Consolidated Annual Report 2023
1
AUGA group, AB
consolidated Annual Report,
Consolidated and Separate
Financial Statements and Independent
Auditor‘s Report for the Year Ended 31
December 2023
Consolidated Annual Report 2023
2
Contents
1. Overview ....................................................................................................... 3
1.1 Founder’s Foreword ............................................................................. 4
1.2 AUGA group at a Glance and the Most Important 2023 Events .......... 5
1.3 Business Model.................................................................................... 6
1.4 Strategy .............................................................................................. 11
1.5 Vision, Mission, Values ...................................................................... 13
1.6 Risk Management .............................................................................. 14
2. Results ........................................................................................................ 15
2.1. Overall Performance ......................................................................... 16
2.2. Business Segments .......................................................................... 18
2.3. Selling and Administrative Expenses ............................................... 25
2.4. Capital Expenditures and R&D ......................................................... 25
2.5. Finance Costs and Financial Liabilities ............................................ 25
2.6. Cash Flow ......................................................................................... 26
2.7. Information on Shares and Bonds .................................................... 26
2.8. Summary of 2023 Results and Outlook into 2024 ............................ 29
3. Governance report ...................................................................................... 30
3.1 Governance Model ............................................................................ 31
3.3 The Board and its Committees .......................................................... 35
3.4 Management ...................................................................................... 39
3.5 Information on Transactions with Related Parties ............................. 39
3.6 Remuneration Report ........................................................................ 40
3.7 Taxes and Regulatory Compliance.................................................... 43
4. Sustainability Report ................................................................................... 44
4.1 About the Sustainability Report .......................................................... 45
4.2 Our Approach to Sustainability ........................................................... 46
4.3. Environment ...................................................................................... 56
4.4. Employees and Social Responsibility ............................................... 68
4.5 GRI Indicators ...................................................................................... 1
4.6 Nasdaq ESG Indicators ...................................................................... 77
4.7 UN Global Compact Indicators ........................................................... 78
4.8. Independent Auditor’s Conclusion on the Emissions Report ............ 79
4.9. Independent Auditor’s Conclusion on the Sustainability Report ....... 80
Consolidated and Separate Financial Statements ........... Error! Bookmark not
defined.
Balance Sheets ........................................................................................ 82
Statements on Profit or Loss and other Comprehensive Income ............ 84
Statements of Changes in Equity ............................................................. 86
Statements of Cash Flows ....................................................................... 88
Notes to the Financial Statements ........................................................... 90
Independent Auditor’s Report................................................................. 151
Annexes ........................................................................................................ 160
Annex No. 1: Corporate Governance Reporting Form for the Year Ended
31 December 2023 ................................................................................... 161
Confirmation of Responsible Persons .................................................... 179
Consolidated Annual Report 2023
3
1. Overview
1.1 Founder’s Foreword
1.2 AUGA group at a Glance and the Most
Important 2023 Events
1.3 Business Model
1.4 Strategy
1.5 Vision, Mission, Values
1.6 Risk Management
Consolidated Annual Report 2023
4
1.1 Founder’s Foreword
Dear members of the AUGA community,
Scientists from the National Environmental Information Center of the U.S. Department
of Commerce found that 2023 was the hottest year in the last 174. While the world is
embroiled in intense discussions, the situation regarding climate change only worsens.
It is time to pause for a moment and ask: isn't the climate situation in our own hands?
For years, AUGA group has been working to find tech solutions that reduce the
negative environmental impact created of agriculture, one of the most polluting
sectors. In 2023, we introduced the first batch of the AUGA M1 tractor, which is
powered by biomethane and electricity. According to our calculations, using one such
tractor can save 100 tons of CO
2
per year compared to its fossil fuel-powered
counterparts. The first batch of tractors was tested and used for real farm work in
2023. Such trials will be continued this year to further improve this technology, ensure
its reliability, and enable the start of mass production. In 2023, we also developed
prototypes of other technologies powered by sustainable fuels, which we plan to
introduce in 2024.
To ensure the necessary resources of biomethane, an alternative fuel, for powering
tractors on farms, we completed the installation of three biomethane units in 2023. The
biomethane will not only be used to power tractors; we have also started to supply this
green gas, which is produced from secondary raw materials, to the natural gas system
in 2024. This will contribute to achieving emissions reduction targets in other sectors,
and the energy independence of both our country and Europe as a whole.
Livestock activities contribute significantly to climate change. Therefore, we are
creating specialized cattle feed to mitigate emissions in this sector. In 2023, the
Lithuanian University of Health Sciences validated AUGA Tech's feed technology. We
are pleased to report that the tests confirmed increased yield without compromising
milk quality, while reducing methane emissions by 32% per liter of raw milk.
In 2023, the conditions in the agricultural industry were not favourable. Due to lower
demand for organic products worldwide and the decrease in prices for these products,
the financial results of AUGA group deteriorated. In 2023, the Group's gross loss
amounted to EUR 0.96 million, compared to EUR 15.27 million of gross profit in 2022.
The EBIDTA was EUR 1.18 million, while in 2022 this indicator was EUR 19.58 million.
Already recognising this trend in the summer of 2023, we made the decision to
cultivate some of the land using regenerative conventional farming methods. This will
allow us to diversify market risks, reduce fluctuations in fertility and income, lay the
groundwork for future growth, and improve financial results.
In 2023, we actively evaluated the organizational structure of the Group and the
compatibility of individual activities and units with the AUGA group's strategy. Grybai
LT is a successfully developed product manufacturing unit for soup and other canned
products which was grown from scratch, and has become an independent, profit-
generating entity with a strong base of international clients. However, this
manufacturing activity no longer aligned with our strategy. Due to the significant need
for ingredients that we could not grow on our farms according to the sustainable
farming standards of AUGA, it became incompatible with the Group's long-term
perspective of providing consumers with sustainable food. The unit was profitably sold
to another food industry group operating in Lithuania, which will continue to supply
canned products to consumers in up to 30 countries worldwide.
The company's long-term strategy aims to provide sustainable products to every
conscious consumer in Lithuania through the AUGA product line. In 2023, we
introduced a new line that is tailored to these consumers, with the main raw materials -
milk, oats, eggs, vegetables - coming from the organic farms of the AUGA group in
Lithuania. Throughout the year, these products gained shelf presence and expanded
to offer a range of 11 different options.
Despite the challenging year for agriculture, we did not deviate from our strategy.
Instead, we placed a significant emphasis on the development of our technologies and
sustainable farming standards. This gave rise to a restructuring of the business and as
a result in the first half of 2023, we divided the business into three companies: AUGA
Tech - focusing on the development of sustainable agricultural technologies, AUGA
SOFA - responsible for developing the sustainable farming standard and overseeing
its implementation through 11 co-operatives established as production units from the
existing farming operations, and AUGA Trade - organising the production of more
sustainable products and supplying more sustainable raw materials to food producers.
At the 2023 World Climate Change Conference COP28, the question of what will help
solve the issue of agricultural emissions was repeatedly raised during discussions.
While the world debates, we take action. Every day, we work on organic and
regenerative conventional farming plots, learning and expanding our horizons to find a
social compromise between nature, farmers, and consumers.
Our technologies, supported by scientific findings, help to reduce the sector's negative
impact on the environment. With the AUGA community's support, we will strive to
implement these technologies extensively, thereby contributing to mitigating climate
change.
Kęstutis Juščius
AUGA group, AB Chair of the Board
GRI 2-22
Consolidated Annual Report 2023
5
1.2 AUGA group at a Glance and the Most Important 2023 Events
59
%
of sales is
export
3442
shareholders
Listed on
Nasdaq
Vilnius
11
.
5
thous. tonnes of
mushrooms sold
2
4
thous. tonnes of dairy
production sold
110
thous. tonnes of crop
production sold
8
1
.
4
EUR million
revenue
38
.
2
thous. hectars of
arable land
1
191
employees
darbuotoj
2023.02.
Launch of AUGA M1
production batch
2023.04.
Introduction of a new line of
more sustainable organic
products
2023.05.
Introduction of a new operating
model of the Group
2023.06.
Completed installation
works of 3 biomethane
power plants
2023.07.
Sale of the Grybai LT
2023.08.
Start of the regenerative
conventional agriculture
2023.09.
Changes in the management
2023.11.
Tests results of feed
technology were confirmed
by LSMU VA
Consolidated Annual Report 2023
6
1.3 Business Model
AUGA group, AB (hereinafter - the Company) and its subsidiaries (hereinafter - the
Group, AUGA group) operate in Lithuania (with headquarter in Konstitucijos str. 21C,
Vilnius). AUGA group develops organic and regenerative conventional agriculture,
applying a sustainable farming model. Also creates emission-reducing agricultural
technologies, and offers more sustainable organic products to consumers and raw
materials to processors. In 2023, the Group carried out its activities on 38.2 thousand
hectares of land in the most fertile areas of Lithuania. 12.9% of the arable land belongs
to the Group. Other lands are operated by AUGA group through leasing, thereby
obtaining a higher return than by owning them outright.
