Annual Report 2022
Photon Energy N.V.
Photon Energy N.V.
Annual Report 2022
Contact Details:
Photon Energy N.V.
Barbara Strozzilaan 201, 1083 HN, Amsterdam, The Netherlands
Legal form: Joint-stock company (Naamloze Vennootschap)
Registration: Dutch Chamber of Commerce (Kamer van Koophandel)
Company No.: 51447126
Tax No.: NL850020827B01
Web: photonenergy.com
E-mail: info@photonenergy.com
This report is available online at photonenergy.com
For questions contact our Investor Relations Department at ir@photonenergy.com
Photo on page 12–13: Nate Paul Productions
Photo on page 74–75: Lord Howe Island Board / Jack C Shick
Clean energy and water.
The fundamentals of life.
103.6 MWp
proprietary portfolio
380+ MWp
O&M portfolio
280+
employees
900+ MWp
PV projects in development
Active in
16 countries
Founded
in
2008
CO
2
e savings of
49,013 tonnes
in 2022
121.6 GWh
of clean
energy produced in 2022
Shares traded in
Poland,
Germany
and
the Czech Republic
3
Table of Contents
Financial Information
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Facts and Figures.
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Letter from the Management
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Who We Are
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What We Do .
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Sustainability
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Leadership .
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Our Team .
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Our Markets
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Our Competitive Strengths .
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Our History .
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29
2022 in Review .
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Selected Projects .
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Strategy and Results in 2022 .
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Our Media Presence
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Proprietary PV Portfolio
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Our Shares and Bonds.
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Directors’ Report
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Developments in 2022
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Strategy for 2023 and Beyond
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Shareholder Structure .
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Culture and Values .
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Risk Management
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Corporate Social Responsibility
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Going Concern
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Fraud Management
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Anti-Takeover Measures
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Articles of Association .
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Subsequent Events .
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Board of Directors’ Statement
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Corporate Governance Report.
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Supervisory Board Report .
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Remuneration Report
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Financial Statements
for the Year Ended 31 December 2022
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Consolidated Financial Statements
for the Year Ended 31 December 2022
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Notes to the Consolidated Financial Statements
for the Year Ended 31 December 2022
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Standalone Financial Statements
for the Year Ended 31 December 2022
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Notes to the Company Financial Statements
for the Year Ended 31 December 2022
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Other Information
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Independent Auditor’s Report
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Management Report
Introduction
Company Profile
Financials
5
Komorovice, Czech Republic
Introduction
Financial Information
Note:
All financial figures throughout this report are provided in Euro (EUR). Figures stated in other currency such as Polish Złoty (PLN) and Czech
Koruna (CZK) are provided for information purposes only.
Figures provided in PLN and CZK were translated in accordance with IAS 21 as follows: Statement of Comprehensive Income – at the average
exchange rate for given period; Statement of Financial Position – at the closing exchange rate for given period.
For simplicity, the following separators were used throughout this report: point “.” for decimals, comma “,” for thousand and million.
In thousands
EUR
PLN
CZK
2022
2021
2022
2021
2022
2021
Revenue
95,136
36,359
445,684
165,970
2,337,032
932,436
Earnings before interest, taxes,
depreciation & amortisation (EBITDA)
24,308
9,584
113,877
43,747
597,137
245,773
Results from operating activities (EBIT)
16,984
-712
79,566
-3,250
417,219
-18,258
Profit / loss before taxation (EBT)
8,725
-5,927
40,875
-27,055
214,335
-151,999
Profit / loss
6,262
-6,433
29,335
-29,364
153,823
-164,969
Other comprehensive income
1,410
8,528
6,605
38,929
34,633
218,705
Total comprehensive income
7,672
2,095
35,939
9,565
188,455
53,735
Non-current assets
189,279
142,463
885,961
654,889
4,564,472
3,541,639
Current assets
64,548
54,155
302,129
248,946
1,556,567
1,346,301
Of which Liquid assets
21,358
39,362
99,969
180,944
515,041
978,548
Total assets
253,826
196,618
1,188,085
903,831
6,121,015
4,887,916
Total equity
70,475
51,538
329,871
236,914
1,699,494
1,281,233
Non-current liabilities
149,792
111,122
701,131
510,815
3,612,228
2,762,489
Current liabilities
33,559
33,958
157,078
156,101
809,265
844,196
Operating cash flow
2,847
6,221
13,339
28,399
69,945
159,547
Investment cash flow
-33,429
-14,233
-156,606
-64,971
-821,197
-365,013
Financial cash flow
9,348
30,625
43,793
139,793
229,636
785,372
Net change in cash
-21,234
22,613
-99,475
103,222
-521,616
579,910
EUR exchange rate – low
–
–
4.493
4.451
24.115
24.860
EUR exchange rate – average
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–
4.685
4.565
24.565
25.645
EUR exchange rate – end of period
–
–
4.681
4.597
24.115
24.860
EUR exchange rate – high
–
–
4.953
4.716
25.865
26.420
8
Facts and Figures
Cash Flow Profile in 2022
(In thousands of EUR)
EBITDA
(In thousands of EUR)
Total Assets
(In thousands of EUR)
Total Revenues
(In thousands of EUR)
Total Comprehensive Income
(In thousands of EUR)
Breakdown of Liabilities and Equity
Total equity
Financial
cash flow
Non-current
liabilities
Operating
cash flow
In 2022, the Group’s revenues increased by 161.7% to hit a record
EUR 95.136 million, thanks to an 81.6% increase in revenues from
the sale of electricity generated by a growing proprietary portfo-
lio selling electricity on the market, while other revenue streams
increased by a remarkable 253.2% YOY, driven by a sound pro-
curement strategy.
EBITDA improved to EUR 24.308 million (+153.6% YOY), while
EBIT swung from a loss of EUR -0.712 million to a EUR 16.984
million profit.
Bottom line, the Group reported a net profit of EUR 6.262 million
compared to a EUR -6.433 million loss in 2021 and a TCI of EUR
7.672 million compared to EUR 2.096 million a year ago.
Equity increased by 36.7% YOY, while the adjusted equity ratio
increased at a sound level of 32.0%.
Current
liabilities
Investment
cash flow
2019
2020
2021
2022
2021
2018
2019
2020
2021
2022
2022
2018
2018
2019
2020
2021
2022
2022
2018
2019
2020
2021
2018
2019
2020
20,256
30,154
28,258
36,359
95,136
2,531
8,064
7,672
2,084
2,095
63%
65%
59%
56%
64%
9%
10%
13%
17%
8%
28%
25%
28%
26%
28%
196,618
253,826
8,145
106,348
7,942
8,440
9,584
24,308
137,018
158,905
Cash
31.12.2021
Cash
31.12.2022
9,348
11,271
32,506
-33,429
2,847
9
Dear Stakeholders,
We saw a very eventful year in 2022, with continued project devel-
opment activities across our key markets, as well as the strategic
expansion of our business model through the full acquisition of
Lerta, including its Virtual Power Plant (VPP) technologies and
energy market services. We increased revenues by 161.7% to a
record EUR 95.136 million, exceeding our guidance of EUR 85.0
million, and EBITDA by 153.6% to a record EUR 24.308 million,
meeting our guidance of EUR 24.0 million. Throughout the year, we
delivered on our growth strategy by finalising construction works on
projects with a combined capacity of 32 MWp in Romania, with the
first of these plants commissioned in February 2023. In addition, we
acquired the development rights for a 9.8 MWp/10 MWh solar-and-
battery energy storage system facility in Australia. This represents
our first utility-scale solar-plus-storage installation and will serve as
a prototype for a future roll-out across our European markets. We
also refinanced our PV assets in the Czech Republic and launched
a B2B eCommerce platform to strengthen our position as a lead-
ing supplier of PV modules, inverters and batteries across the CEE
region at a time of skyrocketing demand. We are very excited to
embark on the next steps in our journey together.
Key Achievements
In 2022, we completed and connected one power plant with a
combined capacity of 1.4 MWp in Hungary and started the con-
struction on a combined 32 MWp in Romania. We decided to enter
the Hungarian market in 2017, followed by the Romanian market
shortly after. Although Romania was probably the least popular
solar market in Europe at that time, we began sowing the seeds of
our presence there with our projects currently under construction.
We were among the first investors in this now booming investment
market. In Hungary, we have built nearly 52 MWp, of which a total
of 46.2 MWp operates on a merchant basis. Switching to a mer-
chant model has become the financial backbone of our business,
improving the Group’s profitability and maximising the return on
investment on our Independent Power Producer (IPP) portfolio.
There is now a regulatory response to high energy prices with the
decision made, at the EU level, that power plants should not gener-
ate more than EUR 180 per MWh. While it has a certain impact
on our business, this amount remains well above our profitability
requirements, when compared to our Levelized Cost of Electricity
(LCOE).
Since the very beginning, the fuel for our strategy has been project
development. That means that we control a pipeline of projects
that we very often develop from scratch, or co-develop in some
instances. Having control is extremely important, as the integration
of in-house development and engineering to our projects makes
us the master of our own destiny. From the moment we have all
permits in place, the construction process is executed based on
projects which are designed for long-term ownership. In Europe,
we have increased our project pipeline in Hungary, Poland and
Romania to a combined 617 MWp (+29.7% YOY).
While our focus for growth will be on expanding our PV capacity in
these countries, as well as in Australia, we are also investigating
further markets in the region. In terms of EPC, we also had posi-
tive developments in our efforts to both build power plants for our
own portfolio and to serve external customers. In Central Europe,
we completed behind-the-meter projects for customers in Poland,
Slovakia and Romania.
In Australia, we acquired the development rights and land for a 9.8
MWp/10 MWh solar-and-battery energy storage system facility in
New South Wales. This transaction marks a significant milestone
as Photon Energy Group’s first utility-scale solar-and-battery stor
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age project. This project will make a meaningful contribution to the
NSW Government’s objective to deliver a 50% cut in emissions by
2030, compared to 2005 levels.
In the area of remediation, which is a process used to eliminate
various contaminants from water and soil, we successfully filed
for a patent on our in-situ nanoremediation technology. The most
significant project in this area is in Australia, with the Department
of Defence, where we are engaged in a trial project to eliminate
per- and polyfluorinated substances (PFAS) contamination.
2022 was also an exciting year with regards to our presence on
capital markets. In the second half of the year, we increased the
placement of our Green Bond to EUR 77.5 million, and to a total
Letter from the Management
Co-founder and CEO Georg Hotar (L) with
co-founder and CTO Michael Gartner (R)
10
EUR 80.0 million as of the publication date for this report. Through
these bond taps, we managed to win new institutional investors.
This is the first of our bonds to be rated as ‘green bond’, which
means that we comply with a wide suite of ESG criteria, confirmed
by a Second Party Opinion from imug | rating. This underlines our
commitment to sustainable development and transparency for our
stakeholders.
Last but not least, after more than three years of ever closer
cooperation between our companies, we acquired a full control of
Lerta S.A. Founded in 2016, Poland-based Lerta initially operated
as a software provider for traditional utilities. Over the years, the
company evolved into an independent, asset-free energy company
focused on the optimisation of renewable energy sources and
energy flexibility. Its proprietary AI software platform, Lerta Energy
Intelligence, allows Lerta to forecast and optimise the output of
renewable power plants and the load of industrial clients based on
current prices and grid needs.
This allows Lerta to simultaneously transform a rooftop or a plot of
land or roof into a high-performance renewable generation asset,
support energy consumers in adapting to new market realities and
optimising their energy costs, while also helping network opera-
tors to balance their grids and to avoid blackouts. Since its incep-
tion, Lerta has grown to become Poland’s third-largest renewable
energy aggregator, with energy trading licenses in six countries
across Central and Eastern Europe.
We can confidently state that
this acquisition is the result of a perfect synergy of vision, values,
entrepreneurial spirit and long-term thinking.
Outlook for 2023
Our business model began with an offer of comprehensive ser
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vices for solar power plants, from development and engineering to
maintenance. From there, we focused on developing our own port-
folio of proprietary power plants, the vast majority of which is now
selling clean energy directly to the market. Looking ahead to 2023,
we see many opportunities for growth in the established Australian
and Hungarian markets and the newly added Polish and Romanian
markets for the expansion of PV generation capacity.
The Group also intends to continue to disrupt and transform the
PV industry. This is illustrated by our investment in RayGen, a
company specialising in high-efficiency concentrated PV genera
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tion with thermal absorption and storage, as well as the aforemen-
tioned integration of Lerta. By combining our products and services
with Lerta, we can now offer comprehensive, integrated renewable
energy solutions to both energy generators and consumers. In
addition to these exciting prospects, we will retain our focus on
the expansion of our operations and maintenance (O&M) solutions
and the development of various water treatment technologies, as
well as their preparation for their commercialisation.
Based on the status quo of price caps and windfall taxes adopted
by the governments in the Group’s core markets in the CEE region,
the management board expects a modest negative impact in the
Czech Republic and Hungary and no negative impact in Slovakia
and Romania, with a potential slowdown in roll-out plans in Poland.
New capacity additions in Romania and Hungary are expected to
drive material revenue and EBITDA growth in 2023 and beyond.
Resulting from our operating leverage manifesting across all of our
business lines, consolidated revenues for 2023 are expected to
increase to EUR 150.0 million from EUR 95.1 million in 2022, rep-
resenting a 57.7% increase YOY, leading to an increase of EBITDA
to EUR 29.0 million from EUR 24.3 million in 2022 (+19.3% YOY).
Financial Results
In 2022, the Group’s revenues increased by 161.7% to hit a record
EUR 95.136 million, thanks to an 81.6% increase in revenues from
the sale of electricity, primarily attributable to higher revenues from
the electricity production generated by the Company’s new power
plants operating on a merchant basis as well as to high electricity
prices on the market, while other revenue streams increased by a
remarkable 253.2% YOY, driven by a sound procurement strategy.
EBITDA hit a record EUR 24.308 million (+153.6% YOY), while
EBIT swung from a loss of EUR -0.712 million to a EUR 16.984
million profit. We reported a net profit of EUR 6.262 million com
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pared to a EUR -6.433 million loss in 2021. TCI amounted to EUR
7.672 million compared to EUR 2.096 million a year ago, while the
adjusted equity ratio increased at a sound level of 32.0%.
We met our full-year 2022 financial guidance to increase our con
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solidated revenues to EUR 85.0 million from EUR 36.4 million in
2021, and EBITDA to EUR 24.0 million from EUR 9.6 million in
2021.
For the past fifteen years, we have provided services for solar
installations around the world, built a proprietary portfolio of 92 PV
power plants with a total capacity of 103.6 MWp (as of the pub-
lishing date of this report), become an independent clean energy
provider and expanded the scope of our work, establishing Photon
Water to deliver ground-breaking clean water solutions and inte-
grating Lerta, a next-generation energy company.
Over this time, our team has grown from six people to nearly 300
in seven countries across two continents. In a consolidation of
our experience and expertise, we embarked on an exciting path
combining solar energy, energy storage and water technologies to
create more wide-ranging, adaptable water and renewable energy
solutions.
We would like to thank you all for your continued support, and
for the trust you have bestowed upon our company, while special
thanks go to our hard-working employees who remain the lifeblood
of Photon Energy Group.
Amsterdam, 24 April 2023
Board of Directors
Michael Gartner, Director
Georg Hotar, Director
11
Leeton, Australia
Company Profile
Delivering the
fundamentals of life.
At Photon Energy Group, we are dedicated to en-
suring that everyone has access to clean, afford-
able energy and water. We deploy technology
to provide these fundamentals and help build a
thriving, sustainable world.
We take a holistic approach to our work, within
our companies and as a group, offering solutions
that can be delivered separately or as an integrat-
ed package. This allows us to meet the complete
needs of our customers and takes us closer to a
world where energy and water – the fundamen-
tals of life – are clean, safe and accessible to all.
Photon Energy N.V., the holding company for
Photon Energy Group, is listed on the Warsaw,
Prague and Frankfurt Stock Exchanges.
We are headquartered in Amsterdam, with offices
in Australia and across Europe.
Who We Are
Slavkov, Czech Republic
14
Our Values
Innovation
Sustainability
Integrity
Safety
Community
We think creatively to deliver
solutions and actualise our vision.
We understand the importance of
foresight and long-term thinking.
We operate with honesty and respect,
and we never compromise our values.
We prioritise the health and well-being
of everyone impacted by our work.
We believe it is our responsibility to enrich
every community we are a part of.
15
Photon Energy delivers clean energy solutions to
energy producers and consumers. Our compre-
hensive products and services cover the entire
lifecycle of photovoltaic systems.
Beyond the work we do with our customers, we are
also an independent power producer: we develop
build, own and operate PV installations around
the world.
A recent acquisition of Photon Energy Group,
Lerta delivers clean energy directly to consum-
ers through its Virtual Power Plant. The Lerta
VPP aggregates and distributes clean energy
from a variety of sources, including solar, wind
and biogas.
Since its founding, Lerta has grown to become
Poland’s third-largest renewable energy aggre-
gator, with energy trading licenses in six countries
across Central and Eastern Europe.
What We Do
Engineering
We design and build PV
installations and energy storage
systems.
Project Development
We acquire projects of all sizes,
at all stages of development,
and guide them to completion.
Technology
We procure and trade PV
components to fit any project’s
location, design and budget.
Operations and
Maintenance
We provide a full range of O&M
services, including monitoring and
inverter maintenance.
16
Photon Water provides clean water solutions for
all environments, from treatment and remedia-
tion services to the management of wells and
other water resources.
We also work closely with leading academic insti-
tutions and participate in governmental research
programmes to develop cutting-edge water
treatment and management solutions.
Remediation
We offer a range of remediation
services to eliminate contaminants
from groundwater and soil.
Water Treatment
We deliver treatment solutions
including potable and wastewater
treatment, hazardous liquid waste
and industrial water treatment.
Water Resource
Management
We help our customers optimise the
use of water resources such as lakes,
ponds and industrial water bodies.
Wells and Resources
We provide complete services for
wells and water resources, from
design to maintenance.
17
Sustainability
We view independent sustainability ratings as a
way to ensure that we hold ourselves to the high-
est standards, and to provide our stakeholders
with confidence in our genuine commitment to a
sustainable business model.
In 2021, we were awarded a rating of ‘very good’ by
imug | rating, attributed based on the following
scale: weak, moderate, good, very good, excellent.
A renewal of our ESG rating profile has been initi-
ated and the result of the process will be available
on 4 May 2023.
imug | rating has been active in the fields of sus-
tainable finance and socially responsible invest-
ment (SRI) for over 20 years. It is one of the leading
sustainability rating agencies in Germany and a
specialist in customised ESG research.
Our 2022 Sustainability Report has been prepared
in accordance with the GRI framework. We believe
that GRI reporting in-creases accountability and
provides transparency surrounding our sustain-
ability goals, efforts and outcomes.
The GRI reporting framework consists of univer-
sal standards and topic standards that organisa-
tions can use to prepare and report information
that showcases significant sustainability impacts.
Sustainability Rating
GRI Framework
Highlights of 2022
Our
Green Bond
was
tapped to EUR 77.5 million
Tracking of our
CO
2
e footprint
across scope 1, scope 2 and scope 3
emissions
Pilot project to test our
in-situ
nanoremediation technology
with
experts from universities in Liberec
and Stuttgart
Development of
internal training
course
related to insider trading and
our Code of Ethics
Employee engagement
and
ESG survey
Further details are available in our 2022 Sustainability Report at
photonenergy.com/sustainability
.
Creation of a donation policy,
including the establishment of
CSR
days for employees
18
We are committed to upholding the highest environmental,
social and governance standards in all of our practices, on every scale.
All of our field operations are subject to local environmental
regulations, which we strictly adhere to.
When disposing of waste, all recyclable materials such as
metal, wood, plastic, glass and paper are sorted and recycled.
We do not use chemical fertilisers or pesticides for landscape
management.
We use only demineralised water to clean PV panels, not
chemical agents.
When clearing land to construct new power plants, we con-
duct in-depth biodiversity studies and implement measures to
ensure that any unavoidable impact is minimised or reversed.
We follow all local guidelines and regulations regarding com-
munity involvement and consultation.
When working with subcontractors, we prioritise local suppliers
to help ensure a positive impact on the local economy through
job creation.
We have stringent health and safety policies and procedures
in place, and all employees are responsible for complying with
any applicable laws and regulations. As a result of our rigorous
practices and standards, we had no serious accidents in 2022.
We embrace all forms of diversity and provide equal employ-
ment opportunities without regard to gender, race, religion,
disability, sexual orientation or age.
We provide an open, inclusive and non-retaliatory work envi-
ronment; discrimination of any kind is not tolerated.
We ensure that all employees are treated equally and objec-
tively in opportunity and remuneration, using merit-based
criteria.
We understand our obligation to protect the privacy of our
customers and suppliers. We have strict policies and proce-
dures in place to ensure that sensitive data is protected. This
includes electronic data stored in our systems.
We have an independent supervisory board and audit com-
mittee in place to provide guidance and oversight to the man-
agement board on the general affairs of the company.
As a listed company, we apply the Dutch Corporate Govern-
ance Code and Warsaw Stock Exchange Best Practices.
We are committed ensuring that all employees, customers and
suppliers act in an ethical manner and that stakeholders are
not subject to unethical behaviours such as corruption, bribery
or extortion.
We have an anti-corruption policy in place, and an insider
trading policy is signed by all employees when they sign their
contract of employment.
Our misconduct reporting channel, the Photon Energy Group
SpeakUp Line, is available to all our employees, consultants,
suppliers and stakeholders. The channel allows users to
remain anonymous and is managed by an independent third-
party operator.
Our ESG Commitments
Environment
Social Conduct
Corporate Governance
19
Leadership
Georg Hotar
CEO and Co-founder
Georg co-founded Photon Energy in 2008 and was the company’s CFO until 2011. Since
then he has spearheaded the group’s expansion in Europe and overseas as CEO. Georg
has extensive knowledge of the solar energy industry as well as in international finance.
Before Photon Energy, Georg established a finance and strategy advisory boutique
focused on the CEE region and previously held various positions in financial services in
London, Zurich and Prague.
Michael Gartner
CTO and Co-founder
Michael developed one of the first large PV installations in the Czech Republic before co-
founding Photon Energy in 2008. Michael was CEO of Photon Energy until rolling out the
company’s business in Australia. Michael is instrumental in driving Photon Energy’s off-
grid and solar-hybrid power solutions. Before Photon Energy, Michael ran an investment
boutique and was an analyst and head of fixed income sales at ING and Commerzbank
Securities in Prague.
Clemens Wohlmuth
CFO
Clemens joined Photon Energy in 2012. He has contributed many years of experience
in financial management, having run his own consulting practice focused on financial
services and interim management. Prior to this, he was CFO and later CEO at Telekom
Austria’s subsidiary, Czech On Line. From 1994 to 2000 he was Senior Manager for Ernst
& Young Consulting in Austria. After many successful years with the Group, Clemens will
be leaving at the end of May, following a handover period to our new CFO Andrej Horánsky.
Ricky D’Ambrosca
COO
Ricky is responsible for the day-to-day administration of Photon Energy Group and
its operational functions as a business. He joined the company in 2022 in order to
strengthen our management team during this period of growth. Previously, Ricky worked
at ADP Employer Services as senior client services director for the EMEA region. He has
led 450+ associates spanning twenty countries providing services for 250 clients for 100
large corporate entities.
20
and Audit Committee
Marek Skreta
Marek is the chairman of the Photon Energy Group supervisory board and a member of the
audit committee. He is the co-founder and CEO of P4 Wealth Management in Zurich and serves
as a member of the board and head advisor at R2G in Prague, a private investment platform
which he helped to establish. Prior to this, he was a managing director at UBS Switzerland AG
and a director at Credit Suisse in Zurich. His earlier professional experience included providing
advisory services to family offices and private equity funds on investments in the CEE region
and M&A transactions.
Bogusława Skowroński
Bogusława is an independent Supervisory Board member as defined by the Dutch Corporate
Governance Code. She is an entrepreneur, technology start-up ecosystem builder, VC and
angel investor. She has gained financial experience in organizations such as Union Bank of
Switzerland, European Bank for Reconstruction and Development and Capital Solutions proAlfa,
a company which she founded. She is an active member of the Polish capital market and has
advised many companies on their strategies and transactions. She co-founded MIT Enterprise
Forum CEE, an equity-free startup acceleration program.
Ariel Sergio Davidoff
Ariel is a member of the Photon Energy Group supervisory board and chairman of the audit
committee. He is a partner at Lindemannlaw, an international law firm based in Zurich. The
law firm focuses on UHNW entrepreneurs and regulated clients, such as banks, external asset
managers and mutual funds. Prior to joining Lindemannlaw, Ariel held various positions in the
banking industry in Switzerland and Lichtenstein, including the position of CEO.
In addition, he
recently co-funded several companies in the Swiss financial sector.
Supervisory Board
21
21
‘The work we do is very dynamic.
Every day is different, so it’s always
challenging and exciting.’
‘I’m glad to be part of a company
that works in renewables, the sector
of tomorrow.’
‘The management team makes me feel
like I work
with
them, not
for
them, and
that we have a mutual goal.’
‘The culture here is friendly and
multicultural, which is an awesome
environment to work in.’
Mark Csete
Project Development Manager
Mihai Banica
Project Manager
Alexandra Materna
Sales Manager
Světlana Karafiátová
Receptionist
Our Team
As of 31 December 2022
* Incl. 63 employees added to our staff following the acquisition of Lerta on 12 December 2022. These are not included in the employee demographic numbers.
39
22
283
37
%
Average age
Nationalities
Employees *
Female employees
22
All-staff Meeting
Prague, Czech Republic
Teambuilding at Lhota Lake
Lhota, Czech Republic
Kongres PV
Warsaw, Poland
Lunch & Learn
Sydney, Australia
23
23
HQ
Our Markets
Power Plants Owned by Photon Energy Group
Australia
O&M Services for Power Plants
Photon Water Services
Inverter Maintenance Services
Energy Trading Licence
Photon Energy Group Office
24
2022 PV Market Overview
Evolution of Global Annual and Cumulative Installed Capacity, 2011–2022
Worldwide
Europe
The year 2022 saw 268 GWp of new solar generation capacity
deployed, in comparison to 191 GWp in 2021, bringing the total
cumulative installed capacity to approximately 1,218 GWp. In
2022, the PV market grew by 29% year-to-year.
This unexpected raise is connected to the first truly global energy
crisis, which was triggered by Russia’s invasion of Ukraine, that
sparked unprecedented momentum for renewables according to
IEA. Fossil fuel supply disruptions have underlined the energy
security benefits of domestically generated renewable electric
-
ity, leading many countries to strengthen policies supporting
renewables.
Solar PV generation in the US during 2022 increased by 24.14%
year-on-year according to the country’s Energy Information Admin-
istration (EIA) latest report. The data which was reviewed by Sun
Day Campaign showed that solar remained the fastest-growing
renewable energy source in 2022 and ended the year with a share
of 4.74% of all electricity capacity generated in 2022, up from the
3.95% share in 2021.
Solar deployment in China jumped to a new high in 2022, accord-
ing to new figures from the country’s National Energy Administra
-
tion. Newly installed solar capacity in China last year reached a
record 87.4GW, a 59% increase on 2021, taking the country’s total
installed PV capacity to 390GW.
According to Solar Power Europe, 2022 was the year when solar
power displayed its true potential for the very first time in the EU,
driven by record high energy prices and geopolitical tensions that
largely improved its business case. The 27 EU Member States saw
41.4 GW of new solar PV capacity connected to their grids; a 47%
increase compared to 2021.
The share of renewables in net electricity generation in Germany
accounted for nearly half of total power generation in 2022 with
49.6%, according to the Fraunhofer Institute for Solar Energy Sys-
tems (ISE).
Most solar power facilities in the EU are still operated by Germany.
By the end of 2022, aggregate installed capacity will be roughly
68.5 GW, with new yearly installations of 7.9 GW. Spain achieved a
total of 26.4 GW capacity in 2022, becoming second largest market
in the EU. For the very first time, a nation with a solar fleet larger
than 10 GW – Poland, which has 12.5 GW of potential ranked out-
side the top 5. The other top 10 nations – Belgium, 7.7 GW, Greece,
5.6 GW, Portugal, 4.2 GW, and Denmark, 3.9 GW – remain below
this mark. Hungary, which has 3.9 GW as well, drops to outside the
top 10 in 2022 due to a few MW difference.
Cumulative installed capacity (GWp)
Annual installations (GWp)
2014
2018
2012
2016
2020
2011
2015
2019
2013
2017
2021
2022
77
38
118
30
98
39
135
30
104
50
191
268
304
139
624
70
402
178
759
100
506
227
950
1,218
Sources: BNEF, SPE, the Company
25
Our Key Markets
In 2022, 4.1 GWp have been installed which makes up a total capacity of 31.0 GWp
as of 31 December 2022. According to Clean Energy Regulator (CER), the year 2022
saw more than 290,000 rooftop installations added to the grid with a total capacity
of 2.51 GWp.
According to the Czech Solar Association, 33,760 solar power plants with a total
capacity of 288.8 MWp were installed in 2022. Total capacity of 2.5 GWp was reported
at the end of 2022, representing a 13.6% increase from 2021 to 2022. Residential
photovoltaics in the Czech Republic are breaking records. Compared to 2021, when
9,321 power plants with an output of 62 MWp were built, this represents an increase
of 366% in terms of capacity.
Cumulative PV capacity in 2022 was estimated at 3.9 GWp, according to an analy-
sis by Solar Power Europe; Compared to 2021, we saw an increase of about 30%.
The capacity target for 2030 is 6.5 GWp of which more than 50% has been achieved,
according to SPE.
Australia
Czech Republic
Hungary
2022 Market Overview
2022 Market Overview
2022 Market Overview
Photon Energy
in Australia
Photon Energy
in the Czech Republic
Photon Energy
in Hungary
Total capacity at the end of 2021:
Total capacity at the end of 2021:
Total capacity at the end of 2021:
26.9
GWp
31.0
GWp
2.2
GWp
3.0
GWp
2.5
GWp
3.9
GWp
Total capacity at the end of 2022:
Total capacity at the end of 2022:
Total capacity at the end of 2022:
In Development
309.8
MWp
In Development
86.3
MWp
Our Portfolio
14.7
MWp
Our Portfolio
15.0
MWp
Our Portfolio
51.8
MWp
As of 31 December 2022
26
According to Solar Power Europe, a total of 4.9 GWp was installed in 2022, a signifi
-
cant increase of 63.6% over 2021. Poland completes the top three ranking with its
impressive solar record. Poland has once again increased its annual solar installa-
tions, this time by 26% to 4.9 GWp compared to 3.9 GWp in 2012.
High electricity bills and massive energy security issues resulting from the Russian
war have ensured that the pace of installations has remained steady throughout the
year despite a slightly less attractive support structure for small-scaled solar projects.
Romanian cumulative PV capacity in 2022 was estimated at 1.8 GWp, according
to an analysis by Solar Power Europe; Compared to 2021, we saw an increase of
about 20%. The capacity target for 2030 is 5 GWp of which 35% of them has been
achieved, according to SPE. According to the PV magazine, residential PV instal-
lation is expected to increase in 2023 by reduction of tax on PV panels for use in
residential homes and public building from 19% to 5%.
The PV power plants capacity of Slovakia in 2022 was estimated at 5.7 GWp,
according to the Solar Power Europe; Compared to 2021, an increase of about
7.5%
been reported. The capacity target for 2030 is 12 GWp which 48% of them
has been achieved, according to SPE.
Poland
Romania
Slovakia
2022 Market Overview
2022 Market Overview
2022 Market Overview
Photon Energy
in Poland
Photon Energy
in Romania
Photon Energy
in Slovakia
Total capacity at the end of 2021:
Total capacity at the end of 2021:
Total capacity at the end of 2021:
7.7
GWp
1.5
GWp
5.3
GWp
5.7
GWp
12.5
GWp
1.8
GWp
Total capacity at the end of 2022:
A total of 11.7 MWp
commissioned after the
reporting period as of the
publication date.
Total capacity at the end of 2022:
Total capacity at the end of 2022:
In Development
227.6
MWp
In Development
303.0
MWp
Our Portfolio
10.4
MWp
27
Our Competitive Strengths
Photon Energy Group stands out from our com-
petitors in a number of ways.
Our years of experience and technical expertise
in both photovoltaics and clean water solutions,
applied to design and develop state-of-the-art
technology and services.
Providing a personalised, intelligent customer
experience, simplifying the complexity of the
operating environment.
Continual innovation in a changing market, as
demonstrated by our development of solar-hybrid
power solutions or off-grid solutions.
Energy storage is increasingly important in
regions which generate high levels of solar power
in order to maintain a continuous and reliable
electricity supply.
We also develop PV solutions coupled with other
off-grid applications, such as on-site water
pumping and filtration powered by solar energy.
The growing demand for these solutions is driven
by a wide range of consumers, from industry to
agriculture.
Providing services and solutions that are scal-
able, integrated and modular.
28
2009
We construct our first PV projects, including
our first proprietary power plant in the Czech
Republic.
2015
We hit the 150 MWp mark for O&M services pro-
vided in Europe and Australia.
2013
We place our first corporate bond on the Frank-
furt Stock Exchange.
2019
We complete the roll-out of rooftop solar sys-
tems across 30 ALDI locations and build 20
power plants in Hungary.
2021
Our shares are listed on the regulated markets
of Warsaw and Prague, and on the Quotation
Board of the Frankfurt Stock Exchange.
2011
We construct new power plants in Germany,
Italy and Slovakia.
2017
We establish our office in Hungary and expand
our vision to include clean water solutions
through Photon Water.
2008
Photon Energy is founded. We are listed on
the NewConnect market of the Warsaw Stock
Exchange.
2014
We install our first solar storage battery system
in Australia and add five countries to our O&M
portfolio.
2010
We construct plants with a combined capacity
of 32 MWp in the Czech Republic and Slovakia.
2016
We commission four power plants in Australia.
Our shares are listed in Prague, along with a
corporate bond.
2012
We establish our office in Australia and our new
corporate HQ in the Netherlands.
2018
Our first Hungarian power plants are con-
nected to the grid.
2020
Our proprietary portfolio reaches 74.7 MWp, and
we commission two utility-scale power plants.
Our History
29
2022 in Review
151 MWp
added to our project
development pipeline
49,013 tonnes
of CO
2
e
emissions avoided
121.6 GWh
of clean
energy produced
JANUARY FEBRUARY MARCH APRIL MAY JUNE JULY
Bond Magazine
Award
We are annoucned
as the winner of
Bond Magazine’s
award for Best
Issuer, Green SME
Bonds 2021.
‘Buy’ Recommendation
Our share is given a ‘buy’
recommendation by
analysts at AlsterResearch.
Sustainability
Report 2021
Publication
of our second
sustainability report
and our first green
financing report.
Green Bond Tapped
We successfully increase the volume of our
Green EUR Bond by EUR 10 million to EUR
65 million.
O&M in Poland
We sign a major
agreement with a new key
customer in Poland.
Additional ‘Buy’ Recommendations
Our share receives ‘buy’ recommendations
from WOOD & Co. and IPOPEMA.
Construction in Romania
We break ground on our
first two Romanian PV
power plants.
Water Quality Project
Photon Water launches
water monitoring and
control project in Mount
Gambier, Australia.
Crown Sponsorship for
RayGen Project
Our Australian solar
storage project receives
sponsorship from the South
Australian Government for
development approval.
Misconduct Reporting
Policy
We institute our new policy
and the Photon Energy
Group SpeakUp Line as
channel for stakeholders to
report misconduct.
30
AUGUST SEPTEMBER OCTOBER NOVEMBER DECEMBER
Polish 2027 Capacity
Auction
Lerta secures 157 MW
of DSR (Demand Side
Response) in Polish
capacity auction for 2027.
Shares on XETRA
Our shares are now listed
on the electronic trading
platform XETRA, Germany’s
leading trading platform
for listed companies
provided by Deutsche
Börse AG.
Bond Repaid
We fully repay our 7.75%
EUR Bond 2017/2022.
Second Green Bond Tap
We successfully increase
the volume of our Green
EUR Bond by EUR 12.5
million to EUR 77.5 million.
Refinancing for Czech
Portfolio
We secure a EUR 28.1 million
refinancing agreement for
nine PV plants in the Czech
Republic.
Construction in Romania
We begin construction on
five additional Romanian
PV plants.
Lerta Acquisition
We acquire a majority
stake in Lerta, which was
fully integrated into Photon
Energy Group on 1 February
2023.
Utility-scale
Solar-Plus-Storage
We acquire land and
development rights for a
9.8 MWp / 10 MWh solar
and battery energy storage
facility in Australia.
31
Selected Projects
CTP Business Parks
Combined Capacity
We partnered with CTP – the largest industrial
property developer in CEE – to install rooftop PV
plants at three CTP business parks in Slovakia.
Our teams worked closely throughout the con-
struction, with AC connections handled by CTP
and DC compenents by Photon Energy.
These plants will help CTP to meet its goal of
becoming carbon neutral by 2023, as well as
lower its tenants’ operational costs and provide
them with a viable source of renewable energy to
meet their own sustainability goals.
1.26
MWp
up to
1.39
GWh
Annual Production
Bratislava
Slovakia
Trnava
Žilina
32
Romanian PV Projects
Combined Capacity
In 2022, we began construction of a series of pro-
jects in Romania, breaking ground on eight PV
power plants. Including these projects, we ended
the year with a total capacity of 228 MWp in
development.
Upon the commissioning of the first seven instal-
lations, our IPP portfolio will include 96 solar power
plants. Of the total 122 MWp generation capacity,
a combined 107 MWp will be selling subsidy-free
clean electricity directly on the energy market.
31.5
MWp
up to
8.1
GWh
Expected Annual Production
Calafat
Romania
Săhăteni
Aiud, Teius
Siria
Făget
33
Tolna 2
PFAS Remediation
Solar Capacity
Partner
Australian Government,
Department of Defence
We completed and grid-connected our second
PV installation in Tolna, Hungary. The new instal-
lation will operate on a merchant model, with an
expected revenue of EUR 440,000 in its first year,
based on current forward prices for electricity
base load in Hungary. Like our first plant in Tolna,
this installation was financed by proceeds from
our Green Bond.
In 2022 we continued a trial project implementing
our in-situ PFAS remediation technology.
The trial involves water and energy monitoring
platforms, groundwater injection equipment, an
array of groundwater monitoring and injection
wells and a combination of application and mon-
itoring electrodes.
1.4
MWp
up to
2.1
GWh
Annual Production
Australia
Tolna, Hungary
34
Strategy and Results in 2022
Increase the production of clean energy by
expanding our global electricity generation
capacity of our proprietary portfolio of PV
power plants.
Grow our PPA business and the construction
of commercial behind-the-meter PV projects
for industrial customers and off-takers in
Australia and in Europe.
Continue to provide O&M services that allow
PV power plants to run smoothly at high
generation levels and increase revenues while
reducing risks for our customers.
Deploy remediation solutions for groundwater
contamination, with a focus on PFAS
nanoremediation.
Procure and trade PV components
through cooperation with PV technology
manufacturers.
Compete for PV projects in locations that
require a tailor-made, integrated approach to
the application of PV technology,
combining
clean energy generation with energy storage
solutions.
Acquire new PV projects to develop, design
and construct for our proprietary portfolio,
supporting the growth of a recurring revenue
stream from clean electricity generation with
a focus on Australia, Hungary, Poland and
Romania.
Our proprietary portfolio of PV power plants
generated
121.6 GWh
of clean electricity
production, a
18% increase
from 2021.
Our team includes specialists dedicated to
capitalising on the fast-growing interest in
behind-the-meter projects.
Increased capacity under contract
383 MWp
in 2022 (
+14% YOY
), with a significant growth
experienced in Poland.
We continued our trial project for the
Australian Government Department of
Defence, implementing our proprietary in-situ
PFAS remediation technology.
Our trading volume was increased, generating
revenue of
EUR 65.021 million,
compared to
EUR 9.221 million in 2021.
We acquired the development rights and
land for a 9.8 MWp/10 MWh solar and battery
energy storage system facility in Boggabri,
New South Wales. The project represents
the Company’s first utility-scale solar-plus-
storage installation and will serve as a
prototype for a future roll-out across Photon
Energy Group’s European markets.
A total of
151 MWp
was added to our project
pipeline in Hungary, Poland, Romania and
Australia.
Strategy
Result
35
Our Media Presence
At Photon Energy Group, we have always seen it
as our duty to be a trusted media partner. In 2022,
we actively expanded upon our ongoing partner-
ships with journalists covering energy, finance
and sustainability-related topics, with Romania
being a new addition to our target media markets.
Our stories were covered by a wide range of
European and Australian media outlets, from
specialised energy news websites to popular daily
newspapers. Additionally, we worked closely with
industry associations and NGOs to promote solar
energy as a future-proof energy source and to
share our industry know-how with our customers
and partners.
We continued to operate with honesty and in
full transparency, with our CEO Georg Hotar giv-
ing several interviews about our ongoing projects
and future plans, and our representatives shar-
ing their expertise in response to media enquiries
throughout the year.
To read our past articles and press releases,
please visit
photonenergy.com/news
. Follow us on
Linkedin
and
Twitter
.
28 July 2022
23 June 2022
11 August 2022
13 July 2022
Photon Energy z kontraktem
na obsługę polskich elektrowni
fotowoltaicznych
Photon Energy breaks new
ground with three more solar
projects in Romania
Photon Energy N.V. erhöht
Prognose für 2022 deutlich
Photon Energy începe
lucrările la a doua centrală
fotovoltaică în județul Alba
36
24 November 2022
2 February 2023
5 October 2022
22 November 2022
12 August 2022
2 September 2022
Photon Energy Group
increases its stake in Lerta
to 100%
Photon Energy Group Secures
EUR 28.1 Million Long-term
Refinancing for its Czech
Portfolio
Photon chooses NSW for its
first ever solar and battery
project
Photon Energy Group
Launches B2B eCommerce
Platform
Photon Energy stockt Anleihe
auf – „Loyalitätsprämie“ für
Altanleger
Photon Energy Debuts on
German Electronic Trading
Platform XETRA
37
38
Proprietary PV Plants
The table below represents power plants owned directly or indirectly by Photon Energy N.V. in 2022.
Production Results in 2022
Project Name
Legal Entity
Capacity
Revenue*
Prod. 2022
Proj. 2022
Perf.
% of change
2022 vs. 2021
Unit
kWp
per MWh,
in 2022
kWh
kWh
%
%
Komorovice
Exit 90 s.r.o.
2,354
EUR 812
2,586,992
2,477,578
4.4%
9.3%
Zvíkov I
Photon SPV8 s.r.o.
2,031
EUR 810
2,282,152
2,281,816
0.0%
2.6%
Dolní Dvořiště
Photon SPV10 s.r.o.
1,645
EUR 814
1,663,524
1,670,096
-0.4%
0.2%
Svatoslav
Photon SPV4 s.r.o.
1,231
EUR 816
1,228,843
1,194,293
2.9%
7.1%
Slavkov
Photon SPV6 s.r.o.
1,159
EUR 815
1,389,238
1,322,565
5.0%
4.2%
Mostkovice SPV 1
Photon SPV1 s.r.o.
210
EUR 736
226,217
218,212
3.7%
5.2%
Mostkovice SPV 3
Photon SPV3 s.r.o.
926
EUR 323
1,027,624
9
64,874
6.5%
5.1%
Zdice I
Onyx Energy I s.r.o.
1,499
EUR 811
1,750,615
1,673,405
4.6%
7.8%
Zdice II
Onyx Energy projekt II s.r.o.
1,499
EUR 811
1,774,069
1,686,667
5.2%
6.8%
Radvanice
Photon SPV11 s.r.o.
2,305
EUR 816
2,576,461
2,481,904
3.8%
4.2%
Břeclav rooftop
Photon SPV1 s.r.o.
137
EUR 924
164,781
152,793
7.8%
5.1%
Total Czech PP
14,996
16,670,515
16,124,174
3.4%
5.2%
Babiná II
Sun4Energy ZVB s.r.o.
999
EUR 271
1.013,759
962,816
5.3%
2.4%
Babina III
Sun4Energy ZVC s.r.o.
999
EUR 271
1,002,519
976,833
2.6%
-0.1%
Prša I.
Fotonika s.r.o.
999
EUR 270
1,066,299
1,048,133
1.7%
3.8%
Blatna
ATS Energy s.r.o.
700
EUR 272
732,096
714,114
2.5%
1.1%
Mokra Luka 1
EcoPlan 2 s.r.o.
963
EUR 258
1,234,419
1,129,082
9.3%
2.9%
Mokra Luka 2
EcoPlan 3 s.r.o.
963
EUR 257
1,256,418
1,171,137
7.3%
2.5%
Jovice 1
Photon SK SPV2 s.r.o.
979
EUR 263
926,565
886,231
4.6%
6.7%
Jovice 2
Photon SK SPV3 s.r.o.
979
EUR 263
919,104
876,427
4.9%
6.8%
Brestovec
Photon SK SPV1 s.r.o.
850
EUR 257
1,055,088
1,013,477
4.1%
7.7%
Polianka
Solarpark Polianka s.r.o.
999
EUR 261
1.008,127
972,128
3.7%
3.8%
Myjava
Solarpark Myjava s.r.o.
999
EUR 259
1,138,769
1,111,400
2.5%
1.2%
Total Slovak PP
10,429
11,353,164
10,861,777
4.5%
3.4%
Tiszakécske 1
Ekopanel Befektetési Kft.
689
EUR 247
885,198
838,413
5.6%
1.5%
Tiszakécske 2
Energy499 Invest Kft.
689
EUR 247
890,688
843,815
5.6%
1.6%
Tiszakécske 3
Future Solar Energy Kft.
689
EUR 249
857,875
820,891
4.5%
1.7%
Tiszakécske 4
Green-symbol Invest Kft.
689
EUR 247
889,678
843,815
5.4%
1.1%
Tiszakécske 5
Montagem Befektetési Kft.
689
EUR 247
886,549
838,413
5.7%
6.7%
Tiszakécske 6
Onyx-sun Kft.
689
EUR 247
887,118
843,815
5.1%
1.4%
Tiszakécske 7
Solarkit Befektetesi Kft.
689
EUR 247
889,559
837,798
6.2%
1.9%
Tiszakécske 8
SunCollector Kft.
689
EUR 247
875,681
834,993
4.9%
1.0%
39
Project Name
Legal Entity
Capacity
Revenue*
Prod. 2022
Proj. 2022
Perf.
% of change
2022 vs. 2021
Unit
kWp
per MWh,
in 2022
kWh
kWh
%
%
Almásfüzitő 1
Ráció Master Kft.
695
EUR 246
866,111
833,740
3.9%
3.4%
Almásfüzitő 2
Ráció Master Kft.
695
EUR 246
841,200
833,151
1.0%
0.5%
Almásfüzitő 3
Ráció Master Kft.
695
EUR 245
842,285
829,120
1.6%
0.3%
Almásfüzitő 4
Ráció Master Kft.
695
EUR 246
867,116
835,745
3.8%
0.4%
Almásfüzitő 5
Ráció Master Kft.
695
EUR 245
880,596
830,197
6.1%
2.7%
Almásfüzitő 6
Ráció Master Kft.
660
EUR 245
875,234
798,499
9.6%
0.3%
Almásfüzitő 7
Ráció Master Kft.
691
EUR 245
870,652
825,317
5.5%
0.2%
Almásfüzitő 8
Ráció Master Kft.
668
EUR 246
856,438
808,072
6.0%
0.0%
Nagyecsed 1
Mediator Ingatlanközvetítö Kft.
689
EUR 250
853,678
819,166
4.2%
-1.0%
Nagyecsed 2
Aligoté Kft.
689
EUR 252
869,510
819,166
6.1%
0.8%
Nagyecsed 3
Proma Mátra Kft.
689
EUR 252
877,397
819,574
7.1%
1.4%
Fertod I
Fertod Napenergia-Termelo Kft.
528
EUR 244
676,103
607,271
11.3%
-0.7%
Fertod II No 2
Photon Energy HU SPV 1 Kft.
699
EUR 245
887,825
827,038
7.4%
-0.5%
Fertod II No 3
Photon Energy HU SPV 1 Kft.
699
EUR 245
883,853
827,038
6.9%
-2.5%
Fertod II No 4
Alfemo Alpha Kft.
699
EUR 245
878,889
827,038
6.3%
-2.3%
Fertod II No 5
Ráció Master Kft.
691
EUR 245
878,256
831,694
5.6%
-2.4%
Fertod II No 6
Photon Energy HU SPV 1 Kft.
699
EUR 244
874,289
827,038
5.7%
-2.8%
Kunszentmárton I No 1
Ventiterra Kft.
697
EUR 244
917,654
878,417
4.5%
1.0%
Kunszentmárton I No 2
Ventiterra Kft.
697
EUR 245
913,106
878,551
3.9%
1.3%
Kunszentmárton II No 1
Ventiterra Alpha Kft.
693
EUR 245
927,317
849,019
9.2%
0.4%
Kunszentmárton II No 2
Ventiterra Beta Kft.
693
EUR 245
932,260
849,316
9.8%
0.4%
Taszár 1
Optisolar Kft.
701
EUR 241
887,106
878,233
1.0%
-0.2%
Taszár 2
Optisolar Kft.
701
EUR 241
900,449
878,233
2.5%
0.7%
Taszár 3
Optisolar Kft.
701
EUR 241
902,765
878,233
2.8%
0.3%
Monor 1
Photon Energy HU SPV 1 Kft.
688
EUR 245
888,790
845,537
5.1%
-0.8%
Monor 2
Photon Energy HU SPV 1 Kft.
696
EUR 246
886,933
855,996
3.6%
0.4%
Monor 3
Photon Energy HU SPV 1 Kft.
696
EUR 246
897,932
855,996
4.9%
1.1%
Monor 4
Photon Energy HU SPV 1 Kft.
696
EUR 246
896,977
855,996
4.8%
0.5%
Monor 5
Photon Energy HU SPV 1 Kft.
688
EUR 246
861,609
839,673
2.6%
-3.6%
Monor 6
Photon Energy HU SPV 1 Kft.
696
EUR 245
896,606
855,996
4.7%
0.5%
Monor 7
Photon Energy HU SPV 1 Kft.
696
EUR 246
895,235
855,996
4.6%
0.2%
Monor 8
Photon Energy HU SPV 1 Kft.
696
EUR 246
902,131
855,996
5.4%
1.0%
Tata 1
Tataimmo Kft.
672
EUR 257
940,621
915,901
2.7%
2.6%
Tata 2
ALFEMO Beta Kft.
676
EUR 245
839,875
828,579
1.4%
1.4%
Tata 3
ALFEMO Gamma Kft.
667
EUR 245
843,405
809,326
4.2%
1.7%
Tata 4
Tataimmo Kft.
672
EUR 256
957,397
937,898
2.1%
2.5%
Tata 5
Öreghal Kft.
672
EUR 257
948,602
941,081
0.8%
7.0%
Tata 6
Tataimmo Kft.
672
EUR 257
920,636
926,101
-0.6%
-0.6%
40
Project Name
Legal Entity
Capacity
Revenue*
Prod. 2022
Proj. 2022
Perf.
% of change
2022 vs. 2021
Unit
kWp
per MWh,
in 2022
kWh
kWh
%
%
Tata 7
European Sport Contact Kft.
672
EUR 257
946,090
916,499
3.2%
2.8%
Tata 8
Tataimmo Kft.
672
EUR 257
958,505
930,294
3.0%
2.0%
Malyi 1
Zuggo - Dulo Kft.
695
EUR 251
856,728
821,957
4.2%
0.3%
Malyi 2
Egespart Kft.
695
EUR 249
876,568
823,080
6.5%
2.0%
Malyi 3
Zemplenimpex Kft.
695
EUR 248
877,174
823,080
6.6%
1.9%
Puspokladány 1
Ladány Solar Alpha Kft.
1,406
EUR 90
1,972,150
1,899,780
3.8%
0.5%
Puspokladány 2
Ladány Solar Alpha Kft.
1,420
EUR 257
2,047,443
1,846,648
10.9%
0.9%
Puspokladány 3
Ladány Solar Alpha Kft.
1,420
EUR 261
2,011,092
1,804,753
11.4%
0.7%
Puspokladány 4
Ladány Solar Beta Kft.
1,406
EUR 258
1,986,366
1,886,364
5.3%
-0.6%
Puspokladány 5
Ladány Solar Beta Kft.
1,420
EUR 260
2,050,711
1,841,830
11.3%
0.2%
Puspokladány 6
Ladány Solar Beta Kft.
1,394
EUR 90
1,981,915
1,864,979
6.3%
0.5%
Puspokladány 7*
Ladány Solar Gamma Kft.
1,406
EUR 90
1,996,171
1,886,269
5.8%
0.0%
Puspokladány 8
Ladány Solar Gamma Kft.
1,420
EUR 257
2,010,315
1,809,932
11.1%
0.3%
Puspokladány 9
Ladány Solar Delta Kft.
1,406
EUR 90
2,001,423
1,885,219
6.2%
3.5%
Puspokladány 10
Ladány Solar Delta Kft.
1,420
EUR 259
2,009,415
1,803,165
11.4%
0.6%
Tolna 1
Tolna (Barbican)
1,358
EUR 278
2,098,737
2,098,737
0.4%
nm
Tolna 2
Tolna (Barbican)
1,358
EUR 310
1,503,024
1,502,132
0.1%
na
Total Hungarian PP
51,814
68,783,013
65,206,800
5.5%
6.3%
Symonston
Photon Energy AUS SPV 1 Pty Ltd
144
EUR 434
158,133
178,750
-10.5%
-6.9%
Leeton
Leeton Solar Farm Pty Ltd
7,261
EUR 109
12,393,092
14,180,103
-12.6%
112.8%
Fivebough
Fivebough Solar Farm Pty Ltd
7,261
EUR 109
12,248,620
14,004,545
-12.5%
113.2%
Total Australian PP
14,744
24,799,845
28,361,399
-12.6%
111.3%
Total
91,905
121,606,537
120,554,150
0.9%
17.8%
Notes:
Capacity: installed capacity of the power plant
Prod.: production in the reporting period.
Proj.: projection in the reporting period.
Perf.: performance of the power plant in the reporting period i.e.
(production in 2022 / projection for 2022) – 1.
* The reported figures correspond to:
- Green Bonus + realized electricity price during the reporting period in the
Czech Republic.
- the applicable FIT for the period in Slovakia.
- Realized electricity prices in Hungary except for Puspokladány 1, Puspo-
kladány 6, Puspokladány 7 and Puspokladány 9, which are entitled to the
applicable FIT for the period, amounting to HUF 35,540.
- Realized electricity prices + Australian Large-scale Generation Certifica-
tes for our Leeton and Fivebough power plants in Australia.
- the applicable FIT of AUD 301.60 + Large-scale Generation Certificates
for our Australian power plant in Symonston.
.
41
Our Shares and Bonds
The Share
Shareholding Structure
Solar Future and Solar Power to the People are controlled by the co-founders of Photon Energy N.V.
Share Trading Details (ISIN: NL 0010391108
)
Trading of the Company’s shares on the regulated markets of the
Warsaw Stock Exchange (WSE) (Giełda Papierów Wartościowych
w Warszawie) and Prague Stock Exchange (PSE) (Burza cenných
papírů Praha) commenced on 5 January 2021.
Prior to that date, the Company’s shares were traded on NewCon-
nect in Poland and on the Free Market of Prague.
The admission to listing and trading of the Company’s shares on
the Quotation Board of the Frankfurt Stock Exchange followed on
11 January 2021.
The Group is following the Dutch Corporate Governance Code and
the Best practices of the Warsaw Stock Exchange.
Market:
GPW Main Market, Warsaw, Poland
Ticker:
PEN
Web address:
Market:
Standard Market, Prague, Czech Republic
Ticker:
PEN
Web address:
Market:
Quotation Board of the Frankfurt Stock Exchange,
Germany
WKN:
A1T9KW
Web address:
Market Maker Details in Poland
Dom Maklerski PKO Bank Polski
Address:
ul. Puławska 15, 02
-
515 Warszawa, Poland
Web address:
Dividend Policy
The Company’s strategy is to create value for its shareholders
through strong expansion in the globalising photovoltaic industry.
For as long as value-creating growth and investment opportunities
exist, the Board of Directors does not intend to propose to distrib-
ute dividends to shareholders.
Solar Future
35.56%
Solar Power to the People
33.45%
Free-float
28.77%
The Company
2.22%
42
Share Performance in 2022
Main market of the Warsaw Stock Exchange
Selected Share Information
PLN
Opening price (3
January 2022
)
7.10
52
-week max (16 August
2022
)
1
7.00
52
-week min (7 February
2022
)
6.
55
Closing price (30 December 2022)
13.10
Source:
The trading volume in 2022
amounted to
5,366,056
shares (corre-
sponding to 20,639
shares per trading session) compared to
7,002,825 shares in 202
1 (corresponding to
27,900
shares per
trading session).
XETRA
The Company’s shares have been listed on the electronic trading
platform XETRA (provided by the German Stock Exchange) since
7 December 2022.
Main market of the Prague Stock Exchange
Selected Share Information
CZK
Opening price (3
January 2022
)
38
.
60
52
-week max (16 August
2022
)
89.00
52
-week min (7 March
2022
)
3
7.00
Closing price (30 December 2022)
38.20
Source:
The Company reports a yearly trading volume of
491,280
shares
(corresponding to 1
,890
shares per trading session)
in 2022
, com-
pared to
2,917
,
420
shares
(corresponding to 14,026 shares per
trading session)
in 202
1.
Quotation Board of the Frankfurt stock exchange
Selected Share Information
EUR
Opening price (3
January 2022
)
1.52
52
-week max (16 August
2022
)
3.
57
52
-week min (
8 February
2022
)
1.
42
Closing price (30 December 2022)
2.74
Source:
The trading volume in 2022
amounted to
491,280 (corres
ponding
to 1,
904
shares per trading session)., compared to
454,900
shares
(corresponding to 1,777 shares per trading session)
in 2021
.
Our Bonds
In December 2016 the Company issued a 7
-year corporate bond
with a 6% annual coupon and monthly payments in the Czech Re-
public. The corporate bond (ISIN CZ0000000815) with a nominal
value of CZK 30,000 has been traded on the Free Market of the
Prague Stock
Exchange since 12 December 2016. The outstand-
ing amount is CZK 75.9 million (EUR 3.1 million) and will be repaid
on 13 December 2023
.
On 27 October 2017 the Company issued a 5
-
year corporate EUR
bond with a 7.75% annual coupon and quarterly coupon paym
ents
in Germany, Austria and Luxemburg. The original target volume of
EUR 30 million was successfully increased in two steps with all
parameters unchanged, to an outstanding amount of EUR 45.0
million prior to the completion of the exchange offer described be-
low. The corporate bond (ISIN DE000A19MFH4) with a nominal
value of EUR 1,000 has been traded on the Open Market of the
Frankfurt Stock exchange since 27 October 2017. The bond was
also listed on the stock exchanges in Berlin, Hamburg, Hannover,
Munich
and Stuttgart. The total outstanding bond volume of EUR
15.232 million was fully repaid together with the final interest pay-
ment to the bondholders on 27 October 2022.
On 17 November 2021, The Company successfully placed its
6.50% Green EUR Bond 2021/2027 (ISIN: DE000A3KWKY4) in
the amount of EUR 50 million. The bond issuance was met with
strong demand from the Company’s existing bondholders, who
subscribed to EUR 21.281 million in the exchange that was offered
for the existing EUR Bond 2017/2022. The green
bond – with an
interest rate of 6.50% p.a., paid quarterly
– was confirmed by imug
| rating with regard to its sustainability in a Second Party Opinion,
and can be traded on the Open Market of the Frankfurt Stock Ex-
change.
On 29 November 2021, the Group s
uccessfully increased the bond
placement by EUR 5 million with all parameters unchanged, bring-
ing the total outstanding bond volume to EUR 55 million.
In May 2022, the Company successfully tapped its 6.50% Green
EUR Bond 2021/2027 (ISIN: DE000A3KWKY4) in t
he amount of
EUR 10 million to a total outstanding amount of EUR 65 million.
In October 2022 and November 2022, the Company announced
that it has increased
its 6.50% Green EUR Bond 2021/2027 (ISIN:
DE000A3KWKY4) in the amount of another EUR 12.5 mill
ion to a
total outstanding amount of EUR 77.5 million. In this round the
bonds were again offered to bondholders of the older 2017/2022
corporate bonds in form of an exchange offer with a 1.5% loyalty
premium plus the difference in net accrued interest on each ex-
changed bond. Existing investors registered around 6.0 million eu-
ros nominally for exchange, which corresponds to a ratio of 30%
of the outstanding bond. Together with the initial exchange offer
organized in November 2021, 60% of the outstanding vol
ume of
the Company’s 2017/2022 bond got exchanged for the new Green
EUR Bond.
This tap issuance of the 2021/2027 Green bond
was included into
trading on the Quotation Board trading segment of the Open Mar-
ket (Freiverkehr) on the Frankfurt Stock Exchange (Frankfurter
Wertpapierbörse) on 14 October 2022.
