person under § 1e of the
Additional Provisions of the POSA, or by their subsidiaries, providing guarantees or assuming obligations
in total to one person or his subsidiary, including related parties with name and UIC of the person, the
nature of the relationship between the issuer, respectively the person under § 1e of the additional
provisions of the POSA, or their subsidiaries and the borrower, the amount of outstanding principal,
interest rate, contract date, repayment deadline, the amount of the commitment, specific conditions other
than those provided for in this provision, as well as the purpose for which they were granted, in case they
were concluded as targeted.
Contracts were not concluded by the Company in the capacity as a lender and guarantees of any type were not
provided by the Company in 2022. The parent company has provided financing to Licon Heat in the total amount
of 37 mil CZK (2021: 42 395 mil CZK) maturing on 31.12.2027 with an interest rate of 1MPRIBOR+1%, to
KORADO Polska in the total amount of 37 062 mil CZK (2021: 37 062 mil CZK) maturing on 31.12.2023 and
with an interest rate of 1.7% and ThermWet 4 mil CZK (2021: 4 mil CZK) maturing on 31.12.2023 and with an
interest rate of 1MPRIBOR+1%.
10. Information on the use of the funds from a new issue of securities carried out during the reported
period.
The Company has not issued new securities in 2022.
11. Analysis of the ratio between the achieved financial results reflected in the financial statement for the
fiscal year and previously published forecasts for these results.
The Company has published forecasted results for 2022.
12. Analysis and assessment of the policy concerning the management of the financial resources with
indication of the possibilities for servicing of the liabilities, eventual jeopardizes and measures which the
issuer, respectively by a person under § 1e of the Additional Provisions of the POSA, has undertaken or is
to undertake with a view to their removal.
In 2022, the Company continued to implement systemically its financial resource management policy and thanks
to that, it has sufficient funds to meet its liabilities in 2023. The Company’s management is of the opinion that
there are no threats to such current servicing, which go beyond the ordinary course of the activity. Therefore,
measures for the removal of such threats are not envisaged. Liquidity ratios are described above.
13. Assessment of the possibilities for realization of the investment intentions indicating the amount of
available funds and showing possible changes in the financing structure of this activity.
The activity of KORADO-Bulgaria AD is directed primarily towards management of current investments.
In 2022 no investment funds are budgeted for reconstruction and renovation of the newly acquired production
facilities and terrains.
14. Information about changes occurred during the reporting period changes in the basic principles for
management of the issuer, respectively by a person under § 1e of the Additional Provisions of the POSA
and its economic group according to the Accountancy Act.
The base principles for management of the Company and its economic group have not been changed.
15. Information about the main characteristics of the applied by the issuer, respectively by a person under
§ 1e of the Additional Provisions of the POSA in the course of preparation of the financial statements
internal controls system and risk management system.
In the process of preparation of the financial statements for 2022, internal control activities include stocktaking
of inventories carried out once a year and of work in progress carried out on a monthly basis, with all required
accounting adjustments according to the inventory lists expressed in values.
KORADO-BULGARIA AD
ACTIVITY REPORT (CONTINUED)
For the year ended 31 December 2022
xx
ADDITIONAL INFORMATION UNDER APPENDIX 2 TO ORDINANCE 2 OF FSC (CONTINUED)
The control on the waste of inventories is exercised on a monthly basis. Cash is counted on a quarterly basis. At
the end of each financial year, the balances of the Company – receivables and payables, are checked as well.
Financial control is exercised currently by management and on annual basis by internal auditors of the parent
company in accordance with International Standards on Internal Auditing.
16. Information on the changes in the management and supervisory bodies during the reporting fiscal
year.
In 2022 there are no changes to the management bodies. By decision of GM dated 14.09.2022 a change in the
members of Audit committee has been made.
17. Information on the amount of remuneration, rewards and / or benefits of each of the members of the
management and supervisory bodies for the reporting financial year, paid by the issuer, which is not a
public company, respectively the person under § 1e of the additional provisions of POSA and its
subsidiary companies, regardless of whether they were included in the expenses of the issuer, which is not
a public company, respectively the person under § 1e of the additional provisions of the POSA, or arise
from the distribution of profit, including:
(a) Received amounts and non-monetary remuneration;
(b) Conditional or rescheduled remuneration arisen during the year, even if the remuneration is due at a
later date;
c) An amount payable by the issuer, which is not a public company, respectively the person under § 1e of
the additional provisions of the POSA, or its subsidiaries for payment of pensions, retirement benefits or
other similar benefits.
The remuneration of the members of the management and control bodies is as follows:
The members of the Management Board include the Executive Director, the Chief Accountant and a
non-employee member of the Company, who is an employee of the Group. The remuneration they receive for
the performance of their duties as employees are disclosed in Note 16 to the financial statements. They are
remunerated for their role as board members from 16.09.2021 according to Decision of GM/15.09.2021 with the
annual amount of BGN 9 thousand to each member.
Two of the members of the Supervisory Board have received remuneration in 2022 and each of them
has received the amount of BGN 23 thousand. Two of the members of the Supervisory Board have received
remuneration for their role as SB members from 16.09.2021 according to Decision of GM/15.09.2021 at the
amount of BGN 9 thousand to each member, as they are employees of the Group.
Unpaid remunerations as at 31 December to 2022 amount to BGN 10 thousand.
18. For the public companies – information about the owned by the members of the management and of
the control bodies and procurators shares of the Company, including the shares held by anyone of them
separately or as a percent from the shares of each class, as well as provided to them options on securities
of the Company by the latter – type and amount of the securities over which the options have been set up,
price of exercising of the options, purchase price, if any, and term of the options.
At 31 December 2022 the Chairman of MB Jiri Reznicek held 180 shares, the member of MB, Silviya Stefanova,
held 507 shares and the member of SB, Evelina Miltenova, held 900 shares of the Company. The other members
of the Management and Supervisory Boards hold no shares or bonds of KORADO-Bulgaria AD, or rights to
acquire shares and bonds of the Company.
19. Information about the known to the Company agreements (including also after the fiscal year closing)
as a result of which changes may occur at a future time in the owned percent of shares or bonds by
current shareholders and bondholder.
The Company has no information for such agreements.
ACTIVITY REPORT (CONTINUED)
For the year ended 31 December 2022
xx
ADDITIONAL INFORMATION UNDER APPENDIX 2 TO ORDINANCE 2 OF FSC (CONTINUED)
The control on the waste of inventories is exercised on a monthly basis. Cash is counted on a quarterly basis. At
the end of each financial year, the balances of the Company – receivables and payables, are checked as well.
Financial control is exercised currently by management and on annual basis by internal auditors of the parent
company in accordance with International Standards on Internal Auditing.
16. Information on the changes in the management and supervisory bodies during the reporting fiscal
year.
In 2022 there are no changes to the management bodies. By decision of GM dated 14.09.2022 a change in the
members of Audit committee has been made.
17. Information on the amount of remuneration, rewards and / or benefits of each of the members of the
management and supervisory bodies for the reporting financial year, paid by the issuer, which is not a
public company, respectively the person under § 1e of the additional provisions of POSA and its
subsidiary companies, regardless of whether they were included in the expenses of the issuer, which is not
a public company, respectively the person under § 1e of the additional provisions of the POSA, or arise
from the distribution of profit, including:
(a) Received amounts and non-monetary remuneration;
(b) Conditional or rescheduled remuneration arisen during the year, even if the remuneration is due at a
later date;
c) An amount payable by the issuer, which is not a public company, respectively the person under § 1e of
the additional provisions of the POSA, or its subsidiaries for payment of pensions, retirement benefits or
other similar benefits.
The remuneration of the members of the management and control bodies is as follows:
The members of the Management Board include the Executive Director, the Chief Accountant and a
non-employee member of the Company, who is an employee of the Group. The remuneration they receive for
the performance of their duties as employees are disclosed in Note 16 to the financial statements. They are
remunerated for their role as board members from 16.09.2021 according to Decision of GM/15.09.2021 with the
annual amount of BGN 9 thousand to each member.
Two of the members of the Supervisory Board have received remuneration in 2022 and each of them
has received the amount of BGN 23 thousand. Two of the members of the Supervisory Board have received
remuneration for their role as SB members from 16.09.2021 according to Decision of GM/15.09.2021 at the
amount of BGN 9 thousand to each member, as they are employees of the Group.
Unpaid remunerations as at 31 December to 2022 amount to BGN 10 thousand.
18. For the public companies – information about the owned by the members of the management and of
the control bodies and procurators shares of the Company, including the shares held by anyone of them
separately or as a percent from the shares of each class, as well as provided to them options on securities
of the Company by the latter – type and amount of the securities over which the options have been set up,
price of exercising of the options, purchase price, if any, and term of the options.
At 31 December 2022 the Chairman of MB Jiri Reznicek held 180 shares, the member of MB, Silviya Stefanova,
held 507 shares and the member of SB, Evelina Miltenova, held 900 shares of the Company. The other members
of the Management and Supervisory Boards hold no shares or bonds of KORADO-Bulgaria AD, or rights to
acquire shares and bonds of the Company.
19. Information about the known to the Company agreements (including also after the fiscal year closing)
as a result of which changes may occur at a future time in the owned percent of shares or bonds by
current shareholders and bondholder.
The Company has no information for such agreements.
KORADO-BULGARIA AD
ACTIVITY REPORT (CONTINUED)
For the year ended 31 December 2022
xxi
ADDITIONAL INFORMATION UNDER APPENDIX 2 TO ORDINANCE 2 OF FSC (CONTINUED)
20. Information about pending court, administrative or arbitration proceedings relating to liabilities or
receivables of the issuer, respectively by a person under § 1e of the Additional Provisions of the POSA of
an amount of at least 10 percent of its equity; if the total amount of the liabilities or receivables of the
issuer, respectively by a person under § 1e of the Additional Provisions of the POSA under all initiated
proceedings exceeds 10 per cent of its equity, information shall be submitted for each procedure
separately.
As at 31 December 2022, there were no pending courts, administrative or arbitration proceedings, involving the
Company, relating to liabilities of an amount of at least 10 percent of its equity.
21. For public entities - name of the Investor Relations Director, including telephone and address for
correspondence.
The person in charge of investor relations is Snezhana Petrova Baycheva,
Correspondence address: town of Strazhitsa, 28 Gladstone Street
е-mail: snezhana.baycheva@korado.bg, tel.: 06161 4245
22. Non-financial declaration under Art. 41 of the Accountancy Act - for financial statements on an
individual basis, respectively under Art. 51 of the Accountancy Act - for financial statements on a
consolidated basis, where applicable.
23. Other information at the discretion of the Company.
Changes in the price of the stocks of the Company
All shares of the issuer are registered and traded on Bulgarian Stock Exchange – Sofia AD, Premium Segment.
Number of shares in circulation: 13 168 614.
Issuer: KORADO Bulgaria AD
Stock exchange code: KBG(4KX)
ISIN code: BG11LUSTAT13
In the period 01.01.2022 – 31.12.2022 the issue of shares was traded as follows:
Turnover /BGN/: 442,778
Shares transferred 66,339
Number of transactions 450
According to BSE, the changes in the price of the Company's shares during 2022 are as follows:
minimum – BGN5.800
maximum – BGN7.600
average - BGN6.674
last – BGN6.100
The Company has submitted on time the required by the Public Information Act information to the Financial
Supervision Commission and the Bulgarian Stock Exchange. The disclosed public and internal information,
according to the Ordinance, is available to shareholders and investors on the company's website -www.korado.bg
и www.x3news.com.
KORADO – Bulgaria AD is aware that maintaining the trust and security of shareholders, employees, customers
and all the people it works with, as well as the communities in which it operates, is extremely important for the
Company's continued development and success.
ACTIVITY REPORT (CONTINUED)
For the year ended 31 December 2022
xxi
ADDITIONAL INFORMATION UNDER APPENDIX 2 TO ORDINANCE 2 OF FSC (CONTINUED)
20. Information about pending court, administrative or arbitration proceedings relating to liabilities or
receivables of the issuer, respectively by a person under § 1e of the Additional Provisions of the POSA of
an amount of at least 10 percent of its equity; if the total amount of the liabilities or receivables of the
issuer, respectively by a person under § 1e of the Additional Provisions of the POSA under all initiated
proceedings exceeds 10 per cent of its equity, information shall be submitted for each procedure
separately.
As at 31 December 2022, there were no pending courts, administrative or arbitration proceedings, involving the
Company, relating to liabilities of an amount of at least 10 percent of its equity.
21. For public entities - name of the Investor Relations Director, including telephone and address for
correspondence.
The person in charge of investor relations is Snezhana Petrova Baycheva,
Correspondence address: town of Strazhitsa, 28 Gladstone Street
е-mail: snezhana.baycheva@korado.bg, tel.: 06161 4245
22. Non-financial declaration under Art. 41 of the Accountancy Act - for financial statements on an
individual basis, respectively under Art. 51 of the Accountancy Act - for financial statements on a
consolidated basis, where applicable.
23. Other information at the discretion of the Company.
Changes in the price of the stocks of the Company
All shares of the issuer are registered and traded on Bulgarian Stock Exchange – Sofia AD, Premium Segment.
Number of shares in circulation: 13 168 614.
Issuer: KORADO Bulgaria AD
Stock exchange code: KBG(4KX)
ISIN code: BG11LUSTAT13
In the period 01.01.2022 – 31.12.2022 the issue of shares was traded as follows:
Turnover /BGN/: 442,778
Shares transferred 66,339
Number of transactions 450
According to BSE, the changes in the price of the Company's shares during 2022 are as follows:
minimum – BGN5.800
maximum – BGN7.600
average - BGN6.674
last – BGN6.100
The Company has submitted on time the required by the Public Information Act information to the Financial
Supervision Commission and the Bulgarian Stock Exchange. The disclosed public and internal information,
according to the Ordinance, is available to shareholders and investors on the company's website -www.korado.bg
и www.x3news.com.
KORADO – Bulgaria AD is aware that maintaining the trust and security of shareholders, employees, customers
and all the people it works with, as well as the communities in which it operates, is extremely important for the
Company's continued development and success.
KORADO-BULGARIA AD
ACTIVITY REPORT (CONTINUED)
For the year ended 31 December 2022
xxii
ADDITIONAL INFORMATION UNDER APPENDIX 2 TO ORDINANCE 2 OF FSC (CONTINUED)
The following graph shows the movements in the price of the Company’s shares in 2022:
The Company timely submitted to FSC and BSE the statutory information within the relevant deadlines.
ANALYSIS AND EXPLANATION OF INFORMATION PURSUANT TO APPENDIX 3 TO ORDINANCE
2 OF FSC
1. Information about securities that have not been admitted to trading on a regulated market in the
Republic of Bulgaria or another Member State.
As of December 31, 2022, the Company has not issued securities that have not been admitted to trading on a
regulated market in the Republic of Bulgaria or another Member State.
2. Information about the direct and indirect holding of 5 or more per cent of the voting rights at the
General Meeting of the Company, including information about the shareholders, the amount of their
shareholding and the manner in which the shares are owned.
More than 5 per cent of the shares of the Company are held directly only by the shareholder KORADO a.s.
Czech Republic. This shareholder is registered with the Register of the local court Hradec Králové, Section B,
Batch 1500, Date of entry: 01 September 1996, UIC 25255843 /according to the system of Czech Republic/,
with registered address and address of management: Czech Republic, město ČeskáTřebová, okres Ústínad Orlicí,
ulice Bří Hubálku 869, Postal Code 560 02.
The amount of the shareholding of this shareholder as of 31.12.2022 includes 10 817 923 shares, or 82.15% of
the total shares of the Company.
3. Information about the shareholders with special control rights and description of these rights
There are no shareholders with special control rights.
4. Agreements among the shareholders, which are known to the Company and which may result in
limitations over the transfer of shares or the voting right.
The Company is not aware of and it has not been notified of any agreements among the shareholders, which may
result in limitations over the transfer of shares and/or the voting rights.
ACTIVITY REPORT (CONTINUED)
For the year ended 31 December 2022
xxii
ADDITIONAL INFORMATION UNDER APPENDIX 2 TO ORDINANCE 2 OF FSC (CONTINUED)
The following graph shows the movements in the price of the Company’s shares in 2022:
The Company timely submitted to FSC and BSE the statutory information within the relevant deadlines.
ANALYSIS AND EXPLANATION OF INFORMATION PURSUANT TO APPENDIX 3 TO ORDINANCE
2 OF FSC
1. Information about securities that have not been admitted to trading on a regulated market in the
Republic of Bulgaria or another Member State.
As of December 31, 2022, the Company has not issued securities that have not been admitted to trading on a
regulated market in the Republic of Bulgaria or another Member State.
2. Information about the direct and indirect holding of 5 or more per cent of the voting rights at the
General Meeting of the Company, including information about the shareholders, the amount of their
shareholding and the manner in which the shares are owned.
More than 5 per cent of the shares of the Company are held directly only by the shareholder KORADO a.s.
Czech Republic. This shareholder is registered with the Register of the local court Hradec Králové, Section B,
Batch 1500, Date of entry: 01 September 1996, UIC 25255843 /according to the system of Czech Republic/,
with registered address and address of management: Czech Republic, město ČeskáTřebová, okres Ústínad Orlicí,
ulice Bří Hubálku 869, Postal Code 560 02.
The amount of the shareholding of this shareholder as of 31.12.2022 includes 10 817 923 shares, or 82.15% of
the total shares of the Company.
3. Information about the shareholders with special control rights and description of these rights
There are no shareholders with special control rights.
4. Agreements among the shareholders, which are known to the Company and which may result in
limitations over the transfer of shares or the voting right.
The Company is not aware of and it has not been notified of any agreements among the shareholders, which may
result in limitations over the transfer of shares and/or the voting rights.
KORADO-BULGARIA AD
ACTIVITY REPORT (CONTINUED)
For the year ended 31 December 2022
xxiii
ANALYSIS AND EXPLANATION OF INFORMATION PURSUANT TO APPENDIX 3 TO ORDINANCE
2 OF FSC (CONTINUED)
5. Significant contracts of the Company which give rise to action, have been amended or terminated due to
change in the control of the Company upon carrying out of obligatory tender offer and the consequences
thereof, save for the cases when the disclosure of such information may cause serious damages to the
Company; the exception of the previous sentence shall not apply in the cases when the Company must
disclose information by virtue of the law.
The Company has no significant contracts concluded, which correspond to the type and nature described herein,
including giving rise to action upon the occurrence of these conditions.
FUTURE DEVELOPMENT PERSPECTIVES
Management has set the following goals to be achieved in 2023:
Maintenance and increase of the production volume;
Seeking new partners in order to increase the sales on the Bulgarian market and most of all, of radiators
manufactured by using new technology;
Preserving the share of trade in heating units on the Bulgarian market;
Maintaining the volume of sales at least at the level achieved in 2022 in the territories in which KORADO-
Bulgaria AD recently conducts its sales (Romania, France, Hungary, Tunisia and Greece);
Full utilization of all benefits of the memberships in KORADO Group.
KORADO-Bulgaria AD strives for high standards in its activity, aiming to maintain and develop its long-term
positions in the competitive environment in which it has chosen to operate. We are committed to contributing to
the sustainable development of society. This requires striking a balance between short-term and long-term
interests and taking all economic, environmental and social considerations into account when making business
decisions.
MANAGEMENT’S RESPONSIBILITIES
Management is required by Bulgarian legislation to prepare financial statements each financial year that give a
true and fair view of the financial position of the Company as at the year end and of its financial performance
and its cash-flows for the year then ended in accordance with IFRS.
Management confirms that appropriate accounting policies have been used and applied consistently and that
reasonable and prudent judgments and estimates have been used in the preparation of the financial statements for
the year ended 31 December 2022. Management also confirms that all applicable accounting standards have
been followed and that the financial statements have been prepared on a going concern basis.
Management is responsible for keeping proper accounting records, for safeguarding the assets of the Company
and for taking reasonable steps for the prevention and detection of fraud and other irregularities.
JIRI REZNICEK
Executive Director
KORADO-Bulgaria AD
Town of Strazhitsa
20 March 2023
ACTIVITY REPORT (CONTINUED)
For the year ended 31 December 2022
xxiii
ANALYSIS AND EXPLANATION OF INFORMATION PURSUANT TO APPENDIX 3 TO ORDINANCE
2 OF FSC (CONTINUED)
5. Significant contracts of the Company which give rise to action, have been amended or terminated due to
change in the control of the Company upon carrying out of obligatory tender offer and the consequences
thereof, save for the cases when the disclosure of such information may cause serious damages to the
Company; the exception of the previous sentence shall not apply in the cases when the Company must
disclose information by virtue of the law.
The Company has no significant contracts concluded, which correspond to the type and nature described herein,
including giving rise to action upon the occurrence of these conditions.
FUTURE DEVELOPMENT PERSPECTIVES
Management has set the following goals to be achieved in 2023:
Maintenance and increase of the production volume;
Seeking new partners in order to increase the sales on the Bulgarian market and most of all, of radiators
manufactured by using new technology;
Preserving the share of trade in heating units on the Bulgarian market;
Maintaining the volume of sales at least at the level achieved in 2022 in the territories in which KORADO-
Bulgaria AD recently conducts its sales (Romania, France, Hungary, Tunisia and Greece);
Full utilization of all benefits of the memberships in KORADO Group.
KORADO-Bulgaria AD strives for high standards in its activity, aiming to maintain and develop its long-term
positions in the competitive environment in which it has chosen to operate. We are committed to contributing to
the sustainable development of society. This requires striking a balance between short-term and long-term
interests and taking all economic, environmental and social considerations into account when making business
decisions.
MANAGEMENT’S RESPONSIBILITIES
Management is required by Bulgarian legislation to prepare financial statements each financial year that give a
true and fair view of the financial position of the Company as at the year end and of its financial performance
and its cash-flows for the year then ended in accordance with IFRS.
Management confirms that appropriate accounting policies have been used and applied consistently and that
reasonable and prudent judgments and estimates have been used in the preparation of the financial statements for
the year ended 31 December 2022. Management also confirms that all applicable accounting standards have
been followed and that the financial statements have been prepared on a going concern basis.
Management is responsible for keeping proper accounting records, for safeguarding the assets of the Company
and for taking reasonable steps for the prevention and detection of fraud and other irregularities.
JIRI REZNICEK
Executive Director
KORADO-Bulgaria AD
Town of Strazhitsa
20 March 2023
KORADO-BULGARIA AD
CORPORATE GOVERNANCE STATEMENT
31 December 2022
xxiv
CORPORATE GOVERNANCE STATEMENT FOR 2022
OF KORADO– Bulgaria AD
The undersigned,
Jiri Reznicek , in my capacity as a representative of KORADO – Bulgaria AD , a company, incorporated and
existing in accordance with the laws of the Republic of Bulgaria, with head office and address of management in
Veliko Tarnovo Region, Strazhitsa Municipality, town of Strazhitsa 5150, 28 Gladstone Street, registered with
the Commercial Register of the Registry Agency under UIC814190902 (hereinafter referred to as the
„Company”),
HEREBY DECLARE:
I. Substance and subject-matter of the Corporate Governance Statement
1. This Corporate Governance Statement (hereinafter referred to as the „ Statement ”) has been prepared in
accordance with Article 100 m, paragraphs 7 and 8 of POSA and Article 40, paragraphs 1 and 2 of the
Accountancy Act and forms an integral part of the annual management report on the Company’s activity for the
period 01 January 2022 – 31 December 2022 (hereinafter referred to as the „ Reporting period ”). The purpose of
the Statement is to provide information on the higher criteria and standards implemented by the Company in the
area of corporate governance, which the Company intends to implement in future as well. In pursuance with the
legal requirements, the Company has published its Statement on the website at: www.korado.bg.
II. Compliance with the Code of Corporate Governance
2. The Company is guided by the principles of good corporate governance. Pursuant to a decision of the
Management Board of the Company, as of September 2017 the Company observes, as appropriate, the National
Corporate Governance Code (hereinafter referred to as the „NCGC”) . Being a member of KORADO Group, the
Company complies with any and all internal corporate governance regulations. These regulations include, among
others, also:
(a) . Corporate governance key principles policy;
(b) . Code of Ethics; and
(c). Prevention of corruptive practices rules.
The above internal regulations have been developed in compliance with the effective legislation, the provisions
of the Articles of Association of the Company, NCGC, and the corporate governance principles of the
Organisation of Economic Cooperation and Development. By applying these regulations, the Company ensures
full compliance with corporate governance best practices and standards.
The Company applies the following mandatory requirements:
• protection of shareholders' rights;
• ensuring fair treatment of all shareholders irrespective of the number of shares held by the m;
• recognition of stakeholders' rights and promotion of cooperation between the Company and
stakeholders;
• ensuring timely and accurate disclosure of information on all matters relating to the Company,
including with regard to its financial performance, property and management;
• ensuring effective control of Company's management and supervisory bodies and reporting to
shareholders.
3. Good corporate governance standards are applied based on the principle “comply or explain”. This
requires that in case of deviation from the standards the corporate management of the Company to explain the
reasons for the deviation and to disclose the m. During the reporting period, there were no deviations or
indications of possible deviations.
CORPORATE GOVERNANCE STATEMENT
31 December 2022
xxiv
CORPORATE GOVERNANCE STATEMENT FOR 2022
OF KORADO– Bulgaria AD
The undersigned,
Jiri Reznicek , in my capacity as a representative of KORADO – Bulgaria AD , a company, incorporated and
existing in accordance with the laws of the Republic of Bulgaria, with head office and address of management in
Veliko Tarnovo Region, Strazhitsa Municipality, town of Strazhitsa 5150, 28 Gladstone Street, registered with
the Commercial Register of the Registry Agency under UIC814190902 (hereinafter referred to as the
„Company”),
HEREBY DECLARE:
I. Substance and subject-matter of the Corporate Governance Statement
1. This Corporate Governance Statement (hereinafter referred to as the „ Statement ”) has been prepared in
accordance with Article 100 m, paragraphs 7 and 8 of POSA and Article 40, paragraphs 1 and 2 of the
Accountancy Act and forms an integral part of the annual management report on the Company’s activity for the
period 01 January 2022 – 31 December 2022 (hereinafter referred to as the „ Reporting period ”). The purpose of
the Statement is to provide information on the higher criteria and standards implemented by the Company in the
area of corporate governance, which the Company intends to implement in future as well. In pursuance with the
legal requirements, the Company has published its Statement on the website at: www.korado.bg.
II. Compliance with the Code of Corporate Governance
2. The Company is guided by the principles of good corporate governance. Pursuant to a decision of the
Management Board of the Company, as of September 2017 the Company observes, as appropriate, the National
Corporate Governance Code (hereinafter referred to as the „NCGC”) . Being a member of KORADO Group, the
Company complies with any and all internal corporate governance regulations. These regulations include, among
others, also:
(a) . Corporate governance key principles policy;
(b) . Code of Ethics; and
(c). Prevention of corruptive practices rules.
The above internal regulations have been developed in compliance with the effective legislation, the provisions
of the Articles of Association of the Company, NCGC, and the corporate governance principles of the
Organisation of Economic Cooperation and Development. By applying these regulations, the Company ensures
full compliance with corporate governance best practices and standards.
The Company applies the following mandatory requirements:
• protection of shareholders' rights;
• ensuring fair treatment of all shareholders irrespective of the number of shares held by the m;
• recognition of stakeholders' rights and promotion of cooperation between the Company and
stakeholders;
• ensuring timely and accurate disclosure of information on all matters relating to the Company,
including with regard to its financial performance, property and management;
• ensuring effective control of Company's management and supervisory bodies and reporting to
shareholders.
3. Good corporate governance standards are applied based on the principle “comply or explain”. This
requires that in case of deviation from the standards the corporate management of the Company to explain the
reasons for the deviation and to disclose the m. During the reporting period, there were no deviations or
indications of possible deviations.
KORADO-BULGARIA AD
CORPORATE GOVERNANCE STATEMENT (CONTINUED)
31 December 2022
xxv
4. In addition to the above internal regulations, the Company has developed and operate effectively the
following corporate governance policies and documents:
(a). Rules of Activity of the Management Board and the Supervisory Board (hereinafter referred to as
„MB” and „SB ”, respectively) ;
(b). Internal control and risk management systems, and financial and information system;
(c). Remuneration policy applicable to the members of MB and SB; and
(d) . Policy of diversity with respect to the governing, managing, and supervisory authorities of the
Company.
During the Reporting period, there were no deviations from the requirements of the se company regulations.
5. The Company has implemented a Quality Management System according to ISO 9001:2015 system
standard. The system guarantees a much better quality through the continuous improvement of process
management.
III. Internal control system
6. The Company has developed and implemented an internal control system. The operating activity in this
field is entrusted to a specialist internal group unit – Internal Audit Department, which is part of the structure of
the majority shareholder, KORADO a.s., Czech Republic, and performs the Group’s activity. The activities are
subject to an audit plan prepared annually, which contains a description of the envisaged audit engagements in
terms of: scope, duration, organisers and participants in the engagement; and estimated results. the Internal Audit
Department prepares a report on the completed audit engagement, which contains the main findings, proposed
corrective measures and the subsequent activities to be carried out after the audit completion.
The Internal Audit Department reports on its activity to the Audit Committee of the Company. The reporting is
carried out on an ongoing basis at the regular and extraordinary meetings of the Audit Committee. The
summarized findings of the Audit Committee from the reporting of the Internal Audit Department are included
in the annual report on the activity of the Audit Committee, which is prepared and submitted to the General
Meeting of Shareholders of the Company for approval (hereinafter referred to as the „GMS” ).
7. In the process of financial reporting for the Reporting period, the internal control takes the form of stock
taking /check-ups of inventories, work in progress, and cash, which are carried out regularly (on a monthly or
quarterly basis). At the end of every financial year, the balances of the Company – receivables and payables, are
checked-up as well. Accounting adjustments are made currently, according to the inventory lists expressed in
values.
8. The internal control system has been organised and implemented in such a way as to ensure, to the
extent necessary, that:
• the Company adheres to the statutory accounting requirements, observing the applicable legislation and
accounting standards, and during the reporting period these are the International Financial Reporting Standards
adopted for implementation in the European Union;
• the necessary level of awareness of the relevant addressees of financial information is ensured and
maintained;
• the relevant transparency and completeness requirements of financial information and the principle of
documentary reasoning are complied with; and
• a set of basic principles are respected by persons engaged in financial accounting, including objectivity,
impartiality, independence and transparency.
9. In general, the internal control system ensures efficient reporting and disclosure of information in view
of identifying the risks inherent to the Company’s activity.
CORPORATE GOVERNANCE STATEMENT (CONTINUED)
31 December 2022
xxv
4. In addition to the above internal regulations, the Company has developed and operate effectively the
following corporate governance policies and documents:
(a). Rules of Activity of the Management Board and the Supervisory Board (hereinafter referred to as
„MB” and „SB ”, respectively) ;
(b). Internal control and risk management systems, and financial and information system;
(c). Remuneration policy applicable to the members of MB and SB; and
(d) . Policy of diversity with respect to the governing, managing, and supervisory authorities of the
Company.
During the Reporting period, there were no deviations from the requirements of the se company regulations.
5. The Company has implemented a Quality Management System according to ISO 9001:2015 system
standard. The system guarantees a much better quality through the continuous improvement of process
management.
III. Internal control system
6. The Company has developed and implemented an internal control system. The operating activity in this
field is entrusted to a specialist internal group unit – Internal Audit Department, which is part of the structure of
the majority shareholder, KORADO a.s., Czech Republic, and performs the Group’s activity. The activities are
subject to an audit plan prepared annually, which contains a description of the envisaged audit engagements in
terms of: scope, duration, organisers and participants in the engagement; and estimated results. the Internal Audit
Department prepares a report on the completed audit engagement, which contains the main findings, proposed
corrective measures and the subsequent activities to be carried out after the audit completion.
The Internal Audit Department reports on its activity to the Audit Committee of the Company. The reporting is
carried out on an ongoing basis at the regular and extraordinary meetings of the Audit Committee. The
summarized findings of the Audit Committee from the reporting of the Internal Audit Department are included
in the annual report on the activity of the Audit Committee, which is prepared and submitted to the General
Meeting of Shareholders of the Company for approval (hereinafter referred to as the „GMS” ).
7. In the process of financial reporting for the Reporting period, the internal control takes the form of stock
taking /check-ups of inventories, work in progress, and cash, which are carried out regularly (on a monthly or
quarterly basis). At the end of every financial year, the balances of the Company – receivables and payables, are
checked-up as well. Accounting adjustments are made currently, according to the inventory lists expressed in
values.
8. The internal control system has been organised and implemented in such a way as to ensure, to the
extent necessary, that:
• the Company adheres to the statutory accounting requirements, observing the applicable legislation and
accounting standards, and during the reporting period these are the International Financial Reporting Standards
adopted for implementation in the European Union;
• the necessary level of awareness of the relevant addressees of financial information is ensured and
maintained;
• the relevant transparency and completeness requirements of financial information and the principle of
documentary reasoning are complied with; and
• a set of basic principles are respected by persons engaged in financial accounting, including objectivity,
impartiality, independence and transparency.
9. In general, the internal control system ensures efficient reporting and disclosure of information in view
of identifying the risks inherent to the Company’s activity.
KORADO-BULGARIA AD
CORPORATE GOVERNANCE STATEMENT (CONTINUED)
31 December 2022
xxvi
IV. Risk management system
10. The Company has developed and implemented a risk management system. The operating activity in this
field is entrusted to a specialist internal group unit – Risk Management Department, which is part of the structure
of the majority shareholder, KORADO a.s., Czech Republic, and performs the Group’s activity. The activity
consists of identification, measurement and assessment of risks inherent to the Company’s operations. It shall
also ensure the effective functioning of the reporting and disclosure activities. The Risk Management
Department prepares a report on the assessment and reports on its activity to the Audit Committee at its regular
and extraordinary meetings. The summarized findings of the Audit Committee from the reporting of the
Department are included in the annual report on the activity of the Audit Committee.
11. In making its investment decision the corporate management of the Company aims at improving the
operational and financial stability of the Company, and achieving a validity by employing the results of current
and future risk analyses.
V. Composition and functioning of the administrative, management and supervisory bodies and
committee
12. The Company has a two-tier system of governance and strictly adheres to the principles of
transparency, independence and liability of the corporate management. This system includes the following
bodies:
• SB comprises 4 (four) members, including 2 /two/ independent members in accordance with the
requirements of Article 116a, paragraph 2 of POSA. SB operates in compliance with the Articles of Association
of the Company and the Rules of Activity of the SB.
• MB comprises 3 (three) members. MB operates in compliance with the Articles of Association of the
Company and the Rules of Activity of the MB.
13. The SB and MB are structured in a way that guarantees the professionalism, impartiality and
independence of the decisions and actions of their members in relation to the governance and control of the
management of the Company.
14. The MB and SB ensure a proper segregation of the functions and responsibilities of their members,
subject to the principle of equal right and under the legal requirements, as well as effective participation in the
management of the Company in accordance with the interests and rights of shareholders.
15. The members of the MB and SB are elected in a transparent manner, providing timely information
insufficient capacity on the personal and professional qualities of each candidate for a member of the Board in
order to ensure that the relevant competent body of the Company will make an informed decision.
16. If a proposal for the election of a new member of the Board is made, the principles of compliance and
competence of applicants with the nature of the Company's activities and the nature of the functions and /or
powers assigned are respected.
17. The members of the MB and SB of the Company have the necessary qualifications, knowledge and
experience to perform properly, in compliance with the highest professional standards, their obligations. The
Company stimulates the qualification upgrading of the members of the MB and SB, and when a new member is
to be elected, he/she is acquainted with the Company's overall activity, its financial performance and the main
legal aspects related to business operations.
18. In their activity, the members of SB and MB apply the principle of avoidance and prevention of any real
or potential conflicts of interest. Moreover, they are obliged to immediately disclose a conflict of interest and to
provide shareholders with information about transactions between Company and a Board member or his/her
related parties. The procedure for the avoidance and disclosure of conflicts of interest is governed by the
regulations enumerated in clauses 2-4 of the Statement.
CORPORATE GOVERNANCE STATEMENT (CONTINUED)
31 December 2022
xxvi
IV. Risk management system
10. The Company has developed and implemented a risk management system. The operating activity in this
field is entrusted to a specialist internal group unit – Risk Management Department, which is part of the structure
of the majority shareholder, KORADO a.s., Czech Republic, and performs the Group’s activity. The activity
consists of identification, measurement and assessment of risks inherent to the Company’s operations. It shall
also ensure the effective functioning of the reporting and disclosure activities. The Risk Management
Department prepares a report on the assessment and reports on its activity to the Audit Committee at its regular
and extraordinary meetings. The summarized findings of the Audit Committee from the reporting of the
Department are included in the annual report on the activity of the Audit Committee.
11. In making its investment decision the corporate management of the Company aims at improving the
operational and financial stability of the Company, and achieving a validity by employing the results of current
and future risk analyses.
V. Composition and functioning of the administrative, management and supervisory bodies and
committee
12. The Company has a two-tier system of governance and strictly adheres to the principles of
transparency, independence and liability of the corporate management. This system includes the following
bodies:
• SB comprises 4 (four) members, including 2 /two/ independent members in accordance with the
requirements of Article 116a, paragraph 2 of POSA. SB operates in compliance with the Articles of Association
of the Company and the Rules of Activity of the SB.
• MB comprises 3 (three) members. MB operates in compliance with the Articles of Association of the
Company and the Rules of Activity of the MB.
13. The SB and MB are structured in a way that guarantees the professionalism, impartiality and
independence of the decisions and actions of their members in relation to the governance and control of the
management of the Company.
14. The MB and SB ensure a proper segregation of the functions and responsibilities of their members,
subject to the principle of equal right and under the legal requirements, as well as effective participation in the
management of the Company in accordance with the interests and rights of shareholders.
15. The members of the MB and SB are elected in a transparent manner, providing timely information
insufficient capacity on the personal and professional qualities of each candidate for a member of the Board in
order to ensure that the relevant competent body of the Company will make an informed decision.
16. If a proposal for the election of a new member of the Board is made, the principles of compliance and
competence of applicants with the nature of the Company's activities and the nature of the functions and /or
powers assigned are respected.
17. The members of the MB and SB of the Company have the necessary qualifications, knowledge and
experience to perform properly, in compliance with the highest professional standards, their obligations. The
Company stimulates the qualification upgrading of the members of the MB and SB, and when a new member is
to be elected, he/she is acquainted with the Company's overall activity, its financial performance and the main
legal aspects related to business operations.
18. In their activity, the members of SB and MB apply the principle of avoidance and prevention of any real
or potential conflicts of interest. Moreover, they are obliged to immediately disclose a conflict of interest and to
provide shareholders with information about transactions between Company and a Board member or his/her
related parties. The procedure for the avoidance and disclosure of conflicts of interest is governed by the
regulations enumerated in clauses 2-4 of the Statement.
