Neve Ne’eman Ind. Area
4 Ha’harash Street, P.O.B. 7318
4524075 Hod Hasharon
Israel
BATM ADVANCED COMMUNICATIONS LTD ANNUAL REPORT AND ACCOUNTS 2021
FOR THE YEAR ENDED 31 DECEMBER 2021
ANNUAL REPORT
AND ACCOUNTS
ANNUAL
REPORT & ACCOUNTS 2021
1
STRATEGIC REPORT
CONTENTS
Strategic Report
Strategic Framework 2
Performance Highlights 3
Chairman’s Statement 4
Chief Executive O cer’s Review 6
Edgility 10
Stakeholder Engagement 12
Chief Financial O cer’s Review 14
Key Performance Indicators 17
Business Model 18
Sustainability Review 19
Risk Management 22
Corporate Governance
Directors’ Biographies 24
Corporate Governance Report 26
Audit Committee Report 32
Directors’ Remuneration Report 35
Directors’ Report 57
Financial Statements
Independent Auditor’s Report 61
Consolidated Financial Statements 65
Notes to the Consolidated
Financial Statements 70
Other Alternative Measures 110
Company Information 112
BATM is
a leader in
real-time
technologies.
We bring high-technology solutions that are
innovative, cost-effective and reliable to our
chosen global sectors of biomedicine and
networking.
BATM’s global footprint
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We deliver
high-technology
solutions
That solve complex
challenges in mission-
critical, largescale
applications
We build value creation
strategies
From idea, to scale up, to mass-market
success
And maximise the long-term value of
our businesses through organic and
inorganic strategies
And di erentiate through…
Our intellectual property
The world-leading expertise of our
employees
Innovative, robust, reliable and cost-
e ective solutions
While seeking to accelerate
our growth
By establishing partnerships,
collaborations and joint ventures to
maximise resources and enhance our
routes-to-market
To create value for our
stakeholders by…
Growing total shareholder returns
Exceeding our customers’ expectations
Motivating our people
Making a positive contribution to our
communities
We serve blue-
chip customers
worldwide
Including enterprises,
governments and
international agencies
Strategic Framework
BATM’s purpose is to deliver high-technology innovations that make
a signifi cant di erence to the human experience
With a focus
on the global
sectors of…
Bio-medical solutions
and
Networking and cyber
security
STRATEGIC REPORT
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STRATEGIC REPORT
Underlying growth across all
business units
Group revenue
Ongoing operations (adj.)*
$132.8m
+18.0%
(2020: $112.6m)
Reported
$140.0m
-23.7%
(2020: $183.6m)
Gross margin
Ongoing operations (adj.)*
37.8%
+140bps
(2020: 36.4%)
Reported
36.5%
+340bps
(2020: 33.1%)
Gross prot
Ongoing operations (adj.)*
$50.2m
+22.5%
(2020: $41.0m)
Reported
$51.1m
-15.9%
(2020: $60.7m)
Operating prot
Ongoing operations (adj.)*
$11.3m
+339.5%
(2020: $2.6m)
Reported
$24.4m
+71.3%
(2020: $14.2m)
EBITDA
Ongoing operations (adj.)*
$15.7m
+138.8%
(2020: $6.6m)
Reported
$29.6m
+50.4%
(2020: $19.7m)
Cash and nancial
assets
Reported
$67.8m
+26.9%
(2020: $53.4m)
Sustained growth for
molecular diagnostics
Growth in COVID-19 and non-
COVID-19 solutions
Launch of Edgility
Won two edge computing
contracts
Established four new
partnerships
Over $18m received in
cyber
security contracts
* Adjusted to present the results on an ongoing operations basis by excluding (1) the contribution to
both years from NGSoft, a subsidiary that the Group sold in March 2021, (2) the contribution to 2020
amortisation of intangible assets for both years. The term ‘ongoing operations’ in this Strategic Report is
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120
90
60
30
BIO-MEDICAL DIVISION
Revenue from ongoing operations (adj.)*
2020 2021
US$ million
20
15
10
5
NETWORKING AND CYBER DIVISION
Revenue from ongoing operations (adj.)*
2020 2021
US$ million
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I am delighted to present BATM’s Annual Report 2021. It
BATM has established solid foundations in core technologies
– backed by strong intellectual property and patents – that
PROGRESS ACROSS THE BUSINESS
created strong demand for diagnostic instruments and
products for other disease areas. We are specialists not just
of infectious diseases. Pathogens such as tuberculosis (TB)
economic consequences, especially in poorer countries.
backed by the international Stop TB Partnership. We
curable. We are particularly proud of the progress in our
has come to fruition.
protection.
STRATEGY
Chairman’s
Statement
Dr. Gideon Chitayat
Chairman
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expertise of our employees.
be the demands of the future.
We amplify our resources through establishing strategic
partnerships and are focused on creating shareholder
OUTLOOK
demand for molecular biology and diagnostic technology
this year and beyond.
STRATEGIC REPORT
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Bio-Medical Division
Diagnostics
expanded the production capacity of our Adaltis facility in
Rome, Italy.
COVID-19 diagnostic tests
public health authorities in Europe, the Middle East
and South East Asia. We also expanded our portfolio of
l
sample collection and lab processing and it is more cost
test is being produced at our Adaltis facility.
l
®
in Europe under the Adaltis brand and produced at
Gamidor’s facility in Israel.
speed, accuracy and ease of use. This demonstrates the
together our expertise and IP, and the right partners, to
address complex challenges.
Progress in other disease areas
Sales of diagnostic products that are not related to
molecular diagnostics test that is able to test for multiple
to commence in the current year. By detecting multiple
patient sample, patients, laboratories and healthcare
and gaining important insights more quickly.
Ador Diagnostics
Chief Executive
O cer’s Review
Dr. Zvi Marom
Chief Executive O cer
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current year. Work also continued on incorporating the
care settings expected to commence next year.
TB Partnership, an international alliance comprising
TB Partnership.
Organisation.
Eco-Med
On an underlying basis, to exclude the contribution to
completion of these contracts is expected to occur in the
Distribution
Networking and Cyber Division
Networking
(excluding the contribution to both years from NGSoft)
Edgility – Edge Computing and NFV solutions
fundamental in enabling Internet of Things technologies.
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number of these to translate to orders in 2022.
partnerships to accelerate the adoption and sales of Edgility.
l
l
telecommunications operators in Europe and Latin
launched uSphir solution.
l
l
Network Edge solutions and services
primarily based on repeat business from existing clients, but
as the preferred supplier by a tier 1 telecommunications
in this unit than at the start of the year, although this partly
2022 due to global electronic components shortages.
Cyber
department customer. This includes a $10m contract for an
2022.
of our cyber security solution aimed beyond the defence
Outlook
backlog for ongoing operations than at the same point the
Chief Executive Ocer’s Review
CONTINUED
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as normal business practices resume.
increase in orders for solutions in other disease areas as
public health organisations return focus to routine care.
global supply chain challenges, particularly related to any
further shortages of electronics components.
market disrupters. As these technologies transition and
partnerships and disposals.
Innovation
and invention
We harness extraordinary technical
and entrepreneurial talents to bring
leading, disruptive technologies
successfully to market, at scale.
OUR VISION AND VALUES
Reliability
Our customers trust us to
deliver mission-critical products.
Our products are built for
reliability and performance at
scale and in challenging
conditions.
Responsibility
Our corporate responsibility
extends through our focus business
areas, to the way we interact
with all our stakeholders and
our impact on the environment
and our communities.
Investment case
Large, global addressable markets
BATM operates in the large, global markets of networking, cyber
security, diagnostics and other biomedical solutions; and in sub-
segments on the verge of disruption.
Long-term approach
BATM takes a long-term approach to its investments by assessing
long-range industry trends and building dierentiated solutions
backed by IP.
Risk diversication
BATM’s portfolio includes a mix of both established and novel
technologies, and targets a range of sub-segments, customer types
and geographical markets.
Leadership & Expertise
BATM has a highly experienced management team and Board,
with signicant expertise in its target markets, and engages
systematically with external, world-leading experts.
Strong balance sheet
BATM is cash generative and has a strong net cash position,
supporting growth in investment, returns to shareholders and scope
for acquisitions.
Financial growth
BATM targets revenue, margin and EPS growth both organically and
via acquisition; and seeks to maximise shareholder value, where
appropriate, through value realisation opportunities.
Our vision is to be leaders in high-technology innovations that make a signicant dierence to the human experience
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Edgility
Edgility provides customers with a simple and easy-to-use platform to deploy, manage and operate multiple virtual
services/functions on multiple thousands of edge devices at multiple sites. New services (or sites) can be deployed in
a matter of minutes – rather than days – without the need for technical personnel on-site. This smart edge computing
platform comprises two components: Edgility OS, a high-performance and small footprint operating system, and Edgility
Central, a cloud-based management and orchestration (MANO) system.
Key highlights of Edgility’s oering:
l
pane of glass
l
l
l
l
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Case study: CEMEX
"We chose Edgility for its superior Management & Orchestration, which provides us with an end-to-end toolset to cost-eectively
deploy and then manage the lifecycle of our edge devices. Edgility provides the exibility and scalability to expand and adapt to our
fast-changing business requirements, as well as hosting diverse applications on any standard server."
Fernando Garcia -Villaraco Casero, IT Strategy and Architecture Manager - Global at CEMEX
CEMEX is one of the world's leading construction materials companies, manufacturing and distributing cement, ready-mix concrete, and aggregates
in more than 50 countries. With 41,000 employees, CEMEX operations span thousands of sites worldwide.
CEMEX decided in 2020 to replace CemexNet with virtualised secure SD-WAN functions across all its sites. CEMEX's overriding goal was to gain
control of its network. It sought to reduce the complexity of managing CEMEX’s thousands of edge devices across multiple sites, lower the monthly
operational costs and increase exibility. Automated deployment and simple management of edge devices were key requirements due to the large
number of sites to be handled by a third-party system integrator.
CEMEX selected Edgility as the operating system and management system for the uCPE edge devices in its new enterprise communications network.
It enables CEMEX to seamlessly upgrade to a exible, automated, and resilient Enterprise WAN architecture. CEMEX chose Edgility for its advanced
automation and intuitive management capabilities – allowing CEMEX to cost-eectively deploy, maintain and integrate best-of-breed network
functions and applications from multiple software providers across its network.
Case study: e-Qual
"We selected Edgility for its distinctive technological superiority over all the alternatives we examined. Edgility provides a single,
all-in-one solution including all the orchestration tools we require."
Philippe de Lussy, CEO of e-Qual
e-Qual is a France-based managed services provider, oering connectivity, IT, and network management services to mid-sized to large organisations
in the private and public sectors in 55 countries. e-Qual integrates telecom, network, systems, and security solutions, and operates them from a 24/7
service and operations centre.
To streamline and reduce the cost of operations, e-Qual sought a powerful and automated management and orchestration (MANO) system that would
increase operational eciency while enabling it to provide highly exible and customised services to its diverse customer base.
e-Qual thoroughly examined various solutions and selected Edgility as its next generation edge compute platform. Ideal for meeting its automation
needs, Edgility provides e-Qual with a unied, multi-tenant platform to deploy and manage multiple applications including complex connectivity-based
services, such as SD-WAN, for its enterprise customers.
Edgility oers a high-performance, small form factor operating system that is being deployed on hundreds of edge devices at e-Qual customers sites,
as well as a robust MANO solution installed at e-Qual's service and operation centre. Edgility's MANO allows e-Qual to manage its entire managed
services operation from a single pane of glass.
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Stakeholder Engagement
BATM seeks to deliver value to, and build strong, long-term relationships with, its stakeholders
Customers
Our customers rely on our technology solutions
enabling both BATM and our customers to share
How we engage
l
to key customers and key regions
l
ISO audit and focused on all aspects
of our customer relationships
l
and products for our customers
l
in our customers’ markets
Financial Investors
How we engage
l
l
l
l
request
l
and strategic goals
2021 HIGHLIGHTS
l
362 new customers won (excluding
consumer customers - as opposed
to businesses or public bodies - by
subsidiaries that serve the public)
l
139 customer training programmes
conducted, with participation of
approximately 230 individuals
2021 HIGHLIGHTS
l
Approximately 25 shareholder meetings or
scheduled calls
l
Hosted investor webinars to present FY
2020 and H1 2021 results
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Employees
Our people are our greatest asset. In order
employees’ priorities and requirements.
How we engage
l
l
l
l
l
l
Communities
businesses and charities.
How we engage
l
products in the diagnosis of infectious
l
l
and charitable organisations
l
2021 HIGHLIGHTS
l
Appointed Prof. Varda Shalev to newly-
created 'voice of the workforce' NED role
l
Held ‘round table’ discussions between
employees and management in the
Networking unit, with ndings presented
to the Board
2021 HIGHLIGHTS
l
Arranging quarterly donations of basic
food products and toys to disadvantaged
families
l
Raised $49.5k for charitable causes
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increased
result of the sale of NGSoft.
Sales and marketing expenses for ongoing operations
sales not requiring a commensurate increase in expenses, as
the capital gain from the sale of NGSoft and the contribution
and the gain from the sale of NGSoft.
Chief Financial
O cer’s Review
Moti Nagar, CPA
Chief Financial O cer
1
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disposal of NGSoft.
the sale of NGSoft.
reduction from the disposal of NGSoft.
payments of tax and interest, net cash from operating
more than three months’ duration, held for trading bonds
and marketable securities. The increase in cash and cash
Divisional performance
Bio-Medical Division
On an underlying basis, to exclude the contribution to
Reported Adjusted*
$m 2021 2020 Change 2021 2020 Change
Revenue 140.0 183.6 (23.7%) 132.8 112.6 18.0%
Gross margin 36.5% 33.1% 340bps 37.8% 36.4% 140bps
Operating prot
24.4 14.2 71.3% 11.3 2.6 339.5%
amortisation of intangible assets for both years.
Bio-Medical Division
Reported Adjusted*
$m 2021 2020 Change 2021 2020 Change
Revenue 112.0 128.7 (12.9%) 112.0 95.2 17.7%
Gross margin 36.4% 36.3% 10bps 36.5% 34.8% 170bps
Operating prot
16.5 19.2 (13.7%) 17.0 10.1 67.4%
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Networking and Cyber Division
operations due to increased materials costs related to the
Sale of NGSoft
the sale of NGSoft.
Networking and Cyber Division
Reported Adjusted*
$m 2021 2020 Change 2021 2020 Change
Revenue 28.0 54.9 (49.0%) 20.7 17.3 19.5%
Gross margin 36.9% 25.5% 1,140bps 45.0% 45.6% (60)bps
Operating prot/(loss)
7.8 (4.9) 259.0% (5.6) (7.6) 25.3%
* Adjusted to present the results an ongoing operations basis by excluding (1) the contribution to both years from NGSoft, a subsidiary that the Group
sold in March 2021, and (2) the amortisation of intangible assets for both years.
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Key Performance Indicators
The following key performance indicators (“KPIs”) have been selected as the most appropriate measures of strategy
execution for the Group. We review our KPIs on an ongoing basis to ensure they remain relevant.
Revenue from ongoing operations*
$132.8m
+18%
(2020: $112.6m)
Description
billings generated and recognised during the period
from all operations.
Why it is a KPI
Performance
R&D expenses for ongoing operations*
$8.6m
+1%
(2020: $8.5m)
Description
Why it is a KPI
Performance
Cash from operations
$8.7m
–57%
(2020: $20.1m)
Description
Amount of money the Group brings in
and interest payments.
Why it is a KPI
Performance
Reduction is primarily due to the
timing of payments, namely payment being made in
EBITDA from ongoing operations*
$15.7m
+139%
(2020: $6.6m)
Description
Group earnings before interest, tax,
depreciation and amortisation.
Why it is a KPI
Performance
margin, particularly due to the greater contribution
The Group monitors certain non-nancial performance indicators at an operational level. However, none of these are currently considered to be
individually appropriate as a measure of overall strategy execution success.
*Adjusted to present the results on an ongoing operations basis by excluding (1) the contribution to both years from NGSoft, a subsidiary that the Group sold in March
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Our strategy is powered by our purpose. We bring high-technology solutions that are innovative, cost-eective and reliable,
to our chosen global sectors of networking and biomedicine. We build businesses from idea, to scale up, to mass market
success, through organic and inorganic strategies. We seek to maximise long-term value through our capital allocation and
portfolio management strategies.
Business Model
Networking and Cyber
Division
Our business units:
l
Networking
▲
Edgility
▲
Network Edge
l
Cyber
l
The Networking unit services a wide need for
access solutions to mobile, cloud and wireline
infrastructure markets, with a focus on the
network edge. Innovation is focused on edge
computing and Network Function Virtualisation
(NFV)
l
In the Cyber unit, BATM provides network
monitoring and encryption solutions for very
high speed, large area networks
Revenue model
Revenues are generated from solutions that combine
integrated hardware and software; and, going
forward, increasingly from the sale of software-only
solutions, including on a licence model, to drive
high gross margins and annual recurring revenue
Strategic aim
The Networking and Cyber division is focused on
becoming the leading provider of edge computing
– including Network Function Virtualisation (NFV)
– technologies while supplying carrier ethernet
and MPLS access solutions for the network edge,
and cyber network monitoring and encryption
Bio-Medical Division
Our business units:
l
Diagnostics
l
Eco-Med
l
Distribution
l
In diagnostics, BATM develops its own equipment
and reagents, with a focus on developing the most
advanced molecular biology technologies
l
The Eco-Med unit develops and supplies
innovative solutions to treat pathogenic and
agricultural waste
l
BATM also administers tests and distributes
diagnostic equipment and medical supplies of
other leading brands
Revenue model
Revenues are generated from the sale and
distribution of consumables and equipment, and
from providing equipment service & maintenance
Strategic aim
The Bio-Medical division is focused on becoming a
leading provider of molecular diagnostic laboratory
reagents and equipment as well as innovative
products to treat biological pathogenic waste
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Sustainability Review
Sustainability is at the heart of our business. Through medical
At the same time, both through our solutions and our
People
in corporate functions. In order to recruit and retain the best
to our employees’ priorities and requirements.
Engagement
We are committed to maintaining open and transparent
people and taking into account their feedback. To support
A number of our subsidiary companies conduct annual
strategy and progress. Within our Telco Systems subsidiary,
Diversity
One of our medical diagnostic testing subsidiaries in Israel,
TOTAL WORKFORCEEXECUTIVE MANAGEMENT
Male
Female
29%
69%
71%
31%
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Equality
bullying, and that employees, job applicants, customers, and
Health, Safety & Wellbeing
to, health and safety guidelines at all of our subsidiaries.
penalties in relation to health and safety matters.
Anti-bribery & Corruption
regularly communicated.
