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CONTENTS >
AUGA group, AB
consolidated Annual Report,
Consolidated and Separate Financial
Statements and Independent Auditor’s
Report for the Year Ended 31 December
2022
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CONSOLIDATED ANNUAL REPORT 2022
CONTENTS>
CONTENTS
1. OVERVIEW .......................................................................................................................................... 3
1.1. CEO’s Foreword ............................................................................................................................ 4
1.2. AUGA group at a Glance ............................................................................................................... 5
1.3. Business Model ............................................................................................................................. 6
1.4. Strategy ....................................................................................................................................... 12
1.5. Vision, Mission, Values ................................................................................................................ 14
1.6. Risk Management ........................................................................................................................ 15
2. RESULTS ........................................................................................................................................... 16
2.1. Overall Performance .................................................................................................................... 17
2.2. Business Segments ..................................................................................................................... 19
2.3. Selling and Administrative Expenses ........................................................................................... 26
2.4. Capital Expenditures and R&D .................................................................................................... 26
2.5. Finance Costs and Financial Liabilities ........................................................................................ 27
2.6. Cash Flow.................................................................................................................................... 27
2.7. Information on Shares and Bonds ................................................................................................ 28
2.8. Summary of 2022 Results and Outlook into 2023 ........................................................................ 30
3. GOVERNANCE REPORT .................................................................................................................. 31
3.1. Governance Model ...................................................................................................................... 32
3.2. Share Capital Structure and Shareholders ................................................................................... 34
3.3. The Board and its Committees..................................................................................................... 36
3.4. Management ................................................................................................................................ 38
3.5. Information on Transactions with Related Parties ........................................................................ 38
3.6. Remuneration Report .................................................................................................................. 39
3.7. Taxes and Regulatory Compliance .............................................................................................. 40
4. SUSTAINABILITY REPORT ............................................................................................................... 41
4.1. About the Sustainability Report .................................................................................................... 42
4.2. Our Approach to Sustainability..................................................................................................... 43
4.3. Environment ................................................................................................................................ 51
4.4. Employees and Social Responsibility ........................................................................................... 64
4.5. GRI Indicators .............................................................................................................................. 71
4.6. Nasdaq ESG Indicators ............................................................................................................... 73
4.7. UN Global Compact Indicators ..................................................................................................... 74
4.8. Independent Auditor’s Conclusion on the Emissions Report ........................................................ 75
4.9. Independent Auditor’s Conclusion on the Sustainability Report ................................................... 77
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS ........................................................... 78
Balance sheets ................................................................................................................................... 79
Statements of profit or loss and other comprehensive income ............................................................ 80
Statements of changes in equity ......................................................................................................... 81
Statements of cash flows .................................................................................................................... 83
Notes to the financial statements ........................................................................................................ 84
INDEPENDENT AUDITOR’S REPORT ................................................................................................ 137
ANNEXES ............................................................................................................................................ 147
Corporate governance reporting form for the year ended 31 december 2022 ................................... 148
CONFIRMATION OF RESPONSIBLE PERSONS ................................................................................ 164
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1.1. CEO’s Foreword
Dear members of the AUGA community,
In late 2022, Inger Andersen, the Executive Director of the United Nations Environment Programme, commenting on the latest
global forecasts on climate change and their possible consequences, noted: “even if countries met all their new climate pledges,
combined with net zero commitments, it would get the globe to 1.8 degrees of warming by 2100”. Does that mean that countries’,
business’, and organisations’ current emission reduction goals could be more ambitious? Yes. Today, however, the world needs
more than clear goals and speeches committing to achieving them. It needs real actions here and now.
Undoubtedly, world-shaking events, market instability, the energy crisis and supply disruptions have been causing tension on an
international level. In 2022 these factors affected us too. The development of sustainable technology was delayed by a lack of
components and disrupted supply chains. Energy costs rising to record highs created challenges in production, which
consequently affected AUGA group’s financial results. Additionally, at the beginning of the year disrupted logistics slowed sales
of the final consumer products.
Despite all the difficulties, in 2022 we improved our financial results and recovered from the difficult year of 2021, when part of the
harvest was lost due to natural heat. The Group’s gross profit rose to EUR 15.27 million in 2022 and was 286% higher than in
2021, while EBITDA grew by 115% - from EUR 9.10 million in 2021 to EUR 19.58 million in 2022. The better results were
accomplished with the help of better yields and, of course, higher production prices.
In this sustainable business journey we have never doubted that we must implement our innovation agenda, because technology
is the future. Without that, the agricultural sector will not be able to achieve its emission reduction goals and economic targets,
farmers will not be able to work more sustainably, and consumers will not be able to choose food with no cost to nature.
In 2022 we continued moving forward with our technological projects. We carried out testing of the AUGA M1 biomethane and
electricity-powered prototype tractor in real fields. We made technical preparations for serial production and, after the reporting
period in early 2023, publicly presented a tractor from the first production batch. We continued testing the specialised feed
technology, which will significantly reduce the methane emissions resulting from cattle digestion processes. We worked actively
to develop biomethane infrastructure and already in the first half of 2023, the first biogas plant will start producing sustainable fuel
for tractors.
Last year, due to higher crop yields and increased livestock numbers, AUGA group’s operating emissions slightly increased. Note,
however, that the new technologies in development have not yet been employed in the group's activities. Their fundamental effect
on emissions will become visible over the coming two years.
We pay the most of our attention to the environmental issues, nevertheless, social and governance areas are also important in
the group's activities. In 2022, shareholders’ ranks grew to include employees and participants of the first-year share option
programme. We continued to responsibly take care for the safety and health of our employees in the working environment by
providing additional health insurance. The independent Board also successfully continued its work. In 2023, its composition will
be renewed, as envisaged in the company's articles of association, to ensure transparency and accountability to investors and
other stakeholders.
Our large team’s motivation, professionalism, and desire to create a more sustainable tomorrow have helped not only to advance
towards the goals set in our strategy, but also to show that we can do more. In 2023, we are stepping forward with much greater
determination and passion to achieve breakthroughs in order to live up to our mission “no cost to nature” and become a sustainable
agricultural technology (AgTech) company.
We believe that climate change can be stopped. By developing and applying technologies, we, first of all, aim to demonstrate
leadership. Yet our ultimate goal is bigger – we will do everything we can to make a positive impact with the help of a strong
community. Therefore, we intent to make the technologies we develop and test available to all farmers, who will be ready to work
sustainably.
Kęstutis Juščius
CEO, AUGA group
GRI 2-22
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1.2. AUGA group at a Glance
business segments
EUR million
revenue
EUR million
EBITDA
thousand hectars
of arable land
employees
vertically integrated
organic food producer in
Europe and sustainable
agricultural technology
developer
shareholders
Listed on
issuer of green bonds in
the Baltic States among
fully privately-owned
companies listed on
Nasdaq
thousand tonnes of
crop production sold
thousand tonnes of
dairy production sold
thousand tonnes of
mushrooms sold
% of sales
is export
Products are sold in
countries
in the world
biomethane and
electricity-powered
tractor for
professional use
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1.3. Business Model
AUGA group, AB, (hereinafter – the Company) and its subsidiaries (hereinafter – the Group, AUGA group) operate in Lithuania
(with headquarters at Konstitucijos Ave. 21C in Vilnius). AUGA group is the largest vertically integrated organic food producer in
Europe and a developer of sustainable agricultural technologies. The Group implements a sustainable farming model based on
new technologies on organically certified arable land. For more information about organic farming and the sustainability practices
used, see section 4.3.2. Organic Farming and Sustainability Practices.
1.3.1. Business Segments
AUGA group operates in four main business segments in the agriculture and food production industries. Following structural
changes at the end of the 2022, a new, fifth segment was specified - technologies for sustainable agriculture, segment results
will be published from 2023:
○ Crop growing – the Group grows organic wheat, legumes, rapeseed, sugar beets, oats and other crops. It additionally
grows organic vegetables and prepares organic feed for livestock.
○ Dairy – this segment includes organic milk production and cattle raising. The dairy segment operates in synergy with
organic crop growing, as it consumes forage crops used for crop rotation and its organic waste is used as fertiliser for
crops.
○ Mushroom growing – the Company’s subsidiary Baltic Champs, UAB, is one of the largest and most modern producers
of mushrooms in the Baltic region. It supplies white and brown champignons, oyster, portobello, eringi, and shiitake
mushrooms, as well as compost for mushroom growing.
○ Fast-moving consumer goods (FMCG) – the Group offers a wide range of end-consumer products, including ready-
to-eat soups, preserved mushrooms, packaged fresh and preserved vegetables, milk, oat flakes, and other products.
AUGA group sells products under the brand name AUGA, and also produces private labels. This segment is of strategic
importance for the Group and remains the fastest growing. AUGA products are based on innovative food production
standards and growing global consumer demand to eat healthier and more environmentally friendly food.
○ Technologies for sustainable agriculture (AgTech) – The Company develops innovative sustainable agricultural
technologies (biomethane and electricity-powered tractor, specialised feed technology, etc.) through the subsidiary
AUGA Tech, UAB, seeking to accelerate the achievement of the goals of the innovation agenda. AUGA Tech, UAB aims
to concentrate activities related to the development of agricultural technologies, strengthen engineering competences in
the sustainable farming field, and make the developed technologies available to farmers who seek to work sustainably,
thereby contributing to the reduction of greenhouse gas emissions from agricultural activities.
GRI 2-6
GRI 2-1
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1.3.2. Structure of the Group
AUGA group is characterised by its large number of activities. The Group consists of the companies below, grouped by business
segments or relevant activities:
The Group conducts its operations on more than 38,500 ha of arable land in the most fertile areas of Lithuania. The Group itself
owns 12.6% of the land. AUGA group gains efficiency of returns by leasing of land rather than low returns as an owner.
All the Group’s activities take place in Lithuania. The location of the Group’s headquarters and subsidiaries are shown on the map
below:
Administration, parent
company
AUGA group, AB
Crop growing
Agricultural entities
Dairy
Agricultural entities
Mushroom growing
and sales
UAB „Baltic Champs“
R&D activities
AUGA Tech, UAB
FMCG production and
sales
KB Grybai LT
Services
ŽŪK “Agrobokštai“,
“Agrotechnikos centras“
UAB
Commodity trading
UAB “Grain LT“
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1.3.3. Organisational Structure of the Group
More information about the Group’s staff can be found in section 4.4. People and Social Responsibility.
1.3.4. The Group’s Competitive Advantages
○ Economies of scale – what sets the Group apart from its competitors is the scale of its activities. It operates on a large area
of land. That, combined with still lower labour costs and the economies of scale, gives AUGA group a significant cost
advantage.
○ Vertical integration – the Group grows a wide range of organic products and manages their processing. This makes it
possible to offer a variety of final consumer products, such as ready-to-eat soups and other preserved products, vegetables,
mushrooms, dairy products, eggs, etc.
○ Full traceability – the business model developed and followed by the Group allows full traceability from seed to pack and
ensures products are of high quality. This helps earn the trust of private label producers, retailers, and the final consumers of
branded AUGA products.
○ Synergies among different branches of agriculture – the closed-loop agriculture model, with its internal integration of the
crop-growing, dairy and mushroom-growing segments, makes it possible to obtain sufficient quantities of products that meet
organic farming requirements.
○ Creating and integrating technologies into practice – modern technologies are the key to future global progress. They
will make it possible to curb the climate change. By developing innovative solutions for agriculture that are not available on
the market today, the Group aims to raise sustainable farming standards and spark a breakthrough across the whole food
system. Both consumers and investors will support such companies today and in the future.
GRI 2-9
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1.3.5. Export Markets
The Company exports its products to 35 countries around the world. AUGA group’s most important export markets are: the USA,
Germany, Japan, the Netherlands, the United Kingdom, and the Scandinavian countries.
No products were exported to Russia or Belarus in 2022.
Map of export markets in 2022:
GRI 2-6
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1.3.6. The Group’s Supply Chain
AUGA group’s supply chain is extensive and complex. Implementing the principle of a circular economy, the Group can supply
itself with some of the resources and raw materials it needs. For example, organic waste from animal husbandry (manure) and
mushroom compost serves as crop fertilisers, and cultivated crops are used as ingredients for cattle feed. Also, crop products
(straw) are used together with livestock manure in mushroom cultivation. The Group purchases fuel, seeds, and other products,
and rents or buys the machinery from external suppliers.
Raw materials produced by the Group are sold to traders or processors. Additionally, the Group produces FMCG products for
consumers from the commodities that it grows, for sale under the AUGA brand or private labels. Those products are sold in retail
chains via wholesalers or distributors.
GRI 2-6
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1.3.7. Fast-Moving Consumer Goods (FMCG) Portfolio
Organic soups
Organic oatmeal
Organic
vegetables
Organic
mushrooms
Organic canned products
Carrot soup
Apple and cinnamon
oatmeal
Carrots
White champignons
Canned champignons
Beetroot soup
Apricot and banana
oatmeal
Beetroot
Brown
champignons
Canned, sliced
champignons
Tomato soup
Banana and strawberry
oatmeal
Onions
Eringi mushrooms
Marinated champignons
Champignon soup
Apple and raspberry
oatmeal
Cabbage
Shiitake
mushrooms
Beetroots in apple juice
Vegetable soup
„Minestrone“
Wild berry oatmeal
Potatoes
Oyster mushrooms
Pickled beetroots
Three lentil soup
Apple and cinnamon
oatmeal (in a bag)
Portobello
mushrooms
White beans in brine
Butternut squash soup
Apricot and banana
oatmeal (in a bag)
Grill champignons
Red kidney beans in brine
Spicy curry soup
White beans in tomato
sauce
Cold tomato soup
„Gazpacho“
Red kidney beans in chili
sauce
Sauerkraut soup
Chickpeas in brine
Vegan chilli bean soup
Double steamed red kidney
beans
Sweet corn soup
Double steamed white
beans
Double steamed chickpeas
Double steamed brown
lentils
GRI 2-6
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1.4. Strategy
In 2020, AUGA group announced its strategy to improve efficiency in all business segments and set a standard for sustainable
farming. The Group is pursuing the latter goal, as the agricultural sector, in which it operates, is one of the largest environmental
polluters in Lithuania and the world. According to the latest data provided by the International Panel on Climate Change (IPCC),
published in 2022 on year 2019, agriculture is responsible for over 20% of global emissions.
Considering this problem and the growing need of consumers to eat more sustainably, AUGA group is paying great attention to it
in its strategy.
The announced strategy envisages the development of a new model for sustainable organic food production - the Sustainable
Organic Food Architecture (SOFA), which will be integrated into the Group‘s current circular economy model. SOFA will help to
address the most pressing technological challenges in the food industry while maintaining a momentum of scale, quality and yield
growth.
The new business model attributes key roles to the following technologies and processes:
1 Creation of Biogas cycle infrastructure and biogas powered vehicles, which will enable to run farm operations without
fossil fuels, using manure not only as a fertiliser, but also as a source of biofuel production. The emissions from fossil fuel
use on farms will be reduced by 50%.
2 Specialised feed technology, which will provide an opportunity to reduce methane emissions from ruminants by 50%
(calculated per one tonne of cow‘s milk), as well as improve milk yield.
3 Regenerative crop-rotation, which will replace cereal crops with perennial leguminous grasses capable of sequestering
carbon and fixing nitrogen in the soil. Emissions will be reduced by 30%, calculated per tonne of dry matter of crop production.
Feed Technology
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1.4.1. The Goals of the Innovation Agenda
The goals of AUGA group‘s innovation agenda are to significantly reduce greenhouse gas emissions by 2025 (overall emission
reduction target is 27%) and to become a climate-neutral food producer by 2030.
AUGA group will be recognised as an asset-light business based on agricultural technology (AgTech). The Group plans to apply
its developed technology not only to AUGA group farms. Innovative solutions and a sustainable agriculture experience will be
made available to farmers around the world, who seek to work sustainably.
What will the success of the strategy mean for each AUGA group community group in 2025:
○ To consumers – ability to deliver a consumer basket with no cost to nature.
○ To farmers – functionality of Sustainable Organic Food Architecture, which reduces carbon dioxide and its equivalent
emissions.
○ To lenders – resilience in business structure through long-term financing and impact-driven lenders.
○ To shareholders – unique asset-light business model, assuring a 15% return on capital, multiplying Company’s value x3
and retaining growth dynamics after the implementation of the strategy.
1.4.2. Implementation of the Strategy
The Company‘s strategy is publicly available on the AUGA group’s website and is consistently being implemented. Every year,
the Company publishes both a strategy implementation report and its Annual Report on the Nasdaq website.
The first result of implementing the 2020-2025 strategy was the AUGA M1 prototype of biomethane and electricity-powered tractor
for professional use, which was presented in year 2021. It can save 100 t of CO
2
e emissions per year, compared to its fossil-fuel-
powered analogues. During 2022, the prototype was prepared for serial production and at the beginning of 2023 the tractor from
the first production batch was presented to the public.
Other strategic projects significantly advanced as well in 2022. More information about the progress of agricultural technologies
developed by AUGA group can be found in section 4.3.10. Research and Development.
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1.5. Vision, Mission, Values
With the release of the new strategy, AUGA group in 2020 has updated its vision, mission, and values, which are in line with the
Group‘s day-to-day operations, goals and pursued results. Sustainability has become the core of the vision and mission.
Vision – a synonym for sustainable food and lifestyle.
Mission – food with no cost to nature.
AUGA group’s activities are guided by the following values – sustainability, innovation, and positive impact.
Sustainability
Innovation
Positive impact
We care not only about reducing
our footprint on the environment,
and our corporate social
responsibility, we are also
developing new ambitious
standards for sustainability. We
aim to achieve business results
while being a model for
sustainability everywhere and at all
times.
Environmental protection,
operational efficiency and new
standards are challenges that can
only be tackled with technology
and innovation. In our team, we
encourage resourcefulness,
creativity, out-of-the-box thinking,
continuous learning and new
solution finding.
We aim to achieve the best
understanding of the present and
future needs of our consumers and
other stakeholders. As leaders in
our field, we initiate change, create
value, and positively impact the
entire community.
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1.6. Risk Management
The Risk Management Guidelines were approved by the Company’s audit committee and the independent Board in 2021. Each
year, the Group performs an assessment of its main risks and draws a risk assessment map, taking into account both the
probability and the significance of risks. The main risks identified for the Group at the start of 2022 were:
Climate conditions. Climate conditions are one of the most important risk factors for agricultural activity. Poor or unfavourable
meteorological conditions have a significant impact on productivity and may adversely affect the yield of agricultural products,
harm the preparation of feed, destroy crops and cause other damage. Any damage caused by adverse climate conditions can
negatively affect the financial situation, activities, and performance of the Group.
Prices of agricultural products. The Group’s revenue and performance depend on several factors, including the prices of raw
materials for agricultural production, which are beyond the Group’s control. Agricultural product prices are strongly influenced by
varied factors that are difficult to predict do not dependent on the Group (weather conditions, government policy on agriculture,
changes in global demand due to demographic changes, changes in living conditions, competitive products in other countries).
Factors such as geopolitical events, climate conditions, infections, pest infestations, national agricultural policies in different
countries, and so on, can all have a significant impact on the supply and prices of primary agricultural products. Demand for key
agricultural raw materials may be affected by various international and local programmes undertaken under national agricultural
policies, as well as by demographic shifts and changes in living conditions in countries worldwide. These factors can cause
significant fluctuations in the prices of agricultural products and, therefore, may have a negative impact on the Group’s activities,
financial situation and results.
Changes in EU subsidies. The Group receives significant revenues from EU subsidies, which is important for the continuity of
its activities. If, for any reason, these subsidies were to be terminated or reduced, this could have significant consequences for
many of the Group’s activities, including reduction of cash flows and of the profitability of operations, a decrease in the value of
land and investment property, and possible drops in the value of the property, facilities, and equipment. Significant changes in EU
subsidy programmes could also threaten the long-term continuity of the Group’s activities.
Postponement of the strategic projects. The Group currently is in a transition period and several key projects - related to the
creation of biogas infrastructure, the development of specialised feed technologies, and regenerative crop rotation - are crucial
for the implementation of the Group’s long-term strategy. In conducting these projects, the Group faces the following risks:
insufficient innovation or unsuitability for practical use or market acceptance, lack of skills in project management, and lack of
human resources.
Liquidity risk. As the Group’s business model requires high working capital, the production cycle in the crop segment is long,
and the sales volume of crop products fluctuate during the year, the Group faces significant fluctuations in working capital needs.
Increase in land leasing costs. AUGA group leases 87.4% of the farmland it uses. We believe that in the long-term, leasing land
instead of owning it allows us to use the available resources more efficiently and ensures a higher return for shareholders.
However, an increase in inflation in 2021-2022 has put upward pressure on lease prices.
Risk of disease. The Group’s activities involve property of plant and animal origin. Diseases can have a direct impact on the
Group’s results, production quantity and quality, and write-offs. Bovine epidemic diseases (such as bovine spongiform
encephalopathy, commonly known as mad cow disease) and other diseases, bacteria, etc., can reduce demand for products for
fear of possible consequences. Such changes may worsen the Group’s financial situation. This risk is particularly significant for
the mushroom segment due to the high concentration of production capacity in one location.
Discrepancy between investment amounts and needs. AUGA group is in a transition period during which it needs to ensure
the continuance of existing activities as well as the implementation of efficiency programmes and the Group’s long-term strategy.
Both areas require investments, the financing of which depends on the Group’s results, the market situation, and other external
factors.
Increase in production costs. Rising inflation causes the costs of the Group to grow. Fuel, wages, leasing of land and agricultural
machinery are significant cost components in the Group’s activities, so it is necessary to control cost growth and compensate for
cost increases by increasing efficiency and sales prices.
Financing risk. Organic agriculture requires a lot of working capital. If the Group’s borrowed capital reaches a significant level,
that could have material consequences, such as:
○ the Group‘s access to additional financing for working capital, investments, acquisitions, debt servicing, etc., could be
restricted;
○ the Group‘s flexibility to adapt to changing market conditions could be limited;
○ while certain restrictions in credit agreements relating to business and financial matters are specific to such financing
transactions, they can still limit the Group‘s ability to borrow more funds, pledge assets, and/or engage in other types of
mergers or transactions, which to a certain extent can limit the possibilities for active development and possibly reduce
competitive advantage in the future;
○ possible restrictions on the extension of the maturities of existing financial liabilities.
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2.1. Overall Performance
AUGA group, AB and its subsidiaries’ financial results have improved in 2022 when compared to previous year. Rising prices
have allowed to cover the increasing costs while more favourable weather conditions and Group’s decisions have led to an
improvement in yields.
Sales revenue of the Group amounted to EUR 80.09 million in the 12-month period of 2022. This marks a 12% increase on the
equivalent period of the year before, when sales revenue was EUR 71.72 million. Revenue has increased in all the segments with
the exception of the mushroom segment where revenue decreased by 2% compared to the previous year.
The Group's gross profit reached EUR 15.27 million in 2022 and was 286% higher compared to the same period last
year (2021), when gross profit amounted to EUR 3.95 million. The Group’s net loss accounted for EUR 5.35 million during the 12
months of 2022, compared to a loss of EUR 15.44 million a year earlier. The Group's EBITDA amounted to EUR 19.58 million in
2022, representing an increase of 115% compared to the previous year, when EBITDA was EUR 9.10 million.
In the table below the main financial figures of the Group are provided for the three-year period from 2020 to 2022 in th. EUR.
Main performance indicators of the Group
2022
2021
2020
Variance
2022/2021
Variance
2021/2020,
Revenues
80,088
71,721
83,073
+12%
-14%
Direct subsidies
12,711
12,858
9,987
-1%
+29%
Gross profit (loss)
15,270
3,952
15,773
+286%
-75%
Operating profit (loss)
3,099
(9,819)
6,896
n/a
n/a
Finance costs
(7,537)
(6,459)
(5,547)
+17%
+16%
Net profit (loss)
(5,351)
(15,435)
1,792
-65%
n/a
EBITDA
19,580
9,101
20,834
+115%
-56%
Net cash flow from operating activities
692
8,140
13,373
-92%
-18%
Net cash flow from operating activities before
changes in working capital
9,348
11,979
10,814
-22%
+11%
Total non-current assets
161,285
155,330
147,590
+4%
+5%
Total current assets
70,133
57,149
66,112
+23%
-14%
Total equity
77,533
78,980
92,816
-2%
-15%
Total non-current liabilities
83,236
88,414
78,907
-6%
+12%
Total current liabilities
70,649
45,085
41,979
+57%
+7%
Non-current and current financial liabilities
117,027
102,984
94,541
+14%
+9%
Adjusted working capital
32,424
28,531
41,953
+14%
-32%
EBITDA margin, %
24.45
12.69
25.08
+93%
-49%
Operating margin, %
3.87
(13.69)
8.30
n/a
n/a
Net margin, %
(6.68)
(21.52)
2.16
-69%
n/a
ROE, %
(6.84)
(17.79)
1.96
-62%
n/a
ROA, %
(2.41)
(7.24)
0.85
-67%
n/a
ROCE, %
2.29
(7.15)
4.81
n/a
n/a
P/E ratio
(16.41)
(7.11)
56.35
+131%
n/a
Debt/EBITDA
5.98
11.32
4.54
-47%
+149%
Equity ratio
0.34
0.37
0.43
-9%
-15%
Current ratio
0.99
1.27
1.57
-22%
-20%
Ratio calculation explanation:
EBITDA - net cash flow from operating activities before changes in working capital and net interest paid, as it is disclosed in cash
flow statement, including gain (loss) on changes in fair value of biological assets.
EBITDA margin = EBITDA / Revenues.
Operating profit margin = Operating profit (loss) / Revenues.
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Net profit margin = Net profit (loss) / Revenues.
ROE = Net profit (loss) / ((Total equity at the end of reporting period + total equity at the beginning of the reporting period)/2).
ROA = Net profit (loss) / ((Total assets at the end of reporting period + total assets at the beginning of the reporting period)/2).
ROCE = Operating profit (loss) / (Total equity + Non-current and current portion of non-current borrowings and lease liabilities
(excluding lease related with IFRS 16)).
P/E = Last share price at the end of reporting period / earnings per share.
Debt/EBITDA = (Non-current borrowings + non-current obligations under lease + current portion of non-current borrowings +
current portion of non-current obligations under lease + current borrowings) / EBITDA.
Equity ratio = Total equity / Total assets.
Current ratio = Total current assets / Total current liabilities.
Adjusted working capital = Current biological assets + Trade receivables, advance payments and other receivables + Inventory
– Trade payables – Other payables and current liabilities. The adjusted working capital formula eliminates cash and financing
elements allowing the reader to see how well the short-term assets and liabilities directly related to operations of the Group are
being utilized. Total current assets and total current liabilities are used to describe current ratio which is also included as a key
ratio of the Group.
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CONSOLIDATED ANNUAL REPORT 2022
CONTENTS>
2.2. Business Segments
2.2.1. Crop Growing Segment Overview
Results of crop growing segment consist of crop harvest fair value, sales of the previous and current year harvest and agricultural
subsidies.
Harvest in the season of 2021/2022
The total cultivated land area by the Group amounted to 38.5 thousand hectares (ha) in the 2021/2022 season and is slightly less
than the cultivated area in the 2020/2021 season. In the 2021/2022 season, 30.1 thousand ha is seeded with crops (30.9 thousand
in the 2020/2021 season) out of which 11.7 thousand ha is dedicated to wheat, 6.8 thousand ha to legumes and 11.6 thousand
ha to other cash crops. The majority – 10.1 thousand ha out of total 11.7 thousand ha – of wheat will be winter wheat as winter
crops usually have higher yield potential compared to summer alternatives. Forage crops comprise 7.7 thousand ha in the
2021/2022 season compared to 6.8 thousand ha in the 2020/2021 season.
As of 31 December 2022 the Group has fully completed the harvest of 2021/2022. The gain (loss) on revaluation of agricultural
produce was calculated for crops (wheat, legumes and other cash crops) that were harvested by the end of the reporting period.
Value of forage crops was based on actual costs.
Harvest of 2022/2023
At the end of each quarter the Group evaluates the fair value of crops which have not yet been harvested. The weather conditions
during 2022 autumn were favourable for the preparatory work needed for 2022/2023 season. The sowing of winter crops and land
tillage work were completed according to schedule. In 2022 there were 17 thous. ha dedicated to winter crops – wheat, rapeseed,
clover, barley, rye and vicia – which will be harvested in 2023. This adds up to 52% of land that was sown with wheat, legumes
and other cash crops for the 2022/2023 season. For comparison, in 2021/2022 season there was 17.4 thous. ha of winter crops
sown. Winter crops are in good condition at the time reporting of financial statements. Based on the Group’s judgement, the mild
winter should not have an adverse effect on the upcoming harvest. Favorable conditions in autumn enabled the Group to complete
all the necessary land tillage work and prepare the land for the 2023 spring sowing. The Group is well prepared for the 2022/2023
season and is optimistic with regards to the potential of the next year’s harvest.
As of 31 December 2022 the group has evaluated the gain (loss) on revaluation of agricultural produce for crops that will be
harvested in 2023. The calculation was based on the formula given below:
Fair value of the crop = Costs incurred + (Cultivated area in ha * historical average yield as tonnes per ha * forecasted price per
tonne – cultivated area in ha * forecasted total cost per ha) * T, where:
11,9
9,0
9,7
8,2
10,4
8,1
12,4
6,8
11,7
6,8
11,6
7,7
-
5,0
10,0
15,0
Wheat Legumes Other cash crops Forage Crops
HA'000
Cultivated land area, thousand ha
2019/2020 2020/2021 2021/2022
5 500
15 600
14 500
15 995
17 404
16 999
19%
53%
51%
51%
58%
52%
0%
20%
40%
60%
-
5 000
10 000
15 000
20 000
2017/2018 2018/2019 2019/2020 2020/2021 2021/2022 2022/2023
Winter cash crops area and share of total crops
Winter cash crops area, ha Winter cash crops share of total area, %
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CONSOLIDATED ANNUAL REPORT 2022
CONTENTS>
• Cost incurred is cost actually incurred for a particular crop as of 31 December 2022.
• Cultivated area in ha is the area of a particular crop seeded and expected to be harvested.
• Historical average yield tonnes per ha.
• Forecasted price per tonne. Contracted average sales prices are used for fair value estimation adjusted according to the
development in the market.
• Forecasted total cost per ha. Average historical cost levels after evaluating the current situation.
• T is the portion of time that has already passed from sowing date until the forecasted harvest date expressed as a
percentage. As of 31 December 2022, the average completion percentage estimated for next year’s harvest crops was
around 34%. (2021 – 37%)
The formula discussed above will be used to estimate fair value of cash crops (winter and summer crops) for coming quarters as
well until the actual harvest will be completed. Forecasted parameters used in the fair value estimation will be re-evaluated
quarterly and adjusted by taking into consideration the most recent data.
It should be noted that the fair value of forage crop even at its point of harvest is measured at production cost incurred on forage
crop. In other words, forage crop production cost is used as a measure of the fair value of that forage crop since there is no active
market for forage crops and there is no reliable data to calculate market price of the forage crops. Due to this the net result on
revaluation of forage crops is equal to zero.
Table below provides information on land plot of different crops in the seasons 2021/2022, 2020/2021 and 2019/2020. Land plot
of wheat and legumes remained stable in the season of 2021/2022 compared to previous period and constituted 61% of all cash
crops land plot compared to 60% in the previous season.
Harvested land plot by
culture group, ha
12-month of
2022
12-month of
2021
12-month of
2020
Variance
2022/2021
Variance
2021/2020,
Wheat
11,693
10, 441
11 ,896
+12%
-12%
Legumes
6 ,785
8 ,056
9, 035
-16%
-11%
Other cash crops
11, 628
12, 397
9 ,664
-6%
+28%
Comparison of wheat, legumes and other cultures average cost per hectare of land is provided in the table below. It is important
to note that the analysis of costs in the 3
rd
quarter was performed based on the data available at the time. However, after the 4
th
quarter the group performs a more extensive cost analysis and because of that the final costs have increased.
Cost per 1 ha cultivated
land, EUR/ha
12-month of
2022
12-month of
2021
12-month of
2020
Variance
2022/2021
Variance
2021/2020,
Wheat
1,033
786
818
+31%
-7%
Legumes
926
802
805
+15%
+2%
Other cash crops
1,237
1,085
1,139
+14%
-3%
As seen from the data the average cost of wheat has increased by 38% when compared to the previous year. Cost of wheat has
increased in 2022 due to increased land tillage costs and cost of organic fertilizers. While the cost of legumes has increased by
14% when compared to the previous year due to an increase in land tillage costs and seeds.
