ASBISC ENTERPRISES PLC
REPORT AND CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
ASBISC ENTERPRISES PLC
REPORT AND CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
CONTENTS
PAGE
Officers and professional advisers
1
Declaration by the members of the Board of Directors and the Company officials responsible
for the drafting of the consolidated and separate financial statements
2
Management report
3 – 6
Independent Auditors’ report
7 – 14
Consolidated income statement
15
Consolidated statement of comprehensive income
16
Consolidated statement of financial position
17
Consolidated statement of changes in equity
18
Consolidated statement of cash flows
19
Parent Company statement of comprehensive income
20
Parent Company statement of financial position
21
Parent Company statement of changes in equity
22
Parent Company statement of cash flows
23
Notes to the financial statements
24 – 78
ASBISC ENTERPRISES PLC
1
OFFICERS AND PROFESSIONAL ADVISERS
Board of Directors
Siarhei Kostevitch (Cypriot)
Chairman and Chief Executive Officer
Marios Christou (Cypriot)
Chief Financial Officer
Constantinos Tziamalis (Cypriot)
Deputy Chief Executive Officer
Julia Prihodko (Ukrainian) (appointed on 7 May 2021)
Chief Human Relations Officer
Yuri Ulasovich (Cypriot) (resigned on 5 May 2021)
Demos Demou (Cypriot) (resigned on 5 May 2021)
Non-Executive Director
Tasos A.Panteli (Cypriot)
Non-Executive Director
Maria Petridou (Cypriot) (appointed on 29 March 2021)
Non-Executive Director
Secretary
Alfo Secretarial Limited
Limassol, Cyprus
Registered office
Independent auditors
KPMG Limited
Limassol, Cyprus
Legal adviser
Costas Tsirides & Co. Law Office
Limassol, Cyprus
Bankers
Tatrabanka a.s.
Všeobecná Uverová Banka a.s.
Raiffeisen Bank International AG
Bank of Cyprus Public Company Ltd
Global Supply Chain Finance Ltd
Barclays Bank Plc
Deutsche Bank Trust Company Americas
Alpha Bank Group
Tascombank JSC (formerly Bank Business Standard)
Ceskoslovenska Obchodni Banka, A.S
Société Générale Group
Mashereqbank Pcs
National Bank of Fujairah
Erste and Steiermaerkische Bank D.D
Fimbank Plc
First Ukrainian International bank
Joint-stock Company OTP Bank
OP Corporate Bank Plc
Unicredit Bulbank AD
ASBISC ENTERPRISES PLC
3
MANAGEMENT REPORT
FOR THE YEAR ENDED 31 DECEMBER 2021
The Directors present their annual report on the affairs of Asbisc Enterprises Plc (the “Company” or the “parent
Company”) and its subsidiaries (together with the Company, the “Group”) together with the Group’s and the
Company’s audited financial statements for the year ended 31 December 2021.
Principal activity
The principal activity of the Group and the Company continues to be the worldwide trading and distribution of
computer hardware and software.
Group financial statements
The consolidated financial statements include the financial statements of the Company and those of its subsidiary
companies. The names and more details about the subsidiaries are shown in note 10 to the financial statements.
Review of the development, financial performance and current position of the Group and the Company
and the description of its major risks and uncertainties
The Group’s and the Company’s development to date, financial results and position are presented in the financial
statements on pages 15 to 78.
The key performance and financial position figures are as follows:
(in thousands of US$)
In the year ended December 31, 2021 we have continued our strong growth trend observed in the previous year.
Following our strategy to focus more on profitability rather than on revenues, we have enjoyed a significant growth
in gross and net margins. We have managed to outperform the markets and competition and strengthen our market
position. Profitability has exceeded our expectations and cash flow has significantly improved.
The Group and the Company face the following major risks and uncertainties:
• competitive pressures in the marketplace it operates that may significantly affect gross and net margins
• national and international economic and geopolitical factors in note 35
• technological changes and other market trends
• financial and other risks as described in notes 32 and 33.
The Group has systems and procedures in place to maintain its expertise and keep it aware of changes in its
marketplace to help mitigate market risks. It also has rigorous controls to help mitigate financial and other risks.
These are described in note 32 to the financial statements.
Significant events after the end of the financial year
War between Ukraine and Russia and sanctions imposed on Russia
Following the commencement of the war between Ukraine and Russia, additional severe sanctions were imposed
by the United States of America, the European Union and some other countries on the Russian government, as well
as major financial institutions and certain other entities and individuals in Russia. In addition, restrictions have been
introduced on the supply of various goods and services to Russian entities. In response to the sanctions described
above, the Russian government has introduced certain currency control measures.
The Group
The Company
2021
2020
2021
2020
US$
US$
US$
US$
Revenue
3,077,976
2,366,441
2,205,401
1,896,200
Gross profit
218,528
138,285
84,842
42,915
Profit before tax
94,242
44,667
74,168
44,152
Taxation
(17,175)
(8,152)
(8,506)
(4,318)
Profit for the year
77,067
36,515
65,662
39,834
Earnings per share (US$ cents)
138,78
66.15
N/A
N/A
Total equity
189,464
135,638
135,576
91,691
Average number of employees
during the year
2,079
1,837
167
150
ASBISC ENTERPRISES PLC
4
MANAGEMENT REPORT (continued)
Despite the large geographical presence of the Group, it is not possible to totally weather the impact of a full-scale war
between these two countries. The Group -and the Company- is well prepared to defend its position and management
are taking the appropriate measures to mitigate the risks arising from this situation. However, the Company’s Directors
consider that the situation is critical and that it is premature to judge how it will evolve. We have a mutual
understanding with all our vendors and service providers that our partnerships will continue but we cannot warrant
that the current business can be retained due to the sanctions imposed on Russia. Already imposed and potential
future sanctions are likely to have an adverse effect on the Russian economy which -in turn- is likely to have a negative
impact on the Group’s sales. However, the financial effect is not possible to quantify at this point in time.
The Group and the Company’s Directors have evaluated the effect of the war on liquidity, currency, interest rate, and
credit risks, as well as potential impairment and revenue of the Group and the Company. Based on their assessment,
there is no significant impact on the Group’s and the Company's activities, except for credit risk and revenue.
Credit Risk
The sanctions imposed may have a direct impact on the ability of certain customers to repay the outstanding
receivables. The change in the ability of certain customers to repay the outstanding receivables may have an impact
on the Group and the Company. After the commencement of the war, the proportion of overdue receivables has not
changed significantly.
The negative impact mostly on the Ukrainian economy is also likely to increase the credit risk for many customers and
may result in additional amount of expected credit losses being recognized; however, the financial effect is not expected
to be significant, although currently this is not possible to quantify.
The current situation does not impact the Group’s and the Company's cash flows and the ability to use its available
financing lines.
Revenue
Less than 30% of the Group’s sales were generated from the Ukrainian and Russian markets. As a result of the war
and the imposed sanctions, the Group will no longer be able to maintain its operations at the same level as before in
Ukraine and Russia. Management expects to partially replace the drop-down in affected regional sales, by an increase
in the other markets where the Group has a presence (i.e., Kazakhstan, Slovakia, Poland, UAE etc.).
Therefore, the Group's and the Company’s Directors have implemented a strategy to respond to the newly arisen risks
to minimize their effect on the Group's performance.
These consolidated financial statements reflect the management’s current assessment of the impact of the Russian
and Ukrainian business environment on the operations and the financial position of the Group. The future business
environment may differ from today’s management’s assessment.
Existence of branches
The Company also operates through a warehouse in the Czech Republic.
Expected future developments of the Group and the Company
These are described in section above ‘significant events after the end of the financial year’.
Employees
During 2021 we have employed an average number of 2,079 employees, of whom 167 were employed by the Company
and the remainder in the rest of the Group’ s offices worldwide. The split of employees by area of activity is as follows:
As at 31 December
2021
2020
Sales and Marketing
1,093
954
Administration and IT
358
343
Finance
197
179
Logistics
431
361
Total
2,079
1,837
ASBISC ENTERPRISES PLC
5
MANAGEMENT REPORT (continued)
Research and Development
In 2021, the Group spent US$ 922(2020: US$ 1,031) on Research and Development, focusing on development of
tablets, small home appliances and other product lines that are sold under the Prestigio, Canyon and Perenio own
brands in all regions of the Company’s operations. The Group will continue to have research and development
expenditures to support the design and development of own brand products in order to maintain and enhance its
competitive position.
Dividends
Our dividend policy is to pay dividends at levels consistent with our growth and development plans, while maintaining
a reasonable level of liquidity. During the year, the following dividends were declared and paid by the Company:
• A final dividend of US$11,100,000 of US$ 0.20 per share for the year 2020
• An interim dividend of US$11,100,000 of US$ 0.20 per share for the year 2021
The Board of Directors also proposes the payment of a final dividend of US$ 0.100 per share for the year 2021,
amounting to US$ 5,500,000 based on improved 2021 profitability.
Share Capital
On 31 December 2021 the issued and fully paid up share capital of the Company consisted of 55,500,000 ordinary
shares of US$ 0.20 each. There were no changes in the share capital of the Company during the year and up to the
date of these financial statements.
Board of Directors
The members of the Board of Directors at 31 December 2021 and at the date of this report are set out on page 1.
They were all members of the Board of Directors throughout the year except Mr. Yuri Ulasovich who resigned on the
5
th
of May 2021, Mrs. Julia Prihodko, who was appointed on the 7
th
of May 2021 as an Executive Director and Mrs.
Maria Petridou, who was appointed on the 29
th
of March 2021 as a Non-Executive Director of the Company. There were
no significant changes in the assignment of the responsibilities of the members of the Board of Directors. The
remuneration of the members of the Board of Directors is disclosed in notes 5 and 28 to the financial statements.
In accordance with the Company's Articles of Association, Mrs. Julia Prihodko and Mr. Constantinos Tziamalis who are
subject to retirement by rotation, retire at the next annual general meeting of the Company and, being eligible, offer
themselves for re-election.
Corporate Governance
The Directors of the Company recognize the importance of corporate governance policies, practices and procedures.
Being listed on the Warsaw Stock Exchange in Poland, the Company follows the provisions of Corporate Governance
of the Warsaw Stock Exchange Code of Best Practices, to the extent practicable and appropriate for a public company
of the size of the Company. Those rules, information on their application and any deviation can be found on the
Company’s internet site for investors at http://investor.asbis.com and http://inwestor.asbis.pl.
The Board of the Company has two committees:
• the Audit Committee and
• the Remuneration Committee
The Remuneration Committee consists of the two non-executive Directors together with the Chairman. The Audit
Committee consists of the two non-executive Directors. More information on the composition and functions of the
committees is given in the corporate governance statement
ASBISC ENTERPRISES PLC
The notes on pages 24 to 78 form an integral part of these consolidated financial statements.
15
CONSOLIDATED INCOME STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2021
(in thousands of US$)
2021
2020
Note
US$
US$
Revenue
3
Cost of sales
(2,859,448 )
(2,228,156 )
Gross profit
Selling expenses
(62,286 )
(48,541 )
Administrative expenses
(42,493 )
(33,071 )
Profit from operations
Financial income
6
Financial expenses
6
(24,313 )
(16,708 )
Net finance costs
(19,687 )
(12,389 )
Other gains and losses
4
Share of profit of equity-accounted investees
11
Profit before tax
5
Taxation
7
(17,175 )
(8,152 )
Profit for the year
Attributable to:
Equity holders of the parent
Non-controlling interests
(2 )
US$ cents
US$ cents
Earnings per share
Basic and diluted from continuing operations 30
ASBISC ENTERPRISES PLC
The notes on pages 24 to 78 form an integral part of these consolidated financial statements.
16
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2021
(in thousands of US$)
2021
2020
US$
US$
Profit for the year
Other comprehensive (loss)/income:
Exchange difference on the translation of foreign operations
(1,764 )
Reclassification adjustments relating to foreign operations liquidated and
disposed of in the year
Other comprehensive (loss)/income for the year
(1,702 )
Total comprehensive income
Attributable to:
Equity holders of the parent
Non-controlling interests
ASBISC ENTERPRISES PLC
The notes on pages 24 to 78 form an integral part of these consolidated financial statements.
17
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2021
(in thousands of US$)
2021
2020
Notes
US$
US$
ASSETS
Non-current assets
Property, plant and equipment
8
Intangible assets
9
Equity-accounted investees
11
Goodwill
31
Deferred tax assets
21
Total non-current assets
Current assets
Inventories
13
Trade receivables
14
Other current assets
15
Derivative financial assets
26
Current taxation
7
Cash at bank and in hand
27
Total current assets
Total assets
EQUITY AND LIABILITIES
Equity
Share capital
16
Share premium
Retained earnings and other components of equity
Equity attributable to owners of the parent
Non-controlling interests
Total equity
Non-current liabilities
Long-term borrowings
18
Other long-term liabilities
19
Deferred tax liabilities
21
Total non-current liabilities
Current liabilities
Trade payables and prepayments
23
Trade payables factoring facilities
12
Other current liabilities
22
Short-term borrowings
17
Derivative financial liabilities
25
Current taxation
7
Total current liabilities
Total liabilities
Total equity and liabilities
Signed on behalf of the Board of Directors on 30 March 2022.
....................................
....................................
Siarhei Kostevitch
Marios Christou
Director
Director
ASBISC ENTERPRISES PLC
The notes on pages 24 to 78 form an integral part of these consolidated financial statements.
18
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2021
(in thousands of US$)
Attributable to the owners of the parent
Share
capital
Share
premium
Treasury
stock
Translation
of foreign
operations
Retained
earnings
Total
Non-
controlling
interests
Total
US$
US$
US$
US$
US$
US$
US$
US$
Balance at 1 January 2020
(176 )
(11,357 )
Total comprehensive income
Profit for the year
-
-
-
-
(2 )
Other comprehensive income for the year
-
-
-
-
Transactions with owners of the Company
Changes in ownership interests
Non-controlling interest on establishment of new subsidiary
-
-
-
-
-
-
Contributions and distributions
Final dividend declared (Note 34)
-
-
-
-
(9,684 )
(9,684 )
-
(9,684 )
Acquisition of treasury shares
-
-
(36 )
-
-
(36 )
-
(36 )
Balance at 31 December 2020
(212 )
(10,752 )
Total comprehensive income
Profit for the year
-
-
-
-
Other comprehensive loss for the year
-
-
-
(1,679 )
-
(1,679 )
(23 )
(1,702 )
Transactions with owners of the Company
Changes in ownership interests
Non-controlling interest on increase of the share capital of subsidiary
-
-
-
-
-
-
Disposal of non-controlling interest without a change in control
-
-
-
-
-
-
Elimination of minority interest at disposal
-
-
-
-
-
-
Contributions and distributions
Final dividend declared (Note 34)
-
-
-
-
(22,192 )
(22,192 )
-
(22,192 )
Treasury shares sold
-
-
-
-
Balance at 31 December 2021
(12,431 )
The retained earnings shown above at 31 December 2021 were readily distributable up to the amount of US$ 100,755 which represents the retained earnings of the Company. The remaining
amount in retained earnings of US$ 65,765 represents the earnings retained in the subsidiary companies of the Group. Share premium represents the difference between the issue price of
the shares of the Company and their nominal value. The share premium can only be resorted to for limited purposes, which do n ot include the distribution of dividends, and is otherwise
subject to the provisions of the Cyprus Companies Law, Cap. 113 on reduction of share capital. The translation reserve comprises all foreign currency differences from the translation of the
financial statements of foreign operations. Treasury stock represents the remaining balance of own shares bought back (note 16).
ASBISC ENTERPRISES PLC
The notes on pages 24 to 78 form an integral part of these consolidated financial statements.
19
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2021
(in thousands of US$)
2021
2020
Note
US$
US$
Profit for the year before tax
Adjustments for:
Exchange difference arising on consolidation
(580 )
Depreciation of property, plant and equipment
8
Amortization of intangible assets
9
Impairment loss on intangible assets
4
Provision for slow moving and obsolete stock
13
(604 )
Share of loss of equity-accounted investees
11
(6 )
Loss/(profit) from the sale of property, plant and equipment and intangible
assets
4
(24 )
Provision for bad debts and receivables written off
14
Bad debts recovered
4
(11 )
(24 )
Interest received
6
(146 )
(231 )
Interest paid
Operating profit before working capital changes
Increase in inventories
(46,400 )
(12,926 )
Increase in trade receivables
(56,770 )
(84,131 )
Decrease/(increase) in other current assets
(2,359 )
Increase in trade payables and prepayments
(Decrease)/increase in trade payables factoring facilities
(23,105 )
Increase in other current liabilities
Increase in other non-current liabilities
(Decrease)/increase in factoring creditors
(6,914 )
Cash inflows from operations
Interest paid
6
(5,660 )
(3,948 )
Taxation paid, net
7
(18,370 )
(4,750 )
Net cash inflows from operating activities
Cash flows from investing activities
Purchase of intangible assets
9
(694 )
(808 )
Purchase of property, plant and equipment
(13,284 )
(3,608 )
(Write-offs)/proceeds from sale of property, plant and equipment and
intangible assets
(11 )
Payments for purchase of investments in subsidiaries
(37 )
(594 )
Payments for purchase of investments in associates
(1,149 )
Interest received
6
Net cash outflows from investing activities
(15,029 )
(4,755 )
Cash flows from financing activities
Proceeds from/(acquisition of) treasury shares
(36 )
Payment of final dividend
(22,192 )
(9,684 )
(Repayments)/proceeds of long-term loans and long-term obligations
under finance lease
(2,882 )
Proceeds of short-term borrowings and short-term obligations under
finance lease
Net cash inflows/(outflows) from financing activities
(2,043 )
Net increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year
27
ASBISC ENTERPRISES PLC
The notes on pages 24 to 78 form an integral part of these consolidated financial statements.
20
PARENT COMPANY STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2021
(in thousands of US$)
2021
2020
Note
US$
US$
Revenue
3
2,205,401
1,896,200
Cost of sales
(2,120,559)
(1,853,285)
Gross profit
84,842
42,915
Selling expenses
(10,021)
(5,610)
Administrative expenses
(17,375)
(12,728)
Profit from operations
57,446
24,577
Financial income
6
2,844
2,404
Financial expenses
6
(5,673)
(4,737)
Net finance costs
(2,829)
(2,333)
Other gains and losses
4
19,545
21,908
Share of profit of equity-accounted investees
6
-
Profit before tax
5
74,168
44,152
Taxation
7
(8,506)
(4,318)
Profit for the year
65,662
39,834
Other comprehensive income for the year
-
-
Total comprehensive income for the year
65,662
39,834
ASBISC ENTERPRISES PLC
The notes on pages 24 to 78 form an integral part of these consolidated financial statements.
