Limassol, Cyprus, 31
st
March 2022
CONSOLIDATED
NON
-FINANCIAL
REPORT FOR 2021
ASBISC ENTERPRISES PLC
Table of Contents
Consolidated Non-financial Report of ASBISc Enterprises Plc for 2021
3
Letter from the CEO
Excelling in ESG
criteria is
important for
ASBIS.
Dear Stakeholders,
I have a great pleasure to present you with ASBIS
fifth Consolidated Non-financial Report.
2021 has been another challenging year globally.
It was the second year of COVID-19 pandemics
impacting both businesses and individuals. During
the year, we also had to tackle supply chain and
logistics problems from the Far East. On top, the
end of the year brought rising tentions on the
Ukrainian/Russian/Belarussian boarders which
turned into a full scale conflict in February 2022.
Despite unfavourable external environment, in
2021 ASBIS further strengthen its business
operations, geographical presence and
competences, enhanced product offering and took
over new businesses. Growing revenues and
margin expansion have translated into a strong
cash position and best ever results in ASBIS
history. ASBIS has weathered many storms and is
thus prepared for future changes within the
demanding IT distribution industry as well as
potential further turbulences on markets and
economies.
For our shareholders we have delivered share
price growth and highest ever dividend payment.
As a result of a 5-year dividend payment history,
ASBIS has entered the WIGdiv index. We have
also focused on other stakeholders, assuring the
wellbeing of our employees, supporting our local
community on Cyprus, maintaining strong relations
with our business partners, delivering quality
products to our customers at affordable prices and
assuring all our social charges and taxes are fully
paid.
Changes taking place globally have increased the
weight of ESG (environmental, social and
governance) criteria in financial decision making.
At ASBIS we are taking sustainability seriously and
continue to work on increasing the scale of our
disclosures. For 2021, we continue to report non-
financial information under the internationally
recognized SASB Standards on top of meeting the
EU requirements. We have also added climate-
related TCFD disclosures into our report for 2021.
At the same time, step-by-step we continued to
fulfill our obligations and targets from our 2020-22
CSR Strategy. Our actions have been awarded by
obtaining the title of Climate Aware Company listed
in Poland and by entry into WIG-ESG index.
We promise to continue our actions for the benefit
of all our stakeholders in 2022.
Siarhei Kostevitch
Chairman & CEO
Consolidated Non-financial Report of ASBISc Enterprises Plc for 2021
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KEY 2021 NON-FINANCIAL INDICATORS
20,000
active customers
in 56 countries
23,000
products in portfolio
60%
transactions on-line
Subsidiaries
in 27countries
4 key
regions
of operations
240+
vendors
2,079
employees
2
distribution centers
5
private label brands
Consolidated Non-financial Report of ASBISc Enterprises Plc for 2021
5
About the Report
Internationally
recognized SASB
Standards and
climate-related
TCFD
recommendations
applied.
This Non-financial Report has been prepared by
ASBIS based on 2021 data for the whole Group.
The report also encompasses comparable
consolidated data for 2020.
As ASBIS’ shares are listed on the Warsaw Stock
Exchange in Poland, the Report has been created
in accordance with the Polish Bill of Accounting
(which implements the 2014/95/EU Directive into
Polish law) requirements. The Report has been
prepared on the Group level, as on the
consolidated level ASBIS meets the criteria of
article 55.2b. Both in 2021 and in 2020 the Group
employed more than 500 employees on average,
its assets exceeded PLN 102m and turnover
exceeded PLN 204m. Similar disclosure
requirements are also mandatory in Cyprus, where
ASBIS headquarters are located.
The Report is published together with the ASBIS
Consolidated Financial Report for 2021 along with
the Polish Ministry of Finance Bill on current and
periodical reports. The Report is compliant with the
requirement of the Polish Bill of Accounting listed
in articles 49b points 2-8.
The Report has been prepared based on policies
present in the Group as well as long-standing
practices. ASBIS has used own methodology to
prepare the Report, though it has been
supplemented by applying the internationally
recognized SASB (Sustainability Accounting
Standards Board) Standards. Following SASB’s
Sustainable Industry Classification System® we
have chosen to report within Consumer Goods
sector and Multiline and Specialty Retailers &
Distributors industry. ASBIS believes these
standards point to all financially material non-
financial aspects of its operations. On top, from
2021 ASBIS also applied TCFD’s climate-related
disclosure recommendations. The Board of
Directors confirmed that the stakeholder
materiality assessment conducted a year earlier is
valid and that are material topics are addressed in
the Report.
While preparing the report the Board of Directors
took into consideration also the non-binding EU:
(1) guidelines on non-financial reporting:
methodology for reporting non-financial
information (2017/C215/01) as well as the (2)
guidelines on non-financial reporting: supplement
on reporting climate-related information
(2019/C209/01). The Report has been created with
due diligence and care, yet it has not been audited
by any external third party.
Consolidated Non-financial Report of ASBISc Enterprises Plc for 2021
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Business model
ASBIS is one of
the leading IT
distributors in
EMEA Emerging
Markets.
OVERVIEW
ASBISc Enterprises Plc is one of the leading
distributors of Information Technology ("IT")
products in Europe, Middle East and Africa
(“EMEA”) Emerging Markets: Central and Eastern
Europe, the Baltic States, the Former Soviet
Union, the Middle East and Africa, combining a
broad geographical reach with a wide range of
products distributed on a "one-stop-shop" basis.
Our main focus is on the following countries:
Slovakia, Poland, Czech Republic, Romania,
Croatia, Slovenia, Bulgaria, Serbia, Hungary,
Middle East countries (i.e., United Arab Emirates,
Qatar and other Gulf states), Russia, Belarus,
Kazakhstan, Ukraine and Latvia.
The Group distributes IT components (to
assemblers, system integrators, local brands and
retail) as well as A-branded finished products like
desktop PCs, laptops, servers, and networking to
SMB and retail. Our IT product portfolio
encompasses a wide range of IT components,
blocks and peripherals, and mobile IT systems. We
currently purchase most of our products from
leading international manufacturers, including
Apple, Intel, Advanced Micro Devices ("AMD"),
Seagate, Western Digital, Samsung, Microsoft,
Toshiba, Dell, Acer, Lenovo and Hitachi. In
addition, a part of our revenues is comprised of
sales of IT products under our private labels:
Prestigio, Canyon, Perenio, AENO and LORGAR.
ASBIS commenced business in 1990 in Minsk and
in 1995 we incorporated our holding Company in
Cyprus and moved our headquarters to Limassol
together with all key management of the Company.
Our Cypriot headquarters support, through two
master distribution centres (located in the Czech
Republic and the United Arab Emirates), our
network of 31 warehouses located in 27 countries.
This network supplies products to the Group's in-
country operations and directly to its customers in
approximately 56 countries.
ASBIS operates in
“one-
stop-shop” model.
Consolidated Non-financial Report of ASBISc Enterprises Plc for 2021
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ASBIS OPERATIONS
FSU (Former Soviet Union)
MEA (Middle East and Africa)
CEE (Central and Eastern Europe)
LIMASSOL, CYPRUS
(HEADQUARTERS)
PRAGUE, CZECH
REPUBLIC
(DISTRIBUTION
CENTRE)
DUBAI, UAE
(DISTRIBUTION
CENTRE)
SHENZEN, CHINA
(OFFICE)
VISION
Be the leading Value Add Distributor, OEM
and Solutions Provider of IT, IoT, AI across
CEE, FSU, MEA
MISSION
represented by focus areas:
x
Develop and Market IT, IoT, AI solutions
x
Gain expertise in consultative business
x
Excel and leverage on Distribution
x
Grow profitably Own Brands
x
Manage risks and Zero regulatory issues
MISSION AND VISION
Mission and vision of ASBIS are the guidelines by
which the Board of Directors looks at the
Company and conducts business. These
are
communicated to employees and to
external
stakeholders
.
Consolidated Non-financial Report of ASBISc Enterprises Plc for 2021
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We are
honest
We promote
diversity
We are team
players
We use
good
judgment
We are
responsible
We stick to
the law and
our policies
Never
compromise
on integrity
Just say no
Select
business
partners
carefully
We are
trustworthy
ASBIS 10 GUIDING PRINCIPLES
Consolidated Non-financial Report of ASBISc Enterprises Plc for 2021
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Broad geographic
coverage
combined with a
strong local
presence.
VALUE CHAIN
The value chain starts with the end-customer whose
purchases ASBIS aims to forecast. We thus analyze
market trends, evaluate potential demand and look
for profit opportunities. Based on our analysis, we
later on select products and product groups that will
be distributed and sold. Product offering is adjusted
according to market changes and profit it generates.
Then the Company creates a strategy to develop
certain product groups and customer demands. In
2021, we had c.218 ths active articles in our offer
versus c.196 ths in 2020. The growth results from
changes made in our offering, among others adding
more private labels.
While setting the product offering, we co-operate with
our suppliers. In 2021 the number of suppliers
increased to 1,321 versus 1,231 in 2020, due to
modifications in our product offer (inc. private labels).
We have long-term relations with our suppliers based
on mutual trust and understanding of mutual needs
and constraints. Most of these are large international
companies. We strive to provide our suppliers full
visibility by reporting to them crucial information on a
daily/weekly basis, including stock levels, sales-out
reports by country, thus assisting them in monitoring
customer demand and allowing them time to
comprehend and react to specific market
peculiarities, trends and dynamics. In 2021, a
significant portion of our revenues was generated
from ten biggest suppliers, like in 2020. However, we
believe that we place no reliance on any of our
suppliers since we carry for every product category a
wide portfolio of brands. We choose new suppliers
based on the market trend demands.
Placing an order depends on the supplier: it can be
done via our supplier on-line system or email. We
operate a system of centralized purchasing through
our headquarters in Limassol, Cyprus, however we
also possess a purchasing office in China. Country
managers communicate expected sales levels and
targets, analyzed by product lines and suppliers, to
our product line managers who then identify
purchasing requirements for the forthcoming three
weeks and in turn forward this information to vice
president of product marketing who verifies and,
upon agreement, consolidates the information.
Information is then presented to the management,
holding weekly meetings to review and approve
requirements.
Suppliers deliver goods to our two distribution
centers (Prague and Dubai). The facility in Prague is
used for the distribution in Europe, while the one in
Dubai serves our operations in Middle East and
Africa and certain Central Asian countries. Our facility
center in Prague is leased and has a total area of
6,365 m2, of which 5,688 m2 is the warehouse. The
center in Dubai is owned and has an area of 4,246
m2, of which 3,294 m2 is the warehouse. The land
on which the Dubai centre was constructed is leased
from the local authorities and has an area of 6,475
m2. We strive to keep our stock, including stock in
transit, for our main product lines at a level of four
weeks of sales, and to cover four to five weeks of
revenues for other product lines in order to ensure
adequate supply, while reducing the length of time
over which we hold our inventory at our warehouses.
Consolidated Non-financial Report of ASBISc Enterprises Plc for 2021
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Having purchased the goods, we act as a non-
exclusive distributor. We are responsible for
promoting, marketing, advertising, selling, and
providing training and after-sales support for each
supplier's products in the respective markets. A
monitoring mechanism is established by the
suppliers to ensure that minimum sales targets are
met, pursuant to which we are responsible for
providing our suppliers with various reports,
including weekly inventory reports and monthly
point of sales reports. The aim of ASBIS is to be
one of the top distributors for every supplier to get
most of the supplier`s support.
We order large volumes of products to benefit from
economies of scale and resell these at competitive
prices to our customers. We have no reliance on
any single customer. Our biggest customer is only
responsible for some 3.0% of total revenues. Our
active customers (c. 20,000 in 2021, stable YoY)
can place orders via our IT platform which is called
IT4Profit and by telephone call or email. In 2021
and 2020 c.60% of sales were conducted on-line,
based on our IT4Profit platform. It allows not only
electronic trading with customers but also data
exchange between the parent company and its
subsidiaries. In all regions we co-operate both with
large enterprises and mid-size companies. In all
regions we are looking for well-established
companies with proven products and business
models. Our clients are in vast majority corporates.
These include a broad range of corporate clients:
system integrators, resellers (including value
added resellers, SMB resellers), retail companies,
PC assemblers, service centers and telecom
companies.
Once a customer files the order, we have to deliver
it. We operate through 31 local offices in 27
countries. Customer orders are mainly served
through the supply of local offices, and in the event
that local inventory levels are insufficient,
additional inventory is drawn from one of the two
distribution centers. Each local office operates its
own logistics function and is responsible for direct
shipments to its customers. Our headquarters
monitor and assess the performance of each local
logistics center by using a number of key
performance indicators, including transit time of
incoming shipments, order fulfilment, (such as
pick, pack and ship time and the percentage of
orders shipped to commitment by date and time),
on-time delivery, transport, cost per kilogram
shipped and cycle count performance. We know
average time of delivering an order is important for
our customers. Although the volume of goods has
increased yet again in 2021 we were able to
decrease the average processing time of orders to
16 hours (17 in 2020). At the end of 2021 we ran
17 Apple stores and 3 monobrands in 5 FSU
countries (17 in 2020). These provide us a direct
exposure to our customers and their floorspace
came in at 1,680 m2.
Lead time depends on supplier`s stock location
and way of delivery. It can vary from several days
to 2-3 months. Same applies for own brands as
well. Sale to the end customer is conducted by
ASBIS’ business partners and APR stores.
We think globally
and act locally
.
Consolidated Non-financial Report of ASBISc Enterprises Plc for 2021
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ASBIS VALUE CHAIN
SUPPLIERS
OFFER
CUSTOMERS
Producers of private label products
Other equipment manufacturers
Retailers and 20 stores
SMB resellers
Enterprises
Private labels
PC and server
components
Desktop and
mobile PC
Software
Smartphones
Cloud Services
Value add
solutions
Internet
of Things
IT components
OEMs (original equipment
manufacturers)
Prestigio
Perenio
Canyon
OEMs
(o
rigin
m
anufa
c
CUSTOMER
ORDERS
On-line
Off-line
TRANSPORT FROM PRODUCERS
2 DISTRIBUTION CENTRES
31 LOCAL WAREHOUSES
DELIVERY TO CUSTOMERS
AENO
LORGAR
Consolidated Non-financial Report of ASBISc Enterprises Plc for 2021
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What we put into the Group
How we process capitals
What we give back
daily operations, including
taking decisions what to order
and in what quantities
_
amendments and upgrades to
product offering, discussions
with suppliers
_
hiring and retaining of
employees
_
creating financial statements,
discussions with investors and
banks, paying taxes and social
charges
_
back-office maintenance
Financing capital
equity, generated cash as well as bank loans and factoring
arrangements
.
_
Manufacturing
capital
the production capacities of our suppliers and partners.
_
Intellectual
capital
the brands and IPs that we possess
.
_
Human
capital
our employe
es working in subsidiaries in 27 countries,
their know
-how and engagement.
_
Social
capital
strong reputation that ASBIS possesses
among its
customers and suppliers
,
our relations and impact on local
societies.
_
Natural
capital
natural resources that are used to manufacture products
that we distribute.
Financing capital
generation of cash flows that can be reinvested into the
Compa
ny or paid out as dividends.
_
Manufacturing
capital
supporting suppliers and the manufacturers
they engage,
supporting private label production in China.