Table below depicts wheat, legume and other crop yields in the current and past two seasons. Wheat yield in 2022 was 3.41 t/ha
which is 4% higher than wheat yield in the equivalent period last year. Legumes yield in 2022 increased by 113% compared to
previous year from 1.09 t/ha to 2.32 t/ha. Yield of legumes differs significantly over last year due to the heatwave which occurred
last summer and caused the decrease of yields. This year the yield of legumes was restored due to favourable weather conditions.
However, these conditions were not as favorable to wheat due to the storms with strong winds that occurred in July and flattened
part of wheat fields. Nevertheless, the achieved yield of wheat is only slightly better when compared to the 2020/2021 due to the
poor yield of summer wheat.
Average yield, t/ha
12-month of
2022
12-month of
2021
12-month of
2020
Variance
2022/2021
Variance
2021/2020,
Wheat
3.41
3.27
4.11
+4%
-20%
Legumes
2.32
1.09
2.70
+113%
-60%
Other cash crops
4.47
5.72
9.72
-22%
+18%
The Group has anticipated a higher yield this year. As can be seen from the table below, actual wheat yield was lower by 18%,
while legumes yield was lower by 20% compared to expected yield at the beginning of the harvesting.
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CONSOLIDATED ANNUAL REPORT 2022
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Average yield in the season of
2020/2021, t/ha
Forecasted result for the
season of 2021/2022
Actual result for the
season of 2021/2022
Variance
Wheat
4.14
3.41
-18%
Legumes
2.90
2.32
-20%
Other cash crops
6.96
4.47
-36%
Wheat yield in Lithuania, t/ha Legumes yield in Lithuania, t/ha
NOTE: The data of LT organic farms for 2022 has not yet been published, the data of conventional farms in the LT is preliminary.
Reference: Lithuanian Statistics Department, data of the survey of the activities of Lithuanian agricultural producers included in the Farm
Accountancy Data Network (FADN), the Group's data.
Table below depicts comparison of wheat, legumes and other crops prices at which the harvest was evaluated (at fair value) in
the seasons of 2021/2022, 2020/2021 ir 2019/2020. It should be noted that at the time of the publication of the financial statements
for the four quarters of 2022, significant part of the 2021/2022 season harvest has already been sold or contracted at fixed prices,
therefore fair value of the crops was estimated based on average contract prices.
Average price of 1 tonne of crop,
eliminating sales costs, EUR/t
12-month
of 2022
12-month
of 2021
12-month
of 2020
Variance
2022/2021
Variance
2021/2020,
Wheat
403
240
208
+68%
+15%
Legumes
576
347
354
+66%
-2%
Other cash crops
246
189
174
+30%
+9%
As can be seen from the data above, the price of 1 tonne of wheat in the season of 2021/2022 increased by 68% compared to
previous season. The main causes of the increase are growing prices of raw materials, rising energy costs and uncertainty caused
by the geopolitical situation in the world.
Table below provide a comparison of gain (loss) per hectare for wheat and legumes.
Gain (loss) on revaluation of
agricultural produce at point of
harvest, EUR/ha
12-month
of 2022
12-month
of 2021
12-month
of 2020
Variance
2022/2021
Variance
2021/2020,
Wheat
341
2
35
+16 950%
-94%
Legumes
458
(422)
148
n/a
n/a
Other cash crops
(137)
(10)
550
-1 270%
n/a
Average gain per 1 hectare from wheat has increased significantly in the season of 2021/2022 compared to the previous season
which resulted in losses due to the heatwaves. On the other hand, the weather conditions this year were favourable and allowed
the Group to improve its harvest. Increase in costs was compensated with growing prices. The result of legumes was also
significantly lower last season when compared to this year. The improved result of legumes is a consequence of a better harvest
– the yield of legumes in the 2021/2022 season more than doubled when compared to the previous season.
Forage crops results
12-month
of 2022
12-month
of 2021
12-month
of 2020
Variance
2022/2021
Variance
2021/2020,
1,8
3,1
3,6
2,8
3,8
4,3
5,4
4,5
4,9
2,7
4,2
4,1
3,3
3,4
0,0
1,0
2,0
3,0
4,0
5,0
6,0
2018 2019 2020 2021 2022
LT organic wheat LT conventional wheat AUGA wheat
2,0
1,5
1,6
2,6
1,6
3,0
2,0 2,0
3,0
1,8
2,4
3,3
1,5
1,7
2,7
1,1
2,3
0,0
1,0
2,0
3,0
4,0
2017 2018 2019 2020 2021 2022
LT organic legumesi LT conventional legumes AUGA legumes
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CONSOLIDATED ANNUAL REPORT 2022
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Cost per 1 ha cultivated land, EUR/ha
767
826
767
-7%
+8%
Average yield, t/ha
6.83
7.57
7.39
-10%
+2%
As of 31 December 2022, the Group recognized a EUR 5.16 million gain on the initial recognition of biological assets at fair value.
It should be noted that as of 31 December 2021 Group has already recognised a gain of EUR 2.33 million on the initial recognition
of biological assets at fair value for the 2021/2022 season’s crops. Group has also calculated a EUR 1.97 million gain on the initial
recognition of biological assets at fair value. Therefore, the total gain on revaluation of biological assets at fair value for the year
2022 is EUR 4.80 million.
Crops value, EUR million
12-month
of 2022
12-month
of 2021
12-month
of 2020
Variance
2022/2021
Variance
2021/2020,
Gain (loss) on revaluation of biological
assets at fair value (harvest of the
2021/2022 season)
2.83
(5.51)
5.67
n/a
n/a
Gain (loss) on revaluation of biological
assets at fair value recognized in next
period (harvest of 2022/2023 season)
1.97
2.33
2.02
-15%
+15%
Total gain (loss) on revaluation of
biological assets at fair value
4.80
(3.18)
7.69
n/a
n/a
Crop growing segment sales results
Total revenue generated from sales in the crop growing segment amounted to EUR 27.58 million in 2022, which marks an increase
of EUR 4.02 million in revenue compared to 2021.
Crop growing segment results, EUR
million
12-month
of 2022
12-month
of 2021
12-month
of 2020
Variance
2022/2021
Variance
2021/2020,
Sales revenue
27.58
23.56
35.25
+17%
-33%
Cost of sales
(27.71)
(25.15)
(36.12)
+10%
-30%
Inventory write-offs
(1.26)
(4.05)
(1.39)
-69%
+191%
Result of internal transactions
(0.68)
n/a
n/a
n/a
n/a
Result of sales of agricultural produce
(2.01)
(5.64)
(2.26)
-64%
-112%
The crop growing segment’s cost of sales for the 12 months of 2022 amounted to EUR 27.56 million, 10% more compared to last
year. In order to assess the results of each segment more precisely, the transactions between segments are executed based on
fixed pricing, thus, starting from 2022 such transactions are presented separately and amounted to a EUR 0.68 million loss to the
crop growing segment in the I-IV quarters of 2022.
Agricultural subsidies and gross profit of the crop growing segment
Total amount of agricultural subsidies accrued in 12 months of 2022 was EUR 9.89 million which is similar to the subsidies accrued
in the same period in 2021. Accrued subsidies amount is based on calculations according to currently applicable requirements of
subsidising programmes regulations.
The gross profit of the crop growing segment, encompassing the results of agricultural produce sales, gain (loss) on changes in
fair value of biological assets and agricultural subsidies, has improved in 2022 when compared to last year due to the increased
gain on revaluation of biological assets at fair value and improving result of sales of agricultural produce.
Gross profit of crop growing segment,
EUR million
12-month
of 2022
12-month
of 2021
12-month
of 2020
Variance
2022/2021
Variance
2021/2020,
Gain (loss) on revaluation of biological assets
at fair value recognised in reporting period
4.80
(3.18)
7.69
n/a
n/a
Result of sales of agricultural produce
(2.01)
(5.64)
(2.26)
-64%
+112%
Subsidies
9.89
9.69
7.45
+2%
+30%
Gross profit
12.68
0.89
12.88
+1 325%
-93%
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CONSOLIDATED ANNUAL REPORT 2022
CONTENTS>
2.2.2. Dairy Segment Overview
The result of the dairy segment in the I-IV quarters of 2022 has improved compared to the same period last year. Rising production
prices had the largest effect. Compared to last year the total sales revenue of the dairy segment grew by 21% and reached EUR
16.5 million, while gross profit grew by 202% and reached EUR 2.57 million.
Although the number of milked cows changed slightly throughout the year (3,577 as of December 31, 2021, and 3,457 as of
December 31, 2022), the amount of sold production decreased by 2% in 2022. The average milk yield, compared to previous
year, decreased due to a changed feed ration for cows: due to the poor 2020/2021 season of leguminous crops (protein feed),
there was a shortage of feed ingredients, and the quality of feed was affected. With the use of 2021/2022 season crops, the quality
of feed and milk yield returned to the level of 2021.
In the 12 months of 2022 the average price of milk sold was around EUR 532 per tonne and 28% higher comparing to the same
period last year when it was EUR 416 per tonne.
The dairy segment’s cost of sales amounted to EUR 14.91 million during the 12 months of 2022 which is 13% more than in the
same period last year.
A loss of EUR 2.09 million was incurred due to the revaluation of biological assets (animal herd) in 2022. In comparison, the loss
due to the revaluation of biological assets (animal herd) was 25% higher last year.
In 2022, the Group has recorded a EUR 2.57 million gross profit which marks a threefold increase when compared to the last
year.
12-month
of 2022
12-month
of 2021
12-month
of 2020
Variance
2022/2021
Variance
2021/2020,
Total quantity of products sold, t
26,594
27,053
26,799
-2%
+1%
Milk, t
25,334
25,685
25,384
-1%
+1%
Dairy commodities, t
457
624
714
-27%
-13%
Cattle, t
803
743
700
+8%
+6%
Revenue, EUR million
16.50
13.61
12.95
+21%
+5%
Milk, EUR million
13.48
10.69
10.07
+26%
+6%
Dairy commodities, EUR million
1.71
2.02
2.13
-15%
-5%
Cattle, EUR million
1.31
0.90
0.75
+46%
+20%
Cost of sales, EUR million
14.91
13.15
12.56
+13%
+5%
Milk, EUR million
11.94
10.36
9.75
+15%
+6%
Dairy commodities, EUR million
1.66
1.89
2.07
-12%
-9%
Cattle, EUR million
1.31
0.90
0.75
+46%
+20%
Revaluation of biological assets, EUR
million
(2.09)
(2.77)
(2.52)
-25%
-10%
21,4
22,0
22,3
22,4
21,1
20,8
20,5
20,6
20,2
20,5
20,7
21,3
22,0
22,1
22,0
22,0
21,9
21,2
21,8
20,6
20,3
20,6
21,6
22,7
22,9
22,5
21,2
20,1
19,9
20,0
19,2
19,5
20,7
21,5
19,0
20,0
21,0
22,0
23,0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Milk yield per cow per day, kg
2020 2021 2022
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CONSOLIDATED ANNUAL REPORT 2022
CONTENTS>
Subsidies, EUR million
3.07
3.17
2.53
-3%
+25%
Gross profit, EUR million
2.57
0.85
0.40
202%
+113%
2.2.3. Mushrooms Segment Overview
Sales revenues in the mushroom growing segment amounted to EUR 27.90 million in 2022 which marks a decrease of 2%
compared to the same period last year. Segment’s gross loss accounted to EUR 1.40 million.
The main factor of the negative segment’s result was soaring energy and other costs. The total cost of sales of the mushroom
growing segment amounted to EUR 29.30 million in the 12-month period of 2022 and was EUR 1.61 million higher compared to
the same period in 2021. Cost of mushrooms mainly has shifted upwards due to growing energy and transportation costs that
showed an increase of 65% (EUR 2.30 million) when compared to the corresponding period last year. The average cost of 1 tonne
of mushrooms sold increased from 2,294 EUR/tonne to 2,519 EUR/tonne
Sales price was increased in order to compensate the growth of costs. In the 12-month period of 2022, the average non-organic
and organic mushrooms sales price per tonne, which was equal to EUR 2,384, has increased only by 3% when compared to the
equivalent period in 2021. However, excluding transport and taking into account the difference in the product basket the price of
mushrooms, in the 4
th
quarter of 2022 was 16% higher than in the 1
st
quarter of 2022. The ratio of organic mushrooms sold has
increased and reached 7.4% during the 4 quarters of 2022. The same ratio last year was equal to 5.7%.
The production volume was not optimal due to savings of energy resources and challenges in production processes. In 2022, 11
thous. tonnes of mushrooms were produced, which is 1% less than in 2021.
As a result, the gross result of the segment was negative and for the 12-month period of 2022 amounted to a loss of EUR 1.40
million. Nonetheless, since the energy costs have decreased and stabilised, also, the prices of mushrooms were increased, which
resulted in a positive outcome in the 4
th
quarter of 2022. The gross profit in the last quarter was EUR 78 thousand. When higher
production capacities will be reached the Group expects to improve the result of the segment even further.
12-month
of 2022
12-month
of 2021
12-month
of 2020
Variance
2022/2021
Variance
2021/2020,
Sold mushrooms, t
11,552
12,002
12,906
-4%
-7%
Average price (Eur/t)
2,384
2,323
2,199
+3%
+6%
Total revenue, EUR million
27.90
28.36
30.00
-2%
-5%
Mushroom sales revenue, EUR million
27.54
27.89
28.38
-1%
-2%
Compost sales revenue, EUR million
0.36
0.47
1.62
-23%
-71%
Cost of sale, EUR million
(29.30)
(27.69)
(28.25)
+6%
-2%
Cost of mushrooms sold, EUR million
(28.94)
(27.45)
(26.89)
+5%
+2%
Cost of compost sold, EUR million
(0.36)
(0.24)
(1.36)
+50%
-82%
Gross profit, EUR million
(1.40)
0.67
1.75
n/a
-62%
3 097
3 081
2 487
2 743
2 857
2 998
2 681
2 709
700
1 200
1 700
2 200
2 700
3 200
3 700
I quarter II quarter III quarter IV quarter
Picked mushrooms, t.
2021 2022
25
CONSOLIDATED ANNUAL REPORT 2022
CONTENTS>
2.2.4. Fast-moving Consumer Goods (FMCG) Segment
As previously announced, the first half of the year was not very successful for this segment due to various global events. However,
the positive breakthrough that occurred in the third quarter carried into the final quarter, with sales returning to target levels and
reaching EUR 8.12 million by the end of 2022, an increase of 31% from 2021.
In 2022, the segment's gross profit increased to EUR 1.74 million, up from EUR 1.54 million in 2021.The Group had targeted even
better results, but there was a delay in price increases associated with rising production costs and in the launch of new products
on the market, which prevented the targets from being achieved in 2022, yet the changes already in progress are bound to have
a positive impact on the 2023 results.
FMCG segment results, EUR million
12-month
of 2022
12-month
of 2021
12-month of
2020
Variance
2022/2021
Variance
2021/2020,
Sales revenue
8.12
6.19
4.88
+31%
+27%
Cost of goods sold
(6.38)
(4.66)
(4.13)
+37%
+13%
Gross profit
1.74
1.54
0.75
+13%
+105%
During the 12-month period of 2022 the Group has exported its products to 33 countries compared to 36 countries in the same
period in 2021.
Preserved products, especially ready-to-eat organic soups, remain the main product group in the segment.
84%
6%
2%
4%
4%
Revenue structure of the fast moving consumer goods sales, %
Preserved mushrooms, vegetables and soups
Grain products
Eggs
Packaged vegetables
Other end-consumer products (milk, vegetables, etc.)
26
CONSOLIDATED ANNUAL REPORT 2022
CONTENTS>
2.3. Selling and Administrative Expenses
The Group's selling and administrative expenses during the 12-month period of 2022 amounted to EUR 12.77 million compared
to EUR 11.73 million in the same period last year. The increase is mainly due to increased salaries and social security
contributions, transportation, marketing, advertising and intermediation expenses.
2.4. Capital Expenditures and R&D
Total investments (additions) into property, plant and equipment amounted to EUR 7.19 million in 2022 (2021 - EUR 10.05 million).
The split of investments (additions) into property, plant and equipment is provided in the table below.
Investments (additions) into property, plant and equipment, EUR’000
Land*
Buildings*
Constructions
and machinery
Vehicles, equipment
and other
Construction
in progress
Total
2022
436
265
1,932
285
4,271
7,189
2021
1,182
493
4,397
1,116
2,863
10,051
*excluding additions related with the right-of-use assets.
Even though investments in long-term assets decreased in 2022, but the Group continues to implement planned technological
projects. The Group introduced the first biomethane and electricity powered tractor from its first production batch at the beginning
of February 2023. Tractors from the first production batch are going to work in the fields in the spring of 2023. In early 2023, the
first biomethane infrastructure projects will be completed and biomethane production will begin. Two more biomethane power
plants are going to be launched by the third quarter of 2023. The development and testing of specialized feed technology also
continues.
More information on these projects is presented in the Sustainable report, section Research and Development.
27
CONSOLIDATED ANNUAL REPORT 2022
CONTENTS>
2.5. Finance Costs and Financial Liabilities
The Group’s interest bearing debt increased and reached EUR 74.19 million as of 31 December 2022. Finance costs (excl. IFRS
16 effect) have shifted from EUR 3.89 million in 2021 to EUR 4.82 million in 2022:
2022
2021
2020
Variance
2022/2021
Variance
2021/2020,
Current and non-current financial liabilities, EUR
thousand
117,027
102,985
94,541
+14%
+9%
Current and non-current financial liabilities (excl.
IFRS 16 effect), EUR thousand
74,189
63,871
59,915
+16%
+7%
Cash and cash equivalents, EUR thousand
3,337
2,446
2,541
+36%
-4%
Organic agriculture is a working capital-intensive business, due to this reason the Group’s debt level has historically always been
fairly high.
Management of the Group believes that another important factor evaluating financial liabilities level of the Group is net debt
adjusted by working capital level. Deducting cash and cash equivalents and adjusted working capital from the level of financial
liabilities more clearly indicates the financial liabilities that are not covered by working capital and cash operated by the Group.
As of 31 December 2022 the Group’s adjusted working capital was EUR 32.42 million compared to EUR 28.53 million on 31
December 2021. Financial liabilities (excl. IFRS 16 effect) of the Group minus cash and cash equivalents minus adjusted
working capital as of 31 December 2022 were EUR 38.43 million or EUR 5.53 million higher than at the end of 2021.
2022
2021
2020
Variance
2022/2021
Variance
2021/2020,
Adjusted working capital, EUR thousand
32,424
28,531
41,953
+14%
-32%
Net debt – adjusted working capital*, EUR
thousand
38,428
32,894
15,421
+17%
+113%
*Adjusted working capital = Current biological assets + Trade receivables, advance payments and other receivables + Inventory – Trade payables – Other payables
and current liabilities. The adjusted working capital formula eliminates cash and financing elements allowing the reader to see how the short-term assets and liabilities
directly related to operations of the Group are being utilized.
This year the difference between net debt and adjusted working capital grew due to the Group’s poor financial results in 2021.
Significant increase of costs in 2022 required additional working capital, part of which was financed by loans.
2.6. Cash Flow
Rising costs, higher harvest and its sales terms resulted in net cash flows from operating activities for the Group decreasing to
0.69 million euros in 2022. Net cash flows from operating activities amounted to 8.14 million euros in 2021.
2022
2021
2020
Variance
2022/2021
Variance
2021/2020,
Net cash flows from /(to) operating activities,
EUR million
0.69
8.14
13.37
-92%
-39%
Net cash flows from /(to) investing activities
EUR million
(5.40)
(5.89)
(7.23)
-8%
-19%
Net cash flows from /(to) financing activities,
EUR million
5.60
(2.35)
(7.34)
n/a
-68%
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2.7. Information on Shares and Bonds
2.7.1. Shares
The securities of the Company are included in Main List of NASDAQ Vilnius stock exchange (symbol: AUG1L).
Type of shares
Number of
shares
Share nominal value
(in EUR)
Total share capital (in
EUR)
Issue Code
ISIN
Ordinary registered shares
229,714,102
0.29
66,617,090
LT0000127466
Information about the Company’s shares trading on the NASDAQ Vilnius.
Reporting period
Price, EUR
Total turnover
Average
Open
Max
Min
Last
Units
EUR
2022 I-IV quarters
0.439
0.498
0.524
0.378
0.389
5,226,074
2,294,852
From 1 January 2022 to 31 December 2022 the share price has decreased by 22.66%. The OMX Baltic Benchmark index
decreased by 12.55% during the respective period.
AUGA group, AB share price, turnover and changes of OMX Baltic Benchmark index from 1 January 2020 to 31 December 2022:
Source: NASDAQ Vilnius stock exchange
0
0,1
0,2
0,3
0,4
0,5
0,6
0,7
0
100000
200000
300000
400000
500000
600000
700000
800000
VOLUME (UNITS)
PRICE (EUR)
Shares volume Share price OMX Baltic Benchmark GI
| 2020 | 2021 | 2022 |
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2.7.2. Bonds
At the end of 2019, the Company issued green bonds for EUR 20 million nominal value. It was the first fully privately-owned listed
entity in the Baltic states to issue green bonds and one of the largest bond issues on the Nasdaq Baltic in terms of value and
number of investors.
Bonds of the Company are included in Baltic Bond List of NASDAQ Vilnius stock exchange (ticker: AUGB060024A).
Green bond details
Issuer
AUGA group, AB
ISIN code
LT0000404238
Listing
Nasdaq Vilnius
Denomination
EUR 1,000
Issue size
EUR 20,000,000
Tenor
2019-2024
Maturity date
17.12.2024
Fixed coupon rate
6% (By decision of the Company, the coupon rate is calculated by applying the act/360
convention)
Bonds’ trading annual turnover was EUR 0.71 million in 2022.
The Company has an obligation to publish a separate annual report regarding the use of funds. The report can be found on the
Company’s website.
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2.8. Summary of 2022 Results and Outlook into 2023
The Group’s financial results have improved significantly in 2022. Agriculture segment had the biggest impact:
In 2022, the results of the crop growing segment significantly improved. Timely and proper seeding, favorable weather conditions
during the winter season create positive expectations for the 2023 harvest, but there is uncertainty in the markets regarding the
level of new harvest prices.
Despite the decrease in production volumes, 2022 was a successful year for the dairy segment. Price correction will have a
negative impact on the segment's results in 2023, but the Group expects that this will be partly offset by increased yields.
Increased costs led to poor mushroom growing segment results in 2022. With energy costs decreasing and stabilizing, and
production prices increasing, a positive result was already recorded in Q4 2022. The Group believes that higher production
volumes will be achieved in 2023, maintaining the current cost/price level, which will allow significantly improve segment results.
The fast moving consumer goods segment maintained its growth trend. The Group expects similar sales growth to be achieved
in 2023. Growing activities, better utilisation of production capacity, price review and introduction of new products should have a
positive impact on segment‘s profitability growth.
2022 was a successful year in terms of developing and implementing new technologies which will contribute to the achievement
of the Group’s Strategy. Successive creation of novel methodologies in the agricultural business, their implementation in actual
operations and readiness to further develop such technological solutions will be the Group’s top priority in 2023.
Information regarding important events after the end of the financial year is presented in the explanatory notes of the financial
statement (note 33).
Agriculture Dairy Mushrooms FMCG IFRS16 effect Centralized OPEX
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3.1. Governance Model
The current corporate governance structure was introduced in 2019, when the Company changed to a one tier board structure
instead of a two-tier structure, with the management board taking over the functions of previous supervisory council.
Three are three corporate bodies in the Company: the general shareholders’ meeting, the independent board (hereinafter – the
Board), the Chief Executive Officer (CEO), and an advisory body – the audit committee.
The general meeting of shareholders is the supreme body of the Company.
The members of the Board are elected by the general meeting in accordance with the procedure established by the Law on
Companies of the Republic of Lithuania. The chair of the Board is elected by the Board from its members for two years.
The Company does not have an approved diversity policy for the election of the Company's CEO or members of the Board, but
the Company has a Human Rights, Non-Discrimination, Child and Forced Labour Policy, which applies to the election of the
Company's CEO or members of the Board. The Company's Board is elected taking into account their competences, which would
be applicable in the implementation of strategic projects of the entire Group and would cover important areas, such as, for example,
the implementation of sustainability, relations with investors, product development and so on. Also, one independent member of
the Board is delegated by the second largest shareholder - the European Bank for Reconstruction and Development. This practice
will continue to be followed in the future while electing a new composition of the Board.
In compliance with the best corporate governance practices the Articles of the Company determine the following functions and
responsibilities of the Board:
○ approval of the Group‘s strategy.
○ approval of the Group‘s annual budget and business plan.
○ approval of the risk level acceptable in the Group‘s activity and the risk management policy.
○ approval of the annual financial and non-financial targets for the Company‘s CEO.
○ responsibility of overseeing and leading the Group‘s compliance with the best corporate governance practices.
The Board also appoints, removes, and supervises the activities of the Company’s CEO, who is in charge of Group’s management
and organisation of activities. The Board approves the Sustainability Report of AUGA group, provides comments and insights
during the process of its preparation.
The members of the audit committee are elected by the Board of the Company from among its members, by a simple majority
vote for a two-year term, which coincides with the term of office of the committee members as members of the Board. The Board,
considering the complexity of the Company's activities and the level of risk, may decide to increase the number of committee
members and/or change its composition. The members of the committee must be of impeccable reputation, appropriate
qualifications and experience, collegiately possessing knowledge in the field of finance, accounting, or auditing of financial
statements and in the sector, in which the Company operates.
The audit committee operates in line with the principles, outlined in the Regulations of audit committee of Company. The audit
committee is an advisory body of the Board. The main functions of the audit committee include:
○ monitoring the process of the preparation of the financial statements of the Company,
○ monitoring the audit process of the Company,
○ analysing the effectiveness of internal audit and risk management systems,
○ approving the requirements for external auditors and evaluating both the qualification and the experience of external
auditors.
GENERAL
SHAREHOLDER‘S
MEETING
Shareholder’s rights
INDEPENDENT
BOARD
Management and
supervisory function
5 independent members
CEO
Management and
organisation function
AUDIT
COMMITTEE
Advisory function
3 independent members of the
Board
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The CEO oversees the daily management of the Company and has the authority to represent the Company in relations with third
parties. According to the Articles of the Company, the CEO is entitled to take decisions on transactions, which value do not exceed
1/20 of the authorised capital of the Company. For transactions exceeding the latter threshold, the Board’s approval is required.
The Articles of Association of the Company shall constitute a document governing the conduct of business of the Company. The
original copy of the Articles of Association of the Company shall be kept in the custody of the Company. The Articles of Association
of the Company shall be amended following the procedure provided by the laws of the Republic of Lithuania and Articles of
Association. A resolution to amend the Articles of Association of the Company shall be adopted by the general meeting of
shareholders with the qualified majority of at least 2/3 of votes conferred by the shares of all shareholders present at the meeting,
except in cases specified in the Law of the Republic of Lithuania on Companies.
Information on the Company’s compliance with the Code of Corporate Governance is provided in the Annex.
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3.2. Share Capital Structure and Shareholders
The share capital of AUGA group, AB as of 31 December 2022 was EUR 66.62 million (EUR 65.95 million on 31 December 2021).
The Company's authorized capital consists of 229,714,102 ordinary registered shares (227,416,252 ordinary registered shares
on 31 December 2021). Each issued share has a EUR 0.29 nominal value and is fully paid.
The increase in the number of shares and authorised capital was a result of implementation (realisation) of the first share option
contracts in June 2022, which were signed in 2019 under the employee share option programme.
Total number of shareholders on 31 December 2022 increased by 17.64% and was 2,974, while on 31 December 2021 this figure
was 2,528.
Shareholders, who held more than 5% of all shares of the Company:
Shareholder‘s name
31 December 2022
31 December 2021
Number of
shares
% owned
Number of
shares
% owned
UAB Baltic Champs Group (identification code: 145798333; address:
Poviliškiai v., Šiauliai region mun., Lithuania)
126,686,760
55.15
126,686,760
55.71
European Bank for Reconstruction and Development (identification
code: EBRDGB2LXXXX; address: One Exchange Square, London
EC2A 2JN, United Kingdom)
19,810,636
8.62
19,810,636
8.71
Žilvinas Marcinkevičius
15,919,138
6.93
15,919,138
7.00
Minority shareholders
67,297,568
29.30
64,999,718
28.58
Total:
229,714,102
100.00
227,416,252
100.00
Shareholders distribution by country and by type is as follows:
Country
Type
Owned shares in the Company,
units
Owned shares in the Company,
%
Lithuania
Legal entities
168,715,754
73.45%
Natural persons
26,429,413
11.51%
Other countries
Legal entities
31,251,494
13.60%
Natural persons
3,317,441
1.44%
Total:
Legal entities
199,967,248
87.05%
Natural persons
29,746,854
12.95%
None of the shareholders have special voting rights. There are no restrictions on voting rights in the company.
On 31 December 2022, the following part of the shares was managed by the Company's management and the members of the
Board:
Name, surname
Position
Owned shares in the Company,
units
Owned shares in the Company,
%
Kęstutis Juščius*
CEO
1,392
0.0006
Tomas Krakauskas
Member of the Board
119,000
0.0518
Mindaugas Ambrasas
CFO
6,881
0.0030
*Kęstutis Juščius, CEO, is the ultimate owner of Baltic Champs Group, UAB, which controls 55.15% of the Company‘s shares.
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3.2.1. Information on Own Shares
The Company has not acquired any of its own shares.
3.2.2. Share Transfer Restrictions
Laws and the Articles of Association do not provide restrictions on the transfer of shares. Separate share transfer restrictions are
possible but can only be imposed by the shareholders and only in agreed-upon cases.
The Company was advised of the following contractual share transfer restrictions by one of the main shareholders of the Company:
Baltic Champs Group, UAB agreed on certain restrictions with its financing bank in respect of the financing provided by it, and AS
LHV Pank, which acted as a global lead manager of the Company’s shares during the secondary public offering carried out by
the Company in 2018. In the latter case, restrictions were undertaken by the majority shareholder in relation to the latter public
offering.
3.2.3. Information on Significant Agreements, Which Could be Affected by the Change in
Shareholders Structure
Bank loans and financial lease agreements of Group companies, including the Company, have a change of control clause at the
Group level which is standard practice for such agreements. The Company or the Group has not entered into any other significant
agreements whose validity, amendment and termination could be affected by a change in shareholder structure.
3.2.4. Agreements Between the Shareholders
According to 31 December 2022 data it is not known, or the Company has not been informed about any agreements between
shareholders. The company, its main shareholder Baltic Champs Group, UAB, Kęstutis Juščius and the European Bank for
Reconstruction and Development (EBRD) on 19 July 2018 entered into an agreement on the basis of which Baltic Champs Group,
UAB undertook to vote for the candidate nominated by the EBRD as a member of the Board, as long as the EBRD controls at
least 3% of the Company's shares. The Company also undertook to comply with certain environmental protection, social
compliance, corporate governance recommendations and requirements. Considering this, this agreement by its nature cannot be
considered as a shareholder’s agreement.
3.2.5. Investor Relations
Stakeholder engagement is one of AUGA group's top priorities in implementing sustainable management practices. The Group
aims to ensure that investors are regularly informed about the Group's activities and results, thereby creating an open and reliable
relationship with one of the most important groups of stakeholders of AUGA group. The Group publishes all relevant information:
analyst assessments, quarterly reports, videos of remote conferences, presentations and performance results in Excel format on
its website, in the investor newsletter, on the Nasdaq Baltic website. As before, and in 2022, the Group's activities were assessed
by international analyst companies: WOOD & Company, Enlight Research and LHV bank. In 2022, AUGA group organised 4
events for local and international investors, published 12 informative newsletters. The Group actively communicated its activities
by also using mass media.
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3.3. The Board and its Committees
The Articles provide that at least 1/3 of the Board members must be independent. In 2019, the general shareholders’ meeting
approved independency criteria for members of the Company’s collegiate bodies, which comply with the independency criteria
established by the Law on Companies of Republic of Lithuania, ensuring, that to be independent, a member must not be related
with the Company and/or its controlling shareholder
1
. Separation of powers is clearly defined in the management model of AUGA
group, therefore the CEO of the Company, according to the current procedure of the Company, cannot be a member of the
independent Board and is directly subordinate to this management body.
All members of the Board (100%) are considered to be independent based on legal acts and self-assessment conducted at the
Board meeting in May 2022. None of the members of the Board hold any other positions in AUGA group companies. 80% of the
Board members are men. Information about the members of the Company as of 31 December 2022:
Name, surname
Position
Status
Appointment date
Andrej Cyba
Member
Independent
30.04.2021
Tomas Krakauskas
Member
Independent
30.04.2021
Dalius Misiūnas
Chairman
Independent
30.04.2021
Murray Steele*
Member
Independent
30.04.2021
Michaela Tod
Member
Independent
30.04.2021
* Board member Murray Steele was nominated by a shareholder, the European Bank for Reconstruction and Development (EBRD), which owns
8.62% of the Company's shares, and receives additional remuneration from the EBRD for the performance of the functions of a Board member,
however, (i) the EBRD is not a controlling shareholder; and (ii) Murray Steele has assured the Board that he is acting in his discretion as an
independent member of the Board and therefore is considered as an independent member of the Board.