21
PARENT COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2021
(in thousands of US$)
2021
2020
Notes
US$
US$
ASSETS
Non-current assets
Property, plant and equipment
8
17,356
6,689
Intangible assets
9
1,312
1,872
Investment in subsidiary companies
10
18,211
16,446
Equity-accounted investees
1,749
821
Total non-current assets
38,628
25,828
Current assets
Inventories
13
102,287
112,045
Trade receivables
14
48,585
46,486
Other current assets
15
174,694
183,096
Derivative financial assets
26
164
164
Cash at bank and in hand
27
98,168
118,065
Total current assets
423,898
459,856
Total assets
462,526
485,684
EQUITY AND LIABILITIES
Equity
Share capital
16
11,100
11,100
Share premium
23,721
23,518
Retained earnings and other components of equity
100,755
57,073
Total equity
135,576
91,691
Non-current liabilities
Long-term borrowings
18
725
887
Deferred tax liabilities
21
275
232
Total non-current liabilities
1000
1,119
Current liabilities
Trade payables and prepayments
23
218,677
269,991
Trade payables factoring facilities
12
25,911
51,403
Other current liabilities
22
64,752
52,546
Short-term borrowings
17
13,444
15,057
Derivative financial liability
25
129
613
Current taxation
7
3,037
3,264
Total current liabilities
325,950
392,874
Total liabilities
326,950
393,993
Total equity and liabilities
462,526
485,684
The financial statements were approved by the Board on 30 March 2022.
....................................
....................................
Siarhei Kostevitch
Marios Christou
Director
Director
ASBISC ENTERPRISES PLC
The notes on pages 24 to 78 form an integral part of these consolidated financial statements.
22
PARENT COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2021
(in thousands of US$)
Share capital
Share
premium
Treasury
stock
Retained
earnings
Total
US$
US$
US$
US$
US$
Balance at 1 January 2020
11,100
23,518
(176)
27,134
61,576
Total comprehensive income
Profit for the year
-
-
-
39,835
39,835
Transactions with owners of the
Company
Contributions and distributions
Final dividend declared (Note 34)
-
-
-
(9,684)
(9,684)
Acquisition of treasury shares
-
-
(36)
-
(36)
Balance at 31 December 2020
11,100
23,518
(212)
57,285
91,691
Total comprehensive income
Profit for the year
-
-
-
65,662
65,662
Transactions with owners of the
Company
Contributions and distributions
Final dividend declared (Note 34)
-
-
-
(22,192)
(22,192)
Treasury shares sold
-
203
212
-
415
Balance at 31 December 2021
11,100
23,721
-
100,755
135,576
The retained earnings shown above at 31 December 2021 were readily distributable up to the amount of US$ 100,755
which represents the retained earnings of the Company. Share premium represents the difference between the issue
price of the shares and their nominal value. The share premium can only be resorted to for limited purposes, which do
not include the distribution of dividends, and is otherwise subject to the provisions of the Cyprus Companies Law, Cap.
113 on reduction of share capital.
Companies which do not distribute 70% of their profits after tax, as defined by the relevant Cyprus tax law, within two
years after the end of the relevant tax year, will be deemed to have distributed as dividends 70% of these profits.
Special contribution for defense at 17% is payable on such deemed dividends to the extent that the ultimate
shareholders (physical persons) are Cyprus domiciled tax residents. The amount of deemed distribution is reduced by
any actual dividends paid out of the profits of the relevant year at any time. This special contribution for defense is
payable by the Company for the account of the shareholders.
Dividends paid to non-Cyprus tax resident shareholders are not subject to withholding tax in Cyprus. Dividends paid to
Cyprus tax resident domiciled physical persons are subject to withholding tax at the above rates.
Treasury stock represents the remaining balance of own shares bought back (note 16).
ASBISC ENTERPRISES PLC
The notes on pages 24 to 78 form an integral part of these consolidated financial statements.
23
PARENT COMPANY STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2021
(in thousands of US$)
2021
2020
Note
US$
US$
Profit for the year before tax
74,168
44,153
Adjustments for:
Depreciation of property, plant and equipment
8
755
651
Amortization of intangible assets
9
959
826
Impairment loss on investments in subsidiaries
4
2,357
727
Profit from the sale of property, plant and equipment and intangible
assets
4
(24)
(41)
Provision for bad debts and receivables written off
1,859
(39)
Provision for slow moving and obsolete stock
13
(586)
783
Share of profit of equity-accounted investees
(6)
-
Dividend income
4
(12,251)
(15,210)
Interest received
6
(70)
(138)
Interest paid
139
348
Operating profit before working capital changes
67,300
32,060
Decrease in inventories
10,344
40,999
Increase trade receivables
(2,274)
(406)
Decrease/(increase) in other current assets
6,719
(70,317)
(Decrease)/increase in trade payables and prepayments
(51,314)
13,963
(Decrease)/increase in trade payables factoring facilities
(25,492)
22,297
Increase/(decrease) in other current liabilities
10,824
(503)
(Decrease)/increase in factoring creditors
(281)
4,633
Cash inflows from operations
15,826
42,726
Interest paid
6
(81)
(277)
Taxation paid, net
7
(8,691)
(1,478)
Net cash inflows from operating activities
7,054
40,971
Cash flows from investing activities
Purchase of intangible assets
9
(399)
(539)
Purchase of property, plant and equipment
8
(11,169)
(694)
Proceeds from sale of property, plant and equipment and intangible assets
24
41
Interest received
70
138
Dividends received
4
12,251
15,210
Proceeds/(acquisition) from/of treasury shares
418
(35)
Net increase in equity-accounted investees
(361)
(593)
Net increase in investment in subsidiary companies
(3,788)
(345)
Net cash (outflows)/inflows from investing activities
(2,954)
13,183
Cash flows from financing activities
Payment of final dividend
34
(22,192)
(9,684)
Repayments of long-term loans
(410)
(263)
Proceeds of short-term borrowings
(62)
16
Net cash outflows from financing activities
(22,664)
(9,931)
Net increase in cash and cash equivalents
(18,564)
44,222
Cash and cash equivalents at the beginning of the year
116,390
72,168
Cash and cash equivalents at the end of the year
27
97,826
116,390
ASBISC ENTERPRISES PLC
24
1. Incorporation and principal activities
limited liability. The Group’s and the Company’s principal activity is the trading and distribution of computer hardware
K.S. Holdings Limited, a Company incorporated in Cyprus . The details of the Company’s registered office are disclosed
on page 1.
The Company is listed on the Warsaw Stock Exchange since 30 October 2007.
2. Significant accounting policies
Changes in significant accounting policies
The accounting policies adopted for the preparation of these consolidated and separate financial statements for the
twelve months ended 31 December 2021 are consistent with those followed for the preparation of the annual financial
statements for the year 2020.
Statement of compliance
The financial statements have been prepared in accordance with International Financial Reporting Standards as
adopted by the European Union (“IFRS-EU”) and the requirements of the Cyprus Companies Law, Cap.113.
The financial statements were approved by the Board of Directors and authorized for issue on the 30
th
of March 2022.
Basis of preparation
The financial statements which are expressed in United States Dollars, the Group’s presentation and the Company’s
presentation and functional currency, have been prepared under the historical cost convention except for certain
financial instruments that are measured at fair value, as explained in the accounting policies below.
The financial statements are presented in US dollars (US$), and all values are presented in US$ thousand unless
otherwise stated.
Use of estimates and judgements
The preparation of financial statements in conformity with IFRS-EU requires the use of certain critical accounting
estimates and requires management to exercise its judgment in the process of applying the Group’s and the Company's
accounting policies. It also requires the use of assumptions that affect the reported amounts of assets and liabilities
and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Although these estimates are based on management's best
knowledge of current events and actions, actual results may ultimately differ from those estimates. Estimates and
underlying assumptions are reviewed on an ongoing basis; revisions to estimates are recognized prospectively.
Information about judgments made in applying accounting policies and the estimates and assumptions, that have a
significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial
year, are discussed in note 2 on pages 37 and 38.
Adoption of new and revised IFRSs and interpretations by the European Union (EU)
As from 1 January 2021, the Group and the Company adopted all changes to International Financial Reporting
Standards (IFRSs) as adopted by the EU, which are relevant to its operations. This adoption did not have a material
effect on the financial statements of the Group and the Company.
The following Standards, Amendments to Standards and Interpretations have been issued by the International
Accounting Standards Board (IASB) but are not yet effective for annual periods beginning on 1 January 2021. Those
which may be relevant to the Group and the Company are set out below. The Group and the Company does not plan
to adopt these Standards early.
ASBISC ENTERPRISES PLC
25
2. Significant accounting policies (continued)
(i) Standards and Interpretations adopted by the EU
•
Amendments to IFRS 3 Business Combinations; IAS 16 Property, Plant and Equipment; IAS 37 Provisions,
Contingent Liabilities and Contingent Assets; Annual Improvements 2018-2020 (All issued 14 May 2020)
(effective for annual periods beginning on or after 1 January 2022).
•
Amendments to IFRS 9, IAS 39 and IFRS17: Interest Rate Benchmark Reform - Phase 2 (issued on 27 August
2020) (effective for annual periods beginning on or after 1 January 2021).
(ii) Standards and Interpretations not adopted by the EU
•
Amendments to IAS 1 Presentation of Financial Statements: Classification of Liabilities as Current or Non-
current (issued on 23 January 2020) (effective for annual periods beginning on or after 1 January 2022).
•
Amendments to IFRS 3 Business Combinations; IAS 16 Property, Plant and Equipment; IAS 37 Provisions,
Contingent Liabilities and Contingent Assets; Annual Improvements 2018-2020 (All issued 14 May 2020)
(effective for annual periods beginning on or after 1 January 2022).
•
IFRS 10 (Amendments) and IAS 28 (Amendments) ''Sale or Contribution of Assets between an Investor and
its Associate or Joint Venture'' (effective date postponed indefinitely).
The Board of Directors expects that the adoption of these standards in future periods will not have a material effect
on the financial statements of the Group and the Company.
Basis of consolidation
The consolidated financial statements incorporate the financial statements of the Company and entities controlled by
the Company (its subsidiaries). The Group “controls” an entity when it is exposed to, or has rights to, variable returns
from its involvement with the entity and has the ability to affect those returns through its power over the entity. The
financial statements of subsidiaries are included in the consolidated financial statements from the date on which control
commences until the date on which control ceases.
Income and expenses of subsidiaries acquired or disposed of during the year are included in the consolidated statement
of comprehensive income from the effective date of acquisition and up to the effective date of disposal as appropriate.
Total comprehensive income of subsidiaries is attributed to the owners of the Company and to the non-controlling
interest even if this results in the non-controlling interest having a deficit balance.
Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies
in line with those used by the Group.
All intra-group transactions, balances, income and expenses are eliminated in full on consolidation. Unrealized gains
arising from transactions from equity-accounted investees are eliminated against the investment to the extent of the
Group’s interest in the investee. Unrealized losses are eliminated in the same way as unrealized gains, but only to the
extent that there is no evidence of impairment.
Business combinations
Acquisitions of subsidiaries and businesses are accounted for using the acquisition method. The consideration of each
acquisition is measured as the aggregate of the fair values (at the date of exchange) of assets given, liabilities incurred
or assumed, and equity instruments issued by the Group in exchange for control of the acquiree. Acquisition related
costs are recognized in profit or loss as incurred.
ASBISC ENTERPRISES PLC
26
2. Significant accounting policies (continued)
Where applicable, the consideration for the acquisition includes any asset or liability resulting from a contingent
consideration arrangement, measured at its acquisition date fair value. Subsequent changes in such fair values are
adjusted against the cost of acquisition where they qualify as measurement period adjustments. All other subsequent
changes in the fair value of contingent consideration classified as an asset or liability are accounted for in accordance
with relevant IFRSs. Changes in the fair value of contingent consideration classified as equity are not recognized.
The acquiree’s identifiable assets, liabilities and contingent liabilities that meet the conditions for recognition under
IFRS 3 are recognized at their fair value at the acquisition date, except that:
• deferred tax assets or liabilities and liabilities or assets related to employee benefit arrangements are
recognized and measured in accordance with IAS 12 Income Taxes and IAS 19 Employee Benefits respectively;
• liabilities or equity instruments related to the replacement by the Group of an acquiree’s share based payment
awards are measured in accordance with IFRS 2 Share based payment; and
• assets (or disposal groups) that are classified as held for sale in accordance with IFRS 5 Noncurrent Assets
Held for Sale and Discontinued Operations are measured in accordance with that Standard.
Non-controlling interests in subsidiaries are identified separately from the Group’s equity therein. The interests of non-
controlling shareholders may be initially measured either at fair value or at the non-controlling interests’ proportionate
share of the fair value of the acquiree’s identifiable net assets. The choice of measurement basis is made on an
acquisition-by-acquisition basis. Subsequent to acquisition, the carrying amount of non-controlling interests is the
amount of those interests at initial recognition plus the non-controlling interests’ share of subsequent changes in equity.
Total comprehensive income is attributed to non-controlling interests even if this results in the non-controlling interests
having a deficit balance.
Changes in the Group’s ownership interests in existing subsidiaries
Changes in the Group's ownership interests in subsidiaries that do not result in the Group losing control over the
subsidiaries are accounted for as equity transactions. The carrying amounts of the Group's interests and the
non-controlling interests are adjusted to reflect the changes in their relative interests in the 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 Company.
When the Group loses control of a subsidiary, it derecognizes the assets and liabilities of the subsidiary and any related
NCI and other components of equity. The profit or loss on disposal is calculated as the difference between:
(i) the aggregate of the fair value of the consideration received and the fair value of any retained interest and (ii) the
previous carrying amount of the assets (including goodwill), and liabilities of the subsidiary and any non-controlling
interests. Amounts previously recognized in other comprehensive income in relation to the subsidiary are accounted
for in the same manner as would be required if the relevant assets or liabilities were disposed of (i.e. reclassified to
profit or loss or transferred directly to retained earnings). The fair value of any investment retained in the former
subsidiary at the date when control is lost is regarded as the fair value on initial recognition for subsequent accounting
under IFRS 9 Financial Instruments or, when applicable, the cost on initial recognition of an investment in an associate
or jointly controlled entity.
Investments in subsidiary and associates
In the individual accounts of the Company, investments in subsidiary, associate and jointly controlled companies are
presented at cost less provision for impairment. The Group’s interests in equity-accounted investees comprise interests
in associates. Associates are those entities in which the Group has significant influence, but not control or joint control,
over the financial and operating policies. Significant influence is presumed to exist when the Group holds between 20%
and 50% of the voting power of another entity. Interest in associates is accounted for using the equity method and is
recognized initially at cost. The cost of the investment includes transaction costs.
The consolidated financial statements include the Group’s share of the profit or loss and other comprehensive income
of equity accounted investees from the date that significant influence commences until the date that significant
influence ceases. When the Group’s share of losses exceeds its interest in an equity-accounted investee, the carrying
amount of that interest including any long-term investments, is reduced to zero, and the recognition of further losses
is discontinued, except to the extent that the Group has an obligation or has made payments on behalf of the investee.
ASBISC ENTERPRISES PLC
27
2. Significant accounting policies (continued)
Goodwill
Goodwill arising in a business combination is recognized as an asset at the date that control is acquired (the acquisition
date). Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any
non-controlling interests in the acquiree, and the fair value of the acquirer’s previously held equity interest in the
acquiree (if any) over the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities
assumed.
If, after reassessment, the Group’s interest in the fair value of the acquiree’s identifiable net assets exceeds the sum
of the consideration transferred, the amount of any non-controlling interests in the acquiree and the fair value of the
acquirer’s previously held equity interest in the acquiree (if any), the excess is recognized immediately in profit or loss
as a bargain purchase gain.
For the purpose of impairment testing, goodwill is allocated to each of the Group’s cash-generating units expected to
benefit from the synergies of the combination.
Cash-generating units to which goodwill has been allocated are tested for impairment annually, or more frequently
when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is
less than its carrying amount, the impairment loss is allocated first to reduce the carrying amount of any goodwill
allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset
in the unit. An impairment loss recognized for goodwill is not reversed in a subsequent period.
On disposal of a subsidiary, the attributable amount of goodwill is included in the determination of the profit or loss on
disposal.
Segmental reporting
The Group is organized by geographical segments and this is the primary format for segmental reporting. Each
geographical segment is subject to risks and returns that are different from those of other segments.
Revenue recognition
The Group recognizes revenue mainly from the following major sources:
- Sale of goods
- Sale of optional warranties related to the aforementioned products
- Sale of software licenses
- Rendering of services
Revenue is measured based on the consideration to which the Group expects to be entitled in a contract with a
customer. The Group recognizes revenue when it transfers control of a product to a customer.
Sale of goods
The Group sells IT components and finished products mainly to small-medium businesses and retail market. Revenue
represents amounts invoiced to customers in respect of sales of goods during the year and is stated net of trade
discounts, rebates, customer returns and other similar allowances. Based on historical data and using the “most likely
amount” method, the expected returns for the year were of insignificant value. Therefore, a significant reversal of
revenue was not expected, and the effect of the returns was recorded as occurred.
Revenue from the sale of goods is recognized when the control of the product is transferred to the customer. The point
in time at which the control is transferred and the performance obligation is considered as satisfied, is decided based
on the incoterms of each sale of goods and also by considering the following indicators:
• the entity has a present right to payment for the asset
• the customer has legal title to the asset
• the entity has transferred physical possession of the asset
• the customer has the significant risks and rewards related to the ownership of the asset and
• the customer has accepted the asset.
ASBISC ENTERPRISES PLC
28
2. Significant accounting policies (continued)
More specifically, for each of the most used incoterms, revenue is recognized at the following point in time:
• Ex-works (EXW) - when the goods become available to the buyer
• Carriage-paid-to (CPT) – when the goods have been delivered to the carrier
• Carriage-and-insurance-paid-to (CIP) - when the goods have been delivered to the carrier
• Free carrier (FCA) - when the goods have been delivered to the carrier at the named place or point
Sale of optional warranties
The Group sells optional warranties only when the vendor offers this option. The Group enters into agreements with
purchasers of its goods to perform necessary repairs falling outside of the products standard warranty period. Since it
is the vendor that has the ultimate liability regarding the optional warranties sold, the performance obligation is
considered satisfied upon sale and the related revenue is recognized immediately
Sale of software licenses
The Group sells licenses only for software created by third parties. Software licenses are neither customized nor subject
to significant integration services by the Group. Since the Group only acts just as the distributor of the licenses, the
performance obligation is considered satisfied upon sale and the related revenue is recognized immediately.
Rendering of services
The Group provides mainly Value-Added Services (VAD) relating to the sale of IT components and finished products
when the vendor offers this option. The Group enters into fixed price maintenance contracts with its customers between
one and three years in length. Customers are required to pay in advance for each twelve-month service period and
the relevant payment due dates are specified in each contract. Since it is the vendor that has the ultimate liability
regarding the services sold, the performance obligation is considered satisfied upon sale and the related revenue is
recognized immediately.
Dividend and interest income
Dividend income from investments is recognized when the Company’s right to receive payment has been established.
