NOVATURAS AB
Consolidated Annual Report
Independent Auditor’s Report
Consolidated and the Company’s Financial Statements
for the year ended on 31 December 2022
NOVATURAS AB, Company code 135567698, A. Mickevičiaus st. 27, Kaunas, Lithuania
CONTENT
2
PAGE
CEO’s FOREWORD
3–4
CONSOLIDATED ANNUAL REPORT
5–12
ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT
GOVERNANCE REPORT
13–35
SOCIAL RESPONSIBILITY REPORT
36–39
ENVIRONMENTAL REPORT
39–40
APPROVAL BY OFFICERS OF THE COMPANY
41
INDEPENDENT AUDITOR’S REPORT
42–45
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS:
CONSOLIDATED AND SEPARATE STATEMENTS OF FINANCIAL POSITION
46–47
CONSOLIDATED AND SEPARATE STATEMENTS OF PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME
48
CONSOLIDATED AND SEPARATE STATEMENTS OF CHANGES IN EQUITY
49–50
CONSOLIDATED AND SEPARATE STATEMENTS OF CASH FLOW
51–52
NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
53–86
NOVATURAS AB, Company code 135567698, A. Mickevičiaus st. 27, Kaunas, Lithuania
CONSOLIDATED ANNUAL REPORT FOR THE YEAR ENDED 31 December 2022
(all amounts are in thousand EUR unless otherwise stated)
3
Statement of the Head of the Company
Dear All,
2022 was a year of managed challenges for us – our ambitious targets at the start of the year were adjusted by the war in
Ukraine and the resulting slowdown in travel demand, as well as the drastic rise in jet fuel prices, which led to a temporary
loss. However, timely and targeted decisions helped to significantly improve our performance in the second half-year.
We reacted promptly to changes in demand and adjusted our flight programme accordingly, while close cooperation with
our partners helped us to confidently grow our sales and adapt our hotel offering. Last year, we took a strategic decision to
implement the bookings of another tour operator (Kidy Tour) – a challenge which we managed successfully, not only meeting
the expectations of the travellers themselves, but also significantly increasing the number of passengers served. The
introduction of a fuel surcharge during the year helped to reduce loss due to fuel price volatility.
After the first half-year, we recorded negative EBITDA (EUR -0.8 million) and a net loss (EUR -1.7 million); however, we
closed the year with positive EBITDA (EUR +0,48 million).
We returned to profitability already in the summer, and since September we have recorded a significant monthly revenue
growth. Every month from the beginning of autumn until December has been more successful than the previous, and we
ended the year with a record Group-wide revenue of EUR 197 million, compared to EUR 109 million in 2021.
This achievement in a challenging period is above all the result of the team’s focus and professionalism, while the solid
performance of the Group as a whole allows us to move forward with confidence.
Targeted growth in customer numbers
The number of our customers has been growing significantly. In 2022, Novaturas Group served 267k passengers,
significantly closing the gap with the years 2018 and 2019, when the number of passengers was the highest ever. Comparing
2021 with 2022, the number of customers has increased by more than 55%. As we observe a targeted upward trend, we
aim to continue to deliver a balanced travel programme, with a supply that organically matches demand and responds
effectively to changes in the competitive environment.
Leadership in the tourism market
In October 2022, we launched early bookings for the summer season. We offered travellers a balanced and strategically
well thought-out selection of destinations for 2023 and a benefits package that includes the lowest price guarantee. Early
bookings for this summer exceeded last year’s figures for all destinations.
As usual, we focused on destinations that are the most popular among travellers and are not losing their leading positions,
such as Turkey and Greece In addition, we recorded a very strong growth in relatively new destinations which are being
chosen by an increasing number of travellers – for example, sales to Montenegro and Tunisia exceeded last year’s pre-
sales by 3 times.
Winter 2022 also witnessed a strong interest in exotic long haul destinations such as Thailand, Indonesia, Maldives, Sri
Lanka, Mauritius, Seychelles, Cuba, Mexico, Zanzibar, Dominican Republic and others. Seeing the growing demand for
such trips, we have increased our offering accordingly. We are also promising a greater focus on these destinations this
year, so we plan to further expand the diversity of our range
In fact, we are seeing a trend towards travellers planning their trips more and more in advance and choosing from a wider
range of destinations, resorts, hotels and rooms. In comparison, the average time from purchase to start of travel was two
months at the beginning of the year, while in the second half of the year it was approaching three months and continues to
increase steadily.
Achievements in aviation
In 2022, we maintained a very high load factor across the Group, with a well-balanced supply of tourism products and a
quick response to circumstances. On an annual average basis, it stood at 94.4%, and for the fourth quarter as a whole it
exceeded 96%.
In order to improve our customer experience and reduce our CO2 footprint, we replaced our aircraft in Estonia with a more
environmentally friendly, next-generation “game-changer” Boeing 737-8 in December 2022. We see this as a key step in
ensuring more sustainable travel. The new aircraft not only carries 5 per cent more passengers, but also consumes 12–15%
less fuel. This translates into a 16–18% reduction in CO2 emissions, resulting in ~5,000–6,000 tonnes of CO2 less per year.
Motivating staff and encouraging loyalty
Another important step in 2022 to motivate our team of professionals and strengthen loyalty was that we were the first in the
Lithuanian tourism market to introduce an option programme. All employees can participate by purchasing shares in the
Company for less than the market price and thus contribute to the sustainable growth of the Company’s share value.
We are applying the stock option programme in three areas: motivating top managers, giving all employees the opportunity
to receive their incentive bonus in stock options instead of cash, and increasing the loyalty of employees depending on the
period of service in the Company.
Recognition for challenge management
The success of Novaturas Group is reflected in a significant award. At the traditional Nasdaq Baltic Awards 2023, the
Company was recognised as the company that did the best job overcoming recent challenges and managing market change.
Novaturas won the title of “The Challenge of the Year” for its contribution to the development of Lithuanian and Baltic capital
markets.
NOVATURAS AB, Company code 135567698, A. Mickevičiaus st. 27, Kaunas, Lithuania
CONSOLIDATED ANNUAL REPORT FOR THE YEAR ENDED 31 December 2022
(all amounts are in thousand EUR unless otherwise stated)
4
Summing up a challenging year that has helped us to return to sustainable growth in 2022, we look forward to the
future with optimism and confidence. Even as the competitive environment intensifies, we are clearly maintaining
our leadership as the largest tour operator in the Baltic tourism market and we are evidently increasing the gap
with our closest competitors. This inspires us to continue to pursue ambitious goals and plan bold operational
steps.
Yours faithfully
Vitalij Rakovski
CEO
NOVATURAS AB, Company code 135567698, A. Mickevičiaus st. 27, Kaunas, Lithuania
CONSOLIDATED ANNUAL REPORT FOR THE YEAR ENDED 31 December 2022
(all amounts are in thousand EUR unless otherwise stated)
5
NOVATURAS AB, Company code 135567698, A. Mickevičiaus st. 27, Kaunas, Lithuania
CONSOLIDATED ANNUAL REPORT FOR THE YEAR ENDED 31 December 2022
(all amounts are in thousand EUR unless otherwise stated)
6
Core activities
Place of operation
The Company is the largest tour operator in the Baltic States. The Company was established in 1999, became the market
leader in the Baltics in 2004. The Company is proud of its strong position in the Baltic markets, well known trademark, high
customer loyalty, and long-term relationships with travel agencies and service providers, which enables the Company to
offer travellers a wide range of services for an attractive price.
Sales channels
Our products are accessible to people through various distribution channels. We work with over 400 travel agencies,
including the largest agencies of the Baltic States. Our points of sale are in the largest cities of Lithuania, Latvia and Estonia.
Investments are also made in the development of our e-commerce channel. Online trading is conducted through the
Company‘s websites and the Global Distribution Systems (GDS), an international platform.
Product range
Our product assortment is very wide: it includes various types of tours, prices and travel destinations. We can offer products
that are in line with the needs and expectations of different client groups. This enables us to maintain our positions in almost
all market segments and to effectively adapt to changing needs of travellers. Our product range includes summer and winter
holiday packages and sightseeing tours by coach and aircraft, with over 30 travel destinations all over the world including
the most popular South European Resorts and selected locations in Northern Africa, Middle East, Asia and Latin America.
We also sell flight tickets for the tours organised by the Company and offer hotel accommodation.
NOVATURAS AB, Company code 135567698, A. Mickevičiaus st. 27, Kaunas, Lithuania
CONSOLIDATED ANNUAL REPORT FOR THE YEAR ENDED 31 December 2022
(all amounts are in thousand EUR unless otherwise stated)
7
Tour packages. Offers consist principally of organisation of recreational tours by air. This includes recreational tours to
popular European summer resorts (Mediterranean Sea region), Northern Africa, Asia and South America, as well as popular
winter destinations in Europe – Italy and France. An entire service package is offered: flights, transport from the airport to
the hotel, accommodation, local guides who work round the clock and entertainment during the tour including all-day
excursions in summer.
Sightseeing tours by air. Sightseeing tours by air are medium- and long-distance tours including travel to Asia and South
America. Chartered and regular flights from Vilnius are organised. We offer flights, accommodation, and tourism by coach
and tour guides who accompany the tourists throughout the trip and inform them about the country, its attractions and
entertainment.
Sightseeing tours by coach. Sightseeing tours by coach are organised to attractions in Europe (including Poland,
Germany, France, Italy, Austria, Croatia and Greece). Tours by coach are organised from Lithuania. We offer travel by
coach, accommodation, trips to attractions by coach and tour guides who accompany travellers throughout the trip.
Holidays in the Baltics. Holiday and accommodation services in all the main resorts and major cities of the Baltic States.
Other products. Other products consist of flight tickets and ordering hotels online. We sell them to individual clients and
tour operators who often need seats in the most popular chartered flights.
Trademarks.
The diversity of our products also includes trademarks and product lines. The most important trademarks are Novaturas (in
Lithuania) and Novatours (in Latvia and Estonia) that generate the majority of income. Apart other trademarks, we control
ECO Travel, Sofa travel, and Novaturas Gold, a high-class product line.
Securities traded in regulated markets
Nasdaq Vilnius exchange is a domestic market for the Company’s shares. Since 21 March 2018, shares of the Company
are traded on two exchanges: Nasdaq Vilnius Stock Exchange and Warsaw Stock Exchange.
The Company’s stock symbol on Nasdaq Vilnius Stock Exchange is NTU1L and on the Warsaw Stock Exchange NTU.
Share class
Number of shares
Share par value, EUR
Total par value, EUR
Issue code
Ordinary shares
7,807,000
0.03
234 210
LT0000131872
Material events in 2022:
• 12/01/2022 After 22 years of operation AB Novaturas renewed its logo.
• 26/01/2022 Vitalij Rakovski becomes the new head of Novaturas Group.
• 08/02/2022 Novaturas Group Reports Results for 2021.
• 01/04/202 Enlight Research initiate coverage on AB Novaturas.
• 13/04/2022 Novaturas launches early booking sales to key destinations for the 2022-2023 winter season.
• 22/04/2022 Novaturas intends to take over the bookings of Kidy Tour travellers.
NOVATURAS AB, Company code 135567698, A. Mickevičiaus st. 27, Kaunas, Lithuania
CONSOLIDATED ANNUAL REPORT FOR THE YEAR ENDED 31 December 2022
(all amounts are in thousand EUR unless otherwise stated)
8
• 28/04/2022 Novaturas Group financials for the Q1 2022.
• 09/05/2022 Arūnas Žilys becomes the new CFO of Novaturas Group.
• 24/05/2022 AB Novaturas annual information for the year 2021.
• 18/08/2022 Novaturas group financials for 6M 2022.
• 11/10/2022 AB Novaturas launches early bookings for summer 2023.
• 17/11/2022 Novaturas group financials for 9M 2022.
• 21/11/2022 Novaturas team welcomes Rasa Barisienė, the new Sales Director.
• 30/12/2022 Novaturas offers all employees a stock option programme.
Material events in 2023 (from 01/01/2023 to 30/04/2023):
• 13/02/2023 At the traditional Nasdaq Baltic Awards 2023, Novaturas Group was recognised as the company
that did the best job overcoming recent challenges and managing market change.
• 27/02/2023 Vitalij Rakovski, CEO of Novaturas Group, introduced preliminary results for the year 2022 to
investors and analysts.
• 13/03/2023 Vygantas Reifonas becomes the new CFO of Novaturas Group.
• 20/04/2023 AB Novaturas strategy for 2023-2025 was introduced to investors.
NOVATURAS AB, Company code 135567698, A. Mickevičiaus st. 27, Kaunas, Lithuania
CONSOLIDATED ANNUAL REPORT FOR THE YEAR ENDED 31 December 2022
(all amounts are in thousand EUR unless otherwise stated)
9
Financial information
The Group’s result for 2022:
• Sales amounted to EUR 197m and were 81% higher compared with the same figure in 2021.
• Gross profit was EUR 19m, which is 41.5% more compared with the ratio recorded in 2021.
• Operating expenses reached EUR 19.3 million and were 73% higher than in 2021.
• EBITDA was positive and amounted to EUR 481k, where in 2021 it amounted to EUR 2.6m.
• In 2022, the Group incurred net loss of EUR 818k. In 2021, the Group earned EUR 909k of net profit.
• In 2022, Novaturas Group served 267k passengers. Comparing 2021 with 2022, the number of customers has
increased by more than 55%.
Main indicators of the Group
Financial indicators
2022
2021
Change, %
Revenue
196,676
108,995
80.4%
Gross profit
19,088
13,489
41.5%
EBITDA
481
2,553
-81.2%
Operating profit (EBIT)
222
2,403
-90.8%
Profit before taxes
(755)
938
-180.5%
Net profit for the period
(818)
909
-190.0%
Relative indicators/ratios
2022
2021
Change
Number of ordinary registered shares
7,807,000
7,807,000
-
Earnings per share (EUR)
(0.10)
0.12
-0.2
Gross profit margin (%)
9.7
12.4
-2.7 pp
EBITDA margin (%)
0.2
2.3
-2.1 pp
EBIT margin (%)
0.1
2.2
-2,1 pp
Profit before taxes margin (%)
(0.4)
0.9
-1.3 pp
Net profit margin for the period (%)
(0.4)
0.8
-1.2 pp
Return on assets (ROA) (%)
(1.6)
1.7
-3.2 pp
Debt / equity ratio (%)
61.9
94.9
-35.1 pp
Capital / assets ratio (%)
25.5
33.8
-7.2 pp
Actual profit tax rate
(8.3)
3.1
-11.4
Total liquidity ratio
0.73
0.75
-0.02
Tour packages accounted for the largest share in both sales and earnings. Sightseeing tours by coach and air account for
a small part. Other sales income increased, however, its impact on profit was not significant.
Geographical information and other sales information
In 2022, the Company’s core activity was tour organisation and sale of tour packages through a retail travel agency network,
internal sales channels (own retail sale offices, website, sale of flight tickets through GDS). Tours provided by Novaturas are
sold by more 400 travel agencies in the Baltic States. E-commerce sales take place through websites of the Group
companies of Novaturas. There were 3.6m unique visitors to the Company’s website in 2022, which is a 38.5% increase
compared with 2021 (2.6m of unique visitors).
The Company also sells tickets for its charter flights through GDS. This means that these tickets are available to agents
worldwide, and people can acquire these tickets through most popular ticket distribution platforms.
Income structure by sales channels:
2022, %
2021, %
Change
Travel agencies
69.1
69.1
-
The Company’s travel agencies
13.7
11.1
+2.6 pp
Online sales
16.1
17.4
-1.3 pp
GDS
1.1
2.4
-1.3 pp
Total
100.0
100.0
NOVATURAS AB, Company code 135567698, A. Mickevičiaus st. 27, Kaunas, Lithuania
CONSOLIDATED ANNUAL REPORT FOR THE YEAR ENDED 31 December 2022
(all amounts are in thousand EUR unless otherwise stated)
10
Number of clients serviced in by country of sale (‘000 passengers):
2022
2021
Change, %
Lithuania
141.1
87.3
+61.6%
Latvia
55.6
30.0
+85.2%
Estonia
70.3
54.7
+28.5%
Other
-
-
-
Total
266.9
172.0
+55.2%
Tour packages was the main product of the Company, as was the case in previous years. In 2022, compared to 2021, the
fast-growing categories were sightseeing tours by coach and aircraft (increased 11 and 4 times, respectively). Below is the
data on customers served by product category (in '000 passengers).
2022
2021
Change, %
Flight packages
215.5
136.0
+58.5%
Sightseeing tours by bus
3.4
0.3
+1 033.3%
Sightseeing tours by air
1.3
0.3
+333.3%
Other (sale of flight tickets and hotel bookings)
46.7
35.4
+31.9%
Total
266.9
172.0
+55.2%
Turkey remained the main summer holiday destination, which was booked by more than 40% of all Novaturas customers.
Unlike 2021, 2022 was an active skiing holiday season, and we also recorded a higher demand for long-haul destinations.
2022, %
2021, %
Change
Turkey
40.8
36.9
+3.9p.p.
Greece
13.6
19.3
-5.7p.p.
Egypt
16.3
20.1
-3.8p.p.
Bulgaria
3.6
6.9
-3.3p.p.
Montenegro
5.8
5.3
+0.5 p.p.
Spain (incl. Canary islands)
7.1
7.5
-0.4 p.p.
Ski destinations
2.2
-
+2.2 p.p.
Remote countries
2.7
0.7
+2.0 p.p.
Other destinations
7.9
3.3
+4.6 p.p.
Total
100.0
100.0
-
Seasonality of the income by months:
0
5
10
15
20
25
30
1 2 3 4 5 6 7 8 9 10 11 12
Mln. Eur
Group’s income by month
2022 2021 2020 2019
NOVATURAS AB, Company code 135567698, A. Mickevičiaus st. 27, Kaunas, Lithuania
CONSOLIDATED ANNUAL REPORT FOR THE YEAR ENDED 31 December 2022
(all amounts are in thousand EUR unless otherwise stated)
11
Information about related party transactions
Related party transactions are presented in the Explanatory Notes to the financial statements.
Risk management
The Group’s main business partners risk
Pursuant to contracts with the key business partners, the Group is obliged to make advance payments for services ordered
(e.g. charter airlines, coach companies or hotel operators). Thus, potentially not fulfilling or not properly fulfilling contractual
obligations toward the Group and/or insolvency of the Group’s key business partners, including primarily toward charter
airlines, may have a material adverse effect on the Group's operations, its financial condition and results of operations. In
order to mitigate the risk Group diversifies partners and works with several aviation partners simultaneously also in big
volume destinations works with several hotel providing partners.
Credit risk
The Group’s credit risk is relatively low as payment is requested before the tour. In addition, credit limits have been granted
to travel agencies through which the majority of sales takes place. The main purpose of these credit limits is to ensure timely
payments. If they exceeded the credit limit, the Company’s reservation system automatically blocks the sales.
The Group does not provide guarantees for other parties’ liabilities. The maximum exposure to credit risk is represented by
the carrying amount of each financial asset, including derivative financial instruments, if any, in the statement of financial
position. Therefore, in the opinion of the Company’s management, maximum risk is equal to the sum of trade debtors and
other accounts receivable less impairment losses recognised in the Statement of Financial Position as of its date.
Interest rate risk
A larger part of the Group’s borrowings consists of loans subject to a fixed interest rate, whereas the Company’s credit line
is related to the variable interest rate, the future use of which depends on future financial circumstances. In view of this, the
Group does not use interest rate swaps and includes the relevant interest rate risk in the sales price of products.