43
The Company intends to use the net proceeds of the green bond
placement to finance or refinance, in part or in whole, new and/or
existing eligible assets, as well as financial instruments that were
used to finance such projects or assets, in accordance with the
Company’s Green Finance Framework, enabling Photon Energy
Group to make a significant contribution to an environmentally
friendly future.
On 29 November
2021
, the Group successfully increased the bond
placement by EUR 5.0 million with all parameters unchanged. The
total outstanding bond volume amounts to EUR 55.0 million as of
the end of the reporting period.
Bonds Performance in 2022
CZK Bond Trading Performance in Prague
In the trading period from 1 January 2022
until 31 December 2022
the trading volume amounted to CZK 210,000
(nominal value) with
a closing price of 100.00 (compared to CZK 25,200,000 in 202
1).
EUR Bond 2017/22 Trading Performance
In the trading period from 1 January 2022
until
its repayment on 27
October 2022,
the trading volume amounted to EUR
1.619 million
(nominal value) with an opening price of 101.00
and a closing price
of
99.75
in Frankfurt (compared to
EUR 5.223 million in 2021
).
Green EUR Bond 2021/27 Trading Performance in
Frankfurt
In the trading period from
1 January
2022
until 31 December
2022
,
the trading volume amounted to EUR
3.
544
million (nominal value,
in Frankfurt)
with an opening price of 102.00 and a closing price of
102.
4
0 in Frankfurt
(compared to
EUR
4.
261
million
in 2021
in the
trading period from 17 November 2021 until 31 December 2021
).
Communication with Investors
Communication with investors has always been more than a mere
legal requirement to Photon Energy Group.
We believe it is a
means to build trust in our business practices and an opportunity
to be transparent about our financial health and business achieve-
ments. During the reporting period, the following actions have been
taken:
►
The Company’s website continued to be developed to en-
sure it remains a principal source of information on the
Group and its activities. An
Investor Relations news ser-
vice
allows investors to stay up-to-date on company an-
nouncements, reports and other ad hoc information.
►
The Company ho
sted live webcasts to present its quarterly
results. Presentations and video recordings of the events are
available in the Investor Relations section of our website.
►
The company participated in the German Spring Conference
held
in Frankfurt in May 2022 (https://equityforum.de/en/ger-
man-spring-conference).
►
The company participated in the
Wallstreet Conference
held
online
andin
Zakopane
in
May
2022
(
medium=referral&utm_content=main-menu-link&utm_cam-
paign=WS
).
►
The Company participated in the Equity Forumheld in Frank-
furt in September 2022 (
-
fall-conference
)
►
The Company participated in the AlsterResearch Renewa-
bles
Conference
held
online
in
September
2022
(
tors/events/flyer-pop-up-conference.pdf
)
►
The Company participated in the RES Energy Conference
held online in September 2022 (
https://konferencjeinwes-
torskiepekao.pl/
).
►
The Company participated in the Deutsches Eigenkapital-
forum
held
in
Frankfurt
in
November
2022
(
).
Further Information
For more information about:
a)
characteristics of the structure of assets and liabilities of the
consolidated balance sheet, also from perspective of the
liquidity of the Issuer’s group
b)
description of the structure of main equity deposits or main
capital investments made within the Issuer’s group during
the financial year
Please refer to the Financial section.
Management Report
46
Directors’ Report
The directors present their report together with the annual financial
statements of Photon Energy N.V. (the ‘Company’) for the year
ended 31 December 2022.
The non-financial information, as presented within the Director’s
Report, which in this document comprises the Introduction, Com-
pany Profile and Management Report of this Annual Report, com-
plies with the Dutch Disclosure of Non-Financial Information.
Photon Energy N.V. is a joint-stock company incorporated under
the laws of the Netherlands on 9 December 2010. The statutory
seat of the Company is Barbara Strozzilaan 201, 1083HN Amster-
dam. The consolidated financial statements of the Company for the
year ended 31 December 2022 comprise the Company and its sub-
sidiaries (together referred to as the ‘Group’ and individually as
‘Group entities’) and the Group’s jointly controlled entities.
Developments in 2022
Financial Results
In 2022, the Group’s revenues increased by 161.7% to hit a record
EUR 95.136 million, thanks to an 81.6% increase in revenues from
the sale of electricity,
primarily attributable to higher revenues from
the electricity production generated by the Company’s new power
plants operating on a merchant basis as well as to high electricity
prices on the market
, while other revenue streams increased by a
remarkable 253.2% YOY, driven by a sound procurement strategy.
EBITDA improved to EUR 24.308 million (+153.6% YOY), while
EBIT swung from a loss of EUR -0.712 million to a EUR 16.984
million profit. During the reporting period, the Group continued to
record higher expansion-driven overheads, which are crucial in-
vestments for the development of existing business lines as well as
new activities.
Photon Energy reported a net profit of EUR 6.262 million com-
pared to a EUR -6.433 million loss in 2021. At the bottom line, TCI
amounted to EUR 7.672 million compared to EUR 2.096 million a
year ago, while the adjusted equity ratio increased at a sound level
of 31.9%.
In 2022, the Group posted a positive operating cash flow, which
amounted to EUR 2.847 million, compared to EUR 6.221 million in
2021, mainly driven by an improved profitability and a negative net
working capital, including increased inventories in line with the
strong growing Technology sales and our procurement strategy.
Investment cash flow equalled to EUR -33.429 million in 2022 com-
pared to EUR -14.233 million in 2021, mainly related to work in
progress for our proprietary portfolio in Romania and Hungary, and
the acquisition of Lerta S.A..
Financial cash flow amounted to EUR 9.348 million in 2022, com-
pared to EUR 30.625 million in 2021, impacted by our long-term
project refinancing in the Czech Republic, the additional placement
of our EUR Green bond 2021/27, scheduled repayments, and the
repayment of our EUR Bond 2017/22.
Overall, the cash position decreased to EUR 11.271 million at the
end of 2022 compared to EUR 32.506 million the end of 2021, mak-
ing our financial situation solid and allowing the company to deliver
on its strategic objectives.
Capital Management
The Group manages its capital to ensure that entities in the Group
will be able to continue as a going concern while maximising the
return to stakeholders through the optimisation of the debt and eq-
uity balance. The Group’s overall strategy will unwind accordingly
to the further negotiations with the Group's creditors.
The Group’s net debt to adjusted equity ratio at the reporting date
was as follows:
In thousands of EUR
2022
2021
Total liabilities
183,350
145,080
Less: Liquid assets
21,358
39,362
Net debt
161,993
105,718
Total equity
70,475
51,538
Net debt to equity ratio
at 31 December
2.29
2.05
Equity ratios:
In thousands of EUR
2022
2021
Full Equity ratio
27.8%
26.2%
Adjusted Equity ratio
(for bond governance)
32.0%
28.6%
There were no changes in the Group’s approach to capital man-
agement during the year.
47
Selected Indicators
Debt to Assets Ratio (Total Liabilities/Total Assets)
►
2022: 0.72
►
2021: 0.74
Debt to Equity Ratio
(Total Liabilities/Shareholders’ Equity)
►
2022: 2.60
►
2021: 2.81
Current Ratio (Current Assets/Current Liabilities)
►
2022: 1.92
►
2021: 1.59
Solvency Ratio (Net Income + Depreciation/Current and
Non-current Liabilities)
►
2022: 8.30%
►
2021: 2.92%
Strategy Execution in 2022
Strategy 2022
Result
Increase the production of clean energy by expanding our global
electricity generation capacity of our proprietary portfolio of PV
power plants.
Our proprietary portfolio of PV power plants generated 121.6 GWh
of clean electricity production, a 18% increase from 2021.
Acquire new PV projects to develop, design and construct for our
proprietary portfolio, supporting the growth of a recurring revenue
stream from clean electricity generation with a focus on Australia,
Hungary, Poland and Romania.
A total of 151 MWp was added to our project pipeline in Hungary,
Poland, Romania and Australia.
Grow our PPA business and the construction of commercial be-
hind-the-meter PV projects for industrial customers and off-takers
in Australia and in Europe.
Our team includes specialists dedicated to capitalising on the fast-
growing interest in behind-the-meter projects.
Compete for PV projects in locations that require a tailor-made, in-
tegrated approach to the application of PV technology, combining
clean energy generation with energy storage solutions.
We acquired the development rights and land for a 9.8 MWp/10
MWh solar and battery energy storage system facility in Boggabri,
New South Wales. The project represents the Company’s first util-
ity-scale solar-plus-storage installation and will serve as a proto-
type for a future roll-out across Photon Energy Group’s European
markets.
Continue to provide O&M services that allow PV power plants to
run smoothly at high generation levels and increase revenues
while reducing risks for our customers.
Increased capacity under contract 383 MWp in 2022 (+14% YOY),
with a significant growth experienced in Poland.
Procure and trade PV components through cooperation with PV
technology manufacturers.
Our trading volume was increased, generating revenue of EUR
64.886, compared to EUR 9.221 million in 2021.
Deploy remediation solutions for groundwater contamination, with
a focus on PFAS nano remediation.
We continued our trial project for the Australian Government De-
partment of Defence, implementing our proprietary in-situ PFAS
remediation technology.
48
Strategy for 2023 and Beyond
The Group’s focus for future growth lies on the established Austral-
ian and Hungarian markets and the newly added Polish and Ro-
manian markets for the expansion of PV generation capacity.
Further markets in Central, Eastern and South-Eastern Europe, the
Middle East and Africa as well as Asia remain under the Group’s
investigation.
The Group also intends to continue to disrupt and transform the PV
industry. This is illustrated by the recent acquisition of Lerta, devel-
oping Virtual Power Plant technologies and energy market services
and the strategic investment concluded with RayGen, a company
specialized in high efficiency concentrated PV generation with ther-
mal absorption and storage.
In addition, the Group’s focus remains on the expansion of opera-
tions & maintenance (O&M) solutions in Central and Eastern Eu-
rope and Australia and selective entry to new markets following its
customers, and the development of various water treatment tech-
nologies and the preparation for their commercialization.
►
Utility:
The development and acquisition of new PV projects to de-
velop, design and construct them for the proprietary portfolio
supporting the growth of recurring revenue streams from
clean electricity generation with a clear focus on Australia,
Hungary, Poland and Romania;
An increase in the production of clean energy by expanding
the Group’s global electricity generation capacity of its pro-
prietary portfolio of photovoltaic power plants;
A significant acceleration in the deployment of utility-scale
and on-site energy storage capacities both as an EPC sup-
plier as well as an investor, leveraging the Group's experi-
ence in Australia such as the Lord Howe Island hybrid energy
system and the planned utility-scale hybrid plant in Boggabri,
New South Wales.
►
New Energy:
The delivery of a 'one-stop shop' offering that combines as-
sets, services and IT solutions to establish Photon Energy
Group as the preferred partner for commercial and industrial
customers in the CEE region and Australia on their journey
from passive energy users to proactive energy flexumers;
A close monitoring of the emergence of markets for grid flex-
ibility and other ancillary services worldwide and evaluation
of opportunities as they emerge, which may lead to relatively
low-risk and low-cost market entries into new locations cur-
rently not served by the Company.
The expansion of the Group’s PPA business and the con-
struction of commercial behind-the-meter PV projects for in-
dustrial customers and off-takers in Australia and in Europe.
►
Technology Distribution:
An utilisation of existing economies of scale through a busi-
ness-to-business online sales platform to generate additional
trading revenues from PV modules, inverters, batteries, and
other components.
►
Operations and Maintenance:
The increase of the Group’s operations and maintenance
(O&M) services to maximise the energy generation output of
both proprietary and third-party power plants and to optimise
the useful life of PV assets;
►
Water Solutions:
The development of the Group’s suite of water services and
products to become a leading worldwide player in the PFAS
remediation industry on the back of its proprietary patent-
pending nano remediation technology, as well as other tech-
nologies currently under development.
Shareholder Structure
Share Capital
The Company’s share capital is EUR 600,000 divided into
60,000,000 shares with a nominal value of EUR 0.01 each. The
share capital is fully paid-up. Each share has one vote at the Gen-
eral Meeting of Shareholders, with the exception of the treasury
shares held by the Company.
There is no limitation on transfer of the Company’s shares with the
exception of the restriction imposed on employees who hold shares
based on the Company’s Employee Share Purchase Programme
(ESPP). According to the ESPP, employees are not allowed to sell
their shares acquired through the ESPP as long as they are em-
ployees.
In addition, certain restrictions are imposed on the Company to ac-
quire and hold its own shares. Under Article 9.1, the Company may
only acquire fully paid-up shares in its own share capital for no con-
sideration or provided that the Company's equity minus the acqui-
sition price is not less than the aggregate amount of the issued
share capital and the reserves which must be maintained pursuant
to the law. No acquisition pursuant to Article 9.1 shall be permitted
if a period of six months following the end of a financial year has
expired without the annual accounts for such year having been
adopted.
Share Capital as of 31 December 2022
Series / Issue
Type of
Shares
Type of
Preference
Limitation
of Right to
Shares
Number of
Shares
Nominal Value
of Series/Issue
(EUR)
Capital
Covered
With
A
bearer
-
-
60,000,000
600,000
cash
Total number of shares
60,000,000
Total share capital
600,000
Nominal value per share = EUR 0.01
49
The number of issued shares by the Company amounts to 60,000,000. As of 31 December 2022, to the knowledge of the Management, the
shareholder structure was as follows:
Shareholder
No. of shares
% of capital
No. of votes at
Shareholders
Meeting
% of votes at
Shareholders
Meeting
Solar Future Cooperatief U.A.
21,775,075
36.29%
21,775,075
37.12%
Solar Power to the People Cooperatief U.A.
20,492,057
34.15%
20,492,057
34.93%
Photon Energy N.V.
1,332,797
2.22%
0
0.00%
Free float
16,400,071
27.33%
16,400,071
27.95%
Total
60,000,000
100.00%
58,667,203
100.00%
Mr. Michael Gartner and Mr. Georg Hotar are the only members of
the Company’s Board of Directors.
Mr. Michael Gartner indirectly owns 37.12 % of the votes, via Solar
Future Cooperative U.A. and directly 0.04% of votes at the Share-
holders Meeting. Mr. Georg Hotar indirectly owns 34.93 % of votes,
via Solar Power to the People Coöperatief U.A. and directly 0.18%
of votes at the Shareholders Meeting.
The Free float includes shares allocated to the employee share
purchase programme. The disposition rights to these shares are
limited and employees can dispose of these shares only under spe-
cific conditions.
Transactions between the Company and legal or natural persons
who hold at least ten percent of the shares in the company are
agreed on terms that are customary in the market. In compliance
with the best practice provision 2.7.5 of the Dutch Corporate Gov-
ernance Code, such transactions are detailed in the table below.
The Supervisory Board approval for the transactions listed below
was not formally documented.
The following loans have been granted to the Managing Directors
by the Company or the Company’s affiliated entity.
The loans are short term for a period of up to 12 months and bear an interest rate of 3%.
Culture and Values
Good corporate governance is essential to creating an atmosphere
of trust and building solid, lasting relationships with stakeholders,
from suppliers to investors, in accordance with the Group’s values.
A supervisory board and an audit committee were established on
4 December 2020. These changes to the Group’s corporate struc-
ture were connected to the transfer of its share listings to the regu-
lated market of the Warsaw Stock Exchange and the standard
market of the Prague Stock Exchange, in order to be in full compli-
ance with the laws and regulations imposed on public companies
as well as the best practices of the regulated markets.
The Supervisory Board of the Company is responsible for super-
vising and advising the Management Board. In exercising its role,
the Supervisory Board follows the applicable law, the Articles of
Association of the Company, Dutch and Polish Corporate Code of
Conduct, Rules of Procedure of the Supervisory Board, and the
Company’s interests. It is a separate body that operates inde-
pendently of the Management Board.
The Company’s Audit Committee (and its chairman, in particular)
undertakes preparatory work for the Supervisory Board’s decision-
making regarding the supervision of the integrity and quality of the
Company’s financial reporting and the effectiveness of the Com-
pany’s internal risk management and control systems. It maintains
contact with the external auditors, and also monitors the Manage-
ment Board in connection with the Company’s funding, tax policy
and application of IT technology, especially with respect to cyber-
security.
Both bodies are comprised of three members: Boguslawa Skow-
ronski, Marek Skreta and Ariel Sergio Davidoff, appointed to a four-
year term of office.
The three members not only possess extensive experience as en-
trepreneurs and executives at international institutions, but also
know Photon Energy Group and its end-markets extremely well,
and the membership consists of two men and a woman.
Governance Best Practices
As of 5 January 2021, the Company was admitted to trading on the
regulated markets of the Warsaw Stock Exchange (WSE) and the
Prague Stock Exchange (PSE). It therefore became mandatory to
follow the WSE Best Practices and the Dutch Corporate Govern-
ance Code.
The WSE Best Practices is a set of recommendations, principles,
best practices and rules of procedure for governing bodies of pub-
licly listed companies and their shareholders. The WSE Rules and
resolutions of the WSE’s management board and its council set
forth the way publicly listed companies disclose information on their
compliance with corporate governance rules and the scope of in-
formation to be provided. If a publicly listed company does not
In thousands of EUR
Total Loan Amount
as of 31 December 2022
Georg Hotar, Managing Director and CEO
594
Michael Gartner, Managing Director and CTO
91
50
comply with any specific rule on a permanent basis or has
breached it incidentally, such publicly listed company is required to
disclose this information.
The application of the principles and best practice provisions of the
Dutch Corporate Governance Code is also subject to the “comply
or explain” (pas toe of leg uit) principle. If a company departs from
a best practice or principle in the Dutch Corporate Governance
Code, the reason for such departure must be explained in its man-
agement report.
More information can be found in the Company’s Corporate Gov-
ernance report.
Supervisory Board
In the financial year 2022, the Supervisory Board met 6 times. In
addition, the Audit Committee met three times. The Supervisory
Board also adopted four written resolutions. In the meetings, the
Supervisory Board discussed a wide range of topics:
►
The financial plan, strategy for the year 2022 and long-term
value creation was discussed at the beginning of the financial
year (namely, the guidance with respect to the MWps in de-
velopment and impact of electricity prices on revenue in-
crease) The Supervisory Board discussed the increase in
capacity of connected power plants (and its feasibility of the
project pipeline in development by the end of 2024), switch
from the various support mechanisms to merchant business
model, and other strategies for long-term value creation (de-
velopment of proprietary portfolio vs. acquisition of built or
ready-to-built projects; PPAs vs. generation of electricity in
proprietary plants etc.);
►
Financial results were discussed and analysed on quarterly
basis, including results and margins of the individual Com-
pany operational segments;
►
Developments on turbulent energy markets in EU and world-
wide, and specifically countries where the Company is active.
The Supervisory Board discussed the volatility of electricity
prices, the potential effect of the conflict in Ukraine, impact of
the shutdown of German nuclear power plants, continued
disruptions of the supply chain, planned governmental cap
on electricity prices and windfall taxes in each country and
the Company strategies of how to minimize their impact;
►
Current operational, financial and legal affairs were ana-
lysed, including the acquisition of Lerta and its synergies, dy-
namic growth in the size of the Company, development of
Australian projects with Raygen technology, PFAS pilot pro-
ject in cooperation with the Department of Defence in Aus-
tralia.
►
Financing of the Group, issue of Green Bonds, EUR currency
fixing of the loans as a leverage against rising interest rates;
►
The Supervisory Board, through a written resolution, adopted
and published (i) the Supervisory Board Succession and Re-
tirement Plan, (ii) Diversity Policy for the Management Board
and (iii) change to the Remuneration Policy.
Audit Committee
In 2022, Mr. Davidoff was appointed as the head of the Audit Com-
mittee during the general meeting held on 31
May 2022. In the
course of 2022, Audit Committee met three times:
►
The Audit Committee discussed the audit plan and the out-
come of the audit with the external auditors;
►
The chairman of the Audit Committee made an on-site visit
and met with the Management Board and individual employ-
ees/managers and reviewed the Company’s internal risk
management, controlling, compliance and internal audit pro-
cedures.
►
The chairman of the Audit Committee visited the Company’s
2.998 MWp power plant in Zdice, Czech Republic.
Further information on the Group’s corporate governance can be
found in the Corporate Governance report.
Anti-corruption and Anti-bribery Policy
The Board of Directors is committed to ensuring that all employees,
customers and suppliers act in an ethical manner and that stake-
holders are not the subject of unethical behaviours such as corrup-
tion, bribery, extortion or insider trading. Photon Energy Group
believes in free competition and will complete fairly, through honest
business practices.
An anti-corruption and anti-bribery policy has recently been imple-
mented within the Company, and an ad-hoc disciplinary committee
has been introduced, composed of representatives from the
Group’s HR and Legal departments, a Member of the Board and a
Compliance Officer. This committee will be assembled to discuss
any breaches of our anti-corruption and anti-bribery policy and de-
cide on the necessary course of action.
This policy was updated in February 2022 to include rules on
providing and receiving gifts, as well as reporting violations in ac-
cordance with the rules of the Photon Energy Group Misconduct
Reporting Policy, developed in March 2022.
Insider Trading Policy
An insider trading policy is signed by all Group employees along
with their contract of employment. This policy was developed to
make sure employees understand their obligations to preserve the
confidentiality of undisclosed information and to protect them and
the Company against legal liability. Employees who have perma-
nent access to confidential information are subject to trading re-
striction periods and to trading notifications. They are reminded of
their obligations on a quarterly basis.
A training course related to Insider trading was developed during
the reporting period and organized for all employees after the re-
porting period, in January 2023.
Code of Ethics
The foremost objective of the Group’s Code of Ethics is to share
and divulge the values that Photon Energy Group acknowledges
and accepts, at all levels, to provide all of the Company’s partners,
management and employees with guidance in ethical decision
making. It contains a section with specific rules of conduct for the
area of purchasing and procurement.
The document was updated in February 2022 to integrate princi-
ples regarding the prohibition of gender-based violence and har-
assment (GBVH).
A training course related to the Code of Ethics was organized for
all employees after the reporting period, in January 2023.
51
Risk Management
The Group’s risk management policies were established to identify
and analyse risks faced by the Group, to set appropriate risk limits
and controls, and to monitor risks and adherence to limits. Risk
management policies and systems are reviewed regularly to reflect
changes in market conditions and the Group’s activities. The
Group, through its training and management standards and proce-
dures, aims to develop a disciplined and constructive control envi-
ronment in which all employees understand their roles and
obligations.
The Group considers governance of top business risks a high pri-
ority. It focuses on risks with a high impact on the business and/or
high probability of occurrence, taking into consideration the
Group’s risk appetite. Our risk appetite refers to the nature and ex-
tent of risks we are willing to incur to achieve our strategic objec-
tives. Among others, the risk appetite considers revenue growth,
earnings sustainability, environmental impact, employee well-be-
ing, health and safety, and value creation for all stakeholders.
The Group regularly reviews risk appetite.
For all the risks listed in this report, control measures are in place,
and no shortcomings occurred in 2022.
The Audit Committee has performed a thorough and continuous
review of the internal risk management systems, controlling and
legal compliance policies, throughout the year and during its on-
site visit in September 2022. The assessment included the evalua-
tion of the existing processes in place, human resources, its com-
petences, and responsibilities as well as the reporting structure
within the organization. The chairman of the Audit Committee per-
formed the analysis through the consultations with the responsible
personnel (the management, the head of accounting and consoli-
dation, head of legal, head of compliance). He reviewed the proce-
dures and evaluated whether adequate resources are in place, and
discussed relevant topics with external auditors. The results of this
analysis were discussed with the Management Board.
It was con-
cluded that given the size of the Company, the current measures
with respect to internal risk management and control systems are
appropriate and satisfactory. The Supervisory Board also noted
with satisfaction that a new full-time position of risk manager was
created and filled as of the end of the financial year.
Compliance Management
The Group has a very low risk acceptance level with regards to
risks relating to compliance with legislation and regulations. The
Group’s Code of Ethics and Anti-bribery and Anti-corruption Policy
act as control measures against bribery and corruption, alongside
the Misconduct Reporting Policy.
Tax policies are formulated by both the Group and individual com-
panies. The Group generally follows the rules to tax profits in the
countries it provides its services. The Group does not engage in
any aggressive tax planning or structuring activities. There is no
formalised tax policy, however certain procedures are in place:
1.
The Group engages certified tax advisors in each country
in which it operates to comply with local tax requirements.
2.
The Group regularly monitors developments in taxation
and related areas and continually evaluates their impact on
the Group. Identified tax risks are regularly monitored and
evaluated.
3.
The Group undertakes analysis of tax risks before entering
new markets.
Principal Risk Related to the Group’s Business
and the Industry in Which It Operates
Risk of Dependence on Support of Photovoltaics
The Group is dependent on the economic development of the pho-
tovoltaic market. In the majority of countries worldwide, the photo-
voltaic sector is not yet competitive without state subsidy programs,
especially in comparison with the use of conventional energy
sources (e.g. nuclear power, coal, and natural and shale gas).
Therefore, the commercial operations of the Group are influenced
by the continuation of state-managed subsidy programs for photo-
voltaics.
In July 2021, the Slovak Republic decided to prolong and reduce
the feed-in tariff for PV power plants connected in 2010 and 2011.
The value of Company’s Slovak portfolio is not impacted by any of
the measures adopted by the Slovak government. In the Czech
Republic, a price cap of EUR 180 per MWh has been introduced
from 1 December 2022 to 31 December 2023 for PV installations
with an installed capacity exceeding 1 MWp. Above the cap price
a 90% tax applies.
In June 2022 the Hungarian government issued a decree introduc-
ing a 65% tax on the excess revenues (that is above the feed-in-
tariff/contract-for-difference price of EUR 85 per MWh) generated
by solar PV power plants which had either exited one of the support
schemes or had been awarded a METÁR license in auction but did
not execute the contract-for-difference with the designated Hungar-
ian state entity for the financial years 2022 and 2023, excluding
power plants with built-in capacity under 0.5 MW.
The Romanian government has introduced a price cap of RON 450
per MWh of solar PV generated electricity from 1 September 2022
until 31 March 2025. Above the price cap an 80% solidarity tax ap-
plies. However, in March 2022 Law 27/2022 has been passed
which explicitly exempts all new electricity generation capacity
commissioned after 1 September 2022 from any price caps. Based
on the status quo the Company’s power plants in Romania will not
be subject to the price cap.
Based on the status quo of price caps and windfall taxes adopted
by the governments in the Group’s core markets in the CEE region
the Board of the Company expects a modest negative impact in the
Czech Republic and Hungary and no negative impact in Slovakia
and Romania. New capacity additions in Romania and Hungary in
2023 are expected to drive material revenue and EBITDA growth
in 2023 and beyond.
Risk Associated with the Valuation of Special Purpose
Vehicles
In its Audited Consolidated Financial Statements, the Group is us-
ing for revaluation of the special purpose vehicles (SPVs) and its
property the so-called Discounted Cash Flow (DCF) method based
on IAS 16 rules. In the financial statements, the updated value is
higher than the purchase price, and consequently also above the
acquisition costs. There is a risk that the assumptions and founda-
tions of the evaluation will prove to be incorrect or overly favourable
and that extraordinary impairment in the balance of the company
will be necessary. Extraordinary impairment of this kind would pro-
foundly harm or burden the balance sheet as well as the results of
the Group’s the operating activities.
The Group assesses the probability of this risk as medium, with a
potentially moderate impact on the Group’s operations and finan-
cial results.
52
Risk Associated with Projects in the Pipeline
In addition to the continued monetisation its current portfolio of pho-
tovoltaic installations in operation, the Group also intends to de-
velop and either sell or operate additional PV projects, including
both projects developed by the Group and those acquired from
third parties. Development and/or acquisition of a project is always
based on an economic calculation which involves certain assump-
tions, such as the development of market interest, feed-in tariff,
electricity prices or the price of green certificates. If these assump-
tions should prove to be incorrect, or if certain factors develop dif-
ferently to what was planned, this could have an adverse effect on
the profitability of a PV installation.
All of the aforementioned factors could have a material adverse
effect on the Group’s business, results of operations or prospects.
The Group assesses the probability of this risk as medium, with a
potentially moderate impact on the Group’s operations and finan-
cial results.
Regulatory Risk
In the countries where the Group operates, the market for solar
projects, solar power products and solar electricity is heavily influ-
enced by national, state and local government regulations and pol-
icies concerning the electricity utility industry, as well as policies
disseminated by electric utilities. These regulations and policies of-
ten relate to electricity pricing. It is the Group’s intention to integrate
PV power that are not supported by the state into its portfolio. How-
ever, in these cases there is the risk of reduced income from the
integrated power plants due to falling electricity prices. In the worst-
case scenario, there could be low or no positive operational cash
flow generated, which in turn would lead to a situation where there
can be no pay-outs to the Group. The Group intends to actively
manage the revenues from merchant power plants using electricity
market hedging instruments (where available) and/or by entering
into PPA agreements with various durations and volumes.
Depending on their scope, any of these circumstances could have
a potentially adverse influence on the Group’s financial situation,
status and results. The Group assesses the probability of risk as
medium, with a potentially moderate impact on the Group’s opera-
tions and financial results, mitigated by the Group’s geographical
diversification.
Risk Associated with Cybersecurity
The Group has several cyber security systems in place and is per-
manently updating them to state-of-the-art security technologies.
Key applications are available only on a secure company network.
Document storage is a hybrid system of internally maintained
server storage and cloud storage. Communication of applications
operated by Photon Energy Group takes place using secure and
encrypted protocols. Every employee is acquainted with the cyber-
security rules during the onboarding process and documents with
these rules are available on the intranet. An IT helpdesk is also
accessible to report any issues encountered in this area.
Principal Financial Risks
The Group has exposure to the following financial risks:
►
Sovereign
►
Operational
►
Currency
►
Credit
►
Liquidity
►
Interest Rate
►
Inflation
In the notes to the Consolidated Financial Statements, information
is included about the Group’s exposure to each of the above risks,
the Group’s objectives, policies and processes for measuring and
managing risk, and the Group’s management of capital.
Sovereign Risk
The Company’s results can be adversely affected by political or
regulatory developments negatively impacting on the income
streams of projects in the portfolio. A number of countries have al-
ready succumbed to retroactive measures reneging on existing
agreements, guarantees and legislation by imposing levies, can-
celling contracts or renegotiating terms unilaterally or by other
measures reducing or in the worst-case cancelling Feed in Tariffs
(FiT) for renewable energy investments. Legal remedies available
to compensate investors for expropriation or other takings may be
inadequate. Lack of legal certainty exposes projects in the portfolio
to increased risk of adverse or unpredictable actions by govern-
ment officials, and also makes it more difficult for us to enforce ex-
isting contracts. In some cases these risks can be partially offset
by agreements to arbitrate disputes in an international forum, but
the adequacy of this remedy may still depend on the local legal
system to enforce the award.
Operational Risk
The economic viability of energy production using photovoltaic in-
stallations depends on FiT systems. The FiT system can be nega-
tively affected by a number of factors, including but not limited to a
reduction or elimination of the FiT or green bonus per KWh pro-
duced, an elimination or reduction of the indexation of the FiT and
a shortening of the period for which the FiT applies to PV installa-
tions. On the investment side, the Company faces uncertainty in
relation to the approval process for the construction of PV installa-
tions, grid connections and the investment cost per KWp of in-
stalled capacity. The operating and financial results of the
Company could be seriously affected by a sudden or significant
change in the regulatory environment in any of the countries where
the Company or its subsidiaries conduct business.
Currency Risk
The Group is exposed to a currency risk on sales, purchases and
borrowings that are denominated in a currency other than the re-
spective functional currencies of Group entities.
The transactions of the Group entities are mainly denominated in
CZK, EUR, AUD, CHF, RON, PLN and HUF. The Group does not
manage the foreign currency risk by the use of FX derivatives, it
rather uses natural hedging by actively managing FX positions. It
is not done in a formalised way.
Credit Risk
Credit risk is the risk of financial loss to the Group if a customer or
counterparty to a financial instrument fails to meet its contractual
obligations, and arises principally from the Group’s receivables
from customers, including the electricity distributors. The Group’s
maximum exposure to credit risk is reflected in the carrying
amounts of financial assets in the consolidated statement of finan-
cial position. Credit risk in respect of cash balances held with banks
and deposits with banks are managed via diversifications of bank
deposits and only with the major reputable financial institutions with
rating by S&P between A- and BBB+. For trade and other receiva-
bles, receivables from related and contract assets that do not con-
tain a significant financing component, the Group recognises a
lifetime expected loss allowance. The Group applies a provision
matrix that applies the relevant loss rates to the trade receivable
balances.
53
Liquidity Risk
Liquidity risk is the risk that the Group will encounter difficulty in
meeting the obligations associated with its financial liabilities that
are settled by delivering cash or another financial asset. The
Group’s approach to managing liquidity is to ensure, as far as pos-
sible, that it will always have sufficient liquidity to meet its liabilities
when due, under both normal and stressed conditions, without in-
curring unacceptable losses or risking damage to the Group’s rep-
utation.
Interest Rate Risk
Interest rate risk is the risk that the value of a financial instrument
will fluctuate due to changes in market interest rates. It is measured
by the extent to which changes in market interest rates impact on
net interest expense. The Company uses interest rate derivatives
to manage interest rate risk.
The change in fair value of these derivatives is recognized via the
equity of the Company and the result is shown in hedging reserve
of the Company’s equity.
Inflation Risk
State support, especially feed-in tariffs, is indexed in the cases of
Czech and Hungarian projects; i.e. they are subject to inflationary
adjustment that is defined by a specific band. In case of high infla-
tion, there is consequently a risk that the running operative costs
increase while the yields will not be adjusted accordingly. In pro-
jects that are not supported by the state there is a different risk -
namely that by lower inflation the calculated market prices for elec-
tricity will not develop as it was planned.
Climate Change-related Risks
Climate change represents both strategic and operational risks to
our business. These can be grouped as physical risks and transi-
tional risks. Physical risks include greater severity of flooding,
droughts or other extreme weather events which could disrupt our
operations and supply chain. Transitional risks range from regula-
tory frameworks and the rising price of carbon to the viability and
customer acceptance of emerging technologies. Another transi-
tional risk is our ability to set and meet Paris-aligned targets.
Our actions related to climate change mitigation are detailed in the
Group’s Sustainability reports. Our 2022 Sustainability Report does
not represent part of this Annual Report 2022. A separate sustain-
ability report is available on our website.
Physical Risks
Risk of Natural Disasters
The Group’s business could be materially and adversely affected
by natural disasters or other catastrophes, such as earthquakes,
fires, floods, hail, windstorms, severe weather conditions and envi-
ronmental accidents, which could potentially cause power loss,
communication failures, explosions or similar events. As a result of
any damages to the Group’s facilities, the Group could have to tem-
porarily suspend part or all of its facilities’ operations. Furthermore,
authorities could impose restrictions on transportation and imple-
ment other preventive measures in affected regions to deal with a
catastrophe or emergency, which could lead to the temporary clo-
sure of the Group’s facilities and declining economic activity at
large. Moreover, if a natural disaster results in the damage of any
of the Group’s PV power plants, the Group’s ability to fulfil its liabil-
ities may be considerably impaired, particularly if the damage is not
covered by insurance.
All of the aforementioned circumstances would have a significantly
adverse effect on the Group’s financial situation, status and results.
The Group assesses the probability of risk as low, with low potential
impact on the Group's operations and financial results thanks to the
geographic diversification of the Group’s business.
Meteorological Risk
The performance and therefore the earning potential of the compa-
nies within the Group are often dependent upon meteorological
conditions. Certain revenues for a generated kWh of energy are
admittedly guaranteed on the basis of the state subsidy programs;
however, the volume of energy generated depends on the period
of sunshine and the sun’s radiance. The Company’s subsidiaries
have used certain historically based assumptions in cash flow plan-
ning. It is, however possible that climatic conditions could change
in the future and that predictions regarding weather patterns and
hours of sunshine could prove incorrect. In cases such as these,
electricity generation at PV power plants would be below the ex-
pected level, adversely affecting the installation’s liquidity and the
asset, financial and earnings positions of the respective project
companies and on the Group as a whole.
The earnings from PV power plants are subject to seasonal fluctu-
ations in the weather. As such, earnings are higher in the summer
months and fall off significantly in winter. The companies within the
Group try to adapt their payment obligations, especially with regard
to interest and loans, to incoming payments. However, it cannot be
rules out that such adaptations may not always be possible, which
could result in an adverse effect on the asset, financial and earn-
ings position of the Group. With the realisation of investment pro-
jects in Australia, the overall financial liquidity of the Group will
become less seasonal due to the diversification of locations in the
northern and southern hemispheres.
The Group assesses the probability of risk as low, with low potential
impact on the Group’s operations and financial results.
Transitional Risks
Environmental Risk
In environmental matters, the Group must comply with laws, regu-
lations and directives valid in the location of each PV power plant;
these laws regulate such things as airborne emissions, sewage,
the protection of soil and groundwater as well as health and safety.
Transgressions against these environmental provisions can be
pursued according to civil, criminal and public law. In particular,
temporary provisions could encourage a third party to begin a legal
process or to demand costly measures to control and remove en-
vironmental pollution or to upgrade technical facilities. The proper-
ties necessary for PV power plants are partially owned by the
respective SPV. It cannot be ruled out that sites may be contami-
nated. The respective SPV is responsible for the removal of any
pollution, regardless of the cause. This could result in liability risks
and costs related to administrative orders or requirements.
All of these circumstances could have a negative impact on the
financial situation, status and results of the Group. The Group as-
sesses the probability of risk as low, with low potential impact on
the Group’s operations and financial results.
Climate Governance
At Photon Energy Group, sustainability is a core value, viewed as
central to the continual growth and success of any business. A key
element of the Group’s increasing focus on sustainability is the de-
velopment of strong ESG practices. In adopting a strategic ap-
proach to sustainability, the Group addresses material external
risks, to become more resilient and adaptable in the face of chal-
lenges such as climate change and creating a space for new ideas
and creative responses. In 2020, we laid the foundations for stra-
tegic management, controlling and reporting practices that are fully
54
geared toward sustainability. A sustainability department was cre-
ated to work closely with the board of directors and representatives
from several business units within the Company. The objective of
the department is to monitor the strategic coordination of the Com-
pany’s sustainability plans.
100% of our revenue is connected to activities adding sustainable
value to the environment. Beyond the Company’s work developing
solar energy and clean water solutions, various policies are in place
to ensure that our dedication to environmental causes is also re-
flected in our internal practices:
►
All of our field operations are subject to local environmental
regulations, which we strictly adhere to.
►
When disposing of waste, all recyclable materials such as
metal, wood, plastic, glass and paper are sorted and recy-
cled.
►
We generally do not use chemical fertilisers or pesticides
for landscape management.
►
For the cleaning of PV panels, we use only demineralised
water, no chemical agents.
►
When clearing land to construct new power plants, we con-
duct in-depth biodiversity studies and implement measures
to ensure that any unavoidable impact is minimised or re-
versed.
►
We follow all local guidelines and regulations regarding
community involvement and consultation.
►
When working with subcontractors, we prioritise local sup-
pliers to have a positive impact on the local economy
through job creation.
55
Corporate Social Responsibility
ESG Key Performance Indicators
The Company’s internal policies were reinforced to achieve a more efficient and effective integrated management system by utilising the
following performance objectives: environment, quality, and workplace health and safety. The Company’s ESG key performance indicators
are the following:
Environmental Data
2022
2021
Percentage of revenues connected to activities which create sustainable
value
100%
100%
Clean energy generated by our Proprietary portfolio of PV power plants
121.6 GWh
103.3 GWh
Assessment of our carbon footprint across scope 1 and 2 emissions
(CO2e tonnes)
409.6
342.8
CO
2
e savings
49.013 tonnes
(+11.7%)
43,867 tonnes
(+47.8%)
Social Data
Number of full-time staff / number of employees
212 / 220
(96%)
141 / 144
(98%)
Percentage of female employees
37%
37%
Number of employees who completed training courses
145 / 220 (66%)
64 / 144 (44%)
Turnover ratio
23%
36%
Gender Pay Gap between male and female employees as a % of male gross
salary)
* analysis performed based on comparable job positions
2.3%
na
Lost time injuries
0
0
Governance Data
Contributions to political parties as percentage of total revenues
0%
0%
Claims against the Company ruled by a court as a percentage of total
revenues
0%
0%
Gender equality Board of Directors (Female/Male)
0%
0%
Gender equality Supervisory Board (Female/Male)
33%
50%
Responsible procurement, subjected to due diligence
100% of our
technology purchases
95% of our
technology purchases
Social Commitments
The renewables industry is burgeoning, with a rapidly increasing
workforce. Within this fast-growing industry, a major challenge for
employers is to recruit, onboard and train new talent to enable con-
tinued expansion.
The Company supports and provides ongoing training and profes-
sional development, especially in areas related to health and safety
– in particular training for accreditation for electrical work – work-
station training for the adoption of new tools and the development
of other competencies such as linguistic skills. In March 2022, we
instituted an anti-corruption training program.
We never engage in the use of forced or child labour, nor do we
condone the mistreatment of individuals. In view of the high labour
and legal standards in the European Union and Australia, the risks
of human rights violations and violations of labour law – such as
child and forced labour or the suppression of freedom of associa-
tion – are extremely low.
During the reporting period, a CSR-Donation policy has been de-
veloped including the establishment of CSR days for employees
starting from January 2023.
Internal training courses related to insider trading and our Code of
Ethics have also been developed.
The Company’s social commitments are the following ones:
►
Stringent health and safety policies and procedures
are in place, and all employees are responsible for
complying with any applicable laws and regulations.
►
The Group embraces all forms of diversity and provide
equal employment opportunities without regard to gen-
der, race, religion, disability, sexual orientation or age.
►
The Group provides an open, inclusive and non-retali-
atory work environment, and discrimination of any kind
is not tolerated.
The Company ensures that all employees are treated
equally and objectively in opportunity and remunera-
tion, using merit-based criteria.
►
The Company understands its obligation to protect the
privacy of our customers and suppliers.
56
ESG developments in 2022
ESG
Management
►
Publication of our third annual
Sustainability Report for the year 2022
►
Our 2022 Sustainability Report has been prepared according to the GRI framework
►
Our Green Bond was tapped to EUR 77.5 million
►
Renewal of our ESG
Rating ongoing, with a released planned on 4 May 2023 (‘
very
good’rating and 75/100
received from sustainability rating agency imug | rating, the second
highest rating possible
(photonenergy.com/uploads/sustainability/imug-sustainability-rating-photon-energy-nv-2021-
one-pager.pdf) in May 2021)
ESG Actions
►
Tracking of our
CO2e footprint
across Scope 1, 2 emissions, and some elements across
Scope 3 emissions
►
Pilot project to test a new electro-nano-bioremediation technology with experts from universi-
ties in Liberec and Stuttgart
►
Internal mobility challenge
►
Employee engagement and ESG survey
►
Creation of a donation policy, including the establishment of CSR days for employees
►
Development of internal training course related to insider trading and our Code of Ethics
Sustainable Investments
As of the end of 2022, the net proceeds of the Group’s first green
bond amounting to EUR 75.9 million were allocated to:
►
Projects in development, under construction and commis-
sioned in Australia, Hungary, Poland and Romania for a
total of EUR 31.9 million.
►
The refinancing of our existing EUR Bond 2017/2022, by
the means of an exchange offer for EUR 26.9 million.
►
Liquid assets for a total amount of EUR 17.0 million.
With our allocated green bond proceeds, we support progress to-
wards the Paris Agreement and aspire to have a transformative
impact on the UN Sustainable Development Goals: #7 on afforda-
ble and clean energy and #13 on climate action.
The Tolna PV power plants commissioned in December 2021 and
May 2022 is expected to generate approximately 4.2 GWh per
year, corresponding to an estimated avoidance of 1,347 tonnes of
CO
2
e
emissions per year.
The estimated annual electricity generation of projects in develop-
ment/in construction amounts to 1,831 GWh, which would corre-
spond to an estimated avoidance of 1,120,200 tonnes of
CO
2
e
emissions.
Research and Development
The Company does not invest substantial amounts in research and development activities.
Personnel
As of 31 December 2022, the number of staff employed by the
Group was 220 (283 including Lerta employees, 144 employees as
of 31 December 2021). Management expects that the number of
employees in 2023 will be higher compared to the current year due
to the growth dynamics expected in the coming year.
57
Employee Share Purchase Programme
The management of the Company recognises the significant con-
tribution of team members to the future development of the Group.
Therefore, it manages an Employee Share Purchase Programme
(ESPP) as part of its motivation system. Under the terms of the
programme, the Group periodically purchases shares for participat-
ing employees equal to 10% of their gross compensation. The
disposition rights to these shares are limited and employees can
dispose of these shares only under specific conditions.
In 2022, employees were entitled, in line with the ESPP, to 63,144
shares (a value of EUR 134 thousand), compared to 48,044 shares
(a value of EUR 98 thousand) in 2021. The Company expects to
continue with the programme in 2023.
Going Concern
Management Statement
The Consolidated financial statements have been prepared on a
going concern basis, resulting from the Management’s assessment
of the Company’s ability to continue its operations for the foresee-
able future. The Management based its assessment on an evalua-
tion of, among others, the company’s financial position, expected
future cash flows and market developments. As of 31 December
2022, liquid assets amounted to EUR 21.358 million. The Manage-
ment also considered the Company’s ability to obtain financing,
taking into account the company’s credit standing. Expected future
cash flows are based on the latest forecasts. These forecasts take
into account internal and external developments relevant in the as-
sessment of the ability of the Company to continue as a going con-
cern,
including
but
not
limited
to
market
developments,
developments in the macro-economic environment and climate-re-
lated developments. The Management’s assessment did not lead
to uncertainties in relation to the Company’s ability to continue as
a going concern.
Fraud Management
We take a zero-tolerance approach to any incidents of fraud, brib-
ery or corruption in our operations and value chain. This approach
is set out in our Code of Ethics and our Third-party Conduct Princi-
ples. In 2022, we enhanced and further embedded our compliance
policies and procedures and conducted training courses in the area
of anti-bribery and corruption. A misconduct policy and a whistle-
blowing channel were set up in February 2022. The hotline is inde-
pendently operated, confidential and anonymous and is available
in all areas and languages where the Company operates. All
reports are assessed by the Compliance team and then addressed
on a case-by-case basis. The Compliance department and the
Board of Directors reviews the process and reports and ensures
that there are arrangements in place in the event an independent
investigation is needed and also a follow-up action is taken.
The Company’s Compliance department conducts compliance risk
assessments, including fraud related rissks in collaboration with
the Company’s Risk manager and the Audit Committee.
Anti-Takeover Measures
There are no ongoing agreements to which the Company is a party
and which take effect, alter or terminate upon a change of control
of the company following a takeover bid. No anti-takeover
measures have been implemented.
Articles of Association
Our Articles of Association outline certain of the Company’s basic
principles relating to corporate governance and organization. The
current text of the Articles of Association is available at the Trade
Register of the Chamber of Commerce and on our public website
The Rules Governing the Amendment of the Articles
of Association
In accordance with the Company’s Article of Association, the reso-
lution to amend the Articles of Association may only be adopted by
the General Meeting on the proposal of the Management Board
and it is adopted with a simple majority of votes cast. Notwithstand-
ing the aforementioned, a resolution to amend Article 7.3 of the
Articles of Association involving a change of the provision relating
to the Qualified majority to limit or exclude pre-emption rights or to
designate Management Board competent to limit or exclude pre-
emption rights, requires a majority of at least eighty percent (80%)
of the votes cast by the General Meeting. A proposal to amend the
Articles of Association shall always be mentioned in the notice of
the General Meeting. The text of the proposed amendment shall
be made available at the offices of the Company for inspection by
each shareholder and each usufructuary and pledgee to whom the
voting rights accrue until the end of the meeting. Failing such, the
resolution regarding the proposal may only be adopted by unani-
mous vote at a meeting at which the entire issued share capital is
represented.
Supervisory Board
In accordance with the applicable law, the General Meeting may
appoint the Supervisory Directors for a maximum of four years and
his/her term of office shall lapse on the day of the annual General
Meeting held in the fourth year after the year of his/her appoint-
ment. Two of the Supervisory Directors’ term expires in 2024, one
Supervisory Director’s term expires in 2026.
A Supervisory Direc-
tor may be re-appointed once for another period of four years after
which he/she may be re-appointed once for a maximum period of
two years, which term may be extended once for a maximum pe-
riod of two years. A Supervisory Director may serve for a maximum
of 12 years in total.
The Company has adopted a rotation schedule and succession
policy to provide continuity and avoid extended vacancies in the
positions of the Supervisory Board and Audit Committee. Photon
Energy’s succession plan is designed to ensure that the proper
function and necessary fulfilment of the Supervisory Board is met
58
in case of a vacancy due to retirement, resignation, death or pur-
suing new business opportunities.
In the event of an emergency departure, resignation or other va-
cancy in the Supervisory Board, the Chairman of the Supervisory
Board, if unavailable, the Chairman of the Audit Committee, if una-
vailable, any other member of the Supervisory Board shall convene
an extraordinary meeting of the Supervisory Board within latest one
month from the day of such vacancy to discuss the functioning of
the Supervisory Board and a new distribution of tasks within the
Supervisory Board and Audit Committee.
In line with the Supervisory Board Profile and the required diversity
of the Supervisory Board members, the Supervisory Board shall
propose a new suitable candidate to the General Meeting as soon
as practicable. The General Meeting shall appoint a new candidate
in accordance with the Articles of Association.
Board of Directors
In accordance with the Company’s Articles of Association, mem-
bers of the Board of Directors shall be appointed by the General
Meeting for a maximum period of four years. The term of office of
a Board member shall lapse on the day of the Annual General
Meeting to be held in the fourth year after the year of appointment.
A Board member may always be re-appointed for another maxi-
mum period of four years. The General Meeting may at any time
suspend and dismiss a Board member. The supervisory board is
not authorised to suspend a Board member.
During the course of the year 2022 the Supervisory Board defined
diversity policy for the Management Board, which will serve as a
guidance in the recruitment process, in case there is a need to
appoint new members to the Management Board. Supervisory
Board will take gender diversity into account as much as possible
in future appointments in accordance with article 2:276 paragraph
2 of the Dutch Civil Code, which aims at a representation of at least
30% of either gender in the Management Board.
Diversity
A diversity policy was drawn up as a part of the Supervisory Board
profile, which is published on the Company’s website.
The desired composition of the Supervisory Board is such that the
combined expertise, experience, diversity and independence of the
Supervisory Board members enables the Supervisory Board to
best carry out the variety of its responsibilities and duties with re-
gard to the Company and all stakeholders involved including its
shareholders, consistent with applicable law and regulations.
The Supervisory Board strives for a mixed composition in respect
of gender, age, nationality and background. Its aim is to have a
composition with a female representation of at least thirty percent
(30%) and a male representation of at least thirty percent (30%).
The target minimum participation of the minority group of at least
30% was achieved in case of the composition of the Supervisory
Board. Due to the size of the Board of Directors, which consists of
two members - founders only, the target minimum participation of
the minority group of at least 30% was not achieved. The diversity
policy assumes that in case of an enlargement of the Board of Di-
rectors from its current size, the Supervisory Board shall make best
efforts to nominate a person in order to reflect the following ratio:
at least 30% of female representation in the Board of Directors and
at least 30% of male representation in the Board of Directors.
Subsequent Events
Photon Energy Completed Full Takeover of Lerta
With reference to the investment agreement signed on 20 Decem-
ber 2022 with the founders of Lerta S.A., Photon Energy N.V. has
become holder of 100% of the share capital of the company on 1
February 2023. Acting based on a General Meeting authorization
from 31 May 2021, the Management Board of the Company de-
cided on 1 February 2023 to issue 1,238,521 new shares with a
nominal value of EUR 0.01 each. Pursuant to the issuance of the
new shares on 1 February 2023, the share capital of the Company
has increased from EUR 600,000.00 to EUR 612,385.21.
The new shares were issued against a contribution in-kind consist-
ing of 2,477,042 shares in Lerta S.A., in line with the above-men-
tioned investment agreement. Pursuant to Dutch law, there are no
pre-emptive rights of existing shareholders of the Company with
respect to the issuance of new shares against a non-cash contri-
bution. With this step the acquisition process of Lerta S.A. is com-
pleted and Photon Energy has become holder of 100% of the share
capital of Lerta S.A. The Management Board also resolved that the
newly issued shares shall be included in the collective deposit as
mentioned in Section 12 of the Dutch Giro Securities Act, and in-
tends to undertake all necessary actions to register these new
shares with the Czech and Polish depositaries acting as secondary
depositaries for the Company’s shares, and undertake all actions
that are necessary to apply for the listing and admission to trading
of these new shares on the Prague and Warsaw Stock Exchanges
and in the Open Market of the Frankfurt Stock Exchange.
Working Capital Credit Line for Photon Energy Tech-
nology CEE s.r.o.
In January 2023, a new loan agreement between Photon Energy
Technology CEE s.r.o. and Unicredit Bank Czech Republic and
Slovakia a.s. was signed. This credit line is meant to be used for
financing of the working capital needs of the trading business ac-
tivities with a credit line of up to EUR 5 million.
Photon Energy Commissioned Its First Romanian
Utility-Scale PV Power Plant
On 23 February Photon Energy has completed and grid-connected
its first Romanian PV power plant in the municipality of Șiria. The
plant has a capacity of 5.7 MWp. High efficiency bifacial solar mod-
ules mounted on single-axis trackers will deliver around 8.7 GWh
of renewable energy annually to the grid managed by Enel E-Dis-
tributie Banat. The electricity generated by the plant will be sold on
the energy market on a merchant basis, without any support or
power purchase agreement with an energy offtaker. The Company
expects the plant to generate EUR 1.4 million in revenues based
on the current forward prices for electricity base load in Romania
in the next 12 months. Located near Șiria in Romania’s Arad
County, the power plant extends over 9.3 hectares of greenfield
land and is equipped with some 10,600 solar panels. The power
plant is owned and operated by Siria Solar S.R.L., a special pur-
pose company fully-owned by Photon Energy Group.
Photon Energy Group Announced the Resignation of
Clemens Wohlmuth as CFO
On 7 March 2023, the Group announced the resignation of Clem-
ens Wohlmuth as the Group’s Chief Financial Officer. Clemens
Wohlmuth will remain involved during the handover process until
after the conclusion of the Group’s financial audit for the financial
year 2022. The Management Board appointed Mr. Andrej Horan-
sky as the Photon Energy Group’s new Chief Financial Officer
starting 8 March 2023. Andrej is a Slovak national and has gained
extensive experience in senior finance roles including CFO in the
financial services industry (Santander Consumer Finance, Simply
59
Kilcullen Capital Partners, GE Money Bank (Moneta), Generali
PPF Holding and Slavia Insurance, energy (Ezpada Group) and
automotive retail (AURES Holding).
Photon Energy Group Secured EUR 21.9 Million
Financing for Romanian Projects
On 17 March 2023, the Group closed a nonrecourse project refi-
nancing agreement in the amount of EUR 21.9 million with Austrian
Raiffeisen Bank International (RBI) for its portfolio of PV power
plants in Romania with a total installed capacity of 31.5 MWp. The
signing of the agreement represents the Group’s first project fi-
nancing of European PV assets that operate on a merchant basis,
selling energy to the market without a power purchase agreement
or state support. To date, only the Company’s two merchant utility-
scale power plants in Leeton, Australia, which have a combined
installed capacity of 14.6 MWp, have obtained non-recourse pro-
ject financing.
Photon Energy Secured DSR Capacity of 389 MW and
Locked-in EUR 24.8 Million in 2024 Revenue
On 16 March 2023, the Group’s subsidiaries Lerta JRM Sp. z o.o.
and Lerta S.A. (part of the Company’s New Energy Division) have
succeeded in the additional 2024 Polish capacity auction with 375
MW of Demand Side Response (‘DSR’). With the previously con-
tracted capacity of 14 MW for 2024, the Company’s total DSR ca-
pacity of 389 MW will lock-in PLN 116.8 million (EUR 24.8 million)
in total DSR revenues for 2024.
Photon Energy Group increases Green Bond to EUR
80.0 million
On 28 March 2023, the Group announced that it has successfully
increased its first 6.50% Photon Energy Green EUR Bond 2021/27
(ISIN: DE000A3KWKY4) to a total amount of EUR 80.0 million. The
additional nominal amount of EUR 2.5 million has been placed
through a private placement to institutional investors in the UK,
Switzerland, Germany, and Austria.
Photon Energy Exceeds 100 MWp in IPP Portfolio With
Three New Romanian PV Power Plants
On 13 April 2023, the Group announced the completion and grid-
connection of further three PV power plants near Calafat in Roma-
nia's Dolj County. The combined generation capacity of the new
installations is 6.0 MWp. The electricity generated by the plant will
be sold on the energy market on a merchant basis, without any
support or power purchase agreement with an energy offtaker. The
Company expects the plant to generate EUR 1.4 million in reve-
nues based on the current forward prices for electricity base load
in Romania over the next 12 months. The power plant is owned
and operated by a special purpose company fully-owned by Photon
Energy Group.
Board of Directors Statement
The Board of Directors has assessed the effectiveness of the de-
sign and operation of the internal control and risk management sys-
tems.
On the basis of this report, and in accordance with:
►
best practice 1.4.3 of the Dutch Corporate Governance
Code of December 2016, and Article 5:25c of the Financial
Supervision Act,
►
the aforementioned assessment, the current state of af-
fairs,
and to its best knowledge, the Board of Directors declares that:
►
The report gives sufficient insight into any shortcomings in
the operation of the internal risk management and control
systems.
►
The aforementioned systems provide a reasonable degree
of assurance that the financial reporting does not contain
any material misstatement.
►
Drawing up the financial reporting on a going concern basis
is justified based on the current state of affairs.
►
The Director’s report states any material risks and uncer-
tainties that are relevant with regards to the expectation of
continuity of the Company for a period of 12 months after
drawing up the report.
It should be noted that the above does not imply that these systems
and procedures provide absolute assurance as to the realisation of
operational and strategic business objectives, or that they can pre-
vent all misstatements, inaccuracies, errors, fraud and non-compli-
ances with legislation, rules and regulations.
In view of the above, the Board of Directors declares that to the
best of its knowledge:
►
The annual accounts give a true and fair view of the assets,
liabilities, financial position and results of the Company and
the subsidiaries included in their consolidation.
►
The Directors’ Report gives a true and fair view of the situ-
ation as of 31 December 2022 and of the state of affairs of
the company and its consolidated subsidiaries in the 2022
financial year, the details of which are included in its annual
accounts, and that the Directors’ Report describes the
main risks faced by the company.
Amsterdam, 24 April 2023
The Board of Directors:
Georg Hotar, Director
Michael Gartner, Director
60
Corporate Governance Report
Photon Energy Group is committed to high ethical standards, con-
ducts its business and operates in compliance with applicable laws,
regulations and generally accepted practices for good corporate
governance.
Dutch Corporate Governance Code
Photon Energy N.V. is required to apply the Dutch Corporate Gov-
ernance Code. The application of the principles and best practice
provisions of the Dutch Corporate Governance Code is not com-
pulsory and is subject to the “comply or explain” (
pas toe of leg uit
)
principle. Dutch companies are required under the laws of the
Netherlands to disclose in their annual reports whether they apply
the provisions of the Dutch Corporate Governance Code and if they
do not apply those provisions, to give the reasons for such non-
application. The Dutch Corporate Governance Code recognises
that non-application of its best practice provisions is not in itself
objectionable and indeed may be justified under certain circum-
stances. If a company departs from a best practice or principle in
the Dutch Corporate Governance Code, the reason for such depar-
ture must be explained in its management report. The table below
presents an indicative information on only the principles and best
practice of the Dutch Corporate Governance Code the Company
departs from as at the date of the annual report along with a corre-
sponding explanation. The Company complies fully with applicable
laws and regulations and with the remaining best practises.
The full text of the Dutch Corporate Governance Code can be
found on the webpages of the Corporate Governance Monitoring
Committee (Home | Monitoring Commissie Corporate Governance
(mccg.nl)).
Principle / Best Practice
Explanation of Departure from the Dutch Corporate Governance Code
Chapter 1. Long-Term Value Creation
Internal Audit Function (Principle 1.3)
Partially applied.
The Company partially adheres to this principle. An explanation of how the Company departs
from the principle is based on the analysis of the individual best practises below.
Appointment and dismissal (Best practice 1.3.1)
Not applied.
The Company does not apply this best practice as there is no formal internal audit unit in the
Company. As of the date of this
report the function of internal audit unit is performed by two senior employees
(“audit specialists”) with competence and knowledge of accounting and auditing procedures
who are informally
appointed by the Board of Directors. These procedures are being supervised by the Board of Directors.
The
Supervisory Board performed an annual assessment of internal audit procedures and included its conclusions
with regards to the existing alternative measures, along with any resulting recommendations, in the report of the
Supervisory Board. As of January 1 2023,
the Company appointed Risk Manager who supports Internal Audit
function.