Interest income is recognized when it is probable that the economic benefits will flow to the Group and the Company
and the amount of revenue can be measured reliably.
Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate
applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the
financial asset to that asset’s net carrying amount.
Borrowing costs
All borrowing costs are recognized in the income statement in the period in which they are incurred using the effective
interest method.
Employee benefits
Defined contribution pension plans
A defined contribution plan, the Employee Provident Fund, is a post-employment benefit plan under which the Company
pays fixed contributions into a separate entity and will have no legal or constructive obligation to pay further amounts.
The Company operates a defined contribution scheme, the assets of which are held in a separate trustee-administered
fund. Obligations for contributions to defined contribution pension plans are recognized as staff costs in the statement
of comprehensive income in the year during which services are rendered by employees.
Contributions to the Government Social Insurance Fund
The Group/Company and the employees contribute to the Government Social Insurance Fund at the prevailing statutory
rate which is applied on employees' salaries. The scheme is funded by payments from employees and by the
Group/Company. The Group’s/Company's contributions are expensed as incurred and are included in staff costs. The
Group/Company has no further payment obligations once the contributions have been paid. Prepaid contributions are
recognized as an asset to the extent that a cash refund or a reduction in the future payments is available.
ASBISC ENTERPRISES PLC
29
2. Significant accounting policies (continued)
Share-based payment transactions
The grant-date fair value of share-based payment awards granted to employees is recognized as an employee expense,
with a corresponding increase in equity, over the period that the employees become unconditionally entitled to the
awards. The amount recognized as an expense is adjusted to reflect the number of awards for which the related service
and non-market performance conditions are expected to be met, such that the amount ultimately recognized as an
expense is based on the number of awards that meet the related service and non-market performance conditions at
the vesting date. For share-based payment awards with non-vesting conditions, the grant-date fair value of the
share-based payment is measured to reflect such conditions and there is no true-up for differences between expected
and actual outcomes.
Foreign currencies
The individual financial statements of each Group entity are presented in the currency of the primary economic
environment in which the entity operates (its functional currency). For the purpose of the consolidated financial
statements, the results and financial position of each entity are expressed in United States Dollars (US$), which is the
functional currency of the Company and the presentation currency for both the consolidated and separate financial
statements.
In preparing the financial statements of the individual entities, transactions in currencies other than the entity’s
functional currency (foreign currencies) are recorded at the rates of exchange prevailing at the dates of the
transactions. At the end of each reporting period, monetary items denominated in foreign currencies are retranslated
at the rates prevailing at that date. Non-monetary items carried at fair value that are denominated in foreign currencies
are retranslated at the rates prevailing at the date when the fair value was determined. Non-monetary items are
measured in terms of historical cost in a foreign currency and are not retranslated.
Exchange differences are recognized in the profit and loss in the period in which they arise. For the purpose of
presenting consolidated financial statements, the assets and liabilities of the Group’s foreign operations are expressed
in United States Dollars using exchange rates prevailing at the end of the reporting period. Income and expense items
are translated at the average exchange rates for the period, unless exchange rates fluctuated significantly during the
period, in which case the exchange rates at the date of the transactions are used. Exchange differences arising, if any,
are recognized in other comprehensive income and accumulated in equity (attributed to non-controlling interests as
appropriate).
On the disposal of a foreign operation (i.e. a disposal of the Group’s entire interest in a foreign operation, or a disposal
involving loss of control over a subsidiary that includes a foreign operation, loss of joint control over a jointly controlled
entity that includes a foreign operation, or loss of significant influence over an associate that includes a foreign
operation), all of the accumulated exchange differences in respect of that operation attributable to the Group are
reclassified to profit or loss. Any exchange differences that have previously been attributed to non-controlling interests
are reclassified to other comprehensive income.
Goodwill and fair value adjustments arising on the acquisition of a foreign operation are treated as assets and liabilities
of the foreign operation and translated at the closing rate.
Tax
Income tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit reported in the
income statement because it excludes items of income or expenses that are taxable or deductible in other years and
it further excludes items that are never taxable or deductible. The Group’s liability for current tax is calculated using
the tax rates that have been enacted or substantively enacted by the end of the reporting period.
Deferred tax
Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities in the
financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities
are generally recognized for all taxable temporary differences, and deferred tax assets are generally recognized for all
deductible temporary differences to the extent that it is probable that taxable profits will be available against which
those deductible temporary differences can be utilized. Such deferred tax assets and liabilities are not recognized if
the temporary differences arise from goodwill or from the initial recognition (other than in a business combination) of
other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.
ASBISC ENTERPRISES PLC
30
2. Significant accounting policies (continued)
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent
that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be
recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the
liability is settled or the asset realized, based on tax rates (and tax laws) that have been enacted or substantially
enacted by the end of the reporting period. The measurement of deferred tax liabilities and assets reflects the tax
consequences that would follow from the manner in which the Group expects, at the end of the reporting period, to
recover or settle the carrying amount of its assets and liabilities.
Deferred tax assets and liabilities are offset when there is legally enforceable right to set off current tax assets against
current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Group intends
to settle its current tax assets and liabilities on a net basis.
Current and deferred tax for the period
Current and deferred tax are recognized as an expense or income in profit or loss, except when they relate to items
that are recognized in other comprehensive income, in which case the tax is also recognized in equity.
Dividend distribution
Dividend distribution to the shareholders is recognized in the financial statements in the year in which dividends are
declared.
Property, plant and equipment
Property, plant and equipment are carried at cost less accumulated depreciation and any accumulated impairment
losses.
Properties in the course of construction for production, rental or administrative purposes, are carried at cost less any
recognized impairment loss. Such properties are classified to the appropriate categories of property, plant and
equipment when completed and are ready for their intended use. Depreciation of these assets, on the same basis as
other property assets, commences when the assets are ready for their intended use.
Depreciation is provided at rates calculated to write off the cost less the estimated residual value of property, plant
and equipment (other than freehold land and properties under construction) on a straight-line basis over their
estimated useful economic lives as follows:
Leasehold property
Over the remaining period of the right for usage of the land
Buildings
46 - 100 years
Computer hardware
5 years
Warehouse machinery
3 - 5 years
Motor vehicles
5 years
Furniture, fittings and office equipment
10 years
No depreciation is provided on land.
An item of property, plant and equipment is derecognized upon disposal or when no future economic benefits are
expected to arise from the continued use of the asset.
The gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the
difference between the sale proceeds and the carrying amount of the asset and is recognized in the profit and loss
when the asset is disposed.
The estimated useful life and depreciation method are reviewed at the end of each annual reporting period, with the
effect of any changes in estimate being accounted for on a prospective basis.
ASBISC ENTERPRISES PLC
31
2. Significant accounting policies (continued)
Intangible assets
Intangible assets consist of computer software, patents and licenses which are stated at cost less accumulated
amortization and accumulated impairment losses. Amortization is provided at rates calculated to write off the cost less
the estimated residual value of the assets using the straight-line method as follows:
Computer software
3 - 10 years
Patents and licenses
3 years
The estimated useful life and amortization method are reviewed at the end of each reporting period, with the effect of
any changes in estimate being accounted for on a prospective basis.
An intangible asset is derecognized on disposal, or when no future economic benefits are expected from use. Gains or
losses arising from derecognition of an intangible asset, measured as the difference between the net disposal proceeds
and the carrying amount of the asset, and are recognized in profit or loss when the asset is derecognized.
Repairs and maintenance
Expenditure for repairs and maintenance of property, plant and equipment and costs associated with maintenance of
computer software programs are recognized as an expense as incurred.
Impairment of tangible and intangible assets excluding goodwill
At the end of each reporting period, the Group and the Company reviews the carrying amounts of its tangible and
intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If
any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the
impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the Group
and the Company estimates the recoverable amount of the cash-generating unit to which the asset belongs. Where a
reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to individual
cash-generating units, or otherwise they are allocated to the smallest Group of cash-generating units for which a
reasonable and consistent basis of allocation is identified.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the
estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current
market assessments of the time value of money and the risks specific to the asset for which the estimated of future
cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the
carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is
recognized immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the
impairment loss is treated as a revaluation decrease.
Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is
increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed
the carrying amount that would have been determined had no impairment loss been recognized for the asset (or
cash-generating unit) in prior years. A reversal of an impairment loss is recognized immediately in profit or loss, unless
the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a
revaluation increase.
Financial instruments
Financial assets and financial liabilities are recognized when a Group entity becomes a party to the contractual
provisions of the instrument.
Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable
to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities
at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial
liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial
assets or financial liabilities at fair value through profit or loss are recognized immediately in profit or loss.
ASBISC ENTERPRISES PLC
32
2. Significant accounting policies (continued)
Financial assets
All regular way purchases or sales of financial assets are recognized and derecognized on a trade date basis. Regular
way purchases or sales are purchases or sales of financial assets that require delivery of assets within the time frame
established by regulation or convention in the marketplace.
All recognized financial assets are measured subsequently in their entirety at either amortized cost or fair value,
depending on the classification of the financial assets.
(i)
Classification and subsequent measurement
On initial recognition, a financial asset is classified as measured at: amortized cost; Fair Value through Other
Comprehensive Income – debt investment; Fair Value through Other Comprehensive Income – equity investment; or
Fair value through profit or loss.
Financial assets are not reclassified subsequent to their initial recognition unless the Group changes its business model
for managing financial assets, in which case all affected financial assets are reclassified on the first day of the first
reporting period following the change in the business model.
•
Financial assets at FVTPL
These assets are subsequently measured at fair value. Net gains and losses, including any interest or dividend income,
are recognized in profit or loss.
•
Financial assets at amortized cost
These assets are subsequently measured at amortized cost using the effective interest method. The amortized cost is
reduced by impairment losses. Interest income, foreign exchange gains and losses and impairment are recognized in
profit or loss. Any gain or loss on derecognition is recognized in profit or loss. Financial assets at amortized cost
comprise of the following:
Trade receivables including factored trade receivables
The Group enters into various invoice discounting agreements with factoring companies from which a percentage of
approved invoices are collected in advance. The invoices which are given for collection in advance are with recourse
and included within trade receivables, whereas the amount collected from the factoring Company is presented in the
statement of financial position under current liabilities until the date of settlement by the debtors. Factoring expenses
are charged to the statement of comprehensive income.
Loans granted
Loans granted by the Company to the borrower are categorized as loans. All loans are recognized when cash is
advanced to the borrower.
Cash and cash equivalents
The Group considers all short-term highly liquid instruments with maturities of 3 months or less which are subject to
insignificant risk of changes in value to be cash equivalents.
•
Debt investments at FVOCI
These assets are subsequently measured at fair value. Interest income calculated using the effective interest method,
foreign exchange gains and losses and impairment are recognized in profit or loss. Other net gains and losses are
recognized in OCI. On derecognition, gains and losses accumulated in OCI are reclassified to profit or loss.
•
Equity investments at FVOCI
These assets are subsequently measured at fair value. Dividends are recognized as income in profit or loss unless the
dividend clearly represents a recovery of part of the cost of the investment. Other net gains and losses are recognized
in OCI and are never reclassified to profit or loss.
ASBISC ENTERPRISES PLC
33
2. Significant accounting policies (continued)
(ii)
Derecognition
The Group derecognises a financial asset when the contractual rights to the cash flows from the financial asset expire,
or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and
rewards of ownership of the financial asset are transferred or in which the Group neither transfers nor retains
substantially all of the risks and rewards of ownership and it does not retain control of the financial assets.
The Group enters into transactions whereby it transfers assets recognized in its statement of financial position but
retains either all or substantially all of the risks and rewards of the transferred assets. In these cases, the transferred
assets are not derecognized.
Financial liabilities
(i)
Classification and subsequent measurement
Financial liabilities are classified as measured at amortized cost or FVTPL. A financial liability is classified as at FVTPL if
it is classified as held-for-trading, it is a derivative or it is designated as such on initial recognition. Financial liabilities
at FVTPL are measured at fair value and net gains and losses, including any interest expense, are recognized in profit
or loss. Other financial liabilities are subsequently measured at amortized cost using the effective interest method.
Interest expense and foreign exchange gains and losses are recognized in profit or loss. Any gain or loss on
derecognition is also recognized in profit or loss.
Financial guarantee contracts
A financial guarantee contract is a contract that requires the issuer to make specified payments to reimburse the holder
for a loss it incurs because a specified debtor fails to make payments when due in accordance with the terms of a debt
instrument.
Financial guarantee contracts issued by the Company/Group are accounted for and measured initially at their fair
values, and subsequently measured at the higher of:
• the amount of the obligation under the contract, as determined in accordance with IAS 37 Provisions,
Contingent Liabilities and Contingent Assets and
• the amount initially recognized less, where appropriate, cumulative amortization recognized in accordance
with the revenue recognition policies as set out below.
As at each reporting date presented in these financial statements, the Company participates in financial guarantee
contracts and provide financial guarantees to its subsidiaries.
To be classified as a financial guarantee contract, a contract needs to comply with all of the following conditions:
• The reference obligation is a debt instrument.
• The holder is compensated only for a loss that it incurs.
• The contract does not compensate the holder for more than the actual loss that it incurs.
Financial guarantee contract in the scope of IFRS 9 is initially recognized at fair value. If the financial guarantee contract
was issued in a stand-alone arm’s length transaction to an unrelated party, then its fair value at inception is considered
to be equal to the premium received unless there is evidence to the contrary.
In the case of a guarantee provided by the Company over the liability of a subsidiary, when no consideration is or will
be received, the Company recognize a liability in its financial statements for the fair value of the guarantee at the date
of granting the financial guarantee and the respective increase in the cost of the investment in subsidiary.
Subsequently, all financial guarantee contracts mentioned above are measured at the higher of:
• the amount of the loss allowance determined in accordance with IFRS 9 over the loan balance as at reporting
date; and
• the amount initially recognized less, when appropriate, the cumulative amount of income recognized in
accordance with the principles of IFRS 15.
ASBISC ENTERPRISES PLC
34
2. Significant accounting policies (continued)
Fee income recognized in accordance with the principles of IFRS 15 is posted within “finance income” caption of
statement of profit and loss and other comprehensive income.
Any gain or loss caused by remeasurement of guarantee liabilities is posted through respective “finance income” and
“finance expenses” captions of statement of profit and loss and other comprehensive income.
Bank borrowings
Interest-bearing bank loans and overdrafts are recorded at the proceeds received, net of direct issue costs. Finance
charges, including premiums payable on settlement or redemption and direct issue costs, are accounted for on an
accrual basis to the income statement using the effective interest method and are added to the carrying amount of
the instrument to the extent that they are not settled in the period in which they arise.
(ii)
Derecognition
The Group derecognizes a financial liability when its contractual obligations are discharged or cancelled or expire. The
Group also derecognizes a financial liability when its terms are modified and the cash flows of the modified liability are
substantially different, in which case a new financial liability based on the modified terms is recognized at fair value.
On derecognition of a financial liability, the difference between the carrying amount extinguished and the consideration
paid (including any non-cash assets transferred or liabilities assumed) is recognized in profit or loss.
Effective interest method
The effective interest method is a method of calculating the amortized cost of a financial asset or liability and allocating
interest income or expense over the relevant period. The effective interest rate is the rate that exactly discounts
estimated future cash flows (including all fees on points paid or received that form an integral part of the effective
interest rate, transaction costs and other premiums or discounts) through the expected life of the financial asset or
liability, or, where appropriate, a shorter period.
Inventories
Inventories comprise IT products (components and finished products) which are stated at the lower of cost and net
realizable value. Cost is determined on the basis of standard cost method for the price protected stock items and on
the weighted average cost method for the non-price protected stock items and comprises the cost of acquisition plus
any other costs that are incurred to bring the stock items to their present location and condition. Net realizable value
represents the estimated selling price for inventories less all cost necessary to make the sale.
Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of
its liabilities. Equity instruments issued by the Group are recorded at the proceeds received, net of direct issue costs.
Repurchase of the Company’s own equity instruments is recognized and deducted directly in equity. No gain or loss is
recognized in profit or loss on the purchase, sale, issue or cancellation of the Company’s own equity instruments.
Provisions
A provision is recognized in the statement of financial position when the Company/Group has a legal or constructive
present obligation as a result of a past event, it is probable that an outflow of economic benefits will be required to
settle the obligation, and a reliable estimate can be made of the amount of the obligation.
The amount recognized as a provision is the best estimate of the consideration required to settle the present obligation
at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. Where a
provision is measured using the cash flow estimated to settle the present obligation, its carrying amount is the present
value of those cash flows.
When some or all of the economic benefits required to settle a provision are expected to be recovered from a third
party, the receivable is recognized as an asset if it is virtually certain that the reimbursement will be received and the
amount of the receivable can be measured reliably.
ASBISC ENTERPRISES PLC
35
2. Significant accounting policies (continued)
Warranties
Provisions for the expected cost of warranty are recognized at the date of sale of the relevant products, at the Directors’
best estimate of the expenditure required to settle the Company’s/Group’s obligations.
Marketing
Provisions for the expected cost of marketing activities are recognized based on purchase of products, cost of goods
sold and other various vendors rebates depending on turnover and marketing strategy. Marketing provisions are mainly
used to support promotional and advertising related activities.
Impairment
Financial assets
The Group uses 'expected credit loss' (ECL) model. This impairment model applies to financial assets measured at
amortized cost, contract assets and debt instruments at FVOCI but not to investments in equity instruments. ECLs are
based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows
that the Group expects to receive, discounted at an approximation of the original effective interest rate. The expected
cash flows will include cash flows from the sale of collateral held or other credit enhancements that are integral to the
contractual terms.
The Group recognizes loss allowances for ECLs on financial assets measured at amortized cost.
ECLs are recognized in two stages. For credit exposures for which there has not been a significant increase in credit
risk since initial recognition, ECLs are provided for credit losses that result from default events that are possible within
the next 12-months (a 12-month ECL). For those credit exposures for which there has been a significant increase in
credit risk since initial recognition, a loss allowance is required for credit losses expected over the remaining life of the
exposure, irrespective of the timing of the default (a lifetime ECL) due.
For trade receivables and contract assets, the Group applies a simplified approach in calculating ECLs. Therefore, the
Group does not track changes in credit risk, but instead recognizes a loss allowance based on lifetime ECLs at each
reporting date. The Group has established a provision matrix that is based on its historical credit loss experience,
adjusted for forward-looking factors specific to the debtors and the economic environment.
An impairment loss is calculated as the difference between an asset’s carrying amount and the present value of the
estimated future cash flows discounted at the asset’s original effective interest rate. Losses are recognized in profit or
loss. When the Group considers that there are no realistic prospects of recovery of the asset, the relevant amounts are
written off. If the amount of impairment loss subsequently decreases and the decrease can be related objectively to
an event occurring after the impairment was recognized, then the previously recognized impairment loss is reversed
through profit or loss.
Loss allowances for financial assets measured at amortized cost are deducted from the gross carrying amount of the
assets.
