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Commentary and Notes on Financial Statements
Introduction
These financial statements have been prepared for “QARDAŞLAR MEBEL-3” Limited Liability Company (LLC) for the year ending on December 31, 2020, in accordance with International Financial Reporting Standards (IFRS). The company was established in the Republic of Azerbaijan and operates in this country. The company is a limited liability company established under the laws of the Republic of Azerbaijan.
Significant Uncertainty Regarding Business Continuity
In the context of the spread of the coronavirus infection and its economic consequences, there are factors of uncertainty regarding the continuation of the Company's operations. There is significant uncertainty in ensuring the continuity of the Company's operations.
General Information About the Company
The Charter of “QARDAŞLAR MEBEL-3” LLC was registered with the Legal Entities State Registration Office of the National Revenue Department under the Ministry of Taxes of the Republic of Azerbaijan on February 20, 2015, under registration number 1003718621.
The company was registered as a commercial legal entity on February 20, 2015, by the Commercial Legal Entities State Registration Office of the Ministry of Taxes of the Republic of Azerbaijan and was issued a TIN Certificate with the number 1003718621.
The company was re-registered on October 20, 2020, with the State Tax Service under the Ministry of Economy by the State Registration Office of Legal Entities, and was issued a new State Registry extract.
In accordance with its Charter, “QARDAŞLAR MEBEL-3” LLC may engage in all types of activities not prohibited by the legislation of the Republic of Azerbaijan, including specific activities that require special permission (licenses), only after obtaining the relevant permit (license).
During the reporting period, the Company mainly engaged in the production and sale of furniture.
As of December 31, 2020, and December 31, 2019, the number of employees of the Company was 196 and 125, respectively.
The founder of the Company is an individual, Ali Mammadyar oglu Mirzayev. The charter capital of the Company is 3,050 (three thousand fifty) AZN, consisting of 2 (two) shares of 1,525 (one thousand five hundred twenty-five) AZN each, paid by the founder in cash.
The management and control of the Company are conducted by the Director, Mr. Ali Mammadyar oglu Mirzayev, who reports to the Company’s founders.
Company's Legal Address
The legal address of “QARDAŞLAR MEBEL-3” LLC is:
Republic of Azerbaijan, Baku city, Binagadi district, Bilajari residential area, New residential area 2, house 37.
Operational Currency
The amounts in these financial statements are expressed in Azerbaijani manats (AZN).
Operating Environment of the Company
The Republic of Azerbaijan has the characteristics of a developing market economy. In recent years, the country has experienced significant economic growth. However, the global financial crisis currently affecting the world economy has also impacted Azerbaijan. It is impossible to predict all the trends that may affect the commercial sector, as well as their impact (if any) on the financial situation of the Company in advance.
Tax, social insurance, currency, and customs legislation in the Republic of Azerbaijan are subject to various interpretations and frequent changes. The future development prospects of the Azerbaijani economy heavily depend on the effectiveness of economic, financial, and monetary reforms implemented by the government, as well as the development of the tax, social insurance, legal, regulatory, and political systems.
Presentation of Accounting Policies
The main provisions of the accounting policy used in the preparation of these financial statements are presented in the following sections. Unless otherwise noted in the disclosures, the accounting policy provisions presented are applied consistently across all reporting periods presented.
General Basis for the Preparation of Financial Statements
“QARDAŞLAR MEBEL-3” LLC maintains its accounting records in accordance with the legislation of the Republic of Azerbaijan. These financial statements have been prepared based on the legislative acts on accounting of the Republic of Azerbaijan and adapted to IFRS. These adjustments include reclassifications reflecting the economic substance of the main transactions, as well as the reclassification of certain assets and liabilities. In these financial statements, assets and liabilities are measured at actual cost.
The preparation of financial statements in accordance with IFRS requires management to determine key measurement indicators. Management is also required to disclose professional judgments regarding the implementation of the Company's accounting policies.
Recalculation of Currencies
Functional Currency and Reporting Currency The functional currency is used to measure items in the financial statements. This is the local currency of the Company, the Azerbaijani manat (AZN).
Transactions and Balances Transactions in foreign currencies are reflected in the functional currency according to the exchange rate at the date of the transaction. Exchange rate differences arise from transactions and settlements in currencies different from the functional currency and are determined as the difference resulting from converting a specific number of units of one currency into another currency at various exchange rates. Gains and losses arising from transactions in foreign currencies, as well as gains and losses from the recalculation of monetary assets and liabilities expressed in foreign currencies at the end of the reporting period, are reflected in the income statement. If exchange rate differences arising from such transactions are temporarily recognized as hedging capital (operations to insure against losses due to changes in the value of assets and liabilities), exchange rate differences are not reflected in the income statement.
Monetary items are assets and liabilities that are acquired or payable in fixed or determinable amounts of currency units. The main feature of monetary items is the right to receive or pay a fixed or determinable number of currency units. Monetary items include cash, receivables, advances, long-term debts, guarantees, employee benefit obligations, and deferred tax assets and liabilities.
Non-monetary items include shares, inventories, prepaid expenses, property, land, buildings, and intangible assets.
Buildings and Equipment (Fixed Assets)
Fixed assets are tangible assets that:
Land and buildings primarily include administrative buildings and office spaces. As of the end of the reporting period, land and buildings were not revalued to fair value based on market prices.
Fair value is the value at which an asset is exchanged in an arm's length transaction between knowledgeable, willing, and independent parties. The fair value of buildings is determined by an independent external appraiser periodically (typically not less than once every three years) after deducting depreciation charges. Any accumulated depreciation as of the revaluation date is eliminated from the asset's book value, and the net amount is revalued to fair value. All other fixed assets are reflected at initial cost less depreciation charges.