KORADO-BULGARIA AD
CORPORATE GOVERNANCE STATEMENT (CONTINUED)
31 December 2022
xxvii
V. Composition and functioning of the administrative, management and supervisory bodies and
committee (continued)
19. The members of the MB and SB should fulfill their obligations with the care of responsible merchant
ship, in a manner that the y believe is in the interest of all shareholders of the Company, and to prefer the
interests of the Company and shareholders and /or investors in the Company to their own interests. The members
of the MB and SB should avoid direct or indirect conflicts between their own interest and the interest of the
Company or, should any such conflicts arise, to disclose the said conflicts promptly and fully in writing to the
competent body and not participating nor exerting influence on the rest of the members of the SB, and
respectively the MB, indecision-making in such cases.
20. The members of the MB and SB are obliged to protect Company's trade secrets and not to disclose non-
public information even after they cease to be members of the relevant bodies until public disclosure of the
relevant circumstances by the Company.
21. In compliance with the requirements of article 114b, paragraph 1 of the Public Offering of Securities
Act, the members of the MB and SB are obligated to disclose to the Company, as well as to the Financial
Supervision Commission and Bulgarian Stock Exchange-Sofia, information regarding:
• The legal persons where in the said persons hold, directly or indirectly, at least25 percent of the voting
rightsin the General Meeting or which the said persons control;
• The legal persons where of the said persons are members of the management bodies or supervisory
bodies or managerial agents;
• Any current and future transactions of which they are aware and in which, in their opinion, the said
persons may be treated as interested parties.
22. The MB and SB convene at regular meetings at least once every three months. Incompliance with the
requirements of the law and Articles of Association of the Company, MB and SB may also take their resolutions
non-attended.
23. Minutes shall be drawn up for all decisions of the MB and SB, which shall be signed by the members of
the relevant board who have attended the meeting (in the case of resolutions attended), respectively by all
members of the relevant board (in case of resolutions non-attended). The minutes shall be recorded and kept by
the Investors Relation Director of the Company, who is responsible for their accuracy and completeness.
24. The minutes of MB and SB meetings shall constitute a trade secret. Facts and circumstances thereof
may be published, disclosed or presented in any way to the knowledge of third parties/outside the members of
the SB only incompliance with a statutory requirement or by a decision of the MB and respectively, of the SB.
25. The SB shall be entitled to authorize one or more of its members to participate in meetings of the MB
of the Company, and to receive materials and information identical to that of the members of the MB. The SB
may at any time ask the MB to provide information or report on any matter affecting the Company. The SB, at
least once every three months, listens to a report of the MB on the Company's activities.
26. The members of the MB and SB are obliged to lodge a management guarantee within seven days of
their election. The amount of the guarantee is determined by the General Meeting of Shareholders and may not
be less than the 3-month gross remuneration of the relevant member of the MB, respectively the SB.
27. The Audit Committee is a specialised, mandatory for the Company body, which has its own
operational rules and work schedule. Its activity aims improving effectiveness of financial reporting processes,
internal control systems and risk management. The Audit Committee makes a substantiated proposal to the
General Meeting of Shareholders for the election of an external auditor and monitors the independent financial
audit of the Company.
28. At 31 December 2022 the Audit Committee consists of three persons.
29. The members of the Audit Committee have the necessary qualifications and professional expertise to
perform properly, in compliance with corporate governance best practices, their functions.
CORPORATE GOVERNANCE STATEMENT (CONTINUED)
31 December 2022
xxvii
V. Composition and functioning of the administrative, management and supervisory bodies and
committee (continued)
19. The members of the MB and SB should fulfill their obligations with the care of responsible merchant
ship, in a manner that the y believe is in the interest of all shareholders of the Company, and to prefer the
interests of the Company and shareholders and /or investors in the Company to their own interests. The members
of the MB and SB should avoid direct or indirect conflicts between their own interest and the interest of the
Company or, should any such conflicts arise, to disclose the said conflicts promptly and fully in writing to the
competent body and not participating nor exerting influence on the rest of the members of the SB, and
respectively the MB, indecision-making in such cases.
20. The members of the MB and SB are obliged to protect Company's trade secrets and not to disclose non-
public information even after they cease to be members of the relevant bodies until public disclosure of the
relevant circumstances by the Company.
21. In compliance with the requirements of article 114b, paragraph 1 of the Public Offering of Securities
Act, the members of the MB and SB are obligated to disclose to the Company, as well as to the Financial
Supervision Commission and Bulgarian Stock Exchange-Sofia, information regarding:
• The legal persons where in the said persons hold, directly or indirectly, at least25 percent of the voting
rightsin the General Meeting or which the said persons control;
• The legal persons where of the said persons are members of the management bodies or supervisory
bodies or managerial agents;
• Any current and future transactions of which they are aware and in which, in their opinion, the said
persons may be treated as interested parties.
22. The MB and SB convene at regular meetings at least once every three months. Incompliance with the
requirements of the law and Articles of Association of the Company, MB and SB may also take their resolutions
non-attended.
23. Minutes shall be drawn up for all decisions of the MB and SB, which shall be signed by the members of
the relevant board who have attended the meeting (in the case of resolutions attended), respectively by all
members of the relevant board (in case of resolutions non-attended). The minutes shall be recorded and kept by
the Investors Relation Director of the Company, who is responsible for their accuracy and completeness.
24. The minutes of MB and SB meetings shall constitute a trade secret. Facts and circumstances thereof
may be published, disclosed or presented in any way to the knowledge of third parties/outside the members of
the SB only incompliance with a statutory requirement or by a decision of the MB and respectively, of the SB.
25. The SB shall be entitled to authorize one or more of its members to participate in meetings of the MB
of the Company, and to receive materials and information identical to that of the members of the MB. The SB
may at any time ask the MB to provide information or report on any matter affecting the Company. The SB, at
least once every three months, listens to a report of the MB on the Company's activities.
26. The members of the MB and SB are obliged to lodge a management guarantee within seven days of
their election. The amount of the guarantee is determined by the General Meeting of Shareholders and may not
be less than the 3-month gross remuneration of the relevant member of the MB, respectively the SB.
27. The Audit Committee is a specialised, mandatory for the Company body, which has its own
operational rules and work schedule. Its activity aims improving effectiveness of financial reporting processes,
internal control systems and risk management. The Audit Committee makes a substantiated proposal to the
General Meeting of Shareholders for the election of an external auditor and monitors the independent financial
audit of the Company.
28. At 31 December 2022 the Audit Committee consists of three persons.
29. The members of the Audit Committee have the necessary qualifications and professional expertise to
perform properly, in compliance with corporate governance best practices, their functions.
KORADO-BULGARIA AD
CORPORATE GOVERNANCE STATEMENT (CONTINUED)
31 December 2022
xxviii
VI. Remuneration of the members of the MB and SB
30. In accordance with the legal requirements and the normal corporate governance standards adopted, the
amount and structure of remuneration determined in accordance with the Remuneration policy of the members of
the MB and SB shall take into consideration:
• The obligations, responsibilities and contribution of each of the members of the Boards to the activities
and performance of the Company;
• The qualifications and professional experience of the Board members and the need to retain in the
Company the most qualified and loyal members;
• The need to match the interests of the Board members with the long-term interests of the Company,
with remuneration being formed on the basis of Company's performance and in line with Company's business
strategy, objectives, values and long-term business plans;
• Remuneration and bonuses (to the extent applicable) of the members of the MB and SB are determined
by the GMS.
VII. Policy of diversity
31. The company shall devote the necessary efforts to prevent discrimination and to ensure equal
opportunities for recruitment, regardless of gender, race, nationality, ethnic origin, human genome, citizenship,
religion or belief, education, beliefs, political affiliation, personal or social situation, disability, age, sexual
orientation, family status, property situation or any other signs laid down in the applicable legislation.
32. The main criteria and principles of the Policy of diversity in the selection and assessment of the
members of the administrative, management and supervisory bodies of the Company are:
• members of these bodies can be natural persons and legal entities having legal capacity, without any
restrictions in terms of age, gender, nationality, education;
• only non-discriminatory criteria may be applied as requirements for the appointment of members of
these bodies, such as: good reputation, professional experience and managerial skills, depending on the
complexity and specifics of the Company’s operations; and
• The following are also among the goals for achieving compliance with the principles of diversity in the
Company’s management: independence and objectivity in expression of opinions, taking into account of
maximum wide scope of views and interests of a maximum wide range of social groups upon taking decisions,
etc.
33. The Company complies with the principle of diversity with respect to the composition of its corporate
bodies. The MB of the Company, by its decision dated 1 March 2017, adopted a Policy of diversity.
34. No cases of discrimination were found in the Company during the reporting period.
VIII. Protection of shareholders’ rights
35. The corporate management of the Company guarantees equal treatment of all shareholders, including
minority and foreign shareholders, and protects their rights. All shareholders have the right to participate in the
GMS and to express their opinion in person or through proxies. The procedures and order of holding GMS
facilitates at maximum the shareholders and comply with the principle of undue obstruction or unnecessary
increase in costs. Actions shall be taken to encourage the participation of minority shareholders in the GMS. the
corporate management shall endeavor to provide at least one MB and SB representative to each GMS to provide
information to shareholders and to answer the questions raised in the field of his/her competence and in
accordance with the requirements of the law.
36. The shareholders have been informed of the rules of convocation and holding a GMS, and of the right
to add items to the agenda of a convened GMS and /or to make alternative proposals for a resolution on items
already included in the agenda, in strict compliance with any legal restrictions.
CORPORATE GOVERNANCE STATEMENT (CONTINUED)
31 December 2022
xxviii
VI. Remuneration of the members of the MB and SB
30. In accordance with the legal requirements and the normal corporate governance standards adopted, the
amount and structure of remuneration determined in accordance with the Remuneration policy of the members of
the MB and SB shall take into consideration:
• The obligations, responsibilities and contribution of each of the members of the Boards to the activities
and performance of the Company;
• The qualifications and professional experience of the Board members and the need to retain in the
Company the most qualified and loyal members;
• The need to match the interests of the Board members with the long-term interests of the Company,
with remuneration being formed on the basis of Company's performance and in line with Company's business
strategy, objectives, values and long-term business plans;
• Remuneration and bonuses (to the extent applicable) of the members of the MB and SB are determined
by the GMS.
VII. Policy of diversity
31. The company shall devote the necessary efforts to prevent discrimination and to ensure equal
opportunities for recruitment, regardless of gender, race, nationality, ethnic origin, human genome, citizenship,
religion or belief, education, beliefs, political affiliation, personal or social situation, disability, age, sexual
orientation, family status, property situation or any other signs laid down in the applicable legislation.
32. The main criteria and principles of the Policy of diversity in the selection and assessment of the
members of the administrative, management and supervisory bodies of the Company are:
• members of these bodies can be natural persons and legal entities having legal capacity, without any
restrictions in terms of age, gender, nationality, education;
• only non-discriminatory criteria may be applied as requirements for the appointment of members of
these bodies, such as: good reputation, professional experience and managerial skills, depending on the
complexity and specifics of the Company’s operations; and
• The following are also among the goals for achieving compliance with the principles of diversity in the
Company’s management: independence and objectivity in expression of opinions, taking into account of
maximum wide scope of views and interests of a maximum wide range of social groups upon taking decisions,
etc.
33. The Company complies with the principle of diversity with respect to the composition of its corporate
bodies. The MB of the Company, by its decision dated 1 March 2017, adopted a Policy of diversity.
34. No cases of discrimination were found in the Company during the reporting period.
VIII. Protection of shareholders’ rights
35. The corporate management of the Company guarantees equal treatment of all shareholders, including
minority and foreign shareholders, and protects their rights. All shareholders have the right to participate in the
GMS and to express their opinion in person or through proxies. The procedures and order of holding GMS
facilitates at maximum the shareholders and comply with the principle of undue obstruction or unnecessary
increase in costs. Actions shall be taken to encourage the participation of minority shareholders in the GMS. the
corporate management shall endeavor to provide at least one MB and SB representative to each GMS to provide
information to shareholders and to answer the questions raised in the field of his/her competence and in
accordance with the requirements of the law.
36. The shareholders have been informed of the rules of convocation and holding a GMS, and of the right
to add items to the agenda of a convened GMS and /or to make alternative proposals for a resolution on items
already included in the agenda, in strict compliance with any legal restrictions.
KORADO-BULGARIA AD
CORPORATE GOVERNANCE STATEMENT (CONTINUED)
31 December 2022
xxix
VIII. Protection of shareholders’ rights (continued)
37. Materials on the agenda items shall be made available to the shareholders in a timely manner. These
materials shall be fair and clear as far as possible. Thus, it is guaranteed that informed decisions will be passed
and the shareholders will not be misled.
38. All shareholders of one class are treated equally.
39. In compliance with the requirements of article 114b, paragraph 1 of the Public Offering of Securities
Act, the persons holding, directly or indirectly, at least 25 percent of the votes in the General Meeting of the
Company or controlling the Company, are obligated to disclose to the Company, as well as to the Financial
Supervision Commission and Bulgarian Stock Exchange-Sofia, information regarding:
• the legal persons where in the said persons hold, directly or indirectly, at least 25 percent of the votes
in the General Meeting or which the said persons control;
• the legal persons where of the said persons are members of the management bodies or supervisory
bodies or managerial agents;
• any current and future transactions of which they are aware and in which, in their opinion, the said
persons may be treated as interested parties.
IX. Information disclosure system
40. The Information disclosure policy and system, approved by the Company, guarantee equality of the
information addressees (shareholders, stakeholders, investment society) and prevent abuses in the form of insider
dealing. The system for disclosure of information ensures complete, timely, true and understandable information,
which enables objective and informed decisions and valuations. The Company has implemented in-house rules
for the preparation of annual and interim reports, and disclosure procedure.
41. The system for disclosure of information ensures provision and /or disclosure of timely, correct and
understandable information in accordance with the requirements of the law and good corporate practices. The
system for disclosure of information ensures access to relevant, sufficient and reliable information about the
Company, as well as information about the decisions taken by the GMS.
42. The Company maintains its website. The investor section contains internal documents of the Company,
information about the shareholders’ rights and their participation in the General Meeting of Shareholders, the
financial statements for the last 10 years, information about the payment of dividends, as also for personal data
protection. This section also contains materials for the forthcoming General Meetings of Shareholders of the
Company and information on the decisions passed by the General Meeting of Shareholders.
43. Pursuant to the regulatory requirements, the Company has Investors Relation Director, who has been
appointed to ensure due disclosure of regulated information that must be disclosed, and to maintain active
communication with shareholders and /or investors in the Company.
44. The Company discloses regulated information that must be disclosed by providing it to the Financial
Supervision Commission, Bulgarian Stock Exchange– Sofia and Central Depository and making it available to
the general public through the information system of the portal www.X3news.com. Thus, information is
disseminated effectively and reaches simultaneously the widest possible range of people in a way that is not
discriminatory to them
45. The Company ensures adequate transparency regarding its commercial activities, financial results,
decisions made, and maintains its relationships with investors, media, financial and market analysis at
professional level.
CORPORATE GOVERNANCE STATEMENT (CONTINUED)
31 December 2022
xxix
VIII. Protection of shareholders’ rights (continued)
37. Materials on the agenda items shall be made available to the shareholders in a timely manner. These
materials shall be fair and clear as far as possible. Thus, it is guaranteed that informed decisions will be passed
and the shareholders will not be misled.
38. All shareholders of one class are treated equally.
39. In compliance with the requirements of article 114b, paragraph 1 of the Public Offering of Securities
Act, the persons holding, directly or indirectly, at least 25 percent of the votes in the General Meeting of the
Company or controlling the Company, are obligated to disclose to the Company, as well as to the Financial
Supervision Commission and Bulgarian Stock Exchange-Sofia, information regarding:
• the legal persons where in the said persons hold, directly or indirectly, at least 25 percent of the votes
in the General Meeting or which the said persons control;
• the legal persons where of the said persons are members of the management bodies or supervisory
bodies or managerial agents;
• any current and future transactions of which they are aware and in which, in their opinion, the said
persons may be treated as interested parties.
IX. Information disclosure system
40. The Information disclosure policy and system, approved by the Company, guarantee equality of the
information addressees (shareholders, stakeholders, investment society) and prevent abuses in the form of insider
dealing. The system for disclosure of information ensures complete, timely, true and understandable information,
which enables objective and informed decisions and valuations. The Company has implemented in-house rules
for the preparation of annual and interim reports, and disclosure procedure.
41. The system for disclosure of information ensures provision and /or disclosure of timely, correct and
understandable information in accordance with the requirements of the law and good corporate practices. The
system for disclosure of information ensures access to relevant, sufficient and reliable information about the
Company, as well as information about the decisions taken by the GMS.
42. The Company maintains its website. The investor section contains internal documents of the Company,
information about the shareholders’ rights and their participation in the General Meeting of Shareholders, the
financial statements for the last 10 years, information about the payment of dividends, as also for personal data
protection. This section also contains materials for the forthcoming General Meetings of Shareholders of the
Company and information on the decisions passed by the General Meeting of Shareholders.
43. Pursuant to the regulatory requirements, the Company has Investors Relation Director, who has been
appointed to ensure due disclosure of regulated information that must be disclosed, and to maintain active
communication with shareholders and /or investors in the Company.
44. The Company discloses regulated information that must be disclosed by providing it to the Financial
Supervision Commission, Bulgarian Stock Exchange– Sofia and Central Depository and making it available to
the general public through the information system of the portal www.X3news.com. Thus, information is
disseminated effectively and reaches simultaneously the widest possible range of people in a way that is not
discriminatory to them
45. The Company ensures adequate transparency regarding its commercial activities, financial results,
decisions made, and maintains its relationships with investors, media, financial and market analysis at
professional level.
KORADO-BULGARIA AD
CORPORATE GOVERNANCE STATEMENT (CONTINUED)
31 December 2022
xxx
X. Information on the existence of takeover/merger bids and according to Article 10, paragraph 1,
letters "c", "d", "f", "h" and "i" of Directive 2004/25/E C of the European Parliament and the Council of
21April 2004 on takeover bids
46. During the reporting period, takeover/merger bids were not sent to the Company.
47. Information about direct or indirect significant shareholdings:
• The company is controlled by KORADO, a.s., Czech Republic, a company holding 82.15% of the
share capital of the Companyasat31December 2021, or10, 817, 923shares.
• In turn, the majority shareholder of KORADO a.s. is the Ministry of Finance of the Czech Republic,
and other significant shareholders, such as the European Bank for Development and Reconstruction and 3
individuals.
• The sole shareholder with significant shareholding is KORADO a.s., Czech Republic, a company
registered with the Register of the local court Hradec Králové, Section B, Batch 1500, Czech UIC 25255843.
• At 31 December 2022, 16.01 % of the Company’s capital is held by other legal entities and 1.84%
(242,839 shares) of the capital by other individuals; there are no other significant, director indirect,
shareholdings which must be disclosed.
48. As at 31 December 2022, the Company held no shares in the capital of other entities.
XI. Information about the shareholders with special control rights and description of these rights
49. The Company has not issued shares with special control rights.
XII. Information about the limitations over the voting rights, such as limitations over the voting rights
of the shareholders with a given percent or number of votes, deadline for exercising the voting rights or
systems whereby with the company’s assistance, the financial rights attaching to the shares are separated
from the holding of shares.
50. The financial rights derived from the shares are indissolubly linked to the holding of shares. There are
no restrictions on the voting right, besides those imposed by the law as mandatory (such as non-exercising the
right to vote by a shareholder who is also a stakeholder in the case of transactions under Article 114 of POSA).
Votes are exercised only by open ballot (no secret ballots were held so far) at place where the session of the
GMS takes place. Until now, electronic means for remote participation within the meaning of Article115,
paragraph 8– 10 of POSA were not allowed.
XIII. Information about the provisions for the appointment and dismissal of the members of the
Company’s management bodies and about introduction of amendments to the articles of association
51. Members of the Supervisory Board are appointed and dismissed by the General Meeting of
Shareholders on the grounds of a decision passed by ordinary majority. Members of the Management Board are
appointed and dismissed by the SB of the Company on the grounds of a decision passed by ordinary majority.
52. A member of the MB and SB can be a natural person with legal capacity, as well as a legal entity.
Where a member of the MB and /or SB is a legal entity, it designates a representative(s) for the performance of
its duties in the board. If more than one representative have been appointed by a legal entity, only one of them
participates in the work of the MB and /or SB. The legal entity is jointly and unlimitedly liable together with the
other members of the board for the obligations arising from the actions of its representative.
53. The members of the MB and SB cannot be persons sentenced to imprisonment for willful crime of
general character, as well as persons, who at the time of their appointment were convicted by a final judgment
for crime against property, economy or against the financial, tax and social security systems committed in the
Republic of Bulgaria or abroad, unless they have been rehabilitated. A member of the MB and SB cannot be also
a person, who has been a member of an executive or supervisory body in a company, when it is terminated due
to bankruptcy in the past two years preceding the date of the resolution for bankruptcy, if there have been
unsatisfied creditors remaining; a person who has been a manager, member of a management or supervisory
body of a company, for which was established, through an effective administrative penalty deed, the non-
performance of obligations for accumulation and maintenance of the determined levels of reserves under the
Bulgarian Oil and Oil Products Reserves Act; and a person who does not meet the requirements of the Articles of
Association of the Company.
CORPORATE GOVERNANCE STATEMENT (CONTINUED)
31 December 2022
xxx
X. Information on the existence of takeover/merger bids and according to Article 10, paragraph 1,
letters "c", "d", "f", "h" and "i" of Directive 2004/25/E C of the European Parliament and the Council of
21April 2004 on takeover bids
46. During the reporting period, takeover/merger bids were not sent to the Company.
47. Information about direct or indirect significant shareholdings:
• The company is controlled by KORADO, a.s., Czech Republic, a company holding 82.15% of the
share capital of the Companyasat31December 2021, or10, 817, 923shares.
• In turn, the majority shareholder of KORADO a.s. is the Ministry of Finance of the Czech Republic,
and other significant shareholders, such as the European Bank for Development and Reconstruction and 3
individuals.
• The sole shareholder with significant shareholding is KORADO a.s., Czech Republic, a company
registered with the Register of the local court Hradec Králové, Section B, Batch 1500, Czech UIC 25255843.
• At 31 December 2022, 16.01 % of the Company’s capital is held by other legal entities and 1.84%
(242,839 shares) of the capital by other individuals; there are no other significant, director indirect,
shareholdings which must be disclosed.
48. As at 31 December 2022, the Company held no shares in the capital of other entities.
XI. Information about the shareholders with special control rights and description of these rights
49. The Company has not issued shares with special control rights.
XII. Information about the limitations over the voting rights, such as limitations over the voting rights
of the shareholders with a given percent or number of votes, deadline for exercising the voting rights or
systems whereby with the company’s assistance, the financial rights attaching to the shares are separated
from the holding of shares.
50. The financial rights derived from the shares are indissolubly linked to the holding of shares. There are
no restrictions on the voting right, besides those imposed by the law as mandatory (such as non-exercising the
right to vote by a shareholder who is also a stakeholder in the case of transactions under Article 114 of POSA).
Votes are exercised only by open ballot (no secret ballots were held so far) at place where the session of the
GMS takes place. Until now, electronic means for remote participation within the meaning of Article115,
paragraph 8– 10 of POSA were not allowed.
XIII. Information about the provisions for the appointment and dismissal of the members of the
Company’s management bodies and about introduction of amendments to the articles of association
51. Members of the Supervisory Board are appointed and dismissed by the General Meeting of
Shareholders on the grounds of a decision passed by ordinary majority. Members of the Management Board are
appointed and dismissed by the SB of the Company on the grounds of a decision passed by ordinary majority.
52. A member of the MB and SB can be a natural person with legal capacity, as well as a legal entity.
Where a member of the MB and /or SB is a legal entity, it designates a representative(s) for the performance of
its duties in the board. If more than one representative have been appointed by a legal entity, only one of them
participates in the work of the MB and /or SB. The legal entity is jointly and unlimitedly liable together with the
other members of the board for the obligations arising from the actions of its representative.
53. The members of the MB and SB cannot be persons sentenced to imprisonment for willful crime of
general character, as well as persons, who at the time of their appointment were convicted by a final judgment
for crime against property, economy or against the financial, tax and social security systems committed in the
Republic of Bulgaria or abroad, unless they have been rehabilitated. A member of the MB and SB cannot be also
a person, who has been a member of an executive or supervisory body in a company, when it is terminated due
to bankruptcy in the past two years preceding the date of the resolution for bankruptcy, if there have been
unsatisfied creditors remaining; a person who has been a manager, member of a management or supervisory
body of a company, for which was established, through an effective administrative penalty deed, the non-
performance of obligations for accumulation and maintenance of the determined levels of reserves under the
Bulgarian Oil and Oil Products Reserves Act; and a person who does not meet the requirements of the Articles of
Association of the Company.
KORADO-BULGARIA AD
CORPORATE GOVERNANCE STATEMENT (CONTINUED)
31 December 2022
xxxi
XIII. Information about the provisions for the appointment and dismissal of the members of the
Company’s management bodies and about introduction of amendments to the articles of association
(continued)
54. The natural persons who represent the legal entities – members of the MB and /or SB must comply
with the requirements applicable to a member of SB and MB.
55. One and the same person cannot a member of the SB and the MB, at the same time.
56. At least 1/3 of the members of the SB must be independent persons. the independent member of the SB
cannot be:
• an employee of a public company;
• a shareholder, who holds, directly or through related parties, at least 25 percent of the votes in the
General Meeting or is related party to the Company;
• a person, who has secret relations with the public company; a member of a management or supervisory
body, managerial agent or employee of a commercial company or another legal person under items2 and 3;
• a related party to another member of a management or supervisory body of the public company.
57. The members of the MB and SB may be re-elected without limitation.
58. The General Meeting of Shareholders is the body exclusively competent to amend and supplement the
Articles of Association of the Company. In accordance with the law and Articles of Association of the Company,
the required majority to pass such a decision is equal to 2/3 of the voting shares presented or represented at the
GMS meeting.
XIV. Information on the powers of the Board members, in particular the right to issue and redeem
(buy-back) shares
59. The share capital of the Company amounts to BGN 13, 168, 614 at 31 December 2022, split into
13,168,614 dematerialized, registered, voting shares with nominal value of BGN 1 each. All shares are of one
class. All shares of the Company provide equal rights to their holders. A share gives the right to one vote in
GMS, right to dividend and liquidation share proportionate to the share’s nominal value.
60. According to the requirements of the Articles of Association and the effective legislation, the decision
to issue or buy-back shares is among the powers of the GMS. During the Reporting period, shares, share options
or other financial instruments, envisaged to be provided to or to be subscribed by Board members or key
personnel, were not issued by the Company. Shares with buy-back reference were not issued by the Company.
61. According to th e Company’s Articles of Association, the General Meeting of Shareholders of the
Company has the exclusive power to take decisions on share buy-backs. The decision shall be registered with the
Commercial Register. The majority required to pass such a decision is equal to1/2 of the voting shares presented
or represented at the GMS meeting.
XV. Disclosure of financial and non-financial information.
62. The Management Board shall implement the policy for disclosure of information in accordance with
the law requirements and bylaws.
63. In accordance with this policy under item 1, the Management Board uses a system for disclosure of financial
and non-financial information.
64. The financial and non-financial disclosure system seeks to ensure equality of the addressees of the
information (shareholders, stakeholders, investment community) and to prevent the misuse of inside information.
65. The Management Board shall endeavor to ensure that the financial and non-financial disclosure system
information provides complete, timely, accurate and understandable information that enables objective and
informed decisions and assessments.
CORPORATE GOVERNANCE STATEMENT (CONTINUED)
31 December 2022
xxxi
XIII. Information about the provisions for the appointment and dismissal of the members of the
Company’s management bodies and about introduction of amendments to the articles of association
(continued)
54. The natural persons who represent the legal entities – members of the MB and /or SB must comply
with the requirements applicable to a member of SB and MB.
55. One and the same person cannot a member of the SB and the MB, at the same time.
56. At least 1/3 of the members of the SB must be independent persons. the independent member of the SB
cannot be:
• an employee of a public company;
• a shareholder, who holds, directly or through related parties, at least 25 percent of the votes in the
General Meeting or is related party to the Company;
• a person, who has secret relations with the public company; a member of a management or supervisory
body, managerial agent or employee of a commercial company or another legal person under items2 and 3;
• a related party to another member of a management or supervisory body of the public company.
57. The members of the MB and SB may be re-elected without limitation.
58. The General Meeting of Shareholders is the body exclusively competent to amend and supplement the
Articles of Association of the Company. In accordance with the law and Articles of Association of the Company,
the required majority to pass such a decision is equal to 2/3 of the voting shares presented or represented at the
GMS meeting.
XIV. Information on the powers of the Board members, in particular the right to issue and redeem
(buy-back) shares
59. The share capital of the Company amounts to BGN 13, 168, 614 at 31 December 2022, split into
13,168,614 dematerialized, registered, voting shares with nominal value of BGN 1 each. All shares are of one
class. All shares of the Company provide equal rights to their holders. A share gives the right to one vote in
GMS, right to dividend and liquidation share proportionate to the share’s nominal value.
60. According to the requirements of the Articles of Association and the effective legislation, the decision
to issue or buy-back shares is among the powers of the GMS. During the Reporting period, shares, share options
or other financial instruments, envisaged to be provided to or to be subscribed by Board members or key
personnel, were not issued by the Company. Shares with buy-back reference were not issued by the Company.
61. According to th e Company’s Articles of Association, the General Meeting of Shareholders of the
Company has the exclusive power to take decisions on share buy-backs. The decision shall be registered with the
Commercial Register. The majority required to pass such a decision is equal to1/2 of the voting shares presented
or represented at the GMS meeting.
XV. Disclosure of financial and non-financial information.
62. The Management Board shall implement the policy for disclosure of information in accordance with
the law requirements and bylaws.
63. In accordance with this policy under item 1, the Management Board uses a system for disclosure of financial
and non-financial information.
64. The financial and non-financial disclosure system seeks to ensure equality of the addressees of the
information (shareholders, stakeholders, investment community) and to prevent the misuse of inside information.
65. The Management Board shall endeavor to ensure that the financial and non-financial disclosure system
information provides complete, timely, accurate and understandable information that enables objective and
informed decisions and assessments.
KORADO-BULGARIA AD
CORPORATE GOVERNANCE STATEMENT (CONTINUED)
31 December 2022
xxxii
XV. Disclosure of financial and non-financial information. (continued)
66. The Management Board shall promptly disclose the capital structure of the Company and agreements leading
to controls under its disclosure rules information and current legislation.
67. The Management Board shall approve and control the observance of internal rules for preparation of the
annual and interim reports and the procedure for disclosing information.
68. The Management Board shall use internal rules to ensure the timely disclosure of any material periodic and
incidental information concerning the Company, its management, its corporate management, its operational
activities, its shareholder structure.
69. Where applicable, the Management Board shall apply rules that ensure disclosure of annual basis of non –
financial information in accordance with national law; and applicable European law. In this regard, the
Management Board is making efforts to include its annual reports information on how and to what extent the
Company's activities can be qualify as environmentally sustainable, such as: what part of its turnover is the result
of products and services that relate to economic activities that qualify as environmentally sustainable; what part
of its capital expenditure, where applicable, and what part of operating costs are related to assets or processes
related to economic activities that qualify as environmentally sustainable.
70. The Company, as part of the disclosure system, has developed and maintains website of the Company
approved content, scope and periodicity of the disclosed through it information.
The information disclosed through the Company's website includes at least:
- basic information identifying the Company and its business model;
- up-to-date information on the shareholder structure;
- the by-laws of the Company and the adopted policies related to the activity and the functioning of the
Company;
- information on the structure and composition of the management and control bodies of the Company, as
well as basic information about their members, including information about the Audit committee;
- financial statements for the last 10 years;
- the materials for the forthcoming general meetings of the shareholders of the Company.
Information on the decisions taken by the general meetings of shareholders for at least the last five years, incl.
information on the dividends distributed by the Company for this period;
- information on auditors;
- information about upcoming events;
- information on issued shares and o the r financial instruments;
- important information related to the Company's activities;
- information on the rights of the shareholders, incl. sufficient information on the right to shareholders to
request the inclusion of issues and to propose solutions to issues already included in the agenda of the general
meeting by the order of art. 223a of the Commercial Law;
- contact information for the Investor Relations Director of the Company.
71. The Company also maintains an English language version of the corporate website with similar content.
72. The Company periodically discloses information about corporate governance. The disclosure on information
on corporate governance is in accordance with the "comply or explain" principle.
All recommendations of the Code are followed.
CORPORATE GOVERNANCE STATEMENT (CONTINUED)
31 December 2022
xxxii
XV. Disclosure of financial and non-financial information. (continued)
66. The Management Board shall promptly disclose the capital structure of the Company and agreements leading
to controls under its disclosure rules information and current legislation.
67. The Management Board shall approve and control the observance of internal rules for preparation of the
annual and interim reports and the procedure for disclosing information.
68. The Management Board shall use internal rules to ensure the timely disclosure of any material periodic and
incidental information concerning the Company, its management, its corporate management, its operational
activities, its shareholder structure.
69. Where applicable, the Management Board shall apply rules that ensure disclosure of annual basis of non –
financial information in accordance with national law; and applicable European law. In this regard, the
Management Board is making efforts to include its annual reports information on how and to what extent the
Company's activities can be qualify as environmentally sustainable, such as: what part of its turnover is the result
of products and services that relate to economic activities that qualify as environmentally sustainable; what part
of its capital expenditure, where applicable, and what part of operating costs are related to assets or processes
related to economic activities that qualify as environmentally sustainable.
70. The Company, as part of the disclosure system, has developed and maintains website of the Company
approved content, scope and periodicity of the disclosed through it information.
The information disclosed through the Company's website includes at least:
- basic information identifying the Company and its business model;
- up-to-date information on the shareholder structure;
- the by-laws of the Company and the adopted policies related to the activity and the functioning of the
Company;
- information on the structure and composition of the management and control bodies of the Company, as
well as basic information about their members, including information about the Audit committee;
- financial statements for the last 10 years;
- the materials for the forthcoming general meetings of the shareholders of the Company.
Information on the decisions taken by the general meetings of shareholders for at least the last five years, incl.
information on the dividends distributed by the Company for this period;
- information on auditors;
- information about upcoming events;
- information on issued shares and o the r financial instruments;
- important information related to the Company's activities;
- information on the rights of the shareholders, incl. sufficient information on the right to shareholders to
request the inclusion of issues and to propose solutions to issues already included in the agenda of the general
meeting by the order of art. 223a of the Commercial Law;
- contact information for the Investor Relations Director of the Company.
71. The Company also maintains an English language version of the corporate website with similar content.
72. The Company periodically discloses information about corporate governance. The disclosure on information
on corporate governance is in accordance with the "comply or explain" principle.
All recommendations of the Code are followed.
KORADO-BULGARIA AD
CORPORATE GOVERNANCE STATEMENT (CONTINUED)
31 December 2022
xxxiii
XVI. Stakeholders. Sustainable Development.
73. Sustainable development aims to meet the needs of the current generation without exposing at risk the ability
of future generations to meet their own needs.
74. The Management Board is committed to identifying specific actions for sustainable development of the
Company
75. The Management Board shall ensure effective interaction with stakeholders. To the group of the interested
parties refer to certain groups of persons on whom the Company directly influences an which in turn may affect
its activities, including suppliers, customers, employees, creditors, etc.
The Company identifies the interested parties in relation to its activities based on their degree and spheres of
influence, role and attitude towards its sustainable development.
76. The Management Board shall ensure respect for the rights of the persons concerned, established by law or by
mutual agreement with the company, guided by the understanding that good corporate governance practice
requires compliance with stakeholder’s according with the principles of transparency, accountability and
business ethics and protection of human rights.
77. The Management Board shall ensure that all stakeholders are adequately informed about their legally
established rights.
78. The Management Board shall maintain effective relations with stakeholders.
79. The Management Board shall guarantee the right of timely and regular access to relevant, sufficient and
reliable information about the Company when stakeholders are involved in the process corporate management.
XVII. Miscellaneous
80. The Company participates actively in various forms of mutual cooperation whit government
institutions and non-government organizations on corporate government matters.
The process of information disclosure by the Company is subject to multiple controls. So far, violations of the
provisions and forms of disclosure have been established. The financial statements are published on the
Company's website immediately after the y have been forwarded to the regulatory authority and the public, thus
providing for controls by shareholders, investors and all stakeholders.
81. This declaration has been prepared and adopted on the basis of the current provisions of the National
Corporate Governance Code from BSE-Sofia, which is mandatory for public companies, whose shares are traded
on an official market adopted in October 2007. The Code was approved by the National Commission for
Corporate Governance and subsequently amended in February 2012, April 2016 and July 1, 2021.
For KORADO – Bulgaria AD
__________________________
Jiri Reznicek
CORPORATE GOVERNANCE STATEMENT (CONTINUED)
31 December 2022
xxxiii
XVI. Stakeholders. Sustainable Development.
73. Sustainable development aims to meet the needs of the current generation without exposing at risk the ability
of future generations to meet their own needs.
74. The Management Board is committed to identifying specific actions for sustainable development of the
Company
75. The Management Board shall ensure effective interaction with stakeholders. To the group of the interested
parties refer to certain groups of persons on whom the Company directly influences an which in turn may affect
its activities, including suppliers, customers, employees, creditors, etc.
The Company identifies the interested parties in relation to its activities based on their degree and spheres of
influence, role and attitude towards its sustainable development.
76. The Management Board shall ensure respect for the rights of the persons concerned, established by law or by
mutual agreement with the company, guided by the understanding that good corporate governance practice
requires compliance with stakeholder’s according with the principles of transparency, accountability and
business ethics and protection of human rights.
77. The Management Board shall ensure that all stakeholders are adequately informed about their legally
established rights.
78. The Management Board shall maintain effective relations with stakeholders.
79. The Management Board shall guarantee the right of timely and regular access to relevant, sufficient and
reliable information about the Company when stakeholders are involved in the process corporate management.
XVII. Miscellaneous
80. The Company participates actively in various forms of mutual cooperation whit government
institutions and non-government organizations on corporate government matters.
The process of information disclosure by the Company is subject to multiple controls. So far, violations of the
provisions and forms of disclosure have been established. The financial statements are published on the
Company's website immediately after the y have been forwarded to the regulatory authority and the public, thus
providing for controls by shareholders, investors and all stakeholders.
81. This declaration has been prepared and adopted on the basis of the current provisions of the National
Corporate Governance Code from BSE-Sofia, which is mandatory for public companies, whose shares are traded
on an official market adopted in October 2007. The Code was approved by the National Commission for
Corporate Governance and subsequently amended in February 2012, April 2016 and July 1, 2021.