The current Board’s tenure is until the annual general meeting of shareholders of the Company, which will take place in 2023.
During 2022, 11 ordinary Board meetings were held. At all meetings there was a quorum in accordance with legislation and the
articles of association of the Company. During 2022 Andrej Cyba, Dalius Misiūnas, Murray Steele and Michaela Tod participated
in all 11 Board meetings and Tomas Krakauskas participated in 10 Board meetings.
3.3.1. Members of the Board
Andrej Cyba
Education, qualification: Vilnius University, Management and Business Administration,
Bachelor degree.
Activity: Member of the Board of AUGA group, AB (legal form: Public Limited Company,
code: 126264360, registered address Konstitucijos ave. 21C, Vilnius, Lithuania) (2019 –
present).
Miscellaneous: Chief Business Development Officer of “INVL Asset Management“, UAB
(legal form: Private limited company, code 126263073, registered address: Gynėjų str. 14,
Vilnius, Lithuania) (2016 – present); Chairman of the Board of "INVL Finasta", UAB FMĮ
(legal form: Private limited company, code: 304049332, registered address: Gynėjų str. 14,
Vilnius, Lithuania) (2016 – present); Chairman of Supervisory Board of IPAS "INVL Asset
Management“ (legal form: Private limited company, code: 40003605043, registered
address: Smilšu 7-1, Riga, Latvia) (2016 – present); Chairman of the Supervisory Board of
“INVL ATKLĀTAIS PENSIJU FONDS“, AS (legal form: Public limited company, code:
40003377918, registered address: Smilšu 7-1, Riga, Latvia) (2016 - present); Board
Member of “Vilkyškių pieninė“, AB (legal form: Public limited company, code: 277160980,
registered address: Prano Lukošaičio str. 14, Vilkyškiai, Pagėgiai district municipality,
Lithuania) (2008 - present); CEO of “Piola“, UAB (legal form: Private limited company, code:
120974916, registered address: Mindaugo str. 16-52, Vilnius, Lithuania) (2009 – present);
CEO of “PEF GP1“, UAB (legal form: Private limited company, code: 302582709, registered
address: Maironio str. 11, Vilnius, Lithuania) (2012 – present); CEO of UAB "PEF GP2",
UAB (legal form: Private limited company, code: 302582716, registered address: Maironio
str. 11, Vilnius, Lithuania) (2012 – present); Chairman of the Board of "VOKĖ-III", UAB
(legal form: Limited liability company, code: 120959622, registered address: Piliakalnio str.
70, Nemenčinė, Lithuania) (2020 – present); Board Member of SIA “Baltic Dairy Board”
1
The criteria for the independence of the Board members are established in Article 33, Part 7 of the Law on Joint Stock Companies of the Republic of Lithuania; the
independence criteria of the company's Board members, approved by 2019 general shareholders meeting, are available at:
https://view.news.eu.nasdaq.com/view?id=b4abd5530afde9ed9b2bf89f38ec3ef91&lang=en
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(legal form: Private limited company, code: 43603036823, registered address: Stacijas 1,
Bauska, Latvia) (2021 – present); CEO of “LAMA Capital”, UAB (legal form: Limited liability
company, code: 306178639, registered address: Šaltinių str. 24-10, Vilnius, Lithuania)
(2022 – present).
Tomas Krakauskas
Education, qualification: Vilnius University, Management and Business Administration,
Bachelor degree; ISM University of Management and Economics, ISM executive school,
Master’s degree.
Activity: Member of the Board of AUGA group, AB (legal form: Public limited company,
code: 126264360, registered address Konstitucijos ave. 21C, Vilnius, Lithuania) (2019 –
present).
Miscellaneous: Chief investment Officer of UAB “ME investicija“ (legal form: Private limited
company, code: 302489393, registered address Račių str. 1, Vilnius, Lithuania) (2016 –
present); Member of the Board of “SIRIN Development” (legal form: Limited liability
company, code: 300570900, registered address: A. Vivulskio str. 7-1, Vilnius, Lithuania
(2022 – present); Member of the Board of “Vilnius University foundation“ (legal form:
Support Fund, code: 304222713, registered address: Universiteto str. 3, Vilnius, Lithuania)
(2022 – present).
Dalius Misiūnas (chairman)
Education, qualification: Kaunas University of Technology, Electrical Engineering,
Bachelor’s degree; Lund University (Sweden), PhD in Technology Science; Baltic Institute
of Corporate Governance, Professional Board member certificate; Baltic Institute of
Corporate Governance, Chairman of the Board certificate.
Activity: Chairman of the Board of AUGA group, AB (legal form: Public limited company,
code: 126264360, registered address Konstitucijos ave. 21C, Vilnius, Lithuania) (2019 –
present).
Miscellaneous: President at ISM University of Management and Economics (legal form:
Private limited company, code: 111963319, registered address Aušros Vartų str. 7A,
Vilnius, Lithuania) (2019 – present); Member of Supervisory Board of “Swedbank", AB
(legal form: Public limited company, code: 112029651, registered address Konstitucijos
ave. 20A, Vilnius, Lithuania) (2021 – present).
.
Murray Steele
Education, qualification: Glasgow university (United Kingdom), Mechanical Engineering,
Bachelor’s degree; Glasgow university (United Kingdom), Aeronautical Thermodynamics,
Master degree; Cranfield university (United Kingdom), Business Administration, Master
degree.
Activity: Member of the Board of AUGA group, AB (legal form: Public limited company,
code: 126264360, registered address Konstitucijos ave. 21C, Vilnius, Lithuania) (2019 –
present).
Miscellaneous: Chairman of the Board of “Octopus Apollo VCT” (legal form: Venture capital
trust, code OAP3, registered address: 33 Holborn, London, EC1N 2HT, United Kingdom)
(2008 – present); Chairman of the Board of “Surface Generation” (legal form: Private limited
company, code 04379384, registered address: Brackenbury Court, Lyndon Barns Edith
Weston Road, Lyndon, Oakham, England, LE15 8TW, United Kingdom) (2008 – present).
Michaela Tod
Education, qualification: Vienna University of Economics and Business (Austria), Business
and Economics Master’s degree.
Activity: Member of the Board of AUGA group, AB (legal form: Public limited company,
code: 126264360, registered address Konstitucijos ave. 21C, Vilnius, Lithuania) (2021 –
present).
Miscellaneous: Supervisory Board member of “mytheresa.com GmbH” (legal form: Private
limited company, code: HRB 135658, registered address Einsteinring street 37, Munich,
Germany) (2020 – present); Member of the Board of “ProGamers Group GmbH“ (legal
form: Limited liability company, code: HRB 157289 B, registered address: Gaußstraße 1,
Berlin, Germany) (2021 – present); Member of the Board of “Elvie (Chiaro Technology Ltd)“
(legal form: Limited liability company, code: 08502405, registered address: 63-66 Hatton
Garden EC1N 8LE, London, United Kingdom) (2022 – present).
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3.3.2. Board Committees
The Company has one committee – audit committee. The audit committee is an advisory body of the Board in the areas of
accounting, auditing, risk management, internal control and auditing, supervision, budgeting, and legality of operations. Its
functions are described in the section 3.1. Governance model. 67% of the audit committee consists of men.
Information regarding audit committee members as of 31 December 2022.
Name, surname
Position
Status
Andrej Cyba
Chairman
Independent
Murray Steele
Member
Independent
Michaela Tod
Member
Independent
During 2022, 6 audit committee meetings were held. At all meetings there was a quorum in accordance with legislation and the
regulations of the Company's audit committee. All members participated in all audit committee meetings.
3.4. Management
Kęstutis Juščius, CEO (30.04.2019 – present)
Education, qualification: Vilnius University, Business Administration, Bachelor’s Degree
(1995).
Activity: CEO of AUGA group, AB (legal form: Public Limited Company, code: 126264360,
registered address: Konstitucijos ave. 21C, Vilnius, Lithuania) (2019 – present).
Miscellaneous: Chairman of the Board of Baltic Champs Group, UAB (legal form: Private
limited company, code: 145798333, registered address: Poviliškių v. Šiauliai district
municipality, Lithuania) (2014 - Present); President of Lithuanian Mushrooms Growers and
Processors Association (legal form: Association, code: 124135819, registered address:
Zibalų str. 37, Širvintos, Lithuania) (2013 – present).
Mindaugas Ambrasas, CFO (12.03.2020 – present).
Education, qualification: Vilnius University, Master‘s degree in Economics.
Activity: CFO of AUGA group, AB (legal form: Public Limited Company, code: 126264360,
registered address: Konstitucijos ave. 21C, Vilnius, Lithuania) (2020 – present).
3.5. Information on Transactions with Related Parties
Information on transactions with related parties is disclosed in the explanatory notes (note 30) of the consolidated and separate
financial statements for the year ended 31 December 2022.
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3.6. Remuneration Report
The Remuneration Report of the Company has been prepared for the financial reporting year 2022, which coincides with the
calendar year. The Report is a part of the Consolidated Annual Report of the Company prepared in accordance with the Law on
Financial Statements of Entities of the Republic of Lithuania, the Remuneration Policy of the Company, and other legal acts.
On 29 April 2022, the general meeting of shareholders of the Company unanimously approved the Remuneration Report of the
Company which, as a part of the Consolidated Annual Report of the Company, is publicly available on the Company’s website.
3.6.1. Management Bodies Remuneration
The Company’s management bodies include the members of the Board and the Chief Executive Officer (6 persons).
The members of the Board receive the following remuneration for the performance of Board member functions:
○ EUR 1,900 (before taxes) for members of the Board and EUR 2,500 (before taxes) for the chairman of the Board per one
board meeting, which includes preparation for the meeting, travel time to/from the meeting, attending the meeting, follow-up
questions and closure work related to the meeting. Should there be more than 12 board meetings in 12 months, the indicated
remuneration is to be paid for each meeting. Should there be less than 12 meetings per 12 consecutive months, the Board
member will nonetheless receive remuneration for 12 meetings per 12 months. Remuneration shall not be paid for decisions
made in writing or any other way in between the meetings nor for meetings, which the board member did not attend.
○ For Board members living abroad – compensation for travel and accommodation costs for/during attendance of the Board
meeting, not exceeding EUR 500 + VAT (Lithuanian tariff) for one Board meeting that they have attended; if the Board member
participates in a meeting via communication/IT measures (not physically traveling to Lithuania), travel costs compensation
for such participation shall not be paid.
The remuneration of the CEO of the Company includes an official monthly wage and additional benefits granted irrespective of
performance results and paid to all employees meeting the established criteria in accordance with the Group’s procedures in force
(e.g. health insurance). In addition to the official monthly wage or remuneration received in a different form, the CEO can be
included in the employee share option programme. The remuneration paid to the Board and the CEO is in accordance with the
Company's Remuneration Policy for the Executive Management, which was approved by the general meeting of shareholders
and is publicly available on the AUGA group’s website. The Company and its collegial bodies‘ members have not concluded any
agreements regarding compensation in the event of resignation, unjustifiable redundancy, or change in ownership structure.
The amount of accrued fixed remuneration for the Board members is provided in the table below:
Remuneration of the individual members of the Board, EUR
2022
2021
2020
Dalius Misiūnas (30.04.2019 – present)
32,500
27,500
30,000
Andrej Cyba (17.06.2019 – present)
24,700
19,000
22,800
Murray Steele (30.04.2019 – present)
24,700
20,900
23,572
Tomas Krakauskas (30.04.2019 – present)
24,700
20,900
20,900
Michaela Tod (30.04.2021 – present)
24,700
13,300
0
Total:
131,300
107,300
118,172
It is important to mention that in 2019 significant changes were made in the corporate governance structure and the Company
formed an independent Board. Until 30 April 2019, the Board members were formed out of employees of the Group and they did
not receive any remuneration for the performance of Board member functions. Members of the Board who, in addition to their
Board member position, served on another position in the Group, received salaries or payments for legal services as a direct
remuneration for their employment position within the Group (i.e. the Board included Group’s internal lawyer, CEO). Thus,
historical figures are not comparable and do not give a clear overview of governance bodies’ remuneration development.
The table below summarises gross salaries and payments for legal services for the Board members:
Remuneration paid to members of the Board, EUR
2022
2021
2020
Total remuneration
131,300
107,300
118,172
Number of Board members
5
5
5
Average annual remuneration per 1 member
26,260
21,460
23,634
The members of the Board of the Company did not receive payments from any subsidiary of the Company in 2022.
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No share options were granted to members of the Board in 2022. The Company did not pay variable remuneration to the Board
members in 2022.
3.6.2. Employees Remuneration
Average gross salaries per month of the Group employees are provided in the table below:
Average gross salaries of the employees of the Group (before taxes),
EUR
2022
2021
2020
CEO
7,498
7,584
7,222
Managers
3,710
3,414
3,431
Specialists
2,036
1,893
1,793
Workers
1,243
1,209
1,168
Other indicators
2022
2021
2020
Average gross salaries of the employees of the Group (excluding the CEO)
before taxes, EUR
1,509
1,469
1,405
Net profit (loss), th. EUR
(5,351)
(15,435)
1,792
In 2022, the current CEO, being the main shareholder of the Company through UAB Baltic Champs Group, UAB, did not receive
payments from any subsidiary, variable remuneration and was not granted share options. More information about the Group’s
personnel is presented in the AUGA group’s Sustainability Report section 4.4.2. Employees and Diversity.
3.6.3. Employee Share Option Programme
The Group runs a share option programme for its specialists and management personnel as an additional motivational tool. On
30 April 2019, during the general meeting of shareholders, the share option programme for employees was approved, and in 2022
the first options were realized, according to the contracts made in 2019. The number of contracts was 167, and the number of
shares - 2,297,850.
The employee options programme provides long-term benefits to employees and increases their motivation. Under the plan,
participants are granted options to receive shares of the Company for free, but only if the employee completes a 3-year term of
service in the Group. After this condition is met, the employee is eligible to exercise the option.
An option loses force if any restructuring, bankruptcy, liquidation or similar proceedings concerning the Company are commenced
and are ongoing and/or end with liquidation of the Company. It also loses force if both parties (the Company and the receiver)
agree to terminate the option agreement or if the receiver has caused damage to the Company through their actions or omissions.
These share-based payments to employees are equity-settled only. When exercisable, each option can be convertible into one
fully-fledged ordinary share. Such shares are issued from a reserve formed and approved by the shareholders to provide shares
for employees, at the nominal value of EUR 0.29, this way increasing the Company’s share capital.
Under the programme, options are granted free of charge. Employees, who will exercise their options and receive shares of the
Company, must pay income tax at the time of exercise of the option, in accordance with the applicable legislation.
Information regarding the share option programme:
2022
2021
2020
Number of participating employees
238
235
221
Number of allocated shares
1,651,185
2,381,701
2,226,830
3.7. Taxes and Regulatory Compliance
As specified in the AUGA group’s Code of Business Ethics, the Group complies with all applicable tax laws and strives to ensure
that obligations to the state are fulfilled in a transparent, responsible, and timely manner. The Group does not use tax avoidance
schemes, and does not work with partners, who use such schemes in their activities.
During the reporting period, the Group had no significant violations of legal acts or imposed sanctions that would have a significant
impact on the Group, its activities, or the interests of stakeholders.
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4.1. About the Sustainability Report
The Sustainability Report is a review of AUGA group activities, which the Group has been publishing annually since 2017. The
latest AUGA group Sustainability Report for 2022 was released in April 2023.
Unless specified otherwise, the Sustainability Report for 2022 covers the activities of all the Group’s companies in the period from
1 January until 31 December 2022. To enable comparison and highlight changes in key areas, AUGA group also includes data
from previous years. The Sustainability Report for 2022 is part of the Consolidated Annual Report, which is published on the
Nasdaq Baltic website and the AUGA group website.
Unless otherwise stated, the information contained in this report covers all the Group’s companies. Separate sustainability reports
are not prepared for the Group's subsidiaries.
AUGA group publishes its activity reports in the form required by regulations for listed companies. Nonetheless, what is first and
foremost important for the Group is to seek transparent and fair accountability to its stakeholders. The data presented in the
Sustainability Report shall be disclosed in accordance with the principle of materiality. The Sustainability Report for 2022 identifies
the key activities and achievements of the Group in the environmental, social and governance (ESG) areas during the reporting
year and the goals expected to be achieved in the future. This report also presents the biennial materiality assessment of AUGA
group’s sustainability criteria (the most recent assessment was made in 2021).
In preparing its Sustainability Reports, AUGA group follows the Nasdaq ESG Guide and is disclosing its performance in
accordance with the Global Reporting Initiative (GRI) standards. It is important for the Company to comply with the Sustainable
Development Goals set by the United Nations, therefore it follows these principles in its activities and informs of their
implementation in the Sustainability Report. It also reports on its progress in implementing the principles of the United Nations
Global Compact.
In 2022, all information regarding the Group's management is contained in the consolidated report’s section 3. Governance Report
to avoid duplication of information, when some information on sustainable governance practices was also included in the
Sustainability Report section. Methodological principles were not changed when preparing the report, compared to previous years.
The Group's Consolidated Annual Report, which includes the Sustainability Report, complies with the requirements for such
reports set forth in the legislation of the Republic of Lithuania and the Communication from European Commission C/2017/4234
- Guidelines on Non-Financial Reporting. The report discloses information in accordance with the taxonomy regulation (EU)
2020/852, which establishes a classification system for sustainable economic activities and investments, for the part of the Group's
activities to which the regulation applies.
AUGA group always strives for consistency and tries to present the publicly released datasets in an informative, convenient, and
standard format. Its Sustainability Reports are published annually maintaining a similar structure. In this way, the Group seeks to
ensure that all relevant information about the current period and historical data is readily available to its stakeholders.
Keen to make the data presented in its Sustainability Report transparent, since 2019 AUGA group has had an audit of its emissions
carried out by the independent international company Carbon Footprint. The Group's management has also decided to audit the
entire Sustainability Report and has designated a responsible person - the head of sustainability - to oversee this process. The
full Sustainability Report was audited for a second time by an independent consulting company Sustain Advisory in 2022.
The contact person responsible for sustainability is Gediminas Judzentas, Marketing and Sustainability Director of AUGA group
(g.judzentas@auga.lt).
GRI 2-3
GRI 3-1
GRI 3-2
GRI 2-4
GRI 2-5
GRI 3-3
Nasdaq V10
Nasdaq V10
Nasdaq V9
Nasdaq V8
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4.2. Our Approach to Sustainability
In managing the area of sustainability, AUGA group aims to abide by the best global practices and recommendations envisaged
in international sustainability standards. The Group has a sustainability strategy, which it applies across all its companies and
activities.
AUGA group's management team with an involvement of the Board regularly discusses sustainability goals and achievements.
The Group has a sustainability manager, who spearheads AUGA group's sustainability activities and reports it to the CEO.
Additionally, one Board member is responsible for overseeing the area of sustainability (from April 2021 to April 2023, this position
is held by Michaela Tod). The Group’s sustainability manager submits a sustainability overview to the Board once a year. This
review not only presents the Sustainability Report for the past year, but also global sustainability trends, changes in EU and local
regulation, consumer research, and practices of other companies. At least twice a year, joint meetings of the Group's sustainability
manager and the Board member responsible for sustainability are held, also including the managers of other relevant functional
areas, regarding the implementation of the organisation's sustainability strategy.
The Group's sustainability strategy is inseparable from stakeholder engagement and ongoing dialogue with them regarding
relevant topics. Also, every two years, AUGA group conducts an assessment of what factors are the most important to the Group
and its stakeholders. This is done in order to have a positive impact on the most relevant areas. The Group accounts to its
stakeholders by annually publishing a Sustainability Report, which is approved by the Board, together with the annual financial
statements. An annual Board meeting for reviewing sustainability matters also approves the annual goals and the Board provides
feedback to the management regarding sustainability management.
To promote transparency and honesty in all its activities, AUGA group has policies in place on good governance, social issues
and environmental protection policies. In pursuit of the same goals, the Group also provides activity reports and sustainability data
to international initiatives that monitor and supervise sustainable activities. It is a member of a variety of organisations in this area.
Procedures for preparing the Sustainability Report along with standards and other principles of sustainability reporting are
described in more detail in the section 4.1. About the Sustainability Report.
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4.2.1. Sustainability Strategy
AUGA group's sustainability strategy is an integral part of the Group's business strategy, which is described in more detail in the
section 1.4. Strategy. The five-year strategy presented in 2020 is publicly available on the AUGA group website and is consistently
being implemented. Sustainability is in the DNA of AUGA group, which it strives to achieve in all three areas of sustainability:
social responsibility, sustainable governance and environmental protection, to which it gives particular emphasis.
Environmental Protection
Although today the Group undertakes organic agriculture and does more in the field of environmental protection than is required
by organic farming standards, these measures are not enough to reduce the negative impact of agriculture on the environment.
Globally, agriculture is responsible for more than 20% of the world’s greenhouse gas emissions. As the largest vertically integrated
organic food producer in Europe, AUGA group is taking the lead in addressing this sensitive issue. In 2018, the Group set
ambitious emission reduction targets (for more details, see section 4.3.4. Greenhouse Gases) and began developing new
technologies that will allow us to set the standard for sustainable agriculture and produce food with no cost to nature.
The first result of implementing the 2020-2025 strategy was the AUGA M1 prototype of biomethane and electricity-powered tractor
for professional use, which was presented in 2021. It can save 100 t of CO
2
e emissions per year, compared to its fossil-fuel-
powered analogues. During 2022, the prototype was prepared for serial production and at the beginning of 2023 the tractor from
the first production batch was presented to the public. For more information on advances in AUGA group’s development of
technologies for agriculture in 2022, see section 4.3.10. Research and Development.
The Group will strive to promote wide adoption of the innovative solutions it creates to allow farmers to work more sustainably,
thus creating the opportunity for consumers to choose food with no cost to nature.
Social Responsibility
Social issues are an important part of the Group's activities. This involves ensuring safety at work as well as gender equality,
human rights and non-discrimination, zero tolerance for child or forced labour, and building a dialogue with the communities in the
places where the Group's companies operate.
Sustainable Governance
The Group also follows good governance practices through an independent Board model and seeks to ensure transparency to
investors and other stakeholders.
Through its sustainable strategy, AUGA group pursues the following results for these main target groups:
CONSUMERS
FARMERS
PRIVATE AND
INSTITUTIONAL
INVESTORS
SHAREHOLDERS
a more sustainable
way to eat
a more sustainable
way to work
a more sustainable
way to invest
a more sustainable
way to receive financial
returns
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4.2.2. UN Sustainable Development Goals
Based on the nature of AUGA group’s activities, the Group aims to contribute to the seven UN Sustainable Development Goals.
The list was last updated in 2019. AUGA group has integrated these UN Sustainable Development Goals:
Healthy and affordable food
Food labelling, safety, and prices
Sustainable sourcing
Genetic diversity of farmed and
domesticated animals
Labour practices in the supply chain
Occupational health and safety
Access to medicines
Access to quality essential health care
services
Air quality
Water quality
Employment
Non-discrimination
Capacity building
Availability of a skilled workforce
Elimination of forced or compulsory labour
Infrastructure investments
Access to financial services
Environmental investments
Research and development
Sustainable sourcing
Resource efficiency of products and
services
Materials recycling
Procurement practices
Product and services information and
labelling
Energy efficiency
Environmental investments
GHG emissions
Risks and reduction opportunities due to
climate change
Deforestation and forest degradation
Genetic diversity of farms and domesticated
animals
Land remediation
Landscapes forest management and fibre
sourcing
Natural ecosystems
Water ecosystems
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4.2.3. Stakeholders and Materiality Assessment of Sustainability Criteria
A close and high-quality dialogue with stakeholders is an important task of AUGA group. Relevant stakeholder groups are
identified by the management team, based on the type and scale of their activities and overall business needs. Cooperation with
these groups allows to respond to their needs and pursue a positive impact on various areas.
The Group's named stakeholders, main topics and forms of dialogue with them are presented in the table below.
Stakeholders
Topics
Forms of Dialogue
Employees
○ Performance results, technology development
progress, sustainability, and business strategy,
○ Employee welfare, compensation, and options,
○ Market news, general education in the field in which
the Group operates.
○ Intranet and notice boards,
○ Electronic means,
○ Internal events,
○ Specialised newsletters,
○ Surveys.
Consumers
○ Products, their composition, production processes,
○ Group’s activities, technological progress,
sustainability strategy,
○ Education on sustainability topics.
○ Places of sale,
○ Social networks,
○ Events and exhibitions,
○ Advertisement and media
publications.
Investors
○ Performance results, technology development
progress, sustainability, and business strategy,
○ Market trends and news.
○ Live meetings,
○ Specialised newsletters,
○ Remote conferences,
○ Events,
○ Annual and quarterly reports,
○ „Nasdaq“ platform.
Non-governmental
and governmental
organizations
○ Market trends and news,
○ Regulatory issues,
○ Sharing of experience.
○ Meetings,
○ Events.
Suppliers
○ Product and service supply questions,
○ Group’s results, operational and technological
progress, sustainability, and business strategy.
○ Meetings,
○ Electronic means.
Clients
○ Products, their composition, production processes,
○ Group’s activities, technological progress,
sustainability strategy.
○ Meetings,
○ Electronic means,
○ Visits to the Group,
○ Events and exhibitions.
Regional
communities
○ Local needs of communities, needed support,
○ Education about the Group’s activities and applied
technologies.
○ Meetings,
○ Electronic means,
○ Visits to the Group or community
events.
Media
○ Group’s results, operational and technological
progress, sustainability, and business strategy,
○ Products, their composition, production processes,
○ Market news, general education in the field in which
the Group operates.
○ Interviews,
○ Meetings, according to the need,
○ Electronic means,
○ Visits to the Group,
○ Press releases.
Every two years the Group conducts a materiality assessment of sustainability criteria among its stakeholders, AUGA group
managers and Board members. An anonymous survey is used to determine the significance of the key sustainability criteria for
all the listed groups.
In 2021, for the third time the Company has assessed the significance of sustainability criteria. Considering the current market
conditions, AUGA group revised the previously applied sustainability criteria and added several new ones. For example:
preservation of biodiversity, land, air, water pollution, involvement in social activities and others. More information on the evaluation
and individual stakeholder‘s data can be found in the 2021 Sustainability Report, which is published on the AUGA group website.
A new assessment will be carried out in 2023.
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Matrix of Sustainability Criteria Significance
The survey data shows that emissions reduction is one of the highest priorities for both AUGA group management and its
stakeholders. Other environmental aspects, which include soil health, responsible use of natural resources, renewable energy,
land, air, water pollution, are also important for all stakeholders and businesses.
In this assessment, animal welfare and the newly added biodiversity criterion are also given top priority by stakeholders. The
Group pays great attention to the topic of biodiversity, which is included in the Environmental Protection procedure, and cooperates
with local universities in order to introduce and improve good practices for biodiversity conservation. The Group is consistently
investing in the living conditions of livestock farms and this programme will continue in line with the approved Animal Welfare
Policy.
In the opinion of the interviewed public groups and managers, the most important criteria in the social field are safety, health of
employees, fair remuneration and food safety. Responding to this priority, the Group operates an Employee Safety and Health
System, employees are provided with additional health insurance. Food safety has always been and remains a daily priority both
in our own and outsourced production, the Group's organisational structure includes employees responsible for this.
Sincere payment of taxes, work ethics, application of anti-corruption principles are the main criteria in the field of management,
which were distinguished by the surveyed parties. This is supported by the management of AUGA group. In order to meet the
expectations of stakeholders, the Group will continue to adhere to the principles established in the code of business ethics and
other policies.
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GRI 2-12
suppliers
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4.2.4. Policies
AUGA group has seven policies that create conditions for fair and transparent relations with all stakeholders, ensure mechanisms
for safe work and help protect employees and Board members from various types of discrimination. The Group's policies and
business ethics code are based on good corporate practices and principles that comply with the Universal Declaration of Human
Rights, the European Convention for the Protection of Human Rights and Fundamental Freedoms, the International Covenant on
Civil and Political Rights, the United Nations Universal Declaration of Human Rights, the United Nations Resolution on Business
and Human Rights, the main conventions of the International Labour Organization, other international accords and the legal acts
of the Republic of Lithuania. All the policies are publicly available on the AUGA group website.
Policies are reviewed at the beginning of each year or more frequently, if needed. Designated managers, who oversee the relevant
areas of activity, are responsible for implementation of policies. Policy changes are approved by the Board. Employees’ and
suppliers’ knowledge regarding current policies is updated annually. The Group has an approved process for the required
submission to the Board of an annual report on the implementation of policies and recorded complaints for the past year no later
than before the Company's ordinary general meeting of shareholders of the corresponding year.
All the policies apply to the employees of AUGA group and the members of its management bodies, including the members of the
Board and audit committee. Employees, who notice situations in which valid policy guidelines are violated, can anonymously
report them to e-mail: etika@auga.lt. In 2022, no complaints were received or violations recorded regarding any policies approved
by the Group. The Group does not have uniform procedures for dealing with all complaints or negative impacts. When necessary,
it is dealt with following general internal procedures and in compliance with the requirements of the law of the Republic of Lithuania.
In 2022, all new employees (395 or 100%) were introduced to the policies. Employees of the Group's administration, managers
and specialists with e-mail access (303 or 25%) refreshed their knowledge of the policies via online system. Those who failed the
test had to re-take it. The Board members did not take these tests.
Title
Description
Annual
employee
knowledge
update
Employee
partici-
pation, %
Code of
business
ethics
The code defines the principles of fair treatment of employees and compliance with international human
rights standards as well as the importance of ensuring equality, health and safety. It specifies the rules
that govern the protection of private persons data, confidential information, business and financial
documents, proper care for work tools, the relationship with customers and competitors, and the
general communication by the AUGA group.
Yes
84.2
Environmental
protection
policy
The document specifies the guidelines and principles for ensuring the management of AUGA group's
impact on the environment in its daily activities. The environmental protection policy envisages
compliance with the requirements of environmental protection legislation and other obligations
assumed by the Group, in order to reduce the probability of incidents and their impact on the
environment, to ensure biodiversity, and to reduce greenhouse gas emissions generated during
operations.
Yes
84.5
Policy on
human rights,
non-
discrimination,
child and
forced labour
This policy is aims to ensure the fundamental principles of human rights in accordance with the valid
legal acts of the Republic of Lithuania and international standards, in order for employees to feel safe
in the working environment and to prevent and avoid any instance of discrimination or of forced or child
labour.
Yes
84.2
Animal welfare
policy
This policy provides guidelines and principles for ensuring animal welfare in the Group, setting out the
basic principles to be followed in accordance with the animal freedom guidelines recognised by the
World Organisation for Animal Health. The policy defines the responsibilities of animal handlers for the
continuous improvement of farm animal welfare.
Yes
84.5
Policy on the
prevention of
corruption and
conflict of
interest
This policy states that the Group does not tolerate corruption in any of its forms, and in case of specific
manifestations of corruption in the organisation, it immediately takes action to prevent such situations.
It is the duty and responsibility of employees to act impartially, to not provide impermissible benefits to
other business entities, and not to get involved in situations that cause or could potentially cause a
conflict of interest with the interests of the Group and/or have a negative impact on the freedom of their
own actions or decisions related to work functions.
Yes
84.2
Employee
safety and
health policy
This document identifies dangers and risks that may occur in the Group's activities. The policy also
includes measures minimising the number of accidents.
Yes
67.0
Supplier’s
code of ethics
This document, which defines relations with suppliers and their principles of activity, stipulates that it
is important for the Group that its business partners conduct their activities in accordance with the
fundamental Environmental, Social and Governance (ESG) principles and the United Nations
Sustainable Development Goals. The Group expects its suppliers to comply with environmental
regulations and animal welfare standards, as well as to care for human rights, employee health and
the prevention of any discrimination or child or forced labour.
Yes
70.0
2
2
Share of suppliers informed about the policy, calculated based on purchasing turnover in 2022.
GRI 406-1
GRI 2-15
GRI 2-16
GRI 2-23
GRI 2-24
GRI 2-25
GRI 2-26
Nasdaq S9
Nasdaq S10
Nasdaq V5
Nasdaq V6
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4.2.5. Sustainability Commitments and Data Disclosure
on International Platforms
In 2021, the Group became an official member of the United Nations (UN)
Global Compact. It thus committed to reporting annually on compliance with
the 10 main principles of the international compact and to setting even more
ambitious goals for the implementation of a sustainable food value chain.