_.
Intellectual
capital
development of possessed brands, especially private
labels.
_
Human
capital
development of employees, trainings, internal promotions,
new opportunities.
_
Social
capital
strengthening our relations with suppliers, customers and
local societies.
_
Natural
capital
recycling initiatives introduced.
ASBIS business can also be looked at from the perspective of six capitals that the Group possesses and processes in every day operations.
Consolidated Non-financial Report of ASBISc Enterprises Plc for 2021
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2021 was the best
year in ASBIS
history.
KEY FINANCIAL DATA
ASBIS has a history of profitable growth which is
proven by record high 2021 numbers.
The Company has been able to achieve this,
despite a vast international presence in the
emerging markets of the EMEA region and some
market turbulences in the regions and those
relating to pandemics, due to:
a well suited strategy, aimed at increasing
profitable business,
flexibility and ability to adjust to changing
market conditions,
strong and effective risk control,
long-term relationships with suppliers,
strong relationships with vendors.
The largest region for ASBIS is the FSU (Former
Soviet Union) exceeding half of our revenues in
2021 (and 2020), while the second is the CEE
(Central and Eastern Europe). The third largest is
the MEA (Middle East and Africa) region leaving
the fourth place for Western Europe (WE).
The IT distribution business is characterized by
relatively low margins. In 2021 our gross profit
margin reached 7.1% (versus 5.8% in 2020), with
the growth coming from a change in product mix
and increasing share of own brands. We try to
maintain gross margins despite competitive
environment by focusing on value added
distribution and going into markets where we have
a competitive advantage.
REVENUES (US$ m)
2021 REVENUE SPLIT (US$ m)
2,366
3,078
2020 2021
FSU
58%
CEE
21%
MEA
11%
WE & Other
10%
Consolidated Non-financial Report of ASBISc Enterprises Plc for 2021
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We pay dividends.
We thus need to balance our growth with gross
margin development as well as with the growth of
operating costs. The latter include among others
selling and logistics costs as well as employee
expenses. Despite continued pandemics in 2021
ASBIS increased its headcount. Yet, ASBIS
retained its SG&A efficiency which coupled with
growth in gross profit sufficiently covered higher
employee costs. As a result, in 2021, our EBIT
margin reached 3.7% compared to 2.4% in 2020.
Due to the strong standing of the Company, ASBIS
does not use equity financing and finances its
growth via debt and factoring. Overall, in 2021 our
net margin reached 2.5% (versus 1.5% in 2020).
ASBIS is also a dividend paying company. Our
dividend policy is to pay dividends at levels
consistent with our growth and development plans,
while maintaining a reasonable level of liquidity. To
share with shareholders, in December 2020 ASBIS
paid out an interim dividend of US$ 0.1 per share
which amounted to US$ 5.5m of cash outlay. The
AGM approved an additional US$ 0.2 per share
dividend from 2020 earnings, with dividend
payment totaling US$ 16.65m. In 2021, ASBIS
also paid an interim dividend of US$11.1m (US$
0.2 per share) in December.
EBIT (US$ m)
NET INCOME (US$ m)
57
114
2020 2021
37
77
2020 2021
Consolidated Non-financial Report of ASBISc Enterprises Plc for 2021
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We were awarded
a Climate Aware
company title.
KEY AWARDS AND ACHIEVEMENTS IN
2020-2021
ASBIS obtained many awards over the past years.
We were distinguished by our business partners
and independent rating agencies for the quality of
business that we run and quality of disclosures
made. Below we present selected awards from
2021 and comparable period.
Date
Award details
Date
Award details
July 2020
ASBIS Slovakia become Dell
EMC Best Enterprise Distributor of
the Year, received award at the
Dell Technologies Partner Awards
2020
March 2021
Second place in WSE listed
Company of the Year 2020 in the
category “Success in 2020”
organized by “Puls Biznesu”
newswire
December 2020
ASBIS Enterprises Plc announced
as 2020 #1 distributor by Western
Digital for EMEA
in category of
Enterprise HDDs
July 2021
ASBIS
became the
Great Place to
Work® Certified company
December 2020
ASBIS
Enterprises Plc was
awarded an ELITE status in AMD
EPYC Partner Program for 2020
at the field of server development
September 2021
ASBIS became part of WIG-ESG
index which brings together listed
on
WSE companies reco
gnized as
socially responsible
December 2020
Hewlett
Packard Enterprise
awarded ASBIS Belarus VAD
Team, "Success of the 2020“
award
September 2021
In the third edition of the
Companies Climate Awareness
Survey, ASBIS was among the 7
companies with the highest
ratings, receiving the title Climate
Aware Company
December 2020
ASBIS Middle East awarded Best
Distributor 2020 by the Reseller
Forum and Reseller Excellence
Awards 2020
October 2021
ASBIS CFO, Marios Christou, was
awarded the title of “The CFO of
the Year” by EY at the 17
th
CFO
Management Forum
& Awards
Consolidated Non-financial Report of ASBISc Enterprises Plc for 2021
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We engage in
activities of
various
associations
We engage in activities of various associations.
Both in Cyprus and Limassol where ASBIS
headquarters are located as well as in Warsaw
(Poland) where our shares are listed. We present
the list of these associations below.
CYPRUS CHAMBER OF COMMERCE AND INDUSTRY (CCCI)
LIMASSOL CHAMBER OF COMMERCE AND INDUSTRY (LCCI)
is a private corporate body functioning under special law and is
financially independent, free of any influence by the state. The CCCI
is the union of Cypriot businessmen, the interests of whom it
promotes by submitting to the government and the Parliament the
members’ positions on matters in which they are involved, while,
through its participation in tripartite bodies and committees, it
conveys and promotes the views of the business community. The
CCCI was founded in 1927 and in 1963, a new structure was
adopted, which remains in operation to date. The membership of the
CCCI exceeds 8,000 enterprises from the whole spectrum of
business activity. Affiliated to it are more than 140 Professional
Associations from the trade, industry and services sectors.
was established in its present form in 1962 and represented the first
concerted effort of the Limassol business community to have an
organisation to defend its interests and promote the economic
development of the Limassol district. From its very inception the
Limassol Chamber of Commerce & Industry has played a leading role
in the economic life of Limassol, either by operating as a pressure
group towards the realisation of vitally important economic projects
or by developing concrete initiatives of its own in that direction. Over
the years the Limassol Chamber has continued
to be at the forefront
of initiatives aiming to achieve optimum economic development for
Limassol.
CYPRUS INTERNATIONAL BUSINESS ASSOCIATION (CIBA)
POLISH ASSOCIATION OF LISTED COMPANIES
was established in 1992 as a registered not-for-profit company limited
by guarantee. CIBA came to existence on the initiative of a number
of expatriate business executives who had moved their international
operations to Cyprus in order to benefit from the island’s strategic
location, bridging Europe to Middle East Africa and the Far East, as
well as to take advantage of the island’s relaxed atmosphere and
Mediterranean climate and its rather simple but competitive and
effective tax regime. Ever since its creation, CIBA has gone to great
lengths to represent and safeguard the interests of the international
businesses, t
heir international shareholders
, managers and
personnel
.
is a self-government organization of companies listed on the Warsaw
Stock Exchange, in which the membership is voluntary. The
Association undertakes the works conducive to development of
capital market through educational, promotion, and lobbying
activities. It acts to integrate the environment of securities issuers by
organizing training and seminars; it represents common interest of
this group of entities. The basic method of Association’s work is to
communicate to the market regulators the expectations concerning
the improvement of securities market performance, and to formulate
the proposals to change legal regulations, which would increase the
stock exchange attractiveness as a place, where the capital for
economic entities can be raised.
Consolidated Non-financial Report of ASBISc Enterprises Plc for 2021
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We increase our
presence in WSE
indices.
Our successes on the business front and
transparency on the sustainability front make
ASBIS a company that is increasingly present in
key indices. Below we present the list of indices of
Warsaw Stock Exchange of which ASBIS is a part
of at the date of the Report publication:
WIG-ESG – index of companies considered
as socially responsible,
mWIG40 – index of 40 mid-cap companies
that do not meet the criteria to enter the
WIG20 index,
WIG140 – index of companies that are part of
either WIG20, mWIG40 and sWIG80 indices,
mWIGTR – index of 40 mid-cap companies
that do not meet the criteria to enter the
WIG20 index, constructed on a total return
basis,
WIGdiv – index of companies that have paid
dividends in the last five consequetive years,
WIG – a broad market index ofn the WSE
exchange.
WIG-ESG
index member
WIGdiv
index member
mWIG40
index member
Consolidated Non-financial Report of ASBISc Enterprises Plc for 2021
19
Our business
strategy is linked
with our CSR
strategy
STRATEGY
ASBIS possesses both a business strategy and a
CSR (corporate social responsibility) strategy.
Business strategy
Our business strategy remains the same over the
years. ASBIS intends to grow its business and
increase its profitability, mainly by improving its
operating efficiency in the distribution of IT
components and by increasing sales of its private
label products. This is to be achieved by:
increasing or retaining sales and market share
in the CEE region, selected FSU countries and
the Middle East and Africa;
enhancing product portfolio (smartphones, IT
components, VAD) and improving gross profit
margin;
further optimizing our private label business;
controlling our cost structure, enhancing
operating efficiency and automated processes,
including our online sales channels;
engaging in alternative investments and new
technologies.
We will continue to implement the strategy as well
as conduct any necessary tactical changes
resulting from short- and medium-term changes on
the IT distribution market.
CSR Strategy
Our actions show our commitment to all our
stakeholders and following the path indicated in
our corporate social responsibility strategy. Our
CSR strategy is linked to our business strategy and
takes into account ASBIS’ distribution oriented
business model which places us in the centre
between the largest hardware producers and
corporate clients (large enterprises and SMEs).
The Company’s CSR strategy has been created
for the years 2020-22 during which ASBIS would
like to focus on: innovation, improvement and
integration. We are thus one year advanced in our
strategy and believe that progress has been made
on all fronts:
we expand our offer not only via latest
inventions and cloud-based solutions but also
through environmentally friendly ones,
we improve the efficiency of our operations,
understanding of our environmental and
climate footprint and recycling,
we continue to provide an integrated and open
workspace for all employees and prepare more
initiatives so they can positively affect the
environment and climate.
Consolidated Non-financial Report of ASBISc Enterprises Plc for 2021
20
ASBIS 2020-22 CSR STRATEGY
Innovate
new products, new solutions, new ideas
TARGET
ADVANCEMENT
We want to offer our customers new products that will be more environmental friendly. We will be introducing these
once these are available from producers.
We have conducted discussions with producers and requested details regarding their eco
-friendly offering. We have implemented these
into
our product offering. One example is
Prestigio private label that launched power banks which fi
rst in Europe use graphene with exceptional
thermal conductivity and electro
mobility that is safe for the environment. Also, Perenio IoT, another our private label,
introduced a smart Eco-
heater to its portfolio.
Our new private label AENO, offering products from small household
appliances segment, is based, among other, on
reliability (2
-year guarantee) and eco-friendliness of packaging materials (no plastic). Also, the packaging of our LORGAR private label is
100% eco-friendly.
Our aim is to offer our customers new solutions that will enable them to work more efficiently and conveniently both
at their offices, while travelling and from homes. We envisage workplaces to be supported by the pace of changing
technology.
We have conducted
strategic sessions and surveys with our customers to increase the understanding of their current and future needs.
These have been
modified to some extent by the pandemics. One example of new solutions is an agreement with Kemp Technologies,
leader in powe
ring always-on application experience to supply load balancing and application delivery software products and solutions.
Another example is cooperation of Perenio and Transatel to
solve the challenge of distributed workforce with enhanced and scalable
connectivity for employees working remotely.
We plan to support new ideas within technology and have the industry innovation in our offer.
We are progressing with our plans. One example is the
Prestigio Touch and Click Keyboard. Works with Clevetura have been finalized on
the
world's first laptop with a built
-in touch panel in TouchOnKeys™ technology. Also, within Prestigio, we have launched a comprehensive
ePrice Labels service, electronic labels significantly improving price ma
nagement and environmental impact of our clients.
Another example
is the
innovative Perenio Ionic Shield™ ion diffuser, a compact mobile device that emits specific composition of ion co
mplex, protecting the
human
beings against known coronaviruses, including SARS-CoV-2. It took ASBIS 15 months to design, develop, test, certify and prepare
the product for production.
Consolidated Non-financial Report of ASBISc Enterprises Plc for 2021
21
Improve
more efficiency, more understanding, more recycling
TARGET
ADVANCEMENT
We want to be more efficient in our operations so as to offer additional value for our customers and lower our
environmental footprint.
We have introduced a policy that all new corporate cars must be hybrid, to reduce our environmental footprint.
We have analysed eco-
friendliness of our warehouse machinery to understand our electricity consumption.
As a result, w
e are also in the process of builing a new
warehouse in Prague.
The facility should be ready by the end of this year. It will be a modern building with good insulation,
energy efficient
lighting and heating as well as solar power.
Our aim is to obtain an in-depth understanding of our environmental and climate impact on each level of our value
chain.
We appointed an officer to
analyse the environmental and climate impact. From 2020 we started calculations of our carbon footprint and
increased the scale of climate disclosures
. As a result, ASBIS was awarded the title of Climate Aware company and we entered the WIG-
ESG i
ndex. In this report we
continued to expand our climate disclosures, among other using TCFD recommendations. We present climate
related risk and opportunities, climate scenarios and Scope 1,
Scope 2 and selected Scope 3 CO
2
e calculations. We will continue with
expanding our understanding of Scope 3 GHG emissions in upcoming years.
We plan to launch more recycling initiatives together with our suppliers and broaden our offer of refurbished
products.
We i
nvested in the Eco friendly and full recyclable packaging for private labels. Also, in February 2021 we launched a
Breezy company that
trades
-in used Apple and other brand products, for which the
current owner will receive a discount on the purchase of new devices of these
companies. These products
are thoroughly diagnosed, refurbished and serviced by Breezy professionals. Devices that are
reusable will go
on sale at reduced prices. The remaining products will be recycled.
The project is in a start-up phase in 5 countries. In 2021 some 700
phones, laptops and other electronic equipment have been recirculated into the market.
Consolidated Non-financial Report of ASBISc Enterprises Plc for 2021
22
Integrate
people with data, people with people, people with environment
TARGET
ADVANCEMENT
We want to help our customers integrate more with data possessed. By providing them with the latest technology and
solutions we support them in harnessing data, which is needed to run their businesses more efficiently.
We offer
our customers the latest technology, solutions and support. We have invested in latest security systems for data protection.
With the
help of our in
-
house IT4Profit platform, we manage to collect a vast amount of data about our financial performance, our suppliers’ and
customers’ needs, as well as other useful information. This data is available in real time to our personnel, who can use it to evaluate the
business environment better and take more informed decisions. We also promote the integration of our
personnel with state-of-the
-art
collaboration software.
Our aim is to continue to provide an open and supporting workplace for our employees. We will continue to work on
diversity to shift the representation of different nationalities and genders on senior levels within the Group.
Diversity lies at the heart of ASBIS
operating in 56 countries, across different nationalities, cultures
and religions. Every day we work to create
an open and supporting workplace where everyone would feel included. We also aim to improve the working conditions in physical aspect
and
are in the process of moving to new offices in Cyprus with much better facilities which will enhance the working experience.
