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ALLTERCO AD
ANNUAL CONSOLIDATED REPORT ON THE ACTIVITY
ANNUAL CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2022
(Unofficial translation of the original in Bulgarian)
ALLTERCO AD
ANNUAL CONSOLIDATED REPORT ON THE ACTIVITY UIC 201047670
ANNUAL CONSOLIDATED REPORT ON THE ACTIVITY
ALLTERCO AD
FOR 2022
(Unofficial translation of the original in Bulgarian)
THIS REPORT ON THE ACTIVITY HAS BEEN PREPARED IN ACCORDANCE WITH THE PROVISIONS
OF ART. 39 AND THE FOLLOWING OF THE ACCOUNTANCY ACT, ART. 100N, PARA 7 OF THE PUBLIC
OFFERING OF SECURITIES ACT AND APPENDIX No. 2 OF ORDINANCE No 2 of 9.11.2021 ON INITIAL
AND SUBSEQUENT DISCLOSURE OF INFORMATION IN CASE OF PUBLIC OFFERING OF SECURITIES
AND ADMISSION OF SECURITIES TO TRADING ON A REGULATED MARKET
ALLTERCO AD
ANNUAL CONSOLIDATED REPORT ON THE ACTIVITY UIC 201047670
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail. 2
DEAR SHAREHOLDERS,
We, the members of the Board of Directors of ALLTERCO AD /”the Company”/ , committed to manage the company in
the best interest of the shareholders, as well as following the requirements of the provisions of Art. 39 and the following
of the Accountancy Act (effective since 01.01.2021), Art. 100n, Para 7 of the Public Offering of Securities Act and
Appendix No. 2 of Ordinance No. 2 of 9 November on initial and subsequent disclosure of information in case of public
offering of securities and admission of securities to trading on a regulated market, have prepared this report on the activity
(hereinafter "The Report"). The Report provides comments and analysis of the consolidated financial statements and other
material information regarding the financial position and the financial performance of the Company and its subsidiaries.
The report contains an objective review that presents fairly the development and performance of ALLTERCO AD and its
subsidiaries, as well as their position, including a description of the main risks they face.
The circumstances that occurred in 2022, which the Company's management believes may be of significance to the
investors in deciding to acquire, sell or continue to hold publicly offered securities, have been disclosed within the time
limits provided for in the Public Offering of Securities Act and by the Financial Supervision Commission, investors and
the regulated securities market.
ALLTERCO AD
ANNUAL CONSOLIDATED REPORT ON THE ACTIVITY UIC 201047670
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail. 3
This Report on the activity of Allterco AD (“the Company”/ “the Issuer”) presents information about the Company and
its subsidiaries, together the Group on consolidated basis as of December 31, 2022 and covers the period 01.01.2022-
31.12.2022 (“the reporting period”).
1. GENERAL INFORMATION ABOUT THE COMPANY
Allterco AD is a public joint-stock company, established in 2010 in the city of Sofia and entered into the Commercial
Register with the Registry Agency on 11.02.2010 under UIC (unified identification code): 201047670 and LEI code
(identification code of the legal entity) 8945007IDGKD0KZ4HD95 for unlimited period of time. The name in Latin shall
be written as follows: ALLTERCO AD.
The Company’s seat and management address is: 103, Cherni Vrah Blvd., 1407 Sofia, Capital Municipality, Republic of
Bulgaria. The correspondence address is the same; tel.: +359 2 957 12 47. The Company’s website is www.allterco.com.
As of 22.11.2021, the shares of Allterco AD are traded on two EU regulated markets - the Bulgarian Stock Exchange and
the Frankfurt Stock Exchange.
The Company operates in accordance with Bulgarian legislation.
The Issuer is part of an economic group that consists of the parent company Allterco AD and its subsidiaries which as of
December 31, 2022 are as follows:
- Allterco Robotics EOOD, Bulgaria;
- Allterco Properties EOOD, Bulgaria;
- Allterco Trading EOOD, Bulgaria;
- Shelly USA Inc., USA (previously Allterco Robotics US);
- Allterco Europe GmbH, Germany.
As of the end of the reporting period, the issued, subscribed, paid up and registered capital of the Company amounts to
BGN 17 999 999 (seventeen million nine hundred and ninety-nine thousand nine hundred and ninety-nine leva), divided
into17 999 999 (seventeen million nine hundred and ninety-nine thousand nine hundred and ninety-nine) dematerialized
ordinary registered voting shares with par value of 1 (one) BGN each.
The share capital was fully paid in by five contributions:
• Contribution in kind representing 100% of the shares of Teravoice EAD, with a monetary valuation of
BGN 50 000 (fifty thousand leva);
• Contribution in kind representing 69.60% of the shares of Tera Communications AD, with a monetary valuation
of BGN 5 438 000 (five million four hundred and thirty-eight thousand leva);
• A combination of contributions in kind and monetary contributions amounting to BGN 8 012 000 (eight million
and twelve thousand leva).
• Cash contributions at the total amount of BGN 1 500 000 (one million and five hundred thousand leva) against
subscribed and paid 1 500 000 (one million and five hundred thousand) dematerialized ordinary registered voting
shares with a par value of 1 BGN as a result of a procedure for initial public offering of a new issue of shares.
• Cash contributions at the total amount of BGN 2 999 999 (two million nine hundred and ninety-nine thousand
nine hundred and ninety-nine leva) against subscribed and paid 2,999,999 (two million nine hundred and ninety-
nine thousand nine hundred and ninety-nine) dematerialized ordinary registered voting shares with a par value
of 1 BGN as a result of a procedure for initial public offering of a new issue of shares. The public offering of
shares from the capital increase of Allterco AD was held in the period 28.09.2020 – 30.10.2020 on the basis of
a Prospectus together with its supplements as affirmed by the Financial Supervision Commission with
Ordinance No 148- Е of 18.02.2020, Decision No 405 - Е of 11.06.2020, Decision No 601 - Е of 13. 08.2020 and
Decision No 791- Е of 29.10.2020.
ALLTERCO AD
ANNUAL CONSOLIDATED REPORT ON THE ACTIVITY UIC 201047670
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail. 4
As of December 31, 2022, the capital structure of ALLTERCO AD is as follows:
SHAREHOLDER PERCENTAGE OF
THE CAPITAL
Svetlin Todorov 32,48 %
Dimitar Dimitrov 32,48 %
Other individuals and legal entities 35,04 %
As of December 31, 2022, the Company has 40,000 own shares, representing 0.22% of its capital.
1.1. In-kind contributions made in the last three financial years
In the last three financial years, no in-kind contributions were made to the Company's share capital.
1.2. Information about the management system
As of 31.12.2022, ALLTERCO AD has a one-tier management system - 5-member Board of Directors (BD).
During the reporting period, changes were made in the composition of the Company's Board of Directors. By decision of
an extraordinary General Meeting of Shareholders, held on 08.04.2022, the number and members of the Board of
Directors were changed from three to five members, joining Mr. Wolfgang Kirsch and Mr. Gregor Bieler to the current
BD members.
Pursuant to the decision of the General Meeting of Shareholders at its first meeting, held on 08.04.2022, the Board of
Directors elects among its members executive members, chairman and deputy chairman, as follows:
• Gregor Bieler – Chairman;
• Nikolay Martinov – Deputy Chairman;
• Dimitar Dimitrov – Executive Director and representative;
• Wolfgang Kirsch – Executive Director and representative;
• Svetlin Todorov – BD Member and representative;
The representative members of the Board of Directors represent the Company jointly or separately.
2. REVIEW OF THE COMPANY’S BUSINESS ACTIVITY AND STATUS
As of 31.12.2022 Allterco AD reports investments in the following companies:
- 100% of the capital of Allterco Robotics EOOD, Bulgaria;
- 100% of the capital of Allterco Properties EOOD;
- 100% of the capital of Allterco Trading EOOD
- 100 % of the capital of Shelly USA, USA (previously Allterco Robotics US);
- 100 % of the capital of Allterco Europe GmbH, Germany.
Allterco AD has an associate company in China, Allterco Asia Ltd. 91440300MA5GMK2T5B, with seat and management
address: number 716, Building A, XingHe Shiji, Cai Tian road 3069, Gangxia, Futian, Shenzhen, China. The share capital
of the new company is CNY 100 000, and the share of Allterco AD is 30% with an option to acquire additional up to 50%
and reach a controlling stake of up to 80% at the discretion of Allterco AD if the project develops successfully.
ALLTERCO AD
ANNUAL CONSOLIDATED REPORT ON THE ACTIVITY UIC 201047670
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail. 5
The structure of the economic group at the date of issue of this Report includes the following companies:
* During the reporting period, there was no change in the economic group of Allterco AD, but a change occurred after the end of the
reporting period, as in January 2023, the Company completed the phase I of the acquisition of the Slovenian IoT supplier Računalniški
inženiring in avtomatizacija procesov d.o.o. Nova Gorica, ("GOAP" or the "Acquiree") representing the acquisition of 60% of
Acquiree’s equity. The transaction is subject to share purchase agreements ("SPA"), which have been signed with all four G OAP
shareholders. The total transaction price for phase I amounts to EUR 2 million.
The remaining 40% of the Acquiree’s equity, owned by three owners – individuals, are subject to an options contract, which was signed
along with the SPAs. Under the options contract Allterco AD has an unconditional option to purchase (call option), whereas the sellers
– conditional option to sell (put option) two packages of company shares (the exercise of any of the sellers’ options is subject to
achieving in the period 2023-2025 of specific minimum criteria for KPI, EBITDA and revenue). One of the options is for the acquisition
of 16%, whereas the other is for the acquisition of 24% of the equity of GOAP. The total price for the shares upon exercise of the
options depends on the extent of realization of the conditions for this and may vary between EUR 699 999.70 (BGN 1 369 080.41) and
EUR 3 449 998.60 (BGN 6 747 610.76).
**During the reporting period, the subsidiary Allterco Robotics EOOD established a branch in Ireland, registered in the Trade Register
of Ireland (Companies Registration Office ) with reg. number 909893 and address 38 Upper Mount Street, Dublin, D02 PR89, Ireland.
ALLTERCO AD
ANNUAL CONSOLIDATED REPORT ON THE ACTIVITY UIC 201047670
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail. 6
3. RESULTS FROM OPERATIONS
3.1. Revenue and results from operations
At the end of the reporting period, Allterco AD reports on a consolidated basis a profit at the amount of BGN 17 433
thousand, which represents an increase in profit by 9,7% compared to the same reporting period of the prior year.
At the end of the reporting period, ALLTERCO AD reports on a consolidated basis an operating income amounting to
BGN 94 190 thousand, which is an increase by 54,75% compared to prior year. Revenue from sale of devices increased
by 58,1%.
REVENUE 2020 change 2021 change 2022
BGN’000 % BGN’000 % BGN’000
Revenue from sales of devices 39 117 50.4% 58 831 58.1% 93 007
Revenue from sales of services 7 225 -90.6% 678 -74.8% 171
Other operating income 1 013 34.1% 1 358 -25.5% 1 012
Total operating income 47 355 28.5% 60 867 54.75% 94 190
Profit share in associates - - 32 268.8% 118
Gains on transactions with financial assets 3 446 -92.7% 250 -100.0% -
Total financial income 3 446 -92.7% 282 -58.2% 118
3.2. Operating expenses
At the end of the reporting period, the total operating expenses of ALLTERCO AD on consolidated basis increased by
75,6 % compared to the same reporting period of the prior year. The increased amount of expenses was largely due to an
increase in salary expenses, which grew by 92,9% compared to prior period, other operating expenses, which increased
by 123,2% compared to 2021, sales expenses, which increased by 47.7%, as well as hired services expenses, which
increased by 42.1% compared to 2021 and impairment expenses which increased by 464.4%. The increase in other
operating expenses was mainly due to receivables written off and/or impaired.
The remuneration and insurance expenses (53,3%) represent the largest share in reported expenses for the period, followed
by sales expenses by 14,5% and hired services expenses with a share of 12,8 in the total operating expenses.
EXPENSES 2020 change 2021 change 2022
BGN’000 % BGN’000 % BGN’000
Expenses for materials 131 45.0% 190 167.9% 509
Hired services expenses 1 377 80.0% 2 478 42.1% 3 521
Depreciation/ amortization expenses 353 -45.3% 193 162.2% 506
Salaries, social insurance and health
insurance contributions
6 115 24.1% 7 590 92.9% 14 644
Other expenses 723 126.4% 1 637 -23.3% 1 255
Total administrative expenses 8 699 39.0% 12 088 69.1% 20 435
Impairment expenses 483 -30.8% 334 464.4% 1 885
Sales expenses 542 397.4% 2 696 47.7% 3 981
Other operating expenses 632 -16.0% 531 123.2% 1 185
Total operating expenses 10 356 -17.9% 15 649 75.6% 27 486
ALLTERCO AD
ANNUAL CONSOLIDATED REPORT ON THE ACTIVITY UIC 201047670
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail. 7
3.3. Financial indicators
Liquidity
LIQUIDITY RATIOS 2020 2021 2022
Current ratio 7.47 12.34 9.68
Quick ratio 6.88 10.77 6.79
Absolute liquidity ratio 4.13 6.34 3.53
Cash ratio 6.34 10.32 6.25
The current liquidity ratio at the end of the reporting period decreased due to the following: the current assets
increased by 29,8% compared to the end of 2021, while the current liabilities decreased by 13,1%.
The quick liquidity ratio at the end of the reporting period decreased due to the following: inventories increased by
204,3% compared to the end of 2021, while the current liabilities increased by 65,4%.
The absolute liquidity ratio at the end of the reporting period decreased due to the following: the current liabilities
increased by 65,4% compared to the end of 2021, while cash decreased by 7,8%.
The cash ratio at the end of the reporting period decreased due to the following: The current liabilities increased by
65,4% compared to the end of 2021, while cash decreased by 7,8% and the trade receivables increased by 12,9%.
0.00
2.00
4.00
6.00
8.00
10.00
12.00
14.00
Коефициент на
обща ликвидност
Коефициент на
бърза ликвидност
Коефициент на
абсолютна
ликвидност
Коефициент на
незабавна
ликвидност
31.12.2020 31.12.2021 31.12.2022
ALLTERCO AD
ANNUAL CONSOLIDATED REPORT ON THE ACTIVITY UIC 201047670
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail. 8
Capital leverage ratios
FINANCIAL LEVERAGE RATIOS 2020 2021 2022
Debt / Equity 0.16 0.11 0.12
Debt/ Assets 0.13 0.10 0.11
Equity/ Debt 6.42 9.49 8.13
The change in the debt/equity ratio at the end of the reporting period is due to the following: the Company’s total
liabilities increased by 40,9% compared to the end of 2021, and equity increased by 20,7%.
The change in the debt/assets ratio at the end of the reporting period is due to the following: the Company’s total
assets increased by 22,6% compared to the end of 2021, while the Company’s total liabilities increased by 40,9%.
The change in the equity/debt ratio at the end of the reporting period is due to the following: the total liabilities of
the Company increased by 40,9% compared to the end of 2021, and the equity has increased by 20,7%.
3.4. Key indicators
Summary information on the financial performance of ALLTERCO AD for the last three financial periods is presented
in the following charts and tables:
Financial result
0.00
1.00
2.00
3.00
4.00
5.00
6.00
7.00
8.00
9.00
10.00
Коефициент на
задлъжнялост
Дълг/ Активи Коефициент на
финансова автономност
31.12.2020 31.12.2021 31.12.2022
0
5,000
10,000
15,000
20,000
25,000
EBITDA EBIT
31.12.2020
31.12.2021
31.12.2022
ALLTERCO AD
ANNUAL CONSOLIDATED REPORT ON THE ACTIVITY UIC 201047670
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail. 9
Table 6
2020 2021 2022
EBITDA 16 859 19 814 21 405
EBIT 15 797 18 746 20 377
The calculation of the above indicators includes the gains on the sale of financial assets (realized in 2020 and 2021),
which are ordinary operating revenues for a holding company.
Table 7
INDICATORS
2020
BGN’000
2021
BGN’000
2022
BGN’000
Sales revenue 46 342 59 509 93 178
Equity 56 836 65 502 79 072
Non-current liabilities 2 549 2 087 1 757
Current liabilities 6 308 4 816 7 969
Non-current assets 18 603 12 991 11 692
Current assets 47 090 59 414 77 106
Working capital 40 782 54 598 69 137
Cash 26 050 30 541 28 148
Total debt 8 857 6 903 9 725
Interest expense 110 81 69
Inventory 3 660 7 560 23 002
Current receivables 13 948 19 167 21 647
Expenses for ordinary activities 9 343 14 291 26 474
Materials expenses 131 190 509
3.5. Profitability ratio
Table 8
PROFITABILITY RATIO 2020 2021 2022
Return on registered capital 0.747 0.883 0.969
ROE 0.235 0.243 0.220
ROA 0.205 0.219 0.196
0.000
0.200
0.400
0.600
0.800
1.000
1.200
Рентабилност на
регистрирания капитал
Рентабилност на
собствения капитал (ROE)
Рентабилност на
активите (ROA)
2020
2021
2022
ALLTERCO AD
ANNUAL CONSOLIDATED REPORT ON THE ACTIVITY UIC 201047670
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail. 10
Return on equity (ROE)
As of the end of the reporting period, the Return on equity ratio decrease to 0,22 compared to the same period of the prior
financial year. It is due to the increase by 9.7% in the net profit compared to 2021 while the Company's equity increased
by 20,7%.
Return on assets (ROA)
The value of ROA ratio as of the end of 2022 is 0,196 and decreases compared to the prior financial year. For 2022,
ALLTERCO AD reports an increase of the net profit by9.7%, whereas the Company's assets increase by 22,6%.
Return on registered capital
As of the end of the reporting period, the Return on registered capital is 0,969, which is an increase compared to 2021. In
2022 compared to 2021, the Company's net profit increase, whereas the Company equity remains unchanged.
4. HUMAN RESOURCES
As of the end of the reporting period, the average number of employees in the Group is 152 people, including the Board
of Directors 5.
The relationships with workers and employees are regulated under separate labour contracts.
The Company's management strives to improve the standard of living of its employees beyond the working hours during
which they are directly focused on their business commitments. The expenses for salaries and social security for 2022
amount to BGN 14 644 thousand (2021: BGN 7 590 thousand).
5. ENVIRONMENTAL PROTECTION POLICY
The Company and its subsidiaries do not carry out activities that have negative impact on the environment. Nevertheless,
the Company and its subsidiaries strive to limit the use of materials produced from non-renewable energy sources and
implements an energy safety program.
Some of the companies in the Group produce electrical and electronic equipment - smart devices, including those with
built-in batteries. The companies in the Group implement the measures required by the law in relation to obsolete electrical
and electronic equipment (including its batteries), as well as its packaging by participating in collective waste management
systems.
6. NON-FINANCIAL REPORTING
In accordance with the requirements of Directive 2014/95/EU of the European Parliament on non-financial reporting and
the provisions of the Accountancy Act, for a number of companies arises an obligation to publish non-financial
information separately or as part of the annual reports on the activity.
The obligation arises for large public-interest entities which, as at 31 December of the reporting period, exceed the
criterion for an average number of employees in the financial year of 500 people. Public interest entities are: public
entities and other issuers of securities; credit institutions; financial institutions; insurers and reinsurers, pension insurance
companies and funds managed by them; investment intermediaries; trading companies that produce, distribute and sell
electricity and heat; commercial companies that import, transport, distribute and transit natural gas; commercial
companies providing water, sewer and telecommunications services; Bulgarian State Railways EAD and its subsidiaries.
Large enterprises are defined as those with net sales revenues - BGN 76 million or the carrying amount of the assets -
BGN 38 million.
Given the criteria set out in the Accountancy Act, it can be concluded that Allterco AD, on a consolidated basis, is not
obliged to report non-financial information separately or as part of the report of the Board of Directors.
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7. MAIN RISKS FOR THE COMPANY
The risks related to the business operation of the Company and its subsidiaries can be generally divided into systematic
(overall) and non-systematic (related specifically to its activity and the industry where it operates). The Company is also
associated with the similar risk categories inherent in its activity and the industry where its subsidiaries operate insofar as
they are the main source of the Company's revenue. In addition, the investors in financial instruments of the Company
are exposed to risks related to investments in securities (derivative and underlying).
7.1. SYSTEMATIC RISKS
Systematic risks are related to the market and the macro environment in which the Company and its subsidiaries operate,
which is why they cannot be managed and controlled by the company's management team. Systematic risks are the
following: political risk, macroeconomic risk, inflation risk, currency risk, interest rate risk, tax risk and unemployment
risk.
Type of risk Description
POLITICAL RISK Political risk is the likelihood of a change of Government, or of a sudden change in its policy, of
occurrence of internal political upheavals and unfavourable changes in European and/or national
legislation, which would have an adverse impact on the environment in which local businesses
operate, and investors would incur losses. In November 2021, the country held for the second time
early parliamentary elections for the Ordinary National Assembly, as a result of which for the
political party ruling in last 12 years lost its position in the state governance. After voting in June
2022, a motion of censure to the coalition government formed at the end of 2021, early parliamentary
elections were held in September 2022. Due to the impossibility of forming a regular government as
of the date of this report, a procedure for new elections on April 2, 2023 is in process.
Political risks for Bulgaria internationally are related to the commitments undertaken to implement
serious structural reforms in the country in its capacity as an equal member of the EU, increasing
social stability, limiting inefficient spending, on the one hand, as well as threats of terrorist attacks
in Europe, strong destabilization of the Middle East countries, the military interventions and conflicts
in the region of the former Soviet Union, the refugee waves generated by these factors, and the
potential instability of other key countries in the immediate vicinity of the Balkans.
Other factors that also affect this risk are the possible legislative changes and in particular, those
concerning the economic and investment climate in the country.
GENERAL
MACRO-
ECONOMIC
RISK
According to the National Statistical Institute, in December 2022 the total business climate
indicator increased by 1.0 percentage points compared to November. An increase in the indicator
was observed in industry and retail trade, the construction sector maintains its level, and in the
services sector a decrease was noted.1
Business climate - total
Source: NSI
1 Business Conjuncture, December 2022 | National statistical institute (nsi.bg)
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According to ECB forecasts from December 2022, global real GDP growth (excluding the euro area)
is expected to slow down to 2.6% in 2023 - below the long-term average, before recovering gradually
to 3 .1% and 3.3% in 2024 and 2025, respectively. This outlook is below he forecasted one in
September 2022. Average annual real GDP growth is expected to slow down significantly, from
3.4% in 2022 to 0.5% in 2023, after which to accelerate to 1.9% in 2024 and to 1.8% in 2025. 2
INTEREST RATE
RISK
The interest rate risk is related to possible, eventual, adverse changes in the interest rates established
by the financial institutions of the Republic of Bulgaria.
At its December meeting, the ECB's Governing Council decided to raise the three main interest rates
by 50 basis points and, given the substantially upwardly revised inflation outlook, it is expected to
raise them further. According to this decision, the interest rate on the main refinancing operations
and the interest rates on the marginal credit facility and on the deposit facility were increased to
2.50%, 2.75% and 2.00%, respectively, effective as of December 21, 2022. The ECB's Governing
Council estimated that interest rates would need to rise significantly at a steady pace to reach
sufficiently restrictive levels to ensure a timely return of inflation to the medium-term target of 2%.
Keeping interest rates at restrictive levels will reduce inflation over time, dampening demand, and
also guard against the risk of a sustained upward shift in inflation expectations. Future decisions of
the ECB Governing Council on key interest rates will continue to be data-dependent and will be
taken separately at each meeting. 3
01.01.2022 0.00
01.02.2022 0.00
01.03.2022 0.00
01.04.2022 0.00
01.05.2022 0.00
01.06.2022 0.00
01.07.2022 0.00
01.08.2022 0.00
01.09.2022 0.00
01.10.2022 0.49
01.11.2022 0.59
01.12.2022 1.30
*Source BNB4
INFLATION
RISK
Inflation risk is a general rise in prices in which money depreciates and there exists a probability of
loss to households and firms.
The consumer price index (CPI) is an official measure of inflation in the Republic of Bulgaria. It
estimates the total relative change in the prices of goods and services used by households for personal
(non-production) consumption and the index is calculated by applying the structure of the final cash
consumer expenditure of Bulgarian households.
According to the NSI in December 2022 the monthly inflation, measured by the consumer price
index (CPI), is 0.9% compared to the previous month, whereas the annual inflation for December
2022 compared to December 2021 is 16.9%. The average annual inflation for the period January -
December 2022 compared to the period January - December 2021 is 15.3%. 5
2 https://www.ecb.europa.eu/pub/economic-bulletin/html/eb202208.bg.html
3 https://www.bnb.bg/bnbweb/groups/public/documents/ecb_publication/publications_ecb_mb_202208_bg.pdf
4 https://www.bnb.bg/Statistics/StBIRAndIndices/StBIBaseInterestRate/index.htm
5 http://www.nsi.bg/bg/content/20021/прессъобщение/инфлация-и-индекси-на-потребителските-цени-за-
декември-2022- година
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* Inflation, measured by the CPI, by months, Source: NSI
According to the harmonized index of consumer prices (HICP) in December 2022 the monthly
inflation is 0.8% compared to the previous month, whereas the annual inflation for December 2022
compared to December 2021 is 14.3%.
The average annual inflation for the period January - December 2022 compared to the period January
- December 2021 is 13.0%. 6
Headline inflation in the euro area, as measured by the Harmonised Index of Consumer Prices
(HICP), fell in January 2023, for the third consecutive month, driven by lower energy price
inflation. The further decline from 9.2% in December 2022 to 8.5% in January 2023 reflected a
sizeable drop in energy inflation from 25.5% to 17.2%. At the same time, food inflation rose further
from 13.8% in December to 14.1% in January, and HICP excluding energy and food (HICPX)
inflation was unchanged from December, standing at 5.2%. While NEIG inflation increased further
to a new record level of 6.9%, services inflation declined from 4.4% in December to 4.2% in
January.7
CURRENCY
RISK
Currency risk will have an impact on companies with market shares, the payments of which are made
in a currency other than BGN and EUR. Since, according to the current legislation in the country the
Bulgarian lev is fixed to the euro in the ratio EUR 1 = BGN 1.95583, and the Bulgarian National
Bank is obliged to maintain a level of Bulgarian levs in circulation equal to the bank’s foreign
exchange reserves, the risk of devaluation of the BGN compared to the European currency is minimal
and consists in the eventual early abolition of the currency board in the country. At this stage, this
seems unlikely, as the currency board is expected to be abolished upon the adoption of the EUR in
Bulgaria as an official unit of payment.
Theoretically, currency risk could increase when Bulgaria joins the second stage of the European
Exchange Rate Mechanism (ERM II). This is a regime in which the country must maintain the
exchange rate compared to the EUR within +/- 15% against the central parity. In practice, all
countries currently in this mechanism (Denmark, Estonia, Cyprus, Lithuania, Latvia, Malta) are
witnessing fluctuations that are significantly less than the allowed ones of ± 15%.
On July 10, 2020, Bulgaria joined the ERM II exchange rate mechanism, known as the ‘euro area’s
waiting room’. The central rate of the Bulgarian lev is fixed at EUR 1 = BGN 1.95583. Around this
central exchange rate of the BGN, the standard range of plus or minus 15 percent will be maintained.
Bulgaria joins the exchange rate mechanism with its existing currency board regime, as a unilateral
commitment and without additional requirements to the ECB 8 . At the same time, our country must
enter into close cooperation with the unified banking supervision.
6 Inflation and consumer price indices in December 2022 | National statistical institute (nsi.bg)
7 https://www.ecb.europa.eu/pub/economic-bulletin/html/eb202208.bg.html
8 https://www.ecb.europa.eu/press/pr/date/2020/html/ecb.pr200710~4aa5e3565a.en.html
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The fixed exchange rate of the BGN to the EUR does not eliminate for the Bulgarian currency the
risk of unfavorable movements of the euro exchange rate against other major currencies (US dollar,
British pound, Swiss franc) on the international financial markets, but at present the Company does
not consider that such a risk would be material to its business.
The Company may be affected by currency risk depending on the type of cash flow currency and the
type of currency of the Company’s potential loans.
The Allterco AD Group companies operate in Bulgaria as well as in EU countries and other countries,
mainly in the USA and the Asia- Pacific region. At present, the main revenues from the Group’s IoT
business are in BGN or EUR, and the costs of delivery of goods in this segment are mainly in US
dollars and are largely tied to the Chinese yuan, which is why the appreciation of the US dollar or
Chinese yuan would have an adverse effect on the business performance. In terms of US dollar
exposure, the Group companies are expected to have significant US dollar sales revenue in the US
and other non- EU markets in the future, which to some extent balances the Group’s net exposure to
this major currency.
To limit the effects of the currency risk, the companies of the Group have introduced a system for
planning the deliveries from countries inside and outside the EU, as well as procedures for ongoing
monitoring of the movements in the exchange rates of the foreign currencies and control over the
forthcoming payments. Currently, the Group companies do not use derivative instruments for
hedging the currency risk but, if necessary, the management is ready to enter into such transactions.
Credit risk of the
state Credit risk represents the probability of deterioration of Bulgaria's international credit ratings, caused
by the inability of the state to regularly repay its liabilities. Low credit ratings of the state may lead
to higher interest rates, more difficult financing conditions for both state and individual entities,
including the Issuer. Credit ratings are prepared by specialized credit rating agencies and serve to
determine and measure a state's credit risk. Bulgaria's credit rating is presented in the table below:
Table 1: Credit risk of Bulgaria
Credit agency Date of last modification Long-term rating Outlook
Standard & Poor‘s 26.11.2022 9 BBB/A-2 Stable
Fitch 17.06.2022 10 BBB Positive
Source: Ministry of Finance
The international rating agency S&P Global Ratings confirmed the long-term and short-term credit
rating of Bulgaria in foreign and local currency 'BBB/A-2'. The outlook for the rating remains stable.
The stable outlook balances the weaker expectations for Bulgaria's economic growth in the short
term and increased domestic political uncertainty on the one hand, and the country's low net public
debt and low interest costs, on the other hand. According to S&P Global Ratings, this development
gives Bulgaria policy space and makes its public finances less sensitive to rapidly rising interest rates
globally. Bulgaria is currently experiencing high inflation, which according to S&P Global Ratings
could pose a challenge to its membership of the Eurozone from 2024. ( note Allterco АD : On
February 17, 2023 Rositsa Velkova, acting as Minister of Finance announced that the adoption of
the euro is postponed to July 1, 2024, the reasons being high inflation and incompatible Bulgarian
legislation with that of the ECB).
S&P Global Ratings expect Bulgaria's GDP growth to weaken significantly in the coming months.
Although in 2022 the economy remained more resilient to the consequences of the Russia-Ukraine
conflict than the rating agency initially expected, several challenges still lie ahead. Expectations are
that external demand from Bulgaria's main trading partners in the EU and consumption will decrease,
since continued high inflation, estimated at nearly 10% on average in 2023, will weigh on actual
wages. EU financed projects are considered to have a positive effect on the economy as they are
supporting it. S&P Global Ratings forecast less than 1% growth in 2023 which is a significant
slowdown compared to the 3% in 2022.
9 https://www.minfin.bg/bg/news/12025
10 https://www.minfin.bg/bg/news/11631
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Bulgaria's successful accession to the Eurozone will eliminate the residual currency risk for the Euro
in the economy, it will improve the country's access to European capital markets and allow local
commercial banks direct access to the ECB's resources. As at the moment, however, Bulgaria’s
inflation is high (nearly 15%), which, according to the rating agency, may complicate the task of
meeting the convergence criteria next year with this indicator. Domestic political uncertainty also
continues with a caretaker government in place after the last election in October 2022, complicating
the process of preparing to join the Eurozone.
The rating agency would raise the credit rating upon the country's accession to the Eurozone, as well
as upon significant improvement of Bulgaria's external position. S&P noted that they would
downgrade the rating if Bulgaria's economic outlook worsened significantly from their current
expectations, which could happen, for example, due to more significant indirect effects from a
slowdown in global growth, a significant deterioration in the regional security situation, or a
disruption in imports of energy from Russia, threatening the availability of sufficient energy supplies
for the Bulgarian economy.11
Fitch Ratings continue to expect a moderate increase in growth in 2023 (to 3.8%), largely due to
stronger investments related to EU funds. Political uncertainty remains an important downside risk.
The re-emerging prospect of new elections could delay the uptake of the Recovery and Resilience
Plan, which was finally approved in April 2022. However, the risks of a more substantial delay
appear limited at present, underscoring the resilience of the economy over the past few years as to
internal as well as external shocks.
Fitch Ratings expect the deficit to narrow to 2.9% of GDP in 2023, as spending pressures ease.
Despite larger deficits, Bulgaria's public debt level will remain very low compared to EU countries
and those with a BBB rating.
The main factors that could lead to an increase in the rating are progress towards joining the
Eurozone, including greater confidence in Bulgaria meeting the membership criteria and improving
the growth potential of the economy. Factors that could lead to a downgrade include a significant
delay in joining the Eurozone or a major adverse macroeconomic shock that would significantly
reduce medium-term growth prospects compared to the rating agency's current expectations. 12
Risk of
unemployment
As a major factor affecting consumer purchasing power, an increase in unemployment would reduce
the demand for IoT products. On the other hand, the demand for personnel from the business
continues to be extremely active and such risk seems insignificant within the next year.
Eurostat estimates that in January 2023, the euro area seasonally-adjusted unemployment rate was
6.7 %, stable compared with December 2022 and down from 6.9 % in January 2022. The EU
unemployment rate was 6.1 % in January 2023, also stable compared with December 2022 and down
from 6.3 % in January 2022 . 13
The 4.7% unemployment reported by the National Employment Agency's administrative statistics
for the last month of 2022 registered the lowest value of the indicator for December and continues
to mark a decline in terms of annual dynamics - in this case by 0.1 percentage points. 14
Legal Risk Although Bulgaria has introduced a number of significant legislative changes since joining the EU
and most of the Bulgarian legislation has been harmonied with EU legislation, the legal system in
the country is still in the process of reform. Judicial and administrative practices remain problematic
and it is difficult to effectively resolve property disputes, breaches of laws and contracts, etc.
Deficiencies in the legal infrastructure can result in uncertainty arising from the implementation of
corporate actions, supervision and other issues.
11 https://www.minfin.bg/bg/news/12025
12 https://www.minfin.bg/bg/news/11867
13 https://ec.europa.eu/eurostat/statistics-
explained/index.php?title=Unemployment_statistics#Unemployment_in_the_EU_and_the_euro_area
14 https://www.az.government.bg/bg/news/view/2022-g-zavyrshva-s-naj-niskoto-registrirano-ravnishte-na-bezrabotica-
za-dekemvri-3939/
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Tax Risk It is essential for the financial performance of the companies to maintain the current tax regime.
There is no guarantee that the tax legislation, which is directly relevant to the core business of the
Company, will not be changed in a direction that would lead to significant unforeseen expenses and,
accordingly, would adversely affect its profit. The taxation system in Bulgaria is still developing, as
a result of which a contradictory tax practice may arise.