For KORADO – Bulgaria AD
__________________________
Jiri Reznicek
KORADO-BULGARIA AD
REMUNERATION REPORT
For the year ended 31 December 2022
xxxiv
REPORT
ON THE IMPLEMENTATION OF THE POLICY ON THE REMUNERATION OF THE
MEMBERS OF THE SUPERVISORY BOARD, THE MANAGEMENT BOARD AND THE
AUDIT COMMITTEE
OF KORADO - BULGARIA AD FOR THE YEAR 2022
1. INTRODUCTION
1.1. Legal Grounds of the Report
During the period January 1, 2022 - December 31, 2022 (hereinafter referred to as the “Reporting
Period”), KORADO-Bulgaria AD (hereinafter referred to as the “Company”) applied the
Remuneration Policy of the members of the Supervisory Board, the Management Board and the Audit
Committee of the Company, approved in its current version by the General Meeting of the Company
(hereinafter referred to as the “General Meeting”), held on May 13, 2015, a new version adopted by
decision of the General Meeting of the Company, held on 19 05. 2021 and respectively partially
amended by a decision of the General Meeting of the Company, held on 15. 09. 2021 and published on
the Internet at the following address: www.korado.bg (hereinafter "the Policy").
The present report was prepared by the Management Board of the Company (hereinafter referred to as
the “MB” ) in execution of the requirement of Art. 12, Par. 1 of Ordinance No. 48 of 20 March 2013
on the Requirements to Remuneration issued by the Financial Supervision Commission (hereinafter
referred to as “Ordinance No. 48” ). The Report constitutes a separate document appended to the
Annual Financial Statements of the Company for the year 2022. The Report is presented to the
attention of the shareholders of the Company and could be discussed on with the members of the MB
at the regular annual session of the General Meeting of the Shareholders of the Company.
1.2. Subject-Matter and Scope of the Report
In accordance with Art. 12, Par. 2 of Ordinance 48, the Report consists of:
(a). review of the manner of implementation of the Policy during the Reported Period; and
(b). programme on the implementation of the Policy during the period 1 January 2023 – 31
December 2023.
Furthermore, the Report also contains all of the mandatory requisites pursuant to Art. 13 of Ordinance
No. 48.
Given the repeal of the existing policy by a decision of the General Meeting of Shareholders held on
May 19, 2021 and its amendment by a decision of the General Meeting of Shareholders held on
September 15, 2021 and both amendments before the Reporting Period, the Report contains the
necessary information on adopted amendments.
REMUNERATION REPORT
For the year ended 31 December 2022
xxxiv
REPORT
ON THE IMPLEMENTATION OF THE POLICY ON THE REMUNERATION OF THE
MEMBERS OF THE SUPERVISORY BOARD, THE MANAGEMENT BOARD AND THE
AUDIT COMMITTEE
OF KORADO - BULGARIA AD FOR THE YEAR 2022
1. INTRODUCTION
1.1. Legal Grounds of the Report
During the period January 1, 2022 - December 31, 2022 (hereinafter referred to as the “Reporting
Period”), KORADO-Bulgaria AD (hereinafter referred to as the “Company”) applied the
Remuneration Policy of the members of the Supervisory Board, the Management Board and the Audit
Committee of the Company, approved in its current version by the General Meeting of the Company
(hereinafter referred to as the “General Meeting”), held on May 13, 2015, a new version adopted by
decision of the General Meeting of the Company, held on 19 05. 2021 and respectively partially
amended by a decision of the General Meeting of the Company, held on 15. 09. 2021 and published on
the Internet at the following address: www.korado.bg (hereinafter "the Policy").
The present report was prepared by the Management Board of the Company (hereinafter referred to as
the “MB” ) in execution of the requirement of Art. 12, Par. 1 of Ordinance No. 48 of 20 March 2013
on the Requirements to Remuneration issued by the Financial Supervision Commission (hereinafter
referred to as “Ordinance No. 48” ). The Report constitutes a separate document appended to the
Annual Financial Statements of the Company for the year 2022. The Report is presented to the
attention of the shareholders of the Company and could be discussed on with the members of the MB
at the regular annual session of the General Meeting of the Shareholders of the Company.
1.2. Subject-Matter and Scope of the Report
In accordance with Art. 12, Par. 2 of Ordinance 48, the Report consists of:
(a). review of the manner of implementation of the Policy during the Reported Period; and
(b). programme on the implementation of the Policy during the period 1 January 2023 – 31
December 2023.
Furthermore, the Report also contains all of the mandatory requisites pursuant to Art. 13 of Ordinance
No. 48.
Given the repeal of the existing policy by a decision of the General Meeting of Shareholders held on
May 19, 2021 and its amendment by a decision of the General Meeting of Shareholders held on
September 15, 2021 and both amendments before the Reporting Period, the Report contains the
necessary information on adopted amendments.
KORADO-BULGARIA AD
REMUNERATION REPORT (CONTINUED)
For the year ended 31 December 2022
xxxv
2. INFORMATION ABOUT THE IMPLEMENTATION OF THE POLICY DURING THE
REPORTED PERIOD
2.1. Information about the process of adopting resolutions upon the determination of the
Policy
In accordance with Art. 116c, Par. 1 of the POSA, the Articles of Association of the Company and the
Policy, the determination of the amount of the remuneration of the members of the MB, the members
of the Supervisory Board of the Company (hereinafter referred to as the “SB” ) and of the members of
the Audit Committee of the Company (referred to hereinafter as the “AC” ), their right to receive a
portion of the profit, as well as their right to acquire shares or debt instruments of the Company, are
within the competence of the General Meeting.
Pursuant to the Policy, the remuneration of the members of the MB, SB and AC is determined by a
resolution of the General Meeting. The Policy does not envisage the creation of a permanent
Remuneration Committee of the Company as an optional body.
In fulfillment of this authority, the General Assembly, during the previous period,
•determined the amount of the remuneration of the members of the Management Board, the
Supervisory Board and the А udit Committee with decisions on the agenda of the regular annual
General Meetings held on May 19, 2021 and September 15, 2021.
•determines the amount of the remuneration of the members of the Management Board, the
Supervisory Board and the Audit Committee which is based on the adopted decision under item 12 of
the agenda of the regular annual meeting of the General Meeting held on 19 May 2021
• in compliance with the rules contained in the Policy effective during the previous reporting period:
• 1. remuneration is determined for all members of the Management Board, the Supervisory Board and
the Audit Committee, which is in accordance with the current in the respective body.
• 2.the respective remuneration of the employees of the holding is also determined
• 3. the remuneration determined for employees under an employment contract may be different
from that for those not working in the holding
•in compliance with the rules contained in the adopted program for the implementation of the Policy
for the current reporting period, no changes were made to the remuneration of the members of the
Supervisory Board, the Management Board and the Audit Committee:
2.2. Information about the relative weight of the variable and the fixed remuneration of the
members of the MB and the SB
Pursuant to item 6.2 of the Policy, the remuneration of the members of the MB, SB and AC consists of
a fixed component only (i.e. no variable component was determined for any of those members).
According to the adopted Policy, remuneration for their activities in this capacity can be received by
all members of the Management Board, the Supervisory Board and the А uditCommittee.
During the Reporting Period:
to each of the entitled members of the MB, SB and AC was paid permanent remuneration
containing only a fixed component, which represented 100% (one hundred percent) of the
remuneration accordingly accrued by the Company for their activity as such members during
the Reporting Period; and
REMUNERATION REPORT (CONTINUED)
For the year ended 31 December 2022
xxxv
2. INFORMATION ABOUT THE IMPLEMENTATION OF THE POLICY DURING THE
REPORTED PERIOD
2.1. Information about the process of adopting resolutions upon the determination of the
Policy
In accordance with Art. 116c, Par. 1 of the POSA, the Articles of Association of the Company and the
Policy, the determination of the amount of the remuneration of the members of the MB, the members
of the Supervisory Board of the Company (hereinafter referred to as the “SB” ) and of the members of
the Audit Committee of the Company (referred to hereinafter as the “AC” ), their right to receive a
portion of the profit, as well as their right to acquire shares or debt instruments of the Company, are
within the competence of the General Meeting.
Pursuant to the Policy, the remuneration of the members of the MB, SB and AC is determined by a
resolution of the General Meeting. The Policy does not envisage the creation of a permanent
Remuneration Committee of the Company as an optional body.
In fulfillment of this authority, the General Assembly, during the previous period,
•determined the amount of the remuneration of the members of the Management Board, the
Supervisory Board and the А udit Committee with decisions on the agenda of the regular annual
General Meetings held on May 19, 2021 and September 15, 2021.
•determines the amount of the remuneration of the members of the Management Board, the
Supervisory Board and the Audit Committee which is based on the adopted decision under item 12 of
the agenda of the regular annual meeting of the General Meeting held on 19 May 2021
• in compliance with the rules contained in the Policy effective during the previous reporting period:
• 1. remuneration is determined for all members of the Management Board, the Supervisory Board and
the Audit Committee, which is in accordance with the current in the respective body.
• 2.the respective remuneration of the employees of the holding is also determined
• 3. the remuneration determined for employees under an employment contract may be different
from that for those not working in the holding
•in compliance with the rules contained in the adopted program for the implementation of the Policy
for the current reporting period, no changes were made to the remuneration of the members of the
Supervisory Board, the Management Board and the Audit Committee:
2.2. Information about the relative weight of the variable and the fixed remuneration of the
members of the MB and the SB
Pursuant to item 6.2 of the Policy, the remuneration of the members of the MB, SB and AC consists of
a fixed component only (i.e. no variable component was determined for any of those members).
According to the adopted Policy, remuneration for their activities in this capacity can be received by
all members of the Management Board, the Supervisory Board and the А uditCommittee.
During the Reporting Period:
to each of the entitled members of the MB, SB and AC was paid permanent remuneration
containing only a fixed component, which represented 100% (one hundred percent) of the
remuneration accordingly accrued by the Company for their activity as such members during
the Reporting Period; and
KORADO-BULGARIA AD
REMUNERATION REPORT (CONTINUED)
For the year ended 31 December 2022
xxxvi
none of the bodies of the Company resolved on the payment of additional remuneration,
tantiemes, tangible incentives, in-kind remuneration or payments or fringe benefits to the
members of MB, SB and AC.
2.3. Information about the assessment criteria, on the basis of which variable remuneration
could be accrued; substantiation of how these criteria benefit to the long-term interests of the
Company; explanation of the methods adopted for the assessment of the achieved results and of
the relevance between the remuneration and the achieved results, as well as regarding the
periods of deferral of the payment of variable remuneration
During the Reporting Period, no variable remuneration was accrued or paid to any of the members of
the MB, SB and AC. Respectively, no assessment criteria of the achieved results, on the basis of
which such remuneration could be paid, were elaborated. Neither were applied methods of assessment
of meeting such criteria and relevance between the achieved results and such remuneration.
During the Reporting Period, none of the payments of remuneration of the members of the MB, SB
and AC whether in whole or in any portion, was deferred. These remunerations were paid, as
permanent remunerations per se , in their full amounts and by the deadline provided for in the
individual agreements between the respective member of the MB, SB or AC and the Company.
2.4. Information about the main payments and substantiation of the annual bonus payment
schedule and/or of all additional in-kind remuneration
For the Reporting Period, the total value of the basic remunerations charged and paid by the Company,
as we indicated above, retains the existing dimensions and grounds and amounts to:
• the members of the Supervisory Board who are remunerated on the basis of the Policy and under the
conditions of Article 5, paragraph 3 of it are paid remuneration in the amount of EUR 1000 (one
thousand euros) and 400 EUR / for employees of the group KORADO - decision of GMS from
15. 09. 2021 / per month;
• the members of the Management Board to whom remuneration is due on the basis of the Policy and
under the conditions of Article 5, paragraph 3 of it, are remunerated in the amount of EUR 400
per month. / for the employees of the group KORADO - decision of the GMS from 15. 09. 2021
/;
• the members of the AC to whom remuneration is due on the basis of the Policy and under the
conditions of Article 5, paragraph 3 of it are remunerated in the amount of EUR 500 (five
hundred euros) and 400 EUR / for employees of the group KORADO - decision of GMS from
15. 09. 2021 / per month;
In each accrual or payment of remuneration to the members of the Supervisory Board, the
Management Board and the Supervisory Board, the Company has withheld and paid into the
respective budgets within the statutory period each and all public obligations (including but not limited
to: tax, state social security contributions, additional mandatory insurance and health insurance) in the
manner in which these obligations are established by law.
During the Reporting Period:
no other tangible incentives were accrued or due by the Company to any of the members of the
MB, SB and AC; and
the Company did not adopt or implement any annual scheme for the payment of bonuses and/or
other in-kind remuneration to members of the MB, SB and AC.
REMUNERATION REPORT (CONTINUED)
For the year ended 31 December 2022
xxxvi
none of the bodies of the Company resolved on the payment of additional remuneration,
tantiemes, tangible incentives, in-kind remuneration or payments or fringe benefits to the
members of MB, SB and AC.
2.3. Information about the assessment criteria, on the basis of which variable remuneration
could be accrued; substantiation of how these criteria benefit to the long-term interests of the
Company; explanation of the methods adopted for the assessment of the achieved results and of
the relevance between the remuneration and the achieved results, as well as regarding the
periods of deferral of the payment of variable remuneration
During the Reporting Period, no variable remuneration was accrued or paid to any of the members of
the MB, SB and AC. Respectively, no assessment criteria of the achieved results, on the basis of
which such remuneration could be paid, were elaborated. Neither were applied methods of assessment
of meeting such criteria and relevance between the achieved results and such remuneration.
During the Reporting Period, none of the payments of remuneration of the members of the MB, SB
and AC whether in whole or in any portion, was deferred. These remunerations were paid, as
permanent remunerations per se , in their full amounts and by the deadline provided for in the
individual agreements between the respective member of the MB, SB or AC and the Company.
2.4. Information about the main payments and substantiation of the annual bonus payment
schedule and/or of all additional in-kind remuneration
For the Reporting Period, the total value of the basic remunerations charged and paid by the Company,
as we indicated above, retains the existing dimensions and grounds and amounts to:
• the members of the Supervisory Board who are remunerated on the basis of the Policy and under the
conditions of Article 5, paragraph 3 of it are paid remuneration in the amount of EUR 1000 (one
thousand euros) and 400 EUR / for employees of the group KORADO - decision of GMS from
15. 09. 2021 / per month;
• the members of the Management Board to whom remuneration is due on the basis of the Policy and
under the conditions of Article 5, paragraph 3 of it, are remunerated in the amount of EUR 400
per month. / for the employees of the group KORADO - decision of the GMS from 15. 09. 2021
/;
• the members of the AC to whom remuneration is due on the basis of the Policy and under the
conditions of Article 5, paragraph 3 of it are remunerated in the amount of EUR 500 (five
hundred euros) and 400 EUR / for employees of the group KORADO - decision of GMS from
15. 09. 2021 / per month;
In each accrual or payment of remuneration to the members of the Supervisory Board, the
Management Board and the Supervisory Board, the Company has withheld and paid into the
respective budgets within the statutory period each and all public obligations (including but not limited
to: tax, state social security contributions, additional mandatory insurance and health insurance) in the
manner in which these obligations are established by law.
During the Reporting Period:
no other tangible incentives were accrued or due by the Company to any of the members of the
MB, SB and AC; and
the Company did not adopt or implement any annual scheme for the payment of bonuses and/or
other in-kind remuneration to members of the MB, SB and AC.
KORADO-BULGARIA AD
REMUNERATION REPORT (CONTINUED)
For the year ended 31 December 2022
xxxvii
2.5. Description of the main characteristics of any adopted additional voluntary pension
insurance scheme and information about the paid and/or due by the Company contributions on
behalf of the members of the MB, SB and AC
For the Reporting Period, the Company did not adopt or realize any additional voluntary pension
insurance scheme in favour of the members of the MB, SB and AC and no contributions in relation to
such scheme were either paid or due by the Company.
2.6. Information about the policy on compensations for premature termination of contracts
The rules, which govern the compensations to the members of the MB, SB and AC in the event of
premature termination of their contracts, are set forth in item 10 of the Policy. The Company brings
the individual contracts of each of the members of the MB, SB and the AC into full alignment with
these rules.
In the Reporting Period there has been no termination of the Management Services Contract with any
member of the MB of the Company.
For the Reporting Period, there was a termination of the contract for the assignment of supervisory
powers with Frantisek Hamacek and Josef Laska, adopted during the previous reporting period / GMS
from 15.09.2021 / and effective from 01.01.2022, according to the decision of the GMS
Benefits for early termination are not accrued and paid.
During the Reporting Period, control contracts were terminated with two of the members of the
Company's Audit Committee, respectively, two new members were elected.
1. The termination of the control contract with Frantisek Hamacek / GMS from 15.09.2021 / and the
election of Martin Preissler in his place also takes place with effect from 01.01.2022, according to the
decision of the GMS.
2. The contract for control with Milena Toneva Raykova was terminated by the decision of the GMS
dated September 14, 2022, and Irena Milcheva Mihailova was elected in her place.
Benefits for early termination are not accrued and paid.
2.7. Information about the non-transferability period of shares or of the vesting period of
options whenever shares are provided as variable remuneration and information about the
period of retaining of a definite number of shares up to the end of the mandate of the MB, SB
and AC members
For the Reporting Period any variable remuneration based on shares or options on shares was not due
or paid. Respectively, in the Company were not adopted any terms and conditions for the restriction of
the transfer of such shares or options on shares or for the retention of a specific number of shares up
until the expiry of the mandate of the members of the MB, SB and AC.
2.8. Information about the contracts of the MB, SB and AC members of the Company
During the Reporting Period, members of the MB were:
Jiří Řezníček (during the whole Reporting Period);
Sylvia Drumeva Stefanova (during the whole Reporting Period); and
Jana Havl ová (during the whole Reporting Period).
REMUNERATION REPORT (CONTINUED)
For the year ended 31 December 2022
xxxvii
2.5. Description of the main characteristics of any adopted additional voluntary pension
insurance scheme and information about the paid and/or due by the Company contributions on
behalf of the members of the MB, SB and AC
For the Reporting Period, the Company did not adopt or realize any additional voluntary pension
insurance scheme in favour of the members of the MB, SB and AC and no contributions in relation to
such scheme were either paid or due by the Company.
2.6. Information about the policy on compensations for premature termination of contracts
The rules, which govern the compensations to the members of the MB, SB and AC in the event of
premature termination of their contracts, are set forth in item 10 of the Policy. The Company brings
the individual contracts of each of the members of the MB, SB and the AC into full alignment with
these rules.
In the Reporting Period there has been no termination of the Management Services Contract with any
member of the MB of the Company.
For the Reporting Period, there was a termination of the contract for the assignment of supervisory
powers with Frantisek Hamacek and Josef Laska, adopted during the previous reporting period / GMS
from 15.09.2021 / and effective from 01.01.2022, according to the decision of the GMS
Benefits for early termination are not accrued and paid.
During the Reporting Period, control contracts were terminated with two of the members of the
Company's Audit Committee, respectively, two new members were elected.
1. The termination of the control contract with Frantisek Hamacek / GMS from 15.09.2021 / and the
election of Martin Preissler in his place also takes place with effect from 01.01.2022, according to the
decision of the GMS.
2. The contract for control with Milena Toneva Raykova was terminated by the decision of the GMS
dated September 14, 2022, and Irena Milcheva Mihailova was elected in her place.
Benefits for early termination are not accrued and paid.
2.7. Information about the non-transferability period of shares or of the vesting period of
options whenever shares are provided as variable remuneration and information about the
period of retaining of a definite number of shares up to the end of the mandate of the MB, SB
and AC members
For the Reporting Period any variable remuneration based on shares or options on shares was not due
or paid. Respectively, in the Company were not adopted any terms and conditions for the restriction of
the transfer of such shares or options on shares or for the retention of a specific number of shares up
until the expiry of the mandate of the members of the MB, SB and AC.
2.8. Information about the contracts of the MB, SB and AC members of the Company
During the Reporting Period, members of the MB were:
Jiří Řezníček (during the whole Reporting Period);
Sylvia Drumeva Stefanova (during the whole Reporting Period); and
Jana Havl ová (during the whole Reporting Period).
KORADO-BULGARIA AD
REMUNERATION REPORT (CONTINUED)
For the year ended 31 December 2022
xxxviii
The mandate of all members of the MB is 5 years. It was determined by a resolution of the SB starting
from 15 August 2022 and expiring on 15 August 2027.
The duration of the contracts of the members of the MB in the Reporting Period and the advance
notice period in the event of premature termination of the contracts by the Company are, as follows:
Member of the MB Duration of the Contract Advance Notice Period in the
Event of Premature Termination
by the Company
Jiří Řezníček until the expiry of the 5-year
mandate
as per the requirements of the law
Sylvia Drumeva Stefanova until the expiry of the 5-year
mandate
as per the requirements of the law
Jana Havlová until the expiry of the 5-year
mandate
as per the requirements of the law
During the Reporting Period, members of the SB were:
Tomas Kollert (during the whole Reporting Period)
Eva Voborová (during the whole Reporting Period);
Ivan Lyaskov (during the whole Reporting Period); and
Evelina Miltenova Velikova(during the whole Reporting Period);
The mandate of all members of the SB is 5 years. It was determined by a resolution of the General
Meeting held on 23 May 2018 and expires on 13 June 2023.
With a decision of the General Meeting of the Company/ GMS on September 152021 / the supervisory
powers were terminated, respectively the contracts for assignment of supervisory powers with the
members of the Supervisory Board - Frantisek Hamacek and Josef Laska.
According to the adopted decision, it comes into force from 01.01.2022, that is, after this date and
during the reporting period, their mandate was prematurely terminated on the basis of their request.
The duration of the contracts of the members of the SB in the Reporting Period and the advance notice
period in the event of premature termination of the contracts by the Company are, as follows:
Members of the SB Duration of the Contract Advance Notice Period in the
Event of Premature Termination
by the Company
Tomas Kollert until the expiry of the 5-year
mandate
as per the requirements of the law
Eva Voborová until the expiry of the 5-year
mandate
as per the requirements of the law
Ivan Lyaskov until the expiry of the 5-year
mandate
as per the requirements of the law
Evelina Miltenova Velikova until the expiry of the 5-year
mandate
as per the requirements of the law
REMUNERATION REPORT (CONTINUED)
For the year ended 31 December 2022
xxxviii
The mandate of all members of the MB is 5 years. It was determined by a resolution of the SB starting
from 15 August 2022 and expiring on 15 August 2027.
The duration of the contracts of the members of the MB in the Reporting Period and the advance
notice period in the event of premature termination of the contracts by the Company are, as follows:
Member of the MB Duration of the Contract Advance Notice Period in the
Event of Premature Termination
by the Company
Jiří Řezníček until the expiry of the 5-year
mandate
as per the requirements of the law
Sylvia Drumeva Stefanova until the expiry of the 5-year
mandate
as per the requirements of the law
Jana Havlová until the expiry of the 5-year
mandate
as per the requirements of the law
During the Reporting Period, members of the SB were:
Tomas Kollert (during the whole Reporting Period)
Eva Voborová (during the whole Reporting Period);
Ivan Lyaskov (during the whole Reporting Period); and
Evelina Miltenova Velikova(during the whole Reporting Period);
The mandate of all members of the SB is 5 years. It was determined by a resolution of the General
Meeting held on 23 May 2018 and expires on 13 June 2023.
With a decision of the General Meeting of the Company/ GMS on September 152021 / the supervisory
powers were terminated, respectively the contracts for assignment of supervisory powers with the
members of the Supervisory Board - Frantisek Hamacek and Josef Laska.
According to the adopted decision, it comes into force from 01.01.2022, that is, after this date and
during the reporting period, their mandate was prematurely terminated on the basis of their request.
The duration of the contracts of the members of the SB in the Reporting Period and the advance notice
period in the event of premature termination of the contracts by the Company are, as follows:
Members of the SB Duration of the Contract Advance Notice Period in the
Event of Premature Termination
by the Company
Tomas Kollert until the expiry of the 5-year
mandate
as per the requirements of the law
Eva Voborová until the expiry of the 5-year
mandate
as per the requirements of the law
Ivan Lyaskov until the expiry of the 5-year
mandate
as per the requirements of the law
Evelina Miltenova Velikova until the expiry of the 5-year
mandate
as per the requirements of the law
KORADO-BULGARIA AD
REMUNERATION REPORT (CONTINUED)
For the year ended 31 December 2022
xxxix
In the Reporting Period members of the AC were:
• Martin Preisler, starting from 01.01.2022 (throughout the Reporting Period).
• Milena Toneva Raykova until September 14, 2022
• From September 14, 2022, Irena Milcheva Mihailova was elected in her place; and
• Snezhanka Kaloyanova (throughout the Reporting Period).
The mandate of all members of the А C is 3 years, determined by a decision of the General Meeting
held on 19.05.2021 and expiring on 19.05.2024.
The terms of Preissler's and Mihailova's mandates are equal to the general mandate - until 19.05.2024.
Pursuant to item 10, Par. 1 of the Policy, compensation for a premature termination of the contracts for
management or supervisory services in the Company shall not be due.
Pursuant to item 10, Par. 2 of the Policy the total of all compensations in the event of premature
termination, including compensation for non-compete following such termination of the respective
contract (inasmuch as such would become due) does not exceed the total of the respective fixed
remuneration for the last 2 years ending on the date of termination.
2.9. Information about the remuneration of each person, who has been a member of the MB,
SB and AC of the Company for a specific period within the respective financial year
2.9.1. Remunerations from the Company
The total amount of the remuneration accrued and/or paid by the Company to the persons, who were
members of the MB, SB and AC in the Reported Period is indicated in item 2.4 of the Report.
2.9.2. Other payments by the Company for services provided by the members of the MB, SB and AC
beyond the scope of their usual functions
In the Reporting Period, the Company accrued and made payments for services beyond the scope of
the ordinary functions of those members only to the member of the SB Ivan Lyaskov. That is namely
remuneration for services provided by him as a lawyer under a separate agreement for legal services.
The remuneration is determined on market terms and is at the expense of the Company andnot relating
to the functions of Mr. Lyaskov as a member of the SB.
2.9.3. Remunerations and other payments to the members of the MB, SB and AC by other persons /
legal entities belonging to the same group as the Company
In the Reporting Period, to the members of the MB, SB and AC were not made payments by other
persons / legal entities belonging to the same group as the Company, except for the following:
(a). remuneration paid by KORADO a.s. to the member of the SB František Hamáček under a
Management Agreement in the capacity of Mr. Hamáček as a member of the Board of Directors
of KORADO a.s. Czech Republic; and
The remunerations are determined on market terms and are not at the expense of the Company or
relating to the functions of Mr. Hamáček as member of the SB.
REMUNERATION REPORT (CONTINUED)
For the year ended 31 December 2022
xxxix
In the Reporting Period members of the AC were:
• Martin Preisler, starting from 01.01.2022 (throughout the Reporting Period).
• Milena Toneva Raykova until September 14, 2022
• From September 14, 2022, Irena Milcheva Mihailova was elected in her place; and
• Snezhanka Kaloyanova (throughout the Reporting Period).
The mandate of all members of the А C is 3 years, determined by a decision of the General Meeting
held on 19.05.2021 and expiring on 19.05.2024.
The terms of Preissler's and Mihailova's mandates are equal to the general mandate - until 19.05.2024.
Pursuant to item 10, Par. 1 of the Policy, compensation for a premature termination of the contracts for
management or supervisory services in the Company shall not be due.
Pursuant to item 10, Par. 2 of the Policy the total of all compensations in the event of premature
termination, including compensation for non-compete following such termination of the respective
contract (inasmuch as such would become due) does not exceed the total of the respective fixed
remuneration for the last 2 years ending on the date of termination.
2.9. Information about the remuneration of each person, who has been a member of the MB,
SB and AC of the Company for a specific period within the respective financial year
2.9.1. Remunerations from the Company
The total amount of the remuneration accrued and/or paid by the Company to the persons, who were
members of the MB, SB and AC in the Reported Period is indicated in item 2.4 of the Report.
2.9.2. Other payments by the Company for services provided by the members of the MB, SB and AC
beyond the scope of their usual functions
In the Reporting Period, the Company accrued and made payments for services beyond the scope of
the ordinary functions of those members only to the member of the SB Ivan Lyaskov. That is namely
remuneration for services provided by him as a lawyer under a separate agreement for legal services.
The remuneration is determined on market terms and is at the expense of the Company andnot relating
to the functions of Mr. Lyaskov as a member of the SB.
2.9.3. Remunerations and other payments to the members of the MB, SB and AC by other persons /
legal entities belonging to the same group as the Company
In the Reporting Period, to the members of the MB, SB and AC were not made payments by other
persons / legal entities belonging to the same group as the Company, except for the following:
(a). remuneration paid by KORADO a.s. to the member of the SB František Hamáček under a
Management Agreement in the capacity of Mr. Hamáček as a member of the Board of Directors
of KORADO a.s. Czech Republic; and
The remunerations are determined on market terms and are not at the expense of the Company or
relating to the functions of Mr. Hamáček as member of the SB.
KORADO-BULGARIA AD
REMUNERATION REPORT (CONTINUED)
For the year ended 31 December 2022
xl
2.9.4. Paid and/or accrued compensations in the event of termination of the functions of members of
the MB, SB and AC
In the Reporting Period, no compensation in the event of termination of functions was either accrued
or paid to any of the members of the MB, SB and AC.
All terminated contracts are voluntary and no compensation is due
2.9.5. Overall estimation of all in-kind benefits, equal to remuneration, granted to the members of the
MB, SB and AC
In the Reporting Period, no in-kind benefit, equal to remuneration, was either accrued, paid or granted
in any way whatsoever to any of the members of the MB, SB and AC.
2.9.6. Information about all the loans and the social benefits granted and the warranties made by the
Company or by subsidiary companies which were a subject to consolidation into its annual
financial statements, including data of the yet unpaid instalments and the interests due thereto
For the Reporting Period, the members of the MB, SB and AC did not receive any loans, payments as
social benefits or grant of warranty by the Company, a subsidiary of the Company or any other
company, which is subject to consolidation into the Annual Financial Statements of the Company.
2.9.7. Shares and/or options on shares and/or other incentive schemes based on shares to the
members of the MB, SB and AC
In the Reporting Period no remuneration or payment based on shares or options on shares to any of the
members of the MB, SB and AC was accrued, paid or granted. Neither did incentive schemes based on
shares, regarding the members of the MB, SB and AC, functioned in the Company.
3.Annual change in the remuneration, the results of the Company and the average amount of
remuneration on the basis of full-time employees of the Company, who are not directors, during
the previous at least five financial years, presented together in a way that allows comparison;
The results of the Company's activity in the previous five financial years are the following:
/ In thousands BGN /
2018 - profit BGN 5,254 thousand
2019 - profit BGN 4,262 thousand
2020 - profit BGN 4,591 thousand
2021 - profit BGN 4,759 thousand
2022 - profit BGN 4,382 thousand
The average remuneration based on full-time employees of the Company who are not directors, in the
previous at least five financial years are as follows:
2018 - BGN 1,360
2019 - BGN 1,530
2020 - BGN 1,580
2021 - BGN 1,870
2022 – BGN1,840
REMUNERATION REPORT (CONTINUED)
For the year ended 31 December 2022
xl
2.9.4. Paid and/or accrued compensations in the event of termination of the functions of members of
the MB, SB and AC
In the Reporting Period, no compensation in the event of termination of functions was either accrued
or paid to any of the members of the MB, SB and AC.
All terminated contracts are voluntary and no compensation is due
2.9.5. Overall estimation of all in-kind benefits, equal to remuneration, granted to the members of the
MB, SB and AC
In the Reporting Period, no in-kind benefit, equal to remuneration, was either accrued, paid or granted
in any way whatsoever to any of the members of the MB, SB and AC.
2.9.6. Information about all the loans and the social benefits granted and the warranties made by the
Company or by subsidiary companies which were a subject to consolidation into its annual
financial statements, including data of the yet unpaid instalments and the interests due thereto
For the Reporting Period, the members of the MB, SB and AC did not receive any loans, payments as
social benefits or grant of warranty by the Company, a subsidiary of the Company or any other
company, which is subject to consolidation into the Annual Financial Statements of the Company.
2.9.7. Shares and/or options on shares and/or other incentive schemes based on shares to the
members of the MB, SB and AC
In the Reporting Period no remuneration or payment based on shares or options on shares to any of the
members of the MB, SB and AC was accrued, paid or granted. Neither did incentive schemes based on
shares, regarding the members of the MB, SB and AC, functioned in the Company.
3.Annual change in the remuneration, the results of the Company and the average amount of
remuneration on the basis of full-time employees of the Company, who are not directors, during
the previous at least five financial years, presented together in a way that allows comparison;
The results of the Company's activity in the previous five financial years are the following:
/ In thousands BGN /
2018 - profit BGN 5,254 thousand
2019 - profit BGN 4,262 thousand
2020 - profit BGN 4,591 thousand
2021 - profit BGN 4,759 thousand
2022 - profit BGN 4,382 thousand
The average remuneration based on full-time employees of the Company who are not directors, in the
previous at least five financial years are as follows:
2018 - BGN 1,360
2019 - BGN 1,530
2020 - BGN 1,580
2021 - BGN 1,870
2022 – BGN1,840
KORADO-BULGARIA AD
REMUNERATION REPORT (CONTINUED)
For the year ended 31 December 2022
xli
4. Information on the exercise of the possibility to demand a refund of the variable
remuneration;
As stated above, during the Reporting Period variable remuneration was not paid and there is no
objective possibility for its return.
5. Information on all deviations from the procedure for the implementation of the remuneration
policy in connection with extraordinary circumstances under Art. 11, para. 13, including an
explanation of the nature of the exceptional circumstances and an indication of the specific
components that have not been applied.
So far, no procedure has been discussed and suggested a procedure for deviation from the application
of the adopted Remuneration Policy in connection with and / or on the basis of extraordinary
circumstances, as well as the definition of such circumstances.
6. PROGRAMME ON THE IMPLEMENTATION OF THE POLICY THROUGH THE
FINANCIAL YEAR 1 JANUARY 2023 – 31 DECEMBER 2023
For the period January 1, 2023 - December 31, 2023, the Company intends to adhere to the current
Remuneration Policy of the members of the Management Board, the Supervisory Board and the Board
of Directors. These remunerations would be determined as fixed, unless the General Meeting adopts a
resolution on the introduction of a variable component of such remuneration, in compliance with the
relevant requirements to the introduction of assessment criteria for the achieved results and the
deferral of the payment of a specific portion of such variable remuneration.
In the event that in the period 1 January 2023 – 31 December 2023 the General Meeting adopts a
resolution on granting to the MB, SB or AC members any remuneration based on shares or on any
other way of granting tangible or intangible incentives, the accrual and the payment of such
remuneration will be performed only following the adoption of scheme on granting of remuneration
based on shares, as proposed to and approved by the General Meeting and/or in accordance with
adopted rules on determination of a bonus scheme.
In the event that in the period 1 January 2023 – 31 December 2023 any amendments or
supplementations to the legislation occur, which require any respective amendment or
supplementation to the contracts on the assignment of management or supervisory services, as already
concluded, such amendments will be accomplished and realised on the basis of negotiations with the
respective members of the MB, SB and AC in accordance with the adopted Policy, the Articles of
Association of the Company and the applicable legislation.
In view of the changes in the legislation during the reporting period, a new Remuneration Policy is to
be adopted and approved by the forthcoming GMS, which will accordingly take into account and
include all changes that have occurred.
This report on the implementation of the Remuneration Policy of the members of the Supervisory and
Management Boards of KORADO-Bulgaria AD in 2022 was adopted at a meeting of the Management
Board of the Company, held in 20 February 2023.
Chairman of the Management Board of KORADO-Bulgaria AD:
________________
Jiří Řezníček
REMUNERATION REPORT (CONTINUED)
For the year ended 31 December 2022
xli
4. Information on the exercise of the possibility to demand a refund of the variable
remuneration;
As stated above, during the Reporting Period variable remuneration was not paid and there is no
objective possibility for its return.
5. Information on all deviations from the procedure for the implementation of the remuneration
policy in connection with extraordinary circumstances under Art. 11, para. 13, including an
explanation of the nature of the exceptional circumstances and an indication of the specific
components that have not been applied.
So far, no procedure has been discussed and suggested a procedure for deviation from the application
of the adopted Remuneration Policy in connection with and / or on the basis of extraordinary
circumstances, as well as the definition of such circumstances.
6. PROGRAMME ON THE IMPLEMENTATION OF THE POLICY THROUGH THE
FINANCIAL YEAR 1 JANUARY 2023 – 31 DECEMBER 2023
For the period January 1, 2023 - December 31, 2023, the Company intends to adhere to the current
Remuneration Policy of the members of the Management Board, the Supervisory Board and the Board
of Directors. These remunerations would be determined as fixed, unless the General Meeting adopts a
resolution on the introduction of a variable component of such remuneration, in compliance with the
relevant requirements to the introduction of assessment criteria for the achieved results and the
deferral of the payment of a specific portion of such variable remuneration.
In the event that in the period 1 January 2023 – 31 December 2023 the General Meeting adopts a
resolution on granting to the MB, SB or AC members any remuneration based on shares or on any
other way of granting tangible or intangible incentives, the accrual and the payment of such
remuneration will be performed only following the adoption of scheme on granting of remuneration
based on shares, as proposed to and approved by the General Meeting and/or in accordance with
adopted rules on determination of a bonus scheme.
In the event that in the period 1 January 2023 – 31 December 2023 any amendments or
supplementations to the legislation occur, which require any respective amendment or
supplementation to the contracts on the assignment of management or supervisory services, as already
concluded, such amendments will be accomplished and realised on the basis of negotiations with the
respective members of the MB, SB and AC in accordance with the adopted Policy, the Articles of
Association of the Company and the applicable legislation.
In view of the changes in the legislation during the reporting period, a new Remuneration Policy is to
be adopted and approved by the forthcoming GMS, which will accordingly take into account and
include all changes that have occurred.
This report on the implementation of the Remuneration Policy of the members of the Supervisory and
Management Boards of KORADO-Bulgaria AD in 2022 was adopted at a meeting of the Management
Board of the Company, held in 20 February 2023.