AUGA group’s goal of reducing the greenhouse gas emissions generated
in its activities by 27% by 2025 was audited by international experts. It was
determined that the Group's goal is in line with the Science Based Targets,
for stopping global warming at 1.5°C.
The Group is keen to ensure that information on its sustainability
performance is available to its investors and other stakeholders, and that its
sustainability indicators are comparable to those of other companies. For
this reason, AUGA group provides its environmental, social and governance
information to the international environmental data disclosure platform
CDP, the Nasdaq ESG Data Portal, and the international sustainability
rating company ISS ESG.
In 2022, the Group improved its rating on CDP platform to a C.
Also, in 2022, ISS ESG gave the Group a C+ rating, placing it among the
top 10% the world's most sustainable companies in the food and beverage
sector. The Group thus maintained this rating for a third consecutive year.
4.2.6. Memberships and Partnerships
Participation in the activities of associations, sharing best practices and solving emerging problems in the field of sustainability is
important for AUGA group. Therefore, for a number of years, the Group has been a member of the following organizations: the
Lithuanian Association of Agricultural Companies (LŽŪBA), the Lithuanian Organic Farmers Association (LEŪA), the Responsible
Business Association of Lithuania (LAVA) and the Baltic Institute of Corporate Governance (BICG). Baltic Champs, which is part
of the Group, is a member of the Lithuanian Association of Mushroom Growers and Processors (LGAPA), and AUGA Luganta
belongs to the Lithuanian Vegetable Growers Association.
In order to educate young professionals on various sustainability issues and to improve its image as an attractive employer, the
Group has repeatedly partnered with various educational institutions. AUGA group cooperates with the following Lithuanian
universities: VMU Academy of Agriculture, Kaunas University of Technology (KTU), LSMU Faculty of Veterinary Medicine,
Kaunas College, Vilnius Business College, and ISM University of Management and Economics.
Associations and Organisations: Universities and Colleges:
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4.2.7. Taxonomy Overview
The Taxonomy Regulation (EU) 2020/852 with its implementing legislation establishes a classification system for sustainable
economic activities and investments. It defines activities that are considered to significantly contribute to the achievement of
environmental objectives, and thereby contribute to the implementation of the European Green Deal. Companies are required to
disclose what portion of their operations are sustainable as measured by revenue, CAPEX (investments) and OPEX (operating
expenses). This system aims to ensure transparency for stakeholders: shareholders, investors, etc.
While preparing the report for 2022, an assessment was made regarding which of the Group's economic activities are eligible for
the Taxonomy and which of these activities that fall under the Taxonomy align with the requirements for sustainable activities. In
the current version of the Taxonomy Regulation and delegated acts, agricultural and food production activities are not included or
classified. Therefore, although the Group is engaged in organic farming and applies the principles of sustainable farming, it cannot
yet state, which main activities of the Group meet the requirements of the Taxonomy. Revealing this compliance will be possible
after the European Commission prepares the relevant technical screening criteria for agriculture and food production.
Part of other economic activities relevant to the Group, which are currently subject to Taxonomy classification and may be
assessed for compliance with the Taxonomy's sustainability criteria, include:
○ Construction of new buildings,
○ Renovation of existing buildings,
○ Electricity generation using solar power,
○ Transport by motorbikes, passenger cars and light commercial vehicles,
○ Road freight transport,
○ Research and development activities.
None of the activities listed above are commercial activities of the Group that generate sales. Therefore, in terms of revenue, the
application and compliance with the Taxonomy criteria is equal to 0%. The same is to be said with regard to OPEX.
CAPEX for these activities in 2022 amounted to EUR 8.774 million, i.e., 94.9% of total CAPEX. The activities were also assessed
for compliance with the sustainability criteria of the Taxonomy Regulation according to the following rules:
○ whether the activity significantly contributes to one of the six envisaged environmental objectives
○ whether it does no significant harm to other environmental objectives,
○ whether the activity complies with social protection minimums.
The criteria are met by the Group's research and development activities, whose CAPEX in 2022 amounted to EUR 4.077 million
and accounted for 44.1% of the total CAPEX. The aim of these activities is to create applicable technological solutions that will
significantly contribute to one of the most important environmental goals - climate change mitigation in agriculture. These activities
cause no significant harm to the other five environmental objectives, and they meet the standards of social protection. They are
therefore assessed as meeting the Taxonomy's sustainability criteria.
The compliance of the Group's revenue, OPEX and CAPEX with the Taxonomy's application and compliance criteria is
presented in the following graphs:
OPEX
Turnover
EUR 13.1
million
CAPEX
EUR 9.2
million
□ Non-elligible
□ Elligible
Alligned
100%
EUR 80.1 million
5.1%
94.9%
44.1%
100%
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4.3.1. Our Activities and Achievements during 2022
3
3
Compared to 2021.
energy consumed
5.3%
Specialised
tests, measuring the impact on methane
emissions
emissions from operations
(life-cycle assessment) was performed for
the first time in cooperation with KTU
5.2%
emission intensity per t of milk
57.3%
emission intensity per t of crop production
20.9%
waste generated
26.2%
water used
18.5%
EUR invested in R&D
3.6%
Testing of
tractor and the first batch produced
Share of cultivated leguminous grass crops
Continued
infrastructure development
11.8%
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4.3.2. Organic Farming and Sustainability Practices
AUGA group has started to systematically reduce the environmental impact of its core activities since 2015, when it made a
strategic decision to turn from conventional agriculture to organic farming and began transforming all of its farms established in
various regions of Lithuania. AUGA group thus introduced production methods that allow to reduce the agricultural footprint on
the environment, protects the fields and final products from pesticides and other chemicals, meanwhile gives consumers an
opportunity to eat more environmentally friendly and healthier food. The transformation process was completed in 2017. Since
then, AUGA group operates entirely on organically certified land, and the newly added areas which are not organically certified,
are also being converted to organic farming.
The main differences between organic and conventional farming are the following:
○ In organic farming, no pesticides or other chemicals are used, only natural fertilisers are allowed.
○ Proper soil preparation and conservation of biodiversity are essential, soil must be improved through crop rotation.
Natural fertilisation and crop rotation ensure soil fertility and erosion resistance.
It is important to note that today AUGA group, by developing organic farming, does more than is currently required by EU organic
regulations:
○ Min-till technologies. While using such technologies, only the surface layer of the soil is being cultivated. This
protects the soil from erosion, allows to preserve the fertile soil layer, the microorganisms contained in it and to reduce
the consumption of fossil fuels.
○ Green energy. Farms and all AUGA group companies use only certified green electricity. Part of the energy from
renewable sources is produced internally by the Group.
○ Regenerative crop-rotation. According to the crop rotation plan, at least 4 different crops are grown in 7 years. This
improves the soil and is good for biodiversity. Annually increasing areas of perennial grasses and leguminous crops
makes it possible to reduce the need for organic fertilisers and emissions in crop production.
○ More sustainable animal husbandry. In order to ensure the well-being of animals, they have the opportunity to go
outside in AUGA group farms all year round, and graze in the pastures during summer. Cow feed is based on perennial
leguminous grasses, which is a more sustainable, less emission-generating feed, compared to commonly used grains,
corn silage or soybeans.
○ A closed-loop organic farming method. Synergy between different branches of agriculture and secondary utilisation
of organic waste is ensured. Raw materials (fodder crops) grown in the crop segment are used as an animal feed,
and straw is used to produce mushroom compost. In the dairy segment, the organic waste (manure) generated from
its activities is used as fertiliser in crop production and in the mushroom growing segment to produce compost. From
2023 the manure will be used for biomethane production.
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4.3.3. Biodiversity
Biodiversity is one of the key environmental objectives of AUGA group's Environmental Policy. Through its agricultural activities,
the Group can have a direct impact on the environment, living organisms, and ecosystems, and plays a vital role in their
conservation. AUGA group aims to protect and improve biodiversity in the following ways:
○ In its activities and organic production fields, it does not use chemical pesticides or other chemical plant protection
products. The Group seeks to engage exclusively in organic farming and to convert all newly added land to organic
production.
○ In its activities it uses only the organic fertilisers and gradually reduces the need for them through crop rotation and
the increasing of areas with leguminous grasses, which are capable of nitrogen fixation and carbo capture.
○ Applies a regenerative crop rotation plan with at least four different crops cultivated over seven years.
○ Where organic fertilisers are used, the Group works to minimise the leaching of fertilisers into water bodies. It does
so by applying fertiliser only at specified times, maintaining buffer zones for water bodies and applying all organic
fertilisers used to the soil at once.
○ It leaves the established buffer zones for drainage ditches and water bodies and carries out their extensive
maintenance.
○ It aims to maximise the use of min-till farming technology.
○ It seeks to allocate at least 30-50% of the area in crop rotation to flowering plants (legumes and grasses) that are
beneficial to pollinators and cooperates with beekeepers by establishing mobile apiaries near flowering fields.
○ In the winter season, the Group leaves at least 50% of the farmland under agricultural crops, catch crops or plant
residues, which are beneficial to soil and terrestrial fauna.
○ To prevent eutrophication* and deterioration of natural aquatic ecosystems, mixtures of at least three different types
of plants are selected for catch crops, based on radish or brown mustard, which retain the most excess of nitrogen.
○ Part of grain crops are grown with silage (fodder grasses) in order to enrich the soil with biological nitrogen and organic
matter, which, while slowly decomposing, provides food for the biodiversity of soil and increases the amount of
sequestered carbon.
○ In the fields that fall into the protected areas, perennial meadows or pastures are left, the number of grazing animals
is limited and the existing hydrological regime is maintained.
○ The roots of individual trees growing in the fields are protected at the canopy** perimeter. Such trees perform an
important stepping-stone function between larger suitable habitats. Insects and fungal spores that have settled in such
a place can later spread further to another area.
○ The Group fights climate change that is harmful for biodiversity by developing and implementing GHG emission
reduction technologies in agriculture.
○ The Group is committed to engaging in research, conservation and education activities, and collaborating on
biodiversity issues with universities, governmental and non-governmental organisations, and other stakeholders.
* Eutrophication is an increase in the biological productivity of a water body due to an increased supply of nutrients (nitrogen and phosphorus)
compounds.
** The tree protection zone is the territory that involves the projection of the canopy on the ground, where the roots and the canopy of the tree are
protected.
To ensure the protection of biological diversity on the lands managed by the Group, accounting is planned to identify territories of
high natural value for farming and the species present in them. It is a complex and time-consuming task, as there are 664 protected
areas of European importance in Lithuania alone. Different plant and animal species and habitats are protected in them. In
addition, important changes in legislation related to agriculture and biodiversity are expected this year, implementation of which
will already be reflected in next year's land declaration. By identifying what we need to protect, we will be able to expand the
measures currently in place and adapt farming practices in ways that do not endanger habitats or species ranges, thus helping to
preserve the diversity of ecosystems even more. Data collection has started and will be completed in 2023.
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4.3.4. Greenhouse Gases
CO
2
e Reduction Goals by 2025 from 2019 Bases:
27%
50%
50%
30%
less total Group emissions
(base 72,821 t CO2e)
less emissions from diesel
fuel used for farm work
(base 16,646 t CO2e)
less emissions per ton of
milk produced
(base 0.68 t CO2e)
less emissions per ton of dry
matter of crop production
(base 0.37 t CO2e)
Direct and Indirect Emissions
The calculation of greenhouse gas (GHG) emissions generated in the Group is based on the generally accepted international
methodology. Operational emissions are classified into three groups: direct (Scope 1), indirect (Scope 2), other sources (Scope
3). The symbol CO
2
e notes CO
2
and the emissions of other greenhouse gases converted to its equivalent using the standard
coefficients.
Emissions, t CO
2
e*
2022
2021
2020
Scope 1
62,495
61,727
66,144
Scope 2
8
9
6
Scope 3
4,961
2,414
1,983
Total:
67,463
64,150
68,133
*Calculated using the "market-based method", evaluating based on actual electricity purchases. When calculated using the "location-based
method", i.e. according to the country-specific nature of energy production, the Group's total GHG emissions in 2022 would be 70,722 t CO
2
e.
During the reporting period, greenhouse gas emissions from the Group's activities increased by 3,313 t CO
2
e or by 5.2%
compared to the previous year, however, in 2022 emissions decreased by 5,358 t CO
2
e or by 7.4%, compared to the base year
2019. Comparing year 2022 with 2019, Scope 1 decreased by 8,519 t CO
2
e, Scope 2 constitutes a small part of the emissions
and changed only slightly, and Scope 3 increased by 3,160 t CO
2
e due to extended accounting.
A larger footprint was recorded for AUGA group’s activity in 2022 due to higher yields in the crop production segment (resulting
in higher emissions from crop residues left in the fields) and an increased number of livestock (higher emissions from internal
fermentation processes and manure management). In addition, the larger volume of products sold led to higher emissions from
packaging. The amount of electricity and water used in operations decreased, along with the emissions by 11% and 18%
respectively. Gas emissions from the use of refrigeration equipment decreased by remarkable 62%, as fewer leaks and system
refills were recorded.
AUGA group’s biggest sources of GHG emissions were cattle digestion processes, the use of fossil fuels in farm activities and
soil emissions, resulting from organic fertilisers and crop residues. This situation has been similar for several years in a row.
Distribution of emissions by
sources, %
2022
2021
2020
Emissions from soil
33.5
32.3
36.4
Fossil fuel consumption
29.1
31.2
31.2
Digestive processes from cattle
25.1
26.5
23.2
Packaging
7.2
3.6
2.6
Manure handling
4.5
4.8
3.8
Freon consumption
0.2
1.4
2.4
Other
0.4
0.2
0.4
Total:
100.0
100.0
100.0
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It is important to note that the emission reduction goals set out in the Group's strategy are not yet being gradually implemented
every year. A significant change for the largest sources of emissions should occur over the next two years with the development
of new technologies and their use in the Group's activities during the next two years.
Crop rotation related to future fodder production continues to be developed, consistently increasing the area of leguminous grass
crops (to 8,811 ha in 2022, which is 12% more than in 2021), thereby reducing the need for fertilisers and emissions. The Group
purchases and uses green electricity in its operations. This decision, at the level of the entire Group, allowed to save as much as
3,017 t of CO
2
e
in 2022.
The calculation of Group‘s emissions include not only CO
2
, but also CH
4,
N
2
O and HFCs gases converted into CO
2
equivalent
using the standard coefficients and marking the final total number as CO
2
e. PFCs, SF
6
, and NF
3
gases are not emitted in the
Group's activities.
AUGA group calculates emissions of nitrogen suboxide (N
2
O) and methane (CH
4
) separately, converted into kilograms, as
recommended by international standards (GRI). N
2
O, like oxygen and carbon, is necessary for crop production. Although nitrogen
gas makes up 75% of the earth's atmosphere, it is difficult to absorb it directly from the air, therefore fertilisers (liquid or solid
manure), that are saturated with this element, are used in agriculture. Due to fertilising, manure management and the
decomposition of crop residues in the fields during AUGA group’s activities in 2022, 90,282 kg of N
2
O was released. Methane
(CH
4
) is generated through the animal husbandry activities from the digestive processes of cattle and management of manure. In
2022, 665,368 kg of CH
4
emissions were recorded.
The direct emissions calculated in Scope 1 also include biogenic emissions from existing biomass (manure and crop residues in
fields). This includes direct emissions of N
2
O from soil, indirect volatilisation of N
2
O from soil, and leaching of N
2
O from soil. The
total number of these biogenic emissions in 2022, converted into CO
2
equivalents, totalled 22,599 t CO
2
e. Biogenic emissions
from burning biofuels for heating (e.g., firewood) are not specific and thus are not included.
Indicators of Emission Intensity
The indicators of GHG emissions intensity are calculated by dividing up the annual emissions by the various units of economic
activity. They show the amount of CO
2
emitted in the operations of the Group through the financial, production, arable land and
other units. When calculating emissions per euro of revenue and per 1 employee, all Group emissions in Scopes 1, 2 and 3 are
included. When calculating emissions per cattle and per tonne of milk, per hectare and tonne of crop production, and per tonne
of mushroom production, only Scope 1 and 2 emissions are included, assigned to the relevant activity segment - animal
husbandry, crop production or mushroom cultivation.
Emissions, t CO
2
e
2022
2021
2020
t CO
2
e / 1 million EUR of revenue
842.36
893.70
818.07
t CO
2
e / 1 employee
55.03
52.03
53.61
t CO
2
e / 1 cow
3.13
3.20
3.05
t CO
2
e
/ t ECM milk*
0.76
0.73
0.67
t CO
2
e
/ ha
0.89
0.85
0.91
t CO
2
e
/ t crop production
0.37
0.46
0.31
t CO
2
e / t mushroom production
0.24
0.30
0.30
*Energy corrected milk (ECM) is a relative unit of measurement of milk. It converts an amount of raw milk to the equivalent quantity of “corrected”
milk with 4.0% fat and 3.3% protein.
The biggest change is seen in the relative ratio of emissions to income. Although in 2022 both emissions and income grew, their
ratio decreased by 5.6%, compared to 2021. Another indicator, emissions per crop production unit, also shows a significant
change. The number is down due to a higher yield grown during the season, which, while growing, used lower quantities of organic
fertilisers and fossil fuels, compared to previous years.
Emissions per cattle decreased due to a larger number of cattle raised and decreases in both the use of fossil fuel and gas for
refrigeration. The figure for emissions per 1 tonne of milk produced was influenced by the increased number of cattle, out of which
46% of new cattle were heifers and bulls that do not produce milk but contribute to the generation of emissions.
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In the table, which indicates the intensity of GHG emissions, the most
important lines are highlighted. They reflect AUGA group's strategy for
emission reduction by 2025. The achievement of these goals is planned to
be achieved after the implementation of the main technology projects:
specialised fodder technology, related crop rotation, and switching from the
use of fossil fuels on farms to biomethane.
Methodology
The emission calculations and results obtained in this report are presented
based on the GHG protocol, the methodology of the Intergovernmental Panel
on Climate Change and an audit performed by the consulting company
"Carbon Footprint".
Emission factors from the following sources were used for the calculation:
Lithuania 2022 National Inventory Report, Association of Issuing Bodies
(AIB) 2021, UK Government Conversion Factors for greenhouse gas (GHG)
reporting, 2022.
Direct emissions (Scope 1) include all sources controlled by the Group while
undertaking its activities. Indirect emissions (Scope 2) are generated from the
energy that the Group buys from other suppliers (it does not produce it itself).
Other sources (Scope 3) include indirect emissions that were not included in
the calculations of the first two groups but are directly related to the Group's
activities.
AUGA group defines the systematic limits of life cycle assessment from
cradle-to-gate, i.e., it calculates operational GHG emissions from resource
extraction to realisation (sale) of the company's production. Based on to data
availability, its completeness, and its importance for the activity, AUGA group
chose to include the following data in the calculation of emissions from other
sources (Scope 3): water, electricity and heating transmission losses, paper
for office use, packaging, waste and business trips.
For several years the emissions of the Group's activities have been audited
by the independent company “Carbon Footprint”, one of the leading CO
2
footprint auditors. With the independent audit, the Group seeks to declare to
its stakeholders that the information it publishes is reliable and transparent.
Life Cycle Assessment of Products
In 2022, commissioned by the Group, Kaunas University of Technology (KTU) researchers conducted a life cycle assessment
(LCA) of the carbon footprint (CO
2
e) of AUGA-brand packaged food products for final consumption, covering all processes from
the cultivation of raw materials to transportation, production of the final product and packing. The research was carried out in
accordance with the product life cycle assessment, carbon footprint evaluation standards and other documents.
The aim of the project was to understand all the main processes in the life cycle of the products and to determine the greenhouse
gas (GHG) emissions generated by each of them. Data for 2021 was used for the research. This research is important as a starting
point for assessing future emission reductions when applying agricultural technologies developed by the AUGA group that address
the largest sources of emissions.
Several products representing different categories and produced from the Group's own organic raw materials grown on its farms
were selected for evaluation: 2.5% and 3.5% fat milk in 1 l packages, carrots and potatoes in 1 kg packages, and universal wheat
flour in 2 kg packages. The data below regarding flour is calculated per 1 kg.
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0.13
0.01
0.01
*Secondary products (bran and feed flour) generated during the flour production process have negative emissions from the point of view of life
cycle assessment.
The study found that largest amounts of the emissions for the product groups examined occur in the production of raw materials
on farms – crops and livestock. Cattle internal fermentation, manure management, diesel used on the farm and organic fertilisers
generate most of the emissions. Processing and packaging account for a relatively smaller share of emissions.
Among the products studied, the results show that milk generates the most emissions - 1.54 kg CO
2
e per 1 litre of product. This
is due to high emissions from the internal fermentation processes of cattle and manure management (38% of emissions).
Wheat flour (with 0.34 kg CO
2
e per 1 kg of product) stands out with high emissions from the use of organic fertilisers (86% of
emissions). Total emissions of this product are reduced by the fact that some secondary products formed in the production
process, namely bran and feed flour, have negative emissions from the point of view of life cycle assessment.
Vegetables, in particular carrots, have the lowest impact on the environment (0.15 kg CO
2
e per 1 kg of product). The largest part
of pollution comes from the use of diesel fuel during cultivation (87% of emissions). Mushroom compost used as fertiliser has
negative emissions from the point of view of life cycle assessment, as it is a product of secondary use.
To evaluate the base emissions of AUGA products, with the help of KTU researchers, we compared them to the average products
in the corresponding categories on the European market. The calculations showed that 1 litre of AUGA organic milk generates
about 14% less emissions compared to the average product on the market with the same fat content. AUGA organic wheat flour
emissions are just half the market average. AUGA organic potatoes generate 46% less emissions per kilogram than same amount
of conventional potatoes. Meanwhile, the difference in emissions for AUGA organic carrots is smaller, at 8% less than the market
average.
While the assessment based on 2021 data found that AUGA products already involved less emissions than corresponding average
products on the market, those results were not yet affected by new technologies the Group is developing, such as agricultural
machinery that does not use diesel, and specialised emission-reducing feed technology. The implementation of these projects
should reduce the impact of AUGA products on the environment even further, to help reach the goal of "no cost to nature".
0.59
0.42
0.24
0.15
0.10
3.5% fat AUGA milk 1 l
1.54 kg CO
2
e
AUGA carrots 1 kg
0.15 kg CO
2
e
AUGA wheat flour 1 kg
Product emission composition, kg CO
2
e
AUGA wheat flour 1 kg
GRI 305-4
AUGA wheat flour 1 kg
□ Livestock and manure handling emissions
□ Use of diesel fuel
□ Organic fertilisers
□ Packaging
□ Other
Production
0.29
0.12
-0.14
0.01
0.05
0.34 kg CO
2
e
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4.3.5. Energy
Direct and Indirect Energy Consumption
Value
Energy, GJ
Energy distribution, %
Type of energy
2022
2021
2020
2022
2021
2020
2022
2021
2020
Natural gas
4,579 MWh
5,912 MWh
4,365 MWh
16,436
21,284
15,713
4.7
5.8
4.3
Liquefied natural
gas
386,154 l
437,021 l
736,442 l
9,549
10,926
18,411
2.8
3.0
5.0
Petrol
66,718 l
52,898 l
63,157 l
2,298
1,822
2,175
0.7
0.5
0.6
Diesel
6,854,836 l
7,085,071 l
7,330,265 l
261,657
270,445
279,804
75.5
73.8
76.4
Diesel for drying of
production
179,524 l
148,818 l
139,514 l
6,841
5,671
5,316
2.0
1.5
1.5
Total direct energy:
296,935
310,148
321,422
Electricity energy
13,807
MWh
15,555
MWh
15,600
MWh
49,703
55,997
56,159
14.3
15.3
15.3
Heating
46
MWh
53
MWh
37
MWh
164
190
134
0.05
0.1
0.04
Total indirect energy:
49,867
56,293
55,470
Total:
346,803
366,335
377,715
100
100
100
Energy consumption data is from AUGA group’s internal accounting system.
During the reporting period, AUGA group consumed 19,533 gigajoules (GJ) of energy, or 5% less than in 2021. Lower total energy
consumption in 2022 mainly resulted from the decreased use of natural and liquefied gas (23% and 12% less, respectively), with
electricity consumption also down by 11%. AUGA group does not sell any type of energy.
The use
of diesel fuel for transport can be seen to be decreasing noticeably every year. While 7,360 thousand litres were used in 2019,
only 6,855 thousand litres were used in 2022. Changes in cultivated crops were the main factor in this – especially the increased
area for grasses and seed clover, which require significantly less maintenance than grain or vegetable crops. Additionally,
equipment is being made more efficient. In recent years, lighter seed drills have been used, which consume less fuel and sow
larger areas in each outing.
AUGA group owns many companies engaged in various areas. Due to their different nature, the Group has no centralised rules
on reducing energy consumption. Each company independently implements energy saving initiatives according to the nature of
its activity.
Energy consumed outside the Group's operations and in the supply chain (upstream, downstream) is not calculated due to lack
of data.
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Intensity of Energy Consumption
Energy consumption intensity indicators are calculated by dividing annual energy consumption by the units of economic activity.
They show how much energy is used to carry out a particular activity. AUGA group calculates energy intensity for financial,
production, arable land and other units.
Energy intensity calculations include direct and indirect energy types. Calculations per head of cattle, per tonne of milk, per hectare
or per tonne of mushroom production use the energy consumption allocated to the relevant activity segment - animal husbandry,
crop growing or mushroom cultivation.
Energy, GJ
2022
2021
2020
GJ / 1 million EUR revenue
4330.27
5,015.02
4,535.16
GJ / 1 employee
282.87
291.81
297.18
GJ / 1 cattle
3.54
3.46
3.66
GJ / t ECM milk*
0.86
0.80
0.80
GJ / ha
4.93
4.98
4.50
GJ / t crop production
2.02
2.74
1.53
GJ / t mushroom production
6.23
7.04
6.05
*Energy corrected milk (ECM) – a relative unit of measurement of milk. It converts an amount of raw milk production to the equivalent quantity of
“corrected” milk with 4.0% fat and 3.3% protein.
Energy consumption per unit of crop and mushroom production decreased in 2022 due to higher crop yield and lower use of
natural gas and electricity use in the mushroom sector. The rate per hectare decreased due to lower use of fossil fuels for crop
production.
There is a visible increase in the reporting period for livestock-related indicators, in terms of energy use per unit of milk and cattle.
The change was caused by the increased consumption of fuel and electricity attributed to animal husbandry activities, as well as
the increased number of cattle, with 46% of the increase involving heifers and bulls, which do not produce milk but do generate
emissions.
4.3.6. Water
AUGA group's operations in the agricultural sector require the consumption of a significant volume water for growing crops and
mushrooms, watering animals and preparing products for final consumption. The water for ensuring production processes is taken
from wells located at agricultural companies or centralised municipality water supplies. Consumption is monitored using water
metres. It is important to note that the Group monitors the environmental impact of water consumption through CO
2
e emissions.
2022
2021
2020
Water, m
3
300,782
368,867
338,913
During the reporting period, AUGA group consumed less water compared to previous year by 68,085 m
3
or by 18.5%. Such
change was mainly due to the sufficient amount of precipitation in 2022 when, unlike in previous years, there was little need to
additionally irrigate crops.
Secondary water utilisation practices are used in the mushroom cultivation segment, where growing mushrooms, the water
required for compost production is used several times. Excess unabsorbed water is collected and reused until almost all water
leaves together with the mushroom compost produced.
Water is also saved in the production of final products. Thus, for example, the same water is circulated for several cycles during
the treatment of mushrooms at high temperatures in an autoclave.
AUGA group does not have an approved water reduction or reclaiming policy across the companies of the Group. Each company
belonging to AUGA group independently implements water saving and reuse initiatives according to the nature of its activities.
Water is not used from areas that face water shortages.
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4.3.7. Waste
AUGA group understands that in order to be sustainable, it needs not only to create innovations to eliminate the environmental
impact of agriculture, but also to take care of waste generated in its operations.
AUGA group strives to manage as much of the waste it generates as possible following the principle ‘reduce, reuse, recycle’. To
ensure enhanced control of waste management and make the process clearer, in 2021 AUGA group developed waste generation,
storage and disposal procedures, which have since been implemented in all Company’s farming operations. The procedures are
internal rules of the company which are not approved at the Board level as the Group's waste management policy.
Based on those procedures, the Group's companies that engage in farming comply with regulations for waste storage and
management in Lithuania: generated waste is sorted and accounted for with the national GPAIS system, ensuring it is transferred
only to companies (waste handlers) with permits to manage it. To ensure circularity, the Group's agricultural companies use the
organic waste they generate in their farming activities, and what cannot be used is passed on to the waste managers who use it
to produce energy.
Distribution of waste by type:
Waste category, t
2022
2021
2020
Plastic
399.1
472.0
428.2
Municipality waste
325.9
349.0
338.7
Metal
121.6
280.4
406.7
Paper
78.6
74.8
49.9
Tires*
27.2
78.5
68.5
Asbestos*
23.4
42.7
12.1
Wood
10.3
39.2
113.0
Oil*
9.0
15.2
8.9
Batteries*
2.9
1.2
1.2
Electronics
1.2
0.9
0.7
Organic waste
0.0
0.3
0.9
Total:
999.2
1,354.2
1,429.3
*Household formed hazardous waste, according to the Law on Waste Management of the Republic of Lithuania.
In 2022, the Group's activities generated less waste than the previous year by 355 tonnes or by 26%. The change mainly reflects
a decrease in organic waste due to increased composting on farms. A reduction of plastic waste is also visible as more sustainable
practices spread among the Group's companies: paper packaging is chosen more often and products are purchased in larger
quantities instead of small packages.
Waste sorting and recycling has always been an important task to the Group. Thus, AUGA group constantly educates its
employees about proper waste sorting in various ways, for example with information on the intranet, on notice boards, and near
the recycling bins.
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4.3.8. Environmental Management
Environmental protection is a top priority for AUGA group, which for that reason abides by an Environmental Protection Policy and
Environmental Management System.
The Group's Environmental Policy, which was approved in 2019 and updated in 2021, sets out guidelines and principles to ensure
the management of AUGA group’s environmental impact throughout its business cycle. It stipulates that the Group shall:
○ Operate in compliance with all mandatory requirements of environmental legislation.
○ Cooperate with business partners, public authorities and institutions on environmental issues.
○ Monitor its environmental impacts, in particular by calculating the organisation's carbon footprint, use of natural and energy
resources, and waste generation.
○ Conserve natural and energy resources: develop a closed-loop organic farming method, apply min-till farming
technologies, and use renewable energy sources.
○ Create and implement technologies to reduce the Group‘s GHG emissions in three key areas: the use of fossil fuel, soil
cultivation and cattle digestion processes.
○ Manage as much waste generated at the Company as possible in line with the reduce, reuse and recycle principle.
○ Develop employees’ competences and sense of responsibility for environmental protection.
The Group's environmental management system has been in force since 2020. It stipulates that environmental control and
improvement procedures within the Group, such as annual audits, discussions of the results by management of the Group, and
identification of risks and corrective actions. It is a framework for managing the Group's environmental impact and risks in all key
business processes.
Inspections carried out on farms in 2022 closely examined compliance with the law on waste management (storage, sorting,
marking, accounting).
In its environmental activities, AUGA group adheres to the ‘precautionary principle’.
4.3.9. Climate Change Oversight
In 2020, AUGA group formulated its innovation agenda laying down clear emission reduction targets and measures to achieve
them. The Group has set to reduce its emissions by 27% by 2025 and become a climate-neutral market player by 2030.
For the Group to achieve these climate targets, it is essential to periodically review ongoing projects, monitor the process and
track the results. AUGA group holds quarterly management reviews of the major projects, including biogas infrastructure and
biogas-powered vehicles, the development of specialised feed, and the use of regenerative crop rotation. These meetings discuss
the projects progress, challenges and achievements, planned investments and budgets. Such regular reviews allow the Group to
quickly address challenges and take decisions that facilitate the achievement of the key strategic objectives.
AUGA group also organises semi-annual reviews of these projects at the Board meetings. The progress of the innovation agenda,
current challenges and results are introduced to the highest governing body of the AUGA group. Involving the Board in the
development of these projects allows improving the management of environmental risks and making the right decisions to achieve
the desired results. These reviews of innovation projects have been held together with the Board since 2020, and this tested
practice will be continued to be followed.
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4.3.10. Research and Development
The main goal of AUGA group's Research and Development (R&D) Department is to develop and implement innovative
agricultural technologies that purify operational efficiency and enable activities with a lower negative climate impact.
In 2022 the Group allocated EUR 4.077 million for the implementation of technological projects.This sum increased by 57%
compared to EUR 2.592 million in the previous year.