Appointment and assessment of the functioning
of the external auditor (Principle 1.6)
Partially applied.
An explanation of how the Company departs from this principle is based on the analysis of
the individual best practises discussed below.
Engagement (Best practise 1.6.3)
Not applied.
The Supervisory Board recommended the engagement of PriceWaterhouseCoopers as the exter-
nal auditor at the Annual General Meeting held in 2022. The resolution was not adopted then, and the Board of
Directors finalized the terms of engagement with PriceWater
houseCoopers as the external auditor for the year
2022 after the Annual General Meeting.
Chapter 2. Effective Management and Supervision
Composition and size (Principle 2.1)
Partially applied.
An explanation how the Company deviates from this
principle is based on the analysis of the
individual best practises discussed below.
Diversity Policy and accountability about diver-
sity (Principle 2.1.6)
Partially applied.
The diversity requirements for the Supervisory Board are listed in the Profile of the Supervi-
sory Board adopted in 2021. The Diversity Policy
for the Board of Directors was adopted in 2022. The Company
is fully compliant with regard to gender diversity of the Supervisory Board (at least 1/3 of the Supervisory Board
members are males and at least 1/3 are female).
Due to the size of the Board of Directors
, which consists of
two members - founders only -
the target minimum participation of the minority group of at least 30% was
not achieved. The Diversity Policy assumes that in case of an enlargement of the Board of Directors
from
the current size, the Supervisory Board shall make best efforts to nominate a person in order to reflect the
following ratio: at least 30% of the Board of Directors
will be comprised of women and at least 30% of the
Board of Directors will be comprised of men.
Appointment, succession and evaluation (Princi-
ple 2.2)
Partially applied.
An explanation how the Company deviates from this principle is based on the analysis of the
individual best practises discussed below.
The Company believes that it adheres to this principle partially as
transparency of the procedures is ensured by the for
mal rules set out in the current regulations of the Company,
i.e. in Articles of Association.
Succession (Best practise 2.2.4)
Partially applied.
The succession plan for the Supervisory Board was implemented in the co
urse of the reporting
period. Succession plan for the Board of Directors will be discussed during the terms of the year 2023.
Duties of the selection and appointment commit-
tee (Best practice 2.2.5)
Not applicable.
This best practice has not been applied as there is no selection and appointment committee
appointed in the
Supervisory Board due its limited size. The entire Supervisory Board performs the function of
the committee.
It should be noted that the Articles of Association allow that such committees are appointed by
the Supervisory Board in the future, at the discretion of the Supervisory Board and according to the needs of the
Company.
Culture (Principle 2.5)
Partially applied.
An explanation how the Company deviates from this principle is based on the analysis of the
individual best practises discussed below.
Employee participation (Best practice 2.5.3)
Not applied.
The limited size of the Company, its distribution over several countries of operation and its flat
managerial structure does not justify implementation of an employee participation body.
Preventing conflict of interest (Principle 2.7)
Partially applied.
An explanation how the Company deviates from this principle is based on the analysis of the
individual best practises discussed below.
61
Principle / Best Practice
Explanation of Departure from the Dutch Corporate Governance Code
Personal loans (Best practice 2.7.6)
Not applied.
This best practice has not been applied as the Company has granted such loans to its
Board of
Directors’ members. All the details about those loans are disclosed in the annual report.
Chapter 3. Remuneration
Determination of Board of Directors remunera-
tion (Principle 3.2)
Partially applied.
An explanation how the Company deviates from this principle is based on the analysis of the
individual best practises discussed below.
Remuneration committee’s proposal (Best prac-
tice 3.2.1)
Not applied.
This best practise was not applied in the course of the reporting period
. The Supervisory Board
acting as the Remuneration Committee is planning to submit a proposal for 2023 financial year.
Accountability for implementation of remunera-
tion policy (principle 3.4)
Partially applied.
An explanation how the Company deviates from this principle is based on the analysis of the
individual best practises discussed below.
Agreement of Board of Directors member (Best
practice 3.4.2)
Not applied.
This best practice is not applicable as there are no Board of Directors’ agreements in place be-
tween the Company and Board of Directors members. The Board of Directors
was appointed by notarial deed
of incorporation in 2010 and re-appointed for the term of 4 years by the General Meeting on 4 December 2020.
Chapter 4. The General Meeting
Provision of information (Principle 4.2)
Partially applied.
An
explanation how the Company deviates from this principle is based on the analysis of the
individual best practises discussed below.
Policy on bilateral contacts with shareholders
(Best practice 4.2.2)
Not applied.
The Company does not have such policy in place.
The Company however keeps a dialogue with
its shareholders and provides extensive reports to its shareholders and investors, also with a quarterly online
presentation of business update and financial results during which questions from shareholders are answered.
Outline of anti-
takeover measures (Best practice
4.2.6)
Not applied.
This best practise has not been applied as there are no anti-
takeover measures implemented by
the Company. The Articles of Association state that anti-
takeover measures may be adopted by the Supervisory
Board, when necessary.
Casting votes (principle 4.3)
Partially applied.
An explanation how the Company deviates from this principle is based on the analysis of the
individual best practises discussed below.
Voting right on financing preference shares
(Best practice 4.3.4)
Not applicable.
There are no preference shares.
Publication of institutional investors’ voting pol-
icy (Best practice 4.3.5)
Not applied.
The Company has not implemented a
voting policy for institutional investors as there are currently
no institutional investors who have expressed an interest in participation in the Company’s general meetings
and a need for such policy to be implemented.
Report on the implementation of institutional in-
vestors’ voting policy (Best practice 4.3.6)
Not applied.
See explanation above
Issuing depositary receipts for shares (Principle
4.4)
Not applicable.
An explanation how the Company deviates from this
principle is based on the analysis of the
individual best practises discussed below.
Trust office board (Best practice 4.4.1)
Not applicable.
There is no trust office in the Company.
Appointment of board members (Best practice
4.4.2)
Not applicable.
See explanation under 4.4.1 above.
Board appointment period (Best practice 4.4.3)
Not applicable.
See explanation under 4.4.1 above.
Attendance of the general meeting (Best prac-
tice 4.4.4)
Not applicable.
See explanation under 4.4.1 above.
Exercise of voting rights (Best practice 4.4.5)
Not applicable.
See explanation under 4.4.1 above.
Periodic reports (Best practice 4.4.6)
Not applicable.
See explanation under 4.4.1 above.
Contents of the reports (Best practice 4.4.7)
Not applicable.
See explanation under 4.4.1 above.
Voting proxies (Best practice 4.4.8)
Not applicable.
See explanation under 4.4.1 above.
62
A Statement on the Company's Compliance with the Corporate Governance Principles Contained in
Best Practice for GPW Listed Companies 2022
In accordance with the WSE Best Practices, companies listed on
the main market of the WSE should observe the principles of cor-
porate governance set out in the WSE Best Practices. The WSE
Best Practices is a set of recommendations, principles, best prac-
tices and rules of procedure for governing bodies of publicly listed
companies and their shareholders. The WSE Rules and resolu-
tions of the WSE’s Board of Directors and its council set forth the
manner in which publicly listed companies disclose information on
their compliance with corporate governance rules and the scope of
information to be provided. If a publicly listed company does not
comply with any specific rule on a permanent basis or has
breached it incidentally, such publicly listed company is required to
disclose this fact in the form of a current report. Furthermore, a
publicly listed company is required to attach to its annual report
information on the scope in which it complied with the WSE Best
Practices in a given financial year. The Company strives to ensure
maximum transparency with respect to its operations, the best
quality of communication with its investors and the protection of the
rights of its shareholders, also in respect of areas not governed by
law. Accordingly, the Company has taken or will take the necessary
actions to observe all of the rules comprising the WSE Best Prac-
tices to the fullest extent possible. Below is a list of Best Practises
which the Company applies only partially or does not apply. The
rest of the Best Practises are observed and applied by the Com-
pany.
No.
Principle / Best Practice
Comments of the Company
1.
Disclosure Policy, Investor Communications
1.4.2
Present the equal pay index for employees, defined as the percentage
difference between the average
monthly pay (including bonuses,
awards and other benefits) of women and men in the last year, and
present information about actions taken to eliminate any pay gaps, in-
cluding a presentation of related risks and the time horizon of the
equality target.
The principle is not applied.
Due to the size of the Company (around 220 employees within 10 dif-
ferent locations) with different labour laws and standards of living, the
use of a common remuneration policy is not relevant. Equality princi-
ples applied throughout the Group are described in the Code of Ethics.
The Company ensures that all employees are treated equally and ob-
jectively in opportunity and remuneration, using merit-based criteria.
1.5.
Companies disclose at least on an annual basis the amounts ex-
pensed by the company and its group in support of culture, sports,
charities, the media, social organisations, trade unions, etc. If the com-
pany or its group pay such expenses in the reporting year, the disclo-
sure presents a list of such expenses.
The principle is not applied.
The amount of expense incurred by the Company and related to cul-
ture, sports, charities, media, social organization, trade unions and etc
during year 2022 was immaterial in the context of the Group's overall
business
2.
Board of Directors, Supervisory Board
2.2.
Decisions to elect members of the Board of Directors or the supervi-
sory board of companies should ensure that the composition of those
bodies is diverse by appointing persons ensuring diversity, among oth-
ers in order to achieve the target minimum participation of the minority
group of at least 30% according to the goals of the established diver-
sity policy referred to in principle 2.1.
The principle is not applied.
The target minimum participation of the minority group of at least 30%
was achieved in case of the composition of the Supervisory Board.
Due to the size of the Board of Directors, which consists of two mem-
bers - founders only, the target minimum participation of the minority
group of at least 30% was not achieved. The diversity policy assumes
that in case of an enlargement of the Board of Directors from the cur-
rent size, the Supervisory Board shall make best efforts to nominate a
person in order to reflect the following ratio: at least 30% of the Board
of Directors will be comprised of women and at least 30% of the Board
of Directors will be comprised of men.
2.7.
A company’s Board of Directors members may sit on corporate bodies
of companies other than members of its group subject to the approval
of the supervisory board.
The principle is not applied.
The principle is not applied however in the Rules of Procedure of the
Supervisory Board point 3.2 states that "Board of Directors members
and Supervisory Board members, shall report any other positions they
may have to the Supervisory Board in advance and, at least annually,
the other positions should be discussed at the Supervisory board
meeting". This partially mitigates the risks which are addressed by this
principle.
2.11.5.
In addition to its responsibilities laid down in the legislation, the super-
visory board prepares and presents an annual report to the annual
general meeting once per year. Such report includes at least the fol-
lowing:
assessment of the rationality of expenses referred to in principle 1.5;
The principle is not applied.
As the amount of expense incurred by the Company and related to
culture, sports, charities, media, social organization, trade unions and
etc during year 2022 was immaterial in the context of the Group's over-
all business and therefore not disclosed, Supervisory Board could not
comment on that.
3.
Internal Systems and Functions
3.2.
Companies’ organisation includes units responsible for the tasks of in-
dividual systems and functions unless it is not reasonable due to the
size of the company or the type of its activity.
The principle is not applied.
The Board of Directors and Supervisory Board believe that the current
organization and resources responsible for the individual systems are
sufficient and adequate to the size of the Company and specifics of its
business. Given the nature of the Company’s business, it seems rea-
sonable to keep risk management and controlling department inte-
grated as a part of the financial department, as they all provide
necessary input for the investment decisions. This ensures that both
financial and non-financial information is collected, analysed, and pro-
cessed within the same department and the optimal business decision
63
The full text of the statement on the company's compliance with the corporate governance principles contained in Best Practice for GPW Listed Companies
2022 is available on the Company’s website.
Management and Control Systems in Connection with Financial Reporting
With respect to financial reporting, the Company’s general objec-
tive is to have reliable reporting and ensure that transactions are
recorded and reported completely and correctly.
The Board of Directors regularly reviews the Group’s financial per-
formance and assesses whether adequate processes are in place
to evaluate the risks and effectiveness of controls related to the
financial reporting process at all levels of the organization. The Au-
dit Committee oversees the Company’s finances, financial report-
ing as well as the Internal Audit functions, as part of the Company’s
corporate governance. At the beginning of the 2023 the Risk Man-
ager was hired to complete the Company’s internal risk manage-
ment and control team.
No.
Principle / Best Practice
Comments of the Company
is taken. For more details please see the Supervisory Board report for
the year 2022.
3.3
Companies participating in the WIG20, mWIG40 or sWIG80 index ap-
point an internal auditor to head the internal audit function in compli-
ance with generally accepted international standards for the
professional practice of internal auditing. In other companies which do
not appoint an internal auditor who meets such requirements, the audit
committee (or the supervisory board if it performs the functions of the
audit committee) assesses on an annual basis whether such person
should be appointed.
The principle is not applied.
Due to the fact that Photon Energy was included in sWIG80 in year
2022, according to this principle, the Company is now required to ap-
point an internal auditor to head the internal audit function in compli-
ance with generally accepted international standards for the
professional practice of internal auditing. However, the Audit Commit-
tee performed a thorough and continuous review of the internal sys-
tems including internal audit function, throughout the year 2022 and
also during its on-site visit. The assessment included the evaluation of
the existing processes in place, human resources, its competences,
and responsibilities as well as the reporting structure within the organ-
ization. The chairman of the Audit Committee performed the analysis
through the consultations with the responsible personnel (the man-
agement, the head of accounting and consolidation, internal audit spe-
cialists, head of legal, head of compliance). He reviewed the
procedures and evaluated whether adequate resources are in place
and discussed relevant topics wit
h external auditors. The results of
this analysis were discussed with the Board of Directors.
It was con-
cluded that given the size of the Company, the current measures with
respect to internal audit function are appropriate and satisfactory. This
topic will be addressed again by Audit Committee during the course of
year 2023 and if needed necessary steps to establish internal audit
department will be undertaken.
3.6.
The head of internal audit reports organisationally to the president of
the Board of Directors and functionally to the chair of the audit com-
mittee or the chair of the supervisory board if the supervisory board
performs the functions of the audit committee.
The principle is not applied.
This principle is not applied as there is no separate internal audit unit
in the Company, there is no head of the internal audit department, who
could be placed in the organizational structure as required by this prin-
ciple. Further explanation can be found in comment 3.1. and 3.3.
3.10.
Companies participating in the WIG20, mWIG40 or sWIG80 index
have the internal audit function reviewed at least once every five years
by an independent auditor appointed with the participation of the audit
committee.
The principle is not applicable.
The Company is in the first year of this obligation hence this obligation
to review the internal audit function by an independent auditor was not
required in the course of the reporting period.
4.
General Meeting, Shareholder Relations
4.1.
Companies should enable their shareholders to participate in a gen-
eral meeting by means of electronic communication (e-meeting) if jus-
tified by the expectations of shareholders notified to the company,
provided that the company is in a position to provide the technical in-
frastructure necessary for such general meeting to proceed.
The principle is not applied.
Historically, there has never been an interest expressed by minority
shareholders to participate in a general meeting by means of elec-
tronic communication (e-meeting). While the company does not offer
participation at the general meeting through electronic means of com-
munication, it provides its shareholders an option to (i) vote in advance
on all resolutions on the agenda of a general meeting; and (ii) ask
questions in advance, in order to ensure full participation of all share-
holders. The shareholders also have an option to participate in quar-
terly investors podcast where they can pose questions and learn in
detail about financial results, business development and strategy.
4.3.
Companies provide a public real-life broadcast of the general meet-
ing.
The principle is not applied.
Please see the explanation provided in the principle 4.1.
4.5.
If the Board of Directors becomes aware a general meeting being
convened pursuant to Article 399 § 2 – 4 of the Commercial Compa-
nies Code, the Board of Directors immediately takes steps which it is
required to take in order to organise and conduct the general meet-
ing. The foregoing applies also where a general meeting is convened
under authority granted by the registration court according to Article
400 § 3 of the Commercial Companies Code.
The principle is not applied.
The Company is incorporated in the Netherlands and therefore the
Polish commercial code and regulation stipulated here does not apply
to the Company.
64
Shareholders Meetings
The Annual General Meeting was held on 31 May 2022, in accord-
ance with the Company’s Articles of Association.
The Annual General meeting approved the Consolidated Financial
Statements of the Company for the year 2021, considered Remu-
neration Report from the Supervisory Board and updated the Re-
muneration Policy. The Annual General Meeting approved the
extension of the Supervisory Board to three members and
appointed a new member of the Supervisory Board. The authoriza-
tion was granted to the Board of Directors to a) acquire the shares
in the share capital of the Company and b) to issue shares up to
EUR 10 million in the authorized capital c) to limit/exclude pre-emp-
tion rights of shareholders to the newly issued shares. Minutes of
the
meetings
are
available
on
the
Company’s
website
(
penv-minutes-of-the-agm-held-on-31-may-2022.pdf
(pho-
tonenergy.com)
).
Major Shareholders
According to the Company’s information, as of 31 December 2022, its main shareholders hold Shares representing the total number of votes
in the General Meeting and the Company’s share capital shown in the table below.
Shareholder
Number of
Shares
Share in the
Share Capital
(%)
Number of Votes
in the General
Meeting
Share in the Total
Number of Votes in
the General Meeting
(%)
Solar Future Cooperatief U.A.
21,775,075
36.29%
21 775 075
37,12%
Solar Power to the People Cooperatief U.A.
20,492,057
34.15%
20 492 057
34,93%
The ultimate beneficial owner of Solar Future Cooperatief U.A. is
Michael Gartner and the ultimate beneficial owner of Solar Power
to the People Cooperatief U.A. is Georg Hotar. Solely by virtue of
the voting power they hold, Solar Future Cooperatief U. A. and So-
lar Power to the People Cooperatief U.A. (and Messrs. Gartner and
Hotar indirectly) are controlling shareholders of the Company.
Based on representations of the members of the Board of Direc-
tors, there are no arrangements, known to the Company, the oper-
ation of which may at a subsequent date result in a change in
control of the Company.
The Powers of Board Members, in Particular the Power to Issue or Buy Back Shares
The Board of Directors is charged with the management of the
Company. The Board of Directors may decide on the issue of
shares if it was designated for that purpose by resolution of the
General Meeting for a specified period of not more than five years.
Upon the designation, the number of shares that may be issued,
shall be determined. The designation may at any time be extended
for a period of not more than five years. Unless provided otherwise
upon the designation, it may not be revoked. As long as the desig-
nation is in force, the General Meeting shall not be authorised to
resolve to issue shares. A resolution to issue shares shall stipulate
the price and the further terms and conditions of the issue.
The Board of Directors may also limit or exclude the pre-emption
rights if it was designated by the resolution of the General Meeting
for a specified period of not more than five years as competent to
limit or exclude pre-emption rights. Such a designation may only
be made if the Board of Directors was previously designated as
competent to issue shares or is simultaneously designated as
such. The designation may at any time be extended for a period of
not more than five years. Unless provided otherwise upon the des-
ignation, it may not be revoked. The designation shall terminate in
any event if the designation of the Board of Directors as competent
to issue shares terminates. A resolution of the general meeting to
limit or exclude pre-emption rights or to designate the Board of Di-
rectors competent to limit or exclude pre-emption rights shall re-
quire a majority of at least eighty percent (80%) of the votes cast.
The Board of Directors may be authorized by the General Meeting
to decide on acquisition of the Company’s shares for a considera-
tion. Such acquisition may only take place if and to the extent the
General Meeting has authorized the Board of Directors for that pur-
pose. Such authorisation shall be valid for not more than eighteen
months. In the authorisation the General Meeting shall specify the
number of shares which may be acquired, the manner in which they
may be acquired and the limits within which the price must be set.
The restrictions specified in Article 9 of the Articles of Association
must be observed. This shall not be required if and to the extent
the Company acquires shares in its own share capital for the pur-
pose of transferring the same to employees of the Company or of
a group company under a scheme applicable to such employees.
Resolutions of the Board of Directors with regard to an important
change in the identity or character of the Company or the business
enterprise are subject to the approval of the General Meeting, in-
cluding in any case:
(a)
transfer of the business enterprise or almost the entire
business enterprise to a third party;
(b)
entry into or termination of a long-term cooperation by the
Company or a subsidiary with another legal entity or com-
pany or as a fully liable partner in a limited or general part-
nership, if such cooperation or termination thereof is of far-
reaching significance to the Company;
(c)
acquisition or disposal by the Company or a subsidiary
company of a participating interest in the capital of a Com-
pany with a value of at least one third of the amount of the
assets as shown in the balance sheet with explanatory
notes or, if the Company prepares a consolidated balance
sheet, as shown in the consolidated balance sheet with ex-
planatory notes, according to the most recently adopted
annual accounts of the Company.
65
Composition & Functioning of the Statutory Bodies
The Company has a two-tier corporate structure. The managing body of the Company is the Board of Directors comprising of managing
directors, and the supervising body of the Company is the Supervisory Board comprising of supervisory directors.
Board of Directors
The Board of Directors is the statutory executive body (
raad van bestuur
) and managing directors are collectively responsible for the Com-
pany’s management and the general affairs of the Company. The Board of Directors is responsible for the day-to-day operations of the
Company.
Name
Position
Date of Birth
Start of Function
Georg Hotar
Director
(Bestuurder)
21.04.1975
4 December 2020*
Michael Gartner
Director
(Bestuurder)
29.06.1968
4 December 2020*
*Mr Hotar and Mr Gartner have been the Company’s managing directors since 9 December 2010, however, new term of their office (previously unlimited and
currently term of four years) has started on 4 December 2020, due to the changes in the Company’s corporate structure.
Georg Hotar
Georg Hotar co-founded the Company in 2010 and was the Com-
pany’s Chief Financial Officer until 2011. Since then he has spear-
headed the Group’s expansion in Europe and overseas as the
Chief Executive Officer. Mr Hotar started his professional career in
1995 as an equity sales trader with IB Austria Securities in Prague.
In 1996, he joined Carnegie AB in London as an equity analyst and
later that year he moved to ICE Securities Ltd. in London as an
equity analyst for the TMT sectors in the CEE region. In 1999, he
joined FFC Fincoord Finance Coordinators Ltd. in Zurich as an in-
vestor relations specialist. In 2000, he founded Central European
Capital, a financial advisory boutique headquartered in Prague. In
1999, he graduated from the London School of Economics with a
BSc Accounting and Finance degree. In 2001, he completed and
obtained a Master in Finance degree in finance from the London
Business School.
Michael Gartner
Michael Gartner co-founded the Company in 2010 and was the
Company’s Chief Executive Officer until 2011. Since then he has
held the position of Chief Technology Officer and until last year held
a position of the Managing Director of Photon Energy Australia. Mr
Gartner has an extensive experience in the photovoltaic business
and is instrumental in driving the Company’s utility-scale project
development, EPC, commercial solar and off-grid and solar-hybrid
power solutions. Between 2011 and end of 2022, his focus was on
developing Group’s projects in Australia. In 2007 he developed one
of the first large PV installations in the Czech Republic. Between
1994 and 2004, he was an equity and debt analyst and head of
fixed income sales in ING and Commerzbank Securities in Prague.
From 2005 to 2007, he ran an investment boutique specializing in
medium-term notes in the Eurobond market and M&A. In 1991, he
completed and obtained a bachelor’s degree in economics from
University of Newcastle in Australia. He holds MBA title from the
US Business School in Prague obtained in 1994.
In accordance with the Company’s Articles of Association, mem-
bers of the Board of Directors shall be appointed by the General
Meeting for a maximum period of four years and his term of office
shall lapse on the day of the Annual General Meeting to be held in
the fourth year after the year of his appointment. A Board member
may always be re-appointed for another maximum period of four
years. The General Meeting may at any time suspend and dismiss
a Board member. The supervisory board is not authorised to sus-
pend a Board member.
Supervisory Board
The Supervisory Board is a supervisory body (
raad van toezicht)
and supervisory directors are collectively responsible for the Company’s
supervision, advising the Board of Directors and the general affairs of the Company.
Name
Age
Gender
Nationality
Date of Initial
Appointment
Term of
Office
Function
Independency
Status
1
Marek Skreta
56
male
Swiss
4.12.2020
2024
Chairman of the
Supervisory Board
Independent
Boguslawa Skowronski
66
female
Polish, Swiss, U.S.
4.12.2020
2024
Member of the
Supervisory Board
Independent
Ariel Sergio Davidoff
55
male
Swiss
31.5.2022
2026
Chairman of the
Audit Committee
Independent
1
Independency is defined within the meaning of the Dutch Corporate Code
66
The Supervisory Board provides guidance and oversight to the
Board of Directors on the general affairs of the company. They also
serve as Audit Committee.
The supervisory board and audit committee is comprised of three
members, Boguslawa Skowronski, Marek Skreta and Ariel Sergio
Davidoff, appointed to a four-year term of office. The Supervisory
Board is elected by the General Meeting for a period of 4 years.
More about the election process in the Supervisory Board report.
More information can be found in the Supervisory Board report.
To our best knowledge there were no transactions in the course of
the year 2022, in which a conflict of interest with the members of
the Board of Directors and members of the Supervisory Board oc-
curred. The Company is compliant with the best practices 2.7.3 and
2.7.4 of the Dutch Corporate Governance Code. In addition, no
transactions between the Company and legal or natural persons
who hold at least 10% of the shares in the Company occurred in
2022, corresponding to the best practice provision 2.7.5 of the
Code.
Articles of Association
Our Articles of Association outline certain of the Company’s basic
principles relating to corporate governance and organization. The
current text of the Articles of Association is available at the Trade
Register of the Chamber of Commerce and on our public website
The Rules Governing the Amendment of the Articles
of Association
In accordance with the Company’s Article of Association, the reso-
lution to amend the Articles of Association may only be adopted by
the General Meeting on the proposal of the Board of Directors and
it is adopted with a simple majority of votes cast. Notwithstanding
the aforementioned, a resolution to amend Article 7.3 of the Articles
of Association involving a change of the provision relating to the
Qualified majority to limit or exclude pre-emption rights or to desig-
nate Board of Directors competent to limit or exclude pre-emption
rights, requires a majority of at least eighty percent (80%) of the
votes cast by the General Meeting. A proposal to amend the Arti-
cles of Association shall always be mentioned in the notice of the
General Meeting. The text of the proposed amendment shall be
made available at the offices of the Company for inspection by
each shareholder and each usufructuary and pledgee to whom the
voting rights accrue until the end of the meeting. Failing such, the
resolution regarding the proposal may only be adopted by unani-
mous vote at a meeting at which the entire issued share capital is
represented.
Diversity Policy, Succession Plan
Supervisory Board
The diversity policy was drawn up as a part of the Supervisory
Board profile, which is published on the Company’s website.
The desired composition of the Supervisory Board is such that the
combined expertise, experience, diversity and independence of the
Supervisory Board members enables the Supervisory Board to
best carry out the variety of its responsibilities and duties with re-
gard to the Company and all stakeholders involved including its
shareholders, consistent with applicable law and regulations.
The Supervisory Board strives for a mixed composition in respect
of gender, age, nationality and background. Its aim is to have a
composition consisting of at least thirty percent (30%) female mem-
bers and at least thirty percent (30%) male members.
Besides the Diversity Policy, the Company has also adopted rota-
tion schedule and succession policy to provide continuity and avoid
extended vacancies in the positions of the Supervisory Board / Au-
dit Committee. Photon Energy’s succession plan is designed to en-
sure that the proper function and necessary fulfilment of the
Supervisory Board is met in case of vacancy due to retirement, res-
ignation, death or pursuing new business opportunities.
In the event of an emergency departure, resignation or other va-
cancy in the Supervisory Board, the Chairman of the Supervisory
Board, if unavailable, the Chairman of the Audit Committee, if una-
vailable, any other member of the Supervisory Board shall convene
an extraordinary meeting of the Supervisory Board within latest one
month from the day of such vacancy to discuss the functioning of
the Supervisory Board and a new distribution of tasks within the
Supervisory Board/Audit Committee.
In line with the Supervisory Board Profile and the required diversity
of the Supervisory Board members, the Supervisory Board shall
propose a new suitable candidate to the General Meeting as soon
as practicable. The General Meeting shall appoint a new candidate
in accordance with the Articles of Association.
The whole policy can be found on the Company websites (
Mi-
crosoft Word - rotation schedule and succession policy (pho-
tonenergy.com)
Board of Directors
Due to the size of the Board of Directors, which historically con-
sisted of two founding members only, it was not possible to apply
the same diversity policy to the Board of Directors.
The current Board of Directors is comprised of two male members
(100% male). The Company aims to have an adequate balanced
composition of the Board of Directors. However, also in view of the
limited size of the Board of Directors, the selection and appoint-
ment are primarily based on expertise, experience, backgrounds
and skills necessary for the position.
During the course of the year 2022 the Supervisory Board defined
diversity policy for the Board of Directors, which will serve as a
guidance in the recruitment process, in case there is a need to ap-
point new members to the Board of Directors. Supervisory Board
will take gender diversity into account as much as possible in future
appointments and shall aim at a representation of at least 30% of
either gender in the Board of Directors.
67
Whistleblowing
The Company set up a misconduct whistleblowing portal (SpeakUp
Line_in which concerns about ethical and other misconduct can be
reported by all stakeholders (both internal and external). The hot-
line is independently operated, confidential and anonymous and is
available in all areas and languages where the Company operates.
All reports are assessed by the Compliance team and then
addressed on a case-by-case basis. The Compliance department
and the Board of Directors reviews the process and reports and
ensures that there are arrangements in place in the event an inde-
pendent investigation is needed and also a follow-up action is
taken.
Company’s Shares
The Company’s issued share capital amounts to EUR 612,385.21,
divided among 61,238,521 issued shares, each of a nominal value
of EUR 0.01. There are no restrictions on the transfer of shares and
no special control rights relating to the shares. No restriction of the
voting rights attached to the shares exists, except for the voting
rights attached to shares held by the Company as treasury shares
which cannot be voted in accordance with Article 29.7 of the Arti-
cles of Association.
The Company has instituted a share buyback program based on
the Board of Director’s resolution, dated 16 December 2022 which
was adopted pursuant to a previous authorization by the General
Meeting on 31 May 2022. It is applicable with respect to a maxi-
mum of 250,000 shares, up to a maximum of PLN 3,750,000, and
shall last no longer than until 19 June 2023. The Board of Directors
engaged Santander Brokerage Office Poland to act as a sole bro-
ker.
68
Supervisory Board Report for Year 2022
The Supervisory Board of the Company is responsible for super-
vising and advising the Board of Directors. In exercising its role, the
Supervisory Board follows the applicable law, the Articles of Asso-
ciation of the Company, Dutch and Polish Corporate Code of
Conduct, Rules of Procedure of the Supervisory Board, and the
Company’s interests. It is a separate body that operates inde-
pendently of the Board of Directors.
Composition and Diversity
Name
Age
Gender
Nationality
Date of Initial
Appointment
Term of
Office
Function
Independence
Status
1
Marek Skreta
56
male
Swiss
4.12.2020
2024
Chairman of the
Supervisory Board
Independent
Boguslawa Skowronski
66
female
Polish, Swiss, U.S.
4.12.2020
2024
Member of the
Supervisory Board
Independent
Ariel Sergio Davidoff
55
male
Swiss
31.5.2022
2026
Chairman of the
Audit Committee
Independent
1
Independence is defined within the meaning of the Dutch Corporate Code
In accordance with the applicable law, the General Meeting may
appoint the Supervisory Directors for a maximum of four years and
his/her term of office shall lapse on the day of the annual General
Meeting held in the fourth year after the year of his/her appoint-
ment. Two of the Supervisory Directors’ term expires in 2024, one
Supervisory Director’s term expires in 2026. A Supervisory Director
may be re-appointed once for another period of four years after
which he/she may be re-appointed once for a maximum period of
two years, which term may be extended once for a maximum pe-
riod of two years. A Supervisory Director may serve for a maximum
of 12 years in total.
The profile of the Supervisory Board member was prepared and
adopted by the Supervisory Board on 31 March 2021 and is pub-
lished on the Company’s website. The composition of the Supervi-
sory Board also complies with the gender, expertise and other
requirements as defined in the Supervisory board profile and Dutch
law. At least one third of the Supervisory Board is comprised of
female members and at least one third is comprised of male
members. In order to further diversify the expertise and background
of the Supervisory Board, in the 2022 financial year the number of
the Supervisory Directors was increased from 2 to 3 members and
Mr. Davidoff was appointed as the third member of the Supervisory
Board. He also assumed a role of the chairman of the Audit Com-
mittee. His term expires two years following the two other mem-
bers’ and his appointment will therefore ensure a more staggered
succession in line with the Succession and Retirement Plan
adopted on October 14, 2022 by the resolution of the Supervisory
Board. In 2022 the Supervisory Board has prepared a Diversity &
Inclusion Policy for the Board of Directors. The Board of Directors
currently is not diverse in terms of gender requirement; however,
the senior managers who play a key role in the management of the
Company contribute to the gender diversification of the manage-
ment.
All Supervisory Directors are independent within the meaning of
best practise provisions 2.1.7, 2.1.8 and 2.1.9. of the Dutch Corpo-
rate Governance Code.
Role of the Supervisory Board
In accordance with the applicable law and the Rules of Procedure,
the Supervisory Board is tasked with the supervision of the policies
of the Board of Directors and the general course of affairs of the
Company and its affiliated business. The supervision of the Board
of Directors includes,
inter alia
, the strategy of the Company, the
financial reporting process, functioning of internal risk manage-
ment, maintenance of the Company’s corporate governance
structure, liaising with the Company’s external auditor and supervi-
sion of preparation of annual accounts. Full account of the Super-
visory Board responsibilities is given in Article IV of the Rules of
Procedure, published on the Company’s website. The Supervisory
Board is authorized to inspect the books and records of the Com-
pany and the Board of Directors shall provide the Supervisory
Board with information required for the performance of its duties.
Meetings
In accordance with the Article VII of the Rules of Procedure, the
Supervisory Board meets whenever a Supervisory Director consid-
ers appropriate and as often as it is required for the proper perfor-
mance of the Supervisory Board duties. In any event, the
Supervisory Board shall meet at least once a year. The Supervisory
Board may also adopt resolutions without holding a meeting pro-
vided that all Supervisory Directors have consented to this manner
of adopting resolutions and the votes are cast in writing or by elec-
tronic means.
In the financial year 2022, the Supervisory Board met 6 times. In
addition, the Audit Committee met three times. The Supervisory
Board also adopted four written resolutions. In the meetings, the
Supervisory Board discussed a wide range of topics:
►
The financial plan, strategy for the year 2022 and long-term
value creation was discussed at the beginning of the finan-
cial year (namely, the guidance with respect to the MWps
in development and impact of electricity prices on revenue)
The Supervisory Board discussed the increase in capacity
of connected power plans (and its feasibility of the project
pipeline in development by the end of 2024), switch from
the various support mechanisms to merchant business
model, and other strategies for long-term value creation
(such as development of proprietary portfolio vs. acquisi-
tion of built or ready-to-built projects; PPAs vs. generation
of electricity in proprietary plants etc.);
69
►
Financial results were discussed and analysed on quar-
terly basis, including results and margins of the individual
Company operational segments;
►
Developments on turbulent energy markets in EU and
worldwide, and specifically countries where the Company
is active. The Supervisory Board discussed the volatility of
electricity prices, the potential effect of the conflict in
Ukraine, impact of the shutdown of German nuclear power
plants, continued disruptions of the supply chain, planned
or already introduced governmental caps on electricity
prices and windfall taxes in each country and the Company
strategies of how to minimize their impact;
►
Current operational, financial and legal affairs were ana-
lysed, including the acquisition of Lerta and its synergies,
dynamic growth in the size of the Company, development
of Australian projects with Raygen technology, PFAS pilot
project in cooperation with the Department of Defence in
Australia.
►
Financing of the Group, issue of Green Bonds, EUR cur-
rency fixing of the loans as a leverage against rising inter-
est rates;
►
The Audit Committee discussed the audit plan and the out-
come of the audit with the external auditors;
►
The chairman of the Audit Committee made an on-site visit
and met with the Board of Directors and individual employ-
ees/managers and reviewed Company’s internal risk man-
agement, controlling, compliance and internal audit
procedures (more on this topic below).
►
The chairman of the Audit Committee visited the Com-
pany’s 2.998 MWp power plant in Zdice, Czech Republic.
►
The Supervisory Board, through a written resolution,
adopted and published (i) the Supervisory Board Succes-
sion and Retirement Plan, (ii) Diversity Policy for the Board
of Directors and (iii) change to the Remuneration Policy.
Attendance of Supervisory Board Members
Supervisory Board Meetings
Boguslawa Skowronski
100%
Ariel Sergio Davidoff
100%
Marek Skreta
100%
Evaluation
During an open discussion in the meeting, the Supervisory Direc-
tors performed a self-evaluation and also the evaluation of the
Board of Directors, individually and as a whole. They agreed that
the Supervisory Board operated efficiently and its cooperation with
the Board of Directors and the auditors was good. It was concluded
that the Supervisory Board as a whole, as well as its individual
members, functioned well. The communication from the Board of
Directors takes place in a transparent and constructive manner.
They further stated that the addition of one more member as the
Audit Committee Chairman, Mr. Davidoff, was beneficial for the
Company. He orientated himself well and assumed his role
promptly.
The Supervisory Board has further evaluated the functioning of the
Board of Directors as a whole, as well as its individual members in
its closed meeting and also in discussions with the Board of Direc-
tors. They stated that the communication between the Boards was
very good; the discussions were held in an open and transparent
atmosphere while maintaining a sufficiently critical review. Both
Management Directors were available and active and provided all
cooperation and information necessary for successful functioning
of the Supervisory Board.
Committees
In accordance with Article VIII of the Rules of Procedure, the Su-
pervisory Board may appoint standing and/or ad hoc committees
from among its members which are charged with tasks specified
by the Supervisory Board. Currently, due to the small size of the
Supervisory Board, the function of each committee is performed by
the entire Supervisory Board. Apart from the Audit Committee,
which the Supervisory Board created formally on 4 December
2020, no committees were established.
Other committees, such
as Remuneration Committee or Selection and Appointment Com-
mittee, will be established if the need for such committees arises in
the future. Up until then, the Supervisory Board will perform all
functions as a whole.
The Company’s Audit Committee (and its chairman, in particular)
undertakes preparatory work for the Supervisory Board’s decision-
making regarding the supervision of the integrity and quality of the
Company’s financial reporting and the effectiveness of the
Company’s internal risk management and control systems. It main-
tains contact with the external auditors, and also monitors the
Board of Directors in connection with the Company’s funding, tax
policy and application of IT technology, especially with respect to
cybersecurity.
In 2022, the role of the head of the Audit Committee was assumed
by Mr. Davidoff who was elected by the general meeting held on
31 May, 2022. In the course of 2022, Audit Committee met three
times, in total. The Audit Committee met twice with the external
auditor, reviewed the audit plan and was presented with the out-
come of the audit.
The Supervisory Board, performing a function of the Remuneration
and Nomination Committee, prepared the Diversity Policy for the
Board of Directors, evaluated the Board of Directors’ and Supervi-
sory Board’s remuneration and prepared the Remuneration Report
which shall be submitted to the General Meeting.
70
Assessment of the Internal Control, Internal Audit, Risk Management, Compliance Systems
The Audit Committee has performed a thorough and continuous
review of the internal risk management systems, internal audit
function, controlling and legal compliance policies, throughout the
year and also during its on-site visit in September 2022. The as-
sessment includes the evaluation of the existing processes in
place, human resources, its competences, and responsibilities as
well as the reporting structure within the organization. The chair-
man of the Audit Committee performed the analysis through the
consultations with the responsible personnel (the management, the
head of accounting and consolidation, internal audit specialists,
head of legal, head of compliance). He reviewed the procedures
and evaluated whether adequate resources are in place and dis-
cussed relevant topics with external auditors. The results of this
analysis were discussed with the Board of Directors. It was con-
cluded that given the size of the Company, the current measures
with respect to internal audit function, internal risk management
and control systems are appropriate and satisfactory. The Super-
visory Board also noted with satisfaction that a new full-time posi-
tion of risk manager was created and filled as of 1 January 2023.
The matter will be revisited and assessed during the 2023 financial
year given the growing size of the Company and integration of
Lerta.
Assessment of the Compliance with the Best Corporate Governance Standards
Supervisory Board reviewed the compliance report for 2022 and
discussed with the Board of Directors the practises which were im-
proved during year 2022 and those which still remain as ‘not
applied’. The Supervisory Board gave recommendations on
measures which shall be taken to further improve the compliance
with best practises during the course of the year 2023.
Financial Statements 2022
The financial statements were audited by PricewaterhouseCoop-
ers Accountants N.V. whose nomination and engagement as the
external auditor for 2022 financial year was approved by the Board
of Directors in accordance with Article 31.2 of the Articles of Asso-
ciation. The Supervisory Board established that the external audi-
tor was independent of the Company. The 2022 financial
statements were approved by the Supervisory Board on 24 April
2023. The Supervisory Board will submit the financial statements
to the Annual General Meeting and will propose that the sharehold-
ers adopt them and release the Board of Directors from all liability
in respect of its managerial activities and release the Supervisory
Board from all liability in respect of its supervision duties.
Conclusion
It goes without saying that 2022 was an exceptional year in every
aspect. While the high energy price continued to plague European
households and most industries, the Company benefited from this
development. It all but quadrupled its year to year revenues and
turned its economic result into profit. The goal for 2023 will be to
maintain the Company’s growth and successfully integrate Lerta’s
business line and its employees into the Photon Energy Group.
On behalf of the Supervisory Board, we would like to thank the
Board of Directors and all employees of Photon Energy Group for
their commitment and personal contribution to the successful finan-
cial year 2022.
Amsterdam, 24 April 2023
Marek Skreta
Boguslawa Skowronski
Ariel Sergio Davidoff
Original signed.
71
Remuneration Report
The remuneration of the Board of Directors is paid out in accord-
ance with the Remuneration Policy, prepared by the Supervisory
Board and adopted by the General Meeting on 1st June, 2021. An
amendment to the Remuneration Policy was submitted by the Su-
pervisory Board to the General Meeting and adopted on May 31,
2022. It aims to attract, motivate and retain qualified and experi-
enced individuals and reward them with a competitive remunera-
tion package while considering its size and unique characteristics.
Gender, age, nationality, race, ethnic origin or other personal
characteristics do not play any role in determining remuneration
practice.
This Remuneration Report comprises information within the mean-
ing of articles 2:135b Dutch Civil Code and Section 3.4.1 of the
Dutch Corporate Governance Code and is also published as part
of the 2022 Annual Report. It is submitted to the General Meeting
for an advisory vote. The General Meeting 2022 approved the Re-
muneration Report with a 100% vote.
Board of Directors Remuneration
Fixed Remuneration
The Board members take part in the day-to-day activities and they
receive a fixed remuneration adequate to the competitive market
levels of remuneration. In 2022, the Company did not perform any
comparison within a reference group of its international/industry
peers in order to determine the remuneration.
Since the Board members are also majority shareholders, it has
been decided that their compensation for the responsibility and
function of the Board members shall be deemed mostly realized
through the value creation and share appreciation. In accordance
with the Remuneration Policy, the Board members therefore re-
ceive remuneration solely as part of their employment by an affili-
ated company within the Photon Energy Group and they do not
receive compensation for their duties of serving on the Board of
Directors for the Group of entities.
Furthermore, no emoluments of the Managing Directors, including
pension payments were charged to the Company. No service con-
tracts with the Company nor any of its Subsidiaries have been pro-
vided to a Managing Director that give entitlement to benefits upon
termination of employment. Mr. Georg Hotar receives a regular sal-
ary as an employee in his function as managing director of Global
Investment Protection AG in Switzerland, and Mr. Michael Gartner
receives a regular salary as an employee in his function as man-
aging director of Photon Energy Australia Pty Ltd. in Australia.
The 2022 financial year was marked by turbulences on the energy
market and unpredictable regulatory reactions but despite that, the
Company made significant progress in strengthening the balance
sheet and improving the operational performance.
Business performance highlights and Remuneration Comparison
2022
% change
2021
Revenues
EUR 95.136 million
+161.7%
EUR 36.359 million
EBITDA
EUR 24.308 million
+153.6%
EUR 9.584 million
Net result
EUR 6.262 million
nm
EUR -6.433 million
Installed Capacity
91.9 MWp
+1.5%
90.5 MWp
Remuneration Board of Directors
EUR 0.597 million
+28.3%
EUR 0.466 million
Remuneration Employees without Board of Directors
EUR 8.490 million
+42.6%
EUR 5.955 million
Number of Employees
220 (283 including 63
Lerta employees)
+52.8%
(+96.5%)
144
Average remuneration per full time employee
EUR 49 thousand
12.4%
EUR 44 thousand
Variable Remuneration and Stock Options
In accordance with the amended Remuneration Policy, an annual
variable remuneration (short-term incentive) linked to companies
KPIs and adequate to competitive market levels can be awarded to
the Board members. The variable remuneration shall be paid after
the publication of the audited annual accounts. In alignment with
the Company’s strategy, the Supervisory Board, at its discretion,
will consider short or longer-term goals and their respective weights
and targets for the respective bonus period; a part of the variable
remuneration may therefore reflect a period longer than one per-
formance year. The Supervisory Board shall also consider the fol-
lowing: (i) Company’s strategy; (ii) historical performance and
business outlook; (iii) long term value creation; (iv) stakeholders
expectations.
The Managing Directors currently do not receive stock options or
any other rights to acquire shares in the Company. In line with the
Remuneration Policy, the interests of the Company in long-term
value creation are ensured by the members of the Board of Direc-
tors being also the founders and majority shareholders of the Com-
pany. As such, the long-term incentive for the Board of Directors is
the Company‘s share appreciation. Both directors benefit primarily
from the growth of the Company’s value so their interests are
aligned with the interest of other (minority) shareholders.
No stock options or other rights were granted to the Managing Di-
rectors or the employees of the Company in 2022.
72
Claw-backs/Severance Payments
No claw-back of remuneration was exercised in 2022. No severance payment was made to the members of the Board of Directors.
Overview of the Total Remuneration of the Board of Directors
In thousands of EUR
Total fixed
compensation
Total variable
compensation
Ratio Fixed/Total
Compensation
Stock options
granted
Georg Hotar, Managing Director and CEO
2022
350
97
78.3%
0
2021
321
0
100.0%
0
Michael Gartner, Managing Director and CTO
2022
150
0
100.0%
0
2021
144
0
100.0%
0
The internal pay ratio, as average compensation of the Board
members in relation to the average annual compensation per full
time employee of the Company for the financial year 2022 in-
creased due to the bonus payment and was 6.1 in 2022 (5.3 in
2021).
The Company’s shares were not listed on the public regulated mar-
kets before January 2021, and therefore, the Company was not
obliged to publish the Remuneration Report in the financial years
prior to 2021. For this reason, the Company can only publish com-
parisons with last financial year.
Comparison of Internal Pay Ratio
Year
Internal Pay Ratio
2022
6.1
2021
5.3
Loans
The following loans have been granted to the Managing Directors by the Company or the Company’s affiliated entity.
In thousands of EUR
Total Loan Amount in 2022
% change
Total Loan Amount in 2021
Georg Hotar, Managing Director and CEO
594
6.8%
556
Michael Gartner, Managing Director and CTO
91
8.3%
84
The loans bear an interest rate of 3% and are short term for a period of up to 12 months.
The Company or its affiliated entity also provided loans to the entities fully owned by the Managing Directors.
In thousands of EUR
Total Loan Amount in 2022
% change
Total Loan Amount in 2021
Solar Age Investments B.V.*
1,148
16.2%
988
Solar Power to the People Cooperatief U.A.**
614
237.4%
182
* Company jointly controlled by Mr Georg Hotar and Michael Gartner
** Company controlled by Mr Georg Hotar
The loans bear an interest rate of 3% and are short term for a period of up to 12 months.
73
Supervisory Board Remuneration
The Remuneration Policy aims at providing a competitive compen-
sation package to attract, motivate and retain qualified Supervisory
Directors while considering the Company’s size and its unique
characteristics. This is essential for executing the Company’s strat-
egy and safeguarding and promoting its long-term value and sus-
tainability. Supervisory Board members receive fixed remuneration
for their responsibilities that does not depend on the Company‘s
results in order to protect their independence when supervising the
manner in which the Board members implement the long-term
value creation strategy. These responsibilities are part of the mem-
bership of the Supervisory Board and its Audit Committee and the
position of Chairman of the Supervisory Board and/or Audit Com-
mittee. The certainty of the fixed compensation also allows
Supervisory Board members in their supervisory role to focus on
the long-term interest and sustainability of the Company. Each
member of the Supervisory Board is entitled to reimbursement by
the Company for all expenses incurred by him/her in connection
with performing his/her duties as the Supervisory Board member.
Due to its small size, all members of the Supervisory Board perform
functions of the Audit and other Committees. Therefore, the chair-
man of the Supervisory Board and the chairman of the Audit Com-
mittee are not entitled to an extra compensation for the
performance of their function.
The Company does not grant loans, advance payments or guaran-
tees to members of the Supervisory Board.
Overview of the Supervisory Board Remuneration
In thousands of EUR
Total fixed compensation in 2022
Total fixed compensation in 2021
Boguslawa Skowronski
15
15
Marek Skreta
15
15
Ariel Sergio Davidoff*
8.75
n/a
* Mr. Davidoff’s term of office commenced on 31 May 2022.
Lord Howe Island, Australia
Financials
77
Photon Energy N.V.
Financial Statements
For the Year Ended 31 December 2022
Photon Energy N.V.
Financial Section
Annual Report 2022
Financial Statements for the Year Ended 31 December 2022
78
Table of Contents
Photon Energy N.V. Consolidated Financial Statements
For the Year Ended 31 December 2022
80
Consolidated Statement of Comprehensive Income
for the Year Ended 31 December
81
Consolidated Statement of Financial Position
as of 31 December
82
Consolidated Statement of Changes in Equity
for the Year Ended 31 December
83
Consolidated Statement of Cash Flows
for the Year Ended 31 December
84
Notes to the Consolidated Financial Statements
For the Year Ended 31 December 2022
85
1.
Reporting Entity
86
2.
Basis of Preparation
86
2.1
Statement of Compliance
86
2.2
Basis of Measurement
86
2.3
Functional Currency
86
2.4
Use of Estimates and Judgments
86
2.4.1
Consolidation of Special Purpose Entities
87
2.4.2
Recognition of Deferred Tax Asset
87
2.4.3
Recognition of Revenues from Contracts with
Customers
87
2.4.4
ECL Measurement
87
2.4.5
Key Assumptions Used in Measurement of Fair
Value of Other Financial Investments
87
2.4.6
Impairment of Goodwill
87
2.4.7
Initial Recognition of Intangible Assets
87
2.4.8.
Useful Economic Life of Tangible and Intagible
Assets and Right of Use
88
2.4.9.
Business Combination
88
3.
Application of New and Revised EU IFRSs
88
3.1
New and Revised EU IFRSs Affecting Amounts
Reported in the Current Year (and/or Prior Years) 88
3.2
New Accounting Pronouncements
88
4.
Significant Accounting Policies
89
4.1
Basis of Consolidation
89
4.1.1
Business Combinations
89
4.1.2
Subsidiaries
89
4.1.3
Loss of Control
90
4.1.4
Investments in Associates and Jointly Controlled
Entities (Equity-accounted Investees)
90
4.1.5
Transactions Eliminated on Consolidation
90
4.2
Foreign Currency
90
4.2.1
Foreign Currency Transactions
90
4.2.2
Foreign Operations
90
4.2.3
Cash and Cash Equivalents/Liquid Assets
90
4.2.4
Borrowing Costs
90
4.3
Financial Instruments
90
4.3.1
Non-derivative Financial Assets
91
4.3.2
Non-derivative Financial Liabilities
91
4.3.3
Derivative Financial Instruments
91
4.3.4
Cash Flow Hedges that Qualify for Hedge
Accounting
91
4.3.5
Share Capital
92
4.4
Property, Plant and Equipment
92
4.4.1
Recognition and Measurement
92
4.4.2
Depreciation
92
4.5
Right-of-use Assets
92
4.6
Intangible Assets
93
4.6.1
Goodwill
93
4.7
Impairment
93
4.8
Inventories
93
4.9
Provisions
93
4.9.1
Warranties
93
4.10
Lease Liabilities
93
4.11
Revenue Recognition
94
4.11.1
Revenue from Electricity Generation
94
4.11.2
Revenue from Sale of Goods
94
4.11.3
Revenues from Sale of Services
94
4.11.4
Revenue from Engineering, Procurement and
Construction (EPC)
94
4.12
Finance Income and Financial Expenses
95
4.13
Employee Benefits
95
4.14
Government Grants
95
4.15
Income Tax
95
4.16
Earnings Per Share
95
4.17
Segment Reporting
95
4.18
Changes in Presentation of Financial Information 96
5.
Determination of Fair Values
96
5.1
Property, Plant and Equipment
96
5.2
Inventories
97
5.3
Financial Instruments – Other Financial Assets
and Derivatives
97
6.
Financial Risk Management
97
6.1
Risk Management Framework
97
6.2
Sovereign Risk
97
6.3
Operational Risk
97
6.4
Currency Risk
98
6.5
Credit Risk
98
6.6
Liquidity Risk
98
6.7
Interest Risk
98
6.8
Force Majeur Risk
98
7.
Operating Segments
99
8.
Business combination
102
8.1
Valuation of Lerta
103
8.2
Steps of the acquisition
103
9.
Acquisitions of Subsidiary and Non-controlling
Interests; Financial Information for the Joint
Ventures
105
9.1
Establishment of New Subsidiaries
105
9.2
Acquisitions of Subsidiaries
105
9.3
Financial Information for the Joint Ventures
106
Photon Energy N.V.
Financial Section
Annual Report 2022
Financial Statements for the Year Ended 31 December 2022
79
10.
Revenue
108
11.
Other Income
109
12.
Raw Materials and Consumables Used
109
13.
Solar Levy
110
14.
Personnel Expenses
110
15.
Other Expenses
110
16.
Impairment Charges
111
17.
Financial Income and Financial Expense
111
18.
Income Tax Expense
112
18.1
Income Tax Recognized in Profit or Loss
112
18.2
Reconciliation of Effective Tax Rate
112
19.
Property, Plant and Equipment
113
20.
Right-of-use Assets and Lease Liabilities
115
21.
Goodwill
116
22.
Intangible Assets
117
23.
Other Financial Investments
118
24.
Deferred Tax Assets and Liabilities
120
25.
Inventories
121
26.
Trade and Other Receivables, Loans to Related
Parties
121
27.
Assets and Liabilities Arising from Contracts with
Customers
123
28.
Liquid Assets
124
29.
Capital and Reserves
124
30.
Earnings Per Share
127
31.
Loans and Borrowings
128
32.
Provisions
131
33.
Trade and Other Payables
131
34.
Current Income Tax Receivables / Current Tax
Liability
131
35.
Derivative Financial Instruments
132
36.
Financial Risk Management
132
36.1
Liquidity Risk
132
36.2
Credit Risk
133
36.3
Interest Rate Risk
133
36.4
Currency Risk
134
37.
Fair Value Disclosures
135
37.1
Recurring Fair Value Measurements
135
37.2
Assets and Liabilities Not Measured at Fair
Value but for Which Fair Value is Disclosed
138
38.
Presentation of Financial Instruments by
Measurement Category
139
39.
Related Parties
139
40.
Group Entities
141
41.
Contingent Assets and Liabilities, Commitments
146
42.
Subsequent Events
146
Standalone Financial Statements
For the Year Ended 31 December 2022
148
Company Balance Sheet as of 31 December 2022
149
Company Income Statement for the Financial Year
Ended 31 December 2022
150
Notes to the Company Financial Statements
For the Year Ended 31 December 2022
151
43.
Accounting Information and Policies
152
43.1
Basis of Preparation
152
43.2
Financial Fixed Assets
152
44.
Financial Fixed Assets
152
45.
Accounts Receivable from Group Companies
154
46.
Current Assets
155
47.
Shareholders’ Equity
156
47.1
Reconciliation of Movement in Capital and
Reserves
156
47.2
Share Capital and Share Premium
157
48.
Long-Term Debt
158
49.
Current Liabilities
160
50.
Financial Instruments
160
50.1
General
160
50.2
Fair Value
160
50.3
Liquidity risk
161
51.
Net Turnover
161
52.
Other Operating Expenses
161
53.
Other Interest Income and Similar Income
162
54.
Other Interest Expense and Similar Expense
162
55.
Share in Results from Participating Interests
162
56.
Employee Benefits and Information
162
57.
Fees of the Auditor
163
58.
Related Parties
163
58.1
Transactions with Key Management Personnel
163
59.
Cash Flow Statement
164
Other Information
165
I.
Provisions in the Articles of Association
Governing the Appropriation of Profit
166
II.
Independent Auditor’s Report
166
80
Photon Energy N.V.
Consolidated
Financial Statements
For the Year Ended 31 December 2022
Photon Energy N.V.
Financial Section
Annual Report 2022
Consolidated Financial Statements for the Year Ended 31 December 2022
81
Consolidated Statement of Comprehensive Income for the Year Ended 31 December
In thousands of EUR
Note
2022
2021
Revenue
10
Other income
11
Raw materials and consumables used
12
-43,929
-12,729
Solar levy
13
-1,969
-883
Personnel expenses
14
-9,534
-6,742
Other expenses
15
-15,947
-6,839
Earnings before interest, taxes, depreciation & amortisation (EBITDA)
Depreciation
19,20,22
-8,949
-10,670
Impairment charges
16
-684
-231
Gain (loss) on disposal of investments
9.3
Gain on derecognition of associate
8
Share of profit equity-accounted investments (net of tax)
9.3
Results from operating activities (EBIT)
-712
Financial income
17
Financial expenses
17
-9,535
-6,770
Gains less losses on derecognition of financial liabilities at amortised costs
17
-114
-420
Revaluation of derivatives
17
Profit/loss before taxation (EBT)
-5,927
Income tax due/deferred
18
-2,463
-506
Profit/loss from continuing operations
-6,433
Profit/loss
-6,433
Other comprehensive income (loss)
Items that will not be reclassified subsequently to profit or loss
Revaluation of property, plant and equipment
19,29
Revaluation of other investments
23
Items that will be reclassified subsequently to profit or loss
Foreign currency translation difference - foreign operations
29
-1,943
Derivatives (hedging)
29,35
Items that will be reclassified subsequently to profit or loss – related to JV
Derivatives (hedging)
29,35
Other comprehensive income
Total comprehensive income
Profit/loss attributable to:
Attributable to the owners of the company
-6,404
Attributable to non-controlling interest
-47
-29
Profit/loss for the year
-6,433
Total comprehensive income attributable to:
Attributable to the owners of the company
Attributable to non-controlling interest
-47
-29
Total comprehensive income
Earnings per share
Earnings per share (basic) (in EUR)
30
-0.118
Earnings per share (diluted) (in EUR)
30
-0.107
Total comprehensive income per share (in EUR)
30
The notes on pages 85 to 147 are an integral part of these financial statements.
Photon Energy N.V.
Financial Section
Annual Report 2022
Consolidated Financial Statements for the Year Ended 31 December 2022
82
Consolidated Statement of Financial Position as of 31 December
In thousands of EUR
Note
31 December 2022
31 December 2021
Assets
Goodwill
21
Intangible assets
22
Property, plant and equipment
19
Right of use- leased assets
20
Long term advances
26
Investments in equity-accounted investees
9.3
Long-term receivable from derivatives
26
Other receivables - non-current
26
Deferred tax asset
24
Other non-current financial assets
23
Non-current assets
Inventories
25
Contract asset
27
Trade receivables
26
Other receivables
26
Loans to related parties
26,39
Current income tax receivable
34
Prepaid expenses
Liquid assets
28
Cash and cash equivalents
Liquid assets with restriction on disposition
Precious metals
Current assets
Total assets
Equity & Liabilities
Equity
29
Share capital
Share premium
Revaluation reserve
Legal reserve
Hedging reserve
Currency translation reserve
Retained earnings
-15,408
-24,680
Other capital funds
29
Treasury shares held
29
-139
-38
Equity attributable to owners of the Company
Non-controlling interests
-197
-150
Total equity
Liabilities
Loans and borrowings
31
Issued bonds
31
Lease liability
20
Other non-current liabilities
31
Provisions
32
Deferred tax liabilities
24
Non-current liabilities
Loans and borrowings
31
Issued bonds
31
Trade payables
33
Other payables
33
Contract liabilities
27
Lease liability
20
Current tax liabilities
18,34
Current liabilities
Total liabilities
Total equity and liabilities
The notes on pages 85 to 147 are an integral part of these financial statements.
Photon Energy N.V.