1.3.1 Business Segments
AUGA group operates in five business segments, which include agriculture and food
production industries, as well as activities focused on the development and application
of sustainable agricultural technologies:
▪ Crop growing – the Group grows wheat, leguminous crops, rapeseed, sugar beet,
oats and other crops. Additionally, vegetables are grown and organic animal feed
is prepared. In 2023, 1/3 of cropland has been cultivated using regenerative
conventional agriculture methods.
▪ Dairy – this segment of the Group includes organic milk production and cattle
breeding. The Group develops this activity in 8 dairy farms.
▪ Mushroom growing – The company's subsidiary Baltic Champs is one of the
largest and most modern mushroom growers in the Baltic region. The company
supplies consumers with white and brown champignons, oyster, portobello,
eryngii, shiitake mushrooms, and also produces compost which is used for
mushroom growing.
▪ Fast-moving consumer goods (FMCG) – the Group offers a wide range of organic
products for the final consumer, which include: dairy and oat products, eggs,
vegetables. Until 2023 July, the Group's company Grybai LT produced ready-to-
eat soups, canned vegetables and stews. From the aforementioned date, the
Group sold this part of the business to the company Kauno grūdai. The products
sold by AUGA group are marked with the AUGA brand.
▪ Technologies for sustainable agriculture (AgTech) – AUGA Tech, UAB, is a
company indirectly owned by the AUGA group, that develops and manufactures
agricultural technologies that reduce emissions. The company develops
biomethane infrastructure, the AUGA M1 hybrid biomethane and electric tractor
for professional use, and other agricultural machinery. AUGA Tech, UAB also
develops specialized feed technology that reduces methane emissions from
livestock operations.
1.3.2 Competitive Advantages of the Group
▪ Economies of scale – the Group operates over large areas of land. Combined
with still lower labour costs and economies of scale, this provides a significant
cost advantage.
▪ Vertical integration – Group farms grow a wide range of raw materials, organise
their processing and preparation for consumption by itself or together with
outsourced production partners. This allows us to offer consumers various end-
use products, such as: milk or oat products, vegetables, mushrooms, eggs.
▪ Full traceability – the Group ensures full traceability - from seeds to packaging -
and high product quality.
▪ Synergy between different branches of agriculture – The group operates on a
closed-loop agricultural model, which allows supplying different business
segments with the necessary agricultural products. For example, the organic
dairy farming segment operates in synergy with organic crop farming. Crops used
for animal feed in livestock are grown for crop rotation, and the organic waste
generated in the segment's activities is used as fertilizer in crop farming.
▪ Technology development and application in practice – emission-reducing
agricultural technologies are the guarantor of the future progress of the sector,
which will allow curbing the issues of climate change. By creating innovative
solutions in agriculture that are not yet available on the market, the Group aims to
implement a standard of sustainable agricultural activity and a breakthrough in
the entire food system. Both consumers and investors will support such
companies today and in the future.
GRI 2-1
GRI 2-6
GRI 2-9
Consolidated Annual Report 2023
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1.3.3 Map of Activities
All the Group’s activities take place in Lithuania. The location of the Group’s headquarter and subsidiaries are shown on the map below:
Consolidated Annual Report 2023
8
1.3.4. Export Markets
In 2023, the Group's export markets covered 35 countries worldwide. This list changed after July 2023 as the company Grybai LT, which produced ready-to-eat products for final
consumption: soups, canned vegetables, stews, was sold. After that date, the most important markets for raw materials and other Group products remained: Germany, the
Netherlands, the United Kingdom, and Scandinavian countries. A line of more sustainable organic products has been introduced for the domestic market - Lithuania.
The Group's raw materials and mushroom export markets (2023)
Company’s Grybai LT export markets (2023)
Estonia, UAE, Cyprus, Latvia, Poland, Malta, Romania, Serbia, Slovakia, Finland,
Sweden, Norway, Belgium, Czech Republic, Denmark, Italy, Japan, Netherlands, UK,
Hungary, Germany.
Australia, Belgium, Czech Republic, Chile, Denmark, Estonia, Greece, Hong Kong, Italy,
Israel, UAE, Japan, USA, Cyprus, Croatia, Latvia, Poland, Lebanon, Malta, Norway, Peru,
Portugal, France, Romania, Serbia, Singapore, Slovakia, Slovenia, Finland, Taiwan, UK,
Hungary, Germany.
Consolidated Annual Report 2023
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1.3.4 Export Markets
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 livestock (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
growing activity. The Group purchases fuel, seeds, other products, and rents or buys the
machinery from external suppliers.
The Group's produced raw materials are sold to buyers or processors. Additionally, the
Group manufactures final products for consumers from its own grown raw materials,
labelled with the AUGA brand. The manufactured products are sold in retail networks,
distributed through wholesale customers, distributors, HORECA channels, and others.
Consolidated Annual Report 2023
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1.3.6 End-products for Consumers
Organic dairy products
Organic grain products
Organic
vegetables and
other
Organic soups and stews*
Organic canned products*
Milk 2.5% fat.
Oatmeal porridge with apples and
cinnamon
Potatoes
Carrot soup
Canned champignons
Milk 2.5% fat.
Oatmeal porridge with apricots and
banana
Beetroot
Beetroot soup
Canned, sliced champignons
Milk 3.5% fat. UHT
Oatmeal porridge with banana and
strawberries
Carrots
Tomato soup
Marinated champignons
Milk 2.5% fat. UHT, lactose-free
Oatmeal porridge with apples and
raspberries
Onions
Champignon soup
Beetroots in apple juice
Kefir 2.5% fat.
Oatmeal porridge with wild berries
Vegetable soup Minestrone
Pickled beetroots
Sour cream 30% fat.
Oatmeal porridge with raisin, chia
and kiwi
Eggs
Three lentil soup
White beans in brine
Curd 9% fat.
Oatmeal porridge with pear, sour
cherry and plum
Butternut squash soup
Red kidney beans in brine
Butter 82% fat.
Spicy curry soup
White beans in tomato sauce
Oatmeal
Cold tomato soup Gazpacho
Red kidney beans in chilli sauce
Instant oatmeal
Sauerkraut soup
Chickpeas in brine
Vegan chilli bean soup
Double steamed red kidney beans
Sweet corn soup
Double steamed white kidney beans
Red Curry bowl
Double steamed chickpeas
Yellow Curry bowl
Green Curry bowl
In 2023 April the Group launched a new line of more sustainable, organic products under
the AUGA brand. These products are made from organic raw materials grown on AUGA
group farms in Lithuania only, which apply more sustainable farming methods and
implement technologies that reduce the negative impact on the environment. The Group
also supplies organic oatmeal porridges to the market, the main ingredient of which is oats
from AUGA group farms, accounting for an average of 74% of the final product.
This product line also includes instant oatmeal porridges, as its primary ingredient are oats
grown on AUGA group farms, which constitute 74% of the product on average.
GRI 2-6
* In 2023 July AUGA group sold the company Grybai LT, which produced the abovementioned products, to the company Kauno
grūdai. 18 months from the sale, company will be able to continue supplying production in the market under AUGA brand.
Consolidated Annual Report 2023
11
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 2023 on year 2019,
agriculture is responsible for over 22% 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 biomethane cycle infrastructure and biomethane 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.
* Sixth Assessment Report of the Intergovernmental Panel on Climate Change, Synthesis Report 2023
Consolidated Annual Report 2023
12
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 organic food producer by 2030.
AUGA group will be recognized as an asset-light business based on agricultural
technologies (AgTech). The Group plans for the technologies it has developed to be
applied not only in AUGA group farms. Innovative solutions and experience in
sustainable agriculture will be made available to all farmers who want to work
sustainably.
What will the success of the strategy mean for each AUGA group community in 2025:
▪ For consumers – the ability to deliver a consumer basket with no cost to nature.
▪ For farmers – functionality of Sustainable Organic Food Architecture, which reduces
carbon dioxide ant its equivalent emissions.
▪ For investors – resilience in business structure through long-term financing and
impact-driven lenders.
▪ For shareholders – a unique asset-light business model, assuring a 15% return on
capital, multiplying the Company‘s value by 3 times 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 in 2021, when AUGA group
presented the prototype of the biomethane and electricity powered AUGA M1 tractor for
professional use. It can save 100 t of CO
2
e emissions per year compared to analogues
powered by fossil fuels. During 2023, the Group presented the first factory batch of
tractors to the public assembled at Rokiškis machine factory.
In 2023, significant advancements were also made in other strategic projects.
Throughout the reporting period, the Group completed the installation of 3 biomethane
infrastructure objects and began preparations for its connection to the natural gas
network. Additionally, the results of the feed technology tests, which took two years,
were validated in 2023.These tests were evaluated by scientists from the Veterinary
Academy of the Lithuanian University of Health Sciences, who confirmed the validity of
the results. It was demonstrated that this technology not only increases milk yield
without compromising milk quality, but also reduces methane emissions from cows
digestive processes by 32% per litre of raw milk produced.
To achieve the strategy's objective of implementing a sustainable farming standard and
developing sustainable technologies in the agricultural sector, the Group converted one-
third of its arable land to regenerative conventional agriculture in 2023. This transition
will not only foster the further development of AUGA's sustainable farming standard, but
will also significantly reduce emissions from agricultural practices, benefiting both
organic and conventional farms.