Employees are encouraged to approach the administrator
The approach can be anonymous, if the employee chooses.
disciplinary action against a complainant unless the report
or to be malicious.
reports, bribery, corruption or business interruptions as a
Communities
and supporting local businesses and charities.
and subsequent distribution of baskets of both
In addition, a key tenet of our strategy is the research
laboratories rather than purely in mega labs in a central
Environment
Sustainability Review
CONTINUED
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or medical and pharmaceutical facilities. These
source of protein.
measuring systems, including solutions for testing
less energy and reduce the carbon footprint for the
same output.
Recommendations of the Task Force on Climate-related Financial Disclosures
As we describe above, sustainability is at the heart of our business. Both
through our solutions and our actions, we are committed to protecting
the environment to preserve our planet for the generations to come – and
this is core to who we are. However, it is early days in our transition to
formalising our approach and to establishing the framework to address
the recommendations of the Task Force on Climate-related Financial
Disclosures (“TCFD”).
The areas where we have made initial progress against the TCFD
recommendations are as follows:
Governance
— The overall responsibility for assessing and monitoring climate-related
risks and opportunities is that of the Responsible Business Committee
of the Board. For 2022, the Committee intends to increase the
frequency of meetings for this purpose (among others).
— At present, management’s role in assessing and managing climate-
related risks and opportunities is primarily the undertakings of the
CEO in this regard, who feeds into the workings of the Responsible
Business Committee. In addition, the heads of our subsidiaries in the
Eco-Med unit – namely, Celitron and Green Labs – are called upon
to provide their insight based on their signicant experience and
expertise in environmental matters.
Strategy
— As described in the introduction to this Sustainability Review, our
solutions are designed to address societal challenges of today and
what we believe will be the demands of the future, which includes as a
result of climate-related changes.
— In particular, it is as a result of this that, in recent years, we have
taken the strategic decision to expand our Eco-Med and related
activity – whether through the acquisition of Green Labs, commencing
the provision of environmental analysis/testing from our labs in the
Distribution unit; expanding into the provision of instruments for the
recovery of insect protein (which has a role in combatting climate
change and also in oering a source of protein that is less vulnerable
to the eects of climate change); and, as announced during 2021,
participating in the Great Green Wall Accelerator. This continues to be
an important element of our strategy.
For the recommendations and principles of the TCFD that we have not
addressed, this primarily reects the fact that a) BATM is in the process
of formalising and embedding a structured approach to ESG and b) the
requirements regarding TCFD are new this year, which is a year during
which a substantial amount of time was invested in overhauling the
remuneration policy and in undertaking signicant corporate transactional
activity, namely the sale of our NGSoft subsidiary.
Nonetheless, we recognise the importance of more consistent climate-
related disclosures by companies and are committed to placing greater
focus on addressing the recommendations of the TCFD this year. To this
end, we are in the process of engaging a specialist adviser to work with
us to develop and implement a plan that would ensure we are taking
climate change properly into account in our planning and operations.
Accordingly, we expect to make strong progress towards addressing the
recommendations of the TCFD during the period to the publication of our
next annual report.
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Risk Management
Principal Risks and Uncertainties
Risk
How we manage the risk Risk change
Political and
economic
There is a risk of harm to the
business from political unrest
or disruption, particularlyin
emerging markets, and from
a deterioration of economic
conditions .
The Group’s operations are dispersed over a number
of locations so that should a material adverse political
or economic event arise in one location, the Group can
continue with its operations elsewhere thereby helping
to mitigate the impact on its overall business.
a
Legal and
compliance
There is a risk that legal and/
or regulatory requirements
are not met, leading to
theloss oflicenceto operate,
reputational damage or
nancial loss.
The Group retains very experienced legal advisers of
a high calibre for the Company and main subsidiaries
in the Group who provide ongoing advice and updates
on relevant legal compliance requirements. The Group
monitors the regulation that is relevant to its activities
and, when needed, makes the necessary adjustments
to maintain compliance.
_
Business
continuity
There are risks to business
continuity from specic
events, such as natural
disasters and pandemics.
The Group operates in numerous locations and its
manufacturing contractors are also located in multiple
locations, which would help to mitigate the impact of a
business disaster. In addition, the key employees in the
workforce have been positioned such that they are able
to work without interruption by working remotely from
their homes. The Group also keeps a cash cushion to
ensure that unexpected events don’t cause unnecessary
indirect adverse eects beyond the direct outcomes.
_
Supply chain A disruption in the supply of
key raw materials or services
to a manufacturing site could
aect the Group’s ability to
make and deliver products
to customers, leading to
interruption in supply, lost
revenue and damage to
its reputation as a reliable
supply partner. This could
be resulting from market
shortages, disruption due to
global events and physical
climate-related disruption of
upstream supply chains.
The Group has established strong supplier
relationships and collaborates with multiple vendors
globally to broaden the geographical coverage of its
access to available components. The Group requests
that customers provide long-term committed forecasts
and itself provides multi-year forecasts to its contract
manufacturers. In addition, where appropriate,
it reengineers products to enable them to have
replaceable component alternatives. At times when
availability of components is constrained, the Group
seeks alternative sources and to increase inventory
levels of both components and nished goods.
a
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STRATEGIC REPORT
Viability Statement
timeframe for assessment because it is aligned to the
operational positions and contracted capital expenditure.
Risk
How we manage the risk Risk change
Competition
There is a risk that BATM is
unable to build and maintain
competitive advantage in
itsfocus markets.
The Group is a leading company in those technological
areas in which it operates and aspires to be a dominant
player in each such niche. The Group periodically
evaluates how to improve its eciency by developing
and producing better quality and performance products
at more attractive prices – thus giving it an advantage
over its competitors.
—
Customer and
partners
There is a risk of harm to
the Group’s revenues as
a result of termination
of businessrelationships
with material customers or
partners and sales agents.
The Group maintains ongoing dialogue with its customers
and business partners in order to identify ahead of
time any potential problems arising on the part of the
customer and in order to maintain a close relationship
with its customers. The Group also does not have a
signicant reliance on one or few customers or partners.
—
Research &
Development
(R&D)
There is a risk that R&D
programmesoverrun or do
not deliver the expected
benets.
With respect to its R&D, the Group’s strategy has been
to diversify its R&D operations among a variety of
teams, internally and externally (through universities
and hospitals that carry out clinical tests) and by using
dierent R&D funding sources – thus reducing the R&D
risk. In addition, any signicant new R&D projects are
brought to the Board for consideration. Still, the Group
considers certain level of risk as inherent to R&D activity,
and views R&D activity as valuable to the Group despite
that risk.
a
Information
security
(including
cybersecurity)
There is a risk of information
security, data loss and
corruption, and physical
damageto IT infrastructure.
The Group routinely carries out IT evaluations to ensure
that its IT systems have the latest cyber security tools
and security procedures in place. In addition, BATM
and two of its subsidiaries operating in the networking
and cyber niches are approved suppliers to the Israeli
Ministry of Defense and, as such, are continually
monitored by the MoD and must maintain the highest
level of cyber security.
_
Foreign
Exchange
There is a risk that the Group’s
currency exposure leads to
nancial loss.
The Group’s nance department at the corporate level
manages the cash and income in such a way as to
match each company’s or subsidiaries’ revenues to its
expenses and keeps these in the same currency, thereby
reducing currency exposure. When this is not possible,
the Group uses hedging transactions when needed to
protect itself against potential currency risk. However,
by its nature, in the Board’s opinion, it is very dicult
to hedge against currency uctuations arising from
translation in consolidation in a cost-eective manner.
_
continue in operation and meet all their liabilities as they fall
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Directors’ Biographies
strategy to the board and presidents of
Wharton School and a Master’s in
the Sackler – Gold Schlagger School of
Medicine, Israel and an MSc in Industrial
Manufacturers’ Association of Israel until
– Israel, he interfaced and handled
leading corporate global clients,
including companies traded on the
companies primarily in the industrial,
Nagar also led and supported public
international taxation. Mr. Nagar
graduated in Business Management and
Gideon Chitayat
Non-executive Chairman
Zvi Marom
Founder & CEO
Moti Nagar
Executive Director & CFO
CORPORATE GOVERNANCE
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epidemiology, medical informatics
care physician. She has pioneered
registries to support chronic disease
management, and has authored or
In addition, she is a Professor at the
General of the Israeli Prime Minister’s
Benjamin Netanyahu’s economic
the Board of Israel Aerospace Industries
Ltd, the leading Israeli aerospace and
energy company, since 2021. Mr. Locker
Varda Shalev
Non-executive Director
Harel Locker
Non-executive Director & Senior
Independent Director
CORPORATE GOVERNANCE
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Corporate Governance Report
company that is traded on the London Stock Exchange and
CORPORATE GOVERNANCE FRAMEWORK
The Board has delegated the daily operational management
Remuneration, Nomination and Responsible Business.
THE BOARD
MATTERS RESERVED FOR THE BOARD
areas of decision for, the Board. These include preparation
BOARD AND COMMITTEE MEETINGS
meets at least four times a year in formal session. Prior to
form and quality appropriate for it to discharge its duties
Meeting attendance
Director
Board
Audit
Committee
Remuneration
Committee
Nomination
Committee
Responsible
Business
Committee
Dr. Gideon Chitayat,
Chairman
8/8
*
1/14* 2* –
Dr. Zvi Marom, CEO 2* – –
8/8
*
4*Moti Nagar, CFO 2* –
8/8
*
4*1/1
Harel Locker, SID 7/8 4/4 2/2 0/0 0/1
Prof. Varda Shalev, NED 8/8 4/4 2/2 0/0 1/1
Prof. Ari Shamiss, NED
**
7/8** 4/4 2/2 0/0 1/1
* Attended by invitation
** Retired as a Non-executive Director on 28 November 2021
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CORPORATE GOVERNANCE
concerning the state of the business and performance.
present, during the year.
DIVISION OF RESPONSIBILITIES
The Board has also adopted formal terms of reference
is responsible for making and implementing operational
decisions and for making recommendations to the Board.
INDEPENDENCE
character and judgment and no circumstances or matters
(including any business or other relationship) exist that
could compromise such independence. The interests of the
EFFECTIVENESS & EVALUATION
medical and diagnostics areas), entrepreneurship and
and standing. The Board is of the opinion that each of its
to perform the functions required of a director of a listed
company and that the Board is comprised of a good
INDUCTION
premises of its main subsidiaries in Israel.
INFORMATION AND SUPPORT
information in a form and quality appropriate for them to
discharge their duties concerning the state of the business
detailed operating report on the performance of the
Board meeting. Once per year, a budget is discussed and
are properly briefed on issues arising at Board meetings and
Board meeting and Board committee meeting. All of the
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BOARD COMMITTEES
ensures that each such committee is fully constituted and
addition, the Board has appointed a Responsible Business
Audit Committee
Members:
Remuneration Committee
Members:
Nomination Committee
Members:
the recruitment process and in the context of the resulting
balance of skills and experience in identifying a candidate
pool and in the recruitment of Board members from such
Board. Board appointments are made on merit set against
or in cases of early resignation of a director, the Nomination
expertise required of potential candidates and prepares a list
Corporate Governance Report
CONTINUED
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CORPORATE GOVERNANCE
Responsible Business Committee
Members:
l
l
l
l
l
l
l
l
and discussed by, the Board.
RELATIONS WITH SHAREHOLDERS AND
SIGNIFICANT SHAREHOLDERS
institutional shareholders (other than during closed periods)
l
l
2021.
l
l
l
l
l
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CULTURE AND CONFLICTS
there exists a culture that is free from discrimination
and harassment in any form. The Board ensures that the
not to discriminate amongst employees on account of sex,
sexual tendencies, personal status and any other forms of
discrimination.
ANNUAL GENERAL MEETING
pandemic and related public health guidance and legislation,
www.batm.com
Corporate Governance Report
CONTINUED
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CORPORATE GOVERNANCE
Provision
Exception and explanation
14
The responsibilities of the chair, chief
executive, senior independent director,
board and committees should be clear,
set out in writing, agreed by the board
and made publicly available.
The Israeli Companies Law, which applies to the Group, sets out and
denes the responsibilities and duties of the directors and the CEO. The
Group has not adopted a separate formal schedule of responsibilities for
the CEO.
18
All directors should be subject to
annual re-election.
In accordance with Israeli law, the Group is required to appoint at least
two independent non-executive directors (dened as ‘external directors’
within Israeli law), who must be appointed for a minimum of one three-
year term. Mr. Harel Locker and Prof. Varda Shalev are classied as
external directors and cannot be subject to annual re-election (however,
the Israeli Companies Law does provide grounds for removing an external
director from oce). All other members of the Board are subject to annual
re-election.
19
The chair should not remain in post
beyond nine years from the date of
their rst appointment to the board.
As of June 2021, Dr. Gideon Chitayat, Chairman, has served on the Board
for 11 years – seven of these as Chairman. Dr. Chitayat was appointed
to the Board as Independent Non-Executive Director and the Board
continues to consider him as independent in character and judgement,
and there are no relationships or circumstances that could aect his
judgement. His knowledge of the business and the understanding of
its various components, which is built on his experience, combined
with his independence of mind, enables a critical review of strategy
and operations. In addition, his vast business experience, expertise and
knowledge of directing large business organisations within Israel is a
valuable resource for the Board and the Group as a whole. As a result, the
Board believes that Dr. Chitayat remaining as Chairman is in the best of
interests of the Group and of shareholders.
21
A regular externally facilitated Board
evaluation.
Externally facilitated Board evaluation is not common practice in the
Israeli corporate business environment. The Group continues to consider
methods for implementing this provision.
34
The remuneration of non-executive
directors should be determined
in accordance with the Articles of
Association or, alternatively, by the
board.
Compliance with this provision is not compatible with Israeli law as the
fees for the external directors (as dened under Israeli law) are set in law.
COMPLIANCE WITH THE UK CORPORATE GOVERNANCE CODE
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Audit Committee Report
Dear Shareholder,
MEMBERSHIP AND ATTENDANCE
l
l
prior to the announcement of interim or annual results. The
back to the Board. The external auditor communicates
GOVERNANCE AND COMPLIANCE
of Reference adopted by the Board for this committee
RESPONSIBILITIES AND ACTIVITIES
legal requirements, accounting standards and the Listing
these procedures.
l
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CORPORATE GOVERNANCE
l
l
and associated risk assumptions, the accounting policies
assumptions and adjustments made.
l
year.
l
controls and disclosures made in the Annual Report and
l
and litigation.
INTERNAL AUDIT, INTERNAL CONTROL AND RISK
MANAGEMENT
and for determining the nature and extent of principal
2021 a robust assessment of such risks accordingly,
Group’s appliance of the recommendations of an internal
internal auditor potential risks and a proposed plan for
the completion of each report, the internal auditor sends it
responsibility and the Board instructs management to
policies and procedures. The main elements of internal
l
major business risks on a daily basis is the responsibility
and procedures, as directed by senior management,
These include procedures and guidelines to identify,
an ongoing basis.
l
and senior management.
l
strictly segregated to minimise risk.
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l
and depends on the scale of the risk in question and the
EXTERNAL AUDITOR AND INDEPENDENCE
assess on an annual basis, the performance of the external
auditors, their independence and the reasonableness of
or reappointment, or replacement of the external auditors of
Rotation of external auditors is not accepted practice in the
regulations that relate to rotation of the external auditors.
role. The most recent audit partner rotation occurred in
regarding independence.
NON-AUDIT SERVICES
the external auditors on matters relating to acquisition
independence of the external auditors.
Harel Locker
Audit Committee Chairman
13 April 2022
Audit Committee Report
CONTINUED
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CORPORATE GOVERNANCE
REMUNERATION COMMITTEE REPORT
Dear Shareholder
The Board is pleased to present the Remuneration
design appropriate remuneration packages to attract,
INTRODUCTION
We engaged external experienced consultants in the area
and is intended to operate for a period of three years.
or the amendments introduced in relation to the preparation
DIRECTORS’ REMUNERATION REVIEW FINDINGS
AND OUR NEW POLICY
practice in Israel and requirements expected by institutional
l
l
Directors’ Remuneration Report
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in a mix of cash and deferred shares).
l
l
l
No shareholding guideline is currently in place. The
granted and shares purchased from the date this policy
standards.
BUSINESS PERFORMANCE AND 2021 INCENTIVE
OUTCOMES
ongoing operations basis
1
NGSoft and strengthening senior talent in the organisation
through recruitment. As a result of the strong performance
performance.
STAKEHOLDER VIEWS & ENGAGEMENT
Annual General Meeting.
Prof. Varda Shalev
Remuneration Committee Chair
13 April 2022
Directors' Remuneration Report
CONTINUED
1
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CORPORATE GOVERNANCE
REMUNERATION
POLICY
This Remuneration Policy sets out the remuneration policy
the BATM Group.
THE REMUNERATION COMMITTEE’S
RESPONSIBILITIES
(2) Recommending appropriate remuneration packages
REMUNERATION PHILOSOPHY AND OBJECTIVES
appropriate balance that takes into account BATM’s Israeli
origins and the pay expectations for a company listed on
l
Remuneration should be related to performance on
l
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component to further align the interests of the senior
l
l
l The Policy should ensure transparency and accountability
CONSIDERATIONS WHEN DETERMINING
REMUNERATION POLICY
In forming our Policy during the course of 2021, and in
planning for its implementation, good practice in both Israel
l
Clarity
Our Policy is transparent and has been clearly articulated
to our shareholders (during prior consultation).
l
Simplicity
communicate and operate.
l
Risk
is discouraged and mitigated through, for example (i) the
pay, (ii) the deferral of a proportion of annual bonus into
l
Predictability
l
Proportionality
ability and openness to the use of discretion to ensure
and practices.
l
Alignment to culture
Directors' Remuneration Report
CONTINUED
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CORPORATE GOVERNANCE
DIRECTORS’ & OFFICERS' REMUNERATION POLICY
TABLE
Base Salary
Purpose and link to strategy
responsibility.
Operation
from 1 January.
l
expertise, role and responsibilities
l
l
l Performance
l External market trends
l
l
l
and complexity.
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Maximum potential value
No prescribed maximum or maximum increase.
stated under ‘Operation’.
on a per country basis so as to ensure that the comparison is made on the same
underlying parameters.
Performance targets
Although there are no formal performance conditions, any increase in base
column of this table.
Benets
Purpose and link to strategy
Operation
terms.
eligible employees.
Directors' Remuneration Report
CONTINUED
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CORPORATE GOVERNANCE
Maximum potential value
Study fund contributions are common in Israel and under this arrangement the
also deposited to this fund.
Performance targets
Not applicable.
Pension
Purpose and link to strategy
Operation
appropriate through contribution to a pension fund.
Maximum potential value
salary from the employee’s base salary and deposit it into the pension fund.
Performance targets
Not applicable.
Annual Bonus
Purpose and link to strategy
risk taking.
Operation
Bonuses are not contractual and are not eligible for inclusion in the calculation of
pension arrangements.
Maximum potential value
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Directors' Remuneration Report
CONTINUED
Performance targets
Long Term Incentive Plan (LTIP)
Purpose and link to strategy
superior shareholder returns.
Operation
Any options shall not be exercisable more than ten years after the date of grant.
