1
AS OF MARCH 31, 2025 UIC 201047670
All amounts are in thousand Bulgarian leva unless otherwise stated
ASSETS | Note | March 31, 2025 | December 31, 2024 |
Non-current assets Property, plant and equipment | 3.01 | 2 169 | 2 200 |
Intangible assets | 3.02 | 14 126 | 13 358 |
Right-of-use assets | 3.03 | 10 594 | 11 026 |
Goodwill | 3.04 | 3 638 | 3 638 |
Investments in associates | 3.05 | 152 | 160 |
Deferred tax assets | 3.06 | 303 | 303 |
Total non-current assets | 30 982 | 30 685 | |
Current assets Inventory | 3.07 | 31 489 | 45 558 |
Trade receivables | 3.08 | 86 036 | 70 131 |
Other receivables | 3.09 | 4 404 | 6 879 |
Cash and cash equivalents | 3.10 | 32 712 | 27 353 |
Total current assets | 154 641 | 149 921 | |
TOTAL ASSETS | 185 623 | 180 606 | |
Date: May 14, 2025 |
Silviya Ivanova
Digitally signed by Silviya Ivanova Tomova
Prepared by:
Tomova
Date: 2025.05.14
09:56:14 +03'00'
Executive Director:
Dimitar
Stoyanov
Digitally signed by Dimitar Stoyanov Dimitrov
/Sylvia Ivanova Tomova/ /Dimitar Stoyanov Dimitrov/
Dimitrov
Date: 2025.05.14
19:55:55 +03'00'
AS OF MARCH 31, 2025 UIC 201047670
All amounts are in thousand Bulgarian leva unless otherwise stated
LIABILITIES | Note | March 31, 2025 | December 31, 2024 | ||
Non-current liabilities | |||||
Lease liabilities | 3.12 | 9 304 | 9 898 | ||
Retirement benefit obligations | 3.13 | 327 | 327 | ||
Total non-current liabilities | 9 631 | 10 225 | |||
Current liabilities Bank loans | 3.11 | 166 | 824 | ||
Lease liabilities | 3.12 | 1 558 | 1 361 | ||
Trade payables | 3.14 | 4 349 | 9 820 | ||
Payables to employees and social security | 3.15 | 2 029 | 2 367 | ||
Other liabilities | 3.16 | 7 894 | 7 332 | ||
Total current liabilities | 15 996 | 21 704 | |||
TOTAL LIABILITIES | 25 627 | 31 929 | |||
EQUITY | |||||
Share capital | 3.17 | 18 106 | 18 106 | ||
Retained earnings | 3.18 | 134 386 | 123 335 | ||
Legal reserves | 3.19 | 1 929 | 1 929 | ||
Premium reserve | 3.20 | 5 403 | 5 403 | ||
Reserves from revaluation of defined benefits plans | (88) | (88) |
Exchange differences from translation of foreign 839 522
subsidiaries' financial statements
Equity attributable to Parent Company's equityholder | |||
Non-controlling interest | (579) | (530) | |
TOTAL EQUITY | 159 996 | 148 677 | |
TOTAL EQUITY AND LIABILITIES | 185 623 | 180 606 | |
Date: May 14, 2025
Prepared by:
Tomova
Digitally signed by Silviya Ivanova Tomova Date: 2025.05.14
Silviya Ivanova
09:56:42 +03'00'
Executive Director:
Dimitar Stoyanov
Digitally signed by Dimitar Stoyanov Dimitrov
/Sylvia Ivanova Tomova/ /Dimitar Stoyanov Dimitrov/ Dimitrov
Date: 2025.05.14
19:56:10 +03'00'
All amounts are in thousand Bulgarian leva unless otherwise stated
Note For the 3 months ended December 31, 2025 For the 3 months ended December 31, 2024(reclassified)
Sales revenue | 4.01 | 51 759 | 40 164 |
Cost of sales | 4.01 | (24 456) | (17 860) |
Gross profit | 27 303 | 22 304 | |
Other operating income | 4.02 | 1 112 | 437 |
Sales expenses | 4.03 | (2 970) | (3 333) |
Administrative expenses | 4.04 | (10 392) | (8 258) |
Other operating expenses | 4.05 | (2 027) | (562) |
Profit from operating activity | 13 026 | 10 588 | |
Finance income | 4.06 | 7 | 3 |
Finance expense | 4.07 | (240) | (140) |
Share of associated companies' profit/(loss) | 3.05 | (8) | 5 |
Profit before tax | 12 785 | 10 456 | |
Income tax expense | 4.08 | (1 777) | (1 550) |
Net profit | 11 008 | 8 906 | |
Other comprehensive income: Items, that will not be reclassified to profit or loss |
Exchange differences from translation of foreign subsidiaries' financial statements
Other comprehensive income for the year after taxes317 (88)