Biogas Purification and Application Technologies
The long-term goal of AUGA group is to achieve climate-neutral food growing processes through technology. One of the key areas
of AUGA group's innovation agenda is to ensure that fossil fuels in farm vehicles will be replaced with biomethane, which is
produced from agricultural waste generated in other segments of the Group. For this reason, AUGA group is investing in
technologies that purifies biogas into biomethane.
In 2021, AUGA group, together with experienced partners (scientific and business institutions), implemented an R&D project,
aimed to improve the efficiency indicators of biogas cleaning technology. The R&D project was part-financed by the European
Regional Development Fund under the Operational Programme for EU Structural Funds Investments for 2014-2020, priority axis
1 'Strengthening Research and Development and Innovation', Implementing Measure No. J05-LVPA-K 'Intelligence'. The total
value of the project is EUR 0.86 million.
The logical follow-up of the development of sustainable gas technologies is the creation of a real-scale prototype laboratory. The
Biopower Plants Development Cluster, in which AUGA group participates, has decided to initiate the project "Research Laboratory
for the Application of Biomethane Concentration Enhancement Methods in Large-Scale Anaerobic Digesters“. During the
implementation of the project in 2022, complex laboratory equipment was purchased for R&D activities. While using the laboratory
equipment acquired during the project, competitive technological solutions are planned to be created and offered on a global scale.
The project is financed by European Union Structural Funds. The value of the project amounts to EUR 1.88 million (incl. VAT), out
of which EUR 1.22 million is financed from EU funded programme Inoklaster LT.
The results of the tests and the obtained products will be applied in the technological bases installed on the farms.
Biomethane Powered Agriculture Machinery
In September 2021, AUGA group developed and launched the world's first zero-emission, biomethane-electric powered hybrid
tractor, AUGA M1, indented for professional use. AUGA M1 hybrid tractor is unique as it overcomes two major obstacles: refuelling
and long working time, which have so far prevented major corporations around the world from offering such machines for
professional use.
The patented design developed by AUGA group allows equipping the tractor with larger biomethane gas cylinders. AUGA M1
tractor uses a hybrid biomethane-electric fuel system. When the tractor is running, an internal combustion engine powered by
biomethane generates energy and transmits it directly to the electric motors, which turn the wheels. Under normal operating
conditions that do not require much power, the tractor stores the generated energy in the batteries. Such system wastes no energy
under low loads, uses a relatively small but efficient engine and is capable of generating high power when needed. These solutions
enable the tractor to operate for up to 12-hours. AUGA group has solved the refuelling problem by offering quick and convenient
gas cartridge replacement. In 2022, the prototype of the tractor was actively tested in real conditions and its serial production is
being prepared at the Rokiškio mašinų gamykla.
After the end of the reporting period, beginning of 2023, the Group presented the AUGA M1 tractor from the first production batch.
Three tractors will start working on farms in the spring of the same year.
Specialised Feed Technology for Cattle
The Group is developing a specialised feed technology aimed at reducing methane emissions from cattle digestion processes.
Since dairy farming is a significant part of the Group's closed-loop business model, and methane (CH
4
) contributes to the
greenhouse gas effect 28 times more than CO
2
, the Group finds it important to take this problem into account. The concept of
specialised feed technology includes innovative processes and technologies used for feed production and processing by
monitoring and assessing the effect of such feed on livestock. In the reporting year, the Group continued testing the feed
production technology. The use of new forages is expected to significantly reduce methane emissions per milk produced by cattle.
The technological progress of the projects is at different stages of development, depending on their importance in the Group's
innovation agenda, the validity of the applied technological assumptions and the market situation.
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4.4.1. Our Activities and Achievements
Employee Net Promoter Score
(eNPS)
of employees are provided with full health
insurance
Accidents:
Per working hours:
Employees taking part in share option programme:
New participants:
certification renewed for Baltic Champs and AUGA
Luganta
Donated
to support Ukraine
AUGA group
created as a tool for internal communication
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4.4.2. Employees and Diversity
The following tables show data for the AUGA group as of the end of the reporting period (2022). All AUGA group activities are
carried out in one region, Lithuania, therefore the data are not broken down by country or geographical regions.
Employees and diversity
2022
2021
2020
Category
Measurement
Total
Women
Men
Total
Women
Men
Total
Women
Men
Total
Number
1,226
523
703
1,233
514
719
1,271
542
729
Distribution, %
42.7
57.3
41.7
58.3
42.6
57.4
By age
Under 30 years old
Number
165
75
90
169
60
109
190
78
112
Share, %
13.5
6.1
7.3
13.7
4.9
8.8
14.9
6.1
8.8
30-50 years old
Number
564
243
321
580
256
324
606
274
332
Share, %
46.0
19.8
26.2
47.0
20.8
26.3
47.7
21.6
26.1
Over 50 years old
Number
497
205
292
484
198
286
475
190
285
Share, %
40.5
16.7
23.8
39.3
16.1
23.2
37.4
14.9
22.4
By position
Workers and
specialists
Number
1,166
509
657
1,171
502
669
1,208
529
679
Distribution, %
43.7
56.3
42.9
57.1
43.8
56.2
Management
Number
60
14
46
62
12
50
63
13
50
Distribution, %
23.3
76.7
19.4
80.6
20.6
79.0
By employment
contracts
Permanent
employees
Number
1,226
523
703
1,233
514
719
1,271
542
729
Temporary
employees
Number
0
0
0
0
0
0
0
0
0
Full-time
employees
Number
1,208
513
695
1,205
503
702
1,250
538
712
Part-time
employees
Number
18
10
8
28
11
17
21
4
17
Working under
service contracts
Number
2
1
1
2
1
1
3
2
1
According to AUGA group data, on 31 December 2022 the total number of employees was similar to the previous year, showing
a decrease of just 7 people or 0.6%, compared to the end of 2021. The total number of employees includes persons on childcare
leave (in 2022, there were 40 such persons).
As in the past, the majority of employees in 2022 were men, which is typical in the agricultural sector. Compared to previous
years, the overall percentage of women has increased slightly. While men are still a majority of employees among managers,
there proportion of women managers has increased. The Group does not discriminate employees based on gender in any way
and provides everyone with equal work and career opportunities. The table does not include the gender distribution of the Board:
4 out of 5 members of the Board are men, i.e. 80%.
In 2022, as in previous years, the largest employee group remains 30-50 years olds. There is a slight growth in the “Over 50”
category. The table does not include members of the Independent Board. Their age is divided as follows: 30-50 years age group
- 3 members or 60%, over 50 years - 2 members or 40%.
As of the last day of 2022, the Group had no employees working under fixed-term employment contracts. AUGA group employees,
who work under service contracts, are not included in the total number of employees.
The number of part-time employees further decreased in 2022 and at the year-end it accounted for only 1.5% of all employees.
Those working under service contracts made up only 0.2% of the total.
It is important to note that the Group operates in the agricultural sector, where activities are seasonal. Therefore, AUGA group
each year hires seasonal workers to perform weeding, picking, drying, measuring, and similar work. The Group pay such workers
for their services according to payment receipts. After the end of the season, they are not included in the final number of
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employees. During the 2022 season, the Group additionally hired 254 seasonal workers to provide the agricultural services
mentioned, while in 2021 it hired 417 seasonal workers. This difference was due to the smaller areas of sugar beet grown in 2022,
and therefore fewer workers needed. The Group sees a positive trend in the return of seasonal workers, which ensures more
efficient work.
4.4.3. Employee Turnover and New Employees
The table shows the numbers of employees who left the Group (employee turnover) and joined as new employees during the
reporting year, broken down by various groups, and the percentage expression of these numbers in each of the groups.
Employee turnover
2022
2021
2020
Number
%
Number
%
Number
%
Total:
402
32.8
368
29.8
316
24.9
By gender
Women
177
33.8
152
29.6
114
21.0
Men
225
32.0
216
30.0
202
27.7
By age
Under 30 years old
121
73.3
131
77.5
98
51.6
30-50 years old
172
30.5
153
26.4
126
20.8
Over 50 years old
109
21.9
84
17.4
92
19.4
By employment contracts
Full-time employees
399
33.0
366
30.0
316
24.9
Part-time employees
3
16.7
2
7.0
0
0.0
Working under service contracts
0
0.0
0
0.0
0
0.0
New employees
Number
%
Number
%
Number
%
Total:
395
32.2
331
26.8
359
28.2
By gender
Women
186
35.6
122
23.7
129
23.8
Men
209
29.7
209
29.1
230
31.6
By employment contracts
Under 30 years old
145
87.9
133
78.7
151
79.5
30-50 years old
157
27.8
128
22.1
150
24.8
Over 50 years old
93
18.7
70
14.5
58
12.2
In 2022, the overall employee turnover rate increased. Female turnover rose to 33.8%, from 29.6% in the previous year. This
reflects an increased turnover of mushroom pickers, most of whom are women, at the company "Baltic Champs". For the same
reason, the percentage of female new employees in 2022 was higher than in previous periods. The overall increase in turnover
of employees corresponds to the trends in the entire Lithuanian labour market.
The number of employees in the age group “under 30” is the smallest at AUGA group and accounts for 13.5% of all employees.
Despite labour market trend in Lithuania of younger workers changing jobs more often, the turnover of the Group’s employees in
this age group decreased by 4.2 percentage points in 2022, compared to 2021.
Overall, more new hires were male in 2022, as in previous years. This is related to the fact that the Group operates in the
agricultural sector, where due to the nature of the work, usually more workers are men. Note that when hiring new employees,
the Group assesses candidates based on their qualifications and motivation to work and does not discriminate against them in
any way on the basis of gender.
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4.4.4. Remuneration and its Distribution
Remuneration Policy
Employee well-being is an important objective of the Group, and one way it ensures that is through a fair and transparent
remuneration policy. The policy provides for a distribution of employee pay according to their positions, specifying remuneration
forms, the calculation of wages and their adjustment in the event of deviations from normal working conditions, also setting out
the basis for awarding additional compensation.
In implementing its remuneration policy, AUGA group uses the remuneration data analytics platform of the international company
KORN FERRY. The platform allows the Group to verify the dominant remuneration trends in the market.
CEO and Employees Pay Ratio
In 2022, the ratio of CEO and median employee pay was 4.84 and was 9% smaller than the previous year, when it was 5.34. For
several years in a row, the ratio of the pay of the CEO (the highest-paid employee) to the Group’s median salary of permanent
employees has been decreasing.
This change is due to the annual reviews of employee pay in line with the dominant market trends, while the CEO’s pay has
remained unchanged. Note that the CEO of the Company is one of its main shareholders through Baltic Champs Group, UAB,
which he controls. For more information regarding remunerations, see section 3.5. Remuneration Report.
CEO's salary in 2022 remained unchanged compared to previous years. Median salaries of employees in 2022 reached EUR
1,548 and was 9% higher, compared to previous year.
Gender Pay Ratio
Ratio of men’s and women’s median salaries
2022
2021
2020
Workers
1.28
1.22
1.19
Management
1.33
1.31
1.84
Specialists
1.16
1.18
1.26
Total:
1.22
1.22
1.28
The work of each employee is evaluated according to the results achieved in his or her field, and the Group does not tolerate
different remuneration for the same type of work. In 2022, the median pay ratio for AUGA group employees of different genders
remained the same as in 2021 and reached 1.22, while in 2020 the figure was 1.28. The higher salaries of men at AUGA group
are due to the positions they hold and their competences. AUGA group conducts all its activities in one region, Lithuania, therefore
the data are not distinguished by country and geographical regions.
Additional Incentives for Employees
One way the Group seeks to continuously motivate its employees is through a share option programme. AUGA group has offered
this incentive for four years. In 2022, 238 employees participated in the programme, of whom 26 were new participants. Further
information regarding the share option programme is presented in section 3.6.3. Share Option Programme.
Additional financial incentives are provided to AUGA group's employees for significant performance achievements. In 2022,
additional financial incentives were given to 62 employees. The Group's employees are also encouraged through symbolic
appreciation bonuses at the end of the year. In 2022, a total of 1,175 employees received such bonuses.
The Group does not provide financial incentives to employees or members of management or supervisory bodies for the formation,
development, and implementation of a long-term sustainability strategy. Employees responsible for this area are financially
encouraged in the same way as other employees of the Group.
Collective Agreements
In 2022 AUGA group did not conclude any collective agreements with employees (0%). Employees are not prohibited from taking
the initiative to create employee associations defined in the Labour Code or implementing other social partnerships, as far as the
relations between the employer and employees are concerned or conducting collective negotiations. The Group, in accordance
with Human Rights, Non-Discrimination, Children and Forced Labour Policy, does not support disciplinary or discriminatory actions
GRI 405-2
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GRI 2-19
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against employees, who choose to join associations peacefully and lawfully. According to the guidelines set out in the policy,
employees of the Group are prohibited from using any form of intimidation to prevent other employees from exercising their right
to join or not to join any association.
4.4.5. Health and Safety
Occupational Health and Safety Policy
AUGA group considers it extremely important for the Group to ensure a safe working environment for its employees. Employee
safety is seen as one of the top priorities in all operations of AUGA group. Under its Occupational Health and Safety Policy, the
Group continuously strives to improve the working environment for its employees, the rules for safety at work and their
implementation mechanisms. The Occupational Health and Safety Policy is published on the AUGA group website.
Additionally, at least once a year, the Group conducts periodic work safety and health audits. The process is overseen by qualified
external consultants from two companies that specialise in work safety matters. They are thus responsible for training employees,
preparing, revising and improving job instructions, investigating accidents at work and preparing their prevention plans, and
making suggestions for improving general work safety. Companies of the Group are periodically inspected by the State Labour
Inspectorate. During the reporting year, no fines were received for work safety violations and no significant non-compliances were
recorded. The Group does not have a unified occupational safety and health system that meets ISO standards. Specialised
requirements apply for specific areas of activity. Every new employee of the Group must familiarise themself with the rules and
update this knowledge regularly. AUGA group expects that all its business partners to adhere to these occupational safety and
health principles as well and therefore reminds them about that every year.
Accidents at Work
AUGA group operates in the agricultural sector where manual work is common. Each employee working in the Group is provided
with safety and health instructions specifically suited to their duties, which detail the main possible risks in the workplace and
explain how to avoid them. All employees, when they start working for the Group, are required to familiarise themselves with these
instructions and periodically updated that knowledge. In 2022, the Group registered 14 accidents, in which workers suffered minor
injuries, such as: minimal bodily injury from a fall or rupture of a finger tendon. The workers involved recovered quickly, and none
of them suffered long-term disability resulting from the injury. No workplace accidents were observed in 2022 among seasonal
workers, who work on the basis of payment receipts. As in previous years, no deaths were recorded at the workplace during the
year.
The Group’s companies aim to reduce the risk of potential injuries at work, with the goal of reducing this risk to 0. For this reason,
safety procedures are regularly reviewed, employees receive training on safe working processes, risks are discussed, and
attention is paid to the introducing safety measures to prevent accidents at work. In 2022, there were 0.0114 accidents per
employee (or 0.00066% of all working hours, i.e. 2,129,237 hours). In 2021, the figure was 0.0105 per employee (or 0.0006% of
all working hours). In 2022, the accident rate per million hours worked was 6.58. Seasonal workers are not included in this number.
Health and Safety Training of Employees
In 2022, AUGA group carried out health and safety training for employees in their production units on the following topics: general
health and safety training; loading of goods with a forklift, electric forklift and manually; working with animals; and metal processing
equipment.
Supplementary Health Insurance
AUGA group cares about the health of its employees and provides supplementary health insurance for all workers employed
under a permanent contract for more than three months. Seasonal workers do not receive additional health insurance.
Supplementary health insurance allows employees to receive services at all healthcare institutions, enables early healthcare of
the insured, ensures help when the unexpected happens, and saves time for getting to healthcare.
This health insurance makes it quicker and more convenient to access health-related services, such as medical treatment at
selected health care institutions, consultations with family and other physicians, various tests, medicines, and other health-
enhancing services, including therapeutic massages and physiotherapy sessions. With this insurance, AUGA group workers can
enhance not only their physical, but, also, emotional health – employees are given the conditions to visit psychologists. In addition,
workers can use their supplementary health insurance to reimburse the costs of COVID-19 tests, when required by a medical
institution.
Happily, the Group's data shows that AUGA group’s employees are using the possibility for medical examinations and are
enhancing their health more often.
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Ensuring Consumer Health and Safety
AUGA group ensures that food products are grown and produced in keeping
with the requirements for organic products, without using synthetic fertilisers,
pesticides, genetically modified organisms (GMOs) or other substances
prohibited in organic farming. End-consumer products are preservative free.
AUGA group aims for its products to contain less sugar, more fibre, more
protein and other health benefits. This information is provided on the
packaging.
AUGA branded products and private labels are produced following best
practices in manufacturing and quality assurance. The Group's companies
employ product quality specialists, who ensure that consumers and customers
receive a product that meets all safety and quality requirements.
All companies of the Group and third-party manufacturers that produce AUGA
products have food safety management systems in place. The Group's
company Grybai LT, which produces ready-to-eat soups and other preserved
products, is certified under the BRCGS international food safety standard.
Data Protection
AUGA group has a privacy policy in place in order to ensure the protection of private personal data of employees. The Group also
responsibly complies with the general legal acts regarding the protection of natural persons in the processing and free movement
of personal data. AUGA group also complies with Lithuania’s legal system for the protection of personal data as per Regulation
(EU) 2016/679 of the European Parliament and Council.
4.4.6. Other Information
Assessment of Employee Engagement
In 2022, AUGA group conducted a survey to calculate its Employee Net Promoter Score (eNPS)
4
. The rate of employee
participation in the study reached 87%. The majority of employees who participated in the study, i.e., 58% would recommend
AUGA group to their friends, family or business partners. On a scale of -100% to 100%, the overall eNPS score was 45%.
According to global trends, AUGA group's overall employee satisfaction rate is rated as very good.
Support for Ukraine
AUGA group has contributed to initiatives that support war-torn Ukraine. The Group donated money to the non-governmental
organization "Blue/Yellow", which supports Ukrainian soldiers by non-lethal means, and to the National Cancer Institute, which,
since the beginning of the war, has been treating patients, who arrived from Ukraine to Lithuania. AUGA group has also given
humanitarian aid by providing organic food products produced by AUGA together with purchased diapers. The total value of all
support in 2022 was nearly EUR 60,000.
4
The eNPS indicator is calculated as follows: survey participants are asked the question "How likely would you recommend AUGA group as an employer to your
acquaintances?”, then they are divided into three groups "Recommenders", "Passives" and "Disappointed". Recommenders are those who chose ratings 9-10,
Passives - 7-8, Disappointed - 0-6. NPS is obtained by counting the percentage of Recommenders and subtracting the percentage of Disappointed, dividing it by all
those who participated in the survey. The resulting percentage number describes the company's NPS, which can range from -100 to 100.
OVERVIEIE
W
LOW
FAT
NO
PRESERVATIVES
LESS
SUGARS
HIGH
FIBRE
WHOLE
GRAIN
VEGAN
FRIENDLY
NO ADDED
SUGAR
SOURCE OF
PROTEIN
GLUTEN
FREE
DAIRY
FREE
SMART PACK: LESS
CO
2
LESS WASTE
HAND
PICKED
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4.5. GRI Indicators
GRI
indicator
Title
Page
GRI 2: General Disclosures 2021
1. The Organisation and its Reporting Practices
2-1
Organisational Details
6
2-2
Entities Included in the Organisation’s Sustainability Reporting
xx
2-3
Reporting Period, Frequency, and Contact Point
42
2-4
Restatements of Information
42
2-5
External Assurance
42
2. Activities and Workers
2-6
Activities, Value Chain and Other Business Relationships
6, 9, 10, 11
2-7
Employees
66
2-8
Workers Who Are Not Employees
66
3. Governance
2-9
Governance Structure and Composition
8, 32, 36
2-10
Nomination and Selection of the Highest Governance Body
32, 36 34
2-11
Chair of the Highest Governance Body
32, 36
2-12
Role of Highest Governance Body in Overseeing the Management of Impacts
32, 31
2-13
Delegation of Responsibility for Managing Impacts
32
2-14
Role of the Highest Governance Body in Sustainability Reporting
32, 43
2-15
Conflicts of Interest
48
2-16
Communication of Critical Concerns
48
2-17
Collective Knowledge of the Highest Governance Body
43
2-18
Evaluation of the Performance of the Highest Governance Body
34
2-19
Remuneration Policies
68
2-20
Process to Determine Remuneration
68
2-21
Annual Total Compensation Ratio
68
4. Strategy, Policies and Practices
2-22
Statement on Sustainable Development Strategy
44
2-23
Policy Commitments
48
2-24
Embedding Policy Commitments
48
2-25
Processes to Remediate Negative Impacts
48
2-26
Mechanisms for Seeking Advice and Raising Concerns
48
2-27
Compliance with Laws and Regulations
40
2-28
Membership Associations
49
5. Stakeholder Engagement
2-29
Approach to Stakeholder Engagement
46
72
CONSOLIDATED ANNUAL REPORT 2022
CONTENTS>
2-30
Collective Bargaining Agreements
68
GRI 302: Energy 2016
302-3
Energy Intensity
60
302-4
Reduction of Energy Consumption
59
GRI 303: Water and Effluents 2016
303-5
Water Consumption
60
GRI 304: Biodiversity 2016
304-1
Operational Sites Owned, Leased, Managed in, or Adjacent to, Protected Areas and Areas of High
Biodiversity Value Outside Protected Areas
54
GRI 305: Emissions 2016
305-1
Direct (Scope 1) GHG Emissions
55 56
305-2
Energy Indirect (Scope 2) GHG Emissions
55
305-3
Other Indirect (Scope 3) GHG Emissions
55 56
305-4
GHG Emissions Intensity
56
305-5
Reduction of GHG Emissions
55
GRI 306: Waste 2020
306-1
Waste generation and significant waste-related impacts
61
306-2
Management of significant waste-related impacts
61
306-3
Waste generated
61
GRI 401: Employment 2016
401-1
New Employee Hires and Employee Turnover
67
GRI 403: Occupational Health and Safety 2018
403-1
Occupational Health and Safety Management System
69
403-5
Worker Training on Occupational Health and Safety
69
403-6
Promotion of Worker Health
69
403-9
Work-Related Injuries
69
GRI 405: Diversity and Equal Opportunity 2016
405-1
Diversity of Governance Bodies and Employees
66
405-2
Ratio of Basic Salary and Remuneration of Women to Men
68
GRI 406: Non-discrimination 2016
406-1
Incidents of Discrimination and Corrective Actions Taken
48
GRI 3: Material Topics 2021
3-1
Process to Determine Material Topics
42
3-2
List of Material Topics
42
3-3
Management of Material Topics
42
73
CONSOLIDATED ANNUAL REPORT 2022
CONTENTS>
4.6. Nasdaq ESG Indicators
Nasdaq
indicator
Title
Page
Environmental Indicators
E1
GHG Emissions
55
E2
Emissions Intensity
56
E3
Energy Usage
59
E4
Energy Intensity
60
E5
Energy Mix
59
E6
Water Usage
60
E7
Environmental Operations
62
E8
Climate Oversight / Board
62
E9
Climate Oversight / Management
62
E10
Climate Risk Mitigation
63
Social Indicators
S1
CEO Pay Ratio
68
S2
Gender Pay Ratio
68
S3
Employee Turnover
67
S4
Gender Diversity
66
S5
Temporary Worker Ratio
66
S6
Non-Discrimination
33
S7
Injury Rate
54
S8
Global Health & Safety
54
S9
Child & Forced Labour
48
S10
Human Rights
48
Corporate Governance Indicators
G1
Board Diversity
66
G2
Board Independence
32
G3
Incentivized Pay
68
G4
Collective Bargaining
68
G5
Supplier Code of Conduct
48
G6
Ethics & Anti-Corruption
48
G7
Data Privacy
70
G8
ESG Reporting
42
G9
Disclosure Practices
42
G10
External Assurance
42
74
CONSOLIDATED ANNUAL REPORT 2022
CONTENTS>
4.7 . UN Global Compact Indicators
UN Global Compact Objectives
Page
Human rights
Support and respect the protection of internationally proclaimed human rights.
48
Ensure that the Company does not contribute to human rights violations.
48
Forced Labour
Uphold the freedom of workers association and effective recognition of the right to
collective bargaining.
68
Support the elimination of all forms of forced and compulsory labour.
48
Ensure effective abolition of child labour.
48
Aim to eliminate discrimination in respect of employment and occupation.
48
Environment
Apply preventive measures to ensure environmental protection.
62
Undertake initiatives to promote greater environmental responsibility.
62
Encourage the development and diffusion of environmentally friendly technologies.
63
Anti-Corruption
Work against corruption in all its forms, including extortion and bribery.
48
79
CONTENTS >
AUGA GROUP AB
Konstitucijos pr. 21C, Quadrum North, LT-08130, Vilnius, Lithuania
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
(All amounts are in EUR ’000 unless otherwise stated)
Balance sheets
The accompanying notes are an integral part of these financial statements.
GROUP | As at 31 December | COMPANY | |||
ASSETS | Notes | 2022 | 2021 | 2022 | 2021 |
Non-current assets | |||||
Property, plant and equipment | 5 | 2,749 | 2,597 | ||
Right-of-use assets | 6 | 577 | 658 | ||
Investments in subsidiaries | 7 | 106,688 | 106,675 | ||
Intangible assets | 8 | 1,753 | 10 | ||
Trade and other receivables | 11 | 5,817 | - | ||
Investments accounted for under the equity method | - | - | |||
Deferred income tax assets | 19 | - | - | ||
Biological assets | 9 | - | - | ||
Total non-current assets | 117,584 | 109,940 | |||
Current assets | |||||
Biological assets | 9 | - | - | ||
Inventories | 10 | 28 | 7 | ||
Trade and other receivables | 11 | 2,708 | 4,181 | ||
Other current assets | 12 | 365 | 336 | ||
Cash and cash equivalents | 13 | 9 | 10 | ||
3,110 | 4,534 | ||||
Assets held for sale | - | - | |||
Total current assets | 3,110 | 4,534 | |||
TOTAL ASSETS | 120,694 | 114,474 | |||
EQUITY AND LIABILITIES | |||||
Capital and reserves | |||||
Share capital | 15 | 66,617 | 65,951 | ||
Share premium | 15 | 6,707 | 6,707 | ||
Legal reserve | 15 | 2,041 | 2,041 | ||
Revaluation reserve | 15 | - | - | ||
Reserve for share-based payments to employees | 15 | 2,829 | 3,002 | ||
Retained earnings | ( | ( | 7,507 | 9,827 | |
Equity attributable shareholders of the Company | 85,701 | 87,528 | |||
Non-controlling interest | - | - | |||
Total equity | 85,701 | 87,528 | |||
Non-current liabilities | |||||
Borrowings | 16 | 24,446 | 21,633 | ||
Lease liabilities | 17 | 433 | 516 | ||
Grants | 18 | 842 | 953 | ||
Deferred income tax liabilities | 19 | - | - | ||
Total non-current liabilities | 25,722 | 23,102 | |||
Current liabilities | |||||
Borrowings | 16 | 7,588 | 2,728 | ||
Lease liabilities | 17 | 143 | 151 | ||
Trade payables | 20 | 846 | 388 | ||
Other amounts payable | 21 | 695 | 577 | ||
Total current liabilities | 9,272 | 3,844 | |||
Total liabilities | 34,993 | 26,946 | |||
TOTAL EQUITY AND LIABILITIES | 120,694 | 114,474 | |||
Kęstutis Juščius
Chief Executive Officer
Mindaugas Ambrasas
Chief Financial Officer
80
CONTENTS >
AUGA GROUP AB
Konstitucijos pr. 21C, Quadrum North, LT-08130, Vilnius, Lithuania
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
(All amounts are in EUR ’000 unless otherwise stated)
Statements of profit or loss and other comprehensive income
The accompanying notes are an integral part of these financial statements.
Kęstutis Juščius
Chief Executive Officer
Mindaugas Ambrasas
Chief Financial Officer
STATEMENT OF PROFIT OR LOSS | Year ended 31 December | |||||
GROUP | COMPANY | |||||
Notes | 2022 | 2021 | 2022 | 2021 | ||
Revenue | 22 | 3,878 | 3,254 | |||
Dividends from subsidiaries | 26 | 2,057 | 2,359 | |||
Cost of sales | 22, 23 | ( | ( | (8) | - | |
Change in fair value of biological assets | 9, 22 | ( | - | - | ||
GROSS PROFIT | 5,927 | 5,613 | ||||
Selling expenses | 24 | ( | ( | (1,612) | (1,199) | |
Administrative expenses | 25 | ( | ( | (4,685) | (3,976) | |
Net impairment loss of financial assets | ( | ( | - | - | ||
Other income | 27 | 155 | 258 | |||
Other gain/(loss), net | 28 | 2 | 21 | |||
OPERATING PROFIT | ( | (214) | 717 | |||
Finance costs | 29 | ( | ( | (2,203) | (1,841) | |
PROFIT/(LOSS) BEFORE INCOME TAX | ( | ( | (2,417) | (1,124) | ||
Income tax | 19 | ( | - | - | ||
NET PROFIT/(LOSS) FOR THE YEAR | ( | ( | (2,417) | (1,124) | ||
NET PROFIT ATTRIBUTABLE TO: | ||||||
Shareholders of the Company | ( | ( | (2,417) | (1,124) | ||
Non-controlling interest | ( | - | - | |||
Basic and diluted earnings/(loss) per share | ||||||
(EUR) | 30 | ( | ( | (0.01) | (0.01) | |
STATEMENT OF OTHER COMPREHENSIVE INCOME | ||||||
NET PROFIT/(LOSS) FOR THE PERIOD | ( | ( | (2,417) | (1,124) | ||
Other comprehensive income: | ||||||
Items that will not be reclassified to profit or loss | ||||||
Revaluation of land, before tax | 5 | - | - | |||
Deferred income tax liability on revaluation of land | 19 | ( | - | - | ||
Total other comprehensive income | - | - | ||||
TOTAL COMPREHENSIVE INCOME/(LOSS) | ||||||
FOR THE YEAR | ( | ( | (2,417) | (1,124) | ||
COMPREHENSIVE INCOME/(LOSS) | ||||||
ATTRIBUTABLE TO: | ||||||
Shareholders of the Company | ( | ( | (2,417) | (1,124) | ||
Non-controlling interest | ( | - | - | |||
( | ( | (2,417) | (1,124) | |||
81
AUGA GROUP AB
Konstitucijos pr. 21C, Quadrum North, LT-08130, Vilnius, Lithuania
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
(All amounts are in EUR ’000 unless otherwise stated)
Statements of changes in equity
Equity attributable to shareholders of the Company
Non-
controlling
interest
Total
GROUP | Equity | ||||||||
Reserve for | attributable to | ||||||||
share-based | Retained | shareholders | |||||||
Share | Revaluation | payments to | Legal | earnings/ | of the | ||||
Share capital premium | reserve | employees | reserve | (deficit) | Company | ||||
Balance at 1 January 2021 | |||||||||
Comprehensive income | |||||||||
Net (loss) for the year | ( | ( | ( | ( | |||||
Other comprehensive income | |||||||||
Revaluation of land after income tax effect (Notes 5, 19) | |||||||||
Total comprehensive income | ( | ( | ( | ( | |||||
Share-based payment (Note 15) | |||||||||
Transfer to legal reserve (Note 15) | ( | ||||||||
Transfer to reserve for share-based payments to employees (Note | |||||||||
15) | ( | ||||||||
Balance at 31 December 2021 | ( | ||||||||
Comprehensive income | |||||||||
Net profit/(loss) for the year | ( | ( | ( | ||||||
Other comprehensive income | |||||||||
Revaluation of land after income tax effect (Notes 5, 19) | |||||||||
Total comprehensive income | ( | ( | ( | ||||||
Share-based payment (Note 15) | |||||||||
Transfer to reserve for share-based payments to employees (Note | |||||||||
15) | ( | ||||||||
Issue of new shares (Note 15) | ( | ||||||||
Balance at 31 December 2022 | ( |
The accompanying notes are an integral part of these financial statements.