Initial cost includes expenses directly related to the acquisition of these assets. Initial cost also includes gains and losses transferred to capital from cash flow hedges on assets acquired in foreign currency.
Subsequent expenses are added to the book value of the asset only if future economic benefits related to these assets will flow to the Company and can be reliably measured. All other current repair and maintenance expenses are reflected in the income statement of the period in which these expenses are incurred.
An increase in the book value of land and buildings due to revaluation is credited to other reserves in equity. Decreases in the book value of such assets, up to the limits of any previous revaluation surplus, are debited directly to equity through the fair value reserve; all other decreases in book value are reflected in the income statement.
Depreciation No depreciation is charged on land.
Depreciation of other fixed assets is calculated on a diminishing balance method, i.e., by applying the following annual depreciation rates to the residual value or revalued value of the assets over their useful lives:
The liquidation value and useful life of assets are periodically reviewed and adjusted, if necessary, at each reporting period.
Gains and losses on the disposal of fixed assets are determined by comparing the sale price with the book value of the fixed assets. Gains and losses from disposals are reflected in the income statement.
Intangible Assets
The Company’s intangible assets consist of the 1C accounting software and LOGIX sales software.
Impairment of Assets
Assets with an indefinite useful life are not depreciated and are tested annually for impairment. Depreciated assets are tested for impairment whenever an event or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognized for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell or its value in use. For the purposes of impairment testing, assets are grouped at the lowest levels for which there are separately identifiable cash flows.
Investments
The Company classifies its investments as follows:
The classification depends on the purpose for which the investments were acquired. Management determines the classification of investments at the time of initial recognition and reevaluates them at each reporting date.
Financial Assets at Fair Value Through Profit or Loss
This category has two subcategories: financial assets held for trading and those designated at fair value through profit or loss at inception. Financial assets are included in this category if they are acquired for the purpose of selling in the short term or if designated by management. Derivatives are also classified as held for trading unless they are designated as hedges. Assets in this category are classified as current assets if they are either held for trading or expected to be realized within 12 months from the balance sheet date.
Held-to-Maturity Investments
Investments that the Company has the positive intent and ability to hold to maturity are classified as held-to-maturity and are included in non-current assets unless they are expected to mature within 12 months of the balance sheet date.
Loans and Receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They arise when the Company provides money, goods, or services directly to a debtor with no intention of trading the receivable.
Available-for-Sale Financial Assets
Available-for-sale financial assets are non-derivatives that are either designated in this category or not classified in any of the other categories. They are included in non-current assets unless management intends to dispose of the investment within 12 months of the balance sheet date.
Recognition and Measurement
Purchases and sales of investments are recognized on the trade date, which is the date on which the Company commits to purchase or sell the asset. Investments are initially recognized at fair value plus transaction costs for all financial assets not carried at fair value through profit or loss. Financial assets are derecognized when the rights to receive cash flows from the investments have expired or have been transferred, and the Company has transferred substantially all risks and rewards of ownership. Available-for-sale financial assets and financial assets at fair value through profit or loss are subsequently carried at fair value. Held-to-maturity investments and loans and receivables are carried at amortized cost using the effective interest method.
Fair Value
The fair value of quoted investments is based on current bid prices. If the market for a financial asset is not active (and for unlisted securities), the Company establishes fair value by using valuation techniques. These include using recent arm’s length transactions, reference to other instruments that are substantially the same, discounted cash flow analysis, and option pricing models.
Inventory
Inventories are stated at the lower of cost and net realizable value. Cost is determined using the weighted average method. The cost of finished goods and work in progress comprises raw materials, direct labor, and other direct costs, but excludes borrowing costs. Net realizable value is the estimated selling price in the ordinary course of business, less applicable variable selling expenses.
Trade Receivables
Trade receivables are recognized initially at fair value and subsequently measured at amortized cost using the effective interest method, less provision for impairment. A provision for impairment of trade receivables is established when there is objective evidence that the Company will not be able to collect all amounts due according to the original terms of receivables. The amount of the provision is the difference between the asset's carrying amount and the present value of estimated future cash flows, discounted at the effective interest rate. The amount of the provision is recognized in the income statement.
Cash and Cash Equivalents
Cash and cash equivalents include cash on hand, deposits held at call with banks, and other short-term highly liquid investments with original maturities of three months or less.
Borrowings
Borrowings are recognized initially at fair value, net of transaction costs incurred. Borrowings are subsequently stated at amortized cost using the effective interest method. Any difference between the proceeds (net of transaction costs) and the redemption value is recognized in the income statement over the period of the borrowings using the effective interest method.
Trade Payables
Trade payables are recognized initially at fair value and subsequently measured at amortized cost using the effective interest method.
Provisions
Provisions are recognized when the Company has a present legal or constructive obligation as a result of past events, it is more likely than not that an outflow of resources will be required to settle the obligation, and the amount has been reliably estimated.
Revenue Recognition
Revenue comprises the fair value of the consideration received or receivable for the sale of goods and services in the ordinary course of the Company’s activities. Revenue is shown net of value-added tax, returns, rebates, and discounts, and after eliminating sales within the Company. Revenue is recognized as follows:
Income Tax
Income tax expense comprises current and deferred tax. Current tax is calculated on the basis of the tax rates and laws enacted or substantively enacted at the balance sheet date. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate based on amounts expected to be paid to the tax authorities.
Deferred income tax is recognized, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. However, deferred tax liabilities are not recognized if they arise from the initial recognition of goodwill. Deferred income tax is also not accounted for if it arises from the initial recognition of an asset or liability in a transaction other than a business combination that, at the time of the transaction, affects neither accounting nor taxable profit or loss.