Financial Section
Annual Report 2022
Consolidated Financial Statements for the Year Ended 31 December 2022
83
Consolidated Statement of Changes in Equity for the Year Ended 31 December
In thousands of EUR
Note
Share
capital
Share
premium
Statutory
reserve
fund
Revaluation
reserve
Currency
translation
reserve
Hedging
reserve
Other
capital
funds
Own
treasury
shares
Retained
earnings
TOTAL
Non-
controlling
interests
TOTAL
EQUITY
Restated balance as at 1 January 2021
28
-2,580
-325
-87
-22,098
-121
Profit/loss for the year
-6,404
-6,404
-29
-6,433
Increase in revaluation of PPE
19,29
Change in fair value of derivatives
29
Change in fair value of other investments (FVOCI)
23,29
Foreign currency translation differences
29
Change in fair value of derivatives (JV share)
35
Other comprehensive income
Total comprehensive income
-6,404
-29
New shares placed with share premium
29
-49
Other movements
29
Recycled from revaluation reserve to retained earnings
29
-3,822
BALANCE at 31 December 2021
29
-38
-24,680
-150
Profit/loss for the year
-47
Increase in revaluation of PPE
19,29
Change in fair value of derivatives
29
Change in fair value of other investments (FVOCI)
23,29
Foreign currency translation differences
29
-1,943
-1,943
-1,943
Change in fair value of derivatives (JV share)
35
Other comprehensive income
-1,943
Total comprehensive income
-1,943
-47
Acquisition of subsidiary
8
Other movements
29
-101
Employee share scheme
29
Recycled from revaluation reserve to retained earnings
29
-2,963
BALANCE at 31 December 2022
29
-139
-15,408
-197
The notes on pages 85 to 147 are an integral part of these financial statements.
Photon Energy N.V.
Financial Section
Annual Report 2022
Consolidated Financial Statements for the Year Ended 31 December 2022
84
Consolidated Statement of Cash Flows for the Year Ended 31 December
In thousands of EUR
Note
2022
2021
Cash flows from operating activities
Profit/loss for the year before tax
-5,927
Adjustments for:
Depreciation
19,20,22
Share of profit of equity-accounted investments
9
-127
-141
Impairment charges
26
Gain on disposal of financial investments
9
-464
Net finance costs
17
Other non-cash items
-5,991
Changes in:
Trade and other receivables
26
-7,544
-1,478
Gross amount due from customers for contract work
27
-23
-106
Prepaid expenses
26
-157
-7
Inventories
25
-17,890
-1,187
Trade and other payables
33
-2,351
Income tax paid (advances)
33
-1,728
-2,349
Net cash from operating activities
Cash flows from investing activities
Acquisition of property, plant and equipment
19,22
-27,576
-8,619
Acquisition of subsidiaries, associates, JV
9
-6,214
Acquisition of other financial asset - precious metals
28
-277
-2,849
Acquisition of other investments
23
-120
-4,325
Proceeds from sale of investments
9
Net cash used in investing activities
-33,430
-14,233
Cash flows from financing activities
Proceeds from issuance of ordinary shares
29
Proceeds from borrowings
31
Transfer to/from restricted cash account
28
-2,785
Repayment of borrowings
31
-6,649
-19,898
Repayment of principal element of lease liability
20,31
-668
-577
Proceeds from issuing bonds
31
Payment of placement fee/exchange bonus fee for bonds issued
17,31
-331
-1,202
Repayment of long term liabilities/bonds
31
-23,719
-21,281
Interest payments
31
-8,281
-6,076
Proceeds from terminated derivatives
17
Net cash from financing activities
Net decrease/increase in cash and cash equivalents
-21,235
Cash and cash equivalents at 1 January
Cash and cash equivalents at 31 December
28
The notes on pages 85 to 147 are an integral part of these financial statements.
85
Notes to the Consolidated
Financial Statements
For the Year Ended 31 December 2022
Photon Energy N.V.
Financial Section
Annual Report 2022
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2022
86
1.
Reporting Entity
51447126, is a joint-stock company incorporated under the laws of
pany is Barbara Strozzilaan 201, 1083HN Amsterdam . The consol-
idated financial statements of the Company as at and for the year
ended 31 December 2022 comprise the Company and its subsidi-
aries (together referred to as the “Group” and individually as “Group
entities”) and the Group’s interest in jointly controlled entities.
a joint-stock company incorporated and domiciled in Netherlands .
Principal place of business on the Company is Netherlands .
Photon Energy NV’s shares are listed on the regulated markets of
the Warsaw and Prague Stock Exchanges, as well as on the Quo-
tation Board of the Frankfurt Stock Exchange. Trading of the
shares on regulated markets on the Warsaw Stock Exchange and
Prague Stock Exchange commenced on 5 January 2021. Trading
of the Company’s shares on the Quotation Board of the Open
Market of the Frankfurt Stock Exchange (FSX) commenced on 11
January 2021.
The bonds are traded on the Open Market of the Frankfurt Stock
exchange, and on the stock exchanges in Berlin, Hamburg, Han-
nover, Munich and Stuttgart.
The Group is mainly engaged in the development of photovoltaic
power plants. This activity involves securing suitable sites by pur-
chase or long-term lease, obtaining all licenses and permits, the
design, procurement and installation of photovoltaic equipment, fi-
nancing, operations and maintenance. Photon Energy pursues a
comprehensive strategy of focusing both on green-field and rooftop
installations while trying to cover the largest possible part of the
value chain and lifecycle of the power plant. In addition, the Group
launched a new service line Water which offers comprehensive
services in the fields of contaminated land and ground water reme-
diation and water purification.
2.
Basis of Preparation
2.1
Statement of Compliance
The consolidated financial statements have been prepared in ac-
cordance with International Financial Reporting Standards (IFRSs)
as adopted by the European Union (“EU IFRSs”) and title 9 Book 2
of the Netherlands Civil code. It represents the international ac-
counting standards adopted in the form of European Commission
Regulations in accordance with Regulation (EC) No 1606/2002 of
the European Parliament and of the Council.
The consolidated financial statements were authorised for issue by
the Board of Directors on 24 April 2023.
Going Concern
The Consolidated financial statements have been prepared on a
going concern basis, resulting from the Management’s assessment
of the Company’s ability to continue its operations for the foresee-
able future. The Management based its assessment on an evalua-
tion of, among others, the company’s financial position, expected
future cash flows and market developments. As of 31 December
2022, liquid assets amounted to EUR 21.358 million. The Manage-
ment also considered the Company’s ability to obtain financing,
taking into account the company’s credit standing. Expected future
cash flows are based on the latest forecasts. These forecasts take
into account internal and external developments relevant in the as-
sessment of the ability of the Company to continue as a going con-
cern,
including
but
not
limited
to
market
developments,
developments in the macro-economic environment and climate-re-
lated developments. The Management’s assessment did not lead
to uncertainties in relation to the Company’s ability to continue as
a going concern
2.2
Basis of Measurement
The consolidated financial statements have been prepared on his-
torical cost basis except for the following material items in the state-
ment of financial position:
►
Property, plant and equipment – photovoltaic power plants
are measured at revalued amounts (for revaluation details
refer to the note 19)
►
Financial instruments, except for derivatives, FVPL and
FVOCI financial investments, are measured at amortised
costs
►
Derivatives, FVPL and FVOCI financial investments are
measured at fair value.
2.3
Functional Currency
These financial statements are presented in EUR.
The functional currencies used in the Group are CZK for Czech
subsidiaries, EUR for Dutch, German and Slovak companies, CHF
for Swiss subsidiary, HUF for Hungarian entities AUD for Australian
subsidiaries ROM for Romanian entities and PLN for Polish enti-
ties. All financial information presented in EUR has been rounded
to the nearest thousand
.
2.4
Use of Estimates and Judgments
The preparation of the consolidated financial statements in con-
formity with EU IFRSs requires management to make judgements,
estimates and assumptions that affect the application of accounting
policies and the reported amounts of assets, liabilities, income and
expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing
basis. Revisions to accounting estimates are recognized in the pe-
riod in which the estimates are revised and in any future periods
affected.
Information about assumptions and estimation uncertainties that
have a significant risk of resulting in a material adjustment within
the next financial year are included in the following notes or below:
►
Note 5.1 – Key assumptions used in discounted cash
flow projections related to the valuation of the photovol-
taic power plants
►
Note 2.4.1. – Professional judgement used in assess-
ment of control of investments as a basis for consolida-
tion
►
Note 2.4.2. – Recognition of deferred tax asset
►
Note 2.4.3. – Recognition of revenues from construc-
tions contracts
Photon Energy N.V.
Financial Section
Annual Report 2022
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2022
87
►
Note 2.4.4. – ECL measurement
►
Note 2.4.5 – Key assumptions used in measurement of
fair value of other financial investments
►
Note 2.4.6.- Impairment of goodwill
►
Note 2.4.7.- Initial recognition of intangible assets
►
Note 2.4.8.- Useful economic life of tangible and intangi-
ble assets and right of use
►
Note 2.4.9.- Business combination
Other factors, such as climate-related risks, do not have significant
impact on Group’s operations.and do not lead to a significant risk
of material adjustments and therefor are not considered to be sig-
nificant judgements. The power plants are not affected by global
warming itself. Potential increase of damages by thundersorms are
covered by insurance, which cost is minor. Due to the geographical
diversification of the power plants there is no risk that a material
part of the portfolio could be damaged at the same time.
2.4.1
Consolidation of Special Purpose Entities
The Group includes also special purpose entities (SPEs) where it
does not have any direct or indirect shareholdings. These SPEs
are consolidated if, based on an evaluation of the substance of its
relationship with the Group and the SPE’s risks and rewards, the
Group concludes that it controls the SPE. SPEs controlled by the
Group were established under terms that impose strict limitations
on the decision-making powers of the SPEs’ management and that
result in the Group receiving the majority of the benefits related to
the SPEs’ operations and net assets, being exposed to the majority
of risks incident to the SPEs’ activities and retaining the majority of
the residual or ownership risks related to the SPEs or their assets.
Based on new contractual agreements, the Company has the right
to apply a call option for purchase of a 100% share in the RL SPVs
in case of full repayment of external loans, security loans, and all
the other financial liabilities of PENV towards RL and the Financing
bank, plus payment of the future purchase price for the transfer of
share in the SPEs. On December 2021 the Company has repaid
all outstanding financial liabilities towards RL and as of 17 January
2022 the Group has exercised its call options. See the list of SPEs
in note 40.
2.4.2
Recognition of Deferred Tax Asset
The recognised deferred tax assets represent income taxes recov-
erable through future deductions from taxable profits and are rec-
orded in the consolidated statement of financial position. Deferred
income tax assets are recorded to the extent that realisation of the
related tax benefit is probable. This includes temporary difference
expected to reverse in the future and the availability of sufficient
future taxable profit against which the deductions can be utilised.
The future taxable profits and the amount of tax benefits that are
probable in the future are based on the medium-term business plan
prepared by management and extrapolated results thereafter. The
business plan is based on management expectations that are be-
lieved to be reasonable under the circumstances. More information
relating to not-recognised deferred tax assets are presented in note
24.
2.4.3
Recognition of Revenues from Contracts with
Customers
Revenues from contracts are recognised for engineering, procure-
ment, and construction (EPC) contracts to external customers. The
management estimates progress towards complete satisfaction of
that performance obligation. The stage of completion is measured
by reference to the contract costs incurred up to the reporting date
as a percentage of total estimated costs for each contract. When
the outcome of a construction contract cannot be estimated relia-
bly, contract revenue is recognized only to the extent of contract
costs incurred that are likely to be recoverable. The Group regularly
reviews and validates the methods that are used for the progress
estimation.
2.4.4
ECL Measurement
Measurement of ECLs is a significant estimate that involves deter-
mination methodology, models and data inputs. Details of ECL
measurement methodology are disclosed in note 25. The Group
regularly reviews and validates the models and inputs to the mod-
els to reduce any differences between expected credit loss esti-
mates and actual credit loss experience
.
2.4.5
Key Assumptions Used in Measurement of
Fair Value of Other Financial Investments
Other financial investments are stated at its fair value based on
valuation models prepared by management. These models and the
assumptions underlying them are regularly reviewed by the man-
agement.
Management considers that the valuation of its other fi-
nancial investment is currently subject to an increased degree of
judgement and an increased likelihood that actual proceeds on a
sale may differ from the carrying value.
For the investment in Valuetech,the profit share
of the equity value
of the participations in ValueTechs is considered as of the reporting
date with deduct a 30% transaction discount (covering cost and
price discounts) from this value.
Other financial investments include primarily ordinary and prefer-
ence shares and related share options held (see also note 23).
The
principal assumptions underlying the estimation of the fair value are
following:
►
Market price of the shares
►
Probability of the realisation of the share options granted
and expected market price of the shares to be purchased
at the realisation of the share options
►
Discount rate reflecting required return on investment on
this type of the Group’s investments
These valuations are regularly compared to actual market data and
most recent actual similar transactions made on the relevant mar-
ket.
2.4.6
Impairment of Goodwill
Goodwill is reviewed at least annually for impairment. Any impair-
ment loss is recognised as an expense immediately and is not sub-
sequently reversed. For the purpose of impairment testing,
goodwill is allocated to groups of individual Cash-Generating Units
(CGUs) expected to benefit from the combination. If the recovera-
ble amount of the CGU is less than the carrying amount of goodwill
allocated to it, the resulting impairment loss is applied first to the
allocated goodwill and then to the other assets on a pro-rata basis
of the carrying amount of each asset. Reversals of impairment
losses on goodwill are not permitted
.
2.4.7
Initial Recognition of Intangible Assets
Intangible assets measured in fair value are recognized in the value
calculated based on the discounted cash-flow model and will
be
regularly amortized in line with the utilization of the underlying con-
tracts during the period of 2023-2027.
Photon Energy N.V.
Financial Section
Annual Report 2022
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2022
88
2.4.8.
Useful Economic Life of Tangible and Intagi-
ble Assets and Right of Use
Useful economic life of the intangible assets is determined in line
with the underlying contracts, in case of the demand response con-
tracts, it is a 5 years period for 2023-2027.
Right of use economic life is determined to be in line with the period
of the contract signed for the lease of an underlying asset. Useful
economic life of the tangible asset is usually defined for the period
of the future estimated cash-flows, usually up to 25-30 years in
case of the photovoltaic powerplants.
2.4.9.
Business Combination
Estimates relating to the calculation of fair values of acquired as-
sets, liabilities and contingent liabilities are required within the con-
text of business combinations. Where intangible assets are
identified, estimates are necessary for the determination of fair val-
ues by means of discounted cash flows, including the duration,
amount of future cash flows, and discount rate. When making esti-
mates in the context of purchase price allocations on major acqui-
sitions, the Group does not expect changes in these fair value
estimates to have a significant impact on the recognised assets
and liabilities over the remaining measurement period.
3.
Application of New and Revised EU IFRSs
3.1
New and Revised EU IFRSs Affecting
Amounts Reported in the Current Year
(and/or Prior Years)
Proceeds before intended use, Onerous contracts –
cost of fulfilling a contract, Reference to the Concep-
tual Framework – narrow scope amendments to IAS
16, IAS 37 and IFRS 3, and Annual Improvements to
IFRSs 2018-2020 – amendments to IFRS 1, IFRS 9,
IFRS 16 and IAS 41 (issued on 14 May 2020 and effec-
tive for annual periods beginning on or after 1 January
2022).
The amendments address issues that arise from the implementa-
tion of the reforms, including the replacement of one benchmark
with an alternative one. There are no impact on the Group’s con-
solidated financial statements and no impacts are expected.
3.2
New Accounting Pronouncements
Certain new standards and interpretations have been issued that
are mandatory for the annual periods beginning on or after 1 Jan-
uary 2023 or later, and which the Group has not early adopted.
Deferred tax related to assets and liabilities arising
from a single transaction – Amendments to IAS 12 (is-
sued on 7 May 2021 and effective for annual periods
beginning on or after 1 January 2023).
The amendments to IAS 12 specify how to account for deferred tax
on transactions such as leases and decommissioning obligations.
In specified circumstances, entities are exempt from recognising
deferred tax when they recognise assets or liabilities for the first
time. Previously, there had been some uncertainty about whether
the exemption applied to transactions such as leases and decom-
missioning obligations – transactions for which both an asset and
a liability are recognised. The amendments clarify that the exemp-
tion does not apply and that entities are required to recognise de-
ferred
tax
on
such
transactions.
The amendments require
companies to recognise deferred tax on transactions that, on initial
recognition, give rise to equal amounts of taxable and deductible
temporary differences.
The Group is currently assessing the im-
pact of the amendments on its consolidated financial statements
and no significant impacts are expected.
Classification of liabilities as current or non-current –
Amendments to IAS 1 (issued on 23 January 2020 and
effective for annual periods beginning on or after 1
January 2022).
These narrow scope amendments clarify that liabilities are classi-
fied as either current or non-current, depending on the rights that
exist at the end of the reporting period.
The Group is currently as-
sessing the impact of the amendments on its consolidated financial
statements and no impacts are expected.
Classification of liabilities as current or non-current,
deferral of effective date – Amendments to IAS 1 (is-
sued on 15 July 2020 and effective for annual periods
beginning on or after 1 January 2023).
The amendment to IAS 1 on classification of liabilities as current or
non-current was issued in January 2020 with an original effective
date 1 January 2022. However, in response to the Covid-19 pan-
demic, the effective date was deferred by one year to provide com-
panies with more time to implement classification changes
resulting from the amended guidance.
The Group is currently as-
sessing the impact of the amendments on its consolidated financial
statements and no impacts are expected.
Amendments to IAS 8: Definition of Accounting Esti-
mates (issued on 12 February 2021 and effective for
annual periods beginning on or after 1 January 2023).
The amendment to IAS 8 clarified how companies should distin-
guish changes in accounting policies from changes in accounting
estimates.
The Group is currently assessing the impact of the
amendments on its consolidated financial statements.
Amendments to IAS 1 and IFRS Practice Statement 2:
Disclosure of Accounting policies (issued on 12 Feb-
ruary 2021 and effective for annual periods beginning
on or after 1 January 2023).
IAS 1 was amended to require companies to disclose their material
accounting policy information rather than their significant account-
ing policies. The amendment provided the definition of material ac-
counting policy information. The amendment also clarified that
accounting policy information is expected to be material if, without
it, the users of the financial statements would be unable to under-
stand other material information in the financial statements.
The
amendment provided illustrative examples of accounting policy in-
formation that is likely to be considered material to the entity’s fi-
nancial statements.
Further, the amendment to IAS 1 clarified that
immaterial accounting policy information need not be disclosed.
However, if it is disclosed, it should not obscure material
Photon Energy N.V.
Financial Section
Annual Report 2022
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2022
89
accounting policy information.
To support this amendment, IFRS
Practice Statement 2, ‘Making Materiality Judgements’ was also
amended to provide guidance on how to apply the concept of ma-
teriality to accounting policy disclosures.The Group is currently as-
sessing the impact of the amendments on its financial statements.
IFRS 17 “Insurance Contracts” (issued on 18 May
2017 and effective for annual periods beginning on or
after 1 January 2023).
IFRS 17 replaces IFRS 4, which has given companies dispensation
to carry on accounting for insurance contracts using existing prac-
tices. As a consequence,
it was difficult for investors to compare
and contrast the financial performance of otherwise similar insur-
ance companies. IFRS 17 is a single principle-based standard to
account for all types of insurance contracts, including reinsurance
contracts that an insurer holds. The standard requires recognition
and measurement of groups of insurance contracts at: (i) a risk-
adjusted present value of the future cash flows (the fulfilment cash
flows) that incorporates all of the available information about the
fulfilment cash flows in a way that is consistent with observable
market information; plus (if this value is a liability) or minus (if this
value is an asset) (ii) an amount representing the unearned profit
in the group of contracts (the contractual service margin). Insurers
will be recognising the profit from a group of insurance contracts
over the period they provide insurance coverage, and as they are
released from risk. If a group of contracts is or becomes loss-mak-
ing, an entity will be recognising the loss immediately. The Group
is currently assessing the impact of the amendments on its consol-
idated financial statements.
Amendments to IFRS 17 and an amendment to IFRS 4
(issued on 25 June 2020 and effective for annual peri-
ods beginning on or after 1 January 2023).
The amendments include a number of clarifications intended to
ease implementation of IFRS 17, simplify some requirements of the
standard and transition. The amendments relate to eight areas of
IFRS 17, and they are not intended to change the fundamental prin-
ciples of the standard.
The Group is currently assessing the impact
of the amendments on its consolidated financial statements.
New accounting Pronouncements are aligned with the
EU En-
dorsement Status Report of 22.09.2022.
4.
Significant Accounting Policies
The accounting policies set out below have been applied consist-
ently to all periods presented in these consolidated financial state-
ments and have been applied consistently by Group entities.
4.1
Basis of Consolidation
The consolidated financial statements incorporate the financial
statements of the Company and entities (including special purpose
entities) controlled by the Company (its subsidiaries). Control is
achieved when the Company is exposed, or has rights, to variable
returns from its involvement with the subsidiary and has the ability
to affect those returns through its power over the subsidiary.
4.1.1
Business Combinations
The acquisition method of accounting is used to account for all
business combinations, regardless of whether equity instruments
or other assets are acquired. The consideration transferred for the
acquisition of a subsidiary comprises the:
►
fair values of the assets transferred
►
liabilities incurred to the former owners of the acquired
business
►
equity interests issued by the group
►
fair value of any asset or liability resulting from a contingent
consideration arrangement, and
►
fair value of any pre-existing equity interest in the subsidi-
ary.
Identifiable assets acquired and liabilities and contingent liabilities
assumed in a business combination are, with limited exceptions,
measured initially at their fair values at the acquisition date. The
group recognises any non-controlling interest in the acquired entity
on an acquisition-by-acquisition basis either at fair value or at the
non-controlling interest’s proportionate share of the acquired en-
tity’s net identifiable assets.
Acquisition-related costs are expensed as incurred.
The excess of the:
►
consideration transferred
,
►
amount of any non-controlling interest in the acquired en-
tity, and
►
acquisition-date fair value of any previous equity interest in
the acquired entity over the fair value of the net identifiable
assets acquired is recorded as goodwill. If those amounts
are less than the fair value of the net identifiable assets of
the business acquired, the difference is recognised directly
in profit or loss as a bargain purchase. Where settlement
of any part of cash consideration is deferred, the amounts
payable in the future are discounted to their present value
as at the date of exchange. The discount rate used is the
entity’s incremental borrowing rate, being the rate at which
a similar borrowing could be obtained from an independent
financier under comparable terms and conditions. Contin-
gent consideration is classified either as equity or a finan-
cial liability. Amounts classified as a financial liability are
subsequently remeasured to fair value, with changes in fair
value recognised in profit or loss. If the business combina-
tion is achieved in stages, the acquisition date carrying
value of the acquirer’s previously held equity interest in the
acquiree is remeasured to fair value at the acquisition date.
Any gains or losses arising from such remeasurement are
recognised in profit or loss.
4.1.2
Subsidiaries
Subsidiaries are entities controlled by the Company. The financial
statements of subsidiaries are included in the consolidated finan-
cial statements from the date that control commences until the date
that control ceases.
Income and expenses and other comprehensive income of subsid-
iaries acquired or disposed of during the year are included in the
consolidated statement of comprehensive income from the effec-
tive date of acquisition and up to the effective date of disposal, as
appropriate. Total comprehensive income of subsidiaries is at-
tributed to the owners of the Company and to the non-controlling
interests even if doing so causes the non-controlling interests to
have a deficit balance
.
Photon Energy N.V.
Financial Section
Annual Report 2022
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2022
90
When necessary, adjustments are made to the financial state-
ments of subsidiaries to bring their accounting policies into line with
Group accounting policies
.
4.1.3
Loss of Control
Upon the loss of control, the Group derecognizes the assets and
liabilities of the subsidiary, any non-controlling interests and the
other components of equity related to the subsidiary. Any surplus
or deficit arising from the loss of control is recognized in profit or
loss. If the Group retains any interest in the previous subsidiary,
then such interest is measured at fair value at the date that control
is lost. Subsequently it is accounted for as an equity-accounted in-
vestee or as other financial asset depending on the level of influ-
ence retained.
4.1.4
Investments in Associates and Jointly Con-
trolled Entities (Equity-accounted Investees)
Associates are those entities in which the Group has significant in-
fluence, but not control, over the financial and operating policies.
Significant influence is presumed to exist when the Group holds 20
percent or more of the voting power of another entity. Joint ven-
tures are arrangements that the Company controls jointly with one
or more other investors, and over which the Company has rights to
a share of the arrangements net assets rather than direct rights to
underlying assets and obligations for underlying liabilities.
Investments in associates and jointly controlled entities are ac-
counted for using the equity method (equity-accounted investees)
and are recognized initially at cost. The cost of the investment in-
cludes transaction costs.
The consolidated financial statements include the Group’s share of
the profit or loss and other comprehensive income, after adjust-
ments to align the accounting policies with those of the Group, from
the date that significant influence or joint control commences until
the date that significant influence or joint control ceases.
Share of profit equity-accounted investments (net of tax) is pre-
sented in Result from operating activities.
When the Group’s share of losses exceeds its interest in an equity-
accounted investee, the carrying amount of that interest, including
any long-term investments, is reduced to zero, and the recognition
of further losses is discontinued except to the extent that the Group
has an obligation or has made payments on behalf of the investee
.
4.1.5
Transactions Eliminated on Consolidation
Regarding subsidiaries all intra-group transactions, balances, in-
come and expenses are eliminated in full on consolidation.
Regarding equity-accounted investees (see note
4.1.4
) part of a
margin on sales to these entities is eliminated. This part is calcu-
lated as a percentage of margins equal to the percentage of the
entity's shares owned by the Group.
4.2
Foreign Currency
4.2.1
Foreign Currency Transactions
Transactions in foreign currencies are translated to the respective
functional currencies of Group entities at exchange rates at the
dates of the transactions. Monetary assets and liabilities denomi-
nated in foreign currencies at the reporting date are translated to
the functional currency at the exchange rate at that date. The for-
eign currency gain or loss on monetary items is the difference be-
tween amortised cost in the functional currency at the beginning of
the year, adjusted for effective interest and payments during the
year, and the amortised cost in foreign currency translated at the
exchange rate at the end of the year
.
Non-monetary assets and liabilities denominated in foreign curren-
cies that are measured at fair value are retranslated to the func-
tional currency at the exchange rate at the date that the fair value
was determined. Non-monetary items in a foreign currency that are
measured in terms of historical cost are translated using the ex-
change rate at the date of the transaction. Foreign currency differ-
ences arising on retranslation are recognized in profit or loss.
4.2.2
Foreign Operations
The assets and liabilities of foreign operations (those in the Czech
Republic, Switzerland, Hungary, Romania, Poland and Australia as
of 31 December 2022 and 2021) are translated into Euro at ex-
change rates at the reporting date. The income and expenses of
foreign operations are translated into Euro at exchange rates at the
dates of the transactions.
Loans between the Group entities and related foreign exchange
gains or losses are eliminated upon consolidation. However, where
the loan is between the Group entities that have different functional
currencies, the foreign exchange gain or loss cannot be eliminated
in full and is recognised in the consolidated profit or loss, unless
the loan is not expected to be settled in the foreseeable future and
thus forms part of the net investment in foreign operation. In such
a case, the foreign exchange gain or loss is recognised in other
comprehensive income.
4.2.3
Cash and Cash Equivalents/Liquid Assets
Cash and cash equivalents include cash in hand, deposits held at
call with banks, and other short-term highly liquid investments with
original maturities of three months or less. Cash and cash equiva-
lents are carried at amortised cost (AC) because: (i) they are held
for collection of contractual cash flows and those cash flows repre-
sent SPPI, and (ii) they are not designated at fair value through
profit or loss (FVTPL).
Restricted balances are disclosed in the notes to cash and cash
equivalents (note 28) for the purposes of the consolidated state-
ment of cash flows. The debt service and project reserve accounts
are excluded from cash and cash equivalents as they serve as col-
lateral for the lending banks and can only be used with the approval
of the lending banks.
Gold ingots purchased by the Group, are initially recognised at
costs and subsequently measured at fair value through profit or
loss.
4.2.4
Borrowing Costs
Borrowing costs directly attributable to the acquisition, construction
or production of qualifying assets, which are assets that necessarily
take a substantial period of time to get ready for their intended use
or sale, are added to the cost of those assets, until such time as
the assets are substantially ready for their intended use or sale.
Investment income earned on the temporary investment of specific
borrowings pending their expenditure on qualifying assets is de-
ducted from the borrowing costs eligible for capitalisation.
All other borrowing costs are recognized in profit or loss in the pe-
riod in which they are incurred.
4.3
Financial Instruments
Financial instruments are only used to mitigate risks and are not
used for trading purposes.
Photon Energy N.V.
Financial Section
Annual Report 2022
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2022
91
4.3.1
Non-derivative Financial Assets
Recognition and Derecognition
Financial assets and financial liabilities are recognised when the
Group becomes a party to the contractual provisions of the financial
instrument. Regular way purchases and sales of financial assets
are accounted for at trade date.
Financial assets are derecognised when the contractual rights to
the cash flows from the financial asset expire, or when the financial
asset and substantially all the risks and rewards are transferred. A
financial liability is derecognised when it is extinguished, dis-
charged, cancelled or expires.
Classification and Initial Measurement of Financial As-
sets
Except for those trade receivables that do not contain a significant
financing component and are measured at the transaction price in
accordance with IFRS 15, all financial assets are initially measured
at fair value adjusted for transaction costs (where applicable).
Financial assets, other than those designated and effective as
hedging instruments, are classified into the following categories:
►
amortised cost
►
fair value through profit or loss (FVTPL)
►
fair value through other comprehensive income (FVOCI).
All income and expenses relating to financial assets that are rec-
ognised in profit or loss are presented within finance costs, finance
income or other financial items, except for impairment of trade re-
ceivables which is presented within Impairment charges.
Financial Assets at Amortised Cost
Financial assets are measured at amortised cost if the assets meet
the following conditions (and are not designated as FVTPL nor
FVOCI):
►
they are held within a business model whose objective is
to hold the financial assets and collect its contractual cash
flows
►
the contractual terms of the financial assets give rise to
cash flows that are solely payments of principal and inter-
est on the principal amount outstanding
After initial recognition, these are measured at amortised cost us-
ing the effective interest method.
Financial Assets at Fair Value Through Profit or Loss
(FVTPL) or/and at Fair Value Through Other Compre-
hensive Income (“FVOCI”)
Financial assets that are held within a different business model
other than ‘hold to collect’ or ‘hold to collect and sell’ are catego-
rised as FVOCI. Further, irrespective of business model financial
assets whose contractual cash flows are not solely payments of
principal and interest are accounted for at FVTPL. All derivative
financial instruments fall into this category, except for those desig-
nated and effective as hedging instruments, for which the hedge
accounting requirements apply.
Financial Assets Impairment – Credit Loss Allowance
for Expected Credit Loss (ECL)
Trade and other receivables, loans issued and contract assets are
presented in the consolidated statement of financial position net of
the allowance for ECL
.
The Group applies simplified approach for impairment of trade re-
ceivables and contract assets.
Financial Assets – Write-off
Financial assets are written-off, in whole or in part, when the Group
exhausted all practical recovery efforts and has concluded that
there is no reasonable expectation of recovery. The write-off rep-
resents a derecognition event.
4.3.2
Non-derivative Financial Liabilities
Classification and Initial Measurement of Financial Li-
abilities
The Group’s financial liabilities include borrowings, trade and other
payables and derivative financial instruments. Financial liabilities
are initially measured at fair value, and, where applicable, adjusted
for transaction costs unless the Group designated a financial liabil-
ity at fair value through profit or loss. Subsequently, financial liabil-
ities are measured at amortised cost using the effective interest
method except for derivatives and financial liabilities designated at
FVTPL, which are carried subsequently at fair value with gains or
losses recognised in profit or loss (other than derivative financial
instruments that are designated and effective as hedging instru-
ments).
All interest-related charges and, if applicable, changes in an instru-
ment’s fair value that are reported in profit or loss are included
within finance costs or finance income.
Financial Liabilities – Derecognition
Financial liabilities are derecognised when they are extinguished
(i.e. when the obligation specified in the contract is discharged,
cancelled or expires).
An exchange between the Group and its original lenders of debt
instruments with substantially different terms, as well as substantial
modifications of the terms and conditions of existing financial liabil-
ities, are accounted for as an extinguishment of the original finan-
cial liability and the recognition of a new financial liability. The terms
are substantially different if the discounted present value of the
cash flows under the new terms, including any fees paid net of any
fees received and discounted using the original effective interest
rate, is at least 10% different from the discounted present value of
the remaining cash flows of the original financial liability. If the ex-
change or modification is not accounted for as an extinguishment,
any costs or fees incurred adjust the carrying amount of the liability
and are amortised over the remaining term of the modified liability.
Modifications of liabilities that do not result in extinguishment are
accounted for as a change in estimate using a cumulative catch up
method, with any gain or loss recognised in profit or loss, unless
the economic substance of the difference in carrying values is at-
tributed to a capital transaction with owners.
4.3.3
Derivative Financial Instruments
Derivative financial instruments, including interest rates swaps, are
carried at their fair value. All derivative instruments are carried as
assets when fair value is positive and as liabilities when fair value
is negative. Changes in the fair value of derivatives that do not
meet the requirements for application of hedge accounting are in-
cluded in profit or loss for the year.
4.3.4
Cash Flow Hedges that Qualify for Hedge Ac-
counting
The Group decided to apply hedge accounting in accordance with
IFRS 9. The Group designates certain derivatives prospectively as
either a hedge of the fair value of a recognised asset or liability (fair
Photon Energy N.V.
Financial Section
Annual Report 2022
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2022
92
value hedge), or a hedge of future cash flows attributable to a rec-
ognised asset or liability or a forecasted transaction (cash-flow
hedge). Hedge accounting is used for derivatives designated in this
way, provided that certain criteria, including defining the hedging
strategy and hedging relationship before hedge accounting is ap-
plied and ongoing documentation of the actual and expected effec-
tiveness of the hedge, are met.
Changes in the fair value of derivatives that qualify as effective fair-
value hedges are recorded in the income statement, along with the
corresponding change in fair value of the hedged asset or liability
that is attributable to that specific hedged risk.
Changes in the fair value of derivatives that qualify as effective
cash-flow hedges are recorded as revaluation reserve from assets
and liabilities in equity and are transferred to the income statement
and classified as an income or expense in the period during which
the hedged item affects the income statement.
4.3.5
Share Capital
Ordinary Shares
Ordinary shares are classified as equity. Consideration received
above the nominal value of the ordinary shares is classified in eq-
uity as Share premium. Incremental costs directly attributable to
the issue of ordinary shares are recognized as a deduction from
equity, net of any tax effects
.
Treasury Shares
Where the Company or its subsidiaries purchase the Company’s
equity instruments, the consideration paid, including any directly
attributable incremental costs, net of income taxes, is deducted
from the equity attributable to the Company’s owners until the eq-
uity instruments are reissued, disposed of or cancelled. Where
such shares are subsequently sold or reissued, any consideration
received, net of any directly attributable incremental transaction
costs and the related income tax effects, is included in equity at-
tributable to the Company’s owners.
4.4
Property, Plant and Equipment
4.4.1
Recognition and Measurement
Photovoltaic power plants are stated in the consolidated statement
of financial position at their revalued amounts, being the fair value
at the date of revaluation, less any subsequent accumulated de-
preciation and subsequent accumulated impairment losses. Reval-
uations are performed at sufficient regularity so that the carrying
amounts do not differ materially from those that would be deter-
mined using fair values at the end of each reporting period. The
need for revaluations is assessed every quarter.
For fair value determination see note 5.1.
Any revaluation surplus arising on the revaluation of such photo-
voltaic power plant is recognized in other comprehensive income
and accumulated in equity, except to the extent that the surplus
reverses a revaluation deficit on the same asset previously recog-
nized in profit or loss. Any deficit on the revaluation of such photo-
voltaic power plants is recognized in profit or loss except to the
extent that it reserves a previous revaluation surplus on the same
asset, in which case the debit to that extent is recognized in other
comprehensive income.
Photovoltaic power plants, which the Company consolidates, in the
course of construction are carried at cost, less any recognized im-
pairment loss. The cost of self-constructed assets includes the cost
of materials and direct labor plus any other costs directly attributa-
ble to bringing the assets to a working condition for their intended
use and capitalized borrowing costs. Such properties are reported
as Property, plant, equipment - Assets in progress and are classi-
fied to Property, plant and equipment - Photovoltaic power plants
when completed and ready for use. These assets are completed
and ready for use when the power plant is connected to the elec-
tricity network and all technical parameters necessary for electricity
production are completed. Depreciation of these assets, on the
same basis as other property assets, commences when the assets
are ready for their intended use
.
Additional costs capitalized in the value of the asset are included
in the regular review of power plants value as done on quarterly
basis.
The costs of maintenance, repairs, renewals or replacements
which do not extend productive life are charged to operations as
incurred. The costs of replacements and improvements which ex-
tend productive life are capitalized. The cost of replacing part of an
item of property and equipment is recognized in the carrying
amount of the item if it is probable that the future economic benefits
embodied within the part will flow to the Company and its cost can
be measured reliably.
Included in the property plant and equipment are non separable
intangible assets mainly relating to the rights to build and operate
photovoltaic power plants in a specific country. Because the items
are non separable, the rights are included in property, plant and
equipment.
Fixtures and equipment are stated at cost less accumulated depre-
ciation and accumulated impairment losses. Cost includes ex-
penditure that is directly attributable to the acquisition of the asset.
The gain or loss on disposal of an item of fixtures and equipment
is determined by comparing the proceeds from disposal with the
carrying amount of the property, plant and equipment, and is rec-
ognized net within other income/other expenses in profit or loss.
4.4.2
Depreciation
Depreciation is recognized so as to write off the costs or revalued
amount of property, plant and equipment (other than land and prop-
erties under construction) less their residual values over their use-
ful lives, using the straight-line method. The estimated useful lives,
residual values and depreciation methods are reviewed at the end
of each reporting period, with the effect of any changes in estimate
accounted for on a prospective basis.
Depreciation of revalued photovoltaic power plants is recognized
in profit or loss. Every quarter the amount equal to the difference
between depreciation based on the revalued carrying amount of
photovoltaic power plants and depreciation based on asset’s origi-
nal cost is transferred directly to retained earnings. On the subse-
quent sale or retirement of a revalued property, the attributable
revaluation surplus remaining in the properties revaluation reserve
is transferred directly to retained earnings.
Land is not depreciated.
The estimated useful lives for the current and comparative years
are as follows (based on the professional judgement combining the
Feed in Tariff period and useful estimated live of the components
and technology used in the power plants):
►
Photovoltaic power plants
20-30 years
►
Fixtures and equipment
3–10 years
4.5
Right-of-use Assets
The group leases land, various offices and vehicles. Contracts may
contain both lease and non-lease components. The group allo-
cates the consideration in the contract to the lease and non-lease
component based on their relative stand-alone prices.
Photon Energy N.V.
Financial Section
Annual Report 2022
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2022
93
Assets arising from a lease are initially measured on a present
value basis. Right of use assets are measured at cost comprising
the following:
►
the amount of the initial measurement of lease liability,
►
any lease payments made at or before the commencement
date less any lease incentives received,
►
any initial direct costs, and
►
cost to restore the asset to the conditions required by lease
agreements.
Right-of-use assets are generally depreciated over the shorter of
the asset's useful life and the lease term on a straight-line basis. If
the Group is reasonably certain to exercise a purchase option, the
right-of-use asset is depreciated over the underlying assets’ useful
lives. Depreciation on the items of the right-of-use assets is calcu-
lated using the straight-line method over their estimated useful lives
as follows:
►
Lands and easements
lease term, 15-35 years
►
Cars
lease term, 5 years
4.6
Intangible Assets
The Group’s intangible assets have definite useful lives and primar-
ily include capitalised computer software and patents.
Development costs that are directly associated with identifiable and
unique software or patents controlled by the Group are recorded
as intangible assets if an inflow of incremental economic benefits
exceeding costs is probable. All other costs associated with com-
puter software, e.g. its maintenance, are expensed when incurred.
Intangible assets are amortised using the straight-line method over
their useful lives:
►
Capitalised SW development costs
3 years
If impaired, the carrying amount of intangible assets is written down
to the higher of value in use and fair value less costs of disposal.
Separately acquired trademarks and licences are shown at histori-
cal cost. Trademarks, licences and customer contracts acquired in
a business combination are recognised at fair value at the acquisi-
tion date. They have a finite useful life of 5 years and are subse-
quently carried at cost less accumulated amortisation and
impairment losses.
4.6.1
Goodwill
Goodwill is measured initially as described under “Consolidated fi-
nancial statements “ in note 4.1.1. Goodwill is not amortised but it
is tested for impairment annually. Goodwill is allocated to the cash-
generating units, or groups of cash-generating units, that are ex-
pected to benefit from the synergies of the business combination.
Such units or groups of units represent the lowest level at which
the Group monitors goodwill and are not larger than an operating
segment.
The Group tests goodwill for impairment at least annually and
whenever there are indications that goodwill may be impaired. The
carrying value of the cash-generating unit containing goodwill is
compared to the recoverable amount, which is the higher of value
in use and the fair value less costs of disposal. Any impairment is
recognised immediately as an expense and is not subsequently re-
versed.
Gains or losses on disposal of an operation within a cash generat-
ing unit to which goodwill has been allocated include the carrying
amount of goodwill associated with the disposed operation, gener-
ally measured on the basis of the relative values of the disposed
operation and the portion of the cash-generating unit which is re-
tained.
4.7
Impairment
Other assets are tested for impairment whenever events or
changes in circumstances indicate that the carrying amount may
not be recoverable. An impairment loss is recognised for the
amount by which the asset’s carrying amount exceeds its recover-
able amount. The recoverable amount is the higher of an asset’s
fair value less costs of disposal and value in use. For the purposes
of assessing impairment, assets are grouped at the lowest levels
for which there are separately identifiable cash inflows which are
largely independent of the cash inflows from other assets or groups
of assets (cash-generating units). Non-financial assets other than
goodwill that suffered impairment are reviewed for possible rever-
sal of the impairment at the end of each reporting period
.
4.8
Inventories
Inventories are measured at the lower of cost and net realizable
value. The cost of inventories is based on the weighted average
principle, and includes expenditure incurred in acquiring the inven-
tories, production or conversion costs and other costs incurred in
bringing them to their existing location and condition.
Net realisable value is the estimated selling price in the ordinary
course of business, less the estimated costs of completion and sell-
ing expenses.
4.9
Provisions
A provision is recognized if, as a result of a past event, the Group
has a present legal or constructive obligation that can be estimated
reliably, and it is probable that an outflow of economic benefits will
be required to settle the obligation. Provisions are determined by
discounting the expected future cash flows at a pre-tax rate that
reflects current market assessments of the time value of money
and the risks specific to the liability.
4.9.1
Warranties
A provision for warranties is recognized when the underlying ser-
vices are sold, i.e. when the construction contracts are finished.
The provision is based on historical warranty data and a weighting
of all possible outcomes against their associated probabilities
.
4.10
Lease Liabilities
Liabilities arising from a lease are initially measured on a present
value basis. Lease liabilities include the net present value of fixed
payments (including in-substance fixed payments), less any lease
incentives receivable. There are no variable payments that are
based on an index or a rate, no amounts expected to be payable
by the Group under residual value guarantees nor purchase option
for which the Group is reasonably certain to exercise that option.
Extension and termination options are included in some property
leases across the Group. These terms are used to maximise oper-
ational flexibility in terms of managing the assets used in the
Group’s operations. The majority of extension and termination op-
tions held are exercisable only by the Group and not by the respec-
tive lessor. Extension options (or period after termination options)
are only included in the lease term if the lease is reasonably certain
to be extended (or not terminated). Lease payments to be made
under reasonably certain extension options are also included in the
measurement of the liability.
The lease payments are discounted using the interest rate implicit
in the lease. If that rate cannot be readily determined, which is gen-
erally the case for leases of the Group, the Group’s incremental
Photon Energy N.V.
Financial Section
Annual Report 2022
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2022
94
borrowing rate is used, being the rate that the Group would have
to pay to borrow the funds necessary to obtain an asset of similar
value to the right-of-use asset in a similar economic environment
with similar terms, collateral and conditions.
To determine the incremental borrowing rate, the Group:
►
where possible, uses recent third-party financing re-
ceived by the individual lessee as a starting point, ad-
justed to reflect changes in financing conditions since
third party financing was received,
►
uses a build-up approach that starts with a risk-free in-
terest rate adjusted for credit risk, and
►
makes adjustments specific to the lease, e.g. term, coun-
try, currency and collateral.
Lease payments are allocated between principal and finance costs.
The finance costs are charged to profit or loss over the lease period
so as to produce a constant periodic rate of interest on the remain-
ing balance of the liability for each period.
Payments associated with short-term leases of equipment and ve-
hicles and all leases of low-value assets are recognised on a
straight-line basis as an expense in profit or loss. Short-term leases
are leases with a lease term of 12 months or less. Low-value assets
comprise IT equipment and small items of office furniture with value
of EUR 4 thousand or less
.
4.11
Revenue Recognition
Revenue is income arising in the course of the Group’s ordinary
activities. The Group recognises revenues from the following activ-
ities:
►
Revenue from electricity generation
►
Revenue from engineering, procurement and construc-
tion (EPC)
►
Revenue from sale of goods (solar panels, inverters and
related technologies)
►
Revenue from sale of services (e.g. maintenance, tech-
nical-administrative; installation)
Revenue is recognised in the amount of transaction price. Trans-
action price is the amount of consideration to which the Group ex-
pects to be entitled in exchange for transferring control over
promised goods or services to a customer, excluding the amounts
collected on behalf of third parties.
Revenue is recognised net of discounts, value added taxes, export
duties and similar mandatory payment.
4.11.1
Revenue from Electricity Generation
Revenues from sale of electricity are coming from the sale of elec-
tricity produced and sold to the local electricity distributor. Invoices
are issued/ revenues are recognised only when the electricity is
delivered to the distribution net in the volume reviewed and ac-
cepted by the distributors. No element of financing is deemed pre-
sent as the sales are made with credit terms of 30 days, which is
consistent with market practice.
Government grants for power generation intended as a compensa-
tion for the price of power, are recognised under revenue from elec-
tricity generation.
Solar levy of 10% applied to electricity produced in the Czech Re-
public is presented separately in costs.
4.11.2
Revenue from Sale of Goods
Sales are recognised when the control over the goods has trans-
ferred to the customer. This transfer of control is clearly defined in
the contractual conditions. Group as a supplier does not provide in
major of the cases any other separate performance as part of the
delivery. In minor cases, the storage services, transportation, or ar-
rangement of customs duty is provided and invoiced individually,
however this is provided only on the individual basis and represents
an immaterial part of the overall revenues within the sale of tech-
nology division.
No element of financing is deemed present as the sales are made
with credit terms of 30-60 days, which is consistent with market
practice. In most cases, the Company requires advance payments
(partial or 100%) for the sales of goods. Advances received are
recognised as contract liability.
If the Group provides any additional services to the customer after
contract over goods has passed, revenues from such services is
considered to be separate performance obligation and is recog-
nised over the time the service is rendered.
4.11.3
Revenues from Sale of Services
Revenues from sale of services (e.g. maintenance, technical-ad-
ministrative; installation) are recognised on regular and recurring
basis for a fixed fee agreed in the contract, additionally to this ad-
hoc interventions are invoiced based on the actual usage of the on
call service intervention. In this case, the invoice is issued only on
the basis of the accepted protocol confirming the services were re-
ally provided to the customer and were accepted. Part of this inter-
vention and service provided can be also provision/usage of
miscellaneous material that is at the end part of the total invoice.
However, this is not provided independently without the related ser-
vice so it cannot be considered as a separate performance obliga-
tion. No element of financing is deemed present as the sales are
made with credit terms of 30 days, which is consistent with market
practice.
4.11.4
Revenue from Engineering, Procurement and
Construction (EPC)
Construction services are provided based on engineering, procure-
ment and construction (EPC) contracts either to internal or external
customers. In the contract, milestones for invoicing are clearly de-
fined. The EPC provider commits himself to the construction and
delivery of the power plant with the regular warranty for quality of
the work delivered. No long-term extraordinary guarantees that
could be considered as a separate obligation under IFRS 15 are
provided. EPC services represent one single performance obliga-
tion as EPC services are distinct to a customer and cannot be sep-
arated from each other.
Revenues from EPC are recognised over the time and include the
initial amount agreed in the contract plus any variations in contract
work, claims and incentive payments. In accordance with contract
terms, the Group has an enforceable right to payment for perfor-
mance completed to date.
For each performance obligation satisfied over time, the Group rec-
ognised revenue by measuring the progress towards complete sat-
isfaction of that performance obligation using the input method. The
Group is entitled to invoice the customers when defined milestones
are achieved. The Group recognises contract assets for construc-
tion work delivered. Invoiced amount of contract assets is reclassi-
fied to trade receivable upon its invoicing. In case the payment for
the milestones exceed the amount of costs recognised based on
the input method, the Group recognises a contract liability. No sig-
nificant financing component is deemed in EPC contracts, as the
time period between revenue recognition based on input method
Photon Energy N.V.
Financial Section
Annual Report 2022
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2022
95
and the milestone payment is always shorter that one year, in most
cases with credit terms from 30 to 90 days.
4.12
Finance Income and Financial Expenses
Financial income comprises interest income on loans. Interest in-
come is recognized in profit or loss using the effective interest rate
method.
Financial expenses comprise interest expense on borrowings,
bank account fees and net foreign currency losses. Interest ex-
pense is recognized using the effective interest rate method.
Borrowing costs that are not directly attributable to the acquisition,
construction or production of a qualifying asset are recognized in
profit or loss. Borrowing costs incurred by the Group directly at-
tributable to the construction of power plants is capitalized in the
cost of the related asset until the date of its completion.
Foreign currency gains and losses are reported on a net basis and
recognised in profit and loss.
4.13
Employee Benefits
Wages, salaries, contributions to the state pension and social in-
surance funds in the Czech Republic, Slovakia, Hungary, Poland,
Romania, Netherlands, Switzerland and Australia, paid annual
leave and sick leave, bonuses, and non-monetary benefits (such
as health services and kindergarten services) are accrued in the
year in which the associated services are rendered by the employ-
ees of the Group. Beside the contributions to the statutory defined
contribution schemes, there are no other obligations of the Group
beyond these contributions.
The Group also provides an Employee Share Purchase program to
some of its employees. Under this program, the employees receive
an automatic monthly bonus of 10% to their gross salary and the
difference between after-tax amounts of 100% and 110% of the
base salary is used for the purchase of shares. Employees are not
allowed to sell their shares acquired through the program as long
as they are employees. The 10% bonus to the gross salary as well
as related social and health contribution are recorded and expense
in each respective period.
4.14
Government Grants
Grants from the government are recognised at their fair value
where there is reasonable assurance that the grant will be received
and the Group will comply with all attached conditions.
Government grants relating to costs are deferred and recognised
in profit or loss for the year as other income over the period neces-
sary to match them with the costs that they are intended to com-
pensate.
Compensations from government agencies related to revenue from
fixed feed-in-tariffs, where applicable, are included in Revenue
from electricity generation, as they represent part of the Group’s
core activity clearly linked to the model of PVP revenue from sales
of electricity.
4.15
Income Tax
Income tax expense comprises current and deferred tax. Current
tax and deferred tax is recognized in profit or loss except to the
extent that it relates to a business combination, or items recognized
directly in equity or in other comprehensive income.
Current tax is the expected tax payable or receivable on the taxable
income or loss for the year, using tax rates enacted or substantively
enacted at the reporting date, and any adjustment to tax payable
in respect of previous years.
Deferred tax is recognized in respect of temporary differences be-
tween the carrying amounts of assets and liabilities for financial re-
porting purposes and the amounts used for taxation purposes.
Deferred tax is not recognized for:
►
Temporary differences on the initial recognition of assets
or liabilities in a transaction that is not a business combi-
nation and that affects neither accounting nor taxable profit
or loss;
►
Temporary differences related to investments in subsidiar-
ies and jointly controlled entities to the extent that it is prob-
able that they will not reverse in the foreseeable future; and
►
Taxable temporary differences arising on the initial recog-
nition of goodwill.
A deferred tax liability is recognized for assets revaluation reported
in other comprehensive income and other temporary differences.
Assets revaluation represents the revaluation of photovoltaic
power plants described in note
4.4.1
.
Deferred tax is measured at the tax rates that are expected to be
applied to temporary differences when they reverse, based on the
laws that have been enacted or substantively enacted by the re-
porting date.
Deferred tax assets and liabilities are offset if there is a legally en-
forceable right to offset current tax liabilities and assets, and they
relate to income taxes levied by the same tax authority on the same
taxable entity, or on different tax entities, but they intend to settle
current tax liabilities and assets on a net basis or their tax assets
and liabilities will be realised simultaneously.
A deferred tax asset is recognized for unused tax losses, tax credits
and deductible temporary differences, to the extent that it is proba-
ble that future taxable profits will be available against which they
can be utilised. Deferred tax assets are reviewed at each reporting
date and are reduced to the extent that it is no longer probable that
the related tax benefit will be realised.
4.16
Earnings Per Share
The Group uses ordinary shares only. The Group presents basic
earnings per share and total comprehensive income per share
data.
Basic earnings per share is calculated by dividing the profit or loss
attributable to ordinary shareholders of the Company by the
weighted average number of ordinary shares outstanding during
the year.
Diluted earnings per share are calculated by dividing the profit or
loss attributable to ordinary shareholders of the Company by the
total number of ordinary shares outstanding during the year.
Total comprehensive income per share is calculated by dividing the
total comprehensive income attributable to ordinary shareholders
of the Company by the weighted average number of ordinary
shares outstanding during the year.
Total diluted comprehensive income per share is calculated by di-
viding the total comprehensive by the total number of ordinary
shares outstanding during the year.
4.17
Segment Reporting
An operating segment is a component of the Group that engages
in business activities from which it may earn revenues and incur
expenses, including revenues and expenses that relate to transac-
tions with any of the Group’s other components. All operating seg-
ments’ operating results are reviewed regularly by the Group’s
management and directors to make decisions about resources to
be allocated to the segment and to assess its performance, and for
Photon Energy N.V.
Financial Section
Annual Report 2022
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2022
96
which discrete financial information is available. Reportable seg-
ments whose revenue, result or assets are ten percent or more of
all the segments are reported separately. Reportable segments in-
cluding information on how operating segments are aggregated are
included in note 7.
Segment results that are reported include items directly attributable
to a segment as well as those that can be allocated on a reasona-
ble basis. Unallocated items comprise mainly corporate assets (pri-
marily the Company’s office premises), head office expenses, and
other minor expenses non-allocable to any of the segments
.
Segment capital expenditure is the total cost incurred during the
year to acquire property, plant and equipment, and intangible as-
sets other than goodwill
.
4.18
Changes in Presentation of Financial In-
formation
There were no changes presentation of financial information dur-
ing the year.
5.
Determination of Fair Values
A number of the Group’s accounting policies and disclosures re-
quire the determination of fair value, for both financial and non-fi-
nancial assets and liabilities. Fair values have been determined for
measurement and/or disclosure purposes based on the following
methods. When applicable, further information about the assump-
tions made in determining fair values is disclosed in the notes spe-
cific to that asset or liability.
5.1
Property, Plant and Equipment
The fair value of items of plant, equipment, fixtures and fittings is
based on the market approach, using quoted market prices for sim-
ilar items when available, or the income approach (an internally
generated discounted cash-flow model) if there is no market-based
evidence of the fair value. Otherwise, the depreciated replacement
cost approach will be used, when appropriate. The depreciated re-
placement cost estimates reflect adjustments for physical deterio-
ration as well as functional and economic obsolescence.
For photovoltaic power plants comparable market prices are not
sufficiently available due to a lack of transactions in some markets
and a lack of public available specific data of such transactions.
The market values of power plants significantly vary dependent on
a large number of parameters, which are usually not sufficiently
disclosed. Those parameters are among others the actual feed-in-
tariff and its duration, actual and expected production output, used
technology components, contracted operating cost of the power
plant, financing structure, conditions and financing cost, etc. Most
investors use the income approach also as a basis to determine a
purchase price for a transaction. Based on the aforementioned lack
of reliable and comparable market data, the income approach is
used by the Company as a more relevant method. Under this ap-
proach the fair value of photovoltaic power plants is based on an
internally generated discounted cash flow models, discounted at
weighted average cost of capital. For PVPs the future cash flows
are calculated for the period equaling the estimated useful life (30
years in Australia, 25 years in the Czech Republic, Slovakia and
Hungary) and are based on Feed-in-Tariffs or expected electricity
and certificate prices on the relevant markets and on the expected
after-tax cost of debt and expected cost of equity.
On a quarterly basis, management reviews the expected costs of
debt of individual projects vis-à-vis actual interest cost, financial
market conditions, and interest rate for a 15-year state bond. On a
quarterly basis, management also reviews expected cost of equity
for the period of the cash flow model. The initial valuations are done
as of the date of put in use of an individual power plant, and each
model is periodically reviewed and any potential change in inputs
is considered. As of 31 December 2022 the cash flow projections
are prepared for 25 years in Czech Republic, Slovak Republic and
Hungary, equal to the expected technical and commercial life time
of the projects. Main other inputs used in the models are the fol-
lowing: overall project budget, taxes, interest rates, reserve funds,
feed in tariff or electricity market price assumptions, OPEX, CAPEX
and degradation factor assumption.
The revaluation reserve created, based on the DCF models, is an-
nually released to the retained earnings in the amount equal to the
depreciation calculated from the amount of revaluation (see also
Note 4.4.2 Depreciation).
Since 2014 the Group uses the DCF Equity valuation method which
is based on a Discounted Cash Flow method. This method includes
the future cash flows available to the shareholders/providers of eq-
uity of photovoltaic projects (i.e. after all debt repayments and in-
terests) that are later discounted by respective discount rates.
The valuation of the project keeps in mind the risk profile of future
cash flows and the way the project is financed. The risk profile is
represented by a discount rate (cost of equity levered). Due to ex-
istence of senior project financing the cost of equity calculated by
CAPM (capital asset pricing model) formula is adjusted by Miller-
Modigliani formula to achieve the most precise cost of equity lev-
ered for each project respecting it unique capital structure.
Quarterly discounting is applied that follows the fact that debt re-
payments are happening on quarterly basis. This is effecting the
overall change in financing structure and indirectly effecting cost of
equity levered.
Changes in the Valuation Parameters in 2021
In Q3 2021 Czech Republic and Slovakia introduced changes to
the feed-in-tariffs valid as of 1 January 2022.
In July 2021 the Slovak parliament approved an amendment to the
energy law introducing an extension of the feed-in-tariffs for PV
power plants commissioned in 2009 to 2011 from 15 years to 20
years. This measure was accompanied by a reduction in the appli-
cable feed-in tariffs, which are assessed for each individual PV
power plant, taking into account additional investment costs and
higher operations and maintenance costs related to the extended
technical life. The new feed-in-tariffs were set with the objective of
being neutral to the present value of the assets. The Group up-
dated the DCF models for Slovakia to reflect these changes and it
resulted in an increase of fair value of property, plant and equip-
ment by EUR 334 thousand (net impact to the revaluation reserve
of property, plant and equipment by EUR 270 thousand and EUR
105 thousand for the JV share on revaluation reserve of property,
plant and equipment).
In September 2021, the Lower Chamber of Parliament of the Czech
Republic passed a new law regarding the support of renewable en-
ergy sources (RES) which empowered government to set maxi-
mum project internal rates of returns (IRR) for the various
supported RES of between 8.4% and 10.6% for the respective sup-
port periods. For PV power plants commissioned in the years 2009
and 2010, an additional 10% solar levy has been approved. As
Photon Energy N.V.
Financial Section
Annual Report 2022
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2022
97
such, 2009 power plants will pay 10% and 2010 power plants will
pay a total of 20% (increased from the previously applied rate of
10%) starting from 1 January 2022.
The Group updated the DCF
models for Czech Republic to reflect these changes and it resulted
in a decrease of fair value of property, plant and equipment by EUR
3,843 thousand (net impact to the revaluation reserve of property,
plant and equipment of EUR 3,229 thousand). See also note 19
and 29.
Changes in the Valuation Parameters in 2022
In June 2022 the Hungarian government issued a decree introduc-
ing a 65% tax on the excess revenues (that is above the feed-in-
tariff/contract-for-difference price of EUR 85 per MWh) generated
by licensed PV power plants (required for installations with a grid
connection capacity exceeding 500 KW AC) which had either ex-
ited one of the support schemes or had been awarded a METÁR
license in auction but did not execute the contract-for-difference
with the designated Hungarian state entity, for the financial years
2022 and 2023. On that basis, seven power plants with a total in-
stalled capacity of 9.86 MWp (representing 19.3% of the Com-
pany’s capacity in Hungary) have been and will continue being
affected by the excess revenue tax. All other power plants in Hun-
gary are exempt from this tax.
The Group updated the DCF models for Hungary to reflect these
changes and it resulted in a decrease of fair value of property, plant
and equipment by EUR 567 thousand compensated in increase of
fair value of property, plant and equipment in other countries with
overall zero effect on the whole portfolio. Introduced windfall taxes
in other countries do not affect the proprietary portfolio of the
Group
.