7.2. UNSYSTEMATIC RISKS
Risks related to the industry in which the Group operates
Such risks are the Risk of Key Personnel Shortage, Competitive Risk, Personal Data Security and Cyber Attacks Risk,
Regulatory and specific technical requirements Risk, Risk Of Changing Technologies.
Risk of key personnel shortage
One of the biggest challenges facing technology companies such as the Group companies, as well as considering the
specific scope of their activity in the field of telecommunications and engineering and software development, is the
shortage of qualified personnel. The insufficient availability of suitable personnel in the subsidiaries could adversely
affect the future development of the Group, due to delays in the development of new products/services or the maintenance
of existing ones. On the other hand, the high competition for attracting personnel in this sector raises the price of labor.
As a result, the financial position and market share of the Group’s companies would suffer.
Competitive Risk
Following the sale of the Group's telecommunications business, the Group's companies operate primarily on the Internet
of Things (IoT) segment. This segment is one of the most modern and promising sectors of the industry, which attracts
the interest of many technological giants and start-ups. The loss or inability to capture market share and declines in final
product prices due to increased competition could have a negative effect on revenues, earnings and profit margins.
Maintaining a competitive position requires investment in creating new useful devices, improving existing solutions and
expanding market share, and it cannot be taken for granted that new developments will prevail among competitors on the
market.
Personal Data Security and Cyber Attacks Risk
The technology industry is characterized by the digital transfer of information that could be strictly confidential,
containing personal data of product users, financial information of companies, information about new products, etc. The
protection of such information is a critically important factor for the normal functioning of companies in the industry,
including the companies of the Group. The sales of the devices and the use by customers of the accompanying mobile
applications and cloud services provided by the Group are related to the exchange and storage of personal data. A potential
breach in information security may lead to:
i) Loss of customers and/or partners and their migration to competitive companies; ii) Imposing sanctions and lawsuits
with regard to violations of applicable data protection and privacy laws; iii) Lost or delayed orders and sales; iv) Adverse
effect on reputation, business, financial position, profit and cash flows.
Regulatory and specific technical requirements Risk
The offering of IoT devices is subject to a regulation for the certification of the products for sale in the respective country.
In the European Union, products must be marked ‘CE’, thus indicating that the product has been evaluated and meets
safety, health and environmental requirements. The US equivalent is UL Certification. For the purposes of certification,
accredited laboratories are assigned the compliance tests, which is associated with significant costs. In addition, specifics
in the requirements of local regulators and counterparties (especially mobile operators) may require the performance of
additional tests and certification, which increases the cost of entering a certain market or a certain distribution channel.
The sales of the products of the Group’s com panies cover more and more markets, which often have local regulation
regarding the certification of similar products in the respective country. Compliance with local regulatory requirements
is time and resource intensive and may delay the Company's entry into new markets or impose additional costs to meet
different standards.
The change in regulatory requirements for devices may involve additional costs to bring them into compliance with the
new requirements, including costs of recalling products from the market to bring them into compliance with those
requirements. The companies of the Group and their local partners monitor for planned legislative changes on a regular
basis in order to take measures to ensure product compliance.
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Any changes in the regulations of telecommunications services may also have some impact on the Group's operations, as
mobile operators are one of the main sales channels for the existing Myki series products. A large part of the IoT devices
developed and sold by the companies in the Group use Internet-based technology and can work with the services of any
Internet provider. In this respect, the Group is already less dependent on regulations in the field of telecommunications,
insofar as the companies in its structure are not telecommunication service providers and mobile operators are only one
of the channels for trading and distribution of IoT devices.
Risk of change in technology
The Issuer and its subsidiaries operate in a highly dynamic segment where technology has a significant impact and is a
source of competitive advantage. As a result, there is a risk of delayed adaptation to new technologies, due to lack of
knowledge, experience or sufficient funding, which may have a negative effect on the Issuer. Slow adaptation to new
realities may lead to loss of competitive positions and market shares, which in turn will lead to deterioration of the Group's
results.
Risks related to the Group's activities
Such risks are: operational risk, risk related to business partners, risks arising from new projects and liquidity risk.
Operational risk
Operational risk can be defined as the risk of losses caused by flawed or failed internal processes related to management.
Such risks may arise as a result of:
• Wrong operational decisions related to current project made by the management;
• Shortage of qualified personnel necessary for the development and implementation of new projects;
• Resigning key personnel impossible to replace;
• Risk of an excessive increase in management and administrative costs, leading to a decrease in the overall profitability
of the Issuer;
• Technical failures leading to long interruptions is providing services may lead to the termination of contracts with
customers.
The effects of such circumstances may reduce the Issuer's revenues and deteriorate the results of its activity.
Risk related to business partners
Manufacturing activity in the IoT segment has been outsourced, primarily to China, and is concentrated in a few
manufacturers. Potential risks associated with key subcontractors are related to accurate and timely delivery or termination
of business relationships. Although, management believes there is a wide range of alternative suppliers, the possible
transfer of production to new partners and diversification of subcontractors may give rise to delays in deliveries and
additional costs, which may affect the ability of the companies in the Group to fulfill agreed orders from customers and
adversely affect the reputation and financial results of the Group.
Risks arising from new projects
The main activity of Allterco AD is investments in subsidiaries. There is a risk that some of the subsidiaries may not be
able to meet their objectives, resulting in a lower or negative return on investment.
The development of new products and services by Allterco AD’s subsidiaries is related to the investment in human
resources, software, hardware, materials, goods and services. In case the new products and services fail to be realised on
the market, such investments would be unjustified. This, in turn, would have a negative impact on the Company's expenses
and assets, as well as on the results of its operations. In order to manage the risk arising from new projects, the companies
of the Group make market and financial analyses with different scenarios, and in some cases discuss the concept of the
new service / product with potential customers.
Liquidity risk
With regard to the Group the manifestation of liquidity risk is associated with the possibility of a lack of timely and/or
sufficient available funds to meet all current obligations. This risk can occur both in case of a significant delay in payments
by the Company's debtors, and in case of insufficiently effective management of cash flows from the Company's activities.
Some of the companies in the Group use bank funding such as investment loans, overdrafts or revolving credit lines,
which can be used in case of liquidity problems.
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The Company implements a conservative liquidity management policy, through which it constantly maintains an optimal
liquid cash reserve and a good ability to finance its business activity. In order to control the risk, the Company is trying
to pay its liabilities within the agreed deadlines. The Company monitors and controls the actual and estimated cash flows
for future periods and maintains a balance between the maturity limits of the Company's assets and liabilities.
8. SIGNIFICANT EVENTS AFTER THE DATE OF PREPARATION OF THE ANNUAL FINANCIAL
STATEMENTS
The events after the reporting date are disclosed in Note 11 to the 2022 consolidated financial statements.
9. CURRENT TRENDS AND POSSIBLE FUTURE DEVELOPMENT OF THE COMPANY
Allterco AD does not carry out direct production activities. The production activity is carried out by the subsidiaries in the
Group.
In 2023, Allterco AD will continue to operate in the following main areas:
Name of company Areas of activity for 2023
Allterco AD – parent company 1. Observation, control and decision-making on
important issues affecting subsidiaries as sole
proprietor or majority owner through:
applying the principles of good corporate governance;
providing efficient and transparent work conditions;
improving the quality of services/products offered;
2. Transactions with assets of the Company and its
subsidiaries
3. Management structure establishment
4. Funding the investments and the working capital of
subsidiaries
5. Establish a unified financial reporting and
accounting policy.
Allterco Trading EOOD 1. Production of children’s watches and trackers;
2. B2B trade and distribution of IoT devices,
developed or produced by Allterco Robotics EOOD
and other companies in the Group.
Allterco Robotics EOOD, Bulgaria 1. Development, production and sale of IoT devices
2 Development activity in the sphere of IoT devices
Allterco Properties EOOD, Bulgaria Provision of offices and car rental.
Allterco Europe GmbH, Germany Trade and distribution of IoT products in Europe
Shelly USA Inc (previous name Allterco Robotics US) Inc.,
USA
Trade and distribution of IoT products in North and
South America.
10. RESEARCH AND DEVELOPMENT ACTIVITIES
The Company has not carried out any research and development activities and is not planning such activities in the
foreseeable future. The Allterco Robotics EOOD subsidiary carried out such activity in 2022.
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11. INFORMATION ON ACQUISITION OF OWN SHARES REQUIRED UNDER ART. 187D OF THE
COMMERCE ACT
11.1. Number and nominal value of own shares acquired and transferred during the year, their capital
share, as well as acquisition or the transfer price
Allterco AD purchased own shares during the reporting period. As of December 31, 2022, the Company owns 40,000
own shares, representing 0.22% of its capital.
11.2. Number and nominal value of own shares and their capital share
As of the end of the reporting period, the Company’s o wn shares are as specified in item 11.1. above.
12. INFORMATION REQUIRED UNDER ART. 247 ДOF THE COMMERCE ACT
12.1. Total remuneration received by the members of the Board of Directors during the year
The following remunerations were appointed to the members of the Board of Directors of Allterco AD in 2022:
Table 10
Full name Position Remuneration / thousand
BGN
Gregor Bieler Chairman of the Board of Directors 166
Dimitar Stoyanov Dimitrov Executive Director 60
Wolfgang Kirsch Executive Director 404
Svetlin Iliev Todorov Member of the Board of Directors 60
Nikolay Angelov Martinov Independent member 60
As of the end of the reporting period, the remunerations appointed to the members of the Board of Directors have been paid.
There are no provisions in the Company's Articles of Association regarding special rights or any privileges of the members of the
Board of Directors.
During the reporting year, some of the members of the Board of Directors received remuneration from the subsidiaries
for performing other functions, subject of the Report on the implementation of the Remuneration Policy.
12.2. Company’s shares and bonds acquired , owned and transferred by the members of the Board of
Directors during the year
As of the end of the reporting period, the shares owned by members of the Board of Directors of Allterco AD are:
Table 11
Name PERCENT OF THE CAPITAL
Svetlin Todorov 32,48%
Dimitar Dimitrov 32,48%
Nikolay Angelov Martinov * 0%
Wolfgang Kirsch 0%
Gregor Bieler** 0%
* Nikolay Martinov has no direct interest in the capital of the Issuer. The companies Unicom Consult EOOD, where he
is sole owner of the capital and Managing Director, Impetus Capital EOOD and Impetus Partners EOOD, where he is a
Manager and a partner holding 50% and 43.75% of the capital, respectively, as well as Imventure I KDA and Imventure
II KDA, where he is a representative of the legal entity Impetus Capital OOD, own respectively: Unicom Consult EOOD
- 84,750 shares (0.47%), Impetus Capital OOD 162 000 shares (0.9%), Impetus Partners OOD 405,000 shares (2.25%),
Imventure I KDA 123,288 shares (0.68%), Imventure II KDA - 68,493 shares (0.38%) in the Issuer's capital and a total
of 843,531 shares (4.686%) of voting rights in its General Meeting.
**Gregor Bieler holds less than 0.03% acquired before his appointment as member of the Board of Directors.
ALLTERCO AD
ANNUAL CONSOLIDATED REPORT ON THE ACTIVITY UIC 201047670
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail. 20
12.3. Rights of the members of the Board of Directors to acquire shares and bonds of the Company
The members of the Company's Board of Directors may freely acquire shares from the capital of the Company on a
regulated securities market in compliance with the provisions of the Law on Measures against Market Abuse with
Financial Instruments, Regulation (EU) No. 596/2014 of the European Parliament and of the Council of April 16, 2014
on market abuse (Market Abuse Regulation) and the Public Offering of Securities Act.
In accordance with the provision of Art. 19 of the Market Abuse Regulation, the members of the Company's Board of
Directors, other individuals with managerial functions in the Issuer, and individuals closely related to them, shall notify
the Company and the Financial Supervision Commission (FSC) in writing of any transaction carried by them with
Allterco AD’s shares within 3 working days after the transaction. The notification obligation does not apply when the
total amount of transactions made by an individual with managerial functions in the Issuer, or a closely individual does
not exceed EUR 5,000 within a calendar year.
12.4. Participation of the members of the Board of Directors in companies as unlimited partners, holding
more than 25 percent of the capital, as well as their participation in the management of other companies or
cooperatives as procurators, managers or board members as of the end of the reporting period
Table 12
Dimitar Dimitrov as of 31.12.2022
Participation in the governing and
supervisory bodies of other companies,
their participation as procurators and
unlimited partners
Participation in the capital of other
companies outside the Group of
Allterco AD
Companies in which the person
exercises control
DVR Review EOOD entered in the
Commercial Register at the Registry
Agency under Unified Identification
Code (UIC): 130554234, having its
registered seat and headquarters address
in the town of Samokov, 1, Zhitna
Charshiya Street, Floor 1
DVR Review EOOD entered in the
Commercial Register at the Registry
Agency under Unified Identification
Code (UIC): 130554234, having its
registered seat and headquarters address
in the town of Samokov, 1, Zhitna
Charshiya Street, Floor 1 - direct
DVR Review EOOD entered in the
Commercial Register at the Registry
Agency under Unified Identification Code
(UIC): 130554234, having its registered
seat and headquarters address in the town
of Samokov, 1, Zhitna Charshiya Street,
Floor 1 - direct
Auto Lex Consult EOOD entered in the
Commercial Register at the Registry
Agency under UIC 201113818, with
registered office in the city of Sofia,
Vitosha municipal district, 5A, Nikola
Petkov Blvd., Floor 4
(as of the date of this Report this
circumstance has ceased to exist)
Auto Lex Consult EOOD entered in the
Commercial Register at the Registry
Agency under UIC 201113818, with
registered office in the city of Sofia,
Vitosha municipal district, 5A, Nikola
Petkov Blvd., Floor 4- direct; ( as of the
date of this Report this circumstance has
ceased to exist)
Auto Lex Consult EOOD entered in the
Commercial Register at the Registry
Agency under UIC 201113818, with
registered office in the city of Sofia,
Vitosha municipal district, 5A, Nikola
Petkov Blvd., Floor 4– direct (as of the
date of this Report this circumstance has
ceased to exist)
Shelly USA (former name Allterco
Robotics US), USA, having its registered
seat and headquarters address in 5851 W.
Charleston Blvd, Las Vegas, NV 89146,
USA - indirect
Teracomm OOD, UIC 131267949 having
its registered seat and headquarters
address in city of Sofia, Mladost district,
113A, Tsarigradsko Shose Blvd - direct
Allterco Robotics EOOD, UIC
202320104, having its registered seat and
headquarters address in the city of Sofia,
103, Cherni Vrah Blvd. – indirect through
Allterco AD
Sat Health AD, entered in the
Commercial Register at the Registry
Agency under UIC 204705650, having its
registered seat and headquarters address
in the city of Sofia, Vitosha district,
Malinova dolina area, 4-6, Racho Petkov
Kazandzhiata Street, office 2
Web Engine OOD, UIC 200303120,
having its registered seat and
headquarters address in the city of Sofia,
Vitosha district 5A, Nikola Petkov Blvd.-
direct
Allterco Trading EOOD, UIC 203348672
having its registered seat and headquarters
address in the city of Sofia, 103, Cherni
Vrah Blvd. – indirect through Allterco AD
ALLTERCO AD
ANNUAL CONSOLIDATED REPORT ON THE ACTIVITY UIC 201047670
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail. 21
Dimitar Dimitrov as of 31.12.2022
Participation in the governing and
supervisory bodies of other companies,
their participation as procurators and
unlimited partners
Participation in the capital of other
companies outside the Group of
Allterco AD
Companies in which the person
exercises control
Shelly USA (former name Allterco
Robotics USA), USA, having its registered
seat and headquarters address in 5851 W.
Charleston Blvd, Las Vegas, NV 89146,
USA
Allterco Properties EOOD, UIC
204639442, having its registered seat and
headquarters address in the city of Sofia,
103, Cherni Vrah Blvd. – indirect through
Allterco AD
Allterco Asia Ltd. registered number
91440300MA5GMK2T5B, having its
registered seat and headquarters address at
number 716, Building A, XingHe Shiji,
Cai Tian road 3069, Gangxia, Futian,
Shenzhen, China – indirect through
Allterco AD
Allterco Europe GmbH, registered number
HRB 271205, having its registered seat
and headquarters address: Lothstr. 5,
80335 München, Federal Republic of
Germany - indirect through Allterco AD
Svetlin Todorov as of 31.12.2022
Participation in the governing and
supervisory bodies of other companies,
their participation as procurators and
unlimited partners
Participation in the capital of other
companies outside the Group of
Allterco AD
Companies in which the person exercises
control
Teracomm OOD, UIC 131267949 having
its registered seat and headquarters
address in city of Sofia, 113A,
Tsarigradsko Shose Blvd.
FF Film Haus OOD, UIC 130627604,
having its registered seat and
headquarters address in the city of
Sofia, 60, Osogovo Street - direct
Allterco Robotics EOOD, UIC 202320104,
having its registered seat and headquarters
address in the city of Sofia, 103, Cherni Vrah
Blvd. – indirect through Allterco AD
FF Film Haus OOD, UIC 130627604,
having its registered seat and
headquarters address in the city of Sofia,
60, Osogovo Street
Teracomm OOD, UIC 131267949
having its registered seat and
headquarters address in city of Sofia,
113A, Tsarigradsko Shose Blvd. -
20% - direct
Allterco Properties EOOD, UIC 204639442,
having its registered seat and headquarters
address in the city of Sofia, 103, Cherni Vrah
Blvd. – indirect through Allterco AD
Shelly USA (former name Allterco
Robotics USA), USA, having its
registered seat and headquarters address
in 5851 W. Charleston Blvd, Las Vegas,
NV 89146, USA
Web Engine OOD, UIC 200303120,
having its registered seat and
headquarters address in the city of
Sofia, 5A, Nikola Petkov Blvd. -
20 % - direct
Allterco Trading EOOD, UIC 203348672
having its registered seat and headquarters
address in the city of Sofia, 103, Cherni Vrah
Blvd. – indirect through Allterco AD
ALLTERCO AD
ANNUAL CONSOLIDATED REPORT ON THE ACTIVITY UIC 201047670
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail. 22
Svetlin Todorov as of 31.12.2022
Participation in the governing and
supervisory bodies of other companies,
their participation as procurators and
unlimited partners
Participation in the capital of other
companies outside the Group of
Allterco AD
Companies in which the person exercises
control
Shelly USA (former name Allterco Robotics
USA), USA, having its registered seat and
headquarters address in 5851 W. Charleston
Blvd, Las Vegas, NV 89146, USA
FF Film Haus OOD, UIC 130627604, having
its registered seat and headquarters address in
the city of Sofia, 60, Osogovo Street - direct
Allterco Europe GmbH, registered number
HRB 271205, having its registered seat and
headquarters address: Lothstr. 5, 80335
München, Federal Republic of Germany -
indirect through Allterco AD
Allterco Asia Ltd. registered number
91440300MA5GMK2T5B, having its
registered seat and headquarters address at
number 716, Building A, XingHe Shiji, Cai
Tian road 3069, Gangxia, Futian, Shenzhen,
China – indirect through Allterco AD
Nikolay Martinov - as of 31.12.2022
Participation in the governing and
supervisory bodies of other
companies, their participation as
procurators and unlimited partners
Participation in the capital of other
companies outside the Group of
Allterco AD
Companies in which the person exercises
control
Unicom Consult EOOD, UIC
121082655, having its registered seat
and headquarters address in the city of
Sofia 1619, Vitosha municipal district,
271, Tsar Boris III Blvd., Floor 5, Apt. 9
Unicom Consult EOOD, UIC
121082655, having its registered seat
and headquarters address in the city of
Sofia 1619, Vitosha municipal district,
271, Tsar Boris III Blvd., Floor 5, Apt. 9
- direct
Allterco Robotics EOOD, UIC 202320104,
having its registered seat and headquarters
address in the city of Sofia, 103, Cherni
Vrah Blvd. – indirect through Allterco AD
Online Media OOD, UIC:117004285,
having its registered seat and
headquarters address in the city of Sofia
1415, 11, Nevena Kokanova Street, fl. 5
Online Media OOD, UIC:117004285,
having its registered seat and
headquarters address in the city of Sofia
1415, 11, Nevena Kokanova Street, floor
5– direct and indirect through е Unicom
Consult EOOD, UIC 121082655
Allterco Properties EOOD, UIC 204639442,
having its registered seat and headquarters
address in the city of Sofia, 103, Cherni
Vrah Blvd. – indirect through Allterco AD
ALLTERCO AD
ANNUAL CONSOLIDATED REPORT ON THE ACTIVITY UIC 201047670
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail. 23
Nikolay Martinov - as of 31.12.2022
Participation in the governing and
supervisory bodies of other
companies, their participation as
procurators and unlimited partners
Participation in the capital of other
companies outside the Group of
Allterco AD
Companies in which the person exercises
control
Inbro OOD, UIC 121003506, having its
registered seat and headquarters address
in the city of Sofia 1619, Vitosha
District, 271, Tsar Boris III Blvd., fl. 5
United Commercial Outlets AD, UIC:
205329927, having its registered seat
and headquarters address in the city of
Sofia 1618, Ovcha Kupel municipal
district, Ovcha Kupel 1 residential
district, Block 48, Entrance B, Apt. 47 -
indirect through ImVenture I KDA, UIC:
204870431 and ImVenture II KDA, UIC
205737996
Allterco Trading EOOD, UIC 203348672
having its registered seat and headquarters
address in the city of Sofia, 103, Cherni
Vrah Blvd. – indirect through Allterco AD
Bioseek AD, UIC 204790412, having its
seat address and management address in
the city of Sofia 1505 Oborishte
municipal district, 42, Ilarion
Dragostinov Street, Apt. 37
Inbro OOD, UIC 121003506, having its
registered seat and headquarters address
in the city of Sofia 1619, Vitosha
municipal district, 271, Tsar Boris III
Blvd., fl. 5 - direct and indirect through
Unicom Consult EOOD, UIC
121082655
Shelly USA (former name Allterco Robotics
USA), USA, having its registered seat and
headquarters address in 5851 W. Charleston
Blvd, Las Vegas, NV 89146, USA - indirect
through Allterco AD
Biodit AD, UIC 203854303, having its
seat address and management address in
the city of Sofia 1756, Studentski
municipal district, 125, Kliment Ohridski
Blvd. - through Impetus Capital OOD,
UIC: 203592737
Impetus Capital OOD, UIC 203592737,
having its seat address and management
address in the city of Sofia 1784,
Mladost district, Mladost 1 residential
district, bl. 29А, entrance А, floor 8 -
direct
Allterco Europe GmbH, registered number
HRB 271205, having its registered seat and
headquarters address: Lothstr. 5, 80335
München, Federal Republic of Germany -
indirect through Allterco AD
ImVenture I KDA, UIC 204870431,
having its seat address and management
address in city of Sofia 1784, Mladost
municipal district, Mladost 1 residential
district, Block 29А, Entrance А, Floor 8,
Apt. 38 - as a representative representing
legal entity - Impetus Capital OOD, UIC
203592737
Impetus Partners OOD, UIC
205679429, having its registered seat
and headquarters address in the city of
Sofia 1784, Mladost municipal district,
Mladost 1 residential district, Block of
flats 29А, Entrance А, Floor 8 – indirect
through Unicom Consult EOOD, UIC
121082655 - direct
Allterco Asia Ltd. registered number
91440300MA5GMK2T5B, having its
registered seat and headquarters address at
number 716, Building A, XingHe Shiji, Cai
Tian road 3069, Gangxia, Futian, Shenzhen,
China – indirect through Allterco AD
ImVenture II KDA, UIC 205737996
Sofia 1784, Mladost municipal district,
Mladost 1 residential district, Block
29А, Entrance А, Floor 8, Apt. 38 - as a
representative representing legal entity -
Impetus Capital OOD, UIC: 203592737
Housmeister AD, UIC 203037803,
having its registered seat and
headquarters address in Sofia region,
Stolichna Municipality, Sofia 1404,
Bulgaria Blvd, No 53, floor 3 - direct
Unicom Consult EOOD, UIC 121082655,
having its registered seat and headquarters
address in the city of Sofia 1619, Vitosha
municipal district, 271, Tsar Boris III Blvd.,
Floor 5, Apt. 9 - direct
Impuls I AD, UIC 206421264, Sofia
1784, district Mladost, Mladost 1, block
29А, entrance А, floor 8, apt. 38 – as
representative of Impetus Capital OOD,
UIC: 203592737
Bioseek AD, UIC 204790412, having its
seat address and management address in
the city of Sofia 1505 Oborishte
municipal district, 42, Ilarion
Dragostinov Street, Apt. 37 - indirect
through Imventure I KDA, UIC:
204870431 and Imventure II KDA, UIC
205737996 and Impetus Capital OOD,
UIC 203592737
Online Media OOD, UIC:117004285,
having its registered seat and headquarters
address in the city of Sofia 1415, 11,
Nevena Kokanova Street, floor 5 - direct
ALLTERCO AD
ANNUAL CONSOLIDATED REPORT ON THE ACTIVITY UIC 201047670
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail. 24
Nikolay Martinov - as of 31.12.2022
Participation in the governing and
supervisory bodies of other
companies, their participation as
procurators and unlimited partners
Participation in the capital of other
companies outside the Group of
Allterco AD
Companies in which the person exercises
control
United Commercial Outlets AD, UIC
205329927, having its registered seat
and headquarters address in the city of
Sofia 1618, Ovcha Kupel municipal
district, Ovcha Kupel 1 residential
district, Block 48, Entrance B, Apt. 47
Inbro OOD, UIC 121003506, having its
registered seat and headquarters address in
the city of Sofia 1619, Vitosha municipal
district, 271, Tsar Boris III Blvd., fl. 5 -
direct
Impetus Capital OOD, UIC 203592737,
having its seat address and management
address in the city of Sofia 1784,
Mladost district, Mladost 1 residential
district, bl. 29А, entrance А, floor 8, apt.
38
Impetus Capital OOD, UIC 203592737,
having its seat address and management
address at city of Sofia 1784, Mladost
district, Mladost 1 residential district, bl.
29А, entrance А, floor 8, apt 38 - direct
Impetus Partners OOD, UIC 205679429,
having its registered seat and
headquarters address in the city of Sofia
1784, Mladost municipal district,
Mladost 1 residential district, Block
29А, entrance А, floor 8
Impetus Partners OOD, UIC 205679429,
having its registered seat and headquarters
address in the city of Sofia 1784, Mladost
municipal district, Mladost 1 residential
district, Block 29А, entrance А, floor 8 –
indirect through Unicom Consult EOOD,
UIC 121082655
Storied Data Inc., having its registered
seat and headquarters address at: State of
Delaware, 251 Little Falls Drive, city of
Wilmington, Delaware 19808, Country
of New Castle, USA
Biodit AD, UIC 203854303, having its seat
address and management address in the city
of Sofia 1756, Studentski municipal district,
125, Kliment Ohridski Blvd – indirect
through Impetus Capital OOD, UIC
203592737
Bioseek AD, UIC 204790412, having its
seat address and management address in the
city of Sofia 1505 Oborishte municipal
district, 42, Ilarion Dragostinov Street, Apt.
37 -indirect through Imventure I KDA, UIC
204870431
ImVenture I KDA, UIC 204870431, Sofia
1784, Mladost municipal district, Mladost 1
residential district, Block 29А, Entrance А,
Floor 8, Apt. 38 – indirect through Impetus
Capital OOD, UIC 203592737
ImVenture II KDA, UIC 205737996 Sofia
1784, Mladost municipal district, Mladost 1
residential district, Block 29А, Entrance А,
Floor 8, Apt. 38 – indirect through Impetus
Capital OOD, UIC 203592737
ALLTERCO AD
ANNUAL CONSOLIDATED REPORT ON THE ACTIVITY UIC 201047670
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail. 25
Nikolay Martinov - as of 31.12.2022
Participation in the governing and
supervisory bodies of other
companies, their participation as
procurators and unlimited partners
Participation in the capital of other
companies outside the Group of
Allterco AD
Companies in which the person exercises
control
ImPuls I AD, UIC 206421264, Sofia 1784,
district Mladost, Mladost 1, block 29А,
entrance А, floor 8, ap. 38 – indirect through
Impetus Capital OOD, UIC 203592737
United Commercial Outlets AD, UIC
205329927, having its registered seat and
headquarters address in the city of Sofia
1618, Ovcha Kupel municipal district,
Ovcha Kupel 1 residential district, Block 48,
Entrance B, Apt. 47 – indirect through
ImVenture I KDA, UIC 20487043 and
ImVenture II KDA, UIC 205737996
А4Е OOD, UIC 203608928, having its
registered seat and headquarters address in
the city of Sofia 1618, Ovcha Kupel district,
56, Buket Street, floor 15, аpt. 59 – indirect
through Impetus Capital OOD, UIC
203592737, ImVenture I KDA, UIC
204870431 and ImVenture II KDA, UIC
205737996
Wolfgang Kirsh as of 31.12.2022
Participation in the governing and
supervisory bodies of other companies,
their participation as procurators and
unlimited partners
Participation in the capital of other
companies outside the Group of
Allterco AD
Companies in which the person
exercises control
Allterco Europe GmbH, registration
number HRB 271205, registered office:
Lothstr. 5, 80335 München, Germany - –
indirect through Allterco AD
Vitaboni AD, registration number HRB
226533 at the Munich Registry Office,
having its registered seat and
headquarters address: Schellingstr. 48,
80799 München
Allterco Robotics EOOD, UIC
202320104, having its registered seat and
headquarters address in the city of Sofia,
103, Cherni Vrah Blvd. – indirect through
Allterco AD
Vitaboni AD, registration number HRB
226533 at the Munich Registry Office,
having its registered seat and
headquarters address: Schellingstr. 48,
80799 München (as of the date of this
Report this circumstance has ceased to
exist)
Allterco Trading EOOD, UIC 203348672
having its registered seat and headquarters
address in the city of Sofia, 103, Cherni
Vrah Blvd. – indirect through Allterco AD
Allterco Properties EOOD, UIC
204639442, having its registered seat and
headquarters address in the city of Sofia
103, Cherni Vrah Blvd. – indirect through
Allterco AD
ALLTERCO AD
ANNUAL CONSOLIDATED REPORT ON THE ACTIVITY UIC 201047670
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail. 26
Wolfgang Kirsh as of 31.12.2022
Participation in the governing and
supervisory bodies of other companies,
their participation as procurators and
unlimited partners
Participation in the capital of other
companies outside the Group of
Allterco AD
Companies in which the person
exercises control
Shelly USA (former name Allterco
Robotics USA), USA, having its registered
seat and headquarters address in 5851 W.
Charleston Blvd, Las Vegas, NV 89146,
USA - indirect through Allterco AD
Allterco Asia Ltd., registered number
91440300MA5GMK2T5B, having its
registered seat and headquarters address at
number 716, Building A, XingHe Shiji,
Cai Tian road 3069, Gangxia, Futian,
Shenzhen, China – indirect through
Allterco AD
Allterco Europe GmbH, registered number
HRB 271205, having its registered seat
and headquarters address: Lothstr. 5,
80335 München, Federal Republic of
Germany - indirect through Allterco AD
Vitaboni AD, registration number HRB
226533 at the Munich Registry Office
having its registered seat and headquarters
address: Schellingstr. 48, 80799 München
(as of the date of this Report this
circumstance has ceased to exist)
Gregor Beiler as of 31.12.2022
Participation in the governing and
supervisory bodies of other companies,
their participation as procurators and
unlimited partners
Participation in the capital of other
companies outside the Group of
Allterco AD
Companies in which the person
exercises control
Digital OOD, having its registered seat
and headquarters address at 49,
Reuterweg Street, 60323 Frankfurt,
Federal Republic of Germany
ICapital Partners AD having its
registered seat and headquarters address
at Bundesstrace 3, Switzerland – 63.2,
Zug
Allterco Robotics EOOD, UIC
202320104, having its registered seat and
headquarters address in the city of Sofia,
103, Cherni Vrah Blvd. – indirect through
Allterco AD
Dustin Group AB
Augustendalsvägen 7
131 52, Nacka Strand, Stockholm,
Sweden (as of the date of this Report this
circumstance has ceased to exist)
Padres Consulting OOD having its
registered seat and headquarters address,
25, Bayerbrunnerstrasse, Federal
Republic of Germany – 81479, München
Allterco Trading EOOD, UIC 203348672,
having its registered seat and headquarters
address in the city of Sofia 103, Cherni
Vrah Blvd. – indirect through Allterco AD
Allterco Properties EOOD, UIC
204639442, having its registered seat and
headquarters address in the city of Sofia
103, Cherni Vrah Blvd. – indirect through
Allterco AD
ALLTERCO AD
ANNUAL CONSOLIDATED REPORT ON THE ACTIVITY UIC 201047670
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail. 27
Gregor Beiler as of 31.12.2022
Participation in the governing and
supervisory bodies of other companies,
their participation as procurators and
unlimited partners
Participation in the capital of other
companies outside the Group of
Allterco AD
Companies in which the person
exercises control
Shelly USA (former name Allterco
Robotics USA), USA, having its registered
seat and headquarters address in 5851 W.
Charleston Blvd, Las Vegas, NV 89146,
USA - indirect through Allterco AD
Allterco Asia Ltd., registered number
91440300MA5GMK2T5B, having its
registered seat and headquarters address at
number 716, Building A, XingHe Shiji,
Cai Tian road 3069, Gangxia, Futian,
Shenzhen, China – indirect through
Allterco AD
Allterco Europe GmbH, registered number
HRB 271205, having its registered seat
and headquarters address: Lothstr. 5,
80335 München, Federal Republic of
Germany - indirect through Allterco AD
12.5. Agreements signed in the reporting period with the members of the Board of Directors or related
to them parties that fall outside of the usual scope of business activity of the Company or deviate significantly
from the market conditions
In 2022, no contracts were concluded with the members of the Board of Directors of the Company or with person related
to them, that go beyond the ordinary activities of the Company or significantly deviate from market conditions.
12.6. The planned economic policy in the next year, incl. expected investments and staff development,
expected income from investments and development of the Company, as well as forthcoming transactions of
material importance for the Company’s activity
Changes in the economic policy of the Company in 2023 are not foreseen. The revenue of the Group will continue to be
generated mainly from sale of smart devices.
It is expected that in 2023 the number of employees in the subsidiaries will increase due to:
1. the expanding of the market presence
2. increase of the R/D capacity of the subsidiaries
13. BRANCHES OF THE COMPANY
The Company has no registered branches.
One of the subsidiaries – Allterco Robotics EOOD has a registered branch in Ireland in 2022.
14. FINANCIAL INSTRUMENTS USED BY THE COMPANY
Allterco AD and its subsidiaries have not used financial instruments in 2022 to hedge risks from changes in foreign
currency exchange rates, interest rates or uncertainty of cash flows. During the reporting year, the Company and its
subsidiaries have not performed currency risk hedging transactions.
The Allterco AD has long-term financial instruments and during the reporting period it sold part of them.
ALLTERCO AD
ANNUAL CONSOLIDATED REPORT ON THE ACTIVITY UIC 201047670
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The Company could have exposure to credit, liquidity, market, interest rate, currency and operational risks arising from
the use of financial instruments.
Information regarding financial instruments and financial risk management is disclosed in Note 8 to the consolidated
financial statements.