Deferred income tax is determined using tax rates (and laws) that have been enacted or substantively enacted by the balance sheet date and are expected to apply when the related deferred income tax asset is realized, or the deferred income tax liability is settled.
Deferred income tax assets are recognized to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilized.
Employee Benefits
The Company does not have any retirement benefit plans or post-employment benefits.
Leases
The Company as Lessee:
The Company as Lessor:
Operating Leases:
Foreign Currency Transactions
Items included in the financial statements of the Company are measured using the currency of the primary economic environment in which the entity operates (the functional currency). The financial statements are presented in Azerbaijani manats (AZN), which is the Company’s functional and presentation currency.
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognized in the income statement.
Financial Instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity. Financial instruments include financial assets, financial liabilities, and equity instruments.
Related Party Transactions
Related parties are individuals and entities that are affiliated with the Company and have the ability to control or significantly influence the Company's operations, as well as close family members of such individuals. Transactions with related parties are conducted at arm's length and are reflected in these financial statements in accordance with their economic substance.
Use of Estimates and Judgments
The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in the process of applying the Company’s accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the financial statements, are disclosed in the notes to the financial statements.
Risk Management
The Company’s activities expose it to a variety of financial risks: market risk (including currency risk, fair value interest rate risk, and price risk), credit risk, liquidity risk, and cash flow interest rate risk. The Company’s overall risk management program focuses on the unpredictability of financial markets and seeks to minimize potential adverse effects on the Company’s financial performance.
Events After the Reporting Period
Events after the reporting period are those events, favorable and unfavorable, that occur between the balance sheet date and the date when the financial statements are authorized for issue. Two types of events can be identified:
In cases where events occurring after the reporting period are significant, disclosures are made accordingly.
|
|
Buildings | Machinery and Equipment | Vehicles | Furniture and Fixtures |
Total |
| Initial Cost as of January 1, 2019 |
|
404305,00 |
137800,00 |
|
542105,00 |
| Accumulated Depreciation |
|
-192870,44 |
-69745,60 |
|
-262616,04 |
| Balance Value as of January 1, 2019 |
|
211434,56 |
68054,40 |
|
279488,96 |
| Additions |
|
16406,90 |
52300,00 |
|
68706,90 |
| Disposals |
|
|
|
|
|
| Depreciation Charges |
|
-22202,91 |
-12096,14 |
|
-34299,05 |
| Accumulated Depreciation on Disposals |
|
|
|
|
|
|
Balance Value as of December 31, 2019 |
|
205638,55 |
108258,26 |
|
313896,81 |
| Initial Cost as of December 31, 2019 |
|
420711,90 |
190100,00 |
|
610811,90 |
| Accumulated Depreciation |
|
-215073,35 |
-81841,74 |
|
-296915,09 |
| Balance Value as of December 31, 2019 |
|
205638,55 |
108258,26 |
|
313896,81 |
| Initial Cost as of January 1, 2020 |
|
420711,90 |
190100,00 |
|
610811,90 |
| Accumulated Depreciation |
|
-215073,35 |
-81841,74 |
|
-296915,09 |
| Balance Cost as of January 1, 2020 |
|
205638,55 |
108258,26 |
|
313896,81 |
| Additions |
|
54449,58 |
30000,00 |
|
84449,58 |
| Disposals |
|
|
|
|
|
| Depreciation Charges |
|
-26089,95 |
-13725,39 |
|
-39815,34 |
| Accumulated Depreciation on Disposals |
|
|
|
|
|
| Balance Value as of December 31, 2020 |
|
233998,18 |
124532,87 |
|
358531,05 |
| Balance Value as of December 31, 2019 |
|
475161,48 |
220100,00 |
|
695261,48 |
| Accumulated Depreciation |
|
-241163,30 |
-95567,13 |
|
-336730,43 |
| Balance Value as of December 31, 2020 |
|
233998,18 |
124532,87 |
|
358531,05 |
|
|
Software Products | Licenses | Total |
| Initial Cost as of January 1, 2019 |
19500,00 |
0 |
19500,00 |
| Accumulated Depreciation |
-1950,00 |
0 |
-1950,00 |
| Residual Value as of January 1, 2019 |
17550,00 |
0 |
17550,00 |
| Additions |
0 |
0 |
0 |
| Disposals |
0 |
0 |
0 |
| Depreciation Charges |
-3510,00 |
0 |
-3510,00 |
| Initial Cost as of December 31, 2019 |
19500,00 |
0 |
19500,00 |
| Accumulated Depreciation |
-5460,00 |
0 |
-5460,00 |
| Residual Value as of December 31, 2019 |
14040,00 |
0 |
14040,00 |
| Additions |
14042,00 |
0 |
14042,00 |
| Disposals |
0 |
0 |
0 |
| Depreciation Charges |
-5616,00 |
0 |
-5616,00 |
| Initial Cost as of December 31, 2019 |
33542,00 |
0 |
33542,00 |
| Accumulated Depreciation |
-11076,00 |
All equipment of our factory complies with Modern European Standards. All production processes in the factory are governed by the ISO 9001: 2015 Quality Management System and the entity has the above-mentioned certificate. We guarantee that any goods are delivered to high quality, a wide range of products, as well as to timely and fully responsive address delivery.
As a continuation of our success, we were awarded the ISO 9001: 2015 certificate. When our competitors advertised themselves, we worked for customer satisfaction, because of the best advertising customer satisfaction.