5.2
Inventories
The fair value of inventories acquired in a business combination is
determined based on the estimated selling price in the ordinary
course of business less the estimated costs of completion and sale,
and a reasonable profit margin based on the effort required to com-
plete and sell the inventories.
5.3
Financial Instruments – Other Financial
Assets and Derivatives
Fair value of financial instruments traded in an active market is
measured as the product of the quoted price for the individual asset
or liability and the number of instruments held by the entity. This is
the case even if a market’s normal daily trading volume is not suf-
ficient to absorb the quantity held and placing orders to sell the po-
sition in a single transaction might affect the quoted price.
Valuation techniques such as discounted cash flow models or mod-
els based on recent arm’s length transactions or consideration of
financial data of the investees are used to measure fair value of
certain financial instruments for which external market pricing in-
formation is not available. Fair value measurements are analysed
by level in the fair value hierarchy as follows: (i) level one are meas-
urements at quoted prices (unadjusted) in active markets for iden-
tical assets or liabilities, (ii) level two measurements are valuations
techniques with all material inputs observable for the asset or lia-
bility, either directly (that is, as prices) or indirectly (that is, derived
from prices), and (iii) level three measurements are valuations not
based on solely observable market data (that is, the measurement
requires significant unobservable inputs)
.
6.
Financial Risk Management
6.1
Risk Management Framework
The Group’s risk management policies are established to identify
and analyse the risks faced by the Group, to set appropriate risk
limits and controls, and to monitor risks and adherence to limits.
Risk management policies and systems are reviewed regularly to
reflect changes in market conditions and the Group’s activities. The
Group, through its training and management standards and proce-
dures, aims to develop a disciplined and constructive control envi-
ronment in which all employees understand their roles and
obligations.
6.2
Sovereign Risk
The Company’s results can be adversely affected by political or
regulatory developments negatively impacting on the income
streams of projects in the portfolio. A number of countries have al-
ready succumbed to retroactive measures reneging on existing
agreements, guarantees and legislation by imposing levies, can-
celling contracts or renegotiating terms unilaterally or by other
measures reducing or in the worst-case cancelling Feed in Tariffs
(FiT) for renewable energy investments. Legal remedies available
to compensate investors for expropriation or other takings may be
inadequate. Lack of legal certainty exposes projects in the portfolio
to increased risk of adverse or unpredictable actions by govern-
ment officials, and also makes it more difficult for us to enforce ex-
isting contracts. In some cases these risks can be partially offset
by agreements to arbitrate disputes in an international forum, but
the adequacy of this remedy may still depend on the local legal
system to enforce the award.
6.3
Operational Risk
The economic viability of energy production using photovoltaic
power plants installations depends on FiT systems. The FiT system
can be negatively affected by a number of factors including, but not
limited to, a reduction or elimination in the FiT or green bonus per
KWh produced, an elimination or reduction of the indexation of the
FiT and a shortening of the period for which the FiT applies to pho-
tovoltaic installations. On the investment side the Company faces
uncertainty in relation to the approval process for the construction
of photovoltaic installations, grid connection and the investment
cost per KWp of installed capacity. The operating and financial re-
sults of the Company can be seriously affected by a sudden or sig-
nificant change in the regulatory environment in each of the
countries where the Company or its subsidiaries conduct business.
During the fourth quarter of 2010, the Czech parliament and the
Czech government approved several changes in the legal frame-
work governing certain aspects of the photovoltaic and other indus-
tries. Those changes included mainly: (i) a 3 years solar levy, newly
introduced into the Czech tax system, of 26% on the revenues of
photovoltaic power plants above 30kW of installed capacity, com-
pleted in the years 2009 and 2010, (ii) the abolishment of a six-year
corporate income tax exemption for photovoltaic power plants, and
(iii) a tenfold increase of the contractual fees previously agreed be-
tween the photovoltaic power plant operators and the state Land
Fund for the extraction of certain classes of land from the state
fund.
In September 2013, additional prolongation of the solar levy was
approved. The percentage was decreased to 10% and applicability
Photon Energy N.V.
Financial Section
Annual Report 2022
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2022
98
of this tax prolonged till end of the useful economic life of the power
plants.
In September 2021, an additional 10% solar levy was introduced in
the Czech Republic for the powerplants put in operation in 2009
and 2010 (see 5.1 above).
From 2016 and 2017 the Group opted for its Czech power plants
for the green bonus scheme and for the years 2018 onwards the
management decided to opt again for the feed-in-tariff. For 2022
the Group opted for the green bonus scheme again. In July 2021,
the Slovak Republic decided to prolong and reduce the feed-in-tar-
iff for the power plants connected in 2010 and 2011 (see 5.1
above).
6.4
Currency Risk
The Group is exposed to a currency risk on sales, purchases and
borrowings that are denominated in a currency other than the re-
spective functional currencies of Group entities.
The transactions of the Group entities are mainly denominated in
CZK, EUR, AUD, CHF, RON, PLN and HUF. The Group does not
manage the foreign currency risk by the use of FX derivatives, it
rather uses natural hedging by actively managing FX positions. It
is not done in a formalised way.
6.5
Credit Risk
Credit risk is the risk of financial loss to the Group if a customer or
counterparty to a financial instrument fails to meet its contractual
obligations, and arises principally from the Group’s receivables
from customers, including the electricity distributors.
6.5.1.
Trade and Other Receivables
The Group’s exposure to credit risk is influenced mainly by individ-
ual characteristics of each customer. However, management also
considers the demographics of the Group’s customer base, includ-
ing the default risk of the industry and country in which customers
operate, as these factors may have an influence on credit risk. In
most cases, the Company requires advance payments (partial or
100%) for the delivery of electricity in order to minimise the credit
risk. Additionally, in case of new customers, the company looks for
market references of the potential customers that are available in
public resources. The collections are regularly monitored by the re-
sponsible employees and any significant overdue receivables are
discussed with the management of the company. Management of
the company is responsible for the decision whether allowance is
to be created or any other steps need to be performed.
The Group establishes an allowance for impairment that repre-
sents its estimate of expected losses in respect of trade and other
receivables.
6.5.2
Liquid Assets / Cash and Cash Equivalents
The Group held liquid assets of EUR 21,358 thousand at 31 De-
cember 2022 (2021: EUR 39,362 thousand), which represents its
maximum credit exposure on these assets. Liquid Assets consist
of following items:
In thousands of EUR
2022
2021
Cash and cash equivalents
11,271
32,506
Liquid assets with restriction on
disposition
6,373
3,629
Precious metals
3,714
3,227
Liquid assets
21,358
39,362
The cash and cash equivalents and liquid assets with restriction on
disposition are held with banks and financial institution counterpar-
ties. Only those banks and financial institutions, which were ap-
proved by the members of the board of directors, can be used by
the Group.
Some of the cash held by the Czech, Slovak, Hungarian and Aus-
tralian SPVs having received external financing is restricted only
for certain transactions, e.g. debt service, or maintenance service
for inverters. Further have been issued bank guarantees by Photon
Energy Australia Pty Ltd., Photon Energy Engineering Australia Pty
Ltd., Photon Energy Corporate Services CZ s.r.o. and by Greenford
Solar srl. for which the banks requested security deposits. Total
amount of this restricted cash by these companies is EUR 6,373
thousand as at 31 December 2022 (2021: EUR 3,629 thousand),
see also note 28.
6.6
Liquidity Risk
Liquidity risk is the risk that the Group will encounter difficulty in
meeting the obligations associated with its financial liabilities that
are settled by delivering cash or another financial asset. The
Group’s approach to managing liquidity is to ensure, as far as pos-
sible, that it will always have sufficient liquidity to meet its liabilities
when due, under both normal and stressed conditions, without in-
curring unacceptable losses or risking damage to the Group’s rep-
utation.
6.7
Interest Risk
Interest rate risk is the risk that the value of a financial instrument
will fluctuate due to changes in market interest rates. It is measured
by the extent to which changes in market interest rates impact on
net interest expense. The Company uses interest rate derivatives
for managing the interest rate risk.
Slovak and refinanced Hungarian SPVs, consolidated in full or by
using the equity method by the Group, own interest rate derivatives
used for hedging. The purpose of the derivatives is to hedge
against movement of interest rates. Concluding the derivative con-
tract was one of conditions required by financing bank as defined
in the Loan contract.
The change in fair value of these derivatives is recognized via eq-
uity of the Company and the result is shown in Derivatives reserve
of the Company’s equity.
The Czech SPVs owned interest rate derivatives. Concluding the
derivative contract was one of conditions required by the financing
bank as defined in the Loan contract. The change in value of these
derivatives is recognized via Profit and loss as they do not meet
criteria for the hedging derivatives. With the early repayment of the
bank loans by the Czech SPVs the derivatives were liquidated end
of December 2021.
6.8
Force Majeur Risk
Force majuer risks like like the pandemic of the Corona virus may
impact the business activity of the Group. For example with the
outbreak of the Corona virus the Group has implemented continuity
plans as well as health and safety procedures to ensure that all
employees and contractors are safe and compliant with govern-
ment directives. The Group is technological (IT systems, commu-
nication, back ups) and organizational (e.g. home offices) capable
to adjust to external events impacting the regular operation. In all
main markets of the Group highly skilled local teams will remaining
focused on minimizing the impact on the ongoing business as well
as various growth initiatives. The extent of the negative impact will
depend on the further nature and length of such events in the coun-
tries where the Group is active
.
Photon Energy N.V.
Financial Section
Annual Report 2022
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2022
99
6.9
Inflation Risk
State support, especially feed-in tariffs, is indexed in the cases of
Czech and Hungarian projects; i.e. they are subject to inflationary
adjustment that is defined by a specific band. In case of high infla-
tion, there is consequently a risk that the running operative costs
increase while the yields will not be adjusted accordingly. In pro-
jects that are not supported by the state there is a different risk -
namely that by lower inflation the calculated market prices for elec-
tricity will not develop as it was planned. The occurrence of any of
the mentioned risks can have a negative impact on the financial
situation, of the Group.
Capital Management
The Group manages its capital to ensure that entities in the Group
will be able to continue as a going concern while maximising the
return to stakeholders through the optimisation of the debt and eq-
uity balance. The Group’s overall strategy will unwind accordingly
to the further negotiations with the Group's creditors.
The Group’s net debt to equity ratio at the reporting date was as
follows:
In thousands of EUR
2022
2021
Total liabilities
183,331
145,080
Less: Liquid assets
21,358
39,362
Net debt
161,973
105,718
Total equity
70,475
51,538
Net debt to equity ratio
at 31 December
2.29
2.05
Equity ratios:
2022
2021
Full Equity ratio
27.8%
26.2%
Adjusted Equity ratio
(for bond governance)
32.0%
28.6%
There were no changes in the Group’s approach to capital man-
agement during the year.
7.
Operating Segments
An operating segment is a component of the Group that engages
in business activities from which it may earn revenues or incur ex-
penses, including revenues and expenses that relate to transac-
tions with any of the Group’s other components. All operating
segments’ operating results are reviewed regularly by the Group’s
management and Board of directors to make decisions about re-
sources to be allocated to the segment and to assess its perfor-
mance, and for which discrete financial information is available.
The chief operating decision maker (CODM) has been identified as
the Board of Directors and the CFO of the Group.
The Board of Directors identified the following segments to be re-
ported:
►
Solutions
: Development, engineering and construction
services of-turn-key photovoltaic systems’ installations for
external clients and Photon Energy). This segment was for-
merly named Energy Solutions and included as well whole-
sale of technology, which became due to its size an own
reportable segment. Further activities of project develop-
ment were taken out of this segment and are reported now
under “Others”, since the nature of the activity changed
from purely internal development for our own projects to
project development for external partners,
►
Technology
: Wholesale, import and export of FVE com-
ponents,
►
Investments
: Investment into photovoltaic power plants
and generation of revenues from production of electricity
and recognition of Other comprehensive income from re-
valuation of newly connected power plants (this segment
includes SPV that finished building of photovoltaic power
plants and those that are connected to the distribution net-
work and produce electricity).
►
Operations & Maintenance
: Operations, maintenance
and PVPP supervision. This segment includes also the ser-
vices of Inverter Cardio and Monitoring and Control,
►
Other segments
: Other, not related to any of the above
mentioned segments. Others include project development,
water technology and remediation services and other less
significant activities. None of these activities meets any of
the quantitative thresholds for determining reportable seg-
ments in neither 2022 nor 2021.
Segment results that are reported include items directly attributable
to a segment as well as those that can be allocated on a reasona-
ble basis. Interest income, interest expense and income tax
charges are allocated directly to the segments. Segment capital
expenditure is the total cost incurred during the reporting period to
acquire property, plant and equipment, and intangible assets other
than goodwill.
From 1.1.2023 onwards, we will start showing a new segment
("New Energy") covering the new Lerta business in the segment
reporting.
Factors that Management Used to Identify the Report-
able Segments
The Group’s segments are strategic business units that focus on
different business activities. They are managed separately be-
cause each business unit requires different processes.
Measurement of Operating Segment Profit or Loss,
Assets and Liabilities
The Group’s management and directors review financial infor-
mation prepared based on IFRS as adopted by EU adjusted to
meet the requirements of internal reporting.
The financial infor-
mation does not differ from IFRS as adopted by EU.
The Group’s management and directors evaluate the segments
based on total comprehensive income which is considered to be
the key measure.
Photon Energy N.V.
Financial Section
Annual Report 2022
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2022
100
Information About Reportable Segment Profit or Loss, Assets and Liabilities
Information About Reportable Segments
Operating segments for the period from 1 January 2022 to 31 December 2022
In thousands of EUR
Solutions
Technology
Investments
Operations
and
Maintenance
Other
Total for
segments
before
elimination
Elimination
Consolidated
financial
information
External revenues from the sale of products, goods & services
5,389
50,786
35,239
2,854
868
95,136
0
95,136
Internal revenues from the sale of products, goods & services
10,049
14,100
49
2,196
7,725
34,119
-34,119
0
Total revenues
15,438
64,886
35,288
5,049
8,593
129,255
-34,119
95,136
Other external income
-12
7
11
30
516
552
0
552
Raw materials and consumables used
-4,492
-55,014
-33
-426
-78
-60,043
16,114
-43,929
Solar levy
0
0
-1,969
0
0
-1,969
0
-1,969
Personnel expenses and other expenses
-7,731
-3,175
-5,302
-4,737
-12,990
-33,935
8,453
-25,482
EBITDA
3,203
6,705
27,994
-83
-3,959
33,860
-9,552
24,308
Depreciation
-52
-41
-7,419
-619
-817
-8,949
0
-8,949
Impairment charges
-1
-657
0
-20
-5
-684
0
-684
Gain (loss) on disposal of investments
0
0
0
0
0
0
0
0
Gain on derecognition of associate
0
0
0
0
2,182
2,182
0
2,182
Profit/loss share in entities in equivalency
0
0
127
0
0
127
0
127
Results from operating activities (EBIT)
3,150
6,006
20,702
-723
-2,600
26,536
-9,552
16,984
Financial income
440
7
392
275
4,128
5,242
-4,879
362
Interest expense
-530
-342
-4,237
-475
-8,556
-14,140
4,879
-9,261
Other net financial expenses
177
-30
-571
90
59
-275
0
-275
Gains less losses on derecog. of fin. liab. recog.at amortised costs
0
0
0
0
-114
-114
0
-114
Revaluation of derivatives
0
0
413
0
614
1,027
0
1,027
Profit/loss before taxation (EBT)
3,237
5,641
16,699
-833
-6,468
18,276
-9,552
8,724
Income Tax (income and deferred)
-932
-708
-790
-27
-7
-2,463
0
-2,463
Profit/loss after taxation
2,305
4,933
15,909
-860
-6,475
15,813
-9,552
6,261
Other comprehensive income
113
82
2,415
-29
-1,171
1,410
0
1,410
Total comprehensive Income
2,418
5,016
18,324
-889
-7,646
17,223
-9,552
7,670
Assets
50,625
41,186
172,409
18,200
199,579
481,998
-228,172
253,826
Liabilities
-46,555
-29,043
-110,410
-26,970
-189,308
-402,286
218,955
-183,331
Investments in JV accounted for by equity method
0
0
1,509
0
0
1,509
0
1,509
Additions to non-current assets
0
0
26,216
511
23,062
49,789
0
49,789
Photon Energy N.V.
Financial Section
Annual Report 2022
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2022
101
Operating segments for the period from 1 January 2021 to 31 December 2021
In thousands of EUR
Solutions
Technology
Investments
Operations
and
Maintenance
Other
Total for
segments
before
elimination
Elimination
Consolidated
financial
information
External revenues from the sale of products, goods & services
5,594
8,315
19,402
2,572
476
36,359
0
36,359
Internal revenues from the sale of products, goods & services
4,551
906
1,287
1,888
2,692
11,325
-11,325
0
Total revenues
10,145
9,221
20,690
4,460
3,168
47,684
-11,325
36,359
Other external income
174
5
10
21
209
418
0
418
Raw materials and consumables used
-9,123
-7,479
-1,893
-1 893
-669
-21,057
8,328
-12,729
Solar levy
0
0
-883
0
0
-883
0
-883
Personnel expenses and other expenses
-3,701
-282
-767
-2,422
-8,837
-16,009
2,428
-13,581
EBITDA
-2,505
1,464
17,156
167
-6,128
10,154
-570
9,584
Depreciation
-40
-6
-9,191
-732
-701
-10,670
0
-10,670
Impairment charges
0
0
-231
0
0
-231
0
-231
Gain (loss) on disposal of investments
0
0
0
0
464
464
0
464
Profit/loss share in entities in equivalency
0
0
141
0
0
141
0
141
Result from operating activities (EBIT)
-2,545
1,459
7,876
-566
-6,365
-142
-570
-712
Financial income
86
48
452
468
2,318
3,371
-3,126
245
Interest expense
-304
-108
-3,088
-365
-5,836
-9,701
3,126
-6,575
Other net financial expenses
-160
41
-983
29
879
-195
0
-195
Gains less losses on derecog. of fin. liab. recog.at amortised costs
0
0
0
0
-420
-420
0
-420
Revaluation of derivatives
0
0
488
0
1,242
1,730
0
1,730
Profit/loss before taxation (EBT)
-2,924
1,439
4,744
-434
-8,182
-5,357
-570
-5,926
Income Tax (income and deferred)
14
-26
-458
-15
-20
-506
0
-506
Profit/loss after taxation
-2,909
1,412
4,286
-449
-8,202
-5,863
-570
-6,433
Other comprehensive income
-18
25
6,336
-122
2,307
8,528
0
8,528
Total comprehensive Income
-2,927
1,438
10,622
-572
-5,896
2,665
-570
2,095
Assets
20,351
5,009
144,679
14,770
188,085
372,894
-176,276
196,618
Liabilities
-19,870
-4,369
-101,327
-24,303
-174,407
-324,276
179,196
-145,080
Investments in JV accounted for by equity method
0
0
1,626
0
0
1,626
0
1,626
Additions to non-current assets
0
46
8,493
80
3,795
12,414
0
12,414
Photon Energy N.V.
Financial Section
Annual Report 2022
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2022
102
7.
Operating Segments (Continued)
All the operational segments are managed on an international ba-
sis (not on a country level). In 2022 the Group operated in the
Czech Republic, Slovak Republic, Germany, Hungary, Australia,
Switzerland, Romania, Poland, Mongolia, South Africa and the
Netherlands with headquarters in the Netherlands.
In 2022, revenues were generated in all above mentioned markets,
except of the Netherlands, Mongolia and South Africa. Non-current
assets (power plants) are located in the Czech Republic, Slovak
Republic, Hungary, Romania and Australia.
For the booking of transactions between the segments, the same
rules for the recognition are applied as for the third parties.
Geographical information below, including revenues based on the
geographical location of entities generating the revenues and
segment assets based on the geographical location of the assets
is presented in notes 10 and 19
.
Major Customer
The Group has many customers. For the companies selling elec-
tricity, there is usually only one distribution company, which buys
produced electricity in a region. These local electricity distributors
further deliver and resell electricity to final customers. Distributors
are obliged to purchase all of the electricity production for the price
based on Feed in Tariff prices. The Group as such is not dependent
on any individual customer.
During 2022 the Group commissioned a powerplant in Hungary
where electricity is sold directly into the wholesale electricity market
and the revenues from sale of this electricity are based on actual
market prices.
Revenues from customers over 10% of total revenues
In thousands of EUR
2022
2021
Lerta Energy HU Kft
13,904
-
OTE, a.s.
9,617
-
E.ON Energie, a.s.
-*
5,859
MAVIR Zrt.
-*
4,285
Total revenue from customers over 10% of total revenues
23,521
10,144
Total revenue
95,136
36,359
*did not exceed 10% of total revenues
Revenues from Lerta Energy HU Kft and OTE a.s. (2021: E.ON Energie, a.s. and MAVIR Zrt.) are presented in segment Investments and
represent revenues from sale of electricity from various PVPs. Revenues from Lord Howe Island Board are presented in segment Solutions
and represent EPC revenues
.
8.
Business combination
Lerta Spółka Akcyjna is a joint
-stock company organized under the
laws of Poland, with its office at Naramowicka 76, 61-
622 Poznań,
Poland, registered in the register of entrepreneurs of the National
Court Register
kept by District Court Poznań
– Nowe Miasto i Wilda
in Poznań, VIII Commercial Division of the National Court Register,
under number KRS 0000848411 (hereinafter referred to as
“Lerta”).
Lerta is an energy startup on a mission to become the biggest clean
energy company free of generation assets. Lerta enables energy
consumers and generators to maximize profits or savings with ef-
fective, AI-based management of aggregated in Virtual Power
Plant (“VVP”) assets on several markets simultaneously.
Lerta fully owns directly nine subsidiaries in five countries (herein-
after referred to as “Lerta Group”). Those subsidiaries are:
Nr
Subsidiary Name
Short
Country
1
Lerta Poland Sp. z o.o.
LPL
Poland
2
Lerta Power Poland Sp. z o.o.
LPPL
Poland
3
Lerta JRM Sp. z o.o.
LJRM
Poland
4
Lerta Technology Sp. z o.o.
LTECH
Poland
5
Lerta Energy S.r.l.
LROM
Romania
6
LERTA Magyarország Kft.
LMAG
Hungary
7
Lerta Energy HU Kft.
LHUK
Hungary
8
Lerta Czech Republic s.r.o.
LCR
Czechia
9
Lerta Lithuania UAB
LLIT
Lithuania
Photon Energy N.V.
Financial Section
Annual Report 2022
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2022
103
8.1
Valuation of Lerta
Discounted cash flow valuation method
The valuation of Lerta was based on the Discounted cash flow
(DCF) method and results in the preliminary net present value of
the free cash flows generated during the forecasted period and the
preliminary net present value of the terminal value in the total
amount of PLN 188.7 million (EUR 40.5 million) as included in the
preliminary purchase price allocation, which corresponds to PLN
10.95 (EUR 2.35) per one Lerta share. The purchase price for Lerta
shares which was agreed at PLN 5.80 (EUR 1.25) per one share
results in a 47% discount towards the valuation based on the DCF
valuation method.
8.2
Steps of the acquisition
As of 24 November 2022,
the Company acquired all shares which
were owned by three financial investors i.e., 5,594,202 shares rep-
resenting 32.48% in the capital of Lerta. The sale/purchase price
was agreed between the parties at PLN 5.80 per share and
amounted in the total contractual value of PLN 32.446 million (EUR
6.5 million). Upon completion of this transaction Photon Energy
Group increased its shareholding in Lerta from 24.27% up to
56.75%. Additionally, a side letter was signed between the Com-
pany and the founders of Lerta to protect the Founders interest until
the final acquisition of their shares by the Company. In this side
letter the Company agrees to not take over control of Lerta by not
taking any actions that would imply control as long as such invest-
ment agreement between the founders and the Company is signed.
On 20 December 2022 the Company concluded an investment
agreement with the founders of Lerta, and certain executive con-
tracts to this agreement. Under the terms of this agreement, an ad-
ditional equity stake of 7,449,750 shares, representing 43.25% of
Lerta’s equity was acquired by the Company for a combination of
a PLN 2.16 million (EUR 464 thousand) cash consideration, the
transfer of 2,300,110 treasury shares in the Company and
1,238,521 Company shares to be newly issued in an in-kind con-
tribution. As of 31 December 2022, Photon Energy N.V. acquired
4,972,708 shares in Lerta in the exchange of 2,300,110 treasury
shares in the Company and PLN 2.16 million (EUR 464 thousand)
paid in cash to the Founders. As a result, the Company increased
its shareholding in Lerta to 85.62%.
Between 24 November 2022 and 31 December 2022 Photon En-
ergy has not appointed or recalled a member to the supervisory
board, nor requested to appoint or recall a member to the board of
directors. Photon Energy has also not taken any other measures
that could be considered as taking over control of Lerta. Manage-
ment of Lerta was in the full responsibility of the Founders as being
members of the board of directors.
Based on the above the assumed date of taking over control of
Lerta Group is considered as 31 December 2022 when Photon En-
ergy increased its shareholding from 56.75% to 85.62%. Photon
gained full control effectively as at 31 December 2022. The transfer
of the outstanding consideration was deferred to the year 2023,
when remaining 14.38% have been taken over in a in-kind contri-
bution of Lerta shares against the issuance of new shares of the
Company in February 2023.
The original value of Lerta previously presented as Associate for
24.27% stake was EUR 3,202 thousand
.
Date
Step
Amount In thousands of EUR
24/11/2022
Original value of Lerta
3,202
24/11/2022
Cash transfers
6,720
Total
9,922
As at 31 December 2022, the date of taking over control of Lerta Group, the investment in the acquiree held prior to the acquisition was
remeasured to its fair value at the acquisition date and a gain of EUR 2,182 thousand was recognised as a gain in profit and loss income.
As at 31 December 2022, the value of 100% share in the Lerta Group was calculated as follows:
Date
Step
Amount In thousands of EUR
31/12/2022
Value of Lerta as of 24 November 2022
9,922
31/12/2022
Cash transfers
464
31/12/2022
Value of shares issued
5,700
31/12/2022
Revaluation
2,182
31/12/2022
In-kind contribution against issuance of new shares
3,081
Total
21,349
The total value of 100% share in Lerta was calculated to EUR
21,349 thousand in the preliminary purchase price allocation.
There is no non-controlling interest calculated and booked as a re-
sult of the transaction with the owners, share swaps have been
posted to the share premium.
In the preliminary purchase price allocation, the fair values of as-
sets and liabilities acquired are based on discounted cash flow
models. Based on it, the following items were included in the pur-
chase price allocation:
►
Demand response contracts
The fair value of Demand response contracts in the preliminary pur-
chase price allocation activated as intangible asset was evaluated
at EUR 6,047 thousand with attributable deferred tax liability of
EUR 1,149 thousand.
The fair value in the preliminary purchase price allocation was cal-
culated based on secured demand response contracts for the
years 2023 to 2027. Expected cash flows were discounted at a rate
of 13.61%.
Starting from 1 January 2023 the demand response contracts will
be amortized in line with the utilization of the contracts
.
Photon Energy N.V.
Financial Section
Annual Report 2022
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2022
104
Goodwill calculated in the preliminary purchase price allocation in
the amount of EUR 15,005 thousand arises from the main syner-
gies described below.
The integration of Lerta into Photon Energy Group represents the
fusion of physical and digital energy to create a customer-centric
renewable energy utility that will be uniquely positioned to effec-
tively address the pain points of energy generators, energy users
and transmission system operators. Energy generators will be able
to benefit from an integrated approach to asset operation and man-
agement as well as cost-efficient market access, including balanc-
ing services. Energy users will be able to manage and optimise
their costs from a combination of on-site generation and off-site
supply. This will include the benefit of energy storage and the mon-
etisation of their demand flexibility. Transmission systems opera-
tors will be provided with flexible supply, DSR and ancillary
services to the power grid.
The impact on Photon Energy Group’s strategic and operational
priorities following the Transaction will include:
►
Capacity building and product development for the efficient
delivery of a ‘one-stop shop’ offering that combines assets,
services and IT solutions to establish Photon Energy
Group as the preferred partner for commercial and indus-
trial customers in the CEE region and Australia on their
journey from passive energy users to proactive energy flex-
umers.
►
A significant acceleration in the deployment of utility-scale
and on-site energy storage capacities both as an EPC sup-
plier as well as an investor, leveraging the Group’s experi-
ence in Australia such as the Lord Howe Island hybrid -
energy system and the planned utility-scale hybrid plant in
Boggabri, New South Wales.
►
Close monitoring of the emergence of markets for grid flex-
ibility and other ancillary services worldwide and evaluation
of opportunities as they emerge, which may lead to rela-
tively low-risk and low-cost market entries into new loca-
tions currently not served by the Company.
Details of net assets acquired and goodwill in the preliminary purchase price allocation arising are as follows:
In thousands of EUR
31 December 2022
Total net assets acquired
1,445
Capacity market contracts (note 22)
6,047
Deferred tax liability
-1,149
Goodwill arising from the acquisition
15,005
Total net assets acquired
21,349
Main classes of assets and liabilities recognised in fair value in the preliminary purchase price allocation because of acquisition are as follows:
In thousands of EUR
Fair value
31 December 2022
Software
356
Goodwill
461
Equipment
326
Inventory
290
Loans, accounts receivables, prepayments
4,679
Bank and cash
1,060
Provisions and accruals
-379
Loans and trade payables
-5,348
Capacity market contracts (note 22)
6,047
Deferred tax liability
-1,149
Goodwill arising from the acquisition
15,005
Total net assets acquired
21,349
In thousands of EUR
2022
Total purchase consideration and previously held interest in the acquiree
15,964
Less: Non-cash consideration
-8,781
Outflow of cash and cash equivalents on acquisition
7,183
Photon Energy N.V.
Financial Section
Annual Report 2022
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2022
105
9.
Acquisitions of Subsidiary and Non-controlling Interests;
Financial Information for the Joint Ventures
9.1
Establishment of New Subsidiaries
During 2022, Photon Energy N.V. (directly or via its subsidiaries)
incorporated the following subsidiaries:
►
On 10 June 2022, Photon Energy N.V. became 100%
shareholder of Photon Energy Solutions AG.
►
On 10 June 2022, Photon Energy N.V. became 100%
shareholder of Photon Property AG
►
On 16 September 2022, Photon Energy Solutions CZ
a.s. became 100% shareholder of PESPV 1 s.r.o..
►
On 16 September 2022, Photon Energy Solutions CZ
a.s. became 100% shareholder of PESPV 2 s.r.o..
During 2021, Photon Energy N.V. (directly or via its subsidiaries)
incorporated the following subsidiaries:
►
On 22 March 2021, Photon Energy N.V. became 99%
shareholder of Photon Energy Project Development XXK
in Mongolia
►
On 21 April 2021, Photon Energy N.V. became 100%
shareholder of Photon Renewable Energy Pty. Ltd. In
South Africa
►
On 17 May 2021, Photon Energy Project Development
XXK became 100% shareholder of PEPD Solar XXK. in
Mongolia
►
On 25 June 2021, Photon Energy N.V. became 100%
shareholder of Solar Age SPV 1 Pty. Ltd. In South Africa
►
On 17 November 2021, Photon Energy N.V. became
100% shareholder of Photon Energy AUS SPV 12 Pty.
Ltd.,
►
On 13 December 2021, Photon Energy N.V. became
100% shareholder of Debden Solar Sp. z o.o.
►
On 13 December 2021, Photon Energy N.V. became
100% shareholder of Beckton Solar Sp. z o.o.
►
On 14 December 2021, Photon Energy N.V. became
100% shareholder of Alperton Solar Sp. z o.o.
►
On 21 December 2021, Photon Energy N.V. became
100% shareholder of Ealing Solar Sp. z o.o.
►
On 21 December 2021, Photon Energy N.V. became
100% shareholder of Chigwell Solar Sp. z o.o.
9.2
Acquisitions of Subsidiaries
During 2022, Photon Energy N.V. (directly or via its subsidiaries)
acquired the controlling share in the Lerta S.A. and its subsidiaries
as described in note 8 Business combination. Also, 100% share in
originally 51% owned joint venture Photon AUS SPV 6 was ac-
quired during the year.
During 2021 there were no acquisitions of subsidiaries.
Other Developments in 2022
►
On 17 January 2022, KORADOL AG became 100%
shareholder of Photon SPV 3 s.r.o.. Photon SPV 4 s.r.o.,
Photon SPV 6 s.r.o., Photon SPV 8 s.r.o., Photon SPV
10 s.r.o., Exit 90 SPV s.r.o., Onyx Energy s.r.o., Onyx
Energy projekt II s.r.o., and Kaliopé Property s.r.o..
►
On 10 February 2022, ALFEMO AG became 90% share-
holder and KORADOL AG became 10% shareholder of
Siria Solar S.r.l..
►
On 24 February 2022, Photon Energy Projects became
95% shareholder and Photon Energy Solutions CZ be-
came 5% shareholder of Deptford Solar Srl..
►
On 28 February 2022, Photon Energy Projects became
95% shareholder and Photon Energy Soluions CZ be-
came 5% shareholder Kenton Solar Srl., Lancaster Solar
Srl., and Perivale Solar Srl..
►
On 7 March 2022, Photon Energy Projects became 95%
shareholder and Photon Energy Soluions CZ became
5% shareholder of Weston Solar Srl. and Harlow Solar
Srl..
►
On 14 March 2022, Photon Energy Projects became
95% shareholder and Photon Energy Soluions CZ be-
came 5% stakeholder of Brentford Solar Srl., Camber-
well Solar Srl., Romford Solar Srl., and Stratford Solar
Srl..
►
On 18 March 2022, Photon Energy N.V. became 95%
shareholder and Photon Energy Projects became 5%
shareholder of Photon Energy Engineering Romania
SRL..
►
On 22 March 2022, PE Solar Technology Ltd. was suc-
cessfully dissolved.
►
On 6 April 2022, Photon Energy Solutions s.r.o. was re-
named to Photon Energy Engineering s.r.o..
►
On 27 April 2022, Photon SPV 1 s.r.o. was renamed to
Photon Energy Solutions CZ s.r.o.
►
On 24 May 2022, Solar Age Polska S.A. was renamed
to Photon Energy Solutions PL S.A..
►
On 1 July 2022, Photon Energy Solutions CZ s.r.o. suc-
cessfully changed its name (and legal form) to Photon
Energy Solutions CZ a.s..
►
On 2 September 2022, Photon Energy Operations CZ
s.r.o. PRAGA SUCURSALA BUCURESTI was success-
fully deregistered.
►
On 5 October 2022, Photon AUS SPV 12 Pty. Ltd. has
changed its name to Photon New Energy Pty. Ltd..
►
On 19 October 2022, Photon Energy Solutions CZ a.s.
became 100% shareholder of Photon Energy Solutions
s.r.o..
►
On 20 October 2022, Photon Energy Solutions HU Kft
has changed its name to Photon Energy Engineering HU
Kft..
►
On 30 December 2022, ALFEMO AG has changed its
name to Photon Energy Investment AG.
Other Developments in 2021:
►
On 5 February 2021, Photon Energy N.V. became 100%
shareholder of Photon Water Australia Pty. Ltd
►
On 11 February 2021, Photon Energy N.V. became
12,01% shareholder of Lerta S.A
.
Photon Energy N.V.
Financial Section
Annual Report 2022
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2022
106
►
On 8 March 2021, Photon Energy N.V. acquired by share
swap additional 40.01% and subsequently held 65%
stake of MARYVALE SOLAR FARM Pty. Ltd. In ex-
change Photon Energy N.V. swapped it’s 49.00% shares
of GUNNING SOLAR FARM Pty. Ltd. and it’s 24.99%
shares of SUNTOP Stage 2 Solar Farm Pty. Ltd.
►
On 8 June 2021, Photon Energy N.V. became 100%
shareholder of Photon Remediation Technology N.V.
►
On 21 June 2021, MEDIÁTOR Ingatlanközvetítő és
Hirdető Kft. was successfully renamed to MEDIÁT
OR
PV Plant Kft.,
►
On 21 June 2021, PROMA Mátra Ingatlanfejlesztési Kft.
was successfully renamed to PROMA Mátra PV Plant
Kft.,
►
On 14 October 2021, Photon Energy Projects s.r.o. be-
came 1% shareholder of Photon Energy Romania Srl. -
transfer from PEO NL B.V.
►
On 28 October 2021, Global Investments Protection AG
has sold its 99% interests in Photon Energy Peru S.A.C.,
►
On 28 October 2021, Photon Energy N.V. has sold its
1% interests in Photon Energy Peru S.A.C.
►
On 25 November 2021, Becontree Solar Srl. was suc-
cessfully renamed to Photon Energy Operations Roma-
nia Srl., – change of shareholders structure where 95%
shares is now owned by Photon Energy Operations N.V.,
remaining 5% shares holds Photon Energy Operations
CZ s.r.o.
►
On 20 December 2021, was registered merger of Photon
Energy Engineering Europe GmbH and Photon Energy
Technology EU GmbH into Photon Energy Technology
EU GmbH., Energy Engineering Europe GmbH ceased
to exist as of 1 January 2021
►
On 21 April 2021, Photon Energy N.V. became 100%
shareholder of Photon Renewable Energy Pty. Ltd.,
►
On 17 May 2021, Photon Energy Project Development
XXK. became 100% shareholder of PEPD Solar XXK.,
►
On 8 June 2021, Photon Energy N.V. became 100%
shareholder of Photon Remediation Technology N.V.,
9.3
Financial Information for the Joint Ventures
The table below summarises the movements in the carrying amount of the Group’s investments in joint ventures.
In thousands of EUR
2022
2021
Joint ventures
Joint ventures
Carrying amount at 1 January
1,626
2,641
Share of profit of joint ventures
127
141
Acquisition of joint ventures
0
302
Disposal of joint ventures
0
-1,412
Share of other comprehensive income of joint ventures
73
122
Dividends received from joint ventures
-191
-168
Carrying amount at 31 December
1,509
1,626
Joint ventures
Investments in equity-accounted investees amounting to EUR
1,509 thousand (2021: EUR 1,626 thousand) represent the nomi-
nal share in the joint ventures owned by the Group.
In 2021, Photon Energy has exchanged its 49% stake in the Gun-
ning Solar Farm and 25% stake in the Suntop2 Solar Farm for 74%
stake in Maryvale Solar Farm. Following the acquisition, the Group
sold its 35% stake in Maryvale to its former JV partner Polpo. After
the transaction, the Company possessed a 65% stake in Maryvale
Solar Farm. In December 2021 the Company sold its remaining
65% stake in Maryvale Solar Farm Pty. Ltd
.
Photon Energy N.V.
Financial Section
Annual Report 2022
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2022
107
2022:
In thousands of EUR
Photon
SK SPV 1
Solarpark
Myjava
Solarpark
Polianka
Total
Definition
joint venture
joint venture
joint venture
Share
50%
50%
50%
Equity of the entity
1,107
806
1,105
3,016
Share on equity
553
403
552
1,509
Net profit
-78
-94
-82
-252
Share of profit
-39
-48
-41
-127
Cash and cash equivalents
81
54
60
194
Current assets
156
132
124
412
Long-term assets
1,844
1,377
1,922
5,148
Current liabilities
-238
-235
-218
-698
Long-term liabilities
-294
-184
-375
-853
Depreciation
97
108
95
300
Interest expense
20
17
22
61
Revenues
-271
-295
-263
-829
Total comprehensive income (loss)
-5
8
-37
-32
* The Group does not have a control over the entity as all decision have to be done unanimously
2021:
In thousands of EUR
Photon
SK SPV 1
Solarpark
Myjava
Solarpark
Polianka
PE AUS
SPV 6
Total
Definition
joint venture
joint venture
joint venture
joint venture
Share
50%
50%
50%
51%*
Equity of the entity
1,170
856
1 232
-300
2,958
Share on equity
585
428
616
-3
1,626
Net profit
112
80
86
0
278
Share of profit
56
40
43
0
141
Cash and cash equivalents
200
209
270
1
679
Current assets
211
222
290
0
723
Long-term assets
1,940
1,486
2,017
0
5,443
Current liabilities
-661
-586
-704
-260
-2,212
Long-term liabilities
-380
-249
-419
0
-1,048
Depreciation
161
215
141
-
517
Interest expense
25
23
28
-
76
Revenues
-416
-434
-375
-2
-1,228
Total comprehensive income (loss)
-23
91
81
-
149
* The Group does not have a control over the entity as all decision have to be done unanimously
All of the entities included in the above table are accounted for us-
ing the equity method of consolidation as at 31 December 2022
and 31 December 2021. In case of the Slovak companies, the joint
ventures can distribute profit only after agreement of the financing
bank and the approval of the co-owner of the entity (via the general
meeting)
.
Disposals in 2022
►
There were no disposals in 2022. The Company has only
changed the consolidation method of Lerta S.A. and sub-
sequently its subsidiaries due to the change of the owner-
ship percentage and related change of control.
Photon Energy N.V.
Financial Section
Annual Report 2022
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2022
108
Disposals in 2021
Net assets held by the companies and net gain/loss on the disposal in 2021 can be presented as follow:
In thousands of EUR
Suntop
Solar Farm
Gunnning
Solar Farm
Maryvale
Solar Farm
Total
Total consideration received in cash
0*
0*
1,560
1,560
Net assets
0
0
-1,096
-1,096
Gain/loss on disposal
0
0
464
464
*No consideration was received in cash and the shares were exchanged for shares in Maryvale
.
10.
Revenue
The Group derives revenue from the transfer of goods and services at a point in time and over time in the following major product lines and
geographical regions:
Timing of revenues:
In thousands of EUR
2022
2021
At a point of time
50,786
8,315
Over time
44,008
25,584
Total revenue from contracts with customers
94,794
33,899
Compensations for sales from electricity generation
342
2,460
Total revenue
95,136
36,359
Revenues by major revenue types:
In thousands of EUR
2022
2021
Sale of goods and technologies
50,786
8,315
Sale of electricity and certificates
34,897
16,942
Revenues from EPC contracts
5,389
5,594
Rendering of services
3,722
3,048
Total revenue from contracts with customers
94,794
33,899
Compensations for sales from electricity generation
342
2,460
Total revenue
95,136
36,359
The Group uses various revenue models for PVP generating reve-
nues from sale of electricity – fixed feed in tariffs, contracts for dif-
ference, and going forward the merchant model (sale of electricity
into the wholesale market at actual market prices).
Revenues from sales of electricity from fixed feed-in-tariffs in 2022
amounted to EUR 13,363 thousand (2021: EUR: 16,893 thou-
sand), revenues from sales of electricity from contract for difference
revenue model amounted to EUR 0 thousand (2021: EUR 1,909
thousand) and revenues from sales of electricity for market price
amounted to EUR 23,286 thousand (2021: EUR 601 thousand).
Total amount of subsidies returned under the contract for difference
scheme in 2022 was EUR 1,780 thousand (2021: EUR 19 thou-
sand) as the average market price of electricity sold to the market
exceeded the agreed price.
As the Group operates in regulated business under various models
for PVP revenues from sales of electricity, the Group invoices the
revenues from sale of electricity to different partners, including gov-
ernment agencies which in fact do not receive any generated elec-
tricity, such as the short-term electricity market operator OKTE, a.s.
(“OKTE”) in Slovakia. Total amount of compensations for sales
from electricity generation invoiced to OKTE in 2022 amounted to
EUR 342 thousand (2021: EUR 2,460 thousand) and from MAVIIR
in Hungary negative EUR 1,780 thousand (2021: EUR 19 thou-
sand).
Even though the revenues were invoiced in 2022 and 2021 to gov-
ernment agency, the Group does not consider them to be govern-
ment grants and recognised them as revenues from sale of
electricity as these revenues are representing core activity of the
Group and are clearly linked to revenue model that is determined
for each PVP
.
Photon Energy N.V.
Financial Section
Annual Report 2022
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2022
109
Revenues by geographical split:
In thousands of EUR
2022
2021
Czech Republic
68,257
20,468
Hungary
17,473
6,683
Australia
6,483
5,574
Slovak Republic
1,916
861
Germany
574
31
Other
88
282
Romania
3
0
Total revenue from contracts with customers
94,794
33,899
Compensations for sales from electricity generation – Slovak Republic
342
2,460
Total revenue
95,136
36,359
Increase in total revenues in 2022 is mainly a result of higher electricity generation and higher electricity prices and significantly higher volume
of technology sold. Increase in revenues in 2022 from the sale of electricity is also attributable to increased production capacity due to full
year recognition of new power plants in various regions in Hungary and Australia.
11.
Other Income
In thousands of EUR
2022
2021
Miscellaneous
287
78
Grants received
234
99
Settlement agreement/insurance compensation
31
38
Covid compensation
0
203
Total Other income
552
418
Other income in miscellaneous category includes EUR 221 thousand income from other financial investment of the Group-Valuetech.
12.
Raw Materials and Consumables Used
Main expense’ classes represent material consumed and cost of goods sold.
In thousands of EUR
2022
2021
Goods (modules, invertors, etc)
-42,600
-12,463
Material consumed
-1,329
-266
Raw materials and consumables used
-43,929
-12,729
Raw materials and consumables consist mainly of material and goods used for technology sales and necessary for construction of photovoltaic
power plants. Its increase is mainly caused by higher technology sales and higher consumption of material during 2022.
Photon Energy N.V.
Financial Section
Annual Report 2022
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2022
110
13.
Solar Levy
In thousands of EUR
2022
2021
21%/11% solar levy
-1,969
-883
Solar levy
-1,969
-883
For detailed information about the solar levy refer to note 6.3. Solar levy represent 21%/11% levy imposed on the solar electricity produced in
the Czech Republic. Solar levy is calculated and settled on a monthly basis.
14.
Personnel Expenses
In thousands of EUR
2022
2021
Wages and salaries
-7,661
-5,527
Social and health insurance
-1,575
-988
Pension costs
-298
-227
Personnel expenses
-9,534
-6,742
Pension costs represent contributions to state defined pension
contributions schemes.
On 31 December 2022 the Group employed 220 employees. 4
were employed in Slovakia by Slovak entities; 17 were employed
in Hungary, 23 in Australia; 15 in Poland, 19 in Romania, 2 in Swit-
zerland and 1 in the Netherlands. The remaining 139 employees
were employed in the Czech Republic. Out of 220 employees, 2 of
them were the Board members, 26 senior and mid level manage-
ment and 192 professional and administration employees. In addi-
tion, 63 employees on employment contract and 29 employees on
different types of contract joined the group with the acquisition of
Lerta Group as of the end of the year. Those employees are mainly
employed in Poland.
On 31 December 2021 the Group employed 144 employees. 4
were employed in Slovakia by Slovak entities; 16 were employed
in Hungary, 21 in Australia; 10 in Poland, 4 in Romania, 1 in Swit-
zerland, and 1 in the Netherlands. The remaining 87 employees
were employed in the Czech Republic. Out of the 144 employees,
2 of them were the Board members, 42 senior and mid level man-
agement and 100 professional and administration employees.
Key management compensation including salaries, bonuses and
social and health insurance is disclosed in note 39 Related parties.
15.
Other Expenses
In thousands of EUR
2022
2021
3rd party services received
-5,920
-2,850
Construction subcontractors -services
-2,863
-310
Warehousing and Freight
-2,632
-259
Legal costs
-834
-426
Balancing/scheduling/service costs
-692
-336
Accounting services
-563
-482
Travel & Accommodation costs
-378
-179
Cars – fuel and maintenance
-326
-233
Audit costs
-284
-211
Projects write off
-253
-122
Miscellaneous
-1,202
-1,431
Total Other expenses
-15,947
-6,839
Miscellaneous expenses comprise of other taxes, penalties and other minor expenses.
Photon Energy N.V.
Financial Section
Annual Report 2022
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2022
111
16.
Impairment Charges
In thousands of EUR
2022
2021
Net creation of bad debt provisions
-684
-206
Write off receivables
0
-25
Total Impairment charges
-684
-231
In 2022, the Group created 100% allowance for the customer
EkoFachowcy Sp. z. o. o. in the total amount of EUR 653 thousand
because of its filing for insolvency.
The Group created specific impairment provision to receivables
from Slovak distribution companies relating to the so-called G-com-
ponent in total amount of 23 thousand (2021: EUR 227 thousand)
.
The remaining part of the bad debt provisions represents various
small irrecoverable receivable from several entities.
17.
Financial Income and Financial Expense
In thousands of EUR
2022
2021
Interest revenue calculated using the effective interest method*
162
125
Revaluation of precious metals
200
120
Financial income
362
245
Interest expense on loans & borrowings calc. using effective interest method
-9,260
-6,576
Foreign exchange gains and losses (net)
-275
-194
Financial expense
-9,535
-6,770
Gains less losses on derecognition of financial liabilities – bonds
-114
-420
Gains less losses on derecognition of financial liabilities recognised at amortised costs
-114
-420
Net result from revaluation of trading derivatives
1,027
1,730
Revaluation of derivatives
1,027
1,730
* Interest revenue calculated using the effective interest method includes interest revenue from financial assets carried at amortised costs only.
Incremental bank costs, such as arrangement and refinancing
fees, are reflected in the amortised amount of financial liabilities
using effective interest rate method.
The Group did not capitalise any borrowing costs in 2022 (2021:
EUR 171 thousand borrowing costs arising from financing directly
attributable to the construction of Leeton on Fivebough power-
plants).
Gains less losses on derecognition of financial liabilities in 2022
amounted to 114 EUR. In 2021 amount of EUR 420 thousand rep-
resent exchange bonus paid to the existing bondholders for the ex-
change of the EUR bond (see also note 31) and in 2022, exchange
bonus was equal to EUR 114 thousand.
Net result from revaluation of derivatives represent change in fair
value of derivatives for which no hedge accounting is applied (see
also note 35) of EUR 217 thousand in 2022 (2021: EUR 488 thou-
sand). These derivatives were terminated as of the end of 2022.
Change in FV of share options presented as FVPL financial assets
of EUR 558 thousand (2020: EUR 1,242 thousand) is also included
in Net result from revaluation of trading derivatives, see also note
23. Revaluation of the other investment in EUR 605 thousand is
included in Net result from revaluation of trading derivatives, see
also note 23.
Net result in revaluation of precious metals represents change in
fair value of gold held by the Group
.
Photon Energy N.V.
Financial Section
Annual Report 2022
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2022
112
18.
Income Tax Expense
18.1
Income Tax Recognized in Profit or Loss
In thousands of EUR
2022
2021
Current tax expense
Current year
-4,738
-1,438
Deferred tax expense
Deferred tax on temporary differences
2,275
932
Total tax expense
-2,463
-506
For movement in deferred tax arising on temporary difference see note 24.
18.2
Reconciliation of Effective Tax Rate
In thousands of EUR
2022
2021
Profit (+)/ Loss (-) before income tax
8,725
-5,927
Theoretical tax return / charge (25%)
-2,181
1,482
Effects of different tax rates in other countries
2,667
-356
Unrecognised tax losses of the period
-2,813
-1,426
Use of prior year losses (previously not recognised)
84
-390
Recognition of deferred tax assets previously not recognised
65
184
Permanent differences
-285
0
Total tax expense
-2,463
-506
Theoretical tax rate of 25% represent tax rate applicable to the Netherlands, which is the country of incorporation of Photon Energy NV.
The Group has accumulated tax losses for which no deferred tax asset has been recognised, see also note 24.
Photon Energy N.V.
Financial Section
Annual Report 2022
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2022
113
19.
Property, Plant and Equipment
In thousands of EUR
Land
Photovoltaic
power plant
Other
equipment
In progress
Total
Net carrying amounts
Gross revalued amount at 1 January 2021
4,473
162,341
1,192
9,697
177,703
Accumulated depreciation at 1 January 2021
0
-51,076
-297
0
-51,373
Net carrying amounts 1 January 2021
4,473
111,265
895
9,697
126,330
Other Additions/Transfers
696
14,152
436
-6,791
8,493
Revaluation increase (note 29)
0
1,181
0
0
1,181
Depreciation for the year
0
-9,178
-325
0
-9,503
Effect of movements in exchange rates
0
845
0
146
991
Net carrying amounts
Gross revalued amount at 31 December 2021
5,169
182,473
1,628
3,052
192,322
Accumulated depreciation at 31 December 2021
0
-64,208
-622
0
-64,830
Net carrying amounts 31 December 2021
5,169
118,265
1,006
3,052
127,492
Net carrying amounts 1 January 2022
5,169
118,625
1,006
3,052
127,852
Other Additions/Transfers
142
1,018
673
25,056
26,889
Acquisition of subsidiary
0
0
361
0
361
Revaluation increase (note 29)
0
475
0
0
475
Disposal of property, plant and equipment
0
0
0
0
0
Depreciation for the year
0
-7,419
-408
0
-7,827
Effect of movements in exchange rates
7
-1,736
-112
0
-1,841
Net carrying amounts
Gross revalued amount at 31 December 2022
5,318
182,230
2,550
28,108
218,206
Accumulated depreciation at 31 December 2022
0
-71,627
-1,030
0
-72,657
Net carrying amounts 31 December 2022
5,318
110,603
1,520
28,108
145,549
Non-current assets by geographical location
(i)
In thousands of EUR
2022
2021
The Czech Republic
52,055
54,276
Hungary
47,905
48,396
Romania
27,126
1,178
Poland
25,383
3,670
Australia
23,580
22,800
The Slovak Republic
11,102
12,077
Netherlands
67
66
Total
187,217
142,463
Note:
(i) Non-current assets presented consist mainly of property, plant and equipment (lands, photovoltaic power plants, other equipment,
and assets under construction), other non-current assets
.
Photon Energy N.V.
Financial Section
Annual Report 2022
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2022
114
Revaluation details by power plants:
In thousands of EUR
Photovoltaic power plants
kWp
Original costs less
accu
mulated
depreciation as at
31 December 2022
Revalued amount
less accumulated
depreciation as at
31 December 2022
Original costs less
accumulated
depreciation as at
31 December 2021
Revalued amount
less accumulated
depreciation as at
31 December 2021
Breclav
347
321
815
419
852
Mostkovice
926
713
3,016
1,072
3,151
Svatoslav
1,231
925
3,362
1,338
3,512
Slavkov
1,159
1,068
3,611
1,494
3,773
Zvikov
2,031
1,563
6,970
2,344
7,282
Dolni Dvoriste
1,645
1,371
5,212
1,969
5,445
Radvanice
2,305
1,977
7,149
2,818
7,468
Komorovice
2,354
1,887
7,703
2,749
8,047
Zdice 1
1,499
1,200
5,258
1,776
5,493
Zdice 2
1,499
1,232
4,759
1,783
4,972
Blatna
700
840
932
912
1,003
Mokra Luka II
963
1,046
1,348
1,146
1,448
Mokra Luka III
963
1,027
1,391
1,130
1,495
Jovice V
979
954
1,136
1,038
1,220
Jovice VI
979
953
1,134
1,037
1,218
Babina II
999
1,150
1,150
1,238
1,238
Babina III
999
1,156
1,157
1,245
1,245
Prsa
999
1,180
1,264
1,279
1,362
Fertod I
528
461
431
475
491
Tiszakecske
5,512
3,284
4,010
3,414
4,569
Almasfuzito
5,494
3,177
4,074
3,304
4,634
Nagyecsed
2,067
1,310
1,506
1,364
1,711
Fertod II
3,487
2,240
2,645
2,336
3,004
Kunszentmarton I
1,394
980
1,065
1,019
1,209
Taszar
2,103
1,440
1,669
1,500
1,895
Monor
5,552
3,058
4,459
3,220
5,065
Tata
5,375
4,179
4,655
4,350
5,284
Malyi
2,085
1,766
1,627
1,828
1,845
Kunszentmarton II
1,386
999
1,016
1,038
1,152
Puszpokladany
14,118
9,375
12,986
9,910
14,727
Leeton and Fivebough
14,522
11,377
15,638
11,945
16,123
Tolna 1
1,358
950
1,326
1,007
1,501
Facankert
1,358
988
1,449
0
0
88,916
66,146
115,921
73,497
123,434
Revalued amount of EUR 115,921 thousand as at 31 December
2022 (31 December 2021: EUR 123,434 thousand) includes net
carrying amount of photovoltaic power plants and value of land
connected to the photovoltaic power plants of EUR 4,889 thousand
as at 31 December 2022 (31 December 2021: EUR 5,169 thou-
sand) which are included under Land.
In 2021, due to legislative changes in Czech Republic and Slo-
vakia, the Group updated the DCF models to reflect the conditions
valid as of 1 January 2022, which resulted in net decrease of fair
value of the property, plant and equipment in Czech Republic and
Slovakia by EUR 3,509 thousand including the impact of deferred
tax (EUR 2,895 thousand excluding the impact of deferred tax, (see
note 5.1.)
During Q2 2022, the Group performed revaluation of a newly con-
nected power plant in Hungary resulting in increase of the value of
property, plant, and equipment by EUR 475 thousand including the
the impact of deferred tax (EUR 432 thousand excluding the impact
of deferred tax).
Photon Energy N.V.
Financial Section
Annual Report 2022
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2022
115
In 2022 the Group did not capitalize any borrowing cost (2021: EUR
171 thousand) into Property, plant and equipment.
Assets pledged
As at 31 December 2022 the following properties with a carrying
amount of EUR 111,149 thousand (2021: EUR 71,939 thousand)
are subject to a registered pledges to secure bank loans (see note
31
). All other restrictions and pledges, including information on re-
stricted cash accounts are included in notes 28 and 41.
►
Property, plant and equipment – Land in an amount of
EUR 611 thousand (2021: EUR 333 thousand) pledged
to UniCredit Bank Czech Republic and Slovakia a.s.,
EUR 1,094 thousand (2021: EUR 1,189 thousand) to
K&H Bank and EUR 292 thousand (2021: EUR 371) to
CIB Bank.
►
Property, plant and equipment – Photovoltaic power
plants in an amount of EUR 54,202 thousand (2021:
EUR 9,897 thousand) pledged to UniCredit Bank Czech
Republic and Slovakia a.s., EUR 23,540 thousand
(2021: EUR 26,807 thousand) pledged to K&H Bank
Hungary and EUR 15,216 thousand (2021: EUR 17,219
thousand) pledged to CIB Bank. Property, plant and
equipment – Photovoltaic power plants in an amount of
EUR 15,638 thousand (2021: EUR 16,123) were
pledged in Australia.
Property, plant and equipment under construction
Property, plant and equipment under construction equaled to the
amount of EUR 28,108 thousand (2021: EUR 3,052 thousand)
comprising mainly of power plants under construction in Hungary
and Romania (2021: Hungary and Romania).
Sale of property, plant and equipment
There were no sales of property, plant and equipment in 2022 nor
2021.
20.
Right-of-use Assets and Lease Liabilities
The Group leases land, offices and vehicles. Rental contracts are typically made for fixed periods of 36 months to 15 years.
In thousands of EUR
Land
Buildings
Vehicles
Total
Carrying amount as at 1 January 2021
1,367
905
2
2,274
Additions
0
52
0
52
Depreciation charge
-104
-473
-2
-578
Effect of translation to presentation currency
18
373
0
390
Carrying amount as at 31 December 2021
1,281
857
0
2,138
Additions
576
1,120
205
1,901
Depreciation charge
-128
-515
0
-643
Effect of translation to presentation currency
51
1
0
52
Carrying amount as at 31 December 2022
1,781
1,463
205
3,449
The Group recognised lease liabilities as follows:
In thousands of EUR
31 December 2022
31 December 2021
Short-term lease liabilities
712
597
Long-term lease liabilities
2,914
1,676
3,626
2,273
Interest expense included in financial expenses of 2022 was EUR
139 thousand (2021: EUR 65).
The value of short-term leases and leases of low-value assets in
2022 equalled to EUR 253 thousand
.
Total cash outflow for leases in 2022 was EUR 807 thousand
(2021: EUR 642 thousand).
Photon Energy N.V.
Financial Section
Annual Report 2022
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2022
116
21.
Goodwill
Goodwill in the preliminary purchase price allocation in the amount
of EUR 15,005 thousand is result of the business acquisition. The
integration of Lerta into Photon Energy Group represents the fusion
of physical and digital energy to create a customer-centric renew-
able energy utility that will be uniquely positioned to effectively ad-
dress the pain points of energy generators, energy users and
transmission system operators. Energy generators will be able to
benefit from an integrated approach to asset operation and man-
agement as well as cost-efficient market access, including balanc-
ing services. Energy users will be able to manage and optimise
their costs from a combination of on-site generation and off-site
supply. This will include the benefit of energy storage and the mon-
etisation of their demand flexibility. Transmission systems opera-
tors will be provided with flexible supply, DSR and ancillary
services to the power grid.
The impact on Photon Energy Group’s strategic and operational
priorities following the Transaction will include:
►
Capacity building and product development for the efficient
delivery of a ‘one-stop shop’ offering that combines assets,
services and IT solutions to establish Photon Energy
Group as the preferred partner for commercial and indus-
trial customers in the CEE region and Australia on their
journey from passive energy users to proactive energy flex-
umers.