317 (88)TOTAL COMPREHENSIVE INCOME FOR THE YEAR | 11 325 | 8 818 | ||
Net profit attributable to: Owners of the Parent Company | 11 051 | 8 990 | ||
Non-controlling interest | (43) | (84) | ||
Other comprehensive income attributable to: | ||||
Owners of the Parent Company | 317 | (88) | ||
Non-controlling interest | (6) | - | ||
Total comprehensive income attributable to: | ||||
Owners of the Parent Company | 11 368 | 8 902 | ||
Non-controlling interest | (49) | (84) | ||
Earnings per share | 4.09 | 0.61 | 0.49 |
Date: May 14, 2025
Ivanova Tomova
Silviya Ivanova Digitally signed by Silviya
Tomova
Date: 2025.05.14 09:57:25
Dimitar
Digitally signed by
Prepared by: +03'00' Executive Director:
Stoyanov
Dimitar Stoyanov Dimitrov
/Sylvia Ivanova Tomova/ /Dimitar Stoyanov Dimitrov/ Dimitrov
Date: 2025.05.14
19:56:23 +03'00'
The consolidated statement of comprehensive income shall be read together with the accompanying notes on pages 7-57. The notes are an integral part of these consolidated financial statements.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY SHELLY GROUP SE
FOR THE PERIOD ENDED MARCH 31, 2025 UIC 201047670
All amounts are in thousand Bulgarian leva unless otherwise stated
Share capital Retained Premium Legal earnings reserve reserves | Reserves from revaluation of defined benefits plans | Exchange differences from translation of foreign subsidiaries' financial statements | Non- Total Total controlling equity interests | ||||||
Balance at January 1, 2024 | 18 051 | 83 165 | 5 403 | 2 804 | 3 | 953 | 110 379 | (776) | 109 603 |
Total comprehensive income, net, incl. | - | 44 767 | - | (880) | (91) | (431) | 43 365 | 246 | 43 611 |
Net profit | - | 44 934 | - | - | - | - | 44 934 | (186) | 44 748 |
Other comprehensive income | - | (167) | - | (880) | (91) | (431) | (1 569) | 432 | (1 137) |
Exchange differences from translation of foreign subsidiaries' financial statements | - | - | - | - | - | (59) | (59) | (7) | (66) |
Actuarial gain (loss) | - | - | - | - | (100) | - | (100) | - | (100) |
Deferred tax | - | - | - | - | 9 | - | 9 | - | 9 |
- | (167) | - | (880) | - | (372) | (1 419) | 439 | (980) |
Effect of increase of controlling participation, net
Replenishment of reserve Capital increase | - 55 | (6) - | - - | 6 - | - - | - - | - 55 | - - | - 55 |
Dividend (BGN 0.25 (EUR 0.13) per share) | - | (4 590) | - | - | - | - | (4 590) | - | (4 590) |
Other adjustments | - | (1) | - | (1) | - | - | (2) | - | (2) |
Balance at December 31, 2024 | 18 106 | 123 335 | 5 403 | 1 929 | (88) | 522 | 149 207 | (530) | 148 677 |
Balance at January 1, 2025 | 18 106 | 123 335 | 5 403 | 1 929 | (88) | 522 | 149 207 | (530) | 148 677 |
Total comprehensive income, net, incl. | - | 11 051 | - | - | - | 317 | 11 368 | (49) | 11 319 |
Net profit | - | 11 051 | - | - | - | 11 051 | (43) | 11 008 | |
Other comprehensive income | - | - | - | - | - | 317 | 317 | (6) | 311 |
Exchange differences from translation of foreign subsidiaries' financial statements | - | - | - | - | - | 317 | 317 | (6) | 311 |
Balance at March 31, 2023 | 18 106 | 134 386 | 5 403 | 1 929 | (88) | 839 | 160 575 | (579) | 159 996 |
Date: May 14, 2025
Ivanova Tomova
Silviya Ivanova Digitally signed by Silviya
Dimitar
Digitally signed by Dimitar Stoyanov
Prepared by:
Tomova
Date: 2025.05.14 09:57:48
+03'00'
Executive Director:
Stoyanov
Dimitrov
Date: 2025.05.14
/Sylvia Ivanova Tomova/ /Dimitar Stoyanov Dimitrov/
Dimitrov
19:56:37 +03'00'
The consolidated statement of changes in equity shall be read together with the accompanying notes on pages 7-57. The notes are an integral part of these consolidated financial statements.