On February 23th, Buta Palace hosted the presentation of a representative of several government agencies, including businessmen from Germany, Georgia, Saudi Arabia, and Uzbekistan, 300-350 businessmen, ambassadors of 20 foreign countries of Azerbaijan. National Award "Qardaşlar Mebel MMC", "Furniture Manufacturer of the Year" award. The Brothers Furniture LLC exhibition, which was held before the event, also attracted great interest from the participants. At the event, President of Qardaşlar Mebel LLC Ali Mirzayev said that our company is not only wooden furniture but also iron furniture
Qardaşlar Mebel has gained customer's popularity since its inception. Qardaşlar Mebel, both people and private companies and government agencies, At the end of 2018 and at the beginning of 2019 offers a list of tenderers won:
27.11.2018 - Azerbaijan University of Languages
20.12.2018 - Azerbaijan Railways CJSC
26.12.2018 - Advanced Industrial Solutions LLC
17.01.2019 - Rafad LLC
18.01.2019 - "Azeri Med" LLC
25.01.2019 - Ministry of Defense of the Republic of Azerbaijan
26.01.2019 - General Prosecutor's Office of the Republic of Azerbaijan
28.01.2019 - Agrarian Credit CJSC Non-Bank Credit Organization
28.01.2019 - Çinar Construction LLC
28.01.2019 - Azerbaijan University of Architecture and Construction
29.01.2019 - Ultra Lab LLC
30.01.2019 - State Examination Center
30.01.2019 - Baku Mechanical and Electronics LLC
05.02.2019 - "Imdad Konsalting" LLC
07.02.2019 - Azerbaijan Labor and Social Relations Academy
07.02.2019 - Central District Hospital of Gabala
08.02.2019 - MEGA PARK -1 U / B
18.02.2019 - Caspian Marine Services
22.02.2019 - The Central Bank of the Republic of Azerbaijan
25.02.2019 - Naiqin K Tovuz - Baltiya LLC
05.03.2019 - ADU-Confucius Institute
05.03.2019 - Central District Hospital of Astara
14.03.2019 - Central District Hospital of Quba
15.03.2019 - Central District Hospital of Lankaran
28.03.2019 - Central District Hospital of Khachmaz
29.03.2019 - Headquarters of the Internal Troops of the Ministry of Internal Affairs of the Republic of Azerbaijan
08.04.2019 - Ganja State University
10.04.2019 - Food Safety Agency of the Republic of Azerbaijan
19.04.2019 - Mortgage and Credit Guarantee Fund of the Republic of Azerbaijan
17.05.2019 - Azerbaijan State Customs Committee
The Qardaşlar mebel which started in 2015, is one of the largest furniture manufacturers in Azerbaijan. The factory participated in several international exhibitions and collaborates with many well-known brands. The founder of Qardaşlar mebel, a young businessman Ali Mirzoev, answered AZERTAC questions about the production, goals, and successes of the factory.
- How does the development of the non-oil sector affect your business?
- The emphasis on the non-oil sector developing, diversifying the economy, increasing local production and export turnover, as well as independence from imports – are part of successful reforms in the country.
Purposeful steps taken to develop all sectors of the economy encourage entrepreneurs to invest in new projects and create new jobs. I would like to emphasize that the furniture industry in our country is well developed and produces high-quality furniture products.
Q: What can you say about the activities of “Qardaşlar mebel”, that you’re the founder of?
- Furniture factory “Qardaşlar mebel” has been operating since 2015. The factory has an area of two hectares and is currently considered one of the largest in Azerbaijan. The company includes more than 100 employees and focus on their professionalism. Participating in exhibitions held in leading countries of the world, factory employees get acquainted with the latest technologies, modern equipment in the furniture industry, and also gain new customers and partners.
- The quality and warranty on the furniture are one of the problems that interest customers most of all. What importance is given to this matter in Qardaşlar mebel?
“Qardaşlar mebel” was able, in the very short time, to raise the quality of production and customer service to a level that meets international standards. Thus, product quality and management system have been awarded international certificates ISO 9001: 2008 and ISO 9001: 2015.
All furniture equipment in “Qardaşlar mebel” meets modern European standards. So, 80% of the equipment was purchased from the famous Italian company GRIGGIO Woodworking Machinery and Turkish companies Duresslar Machine, Reha Machina, Texan Machine, Healthy Machine, Tempoaksesuar, Label Workshop, and FetaEğitimMerke. It is worth noting that, Reha Machina company works closely with such major automotive brands as RangeRover and Jaguar.
In the manufacture of furniture sets, high-quality materials from wood, metal parts, paints, and leather and fabric coatings, mattresses are used. The factory includes several large industrial buildings. In addition to the office, home, and garden furniture, the factory also produces school, military, and medical furniture.
We guarantee high-quality furniture sets, timely delivery and complete installation of furniture.
I would also like to note that many state-owned enterprises in our country contact us when updating the material and technical base.
At Qardaşlar mebel, we always strive to please our customers by offering them quality and affordable products.
- The sphere of furniture production requires a creative approach and aesthetic taste. Can “Qardaşlar mebel” please customers from this perspective?
- We work with a team of experienced designers to meet the expectations of our customers. For the same purpose, a lot of work has been done to automate the production process and manage the factory. Recently “Qardaşlar mebel” has updated its brand book, logo, and website (www.gardashlar.com). A corporate character was also created - the Grand Master.
- Your success and future goals are of interest to us ...
- This year, the Buta Palace hosted the National Award “AzeriBusinessAward”, which was attended by about 350 businessmen, representatives of many government agencies, up to 20 foreign ambassadors in Azerbaijan, as well as a group of businessmen from Germany, Georgia, Saudi Arabia, and Uzbekistan. “Qardaşlar mebel” won an award in the “Furniture Manufacturer of the Year” category at this event. At the preliminary exhibition “Exhibition of Achievements of Laureates”, the stand belonging to the factory aroused great interest among the participants.