►
A significant acceleration in the deployment of utility-scale
and on-site energy storage capacities both as an EPC sup-
plier as well as an investor, leveraging the Group’s experi-
ence in Australia such as the Lord Howe Island hybrid -
energy system and the planned utility-scale hybrid plant in
Boggabri, New South Wales.
Close monitoring of the emergence of markets for grid flexibility and
other ancillary services worldwide and evaluation of opportunities
as they emerge, which may lead to relatively low-risk and low-cost
market entries into new locations currently not served by the Com-
pany
.
In thousands of EUR
Note
Goodwill
Total
Carrying amount as at 31 December 2021
0
0
Additions/transfers
0
0
Acquisition of subsidiary
8
15,466
15,466
Amortisation charge
0
Effect of movements in exchange rates
0
0
Carrying amount as at 31 December 2022
15,466
15,466
Cost
15,466
15,466
Accumulated amortisation
0
0
Effect of movements in exchange rates
0
0
Carrying amount as at 31 December 2022
15,466
15,466
For the purpose of the preliminary valuation of the Lerta S.A. Group
and subsequent calculation of the goodwill, the Board of Directors
used the Discounted Cash Flow Method (the “Method”) based on
a 5-year business plan of Lerta, i.e. for years 2023-2027 and as-
suming going concern basis after the forecasting period. The valu-
ation date is 31 December 2022. The terminal value is calculated
on the assumption that the terminal free cash flow will continue to
increase at 5% p.a. Such a terminal growth rate is determined by
the current economic environment of high inflation rates and high
interest rates in the region of Central and Eastern Europe.
Following key assumptions were used for the business plan of
Lerta: Revenues were planned by service provided whereas for the
trading business the Company assumed external trading sales of
50 MW in 2023 growing to 550 MW of PV capacity in 2027. For the
trading business a gross profit margin of 2.65% in 2023 decreasing
to 2.00% in 2027 was considered. For the PV system installation
business, it was assumed to double business in the years 2023 and
2024 and continue its growth in the following years by 1.5 times per
year. The gross profit margin is expected to be around 13% during
the planning hoizont. For the dynamically growing demand re-
sponse services growth rates of 173% in 2023 and 184% in 2024
decreasing to 17% in 2027 were assumed. For these services a
gross profit margin of 35% was considered.
Operating expenses consists of mainly remuneration expenses,
external services such as legal, consulting, accounting and other
IT and administrative expenses and are expected to increase by
47% in 2023, 41% in 2024 and 11% afterwards in line with the
growing business.
The discount rate used to discount free cash flows amounted to
22.14% and was calculated using the highest discount rate of the
countries in which Lerta is operating in, e.g. Romania. The discount
rate per country was calculated by taking the risk-free interest rate
for each European market where Lerta is operating i.e. Czech Re-
public, Poland, Romania and Hungary and adding a specific mar-
ket risk premium respective for each market using the average of
beta factors for two sectors: renewable energy and construction
sectors. Additional 5% of risk premium was added to reflect the
start-up phase of Lerta’s business.
Goodwill impairment test
The preliminary total value of Lerta Group as calculated based on
the Discounted cash flow (DCF) valuation method is PLN 188.7
Photon Energy N.V.
Financial Section
Annual Report 2022
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2022
117
million (EUR 35,503 thousand). The purchase for 100% of the
shares for Lerta was agreed at PLN 99.9 million (EUR 21,484 thou-
sand) representing in a 39% discount towards the valuation based
on the DCF valuation method. The recoverable amount of goodwill
is significantly higher than the carrying amount and there was no
indication for impairment identified
.
Sensitivities in DCF
Sensitivity tests were performed to asses the impact of changes in
some key assumptions like the discount rate and the change of the
growth rate of the terminal value (TV).
The below analysis shows impact of change in the used Discount rates by +/-3% on the enterprise value in absolute and relative figures as of
31.12.2022:
In thousands of EUR
Discount rate
+3%
Discount rate
+3% in %
Discount rate
-3%
Discount rate
-3% in %
Lerta Valuation
-11,001
-27.4%
16,175
39.9%
The below analysis shows impact of change in growth rate of the terminal value by +/-3% on the enterprise value in absolute and relative
figures as of 31.12.2022:
In thousands of EUR
TV Growth rate
+3%
TV Growth rate
+3% in %
TV Growth rate
-3%
TV Growth rate
-3% in %
Lerta Valuation
7,226
17.8%
-5,073
-12.5%
Carrying value was calculated as a “value in use” based on the DCF model and key assumptions described above.
22.
Intangible Assets
In thousands of EUR
Intangible assets
in course of
development
Software
Capacity market
contracts
Total
Carrying amount as at 31 December 2020
33
1,227
0
1,260
Additions/transfers
126
0
0
126
Amortisation charge
0
-589
0
-589
Effect of movements in exchange rates
0
47
0
47
Carrying amount as at 31 December 2021
159
685
0
844
Cost
159
1,864
0
2,023
Accumulated amortisation
0
-1,179
0
-1,179
Carrying amount as at 31 December 2021
159
685
0
844
Additions/transfers
0
356
0
356
Acquisition of subsidiary
353
317
6,047
6,717
Amortisation charge
0
-479
0
-479
Effect of movements in exchange rates
0
41
0
41
Carrying amount as at 31 December 2022
512
920
6,047
7,479
Cost
512
2,537
6,047
9,096
Accumulated amortisation
0
-1,658
0
-1,658
Effect of movements in exchange rates
0
41
0
41
Carrying amount as at 31 December 2022
512
920
6,047
7,479
Intangible assets in course of development of EUR 512 thousand
at 31 December 2022 represents mainly externally developed new
software for monitoring and O&M services (Ignition Scada) and
technology for webshop, and also software internally developed by
Lerta for their internal purposes.
Capacity market contracts in the preliminary amount of EUR 6,047
thousand represent activated intangibles acquired together with
acquisition of Lerta described in note 8 Business combination and
activated based on the DCF model.
Photon Energy N.V.
Financial Section
Annual Report 2022
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2022
118
23.
Other Financial Investments
Other non-current investments include following investments:
In thousands of EUR
2022
2021
Other financial investments
Other financial assets at FVTPL
1,698
1,242
Other financial assets at FVOCI
6,118
8,494
Total non-current financial assets
7,816
9,736
The table below discloses investments in equity securities at 31 December 2022 by measurement categories and classes:
In thousands of EUR
Other financial assets
at FVTPL
Other financial assets
at FVOCI
Total
Other financial investments
Corporate shares
-
6,118
6,118
Share options
1,698
-
1,698
Total Other financial investments at 31 December 2022
1,698
6,118
7,816
The table below discloses investments in equity securities at 31 December 2021 by measurement categories and classes:
In thousands of EUR
Other financial assets
at FVTPL
Other financial assets
at FVOCI
Total
Other financial investments
Corporate shares
-
6,759
6,759
Share options
1,242
-
1,242
Shares not yet registered
-
1,735
1,735
Total Other financial investments at 31 December 2021
1,242
8,494
9,736
(a)
Other financial assets at FVOCI – Corporate shares
At 31 December 2022, the Group designated investments dis-
closed in the following table as equity securities at FVOCI. The
FVOCI designation was made because the investments are
expected to be held for strategic purposes rather than with a view
to profit on a subsequent sale, and there are no plans to dispose
of these investments in the short or medium term
.
In thousands of EUR
Fair value at
31 December 2022
Dividend income
recognised for the year
Other financial assets at FVOCI
Investment in Raygen Resources Pty Ltd ordinary shares
3,534
0
Investment in Raygen Resources Pty Ltd preference shares
1,978
0
Investment in ValueTech Fund shares
605
0
Total Other financial assets at FVOCI
6,118
0
At 31 December 2021, the Group designated investments dis-
closed in the following table as equity securities at FVOCI. The
FVOCI designation was made because the investments are
expected to be held for strategic purposes rather than with a view
to profit on a subsequent sale, and there are no plans to dispose
of these investments in the short or medium term
.
Photon Energy N.V.
Financial Section
Annual Report 2022
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2022
119
In thousands of EUR
Fair value at
31 December 2021
Dividend income
recognised for the year
Other financial assets at FVOCI
Investment in Raygen Resources Pty Ltd ordinary shares
3,434
0
Investment in Raygen Resources Pty Ltd preference shares
1,921
0
Investment in Lerta SA ordinary shares
1,404
0
Shares not yet registered (Lerta SA)
1,735
0
Total Other financial assets at FVOCI
8,494
0
At 31 December 2022 securities at FVOCI include equity securities
which are not publicly traded. Due to the nature of the local financial
markets, it is not possible to obtain current market value for these
investments. For these investments, fair value is estimated by
reference to subscription value of additional shares placed. Refer
to note 37.
Reconciliation of movements in Other financial assets at FVOCI
follows:
In thousands of EUR
Valuetech
Investment in
Raygen
Resources Pty
Ltd
Investment in
Lerta SA
Total
Other financial assets at FVOCI as at 1 January 2021
0
1,138
904
2,042
Additional investments in other financial assets at cost
0
1,897
163
2,060
Revaluation recognised in OCI (note 29)
0
2,320
337
2,657
Shares not yet registered
0
0
1,735
1,735
Other financial assets at FVOCI as at 31 December 2021
0
5,355
3.139
8,494
Revaluation recognised in OCI
605
0
0
605
Fx impact
0
158
63
221
Derecognition (change of consolidation method)
0
0
-3,202
-3,202
Other financial assets at FVOCI as at 31 December 2022
605
5,513
0
6,118
In 2022, The Group has increased its shaholding in Lerta S.A. to
85.62%. The transaction is described in detail in note 8. Due to the
change of the consolidation method, Lerta is no longer presented
in the Other investments.
At the year-end 2022, the Group has revalued its share in the Val-
uetech fund based on the equity value of the participations in the
Valuetech books. The revaluation presented in OCI equaled to
EUR 605 thousand.
During 2021 the Group acquired 127,173 preference shares of
Raygen Resources Pty Ltd and its share on equity of the entity re-
mained almost unchanged at 7.60% (2020: 7.85%). As at 31
December 2020 the investments represented 250,000 ordinary
shares of Raygen Resources Pty Ltd. Raygen is a company spe-
cialising in high-efficiency concentrated PV generation with thermal
absorption and storage.
During 2021 the Group acquired additional 214,286 shares of Lerta
SA and its share on equity of the entity remained unchanged at
12.01% (2020: 12.01%). Following the set-off of convertible loan
agreement in December 2021, the Group acquired additional
2,500,000 newly issued shares of Lerta S.A., but these were regis-
tered only after the year end, see also note 42 subsequent events.
Photon Energy N.V.
Financial Section
Annual Report 2022
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2022
120
24.
Deferred Tax Assets and Liabilities
Movement in temporary differences during the year:
In thousands of EUR
Balance as at
1 January 20
21
Recognized
in profit or loss
Recognized in
OCI of which
Fx translation
Recognized in OCI
of which DT from
revaluation
Balance as at
31 December 2021
Recognized
in profit or loss
Recognized in
OCI of which
Fx translation
Recognized in OCI
of which DT from
revaluation
Balance as at
31 December 202
2
Accumulated tax losses carried forward
0
0
0
0
0
95
0
0
95
Internal margins eliminated
0
0
0
0
0
1,506
0
0
1,506
Total recognised deferred tax asset
0
0
0
0
0
1,601
0
0
1,601
Internal margins eliminated
0
0
0
0
0
69
0
0
69
Accumulated tax losses carried forward
187
184
0
0
371
-188
0
0
183
Revaluation reserve – Derivatives
0
0
0
-211
-211
0
0
-251
-462
Intangible assets
0
0
0
0
0
0
0
-1,149
-1,149
Property, plant and equipment
-10,072
748
-485
-548
-10,359
793
-156
-44
-9,766
Net deferred tax asset/(liability)
-9,885
932
-485
-759
-10,199
2,275
-156
-1,444
-9,524
Recognised deferred tax asset
0
0
0
0
0
1,601
0
0
1,601
Recognised deferred tax liability
-9,885
932
-485
-759
-10,199
674
-156
-1,444
-11,125
Recognised deferred tax liability is arising mainly from revaluation
of property, plant and equipment. Deferred tax liability is initially
recognised against equity (revaluation reserve) upon revaluation of
PPE (see also 5.1 and 17). Corresponding release of recognised
deferred tax liability is recognised in OCI and subsequently recy-
cled to retained earnings.
Majority of deferred tax balances are expected to be recovered or
settled after more than 12 months after the reporting period and
therefore the whole deferred tax liability is presented as Non Cur-
rent Liability.
In 2022 the Group reassessed the probability of generation of suf-
ficient taxable profits prior to their expiry and recognised deferred
tax assets of EUR 278 thousand arising from part of the tax losses
carried forward that are expected to be utilised.
Recognised de-
ferred tax asset relates mainly to tax losses to be utilised in Czech
Republic, Hungary and Germany. Deferred tax liability relates to
temporary differences in PPE mainly in Czech Republic, Slovakia
and Hungary. Additionally, the Group recognised also deferred tax
asset from internal margins eliminated of EUR 1,575 thousand.
In 2022, deferred tax asset from internal margins eliminated was
created in the amount of EUR 1,601 thousand. This deferred tax
asset relates to the intercompany eliminations of margin from con-
struction of the powerplants for the group entities. On the consoli-
dated level, this margin is eliminated, but it is taxable on the local
level and the temporary difference thus creates a deferred tax as-
set.
In addition to recognised deferred tax liability, the Group also has
unrecognised deferred tax assets mainly attributable to following:
In thousands of EUR
Note
2022
2021
Unrecognised deferred tax asset resulting from:
Fair value of hedging derivatives (to be recognised against equity)
35
0
9
Provisions and other temporary differences
0
42
Accumulated tax losses
4,469
2,397
Unrecognised deferred tax asset
4,469
2,448
No deferred tax assets arising from these temporary differences
has been recognized in the financial statements as it is either not
probable that sufficient taxable profits will be generated prior to the
expiry of unused tax losses or as the Group is not able to reliably
assess the amounts and timing of future taxable profits.
The potential deferred tax assets have been calculated using the
tax rates valid in individual countries where accumulated tax losses
arise (Czech Republic, Slovakia, Germany, Netherlands, Switzer-
land, Australia, Romania and Hungary).
Photon Energy N.V.
Financial Section
Annual Report 2022
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2022
121
As of 31 December 2022 the Group has unused tax losses carry
forward of EUR 21,858 thousand for which no deferred tax assets
have been recognised. Out of these tax losses, EUR 1,369 thou-
sand expire in 2023, EUR 9,465 thousand expire in the period
2024-2026, EUR 10,000 thousand expire in the period 2027-2031
and EUR 1,024 thousand have an unlimited expiry date.
As of 31 December 2021 the Group had unused tax losses carry
forward of EUR 18,004 thousand for which no deferred tax assets
have been recognised. Out of these tax losses, EUR 914 thousand
were to expire in 2022, EUR 7,071 thousand in the period 2023-
2025, EUR 9,465 thousand in the period 2026-2030 and EUR 553
thousand had an unlimited expiry date.
25.
Inventories
In thousands of EUR
2022
2021
Goods
18,190
2,197
Spare parts
2,138
0
Inventories
20,328
2,197
Goods consist mainly of photovoltaic panels, inverters, batteries
and other system components for photovoltaic power plants.
The cost of inventories recognized as an expense in Raw materials
and consumables used during the year in respect of continuing
operations amounted to EUR 43,929 thousand (31 December
2021: EUR 12,463 thousand).
Amount of EUR 4,493 thousand of goods represents goods in
transit based on Incoterms
.
26.
Trade and Other Receivables, Loans to Related Parties
Trade and other receivables
In thousands of EUR
Note
2022
2021
Trade receivables (gross)
10,671
4,147
Other than trade receivables
1,420
1,576
Loans provided to related parties
39
2,447
1,811
Fair value of derivatives
35
5,087
2,302
Less credit loss allowance
-1,047
-391
Advances paid (deposits) – current and non current
1,322
Total financial assets with trade and other receivables
19,900
9,445
Advances paid – current and non current
5,165
1,872
VAT receivables
2,455
106
Total non-financial assets with trade and other receivables
7,620
1,978
Total trade and other receivables, loans to related parties
27,520
11,423
Trade receivables of EUR 10,671 thousand less credit loss allow-
ance of EUR 1,047 thousand (2021: EUR 4,147 thousand) include
mainly current and overdue receivables from sale of electricity,
O&M services and sales of technologies. Other than trade receiv-
ables include mainly other receivables from reinvoicing, loans pro-
vide to non-related parties and other receivables in total amount of
EUR 1,420 thousand (2021: EUR 1,576 thousand).
Current and non-current advances paid of EUR 6,487 thousand
(2021: EUR 1,872 thousand) include mainly advances paid for pur-
chase of technology and non-current advances paid by Lerta
Group for auction in amount of EUR 781 thousand and refundable
advance of Lerta Energy HU kft. of EUR 541 thousand (line ad-
vances paid-deposits current and non-current). Remaining portion
of advances presented separately in amount of EUR 5,165 thou-
sand includes paid non-current advances related to Resolar provi-
sion of EUR 542 thousand (2021: EUR 529 thousand) which will
be settled upon liquidation of panels in accordance with require-
ment of EU and Czech regulation in 2030, see also note 32, and
other current advance for goods and services of EUR 4,623 thou-
sand (2021: 1,343 thousand).
Fair value of derivatives of EUR 5,087 thousand is presented as
long-term receivable as the derivatives are related to the long-term
financing.
Receivables of EUR 1 thousand were written off during 2022 (2021:
EUR 25 thousand which were not provided for).
Loans provided to related parties represent mainly loans provided
to Solar Age Investments B.V. and other related parties that are not
eliminated in the consolidation of PENV. For more information on
related party transactions, see also note 39
.
Photon Energy N.V.
Financial Section
Annual Report 2022
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2022
122
The Group applies the IFRS 9 simplified approach to measuring
expected credit losses which uses a lifetime expected loss allow-
ance for all trade receivables, other receivables, and receivables
from related parties. To measure the expected credit losses, re-
ceivables have been grouped based on shared credit risk charac-
teristics and the days past due.
The expected loss rates are based on the payment profiles of cus-
tomers/counterparty over a period of 36 month before each bal-
ance sheet date and the corresponding historical credit losses
experienced within this period. The historical loss rates are ad-
justed to reflect current and forward-looking information on macro-
economic factors affecting the ability of the customers to settle the
receivables. The Group has identified the GDP and the
unemployment rate of the countries in which it sells its goods and
services to be the most relevant factors, and accordingly adjusts
the historical loss rates based on expected changes in these fac-
tors.
The credit loss allowance for trade receivables and other receiva-
bles is determined according to provision matrix presented in the
table below. The provision matrix is based the number of days that
an asset is past due, adjusted for forward looking information.
The credit loss allowance for Loans provided to related parties is
determined according to internal analysis of recoverability of Loans
provided to related parties, based on this analysis no ECL provi-
sions were created as at 31 December 2022 and 31 December
2021.
In thousands of EUR
31 December 2022
31 December 2021
Loss rate
Gross
carrying
amount
Lifetime
ECL
Net
carrying
value
Loss rate
Gross
carrying
amount
Lifetime
ECL
Net
carrying
value
Trade receivables
Current
0.15%
6,182
-9
6,172
0.15%
2,595
-3
2,592
Less than 30 days overdue
0.15%
3,007
-5
3,002
0.70%
988
-7
981
30 to 90 days overdue
0.20%
367
-1
366
2.00%
24
0
24
90 to 360 days overdue
1%
85
-1
84
3.00%
108
-3
105
Over 360 days overdue
100%
379
-379
0
87.00%
432
-377
55
Specific allowance
100%
653
-653
0
Total for trade receivables
10,672
-1,047
9,624
4,147
-390
3,757
Other receivables
0.05%
1,420
0
1,420
0.15%
1,577
-1
1,57
6
Total
12,092
-1,047
11,044
5,724
-391
5,723
Specific ECL for receivables overdue for more than 360 days as at 31 December 2022 was based on present value of future cash flow of
related receivables. Current receivables have increased significantly because of acquisition of Lerta as described in Note 8. Specific allowance
was created for the customer EkoFachowcy
Sp.z.o.o. because of its filing for insolvency (see also Note 16)
.
Photon Energy N.V.
Financial Section
Annual Report 2022
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2022
123
The following table explains the changes in the credit loss allowance for trade receivables under simplified ECL model between the beginning
and the end of the annual period:
In thousands of EUR
2022
2021
Allowance for credit losses on trade and other receivables as at 1 January
391
173
New originated
684
2
Released due to write off
-1
-25
Changes in estimates and assumptions
0
229
Total credit loss allowance charge in profit or loss for the period
0
206
Foreign exchange movements
-27
12
Allowance for credit losses on trade and other receivables as at 31 December
1,047
391
27.
Assets and Liabilities Arising from Contracts with Customers
The Group has recognised following assets and liabilities arising from contracts with customers:
In thousands of EUR
2022
2021
Current contract assets from contracts with customers
1,154
1,131
Loss allowance
0
0
Total current contract assets
1,154
1,131
Contract liabilities – advances from customers
592
423
Total current contract liabilities
592
423
Contract assets represents un-invoiced part of recognised revenue
based on progress towards complete satisfaction. Invoiced amount
of contract assets is reclassified to trade receivable upon its invoic-
ing.
At 31 December 2022 the most significant part of the contract asset
was represented by New Woodonga project in Australia of EUR
897 thousand and several Polish projects (2021: North East Water
project of EUR 753 thousand).
The Group applies the IFRS 9 simplified approach to measuring
expected credit losses which uses a lifetime expected loss allow-
ance for contract assets. To measure the expected credit losses,
contract assets have been grouped based on shared credit risk
characteristics and the days outstanding as unbilled. The contract
assets relate to unbilled work in progress and have substantiall
y
similar risk characteristics as the trade receivables for the same
types of contracts.
The expected loss rates are based on the past data collected over
a period of 36 month (2021: 36 months) prior to the end of the re-
porting period and the corresponding historical losses experienced
within this period. The historical loss rates are adjusted to reflect
current and forward-looking information on macroeconomic factors
affecting the ability of the customers to settle the receivables. The
Group has identified the gross domestic product and the unemploy-
ment rate of the countries in which it sells its goods and services to
be the most relevant indicators, and accordingly adjusts the histor-
ical loss rates based on expected changes in these variables.
The credit loss allowance for contract assets as at 31 December
2022 is determined according to provision matrix presented in the
table below
.
In thousands of EUR
31 December 2022
31 December 2021
Loss
rate
Gross
carrying
amount
Lifetime
ECL
Net
carrying
value
Loss
rate
Gross
carrying
amount
Lifetime
ECL
Net
carrying
value
Contract assets
Outstanding as unbilled for less than 90 days
0.05%
1,154
0
1,154
0.2%
1,131
0
1,131
Total
0.05%
1,154
0
1,154
0.2%
1,131
0
1,131
Photon Energy N.V.
Financial Section
Annual Report 2022
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2022
124
28.
Liquid Assets
For the purposes of the consolidated statement of cash flows, cash
and cash equivalents include cash on hand and at banks. Cash
and cash equivalents at the end of the reporting period as shown
in the consolidated statement of cash flows can be reconciled to
the related items in the consolidated statement of financial position
as follows
:
In thousands of EUR
2022
2021
Cash and cash equivalents
11,271
32,486
Cash with restriction on disposition
6,373
3,629
Cash on hand
0
20
Precious metals
3,714
3,227
Liquid assets
21,358
39,362
Cash with restriction on disposition includes mainly DSRA (debt
service reserve accounts) and MRA (maintenance reserve ac-
counts) for Czech, Slovak, Hungarian and Australian SPVs (2021:
without Czech SPVs) and guarantees issued.
Part of the movement on Cash with restriction on disposition re-
lated to operating activities of the Group in 2022 in amount of EUR
30 thousand (2021: EUR 79 thousand) was presented as Change
in trade and other receivables. Movement in Cash with restriction
on disposition relating to borrowings of EUR -2,785 thousand
(2021: EUR 397 thousand) was presented in Cash flows from fi-
nancing activities.
29.
Capital and Reserves
Share capital and share premium
Ordinary shares
In shares
2022
2021
On issue at 1 January
60,000,000
60,000,000
On issue at 31 December – fully paid
60,000,000
60,000,000
The Company’s issued share capital is EUR 600,000 divided into
60,000,000 shares with a nominal value of EUR 0.01 each. The
share capital is fully paid-up.
Ordinary shares
All shares rank equally with regard to the Company’s residual as-
sets.
The holders of ordinary shares are entitled to receive dividends as
declared from time to time and are entitled to one vote per share at
the shareholders’ meetings of the Company.
Treasury shares
At 31 December 2022 treasury shares included 1,332,797 ordinary
shares of the Company (2021: 3,747,635 ordinary shares) owned
directly by the Company. These ordinary shares carry no voting
rights at the Shareholders Meeting.
Share premium represents the excess of contributions received
over the nominal value of shares issued. Proceeds from allocation
of treasury shares to employees in excess to nominal value of
shares are also recorded in Share premium.
Nominal value of sold
treasury shares is recorded against Treasury shares reserve.
On 25 June 2021, the Company announced the results of an offer-
ing of its existing treasury shares addressed to qualified investors.
In total, 5 million shares were placed at a price of PLN 7.0, which
corresponds to the gross amount of PLN 35.0 million. Total pro-
ceeds of EUR 7,766 thousand from the placement net of placement
costs of EUR 442 thousand were recorded in Share premium
.
Share buy back programme
As fo 16 December 2022 the Board of Directors signed a resolution
to commence a share buy back programme starting on 19 Decem-
ber 2022 and lasting for 6 month i.e. until 19 June 2023 but no
longer than until the funds allocated by the Company for this pur-
pose are exhausted.
The amount of funds allocated for the implementation of the pro-
gramme shall not exceed PLN 3,750,000. The total number of
shares to be purchased under the programme may not exceed
250,000 shares, which constitutes 0.42% of the Company’s share
capital as of 16 December, 2022. Purchase of shares as part of the
programme may not take place at a price higher than stipulated in
General Meeting Resolution No 8 as of 31 May 2022 i.e. an aver-
age of closing prices of shares during the five trading days prior to
the date of the purchase published by the Warsaw Stoch Exchange
plus 10%, which is a maximum level approved by the Board of Di-
rectors and reviewed by the Supervisory Board. The Company
signed an agreement with the Investment Firm, who will act as a
sole broker acquiring shares in line with terms and conditions of the
programme, provided that the maximum number of Shares that
may be acquired during one trading session may not exceed 25%
of the average daily trading volume from the last 20 trading ses-
sions preceding the date of the share purchase transaction, and
the purchase of shares may not take place at a price higher than
the price of the last independent transaction or – if higher – the
highest current independent purchase offer in a trading system, in
which the purchase is made
.
Photon Energy N.V.
Financial Section
Annual Report 2022
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2022
125
During year 2022, the Company purchased 26,247 shares (0.04%
of share capital) for the total amount of 339,369.96 zl (EUR
72,643) and at the average price of 12.93 zl (EUR 2.77)
.
Movement in share capital can be analysed as follow:
In thousands of EUR
Ordinary shares
Share premium
Treasury shares
Total
At 1 January 2021
600
23,946
-87
24,459
Treasury shares allocated to employees
0
173
0
173
Treasury shares allocated to qualified investors
0
7,324
49
7,373
At 31 December 2021
600
31,443
-38
32,005
Treasury shares allocated to employees
0
151
-101
50
Other movement
0
149
0
149
Acquisition of subsidiary (note 9)
0
8,781
0
8,781
Treasury shares allocated to qualified investors
0
0
0
0
At 31 December 2022
600
40,524
-139
40,985
As of 31 December 2022 the shareholder structure was as follows:
Shareholder
No. of shares
% of capital
No. of votes at
Shareholders
Meeting
% of votes at
Shareholders
Meeting
Solar Future Cooperatief U.A.
21,775,075
36.29%
21,775,075
37.12%
Solar Power to the People Cooperatief U.A.
20,492,057
34.15%
20,492,057
34.93%
Photon Energy N.V.
1,332,797
2.22%
0
0.00%
Free float
16,400,071
27.33%
16,400,071
27.95%
Total
60,000,000
100.00%
58,667,203
100.00%
As of 31 December 2021 the shareholder structure was as follows:
Shareholder
No. of shares
% of capital
No. of votes at
Shareholders
Meeting
% of votes at
Shareholders
Meeting
Solar Future Cooperatief U.A.
21,775,075
36.29%
21,775,075
38.71%
Solar Power to the People Cooperatief U.A.
20,843,375
34.74%
20,843,375
37.05%
Photon Energy N.V.
3,747,635
6.25%
0
0.00%
Free float
13,633,915
22.72%
13,633,915
24.24%
Total
60,000,000
100.00%
56,252,365
100.00%
Mr. Michael Gartner and Mr. Georg Hotar are the only members of
the Company’s Board of Directors.
Mr. Michael Gartner indirectly owns 37.12 % of the votes, via Solar
Future Cooperative U.A. and directly 0.04% of votes at the Share-
holders Meeting. Mr. Georg Hotar indirectly owns 34.93 % of votes,
via Solar Power to the People Coöperatief U.A. and directly 0.13%
of votes at the Shareholders Meeting
.
The Free float includes shares allocated to the employee share
purchase programme and also shares allocated as purchase price
for acquisition of subsidiary as described in Note 8. The disposition
rights to these shares are limited and employees can dispose of
these shares only under specific conditions.
The other reserves relate to the legal reserve; the revaluation of
property, plant and equipment – photovoltaic power plants the
hedging reserve and the currency translation reserve. Refer below
.
In thousands of EUR
2022
2021
Legal reserve fund
13
13
Revaluation reserve
38,326
40,251
Currency translation reserve
2,363
2,021
Hedging reserve
4,355
2,039
Other capital funds
38
38
Total reserves
45,095
44,362
Photon Energy N.V.
Financial Section
Annual Report 2022
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2022
126
Legal reserve fund
The Legal reserve fund is a reserve fund previously required by the
Czech commercial law and Slovak commercial law. It has been
created from the prior years’ profit of the Czech and Slovak entities
based on the approval of the general meeting
.
The statutory reserve fund amounts to EUR 13 thousand at 31 De-
cember 2022 (2021: EUR 13 thousand).
Revaluation reserve
In thousands of EUR
Revaluation
reserve
– PPE
Revaluation reserve
– Other financial
investments
Revaluation
reserve
total
Balance as at 1 January 2021
40,680
0
40,680
Increase of revaluation reserve (note 19)
1,181
2,657
3,838
Increase of revaluation reserve – deferred tax recognised
-548
0
-548
Share on increase on revaluation of properties – JV
105
0
105
Move from revaluation reserve to retained earnings
-3,822
0
-3,822
Other movements
-2
0
-2
Balance as at 31 December 2021
37,594
2,657
40,251
Increase of revaluation reserve (note 19)
432
605
1,038
Increase of revaluation reserve – deferred tax recognised
0
0
0
Share on increase on revaluation of properties – JV
0
0
0
Move from revaluation reserve to retained earnings
-2,963
0
-2,963
Other movements
1
0
1
Balance as at 31 December 2022
35,064
3,262
38,326
The revaluation reserve arises on the revaluation of photovoltaic
power plants (PVP).
In 2022, Facankert project has been activated with the total other
comprehensive income booked in the amount of EUR 432 thou-
sand. Additionally to this, the Group has recognized and revalued
other financial investments in Valuetech fund with a total increase
in value of EUR 605 thousand.
In 2021, due to legislative changes in the Czech Republic and Slo-
vakia, the Group updated the DCF models to reflect the conditions
valid as of 1 January 2022. These changes resulted in an increase
of EUR 271 thousand of revaluation reserve for the property, plant
and equipment located in Slovakia and a decrease of revaluation
reserve for the property, plant and equipment located in Czech Re-
public by EUR 3,229 thousand (see also note 19). The Group also
recognised increase in group’s share on revaluation reserve of
property, plant and equipment for equity accounted investments in
Slovakia of EUR 105 thousand
.
In addition, the Group performed revaluation of newly connected
power plants in Australia in Q3 2021 and Hungary in Q4 2021 re-
sulting in an increase revaluation reserve of property, plant, and
equipment by EUR 3,591 thousand.
The revaluation reserve is being released to the retained earnings
during the duration of Feed-in-Tariff-currently 25 years in the Czech
Republic, 25 years in Slovakia (increased to 25 years as of 2022,
before 15 years) and up to 25 years in Hungary and up to 30 years
in Australia.
The amount equal to the amount of depreciation coming from re-
valuation recycled to retained earnings in 2022 equals to EUR
2,626 thousand (2021: EUR 3,822 thousand).
The revaluation reserve as such cannot be distributed only the
amounts released to retained earnings can be distributed to the
shareholder.
Foreign currency translation reserve
In thousands of EUR
2022
2021
Balance at beginning of year
2,021
-2,580
Foreign currency differences arising from the translation of financial statements and
foreign exchange gains or losses arising from net investments
342
4,601
Balance at end of year
2,363
2,021
The foreign currency translation reserve comprises all foreign cur-
rency differences arising from the translation of the financial state-
ments of operations using different currency from Euro. It relates to
Czech Republic, Hungary, Switzerland, Romania and Australia.
In accordance with accounting policies are foreign exchange gains
or losses arising from net investments in foreign operations also
recognized in other comprehensive income.
This reserve cannot be distributed
.
Photon Energy N.V.
Financial Section
Annual Report 2022
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2022
127
Derivatives hedging reserve
In thousands of EUR
2022
2021
Balance at beginning of year
2,039
-325
Change in fair value of hedging derivatives – fully consolidated entities (note 33)
2,310
2,348
Share on change in fair value of hedging derivatives of JV
5
17
Balance at end of year
4,355
2,039
Derivatives hedging reserve cannot be distributed
.
Other capital funds
In line with the acquisition of treasury shares free of charge in 2013
the Company recognised Other capital funds of EUR 100 thou-
sand. Nominal value of sold treasury shares is recorded against
Other capital funds
.
Dividends
There were no dividends declared and paid by the Company in
2022 and 2021.
30.
Earnings Per Share
In EUR
2022
2021
Basic earnings per share
0.111
-0.118
Diluted earnings per share
0.105
-0.107
Total comprehensive income per share
Basic TCI per share
0.135
0.039
Diluted TCI per share
0.128
0.035
Basic and diluted earnings per share
The calculation of basic earnings per share at 31 December 2022
was based on the profit attributable to ordinary shareholders of
EUR 6,309 thousand (2021: loss EUR -6,404 thousand) and a
weighted average number of ordinary shares outstanding of 56,608
thousand (2021: 54,359 thousand).
Share on profit of equity-accounted investees amounted to EUR
127 thousand (2021: EUR 141 thousand).
Basic and diluted total comprehensive income per
share
The calculation of total comprehensive earnings per share and di-
luted total comprehensive earnings per share at 31 December
2022 and 2021 was based on the total comprehensive income of
EUR 7,672 thousand (2021: EUR 2,095 thousand) attributable to
ordinary shareholders and a weighted average number of ordinary
shares outstanding of 56,608 thousand (2021: of 54,359 thou-
sand)
.
Weighted average number of ordinary shares
There were no new shares issued in 2022 nor 2021. The number
of shares at the year-end 2022 and 2021 was 60,000,000
.
Photon Energy N.V.
Financial Section
Annual Report 2022
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2022
128
31.
Loans and Borrowings
This note provides information about the contractual terms of the Group’s interest-bearing loans and borrowings, which are measured at
amortised cost.
In thousands of EUR
2022
2021
Non-current liabilities
Issued bonds
76,511
57,223
Long-term secured bank loans
58,446
41,106
Long term lease liability
2,914
1,676
Long-term portion of other loans
230
373
Total
138,101
100,378
Current liabilities
Issued bonds
3,670
24,107
Current portion of long-term secured bank loans, including accrued interest
7,259
4,354
Short-term lease liability
712
597
Total
11,641
29,058
Total loans & borrowings
149,742
129,436
Reconciliation of liabilities arising from financing activities
The table below sets out an analysis of liabilities from financing activities and the movements in the Group’s liabilities from financing activities
for each of the periods presented. The items of these liabilities are those that are reported as financing in the statement of cash flows:
In thousands of EUR
Borrowings
Issued
bonds
Lease
liabilities
Other
lia
bilities from
financing
activities
Total
Liabilities from financing activities at 1 January 2021
50,151
46,739
2,405
401
99,696
Cash flows
Loan drawdowns / New issues of bonds
15,416
56,092
0
0
71,508
Placement costs paid
0
-782
0
0
-782
Repayments of principal
-19,898
-21,281
-577
0
-41,756
Interest payments
-2,224
-3,751
-65
-36
-6,076
Capitalized interest
-171
0
0
0
-171
Non-cash changes
Interest expense, including capitalized interest
2,395
4,251
65
36
6,747
Other non-cash movements
0
0
52
0
52
Foreign exchange adjustments
-209
62
393
-28
218
Liabilities from financing activities at 31 December 2021
45,460
81,330
2,273
373
129,436
Cash flows
Loan drawdowns / New issues of bond
29,086
22,500
0
0
51,586
Placement costs paid
0
-331
0
0
-331
Repayments of principal
-6,649
-23,719
-668
-102
-31,138
Interest payments
-2,244
-5,898
-139
0
-8,281
Non-cash changes
0
Interest expense, including capitalized interest
2,710
6,213
139
0
9,062
Other non-cash movements
0
0
1,901
0
1,901
Foreign exchange adjustments
-2,658
86
120
-41
-2,493
Liabilities from financing activities at 31 December 2022
65,705
80,181
3,626
230
149,742
Photon Energy N.V.
Financial Section
Annual Report 2022
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2022
129
Terms and debt repayment schedule
Terms and conditions of outstanding loans were as follows:
In thousands of EUR
Currency
Nominal
interest rate
Year of
maturity
31 December 2022
31 December 2021
Credit limit
Utilised
Credit limit
Utilised
Secured bank loan
(Unicredit)
CZK
3M PRIBOR +
1.9%
31.12.2029
18,701
18,701
0
0
Secured bank loan
(Unicredit)
EUR
3M EURIBOR +
2.35%
31.12.2025
9,017
9,017
0
0
Secured bank loan
(Unicredit)
EUR
3M EURIBOR +
1.55%
30.6.2025 –
30.9.2027
3,763
3,763
0
0
Secured bank loan
(Unicredit)
EUR
3M EURIBOR +
2.7–3.1%
28.6.2024
0
0
2,220
2,220
Secured bank loan
(Unicredit)
EUR
3M EURIBOR +
2.7–2.9%
31.12.2024
0
0
2,538
2,538
Secured bank loan
(K&H)
HUF
3M BUBOR +
2.2–2.5%
28.6.2034
31.3.2035
11,779
11,779
22,643
21,629
Secured bank loan
(K&H)
EUR
3M EURIBOR +
2.5-2.8%
28.6.2034
31.3.2025
7,882
7,882
0
0
Secured bank loan
(CIB)
HUF
3M BUBOR +
2.5%
31.12.2035
5,386
5,386
14,415
14,415
Secured bank loan
(CIB)
EUR
3M EURIBOR +
2.75%
30.6.2032
4,384
4,384
0
0
Secured bank loan
(Infradebt)
AUD
3M BBSW (min
0,5%)+2,35-3,25%
31.12.2025
4,295
4,295
4,618
4,618
Accrued fees and
interest
0
498
0
40
Total interest bearing liabilities
65,207
65,705
46,434
45,460
The exposure of the Group’s borrowings to interest rate changes
and the contractual re-pricing dates at the end of the reporting pe-
riod are disclosed in note 36.
All secured bank loans are pledged by SPVs’ assets of power
plants including real estate if any and technology receivables gen-
erated by power plants. In case of secured bank loans all power
plants are cross-collateralized within the financing banks, see also
note 19.
In June 2022, Photon Energy prolonged its non-recourse project
financing of its power plants in Slovakia with UniCredit Bank Czech
Republic and Slovakia a.s.. The loan amounts was kept un-
changed, only the repayment schedules were prolonged on aver-
age by 22 month in line with the lowered and prolonged feed-in-
tarrif.
In August 2022, Photon Energy switched the unhedged part of its
HUF financing with CIB Bank, a subsidiary of Italian Intesa
Sanpaolo Group and the second largest commercial bank in Hun-
gary, to EUR. The switched amount was EUR 4,497 thousand.
In September 2022, Photon Energy switched the unhedged part of
its HUF financing with K&H bank, the Hungarian subsidiary of Bel-
gian KBC Group N.V. and one of Hungary’s largest banking and
financial services firms to EUR. The switched amount was EUR
6,876 thousand. In addition Photon Energy has drawn down the
available frame of HUF 409 million in EUR representing an addi-
tional EUR 1,006 thousand
.
In October 2022, Photon Energy secured non-recourse project fi-
nancing for nine of its power plants with 14.6 MWp in the Czech
Republic with UniCredit Bank Czech Republic and Slovakia a.s..
The financing, which totals EUR 28.1 million, is split into financing
in Euros for EUR 9.7 million and in Czech crowns for CZK 451 mil-
lion (EUR 18.4 million). The facilities are being provided for a period
of up to 7 years and 3 months, ie. Until 31 December 2029.
During 2021, Photon Energy did not secure any additional bank
financing.
Compliance with Covenants
The Group is subject to certain covenants related primarily to its
borrowings. Non-compliance with such covenants may result in
negative consequences for the Group including growth in the cost
of borrowings and declaration of default.
The Group was substantially in compliance with all financial cove-
nants set by the lenders as of 31 December 2022 except for debt
service cover ratio with one of the lenders. This does not represent
an event of default under the borrowings or permit the lender to
immediately recall borrowings but may require remediating actions
in the form of mandatory prepayment (cash sweep) with value of
EUR 11 thousand as of 31 December 2022. The Group was in
compliance with all covenants of 31 December 2021.
Photon Energy N.V.
Financial Section
Annual Report 2022
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2022
130
Issued bonds
In thousands of EUR
Amortised amount
Fair value
2022
2021
2022
2021
Current liabilities
EUR bond 2017/22
0
23,735
0
24,350
CZK bond 2016/23
3,146
0
3,127
0
Green bond 2021/27
524
0
0
0
Non-current liabilities
Green bond 2021/27
76,511
54,602
70,284
57,201
EUR bond 2017/22
0
0
0
0
CZK bond 2016/23
0
2,993
0
2,832
Total
80,181
81,330
73,411
84,383
In November 2021, the Group has issued an EUR green bond with
annual coupon of 6.50% and maturity in November 2027 (six-year
maturity). The EUR green bond 2021/27 was offered to bondhold-
ers of the existing 2017/2022 EUR bond in form of an exchange
offer and as a result, EUR 21,281 thousand were exchanged. The
principal amount of EUR 50,000 thousand was oversubscribed and
the overall volume of the new green bond was increased to EUR
55,000 thousand. Total amount of placement costs paid for the is-
suance/exchange of the Green bond amounted to EUR 1,202 thou-
sand. Exchange bonus paid to existing bondholder of EUR 420
thousand was recognised in Gains less losses on derecognition of
financial liabilities while the remaining amount of EUR 782 thou-
sand is included in the amortised amount of the Issued bonds and
will be recognised as interest expense from Issued bonds using
effective interest rate.
The EUR green bonds 2021/27 are traded on the unregulated mar-
ket segments of the Stock Exchanges in Frankfurt, Berlin, Ham-
burg, Hannover, Munich, Düsseldorf and Stuttgart. The net
proceeds of the transaction are allowed to be used only for financ-
ing and expanding eligible assets in accordance with its Green Fi-
nancing Framework.
In October 2017, the Group had issued EUR bonds with an annual
coupon of 7.75% and maturity in October 2022. The outstanding
nominal amount as of 31 December 2021 was EUR 24,419 thou-
sand, being due for repayment in October 2022, and was pre-
sented in Current liabilities.
The EUR bonds 2017/22 were traded on the unregulated market
segments of the Stock Exchanges in Frankfurt, Berlin, Hamburg,
Hannover, Munich, Düsseldorf and Stuttgart as well.
In May 2022, the Company tapped its EUR green bond 2021/27 in
the amount of EUR 10,000 thousand to a total outstanding amount
of EUR 65 million. In October 2022 and November 2022, the Com-
pany tapped the bond in the amount of another EUR 12,500 thou-
sand to a total outstanding amount of EUR 77,500 thousand.
The bonds from the second tap in autumn, were also offered to
bondholders of the existing 2017/2022 corporate bonds in form of
an exchange offer with a 1.5% loyalty premium plus the difference
in net accrued interest on each exchanged bond. After the ex-
change the outstanding volume of the corporate EUR bond
2017/22 was EUR 15.232 million and was fully repaid together with
the final interest payment to the bondholders on 27 October 2022.
Total amount of placement costs paid for the tapping/exchange of
the Green bond amounted to EUR 451 thousand. Exchange bonus
paid to existing bondholder of EUR 114 thousand was recognised
in Gains less losses on derecognition of financial liabilities while
the remaining amount of EUR 337 thousand is included in the
amortised amount of the Issued bonds and will be recognised as
interest expense from Issued bonds using effective interest rate.
CZK bond 2016/23 issued in October 2016 has an annual coupon
of 6%, with an outstanding nominal amount of EUR 3,146 thousand
as of 31 December 2022 (2021: EUR 3,052 thousand) which is due
in December 2023 and has been presented in Current liabilities.
CZK bonds 2016/23 are traded on the unregulated market segment
of the Prague Stock Exchange.
Accrued interest of EUR 524 thousand at 31 December 2022 for
EUR Green bond (2021: EUR 372 thousand) is presented within
current liabilities.
The fair values are based on cash flows discounted using a rate
based on the borrowing rate of 6,78% (applicable credit spread) +
risk free rate for relevant currency (2021: 6,78%) and are within
level 2 of the fair value hierarchy.
Other long-term financing
Other long-term financing of EUR 230 thousand (2021: EUR 373
thousand) that includes mainly consumer loans received for car fi-
nancing and other long-term liabilities.
Photon Energy N.V.
Financial Section
Annual Report 2022
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2022
131
32.
Provisions
Movements in provisions for liabilities and charges are as follows:
In thousands of EUR
2022
2021
Carrying amount as at 1 January
545
520
Foreign exchange impact
21
25
Carrying amount as at 31 December
566
545
Provision for liabilities and charges includes provision for ecologi-
cal liquidation and recycling of solar panels created in accordance
with European directive and Czech legislation. For all solar panels
purchased before 2013, all responsibilities connected to recycling
of solar panels are with the PVP operators. In accordance with the
legislation, the Group paid contribution to the selected provider
responsible for liquidation of solar panels of EUR 566 thousand
(2021: EUR 545 thousand), paid contributions are presented as
non-current advances paid in Other receivables – non-current, see
note 26.
There are no similar obligations connected to the liquida-
tion of solar panels in Slovakia, Hungary nor Australia.
33.
Trade and Other Payables
In thousands of EUR
Note
2022
2021
Trade payables
11,988
2,275
Other payables
4,349
1,023
Total financial liabilities with trade and other payables
16,337
3,298
Payables to employees
1,292
552
Other liabilities
969
626
Total non-financial liabilities with trade and other payables
2,261
1,178
Total trade and other payables
18,598
4,476
Trade payables of EUR 11,988 thousand (2021: EUR 2,275 thou-
sand) include mainly regular trade payables and payables for sup-
ply of goods and services to the Group. Other payables of EUR
4,349 thousand include accrued liabilities mainly related to the de-
livery of goods in transit
.
34.
Current Income Tax Receivables / Current Tax Liability
Current income tax payables of EUR 2,708 thousand (2021: receiv-
able EUR 303 thousand) represent tax liability for profitable entities
(mainly SK, CZ, HU SPVs and few operating Romanian and Hun-
garian entities decreased by tax advances for income tax paid
mainly in Hungary, Czech Republic, Romania and Slovakia
.
Photon Energy N.V.
Financial Section
Annual Report 2022
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2022
132
35.
Derivative Financial Instruments
In thousands of EUR
31 December 2022
31 December 2021
Contracts with
positive fair value
Contracts with
negative fair value
Contracts with
positive fair value
Contracts with
negative fair value
Interest rate swaps, fair values,
at the end of reporting period
Trading derivatives
217
0
0
0
Hedging derivatives
4,981
-106
2,351
-49
Value of interest rate swaps
5,198
-106
2,351
-49
Net value of interest rate swaps
5,092
-106
2,302
0
Other Derivative Financial
Instruments
Shares options (note 23)
1,699
0
1,242
0
Net Value of Other Derivative
Financial Instruments
1,699
0
1,242
0
Interest rate swaps are derivative financial instruments entered into
by the Group are generally concluded with financing banks on
standardised contractual terms and conditions. Derivatives have
potentially favourable (assets) or unfavourable (liabilities) condi-
tions as a result of fluctuations in market interest rates, foreign ex-
change rates or other variables relative to their terms. The
aggregate fair values of derivative financial assets and liabilities
can fluctuate significantly from time to time.
In accordance with accounting policies described in note 4.3.3,
changes in fair value of derivatives for which no hedge accounting
is in place are recognized in profit and loss, changes in fair value
of hedging derivatives are recognized in other comprehensive in-
come.
The Company determines whether an economic relationship exists
between the cash flows of the hedged item and hedging instrument
based on an evaluation of the qualitative characteristics of these
items. The company considers whether the critical terms of the
hedged item and hedging instrument closely align when assessing
the presence of an economic relationship. The Company evaluates
whether both hedging instrument and hedged items are concluded
in the same currency and, therefore, are subject to the same risk,
whether the nominal amount of the hedging instrument and hedged
items are identical and whether the maturity dates are identical.
36.
Financial Risk Management
The major financial risks faced by the Company are those related
to credit exposures, exchange rate and interest rate. The primary
function of financial risk management is to establish risk limits and
to ensure that any exposure to risk stays within these limits. These
risks are managed in the following manner.
36.1
Liquidity Risk
Liquidity risk is the risk that the Company will not be able to meet
its financial obligations as they fall due. The Group’s approach to
managing liquidity is to ensure, as far as possible, that it will always
have sufficient liquidity to meet its liabilities when due, under both
normal and stressed conditions, without incurring unacceptable
losses or risking damage to the Company’s reputation.
The table below shows liabilities at 31 December 2022 and 31 De-
cember 2021 by their remaining contractual maturity. The amounts
disclosed in the maturity table are the contractual undiscounted
cash flows. Such undiscounted cash flows differ from the amount
included in the statement of financial position because the state-
ment of financial position amount is based on discounted cash
flows. Financial derivatives are settled on net basis. Foreign cur-
rency payments are translated using the spot exchange rate at the
end of the reporting period
.
31 December 2022
In thousands of EUR
Carrying
amount
1 – 12
months
1 – 2 years
2 – 5 years
More than
5 years
Contractual
cash flows
Financial liabilities
Secured bank loans
65,705
12,789
12,157
37,027
39,987
101,960
Derivatives
-5,092
-2,394
-2,380
-5,592
-1,850
-12,216
Bonds
80,181
8,341
5,038
92,613
0
105,991
Lease liability
3,626
865
731
1,236
1,912
4,744
Other L-T loans
230
0
230
0
0
230
Trade and other payables
16,337
16,337
0
0
0
16,337
Total future payments, including
future principal and interest payments
160,987
35,938
15,776
125,284
40,049
217,046
Photon Energy N.V.
Financial Section
Annual Report 2022
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2022
133
31 December 2021
In thousands of EUR
Carrying
amount
1 – 12
months
1 – 2 years
2 – 5 years
More than
5 years
Contractual
cash flows
Financial liabilities
Secured bank loans
45,460
6,282
6,163
16,532
30,452
59,429
Bonds
81,330
29,315
6,780
10,725
58,575
105,395
Lease liability
2,273
593
345
712
913
2,563
Other LT loans
373
249
124
0
0
373
Trade and other payables
3,298
3,298
0
0
0
3,298
Total future payments, including
future principal and interest payments
132,734
39,737
13,412
27,970
89,940
171,058
It is not expected that the cash flows included in the maturity analysis could occur significantly earlier, or at significantly different amounts
.
36.2
Credit Risk
Exposure to Credit Risk
Credit risk is the risk that counterparty fails to discharge an obliga-
tion to the Group.
The Group’s maximum exposure to credit risk is reflected in the
carrying amounts of financial assets in the consolidated statement
of financial position.
Credit risk in respect of cash balances held with banks and depos-
its with banks are managed via diversifications of bank deposits
and only with the major reputable financial institutions with rating
by S&P between A- and BBB+.
IFRS 9 allows entities to apply a ‘simplified approach’ for trade re-
ceivables and contract assets. The simplified approach allows en-
tities to recognise lifetime expected losses on all these assets
without the need to identify significant increases in credit risk.
For trade and other receivables, receivables from related and con-
tract assets that do not contain a significant financing component,
the Group recognises a lifetime expected loss allowance.
The Group applies a provision matrix that applies the relevant loss
rates to the trade receivable balances. See also note 26 for more
.
36.3
Interest Rate Risk
The Group takes on exposure to the effects of fluctuations in the
prevailing levels of market interest rates on its financial position and
cash flows. Interest margins may increase as a result of such
changes, but may reduce or create losses in the event that unex-
pected movements arise. Management monitors on a daily basis
and sets limits on the level of mismatch of interest rate repricing
that may be undertaken
.
The table below summarises the Group’s exposure to Interest rate
risks. The table presents the aggregated amounts of the Group’s
financial assets and liabilities at carrying amounts, categorised by
the earlier of contractual interest repricing or maturity dates. In re-
spect of interest-bearing financial liabilities, the following table indi-
cates their effective interest rates at the balance sheet date and
also due date of loans based on the valid repayment schedules
.
In thousands of EUR
Demand and
less than
1 month
From 1 to
6 months
From 6 to
12 months
More than
1 year
Not specified
Total
31 December 2022
Total financial assets
35,390
0
0
5,868
7,816
49,074
Total financial liabilities
16,344
65,737
3,184
77,188
3,626
166,079
Net interest sensitivity gap at
31 December 2022
19,046
-65,737
-3,184
-71,320
4,190
-117,005
31 December 2021
Total financial assets
48,807
0
0
0
9,736
58,543
Total financial liabilities
3,308
45,512
24,169
57,472
2,273
132,734
Net interest sensitivity gap at
31 December 2021
45,499
-45,512
-24,169
-57,472
7,463
-74,191
Photon Energy N.V.
Financial Section
Annual Report 2022
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2022
134
Actual interest expense related to bank loans and borrowings in-
curred by the Company in 2022 was EUR 2,706 thousand (2020:
EUR 2,224 thousand) related to the loans drawn in the amount of
EUR 65,705 thousand (31 December 2021: EUR 45,460 thou-
sand).
Information on variable interest rates for all bank loans re-
ceived is included in note 31.
At 31 December 2022, if interest rates at that date had been 100
basis points lower (2021: 100 basis points lower) with all other var-
iables held constant, profit for the year would have been EUR 657
thousand (2021: EUR 455 thousand) higher, mainly as a result of
lower interest expense on variable interest liabilities.
If interest rates had been 100 basis points higher (2021: 100 basis
points higher), with all other variables held constant, profit would
have been EUR 657 thousand (2021: EUR 455 thousand) lower,
mainly as a result of higher interest expense on variable interest
liabilities.
Bonds issued bear fixed interest rate risk and therefore are not sub-
ject to interest rate risk
.
36.4
Currency Risk
The Company’s functional currency of its major subsidiaries is
EUR, CZK, AUD, RON and HUF. Foreign exchange risk is associ-
ated with sales and purchases of goods and services and loans
received denominated in local currencies.
The table below summarises the Group’s exposure to foreign cur-
rency exchange rate risk at the end of the reporting period
:
In thousands
of EUR
At 31 December 2022
At 31 December 2021
Monetary
financial
assets
Monetary
financial
liabilities
Derivatives
Net
position
Monetary
financial
assets
Monetary
financial
liabilities
Derivatives
Net
position
EUR
10,264
-108,507
-106
-98,349
32,865
-85,897
-49
-53,081
CZK
3,480
-24,647
66
-21,101
3,607
-3,942
0
-335
HUF
14,388
-20,418
5,126
-904
4,418
-37,032
2,351
-30,263
AUD
11,411
-7,063
0
4,348
11,765
-5,442
0
6,323
CHF
21
0
0
21
27
0
0
27
PLN
3,393
-2,723
0
670
3,261
0
0
3,261
RON
719
-2,723
0
-2,004
0
0
0
0
Other
313
0
0
313
30
0
0
30
Total
43,989
-166,081
5,086
-117,006
55,973
-132,313
2,302
-74,038
Derivatives presented above are monetary financial assets or mon-
etary financial liabilities, but are presented separately in order to
show the Group’s gross exposure. The Group has only interest rate
derivatives, there are no FX derivatives.
The above analysis includes only monetary assets and liabilities.
Investments in equities and non-monetary assets are not consid-
ered to give rise to any material currency risk
.
The following table presents sensitivities of profit or loss and equity
to reasonably possible changes in exchange rates applied at the
end of the reporting period relative to the functional currency of the
respective Group entities, with all other variables held constant:
In thousands of EUR
At 31 December 2022
At 31 December 2021
Impact on profit
or loss
Impact on equity
Impact on profit
or loss
Impact on equity
EUR strengthening by 10%
(2021: strengthening by 10%)
0
0
0
0
CZK strengthening by 10%
(2021: strengthening by 10%)
1,924
-6
47
0
HUF strengthening by 10%
(2021: strengthening by 10%)
548
-466
2,965
-214
AUD strengthening by 10%
(2021: strengthening by 10%)
-395
0
-678
0
PLN strengthening by 10%
(2021: strengthening by 10%)
-61
0
-296
0
RON strengthening by 10%
(2021: strengthening by 10%)
182
0
0
0
Total
2,198
-472
2,038
-214
Photon Energy N.V.
Financial Section
Annual Report 2022
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2022
135
37.
Fair Value Disclosures
Fair value measurements are analysed by level in the fair value
hierarchy as follows:
►
Level 1
are measurements at quoted prices (unad-
justed) in active markets for identical assets or liabilities,
►
Level 2
measurements are valuations techniques with
all material inputs observable for the asset or liability, ei-
ther directly (that is, as prices) or indirectly (that is, de-
rived from prices), and
►
Level 3
measurements are valuations not based on ob-
servable market data (that is, unobservable inputs).
Management applies judgement in categorized financial
instruments using the fair value hierarchy. If a fair value
measurement uses observable inputs that require signif-
icant adjustment, that measurement is a Level 3 meas-
urement. The significance of a valuation input is
assessed against the fair value measurement in its en-
tirety.
The fair values of financial assets and liabilities together with the
carrying amounts shown in the statement of financial position are
as follows. For the other financial assets/financial liabilities, the fair
value approximates the carrying amount
.
37.1
Recurring Fair Value Measurements
Recurring fair value measurements are those that the accounting standards require or permit in the statement of financial position at the end
of each reporting period. The level in the fair value hierarchy into which the recurring fair value measurements are categorized are as follows:
In thousands of EUR
2022
2021
Level 1
Level 2
Level 3
Total
Level 1
Level 2
Level 3
Total
Financial assets
Precious metals
3,714
0
0
3,714
3,227
0
0
3,227
Derivatives
5,087
0
5,087
0
2,302
0
2,302
Other financial investments
0
0
7,816
7,816
0
0
9,736
9,736
Non financial assets
Property, plant and equipment
0
0
115,921
115,921
0
0
123,434
123,434
Total assets recurring FV
measurement at 31 December
3,714
5,087
123,737
132,538
3,227
2,302
133,170
138,699
Financial liabilities
Derivatives
0
0
0
0
0
0
0
0
Total assets recurring FV
measurement at 31 December
0
0
0
0
0
0
0
0
The valuation technique, inputs used in the fair value measurement for level 3 measurements and related sensitivity to reasonably possible
changes in those inputs are as follows:
31 December 2022:
In thousands of EUR
Fair value
Valuation
technique
Inputs
used
Range of
inputs
Reasonable
change
Sensitivity of FV
measurement
Non financial assets
Property, plant and equipment
115,921
DCF
note 5.1
See below
See below
See below
Other financial investments
7,816
MtM
note 5.3
See below
See below
See below
Total assets recurring FV
measurement at 31 December
123,737
31 December 2021:
In thousands of EUR
Fair value
Valuation
technique
Inputs
used
Range of
inputs
Reasonable
change
Sensitivity of FV
measurement
Non financial assets
Property, plant and equipment
123,434
DCF
note 5.1
See below
See below
See below
Other financial investments
9,736
MtM
note 5.3
See below
See below
See below
Total assets recurring FV
measurement at 31 December
133,170
Photon Energy N.V.
Financial Section
Annual Report 2022
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2022
136
The DCF Equity valuation method is based on a Discounted Cash
Flow method. It includes the future cash flows available to the
shareholders/providers of equity of photovoltaic projects (i.e. after
all debt repayments and interests) that are later discounted by rel-
evant discount rates (Levered Cost of Equity). The risk profile is
represented by a discount rate (Levered Cost of Equity). Due to
existence of senior project finance the cost of equity calculated by
CAPM formula is adjusted by Miller-Modigliani formula to achieve
the most precise cost of equity levered for each project respecting
it unique capital structure.