Page 5 from 57
Note | For 3 months ended March 31, 2024 | For 3 months ended March 31, 2023 | ||
Cash flows from operating activities | ||||
Proceeds from customers | 45 361 | 35 097 | ||
Payments to suppliers | (36 463) | (29 036) | ||
Taxes paid (recovered) | 4 704 | 343 | ||
Payments to employees and social security | (5 427) | (5 820) | ||
institutions | ||||
Bank fees | (85) | (4) | ||
Other payments, net | (18) | (177) | ||
Net cash flows from operating activities | 8 072 | 403 | ||
Cash flows from investing activities | ||||
Payments for acquisition of property, plant and | (1 348) | (790) | ||
equipment and intangible assets | ||||
Proceeds from the sale of investments | 312 | 178 | ||
Purchase of investments | (30) | (1 179) | ||
Net cash flows used in investing activities | (1 066) | (1 791) | ||
Cash flows from financing activities | ||||
Lease payments | (423) | (71) | ||
Loans received | 41 | 297 | ||
Loans repaid | (842) | (337) | ||
Cash flows related to interest and commissions | (4) | (7) | ||
Net cash flows used in financing activities | (1 228) | (118) | ||
Net increase/(decrease) in cash and cash equivalents for the year | 5 778 | (1 506) | ||
Net exchange differences | (419) | (48) | ||
Cash and cash equivalents at the beginning of the year | 27 353 | 30 778 | ||
Cash and cash equivalents at the end of the period | 3.10 | 32 712 | 29 224 | |
Date: May 14, 2025
Prepared by:
Tomova
Digitally signed by Silviya Ivanova Tomova Date: 2025.05.14
Silviya Ivanova
09:58:16 +03'00'
Executive Director:
Dimitar Stoyanov
Digitally signed by Dimitar Stoyanov Dimitrov
/Sylvia Ivanova Tomova/ /Dimitar Stoyanov Dimitrov/ Dimitrov
Date: 2025.05.14
19:56:52 +03'00'
The consolidated statement of cash flows shall be read together with the accompanying notes on pages 7-57. The notes are an integral part of these consolidated financial statements.
.
Page.6 from 57
C O N T E N T S
Contents
Information on the Group 9
Basis for preparation of the financial statements and material accounting policy information 11
Basis for preparation 11
Standards effective for the current reporting period 11
New standards and amendments to the existing IFRS accounting standards, issued by the IASB, but not yet adopted by the EU 11
Going concern 12
Functional and reporting currency 13
Comparative data 13
Transactions and balances 14
Accounting estimates and judgements 15
Subsidiaries and associated companies 15
Non-controlling interest 16
Consolidation 16
Definition and assessment of the items of the consolidated financial statements 16
Revenue 16
Expenses 18
Property, plant and equipment 18
Intangible assets 19
Goodwill 20
Investments in associated companies 21
Inventories 21
Financial instruments 22
Cash and cash equivalents 27
Lease 27
Provisions 28
Payables to employees 29
Share capital and reserves 30
Income tax expense 31
Earnings per share 31
Significant judgements in applying the Group's accounting policy 32
Fair values 33
Notes to the consolidated statement of financial position 35
Property, plant and equipment 35
Intangible assets 36
Right-of-use assets 36
Goodwill 37
Investments in associates 37
Deferred tax assets 38
Inventory 38
Trade receivables 39
Other receivables 39
Cash and cash equivalents 40
Bank loans 40
Lease liabilities 41
Retirement benefits obligation 41
Trade payables 41
Payables to employees and social security obligations 42
Other liabilities 42
Share capital 42
Retained earnings 43
Legal reserves 43
Share premium reserve 44
Notes to the consolidated statement of comprehensive income 44
Sales revenue and cost of sales 44
Other operating revenue 44
Sales expenses 44
Administrative expenses 45
Other operating expenses 45
Financial income 45
Financial expenses 45
Income tax expense 45
Earnings per share, net 46
Contingent liabilities and commitments 46
Related party transactions 47
Financial instruments by categories 47
Financial risk management 48
Fair values 56
Events after the end of the reporting period 57
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Information on the Group
-
Legal status
Shelly Group SE (The Parent company), Sofia, is entered in the Commercial Register of the Registry Agency with UIC (Unified Identification Code): 201047670 and LEI code 8945007IDGKD0KZ4HD95. The Parent Company is with seat and registered office in Bulgaria, 1407 Sofia, 51 Cherni Vrah Blvd., building 3, floor 2 and 3. The initial registered fixed capital is BGN 5 488 thousand. 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.