Chairman of the Management Board of KORADO-Bulgaria AD:
________________
Jiří Řezníček
KORADO-BULGARIA AD
STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 December 2022
The notes set out on pages 5-35 are an integral part of these financial statements. 1
Financial statements in English are translation from the original in Bulgarian
Notes 2022 2021
BGN’000 BGN’000
Sale of products 54,247 55,592
Sale of goods 810 1,057
Sales of services 76 73
Revenue from contracts with customers 3.1 55,133 56,722
Other income 3.2 383 2,162
Income government finance 3.2 1,921 172
Expenses for materials (42,091) (41,657)
Employee benefit expense 3.3 (6,427) (6,664)
Expenses for hired services 3.4 (1,747) (1,693)
Depreciation and amortization expenses 6, 7, 12.2 (1,065) (1,087)
Other expenses 3.5 (1,156) (3,095)
Changes in finished goods and work in progress 39 525
Operating profit 4,990 5,385
Finance costs 3.6 (118) (94)
Profit before income tax 4,872 5,291
Income tax expense 4 (490) (532)
Profit for the year 4,382 4,759
Other comprehensive income not to be reclassified to profit or
loss in subsequent periods
Actuarial losses on defined benefit plans (40) (45)
Income tax effect 4 4
Other comprehensive income, net of taxes (36) (41)
Total comprehensive income 4,346 4,718
Basic and diluted earnings per share 5 0,33 0,36
The financial statements have been approved by the Management Board of Korado-Bulgaria AD on March 20,
2023.
Jiri Reznicek Silviya Stefanova
Executive Director Chief Accountant
Rositsa Boteva
Registered Auditor, in charge of the audit
Statutory Manager at Deloitte Audit OOD
Registration number 033 in the Register under Art. 20 of IFAA
STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 December 2022
The notes set out on pages 5-35 are an integral part of these financial statements. 1
Financial statements in English are translation from the original in Bulgarian
Notes 2022 2021
BGN’000 BGN’000
Sale of products 54,247 55,592
Sale of goods 810 1,057
Sales of services 76 73
Revenue from contracts with customers 3.1 55,133 56,722
Other income 3.2 383 2,162
Income government finance 3.2 1,921 172
Expenses for materials (42,091) (41,657)
Employee benefit expense 3.3 (6,427) (6,664)
Expenses for hired services 3.4 (1,747) (1,693)
Depreciation and amortization expenses 6, 7, 12.2 (1,065) (1,087)
Other expenses 3.5 (1,156) (3,095)
Changes in finished goods and work in progress 39 525
Operating profit 4,990 5,385
Finance costs 3.6 (118) (94)
Profit before income tax 4,872 5,291
Income tax expense 4 (490) (532)
Profit for the year 4,382 4,759
Other comprehensive income not to be reclassified to profit or
loss in subsequent periods
Actuarial losses on defined benefit plans (40) (45)
Income tax effect 4 4
Other comprehensive income, net of taxes (36) (41)
Total comprehensive income 4,346 4,718
Basic and diluted earnings per share 5 0,33 0,36
The financial statements have been approved by the Management Board of Korado-Bulgaria AD on March 20,
2023.
Jiri Reznicek Silviya Stefanova
Executive Director Chief Accountant
Rositsa Boteva
Registered Auditor, in charge of the audit
Statutory Manager at Deloitte Audit OOD
Registration number 033 in the Register under Art. 20 of IFAA
KORADO-BULGARIA AD
STATEMENT OF FINANCIAL POSITION
At 31 December 2022
The notes set out on pages 5-35 are an integral part of these financial statements. 2
Financial statements in English are translation from the original in Bulgarian
Notes 31.12.2022 31.12.2021
BGN’000 BGN’000
ASSETS
Non-current assets
Property, plant and equipment 6 14,210 14,246
Right-of-use assets 12.2 557 219
Intangible assets 7 14 13
Deferred tax assets 4 - 11
14,781 14,489
Current assets
Inventories 8 12,651 13,861
Trade and other receivables 9 997 1,584
Related party trade receivables 16 4,023 4,397
Cash and cash equivalents 10 489 1,170
18,160 21,012
TOTAL ASSETS 32,941 35,501
EQUITY AND LIABILITIES
Equity
Share capital 11.1 13,169 13,169
Share premium 11.2 119 119
Reserves 11.4 644 681
Retained earnings 8,954 8,391
Total equity 22,886 22,360
Non-current liabilities
Lease liabilities 12.1 254 116
Retirement benefit obligation 13 529 543
Loan payables to related parties 16 6,063 3,716
Deferred tax liabilities 4 7 -
6,853 4,375
Current liabilities
Trade and other payables 14 2,001 7,491
Related party trade and other payables 16 823 805
Current tax liabilities 148 200
Provisions 15 107 220
Lease liabilities 12.1 123 50
3,202 8,766
Total liabilities 10,055 13,141
TOTAL EQUITY AND LIABILITIES 32,941 35,501
The financial statements have been approved by the Management Board of KORADO-Bulgaria AD on March
20, 2023.
Jiri Reznicek Silviya Stefanova
Executive Director Chief Accountant
Rositsa Boteva
Registered Auditor, in charge of the audit
Statutory Manager at Deloitte Audit OOD
Registration number 033 in the Register under Art. 20 of IFAA
STATEMENT OF FINANCIAL POSITION
At 31 December 2022
The notes set out on pages 5-35 are an integral part of these financial statements. 2
Financial statements in English are translation from the original in Bulgarian
Notes 31.12.2022 31.12.2021
BGN’000 BGN’000
ASSETS
Non-current assets
Property, plant and equipment 6 14,210 14,246
Right-of-use assets 12.2 557 219
Intangible assets 7 14 13
Deferred tax assets 4 - 11
14,781 14,489
Current assets
Inventories 8 12,651 13,861
Trade and other receivables 9 997 1,584
Related party trade receivables 16 4,023 4,397
Cash and cash equivalents 10 489 1,170
18,160 21,012
TOTAL ASSETS 32,941 35,501
EQUITY AND LIABILITIES
Equity
Share capital 11.1 13,169 13,169
Share premium 11.2 119 119
Reserves 11.4 644 681
Retained earnings 8,954 8,391
Total equity 22,886 22,360
Non-current liabilities
Lease liabilities 12.1 254 116
Retirement benefit obligation 13 529 543
Loan payables to related parties 16 6,063 3,716
Deferred tax liabilities 4 7 -
6,853 4,375
Current liabilities
Trade and other payables 14 2,001 7,491
Related party trade and other payables 16 823 805
Current tax liabilities 148 200
Provisions 15 107 220
Lease liabilities 12.1 123 50
3,202 8,766
Total liabilities 10,055 13,141
TOTAL EQUITY AND LIABILITIES 32,941 35,501
The financial statements have been approved by the Management Board of KORADO-Bulgaria AD on March
20, 2023.
Jiri Reznicek Silviya Stefanova
Executive Director Chief Accountant
Rositsa Boteva
Registered Auditor, in charge of the audit
Statutory Manager at Deloitte Audit OOD
Registration number 033 in the Register under Art. 20 of IFAA
KORADO-BULGARIA AD
STATEMENT OF CHANGES IN EQUITY
For the year ending 31 December 2022
The notes set out on pages 5-35 are an integral part of these financial statements. 3
Financial statements in English are translation from the original in Bulgarian
Share
capital
(Note 11.1)
Share
premium
(Note 11.2)
Statutory
and other
reserves
(Note 11.4)
Revaluation
reserve
Reserve
from
actuarial
valuations
Retained
earnings Total
BGN’000 BGN’000 BGN’000 BGN’000 BGN’000 BGN’000 BGN’000
At 1 January 2021 13,169 119 1,327 - (605) 7,451 21,460
Profit for the year - - - - - 4,759 4,759
Other comprehensive income - - - - (41) - (41)
Total comprehensive income - - - - (41) 4,759 4,718
Transactions with owners
Dividends (Note 11.5) - - - - - (3,819) (3,819)
Total transactions with
owners - - - - (3,819) (3,819)
At 31 December 2021 13,169 119 1,327 - (646) 8,391 22,360
At 1 January 2022 13,169 119 1,327 - (646) 8,391 22,360
Profit for the year - - - - - 4,382 4,382
Other comprehensive income - - - - (36) - (36)
Total comprehensive income - - - - (36) 4,382 4,346
Transactions with owners
Dividends (Note 11.5) - - - - - (3,819) (3,819)
Total transactions with
owners - - - - - - -
At 31 December 2022 13,169 119 1,327 - (683) 8,954 22,886
The financial statements have been approved by the Management Board of KORADO-Bulgaria AD on March
20, 2023.
Jiri Reznicek Silviya Stefanova
Executive Director Chief Accountant
Rositsa Boteva
Registered Auditor, in charge of the audit
Statutory Manager at Deloitte Audit OOD
Registration number 033 in the Register under Art. 20 of IFAA
STATEMENT OF CHANGES IN EQUITY
For the year ending 31 December 2022
The notes set out on pages 5-35 are an integral part of these financial statements. 3
Financial statements in English are translation from the original in Bulgarian
Share
capital
(Note 11.1)
Share
premium
(Note 11.2)
Statutory
and other
reserves
(Note 11.4)
Revaluation
reserve
Reserve
from
actuarial
valuations
Retained
earnings Total
BGN’000 BGN’000 BGN’000 BGN’000 BGN’000 BGN’000 BGN’000
At 1 January 2021 13,169 119 1,327 - (605) 7,451 21,460
Profit for the year - - - - - 4,759 4,759
Other comprehensive income - - - - (41) - (41)
Total comprehensive income - - - - (41) 4,759 4,718
Transactions with owners
Dividends (Note 11.5) - - - - - (3,819) (3,819)
Total transactions with
owners - - - - (3,819) (3,819)
At 31 December 2021 13,169 119 1,327 - (646) 8,391 22,360
At 1 January 2022 13,169 119 1,327 - (646) 8,391 22,360
Profit for the year - - - - - 4,382 4,382
Other comprehensive income - - - - (36) - (36)
Total comprehensive income - - - - (36) 4,382 4,346
Transactions with owners
Dividends (Note 11.5) - - - - - (3,819) (3,819)
Total transactions with
owners - - - - - - -
At 31 December 2022 13,169 119 1,327 - (683) 8,954 22,886
The financial statements have been approved by the Management Board of KORADO-Bulgaria AD on March
20, 2023.
Jiri Reznicek Silviya Stefanova
Executive Director Chief Accountant
Rositsa Boteva
Registered Auditor, in charge of the audit
Statutory Manager at Deloitte Audit OOD
Registration number 033 in the Register under Art. 20 of IFAA
KORADO-BULGARIA AD
STATEMENT OF CASH FLOWS
For the year ending 31 December 2022
The notes set out on pages 5-35 are an integral part of these financial statements. 4
Financial statements in English are translation from the original in Bulgarian
Notes 2022 2021
BGN’000 BGN’000
CASH FLOWS FROM OPERATING ACTIVITY
Proceeds from customers* 54,055 59,566
Payments to suppliers* (46,910) (52,221)
Payments to personnel and social security (6,763) (6,654)
Taxes and customs duties paid (other than income taxes) (4,462) (3,194)
Taxes refunded (other than income taxes) 6,359 5,380
Income tax paid (562) (447)
Interest paid (4) (5)
Bank charges paid and foreign currency differences (49) (24)
Other payments, net (257) (285)
Net cash flows from operating activity 1,407 2,116
CASH FLOWS FROM INVESTING ACTIVITY
Purchase of property, plant and equipment (420) (651)
Net cash flows used in investing activity (420) (651)
CASH FLOWS FROM FINANCING ACTIVITY
Lease payments 12.1, 20 (196) (96)
Amount loan 16, 20 2,347 -
Dividends paid 11.5, 20 (3,819) (3,819)
Net cash flows used in financing activity (1,668) (3,915)
Net decrease in cash and cash equivalents (681) (2,450)
Cash and cash equivalents at 1 January 10 1,170 3,620
Cash and cash equivalents at 31 December 2022 10 489 1,170
*Proceeds from customers and payments to suppliers are presented gross including Value Added Tax (VAT)
The financial statements have been approved by the Management Board of KORADO-Bulgaria AD on March
20, 2023.
Jiri Reznicek Silviya Stefanova
Executive Director Chief Accountant
Rositsa Boteva
Registered Auditor, in charge of the audit
Statutory Manager at Deloitte Audit OOD
Registration number 033 in the Register under Art. 20 of IFAA
STATEMENT OF CASH FLOWS
For the year ending 31 December 2022
The notes set out on pages 5-35 are an integral part of these financial statements. 4
Financial statements in English are translation from the original in Bulgarian
Notes 2022 2021
BGN’000 BGN’000
CASH FLOWS FROM OPERATING ACTIVITY
Proceeds from customers* 54,055 59,566
Payments to suppliers* (46,910) (52,221)
Payments to personnel and social security (6,763) (6,654)
Taxes and customs duties paid (other than income taxes) (4,462) (3,194)
Taxes refunded (other than income taxes) 6,359 5,380
Income tax paid (562) (447)
Interest paid (4) (5)
Bank charges paid and foreign currency differences (49) (24)
Other payments, net (257) (285)
Net cash flows from operating activity 1,407 2,116
CASH FLOWS FROM INVESTING ACTIVITY
Purchase of property, plant and equipment (420) (651)
Net cash flows used in investing activity (420) (651)
CASH FLOWS FROM FINANCING ACTIVITY
Lease payments 12.1, 20 (196) (96)
Amount loan 16, 20 2,347 -
Dividends paid 11.5, 20 (3,819) (3,819)
Net cash flows used in financing activity (1,668) (3,915)
Net decrease in cash and cash equivalents (681) (2,450)
Cash and cash equivalents at 1 January 10 1,170 3,620
Cash and cash equivalents at 31 December 2022 10 489 1,170
*Proceeds from customers and payments to suppliers are presented gross including Value Added Tax (VAT)
The financial statements have been approved by the Management Board of KORADO-Bulgaria AD on March
20, 2023.
Jiri Reznicek Silviya Stefanova
Executive Director Chief Accountant
Rositsa Boteva
Registered Auditor, in charge of the audit
Statutory Manager at Deloitte Audit OOD
Registration number 033 in the Register under Art. 20 of IFAA
KORADO-BULGARIA AD
NOTES TO THE FINANCIAL STATEMENTS
31 December 2022
Financial statements in English are translation from the original in Bulgarian 5
1. Corporate information
KORADO-Bulgaria AD (“the Company”) is a joint -stock company, registered with the Veliko Tarnovo District
Court under UIC 814190902, with registered address and address of management in the town of Strazhitsa,
Veliko Tarnovo Region, 28 Gladstone Street. All shares of the Company are registered and traded on Bulgarian
Stock Exchange – Sofia AD, Premium Segment. Number of shares in circulation: 13 168 614. Stock exchange
code is KBG (4KX).
The main scope of activity of the Company includes: manufacture and sale of heating equipment.
At 31 December 2022 the Company’s shareholders are:
- KORADO a.s., Czech Republic 82,15 %
- Individuals and legal entities 17,85 %
The ultimate parent company is KORADO a.s., Czech Republic. None of the owners of the ultimate parent
company owns more than 35% of the parent’s shares.
The Company’s management consists of Management Board. Those charged with governance are represented by
the Supervisory Board and the Audit Committee of the Company.
According to the Bulgarian legislation, a decision of the General Meeting for approval of these annual financial
statements can be subsequently revoked (by applying the relevant procedure) and in case it is considered
appropriate, new revised financial statements can be prepared and issued for the same financial year.
1.1. Basis of preparation
Statement of compliance
The financial statements of the Company have been prepared in accordance with International Financial
Reporting Standards (IFRS) and interpretations issued by the IFRS Interpretations Committee (IFRS IC) as
adopted by the European Union (EU). IFRSs as adopted by the EU is the commonly accepted name of the
general purpose framework – the basis of accounting equivalent to the framework definition introduced by § 1,
p. 8 of the Additional Provisions of the Accountancy Act “International Accounting Standards” (IASs).
Historical cost convention
The financial statements have been prepared on a historical cost basis.
The preparation of financial statements in conformity with IFRS requires the use of certain critical and
accounting estimates. It also requires management of the Company to execute its judgment and assumptions
when applying the accounting policies. The areas involving a higher degree of judgment or complexity, or areas
where assumptions and estimates are significant to the financial statements are disclosed in Note 2.
Going concern
The financial statements have been prepared on a going concern basis. The financial statements have been
prepared in Bulgarian leva and all amounts have been rounded off to the nearest thousand (BGN’000), unless
otherwise stated.
NOTES TO THE FINANCIAL STATEMENTS
31 December 2022
Financial statements in English are translation from the original in Bulgarian 5
1. Corporate information
KORADO-Bulgaria AD (“the Company”) is a joint -stock company, registered with the Veliko Tarnovo District
Court under UIC 814190902, with registered address and address of management in the town of Strazhitsa,
Veliko Tarnovo Region, 28 Gladstone Street. All shares of the Company are registered and traded on Bulgarian
Stock Exchange – Sofia AD, Premium Segment. Number of shares in circulation: 13 168 614. Stock exchange
code is KBG (4KX).
The main scope of activity of the Company includes: manufacture and sale of heating equipment.
At 31 December 2022 the Company’s shareholders are:
- KORADO a.s., Czech Republic 82,15 %
- Individuals and legal entities 17,85 %
The ultimate parent company is KORADO a.s., Czech Republic. None of the owners of the ultimate parent
company owns more than 35% of the parent’s shares.
The Company’s management consists of Management Board. Those charged with governance are represented by
the Supervisory Board and the Audit Committee of the Company.
According to the Bulgarian legislation, a decision of the General Meeting for approval of these annual financial
statements can be subsequently revoked (by applying the relevant procedure) and in case it is considered
appropriate, new revised financial statements can be prepared and issued for the same financial year.
1.1. Basis of preparation
Statement of compliance
The financial statements of the Company have been prepared in accordance with International Financial
Reporting Standards (IFRS) and interpretations issued by the IFRS Interpretations Committee (IFRS IC) as
adopted by the European Union (EU). IFRSs as adopted by the EU is the commonly accepted name of the
general purpose framework – the basis of accounting equivalent to the framework definition introduced by § 1,
p. 8 of the Additional Provisions of the Accountancy Act “International Accounting Standards” (IASs).
Historical cost convention
The financial statements have been prepared on a historical cost basis.
The preparation of financial statements in conformity with IFRS requires the use of certain critical and
accounting estimates. It also requires management of the Company to execute its judgment and assumptions
when applying the accounting policies. The areas involving a higher degree of judgment or complexity, or areas
where assumptions and estimates are significant to the financial statements are disclosed in Note 2.
Going concern
The financial statements have been prepared on a going concern basis. The financial statements have been
prepared in Bulgarian leva and all amounts have been rounded off to the nearest thousand (BGN’000), unless
otherwise stated.
KORADO-BULGARIA AD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
31 December 2022
Financial statements in English are translation from the original in Bulgarian 6
1.1. Basis of preparation (continued)
Going concern (continued)
The Company's current assets exceed its current liabilities as of 31 December 2022 with the amount of BGN
14,958 thousand (31 December 2021: BGN 12,246 thousand). For the year ended 31 December 2022 the
Company generates profit before tax in the amount of BGN 4,872 thousand (31 December 2021: BGN 5,291
thousand). As at 31 December 2022 t he Company has equity in the amount of BGN 22,886 thousand (31
December 2021: BGN 22,360 thousand) and cash and cash equivalents in the amount of BGN 489 thousand (31
December 2021: BGN 1,170 thousand). During the year it generates net cash flows from operating activities in
the amount of BGN 1,407 thousand. (2021: BGN: 2,116 thousand).
Because of the unfavourable economic conditions, the Company’s revenue from sales for 2022 declined by 3%
compared of the same period previous year.
Based on the current analysis, management has not identified a significant uncertainty as to whether the
Company will be able to continue as a going concern. The Company also has the intention and ability to take the
measures necessary to continue as a going concern. Currently, the Company has no liquidity difficulties and
delays in deliveries, it performs timely payments to its suppliers and takes measures to reduce operating costs.
1.2. Summary of significant accounting policies
a) Foreign currency translation
The financial statements are presented in Bulgarian leva, which is also the functional and presentation currency
of the Company. Transactions in foreign currencies are initially recorded in the functional currency rate ruling at
the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated on a
monthly basis by applying the exchange rate published by the Bulgarian National Bank for the last working day
of the respective month. All exchange differences are recognised in the statement of comprehensive income.
Non-monetary items that are measured at historical cost in a foreign currency are translated using the exchange
rate as of the date of initial transaction (acquisition).
b) Revenue from contracts with customers
The Company produces and sells radiators. Customers of the Company are wholesalers. Respectively, sales are
recognised when control of the products (finished goods and goods for resale) has transferred, being when the
products are delivered to the client, the client has full discretion over the channel and price to sell the products,
and there is no unfulfilled obligation that could affect the client’s acceptance of the products. Delivery occurs
when the products have been shipped to the specific location, the risks of obsolescence and loss have been
transferred to the client, and either the client has accepted the products in accordance with the sales contract, the
acceptance provisions have lapsed, or the Company has objective evidence that all criteria for acceptance have
been satisfied.
For the purposes of management, the Company has only one operating segment.
The products are often sold with retrospective volume discounts based on aggregate sales over a 12 months
period. Revenue from these sales is recognised based on the price specified in the contract, net of the estimated
volume discounts. Accumulated experience is used to estimate and provide for the discounts, using the expected
value method, and revenue is only recognised to the extent that it is highly probable that a significant reversal
will not occur.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
31 December 2022
Financial statements in English are translation from the original in Bulgarian 6
1.1. Basis of preparation (continued)
Going concern (continued)
The Company's current assets exceed its current liabilities as of 31 December 2022 with the amount of BGN
14,958 thousand (31 December 2021: BGN 12,246 thousand). For the year ended 31 December 2022 the
Company generates profit before tax in the amount of BGN 4,872 thousand (31 December 2021: BGN 5,291
thousand). As at 31 December 2022 t he Company has equity in the amount of BGN 22,886 thousand (31
December 2021: BGN 22,360 thousand) and cash and cash equivalents in the amount of BGN 489 thousand (31
December 2021: BGN 1,170 thousand). During the year it generates net cash flows from operating activities in
the amount of BGN 1,407 thousand. (2021: BGN: 2,116 thousand).
Because of the unfavourable economic conditions, the Company’s revenue from sales for 2022 declined by 3%
compared of the same period previous year.
Based on the current analysis, management has not identified a significant uncertainty as to whether the
Company will be able to continue as a going concern. The Company also has the intention and ability to take the
measures necessary to continue as a going concern. Currently, the Company has no liquidity difficulties and
delays in deliveries, it performs timely payments to its suppliers and takes measures to reduce operating costs.
1.2. Summary of significant accounting policies
a) Foreign currency translation
The financial statements are presented in Bulgarian leva, which is also the functional and presentation currency
of the Company. Transactions in foreign currencies are initially recorded in the functional currency rate ruling at
the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated on a
monthly basis by applying the exchange rate published by the Bulgarian National Bank for the last working day
of the respective month. All exchange differences are recognised in the statement of comprehensive income.
Non-monetary items that are measured at historical cost in a foreign currency are translated using the exchange
rate as of the date of initial transaction (acquisition).
b) Revenue from contracts with customers
The Company produces and sells radiators. Customers of the Company are wholesalers. Respectively, sales are
recognised when control of the products (finished goods and goods for resale) has transferred, being when the
products are delivered to the client, the client has full discretion over the channel and price to sell the products,
and there is no unfulfilled obligation that could affect the client’s acceptance of the products. Delivery occurs
when the products have been shipped to the specific location, the risks of obsolescence and loss have been
transferred to the client, and either the client has accepted the products in accordance with the sales contract, the
acceptance provisions have lapsed, or the Company has objective evidence that all criteria for acceptance have
been satisfied.
For the purposes of management, the Company has only one operating segment.
The products are often sold with retrospective volume discounts based on aggregate sales over a 12 months
period. Revenue from these sales is recognised based on the price specified in the contract, net of the estimated
volume discounts. Accumulated experience is used to estimate and provide for the discounts, using the expected
value method, and revenue is only recognised to the extent that it is highly probable that a significant reversal
will not occur.
KORADO-BULGARIA AD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
31 December 2022
Financial statements in English are translation from the original in Bulgarian 7
1.2 Summary of significant accounting policies (continued)
b) Revenue from contracts with customers (continued)
A refund liability (included in trade and other receivables) is recognised for expected volume discounts payable
to customers in relation to sales made until the end of the reporting period. No element of financing is deemed
present as the sales are made with a credit term of 30-60 days, which is consistent with market practice. The
Company’s obligation to repair or replace faulty products under the standard warranty terms is recognised as a
provision.
A receivable is recognised when the goods are delivered as this is the point in time that the consideration is
unconditional because only the passage of time is required before the payment is due.
The Company analyses its sales arrangements according to specific criteria in order to determine whether it acts
as a principal or agent. It has reached the conclusion that it acts as a principal in relation to all such arrangements
as it controls the goods before transferring them to the customers.
c) Taxes
Current income tax
Current income tax assets and liabilities for the current and prior periods are measured at the amount expected to
be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are
those that are enacted or substantially enacted by the reporting date. Management analyses the individual items
of the tax return for which the applicable tax provisions are subject to interpretation and recognises provisions
where appropriate.
Current income tax is recognised directly in the equity or in other comprehensive income (and not in profit or
loss) where the tax relates to items that have been recognised directly in the equity or in other comprehensive
income.
Deferred income tax
Deferred income tax is provided using the liability method on temporary differences at the reporting date
between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.
Deferred income tax liabilities are recognized for all taxable temporary differences, except where the deferred
income tax liability arises from the initial recognition of an asset or liability in a transaction that is not a business
combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss.
Deferred income tax assets are recognized for all deductible temporary differences, carry forward of unused tax
credits and unused tax losses, to the extent that it is probable that taxable profit will be available against which
the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be
utilised except where the deferred income tax asset relating to the deductible temporary difference arises from
the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of
the transaction, affects neither the accounting profit nor taxable profit or loss.
The carrying amount of deferred income tax assets is reviewed at each reporting date and reduced to the extent
that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred
income tax asset to be utilised. Unrecognized deferred income tax assets are reassessed at each reporting date
and are recognized to the extent that it has become probable that future taxable profit will allow the deferred tax
asset to be recovered.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply in the period
when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or
substantively enacted at the reporting date.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
31 December 2022
Financial statements in English are translation from the original in Bulgarian 7
1.2 Summary of significant accounting policies (continued)
b) Revenue from contracts with customers (continued)
A refund liability (included in trade and other receivables) is recognised for expected volume discounts payable
to customers in relation to sales made until the end of the reporting period. No element of financing is deemed
present as the sales are made with a credit term of 30-60 days, which is consistent with market practice. The
Company’s obligation to repair or replace faulty products under the standard warranty terms is recognised as a
provision.
A receivable is recognised when the goods are delivered as this is the point in time that the consideration is
unconditional because only the passage of time is required before the payment is due.
The Company analyses its sales arrangements according to specific criteria in order to determine whether it acts
as a principal or agent. It has reached the conclusion that it acts as a principal in relation to all such arrangements
as it controls the goods before transferring them to the customers.
c) Taxes
Current income tax
Current income tax assets and liabilities for the current and prior periods are measured at the amount expected to
be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are
those that are enacted or substantially enacted by the reporting date. Management analyses the individual items
of the tax return for which the applicable tax provisions are subject to interpretation and recognises provisions
where appropriate.
Current income tax is recognised directly in the equity or in other comprehensive income (and not in profit or
loss) where the tax relates to items that have been recognised directly in the equity or in other comprehensive
income.
Deferred income tax
Deferred income tax is provided using the liability method on temporary differences at the reporting date
between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.
Deferred income tax liabilities are recognized for all taxable temporary differences, except where the deferred
income tax liability arises from the initial recognition of an asset or liability in a transaction that is not a business
combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss.
Deferred income tax assets are recognized for all deductible temporary differences, carry forward of unused tax
credits and unused tax losses, to the extent that it is probable that taxable profit will be available against which
the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be
utilised except where the deferred income tax asset relating to the deductible temporary difference arises from
the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of
the transaction, affects neither the accounting profit nor taxable profit or loss.
The carrying amount of deferred income tax assets is reviewed at each reporting date and reduced to the extent
that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred
income tax asset to be utilised. Unrecognized deferred income tax assets are reassessed at each reporting date
and are recognized to the extent that it has become probable that future taxable profit will allow the deferred tax
asset to be recovered.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply in the period
when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or
substantively enacted at the reporting date.
KORADO-BULGARIA AD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
31 December 2022
Financial statements in English are translation from the original in Bulgarian 8
1.2 Summary of significant accounting policies (continued)
c) Taxes (continued)
Deferred income tax (continued)
Deferred taxes relating to items recognized outside profit and loss are recognized out of profit and loss. Deferred
taxes are recognized depending on the transaction they relate to in other comprehensive income, or directly in
equity.
Deferred income tax assets and deferred income tax liabilities are offset, if a legally enforceable right exists to
set off current tax assets against current income tax liabilities and the deferred income taxes relate to the same
taxable entity and the same taxation authority. As of reporting date – offsetting is applied by Company.
Value added tax (VAT)
Revenue, expenses and assets are recognised net of VAT except:
when the VAT incurred on a purchase of assets or services is not recoverable from the taxation authority, in
which case the VAT is recognised as part of the cost of acquisition of the asset or as part of the expense item as
applicable; and
receivables and payables that are stated with the amount of VAT included.
The net amount of VAT recoverable from, or payable to, the taxation authority is included as part of receivables
or payables in the statement of financial position.
d) Financial instruments
(d.1.) Investments and other financial assets
Debt instruments
(i) Classification
The Company classifies its financial assets depending on the business model used to manage these assets and the
specifics of their contractual cash flows as follows:
those to be measured subsequently at fair value through profit or loss;
those to be measured subsequently at fair value through OCI, and
those to be measured at amortised cost.
For assets measured at fair value, gains and losses will either be recorded in profit or loss or other
comprehensive income. For investments in equity instruments that are not held for trading, this will depend on
whether the Company has made an irrevocable election at the time of initial recognition to account for the equity
investment at fair value through other comprehensive income. The Company reclassifies debt investments when
and only when its business model for managing those assets changes.
(ii) Recognition and derecognition
Regular way purchases and sales of financial assets are recognised on trade-date, the date on which the Company
commits to purchase or sell the asset. Financial assets are derecognised when the rights to receive cash flows
from the financial assets have expired or have been transferred and the Company has transferred substantially all
the risks and rewards of ownership.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
31 December 2022
Financial statements in English are translation from the original in Bulgarian 8
1.2 Summary of significant accounting policies (continued)
c) Taxes (continued)
Deferred income tax (continued)
Deferred taxes relating to items recognized outside profit and loss are recognized out of profit and loss. Deferred
taxes are recognized depending on the transaction they relate to in other comprehensive income, or directly in
equity.
Deferred income tax assets and deferred income tax liabilities are offset, if a legally enforceable right exists to
set off current tax assets against current income tax liabilities and the deferred income taxes relate to the same
taxable entity and the same taxation authority. As of reporting date – offsetting is applied by Company.
Value added tax (VAT)
Revenue, expenses and assets are recognised net of VAT except:
when the VAT incurred on a purchase of assets or services is not recoverable from the taxation authority, in
which case the VAT is recognised as part of the cost of acquisition of the asset or as part of the expense item as
applicable; and
receivables and payables that are stated with the amount of VAT included.
The net amount of VAT recoverable from, or payable to, the taxation authority is included as part of receivables
or payables in the statement of financial position.
d) Financial instruments
(d.1.) Investments and other financial assets
Debt instruments
(i) Classification
The Company classifies its financial assets depending on the business model used to manage these assets and the
specifics of their contractual cash flows as follows:
those to be measured subsequently at fair value through profit or loss;
those to be measured subsequently at fair value through OCI, and
those to be measured at amortised cost.
For assets measured at fair value, gains and losses will either be recorded in profit or loss or other
comprehensive income. For investments in equity instruments that are not held for trading, this will depend on
whether the Company has made an irrevocable election at the time of initial recognition to account for the equity
investment at fair value through other comprehensive income. The Company reclassifies debt investments when
and only when its business model for managing those assets changes.
(ii) Recognition and derecognition
Regular way purchases and sales of financial assets are recognised on trade-date, the date on which the Company
commits to purchase or sell the asset. Financial assets are derecognised when the rights to receive cash flows
from the financial assets have expired or have been transferred and the Company has transferred substantially all
the risks and rewards of ownership.
KORADO-BULGARIA AD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
31 December 2022
Financial statements in English are translation from the original in Bulgarian 9
1.2 Summary of significant accounting policies (continued)
d) Financial instruments (continued)
(d.1.) Investments and other financial assets (continued)
Debt instruments (continued)
(iii) Measurement
At initial recognition, the Company measures a financial asset at its fair value reduced by the costs directly
related to the transaction for the acquisition of the financial asset, except the case of a financial asset not at fair
value through profit or loss, transaction costs that are directly attributable to the acquisition of the financial asset.
Transaction costs of financial assets carried at fair value through profit and loss are recognised in profit or loss.
At initial recognition, the Company measures trade receivables at their transaction price, as defined in IFRS 15,
as based on standard contract terms applied to them, these do not contain a significant financing component.
Financial assets with embedded derivatives are considered in their entirety when determining whether their cash
flows are solely payment of principal and interest.
Subsequent measurement of debt instruments depends on the Company's business model for managing the asset
and the cash flow characteristics of the asset. There are three measurement categories into which the Company
classifies its debt instruments:
Amortised cost: Assets that are held for collection of contractual cash flows where those cash flows
represent solely payments of principal and interest are measured at amortised cost. As the below are immaterial,
the following presentation is applied: Interest income from these financial assets is included in finance income
using the effective interest rate method. Any gain or loss arising on derecognition is recognised directly in profit
or loss and presented in other gains/(Losses) together with foreign exchange gains and losses. Impairment losses
are presented in other expenses.
Assets that are held for collection of contractual cash flows and for selling the financial assets, where the
assets' cash flows represent solely payments of principal and interest, are measured at fair value at other
comprehensive income. Movements in the carrying amount are taken through other comprehensive income,
except for the recognition of impairment gains or losses, interest income and foreign exchange gains and losses
which are recognised in profit or loss. When the financial asset is derecognised, the cumulative gain or loss
previously recognised in other comprehensive income is reclassified from equity to profit or loss and recognised
in other gains/(losses). Interest income from these financial assets is included in finance income using the
effective interest rate method. Foreign exchange gains and losses are presented in other gains/(losses) and
impairment expenses are presented as separate line item in the statement of comprehensive income.
Assets that do not meet the criteria for amortised cost or fair value in other comprehensive income are
measured at fair value in profit and loss. A gain or loss on a debt investment that is subsequently measured at
FVPL is recognised in profit or loss and presented net within other gains/(losses) in the period in which it arises.
Equity instruments
The Company subsequently measures all equity investments at fair value. Where the Company's management
has elected to present fair value gains and losses on equity investments in other comprehensive income, there is
no subsequent reclassification of fair value gains and losses to profit or loss following the derecognition of the
investment. Dividends from such investments continue to be recognised in profit or loss as other income when
the Company’s right to receive payments is established.
Changes in the fair value of financial assets at fair value in profit and loss are recognised in other gains/(losses)
in the statement of comprehensive income as applicable.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
31 December 2022
Financial statements in English are translation from the original in Bulgarian 9
1.2 Summary of significant accounting policies (continued)
d) Financial instruments (continued)
(d.1.) Investments and other financial assets (continued)
Debt instruments (continued)
(iii) Measurement
At initial recognition, the Company measures a financial asset at its fair value reduced by the costs directly
related to the transaction for the acquisition of the financial asset, except the case of a financial asset not at fair
value through profit or loss, transaction costs that are directly attributable to the acquisition of the financial asset.
Transaction costs of financial assets carried at fair value through profit and loss are recognised in profit or loss.
At initial recognition, the Company measures trade receivables at their transaction price, as defined in IFRS 15,
as based on standard contract terms applied to them, these do not contain a significant financing component.
Financial assets with embedded derivatives are considered in their entirety when determining whether their cash
flows are solely payment of principal and interest.
Subsequent measurement of debt instruments depends on the Company's business model for managing the asset
and the cash flow characteristics of the asset. There are three measurement categories into which the Company
classifies its debt instruments:
Amortised cost: Assets that are held for collection of contractual cash flows where those cash flows
represent solely payments of principal and interest are measured at amortised cost. As the below are immaterial,
the following presentation is applied: Interest income from these financial assets is included in finance income
using the effective interest rate method. Any gain or loss arising on derecognition is recognised directly in profit
or loss and presented in other gains/(Losses) together with foreign exchange gains and losses. Impairment losses
are presented in other expenses.
Assets that are held for collection of contractual cash flows and for selling the financial assets, where the
assets' cash flows represent solely payments of principal and interest, are measured at fair value at other
comprehensive income. Movements in the carrying amount are taken through other comprehensive income,
except for the recognition of impairment gains or losses, interest income and foreign exchange gains and losses
which are recognised in profit or loss. When the financial asset is derecognised, the cumulative gain or loss
previously recognised in other comprehensive income is reclassified from equity to profit or loss and recognised
in other gains/(losses). Interest income from these financial assets is included in finance income using the
effective interest rate method. Foreign exchange gains and losses are presented in other gains/(losses) and
impairment expenses are presented as separate line item in the statement of comprehensive income.
Assets that do not meet the criteria for amortised cost or fair value in other comprehensive income are
measured at fair value in profit and loss. A gain or loss on a debt investment that is subsequently measured at
FVPL is recognised in profit or loss and presented net within other gains/(losses) in the period in which it arises.
Equity instruments
The Company subsequently measures all equity investments at fair value. Where the Company's management
has elected to present fair value gains and losses on equity investments in other comprehensive income, there is
no subsequent reclassification of fair value gains and losses to profit or loss following the derecognition of the
investment. Dividends from such investments continue to be recognised in profit or loss as other income when
the Company’s right to receive payments is established.
Changes in the fair value of financial assets at fair value in profit and loss are recognised in other gains/(losses)
in the statement of comprehensive income as applicable.
KORADO-BULGARIA AD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
31 December 2022
Financial statements in English are translation from the original in Bulgarian 10
1.2 Summary of significant accounting policies (continued)
d) Financial instruments (continued)
(d.1.) Investments and other financial assets (continued)
Debt instruments (continued)
(iv)Impairment
The Company assesses on a forward looking basis the expected credit losses associated with its debt instruments
carried at amortised cost and fair value in other comprehensive income. The impairment methodology applied
depends on whether there has been a significant increase in credit risk.
For trade receivables, the Company applies the simplified approach permitted by IFRS 9, which requires
expected lifetime losses to be recognised from initial recognition of the receivables
(d.2.) Financial liabilities
Initial recognition and measurement
Financial liabilities are classified as financial liabilities subsequently measured at fair value through profit or
loss, or at amortized cost such as loans and borrowings. The Company determines the classification of its
financial liabilities at initial recognition.
Financial liabilities are recognised initially at fair value and in the case of loans and borrowings, plus the
transaction costs directly related to the acquisition of the financial liability.
The Company’s financial liabilities include trade and other payables, and interest-bearing borrowings and lease
liabilities.
Subsequent measurement
The measurement of financial liabilities depends on their classification as follows:
Loans and borrowings
Subsequent to initial recognition, loans and borrowings are measured at amortised cost using the EIR method.