15. ADDITIONAL INFORMATION UNDER APPENDIX No 2 OF ORDINANCE No 2 OF FSC
15.1. Information about the value and quantity on the main categories of goods, products and/or
services provided, indicating their share in the issuer's sales revenue as a whole and the changes occurring
during the accounting financial year
Allterco AD does not carry out direct pro duction activities. The production activity is carried out by the issuer’s
subsidiaries.
15.2. Information on revenues broken down by category of activity, internal and external markets as
well as information on the sources of supply of materials necessary for the production of goods or the provision
of services reflecting the degree of dependence on each individual seller or buyer/user, in case the relative
share of any of them exceeds 10 per cent of the costs or revenues from sales, information is provided for each
person separately, about their share in the sales or purchases and their relations with the issuer:
Information on revenue, broken down by main category of activities is presented in p. 3.1. of this Report.
15.3. Information about concluded significant deals
During the reporting period Allterco AD has concluded transactions within the ordinary scope of business, which might
be considered significant due to their specifics:
• In the first quarter of 2022 Allterco AD has increased the capital of its subsidiary Allterco Robotics EOOD. The
registered capital of Allterco Robotics EOOD was increased from BGN 1 500 000 (EUR 766 937.82) with
BGN 5 500 000 (EUR 2 812 105.34) to BGN 7 000 000 (EUR 3 579 043.16), by subscribing 5 500 000 company
shares with nominal value of BGN 1 each;
• In the second quarter of 2022 Allterco AD has approved financing of the activities of the subsidiary Shelly Inc.,
USA with the following parameters: (1) providing additional cash contribution in the amount of USD 1 million,
for a one- year term at annual interest rate of 1% and (2) increase of the capital in the amount of USD 500 000.
At the end of the reporting period the financing was provided fully to the subsidiary.
• In the second quarter of 2022 the Company has acquired 40 000 own shares, representing 0,22% of the capital
of Allterco AD through over-the-counter transactions (OTC transactions) at a price of BGN 19,50 for share. At
the end of the reporting period the Company continues to hold these shares.
• Long-term investments have been made after the end of the reporting period, in January 2023 the Company
completed phase I of the acquisition of the Slovenian IoT provider GOAP Računalniški inženiring in
avtomatizacija procesov d.o.o. Nova Gorica, („GOAP” or “Acquiree”) representing the acquisition of 60% of
acquiree’s equity. The transaction is subject to share purchase agreements ("SPA"), which have been signed with
all four GOAP shareholders. The total transaction price for phase I amounts to EUR 2 million.
The remaining 40% of the equity of Acquiree, owned by the three owners – individuals, are subject to an options contract,
which was signed along with the acquisition agreements. Under the options contract Allterco AD has an unconditional
option to purchase (call option), whereas the sellers – conditional option to sell (put option) two packages of company
shares (the exercise of any of the sellers’ options is subject to achieving in the period 2023 -2025 of specific minimum
criteria for KPI, EBITDA and revenue). One of the options is for the acquisition of 16%, whereas the other is for the
acquisition of 24% of the equity of GOAP. The total price for the shares upon exercise of the options depends on the
extent of realization of the conditions for this and may vary between EUR 699 999.70 (BGN 1 369 080.41) and EUR 3
449 998.60 (BGN 6 747 610.76).
ALLTERCO AD
ANNUAL CONSOLIDATED REPORT ON THE ACTIVITY UIC 201047670
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail. 29
15.4. Information on transactions concluded between the issuer and related parties during the
reporting period, proposals for such transactions as well as transactions that are outside its ordinary activity
or materially deviate from the market conditions, where the issuer or its subsidiary is a party with indication
of the value of the transactions, the nature of the relationship and any information necessary to assess the
impact on the issuer's financial position
During the reporting period the Company has not entered into any transactions with interested parties within the meaning
of POSA.
The Company has not entered into transactions with its subsidiaries and associated companies that are outside of its usual
business or significantly deviate from market conditions. Transactions in the ordinary course of business with subsidiaries
include:
• The Company uses cars rented from subsidiary at the total amount of BGN 17 thousand (reported as
expenses for depreciation of right-of-use assets in compliance with IFRS 16; the gross book value of the
liability is BGN 34 thousand and the current portion of the liability is BGN 17 thousand).
• Allterco AD has granted an additional cash contribution to its subsidiary Allterco Trading EOOD in the
amount of EUR 900 000 and the term was extended with one more year. The interest income for the period
amounts to BGN 5 thousand. The additional cash contribution was repaid fully in the beginning of а 2022.
• Allterco AD has increased the capital of its subsidiary Allterco Robotics EOOD with BGN 5 500 000 (EUR
2 812 105.34) to BGN 7 000 000 (EUR 3 579 043.16), by subscribing 5 500 000 company shares with
nominal value of BGN 1 each.
• The Board of Directors of Allterco AD has approved financing of the activities of the subsidiary Shelly,
USA with the following parameters: (1) providing additional cash contribution in the amount of USD 1
million, for a one- year term at annual interest rate of 1% and (2) increase of the capital in the amount of
USD 500 000. At the end of the reporting period the financing was provided fully to the subsidiary.
• At the end of 2022 Allterco AD has recognized income from dividend amounting to BGN 4 001 thousand
from its subsidiary Allterco Trading.
All transactions between companies within the Group are eliminated in the consolidated financial statement.
After the end of the reporting period, Allterco AD, in its capacity as a lender, provided the amount of EUR 500,000 to its
subsidiary under the following conditions: repayment period 31.12.2029, interest - according to statistical data published
by the Bulgarian National Bank regarding "Interest rates and volumes on loans, other than overdraft to non-financial
corporations sector (in EUR for a period of more than 5 years)".
15.5. Information about events and indicators of unusual for the issuer nature that have a significant
impact on its activities and its realized revenues and expenses; assessment of their impact on results in the
current year
During the reporting period there were no events or indicators of unusual nature for Allterco AD and its subsidiaries.
Allterco AD is a joint stock company - holding, whose scope of business includes acquisition, management, assessment
and sale of participations in Bulgarian and foreign companies. Within the scope of activities during the reporting period
the Company has carried out transactions as indicated in p. 15.3 of this Report.
15.6. Information about off-balance-sheet transactions - nature and business purpose, indication of the
financial impact of transactions on the business if the risk and benefits of those transactions are material to
the issuer and disclosure of such information is material to the issuer's financial condition
During the reporting period the Company has not entered into transactions that were conducted off-balance sheet.
15.7. Information on shareholdings of the issuer, its main investments in the country and abroad (in
securities, financial instruments, intangible assets and real estate) as well as investments in equity securities
outside its Group of companies within the meaning of the Accountancy Act and the sources/ways of financing
As of the end of the reporting period Allterco AD owns shares of subsidiaries as indicated in p. 2 of this Report.
The Company owns 593 536 shares of the capital of Link Mobility Group Holding ASA, “Link Holding”. The indicated
number of shares represents the remaining part of a total of 1 345 180 shares, received as part of (20%) of the price in
accordance with Share Purchase Agreement (SPA) dated 29.06.2019 for the sale of telecommunications business of
Allterco AD in Europe, concluded with Link Mobility Group AS.
ALLTERCO AD
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15.8. Information about loan agreements concluded by the issuer or its subsidiary or parent company,
in their capacity of borrowers, with specification of their terms, including deadlines for repayment, as well as
information on guarantees and commitments
Allterco AD is a borrower under a Mortgage (investment) loan agreement dated 25.08.2017, concluded with KBC Bank,
secured by a guarantee of the subsidiary Allterco Properties EOOD.
The Company has assumed joint liability and a guarantee obligation for securing the following bank financing agreements
concluded by its subsidiary Allterco Robotics EOOD with KBC Bank. For further information see Note 5 of the
consolidated financial statements of the Company as of December 31, 2022.
15.9. Information on loan agreements concluded by the issuer, its subsidiary or parent company, in
their capacity as lenders, including the provision of guarantees of any kind, including to related parties, with
specification of their special terms, including the final payment deadlines, and the purpose for which they were
granted
The Board of Directors of Allterco AD has approved financing of the activities of the subsidiary Shelly USA Inc., USA
with the following parameters: (1) providing additional cash contribution in the amount of USD 1 million, for a one- year
term at annual interest rate of 1% and (2) increase of the capital in the amount of USD 500 000. At the end of the reporting
period the financing was provided fully to the subsidiary.
During the reporting period Allterco AD has not concluded other loan agreements in its capacity of a lender. After the
end of the reporting period, Allterco AD, in its capacity as a lender, provided the amount of EUR 500,000 to its subsidiary
under the following conditions: repayment period 31.12.2029, interest - according to statistical data published by the
Bulgarian National Bank regarding "Interest rates and volumes on loans, other than overdraft to non-financial corporations
sector (in EUR for a period of more than 5 years)".
The subsidiaries have provided guarantees in the form of joint liability under bank financing agreements, as indicated in
Note 5 of the consolidated financial statements of the Company.
15.10. Information on the use of funds from new issue of securities during the reporting period
In 2020, the Company issued new securities as a result of a successful capital increase through an initial public offering.
In the course of the offer were subscribed and paid 2 999 999 (two million nine hundred and ninety-nine thousand nine
hundred and ninety-nine) dematerialized ordinary registered voting shares with a nominal value of one lev.
As of the end of the reporting period, the Company has spent part of the funds from the new issue of shares, as follows:
• Expansion and building of the distribution network: participation in local and international exhibitions and
registration of a subsidiary in Germany and Western Europe which will build on the distribution network and
develop new sales channels in Western Europe;
• Working capital: increase of inventories of production of the subsidiaries and of critical electronic components
for the manufacturing process.
• Funding of subsidiaries, developing new markets.
• R&D development: increase of IT and engineering staff; expenses for device certification.
15.11. Analysis of the relationship between the achieved financial results reflected in the financial
statements for the financial year and previously published forecasts of these results
Allterco AD has not published forecasts for the current financial year on a consolidated basis. The Company has published
forecasts for 2022 only on a consolidated basis as part of the Prospectus for public offering of shares from the capital
increase of Allterco AD, together with the amendments thereto.
15.12. Analysis and evaluation of the policy on financial resources management, specifying the
capabilities for servicing the obligations, possible threats and measures that the issuer has undertaken or is
about to undertake to eliminate the risks
ALLTERCO AD and its subsidiaries carry out its operational activities in a way that the management of the financial
resources is exclusively subordinated to the maintaining of such a capital structure that will allow to combine the lower
risk of using only own funds with the higher efficiency and flexibility of cash flow under conditions of debt financing so
that the Company and its subsidiaries are able at any time to switch from one type of financing to another, depending on
their specific needs.
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ANNUAL CONSOLIDATED REPORT ON THE ACTIVITY UIC 201047670
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Impact of COVID 19 on the business activity:
In 2022, the management continued to successfully implement certain stabilization measures to limit potential negative
impact on the Company's personnel and/or financial position. As a result of these measures (introduction of a hybrid work
option for the Group’s employees; timely resourcing of key production components), the Group is reporting a positive
trend in its business development and expects this trend to continue in next financial year.
15.13. Assessment of the possibilities for realization of investment intentions, indicating the amount of
the available funds and stating the possible changes in the structure of financing this activity
The Company plans to continue investing in 2023 in the development of Internet of Things through its subsidiaries.
The investment program will be funded with the Company’s own cash and raised funds, if necessary.
15.14. Information on changes that occurred during the reporting period in the key management
principles of the issuer and its Group of companies within the meaning of the Accountancy Act
During the reporting period, there were no changes in the basic principles for managing the Company and its Group of
companies.
15.15. Information on the main features of the internal control and the risk management system
applied by the issuer in the financial reporting process
A general description of the internal control and risk management system
The Company has a system of internal control and risk management ("the system") that guarantees the effective
functioning of the reporting and disclosure systems as well as an Audit committee. The system is built and functioning in
order to identify the risks associated with the Company's activities and their effective management. The Board of Directors
has the primary responsibility and role in establishing the internal control and risk management system. It performs both
managing and guiding function as well as ongoing monitoring.
The ongoing monitoring by the management consists of assessing whether the system is still appropriate for the Company
in a changed environment, whether it operates as expected and whether it adapts successfully to the changed conditions.
The evaluation of selected areas is in line with the Company's priorities. The evaluation is also commensurate with the
specifics of the Company and the impact of the identified risks.
The Board of Directors monitors the main features and characteristics of the system, including identified incidents and
the respective applied corrective actions.
The Audit Committee assists the Board of Directors in the execution of their control functions and powers with regard to
the financial reporting process, the internal control system, the audit process and monitoring on compliance of the
activities of Allterco AD with the provisions of applicable national and European legislation, as well as the Company's
internal policies. The Audit Committee holds regular meetings, fulfilling the functions assigned to it by law and the
General Meeting of Shareholders in accordance with the adopted Statutes.
Control environment
The control environment includes the functions of general management, as well as the attitude, awareness and actions of
the corporate management pertaining to internal control.
• Commitment for competence. The Board of Directors of the Company, as well as those involved in the internal
control and risk management process, have the relevant knowledge and skills necessary to perform the tasks.
The executive members of the Board of Directors of the Company monitor the levels of competence required
for the specific jobs and the ways in which those competences become required skills and knowledge.
• Participation of those charged with governance. The awareness of control in the Company is greatly
influenced by those charged with governance, namely the Board of Directors. The responsibilities of the
members of the Board of Directors are stated in the Statutes of the Company and the management contracts. In
addition, the Executive Members of the Board of Directors are also responsible for the supervision of the
effective functioning of the early warning procedures and of improving the Company's internal control.
• Philosophy and operational style of the management. The philosophy and operational style of the
management cover a wide range of characteristics. The attitudes of the members of the Board of Directors and
their actions in relation to financial reporting are manifested through the choice of more conservative accounting
principles.
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• Organizational structure. Establishing an appropriate organizational structure includes determining the main
areas of authority and responsibility and the appropriate hierarchical levels of accountability and reporting. The
Board of Directors assesses the appropriateness of the organizational structure of the Company, taking into
consideration the size and nature of the activities performed.
• Assignment of powers and responsibilities . When assigning powers and responsibilities of the employees in
the Company, the management shall take into account the business practices applicable to the sector, knowledge
and experience of employees and available resources available in the Company.
• Policies and practices related to human resource. When recruiting staff, the executive members of Board of
Directors focus on qualifications, previous professional experience, past accomplishments, and evidence of
integrity and ethical conduct. The purpose of corporate management is to hire competent and reliable employees.
Risk assessment process for the Company
The process of risk assessment is the basis on which the Board of Directors of the Company determines the risks to be
managed.
The Board of Directors of the Company identifies the following types of risk that affect the Company and its activities:
general (systematic) and specific (non-systematic) risks.
Systematic risks are related to the macro environment in which the Company operates, which is why in most cases they
cannot be controlled by the management team.
Non-systematic risks are directly related to the activities of the Company and depend mainly on corporate governance.
To minimize them, we rely on increasing the efficiency of internal company planning and forecasting, which provides
opportunities to overcome possible negative consequences of a risky event.
Each of the risks related to the country - political, economic, credit, inflation, foreign exchange, has its own significance,
but the interaction between them forms a comprehensive picture of the main economic indicators, market and competitive
conditions in the country in which the Company operates.
A detailed description of the risks typical for the activity of Allterco AD is presented in the item 7 above MAIN RISKS,
WHICH THE COMPANY FACES in this Report.
15.16. Information about the changes in the Board of Directors of the Company.
During the reporting period, changes were made to the composition of the Board of Directors of the Company. With a
decision of the extraordinary General Meeting of Shareholders held on 08.04.2022 the number and composition of the
Board of Directors was changed from three to five members and the current members were joined by Mr. Wolfgang
Kirsch and Mr. Gregor Beiler.
Pursuant to the decision of the General Meeting of Shareholders at its first meeting, held on 08.04.2022, the Board of
Directors elected from among its members - executive members, chairman and deputy chairman, as follows:
• Gregor Beiler – Chairman;
• Nikolay Martinov – Deputy Chairman;
• Dimitar Dimitrov – Executive Director and representative;
• Wolfgang Kirsch – Executive Director and representative;
• Svetlin Todorov – Member of the Board of Directors and representative;
The members of the Board of Directors representing the Company represent the Company jointly or severally.
15.17. Information on the amount of remuneration, rewards and/or additional benefits of each member
of the Board of Directors for the reporting financial year paid by the issuer and its subsidiaries, regardless of
whether they were included in the issuer's expenses or are attributable to distribution of profits, including:
А) received amounts and non -monetary remunerations
During the reporting period, the members of the Board of Directors received from Allterco AD cash /gross/ in the total
amount of BGN 750 thousand in accordance with the effective Remuneration Policy.
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• Dimitar Stoyanov Dimitrov – BGN 60 thousand.
• Svetlin Iliev Todorov – BGN 60 thousand.
• Nikolay Angelov Martinov – BGN 60 thousand.
• Wolfgang Kirsch – BGN 404 thousand.
• Gregor Beiler – BGN 166 thousand.
During the reporting period the following members of the Board of Directors received cash remuneration /gross/ from
subsidiaries:
• Dimitar Stoyanov Dimitrov – BGN 596 thousand.
• Svetlin Iliev Todorov – BGN 578 thousand.
• Wolfgang Kirsch – BGN 217 thousand.
The members of the Board of Directors have not received any non-cash remuneration during the reporting period.
B) contingent or deferred remuneration arising during the year, even if the remuneration is due at a later date
At the General Meeting of Shareholders held on December 13, 2022, a decision was adopted to amend the Remuneration
policy of the members of the Board of Directors (“Policy”), as well as Scheme for granting variable remuneration in
shares of the Company to the executive members of the Board of Directors for the period 2022 – 2025 (“Scheme”).
Based on the adopted decisions on December 13, 2022, at the General Meeting of the Shareholders a decision was taken
to grant variable remuneration in shares to the executive members of the Board of Directors of Allterco AD in the form
of options, according to the Scheme, namely:
(1) to the director Mr. Dimitar Dimitrov for the Period of execution of the Scheme is granted a package of conditional
options, the conditions and order for exercising are in accordance with the Scheme and Policy, and the remuneration may
reach maximum number of 296 750 shares of the capital of Allterco AD, as follows:
The basic options, each for the specified number of shares, the conditions of exercise of which include the achievement
of the specified Quarterly Average Share Price ("QASP") on one of the alternatively specified reference dates and other
conditions under the Scheme are as follows:
(i) 59 350 shares at QASP of at least ЕUR 11.16 ("Basic option 11.16 DD");
(ii) 44 512 shares at QASP of at least ЕUR 18.00 ("Basic option 18 DD");
(iii) 44 513 shares at QASP of at least ЕUR 27.00 ("Basic option 27 DD");
(iv) 44 512 shares at QASP of at least ЕUR 38.00 ("Basic option 38 DD");
(v) 44 513 shares at QASP of at least ЕUR 46.00 ("Basic option 46 DD");
(vi) 59 350 shares at QASP of at least ЕUR 55.00 ("Basic option 55 DD").
Reserve options, each for the indicated number of shares, whose conditions for exercise for the specified reference period
are determined according to the Scheme, as follows:
(i) 29 513 shares upon meeting conditions provided for in the Scheme for reference year 2022.
("Reserve option 2022 DD");
(ii) 34 675 shares upon meeting conditions provided for in the Scheme for reference year 2023.
("Reserve option 2023 DD");
(iii) 39 675 shares upon meeting conditions provided for in the Scheme for reference year 2024.
("Reserve option 2024 DD");
(iv) 44 512 shares upon meeting conditions provided for in the Scheme for reference year 2025.
("Reserve option 2025 DD").
(2) to the director Wolfgang Kirsch for the Period of execution of the Scheme is granted a package of conditional options,
the conditions and order for exercising are in accordance with the Scheme and Policy, and the remuneration may reach
maximum number of 593 500 shares of the capital of Allterco AD, as follows:
(i) 118 700 shares at QASP of at least ЕUR 11.16 ("Basic option 11.16 WK");
(ii) 89 025 shares at QASP of at least ЕUR 18.00 ("Basic option 18 WK");
(iii) 89 025 shares at QASP of at least ЕUR 27.00 ("Basic option 27 WK");
(iv) 89 025 shares at QASP of at least ЕUR 38.00 ("Basic option 38 WK");
(v) 89 025 shares at QASP of at least ЕUR 46.00 ("Basic option 46 WK");
(vi) 118 700 shares at QASP of at least ЕUR 55.00 ("Basic option 55 WK").
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This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail. 34
Reserve options, each for the indicated number of shares, whose conditions for exercise for the specified reference period
are determined according to the Scheme, are as follows:
(i) 59 025 shares upon meeting conditions provided for in the Scheme for reference year 2022.
("Reserve option 2022 WK");
(ii) 69 350 shares upon meeting conditions provided for in the Scheme for reference year 2023.
("Reserve option 2023 WK");
(iii) 79 350 shares upon meeting conditions provided for in the Scheme for reference year 2024.
("Reserve option 2024 WK");
(iv) 89 025 shares upon meeting conditions provided for in the Scheme for reference year 2025.
("Reserve option 2025 WK
The occurrence of the conditions for exercising the options granted by this decision is subject to assessment by the General
Meeting of Shareholders of Allterco AD after the expiration of the Period of execution according to the Scheme and with
the decision of the general meeting, which determines the number of shares that the directors of the Company are entitled
to receive upon exercising the respective options, the manner in which Allterco AD will secure the shares that it should
provide to the directors upon exercising the options granted to them is also determined. The choice of the method of
securing the shares to fulfil the obligations under the granted options should be oriented, when other conditions are equal,
to achieving the most favorable financial conditions possible for the Company and its shareholders, such as analysis and
justification of costs when applying different scenarios, together with the non-financial advantages and disadvantages of
the respective scenarios, should be presented in the motives for the proposal.
C) an amount owed by the issuer or its subsidiaries for the payment of pensions, retirement benefits or other
similar benefits.
The Company has prepared an actuarial evaluation of the retirement benefits of the staff as of December 31, 2022. As a
result of the evaluation long-term retirement obligations to employees are reported in the statement of financial position
amounting to BGN 112 thousand.
15.18. Information about shares of the issuer owned by members of the Board of Directors, procurators
and senior management, including the shares held by each of them as a percentage of the shares of each class,
as well as options provided by it on securities- the type and amount of the securities on which the options are
issued, the exercise price, the purchase price, if any, and the term of the options
As of the end of the reporting period, the shares held by members of the Board of Directors of Allterco AD are:
Table 14
Name PERCENTAGE OF THE CAPITAL
Svetlin Todorov 32,48 %
Dimitar Dimitrov 32,48 %
Nikolay Angelov Martinov * 0 %
Wolfgang Kirsc 0 %
Gregor Beiler** 0 %
* Nikolay Martinov has no direct interest in the capital of the issuer. The companies Unicom Consult EOOD, in which he is the sole owner of the capital
and manager, Impetus Capital OOD and Impetus Partners OOD, in which he is a partner respectively with 50% and 43,75 % of the capital and manager,
as well as ImVenture I KDA and ImVenture II KDA, in which he is a representative of the legal entity - Impetus Capital OOD, have respectively:
Unicom Consult EOOD – 84,750 shares (0.47%), Impetus Capital OOD 162,000 shares (0.9%), Impetus Partners OOD 405,000 shares (2.25%)
ImVenture I KDA 123,288 shares (0.68%), ImVenture II KDA - 68,493. shares (0.38%) in the capital of the issuer and a total 843 531 number of shares
(4.686%) of the voting rights in its General Meeting.
**Gregor Bieler holds less than 0.03% acquired before his appointment as member of the Board of Directors.
ALLTERCO AD
ANNUAL CONSOLIDATED REPORT ON THE ACTIVITY UIC 201047670
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail. 35
15.19. Information for the commitments known to the Company (including after the end of the financial
year), which in the future may result in changes in the relative portion of shares or bonds held by present
shareholders or bondholders
The Company is not aware of any commitments that may in the future result in a change in the number of shares or bonds
held by current shareholders.
In October 2020, the majority shareholders and members of the Board of Directors - Svetlin Iliev Todorov and Dimitar
Stoyanov Dimitrov concluded an Agreement for blocking the currently owned by them a total of 11 552 240 shares of
the Company's capital for a period of 3 years, as of the date of entry of the capital increase in the Commercial Register.
According to the terms of the agreement, the 6-months lock-up period expired as at the end of the reporting period and
the majority shareholders are currently entitled to trade up to 7% of their shareholdings. Svetlin Iliev Todorov and Dimitar
Stoyanov Dimitrov have agreed between themselves and in favor of the public listed company. The agreement is still in
force during the reporting period.
Another factor as a result of which changes might occur in the relative portion of shares owned by the current shareholders
is the decision taken on December 13, 2022 at the General Meeting of the Shareholders for granting variable remuneration
in shares to the members of the Board of Directors of Allterco AD in the form of options, according to the Remuneration
policy for the members of the Board of Directors and Scheme for granting variable remuneration in shares of the Company
to the members of the Board of Directors in the period 2022 – 2025 , as described in p. 15.17, letter „b“ of this Report .
15.20. Information on pending litigation, administrative or arbitration proceedings concerning payables
or receivables of the issuer amounting to at least 10 percent of its equity
At the end of the reporting period the Company and its subsidiaries have no pending litigation, administrative or
arbitration proceedings concerning payables and receivables of the issuer amounting to at least 10 percent of its equity.
In connection with the Share Purchase Agreement (SPA) concluded in 2019 between Allterco AD and Link Mobility
Group, Norway for the acquisition of its European telecommunications business, during the reporting period an out-of-
court agreement was reached for payment of the overdue last contribution, for which arbitration proceedings were initiated
before the International Arbitration in Vienna. As a result of the agreement, Link Mobility Group paid BGN 2,151
thousand of the amount due and the remaining part of BGN 920 thousand was written-off.
15.21. Information on the Investor Relations Director, including telephone and correspondence address
For Bulgaria
Denitsa Stefanova
Tel. +359 2 9571247 e-mail: investors@allterco.com
For Germany:
CROSS ALLIANCE communication GmbH, Sven Pauly
Tel: +49 89 125 09 0331, E-Mail: sp@crossalliance.de
www.crossalliance.de
15.22. Non-financial declaration under Article 41 of the Accounting Act - for financial statements on a
consolidated basis, respectively under Article 51 of the Accounting Act - for financial statements on a
consolidated basis, where applicable.
The Company has no obligation for non-financial reporting.
15.23. Other information at the discretion of the Company
Other circumstances which the Company considers may be relevant to the investors in deciding whether to buy, sell or
continue to hold shares are disclosed publicly, including in the Company's Report on the Activity and the Notes to the
consolidated financial statements.
ALLTERCO AD
ANNUAL CONSOLIDATED REPORT ON THE ACTIVITY UIC 201047670
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail. 36
16. CHANGES IN THE PRICE OF THE SHARES ON THE BSE
Date Volume Turnover Highest value Lowest value Opening value Closing value
18.01.2023 16 146 346 222.10 22,200 20,200 20,600 21,300
30.12.2022 65 128 1 333 161.95 20,900 19,900 19,950 20,600
30.11.2022 54 880 1 064 068.65 20,900 18,050 18,650 19,900
31.10.2022 51 521 872 052.30 18,650 15,800 16,500 18,650
30.09.2022 25 488 451 478.40 18,850 16,250 18,800 16,700
31.08.2022 95 508 1 772 671.75 20,500 17,800 17,900 18,800
29.07.2022 43 301 775 046.00 18,550 17,500 18,300 17,950
30.06.2022 34 228 633 077.35 19,000 17,600 18,500 18,750
31.05.2022 27 401 499 185.55 19,750 17,050 19,750 18,000
29.04.2022 51 828 1 042 375.50 21,300 18,750 19,000 19,800
31.03.2022 123 107 2 105 993.00 19,500 14,000 18,800 19,000
28.02.2022 55 488 1 081 219.70 21,400 16,700 20,000 19,000
31.01.2022 81 865 1 574 830.20 22,000 17,500 21,800 19,800
Source: Investor.bg
Information on the trading in the shares of Allterco AD during the reporting period on the Frankfurt Stock Exchange is
available at https://www.boerse-frankfurt.de/equity/allterco-jsco/price-history/historical-prices-and-volumes
ALLTERCO AD
ANNUAL CONSOLIDATED REPORT ON THE ACTIVITY UIC 201047670
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail. 37
17. INFORMATION PURSUANT TO ART. 10, ITEM 4 OF REGULATION NO. 2 OF THE FINANCIAL
SUPERVISION COMMISSION REGARDING THE PUBLISHED INSIDE INFORMATION UNDER ART.
7 OF REGULATION (EC) NO 596/2014 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL
OF 16 APRIL 2014 ON MARKET ABUSE (MARKET ABUSE REGULATION) AND THE NEWS AGENCY
OR OTHER MEDIA CHOSEN BY THE ISSUER THROUGH WHICH THE COMPANY MAKES THE
INSIDE INFORMATION PUBLIC.
Detailed information on significant events that occurred during the reporting period for Allterco AD, including inside
information within the meaning of Article 7 of Regulation (EU) No 596/2014 of the European Parliament and of the
Council of 16 April 2014 on Market Abuse (Market Abuse Regulation), as well as other information that could be relevant
for investors is regularly disclosed by the Company in accordance with regulatory requirements (“regulated information”).
The Company is disclosing the regulated information to the public through a selected information medium. All
information provided to the media in full unedited text is available at: http://www.x3news.com/ The required information
is submitted to the FSC - through the unified electronic information submission system established and maintained by the
FSC - e-Register. The information is also available on the Company's website at: https://allterco.com and inside
information for the reporting year is available in the dedicated section “for investors” on the website.
In relation to the Company’s shares being listed on the Frankfurt Stock Exchange and the requirements of this regulated
market, inside information is provided simultaneously also through the electronic reporting system, created and
maintained by Deutsche Börse AG - Exchange Reporting System (ERS) The inside information, distributed via ERS, is
published on the investor portal of Deutsche Börse ( https://www.boerse-frankfurt.de/) and https://www.dgap.de/ via
authorized intermediary EQS Group.
Date: 2.05.2023
Executive Director:
/Dimitar Dimitrov/
ALLTERCO AD
CORPORATE GOVERNANCE STATEMENT UIC 201047670
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail. 38
CORPORATE GOVERNANCE STATEMENT
OF ALLTERCO AD
in accordance with the provisions of
art. 100n, para. 8 of the Public Offering of Securities Act
for the period from 01.01.2022 to 31.12.2022
This Corporate Governance Statement of Allterco AD (the “Company”) has been prepared in accordance with the
requirements of art. 100n, para. 8 of the Public Offering of Securities Act (POSA) in connection with Art. 11, item 1 of
REGULATION No. 2 of 09.11.2021 on initial and subsequent disclosure of information during public offering of
securities and admission of securities to trading on a regulated market and applies to the period 01.01.2022 - 31.12. .2022
(the "Reporting Period")
1. Information whether ALLTERCO AD complies, as appropriate, with the Corporate Governance Code,
approved by the Deputy Chairman, or another corporate governance code
ALLTERCO AD and its management comply, as appropriate, with the National Corporate Governance Code. Some of
the recommendations of the National Code are not yet fully implemented by the corporate management of the Company,
but the Board of Directors is committed to continue to bring the activities of ALLTERCO AD in line with them in 2023.
ALLTERCO AD does not implement other corporate governance practices in addition to the National Corporate
Governance Code
The subsidiaries of "ALLTERCO" AD are not public entities and their activities are not subject to the principles and
provisions of the National Corporate Governance Code, except for the provisions concerning the internal control and risk
management systems, which are applied at the Group level. A large part of the provisions of the Code are also inapplicable
due to the legal and organizational form of the entities and the sole ownership.
2. Explanation by ALLTERCO AD which parts of the National Corporate Governance Code are not observed and
what are the reasons for this are
During the reporting period, the activities of the Board of Directors of ALLTERCO AD were carried out in full
compliance with the regulatory requirements set out in the Public Offering of Securities Act and the acts on its
implementation, and the Statutes of the Company. The corporate management of ALLTERCO AD considers that there
are still parts of the National Corporate Governance Code that the Company does not comply with, but in the following
reporting period the management will continue to perform all necessary legal and factual actions to bring the activities in
line with the principles and recommendations of the Code, as well as best practices in the field of corporate governance.
The Code is applied on the basis of the “observe or explain” principle . This means that the Company complies with the
Code, and in case of deviation, its management clarifies the reasons.
І. Chapter One – Corporate management
ALLTERCO AD is a Company with a one-tier management system and is managed by a Board of Directors.
Functions and obligations
The Board of Directors steers and controls independently and responsibly the activities of the Company in accordance
with the established vision, goals, strategies of the Company and the interests of shareholders and stakeholders.
The Board of Directors monitors the results of the Company’s activities on a quarterly and annual basis and, if necessary,
initiates change in the management of the activities.
ALLTERCO AD
CORPORATE GOVERNANCE STATEMENT UIC 201047670
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail. 39
The Board of Directors treats all shareholders equally, acts in their interest and with due diligence.
The members of the Board of Directors are guided in their activities by the generally accepted principles of integrity and
managerial and professional competence. The Board of Directors has not adopted a Code of Ethics.
In performing its functions, the Board of Directors strives to follow the economic, social and environmental priorities of
the Company.
The Board of Directors has built and ensured the functioning of a risk management system, including for internal control
and internal audit.
The Board of Directors has ensured and controls the integrated operation of the accounting and financial reporting
systems.
The Board of Directors promotes the implementation and observes the compliance by the subsidiaries of the adopted
principles for sustainable development at the group level, thereby contributing to the establishment of a culture of
sustainable development.
The Board of Directors has ensured and controls the integrated operation of the accounting and financial reporting
systems.
The Board of Directors provides guidelines, approves and controls the implementation of the Company’s business plan,
substantial transactions, as well as other activities stipulated in its statutes.
In accordance with the requirements of the Public Offering of Securities Act, the Board of Directors monitors all
substantial transactions and approves them. If there are transactions, which individually or collectively exceed the
thresholds specified in Art. 114, para. 1 of the Public Offering of Securities Act, the Board of Directors prepares a
motivated report and adopts a decision to convene a General Meeting of Shareholders, at which the shareholders authorize
it to carry out these transactions.
The Board of Directors reports on its activities to the General Meeting of Shareholders, submitting the annual activity
report and the Report on the Implementation of the Remuneration Policy for approval by the shareholders.
Election and dismissal of members of the Board of Directors
The General Meeting of Shareholders elects and dismisses the members of the Board of Directors in accordance with the
law and the Statutes of the Company, as well as in accordance with the principles of continuity and sustainability of the
work of the Board of Directors.
In case of proposals for election of new members of the Board of Directors, the principles of compliance of the candidates’
competence with the nature of the National Corporate Governance Code in the activity of the Company are observed.
All members of the Board of Directors meet the legal requirements for holding office. The functions and obligations of
the corporate management, as well as its structure and competence are in accordance with the requirements of the Code.
The contracts for assignment of the management, concluded with the members of the Board of Directors, define their
obligations and tasks, the criteria for the amount of their remuneration, their obligations for loyalty to the Company and
the grounds for dismissal.