Kęstutis Juščius
Chief Executive Officer
Mindaugas Ambrasas
Chief Financial Officer
82
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
(All amounts are in EUR ’000 unless otherwise stated)
COMPANY
Share capital
Share premium
Reserve for
share-based
payments to
employees
Legal reserve
Retained
earnings/(deficit)
Total
Balance at 1 January 2021
65,951
6,707
2,509
1,834
11,089
88,090
Comprehensive income
Net (loss) for the year
-
-
-
-
(1,124)
(1,124)
Total comprehensive income
-
-
-
-
(1,124)
(1,124)
Share-based payment (Note 15)
-
-
-
-
562
562
Transfer to legal reserve (Note 15)
-
-
-
207
(207)
-
Transfer to reserve for share-based payments to employees (Note
15)
-
-
493
-
(493)
-
Balance at 31 December 2021
65,951
6,707
3,002
2,041
9,827
87,528
Comprehensive income
Net (loss) for the year
-
-
-
-
(2,417)
(2,417)
Total comprehensive income
-
-
-
-
(2,417)
(2,417)
Share-based payment (Note 15)
-
-
-
-
589
589
Transfer to reserve for share-based payments to employees (Note
15)
-
-
493
-
(493)
-
Issue of new shares (Note 15)
666
-
(666)
-
-
-
Balance at 31 December 2022
66,617
6,707
2,829
2,041
7,507
85,701
The accompanying notes are an integral part of these financial statements.
These financial statements were approved and signed on 17 April 2023.
Kęstutis Juščius
Chief Executive Officer
Mindaugas Ambrasas
Chief Financial Officer
83
AUGA GROUP AB
Konstitucijos pr. 21C, Quadrum North, LT-08130, Vilnius, Lithuania
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
(All amounts are in EUR ’000 unless otherwise stated)
CONTENTS >
Statements of cash flows
Year ended 31 December
The accompanying notes are an integral part of these financial statements.
Kęstutis Juščius
Chief Executive Officer
Mindaugas Ambrasas
Chief Financial Officer
GROUP
COMPANY
Cash flows from operating activities | Notes | 2022 | 2021 | 2022 | 2021 |
Net profit/(loss) before income tax | ( | ( | (2,417) | (1,124) | |
Adjustments for non-cash items of expenses/(income) and other adjustments | |||||
Depreciation expenses (PP&E) | 5 | 259 | 246 | ||
Depreciation expenses (ROU assets) | 6 | 131 | 132 | ||
Amortisation expenses | 8 | 6 | 2 | ||
Share-based payment expenses recognised in profit or loss | 15, 25 | 589 | 562 | ||
Write-offs of PP&E | - | 45 | |||
Reversal of impairment of PP&E | 5 | ( | - | - | |
(Gain) loss on disposal of PP&E | 28 | ( | (3) | - | |
Loss allowance for amounts receivable and write-off of debts | 11 | - | - | ||
Write-down allowance for inventories and biological assets | 23 | - | - | ||
Interest income | 27 | ( | ( | (30) | (106) |
Finance costs | 29 | 2,153 | 1,800 | ||
Interest costs on ROU assets | 29 | 25 | 41 | ||
Dividends from subsidiaries | 26 | (2,057) | (2,359) | ||
(Gain)/loss on change in fair value of biological assets | 22 | ( | - | - | |
Amortisation of assets-related grants | 18 | ( | ( | (111) | (149) |
Inventory write-down allowance | 10 | ( | - | - | |
Changes in working capital | |||||
(Increase) decrease in biological assets | ( | - | - | ||
(Increase) decrease in trade receivables and prepayments | ( | (4,373) | (918) | ||
(Increase) decrease in inventory | ( | (21) | 4 | ||
(Decrease) increase in trade and other payables | 892 | (24) | |||
(4,956) | (1,848) | ||||
Interest paid | ( | ( | (2,171) | (1,449) | |
Net cash flows from//(to) operating activities | (7,127) | (3,297) | |||
Cash flows from investing activities | |||||
Acquisition of PP&E | 5 | ( | ( | (1,434) | (1,119) |
Acquisition of intangible assets | 8 | ( | ( | (727) | (7) |
Acquisition of subsidiaries | 7 | ( | (16) | - | |
Disposal of subsidiaries | 7 | 3 | - | ||
Disposal of PP&E | 28 | 5 | - | ||
Assets-related grants received from the NPA | 18 | - | 380 | ||
Dividends from subsidiaries | 26 | 2,057 | 2,359 | ||
Repayments of loans grated | - | - | |||
Loans granted | - | - | |||
Net cash flows from//(to) investing activities | ( | ( | (112) | 1,613 | |
Cash flows from financing activities | |||||
Bonds | 6,000 | - | |||
Repayment of borrowings from credit institutions | ( | ( | (600) | (272) | |
Proceeds from borrowings from credit institutions | 1,978 | 1,852 | |||
Repayment of borrowings other than from credit institutions | ( | - | - | ||
Payments received under supplier financing arrangement | - | - | |||
Payments made to financial institutions under supplier financing | |||||
arrangement | ( | ( | - | ||
Lease payments | ( | ( | (141) | (187) | |
Net cash flows from/(to) financing activities | ( | 7,237 | 1,393 | ||
Net (decrease) / increase in cash and cash equivalents | ( | (1) | (291) | ||
Cash and cash equivalents in the beginning of the period | 10 | 301 | |||
Cash and cash equivalents at the end of the period | 9 | 10 |
84
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
(All amounts are in EUR ’000 unless otherwise stated)
CONTENTS >
The Company's main business activity is management of agricultural companies in Lithuania. T he main areas of operation of the Group
85
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
(All amounts are in EUR ’000 unless otherwise stated)
CONTENTS >
86
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
(All amounts are in EUR ’000 unless otherwise stated)
CONTENTS >
87
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
(All amounts are in EUR ’000 unless otherwise stated)
CONTENTS >
88
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
(All amounts are in EUR ’000 unless otherwise stated)
CONTENTS >
89
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
(All amounts are in EUR ’000 unless otherwise stated)
CONTENTS >
90
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
(All amounts are in EUR ’000 unless otherwise stated)
CONTENTS >
91
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
(All amounts are in EUR ’000 unless otherwise stated)
CONTENTS >
92
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
(All amounts are in EUR ’000 unless otherwise stated)
CONTENTS >
Buildings | 20–50 | years |
Plant and machinery | 4–20 | years |
Motor vehicles | 1–10 | years |
Other fixtures, fittings, tools and equipment | 1-10 | years |
93
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
(All amounts are in EUR ’000 unless otherwise stated)
CONTENTS >
94
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
(All amounts are in EUR ’000 unless otherwise stated)
CONTENTS >
95
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
(All amounts are in EUR ’000 unless otherwise stated)
CONTENTS >
96
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
(All amounts are in EUR ’000 unless otherwise stated)
CONTENTS >
97
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
(All amounts are in EUR ’000 unless otherwise stated)
CONTENTS >
98
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
(All amounts are in EUR ’000 unless otherwise stated)
CONTENTS >
99
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
(All amounts are in EUR ’000 unless otherwise stated)
CONTENTS >
100
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
(All amounts are in EUR ’000 unless otherwise stated)
CONTENTS >
101
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
(All amounts are in EUR ’000 unless otherwise stated)
CONTENTS >
2.30. Investments in Subsidiaries in the Company‘s Separate Financial Statements
Investments in subsidiaries are accounted for at cost less impairment loss. Cost is calculated based on the price paid and adjusted to
reflect changes in the price paid arising from changes in contingent consideration. The cost also includes directly attributable costs of
investment.
102
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
(All amounts are in EUR ’000 unless otherwise stated)
CONTENTS >
103
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
(All amounts are in EUR ’000 unless otherwise stated)
CONTENTS >
As at 31 December 2022, the Company's borrowings with floating interest rate amounted to EUR 3,128 thousand (31 December 2021:
none). Had the floating interest rate changed by 1 p.p., this would result in EUR 3 thousand annual effect on the Company's pre-tax result.
See note 16 for more information.
COMPANY
Liabilities with fixed interest rate
Liabilities with floating interest rate
At 31 December 2022
At 31 December 2021
At 31 December 2022
At 31 December 2021
Non-current
Borrowings from credit institutions
803
2,728
3,128
Bonds
25,409
19,114
Borrowings from the parent
2,694
2,520
Lease liabilities
519
579
57
83
Total
29,425
24,940
3,185
83
At the end of 2022, the Company had issued guarantees to the banks to secure fulfilment of financial liabilities of the Group‘s subsidiaries
for the total value of EUR 38,812 thousand (2021: EUR 34,175 thousand) (Note 32)
104
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
(All amounts are in EUR ’000 unless otherwise stated)
CONTENTS >
Calculation of loss rates and loss allowances for the Company’s trade receivables:
Credit quality of the Company’s
trade receivables
Receivables not past
due
Past due from
1 to 30 days
Past due from
31 to 90 days
Past due over
90 days
Total
At 31 December 2022
Expected credit loss rate
0.01%
0.01%
0.01%
0.01%
Total trade receivables
1,425
399
736
5,951
8,511
Total
1,425
399
736
5,951
8,511
At 31 December 2021
Expected credit loss rate
0.01%
0.01%
0.01%
0.01%
Total trade receivables
835
321
612
2,399
4,167
Total
835
321
612
2,399
4,167
As at 31 December 2022 and 2021, no loss allowances were recognised for the Company’s trade receivables, since the expected credit
loss rates and expected credit loss amount were not material because 99% of receivables were from subsidiaries.
Although a large portion of trade receivables were designated as past due, a part of the Company’s trade receivables were classified as
non-current (Note 11).
105
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
(All amounts are in EUR ’000 unless otherwise stated)
CONTENTS >
As at 31 December 2022 and 2021, no loss allowance was recognised for the Company's cash and cash equivalents, since the expected
credit loss rates were immaterial.
The Company‘s all cash balances were held at banks with long-term credit rating of Investment grade awarded by international rating
agencies Moody‘s, Standard&Poors or Fitchratings.
106
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
(All amounts are in EUR ’000 unless otherwise stated)
CONTENTS >
Contractual cash flows
COMPANY
Carrying
amount
Total
On demand
Within 1
year
Between 1
and 2 years
Between 3 and 4
years
Over 5 years and
later
At 31 December 2022
Borrowings
32,034
35,399
-
9,535
24,795
1,069
-
Lease liabilities
576
673
-
179
175
308
11
Guarantees issued
-
39,044
39,044
-
-
-
-
Trade and other payables
867
867
-
867
-
-
-
Total
33,477
75,983
39,044
10,581
24,970
1,377
11
At 31 December 2021
Borrowings
24,361
29,360
-
4,208
1,316
23,836
-
Lease liabilities
667
773
-
164
166
333
109
Guarantees issued
-
34,407
34,407
-
-
-
-
Trade and other payables
393
393
-
393
-
-
-
Total
25,421
64,933
34,407
4,765
1,482
24,169
109
As at 31 December 2022, the Company‘s current liabilities exceeded current assets by EUR 6,162 thousand (31 December 2021: current
assets exceeded current liabilities by EUR 689 thousand). In 2022, current liquidity ratio (current assets / current liabilities) was 0.34 (2021:
107
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
(All amounts are in EUR ’000 unless otherwise stated)
CONTENTS >
1.18), and quick ratio was 0.33 (2021: 1.18). As at 31 December 2022, decrease in liquidity ratio was caused by reclassification of
borrowings from non-current to current due to non-compliance with financial covenants. However, confirmations were obtained from the
financial institutions assuring that no additional sanctions will be imposed due to non-compliance with the financial covenants (see below
‘Compliance with financial covenants under the loan and bond agreements’). Therefore, no business continuity risk arises for the Company.
108
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
(All amounts are in EUR ’000 unless otherwise stated)
CONTENTS >
As at 31 December 2022 and 31 December 2021, the Company complied with these requirements.
109
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
(All amounts are in EUR ’000 unless otherwise stated)
CONTENTS >
d) Impairment of investments in subsidiaries (Company)
As at 31 December 2022, the impairment of investments in subsidiaries was estimated by assessing the recoverable amount. The
recoverable amount of investments in subsidiaries is assessed by discounting the future cash flows to their present value. The management
tested its investments in subsidiaries for impairment and concluded that there was no impairment (Note 7).
110
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
(All amounts are in EUR ’000 unless otherwise stated)
CONTENTS >
111
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
(All amounts are in EUR ’000 unless otherwise stated)
CONTENTS >
5. Property, Plant and Equipment | |||||||
GROUP | Land | Buildings and | Plant and | Motor | Other | Construction in | Total |
structures | machinery | vehicles | PP&E | progress | |||
At 1 January 2021 | |||||||
Cost or revalued amount | 27,473 | 65,141 | 49,815 | 3,915 | 2,792 | 2,991 | 152,127 |
Accumulated depreciation | - | (24,430) | (32,706) | (2,699) | (2,108) | - | (61,943) |
Net book amount | 27,473 | 40,711 | 17,109 | 1,216 | 684 | 2,991 | 90,184 |
Net book amount at 1 | 27,473 | 40,711 | 17,109 | 1,512 | 684 | 2,991 | 90,184 |
January 2021 | |||||||
- additions | 1,182 | 493 | 2,495 | 265 | 728 | 2,863 | 8,026 |
- write-offs and disposals | (2) | (112) | (123) | (20) | (14) | - | (271) |
- revaluation | 1,221 | - | - | - | - | - | 1,221 |
- depreciation | - | (2,403) | (3,528) | (171) | (690) | - | (6,792) |
- reclassification | - | - | (314) | - | 1,651 | (1,653) | (316) |
Net book amount at 31 | 29,874 | 38,689 | 15,639 | 1,290 | 2,359 | 4,201 | 92,052 |
December 2021 | |||||||
At 31 December 2021 | |||||||
Cost or revalued amount | 29,874 | 65,567 | 50,567 | 4,160 | 4,897 | 4,201 | 159,266 |
Accumulated depreciation | - | (26,878) | (34,928) | (2,870) | (2,538) | - | (67,214) |
Net book amount | 29,874 | 38,689 | 15,639 | 1,290 | 2,359 | 4,201 | 92,052 |
Net book amount at 1 | 29,874 | 38,689 | 15,639 | 1,290 | 2,359 | 4,201 | 92,052 |
January 2022 | |||||||
- additions | 436 | 265 | 1,932 | 153 | 132 | 4,271 | 7,189 |
- write-offs and disposals | (13) | (10) | (299) | (20) | (3) | (92) | (437) |
- revaluation | 1,881 | - | - | - | - | 1,881 | |
- reversal of provisions | - | 204 | 168 | 21 | - | - | 393 |
- depreciation | - | (2,479) | (3,297) | (356) | (529) | (6,661) | |
- reclassification | 1,038 | 1,090 | - | - | (2,834) | (706) | |
Net book amount at 31 | 32,178 | 37,707 | 15,233 | 1,088 | 1,959 | 5,546 | 93,711 |
December 2022 | |||||||
At 31 December 2022 | |||||||
Cost or revalued amount | 32,178 | 66,668 | 51,099 | 4,158 | 5,006 | 5,546 | 164,655 |
Accumulated depreciation | - | (28,961) | (35,866) | (3,070) | (3,047) | - | (70,944) |
Net book amount | 32,178 | 37,707 | 15,233 | 1,088 | 1,959 | 5,546 | 93,711 |
GROUP | ||
At 31 December 2022 | At 31 December 2021 | |
Buildings and structures | 2,523 | 2,785 |
Plant and machinery | 19,221 | 17,918 |
Motor vehicles | 1,534 | 1,368 |
Other PP&E | 1,566 | 1,139 |
Total | 24,863 | 23,210 |
112
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
(All amounts are in EUR ’000 unless otherwise stated)
CONTENTS >
COMPANY
Motor
vehicles
Other
PP&E
Construction
in progress
Total
At 1 January 2021
Cost or revalued amount
225
113
1,612
1,950
Accumulated depreciation
(146)
(43)
-
(189)
Net book amount
79
70
1,612
1,761
Net book amount at 1
January 2021
79
70
1,612
1,761
- additions
-
5
1,060
1,065
- write-offs and disposals
-
-
-
-
- revaluation
-
-
-
-
- depreciation
(35)
(194)
-
(229)
- reclassifications
-
1,651
(1,651)
-
Net book amount at 31
December 2021
44
1,532
1,021
2,597
-
At 31 December 2021
Cost or revalued amount
225
1,833
1,021
2,991
Accumulated depreciation
(181)
(301)
-
(394)
Net book amount
44
1,532
1,021
2,597
Net book amount at 1
January 2022
44
1,532
1,021
2,597
- additions
-
2
1,432
1,434
- write-offs and disposals
(2)
-
-
(12)
- revaluation
-
-
-
-
- depreciation
(22)
(237)
-
(249)
- reclassifications
-
-
(1,021)
(1,021)
Net book amount at 31
December 2022
20
1,297
1,432
2,7494
At 31 December 2022
Cost or revalued amount
215
1 834
1 432
3 481
Accumulated depreciation
(195)
(537)
-
(732)
Net book amount
20
1 297
1 432
2 749
Depreciation charges of the Company’s property, plant and equipment are included in administrative expenses.
Construction in progress includes capitalised costs of R&D project. The project is related to development of hybrid biomethane/electric
tractors. In 2023, the incurred costs capitalised in the category of construction in progress will be reclassified to assets used in the
Company‘s activities.
As at 31 December 2022, property, plant and equipment fully depreciated but still in use by the Company amounted to EUR 198.6 thousand
(31 December 2021: EUR 43.6 thousand).
As at 31 December 2022, the Company’s property, plant and equipment with the carrying amount of EUR 1,248 thousand (2021: none)
had been pledged to secure repayment of bank borrowings.
Land | |
Carrying amount of land before revaluation effect at 31 December 2021 | 13,221 |
Carrying amount of land before revaluation effect at 31 December 2022 | 13,601 |
113
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
(All amounts are in EUR ’000 unless otherwise stated)
CONTENTS >
114
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
(All amounts are in EUR ’000 unless otherwise stated)
CONTENTS >
115
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
(All amounts are in EUR ’000 unless otherwise stated)
CONTENTS >
COMPANY
Buildings
and
structures
Motor
vehicles
Total
At 1 January 2021
Cost or revalued amount
1,009
74
1,083
Accumulated depreciation
(272)
(14)
(286)
Net book amount
737
60
797
Net book amount at 1 January 2021
737
60
797
- additions
53
53
- write-offs and disposals
-
-
- effect of modifications
(43)
-
(43)
- depreciation
(132)
(17)
(149)
- reclassifications
-
-
Net book amount at 31 December 2021
562
96
658
At 31 December 2021
0
Cost or revalued amount
966
127
1,093
Accumulated depreciation
(403)
(31)
(434)
Net book amount
562
96
658
Net book amount at 1 January 2022
-
- additions
-
-
- write-offs and disposals
-
-
- effect of modifications
50
-
50
- depreciation
(114)
(17)
(131)
- reclassifications
-
-
Net book amount at 31 December 2022
498
79
577
At 31 December 2022
-
Cost or revalued amount
1,019
127
1,146
Accumulated depreciation
(521)
(48)
(569)
Net book amount
498
79
577
Depreciation charges of the Company’s right-of-use assets were included in administrative expenses.
7. Investments in Subsidiaries
2022
2021
At 1 January
106,675
96,433
Capitalised non-current receivables from subsidiaries
-
10,000
Acquisition of subsidiaries / additions
16
242
Disposal of subsidiaries
(3)
-
At 31 December
106,688
106,675
In 2021, the Company acquired subsidiary Grain LT UAB and capitalised its debt.
Impairment
As at 31 December 2022 and 2021, the Company’s management performed impairment test for the cost of investments in subsidiaries.
During the test, the cost of investments in subsidiaries operating in the segments of crop growing, livestock, mushroom growing and
consumer packaged goods was compared against the net assets value of those subsidiaries as at 31 December 2022. Where the net
assets value was lower than the carrying amount of the investment, the management concluded that there existed impairment indications
for the investment in that segment and estimated the recoverable amount of the specific segment using the discounted cash flow method.
The results of impairment test of mushroom growing segment showed that there were indications of impairment, i.e., the net assets value
was lower than the carrying amount of the investment. The segments of mushroom growing and consumer packaged goods include the
investment in Baltic Champs UAB group comprising Baltic Champs UAB and Grybai LT UAB. Accordingly, the impairment test was based
116
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
(All amounts are in EUR ’000 unless otherwise stated)
CONTENTS >
on forecast cash flows from the entire Baltic Champs UAB group. The forecast annual cash flows were determined with reference to the
budget for 2023. The calculations were based on assumptions listed in the table below. Subsequently, the present value of those future
cash flows was determined and it was compared against the cost of investments in Baltic Champs UAB. Since the resulting value was
higher than the cost of investment, it was concluded that there was no impairment for the investment in Baltic Champs UAB.
The following assumptions were used in the impairment tests:
Assumption
At 31 December 2022
At 31 December 2021
Forecast period
5 years
5 years
Annual growth rate
5%
5%
Discount rate (WACC):
7.72%
5.56%
No impairment loss or reversal of previous impairment loss for investments in subsidiaries were recognised in 2022 and 2021.
Sensitivity to change in key assumptions used in the impairment test:
Impairment loss, EUR ‘000
Change in assumption
Increase in assumption
Decrease in assumption
Assumption
2022
2021
2022
2021
2022
2021
Annual growth rate
1 p.p.
1 p.p.
No impact
No impact
No impact
No impact
WACC
0.5 p.p
0.5 p.p
No impact
No impact
No impact
No impact
EBITDA
5 p.p.
-
No impact
-
No impact
-
117
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
(All amounts are in EUR ’000 unless otherwise stated)
CONTENTS >
Assumption | At 31 December | |
At 31 December 2022 | 2021 | |
Forecast period | 5 years | 5 years |
Forecast revenue for first period | EUR 9.6 million | EUR 8.4 million |
Annual growth rate of revenue | 5% | 5% |
Annual growth rate of expenses | 5% | 5% |
Annual growth rate beyond 5-year period | 1% | 0% |
Forecast EBITDA margin | 21% | 23% |
Discount rate (after-tax WACC) | 8.07% | 7.23% |
Expected capital expenditure approximates depreciation | ||
charges | Yes | Yes |
mpact on increase in impairment at 31 December 2022 and | ||
2021 | ||
Changes in assumptions | Change in assumption | |
Annual decrease in revenue and cost of sales during the forecast period | 10 p.p. | No impact |
Decrease in annual growth rate | 1 p.p. | No impact |
Increase in discount rate (WACC) | 0.5 p.p. | No impact |
Decrease in EBITDA margin | 5 p.p. | No impact |
At 31 December | At 31 December | |
2022 | 2021 | |
Livestock | 10,515 | 9,993 |
Total non-current biological assets | 10,515 | 9,993 |
Crops | 17,464 | 17,108 |
Mycelium cultivation seedbed | 2,419 | 2,290 |
Total current biological assets | 19,883 | 19,398 |
Total biological assets | 30,398 | 29,391 |
118
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
(All amounts are in EUR ’000 unless otherwise stated)
CONTENTS >
Value of the Group’s livestock, EUR ‘000 | Dairy cows | Heifers | Other livestock | Total |
At 31 December 2020 | 6,310 | 3,344 | 45 | 9,699 |
Additions | - | 205 | - | 205 |
Increase (birth) | - | 74 | 47 | 121 |
Makeweight | - | 3,253 | 382 | 3,635 |
Reclassifications from other categories | 3,613 | (3,615) | 2 | - |
Disposals | (609) | (117) | (172) | (898) |
Natural mortality (recognised as change in fair value of biological assets (Note 22) | (257) | (79) | (27) | (363) |
Gain/(loss) on change in fair value of biological | ||||
assets (Note 22) | (2,167) | (64) | (175) | (2,406) |
At 31 December 2021 | 6,890 | 3,001 | 102 | 9,993 |
Additions | - | - | 4 | 4 |
Increase (birth) | - | 55 | 61 | 116 |
Makeweight | - | 3,202 | 426 | 3,628 |
Reclassifications from other categories | 2,561 | (2,561) | - | - |
Disposals | (673) | (159) | (304) | (1,136) |
Natural mortality (recognised as change in fair value of biological assets (Note 22) | (320) | (52) | (13) | (385) |
Gain/(loss) on change in fair value of biological | ||||
assets (Note 22) | (1,659) | 93 | (139) | (1,705) |
At 31 December 2022 | 6,799 | 3,579 | 137 | 10,515 |
Dairy cows | Heifers | Other livestock | Total | |
At 31 December 2020 | 3,471 | 2,744 | 246 | 6,461 |
Additions | - | 158 | - | 158 |
Increase (birth) | - | 1,997 | 1,562 | 3,559 |
Reclassifications between categories | 1,253 | (1,264) | 11 | - |
Disposals | (1,007) | (428) | (1,420) | (2,855) |
Natural mortality | (140) | (301) | (143) | (584) |
At 31 December 2021 | 3,577 | 2,906 | 256 | 6,739 |
Additions | - | - | - | - |
Increase (birth) | - | 1,842 | 1,588 | 3,430 |
Reclassifications between categories | 1,022 | (1,022) | - | - |
Disposals | (976) | (338) | (1,402) | (2,716) |
Natural mortality | (166) | (228) | (115) | (509) |
At 31 December 2022 | 3,457 | 3,160 | 327 | 6,944 |
Assumption | At 31 December 2022 | At 31 December 2021 | ||
Forecast period | 4 years | 4 years | ||
Average milk price | 0.550 | EUR/kg | 0.436 | EUR/kg |
Useful life of cow herd | 1-4 years | 1-4 years | ||
Average yield per cow | 22.35 kg per day | 24.45 kg per day | ||
Discount rate (after-tax WACC) | 7.72% | 7.22% |
119
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
(All amounts are in EUR ’000 unless otherwise stated)
CONTENTS >
Crops | |
At 1 January 2021 | 14,903 |
Seeding and other costs before point of harvest | 21,406 |
Harvest of crops/mushrooms | (30,820) |
Effect of change in fair value on initial recognition of agricultural produce | (5,489) |
(Note 22) | |
Autumn seeding and land tillage for spring | 14,774 |
Effect of change in fair value on initial recognition of agricultural produce | 2,334 |
– winter crops (Note 4, 22) | |
At 31 December 2021 | 17,108 |
Seeding and other costs before point of harvest | 23,954 |
Harvest of crops/mushrooms | (43,888) |
Effect of change in fair value on initial recognition of agricultural produce | 2,826 |
(Note 22) | |
Autumn seeding and land tillage for spring | 15,499 |
Effect of change in fair value on initial recognition of agricultural produce | |
winter crops (Note 4, 22) | 1,965 |
– | |
At 31 December 2022 | 17,464 |
Winter | Winter | Winter | Winter | Summer | ||
2022 | wheat | rapeseed | rye | barley | crops | Total |
Total seeded area (tilled land), ha | 10,249 | 1,651 | 294 | 765 | 25,555 | 38,514 |
Total costs incurred, EUR ‘000 | 5,321 | 1,272 | 156 | 400 | 8,351 | 15,499 |
Average costs per ha (EUR) | 519 | 771 | 529 | 523 | 327 | 402 |
2021 | ||||||
Total seeded area (tilled land), ha | 10,815 | 2,408 | 333 | 229 | 24,832 | 38,618 |
Total costs incurred, EUR ‘000 | 5,124 | 1,384 | 198 | 73 | 7,994 | 14,774 |
Average costs per ha (EUR) | 474 | 575 | 595 | 318 | 322 | 383 |
120
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
(All amounts are in EUR ’000 unless otherwise stated)
CONTENTS >
121
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
(All amounts are in EUR ’000 unless otherwise stated)
CONTENTS >
122
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
(All amounts are in EUR ’000 unless otherwise stated)
CONTENTS >
123
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
(All amounts are in EUR ’000 unless otherwise stated)
CONTENTS >
Reserve for share-based payments to employees | Number of shares, | Value, EUR ‘000 |
units | ||
Total reserve at 31 December 2020 | 8,651,724 | 2,509 |
Shares allocated to employees under share options as at 31 December | ||
2021 | 7,167,391 | 2,079 |
Unallocated shares as at 31 December 2021 | 3,184,333 | 923 |
Total reserve at 31 December 2021 | 10,351,724 | 3,002 |
Shares allocated to employees under share options as at 31 December | ||
2022 | 6,259,716 | 1,816 |
Unallocated shares as at 31 December 2022 | 3,494,158 | 1,013 |
Total reserve at 31 December 2022 | 9,753,874 | 2,829 |
124
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
(All amounts are in EUR ’000 unless otherwise stated)
CONTENTS >
GROUP | COMPANY | |||
At 31 December | At 31 December | At 31 December | At 31 December | |
Non-current | 2022 | 2021 | 2022 | 2021 |
Borrowings from credit institutions | 17,498 | 26,748 | 2,343 | - |
Bonds | 19,409 | 19,114 | 19,409 | 19,114 |
Other financial liabilities | 253 | 253 | - | - |
Borrowings from the parent | - | - | 2,694 | 2,519 |
Total | 37,160 | 46,115 | 24,446 | 21,633 |
Current | ||||
Borrowings from credit institutions | 10,188 | 5,767 | 1,588 | 2,728 |
Credit lines | 16,450 | 5,583 | - | - |
Bonds | 6,000 | - | 6,000 | - |
Total | 32,638 | 11,350 | 7,588 | 2,728 |
Total borrowings | 69,798 | 57,465 | 32,034 | 24,361 |
Movements in borrowings from credit institutions and credit lines: | GROUP | COMPANY | ||
2022 | 2021 | 2022 | 2021 | |
Balance at 1 January | 38,098 | 36,888 | 2,728 | 3,000 |
Proceeds from borrowings during the year | 4,118 | 6,500 | 1,803 | 1,360 |
Repayments of borrowings | (4,057) | (1,473) | (600) | (1632) |
Use of credit lines | 5,978 | (3,817) | - | - |
Interest charged | 1,528 | 1,196 | 210 | 187 |
Interest paid | (1,528) | (1,196) | (210) | (187) |
Balance at 31 December | 44,137 | 38,098 | 3,931 | 2,728 |
Movements in bonds: | GROUP | COMPANY | ||
2022 | 2021 | 2022 | 2021 | |
Balance at 1 January | 19,114 | 18,818 | 19,114 | 18,818 |
Bonds issued during the year | 6,000 | - | 6,000 | - |
Repayments of borrowings | - | - | - | - |
Interest charged | 1,517 | 1,541 | 1,517 | 1,541 |
Interest paid | (1,222) | (1,245) | (1,222) | (1,245) |
Balance at 31 December | 25,409 | 19,114 | 25,409 | 19,114 |
125
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
(All amounts are in EUR ’000 unless otherwise stated)
CONTENTS >
Loan from the parent company
The Company has borrowings from the Group’s monetary fund – Žemės Vystymo Fondas 20.
GROUP | COMPANY | |||
2022 | 2021 | 2022 | 2021 | |
Gross debt - fixed interest rates | (27,941) | (22,305) | (28,906) | (24,361) |
Gross debt - floating interest rates | (41,857) | (35,160) | (3,128) | - |
Total gross debt | (69,798) | (57,465) | (32,034) | (24,361) |
The Company’s future minimum lease payments comprised as follows as at 31 December:
2022
2021
Minimum lease
payments
Present value of minimum
lease payments
Minimum lease
payments
Present value of minimum
lease payments
Within 1 year
179
143
164
151
Between 2 and 5 years
495
433
609
516
Minimum lease payments
673
576
773
667
Less: future finance charges
(97)
-
(106)
-
Present value of minimum lease payments
576
576
667
667
Movement in lease liabilities during the year:
GROUP
COMPANY
126
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
(All amounts are in EUR ’000 unless otherwise stated)
CONTENTS >
127
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
(All amounts are in EUR ’000 unless otherwise stated)
CONTENTS >
128
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
(All amounts are in EUR ’000 unless otherwise stated)
CONTENTS >
129
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
(All amounts are in EUR ’000 unless otherwise stated)
CONTENTS >
2 | ||||
130
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
(All amounts are in EUR ’000 unless otherwise stated)
131
CONTENTS >
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
(All amounts are in EUR ’000 unless otherwise stated)
COMPANY
The Company’s revenue by nature:
2022
2021
Business consultation and financial accounting services
3,847
3,248
Dividends from subsidiaries
2,057
2,359
Other revenue
31
6
Total
5,935
5,613
132
CONTENTS >
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
(All amounts are in EUR ’000 unless otherwise stated)
133
CONTENTS >
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
(All amounts are in EUR ’000 unless otherwise stated)
GROUP | COMPANY | |||
2022 | 2021 | 2022 | 2021 | |
Wages and salaries and social security contributions | 4,775 | 4,354 | 2,733 | 2,162 |
Depreciation of PP&E and ROU assets and amortisation of intangible assets | 932 | 812 | 286 | 288 |
Insurance and taxes | 918 | 799 | 70 | 75 |
Share-based payment expenses | 589 | 562 | 589 | 562 |
Office supplies | 633 | 654 | 124 | 58 |
Transport expenses | 415 | 313 | 167 | 150 |
Fuel | 364 | 256 | 117 | 71 |
Consultation and business plan preparation | 323 | 273 | 235 | 201 |
Rent and utility services | 320 | 387 | 63 | 30 |
Services of credit institutions | 179 | 65 | 4 | 4 |
Real estate registration and notary fees | 112 | 104 | - | - |
PP&E write-offs | 5 | 23 | - | - |
Change in impairment of PP&E | (393) | - | - | - |
Other | 981 | 905 | 297 | 375 |
Total | 10,153 | 9,508 | 4,685 | 3,976 |
2022 | GROUP | 2021 | 2022 | COMPANY | 2021 | |
Financial statements audit services under contracts | 173 | 100 | 100 | 60 | ||
Other services | - | 1 | - | 1 | ||
Total | 173 | 101 | 100 | 61 |
134
CONTENTS >
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
(All amounts are in EUR ’000 unless otherwise stated)
26. Dividends from Subsidiaries
During the Annual General Meetings of Shareholders of the Group entities held in 2022, the decisions were made to pay out
dividends to the shareholders. In 2022, the Company received dividends from the Group entities in amount of EUR 2,057 thousand
(2021: EUR 2,359 thousand).