In 2023, the Group also introduced a new business model aimed at fostering the
dissemination of technologies and the development of a sustainable food supply. This
entailed creating a new organizational structure: AUGA Tech, responsible for developing
and manufacturing innovative agricultural technologies to be commercialized; AUGA
SOFA, tasked with developing the AUGA sustainable farming standard and providing
services to agricultural cooperatives and farmers through franchise agreements; and
AUGA Trade, focused on organizing the production, trade, and marketing of sustainable
products for consumers. These various branches of activity within the new business
model are consolidated by the company AUGA Community. The new organizational
structure will enable the implementation of a new business model and will be more
favourable for attracting investments.
During the reporting period, the Group launched a new line of organic sustainable
products for consumers. Further details about these new products can be found in section
1.3.7 End Products for Consumers.
In 2023, the Group allocated EUR 3.387 million for the implementation of technological
projects. This amount was 17% lower than EUR 4.077 million allocated in the previous
year.
Consolidated Annual Report 2023
13
1.5 Vision, Mission, Values
Vision – a synonym for sustainable food and lifestyle.
Mission – food with no cost to nature.
AUGA group‘s activities are guided by the following core
values: sustainability, innovation, and positive impact.
Sustainability
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.
Innovation
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.
Positive impact
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.
Consolidated Annual Report 2023
14
1.6 Risk Management
The Risk Management Guidelines were approved by the Company’s audit committee and the
Board in 2021. Each year, the Group performs an assessment of its main risks and draws a risk
assessment map, considering both probability and impact of the outlined risks. The main risks
identified for the Group at the start of 2023 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.
Changing prices of organic products. Certified organic products are generally more expensive
than their conventional counterparts, for reasons such as limited supply, smaller volumes and
regulatory barriers. Nevertheless, the organic premium has historically covered the loss of
foregone earnings, arising from higher production costs, lower efficiency, and greater labour
input. The diminishing premium of organic poses a significant risk to the Group’s financial
performance.
Financing risk. Organic and, in particular, regenerative conventional agriculture requires a lot of
working capital. Under a significant level of Group’s borrowed capital, certain material restrictions
might arise:
▪ 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.
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, with
limited ability to hedge, the Group faces significant fluctuations in the working capital needs.
Changes in EU subsidies. The Group receives a significant amount of 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 a substantial impact on many of the Group’s activities,
including reduction of cash flows and on the profitability of operations, a decrease in the value of
land and investment property, and a possible drop 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.
Lack of HR resources. Field operations require employment of lower-skilled workers, who are in
high demand in rural areas. This demographic faces a problem of a dwindling workforce,
characterised by aging and a diminishing population, which has been both a longstanding and
widespread risk for all activities in rural areas. Additionally, according to the Official Statistics
Portal, the employment rate in Lithuania is at its highest level since 1998, standing at 63.1%. In
the light of these indicators, the Group recognises the risk of failing to adequately staff all field
operations, which may lead to operational challenges, hinder the ability to meet production
targets, maintain quality standards, or capitalise on market opportunities.
New business activity of biomethane operations. The introduction of biomethane operations, i.e.
production of renewable gas which secures a clean energy source while simultaneously solving
one of the most prominent emission sources in agriculture, is an integral step towards
establishing an additional long-term source of income and achieving the Group’s strategic goals.
Successful commencement of biomethane production would allow to eventually attain full
circularity between business segments and activities, whereas project delays may incur
unforeseen costs, especially considering its complexity, undefined regulatory environment and
little immediate demand in the home market.
Reinvestment into current equipment. Long-standing agricultural operations require reinvestment
on a regular basis, needed to maintain an optimal level of efficiency. Due to the long-standing
Group's perspective on Sustainability, it has been chosen not to proactively invest in agricultural
equipment that is not powered by non-renewable energy sources, unless it is a vital need to keep
up with acceptable level of farming operations. Due to the fact that it has been taking time to
bring in-house developed sustainable technologies to scale to cover the needs of the farms as
well as external partners, equipment underinvestment is increasingly becoming a more significant
risk.
Technology speed to market. Development processes of sustainable farming technologies (such
as hybrid and electric-powered tractors as well as feed processing) in a climate technology area
where the Community at large is to benefit from the reduction of the pollution in agriculture, but
the landscape of industry representatives is very sporadic and the corresponding greening efforts
are not enough, bringing certain technologies to the market is a challenge. While the Group
recognises and prepares for addressing potential market entry barriers, such as adaptation to
market dynamics or lack of existing regulations, considering the scope and variety of
technological projects undertaken by the Group, establishing a hold as a new market player in the
sustainable technology market may take longer than expected.
Raising capital for greening technologies and initiatives. Introduction of new sustainable farming
technologies to the market is circumscribed both by capital resources and the level of technology
readiness, which together pose a vicious circle question. As finances are required to bring the
sustainable technologies through the levels of technology readiness swiftly, prove their viability
and reach the target farms and partners, the Group needs to secure additional capital for that
activity on its own. Without securing the required funds for commercialisation of sustainable
technology, the timely completion of strategic objectives set forth by the Group stands at risk.
Consolidated Annual Report 2023
2. Results
2.1 Overall Performance
2.2 Business Segments
2.3 Selling and Administrative Expenses
2.4 Capital Expenditures and R&D
2.5 Finance Costs and Financial Liabilities
2.6 Cash Flow
2.7 Information on Shares and Bonds
2.8 Summary of 2023 results and Outlook into 2024
Consolidated Annual Report 2023
16
2.1. Overall Performance
* Main performance indicators comprise results from both continuing and discontinued operations (incl. Grybai LT), while in consolidated financial statements, results from discontinued operations are disclosed separately.
AUGA group, AB and its subsidiaries’ financial results have deteriorated in 2023 when
compared to previous year. The main reason for the Group's financial performance is
fallen purchase prices for organic products.
Sales revenue of the Group amounted to EUR 81.48 million in the 12-month period of
2023. This marks a 2% increase on the equivalent period of the year before, when
sales revenue was EUR 80.09 million. Revenue has increased in crop growing and
mushroom segments, while in dairy and fast-moving consumer goods segments sales
have decreased.
The Group's gross loss amounted to EUR 0.96 million in 2023 compared to gross profit
of EUR 15.27 million in 2022. The Group’s net loss accounted for EUR 18.45 million
Main performance indicators of the Group*
2023 m.
2022 m.
2021 m.
Variance
2023/22 m.
Variance
2022/21 m.
Revenues
81,483
80,088
71,721
+2%
+12%
Direct subsidies
11,846
12,711
12,858
-7%
-1%
Gross profit (loss)
(957)
15,270
3,952
n/a
+286%
Operating profit (loss)
(7,977)
3,099
(9,819)
n/a
n/a
Finance costs
(10,262)
(7,537)
(6,459)
-36%
-17%
Net profit (loss)
(18,447)
(5,351)
(15,435)
-245%
+65%
EBITDA
1,182
19,580
9,101
-94%
+115%
Net cash flow from operating activities
(7,425)
691
8,140
n/a
-92%
Net cash flow from operating activities before changes in working capital
(75)
9,346
11,979
n/a
-22%
Total non-current assets
159,728
162,584
155,330
-2%
+5%
Total current assets
68,699
68,834
57,149
0%
+20%
Total equity
62,627
77,533
78,980
-19%
-2%
Total non-current liabilities
60,578
83,236
88,414
-27%
-6%
Total current liabilities
105,222
70,649
45,085
+49%
+57%
Non-current and current financial liabilities
127,034
117,027
102,984
+9%
+14%
Adjusted working capital
28,494
32,424
28,531
-12%
+14%
EBITDA margin, %
1.45
24.45
12.69
-94%
+93%
Operating margin, %
(9.79)
3.87
(13.69)
n/a
n/a
Net margin, %
(22.64)
(6.68)
(21.52)
-239%
+69%
ROE, %
(26.32)
(6.84)
(17.79)
-285%
+62%
ROA, %
(8.02)
(2.41)
(7.24)
-233%
+67%
ROCE, %
(6.33)
2.29
(7.15)
n/a
n/a
P/E ratio
(3.89)
(16.41)
(7.11)
+76%
-131%
Debt/EBITDA
107.49
5.98
11.32
+1 698%
-47%
Equity ratio
0.27
0.34
0.37
-18%
-10%
Current ratio
0.65
0.97
1.27
-33%
-23%
Consolidated Annual Report 2023
17
during the 12 months of 2023, compared to a net loss of EUR 5.35 million a year
earlier. The Group's EBITDA amounted to EUR 1.18 million in 2023, representing a
decrease of 94% compared to the previous year, when EBITDA was EUR 19.58
million.
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.
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.
Consolidated Annual Report 2023
18
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 2022/2023
The total cultivated land area by the Group amounted to 38.2 thousand hectares
(ha) in the 2022/2023 season and is slightly less than the cultivated area in the
2021/2022 season. In the 2022/2023 season, 29.8 thousand ha is seeded with
crops (30.1 thousand in the 2021/2022 season) out of which 11.3 thousand ha is
dedicated to wheat, 8.1 thousand ha to legumes and 10.4 thousand ha to other
cash crops. The majority – 10 thousand ha out of total 11.3 thousand ha – of wheat
will be winter wheat as winter crops usually have higher yield potential compared to
summer alternatives. Forage crops comprise 7.1 thousand ha in the 2022/2023
season compared to 7.7 thousand ha in the 2021/2022 season.