Foreign exchange risk
The vast majority of the Group’s sales revenue is received in Euros, but part of the services that make up the cost, the most
significant part of which is flights, are acquired in US dollars.
To mitigate both aviation fuel volatility and aviation fuel related foreign exchange risk, as of 2014, the Group uses a hedging
accounting treatment implemented via fuel futures (or options) and forward foreign exchange transactions, which ensure the
margin hedge for travel products sold against fuel price and currency volatility. These derivatives are subject to hedge
accounting.
Liquidity management
The Group pursues a policy of maintaining a sufficient amount of cash and cash equivalents or to secure financing by means
of credit lines in order to fulfil its obligations under strategic plans. Liquidity risk is managed by planning the Group’s cash
flows.
As at 31 December 2022, the Group complied with all financial and non-financial covenants, under the financing agreements
of the Group companies with banks and other credit providers.
Capital management
The main purpose of capital management is to ensure that the Group meets external capital requirements and maintains
correct capital indicators so that the Group’s activities are sound and shareholder value is maximised (under IAS 1, “capital”
corresponds to equity disclosed in financial statements).
The Group manages the structure of its capital and changes it having regard to changes in the economic environment and
operating risk. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders,
return capital to shareholders and issue new shares.
In accordance with the Law on Companies of the Republic of Lithuania, the Company’s equity must account for at least 50%
of its authorised capital, which consists of share capital and share premiums. The Company also complies with requirements
regarding equity to asset ratio from the credit providers. As at 31 December 2022, the Company complied with these
requirements.
The Company assesses capital by means of the debt/equity ratio. The capital includes ordinary shares, reserves and
retained earnings attributable to the equity shareholders of the parent company.
Neither the Group nor the Company conduct any research and development.
NOVATURAS AB, Company code 135567698, A. Mickevičiaus st. 27, Kaunas, Lithuania
CONSOLIDATED ANNUAL REPORT FOR THE YEAR ENDED 31 December 2022
(all amounts are in thousand EUR unless otherwise stated)
12
Plans and projections
The main objectives for 2023 are the following:
• to maintain the position of a market leader in the Baltic States by promoting new or returning destinations and long-
haul tours;
• to increase focus on digitalisation of services;
• to further improve traveller experience and to develop positive holiday planning habits by offering early booking
and other services;
• to maximise profitability through strategically-grounded pricing algorithms and targeted hedging derivatives.
NOVATURAS AB, Company code 135567698, A. Mickevičiaus st. 27, Kaunas, Lithuania
ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT FOR THE YEAR ENDED 31 December 2022
(all amounts are in thousand EUR unless otherwise stated)
13
Environmental, Social and Governance Report
Governance Report
Prior to the decision of the General Meeting of Shareholders of 30 June 2020, the management bodies of the Company were: the
General Meeting of Shareholders, the Supervisory Council, the Board and the head of the Company – the Chief Executive Officer.
On 30 June 2020, the General Meeting of Shareholders decided to reorganize the management structure of the Company by
relinquishing the Supervisory Council and transferring its functions to the newly formed Board of the Company. As from 30 June
2020, the Company’s management bodies include the General Meeting of Shareholders, the Board and the head of the Company
– the Chief Executive Officer.
Decisions of the general meeting of shareholders taken within its remit stated in the Articles of Association are binding upon the
shareholders, the Board, the Managing Director and other employees of the Company. Shareholders who were recorded as such
as of the end of the record date are entitled to attend the general meeting of shareholders. The record date for the purposes of the
general meeting of shareholders is the 5th (fifth) working day prior to the general meeting of shareholders or the 5th (fifth) working
day prior to any adjourned general meeting of shareholders. A person taking part in the general meeting of shareholders and
entitled to vote must produce a personal identity documents. A person who is not a shareholder must produce, in addition to the
personal identity document, a document evidencing his/her right to vote at the general meeting of shareholders.
According to the Articles of Association of the Company, until 30 June 2020, the Supervisory Council consists of five members
elected for the term of office of three years and acting jointly as a supervisory body. The Council represented the shareholders and
performed supervisory and control functions. Members of the Supervisory Council were elected by the general meeting of
shareholders according to provisions of the Republic of Lithuania Law on Companies. Two out of the five members were
independent. The chairperson is elected by the members from among themselves. The Council had two committees: the Audit
Committee and the Remuneration and Appointments Committee. Their members were elected for the term of office of three years
from among the members of the Supervisory Council. All the three members of the Audit Committee possessed degrees and
experience in the field of finances and economics; two members of the committee were independent.
In accordance with the Articles of Association of the Company, until 30 June 2020, the Board consisted of four members elected
for the term of office of three years and acting jointly as a management body of the Company. Members of the Board were elected
by the Supervisory Council according to a statutory procedure. The Board elects the Chair of the Board from among its members.
As from 30 June 2020, the restructured Board was elected by the General Meeting of Shareholders under new version of the
Articles of Association of the Company. The Board consists of five members elected for the term of office of four years and acting
jointly as a management body of the Company. Two of five Board’s members are independent, and remaining three represent the
interests of the shareholders. The Board elects the Chair of the Board from among its members. A newly elected Board of the
Company performs supervisory, control and strategy development functions. The Board appoints and recalls the Chief Executive
Officer, sets his/her remuneration and other terms of employment, approves job regulations, provides incentives and imposes
sanctions.
The Managing Director is a single-handed management body of the Company responsible for organizing routine activities of the
Company.
The Company complies, in substance, with the corporate governance recommendations provided by Nasdaq Vilnius Stock
Exchange and the best practice recommendations provided by the Warsaw Stock Exchange. A detailed list of the recommendations
implemented in the Company’s activities, together with explanations, is given below in the Governance Report. On its website
www.novaturasgroup.com, the Company also publishes a list of recommendations that are not complied with in full or in part.
Issued capital
Issued capital of the Company amounts to EUR 234,210 and consists of 7,807,000 ordinary registered shares of EUR 0.03 par
value each. The number of the shares entitling to vote at the general meeting of shareholders is 7,807,000.
Shareholders
Number of shares
Share of authorised capital and
total number of votes, %
Willgrow (former ME Investicija)
779,900
9.99
Ugnius Radvila
740,702
9.49
Moonrider OU
543,346
6.96
Rytis Šūmakaris
535,278
6.86
Vidas Paliūnas
535,278
6.86
Rendez Vous OU
524,671
6.72
Rondam AS
356 489
4.57
Other
3,791,336
48,55
Total
7,807,000
100
NOVATURAS AB, Company code 135567698, A. Mickevičiaus st. 27, Kaunas, Lithuania
ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT FOR THE YEAR ENDED 31 December 2022
(all amounts are in thousand EUR unless otherwise stated)
14
According to the data as of the record date (17 May 2022) of the last general meeting of shareholders that was held on 24 May
2022, the Company has 6,178 shareholders. According to the Company, it had 6,064 shareholders as at 31 December 2022.
Shareholders rights
Neither shareholder of the Company has any special right of control. All the shareholders have equal rights. As at 31 December
2022, the number of the shares entitling to vote at the general meeting of shareholders is 7,807,000. An ordinary registered share
grants one vote at the general meeting of shareholders of the Company.
The Company has no information about any agreements between the shareholders that would restrict the voting rights attached to
the shares. All IPO lockup periods expired.
Information about trading in the Company’s securities
7,807,000 ordinary registered shares of Novaturas AB (ISIN code LT0000131872) are included in the Official Trading List of Nasdaq
Vilnius Stock Exchange (symbol NTU1L) and the Warsaw Stock Exchange (symbol NTU, ISIN code LT0000131872).
Information about trading in the shares of Novaturas AB from 28 December 2018 until 31 December 2022 in Nasdaq Vilnius Stock
Exchange (Lithuania):
Currency
Opening
price
Maximum
price
Minimum
price
Closing
price
Average
price
Traded
quantity,
units
Trading
volume, EUR
2021
EUR
2.94
4.90
2.70
3.84
3.17
3,103,457
12,045,114
2022
EUR
3.82
4.17
2.50
2.92
3.52
1,436,627
5,062,964
As at 31 December 2022, the Company’s market capitalisation was EUR 22.8M.
NOVATURAS AB, Company code 135567698, A. Mickevičiaus st. 27, Kaunas, Lithuania
ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT FOR THE YEAR ENDED 31 December 2022
(all amounts are in thousand EUR unless otherwise stated)
15
Information about trading in the shares of Novaturas AB from 4 January 2019 until 31 December 2022 in GPW Main Market
(Poland):
Currency
Opening
price
Maximum
price
Minimum
price
Closing
price
Average
price
Traded
quantity,
units
Trading
volume, PLN
2021
PLN
12.40
25.00
11.80
18.20
17.43
53,898
937,609
2022
PLN
18.20
18.80
11.90
13.80
16.15
14.190
229,198
As at 31 December 2022, the Company’s market capitalisation was PLN 108m.
Information about own shares held by the Company
The Company has not acquired any own shares. The Company has not acquired any own shares from the Company’s
management.
Dividend
In 2018, the Board approved the dividend payment policy according to which dividend should account for 70–80% of the profit
earned by the Company. Due to the impact of the COVID-19 pandemic that started in 2020 and the associated additional restrictions
on the financing of the Company’s activities, during the appropriation of the Company’s profit for 2021 and 2022, the General
Meeting of Shareholders adopted a decision not to pay dividends.
Procedure for amending the Articles of Association
The Articles of Association of the Company are amended according to a procedure established in the Law on Companies by
decision of the general meeting of shareholders adopted by a 2/3 majority vote of shareholders attending the meeting. Upon
adoption of such decision, the text of the amended Articles of Association is signed by a person authorised by the General Meeting
of Shareholders.
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
5,000
0
5
10
15
20
25
30
35
40
45
1/4/2019
3/4/2019
5/4/2019
7/4/2019
9/4/2019
11/4/2019
1/4/2020
3/4/2020
5/4/2020
7/4/2020
9/4/2020
11/4/2020
1/4/2021
3/4/2021
5/4/2021
7/4/2021
9/4/2021
11/4/2021
1/4/2022
3/4/2022
5/4/2022
7/4/2022
9/4/2022
11/4/2022
PLN/day
PLN/unit
Turnover and price (PLN) on Warsaw Stock Exchange
NOVATURAS AB, Company code 135567698, A. Mickevičiaus st. 27, Kaunas, Lithuania
ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT FOR THE YEAR ENDED 31 December 2022
(all amounts are in thousand EUR unless otherwise stated)
16
Procedure for the election and replacement and Powers of the Board Members
Members of the Board are elected and replaced by decision of the General Meeting of Shareholders. Members of the Board analyse
and evaluate organisation of the Company‘s activities, financial position, financial statements, annual reports, interim reports and
exercise other powers granted to them under the law and the Articles of Association.
On 30 June 2020, the General Meeting of Shareholders revoked the entire Board, and appointed a new Board composed of: Vidas
Paliūnas, Ugnius Radvila, Janek Pohla, Virginijus Lepeška and Andrius Jurkonis.
Janek Pohla resigned from the position of a Member of the Board of the Company as of 17 December 2021.
On 24 May 2022, the General Meeting of Shareholders appointed Rytis Šūmakaris as the member of the Board (for the remaining
term of the current Board).
Activities of the Company’s management bodies in 2022
Activities of the Board
Seventeen meetings of the Board were held in 2022. All of them had the quorum required under legal acts. Matters
considered/approved at the meetings of the Board: the organisation of the Board’s activities, the Company’s performance, the
Company’s strategy, organisational structure, budget, investment projects, etc.
The Board’s meetings were chaired by Virginijus Lepeška, chairperson of the Board.
Numbers of meetings in which members of the Board took part are shown in the table below:
Board meetings
Total number of meetings
17
Virginijus Lepeška
17
Ugnius Radvila
17
Vidas Paliūnas
17
Andrius Jurkonis
17
Rytis Šūmakaris
7
Three of the Board’s members represent the shareholders and the other too, namely, Franz Leitner and Piotr Nowjalis are
independent members.
The Board members as at 31 December 2022:
Full name
Duties in the
Board
Position held
Number of shares
held
Start of
term office
Ugnius Radvila
Member of the
Board
-
740,702
30/06/2020
Vidas Paliūnas
Member of the
Board
Member of the Board of UAB Verslo
centras 32
Managing Director of UAB Optimistai
535,278
30/06/2020
Rytis Šūmakaris
Member of the
Board
UAB Marių Namai – Managing Director
and Members of the Board
535,278
25/05/2022
Andrius Jurkonis
Member of the
Board
(independent
member)
Manager of the investment fund Axia
Capital Fund; manager of Farmacijos
kapitalas UAB, manager of New Pharma
CEE, manager of Privataus kapitalo
investicijos UAB, and manager and sole
shareholder of New retail LV UAB
-
30/06/2020
Virginijus
Lepeška
Member of the
Boar (independent
member)
consultant and chairman of the Board of
Organizacijų vystymo centras UAB;
consultant and Chairman of the Board
OVC mokymai UAB, consultant, the
Board member Biseris UAB; the Board
member Lewben UAB
-
30/06/2020
NOVATURAS AB, Company code 135567698, A. Mickevičiaus st. 27, Kaunas, Lithuania
ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT FOR THE YEAR ENDED 31 December 2022
(all amounts are in thousand EUR unless otherwise stated)
17
Virginijus Lepeška
Acts as chairman of the Board and consultant of the management consulting and training
company OVC Consulting. Has accumulated extensive experience in organizational
consulting, corporate governance, strategic management. Since 2003, he has been a
member of the Board and the Supervisory Board in various companies. Virginijus Lepeška
has a doctorate in social sciences (psychology) from Vilnius University. He is currently a
charman of the Board of the Kosmelita UAB and Organizacijų vystymo centras UAB. He is
also a member of the board of the Biseris UAB, Lewben Holdings UAB and Child Support
Center. Has no shares in the Company.
Ugnius Radvila
has been with the Company since its establishment. In 1999–2011, he was the Director of
the Vilnius Branch; he has been a consultant of the Company since 2011. In 1995–2004, he
was the Tourism Manager with Interservis kelionių agentūra UAB. In February 2018, he
became the member of the Supervisory Council. He graduated from the Faculty of
Communications of Vilnius University with a Master‘s Degree in Communications and
Information (study programme “International Communication”). He holds 9.49% of shares in
the Company.
Vidas Paliūnas
took part in the formation of Novaturas UAB of three travel agencies, one of them being
DELTA travel agency of which he was the Chief Executive Officer. In 2009–2018, he was a
member of the Board of Novaturas, and became a member of the Supervisory Council in
February 2018. He received a degree in Information Technologies at Chemnitz University of
Technologies in Germany. He holds 6.86% of shares in the Company.
Andrius Jurkonis
is a manager of the investment fund Axia Capital Fund and certified financial analyst. He has
accumulated many years of experience in management positions at Euroapotheca, VST,
Swedbank. Mr Jurkonis has a bachelor's degree and a master's degree in economics from
Vilnius University. He is currently the director of New Pharma CEE, a partner of Blue flight
UAB, Gusania UAB. Has no shares in the Company.
Rytis Šūmakaris
is one of the co-founders of AB Novaturas and supporting partner since 2001. During the
18 years within the company Mr. Šūmakaris has contributed significantly to building
Novaturas business, expansion in the Baltics, securing leading positions in all three
markets. Mr. Šūmakaris also owns accommodation service company Nidos Namai. He
holds 6.86% of shares in the Company.
NOVATURAS AB, Company code 135567698, A. Mickevičiaus st. 27, Kaunas, Lithuania
ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT FOR THE YEAR ENDED 31 December 2022
(all amounts are in thousand EUR unless otherwise stated)
18
Remuneration Policy of the Company
Reviewed, updated and approved at the General Meeting of Shareholders on 24 May 2022
The updated version of the Remuneration Policy introduced the following significant changes compared to the previous version: (i)
the Company no longer has a Remuneration and Nomination Committee which performs the functions of supervision and control
of the Remuneration Policy; (ii) considering that the Company no longer has a Supervisory Board, changes are made to the
Remuneration Policy in this regard; (iii) the terms and forms of payment of the variable remuneration are specified.
Company’s remuneration principles
▪ Linking remuneration to performance and aligning with shareholders’ interests: in making remuneration-related decisions,
the Company focuses on long-term, risk-adjusted performance and rewards performance that generate sustained value
for the Company.
▪ “Shared success” culture encouragement: teamwork should be encouraged and rewarded to foster a “shared success”
culture. Contributions are considered across the Group, within business units, and at individual level when evaluating an
employee’s performance.
▪ Attracting and retaining top talents: competitive and reasonable remuneration should help attract and retain the best talent
to grow and sustain the Group’s business.
▪ Integrating risk management and remuneration: management bodies of the Group should generate honest, fair and
objective evaluations and identify individuals responsible for meaningful risk-related events and their accountability.
▪ Good corporate governance: the Group’s good corporate governance is fostered by oversight by Board of the executive
remuneration scheme, including defining the Group’s remuneration principles, reviewing and approving the Group’s
overall incentive remuneration pools.
▪ Transparency with shareholders: to provide shareholders with enough information and context to assess the Group’s
schemes and practices, and their effectiveness, the Company discloses to the public the essential terms and results of
the remuneration scheme applied.
▪ Transparency with employees: the remuneration and the set of performance, competence and qualifications used to
determine the remuneration of the employee is disclosed to each employee.
▪ Flexibility: in the event of the need to hire or retain an employee who has a significant impact on the Group’s operations
or to manage the risks arising from the change of employees, decisions may be made by the Group companies applying
exceptions to this Remuneration Policy, however, such exceptions and the reasons thereof must be disclosed to the Board
without delay.
Measures to avoid conflicts of interest
▪ Some members of the Board are independent and provide both independent oversight and control of the Company’s
Remuneration Policy and pay practices.
▪ Decisions on individual remuneration of Employees are made by the head of the respective Group company. The
remuneration of the CEO and CFO is approved by the Board of the Company. The Board of the Company also reviews
the remuneration of the top level management and limits thereof, as necessary.
Remuneration structure
The Group companies ensure for their employees a competitive and fair remuneration for results achieved by the Company and
the employee individually. The purpose of the remuneration policy is to retain existing and attract new employees to ensure
business success.
Main components of remuneration
▪ Fixed part of remuneration (PAD) – is the monthly salary specified in the employment contract, i.e. basic part of wage.
PAD and its amount is determined in the Employees’ employment contracts and is paid in accordance with the procedures
established by law. Members of the elected bodies who have not concluded employment contracts with the Company
may receive remuneration in the form prescribed by legal acts and in accordance with service provision contracts.
o Typically, PAD for Employees of Group companies are reviewed and determined once a year. PAD for the
Employees of the Company is determined by the CEO. PAD for the Employees of other Group companies is
determined by the head of the Group company.
o PAD is determined in accordance with the law and the internal procedures of the companies.
o PAD for the Company’s CEO and CFO is established by the Company’s Board.
o PAD is determined considering the level of responsibility, professional experience, personal qualities required
for the position, market conditions.