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CORPORATE GOVERNANCE
Maximum potential value
Performance targets
Performance measures may include, and are not limited to, EPS, absolute or
Share Ownership Guidelines
Purpose and link to strategy
Operation
Maximum potential value
Performance targets
Not applicable.
Non-Executive and Non-External Directors’ Salary and Benets
Purpose and link to strategy
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Directors' Remuneration Report
CONTINUED
Operation
Maximum potential value
No prescribed maximum or maximum increase.
Performance targets
Not applicable.
External Directors’ Fees and Benets
Purpose and link to strategy
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CORPORATE GOVERNANCE
Operation
Maximum potential value
No prescribed maximum fee or maximum fee increase.
set out in the ‘Operation’ column of this table.
Performance targets
Not applicable.
Recovery of variable remuneration
made. The maximum aggregate bonus shall be as set forth
standards), then the applicable bonus shall be recalculated
using such restated data (the "Restated Bonus"). The
completion of the restatement. To the extent that no bonus
Balance shall be deducted from the bonus payable in the
such unpaid balance shall be repaid pursuant to the terms
Director and oce holder insurance
remuneration policy (since such insurance is classed as
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Directors' Remuneration Report
CONTINUED
assets or obligations, and that the insurance premium and
ILLUSTRATION OF THE APPLICATION OF THE
POLICY
minimum, on target and maximum performance for each
Assumptions for the Chart below
l
for 2020.
l
l
l
(but no share price appreciation has been assumed for
SELECTION OF PERFORMANCE MEASURES AND
TARGETS
Annual bonus
The annual bonus arrangements are focused on the
report.
Long-Term Incentive Plan
shareholder returns.
of performance measures and the
appropriateness of the performance
targets prior to each LTIP grant. It is
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CORPORATE GOVERNANCE
Measurable Targets
l Work plan targets
l Budget targets
l
l
FLEXIBILITY, DISCRETION AND JUDGEMENT
number of respects in relation to the operation of each plan.
l
payments
l
l
control or restructuring of the Group
l
l
circumstances (e.g. for a rights issue, a corporate
l
l
conditions set in relation to an annual bonus plan or a
l
Policy
All assessments of performance are ultimately subject to the
payments in appropriate circumstances as outlined in this
report detailing the payment outcome.
LEGACY ARRANGEMENTS
APPROACH TO RECRUITMENT REMUNERATION
pay on recruitment.
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Directors' Remuneration Report
CONTINUED
SERVICE CONTRACTS, LETTERS OF APPOINTMENT
AND POLICY ON PAYMENTS FOR LOSS OF OFFICE
in order to attract and retain highly skilled professional
termination is in circumstances that negate the payment of
l
of basic salary (but excluding any bonus, commission,
l
l
rate to a lesser extent) if it decides it is appropriate to do
performance against the performance conditions and
l
The Group may pay outplacement and professional legal
pay any statutory entitlements or settle compromise
of the plans.
l
Name Date of service contract Duration
Dr. Zvi Marom
Moti Nagar
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CORPORATE GOVERNANCE
CHAIR AND EXTERNAL DIRECTORS
only be terminated for cause in special circumstances by
Name Date of appointment Term
Dr. Gideon Chitayat
Harel Locker
Prof. Varda Shalev
Three years
EXTERNAL APPOINTMENTS
CONSIDERATION OF SHAREHOLDER VIEWS
from time to time (including any updates to shareholders’
remuneration guidelines), is then considered as part of the
implementation.
CONSIDERATION OF EMPLOYMENT CONDITIONS
ELSEWHERE IN THE GROUP
employees across the Group.
While employees are not formally consulted on the design
DIFFERENCES IN PAY POLICY FOR EXECUTIVE
DIRECTORS AND SENIOR EMPLOYEES COMPARED
TO EMPLOYEES MORE GENERALLY
employees, accounting for national and regional talent
salary increases and pay and employment conditions across
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ANNUAL REPORT ON REMUNERATION
the operation of the Remuneration Policy.
REMUNERATION COMMITTEE
Roles and responsibilities
Remuneration Committee members and meetings
l
l
l
l
l
to BATM.
Key activities during the year
l
l
l
l
l Set the targets and measures for the 2021 annual bonus
Directors' Remuneration Report
CONTINUED
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CORPORATE GOVERNANCE
2021
Salary/Fees
$’000
Performance Bonus
$’000
Total Remuneration
$’000
Executive Directors
Zvi Marom, CEO
(1)
584 438
*
1,022
Moti Nagar, CFO
(2)
317 158
**
475
Non-executive Directors
Gideon Chitayat 56 –
56
Harel Locker
58 –
58Varda Shalev
62 –
62Ari Shamiss
(3)
57 –
57
Single total gure of remuneration (audited)
2020
Salary/Fees
$’000
Performance Bonus
$’000
Total Remuneration
$’000
Executive Directors
Zvi Marom, CEO 547 410 957
Moti Nagar, CFO 297 149 446
Non-executive Directors
Gideon Chitayat
-
Harel Locker
-
Varda Shalev
-
Ari Shamiss
-
employees.
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Directors' Remuneration Report
CONTINUED
Non-Executive Directors
kind and amounts of remuneration and expenses that
directors. The applicable Israeli statute is the Israeli
pay any additional amounts to the external directors. The
considered an independent director and his remuneration
2021 annual bonus outcome
Dr. Zvi Marom, CEO
Performance
Measure
Weighting
Threshold
(11.11% Payable)
Max
(100% Payable)
Actual FY21
Achievement
Bonus Outcome
(% Of Total
Bonus)
EBITDA 80% $4.3m $8.2m $29.6m 80%
Objectives
Achievements in 2021
Bonus Outcome
(% of Total Bonus)
Successful completion of the sale of
NGSoft
Recruitment of senior employees to
strengthen the Group's management
Achieved successful completion of
the NGSoft sale
Recruited several senior employees,
both at the Group level and in the
individual activities
20%
Mr. Moti Nagar, CFO
Weighting
2021 Target
Achievement in 2021
Bonus Outcome (%
Of Total Bonus)
EBITDA 80% $25.8m $29.6m 80%
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CORPORATE GOVERNANCE
Objectives
Achievements in 2021
Bonus Outcome
(% of Total Bonus)
Successful completion of the sale of
NGSoft
Recruitment of senior employees to
strengthen the Group's management
Achieved successful completion of
the NGSoft sale
Recruited several senior employees,
both at the Group level and in the
individual activities
20%
Long-term incentive awards granted in 2021
Share interests
Shares owned
outright
(31/12/21)
Shares owned
outright
(31/12/20)
Awards
unvested and
subject to
performance
conditions as at
31/12/21
Options
unvested and
not subject to
performance
conditions as at
31/12/21
Options
vested but not
exercised as at
31/12/21
Shareholding as
a percentage of
salary/service
fee
Executive Directors
Zvi Marom 96,794,500 96,794,500 – – 4,000,000 18,886%*
Moti Nagar – – – – 906,200 0%
Non-Executive Directors
Gideon Chitayat 3,159,000 3,159,000 – – – 6,426%*
Harel Locker
– – – – – 0%
Varda Shalev
– – – – – 0%
Ari Shamiss – – – – – 0%
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Directors' Remuneration Report
CONTINUED
TSR performance chart
TSR performance
recognised index containing companies of a broadly similar
700
600
500
400
300
200
100
0
Total Shareholder Return (rebased to 100)
D
ec 2011
Dec 2012
Dec 2013
Dec 2014
Dec 2015
Dec 2016
Dec 2017
Dec 2018
Dec 2019
Dec 2020
Dec 2021
dvanced Communications Ltd FTSE
SmallCap
Ratio of CEO pay to average full-time
employee pay
goods).
Relative importance of spend on pay
shareholders.
2021
($m)
2020
($m)
% change
Employee
remuneration costs
29.5 39.9 (26.1%)
Distribution to
shareholders
4.3
– –
Prot (EBITDA on
reported basis)
29.6 19.7 50.4%
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CORPORATE GOVERNANCE
Percentage change in directors’ remuneration and employee pay
Salary/Fee
Benets
Annual Bonus2021 2020 2021 2020 2021 2020
Executive Directors
Zvi Marom 0% 0% 0% 0% 0% 173%
Moti Nagar 0% 0% 0% 0% 0%
24%
Non-executive Directors
Gideon Chitayat
0%– – – –
Harel Locker*
0%
– – – –
Varda Shalev*
8.8%
– – – –
Ari Shamiss*
5.3%– – – –
* The number of meetings attended by each director may change from one year to another.
Payments for loss of oce and/or payments to former directors (audited)
Statement of shareholding voting
Resolution
Votes for
(including
discretionary)
% for
Votes
against
(excluding
withheld)
%
against
Total (excluding
withheld and third-
party discretionary)
Withheld
Approval of the report
of the Remuneration
Committee
279,405,938
99.63
1,051,158
0.37
280,457,096
0
Approval of the
Directors’ and Ocers'
Remuneration Policy
156,548,999
91.92
13,754,743
8.08
*
188,412,596*
18,108,854
Approval of the CFO’s
2021 bonus relating to
FY2020 performance
262,716,534
93.67
17,740,561
6.33
280,457,096
1
Authorisation for
the Remuneration
Committee to
determine bonus
and LTIP grants for
executive directors
266,702,351
95.10
13,754,743
4.90
280,457,096
2
Authorisation for
the Remuneration
Committee to update
employment and
service agreements
177,432,821
96.61
6,229,774
3.39
188,412,596*
4,750,001
resolutions.
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Directors' Remuneration Report
CONTINUED
Implementation of Policy for FY22
Component of Pay Implementation for FY22
Base salaries
Benets and pension
Annual bonus
LTIP
Total Shareholder Return on
vesting date compared to share
price on date of grant
Vesting percentage of the awards
NED fees
l
l
l
On behalf of the Board
Prof. Varda Shalev
Chair of the Remuneration Committee
13 April 2022
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CORPORATE GOVERNANCE
Directors’ Report
PRINCIPAL ACTIVITIES
Israel and Europe.
FINANCIAL STATEMENTS
2021. The results of the year are set out in the consolidated
RETURNS TO SHAREHOLDERS
The Board considers returns to shareholders to be an
share capital at that date. As at the date of this annual report,
the Group had purchased 200,000 Ordinary Shares under its
share buyback programme.
BUSINESS AND STRATEGIC REVIEW
risks and uncertainties, are set out in the Strategic Report
DIRECTORS
l
l
l
l
l
l
CORPORATE GOVERNANCE STATEMENT
DIRECTORS’ REMUNERATION AND INTERESTS
RULES ABOUT A
PPOINTM
ENT AND REPLACEMENT
OF DIRECTORS
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the Board are subject to a formal, rigorous and transparent
full and transparent information and background to the
meeting and is eligible for reappointment at that meeting.
reasonable opportunity to present their position to the
if the director is found to be of unsound mind, or becomes
director in a public company.
AMENDMENT OF ARTICLES
articles by a simple majority of the shareholders at a General
any proposed amendments to the articles regarding
GOING CONCERN
the foreseeable future. Accordingly, the Group continues
concern basis.
STATEMENT OF DIRECTORS’ RESPONSIBILITIES
for assets, liabilities, income and expenses set out in the
Directors' Report
CONTINUED
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CORPORATE GOVERNANCE
l
l present information, including accounting policies, in a
l
l
users to understand the impact of particular transactions,
and detection of fraud and other irregularities and for
legislation in other jurisdictions.
description of the principal risks and uncertainties they
model and strategy.
Dr. Gideon Chitayat
Chairman
13 April 2022
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ANNUAL
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BATM
Consolidated Financial Statements for the year ended 31 December 2021
60
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Neve Ne’eman Ind. Area
4, Ha’harash Street, P.O.B. 7318
4524075 Hod Hasharon, Israel
Opinion
We have audited the consolidated nancial statements of BATM Advanced Communications Ltd. and its subsidiaries (“the
Group”) set out on pages 65 to 109, which comprise the consolidated statement of nancial position as at 31 December
2021, and the consolidated statement of prot and loss, the consolidated statement of comprehensive income, the
consolidated statement of changes in equity and the consolidated statement of cash ows for the year then ended, and
notes to the consolidated nancial statements, including a summary of signicant accounting policies.
In our opinion, the accompanying consolidated nancial statements present fairly, in all material respects, the consolidated
nancial position of the Group as at 31 December 2021, and its consolidated nancial performance and its consolidated
cash ows for the year then ended in accordance with International Financial Reporting Standards (IFRSs).
Basis for Opinion
We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those
standards are further described in the Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements
section of our report. We are independent of the Group in accordance with the International Ethics Standards Board for
Accountants’
Code of Ethics for Professional Accountants (IESBA Code)
, and we have fullled our other ethical responsibilities
in accordance with the IESBA Code. We believe that the audit evidence we have obtained is sucient and appropriate to
provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most signicance in our audit of the
consolidated nancial statements of the current period. These matters were addressed in the context of our audit of
the consolidated nancial statements as a whole, and in forming our opinion thereon, and we do not provide a separate
opinion on these matters.
Independent Auditor’s Report to the Shareholders
of BATM Advanced Communications Ltd.
FINANCIAL STATEMENTS
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Key audit matter
How our audit addressed the key audit matter
Impairment of goodwill and other intangible assets
As detailed in Notes 23 and 24, as at 31 December 2021 , the
Group had goodwill and other intangible assets of $16,033
thousand.
Goodwill and other intangible assets arise as a result of
acquisitions by the Group. Management conducted their annual
impairment test to assess the recoverability of the goodwill
and consider whether there are indicators of impairment with
respect to other intangible assets. In order to establish whether
an impairment exists, fair value less costs to sell or the value
in use is determined and compared to the net book value of
cash-generating unit to which the goodwill is allocated and other
intangible assets.
This determination of an impairment is highly subjective as
significant judgement is required by the management in
determining the cash-generating units and the fair value less
costs to sell or the value in use as appropriate. The value in
use is based on the cash ow forecast model for each cash-
generating unit and requires the estimation of valuation and
business assumptions, most importantly the discount rate and
growth rate.
We focused our testing of the impairment of goodwill and other
intangible assets on the key assumptions made by the directors.
Our audit procedures included:
Evaluating whether the model used to calculate the fair
value less costs to sell and value in use of the individual
cash-generating units complies with the requirements of
IAS 36: Impairment of Assets.
Using our internal valuation specialists when applicable to
assess the appropriateness of management’s estimations
applied in the discount rates used in the value in use
calculations.
Challenging management’s assumptions applied and inputs
in the respective models by comparing it to historical
information, market researches when available, contractual
arrangements and approved budgets, search for available
contradictory information, including the macroeconomic
impacts resulting from the ongoing COVID-19 pandemic.
Performing stress analysis on key estimates.
Performing discussions, when applicable, with key
management about new signicant clients and markets
penetration, new signicant contracts and bids, certication
status of new products.
Findings
We found the models and assumptions applied in the goodwill
impairment assessments to be appropriate. We considered
the disclosure of the goodwill and other intangible assets to
be appropriate for purposes of the consolidated nancial
statements.
Other Information
Management is responsible for the other information. The
other information comprises the information included
in the annual report, but does not include the nancial
statements and our auditor’s report thereon.
Our opinion on the consolidated nancial statements does
not cover the other information and we do not express any
form of assurance conclusion thereon.
In connection with our audit of the consolidated nancial
statements, our responsibility is to read the other
information and, in doing so, consider whether the other
information is materially inconsistent with the consolidated
nancial statements or our knowledge obtained in the audit
or otherwise appears to be materially misstated. If, based
on the work we have performed, we conclude that there is
a material misstatement of this other information, we are
required to report that fact. We have nothing to report in
this regard.
Responsibilities of Management and Those Charged
with Governance for the Consolidated Financial
Statements
Management is responsible for the preparation and fair
presentation of the consolidated nancial statements
in accordance with IFRSs, and for such internal control
as management determines is necessary to enable the
preparation of consolidated nancial statements that are free
from material misstatement, whether due to fraud or error.
In preparing the consolidated nancial statements,
management is responsible for assessing the Group’s ability
to continue as a going concern, disclosing, as applicable,
matters related to going concern and using the going
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FINANCIAL STATEMENTS
FINANCIAL STATEMENTS
concern basis of accounting unless management either
intends to liquidate the Group or to cease operations, or
has no realistic alternative but to do so.
Those charged with governance are responsible for
overseeing the Group’s nancial reporting process.
Auditor’s Responsibilities for the Audit of the
Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about
whether the consolidated nancial statements as a whole
are free from material misstatement, whether due to fraud
or error, and to issue an auditor’s report that includes our
opinion. Reasonable assurance is a high level of assurance,
but is not a guarantee that an audit conducted in accordance
with ISAs will always detect a material misstatement when it
exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they
could reasonably be expected to inuence the economic
decisions of users taken on the basis of these consolidated
nancial statements.
As part of an audit in accordance with ISAs, we exercise
professional judgement and maintain professional
skepticism throughout the audit. We also:
l
Identify and assess the risks of material misstatement of
the consolidated nancial statements, whether due to fraud
or error, design and perform audit procedures responsive
to those risks, and obtain audit evidence that is sucient
and appropriate to provide a basis for our opinion. The
risk of not detecting a material misstatement resulting
from fraud is higher than for one resulting from error, as
fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
l
Obtain an understanding of internal control relevant
to the audit in order to design audit procedures that
are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the eectiveness of
the Group’s internal control.
l
Evaluate the appropriateness of accounting policies used
and the reasonableness of accounting estimates and
related disclosures made by management.
l
Conclude on the appropriateness of management’s use of
the going concern basis of accounting and, based on the
audit evidence obtained, whether a material uncertainty
exists related to events or conditions that may cast
signicant doubt on the Group’s ability to continue as a
going concern. If we conclude that a material uncertainty
exists, we are required to draw attention in our auditor’s
report to the related disclosures in the consolidated
nancial statements or, if such disclosures are inadequate,
to modify our opinion. Our conclusions are based on the
audit evidence obtained up to the date of our auditor’s
report. However, future events or conditions may cause
the Group to cease to continue as a going concern.
l
Evaluate the overall presentation, structure and content
of the consolidated nancial statements, including the
disclosures, and whether the consolidated nancial
statements represent the underlying transactions and
events in a manner that achieves fair presentation.
l
Obtain sucient appropriate audit evidence regarding
the nancial information of the entities or business
activities within the Group to express an opinion on the
consolidated nancial statements. We are responsible for
the direction, supervision and performance of the Group
audit. We remain solely responsible for our audit opinion.
We communicate with those charged with governance
regarding, among other matters, the planned scope and
timing of the audit and signicant audit ndings, including
any signicant deciencies in internal control that we
identify during our audit.
We also provide those charged with governance with a
statement that we have complied with relevant ethical
requirements regarding independence, and to communicate
with them all relationships and other matters that may
reasonably be thought to bear on our independence, and
where applicable, related safeguards.