The purpose of Qardaşlar mebel is to enter the world market and supply Azerbaijani furniture to world markets under the Made in Azerbaijan brand. At present, a lot of work is being done in this direction, and we can confidently declare that we will achieve this goal soon.
- How do customers better get to know your products?
- At present, there are two factory exhibition halls, both of which are located in Baku. We invite everyone interested in our brand to our showrooms to become more familiar with our products.
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“Gardashlar Mebel” which specializes in its special concepts in the furniture sector, has introduced a new concept as part of a domestic market research program. This time, the company offered a unique solution to protect books in libraries operating in the country from external influences. According to the director of the company Ali Mirzayev, the protection of books in libraries from external influences has always been a priority for them:
“We started working on this course by analyzing the current situation in libraries. Then, based on the information we received we found such a unique solution that would serve to protect books from external influences for a long time. The proposed concept can be made in any size, depending on the width of the space. The structure can move comfortably along the lines to be installed on the floor. Moreover, the boards on the structure allow you to divide the books into categories. Installation and dismantling of the structure are carried out in a short time. To protect the books during the repair of the place, it is possible to assemble the shelves in one line by moving the steering wheel on the structure in the appropriate direction. We believe that the unique solution we offer will serve to preserve our cultural heritage”.
We want to mention that the “Gardashlar Mebel” company, which operates under the slogan "Just wish", is engaged in the production of furniture in more than 15 areas. The company is also a participant in many large and small projects in the country.
“Gardashlar Mebel”, one of the largest and most modern furniture manufacturers in Azerbaijan, has announced plans for 2020.
The director of the company Ali Mirzayev said that 2019 was a successful year for Gardashlar Mebel.
“The focus on the development of the non-oil sector in 2019 affected the growth of our domestic production. As in previous years, our customer satisfaction continued with a positive tendency last year. Also, as a company, we were awarded the nomination "Furniture Manufacturer of the Year" in 2019. We estimate all these and other innovations as a continuation of our plans for next year. "
Announcing his plans for 2020, the director of the company noted that the strategic development map is broad. "This year, as in previous years, we will continue to invest in human capital. We plan to organize training in relevant fields to make factory employees more professional. Starting in 2020, we aim to do a lot of work to enlighten customers. As “Gardashlar Mebel”, we plan to add more practicality to the furniture we produce by focusing on learning customer skills”.
"OUR FURNITURE DESERVES TO STAND SIDE BY SIDE WITH WORLD BRANDS "
Giving information about the export of their products to foreign markets, Ali Mirzayev said that this issue is a priority for them. “We are interested in exporting our furniture under the "Made in Azerbaijan" brand.
Although we have achieved certain outcomes in this course, we do not want to be satisfied with it. We know that the furniture we produce deserves to stand side by side with other world brands.
We will use all possible marketing tools to achieve this goal faster. “We want to mention that “Gardashlar Mebel” currently has two exhibition shops all over the country. One of them is located at 12A Hasan Aliyev Street, Baku, and the other is located at 8F Binagadi Highway, Bilajari settlement.
“Gardashlar Mebel”, a gold member of the “Caspian European Club” in Azerbaijan, took part in the “Second Republican Forum of Foreign Trade Participants” in Baku.
Ali Mirzayev, director of the “Gardashlar Mebel” company, who attended the forum, said the event was important for foreign trade participants.
"We support the reforms implemented by the State Customs Committee and the Ministry of Taxes over the past two years to ensure transparency. I am very glad that the name of the company "Gardashlar Mebel" is among the participants of the "Green Corridor". As a company, we estimate becoming 505 of the number of “Green Corridor” participants in a short period of time and exceeding the turnover to $ 8 billion as part of the attention paid to the development of entrepreneurship in the country. As “Gardashlar Mebel”, other advantages, such as the creation of a favorable business environment within the “Green Corridor” system, the provision of a rapid transition in customs and increased transparency in customs control, will further increase the export potential of local market participants”.
It is worth to point out that “Gardashlar Mebel” is working to introduce private furniture concepts to its customers in 2020. The company plans to produce more practical and functional furniture based on customers’ behaviors.
“Gardashlar Mebel”, which produces furniture in more than 15 categories in Azerbaijan, has become a gold member of the Caspian European Club.
The director of "Gardashlar Mebel" Ali Mirzayev remarked about the development of local production while speaking at the event.
“I am very glad that the attention paid to the development of local production in Azerbaijan is increasing day by day. Accelerating this process will create opportunities to open additional workplaces in the furniture industry, as in every sector. We believe that increasing customs duties which applied to ready furniture imported into the country will contribute to the development of local production. In addition, appropriate exemptions will be applied to customs duties on the import of raw materials and equipment for local producers. It is true that today a 20 million decrease is observed in the volume of 12 billion pieces of ready furniture imported into the country. We evaluate it as a result of support for increasing local production, and we believe that the figures for local furniture production will be higher in the future. "
Sharing his experience in foreign countries, the director of the company said that many foreign countries offer companies to invest in their country. Therefore they are interested in providing any support to foreign furniture manufacturers who want to export furniture to their country. "We have submitted our proposals to the Ministry of Economy and we assume that they will take the right steps to improve the country's economy in this aspect."
We want to point out that “Gardashlar Mebel” company has supported the progress of the design field by acting as the general sponsor of the recent 5th design forum.
Gardashlar furniture company, which manufactures furniture based on the needs of individual and corporate clients, has announced the launch of smart furniture.
According to the head of the company, Ali Mirzaev, the production of smart furniture was a long-planned step.