During the reporting financial year, ALLTERCO AD implemented the Remuneration Policy of the members of the Board
of Directors, adopted by the Annual General Meeting of Shareholders, last modified through decision dated 13.12.2022.
The remuneration of the members of the Board of Directors and information on its amount is duly disclosed in the activity
report of the Board of Directors, as well as in the Report on the Implementation of the Remuneration Policy of the
members of the Board of Directors, which are an integral part of the annual financial statements of the Company.
Structure and competence
The number of members and the structure of the Board of Directors are determined in the Statutes of the Company.
The composition of the Board of Directors is structured in a way that guarantees professionalism, impartiality and
independence of its decisions in relation to the Company’s management. The functions and obligations of the corporate
management, as well as its structure and competence are in compliance with the requirements of the Code.
The Board of Directors ensures the proper allocation of tasks and responsibilities among its members.
ALLTERCO AD
CORPORATE GOVERNANCE STATEMENT UIC 201047670
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail. 40
The independent members of the Board of Directors of ALLTERCO AD control the actions of the executive management
and participate effectively in the Company’s operations in accordance with the interests and rights of the shareholders.
The Chairperson of the Board of Directors is an independent director.
The competencies, rights and obligations of the members of the Board of Directors follow the requirements of the law,
the statutes and the standards of good professional and managerial practice.
The members of the Board of Directors have the appropriate knowledge and experience required by the position they
hold. Information about their professional qualification and experience is disclosed during the election of the members of
the Board of Directors with the materials for the General Meeting of the Shareholders.
After the election of new members of the Board of Directors, they get acquainted with the main legal and financial issues
related to the Company's activities.
Improving the qualifications of the members of the Board of Directors is their constant commitment.
The members of the Board of Directors have the necessary time to perform their tasks and duties, even though the statutes
of the Company do not determine the number of companies in which the members of the Board of Directors may hold
managerial positions. This circumstance is taken into account in the proposals and election of new members of the Board
of Directors.
The election of the members of the Board of Directors of the Company is performed by means of a transparent procedure,
which provides, among other things, timely and sufficient information about the personal and professional qualities of
the candidates for members. As part of the materials for the General Meeting, at which the election of a new member of
the Board of Directors is proposed, all declarations required by POSA and the Commercial Act, a criminal record
certificate and a professional biography of the candidate for elected position are to be submitted. When electing members
of the Board of Directors, the candidates confirm with a declaration or in person to the shareholders the accuracy of the
submitted data and information. The election procedure is conducted by show of hands and counting the votes “For”,
“Against” and “Abstentions”. The voting results are announced through the minutes of the General Meeting of
Shareholders. The number of consecutive mandates of the members of the Board of Directors ensures efficient operation
of the Company and compliance with the legal requirements. The statutes of the Company do not provide for a limit on
the number of consecutive mandates of the independent members, but this circumstance is observed in the proposal for
election of independent members.
Remuneration
The Board of Directors has developed a clear and specific policy for the remuneration of the members of the Board of
Directors, which was approved by the Annual General Meeting of Shareholders of ALLTERCO AD and sets the
principles for forming the amount and structure of the remuneration.
The remuneration of the Executive Member of the Board of Directors consists of a basic remuneration and additional
incentives. The additional incentives are subject to clear and specific criteria and indicators regarding the Company's
results and/or the achievement of targets set in the Share-Based Remuneration Scheme for executive members of the
Board of Directors
In accordance with the legal requirements and the good practice of corporate governance, the amount and structure of the
remuneration, according to the Remuneration Policy adopted by the General Meeting of Shareholders, take into account:
− The duties and contribution of each member of the Board of Directors in the Company’s activities and results;
− The ability to select and retain qualified and loyal members of the Board of Directors;
− The need to match the interests of the members of the Board of Directors and the long-term interests of the
Company, as well as its sustainable development.
Pursuant to the Remuneration Policy adopted by the General Meeting of Shareholders, the Company may pay executive
members of the Board of Directors variable share-based remuneration in order to directly engage management in the
achievement of long-term corporate objectives. Variable share-based remuneration is not provided for non-executive
members of the Board of Directors. The share-based remuneration of the Company, the criteria for granting and the
amounts are determined on the basis of the Share-based Remuneration Scheme, as approved by the General Meeting of
Shareholders and adopted with decision dated 13.12.2021, which is in force as of the date hereof.
ALLTERCO AD
CORPORATE GOVERNANCE STATEMENT UIC 201047670
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail. 41
The independent members of the Board of Directors receive remuneration in accordance with the principles for forming
the amount and the structure of remuneration, set out in the Remuneration Policy adopted by the General Meeting of
Shareholders.
As mentioned above, the disclosure of information on the remuneration of the Board of Directors members is done in
accordance with the legal norms and the statutes of the Company - by disclosing in the Annual Report on the Activity
and the Report on the Implementation of the Remuneration Policy for the members of the Board of Directors. The
Remuneration Policy is published on the Company’s website. In this way, the shareholders have easy access to the policy
observed by the Company regarding the basic and additional remuneration for the members of the Board of Directors.
Conflict of interests
The members of the Board of Directors avoid and do not allow real or potential conflicts of interest. During the reporting
period, no transactions have been concluded between the Company and members of the Board of Directors or persons
related to them.
The members of the Board of Directors immediately disclose conflicts of interest and provide the shareholders with access
to information on transactions between the Company and members of the Board of Directors or persons related to them
by presenting the declaration under Art. 114b of the Public Offering of Securities Act.
The Board of Directors has not established a specific procedure for avoiding conflicts of interest in transactions with
interested parties and disclosing information in the event of such, but controls the conclusion of significant transactions
through voting and approval of such transactions.
Committees
Board of Directors’ work is supported by committ ees and the Board of Directors determines the need for their
establishment according to the specifics of the Company.
In compliance with the requirements of the effective legislation and based on the criteria it determines, the Board of
Directors annually proposes to the General Meeting of Shareholders to appoint an audit committee with a composition
that meets the specific needs of the Company.
The Audit Committee carries out its activities in accordance with the legal requirements.
The Articles of Association of the Company also provide for the possibility of establishing an Advisory Board by decision
of the Board of Directors.
ІІ. Chapter Two – Audit and internal control
The Board of Directors is assisted by an Audit Committee.
The Board of Directors and the Audit Committee ensure compliance with the applicable law regarding the independent
financial audit. The rotation principle is applied regarding proposals and appointment of external auditors.
The Audit Committee monitors the overall relationship with the external auditor, including the nature of non-audit
services provided by the Company's auditor, if any.
The Company has established and operates an internal control system, which includes identifying the risks associated
with the Company's activities and supporting their effective management. It also ensures the effective functioning of the
accountability and information disclosure systems.
ІІІ. Chapter Three – Protection of shareholders’ rights
The Board of Directors ensures equal treatment of all shareholders, including minority and foreign shareholders, protects
their rights and facilitates exercising them within the scope permitted by the applicable law and in accordance with the
provisions of the Company's statutes.
In the reporting period, the Company held one regular and two extraordinary General Meetings of Shareholders,
complying with all the requirements of Art. 115 et seq. of the POSA, announcing the decision for its convention and
publishing the invitation together with the materials thereto in the manner specified by the law. The shareholders were
guaranteed the opportunity to add new items to the agenda under Art. 223a of the Commercial Act. The Statutes of the
ALLTERCO AD
CORPORATE GOVERNANCE STATEMENT UIC 201047670
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail. 42
Company provide for the invitation to the General Meeting to contain the information required under the Commercial
Act and POSA, as well as additional information on exercising the right to vote and the possibility to add new items to
the agenda under Art. 223a of the CA.
The corporate management ensures that all shareholders are informed about their rights through the information
publishing system and the Company's website, the announced Statutes of the Company and invitations for each General
Meeting of Shareholders together with the materials to it.
General Meeting of Shareholders
All shareholders are informed about the rules according to which General Meetings of Shareholders are convened and
held, including the voting procedures, through the Statute of the Company and invitations for each General Meeting of
Shareholders.
The Board of Directors provides sufficient and timely information on the date and place of the General Meeting, as well
as complete information on the issues to be discussed and resolved at the Meeting.
The invitation and materials for the General Meeting of Shareholders are announced to the public through the selected
media agencies, the Financial Supervision Commission and the regulated securities market. After presenting the invitation
and the materials for the General Meeting of Shareholders, they are also made available on the Company's website.
The Company’s management maintains a database with contact information of its shareholders owning 5% or more of
the Company’s capital, allowing direct messages to be sent to them or to a person designated by them, when necessary.
The Company's corporate management ensures that all shareholders are able to express their opinion and ask questions
during the General Meeting.
Shareholders with voting rights have the opportunity to exercise their voting rights at the General Meeting of the Company
in person or through representatives and voting by correspondence might be allowed for a specific General Meeting of
the Shareholders.
As part of the materials for the General Meeting of Shareholders, the Board of Directors provides a sample power of
attorney. The Company indicates the Rules for voting by proxy and the Rules for voting by correspondence (when
applicable) in the content of the invitation or as a separate document - part of the materials to it.
The Board of Directors has undertaken all necessary actions to bring the Company’s activities in line with the
recommendations of the Code.
The Statutes of the Company allow exercising the right to vote by electronic means and/or by correspondence by decision
and rules determined by the Board of Directors in the invitation to convene a General Meeting.
The Board of Directors exercises effective control by creating the necessary organization for the voting of the authorized
persons in accordance with the instructions of the shareholders and in the ways permitted by law. The Board of Directors
appoints a mandate commission, which registers the shareholders for each General Meeting and proposes to the General
Meeting to appoint a Chairperson, Secretary and Vote Tellers. The management of the General Meeting strictly monitors
the lawful conduct of the General Meeting, including the manner of voting of the authorized persons. When differences
are noticed in the will of the principal and the vote of the authorized person, this circumstance is entered in the minutes
and the will of the principal is taken into account accordingly.
The Board of Directors has not prepared and adopted a specific policy for the organization and holding of ordinary and
extraordinary General Meetings of Shareholders, but at the same time monitors compliance with the principles of equal
treatment of all shareholders and the right of each shareholder to express their opinion on the items on the agenda of the
General Meeting. The Board of Directors prepares Rules for voting by proxy and Rules for voting by correspondence
(when applicable) to the materials for convening General Meetings.
The Board of Directors organizes the procedures and order for holding the General Meeting of Shareholders in a way that
does not complicate or increase the cost of voting unnecessarily.
The Board of Directors encourages the participation of shareholders in the General Meeting of Shareholders but has not
provided the opportunity for remote presence through technical means (including the Internet), due to the lack of
economic grounds for such a method of participation in the General Meeting.
ALLTERCO AD
CORPORATE GOVERNANCE STATEMENT UIC 201047670
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail. 43
Insofar as the members of the Company's Board of Directors spend most of their time outside the country, it is not always
possible to ensure the presence of all of them at the General Meetings of Shareholders, but some of them, including at
least one executive director, are present at the General Meetings of the Company's shareholders.
Materials for the General Meeting of Shareholders
The texts in the written materials related to the agenda of the General Meeting are specific and clear and do not mislead
the shareholders. All proposals regarding major corporate events are presented as separate items on the agenda of the
General Meeting, incl. the profit distribution proposal.
The Company maintains a special section on its website regarding the rights of shareholders and their participation in the
General Meeting of Shareholders.
The Board of Directors assists the shareholders entitled under the current legislation to include additional items and to
propose resolutions for items already included on the agenda of the General Meeting, by performing all necessary legal
and factual actions to announce the additional items added to the agenda of the already convened General Meeting.
The Board of Directors ensures the right of the shareholders to be informed about the decisions taken by the General
Meeting of Shareholders by announcing the Minutes of the General Meeting of Shareholders through the selected media
agencies.
Equal treatment of shareholders of the same class
According to the Company’s Statute and internal acts, all shareholders of the same class are treated equally, and all shares
within one class give equal rights to shareholders of the same class.
The Board of Directors ensures that sufficient information is provided to investors regarding the rights granted by all
shares of each class prior to their acquisition through the information published on the Company’s website, as well as
through interviews and personal meetings with the management and/or the Director of Investor Relations
Consultations between shareholders regarding their basic shareholder rights
The Board of Directors does not prevent shareholders, including institutional ones, from consulting each other on matters
relating to their basic shareholder rights in a manner that prevents abuse.
Transactions of shareholders with controlling rights and abusive transactions
The Board of Directors does not allow transactions with shareholders with controlling rights, which violate the rights
and/or legitimate interests of other shareholders, including under the conditions of agreement with themselves.
Conducting this type of transactions requires an explicit decision of the Board of Directors and the interested parties are
excluded from the voting. In case of indications for crossing the statutory thresholds under Art. 114, para. 1 of POSA, the
Board of Directors prepares a motivated report and initiates the convening and holding of a General Meeting of
Shareholders, at which the transactions are put to a vote.
ІV. Chapter Four – Disclosure of financial and non-financial information
The Board of Directors has adopted a policy for disclosure of information (financial and non-financial) in accordance
with the legal requirements and the Statutes of the Company. In accordance with the adopted policy, the corporate
management has created and maintains a system for disclosure of information.
The information disclosure system ensures equality of the addressees of information (shareholders, stakeholders,
investment community) and does not allow misuse of inside information.
The information disclosure system ensures complete, timely, accurate and understandable information, enabling taking
objective and informed decisions and assessments.
The inside information is disclosed in the legally established forms, order and terms through the selected media agencies.
The Company uses a single point to disclose information by electronic means, thus the information reaches the public,
FSC and the regulated securities market in unmodified form. Information in unmodified form and volume is also
published on the Company’s website. In this way, the Company’s executive management ensures that the information
disclosure system provides complete, timely, accurate and understandable information, allowing taking objective and
informed decisions and assessments.
ALLTERCO AD
CORPORATE GOVERNANCE STATEMENT UIC 201047670
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail. 44
The Executive Management and the Board of Directors promptly disclose the Company’s capital structure and agreements
that lead to exercising control in accordance with its disclosure rules. Disclosure is made through the provisions of the
Public Offering of Securities Act and the acts for its implementation, as well as the applicable European regulation.
The Board of Directors ensures, by exercising control over the implementation of the disclosure policy, that the rules and
procedures according to which the acquisition of corporate control and extraordinary transactions such as mergers and
sale of significant parts of assets are clearly and timely disclosed.
The Board of Directors approves and together with the independent auditor controls internal rules for the preparation of
the annual and interim reports and the procedure for disclosure of information.
The Company maintains a website - www.allterco.com with approved content, scope and frequency of the information
disclosed through it. The content of the Company's website fully covers the recommendations of the National Corporate
Governance Code.
The Company also maintains an English language version of the corporate website with the same content.
The Company periodically discloses information about the corporate governance.
The Company’s Board of Directors believes that its activities in the reporting period created prerequisites for sufficient
transparency in its relations with investors, financial media and capital market analysts.
In the reporting period, the Company disclosed all regulated information within the deadlines and in accordance with the
procedure provided for in the Public Offering of Securities Act and the acts on its implementation.
Insofar as the Company has no obligation for non-financial reporting, the corporate management has not adopted rules to
ensure disclosure on an annual basis of non-financial information in accordance with the national legislation and
applicable European law.
As part of the information disclosure system, the Company has developed and maintains a corporate website with
approved content, scope and frequency of information disclosure, which includes the recommended minimum required
information according to the National Corporate Governance Code. The Company also maintains an English version of
the website.
The Company periodically discloses information on corporate governance by annually updating this Corporate
Governance Statement as part of the annual financial statements.
Corporate management ensures the disclosure of any significant periodic and ad-hoc information about the Company
through channels that provide equal and timely access to relevant information to users.
V. Chapter Five – Stakeholders. Sustainable development.
The corporate management is committed to establishing specific actions and policies regarding the sustainable
development of the Company, but at present, given the lack of a legal requirement for this, it does not disclose information
related to the climate and social aspects of the Company's activities.
The corporate management ensures effective interaction with stakeholders. This category includes certain groups of
persons who are directly affected by the Company and who in turn can influence its activities.
The Company identifies as stakeholders in relation to its activities based on their degree and spheres of influence, role
and relation to its sustainable development.
The Company, through its subsidiaries, regularly communicates with the various groups of stakeholders non-financial
information in connection with corporate socially responsible practices established at the Company.
In its policy regarding stakeholders, the Company complies with the legal requirements based on the principles of
transparency, accountability and business ethics.
The corporate management ensures that all stakeholders are sufficiently informed of their statutory rights. As at the end
of the reporting period, the corporate management has not developed specific policies to address stakeholder interests,
but is committed to taking appropriate action to comply with this requirement in 2023.
The corporate management is committed to establishing specific actions and policies regarding the sustainability of the
Company.
ALLTERCO AD
CORPORATE GOVERNANCE STATEMENT UIC 201047670
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail. 45
The corporate management maintains effective relations with stakeholders and is prepared to disclose, when necessary in
compliance with legal standards and good international practices, non-financial information on economic, social and
environmental issues of concern to stakeholders, such as: anti-corruption; dealing with employees, suppliers and
customers; the Company's social responsibility; environmental protection and human rights violations.
The corporate management ensures the right to timely and regular access to relevant, sufficient and reliable information
about the Company when stakeholders are involved in the corporate governance process.
3. Description of the main characteristics of the internal control and risk management systems of
ALLTERCO AD with regard to the financial reporting process
When describing the main characteristics of the internal control and risk management systems, the fact that neither POSA
nor the National Code for Corporate Governance define an internal control framework for public companies in Bulgaria
to follow shall be taken into account. Therefore, for the purposes of fulfilling the Company’s obligations under Art. 100n,
para. 8, item 4 of the POSA, in the description of the main characteristics of the system, the framework of the International
Auditing Standard 315 was used. General description of the internal control and risk management system, the control
environment, the Company's risk assessment process, the information system and related business processes essential for
financial reporting and communication, as well as the ongoing monitoring of controls are listed in item 15.15 of the Report
on the Activity.
4. Information under Article 10, para. 1, letters "c", "d", "f", "h" and "i" of Directive 2004/25/EC of the European
Parliament and of the Council of April 21, 2004 on takeover bids
4.1. Information under Article 10, para. 1, letters "c" of Directive 2004/25/ЕC of the Europea n Parliament and of
the Council of April 21, 2004. on takeover bids - significant direct and indirect shareholdings (including indirect
shareholdings through pyramid structures and cross-shareholdings) within the meaning of Article 85 of Directive
2001/34/EC
As at the end of the reporting period, the shareholders holding 5 percent or more of the capital, as well as voting rights in
the Company's General Meeting, are:
Table No21
NAME OF SHAREHOLDER PERCENT OF THE
CAPITAL
Svetlin Todorov 32.48%
Dimitar Dimitrov 32.48%
Other individuals and legal entities 35.04%
The Company has no other shareholders who directly or indirectly own 5 percent or more of the voting rights in the
General Meeting.
4.2. Information under Article 10, paragraph 1, letters "d" of Directive 2004/25/ЕC of the European Parliament
and of the Council of 21 April 2004 on takeover bids - the holders of all securities with special control rights and a
description of these rights
ALLTERCO AD has no shareholders with special control rights.
4.3. Information under Article 10, para. 1, letters "f" of Directive 2004/25/ЕC of the European Parliament and of
the Council of 21 April 2004 on takeover bids - any restrictions on voting rights, such as restricting the voting
rights of holders of a given percentage or number of votes, deadlines for exercising voting rights, or systems
whereby, with the Company’s cooperation, the financial rights attaching to securities are separated from the
holding of securities
There are no restrictions on the voting rights of the shareholders of ALLTERCO AD.
To participate in the General Meeting, shareholders must be identified with the documents provided for in the law, the
Articles of Association and the invitation to the General Meeting, certifying their identity and representative authority,
and be registered by a mandate commission in the list of attending shareholders prior to the starting time of the General
Meeting.
ALLTERCO AD
CORPORATE GOVERNANCE STATEMENT UIC 201047670
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail. 46
4.4. Information under Article 10, para. 1, letters "h" of Directive 2004/25/ЕC of the European Parliament and of
the Council of 21 April 2004 on takeover bids - the rules governing the appointment and replacement of the
members of the Board of Directors and the amendments of the Articles of Association
Pursuant to the provisions of the Company's Articles of Association, the General Meeting of Shareholders determines the
number, elects and dismisses the members of the Board of Directors and determines their remuneration.
Pursuant to Art. 25, para. 1 of the Company's Articles of Association, the Board of Directors’ mandate is determined by
the General Assembly, but it cannot be longer than 5 years.
The General Meeting of Shareholders may at any time decide to make changes in the number and composition of the
Board of Directors, and the members of the Board may be re-elected without limitation. A member of the Board of
Directors can be any individual or legal entity that meets the requirements of the law and has the necessary professional
qualifications related to the Company's activities.
4.5. Information under Article 10(1)(i) of Directive 2004/25/EC of the European Parliament and of the Council of
21 April 2004 on takeover bids - powers of the members of the Board of Directors, and the right to issue or
repurchase shares in particular
The Board of Directors of ALLTERCO AD has the following powers:
Discusses and resolves all issues, except those that are within the exclusive competence of the General Meeting of
Shareholders, explicitly related, but not limited to:
(i) plans and programs for the Company's activities;
(ii) organizational structure of the Company;
(iii) participation in tenders and competitions;
(iv) adopts the rules for the Board of Directors’ activities, as well as changes to these rules;
(v) election and dismissal of its Executive Members;
(vi) acquisition by the Company of interests in other companies;
(vii) opening and closing branches of the Company in the country and abroad;
(viii) acquisition and disposal of real estate and limited real estate rights owned by the Company;
(ix) establish a mortgage on Company’s real estate or a pledge on fixed tangible assets of the Company;
(x) granting loans to non-related third parties, providing guarantees, taking out guarantees and providing collaterals
for obligations of non-related third parties, signing bank credit agreements for amounts (excluding interest and
expenses) exceeding 3% ( three percent) the amount of the Company’s consolidated revenues reported in the last
audited annual financial statements of the Company;
(xi) operating or finance lease contracts for amounts exceeding BGN 250,000 (excluding interest and expenses due)
sighed by the Company;
(xii) disposal of intellectual property rights, including the acquisition, sale and assignment of licenses to use patents,
know-how and other intellectual property rights (except for intellectual property rights granted to third parties
with regard to the provision of products and services of end users, within the Company's scope of activity);
(xiii) determining the conditions for the appointment and acceptance of financial incentive programs on an annual
basis for key management personnel of the Company's subsidiaries, namely executive directors, procurators and
managers of the Company's subsidiaries;
(xiv) to constitute and reconstitute the Advisory Board, to make decisions on all issues concerning the Advisory Board,
except those previously determined by these Articles of Association or by a decision of the General Meeting of
Shareholders, including, but not limited to: determining the numerical and personal composition of the Advisory
Board with the right to appoint and dismiss its members at its discretion, the term of its existence, the
remuneration and tenure of its members, to adopt, amend, revoke and monitor the implementation of all and any
documents relating to the Advisory Council, including Rules of the Advisory Council’s functions.
The Board of Directors makes decisions for and authorises the individuals who manage and/or represent the Company in
making transactions with interested parties under Art. 114, para. 2 of the POSA, for which no prior authorisation by the
General Meeting of Shareholders is required.
ALLTERCO AD
CORPORATE GOVERNANCE STATEMENT UIC 201047670
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail. 47
By Decision of the General Meeting of Shareholders dated October 15, 2021, the Board of Directors is authorised for a
period of up to five years from June 27, 2019. The Board of Directors has the right to make decisions to increase the
Company's capital using any of the provided in para. 1 methods, with the exception of converting part of the profit into
capital until reaching a total nominal amount of BGN 25 million (twenty-five million Bulgarian leva) through the issuance
and public offering of up to 10,000,000 (ten million) new dematerialized, ordinary, registered voting shares with a
nominal value of BGN 1 (one) each and an issue value for one share determined by an explicit decision of the Company's
Board of Directors. The restrictions set out above are generally applied regardless of which of the methods provided for
in para. 1 above , was used to increase the capital.
The Company can repurchase own shares without making a tender offer when acquiring in one calendar year no more
than 3 percent of own voting shares by decision of the General Meeting of Shareholders for a period not longer than
eighteen months from the date of the decision of the relevant body of the Company. The Company may repurchase own
shares by decision of the General Meeting of Shareholders for the purposes of implementing incentive bonus programs
for employees within its economic group with shares from the capital and schemes for providing variable remuneration
to the executive members of the Board of Directors in shares, in accordance with the remuneration policy for the members
of the Company’s Board of Directors.
5. Members and functions of the administrative, management and supervisory bodies of ALLTERCO AD and
their committees
ALLTERCO AD has a one-tier management system. The Company is managed and represented by a Board of Directors,
which, as of the date of preparation of this Declaration, has the following members, according to a decision of the General
Meeting of Shareholders held on April 8, 2022:
• Dimitar Stoyanov Dimitrov
• Svetlin Iliev Todorov
• Nikolay Angelov Martinov
• Wolfgang Kirsch
• Gregor Bieler
The Board of Directors of ALLTERCO AD elects the Chairperson and a Deputy Chairperson from its members. The
Board of Directors holds regular meetings at least once every three months to discuss the position and development of
the Company. Each member of the Board of Directors may request the Chairperson to call a meeting to discuss specific
issues.
Decisions of the Board of Directors are made by a majority of more than half of all members of the Board of Directors.
A quorum at the meetings of the Board of Directors is present if the number of members present at the meeting is sufficient
to make decisions on the issues of the agenda. In the event that a quorum is not available for any of the issues requiring a
qualified majority, the lack of quorum is noted in the minutes and this issue is not considered at the meeting.
The Board of Directors can make decisions in absentia.
Committees:
The Company has an audit committee elected by the Annual General Meeting of Shareholders consisting of: Anelia
Petkova Angelova - Tumbeva, Marian Nikolov, Albena Benkova Beneva. The Audit Committee performs its functions
in accordance with the Articles of Association adopted by the Annual General Meeting of Shareholders and the
requirements of the Independent Financial Audit Act. The members of the Audit Committee, Marian Nikolov and Albena
Beneva, have applied for their release from the Audit Committee for personal reasons, and in compliance with the legal
requirements, new replacement applicants will be reviewed at the next General Meeting of Shareholders.
The Company's Articles of Association provide for the possibility of establishing an Advisory Board by decision of the
Board of Directors. The Advisory Board is a collective advisory body that assists the members of the Board of Directors
and the senior management of the Company, based on the expertise of each of its members and according to the goals set
by the Board of Directors during its constitution, to prepare and provide strategic guidelines and programs for
development of the Company:
(i) to monitor the activity and results of the Company's activity, prepare reports and make suggestions for
improvement of some aspects of its activity;
ALLTERCO AD
CORPORATE GOVERNANCE STATEMENT UIC 201047670
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail. 48
(ii) to provide information regarding current developments and trends in the business sector in which the Company
operates;
(iii) to provide information on innovative practices, as well as to recommend and develop programs for the
implementation of such practices in the Company's activities;
(iv) to propose improvements regarding the products and/or services offered by the Company, as well as development
of new ones;
(v) to propose strategies to improve the Company's positions on the current markets in which it operates, to explore
opportunities to access new markets, as well as to implement new market mechanisms ;
(vi) to perform any other activity assigned to him by the Board of Directors, which is in the interest of the Company’s
development.
The Advisory Board explicitly will not and cannot be assigned any management, supervisory or control functions. The
members of the Advisory Board have the right to access information belonging to the Company in a volume determined
by the Board of Directors and subject to compliance with the requirements for handling such information no less
restrictive than the requirements applicable to the members of the Board of Directors.
In accordance with the latest amendments to the Articles of Association, adopted on October 15, 2021, the Board of
Directors decided to form an Advisory Board and appointed Mr. Gregor Bieler as its chairman. Due to the subsequent
election of Mr. Gregor Bieler as an independent member of the Board of Directors, an incompatibility with his function
as Chairman of the Advisory Board has arisen and he has announced his withdrawal from this position. Due to the lack
of members for more than 6 months, the Board of Directors has decided to suspend the Advisory Board and there is no
such body operating in the Company as at the end of the reporting period.
6. Description of the diversity policy applied to the administrative, management and supervisory bodies of
ALLTERCO AD with regard to aspects such as age, gender or education and professional experience, the
objectives of this diversity policy, the application approach and the results from the reporting period; where no
such policy applies, the declaration shall contain an explanation as to why.
The Company has not developed a special diversity policy regarding the administrative, management and supervisory
bodies of the Company related to aspects such as age, gender or education and professional experience, as it falls under
the exceptions of Art. 100n, para. 12 of the Public offering of securities Act (POSA).
However, there are long-established practices that can be classified as diversity policy relating to the management bodies
with regard to aspects such as age, gender or education and professional experience.
In essence, these practices form the Company's diversity policy of the management bodies in relation to aspects such as
age, gender or education and professional experience.
Adopted practices require that the Company implements a balanced policy for nominating members of the corporate
management who have education and qualifications that correspond to the nature of the Company's activity, its long-term
goals and business plan.
The practices adopted by the Company encourage the pursuit for gender balance at all management levels.
The Company does not discriminate against members of corporate management based on age.
...................................................................
Dimitar Dimitrov
Executive Director of ALLTERCO AD
ALLTERCO AD
UIC 201047670
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail. 49
DECLARATION
under to Art. 100n, para. 4, item 4 of the Public Offering of Securities Act
We, the undersigned,
DIMITAR STOYANOV DIMITROV, in my capacity as Executive Director of ALLTERCO AD
and
SVETOZAR GOSPODINOV ILIEV, in my capacity as Chief Financial Officer of ALLTERCO AD
Hereby DECLARE that to the best of our knowledge:
1. The consolidated annual financial statements of ALLTERCO AD for 2022, prepared in accordance
with the applicable accounting standards, present correctly and fairly the information about the
assets and liabilities, financial standing and profit or loss of ALLTERCO AD and its subsidiaries;
2. The 2022 consolidated report on the activities contains a truthful overview of the development and
results of the activities of ALLTERCO AD and its subsidiaries, as well as the position of
ALLTERCO AD and its subsidiaries, together with a description of the main risks and uncertainties
they face.
Declarants:
......................................
Dimitar Dimitrov
Executive Director
......................................
Svetozar Iliev
Chief Financial Officer
ALLTERCO AD
CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2022
(Unofficial translation of the original in Bulgarian)
ALLTERCO AD
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS OF DECEMBER 31, 2022 UIC 201047670
All amounts are in thousand Bulgarian leva unless otherwise stated
The consolidated statement of financial position shall be read together with the accompanying notes on pages 7-71.
The notes are an integral part of these consolidated financial statements.
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail. Page 2 of 71
ASSETS Note December 31,
2022
December 31,
2021
(restated)
Non-current assets
Property, plant and equipment 3.01 4 653 4 798
Intangible assets 3.02 4 220 3 116
Right-of-use assets 3.03 296 108
Advance payments for asset acquisition - 19
Goodwill 3.04 160 160
Investments in associates 3.05 158 40
Other capital investments 3.06 830 2 624
Trade receivables 3.07 1 027 2 054
Deferred tax assets 3.08 348 72
Total non-current assets 11 692 12 991
Current assets
Inventory 3.09 23 002 7 560
Trade receivables 3.10 21 647 19 167
Other receivables 3.11 3 622 1 912
Short-term financial assets 3.12 175 -
Cash and cash equivalents 3.13 28 148 30 541
Prepaid expenses 3.14 512 234
Total current assets 77 106 59 414
TOTAL ASSETS 88 798 72 405
Date: May 2, 2023
Preparer: Executive Director:
/Sylvia Ivanova Tomova/ /Dimitar Stoyanov Dimitrov/
Desislava Dinkova
Registered auditor in charge of the audit
Statutory Manager at Deloitte Audit OOD
Registration number 033 in the Register under Art. 20 of IFAA
ALLTERCO AD
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS OF DECEMBER 31, 2022 UIC 201047670
All amounts are in thousand Bulgarian leva unless otherwise stated
The consolidated statement of financial position shall be read together with the accompanying notes on pages 7-71.
The notes are an integral part of these consolidated financial statements.
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail. Page 3 of 71
LIABILITIES Note December 31,
2022
December 31,
2021
(restated)
Non-current liabilities
Bank loans 3.15 1 488 2 007
Lease liabilities 3.16 157 80
Retirement benefit obligations 3.17 112 -
Total non-current liabilities 1 757 2 087
Current liabilities
Bank loans 3.15 668 572
Lease liabilities 3.16 161 58
Trade payables 3.18 1 891 1 557
Payables to employees 3.19 1 837 173
Payables to social security obligations 3.19 204 115
Tax payables 3.20 2 074 1 315
Other liabilities 3.21 1 098 1 026
Deferred income 36 -
Total current liabilities 7 969 4 816
TOTAL LIABILITIES 9 726 6 903
EQUITY
Share capital 3.22 18 000 18 000
Purchased own shares (780) -
Retained earnings 3.23 55 117 39 324
Legal reserves 3.24 1 800 1 800
Premium reserve 3.25 5 403 5 403
Revaluation reserve 3.26 (507) 1 036
Exchange differences from translation of foreign
subsidiaries’ financial statements 39 (61)
TOTAL EQUITY 79 072 65 502
TOTAL EQUITY AND LIABILITIES 88 798 72 405
Data: May 2, 2023
Preparer: Executive Director
/Sylvia Ivanova Tomova/ /Dimitar Stoyanov Dimitrov/
Desislava Dinkova
Registered auditor in charge of the audit
Statutory Manager at Deloitte Audit OOD
Registration number 033 in the Register under Art. 20 of IFAA
ALLTERCO AD
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED DECEMBER 31, 2022 UIC 201047670
All amounts are in thousand Bulgarian leva unless otherwise stated
The consolidated statement of comprehensive income shall be read together with the accompanying notes on pages
7-71. The notes are an integral part of these consolidated financial statements.
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail. Page 4 of 71
Note
Year ended
December 31,
2022
Year ended
December 31, 2021
(restated)
Sales revenue 4.01 93 178 59 509
Cost of sales 4.01 (46 327) (26 722)
Gross profit 46 851 32 787
Other operating income 4.02 1 012 1 358
Sales expenses (3 981) (2 696)
Administrative expenses 4.03 (20 435) (12 088)
Impairment expense 4.04 (1 885) (334)
Other operating expenses 4.05 (1 185) (531)
Profit from operating activity 20 377 18 496
Finance income 4.06 - 250
Finance expense 4.07 (265) (126)
Share of associated companies’ profit 3.05 118 32
Profit before tax 20 230 18 652
Income tax expense 4.08 (2 797) (2 760)
Net profit 17 433 15 892
Other comprehensive income:
Items, that will not be reclassified to profit or
loss
Other long-term capital instruments (1 383) (3 573)
Exchange differences from translation of foreign
subsidiaries’ financial statements 100 (95)
Exchange differences of written-off investments - (246)
Other comprehensive income for the period
after taxes (1 283) (3 914)
TOTAL COMPREHENSIVE INCOME FOR
THE PERIOD 16 150 11 978
Earnings per share 4.09 0.97 0.88
Date: May 2, 2023
Preparer: Executive Director
/Sylvia Ivanova Tomova/ /Dimitar Stoyanov Dimitrov/
Desislava Dinkova
Registered auditor in charge of the audit
Statutory Manager at Deloitte Audit OOD
Registration number 033 in the Register under Art. 20 of IFAA
АЛТЕРКО АД
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY UIC 201047670
FOR THE YEAR ENDED DECEMBER 31, 12
All amounts are in thousand Bulgarian leva unless otherwise stated
The consolidated statement of changes in equity shall be read together with the accompanying notes on pages 7-71. The notes
are an integral part of these consolidated financial statements.