From the matters communicated with those charged with
governance, we determine those matters that were of
most signicance in the audit of the consolidated nancial
statements of the current period and are therefore the key
audit matters. We describe these matters in our auditor’s
report unless law or regulation precludes public disclosure
about the matter or when, in extremely rare circumstances,
Independent Auditor’s Report to the Shareholders
of BATM Advanced Communications Ltd.
(CONTINUED)
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we determine that a matter should not be communicated
in our report because the adverse consequences of doing
so would reasonably be expected to outweigh the public
interest benets of such communication.
As required by the Financial Conduct Authority (FCA)
Disclosure Guidance and Transparency Rule (DTR)
4.1.14R, these nancial statements form part of the ESEF-
prepared Annual Financial Report led on the National
Storage Mechanism of the UK FCA in accordance with
the ESEF Regulatory Technical Standard (‘ESEF RTS’). This
auditor’s report provides no assurance over whether the
annual nancial report has been prepared using the single
electronic format specied in the ESEF RTS.
The engagement partner on the audit resulting in this
independent auditor’s report is Efrat Binshtok.
Brightman Almagor Zohar and Co.
Certied Public Accountants
A Firm in the Deloitte Global Network
1 Azrieli Center, Tel Aviv
Israel
13 April 2022
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FINANCIAL STATEMENTS
Revenues 5, 6 140,038 183,566
Cost of revenues 7 88,977 122,856
Gross prot 51,061 60,710
Operating expenses
Sales and marketing expenses 8 18,290 20,197
General and administrative expenses 9 12,243 15,884
Research and development expenses 10 8,713 10,258
Other operating expenses (income) 12 (12,563 ) 138
Total operating expenses 26,683 46,477
Operating prot 24,378 14,233
Finance income 13 1,466 820
Finance expenses 14 (911 ) (1,754 )
Prot before tax 24,933 13,299
Income tax expenses 15 (9,337 ) (1,043 )
Prot for the year before share of loss of a
joint venture and associated companies 15,596 12,256
Share of loss of a joint venture and associated companies (839 ) (774 )
Prot for the year 14,757 11,482
Attributable to:
Owners of the Company 14,340 9,793
Non-controlling interests 417 1,689
Prot for the year 14,757 11,482
Prot per share (in cents) basic 16 3.26 2.22
Prot per share (in cents) diluted 16 3.23 2.21
Consolidated Statements of Prot or Loss
The accompanying notes are an integral part of these nancial statements.
for the year ended 31 December
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Prot for the year 14,757 11,482
Items that may be reclassied subsequently
to prot or loss:
Disposal of a foreign operation (522 ) –
Exchange dierences on translating foreign operations (4,880 ) 3,148
Items that will not be reclassied subsequently
to prot or loss:
Revaluation of investment – (508 )
Re-measurement of dened benet obligation 162 16
Total comprehensive income for the year 9,517 14,138
Attributable to:
Owners of the Company 8,976 13,560
Non-controlling interests 541 578
Consolidated Statements of Comprehensive Income
The accompanying notes are an integral part of these nancial statements.
for the year ended 31 December
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FINANCIAL STATEMENTS
2021 2020
Assets
Current assets
Cash and cash equivalents 65,331 50,575
Trade and other receivables 18 34,932 41,467
Financial assets 17 2,432 2,803
Inventories 19 30,951 33,893
Non-current assets
Property, plant and equipment 20 18,107 16,109
Investment property 21 1,739 1,878
Right-of-use assets 22 6,570 9,607
Goodwill 23 11,385 16,838
Other intangible assets 24 4,648 6,879
Investment in joint venture and associate 12 12,667 13,271
Investments carried at fair value 1,027 1,027
Deferred tax assets 26 3,375 5,759
Total assets 193,164 200,106
Equity and liabilities
Current liabilities
Short-term bank credit 27 1,634 5,365
Trade and other payables 27 47,519 53,618
Current maturities of lease liabilities 27 2,186 2,244
Tax liabilities 6,548 3,046
Non-current liabilities
Long-term bank credit 27 1,356 675
Long-term liabilities 27 3,888 6,416
Long-term lease liabilities 27 5,108 8,440
Deferred tax liabilities 26 170 711
Retirement benet obligation 34 621 828
Total liabilities 69,030 81,343
Equity
Share capital 28 1,320 1,320
Share premium account 425,840 425,686
Reserves (19,849 ) (14,323 )
Accumulated decit (279,888 ) (290,090 )
Equity attributable to the:
Owners of the Company 127,423 122,593
Non-controlling interests (3,289 ) (3,830 )
Total equity 124,134 118,763
Total equity and liabilities 193,164 200,106
The nancial statements were approved by the board of directors and authorised on 13 April 2022. They were signed on its behalf by:
Dr. Z. Marom, CEO M. Nagar, CFO
Consolidated Statements of Financial Position
The accompanying notes are an integral part of these nancial statements.
for the year ended 31 December
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Consolidated Statements of Changes in Equity
The accompanying notes are an integral part of these nancial statements.
Share
Capital
Share
Premium
Account
Translation
Reserve
Other
Reserve
Accumulated
Decit
Attributable
to Owners of
the Company
Non-
Controlling
Interests
Total
Equity
US$ in thousands
Balance as at
1 January 2020 1,320 425,477 (18,070 ) (512 ) (299,391 ) 108,824 (4,408 ) 104,416
Prot for the year – – – – 9,793 9,793 1,689 11,482
Re-measurement
of dened benet
obligation – – – – 16 16 – 16
Revaluation of
investment – – – – (508 ) (508 ) – (508 )
Exchange dierences
on translating foreign
operations – – 4,259 – – 4,259 (1,111 ) 3,148
Total comprehensive
income for the year
Exercise of share-
based options by
employees – 51 – – – 51 – 51
Recognition of share-
based payments – 158 – – – 158 – 158
Balance as at
1 January 2021 1,320 425,686 (13,811 ) (512 ) (290,090 ) 122,593 (3,830 ) 118,763
Prot for the year – – – – 14,340 14,340 417 14,757
Disposal of a foreign
operation – – (522 ) – – (522 ) - (522 )
Re-measurement
of dened benet
obligation – – – – 162 162 – 162
Exchange dierences
on translating foreign
operations – – (5,004 ) – – (5,004 ) 124 (4,880 )
Total comprehensive
income for the year – – – 14,502 8,976 541 9,517
(5,526 )
Exercise of share-
based options by
employees (*) 58 - - - 58 - 58
Recognition of share-
based payments – 96 – – – 96 – 96
Dividends – – – – (4,300 ) (4,300 ) - (4,300 )
Balance as at
31 December 2021 1,320 425,840 (19,337 ) (512 ) (279,888 ) 127,423 (3,289 ) 124,134
for the years ended 31 December 2021 and 2020
(*) Less than 1K USD
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69
FINANCIAL STATEMENTS
2021 2020
Net cash from operating activities
30 5,592 18,459
Investing activities
Interest received 3 101
Proceeds on disposal of property, plant and equipment 18 39
Proceeds on disposal of deposits 315 3,122
Proceeds on disposal of nancial assets carried at fair value
through prot and loss 402 761
Purchases of property, plant and equipment (2,889 ) (3,386 )
Increase of other intangible assets (400 ) (328 )
Purchases of nancial assets carried at fair value through
prot and loss – (2,009 )
Purchases of deposits (315 ) (314 )
Investment in joint venture and associated companies (727 ) (3,467 )
Proceeds from sale of a subsidiary 31 18,662 –
Net cash from (used in) investing activities 15,069 (5,481 )
Financing activities
Lease payment 22 (2,174 ) (2,428 )
Bank loan repayment 27 (13,252 ) (13,852 )
Bank loan received 27 10,431 12,980
Proceed on exercise of shares 58 51
Net cash used in nancing activities
(4,937 ) (3,249 )
Net increase in cash and cash equivalents 15,724 9,729
Cash and cash equivalents at the beginning of the year 50,575 40,584
Eects of exchange rate changes on the balance of cash
held in foreign currencies (968 ) 262
Cash and cash equivalents at the end of the year 65,331 50,575
Consolidated Statements of Cash Flow
The accompanying notes are an integral part of these nancial statements.
for the year ended 31 December
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Notes to the Consolidated Financial Statements
(continued)
for the year ended 31 December 2021
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70
1. General Information
Law. The address of the registered oce is POB 7318, Nave Ne’eman Ind. Area 4, Ha’harash Street, 4524075 Hod
production and marketing of data communication products in the field of metropolitan area networks and of bio-
medical products, primarily laboratory diagnostics and eco-med equipment. The Bio-Medical division also distributes
2 Adoption of new and revised International Financial Reporting Standards (IFRSs)
Amendments to IAS 1 – Classication of Liabilities as Current or Non-current
The amendments to IAS 1 aect only the presentation of liabilities as current or non-current in the statement of nancial
position and not the amount or timing of recognition of any asset, liability, income or expenses, or the information
disclosed about those items.
The amendments clarify that the classication of liabilities as current or non-current is based on rights that are in
existence at the end of the reporting period, specify that classication is unaected by expectations about whether an
entity will exercise its right to defer settlement of a liability, explain that rights are in existence if covenants are complied
with at the end of the reporting period, and introduce a denition of ‘settlement’ to make clear that settlement refers
to the transfer to the counterparty of cash, equity instruments, other assets or services.
The amendments will be applied retrospectively for annual periods beginning on or after 1 January 2023, with early
application permitted.
3 SignicantAccountingPolicies
Statement of compliance
The consolidated nancial statements have been prepared in accordance with International Financial Reporting
Standards (IFRS Standards) as issued by the International Accounting Standards Board (IASB).
Basis of preparation
The consolidated nancial statements have been prepared on the historical cost basis except for certain properties
and nancial instruments that are measured at revalued amounts or fair values at the end of each reporting period, as
explained in the accounting policies below.
Historical cost is generally based on the fair value of the consideration given in exchange for goods and services.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date, regardless of whether that price is directly observable or
estimated using another valuation technique. In estimating the fair value of an asset or a liability, the Group takes into
account the characteristics of the asset or liability if market participants would take those characteristics into account
when pricing the asset or liability at the measurement date. Fair value for measurement and/or disclosure purposes in
these consolidated nancial statements is determined on such a basis, except for share-based payment transactions
that are within the scope of IFRS 2, leasing transactions that are within the scope of IFRS 16, and measurements that
have some similarities to fair value but are not fair value, such as net realisable value in IAS 2 or value in use in IAS 36.
In addition, for nancial reporting purposes, fair value measurements are categorised into Level 1, 2 or 3 based on the
degree to which the inputs to the fair value measurements are observable and the signicance of the inputs to the fair
value measurement in its entirety, which are described as follows:
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Notes to the Consolidated Financial Statements
(continued)
for the year ended 31 December 2021
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FINANCIAL STATEMENTS
l
Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can
access at the measurement date;
l
Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for the asset or
liability, either directly or indirectly; and
l
Level 3 inputs are unobservable inputs for the asset or liability.
The principal accounting policies are set out below.
Basis of consolidation
The consolidated nancial statements incorporate the nancial statements of the Company and entities controlled by
the Company and its subsidiaries. Control is achieved when the Company has power over the investee is exposed, or
has rights, to variable returns from its involvement with the investee and has the ability to use its power to aect its
returns.
The Company reassesses whether or not it controls an investee if facts and circumstances indicate that there are
changes to one or more of the three elements of control listed above.
Consolidation of a subsidiary begins when the Company obtains control over the subsidiary and ceases when the
Company loses control of the subsidiary. Specically, income and expenses of a subsidiary acquired or disposed of
during the year are included in the consolidated statement of prot or loss and other comprehensive income from the
date the Company gains control until the date when the Company ceases to control the subsidiary.
Prot or loss and each component of other comprehensive income are attributed to the owners of the Company and to
the non-controlling interests. Total comprehensive income of subsidiaries is attributed to the owners of the Company
and to the non-controlling interests even if this results in the non-controlling interests having a decit balance.
When necessary, adjustments are made to the nancial statements of subsidiaries to bring their accounting policies in
line with the Group’s accounting policies.
All intragroup assets and liabilities, equity, income, expenses and cash ows relating to transactions between members
of the Group are eliminated in full on consolidation.
Investments in associates and joint ventures
An associate is an entity over which the Group has signicant inuence. Signicant inuence is the power to participate
in the nancial and operating policy decisions of the investee but without control or joint control over those policies.
A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the
net assets of the joint arrangement. Joint control is the contractually agreed sharing of control of an arrangement, which
exists only when decisions about the relevant activities require unanimous consent of the parties sharing control.
An investment in an associate or a joint venture is accounted for using the equity method from the date on which the
investee becomes an associate or a joint venture. On acquisition of the investment in an associate or a joint venture,
any excess of the cost of the investment over the Group’s share of the net fair value of the identiable assets and
liabilities of the investee is recognised as goodwill, which is included within the carrying amount of the investment. Any
excess of the Group’s share of the net fair value of the identiable assets and liabilities over the cost of the investment,
after reassessment, is recognised immediately in prot or loss in the period in which the investment is acquired.
The requirements of IAS 36 are applied to determine whether it is necessary to recognise any impairment loss with
respect to the Group’s investment in an associate or a joint venture. When necessary, the entire carrying amount of
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Notes to the Consolidated Financial Statements
(continued)
for the year ended 31 December 2021
ANNUAL
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72
the investment (including goodwill) is tested for impairment in accordance with IAS 36 Impairment of Assets as a single
asset by comparing its recoverable amount (higher of value in use and fair value less costs of disposal) with its carrying
amount. Any impairment loss recognised forms part of the carrying amount of the investment. Any reversal of that
impairment loss is recognised in accordance with IAS 36 to the extent that the recoverable amount of the investment
subsequently increases.
When the Group reduces its ownership interest in an associate or a joint venture, but continues to use the equity
method, the Group reclassies to prot or loss the proportion of the gain or loss that had previously been recognised
in other comprehensive income relating to that reduction in ownership interest if that gain or loss would be reclassied
to prot or loss on the disposal of the related assets or liabilities.
Changes in the Group’s ownership interests in existing subsidiaries
Changes in the Group’s ownership interests in subsidiaries that do not result in the Group losing control over the
subsidiaries are accounted for as equity transactions. The carrying amounts of the Group’s interests and the non-
controlling interests are adjusted to reect the changes in their relative interests in the subsidiaries. Any dierence
between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or
received is recognised directly in equity and attributed to owners of the Company.
Business combinations
Acquisitions of businesses are accounted for using the acquisition method. The consideration transferred in a business
combination is measured at fair value, which is calculated as the sum of the acquisition-date fair values of the assets
transferred by the Group, liabilities incurred by the Group to the former owners of the acquiree and the equity interests
issued by the Group in exchange for control of the acquiree. Acquisition-related costs are generally recognised in prot
or loss as incurred.
Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any non-controlling
interests in the acquiree, and the fair value of the acquirer’s previously held equity interest in the acquiree (if any) over the
net of the acquisition-date amounts of the identiable assets acquired and the liabilities assumed. If, after reassessment,
the net of the acquisition-date amounts of the identiable assets acquired and liabilities assumed exceeds the sum of the
consideration transferred, the amount of any non-controlling interests in the acquiree and the fair value of the acquirer’s
previously held interest in the acquiree (if any), the excess is recognised immediately in prot or loss as a bargain purchase
gain.
Non-controlling interests that are present ownership interests and entitle their holders to a proportionate share of the
entit y ’s net asset s in the event of liquidation may be initially measured either at fair value or at the non-controlling interests’
proportionate share of the recognised amounts of the acquiree’s identiable net assets. The choice of measurement
basis is made on a transaction-by-transaction basis.
Goodwill
Goodwill arising on an acquisition of a business is carried at cost as established at the date of acquisition of the
business less accumulated impairment losses, if any. Goodwill is not amortised but is reviewed for impairment at least
annually. For the purposes of impairment testing, goodwill is allocated to each of the Group’s cash-generating units (or
groups of cash-generating units) that is expected to benet from the synergies of the combination. A cash-generating
unit to which goodwill has been allocated is tested for impairment annually, or more frequently when there is an
indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than its carrying
amount, the impairment loss is allocated rst to reduce the carrying amount of any goodwill allocated to the unit and
then to the other assets of the unit pro rata based on the carrying amount of each asset in the unit. Any impairment
loss for goodwill is recognised directly in prot or loss. An impairment loss recognised for goodwill is not reversed in
subsequent periods.
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Notes to the Consolidated Financial Statements
(continued)
for the year ended 31 December 2021
ANNUAL
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73
FINANCIAL STATEMENTS
On disposal of an operating unit, the attributable amount of goodwill is included in the determination of the prot or
loss on disposal.
Revenue recognition
The Group recognises revenue from the following major sources:
l
Sale of goods – Communication products, bio-medical products such as laboratory diagnostics and sterilisation
eco-med products
l
Rendering of services – Related mainly to software services such as training and technical support, laboratory service
and maintenance related products sold
l
Construction contracts
Revenue is measured based on the consideration to which the Group expects to be entitled in a contract with a
customer and excludes amounts collected on behalf of third parties. The Group recognises revenue when it transfers
control of a product or service to a customer.
Sale of goods
For sales of goods, revenue is recognised when control of the goods has transferred, being when the goods have been
shipped to the customer’s specic location (delivery). Following delivery, the customer has full discretion over the
manner of distribution and price to sell the goods, has the primary responsibility when onselling the goods and bears
the risks of obsolescence and loss in relation to the goods.
A receivable is recognised by the Group when the goods are delivered to the customer as this represents the point in
time at which the right to consideration becomes unconditional, as only the passage of time is required before payment
is due.
Rendering of services
The Group provides a service of installation of various software products for specialised business operations.
Such services are recognised as a performance obligation satised over time. Revenue is recognised for these
installation services based on the stage of completion of the contract. The management have assessed that the
stage of completion determined as the proportion of the total time expected to install that has elapsed at the end
of the reporting period is an appropriate measure of progress towards complete satisfaction of these performance
obligations under IFRS 15.
Construction contracts
Where the outcome of a construction contract can be estimated reliably, revenue and costs are recognised over time
by reference to the stage of completion of the contract activity at the date of the consolidated statements of nancial
position. This is normally measured by the proportion that contract costs incurred for work performed to date bear
to the estimated total contract costs except where this would not be representative of the stage of completion or
engineering completion. The management consider that this input method is an appropriate measure of the progress
towards complete satisfaction of these performance obligations under IFRS 15. Variations in contract work, claims and
incentive payments are included to the extent that they have been agreed with the customer.
Where the outcome of a construction contract cannot be estimated reliably, contract revenue is recognised to the
extent of contract costs incurred that it is probable will be recoverable. Contract costs are recognised as expenses in
the period in which they are incurred.
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Notes to the Consolidated Financial Statements
(continued)
for the year ended 31 December 2021
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74
When it is probable that total contract costs will exceed total contract revenue, the expected loss is recognised as an
expense immediately.