“I think that technology should not bypass the furniture industry. Just as different devices can simplify people's work, we need to make their lives more comfortable by adding functionality to our own furniture. That is why, being Gardashlar Furniture Company, we decided to produce smart furniture based on human behavior. At the initial stage, we plan to apply this trend to office furniture. Our study shows that most private and public sector employees spend most of their time in a sitting position. In many cases, this seriously affects both health and quality of work. Since the office desks we provide are adjustable, people can work behind them, both sitting and standing. It will also help prevent overweight and spinal problems.”
The head of the company talked on the technological advantages that they added to office desks, noting that these additions are necessary elements in a person’s daily life.
“Previously, office furniture had limited functionality, but now you can create more opportunities through a combination of furniture and technology. At the initial stage, we intend to install a cooling system for laptops on office tables with adjustable height, heating to maintain the warmth of the liquid in the cup, a wireless charger for the phone, and 2 USB access points. The prototype of smart furniture has already been made by us. We are ready to increase production depending on the number of orders. This is the first step among local furniture companies, and we plan to expand our activities in the future and will try to apply the integration of furniture and technology into other types of furniture. "
Note that the company also plans to sell furniture in the US market by 2020. The furniture company Gardashlar has already begun negotiations with several companies in this area in America. Currently, Gardashlar Furniture Company is represented in 16 furniture categories throughout Azerbaijan.
Despite the pandemic in Azerbaijan, the Qardaşlar Furniture Company analyzed the current situation in the sector and implemented a pre-defined crisis communication plan to increase its sales.
The head of the company, Ali Mirzayev, said that unlike many companies during the pandemic, his company gained additional orders through transparent operations.
“It has always been important for Qardaşlar Furniture Company to work transparently. As the pandemic spread through many countries, we could foresee its arrival to our country as well. Our analysis showed that companies and individuals operating in the furniture sector of Azerbaijan would not be able to overcome this situation. As a result, many companies and individuals will face difficulties when fulfilling their orders. This, in turn, will severely impact the existing relations between counterparts.
Ali Mirzayev provided information about the company's activities, and also noted that the company had received the financial support for transparent operations from the state had prevented its current situation from further deterioration.
"We know there are advantages to working openly, and the state will certainly support such companies, when necessary. On the other hand, the pandemic has once again shown that companies operating in a non-transparent way find themselves in a difficult situation by hiding their income and expenses. Companies that order furniture should also focus on such cases. If customer companies want their orders completed, they should give preference to cooperation with sound companies in the market. Despite the ongoing quarantine period, our company currently fulfills new orders under the rules set by the Task Force.”
It should be noted that the Qardaşlar Furniture Company has recently decided to produce a simplified version of its smart office furniture. One of the main functions retained in the simplified version will allow for the adjustment of the desk's height according to the user's preference. Companies or individuals interested in the smart office desks can contact us at (077) 486-24-22.
With exports to the country of opportunities, the “Gardashlar” furniture company supports the Armed Forces Assistance Fund given the situation in the country.
Ali Mirzayev, the director, expressed the company’s support to the state in the current situation: “Azerbaijan is a homeland for all of us. We must unite and stand with our state. We, as "Gardashlar" furniture company, support our Mr. President and army, and believe in the earliest liberation of the occupied territories.”
Ali Mirzayev has called on all entrepreneurs to join this initiative.
“Today we must mobilize all our forces and stand with the state and the army.
We, as entrepreneurs, must do whatever possible during these challenging times. "Gardashlar" furniture company has called on all entrepreneurs of the country to join this initiative. We always stand with Ilham Aliyev, the Commander-in-Chief, and our strong army, and we are ready to do everything in our power to liberate our lands.”
"Gardashlar" furniture company is Azerbaijan’s largest producer of military furniture. The company fully complies with regulations adopted by the head of the state and the relevant authorities over the current martial law.
To the Management of “QARDAŞLAR MEBEL-3” Limited Liability Company
Opinion
I have audited the financial statements of “QARDAŞLAR MEBEL-3” LLC, which comprise the statement of financial position as of December 31, 2020, the statement of comprehensive income, the statement of changes in equity, the statement of cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies.
In my opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020, and its financial performance and cash flows for the year then ended in accordance with International Financial Reporting Standards (IFRS).
Basis for Opinion
I conducted my audit in accordance with International Standards on Auditing (ISA). My responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of my report. I am independent of the Company in accordance with the ethical requirements that are relevant to my audit of the financial statements in Azerbaijan, and I have fulfilled my other ethical responsibilities in accordance with these requirements and the IESBA Code. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my opinion.
Significant Uncertainty Related to Going Concern
I draw attention to the explanatory notes in the financial statements of “QARDAŞLAR MEBEL-3” LLC, which describe the factors of uncertainty related to the Company's ability to continue as a going concern due to the spread of the coronavirus infection and its economic consequences. The explanatory notes indicate that there is significant uncertainty as to whether “QARDAŞLAR MEBEL-3” LLC can continue as a going concern under the current circumstances. My opinion is not modified in respect of this matter.
Key Audit Matters
Key audit matters are those matters that, in my professional judgment, were of most significance in my audit of the financial statements of the current period. These matters were addressed in the context of the audit of the financial statements as a whole and in forming my opinion thereon, and I do not provide a separate opinion on these matters.
Responsibilities of Management and Those Charged with Governance for the Financial Statements
Management is responsible for the preparation and fair presentation of the financial statements in accordance with IFRS and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern, and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Company’s financial reporting process.
Auditor’s Responsibilities for the Audit of the Financial Statements
My objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes my 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 influence the economic decisions of users taken on the basis of these financial statements.