▪ Variable part of remuneration (KAD) – annual, quarterly or monthly bonus or share options. KAD is an additional
remuneration for the employee which is granted and paid at the initiative of the Company as a means of promoting and
motivating employees. KAD can be short-term (bonuses, supplements for additional project) and long-term (share
options). The purpose of KAD is to motivate employees for their good performance, for good performance or results of
Company or its department or all the Group. KAD may form significant part of the annual PAD and, in exceptional cases,
may exceed the PAD for top management.
o Short – term incentives. Annual bonuses are paid to top management based on the achievement of Group’s net
profit (or EBITDA) result (or other profitability indicator) and/or considering the change in the share price. The
Board of the Company determines the specific results to be achieved by top-management, award criteria and
the procedures for calculating bonuses. Bonuses are paid to other Employees depending on the Group’s net
NOVATURAS AB, Company code 135567698, A. Mickevičiaus st. 27, Kaunas, Lithuania
ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT FOR THE YEAR ENDED 31 December 2022
(all amounts are in thousand EUR unless otherwise stated)
19
profit (or EBITDA) result (or other profitability indicator) and other objectively identifiable and measurable
indicators. The specific results to be achieved and the procedure for calculating bonuses and award criteria is
determined by CEO of the Company. Board members may be paid royalties in accordance with procedures
established by law.
o Long-term incentives. Share options are granted to top management, employees and members of the Board of
the Company in accordance with the Rules for Granting Shares approved by the Company’s shareholders’
meeting and published on the Company’s website. The purpose of the rules for granting shares of the Company
and granting the share options is to safeguard the business strategy, long term goals and interests of the Group
by providing additional measures to motivate and retain professional, qualified and competent team with diverse
knowledge and experience and to encourage employees of the Group, Board members to contribute to the
success of the Group, to increase the financial and property interests of employees and to promote long-term
work in the Group, thus increasing the value of the Group and aligning long term interests of themselves and the
Group.
▪ Other monetary remuneration (KPA) – supplements or other benefits; Employee may be paid a supplement for additional
work, performance of additional functions not provided for in their employment contract and/or job description, or
performance of additional tasks. Supplements is determined by the order of CEO of the Company or the head of the
Subsidiary. The supplement is not included in the amount of PAD set for the employee.
▪ Other benefits (KN) are benefits provided to the employee that have a financial value but do not involve monetary bonuses,
i.e. non-monetary benefits. The package of indirect financial benefits is selected taking into account the financial position
and strategy of the Group or its individual company, as well as the principles of fairness, equality and transparency and
the situation in the labour market.
Severance payments and non-competition
In accordance with the national legal acts of the respective company of the Group, employees might be entitled to severance
payments upon termination of their employment (except for certain termination grounds, such as on ones own will, due to the
reasons attributable to the employees fault, etc.).
Group companies do not normally have prior arrangements for severance pay, supplementary pensions or early retirement
arrangements, but in exceptional cases and subjects to the decisions of the relevant competent authority such arrangements are
possible. The maximum possible severance pay for an employee is the amount of his/her average salary for 12 (twelve) months,
unless the Board decides to grant a higher severance pay in a specific case. No termination benefits are paid upon resignation or
removal of the respective member of the Board. Non-competition agreements may be entered with the top management on the
initiative of the Company.
Disclosure
▪ This Remuneration Policy is available on the website of the Company https://www.novaturasgroup.com/, and a paper
version will be made available upon the request to the Company.
▪ The Remuneration Policy is part of the Company’s policies and procedures and as such the main principles are available
to all employees. The employees are regularly informed about their remuneration, criteria used to measure performance
and the link between performance and pay.
Information on share options signed during 2022
Units
Grant date
Vesting date
End of
exercise
period
Share-option schemes
Share options (Scheme II)
10,000
27/04/2022
27/04/2025
27/05/2025
Share options (Scheme II)
6 000
22/12/2022
22/12/2025
22/01/2026
Share options (Scheme III)
17 400
22/12/2022
22/12/2025
22/01/2026
33,400
As part of the Company’s motivational system, the Board of the Company awarded 16,000 units of share options to top-level
management for which Option Scheme II agreements were concluded with the executives in December 2022. On the basis of the
Board decision dated 25 January 2022, 27 April 2022 is deemed to be the grant date of 10,000 units of share options, for which
agreement was signed in December 2022. The remaining 6,000 units were granted on 22 December 2022. In addition, as part of
the implementation of the Company’s incentive scheme, the grant of share options to employees, the amount of which depends
on the time service in the Company or its subsidiary, was approved on 29 November 2022. In the implementation of this decision,
option agreements (Scheme III) were concluded with Group employees in December 2022 for 17,400 units of share options.
With regard to both schemes, each vested option will entitle the option holder to purchase one share in the Company at nominal
value. This right will arise if the option holder retains the option until the vesting date and it can be exercised before the end of the
exercise period. The share option vesting condition is subject to a number of restrictions, particularly the existence of an
employment relationship between the option holder and the Group company on the vesting date.
NOVATURAS AB, Company code 135567698, A. Mickevičiaus st. 27, Kaunas, Lithuania
ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT FOR THE YEAR ENDED 31 December 2022
(all amounts are in thousand EUR unless otherwise stated)
20
Information about payments to members of management bodies
Remuneration
paid, EUR’000
EUR
Remuneration for
work in a
management
and/or supervisory
body, EUR
Dividends,
EUR’000
EUR
Other
payments,
EUR’000
EUR
Members of the Board
Virginijus Lepeška
-
52.5
-
-
Ugnius Radvila
-
63.5
-
-
Vidas Paliūnas
-
63.5
-
-
Andrius Jurkonis
63.5
Rytis Šūmakaris
11.4
CEO
Vitalij Rakovski
148.2
-
-
-
Auditor
Deloitte Lietuva UAB, a member of Deloitte network, carried out an audit of the Company‘s consolidated and separate statements
of financial position as at 31 December 2019, 31 December 2020, 31 December 2021 and 31 December 2022, and related profit
and loss statements, comprehensive income statements, statements of changes in equity and cash flow statements for the years
then ended, together with the explanatory notes including a summary of main accounting policies.
The ordinary general meeting of shareholders held on 30 April 2021 elected Deloitte Lietuva UAB as the auditor of the Company
for conducting an audit of the Company‘s annual consolidated and separate financial statements and evaluating the consolidated
annual report for 2021 and 2022. The shareholders authorised the Managing Director of the Company to conclude agreements on
audit services stipulating the auditor’s fee for one year not exceeding EUR 86,000 (eighty six thousand euros) exclusive of VAT.
Global Deloitte network covers member companies operating in 150 countries and territories and providing audit, tax consultancy
and financial advice services to both public and private sectors in various areas of business.
Apart from audit services, the Company and Deloitte Lietuva UAB agreed on the assistance in the preparation of internal pricing
documentation of the Company.
NOVATURAS AB, Company code 135567698, A. Mickevičiaus st. 27, Kaunas, Lithuania
ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT FOR THE YEAR ENDED 31 December 2022
(all amounts are in thousand EUR unless otherwise stated)
21
Disclosure of Compliance with the Corporate Governance Code for the Companies Listed on
NASDAQ OMX Vilnius
The Company, acting in compliance with Article 12 (3) of the Law of the Republic of Lithuania on Securities and
paragraph 25.4 of the Listing Rules of AB Nasdaq Vilnius, hereby discloses how it complies with the Corporate
Governance Code for the Companies listed on Nasdaq Vilnius as well as its specific provisions or
recommendations. In case of non-compliance with this Code or some of its provisions or recommendations, the
specific provisions or recommendations that are not complied with must be indicated and the reasons for such non-
compliance must be specified. In addition, other explanatory information indicated in this form must be provided.
PRINCIPLES/RECOMMENDATIONS
YES/NO/NOT
RELEVANT
COMMENT
NOVATURAS AB, Company code 135567698, A. Mickevičiaus st. 27, Kaunas, Lithuania
ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT FOR THE YEAR ENDED 31 December 2022
(all amounts are in thousand EUR unless otherwise stated)
22
Principle 1: General meeting of shareholders, equitable treatment of shareholders, and shareholders’
rights
The corporate governance framework should ensure the equitable treatment of all shareholders. The
corporate governance framework should protect the rights of shareholders.
1.1. All shareholders should be provided with access to the information
and/or documents established in the legal acts on equal terms. All
shareholders should be furnished with equal opportunity to participate
in the decision-making process where significant corporate matters are
discussed.
YES
1.2. It is recommended that the company’s capital should consist only
of the shares that grant the same rights to voting, ownership, dividend
and other rights to all of their holders.
YES
1.3. It is recommended that investors should have access to the
information concerning the rights attached to the shares of the new issue
or those issued earlier in advance, i.e. before they purchase shares.
YES
1.4. Exclusive transactions that are particularly important to the
company, such as transfer of all or almost all assets of the company that
in principle would mean the transfer of the company, should be subject
to approval of the general meeting of shareholders.
YES
1.5. Procedures for convening and conducting a general meeting of
shareholders should provide shareholders with equal opportunities to
participate in the general meeting of shareholders and should not
prejudice the rights and interests of shareholders. The chosen venue,
date and time of the general meeting of shareholders should not prevent
active participation of shareholders at the general meeting. In the notice
of the general meeting of shareholders being convened, the company
should specify the last day on which the proposed draft decisions should
be submitted at the latest.
YES
1.6. With a view to ensure the right of shareholders living abroad to
access the information, it is recommended, where possible, that
documents prepared for the general meeting of shareholders in advance
should be announced publicly not only in Lithuanian language but also
in English and/or other foreign languages in advance. It is recommended
that the minutes of the general meeting of shareholders after the signing
thereof and/or adopted decisions should be made available publicly not
only in Lithuanian language but also in English and/or other foreign
languages. It is recommended that this information should be placed on
the website of the company. Such documents may be published to the
extent that their public disclosure is not detrimental to the company or
the company’s commercial secrets are not revealed.
YES
1.7. Shareholders who are entitled to vote should be furnished with the
opportunity to vote at the general meeting of shareholders both in
person and in absentia. Shareholders should not be prevented from
voting in writing in advance by completing the general voting ballot.
YES
NOVATURAS AB, Company code 135567698, A. Mickevičiaus st. 27, Kaunas, Lithuania
ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT FOR THE YEAR ENDED 31 December 2022
(all amounts are in thousand EUR unless otherwise stated)
23
1.8. With a view to increasing the shareholders’ opportunities to
participate effectively at general meetings of shareholders, it is
recommended that companies should apply modern technologies on
a wider scale and thus provide shareholders with the conditions to
participate and vote in general meetings of shareholders via electronic
means of communication. In such cases the security of transmitted
information must be ensured and it must be possible to identify the
participating and voting person.
NO
The Company does not
provide the opportunity to
attend and vote in the
general meeting of
shareholders by using
electronic
communication means,
because in the opinion of
the Company this is
related to the threat to the
fairness and efficiency of
the general meeting of
shareholders. In the
opinion of the Company,
there is a high risk of
threat to such type of
communication security
and technical
malfunctions. In addition,
the Company does not
have the appropriate
technical and
organizational measures
to implement the above
principle and the
Company would incur
significant additional
costs as a result of
implementation of this
principle.
However, the Company
grants its shareholders
the right to vote at the
general meeting of
shareholders either in
person or through an
authorized
representative. In the
light of the above, the
Company will not follow
the above
recommendation.
1.9. It is recommended that the notice on the draft decisions of the
general meeting of shareholders being convened should specify new
candidatures of members of the collegial body, their proposed
remuneration and the proposed audit company if these issues are
included into the agenda of the general meeting of shareholders.
Where it is proposed to elect a new member of the collegial body, it is
recommended that the information about his/her educational
background, work experience and other managerial positions held (or
proposed) should be provided.
YES
1.10. Members of the company’s collegial management body, heads
of the administration
1
or other competent persons related to the
company who can provide information related to the agenda of the
general meeting of shareholders should take part in the general
meeting of shareholders. Proposed candidates to member of the
collegial body should also participate in the general meeting of
shareholders in case the election of new members is included into the
agenda of the general meeting of shareholders.
YES
1
For the purposes of this Code, heads of the administration are the employees of the company who hold top level management
positions.
NOVATURAS AB, Company code 135567698, A. Mickevičiaus st. 27, Kaunas, Lithuania
ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT FOR THE YEAR ENDED 31 December 2022
(all amounts are in thousand EUR unless otherwise stated)
24
Principle 2: Supervisory board
2.1. Functions and liability of the supervisory board
The supervisory board of the company should ensure representation of the interests of the company and its
shareholders, accountability of this body to the shareholders and objective monitoring of the company’s
operations and its management bodies as well as constantly provide recommendations to the management
bodies of the company.
The supervisory board should ensure the integrity and transparency of the company’s financial accounting and
control system.
2.1.1. Members of the supervisory board should act in good faith, with
care and responsibility for the benefit and in the interests of the
company and its shareholders and represent their interests, having
regard to the interests of employees and public welfare.
NOT APPLICABLE
On 30 June 2020, the
Ordinary General
Meeting of Shareholders
of Novaturas AB adopted
a decision to revoke the
Supervisory Council and
elect a new Board by
vesting in: (i) supervisory
functions provided in
Article 34 part 11 of the
Law on Companies; (ii)
functions of approval
annual budget and
business plan, risk
management policies,
settlement of the goals of
the general director as
well as other functions
related to the
management and
supervision of the
activities of the company;
In accordance with the
Articles of Association of
the Company, the Board
shall consist of 5
members, of whom at
least 1/3 shall be
independent.
2.1.2. Where decisions of the supervisory board may have a different
effect on the interests of the company’s shareholders, the supervisory
board should treat all shareholders impartially and fairly. It should
ensure that shareholders are properly informed about the company’s
strategy, risk management and control, and resolution of conflicts of
interest.
NOT APPLICABLE
2.1.3. The supervisory board should be impartial in passing decisions
that are significant for the company’s operations and strategy.
Members of the supervisory board should act and pass decisions
without an external influence from the persons who elected them.
NOT APPLICABLE
2.1.4. Members of the supervisory board should clearly voice their
objections in case they believe that a decision of the supervisory board
is against the interests of the company. Independent
2
members of the
supervisory board should: a) maintain independence of their analysis
and decision-making; b) not seek or accept any unjustified privileges
that might compromise their independence.
NOT APPLICABLE
2.1.5. The supervisory board should oversee that the company’s tax
planning strategies are designed and implemented in accordance with
the legal acts in order to avoid faulty practice that is not related to the
long-term interests of the company and its shareholders, which may
give rise to reputational, legal or other risks.
NOT APPLICABLE
2.1.6. The company should ensure that the supervisory board is
provided with sufficient resources (including financial ones) to
discharge their duties, including the right to obtain all the necessary
information or to seek independent professional advice from external
legal, accounting or other experts on matters pertaining to the
competence of the supervisory board and its committees.
NOT APPLICABLE
2.2. Formation of the supervisory board
The procedure of the formation of the supervisory board should ensure proper resolution of conflicts
of interest and effective and fair corporate governance.
2.2.1. The members of the supervisory board elected by the general
meeting of shareholders should collectively ensure the diversity of
qualifications, professional experience and competences and seek for
gender equality. With a view to maintain a proper balance between the
qualifications of the members of the supervisory board, it should be
ensured that members of the supervisory board, as a whole, should
have diverse knowledge, opinions and experience to duly perform their
tasks.
NOT APPLICABLE
NOVATURAS AB, Company code 135567698, A. Mickevičiaus st. 27, Kaunas, Lithuania
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25
2.2.2. Members of the supervisory board should be appointed for a
specific term, subject to individual re-election for a new term in office
in order to ensure necessary development of professional experience.
NOT APPLICABLE
2.2.3. Chair of the supervisory board should be a person, whose
current or past positions constituted no obstacle to carry out impartial
activities. A former manager or management board member of the
company should not be immediately appointed as chair of the
supervisory board either. Where the company decides to depart from
these recommendations, it should provide information on the
measures taken to ensure impartiality of the supervision.
NOT APPLICABLE
2.2.4. Each member should devote sufficient time and attention to
perform his duties as a member of the supervisory board. Each
member of the supervisory board should undertake to limit his other
professional obligations (particularly the managing positions in other
companies) so that they would not interfere with the proper
performance of the duties of a member of the supervisory board.
Should a member of the supervisory board attend less than a half of
the meetings of the supervisory board throughout the financial year of
the company, the shareholders of the company should be notified
thereof.
NOT APPLICABLE
2.2.5. When it is proposed to appoint a member of the supervisory
board, it should be announced which members of the supervisory
board are deemed to be independent. The supervisory board may
decide that, despite the fact that a particular member meets all the
criteria of independence, he/she cannot be considered independent
due to special personal or company-related circumstances.
NOT APPLICABLE
2.2.6. The amount of remuneration to members of the supervisory
board for their activity and participation in meetings of the supervisory
board should be approved by the general meeting of shareholders.
NOT APPLICABLE
2.2.7. Every year the supervisory board should carry out an
assessment of its activities. It should include evaluation of the structure
of the supervisory board, its work organization and ability to act as a
group, evaluation of the competence and work efficiency of each
member of the supervisory board, and evaluation whether the
supervisory board has achieved its objectives. The supervisory board
should, at least once a year, make public respective information about
its internal structure and working procedures.
NOT APPLICABLE
2
For the purposes of this Code, the criteria of independence of members of the supervisory council are interpreted as the
criteria of unrelated parties defined in Article 31(7) and (8) of the Law on Companies of the Republic of Lithuania.
NOVATURAS AB, Company code 135567698, A. Mickevičiaus st. 27, Kaunas, Lithuania
ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT FOR THE YEAR ENDED 31 December 2022
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26
Principle 3: Management Board
3.1. Functions and liability of the management board
The management board should ensure the implementation of the company’s strategy and good corporate
governance with due regard to the interests of its shareholders, employees and other interest groups.
3.1.1. The management board should ensure the implementation of
the company’s strategy approved by the supervisory board if the latter
has been formed at the company. In such cases where the supervisory
board is not formed, the management board is also responsible for the
approval of the company’s strategy.
YES
3.1.2. As a collegial management body of the company, the
management board performs the functions assigned to it by the Law
and in the articles of association of the company, and in such cases
where the supervisory board is not formed in the company, it performs
inter alia the supervisory functions established in the Law. By
performing the functions assigned to it, the management board should
take into account the needs of the company’s shareholders,
employees and other interest groups by respectively striving to
achieve sustainable business development.
YES
3.1.3. The management board should ensure compliance with the
laws and the internal policy of the company applicable to the company
or a group of companies to which this company belongs. It should also
establish the respective risk management and control measures aimed
at ensuring regular and direct liability of managers.
YES
3.1.4. Moreover, the management board should ensure that the
measures included into the OECD Good Practice Guidance on
Internal Controls
3
, Ethics and Compliance are applied at the
company in order to ensure adherence to the applicable laws, rules
and standards.
YES/NO
The management board takes
all reasonable measures to
ensure that the Company
complies with applicable laws,
binding rules, and standards.
The Company is planning to
implement the tools
recommended in the OECD
Good Practice Guidance in the
future to ensure adherence to all
recommendations of the OECD
Good Practice Guidance.
3.1.5. When appointing the manager of the company, the
management board should take into account the appropriate balance
between the candidate’s qualifications, experience and competence.
YES
3.2. Formation of the management board
3.2.1. The members of the management board elected by the
supervisory board or, if the supervisory board is not formed, by the
general meeting of shareholders should collectively ensure the
required diversity of qualifications, professional experience and
competences and seek for gender equality. With a view to maintain a
proper balance in terms of the current qualifications possessed by the
members of the management board, it should be ensured that the
members of the management board would have, as a whole, diverse
knowledge, opinions and experience to duly perform their tasks.