Leases
The Group as a lessee
At inception of the contract, the Group assesses whether an arrangement is a lease or contains a lease. The Group
recognises a right- of-use asset and a corresponding lease liability with respect to all lease arrangements in which it is the
lessee, except for assets leased for a period of less than 12 months, and also to lease of assets with low economic value.
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement
date, discounted by using the rate implicit in the lease. If this rate cannot be readily determined, the lessee uses its
incremental borrowing rate.
The lease liability is subsequently measured at amortised cost using the eective interest method.
The right-of-use assets comprise the initial measurement of the corresponding lease liability, plus any lease payments
made at or before the commencement day, less any lease incentives received and any initial direct costs.
Right-of-use assets are subsequently measured at cost less accumulated depreciation and impairment losses, and are
depreciated over the shorter period of lease term and useful life of the underlying asset. If a lease transfers ownership of
the underlying asset or the cost of the right-of-use asset reects that the Group expects to exercise a purchase option,
the related right-of-use asset is depreciated over the useful life of the underlying asset. The depreciation starts at the
commencement date of the lease.
The Group applies IAS 36 to determine whether a right-of-use asset is impaired and accounts for any identied
impairment loss.
As a practical expedient, IFRS 16 permits a lessee not to separate non-lease components, and instead account for any
lease and associated non-lease components as a single arrangement. The Group has used this practical expedient.
Foreign currencies
The individual nancial statements of each Group company are prepared in the currency of the primary economic
environment in which it operates (its functional currency). For the purpose of the consolidated nancial statements, the
results and nancial position of each Group company are expressed in the US dollar, which is the presentation currency
for the consolidated nancial statements.
In preparing the nancial statement of the individual companies, transactions in currencies other than the entity’s
functional currency (foreign currencies) are recorded at the rates of exchange prevailing on the dates of the transactions.
At the end of each reporting period, monetary assets and liabilities that are denominated in foreign currencies are
retranslated at the rates prevailing at that date. Non-monetary items carried at fair value that are denominated in foreign
currencies are translated at the rates prevailing at the date when the fair value was determined. Non-monetary items that
are measured in terms of historical cost in a foreign currency are not retranslated.
Exchange dierences arising on the settlement of monetary items, and on the retranslation of monetary items, are
included in prot or loss for the period.
For the purpose of presenting consolidated nancial statements, the assets and liabilities of the Group’s foreign
operations (operations in foreign currencies) are translated at exchange rates prevailing at the end of each reporting
period. Income and expense items are translated at the average exchange rates for the period, unless exchange rates
uctuate signicantly during that period, in which case the exchange rates at the date of transactions are used. Exchange
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Notes to the Consolidated Financial Statements
(continued)
for the year ended 31 December 2021
ANNUAL
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75
FINANCIAL STATEMENTS
dierences arising, if any, are recognised in other comprehensive income and accumulated in equity (attributed to non-
controlling interests as appropriate) within the Group’s translation reserve. Such translation reserves are reclassied
from equity to prot or loss in the period in which the foreign operation is disposed.
Goodwill and fair value adjustments arising on the acquisition of a foreign operation are treated as assets and liabilities
of the foreign operation and translated at the closing rate. Exchange dierences arising are recognised in other
comprehensive income and accumulated in equity.
Government grants
Government grants are assistance from government in the form of transfers of resources to an entity in return for past
or future compliance with certain conditions relating to the operating activities of the entity.
Forgivable loans are loans where the lender (Israeli Chief Scientist Ocer (ISO)) undertakes to waive repayment under
certain prescribed conditions. In a case where a government grant takes the form of a forgivable loan, a liability is
recognised in regards to this loan at fair value, based on estimations of future cash ows related to the relevant grant.
The Group policy to designated such loans as nancial liabilities measured at amortised cost according to IFRS 9. The
dierence between the liability and proceeds are recognised in the research and development expenses.
Employee benets
Retirement benet costs and termination benets
Payments to dened contribution retirement benet plans are recognised as an expense when employees have
rendered service entitling them to the contributions.
For dened benet retirement plans, the cost of providing benets is determined using the projected unit credit
method, with actuarial valuations being carried out at the end of each annual reporting period.
Remeasurement, comprising actuarial gains and losses, the eect of the changes to the asset ceiling (if applicable)
and the return on plan assets (excluding interest), is reected immediately in the statement of nancial position with
a charge or credit recognised in other comprehensive income in the period in which they occur. Remeasurement
recognised in other comprehensive income is reected immediately in retained earnings and will not be reclassied
to prot or loss. Past service cost is recognised in prot or loss in the period of a plan amendment. Net interest is
calculated by applying the discount rate at the beginning of the period to the net dened benet liability or asset.
Dened benet costs are categorised as follows:
l
service cost (including current service cost, past service cost, as well as gains and losses on curtailments and settlements);
l
net interest expense or income; and
l
remeasurement.
The Group presents the rst two components of dened benet costs in prot or loss under employee benets
expense. Curtailment gains and losses are accounted for as past service costs.
The retirement benet obligation recognised in the consolidated statement of nancial position represents the actual
decit or surplus in the Group’s dened benet plans. Any surplus resulting from this calculation is limited to the present
value of any economic benets available in the form of refunds from the plans or reductions in future contributions to
the plans.
A liability for a termination benet is recognised at the earlier of when the entity can no longer withdraw the oer of the
termination benet and when the entity recognises any related restructuring costs.
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(continued)
for the year ended 31 December 2021
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Short-term and other long-term employee benets
A liability is recognised for benets accruing to employees in respect of wages and salaries, annual leave and sick leave in
the period the related service is rendered at the undiscounted amount of the benets expected to be paid in exchange
for that service.
Liabilities recognised in respect of short-term employee benets are measured at the undiscounted amount of the
benets expected to be paid in exchange for the related service.
Liabilities recognised in respect of other long-term employee benets are measured at the present value of the estimated
future cash outows expected to be made by the Group in respect of services provided by employees up to the reporting
date.
Share-based payments arrangements
Share-based payment transactions of the Company
Equity-settled share-based payments to employees and others providing similar services are measured at the fair
value of the equity instruments at the grant date. Details regarding the determination of the fair value of equity-settled
share-based transactions are set out in note 33.
The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line
basis over the vesting period, based on the Group’s estimate of equity instruments that will eventually vest, with a
corresponding increase in equity. At the end of each reporting period, the Group revises its estimate of the number of
equity instruments expected to vest. The impact of the revision of the original estimates, if any, is recognised in prot
or loss such that the cumulative expense reects the revised estimate, with a corresponding adjustment to the share
premium reserve.
Taxation
The income tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable prot for the year. Taxable prot diers from prot before tax as reported in
the consolidated statement of prot or loss because it excludes items of income or expense that are taxable or deductible
in other years and it further excludes items that are never taxable or deductible. The Group’s liability for current tax is
calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period.
Deferred tax
Deferred tax is recognised on temporary dierences between the carrying amounts of assets and liabilities in the
consolidated nancial statements and the corresponding tax bases used in the computation of taxable prot. Deferred
tax liabilities are generally recognised for all taxable temporary dierences. Deferred tax assets are generally recognised
for all deductible temporary dierences to the extent that it is probable that taxable prots will be available against
which those deductible temporary dierences can be utilised. Such deferred tax assets and liabilities are not recognised
if the temporary dierence arises from goodwill or from the initial recognition (other than in a business combination) of
other assets and liabilities in a transaction that aects neither the taxable prot nor the accounting prot.
Deferred tax liabilities are recognised for taxable temporary dierences associated with investments in subsidiaries
and associates, and interests in joint ventures, except where the Group is able to control the reversal of the temporary
dierence and it is probable that the temporary dierence will not reverse in the foreseeable future. Deferred tax assets
arising from deductible temporary dierences associated with such investments and interests are only recognised to
the extent that it is probable that there will be sucient taxable prots against which to utilise the benets of the
temporary dierences and they are expected to reverse in the foreseeable future.
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(continued)
for the year ended 31 December 2021
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77
FINANCIAL STATEMENTS
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent
that it is no longer probable that sucient taxable prots will be available to allow all or part of the asset to be recovered.
Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the
liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted
by the end of the reporting period. The measurement of deferred tax liabilities and assets reects the tax consequences
that would follow from the manner in which the Group expects, at the end of the reporting period, to recover or settle
the carrying amount of its assets and liabilities.
Current and deferred tax for the year
Current and deferred tax are recognised in prot or loss, except when they relate to items that are recognised in other
comprehensive income or directly in equity, in which case, the current and deferred tax are also recognised in other
comprehensive income or directly in equity respectively. Where current tax or deferred tax arises from the initial
accounting for a business combination, the tax eect is included in the accounting for the business combination.
Investment Property
Investment properties are properties held to earn rentals and/or for capital appreciation. Investment properties are
measured initially at cost, including transaction costs.
Subsequent to initial recognition the Group’s property interests held under operating leases to earn rentals or for
capital appreciation purposes are accounted for as investment properties and are measured using the cost model.
Depreciation is charged so as to write o the cost of assets, over their estimated useful lives, using the straight-line
method, between 27-33 years.
Transfers from owner-occupied property to investment property are made when the Company ends owner-occupation.
Property, plant and equipment
Land and buildings held for use in the production or supply of goods or services, or for administrative purposes, are
stated in the consolidated statements of nancial position on a historical cost basis, being the historical cost at the
date of acquisition, less any subsequent accumulated depreciation and subsequent accumulated impairment losses.
Properties in the course of construction for production, administrative purposes, or for purposes not yet determined,
are carried at cost, less any recognised impairment loss. Cost includes professional fees. Depreciation of these assets,
on the same basis as other property assets, commences when the assets are ready for their intended use.
Freehold land is not depreciated. Fixtures and equipment are stated at cost less accumulated depreciation and any
recognised impairment loss.
Depreciation is charged so as to write o the cost of assets, other than land over their estimated useful lives, using the
straight-line method, on the following bases:
Buildings 3%-6%
Plant and equipment 10%-33%
Motor vehicles 15%-25%
Furniture and ttings 6%-15%
Leasehold Improvements 6%-20%
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(continued)
for the year ended 31 December 2021
ANNUAL
REPORT & ACCOUNTS 2021
78
The gain or loss arising on the disposal or retirement of an asset is determined as the dierence between the sales
proceeds and the carrying amount of the asset and is recognised in other income or expense.
Research and development expenditure
Internally-generated intangible assets - research and development expenditure
Expenditure on research activities is recognised as an expense in the period in which it is incurred.
An internally-generated intangible asset arising from development (or from the development phase of an internal
project) is recognised if, and only if, all of the following have been demonstrated:
l
the technical feasibility of completing the intangible asset so that it will be available for use or sale;
l
the intention to complete the intangible asset and use or sell it;
l
the ability to use or sell the intangible asset;
l
how the intangible asset will generate probable future economic benets;
l
the availability of adequate technical, nancial and other resources to complete the development and to use or sell the
intangible asset; and
l
the ability to measure reliably the expenditure attributable to the intangible asset during its development.
The amount initially recognised for internally-generated intangible asset s is the sum of the expenditure incurred from the
date when the intangible asset rst meets the recognition criteria listed above. Where no internally-generated intangible
asset can be recognised, development expenditure is recognised in prot or loss in the period in which it is incurred.
Acquired intangible assets
Acquired intangible assets are measured initially at purchase cost and are amortised on a straight-line basis over their
estimated useful lives.
Intangible assets acquired in a business combination and recognised separately from goodwill are initially recognised
at their fair value at the acquisition date (which is regarded as their cost).
Amortisation is charged so as to write o the cost of assets over their estimated useful lives, using the straight-line
method, on the following bases:
Customer relationships and backlog 10%-12.5%
Technology 14%-20%
Other 10%
Subsequent to initial recognition, intangible assets are reported at cost less accumulated amortisation and accumulated
impairment losses.
Impairment of tangible and intangible assets other than goodwill
At the end of each reporting period, the Group reviews the carrying amounts of its tangible and intangible assets to
determine whether there is any indication that those assets have suered an impairment loss. If any such indication
exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any).
When it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable
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Notes to the Consolidated Financial Statements
(continued)
for the year ended 31 December 2021
ANNUAL
REPORT & ACCOUNTS 2021
79
FINANCIAL STATEMENTS
amount of the cash-generating unit to which the asset belongs. When a reasonable and consistent basis of allocation
can be identied, corporate assets are also allocated to individual cash-generating units, or otherwise they are allocated
to the smallest group of cash-generating units for which a reasonable and consistent allocation basis can be identied.
Intangible assets with indenite useful lives and intangible assets not yet available for use are tested for impairment at
least annually, and whenever there is an indication that the asset may be impaired.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated
future cash ows are discounted to their present value using a pre-tax discount rate that reects current market
assessments of the time value of money and the risks specic to the asset for which the estimates of future cash ows
have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the
carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is
recognised immediately in prot or loss, unless the relevant asset is carried at a revalued amount, in which case the
impairment loss is treated as a revaluation decrease.
Inventory
Inventories are stated at the lower of cost and net realisable value. Cost comprises direct materials and, where
applicable direct labour costs and those overheads that have been incurred in bringing the inventories to their present
location and condition. Cost is determined on the “rst-in-rst-out” basis. Net realisable value represents the estimated
selling price less all estimated costs of completion and costs to be incurred in marketing, selling and distribution.
Financial instruments
Financial assets and nancial liabilities are recognised on the Group’s consolidated statements of nancial position
when the Group becomes a party to the contractual provisions of the instrument.
Trade and other receivables
Trade receivables are measured at initial recognition at fair value, and are subsequently measured at amortised cost
using the eective interest rate method. Appropriate allowances for estimated irrecoverable amounts are recognised
in prot or loss when there is objective evidence that the asset is impaired. The allowance recognised is measured as
the dierence between the asset’s carrying amount and the present value of estimated future cash ows discounted
at the eective interest rate computed at initial recognition.
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and demand deposits and other short-term highly liquid investments
that are readily convertible to a known amount of cash.
Financial assets and investments
All regular way purchases or sales of nancial assets are recognised and derecognised on a trade date basis.
Regular way purchases or sales are purchases or sales of nancial assets that require delivery of assets within the time
frame established by regulation or convention in the marketplace.
All recognised nancial assets are measured subsequently in their entirety at either amortised cost or fair value,
depending on the classication of the nancial assets.
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Notes to the Consolidated Financial Statements
(continued)
for the year ended 31 December 2021
ANNUAL
REPORT & ACCOUNTS 2021
80
Classication of nancial assets
Debt instruments that meet the following conditions are measured subsequently at amortised cost:
l
the nancial asset is held within a business model whose objective is to hold nancial assets in order to collect
contractual cash ows; and
l
the contractual terms of the nancial asset give rise on specied dates to cash ows that are solely payments of
principal and interest on the principal amount outstanding.
The majority of nancial assets are measured subsequently at fair value through prot or loss (FVTPL).
Amortised cost and eective interest method
The eective interest method is a method of calculating the amortised cost of a debt instrument and of allocating
interest income over the relevant period.
For nancial assets other than purchased or originated credit-impaired nancial assets (i.e. assets that are credit-
impaired on initial recognition), the eective interest rate is the rate that exactly discounts estimated future cash
receipts (including all fees and points paid or received that form an integral part of the eective interest rate,
transaction costs and other premiums or discounts) excluding expected credit losses, through the expected life of
the debt instrument, or, where appropriate, a shorter period, to the gross carrying amount of the debt instrument on
initial recognition. For purchased or originated credit-impaired nancial assets, a credit-adjusted eective interest rate
is calculated by discounting the estimated future cash ows, including expected credit losses, to the amortised cost of
the debt instrument on initial recognition.
The amortised cost of a nancial asset is the amount at which the nancial asset is measured at initial recognition
minus the principal repayments, plus the cumulative amortisation using the eective interest method of any dierence
between that initial amount and the maturity amount, adjusted for any loss allowance. The gross carrying amount of a
nancial asset is the amortised cost of a nancial asset before adjusting for any loss allowance.
The calculation does not revert to the gross basis even if the credit risk of the nancial asset subsequently improves so
that the nancial asset is no longer credit-impaired.
Financial assets at FVTPL
Financial assets that do not meet the criteria for being measured at amortised cost or FVTOCI are measured at FVTPL.
Financial assets at FVTPL are measured at fair value at the end of each reporting period, with any fair value gains or
losses recognised in prot or loss. The net gain or loss recognised in prot or loss is included in the ‘other gains and
losses’ line item. Fair value is determined in the manner described in note 36.
Impairment of nancial assets
The Group recognises a loss allowance for expected credit losses on trade receivables. The amount of expected credit
losses is updated at each reporting date to reect changes in credit risk since initial recognition of the respective
nancial instrument.
The Group recognises lifetime ECL for trade receivables. The expected credit losses on these nancial assets are
estimated using a provision matrix based on the Group’s historical credit loss experience, adjusted for factors that are
specic to the debtors, general economic conditions and an assessment of both the current as well as the forecast
direction of conditions at the reporting date, including time value of money where appropriate.
Lifetime ECL represents the expected credit losses that will result from all possible default events over the expected
life of a nancial instrument.
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Notes to the Consolidated Financial Statements
(continued)
for the year ended 31 December 2021
ANNUAL
REPORT & ACCOUNTS 2021
81
FINANCIAL STATEMENTS
Financial liabilities and equity instruments
Classication as debt or equity
Debt and equity instruments are classied as either nancial liabilities or as equity in accordance with the substance of
the contractual arrangements and the denitions of a nancial liability and an equity instrument.
Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of
its liabilities. Equity instruments issued by the Group are recognised at the proceeds received, net of direct issue costs.
Financial liabilities
All nancial liabilities are measured subsequently at amortised cost using the eective interest method or at FVTPL.
Derivative nancial instruments
The Group enters into a variety of derivative nancial instruments to manage its exposure to foreign exchange rate
risks, including foreign exchange forward contracts and options. Further details of derivative nancial instruments are
disclosed in note 36.
Derivatives are initially recognised at fair value at the date the derivative contracts are entered into and are subsequently
remeasured to their fair value at the end of each reporting period. The resulting gain or loss is recognised in prot or
loss immediately.
Bank borrowings
Interest-bearing bank loans and overdrafts are recorded at the proceeds received, net of direct issue costs. Finance
charges, including premiums payable on settlement or redemption and direct issue costs, are accounted for on an
accrual basis in prot or loss account using the eective interest method and are added to the carrying amount of the
instrument to the extent that they are not settled in the period in which they arise.
Provisions
Provisions are recognised when the Group has a present obligation as a result of a past event, and it is probable
that the Group will be required to settle that obligation. Provisions are measured based on management estimate of
the expenditure required to settle the obligation at the consolidated statements of nancial position date, and are
discounted to present value where the eect is material.
4 CriticalAccountingJudgmentsandKeySourcesofEstimationUncertainty
Critical judgments in applying the Group’s accounting policies
In the process of applying the Group’s accounting policies, which are described in note 3, management has made the
following judgments that have the most signicant eect on the amounts recognised in the nancial statements (apart
from those involving estimations, which are dealt with below):
Key sources of estimation uncertainty
The key assumptions concerning the future, and other key sources of estimation uncertainty at the consolidated
statements of nancial position date, that have a signicant risk of causing a material adjustment to the carrying
amounts of assets and liabilities within the next nancial year, are discussed below.