Independent Auditor
Ilham Isfandiyar oglu Haji-Azizov
Baku, Azerbaijan Republic
March 9, 2021
|
|
Notes |
2020 |
2019 |
| Cash Flows from Operating Activities |
|
|
|
| Net profit or loss for the period |
18 |
689347.14 |
1087258.52 |
|
Adjustments for the following items: |
|
|
|
|
Depreciation |
|
45431.34 |
37809.05 |
|
Share of minority shareholders |
|
|
|
|
Extraordinary income and expenses |
|
|
|
|
Income tax expenses |
|
|
|
|
Non-cash income and expenses |
|
|
|
| Other items related to investment activities or financing |
|
|
|
|
Changes in the following items: |
|
|
|
|
Reserves |
|
-479189.45 |
-59753.37 |
| Operating receivables and prepaid expenses |
|
-84731.00 |
-224847.61 |
|
Operating payables and accruals |
|
-1617235.50 |
1564825.55 |
|
Decrease (increase) in other assets |
|
|
|
|
Increase (decrease) in other liabilities |
|
110203.49 |
224847.61 |
|
Movement of extraordinary cash flows from operating activities |
|
1290251.22 |
-996607.30 |
|
Paid (refunded) income tax |
|
|
|
| Net cash flow from operating activities |
|
-45922.76 |
1633532.45 |
| Cash flows from investing activities |
|
|
|
| Outflows of cash related to the acquisition of long-term non-financial assets, including capitalized costs related to long-term non-financial assets |
|
-98491.58 |
-68706.90 |
|
Uzunmüddətli qeyri-maliyyə aktivlərinin satışından pul vəsaitlərinin daxilolmaları |
|
|
|
| Inflows of cash from the sale of long-term non-financial assets |
|
|
|
| Inflows of cash from the sale of investments in subsidiaries, associates, and joint ventures |
|
|
|
| Outflows of cash related to short-term and long-term loans granted to other parties |
|
|
|
| Inflows of cash from the repayment of short-term and long-term loans granted to other parties |
|
|
|
| Outflows of cash for the acquisition of subsidiaries and business units, excluding existing cash in those entities |
|
|
|
| Inflows of cash from the sale of subsidiaries and business units, excluding existing cash in those entities |
|
|
|
| Cash flows from futures, forwards, options, and swap contracts |
|
|
|
| Inflows of cash from futures, forwards, options, and swap contracts |
|
|
|
| Inflows of cash in the form of dividends and other similar income |
|
|
|
| Inflows of cash in the form of received interest |
|
|
|
| Extraordinary inflows and outflows of cash related to investment activities |
|
|
|
| Net cash flow from investing activities |
|
-98491.58 |
-68706.90 |
| Cash flows from financing activities |
|
|
|
| Inflows of cash from the issuance of shares and other similar instruments |
|
|
|
| Outflows of cash for the repurchase of the company’s own shares and other similar instruments |
|
|
|
| Inflows of cash from borrowed funds |
|
|
|
| Outflows of cash for the repayment of borrowed funds |
|
|
|
| Inflows of cash from targeted financing |
|
3000.00 |
|
| Outflows of cash for the repayment of targeted financing |
|
|
|
| Outflows of cash related to principal amounts under finance lease agreements |
|
|
|
| Outflows of cash in the form of dividends and similar payments |
|
|
|
| Outflows of cash in the form of interest payments |
|
|
|
| Extraordinary inflows and outflows related to financing activities |
|
|
|
| Net cash flow from financing activities |
|
3000.00 |
|
| Increase (decrease) in cash and cash equivalents |
|
-141414.34 |
1564825.55 |
| Movement of cash and cash equivalents | |||
|
|
2020 |
2019 |
|
| Cash and cash equivalents at the beginning of the year, excluding bank overdrafts |
1617235.50 |
52409.95 |
|
| Increase (decrease) in cash and cash equivalents during the year, affecting foreign currency exchange rates |
-141414.34 |
1564825.55 |
|
| Cash and cash equivalents at the end of the year, excluding bank overdrafts |
1475821.16 |
1617235.50 |
|
"Gardashlar" furniture LLC, one of the local furniture manufacturers in the country, has announced that it has changed its organizational and legal form and become a Closed Joint-Stock Company (CJSC).
Founded in 2015, Gardashlar furniture has a say in local furniture production. The factory, which produces 17 categories of furniture, is equipped with modern equipment to increase production capacity.
Gardashlar Mebel manufactures various types of furniture for educational centers, military units, health centers, hotels and restaurants, public and private enterprises based on private projects. The company's investments in technological innovations and human capital allow the furniture sector to produce better quality and up-to-date products.
The factory has more than 200 permanent employees and has signed more than 300 projects in 6 years.
Gardashlar Furniture Company, which constantly provides technological solutions for the production and improvement of office furniture in Azerbaijan, has been gaining the sympathy of foreign buyers under the name "Made in Azerbaijan" by exporting furniture to the USA for a year.
Gardashlar Mebel was able to organize the quality of production and the level of customer service by international standards. Thus, the factory's production quality and management system have been awarded ISO 9001: 2008 and ISO 9001: 2015 international certificates.