YES
The members of the
management board have been
elected on the basis of their
qualification, professional
experience, and diversity of
competencies. The principle of
gender balance has not been
maintained on the board from
30 June 2020 onwards, as the
Board is composed exclusively
of men.
3.2.2. Names and surnames of the candidates to become members
of the management board, information on their educational
background, qualifications, professional experience, current positions,
other important professional obligations and potential conflicts of
interest should be disclosed without violating the requirements of the
legal acts regulating the handling of personal data at the meeting of
the supervisory board in which the management board or individual
members of the management board are elected. In the event that the
supervisory board is not formed, the information specified in this
paragraph should be submitted to the general meeting of
shareholders. The management board should, on yearly basis, collect
data provided in this paragraph on its members and disclose it in the
company’s annual report.
YES
3.2.3. All new members of the management board should be
familiarized with their duties and the structure and operations of the
company.
YES
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3.2.4. Members of the management board should be appointed for a
specific term, subject to individual re-election for a new term in office
in order to ensure necessary development of professional experience
and sufficiently frequent reconfirmation of their status.
YES
3.2.5. Chair of the management board should be a person, whose
current or past positions constitute no obstacle to carry out impartial
activity. Where the supervisory board is not formed, the former
manager of the company should not be immediately appointed as chair
of the management board. Where the company decides to depart from
these recommendations, it should provide information on the
measures taken to ensure impartiality of the supervision.
YES
3.2.6. Each member should give sufficient time and attention to
perform the duties of a member of the management board. If a member
of the management board has attended less than half of the board
meetings during the financial year of the Company, the Company's
supervisory board should be informed of the same, if the supervisory
board is not formed in the Company - the general meeting of
shareholders.
YES
3.2.7. In the event that the management board is elected in the cases
established by the Law where the supervisory board is not formed at
the company, and some of its members will be independent
4
, it should
be announced which members of the management board are deemed
as independent. The management board may decide that, despite the
fact that a particular member meets all the criteria of independence
established by the Law, he/she cannot be considered independent due
to special personal or company-related circumstances.
YES
3.2.8. The general meeting of shareholders of the company should
approve the amount of remuneration to the members of the
management board for their activity and participation in the meetings
of the management board.
YES
3.2.9. The members of the management board should act in good
faith, with care and responsibility for the benefit and the interests of the
company and its shareholders with due regard to other stakeholders.
When adopting decisions, they should not act in their personal interest;
they should be subject to no-compete agreements and they should not
use the business information or opportunities related to the company’s
operations in violation of the company’s interests.
YES
3.2.10. Every year the management board should carry out an
assessment of its activities. It should include evaluation of the structure
of the management board, its work organization and ability to act as a
group, evaluation of the competence and work efficiency of each
member of the management board, and evaluation whether the
management board has achieved its objectives. The management
board should, at least once a year, make public respective information
about its internal structure and working procedures in observance of
the legal acts regulating the processing of personal data.
YES
3
Reference to OECD Good Practice Guidance on Internal Control, Ethics and Compliance: https://www.oecd.org/daf/anti-
bribery/44884389.pdf
4
For the purposes of this Code, the criteria of independence of members of the board are interpreted as the criteria of
unrelated parties defined in Article 33(7) of the Law on Companies of the Republic of Lithuania.
NOVATURAS AB, Company code 135567698, A. Mickevičiaus st. 27, Kaunas, Lithuania
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Principle 4: Rules of procedure of the supervisory board and the management board of the company
The rules of procedure of the supervisory board, if it is formed at the company, and of the management board
should ensure efficient operation and decision-making of these bodies and promote active cooperation between
the company’s management bodies.
4.1. The management board and the supervisory board, if the latter is formed at the
company, should act in close cooperation in order to attain benefit for the company
and its shareholders. Good corporate governance requires an open discussion
between the management board and the supervisory board. The management board
should regularly and, where necessary, immediately inform the supervisory board
about any matters significant for the company that are related to planning, business
development, risk management and control, and compliance with the obligations at
the company. The management board should inform the supervisory board about any
derogations in its business development from the previously formulated plans and
objectives by specifying the reasons for this.
NOT
APPLICABLE
As from 30 June 2020, the
Supervisory Council is not
formed.
4.2. It is recommended that meetings of the company’s collegial bodies should be
held at the respective intervals, according to the pre-approved schedule. Each
company is free to decide how often meetings of the collegial bodies should be
convened but it is recommended that these meetings should be convened at such
intervals that uninterruptable resolution of essential corporate governance issues
would be ensured. Meetings of the company’s collegial bodies should be convened
at least once per quarter.
YES
4.3. Members of a collegial body should be notified of the meeting being convened
in advance so that they would have sufficient time for proper preparation for the issues
to be considered at the meeting and a fruitful discussion could be held and appropriate
decisions could be adopted. Along with the notice of the meeting being convened all
materials relevant to the issues on the agenda of the meeting should be submitted to
the members of the collegial body. The agenda of the meeting should not be changed
or supplemented during the meeting, unless all members of the collegial body present
at the meeting agree with such change or supplement to the agenda, or certain issues
that are important to the company require immediate resolution.
YES
4.4. In order to coordinate the activities of the company’s collegial bodies and
ensure effective decision-making process, the chairs of the company’s collegial
supervision and management bodies should mutually agree on the dates and
agendas of the meetings and close cooperate in resolving other matters related to
corporate governance. Meetings of the company’s supervisory board should be open
to members of the management board, particularly in such cases where issues
concerning the removal of the management board members, their responsibility or
remuneration are discussed.
NOT
APPLICABLE
As from 30 June 2020, the
Supervisory Council is not
formed.
NOVATURAS AB, Company code 135567698, A. Mickevičiaus st. 27, Kaunas, Lithuania
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Principle 5: Nomination, remuneration and audit committees
5.1. Purpose and formation of committees
The committees formed at the company should increase the work efficiency of the supervisory board or,
where the supervisory board is not formed, of the management board which performs the supervisory
functions by ensuring that decisions are based on due consideration and help organise its work in such a
way that the decisions it takes would be free of material conflicts of interest.
Committees should exercise independent judgement and integrity when performing their functions and
provide the collegial body with recommendations concerning the decisions of the collegial body. However,
the final decision should be adopted by the collegial body.
5.1.1. Taking due account of the company-related circumstances and the
chosen corporate governance structure, the supervisory board of the company
or, in cases where the supervisory board is not formed, the management board
which performs the supervisory functions, establishes committees. It is
recommended that the collegial body should form the nomination, remuneration
and audit committees
5
.
NO
Following the election of a new
five-member Board (of which
two members are
independent) on 30 June 2020,
the functions previously
performed by the
Remuneration and
Appointment Committee and
the Audit Committee are
vested in the Board. The
Company falls outside the
legal obligation to set up an
appropriate committee,
however, in the near future, the
Company intends to review
and assess the need to set up
the specified committees in
order to improve the
performance of the Board.
5.1.2. Companies may decide to set up less than three committees. In such
case, companies should explain in detail why they have chosen the alternative
approach, and how the chosen approach corresponds with the objectives set
for the three different committees.
YES
5.1.3. In the cases established by the legal acts the functions assigned to the
committees formed at companies may be performed by the collegial body itself.
In such case, the provisions of this Code pertaining to the committees
(particularly those related to their role, operation and transparency) should
apply, where relevant, to the collegial body as a whole.
YES
5.1.4. Committees established by the collegial body should normally be
composed of at least three members. Subject to the requirements of the legal
acts, committees could be comprised only of two members as well. Members
of each committee should be selected on the basis of their competences by
giving priority to independent members of the collegial body. The chair of the
management board should not serve as the chair of committees.
NOT
APPLICABLE
Since 30 June 2020, no
individual committees have
been set up on the Board,
therefore the Board as a whole
deals with all matters falling
within the competence of
individual committees.
5.1.5. The authority of each committee formed should be determined by the
collegial body itself. Committees should perform their duties according to the
authority delegated to them and regularly inform the collegial body about their
activities and performance on a regular basis. The authority of each committee
defining its role and specifying its rights and duties should be made public at
least once a year (as part of the information disclosed by the company on its
governance structure and practice on an annual basis). In compliance with the
legal acts regulating the processing of personal data, companies should also
include in their annual reports the statements of the existing committees on
their composition, the number of meetings and attendance over the year as well
as the main directions of their activities and performance.
NOT
APPLICABLE
Since 30 June 2020, no
individual committees have
been set up on the Board,
therefore the Board as a whole
deals with all matters falling
within the competence of
individual committees.
5.1.6. With a view to ensure the independence and impartiality of the
committees, the members of the collegial body who are not members of the
committees should normally have a right to participate in the meetings of the
committee only if invited by the committee. A committee may invite or request
that certain employees of the company or experts would participate in the
meeting. Chair of each committee should have the possibility to maintain direct
communication with the shareholders. Cases where such practice is to be
applied should be specified in the rules regulating the activities of the
committee.
NOT
APPLICABLE
Since 30 June 2020, no
individual committees have
been set up on the Board,
therefore the Board as a whole
deals with all matters falling
within the competence of
individual committees.
NOVATURAS AB, Company code 135567698, A. Mickevičiaus st. 27, Kaunas, Lithuania
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5.2. Nomination committee
5.2.1. The key functions of the nomination committee should be the
following:
(1) to select candidates to fill vacancies in the membership of supervisory
and management bodies and the administration and recommend the
collegial body to approve them. The nomination committee should evaluate
the balance of skills, knowledge and experience in the management body,
prepare a description of the functions and capabilities required to assume a
particular position and assess the time commitment expected;
(2) assess, on a regular basis, the structure, size and composition of the
supervisory and management bodies as well as the skills, knowledge and
activity of its members, and provide the collegial body with
recommendations on how the required changes should be sought;
(3) devote the attention necessary to ensure succession planning.
YES
Since 30 June 2020, no
individual committees have
been set up on the Board,
these functions are assigned
to the Board of the Company.
5.2.2. When dealing with issues related to members of the collegial body
who have employment relationships with the company and the heads of the
administration, the manager of the company should be consulted by
granting him/her the right to submit proposals to the Nomination Committee.
YES
Since 30 June 2020, no
individual committees have
been set up on the Board,
these functions are assigned
to the Board of the Company.
5
The legal acts may provide for the obligation to form a respective committee. For example, the Law on the Audit of Financial
Statements of the Republic of Lithuania provides that public-interest entities (including but not limited to public limited liability
companies whose securities are traded on a regulated market of the Republic of Lithuania and/or of any other Member State)
are under the obligation to set up an audit committee (the legal acts provide for the exemptions where the functions of the audit
committee may be carried out by the collegial body performing the supervisory functions)
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5.3. Remuneration committee
The main functions of the remuneration committee should be as follows:
1) submit to the collegial body proposals on the remuneration policy
applied to members of the supervisory and management bodies
and the heads of the administration for approval. Such policy
should include all forms of remuneration, including the fixed-rate
remuneration, performance-based remuneration, financial
incentive schemes, pension arrangements and termination
payments as well as conditions which would allow the company
to recover the amounts or suspend the payments by specifying
the circumstances under which it would be expedient to do so;
2) submit to the collegial body proposals regarding individual
remuneration for members of the collegial bodies and the heads
of the administration in order to ensure that they would be
consistent with the company’s remuneration policy and the
evaluation of the performance of the persons concerned;
3) review, on a regular basis, the remuneration policy and its
implementation.
YES
Since 30 June 2020, no
individual committees have
been set up on the Board,
these functions are assigned
to the Board of the Company.
5.4. Audit committee.
5.4.1. The key functions of the audit committee are defined in the legal acts
regulating the activities of the Audit Committee
6
.
YES/NO
Following the election of a new
five-member Board on 30 June
2020, the functions previously
performed by the Audit
Committee are vested in the
Board. The Company falls
outside the legal obligation to
form an appropriate
committee.
5.4.2. All members of the committee should be provided with detailed
information on specific issues of the company’s accounting system, finances
and operations. The heads of the company’s administration should inform
the audit committee about the methods of accounting for significant and
unusual transactions where the accounting may be subject to different
approaches.
YES
Since 30 June 2020, no
individual committees have
been set up, the function of the
Audit Committee are vested in
the Board.
5.4.3. The audit committee should decide whether the participation of the
chair of the management board, the manager of the company, the chief
finance officer (or senior employees responsible for finance and
accounting), the internal and external auditors in its meetings is required
(and, if required, when). The committee should be entitled, when needed, to
meet the relevant persons without members of the management bodies
present.
YES
Since 30 June 2020, no
individual committees have
been set up, the function of the
Audit Committee are vested in
the Board.
5.4.4. The audit committee should be informed about the internal auditor’s
work program and should be furnished with internal audit reports or periodic
summaries. The audit committee should also be informed about the work
program of external auditors and should receive from the audit firm a report
describing all relationships between the independent audit firm and the
company and its group.
YES
Since 30 June 2020, no
individual committees have
been set up, the function of the
Audit Committee are vested in
the Board.
5.4.5. The audit committee should examine whether the company complies
with the applicable provisions regulating the possibility of lodging a
complaint or reporting anonymously his/her suspicions of potential violations
committed at the company and should also ensure that there is a procedure
in place for proportionate and independent investigation of such issues and
appropriate follow-up actions.
YES/NO
YES – the Company provides
the possibility of lodging
complaints directly or by email
by addressing the Company's
bodies, administration, or
heads of units.
NO – the Company has not yet
formally approved the system
for lodging complaints.
6
Issues related to the activities of audit committees are regulated by Regulation No 537/2014 of the European Parliament and
the Council of 16 April 2014 on specific requirements regarding statutory audit of public-interest entities, the Law on the Audit of
Financial Statements of the Republic of Lithuania, and the Rules Regulating the Activities of Audit Committees approved by the
Bank of Lithuania.
NOVATURAS AB, Company code 135567698, A. Mickevičiaus st. 27, Kaunas, Lithuania
ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT FOR THE YEAR ENDED 31 December 2022
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32
5.4.6. The audit committee should submit to the supervisory board or, where
the supervisory board is not formed, to the management board its activity
report at least once in every six months, at the time that annual and half-
yearly reports are approved.
NOT
APPLICABLE
Since 30 June 2020, no
individual committees have
been set up, the functions,
rights and obligations of the
Audit Committee are vested in
the Board, however, the
Management Board shall not,
in its capacity as Audit
Committee, draw up reports for
its own account.
Principle 6: Prevention and disclosure of conflicts of interest
The corporate governance framework should encourage members of the company’s supervisory and
management bodies to avoid conflicts of interest and ensure a transparent and effective mechanism of
disclosure of conflicts of interest related to members of the supervisory and management bodies.
The corporate governance framework should recognize the rights of stakeholders as established by law and
to promote active cooperation between the company and its stakeholders in creating the company's well-
being, jobs and financial stability. In the context of this principle, the term interest holders includes investors,
employees, creditors, suppliers, customers, the local community and others with interests in a particular
company.
Any member of the company’s supervisory and management body should
avoid a situation where his/her personal interests are or may be in conflict
with the company’s interests. In case such a situation did occur, a member
of the company’s supervisory or management body should, within a
reasonable period of time, notify other members of the same body or the
body of the company which elected him/her or the company’s shareholders
of such situation of a conflict of interest, indicate the nature of interests and,
where possible, their value.
YES
The Company acknowledges
that the members of the
Company’s management
bodies comply with the
requirements set out in this
article, however, the formal
policy for declaring and
managing personal interests is
yet not in place in the
Company.
Principle 7: Remuneration Policy of the Company
The remuneration policy and the procedure for review and disclosure of such policy established at the
company should prevent potential conflicts of interest and abuse in determining remuneration of members
of the collegial bodies and heads of the administration, in addition, it should ensure the publicity and
transparency of the company’s remuneration policy and its long-term strategy.
7.1. The company should approve and post the remuneration policy on the
website of the company; such policy should be reviewed on a regular basis
and be consistent with the company’s long-term strategy.
YES
7.2. The remuneration policy should include all forms of remuneration,
including the fixed-rate remuneration, performance-based remuneration,
financial incentive schemes, pension arrangements and termination
payments as well as the conditions specifying the cases where the company
can recover the disbursed amounts or suspend the payments.
YES
7.3. With a view to avoid potential conflicts of interest, the remuneration
policy should provide that members of the collegial bodies which perform
the supervisory functions should not receive remuneration based on the
company’s performance.
YES
NOVATURAS AB, Company code 135567698, A. Mickevičiaus st. 27, Kaunas, Lithuania
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7.4. The remuneration policy should provide sufficient information on the
policy regarding termination payments. Termination payments should not
exceed a fixed amount or a fixed number of annual wages and in general
should not be higher than the non-variable component of remuneration for
two years or the equivalent thereof. Termination payments should not be
paid if the contract is terminated due to inadequate performance.
YES/NO
YES – the Remuneration
Policy regulates the procedure
for the payment of termination
benefits in the Company, and
defines the cases in which
termination benefits are not
paid.
NO – the Remuneration Policy
does not contain specific
amounts of benefits, however,
the Company in all cases
complies with the applicable
legislation and the amounts of
termination benefits set out
therein.
7.5. In the event that the financial incentive scheme is applied at the
company, the remuneration policy should contain sufficient information
about the retention of shares after the award thereof. Where remuneration
is based on the award of shares, shares should not be vested at least for
three years after the award thereof. After vesting, members of the collegial
bodies and heads of the administration should retain a certain number of
shares until the end of their term in office, subject to the need to compensate
for any costs related to the acquisition of shares.
YES
7.6. The company should publish information about the implementation of
the remuneration policy on its website, with a key focus on the remuneration
policy in respect of the collegial bodies and managers in the next and, where
relevant, subsequent financial years. It should also contain a review of how
the remuneration policy was implemented during the previous financial year.
The information of such nature should not include any details having a
commercial value. Particular attention should be paid on the major changes
in the company’s remuneration policy, compared to the previous financial
year.
YES
The Remuneration Policy was
approved in the Ordinary
General Meeting of
Shareholders on 24 May 2022.
The information on the
implementation of the
Remuneration Policy is
provided together with the
Annual Report on an annual
basis.
7.7. It is recommended that the remuneration policy or any major change of
the policy should be included on the agenda of the general meeting of
shareholders. The schemes under which members and employees of a
collegial body receive remuneration in shares or share options should be
approved by the general meeting of shareholders.
YES
Principle 8: Role of stakeholders in corporate governance
The corporate governance framework should recognize the rights of stakeholders entrenched in the laws or
mutual agreements and encourage active cooperation between companies and stakeholders in creating the
company value, jobs and financial sustainability. In the context of this principle, the term interest holders
includes investors, employees, creditors, suppliers, customers, the local community and others with interests
in a particular company.
8.1. The corporate governance framework should ensure that the rights and
lawful interests of stakeholders are protected.
YES
NOVATURAS AB, Company code 135567698, A. Mickevičiaus st. 27, Kaunas, Lithuania
ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT FOR THE YEAR ENDED 31 December 2022
(all amounts are in thousand EUR unless otherwise stated)
34
8.2. The corporate governance framework should create conditions for
stakeholders to participate in corporate governance in the manner
prescribed by law. Examples of participation by stakeholders in corporate
governance include the participation of employees or their representatives
in the adoption of decisions that are important for the company,
consultations with employees or their representatives on corporate
governance and other important matters, participation of employees in the
company’s authorized capital, involvement of creditors in corporate
governance in the cases of the company’s insolvency, etc.