As of 31 December 2023 the Group has fully completed the harvest of 2022/2023.
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 in the season of 2023/2024
At the end of each quarter the Group evaluates the fair value of crops which have not yet
been harvested. The weather conditions during 2023 autumn were favourable for the
preparatory work needed for 2023/2024 season. The sowing of winter crops and land
tillage work were completed according to schedule. In 2023 there were 20 thous. ha
dedicated to winter crops – wheat, triticale, rapeseed, clover, barley, rye and vicia – which
will be harvested in 2024. This adds up to 66% of land that was sown with wheat, legumes
and other cash crops for the 2023/2024 season. For comparison, in 2022/2023 season
there was 17 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 2024 spring sowing. The Group is well prepared for the 2023/2024 season
and is optimistic with regards to the potential of the next year’s harvest.
10,4
8,1
12,4
6,8
11,7
6,8
11,6
7,7
11,3
8,1
10,4
7,1
5,0
7,0
9,0
11,0
13,0
15,0
Wheat Legumes Other cash crops Forage Crops
HA'000
Cultivated land area, thousand ha
2020/2021 2021/2022 2022/2023
15 600
14 500
15 995
17 404
16 999
20 158
53%
51% 51%
58%
52%
66%
0%
10%
20%
30%
40%
50%
60%
70%
-
5 000
10 000
15 000
20 000
25 000
2018/2019 2019/2020 2020/2021 2021/2022 2022/2023 2023/2024
Winter cash crops area (ha) and share of total area, %
Winter cash crops area, ha Winter cash crops share of total area, %
Consolidated Annual Report 2023
19
As of 31 December 2023 the group has evaluated the gain (loss) on revaluation of
agricultural produce for crops that will be harvested in 2024. The calculation was
based on the formula given below:
Fair value of a 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:
▪ Cost incurred is cost actually incurred for a particular crop as of 31 December
2023.
▪ 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 costs 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 2023,
the average completion percentage estimated for next year‘s harvest crops was
around 35%.
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 based on production cost incurred on forage crop. In other words, forage
crop production costs are 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 harvested land plot of wheat, legumes and other crops in the
current and past two seasons. Land plot of wheat and legumes increased in the
season of 2022/2023 compared to previous period and constituted 65% of all cash
crops land plot compared to 61% in the previous season.
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.
As seen from the data the average cost of wheat in the season of 2022/2023
increased by 7% while the cost of legumes has increased by 1% compared to previous
season. The cost increase was due to the prices of fertilizers and seeds which reached
highs in the current season. The rise in average salary which led to an increase in
wages cost also contributed to the average cost growth.
Table below depicts wheat, legume and other crops yields in the current and past two
seasons. Wheat yield in 2023 was 3.55 t/ha which is 4% higher than wheat yield in the
equivalent period last year. Legumes yield in 2023 decreased by 39% compared to
previous year from 2.32 t/ha to 1.41 t/ha. Legumes were mainly affected by the yield of
beans which differs significantly over last year due to drought which occurred at the
beginning of the 2023 season and caused the decrease of yield in the season of
2022/2023.
Average yield, t/ha
12-
month
of 2023
12-
month
of 2022
12- month
of 2021
Variance
2023/22
Variance
2022/21
Wheat
3.55
3.41
3.27
+4%
+4%
Legumes
1.41
2.32
1.09
-39%
+113%
Other cash crops
5.93
4.47
5.72
+33%
+22%
Harvested land
plot by culture
group, ha
12-
month of
2023
12-
month of
2022
12-
month of
2021
Variance
2023/22
Variance
2022/21
Wheat
11,345
11,693
10,441
-3%
+12%
Legumes
8,077
6,785
8,056
+19%
-16%
Other cash crops
10,411
11,628
12,397
-10%
-6%
Cost per 1 ha
cultivated land,
EUR/ha
12-
month of
2023
12-
month of
2022
12-
month of
2021
Variance
2023/22
Variance
2022/21
Wheat
1,103
1,033
786
+7%
+31%
Legumes
935
926
802
+1%
+15%
Other cash crops
1,266
1,237
1,085
+2%
+14%
Consolidated Annual Report 2023
20
Yield of wheat in Lithuania, t/ha
Yield of leguminous crops in Lithuania, t/ha
NOTE: The data of LT organic farms for 2023 has not yet been published, the data of conventional farms in the LT is preliminary.
Reference: LCSS Institute of Economics and Rural Development, Forecasts of crop area, yield and harvest of agricultural crops in
2023, 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 2022/2023, 2021/2022 ir
2020/2021. It should be noted that at the time of the publication of the financial
statements for the four quarters of 2023, significant part of the 2022/2023 season
harvest has already been sold or contracted at fixed prices, therefore fair value of the
crops was estimated based on average contract prices.
As can be seen from the data above, the price of 1 tonne of wheat in the season of
2022/2023 decreased by 35% while legumes dropped 19% compared to previous
season. This was mainly affected by one of the lowest purchase prices of organic
production in the last year.
Table below provide information on gain (loss) per hectare for wheat, legumes and
other crops.
In the 2022/2023 season the loss of wheat as well as legumes per hectare amounted
to EUR 178 and EUR 273 respectively, while a profit was recorded in the previous
season. The main reasons for this loss, as mentioned in the text above, are the sharp
drop in the purchase prices of organic production, the increased cost of fertilizers,
seeds as well as wages and the low yield of legumes. Precisely because of the low
organic prices and the sensitivity of summer organic crops to weather conditions a
third of the land will be cultivated using regenerative conventional farming in the
coming season. As a consequence, the areas of summer organic crops will be 40%
smaller compared to this season.
1,8
3,1
3,6
2,8
3,0
3,8
4,3
5,4
4,5
4,7
4,5
2,7
4,2
4,1
3,3
3,4
3,6
0
1
2
3
4
5
6
2018 2019 2020 2021 2022 2023
LT organic wheat LT conventional wheat AUGA wheat
1,5
1,6
2,6
1,6
2,1
2,0 2,0
3,0
1,8
2,8
2,1
1,5
1,7
2,7
1,1
2,3
1,4
0,0
0,5
1,0
1,5
2,0
2,5
3,0
3,5
2018 2019 2020 2021 2022 2023
LT organic legumesi LT conventional legumes AUGA legumes
Average price of
1 tonne of crop
eliminating sales
costs, EUR/t
12-month
of 2023
12-month
of 2022
12-month
of 2021
Variance
2023/22
Variance
2022/21
Wheat
260
403
240
-35%
+68%
Legumes
467
576
347
-19%
+66%
Other cash crops
204
246
189
-17%
+30%
Gain (loss) on
revaluation of
agricultural
produce at point
of harvest,
EUT/ha
12-
month of
2023
12-
month of
2022
12-
month of
2021
Variance
2023/22
Variance
2022/21
Wheat
(178)
341
2
n/a
+16 950%
Legumes
(273)
458
(422)
n/a
n/a
Other cash crops
(55)
(137)
(10)
-60%
-1 270%
Consolidated Annual Report 2023
21
Forage crops results
12-
month of
2023
12-
month of
2022
12-
month of
2021
Variance
2023/22
Variance
2022/21
Cost per 1 ha cultivated
land, EUR/ha
955
767
826
+25%
-7%
Average yield, t/ha
7.69
6.83
7.57
+13%
-10%
As of 31 December 2023, the Group recognized a EUR 5.28 million loss on the initial
recognition of biological assets at fair value. It should be noted that as of 31 December
2022 Group has already recognised a gain of EUR 1.97 million on the initial
recognition of biological assets at fair value. At the end of reporting period the Group
has also calculated EUR 1.29 million gain on the initial recognition of biological assets
at fair value for the 2023/2024 season’s crops. Thus, loss on the initial recognition of
biological assets at fair value accounted for the year 2023 amounts to EUR 5.95
million.
Crops value, EUR
million
12-
month of
2023
12-
month of
2022
12-
month of
2021
Variance
2023/22
Variance
2022/21
Gain (loss) on revaluation
of biological assets at fair
value (harvest of the
2022/23 season)
(7.24)
2.83
(5.51)
n/a
n/a
Gain (loss) on revaluation
of biological assets at fair
value recognized in next
period (harvest of 2023/24
season)
1.29
1.97
2.33
-35%
-15%
Total gain (loss) on
revaluation of biological
assets at fair value
(5.95)
4.80
(3.18)
n/a
n/a
Crop growing segment sales results
Total revenue generated from sales in the crop growing segment amounted to EUR
30.08 million in 2023, which marks an increase of EUR 2.50 million in revenue
compared to 2022. Sales revenues were increased by higher quantity of the harvest
sold this year.