BATM R&A 2021_Financial Section_3.indd 21
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Notes to the Consolidated Financial Statements
(continued)
for the year ended 31 December 2021
ANNUAL
REPORT & ACCOUNTS 2021
82
Impairment of intangible assets and goodwill
Determining whether goodwill is impaired requires an estimation of the value in use of the cash generating units (CGU)
to which goodwill has been allocated. The value in use calculation requires the entity to estimate the future cash ows
of the CGU and a suitable discount rate in order to calculate present value.
Judgments with respect to deferred tax assets
For the purposes of measuring deferred tax assets arising from loss carry-forwards in dierent territories, management
is required to use considerable judgment in estimation of the carried forward losses in which it expects to be able to
utilise in the foreseeable future. For additional information in respect of deferred tax assets see note 15.
Judgments with respect to construction contracts
The Company accounts for its revenue in accordance with IFRS 15 revenue from contracts with customers, which
requires estimates to be made for contract costs and revenues. Revenue is recognised using the percentage of
completion method based on the ratio of contract costs incurred to total estimated contract costs or engineering
completion percentage. Estimating total direct labour costs and the engineering status is subjective and requires the
use of management’s best judgments based on the information available at that time.
Judgments with respect to warranty provision
Warranty provision was made on the basis of management’s estimation and on past experience.
5 Revenues
The Group derives its revenue from contracts with customers for the transfer of goods at a point in time and services
and Construction Contracts over time. An analysis of the Group’s revenues is as follows:
Year ended 31 December
2021
$’000s
2020
$’000s
Sales of goods 116,447 101,341
Services 15,837 35,413
Construction contracts 7,754 46,812
140,038 183,566
6 BusinessandGeographicalSegments
Business segments
Information reported to the chief operating decision maker (CEO of the Company) for the purposes of resource allocation
and assessment of segment performance focuses on the types of goods or services delivered or provided, and in respect
of two major operating segments - Networking and Cyber Division and Bio-Medical Division. These divisions are the basis
on which the Group reports its primary segment information. The principal products and services of each of these divisions
are as follows: Networking and Cyber Division mostly includes the research and development, production and marketing of
data communication products, such as Network Function Virtualisation (“NFV”) and Edge Computing based on the Group’s
NFV operating system, Edgility OS (formerly NFVTime) as well as supply of carrier ethernet and access solutions in its
Network Edge business. In the Cyber unit, the Group provides network monitoring and encryption solutions for very high
speed, large area networks. The Bio-Medical Division is engaged in the research and development, production, marketing
and distribution of medical products, primarily laboratory diagnostic equipment and sterilisation equipment.
BATM R&A 2021_Financial Section_3.indd 22
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Notes to the Consolidated Financial Statements
(continued)
for the year ended 31 December 2021
ANNUAL
REPORT & ACCOUNTS 2021
83
FINANCIAL STATEMENTS
A. Segment revenues and segment results
Year ended 31 December 2021
Networking and Cyber
$’000s
Bio-Medical
$’000s
Unallocated
$’000s
Total
$’000s
Revenues from external customers 27,992 112,046 – 140,038
Operating prot 7,844 16,534 – 24,378
Net nance income 555
Prot before tax 24,933
Year ended 31 December 2020
Networking and Cyber
$’000s
Bio-Medical
$’000s
Unallocated
$’000s
Total
$’000s
Revenues from external customers 54,884 128,682
-
183,566Operating prot (4,932) 19,165
-
14,233Net nance expense (934)
Prot before tax 13,299
B. Segment assets, liabilities and other information
As at 31 December 2021
Networking and Cyber
$’000s
Bio-Medical
$’000s
Unallocated
$’000s
Total
$’000s
Assets 74,951 116,474 1,739 193,164
Liabilities 23,904 40,826 4,300 69,030
Depreciation and amortisation 1,659 3,525 80 5,264
Additions to non-current assets 2,114 7,961
-
10,075As at 31 December 2020
Networking and Cyber
$’000s
Bio-Medical
$’000s
Unallocated
$’000s
Total
$’000s
Assets 73,830 124,398 1,878 200,106
Liabilities 30,955 50,388 – 81,343
Depreciation and amortisation 2,403 2,984 88 5,475
Additions to non-current assets 925 4,672 – 5,597
BATM R&A 2021_Financial Section_3.indd 23
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Notes to the Consolidated Financial Statements
(continued)
for the year ended 31 December 2021
ANNUAL
REPORT & ACCOUNTS 2021
84
C. Revenue from major products and services
The following is an analysis of the Group’s revenue from operations from its major products and services.
Year ended 31 December
2021
$’000s
2020
$’000s
Networking and cyber products 15,376 13,552
Software services* 12,616 41,332
Distribution of medical products and services 71,832 65,961
Diagnostic products 31,576 22,962
Eco-Med products** 8,638 39,759
140,038 183,566
* The decrease in Software services revenue derives mainly from the sale of a Group subsidiary. See note 31 (disposal of subsidiary) for further
details.
** 2020 Eco-Med products revenue includes $33m related to an exceptional ventilators project.
D. Revenue from major sources
Year ended 31 December 2021
Revenues
Networking and Cyber
$’000s
Bio-Medical
$’000s
Unallocated
$’000s
Total
$’000s
Sales of goods 15,376 101,071 – 116,447
Services 7,131 8,706 – 15,837
Construction contracts 5,485 2,269 – 7,754
27,992 112,046
–
140,038Year ended 31 December 2020
Revenues
Networking and Cyber
$’000s
Bio-Medical
$’000s
Unallocated
$’000s
Total
$’000s
Sales of goods 13,552 87,789 – 101,341
Services 29,272 6,141 – 35,413
Construction contracts 12,060 34,752 – 46,812
54,884 128,682
–
183,566BATM R&A 2021_Financial Section_3.indd 24
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Notes to the Consolidated Financial Statements
(continued)
for the year ended 31 December 2021
ANNUAL
REPORT & ACCOUNTS 2021
85
FINANCIAL STATEMENTS
E. Geographical segments
The Group operates in three principal geographical areas: United States of America, Israel and Europe. The Group’s
revenue from external customers and information about its segment assets by geographical location are presented by
the location of operations and are detailed below:
$’000s
Revenue from external customers
Non-current assets2021 2020 2021 2020
Area A 107,718 126,791 40,302 36,276
Area B 22,923 47,671 10,304 23,621
Area C 9,397 9,104 4,510 4,685
Total
140,038 183,566 55,116 64,582
7 Costofrevenues
Year ended 31 December
2021
$’000s
2020
$’000s
Direct costs – Components and subcontractors 74,136 110,244
Changes in inventory 2,942 (8,599)
Salaries and related benets 7,330 16,666
Overhead and depreciation 2,726 3,030
Other expenses 1,843 1,515
88,977 122,856
8 Sales and marketing expenses
Year ended 31 December
2021
$’000s
2020
$’000s
Salaries and related benets 10,220 10,870
Commissions 2,986 4,289
Outside services 491 435
Advertising and sales promotion 941 867
Overhead and depreciation 2,304 2,149
Travelling and other expenses 1,348 1,587
18,290 20,197
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Notes to the Consolidated Financial Statements
(continued)
for the year ended 31 December 2021
ANNUAL
REPORT & ACCOUNTS 2021
86
9 General and administrative expenses
Year ended 31 December
2021
$’000s
2020
$’000s
Salaries and related benets 5,114 6,148
Professional services(*) 3,506 4,888
Overhead and depreciation 1,347 1,300
Other expenses 2,276 3,548
12,243 15,884
(*) Including auditors’ remuneration for audit
services
347 281
Amounts payable to Deloitte by the Group undertakings in respect of non-audit services in 2021 were $48 thousand (2020:
$19 thousand). In addition, payables in respect of non-audit services to others than the Company’s auditors, for tax and
internal audit services in 2021, were $51 thousand and $19 thousand, respectively (2020: $18 thousand and $11 thousand,
respectively).
10 Researchanddevelopmentexpenses
Year ended 31 December
2021
$’000s
2020
$’000s
Salaries and related benets 4,741 3,882
Components and subcontractors 2,863 4,930
Overhead and depreciation 852 938
Other expenses 591 617
Government grants (334) (109)
8,713 10,258
11 Stacosts
The average monthly number of employees in 2021 (including executive directors) was 1,023 (2020: 1,196).
Year ended 31 December
2021
$’000s
2020
$’000s
Their aggregate remuneration comprised:
Wages and salaries 22,233 31,733
Social security costs 3,569 4,242
Other pension costs 1,603 1,591
27,405 37,566
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Notes to the Consolidated Financial Statements
(continued)
for the year ended 31 December 2021
ANNUAL
REPORT & ACCOUNTS 2021
87
FINANCIAL STATEMENTS
12 Otheroperatingexpenses(income)
Year ended 31 December
2021
$’000s
2020
$’000s
Prot from sale of a subsidiary
(1)
(13,035) –
Gain on reduction of holdings in an
associated company
–
)
(602)Amortisation of intangible assets 196 304
)
Other 276
)
436)
(12,563)
138
)
(1)
See note 31 in relation to the disposal of a subsidiary
13 Finance income
Year ended 31 December
2021
$’000s
2020
$’000s
Interest on bank deposits 3 94
Gain on derivative nancial instruments – 223
Gain on marketable securities 25 81
Foreign exchange dierences, net 895 –
Other interest income 543 422
1,466 820
14 Finance expenses
Year ended 31 December
2021
$’000s
2020
$’000s
Loss on derivative nancial instruments (44) –
Foreign exchange dierences, net – (684)
Interest on loans and bank fees (643) (768)
Interest on lease liabilities (224) (302)
(911) (1,754)
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Notes to the Consolidated Financial Statements
(continued)
for the year ended 31 December 2021
ANNUAL
REPORT & ACCOUNTS 2021
88
15 Income tax expenses
Year ended 31 December
2021
$’000s
2020
$’000s
Current tax (7,027) (3,352)
Tax on previous years (11) (2)
Deferred tax (note 26) (2,299) 2,311
(9,337) (1,043)
Taxation under various laws:
Israel
The Company is an “industrial company” as dened in the Israeli Law for the Encouragement of Industry (Taxes) 1969.
a. The corporate income tax rate for the years 2020 and 2021 is 23%
b. Encouragement of Capital Investments Law:
of 12% in Area “Other”) and for special Preferred Technological Enterprise (tax rate of 6%).
for huge companies entitle (tax rates of 5% in Area “A” or 8% in the Area “Other”).
The Company has Preferred Enterprise status in area A and its Israeli subsidiaries are being assessed according to the
corporate income tax rate.
The Company and its Israeli subsidiaries have tax loss carry-forwards of $131.9 million for which the Group did not
create deferred tax assets. According to the Israeli tax law there is no expiry date to use such losses.
The Company tax assessments for the years up to and including the 2016 tax year are considered as nal.
The United States of America
Telco Systems incurred losses for tax purposes. In addition, in accordance with U.S. tax law, Telco Systems elected to
amortise a substantial part of the excess cost paid by the Company in its acquisition over a period of 15 years, which
has resulted in tax loss carry-forwards. According to US law, losses created until 2017 can be carried forward for 20
years. As of 31 December 2021, the total carry-forward losses of Telco Systems amounted to $280.5 million of which
deferred tax asset of $3.1 million have been recognised in respect of such losses to the extent that a sucient taxable
prot will be available in the foreseeable future.
On 22 December 2017, a Tax Cuts and Jobs Act law was enacted (the “Tax Act”). The Tax Act contains signicant changes
to federal corporate taxes, including a permanent reduction of the corporate tax rate from 35% to 21% eective 1
January 2018.
Other jurisdictions
Taxation for other jurisdictions than those mentioned above is calculated at the rates prevailing in the respective
jurisdictions. The corporate income tax rate for subsidiaries with signicant sales are: Moldova is 12%, Romania is 16%
and Italy is 24%.
BATM R&A 2021_Financial Section_3.indd 28
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Notes to the Consolidated Financial Statements
(continued)
for the year ended 31 December 2021
ANNUAL
REPORT & ACCOUNTS 2021
89
FINANCIAL STATEMENTS
The Group has tax loss carry-forwards of $6.2 million in European subsidiaries and the Group did not recognise
deferred tax assets in respect of $5.2 million of such losses.
The income tax expenses for the year can be reconciled to the prot per the consolidated statement of prot or loss
as follows:
Year ended 31 December
2021
$’000s
2020
$’000s
Prot before tax
24,933 13,299
Tax expense at the Israeli statutory corporate income tax rate of 23% 5,735 3,059
Dierence between equity method measurement basis and cost basis for
tax purposes related to disposal of a subsidiary
1,754 –
)
Dierences between statutory tax in Israel (23%) and statutory tax rate for
subsidiaries abroad
1,449 (339)
Tax losses utilised in current period for which no deferred tax assets have
been recognised
(154) (166)
Deferred tax assets recognised (191) (4,072)
Write-o of deferred tax assets –
)
1,818)
Tax on previous years 11
2
)
Other 733
)
741)
Tax expenses for the year
9,337
)
1,043
)
16 Earningspershare
The calculation of the basic and diluted earnings per share is based on the following data:
Year ended 31 December
2021 2020
Earnings for the purposes of basic and diluted earnings per share ($'000s)
attributable to Owners of the Company
14,340
9,793
Number of shares
Weighted average number of ordinary shares for the purposes of basic
earnings per share
440,437,960 440,291,783
Eect of dilutive potential ordinary shares:
Share options 3,829,714 3,763,448
Weighted average number of ordinary shares for the purposes of
calculation of diluted earnings per share
444,267,674
444,055,231
The number of share options that could potentially dilute basic earnings per share in the future, but were not included
in the calculation of diluted earnings per share because they are antidilutive for the year, is 225,000 (2020: 400,000).
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Notes to the Consolidated Financial Statements
(continued)
for the year ended 31 December 2021
ANNUAL
REPORT & ACCOUNTS 2021
90
17 Financial assets
Year ended 31 December
2021
$’000s
2020
$’000s
Interest-bearing deposits 158 157
Financial assets at FVTPL 2,274 2,646
2,432 2,803
The average interest rate of deposits is 0.25% for 2021 and 2020.
18 Tradeandotherreceivables
31 December
Trade and other receivables
2021
$’000s
2020
$’000s
Trade receivable account 25,451 24,889
Participation in research and development: Government of Israel 90 1,101
VAT authorities 2,226 1,273
Tax authorities 257 126
Construction contracts (see following table) 1,474 5,790
Prepaid expenses 3,634 6,468
Other debtors 1,800 1,820
34,932 41,467
Construction contracts
31 December
2021
$’000s
2020
$’000s
Composition:
Cumulative costs incurred due to works construction contracts 8,493
)
15,019)
In addition - Recognised prots 2,044
)
1,023)
Less accounts submitted to project customers (9,063) (10,252)
1,474
)
5,790)
The average credit period taken on sales of goods is 66 days (2020: 54 days). No interest is charged on the receivables. An
allowance has been made at 31 December 2021 for estimated irrecoverable amounts from the sale of goods of $3,499
thousand (2020: $3,556 thousand), including a loss allowance for expected credit losses according to IFRS 9. The directors
consider that the carrying amount of trade and other receivables approximates their fair value.
As of 31 December 2021, trade receivable account includes amounts of $6.4 million for which maturity date has expired
(including a receivable in the amount of $0.9 million that is overdue by more than a year), but the Group, based on past
experience and on the credit quality of the debtors and given that most of the debts have been collected by the date of
the approval of this annual report, has not made an allowance for doubtful debts since the Company expects that those
debts are to be collectible.
BATM R&A 2021_Financial Section_3.indd 30
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Notes to the Consolidated Financial Statements
(continued)
for the year ended 31 December 2021
ANNUAL
REPORT & ACCOUNTS 2021
91
FINANCIAL STATEMENTS
Credit risk
The Group’s principal nancial assets are cash and cash equivalents, trade and other receivables, deposits and
investments at fair value. The Group’s credit risk is primarily attributable to its trade receivables. The amounts presented
in the consolidated statements of nancial position are net of allowances for credit loss.
19 Inventories
31 December
2021
$’000s
2020
$’000s
Raw materials 7,125 7,166
Work-in-progress 2,410 3,353
Finished goods 21,416 23,374
30,951 33,893
During 2021, $2.0 million of slow-moving inventory was impaired and expensed to the Prot or Loss account (2020:
$1.2 million).
20 Property,plantandequipment
($’000s)
Land and
buildings
Plant and
equipment
Motor
vehicles
Furniture
and
ttings
Leasehold
improvements
Total
Cost
At 1 January 2020 9,735
)
17,088)
1,982)
4,181)
2,537)
35,523)
Additions 29
)
2,352)
419)
351)
334)
3,485)
Disposals – (323) (35) –
)
(271))
(629)Eect of translation adjustment 445
)
565)
5)
25)
121)
1,161)
At 1 January 2021
10,209
)
19,734)
2,083)
4,522)
2,992)
39,540)
Additions 29
)
3,477)
394)
103)
2,036)
6,039)
Disposal (11) (265) (229) (77) (29) (611)
Disposal of subsidiary – – (1,994)
)
(797))
–)
(1,197)Eect of translation adjustment (519) (621) (115) (88) (86) (1,429)
At 31 December 2021
9,708
)
21,528)
2,133)
4,460
)3,716
)41,545
)BATM R&A 2021_Financial Section_3.indd 31
BATM R&A 2021_Financial Section_3.indd 31
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Notes to the Consolidated Financial Statements
(continued)
for the year ended 31 December 2021
ANNUAL
REPORT & ACCOUNTS 2021
92
($’000s)
Land and
buildings
Plant and
equipment
Motor
vehicles
Furniture
and
ttings
Leasehold
improvements
Total
Accumulated depreciation
At 1 January 2020 2,392
)
12,352)
1,285)
4,007)
1,284)
21,320)
Depreciation expense 295
)
1,002)
247)
191)
290)
2,025)
Disposals – (248) (34) –
)
(154))
(436)Eect of translation adjustment 211
)
260)
3)
7)
41)
522)
At 1 January 2021
2,898
)
13,460)
1,287)
4,171)
1,615)
23,431)
Depreciation expense 299
)
1,332)
228)
74)
116)
2,049)
Disposals – (175) (77) –
)
(220))
(472)Disposal of subsidiary – – (850)
)
(512))
–)
(338)Eect of translation adjustment (232) (301) (86) (71)
)
(30))
(720))
At 31 December 2021
2,965
)
13,759)
1,254)
4,097
)1,363
)23,438
)Carrying amount
At 31 December 2021
6,743
)
7,769)
879)
363)
2,353)
18,107)
At 31 December 2020
7,311
)
6,274)
796)
351)
1,377)
16,109)
21 Investmentproperty
2021
$’000s
2020
$’000s
At 1 January 1,878
)
1,899)
Depreciation expense (80) (88)
Exchange rate dierences (59) 67
)
At 31 December
1,739
)
1,878
)
Amounts recognised in the consolidated statements of prot or loss
31 December
2021
$’000s
2020
$’000s
Rental income from investment property 24
)
171)
Operating expenses related to income from investment property (13) (154)
Operating expenses related to investment property which produced no income
(134) (34)
BATM R&A 2021_Financial Section_3.indd 32
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Notes to the Consolidated Financial Statements
(continued)
for the year ended 31 December 2021
ANNUAL
REPORT & ACCOUNTS 2021
93
FINANCIAL STATEMENTS
Additional Information
Fair value disclosures for investment properties measured using the cost model
Details of the Group’s freehold land and buildings and information about the fair value hierarchy as at year end are as
follows:
31 December 2021 31 December 2020
At amortised cost
$’000s
Fair value
$’000s
At amortised cost
$’000s
Fair value
$’000s
USA 1,051 1,933 1,099 1,804
Italy 688 1,237 779 1,341
The fair value in Italy and the USA was determined based on the market comparable approach that reects recent
transaction prices for similar properties, where the market rentals of all lettable units of the properties are assessed by
reference to the rentals achieved in the lettable units as well as other lettings of similar properties in the neighbourhood.
