Information on the creation of a provision for part of the receivable resulting from the exercise of the put option for eSky.pl S.A. shares, the recognition of deferred tax asset and change in the revenue recognition model regarding sale of goods in one of the subsidiaries in the annual consolidated financial statements of the Wirtualna Polska Holding Capital Group for 2020
Current Report No. 7/2021 dated 25 March 2021Information on the creation of a provision for part of the receivable resulting from the exercise of the put option for eSky.pl S.A. shares, the recognition of deferred tax asset and change in the revenue recognition model regarding sale of goods in one of the subsidiaries in the annual consolidated financial statements of the Wirtualna Polska Holding Capital Group for 2020.
Legal basis: Article 17.1 MAR
Content of Report:
In the course of preparing the consolidated financial statements for 2020, the Management Board of Wirtualna Polska Holding S.A. (The "Company") identified the need to make the following postings:
1. Recognition of PLN 9.8 million of provision for the call option receivable on eSky.pl S.A. shares
Since the entities obliged failed to settle the due put option price, on December 1, 2020 Wirtualna Polska Media S.A. ("WPM") filed a claim in the injunction proceedings against them for the total amount of PLN 17.2 million. Taking into account the pending court proceedings and risk of a protracted litigation procedure (related i.a. to the pandemic) as well as following the principle of prudent valuation, the Management Board of the Company decided to recognise a provision in the amount of PLN 9.8 million. Nevertheless, WPM plans to use all available legal methods to collect the full amount of due receivable. WPM's claim for the payment of the put option price is indisputable, and it is secured by registered pledge agreements established in favour of WPM on approx. 6% of eSky.pl S.A. shares. In addition, after obtaining the relevant court decisions, WPM may also pursue the satisfaction of claims from other assets belonging to the obligors, as well as from natural persons who have assumed joint and several liability for the obligations of above - mentioned entities.
2. Recognition of PLN 11 million of a deferred tax asset on loss for the year 2016.
In the fourth quarter of 2020, the subsidiary WPM recognized an additional deferred tax asset in the amount of PLN 11 million on the tax loss generated by the company in 2016 (thus activating the last part of this loss) based on forecasts confirming the possibility of its utilization. As at December 31, 2020, PLN 6.5 million of the amount of the created asset remains to be settled in 2021.
3. Change in the revenue recognition model for revenues from the sale of goods (cars) in the subsidiary Superauto24.com Sp. z o.o., with no effect on the financial result. Recognition of additional PLN 22.3 million of revenues and an equal amount of costs of goods sold, previously presented only in the amount of the margin (as the agent's income).
During 2020, the sales model of Superauto24.com Sp. z o.o. ("SA24") has evolved from purely agency sales to a hybrid model in which cars are purchased by SA24 both with and without a specific customer order. In the case of agency sales, the International Financial Reporting Standards require revenue from sales to be recognized up to the amount of the sales margin realized, while in other cases, revenue is recognised in the full value.
The above described change in presentation method modifies the previous approach as follows:
• 9 months ended September 30, 2020:
Revenues from the sale of goods: PLN +11.4 million
Cost of goods sold: PLN -11.4 million
Impact on the result of the period: -
• 3 months ended December 31, 2020:
Revenues from the sale of goods: PLN +10.9 million
Cost of goods sold: PLN -10.9 million
Impact on the result of the period: -
Legal basis: Article 17 1 of European Parliament and Council Regulation No 596/2014 of 16 April 2014 on market abuse (Market Abuse Regulation) and repealing Directive 2003/6 / EC of the European Parliament and of the Council and Commission Directive 2003/124 / EC, 2003/125 /EC and 2004/72 / EC
Signatures of the individuals representing the Company:
Jacek Świderski – President of the Management Board/Chief Executive Officer
Elżbieta Bujniewicz – Belka – Member of the Management Board/Chief Financial Officer