ASBIS has
also been cerified as a Great Place to Work®, due to its efforts to create a workplace
where every employee has a consistently positive
experience and demonstrated that the powerful culture unlocks the full potential of people to drive real business results
.Also, we have m
ade
significant improvement in
board gender diversity – women consititute 30% of Board of Directors with one
being an Executive Director and
the other a Non-Executive Director.
We plan to launch more actions among our employees to help them understand their and ASBIS environmental and
climate impact and work towards its minimisation.
We are in the
process of planning seminars and workshops in multiple subsidiaries and corporate offices for environmental awareness.
These
have been delayed by COVID-19.
Consolidated Non-financial Report of ASBISc Enterprises Plc for 2021
23
UN SDGs
ASBIS CSR strategy as well as every day
operations support the United Nations
Sustainable Development Goals for 2015-
2030.
1. We have subsidiaries in 27 countries and operate in some 56 countries,
supporting stakeholders in those countries.
2.
We offer our employees fair wages and permanent employment contracts.
1. We introduce innovative solutions into our portfolio
and acquire new ideas.
2. We help our customers in emerging markets upgrade
their IT infrastructure
to more environmentally sound one.
3. We support local communities.
1. We engage in waste reduction initiatives.
2. We support responsible purchases by our customers.
3. We expand the Breezy initiative for
trading in used appliances and giving
them the second life or recycling these.
1. We broaden our eco-friendly product offering.
2. We measure our carbon footprint.
3. We introduced a policy that all new corporate cars must be hybrid.
Consolidated Non-financial Report of ASBISc Enterprises Plc for 2021
24
Corporate governance
Corporate
governance
matters for ASBIS.
ASBIS’ shares are listed on the Warsaw Stock
Exchange (WSE) in Poland, on the main market.
We follow and comply with the rules that are
prevailing on our main listing place, i.e. the Code
of Best Practices of WSE (issued in 2021) which
was approved by ASBIS’ Board of Directors. Each
year together with its annual report the Company
files a statement of compliance. If any rules are not
followed, these are communicated and explained
(following the “comply or explain rule”).
Although our listing takes place in Warsaw where
civil law prevails, the corporate rules and corporate
structure originate from Cyprus, where we are
incorporated and where common law prevails. We
thus operate based on publically available
documents, which were filled with the Registrar of
Companies in Cyprus. These are:
Memorandum of Association – which contains
fundamental conditions based on which we
are allowed to operate,
Articles of Association – which define the
responsibilities of directors, the kind of
business to be undertaken and ways in which
shareholders can influence the Board of
Directors.
The Company is governed by a Board of Directors
(BoD) which consists of both executive directors
(EDs) and non-executive directors (NEDs), all
managed by the CEO (Chief Executive Officer).
The aim of executive directors is to set the strategy
of the Company and to manage the Company by
supervising managers, assuring financing is
available and managing risk. The role of non-
executive directors is to supervise the way the
executive directors perform their duties, to
scrutinize the performance of BoD and
constructively challenge its decisions.
The management of the business and the conduct
of the affairs of the Company are vested in the
directors. The Board of Directors should maintain
a healthy system of internal controls in order to
safeguard shareholders’ investments and the
Company’s assets. The Directors may exercise all
the powers of the Company to borrow money, and
to charge or mortgage its undertaking, property
and uncalled capital, or any part thereof, and to
issue debentures, debenture stock and other
securities whether outright or as security for any
debt, liability or obligation of the Company or of any
third party.
Consolidated Non-financial Report of ASBISc Enterprises Plc for 2021
25
All shareholders
are equal - one
ASBIS share
equals one vote.
The Board of Directors performs its work on a
permanent basis. However, one third of directors
should retire every year by rotation. We have six
directors at the date of publication of the Report
(four are executive and two non-executive). So, at
least two (or more) directors need to retire and be
re-elected every year. None of the directors is an
employee representative. The non-executive
directors are independent ones.
The Board of Directors is appointed by the General
Meeting of Shareholders which takes place at least
annually. The annual general meeting approves
the financial statements of the Company,
distribution of profits (dividend) and discharges the
Board of Directors members from their liabilities
related to former year performance, elects
directors in place of those retiring, appoints them
and sets the remuneration of auditors. Other
general meetings are extraordinary meetings
taking place on special occasions.
An annual general meeting, and a meeting for the
passing of a special resolution, shall be called by
at least twenty one days’ notice in writing, and all
other meetings shall be called by at least fourteen
days’ notice in writing. The notice shall be
exclusive of the day on which it is served or
deemed to be served and of the day for which it is
given. It shall specify the place, the day and the
hour of meeting and in cases of special business,
the general nature of that business. The
Company's Articles of Association do not provide
for general meetings to be held outside Cyprus.
The largest shareholder in the Company is its
founder and the CEO, Siarhei Kostevitch. He
controls the Company having effectively an almost
37% stake. The management is also a shareholder
in ASBIS. Three remaining executive directors
hold combined a c.1.8% stake. As of the day of
publication of the Report, there is no institutional
investor above the 5% reporting hurdle. As a
result, ASBIS has a sizeable free float of c.63%.
Each share confers the right to cast one vote. Each
shareholder is entitled to attend the meeting, to
address the meeting, and, if voting rights accrue to
him or her, to exercise such voting rights.
Shareholders may attend meetings in person or be
represented by a proxy authorized in writing. No
special rights attach to any specific shares and
there are no different classes of shares.
There is both an Audit Committee and a
Remuneration Committee at ASBIS. The Audit
Committee consists of the two NEDs and one
executive director (the CFO of the Group) who is
an attending member. The Audit Committee meets
at least twice a year. The Audit Committee is
responsible for ensuring that the Group’s financial
performance is properly monitored, controlled and
reported. It also meets the auditors and reviews
reports from the auditors relating to accounts and
internal control systems. The Audit Committee
meets at least once a year with the auditors.
Consolidated Non-financial Report of ASBISc Enterprises Plc for 2021
26
ASBIS has both
an Audit and a
Remuneration
Committee.
The Remuneration Committee encompasses the
two NEDs and an executive director (the CEO)
who is an attending member. It sets and reviews
the scale and structure of the executive Directors’
remuneration packages, including share options
and terms of their service contracts. The
remuneration and the terms and conditions of the
non-executive Directors are determined by the
Directors with due regard to the interests of the
shareholders and the performance of the Group.
The Remuneration Committee also makes
recommendations to the Board concerning the
allocation of share options and/or treasury shares
to directors, managers and employees.
According to Articles of Association, remuneration
of the directors will be determined in general
meetings on the recommendation of the
Remuneration Committee. Any director performing
special or extraordinary services in the conduct of
the Company’s business or in discharge of his
duties as director, or who travels or resides abroad
in discharge of his duties as director may be paid
such extra remuneration as determined by the
directors, upon recommendation by the
Remuneration Committee. Executive Directors are
also entitled to receive a bonus every quarter
depending upon quarterly results. The bonus
consists of a certain amount or percentage which
is agreed and described in each Director’s service
agreements or contracts, as applicable, however,
Directors only receive such a bonus to the extent
profit meets certain pre-set budgetary figures.
Also, in 2020 in line with EU requirements, ASBIS’
general meeting approved the remuneration policy
for the Board of Directors. The first statement on
remuneration was presented to the AGM in 2021,
the next one will be presented to the AGM in 2022.
Our Board of Directors is diverse in terms of
experience and has assigned responsibilities.
Siarhei Kostevitch, the CEO, is primarily
responsible for carrying out strategic plans and
policies as established by the Board of Directors.
Constantinos Tziamalis, deputy CEO, has the
primary responsibility for the accounts receivable
and supervision of all the Credit Control
Department activities. He is also in charge of the
Investor Relations department. He has to ensure
full and timely public disclosure of material
information, as well as coordination with legal staff
in complying with securities exchanges'
requirements. On top, Constantions, is also
responsible for risk identification and mitigation,
and climate change and environment protection.
Marios Christou, the CFO of the Group, is
responsible for handling of funds, keeping financial
records and financial planning of the company. In
addition, he controls the Treasury Department
which is concerned with the receipt, custody,
investment and disbursement of corporate funds,
as well as borrowings. Julia Prihodko, Chief
Human Relations Officer, manages and provides
strategy on the people function for a Group, leads
the implementation of HR policies and programs.
Consolidated Non-financial Report of ASBISc Enterprises Plc for 2021
27
Diverse
candidates
are in our pipeline
Competences of our non-executive directives are
also diverse. Maria Petridou has a financial
background while Tasos A. Penteli has a legal
background.
We also care for board stability. Our board has
been relatively stable over the last five years with
the rotation level (understood as changes in
persons holding those positions) reaching 17% in
that period. Specifically, board rotation reached
0% in 2020, yet a high 50% in 2021 when Julia
Prihodko was appointed an Executive Director,
replacing Yuri Ulasovich. Also, Demos Demou,
Non-executive Director, resigned.
On ASBIS board level there was no gender
diversity in 2020, as all board members were male.
As a Company we understand that various views
can contribute to ASBIS using all opportunities
while taking all risks into account. At the end of
2021, there were two women on ASBIS board –
one was an Executive Director and one a Non-
executive Director. As a result, women constitute
30% of our Board of Directors.
As gender diversity is important to us, we are
working on the pipeline of women in senior
positions. If we take all the boards of our
subsidiaries into account, as many as 17 women
sit on our boards, which translates into a sizeable
49% share. The picture also looks more favourably
if we look at split of management (understood as
in SASB as board plus store managers) where at
the end of 2021 47% (40% end-2020) share were
women versus 34% share among remaining
employees in 2021 (32% in 2020). In terms of
ethnic diversity, at ASBIS we have no Hispanic and
Afro-American employees. 2% share of
employees had Asian origins while the remaining
represent the white race in 2021.
2020
Male Female
Management
(SASB)
29 19
All other
1,211 578
2021
Male Female
Management
(SASB)
31 27
All other
1,337 684
2020 2021
Asian White Asian White
Management (SASB)
2 46 3 55
All other employees
31 1,758 34 1,987
Consolidated Non-financial Report of ASBISc Enterprises Plc for 2021
28
CORPORATE GOVERNANCE
APPOINTS
Non-executive officers
supervise the decisions taken by the executive directors,
support the Company with their experience and independent
judgement
Executives
Non-
executives
Siarhei Kostevitch
Chairman, Chief Executive Officer
Constantinos Tziamalis
Deputy CEO
Marios Christou
Chief Financial Officer
Julia Prihodko
Chief Human Relations Officer
Tasos A.Pantelli, Non-executive Director
CEO & Founder
c.37%
Free-float
c.63%
TOTAL
100%
approves the annual financial statements of the Company,
decides on profit distribution (dividend),
appoints Board of Directors (both executive and non-
executive officers)
Executive officers
set the strategy for the Company,
supervise all the key elements of the Company’s business:
operations, finance, risk, plans
SHAREHOLDERS’ MEETING
(gathers at least once a year)
BOARD OF DIRECTORS
(consists of at least 3 directors)
Maria Petridou, Non-executive Director
Consolidated Non-financial Report of ASBISc Enterprises Plc for 2021
29
Stakeholders
All stakeholders
are important to
ASBIS.
At ASBIS we take all our stakeholders into account
while conducting our business operations. When
preparing this Report the Board of Directors
analysed and confirmed that the earlier identified
stakeholder groups remained valid despite
pandemics.
The stakeholder groups were selected for the
purpose of the first Non-financial Report taking into
account several criteria. First, based on whether
they are external or internal to the Company.
Secondly, we looked at their interest in the
Company, whether they contact us regularly and
what type of information they seek. Thirdly, we
analyzed the impact they have on our Company.
Fourthly, we analyzed what impact we have on
them.
As a result, seven groups of stakeholders were
identified: capital market participants (analysts and
investors) and financing institutions (banks,
insurers, factoring companies), employees, local
societies, end customers, suppliers and service
providers, business partners as well as the
governing and public institutions.
At the beginning of 2021 ASBIS updated the
stakeholder materiality matrix via an on-line
survey. Based on this survey, ASBIS identified
matters that: (1) are most important to
stakeholders and (2) that stakeholders believe are
going to have the strongest impact on ASBIS
business model. The Board of Directors reviewed
this materiality matrix and indicated it is up to date
and will be used for the 2021 Report.
The survey encompassed matters from six broad
areas that are reported by ASBIS: (1) employee
and social issues, (2) environmental and climate
issues, (3) financial elements and risk
management, (4) product and customer
experience, (5) legal and ethical matters and (6)
relations with local communities.
As presented below, stakeholders differed in
assessment of importance and impact of those six
areas.
Area
Materiality
Impact
Employee and social issues
3.3 3.3
Environmental and climate
issues
2.9 3.1
Financial elements and risk
management
4.1 4.2
Product and customer
experience
3.9 4.0
Legal and ethical matters
4.3 4.3
Relations with local
communities
3.3 3.1
Consolidated Non-financial Report of ASBISc Enterprises Plc for 2021
30
Legal and ethical
matters were of
highest
importance to
stakeholders.
Within the 2021 stakeholder survey, participants
were asked to rate several topics under each area.
For each topic they were asked to state the
importance of that topic to them and the scale of
possible impact of that matter on ASBIS’
operations in upcoming years. The rating was from
0 (zero, least important, the smallest impact) to 5
(five, most important, the strongest impact).
The survey revealed that the most important areas
for stakeholders are also the ones stakeholders
expect to have the strongest impact on ASBIS in
upcoming years. Two areas with the highest
number of points are: (1) financial matters and risk
management and (2) legal and ethical matters.
Within the financial matters and risk management
financial stability ranked the highest both in terms
of importance and impact. It was followed by
building shareholder value and reporting
transparency. Within the legal and ethical matters
cybersecurity and data protection were rated
above strong corporate governance and ethical
practices throughout the value chain in terms of
impact on ASBIS’ operations.
Answers in relation to employee and social matters
pointed to fair and decent employment conditions
throughout the value chain as most important and
with the highest impact. These were followed by
equal development opportunities for all employees
and then employment stability. Within the relations
with local communities area, creating new jobs and
opportunities scored the highest.
Product and customer experience area was rated
higher both in terms of importance and impact than
environmental and climate issues. Within the
product and customer experience area two
elements were highlighted by stakeholders: long-
term relations with suppliers and quality of
products distributed. Within the environmental and
climate impact sustainable development policy
with targets came in first.
ASBIS will continue to monitor aspects of its
operations that are of high importance to
stakeholders and those that stakeholders believe
will be most crucial to its business model.
Our
stakeholder materiality
matrix is up to date
Consolidated Non-financial Report of ASBISc Enterprises Plc for 2021
31
ASBIS STAKEHOLDERS
ASBIS
Employees
End-customers
Business partners
Capital market
participants and financial
institutions
Governing and
public institutions
Suppliers and service providers
Local societies
Consolidated Non-financial Report of ASBISc Enterprises Plc for 2021
32
Capital market participants
and financial institutions
Suppliers
and service providers
End-customers Business partners Employees
Governing and public institutions
Local societies
Who are
they?
This is a varied group of stakeholders.
Capital market participants include: analyst
issuing recommendations for ASBIS,
institutional investors (mutual funds and
pension funds, Polish and international
ones) and
individual
investors. Financial
institutions include insurers, banks as well
as factoring companies.