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail. Page 5 of 71
Share
capital
Retained
earnings
Revalu
ation
reserve Premiu
m
reserve
Legal
reserves
Repurcha
sed own
shares
Exchange
differences
from
translation of
foreign
subsidiaries’
financial
statements
Total
Non-
controlling
interests
Total equity
Balance at January 1, 2021 18 000 26 938 4 849 5 703 1 500 (138) 280 57 132 (296) 56 836
Legal reserves replenishment - - - (300) 300 - - - - -
Net profit - 15 892 - - - - - 15 892 - 15 892
Other comprehensive income - - (3 573) - - - (341) (3 914) - (3 914)
Other adjustments - 240 (240) - - - - - -
Dividends distribution - (3 600) - - - - - (3 600) - (3 600)
Sale of repurchased own shares - - - - - 138 - 138 - 138
Change in non-controlling
interest - (296) - - - - - (296) 296 -
Effect from sale of subsidiaries - 150 - - - - - 150 - 150
Balance at December 31, 2021
(restated) 18 000 39 324 1 036 5 403 1 800 - (61) 65 502 - 65 502
Balance at January 1, 2022 18 000 39 324 1 036 5 403 1 800 - (61) 65 502 - 65 502
Total comprehensive income,
net, incl. - 17 433 (1 383) - - - 100 16 150 16 150
Net profit - 17 433 - - - - - 17 433 - 17 433
Other comprehensive income,
gross - - (1 439) - - - 100 (1 339) - (1 339)
Deferred tax - - 56 - - - - 56 - 56
Repurchased own shares (40
000 shares) - - - - - (780) - (780) - (780)
Dividends (BGN 0.10 per share) - (1 800) - - - - (1 800) - (1 800)
Other adjustments - 160 (160) - - - -
Balance at December 31, 2022 18 000 55 117 (507) 5 403 1 800 (780) 39 79 072 - 79 072
Date: May 2, 2023
Preparer: Executive Director
/Sylvia Ivanova Tomova/ /Dimitar Stoyanov Dimitrov/
Desislava Dinkova
Registered auditor in charge of the audit
Statutory Manager at Deloitte Audit OOD
Registration number 033 in the Register under Art. 20 of IFAA
ALLTERCO AD
CONSOLIDATED STATEMENT OF CASH FLOWS UIC 201047670
FOR THE YEAR ENDED DECEMBER 31, 2022
All amounts are in thousand Bulgarian leva unless otherwise stated
The consolidated statement of cash flows shall be read together with the accompanying notes on pages 7-71. The
notes are an integral part of these consolidated financial statements.
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail Page 6 of 71
Note
Year ended
December 31,
2022
Year ended
December 31,
2021
Cash flows from operating activities
Proceeds from customers 83 914 57 364
Payments to suppliers (65 109) (36 973)
Taxes paid (4 621) (3 054)
Corporate tax paid (2 660) (2 087)
Payments to employees and social security
institutions (10 879) (6 972)
Other payments, net (374) (139)
Net cash flows from operating activities 271 8 139
Cash flows from investing activities
Cash flows related to non-current tangible and
intangible assets (2 176) (1 583)
Cash flows from sale of property, plant and
equipment - 44
Proceeds from the sale of investments 2 798 2 054
Purchase of investments (130) (18)
Net cash flows from investing activities 492 497
Cash flows from financing activities
Repurchased own shares (780) -
Lease payments (104) (75)
Loans repaid (510) (502)
Cash flows related to interest and commissions (61) (73)
Dividends paid (1 800) (3 600)
Other payments, net (71) (45)
Net cash flows used in financing activities (3 326) (4 295)
Net increase/(decrease) in cash and cash
equivalents for the year (2 563) 4 341
Net exchange differences 170 150
Cash and cash equivalents at the beginning of
the year 30 541 26 050
Cash and cash equivalents at the end of the year 3.13 28 148 30 541
Date: May 2, 2023
Preparer: Executive Director
/Sylvia Ivanova Tomova/ /Dimitar Stoyanov Dimitrov/
Desislava Dinkova
Registered auditor in charge of the audit
Statutory Manager at Deloitte Audit OOD
Registration number 033 in the Register under Art. 20 of IFAA
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022 UIC 201047670
All amounts are in thousand Bulgarian leva unless otherwise stated
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail. Page 7 of 71
C O N T E N T S
1. Information on the Group ........................................................................................................................................... 9
2. Basis for preparation and accounting principles ....................................................................................................... 11
2.1. Basis for preparation................................................................................................................................................. 11
2.2. Initial application of new and amended IFRSs ......................................................................................................... 12
2.2.1. Standards effective for the current reporting period ................................................................................................. 12
2.2.2. Standards and amendments to the existing standards issued by IASB and adopted by the EU but not yet effective 13
2.2.3. New standards and amendments to the existing standards issued by IASB but not yet adopted by the EU ............. 13
2.3. Accounting principles ............................................................................................................................................... 14
2.4. Functional and reporting currency ............................................................................................................................ 14
2.5. Comparative data ...................................................................................................................................................... 15
2.6. Prior period errors .................................................................................................................................................... 15
2.7. Transactions and balances ........................................................................................................................................ 16
2.8. Accounting estimates and judgements...................................................................................................................... 17
2.9. Subsidiaries and associated companies .................................................................................................................... 17
2.10. Non-controlling interest............................................................................................................................................ 17
2.11. Consolidation............................................................................................................................................................ 17
2.12. Definition and assessment of the items of the consolidated financial statements ..................................................... 18
2.12.1. Revenue .................................................................................................................................................................... 18
2.12.2. Expenses ................................................................................................................................................................... 19
2.12.3. Property, plant and equipment .................................................................................................................................. 20
2.12.4. Intangible assets ....................................................................................................................................................... 21
2.12.5. Goodwill ................................................................................................................................................................... 22
2.12.6. Other long-term equity investments ......................................................................................................................... 23
2.12.7. Investments in associated companies ....................................................................................................................... 23
2.12.8. Inventories ................................................................................................................................................................ 23
2.12.9. Financial instruments................................................................................................................................................ 24
2.12.10. Cash and cash equivalents ........................................................................................................................................ 30
2.12.11. Lease......................................................................................................................................................................... 30
2.12.12. Provisions ................................................................................................................................................................. 32
2.12.13. Payables to employees.............................................................................................................................................. 32
2.12.14. Share capital and reserves ........................................................................................................................................ 33
2.12.15. Income tax expense .................................................................................................................................................. 34
2.12.16. Earnings per share .................................................................................................................................................... 35
2.12.17. Significant judgements in applying the Group’s accounting policy. ........................................................................ 35
2.12.18. Fair values ................................................................................................................................................................ 37
3. Notes to the consolidated statement of financial position ........................................................................................ 38
3.01. Property, plant and equipment .................................................................................................................................. 38
3.02. Intangible assets ....................................................................................................................................................... 39
3.03. Right-of-use assets ................................................................................................................................................... 40
3.04. Goodwill ................................................................................................................................................................... 40
3.05. Investments in associates .......................................................................................................................................... 40
3.06. Other long-term capital investments ......................................................................................................................... 41
3.07. Long-term trade receivables ..................................................................................................................................... 41
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022 UIC 201047670
All amounts are in thousand Bulgarian leva unless otherwise stated
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail. Page 8 of 71
3.08. Deferred tax assets.................................................................................................................................................... 42
3.09. Inventory .................................................................................................................................................................. 42
3.10. Trade receivables ...................................................................................................................................................... 43
3.11. Other receivables ...................................................................................................................................................... 43
3.12. Short-term financial assets ....................................................................................................................................... 43
3.13. Cash and cash equivalents ........................................................................................................................................ 44
3.14. Prepaid expenses ...................................................................................................................................................... 44
3.15. Bank loans ................................................................................................................................................................ 45
3.16. Lease......................................................................................................................................................................... 46
3.17. Retirement benefits obligation.................................................................................................................................. 46
3.18. Trade payables .......................................................................................................................................................... 47
3.19. Payables to employees and social security obligations............................................................................................. 47
3.20. Tax payables ............................................................................................................................................................. 47
3.21. Other liabilities ......................................................................................................................................................... 47
3.22. Share capital ............................................................................................................................................................. 47
3.23. Retained earnings ..................................................................................................................................................... 49
3.24. Legal reserves ........................................................................................................................................................... 49
3.25. Share premium reserve ............................................................................................................................................. 49
3.26. Revaluation reserve .................................................................................................................................................. 49
4. Notes to the consolidated statement of comprehensive income ............................................................................... 50
4.01. Sales revenue and cost of sales ................................................................................................................................. 50
4.02. Other operating revenue ........................................................................................................................................... 51
4.03. Administrative expense ............................................................................................................................................ 51
4.04. Impairment expenses ................................................................................................................................................ 52
4.04. Other operating income ............................................................................................................................................ 52
4.05. Financial income ...................................................................................................................................................... 52
4.06. Financial expenses .................................................................................................................................................... 53
4.07. Income tax expense .................................................................................................................................................. 53
4.08. Earnings per share .................................................................................................................................................... 54
5. Contingent liabilities and commitments ................................................................................................................... 55
6. Transactions and balances with related parties ......................................................................................................... 56
7. Financial instruments by categories ......................................................................................................................... 57
8. Financial risk management ....................................................................................................................................... 58
9. Fair values ................................................................................................................................................................ 67
10. Correction of errors and restatements ....................................................................................................................... 68
11. Events after the end of the reporting period ............................................................................................................. 69
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022 UIC 201047670
All amounts are in thousand Bulgarian leva unless otherwise stated
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail.
Page 9 of 71
1. Information on the Group
1.1. Legal status
Allterco AD (the Parent Company), Sofia, is entered in the Commercial Register of the Registry Agency with
UIC (Unified Identification Code) as per BULSTAT: 201047670 and LEI code 8945007IDGKD0KZ4HD95.
The Parent Company is with seat and registered office i n Bulgari a, 1407 Sofia, 103 Cherni vrah Blvd. No
changes to the company name, seat and registered office were made during the reporting period. The initial
registered fixed capital was BGN 50 000 (fifty thousand) by contribution of shares. Subsequently by another
contribution the capital was increased up to BGN 5,488,000 (five million four hundred and eighty-eight
thousand), distributed in 5,488,000 ordinary registered voting shares with nominal value of BGN 1.00 each.
At the end of 2015, the capital was increased to BGN 13,500 thousand through cash and non-cash
contributions. At the end of 2016, the capital was increased to BGN 15,000 thousand after the successful Initial
Public Offering on the Bulgarian Stock Exchange. In 2020, the capital was increased to BGN 18,000 thousand
as a result of a procedure for Secondary Public Offering of a new issue of shares, carried out in the period
September 28, 2020 – October 30, 2020 on the grounds of a Prospectus, together with the supplements to it,
confirmed by the Financial Supervision Commission with Decision no. 148- Е of February 18, 2020, Decision
no. 405-E of June 11, 2020, Decision no. 601-E of August 13, 2020 and Decision no. 791-E of October 29,
2020.
Since December 20216 the shares of Allterco AD are traded on the Bulgarian Stock Exchange and since
November 22, 2021 the Company’s shares are traded on the Frankfurt Stock Exchange.
The Parent Company is managed by the Board of Directors and is represented jointly or separately by Svetlin
Todorov, Wolfgang Kirsch and Dimitar Dimitrov.
1.2. Ownership and management
The Allterco Group (the Group) includes Allterco AD (the Parent Company) and its subsidiaries, in which the
Parent Company has controlling interest directly or through another subsidiary. Allterco AD is a public
company in Bulgaria under the Public Offering of Securities Act.
The distribution of the share capital of Allterco AD as of December 31, 2021, is as follows:
Name Number of shares % of the capital
Svetlin Todorov 5 847 120 32.48%
Dimitar Dimitrov 5 847 120 32.48%
Persons holding less than 5% of the capital
Other physical persons and legal entities 6 305 759 35.04%
Total 17 999 999 100.00%
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022 UIC 201047670
All amounts are in thousand Bulgarian leva unless otherwise stated
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail. Page 10 of 71
On June 30, 2022, Allterco AD acquired 40,000 own shares at a price of BGN 19.50 per share, representing
0.22% of its registered capital through over-the-counter transactions (OTC transactions) from two independent
shareholders. The shares are intended to provide payment of part of the acquisition price of the Slovenian IoT
company GOAP d.o.o. Nova Gorica (GOAP).
The composition of the Board of Directors as at December 31, 2022 is as follows:
• Gregor Bieler – Chairman;
• Nikolay Martinov – Deputy Chairman;
• Dimitar Dimitrov – Executive Director and representative;
• Wolfgang Kirsch – Executive Director and representative;
• Svetlin Todorov – member of the Board of Directors and representative;
The members of the Board of Directors represent the Company jointly or separately.
1.3. Scope of activities
The scope activity of Allterco AD includes the acquisition, management, evaluation and sale of participations
in Bulgarian and foreign companies; acquisition, management and sale of bonds; acquisition, evaluation and
sale of patents, assignment of licenses for the use of patents to companies in which the Parent Company
participates; financing of companies in which the Parent Company participates. The Group includes companies
engaged in the development, production and trading in smart (IoT) devices and real estate management.
1.4. Group structure
As of December 31, 2022 the Group includes Allterco AD and the following subsidiaries in the country and
abroad, which it controls:
Company name
December 31
2022
December 31
2021
Percentage of
participation
Percentage of
participation
In the country
ALLTERCO TRADING OOD (Ltd.) 100% 100%
ALLTERCO ROBOTICS EOOD (Solely-owned LLC) 100% 100%
ALLTERCO PROPERTIES EOOD (Solely-owned LLC) 100% 100%
Company name
December 31
2022
December 31
2021
Percentage of
participation
Percentage of
participation
Abroad
SHELLY USA (formerly ALLTERCO ROBOTICS INC), USA 100% 100%
ALLTERCO EUROPE GMBH, Germany 100% 100%
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022 UIC 201047670
All amounts are in thousand Bulgarian leva unless otherwise stated
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail. Page 11 of 71
At the beginning of 2021, Allterco AD acquired a stake in a newly established (associated) company in China
- Allterco Asia Ltd. with seat and registered office in Shenzhen, Guangdong Province. The share capital of the
new company is CNY 100,000, with the participation of Allterco AD being 30% (BGN 8,000) with the
possibility of acquiring additional 50% and reaching a controlling stake of up to 80% at the management’s
discretion.
In September 2021, Allterco sold its stake in three Asian subsidiaries.
In December 2021, Allterco AD established a new subsidiary in Germany. The name of the new company is
Allterco Europe GmbH and has share capital of EUR 500,000, which is 100% held by Allterco AD.
In the first quarter of 2022, Allterco AD increased the share capital of its subsidiary Allterco Robotics EOOD.
The capital increase is intended to accelerate the development of new products, expand production capacity
and enter new markets, as well as R&D activities. The share capital of Allterco Robotics EOOD was increased
from BGN 1 500 000 to BGN 7 000 000 through subscription of new 5 500 000 company shares with a nominal
value of BGN 1.00 each.
On June 15, 2022 the Board of Directors of Allterco AD took a decision to provide additional funding to the
US subsidiary Shelly USA amounting to USD 1.5 million, partially through capital increase in the amount of
USD 500 000 and partially through an additional cash contribution in the amount of USD 1 million, for a
period of 1 year, at an annual interest rate of 1%.
At the end of the reporting period, Allterco AD has made an additional cash contribution amounting to BGN
1 834 thousand (USD 1 million) to its subsidiary Shelly USA, which was granted for a period of one year with
an annual interest rate of 1.0%. As at the date of these statements, the money transfer for the subsidiary’s
capital increase by BGN 921 thousand (USD 500 thousand) was completed.
In November 2022, the subsidiary Allterco Robotics EOOD opened a branch in the Republic of Irelan d.
2. Basis for preparation and accounting principles
2.1. Basis for preparation
The Group keeps its current accounting and prepares its financial statements in accordance with the
requirements of the Bulgarian commercial and accounting legislation.
These consolidated financial statements have been prepared in accordance with the requirements of the
International Accounting Standards (IAS), published by the International Accounting Standards Board (IASB)
and adopted by the European Union.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022 UIC 201047670
All amounts are in thousand Bulgarian leva unless otherwise stated
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail. Page 12 of 71
As of December 31, 2022, IASs comprises the International Financial Reporting Standards (IFRS) and the
interpretations of the International Financial Reporting Interpretations Committee (IFRIC), approved by the
International Accounting Standards Board (IASB), and the International Accounting Standards and
Interpretations of the Standing Interpretations Committee (SIC), approved by the International Accounting
Standards Committee (IASC) and adopted by the European Union (EU).
IASB annually issues the standards and their explanations, which, after formal approval by the European
Union, are effective for the year for which they were issued. However, many of these standards are not
applicable to the Group’ s activities due to the specifics set in them.
2.2. Initial application of new and amended IFRSs
2.2.1. Standards effective for the current reporting period
The Group's management has complied with all standards and interpretations that are applicable to its activity
and have been officially adopted by the EU as of the date of preparation of these consolidated financial
statements.
The following amendments to the existing standards issued by the International 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 management has reviewed the changes in the existing accounting standards effective from
January 1, 2022 and believes that they do not require changes in terms of the accounting policy applied in the
current year.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022 UIC 201047670
All amounts are in thousand Bulgarian leva unless otherwise stated
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail. Page 13 of 71
2.2.2. 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);
• 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).
2.2.3. 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 the International
Accounting Standards Board (IASB) except for the following new standards and amendments to the existing
standards, which were not endorsed for use in EU as at the date of publication of these financial statements
(the effective dates stated below is for IFRS as issued by IASB):
• 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);
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022 UIC 201047670
All amounts are in thousand Bulgarian leva unless otherwise stated
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail. Page 14 of 71
• 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 Group anticipates that the adoption of these new standards and amendments to the existing standards will
have no material impact on the financial statements of the Group in the period of initial application.
Hedge accounting for a portfolio of financial assets and liabilities whose principles have not been adopted by
the EU remains unregulated.
According to the Group ’s estimates, the application of hedge accounting to a portfolio of financial assets or
liabilities pursuant to IAS 39 Financial Instruments - Recognition and Measurement would not significantly
impact the financial statements, if applied as at the reporting date.
2.3. Accounting principles
The consolidated financial statements of the Group have been prepared on the going concern principle, as it is
expected that the Group shall continue its operating activity in near future.
A military conflict between Russia and Ukraine began in February 2022, but since the Group does not have
transactions and accounts with customers from these two countries, management believes that this event is not
expected to directly or indirectly affect the Group's results and financial position in the future.
Management has no plans or intentions to sell the business or cease operations, which could materially change
the carrying amount or classification of assets and liabilities reported in the consolidated financial statements.
The assessment of assets and liabilities and the measurement of income and expenses is made in compliance
with the historical cost principle. This principle is modified in specific cases by the revaluation of certain assets
and/or liabilities to their fair value as of December 31 of the current year and December 31 of the previous
year, as indicated in the relevant notes below.
2.4. Functional and reporting currency
The reporting currency for the elements of the consolidated financial statements is the Bulgarian lev (BGN),
which is the functional currency of Allterco AD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022 UIC 201047670
All amounts are in thousand Bulgarian leva unless otherwise stated
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail. Page 15 of 71
T he data in the elements of the consolidated financial statements and the notes thereto are presented in
thousands of BGN, unless explicitly stated otherwise. The amounts over BGN 500 are rounded up to 1
thousand for disclosure in the consolidated financial statements and the notes.
The companies of the Group keep their accounting registers in the functional currency of the country in which
they operate. The effects of exchange differences relating to the settlement of foreign currency transactions or
the reporting of transactions in a foreign currency at rates that are different from those at which they were
originally recognised shall be included in the statement of comprehensive income at the time they arise, treated
as “ other operating income and expenses ” except those related to investments and loans denominated in foreign
currency, which are presented as “fi nance income” and “finance expenses”. Non -monetary assets and liabilities
originally denominated in a foreign currency are accounted for in a functional currency using the historical
exchange rate at the date of the transaction and subsequently not revalued at a closing rat e.
2.5. Comparative data
According to the Bulgarian accounting legislation and IAS, the financial year ends on December 31 and
enterprises are required to present annual financial statements as of the same date, together with comparative
data as of that date for the previous year.
If necessary, the data presented for the previous year are adjusted for better comparability with the data from
the current period.
2.6. Prior period errors
Prior period errors are omissions, misstatements or inconsistencies in the Group’s financial statements for prior
periods arising as a result of omitted or misused reliable information. This is information that was available at
the time of approval for issue of the financial statements or that was reasonably expected to be obtained and
used in the preparation and presentation of those statements. Prior period errors may arise in recognising,
measuring, presenting or disclosing elements of the financial statements.
They are adjusted retrospectively by restating comparative information or opening balances of assets, liabilities
and equity (where they arose in prior periods for which information was not disclosed in the financial
statements). The adjustment is reflected in the first financial statements authorised for issue after discovery of
the error and the statements include a statement of financial position as at the beginning of the earliest
comparative period, in case the error has a material effect on the infor mation presented in the statement of
financial position in the beginning of the comparative period (see Note 10).
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022 UIC 201047670
All amounts are in thousand Bulgarian leva unless otherwise stated
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail. Page 16 of 71
2.7. Transactions and balances
A transaction in foreign currency is recognized initially in the functional currency by applying the foreign
currency exchange rate (spot) between the functional currency and the foreign currency at the time of the
transaction or operation.
At each date of financial statement preparation:
(a) monetary positions, receivables and payables denominated in foreign currency are recalculated into
the functional currency using the exchange rate published by the BNB on the last business day of the respective
month;
(b) non-monetary items held at historical cost in a foreign currency are translated using the exchange
rate at the date of the transaction, if an exchange rate other than that of the transaction (average monthly, daily
or other) is applied; and
(c) non-monetary items held at fair value in a foreign currency are recalculated using the exchange rates
at the date when the fair value was determined.
Foreign currency exchange differences are recognized in accordance with IAS 21 the Effects of Changes in
Foreign Exchange Rates.
The items of the consolidated statement of financial position and consolidated statement of comprehensive
income of foreign companies of the Group, using a functional currency other than Bulgarian lev, are
retranslated into BGN to be included in the consolidated statement of the Group as follows:
• All monetary and non-monetary assets and liabilities (including comparative information) are
recalculated at the BNB closing exchange rate at the date of the relevant statement of financial position;
Monetary positions in foreign currency as of December 31, 2021 and December 31, 2022 are
retranslated in these financial statements at the closing exchange of the BNB. As of December 31,
2021 – BGN 1.72685 for 1 USD; BGN 1,95802 for 10 NOK and BGN 1,95583 for 1 EUR, and as of
December 31, 2022 – BGN 1,83371 for 1 USD; BGN 1,86025 for 10 NOK; and BGN 1,95583 for 1
EUR)
• The income and expense items of each comprehensive income statement are recalculated at the
accounting date at the weighted average exchange rate for the accounting period;
• All exchange rate differences obtained are recognized as other comprehensive income.
• The cumulative amount of these exchange rate differences is presented in a separate component of
equity until the foreign operation is disposed.
• Share capital and other components of equity are translated using the historical rate, i.e. the exchange
rate at the date of issue of share capital, or at the date of the associated transaction for other components
of equity.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022 UIC 201047670
All amounts are in thousand Bulgarian leva unless otherwise stated
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail. Page 17 of 71
2.8. Accounting estimates and judgements
The application of the IAS requires the Group's management to apply certain accounting assumptions and
judgments when preparing the annual consolidated financial statements and when determining the value of
some of the assets, liabilities, income, expenses and contingent assets and liabilities.
All assessments are based on the management’s best judgment as of the date of preparation of these financial
statements. Actual results could differ from those presented in these financial statements.
In preparing these financial statements, the management used judgments related to the following items:
• Right-of-use assets – period of use of the assets and discount factor (Note 3.03)
• Current and non-current receivables – need for impairment (Note 3.07, 3.10 and 4.04)
• Retirement benefits obligations (Note 3.17)
• Deferred tax assets (Note 3.08)
• Warranty service provision (Note 4.05)
2.9. Subsidiaries and associated companies
Subsidiaries are the entities over which Allterco AD exercises control as defined in IFRS 10 Consolidated
Financial Statements.
The parent-company (the investor) controls the investee company if it has:
• Rights over the ownership of the subsidiary;
• Rights over the variable returns from its participation in the subsidiary;
• Ability to use its powers over the entity in order to influence the size of return on investment.
Subsidiaries are considered controlled starting from the date on which control is acquired by the Group and
they cease to be consolidated on the date when it is assumed that the control has been lost.
Associated company is a company in which the Group has significant influence on decisions regarding
operating and financial policies, but without being able to fully control those policies.
2.10. Non-controlling interest
Non-controlling interest is valued at the proportionate share of identifiable net assets at the acquisition date.
2. 11. Consolidation
The consolidated financial statements of the Group include the financial statements of the parent company and
the subsidiaries. All assets, liabilities, capita l, income, expenses and cash flows of the group companies are
presented as such as they belong to just one entity.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022 UIC 201047670
All amounts are in thousand Bulgarian leva unless otherwise stated
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail. Page 18 of 71
Subsidiaries are those entities that are controlled by the parent company. Control occurs when the parent
company exercises its rights on variable return arising from its participation in the subsidiary’s capital and has
the ability to influence this return from investment through its power. The consolidated financial statements
have been prepared following the same accounting policies with respect to similar transactions and business
facts of all companies in the Group. All mutual interests, as well as significant internal transactions, balances
and unrealized gains in the Group are eliminated and the financial statements are prepared using the full
consolidation method. The financial results of operations of the subsidiaries are included in the consolidated
financial statements from the date of acquisition of control over them and cease to be consolidated from the
date on which such control is lost. When a subsidiary is acquired as a result of an internal group restructuring,
its net assets and financial result are included from the beginning of the earliest accounting period presented
in the financial statements.
2.12. Definition and assessment of the items of the consolidated financial statements
2.12.1. Revenue
The Group recognises revenue from the following major sources:
• Sale of electronic devices
Revenue is measured based on the consideration to which the Group expects to be entitled in a contract with a
customer and excludes amounts collected on behalf of third parties. The Group recognises revenue when it
transfers control of a product or service to a customer.
The Group sells electronic devices both to the wholesale market and directly to customers through its own
website and through direct sales. Sales-related warranties associated with the products cannot be purchased
separately and they serve as an assurance that the products sold comply with agreed-upon specifications.
Accordingly, the Group accounts for warranties in accordance with IAS 37 Provisions, Contingent Liabilities
and Contingent Assets (see note 4.04).
For sales of electronic equipment to the wholesale market, revenue is recognised when control of the goods
has transferred, being when the goods have been shipped to the wholesaler’s specific location (delivery).
Following delivery, the wholesaler has full discretion over the manner of distribution and price to sell the
goods, and bears the risks of obsolescence and loss in relation to the goods. A receivable is recognised by the
Group when the goods are delivered to the wholesaler as this represents the point in time at which the right to
consideration becomes unconditional, as only the passage of time is required before payment is due.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022 UIC 201047670
All amounts are in thousand Bulgarian leva unless otherwise stated
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail. Page 19 of 71
For sales of goods to retail customers, revenue is recognised when control of the goods has transferred, being
at the point the customer purchases the goods. Payment of the transaction price is due when the customer
receives the goods.
For internet sales, revenue is recognised when control of the goods has transferred to the customer, being at
the point the goods are shipped to the customer’s specific location. When the customer initially purchases the
goods online the transaction price received by the Group is recognised as a contract liability until the goods
have been delivered to the customer.
Under the Group’s stand ard contract terms, customers have a right of return within 14 days.
The Group uses its accumulated historical experience to estimate the number of returns on a portfolio level
using the expected value method. It is considered highly probable that a significant reversal in the cumulative
revenue recognised will not occur given the consistent level of returns over previous years.
Revenue from services
The Group reports revenue from services, complying with the commitments under the contract. Revenue from
services is reported upon final completion of the services (by objects) recognized as performed.
Other income/revenue
Other income and revenue are recognized when the right to receive them is established.
The Group companies apply IFRS 15 and the management carefully examines its trade practices for possible
changes at the time of revenue recognition. No change in the performance obligations and the price allocation
in the contracts and revenue recognition is needed for the reporting period.
Depending on the nature of the activity and the contracts with customers, the management has assessed the
categories of revenue breakdown and has disclosed them in Note 4.01.
2.12.2. Expenses
Expenses for future periods shall be deferred for recognition as current expenses in the period in which the
obligations under the contracts to which they refer, would be performed.
Financial expenses consist of interest expenses and other direct costs related to loans as well as bank fees and
losses from foreign currency exchange.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022 UIC 201047670
All amounts are in thousand Bulgarian leva unless otherwise stated
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail. Page 20 of 71
2.12.3. Property, plant and equipment
Property, plant and equipment (non-current tangible assets) are presented in the financial statements at
acquisition cost (cost price) less accumulated depreciation and impairment losses.
Initial recognition
Upon initial acquisition, property, plant and equipment are evaluated at acquisition cost (cost price), which
includes the purchase price, including customs charges and any directly attributable costs of bringing the asset
to working condition. The direct costs are as follows: costs of site preparation, costs of initial delivering and
handling, installation costs, costs for personnel remuneration fees related to the project, non-refundable taxes,
etc.
When acquiring property, plant and equipment on a deferred payment basis, the purchase price is equivalent
to the present value of the liability, discounted on the basis of the interest rate on the borrowed resources of
the Group with a similar maturity and purpose. The difference between the cash price equivalent and the total
payment is recognized as interest over the course of the loan, unless it is capitalized in accordance with IAS
23.
Measurement after recognition
The approach chosen by the Group for the subsequent measurement of property, plant and equipment is the
acquisition cost model - less any subsequent depreciation and any accumulated impairment losses.
For all other classes of non-current tangible assets, the company has applied the acquisition cost model.
Depreciation Methods
The Company uses the straight-line method of depreciation of non-current tangible assets. Depreciation of
assets begins when they are available for use. The useful life by groups of assets is determined in accordance
with: physical wear and tear, specifics of the equipment, future intentions for use and actual obsolescence.
The useful life by classes of assets is as follows:
Vehicles 4 years
Buildings 25 years
Computer equipment 2-5 years
Office equipment 5- 6,67 years
Other non-current tangible assets 6,67 years
The determined useful life of non-current tangible assets is reviewed at the end of each year and, if significant
deviations are found against future expectations for the useful life of the assets, it is adjusted prospectively.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022 UIC 201047670
All amounts are in thousand Bulgarian leva unless otherwise stated
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail. Page 21 of 71
Derecognition of non-current tangible assets
The carrying amount of an item of property, plant and equipment is written off: when it is sold, when no other
economic benefits are expected from its use, or when it is disposed.
Gains or losses arising on the derecognition of an item of property, plant and equipment are included in the
statement of comprehensive income when the asset is written off. Gains and losses on disposals of non-current
assets are determined when the proceeds from sale (disposal) are reduced by the book value of the asset and
the costs related to the sale. They are stated net, to "Other operating income" in the statement of comprehensive
income.
The amount of consideration to be included in the gain or loss arising from the derecognition of an item of
property, plant and equipment is determined in accordance with the requirements for determining the
transaction price in paragraphs 47– 72 of IFRS 15. Subsequent changes to the estimated amount of the
consideration included in the gain or loss shall be accounted for in accordance with the requirements for
changes in the transaction price in IFRS 15.
2.12.4. Intangible assets
Intangible assets are presented in the financial statements at acquisition price (cost price) less accumulated
depreciation and impairment losses.
The Group applies a straight-line method of depreciation of intangible assets with a useful life of 2 years for
the software products, 6.67 years for the software platform, 3 years for an ISO certificate.
The book value of the intangible assets is reviewed for impairment when there are events or changes in
circumstances that indicate that the book value amount could exceed their recoverable amount. Then the
impairment is included as an expense in the statement of comprehensive income.
Initial recognition
Externally generated intangible assets on their acquisition are measured at acquisition price, which includes
purchase price, import duties, non-refundable taxes and expenses of preparing the asset for its intended use.
The direct expenses are: costs of employee benefits (as defined in IAS 19) arising directly from bringing the
asset to its working condition; professional fees arising directly from bringing the asset to its working
condition; costs of testing whether the asset is functioning properly, expenses for fees of persons related to the
project, non-refundable taxes, etc.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022 UIC 201047670
All amounts are in thousand Bulgarian leva unless otherwise stated
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail. Page 22 of 71
Intangible assets are recognized if they meet the definition of intangible assets set out in IAS 38 Intangible
Assets, namely:
• Meet the definition of an intangible asset;
• Upon their acquisition they can be reliably measured;
• Economic benefits are expected from the use of the asset, as evidenced by the availability or plan to
obtain sufficient resources to enable the Group to obtain the expected economic benefits; the ability
to effectively perform its functional role in accordance with the intention of the Group regarding its
use or there is a clearly defined and specified technical feasibility.
Subsequent costs
Expenses related to the maintenance of initially established standard efficiency, incurred after the
commissioning of intangible non-current assets, are recognized as current at the time when they are incurred.
The carrying amount of the respective intangible asset is adjusted by the expenses that lead to increase of the
expected future economic benefits form the use of an intangible asset above the initially determined standard
efficiency.
2.12.5. Goodwill
Goodwill is an asset representing the future economic benefits arising from other assets acquired in a business
combination that are not individually identified and separately recognised. Initially, it is presented in the
consolidated financial statements at acquisition cost and subsequently it is presented at acquisition cost less
impairment losses. Goodwill is not amortized.
The goodwill originating as a result of the acquisition of a subsidiary is presented in the consolidated statement
of financial position as a part of non-current assets and the goodwill originating as a result of acquisition of
joint-ventures or associated companies is included in the total value of investment and is reported as
“investments in associated companies”.
The goodwill associated with the acquisition of associated companies is tested as part of the total value of the
investment. Separately recognized goodwill on the acquisition of subsidiaries is tested mandatorily for
impairment at least once annually. Impairment losses on goodwill are not reversed subsequently. Gains or
losses on sale (disposal) of a subsidiary of the Group also include the book value of the goodwill, associated
with the sold (disposed) company.
Any goodwill amount recognized in the financial statements is attributable to a certain cash generating object
at the time a business combination is completed, and this object is applied when tests for impairment are
conducted. For determining the cash-generating objects, are considered only objects that are expected to
generate future economic benefits and that are subject to the business combination, which generated the
goodwill.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022 UIC 201047670
All amounts are in thousand Bulgarian leva unless otherwise stated
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail. Page 23 of 71
Losses from impairment of goodwill are presented in the consolidated statement of comprehensive income
(in profit or loss for the year) as part of item “Impairment of non - current assets”.