Shareholders’ share of dividends in
2022 (%)
Shareholders’ share of dividends in
2022 (EUR)
Entity distributing
dividends
AUGA
Group
AB
Other Group
entities
Non-
controlling
interest
Dividends
(EUR)
AUGA
Group AB
Other
Group
entities
Non-
controlling
interest
Žemės Vystymo Fondas 20
UAB
100.00
-
-
672,000
672,000
-
-
AVG Investment UAB
100.00
-
-
4,000
4,000
-
-
AWG Investment 1 UAB
100.00
-
-
1,154,000
1,154,000
-
-
eTime invest UAB
100.00
-
-
227,000
227,000
-
-
Total
-
-
-
2,057,000
2,057,000
-
-
Shareholders’ share of dividends in
2021 (%)
Shareholders’ share of dividends in
2021 (EUR)
Entity distributing
dividends
AUGA
Group
AB
Other Group
entities
Non-
controlling
interest
Dividends
(EUR)
AUGA
Group AB
Other
Group
entities
Non-
controlling
interest
Žemės Vystymo Fondas 20
UAB
100,00
-
-
781,000
781,000
-
-
AVG Investment UAB
100,00
-
-
9,000
9,000
-
-
AWG Investment 1 UAB
100,00
-
-
1,258,000
1,258,000
-
-
eTime invest UAB
100,00
-
-
311,000
311,000
-
-
Total
-
-
-
2,359,000
2,359,000
-
-
135
CONTENTS >
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
(All amounts are in EUR ’000 unless otherwise stated)
COMPANY
The Company‘s related parties are as follows:
- AUGA Group AB shareholders with significant influence;
- Subsidiaries of AUGA Group AB
The Company's transactions with related parties and balances of transactions were as follows:
2022
Related parties of the Company
Loans granted
Receivables and
prepayments
Borrowings
Payables
Interest on
borrowings and
other purchases
Sales and interest
income
Subsidiaries
-
8,381
2,694
279
265
3,290
Shareholders with significant
influence
Baltic Champs Group UAB
-
-
-
-
-
-
Kęstutis Juščius
-
-
-
-
-
-
Total
-
8,381
2,694
279
265
3,290
136
CONTENTS >
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
(All amounts are in EUR ’000 unless otherwise stated)
2021
Related parties of the Company
Loans granted
Receivables and
prepayments
Borrowings
Payables
Interest on
borrowings and
other purchases
Sales and
interest income
Subsidiaries
-
4,184
2,520
110
500
5,014
Shareholders with significant
influence
Baltic Champs Group UAB
-
-
-
-
-
-
Kęstutis Juščius
-
9
-
-
-
-
Total
-
4,193
2,520
110
500
5,014
Guarantees - Company
As at 31 December 2022, the Company had issued guarantees to banks to secure fulfilment of financial liabilities of the Group's
subsidiaries for the total amount of EUR 38,812 thousand (2021: EUR 34,175 thousand).
* * * *
PricewaterhouseCoopers UAB, J. Jasinskio str. 16B, 03163 Vilnius, Lithuania
+370 (5) 239 2300, lt_vilnius@pwc.com, www.pwc.lt
Company code 111473315, registered with the Legal Entities’ Register of the Republic of Lithuania
Independent auditor’s report
To the shareholders of AUGA group AB
Report on the audit of the separate and consolidated financial statements
Our opinion
In our opinion, the separate and consolidated financial statements give a true and fair view of the
separate and consolidated financial position of AUGA group AB (the “Company”) and its subsidiaries
(together - the “Group”) as at 31 December 2022, and of the Company’s and of the Group’s separate
and consolidated financial performance and separate and consolidated cash flows for the year then
ended in accordance with International Financial Reporting Standards as adopted by the European
Union.
Our opinion is consistent with our additional report to the Audit Committee dated 17 April 2023.
What we have audited
The Company’s and the Group’s separate and consolidated financial statements comprise:
● the separate and consolidated balance sheets as at 31 December 2022;
● the separate and consolidated statements of profit or loss and other comprehensive income for
the year then ended;
● the separate and consolidated statements of changes in equity for the year then ended;
● the separate and consolidated statements of cash flows for the year then ended; and
● the notes to the separate and consolidated financial statements, which include significant
accounting policies and other explanatory information.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (ISAs). Our
responsibilities under those standards are further described in the Auditor’s responsibilities for the
audit of the financial statements section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Independence
We are independent of the Company and the Group in accordance with the International Code of
Ethics for Professional Accountants (including International Independence Standards) issued by the
International Ethics Standards Board for Accountants (IESBA Code) and the Law of the Republic of
Lithuania on the Audit of Financial Statements that are relevant to our audit of the separate and
consolidated financial statements in the Republic of Lithuania. We have fulfilled our other ethical
responsibilities in accordance with the IESBA Code and the Law of the Republic of Lithuania on the
Audit of Financial Statements.
To the best of our knowledge and belief, we declare that non-audit services that we have provided to
the Company and the Group are in accordance with the applicable law and regulations in the Republic
of Lithuania and that we have not provided non-audit services that are prohibited under Article 5(1) of
Regulation (EU) No 537/2014 considering the exemptions of Regulation (EU) No 537/2014 endorsed
in the Law of the Republic of Lithuania on the Audit of Financial Statements.
We have not provided to the Company and the Group any non-audit services, in the period from 1
January 2022 to 31 December 2022.
Our audit approach
Overview
● Overall Group and Company materiality: EUR 801 thousand and
EUR 686 thousand, respectively
● We conducted our audit work at 4 significant components, all located
in Lithuania
● Our audit addressed substantially all of the Group’s revenues and
assets.
● Valuation of land
● Valuation of biological assets and agriculture produce
● Lease term determination and application of
discount rate
As part of designing our audit, we determined materiality and assessed the risks of material
misstatement in the separate and consolidated financial statements (together “the financial
statements”). In particular, we considered where management made subjective judgements; for
example, in respect of significant accounting estimates that involved making assumptions and
considering future events that are inherently uncertain. As in all of our audits, we also addressed the
risk of management override of internal controls, including, among other matters, consideration of
whether there was evidence of bias that represented a risk of material misstatement due to fraud.
Materiality
The scope of our audit was influenced by our application of materiality. An audit is designed to obtain
reasonable assurance whether the financial statements are free from material misstatement.
Misstatements may arise due to fraud or error. They are considered material if individually or in
aggregate, they could reasonably be expected to influence the economic decisions of users taken on
the basis of the financial statements.
Based on our professional judgement, we determined certain quantitative thresholds for materiality,
including the overall Company and Group 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 scope
of our audit and the nature, timing and extent of our audit procedures and to evaluate the effect of
misstatements, if any, both individually and in aggregate on the financial statements as a whole.
Overall Company materiality
EUR 686 thousand (2021: EUR 700 thousand)
Overall Group materiality
EUR 801 thousand (2021: EUR 700 thousand)
How we determined it
Overall Company materiality was determined as 0.8% of the
Company’s net assets. Overall Group materiality was
determined as 1.0% of the Group’s total revenue.
Materiality
Group
scoping
Key audit
matters
Rationale for the materiality
benchmark applied
We chose net assets as the benchmark for overall Company
materiality because, in our view, it is the most appropriate
measure for the Company as a holding company with no
external income.
We chose total revenue as the benchmark for overall Group
materiality because total revenue is one of the Group’s key
performance indicators analysed by the management and
communicated to the shareholders. Total revenue is also a
more stable measure compared to profitability ratio, as it
does not depend directly on such external factors as the EU’s
farming subsidy policy.
We chose to apply 0.8% of net assets to overall Company
materiality and 1.0% of total revenue to overall Group
materiality, which are within the range of acceptable
quantitative materiality thresholds for these benchmarks.
We agreed with the Audit Committee that we would report to them misstatements identified during our
audit above EUR 35 thousand, as well as misstatements below that amount that, in our view,
warranted reporting for qualitative reasons.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in
our audit of the financial statements of the current period. These matters were addressed in the
context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we
do not provide a separate opinion on these matters.
Key audit matter
How our audit addressed the key audit matter
Valuation of biological assets and agricultural
produce
(Refer to Note 2 Summary of significant
accounting policies, Note 4 Critical accounting
estimates and assumptions, Note 9 Biological
assets and Note 10 Inventory)
The carrying amount of biological assets as at
31 December 2022 was EUR 30.4 million (31
December 2021: EUR 29.4 million) and gain
from change in fair value recognised in 2022
amounted to EUR 2.7 million (2021 fair value
loss amounted to: EUR 5.9 million).
We focused on this area because it involves
significant management’s assumptions and
judgements in determining the fair value of
biological assets and agricultural produce.
Biological assets consist of livestock (including
dairy cows, heifers and other livestock), crops
and mycelium cultivation seedbed growing in
the Group’s farms in Lithuania.
We obtained the valuation of livestock of the
Group. We traced the input data to the
independent market information and tested the
key assumptions used in calculating the fair value
of livestock.
We also involved our valuation expert to assist us
with the assessment of the discount rates used by
the management in the discounted cash flows
model.
We tested the internal control procedures over the
Group’s purchase process and allocation of costs
to crops and mycelium cultivation seedbed.
For the assessment of the fair value of crops, we
reviewed the expected crop yields and compared
them to historical information on actual yields, as
well as traced the expected sales prices of crops
to the available market information.
We also performed a detailed testing over the
calculation of the fair value of grain at the point of
Livestock is measured at the fair value less
estimated point-of-sale costs. The fair value of
milk cows is determined using the future cash
flow forecast model, including the expected
cash flows from milk sales and subsequent
sale of cows. The fair value of heifers and bulls
is determined using the average expected
sales price per kg of meat of heifers or bulls,
and based on the market research performed
by the management.
The fair values of winter crops are based on
the expected harvested yield less costs to sell.
Agricultural produce is measured at the fair
value at its point of harvest, which reflects the
expected market price of the produce,
eliminating the costs to sell.
The cost of mycelium cultivation seedbed and
other crops approximated the fair value as at
31 December 2022 as only little biological
transformation took place. The cost was
estimated by allocating all direct and directly
attributable indirect costs to the newly seeded
other crops and newly cultivated mycelium
seedbed.
harvest, by comparing the available market
information about the crop prices at the time of
harvest and the sales prices agreed with
customers, where available, to the prices used by
the management.
We performed a detailed testing of the cost of
mycelium cultivation seedbed at the balance
sheet date.
Lease term determination and application of
discount rate
(Refer to Note 2 Summary of significant
accounting policies, Note 4 Critical accounting
estimates and assumptions, Note 6 Right-of-
use assets and Note 17 Lease liabilities)
The Group has accounted for a right-of-use
assets of EUR 48.3 million (EUR 47.2 million
as at 31 December 2021) and lease liabilities
of EUR 47.2 million as at 31 December 2022
(EUR 45.5 million as at 31 December 2021).
We paid attention to this area during our audit,
as the balances recorded were material, the
process to identify and process all relevant
data associated with the leases was complex
and the measurement of the right-of-use asset
and lease liability was based on assumptions
such as discount rates and the lease terms,
including termination and extension options.
Our audit procedures included analysis of the
completeness and accuracy of the new, modified
or remeasured lease contracts identified and
recorded in the lease accounting system during
2022 and calculation of the right-of-use assets
and lease liability:
• We obtained an understanding of internal
processes around identification of leases and
obtained the related lease contracts data;
• We performed procedures to assess the
process of lease term determination and
management’s assessment whether options
to extend a lease are reasonably certain to be
exercised, by reviewing the contractual terms
and other relevant documents;
• We challenged management assumptions,
specifically on the assumptions used to
determine the discount rates;
• We assessed the completeness and accuracy
of input data used in the calculation by
reconciling inputs to the lease contracts and
tested them on a sample basis;
• For the sample of lease contracts selected,
we checked whether the accounting treatment
of leases is consistent with the definitions of
IFRS 16, including factors such as lease term,
discount rate and measurements principles;
• We recalculated on a sample basis the right-
of-use asset and lease liability for selected
lease contracts and verified the mathematical
accuracy of the calculation;
• We recalculated for the same sample lease
payments, interest and amortisation expenses
recognised during the period;
• We also read the disclosures in the
consolidated financial statements regarding
right-of-use assets and lease liabilities.
How we tailored our Group audit scope
We tailored the scope of our audit in order to perform sufficient work to enable us to provide an
opinion on the financial statements as a whole, taking into account the structure of the Group, the
accounting processes and controls, and the industry in which the Group operates.
The Group comprises the Company and 139 subsidiaries operating in Lithuania (refer to Note 1
General information in the financial statements). A full-scope audit was performed by PwC Lithuania
for the following significant components:
• AUGA group AB
• Baltic Champs UAB
• Auga Grūduva UAB
• Grain LT UAB
For other entities of the Group, we carried out audit work on the selected balances and transactions,
which were assessed by us as material from the Group audit perspective.
Reporting on other information including the consolidated annual report
Management is responsible for the other information. The other information comprises the
consolidated annual report, including the corporate governance report, the remuneration report and
the social responsibility report (Sustainability report) (but does not include the financial statements and
our auditor’s report thereon).
Our opinion on the financial statements does not cover the other information, including the
consolidated annual report.
In connection with our audit of the financial statements, our responsibility is to read the other
information identified above and, in doing so, consider whether the other information is materially
inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears
to be materially misstated.
With respect to the consolidated annual report, including the corporate governance report and the
remuneration report, we considered whether the consolidated annual report, including the corporate
governance report and the remuneration report, includes the disclosures required by the Law of the
Republic of Lithuania on Consolidated Reporting by Groups of Undertakings, the Law of the Republic
of Lithuania on Reporting by Undertakings.
Based on the work undertaken in the course of our audit, in our opinion:
● the information given in the consolidated annual report, including the corporate governance report
and the remuneration report, for the financial year for which the financial statements are prepared,
is consistent with the financial statements; and
● the consolidated annual report, including the corporate governance report and the remuneration
report, has been prepared in accordance with the Law of the Republic of Lithuania on
Consolidated Reporting by Groups of Undertakings and the Law of the Republic of Lithuania on
Reporting by Undertakings.
The Company and the Group presented the social responsibility report (Sustainability report) as a part
of the consolidated annual report.
In addition, in light of the knowledge and understanding of the Company and the Group and their
environment obtained in the course of the audit, we are required to report if we have identified material
misstatements in the consolidated annual report which we obtained prior to the date of this auditor’s
report. We have nothing to report in this regard.
Responsibilities of management and those charged with governance for the financial
statements
Management is responsible for the preparation of the financial statements that give a true and fair
view in accordance with International Financial Reporting Standards as adopted by the European
Union, and for such internal control as management determines is necessary to enable the
preparation of financial statements that are free from material misstatement, whether due to fraud or
error.
In preparing the financial statements, management is responsible for assessing the Company’s and
the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless management either intends to
liquidate the Company and the Group or to cease operations, or has no realistic alternative but to do
so.
Those charged with governance are responsible for overseeing the Company’s and the Group’s
financial reporting process.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole
are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that
an audit conducted in accordance with ISAs will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken on
the basis of these financial statements.
As part of an audit in accordance with ISAs, we exercise professional judgment and maintain
professional scepticism throughout the audit. We also:
● Identify and assess the risks of material misstatement of the financial statements, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from fraud is higher than for one resulting from error,
as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override
of internal control.
● Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company’s and the Group’s internal control.
● Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
● Conclude on the appropriateness of management’s use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to events
or conditions that may cast significant doubt on the Company’s and the Group’s ability to continue
as a going concern. If we conclude that a material uncertainty exists, we are required to draw
attention in our auditor’s report to the related disclosures in the financial statements or, if such
disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit
evidence obtained up to the date of our auditor’s report. However, future events or conditions may
cause the Company and the Group to cease to continue as a going concern.
● Evaluate the overall presentation, structure and content of the financial statements, including the
disclosures, and whether the financial statements represent the underlying transactions and
events in a manner that achieves fair presentation.
● Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Group to express an opinion on the consolidated financial
statements. We are responsible for the direction, supervision and performance of the Group audit.
We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned
scope and timing of the audit and significant audit findings, including any significant deficiencies in
internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant
ethical requirements regarding independence, and have communicated with them all relationships and
other matters that may reasonably be thought to bear on our independence, and where applicable,
actions taken to eliminate threats or safeguards applied.
From the matters communicated with those charged with governance, we determine those matters
that were of most significance in the audit of the financial statements of the current period and are
therefore the key audit matters. We describe these matters in our auditor’s report unless law or
regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we
determine that a matter should not be communicated in our report because the adverse
consequences of doing so would reasonably be expected to outweigh the public interest benefits of
such communication.
Report on other legal and regulatory requirements
Report on the compliance of the format of the consolidated financial statements with the
requirements of the European Single Electronic Reporting Format
We have been engaged based on the amendment to our audit agreement by the management of the
Company to conduct a reasonable assurance engagement for the verification of compliance with the
applicable requirements of the European single electronic reporting format of the Group’s consolidated
financial statements, including the consolidated annual report, for the year ended 31 December 2022
(the “Single Electronic Reporting Format of the consolidated financial statements”).
Description of a subject matter and applicable criteria
The Single Electronic Reporting Format of the consolidated financial statements has been applied by
the management of the Company to comply with the requirements of art. 3 and 4 of the Commission
Delegated Regulation (EU) 2019/815 of 17 December 2018 supplementing Directive 2004/109/EC of
the European Parliament and of the Council with regard to regulatory technical standards on the
specification of a single electronic reporting format (the “ESEF Regulation”). The applicable
requirements regarding the Single Electronic Reporting Format of the consolidated financial
statements are contained in the ESEF Regulation.
The requirements described in the preceding sentence determine the basis for application of the
Single Electronic Reporting Format of the consolidated financial statements and, in our view,
constitute appropriate criteria to form a reasonable assurance conclusion.
Responsibility of the management and those charged with governance
The management of the Company is responsible for the application of the Single Electronic Reporting
Format of the consolidated financial statements that complies with the requirements of the ESEF
Regulation.
This responsibility includes the selection and application of appropriate markups in iXBRL using ESEF
taxonomy and designing, implementing and maintaining internal controls relevant for the preparation
of the Single Electronic Reporting Format of the consolidated financial statements which is free from
material non-compliance with the requirements of the ESEF Regulation.
Those charged with governance are responsible for overseeing the financial reporting process, which
should also be understood as the preparation of financial statements in accordance with the format
resulting from the ESEF Regulation.
Our responsibility
Our responsibility was to express a reasonable assurance conclusion whether the Single Electronic
Reporting Format of the consolidated financial statements complies, in all material aspects, with the
ESEF Regulation.
We conducted our engagement in accordance with International Standard on Assurance
Engagements 3000 (Revised) ‘Assurance Engagements other than Audits and Reviews of Historical
Financial Information’ (“ISAE 3000 (R)”). This standard requires that we comply with ethical
requirements, plan and perform procedures to obtain reasonable assurance whether the Single
Electronic Reporting Format of the consolidated financial statements complies, in all material aspects,
with the applicable requirements.
Reasonable assurance is a high level of assurance, but it does not guarantee that the service
performed in accordance ISAE 3000 (R) will always detect the existing material misstatement
(significant non-compliance with the requirements).
Summary of the work performed
Our planned and performed procedures were aimed at obtaining reasonable assurance that the Single
Electronic Reporting Format of the consolidated financial statements was applied, in all material
aspects, in accordance with the applicable requirements and such application is free from material
errors or omissions. Our procedures included in particular:
• obtaining an understanding of the internal control system and processes relevant to the
application of the Single Electronic Reporting Format of the consolidated financial statements,
including the preparation of the XHTML format and marking up the consolidated financial
statements;
• verification whether the XHTML format was applied properly;
• evaluating the completeness of marking up the consolidated financial statements using the iXBRL
markup language according to the requirements of the implementation of single electronic format
as described in the ESEF Regulation;
• evaluating the appropriateness of the Company’s and the Group’s' use of XBRL markups selected
from the ESEF taxonomy and the creation of extension markups where no suitable element in the
ESEF taxonomy has been identified; and
• evaluating the appropriateness of anchoring of the extension elements to the ESEF taxonomy.
We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our
conclusion.
Conclusion
In our opinion, the Single Electronic Reporting Format of the consolidated financial statements for the
year ended 31 December 2022 complies, in all material aspects, with the ESEF Regulation.
Report on the compliance of the format of the separate financial statements with the
requirements of the European Single Electronic Reporting Format
The European single electronic reporting format has been applied by the management of the
Company to the Company’s separate financial statements to comply with the requirements of Article 3
of Commission Delegated Regulation (EU) 2019/815 of 17 December 2018 supplementing Directive
2004/109/EC of the European Parliament and of the Council with regard to regulatory technical
standards on the specification of a single electronic reporting format (the “ESEF Regulation”). These
requirements specify the Company’s obligation to prepare its separate financial statements in a
XHTML format. We confirm that the European single electronic reporting format of the separate
financial statements for the year ended 31 December 2022 complies with the ESEF Regulation in this
respect.
Appointment
We were first appointed as auditors of the Company and the Group on 16 May 2016. Our appointment
has been renewed annually by shareholder resolution representing a total period of uninterrupted
engagement appointment of 7 years.
The key audit partner on the audit resulting in this independent auditor’s report is Rasa Radzevičienė.
On behalf of PricewaterhouseCoopers UAB
Rasa Radzevičienė
Partner
Auditor's Certificate No.000377
Vilnius, Republic of Lithuania
17 April 2023
The auditor's electronic signature is used herein to sign only the Independent Auditor's Report
CONSOLIDATED ANNUAL REPORT 2022
148
CONTENTS >
Corporate governance reporting form for the year ended 31 december
2022
The public limited liability company AUGA Group, AB (hereinafter referred to as the “Company”), acting in compliance with Article
12 (3) of the Law of the Republic of Lithuania on Securities and paragraph 24.5 of the Listing Rules of AB Nasdaq Vilnius, hereby
discloses how it complies with the Corporate Governance Code for the Companies listed on Nasdaq Vilnius as well as its specific
provisions or recommendations. In case of non-compliance with this Code or some of its provisions or recommendations, the
specific provisions or recommendations that are not complied with must be indicated and the reasons for such non-compliance
must be specified. In addition, other explanatory information indicated in this form must be provided.
Summary of the Corporate Governance Report:
According to the Articles of Association of Company the governing bodies of the Company are the General Shareholder’s Meeting,
the Board and CEO. The Company does not have a supervisory board, but supervision functions set by the Law on Companies
of the Republic of Lithuania are performed by the Board, comprised from five independent members: Dalius Misiūnas, Andrej
Cyba, Michaela Tod, Murray Steele and Tomas Krakauskas.
There is one committee in the Company - Audit Committee. The Audit Committee is an advisory body of the Board in matters
related to accounting, audit, risk management, internal control and internal audit, supervision, budgeting and compliance. The
Audit Committee consists of 3 independent members of the Board. The Company does not have a Nomination and Remuneration
Committees as its functions are performed by the Board.
More information about the corporate governance, shareholders’ rights, activities of the Board and the Committees are provided
in the Consolidated Annual Report of Company for the year ended 31 December 2022 and in structured table of this Corporate
Governance report.
Structured table for disclosure:
PRINCIPLES/ RECOMMENDATIONS
YES/NO/NOT
APPLICABLE
COMMENTARY
Principle 1: General meeting of shareholders, equitable treatment of shareholders, and shareholders’ rights
The corporate governance framework should ensure the equitable treatment of all shareholders. The corporate
governance framework should protect the rights of shareholders.
1.1. All shareholders should be provided with access to
the information and/or documents established in the
legal acts on equal terms. All shareholders should be
furnished with equal opportunity to participate in the
decision-making process where significant corporate
matters are discussed.
YES
The Company's documents and statutory
information are publicly available on the Company's
website (in Lithuanian and English).
All shareholders have equal rights to participate in
General Shareholders' Meetings and to take
decisions that are important to the Company.
1.2. It is recommended that the company’s capital should
consist only of the shares that grant the same rights to
voting, ownership, dividend and other rights to all of their
holders.
YES
The ordinary registered shares comprising the
Company's share capital confer the same rights on
all shareholders.
1.3. It is recommended that investors should have
access to the information concerning the rights attached
to the shares of the new issue or those issued earlier in
advance, i.e. before they purchase shares.
YES
The Company publicly discloses information about
the rights attached to newly issued shares. Investors
can find out about the rights attached to the shares
already issued in the Articles of Association
published on the Company's website.
1.4 Exclusive transactions that are particularly important
to the company, such as transfer of all or almost all
assets of the company which in principle would mean the
transfer of the company, should be subject to approval
of the general meeting of shareholders.
YES
Clause 6.4.25 of the Company's Articles of
Association stipulates that the any decision on
exceptional transactions of major importance, such
as the transfer of all or substantially all of the
Company's assets, which would effectively entail a
disposal of the Company, is within the exclusive
competence of the General Meeting of
Shareholders.
CONSOLIDATED ANNUAL REPORT 2022
149
CONTENTS >
1.5 Procedures for convening and conducting a general
meeting of shareholders should provide shareholders
with equal opportunities to participate in the general
meeting of shareholders and should not prejudice the
rights and interests of shareholders. The chosen venue,
date and time of the general meeting of shareholders
should not prevent active participation of shareholders at
the general meeting. In the notice of the general meeting
of shareholders being convened, the company should
specify the last day on which the proposed draft
decisions should be submitted at the latest.
YES
The venue of the General Meeting of Shareholders
is in Vilnius, usually in the conference room of the
business center where the Company's registered
office is located.
The procedures for convening and conducting the
General Meeting of Shareholders comply with the
provisions of the law and provide shareholders with
equal opportunities to participate in the meetings
and to have early access to draft decisions and other
materials necessary for decision-making.
1.6 With a view to ensure the right of shareholders living
abroad to access the information, it is recommended,
where possible, that documents prepared for the general
meeting of shareholders in advance should be
announced publicly not only in Lithuanian language but
also in English and/or other foreign languages in
advance. It is recommended that the minutes of the
general meeting of shareholders after the signing thereof
and/or adopted decisions should be made available
publicly not only in Lithuanian language but also in
English and/or other foreign languages. It is
recommended that this information should be placed on
the website of the company. Such documents may be
published to the extent that their public disclosure is not
detrimental to the company or the company’s
commercial secrets are not revealed.
YES
All information for shareholders and investors is
published on the Company's website and in the
information system of the Nasdaq Vilnius Stock
Exchange in Lithuanian and English.
1.7 Shareholders who are entitled to vote should be
furnished with the opportunity to vote at the general
meeting of shareholders both in person and in absentia.
Shareholders should not be prevented from voting in
writing in advance by completing the general voting
ballot.
YES
The shareholders of the Company may exercise
their right to attend the General Meeting of
Shareholders either in person or through a duly
authorized representative. They can also vote in
advance in writing by filling in a general ballot paper.
1.8 With a view to increasing the shareholders’
opportunities to participate effectively at general
meetings of shareholders, it is recommended that
companies should apply modern technologies on a wider
scale and thus provide shareholders with the conditions
to participate and vote in general meetings of
shareholders via electronic means of communication. In
such cases the security of transmitted information must
be ensured and it must be possible to identify the
participating and voting person.
NO
The Company does not comply with this
Recommendation as the Company is currently
unable to ensure the security of the information
transmitted and to positively establish the identity of
the person participating and voting. In the future, the
Company will consider the possibility to implement
this Recommendation.
1.9 It is recommended that the notice on the draft
decisions of the general meeting of shareholders being
convened should specify new candidatures of members
of the collegial body, their proposed remuneration and
the proposed audit company if these issues are included
into the agenda of the general meeting of shareholders.
Where it is proposed to elect a new member of the
collegial body, it is recommended that the information
about his/her educational background, work experience
and other managerial positions held (or proposed)
should be provided.
YES
The draft resolutions of the General Meeting of
Shareholders, should these questions be included
on the agenda of the General Meeting of
Shareholders, disclose the proposed nominations of
new members of the Board, the proposed
remuneration of the Board members, and the
proposed appointment of an audit firm.
The candidate questionnaires, which are made
public and included in the shareholders' meeting
materials, include information on the candidates'
education, work experience and other positions held.
1.10 Members of the company’s collegial management
body, heads of the administration or other competent
persons related to the company who can provide
information related to the agenda of the general meeting
of shareholders should take part in the general meeting
NOT
APPLICABLE
During the Company's 2022.04.29 general meeting
of shareholders, all the Company's shareholders
expressed their will by submitting general ballots in
advance and none of the shareholders attended the
live meeting of shareholders, therefore the Company
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of shareholders. Proposed candidates to member of the
collegial body should also participate in the general
meeting of shareholders in case the election of new
members is included into the agenda of the general
meeting of shareholders.
had no opportunity to implement this
recommendation.
Principle 2: Supervisory board
2.1. Functions and liability of the supervisory board
The supervisory board of the company should ensure representation of the interests of the company and its
shareholders, accountability of this body to the shareholders and objective monitoring of the company’s operations and
its management bodies as well as constantly provide recommendations to the management bodies of the company.
The supervisory board should ensure the integrity and transparency of the company’s financial accounting and control
system.
2.1.1 Members of the supervisory board should act in
good faith, with care and responsibility for the benefit and
in the interests of the company and its shareholders and
represent their interests, having regard to the interests of
employees and public welfare.
NOT
APPLICABLE
The Company does not have a supervisory board.
2.1.2 Where decisions of the supervisory board may
have a different effect on the interests of the company’s
shareholders, the supervisory board should treat all
shareholders impartially and fairly. It should ensure that
shareholders are properly informed about the company’s
strategy, risk management and control, and resolution of
conflicts of interest.
NOT
APPLICABLE
2.1.3 The supervisory board should be impartial in
passing decisions that are significant for the company’s
operations and strategy. Members of the supervisory
board should act and pass decisions without an external
influence from the persons who elected them.
NOT
APPLICABLE
2.1.4 Members of the supervisory board should clearly
voice their objections in case they believe that a decision
of the supervisory board is against the interests of the
company. Independent members of the supervisory
board should: a) maintain independence of their analysis
and decision-making; b) not seek or accept any
unjustified privileges that might compromise their
independence.
NOT
APPLICABLE
2.1.5 The supervisory board should oversee that the
company’s tax planning strategies are designed and
implemented in accordance with the legal acts in order
to avoid faulty practice that is not related to the long-term
interests of the company and its shareholders, which
may give rise to reputational, legal or other risks.
NOT
APPLICABLE
2.1.6 The company should ensure that the supervisory
board is provided with sufficient resources (including
financial ones) to discharge their duties, including the
right to obtain all the necessary information or to seek
independent professional advice from external legal,
accounting or other experts on matters pertaining to the
competence of the supervisory board and its
committees.
NOT
APPLICABLE
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2.2. Formation of the supervisory board
The procedure of the formation of the supervisory board should ensure proper resolution of conflicts of interest and
effective and fair corporate governance
2.2.1 The members of the supervisory board elected by
the general meeting of shareholders should collectively
ensure the diversity of qualifications, professional
experience and competences and seek for gender
equality. With a view to maintain a proper balance
between the qualifications of the members of the
supervisory board, it should be ensured that members of
the supervisory board, as a whole, should have diverse
knowledge, opinions and experience to duly perform
their tasks.
NOT
APPLICABLE
2.2.2 Members of the supervisory board should be
appointed for a specific term, subject to individual re-
election for a new term in office in order to ensure
necessary development of professional experience.
NOT
APPLICABLE
2.2.3 Chair of the supervisory board should be a person
whose current or past positions constituted no obstacle
to carry out impartial activities. A former manager or
management board member of the company should not
be immediately appointed as chair of the supervisory
board either. Where the company decides to depart from
these recommendations, it should provide information on
the measures taken to ensure impartiality of the
supervision.