Suppliers are companies from
which we source goods that we
resell
later. We co-
operate with
suppliers who produce
for us our
private label products
as well as
with suppliers from which we
obtain third party goods, e.g. OEM
(original equipment
manufacturers). Service providers
include logistics operators that
transport the goods from our
distribution centers to our
customers.
People who ultimately use
the products that
we are
selling, both our private
labels as well as the third
part
y
hardware and software.
Also, people coming directly
into our Apple Premium
Reseller stores are also our
end
-customers.
Business partners other
than our suppliers are
vendors/ resellers to whom
we sell our goods, large
retail networks to which we
also deliver our products
as well as
enterprises.
These are a diverse group, as
ASBIS’ operations are
conducted in 4 region
s
of the
EMEA markets. On top, the
Group’s employees have
different functions, ranging from
administration and finance, to
logistics and management,
marketing and sales
.
The governing bodies and public
institutions are an important
stakeholder of ASBIS. These
include not only institutions based
in Cyprus, where the headquarters
are located, but in each of the
countries present and especially in
Poland (in Warsaw), where ASBIS’
shares are listed.
Local societies for ASBIS
are located in Cyprus, i.e.
where the
Company’s
headquarters are situated.
We treat families of our
employees as our local
stakeholders.
Why are they
important to
us?
Shareholders (investors) are the owners of
our Company. Analysts issue reports and
value our Company, while financing
institutions support our development by
financing part of our undertakings and
insuring our receivables.
Suppliers are an important part of
our value chain. From our
suppliers we can obtain products
that we later sell and resell which
are key to our business and can
constitute our competitive
advantage.
Service providers
deliver the products to business
partners
and end-customers.
Foreseeing and meeting the
needs and wishes
of
end-
customers is key to ASBIS
business model and well-
being.
Thanks to business
partners ASBIS can exists.
These are the entities to
which we sell goods and
products.
The Group’s employees are the
most important internal
stakeholders. ASBIS operates
mostly
thanks to them.
ASBIS is a transparent Company,
abiding the law
s
in each of the
countries of operations. Proper
relations with all institutions in all
countries are key to ASBIS’ well-
being.
People working and living
close to Limassol and on
Cyprus as well as their
families.
How do we
engage?
Building the Company’s value is a priority
to Board of Directors and is a key factor
while deciding on taking on new projects.
The Board of Directors is focused on
transparency in its relations with the
stakeholders. Each quarter ASBIS
prepares a comprehensive financial report
together with management’s analysis.
There is a meeting in Warsaw (place of
listing)
or videoconference
after each
quarterly numbers publication, during
which top executives present key
developments
and the Company’s outlook
for the next quarters. ASBIS also
participates in investors’ conferences,
where one
-on-
one and group meetings are
held. The Board of Directors is responsive
to the needs of shareholders, e.g. ASBIS
introduced a policy of
reporting
monthly
sales data via a current report. Top
executives also provide all necessary
information to financing institutions and
conduct one-on-one meetings.
ASBIS focuses on long-term
relations with
its
suppliers, based
on mutual trust, respect and
understanding of one another’s
needs a
nd constraints.
Seeing that
fighting bribery and corruption as
well as HR policies are important,
we have formalized them on the
Group level.
End-customer satisfaction is
of high importance to ASBIS.
We focus our actions so that
we deliver the best possible
products for the best
possible price. Thus, we
focus on the quality of
products and minimization of
warranties. Should these
materialize, we aim for the
warranty process
to be as
smooth as possible (we have
an influence on this in case
of our private labels). We
believe that by selling better
quality products we protect
the environment as we limit
electronic waste.
The Group maintains long-
term relationships with all
key
vendors,
resellers and
retail networks in all the
regions of its operations.
ASBIS’ management team is
focused on
providing best
possible conditions to its
employees. The managers run
an open dialog, monitor the
performance regularly and give
constructive feedback. We also
offer
development possibilities
and market remuneration
supplemented
by perks.
The Company pays all due taxes
and social payments and provides
all necessary reports describing its
operations. This
fifth Non-
financial
R
eport
is an example of ASBIS’
transparent and outgoing
approach.
ASBIS is an important
employer in the Limassol
region
in Cyprus.
Families
of our employees benefit
from the stable
employment and good
working conditions
that we
provide. Each year ASBIS
also donates money to
charities
and engages in
initiatives that are
important to locals
.
Consolidated Non-financial Report of ASBISc Enterprises Plc for 2021
33
ASBIS STAKEHOLDER SURVEY
3.0
4.0
5.0
3.0 4.0
5.0
1
2
10
4
5
6
8
7
3
9
MATTERS IMPORTANT FOR STAKEHOLDERS
MATTERS WITH HIGH IMPACT
Employee and social issues
1
Fair and decent employment conditions
Environmental and climate issues
2
Sustainable development policy
with targets
Product and customer experience
3
Financial stability
4
Transparency of reporting
5
Building shareholder value
Financial elements and risk management
6
Long
-term relations with suppliers
7
Quality of products distributed
Legal and ethical matters
8
Strong corporate governance
9
Cybersecurity and data protection
Relations with local communities
10
Creating new jobs and opportunities
in the region
Consolidated Non-financial Report of ASBISc Enterprises Plc for 2021
34
Policies related to social and employee matters
We are honest
What we say is true and
forthcoming. We are open
and transparent in our
communications with each
other, our partners and
customers.
We recognize that our employees are our most
important stakeholders. We care both for the
employee as well as for broader social issues.
EMPLOYEE MATTERS
We believe that the success of our Company
depends on our employees, their know-how,
engagement, flexibility and ability to cope with
everyday situations and delivery of ASBIS
strategy. We want to be a valued and attractive
employer on all the markets we operate on via our
subsidiaries. It is a challenge as ASBIS operates
in some 56 countries and had subsidiaries and
employees in 27 of them at the end of 2021.
Countries we operate fall in different regions with
different cultures and religions. Only some 8% of
our employees work for the parent company, with
the balance working for subsidiaries. In 2021, we
employed on average 2,079 people, up 13% YoY.
AVERAGE NUMBER OF EMPLOYEES
2021 EMPLOYEES BY FUNCTIONS
2020 EMPLOYEES BY FUNCTIONS
150
167
1,837
2,079
2020 2021
Parent company Group employees
Sales and
marketing
,
1,093
Administration
and IT, 358
Finance,
197
Logistics,
431
Sales and
marketing
,
954
Administration
and IT, 343
Finance,
179
Logistics,
361
Consolidated Non-financial Report of ASBISc Enterprises Plc for 2021
35
We are diverse in
terms of
nationalities,
gender and age
The most common form of employment at ASBIS
is a permanent position. This type of employment
applied to some 98% of employees in 2021, stable
YoY.
Having subsidiaries in 27 countries, we are a
diverse Company. More than 60% of our
employees are employed in the FSU region. The
second largest region based on employment is the
CEE region, which employed some 31% of
average number of employees in 2021.
2021 AVERAGE EMPLOYEES
BY REGIONS
ASBIS employees are diverse in terms of age. In
2021 some 64% of our employees were between
30 to 50 years old, while around 25% were below
30 years old. On top, some 34% of our employees
in 2021 were women (33% in 2020).
2021 AVEARGE EMPLOYEES BY AGE
In 2021 we hired on average 613 people, the
majority also in the FSU region. Also, 469 people
left ASBIS in 2021. Also, we calculate voluntary
and involuntary turnover of our employees in
stores. In 2021, the voluntary turnover in stores
reached c.19% and involuntary c.37%.
The reason why we have been successful in hiring
and retaining employees is that we have a
comprehensive HR Management Policy at the
Group level to standardize processes related to
Human Resources. Our HR Management Policy
encompasses six key topics: hiring, team building,
motivation, leadership, diversity and anti-mobbing.
On top, it also addresses employer branding
actions.
FSU
62%
CEE
31%
MEA
3%
Other
4%
below 30
years old
25%
30 years
old to 50
64%
above 50
years old
11%
Consolidated Non-financial Report of ASBISc Enterprises Plc for 2021
36
We promote
diversity
We recognize that each of
us is different and that
each person deserves
respect. We promote
diversity in opinions and in
workforce. We employ
people of various
nationalities, cultures,
religions, ages and
gender.
The aim of the hiring process is to find the right
candidates to fill in for our vacancies and to identify
and attract people who will be building the
Company with us. The recruitment process is
oriented on: (1) judging the candidates based on
their competences, (2) assuring objectivity of
assessment, also by using IT tools, (3) giving equal
opportunities to candidates regardless of their
gender, social or marital status, age or disabilities,
and (4) respecting their rights and relevant laws.
While filling in a position we resort to internal and
external recruitment. We search for employees
from within ASBIS to allow them to develop as well
as advertise the opening outside. If possible, we
prioritize internal promotions versus external to
promote long-term commitments. While searching
for new talents we rely on our Employer Branding
initiatives. To increase the transparency and
objectivity of the hiring process each candidate has
at least two meetings with ASBIS managers with
different levels of seniority, before a decision is
taken.
We understand that we are stronger as a team. To
build and maintain our team we need to focus on:
proper onboarding of our new hires, motivation of
our employees and building leaders that will shape
the future of ASBIS. We want our new hires to feel
welcomed and needed the moment they cross the
doors of ASBIS offices. We believe this is a key to
retaining them.
It is our aim to acknowledge all employees with our
Mission and Vision, corporate culture as well as to
help them identify new roles and responsibilities.
We aim to ensure that our employees are
equipped with relevant tools and resources to
perform their tasks and that their adaptation is
effective and comfortable. The welcome package
for each of our new employees includes a:
welcome letter, employment contract, information
form, details of the Company’s structure, job
description, documents that need to be filled in, a
handbook with corporate policies and a list of
trainings to be performed. Our policies are aimed
to shorten the time it takes an employee to become
an effective member of our team.
Hire the best
Build a team
Consolidated Non-financial Report of ASBISc Enterprises Plc for 2021
37
We are team
players
Every employee is
important to us. We
recognize that together we
can achieve more. We
foster our team spirit.
We believe that the best way to motivate
employees it to: offer a transparent career path,
fair and transparent remuneration as well as
development and training opportunities. Career
paths depend on the place of start and area where
they are originated. Employees are informed about
their potential career path the moment they start
work. Remuneration brackets are set for each
position. Employees are motivated by bonuses
based on their achievements. In order to make
sure that we pay market salaries, we try to keep
up-to-date with the latest developments on the
markets where we hold subsidiaries and we do our
research in job portals.
Motivation is also linked with a fair assessment.
We run an assessment model which for each level
of our hierarchy focuses on hard criteria
(effectiveness measured by KPIs) and soft criteria
(like behavior, environment and empowerment).
We also want the salaries to include not only a
fixed but also a variable component, to align the
remuneration of employees with the performance
of the whole Company. The variable part of the
remuneration relates to profitability bonus and/or
commission and management bonus. We have an
in-house grading system.
The Company provides access for all employees
to its IT platform and managers can assign their
subordinates certain tasks or the employees log
their tasks on a quarterly basis. From the results of
their tasks, managers can check the employees’
progress and if these are visible, the managers can
grant a bonus on a quarterly basis. This allows
employees to work effectively and obtain
constructive feedback.
We understand that salaries are just one part of job
satisfaction. We want our employees to have an
open line of communication with their managers.
The aim is not only to pass a constructive feedback
down the line but also for employees to be able to
speak openly to their managers and communicate
issues or inefficiencies and give their feedback.
The Company organizes meetings with the
management team on a quarterly basis in order to
discuss issues and new developments with all the
general managers of the Group. We also offer
perks like: health insurance, Provident Fund in
certain countries, Christmas gifts, gatherings for
Christmas and in some cases discount card for
some restaurants and products sold.
Keep them
motivated
Consolidated Non-financial Report of ASBISc Enterprises Plc for 2021
38
To build leaders we need to develop our
employees, as we believe that trainings are the key
to ASBIS well-being and long-term development.
Talent identification is important for us as it helps
us to seek and develop leaders, making sure that
we have enough talents in the organization to
support its future growth. Thus, we develop both of
activities to improve all skills. We develop and
promote knowledge sharing which is effective in
developing skills. We have a trainings plan and
matrix in place which indicates what trainings
should be undertaken depending on the seniority
of the person. We aim to create a team of effective
managers.
ASBIS ensures that the employees have the
required skills and knowledge to undertake their
tasks. Our HR department is responsible for
arranging trainings for employees as per the
request of managers or directors. Trainings
depend on the department, employees’
performance and new market trends and are fully
covered by ASBIS (even if these require travelling
abroad). We see value in financing international
trainings and certificates as this improves the
performance of our employees and makes the
Company more prepared for market changes.
Diversity is important for us as it is embedded in
our everyday operations. We aim to have a
balanced approach in terms of age and gender.
We recognize that each employee is unique and
has own characteristics and we wish to present all
of them with development opportunities. We want
ASBIS to be an inclusive workplace where people
of all ages, religions, origins will find a common
place to work and develop for the benefit of all
ASBIS stakeholders and to have equal
opportunities.
We encourage diversity in opinions. We believe
that exchange of ideas brings our Company
forward. We build teams of all nationalities and
ages as we wish to use the knowledge of our
experienced employees and the energy and fresh
ideas from the younger generations. It is our aim
to have a balanced gender approach for each
position which is to be filled. If balance is not
possible, we will still aim to have at least one
representative of each gender. We build a
workplace which is full of mutual respect between
employees and friendly atmosphere.
Develop
leaders
Promote
diversity
Consolidated Non-financial Report of ASBISc Enterprises Plc for 2021
39
It is our priority for ASBIS to be a place free from
any discrimination, mobbing and illegal actions.
We are strongly against employees abusing their
positions and acting illegally, unfairly and not in a
dignified manner. This includes any forms of
harassment including proliferation of materials on
employees and their personal data. We only allow
a constructive feedback. We do not tolerate sexual
harassment, any other forms of harassment. We
say no to aggressive behaviors. We encourage our
employees to report any such violations and we
assure them anonymity and legal assistance.
Finally, we would like to underline that ASBIS
considers bullying policy unacceptable and it is not
tolerated under any circumstances. Although we
have not faced such situations to date, it is clear to
us that any employee who will be found in violation
of the policy will be disciplined.
Our efforts bear fruit. Women now constitute 30%
of Board of Directors. As still in selected well paid
departments they are underrepresented, this
results in differences in average remuneration
between men and women. Taking into account all
remuneration (basic salary plus bonuses) men
earn on average more than women. We continue
to address the issue, yet it is a complex one.
In 2021 average salary at ASBIS Group came in at
US$28.2 ths annually, up 7% YoY. Remuneration
depends on many factors, yet ASBIS does not pay
minimum wage in countries present (neither at
retail stores nor warehouses). We also do not pay
by the hour thus do not present this SASB
indicator, as it is not material to our business
model.
There were no monetary losses as a result of legal
proceedings associated with labour law violations
in 2020 and 2021. Due to fair treatment of
employees at ASBIS there was no need to create
trade unions. At the end of 2021 there were no
trade unions at ASBIS (stable YoY).
Prohibit
mobbing
Consolidated Non-financial Report of ASBISc Enterprises Plc for 2021
40
Social matters are
important for us.
