ALLTERCO JSCo

Unified Identification Code (UIC): 201047670

EXPLANATORY NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF JUNE 30, 2021

Unless otherwise stated, all amounts are in BGN thousand.

TABLE OF CONTENT

1.

Information about the Group ...............................................................................................................................

9

1.1.

Legal status......................................................................................................................................................

9

1.2.

Ownership and Management ...............................................................................................................................

9

1.3. Scope of Activities ...............................................................................................................................................

10

2.

Basics of accounting policies of the Group .......................................................................................................

11

2.1.

Basis for Preparation of the Annual Consolidated Financial Statements ......................................................

11

2.2

Initial application of new and amended IFRSs in force for the current reporting period ..............................

11

2.3

Basis of preparation of the Consolidated Financial Statements ....................................................................

13

2.4

Comparative data ..........................................................................................................................................

13

2.5

Functional currency and recognition of currency exchange rate differences ................................................

14

2.6

Transactions and balances .............................................................................................................................

14

2.7

Assumptions ..................................................................................................................................................

15

2.8

Subsidiaries and associated companies .........................................................................................................

15

2.9

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

15

2.10

Minority interest............................................................................................................................................

16

2.11

Consolidation ................................................................................................................................................

16

2.12

Revenues .......................................................................................................................................................

17

2.13

Expenses........................................................................................................................................................

19

2.14

Property, plant and equipment.......................................................................................................................

19

2.15

Other long-term capital investments .............................................................................................................

22

2.16

Investments in Associated companies ...........................................................................................................

22

2.17

Lease .............................................................................................................................................................

22

2.18

Provisions ......................................................................................................................................................

23

2.19

Inventory .......................................................................................................................................................

24

2.20

Pension and other payables to employees .....................................................................................................

24

2.21

Share capital ..................................................................................................................................................

25

2.22

Cash and cash equivalent ..............................................................................................................................

27

2.23

Financial instruments ....................................................................................................................................

28

2.24 Judgments that are crucial in applying accounting policies of the Group. Key high uncertainty estimates and

assumptions...................................................................................................................................................

31

2.25

Fair value.......................................................................................................................................................

32

3. Notes to the consolidated statement of financial position .......................................................................................

33

3.01.

Property, plant and equipment.......................................................................................................................

33

3.02.

Intangible assets ............................................................................................................................................

34

3.03.

Assets with right of use .................................................................................................................................

35

The explanatory notes constitute an integral part of the attached consolidated financial statements.

Page 7 of 54

ALLTERCO JSCo

Unified Identification Code (UIC): 201047670

EXPLANATORY NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF JUNE 30, 2021

Unless otherwise stated, all amounts are in BGN thousand.

3.04.

Goodwill........................................................................................................................................................

35

3.05.

Other long-term capital investments .............................................................................................................

36

3.06.

Deferred tax assets ........................................................................................................................................

36

3.07.

Inventory .......................................................................................................................................................

37

3.08.

Trade receivables ..........................................................................................................................................

37

3.09.

Other receivables...........................................................................................................................................

37

3.10.

Cash and cash equivalents .............................................................................................................................

38

3.11.

Prepaid expenses ...........................................................................................................................................

38

3.12.

Bank loans .....................................................................................................................................................

38

3.13.

Lease .............................................................................................................................................................

39

3.14.

Trade payables ..............................................................................................................................................

39

3.15.

Payables to employees ..................................................................................................................................

40

3.16.

Tax liabilities.................................................................................................................................................

40

3.17.

Other liabilities ..............................................................................................................................................

40

3.18.

Registered capital ..........................................................................................................................................

40

3.19.

Retained earnings ..........................................................................................................................................

41

3.20.

Reserves ........................................................................................................................................................

42

3.21.

Reserve from issue of shares .........................................................................................................................

42

4.

Notes to the consolidated statement of comprehensive income.........................................................................

42

4.01.

Sales revenue and cost price of sales.............................................................................................................

42

4.02.

Other operating income .................................................................................................................................

42

4.03.

Administrative expenses ...............................................................................................................................

42

4.04.

Other operating expenses ..............................................................................................................................

43

4.05.

Financial expenses ........................................................................................................................................

43

5.

Contingent liabilities and commitments ............................................................................................................

43

6.

Transactions with related entities ......................................................................................................................

44

7.

Financial instruments by category .....................................................................................................................

44

8.

Financial risk management ................................................................................................................................

45

9.

Fair value ...........................................................................................................................................................

51

10.

Events after the date of the financial statements ...........................................................................................

52

The explanatory notes constitute an integral part of the attached consolidated financial statements.

Page 8 of 54

ALLTERCO JSCo

Unified Identification Code (UIC): 201047670

EXPLANATORY NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF JUNE 30, 2021

Unless otherwise stated, all amounts are in BGN thousand.