In the valuation model, a quarterly discount is applied. This is
based on the fact that debt repayments are happening on quarterly
basis. This is effecting the overall change in financing structure and
indirectly affecting cost of equity levered.
The used Levered Cost of Equity rates to discount estimated cash
flows, vary between countries from 9% to 26% for 2022 (2021: 5%
to 13%).
Other financial investments are stated at its fair value based on
valuation models prepared by management. Other financial invest-
ments include primarily ordinary and preference shares and related
share options held (see also note 23).
The principal assumptions,
in addition to the market price of the shares, are probability of the
realisation of the share options granted and discount rate reflecting
required return on investment on this type of the Group’s invest-
ments
.
Sensitivity analysis of DCF for power plants – change in Levered Cost of Equity
The below analysis shows impact of change in the used Levered Cost of Equity rates by +/-3% on the enterprise/entity value in absolute and
relative figures as of 31.12.2022:
In thousands of EUR
Discount rate
+3%
Discount rate
+3% in %
Discount rate
-3%
Discount rate
-3% in %
HU power plants
-2,515
-5.2%
3,490
7.2%
CZ power plants
-2,197
-5.0%
2,778
6.3%
SK power plants
-1,043
-8.8%
1,313
11.1%
AU power plants
-2,087
-13.8%
3,252
21.6%
The below analysis shows impact of change in the used Levered Cost of Equity rates by +/-3% on the enterprise/entity value in absolute and
relative figures as of 31.12.2021:
In thousands of EUR
Discount rate
+3%
Discount rate
+3% in %
Discount rate
-3%
Discount rate
-3% in %
HU power plants
-3,221
-6.4%
5,240
10.5%
CZ power plants
-5,789
-12.1%
7,109
14.9%
SK power plants
-1,591
-10.7%
2,022
13.6%
AU power plants
-3,109
-19.9%
5,226
33.5%
Sensitivity analysis of DCF for power plants – change in production output
The below analysis shows impact of change in production output by +/-2% on the enterprise/entity value in absolute and relative figures as of
31.12.2022:
In thousands of EUR
Production
+2%
Production
+2% in %
Production
-2%
Production
-2% in %
HU power plants
745
1.5%
-748
-1.5%
CZ power plants
809
1.8%
-808
-1.8%
SK power plants
196
2.3%
-196
-2.3%
AU power plants
308
2.0%
-308
-2.0%
The below analysis shows impact of change in production output by +/-2% on the enterprise/entity value in absolute and relative figures as of
31.12.2021:
In thousands of EUR
Production
+2%
Production
+2% in %
Production
-2%
Production
-2% in %
HU power plants
852
1.7%
-863
-1.7%
CZ power plants
910
1.9%
-910
-1.9%
SK power plants
361
2.4%
-361
-2.4%
AU power plants
316
2.0%
-316
-2.0%
Photon Energy N.V.
Financial Section
Annual Report 2022
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2022
137
Sensitivity analysis of DCF for power plants – change in electricity and LGC prices
The below analysis shows impact of change in electricity prices by +/-10% on the enterprise/entity value for selected power plants in absolute
and relative figures as of 31.12.2022:
In thousands of EUR
Electricity prices
+10%
Electricity prices
+10% in %
Electricity prices
-10%
Electricity prices
-10% in %
HU power plants–- FIT
19
1.6%
-19
-1.6%
HU power plants–- Merchant
2,845
6.5%
-2,768
-6.3%
AU power plants–- prices
944
6.3%
-944
-6.3%
AU power plants–- LGCs
228
1.5%
-228
-1.5%
The below analysis shows impact of change in electricity prices by +/-10% on the enterprise/entity value for selected power plants in absolute
and relative figures as of 31.12.2021:
In thousands of EUR
Electricity prices
+10%
Electricity prices
+10% in %
Electricity prices
-10%
Electricity prices
-10% in %
HU power plants–- FIT
320
0.7%
-318
-0.7%
HU power plants–- Merchant
175
11.4%
-175
-11.4%
AU power plants–- prices
1,332
8.5%
-1,332
-8.5%
AU power plants–- LGCs
253
1.6%
-253
-1.6%
Sensitivity analysis of MtM of other financial investments – changes in significant estimates
The below analysis shows impact of change in significant estimates on the MtM value in absolute and relative figures as of 31.12.2022:
In thousands of EUR
Market price of
the share
+10%
Market price of
the share
+10% in %
Market price of
the share
-10%
Market price of
the share
-10% in %
Investment in Raygen Resources Pty Ltd
548
7.6%
-548
-7.6%
In thousands of EUR
Discount rate
+3%
Discount rate
+3% in %
Discount rate
-3%
Discount rate
-3% in %
Investment in Raygen Resources Pty Ltd
-66
-0.9%
71
+1.0%
In thousands of EUR
Probability
+10%
Probability
+10% in %
Probability
-10%
Probability
-10% in %
Investment in Raygen Resources Pty ltd
255
3.6%
-255
-3.6%
The below analysis shows impact of change in significant estimates on the MtM value in absolute and relative figures as of 31.12.2021:
In thousands of EUR
Market price of
the share
+10%
Market price of
the share
+10% in %
Market price of
the share
-10%
Market price of
the share
-10% in %
Investment in Lerta SA
314
10,0%
- 314
-10,0%
Investment in Raygen Resources Pty Ltd
547
8,3%
- 920
-13,9%
In thousands of EUR
Discount rate
+3%
Discount rate
+3% in %
Discount rate
-3%
Discount rate
-3% in %
Investment in Raygen Resources Pty Ltd
- 125
-1,9%
143
2,2%
In thousands of EUR
Probability
+10%
Probability
+10% in %
Probability
-10%
Probability
-10% in %
Investment in Raygen Resources Pty ltd
186
2,8%
-186
-2,8%
Photon Energy N.V.
Financial Section
Annual Report 2022
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2022
138
37.2
Assets and Liabilities Not Measured at Fair Value but for Which Fair Value is Disclosed
Fair values analysed by level in the fair value hierarchy and the carrying value of assets and liabilities not measured at fair value are as follows:
In thousands of EUR
2022
2021
Level 1
Level 2
Level 3
Total
Level 1
Level 2
Level 3
Total
Financial assets
Financial assets at amortised costs
Trade and other receivables
12,366
12,366
0
5,332
0
5,332
Loans provided
2,447
2,447
0
1,811
0
1,811
Other
17,644
17,644
0
36,135
0
36,135
Total assets
32,457
32,457
0
43,278
0
43,278
Financial liabilities
Borrowings
Bank loan
0
65,705
0
65,705
0
45,460
0
45,460
Issued bonds
0
73,411
0
73,411
0
84,383
0
84,383
Lease liabilities
0
3,626
0
3,626
0
2,273
0
2,273
Other non-current liabilities
0
230
0
230
0
373
0
373
Other financial liabilities
Trade and other payables
0
16,337
0
16,337
0
3,298
0
3,298
Total liabilities
0
159,309
0
159,309
0
135,787
0
135,787
All financial assets and financial liabilities have been defined to
Level 2.
The fair values in level 2 and level 3 of the fair value hierarchy were
estimated using the discounted cash flows valuation technique.
Financial Assets Carried at Amortised Cost
The fair value of floating rate instruments is normally their carrying
amount. The estimated fair value of fixed interest rate instruments
is based on estimated future cash flows expected to be received
discounted at current interest rates for new instruments with similar
credit risks and remaining maturities. Discount rates used depend
on the credit risk of the counterparty.
Liabilities Carried at Amortised Cost
The fair value of issued bonds is based on quoted market prices.
Fair values of other liabilities were determined using valuation tech-
niques.
Photon Energy N.V.
Financial Section
Annual Report 2022
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2022
139
38.
Presentation of Financial Instruments by Measurement Category
For the purposes of measurement, IFRS 9 Financial Instruments
classifies financial assets into the following categories: (a) financial
assets at FVTPL; (b) debt instruments at FVOCI, (c) equity instru-
ments at FVOCI and (d) financial assets at AC. Financial assets at
FVTPL have two sub-categories: (i) assets mandatorily measured
at FVTPL, and (ii) assets designated as such upon initia
l
recognition. In addition, finance lease receivables form a separate
category.
The following table provides a reconciliation of financial assets with
these measurements:
31 December 2022:
In thousands of EUR
FVOCI
FVPL
AC
Total
Assets
Cash and cash equivalents
0
0
11,271
11,271
Liquid assets with restriction on disposition
0
0
6,373
6,373
Precious metals
0
3,714
0
3,714
Other financial assets
6,118
1,698
0
7,816
Trade and other receivables
4,875
217
12,366
17,458
Loans provided
0
0
2,447
2,447
Total financial assets
10,993
5,629
32,457
49,079
As of 31 December 2022, all of the Group’s financial liabilities were carried at amortised costs.
31 December 2021:
In thousands of EUR
FVOCI
FVPL
AC
Total
Assets
Cash and cash equivalents
0
0
32,506
32,506
Liquid assets with restriction on disposition
0
0
3,629
3,629
Precious metals
0
3,227
0
3,227
Other financial assets
8,494
1,242
0
9,736
Trade and other receivables
2,302
0
5,332
7,634
Loans provided
0
0
1,811
1,811
Total financial assets
10,796
4,469
43,278
58,543
As of 31 December 2021, all of the Group’s financial liabilities were carried at amortised costs
.
39.
Related Parties
Parties are generally considered to be related if the parties are un-
der common control or if one party has the ability to control the
other party or can exercise significant influence or joint control over
the other party in making financial and operational decisions. In
considering each possible related party relationship, attention is di-
rected to the substance of the relationship, not merely the legal
form
.
Balances and transactions between the Company and its subsidi-
aries which are related parties of the Company have been elimi-
nated on consolidation and are not disclosed in this note. Details
of transactions between the Group and other related parties are
disclosed below.
The Company is jointly controlled by Mr. Michael Gartner (via Solar
Future Coöperatief U.A.) and Mr. Georg Hotar (via Solar Power to
the People Coöperatief U.A.), who are the Company’s directors.
Photon Energy N.V.
Financial Section
Annual Report 2022
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2022
140
At 31 December 2022, the outstanding balances with related parties were as follows:
In thousands of EUR
Note
Parent
companies
Joint
ventures
Key management
personnel
Gross amount of trade receivables
26
-
107
-
Loans issued
26
1,762
-
685
Investments in JV
9
-
1,509
-
Loans issued to related parties include loans to Solar Age Investments B.V. and Solar Power to the People U.A. which are short term for a
period of up to 12 month and bear interest rate of 3%.
At 31 December 2021, the outstanding balances with related parties were as follows:
In thousands of EUR
Note
Parent
companies
Joint
ventures
Key management
personnel
Gross amount of trade receivables
26
-
72
-
Loans issued
26
1,170
-
641
Investments in JV
9
-
1,626
-
Loans issued to related parties include loans to Solar Age Investments B.V. and Solar Power to the People U.A. which are short term for a
period of up to 12 month and bear interest rate of 3%.
The income and expense items with related parties for the year ended 31 December 2022 were as follows:
In thousands of EUR
Note
Parent
companies
Joint
ventures
Key management
personnel
Revenue from services rendered
-
58
-
– Interest income
17
95
-
-
The income and expense items with related parties for the year ended 31 December 2021 were as follows:
In thousands of EUR
Note
Parent
companies
Joint
ventures
Key management
personnel
Revenue from services rendered
-
72
-
– Interest income
17
73
-
17
Key Management Compensation
Key management includes Directors and Senior management.
Members of the board of directors did not receive any compensa-
tion during 2022 nor 2021 for their duties serving on the board of
directors for the Group of entities. Furthermore, no emoluments of
managing directors, including pension obligations were charged to
the Company. No service contracts with the Company nor any of
its Subsidiaries have been provided to a member of the Board of
Directors for benefits upon termination of employment. Mr Georg
Hotar receives a regular salary as an employee in his function as
managing director of Global Investment Protection AG in Switzer-
land and Mr Gartner receives a regular salary as an employee in
his function as managing director of Photon Energy Australia Pty
Ltd. in Australia. These compensations are in no direct relation to
their Board of Director functions. The overall cost of compensations
for the key management from their employment relations with the
Company or its subsidiaries amounted to EUR 1,119 thousand in
2022 (2021: EUR 727 thousand). The agreements between the key
management with the Company or its Subsidiaries do not foresee
any stock option plans, severance payments, company pension
plans or other deferred compensation. Termination period of the
agreements is up to six months. There are no commitments and
contingent obligations towards key management personnel at 31
December 2022 nor 31 December 2021.
Photon Energy N.V.
Financial Section
Annual Report 2022
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2022
141
40.
Group Entities
Subsidiaries and joint ventures
The following entities were in the Group as at 31 December 2022:
Name
% of share
capital held by
the holding
company
Country of
registration
Seat
of the
company
Consolid.
method
Legal Owner
1
Photon Energy N.V. (PENV)
Holding
NL
Amsterdam
Full Cons.
-
2
Photon Energy Operations NL B.V. (PEONL, former Photon Di-
100%
NL
Amsterdam
Full Cons.
PEONV
3
Photon Energy Engineering B.V. (PEEBV)
100%
NL
Amsterdam
Full Cons.
PENV
4
Photon Energy Operations N.V. (PEONV)
100%
NL
Amsterdam
Full Cons.
PENV
5
Photon Remediation Technology N.V. (PRTNV)
100%
NL
Amsterdam
Full Cons.
PENV
6
Photon Energy Australia Pty Ltd.
100%
AU
Sydney
Full Cons.
PENV
7
Photon Energy AUS SPV 1 Pty. Ltd.
100%
AU
Sydney
Full Cons.
PENV
8
Leeton Solar Farm Pty Ltd (former Photon Energy AUS SPV 2
100%
AU
Sydney
Full Cons.
PENV
9
Fivebough Solar Farm Pty Ltd. (former Photon Energy AUS SPV
100%
AU
Sydney
Full Cons.
PENV
10
Photon Energy AUS SPV 4 Pty. Ltd.
100%
AU
Sydney
Full Cons.
PENV
11
Photon Energy AUS SPV 6 Pty. Ltd.
100%
AU
Sydney
Full Cons.
PENV
12
Photon Energy Operations Australia Pty.Ltd.
100%
AU
Sydney
Full Cons.
PEONV
13
Photon Energy Engineering Australia Pty Ltd
100%
AU
Sydney
Full Cons.
PEEBV
14
Photon Remediation Technology Australia Pty Ltd.
100%
AU
Sydney
Full Cons.
PRTNV
15
Photon Energy SGA Pty. Ltd.
100%
AU
Sydney
Full Cons.
PENV
16
Photon Water Australia Pty. Ltd.
100%
AU
Sydney
Full Cons.
PENV
17
Raygen Resources Pty. Ltd.
7.85%
AU
Sydney
Equity
PENV
18
Photon New Energy Pty. (former Photon Energy AUS SPV 12
100%
AU
Sydney
Full Cons.
PENV
19
Global Investment Protection AG (GIP)
100%
CH
Zug
Full Cons.
PENV
20
Photon Energy Investment AG (former ALFEMO AG (ALAG))
100%
CH
Zug
Full Cons.
PENV
21
KORADOL AG (KOAG)
100%
CH
Zug
Full Cons.
PENV
22
Photon Energy Solutions AG
100%
CH
Zug
Full Cons.
PENV
23
Photon Property AG,
100%
CH
Zug
Full Cons.
PENV
24
Photon Energy Corporate Services CZ s.r.o.
100%
CZ
Prague
Full Cons.
PENV
25
Photon Energy Solutions CZ a.s.(former Photon Energy Soluti-
100%
CZ
Prague
Full Cons.
KOAG
26
Photon SPV 11 s.r.o.
100%
CZ
Prague
Full Cons.
KOAG
27
Photon Energy Operations CZ s.r.o. (PEOCZ)1
100%
CZ
Prague
Full Cons.
PEONV
28
Photon Energy Control s.r.o.
100%
CZ
Prague
Full Cons.
PEOCZ
29
Photon Energy Technology CEE s.r.o.
100%
CZ
Prague
Full Cons.
PEEBV
30
Photon Water Technology s.r.o.
65%
CZ
Prague
Full Cons.
PENV
31
Photon Remediation Technology Europe s.r.o. (former Charles
100%
CZ
Prague
Full Cons.
PENV
32
Photon Energy Engineering s.r.o.
(former Photon Energy Soluti-
100%
CZ
Prague
Full Cons.
PENV
33
Photon Energy Projects s.r.o. (PEP)
100%
CZ
Prague
Full Cons.
PENV
34
Photon Energy Cardio s.r.o.
100%
CZ
Prague
Full Cons.
PEOCZ
35
Photon Maintenance s.r.o. (former The Special One s.r.o.)
100%
CZ
Prague
Full Cons.
PENV
36
Exit 90 SPV s.r.o.
100%
CZ
Prague
Full Cons.
KOAG
37
Onyx Energy s. r. o.
100%
CZ
Prague
Full Cons.
KOAG
38
Onyx Energy projekt II s.r.o.
100%
CZ
Prague
Full Cons.
KOAG
39
Photon SPV 3 s.r.o.
100%
CZ
Prague
Full Cons.
KOAG
40
Photon SPV 4 s.r.o.
100%
CZ
Prague
Full Cons.
KOAG
41
Photon SPV 6 s.r.o.
100%
CZ
Prague
Full Cons.
KOAG
42
Photon SPV 8 s.r.o.
100%
CZ
Prague
Full Cons.
KOAG
43
Photon SPV 10 s.r.o.
100%
CZ
Prague
Full Cons.
KOAG
44
Kaliopé Property, s.r.o.
100%
CZ
Prague
Full Cons.
KOAG
45
PESPV 1 s.r.o.
100%
CZ
Prague
Full Cons.
PESCZ
46
PESPV 2 s.r.o.
100%
CZ
Prague
Full Cons.
PESCZ
47
Photon Energy Solutions s.r.o.
100%
CZ
Prague
Full Cons.
PESCZ
48
Lerta Czech Republic s.r.o.
85.62%
CZ
Prague
Full Cons.
Lerta S.A.
49
Photon Energy Technology EU GmbH
100%
DE
Neuhagen*
Full Cons.
PENV
50
Photon Energy Corporate Services DE GmbH
100%
DE
Neuhagen*
Full Cons.
PENV
51
EcoPlan 2 s.r.o.
100%
SK
Bratislava
Full Cons.
PENV
52
EcoPlan 3 s.r.o.
100%
SK
Bratislava
Full Cons.
PENV
53
Fotonika s.r.o.
100%
SK
Bratislava
Full Cons.
PENV
54
Photon SK SPV 1 s.r.o.
50%
SK
Bratislava
Equity
PENV
55
Photon SK SPV 2 s.r.o.
100%
SK
Bratislava
Full Cons.
PENV
Photon Energy N.V.
Financial Section
Annual Report 2022
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2022
142
Name
% of share
capital held by
the holding
company
Country of
registration
Seat
of the
company
Consolid.
method
Legal Owner
56
Photon SK SPV 3 s.r.o.
100%
SK
Bratislava
Full Cons.
PENV
57
Solarpark Myjava s.r.o.
50%
SK
Bratislava
Equity
PENV
58
Solarpark Polianka s.r.o.
50%
SK
Bratislava
Equity
PENV
59
SUN4ENERGY ZVB s.r.o.
100%
SK
Bratislava
Full Cons.
PENV
60
SUN4ENERGY ZVC s.r.o.
100%
SK
Bratislava
Full Cons.
PENV
61
ATS Energy, s.r.o.
100%
SK
Bratislava
Full Cons.
PENV
62
Photon Energy Operations SK s.r.o.
100%
SK
Bratislava
Full Cons.
PEONV
63
Photon Energy HU SPV 1 Kft. b.a
100%
HU
Budapest
Full Cons.
ALAG
64
Fertod Napenergia-Termelo Kft.
100%
HU
Budapest
Full Cons.
ALAG
65
Photon Energy Operations HU Kft.
100%
HU
Budapest
Full Cons.
PEONV
66
Photon Energy Engineering HU Kft. (former Photon Energy Solu-
100%
HU
Budapest
Full Cons.
PENV
67
Future Solar Energy Kft
100%
HU
Budapest
Full Cons.
ALAG
68
Montagem Befektetési Kft.
100%
HU
Budapest
Full Cons.
ALAG
69
Solarkit Befektetesi Kft.
100%
HU
Budapest
Full Cons.
ALAG
70
Energy499 Invest Kft.
100%
HU
Budapest
Full Cons.
ALAG
71
SunCollector Kft.
100%
HU
Budapest
Full Cons.
ALAG
72
Green-symbol Invest Kft.
100%
HU
Budapest
Full Cons.
ALAG
73
Ekopanel Befektetési és Szolgaltató Kft.
100%
HU
Budapest
Full Cons.
ALAG
74
Onyx-sun Kft.
100%
HU
Budapest
Full Cons.
ALAG
75
Tataimmo Kft
100%
HU
Budapest
Full Cons.
ALAG
76
Öreghal Kft.
100%
HU
Budapest
Full Cons.
ALAG
77
European Sport Contact Kft.
100%
HU
Budapest
Full Cons.
ALAG
78
ALFEMO Alpha Kft.
100%
HU
Budapest
Full Cons.
ALAG
79
ALFEMO Beta Kft.
100%
HU
Budapest
Full Cons.
ALAG
80
ALFEMO Gamma Kft.
100%
HU
Budapest
Full Cons.
ALAG
81
Archway Solar Kft.
100%
HU
Budapest
Full Cons.
PENV
82
Barbican Solar Kft.
100%
HU
Budapest
Full Cons.
ALAG
83
Belsize Solar Kft.
100%
HU
Budapest
Full Cons.
ALAG
84
Blackhorse Solar Kft.
100%
HU
Budapest
Full Cons.
ALAG
85
Caledonian Solar Kft
100%
HU
Budapest
Full Cons.
ALAG
86
Camden Solar Kft
100%
HU
Budapest
Full Cons.
ALAG
87
Hampstead Solar Kft.
100%
HU
Budapest
Full Cons.
ALAG
88
Ráció Master Oktatási
100%
HU
Budapest
Full Cons.
ALAG
89
Aligoté Kereskedelmi és Szolgáltató Kft.
100%
HU
Budapest
Full Cons.
ALAG
90
MEDIÁTOR PV Plant Kft. (former MEDIÁTOR Ingatlanközvetítő
100%
HU
Budapest
Full Cons.
ALAG
91
PROMA Mátra PV Plant Kft. (former PROMA Mátra Ingatlanfej-
100%
HU
Budapest
Full Cons.
ALAG
92
Optisolar Kft.
100%
HU
Budapest
Full Cons.
ALAG
93
Ladány Solar Alpha Kft.
100%
HU
Budapest
Full Cons.
ALAG
94
Ladány Solar Beta Kft.
100%
HU
Budapest
Full Cons.
ALAG
95
Ladány Solar Gamma Kft.
100%
HU
Budapest
Full Cons.
ALAG
96
Ladány Solar Delta Kft.
100%
HU
Budapest
Full Cons.
ALAG
97
ÉGÉSPART Energiatermelő és Szolgáltató Kft
100%
HU
Budapest
Full Cons.
ALAG
98
ZEMPLÉNIMPEX Kereskedelmi és Szolgáltató Kf
100%
HU
Budapest
Full Cons.
ALAG
99
ZUGGÓ-
DŰLŐ Energiatermelő és Szolgáltató Kft
100%
HU
Budapest
Full Cons.
ALAG
100
Ventiterra Környezetgazdálkodási és Szolgáltató Kft.
100%
HU
Budapest
Full Cons.
ALAG
101
VENTITERRA ALFA Kft.
100%
HU
Budapest
Full Cons.
ALAG
102
VENTITERRA BETA Kft.
100%
HU
Budapest
Full Cons.
ALAG
103
Hendon Solar Kft.
100%
HU
Budapest
Full Cons.
ALAG
104
Mayfair Solar Kft.
100%
HU
Budapest
Full Cons.
ALAG
105
Holborn Solar Kft.
100%
HU
Budapest
Full Cons.
ALAG
106
Lerta Energy HU Kft.
85.62%
HU
Budapest
Full cons.
Lerta S.A.
107
LERTA Magyarország Kft.
85.62%
HU
Budapest
Full cons.
Lerta S.A.
108
Lerta Lithuania UAB
85.62%
LI
Vilnius
Full cons.
Lerta S.A.
109
Photon Energy Project Development XXK (PEPD)
99%
MN
Ulaanbaatar
Full Cons.
PEP
110
PEPD Solar XXK.
100%
MN
Ulaanbaatar
Full Cons.
PEPD
111
Photon Energy Solutions PL S.A.(former Solar Age Polska S.A.)
100%
PL
Warsaw
Full Cons.
PENV
112
Photon Energy Polska Sp. o.o.
100%
PL
Warsaw
Full cons.
PENV
113
Photon Energy Operations PL Sp. o.o.
100%
PL
Łodz
Full cons.
PEONV
114
Alperton Solar Sp. o.o.
100%
PL
Poznań
Full cons.
PENV
115
Beckton Solar Sp. o.o.
100%
PL
Poznań
Full cons.
PENV
116
Debden Solar Sp. o.o.
100%
PL
Poznań
Full cons.
PENV
Photon Energy N.V.
Financial Section
Annual Report 2022
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2022
143
Name
% of share
capital held by
the holding
company
Country of
registration
Seat
of the
company
Consolid.
method
Legal Owner
117
Chigwell Solar Sp. o.o.
100%
PL
Poznań
Full cons.
PENV
118
Ealing Solar Sp. o.o.
100%
PL
Poznań
Full cons.
PENV
119
Lerta S.A.
85.62%
PL
Poznań
Full cons.
PENV
120
Lerta Poland Sp. o.o.
85.62%
PL
Poznań
Full cons.
Lerta S.A.
121
Lerta Power Poland Sp. o.o.
85.62%
PL
Poznań
Full cons.
Lerta S.A.
122
Lerta
JRM Sp. o.o.
85.62%
PL
Poznań
Full cons.
Lerta S.A.
123
Lerta Technology Sp. o.o.
85.62%
PL
Poznań
Full cons.
Lerta S.A.
124
Stanford Solar Srl.
100%
RO
Bucharest
Full cons.
PEP & PEECZ
125
Halton Solar Srl.
100%
RO
Bucharest
Full cons.
PEP & PEECZ
126
Aldgate Solar Srl
100%
RO
Bucharest
Full cons.
PEP & PEECZ
127
Holloway Solar Srl.
100%
RO
Bucharest
Full cons.
PEP & PEECZ
128
Moorgate Solar Srl.
100%
RO
Bucharest
Full cons.
PEP & PEECZ
129
Redbridge Solar Srl.
100%
RO
Bucharest
Full cons.
PEP & PEECZ
130
Watford Solar Srl
100%
RO
Bucharest
Full cons.
PEP & PEECZ
131
Photon Energy Operations Romania Srl. (former Becontree
100%
RO
Bucharest
Full cons.
PEONV & PEOCZ
132
Greenford Solar Srl.
100%
RO
Bucharest
Full cons.
PEP & PEECZ
133
Chesham Solar Srl.
100%
RO
Bucharest
Full cons.
PEP & PEECZ
134
Photon Energy Romania Srl.
100%
RO
Bucharest
Full cons.
PENV & PEP
135
Siria Solar SRL
100%
RO
Bucharest
Full Cons.
ALAG&KOAG
136
Brentford Solar SRL
100%
RO
Bucharest
Full cons.
PEP & PEECZ
137
Camberwell Solar SRL
100%
RO
Bucharest
Full cons.
PEP & PEECZ
138
Deptford Solar SRL
100%
RO
Bucharest
Full cons.
PEP & PEECZ
139
Harlow Solar SRL
100%
RO
Bucharest
Full cons.
PEP & PEECZ
140
Kenton Solar SRL
100%
RO
Bucharest
Full cons.
PEP & PEECZ
141
Lancaster Solar SRL
100%
RO
Bucharest
Full cons.
PEP & PEECZ
142
Perivale Solar SRL
100%
RO
Bucharest
Full cons.
PEP & PEECZ
143
Romford Solar SRL
100%
RO
Bucharest
Full cons.
PEP & PEECZ
144
Stratford Solar SRL
100%
RO
Bucharest
Full cons.
PEP & PEECZ
145
Weston Solar SRL
100%
RO
Bucharest
Full cons.
PEP & PEECZ
146
Photon Energy Engineering Romania SRL
100%
RO
Bucharest
Full cons.
PENV & PEP
147
Lerta Energy S.r.l.
85.62%
RO
Bucharest
Full cons.
Lerta S.A.
148
Photon Renewable Energy Pty. Ltd.
100%
SA
West. Cape
Full Cons.
PENV
149
Solar Age SPV 1 Pty. Ltd.
100%
SA
West. Cape
Full Cons.
PENV
* Neuhagen bei Berlin
Notes:
Country of registration:
AU – Australia
CH – Switzerland
CZ – Czech Republic
DE – Germany
HU – Hungary
NL – Netherlands
MN – Mongolia
PL – Poland
PE – Peru
RO – Romania
SK – Slovakia
SA – South Africa
LI - Lithuania
Consolidation method:
Full Cons. – Full Consolidation
Not Cons. – Not Consolidated
Equity – Equity Method
Photon Energy Operations CZ s.r.o. established a branch office in Romania.
PEP & PESCZ – Photon Energy Projects s.r.o. owns 95% and Photon Energy Solution s.r.o. owns 5%
The following entities were in the Group as at 31 December 2021:
Name
% of share
capital held by
the holding
company
Country of
registration
Seat
of the
company
Consolid.
method
Legal Owner
1
Photon Energy N.V. (PENV)
Holding
NL
Amsterdam
Full Cons.
-
2
Photon Energy Operations NL B.V.
100%
NL
Amsterdam
Full Cons.
PEONV
3
Photon Energy Engineering B.V. (PEEBV)
100%
NL
Amsterdam
Full Cons.
PENV
4
Photon Energy Operations N.V. (PEONV)
100%
NL
Amsterdam
Full Cons.
PENV
5
Photon Remediation Technology N.V. (PRTNV)
100%
NL
Amsterdam
Full Cons.
PENV
6
Photon Energy Australia Pty Ltd.
100%
AU
Sydney
Full Cons.
PENV
7
Photon Energy AUS SPV 1 Pty. Ltd.
100%
AU
Sydney
Full Cons.
PENV
8
Leeton Solar Farm Pty Ltd
100%
AU
Sydney
Full Cons.
PENV
9
Fivebough Solar Farm Pty Ltd
100%
AU
Sydney
Full Cons.
PENV
10
Photon Energy AUS SPV 4 Pty. Ltd.
100%
AU
Sydney
Full Cons.
PENV
11
Photon Energy AUS SPV 6 Pty. Ltd.
51%
AU
Sydney
Equity
PENV
13
Photon Energy Operations Australia Pty.Ltd.
100%
AU
Sydney
Full Cons.
PEONV
14
Photon Energy Engineering Australia Pty Ltd
100%
AU
Sydney
Full Cons.
PEEBV
Photon Energy N.V.
Financial Section
Annual Report 2022
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2022
144
Name
% of share
capital held by
the holding
company
Country of
registration
Seat
of the
company
Consolid.
method
Legal Owner
15
Photon Remediation Technology Australia Pty Ltd.
100%
AU
Sydney
Full Cons.
PRTNV
16
Photon Energy SGA Pty. Ltd.
100%
AU
Sydney
Full Cons.
PENV
17
Photon Water Australia Pty. Ltd.
100%
AU
Sydney
Full Cons.
PENV
18
Photon Energy AUS SPV 12 Pty. Ltd.
100%
AU
Sydney
Full Cons.
PENV
19
Global Investment Protection AG (GIP)
100%
CH
Zug
Full Cons.
PENV
20
ALFEMO AG (ALFEMO)
100%
CH
Zug
Full Cons.
PENV
21
KORADOL AG (KORADOL)
100%
CH
Zug
Full Cons.
PENV
22
Photon Energy Corporate Services CZ s.r.o.
100%
CZ
Prague
Full Cons.
PENV
23
Photon SPV 1 s.r.o.
100%
CZ
Prague
Full Cons.
KORADOL
24
Photon SPV 11 s.r.o.
100%
CZ
Prague
Full Cons.
KORADOL
25
Photon Energy Operations CZ s.r.o. (PEOCZ)
1
100%
CZ
Prague
Full Cons.
PEONV
26
Photon Energy Control s.r.o.
100%
CZ
Prague
Full Cons.
PEOCZ
27
Photon Energy Technology CEE s.r.o.
100%
CZ
Prague
Full Cons.
PEEBV
28
Photon Water Technology s.r.o.
65%
CZ
Prague
Full Cons.
PENV
29
Photon Remediation Technology Europe s.r.o.
100%
CZ
Prague
Full Cons.
PENV
30
Photon Energy Solutions s.r.o. (PESCZ)
100%
CZ
Prague
Full Cons.
PENV
31
Photon Energy Projects s.r.o. (PEP)
100%
CZ
Prague
Full Cons.
PENV
32
Photon Energy Cardio s.r.o.
100%
CZ
Prague
Full Cons.
PEOCZ
33
Photon Maintenance s.r.o
100%
CZ
Prague
Full Cons.
PENV
32
Photon Energy Technology EU GmbH
100%
DE
Neuhagen*
Full Cons.
PENV
33
Photon Energy Corporate Services DE GmbH
100%
DE
Neuhagen*
Full Cons.
PENV
34
EcoPlan 2 s.r.o.
100%
SK
Bratislava
Full Cons.
PENV
35
EcoPlan 3 s.r.o.
100%
SK
Bratislava
Full Cons.
PENV
36
Fotonika s.r.o.
100%
SK
Bratislava
Full Cons.
PENV
37
Photon SK SPV 1 s.r.o.
50%
SK
Bratislava
Equity
PENV
38
Photon SK SPV 2 s.r.o.
100%
SK
Bratislava
Full Cons.
PENV
39
Photon SK SPV 3 s.r.o.
100%
SK
Bratislava
Full Cons.
PENV
40
Solarpark Myjava s.r.o.
50%
SK
Bratislava
Equity
PENV
41
Solarpark Polianka s.r.o.
50%
SK
Bratislava
Equity
PENV
42
SUN4ENERGY ZVB s.r.o.
100%
SK
Bratislava
Full Cons.
PENV
43
SUN4ENERGY ZVC s.r.o.
100%
SK
Bratislava
Full Cons.
PENV
44
ATS Energy, s.r.o.
100%
SK
Bratislava
Full Cons.
PENV
45
Photon Energy Operations SK s.r.o.
100%
SK
Bratislava
Full Cons.
PEONV
46
Photon Energy HU SPV 1 Kft. b.a
100%
HU
Budapest
Full Cons.
ALFEMO
47
Fertod Napenergia-Termelo Kft.
100%
HU
Budapest
Full Cons.
ALFEMO
48
Photon Energy Operations HU Kft.
100%
HU
Budapest
Full Cons.
PEONV
49
Photon Energy Solutions HU Kft.
100%
HU
Budapest
Full Cons.
PENV
50
Future Solar Energy Kft
100%
HU
Budapest
Full Cons.
ALFEMO
51
Montagem Befektetési Kft.
100%
HU
Budapest
Full Cons.
ALFEMO
52
Solarkit Befektetesi Kft.
100%
HU
Budapest
Full Cons.
ALFEMO
53
Energy499 Invest Kft.
100%
HU
Budapest
Full Cons.
ALFEMO
54
SunCollector Kft.
100%
HU
Budapest
Full Cons.
ALFEMO
55
Green-symbol Invest Kft.
100%
HU
Budapest
Full Cons.
ALFEMO
56
Ekopanel Befektetési és Szolgaltató Kft.
100%
HU
Budapest
Full Cons.
ALFEMO
57
Onyx-sun Kft.
100%
HU
Budapest
Full Cons.
ALFEMO
58
Tataimmo Kft
100%
HU
Budapest
Full Cons.
ALFEMO
59
Öreghal Kft.
100%
HU
Budapest
Full Cons.
ALFEMO
60
European Sport Contact Kft.
100%
HU
Budapest
Full Cons.
ALFEMO
61
ALFEMO Alpha Kft.
100%
HU
Budapest
Full Cons.
ALFEMO
62
ALFEMO Beta Kft.
100%
HU
Budapest
Full Cons.
ALFEMO
63
ALFEMO Gamma Kft.
100%
HU
Budapest
Full Cons.
ALFEMO
64
Archway Solar Kft.
100%
HU
Budapest
Full Cons.
PENV
65
Barbican Solar Kft.
100%
HU
Budapest
Full Cons.
ALFEMO
66
Belsize Solar Kft.
100%
HU
Budapest
Full Cons.
ALFEMO
67
Blackhorse Solar Kft.
100%
HU
Budapest
Full Cons.
ALFEMO
68
Caledonian Solar Kft
100%
HU
Budapest
Full Cons.
ALFEMO
Photon Energy N.V.
Financial Section
Annual Report 2022
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2022
145
Name
% of share
capital held by
the holding
company
Country of
registration
Seat
of the
company
Consolid.
method
Legal Owner
69
Camden Solar Kft
100%
HU
Budapest
Full Cons.
ALFEMO
70
Hampstead Solar Kft.
100%
HU
Budapest
Full Cons.
ALFEMO
71
Ráció Master Oktatási
100%
HU
Budapest
Full Cons.
ALFEMO
72
Aligoté Kereskedelmi és Szolgáltató Kft.
100%
HU
Budapest
Full Cons.
ALFEMO
73
MEDIÁTOR PV Plant Kft
100%
HU
Budapest
Full Cons.
ALFEMO
74
PROMA Mátra PV Plant Kft.
100%
HU
Budapest
Full Cons.
ALFEMO
75
Optisolar Kft.
100%
HU
Budapest
Full Cons.
ALFEMO
76
Ladány Solar Alpha Kft.
100%
HU
Budapest
Full Cons.
ALFEMO
77
Ladány Solar Beta Kft.
100%
HU
Budapest
Full Cons.
ALFEMO
78
Ladány Solar Gamma Kft.
100%
HU
Budapest
Full Cons.
ALFEMO
79
Ladány Solar Delta Kft.
100%
HU
Budapest
Full Cons.
ALFEMO
80
ÉGÉSPART Energiatermelő és Szolgáltató Kft
100%
HU
Budapest
Full Cons.
ALFEMO
81
ZEMPLÉNIMPEX Kereskedelmi és Szolgáltató Kf
100%
HU
Budapest
Full Cons.
ALFEMO
82
ZUGGÓ-
DŰLŐ Energiatermelő és Szolgáltató Kft
100%
HU
Budapest
Full Cons.
ALFEMO
83
Ventiterra Környezetgazdálkodási és Szolgáltató Kft.
100%
HU
Budapest
Full Cons.
ALFEMO
84
VENTITERRA ALFA Kft.
100%
HU
Budapest
Full Cons.
ALFEMO
85
VENTITERRA BETA Kft.
100%
HU
Budapest
Full Cons.
ALFEMO
86
Hendon Solar Kft.
100%
HU
Budapest
Full Cons.
ALFEMO
87
Mayfair Solar Kft.
100%
HU
Budapest
Full Cons.
ALFEMO
88
Holborn Solar Kft.
100%
HU
Budapest
Full Cons.
ALFEMO
89
Photon Energy Project Development XXK (PEPD)
99%
MN
Ulaanbaatar
Full Cons.
PEP
90
PEPD Solar XXK.
100%
MN
Ulaanbaatar
Full Cons.
PEPD
91
Solar Age Polska S.A.
100%
PL
Warsaw
Full Cons.
PENV
92
Photon Energy Polska Sp. Z o.o.
100%
PL
Warsaw
Full cons.
PENV
93
Photon Energy Operations PL Sp. z o.o.
100%
PL
Łodz
Full cons.
PEONV
94
Alperton Solar Sp. z o.o.
100%
PL
Poznań
Full cons.
PENV
95
Beckton Solar Sp. z o.o.
100%
PL
Poznań
Full cons.
PENV
96
Debden Solar Sp. z o.o.
100%
PL
Poznań
Full cons.
PENV
97
Chigwell Solar Sp. z o.o.
100%
PL
Poznań
Full cons.
PENV
98
Ealing Solar Sp. z o.o.
100%
PL
Poznań
Full cons.
PENV
99
Stanford Solar Srl.
100%
RO
Bucharest
Full cons.
PEP & PESCZ
100
Halton Solar Srl.
100%
RO
Bucharest
Full cons.
PEP & PESCZ
101
Aldgate Solar Srl
100%
RO
Bucharest
Full cons.
PEP & PESCZ
102
Holloway Solar Srl.
100%
RO
Bucharest
Full cons.
PEP & PESCZ
103
Moorgate Solar Srl.
100%
RO
Bucharest
Full cons.
PEP & PESCZ
104
Redbridge Solar Srl.
100%
RO
Bucharest
Full cons.
PEP & PESCZ
105
Watford Solar Srl
100%
RO
Bucharest
Full cons.
PEP & PESCZ
106
Photon Energy Operations Romania Srl.
100%
RO
Bucharest
Full cons.
PEONV &
107
Greenford Solar Srl.
100%
RO
Bucharest
Full cons.
PEP & PESCZ
108
Chesham Solar Srl.
100%
RO
Bucharest
Full cons.
PEP & PESCZ
109
Photon Energy Romania SRL
100%
RO
Bucharest
Full cons.
PENV & PEP
110
Photon Renewable Energy Pty. Ltd.
100%
SA
West. Cape
Full Cons.
PENV
111
Solar Age SPV 1 Pty. Ltd.
100%
SA
West. Cape
Full Cons.
PENV
112
PE Solar Technology Ltd.
100%
UK
London
Full Cons.
PENV
* Neuhagen bei Berlin
Notes:
Country of registration:
AU – Australia
CH – Switzerland
CZ – Czech Republic
DE – Germany
HU – Hungary
NL – Netherlands
MN – Mongolia
PL – Poland
PE – Peru
RO – Romania
SK – Slovakia
SA – South Africa
UK – United Kingdom
Consolidation method:
Full Cons. – Full Consolidation
Not Cons. – Not Consolidated
Equity – Equity Method
Photon Energy Operations CZ s.r.o. established a branch office in Romania.
PEP & PESCZ – Photon Energy Projects s.r.o. owns 95% and Photon Energy Solution s.r.o. owns 5%
Photon Energy N.V.
Financial Section
Annual Report 2022
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2022
146
Other consolidated entities
Name
% of Consolidated
share
% of Ownership
share
Country of
registration
Seat of the
company
Legal Owner
1
Kaliope s.r.o.
100%
0%
CZ
Prague
RL
2
Photon SPV 3 s.r.o.
100%
0%
CZ
Prague
RL
3
Photon SPV 8 s.r.o.
100%
0%
CZ
Prague
RL
4
Exit 90 SPV s.r.o.
100%
0%
CZ
Prague
RL
5
Photon SPV 4 s.r.o.
100%
0%
CZ
Prague
RL
6
Photon SPV 6 s.r.o.
100%
0%
CZ
Prague
RL
7
Onyx Energy s.r.o.
100%
0%
CZ
Prague
RL
8
Onyx Energy projekt II s.r.o.
100%
0%
CZ
Prague
RL
9
Photon SPV 10 s.r.o.
100%
0%
CZ
Prague
RL
100% share in the above entities was owned by Raiffeisen – Leasing s.r.o. (“RL”). Although those companies were legally owned by RL, the
Group consolidated them under IFRS rules since Photon Energy N.V. was considered as the beneficial owner as it was owner of economic
benefits and was directly exposed to economic risks of those companies in 2021 (see also note 2.4.1). In 2022, those entities were transferred
to the full ownership of the Group
.
41.
Contingent Assets and Liabilities, Commitments
Legal Proceedings
From time to time and in the normal course of business, claims
against the Group may be received. On the basis of its own esti-
mates and both internal and external professional advice, manage-
ment is of the opinion that no material losses will be incurred in
respect of claims in excess of provisions that have been made in
these consolidated financial statements.
Assets Pledged and Restricted
At 31 December 2022 and 2021 the Group has the assets pledged
as collateral and included in note 19
.
Guarantees
Guarantees are irrevocable assurances that the Group will make
payments in the event that another party cannot meet its obliga-
tions. The parent company has issued guarantees in total amount
of EUR 41,106 thousand EUR (2021: EUR 11,838 thousand) to
subsidiaries creditors. Most of the new guarantees in 2022 were
issued in connection with building of the new powerplants in Ro-
mania (specifically used only on applications for Set-Up Licenses
ANRE). Bank accounts restricted due to guarantees are included
in restricted cash presented in note 28
.
42.
Subsequent Events
Photon Energy completed full takeover of Lerta
With reference to the investment agreement signed on 20 Decem-
ber 2022 with the founders of Lerta S.A., Photon Energy N.V. has
become holder of 100% of the share capital of the company on 1
February 2023. Acting based on a General Meeting authorization
from 31 May 2021, the Board of Directors of the Company decided
on 1 February 2023 to issue 1,238,521 new shares with a nominal
value of EUR 0.01 each. Pursuant to the issuance of the new
shares on 1 February 2023, the share capital of the Company has
increased from EUR 600,000.00 to EUR 612,385.21.
The new shares were issued against a contribution in-kind consist-
ing of 2,477,042 shares in Lerta S.A., in line with the above-men-
tioned investment agreement. Pursuant to Dutch law, there are no
pre-emptive rights of existing shareholders of the Company with
respect to the issuance of new shares against a non-cash contri-
bution. With this step the acquisition process of Lerta S.A. is com-
pleted and Photon Energy has become holder of 100% of the share
capital of Lerta S.A. The Board of Directors also resolved that the
newly issued shares shall be included in the collective deposit as
mentioned in Section 12 of the Dutch Giro Securities Act, and in-
tends to undertake all necessary actions to register these new
shares with the Czech and Polish depositaries acting as secondary
depositaries for the Company’s shares, and undertake all actions
that are necessary to apply for the listing and admission to trading
of these new shares on the Prague and Warsaw Stock Exchanges
and in the Open Market of the Frankfurt Stock Exchange.
Working capital credit line for Photon Energy Technol-
ogy CEE s.r.o.
In January 2023, a new loan agreement between Photon Energy
Technology CEE s.r.o. and Unicredit Bank Czech Republic and
Slovakia a.s. was signed. This credit line is meant to be used for
financing of the working capital needs of the trading business ac-
tivities with a credit line of up to EUR 5 million.
Photon Energy Commissioned Its First Romanian Util-
ity-Scale PV Power Plant
On 23 February Photon Energy has completed and grid-connected
its first Romanian PV power plant in the municip
ality of Șiria. The
plant has a capacity of 5.7 MWp. High efficiency bifacial solar mod-
ules mounted on single-axis trackers will deliver around 8.7 GWh
of renewable energy annually to the grid managed by Enel E-Dis-
tributie Banat. The electricity generated by the plant will be sold on
the energy market on a merchant basis, without any support or
power purchase agreement with an energy offtaker. The Company
expects the plant to generate EUR 1.4 million in revenues based
Photon Energy N.V.
Financial Section
Annual Report 2022
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2022
147
on the current forward prices for electricity base load in Romania
in the next 12 months. Located near Șiria in Romania’s Arad
County, the power plant extends over 9.3 hectares of greenfield
land and is equipped with some 10,600 solar panels. The power
plant is owned and operated by Siria Solar S.R.L., a special pur-
pose company fully-owned by Photon Energy Group.
Photon Energy Group announced the resignation of
Clemens Wohlmuth as CFO
On 7 March 2023, the Group announced the resignation of Clem-
ens Wohlmuth as the Group’s Chief Financial Officer. Clemens
Wohlmuth will remain involved during the handover process until
after the conclusion of the Group’s financial audit for the financial
year 2022. The Board of Directors appointed Mr. Andrej Horansky
as the Photon Energy Group’s new Chief Financial Officer starting
8 March 2023. Andrej is a Slovak national and has gained exten-
sive experience in senior finance roles including CFO in the finan-
cial services industry (Santander Consumer Finance, Simply
Kilcullen Capital Partners, GE Money Bank (Moneta), Generali
PPF Holding and Slavia Insurance, energy (Ezpada Group) and
automotive retail (AURES Holding).
Photon Energy Group Secured EUR 21.9 Million Fi-
nancing for Romanian Projects
On 17 March 2023, the Group closed a nonrecourse project refi-
nancing agreement in the amount of EUR 21.9 million with Austrian
Raiffeisen Bank International (RBI) for its portfolio of PV power
plants in Romania with a total installed capacityof 31.5 MWp. The
signing of the agreement represents the Group’s first project fi-
nancing of European PV assets that operate on a merchant basis,
selling energy to the market without a power purchase agreement
or state support. To date, only the Company’s two merchant utility-
scale power plants in Leeton, Australia, which have a combined
installed capacity of 14.6 MWp, have obtained non-recourse pro-
ject financing.
Photon Energy Secured DSR Capacity of 389 MW and
Locked-in EUR 24.8 Million in 2024 Revenue
On 16 March 2023, the Group’s subsidiaries Lerta JRM Sp. z o.o.
and Lerta S.A. (part of the Company’s New Energy Division) have
succeeded in the additional 2024 Polish capacity auction with 375
MW of Demand Side Response (‘DSR’). With the previously con-
tracted capacity of 14 MW for 2024, the Company’s total DSR ca-
pacity of 389 MW will lock-in PLN 116.8 million (EUR 24.8 million)
in total DSR revenues for 2024.
Photon Energy Group increases Green Bond to EUR
80.0 million
On 28 March 2023, the Group announced that it has successfully
increased its first 6.50% Photon Energy Green EUR Bond 2021/27
(ISIN: DE000A3KWKY4) to a total amount of EUR 80.0 million. The
additional nominal amount of EUR 2.5 million has been placed
through a private placement to institutional investors in the UK,
Switzerland, Germany, and Austria.
Photon Energy Exceeds 100 MWp in IPP Portfolio With
Three New Romanian PV Power Plants
On 13 April 2023, the Group announced the completion and grid-
connection of further three PV power plants near Calafat in Roma-
nia's Dolj County. The combined generation capacity of the new
installations is 6.0 MWp. High efficiency bifacial solar modules
mounted on single-axis trackers will deliver around 9.3 GWh of re-
newable energy annually to the grid of Distribuie Energie Oltenia.
The electricity generated by the plant will be sold on the energy
market on a merchant basis, without any support or power pur-
chase agreement with an energy offtaker. The Company expects
the plant to generate EUR 1.4 million in revenues based on the
current forward prices for electricity base load in Romania over the
next 12 months. Located near Calafat in Romania's Dolj County,
the power plant extends over 10.2 hectares of greenfield land and
is equipped with some 10,800 solar panels. The power plant is
owned and operated by a special purpose company fully-owned by
Photon Energy Group.
148
Standalone
Financial Statements
For the Year Ended 31 December 2022
Photon Energy N.V.
Financial Section
Annual Report 2022
Standalone Financial Statements for the Year Ended 31 December 2022
149
Company Balance Sheet as of 31 December 2022
(before profit appropriation)
In thousands of EUR
Note
31 December 2022
31 December 2021
Assets
A. Fixed assets
79,813
65,725
I. Intangible fixed assets
15,026
36
3. Concessions, licences and intellectual property
22
21
36
4. Goodwill
21
15,005
0
II Tangible fixed assets
0
0
III Financial fixed assets
64,787
65,689
1. Participations in group companies
44
56,055
30,882
2. Receivables from group companies
45
776
25,060
3. Other participating interest
44
7,817
9,747
5. Treasury shares
47
139
0
B. Current assets
114,443
101,883
II Accounts receivable
112,449
81,281
1. Trade debtors
46
11,750
7,953
2. From group companies
45,46
97,516
70,165
4. Other accounts receivable
46
3,150
3,158
6. Prepayments and accrued income
46
33
4
IV Cash at banks and in hand
46
1,994
20,602
Assets
194,257
167,608
Equity and liabilities
Note
31 December 2022
31 December 2021
A. Equity
47
107,015
79,336
I. Called-up share capital
600
600
II. Treasury shares
0
-38
III. Share premium
53,636
44,554
IV. Revaluation reserve
19,738
19,037
V. Legal and statutory reserves
13
38
VI Other reserves*
2,115
1,533
VII Retained earnings
13,949
9,945
Profit for the year
16,965
3,667
C. Long-term debt
48
78,757
59,403
2. Other bonds and private loans
76,511
57,223
7. Accounts payable to group companies
2,247
2,180
D. Current liabilities
49
8,484
28,869
2. Other bonds and private loans
48
3,670
24,107
5. Trade creditors
626
1,008
7. Accounts payable to group companies
3,870
3,493
11. Other liabilities
141
12
12. Accruals and deferred income
177
249
Equity and liabilities
194,257
167,608
*Revaluation reserve and the legal reserves are non-distributable
The notes on pages 151 to 164 are an integral part of these financial statements
.
Photon Energy N.V.
Financial Section
Annual Report 2022
Standalone Financial Statements for the Year Ended 31 December 2022
150
Company Income Statement for the Financial Year Ended 31 December 2022
In thousands of EUR
Note
1 January –
31 December 2022
1 January –
31 December 2021
Revenues
51
5,472
3,269
Other operating income/Capital gain from disposal of financial investments
223
484
Total operating income
5,695
3,753
Costs of raw materials and consumables
0
0
Wages and salaries
-29
-77
Impairment of current assets
0
0
Gain on derecognition of associate
8
2,182
Other operating expenses
52
-5,462
-3,717
Total operating expenses
-3,309
-3,794
Other interest income and similar income
53
2,587
2,144
Changes in value of fixed asset investments
53,54
615
1,242
Interest expense and similar expenses
54
-7,046
-4,948
Results before tax
-1,458
-1,603
Taxes
0
-13
Share in profit/loss of participations
55
18,423
5,283
Net result after tax
16,965
3,667
The notes on pages 151 to 164 are an integral part of these financial statements
.
151
Notes to the Company
Financial Statements
For the Year Ended 31 December 2022
Photon Energy N.V.
Financial Section
Annual Report 2022
Notes to the Company Financial Statements for the Year Ended 31 December 2022
152
43.
Accounting Information and Policies
43.1
Basis of Preparation
The company’s standalone financial statements of Photon Energy
N.V., KvK 51447126, (hereafter: the company) have been pre-
pared in accordance with Part 9, Book 2 of the Dutch Civil Code.
In accordance with sub 8 of article 362, Book 2 of the Dutch Civil
Code, the company’s standalone financial statements are prepared
based on the accounting principles of recognition, measurement,
and determination of profit, as applied in the consolidated financial
statements. These principles also include the classification and
presentation of financial instruments, being equity instruments or
financial liabilities.
In case no other policies are mentioned, refer to the accounting
policies as described in the accounting policies in the consolidated
financial statements of this Annual Report. For an appropriate in-
terpretation, the company financial statements of Photon Energy
N.V. should be read in conjunction with the consolidated financial
statements.
All amounts are presented in EUR thousand, unless stated other-
wise. The balance sheet and income statement include references.
These refer to the notes.
The company prepared its consolidated financial statements in ac-
cordance with the International Financial Reporting Standards
(‘IFRS’) as adopted by the European Union.
43.2
Financial Fixed Assets
43.2.1
Investments in Consolidated Subsidiaries
Consolidated subsidiaries are all entities (including intermediate
subsidiaries) over which the company has control. The company
controls an entity when it is exposed, or has rights, to variable re-
turns from its involvement with the subsidiary and has the ability to
affect those returns through its power over the subsidiary. Subsid-
iaries are recognised from the date on which control is transferred
to the company or its intermediate holding entities. They are derec-
ognised from the date that control ceases.
The company applies the acquisition method to account for acquir-
ing subsidiaries, consistent with the approach identified in the con-
solidated financial statements. The consideration transferred for
the acquisition of a subsidiary is the fair value of assets transferred
by the company, liabilities incurred to the former owners of the ac-
quiree and the equity interests issued by the company. The con-
sideration transferred includes the fair value of any asset or liability
resulting from a contingent consideration arrangement. Identifiable
assets acquired and liabilities and contingent liabilities assumed in
an acquisition are measured initially at their fair values at the ac-
quisition date, and are subsumed in the net asset value of the in-
vestment in consolidated subsidiaries.
Acquisition-related costs are expensed as incurred.
Investments in consolidated subsidiaries are measured at net as-
set value. Net asset value is based on the measurement of assets,
provisions and liabilities and determination of profit based on the
principles applied in the consolidated financial statements. Share
of profit in consolidated subsidiaries (net of tax) is presented in
Share in profit/loss of participations.
Other investments include investment of the Company where the
Company has no significant influence and other financial instru-
ments, and are valued at fair value.
Changes in fair value of investments into equity instruments are
recognised in Revaluation reserve in equity, changes in fair value
of other financial instruments (derivatives) are recognised in
Income statement in line Changes in value of fixed asset invest-
ments.
43.2.1
Goodwill
Goodwill is measured initially as described under “Consolidated fi-
nancial statements “ in note 4.1.1. Goodwill is not amortised but it
is tested for impairment annually. Goodwill is allocated to the cash-
generating units, or groups of cash-generating units, that are ex-
pected to benefit from the synergies of the business combination.
Such units or groups of units represent the lowest level at which
the Group monitors goodwill and are not larger than an operating
segment.
The Group tests goodwill for impairment at least annually and
whenever there are indications that goodwill may be impaired. The
carrying value of the cash-generating unit containing goodwill is
compared to the recoverable amount, which is the higher of value
in use and the fair value less costs of disposal. Any impairment is
recognised immediately as an expense and is not subsequently re-
versed.
Gains or losses on disposal of an operation within a cash generat-
ing unit to which goodwill has been allocated include the carrying
amount of goodwill associated with the disposed operation, gener-
ally measured on the basis of the relative values of the disposed
operation and the portion of the cash-generating unit which is re-
tained
.
44.
Financial Fixed Assets
In thousands of EUR
31 December 2022
31 December 2021
Interests in group companies
56,055
30,882
Other investments
7,817
9,747
Total Financial Fixed Assets
63,872
40,629
Photon Energy N.V.
Financial Section
Annual Report 2022
Notes to the Company Financial Statements for the Year Ended 31 December 2022
153
Other non-current investments include following investments:
In thousands of EUR
Fair value at
31 December 2022
Fair value at
31 December 2021
Investment in Raygen Resources Pty Ltd ordinary shares
3,535
3,434
Investment in Raygen Resources Pty Ltd preference shares
1,978
1,921
Investment in Lerta SA ordinary shares
0
1,405
Investment in Valuetech
605
0
Share options
1,698
1,247
Shares not yet registered
0
1,740
Total Other investments
7,817
9,747
The movements of the Financial Fixed assets can be shown as follows:
In thousands of EUR
Participating
interests in
group
companies
Other
investments
Shares
not yet
registered
Total
Balance at 31 December 2020
30,643
2,042
0
32,685
Share in result of participating interests
5,283
0
0
5,283
Sale of investments
-1,014
0
0
-1,014
Other movements
87
0
0
87
Share in PPE revaluation reserve s in participating interest
76
0
0
76
Share in derivatives revaluation in participating interest
2,359
0
0
2,359
Revaluation of investments–- OCI
0
2,657
0
2,657
Revaluation of investments–- PL
0
1,242
0
1,242
Dividend received by Company
-6,690
0
0
-6,690
New investments
138
2,066
1,740
3,944
Balance at 31 December 2021
30,882
8,007
1,740
40,629
Share in result of participating interests
18,423
0
0
18,423
Sale of investments
-7
0
0
-7
Other movements
-132
0
0
-132
Share in PPE revaluation reserve s in participating interest
432
0
0
432
Share in derivatives revaluation in participating interest
2,514
0
0
2,514
Revaluation of investments–- OCI
0
0
0
0
Revaluation of investments–- PL
0
615
0
615
Dividend received by Company
-1,783
0
0
-1,783
Capital contribution
1,120
0
0
1,120
Currency reserve
-1,932
0
0
-1,932
Derecognition (change of category)
0
-1,411
-1,740
-3,151
New investments
195
605
0
800
Fair value of net assets acquired (Lerta)
6,343
0
0
6,343
Balance at 31 December 2022
56,055
7,817
0
63,872
Photon Energy N.V.
Financial Section
Annual Report 2022
Notes to the Company Financial Statements for the Year Ended 31 December 2022
154
2022
A participating legal Company is under Dutch law a participation
which exercises significant influence over the operating and finan-
cial policies (hereinafter: participation), valued using the equity
method. This method means that the carrying amount of the invest-
ment is increased or decreased by the share in the results and
changes in equity of the associate, less the dividend from the par-
ticipation. The carrying amount, the share in the results and
changes in equity are determined according to the principles of the
holding. Result from the participation is recognised only in the case
of net assets value higher than nil. Positive assets value is recog-
nised only in case the previous negative value is covered suffi-
ciently by the actual positive results from the participation.
Therefore, the direct changes in equity in the participations of PE
NV are included in the standalone financial statements of the Com-
pany.