SOCIAL MATTERS
Social issues are also important for us thus we act
in two ways. Firstly, we recognize that our social
impact stretches onto the families of our
employees. We offer gifts to kids of our employees
(until these reach 18 years old) especially in the
Christmas season. We also offer our employees
opportunities to act in frames of corporate
volunteering actions (e.g. some of them are blood
donors).
Our second way of acting is supporting people in
need. We support various charities and non-profit
organizations, sponsor teams and promote sports.
In addition, we support individuals in need by
supporting state-run hospitals and cancer patients.
Also, in 2020 ASBIS donated 1,000 light laptops
PCs to the Association of Primary School
Teachers in Cyprus (POED) and the Board of
Public Schools in Limassol. They were used for on-
line education and to improve the knowledge and
skills of primary school students aged 6-12 who,
for economic reasons, could not afford to buy their
own computer. In 2021 we donated 50 iPads as a
vaccination incentive.
Overall, we take a decentralized approach to
community engagement and investment allowing
our subsidiaries to conduct actions they believe
are proper and needed. In Cyprus in 2020 despite
COVID-19 pandemics we undertook beach
cleaning activities, while in 2021 we planted trees
after a large fire. Annual donations reached c.
US$200,000 in 2020 and c. US$215,000 in 2021.
During the COVID-19 pandemics we added the
third element to our supported which directly
affected our employees and their families. To
minimize the probability of COVID-19 infections in
our offices, all employees were encouraged to
work from home when possible and for that, all the
necessary equipment was provided. Extra
flexibility was provided to employees with small
children. In 2021, we introduced free covid tests to
employees twice a week and flexible "work from
home" scheme. The productivity throughout the
Group remained at high levels, remuneration of the
employees was unaffected and the work-from-
home scheme was appreciated.
Consolidated Non-financial Report of ASBISc Enterprises Plc for 2021
41
Policies related to human rights
We are
trustworthy
Our word is good. We
keep our commitments to
each other and to our
stakeholders. We do the
right thing without
compromise.
We use good
judgment
We think before we act.
We use our purpose,
values and ethical
guideline as decision
filters to guide our
behavior.
At ASBIS we recognize the importance of
preserving human rights in our value chain. We
believe in the right to self-determination, liberty,
due process of law, freedom of movement,
thought, religion, assembly and association.
Our Human Rights & Labor Policy sets forth
ASBIS’ global standards regarding The Code of
Labour Practices. This policy of labor practice sets
forth minimum standards for working time and
working conditions and provides for observance of
all of the core standards of the International Labor
Organisation including other applicable
Conventions. The policy provides a pledge by the
Company to observe these standards and to
require its contractors, subcontractors and
suppliers to observe these standards. It also
establishes ASBIS’ general responsibilities
concerning human rights, health management,
work safety, career management, employees’
rights etc.
We take our social responsibilities seriously. We
are committed to advancing human rights through
our policies and business activities, and to work
hard to ensure that the people who make our
products are treated fairly and with respect. Our
Employment Standards and Global Supplier
Standards cover company-owned operations as
well as our supplier partners. These policies
describe the workplace practices and ethical
behavior that we require for all workers such as:
(1) prohibiting child and forced labor, (2) ensuring
nondiscrimination and equal opportunity, (3)
supporting a harassment-free and violence-free
workplace, (4) prohibiting retaliation or any form of
physical or mental disciplinary practices, (5)
respecting workers’ right to freedom of association,
(6) ensuring compliance with laws governing
working hours and wages and (7) promoting
environmental protection, health and safety.
On top, our policy also addresses health
management and work safety conditions.
Maintaining and promoting the health, motivation
and performance of employees will secure the
Company’s competitiveness in the long-term.
Work safety is our priority. Employees are to be in
a safe environment, protected from hazards of the
job.
Lack of discrimination is visible in numbers. Total
amount of monetary losses as a result of legal
proceedings associated with employment
discrimination amounted to zero in 2021 and 2020.
Consolidated Non-financial Report of ASBISc Enterprises Plc for 2021
42
Select business
partners carefully
Choose those who share
our values and high
standards for legal and
ethical business practices.
Don’t let anyone damage
our reputation and our
brand by acting illegally or
unethically in ASBIS’s
name.
So far, we have not had any incidents related to
human rights abuses. However, our policies say
that in case of any future incidents the HR
department or the line manager should inform the
BoD and they should take action depending on the
situation. In case of serious situations, dismissal of
the employee as per the employment law could be
an option. The procedure of termination is
described in the employment contracts.
Our Whistleblowing Policy (in place since 2006,
updated in 2019) allows employees to
anonymously raise concerns about possible
wrongdoing to the BoD. Concerns must be
reported in writing. They can be delivered either to
one of the Executive Directors or via a publically
available email on the webpage. The policy is thus
aimed not only at employees but also at ASBIS
partners, contractors and consultants. It is ASBIS
intention to treat all reports seriously and assure
appropriate investigation of each reported manner.
The policy foresees that in case of a report, a
Whistleblowing Committee will be called. It will
consist of: two Executive Directors, Head of Legal
Department and Head of HR Department. All
whistleblower reports will be dealt with in strict
confidentiality. The Whistleblowing Committee will
process the report and decide whether or not to
start an enquiry in connection to the matter. The
whistleblower will be notified of this decision and
reasons on which it is based. Findings of the
Whistleblowing Committee will be presented to the
Executive Directors of ASBIS so that they decide
on further actions. Personal data processed will be
dealt in accordance with ASBIS Privacy Policy.
There were no whistleblowing incidents identified
in 2021 and in 2020.
ASBIS also has a Code of Conduct which sets
forth general guidance on how to carry out daily
activities in accordance with our purpose and
values, as well as in compliance with the
applicable legal requirements and ASBIS’s
policies, standards and ethical principles. The
Code includes 10 guiding principles (presented at
the beginning of this Report) which are
straightforward points written in an easy to
comprehend language and simple to follow for all
employees. The Code of Conduct also
encompasses ethical guidelines which are to
support employees in making the right choices.
The Code applies to everyone at ASBIS
worldwide. It promotes an honest and ethical
conduct, a safe working environment and
compliance with all governmental directives, laws,
rules and regulations.
Information security is managed by the Chief
Information Security Officer. There are policies and
best practices in place that aim to minimize data
security risks. Some of them are the "principle of
least privilege" per service account and the "single
entry point" applied to most of IT services. In
addition, the implementation of "2-factor
authentication" to our IT services was finished in
2021, which further increases data security.
Consolidated Non-financial Report of ASBISc Enterprises Plc for 2021
43
Data security is
important for
ASBIS
Moreover, our high availability (HA) setups are based
only on enterprise grade solutions inclusive of vendor
support. Monitoring and notification systems help us
track any abnormal activity and respond quickly when
necessary.
Data security risks are addressed by the IT
department, mostly as breach prevention. The IT
department deploys and supports its systems and
services according to known best practices and
continuously monitors integrity, productivity and user
feedback. Any serious issues are reported to IT
management and if the issue is considered a data
security incident, it is escalated to the Chief
Information Security Officer. The most significant
incidents are reported to the Security Committee.
The Security Committee was established in
November 2021 to manage the information and data
security within the ASBIS Group. One of the goals of
the Committee was the implementation of the risk
management standard "ISO 27005", which is
planned to start in Q2 2022. In 2021 we had zero data
breaches, zero percentage involving personally
identifiable information (PII) and no customers
affected (zero in 2020 as well).
In 2019 ASBIS’ BoD approved a Supplier Code of
Conduct. Contrary to tailor made internal documents
and policies, ASBIS decided to claim compliance with
RBA’s Code of Conduct in terms of its requirements
towards suppliers. Responsible Business Alliance
(formerly Electronic Industry Citizenship Coalition,
EICC) is an industry coalition committed to creating
shared value for businesses, workers and
communities. The alliance is open to companies that
manufacture or contract the manufacture of
electronic goods or a product in which electronics are
essential to the primary functionality of the product,
or supply materials used in the electronics of those
goods. The RBA is comprised of more than 200
electronics, retail, auto and toy companies. Selected
members include: AMD, Alphabet, Amazon, Apple,
Cisco, Citrix, Dell, Facebook, Fujitsu, HP, IBM, Intel,
Lenovo, Logitech, Microsoft, Phillips, Seagate, 3M,
Xerox.
Essentially all revenues in 2021 and in 2020 were
from products third-party certified to environmental
and/or social sustainability standards. Vast majority
of RBA’s members are ASBIS’ suppliers. ASBIS’
position in the value chain of IT distribution minimises
its human rights risks as 95.6% of its revenues
comes from suppliers that are RBA’s members.
These are large companies, mostly listed on
NASDAQ.
2021 REVENUES BY SUPPLIERS
RBA
members,
95.6%
Other
suppliers,
4.4%
Consolidated Non-financial Report of ASBISc Enterprises Plc for 2021
44
RBA’s Code of
Conduct is a
guidance for
ASBIS suppliers
in all key areas of
their operations.
The RBA Code of Conduct (version 7.0 from 2021) is
a comprehensive one, covering five crucial topics:
labour, health, environment, ethics and management
systems. The Labour part focuses on commitment to
upholding the human rights of workers. All workers
(whether permanent or temporary) should be free to
choose their employment, while child labour should
not be used at any stage of manufacturing. On top, a
workweek should not be more than 60 working hours,
while wages and benefits should be paid in line with
local laws, especially regarding minimal wages. The
Code underlines a strict commitment to humane
treatment of workers, non-discrimination and
freedom of association.
The Health and Safety part recognises that in
addition to minimising the incidence of work-related
injury and illness, a safe and health work
environment enhances the quality of products and
services. The Code thus concentrates on
occupational safety, emergency preparedness, and
minimisation of occupational injury and illness. That
is to be achieved, among others by industrial hygiene
and elimination of potential hazard, control of
physically demanding work and machine
safeguarding. Emphasis is also put on sanitation,
food and housing, as workers are to be provided with
access to clean toilets and potable water. Health and
safety communication should be carried out, among
others in the form of trainings.
The third part of the Code recognises that
environmental responsibility is integral to producing
world class products. As such, all required permits
should be obtained and kept, while reporting
requirements should be followed. On top, pollution is
to be prevented, among others by reducing resource
usage, minimisation of hazardous substances, solid
waste and air emissions. Companies are to manage
water and energy consumption, with the latter being
aimed at GHG emissions reduction (Scope 1 &2).
The Ethics section underlines that to achieve
success, companies need to uphold to the highest
ethical standards. Business integrity among others
means no to bribery and corruption which give an
improper advantage. All information should be
properly disclosed while intellectual property rights
respected. On top of fair business, advertising and
competition, companies are to protect each persons’
privacy and identity of whistleblowers.
The fifth part of RBA Code concentrates on
management systems. Compliant companies should
have systems in place that will assure compliance
with applicable laws and conformance with the Code
on top of risk identification and mitigation. Companies
claiming compliance with the Code should have
corporate social and environmental policies in place
and senior executives assigned to those topics to
show their accountability and responsibility.
Companies should have written targets with
objectives of improvement, conduct periodic self-
evaluation as well as keep documentation and proper
records.
Consolidated Non-financial Report of ASBISc Enterprises Plc for 2021
45
Policies related to environmental and climate impact
We are
responsible
We accept the
consequences of our
actions. We admit our
mistakes and quickly
correct them. We feel
responsible for the
environment and want to
grow sustainably.
We feel responsible for the environment and
climate and we think and reflect on ways how we
affect it and how we could lower our impact. We
thus present our areas of impact in the form of
corporate cars, business trips, usage of electricity,
packaging of our products, waste management as
well as selected calculations regarding carbon
footprint. In this section we also present our
assessment of climate risks and opportunities as
well as rate their importance.
USAGE OF CORPORATE CARS
We monitor and try to minimize our environmental
impact by looking into the Company’s operations.
We try to minimize the usage of paper by applying
electronic invoices as much as possible. We also
limit the usage of corporate vehicles and car fleet,
which are governed by our Corporate Car Policy.
These are available only to senior executives with
limits put on the value of car, while employees pay
for fuel.
Number of corporate cars
2020
2021
Own cars
68
60
Leased cars
73
81
Total
141
141
Under corporate cars we show not only own cars
but also include leased cars, over which our
employees have control of usage.
Type of corporate cars
2020
2021
Gasoline
43
48
Diesel
88
79
Hybrid
9
13
Electric
1
1
Total
141
141
The majority of cars are diesel, with gasoline being
the second most commonly used type of corporate
car. It is ASBIS aim to reduce the usage of diesel/
petrol cars and move towards hybrids. We have
introduced a new policy that all new cars must be
hybrid, which resulted in 4 more hybrids YoY.
Similar trends are visible in terms of kms travelled.
Kms travelled by
corporate cars (ths)
2020 2021
Gasoline
480.5
729.0
Diesel
1,673.3
1,591.5
Hybrid
117.0
159.4
Electric
9.6
11.8
Total
2,280.3
2,491.7
Consolidated Non-financial Report of ASBISc Enterprises Plc for 2021
46
We stick to the
law and our
policies
But that’s the minimum.
We make an effort to live
up to our values and
ethical principles as well.
The number of kilometers travelled by business
cars increased 9% YoY, despite the pandemics
and a stable number of corporate cars. The key
reason were employees travelling to work more
often than in the first year of the pandemics. These
numbers do not include transfer of goods. Goods
from suppliers are sent by them to our distribution
centres. We use logistics operators to deliver
goods from our distribution centres to customers.
ELECTRICTY CONSUMPTION
ASBIS is also cautious in terms of electricity
consumption. Actions are undertaken to minimize
it, despite growing operations. Among other, we
use led lighting to lower electricity consumption.
In 2021 Group electricity consumption came in at
2.7 GWh, up 38%, almost in line with 30%
revenues growth, partially due to the need to
expand warehouse space. Electricity consumption
includes all offices from 27 subsidiaries as well as
distribution centres and warehouses. To our best
knowledge all reported electricity consumption
came from the grid. None of the subsidiaries has a
direct source of renewables electricity.
PRODUCT QUALITY AND SAFETY
Our environmental and climate impact also results
from the products that we distribute and sell. All our
products are safe for our customers and end-
customers. The Company makes sure that the
producers of goods distributed by ASBIS do not
use improper chemicals or hazardous materials.
We obtain the necessary certificates such as CE
(Conformité Européenne) and RoHS (Restrictions
of Hazardous Substances). We have our own
QA&QC (Quality Assurance and Quality Control)
team (22 people) in our Chinese and Czech offices
that conduct all the required and necessary tests.
It is in our best interest to distribute products which
are durable and meet the expectations of end-
customers. This limits customer complaints and
reduces the number and cost of warranties. When
products become defective within the
manufacturer’s warranty period due to a
production or material defect, ASBIS may choose,
at its own discretion, to deliver refurbished or new
products, to repair the products or to issue a credit
note. Warranties are especially important for
ASBIS in case of private labels, as we are then
ultimately responsible for the repair.
PACKAGING OF OUR PRODUCTS
We receive already packaged products from the
vendors such as Apple, Dell, Intel, AMD etc. all of
which are companies with very good
environmental record. In the last year, we have
also seen some of our vendors improve packaging,
among them Apple who reduced the size of all their
packaging, allowing for more items to be fitted on
the pallets, therefore minimizing the use of paper
and logistics cost which in turn contribute to even
lower carbon footprint.