Crop growing
segment results,
EUR million
12-
month of
2023
12-
month of
2022
12-
month of
2021
Variance
2023/22
Variance
2022/21
Sales revenue
30.08
27.58
23.56
+9%
+17%
Cost of sales
(33.60)
(27.71)
(25.15)
-21%
-10%
One-time income
(inventory write-
offs)
(0.41)
(1.26)
(4.05)
+67%
+69%
Result of internal
transactions
(2.70)
(0.68)
n/a
-297%
n/a
Results of sales
of agricultural
produce
(6.63)
(2.07)
(5.64)
-220%
+63%
The crop growing segment’s cost of sales of 2023 amounted to EUR 33.60 million,
21% more compared to the same period of last year. Cost of sales exceeded sales
revenue due to crops sold at below-revenue post-harvest prices. Due to more effective
maintenance of inventories, write-offs are decreasing – at the end of 4th quarter of
2023 they amounted to only EUR 0.41 million, compared with EUR 1.26 million in the
same period last year. Internal transactions between segments are executed based on
fixed pricing and in the end of 2023 its effect amounted to a loss of EUR 2.70 million.
Agricultural subsidies and gross profit of the crop growing segment
Total amount of agricultural subsidies accrued in 12 months of 2023 was EUR 9.04
million which is slightly less compared to the subsidies accrued in the same period last
year. Accrued subsidies amount is based on calculations according to currently
applicable and achievable requirements of subsidising programmes regulations as of
31st December. Although, payments per hectare have increased, in total the Group
will receive about EUR 1 million less per year than last year due to the conversion of a
part of organic land to conventional land.
The gross result 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 decreased in 2023 when compared to last year due to a decrease in
result on revaluation of biological assets at fair value and lower selling prices of
agricultural products. Gross loss amounted to EUR 3.54 million at the end of 2023. In
the same period of 2022, gross profit was EUR 12.43 million.
Consolidated Annual Report 2023
22
Gross profit of crop growing segment, EUR million
12- month of 2023
12- month of 2022
12-month of 2021
Variance 2023/22
Variance 2022/21
Gain (loss) on revaluation of biological assets at fair value
recognised in reporting period
(5.95)
4.80
(3.18)
n/a
n/a
Result of sales of agricultural produce
(6.63)
(2.07)
(5.64)
-220%
+63%
Subsidies
9.04
9.70
9.69
-7%
0%
Gross profit
(3.54)
12.43
0.89
n/a
+1 297%
2.2.2. Dairy Segment Overview
The quantity of milk produced in the four quarters of 2023 increased by 2% compared to the same period last year, even though average herd size of dairy cows decreased from 3,539
(in the four quarters of 2022) to 3,456 (in the four quarters of 2023). It was compensated by average milk yield which during the 12-month period of 2023 grew by 5% compared to the
same period last year.
Although the quantity of milk produced was higher, the total quantity sold decreased due to the consumption of the part of milk for a new line of dairy products, the result of which is
reflected in the FMCG segment.
During the year of 2023 milk purchase prices decreased by 18% compared to 2022, which had the main impact on the results of the segment. Dairy sales revenue fell to EUR 14.74
million in the reporting period, compared to EUR 16.50 million last year.
Dairy segment maintained a higher level of cost of sales which amounted to EUR 14.97 million during the 12 months of 2023 and that is EUR 0,06 million more than in the same
period last year. The growth of costs was mainly influenced by an increase in salary expenses, growing prices of feeds.
In 2023, a loss of EUR 3 million was incurred due to the revaluation of biological assets (animal herd). In comparison, the loss due to the revaluation of biological assets (animal herd)
was 44% lower last year.
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
22,5
23,0
22,3
21,8
21,3
21,3
21,9
22,4
22,3
21,4
21,4
22,4
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
2021 2022 2023
Consolidated Annual Report 2023
23
After the Group improved milk yield, controlled production costs and cost price in the last quarter of 2023 as well as production prices rise in November and December 2023, the
segment’s gross loss decreased by 33% from the announced result in the previous quarter and reached EUR 0.43 million.
12- month of 2023
12- month of 2022
12- month of 2021
Variance 2023/22
Variance 2022/21
Total quantity of products sold, t
25,720
26,594
27,053
-3%
-2%
Milk, t
23,766
25,334
25,685
-6%
-1%
Dairy commodities, t
1,077
457
624
+136%
-27%
Cattle, t
877
803
743
+9%
+8%
Revenue, EUR million
14.74
16.50
13.61
-11%
+21%
Milk, EUR million
10.38
13.48
10.69
-23%
+26%
Dairy commodities, EUR million
3.09
1.71
2.02
+81%
-15%
Cattle, EUR million
1.27
1.31
0.90
-3%
+46%
Cost of sales, EUR million
(14.97)
(14.91)
(13.15)
0%
-13%
Milk, EUR million
(10.66)
(11.94)
(10.36)
+11%
-15%
Dairy commodities, EUR million
(3.04)
(1.66)
(1.89)
-83%
+12%
Cattle, EUR million
(1.27)
(1.31)
(0.90)
+3%
-46%
Revaluation of biological assets, EUR million
(3.00)
(2.09)
(2.77)
-44%
+25%
Subsidies, EUR million
2.80
3.07
3.17
-9%
-3%
Gross profit, EUR million
(0.43)
2.57
0.85
n/a
+202%
Consolidated Annual Report 2023
24
2.2.3. Mushroom Segment Overview
In the last quarter of 2023, the segment showed particularly good results. Segment
profit in the 4th quarter of 2023 amounted to EUR 0.60 million and was EUR 0.50
million higher compared to the same period last year. Although the volume of
production remained similar to 2022, the control of production costs and the decrease
in energy prices enabled costs to be maintained at the 2022 level. Sales prices
increased by 10% in 2023, remained at this level and have the potential to increase in
2024. Excluding packaging & transportation, the growth of mushroom price is even
bigger.
Cost of sales amounted to EUR 29.00 million in the four quarters of 2023, which is
lower than last year. The average cost of sales per 1 tonne of mushrooms sold has
also decreased from 2,505 EUR/tonne to 2,483 Eur/tonne.
In 2023, the mushroom growing segment generated a gross profit of EUR 1.72 million,
compared to a gross loss of EUR 1.4 million in 2022.
12-
month of
2023
12-
month of
2022
12-
month of
2021
Variance
2023/22
Variance
2022/21
Sold mushrooms, t
11,510
11,552
12,002
0%
-4%
Average price (EUR/t)
2,633
2,384
2,323
+10%
+3%
Total revenue, EUR
million
30.73
27.90
28.36
+10%
-2%
Mushroom sales revenue,
EUR million
30.31
27.54
27.89
+10%
-1%
Compost sales revenue,
EUR million
0.42
0.36
0.47
+17%
-23%
Cost of sales, EUR million
(29.00)
(29.30)
(27.69)
+1%
-6%
Cost of mushrooms sold,
EUR million
(28.58)
(28.94)
(27.45)
+1%
-5%
Cost of compost sold, EUR
million
(0.42)
(0.36)
(0.24)
-17%
-50%
Gross profit, EUR million
1.72
(1.40)
0.67
n/a
n/a
2.2.4. Fast-moving Consumer Goods (FMCG) Segment
In 2023, the gross profit of the FMCG segment was EUR 1.29 million, compared to a
gross profit of EUR 1.74 million in 2022. In mid-2023, the sale of 100% shares of the
Kooperatinė bendrovė Grybai LT, a producer of canned products, had the most
significant impact on the segment's result.
2 857
2 998
2 681
2 709
2 863
2 993
2 870
2 895
0
1 000
2 000
3 000
4 000
Q1 Q2 Q3 Q4
Mushrooms produced, t
2022 2023
Consolidated Annual Report 2023
25
67%
6%
3%
7%
16%
1%
Revenue structure of the fast moving consumer goods sales, %
Preserved mushrooms, vegetables and
soups
Grain products
Eggs
Vegetables
Milk and dairy products
Other end-consumer products
In 2023, the Group launched a new line of organic dairy products for consumers and
aims to increase product's range and expand its sales network.
FMCG segment
results, EUR million
12-
month of
2023
12-
month of
2022
12-
month of
2021
Variance
2023/22
Variance
2022/21
Sales revenue
5.94
8.12
6.19
-27%
+31%
Cost of goods sold
(4.65)
(6.38)
(4.66)
+27%
-37%
Gross profit
1.29
1.74
1.54
-26%
+13%
During the 12-month period of 2023 the Group has exported its products to 35
countries compared to 33 countries in the same period in 2022.
The 2023 FMCG sales revenue structure with respect to product types is depicted in
the chart below.
2.3. Selling and Administrative Expenses
The Group's selling and administrative expenses during the 12-month period of 2023
amounted to EUR 13.98 million compared to EUR 11.40 million in the same period last
year. The increase is mainly due to increased marketing expenses, investments
related to the introduction of new end-consumer products, and higher employee pay.
2.4. Capital Expenditures and R&D
Total investments (additions) into property, plant and equipment amounted to EUR
6.36 million in 2023 (2022 - EUR 7.21 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
*Excluding additions related with the right-of-use assets.
The Group continues to develop its technology projects and is preparing to scale them.
The AUGA M1 tractors from the first production batch are being further tested. AUGA
Tech obtained a patent in the USA, the States to the Eurasian Patent Convention and
Australia for the structure of the AUGA M1 biomethane and electric-powered tractor for
large farms. The company indirectly owned by the AUGA group, has applied for
patents in other strategic markets.