In June 2024, the capital was increased to BGN 18 105 559. The increase was addressed to employees of Shelly Group SE and its subsidiaries.
Since December 20216 the shares of Shelly Group SE are traded on the Bulgarian Stock Exchange and since November 22, 2021 the Parent company's shares are traded on the Frankfurt Stock Exchange.
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Ownership and management
The Shelly Group SE (the Group) includes Shelly Group SE (the Parent Company) and its subsidiaries as listed on the next page, in which the Parent Company has controlling interest directly. Shelly Group SE is a public company in Bulgaria under the Public Offering of Securities Act.
The distribution of the share capital of Shelly Group SE as of March 31, 2025, was as follows:
Name
Number of
shares:
% of the capital
Dimitar Dimitrov
5 478 120
30.26%
Svetlin Todorov
5 285 620
29.19%
Persons holding less than 5% of the capital
Other physical persons and legal entities
7 341 819
40.55%
Total
18 105 559
100.00%
The composition of the Board of Directors (BoD) as at March 31, 2025 is as follows:
Christoph Vilanek - 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 Parent Company jointly or separately.
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Scope of activities
The main scope of activity of Shelly Group SE 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.
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Group structure
As of 31.03.2025 and 31.12.2024, the Group includes Shelly Group SE and the following subsidiaries, in the country and abroad, which it controls.
Company name
31 March 2025
Percentage of participation
31 December 2024
Percentage of participation
In Bulgaria
Shelly Trading EOOD
100%
100%
Shelly Europe EOOD
100%
100%
31 March 2025
31 December 2024
Company name
Percentage of participation
Percentage of participation
Abroad
Shelly USA, USA
100%
100%
Shelly DACH GMBH, Germany
100%
100%
Shelly Tech d.o.o., Slovenia
76%
76%
Shelly Asia Ltd, China
80%
80%
On February 22, 2024, Shelly Group SE exercised its call option to acquire an additional 16% share of the capital of its subsidiary Slovenian IoT company Shelly Tech (formerly known as GOAP).
The total acquisition price of the 16% stake under the exercised Call option amounts to EUR 586,666.30, calculated in accordance with the terms of the Option Agreement. The remaining 24% of the company's shares held by three partners are subject to an additional Call/Put option that can be exercised in 2026 according to the agreed terms.
In 2024 the subsidiary opened a representative office in the Netherlands.
On May 31, 2024, the Parent company exercised its call option to acquire 50% in the associated company Shelly Asia ltd., (formerly known as Allterco Asia ltd.), and thus the ownership share reached 80%. The price paid for the newly acquired shares is EUR 520,000.
On September 26, 2024, the Parent company sold its subsidiary Shelly Properties EOOD.
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Legal status
-
Basis for preparation of the financial statements and material accounting policy information
-
Basis for preparation
The Group keeps its current accounting records 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 (EU).
As of March 31, 2025, IASs comprises the IFRS Accounting Standards as adopted by EU and the interpretations of the International Financial Reporting Interpretations Committee (IFRIC), approved by the IASB, and the International Accounting Standards and Interpretations of the Standing Interpretations Committee (SIC), approved by the International Accounting Standards Committee (IASC), effective from January 1, 2025, and adopted by the EU.