YES
The corporate governance
framework creates conditions
for stakeholders (investors) to
participate in corporate
governance in the manner
prescribed by law. To a certain
extent permitted by law,
employees may through the
Works Council participate in
the corporate governance.
It is common practice (when
making decisions that are
important for employees) to
arrange informal consultations
and employee surveys.
8.3. Where stakeholders participate in the corporate governance process,
they should have access to relevant information.
YES
8.4. Stakeholders should be provided with the possibility of reporting
confidentially any illegal or unethical practices to the collegial body
performing the supervisory function.
YES
The Company provides a
possibility of reporting any
illegal or unethical practices to
the collegial body performing
the supervisory function by
addressing its member directly
or sending information by
email.
Currently, the Company has
not provided conditions for
confidential reporting.
Principle 9: Disclosure of information
The corporate governance framework should ensure the timely and accurate disclosure of all material
corporate issues, including the financial situation, operations and governance of the company.
9.1. In accordance with the company’s procedure on confidential information
and commercial secrets and the legal acts regulating the processing of
personal data, the information publicly disclosed by the company should
include but not be limited to the following:
9.1.1. operating and financial results of the company;
YES
9.1.2. objectives and non-financial information of the company;
YES
9.1.3. persons holding a stake in the company or controlling it directly
and/or indirectly and/or together with related persons as well as the structure
of the group of companies and their relationships by specifying the final
beneficiary;
YES
9.1.4. members of the company’s supervisory and management bodies
who are deemed independent, the manager of the company, the shares or
votes held by them at the company, participation in corporate governance
of other companies, their competence and remuneration;
YES
9.1.5. reports of the existing committees on their composition, number
of meetings and attendance of members during the last year as well as the
main directions and results of their activities;
NOT
APPLICABLE
Since 30 June 2020, no
individual committees have
been set up and their
respective functions are
vested in the Board.
9.1.6. potential key risk factors, the company’s risk management and
supervision policy;
YES/NO
The Company’s risk
management and supervision
policy has not been approved
yet.
9.1.7. the company’s transactions with related parties;
YES
NOVATURAS AB, Company code 135567698, A. Mickevičiaus st. 27, Kaunas, Lithuania
ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT FOR THE YEAR ENDED 31 December 2022
(all amounts are in thousand EUR unless otherwise stated)
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9.1.8. main issues related to employees and other stakeholders (for
instance, human resource policy, participation of employees in corporate
governance, award of the company’s shares or share options as incentives,
relationships with creditors, suppliers, local community, etc.);
YES
9.1.9. structure and strategy of corporate governance;
YES
9.1.10. initiatives and measures of social responsibility policy and anti-
corruption fight, significant current or planned investment projects.
This list is deemed minimum and companies are encouraged not to restrict
themselves to the disclosure of information included into this list. This
principle of the Code does not exempt companies from their obligation to
disclose information as provided for in the applicable legal acts.
YES/NO
The Company is a socially
responsible undertaking
guided by the principle of good
faith, but no formal anti-
corruption policy is yet in place.
9.2. When disclosing the information specified in paragraph 9.1.1 of
recommendation 9.1, it is recommended that the company which is a parent
company in respect of other companies should disclose information about
the consolidated results of the whole group of companies.
YES
9.3. When disclosing the information specified in paragraph 9.1.4 of
recommendation 9.1, it is recommended that the information on the
professional experience and qualifications of members of the company’s
supervisory and management bodies and the manager of the company as
well as potential conflicts of interest which could affect their decisions should
be provided. It is further recommended that the remuneration or other
income of members of the company’s supervisory and management bodies
and the manager of the company should be disclosed, as provided for in
greater detail in Principle 7.
YES
9.4. Information should be disclosed in such manner that no shareholders or
investors are discriminated in terms of the method of receipt and scope of
information. Information should be disclosed to all parties concerned at the
same time.
YES
Principle 10: Selection of the company’s audit firm
The company’s audit firm selection mechanism should ensure the independence of the report and opinion
of the audit firm.
10.1. With a view to obtain an objective opinion on the company’s financial
condition and financial results, the company’s annual financial statements
and the financial information provided in its annual report should be audited
by an independent audit firm.
YES
10.2. It is recommended that the audit firm would be proposed to the general
meeting of shareholders by the supervisory board or, if the supervisory
board is not formed at the company, by the management board of the
company.
YES
10.3. In the event that the audit firm has received remuneration from the
company for the non-audit services provided, the company should disclose
this publicly. This information should also be available to the supervisory
board or, if the supervisory board is not formed at the company, by the
management board of the company when considering which audit firm
should be proposed to the general meeting of shareholders.
YES
NOVATURAS AB, Company code 135567698, A. Mickevičiaus st. 27, Kaunas, Lithuania
ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT FOR THE YEAR ENDED 31 December 2022
(all amounts are in thousand EUR unless otherwise stated)
36
Social Responsibility Report
Human resources policy
Human resources policy pursued by the Company helps it to implement its strategic objectives through appropriate
management and development of employees. We are always open and fair with both existing and potential
employees: the policy provides for equal opportunities for employment, development and career irrespective of the
employee‘s gender, race, ethnicity, religion, age, disability, sexual orientation, nationality, political convictions,
membership of trade unions, social position and/or other factors in accordance with the law. The Company applies
a fair remuneration system including salaries and bonuses. We do not tolerate discrimination and disrespect;
collaboration with the employees is based on respect and trust and open and transparent communication.
Employees
Average number of employees in 2022 by main types of operations:
2022
2021
Change, %
Representatives and guides abroad
44
25
+ 76
Sales assistants in own sales channels
33
22
+ 50
Other employees
106
75
+ 41.3
Total
183
122
+ 50
The employee numbers do not include employees on maternity, paternity and parental leave.
Breakdown of employees (women/men) by country (number of employees, average age, number of years
worked in the organisation) The statistics cover data on employees as at 31 December 2022 (excluding employees
on maternity, paternity and parental leave as at 31 December 2022).
Estonia
Lithuania
Latvia
Group
Women
Number of employees
25
93
28
146
Average age
38
37.6
41
38
Average term of service (years)
3
4.5
4
4
Men
Number of employees
2
24
2
28
Average age
48
36
43
37
Average term of service (years)
9
4.2
7
5
Total number of employees
27
117
30
174
Overall average age
38
37.2
41
38
Average term of service (years)
4
4.4
5
4
The predominant part of the Group’s workforce is employed in Lithuania (117 employees of 174 in Lithuania), while
the number of employees in the other two markets is very similar, i.e. 30 in Latvia and 27 in Estonia.
Gender breakdown: women dominate the group as a whole (146 workers out of 174).
The average age of the Company’s employees shows that the average age of employees in all countries is approx.
40 years, and there is very little difference between the average age of women and men (the average age of women
is 38 years, men – 37 years).
On average, the period of service in the Company is 4 years: men, on average, have a slightly longer tenure than
women (5 and 4 years, respectively).
NOVATURAS AB, Company code 135567698, A. Mickevičiaus st. 27, Kaunas, Lithuania
ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT FOR THE YEAR ENDED 31 December 2022
(all amounts are in thousand EUR unless otherwise stated)
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Breakdown of employees (women/men) by main activity (average monthly salary, number of employees
recalculated to full-moth equivalent). The statistics cover data on employees in 2022 (not limited to those who
worked full year).
Women
Men
Total
Employees waking in offices
Average monthly salary
2,068
3,378
2,310
Number of employees
88
20
108
Direct sales unit
Average monthly salary
2,232
2,113
2,221
Number of employees
30
3
33
Representatives abroad*
Average monthly salary
790
809
793
Number of employees
36
6
42
Total average monthly salary
1,801
2,716
1,946
Total number of employees
154
29
183
The average monthly salary gap between men and women was maintained also in 2022: average monthly earnings
of men was 50% higher than women’s. The biggest pay gap is in the sector with the highest number of employees,
i.e. between men and women in office, whereas in direct sales women earn on average just as much as men.
Breakdown of employees by position (average salary, number of employees recalculated to full-moth
equivalent). The statistics cover data on employees in 2022 (not limited to those who worked full year).
Women
Men
Total
Top-level executives
Average monthly salary
5,797
8,631
7,922
Number of employees
1
3
4
Middle-level managers
Average monthly salary
2,980
4,653
3,426
Number of employees
11
4
15
Project managers, managers, experts
Average monthly salary
1,664
1,721
1,672
Number of employees
142
22
164
Total average monthly salary
1,814
2,840
1,977
Total number of employees
154
29
183
In 2022, for most of the year, the Company’s top-level management team was made up of 3 men and 1 woman.
The change took place at the end of November 2022, when the ratio of men to women among top-level managers
was evened out, and, by the end of 2022, the Company’s top-level management team consisted of 2 women and
2 men. At this level, women’s average monthly salary is 33% lower than that of men.
There are more women than men in middle-level management team, where the average monthly salary received
by women is 36% lower than that of men.
The average salary gap between women and men in the rest of the organisation is much smaller at 3.3%.
Attention to employees
The Company values its employees and their contribution to the success of its activities. We promote and support
development of competency and professional knowledge of our employees. In order to ensure opportunities for
professional growth and development, and realisation of professional ambitions for our employees, we always offer
vacancies to existing employees of Novaturas first, before looking external.
We foster a culture of shared success and cooperation in the Company, therefore, we set a budget for team building
and strengthening activities, team events, we invite all our employees to the Company’s celebrations or certain
meaningful activities, and we uphold internal traditions that help to strengthen the desired corporate culture.
Division managers ensure smooth introduction of new employees into the organisation.
NOVATURAS AB, Company code 135567698, A. Mickevičiaus st. 27, Kaunas, Lithuania
ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT FOR THE YEAR ENDED 31 December 2022
(all amounts are in thousand EUR unless otherwise stated)
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Encouraging feedback and employee engagement survey
Seeking to ensure the best possible dialogue with employees, we are open to their feedback, and we explore
different ways for them to share their feedback. Sharing feedback is part of our performance management and
appraisal process: at the end of each quarter of the year we encourage managers to run quarterly performance
review meetings with employees to discuss quarterly achievements, to review the relevance of the goals, to agree
on activities/actions that will help to achieve the goals set. We also encourage our employees to give open feedback
to their managers.
Before the pandemic, we invited employees to participate in an Employee Engagement Survey to share their views
and assess various organisational aspects: we analysed the results of the survey and developed action plans to
address the identified issues. Although we had planned to conduct the survey every year, we took a break during
the pandemic. The survey will be carried out in 2023 at the pan-group level and will assess five key factors for
organisational engagement: trust in the organisation, concentration of leadership, meaningful work, empowering
working environment, recognition and growth. The level of engagement will be measured by the main aspects of
the organization: both by the structure of the company and by comparing the results among the individual
companies in the Group.
Objectives of the survey:
• To identify the current level of employee engagement.
• To assess the extent to which employees consider that the organisation is making good use of employee
engagement opportunities.
• To highlight the strengths and aspects of staff experience for improvement, which must be given priority
in order to maintain and strengthen employee engagement.
The overall findings of the survey will be discussed on an organisation-wide basis. The trends that emerged during
the survey, the areas that need to be maintained and strengthened, will be discussed in individual teams. Action
plans will be drafted to address the problems raised, and responsible persons have been appointed.
Although the company-wide engagement survey was postponed to 2023, we conducted feedback surveys in
teams, which helped to assess the aspects identified by the teams as important and critical to effective teamwork
and employee satisfaction: leadership, access to information, cooperation, etc. We also introduced the teams to
the results of such surveys asking them to suggest actions for change.
Labour Council
Novaturas has Labour Council from the end of November 2019, to ensure the most transparent representation of
employees’ interests. Meetings of the Labour Council are held periodically to discuss the matters of concern to
employees and submit them to the Company’s Board.
The term of office of the elected Labour Council ended in November 2022. Upon the referral from the outgoing
Labour Council, elections to the new Labour Council will take place at the beginning of 2023 in accordance with
the procedure provided for in the Labour Code of the Republic of Lithuania.
Evaluation of performance
In order to ensure the achievement of the Company’s objectives, managers hold regular quarterly performance
review meetings with their employees. During one-to-one quarterly meetings, the manager and the employee
discuss the achievement of the objectives agreed at the beginning of the year and actions aimed at achievement
of objectives, assess the relevance of the objectives and, if necessary, review them. They also discuss and agree
on the prerequisites or factors necessary for the successful achievement of goals: strengthening competency or
certain skills, possible help from the manager or colleagues, etc., and they exchange feedback. We aim for the
goals set for the employee to comply with the SMART model, that is, to be specific, measurable, achievable,
relevant, and time-bound. During the annual performance review, the manager individually discusses with each
employee of his/her team the performance throughout the year, summarises the achievements and agrees on a
general assessment of the performance throughout the year.
Remuneration policy
AB Novaturas Remuneration policy, approved by the Extraordinary General Meeting of Shareholders on 27
December 2019, was reviewed, updated and approved by the General Meeting of Shareholders on 24 May 2022.
The Remuneration Policy is designed to ensure a competitive and fair remuneration, established in a transparent
manner without discrimination on grounds of sex, age, nationality, race, social status, religion, social orientation,
etc., as well, as to attract, retain, and motivate skilled employees to ensure business success.
Main components of pay:
- Fixed part of remuneration (PAD) – is the monthly salary specified in the employment contract and paid
in accordance with the procedures established by law. Typically, reviewed and determined once a year,
NOVATURAS AB, Company code 135567698, A. Mickevičiaus st. 27, Kaunas, Lithuania
ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT FOR THE YEAR ENDED 31 December 2022
(all amounts are in thousand EUR unless otherwise stated)
39
considering the level of responsibility, professional experience, personal qualities required for the position,
market conditions, including an employee performance.
- Variable part of remuneration – annual, quarterly or monthly bonus or share options. This is an additional
remuneration for the employee which is granted and paid at the initiative of the Company as a means of
promoting and motivating employees. Awarded and paid based on the following aspects:
- personal achievements of an employee;
- the achievement of the objectives set by the Company for a particular year (“reward for
overall success”).
The aim of long-term incentives, share options, is safeguard the business strategy and long term goals of the
Company by motivating and retaining professional, qualified and competent team to encourage employees to
contribute to the success of the Group, to increase the financial and property interests of employees and to promote
long-term work in the Group.
- Other monetary remuneration – supplements paid to employees for additional work, performance of
additional functions not provided for in their employment contract and/or job description, or performance
of additional tasks, as well as for the work functions actually performed during standby duty and on-call
duty.
Other benefits.
We strive to ensure that the additional benefits we offer in our Company for employees reflect and represent the
values we adhere, the culture we foster, and the employee experience we create.
Health insurance
We are concerned about the physical and emotional well-being of our employees: we provide them with
supplementary health insurance (depending on individual needs) and we offer them the choice of one of the four
health insurance plan types best suited to a particular stage of their life. In case of an insured event, the insurance
company covers 80–100% expenses incurred by the employee for health care services provided (outpatient,
inpatient or rehabilitation treatment), preventive health checks, vaccination, prescription drugs, and partially or fully
covers various other medical services. Health insurance covers employees for a period of one year.
Additional benefits.
We also care for the important events in the lives of our employees: they are entitled to certain lump-sum payments
for life events, such as a wedding, a child’s birth, or a loss of a close family member, and we celebrate holidays
together (we have birthday gifts for employees, and Christmas gifts for both employees and their children under 12
years old).
Flexible work schedule and hybrid working model.
In order to ensure the best possible work-life balance, the Company offers employees the opportunity to work
remotely, and to have workations once a year. The employees can also select working hours that suit them if a
justifiable need exists.
Safe working environment
The Company maintains safe and reliable working environment in accordance with national standards.
Student practice
The Company collaborates with higher educational establishments by enabling students to have their practice
periods at the Company and get acquainted with its activities. The most motivated students who achieve beat
results receive offers to work with the Company.
Social responsibility initiatives of the Company: Support for animal shelters
The Company encourages its employees to contribute to supporting animal welfare organisations. Voluntary
assistance weekends are organised, during which the employees help the shelter staff and animals. In 2022, we
provided voluntary assistance to VšĮ Tautmilės Globa.
Environmental Report
On 9 November 2021, at the UN Climate Conference in Glasgow (COP26), United Nations launched an ambitious
plan for the tourism industry to reach net zero by 2050. The new roadmap sets targets and benchmarks for the
travel industry and offers practical recommendations for businesses on how they can achieve the set targets. For
instance, hotels could bring in measures to improve energy efficiency, while new ones can be built using
sustainable design practices. Airlines can improve existing aircraft technology by retrofitting and reducing weight,
which increases fuel efficiency and lowers emissions. The cruise industry can reduce emissions by upgrading
existing ships (through HVAC and lighting upgrades) and designing new ships to maximise energy efficiency.
In response to the challenge of zero net emissions, the Group is continuously adapting its business to the expected
developments in the industry.
NOVATURAS AB, Company code 135567698, A. Mickevičiaus st. 27, Kaunas, Lithuania
ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT FOR THE YEAR ENDED 31 December 2022
(all amounts are in thousand EUR unless otherwise stated)
40
Aviation:
to reduce the carbon footprint and improve the customer experience, in Estonia, in December 2022, we replaced
the 11-year-old AIRBUS A320 aircraft with a half-newer Boeing Max, which not only can carry 5% more
passengers, but uses 12-15% less fuel to fly them. This change results in CO2 emissions savings of 16-18% (5-6
thousand tons) per year. One of the ways to reduce aviation-related carbon footprint the most (65-80%) is the use
of sustainable aviation fuel produced from vegetal waste used in the aviation industry. And while the global
production of this type of fuel is only accelerating (real competition for kerosene is projected to emerge around
2030), the Group is scanning the market for ways to offer our travellers more sustainable, less carbon-intensive
journeys.
Supply of sustainable travel products
Travel-related emissions can be reduced not only by choosing more sustainable flights but also more sustainable
travel options. According to the United Nations World Tourism Organization, hotels are accountable for one percent
of global emissions. This number will continue to rise as hotel demand increases, which is why implementing
sustainability initiatives in hotels is so important to mitigate this negative impact. Thus, environmentally conscious
hotels pay special attention to waste management, the origin of the electricity and heat energy used, and energy
efficiency. Novaturas collects this data and plans to add sustainable hotels to the options offered to travellers. This
would allow to offer customers innovative and sustainable travel options (according to different studies, as many
as 61% of travellers aim for more sustainable travel), and influence the decisions of hotel or hotel chain owners in
an environmental compliance environment.
In addition, AB Novaturas offered a new type of travel for environmentally conscious customers – sightseeing tours
around Lithuania. During 2022, the Company offered more than 10 different options for sightseeing tours.
Compared to international, local destinations are far more sustainable, with no aviation involvement and associated
carbon footprint, at the same time, customers are given the opportunity to get to know their country better. In the
future, the Company intends to expand such destinations, including geographical expansion across the Baltics.
Taxonomy for sustainable activities
The EU Taxonomy Regulation is not binding on Novaturas Group, however, the Company has decided to look at
the requirements of the EU Taxonomy more closely. The Company’s core activity, organisation and sale of
recreational and sightseeing tours by air, are beyond the scope of the EU Taxonomy. Only a small part of the
Group’s activities, i.e. sightseeing tours by coach or water vehicles, and transfer from/to the airport to/from the
hotel, are within the scope of the Regulation. Overall, all the activities covered by the EU Taxonomy represent less
than 1% of the Group’s (and the Company’s) income, therefore, the EU Taxonomy compliance information is not
provided in the financial statements due to its insignificance. However, the Group is preparing and in the future,
with an expanded list of Taxonomy-eligible activities, will be ready to present the Group’s key sustainability
performance indicators and their intended values.