Gains and losses are recognised in the profit and loss when the liabilities are derecognised as well as through the
amortisation process.
Amortised cost is calculated by taking into account any discounts or premiums on acquisition and fees or costs
that are an integral part of the EIR. The EIR amortisation is included in finance cost in the profit and loss.
Derecognition
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires.
When an existing financial liability is replaced by another from the same lender on substantially different terms,
or the terms of an existing liability are substantially modified (NPV changes by more than 10%), such an
exchange or modification is treated as a derecognition of the original liability and the recognition of a new
liability, and the difference in the respective carrying amounts is recognised in the profit and loss.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
31 December 2022
Financial statements in English are translation from the original in Bulgarian 10
1.2 Summary of significant accounting policies (continued)
d) Financial instruments (continued)
(d.1.) Investments and other financial assets (continued)
Debt instruments (continued)
(iv)Impairment
The Company assesses on a forward looking basis the expected credit losses associated with its debt instruments
carried at amortised cost and fair value in other comprehensive income. The impairment methodology applied
depends on whether there has been a significant increase in credit risk.
For trade receivables, the Company applies the simplified approach permitted by IFRS 9, which requires
expected lifetime losses to be recognised from initial recognition of the receivables
(d.2.) Financial liabilities
Initial recognition and measurement
Financial liabilities are classified as financial liabilities subsequently measured at fair value through profit or
loss, or at amortized cost such as loans and borrowings. The Company determines the classification of its
financial liabilities at initial recognition.
Financial liabilities are recognised initially at fair value and in the case of loans and borrowings, plus the
transaction costs directly related to the acquisition of the financial liability.
The Company’s financial liabilities include trade and other payables, and interest-bearing borrowings and lease
liabilities.
Subsequent measurement
The measurement of financial liabilities depends on their classification as follows:
Loans and borrowings
Subsequent to initial recognition, loans and borrowings are measured at amortised cost using the EIR method.
Gains and losses are recognised in the profit and loss when the liabilities are derecognised as well as through the
amortisation process.
Amortised cost is calculated by taking into account any discounts or premiums on acquisition and fees or costs
that are an integral part of the EIR. The EIR amortisation is included in finance cost in the profit and loss.
Derecognition
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires.
When an existing financial liability is replaced by another from the same lender on substantially different terms,
or the terms of an existing liability are substantially modified (NPV changes by more than 10%), such an
exchange or modification is treated as a derecognition of the original liability and the recognition of a new
liability, and the difference in the respective carrying amounts is recognised in the profit and loss.
KORADO-BULGARIA AD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
31 December 2022
Financial statements in English are translation from the original in Bulgarian 11
1.2 Summary of significant accounting policies (continued)
e) Offsetting of financial instruments
Financial assets and liabilities are offset and the net amount reported in the statement of financial position only
when there is a legally enforceable right to offset the recognised amounts, and there is an intention to either settle
on a net basis, or to realise the asset and settle the liability simultaneously. Such a right of set off (a) must not be
contingent on a future event and (b) must be legally enforceable in all of the following circumstances: (i) in the
normal course of business, (ii) in the event of default and (iii) in the event of insolvency or bankruptcy.
(f) Fair value measurement
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date. The fair value measurement is based on the
presumption that the transaction to sell the asset or transfer the liability takes place either:
In the principal market for the asset or liability, or
In the absence of a principal market, in the most advantageous market for the asset or liability.
The principal or the most advantageous market must be accessible to by the Company.
The fair value of an asset or a liability is measured using the assumptions that market participants would use
when pricing the asset or liability, assuming that market participants act in their economic best interest. A fair
value measurement of a non-financial asset takes into account a market participant's ability to generate economic
benefits by using the asset in its highest and best use or by selling it to another market participant that would use
the asset in its highest and best use.
The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data
are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of
unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised
within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair
value measurement as a whole:
Level 1 — Quoted (unadjusted) market prices in active markets for identical assets or liabilities
Level 2 — Valuation techniques for which the lowest level input that is significant to the fair value
measurement is directly or indirectly observable
Level 3 — Valuation techniques for which the lowest level input that is significant to the fair value
measurement is unobservable
For assets and liabilities that are measured at fair value in the financial statements on a recurring basis, the
Company determines whether transfer(s) have occurred between Levels in the hierarchy by re-assessing
categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the
end of each reporting period.
As of 31 December 2022 and 31 December 2021 all financial instruments are measured at amortized cost. The
carrying amounts of the short term trade receivables and trade payables approximate their fair value. The fair
value is classified at level 2 and it is determined based on the discounted cash flows (the discount rate reflects
the current market interest rate for the similar instruments). The fair value of borrowings is estimated via
discounting technique based on Bulgarian National Bank statics for similar types of financing lent by
commercial banks to companies– respectively, classified as level 2. The Company has no financial instruments
at fair value.
g) Share capital
The share capital is presented at the par value of shares issued (or subscribed) and paid. Any proceeds from
shares issued over their nominal value are stated as share premiums.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
31 December 2022
Financial statements in English are translation from the original in Bulgarian 11
1.2 Summary of significant accounting policies (continued)
e) Offsetting of financial instruments
Financial assets and liabilities are offset and the net amount reported in the statement of financial position only
when there is a legally enforceable right to offset the recognised amounts, and there is an intention to either settle
on a net basis, or to realise the asset and settle the liability simultaneously. Such a right of set off (a) must not be
contingent on a future event and (b) must be legally enforceable in all of the following circumstances: (i) in the
normal course of business, (ii) in the event of default and (iii) in the event of insolvency or bankruptcy.
(f) Fair value measurement
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date. The fair value measurement is based on the
presumption that the transaction to sell the asset or transfer the liability takes place either:
In the principal market for the asset or liability, or
In the absence of a principal market, in the most advantageous market for the asset or liability.
The principal or the most advantageous market must be accessible to by the Company.
The fair value of an asset or a liability is measured using the assumptions that market participants would use
when pricing the asset or liability, assuming that market participants act in their economic best interest. A fair
value measurement of a non-financial asset takes into account a market participant's ability to generate economic
benefits by using the asset in its highest and best use or by selling it to another market participant that would use
the asset in its highest and best use.
The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data
are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of
unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised
within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair
value measurement as a whole:
Level 1 — Quoted (unadjusted) market prices in active markets for identical assets or liabilities
Level 2 — Valuation techniques for which the lowest level input that is significant to the fair value
measurement is directly or indirectly observable
Level 3 — Valuation techniques for which the lowest level input that is significant to the fair value
measurement is unobservable
For assets and liabilities that are measured at fair value in the financial statements on a recurring basis, the
Company determines whether transfer(s) have occurred between Levels in the hierarchy by re-assessing
categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the
end of each reporting period.
As of 31 December 2022 and 31 December 2021 all financial instruments are measured at amortized cost. The
carrying amounts of the short term trade receivables and trade payables approximate their fair value. The fair
value is classified at level 2 and it is determined based on the discounted cash flows (the discount rate reflects
the current market interest rate for the similar instruments). The fair value of borrowings is estimated via
discounting technique based on Bulgarian National Bank statics for similar types of financing lent by
commercial banks to companies– respectively, classified as level 2. The Company has no financial instruments
at fair value.
g) Share capital
The share capital is presented at the par value of shares issued (or subscribed) and paid. Any proceeds from
shares issued over their nominal value are stated as share premiums.
KORADO-BULGARIA AD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
31 December 2022
Financial statements in English are translation from the original in Bulgarian 12
1.2 Summary of significant accounting policies (continued)
(h) Property, plant and equipment
Property, plant and equipment are stated at cost, net of accumulated depreciation and accumulated impairment
losses. Cost comprises all expenses directly related to the acquisition of the asset. Such cost includes also the
cost of replacing parts of the plant and equipment and borrowing costs for long-term construction projects if the
recognition criteria are met. When a major inspection of an item of plant and/or equipment is performed, its cost
is recognised in the carrying amount of the respective assets as a replacement if the recognition criteria are
satisfied. All other repair and maintenance costs are recognised in the profit and loss for the period in which they
were incurred.
Depreciation is calculated on a straight-line basis over the estimated useful life of the assets, determined for the
current and previous period as follows:
2022 2021
Buildings 10-50 years 10-50 years
Plant and equipment 3-30 years 3-30 years
Hardware 4-7 years 4-7 years
Motor vehicles 7-15 years 7-15 years
Fixtures and fittings 5-10 years 5-10 years
An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are
expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the
difference between the net disposal proceeds and the carrying amount of the asset) is included in the statement of
comprehensive income for the period in which the asset is derecognised. The assets residual values, useful lives
and methods of depreciation are reviewed at each financial year end, and if the expectations differ from the
estimates, the latter are adjusted prospectively.
i) Lease - the Company as a lessee
Leases are recognized as a right-of-use asset and a corresponding liability at the date at which the leased asset is
available for use by the Company. Each lease payment is allocated between the liability and finance cost. The
finance cost is charged to profit or loss over the lease period so as to produce a constant periodic rate of interest
on the remaining balance of the liability for each period. The right-of-use asset is depreciated over the shorter of
the asset's useful life and the lease term on a straight-line basis.
The right-of-use asset is presented separately in the statement of financial position.
Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include
the net present value of the following lease payments:
fixed payments (including in-substance fixed payments), less any lease incentives receivable
variable lease payment that are based on an index or a rate
amounts expected to be payable by the lessee under residual value guarantees
the exercise price of a purchase option if the lessee is reasonably certain to exercise that option, and
payments of penalties for terminating the lease, if the lease term reflects the lessee exercising that
option.
The lease payments are discounted using the interest rate implicit in the lease if that rate can be determined. If
that rate cannot be determined, the lessee’s incremental borrowing rate is used, being the rate that the lessee
would have to pay to borrow the funds necessary to obtain an asset of similar value in a similar economic
environment with similar terms and conditions.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
31 December 2022
Financial statements in English are translation from the original in Bulgarian 12
1.2 Summary of significant accounting policies (continued)
(h) Property, plant and equipment
Property, plant and equipment are stated at cost, net of accumulated depreciation and accumulated impairment
losses. Cost comprises all expenses directly related to the acquisition of the asset. Such cost includes also the
cost of replacing parts of the plant and equipment and borrowing costs for long-term construction projects if the
recognition criteria are met. When a major inspection of an item of plant and/or equipment is performed, its cost
is recognised in the carrying amount of the respective assets as a replacement if the recognition criteria are
satisfied. All other repair and maintenance costs are recognised in the profit and loss for the period in which they
were incurred.
Depreciation is calculated on a straight-line basis over the estimated useful life of the assets, determined for the
current and previous period as follows:
2022 2021
Buildings 10-50 years 10-50 years
Plant and equipment 3-30 years 3-30 years
Hardware 4-7 years 4-7 years
Motor vehicles 7-15 years 7-15 years
Fixtures and fittings 5-10 years 5-10 years
An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are
expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the
difference between the net disposal proceeds and the carrying amount of the asset) is included in the statement of
comprehensive income for the period in which the asset is derecognised. The assets residual values, useful lives
and methods of depreciation are reviewed at each financial year end, and if the expectations differ from the
estimates, the latter are adjusted prospectively.
i) Lease - the Company as a lessee
Leases are recognized as a right-of-use asset and a corresponding liability at the date at which the leased asset is
available for use by the Company. Each lease payment is allocated between the liability and finance cost. The
finance cost is charged to profit or loss over the lease period so as to produce a constant periodic rate of interest
on the remaining balance of the liability for each period. The right-of-use asset is depreciated over the shorter of
the asset's useful life and the lease term on a straight-line basis.
The right-of-use asset is presented separately in the statement of financial position.
Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include
the net present value of the following lease payments:
fixed payments (including in-substance fixed payments), less any lease incentives receivable
variable lease payment that are based on an index or a rate
amounts expected to be payable by the lessee under residual value guarantees
the exercise price of a purchase option if the lessee is reasonably certain to exercise that option, and
payments of penalties for terminating the lease, if the lease term reflects the lessee exercising that
option.
The lease payments are discounted using the interest rate implicit in the lease if that rate can be determined. If
that rate cannot be determined, the lessee’s incremental borrowing rate is used, being the rate that the lessee
would have to pay to borrow the funds necessary to obtain an asset of similar value in a similar economic
environment with similar terms and conditions.
KORADO-BULGARIA AD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
31 December 2022
Financial statements in English are translation from the original in Bulgarian 13
1.2 Summary of significant accounting policies (continued)
i) Lease - the Company as a lessee (continued)
Lease liabilities are subsequently measured using the effective interest method. The carrying amount of liability
is remeasured to reflect any reassessment, lease modification or revised in-substance fixed payments.
The lease term is a non-cancellable period of a lease; periods covered by options to extend and terminate the
lease are only included in the lease term if it is reasonably certain that the lease will be extended or not
terminated.
Right-of-use assets are measured initially at cost comprising the following:
the amount of the initial measurement of lease liability
any lease payments made at or before the commencement date less any lease incentives received
any initial direct costs, and
restoration costs.
Subsequently, the right-of-use assets, are measured at cost less accumulated depreciation and any accumulated
impairment losses and adjusted for remeasurement of the lease liability due to reassessment or lease
modifications.
If the lease transfers ownership of the underlying asset to the lessee by the end of the lease term or if the cost of
the right-of-use asset reflects that the lessee will exercise a purchase option, the lessee shall depreciate the right-
of-use asset from the commencement date to the end of the useful life of the underlying asset. Otherwise, the
lessee shall depreciate the right-of-use asset from the commencement date to the earlier of the end of the useful
life of the right-of-use asset or the end of the lease term.
The depreciation periods for the right-of-use assets, depreciated using the straight-line method are as follows:
right of use for vehicles 7-15 years
Payments associated with short-term leases and leases of low-value assets are recognized on a straight-line basis
as an expense in profit or loss. The Company applies the exemption for low-value assets on a lease-by-lease
basis i.e. for the leases where the asset is sub-leased, a right-of-use asset is recognised with corresponding lease
liability; for all other leases of low value asset, the lease payments associated with those leases will be
recognised as an expense on a straight-line basis over the lease term. Short-term leases are leases with a lease
term of 12 months or less. Low-value assets comprise IT-equipment and small items of office furniture.
The Company’s lease activity
The Company has lease agreements for vehicles. The lease agreements are concluded on an individual basis and
contain a wide range of different conditions. The lease agreements do not contain covenants, but lease assets
cannot be used as collateral for borrowings.
j) Borrowings costs
Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily
take a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the
respective assets. All other borrowing costs are expensed in the period in which they occur. Borrowing costs
consist of interest and other costs that the Company incurs in connection with the borrowing of funds.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
31 December 2022
Financial statements in English are translation from the original in Bulgarian 13
1.2 Summary of significant accounting policies (continued)
i) Lease - the Company as a lessee (continued)
Lease liabilities are subsequently measured using the effective interest method. The carrying amount of liability
is remeasured to reflect any reassessment, lease modification or revised in-substance fixed payments.
The lease term is a non-cancellable period of a lease; periods covered by options to extend and terminate the
lease are only included in the lease term if it is reasonably certain that the lease will be extended or not
terminated.
Right-of-use assets are measured initially at cost comprising the following:
the amount of the initial measurement of lease liability
any lease payments made at or before the commencement date less any lease incentives received
any initial direct costs, and
restoration costs.
Subsequently, the right-of-use assets, are measured at cost less accumulated depreciation and any accumulated
impairment losses and adjusted for remeasurement of the lease liability due to reassessment or lease
modifications.
If the lease transfers ownership of the underlying asset to the lessee by the end of the lease term or if the cost of
the right-of-use asset reflects that the lessee will exercise a purchase option, the lessee shall depreciate the right-
of-use asset from the commencement date to the end of the useful life of the underlying asset. Otherwise, the
lessee shall depreciate the right-of-use asset from the commencement date to the earlier of the end of the useful
life of the right-of-use asset or the end of the lease term.
The depreciation periods for the right-of-use assets, depreciated using the straight-line method are as follows:
right of use for vehicles 7-15 years
Payments associated with short-term leases and leases of low-value assets are recognized on a straight-line basis
as an expense in profit or loss. The Company applies the exemption for low-value assets on a lease-by-lease
basis i.e. for the leases where the asset is sub-leased, a right-of-use asset is recognised with corresponding lease
liability; for all other leases of low value asset, the lease payments associated with those leases will be
recognised as an expense on a straight-line basis over the lease term. Short-term leases are leases with a lease
term of 12 months or less. Low-value assets comprise IT-equipment and small items of office furniture.
The Company’s lease activity
The Company has lease agreements for vehicles. The lease agreements are concluded on an individual basis and
contain a wide range of different conditions. The lease agreements do not contain covenants, but lease assets
cannot be used as collateral for borrowings.
j) Borrowings costs
Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily
take a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the
respective assets. All other borrowing costs are expensed in the period in which they occur. Borrowing costs
consist of interest and other costs that the Company incurs in connection with the borrowing of funds.
KORADO-BULGARIA AD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
31 December 2022
Financial statements in English are translation from the original in Bulgarian 14
5.2 Summary of significant accounting policies (continued)
k) Earnings per share
Basic earnings per share are calculated by dividing the net profit or loss for the period, subject to distribution
among the shareholders, to the weighted average number of ordinary shares held for the period. The weighted
average number of shares is the number of ordinary shares held in the beginning of the period, adjusted by the
number of redeemed ordinary shares and the shares newly issued over the period, multiplied by the time-
weighting factor. This factor is the number of days that the shares are outstanding as a proportion of the total
number of days in the period. In case of capitalization of reserves, bonus issues, etc., which do not result in
change in the Company’s resources, the number of the ordinary shares before the transaction is adjusted
proportionately to their change as if the transaction has been carried out at the earliest period presented. As a
result, the number of ordinary shares is recalculated and respectively, the earnings per share for the comparative
period.
L) Intangible assets
Intangible assets are measured on initial recognition at cost. Following initial recognition, intangible assets are
carried at cost less any accumulated amortisation and/ or any accumulated impairment losses, if any.
The useful lives of intangible assets are assessed to be finite, and are estimated as follows:
2022 2021
Licenses 5-10years 5-10years
Software 5-10years 5-10years
Intangible assets with finite lives are amortised over the useful economic life applying straight-line amortization
method and assessed for impairment whenever there is an indication that the intangible asset may be impaired.
The amortisation period and the amortisation method for an intangible asset with a finite useful life are reviewed
at least at each financial year end. Changes in the expected useful life or the expected pattern of consumption of
future economic benefits embodied in the asset is accounted for by changing the amortisation period or method,
as appropriate, and treated as changes in accounting estimates. Gains or losses arising from derecognition of an
intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the
asset and are recognised in profits and losses when the asset is derecognised.
M) Inventories
Inventories are measured at the lower of cost and net realisable value.
Costs incurred in bringing each item of inventory to its present location and condition, are accounted for as
follows:
Materials and goods
– acquisition cost determined under the weighted average value
method
Finished products and work in progress – Cost of direct materials used, labour and overheads allocated
based on the normal production capacity, excluding borrowing
costs, determined under the weighted average value method
m) Inventories (continued)
Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of
completion and the estimated costs necessary to make the sale.
n) Impairment of non-financial assets
The Company assesses at each reporting date whether there are indications that an asset may be impaired. If any
such indication exists, or when annual impairment testing for an asset is required, the Company makes an
estimate of the asset’s recoverable amount. An asset’s recoverable amount is the higher of an asset’s or cash-
generating unit’s (CGU) fair value less costs to sell and its value in use. It is determined for an individual asset,
unless the asset does not generate cash inflows that are largely independent of those from other assets or groups
of assets.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
31 December 2022
Financial statements in English are translation from the original in Bulgarian 14
5.2 Summary of significant accounting policies (continued)
k) Earnings per share
Basic earnings per share are calculated by dividing the net profit or loss for the period, subject to distribution
among the shareholders, to the weighted average number of ordinary shares held for the period. The weighted
average number of shares is the number of ordinary shares held in the beginning of the period, adjusted by the
number of redeemed ordinary shares and the shares newly issued over the period, multiplied by the time-
weighting factor. This factor is the number of days that the shares are outstanding as a proportion of the total
number of days in the period. In case of capitalization of reserves, bonus issues, etc., which do not result in
change in the Company’s resources, the number of the ordinary shares before the transaction is adjusted
proportionately to their change as if the transaction has been carried out at the earliest period presented. As a
result, the number of ordinary shares is recalculated and respectively, the earnings per share for the comparative
period.
L) Intangible assets
Intangible assets are measured on initial recognition at cost. Following initial recognition, intangible assets are
carried at cost less any accumulated amortisation and/ or any accumulated impairment losses, if any.
The useful lives of intangible assets are assessed to be finite, and are estimated as follows:
2022 2021
Licenses 5-10years 5-10years
Software 5-10years 5-10years
Intangible assets with finite lives are amortised over the useful economic life applying straight-line amortization
method and assessed for impairment whenever there is an indication that the intangible asset may be impaired.
The amortisation period and the amortisation method for an intangible asset with a finite useful life are reviewed
at least at each financial year end. Changes in the expected useful life or the expected pattern of consumption of
future economic benefits embodied in the asset is accounted for by changing the amortisation period or method,
as appropriate, and treated as changes in accounting estimates. Gains or losses arising from derecognition of an
intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the
asset and are recognised in profits and losses when the asset is derecognised.
M) Inventories
Inventories are measured at the lower of cost and net realisable value.
Costs incurred in bringing each item of inventory to its present location and condition, are accounted for as
follows:
Materials and goods
– acquisition cost determined under the weighted average value
method
Finished products and work in progress – Cost of direct materials used, labour and overheads allocated
based on the normal production capacity, excluding borrowing
costs, determined under the weighted average value method
m) Inventories (continued)
Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of
completion and the estimated costs necessary to make the sale.
n) Impairment of non-financial assets
The Company assesses at each reporting date whether there are indications that an asset may be impaired. If any
such indication exists, or when annual impairment testing for an asset is required, the Company makes an
estimate of the asset’s recoverable amount. An asset’s recoverable amount is the higher of an asset’s or cash-
generating unit’s (CGU) fair value less costs to sell and its value in use. It is determined for an individual asset,
unless the asset does not generate cash inflows that are largely independent of those from other assets or groups
of assets.
KORADO-BULGARIA AD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
31 December 2022
Financial statements in English are translation from the original in Bulgarian 15
n.2 Summary of significant accounting policies (continued)
n) Impairment of non-financial assets (continued)
Where the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired
and is written down to its recoverable amount.
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. In determining fair value less costs of disposal, recent market transactions, if any, are taken into account. If
no such transactions can be identified, an appropriate valuation model is used. These calculations are
corroborated by valuation multiple and other available sources of fair values of assets or CGUs.
The Company bases its impairment calculation on detailed budgets and forecast calculations which are prepared
separately for each of the Company’s cas h-generating units to which individual assets are allocated. These
budgets and forecast calculations generally cover a period of five years. For longer periods, a long-term growth
index is calculates and applied to future cash flows after the fifth year.
Impairment losses are recognized as other expenses in the statement of comprehensive income.
An assessment is made by the Company at each reporting date whether there is any indication that previously
recognised impairment losses may no longer exist or may have decreased. If such indication exists, the Company
estimates the asset’s or CGU’s recoverable amount. A previously recognised impairment loss is reversed only if
there has been a change in the assumptions used to determine the asset’s recoverable amount since the last
impairment loss was recognised. The reversal is limited so that the carrying amount of the asset does not exceed
its recoverable amount, nor exceed the carrying amount that would have been determined (net of depreciation)
had no impairment loss been recognised for the asset in prior years. Such reversal is recognised in profits and
losses.
о) Cash and cash equivalents
Cash and short term deposits in the statement of financial position comprise cash in bank accounts and in hand,
and short-term deposits with an original maturity of three months or less. For the purpose of the cash flow
statement, cash and cash equivalents consist of cash and cash equivalents as defined above.
p) Employee benefits
Short term benefits
Short-term employee benefits include salaries, wages, interim and annual bonuses, social security contributions
and paid annual leave of current employees expected to be settled wholly within twelve months after the end of
the reporting period. When the Company receives the service, they are recognised as an employee benefit
expense in profit or loss or a capitalised to the asset’s value. Short-term employee benefits are measured at the
undiscounted amount of the expected cost of benefits. See Note 3.3. for further details.
Retirement benefits
The Company operates a defined benefit plan arising from the requirement of the Bulgarian labour legislation
and the Collective Labour Agreement to pay a certain number of gross monthly salaries to its employees upon
retirement, depending on the length of their service. If an employee has worked for KORADO-Bulgaria AD for
10 years, the retirement benefit amounts to six gross monthly salaries upon retirement, if he/she has worked for
the Company from 5 to 10 years – four gross monthly salaries, and if he/she has worked for less than five years -
two gross monthly salaries. Besides, of an employee has worked for KORADO-Bulgaria AD for more than
twenty years, he/she received eight gross monthly salaries upon retirement. These retirement benefits are
unfunded. The cost of providing benefits under the retirement benefit plan is determined by the Company using
the projected unit credit method. Re-measurements, comprising of actuarial gains and losses, are recognised
immediately in the statement of financial position with a corresponding debit or credit to the reserve from
actuarial valuations through other comprehensive income in the period in which they occur.
Re-measurements are not reclassified to profit or loss in subsequent periods.
Interest expense is calculated by applying the discount rate to the defined benefit liability. The Company
recognises the following changes in the defined benefit obligation in profit or loss for the period:
interest expense;
current and past-service costs.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
31 December 2022
Financial statements in English are translation from the original in Bulgarian 15
n.2 Summary of significant accounting policies (continued)
n) Impairment of non-financial assets (continued)
Where the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired
and is written down to its recoverable amount.
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. In determining fair value less costs of disposal, recent market transactions, if any, are taken into account. If
no such transactions can be identified, an appropriate valuation model is used. These calculations are
corroborated by valuation multiple and other available sources of fair values of assets or CGUs.
The Company bases its impairment calculation on detailed budgets and forecast calculations which are prepared
separately for each of the Company’s cas h-generating units to which individual assets are allocated. These
budgets and forecast calculations generally cover a period of five years. For longer periods, a long-term growth
index is calculates and applied to future cash flows after the fifth year.
Impairment losses are recognized as other expenses in the statement of comprehensive income.
An assessment is made by the Company at each reporting date whether there is any indication that previously
recognised impairment losses may no longer exist or may have decreased. If such indication exists, the Company
estimates the asset’s or CGU’s recoverable amount. A previously recognised impairment loss is reversed only if
there has been a change in the assumptions used to determine the asset’s recoverable amount since the last
impairment loss was recognised. The reversal is limited so that the carrying amount of the asset does not exceed
its recoverable amount, nor exceed the carrying amount that would have been determined (net of depreciation)
had no impairment loss been recognised for the asset in prior years. Such reversal is recognised in profits and
losses.
о) Cash and cash equivalents
Cash and short term deposits in the statement of financial position comprise cash in bank accounts and in hand,
and short-term deposits with an original maturity of three months or less. For the purpose of the cash flow
statement, cash and cash equivalents consist of cash and cash equivalents as defined above.
p) Employee benefits
Short term benefits
Short-term employee benefits include salaries, wages, interim and annual bonuses, social security contributions
and paid annual leave of current employees expected to be settled wholly within twelve months after the end of
the reporting period. When the Company receives the service, they are recognised as an employee benefit
expense in profit or loss or a capitalised to the asset’s value. Short-term employee benefits are measured at the
undiscounted amount of the expected cost of benefits. See Note 3.3. for further details.
Retirement benefits
The Company operates a defined benefit plan arising from the requirement of the Bulgarian labour legislation
and the Collective Labour Agreement to pay a certain number of gross monthly salaries to its employees upon
retirement, depending on the length of their service. If an employee has worked for KORADO-Bulgaria AD for
10 years, the retirement benefit amounts to six gross monthly salaries upon retirement, if he/she has worked for
the Company from 5 to 10 years – four gross monthly salaries, and if he/she has worked for less than five years -
two gross monthly salaries. Besides, of an employee has worked for KORADO-Bulgaria AD for more than
twenty years, he/she received eight gross monthly salaries upon retirement. These retirement benefits are
unfunded. The cost of providing benefits under the retirement benefit plan is determined by the Company using
the projected unit credit method. Re-measurements, comprising of actuarial gains and losses, are recognised
immediately in the statement of financial position with a corresponding debit or credit to the reserve from
actuarial valuations through other comprehensive income in the period in which they occur.
Re-measurements are not reclassified to profit or loss in subsequent periods.
Interest expense is calculated by applying the discount rate to the defined benefit liability. The Company
recognises the following changes in the defined benefit obligation in profit or loss for the period:
interest expense;
current and past-service costs.
KORADO-BULGARIA AD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
31 December 2022
Financial statements in English are translation from the original in Bulgarian 16
1.2 Summary of significant accounting policies (continued)
p) Employee benefits (continued)
Share based payment plans
Payments for share based plans to employees are valued at the fair of the equity instrument at the date, when the
shares are provided. Remuneration for conditional share based payment plans, which have not vested is
measured at the he fair value at the grant date of the share based payment reflecting these conditions and having
no difference between the expected and actual results.
q) Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief
operating decision maker.
Management Board assesses the financial performance and position of the Company and makes strategic
decisions. Management Board has been identified as being the chief operating decision maker and consists of the
chief executive officer, chief accountant and financial officer of the Company.
1.3. Changes in accounting standards
Initial application of new amendments to the existing standards effective for the current reporting period
The following amendments to the existing standards issued by the International Accounting Standards Board
(IASB) and adopted by the EU are effective for the current reporting period:
Amendments to IAS 16 “Property, Plant and Equipment” - Proceeds before Intended Use adopted by
the EU on June 28, 2021 (effective for annual periods beginning on or after January 1, 2022);
Amendments to IAS 37 “Provisions, Contingent Liabilities and Contingent Assets” - Onerous
Contracts — Cost of Fulfilling a Contract adopted by the EU on June 28, 2021 (effective for annual
periods beginning on or after January 1, 2022);
Amendments to IFRS 3 “Business Combinations” - Reference to the Conceptual Framework with
amendments to IFRS 3 adopted by the EU on 28 June 2021 (effective for annual periods beginning on or
after January 1, 2022);
Amendments to various standards due to “Improvements to IFRSs (cycle 2018 - 2020)” resulting from
the annual improvement project of IFRS (IFRS 1, IFRS 9, IFRS 16 and IAS 41) primarily with a view to
removing inconsistencies and clarifying wording - adopted by the EU on June 28, 2021 (The amendments to
IFRS 1, IFRS 9 and IAS 41 are effective for annual periods beginning on or after January 1, 2022. The
amendment to IFRS 16 only regards an illustrative example, so no effective date is stated.);
The adoption of amendments to the existing standards has not led to any material changes in the Company’s
financial statements.
Standards and amendments to the existing standards issued by IASB and adopted by the EU but not yet
effective
At the date of authorisation of these financial statements, the following amendments to the existing standards
were issued by IASB and adopted by the EU and which are not yet effective:
IFRS 17 “Insurance Contracts” including amendments to IFRS 17 adopted by the EU on November 19,
2021 (effective for annual periods beginning on or after January 1, 2023);
Amendments to IFRS 17 “Insurance contracts”- Initial Application of IFRS 17 and IFRS 9 –
Comparative Information (effective for annual periods beginning on or after January 1, 2023);
Amendments to IAS 1 Presentation of Financial Statements: Disclosure of Accounting policies adopted
by the EU on March 2, 2022 (effective for annual periods beginning on or after
January 1, 2023);
Amendments to IAS 8 Accounting policies, Changes in Accounting Estimates and Errors: Definition of
Accounting Estimates adopted by the EU on March 2, 2022 (effective for annual periods beginning on or
after January 1, 2023);
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
31 December 2022
Financial statements in English are translation from the original in Bulgarian 16
1.2 Summary of significant accounting policies (continued)
p) Employee benefits (continued)
Share based payment plans
Payments for share based plans to employees are valued at the fair of the equity instrument at the date, when the
shares are provided. Remuneration for conditional share based payment plans, which have not vested is
measured at the he fair value at the grant date of the share based payment reflecting these conditions and having
no difference between the expected and actual results.
q) Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief
operating decision maker.
Management Board assesses the financial performance and position of the Company and makes strategic
decisions. Management Board has been identified as being the chief operating decision maker and consists of the
chief executive officer, chief accountant and financial officer of the Company.
1.3. Changes in accounting standards
Initial application of new amendments to the existing standards effective for the current reporting period
The following amendments to the existing standards issued by the International Accounting Standards Board
(IASB) and adopted by the EU are effective for the current reporting period:
Amendments to IAS 16 “Property, Plant and Equipment” - Proceeds before Intended Use adopted by
the EU on June 28, 2021 (effective for annual periods beginning on or after January 1, 2022);
Amendments to IAS 37 “Provisions, Contingent Liabilities and Contingent Assets” - Onerous
Contracts — Cost of Fulfilling a Contract adopted by the EU on June 28, 2021 (effective for annual
periods beginning on or after January 1, 2022);
Amendments to IFRS 3 “Business Combinations” - Reference to the Conceptual Framework with
amendments to IFRS 3 adopted by the EU on 28 June 2021 (effective for annual periods beginning on or
after January 1, 2022);
Amendments to various standards due to “Improvements to IFRSs (cycle 2018 - 2020)” resulting from
the annual improvement project of IFRS (IFRS 1, IFRS 9, IFRS 16 and IAS 41) primarily with a view to
removing inconsistencies and clarifying wording - adopted by the EU on June 28, 2021 (The amendments to
IFRS 1, IFRS 9 and IAS 41 are effective for annual periods beginning on or after January 1, 2022. The
amendment to IFRS 16 only regards an illustrative example, so no effective date is stated.);
The adoption of amendments to the existing standards has not led to any material changes in the Company’s
financial statements.
Standards and amendments to the existing standards issued by IASB and adopted by the EU but not yet
effective
At the date of authorisation of these financial statements, the following amendments to the existing standards
were issued by IASB and adopted by the EU and which are not yet effective:
IFRS 17 “Insurance Contracts” including amendments to IFRS 17 adopted by the EU on November 19,
2021 (effective for annual periods beginning on or after January 1, 2023);
Amendments to IFRS 17 “Insurance contracts”- Initial Application of IFRS 17 and IFRS 9 –
Comparative Information (effective for annual periods beginning on or after January 1, 2023);
Amendments to IAS 1 Presentation of Financial Statements: Disclosure of Accounting policies adopted
by the EU on March 2, 2022 (effective for annual periods beginning on or after
January 1, 2023);
Amendments to IAS 8 Accounting policies, Changes in Accounting Estimates and Errors: Definition of
Accounting Estimates adopted by the EU on March 2, 2022 (effective for annual periods beginning on or
after January 1, 2023);
KORADO-BULGARIA AD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
31 December 2022
Financial statements in English are translation from the original in Bulgarian 17
1.3. Changes in accounting standards (continued)
Standards and amendments to the existing standards issued by IASB and adopted by the EU but not yet
effective (continued)
Amendments to IAS 12 “Income Taxes” - Deferred Tax related to Assets and Liabilities arising from a
Single Transaction adopted by the EU on 11 August 2022 (effective for annual periods beginning on or
after January 1, 2023).
New standards and amendments to the existing standards issued by IASB but not yet adopted by the EU
At present, IFRS as adopted by the EU do not significantly differ from regulations adopted by IASB except for
the following new standards and amendments to the existing standards, which were not endorsed for use in EU
as at the date of publication of these financial statements(the effective dates stated below is for IFRS as issued by
IASB):
Amendments to IAS 1 Presentation of Financial Statements : Classification of Liabilities as Current or
Non-current (effective for annual periods beginning on or after January 1, 2023);
IFRS 14 “Regulatory Deferral Accounts” (effective for annual periods beginning on or after January 1,
2016) - the European Commission has decided not to launch the endorsement process of this interim
standard and to wait for the final standard;
Amendments to IAS 1 “Presentation of Financial Statements” - Non-current Liabilities with Covenants
(effective for annual periods beginning on or after 1 January 2024);
Amendments to IFRS 16 “Leases” - Lease Liability in a Sale and Leaseback (effective for annual periods
beginning on or after 1 January 2024);
IFRS 14 “Regulatory Deferral Accounts” (effective for annual periods beginning on or after 1 January
2016) - the European Commission has decided not to launch the endorsement process of this interim
standard and to wait for the final standard;
Amendments to IFRS 10 “Consolidated Financial Statements” and IAS 28 “Investments in
Associates and Joint Ventures” - Sale or Contribution of Assets between an Investor and its Associate or
Joint Venture and further amendments (effective date deferred indefinitely until the research project on the
equity method has been concluded).
The Company anticipates that the adoption of these new standards and amendments to the existing standards will
have no material impact on the financial statements of the Company in the period of initial application.
Hedge accounting for a portfolio of financial assets and liabilities whose principles have not been adopted by the
EU remains unregulated.
According to the Company’s estimates, the application of hedge accounting to a portfolio of financial assets or
liabilities pursuant to IAS 39: “Financial Instruments: Recognition and Measurement” would not significantly
impact the financial statements, if applied as at the reporting date.
2. Significant accounting judgments, estimates and assumptions
The preparation of the financial statements requires the management to apply accounting judgements, estimates
and assumptions, which have effect on the amount of reported assets and liabilities, and the disclosure of the
contingent liabilities at the reporting date, as well as on the income and expenses reported for the period.
Uncertainties related to these assumptions and estimates may lead to actual results requiring material
adjustments in the carrying amounts of the respective assets or liabilities in subsequent reporting periods.
The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date,
that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities
within the next reporting period are discussed below.
Net realisable value of inventories
Inventories are written-down in accordance with the accounting policy of KORADO Group based on the
estimated sale / turnover of goods. The related write-downs are presented as other expenses in the statement of
comprehensive income. The Company’s management believes that the carrying amount of goods аs of reporting
date is the best estimate of their net realizable value in compliance with the requirements of IAS 2 Inventories.
Respectively, there were no inventory write offs as at 31 December 2022 and 31 December 2021.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
31 December 2022
Financial statements in English are translation from the original in Bulgarian 17
1.3. Changes in accounting standards (continued)
Standards and amendments to the existing standards issued by IASB and adopted by the EU but not yet
effective (continued)
Amendments to IAS 12 “Income Taxes” - Deferred Tax related to Assets and Liabilities arising from a
Single Transaction adopted by the EU on 11 August 2022 (effective for annual periods beginning on or
after January 1, 2023).