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Initial application of new and amended IFRS Accounting Standards
-
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 management has reviewed the changes in the existing accounting standards effective from January 1, 2025 and believes that they do not require changes in terms of the accounting policy applied in the current year.
At the date of preparation of these consolidated financial statements, the following new standards, issued by IASB and adopted by the EU are effective:
- Amendments to IAS 21: The Effects of Changes in Foreign Exchange Rates - Lack of Exchangeability (effective for annual periods beginning on or after 1 January 2025).
-
New standards and amendments to the existing IFRS accounting standards, issued by the IASB, but not yet adopted by the EU
At present, IFRS Accounting Standards as adopted by the EU do not significantly differ from regulations adopted by the 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 consolidated financial statements (the effective dates stated below is for IFRS Accounting Standards as issued by IASB):
- 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 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 by IASB indefinitely but earlier application permitted). Endorsement process postponed indefinitely until the research project on the equity method has been concluded.
- Amendments to IFRS 1, IFRS 7, IFRS 9, IFRS 10 and IAS 7 - Annual Improvements to IFRS Accounting Standards - Volume 11 - effective for annual periods beginning on or after 1 January 2026;
- Amendments to IFRS 9 and IFRS 7 - Amendments to the Classification and Measurement of Financial Instruments (effective for annual periods beginning on or after 1 January 2026);
- Amendments to IFRS 9 and IFRS 7 - Amendments to Contracts Referencing Nature-dependent Electricity (effective for annual periods beginning on or after 1 January 2026);
- IFRS 18 - Presentation and Disclosures in Financial Statements (effective for annual periods beginning on or after 1 January 2027);
-
IFRS 19 - Subsidiaries without Public Accountability: Disclosures (effective for annual periods beginning on or after 1 January 2027);
The Group anticipates that the adoption of these new standards and amendments to the existing standards will have no material impact on the consolidated financial statements of the Group in the period of initial application, except for IFRS 18 which is expected to have material impact on the presentation and disclosure of information in the financial statements. The Group is in process of analysing the specific impact of IFRS 18 on its consolidated financial statements.
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 consolidated financial statements, if applied as at the reporting date.
-
Standards effective for the current reporting period
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Going concern
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 continued during the reporting period, 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.
The military conflict in the Middle East is also not expected to affect the Group's results and financial situation.
Management has no plans or intentions to sell the business or cease operations, which could materially change the measurement 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 indicated in the relevant notes below.
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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 Shelly Group SE.
The 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 records 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 "finance 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 rate.
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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.
In order to achieve better comparability with the presentation of data for the current reporting period, the company has reclassified certain items from the comparative information for the previous comparable period (notes 4.02, 4.03, 4.04 and 4.05). Expenses related to marketing and advertising in the amount of BGN 226 thousand have been transferred from administrative expenses to sales expenses. Expenses related to training and travel in the amount of BGN 237 thousand have been transferred from other operating expenses to other administrative expenses. Income and expenses related to exchange rate differences in the first quarter of 2024 are presented as separate lines in notes 4.02 and 4.05. The reclassification does not affect the reported financial result for the comparable period of 2024.
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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:
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;
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
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, 2024 and March 31, 2025 are retranslated in these financial statements at the closing exchange of the BNB. As of March 31, 2025 - BGN 1.80844 for 1 USD; BGN 0.249335 for 1 CNY and BGN 1.95583 for 1 EUR, and as of December 31, 2024 - BGN 1.8826 for 1 USD; BGN 1.95583 for 1 EUR and BGN 0.257913 for 1 CNY.
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.
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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 consolidated financial statements. Actual results could differ from those presented in these consolidated financial statements.
In preparing these consolidated 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)
Short-term receivables - need for impairment (Note 3.08)
Retirement benefits obligations (Note 3.13)
Deferred tax assets (Note 3.06)
Warranty service provision (Note 3.16)
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Subsidiaries and associated companies
Subsidiaries are the entities over which Shelly Group SE 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.
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Non-controlling interest
The non-controlling interest is valued at the proportionate share of identifiable net assets at the date of acquisition.