Non-financial assets
At each reporting date, the Group reviews the carrying amounts of its non-financial assets to determine whether there
is any indication that those assets have suffered an impairment loss. An impairment loss is recognized if the carrying
amount of an asset or cash-generating unit (CGU) exceeds its recoverable amount. Where it is not possible to estimate
the recoverable amount of an individual asset, the Group estimates the recoverable amount of the CGU to which the
asset belongs. Goodwill is tested annually for impairment.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the
estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current
market assessments of the time value of money and the risks specific to the asset.
ASBISC ENTERPRISES PLC
36
2. Significant accounting policies (continued)
If the recoverable amount of an asset (or CGU) is estimated to be less than its carrying amount, the carrying amount
of the asset (CGU) is reduced to its recoverable amount. An impairment loss is recognized immediately in profit or loss,
unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation
decrease.
Where an impairment loss subsequently reverses, the carrying amount of the asset (CGU) is increased to the revised
estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount
that would have been determined had no impairment loss been recognized for the asset (CGU) in prior years. A reversal
of an impairment loss is recognized immediately in profit or loss, unless the relevant asset is carried at a revalued
amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
Leases
At inception or on reassessment of a contract that contains a lease component, the Group and the Company allocates
the consideration in the contract to each lease and non-lease component on the basis of their relative stand-alone
prices. However, for leases of properties in which it is a lessee, the Group and the Company elected not to separate
components and will instead account for the lease and non-lease components as a single lease component.
The Group and the Company leases land and buildings and motor vehicles. As a lessee, the Group and the
Company previously classified leases as operating or finance leased based on its assessment of whether the lease
transferred substantially all the risks and rewards of ownership. Under IFRS 16, the Group and the Company recognizes
right-of-use assets and lease liabilities for most leases – i.e. these leases are on balance sheet. The Group and the
Company presents lease liabilities in ‘long-term borrowings’ and ‘short-term borrowings’ in the statements of financial
position.
The Group recognizes a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset
is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments
made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle
and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease
incentives received.
The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the
end of the lease term, unless the lease transfers ownership of the underlying asset to the Group/Company by the end
of the lease term or the cost of the right-of-use asset reflects that the Group/Company will exercise a purchase option.
In that case the right-of-use asset will be depreciated over the useful life of the underlying asset, which is determined
on the same basis as those of property and equipment. In addition, the right-of-use asset is periodically reduced by
impairment losses, if any, and adjusted for certain remeasurements of the lease liability.
The lease liability is initially measured at the present value of the lease payments that are not paid at the
commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily
determined, the Group’s incremental borrowing rate. Generally, the Group uses its incremental borrowing rate as the
discount rate.
The Group determines its incremental borrowing rate by obtaining interest rates from various external financing sources
and makes certain adjustments to reflect the terms of the lease and type of the asset leased.
Lease payments included in the measurement of the lease liability comprise the following:
• fixed payments, including in-substance fixed payments;
• variable lease payments that depend on an index or a rate, initially measured using the index or rate as at
the commencement date;
• amounts expected to be payable under a residual value guarantee; and
• the exercise price under a purchase option that the Group/Company is reasonably certain to exercise, lease
payments in an optional renewal period if the Group/Company is reasonably certain to exercise an extension
option, and penalties for early termination of a lease unless the Group/Company is reasonably certain not to
terminate early.
ASBISC ENTERPRISES PLC
37
2. Significant accounting policies (continued)
The lease liability is measured at amortized cost using the effective interest method. It is remeasured when there is a
change in future lease payments arising from a change in an index or rate, if there is a change in the Group/Company’s
estimate of the amount expected to be payable under a residual value guarantee, if the Group/Company changes its
assessment of whether it will exercise a purchase, extension or termination option or if there is a revised in-substance
fixed lease payment.
When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the
right-of-use asset or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to
zero.
Non-recoverable VAT is excluded from lease accounting as VAT payments are not made to lessor in exchange for the
right to use an underlying asset. Instead, they are levies imposed by the government and are in the scope of IFRIC 21
(Levies) and are recognized when they are due under the tax law (when the invoice is issued). They are expensed in
Statement of profit or loss and other comprehensive income immediately at the moment they are recognized.
Short-term leases and leases of low-value assets
The Group/Company has elected not to recognize right-of-use assets and lease liabilities for leases of low-value assets
and short-term leases. The Group/Company recognizes the lease payments associated with these leases as an expense
on a straight-line basis over the lease term.
Critical judgements in applying the entity’s accounting policies and key sources of estimation
uncertainty
The preparation of financial statements in conformity with IFRSs requires the use of certain critical accounting estimates
and requires management to exercise its judgement in the process of applying the Group’s accounting policies. It also
requires the use of assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during
the reporting period. Although these estimates are based on management’s best knowledge of current events and
actions, actual results may ultimately differ from those estimates. The estimates and assumptions, that have a
significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial
year, are discussed below:
Revenue recognition
In making its judgment, management considered the detailed criteria for the recognition of revenue from the sale of
goods as set out in IFRS 15 Revenue from Contracts with Customers and, in particular, whether the Company/Group
had transferred to the buyer the significant risks and rewards of ownership of the goods. The timing of the transfer of
control is decided based on related incoterms. The management is satisfied that the significant risks and rewards have
been transferred and the recognition of the revenue in the current year is appropriate.
Provision for bad and doubtful debts
The Company/Group reviews its trade and other receivables for evidence of their recoverability. Such evidence includes
the customer’s payment record, the customer’s overall financial position and expected recovery from credit insurance.
If indications of non-recoverability exist, the recoverable amount is estimated and a respective provision for bad and
doubtful debts is made. The amount of the provision is charged through the income statement. The review of credit
risk is continuous and the methodology and assumptions used for estimating the provision are reviewed regularly and
adjusted accordingly.
Calculation of loss allowance
When measuring ECL the Group uses reasonable and supportable forward-looking information, which is based on
assumptions for the future movement of different economic drivers and how these drivers will affect each other. Loss
given default is an estimate of the loss arising on default. It is based on the difference between the contractual cash
flows due and those that the lender would expect to receive, taking into account cash flows from collateral and integral
credit enhancements.
ASBISC ENTERPRISES PLC
38
2. Significant accounting policies (continued)
Probability of default constitutes a key input in measuring ECL. Probability of default is an estimate of the likelihood of
default over a given time horizon, the calculation of which includes historical data, assumptions and expectations of
future conditions. Loss rates are calculated separately for exposures in different segments which share common credit
risk characteristics and are based on actual credit loss experience over the past four years. Significant customers, if
any, are assessed individually.
Provision for obsolete and slow-moving inventory
The Company/Group reviews its inventory records for evidence regarding the salability of inventory and its net
realizable value on disposal. The provision for obsolete and slow-moving inventory is based on management’s past
experience, taking into consideration arrangements with suppliers for price protection and for returning defective stock;
the value of inventory as well as the movement and the level of stock of each category of inventory.
Any change in the amount of provision is recognized in the income statement. The review of the net realizable value
of the inventory is continuous and the methodology and assumptions used for estimating the provision for obsolete
and slow-moving inventory are reviewed regularly and adjusted accordingly.
Impairment of investments in subsidiaries, associated and jointly controlled enterprises
The Group and Company periodically evaluates the recoverability of investments in subsidiaries, associates and jointly
controlled enterprises/jointly controlled enterprises whenever indicators of impairment are present. Indicators of
impairment include such items as declines in revenues, earnings or cash flows or material adverse changes in the
economic or political stability of a particular country, which may indicate that the carrying amount of an asset is not
recoverable. If facts and circumstances indicate that the investment in subsidiaries/associates/jointly controlled
enterprises may be impaired, the estimated future undiscounted cash flows associated with these entities would be
compared to their carrying amounts to determine if a write-down to fair value is necessary.
Warranty provisions
Warranty provisions represent the Company’s/Group’s best estimate of the liability as a result of the warranties granted
on certain products and is based on past experience and industry averages for defective products.
Income taxes
Significant judgment is required in determining the provision for income taxes. There are transactions and calculations
for which the ultimate tax determination is uncertain during the ordinary course of business. The Company/Group
recognizes liabilities for anticipated tax audit issues based on estimates of whether additional taxes will be due. Where
the final tax outcome of these matters is different from the amounts that were initially recorded, such difference will
impact the income tax and deferred tax provisions in the period in which such determination is made.
Trade payables factoring facilities
Significant judgment is required in determining the appropriate presentation of supply-chain factoring facilities in the
statement of financial position and statement of cash flow. The Group and the Company disclose the amounts factored
by suppliers separately from trade payables because the nature and function of the financial liabilities is sufficiently
different from a trade payable that a separate presentation is appropriate. The payments to the bank are included
within operating cash flows because they continue to be part of the normal operating cycle of the Group and their
principal nature remains operating – i.e. payments for the purchase of goods and services.
ASBISC ENTERPRISES PLC
NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
(in thousands of US$)
39
3. Revenue
3.1 Disaggregation of revenue from contracts with customers
Analysis of revenue by category under revenue from contracts with customers is disaggregated by products and service
lines:
The Group
The Company
2021
2020
2021
2020
US$
US$
US$
US$
Sales of goods
3,042,908
2,337,831
2,198,742
1,890,861
Sales of optional warranty
370
615
266
99
Sales of licenses
29,359
27,853
6,393
5,240
Rendering of services
5,339
142
-
-
Total revenue from contracts with customers
3,077,976
2,366,441
2,205,401
1,896,200
Revenue analysis by geographical market
The Group and the Company
The Group operates as a trader and distributor of computer hardware and software in a number of geographical
regions. The following table shows an analysis of the Group’s sales by geographical market, irrespective of the origin
of the goods.
The Group
The Company
2021
2020
2021
2020
US$
US$
US$
US$
Former Soviet Union
1,774,834
1,289,513
1,273,119
1,085,185
Central Eastern Europe
654,117
574,389
491,477
417,549
Middle East & Africa
327,799
279,419
251,838
223,010
Western Europe
266,607
171,104
138,312
103,796
Other
54,619
52,016
50,655
66,660
Total revenue from contracts with customers
3,077,976
2,366,441
2,205,401
1,896,200
Timing of revenue recognition
Goods transferred at a point in time
3,072,637
2,366,299
2,205,327
1,896,200
Services transferred at a point in time
5,339
142
74
-
Total revenue from contracts with customers
3,077,976
2,366,441
2,205,401
1,896,200
ASBISC ENTERPRISES PLC
NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
(in thousands of US$)
40
3. Revenue (continued)
Revenue analysis by currency
The Group
The Company
2021
2020
2021
2020
US$
US$
US$
US$
US Dollar
1,025,593
911,879
2,022,750
1,706,989
Euro
518,059
438,409
181,785
187,289
Russian Ruble
329,585
205,995
459
1,020
Ukraine Hryvnia
408,596
208,690
-
-
Kazakhstan Tenge
353,724
233,597
-
-
Czech Koruna
67,359
61,464
-
-
Romanian New Lei
52,702
49,400
-
-
Belarusian Ruble
173,317
135,686
-
-
Bulgarian Lev
42,452
33,974
-
-
Croatian Kuna
26,042
20,790
-
-
Hungarian Forint
5,463
6,383
-
-
Polish Zloty
21,049
14,496
-
-
Bosnian Mark
20,218
18,459
-
-
Other
33,817
27,219
407
902
3,077,976
2,366,441
2,205,401
1,896,200
3.2 Contract balances
The Group
The Company
2021
2020
2021
2020
US$
US$
US$
US$
Trade and other receivables
352,275
295,846
48,585
46,486
The Group
Trade receivables are non-interest bearing. On 31 December 2021, US$ 2,379 (2020: US$ 2,097) was recognized
as provision for impairment of trade receivables (note 14).
Contract assets are initially recognized for revenue earned from provision of series of services as receipt of
consideration is conditional on successful completion of these services. Upon completion of the services and
acceptance by the customer, the amounts recognized as contract assets are reclassified to trade receivables. During
2021 and 2020, the impact of contract assets was not material at the Group level.
Contract liabilities primarily relates to the advance consideration received from customers for delivery of series of
services for which revenue is recognized over time. During 2021 and 2020, the impact of contract liabilities was not
material at the Group level.
The Company
Trade receivables are non-interest bearing. On 31 December 2021, US$ 375 (2020: US$ 200) was recognized as
provision for expected credit losses on trade receivables (note 14).
ASBISC ENTERPRISES PLC
NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
(in thousands of US$)
41
3. Revenue (continued)
Contract assets are initially recognized for revenue earned from provision of series of services as receipt of
consideration is conditional on successful completion of these services. Upon completion of the services and acceptance
by the customer, the amounts recognized as contract assets are reclassified to trade receivables. During 2021 and
2020, the impact of contract assets was not material at the Company level.
Contract liabilities primarily relates to the advance consideration received from customers for delivery of series of
services for which revenue is recognized over time. During 2021 and 2020, the impact of contract liabilities was not
material at the Company level.
5. Profit before tax
The Group
The Company
2021
2020
2021
2020
US$
US$
US$
US$
Profit before tax is stated after charging:
(a) Amortization of intangible assets (Note 9)
1,164
999
959
826
(b) Depreciation (Note 8)
3,910
3,388
755
651
(c) Auditors' remuneration – audit fees
437
432
213
243
(d) Directors’ remuneration – executive (Note 28)
1,706
1,047
1,706
1,047
(e) Directors’ remuneration – non-executive (Note 28)
32
28
32
28
4. Other gains and losses
The Group
The Company
2021
2020
2021
2020
US$
US$
US$
US$
Dividend received
-
-
12,251
15,210
Profit/(loss) on disposal of property, plant and
equipment
(67)
24
24
41
Other net income
150
290
9,563
7,303
Bad debts recovered
11
24
-
-
Rental income
86
78
92
81
Impairment of investments
-
(2,357)
(727)
Loss on disposal of investment
-
-
(28)
-
Impairment loss on goodwill (Note 31)
-
(39)
-
-
180
377
19,545
21,908
ASBISC ENTERPRISES PLC
NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
(in thousands of US$)
42
6. Financial expense, net
The Group
The Company
2021
2020
2021
2020
US$
US$
US$
US$
Financial income
Interest income
146
231
12
88
Interest income from loans to subsidiary
companies (Note 28)
-
-
58
50
Other financial income
3,546
2,976
2,774
2,266
Net exchange gain
934
1,112
-
-
4,626
4,319
2,844
2,404
Financial expense
Bank interest
5,660
3,948
81
277
Bank charges
4,928
3,533
1,330
1,120
Derivative charges
1,661
1,102
1,421
912
Interest on lease liabilities
405
360
58
71
Factoring interest
9,173
5,558
463
386
Factoring charges
386
358
165
150
Other financial expenses
358
143
-
-
Other interest
1,742
1,706
1,712
1,667
Interest on loans from subsidiary companies
-
-
-
-
Net exchange loss
-
-
443
154
24,313
16,708
5,673
4,737
Net
(19,687)
(12,389)
(2,829)
(2,333)
7. Tax
The Group
The Company
2021
2020
2021
2020
US$
US$
US$
US$
Payables balance 1 January
4,676
839
3,264
417
Provision for the year
17,532
8,544
8,886
4,309
Under/(over) provision of prior year
(361)
40
(422)
17
Exchange difference on retranslation
(13)
3
-
-
Amounts paid, net
(18,370)
(4,750)
(8,691)
(1,478)
Net payable balance 31 December
3,464
4,676
3,037
3,264
The taxation charge of the Group comprises corporation tax charge in Cyprus on the taxable profits of the Company
and those of its subsidiaries which are subject to tax in Cyprus and corporation tax in other jurisdictions on the taxable
results of the foreign subsidiary companies.
The Group
The Company
2021
2020
2021
2020
US$
US$
US$
US$
Tax receivable
(1,156)
(204)
-
-
Tax payable
4,620
4,880
3,037
3,264
Net
3,464
4,676
3,037
3,264
ASBISC ENTERPRISES PLC
NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
(in thousands of US$)
7. Tax (continued)
43
The Company and all Cyprus resident companies of the Group are subject to corporation tax at the rate of 12.5%
(2020: 12.5%). The tax rates of subsidiaries in foreign jurisdictions range between 0% and 30%.
Dividends received by the Cyprus companies of the Group are exempt from corporation tax and they are also exempt
from defence tax.
Bank interest received by the Company and all Cyprus resident companies of the Group is subject to defence tax of
30% (2020: 30%).
Tax charge for the year
The Group
The Company
2021
2020
2021
2020
US$
US$
US$
US$
Provisions and withholding tax for the year
17,532
8,544
8,886
4,309
Under/(over) provision of prior year
(361)
40
(422)
17
Deferred tax charge
4
(432)
42
(8)
Net
17,175
8,152
8,506
4,318
The charge for taxation is based on the Group’s/Company’s profits for the year as adjusted for tax purposes. The
reconciliation of the charge for the year is as follows:
The Group
The Company
2021
2020
2021
2020
US$
US$
US$
US$
Profit before tax
94,242
44,667
74,168
44,152
Corporation tax thereon at the applicable tax rates
12,994
7,063
9,270
5,519
Tax on income not taxable in determining taxable
profit
(2,292)
(2,356)
(1,700)
(2,087)
Effect of using tax losses brought forward
(34)
(49)
-
-
Effect of unused current year tax losses
72
18
-
-
Temporary differences
214
773
479
289
Tax charges and penalties
9
12
-
6
Tax on non-allowable expenses
6,565
3,081
837
582
17,528
8,542
8,886
4,309
Special contribution to defense fund
4
2
-
-
(Under)/over provision of prior years
(361)
40
(422)
17
Deferred tax charge
4
(432)
42
(8)
Tax charge
17,175
8,152
8,506
4,318
ASBISC ENTERPRISES PLC
NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
(in thousands of US$)
44
8. Property, plant and equipment
The Group
Land and
buildings
Assets under
construction
Computer
hardware
Warehouse
machinery
Motor vehicles
Furniture and
fittings
Office
equipment
Total
US$
US$
US$
US$
US$
US$
US$
US$
Cost
At 1 January 2020
29,688
-
7,250
524
3,109
2,806
3,839
47,216
Additions
2,361
-
978
115
1,573
411
616
6,054
Disposals
(575)
-
(137)
(24)
(561)
(155)
(18)
(1,470)
Foreign exchange difference on retranslation
767
-
10
25
(38)
35
(237)
562
At 31 December 2020
32,241
-
8,101
640
4,083
3,097
4,200
52,362
Additions
4,755
7,249
1,363
159
794
875
559
15,754
Disposals
(250)
-
(495)
(24)
(335)
(74)
(87)
(1,265)
Foreign exchange difference on retranslation
(896)
-
(169)
20
(57)
(68)
(72)
(1,242)
At 31 December 2021
35,850
7,249
8,800
795
4,485
3,830
4,600
65,609
Accumulated depreciation
At 1 January 2020
5,641
-
5,447
380
1,635
2,021
2,412
17,536
Charge for the year
1,347
-
682
36
664
310
349
3,388
Disposals
(575)
-
(137)
(24)
(561)
(155)
(18)
(1,470)
Foreign exchange difference on retranslation
22
-
87
24
8
76
(37)
180
At 31 December 2020
6,435
-
6,079
416
1,746
2,252
2,706
19,634
Charge for the year
1,661
-
729
73
796
271
380
3,910
Disposals
(250)
-
(495)
(24)
(290)
(74)
(87)
(1,220)
Foreign exchange difference on retranslation
(136)
-
(140)
23
(85)
(68)
(33)
(439)
At 31 December 2021
7,710
-
6,173
488
2,167
2,381
2,966
21,885
Net book value
At 31 December 2021
28,140
7,249
2,627
307
2,318
1,449
1,634
43,724
At 31 December 2020
25,806
-
2,022
224
2,337
845
1,494
32,728
Land and buildings are mortgaged for financing purposes. The cost of fully depreciated assets of the Group that are still in use amounted to US$ 8,487 (2020: US$9,980).