New standards and amendments to the existing standards issued by IASB but not yet adopted by the EU
At present, IFRS as adopted by the EU do not significantly differ from regulations adopted by IASB except for
the following new standards and amendments to the existing standards, which were not endorsed for use in EU
as at the date of publication of these financial statements(the effective dates stated below is for IFRS as issued by
IASB):
Amendments to IAS 1 Presentation of Financial Statements : Classification of Liabilities as Current or
Non-current (effective for annual periods beginning on or after January 1, 2023);
IFRS 14 “Regulatory Deferral Accounts” (effective for annual periods beginning on or after January 1,
2016) - the European Commission has decided not to launch the endorsement process of this interim
standard and to wait for the final standard;
Amendments to IAS 1 “Presentation of Financial Statements” - Non-current Liabilities with Covenants
(effective for annual periods beginning on or after 1 January 2024);
Amendments to IFRS 16 “Leases” - Lease Liability in a Sale and Leaseback (effective for annual periods
beginning on or after 1 January 2024);
IFRS 14 “Regulatory Deferral Accounts” (effective for annual periods beginning on or after 1 January
2016) - the European Commission has decided not to launch the endorsement process of this interim
standard and to wait for the final standard;
Amendments to IFRS 10 “Consolidated Financial Statements” and IAS 28 “Investments in
Associates and Joint Ventures” - Sale or Contribution of Assets between an Investor and its Associate or
Joint Venture and further amendments (effective date deferred indefinitely until the research project on the
equity method has been concluded).
The Company anticipates that the adoption of these new standards and amendments to the existing standards will
have no material impact on the financial statements of the Company in the period of initial application.
Hedge accounting for a portfolio of financial assets and liabilities whose principles have not been adopted by the
EU remains unregulated.
According to the Company’s estimates, the application of hedge accounting to a portfolio of financial assets or
liabilities pursuant to IAS 39: “Financial Instruments: Recognition and Measurement” would not significantly
impact the financial statements, if applied as at the reporting date.
2. Significant accounting judgments, estimates and assumptions
The preparation of the financial statements requires the management to apply accounting judgements, estimates
and assumptions, which have effect on the amount of reported assets and liabilities, and the disclosure of the
contingent liabilities at the reporting date, as well as on the income and expenses reported for the period.
Uncertainties related to these assumptions and estimates may lead to actual results requiring material
adjustments in the carrying amounts of the respective assets or liabilities in subsequent reporting periods.
The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date,
that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities
within the next reporting period are discussed below.
Net realisable value of inventories
Inventories are written-down in accordance with the accounting policy of KORADO Group based on the
estimated sale / turnover of goods. The related write-downs are presented as other expenses in the statement of
comprehensive income. The Company’s management believes that the carrying amount of goods аs of reporting
date is the best estimate of their net realizable value in compliance with the requirements of IAS 2 Inventories.
Respectively, there were no inventory write offs as at 31 December 2022 and 31 December 2021.
KORADO-BULGARIA AD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
31 December 2022
Financial statements in English are translation from the original in Bulgarian 18
2. Significant accounting judgments, estimates and assumptions (continued)
Impairment of receivables
Based on the available information the management has assessed the future cash flows under the receivables
from clients as at December 31, 2022 and has recognized expected credit loss allowance at the amount of BGN
69 thousand (December 31, 2021: BGN 10 thousand). As the amounts of expected credit losses are not material
they are not separately disclosed in the statement of comprehensive income. Additional information is presented
in Note 19.
3. Income and expenses
3.1 Revenue from contracts with customers and segment information
Revenue from clients
а) Geographic information
2022 2021
BGN’000 BGN’000
Bulgaria 916 1,391
Other countries:
Czech Republic 46,924 42,477
Romania 2,041 3,520
Ukraine 1,209 3,797
Hungary 2,182 3,394
Greece 1,439 1,506
France 86 276
Tunisia 138 277
Cyprus 198 84
55,133 56,722
The geographic information on the revenue from sales of products is based on the customers’ location. There are
no differences between the measurements of the reportable segments’ profits or losses - only one segment
identified and the entity’s profit or loss before income tax expense or income from continuing operations.
b) Information by key customers in 2022 and 2021
2022 2021
BGN’000 BGN’000
Customer 1 46,924 42,477
Customer 2 2,182 3,797
Customer 3 2,041 3,520
3.2 Other income
2022 2021
BGN’000 BGN’000
Income from sale of materials 323 2,063
Income from Government 1,921 172
Other 60 99
2,304 2,334
The sale of materials is incidental to the main activities of the Company. The materials were sold to a Bulgarian
company. Respectively, revenue is presented as other income. As other income is presented the income from
government which is a subsidy for electricity prices.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
31 December 2022
Financial statements in English are translation from the original in Bulgarian 18
2. Significant accounting judgments, estimates and assumptions (continued)
Impairment of receivables
Based on the available information the management has assessed the future cash flows under the receivables
from clients as at December 31, 2022 and has recognized expected credit loss allowance at the amount of BGN
69 thousand (December 31, 2021: BGN 10 thousand). As the amounts of expected credit losses are not material
they are not separately disclosed in the statement of comprehensive income. Additional information is presented
in Note 19.
3. Income and expenses
3.1 Revenue from contracts with customers and segment information
Revenue from clients
а) Geographic information
2022 2021
BGN’000 BGN’000
Bulgaria 916 1,391
Other countries:
Czech Republic 46,924 42,477
Romania 2,041 3,520
Ukraine 1,209 3,797
Hungary 2,182 3,394
Greece 1,439 1,506
France 86 276
Tunisia 138 277
Cyprus 198 84
55,133 56,722
The geographic information on the revenue from sales of products is based on the customers’ location. There are
no differences between the measurements of the reportable segments’ profits or losses - only one segment
identified and the entity’s profit or loss before income tax expense or income from continuing operations.
b) Information by key customers in 2022 and 2021
2022 2021
BGN’000 BGN’000
Customer 1 46,924 42,477
Customer 2 2,182 3,797
Customer 3 2,041 3,520
3.2 Other income
2022 2021
BGN’000 BGN’000
Income from sale of materials 323 2,063
Income from Government 1,921 172
Other 60 99
2,304 2,334
The sale of materials is incidental to the main activities of the Company. The materials were sold to a Bulgarian
company. Respectively, revenue is presented as other income. As other income is presented the income from
government which is a subsidy for electricity prices.
KORADO-BULGARIA AD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
31 December 2022
Financial statements in English are translation from the original in Bulgarian 19
3. Income and expenses (continued)
3.3 Employee benefit expense
2022 2021
BGN’000 BGN’000
Salaries (5,453) (5,646)
Social security contributions (974) (1,018)
(6,427) (6,664)
3.4 Expenses for hired services
2022 2021
BGN’000 BGN’000
Management services from related parties (279) (301)
Insurances (254) (256)
Consulting services (143) (132)
Security (238) (223)
Transport costs (154) (196)
Repair and maintenance (117) (119)
Commissions (109) (162)
Advertising (48) (51)
Taxes and charges (73) (74)
Legal services (25) (38)
Telephone charges (48) (45)
Training (2) (1)
Other (257) (95)
(1,747) (1,693)
3.5 Other expenses
2022 2021
BGN’000 BGN’000
Carrying amount of goods sold (656) (883)
Carrying amount of materials sold (283) (2,063)
Business trips (62) (42)
Scrap of assets (21) (33)
Entertainment expenses (9) (7)
Expenses for loss allowances (21) (56)
Impairment of trade receivables (69) (10)
Court fees (19) -
Other (16) (1)
(1,156) (3,095)
3.6 Finance costs
2022 2021
BGN’000 BGN’000
Interest expenses on borrowings and leasing (92) (70)
Expenses on charges and commission fees (23) (20)
FX gains and losses, net (3) (4)
(118) (94)
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
31 December 2022
Financial statements in English are translation from the original in Bulgarian 19
3. Income and expenses (continued)
3.3 Employee benefit expense
2022 2021
BGN’000 BGN’000
Salaries (5,453) (5,646)
Social security contributions (974) (1,018)
(6,427) (6,664)
3.4 Expenses for hired services
2022 2021
BGN’000 BGN’000
Management services from related parties (279) (301)
Insurances (254) (256)
Consulting services (143) (132)
Security (238) (223)
Transport costs (154) (196)
Repair and maintenance (117) (119)
Commissions (109) (162)
Advertising (48) (51)
Taxes and charges (73) (74)
Legal services (25) (38)
Telephone charges (48) (45)
Training (2) (1)
Other (257) (95)
(1,747) (1,693)
3.5 Other expenses
2022 2021
BGN’000 BGN’000
Carrying amount of goods sold (656) (883)
Carrying amount of materials sold (283) (2,063)
Business trips (62) (42)
Scrap of assets (21) (33)
Entertainment expenses (9) (7)
Expenses for loss allowances (21) (56)
Impairment of trade receivables (69) (10)
Court fees (19) -
Other (16) (1)
(1,156) (3,095)
3.6 Finance costs
2022 2021
BGN’000 BGN’000
Interest expenses on borrowings and leasing (92) (70)
Expenses on charges and commission fees (23) (20)
FX gains and losses, net (3) (4)
(118) (94)
KORADO-BULGARIA AD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
31 December 2022
Financial statements in English are translation from the original in Bulgarian 20
4. Income tax
The major components of the income tax expense as 31 December 2022 and 31 December 2021 are:
2022 31.12.2021
BGN’000 BGN’000
Current income tax expense (467) (509)
Deferred tax expense (23) (23)
Income tax expense recognized in profit or loss (490) (532)
Deferred tax on actuarial gains and losses 4 4
Income tax credit recognized in other comprehensive income 4 4
The applicable tax rate in 2022 and 2021 is 10%.
The reconciliation between the income tax expense and the accounting profit at the applicable tax rate as 31
December 2022 and 31 December 2021 is:
2022 2021
BGN’000 BGN’000
Profit before taxes 4,872 5,291
Income tax expense at the applicable tax rate of 10% for 2022 and
2021 (487) (529)
Permanent differences (3) (3)
Income tax expense at an effective tax rate of 10 % (490) (532)
As at 31 December 2022 and 31 December 2021 deferred taxes relate to the following:
Statement of financial position Profit and loss
31.12.2022 31.12.2021 2022 2021
BGN’000 BGN’000 BGN’000 BGN’000
Deferred tax assets
Accelerated depreciation (78) (71) (7) (20)
Unused paid leave 11 26 (16) 2
Remuneration of personnel 1 1 -
Impairment 6 1 6 1
Retirement benefits liability 53 53 (2) (6)
Deferred tax assets, net (7) 11 19 (23)
Reconciliation of deferred taxes, net
2022 2021
BGN’000 BGN’000
At 1 January 11 30
Deferred taxes recognized in profit or loss for the year (22) (23)
Deferred taxes recognized in other comprehensive income 4 4
At 31 December (7) 11
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
31 December 2022
Financial statements in English are translation from the original in Bulgarian 20
4. Income tax
The major components of the income tax expense as 31 December 2022 and 31 December 2021 are:
2022 31.12.2021
BGN’000 BGN’000
Current income tax expense (467) (509)
Deferred tax expense (23) (23)
Income tax expense recognized in profit or loss (490) (532)
Deferred tax on actuarial gains and losses 4 4
Income tax credit recognized in other comprehensive income 4 4
The applicable tax rate in 2022 and 2021 is 10%.
The reconciliation between the income tax expense and the accounting profit at the applicable tax rate as 31
December 2022 and 31 December 2021 is:
2022 2021
BGN’000 BGN’000
Profit before taxes 4,872 5,291
Income tax expense at the applicable tax rate of 10% for 2022 and
2021 (487) (529)
Permanent differences (3) (3)
Income tax expense at an effective tax rate of 10 % (490) (532)
As at 31 December 2022 and 31 December 2021 deferred taxes relate to the following:
Statement of financial position Profit and loss
31.12.2022 31.12.2021 2022 2021
BGN’000 BGN’000 BGN’000 BGN’000
Deferred tax assets
Accelerated depreciation (78) (71) (7) (20)
Unused paid leave 11 26 (16) 2
Remuneration of personnel 1 1 -
Impairment 6 1 6 1
Retirement benefits liability 53 53 (2) (6)
Deferred tax assets, net (7) 11 19 (23)
Reconciliation of deferred taxes, net
2022 2021
BGN’000 BGN’000
At 1 January 11 30
Deferred taxes recognized in profit or loss for the year (22) (23)
Deferred taxes recognized in other comprehensive income 4 4
At 31 December (7) 11
KORADO-BULGARIA AD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
At 31 December 2022
Financial statements in English are translation from the original in Bulgarian 21
5. Earnings per share
Basic earnings per share are calculated by dividing the profit for the period to the weighted average number of
ordinary shares held for the period. The Company’s basic earnings per share are calculated by using the
following data:
31.12.2022 31.12.2021
BGN’000 BGN’000
Net profit for the year (in BGN’000) 4,382 4,759
Weighted average number of ordinary shares held for the year (in thousand) 13,169 13,169
Basic earnings per share (in BGN) 0,33 0,36
6. Property, plant and equipment
Land
(terrains)
Buildings,
installations
and
outdoor
equipment
Plant,
equipment,
fixtures
and fittings
Motor
vehicles
Assets
under
construction Total
Cost BGN’000 BGN’000 BGN’000 BGN’000 BGN’000 BGN’000
At 1 January 2021 407 5,018 19,230 843 1,362 26,860
Additions - - 132 8 1,195 1,335
Disposals - - (32) - - (32)
Transferred from right-of
use-assets - - - 124 - 124
Transfers - - 465 - (465) -
At 31 December 2021 407 5,018 19,795 975 2,092 28,287
At 1 January 2022 407 5,018 19,795 975 2,092 28,287
Additions - - 101 - 860 961
Disposals - - (42) (5) - (47)
Transferred from right-of
use-assets - - - 17 - 17
Transfers - 53 266 - (319) -
At 31 December2022 407 5,071 20,120 987 2,633 29,218
Accumulated
depreciation:
At 1 January 2021 - 3,149 9,338 521 - 13,008
Depreciation charge for
the year - 139 846 53 - 1,038
Transferred from right-of
use-assets - - - 27 - 27
Disposals - - (32) - - (32)
At 31 December 2021 - 3,288 10,152 601 - 14,041
At 1 January 2022 - 3,288 10,152 601 - 14,041
Depreciation charge for
the year - 83 853 70 - 1,006
Transferred from right-of
use-assets - - - 8 - 8
Disposals - - (42) (5) - (47)
At 31 December2022 - 3,371 10,963 674 - 15,008
Carrying amount
At 1 January 2021 407 1,869 9,892 322 1,362 13,852
At 31 December 2021 407 1,730 9,643 374 2,092 14,246
At 31 December2022 407 1,700 9,157 313 2,633 14,210
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
At 31 December 2022
Financial statements in English are translation from the original in Bulgarian 21
5. Earnings per share
Basic earnings per share are calculated by dividing the profit for the period to the weighted average number of
ordinary shares held for the period. The Company’s basic earnings per share are calculated by using the
following data:
31.12.2022 31.12.2021
BGN’000 BGN’000
Net profit for the year (in BGN’000) 4,382 4,759
Weighted average number of ordinary shares held for the year (in thousand) 13,169 13,169
Basic earnings per share (in BGN) 0,33 0,36
6. Property, plant and equipment
Land
(terrains)
Buildings,
installations
and
outdoor
equipment
Plant,
equipment,
fixtures
and fittings
Motor
vehicles
Assets
under
construction Total
Cost BGN’000 BGN’000 BGN’000 BGN’000 BGN’000 BGN’000
At 1 January 2021 407 5,018 19,230 843 1,362 26,860
Additions - - 132 8 1,195 1,335
Disposals - - (32) - - (32)
Transferred from right-of
use-assets - - - 124 - 124
Transfers - - 465 - (465) -
At 31 December 2021 407 5,018 19,795 975 2,092 28,287
At 1 January 2022 407 5,018 19,795 975 2,092 28,287
Additions - - 101 - 860 961
Disposals - - (42) (5) - (47)
Transferred from right-of
use-assets - - - 17 - 17
Transfers - 53 266 - (319) -
At 31 December2022 407 5,071 20,120 987 2,633 29,218
Accumulated
depreciation:
At 1 January 2021 - 3,149 9,338 521 - 13,008
Depreciation charge for
the year - 139 846 53 - 1,038
Transferred from right-of
use-assets - - - 27 - 27
Disposals - - (32) - - (32)
At 31 December 2021 - 3,288 10,152 601 - 14,041
At 1 January 2022 - 3,288 10,152 601 - 14,041
Depreciation charge for
the year - 83 853 70 - 1,006
Transferred from right-of
use-assets - - - 8 - 8
Disposals - - (42) (5) - (47)
At 31 December2022 - 3,371 10,963 674 - 15,008
Carrying amount
At 1 January 2021 407 1,869 9,892 322 1,362 13,852
At 31 December 2021 407 1,730 9,643 374 2,092 14,246
At 31 December2022 407 1,700 9,157 313 2,633 14,210
KORADO-BULGARIA AD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
At 31 December 2022
Financial statements in English are translation from the original in Bulgarian 22
6. Property, plant and equipment(continued)
Assets under construction
At 31 December 2022 and 31 December 2021 assets under construction progress related to the construction of a
new production site.
Impairment of property, plant and equipment
Based on the impairment testing of fixed tangible assets conducted at 31 December 2022 and 31 December
2021, the Company’s management did not find any indications that the assets’ carrying amounts might exceed
their recoverable amounts. Therefore, no impairment of property, plant and equipment has been recognized at 31
December 2022.
Fully depreciated assets
At 31 December 2022 the Company held assets with a cost of BGN 5,447thousand (31 December 2021:
BGN5,468 thousand),which were fully depreciated but still in use. These included: buildings of BGN 1,648
thousand (31 December 2021: BGN 1,796 thousand), production equipment of BGN 3,383 thousand (31
December 2021: BGN 3,273thousand), motor vehicles of BGN 237 thousand (31 December 2021: BGN
242thousand), fixture and fittings of BGN 74 thousand (31 December 2021: BGN 56 thousand), hardware of
BGN 93 thousand (31 December 2021: BGN 91 thousand), and other assets of BGN 12 thousand (31 December
2021: BGN 10 thousand).
Items of property, plant and equipment has not been mortgaged by the Company.
Geographic information
All items of property, plant and equipment are located on the territory of Bulgaria.
7. Intangible assets
Software
BGN’000
Cost:
At 1 January 2021 96
Additions 4
Disposals (3)
At 31 December 2021 97
At 1 January 2022 97
Additions 8
Disposals -
At 31 December 2022 105
Accumulated amortisation
At 1 January 2021 79
Amortisation charge for the year 8
Amortisation of disposals (3)
At 31 December 2021 84
At 1 January 2022 84
Amortisation charge for the year 7
Amortisation of disposals -
At 31 December 2022 91
Carrying amount
At 1 January 2021 17
At 31 December 2021 13
At 31 December 2022 14
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
At 31 December 2022
Financial statements in English are translation from the original in Bulgarian 22
6. Property, plant and equipment(continued)
Assets under construction
At 31 December 2022 and 31 December 2021 assets under construction progress related to the construction of a
new production site.
Impairment of property, plant and equipment
Based on the impairment testing of fixed tangible assets conducted at 31 December 2022 and 31 December
2021, the Company’s management did not find any indications that the assets’ carrying amounts might exceed
their recoverable amounts. Therefore, no impairment of property, plant and equipment has been recognized at 31
December 2022.
Fully depreciated assets
At 31 December 2022 the Company held assets with a cost of BGN 5,447thousand (31 December 2021:
BGN5,468 thousand),which were fully depreciated but still in use. These included: buildings of BGN 1,648
thousand (31 December 2021: BGN 1,796 thousand), production equipment of BGN 3,383 thousand (31
December 2021: BGN 3,273thousand), motor vehicles of BGN 237 thousand (31 December 2021: BGN
242thousand), fixture and fittings of BGN 74 thousand (31 December 2021: BGN 56 thousand), hardware of
BGN 93 thousand (31 December 2021: BGN 91 thousand), and other assets of BGN 12 thousand (31 December
2021: BGN 10 thousand).
Items of property, plant and equipment has not been mortgaged by the Company.
Geographic information
All items of property, plant and equipment are located on the territory of Bulgaria.
7. Intangible assets
Software
BGN’000
Cost:
At 1 January 2021 96
Additions 4
Disposals (3)
At 31 December 2021 97
At 1 January 2022 97
Additions 8
Disposals -
At 31 December 2022 105
Accumulated amortisation
At 1 January 2021 79
Amortisation charge for the year 8
Amortisation of disposals (3)
At 31 December 2021 84
At 1 January 2022 84
Amortisation charge for the year 7
Amortisation of disposals -
At 31 December 2022 91
Carrying amount
At 1 January 2021 17
At 31 December 2021 13
At 31 December 2022 14
KORADO-BULGARIA AD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
At 31 December 2022
Financial statements in English are translation from the original in Bulgarian 23
7. Intangible assets (continued)
Impairment of intangible assets
The Company performed an impairment testing of intangible assets at 31 December 2022 and 31 December
2021. No indications were found out that the assets’ carrying amounts might exceed their recoverable amounts
and therefore, no impairment loss was recognized in the financial statements.
Fully amortised intangible assets
At 31 December 2022 the Company held software with cost of BGN 46 thousand (31 December 2021: BGN 48
thousand), which was fully amortised but still in use.
8. Inventories
31.12.2022 31.12.2021
BGN’000 BGN’000
Raw materials 10,961 12,150
Finished goods 1,169 1,182
Goods for resale 213 251
Work in progress 308 278
12,651 13,861
No write downs to NRV were made in the period. No inventories were pledged as a security. The inventories
forming the cost of sales during the year and respectively recognized as an expense are at the amount of BGN
41,097thousand (2021: BGN 39,188 thousand).
9. Trade and other receivables
31.12.2022 31.12.2021
BGN’000 BGN’000
Trade receivables, gross 197 1,322
VAT refundable 801 201
Other receivables 68 71
Impairment of trade receivables (69) (10)
997 1,584
Trade receivables are not interest-bearing and are normally settled within 0 - 60 days.
As at 31 December 2022 and 31 December 2021 the ageing analysis of trade receivables is presented in the table
below:
Overdue
Total Regular
< 30
days
30-60
days
60-90
days
90-120
days
>120
days
31.12.2022 197 25 - - - - 172
31.12.2021 1,322 1,312 - - - 10 -
As at 31 December 2022 trade receivables of BGN 95 thousand (31 December 2021: BGN 991 thousand) are
denominated in Euro and BGN 102 thousand (31 December 2021: 331 thousand) are denominated in Bulgarian
leva.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
At 31 December 2022
Financial statements in English are translation from the original in Bulgarian 23
7. Intangible assets (continued)
Impairment of intangible assets
The Company performed an impairment testing of intangible assets at 31 December 2022 and 31 December
2021. No indications were found out that the assets’ carrying amounts might exceed their recoverable amounts
and therefore, no impairment loss was recognized in the financial statements.
Fully amortised intangible assets
At 31 December 2022 the Company held software with cost of BGN 46 thousand (31 December 2021: BGN 48
thousand), which was fully amortised but still in use.
8. Inventories
31.12.2022 31.12.2021
BGN’000 BGN’000
Raw materials 10,961 12,150
Finished goods 1,169 1,182
Goods for resale 213 251
Work in progress 308 278
12,651 13,861
No write downs to NRV were made in the period. No inventories were pledged as a security. The inventories
forming the cost of sales during the year and respectively recognized as an expense are at the amount of BGN
41,097thousand (2021: BGN 39,188 thousand).
9. Trade and other receivables
31.12.2022 31.12.2021
BGN’000 BGN’000
Trade receivables, gross 197 1,322
VAT refundable 801 201
Other receivables 68 71
Impairment of trade receivables (69) (10)
997 1,584
Trade receivables are not interest-bearing and are normally settled within 0 - 60 days.
As at 31 December 2022 and 31 December 2021 the ageing analysis of trade receivables is presented in the table
below:
Overdue
Total Regular
< 30
days
30-60
days
60-90
days
90-120
days
>120
days
31.12.2022 197 25 - - - - 172
31.12.2021 1,322 1,312 - - - 10 -
As at 31 December 2022 trade receivables of BGN 95 thousand (31 December 2021: BGN 991 thousand) are
denominated in Euro and BGN 102 thousand (31 December 2021: 331 thousand) are denominated in Bulgarian
leva.
KORADO-BULGARIA AD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
At 31 December 2022
Financial statements in English are translation from the original in Bulgarian 24
10. Cash and cash equivalents
31.12.2022 31.12.2021
BGN’000 BGN’000
Cash in bank accounts 483 1,160
Cash on hand 6 10
489 1,170
Cash at banks accrue interest at floating interest rates based on the intraday interest rates on bank deposits.
As at 31 December 2022 cash and cash equivalents of BGN 285 thousand (31 December 2021: BGN 555
thousand) are denominated in Euro and BGN 204 thousand (31 December 2021: 615 thousand) are denominated
in Bulgarian leva.
11. Share capital and reserves
11.1 Share capital
number BGN’000
1 January 2021 13,168,614 13,169
At 31 December 2021 13,168,614 13,169
At 31 December 2022 13,168,614 13,169
All subscribed shares were paid at 31 December 2022 and 31 December 2021.
11.2 Share premium
As at 31 December 2022 and 31 December 2021 the share premium is amounting to BGN 119 thousand.
11.3 Treasury shares
In 2019 the Company acquired 12,000 treasury shares at the total amount of BGN 66 thousand. During the year
945 treasury shares were sold at the amount of BGN 5 thousand.
On 18 September 2019 the shareholders approved a decision for purchase of 12,000 treasury shares to be
provided to employees in the form of an additional one-off compensation to all individuals employed by the
Company for more than 1 year under a labour or management contract. The shares are allocated to 213
qualifying employees based on a step rate depending on the number of years of employment.
As at 31 December 2022 and 31 December 2021 there are no treasury shares owned by the Company.
11.4 Statutory reserves and other reserves
Statutory reserves are formed by joint-stock companies, such as KORADO-Bulgaria AD, through distribution of
profits on the grounds of article 246 of the Commercial Act. They are set aside until they reach one-tenth or
more of the capital. Sources of statutory reserves are at least one-tenth of the net profit, share premiums and
funds, stipulated in the Articles of Association or approved by decision of the General Meeting of Shareholders.
The statutory reserves may only be used to cover losses of the Company from the current and previous reporting
periods.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
At 31 December 2022
Financial statements in English are translation from the original in Bulgarian 24
10. Cash and cash equivalents
31.12.2022 31.12.2021
BGN’000 BGN’000
Cash in bank accounts 483 1,160
Cash on hand 6 10
489 1,170
Cash at banks accrue interest at floating interest rates based on the intraday interest rates on bank deposits.
As at 31 December 2022 cash and cash equivalents of BGN 285 thousand (31 December 2021: BGN 555
thousand) are denominated in Euro and BGN 204 thousand (31 December 2021: 615 thousand) are denominated
in Bulgarian leva.
11. Share capital and reserves
11.1 Share capital
number BGN’000
1 January 2021 13,168,614 13,169
At 31 December 2021 13,168,614 13,169
At 31 December 2022 13,168,614 13,169
All subscribed shares were paid at 31 December 2022 and 31 December 2021.
11.2 Share premium
As at 31 December 2022 and 31 December 2021 the share premium is amounting to BGN 119 thousand.
11.3 Treasury shares
In 2019 the Company acquired 12,000 treasury shares at the total amount of BGN 66 thousand. During the year
945 treasury shares were sold at the amount of BGN 5 thousand.
On 18 September 2019 the shareholders approved a decision for purchase of 12,000 treasury shares to be
provided to employees in the form of an additional one-off compensation to all individuals employed by the
Company for more than 1 year under a labour or management contract. The shares are allocated to 213
qualifying employees based on a step rate depending on the number of years of employment.
As at 31 December 2022 and 31 December 2021 there are no treasury shares owned by the Company.
11.4 Statutory reserves and other reserves
Statutory reserves are formed by joint-stock companies, such as KORADO-Bulgaria AD, through distribution of
profits on the grounds of article 246 of the Commercial Act. They are set aside until they reach one-tenth or
more of the capital. Sources of statutory reserves are at least one-tenth of the net profit, share premiums and
funds, stipulated in the Articles of Association or approved by decision of the General Meeting of Shareholders.
The statutory reserves may only be used to cover losses of the Company from the current and previous reporting
periods.
KORADO-BULGARIA AD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
At 31 December 2022
Financial statements in English are translation from the original in Bulgarian 25
11. Share capital and reserves (continued)
11.5. Dividends
Dividends distributed in 2022
On 18 May 2022 the General Meeting of Shareholders approved distribution of dividends amounting to BGN
2,502 thousand or a dividend of BGN 0.19.
On 14 September 2022 the General Meeting of Shareholders approved distribution of interim dividends
amounting to BGN 1,317 thousand or a dividend of BGN 0.10 per share.
Dividends distributed in 2021
On 19 May 2021 the General Meeting of Shareholders approved distribution of dividends amounting to BGN
2,502 thousand or a dividend of BGN 0.19.
On 15 September 2021 the General Meeting of Shareholders approved distribution of interim dividends
amounting to BGN 1,317 thousand or a dividend of BGN 0.10 per share.
Dividends distributed in 2020
On 20 May 2020 the General Meeting of Shareholders approved distribution of dividends amounting to BGN
2,502 thousand or a dividend of BGN 0.19.
On 16 September 2020 the General Meeting of Shareholders approved distribution of interim dividends
amounting to BGN 1,317 thousand or a dividend of BGN 0.10 per share.
12.1. Lease liabilities
The Company concluded lease contracts for vehicles. For leases previously classified as finance lease, the
Company recognised the carrying value of the leased asset and lease liability before the adoption of IFRS 16 and
as carrying value the right-of-use asset and lease liability as at the date of initial adoption. The Company has
only finance leases with a clause for transferring of ownership of vehicles, these are not modified in the period,
no extension or termination options have been assessed as relevant in determining the lease terms of the
respective vehicles leases. In the period there were no contracts for short term or low value leases, for which the
associated lease payments have been directly expensed.
Interest expense on lease liabilities for the period is BGN 7 thousand (2021: BGN 5 thousand).
As at 31 December 2022 the lease liability amounts to BGN 377 thousand (31 December 2021 : BGN 166
thousand).
31.12.2022 31.12.2021
Lease
payments
Present
value of
payments
Lease
payments
Present
value of
payments
BGN’000 BGN’000 BGN’000 BGN’000
Within one year 131 123 54 50
From one to five years 268 254 123 116
Total minimum lease payments 399 377 177 166
Less finance charges (22) - (11) -
Present value of lease payments 377 377 166 166
The lease payments presented above do not include a variable component. The vehicles leased are not subleased.
No sale and lease back transactions have been concluded. The total cash outflow on leases is BGN 188 for
principal lease payments and BGN 7 thousand for interest.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
At 31 December 2022
Financial statements in English are translation from the original in Bulgarian 25
11. Share capital and reserves (continued)
11.5. Dividends
Dividends distributed in 2022
On 18 May 2022 the General Meeting of Shareholders approved distribution of dividends amounting to BGN
2,502 thousand or a dividend of BGN 0.19.
On 14 September 2022 the General Meeting of Shareholders approved distribution of interim dividends
amounting to BGN 1,317 thousand or a dividend of BGN 0.10 per share.
Dividends distributed in 2021
On 19 May 2021 the General Meeting of Shareholders approved distribution of dividends amounting to BGN
2,502 thousand or a dividend of BGN 0.19.
On 15 September 2021 the General Meeting of Shareholders approved distribution of interim dividends
amounting to BGN 1,317 thousand or a dividend of BGN 0.10 per share.
Dividends distributed in 2020
On 20 May 2020 the General Meeting of Shareholders approved distribution of dividends amounting to BGN
2,502 thousand or a dividend of BGN 0.19.
On 16 September 2020 the General Meeting of Shareholders approved distribution of interim dividends
amounting to BGN 1,317 thousand or a dividend of BGN 0.10 per share.
12.1. Lease liabilities
The Company concluded lease contracts for vehicles. For leases previously classified as finance lease, the
Company recognised the carrying value of the leased asset and lease liability before the adoption of IFRS 16 and
as carrying value the right-of-use asset and lease liability as at the date of initial adoption. The Company has
only finance leases with a clause for transferring of ownership of vehicles, these are not modified in the period,
no extension or termination options have been assessed as relevant in determining the lease terms of the
respective vehicles leases. In the period there were no contracts for short term or low value leases, for which the
associated lease payments have been directly expensed.
Interest expense on lease liabilities for the period is BGN 7 thousand (2021: BGN 5 thousand).
As at 31 December 2022 the lease liability amounts to BGN 377 thousand (31 December 2021 : BGN 166
thousand).
31.12.2022 31.12.2021
Lease
payments
Present
value of
payments
Lease
payments
Present
value of
payments
BGN’000 BGN’000 BGN’000 BGN’000
Within one year 131 123 54 50
From one to five years 268 254 123 116
Total minimum lease payments 399 377 177 166
Less finance charges (22) - (11) -
Present value of lease payments 377 377 166 166
The lease payments presented above do not include a variable component. The vehicles leased are not subleased.
No sale and lease back transactions have been concluded. The total cash outflow on leases is BGN 188 for
principal lease payments and BGN 7 thousand for interest.
KORADO-BULGARIA AD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
At 31 December 2022
Financial statements in English are translation from the original in Bulgarian 26
12.2.Right-of-Use Assets
As at 31 December 2022 the carrying amount of the right-of-use assets (vehicles previously presented as finance
lease liabilities) is BGN 577 thousand (31 December 2021: BGN 219 thousand).
The carrying amount of the right-of use-asset could be analysed as follows:
Vehicles 2022 2021
BGN’000 BGN’000
Carrying amount
At 1 January 219 309
Additions – new lease contracts 400 49
Termination of lease contracts (17) (124)
Depreciation for the year (45) (15)
At 31 December 557 219
Further details of the movement of right-of-use asset and transfers to property, plant and equipment are shown
below:
Right-of use-assets
At 1 January 2021 357
Additions 49
Transferred to motor vehicles (PP&E) (124)
At 31 December 2021 282
At 1 January 2022 282
Additions 400
Transferred to motor vehicles (PP&E) (17)
At 31 December2022 665
Accumulated depreciation:
At 1 January 2021 48
Depreciation charge for the year 42
Transferred to motor vehicles (PP&E) (27)
At 31 December 2021 63
At 1 January 2022 63
Depreciation charge for the year 53
Transferred to motor vehicles (PP&E) (8)
At 31 December2022 108
Carrying amount
At 1 January 2021 309
At 31 December 2021 219
At 31 December2022 557
13. Retirement benefits
Pursuant to the requirement of the Bulgarian labour legislation and the Collective Labour Agreement, the
Company is obliged to pay two to six gross monthly salaries to its employees upon retirement, depending on the
length of their service in the Company. If an employee has worked for KORADO-Bulgaria AD for 10 years or
more, the retirement benefit amounts to six gross monthly salaries upon retirement, if he/she has worked for the
Company from 5 to 10 years – four gross monthly salaries, and if he/she has worked for less than five years -
two gross monthly salaries. An employee, who has worked for KORADO-Bulgaria AD for more than 20 years,
shall be entitled to receive 8 gross monthly salaries upon retirement. These retirement benefits are unfunded.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
At 31 December 2022
Financial statements in English are translation from the original in Bulgarian 26
12.2.Right-of-Use Assets
As at 31 December 2022 the carrying amount of the right-of-use assets (vehicles previously presented as finance
lease liabilities) is BGN 577 thousand (31 December 2021: BGN 219 thousand).
The carrying amount of the right-of use-asset could be analysed as follows:
Vehicles 2022 2021
BGN’000 BGN’000
Carrying amount
At 1 January 219 309
Additions – new lease contracts 400 49
Termination of lease contracts (17) (124)
Depreciation for the year (45) (15)
At 31 December 557 219
Further details of the movement of right-of-use asset and transfers to property, plant and equipment are shown
below:
Right-of use-assets
At 1 January 2021 357
Additions 49
Transferred to motor vehicles (PP&E) (124)
At 31 December 2021 282
At 1 January 2022 282
Additions 400
Transferred to motor vehicles (PP&E) (17)
At 31 December2022 665
Accumulated depreciation:
At 1 January 2021 48
Depreciation charge for the year 42
Transferred to motor vehicles (PP&E) (27)
At 31 December 2021 63
At 1 January 2022 63
Depreciation charge for the year 53
Transferred to motor vehicles (PP&E) (8)
At 31 December2022 108
Carrying amount
At 1 January 2021 309
At 31 December 2021 219
At 31 December2022 557
13. Retirement benefits
Pursuant to the requirement of the Bulgarian labour legislation and the Collective Labour Agreement, the
Company is obliged to pay two to six gross monthly salaries to its employees upon retirement, depending on the
length of their service in the Company. If an employee has worked for KORADO-Bulgaria AD for 10 years or
more, the retirement benefit amounts to six gross monthly salaries upon retirement, if he/she has worked for the
Company from 5 to 10 years – four gross monthly salaries, and if he/she has worked for less than five years -
two gross monthly salaries. An employee, who has worked for KORADO-Bulgaria AD for more than 20 years,
shall be entitled to receive 8 gross monthly salaries upon retirement. These retirement benefits are unfunded.
KORADO-BULGARIA AD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
At 31 December 2022
Financial statements in English are translation from the original in Bulgarian 27
13. Retirement benefits (continued)
The components of the expenses for retirement benefits recognised in the statement of comprehensive income
for 2022 and the liabilities recognised in the statement of financial position as at 31 December 2022 are as
follows:
Expenses for retirement benefits
2022 2021
BGN’000 BGN’000
Interest expense 3 3
Current service costs 18 53
Expenses for retirement benefits, recognised in profit and loss 21 56
Actuarial losses recognised in other comprehensive income 40 45
Changes in the present value of the retirement benefit obligation are as follows:
2022 2021
BGN’000 BGN’000
At 1 January 543 559
Interest expense 3 3
Current service costs 18 53
Benefits paid (75) (117)
Actuarial losses 40 45
31 December 529 543
The actuarial gains and losses arising from experience adjustments are at the amount of BGN (67) thousand
(2021: BGN (50) thousand), from changes in demographic assumptions are the amount of BGN (6) thousand
(2021: BGN (1) thousand), while those arising from changes in financial assumptions are BGN 21 thousand
(2021: BGN 4 thousand).