The direct equity movements of the subsidiaries of PENV consist
of:
1)
Revaluation of assets valued at fair value in the participations
(decrease of value of assets)
2)
Foreign currency translation differences in the participations
3)
Effective portion of hedging derivatives in the participations
The Company measures interest in group companies at net asset
value. Net asset value is based on the measurement of assets,
provisions and liabilities and determination of profit based on the
principles applied in the consolidated financial statements.
In case
the net asset value is negative the Company considers the value
of participation to be EUR 1. No impairment provision to the finan-
cial fixed assets has been recorded as at 31 December 2022 nor
2021. The unrecognized share of the loss for the period in the par-
ticipation valued on the basis of equity accounting that is valued at
zero as equal to EUR 3,222 thousand for the period and EUR
11,085 thousand cumulatively
.
There are no obligations to cover the losses of the subsidiaries be-
yond the amount of unpaid share capital and therefore, the value
of participations is not further increase by negative equity amounts.
Other investments include investment of the Company where the
Company has no significant influence and other financial instru-
ments, and are valued at fair value.
Changes in fair value of investments into equity instruments are
recognised in Revaluation reserve in equity, changes in fair value
of other financial instruments (derivatives) are recognised in
Income statement in line Changes in value of fixed asset invest-
ments.
The Company, with statutory seat in Amsterdam, is the holding
company and has the financial interests as disclosed under note
40.
The parent entity is not liable for the deficits of its subsidiaries and
therefore no liability resulting from this has been recognized.
Business combination performed in 2022
Lerta Spółka Akcyjna is a joint
-stock company organized under the
laws of Poland and a fully owns directly nine subsidiaries in five
countries (hereinafter referred to as “Lerta Group”). The control
and 100% ownership was obtained
fully as at 31 December 2022.
The acquirer has decided not to dispose any of the acquiree activ-
ities because of the acquisition. Total consideration paid for the ac-
quisition equals to EUR 21,349 thousand. As a result of this
transaction, company booked goodwill in amount of EUR 15,005
thousand and fair value of net assets acquired in amount of EUR
6,343 thousand, which relates mostly to the capacity market con-
tracts (EUR 6,047 thousand) as described also in the note 8 Busi-
ness combination and note 22 Intangible assets
.
45.
Accounts Receivable from Group Companies
In thousands of EUR
31 December 2022
31 December 2021
Accounts receivable from group companies – non current
776
25,060
Accounts receivable from group companies – current
97,516
70,165
Total loans provided
98,292
95,225
Movement schedule for loans provided:
In thousands of EUR
2022
2021
Opening balance
95,225
71,972
Newly provided loans
88,030
34,827
Accrued interest
2,502
1,090
Loans repayments/transfers
-83,492
-13,367
FX differences
-3,973
703
Closing balance
98,292
95,225
Photon Energy N.V.
Financial Section
Annual Report 2022
Notes to the Company Financial Statements for the Year Ended 31 December 2022
155
The balance of loans provided consists of the loans provided pri-
marily to the companies within the Group and its increase is caused
by provision of new funds during the year to the subsidiaries. Inter-
est charged by PENV to its subsidiaries is 3% and the loans have
mostly a short-term character and are due within one-year. De-
crease in non-current accounts receivable from group companies
was caused by the early repayment of the portion of the loan, and
the outstanding amount is due in more than 1 year period.
The credit loss allowance for Loans provided to related parties is
determined according to internal analysis of recoverability of these
loans. Based on this analysis no ECL provisions were created as
at 31 December 2022 and 31 December 2021.
46.
Current Assets
In thousands of EUR
31 December 2022
31 December 2021
Trade debtors
11,750
7,953
Receivables from group companies
97,516
70,165
Other accounts receivable and prepayments
3,183
3,162
Cash at banks and in hand
1,994
20,602
Total current assets
114,443
101,883
Trade receivables fall due in less than one year, unless otherwise
disclosed below.
The fair value of the receivables approximates the book value, due
to their short-term character.
Trade debtors at 31 December 2022 include trade receivables from
companies within the Group of EUR 11,750 thousand (2021: EUR
7,953 thousand).
Receivable from group companies of EUR 97,516 thousand (2021:
70,165 thousand) represent loans provided to group companies.
These loans are due on 31 December 2023 and therefor are pre-
sented as current assets, interest charged on these loans is 3%
.
Other accounts receivable include mainly loans receivables pro-
vided outside the Group of EUR 1,841 thousand (2021: 1,929 thou-
sand) and other short-term assets of EUR 837 thousand (2021:
EUR: 801 thousand) and are due within one year.
Receivables from related parties (Georg Hotar and Michael Gart-
ner) of EUR 472 thousand (2021: EUR 411 thousand) are included
in Other account receivable, see also note 39 of consolidated fi-
nancial statements. Interest charged on these loans is 3% and the
loans have mostly a short-term character.
Cash at bank and in hand are freely disposable
.
Photon Energy N.V.
Financial Section
Annual Report 2022
Notes to the Company Financial Statements for the Year Ended 31 December 2022
156
47.
Shareholders’ Equity
47.1
Reconciliation of Movement in Capital and Reserves
In thousands of EUR
Note
Issued
share
capital
Own
treasury
shares
Share
premium
Revaluation
reserve
Currency
translation
reserve
Hedging
reserve
Treasury
shares
reserve
Non-
controlling
interest
Retained
earnings
Unappro-
priated
result
Total
equity
Balance at 1 January 2021
600
-87
37,057
15,644
-406
223
87
-
6,320
3,639
63,077
Foreign currency translation differences in
participating interest
-
-
-
-
-640
-
-
-
-
-
-640
Transfer to retained earnings
-
-
-
-
-
-
-
-
3,639
-3,639
0
Derivatives
-
-
-
-
-
2,356
-
-
-
-
2,356
Revaluation of PPE and other investments
-
-
-
3,393
-
-
-
-
-
-
3,393
Other movements
-
-
-
-
-
-
-
-
-14
-
-14
New shares placed with premium
-
49
7,497
-
-
-
-49
-
-
-
7,497
Actual result
-
-
-
-
-
-
-
-
-
3,667
3,667
Balance at 31 December 2021
600
-38
44,554
19,037
-1,046
2,579
38
-
9,945
3,667
79,336
Foreign currency translation differences in
participating interest
-
-
-
-
-1,933
-
-
-
-
-
-1,933
Transfer to retained earnings
-
-
-
-
-
-
-
-
3,667
-3,667
0
Derivatives
-
-
-
-
-
2,515
-
-
-
-
2,515
Revaluation of PPE and other investments
-
-
-
1,037
-
-
-
-
-
-
1,037
Other movements
-
38
300
-336
-
-
-25
-
336
-
313
Acquisition of subsidiary
-
-
8,782
-
-
-
-
-
-
-
8,782
Actual result
-
-
-
-
-
-
-
-
-
16,965
16,965
Balance at 31 December 2022
600
-
53,636
19,738
-2,979
5,094
13
-
13,948
16,965
107,015
Photon Energy N.V.
Financial Section
Annual Report 2022
Notes to the Company Financial Statements for the Year Ended 31 December 2022
157
47.2
Share Capital and Share Premium
Ordinary Shares
The Company’s share capital is EUR 600,000 divided into
60,000,000 shares with a nominal value of EUR 0.01 each. The
share capital is fully paid-up. Each of the 60,000,000 shares repre-
sent one vote at the General Meeting.
The holders of ordinary shares (except of Treasury shares) are en-
titled to receive dividends as declared from time to time and are
entitled to one vote per share at shareholders’ meetings of the
Company.
Treasury Shares
At 31 December 2022 treasury shares included 1,332,797 ordinary
shares of the Company (2021: 3,747,635 ordinary shares) owned
directly by the Company in the nominal value of 0.01 EUR per
share. There is no pledge imposed on the shares. These ordinary
shares carry no voting rights at the Shareholders Meeting.
Share premium represents the excess of contributions received
over the nominal value of shares issued. Proceeds from allocation
of treasury shares to employees in excess to nominal value of
shares are also recorded in Share premium.
Nominal value of sold
treasury shares is recorded against Treasury shares reserve.
There are no costs associated with the issue of the shares that
could be deducted from the amount of share premium, so all
amount of premium is considered to be fully paid for tax purposes.
On 25 June 2021, the Company announced the results of an offer-
ing of its existing treasury shares addressed to qualified investors.
In total, 5 million shares were placed at a price of PLN 7.0, which
corresponds to the gross amount of PLN 35.0 million. Total pro-
ceeds of EUR 7,766 thousand from the placement net of placement
costs of EUR 442 thousand were recorded in Share premium.
On 20 December 2022 Photon Energy concluded an investment
agreement with the founders of Lerta, i.e. Tomala Investments al-
ternatywna spółka inwestycyjna sp. z.o.o. and Krzysztof Drożyński
(‘Founders’ and/or each “Founder”) and certain executive contracts
to this agreement. Under the terms of this agreement, an additional
equity stake of 7,449,750 shares, representing 43.25% of Lerta’s
equity was acquired by the Group for a combination of a PLN 2,160
thousand (EUR 462 thousand) cash consideration, the transfer of
2,300,110 treasury shares in Photon Energy and 1,238,521 Photon
Energy shares to be newly issued in an in-kind contribution. As of
31 December 2022, Photon Energy N.V. acquired 4,972,708
shares in Lerta in the exchange of 2,300,110 treasury shares in
Photon Energy and the above cash consideration to the Founders.
As a result Photon Energy increased its shareholding in Lerta to
85.62%.
On 1 February 2023, on the basis of a General Meeting authoriza-
tion from 31 May 2021, the Board of Directors decided to issue
1,238,521 new shares with a nominal value of EUR 0.01 each. The
new shares were issued against a contribution in-kind consisting of
2,477,042 shares in Lerta S.A., in line with the above-mentioned
investment agreement. Upon the completion of this transaction
Photon Energy Group increased its shareholding in Lerta to 100%
while the Founders of Lerta hold jointly approximately 5.78% of
Photon Energy’s fully issued share capital. The Founders are sub-
ject to a lock-up agreement on their Photon Energy’s shares and
have provided representations and warranties commensurate with
this type of transaction. Borys Tomala, one of the Founders, will
manage the Group’s New Energy Division into which Lerta will be
integrated while Krzysztof Drożyński, the other Foun
der, will act as
Director of Advanced Technologies and remain responsible for the
development of the AI-driven Virtual Power Plant software plat-
form. The Founders will be subject to an earn-out and management
incentive plan which, subject to the achievement of certain eco-
nomic parameters by the New Energy Division in the financial year
2025, will entitle them to a maximum of 2,383,846 additional Pho-
ton Energy shares.
Other movement in the share premium of EUR 300 thousand in-
cludes payments to employees paid by shares.
Other movement in revaluation reserve and retained earnings of
EUR 336 thousand is reclassification of pre-acquistion revaluation
of Lerta booked historically in Other comprehensive income and
reclassified as part of the acquisition process.
Reserves
Reserves of the Company consist of the revaluation reserve, the
currency translation reserve and the hedging reserve.
The revaluation reserve arises on the revaluation of photovoltaic
power plant owned by the participation(s) and on the revaluation of
fixed financial assets.
Revaluation reserve from PPE amounted to
EUR 16,813 thousand at 31 December 2022 (31 December 2021:
EUR 19,037 thousand) and revaluation reserve arising from reval-
uation of other financial investments amounted to EUR 2,925 thou-
sand at 31 December 2022 (31 December 2021: EUR 2,657
thousand).
Currency translation reserve includes all foreign translation ex-
change differences in the participations and amounted to EUR
-2,979 thousand at 31 December 2022 (31 December 2021: EUR
-1,046 thousand).
The hedging reserve includes results from hedging derivatives in
the participations and amounted to EUR 5,094 thousand at 31 De-
cember 2022 (31 December 2021: EUR 2,580 thousand).
Unappropriated Result
To the General Meeting of Shareholders the following appropria-
tion of the result 2022 will be proposed: the profit of EUR 16,965
thousand to be transferred and added to the retained earnings item
in the shareholders’ equity.
Unappropriated Result 2022 contains the amount of EUR 127 thou-
sand of net profit of joint ventures, where the entity cannot control
the distribution of these profits. This represent the legal reserve fol-
lowing article 389 subsection 6 of Book 2 of the Dutch Civil Code.
This profits are regularly distributed to JV partners. The amount
of EUR 146 thousand of net profit of joint ventures retained in 2021
was distributed to the Company in 2022
.
Photon Energy N.V.
Financial Section
Annual Report 2022
Notes to the Company Financial Statements for the Year Ended 31 December 2022
158
Movement schedule of retained earnings:
In thousands of EUR
Balance at 1 January 2021
6,320
Movements in 2021
3,625
Closing balance 31 December 2021
9,945
Movements in 2022
4,003
Closing balance 31 December 2022
13,948
Reconciliation of consolidated group equity with company equity
In thousands of EUR
31 December 2022
31 December 2021
Group equity
70,475
51,538
Non-controlling interest
-197
-150
Group equity attributable to owners of the Company
70,672
51,688
Non-attributable losses of financial interest recognised in equity*
36,343
27,648
Shareholders’ equity (Company)
107,015
79,336
In thousands of EUR
31 December 2022
31 December 2021
Group total comprehensive income
7,672
2,095
Profit/loss attributable to non-controlling interest
-47
-29
Group total comprehensive income attributable to the owners of the company
7,719
2,124
Non-attributable losses of financial interest recognised in profit and loss*
9,246
1,543
Net result (Company)
16,965
3,667
*Non-attributable losses of financial interest recognised in equity relate to negative net assets of participations which are included in consoli-
dated equity at their value but are not recognised in standalone financial statement of the Company, due to the fact, that value of the partici-
pation is set at EUR 1, see also note 44
.
48.
Long-Term Debt
In thousands of EUR
31 December 2022
31 December 2021
Other bonds – non current
76,511
57,223
Deferred tax
1,149
0
Accounts payable to group companies
2,247
2,180
Total Long-Term Debt
79,907
59,403
As at 31 December 2022 none of the Long term liabilities are due in more than 5 years. As at 31 December 2021 Long term liabilities of 58,575
thousand were due in more than 5 years.
Other bonds
In thousands of EUR
31 December 2022
31 December 2021
Other bonds – current
3,670
24,107
Other bonds – non current
76,511
57,223
Total
80,181
81,330
Photon Energy N.V.
Financial Section
Annual Report 2022
Notes to the Company Financial Statements for the Year Ended 31 December 2022
159
Movement schedule for issued bonds:
In thousands of EUR
2022
2021
Opening balance
81,330
46,739
Newly issued bonds
22,500
56,092
Placement cost paid
-331
-782
Repayments of principal
-23,719
-21,281
Accrued interest
6,213
4,251
Coupon paid
-5,898
-3,751
FX differences
86
62
Closing balance
80,181
81,330
In November 2021, the Group has issued new EUR green bond
with annual coupon of 6.50% and maturity in November 2027 (six-
year maturity). The EUR green bond 2021/27 was offered to bond-
holders of the existing 2017/2022 EUR bond in form of an ex-
change offer and as a result, EUR 21,281 thousand were
exchanged. The principal amount of EUR 50,000 thousand was
oversubscribed and the overall volume of the new green bond was
increased to EUR 55,000 thousand. Total amount of placement
costs paid for the issuance/exchange of the Green bond amounted
to EUR 1,202 thousand. Exchange bonus paid to existing bond-
holder of EUR 420 thousand was recognised in income statement
while the remaining amount of EUR 782 thousand is included in the
amortised amount of the Issued bonds and will be recognised as
interest expense from Issued bonds using effective interest rate.
The EUR green bonds 2021/27 are traded on the unregulated mar-
ket segments of the Stock Exchanges in Frankfurt, Berlin, Ham-
burg, Hannover, Munich, Düsseldorf and Stuttgart. The net
proceeds of the transaction are allowed to be used only for financ-
ing and expanding eligible assets in accordance with its Green Fi-
nancing Framework.
In October 2017, the Group had issued EUR bonds with an annual
coupon of 7.75% and maturity in October 2022. The outstanding
nominal amount as of 31 December 2021 was EUR 24,419 thou-
sand, being due for repayment in October 2022, and was pre-
sented in Current liabilities.
EUR bonds 2017/22 were traded on the unregulated market seg-
ments of the Stock Exchanges in Frankfurt, Berlin, Hamburg, Han-
nover, Munich, Düsseldorf and Stuttgart
.
In May 2022, the Company tapped its EUR green bond 2021/27 in
the amount of EUR 10,000 thousand to a total outstanding amount
of EUR 65 million. In October 2022 and November 2022, the Com-
pany tapped the bond in the amount of another EUR 12,500 thou-
sand to a total outstanding amount of EUR 77,500 thousand.
The bonds from the second tap in autumn, were also offered to
bondholders of the existing 2017/2022 corporate bonds in form of
an exchange offer with a 1.5% loyalty premium plus the difference
in net accrued interest on each exchanged bond. After the ex-
change the outstanding volume of the corporate EUR bond
2017/22 was EUR 15,232 thousand and was fully repaid together
with the final interest payment to the bondholders on 27 October
2022. Total amount of placement costs paid for the tapping/ex-
change of the Green bond amounted to EUR 451 thousand. Ex-
change bonus paid to existing bondholder of EUR 114 thousand
was recognised in Gains less losses on derecognition of financial
liabilities while the remaining amount of EUR 337 thousand is in-
cluded in the amortised amount of the Issued bonds and will be
recognised as interest expense from Issued bonds using effective
interest rate.
CZK bond issued in October 2016 has an annual coupon of 6%,
with an outstanding nominal amount of EUR 3,146 thousand as of
31 December 2022 (2021: EUR 3,052 thousand) which is due in
December 2023 and has been presented in Current liabilities. CZK
bonds 2016/23 are traded on the unregulated market segment of
the Prague Stock Exchange.
Accrued interest of EUR 524 thousand at 31 December 2022 for
EUR Green bond (2021: EUR 372 thousand) is presented within
current liabilities
.
Movement schedule for non current liabilities:
In thousands of EUR
2022
2021
Opening balance
2,180
2,064
FX revaluation
67
116
Closing balance
2,247
2,180
Photon Energy N.V.
Financial Section
Annual Report 2022
Notes to the Company Financial Statements for the Year Ended 31 December 2022
160
49.
Current Liabilities
In thousands of EUR
31 December 2022
31 December 2021
Accounts payable from group companies
3,870
1,008
Other bonds and private loans
3,670
24,107
Trade payables
626
3,493
Accruals and deferred income
177
249
Other liabilities
141
12
Total Current Liabilities
8,484
28,869
All current liabilities fall due in less than one year, unless otherwise
disclosed below.
Other bonds and private loans included in current liabilities as
31 December 2022 include CZK bonds which matures in Decem-
ber 2023 and short-term portion of the Green bond.
All loans included in the above table are provided by the subsidiar-
ies of the entity
.
Remaining other payables consisted of Company’s liabilities from
VAT, liabilities towards employees, advances or resulting from the
cash transfers within the Group.
Accounts payable from group companies of EUR 3,851 thousand
represent loans from group companies. These loans are due on 31
December 2023 and therefor are presented as current liabilities,
interest charged on these loans is 3%.
The fair value of the accounts payable from group companies ap-
proximates the book value, due to their short-term character.
50.
Financial Instruments
50.1
General
The Group has exposure to the following risks from its use of finan-
cial instruments:
►
Credit risk.
►
Liquidity risk.
►
Market risk.
In the notes to the consolidated financial statements information is
included about the Group’s exposure to each of the above risks,
the Group’s objectives, policies and processes for measuring and
managing risk, and the Group’s management of capital.
These risks, objectives, policies and processes for measuring and
managing risk, and the management of capital also apply to the
company financial statements of Photon Energy N.V.
No derivative financial instruments are being used at parent com-
pany level.
50.2
Fair Value
The fair value of the financial instruments stated on the balance
sheet, including cash at bank and in hand and current liabilities, is
close to the carrying amount.
Fair value of long term liabilities to group companies is close to the
carrying amount.
Fair value of issued bonds is disclosed below:
Issued bonds
In thousands of EUR
Amortised amount
Fair value
2022
2021
2022
2021
Current liabilities
CZK bond 2016/23
3,146
0
3,127
0
Green bond 2021/27
524
0
0
0
EUR bond 2017/22
0
23,735
0
24,350
Non-current liabilities
EUR bond 2017/22
0
54,602
0
57,201
Green bond 2021/27
76,511
0
70,284
0
CZK bond 2016/23
0
2,993
0
2,832
Total
80,181
81,330
73,411
84,383
Photon Energy N.V.
Financial Section
Annual Report 2022
Notes to the Company Financial Statements for the Year Ended 31 December 2022
161
50.3
Liquidity risk
Liquidity risk is the risk that the Company will not be able to meet
its financial obligations as they fall due. The table below shows lia-
bilities at 31 December 2022 by their remaining contractual ma-
turity. The amounts disclosed in the maturity table are the
contractual undiscounted cash flows. Such undiscounted cash
flows differ from the amount included in the statement of financial
position because the statement of financial position amount is
based on discounted cash flows.
In thousands of EUR
Carrying
amount
1 – 12
months
1 – 2 years
2 – 5 years
More than
5 years
Contractual
cash flows
Financial liabilities
Accounts payable to group S-T
3,870
3,986
0
0
0
3,986
Accounts payable to group L-T
2,447
2,596
0
0
2,596
Bonds
80,181
8,341
5,038
92,613
0
105,992
Total future payments, including future
principal and interest payments
86,498
12,327
7,634
92,613
0
112,574
51.
Revenues
In thousands of EUR
2022
2021
Revenues from provision of services
5,472
3,269
Total revenues
5,472
3,269
Revenues from provision of services of EUR 5,472 thousand
(2021: 3,269 thousand) represent management services provided
to the companies in the Group charged as management fees within
the Group. Out of the total revenues, EUR 2,435 thousand was
charged in Netherlands, EUR 1,121 thousand was charged in Ro-
mania, EUR 719 thousand was charged in the Czech republic,
EUR 543 thousand was charged in Hungary, EUR 264 thousand
was charged in Slovakia, EUR 218 thousand was charged in
Switzerland, the remaining amount of EUR 172 thousand was
charged in Poland, Australia and Germany.
Gain on derecognition of associate of EUR 2,182 thousand relates
to the revaluation of the original share in Lerta entity before the
acquisition of the controlling interest as at the year-end as de-
scribed in note 8
.
52.
Other Operating Expenses
In thousands of EUR
2022
2021
Consulting services
-4,299
-3,348
Audit and accounting services
-288
-221
Investment relations costs
-41
-64
Legal
-88
-47
Miscellaneous
-746
-37
Other Operating Expenses
-5,462
-3,717
Audit fees are presented separately in note 57
.
Photon Energy N.V.
Financial Section
Annual Report 2022
Notes to the Company Financial Statements for the Year Ended 31 December 2022
162
53.
Other Interest Income and Similar Income
In thousands of EUR
2022
2021
Interest Income
2,587
1,721
Revaluation of financial participation
615
0
Other Income
0
422
Other Interest Income and Similar Income
3,202
2,144
Interest Income from group companies and related parties amounted in 2022 to EUR 2,587 thousand (2021: EUR 1,656 thousand). Revalu-
ation of EUR 615 thousand relates to revaluation of Raygen investment.
54.
Other Interest Expense and Similar Expense
In thousands of EUR
2022
2021
Interest expense
-6,374
-4,485
Exchange bonus paid
-114
-420
Other expense
-558
-43
Other Interest Expense and Similar Expense
-7,046
-4,948
Exchange bonus paid to existing bondholder of EUR 114 thousand
was recognised in Other Interest Expense and Similar Expense.
Remaining amount of placement fees paid of EUR 337 thousand is
included in the amortised amount of the Issued bonds and will be
recognised as interest expense from Issued bonds using effective
interest rate. (see also note 48)
.
Interest expense from group companies amounted in 2022 to EUR
126 thousand (2021: EUR 208 thousand).
Other expense of EUR 558 thousand (2021: EUR 43 thousand)
include mainly FX losses and bank fees
.
55.
Share in Results from Participating Interests
An amount of EUR 18,423 thousand (profit) of share in results from participating interests relates to group companies (2021: profit of EUR
5,283 thousand).
56.
Employee Benefits and Information
The company has only 1 employee (2021: 1 employee) who is
working in the Netherlands. No employees are working outside of
the Netherlands.
The two members of the board of directors are not employees of
the Company and did not receive any compensation during 2022
nor 2021 for their duties serving on the board of directors for the
Group of entities.
More information on management compensation is included in
note 39 of consolidated financial statements and note 54 of
standalone financial statements.
Photon Energy N.V.
Financial Section
Annual Report 2022
Notes to the Company Financial Statements for the Year Ended 31 December 2022
163
57.
Fees of the Auditor
With reference to Section 2:382a(1) and (2) of the Netherlands Civil Code, the following fees for the financial year have been charged by
PricewaterhouseCoopers to the Company in 2022:
2022:
In thousands of EUR
PricewaterhouseCoopers
Accountants N.V.
Other PricewaterhouseCoopers
firms and affiliates
Total
Statutory audit of annual accounts
126
120
246
Other audit procedures
0
0
0
Tax services
0
0
0
Other non-audit services
6
0
6
With reference to Section 2:382a(1) and (2) of the Netherlands Civil Code, the following fees for the financial year have been charged by
PricewaterhouseCoopers to the Company in 2021:
2021:
In thousands of EUR
PricewaterhouseCoopers
Accountants N.V.
Other PricewaterhouseCoopers
firms and affiliates
Total
Statutory audit of annual accounts
116
98
214
Other audit procedures
0
0
0
Tax services
0
0
0
Other non-audit services
0
0
0
58.
Related Parties
58.1
Transactions with Key Management
Personnel
Key Management Personnel Compensation
Key management personnel did not obtain any compensation for
their activity for Photon Energy N.V. in 2022 nor 2021. Further in-
formation on key management compensation is included in the
consolidated financial statements for 2022, note 39
.
Key Management Personnel and Director
As at 31 December 2022 the directors of the Company control
72.65% (2021: 75.94%) of the voting shares of the Company. The
Directors hold positions in other group entities that result in having
control or significant influence over the financial or operating poli-
cies of these entities.
Emoluments of Directors and Supervisory Directors
No emoluments, including pension obligations as intended in Sec-
tion 2:383(1) of the Netherlands Civil Code were charged in the fi-
nancial period to the Company.
Photon Energy N.V.
Financial Section
Annual Report 2022
Notes to the Company Financial Statements for the Year Ended 31 December 2022
164
59.
Cash Flow Statement
Cash Flow Statement of the Company for the years 2022 and comparison to 2021:
In thousands of EUR
2022
2021
Cash flows from operating activities
Loss/profit for the year before tax
-1,458
-1,603
Adjustments for:
Gain on disposal of financial investments
0
-464
Net finance costs
990
3,161
Change in FV of derivatives
0
-1,242
Other non cash items
-870
1,358
Changes in:
Trade and other receivables
-7,523
-17
Trade and other payables
52
1,143
Income tax paid
0
-13
Net cash from operating activities
-8,809
2,323
Cash flows from investing activities
Acquisition of property, plant and equipment
0
-6
Acquisition of intangibles assets
-32
0
Acquisition of subsidiaries, goodwill, including loans provided to group companies
-7,183
-24,876
Acquisition of other investments
-119
-4,325
Proceeds from sale of investments
757
1,560
Dividends received
1,784
6,690
Net cash used in investing activities
-4,793
-20,957
Cash flows from financing activities
Proceeds from issuance of ordinary shares
0
7,754
Proceeds from issuing bonds
22,500
56,092
Placement costs paid
-331
-1,202
Repayment of long term liabilities/bonds
-23,719
-21,281
Interest payments
-6,043
-3,962
Interest received
2,587
1,721
Net cash from financing activities
-5,006
39,122
Net decrease/increase in cash and cash equivalents
-18,608
20,488
Cash and cash equivalents at 1 January
20,602
114
Cash and cash equivalents at 31 December
1,994
20,602
Amsterdam, 24 April 2023
The Board of Directors:
Georg Hotar, Director
Michael Gartner, Director
The Supervisory Board:
Marek Skreta, Chairman
Bogusława Skowroński, Member
Ariel Sergio Davidoff, Member
Original signed
.
165
Other Information
Photon Energy N.V.
Financial Section
Annual Report 2022
Other Information
166
Other Information
I.
Provisions in the Articles of Association
Governing the Appropriation of Profit
According to article 20 of the company’s Articles of Association, the
profit is at the disposal of the General Meeting of Shareholders,
which can allocate the profit wholly or partly to the general or spe-
cific reserve funds.
The Company can only make payments to the shareholders and
other parties entitled to the distributable profit for the amount the
shareholders’ equity are greater than the paid-up and called-up
part of the capital plus the legally required reserves.
Refer to the note 40 of the Consolidated financial statements
.
II.
Independent Auditor’s Report
The independent auditor’s report is set forth on the next pages.
PHUADNRAKTQ5-196943974-99
PricewaterhouseCoopers Accountants N.V., Thomas R. Malthusstraat 5, 1066 JR Amsterdam, P.O. Box 90357,
1006 BJ Amsterdam, the Netherlands
T: +31 (0) 88 792 00 20, F: +31 (0) 88 792 96 40, www.pwc.nl
‘PwC’ is the brand under which PricewaterhouseCoopers Accountants N.V. (Chamber of Commerce 34180285), PricewaterhouseCoopers Belastingadviseurs N.V.
(Chamber of Commerce 34180284), PricewaterhouseCoopers Advisory N.V. (Chamber of Commerce 34180287), PricewaterhouseCoopers Compliance Services B.V.
(Chamber of Commerce 51414406), PricewaterhouseCoopers Pensions, Actuarial & Insurance Services B.V. (Chamber of Commerce 54226368),
PricewaterhouseCoopers B.V. (Chamber of Commerce 34180289) and other companies operate and provide services. These services are governed by General Terms
and Conditions (‘algemene voorwaarden’), which include provisions regarding our liability. Purchases by these companies are governed by General Terms and Conditions
of Purchase (‘algemene inkoopvoorwaarden’). At www.pwc.nl more detailed information on these companies is available, including these General Terms and Conditions
and the General Terms and Conditions of Purchase, which have also been filed at the Amsterdam Chamber of Commerce.
Independent auditor’s report
To: the general meeting of shareholders and the supervisory board of Photon Energy N.V.
Report on the financial statements 2022
Our opinion
In our opinion:
•
the consolidated financial statements of Photon Energy N.V. together with its subsidiaries (‘the
Group’) give a true and fair view of the financial position of the Group as of 31 December 2022
and of its result and cash flows for the year then ended in accordance with International
Financial Reporting Standards as adopted by the European Union (‘EU-IFRS’) and with Part 9
of Book 2 of the Dutch Civil Code;
•
the standalone financial statements of Photon Energy N.V. (‘the Company’) give a true and fair
view of the financial position of the Company as of 31 December 2022 and of its result for the
year then ended in accordance with Part 9 of Book 2 of the Dutch Civil Code.
What we have audited
We have audited the accompanying financial statements 2022 of Photon Energy N.V., Amsterdam.
The financial statements comprise the consolidated financial statements of the Group and the
standalone financial statements.
The consolidated financial statements comprise:
•
the consolidated statement of financial position as of 31 December 2022
•
the following consolidated statements for the year ended 31 December 2022: statement of
comprehensive income, statement of changes in equity, and statement of cash flows; and
•
the notes to the consolidated financial statements, comprising significant accounting policies
and other explanatory information.
The standalone financial statements comprise:
•
the company balance sheet as of 31 December 2022
•
the company income statement for the financial year ended 31 December 2022, and
•
the notes to the company financial statements for the year ended 31 December 2022, comprising
a summary of the accounting policies applied and other explanatory information.
The financial reporting framework applied in the preparation of the financial statements is EU-IFRS
and the relevant provisions of Part 9 of Book 2 of the Dutch Civil Code for the consolidated financial
statements and Part 9 of Book 2 of the Dutch Civil Code for the company financial statements.
Photon Energy N.V. - PHUADNRAKTQ5-196943974-99
Page 2 of 15
The basis for our opinion
We conducted our audit in accordance with Dutch law, including the Dutch Standards on Auditing.
We have further described our responsibilities under those standards in the section
‘Our responsibilities for the audit of the financial statements’ of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
Independence
We are independent of Photon Energy N.V. in accordance with the European Union Regulation on
specific requirements regarding statutory audit of public-interest entities, the ‘Wet toezicht
accountantsorganisaties’ (Wta, Audit firms supervision act), the ‘Verordening inzake de
onafhankelijkheid van accountants bij assuranceopdrachten’ (ViO, Code of Ethics for Professional
Accountants, a regulation with respect to independence), and other relevant independence regulations
in the Netherlands. Furthermore, we have complied with the ‘Verordening gedrags- en beroepsregels
accountants’ (VGBA, Dutch Code of Ethics).
Our audit approach
We designed our audit procedures with respect to the key audit matters, fraud and going concern,
and the matters resulting from that, in the context of our audit of the financial statements as a whole
and in forming our opinion thereon. The information in support of our opinion, such as our findings
and observations related to individual key audit matters, the audit approach fraud risk, and the audit
approach going concern was addressed in this context, and we do not provide a separate opinion or
conclusion on these matters.
Overview and context
Photon Energy N.V. is a joint-stock company that mainly specialises in the development, construction,
and operation of photovoltaic power plants. The consolidated financial statements of the Group
incorporate the financial statements of the Company and entities (including special purpose entities)
controlled by the Company (its subsidiaries); therefore, we considered our group audit scope and
approach as set out in the section ‘The scope of our group audit’. We paid specific attention to the areas
of focus driven by the operations of the Group, as set out below.
As part of designing of our audit, we determined materiality and assessed the risks of material
misstatement in the financial statements. We considered where management made important
judgements, for example in respect of significant accounting estimates that involved making
assumptions and considering future events that are inherently uncertain. In these considerations,
we paid attention to, among other matters, the assumptions underlying the physical and transition risk
related to climate change. In Note 2.4 of the financial statements, management describes the areas of
judgement in applying accounting policies and the key sources of estimation uncertainty. Given the
significant estimation uncertainty and related higher inherent risks of material misstatement in the
areas of valuation of photovoltaic power plants, valuation of the call option for the purchase of
investments, and purchase price allocation accounting in relation to investment acquisition,
we considered those to be a key audit matters as set out in the section ‘Key audit matters’ of this report.
Recognition of revenue from construction contracts is not a key audit matter in 2022 based on
decreased proportion in the total revenue.
Photon Energy N.V. - PHUADNRAKTQ5-196943974-99
Page 3 of 15
In 2022, Group management continued assessing possible effects of climate change on its financial
position. For more information, please refer to the sections ‘Climate Change-related Risks’, ‘Corporate
Social Responsibility’, and ‘Sustainable Investments’ of the Director’s report in which management
defined potential physical as well as transitional risks, risk governance, metrics, and investment
strategy. We discussed Photon Energy N.V.’s assessment and governance thereof with management
and evaluated the potential impact on the financial position, including underlying assumptions and
estimates. The expected effects of climate change are not considered a key audit matter.
Apart from key audit matters and the impact from the climate change on our audit, as described above,
other areas of focus in our audit were related to recognition of revenue from construction contracts,
valuation of derivatives, valuation of other investments, classification of the ‘contracts for difference’
revenue model, and consolidation of special purpose entities.
We ensured that the audit team included the appropriate skills and competences that are needed for
the audit of a photovoltaic power business. We therefore included experts and specialists in the areas
of, among others, information technology, taxation, and valuation in our team.
The outline of our audit approach was as follows:
Materiality
•
Overall materiality: €594,000.
Audit scope
•
We conducted audit work at the head office of the Group. Because of
the centralised structure, the entire Group was audited by one
engagement team.
•
All subsidiaries of the Group (components) were included in the scope
of the audit
•
Audit coverage: We performed the audit of the financial statements for
the Group as a whole and tested all material financial statement line
items without segregation per the components.
Key audit matters
•
Valuation of the photovoltaic power plants.
•
Valuation of the call option for the purchase of investments.
•
Purchase price allocation accounting in relation to investment
acquisition.
Materiality
The scope of our audit was influenced by the application of materiality, which is further explained in
the section ‘Our responsibilities for the audit of the financial statements’.
Based on our professional judgement, we determined certain quantitative thresholds for materiality,
including the overall materiality for the financial statements as a whole as set out in the table below.
These, together with qualitative considerations, helped us to determine the nature, timing, and extent
of our audit procedures on the individual financial statement line items and disclosures and to
evaluate the effect of identified misstatements, both individually and in aggregate, on the financial
statements as a whole and on our opinion.
Photon Energy N.V. - PHUADNRAKTQ5-196943974-99
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Overall group
materiality
€594,000 (2021: €239,000).
Basis for
determining
materiality
We used our professional judgement to determine overall materiality. As a
basis for our judgement, we used 2.5% of EBITDA.
Rationale for
benchmark applied
We used EBITDA as the primary benchmark, a generally accepted auditing
practice, based on our analysis of the common information needs of the
users of the financial statements. On this basis, we believe that EBITDA is
the most relevant metric for the financial performance of the Group, more
clearly representing the operating performance of the Group compared to
the highly volatile profit before tax in recent years.
Component
materiality
In relation to ISA 600, we did not allocate the overall group materiality but
targeted all material financial statement line items regardless of which
component’s transactions it contains.
We also take misstatements and/or possible misstatements into account that, in our judgement,
are material for qualitative reasons.
We agreed with the supervisory board that we would report to them any misstatement identified
during our audit above €59,400 (2021: €23,900) as well as misstatements below that amount that,
in our view, warranted reporting for qualitative reasons.
The scope of our group audit
Photon Energy N.V. is the parent company of a Group of companies operating in the Czech Republic,
Hungary, Poland, Romania, Slovakia, Australia, and some other countries with limited operational
activities. The financial information of these entities is included in the consolidated financial
statements of Photon Energy N.V. Please refer to Note 40 of the consolidated financial statements for
the details of the Group structure.
We tailored the scope of our audit to ensure that we, in aggregate, provide sufficient coverage of the
financial statements for us to be able to give an opinion on the financial statements as a whole, taking
into account the management structure of the Group, the nature of operations of its components,
the accounting processes and controls, and the markets in which the components of the Group
operate. In establishing the overall group audit strategy and plan, we determined the type of work
required to be performed at component level.
We conducted audit work over the financial statements as a whole, including all components and
covered all significant financial statements line items and transactions of the Group.
The Group accounting function is centralised in Prague and the Group is managed as a single
operating unit with multiple segments. The Group applies a centralised IT system for its business
processes and financial reporting.
By performing the procedures above, we have been able to obtain sufficient and appropriate audit
evidence on the Group’s financial information, as a whole, to provide a basis for our opinion on the
consolidated financial statements.
Photon Energy N.V. - PHUADNRAKTQ5-196943974-99
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Audit approach fraud risks
We identified and assessed the risks of material misstatements of the financial statements due to
fraud. During our audit, we obtained an understanding of Photon Energy N.V. and its environment
and the components of the internal control system. This included management’s risk assessment
process, management’s process for responding to the risks of fraud and monitoring the internal
control system, and how the supervisory board exercised oversight, as well as the outcomes. We refer
to section ‘Culture and Values’ and ‘Fraud Management’ of the Directors’ Report for description of
governance structure and policies in place, on which management relies when managing the risk of
fraud.
We evaluated the design and relevant aspects of the internal control system with respect to the risks of
material misstatements due to fraud and in particular the fraud risk assessment. We evaluated the
design and the implementation where we were required by the applicable ISAs and, where considered
appropriate, tested the operating effectiveness of internal controls designed to mitigate fraud risks.
As part of our process of identifying fraud risks, we evaluated fraud risk factors with respect to
financial reporting fraud, misappropriation of assets, and bribery and corruption. We assessed
whether these factors indicate that a risk of material misstatement due to fraud is present. In doing
this, we:
•
performed an inquiry of supervisory board members as to fraud risks and related party
transactions to identify the areas of their concerns in relation to fraud;
•
inquired with executive management as to whether they have any knowledge of (suspected)
fraud, their views on overall fraud risks within the Group and their perspectives on the Groups
mitigating controls addressing the risk of fraud. We also discussed management’s process for
identifying fraud risks and process for responding to fraud risks;
•
also assessed the matters reported through the Group’s whistleblowing and complaints
procedure and results of management’s investigation and follow-up on such matters;
•
also inquired with accounting personnel and other employees about known fraud and error risks
in the entity and the financial statements; management’s communication to employees of its
views on business practices and ethical behavior, whether they have knowledge of any actual,
suspected or alleged fraud;
•
assessed the IT environment around key systems. We paid specific attention to the access
safeguards in the IT system and the possibility that these lead to violations of the segregation of
duties.
Photon Energy N.V. - PHUADNRAKTQ5-196943974-99
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We identified the following fraud risks and performed the following specific procedures:
Identified fraud risks
Our audit work and observations
Risk of management override of
controls
It is generally presumed that
management is in a unique
position to perpetrate fraud
because of the available
opportunity to manipulate
accounting records and prepare
fraudulent financial statements
by overriding manual controls,
such as those related to journal
entries, related party
transactions, significant
accounting estimates, etc.
Management measures
performance of the group through
monitoring EBITDA and revenue,
which are considered key
performance indicators. A focus
on meeting financial targets could
provide to management an
incentive for bypassing of
controls.
Where relevant to our audit, we evaluated the design and
effectiveness of controls in the processes of generating and
processing journal entries. We assessed whether deficiencies in
controls may create additional opportunities for fraud and
incorporated respective corroborative procedures in our audit
approach. We paid specific attention to non-routine transactions
and areas of significant management judgement. We also paid
specific attention to the access safeguards in the IT system.
We considered the outcome of our audit procedures over the
estimates and significant accounting areas and assessed whether
control deficiencies and misstatements identified could be
indicative of fraud. Where necessary, we planned and performed
additional auditing procedures to ensure that fraud risks are
sufficiently addressed in our audit.
We evaluated key accounting estimates and judgements used in
accounting areas where management judgement is applied
(e.g. the valuation of photovoltaic power plants, the valuation of
the call option and purchase price allocation accounting in
relation to investment transactions) for biases, including
retrospective reviews of prior year’s estimates where available.
We performed data analysis focused on journal entries related to
the fraud risk factors identified during fraud risk assessment.
Where we identified instances of unexpected journal entries,
we performed audit procedures.
We evaluated whether the business rationale (or lack thereof) of
the significant transactions concluded in 2022 suggests that the
Group may have entered into those to engage in fraudulent
financial reporting or to conceal misappropriation of assets.
We incorporated an element of unpredictability in the nature,
timing, and extent of audit procedures.
We performed substantive testing procedures over the
consolidation entries.
Our audit procedures did not identify indications of specific
fraud or suspicions of fraud with respect to management
override of controls.
Photon Energy N.V. - PHUADNRAKTQ5-196943974-99
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Identified fraud risks
Our audit work and observations
Risk of fraud in revenue
recognition
As part of our risk assessment
and based on a presumption that
there are risks of fraud in revenue
recognition, we considered the
risk of fraud in revenue
recognition.
This relates to the presumed
management incentive that exists
to overstate revenue in order to
meet financial targets or
shareholder expectations.
In this context, we consider this
as a risk of fraud focussed to
overstating revenue through the
recording of non-existent
transactions or premature
revenue recognition.
We discussed and inquired with executive management the tone
at the top, to assess to what extent not meeting targets have an
impact on career opportunities or bonuses within the Company,
and whether they have any knowledge of (suspected) fraud.
In our conversations, we addressed their views on overall fraud
risks within the Group and their perspectives on the Groups
mitigating controls addressing the risk of fraud in revenue.
Where relevant to our audit, we have evaluated the design of the
internal control measures that are intended to mitigate the risk
of fraud and error in revenue recognition and assessed the
effectiveness of those measures.
We also paid specific attention to the processes surrounding the
relevant IT systems. Through data analysis, we tested
unexpected journal entries and performed relevant testing on
revenue transactions throughout the year and the receivable
balances at year end.
We did not identify specific indications of fraud or suspicion of
fraud in respect of revenue recognition.
We reviewed lawyer’s letters and correspondence with regulators. During the audit, we remained alert
to indications of fraud. We also considered the outcome of our other audit procedures and evaluated
whether any findings were indicative of fraud or non-compliance of laws and regulations. Whenever
we identify any indications of fraud, we re-evaluate our fraud risk assessment and its impact on our
audit procedures.
Audit approach going concern
As disclosed in Note 2.1 of the financial statements, management performed their assessment of the
entity’s ability to continue as a going concern for at least twelve months from the date of preparation of
the financial statements and has not identified events or conditions that may cast significant doubt on
the entity’s ability to continue as a going concern (hereafter: going-concern risks). Our procedures to
evaluate management’s going-concern assessment included, among others:
•
a review of management’s going-concern assessment and considering whether it includes all
relevant information of which we are aware as a result of our audit procedures;
•
inquiries of executive management as to their knowledge of going-concern risks beyond the
period of management’s assessment;
•
evaluating management’s current budget including cash flows for at least twelve months from
the date of preparation of the financial statements taken into account current developments in
the industry and all relevant information of which we are aware as a result of our audit;
•
analysing whether the current and the required financing has been secured to enable the
continuation of the entirety of the entity’s operations, including compliance with relevant
covenants;
•
an analysis of the financial position at balance sheet date in comparison to prior year’s year end
to assessing whether events or circumstances exist that may lead to a going-concern risk.
Photon Energy N.V. - PHUADNRAKTQ5-196943974-99
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Our procedures did not result in outcomes contrary to management’s assumptions and judgements
used in the application of the going concern assumption.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
the audit of the financial statements. We have communicated the key audit matters to the supervisory
board. The key audit matters are not a comprehensive reflection of all matters identified by our audit
and that we discussed. In this section, we described the key audit matters and included a summary of
the audit procedures we performed on those matters.
Key audit matter
Our audit work and observations
Valuation of the photovoltaic power
plants
Please r
efer to Notes 5.1, 19 and 37 of the
consolidated financial statements for the related
disclosure.
As
of 31 December 2022, photovoltaic plants
represent
more than 75% of the total assets of the
Group.
The Group measures photovoltaic power plants at
fair values less depreciation in accordance with
IAS 16 Property,
plant and equipment and
IFRS
13 Fair Value Measurement, which are
determined by income approach as photovoltaic
power plants market prices are
not available.
Under this approach
,
the fair value of photovoltaic
power plants is based on the Discounted Cash
Flow model (DCF).
This valuation is significant to our audit due to
complexity and high judgement applied within the
assessment process.
As of 31 December 2022, the cash flow projections
are prepared for the period equaling the estimated
useful life (30 years in Australia, 25 years in the
Czech
Republic, Slovakia, and Hungary) and are
based on
feed-in-tariffs (period with guaranteed
sales price
s) or expected electricity and certificate
prices on the relevant markets and on the
expected after
-tax cost of debt and expected cost
of equity.
Significant assumptions used in the models are
the following:
•
production volume;
Among other audit procedures, we performed an
evaluation of the Group’s accounting policy and
method for valuation of photovoltaic power
plants. We checked the appropriateness of the
method used under IAS 16 Property, plant and
equipment, IFRS 13 Fair Valu
e Measurement,
and
industry norms. We assessed the competence,
capabilities
,
and experience of the management to
prepare the valuation and verified their
qualifications.
W
e challenged management’s assumptions with
reference to the internal and external su
pporting
information noting the assumptions used fell
within an acceptable range.
The e
xpected volume of electricity production for
selected power plants is agreed to the
independent yield studies considering a
seasonality factor. We also inspected the technical
documentation for the sampled historic
production volumes and performed look
-back
analysis.
On a sample basis
, we inspected the technical
documentation for historic operating,
maintenance
, and capital expenses. Expected
operating and capital expend
itures are compared
to the external studies and market average
considering the size of the selected power plants.
T
ogether with our valuation experts, we
evaluated
the reasonableness and appropriateness of the
discount rates based on inputs independently
sourced from market data and comparable
companies.
Photon Energy N.V. - PHUADNRAKTQ5-196943974-99
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Key audit matter
Our audit work and observations
•
operating and capital expenditures;
•
discount rates;
•
prices of electricity and large-scale green
certificates (LGCs) for merchant models.
Measurement using the DCF model is subject to
an increased valuation risk as there is a reduced
scope for objectivity due to a lack of
active market
,
which requires significant management judgment,
estimates
, and assumptions, as such inherently
susceptible to the risk of material misstatement.
Applied measurement methods materially impact
the net assets and total comprehensive income for
the year.
Therefore, we consider valuation of photovoltaic
power plants to be a key audit matter.
We tested the sensitivity of changes in the
significant assumptions and evaluated their
impact on the DCF model.
We have evaluated the expected prices and large
-
scale generation certificates (LGCs) toget
her with
our valuation experts to publicly available
forwards/futures prices of electricity in relevant
markets.
We considered the appropriateness of relevant
disclosures provided in the consolidated financial
statements
(see Notes 5.1, 19 and 37 to the
c
onsolidated financial statements).
Our audit procedures did not result in any
material findings with respect to the valuation of
photovoltaic power plants and related disclosures
at 31 December 202
2.
Valuation of the call option for the
purchase of investments
Refer to Notes 2.4.5,
5.3, 23 and 37 to the
consolidated financial statements for the related
disclosure
We understand that investment in the non
-
traded
company Raygen has a long
-term strategic
importance for
the Company because of its
development of promising photovoltaic
technology.
In 2020 and 2021
, the Company subscribed for
Raygen’s ordinary shares and preferential shares.
As a part of the subscription agreement,
the
Company
also has a call option for additional
shares in cons
ideration for the services provided
by
the Company in respect of developing and
completing a Qualifying solar project during a
period of
five years.
The Company
has a policy of applying the
irrecoverable election to present fair value
changes of particula
r investments in equity
instruments in other comprehensive income
(OCI). The call option for additional shares in
Raygen is considered as embedded derivative and
is presented separately through FVPL
.
We verified that the evaluation of the call option
for the purchase of shares as embedded derivative
with fair value measurement through FVPL is in
line with IFRS 9. We checked the appropriateness
of the method u
sed for valuation under IFRS 13
Fair Value Measurement.
We assessed the competence, capabilities
, and
experience of management to prepare the
valuation and verified their qualifications.
Further
more, we challenged management’s
assumptions with reference
to the internal and
external supporting information noting the
assumptions used fell within an acceptable range.
We have evaluated the expected market price of
shares together with our valuation team
considering Raygen is a nontraded company.
We
have inquired with management about the
project stage and challenged the probability of
reali
sation of the share options.
Together with our valuation experts
,
we evaluated
the reasonableness and appropriateness of the
discount rate based on inputs, independently
s
ourced from market data and comparable
companies.
Photon Energy N.V. - PHUADNRAKTQ5-196943974-99
Page 10 of 15
Key audit matter
Our audit work and observations
Fair value is measured in accordance with IFRS 13
Fair
Value Measurement.
Significant assumptions used in the estimation of
fair value of share option are the following:
•
expected market price of the shares;
•
probability of realisation of the share
options;
•
discount rate reflecting the rate of return
on investment.
Applied measurement methods materially impact
the value of Other non
-current financial assets
and Revaluation of derivatives.
Therefore, we consider the
v
aluation of call option
for purchase of s
hares in Raygen to be a key audit
matter.
We tested the sensitivity of changes in the
significant assumptions and evaluated their
impact on the valuation.
We considered the appropriateness of relevant
disclosures provided in the consolidated financial
statements (see Notes 2.4.5,
5.3, 23, and 37 of the
consolidated financial statements).
Our procedures did not result in any material
findings with respect to the fair value of right for
additional shares.
Purchase price allocation accounting in
relation to investment acquisition
Refer to Notes 8, 21 and 22 to the consolidated
financial st
atements for the related disclosure
During 2022
, the Company
gradually increased its
share in
Lerta Spółka Akcyjna to 85.62%
, giving it
the possibility to assume control
. The total
consideration paid for the acquisition consists of
cash and non
-cash considerations.
The business combination was accounted to
according to IFRS 3
using the acquisition method
and the purchase price is allocated to the assets
acquired and liabilities assumed measured at
their respective fair values as defined by IFRS 13.
The
assets, liabilities, and contingent liabilities
acquired were stated at their fair values
, which
were determined in the course of the preliminary
purchase price allocation performed.
Fair value
step up is primary comprised of capacity market
contracts and
related deferred tax impact.
The
preliminary purchase price allocation
performed requires the
management to make
discretionary decisions, estimates
, and
assumptions.
We read the purchase agreements and the
agreements under company law a
nd analysed the
criteria defined in IFRS 10
for the control
transfer.
We audited
management’s assessment of the date
when
control over Lerta was obtained and
verified
the date when consolidation will be required.
We
assessed the methodical approach in
identifying the
assets acquired and liabilities
assumed at the acquisition date
. We corroborated
the
completeness of intangible assets defined by
management.
We further
verified the measurement methods
applied and examined the determination of the
identifiable assets acq
uired as well as of the
liabilities and contingent liabilities assumed
.
We assessed the methodology and key accounting
estimates applied to valuation of intangible assets
identified by management (i.e. capacity market
contracts) and that they are measured
as defined
by IFRS 13.
Photon Energy N.V. - PHUADNRAKTQ5-196943974-99
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Key audit matter
Our audit work and observations
Changes in these assumptions may have a
material impact on the fair values
and accounting.
Due to the matter described, we consider the
business combination and in particular the
purchase price allocation as a key audit matter in
our audit.
We examined the disclosures on the acquisition
made in the notes in accordance with the
requirements of IFRS
The accounting and measurement methods
applied are in accordance with IFRSs
(see
Notes 8, 21, 22 of the consolidated financial
statements
). We consider the underlying
assumptions and measurement parameters to be
plausible and reasonable.
Our procedures did not result in any material
findings with respect to accuracy or valuation of
purchase price allocation accounting.
Report on the other information included in the annual report
The annual report contains other information. This includes all information in the annual report in
addition to the financial statements and our auditor’s report thereon.
Based on the procedures performed as set out below, we conclude that the other information:
•
is consistent with the financial statements and does not contain material misstatements; and
•
contains all the information regarding the director’s report and the other information that is
required by Part 9 of Book 2 and regarding the remuneration report required by the sections
2:135b and 2:145 subsection 2 of the Dutch Civil Code.
We have read the other information. Based on our knowledge and the understanding obtained in our
audit of the financial statements or otherwise, we have considered whether the other information
contains material misstatements.
By performing our procedures, we comply with the requirements of Part 9 of Book 2 and section
2:135b subsection 7 of the Dutch Civil Code and the Dutch Standard 720. The scope of such procedures
was substantially less than the scope of those procedures performed in our audit of the financial
statements.
Management is responsible for the preparation of the other information, including the director’s
report and the other information in accordance with Part 9 of Book 2 of the Dutch Civil Code.
Management and the supervisory board are responsible for ensuring that the remuneration report is
drawn up and published in accordance with sections 2:135b and 2:145 subsection 2 of the
Dutch Civil Code.
Photon Energy N.V. - PHUADNRAKTQ5-196943974-99
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Report on other legal and regulatory requirements and ESEF
Our appointment
We were appointed as auditors of Photon Energy N.V. on 4 December 2020 by the supervisory board.
This followed the passing of a resolution by the shareholders at the annual general meeting held on
4 December 2020. Our appointment has been renewed annually by shareholders and now represents a
total period of uninterrupted engagement of three years.
European Single Electronic Format (ESEF)
Photon Energy N.V. has prepared the annual report in ESEF. The requirements for this are set out in
the Delegated Regulation (EU) 2019/815 with regard to regulatory technical standards on the
specification of a single electronic reporting format (hereinafter: the RTS on ESEF).
In our opinion, the annual report prepared in XHTML format, including the (partially) marked-up
consolidated financial statements, as included in the reporting package by Photon Energy N.V.,
complies in all material respects with the RTS on ESEF.
Management is responsible for preparing the annual report, including the financial statements in
accordance with the RTS on ESEF, whereby management combines the various components into a
single reporting package.
Our responsibility is to obtain reasonable assurance for our opinion whether the annual report in this
reporting package complies with the RTS on ESEF.
We performed our examination in accordance with Dutch law, including Dutch Standard 3950N
‘Assuranceopdrachten inzake het voldoen aan de criteria voor het opstellen van een 12igital
verantwoordingsdocument’ (assurance engagements relating to compliance with criteria for digital
reporting).
Our examination included, among other things:
•
obtaining an understanding of the entity’s financial reporting process, including the preparation
of the reporting package;
•
identifying and assessing the risks that the annual report does not comply in all material
respects with the RTS on ESEF and designing and performing further assurance procedures
responsive to those risks to provide a basis for our opinion, including:
o
obtaining the reporting package and performing validations to determine whether the
reporting package containing the Inline XBRL instance document and the XBRL
extension taxonomy files have been prepared in accordance with the technical
specifications as included in the RTS on ESEF;
o
examining the information related to the consolidated financial statements in the
reporting package to determine whether all required mark-ups have been applied and
whether these are in accordance with the RTS on ESEF.
No prohibited non-audit services
To the best of our knowledge and belief, we have not provided prohibited non-audit services as
referred to in article 5(1) of the European Regulation on specific requirements regarding statutory
audit of public-interest entities.
Photon Energy N.V. - PHUADNRAKTQ5-196943974-99
Page 13 of 15
Services rendered
The services, in addition to the audit, that we have provided to the Company or its controlled entities,
for the period to which our statutory audit relates, are disclosed in Note 57 to the financial statements.
Responsibilities for the financial statements and the audit
Responsibilities of management and the supervisory board for the
financial statements
Management is responsible for:
•
the preparation and fair presentation of the financial statements in accordance with EU-IFRS
and Part 9 of Book 2 of the Dutch Civil Code; 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.
As part of the preparation of the financial statements, management is responsible for assessing the
Company’s ability to continue as a going concern. Based on the financial reporting frameworks
mentioned, management should prepare the financial statements using the going-concern basis of
accounting unless management either intends to liquidate the Company or to cease operations or has
no realistic alternative but to do so. Management should disclose in the financial statements any event
and circumstances that may cast significant doubt on the Company’s ability to continue as a going
concern.
The supervisory board is responsible for overseeing the Company’s financial reporting process.
Our responsibilities for the audit of the financial statements
Our responsibility is to plan and perform an audit engagement in a manner that allows us to obtain
sufficient and appropriate audit evidence to provide a basis for our opinion. 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 but not absolute level of assurance, which makes it possible that we
may not detect all material misstatements. Misstatements may arise due to fraud or error. They 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 the financial statements.
Materiality affects the nature, timing, and extent of our audit procedures and the evaluation of the
effect of identified misstatements on our opinion.
A more detailed description of our responsibilities is set out in the appendix to our report.
Amsterdam, 24 April 2023
PricewaterhouseCoopers Accountants N.V.
Original has been signed by A.G.J. Gerritsen RA
Photon Energy N.V. - PHUADNRAKTQ5-196943974-99
Page 14 of 15
Appendix to our auditor’s report on the financial statements
2022 of Photon Energy N.V.
In addition to what is included in our auditor’s report, we have further set out in this appendix our
responsibilities for the audit of the financial statements and explained what an audit involves.
The auditor’s responsibilities for the audit of the financial statements
We have exercised professional judgement and have maintained professional scepticism throughout
the audit in accordance with Dutch Standards on Auditing, ethical requirements, and independence
requirements. Our audit consisted, among other things, of the following:
•
Identifying and assessing the risks of material misstatement of the financial statements, whether
due to fraud or error, designing and performing audit procedures responsive to those risks,
and obtaining 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 intentional override of internal control.
•
Obtaining 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 internal control.
•
Evaluating the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by management.
•
Concluding on the appropriateness of management’s use of the going-concern basis of
accounting, and, based on the audit evidence obtained, concluding whether a material
uncertainty exists related to events and/or conditions that may cast significant doubt on the
Company’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
and are made in the context of our opinion on the financial statements as a whole. However,
future events or conditions may cause the Company to cease to continue as a going concern.
•
Evaluating the overall presentation, structure, and content of the financial statements, including
the disclosures, and evaluating whether the financial statements represent the underlying
transactions and events in a manner that achieves fair presentation.
Considering our ultimate responsibility for the opinion on the consolidated financial statements,
we are responsible for the direction, supervision, and performance of the group audit. In this context,
we have determined the nature and extent of the audit procedures for components of the Group to
ensure that we performed enough work to be able to give an opinion on the financial statements as a
whole. Determining factors are the geographic structure of the Group, the significance and/or risk
profile of group entities or activities, the accounting processes and controls, and the industry in which
the Group operates. On this basis, we selected group entities for which an audit or review of financial
information or specific balances was considered necessary.
Photon Energy N.V. - PHUADNRAKTQ5-196943974-99
Page 15 of 15
We communicate with the supervisory board 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. In this respect, we also issue an additional report to the audit
committee in accordance with article 11 of the EU Regulation on specific requirements regarding
statutory audit of public-interest entities. The information included in this additional report is
consistent with our audit opinion in this auditor’s report.
We provide the supervisory board 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
actions taken to eliminate threats or safeguards applied.
From the matters communicated with the supervisory board, 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, not communicating the
matter is in the public interest.
Photon Energy N.V.
Barbara Strozzilaan 201
Amsterdam 1083 HN
The Netherlands
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