1. Information about the Group

1.1. Legal status

Allterco JSCo (the mother company), Sofia, is entered in the Commercial Register of the Registry Agency with UIC as per Bulstat (Unified Identification Code as per the Bulgarian Statistical Register): 201047670. The company is with registered office and address of management in Sofia 1407, 103, Cherni Vrah Blvd. The initial registered capital was BGN 5,488,000 (five million four hundred and eighty-eight thousand), distributed in 5,488,000 ordinary registered voting shares with nominal value of BGN 1.00 each. At the end of 2015, the capital was increased to BGN 13,500 thousand through cash and non-cash contributions. At the end of 2016, the capital was increased to BGN 15,000 thousand after the successful Initial Public Offering on the Bulgarian Stock Exchange. In 2020, the capital was increased to BGN 18,000 thousand as a result of a procedure for Secondary Public Offering of a new issue of shares. The public offering of shares from the capital increase of Allterco JSCo. was carried out in the period September 28,

2020 - October 30, 2020 on the basis of a Prospectus, together with the supplements to it, confirmed by the Financial Supervision Commission with Decision № 148-Fof February 18, 2020, Decision № 405-E of June

11, 2020, Decision № 601-Eof August 13, 2020 and Decision № 791-Eof October 29, 2020.

The scope of business of Allterco JSCo included 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.

1.2. Ownership and Management

The Allterco Group includes Allterco JSCo. (the parent-company) and its subsidiaries, in which the parent-company has a direct or indirect controlling interest. Allterco JSCo. is a public company under the Public Offering of Securities Act.

The distribution of the share capital of the company Allterco JSCo. as of 30 June 2021 is as follows:

Name

Number of

% in the capital

shares:

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%

The explanatory notes constitute an integral part of the attached consolidated financial statements.

Page 9 of 54

ALLTERCO JSCo

Unified Identification Code (UIC): 201047670

EXPLANATORY NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF JUNE 30, 2021

Unless otherwise stated, all amounts are in BGN thousand.

Allterco JSCo. is managed and represented by Svetlin Todorov and Dimitar Dimitrov.

Members of the Board of Directors are:

  • Dimitar Stoyanov Dimitrov
  • Nikolay Angelov Martinov
  • Svetlin Iliev Todorov

1.3. Scope of Activities

The scope of activities of Allterco JSCo includes the acquisition, management, evaluation and sale of

participations in Bulgarian and foreign companies; acquisition, management and sale of bonds; acquisition,

evaluation and sale of patents, assignment of licenses for use of patents to companies in which the Company

participates; financing of companies in which the Company participates.

The group companies' portfolios include the following main groups of services or products:

  • Production and trade with IoT (Internet of Things) devices
  • Value added services for mobile phone owners

1.4. Group structure

As of June 30, 2021 and December 31, 2020 the Group included Allterco JSCo. and the following

subsidiaries:

June 30 2021

December 31

2020

Name of the company

Percentage of

Percentage of

participation

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%

June 30 2021

December 31

2020

Name of the company

Percentage of

Percentage of

participation

participation

Abroad

ALLTERCO PTE LTD., Singapore

100%

100%

ALLTERCO SDN LTD., Malaysia

100%

100%

ALLTERCO CO. LTD, Thailand

49%

49%

GLOBAL TERACOMM INC, USA

100%

100%

In the beginning of 2021 Allterco JSCo. acquired a stake in newly established (associated) company in China - Allterco Asia Ltd., with a seat and office in Shenzhen. The registered share capital of the newly

The explanatory notes constitute an integral part of the attached consolidated financial statements.

Page 10 of 54

ALLTERCO JSCo

Unified Identification Code (UIC): 201047670

EXPLANATORY NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF JUNE 30, 2021

Unless otherwise stated, all amounts are in BGN thousand.

registered company is CNY 100 000. Allterco acquired 30% and owns an option to acquire additional up to 50% which allows the company to extend its total shareholding up to 80%.

2. Basics of accounting policies of the Group

The accounting policy defines the initial assumptions, principles, rules, bases and procedures adopted by Allterco JSCo. and its subsidiaries, hereinafter referred to as the Companies (the Group), for accounting the activities of the companies and for presenting the information in the consolidated financial statements.

The accounting policy is applied by the Group for the preparation of the interim and annual financial statements for the year.

The accounting policy has been developed in accordance with the requirements of the International Financial Reporting Standards (IFRS) and the International Accounting Standards (IAS), issued by the International Accounting Standards Board (IASB), and the interpretations on their application developed by the IFRS Interpretation Committee (IFRIC) adopted by the European Union.

2.1. Basis for Preparation of the Annual Consolidated Financial Statements

The Group meets the criterion of a public interest entity and the current consolidated financial statements have been prepared in accordance with the International Accounting Standards, an issue of the International Accounting Standards Board, and adopted for application by the European Union.

As of June 30, 2021 IASs include the International Accounting Standards (IAS), the International Financial Reporting Standards (IFRSs), Interpretations of the Standing Interpretation Committee and Interpretations of the IFRS Interpretation Committee. The IAS Board reissues annually the standards and explanations thereof, which, after being formally approved by the European Union, are valid for the year for which they were issued. However, many of them are not applicable to the company's business because of the specific issues that are addressed in them.

2.2. Initial application of new and amended IFRSs in force for the current reporting period

The management of the Company has complied with all standards and explanations that are applicable to its activities and that have been officially accepted for application by the EU as of the date of preparation of these consolidated 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

The explanatory notes constitute an integral part of the attached consolidated financial statements.

Page 11 of 54

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ALLTERCO AD published this content on 30 August 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 31 August 2021 06:51:09 UTC.