Order of the President of the Republic of Azerbaijan on awarding persons distinguished in the field of entrepreneurial activity in the Republic of Azerbaijan
Guided by paragraph 23 of Article 109 of the Constitution of the Republic of Azerbaijan, I decide:
The following persons shall be awarded for their contribution to the economic development of the Republic of Azerbaijan and effective activities in the field of entrepreneurship:
With the Order of Friendship
Hisarcıklıoğlu Mustafa Rifat
With the "Progress" medal
Alisoy Ibrahim Aydin oglu
Aslanov Zohrab Veli oglu
Babayev Abbas Gazanfar oglu
Babayev Bakhtiyar Agamir oglu
Bagirli Adil Tofig oglu
Bagmanov Hikmet Kamal oglu
Büyükfırat Hüseyin Mehmet oğlu
Jabbarov Yusif Hasan oglu
Chulagov Rashid Yasin oglu
Hummatov Galib Khanlar oglu
Ismayilov Afgan Sultanali oglu
Karashahin Ramazan Abubakir oglu
Guliyev Ehtiram Tofig oglu
Guliyev Ruslan Garay oglu
Mammadov Tofig Rafig oglu
Mammadov Zaur Samiddin oglu
Mirzayev Ali Mammad oglu
Traldi Manuela Stefano.
Ilham Aliyev
President of the Republic of Azerbaijan
Baku city, April 25, 2022
The number of unofficial enterprises selling furniture to citizens is growing, abusing the name of Gardashlar Mebel CJSC, one of the leading furniture manufacturers in the country.
Due to numerous complaints received by the company's Call Center, Gardashlar Mebel urges its customers to be careful.
Mahal Goyushov, the company's deputy director, told Marja.az that those who introduced themselves as Gardashlar Mebel representatives tried to damage our trust by taking unofficial orders. We urge our buyers to be careful to prevent such cases. It should be noted that each product produced by our factory has a label with the logo of our company. In addition, each of our Sales Representatives uses a certificate confirming that Gardashlar is a Furniture Representative. Citizens can request this card from anonymous individuals who present themselves as Gardashlar Mebel representatives.
Gardashlar Mebel currently has two exhibition stores across the country. One of them is located at 12A Hasan Aliyev Street, Baku, and the other is located at 8F Binagadi Highway, Bilajari settlement.
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Today, with the support of the Ministry of Economy and the organization of the Small and Medium Business Development Agency (KOBIA), an awarding event for entrepreneurs was held.
At the event, Minister of Economy Mikayil Jabbarov presented "Progress" medals to those who were awarded for their contribution to the economic development of our country and effective activities in the field of entrepreneurship by the Decree of the President of the Republic of Azerbaijan dated April 25, 2022.
Ali Mirzayev, the founder of "Gardashlar Mebel" CJSC, is one of the young entrepreneurs to whom the "Progress" medal was presented.
Gardashlar furniture factory, which was established in 2015, is an enterprise engaged in the production of more than 17 categories of furniture, distinguished by its constant innovations in local furniture production.
The factory with more than 340 permanent employees has signed more than 350 projects for 7 years.
Since 2020, "Gardashlar Mebel" JSC, which constantly provides technological solutions for the production and improvement of office furniture in Azerbaijan, contributes to the country's economy by exporting furniture to America under the name "Made in Azerbaijan".
More: "Qardaşlar Mebel" şirkətinin təsisçisinə “Tərəqqi”medalı təqdim olundu | marja.az
Gardashlar Mebel, one of the leading companies in the furniture industry in Azerbaijan, will launch a new ERP (Enterprise Resource Planning) platform that provides full transparency to its customers. This step is the next important step taken by the company to increase customer satisfaction and transparency of production processes.
Regarding the implementation of ERP systems, the head of Gardashlar Mebel company Ali Mirzayev said:
"Through our new ERP platform, our customers will be able to monitor every stage of their orders live. It is possible to find out what stage the production process is in with one click. This gives our customers the opportunity to be part of the production process and increases their confidence."
Other advantages of ERP systems are also noteworthy. According to the head of the company, ERP systems allow more effective and efficient management of production processes. Productivity increases and costs decrease as a result of proper planning and management of resources. The use of ERP systems helps companies provide innovative solutions and gain a competitive advantage. These systems improve production processes with the use of modern technologies and provide better service to customers.
Gardashlar Mebel, opening a new era in customer satisfaction with the implementation of ERP systems, further strengthens its leading position in the furniture industry in Azerbaijan. The company successfully operates under the "Made in Azerbaijan" brand in both local and foreign markets.
The ERP platform will be presented at the end of 2024 and will be available from 2025. Global Technology Services and Prospect developed the system, and part of the project is financed by the European Bank for Reconstruction and Development (EBRD).
It should be noted that at the beginning of 2025, a presentation ceremony on the Platform will be held by Gardashlar Mebel for consumers and media representatives.
You can get more detailed information about Gardashlar Furniture from the official website.
In the modern business world, constant movement is key to success. However, heavy workloads and responsibilities often force us into a sedentary work environment for hours. This situation, particularly for managers and entrepreneurs, can lead to health problems. Sitting for long periods can cause spinal issues, especially pain in the back and neck. "Gardashlar Mebel" invites executives to solve this problem by using our next-generation Smart desks.
Ali Mirzayev, founder of "Gardashlar Mebel": "The Smart Desk is my choice too"
Ali Mirzayev, head of "Gardashlar Mebel," also uses the Smart desk and encourages all executives to embrace this innovation based on his personal experience.
He says: "At 'Gardashlar Mebel,' we offer automatically adjustable Smart desks not only for employees and managers but also for executives. Thanks to the Smart desk, we can protect our health and improve work productivity. These desks change our work routine, helping us lead a more balanced and healthy lifestyle. We integrate the smart mechanism into existing executive desks, enhancing functionality while maintaining design. 'Gardashlar Mebel' doesn't stop at height-adjustable Smart desks; we also offer models enriched with technological features. These desks come equipped with cup warmers, laptop coolers, Bluetooth speakers, and wireless chargers. These features provide a more comfortable and efficient work environment for executives, boosting both health and productivity."
Contact us to choose the right desk for you or to replace your existing desk with a Smart desk.
Contact number – 077 452 24 22