NOVATURAS AB, Company code 135567698, A. Mickevičiaus st. 27, Kaunas, Lithuania
41
Approval by officers of the Company
In accordance with Article 22 of the Republic of Lithuania Law on Securities and the Information Disclosure Rules of the Bank of
Lithuania, the undersigned Vitalij Rakovski, Chief Executive Officer of Novaturas AB, and Vygantas Reifonas, Financial Director of
Novaturas AB, confirm that, to the best of our knowledge, the consolidated annual report of Novaturas AB for 2022 presents a true
overview of business development and activities and an overall position of consolidated companies, together with a description of
existing main risks and uncertainties.
Vitalij Rakovski Vygantas Reifonas
Chief Executive Officer Finance Manager
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INDEPENDENT AUDITOR’S REPORT
To the Shareholders of Novaturas AB:
Report on the Audit of the Financial Statements
Opinion
We have audited the separate financial statements of Novaturas AB (the Company) and consolidated financial statements of
Novaturas AB and its subsidiaries (the Group), which comprise the statements of financial position of the Company and the Group as
at 31 December 2022, and the statements of comprehensive income, changes in equity and cash flows for the year then ended, and
notes to the financial statements, including a summary of significant accounting policies.
In our opinion, the accompanying separate and consolidated financial statements present fairly, in all material respects, of the
financial position of the Company and the Group as at 31 December 2022, and their financial performance and cash flows for the
year then ended in accordance with the International Financial Reporting Standards as adopted by the European Union.
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 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 (hereinafter the “IESBA Code”) together with the requirements of the Law on Audit of Financial Statements of the Republic
of Lithuania that are relevant to audit in the Republic of Lithuania, and we have fulfilled our other ethical responsibilities in accordance
with the Law on Audit of Financial Statements of the Republic of Lithuania and the IESBA Code. We believe that the audit evidence we
have obtained is sufficient and appropriate to provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial
statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole,
and in forming our opinion thereon, and we do not provide a separate opinion on these matters. Below is the description of each key
audit matter and our response to it.
Key Audit Matter
How our audit addressed the Key Audit Matter
Goodwill impairment analysis
Refer to pages 46, 65 – 66 of the financial statements.
As at 31 December 2022, the Company and the Group had
goodwill amounting to EUR 30,327 thousand. Eur.
Goodwill with an indefinite useful life is subject to impairment
assessments annually and when there is an indication of
impairment.
The assessment of the value in use requires numerous
estimates and judgements made by the Company and the
Group, as described in Note 3, and in particular the assessment
of the competitive, economic and financial environment of the
region in which the Company and the Group operates, the
ability to realize operating cash flows from strategic plans, the
level of investment to be made and the discount and growth
rates used in calculating recoverable amounts.
We have considered that the valuation of the goodwill is a key
audit matter given the significant amount of goodwill in the
financial statements and significant judgment involved
regarding assumptions used.
• Our audit procedures in relation to management’s
impairment assessment included, among others:
• assessing design and implementation of key controls
related management has established over the goodwill
valuation process;
• assessing the appropriateness of the valuation
methodologies used;
• challenging the reasonableness of key assumptions
utilised in valuing the goodwill based on our knowledge of
the business and industry;
performing sensitivity analyses on the key assumptions where
we flexed the growth rates and discount rates as these are the
key assumptions against which the value in use calculations are
most sensitive to; and
• testing source data from the business plan used to
calculate the recoverable amount to supporting evidence:
- comparing business plans from previous financial
years with actual earnings over the financial periods in
question;
- interviewing operational and finance managers at the
Company to assess the key assumptions used in the
business plans and assess assumptions based on the
explanations obtained;
- reconciling the data used in the plans submitted to the
board of directors.
• evaluating the adequacy of the financial statement
disclosures, including disclosures of key assumptions,
judgements and sensitivities.
Other Information
The other information comprises the information included in the Company’s and the Group’s annual report, including Corporate
Governance statement, and Corporate Social Responsibility Report and Remuneration Report, but does not include the financial
statements and our auditor’s report thereon. Management is responsible for the other information.
Our opinion on the financial statements does not cover the other information and we do not express any form of assurance
conclusion thereon, except as specified below.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider
whether the other information is materially inconsistent with the financial 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.
In addition, our responsibility is to consider whether information included in the Company’s and the Group’s Annual Report, including
Corporate Governance Statement and Remuneration Report, for the financial year for which the financial statements are prepared is
consistent with the financial statements and whether the Company’s Annual Report, including Corporate Governance Statement and
Remuneration Report, has been prepared in compliance with applicable legal requirements. Based on the work carried out in the
course of audit of financial statements, in our opinion, in all material respects:
• The information given in the Company’s and the Group’s Annual Report, including Corporate Governance Statement and
Remuneration Report, for the financial year for which the financial statements are prepared is consistent with the financial
statements; and
• The Company’s and the Group’s Annual Report, including Corporate Governance Statement, but except for Remuneration
Report, has been prepared in accordance with the requirements of the Law on Consolidated Financial Reporting by Group
Undertakings of the Republic of Lithuania and the Law on Financial Reporting by Undertakings of the Republic of Lithuania.
We also need to check that the Corporate Social Responsibility Report has been provided. If we identify that Corporate Social
Responsibility Report has not been provided, 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 Financial Statements
Management is responsible for the preparation and fair presentation of the financial statements in accordance with the International
Financial Reporting Standards as adopted by the European Union, and for such internal control as management determines is
necessary to enable the preparation of the 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 and the Group’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 and the Group or to cease operations, or has no realistic alternative but to do
so.
Those charged with governance are responsible for overseeing the Company’s and the Group’s financial reporting process.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our 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 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 influence the economic decisions of users taken on the basis of these financial
statements.
As part of an audit in accordance with ISAs, we exercise professional judgement and maintain professional scepticism throughout the
audit. We also:
• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and
perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient 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.
• 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 effectiveness of the Company’s and the Group’s
internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related
disclosures made by management.
• 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 significant doubt on the
Company’s and 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 financial 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 Company and the Group to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the
financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the
Group to express an opinion on the consolidated financial 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 significant audit findings, including any significant deficiencies 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 significance in
the audit of the financial 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, 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 benefits of such communication.
Report on other legal and regulatory requirements
Other requirements of the auditor’s report in accordance with Regulation (EU) No 537/2014 of the European Parliament and of the
Council
In accordance with the decision made by Shareholders on 30 April 2021 we have been chosen to carry out the audit of the Company’s
and the Group’s separate and consolidated financial statements. Our appointment to carry out the audit of the Company’s and the
Group’s separate and consolidated financial statements in accordance with the decision made by Shareholders has been renewed
each 2 years and the period of total uninterrupted engagement is six years.
We confirm that our opinion in the section ‘Opinion’ is consistent with the additional report, which we have submitted to the Company
and Audit Committee.
We confirm that in light of our knowledge and belief, services provided to the Company and the Group are consistent with the
requirements of the law and regulations and do not comprise non-audit services referred to in Article 5(1) of the Regulation (EU) No
537/2014 of the European Parliament and of the Council.
In the course of audit, we have not provided any other non-audit services except for the translation of the financial statements
services.
Report on the Compliance of the Format of Financial Statements with the Requirements of the European Single Electronic Format
We have been engaged based our agreement by the management of the Company to conduct a reasonable assurance engagement
for the verification of compliance with the applicable requirements of the European single electronic reporting format of separate
and consolidated financial statements, including consolidated annual report, for the year ended 31 December 2022 (the “Single
Electronic Reporting Format of the separate and consolidated financial statements”).
Description of a subject and applicable criteria
The Single Electronic Reporting Format of the separate and consolidated financial statements has been applied by the management
of the Company to comply with the requirements of art. 3 and 4 of the Commission Delegated Regulation (EU) 2019/815 of 17
December 2018 supplementing Directive 2004/109/EC of the European Parliament and of the Council with regard to regulatory
technical standards on the specification of a single electronic reporting format (the “ESEF Regulation”). The applicable requirements
regarding the Single Electronic Reporting Format of the consolidated financial statements are contained in the ESEF Regulation.
The requirements described in the preceding sentence determine the basis for application of the Single Electronic Reporting Format
of the separate and consolidated financial statements and, in our view, these requirements constitute appropriate criteria to form a
reasonable assurance conclusion.
Responsibilities of management and those charged with governance
The management of the Company is responsible for the application of the Single Electronic Reporting Format of the separate and
consolidated financial statements that complies with the requirements of the ESEF Regulation.
This responsibility includes the selection and application of appropriate markups in iXBRL using ESEF taxonomy and designing,
implementing and maintaining internal controls relevant for the preparation of the Single Electronic Reporting Format of the
consolidated financial statements which is free from material non-compliance with the requirements of the ESEF Regulation.
Those charged with governance are responsible for overseeing the financial reporting process.
Our Responsibility
Our responsibility was to express a reasonable assurance conclusion whether the Single Electronic Reporting Format of the separate
and consolidated financial statements complies with the ESEF Regulation.
We conducted our engagement in accordance with International Standard on Assurance Engagements 3000 (Revised) ‘Assurance
Engagements other than Audits and Reviews of Historical Financial Information’ (the ,,ISAE 3000 (R)” ). This standard requires that we
comply with ethical requirements, plan and perform procedures to obtain reasonable assurance whether the Single Electronic
Reporting Format of the separate and consolidated financial statements is prepared, in all material aspects, in accordance with the
applicable requirements. Reasonable assurance is a high level of assurance, but it does not guarantee that the service performed in
accordance ISAE 3000 (R) will always detect the existing material misstatement (significant non-compliance with the requirements).
Summary of the work performed
Our planned and performed procedures were aimed at obtaining reasonable assurance that the Single Electronic Reporting Format
of the separate and consolidated financial statements was applied, in all material aspects, in accordance with the applicable
requirements and such application is free from material errors or omissions. Our procedures included in particular:
• obtaining an understanding of the internal control system and processes relevant to the application of the Single Electronic
Reporting Format of the separate and consolidated financial statements, including the preparation of the XHTML format and
marking up the consolidated financial statements;
• verification whether the XHTML format was applied properly;
• evaluating the completeness of marking up the consolidated financial statements using the iXBRL markup language according
to the requirements of the implementation of single electronic format as described in the ESEF Regulation;
• evaluating the appropriateness of the Group’s' use of XBRL markups selected from the ESEF taxonomy and the creation of
extension markups where no suitable element in the ESEF taxonomy has been identified; and
• evaluating the appropriateness of anchoring of the extension elements to the ESEF taxonomy.
We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our conclusion.
Opinion
In our opinion, the Single Electronic Reporting Format of the separate and consolidated financial statements for the year ended 31
December 2022 complies, in all material respects, with the ESEF Regulation.
The engagement partner on the audit resulting in this independent auditor’s report is Simonas Rimašauskas.
Deloitte Lietuva UAB
Audit Company License No 001275
Simonas Rimašauskas
Lithuanian Certified Auditor
License No 000466
Vilnius, Republic of Lithuania
15 May 2023
The auditor’s electronic signature applies only to the Independent Auditor’s Report.
NOVATURAS AB, Company code 135567698, A. Mickevičiaus st. 27, Kaunas, Lithuania
CONSOLIDATED AND COMPANY FINANCIAL STATEMENTS FOR THE YEAR ENDED ON 31 DECEMBER 2022
(all amounts are in thousand EUR unless otherwise stated)
46
Statements of financial position
Group | Company | ||||
As at 31 December | As at 31 December | As at 31 | As at 31 December | ||
ASSETS | Notes | 2022 | 2021 | December 2022 | 2021 |
Non-current assets | |||||
Goodwill | 3 | 30,327 | 30,327 | ||
Intangible assets | 3 | 627 | 127 | ||
Property, plant and equipment | 4 | 59 | 52 | ||
Right-of-use assets | 4 | 239 | 221 | ||
Investments in subsidiaries | 5 | 2,859 | 2,859 | ||
Non-current receivables | 12 | 15 | |||
Deferred income tax asset | 17 | 872 | 817 | ||
Total non-current assets | 34,995 | 34,418 | |||
Current assets | |||||
Inventories | - | - | |||
Prepayments and deferred | 6 | 7,012 | 4,107 | ||
expenses | |||||
Trade receivables | 7 | 471 | 149 | ||
Receivables from related parties | 20 | 567 | 177 | ||
Prepaid income tax | 4 | 69 | |||
Other receivables | 7 | 1,394 | 361 | ||
Other current financial assets: | 8 | - | - | ||
Restricted cash | 9 | 200 | 200 | ||
Cash and cash equivalents | 9 | 448 | 432 | ||
Total current assets | 10,096 | 5,495 | |||
Total assets | 45,091 | 39,913 | |||
(Continued in the next page)
The accompanying notes are an integral part of these financial statements.
NOVATURAS AB, Company code 135567698, A. Mickevičiaus st. 27, Kaunas, Lithuania
CONSOLIDATED AND COMPANY FINANCIAL STATEMENTS FOR THE YEAR ENDED ON 31 DECEMBER 2022
(all amounts are in thousand EUR unless otherwise stated)
47
Statements of financial position (continued)
Group | Company | ||||
As at 31 December | As at 31 December | As at 31 | As at 31 December | ||
EQUITY AND LIABILITIES | Notes | 2022 | 2021 | December 2022 | 2021 |
Equity | |||||
Issued capital | 1 | 234 | 234 | ||
Cash flow hedge reserve | ( | - | (3) | ||
Legal reserve | 10 | 29 | 29 | ||
Foreign currency translation | 10 | ||||
reserve | - | - | |||
Retained earnings | 9,741 | 10,454 | |||
Equity, attributable to the equity holders of the parent | 10,004 | 10,714 | |||
Non-controlling interests | - | - | |||
Total equity | 10,004 | 10,714 | |||
Payables and liabilities | |||||
Non-current payables and liabilities | |||||
Grants and subsidies | - | - | |||
Long term borrowings | 11 | - | 5,000 | ||
Other non-current liabilities | 11 | 13,205 | 13,603 | ||
Deferred tax liabilities | 17 | - | - | ||
Lease liabilities | 4 | 128 | 134 | ||
Total non-current payables | |||||
and liabilities | 13,333 | 18,737 | |||
Current payables and liabilities | |||||
Current portion of long-term | 11 | ||||
loans | 1,473 | 1,578 | |||
Current borrowings | 11 | 502 | - | ||
Trade payables | 7,122 | 1,062 | |||
Payables to related parties | 20 | 3,746 | 2,559 | ||
Advances received | 7,359 | 4,522 | |||
Income tax payable | - | - | |||
Other current liabilities and accrued expenses | 12 | 1,429 | 628 | ||
Other current financial | 8 | ||||
liabilities | - | 4 | |||
Lease liabilities | 4 | 123 | 109 | ||
Total current payables and liabilities | 21,754 | 10,462 | |||
Total equity and liabilities | 45,091 | 39,913 | |||
(Concluded)
The accompanying notes are an integral part of these financial statements.
Chief Executive Officer
Vitalij Rakovski
As at 15/05/2023
Financial Director
Vygantas Reifonas
As at 15/05/2023
NOVATURAS AB, Company code 135567698, A. Mickevičiaus st. 27, Kaunas, Lithuania
CONSOLIDATED AND COMPANY FINANCIAL STATEMENTS FOR THE YEAR ENDED ON 31 DECEMBER 2022
(all amounts are in thousand EUR unless otherwise stated)
48
Statements of comprehensive income
Group | Company | ||||
Notes | 2022 | 2021 | 2022 | 2021 | |
Sales | 13 | 108,330 | 59,466 | ||
Cost of sales | 14 | ( | ( | (96,660) | (52,004) |
Gross profit | 11,670 | 7,462 | |||
Selling (expenses) | 15 | ( | ( | (8,184) | (4,179) |
General and administrative | (2,925) | ||||
(expenses) | 15 | ( | ( | (1,701) | |
Other operating income | 241 | 4 | |||
Other operating (expenses) | ( | - | - | ||
Operating profit | 802 | 1,586 | |||
Finance income | 16 | 766 | 69 | ||
Finance (expenses) | 16 | ( | ( | (2,260) | (1,547) |
Profit before tax | ( | (692) | 108 | ||
Income tax (expenses) | 17 | ( | ( | (21) | (26) |
Net profit | ( | (713) | 82 | ||
Other comprehensive income, to be reclassified to profit or loss in subsequent periods | |||||
Result of changes in cash flow hedge | |||||
reserve | 8 | 3 | 492 | ||
Impact of income tax | 17 | ( | - | (74) | |
Total other comprehensive income | 3 | 418 | |||
Total comprehensive income | ( | (710) | 500 | ||
Net profit attributable to: | |||||
To the equity holders of the Company | ( | (713) | 82 | ||
Non-controlling interests | - | - | |||
( | (713) | 82 | |||
Total comprehensive income | |||||
attributable to: | |||||
To the equity holders of the Company | ( | (710) | 500 | ||
Non-controlling interests | - | - | |||
( | (710) | 500 | |||
Earnings per share (EPS) for continuing operations: | 21 | ||||
Basic and diluted, profit for the year | |||||
attributable to ordinary equity holders | ( | (0.09) | 0.06 | ||
of the parent (in EUR) | |||||
The accompanying notes are an integral part of these financial statements.
Chief Executive Officer
Vitalij Rakovski
As at 15/05/2023
Financial Director
Vygantas Reifonas
As at 15/05/2023
NOVATURAS AB, Company code 135567698, A. Mickevičiaus st. 27, Kaunas, Lithuania
CONSOLIDATED AND COMPANY FINANCIAL STATEMENTS FOR THE YEAR ENDED ON 31
DECEMBER 2022
(all amounts are in thousand EUR unless otherwise stated)
49
Statements of changes in equity
Equity, attributable to the equity holders of the parent | Equity attributable to | Non- | |||||||||
Issued | Legal | Cash flow hedge | Retained | Foreign currency | the equity holders of | controlling | |||||
Group | Notes | capital | reserve | reserve | earnings | translation reserve | the parent company | interest | Total | ||
Balance as at 31 December | |||||||||||
2020 | ( | ||||||||||
Net profit for the year | |||||||||||
Other comprehensive income | |||||||||||
Total comprehensive income | |||||||||||
Increase in issued capital | |||||||||||
Dividends declared | 20 | ||||||||||
Balance as at 31 December | |||||||||||
2021 | ( | ||||||||||
Net profit for the year | ( | ( | ( | ||||||||
Other comprehensive income | |||||||||||
Total comprehensive income | ( | ( | ( | ||||||||
Increase in issued capital | |||||||||||
Dividends declared | 20 | ||||||||||
Balance as at 31 December | |||||||||||
2022 | |||||||||||
(Continued in the next page)
NOVATURAS AB, Company code 135567698, A. Mickevičiaus st. 27, Kaunas, Lithuania
CONSOLIDATED AND COMPANY FINANCIAL STATEMENTS FOR THE YEAR ENDED ON 31
DECEMBER 2022
(all amounts are in thousand EUR unless otherwise stated)
50
Statements of changes in equity (continued)
Company
Notes
Issued capital
Legal reserve
Cash flow hedge reserve
Retained earnings
Total
Balance as at 31 December 2020
234
29
(421)
10,372
10,214
Net profit for the year
-
-
-
82
82
Other comprehensive income
-
-
418
-
418
Total comprehensive income
-
-
418
82
500
Increase in issued capital
-
-
-
-
-
Dividends declared
20
-
-
-
-
-
Balance as at 31 December 2021
234
29
(3)
10,454
10,714
Net profit for the year
-
-
-
(713)
(713)
Other comprehensive income
-
-
3
-
3
Total comprehensive income
-
-
3
(713)
(710)
Increase in issued capital
-
-
-
-
-
Dividends declared
20
-
-
-
-
-
Balance as at 31 December 2022
234
29
-
9,741
10,004
(Concluded)
The accompanying notes are an integral part of these financial statements.