In November 2023, the Group announced the confirmed results of testing of its feed
technology. Tests showed that the technology enables an increase in the milk yield
with no impact on the milk’s quality and a reduction of the methane emissions from
cows' digestive processes by 32% per litre of raw milk. The test results were evaluated
and their validity was confirmed by scientists from the Veterinary Academy of the
Lithuanian University of Health Sciences.
In 2024, two out of three biomethane plants started supplying the biomethane gas to
the natural gas grid.
2.5. Finance Costs and Financial Liabilities
The Group’s interest bearing debt increased and reached EUR 80.96 million as of 31
December 2023. Finance costs (excl. IFRS 16 effect) have shifted from EUR 4.82 million
in 2022 to EUR 7.14 million in 2023:
2023
2022
Land*
23
436
Buildings*
626
265
Constructions and machinery
2,646
1,951
Vehicles, equipment and other
768
285
Construction in progress
2,298
4,271
Total:
6,361
7,208
Consolidated Annual Report 2023
26
2023
m.
2022
m.
2021
m.
Pokytis
2023/22
Pokytis
2022/121
Current and non-current
financial liabilities, EUR
thousand
127,034
117,027
102,984
+9%
+14%
Current and non-current
financial liabilities (excl.
IFRS 16 effect), EUR
thousand
80,955
74,188
63,871
+9%
+16%
Cash and cash
equivalents, EUR
thousand
3,455
3,337
2,446
+4%
+36%
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 2023 the Group’s adjusted working capital was EUR 28.49 million
compared to EUR 32.42 million on 31 December 2022. Financial liabilities (excl. IFRS
16 effect) of the Group minus cash and cash equivalents minus adjusted working
capital as of 31 December 2023 were EUR 49.00 million or EUR 10.58 million higher
than at the end of 2022.
2023
m.
2022
m.
2021
m.
Pokytis
2023/22
Pokytis
2022/21
Adjusted working
capital, EUR thousand
28,494
32,424
28,531
-12%
+14%
Net debt – adjusted
working capital*, EUR
thousand
49,006
38,427
32,894
+28%
+17%
*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 2023. Significant increase of costs in 2023
required additional working capital, part of which was financed by loans.
2.6. Cash Flow
Deteriorated financial results and delayed payments from National Paying Agency
resulted in negative net cash flows from operating activities in 2023. Positive net cash
flows from investing activities were affected by the sale of Grybai LT company.
2023
2022
2021
Variance
2023/22
Variance
2022/21
Net cash flows from
/(to) operating
activities, EUR million
(7.43)
0.69
8.14
n/a
-92%
Net cash flows from
/(to) investing activities
EUR million
4.42
(5.40)
(5.89)
n/a
+8%
Net cash flows from
/(to) financing activities,
EUR million
3.13
5.60
(2.35)
-44%
n/a
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).
Information about the Company‘s shares trading on the NASDAQ Vilnius.
Types of shares
Number of
shares
Share
nominal
value (Eur)
Total share
capital (Eur)
Issue Code ISIN
Ordinary
registered
shares
231,735,132
0.29
67,203,188.28
LT0000127466
Consolidated Annual Report 2023
27
From 1 January 2023 to 31 December 2023 the share price has decreased by 20.49%. The OMX Baltic Benchmark index increased by 4.19% during the respective period.
AUGA group, AB share price, turnover and changes of OMX Baltic Benchmark index from 1 January 2021 to 31 December 2023:
Source: NASDAQ Vilnius stock exchange
0
0,1
0,2
0,3
0,4
0,5
0,6
0,7
0,8
0
50 000
100 000
150 000
200 000
250 000
300 000
350 000
400 000
450 000
500 000
VOLUME (UNITS)
PRICE (EUR)
Shares volume Share price OMX Baltic Benchmark GI
| 2021 | 2022 | 2023 |
Ataskaitinis periodas
Price, EUR
Total turnover
Average
Open
Max
Min
Last
Units
EUR
2023 I-IV quarters
0.381
0.390
0.570
0.296
0.310
6,480,225
2,469,780
Consolidated Annual Report 2023
28
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
Issure
AUGA group, AB
ISIN code
LT0000404238
Listing
Nasdaq Vilnius
Denomination
1 000 Eur
Issue size
20 000 000 Eur
Term
2019-2024
Maturity date
2024-12-17
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 0.43 million in 2023.
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.
Consolidated Annual Report 2023
29
2.8. Summary of 2023 Results and Outlook into 2024
The Group’s financial results have deteriorated significantly in 2023 compared to 2022. Agriculture segment had the biggest impact:
In 2023, the results of the crop growing segment deteriorated significantly. Timely and
proper seeding, favourable weather conditions during the winter season create positive
expectations for the 2024 harvest. Winter crops, which are less sensitive to climate
changes and therefore produce a larger and more stable harvest even in more difficult
conditions during spring or summer, will make up about 2/3 of the area of crops
intended for sale, compared to 1/2 in previous years. In 2024, about half of the area of
crops intended for sale will be cultivated in a conventional way. The yield of crops
grown this way is significantly higher than the yield of organic crops.
Despite the increase in production volumes, 2023 was not a successful year for the
dairy segment. Price correction will have a positive impact on the segment's results in
2024. It is planned that the overall result will improve next year due to the transition of
27% of dairy farming to the convention.
Higher selling prices and lower costs resulted in improved mushroom growing segment
results in 2023. The Group believes that in 2024 stable production volumes, current
cost/price level will be maintained and it will allow to achieve financial result.
In 2023, the fast moving consumer goods segment was mostly affected by the sale of
the main company in this segment. Preserved products have been partially replaced
by a new line of dairy products. In 2024, the Group will seek to grow the assortment of
the products and expand sales network.
2023 was a successful year in terms of developing and implementing new
technologies which will contribute to the achievement of the Group’s Strategy.
Successful 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 2024.
Information regarding important events after the end of the financial year is presented
in the explanatory notes of the financial statement (note 34).
Consolidated Annual Report 2023
27
3. Governance report
3.1 Governance Report
3.2 Share Capital Structure and Shareholders
3.3 The Board and its Committees
3.4 Management
3.5 Information on Transactions with Related Parties
3.6 Remuneration Report
3.7 Taxes and Regulatory Compliance
Consolidated Annual Report 2023
31
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.
There are three corporate bodies in the Company: the general shareholders’ meeting, the 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:
▪ consideration and approval of the Group‘s strategy
▪ consideration and approval of the Group‘s annual budget and business plan;
▪ consideration and approval of the risk level acceptable in the Group‘s activity and the risk management policy;
▪ consideration and 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.
GENERAL
SHAREHOLDER‘S
MEETING
Shareholder’s rights
BOARD
Management and
supervisory function
2 dependant and 3
independent members
CEO
Management and
organisation function
AUDIT
COMMITTEE
Advisory function
1 dependant and 2 independent
members of the Board
Consolidated Annual Report 2023
32
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.
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.
Nasdaq G2
GRI 2-9
GRI 2-11
GRI 2-12
GRI 2-13
GRI 2-10
GRI 2-14
GRI 2-18
Consolidated Annual Report 2023
33
3.2 Share Capital Structure and Shareholders
The share capital of AUGA group, AB as of 31 December 2023 was EUR 67.20 million (EUR 66.62 million on 31 December 2022). The Company's authorized capital consists of
231,735,132 ordinary registered shares (229,714,102 ordinary registered shares on 31 December 2022). 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 share option contracts in June 2023, which were signed in 2020 under the
employee share option programme.
Total number of shareholders on 31 December 2023 increased by 15.74% and was 3,442, while on 31 December 2022 this figure was 2,974.
Shareholders, who held more than 5% of all shares of the Company:
Shareholder‘s name
31 December 2023
31 December 2022
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
54.67
126,686,760
55.15
European Bank for Reconstruction and Development (identification code:
EBRDGB2LXXXX; address: One Exchange Square, London EC2A 2JN, United
Kingdom)
19,810,636
8.55
19,810,636
8.62
Žilvinas Marcinkevičius
15,919,138
6.87
15,919,138
6.93
Minority shareholders
69,318,598
29.91
67,297,568
29.30
Total:
231,735,132
100.00
229,714,102
100.00
Shareholders distribution by country and by type is as follows:
Country
Type
Owned shares, units
Owned shares, %
Lithuania
Legal entities
169,189,517
73.01%
Natural persons
11,860,797
5.12%
Other countries
Legal entities
31,560,429
13.62%
Natural persons
19,124,389
8.25%
Total:
Legal entities
200,749,946
86.63%
Natural persons
30,985,186
13.37%
On 31 December 2023, 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, %
Elina Chodzkaitė-
Barauskienė
CEO
25,000
0.011
Kristina
Daudoravičienė
Member of the Board
25,476
0.011
Kęstutis Juščius*
Chair of the Board
1,392
0.0006
*Kęstutis Juščius, CEO, is the ultimate owner of Baltic Champs Group, UAB, which controls 54.67% of the Company‘s shares.
None of the shareholders have special voting rights. There are no restrictions on
voting rights in the company.
Consolidated Annual Report 2023
34
3.2.1 Information on Own Shares
The Company has not acquired any of its own shares.
3.2.2 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.
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 2023 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 2023, the Group's activities were assessed by international
analyst companies: WOOD & Company and Enlight Research and. In 2023, AUGA
group organised 4 events for local and international investors, published 11 informative
newsletters. The Group actively communicated its activities by also using mass media.
