Allterco : Accounting Policy and Explanatory Notes

ALLTERCO JSCo

Unified Identification Code (UIC): 201047670

SUPPLEMENT TO THE INDIVIDUAL

FINANCIAL STATEMENTS AS OF 30 JUNE 2021

Unless otherwise stated, all amounts are in BGN thousand.

	TABLE OF CONTENTS
1.	Legal status and general information about the company.............................................................	10
2.	Basis for preparation of the financial statements and accounting principles. ...............................	10
2.1.	General financing reporting framework........................................................................................	10
2.2.	Initial application of new and amended IFRSs in force for the current accounting period ..........	11
2.3.	Accounting principles ...................................................................................................................	12
2.4.	Subsidiaries. Consolidation...........................................................................................................	13
2.5.	Investments in associated companies............................................................................................	13
2.6.	Use of estimates and judgements ..................................................................................................	13
2.7.	Functional currency and recognition of exchange rate differences...............................................	14
2.7.1. Functional and reporting currency...................................................................................................	14
2.8.	Property, plant and equipment ......................................................................................................	15
2.9.	Intangible assets ............................................................................................................................	17
2.10.	Investments in subsidiaries ...........................................................................................................	17
2.11.	Other long - term capital investments ...........................................................................................	19
2.12.	Non-current assets held for sale ....................................................................................................	20
2.13.	Financial instruments ....................................................................................................................	20
2.13.1.	Trade and other receivables .........................................................................................................	20
2.13.2.	Cash and cash equivalents ............................................................................................................	21
2.13.3.	Loan liabilities ..............................................................................................................................	22
2.13.4.	Payables to suppliers, other current payables and advances received.........................................	22
2.14.	Deferred tax assets ........................................................................................................................	22
2.15.	Lease .............................................................................................................................................	23
2.16.	Employee's income.......................................................................................................................	24
2.17.	Provisions......................................................................................................................................	26
2.18.	Registered capital ..........................................................................................................................	26
2.19.	Reserves ........................................................................................................................................	26
2.20.	Revenue.........................................................................................................................................	26
	Page 7 of 59

ALLTERCO JSCo

Unified Identification Code (UIC): 201047670

SUPPLEMENT TO THE INDIVIDUAL

FINANCIAL STATEMENTS AS OF 30 JUNE 2021

Unless otherwise stated, all amounts are in BGN thousand.

2.21.	Expenses .......................................................................................................................................	29
2.22.	Income tax expenses .....................................................................................................................	30
2.23.	Income per share ...........................................................................................................................	31

2.24. Judgments that are crucial in applying the accounting policy of the Company. Key high

uncertainty estimates and assumptions......................................................................................................	31
2.24.1	Impairment of investments in subsidiaries ....................................................................................	31
2.25.	Determination of fair values .........................................................................................................	33
3.	Notes to the Statement of financial position .................................................................................	34
3.01.	Property, plant and equipment ......................................................................................................	34
3.02.	Intangible assets ............................................................................................................................	34
3.03.	Investment in subsidiaries .............................................................................................................	35
3.04.	Investments in associated companies............................................................................................	36
3.05.	Other long-term capital investments .............................................................................................	36
3.06.	Deferred tax assets ........................................................................................................................	36
3.07.	Receivables from related companies.............................................................................................	36
3.08.	Trade receivables ..........................................................................................................................	37
3.09.	Other receivables ..........................................................................................................................	38
3.10.	Cash and cash equivalents.............................................................................................................	38
3.11.	Prepaid expenses ...........................................................................................................................	39

3.12. Non-current assets classified as held for sale and assets included in disposal groups classified as

held for sale ...............................................................................................................................................	39
3.13.	Bank loans.....................................................................................................................................	39
3.14.	Trade liabilities .............................................................................................................................	40
3.15. Payables to employees and social security liabilities....................................................................	40
3.16.	Tax liabilities ................................................................................................................................	41
3.17.	Other liabilities..............................................................................................................................	41
3.18.	Registered capital ..........................................................................................................................	41
3.19.	Retained earnings ..........................................................................................................................	42
3.20.	Reserves ........................................................................................................................................	43
3.21.	Share premium reserve..................................................................................................................	43

Page 8 of 59

ALLTERCO JSCo

Unified Identification Code (UIC): 201047670

SUPPLEMENT TO THE INDIVIDUAL

FINANCIAL STATEMENTS AS OF 30 JUNE 2021

Unless otherwise stated, all amounts are in BGN thousand.