Chief Executive Officer
Vitalij Rakovski
As at 15/05/2023
Financial Director
Vygantas Reifonas
As at 15/05/2023
NOVATURAS AB, Company code 135567698, A. Mickevičiaus st. 27, Kaunas, Lithuania
CONSOLIDATED AND COMPANY FINANCIAL STATEMENTS FOR THE YEAR ENDED ON 31
DECEMBER 2022
(all amounts are in thousand EUR unless otherwise stated)
51
Statements of cash flows
Group | Company | ||||
As at 31 December | As at 31 December | As at 31 December | As at 31 | ||
2022 | 2021 | 2022 | December 2021 | ||
Notes | |||||
Cash flows from operating | |||||
activities | |||||
Net profit | ( | (713) | 82 | ||
Adjustments for non-cash | |||||
items: | |||||
Depreciation and amortisation | 179 | 243 | |||
Change in deferred income tax | 17 | ( | (55) | 100 | |
Income tax expenses for the reporting period | 17 | - | - | ||
Elimination of financial, investment and other non-cash | |||||
activity results | 725 | 1,482 | |||
Changes in working capital: | 136 | 1,907 | |||
(Increase)/decrease in inventories | - | 1 | |||
(Increase) decrease in trade | |||||
receivables | ( | ( | (712) | 788 | |
(Increase)/decrease in other receivables and other financial | |||||
assets | ( | ( | (1,033) | (182) | |
(Increase)/decrease in prepayments and deferred | |||||
expenses | ( | (2,902) | 2,642 | ||
Increase (decrease) in trade | |||||
payables | 7,247 | (48) | |||
Increase (decrease) in prepayments | ( | 2,837 | (1,719) | ||
Increase /(decrease) in other accounts payable and accrued | |||||
expenses | ( | 799 | (541) | ||
Cash flows from operating | |||||
activities | 6,372 | 2,848 | |||
Interest (paid) | ( | ( | (733) | (1,067) | |
Income tax paid | ( | - | - | ||
Net cash flows from operating activities | 5,639 | 1,781 | |||
Cash flows used in investing | |||||
activities | |||||
(Acquisition) of non-current | |||||
assets (excluding investments) | ( | ( | (548) | (102) | |
Dividends received | - | - | |||
Proceeds from sale of non- current assets (except | |||||
investments) | 64 | - | |||
Net cash flows used in investing activities | ( | ( | (484) | (102) | |
(Continued in the next page)
The accompanying notes are an integral part of these financial statements.
NOVATURAS AB, Company code 135567698, A. Mickevičiaus st. 27, Kaunas, Lithuania
CONSOLIDATED AND COMPANY FINANCIAL STATEMENTS FOR THE YEAR ENDED ON 31
DECEMBER 2022
(all amounts are in thousand EUR unless otherwise stated)
52
Statements of cash flows (continued)
Group | Company | ||||
As at 31 December | As at 31 December | As at 31 December | As at 31 | ||
2022 | 2021 | 2022 | December 2021 | ||
Notes | |||||
Cash flows from/used in financing activities | |||||
Loans received | 11 | - | 11,958 | ||
(Repayment) of loans | 11 | ( | ( | (5,000) | (15,405) |
Dividends (paid) | - | - | |||
Lease payments | ( | ( | (139) | (103) | |
Net cash (used in) | |||||
financing activities | ( | ( | (5,139) | (3,550) | |
Net increase (decrease) in cash flows | ( | 16 | (1,871) | ||
Cash and cash | |||||
equivalents at the beginning of the period | 632 | 2,503 | |||
Cash and cash | |||||
equivalents at the end of the period | 648 | 632 | |||
(Concluded)
The accompanying notes are an integral part of these financial statements.
Chief Executive Officer
Vitalij Rakovski
As at 15/05/2023
Finance Manager
Vygantas Reifonas
As at 15/05/2023
NOVATURAS AB, Company code 135567698, A. Mickevičiaus st. 27, Kaunas, Lithuania
CONSOLIDATED AND COMPANY FINANCIAL STATEMENTS FOR THE YEAR ENDED ON 31
DECEMBER 2022
(all amounts are in thousand EUR unless otherwise stated)
53
As at 31 December 2022 | As at 31 December 2021 | |||
Number of | Ownership | Number of | Ownership | |
shares held | interest, % | shares held | interest, % | |
Rendez Vous OU | 524,671 | 6.72 | 650,983 | 8.34 |
Moonrider OU | 543,346 | 6.96 | 543,346 | 6.96 |
Willgrow (UAB ME Investicija) | 779,900 | 9.99 | 779,900 | 9.99 |
Ugnius Radvila | 740,702 | 9.49 | 740,702 | 9.49 |
Rytis Šūmakaris | 535,278 | 6.86 | 535,278 | 6.86 |
Vidas Paliūnas | 535,278 | 6.86 | 535,278 | 6.86 |
Rondam AS | 356,489 | 4.57 | - | - |
Other | 3,791,336 | 48.56 | 4,021,513 | 51.50 |
Total | 7,807,000 | 100.00 | 7,807,000 | 100.00 |
Part of shares | ||||
Part of shares | held by the Group | |||
held by the Group | As at 31 | |||
As at 31 | December 2021, | |||
Company | Registered office | December 2022, % | % | Core activities |
Novatours SIA | Kr. Valdemara St. 100, | 100 | 100 | Organization and |
Riga, Latvia | distribution of tours. | |||
Novatours OU | Ravala g. 6, Tallinn, | 100 | 100 | Organization and |
Estonia | distribution of tours. |
54
Aviaturas ir | Konstitucijos ave. 15/5, | 100 | 100 | Organization and |
Partneriai UAB | Vilnius, Lithuania | distribution of tours. | ||
Novatours | M. Caramfil st. 53, | 100 | 100 | Organization and |
Holidays SRL | Bucharesht, Romania | distribution of tours. |
55
56
57
58
59
60
61
2 Accounting principles (continued)
63
64
65
Group | Goodwill | Software | Total |
Acquisition cost: | |||
Balance as at 31 December 2020 | 30,327 | 721 | 31,048 |
Additions | - | 95 | 95 |
Write-offs | - | - | - |
Balance as at 31 December 2021 | 30,327 | 816 | 31,143 |
Additions | - | 506 | 506 |
Write-offs | - | - | - |
Balance as at 31 December 2022 | 30,327 | 1,322 | 31,649 |
Accumulated amortization/impairment: | |||
Balance as at 31 December 2020 | - | 606 | 606 |
Amortisation charge for the year | - | 83 | 83 |
Write-offs | - | - | - |
Balance as at 31 December 2021 | - | 689 | 689 |
Amortisation charge for the year | - | 6 | 6 |
Write-offs | - | - | - |
Balance as at 31 December 2022 | - | 695 | 695 |
Net book value as at 31 December 2022 | 30,327 | 627 | 30,954 |
Net book value as at 31 December 2021 | 30,327 | 127 | 30,454 |
Net book value as at 31 December 2020 | 30,327 | 115 | 30,442 |
66
3 Intangible assets (continued)
Company
Goodwill
Software
Total
Acquisition cost:
Balance as at 31 December 2020
30,327
630
30,957
Additions
-
93
93
Write-offs
-
-
-
Balance as at 31 December 2021
30,327
723
31,050
Additions
-
506
506
Write-offs
-
-
-
Balance as at 31 December 2022
30,327
1,229
31,556
Accumulated amortization/impairment:
Balance as at 31 December 2020
-
522
522
Amortisation charge for the year
-
74
74
Write-offs
-
-
-
Balance as at 31 December 2021
-
596
596
Amortisation charge for the year
-
6
6
Write-offs
-
-
-
Balance as at 31 December 2022
-
602
602
Net book value as at 31 December 2022
30,327
627
30,954
Net book value as at 31 December 2021
30,327
127
30,454
Net book value as at 31 December 2020
30,327
108
30,435
67
Group | Machinery and | Other non- | ||
Acquisition cost: | equipment | Vehicles | current assets | Total |
Balance as at 31 December 2020 | 179 | 236 | 213 | 628 |
Additions | 9 | - | 9 | 18 |
Write-offs | - | - | - | - |
Balance as at 31 December 2021 | 188 | 236 | 222 | 646 |
Additions | 28 | - | 30 | 58 |
Write-offs | (2) | (64) | (1) | (67) |
Balance as at 31 December 2022 | 214 | 172 | 251 | 637 |
Accumulated depreciation: | ||||
Balance as at 31 December 2020 | 149 | 181 | 176 | 506 |
Depreciation for the year | 26 | 29 | 13 | 68 |
Write-offs | - | - | - | - |
Balance as at 31 December 2021 | 175 | 210 | 189 | 574 |
Depreciation for the year | 20 | 13 | 15 | 48 |
Write-offs | (2) | (64) | (1) | (67) |
Balance as at 31 December 2022 | 193 | 159 | 203 | 555 |
Net book value as at 31 December 2022 | 21 | 13 | 48 | 82 |
Net book value as at 31 December 2021 | 13 | 26 | 33 | 72 |
Net book value as at 31 December 2020 | 30 | 55 | 37 | 122 |
68
4 Property, plant and equipment (continued)
Company
Machinery and
equipment
Vehicles
Other non-
current assets
Total
Acquisition cost:
Balance as at 31 December 2020
151
243
97
491
Additions
9
-
-
9
Write-offs
-
-
-
-
Balance as at 31 December 2021
160
243
97
500
Additions
23
-
18
41
Write-offs
-
(64)
-
(64)
Balance as at 31 December 2022
183
179
115
477
Accumulated depreciation:
Balance as at 31 December 2020
123
189
80
392
Depreciation for the year
21
29
6
56
Write-offs
-
-
-
-
Balance as at 31 December 2021
144
218
86
448
Depreciation for the year
15
13
6
34
Write-offs
-
(64)
-
(64)
Balance as at 31 December 2022
159
167
92
418
Net book value as at 31 December 2022
24
12
23
59
Net book value as at 31 December 2021
16
25
11
52
Net book value as at 31 December 2020
28
54
17
99
Property, plant and equipment of the Group and the Company is used only for the Group’s and the Company’s purposes.
Depreciation expenses of the Group’s and the Company’s property, plant and equipment for 2022 and 2021 are included
within operating expenses.
Property, plant and equipment of the Group and the Company with acquisition cost of EUR 530 thousand and EUR 323
thousand, respectively, were fully depreciated as at 31 December 2022 (as at 31 December 2021: EUR 470 thousand and
EUR 331 thousand, respectively), but were still in use. Depreciated property, plant and equipment still in use consist of
computer hardware and other equipment.
The Group and the Company had several contracts of finance lease of offices concluded as at 31 December 2022 and 2021.
The terms of lease do not include restrictions of the activities of the Group and the Company in connection with the dividends,
additional borrowings or additional long-term leases.
2022 | ||
Group | Company | |
Acquisition cost | ||
Balance as at 31 December 2022 | 542 | 378 |
Accumulated depreciation | ||
Depreciation for the year | 204 | 139 |
Net book value as at 31 December 2022 | 338 | 239 |
69
2022 | ||
Group | Company | |
Depreciation expense on right-of-use assets | 204 | 139 |
Interest expense on lease liabilities | 17 | 12 |
Expense relating to short-term leases | 208 | 139 |
2021 | ||
Group | Company | |
Depreciation expense on right-of-use assets | 171 | 112 |
Interest expense on lease liabilities | 17 | 11 |
Expense relating to short-term leases | 157 | 103 |
2022 | ||
Group | Company | |
Non-current lease liabilities | 163 | 128 |
Current lease liabilities | 188 | 123 |
2021 | ||
Group | Company | |
Non-current lease liabilities | 207 | 134 |
Current lease liabilities | 171 | 108 |
2021 | ||
Group | Company | |
Acquisition cost | ||
Balance as at 31 December 2021 | 517 | 333 |
Accumulated depreciation | ||
Depreciation for the year | 171 | 112 |
Net book value as at 31 December 2021 | 346 | 221 |
70
5 Investments in subsidiaries
Investments into subsidiaries of the Company as at 31 December are as follows:
As at 31 December 2022 and 2021, impairment of investment into subsidiary SRL Novatours Holidays was accounted for.
Impairment of the investment in Aviaturas ir Partneriai UAB was accounted for as at 31 December 2022 and 2021.
As at 31 December 2022 and 2021, the shares of SIA Novatours, OU Novatours and UAB Aviaturas ir Partneriai, owned by
the Company, were pledged to the Luminor Bank AS in accordance with the long-term loan agreement (Note 11).
Group | Company | |||
As at 31 | As at 31 | As at 31 | As at 31 | |
December | December | December | December | |
2022 | 2021 | 2022 | 2021 | |
Prepayments and deferred expenses | 18,700 | 6,244 | 7,012 | 4,107 |
Less: impairment | (166) | - | - | - |
18,534 | 6,244 | 7,012 | 4,107 | |
2022
2021
Subsidiary
Acquisition
cost
Controlled
part, %
Net profit
(loss) of
subsidiary
Equity of
subsidiary
Acquisition
cost
Controlled
part, %
Net profit
(loss) of
subsidiary
Equity of
subsidiary
Novatours SIA
1,073
100
(393)
38
1,073
100
(175)
468
Novatours OU
1,786
100
(294)
6,380
1,786
100
931
6,697
Aviaturas ir
Partneriai UAB
361
100
27
78
361
100
76
56
Novatours Holidays
SRL
95
100
-
-
95
100
-
-
(Impairment)
(456)
-
-
-
(456)
-
-
-
Total
2,859
2,859
Group | Company | |||
As at 31 | As at 31 | As at 31 | As at 31 | |
December 2022 December 2021 | December 2022 December 2021 | |||
Trade receivables, gross | 927 | 298 | 870 | 269 |
VAT receivable | 85 | 159 | 32 | 132 |
Accrued revenue from government subsidies | 1,608 | 142 | 1,360 | 56 |
Other receivables | - | 170 | 2 | 173 |
Less: allowance for doubtful receivables | (408) | (131) | (399) | (120) |
2,212 | 638 | 1,865 | 510 | |
Group | Company | |
Individually assessed | Individually assessed | |
impairment | impairment | |
Balance as at 31 December 2020 | (131) | (120) |
Reversal of impairment for the year | - | - |
Written off amounts | - | - |
Impairment loss for the year | - | - |
Balance as at 31 December 2021 | (131) | (120) |
Reversal of impairment for the year | - | - |
Written off amounts | - | - |
Impairment loss for the year | (277) | (279) |
Balance as at 31 December 2022 | (408) | (399) |
Receivables, | |||||||||
neither past due nor | Less than | 30-60 | 60-90 | 90-120 | More than 120 | ||||
impaired | 30 days | days | days | days | days | Total | |||
2021 | 2 | 50 | 10 | 30 | 9 | 66 | 167 | ||
2022 | 431 | 19 | 10 | 17 | 11 | 30 | 518 | ||
Receivables, | ||||||||||
neither past due nor | Less than | 30-60 | 60-90 | 90 | -120 | More than 120 | ||||
impaired | 30 days | days | days | days | days | Total | ||||
2021 | 20 | 15 | 6 | 12 | 26 | 70 | 149 | |||
2022 | 421 | 4 | 4 | 13 | 9 | 20 | 471 | |||
71
72
Group | Company | ||||
As at 31 | As at 31 | ||||
As at 31 | As at 31 | December 2022 December 2021 | |||
Other current financial liabilities at other comprehensive income | December 2022 December 2021 | ||||
Derivatives that are subject to hedge accounting | |||||
(effective part) | - | 4 | - | 4 | |
Total other current and non-current financial | |||||
liabilities | - | 4 | - | 4 | |
Group | Company | |||
As at 31 | As at 31 | |||
December December | ||||
As at 31 December 2022 | As at 31 December 2021 | 2022 | 2021 | |
Cash at bank | 2,474 | 5,653 | 391 | 407 |
Cash on hand | 96 | 66 | 57 | 25 |
Cash in transit | - | - | - | |
Restricted cash | 200 | 200 | 200 | 200 |
2,770 | 5,919 | 648 | 632 | |
Group | Company | ||||
As at 31 | As at 31 | As at 31 | As at 31 | ||
Long term borrowings | December 2022 | December 2021 | December 2022 December 2021 | ||
Luminor Bank AS loan, annual interest rate – 3 | |||||
month EURIBOR + 3.80% | - | - | - | - | |
Luminor Bank AS long-term credit line, annual | |||||
interest rate – 3 month EURIBOR + 3.00% | 1,000 | 5,000 | 1,000 | 5,000 | |
Limited partnership “Pagalbos verslui fondas” | |||||
ordinary bonds of 5.60% | 5,000 | 5,000 | 5,000 | 5,000 | |
Altum loan, annual interest rate – 2.9% | 160 | 600 | - | - | |
Novatours OU loan, annual interest rate – 6 month | |||||
EURIBOR + 7.2% | - | - | 6,500 | 6,500 | |
Loan granted by Investicijų ir verslo garantijos | |||||
UAB, annual interest rate – 1.69%. | 1,735 | 2,208 | 1,735 | 2,208 | |
Average weighted annual interest rate on a liquidity loan and loan from State Social Insurance | |||||
Fund – 0.31% | 945 | 1,518 | 945 | 1,473 | |
Total non-current borrowings | 8,840 | 14,326 | 15,180 | 20,181 | |
Less: current portion of long-term borrowings | (1,975) | (2,094) | (1,975) | (1,578) | |
Current borrowings | 6,865 | 12,232 | 13,205 | 18,603 | |
Loan granted by Novatours SIA (EUR), annual | |||||
interest rate – 3.08% | - | - | - | - | |
Credit line facility, annual interest rate – 3-month | |||||
EURIBOR + 4.00% | - | - | - | - | |
Current portion of long-term loans | 1,975 | 2,094 | 1,975 | 1,578 | |
1,975 | 2,094 | 1,975 | 1,578 | ||
73
74
Group | Company | ||||
2022 | 2021 | 2022 | 2021 | ||
Current borrowings | - | - | - | - | |
Long term borrowings | 4.2% | 3.8% | 6.7% | 3.4% | |
Group | Company | ||||
As at 31 | As at 31 | As at 31 | As at 31 | ||
Years | December 2022 December 2021 | December 2022 December 2021 | |||
2022 | - | 2,094 | - | 1,578 | |
2023 | 1,975 | 707 | 1,975 | 578 | |
2024 | 758 | 2,245 | 758 | 2,245 | |
Later | 6,107 | 9,280 | 12,446 | 15,780 | |
8,840 | 14,326 | 15,180 | 20,181 | ||
As at 31 December, borrowings outstanding were denominated in national and foreign currencies as follows: | |||||
Group | Company | ||||
As at 31 | As at 31 | As at 31 | As at 31 | ||
December 2022 | December 2021 | December 2022 December 2021 | |||
Currency of the borrowing: | |||||
EUR | 8,840 | 14,326 | 15,180 | 20,181 | |
8,840 | 14,326 | 15,180 | 20,181 | ||
Group | Company | |||
As at 31 | As at 31 | As at 31 | As at 31 | |
December 2022 | December 2021 | December | December | |
2022 | 2021 | |||
Employment related liabilities | 306 | 403 | 73 | 143 |
Taxes payable (except for income tax) | 42 | 55 | 6 | 20 |