2.12.6. Other long-term equity investments
Other long-term financial investments are non-derivative financial assets in the form of shares and participation
of other companies (minority interest) held with a long-term perspective.
Initial recognition
Capital investments are initially recognized at acquisition cost, which is the fair value of the remuneration
paid, including direct acquisition cost of the investment (the financial asset). All purchases and sales of capital
investments are recognized on the “trading date” of the transaction, i.e., the date on which the Group commits
to purchase or sell the asset.
Subsequent measurement
Capital investments owned by the Group are subsequently measured at fair value. The results of the subsequent
measurement to fair value are presented in the statement of comprehensive income (in other components of
comprehensive income) and respectively in the reserve related to financial assets at fair value, through other
comprehensive income. These results are transferred to retained earnings on disposal (sale) of the respective
investment.
2.12.7. Investments in associated companies
These investments are reported in the consolidated financial statements of the Group by the equity method. By
this method, the share of the Group in the comprehensive income of an associated company is consolidated on
one line, so that the value of the investment corresponds to its share in the net assets as of December 31 for the
respective year or at the end of the respective reporting period. The Group recognizes its share in losses in
associated companies up to the amount of its investment, including internal loans granted, unless it has
undertaken an obligation to pay such liabilities on behalf of the associated company.
As of December 31, 2022, the Group reports a share in the profit of associated companies amounting to BGN
118 thousand. The value of the investment indicated in the consolidated statement of financial position has
been increased by the same amount.
2.12.8. Inventories
Inventories are accounted at the lower of the two following values: price for acquisition (cost) and net
realizable value.
The costs incurred to bring an inventory to its present condition and location are included in the cost of
acquisition (cost) as follows:
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022 UIC 201047670
All amounts are in thousand Bulgarian leva unless otherwise stated
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail. Page 24 of 71
• Materials - the purchase price and all related costs of delivery;
• Goods - the purchase price and all related costs of delivery, customs duties, transport costs, non-
recoverable taxes and other costs incurred in order to bring the goods in ready for use state.
In the use (sale) of inventory, the weighted average method is used.
2.12.9. Financial instruments
A financial instrument is any contract that simultaneously gives rise to both a financial asset in one entity and
a financial liability or equity instrument in another entity. Financial assets and liabilities are recognised in the
separate statement of financial position when the Group becomes a party to the contractual terms of the relevant
financial instrument that gave rise to this asset or liability.
а) Financial assets
Initial recognition and measurement
Upon initial recognition, financial assets are classified as financial assets that are subsequently measured at
amortized cost, at fair value in other comprehensive income (OCI) and as financial assets at fair value in profit
or loss. Financial assets are classified upon their initial acquisition according to the characteristics of the
contractual cash flows of the financial asset and the Group's business management model. The Group initially
measures the financial asset at fair value plus transaction costs, in the case of financial assets that are not
measured at fair value through profit or loss.
Trade receivables that do not have a significant financing component, and for which the Group has applied a
practically expedient measure, are stated at the transaction price determined according to IFRS 15. The Group
reclassifies financial assets only when its business model changes.
In order to be classified and measured at amortized cost or at fair value in OCI, the financial asset should
generate cash flows that represent " solely payments of principal and interest" (SPPI) on the outstanding
principal amount. This measurement is called the "SPPI test” and is performed at the relevant instrument level.
The Group's business model for managing financial assets refers to how the Company manages its financial
assets to generate cash flows. The business model determines whether cash flows will arise from the collection
of contractual cash flows, the sale of financial assets, or both.
Purchases or sales of financial assets, the terms of which require the delivery of the assets within a certain
period of time, usually established by a regulatory provision or current practice in the relevant market (regular
purchases), are recognized on the date of trading (transaction), i.e. on the date on which the Group has
committed to buy or sell the asset.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022 UIC 201047670
All amounts are in thousand Bulgarian leva unless otherwise stated
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail. Page 25 of 71
Subsequent measurement
For the purposes of subsequent measurement, financial assets are classified into four categories:
• Financial assets at amortized cost (debt instruments);
• Financial assets at fair value in other comprehensive income with "recycling" of cumulative profit or
loss (debt instruments);
• Financial assets designated as financial assets at fair value in other comprehensive income with no
"recycling" of cumulative profit or loss at their derecognition (equity instruments) (measurement
alternative);
• Financial assets at fair value through profit or loss.
Financial assets at amortized cost (debt instruments)
The Group measures financial assets at amortized cost if both of the following conditions are met:
• The financial asset is held within a business model aimed at obtaining the contractual cash flows, and
• The terms of the contract for the financial asset give rise to cash flows on specific dates that represent
solely payments of principal and interest on the outstanding principal amount. Financial assets at
amortized cost are subsequently measured using the effective interest rate (EIR) method and are subject
to impairment. Gains and losses are recognized in profit or loss when the asset is derecognized,
modified or impaired.
The Group’s financial assets at amortized cost include trade and other receivables, term deposits and cash at
bank accounts.
Financial assets at fair value in other comprehensive income (debt instruments)
The Group measures its debt instruments at fair value in other comprehensive income if both of the following
conditions are met:
• The financial asset is held within a business model aimed at obtaining the contractual cash flows, and its
disposal as well; and
• On the specified dates, the contractual terms of the financial asset give rise to cash flows that represent
solely payments of principal and interest on the outstanding principal amount.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022 UIC 201047670
All amounts are in thousand Bulgarian leva unless otherwise stated
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail. Page 26 of 71
In respect of debt instruments at fair value in other comprehensive income, interest income, currency
revaluation and impairment losses or their reversal are recognized in profit or loss and calculated in the same
way as those for financial assets measured at amortized cost. Other changes in fair value are recognized in
other comprehensive income. Upon derecognition, the cumulative change in fair value recognized in other
comprehensive income is stated in profit or loss.
Financial assets designated as financial assets at fair value in other comprehensive income (equity
instruments)
Upon initial recognition, the Group may elect to classify irrevocably as equity instruments designated as
measured at fair value in other comprehensive income when they meet the equity requirements under IAS 32
Financial Instruments: Presentation and when they are not held for trading. The classification is determined on
an individual instrument basis. These investments in equity instruments are held for medium to long-term
purpose and accordingly, the Group elected to designate them as equity instruments at fair value through other
comprehensive income as it believes that recognising short-term fluctuations in these investments fair value in
profit or loss would not be consistent with the Group’s strategy of holding these investments for long term
purposes.
Gains and losses on these financial assets are never "recycled" in profit or loss. Dividends are recognized as
income in the statement of comprehensive income when the right to payment is established, except when the
Group derives benefits from these receipts as a refund of part of the acquisition price of the financial asset, in
which case the gains are reported in other comprehensive income. Equity instruments designated as measured
at fair value in other comprehensive income are not in the scope of IFRS 9 expected credit loss model.
Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss include financial assets that do not qualify for classification
at amortized cost or at fair value through other comprehensive income and financial assets designated at initial
recognition as measured at fair value through profit or loss, or financial assets that are required to be measured
at fair value. Derivatives, including separated embedded derivatives, are classified as held for trading unless
designated as effective hedging instruments. Financial assets with cash flows that are not solely payments of
principal and interest are classified and measured at fair value in profit or loss, regardless of the business
model.
Notwithstanding the criteria for debt instruments to be classified at amortized cost or at fair value in other
comprehensive income as described above, debt instruments may be designated as measured at fair value in
profit or loss upon initial recognition, if thus eliminates or substantially reduces the accounting mismatch.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022 UIC 201047670
All amounts are in thousand Bulgarian leva unless otherwise stated
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail. Page 27 of 71
Financial assets at fair value through profit or loss are reflected in the statement of financial position at fair
value, and the net changes in fair value are recognized in the statement of comprehensive income.
Derecognition
A financial asset (or, where applicable, part of a financial asset or part of a group of similar financial assets) is
derecognised (i.e. removed from the Group's statement of financial position) when:
• the rights to receive cash flows from the asset have expired; or
• the rights to receive cash flows from the asset have been transferred or the Group has assumed the
obligation to pay the received cash flows in full, without significant delay, to a third party through a
transfer agreement; where either (a) the Group has transferred substantially all the risks and rewards
of ownership of the asset; or (b) the Group has neither transferred nor retained substantially all the
risks and rewards of ownership of the asset but has not retained control.
When the Group has transferred its rights to receive cash flows from the asset or entered into a transfer
agreement, it evaluates whether and to what extent it has retained the risks and rewards of ownership. When it
has neither transferred nor retained substantially all the risks and rewards of ownership of the financial asset,
nor has it transferred control over it, it still recognizes the transferred asset to the extent of its continuing
involvement in it.
In this case, the Group also recognizes the related obligation. The transferred asset and related liability are
valued on a basis that reflects the rights and obligations that the Group has retained. A continuing involvement
being a security of the transferred asset is valued at the lower of the original book value of the asset and the
maximum amount of consideration that the Group may be required to pay. The Group applies the same
derecognition policies for impaired financial assets.
I mpairment of financial assets
Additional disclosures related to impairment of financial assets, are included in the following notes as well:
• Significant judgements in applying the Group’s accounting policy. Key estimates and assumptions
with high uncertainty. (Note 2.12.17);
• Trade and other receivables (Notes 3.10 and 4.04).
The Group recognizes an allowance for expected credit losses (ECL) for all debt instruments that are not
measured at fair value through profit or loss. ECL are based on the difference between the contractual cash
flows due under the terms of the contract and any cash flows the Group expects to receive, discounted at an
approximation of the original effective interest rate. Expected cash flows include cash flows from the sale of
collateral held or other credit enhancements that are an integral part of the terms of the contract.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022 UIC 201047670
All amounts are in thousand Bulgarian leva unless otherwise stated
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail. Page 28 of 71
ECL are recognized in three stages. For exposures for which there has been no significant increase in credit
risk since initial recognition. Allowances for ECL are recognized for credit losses that arise as a result of
default events that are possible occur within the next 12 months (12-month ECL). For exposures for which
there has been a significant increase in credit risk since initial recognition, an allowance for expected credit
loss is required in respect of credit losses expected over the remaining term of the exposure, regardless of when
the default occurs (ECL over the lifetime of the instrument). A significant increase in credit risk is observed
in the case of material financial difficulties of the debtor, probability of declaring bankruptcy and liquidation,
financial restructuring or inability to repay the debt (overdue for more than 30 days) are taken as an indicator
for impairment of the asset.
Regarding cash and cash equivalents, the Group applies the credit ratings of the banks and publicly available
information on default rates for banks for in order to prepare an impairment assessment. The Group uses
historical experience in order to determined loss given default. As significant increase in credit risk has not
been identified, the Group applies 12-month ECL.
The Group considers a financial instrument in default when contractual payments are overdue for 90 days.
However, in certain cases, it may consider a financial asset to be in default when internal or external
information provides an indication that it is unlikely that the Group will receive the outstanding contractual
amounts in full before taking into account any credit improvements. All financial assets measured at amortized
cost are subject to collective impairment, except for those in default (phase 3).
F inancial liabilities
Initial recognition and measurement
Upon initial recognition, financial liabilities are classified as financial liabilities at fair value through profit or
loss, incl. derivatives or as financial liabilities at amortized value, incl. loans and other borrowings and trade
and other payable as appropriate. Initially, all financial liabilities are recognized at fair value, and in the case
of loans and borrowed funds and liabilities, net of direct transaction costs.
The Group's financial liabilities include trade and other payables, bank loans and lease liabilities.
Subsequent measurement
Financial liabilities are measured according to their classification as specified below:
Financial liabilities measured at fair value through profit or loss
Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial
liabilities designated upon initial recognition as such at fair value through profit or loss.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022 UIC 201047670
All amounts are in thousand Bulgarian leva unless otherwise stated
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail. Page 29 of 71
F inancial liabilities are classified as held for trading if they are acquired for repurchase in the near future. Gains
or losses on liabilities held for trading are recognized in the statement of comprehensive income.
Financial liabilities designated upon initial recognition as financial liabilities at fair value through profit or loss
are designated as such at the date of initial recognition only if the criteria of IFRS 9 are met. The Group has
not designated any financial liabilities at fair value through profit or loss.
Financial liabilities at amortized cost
The Group's financial liabilities at amortized cost are reported at amortized cost after applying the effective
interest method.
Derecognition
A financial liability is derecognized when the obligation is discharged, cancelled or expires. When an existing
financial liability is exchanged with another from the same creditor under substantially different terms, or the
terms of an existing liability are substantially changed, this exchange or modification is treated as
extinguishment of the original financial liability and recognition of a new financial liability. The difference in
the respective carrying amounts is recognized in the statement of comprehensive income.
The main financial instruments included in the consolidated statement of financial position of the Group are
presented below.
Trade and other receivables
Trade receivables are amounts owed by customers for goods sold and services performed in the ordinary course
of business. They are usually due for short-term settlement and are therefore classified as current. Trade
receivables are initially recognized at the amount of the unconditional consideration due, unless they contain
significant financing components.
The Group holds trade receivables for the purpose of collecting contractual cash flows and therefore measures
them at amortized cost using the effective interest method. No discounting is applied when the effect is
immaterial.
Future cash flows determined for a group of financial assets that are collectively measured for impairment are
determined on the basis of historical information regarding financial assets with credit risk characteristics
similar to the characteristics of the group of financial assets.
Assets that are subject to individual impairment are not included in an impairment group.
The Group applies a simplified approach in recognizing impairment of trade and other receivables and
recognizes loss allowance for lifetime expected credit losses. In estimating expected credit losses on trade
receivables, the Company uses a provision matrix.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022 UIC 201047670
All amounts are in thousand Bulgarian leva unless otherwise stated
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail. Page 30 of 71
When estimating expected credit losses on trade receivables, the Group uses its historical experience of credit
losses on trade receivables to estimate the expected credit losses for the entire life of the financial assets.
B orrowings
Borrowings are recognized initially at fair value, which is formed by the cash proceeds received, less the
inherent transaction costs. After their initial recognition, interest-bearing loans are measured at amortized cost,
where any difference between the initial cost and the maturity value is recognized in profit or loss over the
period of the loan by applying the effective interest method.
Finance costs, including direct borrowing costs, are included in profit or loss using the effective interest
method, except for transaction costs on bank overdrafts, which are recognized in profit or loss on a straight-
line basis for the period, for which the overdraft was agreed upon.
Loans are classified as current when they are to be settled within twelve months from the end of the reporting
period.
Payables to suppliers, other current liabilities and advances received
Trade and other payables arise as a result of goods or services received. Current liabilities are not amortized.
Trade payables are recognized initially at fair value and subsequently at amortized cost using the effective
interest method.
2.12.10. Cash and cash equivalents
Cash includes cash on hand and current accounts, and cash equivalents include short-term bank deposits with
an original maturity of less than 3 months. The consolidated statement of cash flows is presented using the
direct method.
Cash and cash equivalents are subsequently presented at amortised cost, excluding the accumulated allowance
for expected credit losses.
2.12.11. Lease
On the effective date of the contract, the Group assesses whether the contract is or contains a lease. In
particular, whether the contract transfers the right to control the use of the identified asset for a certain period
of time.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022 UIC 201047670
All amounts are in thousand Bulgarian leva unless otherwise stated
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail. Page 31 of 71
The Group as a lessee
The Group applies a unified approach to the recognition and assessment of all leases, except for short-term
leases (i.e., leases with a lease term of up to 12 months) and leases of low-value assets. The Group recognises
lease liabilities for the payment of lease instalments and right-of-use assets, representing the right to use the
assets.
Right-of-use assets
The Group recognizes right-of-use assets from the inception date of the lease (i.e. the date on which the
underlying asset is available for use). Right-of-use assets are measured at acquisition cost less accumulated
depreciation and impairment losses and adjusted for any revaluation of lease liabilities.
The acquisition cost of right-of-use assets includes the amount of recognized lease liabilities, the initial direct
costs incurred and the lease payments made on or before the inception date of the lease, an estimate of the
costs to be incurred by the lessee in dismantling and relocating the asset, the restoration of the site on which it
is located or the restoration of the asset to the condition required under the terms of the lease, less any incentives
received under the lease. The right-of-use assets are depreciated on a straight-line basis over the lease term.
I f at the end of the lease term the ownership of the leased asset is transferred to the Group, or the acquisition
cost reflects the exercise of a purchase option, depreciation is calculated using the expected useful life of the
asset.
Lease liabilities
From the inception date of the lease, the Group recognises lease liabilities measured at the present value of the
lease payments to be made during the lease term. Lease payments include fixed payments (including in-
substance fixed payments) less any eligible lease incentives, variable lease payments depending on an index
or an interest rate, and amounts that are expected to be paid under guarantees for residual value.
Lease payments also include the exercise price of a purchase option if the Group is reasonably certain to
exercise that option, as well as penalties for terminating the lease, if the lease term reflects the Group's
exercising an option to terminate the lease.
Variable lease payments, not depending on an index or an interest rate, are recognised as expense in the period
in which the event or condition triggering the payment occurs.
In calculating the present value of lease payments, the Group uses an intrinsic interest rate at the inception date
of the lease because the interest rate implicit in the lease cannot be determined reliably. After the inception
date, the amount of lease liabilities is increased by the interest and reduced by the lease payments made.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022 UIC 201047670
All amounts are in thousand Bulgarian leva unless otherwise stated
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail. Page 32 of 71
I n addition, the carrying amount of lease liabilities is revalued, if there is a modification, a change in the lease
term, a change in lease payments (for example, changes in future payments resulting from a change in the
index or interest rate used to determine those lease payments) or a change in the measurement of the option to
purchase the underlying asset.
Short-term leases and low-value assets leases
The Group applies recognition exemption for short-term leases to its short-term building leases (for example,
leases with lease term of 12 months or less from the inception date and not containing a purchase option). The
Group also applies the recognition exemption of low-value assets leases to leases of office equipment which
is considered low-value. Lease payments on short-term leases and low-value assets leases are carried as an
expense on the straight-line basis over the lease term.
2.12.12. Provisions
Provisions are recognised when the Group has a current (constructive or legal) liability as a result of a past
event, and it is probable that the repayment/settlement of this liability will involve an outflow of resources.
Provisions are estimated based on management's best estimate as at the date of preparation of the financial
statements of the costs necessary to settle the respective liability. The estimate is discounted when the maturity
is long-term. When part of the resources to be used to settle the liability is expected to be recovered by a third
party, the Group recognises a receivable in case it is highly probable to be received, its value can be reliably
measured as well as an income (credit) under the same item in the consolidated statement of financial position,
where the provision itself is presented.
The Group charges warranty service provisions. Liabilities for warranty service provisions are accrued based
on management's best judgment of the potential amount of costs that the Group will incur upon the occurrence
of a warranty event, based on the accumulated experience of goods/products sold.
2.12.13. Payables to employees
Defined benefit plans
The Government of Bulgaria is responsible for providing pensions under defined benefit plans. The liabilities
under the Group commitment to transfer accrued amounts to defined benefit plans are recognised in the
statement of comprehensive income when they are incurred.
Paid annual leave
The Group recognises as a liability the undiscounted amount of the estimated costs of paid annual leave, in
accordance with the Labor Code and its internal rules, expected to be paid to employees in exchange for their
labor for the past reporting period.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022 UIC 201047670
All amounts are in thousand Bulgarian leva unless otherwise stated
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail. Page 33 of 71
Retirement benefit plans
In accordance with the requirements of the Labor Code, upon termination of the employment contract of an
employee who has acquired the right to a pension, the Group pays the employee a compensation in the amount
of two gross salaries, if the accumulated service at the Group is less than ten years, or six gross salaries, in case
of accumulated service time at the Group of over ten consecutive years.
Based on their characteristics, these schemes are retirement benefit plans.
The measurement of long-term employee benefits is carried out using the projected unit credit method and the
estimate at the date of the statement of financial position is made by licensed actuaries. The amount recognised
in the statement of financial position is the present value of the liabilities. The revaluations of the retirement
benefit plan liability (actuarial gain or loss), arising from experience and changes in actuarial financial and
demographic assumptions, are recognised in equity through other comprehensive income as a reserve for
retirement liabilities. The amounts released from this reserve are transferred through other comprehensive
income into retained earnings.
2.12.14. Share capital and reserves
The Group has adopted the capital maintenance financial concept. Maintaining the share capital is assessed in
nominal monetary units. Profit for the reporting period is considered acquired only if the cash /financial/
amount of equity at the end of the period exceeds the cash amount at the beginning of the period, after
deducting the distributions between the owners or the capital invested by them during the period.
Allterco AD is a joint-stock company and is obliged to register in the Commercial Register a certain amount
of share capital to serve as collateral for the claims of creditors of the Parent Company. The shareholders are
responsible for the Parent Company’s liabilities up to the amount of their shareholding in the capital and can
claim the return of this shareholding only in bankruptcy or liquidation proceedings. The Parent Company
reports its share capital at the nominal value of the shares registered in court.
Equity is the residual value of the Group company's assets after deducting all of their liabilities. It includes :
Share capital is presented in the consolidated statement of financial position at nominal value per share
according to the number of shares issued.
Financial result is the difference between the revenue and the related costs charged.
Equity is reported less the distributed dividends of the owned shares during the period in which they will be
distributed (by decision of the General Meeting).
According to the requirements of the Commerce Act and the Articles of Association of the Parent Company
Allterco AD, the Group is obliged to allocate reserves at the expense of:
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022 UIC 201047670
All amounts are in thousand Bulgarian leva unless otherwise stated
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail. Page 34 of 71
• at least one tenth of the profit, which is allocated until the funds reach 10 percent of the share capital;
• the funds received above the nominal value of the shares upon their issuance (premium reserve).
Repurchased own shares are presented in the consolidated statement of financial position at cost (acquisition
price), with their gross purchase price reduced by the Group's equity capital. Profit or loss from the sale of
repurchased own shares are presented directly in the Group's equity, under the "Repurchased shares".
In past periods, the Group reported share-based payments to employees in Bulgarian subsidiaries. Share-based
payments to employees related to services rendered are settled through equity instruments. Transferred capital
instruments are measured at their fair value on the date of transfer. Share-based payment expense is recognised
in the period in which the services are received.
Reserve from recalculation of the currency of the presented foreign activity - arises from the net effects
of the translation of the accounts of subsidiaries abroad from their functional currencies into Bulgarian leva,
for consolidation purposes.
Revaluation reserve is the difference between the previous book value of fixed assets reported at fair value
through other comprehensive income and their fair values as of the date of this consolidated financial
statements.
2.12.15. Income tax expense
Income tax expense is the amount of current income tax and the tax effect on temporary tax differences.
Current taxes on the profit of Bulgarian companies are determined in accordance with the requirements of the
Bulgarian tax legislation. The nominal tax rate in Bulgaria for 2021 and 2022 is 10%.
Subsidiaries abroad are charged according to the requirements of the relevant tax laws by country, at the
following nominal tax rates:
Country Nominal tax rates per year
2022 2021
Germany 15,825% 15,825%
USA 15-35% 15-35 %
Deferred income tax is calculated using the balance sheet liability method. Deferred tax liabilities are
calculated and recognised for all taxable temporary differences, while deferred tax assets are recognised only
if likely to be reversed and if the Group will be able to generate sufficient profit in the future from which they
can be deducted.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022 UIC 201047670
All amounts are in thousand Bulgarian leva unless otherwise stated
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail. Page 35 of 71
The effect of recognising deferred tax assets and/or liabilities is reported where the effect of the event that gave
rise to them is presented.
For events affecting profit or loss and other comprehensive income, the effect of deferred tax assets and
liabilities is recognised in the consolidated statement of comprehensive income.
For events that are initially recognised in equity (revaluation reserve) deferred tax assets and liabilities are
recognised in the consolidated statement of comprehensive income.
Deferred tax assets and/or liabilities are presented offset the consolidated statement of financial position as
they are subject to a uniform taxation regime in the country.
As of December 31, 2022, the Group recognises deferred income tax only for Bulgarian companies and at a
10% tax rate, which remains the same for 2023.
2.12.16. Earnings per share
Earnings per share are calculated by dividing the net profit or loss for the period attributable to shareholders
by the weighted average number of ordinary shares held for the period.
The weighted average number of shares is the number of ordinary shares held at the beginning of the period,
adjusted by the number of ordinary shares repurchased and newly issued during the period, multiplied by the
time average factor. This factor represents the number of days particular shares were held compared to the
total number of days during the period.
Diluted earnings per share are not calculated because there are no potentially diluted shares issued.
2.12.17. Significant judgements in applying the Group’s accounting policy.
Key estimates and assumptions with high uncertainty
When applying the accounting policy, the Group's management makes certain estimates that have a significant
effect on these financial statements. Such estimates, by definition, rarely equal actual results.
Given their nature, these estimates are subject to ongoing review and updating and summarize historical
experience and other factors, including expectations of future events that management believes are reasonable
under current circumstances.
Estimates and assumptions that carry a significant risk of resulting in a material adjustment to the carrying
amounts of assets and liabilities in the next financial year are set out below.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022 UIC 201047670
All amounts are in thousand Bulgarian leva unless otherwise stated
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail. Page 36 of 71
Defined benefit plans
The employee defined benefit obligation is determined by actuarial valuation. This estimate requires
assumptions on the discount rate, future wage growth, staff turnover and mortality rates. Due to the long-term
nature of defined benefit plans, these assumptions are subject to significant uncertainty. The Group prepared
an actuarial valuation of defined benefits and reported them in the consolidated financial statements at the end
of 2022 (note 3.17).
Useful lives of property, plant and equipment and intangible assets
Financial reporting of property, plant and equipment and intangible assets includes the use of estimates of their
expected useful lives and carrying amounts, based on the Group management's judgments.
Impairment of receivables
Management estimates the volume and timing of expected future cash flows related to receivables based on
experience versus current circumstances. Due to the inherent uncertainty of this estimate, actual results may
differ. Group’s management compares prior year estimates with actual results.
The Group uses a simplified approach in reporting trade and other receivables and recognises an impairment
loss as expected credit losses over the entire term. They represent the expected shortfall in contractual cash
flows, given the possibility of default at any point in the life of the financial instrument. The Group uses its
experience, external indicators and information to calculate expected credit losses in the long-term.
Impairments recognised for the reporting period are disclosed in Note 4.04.
Impairment of property, plant and equipment
At the date of preparation of the financial statements, the Group's management organizes an impairment review
of property, plant and equipment.
As of December 31, 2022, such review was carried out, as a result of which management considered that no
impairment indicators were available. No impairment loss on property, plant and equipment is reported in the
financial statements.
Impairment of inventories
At the date of preparation of the financial statements, the Group's management reviews and analyses existing
inventories. A review and analysis of all available inventories is made in terms of basic indicators – uniformity,
commercial appearance, expiry date, etc., and expert prices are determined.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022 UIC 201047670
All amounts are in thousand Bulgarian leva unless otherwise stated
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail. Page 37 of 71
The proposed expert prices are consistent with the prices reached under concluded contracts for realization on
the domestic and foreign markets, the dynamics of supply and demand of inventories, the latest price levels
and trends in transactions with similar inventories. For the calculation of the net realisable value of individual
types of inventories, the estimated direct costs associated with sales are excluded from determined expert
selling prices. When assessing the inventories for which sales contracts are concluded, the net realisable value
is determined based on the contract price less the cost of sales. Inventories not related to sales contracts are
valued according to assumptions about the possibilities for their future disposal. Based on these review and
analysis, no impairment of existing inventories was made as of December 31, 2022.
The impairment of inventories is calculated as the difference between their carrying amount, as recognized in
the statement of financial position prior to review and analysis, and their net realisable value, determined on
the basis of expert prices as set out above.
Income taxes
The companies in the Group are tax entities under the jurisdiction of the tax administration in the country in
which they operate. A significant estimate needs to be made to determine the tax provision. There are numerous
examples for which the tax finally determined is unspecified in the normal course of business. Group
companies recognise liabilities for expected tax payables based on the judgement of the management of the
relevant company and the Group. When the final tax result of such events is different from the amounts
originally recognized, those differences will affect current income tax and deferred tax provisions in the tax
revisions period.
Leases
Determining the lease term for contracts with renewal and termination options - The Group as lessee
The Group defines the lease term as the irrevocable term of the lease, together with any periods covered by an
option to extend it if it is reasonably certain that the option will be exercised, or any periods covered by a
termination option if it is reasonably certain that the option will not be exercised (note 3.16).
2.12.18. Fair values
Some of the Group's accounting policies and disclosures require a fair value measurement of financial and
non-financial assets and liabilities.
When measuring the fair value of an asset or liability, the Group uses observable data as far as possible.
Fair values are categorized at different levels in the fair value hierarchy based on the inputs to the valuation
techniques as follows:
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022 UIC 201047670
All amounts are in thousand Bulgarian leva unless otherwise stated
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail. Page 38 of 71
• Level 1: quoted prices (unadjusted) in active markets for similar assets or liabilities.
• Level 2: inputs other than quoted prices included in Level 1 that, directly (i.e., as prices) or indirectly
(i.e., derived from prices), are available for observation for the asset or liability.
• Level 3: inputs for the asset or liability that are not based on observable market data (un observable
input data).
If the inputs used to measure the fair value of an asset or liability can be categorized at different levels of the
fair value hierarchy, then the fair value measurement is categorized in its entirety at that level of the fair value
hierarchy whose input information is relevant to the overall assessment.
The Group recognizes transfers between levels of the fair value hierarchy at the end of the reporting period in
which the change occurs. In 2022 and 2021 there have been no transfers between the levels of the fair value
hierarchy.
More information on the assumptions made in measuring fair values is included in the relevant notes.
3. Notes to the consolidated statement of financial p osition
3.01. Property, plant and equipment
Land Buildings Machinery and
equipment
Vehicles Computers Office
equipment
Other Assets under
construction
Total
01.01.2021
Cost 1 476 3 032 859 458 240 128 151 9 6 353
Depreciation - (92) (507) (291) (183) (97) (116) - (1 286)
Book value 1 476 2 940 352 167 57 31 35 9 5 067
Additions (cost) - - 53 - 25 58 142 46 324
Purchase - - 53 - 25 58 142 46 324
Disposals (book value) - - - (6) (8) (45) - - (59)
Sale - - - - - (43) - - (43)
Other - - - (6) - - - - (6)
Written-off book value of assets
of investments sold (8) (2) - - (10)
Depreciation for the period - (121) (256) (94) (49) (8) (13) - (541)
Change in depreciation - - - 3 4 - - - 7
Depreciation of assets written-off - - 3 4 - 7
Book value at the end 1 476 2 819 149 70 29 36 164 55 4 798
31.12.2021
Cost 1 476 3 032 912 452 257 141 293 55 6 618
Depreciation - (213) (763) (382) (228) (105) (129) - (1 820)
Book value 1 476 2 819 149 70 29 36 164 55 4 798
01.01.2022
Cost 1 476 3 032 912 452 257 141 293 55 6 618
Depreciation - (213) (763) (382) (228) (105) (129) - (1 820)
Book value 1 476 2 819 149 70 29 36 164 55 4 798
Additions (cost) - 56 18 6 46 84 2 57 269
Purchase/transfer 56 18 6 46 84 2 57 269
Disposals (book value) - - (38) - (5) - (58) (30) (131)
Sale (38) (5) (58) (101)
Other (30) (30)
Depreciation for the period (120) (105) (43) (30) (21) (27) - (346)
Change in depreciation - - - - 5 - 58 - 63
Depreciation of assets written-off 5 58 63
Book value at the end 1 476 2 755 24 33 45 99 139 82 4 653
31.12.2022
Cost 1 476 3 088 892 458 298 225 237 82 6 756
Depreciation - (333) (868) (425) (253) (126) (98) - (2 103)
Book value 1 476 2 755 24 33 45 99 139 82 4 653
Contractual mortgages have been established on the lands and buildings owned by the Group, in connection
with bank financing used by the companies in Bulgaria (see 3.15).
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022 UIC 201047670
All amounts are in thousand Bulgarian leva unless otherwise stated
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail. Page 39 of 71
3.02. Intangible assets
Software ISO
Certificates
and
intellectual
property
rights
Patents,
licenses,
trademarks,
prototypes
and
development
Other Assets under
construction
Total
01.01.2021
Cost 190 874 2 691 212 1 535 5 502
Amortization (190) (244) ( 625) ( 34) - (1 093)
Book value - 630 2 066 178 1 535 4 409
Additions (cost) 141 5 1 767 - 2 285 4 198
Purchase 6 5 11 - - 22
Self-constructed - - - - 2 285 2 285
Put into operation 135 - 1 756 - - 1 891
Disposals (book value) - ( 867) ( 844) ( 155) (3 695) (5 561)
Written-off book value of assets of investments sold - ( 867) - ( 155) - (1 022)
Other - - ( 844) - (3 695) (4 539)
Amortization for the period ( 17) ( 3) ( 456) ( 8) - ( 484)
Change in amortization - 242 298 14 - 554
Amortization of assets written-off - - 298 - - 298
Amortization written-off of assets of investments sold - 242 - 14 - 256
Book value at the end 124 7 2 831 29 125 3 116
31.12.2021
Cost 331 12 3 614 57 125 4 139
Amortization ( 207) ( 5) ( 783) ( 28) - (1 023)
Book value 124 7 2 831 29 125 3 116
01.01.2022
Cost 331 12 3 614 57 125 4 139
Amortization ( 207) ( 5) ( 783) ( 28) - (1 023)
Book value 124 7 2 831 29 125 3 116
Additions (cost) - - 267 207 1 466 1 940
Purchase 267 207 370 844
Self-constructed 1 096 1 096
Disposals (book value) - - ( 346) - - ( 346)
Book value written-off of assets of investments sold ( 346) - ( 346)
Amortization for the period ( 68) ( 2) ( 532) ( 8) ( 610)
Change in amortization - - 120 - - 120
Amortization of assets written-off 120 120
Book value at the end 56 5 2 340 228 1 591 4 220
31.12.2022
Cost 331 12 3 535 264 1 591 5 733
Amortization ( 275) ( 7) (1 195) ( 36) - (1 513)
Book value 56 5 2 340 228 1 591 4 220
During the reporting period the Group has recognized as expense research and development expenditure for
the amount of BGN 263 thousand.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022 UIC 201047670
All amounts are in thousand Bulgarian leva unless otherwise stated
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail. Page 40 of 71
3.03. Right-of-use assets
December 31, 2022 December 31, 2021
Vehicles Buildings Total Vehicles Buildings Total
At the beginning of the period
Cost 232 9 241 127 9 136
Depreciation (124) (9) (133) (84) (6) (90)
Book value 108 - 108 43 3 46
Additions (cost) 162 99 261 116 - 116
New leases 162 99 261 116 - 116
Disposals (cost) - - - (11) - (11)
Written-offs - - - (11) - (11)
Depreciation for the period (58) (14) (72) (40) (3) (43)
Book value at the end of the period
Cost 394 108 502 232 9 241
Depreciation (183) (23) (206) (124) (9) (133)
Book value 211 85 296 108 - 108
The Group has concluded lease contracts for the lease of office premises and vehicles used in the activity, and
therefore, it has recognized right-of-use assets in the consolidated statement of financial position.