Consolidated Non-financial Report of ASBISc Enterprises Plc for 2021
47
We aim to reduce
waste
What we do additionally is put overcarton over the
goods and place them on the pallets. Sometimes
we place most valuable goods inside wooden
boxes. For additional security we may use small
plastic crates (boxes). We mostly use vercarton,
wooden boxes, small plastic boxes as packaging.
We use exactly what is required. Overcarton and
wooden boxes are used only for the goods of the
highest value and only to destinations where such
security measures are needed. We use the cartons
(small boxes) received from vendors for our courier
deliveries, minimizing the quantity of additional
packaging and ways to minimize empty space in
pallets. But if needed we use empty cardboard
boxes or bubble foil. We are mainly a distributor
and have no direct impact on the actual packaging
of goods (retail packaging). We developed Green
packaging for our own brands. All packages used
at DC are made from recycled materials, while
plastic blisters and hooks have been replaced with
paper trays and hooks.
WASTE REDUCTION POLICIES
We recognize that electronic waste is harmful for
the environment and we try to recycle or dispose
of it in a proper way. According to current
regulations, especially WEEE Directive (Waste
Electrical and Electronic Equipment) electronic
waste disposal has to be paid by the company
which enters the product on the market. In ASBIS
case these are our subsidiaries, which are
registered in local organizations. They latter deal
with the matter. We do provide scrap operations, it
is done by specialized companies.
We host battery recycling points in our offices
where employees can bring used up batteries to
be recycled. Recycling is performed by specialized
organizations in agreement with the government.
We also conduct standard recycling of waste in
offices. We take part in recycling initiatives, like
“Plastic caps for the Future”, where caps are sold
for recycling with the profits donated to charities.
We have certain teams of professionals who
dismantle products to be discarded (mostly PC
tablets and smartphones) by separating elements
of the products in categories depending from their
manufacturing origin, i.e. the plastic parts are put
separated to the PCBA which consists of electronic
semiconductors and each material is processed by
the appropriate specialized company.
Also, one of our revenue streams originates from
the sale of refurbished electronic products.
Through this operation, electronic products that
could have been disposed at the expense of the
environment are brought back to use.
WEEE Directive sets collection, recycling and recovery
targets for all types of electrical goods.
RoHS is an EU Directive which restricts the use of six
hazardous materials in the manufacture of electronic and
electrical equipment.
CE is a certification mark that indicates conformity with
health, safety and environmental protection within the EU.
Consolidated Non-financial Report of ASBISc Enterprises Plc for 2021
48
We measure our
carbon footprint
BUSINESS TRAVELS
We also have a Travel Policy which defines “DO’s”
and “DON’Ts” for employees who travel for
business trips and conferences. Taking
environment into account, when possible we tend
to use technology to save time on traveling to
different countries and lower our environmental
and climate impact.
This has been especially visible in 2020 and 2021
were due to lock-downs and restrictions on travel,
we have cut down on our business trips, replacing
these with videoconferences.
Business trips
(ths kms travelled)
2020
2021
Rail
181.0
78.8
Bus
9.2 6.2
Personal car
192.1
158.2
Plane (economy)
2,326.3
1,316.7
Total
2,708.7
1,559.9
Within the business trips, there has been a
sizeable YoY fall in kilometers travelled in the
second year of pandemics i.e. in 2021, especially
by planes. Lock-downs and restrictions continued
around the world and even air transportation from
the island of Cyprus was not always available.
CARBON FOOTPRINT
ASBIS is an environmentally cautious company.
As a result, we continue to measure our carbon
footprint. For our calculations we used the
international GHG Protocol Corporate Accounting.
Within the Scope 1 concept for ASBIS Group and
parent company only combustion in corporate cars
is taken into account. There are no generation
sources within ASBIS Group. In terms of Scope
2
calculations we use the location method and we
have applied the European Environment Agency
intensity factors by countries to electricity
consumed in each country present. Even though
our distribution centres are leased, they are core
to our operations and thus we consider them to be
within the company operations boundaries.
CO
2
e tonnes
2019
2020
2021
Scope 1
444
447
490
Scope 2
758
779
891
Scope 3
(partial)*
3,118
2,443
1,675
* In terms of Scope 3 calculations we have conducted
calculations in selected areas out of the 15 ones
indicated in GHG Protocol - business travel and
employee commuting impact. For calculations, we have
applied indicators, including GWP, as publically
available on GHG Protocol webpages.
Consolidated Non-financial Report of ASBISc Enterprises Plc for 2021
49
We calculate
Scope 1&2 GHG
emissions per
item sold
In terms of employee commuting, private cars are
our main means of transportation. It should be
taken into account that in Cyprus, where HQs are
located, no rail or subway is available. In some
other parts of the world ASBIS locations are based
near local warehouses, which are situated rather
on the outskirts of the cities due to their size and
rental space. The impact of employee commuting
to work is stronger than this of business trips in
terms of Scope 3 calculations in 2020 and in 2021.
Due to home-office policy introduced, our
employees (excluding these with corporate cars)
stayed more at home, reducing our carbon
footprint. We also note that we have revised our
2019-20 Scope 3 calculations. These are aligned
with methodology applied in 2021.
For analysis purposes we believe it is worth
normalizing the Scope 1&2 emissions data by
number of articles sold. Scope 1&2 GHG
emissions amounted to 1,381
CO
2
e in 2021, up
13% YoY, due to larger scale of business. Our
estimates point that we have generated 21.2 kgs
of CO
2
e per item sold in 2021, up 9% YoY.
Normalised
CO
2
e
2019
2020
2021
Number of
articles sold
63,710
64,556
66,760
Scope 1+2
(tonnes CO
2
e)
1,202
1,226
1,381
Kgs of CO
2
e per
article sold
18.9
19.0
20.7
In terms of waste generated, we gather information
on how much waste disposal costs are. In 2020,
net of VAT, it was c.US$158 ths, while in 2021 c.
US$113.5 ths.
ENVIRONMENTAL EXPENSES
We have not had any administrative, civil or legal
cases related to environment and climate within
the stated horizon. There also have not been any
malfunctions relating to any of our distribution
centres that would have any negative impact on
the environment and climate. Expenses on
environment protection reached US$175,000 in
2020 and US$190,000 in 2021.
TAXONOMY
For 2021 ASBIS for the first time presents
Taxonomy calculations as required by the
European Union. These have bee prepared based
on:
Regulation of the EU 2020/852 of the
European Parliament and of the Council of
June 18, 2020 on the establishment of a
framework to facilitate sustainable investment,
especially article 8,
EU Commission Delegated Regulation of
June 4, 2021 establishing the technical
screening criteria for determining the
conditions under which an economic activity
Consolidated Non-financial Report of ASBISc Enterprises Plc for 2021
50
For the first time
we present
taxonomy
calculations
qualifies as contributing substantially to
climate change mitigation or climate change
adaptation and for determining whether that
economic activity causes no significant harm
to any of the other environmental objectives
(Technical screening criteria),
Commission Delegated Regulation (EU)
2021/2178 of 6 July 2021 supplementing
Regulation (EU) 2020/852 of the European
Parliament and of the Council by specifying
the content and presentation of information to
be disclosed by undertakings subject to
Articles 19a or 29a of Directive 2013/34/EU
concerning environmentally sustainable
economic activities, and specifying the
methodology to comply with that disclosure
obligation (Disclosure Regulation).
Based on the above mentioned legal acts, ASBIS
presents on the consolidated level the
percenatges of taxonomy eligible and that are
taxonomy non-eligible revenues, capital
expenditures (capex) and operating costs (opex).
Comparable data for 2020 is not presented.
Analysis of Annex 1 and 2 of Technical screening
criteria showed that eligible activities within
ASBIS’ business model envolve mostly:
renovation of existing buildings, installation,
maintenance and repair of energy efficiency
equipment and computer programming,
consultancy and related activities. These are
provided in the table below. These consistiute the
numerators in the indicators presented.
Code
Description Line
7.2
Renovation of existing
buildings
Capex, Opex
7.3
Installation, maintenance and
repair of energy efficiency
equipment
Capex
8.2
Computer programming,
consultancy and related
activities
Revenues
The denominators have been calculated in line
with the Delegated Regulation 2021/2178 on the
consolidated basis. The revenue values used in
revenue KPIs equal to the values showed in
consolidated financial statements. Capex and
opex differ as these are defined differently in
Delegated Regulation than in IFRS. Capex values
include additions due to IFRS16, while opex
includes only selected part of operating costs.
US$ m
Revenues
Capex
Opex
Numerator
2.8 2.9
1.9
Denominator
3,078.0
16.4
4.3
% of taxonomy
eligible activities
0.1%
17.6%
44.4%
% of taxonomy
non
-eligible
activities
99.9%
82.4%
55.6%
Technical screening criteria showed that majority
of ASBIS revenues and capex as well as some half
Consolidated Non-financial Report of ASBISc Enterprises Plc for 2021
51
We see both
climate risks and
opportunities
of opex are not taxonomy eligible. That does not
mean that ASBIS actions do not contribute to
climate change mitigation or adaptation.ASBIS
business model has mostly not been included
within the first legal acts related to susianable
development Taxonomy, as these have been
focused on sectors having the strongest climate
impact.
CLIMATE RISKS
Climate risks are identified and managed at the
level of Board of Directors. Looking at ASBIS from
the double-materiality perspective, we see both the
ways in which ASBIS affects the environment and
ways in which environment affects ASBIS. Above,
we have described the ways via which ASBIS
business model affects climate and environment.
Below we focus on the ways that the environment
and climate can affect ASBIS, i.e. transition and
physical risks.
We recognise both the transition and physical
risks. In terms of transition risks that arise from the
transition to a low-carbon and climate-resilient
economy, we may face the following risks: policy
and legal risks (there may be laws or policies put
in place that may require a more environmentally
cautious approach to raw materials and land use),
technology risks (changes in technology used to
produce IT equipment) – these both may lead to
growing prices in terms of IT equipment and
solutions. We may also face market risk with
consumers switching to more energy-efficient
appliances or making more savvy purchases to
limit their own impact on the environment. We will
monitor these trends and introduce the latest
hardware for our customers. We may also face
reputational risks with difficulties in attracting
customers, business partners and employees if we
do not take strong enough actions against climate
changes.
In terms of physical risks resulting from climate
changes, we may face both acute and chronic
risks. Acute physical risks may arise from weather-
related events in the form of floods, fires or
droughts that may damage factories in certain
regions, cause factories to limit or temporarily stop
their production or disrupt our supply chain in other
ways. These may result in temporary limitations in
our product offering or rising prices of hardware
and components. Chronic physical risks - i.e. risks
that may result from long-term changes in climate,
may also affect ASBIS. Growing temperatures
worldwide may cause a need for more
temperature-resilient hardware and appliances
and may also result in more hardware
malfunctions that may increase warranty claims.
We present a detailed split of transition and
physical risks on the graph below. We believe that
technology and market risks are those transition
risks that are going to be the most important to
ASBIS business model over upcoming years. We
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52
We divide climate
risks and
opportunities into
short, medium
and long-term
ones
believe the chronic risks may prove more material
than the acute climate risks.
On top of climate risks described above and on the
graph below we also recognise climate
opportunities. We believe that our CSR strategy
should help us benefit from these. ASBIS could be
selling new products and solutions to its
customers. These products could be more
environmentally friendly, less energy consuming
and use up fewer resources. ASBIS could also
further engage together with producers in recycling
and reusing initiatives. The Company’s orientation
on on-line sales could also be leveraged into new
revenues.
We look at both climate risk and opportunities in
short, medium and long-term. We present this split
in the table below. When we speak about climate,
we treat short-term as 2030, i.e. the end of 2030
UN Agenda, medium-term as 2050, i.e. by when
EU’s climate targets are set, while long-term as
2100.
Short-term
Climate risks
We believe that in the short-term impact of both
transition and physical risks may be rather limited.
On the transition risk side, we may see demand
moving more towards eco
-
products, using less
electricity. We also may feel pressure to conduct
more actions
towards sustainable development in
order to retain our employees and access new
talent. There is potential for acute physical climate
risk to affect some of production sites from we we
source products. These disturbances should
however be short in their nature.
Climate
opportunities
We believe we should be faced with climate
opportunities. We have strong relations with key
producers and vendors. Thus, we should be able
to obtain all latest hardware and appliances
offering. Also,
our position could be str
eghened by
a broad portfolio of private labels.
Medium-term
Climate risks
We believe that in the medium-term, the transition
risks
may become more visible. T
here may be
policy and legal risks in the form of laws or policies
put in place that may require more environmentally
cautious approach to raw materials and land use
which could result in changes in product offering,
e.g. due to suspension of some products
manufacturing
. Technology risks
are likely to be
stronger than in short
-term – c
hanges in
technology used to produce IT equipment may be
expensive to incorporate, as a result, some portion
of the Company’s suppliers may not be able to
afford these, which may result in growing prices of
IT equipment, which our customers may not be
able to affo
rd,
Also, we may face not only acute
climate risks, but also start to experience chronic
physical risks, with either often floods or/and fires
in places from which production is sourced,
disturbing the production sites to a stronger extent
or requiring changes in sourcing countries.
Climate
opportunities
On top of product oriented climate opportunities,
we should also experience climate
-
opportunities
coming from more renewables in energy mixed,
efficiency measures and waste reductions
measures, which could be undertaken.
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53
We stress-test our
model for different
climate scenarios
Long-term
Climate risks
We believe that in the long-term, chronic physical
risks may be stronger than transition risks.
Depending on global scale of GHG reductions,
physical risks may be so strong in selected
countries that production will need to be
transferred. Also, rising temperatures and
potentially some electricity shortages may lead to
electronic equaipment not working properly,
increasing warranty costs and decreasing
consumer satisfaction.
Climate
opportunities
We believe that in the long-term climate
opportunities may
be the smallest. M
uch will
depend on the scale of GHG reductions and global
climate conditions.
In order to fully understand the impact of transition
and physical climate risks as well as counteractive
actions that can be taken by the Board of Directors,
we also conducted a scenario analysis. According
to Task Force for Climate Related Financial
Disclosures (TCFD) Recommendations, we
analysed the resilience of our business model
using two scenarios. One scenario assumes global
temperatures to rise less than 2°C versus the
preindustrial era, while the second one assumes
global temperatures to rise more than 2°C versus
the preindustrial era. The above mentioned
scenario analysis has been conducted on a
qualitative not quantitative basis with the use of
publically available climate scenarios as published
by IPCC (Intergovernmental Panel on Climate
Change) in AR6 (Assesment Report) publications
from 2021.
Scenario SSP1-2.6 according to which global temperatures
are unlikely to rise above 2°C versus the preindustrial levels
Possible
impact of
climate risks
We believe that in this scenario the impact of
transition risks would be much stronger than of
physical risks. In that scenario, the policy and legal
risks could be visible with new laws and
regulations being put in place, strongly limiting
using selected raw materials and
t
echnology risks
could also be visible, impacting the product
offering, tilting it towards eco
-
friendly products
only. Market risks may materialize with customers
being interested only in offering limited their own
carbon footprint.