NOT
APPLICABLE
2.2.4 Each member should devote sufficient time and
attention to perform his duties as a member of the
supervisory board. Each member of the supervisory
board should undertake to limit his other professional
obligations (particularly the managing positions in other
companies) so that they would not interfere with the
proper performance of the duties of a member of the
supervisory board. Should a member of the supervisory
board attend less than a half of the meetings of the
supervisory board throughout the financial year of the
company, the shareholders of the company should be
notified thereof.
NOT
APPLICABLE
2.2.5 When it is proposed to appoint a member of the
supervisory board, it should be announced which
members of the supervisory board are deemed to be
independent. The supervisory board may decide that,
despite the fact that a particular member meets all the
criteria of independence, he/she cannot be considered
independent due to special personal or company-related
circumstances.
NOT
APPLICABLE
2.2.6 The amount of remuneration to members of the
supervisory board for their activity and participation in
meetings of the supervisory board should be approved
by the general meeting of shareholders.
NOT
APPLICABLE
2.2.7 Every year the supervisory board should carry out
an assessment of its activities. It should include
evaluation of the structure of the supervisory board, its
work organization and ability to act as a group,
evaluation of the competence and work efficiency of
each member of the supervisory board, and evaluation
whether the supervisory board has achieved its
NOT
APPLICABLE
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objectives. The supervisory board should, at least once
a year, make public respective information about its
internal structure and working procedures.
Principle 3: Management Board
3.1. Functions and liability of the management board
The management board should ensure the implementation of the company’s strategy and good corporate governance
with due regard to the interests of its shareholders, employees and other interest groups.
3.1.1 The management board should ensure the
implementation of the company’s strategy approved by
the supervisory board if the latter has been formed at the
company. In such cases where the supervisory board is
not formed, the management board is also responsible
for the approval of the company’s strategy.
YES
In April 2020, the Board of the Company approved
the Company's strategy, which is publicly available
on the Company's website in Lithuanian and English.
In April 2021 and 2022, the Board of the Company
has submitted reports on the implementation of the
Company's strategy together with the materials of
the General Meeting.
3.1.2. As a collegial management body of the company,
the management board performs the functions assigned
to it by the Law and in the articles of association of the
company, and in such cases where the supervisory
board is not formed in the company, it performs inter alia
the supervisory functions established in the Law. By
performing the functions assigned to it, the management
board should take into account the needs of the
company’s shareholders, employees and other interest
groups by respectively striving to achieve sustainable
business development.
YES
The Board, as the collegial governing body of the
Company, performs the functions assigned to it by
the law and the Articles of Association of the
Company.
In accordance with the requirements of the Law on
Companies of the Republic of Lithuania, the Board,
among other functions, also performs supervisory
functions. Board meetings ensure effective oversight
of the company's activities. The duties of this
collegial body are in line with those laid down by
Lithuanian law as required for an issuer whose
securities are traded on a regulated market.
In carrying out its functions, the Board takes into
account the needs of the Company, its shareholders,
employees and other stakeholders, and has as its
primary objective the creation of a sustainable
business.
3.1.3 The management board should ensure compliance
with the laws and the internal policy of the company
applicable to the company or a group of companies to
which this company belongs. It should also establish the
respective risk management and control measures
aimed at ensuring regular and direct liability of
managers.
YES
The Company's internal policies are approved by the
Company's Board, and their implementation is
discussed at Board meetings where the Company's
Board hears reports on the implementation of these
policies.
The Company has adopted the following policies:
○ Code of Business Ethics
○ Environmental Policy
○ Policy on Human Rights, Non-
Discrimination, Child and Forced Labour
○ Animal Welfare Policy
○ Suppliers' Code of Conduct
○ Policy on Prevention on Corruption and
Conflicts of Interest
○ Occupational Safety and Health Policy
The Company establishes risk management and
control measures to ensure regular and direct
accountability of the management. One such
measure is the appointment of the Company's
internal auditor, who is appointed by the Company's
Board and reports directly to the Company's Audit
Committee.
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3.1.4 Moreover, the management board should ensure
that the measures included into the OECD Good
Practice Guidance
5
on Internal Controls, Ethics and
Compliance are applied at the company in order to
ensure adherence to the applicable laws, rules and
standards.
YES
Please refer to 3.1.3
3.1.5 When appointing the manager of the company, the
management board should take into account the
appropriate balance between the candidate’s
qualifications, experience and competence.
YES
In appointing the Chief Executive Officer of the
Company, the Board aims to ensure an appropriate
balance of qualifications, experience and
competence.
3.2. Formation of the management board
3.2.1 The members of the management board elected by
the supervisory board or, if the supervisory board is not
formed, by the general meeting of shareholders should
collectively ensure the required diversity of
qualifications, professional experience and
competences and seek for gender equality. With a view
to maintain a proper balance in terms of the current
qualifications possessed by the members of the
management board, it should be ensured that the
members of the management board would have, as a
whole, diverse knowledge, opinions and experience to
duly perform their tasks.
YES,
The members of the Company's Board are elected
by the General Meeting of Shareholders. The
members of the Board nominated and elected by the
General Meeting of Shareholders are qualified and
competent to perform their functions and have many
years of experience in such activities, as evidenced
by the information on Board members’ education,
experience and other positions held, which is
publicly available on the Company’s website.
3.2.2 Names and surnames of the candidates to become
members of the management board, information on their
educational background, qualifications, professional
experience, current positions, other important
professional obligations and potential conflicts of interest
should be disclosed without violating the requirements of
the legal acts regulating the handling of personal data at
the meeting of the supervisory board in which the
management board or individual members of the
management board are elected. In the event that the
supervisory board is not formed, the information
specified in this paragraph should be submitted to the
general meeting of shareholders. The management
board should, on yearly basis, collect data provided in
this paragraph on its members and disclose it in the
company’s annual report.
YES
The questionnaires of candidates for the Board,
containing information about their education,
qualifications, professional experience, positions
held and involvement in other companies, are
presented together with the draft resolutions to the
General Shareholders' Meeting and are published as
a material event notice so that shareholders can
have access to this information before the General
Meeting.
These details about the current members of the
Board are also provided in the Company's Annual
Report each year.
3.2.3 All new members of the management board should
be familiarized with their duties and the structure and
operations of the company.
YES
Upon election, all new members of the Board are
briefed on the Company's activities and their main
responsibilities, as well as on the legal requirements.
Each year, a tour of the subsidiaries is organized for
Board members to enable the Board to gain a better
insight into the Company's operations.
Board members are also regularly informed about
changes in legislation and other developments that
may have an impact on the company's operations.
3.2.4 Members of the management board should be
appointed for a specific term, subject to individual re-
election for a new term in office in order to ensure
necessary development of professional experience and
sufficiently frequent reconfirmation of their status.
YES
All Board members are appointed for a fixed term of
two years, with the possibility of individual re-election
for another term.
5
Link to the OECD Good Practice Guidance on Internal Controls, Ethics and Compliance: https://www.oecd.org/daf/anti-bribery/44884389.pdf
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3.2.5 Chair of the management board should be a
person whose current or past positions constitute no
obstacle to carry out impartial activity. Where the
supervisory board is not formed, the former manager of
the company should not be immediately appointed as
chair of the management board. When a company
decides to depart from these recommendations, it should
furnish information on the measures it has taken to
ensure the impartiality of supervision.
YES
The Chairman of the Board is an independent
member of the Board who has no connection with
the Company or its controlling shareholder.
3.2.6 Each member should devote sufficient time and
attention to perform his duties as a member of the
management board. Should a member of the
management board attend less than a half of the
meetings of the management board throughout the
financial year of the company, the supervisory board of
the company or, if the supervisory board is not formed at
the company, the general meeting of shareholders
should be notified thereof.
YES
Members of the Company's Board actively
participate in Board meetings and devote sufficient
time to their duties as Board members.
3.2.7 In the event that the management board is elected
in the cases established by the Law where the
supervisory board is not formed at the company, and
some of its members will be independent
6
, it should be
announced which members of the management board
are deemed as independent. The management board
may decide that, despite the fact that a particular
member meets all the criteria of independence
established by the Law, he/she cannot be considered
independent due to special personal or company-related
circumstances.
YES
All five members of the Board meet the criteria of
independence provided for in the Law and self-
assessment by the board members.
3.2.8 The general meeting of shareholders of the
company should approve the amount of remuneration to
the members of the management board for their activity
and participation in the meetings of the management
board.
YES
The remuneration of the members of the Board is
approved by the Company's General Meeting of
Shareholders.
3.2.9 The members of the management board should act
in good faith, with care and responsibility for the benefit
and the interests of the company and its shareholders
with due regard to other stakeholders. When adopting
decisions, they should not act in their personal interest;
they should be subject to no-compete agreements and
they should not use the business information or
opportunities related to the company’s operations in
violation of the company’s interests.
YES
To the best of the Company's knowledge, all
members of the Board act for the Company's benefit
and with the Company's interests in good faith, and
not their own personal interests or those of third
parties. To the best of the Company's knowledge,
the members of the Board do not pursue any
personal interests in their decision-making.
The performance contracts concluded with the
members of the Board contain provisions on the
absence of conflict of interest, in addition to
confidentiality and non-competition obligations.
3.2.10 Every year the management board should carry
out an assessment of its activities. It should include
evaluation of the structure of the management board, its
work organization and ability to act as a group,
evaluation of the competence and work efficiency of
each member of the management board, and evaluation
whether the management board has achieved its
objectives. The management board should, at least once
a year, make public respective information about its
internal structure and working procedures in observance
YES
The Board has carried out a self-assessment in
2022. Information on the structure of the Board is
provided in the Company's Annual Report and is
published on the Company's website.
6
For the purposes of this Code, the criteria of independence of the members of the board are interpreted as the criteria of unrelated persons defined in Article 33(7)
of the Law on Companies of the Republic of Lithuania.
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of the legal acts regulating the processing of personal
data.
Principle 4: Rules of procedure of the supervisory board and the management board of the company
The rules of procedure of the supervisory board, if it is formed at the company, and of the management board should
ensure efficient operation and decision-making of these bodies and promote active cooperation between the company’s
management bodies.
4.1 The management board and the supervisory board,
if the latter is formed at the company, should act in close
cooperation in order to attain benefit for the company
and its shareholders. Good corporate governance
requires an open discussion between the management
board and the supervisory board. The management
board should regularly and, where necessary,
immediately inform the supervisory board about any
matters significant for the company that are related to
planning, business development, risk management and
control, and compliance with the obligations at the
company. The management board should inform he
supervisory board about any derogations in its business
development from the previously formulated plans and
objectives by specifying the reasons for this.
NOT
APPLICABLE
The Company does not have a Supervisory Board.
4.2 It is recommended that meetings of the company’s
collegial bodies should be held at the respective
intervals, according to the pre-approved schedule. Each
company is free to decide how often meetings of the
collegial bodies should be convened but it is
recommended that these meetings should be convened
at such intervals that uninterruptable resolution of
essential corporate governance issues would be
ensured. Meetings of the company’s collegial bodies
should be convened at least once per quarter.
YES
Board meetings are convened in accordance with a
pre-agreed schedule and are normally held at least
once a month, or by e-mail when urgent decisions
are required.
4.3 Members of a collegial body should be notified of the
meeting being convened in advance so that they would
have sufficient time for proper preparation for the issues
to be considered at the meeting and a fruitful discussion
could be held and appropriate decisions could be
adopted. Along with the notice of the meeting being
convened all materials relevant to the issues on the
agenda of the meeting should be submitted to the
members of the collegial body. The agenda of the
meeting should not be changed or supplemented during
the meeting, unless all members of the collegial body
present at the meeting agree with such change or
supplement to the agenda, or certain issues that are
important to the company require immediate resolution.
YES
The Board receive a notice about the meeting, the
agenda of the meeting and all materials relating to
the matters to be discussed at the meeting in
advance.
The agenda is not normally changed during a
meeting unless all members of the Board are
present, or unless the absent members have
indicated that they agree to the change of agenda.
4.4 In order to coordinate the activities of the company’s
collegial bodies and ensure effective decision-making
process, the chairs of the company’s collegial
supervision and management bodies should mutually
agree on the dates and agendas of the meetings and
close cooperate in resolving other matters related to
corporate governance. Meetings of the company’s
supervisory board should be open to members of the
management board, particularly in such cases where
issues concerning the removal of the management board
members, their responsibility or remuneration are
discussed.
NOT
APPLICABLE
The Company does not have a Supervisory Board.
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Principle 5: Nomination, remuneration and audit committees
5.1. Purpose and formation of committees
The committees formed at the company should increase the work efficiency of the supervisory board or, where the
supervisory board is not formed, of the management board which performs the supervisory functions by ensuring that
decisions are based on due consideration and help organise its work in such a way that the decisions it takes would be
free of material conflicts of interest.
Committees should exercise independent judgment and integrity when performing their functions and provide the
collegial body with recommendations concerning the decisions of the collegial body. However, the final decision should
be adopted by the collegial body.
5.1.1 Taking due account of the company-related
circumstances and the chosen corporate governance
structure, the supervisory board of the company or, in
cases where the supervisory board is not formed, the
management board which performs the supervisory
functions, establishes committees. It is recommended
that the collegial body should form the nomination,
remuneration and audit committees
7
.
NO
The Company's Board has established an Audit
Committee but has not formed Remuneration or
Nomination Committees.
5.1.2 Companies may decide to set up less than three
committees. In such case companies should explain in
detail why they have chosen the alternative approach,
and how the chosen approach corresponds with the
objectives set for the three different committees.
YES
The Company does not have Nomination and
Remuneration Committees, as the independent
Board partly covers the functions of these
committees in the exercise of its functions.
The Board of the Company appoints the Chief
Executive Officer of the Company, determines
his/her remuneration and makes recommendations
to the Chief Executive Officer of the Company on the
appointment and remuneration of persons in senior
positions.
The Rules of Procedure of the Company's Board
stipulate that committees are to be formed only from
members of the Board, however, in the presence of
a five-member Board, the Company does not
consider it expedient to form more than one
committee.
5.1.3 In the cases established by the legal acts the
functions assigned to the committees formed at
companies may be performed by the collegial body itself.
In such case the provisions of this Code pertaining to the
committees (particularly those related to their role,
operation and transparency) should apply, where
relevant, to the collegial body as a whole.
YES
Please refer to answer 5.1.2.
5.1.4 Committees established by the collegial body
should normally be composed of at least three members.
Subject to the requirements of the legal acts, committees
could be comprised only of two members as well.
Members of each committee should be selected on the
basis of their competences by giving priority to
independent members of the collegial body. The chair of
the management board should not serve as the chair of
committees.
YES
The Audit Committee is composed of three
members, all of whom are independent members of
the Board. The Chairman of the Audit Committee is
not the Chairman of the Board.
7
The legal acts may provide for the obligation to form a respective committee. For example, the Law on the Audit of Financial Statements of the Republic of Lithuania
provides that public-interest entities (including but not limited to public limited liability companies whose securities are traded on a regulated market of the Republic of
Lithuania and/or of any other Member State) are under the obligation to set up an audit committee (the legal acts provide for the exemptions where the functions of
the audit committee may be carried out by the collegial body performing the supervisory functions).
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5.1.5 The authority of each committee formed should be
determined by the collegial body itself. Committees
should perform their duties according to the authority
delegated to them and regularly inform the collegial body
about their activities and performance on a regular basis.
The authority of each committee defining its role and
specifying its rights and duties should be made public at
least once a year (as part of the information disclosed by
the company on its governance structure and practice on
an annual basis). In compliance with the legal acts
regulating the processing of personal data, companies
should also include in their annual reports the statements
of the existing committees on their composition, the
number of meetings and attendance over the year as
well as the main directions of their activities and
performance.
YES
The functions and duties of the Audit Committee are
set out in the Regulation of Audit Committee
approved by the Board of the Company. The Audit
Committee reports regularly to the Board. The above
information on the Audit Committee is published on
the Company's website and in the Annual Report.
5.1.6 With a view to ensure the independence and
impartiality of the committees, the members of the
collegial body who are not members of the committees
should normally have a right to participate in the
meetings of the committee only if invited by the
committee. A committee may invite or request that
certain employees of the company or experts would
participate in the meeting. Chair of each committee
should have the possibility to maintain direct
communication with the shareholders. Cases where
such practice is to be applied should be specified in the
rules regulating the activities of the committee.
YES
The Audit Committee has the right to invite to its
meetings the General Manager of the Company,
member/members of the Management Board, Chief
Financial Officer, employees responsible for finance,
accounting and treasury issues, external auditors
and other persons whose participation is necessary
to discuss the issues provided by the Audit
Committee
5.2. Nomination committee
5.2.1 The key functions of the nomination committee
should be the following:
1) to select candidates to fill vacancies in the
membership of supervisory and management bodies
and the administration and recommend the collegial
body to approve them. The nomination committee should
evaluate the balance of skills, knowledge and experience
in the management body, prepare a description of the
functions and capabilities required to assume a particular
position and assess the time commitment expected;
2) assess, on a regular basis, the structure, size and
composition of the supervisory and management bodies
as well as the skills, knowledge and activity of its
members, and provide the collegial body with
recommendations on how the required changes should
be sought;
3) devote the attention necessary to ensure succession
planning.
NOT
APPLICABLE
5.2.2 When dealing with issues related to members of
the collegial body who have employment relationships
with the company and the heads of the administration,
the manager of the company should be consulted by
granting him/her the right to submit proposals to the
Nomination Committee.
NOT
APPLICABLE
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5.3 Remuneration committee
The main functions of the remuneration committee
should be as follows:
1) submit to the collegial body proposals on the
remuneration policy applied to members of the
supervisory and management bodies and the heads of
the administration for approval. Such policy should
include all forms of remuneration, including the fixed-rate
remuneration, performance-based remuneration,
financial incentive schemes, pension arrangements and
termination payments as well as conditions which would
allow the company to recover the amounts or suspend
the payments by specifying the circumstances under
which it would be expedient to do so;
2) submit to the collegial body proposals regarding
individual remuneration for members of the collegial
bodies and the heads of the administration in order to
ensure that they would be consistent with the company’s
remuneration policy and the evaluation of the
performance of the persons concerned;
3) review, on a regular basis, the remuneration policy
and its implementation.
NOT
APPLICABLE
5.4 Audit committee
5.4.1 The key functions of the audit committee are
defined in the legal acts regulating the activities of the
audit committee
8
.
YES
The core functions and duties of the Company's
Audit Committee are consistent with those set out in
this Recommendation.
5.4.2 All members of the committee should be provided
with detailed information on specific issues of the
company’s accounting system, finances and operations.
The heads of the company’s administration should
inform the audit committee about the methods of
accounting for significant and unusual transactions
where the accounting may be subject to different
approaches.
YES
The Regulation of Audit Committee provides for the
right of Audit Committee members to receive this
information, and the Audit Committee Members are
presented with it.
5.4.3 The audit committee should decide whether the
participation of the chair of the management board, the
manager of the company, the chief finance officer (or
senior employees responsible for finance and
accounting), the internal and external auditors in its
meetings is required (and, if required, when). The
committee should be entitled, when needed, to meet the
relevant persons without members of the management
bodies present.
YES
Please refer to answer 5.1.6.
5.4.4. The audit committee should be informed about the
internal auditor’s work program and should be furnished
with internal audit reports or periodic summaries. The
audit committee should also be informed about the work
program of external auditors and should receive from the
audit firm a report describing all relationships between
the independent audit firm and the company and its
group.
YES
The internal auditor and external auditors present
their work plans and reports to the Audit Committee
on a regular basis.
8
Issues related to the activities of audit committees are regulated by Regulation No. 537/2014 of the European Parliament and the Council of 16 April 2014 on specific
requirements regarding statutory audit of public-interest entities, the Law on the Audit of Financial Statements of the Republic of Lithuania, and the Rules Regulating
the Activities of Audit Committees approved by the Bank of Lithuania.
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5.4.5 The audit committee should examine whether the
company complies with the applicable provisions
regulating the possibility of lodging a complaint or
reporting anonymously his/her suspicions of potential
violations committed at the company and should also
ensure that there is a procedure in place for
proportionate and independent investigation of such
issues and appropriate follow-up actions.
YES
The functions of the Company's Audit Committee, as
set out in the Regulation of Audit Committee
approved by the Board, comply with the indicated
Recommendation.
5.4.6 The audit committee should submit to the
supervisory board or, where the supervisory board is not
formed, to the management board its activity report at
least once in every six months, at the time that annual
and half-yearly reports are approved.
YES
The Committee informs the Company's Board about
its activities and performance results at least once
per six months.
Principle 6: Prevention and disclosure of conflicts of interest
The corporate governance framework should encourage members of the company’s supervisory and management
bodies to avoid conflicts of interest and ensure a transparent and effective mechanism of disclosure of conflicts of
interest related to members of the supervisory and management bodies.
Any member of the company’s supervisory and
management body should avoid a situation where
his/her personal interests are or may be in conflict with
the company’s interests. In case such a situation did
occur, a member of the company’s supervisory or
management body should, within a reasonable period of
time, notify other members of the same body or the body
of the company which elected him/her or the company’s
shareholders of such situation of a conflict of interest,
indicate the nature of interests and, where possible, their
value.
YES
This Recommendation is respected, as ensured by
the provisions of the Board's Rules of Procedure,
which stipulate that Board members must avoid any
conflict of interest and, in the event of such a conflict,
immediately inform the Board of the conflict.
To the best of the Company's knowledge, there have
been no cases of conflicts of interest involving Board
members or CEO to this date.
Principle 7: Remuneration policy of the company
The remuneration policy and the procedure for review and disclosure of such policy established at the company should
prevent potential conflicts of interest and abuse in determining remuneration of members of the collegial bodies and
heads of the administration, in addition it should ensure the publicity and transparency of the company’s remuneration
policy and its long-term strategy.
7.1 The company should approve and post the
remuneration policy on the website of the company; such
policy should be reviewed on a regular basis and be
consistent with the company’s long-term strategy.
YES
The Company's Remuneration Policy was approved
by the General Meeting of Shareholders of 30 April
2020 and is published on the Company's website.
The Remuneration Policy is reviewed by the Board
every four years and is submitted for approval for the
annual general meeting. The Remuneration Policy
may be amended having assessed the economic
situation in the market, the financial results of the
company, changes in the legislation governing the
remuneration payment.
The Company's Remuneration Policy applies to the
CEO and the Board.
The Remuneration policy of the Company is aligned
with the approved strategy of the Company.
7.2 The remuneration policy should include all forms of
remuneration, including the fixed-rate remuneration,
performance-based remuneration, financial incentive
schemes, pension arrangements and termination
payments as well as the conditions specifying the cases
where the company can recover the disbursed amounts
or suspend the payments.
YES
The Company's Remuneration Policy covers all
forms of remuneration applied by the Company.
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7.3 With a view to avoid potential conflicts of interest, the
remuneration policy should provide that members of the
collegial bodies which perform the supervisory functions
should not receive remuneration based on the
company’s performance.
YES
The remuneration of the members of the Board of is
fixed and is approved by the General Meeting of
Shareholders.
7.4 The remuneration policy should provide sufficient
information on the policy regarding termination
payments. Termination payments should not exceed a
fixed amount or a fixed number of annual wages and in
general should not be higher than the non-variable
component of remuneration for two years or the
equivalent thereof. Termination payments should not be
paid if the contract is terminated due to inadequate
performance.
YES
The Remuneration Policy provides sufficient detail
on the CEO's remuneration policy. The severance
pay provisions in the Remuneration Policy are in line
with these Recommendations.
7.5 In the event that the financial incentive scheme is
applied at the company, the remuneration policy should
contain sufficient information about the retention of
shares after the award thereof. Where remuneration is
based on the award of shares, shares should not be
vested at least for three years after the award thereof.
After vesting, members of the collegial bodies and heads
of the administration should retain a certain number of
shares until the end of their term in office, subject to the
need to compensate for any costs related to the
acquisition of shares.
YES
The Company's Remuneration Policy applies only to
the Board and the Chief Executive Officer.
Board members do not participate in any incentive
schemes.
The CEO may be entitled to stock option schemes.
The purpose of share option schemes is to create
long-term value for shareholders and to increase the
motivation and loyalty of the CEO to the company.
The Remuneration Policy for the CEO is in line with
these Recommendations.
7.6 The company should publish information about the
implementation of the remuneration policy on its website,
with a key focus on the remuneration policy in respect of
the collegial bodies and managers in the next and, where
relevant, subsequent financial years. It should also
contain a review of how the remuneration policy was
implemented during the previous financial year. The
information of such nature should not include any details
having a commercial value. Particular attention should
be paid on the major changes in the company’s
remuneration policy, compared to the previous financial
year.
YES
Please refer to answer 7.1.
In accordance with the statutory procedure, the
Company published its Remuneration Report
together with the Annual Report.
7.7 It is recommended that the remuneration policy or
any major change of the policy should be included on the
agenda of the general meeting of shareholders. The
schemes under which members and employees of a
collegial body receive remuneration in shares or share
options should be approved by the general meeting of
shareholders.
YES
The Company's Remuneration Policy is approved
and amended by the General Meeting of
Shareholders.
The Company's rules for granting stock options are
approved and amended by the General Meeting of
Shareholders.
Principle 8: Role of stakeholders in corporate governance
The corporate governance framework should recognize the rights of stakeholders entrenched in the laws or mutual
agreements and encourage active cooperation between companies and stakeholders in creating the company value, jobs
and financial sustainability. In the context of this principle the concept “stakeholders” includes investors, employees,
creditors, suppliers, clients, local community and other persons having certain interests in the company concerned.
8.1 The corporate governance framework should ensure
that the rights and lawful interests of stakeholders are
protected.
YES
The Company respects all the rights of stakeholders
protected by law, which enables stakeholders to
participate in the management of the company. More
information on this in provided in the Company's
Sustainable Business Report.
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8.2 The corporate governance framework should create
conditions for stakeholders to participate in corporate
governance in the manner prescribed by law. Examples
of participation by stakeholders in corporate governance
include the participation of employees or their
representatives in the adoption of decisions that are
important for the company, consultations with
employees or their representatives on corporate
governance and other important matters, participation of
employees in the company’s authorized capital,
involvement of creditors in corporate governance in the
cases of the company’s insolvency, etc.
YES
Senior management staff attend meetings of the
Company's Board. This enables the Company's
employees to have influence on decisions important
for the Company.
The Company conducts employee surveys to better
understand their attitudes towards their work and to
identify strengths and areas for improvement.
The Company also carries out specific community
surveys.
In the cases provided for by law, the Company would
ensure that stakeholders are able to participate in
the management of the Company.
8.3 Where stakeholders participate in the corporate
governance process, they should have access to
relevant information.
YES
When the Company's employees participate in
Board meetings, they are provided with all
necessary information relating to agenda items.
The company continuously educates its employees
on climate change topics, elaborates the main
issues and explains the technologies being
developed, so that every employee can make the
maximum contribution to the changes being
pursued.
8.4 Stakeholders should be provided with the possibility
of reporting confidentially any illegal or unethical
practices to the collegial body performing the supervisory
function.
YES
The Company operates a special e-mail address,
etika@auga.lt, through which any stakeholder can
anonymously report illegal or unethical practices. If
such notifications were received, the Board would be
informed immediately.
Principle 9: Disclosure of information
The corporate governance framework should ensure the timely and accurate disclosure of all material corporate issues,
including the financial situation, operations and governance of the company.
9.1 In accordance with the company’s procedure on
confidential information and commercial secrets and the
legal acts regulating the processing of personal data, the
information publicly disclosed by the company should
include but not be limited to the following:
YES
Please refer to each individual point separately.
9.1.1 operating and financial results of the company;
YES
Disclosed on the Company's website and in Interim
and Annual Reports.
9.1.2 objectives and non-financial information of the
company;
YES
Disclosed quarterly in Interim and Annual Reports.
9.1.3 persons holding a stake in the company or
controlling it directly and/or indirectly and/or together with
related persons as well as the structure of the group of
companies and their relationships by specifying the final
beneficiary;
YES
Disclosed on the Company's website and in Interim
and Annual Reports.
9.1.4 members of the company’s supervisory and
management bodies who are deemed independent, the
manager of the company, the shares or votes held by
them at the company, participation in corporate
governance of other companies, their competence and
remuneration;
YES
Disclosed on the Company's website and in Interim
and Annual Reports.
9.1.5 reports of the existing committees on their
composition, number of meetings and attendance of
members during the last year as well as the main
directions and results of their activities;
YES
Depending on the nature of the information, this
information is disclosed on the Company's website
and/or in Interim and/or Annual Reports.
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9.1.6 potential key risk factors, the company’s risk
management and supervision policy;
YES, except
that The
Company does
not have a risk
management
and monitoring
policy
Risk factors are disclosed in Interim and Annual
Reports.
The Company does not have a risk management
and monitoring policy.
9.1.7 the company’s transactions with related parties;
YES
Disclosed on the Company's website and in Interim
and Annual Reports.
9.1.8 main issues related to employees and other
stakeholders (for instance, human resource policy,
participation of employees in corporate governance,
award of the company’s shares or share options as
incentives, relationships with creditors, suppliers, local
community, etc.);
YES
Disclosed on the Company's website and in Interim
and Annual Reports.
9.1.9 structure and strategy of corporate governance;
YES
Disclosed on the Company's website and in Interim
and Annual Reports.
9.1.10 initiatives and measures of social responsibility
policy and anti-corruption fight, significant current or
planned investment projects.
This list is deemed minimum and companies are
encouraged not to restrict themselves to the disclosure
of information included into this list. This principle of the
Code does not exempt companies from their obligation
to disclose information as provided for in the applicable
legal acts.
YES
Disclosed quarterly in Interim and Annual Reports.
9.2 When disclosing the information specified in
paragraph 9.1.1 of recommendation 9.1, it is
recommended that the company which is a parent
company in respect of other companies should disclose
information about the consolidated results of the whole
group of companies.
YES
Information is disclosed about the consolidated
results of the whole group of companies
9.3 When disclosing the information specified in
paragraph 9.1.4 of recommendation 9.1, it is
recommended that the information on the professional
experience and qualifications of members of the
company’s supervisory and management bodies and the
manager of the company as well as potential conflicts of
interest which could affect their decisions should be
provided. It is further recommended that the
remuneration or other income of members of the
company’s supervisory and management bodies and the
manager of the company should be disclosed, as
provided for in greater detail in Principle 7.
YES
Information is disclosed.
9.4 Information should be disclosed in such manner that
no shareholders or investors are discriminated in terms
of the method of receipt and scope of information.
Information should be disclosed to all parties concerned
at the same time.
YES
The Company provides information to shareholders,
investors and stock exchanges to the same extent
and simultaneously in the Lithuanian and English
languages and makes it available to the public in
both Lithuanian and English on its website. It is also
publicly announced in the Nasdaq Vilnius stock
exchange system in Lithuanian and English
Principle 10: Selection of the company’s audit firm
The company’s audit firm selection mechanism should ensure the independence of the report and opinion of the audit
firm.
10.1 With a view to obtain an objective opinion on the
company’s financial condition and financial results, the
YES
An independent audit firm audits the consolidated
set of annual financial statements of the Company
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company’s annual financial statements and the financial
information provided in its annual report should be
audited by an independent audit firm.
and its group of companies in accordance with the
International Financial Reporting Standards
applicable in the European Union.
The audit firm also conducts a review of the Annual
Report.
10.2 It is recommended that the audit firm would be
proposed to the general meeting of shareholders by the
supervisory board or, if the supervisory board is not
formed at the company, by the management board of the
company.
YES
The nomination of the audit firm is proposed to the
General Meeting of Shareholders by the Board of the
Company.
10.3 In the event that the audit firm has received
remuneration from the company for the non-audit
services provided, the company should disclose this
publicly. This information should also be available to the
supervisory board or, if the supervisory board is not
formed at the company, by the management board of the
company when considering which audit firm should be
proposed to the general meeting of shareholders.
YES
Remuneration on audit services is approved by the
General Meeting of Shareholders. During 2022 the
Company (its group companies) did not receive any
other services from the auditors.
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Confirmation of responsible persons
In accordance with the Law on Securities of the Republic of Lithuania and the Rules on the Information Disclosure
approved by the Board of the Bank of Lithuania, we hereby confirm that, to the best of our knowledge, the attached
consolidated and separate annual financial statements of AUGA group, AB for the year ended 31 December 2022
have been prepared in accordance with the International Financial Reporting Standards, give a true and fair view of
the assets, liabilities, financial position and profit or loss and cash flow of AUGA group, AB group. The consolidated
annual report provides a true and fair overview of AUGA group, AB and its subsidiaries business development and
operations and the position of undertakings in relation to the description of the main risks and contingencies faced
thereby.
Chief Executive Officer Kęstutis Juščius
Chief Financial Officer Mindaugas Ambrasas