3.04. Goodwill
Name December 31,
2022
December 31,
2021
Allterco Robotics Inc., USA 34 34
Allterco Properties EOOD 126 126
Total 160 160
The Group has not recognized impairment on goodwill as of 31.12.2022.
3.05. Investments in associates
During 2021 Allterco AD has participated in the establishment of an associated company in China named
Allterco Asia Ltd., Guangdong province with a seat and management address at Shenzhen. The registered
capital of the company is CNY 100 000 and the participation of Allterco AD is 30% (BGN 8 thousand), with
an option to acquire additionally up to 50% and reach a controlling package of up to 80%, at the discretion of
Allterco AD. As of December 31, 2022 and as of the date of issuance of the consolidated financial statements
management considers this project to be high-risk and therefore has no plans to exercise the option at this time.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022 UIC 201047670
All amounts are in thousand Bulgarian leva unless otherwise stated
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail. Page 41 of 71
Movement of investments in associates is as follows:
Year ended
December 31,
2022
Year ended
December 31,
2021
Balance as of January 01 40 -
Acquisition of shares - 8
Share in current profit for the period 118 32
Balance as of the period end 158 40
3.06. Other long-term capital investments
December 31,
2022
December 31,
2021
Ordinary registered shares - Link Mobility Group Holding
ASA, at the beginning of the period 2 624 6 566
Decrease (1 794) (3 942)
Financial instruments sold (355) (369)
Effect from subsequent revaluation of financial assets (1 439) (3 573)
Ordinary registered shares - Link Mobility Group Holding
ASA, at the end of the period 830 2 624
3.07. Long-term trade receivables
In September 2021 the Group sold its business located, through ALLTERCO PTE, ALLTERCO SDN and
ALLTERCO CO. LTD in Singapore, Malaysia and Thailand, respectively. As part of the clauses of the sales
contract, the payment of part of the value of the transaction is deferred. BGN 1 027 thousand are due after the
end of 2023, which is why in these consolidated financial statements they are presented as a long-term
receivable.
At the end of the third quarter of 2021 the Group finalized a deal with Skylight Venture Capital Pte. Ltd.,
Singapore for sale of three subsidiaries under the following conditions:
- Sales price: EUR 2 100 000;
- Term of payment: i. 50% - after signing a sales agreement and receipt a letter by the buyer confirming that
the Group met certain conditions under the deal; ii. 25% within 18 months as of the date of the sales agreement;
iii. 25% within 36 months as of the date of the sales agreement.
After the sale the Group recognizes profit at the amount of BGN 201 thousand presented as financial income
in the statement of comprehensive income.
As a result of the deal the Group derecognizes the following assets/liabilities:
- Cash – BGN 184 thousand
- Total other assets – BGN 2 069 thousand
- Total liabilities – BGN 2 840 thousand
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022 UIC 201047670
All amounts are in thousand Bulgarian leva unless otherwise stated
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail. Page 42 of 71
3.08. Deferred tax assets
December 31,
2022
December 31,
2021
Deferred tax assets
Deferred tax on revaluation reserve 56 -
Deferred tax on provision for expenses 66 30
Deferred tax on unused paid leave 40 19
Deferred tax on impairment of receivables 46 25
Deferred tax on unused benefits of individuals 128 -
Deferred tax on long-term employee benefits 13 -
Total assets 349 74
Deferred tax liabilities
Deferred tax related to the application of IFRS 16 (1) (2)
Total liabilities (1) (2)
Total deferred tax assets/(liabilities) 348 72
3.09. Inventory
December 31,
2022
December 31,
2021
Goods 18 436 3 900
Goods in transit 3 317 979
Deliveries 937 2 227
Materials 312 454
Total: 23 002 7 560
As of December 31, 2022, the consolidated statement of financial position includes:
• Deliveries representing components for production, purchased on behalf of the Group, by its main
suppliers of production services amounting to BGN 937 thousand. The components are available in
the warehouses of the suppliers, and the Group holds the title on the components;
• Goods in transit that are not available in the Group's warehouses, but which it owns under purchase
agreements.
It is the policy of the Group companies to strive to maintain optimal stock levels equal to the estimated sales
for several months ahead. The Group's management believes that the trend for the foreseeable future is for
stock levels to increase as a result of growing sales as well as an increasing assortment of devices.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022 UIC 201047670
All amounts are in thousand Bulgarian leva unless otherwise stated
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail. Page 43 of 71
3.10. Trade receivables
December 31,
2022
December 31,
2021
Receivables from clients 20 302 12 642
Receivables written-off (1 486) -
Impairment of receivables from clients, net (526) (237)
Advances to suppliers 3 357 6 762
Total: 21 647 19 167
The movement in impairment of trade receivables during the year is as follows:
December 31,
2022
December 31,
2021
Impairment at the beginning of the period 237 -
Impairment reversed and written-off (152) -
Impairment charged for the period 441 237
Impairment at the period end, net 526 237
In June 2022, an agreement was reached with Link Mobility Group, Norway, to pay the overdue last
contribution in connection with the sale of the European telecommunications business of Allterco AD, for
which arbitration proceedings were initiated before the International Arbitration in Vienna. As a result of the
agreement, Link Mobility Group paid BGN 2,151 thousand of the amount due and the remaining part of BGN
903 thousand was written-off. The above reversed and written-off impairment and part of the receivables
written-off as presented above, relate to this agreement.
3.11. Other receivables
December 31,
2022
December 31,
2021
TAX RECEIVABLES, including: 3 515 1 884
VAT recoverable 3 447 1 857
Corporate tax advance payments 68 2
Account balances with customs - 25
OTHER RECEIVABLES, including: 107 28
Deposits in commercial entities and guarantees 104 22
Petty cash 3 4
Other receivables - 2
Total: 3 622 1 912
3.12. Short-term financial assets
At the end of 2022, the Group reported short-term financial assets amounting to BGN 175 thousand
(31.12.2021: nil), which include costs of legal and advisory services related to the acquisition of the Slovenian
company GOAP. Upon successful completion of the transaction, these costs will be added to the value of the
investment.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022 UIC 201047670
All amounts are in thousand Bulgarian leva unless otherwise stated
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail. Page 44 of 71
3.13. Cash and cash equivalents
December 31,
2022
December 31,
2021
Cash on hand 24 92
Cash in current bank accounts 24 114 30 320
Debit cards 12 4
Other cash 3 988 125
Cash equivalents 10 -
Total: 28 148 30 541
Other cash at the end of 2022 are funds intended for the acquisition of the Slovenian company GOAP, which
are transferred to a notary's account in Slovenia (escrow account).
By currency
December 31,
2022
December 31,
2021
EUR 13 160 6 180
BGN 5 744 13 298
USD 8 640 11 063
Other 604 -
Total: 28 148 30 541
The Group's cash is in bank accounts with banks with a stable long-term rating. The Management has assessed
the expected credit losses on Cash and cash equivalents.
The estimated credit losses are insignificant and are not recognized in the consolidated financial statements of
the Group as of December 31, 2022.
As of December 31, 2022 36.8% of the cash and cash equivalents of the Group are held in one bank.
3.14. Prepaid expenses
December 31,
2022
December 31,
2021
Information services 26 28
Insurance 68 35
Licenses / certificates 260 -
Membership fees 52 34
Subscriptions 49 27
Exhibitions 48 109
Other 9 1
Total 512 234
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022 UIC 201047670
All amounts are in thousand Bulgarian leva unless otherwise stated
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail. Page 45 of 71
3.15. Bank loans
Bank loans are as follows:
December 31,
2022
December 31,
2021
KBC Bank, incl.: 1 615 1 900
− up to one year 293 285
− over one year 1 322 1 615
DSK Bank AD 392 617
− up to one year 225 225
− over one year 167 392
Other short-term financing in Shelly USA (previously
named Allterco Robotics Inc., USA) 149 62
Total bank loans – non-current portion: 1 488 2 007
Total bank loans – current portion: 668 572
Bank KBC Bank AD
Date of the contract: August 25, 2017
Contracted credit
amount: EUR 1 620 000
Original currency EUR
Purpose
Financing of up to 90% (VAT exclusive) of the final price of all company shares,
representing 100% of the capital of the Joint Debtor Allterco Properties EOOD,
defined in an Agreement concluded between the Borrower and JFC Developments
OOD for transfer of the company shares in the Final Agreement.
Repayment deadline February 10, 2028
Collateral: Mortgage on real estate, owned by Allterco Properties EOOD, joint debtor - Allterco
Properties EOOD, pledge on all bank accounts of Allterco AD at the bank
Lender DSK Bank AD
Date of the contract: September 28, 2020
Total amount EUR 450 000
Purpose 90% funding of expenses for real estate purchase
Original currency EUR
Fixed maturity September 28, 2024
Collateral Mortgage on real property of Allterco Properties EOOD
The subsidiary Shelly USA uses financing under company credit card.
A Group company has an agreed bank financing in the form of an overdraft, which was not utilized during
the reporting period. Details of the parameters of the provided financing are presented in note 5.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022 UIC 201047670
All amounts are in thousand Bulgarian leva unless otherwise stated
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail. Page 46 of 71
3.16. Lease
December 31,
2022
December 31,
2021
Lease liabilities
- up to 1 year 161 58
- more than 1 year 157 80
Total 318 138
The liabilities under lease contracts presented in the consolidated statement of financial position also include
the Group's liabilities under lease contracts for offices and vehicles, which are recognized in accordance with
the requirements of IFRS 16 Leases.
3.17. Retirement benefits obligation
As of December 31, 2022, the Group has obligations for a defined benefit plan upon retirement of
BGN 112 thousand. The amount of the obligation is determined on the basis of an actuarial assessment based
on assumptions about mortality, disability, probability of leaving, salary growth, etc.
The movements of the present value of the defined benefits plan upon retirement:
December 31,
2022
December 31,
2021
Liabilities at the beginning of the period - -
Liabilities paid during the period - -
Expenses recognized in profit or loss
Current service expense 111 -
Finance costs on future liabilities 1 -
Actuarial loss, recognized in other comprehensive income - -
Liabilities at the end of the period 112 -
In the case of early retirement due to disability, the staff shall be entitled to a benefit of up to two months'
salaries, increased by 100% for a minimum period of five years and provided that no such benefits have been
received during the last five years of service.
The demographic statistical assumptions used are based on the following:
- turnover rate of the Group's staff over the past few years;
- mortality of the population of Bulgaria in the period 2019 – 2021 according to the data of the National
Statistical Institute;
- statistics of the National Center for Health Information on disability of the population and premature
retirement.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022 UIC 201047670
All amounts are in thousand Bulgarian leva unless otherwise stated
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail. Page 47 of 71
3.18. Trade payables
December 31,
2022
December 31,
2021
(restated)
Suppliers 1 797 1 001
Advances on customers 94 556
Total: 1 891 1 557
3.19. Payables to employees and social security obligations
December 31,
2022
December 31,
2021
Payables to employees 1 213 5
Liabilities for unused paid leave 624 168
Total: 1 837 173
December 31,
2022
December 31,
2021
Social security and health contributions 204 115
3.20. Tax payables
December 31,
2022
December 31,
2021
Corporate tax 479 281
Value Added Tax 797 940
Income tax 51 73
Payables to customs 710 -
Other taxes 37 21
Total: 2 074 1 315
3.21. Other liabilities
December 31,
2022
December 31,
2021
Liabilities for participations 535 665
Warranty service provisions 502 300
Guarantees/Rental deposits 61 61
Total other liabilities 1 098 1 026
3.22. Share capital
Allterco AD was registered in 2010. The share capital of the Parent Company as of December 31, 2022,
amounts to BGN 17,999,999 (seventeen million nine hundred ninety-nine thousand nine hundred ninety-nine)
and is distributed in 17,999,999 (seventeen million nine hundred ninety-nine thousand nine hundred ninety-
nine) ordinary registered shares with par value of BGN 1 each. The share capital is fully paid in four
instalments:
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022 UIC 201047670
All amounts are in thousand Bulgarian leva unless otherwise stated
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail. Page 48 of 71
The first issue was made upon the establishment of the Parent Company in the form of a non-monetary
contribution in the amount of BGN 50,000 consisting ordinary registered voting shares of Teravoice AD’s
capital.
In 2010 a second non-monetary contribution was made in the amount of BGN 5,438,000 with the objective to
acquire shares from the capital of Tera Communications AD at the total cash value of BGN 5 438 000.
At the end of 2015, a new issue of 8,012,000 (eight million and twelve thousand) ordinary registered voting
shares was issued, with a nominal value of BGN 1 (one) each.
At the end of 2016 the capital of ALLTERCO AD was increased with a new issue in the amount of 1,500,000
(one million and five hundred thousand) shares on the basis of a successful initial public offering, according
to the Prospectus for public offering of shares, approved by the Financial Supervision Commission with
Decision No 487 – Е of 08.07.2016 entered in the Commercial Register under No.20161108100414 of
08.11.2016.
In 2020 the capital of the Parent Company was increased by cash contributions in the total amount of 2,999,999
(two million nine hundred ninety-nine thousand nine hundred and ninety-nine) against 2,999,999 (two million
nine hundred ninety-nine thousand nine hundred and ninety-nine) subscribed and paid dematerialized ordinary
registered voting shares with a nominal value of BGN 1 as a result of a procedure for Public Offering of a new
issue of shares. The public offering of shares from the capital increase of Allterco AD was carried out in the
period September 28, 2020 – October 30, 2020 on the basis of a Prospectus, together with the supplements to
it, confirmed by the Financial Supervision Commission with Decision No 148 -F of February 18, 2020, Decision
No 405 - E of June 11, 2020, Decision No 601 - E of August 13, 2020 and Decision No 791 -E of October 29, 2020.
As of December 31, 2022, the shareholders of the Parent Company are:
Name/business name Number of share: % of the share
capital
Svetlin Todorov 5 847 120 32.48%
Dimitar Dimitrov 5 847 120 32.48%
Individuals, holding less than 5 % of the capital
Other physical persons and legal entities 6 305 759 35.04%
Total 17 999 999. 100.00%
On June 30, 2022, the Allterco AD acquired 40,000 own shares at a price of BGN 19.50 per share, (total for
BGN 780 thousand) representing 0.22% of the registered capital through over-the-counter transactions (OTC
transactions) from two independent shareholders. The shares are intended to provide payment of part of the
acquisition price of the Slovenian IoT company GOAP d.o.o. Nova Gorica (GOAP).
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022 UIC 201047670
All amounts are in thousand Bulgarian leva unless otherwise stated
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail. Page 49 of 71
3.23. Retained earnings
Year ended
December 31,
2022
Year ended
December 31,
2021
(restated)
Balance as of January 1 39 324 26 938
Net profit 17 433 15 892
Profit distribution for dividends (1 800) (3 600)
Effect from sale of subsidiaries - 94
Other changes 160 -
Balance at the period end 55 117 39 324
3.24. Legal reserves
Year ended
December 31,
2022
Year ended
December 31,
2021
Balance as of January 1 1 800 1 500
Transfer of reserves from share issue - 300
Balance at the period end 1 800 1 800
3.25. Share premium reserve
As of December 31, 2022, the reserves from issue of shares of the Company amount to BGN 5 403 thousand.
They are formed by the excess of the proceeds from new shares issued in 2020 above their nominal value,
amounting to BGN 6 000 thousand, reduced by the costs related to the capital increase, amounting to
BGN 297 thousand and by BGN 300 thousand that were transferred to Legal reserves by a decision of General
Meeting of Shareholders held on June 28, 2021.
3.26. Revaluation reserve
Year ended
December 31,
2022
Year ended
December 31,
2021
Balance at the beginning of the period 1 036 4 849
Reserve transferred to retained earnings (160) (240)
Reserve related to long-term equity instruments at fair value
through other comprehensive income, gross (1 439) (3 573)
Deferred tax 56 -
Balance at the period end (507) 1 036
The reserve related to long-term equity instruments was reduced by BGN 1,543 thousand as a result of a fair
value revaluation of other long-term capital instruments as of December 31, 2022 and as a result of the sale of
some capital instruments during the reporting period.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022 UIC 201047670
All amounts are in thousand Bulgarian leva unless otherwise stated
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail. Page 50 of 71
4. Notes to the consolidated statement of comprehensive income
4.01. Sales revenue and cost of sales
Year ended December 31, 2022 Year ended December 31, 2021
Devices Services
and rent Total Produc
tion Devices Services
and rent Total
REVENUE 93 007 171 93 178 108 58 723 678 59 509
Book value of goods sold (44 719) - (44 719) - (24 964) - (24 964)
Costs (1 608) - (1 608) - (1 525) (233) (1 758)
COST OF SALES (46 327) - (46 327) - (26 489) (233) (26 722)
GROSS PROFIT 46 680 171 46 851 108 32 234 445 32 787
Year ended
December 31,
2022
Year ended
December 31,
2021
Revenue from sales of Shelly devices to В2В clients 72 309 46 621
Revenue from sales of Shelly devices to retail clients – through
Internet 16 135 8 640
Revenue from sales of Myki devices to В2В clients 4 157 3 297
Revenue from sales of Myki devices to retail clients – through
Internet 267 203
Revenue from sales of Shelly devices to retail clients – direct sales 91 28
Revenue from sales of Myki devices to retail clients – direct sales 48 42
Revenue from services and rent 171 678
Total: 93 178 59 509
The Group manages the business with electronic devices as one operating segment. The only revenue not
pertaining to that segment is revenue from services and rent.
The Group’s revenue from external customers and information about its segment assets (non -current assets
excluding financial instruments, deferred tax assets and other financial assets) by geographical location are
detailed below:
Year ended
December 31,
2022
Year ended
December 31,
2021
Revenue from sales in European Union 71 800 45 087
Revenue from sales in third countries 15 876 11 903
Revenue from sales in Bulgaria 5 331 1 842
Total 93 109 58 831
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022 UIC 201047670
All amounts are in thousand Bulgarian leva unless otherwise stated
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail. Page 51 of 71
Year ended
December 31,
2022
Year ended
December 31,
2021
Non-current assets in Bulgaria 11 642 12 955
Non-current assets in European Union 18 -
Non-current assets in third countries 32 36
Total 11 692 12 991
Included in revenues arising from European Union are revenues from a single customer who is the only
customer that contributed 10% or more to the Group’s revenue in either 2022 or 2021:
Year ended
December 31, 2022
Year ended
December 31, 2021
Revenue Share Revenue Share
Allnet GmbH, Germany 18,036 19.36% 8,355 14.04%
4.02. Other operating revenue
Year ended
December 31,
2022
Year ended
December 31,
2021
Profit / loss on sale of assets - (23)
Rentals and overheads - 2
Liabilities written-off 39 40
Financing/ electricity price compensations 26 -
Gains on currency transactions and exchange rate gains, net 734 866
Other operating income 213 473
Total: 1 012 1 358
4.03. Administrative expense
Year ended
December 31,
2022
Year ended
December 31,
2021
(restated)
Materials (509) (190)
Hired services (3 521) (2 478)
Depreciation/amortization expenses (506) (193)
Employees expenses (14 644) (7 590)
Other administrative expenses (1 255) (1 637)
Total: (20 435) (12 088)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022 UIC 201047670
All amounts are in thousand Bulgarian leva unless otherwise stated
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail. Page 52 of 71
4.04. Impairment expenses
Year ended
December 31,
2022
Year ended
December 31,
2021
Write-off 1 444 97
Impairment 441 237
Total 1 885 334
4.05. Other operating expenses
Year ended
December 31,
2022
Year ended
December 31,
2021
Bank fees and charges (367) (134)
Prototypes written-off (263) -
Interest, fines and penalties (53) (19)
Warranty service provision (502) (300)
Donations - (15)
Other - (63)
Total: (1 185) (531)
Movement in warranty service provision is as follows:
Year ended
December 31,
2022
Year ended
December 31, 2021
Liabilities for provisions at the beginning of the period 300 250
Provision charged during the period 502 300
Provisions used during the period (300) (250)
Liabilities for provisions at the period end 502 300
4.06. Financial income
Year ended
December 31,
2022
Year ended
December 31,
2021
Gains on the sale of financial assets, incl.:
- Income from sale of investments
- Carrying amount -
250
4 526
(4 276)
Total - 250
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022 UIC 201047670
All amounts are in thousand Bulgarian leva unless otherwise stated
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail. Page 53 of 71
4.07. Financial expenses
Year ended
December 31,
2022
Year ended
December 31,
2021
Losses on the operations with financial assets, incl.: (119) -
Income from sale of financial assets 236 -
Carrying amount of assets sold (355) -
Lease interest (4) (2)
Loans interest (65) (76)
Banking financial services (77) (45)
Other interest - (3)
Total: (265) (126)
4.08. Income tax expense
Year ended
December 31,
2022
Year ended
December 31,
2021
Current tax expense (3 017) (2 755)
Tax effect from temporary differences 220 (5)
Tax expense (2 797) (2 760)
Year ended
December 31,
2022
Year ended
December 31,
2021
Profit before tax 20,230 18,652
Tax rate 10% 10%
Expected income tax expense (2,023) (1,865)
Non-taxable income and unrecognized expenses for tax
purposes and effect of differences in applied tax rates (774) (895)
Income tax expense (2,797) (2,760)
Income tax expense includes:
Current income tax (3,017) (2,755)
Deferred tax expenses:
Tax effect from temporary differences 220 (5)
Income tax expense (2,797) (2,760)
Effective tax rate 13.83% 14.80%
Income tax expense, recognized in the consolidated statement
of comprehensive income (2,797) (2,760)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022 UIC 201047670
All amounts are in thousand Bulgarian leva unless otherwise stated
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail. Page 54 of 71
Deferred taxes as of December 31, 2022 and December 31, 2021:
Year ended
December 31,
2022
Year ended
December 31,
2021
Deferred tax assets
Compensated leave 20 2
Impairment of receivables 44 23
Pension expenses 12 -
Audit expenses 11 -
Income of individuals 120 -
Provisions 51 30
Other 9 2
Deferred tax liabilities
Impairment of receivables (15) -
Impairment of investments (437)
Provisions (30) (25)
Other (2) (8)
Deferred tax income/(expense) 220 (413)
4.09. Earnings per share
Year ended
December 31,
2022
Year ended
December 31,
2021
Net profit 17 433 15 892
Weighted-average number of shares 17 979 835 17 999 999
Basic earnings per share 0.97 0.88
As of December 31, 2022 the Parent Company holds 40 000 own shares, which are taken into account in
determining the weighted-average earnings per share for 2022.
Earnings per share without taking into account the held own shares is BGN 0.97.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022 UIC 201047670
All amounts are in thousand Bulgarian leva unless otherwise stated
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail. Page 55 of 71
5. Contingent liabilities and commitments
Contract Annex Creditor Debtor Joint debtor /
Guarantor
Amount
/ Limit
Financial
conditions Maturity
Collateral
provided by the
borrower
Investment loan
August 25, 2017
Agreement
pursuant to Art.
114, para. 10 of
POSA
Annexes
No. 1/
October 31,
2018
KBC Bank Allterco
AD
Allterco
Properties
EOOD – joint
debtor
BGN
3 168
thousand.
(EUR
1 620 tho
usand)
Fixed interest
rate for the whole
period 3% per
year;
Management fee
February 10,
2028
Mortgage on real
estate owned by
Allterco
Properties
EOOD; Pledge of
receivables on
bank accounts of
Allterco AD in
the bank.
Pledge under the
Financial
Collateral
Contracts Act ;
Overdraft
September 30,
2019 – Agreement
pursuant to Art.
114, para. 10 of
POSA
Annexes
No 1/
August 28,
2020
KBC Bank
Allterco
Robotics
EOOD
Allterco AD –
guarantor
BGN
1 955
thousand
(EUR 1
million)
One-month
EURIBOR,
increased by 2.5
percentage
points, but not
less than 2.5%;
management fee;
commitment fee;
commission for
issuing
guarantees
September
29, 2023
Pledge of
receivables on
accounts of
Allterco Robotics
EOOD in bank
Contract for a
standard
investment loan No
2757 of
28.09.2020
- DSK Bank
AD
Allterco
Properties
EOOD
Allterco Trading
EOOD – joint
debtor
BGN 880
thousand
(EUR 450
thousand)
Annual interest
formed by a
variable interest
rate of 1m
EURIBOR+2.1%
premium, but not
less than 2.1%;
annual management
fee;
September
28, 2024.
Mortgage on real
estate owned by
Allterco
Properties
EOOD; Pledge of
receivables on
bank accounts of
the company and
Allterco Trading
EOOD in DSK
Bank.
On July 29, 2022, Allterco AD concluded with the four owners of the capital of GOAP d.o.o. (“GOAP”) (one
legal entity and three individuals) a binding preliminary agreement (Term Sheet) regarding the main conditions
and terms for the acquisition of the Slovenian IoT provider. The transaction was finalized on January 4, 2023
(for further information see note 11).
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022 UIC 201047670
All amounts are in thousand Bulgarian leva unless otherwise stated
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail. Page 56 of 71
The contingent liabilities as of December 31, 2021 include:
Contract Annex Creditor Debtor Joint debtor /
Guarantor
Amount
/ Limit
Financial
conditions Maturity
Collateral
provided by the
borrower
Investment loan
August 25, 2017
Agreement
pursuant to Art.
114, para. 10 of
POSA
Annexes
No. 1/
October 31,
2018
Raiffeisenbank
Bulgaria ЕАD
Allterco
AD
Allterco
Properties EOOD
– joint debtor
BGN
3 168
thousand.
(EUR
1 620 tho
usand)
Fixed interest rate
for the whole
period 3% per year;
Management fee
February 10,
2028
Mortgage on real
estate owned by
Allterco Properties
EOOD;
Pledge of
receivables on bank
accounts of the
Allterco AD in the
bank.
Pledge under the
Financial Collateral
Contracts Act;
Overdraft
September 30,
2019 – Agreement
pursuant to Art.
114, para. 10 of
POSA
Annexes
No 1/
August 28,
2020
Raiffeisenbank
Bulgaria ЕАD
Allterco
Robotics
EOOD
Allterco AD –
guarantor
BGN
1 956
thousand
(EUR 1
million)
One-month
EURIBOR,
increased by 2.5
percentage points,
but not less than
2.5%; management
fee; commitment
fee; commission for
issuing guarantees
September
29, 2022
Pledge of
receivables of
Allterco Robotics
EOOD
Contract for a
standard
investment loan No
2757 of
28.09.2020
- DSK Bank AD
Allterco
Propertie
s EOOD
Allterco Trading
EOOD – joint
debtor
BGN 880
thousand
(EUR 450
thousand)
Annual interest
formed by a
variable interest
rate of 1m
EURIBOR+2.1%
premium, but not
less than 2.1%;
annual management
fee;
September
28, 2024.
Mortgage on real
estate owned by
Allterco
Properties
EOOD; Pledge of
receivables on
bank accounts of
the company and
Allterco Trading
EOOD in DSK
Bank.
6. Transactions and balances with related parties
During the reporting period Allterco AD has no transactions concluded with interested parties within the
meaning of the POSA.
Allterco has no transactions which are beyond of its ordinary business activity or significantly deviate from
market conditions with its subsidiaries and associated companies. Transactions with subsidiaries within its
ordinary business activity are excluded from consolidation.
Key management staff
During the reporting period the members of the Board of Directors of the Parent Company received gross
renumeration totaling BGN 750 thousand (2021: BGN 130 thousand.) from Allterco AD.
During the reporting period the following members of the Board of Directors have received gross remuneration
from the subsidiaries, as follows:
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022 UIC 201047670
All amounts are in thousand Bulgarian leva unless otherwise stated
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail. Page 57 of 71
- Dimitar Stoyanov Dimitrov – BGN 596 thousand
- Svetlin Iliev Todorov – BGN 578 thousand
- Wolfgang Kirsch – BGN 217 thousand
The remuneration paid was in accordance with the disclosed Remuneration policy and the changes made in
the number and composition of the members of the Board of Directors of the Parent Company, were adopted
at the extraordinary General Meeting held on April 8, 2022.
At the General Meeting of Shareholders held on December 13, 2022, a decision was adopted to amend the
Remuneration policy, as well as schemes were approved to provide members of the Board of Directors of
Allterco AD with variable remuneration in shares of the Parent Company for the period 2022 - 2025.
7. Financial instruments by categories
The structure of the financial assets and liabilities by categories is as follows:
December 31, 2022
Financial assets according to the Statement
of financial position
Financial
assets at
amortized cost
- Cash
Financial assets
at amortized cost
Financial assets
at fair value
through other
comprehensive
income
Financial assets
at fair value
through profit or
loss
Total
Cash and cash equivalents 28 148 - - - 28 148
Other long - term capital investments - - 830 - 830
Long term trade receivables - 1 027 - - 1 027
Short-term financial assets 175 175
Trade receivables - 19 776 - - 19 776
Deposits in commercial companies
and guarantees - 104 - - 104
TOTAL FINANCIAL ASSETS 28 148 21 082 830 - 50 060
Financial liabilities according to the Statement
of financial position
Financial
liabilities at fair
value through
profit or loss
Total Financial
liabilities at
amortized cost
Lease liabilities 318 - 318
Bank loans 2 156 - 2 156
Trade liabilities 1 797 - 1 797
Contributory obligations 535 - 535
Guarantees 61 - 61
TOTAL FINANCIAL LIABILITIES 4 867 - 4 867
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022 UIC 201047670
All amounts are in thousand Bulgarian leva unless otherwise stated
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail. Page 58 of 71
Financial assets according to
the Statement of financial position
Financial
assets at
amortized
cost -
Cash
Financial
assets at fair
value through
profit or loss
Total
Cash and cash equivalents 30 541 - 30 541
Other long - term capital investments - - 2 624
Long term trade receivables - - 2 054
Trade receivables - - 12 405
Deposits in commercial companies and
guarantees - - 22
TOTAL FINANCIAL ASSETS 30 541 - 47 646
Financial liabilities according to
the Statement of financial position Financial
liabilities at
amortized cost
Financial
liabilities at fair
value through
profit or loss
Total
Lease liabilities 138 - 138
Bank loans 2 579 - 2 579
Trade liabilities 1 00 1 - 1 001
Contributory obligations 665 - 665
Guarantees 61 - 61
TOTAL FINANCIAL LIABILITIES 4 444 - 4 444
The fair value of the bank loan that the Group is using, is determined based on market interest rate applicable
for similar instruments with similar term.
The Group does not work with derivative instruments.
8. Financial risk management
In the course of their usual business activity, the companies of the Group may be exposed to various financial
risks, the most important of which are: market risk (including currency risk, interest rate risk and price risk),
credit risk and liquidity risk. The overall risk management is focused on forecasting changes in financial
markets in order to minimize the potential negative effects that could affect the financial results. Financial
risks are currently identified, measured and monitored using various control mechanisms to adequately assess
market conditions and their effects by the companies of the Group to avoid unjustified concentration of any
specific risk.
Risk management is carried out on an ongoing basis under the direct supervision of the management and the
Group's financial experts in accordance with the policy set by the Board of Directors of the Parent Company
who developed the basic principles of general financial risk management.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022 UIC 201047670
All amounts are in thousand Bulgarian leva unless otherwise stated
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail. Page 59 of 71
Based on these principles, the specific procedures for managing separate specific financial risks have been
defined.
The following describes the different types of risks to which the companies within the Group are exposed, as
well as the approach taken in managing these risks.
Market risk
Market risk is the risk that the fair value or future cash flows of financial instruments will fluctuate due to
changes in market prices.
а. Currency risk
The companies within the Group carry out their transactions on the domestic market, in the European Union
and in third countries (Asia and USA). The companies within the Group carry out their main deliveries in
Bulgarian leva, euros and US dollars. To control the currency risk, a system has been introduced for planning
supplies from countries in and outside the European Union, as well as procedures for monitoring movements
in exchange rates of foreign currencies and control of incoming payments.
The tables below summarize the currency risk exposure:
December 31, 2022
In
EUR In USD
In other
foreign
currency
In
BGN Total
Cash and cash equivalents 13 160 8 640 604 5 744 28 148
Long-term trade receivables 1 027 - - - 1 027
Other long-term equity
instruments - - 830 - 830
Short-term financial assets 175 - - - 175
Trade receivables 16 797 1 595 9 1 375 19 776
Deposits in commercial
companies - - - 104 104
TOTAL ASSETS 31 159 10 235 1 443 7 223 50 060
Lease liabilities 128 - - 190 318
Bank loans 2 007 149 - - 2 156
Trade payables 448 355 - 994 1 797
Contributory obligations - - - 535 535
Guarantees - - - 61 61
TOTAL LIABILITIES 2 583 504 - 1 780 4 867
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022 UIC 201047670
All amounts are in thousand Bulgarian leva unless otherwise stated
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail. Page 60 of 71
December 31, 2021 In EUR In USD
In other
foreign
currency
In
BGN Total
Cash and cash equivalents 6 180 11 063 - 13 298 30 541
Long-term trade receivables 2 054 - - - 2 054
Other long-term equity
instruments - - 2 624 - 2 624
Trade receivables 10 036 1 344 419 606 12 405
Deposits in commercial companies - 11 - 11 22
ОБЩО АКТИВИ 18 270 12 418 3 043 13 915 47 646
Lease liabilities 18 - - 120 138
Bank loans 2 517 62 - - 2 579
Trade payables 440 68 - 493 1001
Contributory obligations - - - 665 665
Guarantees - - - 61 61
TOTAL LIABILITIES 2 975 130 - 1 339 4 444
Currency sensitivity analysis
The companies within the Group are not exposed to currency risk in relation to their exposures in euro, because
the exchange rate of the BGN to EUR is fixed.
There is a currency risk exposure mainly in USD and Norway kroner (NOK). As of 31.12.2022 62% of Groups
assets are in EUR, 22% in USD and 1.3% in Norwegian krone.
In the table below, a sensitivity analysis is presented to the possible changes in the exchange rate BGN/USD
and BGN/NOK and the profit before taxes (through changes in the book values of monetary assets and
liabilities), provided that all other variables are assumed to be constant.
Increase/ Decrease
in exchange rate
BGN/ USD
Effect on the
profit before
tax
Increase/
Decrease in
exchange rate
BGN/ NOK
Effect on profit before
tax
% %
2022 +/-1.00% 102 +/-1.00% 14
2021 +/-1.00% 124 +/-1.00% 30
The change in the exchange rate of the Norwegian krone also has an effect on other components of equity.
With a 1% change in the exchange rate, the effect on other capital components, provided that all other variables
are assumed to be constant, would be BGN 8 thousand.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022 UIC 201047670
All amounts are in thousand Bulgarian leva unless otherwise stated
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail. Page 61 of 71
b. Price risk
The companies within the Group are exposed to a specific price risk regarding the prices of the goods and
services offered. Minimizing the price risk for negative price changes is achieved by periodically reviewing
contractual relationships and revising and updating prices in relation to market changes.
The Group owns shares that are subject to trading on a regulated market, and during 2021 and 2022 the Group
sold part of its shares. For the remainder of the shares, the Group is exposed to risks of negative changes on
the regulated market in Norway.