ASBISC ENTERPRISES PLC
NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
(in thousands of US$)
45
8. Property, plant and equipment (continued)
Included in the net carrying amount of property, plant and equipment are right-of-use assets as follows:
The Group
Land and
buildings
Warehouse
machinery
Motor
vehicles
Total
US$
US$
US$
US$
Balance at 1 January 2020
3,933
-
530
4,463
Depreciation charge for the year
(1,036)
(1)
(353)
(1,390)
Additions to right of use assets
2,395
37
740
3,172
Derecognition of right of use assets
(726)
-
-
(726)
Foreign exchange difference on retranslation
509
(1)
142
650
Balance at 31 December 2020
5,075
35
1,059
6,169
Depreciation charge for the year
(1,233)
(7)
(435)
(1,675)
Additions to right of use assets
4,565
-
463
5,028
Foreign exchange difference on retranslation
(120)
(2)
12
(110)
Balance at 31 December 2021
8,287
26
1,099
9,412
The Group leases offices, warehouses and stores in various locations throughout the countries of operation. In
addition, the Group leases motor vehicles for business use and employee commuting, as well as some warehouse
machinery for warehouse operations.
The total cash outflows for the leases related to the above right-of-use assets were US$ 2,504 (2020: US$ 860).
ASBISC ENTERPRISES PLC
NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
(in thousands of US$)
46
The Company
Land and
buildings
Assets under
construction
Computer
hardware
Warehouse
machinery
Motor vehicles
Furniture and
fittings
Office
equipment
Total
US$
US$
US$
US$
US$
US$
US$
US$
Cost
At 1 January 2020
7,504
-
3,325
-
327
511
836
12,503
Additions
11
-
169
69
273
26
146
694
Disposals
-
-
(5)
-
(151)
(2)
-
(158)
At 31 December 2020
7,515
-
3,489
69
449
535
982
13,039
Additions
3,303
7,249
363
114
116
114
162
11,421
Disposals
-
-
4
-
(17)
-
-
(13)
At 31 December 2021
10,818
7,249
3,856
183
548
649
1,144
24,447
Accumulated depreciation
At 1 January 2020
1,574
-
2,859
-
238
430
755
5,856
Charge for the year
379
-
149
2
76
17
28
651
Disposals
-
-
(5)
-
(150)
(2)
-
(157)
At 31 December 2020
1,953
-
3,003
2
164
445
783
6,350
Charge for the year
402
-
172
30
101
16
33
754
Disposals
-
-
4
-
(17)
-
-
(13)
At 31 December 2021
2,355
-
3,179
32
248
461
816
7,091
Net book value
At 31 December 2021
8,463
7,249
677
151
300
188
328
17,356
At 31 December 2020
5,562
-
486
67
285
90
199
6,689
The land and buildings have been mortgaged as securities for financing purposes. The cost of fully depreciated assets of the Company that are still in use amounted to US$ 3,830
(2020: US$ 5,144).
ASBISC ENTERPRISES PLC
NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
(in thousands of US$)
47
8. Property, plant and equipment (continued)
Included in the net carrying amount of property, plant and equipment are right-of-use assets as follows:
The Company
Land and
buildings
Total
US$
US$
Balance at 1 January 2020
1,354
1,354
Depreciation charge for the year
(318)
(318)
Additions to right of use assets
-
-
Derecognition of right of use assets
-
-
Foreign exchange difference on retranslation
-
-
Balance at 31 December 2020
1,036
1,036
Depreciation charge for the year
(342)
(342)
Additions to right of use assets
3,303
3,303
Derecognition of right of use assets
-
-
Foreign exchange difference on retranslation
-
-
Balance at 31 December 2021
3,997
3,997
The Company leases the distribution center in Prague, Czech Republic. During 2021, the Company entered into lease
agreement for 9,990 square meters land in Cyprus.
The total cash outflows for the leases related to the above right-of-use assets were US$ 329 (2020: US$ 367).
9. Intangible assets
The Group
Computer
software
Patents and
licenses
Total
US$
US$
US$
Cost at 1 January 2020
10,137
1,281
11,418
Additions
398
410
808
Disposals/ write-offs
(31)
(120)
(151)
Foreign exchange difference on retranslation
88
2
90
At 31 December 2020
10,592
1,573
12,165
Additions
548
146
694
Disposals/ write-offs
(97)
(47)
(144)
Foreign exchange difference on retranslation
(35)
18
(17)
At 31 December 2021
11,008
1,690
12,698
Accumulated amortization
At 1 January 2020
7,700
1,125
8,825
Charge for the year
905
94
999
Disposals/ write-offs
(31)
(120)
(151)
Foreign exchange difference on retranslation
71
3
74
At 31 December 2020
8,645
1,102
9,747
Charge for the year
1,008
156
1,164
Disposals/ write-offs
(93)
(39)
(132)
Foreign exchange difference on retranslation
(6)
22
16
At 31 December 2021
9,554
1,241
10,795
Net book value
At 31 December 2021
1,454
449
1,903
At 31 December 2020
1,947
471
2,418
The cost of fully amortized intangibles of the Group that are still in use amounted to US$ 2,157 (2020: US$ 2,186).
ASBISC ENTERPRISES PLC
NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
(in thousands of US$)
48
9. Intangible assets (continued)
The Company
Computer
software
Patents and
licenses
Total
US$
US$
US$
Cost at 1 January 2020
9,565
532
10,097
Additions
249
290
539
Disposals/write offs
-
-
-
At 31 December 2020
9,814
822
10,636
Additions
307
92
399
Disposals/write offs
-
-
-
At 31 December 2021
10,121
914
11,035
Accumulated amortization
At 1 January 2020
7,433
505
7,938
Charge for the year
784
42
826
Disposals/ write offs
-
-
-
At 31 December 2020
8,217
547
8,764
Charge for the year
839
120
959
Disposals/ write offs
-
-
-
At 31 December 2021
9,056
667
9,723
Net book value
31 December 2021
1,065
247
1,312
31 December 2020
1,597
275
1,872
The cost of fully amortized intangibles of the Company that are still in use amounted to US$ 1,372 (2020: US$ 1,372).
ASBISC ENTERPRISES PLC
NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
(in thousands of US$)
49
10. Investments
Investment in subsidiary companies
As at
31 December
2021
As at
31 December
2020
US$
US$
The Company
Cost
At 1 January
19,501
18,192
Increase in investments (i), (ii), (iii), (iv), (v), (vi)
3,933
345
Increase in fair value of financial guarantees to subsidiaries (vii)
189
964
At 31 December
23,623
19,501
Accumulated impairment
At 1 January
(3,055)
(2,328)
Impairment charge for the year (iv), (viii)
(2,357)
(727)
At 31 December
(5,412)
(3,055)
Carrying amount of investment in subsidiary companies
18,211
16,446
(i) In February 2021, the Company acquired the 100% shareholding of ASBIS CA LLC (Uzbekistan) and holds 100%
in this subsidiary, being equal to share capital of US$ 50. In August 2021, the Company acquired the 100%
shareholding of ASBC LLC (Armenia) and holds 100% in this subsidiary, being equal to share capital of US$ 245.
In December 2021, the Company acquired the 100% shareholding of ASBC Entity OOO (Uzbekistan) and holds
100% in this subsidiary, being equal to share capital of US$ 51.
(ii) In March 2021, the Company acquired the remaining 50% shareholding of Breezy Trade-In Ltd (Cyprus) for the
total consideration of US$ 31 and in October 2021, disposed 20% shareholding for the total consideration of
US$ 80.
(iii) In April 2021, the Company increased its investment in its wholly owned subsidiary ASBIS IT Solutions Hungary
Kft (Hungary) for the amount of US$ 199. In May 2021, the Company increased its investment in its wholly
owned subsidiary ASBC F.P.U.E. (Belarus) for the amount of US$ 142. In July 2021, the Company increased its
investment in its 70% owned subsidiary I.O.N Clinical Trading Ltd (Cyprus) for the amount of US$ 240. In
November 2021, the Company increased its investment in its wholly owned subsidiary ASBIS POLAND SP. Z.O.O
(Poland) for the amount of US$ 216.
(iv) In March 2021, the Company increased its investment in its wholly owned subsidiary ASBIS PL SP. Z O.O.
(Poland) for the amount of US$ 2,357 and impaired the full amount.
(v) In March 2020, the Company acquired the 55% shareholding of Real Scientists Ltd (Cyprus) for the total
consideration of US$ 17. In September 2020, the Company acquired the 100% shareholding of ASBIS IT
Solutions Hungary Kft (Hungary) for the total consideration of US$ 10. In October 2020, the Company acquired
the 70% shareholding of I.O.N. Clinical Trading Ltd and 85% shareholding of R.SC. Real Scientists Cyprus Ltd
(Cyprus) for the consideration of US$ 8 and US$ 10 respectively.
(vi) In October 2020, the Company increased its investment in its wholly owned subsidiary ASBC LLC (Georgia) for
the amount of US$ 300.
(vii) During 2021, the Company increased its financial guarantees provided to subsidiaries for the amount of US$ 188
(2020: US$ 964).
(viii) During 2020, the wholly owned subsidiary ASBIS Hungary Commercial Ltd (Hungary) has ceased majority of its
operations, hence the impairment of the full amount of the respective investment.
All subsidiaries are involved in the trading and distribution of computer hardware and software.
The Company periodically evaluates the recoverability of investments in subsidiaries whenever indicators of impairment
are present. Indicators of impairment include such items as declines in revenues, earnings or cash flows or material
adverse changes in the economic or political stability of a particular country, which may indicate that the carrying
amount of an asset is not recoverable. If facts and circumstances indicate that investment in subsidiaries may be
impaired, the estimated future discounted cash flows associated with these subsidiaries would be compared to their
ASBISC ENTERPRISES PLC
NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
(in thousands of US$)
50
10. Investments (continued)
carrying amounts to determine if a write-down to fair value is necessary. Based on the results of the impairment
assessment performed as at 31 December 2021, the management decided to fully impair investment in ASBIS PL SP.
Z O.O. (Poland) (note iv). The total amount of impairment loss amounting to US$ 2,357 is recognized in the statement
of profit and loss and other comprehensive income.
At the year end the Company held a participation in the following subsidiaries:
Subsidiary Company
Country of
incorporation
Percentage of participation
2021
2020
%
%
ASBIS UKRAINE LTD
Ukraine
100
100
ASBIS KAZAKHSTAN LLP
Kazakhstan
100
100
ASBIS PL SP. Z O.O. - dormant
Poland
100
100
ASBIS POLAND SP. Z.O.O
Poland
100
100
ASBIS ROMANIA SRL
Romania
100
100
ASBISC-CR D.O.O.
Croatia
100
100
ASBIS D.O.O.
Serbia
100
100
ASBIS HUNGARY COMMERCIAL LTD
Hungary
100
100
ASBIS BULGARIA LTD
Bulgaria
100
100
ASBIS CZ, SPOL S.R.O.
Czech Republic
100
100
ASBIS VILNIUS UAB
Lithuania
100
100
ASBIS D.O.O.
Slovenia
100
100
ASBIS ME FZE
United Arab Emirates
100
100
ASBIS SK SPOL S.R.O.
Slovakia
100
100
ASBC F.P.U.E.
Belarus
100
100
E.M. EURO-MALL LTD
Cyprus
100
100
ASBIS OOO
Russia
100
100
ASBIS MOROCCO SARL – dormant
Morocco
100
100
ASBIS LV SIA
Latvia
100
100
ASBIS KYPROS LIMITED
Cyprus
100
100
PRESTIGIO PLAZA LTD
Cyprus
100
100
PERENIO IoT SPOL S.R.O. (iv)
Czech Republic
100
100
EURO-MALL SRO (ii)
Slovakia
100
100
PRESTIGIO CHINA CORP.
China
100
100
EUROMALL BULGARIA EOOD – dormant (ii)
Bulgaria
100
100
ASBIS D.O.O.
Bosnia Herzegovina
90
90
ASBIS DE GmbH (i)
Germany
100
100
PRESTIGIO PLAZA SP.ZO.O. (i)
Poland
-
100
ASBIS TR BILGISAYAR LIMITED SIRKETI – (i)
Turkey
-
100
CJSC ASBIS
Belarus
100
100
ADVANCED SYSTEMS COMPANY LLC (i)
Saudi Arabia
-
100
“E-VISION” UNITARY ENTERPRISE
Belarus
100
100
ASBIS IT Solutions Hungary Kft
Hungary
100
100
I ON LTD (ii)
Ukraine
100
100
ASBC MMC
Azerbaijan
65.85
65.85
iSupport LTD (former ASBIS SERVIC LTD) (vii)
Ukraine
100
100
ASBC KAZAKHSTAN LLP (v)
Kazakhstan
100
100
Atlantech LTD (v)
United Arab Emirates
100
100
ALC Avectis (i)
Belarus
-
100
OOO Avectis (i)
Russia
-
100
ASBC LLC
Georgia
100
100
LLC Vizuatika (i)
Belarus
-
75
Private Educational Institution “Center of excellence in Education for
executives and specialists in Information Technology” (xi)
Belarus
100
100
OOO Must (xii)
Russia
100
100
LLC Vizuator (i)
Belarus
-
75
ASBISC ENTERPRISES PLC
NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
(in thousands of US$)
51
10. Investments (continued)
Subsidiary Company
Country of
incorporation
Percentage of participation
2021
2020
%
%
i-Care LLC (xiii)
Kazakhstan
100
100
Real Scientists Ltd
United Kingdom
55
55
MakSolutions LLC (ii)
Belarus
100
100
Breezy LLC (former Café-Connect LLC) (xv)
Belarus
100
100
Breezy TOO (former TOO “ASNEW”) (xiii)
Kazakhstan
100
100
Breezy Ltd (vii)
Ukraine
100
100
I.O.N Clinical Trading Ltd
Cyprus
70
70
R.SC. Real Scientists Cyprus Ltd
Cyprus
85
85
Breezy Trade-In Ltd (former Redmond Europe Ltd) (iii)
Cyprus
80
50
ASBIS CA LLC (iii)
Uzbekistan
100
-
Breezy Service LLC (iii) (xiv)
Ukraine
100
-
I.O. Clinic Latvia SIA (iii) (vi)
Latvia
100
-
Joule Production SIA (iii) (x)
Latvia
100
-
ASBC LLC (Armenia) (iii)
Armenia
100
-
Breezy Georgia LLC (iii) (xvi)
Georgia
100
-
ASBC Entity OOO (iii)
Uzbekistan
100
-
(i) Liquidated during 2021, or under liquidation
(ii) Held by E.M. Euro-Mall Ltd – Cyprus
(iii) Established/acquired during 2021
(iv) Held by Prestigio Plaza Ltd
(v) Held by Asbis Middle East FZE
(vi) Held by I.O.N Clinical Trading Ltd
(vii) Held by Asbis Ukraine Ltd
(viii) Held by Atlantech Ltd
(x) Held by R.SC. Real Scientists Cyprus Ltd
(xi) Held by CJSC ASBIS
(xii) Held by Asbis OOO
(xiii) Held by ASBC Kazakhstan LLC
(xiv) Held by Breezy Ltd (xv) Held by ASBC F.P.U.E.
(xvi) Held by Breezy Trade-In Ltd
11. Equity-accounted investees
The Group
As at
31 December
2021
As at
31 December
2020
US$
US$
Cost
At 1 January
868
274
Additions (i), (ii)
1,149
594
Full acquisition of investment in associate (iii)
(227)
-
At 31 December
1,790
868
Accumulated share of loss from equity-accounted investees
At 1 January
(41)
(47)
Share of profit from equity-accounted investees during the year
-
6
At 31 December
(41)
(41)
Carrying amount of equity-accounted investees
1,749
827
ASBISC ENTERPRISES PLC
NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
(in thousands of US$)
52
11. Equity-accounted investees (continued)
(i) In December 2021, the Company acquired 20% shareholding in Embio Diagnostics Ltd (Cyprus), for the
consideration of US$ 1,149. The investment is accounted for as an associate.
(ii) In January 2020, the Company acquired 40% shareholding in LLC Clevetura (Belarus), for the consideration of
US$ 594. The investment is accounted for as an associate.
(iii) In March 2021, the Group acquired the remaining 50% shareholding of Breezy Trade-In Ltd (former Redmond
Europe Ltd), for the consideration of US$ 31.
During the period ended 31 December 2020, the Group concluded a loan agreement with its associate LLC Clevetura
for the amount of US$ 30. The loan bears interest of 4% p.a. and is repayable in December 2022. In addition, the
Group, for the period ending 31 December 2021, acquired services for the total amount of US$ 611 (2020: US$ 435)
from this associate.
12. Trade payables factoring facilities
The Group
The Company
2021
2020
2021
2020
US$
US$
US$
US$
Trade payables factoring facilities
28,298
51,403
25,911
51,403
The Group and the Company participate in trade payables factoring facilities (or “supply chain financing facilities” -
“SCFs”) programs which enable the Group and the Company to obtain extended payment terms for pre-approved
suppliers. The Group incurs additional interest towards the SCFs on the amounts due to suppliers. The Company may
elect to have any of its SCFs pay its suppliers either on the discount date or on due date and then obtain extended
payment terms from them.
The Group discloses the amounts factored by suppliers separately from trade payables because the nature and function
of the financial liabilities is sufficiently different from a trade payable that a separate presentation is appropriate. The
payments to the bank are included within operating cash flows because they continue to be part of the normal operating
cycle of the Group and their principal nature remains operating – i.e. payments for the purchase of goods and services.
As at 31 December 2021, the Company and the Group enjoyed trade payables factoring facilities of US$ 62,000 and
US$ 70,749, respectively (2020 US$ 52,000 and US$ 52,000 respectively).
13. Inventories
The Group
The Company
2021
2020
2021
2020
US$
US$
US$
US$
Goods in transit
59,620
55,119
27,215
24,941
Goods held for resale
269,686
227,746
78,075
90,693
Provision for slow moving and obsolete stock
(4,746)
(5,308)
(3,003)
(3,589)
324,560
277,557
102,287
112,045
The Group
As at 31 December 2021, inventories pledged as security for financing purposes amounted to US$ 103,948 (2020: US$
73,274).