Other payables and accrued expenses | 3,397 | 870 | 1,350 | 465 |
3,745 | 1,328 | 1,429 | 628 | |
Group | Company | |||
2022 | 2021 | 2022 | 2021 | |
Flight package tours | 175,189 | 96,650 | 93,397 | 49,819 |
Sightseeing tours by coach | 1,360 | 103 | 1,360 | 103 |
Sightseeing tours by plane | 1,426 | 301 | 1,396 | 295 |
Other sales | 18,701 | 11,941 | 12,177 | 9,249 |
196,676 | 108,995 | 108,330 | 59,466 | |
Group | Company | |||
2022 | 2021 | 2022 | 2021 | |
Cost of flight package tours | 155,082 | 83,738 | 83,793 | 44,465 |
Cost of sightseeing tours by coach | 1,104 | 109 | 1,104 | 109 |
Cost of sightseeing tours by plane | 1,230 | 262 | 1,200 | 256 |
Cost of other sales | 20,172 | 11,397 | 10,563 | 7,174 |
177,588 | 95,506 | 96,660 | 52,004 | |
Group | Company | ||||
Selling expenses | 2022 | 2021 | 2022 | 2021 | |
Agency commissions | 11,439 | 6,288 | 5,556 | 2,663 | |
Salaries and related taxes | 2,842 | 1,779 | 1,682 | 1,108 | |
Advertising and marketing expenses | 1,091 | 595 | 685 | 369 | |
Depreciation and amortisation | 159 | 152 | 101 | 101 | |
Rent and maintenance expenses | 113 | 51 | 76 | 23 | |
Business trip expenses | 31 | 17 | 17 | 13 | |
Communication expenses | 44 | 35 | 9 | 13 | |
Transportation expenses | 24 | 29 | 17 | 16 | |
Representation expenses | 20 | 2 | 17 | 2 | |
Training expenses | - | - | - | - | |
Other | 41 | 19 | 24 | (129)* | |
15,804 | 8,967 | 8,184 | 4,179 | ||
75
Group | Company | |||
General and administrative expenses | 2022 | 2021 | 2022 | 2021 |
Salaries and related taxes | 1,637 | 1,014 | 1,475 | 815 |
Depreciation and amortisation | 103 | 169 | 80 | 142 |
Representation expenses | 97 | 35 | 64 | 20 |
Consulting expenses | 314 | 218 | 157 | 100 |
Business trip expenses | 14 | 8 | 10 | 7 |
Rent and maintenance expenses | 59 | 30 | 53 | 23 |
Transportation expenses | 40 | 35 | 40 | 30 |
Communication expenses | 28 | 22 | 15 | 14 |
Training expenses | 27 | 12 | 26 | 10 |
IT expenses | 182 | 155 | 176 | 152 |
Remuneration for Board members | 254 | 127 | 254 | 127 |
Personnel expenses | 72 | 74 | 60 | 58 |
Holiday pay reserve | 72 | 53 | 54 | 63 |
Provision for doubtful accounts | 179 | 19 | 179 | 19 |
Tour operator insurance | 82 | 72 | 55 | 55 |
Bank commissions | 111 | 73 | 58 | 37 |
Inventory and similar expenses | 39 | 8 | 32 | 5 |
Other | 222 | 104 | 137 | 24 |
3,532 | 2,228 | 2,925 | 1,701 | |
Group | Company | |||
2022 | 2021 | 2022 | 2021 | |
Foreign exchange gain | 936 | 1 | 759 | - |
Other financial income (including fines and penalties) | 257 | 69 | 7 | 69 |
Finance income | 1,193 | 70 | 766 | 69 |
Interest expense | (731) | (1,098) | (1,254) | (1,239) |
Loss from derivatives | (671) | - | (671) | - |
Foreign currency exchange loss | (626) | (437) | (194) | (306) |
Other finance expenses | (142) | (141) | (2) | |
Finance expenses | (2,170) | (1,535) | (2,260) | (1,547) |
(977) | (1,465) | (1,494) | (1,478) | |
Components of the income tax expenses | 2022 | Group | 2021 | 2022 | Company | 2021 |
(income) | ||||||
Current income tax for the reporting year | 9 | - | - | - | ||
Deferred tax expenses for current period | (12) | 29 | (47) | 26 | ||
Tax expenses of previous periods | 76 | - | 76 | - | ||
Deferred tax expense of prior periods | (10) | - | (8) | - | ||
Income tax (income) expenses recorded in the statement of comprehensive income | 63 | 29 | 21 | 26 |
76
77
Group | Company | ||||
Deferred income tax asset | 2022 | 2021 | 2022 | 2021 | |
Tax loss carry forward | 670 | 658 | 670 | 658 | |
Impairment of investments and loans granted | - | - | - | - | |
Impairment of receivables | 139 | 166 | 139 | 140 | |
Unrealised loss of derivatives | - | 1 | - | 1 | |
Other accruals | 63 | 26 | 63 | 18 | |
Deferred tax asset, net of fair value allowance | 872 | 851 | 872 | 817 | |
Deferred tax liability | |||||
Amortisation of goodwill | - | - | - | - | |
Unrealised gain of derivatives | - | - | - | - | |
Deferred tax liability | - | - | - | - | |
Deferred tax, net | 872 | 851 | 872 | 817 | |
Deferred income tax asset | 872 | 851 | 872 | 817 | |
Deferred tax liabilities | - | - | - | - | |
Recognized in | ||||
other | Balance as at | |||
Recognized in | comprehensive | 31 December | ||
profit or loss | income | 2022 | ||
Tax loss carry forward | 4,388 | 79 | 4,467 | |
Impairment of investments and loans granted | - | - | ||
Allowance for doubtful accounts receivable | 1,110 | (183) | 927 | |
Amortization of goodwill and other intangibles | - | - | ||
Derivatives | 3 | (3) | - | |
Other accruals | 170 | 254 | 424 | |
Total temporary differences before valuation | ||||
allowance | 5,671 | 150 | (3) | 5,818 |
Less: allowance | - | - | - | - |
Total temporary differences | 5,671 | 150 | (3) | 5,818 |
Deferred tax, net | 851 | 21 | - | 872 |
78
17 Income tax (continued)
The changes of temporary differences before and after tax effect in the Company were as follows:
Balance as at
31 December
2021
Recognized in
profit or loss
Recognized in
other
comprehensive
income
Balance as at
31 December
2022
Tax loss carry forward
4,388
79
-
4,467
Impairment of investments and loans granted
1,495
-
-
1,495
Allowance for doubtful accounts receivable
934
(7)
927
Derivatives
3
-
(3)
-
Other accruals
123
297
-
420
Amortisation of goodwill
-
-
-
-
Total temporary differences before valuation
allowance
6,943
369
(3)
7,309
Less: allowance
(1,495)
-
-
(1,495)
Total temporary differences
5,448
369
(3)
5,814
Deferred tax, net
817
55
-
872
Recognized in | ||||
Balance as at | other | Balance as at | ||
31 December | Recognized in | comprehensive | 31 December | |
2020 | profit or loss | income | 2021 | |
Tax loss carry forward | 4,610 | (222) | 4,388 | |
Impairment of investments and loans granted | - | - | ||
Allowance for doubtful accounts receivable | 1,092 | 18 | 1,110 | |
Amortization of goodwill and other intangibles | - | |||
Derivatives | 495 | (492) | 3 | |
Other accruals | 160 | 10 | 170 | |
Total temporary differences before valuation | ||||
allowance | 6,357 | (194) | (492) | 5,671 |
Less: allowance | - | - | - | - |
Total temporary differences | 6,357 | (194) | (492) | 5,671 |
Deferred tax, net | 954 | (29) | (74) | 851 |
Balance as at
31 December
2020
Recognized in
profit or loss
Recognized in
other
comprehensive
income
Balance as at
31 December
2021
Tax loss carry forward
4,610
(222)
-
4,388
Impairment of investments and loans granted
1,495
-
-
1,495
Allowance for doubtful accounts receivable
915
19
934
Derivatives
495
-
(492)
3
I Other accruals
96
27
-
123
Amortisation of goodwill
-
-
-
-
Total temporary differences before valuation
allowance
7,611
(176)
(492)
6,943
Less: allowance
(1,495)
-
-
(1,495)
Total temporary differences
6,116
(176)
(492)
5,448
Deferred tax, net
917
(26)
(74)
817
17 Income tax (continued)
79
Group | Company | ||||
2022 | 2021 | 2022 | 2021 | ||
Income tax expenses (income) computed at statutory rate 15% | (123) | 140 | (107) | 19 | |
Effect of different tax rate applicable to foreign | |||||
subsidiaries | (13) | (139) | - | - | |
Change in deferred tax asset valuation | |||||
allowance | - | - | - | - | |
Non-deductible expenses for tax purposes (not taxable income) | 131 | 28 | 59 | 7 | |
Current income tax expenses | (5) | - | (47) | - | |
Adjustment for current income tax attributable to previous periods | 68 | - | 68 | - | |
Income tax expenses reported in the statement of comprehensive income | 63 | 29 | 21 | 26 | |
2022 | 2021 | |||||
Group | Assets | Liabilities | Assets | Liabilities | ||
EUR | 3,995 | 24,630 | 7,248 | 19,861 | ||
USD | 987 | 2,578 | - | 1,233 | ||
4,982 | 27,208 | 7,248 | 21,094 | |||
2022 | 2021 | |||||
Company | Assets | Liabilities | Assets | Liabilities | ||
EUR | 1 825 | 21,635 | 1,961 | 24,527 | ||
USD | 688 | 1,088 | - | 284 | ||
2,513 | 22,723 | 1,961 | 24,811 |
Group | Company | |||
Effect on the | ||||
profit before Fluctuations in | Fluctuations in Effect on the | |||
2022 | exchange rate | tax | exchange rate profit before tax | |
USD | (10%) | (159) | (10%) | (40) |
USD | (10%) | 159 | 10% | 40 |
2021 | ||||
USD | (10%) | (40) | (10%) | (30) |
USD | 10% | 40 | 10% | 30 |
80
Carrying amount | Fair value | |||
As at 31 | As at 31 | As at 31 | As at 31 | |
December 2022 | December 2021 | December 2022 | December 2021 | |
Financial assets | ||||
Restricted cash | 200 | 200 | 200 | 200 |
Cash and cash equivalents | 2,570 | 5,719 | 2,570 | 5,719 |
Trade receivables | 518 | 167 | 518 | 167 |
Other current financial assets: | - | - | - | - |
Other receivables | 1,609 | 471 | 1,609 | 471 |
Financial liabilities | ||||
Interest bearing borrowings | 8,840 | 12,808 | 8,840 | 12,808 |
Trade accounts payable (including trade | ||||
accounts payable to related parties) | 14,272 | 4,896 | 14,272 | 4,896 |
Other current and non-current financial | ||||
liabilities | - | 4 | - | 4 |
Other current liabilities and accrued | ||||
expenses | 3,397 | 1,328 | 3,397 | 1,328 |
Set out is a comparison of carrying amounts and fair values of all of the Company’s financial instruments that are carried in
the financial statements:
Carrying amount
Fair value
As at 31
December 2022
As at 31
December 2021
As at 31
December 2022
As at 31
December 2021
Financial assets
Restricted cash
200200
200
200
Cash and cash equivalents 448432
448
432
Receivables from related parties 567177
567
177
Trade receivables 471149
471
149
Other current financial assets: - -
-
-
Other receivables 1,362 361
1,362
361
Financial liabilities
Interest bearing borrowings
14,812 18,708
14,812
18,708
Interest free loans 368-
368
-
Trade accounts payable (including trade
accounts payable to related parties)
10,868 3,621
10,868
3,621
Other current and non-current financial
liabilities
- 4
-
4
Other current liabilities and accrued
expenses
1,350 628
1,350
628
81
82
From | |||||
Less than 3 | 3 to 12 | From | |||
On demand | months | months | 1 to 5 years | Total | |
Interest bearing borrowings | - | 457 | 1,859 | 7,869 | 10,185 |
Trade accounts payable and accounts | |||||
payable to related parties | - | 14,272 | - | - | 14,272 |
Other current financial liabilities | - | - | - | - | - |
Other current liabilities | - | 3,745 | - | - | 3,745 |
Balance as at 31 December 2022 | - | 18,474 | 1,859 | 7,869 | 28,202 |
Interest bearing borrowings | - | 591 | 1,782 | 13,495 | 15,868 |
Trade accounts payable and accounts | |||||
payable to related parties | - | 4,896 | - | - | 4,896 |
Other current financial liabilities | - | 4 | - | - | 4 |
Other current liabilities | - | 1,328 | - | - | 1,328 |
Balance as at 31 December 2021 | - | 6,819 | 1,782 | 13,495 | 22,096 |
83
18 Financial assets and liabilities and risk management (continued)
The table below summarizes the maturity profile of the Company’s balance sheet financial liabilities as at 31 December 2022
and 2021 based on undiscounted contractual payments (the maturity is based on long-term loan not reclassified into current
loans as Company received waiver from bank for covenant breach and subsequently signed amendments to long-term loan
agreement):
On
demand
Up to 3
months
From
3 to 12
months
From
1 to 5 years
Total
Interest bearing borrowings
-
441
2,399
16,045
18,885
Trade accounts payable and accounts
payable to related parties
-
10,868
-
-
10,868
Other current financial liabilities
-
-
-
-
-
Other current liabilities
-
1,429
-
-
1,429
Balance as at 31 December 2022
-
12,738
2,399
16,045
31,182
Interest bearing borrowings
-
462
1,394
19,866
21,722
Trade accounts payable and accounts
payable to related parties
-
3,621
-
-
3,621
Other current financial liabilities
-
4
-
-
4
Other current liabilities
-
628
-
-
628
Balance as at 31 December 2021
-
4,715
1,394
19,866
25,975
Group | Company | |||
As at 31 December | As at 31 December | As at 31 December | As at 31 December | |
2022 | 2021 | 2022 | 2021 | |
Non-current liabilities | 7,044 | 12,439 | 13,333 | 18,737 |
Current liabilities | 34,578 | 17,114 | 21,754 | 10,462 |
Total liabilities | 41,622 | 29,553 | 35,087 | 29,199 |
Equity, attributable to the equity holders of the parent | 14,273 | 15,088 | 10,004 | 10,713 |
Liabilities to equity ratio | 2.92 | 1.96 | 3.51 | 2.73 |
84
The shareholders of the Company are disclosed in Note 1.
2022
Acquisitions
Sales
Receivables
(including loans
granted)
Payables (including
loans received)
The shareholders of the Company
-
-
-
-
Subsidiaries
2,611
6,310
566
10,246
2,611
6,310
566
10,246
2021
Acquisitions
Sales
Receivables
(including loans
granted)
Payables (including
loans received)
The shareholders of the Company
-
-
-
-
Subsidiaries
1,282
4,664
177
9,059
1,282
4,664
177
9,059
As at 31 December 2022 and 2021, there were no guaranties provided or assets pledged for any related party receivable or
payable amounts. It is expected to cover receivable and payable amounts with related parties by cash payments or offsetting
with payables/receivables from these parties.
Transactions with related parties of the Company include purchases and sales of travel packages. The conditions of loans
received from the Group companies are disclosed in Note 11.
The ageing analysis of the Company’s receivables from related parties as at 31 December 2022 and 2021:
Receivables neither past
due nor impaired
Receivables past due but not impaired
Total
Less than
30 days
31–60 days
61–90
days
More than
91 days
2022
566
-
-
-
-
566
2021
177
-
-
-
-
177
There were no guarantees provided, other payments made, expenses recognized or assets transferred to the management
of the Group and of the Company.
Sightseeing | Sightseeing | ||||
tours by | Other sales | ||||
coach | tours by plane | Group | |||
Sales | 175,189 | 1,360 | 1,426 | 18,701 | 196,676 |
Cost of sales | (155,082) | (1,104) | (1,230) | (20,172) | (177,588) |
Gross profit | 20,107 | 256 | 196 | (1,471) | 19,088 |
Sales commission expenses | (11,358) | (39) | (43) | - | (11,439) |
Sales profit by segment | 8,749 | 217 | 153 | (1,471) | 7,649 |
Unallocated income (expenses) | |||||
Other operating income | 469 | ||||
Operating expenses (other than sales commission) | (7,897) | ||||
Other operating (expenses) | 1 | ||||
Profit from operations | 222 | ||||
Finance income (expenses), net | (977) | ||||
Profit before tax | (755) | ||||
Income tax (expenses) | (63) | ||||
Net profit | (818) |
86
Sightseeing | Sightseeing tours | Other sales | |||
tours by coach | by plane | Group | |||
Sales | 96,650 | 103 | 301 | 11,941 | 108,995 |
Cost of sales | (83,738) | (109) | (262) | (11,397) | (95,506) |
Gross profit | 12,912 | (6) | 39 | 544 | 13,489 |
Sales commission | |||||
expenses | (6,263) | (2) | (23) | - | (6,288) |
Sales profit by segment | 6,649 | (8) | 16 | 544 | 7,201 |
Unallocated income | |
(expenses) | |
Other operating income | 111 |
Operating expenses (other than sales commission) | (4,907) |
Other operating (expenses) | (2) |
Profit from operations | 2,403 |
Finance income | |
(expenses), net | (1,465) |
Profit before tax | 938 |
Income tax (expenses) | (29) |
Net profit | 909 |
As at 31 December 2022 | Lithuania | Latvia | Estonia | Other | Group |
Sales | 104,858 | 39,149 | 52,670 | - | 196,677 |
Non-current assets | 686 | 13 | 11 | - | 710 |
As at 31 December 2021 | Lithuania | Latvia | Estonia | Other | Group |
Sales | 57,145 | 17,655 | 34,195 | - | 108,995 |
Non-current assets | 179 | 12 | 8 | - | 199 |
87
Group | Non-cash changes | Group | ||||
Cash | Cash | |||||
flows | flows | |||||
from/used | from/used | |||||
As at 1 | in | As at 31 | As at 1 | in | As at 31 | |
January | financing | Decemb | January | financing | Decemb | |
2022 | activities | er 2022 | 2021 | activities | er 2021 | |
Bank loans | 14,326 | (5,486) | 8,840 | 16,853 | (2,527) | 14,326 |
Loans from related parties | - | - | - | - | ||
Total liabilities from financing | ||||||
activities | 14,326 | (5,486) | 8,840 | 16,853 | (2,527) | 14,326 |
Non-cash changes
Company
Company
As at 1
January
2022
Cash
flows
from/used
in
financing
activities
As at 31
Decemb
er 2022
As at 1
January
2021
Cash
flows
from/used
in
financing
activities
As at 31
Decemb
er 2021
Bank and tax credits
13,681
(5,000)
8,681
15,828
(2,147)
13,681
Loans from related parties
6,500
-
6,500
7,800
(1,300)
6,500
Total liabilities from financing
activities
20,181
(5 000)
15 181
23,628
(3,447)
20,181
*****
88