Consolidated Annual Report 2023
35
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
.
2
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.
Based on legal acts and on the assessment carried out at the November 2023 Board
meeting:
▪ members of the Board (60%) Peter Bryde, Andrej Cyba and Justina Klyvienė
are considered as independent members of the Board.
▪ 2 Board members (40%) are considered as dependent members of the
Board: (i) Kristina Daudoravičienė is considered to be a dependent member
of the Board as she is a director and a member of the Board of Baltic Champs
Group, UAB, the controlling shareholder of the Company, as well as the CFO
of Baltic Champs, UAB, a company directly controlled by the Company; (ii)
Kęstutis Juščius is deemed to be a dependent member of the Management
Board as he is the sole owner and Chair of the Management Board of the
Company's controlling shareholder, Baltic Champs Group, UAB, as well as a
director of the Company's directly controlled company AUGA Community,
UAB and the Company's indirectly controlled company AUGA Tech, UAB.
60% of the Board members are male. Information about members of the Board until 28
April 2023 (Ordinary General Meeting of Shareholders):
Name, Surname
Position
Status
Appointment day
Andrej Cyba
Member
Independent
30.04.2021
Tomas Krakauskas
Member
Independent
30.04.2021
Dalius Misiūnas
Chair
Independent
30.04.2021
Murray Steele
Member
Independent
30.04.2021
Michaela Tod
Member
Independent
30.04.2021
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 the Nasdaq site.
The Board held 4 ordinary meetings from 1 January 2023 to 28 April 2023. During this
period, all 5 members of the Board attended all 4 meetings (a quorum was present at
all Board meetings in accordance with the law and the Articles of Association of the
Company).
On 28 April 2023, the term of the Board tenure ended, and a new composition of
Board was elected at the Ordinary General Meeting of Shareholders.
Information about members of the Board from 28 April 2023 to 7 November 2023:
Name, Surname
Position
Status
Appointment day
Ivars Bergmanis
Member
Independent
28.04.2023
Andrej Cyba
Member
Independent
28.04.2023
Dalius Misiūnas
Chair
Independent
28.04.2023
Murray Steele
Member
Independent
28.04.2023
Michaela Tod*
Member
Independent
28.04.2023
*Michaela Tod resigned as a member of the Board with effect from 17 September 2023
The Board held 5 ordinary meetings from 28 April 2023 to 7 November 2023. During
this period Ivars Bergmanis, Andrej Cyba, Dalius Misiūnas and Murray Steele attended
all 5 meetings and Michaela Tod attended 4 meetings (a quorum was present at all
Board meetings in accordance with the law and the Company's Articles of
Association).
On 15 September 2023, after a careful evaluation of the managerial needs associated
with the transformation towards a technology-sharing business model, the decision
was taken to convene an Extraordinary General Meeting of the Company on 7
November 2023 to renew the composition of the Board.
Consolidated Annual Report 2023
36
Information about the members of the Board as of 31 December 2023 (from 7 November 2023).
Name, Surname
Position
Status
Appointment day
Peter Bryde
Member
Independent
07.11.2023
Andrej Cyba
Member
Independent
07.11.2023
Kristina Daudoravičienė
Member
Dependent
07.11.2023
Kęstutis Juščius
Chair
Dependent
07.11.2023
Justina Klyvienė
Member
Independent
07.11.2023
The Board held 2 ordinary meetings from 7 November 2023 to 31 December 2023. During this period, all 5 members of the Board attended all 2 meetings (a quorum was present at all
Board meetings in accordance with the law and the Articles of Association of the Company). The current Board’s tenure is until the annual general meeting of shareholders of the
Company, which will take place in 2025.
Every year, the Board conducts an assessment of its activities. This evaluation includes an assessment of the Board's structure, work organization, and ability to function as a group,
as well as an assessment of the competence and effectiveness of each Board member's work and an assessment of whether the Board has achieved its set objectives. In 2023, after
the Group announced a new business model and operational structure, with the emergence of new competencies enabling the achievement of strategic goals, it was decided to
update the composition of the Board and supplement it with new members.
3.3.1 Board Members
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: Board member of AB „Vilkyškių pieninė“ (legal form: Public limited company, code 277160980, registered
address: Prano Lukošaičio g. 14, Vilkyškiai, Pagėgiai district municipality, Lithuania) (2008 – present); CEO of UAB Piola
(legal form: private limited liability company, code 120974916, registered office address: Mindaugo g. 16-52, Vilnius,
Lithuania) (2009-present); CEO of UAB “PEF GP1” (legal form: private limited liability company, code 302582709,
registered office address: Maironio g. 11, Vilnius, Lithuania) CEO of UAB “PEF GP2” (legal form: private limited liability
company, code 302582716, registered office address: Maironio g. 11, Vilnius, Lithuania) (2012 – 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); 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 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); Chairman of the Board of "VOKĖ-III", UAB (legal form: Limited liability company, code:
120959622, registered address: Piliakalnio str. 70, Nemenčinė, Lithuania) (2020 – present), CEO (2023 – present); Board
Member of SIA “Baltic Dairy Board” (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); CEO of UAB "V3 Installation Solutions" (legal
form: Private limited company, code 124100519, registered address: Pašilaičių g. 14-74, Vilnius, Lietuva) (2023 – present).
GRI 2-9
GRI 2-10
GRI 2-11
Consolidated Annual Report 2023
37
Peter Bryde
Education, qualification: Copenhagen Business School, Business Administration bachelor’s degree, Finance and Accounting
master’s degree; attended the Agricultural Business Seminar at Harvard University (2011).
Activity: Member of the Board of AUGA group, AB (legal form: Public limited company, code: 126264360, registered address
Konstitucijos ave. 21C, Vilnius, Lithuania) (2023 – present).
Kristina Daudoravičienė
Education, qualification: Vilnius University, Master of Economics degree.
Activity: Member of the Board of AUGA group, AB (legal form: Public limited company, code: 126264360, registered address
Konstitucijos ave. 21C, Vilnius, Lithuania) (2023 – present).
Miscellaneous: CEO, member of the board of Baltic Champs Group, UAB (legal form: Private limited company, code:
145798333, registered address: Poviliškių k. Šiauliai district municipality, Lithuania) (2013 – present); CFO of Baltic Champs,
UAB (legal form: Private limited company, code: 302942064, registered address: Poviliškių k.15, Šiauliai district municipality,
Lithuania) (2013 – present); CEO of TECHNOLOGY INVEST, UAB (legal form: Private limited company, code: 304539998,
registered address Kalvarijų g. 143-304, Vilnius,, Lithuania) (2017 – present).
Kęstutis Juščius (Chair)
Education, qualification: Vilnius University, Business Administration, bachelor’s degree.
Activity: Chair of the Board of AUGA group, AB (legal form: Public limited company, code: 126264360, registered address
Konstitucijos ave. 21C, Vilnius, Lithuania) (2023 – present).
Miscellaneous: Chair 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); CEO of AUGA Community, UAB (legal form: Private limited company, code: 302820797, registered
address Konstitucijos ave. 21C, Vilnius, Lithuania) (2022 – present); CEO of AUGA Tech, UAB (legal form: Private limited
company, code: 302820808, registered address: Taikos ave.131b Kaunas, Lithuania) (2023 – present).
GRI 2-9
GRI 2-10
Consolidated Annual Report 2023
38
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.
The changes in the composition of the Audit Committee during 2023 are due to changes in the composition of the Board.
Information about members of the audit committee until 28 April 2023:
Name, Surname
Position
Status
Andrej Cyba
Chair
Independent
Murray Steele
Member
Independent
Michaela Tod
Member
Independent
Information about members of the audit committee from 7 November 2023:
Name, Surname
Position
Status
Ivars Bergmanis
Member
Independent
Andrej Cyba
Chair
Independent
Murray Steele
Member
Independent
Justina Klyvienė
Education, qualification: Vilnius University Institute of International Relations and Political Science, Master of European
Public Administration bachelor’s and master’s degrees; BI Norwegian Business School, Master of Management for
Executives degree.
Activity: Member of the Board of AUGA group, AB (legal form: Public limited company, code: 126264360, registered
address Konstitucijos ave. 21C, Vilnius, Lithuania) (2023 – present).
Miscellaneous: CEO of UAB "ORP" (legal form: Private limited company, code: 122087425, registered address: Padvarės
g. 69, Vilnius, Lithuania) (2017 – present); Head of development of VšĮ Alter State (legal form: public institution, code
305619931, registered office address: Laisvės pr. 71-14, Vilnius, Lithuania) (2019 – present); Board member of Viešoji
įstaiga Inovacijų agentūra (legal form: public institution, code 125447177, registered office: Juozo Balčikonio g. 3, Vilnius,
Lithuania) (2022– present).
Consolidated Annual Report 2023
39
Information members of the audit committee as of 31 December 2023:
Name, Surname
Position
Status
Peter Bryde
Member
Independent
Andrej Cyba
Chair
Independent
Kristina Daudoravičienė
Member
Dependent
During 2023, 7 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
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
2023.
Elina Chodzkaitė-Barauskienė CEO (2023 – present)
Education, qualification: Diplomatic Academy of Vienna, Master of Advanced International Studies, University College London
(UCL), Bachelor of Arts (BA) in Politics and Eastern European Studies.