Counteractive
actions that
we could take
ASBIS business model is a flexible one. The Board
of Directors will monitor all climate risks, especially
the transition ones, and will aim to use all available
climate opportunities.
Scenario SSP1-7.0 according to which global temperatures
are likely to rise above 2°C versus the preindustrial levels
Possible
impact of
climate risks
We believe in this scenario, transition risks would
not be sizeable, yet
that
physical risks would be
dominating.
Growing temperatures
worldwide may
cause the need for more temperature
-
resilient
hardware and appliances, may also result in more
hardware malfunctions that may increase warranty
claims.
Also, certain areas from which we source
our products may no longer be available, as these
may be floaded or suffer from lack of water or
electricity. Thus, our supply chain may need to be
modified.
Counteractive
actions that
we could take
ASBIS business model is a flexible one. The Board
of Directors will monitor all climate risks, especially
the physical ones, and will aim to use all available
climate opportunities.
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54
Risks related with negative impact on climate
ASBIS operations have an impact on climate as products purchased consume natural capital, fuel is burnt while
delivering these to the Company and the Company distributing the products to its customers.
Transition risks are risks that arise from the transition to a low-carbon and climate-resilient economy. As a
result we may face the following risks:
- Policy and legal risks, there may be laws or policies put in place that may require more environmentally
cautious approach to raw materials and land use which could result in changes in product offering, e.g. due
to suspension of some products manufacturing,
- Technology risks, changes in technology used to produce IT equipment may be expensive to incorporate,
as a result, some portion of the Company’s suppliers may not be able to afford these, which may result in
growing prices of IT equipment, which our customers may not be able to afford,
- Market risks, may materialize with consumers switching to more energy efficient appliances or making
more savvy purchases to limit their own impact on environment.
- Reputational risks, may come with difficulties in attracting customers, business partners and employees if
we do not take strong enough actions against climate changes.
We believe that technology and market risks are those transition risks that are going to be the most
important to ASBIS business model over upcoming years.
Physical risks are risks that arise from the physical effects of climate change. We may face both acute and
chronic risks:
-Acutephysical risks may arise from weather-related events in the form of floods, fires or droughts that may
damage factories in certain regions, cause factories to limit or temporary stop their production or disrupt our
supply chain in other ways. These may result in temporary limitations in our offer or rising prices of
hardware and components.
- Chronic physical risks i.e. risks that may result from long-term changes in the climate, may also affect
ASBIS. Growing temperatures worldwide may cause the need for more temperature-resilient hardware and
appliances, may also result in more hardware malfunctions that may increase warranty claims.
We believe the cronic risks may prove more material than the acute climate risks.
Opportunities related to climate changes
ASBIS could be selling new products and solutions to its customers. These products could be more environmentally
friendly, less energy consuming and use up fewer resources. ASBIS could also further engage together with
producers in recycling and reusing initiatives. The Company’s orientation on on-line sales could also be leveraged
into new revenues.
ASBIS
CLIMATE
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55
Policies against bribery and corruption
Never
compromise on
integrity
Turn down business if you
can’t do it legally and
ethically. Don’t let
pressure to succeed make
you do things you know
are legally and ethically
wrong. We speak up for
what is right. We report
misconduct immediately
when we see it.
At ASBIS we are against bribery and corruption, as
these are illegal activities. We believe it is against
the law to offer, promise, give, request, agree,
receive or accept bribes and we penalize such a
behavior. We consider corruption an obstacle to
economic and social development around the
world, as we think it has a negative impact on
sustainable development and exposed
communities. We understand that any such
actions if undertaken by our employees could
negatively affect the Company’s reputation.
We have our Business Ethics Policy which among
others incorporates an Anti-bribery and Anti-
corruption Policy. The latter explains to employees
that there can be two forms of bribery and
corruption, an active and a passive one. An active
one in which a person is one who offers, gives or
promises to give a financial or other advantage to
another individual in exchange for improperly
performing a relevant function or activity. A passive
one covers the offence of being bribed, which is
defined as requesting, accepting or agreeing to
accept such an advantage, in exchange for
improperly performing such a function or activity.
Both constitute a criminal offence and are not
accepted by ASBIS.
The Anti-bribery and Anti-corruption Policy also
explains our employees that bribery and corruption
can be conducted for the benefit of a Company and
for the benefit of a person. It can be tangible and
intangible in nature. Tangibility means that the
benefit can be measured in cash (monetary) and it
can be represented by e.g. presents, contracts,
sizeable discounts for goods and services.
Intangibility means that the benefit from the bribery
can take the form of e.g. a promotion, lower
amount of work, hiring a friend or relative.
To make the matters of bribery and corruption
more understandable to our employees, our Anti-
bribery and Anti-corruption Policy encompasses
examples of most prevalent forms of these
offences and indicates that breaches of laws can
not only result in sizeable ASBIS reputation loss
but also in unlimited fines and imprisonment for
individuals.
The Anti-bribery and Anti-corruption Policy is a
comprehensive one. It outlines ASBIS policy in
relation to sponsoring, donations and
memberships, specifies allowed practices in
relation to gifts and hospitality and allowed
behavior in during interactions with business
partners and suppliers.
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56
Just say no
It’s not only OK to refuse
to follow directions that
you know are illegal or
unethical, it’s required. No
ASBIS Manager has the
authority to make you
violate the law, our Code,
policies or ethical
principles.
On top, it also specifies how to report compliance
violations, how an investigative procedure looks
like as well as disciplinary consequences of non-
compliant conduct.
Our Business Ethics Policy also encompasses
conflicts of interest. A conflict can take the form of
a business relationship with, or an interest in, a
competitor or customer of ASBIS, or participation
in sideline activities that prevent employees from
being able to fulfill their responsibilities at ASBIS.
It is important that all employees recognize and
avoid conflicts of interest, or even the appearance
of a conflict of interest, as they conduct their
professional activities. Employees must inform
their supervisor of any personal interest they could
possibly have in connection with the execution of
their professional duties.
Also, since November 2016, we have a formal
policy in place which regulates hiring of family
member at ASBIS. In the case of intention of hiring
family members in any of the legal entities of the
Group, the following must apply:
family members of 1
st
, 2
nd
degree and spouse
or spouse equivalent may not be employed in
the same department unless approved by the
company’s Board of Directors majority vote,
a supervisor or manager may not be the direct
or second level supervisor of a relative.
Prevention of any illegal activities is crucial for
ASBIS. It is also part our Vision. As a result, our
Business Ethics Code also addresses such
important topics like fraud, anti-money laundering,
anti-competitive behaviours, among many others.
We possess a comprehensive
Business Ethics Policy
that we
apply every day.
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57
Risk management
Risk
management
is of high
importance
to ASBIS.
Performance in t
he IT distribution business
depends on a sizeable number of external factors,
which are not under the Company’s management
control and on internal risk factors. Due to
relatively low margins, risk identification,
assessment and management is of high
importance to the Board of Directors.
The process of identifying and assessing the risks
within the ASBIS Group is a multi-layer process. At
the local level, this is done by the local
management through their extensive knowledge of
the markets coupled with independent analysis of
how each country is assessing the risks. Each
country is utilizing all possible tools (research,
macroeconomic analyses, etc) and identifies the
areas of risks. The environmental/climate
measurements are currently available for each
country of our operations and are easily accessible
for us to evaluate. At the group level, the risk
identification is an ongoing daily process which is
followed by the Corporate risk management team
situated in our HQ in Cyprus.
The risk management process is a daily process
within the ASBIS Group. Our major risks contain
credit risk, FX risk, transactional risk, Political Risk
and environmental/climate risk. Having identified
the risks, the relevant team will undertake all
efforts to manage them. In case of credit risk and
FX risk (financial risks) we undertake insurance
and hedging. In case of transactional risk, we
follow all international standards and techniques
which are widely provided by external experts. As
far as the climate risk management is concerned,
this is done based on each country’s strategy
towards the climate awareness programs and the
individual actions required by the Company.
During the recent years, climate-related risk and its
management has become an integrated part of our
risk management processes and it entails all
relevant check points that have been requested by
authorities and/or the relevant environmental
ombudsman in each country. Now, at each and
every Board of Directors meeting there is a
discussion on environmental issues and all
directors are fully aware of what actions are
needed to be undertaken by the company.
Constantinos Tziamalis, deputy CEO, is among
other responsible for climate change and
environmental protection.
On top of climate/environmental risk, the Company
recognizes other non-financial risks which include
(please note this is not a full list): risk related to
employees, risk related to human rights violation,
risk related to environmental as well as risk related
to bribery and corruption. These are described in
the table below along with mitigating actions and
key financial risks.
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58
The Company’s Board of Directors is responsible
also for its internal control system and its
effectiveness. The Company carries out annual
reviews of its strategy, development, results and
plans. Based on conclusions drawn from that
review, a detailed budgeting process is performed
including all functional areas of the Company, with
the participation of the medium and top-level
management. During the course of the year, the
Board of Directors analyzes the current financial
results, product portfolio development, market
position and compares them with the budget, using
the management reporting system.
Consolidated Non-financial Report of ASBISc Enterprises Plc for 2021
59
Selected
financial risks
Description Counteracting
The war
between
Russia and
Ukraine and
sanctions
imposed to
Russia
The war between Russia and Ukraine which are the two major markets for ASBIS constitutes a major
disruption in demand in both countries and the whole region around them. 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 Company has been in business for more than 30 years and
has experienced a lot of crises. We are well prepared to defend
our position, however the company considers the situation critical
and 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
business can be retained due to the sanctions imposed to Russia.
These sanctions are significant and limit the ability of the group
to sell specific products which will impact its revenues.
Spreading of
the Covid-
19
Virus in the
markets we
operate
The COVID
-
19 pandemic has had, and continues to have, a significant impact around the world. We are still
in the pandemic mode and the world is looking to see
how the situation will evolve from now
onwards. The
shutdowns of the economies are no longer options, however the
consumers are still very much
afraid of the
overall situation
.
It is of extreme importance for the Company to be able to weather
this situation
and take all necessary steps to avoid any serious
impact from the overall situation.
The in
-
country
crisis affecting
our major
markets, gross
profit and gross
profit margin
Throughout the years of operation, the Company has from time to time suffered from specific in
-country
problems, emanating from the deterioration of specific countries’ financial situation, due to a number of
issues including but not limited to political instability. We need to monitor any developments, react fast and
weather every risk showing up in a specific market to secure our results.
The Company needs to keep in mind that different in
-
country
problems might arise at any time and affect our operations. Even
though we have improved our procedures, we cannot be certain
that all risks are mitigated.
Credit risk
The Company buys components and finished products from its suppliers on its own account and resells them
to its customers. The Company extends
credit to some of its customers at terms ranging from 7
to 90 days
or, in a few cases, to 120 days. The Company’s payment obligations towards its suppliers under such
agreements are separate and distinct from its customers' obligations to pay for their purchases, except in
limited cases where the Company’s arrangements with its suppliers require the Company to resell to certain
resellers or distributors. Thus, the Company is liable to pay its suppliers regardless of whether its customers
pay for their respective purchases. As the Company’s profit margin is relatively low compared to the total price
of the products sold, in the event where the Company is not able to recover payments from its customers, it
is exposed to financial liquidity risk. The Company has in place credit insurance which covers such an
eventuality for most of its revenue.
Despite all efforts to secure our revenues, certain countries
remained non
-
insured (Ukraine and Belarus) therefore it is very
important for us to ensure that we find other sources of securities
that help us minimize our credit risk. The Board of Directors
decided to enhance the Company’s risk management
procedures. These do not guarantee that all issues will be
avoided, however, they have granted the Company with
confidence that is in a position to weather any possible major
credit issue that may arise.
Consolidated Non-financial Report of ASBISc Enterprises Plc for 2021
60
Foreign
exchange risk
The
Company’s reporting currency is the U.S. dollar. In 2021 some
50% of our revenues were denominated
in U.S. dollars, while the balance is denominated in Euro, Ruble, UAH, KZT and other currencies, certain of
which are linked to the Euro. Our trade payable balances are principally (about 80%) denominated in U.S.
dollars. In addition, approximately half of our operating expenses are denominated in U.S. dollars and the
other half in Euro or other currencies, certain of which are linked to the Euro. As a result, reported results are
affected by movements in exchange rates, particularly in the exchange rate of the U.S. dollar against the Euro
and other currencies of the countries in which we operate, including the Russian Ruble, the Ukrainian Hryvnia,
the Czech Koruna, the Polish Zloty, the Croatian Kuna, the Kazakhstani Tenge and the Hungarian Forint.
Strengthening of the U.S. dollar against the Euro and other currencies of the countries in which we operate
may result in a decrease in revenues and gross profit, as reported in U.S. dollars, and foreign exchange loss
relating
to trade receivables and payables, which would have a negative impact on our operating and net
profit despite a positive impact on our operating expenses. On the other hand, a devaluation of the U.S. dollar
against the Euro and other currencies of the countries in which we operate may have a positive impact on our
revenues and gross profit, as reported in U.S. dollars, which would have a positive impact on operating and
net profit despite a negative impact on our operating expenses. In addition, foreign exchange fluctuation
between the U.S. dollar and the Euro or other currencies of the countries in which we operate may result in
translation gains or losses affecting foreign exchange reserves. Furthermore, a major devaluation or
depreciation of any such currencies may result in a disruption in the international currency markets and may
limit the ability to transfer or to convert such currencies into U.S. dollars and other currencies.
Despite all efforts of the Company, there can be no assurance
that fluctuations in the exchange rates of the Euro and/or other
currencies of the countries in which we operate against the U.S.
dollar will not have a material adverse effect on our business,
financial condition and results of operations. Therefore, careful
observation of the current environment remains a crucial factor
for our success
.
Inventory
obsolescence
and price
erosion
The Company is often required to buy components and finished products according to forecasted
requirements and orders of its customers and in anticipation of market demand. The market for IT finished
products and components is characterized by rapid changes in technology and short product shelf life, and,
consequently, inventory may rapidly become obsolete. Due to the fast pace of technological changes, the
industry may sometimes face a shortage or, at other times, an oversupply of IT products. As the Company
increases the scope of its business and of inventory management for its customers, there is an increasing
need to hold inventory to serve as a buffer in anticipation of the actual needs of the Company’s customers.
This increases the risk of inventory becoming devalued or obsolete and could affect the Company’s profits
either because prices for obsolete products tend to decline quickly, or because of the need to make provisions
or even write
-
offs. In an oversupply situation, other distributors may elect to proceed with price reductions to
dispose of their existing inventories, forcing the Company to lower its prices to stay competitive.
The Company’s ability to manage its inventory and protect its
business against price erosion is critical to its success. Several
the Company’s most significant contracts with its major suppliers
contain advantageous contract terms that protect the Company
against exposure to price fluctuations, defective products and
stock obsolescence.
Selected non-
financial risks
Description Counteracting
Risk related to
social and
employee
matters
The biggest risks that we see in relation to social and employee matters are linked to retaining employees
(especially key employees) and our ability to hire new qualified personnel in all countries of operations. Our
business depends upon the contribution of a number of our executive directors, key senior
management and
personnel. There can be no certainty that their services will continue to be available to us. We have in the
past experienced and may in the future continue to experience difficulty in identifying expert personnel in our
areas of activity, and particularly in the areas of information technology and sales and marketing, in the
co
untries in which we operate. On average in 2021 only c.8% of our employees were employed
in the parent
company with the remaining portion outside of our Cyprus headquarters. If we are not successful in retaining
or attracting highly qualified personnel in key management positions, this could have a material adverse effect
upon our business, operating results and financial condition.