The key assumptions used in determining the retirement benefit liability are stated in the table below:
31.12.2022 31.12.2021
Discount rate 6% 0.6%
Future salary increases 10% 3-10%
The tables below contain a quantitative sensitivity analysis of the retirement benefit liability as at 31 December
2022 and 31 December2021:
Assumptions 2022 Interest rate Salary growth
Sensitivity level
Increase by
1%
Decrease
by 1%
Increase by
1%
Decrease
by 1%
BGN’000 BGN’000 BGN’000 BGN’000
Effect on the pension liability increase/(decrease) (47) 54 48 (43)
Assumptions 2021 Interest rate Salary growth
Sensitivity level
Increase by
1%
Decrease
by 1%
Increase by
1%
Decrease
by 1%
BGN’000 BGN’000 BGN’000 BGN’000
Effect on the pension liability increase/(decrease) (43) 50 45 (39)
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
At 31 December 2022
Financial statements in English are translation from the original in Bulgarian 27
13. Retirement benefits (continued)
The components of the expenses for retirement benefits recognised in the statement of comprehensive income
for 2022 and the liabilities recognised in the statement of financial position as at 31 December 2022 are as
follows:
Expenses for retirement benefits
2022 2021
BGN’000 BGN’000
Interest expense 3 3
Current service costs 18 53
Expenses for retirement benefits, recognised in profit and loss 21 56
Actuarial losses recognised in other comprehensive income 40 45
Changes in the present value of the retirement benefit obligation are as follows:
2022 2021
BGN’000 BGN’000
At 1 January 543 559
Interest expense 3 3
Current service costs 18 53
Benefits paid (75) (117)
Actuarial losses 40 45
31 December 529 543
The actuarial gains and losses arising from experience adjustments are at the amount of BGN (67) thousand
(2021: BGN (50) thousand), from changes in demographic assumptions are the amount of BGN (6) thousand
(2021: BGN (1) thousand), while those arising from changes in financial assumptions are BGN 21 thousand
(2021: BGN 4 thousand).
The key assumptions used in determining the retirement benefit liability are stated in the table below:
31.12.2022 31.12.2021
Discount rate 6% 0.6%
Future salary increases 10% 3-10%
The tables below contain a quantitative sensitivity analysis of the retirement benefit liability as at 31 December
2022 and 31 December2021:
Assumptions 2022 Interest rate Salary growth
Sensitivity level
Increase by
1%
Decrease
by 1%
Increase by
1%
Decrease
by 1%
BGN’000 BGN’000 BGN’000 BGN’000
Effect on the pension liability increase/(decrease) (47) 54 48 (43)
Assumptions 2021 Interest rate Salary growth
Sensitivity level
Increase by
1%
Decrease
by 1%
Increase by
1%
Decrease
by 1%
BGN’000 BGN’000 BGN’000 BGN’000
Effect on the pension liability increase/(decrease) (43) 50 45 (39)
KORADO-BULGARIA AD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
At 31 December 2022
Financial statements in English are translation from the original in Bulgarian 28
14. Trade and other payables
31.12.2022 31.12.2021
BGN’000 BGN’000
Payables to suppliers 1,461 6,767
Payables to personnel 328 424
Payables for social securities 123 186
Other liabilities 89 114
2,001 7,491
Terms and conditions of the financial liabilities, set out in the table above, are as follows:
Trade payables are non-interest bearing and are normally settled on 30- 60 day’s term;
Tax payables are non-interest bearing and are settled within the legal deadlines;
Other payables are non- interest bearing and are normally settled on 30 day’s term.
As at 31 December 2022 trade and other payables of BGN 1,486 thousand (31 December 2021: BGN 5,762
thousand) are denominated in Euro and BGN 515 thousand (31 December 2021: 1,729 thousand) are
denominated in Bulgarian leva.
15. Provisions
As at 31 December 2022 and 31 December 2021 provisions consist of unused paid leave provisions at the
amount of BGN 107 thousand and BGN 220 thousand, respectively.
16. Related party disclosures
Ultimate parent company
The ultimate parent company is KORADO a.s., Czech Republic.
Entities with controlling interest in the Company
At 31 December 2022, 82.15% of the shares of KORADO-Bulgaria AD are held by KORADO a.s., Czech
Republic. The remaining 17.85%of the shares are held by legal entities and individuals.
Besides with the parent company, KORADO a.s., Czech Republic, in 2022 and 2021 the Company concluded
transactions with other related companies as well, namely Licon Heat s.r.o., Czech Republic (a subsidiary of
KORADO a.s., Czech Republic).
The following table provides the total amount of related party transactions and the outstanding balances for the
current and previous reporting period:
Nature 2022 2021
BGN’000 BGN’000
Purchases from related parties
Ultimate parent company
KORADO a.s. Czech Republic Purchase of materials and goods 1,822 1,462
Purchase of services 309 328
Interest on loan 85 65
Licon Heat s.r.o. Czech Republic Purchase of materials and goods 79 92
2,295 1,947
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
At 31 December 2022
Financial statements in English are translation from the original in Bulgarian 28
14. Trade and other payables
31.12.2022 31.12.2021
BGN’000 BGN’000
Payables to suppliers 1,461 6,767
Payables to personnel 328 424
Payables for social securities 123 186
Other liabilities 89 114
2,001 7,491
Terms and conditions of the financial liabilities, set out in the table above, are as follows:
Trade payables are non-interest bearing and are normally settled on 30- 60 day’s term;
Tax payables are non-interest bearing and are settled within the legal deadlines;
Other payables are non- interest bearing and are normally settled on 30 day’s term.
As at 31 December 2022 trade and other payables of BGN 1,486 thousand (31 December 2021: BGN 5,762
thousand) are denominated in Euro and BGN 515 thousand (31 December 2021: 1,729 thousand) are
denominated in Bulgarian leva.
15. Provisions
As at 31 December 2022 and 31 December 2021 provisions consist of unused paid leave provisions at the
amount of BGN 107 thousand and BGN 220 thousand, respectively.
16. Related party disclosures
Ultimate parent company
The ultimate parent company is KORADO a.s., Czech Republic.
Entities with controlling interest in the Company
At 31 December 2022, 82.15% of the shares of KORADO-Bulgaria AD are held by KORADO a.s., Czech
Republic. The remaining 17.85%of the shares are held by legal entities and individuals.
Besides with the parent company, KORADO a.s., Czech Republic, in 2022 and 2021 the Company concluded
transactions with other related companies as well, namely Licon Heat s.r.o., Czech Republic (a subsidiary of
KORADO a.s., Czech Republic).
The following table provides the total amount of related party transactions and the outstanding balances for the
current and previous reporting period:
Nature 2022 2021
BGN’000 BGN’000
Purchases from related parties
Ultimate parent company
KORADO a.s. Czech Republic Purchase of materials and goods 1,822 1,462
Purchase of services 309 328
Interest on loan 85 65
Licon Heat s.r.o. Czech Republic Purchase of materials and goods 79 92
2,295 1,947
KORADO-BULGARIA AD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
At 31 December 2022
Financial statements in English are translation from the original in Bulgarian 29
16. Related party disclosures (continued)
Nature 2022 2021
BGN’000 BGN’000
Sales to related parties
Ultimate parent company
KORADO a.s. Czech Republic Sales of products 46,924 42,476
Sales of materials 11 1,756
46,935 44,232
31.12.2022 31.12.2021
BGN’000 BGN’000
Related party receivables
Ultimate parent company
KORADO a.s. Czech Republic Trade receivables 4,023 4,397
4,023 4,397
Payables to related parties 31.12.2022 31.12.2021
BGN’000 BGN’000
Ultimate parent company
KORADO a.s. Czech Republic Interest-bearing loan 6,063 3,716
KORADO a.s. Czech Republic Trade payables 787 788
KORADO a.s. Czech Republic Current interest payables 36 -
Licon Heat s.r.o. Czech Republic Trade payables - 17
6,886 4,521
Agreements were concluded and executed under which a portion of trade receivables amounting to BGN 2,181
thousand (31 December 2021: BGN 1,182 thousand) due from related parties were settled against trade payables
of BGN 2,132 thousand (31 December 2021: BGN 1,117 thousand) and interest payable of BGN 49 thousand
(31 December 2021: BGN 65 thousand and interest payable) without payment.
As at 31 December 2022 receivables from related parties of BGN 0 thousand (31 December 2021: BGN 0
thousand) are overdue within 30 days.
The receivables from related parties are subject to individual credit risk assessment, which takes into
consideration the available qualitative and non-statistical quantitative information. Based on this information, the
management has not accrued impairment loss allowance for the receivables from related parties as at 31
December2022 and 31 December 2021 as it is insignificant.
All receivables and payables to related parties as at 31 December 2022 and 31 December 2021 are denominated
in euro.
Interest-bearing loan and borrowings from a related party
The first tranche of BGN 1,174 thousand of a loan from KORADO a.s. Czech Republic was received in
February 2016, and in April 2016 the second tranche of BGN 3,520 thousand. The loan amounted to BGN 4,694
thousand. The main purpose of these funds was to finance the acquisition and implementation of a production
line for tube heating units and renovation of production facilities. The loan was long-term and with initial
maturity in 2021. The agreed interest rate is 1 М EURBOR+ a fixed margin of 1.75%.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
At 31 December 2022
Financial statements in English are translation from the original in Bulgarian 29
16. Related party disclosures (continued)
Nature 2022 2021
BGN’000 BGN’000
Sales to related parties
Ultimate parent company
KORADO a.s. Czech Republic Sales of products 46,924 42,476
Sales of materials 11 1,756
46,935 44,232
31.12.2022 31.12.2021
BGN’000 BGN’000
Related party receivables
Ultimate parent company
KORADO a.s. Czech Republic Trade receivables 4,023 4,397
4,023 4,397
Payables to related parties 31.12.2022 31.12.2021
BGN’000 BGN’000
Ultimate parent company
KORADO a.s. Czech Republic Interest-bearing loan 6,063 3,716
KORADO a.s. Czech Republic Trade payables 787 788
KORADO a.s. Czech Republic Current interest payables 36 -
Licon Heat s.r.o. Czech Republic Trade payables - 17
6,886 4,521
Agreements were concluded and executed under which a portion of trade receivables amounting to BGN 2,181
thousand (31 December 2021: BGN 1,182 thousand) due from related parties were settled against trade payables
of BGN 2,132 thousand (31 December 2021: BGN 1,117 thousand) and interest payable of BGN 49 thousand
(31 December 2021: BGN 65 thousand and interest payable) without payment.
As at 31 December 2022 receivables from related parties of BGN 0 thousand (31 December 2021: BGN 0
thousand) are overdue within 30 days.
The receivables from related parties are subject to individual credit risk assessment, which takes into
consideration the available qualitative and non-statistical quantitative information. Based on this information, the
management has not accrued impairment loss allowance for the receivables from related parties as at 31
December2022 and 31 December 2021 as it is insignificant.
All receivables and payables to related parties as at 31 December 2022 and 31 December 2021 are denominated
in euro.
Interest-bearing loan and borrowings from a related party
The first tranche of BGN 1,174 thousand of a loan from KORADO a.s. Czech Republic was received in
February 2016, and in April 2016 the second tranche of BGN 3,520 thousand. The loan amounted to BGN 4,694
thousand. The main purpose of these funds was to finance the acquisition and implementation of a production
line for tube heating units and renovation of production facilities. The loan was long-term and with initial
maturity in 2021. The agreed interest rate is 1 М EURBOR+ a fixed margin of 1.75%.
KORADO-BULGARIA AD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
At 31 December 2022
Financial statements in English are translation from the original in Bulgarian 30
16. Related party disclosures (continued)
A portion of the loan amounting to BGN 978 thousand was settled net against trade receivables due from the
same counterparty in October 2016 and thus, the amount of the loan from the parent company amounted to BGN
3,716 thousand as at 31 December 2022 and 31 December 2021. With Annex from 22.12.2021 the term of the
loan was extended to 31.12.2024.
In October 2022 was received new loan from KORADO a.s. Czech Republic – the amount is BGN 2,347
thousand. The main purpose of these funds was to buy materials. The loan was long-term and with maturity
31.12. 2027. The agreed interest rate is 1 М EURBOR+ a fixed margin of 2.15%.
31.12.2022 31.12.2021
BGN’000 BGN’000
Borrowings from related parties
Ultimate parent company
KORADO a.s. Czech Republic 6,063 3,716
6,063 3,716
Changes in borrowings is as follows:
2022 2021
BGN’000 BGN’000
At 1 January 3,716 3,716
Additional loan 2,347 -
Interest expense 85 65
Interest offset to trade receivables (49) (65)
Interest payables presented in current payables to related parties (36) -
At 31 December 6,063 3,716
Terms of the transactions with related parties
Sales and purchases to/from related parties are at contractual prices. The outstanding trade payables and
receivables at year end are unsecured, interest-free (except for loans) and their settlement is done with cash. For
the payables to or receivables from related parties, there are no guarantees received or issued. The Company did
not impair its related party receivables as of 31 December 2022 and 31 December 2021. A review for
impairment of the related party receivables is performed at the end of each year and is based on the financial
performance of the related party and the market it operates on, including actual cash flow settlements.
Remuneration to key management staff 31.12.2022 31.12.2021
BGN’000 BGN’000
Short-term benefits of MB and SB 94 288
Short-term benefits of AC 33 35
127 323
No post employment benefits or share based payments are provided to key management staff.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
At 31 December 2022
Financial statements in English are translation from the original in Bulgarian 30
16. Related party disclosures (continued)
A portion of the loan amounting to BGN 978 thousand was settled net against trade receivables due from the
same counterparty in October 2016 and thus, the amount of the loan from the parent company amounted to BGN
3,716 thousand as at 31 December 2022 and 31 December 2021. With Annex from 22.12.2021 the term of the
loan was extended to 31.12.2024.
In October 2022 was received new loan from KORADO a.s. Czech Republic – the amount is BGN 2,347
thousand. The main purpose of these funds was to buy materials. The loan was long-term and with maturity
31.12. 2027. The agreed interest rate is 1 М EURBOR+ a fixed margin of 2.15%.
31.12.2022 31.12.2021
BGN’000 BGN’000
Borrowings from related parties
Ultimate parent company
KORADO a.s. Czech Republic 6,063 3,716
6,063 3,716
Changes in borrowings is as follows:
2022 2021
BGN’000 BGN’000
At 1 January 3,716 3,716
Additional loan 2,347 -
Interest expense 85 65
Interest offset to trade receivables (49) (65)
Interest payables presented in current payables to related parties (36) -
At 31 December 6,063 3,716
Terms of the transactions with related parties
Sales and purchases to/from related parties are at contractual prices. The outstanding trade payables and
receivables at year end are unsecured, interest-free (except for loans) and their settlement is done with cash. For
the payables to or receivables from related parties, there are no guarantees received or issued. The Company did
not impair its related party receivables as of 31 December 2022 and 31 December 2021. A review for
impairment of the related party receivables is performed at the end of each year and is based on the financial
performance of the related party and the market it operates on, including actual cash flow settlements.
Remuneration to key management staff 31.12.2022 31.12.2021
BGN’000 BGN’000
Short-term benefits of MB and SB 94 288
Short-term benefits of AC 33 35
127 323
No post employment benefits or share based payments are provided to key management staff.
KORADO-BULGARIA AD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
At 31 December 2022
Financial statements in English are translation from the original in Bulgarian 31
17. Commitments and contingencies
Legal claims
No material legal claims have been brought against the Company.
Other
The last tax audit by the tax administration authorities covered the following types of liabilities, by periods:
Corporate income tax – until 31 December 2010;
VAT – until 31July 2008;
Personal income tax – until 31 December 2007;
Social security – until 31 January 2012; 30 September 2009
Local taxes and charges – until 31 December 2006;
Income tax foreign legal entities - until 31 December 2013.
The Company’s management believes that no material risks exist as a result of the dynamic fis cal and regulatory
environment in Bulgaria, which might require adjustments in the financial statements for the period ended 31
December 2022.
18. Fair value of financial instruments
Set out below is a comparison by class of carrying amounts and fair values of all of the Company’s financial
instruments that are carried in the financial statements:
Book value Fair value
31.12.2022 31.12.2021 31.12.2022 31.12.2021
BGN’000 BGN’000 BGN’000 BGN’000
Financial assets
Trade receivables 197 1,322 197 1,322
Related party receivables 4,023 4,397 4,023 4,397
Cash and short-term deposits 489 1,170 489 1,170
Book value Fair value
31.12.2022 31.12.2021 31.12.2022 31.12.2021
BGN’000 BGN’000 BGN’000 BGN’000
Financial liabilities
Interest-bearing borrowings to related parties 6,063 3,716 5,744 3,321
Trade payables 1,461 6,767 1,461 6,767
Payables to related parties 823 805 823 805
The fair value of the financial instruments of the Company is determined as the price at which a financial asset
could be sold or a financial liability could be transferred in an arm’s length transaction between market
participants at the date of the valuation.
The following methods and assumptions were used to estimate the fair values:
Cash and cash equivalents, trade receivables, trade payables, and other current financial assets and liabilities -
their fair values approximate their book values due to the short-term maturities of these instruments;
Interest-bearing loans and borrowings - the fair value is estimated by applying the DCF model and
using a discount factor based on the interest rates for debt instruments of similar terms and remaining maturities.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
At 31 December 2022
Financial statements in English are translation from the original in Bulgarian 31
17. Commitments and contingencies
Legal claims
No material legal claims have been brought against the Company.
Other
The last tax audit by the tax administration authorities covered the following types of liabilities, by periods:
Corporate income tax – until 31 December 2010;
VAT – until 31July 2008;
Personal income tax – until 31 December 2007;
Social security – until 31 January 2012; 30 September 2009
Local taxes and charges – until 31 December 2006;
Income tax foreign legal entities - until 31 December 2013.
The Company’s management believes that no material risks exist as a result of the dynamic fis cal and regulatory
environment in Bulgaria, which might require adjustments in the financial statements for the period ended 31
December 2022.
18. Fair value of financial instruments
Set out below is a comparison by class of carrying amounts and fair values of all of the Company’s financial
instruments that are carried in the financial statements:
Book value Fair value
31.12.2022 31.12.2021 31.12.2022 31.12.2021
BGN’000 BGN’000 BGN’000 BGN’000
Financial assets
Trade receivables 197 1,322 197 1,322
Related party receivables 4,023 4,397 4,023 4,397
Cash and short-term deposits 489 1,170 489 1,170
Book value Fair value
31.12.2022 31.12.2021 31.12.2022 31.12.2021
BGN’000 BGN’000 BGN’000 BGN’000
Financial liabilities
Interest-bearing borrowings to related parties 6,063 3,716 5,744 3,321
Trade payables 1,461 6,767 1,461 6,767
Payables to related parties 823 805 823 805
The fair value of the financial instruments of the Company is determined as the price at which a financial asset
could be sold or a financial liability could be transferred in an arm’s length transaction between market
participants at the date of the valuation.
The following methods and assumptions were used to estimate the fair values:
Cash and cash equivalents, trade receivables, trade payables, and other current financial assets and liabilities -
their fair values approximate their book values due to the short-term maturities of these instruments;
Interest-bearing loans and borrowings - the fair value is estimated by applying the DCF model and
using a discount factor based on the interest rates for debt instruments of similar terms and remaining maturities.
KORADO-BULGARIA AD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
At 31 December 2022
Financial statements in English are translation from the original in Bulgarian 32
18. Fair value of financial instruments (continued)
The Company’s principal financial liabilities comprise interest-bearing loans and borrowings, and trade
payables. The main objective of these financial instruments is to secure financing for the Company's operations.
The Company holds financial assets such as trade receivables, cash and short-term deposits, which arise directly
as a result of its operation.
As of 31 December 2022 and 31 December 2021 the Company neither held nor traded derivative financial
instruments.
19. Financial risk management objectives and policy
The major risks arising from the Company’s financial instruments are liquidity risk, foreign currency risk,
interest risk and credit risk. The risk management policy the Company’s management implemented to manage
these risks is summarized below.
Interest rate risk
The Company is exposed to the risk of changes in market interest rates primarily to its long-term financial
liabilities in the form of a related party loan at the amount of BGN 6,063 thousand bearing floating (variable)
interest rate based on 1-month Euribor and margin of 1.75% and 2.5%. It is a policy of the Company to manage
its interest expenses by using financial instruments with fixed and variable rates depending on the need of further
debt financing.
The following table demonstrates the sensitivity to possible changes in interest rates of the Company’s profit
before tax (through the effect on variable rate loans and borrowings), with all other variable held constant. There
is no effect on other equity components of the Company.
Increase/
Decrease in
interest rates
Effect on the pre-
tax profit
BGN’000
31 December2022
In EUR +0.5% (19)
In EUR -1% 37
Increase/
Decrease in
interest rates
Effect on the pre-
tax profit
BGN’000
31 December 2021
In EUR +0.5% (19)
In EUR -1% 37
Liquidity risk
The effective management of the Company’s liquidity presumes that sufficient working capital will be ensured
mainly through maintenance of sufficient cash and other current assets and financing from related parties.
Company’s quick ratio, calculated as current assets over current liabilities is 5.67 in 2022 (2021: 2.4), which
shows an appropriate ability of the Company to settle its liabilities coming due over the next 12 months.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
At 31 December 2022
Financial statements in English are translation from the original in Bulgarian 32
18. Fair value of financial instruments (continued)
The Company’s principal financial liabilities comprise interest-bearing loans and borrowings, and trade
payables. The main objective of these financial instruments is to secure financing for the Company's operations.
The Company holds financial assets such as trade receivables, cash and short-term deposits, which arise directly
as a result of its operation.
As of 31 December 2022 and 31 December 2021 the Company neither held nor traded derivative financial
instruments.
19. Financial risk management objectives and policy
The major risks arising from the Company’s financial instruments are liquidity risk, foreign currency risk,
interest risk and credit risk. The risk management policy the Company’s management implemented to manage
these risks is summarized below.
Interest rate risk
The Company is exposed to the risk of changes in market interest rates primarily to its long-term financial
liabilities in the form of a related party loan at the amount of BGN 6,063 thousand bearing floating (variable)
interest rate based on 1-month Euribor and margin of 1.75% and 2.5%. It is a policy of the Company to manage
its interest expenses by using financial instruments with fixed and variable rates depending on the need of further
debt financing.
The following table demonstrates the sensitivity to possible changes in interest rates of the Company’s profit
before tax (through the effect on variable rate loans and borrowings), with all other variable held constant. There
is no effect on other equity components of the Company.
Increase/
Decrease in
interest rates
Effect on the pre-
tax profit
BGN’000
31 December2022
In EUR +0.5% (19)
In EUR -1% 37
Increase/
Decrease in
interest rates
Effect on the pre-
tax profit
BGN’000
31 December 2021
In EUR +0.5% (19)
In EUR -1% 37
Liquidity risk
The effective management of the Company’s liquidity presumes that sufficient working capital will be ensured
mainly through maintenance of sufficient cash and other current assets and financing from related parties.
Company’s quick ratio, calculated as current assets over current liabilities is 5.67 in 2022 (2021: 2.4), which
shows an appropriate ability of the Company to settle its liabilities coming due over the next 12 months.
KORADO-BULGARIA AD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
At 31 December 2022
Financial statements in English are translation from the original in Bulgarian 33
19. Financial risk management objectives and policy (continued)
At 31 December 2022 and 31 December 2021 the maturity structure of the Company’s financial liabilities, based
on the agreed undiscounted payments, is presented below:
At 31 December2022
On
demand
< 3
months
3-12
months
1-5
year > 5 years Total
BGN’000 BGN’000 BGN’000 BGN’000 BGN’000 BGN’000
Lease liabilities - - 131 268 - 399
Trade payables - 1,461 - - - 1,461
Payables to related parties - 823 - - - 823
Interest-bearing loans and
borrowings - - 129 6,354 - 6,483
At 31 December 2021
On
demand
< 3
months
3-12
months
1-5
year > 5 years Total
BGN’000 BGN’000 BGN’000 BGN’000 BGN’000 BGN’000
Lease liabilities - - 50 116 - 166
Trade payables - 6,767 - - - 6,767
Payables to related parties - 805 - - - 805
Interest-bearing loans and
borrowings - - 65 3,846 - 3,911
Currency risk
The Company performs purchases, sales, and receives loans in foreign currencies – EUR. Since the exchange
rate BGN/EUR is fixed at ratio of EUR 1: BGN 1.95583, the currency risk relating to the EUR exposures of the
Company is immaterial. The FX gains and losses reported by the Company are the outcome of the bid-ask spread
on the fixed rate.
Credit risk
The Company trades only with recognised, creditworthy contractors. It is the Company’s policy that all
customers who wish to trade on credit terms are subject to credit verification procedures. Moreover, the trade
receivable balances are monitored currently, and as a result of that the Company’s exposure to bad and doubtful
debts is insignificant. There are no significant concentrations of credit risk within the Company. With respect to
credit risk arising from the other financial assets of the Company, which comprise cash and other financial
assets, the Company’s credit exposure arises from default of its counterparties.
The maximum credit exposure of the Company in relation to the recognised financial assets equals their
respective carrying amount as per the statement of financial position as at 31 December 2022.
Cash transactions are made only with financial institutions with high credit ratings. Cash and cash equivalents
are held with banks having a credit rating of BBB or higher. Approximately 75% (31 December 2021: 81%) of
the cash and cash equivalents are concentrated in one bank.
Credit quality of financial assets
The credit quality of financial assets can be assessed by reference to external credit ratings (if available) or to
historical information about counterparty default rates:
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
At 31 December 2022
Financial statements in English are translation from the original in Bulgarian 33
19. Financial risk management objectives and policy (continued)
At 31 December 2022 and 31 December 2021 the maturity structure of the Company’s financial liabilities, based
on the agreed undiscounted payments, is presented below:
At 31 December2022
On
demand
< 3
months
3-12
months
1-5
year > 5 years Total
BGN’000 BGN’000 BGN’000 BGN’000 BGN’000 BGN’000
Lease liabilities - - 131 268 - 399
Trade payables - 1,461 - - - 1,461
Payables to related parties - 823 - - - 823
Interest-bearing loans and
borrowings - - 129 6,354 - 6,483
At 31 December 2021
On
demand
< 3
months
3-12
months
1-5
year > 5 years Total
BGN’000 BGN’000 BGN’000 BGN’000 BGN’000 BGN’000
Lease liabilities - - 50 116 - 166
Trade payables - 6,767 - - - 6,767
Payables to related parties - 805 - - - 805
Interest-bearing loans and
borrowings - - 65 3,846 - 3,911
Currency risk
The Company performs purchases, sales, and receives loans in foreign currencies – EUR. Since the exchange
rate BGN/EUR is fixed at ratio of EUR 1: BGN 1.95583, the currency risk relating to the EUR exposures of the
Company is immaterial. The FX gains and losses reported by the Company are the outcome of the bid-ask spread
on the fixed rate.
Credit risk
The Company trades only with recognised, creditworthy contractors. It is the Company’s policy that all
customers who wish to trade on credit terms are subject to credit verification procedures. Moreover, the trade
receivable balances are monitored currently, and as a result of that the Company’s exposure to bad and doubtful
debts is insignificant. There are no significant concentrations of credit risk within the Company. With respect to
credit risk arising from the other financial assets of the Company, which comprise cash and other financial
assets, the Company’s credit exposure arises from default of its counterparties.
The maximum credit exposure of the Company in relation to the recognised financial assets equals their
respective carrying amount as per the statement of financial position as at 31 December 2022.
Cash transactions are made only with financial institutions with high credit ratings. Cash and cash equivalents
are held with banks having a credit rating of BBB or higher. Approximately 75% (31 December 2021: 81%) of
the cash and cash equivalents are concentrated in one bank.
Credit quality of financial assets
The credit quality of financial assets can be assessed by reference to external credit ratings (if available) or to
historical information about counterparty default rates:
KORADO-BULGARIA AD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
At 31 December 2022
Financial statements in English are translation from the original in Bulgarian 34
19. Financial risk management objectives and policy (continued)
31.12.2022 31.12.2021
BGN’000 BGN’000
Existing customers
Trade receivables 197 1,322
Receivables from related parties 4,023 4,397
Cash and cash equivalents
A- (Fitch) 280 828
BBB (BCRA) 209 342
Impairment of financial assets
The Company has the following financial assets, which are subject to the expected credit loss model:
Trade receivables
Cash and cash equivalents
The Company applies the IFRS 9 simplified approach to measure expected credit losses which uses a lifetime
expected loss allowance for all trade receivables. To measure the expected credit losses, trade receivables have
been analysed on an individual basis. The expected loss rates are based on the payment profiles of sales over a
period of 24 month before 31 December 2022 or 31 December 2021 respectively and the corresponding
historical credit losses experienced within this period. The historical loss rates are adjusted to reflect current and
forward-looking information on macroeconomic factors affecting the ability of the customers to settle the
receivables.
Based on this analysis, the Company concluded that all trade receivables are paid within 60 days and no
receivables were written off in the period analysed, except for a single trade receivable of a single counterparty
at the amount of BGN 172 thousand, which was partially impaired on individual basis as at 31 December 2022,
with loss allowance amounting to BGN 69 thousand.
Cash and cash equivalents are also subject to the impairment requirements of IFRS 9, but the impairment loss
was immaterial.
Trade receivables and contract assets are written off when there is no reasonable expectation of recovery.
Indicators that there is no reasonable expectation of recovery include, amongst others, the failure of a debtor to
engage in a repayment plan with the group, and a failure to make contractual payments for a period of greater
than 120 days past due. Impairment losses on trade receivables and contract assets are presented as net
impairment losses within operating profit. Subsequent recoveries of amounts previously written off are credited
against the same line item.
Capital management
The primary objective of the Company’s capital management is to ensure that it maintains a strong credit rating
and healthy capital ratios to support its business and maximise owner’s value.
The Company manages its capital structure and makes adjustments to it in light of changes in economic
conditions. To maintain or adjust the capital structure, the Company may adjust the payment of dividends to the
shareholders, to redeem its treasury shares, to increase or decrease its share capital, by decision of the
shareholders. No changes were made in the objectives, policies or processes for managing the Company’s capital
during 2022 and 2021.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
At 31 December 2022
Financial statements in English are translation from the original in Bulgarian 34
19. Financial risk management objectives and policy (continued)
31.12.2022 31.12.2021
BGN’000 BGN’000
Existing customers
Trade receivables 197 1,322
Receivables from related parties 4,023 4,397
Cash and cash equivalents
A- (Fitch) 280 828
BBB (BCRA) 209 342
Impairment of financial assets
The Company has the following financial assets, which are subject to the expected credit loss model:
Trade receivables
Cash and cash equivalents
The Company applies the IFRS 9 simplified approach to measure expected credit losses which uses a lifetime
expected loss allowance for all trade receivables. To measure the expected credit losses, trade receivables have
been analysed on an individual basis. The expected loss rates are based on the payment profiles of sales over a
period of 24 month before 31 December 2022 or 31 December 2021 respectively and the corresponding
historical credit losses experienced within this period. The historical loss rates are adjusted to reflect current and
forward-looking information on macroeconomic factors affecting the ability of the customers to settle the
receivables.
Based on this analysis, the Company concluded that all trade receivables are paid within 60 days and no
receivables were written off in the period analysed, except for a single trade receivable of a single counterparty
at the amount of BGN 172 thousand, which was partially impaired on individual basis as at 31 December 2022,
with loss allowance amounting to BGN 69 thousand.
Cash and cash equivalents are also subject to the impairment requirements of IFRS 9, but the impairment loss
was immaterial.
Trade receivables and contract assets are written off when there is no reasonable expectation of recovery.
Indicators that there is no reasonable expectation of recovery include, amongst others, the failure of a debtor to
engage in a repayment plan with the group, and a failure to make contractual payments for a period of greater
than 120 days past due. Impairment losses on trade receivables and contract assets are presented as net
impairment losses within operating profit. Subsequent recoveries of amounts previously written off are credited
against the same line item.
Capital management
The primary objective of the Company’s capital management is to ensure that it maintains a strong credit rating
and healthy capital ratios to support its business and maximise owner’s value.
The Company manages its capital structure and makes adjustments to it in light of changes in economic
conditions. To maintain or adjust the capital structure, the Company may adjust the payment of dividends to the
shareholders, to redeem its treasury shares, to increase or decrease its share capital, by decision of the
shareholders. No changes were made in the objectives, policies or processes for managing the Company’s capital
during 2022 and 2021.
KORADO-BULGARIA AD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
At 31 December 2022
Financial statements in English are translation from the original in Bulgarian 35
19. Financial risk management objectives and policy (continued)
Impairment of financial assets (continued)
The Company monitors its equity through the realized financial result for the reporting period ending 31
December 2022 and 31 December 2021, as follows:
2022 2021
BGN’000 BGN’000
Net profit 4,382 4,759
20. Reconciliation of the movements in liabilities with cash flows from financing activity
Borrowings Lease
liabilities
Retained
earnings
Total
BGN’000 BGN’000 BGN’000 BGN’000
At 1 January 2021 3,716 212 7,451 11,389
Cash flows - (96) (3,819) (3,915)
New lease contracts - 45 - 45
Interest expense 65 5 - 70
Profit for the year - - 4,759 4,759
Non-cash transactions (65) - - (65)
At 31 December 2021 3,716 166 8,391 12,273
At 1 January 2022 3,716 166 8,391 12,273
Cash flows 2,347 (196) (3,819) (1,660)
New lease contracts - 400 - 400
Interest expense 85 7 - 92
Profit for the year - - 4,382 4,382
Non-cash transactions (49) - - (49)
Interest payables presented in current
liabilities to related parties (36) - - (36)
At 31 December 2022 6,099 377 8,954 15,394
21. Events after the reporting date
No events have occurred after the reporting date, which require adjustments and/or disclosures in the Company’s
financial statements.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
At 31 December 2022
Financial statements in English are translation from the original in Bulgarian 35
19. Financial risk management objectives and policy (continued)
Impairment of financial assets (continued)
The Company monitors its equity through the realized financial result for the reporting period ending 31
December 2022 and 31 December 2021, as follows:
2022 2021
BGN’000 BGN’000
Net profit 4,382 4,759
20. Reconciliation of the movements in liabilities with cash flows from financing activity
Borrowings Lease
liabilities
Retained
earnings
Total
BGN’000 BGN’000 BGN’000 BGN’000
At 1 January 2021 3,716 212 7,451 11,389
Cash flows - (96) (3,819) (3,915)
New lease contracts - 45 - 45
Interest expense 65 5 - 70
Profit for the year - - 4,759 4,759
Non-cash transactions (65) - - (65)
At 31 December 2021 3,716 166 8,391 12,273
At 1 January 2022 3,716 166 8,391 12,273
Cash flows 2,347 (196) (3,819) (1,660)
New lease contracts - 400 - 400
Interest expense 85 7 - 92
Profit for the year - - 4,382 4,382
Non-cash transactions (49) - - (49)
Interest payables presented in current
liabilities to related parties (36) - - (36)
At 31 December 2022 6,099 377 8,954 15,394
21. Events after the reporting date
No events have occurred after the reporting date, which require adjustments and/or disclosures in the Company’s
financial statements.
KORADO-BULGARIA AD
DECLARATION BY THE RESPONSIBLE PERSONS
At 31 December 2022
36
D E C L A R A T I O N
under Art. 100m, paragraph 4, item 4of POSA
The undersigned, JIRI REZNICEK, Executive Director, and Silviya Stefanova, Head of Finance Department
and preparer of the financial statements of KORADO-Bulgaria AD, town of Strazhitsa,
HEREBY DECLARE that to the best of our knowledge and belief:
1. The set of financial statements as at 31 December 2022 drawn up in accordance with the applicable
accounting standards give a true and fair view of the assets, liabilities, financial position and financial
performance of the Company;
2. The management activity report includes a fair review of the development and the performance of the
business and the position of the Company, together with a description of the principal risks and
uncertainties that the Company faces.
DECLARANTS:
Head of Finance Department: Executive Director:
Silviya Stefanova Eng. JIRI REZNICEK
DECLARATION BY THE RESPONSIBLE PERSONS
At 31 December 2022
36
D E C L A R A T I O N
under Art. 100m, paragraph 4, item 4of POSA
The undersigned, JIRI REZNICEK, Executive Director, and Silviya Stefanova, Head of Finance Department
and preparer of the financial statements of KORADO-Bulgaria AD, town of Strazhitsa,
HEREBY DECLARE that to the best of our knowledge and belief:
1. The set of financial statements as at 31 December 2022 drawn up in accordance with the applicable
accounting standards give a true and fair view of the assets, liabilities, financial position and financial
performance of the Company;
2. The management activity report includes a fair review of the development and the performance of the
business and the position of the Company, together with a description of the principal risks and
uncertainties that the Company faces.
DECLARANTS:
Head of Finance Department: Executive Director:
Silviya Stefanova Eng. JIRI REZNICEK
Deloitte Audit OOD
UIC 121145199
103, Al. Stambolijski Blvd.
Sofia 1303
Bulgaria
Tel: +359 (2) 80 23 300
Fax: +359 (2) 80 23 350
www.deloitte.bg
Делойт Одит ООД
ЕИК 121145199
бул.”Ал.Стамболийски” 103
София 1303
България
Tел : +359 (2) 80 23 300
Факс : +359 (2) 80 23 350
www.deloitte.bg
Делойт се отнася към едно или повече дружества - членове на Делойт Туш Томацу Лимитид („ДТТЛ“ ), както и към глобалната мрежа от дружества – членове и
свързаните с тях дружества (заедно наричани „организацията на Делойт). ДТТЛ (наричано също “Делойт Глобъл“) и всяко дружество– член и неговите
свързани дружества са юридически самостоятелни и независими лица, които не могат да поемат задължения или да се обвързват взаимно по отношение на
трети страни. ДТТЛ и всяко дружество член на ДТТЛ и свързаните с него дружества са отговорни единствено и само за своите собствени действия и
бездействия, но не и за тези на останалите. ДТТЛ не предоставя услуги на клиенти. Моля, посетете www.deloitte.com/about, за да научите повече.
Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited (“DTTL”), its global network of member firms, and their related entities (collectively, the “Deloitte
organization”). DTTL (also referred to as “Deloitte Global”) and each of its member firms and related entities are legally separate and independent entities, which cannot
obligate or bind each other in respect of third parties. DTTL and each DTTL member firm and related entity is liable only for its own acts and omissions, and not those of
each other. DTTL does not provide services to clients. Please see www.deloitte.com/about to learn more.
This document is a translation of the original Bulgarian text,
in case of divergence the Bulgarian text is prevailing.
INDEPENDENT AUDITOR’S REPORT
To the shareholders of Korado-Bulgaria AD
REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS
Opinion
We have audited the accompanying financial statements of Korado-Bulgaria AD (the “Company”),
which comprise the statement of financial position as at December 31, 2022, and the statement of
comprehensive income, the statement of changes in equity and the statement of cash flows for the year
then ended, and notes to the financial statements, including significant accounting policies and other
explanatory information.
In our opinion, the accompanying financial statements present fairly, in all material respects, the
financial position of the Company as at December 31, 2022, and its financial performance and its cash
flows for the year then ended in accordance with International Financial Reporting Standards ("IFRS"),
as adopted by the European Union (“EU”).
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (ISAs). Our
responsibilities under those standards are further described in the Auditor’s Responsibilities for the
Audit of the Financial Statements section of our report. We are independent of the Company in
accordance with the International Code of Ethics for Professional Accountants (including International
Independence Standards) of the International Ethics Standards Board for Accountants (IESBA Code)
together with the ethical requirements of the Independent Financial Audit Act (IFAA) that are relevant
to our audit of the financial statements in Bulgaria, and we have fulfilled our other ethical responsibilities
in accordance with the IESBA Code and the requirements of IFAA. We believe that the audit evidence
we have obtained is sufficient and appropriate to provide a basis for our opinion.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our
audit of the financial statements of the current period. These matters were addressed in the context of
our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters.