The capitalisation rate adopted is made by reference to the yield rates observed by the valuers for similar properties in
the locality and adjusted based on the valuers’ knowledge of the factors specic to the respective properties.
Average market price, taking into account the dierences in location and individual factors, such as frontage and size,
between the comparables and the property, was $1,369 per square metre for the property in Italy and $159 per square
foot for the property in the USA.
22 Right-of-useassets
($’000s)
Plant and
equipment
Buildings
Motor vehicles
Total
Cost
At 1 January 2020 – 11,209
)
1,163)
12,372)
Additions – 1,301
)
481)
1,782)
Disposals – – (213)
)
(213)Eect of translation adjustment – 330
)
62)
392)
At 31 December 2020 – 12,840
)
1,493)
14,333)
Additions 848 1,618
)
693)
3,159)
Disposals – (495) (365) (860)
Disposal of subsidiary – (4,191) (547) (4,738)
Eect of translation adjustment – (110) (13) (123)
At 31 December 2021
848 9,662
)
1,261)
11,771)
BATM R&A 2021_Financial Section_3.indd 33
BATM R&A 2021_Financial Section_3.indd 33
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Notes to the Consolidated Financial Statements
(continued)
for the year ended 31 December 2021
ANNUAL
REPORT & ACCOUNTS 2021
94
($’000s)
Plant and
equipment
Buildings
Motor vehicles
Total
Accumulated depreciation
At 1 January 2020 – 1,930
)
497)
2,427)
Charge for the year – 1,950
)
466)
2,416)
Disposals – – (214)
)
(214)Eect of translation adjustment – 58
)
39)
97)
At 31 December 2020 – 3,938
)
788)
4,726)
Charge for the year 128
1,706
)
375)
2,209)
Disposals
–
(285) (365) (650)
Disposal of subsidiary
–
(896) (175) (1,071)
Eect of translation adjustment – (6) (7) (13)
At 31 December 2021
128 4,457
)
616
)
5,201
)
Carrying amount
At 31 December 2021
720 5,205
)
645
)
6,570
)
At 31 December 2020
–
8,902
)
705
)
9,607
)
The Group leases several assets including buildings and motor vehicles. The average lease term of buildings and motor
vehicles from the implementation date, 1 January 2019, is 7.7 and 2.5 years, respectively.
The maturity analysis of lease liabilities is presented in note 27.
Amounts recognised in prot or loss
2021
$’000s
2020
$’000s
Depreciation expense on right-of-use assets 2,209 2,416
Interest expense on lease liabilities 224 302
Expense relating to short-term leases 766 466
At 31 December 2021, the Group was committed to $0.4 million for short-term leases (2020: $0.3 million). The total cash
outow for leases amounted to $2,174 thousand (2020: $2,428 thousand).
23 Goodwill
The Group tests annually goodwill for impairment or more frequently if there are indications that goodwill might
be impaired. The Group has two reportable business segments and goodwill is associated with CGUs within the
Bio-Medical segment or CGUs within the Networking and Cyber segment. The goodwill related to the Bio-Medical
segment in the amount of $9,401 thousand (2020: $9,478 thousand) is allocated to 5 CGUs: Eco-Med, Diagnostic,
Distribution, Distributor and provider of genetics tests and Analytical instruments distribution. The goodwill related to
the Networking and Cyber segment amounted to $1,984 thousand (2020: $7,360 thousand).
BATM R&A 2021_Financial Section_3.indd 34
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Notes to the Consolidated Financial Statements
(continued)
for the year ended 31 December 2021
ANNUAL
REPORT & ACCOUNTS 2021
95
FINANCIAL STATEMENTS
The goodwill is allocated to the following CGUs:
Eco-Med: $2,550 thousand (2020: $2,550 thousand)
Diagnostic: $1,082 thousand (2020: $1,173 thousand)
Distribution: $1,116 thousand (2020: $1,137 thousand)
Distributor and provider of genetics tests: $1,073 thousand (2020: $1,038 thousand)
Analytical instruments distribution: $3,580 thousand (2020: $3,580 thousand)
Networking: $1,984 thousand (2020: $1,984 thousand)
Software services: $0 thousand (2020: $5,376 thousand). Related to NGSoft, which was sold during Q1 2021. See also
note 31 for further information.
The recoverable amounts of the CGUs are determined from value in use calculations except for the Diagnostic CGU. The
key assumptions for the value in use calculations are those regarding the discount rates, growth rates and expected
changes to selling prices and direct costs during the period. Pre-tax discount rates of between 10.5% - 15.5% have been
used. Changes in selling prices and direct costs are based on recent history and expectations of future changes in the
market.
The Group prepares cash ow forecasts derived from the most recent nancial budget approved by management and
extrapolates indenite cash ows based on estimated growth rates. For the purposes of this calculation management
have used revenue growth rates for the Networking CGU of 35%, 19%, 35%, 35%, 35% for years 1-5 respectively and
0% thereafter, for the Eco-Med CGU 23% for year 1, 10% for years 2-5 and 1% thereafter, for the Distribution CGU 8%
for year 1, 15% for years 2-5 and 5% thereafter, for the Distributor and provider of genetics tests CGU 8% for year 1, 5%
for years 2-5 and 1% thereafter, and for the Analytical instruments distribution CGU 13% for year 1, 9% for years 2-5
and 1% thereafter.
The average operating expenses have been assumed to grow for the Networking CGU at 39%, 27%, 34%, 24%, 25% for
years 1-5 respectively and then assumed to remain constant thereafter, and for the Eco-Med, Distribution, Distributor
and provider of genetics tests and Analytical instruments distribution CGUs at 5%, 8%, 8%, 9%, 9% for years 1-5
respectively and then assumed to remain constant thereafter. The average cost of goods sold has been assumed to
grow for the Networking CGU at 6%, (2%), 1%, 13%, 14% for years 1-5 respectively and then assumed to remain constant
thereafter, and for the Eco-Med, Distribution, Distributor and provider of genetics tests and Analytical instruments
distribution CGUs 10%, 13%, 14%, 14%, 14% for years 1-5 respectively and 4% thereafter. The rates used above reect
historical rates achieved and expected levels for 2022 but then are adjusted for subsequent years.
The recoverable amount of the Diagnostic CGU is determined based on fair value, which accordingly no impairment
was required.
Sensitivity of the recoverable amount to changes in the key assumptions
The recoverable amount of the Distributor and provider of genetics tests activity is higher than the carrying amount in
the amount of $0.9 million. Reduction of 2% growth rate taken into account in calculating the value in use of the activity
will result in a decrease of $0.8 million recoverable amount of the activity and no goodwill impairment will be recorded.
Increase of 3% in pre-tax discount rate taken into account in calculating the value in use of the activity will result in a
decrease of $0.86 million recoverable amount of the activity and no goodwill impairment will be recorded. The changes
in assumptions fo the sensitivity analysis will lead to changes in other assumptions used in the calculation of value in use.
BATM R&A 2021_Financial Section_3.indd 35
BATM R&A 2021_Financial Section_3.indd 35
13/04/2022 13:49
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Notes to the Consolidated Financial Statements
(continued)
for the year ended 31 December 2021
ANNUAL
REPORT & ACCOUNTS 2021
96
2021
$’000s
2020
$’000s
Balance at 1 January
16,838
)
16,804)
Additions in the year –
)
–)
Disposal of a subsidiary (*) (5,185) (504)
Foreign exchange dierence (268) 538
)
Balance at 31 December
11,385
)
16,838
)
(*)
see note 31.
24 Otherintangibleassets
Customer Relationships
and Backlog
$’000s
Technology
$’000s
Other
$’000s
Total
$’000s
Cost
At 1 January 2020
16,420
)
17,180
)
2,694
)
36,294
)
Additions(*) –
)
328)
–)
328)
Disposals –
)
–)
–)
–)
Eect of translation adjustments 716
)
562)
142)
1,420)
As at 1 January 2021
17,136
)
18,070)
2,836)
38,042)
Additions(*) –
)
400)
477)
877)
Disposals – –
)
(1,264))
(1,264)Disposal of subsidiary (4,896) (199) (1,554) (6,649)
Eect of translation adjustments (535) (451) (54) (1,040)
At 31 December 2021
11,705
)
16,556)
1,705)
29,966)
Accumulated amortisation
At 1 January 2020
15,818
)
11,302
)
2,233
)
29,353
)
Amortisation expense 154
)
463)
101)
718)
Disposal –
)
–)
–)
–)
Eect of translation adjustments 659
)
328)
105)
1,092)
At 1 January 2021
16,631
)
12,093
)
2,439
)
31,163
)
Amortisation expense 43
)
547)
126)
716)
Disposal – –
)
(106))
(106)Disposal of subsidiary (4,504) (91) (1,086) (5,681)
Eect of translation adjustments (513) (233) (28) (774)
At 31 December 2021
11,657
)
12,210)
1,451)
25,318)
Carrying amount
At 31 December 2021
48
)
4,346)
254)
4,648)
At 31 December 2020
505
)
5,977)
397)
6,879)
(*)
Includes capitalised development costs according to IAS 38.
BATM R&A 2021_Financial Section_3.indd 36
BATM R&A 2021_Financial Section_3.indd 36
13/04/2022 13:49
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Notes to the Consolidated Financial Statements
(continued)
for the year ended 31 December 2021
ANNUAL
REPORT & ACCOUNTS 2021
97
FINANCIAL STATEMENTS
25 Subsidiaries
A list of the signicant direct and indirect investments in subsidiaries, including the country of incorporation, and percent
of ownership interest as at 31 December 2021 is presented below.
Subsidiary
Principal
activity
Country of
incorporation
Ownership
interest
Date of
acquisition
Entity A Telecommunication United States of America 100% April 2000
Entity B Distribution Romania 100% June 2007
Entity C Eco-Med Hungary 75% February 2008
Entity D Distribution Moldova 51% July 2008
Entity E Diagnostics Italy 100% February 2009
Entity F Diagnostics Italy 100% November 2009
Entity G Cyber Israel 67% April 2012
Entity H Distribution Hungary 100% January 2016
Entity I Distribution Israel 100% January 2017
26 Deferred tax
Deferred tax assets
The following are deferred tax assets recognised by the Group and movements thereon during the current and prior
reporting period (see also note 15).
Retirement benet
obligations
$’000s
Losses carried
forward
$’000s
Other(*)
$’000s
Total
$’000s
At 1 January 2020
36
)
3,168)
30)
3,234)
Change for the period (36) 2,415 2,350
)
(29))
Eect of translation adjustments – 175
)
176)
(1))
At 1 January 2021 –
)
5,759
)
–)
5,759
)
Change for the period – –
)
(2,280))
(2,280)Eect of translation adjustments – –
)
(104))
(104)At 31 December 2021 –
)
3,375
)
–)
3,375
)
The Company incurred tax losses in certain jurisdictions, to which deferred tax assets relate, to the extent that it is
expected that future taxable prot will be available and can be utilised against them. The deferred tax assets were
analysed based on forecasted operations and existing agreements and backlog. The Company expects that taxable
prots will be available, as a result of an increasing demand, new products and expansion to new markets.
BATM R&A 2021_Financial Section_3.indd 37
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Notes to the Consolidated Financial Statements
(continued)
for the year ended 31 December 2021
ANNUAL
REPORT & ACCOUNTS 2021
98
Deferred tax liabilities
Intangible
assets
$’000s
Tangible assets
and other
$’000s
Total
$’000s
At 1 January 2020
98
)
528)
626)
Change for the period (15) 54
)
39)
Eect of translation adjustments 7
)
39)
46)
At 1 January 2021
90
)
621
)
711
)
Change for the period (16) 35
)
19)
Eect of translation adjustments (1) (19) (20)
Disposal of a subsidiary – (540)
)
(540)At 31 December 2021
73
)
97
)
170
)
The following are unrecognised taxable temporary dierences associated with investments and interests:
Taxable temporary dierences in relation to investments in subsidiaries for which deferred tax liabilities have not been
recognised amount to: $12,873 thousand as of 31 December 2021 (31 December 2020: $15,386 thousand).
27 Financialandotherliabilities
Trade and other payables
31 December
2021
$’000s
2020
$’000s
Trade creditors 20,701 22,373
Salary accruals 7,195 8,511
VAT and other tax 4,336 3,515
Dividend payables 4,300 –
Provision – 2,059
Other creditors and accruals 10,987 17,160
47,519 53,618
Trade creditors and accruals principally comprise amounts outstanding for trade purchases and ongoing costs. The
average credit period taken for trade purchases was 59 days (2020: 58 days). The directors consider that the carrying
amount of trade payables approximates to their fair value.
Long-term bank credit
31 December
2021
$’000s
2020
$’000s
Long-term bank credit 1,356 675
1,356 675
BATM R&A 2021_Financial Section_3.indd 38
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13/04/2022 13:49
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Notes to the Consolidated Financial Statements
(continued)
for the year ended 31 December 2021
ANNUAL
REPORT & ACCOUNTS 2021
99
FINANCIAL STATEMENTS
Long-term liabilities
31 December
2021
$’000s
2020
$’000s
Liability to the oce of the chief scientist 2,685 3,269
Government institutions and other 1,203 3,147
3,888 6,416
Changes in nancial liabilities where the cash ows in respect thereof are classied as to nancing activities
2021
Open
balance
$’000s
Cash ow from (used in)
nance activities, net
$’000s
Foreign exchange
dierences
$’000s
Close
balance
$’000s
Short term
5,365 (3,565) (166) 1,634
Long term
675 744 1,356
)
(63)6,040
(2,821) (229)
2,9902020
Open
balance
$’000s
Cash ow used in
nance activities, net
$’000s
Foreign exchange
dierences
$’000s
Close
balance
$’000s
Short term
5,915 (830) 280
)
5,365Long term
762 (42) (45) 675
6,677
(872)
235)
6,040Disclosure required by IFRS 16
31/12/2021 31/12/2020
$’000s $’000s
Maturity analysis
Year 1 2,186 2,244
Year 2 1,682 2,116
Year 3 1,240 1,489
Year 4 1,047 1,082
Year 5 741 1,006
Onwards 398 2,747
7,294 10,684
BATM R&A 2021_Financial Section_3.indd 39
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Notes to the Consolidated Financial Statements
(continued)
for the year ended 31 December 2021
ANNUAL
REPORT & ACCOUNTS 2021
100
28 Sharecapital
Ordinary shares of NIS 0.01 each (number of shares)
2021 2020
Authorised:
1,000,000,000 1,000,000,000
Issued and fully paid:
440,534,124 440,434,124
The Company has one class of ordinary shares which carry no right to xed income.
During the year, 100,000 options were exercised by an employee (see also note 33). During 2020, 155,050 options were
exercised by 20 employees.
29 Dividendsandbuyback
On 14 December 2021, the shareholders approved the distribution of a dividend of 0.74 pence (sterling) per ordinary
share, amounting to a total payout of $4.3 million. The amount was fully paid during the rst quarter of 2022.
For information about the Company buyback programme, see note 37 – Post balance sheet events.
30 Notetothecashowstatement
Year ended 31 December
2021
$’000s
2020
$’000s
Operating prot from operations
24,378
)
14,233
)
Adjustments for:
Amortisation of intangible assets 716
)
718)
Depreciation of property, plant and equipment and investment property 4,548
)
4,757)
Capital loss (gain) of property, plant and equipment (229) 31
)
Prot from sale of a subsidiary
(13,035)
–)
Capital gain on reduce of holdings in associated company –
)
(602)Stock options granted to employees 96
)
158)
Increase (decrease) in retirement benet obligation (10) 96
)
Increase (decrease) in provisions (1,803) 2,114
)
Operating cash ow before movements in working capital
14,661 21,505
)
Decrease (increase) in inventories 3,031
)
(11,198)Decrease (increase) in receivables (2,052) 916
)
Increase (decrease) in payables (5,352) 7,111
)
Eects of exchange rate changes on the balance sheet (1,616) 1,729
)
Cash from operations
8,672
)
20,063)
Income taxes paid (2,383) (637)
Income taxes received –
)
3)
Interest paid (697) (970)
Net cash from operating activities
5,592
)
18,459)
BATM R&A 2021_Financial Section_3.indd 40
BATM R&A 2021_Financial Section_3.indd 40
13/04/2022 13:50
13/04/2022 13:50
Notes to the Consolidated Financial Statements
(continued)
for the year ended 31 December 2021
ANNUAL
REPORT & ACCOUNTS 2021
101
FINANCIAL STATEMENTS
31 Disposalofsubsidiary
On 19 March 2021, the Group entered into a sale agreement to dispose of NG Soft Ltd. (“NGSoft (to Aztek Technologies
(1984) Ltd., a provider of ICT cloud services in Israel and a portfolio company of SKY Fund (the “Buyer”). NGSoft is a
software and digital services company that provides creative digital and technology solutions.
NGSoft
2021
US$ in thousands
Net assets disposed
Property, plant and equipment 1,144
)
Right of use 3,667
)
Other intangible assets 968
)
Net working capital 73
)
Lease liability (3,764)
Current tax liability (584)
Deferred tax liability (540)
Goodwill 5,185
)
Net assets disposed of
6,149
)
Disposal of a foreign operation translation reserve (522)
Gain on disposal
13,035
)
Total consideration 18,662
)
Net cash inow arising on disposal:
Consideration received in cash and cash equivalents, net 20,903
)
Cash and cash equivalents disposed (2,241)
18,662
)
32 Guaranteesandliens
The Group provided from time to time bank guarantees due to advances from customers.
The Company registered several liens in favour of banks.