The Company
As at 31 December 2021, inventories pledged as security for financing purposes amounted to US$ 18,500 (2020: US$
13,000).
ASBISC ENTERPRISES PLC
NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
(in thousands of US$)
53
13. Inventories (continued)
Movement in provision for slow moving and obsolete
stock
The Group
The Company
2021
2020
2021
2020
US$
US$
US$
US$
On 1 January
5,308
3,728
3,589
2,806
Provisions during the year
716
3,105
31
2,117
Provided stock written off
(1,319)
(1,695)
(617)
(1,334)
Exchange difference
41
170
-
-
On 31 December
4,746
5,308
3,003
3,589
14. Trade receivables
The Group
The Company
2021
2020
2021
2020
US$
US$
US$
US$
Trade receivables
344,645
294,515
44,023
44,476
Prepayments to trade vendors
10,009
3,427
4,937
2,210
Allowance for doubtful debts
(2,379)
(2,096)
(375)
(200)
352,275
295,846
48,585
46,486
The Group
As at 31 December 2021, receivables of the Group that have been pledged as security for financing purposes amounted
to US$ 89,968 (2020: US$ 66,884).
The Company
As at 31 December 2021, receivables of the Company that have been pledged as security for financing purposes
amounted to US$ nil (2020: US$ 6,866).
Movement in provision for doubtful debts:
The Group
The Company
2021
2020
2021
2020
US$
US$
US$
US$
On 1 January
2,096
1,657
200
239
Provisions during the year
652
1,226
243
11
Amount written-off as uncollectible
(300)
(749)
(68)
(50)
Bad debts recovered
(11)
(24)
-
-
Exchange difference
(58)
(14)
-
-
On 31 December
2,379
2,096
375
200
Ageing of trade receivables
The Group
Year
Total
receivables
Outstanding
but not due
yet
Overdue
between
Overdue
between
Overdue
more than
1-30 days
30-60 days
60 days
US$
US$
US$
US$
US$
2021
344,645
322,510
14,388
2,451
5,296
2020
294,515
260,035
17,916
1,913
14,651
ASBISC ENTERPRISES PLC
NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
(in thousands of US$)
54
14. Trade receivables (continued)
The Group
Ageing of impaired receivables (provision for bad debts)
Year
Total
Outstanding
but not due
yet
Overdue
between
Overdue
between
Overdue
more
than 60
days
1-30 days
30-60 days
US$
US$
US$
US$
US$
2021
2,379
302
5
10
2,062
2020
2,096
775
-
18
1,303
The Company
Ageing of trade receivables
Year
Total
receivables
Outstanding
but not due
yet
Overdue
between
Overdue
between
Overdue
more than
1-30 days
30-60 days
60 days
US$
US$
US$
US$
US$
2021
44,023
36,741
4,167
760
2,355
2020
44,476
25,141
5,450
1,115
12,770
Ageing of impaired receivables (provision for bad debts)
Year
Total
Outstanding
but not due
yet
Overdue
between
Overdue
more
Overdue
more
than 60
days
1-30 days
30-60 days
US$
US$
US$
US$
US$
2021
375
-
-
-
375
2020
200
-
-
-
200
15. Other current assets
The Group
The Company
2021
2020
2021
2020
US$
US$
US$
US$
VAT and other taxes refundable
6,886
14,065
568
8,788
Deposits and advances to service providers
302
554
21
204
Employee floats
112
171
40
88
Other debtors and prepayments
4,659
4,350
656
1,105
Amount due from non-consolidated related parties
-
-
210
219
Amount due from subsidiary companies (Note 28)
-
-
172,261
162,600
Allowance for doubtful debts from subsidiary companies
-
-
(1,684)
-
Loans due from subsidiary companies (Note 28)
-
-
2,622
10,092
11,959
19,140
174,694
183,096
ASBISC ENTERPRISES PLC
NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
(in thousands of US$)
55
Following an extraordinary general meeting of the shareholders on 28
th
March 2022, a share buyback program with
the following conditions was approved:
• the maximum amount of money that can be used to realize the program is US$ 1,000,000
• the maximum number of shares that can be bought within the program is 2,000,000 shares
• the program's time frame is 12 months from the resolution date
• the shares purchased within the program could be held for a maximum of two years from acquisition
• the minimum price for transaction of purchase of shares within the program is PLN 1.0 per share with the maximum
price of PLN 30.0 per share
Following an extraordinary general meeting of the shareholders on 15th July 2019, a share buyback program with the
following conditions was approved:
• the maximum amount of money that can be used to realize the program is US$ 300,000
• the maximum number of shares that can be bought within the program is 500,000 shares
• the program’s time frame is 12 months from the resolution date
• the shares purchased within the program could be held for a maximum of two years from acquisition
• the minimum price for transaction of purchase of shares within the program is PLN 1.5 per share with the maximum
price of PLN 3.0 per share.
At the end of 2021 the Company held a total of nil (2020: 325,389) shares purchased for a total consideration of US$
nil (2020: US$ 212).
17. Short-term borrowings
The Group
The Company
2021
2020
2021
2020
US$
US$
US$
US$
Current borrowings
Bank overdrafts (Note 27)
33,698
45,215
342
1,675
Current portion of long-term loans
241
61
-
-
Bank short-term loans
69,885
34,256
-
-
Current lease liabilities (Note 20)
1,737
1,373
347
347
Total short-term debt
105,561
80,905
689
2,022
Factoring creditors
73,143
80,057
12,755
13,035
178,704
160,962
13,444
15,057
16. Share capital
(for the purposes of this note the amounts are stated in full)
2021
2020
US$
US$
Authorized
63,000,000 (2020: 63,000,000) shares of US$ 0.20 each
12,600.000
12,600,000
Issued and fully paid
55,500,000 (2020: 55,500,000) ordinary shares of US$ 0.20 each
11,100,000
11,100,000
On 31 December 2021 the issued and fully paid share capital of the Company consisted of 55,500,000 ordinary shares
of US $0.20 each.
ASBISC ENTERPRISES PLC
NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
(in thousands of US$)
56
17. Short-term borrowings (continued)
Summary of borrowings and overdraft arrangements
The Group
As at 31 December 2021 the Group had factoring facilities of US$ 168,974 (2020: US$ 117,775).
In addition, the Group as at 31 December 2021 had the following financing facilities with banks in the countries that
the Company and its subsidiaries operate:
• overdraft lines of US$ 119,776 (2020: US$ 111,439)
• short-term loans/revolving facilities of US$ 101,450 (2020: US$ 52,939)
• bank guarantee and letters of credit lines of US$ 60,275 (2020: US$ 52,183)
The Group had for the year ended 31 December 2021 cash lines (overdrafts, loans and revolving facilities) and factoring
lines.
The Weighted Average Cost of Debt (cash lines and factoring lines) for the period is 6.0% (2020: 8.0%).
The factoring, overdraft and revolving facilities as well as the loans granted to the Company and its subsidiaries by
their bankers are secured by:
• Floating charges over all assets of the Company
• Mortgage on land and buildings that the Group owns in Cyprus, Czech Republic, Belarus, Middle East, Bulgaria,
Slovakia and Ukraine
• Charge over receivables and inventories
• Corporate guarantees
• Assignment of insurance policies
• Pledged deposits of US$ 32,453 (2020: US$ 33,322)
The Company
As at 31 December 2021 the Company enjoyed factoring facilities of US$ 18,000 (2020: US$ 14,000).
In addition, the Company, as at 31 December 2021 had the following financing facilities with banks:
• Overdraft facilities of US$ 35,128 (2020: US$ 36,190)
• Long-term loan facilities US$ nil (2020: US$ nil)
• Bank guarantee and letter of credit lines of US$ 56,967 (2020: US$ 49,118)
The Company had cash lines (overdrafts and revolving facilities) with average cost for the year of 4.3% (2020: 5.0%).
The overdraft, revolving and factoring facilities granted to the Company are secured by:
• Floating charges over all assets of the Company
• Pledged deposits US$ 28,886 (2020: US$ 29,660)
• Mortgage on immovable properties in the amount of US$ 25,020 (2020 US$ 8,952)
18. Long-term borrowings
The Group
The Company
2021
2020
2021
2020
US$
US$
US$
US$
Bank loans
123
523
-
-
Non-current lease liabilities (note 20)
4,982
5,206
725
887
5,105
5,729
725
887
ASBISC ENTERPRISES PLC
NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
(in thousands of US$)
57
19. Other long-term liabilities
The Group
The Company
2021
2020
2021
2020
US$
US$
US$
US$
Other long-term liabilities
791
732
-
-
20. Lease liabilities
The Group
The Company
2021
2020
2021
2020
US$
US$
US$
US$
Current lease liabilities (Note 17)
1,737
1,373
347
347
Non-current lease liabilities (Note 18)
4,982
5,206
725
887
6,719
6,579
1,072
1,234
21. Deferred tax
The Group
Temporary
differences
between
accounting and
tax base of PPE
and intangibles
(note i)
Tax losses
(note ii)
Other
temporary
differences
(note iii)
Total
US$
US$
US$
US$
Credit/(debit) balance on 1 January 2020
369
-
(85)
284
Deferred tax credit for the year
(338)
-
(94)
(431)
Exchange difference on retranslation
(10)
-
(2)
(13)
Credit/(debit) balance on 31 December 2020
21
-
(181)
(160)
Deferred tax charge for the year
4
-
-
4
Exchange difference on retranslation
-
-
29
29
Credit/(debit) balance on 31 December 2021
25
-
(152)
(127)
The Company
Temporary
differences
between
accounting and
tax base of PPE
and intangibles
(note i)
Tax losses
(note ii)
Other
temporary
differences
(note iii)
Total
US$
US$
US$
US$
Credit/(debit) balance on 1 January 2020
240
-
-
240
Deferred tax credit for the year
(8)
-
-
(8)
Credit balance on 31 December 2020
232
-
-
232
Deferred tax charge for the year
43
-
-
43
Credit balance on 31 December 2021
275
-
-
275
ASBISC ENTERPRISES PLC
NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
(in thousands of US$)
58
21. Deferred tax (continued)
Note (i)
The Group and the Company
The deferred tax liability relates to excess of capital allowances over depreciation and amortization.
Note (ii)
The Group
The deferred tax asset arises from the tax losses that can be carried forward and setoff against the first available
taxable profits of the Group companies subject to the carry forward of losses restrictions stipulated in the relevant laws
of the country of each relevant subsidiary.
The Company
The deferred tax asset arises from the tax losses that can be carried forward and set-off against the first available
taxable profits of the Company.
In accordance with the Cyprus tax legislation, tax losses can be carried forward for 5 years.
Note (iii)
The Group and the Company
Other temporary differences relate mainly to different accounting bases between treatment in accordance with IFRSs
and treatment in accordance with local tax standards and mainly consist of the tax effect of unrealized profits/losses
on revaluation of working capital and of different treatment in valuing inventory.
Note (iv)
Deferred tax assets and liabilities are offset when there is a legally unforeseeable right to set-off current tax assets
against current tax liabilities and when the deferred taxes relate to the same fiscal authority.
The Group
The Company
2021
2020
2021
2020
US$
US$
US$
US$
Deferred tax assets
(456)
(466)
-
-
Deferred tax liabilities
329
306
275
232
Net deferred tax (assets)/liabilities
(127)
(160)
275
232
22. Other current liabilities
The Group
The Company
2021
2020
2021
2020
US$
US$
US$
US$
Salaries payable and related costs
4,834
3,103
2,219
518
VAT payable
11,177
9,413
170
8
Non-trade accounts payable
8,081
5,974
2,835
1,642
Accruals, deferred income and other provisions
77,893
56,041
36,306
33,038
Provision for marketing
19,857
11,935
13,304
9,178
Provision for warranties
7,448
5,903
5,336
4,117
Amount payable to subsidiary companies (Note 28)
-
-
4,582
4,045
129,290
92,369
64,752
52,546
ASBISC ENTERPRISES PLC
NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
(in thousands of US$)
59
23. Trade payables and prepayments
The Group
The Company
2021
2020
2021
2020
US$
US$
US$
US$
Trade payables
364,396
312,066
212,626
251,244
Prepayments from customers
21,891
23,944
6,051
18,747
386,287
336,010
218,677
269,991
24. Operating segments
The Group
1.1 Segment information
The Group mainly operates in a single industry segment as a distributor of IT products. Information reported to the
chief operating decision maker for the purposes of allocating resources to the segments and to assess their performance
is based on geographical locations. The Group operates in four principal geographical areas – Former Soviet Union,
There are varying levels of integration between the segments and includes distribution of IT products and services.
Inter-segment pricing is determined on an arm’s length basis.
1.2 Segment revenues and results
Segment revenue
Segment operating profit
2021
2020
2021
2020
US$
US$
US$
US$
Former Soviet Union
1,774,834
1,289,513
58,804
29,275
Central Eastern Europe
654,117
574,389
21,577
14,500
Middle East & Africa
327,799
279,419
11,175
7,016
Western Europe
266,607
171,104
15,936
3,354
Other
54,619
52,016
6,257
2,528
3,077,976
2,366,441
113,749
56,673
Net financial expenses (note 6)
(19,687)
(12,389)
Share of loss form equity-accounted investees (note 11)
-
6
Other gains and losses (note 4)
180
377
Profit before taxation
94,242
44,667
ASBISC ENTERPRISES PLC
NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
(in thousands of US$)
60
24. Operating segments (continued)
1.3 Segment capital expenditure (CAPEX) and depreciation & amortization
The following is an analysis of the Group’s capital expenditure in both tangible and intangible assets as well as their
corresponding charges in the income statement:
Segment CAPEX
Segment depreciation and
amortization
2021
2020
2021
2020
US$
US$
US$
US$
Former Soviet Union
9,315
8,491
1,517
1,488
Central Eastern Europe
14,569
14,943
1,486
1,169
Middle East & Africa
3,631
3,745
187
199
Cyprus
18,668
8,561
1,872
1,521
Unallocated
39
35
12
10
46,222
35,775
5,074
4,387
1.4 Segment assets and liabilities
Segment assets
2021
2020
US$
US$
Former Soviet Union
500,800
453,802
Central Eastern Europe
68,868
69,654
Western Europe
168,729
125,934
Middle East & Africa
104,370
65,653
Total
842,767
715,043
Assets allocated in capital expenditure (1.3)
46,222
35,775
Other unallocated assets
34,198
38,094
Consolidated assets
923,187
788,912
For the purposes of monitoring segment performance and allocating resources between segments only assets were
allocated to the reportable segments. As the Group liabilities are mainly used jointly by the reportable segments, these
were not allocated to each segment.
1.5 Geographical information
Since the Group’s operating segments are based on geographical location and this information has been provided
above (1.2 – 1.4) no further analysis is included.
1.6. Information about major customers
During 2021 none of the Group’s customers accounted individually for more than 2.5% (2020: 2.2%) of total sales; it
is of strategic importance for the Group not to rely on any single customer.
25. Derivative financial liabilities
The Group
The Company
2021
2020
2021
2020
US$
US$
US$
US$
Derivative financial liabilities carried at fair value through profit or loss
Foreign currency derivative contracts
299
883
129
613
ASBISC ENTERPRISES PLC
NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
(in thousands of US$)
61
25. Derivative financial liabilities (continued)
Fair value measurement of derivative financial liabilities
(i) The Group and the Company enter into currency derivative contracts, namely forward and future currency
derivatives, as part of their overall hedging strategy in order to minimize the exposure to foreign currency fluctuations.
(ii) A foreign currency forward derivative contract is a contractual agreement between two parties to exchange two
currencies at a given exchange rate at some point in the future. The fair value of the derivative can be either positive
(asset) or negative (liability) as a result of fluctuations in the forward exchange rates.
(iii) A foreign currency future derivative contract is a contractual agreement between two parties to buy or sell currency
at a predetermined price in the future. The fair value of the derivative can be either positive (asset) or negative (liability)
as a result of fluctuations in the period end exchange rate.
The Group
Nominal
amount
Nominal
amount
Fair value
Fair value
2021
2020
2021
2020
US$
US$
US$
US$
Buying US$/Selling EUR
17,818
-
64
-
Buying US$/Selling PLN
500
329
2
1
Buying US$/Selling RON
1,050
2,400
2
34
Buying US$/Selling RUB
6,400
7,660
41
306
Buying US$/Selling KZT
1,025
-
25
-
Buying US$/Selling GBP
42
-
1
-
Buying US$/Selling CZK
300
4,000
2
80
Buying US$/Selling UAH
8,843
884
94
220
Buying US$/Selling HUF
456
-
3
-
Buying EUR/Selling US$
1,002
3,145
14
72
Buying BGN/Selling USD
119
-
2
-
Buying GBP/Selling US$
-
305
-
12
Charges on open contracts
-
-
49
158
37,555
18,723
299
883
The Company
Nominal
amount
Nominal
amount
Fair value
Fair value
2021
2020
2021
2020
US$
US$
US$
US$
Buying US$/Selling PLN
500
329
2
1
Buying US$/Selling RUB
6,400
7,660
41
306
Buying US$/Selling CZK
300
4,000
2
80
Buying US$/Selling EUR
17,818
-
64
-
Buying US$/Selling HUF
456
-
3
-
Buying US$/Selling RON
1,050
2,400
2
34
Buying US$/Selling GBP
42
-
1
-
Buying EUR/Selling US$
1,002
3,145
14
72
Buying EUR/Selling CZK
-
-
-
-
Buying GBP/Selling US$
-
305
-
12
Charges on open contracts
-
-
-
108
27,568
17,839
129
613
ASBISC ENTERPRISES PLC
NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
(in thousands of US$)
62
25. Derivative financial liabilities (continued)
(iv) During the year the Group realized a loss from execution of foreign currency derivative contracts of US$ 2,052
(2020: loss of US$ 1,644) and the Company realized a loss of US$ 234 (2020: gain of US$ 1,826).
26. Derivative financial assets
The Group
The
Company
2021 2020 2021 2020
US$
US$
US$
US$
Derivative financial assets carried at fair
value through profit or loss
Foreign currency derivative contracts
192
199
164
164
Fair value measurement of derivative financial assets
(i) The Group and the Company enter into currency derivative contracts, namely forward and future currency
derivatives, as part of their overall hedging strategy in order to minimize the exposure to foreign currency fluctuations.
(ii) A foreign currency forward derivative contract is a contractual agreement between two parties to exchange two
currencies at a given exchange rate at some point in the future. The fair value of the derivative can be either positive
(asset) or negative (liability) as a result of fluctuations in the forward exchange rates.