UIC 121145199
103, Al. Stambolijski Blvd.
Sofia 1303
Bulgaria
Tel: +359 (2) 80 23 300
Fax: +359 (2) 80 23 350
www.deloitte.bg
Делойт Одит ООД
ЕИК 121145199
бул.”Ал.Стамболийски” 103
София 1303
България
Tел : +359 (2) 80 23 300
Факс : +359 (2) 80 23 350
www.deloitte.bg
Делойт се отнася към едно или повече дружества - членове на Делойт Туш Томацу Лимитид („ДТТЛ“ ), както и към глобалната мрежа от дружества – членове и
свързаните с тях дружества (заедно наричани „организацията на Делойт). ДТТЛ (наричано също “Делойт Глобъл“) и всяко дружество– член и неговите
свързани дружества са юридически самостоятелни и независими лица, които не могат да поемат задължения или да се обвързват взаимно по отношение на
трети страни. ДТТЛ и всяко дружество член на ДТТЛ и свързаните с него дружества са отговорни единствено и само за своите собствени действия и
бездействия, но не и за тези на останалите. ДТТЛ не предоставя услуги на клиенти. Моля, посетете www.deloitte.com/about, за да научите повече.
Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited (“DTTL”), its global network of member firms, and their related entities (collectively, the “Deloitte
organization”). DTTL (also referred to as “Deloitte Global”) and each of its member firms and related entities are legally separate and independent entities, which cannot
obligate or bind each other in respect of third parties. DTTL and each DTTL member firm and related entity is liable only for its own acts and omissions, and not those of
each other. DTTL does not provide services to clients. Please see www.deloitte.com/about to learn more.
This document is a translation of the original Bulgarian text,
in case of divergence the Bulgarian text is prevailing.
INDEPENDENT AUDITOR’S REPORT
To the shareholders of Korado-Bulgaria AD
REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS
Opinion
We have audited the accompanying financial statements of Korado-Bulgaria AD (the “Company”),
which comprise the statement of financial position as at December 31, 2022, and the statement of
comprehensive income, the statement of changes in equity and the statement of cash flows for the year
then ended, and notes to the financial statements, including significant accounting policies and other
explanatory information.
In our opinion, the accompanying financial statements present fairly, in all material respects, the
financial position of the Company as at December 31, 2022, and its financial performance and its cash
flows for the year then ended in accordance with International Financial Reporting Standards ("IFRS"),
as adopted by the European Union (“EU”).
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (ISAs). Our
responsibilities under those standards are further described in the Auditor’s Responsibilities for the
Audit of the Financial Statements section of our report. We are independent of the Company in
accordance with the International Code of Ethics for Professional Accountants (including International
Independence Standards) of the International Ethics Standards Board for Accountants (IESBA Code)
together with the ethical requirements of the Independent Financial Audit Act (IFAA) that are relevant
to our audit of the financial statements in Bulgaria, and we have fulfilled our other ethical responsibilities
in accordance with the IESBA Code and the requirements of IFAA. We believe that the audit evidence
we have obtained is sufficient and appropriate to provide a basis for our opinion.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our
audit of the financial statements of the current period. These matters were addressed in the context of
our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters.
2
Key audit matter How our audit addressed the key audit matter
Revenue Recognition
See Notes 1.2 (b) and 3.1 to the financial
statements
In this area, our audit procedures included,
among others:
The Company had one major revenue stream in
2022 consisting of sale of finished products and
goods for resale, i.e. household heating radiators,
amounting to BGN 55,133 thousand.
Sales are recognized when control of the products
has transferred, being when the products are
delivered to the client, the client has full discretion
over the channel and price to sell the products, and
there is no unfulfilled obligation that could affect
the client’s acceptance of the products.
The finished products and goods for resale are
often sold with retrospective volume discounts
based on the aggregate sales over a 12 months
period. Revenue from these sales is recognized
based on the price specified in the contract, net of
the estimated volume discounts.
The majority of the revenue is derived from a
limited number of customers, who settle their due
balances within agreed terms. The sales to the
parent company represent approximately 85% of
total revenue. This structure of the Company’s
sales is driven by the business of the group the
Company is part of, where trading is centralized.
The Company is focused on the production of one
of the major products sold by the group.
The remuneration of the Management of the
Company is related to a certain extend to the
achievement of pre-defined results. There is a risk
that the management could influence the financial
statements to report better results. The financial
result could be potentially influenced by the
management through revenue recognition.
Due to the significance of the circumstances set out
above that: (a) revenue recognition is an area of
significant risk and requires significant time and
resource to audit; and (b) its significance as a
whole for the financial statements of the Company,
we have considered this matter as a key audit
matter.
• Inquiries and obtaining of an understanding of
the Company's process of revenue recognition.
• Review and assessment of the adequacy and
the consistency of application of the revenue
recognition policy of the Company. Our audit
procedures included also testing the adequacy
of the adopted accounting policy for revenue
recognition in accordance with the applicable
standards.
• Assessment of design and implementation of
key controls over the revenue recognition
process. Tests of operating effectiveness of
relevant controls, with specific focus on the
key control over matching dispatch notes,
issued invoices and cash receipts, as well as
over the confirmation of the documents
supporting credit notes, including those for
discounts.
Based on the procedures set out above, we
developed tailored audit procedures to enable us to
address the risk of material misstatement
associated with the revenue recognition, including
that management could influence the revenue
recognition.
Our substantive procedures consisted mainly of
confirming sales transactions for the year by
sending confirmation letters. With this procedure,
based on the received responses we confirmed a
sample of the annual revenues from selected
clients.
We have tested selected revenue transactions
realized close after the year-end in order to assess
the recognition of revenue in the correct
accounting period.
We assessed the relevance and adequacy of the
disclosures in the Company's financial statements
related to revenue recognition and reporting.
Key audit matter How our audit addressed the key audit matter
Revenue Recognition
See Notes 1.2 (b) and 3.1 to the financial
statements
In this area, our audit procedures included,
among others:
The Company had one major revenue stream in
2022 consisting of sale of finished products and
goods for resale, i.e. household heating radiators,
amounting to BGN 55,133 thousand.
Sales are recognized when control of the products
has transferred, being when the products are
delivered to the client, the client has full discretion
over the channel and price to sell the products, and
there is no unfulfilled obligation that could affect
the client’s acceptance of the products.
The finished products and goods for resale are
often sold with retrospective volume discounts
based on the aggregate sales over a 12 months
period. Revenue from these sales is recognized
based on the price specified in the contract, net of
the estimated volume discounts.
The majority of the revenue is derived from a
limited number of customers, who settle their due
balances within agreed terms. The sales to the
parent company represent approximately 85% of
total revenue. This structure of the Company’s
sales is driven by the business of the group the
Company is part of, where trading is centralized.
The Company is focused on the production of one
of the major products sold by the group.
The remuneration of the Management of the
Company is related to a certain extend to the
achievement of pre-defined results. There is a risk
that the management could influence the financial
statements to report better results. The financial
result could be potentially influenced by the
management through revenue recognition.
Due to the significance of the circumstances set out
above that: (a) revenue recognition is an area of
significant risk and requires significant time and
resource to audit; and (b) its significance as a
whole for the financial statements of the Company,
we have considered this matter as a key audit
matter.
• Inquiries and obtaining of an understanding of
the Company's process of revenue recognition.
• Review and assessment of the adequacy and
the consistency of application of the revenue
recognition policy of the Company. Our audit
procedures included also testing the adequacy
of the adopted accounting policy for revenue
recognition in accordance with the applicable
standards.
• Assessment of design and implementation of
key controls over the revenue recognition
process. Tests of operating effectiveness of
relevant controls, with specific focus on the
key control over matching dispatch notes,
issued invoices and cash receipts, as well as
over the confirmation of the documents
supporting credit notes, including those for
discounts.
Based on the procedures set out above, we
developed tailored audit procedures to enable us to
address the risk of material misstatement
associated with the revenue recognition, including
that management could influence the revenue
recognition.
Our substantive procedures consisted mainly of
confirming sales transactions for the year by
sending confirmation letters. With this procedure,
based on the received responses we confirmed a
sample of the annual revenues from selected
clients.
We have tested selected revenue transactions
realized close after the year-end in order to assess
the recognition of revenue in the correct
accounting period.
We assessed the relevance and adequacy of the
disclosures in the Company's financial statements
related to revenue recognition and reporting.
3
Information Other than the Financial Statements and Auditor’s Report Thereon
Management Board of the Company (“Management”) is responsible for the other information. The other
information comprises the annual report on activities, the corporate governance statement and report on
the implementation of the remuneration policy, prepared by the management in accordance with Chapter
Seven of the Accountancy Act, but does not include the financial statements and our auditor’s report
thereon.
Our opinion on the financial statements does not cover the other information and we do not express any
form of assurance conclusion thereon, unless it is not specifically stated in our auditor’s report and to
the extent it is specifically stated.
In connection with our audit of the financial statements, our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent with the
financial statements or our knowledge obtained in the audit or otherwise appears to be materially
misstated. If, based on the work we have performed, we conclude that there is a material misstatement
of this other information, we are required to report that fact.
We have nothing to report in this regard.
Responsibilities of Management and Those Charged with Governance for the Financial
Statements
Management is responsible for the preparation and fair presentation of the financial statements in
accordance with IFRS as adopted by the EU, and for such internal control as management determines is
necessary to enable the preparation of financial statements that are free from material misstatement,
whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing 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 management either intends to liquidate the Company or to
cease operations, or has no realistic alternative but to do so.
Supervisory Board and Audit Committee of the Company (“Those charged with governance”) are
responsible for overseeing the Company’s financial reporting process.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with ISAs will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken on the
basis of these financial statements.
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 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.
Information Other than the Financial Statements and Auditor’s Report Thereon
Management Board of the Company (“Management”) is responsible for the other information. The other
information comprises the annual report on activities, the corporate governance statement and report on
the implementation of the remuneration policy, prepared by the management in accordance with Chapter
Seven of the Accountancy Act, but does not include the financial statements and our auditor’s report
thereon.
Our opinion on the financial statements does not cover the other information and we do not express any
form of assurance conclusion thereon, unless it is not specifically stated in our auditor’s report and to
the extent it is specifically stated.
In connection with our audit of the financial statements, our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent with the
financial statements or our knowledge obtained in the audit or otherwise appears to be materially
misstated. If, based on the work we have performed, we conclude that there is a material misstatement
of this other information, we are required to report that fact.
We have nothing to report in this regard.
Responsibilities of Management and Those Charged with Governance for the Financial
Statements
Management is responsible for the preparation and fair presentation of the financial statements in
accordance with IFRS as adopted by the EU, and for such internal control as management determines is
necessary to enable the preparation of financial statements that are free from material misstatement,
whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing 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 management either intends to liquidate the Company or to
cease operations, or has no realistic alternative but to do so.
Supervisory Board and Audit Committee of the Company (“Those charged with governance”) are
responsible for overseeing the Company’s financial reporting process.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with ISAs will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken on the
basis of these financial statements.
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 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.
4
• 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 Company's internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
• Conclude on the appropriateness of management’s 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 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 auditor’s report to the related disclosures in the 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 auditor’s report. However, future events or conditions may cause the
Company to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the financial statements, including
the disclosures, and whether the financial statements represent the underlying transactions and
events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned
scope and timing of the audit and significant audit findings, including any significant deficiencies in
internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant
ethical requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, related
safeguards.
From the matters communicated with those charged with governance, we determine those matters that
were of most significance in the audit of the financial statements of the current period and are therefore
the key audit matters. We describe these matters in our auditor’s report unless law or regulation
precludes public disclosure about the matter or when, in extremely rare circumstances, we determine
that a matter should not be communicated in our report because the adverse consequences of doing so
would reasonably be expected to outweigh the public interest benefits of such communication.
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
Reporting in relation to the compliance with the electronic format of the financial statements,
included in the annual financial report on activities under Art. 100m, para 4 of the Public Offering
of Securities Act (POSA) with the requirements of the ESEF Regulation
In addition to our reporting responsibilities according to ISAs described in the section above “Auditor’s
Responsibilities for the Audit of the Financial Statements ”, we performed the procedures in accordance
with the "Guidelines on the issuing of audit opinion with respect to the application of the European
Single Electronic Format (ESEF) to the financial statements of companies which securities are admitted
to trading on a regulated market in the European Union (EU)" by the Professional Organization of the
Registered Auditors in Bulgaria - Institute of Certified Public Accountants (ICPA) ". These procedures
are related to the verification of the structure and whether the human readable part of this electronic
format corresponds to the audited financial statements and issuing an opinion on the compliance of the
electronic format of the financial statements of Korado-Bulgaria AD for the year ending on December
31, 2022, attached in the electronic file "8945006GNF19M54P6947-20221231-EN-SEP.xhtml.zip",
with the requirements of the Commission Delegated Regulation (EU) 2019/815 from 17 December 2018
supplementing Directive 2004/109 / EC of the European Parliament and of the Council by means of
regulatory technical standards to define the European Single Electronic Format for reporting ("ESEF
Regulation"). Based on these requirements, the electronic format of the financial statements included in
the annual financial report on activities under Art. 100m, para. 4 of POSA, should be presented in
XHTML format.
• 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 Company's internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
• Conclude on the appropriateness of management’s 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 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 auditor’s report to the related disclosures in the 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 auditor’s report. However, future events or conditions may cause the
Company to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the financial statements, including
the disclosures, and whether the financial statements represent the underlying transactions and
events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned
scope and timing of the audit and significant audit findings, including any significant deficiencies in
internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant
ethical requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, related
safeguards.
From the matters communicated with those charged with governance, we determine those matters that
were of most significance in the audit of the financial statements of the current period and are therefore
the key audit matters. We describe these matters in our auditor’s report unless law or regulation
precludes public disclosure about the matter or when, in extremely rare circumstances, we determine
that a matter should not be communicated in our report because the adverse consequences of doing so
would reasonably be expected to outweigh the public interest benefits of such communication.
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
Reporting in relation to the compliance with the electronic format of the financial statements,
included in the annual financial report on activities under Art. 100m, para 4 of the Public Offering
of Securities Act (POSA) with the requirements of the ESEF Regulation
In addition to our reporting responsibilities according to ISAs described in the section above “Auditor’s
Responsibilities for the Audit of the Financial Statements ”, we performed the procedures in accordance
with the "Guidelines on the issuing of audit opinion with respect to the application of the European
Single Electronic Format (ESEF) to the financial statements of companies which securities are admitted
to trading on a regulated market in the European Union (EU)" by the Professional Organization of the
Registered Auditors in Bulgaria - Institute of Certified Public Accountants (ICPA) ". These procedures
are related to the verification of the structure and whether the human readable part of this electronic
format corresponds to the audited financial statements and issuing an opinion on the compliance of the
electronic format of the financial statements of Korado-Bulgaria AD for the year ending on December
31, 2022, attached in the electronic file "8945006GNF19M54P6947-20221231-EN-SEP.xhtml.zip",
with the requirements of the Commission Delegated Regulation (EU) 2019/815 from 17 December 2018
supplementing Directive 2004/109 / EC of the European Parliament and of the Council by means of
regulatory technical standards to define the European Single Electronic Format for reporting ("ESEF
Regulation"). Based on these requirements, the electronic format of the financial statements included in
the annual financial report on activities under Art. 100m, para. 4 of POSA, should be presented in
XHTML format.
5
The Management of the Company is responsible for the application of the requirements of the ESEF
Regulation in preparing the electronic format of the financial statements in XHTML.
Our report covers only the electronic format of the financial statements, attached in the electronic file
"8945006GNF19M54P6947-20221231-EN-SEP.xhtml.zip" and does not cover the other information,
included in the annual financial report on activities under Art. 100m, para. 4 of the POSA.
Based on the procedures performed in our opinion, the electronic format of the financial statements of
the Company for the year ended December 31, 2022, contained in the attached electronic file
" 8945006GNF19M54P6947-20221231-EN-SEP.xhtml .zip" , has been prepared in all material respects
in accordance with the requirements of the ESEF Regulation.
Additional matters, required to be reported by the Accountancy Act and Public Offering of
Securities Act
In addition to our reporting responsibilities according to ISAs described in section “Information Other
than the Financial Statements and Auditor’s Report Thereon”, with respect to the annual report on
activities, the corporate governance statement and report on the implementation of the remuneration
policy, we have also performed the procedures, together with the required under ISA, in accordance
with the "Guidelines regarding new extended reports and communication by the auditor" of the
Professional Organization of Registered Auditors in Bulgaria - Institute of Certified Public Accountants
(ICPA). These procedures include tests over the existence, form and content of the other information in
order to assist us in forming an opinion as to whether the other information includes the disclosures and
reporting as required by Chapter Seven of the Accountancy Act and the Public Offering of Securities
Act (Art. 100m, paragraph 10 of POSA in relation to Art. 100m, paragraph 8, p. 3 and 4 of POSA, as
well as Art. 100m, paragraph 13 of POSA in relation to Art. 116c, paragraph 1 of POSA), applicable in
Bulgaria.
Opinion under Art. 37, paragraph 6 of the Accountancy Act
Based on the procedures performed, in our opinion:
• The information included in the annual report on the activities for the financial year for which
the financial statements have been prepared, is consistent with the financial statements.
• The annual report on the activities has been prepared in accordance with the requirements of
Chapter Seven of the Accountancy Act and of Art. 100m, paragraph 7 of the Public Offering of
Securities Act.
• The information required by Chapter Seven of the Accountancy Act and Art. 100m, paragraph
8 of the Public Offering of Securities Act is presented in the corporate governance statement
covering the financial year for which the financial statements have been prepared.
• The report on the implementation of the remuneration policy, covering the financial year for
which the financial statements have been prepared, has been provided and meets the
requirements defined in the Ordinance referred to in Art. 116c, paragraph 1 of the Public
Offering of Securities Act.
The Management of the Company is responsible for the application of the requirements of the ESEF
Regulation in preparing the electronic format of the financial statements in XHTML.
Our report covers only the electronic format of the financial statements, attached in the electronic file
"8945006GNF19M54P6947-20221231-EN-SEP.xhtml.zip" and does not cover the other information,
included in the annual financial report on activities under Art. 100m, para. 4 of the POSA.
Based on the procedures performed in our opinion, the electronic format of the financial statements of
the Company for the year ended December 31, 2022, contained in the attached electronic file
" 8945006GNF19M54P6947-20221231-EN-SEP.xhtml .zip" , has been prepared in all material respects
in accordance with the requirements of the ESEF Regulation.
Additional matters, required to be reported by the Accountancy Act and Public Offering of
Securities Act
In addition to our reporting responsibilities according to ISAs described in section “Information Other
than the Financial Statements and Auditor’s Report Thereon”, with respect to the annual report on
activities, the corporate governance statement and report on the implementation of the remuneration
policy, we have also performed the procedures, together with the required under ISA, in accordance
with the "Guidelines regarding new extended reports and communication by the auditor" of the
Professional Organization of Registered Auditors in Bulgaria - Institute of Certified Public Accountants
(ICPA). These procedures include tests over the existence, form and content of the other information in
order to assist us in forming an opinion as to whether the other information includes the disclosures and
reporting as required by Chapter Seven of the Accountancy Act and the Public Offering of Securities
Act (Art. 100m, paragraph 10 of POSA in relation to Art. 100m, paragraph 8, p. 3 and 4 of POSA, as
well as Art. 100m, paragraph 13 of POSA in relation to Art. 116c, paragraph 1 of POSA), applicable in
Bulgaria.
Opinion under Art. 37, paragraph 6 of the Accountancy Act
Based on the procedures performed, in our opinion:
• The information included in the annual report on the activities for the financial year for which
the financial statements have been prepared, is consistent with the financial statements.
• The annual report on the activities has been prepared in accordance with the requirements of
Chapter Seven of the Accountancy Act and of Art. 100m, paragraph 7 of the Public Offering of
Securities Act.
• The information required by Chapter Seven of the Accountancy Act and Art. 100m, paragraph
8 of the Public Offering of Securities Act is presented in the corporate governance statement
covering the financial year for which the financial statements have been prepared.
• The report on the implementation of the remuneration policy, covering the financial year for
which the financial statements have been prepared, has been provided and meets the
requirements defined in the Ordinance referred to in Art. 116c, paragraph 1 of the Public
Offering of Securities Act.
6
Opinion under Art. 100m, paragraph 10 in relation to Art. 100m, paragraph 8, p. 3 and 4 of the
Public Offering of Securities Act
Based on the procedures performed and as a result of the acquired knowledge and understanding of the
Company and the environment in which it operates, acquired during our audit, in our opinion, the
description of the main features of the Company’s internal control and risk management systems in
relation to the financial reporting process as part of the annual report on activities (as element of the
content of the corporate governance statement) and the information under Art. 10, paragraph 1, letter
"c", "d", "f", "h" and "i" of the Directive 2004/25/EC of the European Parliament and of the EU Council
of April 21, 2004 related to takeover bids, included in the corporate governance statement do not contain
cases of material misrepresentations.
Additional reporting in relation to the audit of the financial statements under Art. 100m,
paragraph 4, p. 3 of the Public Offering of Securities Act
Reporting in relation to Art. 100m, paragraph 4, p. 3, l. "b" of the Public Offering of Securities Act
Information on related party transactions is disclosed in Note 16 to the accompanying financial
statements. Based on the procedures performed on related party transactions in the context of our audit
of the financial statements as a whole, nothing has come to our attention indicating that the related party
transactions are not disclosed in the accompanying financial statements for the year ended December
31, 2022, in all material respects, in accordance with the requirements of IAS 24 Related Party
Disclosures. We have considered the results of our audit procedures on related party transactions in
forming our opinion on the financial statements as a whole and not for the purpose of providing a
separate opinion on the related party transactions.
Reporting in relation to Art. 100m, paragraph 4, p. 3, l. "c" of the Public Offering of Securities Act
Our responsibilities for the audit of the financial statements described in section “Auditor’s
Responsibilities for the Audit of the Financial Statements” include evaluating whether the financial
statements represent the underlying transactions and events in a manner that achieves fair presentation.
Based on the procedures performed on the material transactions underlying the financial statements for
the year ended December 31, 2022, nothing has come to our attention indicating any instances of
material unfair presentation and disclosure under the applicable IFRS as adopted by the European Union.
We have considered the results of our audit procedures on the material transactions underlying the
financial statements in forming our opinion on the financial statements as a whole and not for the purpose
of providing a separate opinion on these material transactions.
Reporting in accordance with Art. 10 of Regulation (EU) No 537/2014 in connection with the
requirements of Art. 59 of the Independent Financial Audit Act
In accordance with the requirements of the Independent Financial Audit Act in connection with Art. 10
of Regulation (EU) No 537/2014, we hereby additionally report the information stated below.
• Deloitte Audit OOD was appointed as a statutory auditor of the financial statements of the
Company for the year ended December 31, 2022 by the general meeting of shareholders held
on May 18, 2022 for a period of one year.
• The audit of the financial statements of the Company for the year ended December 31, 2022
represents second total consecutive statutory audit engagement for that entity carried out by us.
• We hereby confirm that the audit opinion expressed by us is consistent with the additional report
dated March 13, 2023, provided to the Company’s audit committee, in compliance with the
requirements of Art. 60 of the Independent Financial Audit Act.
• We hereby confirm that no prohibited non-audit services referred to in Art. 64 of the
Independent Financial Audit Act were provided.
Opinion under Art. 100m, paragraph 10 in relation to Art. 100m, paragraph 8, p. 3 and 4 of the
Public Offering of Securities Act
Based on the procedures performed and as a result of the acquired knowledge and understanding of the
Company and the environment in which it operates, acquired during our audit, in our opinion, the
description of the main features of the Company’s internal control and risk management systems in
relation to the financial reporting process as part of the annual report on activities (as element of the
content of the corporate governance statement) and the information under Art. 10, paragraph 1, letter
"c", "d", "f", "h" and "i" of the Directive 2004/25/EC of the European Parliament and of the EU Council
of April 21, 2004 related to takeover bids, included in the corporate governance statement do not contain
cases of material misrepresentations.
Additional reporting in relation to the audit of the financial statements under Art. 100m,
paragraph 4, p. 3 of the Public Offering of Securities Act
Reporting in relation to Art. 100m, paragraph 4, p. 3, l. "b" of the Public Offering of Securities Act
Information on related party transactions is disclosed in Note 16 to the accompanying financial
statements. Based on the procedures performed on related party transactions in the context of our audit
of the financial statements as a whole, nothing has come to our attention indicating that the related party
transactions are not disclosed in the accompanying financial statements for the year ended December
31, 2022, in all material respects, in accordance with the requirements of IAS 24 Related Party
Disclosures. We have considered the results of our audit procedures on related party transactions in
forming our opinion on the financial statements as a whole and not for the purpose of providing a
separate opinion on the related party transactions.
Reporting in relation to Art. 100m, paragraph 4, p. 3, l. "c" of the Public Offering of Securities Act
Our responsibilities for the audit of the financial statements described in section “Auditor’s
Responsibilities for the Audit of the Financial Statements” include evaluating whether the financial
statements represent the underlying transactions and events in a manner that achieves fair presentation.
Based on the procedures performed on the material transactions underlying the financial statements for
the year ended December 31, 2022, nothing has come to our attention indicating any instances of
material unfair presentation and disclosure under the applicable IFRS as adopted by the European Union.
We have considered the results of our audit procedures on the material transactions underlying the
financial statements in forming our opinion on the financial statements as a whole and not for the purpose
of providing a separate opinion on these material transactions.
Reporting in accordance with Art. 10 of Regulation (EU) No 537/2014 in connection with the
requirements of Art. 59 of the Independent Financial Audit Act
In accordance with the requirements of the Independent Financial Audit Act in connection with Art. 10
of Regulation (EU) No 537/2014, we hereby additionally report the information stated below.
• Deloitte Audit OOD was appointed as a statutory auditor of the financial statements of the
Company for the year ended December 31, 2022 by the general meeting of shareholders held
on May 18, 2022 for a period of one year.
• The audit of the financial statements of the Company for the year ended December 31, 2022
represents second total consecutive statutory audit engagement for that entity carried out by us.
• We hereby confirm that the audit opinion expressed by us is consistent with the additional report
dated March 13, 2023, provided to the Company’s audit committee, in compliance with the
requirements of Art. 60 of the Independent Financial Audit Act.
• We hereby confirm that no prohibited non-audit services referred to in Art. 64 of the
Independent Financial Audit Act were provided.
7
• We hereby confirm that in conducting the audit we have remained independent of the Company.
• For the period to which our statutory audit refers, we have provided to the Company, in addition
to the statutory audit, the following services which have not been disclosed in Company’s
management report or financial statements:
o Audit of the group reporting package as of December 31, 2022 of Korado-Bulgaria AD,
prepared in accordance with the accounting policies of Korado A.S. Group, Czech
Republic, based on IFRS, in accordance with ISA.
Deloitte Audit OOD
Reg. No 033 in the Register of the registered auditors
under Art. 20 of Independent Financial Audit Act
Rositsa Boteva
Registered Auditor, in charge of the audit
Statutory Manager
Deloitte Audit OOD
103, Al. Stambolijski Blvd.
1303 Sofia, Bulgaria
• We hereby confirm that in conducting the audit we have remained independent of the Company.
• For the period to which our statutory audit refers, we have provided to the Company, in addition
to the statutory audit, the following services which have not been disclosed in Company’s
management report or financial statements:
o Audit of the group reporting package as of December 31, 2022 of Korado-Bulgaria AD,
prepared in accordance with the accounting policies of Korado A.S. Group, Czech
Republic, based on IFRS, in accordance with ISA.
Deloitte Audit OOD
Reg. No 033 in the Register of the registered auditors
under Art. 20 of Independent Financial Audit Act
Rositsa Boteva
Registered Auditor, in charge of the audit
Statutory Manager
Deloitte Audit OOD
103, Al. Stambolijski Blvd.
1303 Sofia, Bulgaria
Deloitte Audit OOD
UIC 121145199
103, Al. Stambolijski Blvd.
Sofia 1303
Bulgaria
Tel: +359 (2) 80 23 300
Fax: +359 (2) 80 23 350
www.deloitte.bg
Делойт Одит ООД
ЕИК 121145199
бул.”Ал.Стамболийски” 103
София 1303
България
Tел : +359 (2) 80 23 300
Факс : +359 (2) 80 23 350
www.deloitte.bg
Делойт се отнася към едно или повече дружества - членове на Делойт Туш Томацу Лимитид („ДТТЛ“ ), както и към глобалната мрежа от дружества – членове и
свързаните с тях дружества (заедно наричани „организацията на Делойт). ДТТЛ (наричано също “Делойт Глобъл“) и всяко дружество– член и неговите
свързани дружества са юридически самостоятелни и независими лица, които не могат да поемат задължения или да се обвързват взаимно по отношение на
трети страни. ДТТЛ и всяко дружество член на ДТТЛ и свързаните с него дружества са отговорни единствено и само за своите собствени действия и
бездействия, но не и за тези на останалите. ДТТЛ не предоставя услуги на клиенти. Моля, посетете www.deloitte.com/about, за да научите повече.
Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited (“DTTL”), its global network of member firms, and their related entities (collectively, the “Deloitte
organization”). DTTL (also referred to as “Deloitte Global”) and each of its member firms and related entities are legally separate and independent entities, which cannot
obligate or bind each other in respect of third parties. DTTL and each DTTL member firm and related entity is liable only for its own acts and omissions, and not those of
each other. DTTL does not provide services to clients. Please see www.deloitte.com/about to learn more.
To
The shareholders of
Korado-Bulgaria AD
DECLARATION
Under art. 100m, para 4, p. 3
of the Public Offering of Securities Act
The undersigned:
Rositsa Boteva, in my capacity of:
- Statutory Manager of audit firm Deloitte Audit OOD, with UIC 121145199, with
a seat and management address in Sofia, 103 Al. Stambolijski blvd., floor 6, and correspondence
address in in Sofia, 103 Al. Stambolijski blvd., floor 6, and
- Registered auditor (with reg. No 0500 of the register of CPOSA under art. 20 of the
Independent Financial Audit Act), responsible for the audit engagement performed by the audit
firm Deloitte Audit OOD (with reg. No 033 the register of CPOSA under art. 20 of the
Independence Financial Act),
Declare that:
Deloitte Audit OOD was engaged to perform statutory financial audit of the annual
financial statements of Korado-Bulgaria AD for 2022, prepared in accordance with the
International Financial Reporting Standards, as endorsed by EU, generally accepted name of
accounting framework, as defined in art. 8 of the additional provisions of the Accountancy Act
with name “International accounting standards”. As a result of our audit we i ssued audit report
dated March 20, 2023.
Hereby I declare that as reported in our auditor’s report regarding the annual
financial statements of Korado-Bulgaria AD for 2022, issued on March 20, 2023 that:
1. Art. 100m, para 4, p. 3, l. “a” Audit opinion: In our opinion, the accompanying
financial statements present fairly, in all material respects, the financial position
of the Company as at December 31, 2022, and its financial performance and its
cash flows for the year then ended in accordance with International Financial
Reporting Standards ("IFRS"), as adopted by the European Union (“EU”) (page
1 of the auditor’s report) ;
UIC 121145199
103, Al. Stambolijski Blvd.
Sofia 1303
Bulgaria
Tel: +359 (2) 80 23 300
Fax: +359 (2) 80 23 350
www.deloitte.bg
Делойт Одит ООД
ЕИК 121145199
бул.”Ал.Стамболийски” 103
София 1303
България
Tел : +359 (2) 80 23 300
Факс : +359 (2) 80 23 350
www.deloitte.bg
Делойт се отнася към едно или повече дружества - членове на Делойт Туш Томацу Лимитид („ДТТЛ“ ), както и към глобалната мрежа от дружества – членове и
свързаните с тях дружества (заедно наричани „организацията на Делойт). ДТТЛ (наричано също “Делойт Глобъл“) и всяко дружество– член и неговите
свързани дружества са юридически самостоятелни и независими лица, които не могат да поемат задължения или да се обвързват взаимно по отношение на
трети страни. ДТТЛ и всяко дружество член на ДТТЛ и свързаните с него дружества са отговорни единствено и само за своите собствени действия и
бездействия, но не и за тези на останалите. ДТТЛ не предоставя услуги на клиенти. Моля, посетете www.deloitte.com/about, за да научите повече.
Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited (“DTTL”), its global network of member firms, and their related entities (collectively, the “Deloitte
organization”). DTTL (also referred to as “Deloitte Global”) and each of its member firms and related entities are legally separate and independent entities, which cannot
obligate or bind each other in respect of third parties. DTTL and each DTTL member firm and related entity is liable only for its own acts and omissions, and not those of
each other. DTTL does not provide services to clients. Please see www.deloitte.com/about to learn more.
To
The shareholders of
Korado-Bulgaria AD
DECLARATION
Under art. 100m, para 4, p. 3
of the Public Offering of Securities Act
The undersigned:
Rositsa Boteva, in my capacity of:
- Statutory Manager of audit firm Deloitte Audit OOD, with UIC 121145199, with
a seat and management address in Sofia, 103 Al. Stambolijski blvd., floor 6, and correspondence
address in in Sofia, 103 Al. Stambolijski blvd., floor 6, and
- Registered auditor (with reg. No 0500 of the register of CPOSA under art. 20 of the
Independent Financial Audit Act), responsible for the audit engagement performed by the audit
firm Deloitte Audit OOD (with reg. No 033 the register of CPOSA under art. 20 of the
Independence Financial Act),
Declare that:
Deloitte Audit OOD was engaged to perform statutory financial audit of the annual
financial statements of Korado-Bulgaria AD for 2022, prepared in accordance with the
International Financial Reporting Standards, as endorsed by EU, generally accepted name of
accounting framework, as defined in art. 8 of the additional provisions of the Accountancy Act
with name “International accounting standards”. As a result of our audit we i ssued audit report
dated March 20, 2023.
Hereby I declare that as reported in our auditor’s report regarding the annual
financial statements of Korado-Bulgaria AD for 2022, issued on March 20, 2023 that:
1. Art. 100m, para 4, p. 3, l. “a” Audit opinion: In our opinion, the accompanying
financial statements present fairly, in all material respects, the financial position
of the Company as at December 31, 2022, and its financial performance and its
cash flows for the year then ended in accordance with International Financial
Reporting Standards ("IFRS"), as adopted by the European Union (“EU”) (page
1 of the auditor’s report) ;
2.
Art. 100m, para 4, p. 3, l. “b” Information regarding
Korado-Bulgaria AD
related party transactions. Information on related party transactions is disclosed
in Note 16 to the accompanying financial statements. Based on the procedures
performed on related party transactions in the context of our audit of the financial
statements as a whole, nothing has come to our attention indicating that the
related party transactions are not disclosed in the accompanying financial
statements for the year ended December 31, 2022, in all material respects, in
accordance with the requirements of IAS 24 Related Party Disclosures. We have
considered the results of our audit procedures on related party transactions in
forming our opinion on the financial statements as a whole and not for the purpose
of providing a separate opinion on the related party transactions ( page 6 of the
auditor’s report ).
3. Art. 100m, para 4, p. 3, l. “c” Information regarding material transactions . Our
responsibilities for the audit of the financial statements described in section
“Auditor’s Responsibilities for the Audit of the Financial Statements” include
evaluating whether the financial statements represent the underlying transactions
and events in a manner that achieves fair presentation. Based on the procedures
performed on the material transactions underlying the financial statements for the
year ended December 31, 2022, nothing has come to our attention indicating any
instances of material unfair presentation and disclosure under the applicable IFRS
as adopted by the European Union. We have considered the results of our audit
procedures on the material transactions underlying the financial statements in
forming our opinion on the financial statements as a whole and not for the purpose
of providing a separate opinion on these material transactions. ( page 6 of the
auditor’s report ).
The declarations made in the current declaration should be considered only in the
context of our auditor’s report regarding the performed independent financial audit of the
annual financial statements of Korado-Bulgaria AD for the reporting period ended
December 31, 2022, dated March 20, 2023. This declaration is intended only for the above
stated addressee and is prepared solely and only for the purpose of complying with the
requirements of A rt. 100m, para 4, p.3 of the Public Offering of Securities Act (POSA) and
should not be accepted as replacement of our conclusions, included in our auditor’s report,
dated March 20, 2023 regarding the matters, as scoped by art. 100m, para 4, p. 3 of POSA.
March 20, 2023 For audit firm Deloitte Audit OOD:
Sofia
Rositsa Boteva
(Statutory Manager and Registered Auditor, in charge of
the audit)
related party transactions. Information on related party transactions is disclosed
in Note 16 to the accompanying financial statements. Based on the procedures
performed on related party transactions in the context of our audit of the financial
statements as a whole, nothing has come to our attention indicating that the
related party transactions are not disclosed in the accompanying financial
statements for the year ended December 31, 2022, in all material respects, in
accordance with the requirements of IAS 24 Related Party Disclosures. We have
considered the results of our audit procedures on related party transactions in
forming our opinion on the financial statements as a whole and not for the purpose
of providing a separate opinion on the related party transactions ( page 6 of the
auditor’s report ).
3. Art. 100m, para 4, p. 3, l. “c” Information regarding material transactions . Our
responsibilities for the audit of the financial statements described in section
“Auditor’s Responsibilities for the Audit of the Financial Statements” include
evaluating whether the financial statements represent the underlying transactions
and events in a manner that achieves fair presentation. Based on the procedures
performed on the material transactions underlying the financial statements for the
year ended December 31, 2022, nothing has come to our attention indicating any
instances of material unfair presentation and disclosure under the applicable IFRS
as adopted by the European Union. We have considered the results of our audit
procedures on the material transactions underlying the financial statements in
forming our opinion on the financial statements as a whole and not for the purpose
of providing a separate opinion on these material transactions. ( page 6 of the
auditor’s report ).
The declarations made in the current declaration should be considered only in the
context of our auditor’s report regarding the performed independent financial audit of the
annual financial statements of Korado-Bulgaria AD for the reporting period ended
December 31, 2022, dated March 20, 2023. This declaration is intended only for the above
stated addressee and is prepared solely and only for the purpose of complying with the
requirements of A rt. 100m, para 4, p.3 of the Public Offering of Securities Act (POSA) and
should not be accepted as replacement of our conclusions, included in our auditor’s report,
dated March 20, 2023 regarding the matters, as scoped by art. 100m, para 4, p. 3 of POSA.
March 20, 2023 For audit firm Deloitte Audit OOD:
Sofia
Rositsa Boteva
(Statutory Manager and Registered Auditor, in charge of
the audit)