3.22.	Other comprehensive income........................................................................................................	43
4.	Notes to the Statement of comprehensive income ........................................................................	43
4.01.	Other operating income.................................................................................................................	43
4.02.	Administrative expenses ...............................................................................................................	44
4.03.	Other expenses ..............................................................................................................................	44
4.04.	Financial expenses, net .................................................................................................................	44
5.	Related parties transactions...........................................................................................................	45
6.	Contingent liabilities and commitments........................................................................................	45
7.	Key management staff ..................................................................................................................	46
8.	Financial instruments by categories ..............................................................................................	47
9.	Financial risk management ...........................................................................................................	48
10.	Fair values .....................................................................................................................................	54
11.	Other Information .........................................................................................................................	55
12.	Events after the date of the financial statements ...........................................................................	57

1.

2.

3.

Page 9 of 59

ALLTERCO JSCo

Unified Identification Code (UIC): 201047670

SUPPLEMENT TO THE INDIVIDUAL

FINANCIAL STATEMENTS AS OF 30 JUNE 2021

Unless otherwise stated, all amounts are in BGN thousand.

4. Legal status and general information about the company

Allterco JSCo, Sofia, is entered in the Commercial Register of the Registry Agency with UIC as per Bulstat (Unified Identification Code as per the Bulgarian Statistical Register): 201047670. The company is with seat and address of management in Sofia 1407, 103, Cherni Vrah Blvd. The Company is registered with a registered capital of 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. The registered share capital of Allterco JSCo is fully paid in. 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 17,999,999 as a result of a procedure for Public Offering of a new issue of shares.

The scope of business of Allterco JSCo includes the acquisition, management, evaluation and sale of participations in Bulgarian and foreign companies; acquisition, management and sale of bonds; acquisition, evaluation and sale of patents, assignment of licenses for use of patents to companies in which the Company participates; financing of companies in which the Company participates. The company is managed and represented by Svetlin Todorov and Dimitar Dimitrov.

5. Basis for preparation of the financial statements and accounting principles. 2.1. General financing reporting framework

The company maintains its current accounting and prepares its financial statements in accordance with the requirements of the Bulgarian commercial and accounting legislation.

These financial statements have been prepared in accordance with the requirements of the International Accounting Standards, published by the International Accounting Standards Board and adopted by the European Union. As of June 30, 2021, IASs include the International Accounting Standards (IASs), the International Financial Reporting Standards (IFRSs), the Interpretations of the Standing Interpretation Committee and the Interpretations of the IFRS Interpretation Committee. The IAS are reissued annually and are valid only for the year for which they were issued, including all amendments as well as the new standards and explanations. However, many of them are not applicable to the company's business because of the specific issues that are addressed in them.

Page 10 of 59

ALLTERCO JSCo

Unified Identification Code (UIC): 201047670

SUPPLEMENT TO THE INDIVIDUAL

FINANCIAL STATEMENTS AS OF 30 JUNE 2021

Unless otherwise stated, all amounts are in BGN thousand.

2.2. Initial application of new and amended IFRSs in force for the current accounting period The management of the Company has complied with all standards and interpretations that are

applicable to its activities and have been officially accepted for application by the EU as of the date of preparation of these individual financial statements.

Amendments in the IFRS references to the Conceptual Framework

The IASB issued the revised Conceptual Framework for Financial Reporting on March 29, 2018, which is effective for annual periods beginning on or after January 1, 2020. The Conceptual Framework sets out a comprehensive set of concepts for financial reporting, standards setting, and a guide for compilers of financial statements in developing consistent accounting policies and assisting others in their efforts to understand and interpret standards. The main changes introduced in the revised conceptual framework for financial reporting relate to valuation, including the factors to be taken into account in selecting a valuation basis, and to presentation and disclosure, including income and expenses to be classified in another comprehensive revenue. The conceptual framework also provides updated definitions of assets and liabilities and criteria for their recognition in the financial statements.

IFRS 3 Business Combinations (Amendments): Definition of Business

The amendments are effective for annual periods beginning on or after January 1, 2020. The amendments clarify the minimum business requirements and narrow the definition of business. The amendments also remove the assessment of whether market participants can replace missing elements, add guidelines to assist companies in assessing whether an acquired process is significant and introduce an optional test that allows for a simplified assessment of whether a set of activities and assets is a business or not.

Amendments to IAS 1 Presentation of Financial Statements and IAS 8 Accounting Policies, Changes

in Accounting Estimates and Errors: Definition of "material"

The amendments are effective for annual periods beginning on or after January 1, 2020. The

amendments clarify the definition of "material" and how it should be applied, aligning the definition used

in the conceptual framework and standards. The amendments also specify that materiality will depend on

the nature or importance of the information.

Page 11 of 59