ASBIS is focused on providing its employees best possible
conditions. We aim for our employees to have a transparent
career path and a fair constructive assessment. We
make sure
their remuneration
is fair and offer additional perks and trainings.
We have a
global HR Management Policy to standardize the
approach within the whole Group.
Consolidated Non-financial Report of ASBISc Enterprises Plc for 2021
61
Risk related to
human rights
The risk is related to ASBIS as well as to our value chain. In terms of ASBIS, there is a risk, yet limited in our
opinion, that the basic rights of our employees will be violated. Despite a selection of employees, we cannot
guarantee that all employees will be fair
ly
treated and that no mobbing and no discrimination will take place.
There is also some risk within our value chain. Some
of the products that we source come from countries
like.
China, Thailand,
and Taiwan. We cannot guarantee
that all the rights of those employees are respected.
In terms of ASBIS employees, we counteract this risk by
introducing formal polices that define the values and the ethical
aspects of our operations. In terms of our value chain, we try to
mitigate the risk by purchasing third party software and hardware
from international
companies
and producers, for which corporate
social responsibi
lity and value chain control are
important. We
have
a Human Rights & Labour Policy.
We have also approved
RBA’s Code of Conduct as Code of Conduct for ASBIS’ suppliers.
Risk related to
our
environment
and climate
impact
We see elements of our environment and climate impact which could generate risk. One is our direct
involvement. The risk is related to fuel and
electricity
consumption by our offices and our employees as well
as to the
logistics side of
our business (with goods being delivered to us from producers and later being
dispatched to customers). The
other
, indirect impact and risk related to environment comes from the
customers using the products that we have
sold them. If these products are of
poor quality and require
sizeable number of repairs they can either b
e
thrown away quickly (harming the environment) or customers
may need to relate to warranties (which generate increased need for logistics).
We also see transition and
physical risks.
In terms of transition risks that arise from the transition to a low-carbon and climate-
resilient
economy we may face the following risks: policy and legal risks (there may be laws or policies put in place
that may require more environmentally cautious approach to raw materials and land use), technology risks
(changes in technology used to produce IT equipment)
–
these both may lead to growing prices in terms of
IT equipment and solutions. We may also face market risk with consumers switching to more energy efficient
appliances or making more savvy purchases to limit their own impact on environment. We may also face
reputational risks with difficulties in attracting customers, business partners and employees if we do not
take
strong enough actions against climate changes. In terms of physical risks resulting from climate changes we
may face both acute and chronic risks. Acute physical risks may arise from weather
-
related events in the form
of floods, fires or droughts that may damage factories in certain regions, cause factories to limit or temporary
stop their production or disrupt our supply chain in other ways. These may result in temporary limitations in
our offer or rising prices of hardware and components. Chronic physical risks i.e. risks that may result from
long
-term changes in the climate, may also affect ASBIS
. Growing temperatures worldwide may cause the
need for more temperature
-
resilient hardware and appliances, may also result in more hardware malfunctions
that may increase warranty claims.
We minimize the risk of our direct environment impact by being
cost
cautious and aiming to use less resources (water, gas,
electricity) anf by focusing on high quality of products offered.
This is especially true in case of our private
label products. We
will be
taking actions to minimize the impact both of transition and
physical risks. We will monitor the trends and introduce the latest
hardware for our customers. We will also keep elasticity in terms
of product sourcing. Our two distribution centres are located in
different areas
– Prague (Europe) and Dubai (Middle-East) while
our HQs i
s in Limasssol (Cyprus) which should limit the acute
physical risks impact.
Risk related to
bribery and
corruption
We see risks related to bribery and corruption as we operate in a B2B environment (business to business) in
some
56
countries worldwide in four different regions with diverging cultures. As contracts signed both with
suppliers and with customers are of sizeable value, we cannot exclude such a risk. The key element of that
risk is reputation risk that ASBIS would have t
o face, if such actions were undertaken by our employees.
We emphasize the importance of ethics in our relations with both
suppliers and
customers. We co-operate with international
companies and thus believe that this risk is limited. We have in
place
our Business Ethics Code, which among others includes an
Anti-bribery and Anti-corruption Policy.
Consolidated Non-financial Report of ASBISc Enterprises Plc for 2021
62
Non-financial indicators & SASB & TCFD alignment
Non-financial indicators presented in this Report have been selected based on their importance to stakeholders and the Board of Directors and with the
aim to present the Group in a more comprehensive manner. The table below summarizes all the non-financial indicators included in the Report. On top,
it clarifies the way these indicators were calculated and points to the place in the Report where these can be found.
Non-financial indicator
Description
Page number
Active customers Customers that have made at least one purchase during the year. 4, 11
Countries with subsidiaries Number of countries in which ASBIS established local subsidiaries. 4, 6, 11
, 34
Countries of operations Number of countries, to which goods and products are delivered. 4, 6, 34
Regions of operations Number of regions summing up culturally similar countries. 4, 7
Vendors Number of vendors possessed. 4
Active articles Number of stock keeping units in our portfolio. 10
Products in offering Number of product types irrespective of their characteristics, e.g. not taking into account their colour or type. 4
Number of private labels Number of own brands under which OEM products are sold. 4, 6
Stores Number of retail APR stores with their floorspace. 11, 12
Average time of conducting an order
Time from the moment order is received to the moment when the sales invoice is issued and goods are shipped to the customer.
11
Suppliers Companies from which we source goods and products. 10
Transactions on-line Percentage of transactions that are conducted by our customers on-line. 4, 11
Distribution centres Number of distribution centres leased and owned together with their floorspace.
4, 6, 10
,
11, 12
Warehouses Number of warehouses operated by ASBIS. 6, 11, 12
Average number of employees Average number of employees in the year by functions, regions and age. 4, 34, 35
Consolidated Non-financial Report of ASBISc Enterprises Plc for 2021
63
Hiring and leaving Average number of new employees in the period, average number of leaving employees in the period. 35
Diversity indicators Board management and overall gender and ethnic diversity. 27
Employment type Statistics relating to types of employment used at ASBIS. 35
Donations Value of donations given to charities and value of events sponsored. 40
Corporate cars Number of corporate cars – owned, leased as well as kilometers travelled. 45
Electricity Electricity consumed on the Group level. 46
Business trips Number of kilometers travelled during business trips by means of transportation. 48
GHG emissions Emissions of greenhouse gases under Scope 1, 2 and selective elements of Scope 3. Normalised ratios. 48, 49
Taksonomy
Percentage of revenues, capital expenditures and operating costs eligible according to European Union Sustainable
Development Taxonomy.
49-51
Below we present SASB Alignment table for the Multiline Retailer & Distributor industry within the Consumer Goods sector:
Topic
Accounting metric
Code
ASBIS Metric or Qualitative Disclosure
Page number
Energy Management in
Retail & Distribution
(1) Total energy consumed, (2) percentage grid
electricity, (3) percentage renewable
CG-MR-130a.1
In 2021 Group electricity consumption came in at 2.7 GWh
(9,720 GJ), up 38%, almost in line with 30% revenues
growth, partially due to the need to expand warehouse
space. Electricity consumption includes all offices from 27
subsidiaries as well as distribution centres and warehouses.
To our best knowledge all reported electricity consumption
came from the grid. None of the subsidiaries has a direct
source of renewables electricity.
46
Data Security
Description of approach to identifying and addressing
data security risks
CG-MR-230a.1
Information security is managed by the Chief Information
Security Officer. There are policies and best practices in
place that aim to minimize data security risks. Some of them
are the "principle of least privilege" per service account and
the "single entry point" applied to most of IT services. In
addition, the implementation of "2
-
factor authentication" to
our IT services was finished in 2021, which further increases
data security. Moreover, our high availability (HA) setups
are based only on enterprise grade solutions inclusive of
vendor support. Monitoring and notification systems help us
track any abnormal activity
and respond quickly when
necessary.
Data security risks are addressed by the IT
department, mostly as breach prevention. The IT
42, 43
Consolidated Non-financial Report of ASBISc Enterprises Plc for 2021
64
department deploys and supports its systems and services
according to known best practices and continuously
monitors integrity,
productivity and user feedback. Any
serious issues are reported to IT management and if the
issue is considered a data security incident, it is escalated
to the Chief Information Security Officer. The most
significant incidents are reported to the Security Committee.
The Security Committee was established in November 2021
to manage the information and data security within the
ASBIS Group. One of the goals of the Committee was the
implementation of the risk management standard "ISO
27005", which is planned to start in Q2 2022.
(1) Number of data breaches, (2) percentage involving
personally identifiable information (PII), (3) number of
customers affected
CG-MR-230a.2
In 2021 we had zero data breaches, zero percentage
involving personally identifiable information (PII) and no
customers affected (zero in 2020 as well).
43
Labor Practices
(1) Average hourly wage and (
2) percentage of in-
store employees earning minimum wage,
by region
CG-MR-310a.1
ASBIS does not pay minimum wage in countries present
(neither at retail stores nor warehouses).
We also do not
pay by the hour thus do not present this SASB indicator, as
it is not material to our business model.
39
(1) Voluntary and (2) involuntary turnover rate
for in-store employees
CG-MR-310a.2
In 2021, the voluntary turnover in stores reached c.19% and
involuntary c.37%.
35
Total amount of monetary losses as a result of
legal proceedings associated with labor law
violations
CG-MR-310a.3
There were no monetary losses as a result of legal
proceedings associated with labour law violations in 2020
and 2021.
39
Workforce Diversity &
Inclusion
Percentage of gender and racial/ethnic group
representation for (1) management and (2) all
other employees
CG-MR-330a.1
If we look at split of management (understood as in SASB
as board plus store managers) where at the end of 2021
47% (40% end
-
2020) share were women versus 34% share
among remaining employees in 2021 (32% in 2020). In
terms of ethnic diversity, at ASBIS we have no Hispanic and
Af
ro-
American employees. 2% share of employees had
Asian origins while the remaining represent the white race
in 2021.
27
Total amount of monetary losses as a result of
legal proceedings associated with employment
discrimination
CG-MR-330a.2
Total amount of monetary losses as a result of legal
proceedings associated with employment discrimination
amounted to zero in 2021 and 2020
41
Product Sourcing,
Packaging & Marketing
Revenue from products third-party certified to
environmental and/or social sustainability
standards
CG-MR-410a.1
Essentially all revenues in 2021 and in 2020 were from
products third
-
party certified to environmental and/or social
sustainability standards.
43
Discussion of processes to assess and manage
risks and/or hazards associated with chemicals
in products
CG-MR-410a.2
Our environmental and climate impact also results from the
products that we distribute and sell. All our products are safe
for our customers and end
-
customers. The Company
makes sure that the producers of goods distributed by
ASBIS do not use improper chemicals or hazardous
materials. We obtain the necessary certificates such as CE
(Conformité Européenne) and RoHS (Restrictions of
46
Consolidated Non-financial Report of ASBISc Enterprises Plc for 2021
65
Hazardous Substances). We have our own QA&QC
(Quality Assurance and Quality Control) team (22 people)
in our Chinese and Czech offices that conduct all the
required and necessary tests.
Discussion of strategies to reduce the
environmental impact of packaging
CG-MR-410a.3
We receive already packaged products from the vendors
such as Apple, Dell, Intel, AMD etc. all of which are
companies with very good environmental record. In the last
year, we have also seen some of our vendors improve
packaging, among them Apple who reduced the size of all
their packaging, allowing for more items to be fitted on the
pallets, therefore minimizing the use of paper and logistics
cost which in turn contribute to even lower carbon footprint.
What we do additionally is put overcarton over the goods
and place them on the pallets. Sometimes we place most
valuable goods inside wooden boxes. For additional
security we may use small plastic crates (boxes). We mostly
use vercarton, wooden boxes, small plastic boxes as
packaging. We use exactly what is required. Overcarton
and wooden boxes are used only for the goods of the
highest value and only to destinations where such security
measures are needed. We use the cartons (small boxes)
received from vendors for our courier deliveries, minimizing
the quantity of additional packaging and ways to minimize
empty space in pallets. But if needed we use empty
cardboard boxes or bubble foil. We are mainly a distributor
and have no direct impact on the actual packaging of goods
(retail packaging). We developed Green packaging for our
own brands. All packages used at DC are made from
recycled materials, while plastic blisters and hooks have
been replaced with paper trays and hooks.
46, 47
Activity metric
Number of: (1) retail locations and (2) distribution
centers
CG-MR-000.A
We had 2 distribution centres and 17 APR outlets and 3
monogrand stores at the end of 2021.
4,
6, 10, 11
, 12
Total area of: (1) retail space and (2) distribution
centers
CG-MR-000.B
Retail outlets: 1,680 m2 of area. The DC in Prague is used
for the distribution in Europe, while the one in Dubai serves
our operations in Middle East and Africa and certain Central
Asian countries. Our facility center in Prague is leased and
has a total area of 6,365 m2, of which 5,688 m2 is the
warehouse. The center in Dubai is owned and has an area
of 4,246 m2, of which 3,294 m2 is the warehouse. The land
on which the Dubai centre was constructed is leased from
the local authorities and has an area of 6,475 m2.
10
Consolidated Non-financial Report of ASBISc Enterprises Plc for 2021
66
Below we present the TCFD recommendations alignment table
Topic
Indicator
Page number
Comment
Governance
:
Disclose the organisation’s
governance around climate
-
related risks
and opportunities.
a.
Describe the board’s oversight of climate-related risk and opportunities 26, 57-58 Disclosed
b. Describe the management’s role in assessing and managing climate-related risks
and opportunities
26, 57-58 Disclosed
Startegy:
Disclose the actual and potential
impacts of climate
-
related risks and
opportunities on the organisation’s
businesses, strategy, and financial
planning where such information is
material.
a. Describe the climate-related risks and opportunities the organization has identified
over the short, medium and long term
52-54 Disclosed
b. Describe the impact of climate-related risks and opportunities on the
organisation’s businesses, strategy and financial planning
52-54 Disclosed
c. Describe the resilience of the organisations’ strategy, taking into consideration
different climate-related scenarios, including a 2 degree C or lower scenario
53 Disclosed
Risk management:
Disclose how the
organization identifies, asseses and
manages climate
-related risks.
a. Describe the organisation’s processes for identifying and assessing climate-
related risks
52-54, 57-58 Disclosed
b.
Describe the organisation’s processes for managing climate-related risks 52-54, 57-58 Disclosed
c. Describe how processes for identifying, assessing and managing climate-related
risks are integrated into the organization’s overall risk management
52-54, 57-58 Disclosed
Metrics and targets: Disclose the metrics
and targets used to assess and manage
relevant climate
-related risks and
opportunities where such information is
material.
a. Disclose the metrics used by the organization to assess climate-related risks and
opportunities in line with its strategy and risk management process
45-51 Disclosed
b. Disclose Scope 1, 2 and, if appropriate 3 greenhouse gas (GHG) emissions, and
the related risk
49-51 Disclosed
c. Describe the targets used by the organization to manage climate-related risks and
opportunities and performance against targets
-
Not disclosed due to lack
of targets