Changes in the Group's ownership interests in subsidiaries that do not result in a loss of control are accounted for as equity transactions. The carrying amount of the Group's interests and non-controlling interests is adjusted to reflect changes in their relative interests in subsidiaries. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognized directly in equity and attributed to the owners of the Parent Company.
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Consolidation
The consolidated financial statements of the Group include the financial statements of the parent company and the subsidiaries. All assets, liabilities, capital, income, expenses and cash flows of the group companies are presented as such as they belong to just one entity.
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.
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Definition and assessment of the items of the consolidated financial statements
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Revenue
The Group recognises revenue from the following major sources:
Sale of electronic devicesRevenue 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 3.16).
For sales of electronic equipment to the wholesale market, revenue is recognised by the Group 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, and the Group expects to receive payment in the agreed term.
The Group recognizes revenue from sales through an online store at the time the goods are shipped to the address requested by the customer. The payment received from the customer is initially recognized as a contractual obligation until the goods are shipped to the customer.
Under the Group's standard contract terms, customers have a right of return within 14 days. In case of returned goods, the Group adjusts the recognized revenue by reducing it by the value of the returned goods. At the same time, the Group has an obligation to receive back the returned goods, if the customer decides to exercise its right to return the goods and accordingly reduces the cost of goods sold and increases its stock.
The Group uses historical experience to determine the expected value of returned goods in each calendar year. The method assumes that the Group does not expect, with a high probability, to receive returns of goods in amounts significantly exceeding the volume of returned goods in previous years, expressed as a percentage of revenue.
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.
The Group offers to its customers a subscription to cloud services. The subscription can be paid in monthly instalments or once for a calendar year. In the event that a customer pays an annual subscription, the entire amount is initially recognized as a contractual liability, and each month 1/12 of the amount paid is recognized as revenue.
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.
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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.Click or tap here to enter text.
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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 recognitionUpon 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 recognitionThe 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 Group applies the acquisition cost model.
Depreciation MethodsThe Group 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.
Derecognition of non-current tangible assetsThe 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.
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Intangible assets
Intangible assets are presented in the consolidated 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 prototypes and software development, 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 consolidated statement of comprehensive income.
Initial recognitionExternally 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) and professional fees arising directly from bringing the asset to its working condition; costs for testing whether the asset is functioning properly, expenses for fees of persons related to the project, non-refundable taxes, etc.
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.
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.
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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 measured in the consolidated financial statements as the excess of the sum of the consideration transferred over the amount of the net assets of the acquired company 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 for impairment 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.
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 expenses".
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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 March 31, 2025, the Group reports a share in the loss of associated companies amounting to BGN 8 thousand. The value of the investment indicated in the consolidated statement of financial position has been decreased by the same amount.
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Inventories
Inventories are accounted at the lower of the two following values: price for acquisition (cost) and net realizable value.
Net realizable value is the estimated selling price in the ordinary course of business less the estimated costs of completing the production cycle and the estimated costs necessary to make the sale. In the event that inventories have already been depreciated to net realizable value and in a subsequent accounting period it turns out that the conditions that led to their impairment are no longer present, their new net realizable value is assumed. The amount of the refund can only be up to the amount of the book value of the inventory before the impairment. The amount of the reversal of the inventory value is reported as a reduction in the cost of materials for the period in which the reversal occurs.
The costs incurred to bring an inventory to its present condition and location are included in the cost of acquisition (cost) as follows:
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.
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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 consolidated 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.
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 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.
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.
Impairment 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 2.9.16);
Trade and other receivables (Notes 3.08 and 3.09).
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.
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 in order to prepare an impairment assessment. The Group uses historical experience in order to determine 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).
Financial 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 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.
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.
Borrowings
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.
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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.
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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.
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.
If 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.
In 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.
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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.
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Payables to employees
Current payables to employees
Current payables to employees include liabilities for work already performed and the relevant social security contributions required by law.
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 labour for the past reporting period.
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.
- Share capital and reserves
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Revenue
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Basis for preparation
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.
Shelly Group SE 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 Shelly Group SE, the Group is obliged to allocate reserves at the expense of:
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). Redeemed 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 redeemed shares are presented directly in the Group's equity, under the "Redeemed 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.Attachments
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Shelly Group AD published this content on May 14, 2025, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on May 14, 2025 at 19:02 UTC.