The Group Nominal
amount
Nominal
amount Fair value Fair value
2021 2020 2021 2020
US$ US$ US$ US$
Buying US$/Selling RUB -
308
-
148
Buying US$/Selling EUR 6,744
-
46
-
Buying US$/Selling RON 350
50
-
7
Buying US$/Selling BGN -
6
-
6
Buying US$/Selling HRK 1,085
1,410
29
30
Buying US$/Selling PLN 500
5,387
3
106
Buying US$/Selling HUF 1,618
-
113
-
Buying EUR/Selling HRK -
-
-
-
Buying EUR/Selling US$ -
861
-
3
Buying EUR/Selling PLN 827
-
1
-
Charges on open contracts
-
-
-
(101)
11,124
8,022
192
199
The Company
Nominal
amount
Nominal
amount Fair value Fair value
2021 2020 2021 2020
US$ US$ US$ US$
Buying US$/Selling EUR 6,744
-
46
-
Buying US$/Selling PLN
500
5,387
3
106
Buying US$/Selling RUB -
308
-
148
Buying US$/Selling RON 350
50
-
7
Buying US$/Selling HUF 1,618
-
113
-
Buying EUR/Selling US$ -
861
-
3
Buying EUR/Selling PLN
827
-
2
-
Charges on open contracts
-
-
-
(100)
10,039
6,606
164
164
ASBISC ENTERPRISES PLC
NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
(in thousands of US$)
63
26. Derivative financial assets (continued)
(iii) A foreign currency future derivative contract is a contractual agreement between two parties to buy or sell
currency at a predetermined price in the future. The fair value of the derivative can be either positive (asset) or
negative (liability) as a result of fluctuations in the period end exchange rate.
(iv) During the year the Group realized a loss from execution of foreign currency derivative contracts of US$ 2,052
(2020: loss of US$ 1,644) and the Company realized a loss of US$ 234 (2020: gain of US$ 1,826).
27. Cash and cash equivalents
The Group
The
Company
202
1
20
20
202
1
20
20
US$
US$
US$
US$
Cash at bank and in hand
184,618
158,898
98,168
118,065
Bank overdrafts (Note 17)
(33,698)
(45,215)
(
342
)
(1,675)
150,920
113,683
97,826
116,390
The Group
The cash at bank and in hand balance includes an amount
of US$ 32,453 (2020: US$ 33,322
) which represents pledged
deposits against financial facilities granted and margin accounts for foreign exchange hedging.
The Company
The cash at bank and in hand balance incl
udes an amount of US$ 28,886 (2020: US$ 29,660
) which represents pledged
deposits.
28. Related party transactions and balances
Main shareholders
The following table presents shareholders possessing directly or indirectly more than 5% of the Company’s shares and
shares held by the Company under the share buyback program as at 31 December:
Name
2021
2021
202
0
202
0
Number of
Votes/share
Number of
Votes/share
votes/shares
capital
votes/shares
capital
% %
Siarhei Kostevitch and KS Holdings Ltd
20,443,127
36.83
20,443,127
36.83
Asbisc Enterprises Plc (share buyback program)
-
-
325,389
0.59
Free float
35,056,873
63.17
35,
731
,
484
6
2
.
58
55,500,000
100.00
55,500,000
100.00
Transactions and balances between the Company and its subsidiaries have been eliminated on consolidation.
The Company
In the normal course of business, the Company undertook during the year transactions with its subsidiary companies
and had year end balances as follows:
ASBISC ENTERPRISES PLC
NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
(in thousands of US$)
64
28. Related party transactions and balances (continued)
Intercompany (trading) transactions
Sales of goods
Purchases of goods
2021
2020
2021
2020
US$
US$
US$
US$
Subsidiaries
1,599,069
1,371,781
56,653
45,489
Sales of services
Purchases of services
2021
2020
2021
2020
US$
US$
US$
US$
Subsidiaries
445
435
14,148
9,939
Intercompany (trading) balances
Amounts owed by
subsidiary companies
Amounts owed to
subsidiary companies
2021
2020
2021
2020
US$
US$
US$
US$
Subsidiaries
167,389
162,600
4,582
4,045
Loans to subsidiary companies
2021
2020
US$
US$
Loans to subsidiary companies (Note 15)
2,622
10,092
The total loans to subsidiary companies before provision for doubtful loans are unsecured and analyzed below:
Subsidiary companies
Interest rate
Source
currency
2021
2020
%
US$
US$
SIA "Joule Production" (v)
2
Euro
600
-
ION Clinic Latvia SIA (vi)
2
Euro
744
-
R.SC Real Scientists Cyprus Ltd (vii)
2.5
Euro
186
-
ASBIS SK spol. S.r.o (ii)
0
US Dollar
-
9,000
CJSC ASBIS (i)
4
US Dollar
1,092
1,092
2,622
10,092
The total interest received from subsidiary companies is analyzed below:
2021
2020
US$
US$
ION Clinic Latvia SIA (vi)
8
-
R.SC Real Scientists Cyprus Ltd (vii)
4
-
SIA "Joule Production" (v)
4
-
ALC Avectis (iii)
-
7
ASBC LLC (Georgia) (iv)
-
1
CJSC ASBIS (i)
42
42
58
50
ASBISC ENTERPRISES PLC
NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
(in thousands of US$)
65
28. Related party transactions and balances (continued)
(i) CJSC ASBIS entered into a loan agreement with the Company on the 24th of November 2014, with the
obligation to settle the loan by 22nd of October 2022. The loan is unsecured.
(ii) ASBIS SK spol. S.r.o entered into a repo agreement with the Company on 22nd of December 2020, with the
obligation to settle the loan by the 5th of January 2021. The loan has been settled during 2021.
(iii) ALC Avectis entered into a loan agreement with the Company on the 7th of March 2019, with the obligation
to settle the loan by the 15th of January 2020. The loan has been settled during 2020.
(iv) ASBC LLC (Georgia) entered into a loan agreement with the Company on the 1st of July 2019, with the
obligation to settle the loan by the 1
st
of January 2020. The loan has been settled during 2020.
(v) SIA "Joule Production" entered into two loan agreements with the Company on the 29
th
of July 2021 and
25
th
of October 2021 with the obligation to settle the loan by 30
th
of December 2022 and 31
st
of December
2024 accordingly. The loan is unsecured.
(vi) ION Clinic Latvia SIA entered into a loan agreement with the Company on the 24
th
of June 2021, with the
obligation to settle the loan by 31
st
of December 2022. The loan is unsecured.
(vii) R.SC Real Scientists Cyprus Ltd SIA entered into a loan agreement with the Company on the 1
st
of March
2021, with the obligation to settle the loan by 1
st
of March 2022. The loan is unsecured.
Financial guarantees liabilities
2021
2020
US$
US$
Financial guarantee liabilities granted to subsidiaries
1,153
964
The Company provides free of charge financial guarantee services to its subsidiaries . The Company accounted for such
financial guarantees as for financial guarantee contracts in accordance with IFRS 9. Financial guarantee facilities of
subsidiaries are mainly presented by overdrafts and factoring contracts, thus financial guarantee liability recognized in
short-term.
Transactions and balances of key management
The Group
The Company
2021
2020
2021
2020
US$
US$
US$
US$
Directors’ remuneration and benefits - executive
1,706
1,047
1,706
1,047
Directors’ remuneration - non-executive
32
28
32
28
Key management remuneration
In capacity as other key management personnel
1,725
1,143
329
86
Employer’s contributions - provident fund
7
4
7
2
Employer’s contributions - social insurance and
other benefits
175
132
26
10
3,645
2,354
2,100
1,173
Share-based payment arrangements
Following an extraordinary general meeting of the shareholders on the 28
th
March 2022, a share buyback program
with the following conditions was approved:
Share option program (equity-settled)
• the maximum amount of money that can be used to realize the program is US$ 1,000,000
• the maximum number of shares that can be bought within the program is 2,000,000 shares
• the program's time frame is 12 months from the resolution date
• the shares purchased within the program could be held for a maximum of two years from acquisition
• the minimum price for transaction of purchase of shares within the program is PLN 1.0 per share with the
maximum price of PLN 30.0 per share
ASBISC ENTERPRISES PLC
NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
(in thousands of US$)
66
28. Related party transactions and balances (continued)
At 31 December 2020, the Group had the following share-based payment arrangement.
Following an extraordinary general meeting of the shareholders on 15th July 2019, a share buyback program with the
following conditions was approved:
Share option program (equity-settled)
• the maximum amount of money that can be used to realize the program is US$ 300,000
• the maximum number of shares that can be bought within the program is 500,000 shares
• the program’s time frame is 12 months from the resolution’s date
• the shares purchased within the program could be held for a maximum of two years from acquisition
• the minimum price for transaction of purchase of shares within the program is PLN 1.5 per share with the maximum
price of PLN 3.0 per share.
At the end of 2021 the Company held a total of nil (2020: 325,389) shares purchased for a total consideration of US$
nil (2020: US$ 212) (note 16).
The Group
The Company
2021
2020
2021
2020
US$
US$
US$
US$
Salaries and other benefits
69,760
52,610
10,020
7,773
The average number of employees for the year was
2,079
1,837
167
150
29. Commitments and contingencies
The Group
As at 31 December 2021 the Group was committed in respect of purchases of inventories of a total cost value of US$
9,937 (2020: US$ 35,109) which were in transit at 31 December 2021 and delivered in January 2022. Such inventories
and the corresponding liability towards the suppliers have not been included in these financial statements since,
according to the terms of purchase, title of the goods has not passed to the Group at year end.
As at 31 December 2021 the Group was contingently liable to banks in respect of bank guarantees and letters of credit
lines of US$ 60,275 (2020: US$ 52,183) (note 17) which the Group has extended to its suppliers and other
counterparties.
As at the 31st December 2021 the Group had no other capital or legal commitments and contingencies.
The Company
As at 31 December 2021 the Company was committed in respect of purchases of inventories of a total cost value of
US$ 9,937 (2020: US$ 35,109) which were in transit at 31 December 2020 and delivered in January 2022. Such
inventories and the corresponding liability towards the suppliers have not been included in these financial statements
since, according to the terms of purchase, title of the goods has not passed to the Company at year end.
As at 31 December 2021 the Company was contingently liable to banks in respect of bank guarantees and letters of
credit of US$ 56,967 (2020: US$49,118) (note 17) which the Company has extended to its suppliers and other
counterparties.
The liabilities towards the Company’s suppliers covered by these guarantees are reflected in the financial statements
under trade payables.
In addition, the Company has issued corporate guarantees to banks in respect of financing facilities extended to its
subsidiaries in the amount of US$ 230,835 (2020: US$200,315).
ASBISC ENTERPRISES PLC
NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
(in thousands of US$)
67
30. Earnings per share
2021
2020
US$
US$
Profit for the year attributable to members
77,067
36,515
Weighted average number of shares for the purposes of basic and diluted earnings
per share
55,500,000
55,200,111
US$ cents
US$ cents
Basic and diluted earnings per share
138.86
66.15
31. Business combinations
The Group
1. Acquisitions
1.1 Acquisitions of subsidiaries to 31 December 2021
During the year, the Group has acquired the 30% of the share capital of Breezy Trade-In Ltd (former Redmond Europe
Ltd) and the 100% share capital of ASBIS CA LLC, Vizuators LLC, Breezy Service LLC, I.O. Clinic Latvia SIA, Joule
Production SIA, ASBC LLC (Armenia), Breezy Georgia LLC and ASBC Entity LLC.
Name of entity
Type of operations
Date acquired
%
acquired
%
owned
Breezy Trade-In Ltd (Cyprus) (former Redmond
Europe Ltd)
Information Technology
30 March 2021
30%
80%
ASBIS CA LLC (Uzbekistan)
Information Technology
5 February 2021
100%
100%
Vizuators LLC (Belarus)
Information Technology
1 February 2021
100%
100%
Breezy Service LLC (Ukraine)
Information Technology
15 March 2021
100%
100%
I.O. Clinic Latvia SIA (Latvia)
Information Technology
3 February 2021
100%
100%
Joule Production SIA (Latvia)
Information Technology
8 January 2021
100%
100%
ASBC LLC (Armenia)
Information Technology
23 August 2021
100%
100%
Breezy Georgia LLC (Georgia)
Information Technology
7 September 2021
100%
100%
ASBC Entity OOO (Uzbekistan)
Information Technology
15 December 2021
100%
100%
Acquisitions of subsidiaries to 31 December 2020
During the period, the Group has acquired 55% of the share capital of Real Scientists Ltd, 70% of the share capital of
I.O.N Clinical Trading Ltd, 85% of the share capital of R.SC. Real Scientists Cyprus Ltd and 100% of share capital of
ASBIS IT Solutions Hungary Kft, MakSolutions LLC, Café-Connect LLC, TOO “ASNEW” and Breezy Ltd by means of the
entity’s incorporation.
Name of entity
Type of operations
Date acquired
%
acquired
%
owned
Real Scientists Ltd (United Kingdom)
Information Technology
16 March 2020
55%
55%
ASBIS IT Solutions Hungary Kft (Hungary)
Information Technology
2 September 2020
100%
100%
MakSolutions LLC (Belarus)
Information Technology
10 September 2020
100%
100%
Breezy LLC (Belarus) (former Café-Connect LLC)
Information Technology
10 September 2020
100%
100%
Breezy Kazakhstan TOO (Kazakhstan) (former
TOO “ASNEW”)
Information Technology
11 November 2020
100%
100%
Breezy Ltd (Ukraine)
Information Technology
24 October 2020
100%
100%
I.O.N Clinical Trading Ltd (Cyprus)
Information Technology
2 October 2020
70%
70%
R.SC. Real Scientists Cyprus Ltd (Cyprus)
Information Technology
2 October 2020
85%
85%
ASBISC ENTERPRISES PLC
NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
(in thousands of US$)
68
31. Business combinations (continued)
1.a. Acquired assets and liabilities
The net carrying value of underlying separately identifiable assets and liabilities transferred to the Group at the date
of acquisition was as follows:
As at
31 December
2021
As at
31 December
2020
US$
US$
Tangible and intangible assets
-
233
Inventories
-
200
Receivables
11
71
Other non-current assets
-
15
Other receivables
-
1
Short-term loans
-
(15)
Payables
-
(321)
Other payables and accruals
(1)
(135)
Cash and cash equivalents
53
102
Net identifiable assets
63
151
Group’s interest in net assets acquired
31
151
Total purchase consideration
(31)
(190)
Net loss
-
(39)
Impairment loss on Goodwill
-
39
Goodwill capitalized in statement of financial position
-
-
1.2. Goodwill arising on acquisitions
2021
2020
US$
US$
At 1 January
629
591
Additions
-
39
Impairment loss (ii)
-
(39)
Foreign exchange difference on retranslation
(34)
38
At 31 December (i)
595
629
(i) The capitalized goodwill arose from the business combinations of the following subsidiaries:
2021
2020
US$
US$
OOO Must
201
201
ASBIS d.o.o. (BA)
394
428
595
629
ASBISC ENTERPRISES PLC
NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
(in thousands of US$)
69
31. Business combinations (continued)
1.3. Impairment testing
For ASBIS d.o.o. (BA) and OOO Must, a detailed impairment analysis was performed and based on the results it has
been concluded that no impairment is required.
2. Disposals
Disposals of subsidiaries to 31 December 2021
During the year, the following subsidiaries have been disposed of and a total loss of $124 arose on the events.
Name of disposed entity
Type of operations
Date liquidated
% liquidated
LLC Vizuatika (Belarus)
Information Technology
24 May 2021
75%
LLC Vizuator (Belarus)
Information Technology
24 May 2021
75%
Vizuators LLC (Belarus)
Information Technology
24 May 2021
100%
Prestigio Plaza Sp. Z o.o (Poland)
Information Technology
25 October 2021
100%
Advanced Systems Company LLC
(Kingdom of Saudi Arabia)
Information Technology
30 October 2021
100%
Asbis TR Bilgisayar Limited Sirketi
(Turkey)
Information Technology
30 November 2021
100%
OOO Avectis (Moscow)
Information Technology
30 November 2021
100%
ALC Avectis (Belarus)
Information Technology
30 November 2021
100%
Disposals of subsidiaries to 31 December 2020
During the period the following Group’s subsidiaries went into liquidation. No gain or loss arose on the event.
Name of disposed entity
Type of operations
Date liquidated
% liquidated
Shark Computers a.s. (Slovakia)
Information Technology
20 November 2020
100%
(ii) The impairment loss on goodwill relates to the following cash generating units and subsidiaries:
2021
2020
US$
US$
Breezy LLC (former Café-Connect LLC)
-
12
MakSolutions LLC
-
27
-
(39)
ASBISC ENTERPRISES PLC
NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
(in thousands of US$)
70
32. Financial risk management
1. Financial risk factors
In this note, references to the Group also relate to the Company.
The Group’s activities expose it to credit risk, interest rate risk, liquidity risk and currency risk arising from the financial
instruments it holds. The risk management policies employed by the Group to manage these risks are discussed below:
1.1. Credit risk
Credit risk is defined as the risk of failure of debtors to discharge their obligations towards the Group. The Group sets
up and maintains specific controls to mitigate its credit risk, as it realizes its importance for the Group’s viability.
The Group had established and systematically follows a thorough procedure prior to registering new customers into its
system. Every new customer is checked both internally and via various reputable credit sources prior to such
registration and, more importantly, prior to granting of any credit. The Group runs an internal credit department
consisting of local, regional and corporate credit managers. Corporate managers decide for all significant credit line
requests and review the work of regional and local managers. The Group uses all available credit tools – i.e. credit
insurance, credit information bureaus, letter of guarantee – to safeguard itself from the credit risk. The Group have
insured the majority of receivables during 2021.
During 2021 none of the Group’s customers accounted individually for more than 2.5% (2020: 2.2%) of total sales; it
is of strategic importance for the Group not to rely on any single customer.
Ongoing credit evaluation is performed on the financial condition of accounts receivable and, where appropriate, credit
insurance is purchased. The credit risk on liquid funds and derivative financial instruments is determined by the credit
ratings assigned to the financial institutions with which these funds are held.
The aging profile of trade receivables is disclosed in note 14.
The tables below show an analysis of the Group's and Company’s bank deposits at year end by credit rating of the
bank in which they are held:
The Group
2021
2020
Based on credit ratings by Moody's; the cash at banks the Group held as at year end
are:
US$
US$
Aa3
2,475
2,632
A1
28,223
50,517
A2
34,907
30,100
A3
30,552
20,442
Baa1
841
939
Baa3
999
1,024
Ba1
1,079
22
Ba2
318
920
Ba3
222
-
B1
16,819
24,538
B2
165
812
Without credit rating
68,018
26,952
184,618
158,898
ASBISC ENTERPRISES PLC
NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
(in thousands of US$)
71
32. Financial risk management (continued)
The Company
2021
2020
Based on credit ratings by Moody's, the cash at banks the Company held as at year
end are:
US$
US$
A1
28,160
50,476
A2
34,077
29,793
A3
16,089
7,439
B1
16,158
24,087
Without credit rating
3,684
6,270
98,168
118,065
Impairment on cash and cash equivalents has been measured on a twelve-month expected loss basis and reflects short
maturities of the exposures. The Group and the Company considers that its cash and cash equivalents have low credit
risk based on the external credit ratings of the counterparties and there is no material impact on the Group’s and
Company’s financial statements.