33 Share-basedpayments
Equity-settled share option scheme
In November 2021, the Company approved a Share Incentive Plan (hereinafter: “the 2021 Plan”), under which the Company
can grant options or restricted share units or allot shares (including restricted shares), according to the procedures,
terms and conditions specied in the Share Incentive Plan. Options granted prior to the 2021 Plan are subject to the
BATM R&A 2021_Financial Section_3.indd 41
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Notes to the Consolidated Financial Statements
(continued)
for the year ended 31 December 2021
ANNUAL
REPORT & ACCOUNTS 2021
102
terms and conditions under which they were granted. As of the balance sheet date, the Company had not made any
grants under the 2021 Plan.
Details of the share options outstanding during the year are as follows:
Number
of share
options
Weighted average
exercise price
(in GBP)
Number
of share
options
Weighted average
exercise price
(in GBP)
Outstanding at beginning of year 5,756,200 0.2867 5,575,395 0.2613
Granted during the year 225,000 1.0502 400,000 0.6385
Forfeited during the year (250,000) 0.5976 (64,145) 0.3701
Exercise during the year (100,000) 0.4340 (155,050) 0.2475
Outstanding at the end of the year
5,631,200 0.3008 5,756,200 0.2867
Exercisable at the end of the year
5,247,867 0.2505 3,056,200 0.2360
The outstanding options at 31 December 2021 had a weighted average exercise price of 0.3008 GBP, and a weighted
average remaining contractual life of 6.3 years. On 21 February 2021, 225,000 options were granted for an estimated fair
value of $200 thousand which were calculated according to the Black-Scholes model. On 21 May, 2020, 400,000 options
were granted for an estimated fair value of $249 thousand which were calculated according to the Black-Scholes model.
The inputs into the Black-Scholes model for the options granted are as follows:
2021 2020
Weighted average share price (GBP) 1.05 0.92
Weighted average exercise price (GBP) 1.05 0.64
Expected volatility 82% 67%
Expected life 3 3
Risk-free rate 1.3% 1.3%
Expected dividends 0% 0%
Expected volatility was determined by calculating the historical volatility of the Company’s share price over the previous
3 years. The expected life used in the model has been adjusted, based on management’s best estimate, for the eects
of non-transferability, exercise restrictions and behavioural considerations.
The Group recognised total expenses of $96 thousand and $158 thousand related to equity-settled share-based
payment transactions in 2021 and 2020, respectively.
34 Retirementbenetobligation
Dened contribution plans
The Group operates dened contribution retirement benet schemes for all qualifying employees in Israel. The assets
of the schemes are held separately from those of the Group in funds under the control of trustees. Where there are
employees who leave the schemes prior to vesting fully in the contributions, the contributions payable by the Group
are reduced by the amount of forfeited contributions.
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Notes to the Consolidated Financial Statements
(continued)
for the year ended 31 December 2021
ANNUAL
REPORT & ACCOUNTS 2021
103
FINANCIAL STATEMENTS
Total expenses related to the contribution retirement benet schemes are: $453 thousand in the year 2021 (2020:
$1,112 thousand).
The employees of the Group’s subsidiaries in the United States are members of a state-managed retirement benet
scheme operated by the government of the Unites States. The subsidiary contributes a specied percentage of payroll
costs to the retirement benet scheme to fund the benets. The only obligation of the Group with respect to the
retirement benet scheme is to make the specied contributions.
Dened benet plans
The Group operates dened benet schemes for qualifying employees of the Company and its subsidiaries in Israel
and in Italy.
In Israel this scheme provides severance pay provision as required by Israeli law. Under the plans, the employees
are entitled to post-employment benets equivalent to years of service multiplied by 8.33% of nal salary on either
attainment of a retirement age of 67 (men) and 65 (women) or redundancy. No other post-retirement benets are
provided to these employees.
In Italy each employee is entitled to have a severance payment as soon as they end employment under one of the
conditions specied below except those who decide to choose private insurance during the employment. Principal
conditions to release the liability are: 1. Full retirement age 2. Accumulation of minimal working years 3. Termination of
employment by the employer 4. Death of employee 5. Occurrence of employee’s disability.
The most recent actuarial valuations of plan assets and the present value of the dened benet obligation were carried
out at 16 January 2022 by Alexey Trakshinsky, FILAA on behalf of Elior Weissberg Ltd., a member of the Institute of
Actuaries regarding the employees in Israel. The present value of the dened benet, obligation, the related current
service cost and past service cost were measured using the projected unit credit method. The discount rate was based
on high quality corporate bonds.
The principal assumptions used for the purposes of the actuarial valuations were as follows:
2021 2020
Discount rate(s) 2.15% 2.10%
Expected rate(s) of salary increase 1-4% 1-4%
Expected ination rate 2.56% 1.40%
Employee turnover rate 8% 8%
Amounts recognised in comprehensive income in respect of these dened benet plans are as follows:
Service cost:
2021
$’000s
2020
$’000s
Current service cost 193 215
Net interest expenses 11 12
Components of dened benet costs recognised in prot or loss
204 227
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Notes to the Consolidated Financial Statements
(continued)
for the year ended 31 December 2021
ANNUAL
REPORT & ACCOUNTS 2021
104
Re-measurement on the net dened benet liability:
2021
$’000s
2020
$’000s
Return on plan assets (excluding amounts included in net interest
expense)
80
4
))
Actuarial gains and losses arising from changes in nancial assumptions 15
2
)
Actuarial gains and losses arising from other
67 (21)
Components of dened benet costs recognised in other comprehensive
162
(15)
The amount included in the consolidated statements of nancial position arising from the entity’s obligation in respect
of its dened benet plans is as follows:
2021
$’000s
2020
$’000s
Present value of funded dened benet obligation 2,044 2,574
Fair value of plan assets (1,423) (1,746)
Net liability
621 828
Movements in the present value of the dened benet obligation in the current period were as follows:
2021
$’000s
2020
$’000s
Opening dened benet obligation 2,574
)
2,445)
Current service cost 193
)
215)
Interest cost 37
)
41)
Remeasurement (gains)/losses arising from changes in nancial
assumptions
(75)
19
)
Benets paid (552) (247)
Disposal of a subsidiary (76) –
)
Exchange rate dierences (57) 101
)
Closing dened benet obligation
2,044
)
2,574
)
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Notes to the Consolidated Financial Statements
(continued)
for the year ended 31 December 2021
ANNUAL
REPORT & ACCOUNTS 2021
105
FINANCIAL STATEMENTS
Movements in the present value of the plan assets in the current period were as follows:
2021
$’000s
2020
$’000s
Opening fair value of plan assets 1,746
)
1,730)
Interest income 26
)
28)
Remeasurements gains/(losses) return on plan assets (excluding
amounts included in net interest expense)
88
)
4
)
Contributions from the employer 52
)
51)
Benets paid (449) (190)
Disposal of a subsidiary
( 7 1 )
–
)
Exchange rate dierences 31
)
123)
Closing fair value of plan assets
1,423
))
1,746
)
35 Relatedpartytransactions
Remuneration of key management personnel
2021
$’000s
2020
$’000s
Short- and long-term employee benets 1,912 2,378
Shared-based payment – 84
1,912 2,462
Transactions with associated companies
During the year, the Group provided various services to an associated company for an amount of $1,162 thousand.
36 FinancialInstruments
(a) Capital risk management
Management’s policy is to maintain a strong capital base in order to preserve the ability of the Group to continue
operating so that it may provide a return on capital to its shareholders, benets to other holders of interests in the Group
such as credit providers and employees of the Group, and sustain future development of the business. Management
of the Group monitors return on capital dened as the total amount of equity attributable to the shareholders of the
Group and also the amount of dividends distributed to the ordinary shareholders.
The Group’s management reviews the capital structure on a periodic basis. As a part of this review the management
considers the cost of capital and the risks associated with each class of capital. Based on management’s
recommendations, the Group will balance its overall capital structure through the payment of dividends. The Group’s
overall strategy remains unchanged from 2006.
(b) Signicant accounting policies
Details of the signicant accounting policies and methods adopted, including the criteria for recognition, the basis of
measurement and the basis on which income and expenses are recognised, in respect of each class of nancial asset,
nancial liability and equity instrument are disclosed in note 3 to the nancial statements.
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Notes to the Consolidated Financial Statements
(continued)
for the year ended 31 December 2021
ANNUAL
REPORT & ACCOUNTS 2021
106
(c) Categories of nancial instruments
2021
$’000s
Financial assets
Cash and cash equivalents* 65,331
Fair value through prot or loss 2,935
Fair value through OCI 524
Receivables 28,815
Financial liabilities
At amortised cost 56,142
Fair value through prot or loss 47
2020
$’000s
Financial assets
Cash and cash equivalents* 50,575
Fair value through prot or loss 3,306
Fair value through OCI 524
Receivables 40,068
Financial liabilities
At amortised cost 57,353
Fair value through prot or loss –
* Cash and cash equivalents comprises $2.4 million deposits up to three months and $62.9 million cash (2020: $11.6 million deposits up to three
months and $39.0 million cash).
The majority of the assets included in fair value through prot or loss section measurements are level 1 fair value
measurements, dened as those derived from quoted prices (unadjusted) in active markets for identical assets.
(d) Financial risk management objectives
The Group’s Finance function provides services to the business, coordinates access to domestic and international
nancial markets, monitors and manages the nancial risks relating to the operations of the Group through internal risk
reports that analyse exposure by degree and magnitude of risks. These risks include market risk (including currency risk,
fair value interest rate risk and price risk), credit risk, liquidity risk and cash ow interest rate risk.
The Group seeks to minimise the eects of these risks by using derivatives only for economic hedging and does not apply
hedge accounting. The use of nancial derivatives is governed by the Group’s policies approved by the board of directors,
which provide principles on foreign exchange risk, interest rate risk, credit risk, the use of nancial derivatives and non-
derivative nancial instruments, and the investment of excess liquidity. Compliance with policies and exposure limits is
reviewed by the internal auditors on a continuous basis.
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Notes to the Consolidated Financial Statements
(continued)
for the year ended 31 December 2021
ANNUAL
REPORT & ACCOUNTS 2021
107
FINANCIAL STATEMENTS
(e) Market risk
The Group’s activities expose it primarily to the nancial risks of changes in foreign currency exchange rates (refer to section
f) and interest rates (refer to section g). The Group enters into a variety of derivative nancial instruments tomanage
its exposure to interest rate and foreign currency risk, including: structured deposits, call options and forwardforeign
exchange contracts to hedge the exchange rate risk, which derive mostly from existing monetary assets and liabilities.
There has been no change to the Group’s exposure to market risks or the manner in which it manages and measures
the risk.
(f) Foreign currency risk management
The Group undertakes certain transactions denominated in foreign currencies, hence exposures to exchange rate
uctuations arise. Exchange rate exposures are managed within approved policy parameters utilising forward foreign
exchange contracts.
The Company does not implement hedge accounting.
The carrying amount of the Group’s foreign currency denominated monetary assets and monetary liabilities at the
reporting date is as follows:
Liabilities
Assets2021
$’000s
2020
$’000s
2021
$’000s
2020
$’000s
NIS 9,650 14,873 26,400 21,034
EUR 24,332 26,559 33,212 32,680
RON 4,826 4,300 11,711 8,871
MDL 2,737 1,983 3,862 3,532
GBP 388 323 3,764 441
Other 2,240 4,810 2,067 1,019
Foreign currency sensitivity
The Group is mainly exposed to EUR, NIS, GBP, RON and MDL.
The following table details the Group’s sensitivity to a 10% change in USD against the respective foreign currencies
in 2021. The 10% is the rate used when reporting foreign currency risk internally to key management personnel and
represents management’s assessment of the possible change in foreign exchange rates. The sensitivity analysis of the
Group’s exposure to foreign currency risk at the reporting date has been determined based on the change taking place
at the beginning of the nancial year and held constant throughout the reporting period. A positive number indicates
an increase in prot or loss and other equity where the USD weakens against the respective currency. If the USD were
to strengthen by the same percentage against the respective currency there would be a similar but reverse impact on
the prot or loss and equity as presented in the tables below.
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Notes to the Consolidated Financial Statements
(continued)
for the year ended 31 December 2021
ANNUAL
REPORT & ACCOUNTS 2021
108
Prot or loss
2021
$’000s
2020
$’000s
NIS Impact 1,724 417
EUR Impact 396 (151)
GBP Impact 362 29
Equity
2021
$’000s
2020
$’000s
NIS Impact (49) 199
)
EUR Impact 492
)
763)
MDL Impact 112
)
155)
GBP Impact (24) (17)
RON Impact 689
)
457)
Other currencies Impact (17) (379)
The Group’s main exposure derives from its cash, receivables and payables at year end..
The Company engages in nancial instruments contracts such as forward contracts, call and put options and structured
instruments in order to manage foreign currencies exposure as needed.
During the year, the Company engaged in three nancial instruments, which resulted in $44 thousand recorded as
nance expenses (2020: ve nancial instruments, which resulted in $223 thousand recorded as nance income).
(g) Interest rate risk management
The Group is exposed to interest rate risk because entities in the Group may borrow funds at both xed and oating
interest rates. The risk is managed by the Group by maintaining an appropriate mix between xed and oating rate
borrowings. The Group’s exposure to interest rate on nancial assets and nancial liabilities are detailed in the following
table (refer to section h). The exposure to oating rate loans is not material.
(h) Liquidity risk management
The Group manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities,
by continuously monitoring forecast and actual cash ows, and by matching the maturity proles of nancial assets and
liabilities.
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Notes to the Consolidated Financial Statements
(continued)
for the year ended 31 December 2021
ANNUAL
REPORT & ACCOUNTS 2021
109
FINANCIAL STATEMENTS
Financial liabilities
Weighted average
eective interest
rate
0-3 months
3 months to
1 year 1-5 years
Total
% $’000s $’000s $’000s $’000s
31 December 2021
Non-interest bearing – 42,646 450 4,692 47,788
Bank loans interest
bearing (*)
4.20 552 1,082 1,356 2,990
Lease liabilities 2.05 546 1,640 5,108 7,294
43,744 3,172 11,156 58,072
31 December 2020
Non-interest bearing – 47,695 405 6,325 54,425
Bank loans interest
bearing (*)
3.12 736 4,629 675 6,040
Lease liabilities 2.92 561 1,683 8,440 10,684
48,992 6,717 15,440 71,149
(*)
Part of the bank loans are linked to a x rate plus Euribor.
The future bank loan interest to be paid is $128 thousand.
(i) Finance liabilities
Loans from banks are measured at amortised cost using the eective interest method. The dierence between the fair
value of the loans and their book value is not signicant.
(j) Fair value of nancial instruments carried at amortised cost
The fair value of the nancial instruments of the Group carried at amortised cost is not considered to be materially
dierent from the stated amortised cost.
37 Postbalancesheetevents
(a) In January 2022, the Group and its partners in Ador invested an additional amount of $10m, of which the Group
contributed $4m. Following this additional investment, the Group’s shareholding in Ador is 37.21% (compared with
36.7% in December 2020).
(b) On 17 March 2022, the Group received shareholder approval for a share buyback programme. As at the date of this
report, the Group had purchased 200,000 ordinary shares.
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REPORT & ACCOUNTS 2021
110
OtherAlternativeMeasures
Incomestatementadjustments
The Group has made reference in the annual report to a number of adjustments regarding (1) the contribution to both years
from NGSoft, a subsidiary that the Group sold in March 2021; (2) the contribution to 2020 from a signicant contract for the
supply of ventilators; and (3) adjustments related to the amortisation of intangible assets. These adjustments are outlined below:
Year ended 31 December
2021 (Unaudited)
Reported
results
Adjustments to
exclude NGSoft and
ventilator contract
Amortisation
of intangible
assets
Adjusted results
(ongoing
operations)
US$ thousands
Revenues 140,038 7,262 – 132,776
Gross prot 51,061 1,235 (414) 50,240
Gross margin (%) 36.5% 17.0% – 37.8%
Sales and marketing expenses 18,290 144 – 18,146
General and administrative
expenses
12,243 358 – 11,885
Research and development
expenses
8,713 – 106 8,607
Other operating expenses
(income)
(12,563) (12,994) 154 277
Operating prot 24,378 13,727 (674) 11,325
EBITDA 29,642 13,956 – 15,686
Year ended 31 December
2020 (Unaudited)
Reported
results
Adjustments to
exclude NGSoft and
ventilator contract
Amortisation
of intangible
assets
Adjusted results
(ongoing
operations)
US$ thousands
Revenues 183,566 70,997
-
112,569Gross prot 60,710 20,105 (414) 41,019
Gross margin (%) 33.1% 28.3%
-
36.4%Sales and marketing expenses 20,197 3,304
-
16,893General and administrative
expenses
15,884 2,680
-
13,204Research and development
expenses
10,258 1,747
-
8,511Other operating expenses
(income)
138 159 145 (166)
Operating prot 14,233 12,215 (559) 2,577
EBITDA 19,708 13,140
-
6,568The above does not form part of the audited nancial statements.
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REPORT & ACCOUNTS 2021
111
FINANCIAL STATEMENTS
EBITDAmeasurement
The Group uses EBITDA as a performance measure, which is calculated as follows:
Reported
Year ended 31 December
Adjusted
Year ended 31 December
2021
(Unaudited)
2020
(Unaudited)
2021
(Unaudited)
2020
(Unaudited)
Operating prot 24,378 14,233 11,325 2,577
Amortisation of Intangible assets 716 718 – –
Depreciation 4,548 4,757 4,361 3,991
EBITDA 29,642 19,708 15,686 6,568
The above does not form part of the audited nancial statements.
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REPORT & ACCOUNTS 2021
112
CompanyInformation
Registered Office
P.O.B. 7318
, Neve Ne’eman Ind. Area, 4 Ha’harash Street, 4524075 Hod Hasharon, Israel
Company Number
520042813
– Registered in Israel
Company Secretary
Mr. Yair Livneh
Auditors
Deloitte Israel & Co.
1 Azriely Center,
Tel-Aviv, Israel
Financial Adviser & Stockbroker
Shore Capital
Cassini House,
57 St James's Street,
London SW1A 1LD, UK
Legal Counsel in UK
Fladgate LLP
16 Great Queen Street,
London WC2B 5DG, UK
Bankers
Bank Hapoalim
4 Hatzoran,
Netanya, Israel
Bank Leumi
7 Menahem Begin Street,
Ramat-Gan, Israel
Registrar
Link Group
10th Floor, Central Square,
29 Wellington Street,
Leeds LS1 4DL, UK
Financial PR Consultants
Luther Pendragon
48 Gracechurch Street,
London EC3V 0EJ, UK
BATM R&A 2021_Financial Section_3.indd 52
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Neve Ne’eman Ind. Area
4 Ha’harash Street, P.O.B. 7318
4524075 Hod Hasharon
Israel
BATM ADVANCED COMMUNICATIONS LTD ANNUAL REPORT AND ACCOUNTS 2021
FOR THE YEAR ENDED 31 DECEMBER 2021
ANNUAL REPORT
AND ACCOUNTS