As of December 31, 2022, the Group owns 593 536 shares of the capital of Link Mobility Group, which are
traded on regulated market. The value of one share at market close as of 30.12.2022 is NOK 7.52 or the total
value of the owned securities amounts to NOK 4 057 311 (BGN 830 thousand). If the quote changes by 1%
the value of the shares will change by NOK 40 573 (BGN 7 thousand).
c. Risk of the interest-bearing cash flows
The companies within the Group do not have a significant concentration of interest-bearing assets, except for
cash on current accounts with banks, therefore the revenue and operating cash flows are not largely dependent
on changes in market interest rates.
At the same time, the cash outflows of the companies within the Group are exposed to interest rate risk from
utilizing a bank loans and lease, agreed with a variable interest rate (1M EURIBOR).
Cash on current accounts with banks bear interest at interest rates according to the tariffs of the respective
banks.
The exposure of the companies within the Group is currently monitored and analyzed to changes in market
interest rates. Different refinancing scenarios, renewal of existing interest-bearing positions and alternative
financing are considered.
December 31, 2022 Interest-free
With
floating
interest %
With fixed
interest % Total
Cash and cash equivalents - - 28 148 28 148
Short-term financial assets 175 - - 175
Trade receivables 19 776 - - 19 776
Long term trade receivables 1 027 - - 1 027
Deposits in commercial companies and
guarantees
104 - - 104
TOTAL ASSETS 21 082 - 28 148 49 230
Lease liabilities - - 318 318
Bank loans - 541 1 615 2 156
Trade payables 1 797 - - 1 797
Contributory obligations 535 - - 535
Guarantees 61 - - 61
TOTAL LIABILITIES 2 393 541 1 933 4 867
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022 UIC 201047670
All amounts are in thousand Bulgarian leva unless otherwise stated
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail. Page 62 of 71
December 31, 2021 Interest-free
With
floating
interest %
With fixed
interest % Total
Cash and cash equivalents - - 30 541 30 541
Trade receivables 12 405 - - 12 405
Long term trade receivables 2 054 - - 2 054
Deposits in commercial companies and
guarantees 22 - - 22
TOTAL ASSETS 14 481 - 30 541 45 022
Lease liabilities - - 138 138
Bank loans - 679 1 900 2 579
Trade payables 1 001 - - 1 001
Contributory obligations 665 - - 665
Guarantees 61 - - 61
TOTAL LIABILITIES 1 727 679 2 038 4 444
Credit risk
The financial assets of the companies within the Group are concentrated in two groups: cash (cash on hand
and at bank accounts) and receivables from clients.
Credit risk is mainly the risk that the customers of the companies within the Group will not be able to pay in
full and within the usual deadlines the amounts owed by them. Trade receivables are presented in the
consolidated statement of financial position at amortized cost. An impairment has been charged for doubtful
and uncollectible loans, as there have been events identifying uncollectible losses based on past experience.
The companies within the Group do not have significant concentration of credit risk. Their policy is to negotiate
a credit period longer than 60 days only with customers who have a long history and commercial cooperation
with them. Payments from customers for sales are mainly made by bank transfer.
Significant part of Group’s revenue is generated by mobile operators or other customers, which in most cases
are large companies with good credit rating.
The collection and concentration of receivables is monitored on an ongoing basis, according to the established
policy of the companies within the Group. For this purpose, the open positions by clients, as well as the
received receipts, are periodically reviewed by the financial and accounting department and the management,
and an analysis of the unpaid amounts is performed.
As of December 31, 2022 cash and the payment operations of the companies within the Group are spread over
several banks which limits the risk for cash and cash equivalents.
Management has defined its policy for assessing credit losses. For trade receivables, the simplified method is
applied, with percentages determined based on past experience.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022 UIC 201047670
All amounts are in thousand Bulgarian leva unless otherwise stated
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail. Page 63 of 71
As of December 31, 2022, receivables amounting to BGN 1 444 thousand are reported as written-off by the
Group and BGN 152 thousand are recognised as impairment of receivables. As of December 31, 2021,
receivables amounting to BGN 97 thousand are reported as written-off and BGN 237 thousand are recognised
as impairment of receivables. (Note 4.04).
Group’s credit risk exposure arising from its financial assets as of December 31, 2022 and December 31, 2021
is presented below:
As of December
31, 2022
As of December
31, 2021
Cash and cash equivalents 28 148 30 541
Long-term trade receivables 1027 2 054
Short-term financial assets 175 -
Trade receivables 19 776 12 405
Total 49 126 45 000
The impairment staging of the financial assets of the Company as of December 31, 2022 and December 31,
31.12.2022
Stage 1 Stage 2 Stage 3 Total
Financial assets
Cash and cash equivalents 28 148 - - 28 148
Long-term trade receivables 1 027 - - 1 027
Short-term financial assets 175 - - 175
Trade receivables 19 452 - 850 20 302
Total 48 802 - 850 49 652
Booked provisions (ECL) for financial
assets (50) - (476) (526)
Financial assets, net of booked
provisions 48 752 - 374 49 126
31.12.2021
Stage 1 Stage 2 Stage 3 Total
Financial assets
Cash and cash equivalents 30 541 - - 30 541
Long-term trade receivables 2 054 - - 2 054
Trade receivables 11 792 - 850 12 642
Total 44 387 - 850 45 237
Booked provisions (ECL) for financial
assets - - (237) (237)
Financial assets, net of booked
provisions 44 387 - 613 45 000
The changes in the gross carrying amount of the financial assets are presented below:
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022 UIC 201047670
All amounts are in thousand Bulgarian leva unless otherwise stated
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail. Page 64 of 71
Gross carrying amount of the financial
instruments
Stage 1 -
expected
credit loss
for 12
months
period
Stage 2 -
expected
credit loss
for the
period of
the
financial
asset life
Stage 3 -
expected
credit loss
for the
period of
the
financial
asset life
TOTAL
Gross carrying amount as of December 31,
2021 40 758 - 4 327 45 085
Changes during the period:
Transfer from Stage 1 to Stage 2 - - - -
Transfer from Stage 1 to Stage 3 - - - -
Transfer from Stage 2 to Stage 3 - - - -
New financial assets 363 872 - - 363 872
Maturity of financial assets (355 828) - (3 477) (359 305)
Gross carrying amount as of December 31,
2022 48 802 - 850 49 652
Gross carrying amount of the financial
instruments
Stage 1 - expected
credit loss for 12
months period
Stage 2 -
expected
credit loss
for the
period of
the
financial
asset life
Stage 3 -
expected
credit loss
for the
period of
the
financial
asset life
TOTAL
Gross carrying amount as of December
31, 2020 34 600 - - 34 600
Changes during the period: - - -
Transfer from Stage 1 to Stage 2 (4 327) - 4 327 -
Transfer from Stage 1 to Stage 3 - - -
Transfer from Stage 2 to Stage 3 237 161 - - 237 161
New financial assets (226 524) - - (226 524)
Maturity of financial assets 40 910 - 4 327 45 237
The changes in booked ECL provision for financial assets in 2022 and 2021 are presented below:
Stage 1 -
expected credit
loss for 12
months period
Stage 2 -
expected
credit loss
for the
period of
the
financial
asset life
Stage 3 -
expected
credit loss
for the
period of
the
financial
asset life
TOTAL
ECL provision as of December 31, 2021 - - (237) (237)
Changes during the period:
Transfer from Stage 1 to Stage 2 - - - -
Transfer from Stage 1 to Stage 3 (50) - (391) (441)
Transfer from Stage 2 to Stage 3 - - - -
New financial assets - - - -
Maturity of financial assets - - 152 152
ECL provision as of December 31, 2022 (50) - (476) (526)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022 UIC 201047670
All amounts are in thousand Bulgarian leva unless otherwise stated
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail. Page 65 of 71
Stage 1 -
expected credit
loss for 12
months period
Stage 2 -
expected
credit loss
for the
period of
the
financial
asset life
Stage 3 -
expected
credit loss
for the
period of
the
financial
asset life
TOTAL
ECL provision as of December 31, 2020 - - - -
Changes during the period:
Transfer from Stage 1 to Stage 2 - - - -
Transfer from Stage 1 to Stage 3 - - (237) (237)
Transfer from Stage 2 to Stage 3 - - - -
New financial assets - - - -
Maturity of financial assets - - - -
ECL provision as of December 31, 2021 - - (237) (237)
Liquidity risk
Liquidity risk is the risk that the Group experiences difficulties meeting its obligations with respect to financial
liabilities settled with cash or another financial asset.
The companies within the Group carry out a conservative liquidity management policy, through which they
constantly maintain an optimal liquid stock of cash. Borrowed credit resources are also used.
In order to control the liquidity risk, the companies within the Group monitor the timely payment of the
incurred liabilities according to agreed terms of payment.
The Companies within the Group monitor and control the actual and projected cash flows for periods ahead
and maintain a balance between the maturity limits of the assets and liabilities of the Company. Currently, the
maturity and timely execution of payments is monitored by the finance and accounting departments,
maintaining daily information on available cash and upcoming payments.
December 31, 2022 to 1 m. 1-3 m. 3-6 m. 6-12 m. 1-2 y. 2-5 y. over 5
y.
Without
maturity total
Cash and cash
equivalents - - - - - - - 28 148 28 148
Short-term financial
assets
175 - - - - - - - 175
Trade receivables 14 383 2 628 739 2 026 - - - - 19 776
Long-term trade
receivables - - - - 1 027 - - - 1 027
Deposits in commercial
companies and
guarantees
- - - - - - - 104 104
TOTAL ASSETS 14 558 2 628 739 2 026 1 027 - - 28 252 49 230
Lease liabilities 14 27 40 80 157 - - - 318
Bank loans 118 160 129 261 469 961 58 - 2 156
Trade payables 822 35 64 876 - - - - 1 797
Contributory
obligations
10 20 30 475 - - - - 535
Guarantees - - - - - - - 61 61
TOTAL
LIABILITIES 964 242 263 1 692 626 961 58 61 4 867
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022 UIC 201047670
All amounts are in thousand Bulgarian leva unless otherwise stated
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail. Page 66 of 71
December 31, 2021 to 1 m. 1-3 m. 3-6 m. 6-12 m. 1-2 y. 2-5 y. over 5 y. Without
maturity total
Cash and cash
equivalents 125 - - - - - - 30 416 30 541
Trade receivables 9 048 455 - 2 902 - - - - 12 405
Long-term trade
receivables - - - - 1 027 1 027 - - 2 054
Deposits in
commercial
companies and
guarantees - - - - - - - 22 22
TOTAL ASSETS 9 173 455 - 2 902 1 027 1 027 - 30 438 45 022
Lease liabilities 3 7 10 38 27 53 - - 138
Bank loans 48 109 158 256 523 1 103 382 - 2 579
Trade payables 839 87 25 50 - - - - 1 001
Contributory
obligations 10 20 30 605 - - - - 665
Guarantees - - - - - - - 61 61
TOTAL
LIABILITIES 900 223 223 949 550 1 156 382 61 4 444
Capital risk management
With the capital management the Parent Company aims to create and maintain opportunities for it to continue
to operate as a going concern and to ensure the appropriate return on investment of shareholders, and to
maintain optimal capital structure, to reduce capital expenses.
Allterco AD currently monitors the capital structure based on the debt ratio. This ratio is calculated between
the net debt capital and the total amount of capital. Net debt capital is defined as the difference between all
borrowings (current and non-current) as stated in the consolidated statement of financial position and the cash
and cash equivalents. The total amount of capital is equal to the equity and net debt capital.
The table below presents the debt ratios based on the capital structure:
December 31,
2022
December 31,
2021
Total debt capital, incl. 9 725 6 903
-Bank loans 2 156 2 579
-Lease liabilities 318 138
Less: cash and cash equivalents 28 148 30 541
Net debt capital (18 423) (23 638)
Total equity 79 072 65 502
Total capital 60 649 41 864
Debt ratio 0.00% 0.00%
As the cash is larger than the debt capital, the Company has no indebtedness.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022 UIC 201047670
All amounts are in thousand Bulgarian leva unless otherwise stated
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail. Page 67 of 71
9. Fair values
For the purposes of disclosing fair value, the Group defines different classes of assets and liabilities depending
on their nature, characteristics and risk and the respective level of the fair value hierarchy specified in note
2.12.18. Fair Values.
The Group's management has considered that the book values of cash and cash equivalents, trade and other
receivables approximate their fair values due to the short-term nature of these financial instruments.
The attached table shows the book values and fair values of financial assets and liabilities, including their
levels in the fair value hierarchy. Fair value information is not included if the book value is reasonably close
to the fair value.
The table below presents the hierarchy of the fair value of the Group's assets and liabilities in accordance with
IFRS 13:
December 31, 2022 Book
value Level 1 Level 2 Level 3
Financial assets
Other long - term capital investments 830 830 - -
Cash and cash equivalents 28 148 - 28 148 -
TOTAL ASSETS 28 978 830 28 148 -
Financial liabilities
Lease liabilities 318 - 275 -
Bank loans 2 156 - 1 866 -
TOTAL LIABILITIES 2 474 - 2 141 -
December 31, 2021 Book
value Level 1 Level 2 Level 3
Financial assets
Cash and cash equivalents 30 541 - 30 541 -
Other long - term capital investments 2 624 2 624 - -
Long-term trade receivables 2 054 - - -
TOTAL ASSETS 35 219 2 624 30 541 -
Financial liabilities
Lease liabilities 138 - 127 -
Bank loans 2 579 - 2 326 -
TOTAL LIABILITIES 2 717 - 2 453 -
The fair value of the financial liabilities included in Level 2 in the table above was determined in accordance
with the generally accepted valuation model based on discounted cash flows, the interest rate on the loan was
used as a discount factor.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022 UIC 201047670
All amounts are in thousand Bulgarian leva unless otherwise stated
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail. Page 68 of 71
The fair value of trade receivables, short-term financial assets, trade payables and other liabilities approximates
their carrying amount as these assets/liabilities are short-term in nature and there are not subject to effects, that
lead to different fair value.
The fair value of financial assets included in Level 1 is determined using the market quotation for the price of
the asset at the reporting date.
10. Correction of errors and restatements
When preparing the consolidated financial statements for 2022, the Group restated the comparative
information as a result of error correction. As a result of the adjustments made, there were effects in the
statement of financial position and in the statement of comprehensive income of the Group.
Upon preparation of the consolidated financial statements for 2022 the Group identified that for 2021
(comparative information) a mistake is made in calculation and recognition of current for the period expenses
related to hired services provided to foreign counterparties. It was identified that the Group has not recognized
current expenses for 2021 at the amount of BGN 70 thousand.
As a result of the corrections as of January 1, 2022 the amount of retained earnings was decreased by BGN 70
thousand. As of the moment of correction no tax effect had been originated.
The following tables summarize the effects on the Group’s consolidated financial statements:
Before restatement
as of 01.01.2022 Restatement After restatement
as of 01.01.2022
Non-current assets 12 991 - 12 991
Current assets 59 414 - 59 414
Total assets 72 405 - 72 405
Share capital 18 000 - 18 000
Retained earnings 39 394 (70) 39 324
Legal reserves 1 800 - 1 800
Share premium reserve 5 403 - 5 403
Revaluation reserve 1 036 - 1 036
Foreign-exchange gains\losses on
translation of financial statements of
foreign operations (61) - (61)
Total equity 65 572 (70) 65 502
Non-current liabilities 2 087 - 2 087
Current liabilities 4 746 70 4 816
Total liabilities 6 833 70 6 903
Total equity and liabilities 72 405 - 72 405
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022 UIC 201047670
All amounts are in thousand Bulgarian leva unless otherwise stated
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail. Page 69 of 71
The effect of changes in the consolidated statement of other comprehensive income of the Group is presented
below:
Year ended
31.12.2021
Before
restatement
Restatement Year ended
31.12.2021
(restated)
Total revenue 61 289 - 61 289
Total expenses (42 567) (70) (42 637)
Tax expenses (2 760) - (2 760)
Net profit for the year 15 962 (70) 15 892
Other comprehensive income (3 914) - (3 914)
Total comprehensive income 12 048 (70) 11 978
11. Events after the end of the reporting period
On January 4, 2023 Allterco AD announced the completion of phase I of the acquisition of the Slovenian IoT
provider GOAP Računalniški inženiring in avtomatizacija procesov d.o.o. Nova Gorica, („GOAP”)
representing the acquisition of 60% of acquiree’s equity. The transaction is subject to share purchase
agreements ("SPA"), which have been signed with all four GOAP shareholders. The total transaction price for
phase I amounts to EUR 2 million (BGN 3.9 million) and is paid in cash.
The remaining 40% of the equity of GOAP, owned by the three owners – individuals, are subject to an options
contract, which was signed along with the acquisition agreements. Under the options contract Allterco AD has
an unconditional option to purchase (call option), whereas the sellers – conditional option to sell (put option)
two packages of company shares (the exercise of any of the sellers’ options is subject to achieving in the period
2023-2025 of specific minimum criteria for KPI, EBITDA and revenue). One of the options is for the
acquisition of 16%, whereas the other is for the acquisition of 24% of the equity of GOAP. The total price for
the shares upon exercise of the options depends on the extent of realization of the conditions for this and may
vary between EUR 699 999.70 (BGN 1 369 080.41) and EUR 3 449 998.60 (BGN 6 747 610.76).
The transactions have been concluded in accordance with the decision of the General meeting of the
shareholders of Allterco AD in December 2022. By the acquisition Allterco AD intends to expand its
technological portfolio and thus expand the offering of products both for customers and professional users.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022 UIC 201047670
All amounts are in thousand Bulgarian leva unless otherwise stated
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail. Page 70 of 71
The net assets determined based on preliminary figures of GOAP at January 4, 2023 are as follows:
January 4, 2023
Non-current assets 356
Inventory 819
Receivables 766
Cash and cash equivalents 149
Deferred revenue 17
Loans received (828)
Current liabilities (985)
Net Assets (A) 295
Non-controlling interest (40%) (B) 118
Consideration transferred in cash (C) 3 912
Goodwill (B+C- А) 3 735
On January 16, 2023 Allterco AD disclosed that based on preliminary data for the financial results on
consolidated basis by the end of the fourth quarter of 2022, Allterco AD reported an annual increase of 56.1%
of the consolidated annual sales revenue of devices (including related services) for 2022, which amounts to
EUR 47.5 million (BGN 92.9 million). Sales revenue of devices for home automation with the Shelly brand
increased by 60.0%, reaching up to EUR 45.2 million (BGN 88.4 million), followed by the revenue from sales
of devices for tracking MyKi, which increased by 20.6% up to EUR 2.2 million (BGN 4.3 million).
With this sales revenue Allterco AD exceeds the forecast for 2022 sales revenue amounting to EUR 45-46
million.
On the grounds of art. 114a, para. 9 of the Public Offering of Securities Act (POSA) on 23.03.2023, Allterco
AD announced that in connection with request for approval received under art. 114, par. 3 POSA, the Board
of Directors of Allterco AD has approved and the public company has granted to the subsidiary GOAP a loan
amounting to EUR 500 000 under the following conditions: repayment period 31.12.2029, interest – according
to the statistical data published by the Bulgarian National Bank on "Interest rates and volumes on loan balances
other than overdrafts, for non- financial corporations sector (in EUR for a period of more than 5 years)”.
The loan provided is a special purpose loan and the funds provided under this loan should be used for: (i)
repayment of amounts due under loans of the company provided by minority shareholders before acquisition,
(ii) remuneration payments to key personnel; (iii) payments to suppliers and financing of working capital for
the normal continuation of commercial activity in accordance with the approved GOAP budget and business
plan; (iv) repayment of the loan granted to GOAP by Bank Nova KBM d.d. before the acquisition or provision
of a guarantee in exchange for the guarantee provided by the GOAP Manager, Mr. Leon Krali.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022 UIC 201047670
All amounts are in thousand Bulgarian leva unless otherwise stated
This document is a translation of the original Bulgarian text, in case of divergence the Bulgarian text shall prevail. Page 71 of 71
After the end of the reporting period, Allterco AD has entered into a non-binding Term Sheet investment
agreement on the essential parameters of an investment in Ground Solutions Group AD through participation
in the capital increase and subscription of new preferred shares in the capital of its subsidiary Corner Solutions
EOOD (the "Investment"), and namely - 625 new preferred company shares, representing 10% of the capital
of "Corner Solutions" EOOD after the increase, against a price of EUR 100,000. The investment will be carried
out jointly with Vitosha Venture Partners - Fund I KD, UIC: 206223492. Parties to the Term Sheet agreement
are Vitosha Venture Partners - Fund I KD, UIC: 206223492, Ground Solutions Group AD, UIC: 206606897,
Corner Solutions EOOD and three individuals holding 100% of the capital of Ground Solutions Group AD.
The conclusion of an Investment Agreement is subject to further negotiations between the parties. No
interested parties are involved in the transaction.
No other significant events have occurred after the reporting period, which require adjustments or disclosures
in the Group’s consolidated financial statements for the year ended December 31, 2022.
Deloitte Audit OOD
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Bulgaria
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Fax: +359 (2) 80 23 350
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This document is a translation of the original Bulgarian text,
in case of divergence the Bulgarian text shall prevail.
INDEPENDENT AUDITOR’S REPORT
To the shareholders of Allterco AD
REPORT ON THE AUDIT OF THE CONSOLIDATED FINANCIAL STATEMENTS
Opinion
We have audited the accompanying consolidated financial statements of Allterco AD (the “ Parent
Company”) and its subsidiaries (together the “Group”), which comprise the consolidated statement of
financial position as at December 31, 2022, and the consolidated statement of comprehensive income, the
consolidated statement of changes in equity and the consolidated statement of cash flows for the year then
ended, and notes to the consolidated financial statements, including significant accounting policies and other
explanatory information.
In our opinion, the accompanying consolidated financial statements present fairly, in all material respects,
the consolidated financial position of the Group as at December 31, 2022, and its consolidated financial
performance and its consolidated cash flows for the year then ended in accordance with International
Financial Reporting Standards ("IFRS"), as adopted by the European Union (“EU”).
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities
under those standards are further described in the Auditor’s Responsibilities for the Audit of the consolidated
financial statements section of our report. We are independent of the Group in accordance with the
International Code of Ethics for Professional Accountants (including International Independence Standards)
of the International Ethics Standards Board for Accountants (IESBA Code) together with the ethical
requirements of the Independent Financial Audit Act (IFAA) that are relevant to our audit of the consolidated
financial statements in Bulgaria, and we have fulfilled our other ethical responsibilities in accordance with
the IESBA Code and the requirements of IFAA. We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our opinion.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit
of the consolidated financial statements of the current period. These matters were addressed in the context
of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we
do not provide a separate opinion on these matters.
Key audit matter How our audit addressed the key audit matter
Revenue from contracts with customers
The Group’s disclosures about revenue from contracts with customers are included in Notes 2.12.1 and
4.01 to the consolidated financial statements.
In the consolidated financial statements for the year
ended December 31, 2022, the Group has
recognized revenue from contracts with customers
amounting to BGN 93,178 thousand. This revenue
is recorded predominantly as a result of sales of
electronic devices to business clients and to direct
end-customers.
In developing a policy for revenue recognition in
accordance with IFRS 15 the Management of the
Group has applied various judgments, related to
determining the nature of the separate performance
obligations within the contracts with customers and
the manner of satisfaction of the identified
performance obligations.
The Management of the Group analyses every year
the necessity for review of the previously applied
judgments. During 2022 the assessment of the
Group is that no changes to judgments are
necessary.
Because of the significance of revenue from
contracts with customers, we have identified this
area as a key audit matter.
In this area our audit procedures, among others,
included:
• Understanding and performing walkthrough of the
process for revenue recognition;
•Testing of the design and implementation of
selected key controls related to the processes for
recognizing revenue;
• We have reviewed the significant accounting
judgements and determined their reasonableness
based on the IFRS requirements for recognition and
measurement of revenue from contracts with
customers.
• We assessed the conclusions of the significant
accounting judgements made by the Group by
assessing the audit evidence received in the course
of understanding and testing the design and
implementation of key controls over the revenue
process and through performing substantive
procedures.
• We have performed analytical procedures and tests
of details as appropriate in order to gain sufficient
and appropriate audit evidence that revenue from
contracts with customers is presented fairly, in all
material respects.
• We have assessed the appropriateness of the
disclosures regarding revenue presented in the
consolidated financial statement for 2022 to
determine whether these are in accordance with
IFRS 15 Revenue from contacts with customers.
Other matter
The consolidated financial statements of the Group for the year ended December 31, 2021, were audited by
another auditor who expressed an unmodified opinion on those statements on April 29, 2022.
Information Other than the consolidated financial statements and Auditor’s Report Thereon
The Board of Directors of the Parent Company (the “Management”) is responsible for the other information.
The other information comprises the annual report on activities and the corporate governance statement,
prepared by the Management in accordance with Chapter Seven of the Accountancy Act, but does not include
the consolidated financial statements and our auditor’s report thereon.
Our opinion on the consolidated financial statements does not cover the other information and we do not
express any form of assurance conclusion thereon, unless it is not specifically stated in our auditor’s report
and to the extent it is specifically stated.
3
In connection with our audit of the consolidated financial statements, our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent with the
consolidated financial statements or our knowledge obtained in the audit or otherwise appears to be
materially misstated. If, based on the work we have performed, we conclude that there is a material
misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Responsibilities of Management and Those Charged with Governance for the consolidated financial
statements
Management is responsible for the preparation and fair presentation of the consolidated financial statements
in accordance with IFRS as adopted by the EU, and for such internal control as Management determines is
necessary to enable the preparation of consolidated financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, M anagement is responsible for assessing the Group’s
ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using
the going concern basis of accounting unless Management either intends to liquidate the Group or to cease
operations, or has no realistic alternative but to do so.
The Audit Committee of the Parent Company (“Those charged with governance”) is responsible for
overseeing the Group’s financial reporting process.
Auditor’s Responsibilities for the Audit of the consolidated financial statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a
whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit
conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements
can arise from fraud or error and are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated
financial statements.
As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional
skepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the consolidated financial statements,
whether due to fraud or error, design and perform audit procedures responsive to those risks, and
obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk
of not detecting a material misstatement resulting from fraud is higher than for one resulting from
error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Group's 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 M anagement’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 Group’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 consolidated 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 Group to cease
to continue as a going concern.
4
• Evaluate the overall presentation, structure and content of the consolidated financial statements,
including the disclosures, and whether the consolidated financial statements represent the underlying
transactions and events in a manner that achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Group to express an opinion on the consolidated financial statements.
• We are responsible for the direction, supervision and performance of the group audit. We remain
solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope
and timing of the audit and significant audit findings, including any significant deficiencies in internal control
that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other matters that
may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were
of most significance in the audit of the consolidated financial statements of the current period and are
therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation
precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a
matter should not be communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
Reporting in relation to the compliance with the electronic format of the consolidated financial
statements, included in the annual consolidated financial report on activities under Art. 100m, para 5
of the Public Offering of Securities Act (POSA) with the requirements of the European Single
Electronic Format (ESEF) Regulation
We have performed a reasonable assurance engagement regarding the compliance of the electronic format
of the Group's consolidated financial statements for the year ended December 31, 2022 attached in the
electronic file "8945007IDGKD0KZ4HD95-20221231-EN-CON.zip", with the requirements of
Commission Delegated Regulation (EU) 2019/815 of December 17, 2018 supplementing Directive 2004/109
/ EC of the European Parliament and of the Council by means of regulatory technical standards to define the
European Single Electronic Format for reporting ("ESEF Regulation").
Our opinion is only with respect to the electronic format of the consolidated financial statements and does
not cover the other information included in the annual consolidated financial report on activities under
Art.100m, para 4 of the POSA.
Description of the subject and applicable criteria
The Management has prepared electronic format of the consolidated financial statements of the Group for
the year ended December 31, 2022, in accordance with the ESEF Regulation to comply with the requirements
of the POSA. The rules for preparing consolidated financial statements in this electronic format are set out
in the ESEF Regulation and, in our opinion, have the characteristics of appropriate criteria for forming a
reasonable assurance opinion.
5
Responsibilities of Management and Those Charged with Governance
The Group’s Management is responsible for the application of the requirements of the ESEF Regulation in
preparing the electronic format of the consolidated financial statements in XHTML. These responsibilities
include the selection and implementation of appropriate iXBRL tags using the taxonomy of the ESEF
Regulation, and the introduction and implementation of such internal control system as Management
determines is necessary to prepare the electronic format of the Group's annual consolidated financial
statements, so that it does not contain significant inconsistencies with the requirements of the ESEF
Regulation.
Those charged with governance are responsible for overseeing the process of preparation of the annual
consolidated financial statements of the Group, including the application of the ESEF Regulation.
Auditor’s responsibility
Our responsibility is to express a reasonable assurance opinion as to whether the electronic format of the
consolidated financial statements complies with the requirements of the ESEF Regulation. For this objective
we performed “ Guidelines on the issuing of audit opinion with respect to the application of the European
Single Electronic Format (ESEF) to the financial statements of companies which securities are admitted to
trading on a regulated market in the European Union (EU)" by the Professional Organization of the
Registered Auditors in Bulgaria - Institute of Certified Public Accountants (ICPA) and we have performed
and a reasonable assurance engagement in accordance with ISAE 3000 (revised) Assurance Engagements
Other than Audits or Reviews of Historical Financial Information” (ISAE 3000 (revised)). This standard
requires us to comply with ethical requirements, plan and perform appropriate procedures to obtain
reasonable assurance whether the electronic format of the Group's consolidated financial statements has been
prepared in all material respects in accordance with the applicable criteria set out above. The nature, timing
and scope of the procedures chosen depend on our professional judgement, including the assessment of the
risk of material non-compliance with the requirements of the ESEF Regulation, whether due to fraud or error.
Reasonable assurance is a high level of assurance, but is not a guarantee that an assurance engagement
conducted in accordance with ISAE 3000 (revised)) will always detect non-compliance with requirements,
when it exists.
Requirements on quality control
We apply the requirements of International Standard on Quality Control (ISQC) 1, and accordingly maintain
a comprehensive system of quality control including documented policies and procedures regarding
compliance with ethical requirements, professional standards and applicable legal and regulatory
requirements applicable to registered auditors in Bulgaria.
We are independent in accordance with the International Code of Ethics for Professional Accountants
(including International Independence Standards) of the International Ethics Standards Board for
Accountants (IESBA Code) adopted by ICPA by IFAA.
Summary of work performed
The objective of the procedures planned and performed by us was to obtain reasonable assurance that the
electronic format of the consolidated financial statements has been prepared, in all material respects, in
accordance with the requirements of the ESEF Regulation. As part of assessing the compliance with the
requirements of the ESEF Regulation regarding the electronic (XHTML) reporting format of the Group's
consolidated statements, we maintained professional skepticism and used professional judgement. We also:
6
• obtained an understanding of the internal control and processes related to the application of the ESEF
Regulation in relation to the Group's consolidated financial statements and including the preparation
of the Group's consolidated financial statements in XHTML format and its tagging in machine-
readable language (iXBRL);
• checked whether the applied XHTML format is valid;
• checked whether the human-readable part of the electronic format of the consolidated financial
statements corresponds to the audited consolidated financial statements;
• assessed the completeness of the tags in the Group's consolidated financial statements when using
machine-readable language (iXBRL) in accordance with the requirements of the ESEF Regulation;
• assessed the appropriateness of the used iXBRL tags selected from the basic taxonomy, as well as
the creation of an element of the extended taxonomy in accordance with the ESEF Regulation, when
a suitable element in the basic taxonomy is missing;
• assessed the appropriateness of the correlation (fixation) of the elements of the extended taxonomy
in accordance with the ESEF Regulation.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
qualified opinion.
Qualified opinion on compliance of the electronic format of the consolidated financial statements with the
requirements of the ESEF Regulation
In our opinion, except for the effects of the matter described in Basis for qualified opinion section, the
electronic format of the consolidated financial statements of the Group for the year ended December 31,
2022, contained in the attached electronic file “8945007IDGKD0KZ4HD95-20221231-EN-CON .zip“, is
prepared in all material respects in compliance with the requirements of the ESEF Regulation.
Basis for qualified opinion
We have identified that the following tags are inappropriately applied in the English version of the electronic
format and we present the appropriate tags:
Financial
Statement
Line
Main
Statement
December
31, 2022
December
31, 2021
Tag, Applied by the
Group
Appropriate Tag
Retained
Earnings
Consolidated
statement of
Changes in
Equity
BGN 55,117
thousand
BGN 39,324
thousand
DescriptionOfOther
AccountingPolicies
RelevantToUndersta
ndingOfFinancialSta
tements
DisclosureOfAdditionalIn
formationExplanatory
Repurchased
own shares
Consolidated
statement of
Cash Flows
BGN 780
thousand
- ProceedsFromIssuin
gSharesAllterco
PaymentsToAcquireOrRe
deemEntitysShares
Basic
Earnings per
Share
Consolidated
Statement of
Comprehensive
income
BGN 0.97
per share
BGN 0.88 per
share Inappropriately
presented as BGN
970 per share for
2022 and BGN 880
per share for 2021
Appropriate presentation
would be BGN 0.97 per
share for 2022 and BGN
0.88 per share for 2021.
7
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 consolidated financial statements and Auditor’s Report Thereon”, with respect to the annual report on
activities and the corporate governance statement, we have also performed the procedures, together with the
required under ISA, in accordance with the "Guidelines regarding new extended reports and communication
by the auditor" of the Professional Organization of Registered Auditors in Bulgaria - Institute of Certified
Public Accountants (ICPA). These procedures include tests over the existence, form and content of the other
information in order to assist us in forming an opinion as to whether the other information includes the
disclosures and reporting as required by Chapter Seven of the Accountancy Act and the Public Offering of
Securities Act (Art. 100m, paragraph 10 of POSA in relation to Art. 100m, paragraph 8, p. 3 and 4 of POSA,
as well as Art. 100m, paragraph 13 of POSA in relation to Art. 116c, paragraph 1 of POSA), applicable in
Bulgaria.
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
consolidated financial statements have been prepared, is consistent with the consolidated 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 consolidated financial statements have been prepared.
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 Group
and the environment in which it operates, acquired during our audit, in our opinion, the description of the
main features of the Group’s internal control and risk management systems in relation to the financial
reporting process as part of the annual report on activities (as 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.
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 consolidated financial statements of
the Group for the year ended December 31, 2022 by the general meeting of shareholders held on
June 27, 2022 for a period of one year.
• The audit of the consolidated financial statements of the Group for the year ended December 31,
2020 represents first 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,
provided to the Parent Company’s Audit Committee on May 2, 2023, in compliance with the
requirements of Art. 60 of the Independent Financial Audit Act.
8
• We hereby confirm that no prohibited non-audit services referred to in Art. 64 of the Independent
Financial Audit Act were provided.
• We hereby confirm that in conducting the audit we have remained independent of the Group.
• For the period to which our statutory audit refers, we have not provided other services to the Group
in addition to the statutory audit.
Deloitte Audit OOD
Reg. No 033 in the Register of the registered auditors
under Art. 20 Independent Financial Audit Act
Desislava Dinkova
Registered Auditor, in charge of the audit
Statutory Manager
Deloitte Audit OOD
103, Al. Stambolijski Blvd.
1303 Sofia, Bulgaria