Trade receivables and contract assets
Expected credit loss assessment based on collective model net of specific provision as at 31 December 2021 are:
The Group
2021
2021
2021
2020
2020
2020
Default
rate
Gross
carrying
amount
Loss
allowance
Default
rate
Gross carrying
amount
Loss
allowance
%
US$
US$
%
US$
US$
Outstanding but not due yet
0.01
322,510
48
0.02
260,343
57
Overdue between 1-30
days
0.04
14,388
5
0.03
17,916
6
Overdue between 30-60
days
0.42
2,451
10
0.20
1,899
4
Overdue more than 60 days
2.12
5,296
112
0.40
13,848
55
344,645
175
294,006
122
The Company
2021
2021
2021
2020
2020
2020
Default
rate
Gross
carrying
amount
Loss
allowance
Default
rate
Gross
carrying
amount
Loss
allowance
%
US$
US$
%
US$
US$
Outstanding but not due yet
0.00
177,304
1
0.00
170,780
3
Overdue between 1-30 days
0.00
22,065
0
0.01
14,771
1
Overdue between 30-60 days
0.00
7,535
0
0.01
4,974
1
Overdue more than 60 days
17.95
9,380
1,684
0.05
16,551
9
216,284
1,685
207,076
14
Loss rates are based on actual credit loss experience over the past four years.
ASBISC ENTERPRISES PLC
NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
(in thousands of US$)
72
32. Financial risk management (continued)
1.2. Interest rate risk
Interest rate risk is the risk that the value of financial instruments will fluctuate due to changes in market interest
rates. The Group’s income and operating cash flows are dependent on changes in market interest rates. The Group
deposits excess cash and borrows at variable rates. The Group’s management monitor the interest rate fluctuations on
a continuous basis and act accordingly.
At the reporting date the profile of interest-bearing financial instruments was:
Sensitivity analysis
An increase of 100 basis points in interest rates at 31 December 2021 would have decreased by the amounts shown
below. This analysis assumes that all other variables, in particular foreign currency rates, remain constant, as well as
it assumes that financial facilities outstanding at the end of the reporting period were also outstanding for the whole
year. For a decrease of 100 basis points there would be an equal and opposite impact on the profit and loss. The
figures below are before tax.
Profit & loss
The Group
The Company
2021
2020
2021
2020
US$
US$
US$
US$
Variable rate instruments
Overdrafts
337
452
3
17
Short-term loans
700
343
-
-
Long-term loans
1
5
-
-
Factoring advances
731
801
128
130
1,769
1,601
131
147
1.3. Liquidity risk
Liquidity risk is the risk that arises when the maturity of assets and liabilities does not match. An unmatched position
potentially enhances profitability but can also increase the risk of losses. The Group has procedures with the object of
minimizing such losses such as maintaining sufficient cash and other highly liquid current assets and by having available
an adequate amount of committed credit facilities.
The following tables detail the remaining contractual maturity for financial liabilities. The tables have been drawn up
based on the earliest date on which the Group/Company can be required to pay and include only principal cash flows.
The Group
The Company
2021
2020
2021
2020
US$
US$
US$
US$
Variable rate instruments
Overdrafts
33,698
45,215
342
1,675
Short-term loans
70,126
34,317
-
-
Long-term loans
123
523
-
-
Factoring advances
73,143
80,057
12,755
13,035
177,090
160,112
13,097
14,710
ASBISC ENTERPRISES PLC
NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
(in thousands of US$)
73
32. Financial risk management (continued)
The Group
31 December 2021
Carrying
amounts
Contractual
cash flows
3 months or
less
3-12 months
1-2 years
2-5 years
US$
US$
US$
US$
US$
US$
Bank loans
70,248
70,248
59,631
10,495
122
Bank overdrafts (Note 17)
33,698
33,698
26,143
7,555
-
-
Factoring creditors (Note
17)
73,143
73,143
73,143
-
-
-
Lease liabilities (Note 20)
6,719
6,719
512
1,225
1,653
3,329
Trade and other payables
520,197
520,197
502,332
17,865
-
-
Trade payables factoring
facilities (Note 12)
28,298
28,298
28,298
-
-
-
Other short and long-term
liabilities
1,091
1,091
299
-
150
642
733,394
733,394
690,358
37,140
1,925
3,971
31 December 2020
Carrying
amounts
Contractual
cash flows
3 months or
less
3-12 months
1-2 years
2-5 years
US$
US$
US$
US$
US$
US$
Bank loans
34,840
34,840
18,762
15,555
414
109
Bank overdrafts (Note 17)
45,215
45,215
7,637
37,578
-
-
Factoring creditors (Note
17)
80,057
80,057
80,057
-
-
-
Lease liabilities (Note 20)
6,579
6,579
385
988
1,692
3,514
Trade and other payables
433,260
433,260
420,953
12,307
-
-
Trade payables factoring
facilities (Note 12)
51,403
51,403
51,403
-
-
-
Other short and long-term
liabilities
1,615
1,615
883
-
1
731
652,969
652,968
580,080
66,428
2,106
4,354
The Company
31 December 2021
Carrying
amounts
Contractual
cash flows
3 months or
less
3-12 months
1-2 years
2-5 years
US$
US$
US$
US$
US$
US$
Bank overdrafts (Note 17)
342
342
342
-
-
-
Factoring creditors (Note 17)
12,755
12,755
12,755
-
-
-
Lease liabilities (Note 20)
1,072
1,072
84
263
376
349
Trade and other payables
286,466
286,466
286,466
-
-
-
Trade payables factoring
facilities
25,911
25,911
25,911
-
-
-
Other short and long-term
liabilities
129
129
129
-
-
-
326,675
326,675
325,687
263
376
349
31 December 2020
Carrying
amounts
Contractual
cash flows
3 months or
less
3-12 months
1-2 years
2-5 years
US$
US$
US$
US$
US$
US$
Bank overdrafts (Note 17)
1,675
1,675
1,675
-
-
-
Factoring creditors (Note 17)
13,035
13,035
13,035
-
-
-
Lease liabilities (Note 20)
1,234
1,234
69
278
375
512
Trade and other payables
325,800
325,800
325,800
-
-
-
Trade payables factoring
facilities
51,403
51,403
51,403
-
-
-
Other short and long-term
liabilities
613
613
613
-
-
-
393,760
393,760
392,595
278
375
512
ASBISC ENTERPRISES PLC
NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
(in thousands of US$)
74
32. Financial risk management (continued)
1.4. Currency risk
Currency risk is the risk that the value of financial instruments will fluctuate due to changes in foreign exchange rates.
Currency risk arises when future commercial transactions and recognized assets and liabilities are denominated in a
currency that is not the Group’s/Company’s measurement currency.
The Group uses short-term derivative financial instruments to minimize the risk on balances and material transactions
denominated in currencies other than US Dollars, the Group’s reporting currency. As a significant portion of the Group’s
cash flow is denominated in Russian Ruble, Euro and other local currencies (i.e. the Czech Crown, the Polish Zloty, the
Hungarian Forint, etc.), the Group raises debt in such currencies in order to hedge against foreign exchange risk.
The carrying amounts of the monetary assets and monetary liabilities at the reporting date are denominated in the
following currencies:
The Group
31 December 2021
Cash at bank
and in hand
Receivables
Trade and
other
liabilities
Borrowings
US$
US$
US$
US$
US Dollar
109,688
63,005
(251,794)
(12,077)
Euro
9,473
58,998
(90,781)
(31,182)
Russian Ruble
1,000
28,792
(31,131)
(10,267)
Polish Zloty
497
3,672
(2,529)
(1,251)
Czech Koruna
2,653
9,535
(3,613)
(8,167)
Belarusian Ruble
6,114
8,459
(10,383)
(15,765)
Croatian Kuna
3,524
2,183
(1,004)
(2,528)
Romanian New Lei
1,433
6,524
(1,349)
(3,226)
Bulgarian Lev
451
3,838
(1,310)
(1,904)
Hungarian Forint
123
1,292
(526)
(67)
Kazakhstan Tenge
1,666
61,623
(17,544)
(49,468)
Ukrainian Hryvnia
37,714
83,596
(88,355)
(36,561)
Bosnian Mark
477
3,548
(629)
(2,303)
United Arab Emirates Dirham
8,667
15,819
(17,824)
(6,471)
Other
1,138
3,195
(2,053)
(2,572)
184,618
354,079
(520,825)
(183,809)
The Group
31 December 2020
Cash at bank
and in hand
Receivables
Trade and
other
liabilities
Borrowings
US$
US$
US$
US$
US Dollar
133,694
82,229
(338,183)
(15,166)
Euro
4,470
55,760
(56,890)
(39,196)
Russian Ruble
13
27,049
(10,367)
(17,828)
Polish Zloty
472
5,205
(2,067)
(949)
Czech Koruna
3,040
10,951
(2,368)
(10,072)
Belarusian Ruble
1,152
8,487
(3,483)
(9,067)
Croatian Kuna
3,832
1,860
(1,012)
(3,054)
Romanian New Lei
1,261
5,567
(1,277)
(1,664)
Bulgarian Lev
385
3,778
(1,541)
(1,998)
Hungarian Forint
571
600
(576)
(846)
Kazakhstan Tenge
1,454
55,043
(8,668)
(43,149)
Ukrainian Hryvnia
6,782
32,428
(6,351)
(14,600)
Bosnian Mark
266
4,552
(768)
(2,314)
United Arab Emirates Dirham
620
-
-
(4,125)
Other
886
3,206
(897)
(2,662)
158,898
296,715
(434,448)
(166,690)
ASBISC ENTERPRISES PLC
NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
(in thousands of US$)
75
32. Financial risk management (continued)
The Company
31 December 2021
Cash at bank
and in hand
Receivables
Trade and
other
liabilities
Borrowings
US$
US$
US$
US$
US Dollar
95,906
213,260
(263,550)
(11,702)
Euro
1,646
8,632
(20,226)
(2,425)
Czech Koruna
380
-
(1,318)
-
Great British Pound
73
54
(988)
(42)
Polish Zloty
163
-
(321)
-
Other
-
1
(467)
-
98,168
221,947
(286,870)
(14,169)
31 December 2020
Cash at bank
and in hand
Receivables
Trade and
other
liabilities
Borrowings
US$
US$
US$
US$
US Dollar
114,996
214,323
(311,553)
(13,714)
Euro
1,997
7,188
(14,571)
(2,067)
Czech Koruna
767
-
(508)
-
Great British Pound
185
282
(12)
(163)
Polish Zloty
120
-
-
-
Other
-
155
(3)
-
118,065
221,948
(326,647)
(15,944)
The Company is not exposed to any material foreign exchange risk, as most of its operations are conducted in US
Dollars, the Company’s reporting currency. Any exposure to foreign exchange risk is restricted to monetary assets
denominated in foreign currencies, mainly Euro, Czech Koruna and Polish Zloty, and this risk is mitigated by the
appropriate use of currency derivative contracts.
2. Fair values
The Group and the Company
Financial instruments comprise financial assets and financial liabilities. Financial assets mainly consist of bank balances,
receivables and investments. Financial liabilities mainly consist of trade payables, factoring balances, bank overdrafts
and loans. The Directors consider that the carrying amount of the Company’s/Group’s financial instruments
approximate their fair value at the reporting date. Financial assets and financial liabilities carried at fair value through
profit or loss represent foreign currency derivative contracts categorized as a Level 2 (quoted prices (unadjusted) in
active markets for identical assets or liabilities) fair value hierarchy.
3. Capital risk management
The Group manages its capital to ensure that entities in the Group will be able to continue as a going concern while
maximizing the return to stakeholders through optimization of debt and equity. The Group’s overall strategy remains
unchanged from 2020.
The capital structure of the Group consists of debt, which includes borrowings, cash and cash equivalents and equity
attributable to equity holders of the parent, comprising issued capital, reserves and retained earnings.
Gearing ratio
The Group’s risk management committee reviews the capital structure on a semi-annual basis. As part of this review,
the committee considers the cost of capital and the risk associated with it.
ASBISC ENTERPRISES PLC
NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
(in thousands of US$)
76
32. Financial risk management (continued)
The Group
The net gearing ratio at the year-end was as follows:
2021
2020
US$
US$
Debt (i)
177,089
160,111
Cash at bank and in hand
(184,618)
(158,898)
Net debt
(7,529)
1,213
Equity (ii)
189,464
135,638
Net debt to equity ratio
-
0.9%
(i) Debt includes short-term (factoring advances, overdrafts and short-term loans) and long-term
borrowings.
(ii) Equity includes all capital and reserves.
(i) Debt includes short-term (factoring advances, overdrafts and short-term loans) and long-term
borrowings.
(ii) Equity includes all capital and reserves.
4. Fair value estimation
The table below analyses financial instruments carried at fair value by valuation method. The different levels have been
defined as follows:
• Quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1).
• Inputs other than quoted prices included within level 1 that are observable for the asset or liability,
either directly (that is, as prices) or indirectly (that is, derived from prices) (level 2).
• Inputs for the asset or liability that are not based on observable market data (that is, unobservable
inputs) (level 3).
The following table presents the fair value hierarchy of the Group’s and the Company's assets as at 31 December:
2021
2021
2020
2020
The Group
The Company
The Group
The Company
Level 2
Level 2
Level 2
Level 2
US$
US$
US$
US$
Assets
Derivative financial assets
192
164
199
164
Liabilities
Derivative financial liabilities
299
129
883
613
The Company
The net gearing ratio at the year-end was as follows:
2021
2020
US$
US$
Debt (i)
13,097
14,710
Cash at bank and in hand
(98,168)
(118,065)
Net debt
(85,071)
(103,355)
Equity (ii)
135,576
91,691
Net debt to equity ratio
-
-
ASBISC ENTERPRISES PLC
NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
(in thousands of US$)
77
32. Financial risk management (continued)
The fair value of financial instruments that are not traded in an active market (for example, unlisted equity securities)
is determined by using valuation techniques. These valuation techniques maximize the use of observable market data
where it is available and rely as little as possible on entity specific estimates. If all significant inputs required to fair
value an instrument are observable, the instrument is included in level 2.
33. Other risks
Operational risk
Operational risk is the risk that derives from the deficiencies relating to the Group’s/Company’s information technology
and control systems as well as the risk of human error and natural disasters. The Group’s/Company’s systems are
evaluated, maintained and upgraded continuously.
Compliance risk
Compliance risk is the risk of financial loss, including fines and other penalties, which arises from non-compliance with
laws and regulations of the state. The risk is limited to a significant extent due to the supervision applied by the
Compliance Officer, as well as by the monitoring controls applied by the Group/Company.
Litigation risk
Litigation risk is the risk of financial loss, interruption of the Group’s operations or any other undesirable situation that
arises from the possibility of non-execution or violation of legal contracts and consequentially of lawsuits. The risk is
restricted through the contracts used by the Group/Company to execute its operations.
Reputation risk
The risk of loss of reputation arising from the negative publicity relating to the Group’s/Company’s operations (whether
true or false) may result in a reduction of its clientele, reduction in revenue and legal cases against the Group. The
Group/Company applies procedures to minimize this risk.
Other risks
The general economic environment may affect the Group’s/Company’s operations to a great extent. Concepts such as
inflation, unemployment, and development of the gross domestic product are directly linked to the economic course
of every country and any variation in these and the economic environment in general may create chain reactions in all
areas hence affecting the Group/Company.
34. Dividends
Our dividend policy is to pay dividends at levels consistent with our growth and development plans, while maintaining
a reasonable level of liquidity. During the year, the following dividends were declared and paid by the Company:
• A final dividend of US$11,100 of US$ 0.20 per share for the year 2020
• An interim dividend of US$11,100 of US$ 0.20 per share for the year 2021
During 2020, the following dividends were declared and paid by the Company:
• A final dividend of US$ 4,162 of US $0.75 per share for the year 2019
• An interim dividend of US$ 5,550 of US$ 0.10 per share for the year 2020
The Board of Directors also proposes the payment of a final dividend of US$ 0.10 per share for the year 2021,
amounting to US$ 5,500 based on improved 2021 profitability.
ASBISC ENTERPRISES PLC
NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
(in thousands of US$)
78
35. Events after the reporting period
War between Ukraine and Russia and sanctions imposed on Russia
Following the commencement of the war between Ukraine and Russia, additional severe sanctions were imposed by
the United States of America, the European Union and some other countries on the Russian government, as well as
major financial institutions and certain other entities and individuals in Russia. In addition, restrictions have been
introduced on the supply of various goods and services to Russian entities. In response to the sanctions described
above, the Russian government has introduced certain currency control measures.
Despite the large geographical presence of the Group, it is not possible to totally weather the impact of a full-scale war
between these two countries. The Group -and the Company- is well prepared to defend its position and management
are taking the appropriate measures to mitigate the risks arising from this situation. However, the Company’s Directors
consider that the situation is critical and that it is premature to judge how it will evolve. We have a mutual
understanding with all our vendors and service providers that our partnerships will continue but we cannot warrant
that the current business can be retained due to the sanctions imposed on Russia. Already imposed and potential
future sanctions are likely to have an adverse effect on the Russian economy which -in turn- is likely to have a negative
impact on the Group’s sales. However, the financial effect is not possible to quantify at this point in time.
The Group and the Company’s Directors have evaluated the effect of the war on liquidity, currency, interest rate, and
credit risks, as well as potential impairment and revenue of the Group and the Company. Based on their assessment,
there is no significant impact on the Group’s and the Company's activities, except for credit risk and revenue.
Credit Risk
The sanctions imposed may have a direct impact on the ability of certain customers to repay the outstanding
receivables. The change in the ability of certain customers to repay the outstanding receivables may have an impact
on the Group and the Company. After the commencement of the war, the proportion of overdue receivables has not
changed significantly.
The negative impact mostly on the Ukrainian economy is also likely to increase the credit risk for many customers and
may result in additional amount of expected credit losses being recognized; however, the financial effect is not expected
to be significant, although currently this is not possible to quantify.
The current situation does not impact the Group’s and the Company's cash flows and the ability to use its available
financing lines.
Revenue
Less than 30% of the Group’s sales were generated from the Ukrainian and Russian markets. As a result of the war
and the imposed sanctions, the Group will no longer be able to maintain its operations at the same level as before in
Ukraine and Russia. Management expects to partially replace the drop-down in affected regional sales, by an increase
in the other markets where the Group has a presence (i.e., Kazakhstan, Slovakia, Poland, UAE etc.).
Therefore, the Group's and the Company’s Directors have implemented a strategy to respond to the newly arisen risks
to minimize their effect on the Group's performance.
These consolidated financial statements reflect the management’s current assessment of the impact of the Russian
and Ukrainian business environment on the operations and the financial position of the Group. The future business
environment may differ from today’s management’s assessment.