Activity: CEO of AUGA group, AB (legal form: Public Limited Company, code: 126264360, registered address: Konstitucijos ave.
21C, Vilnius, Lithuania) (2023 – present).
Miscellaneous: Director of MB Digital Alchemy (legal form: Small partnership, code: 305532412, registered address: S.
Stanevičiaus g. 42A, Vilnius, Lithuania) (2022 - present).
Other key management personnel (who have left office) in the period 2023:
▪ CEO Kęstutis Juščius (2019 - November 2023).
▪ CFO Mindaugas Ambrasas (2020 - August 2023).
GRI 2-9
Consolidated Annual Report 2023
40
3.6 Remuneration Report
The Remuneration Report of the Company has been prepared for the financial
reporting year 2023, 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 28 April 2023, 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 2,280 (before taxes) for the members of the Board, and EUR 3,000
(before taxes) for the Chair of the Board, irrespective of the annual number of
the Board meetings;
▪ For the Board members living abroad – compensation of travel and
accommodation costs for/during attendance of the board meeting – not
exceeding EUR 500 + VAT (Lithuanian tariff) in respect to one Board meeting
in which he/she participated; if the Board member participates in a meeting
via communication/IT measures (not physically traveling to Lithuania), travel
costs compensation shall not be paid for such participation.
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.
Consolidated Annual Report 2023
41
The amount of accrued fixed remuneration for the Board members is provided in the table below:
On April 28, 2023, at the Company's general meeting of shareholders, in accordance with usual practice, a new Board was elected, which is elected every two. This is reflected in the first
part of the Company's Board members' remuneration table. Following a change in the Group's business model, at the extraordinary general meeting of shareholders on 7 November 2023,
the Company's Board was withdrawn before the end of the term and the new Board members were elected, whose remuneration is shown in the second part of the table.
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.
Remuneration of the individual members of the Board, EUR
2023
2022
2021
2020
2019
Dalius Misiūnas, Chair of the Board (30.04.2019 – 07.11.2023)
10,000
32,500
27,500
30,000
17,500
Andrej Cyba (17.06.2019 – 07.11.2023)
21,280
24,700
19,000
22,800
13,300
Tomas Kučinskas (30.04.2019 – 30.04.2021)
-
-
5,700
20,900
13,300
Murray Steele (30.04.2019 – 07.11.2023)
21,280
24,700
20,900
23,572
16,447
Tomas Krakauskas (30.04.2019 – 28.04.2023)
7,600
24,700
20,900
20,900
13,300
Michaela Tod (30.04.2019 – 17.09.2023)
16,720
24,700
13,300
-
-
Ivars Bergmanis (28.04.2023 – 07.11.2023)
13,680
-
-
-
-
Total:
90,560
131,300
107,300
118,172
73,847
Remuneration of the individual members of the Board, EUR
2023
2022
2021
2020
2019
Kęstutis Juščius, Chair of the Board (07.11.2023 – present)
6,000
-
-
-
-
Andrej Cyba (07.11.2023 – present)
5,793
-
-
-
-
Peter Bryde (07.11.2023 – present)
4,560
-
-
-
-
Justina Klyvienė (07.11.2023 – present)
4,560
-
-
-
-
Kristina Daudoravičienė (07.11.2023 – present)
5,539
-
-
-
-
Total:
26,451
-
-
-
-
Consolidated Annual Report 2023
42
The table below summarises gross salaries and payments for legal services for the Board members:
Remuneration paid to members of the Board, EUR
2023
2022
2021
2020
2019*
Total remuneration
117,011
131,300
107,300
118,172
202,717
Number of Board members
10
5
5
5
5
Average annual remuneration per 1 member
11,701
26,260
21,460
23,634
38,009
*Remuneration amounts in 2019 include both payments to Board members and salaries of employees of the Group who were also Board members until 30 April 2019.
2 members of the Company's Board received remuneration from the Company's subsidiaries during 2023. During the reporting period (7 November to 31 December), Kristina
Daudoravičienė, a member of the Board, received a remuneration of EUR 6,893 (before tax) from Baltic Champs, UAB for her position as CFO. Kęstutis Juščius, Chair of the
Board, received a remuneration (before tax) of EUR 13,911 from AUGA Community, UAB for his position as a Director during the reporting period (7 November to 31 December).
No share options were granted to members of the Board in 2023. The Company did not pay variable remuneration to the Board members in 2023.
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
2023
2022
2021
2020
2019
CEO
7,728
7,498
7,584
7,222
7,174
Managers
3,787
3,710
3,414
3,431
3,363
Specialists
2,196
2,036
1,893
1,793
1,641
Workers
1,425
1,243
1,209
1,168
1,122
Other indicators
2023
2022
2021
2020
2019
Average gross salaries of the employees of the Group (before
taxes), EUR
1,707
1,509
1,469
1,405
1,308
Net profit (loss), th. EUR
(18,447)
(5,351)
(15,435)
1,792
(3,218)
Kęstutis Juščius, who was the Chief Executive Officer of the Company until 7 November 2023, is the main shareholder of the Company through UAB Baltic Champs Group, UAB, has
not received variable remuneration and has not been granted share options.
Elina Chodzkaitė-Barauskienė did not receive variable remuneration when she became the Company's Chief Executive Officer on 7 November 2023 and no share options were
granted during 2023. More information about the Group’s personnel is presented in the AUGA group’s Sustainability Report section 4.4.2. Employees and Diversity.
Consolidated Annual Report 2023
43
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.
The number of contracts in 2023 was 186, and the number of shares – 2,021,030.
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:
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.
2023
2022
2021
Number of participating
employees
255
238
235
Number of allocated shares
2,199,523
1,651,185
2,381,701
GRI 2-27
Consolidated Annual Report 2023
44
4. SUSTAINABILITY REPORT
4. Sustainability Report
4.1 About the Sustainability Report
4.2 Our Approach to Sustainability
4.3 Environment
4.4 Employees and Social Responsibility
4.5 GRI Indicators
4.6 Nasdaq ESG Indicators
4.7 UN Global Compact Indicators
4.8 Independent Auditor’s Conclusion on the Emissions Report
4.9 Independent Auditor’s Conclusion on the Sustainability Report
Consolidated Annual Report 2023
45
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 2023 covers the activities of
all the Group’s companies in the period from 1 January until 31 December 2023. In
order to objectively assess the dynamics of activity changes, AUGA group also
includes data from previous years. The Sustainability Report for 2023 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 2023 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 2023).
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 2023, 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.
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. The full Sustainability Report was audited for a
third time by an independent consulting company Sustain Advisory in 2023.
The contact person responsible for sustainability is Elzė Laužikaitė, Sustainability
research specialist of AUGA group (e.lauzikaite@auga.lt).
Nasdaq G8
Nasdaq G9
Nasdaq G10
GRI 2-3
GRI 2-4
GRI 2-5
GRI 3-1
GRI 3-2
GRI 3-3
Consolidated Annual Report 2023
46
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 (until September 2023, this position were held by Michaela Tod. From
2024, responsibilities were taken over by Kęstutis Juščius, Chair of the Board of the
newly elected Board.). 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. In 2023, members of the Group's highest governing body (the Board) and the
management team did not have specific training in the field of sustainability.
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.
GRI 2-14
GRI 2-16
Consolidated Annual Report 2023
47
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.
Globally, agriculture is responsible for more than 20% of the world’s greenhouse gas
emissions. Working in this sector and having a deep understanding of market and
global demand for emissions reduction, AUGA group takes leadership in addressing
this pressing 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 sustainable technology development strategy is being consistently implemented
by creating machinery powered by alternative fuels, specialized feed technologies, and
deploying biomethane infrastructure. There was significant progress made in this area
in 2023. Read more about it in section 1.4.2 Implementation of the Strategy.
The Group aims for its innovative solutions to be widely applicable and enable all
farmers to work more sustainably, thus providing consumers with the option to choose
food with no cost to nature. In implementing this part of the strategy in 2023, a new
organizational structure was created, allowing sustainable agricultural technologies to
be applied in farms on a cooperative basis, thereby reducing agricultural emissions.
To ensure economies of scale and to reach a wider circle of farmers, in 2023, the
Group converted part of organic land to conventional regenerative practices. Also the
Group will invite farmers to join the sustainable farming community and has
restructured its existing operations into 11 cooperatives to enable this. This will ensure
greater expansion of AUGA's sustainable farming standard and significantly reduce
agricultural emissions not only in organic but also conventional farms.
Social issues are an important part of the Group's activities. Significant issues include
ensuring employee safety and health, working conditions and compensation, additional
employee incentives, employee diversity and equal opportunities, community
engagement, product safety and nutritional value for consumers, and consumer
education in sustainability. These issues are addressed through existing company
policies, practices, and programs. It is important to note that at present, the Group
does not set specific targets in the social area.
The Group also applies good governance practices through the Board model, adheres
to approved policies within the Group (business ethics, animal welfare, supplier code
of ethics, bribery and corruption prevention), and aims to ensure transparency towards
investors and other stakeholders. Policies are reviewed as needed and updated.
The significance of key environmental, social, and governance issues is regularly
reviewed every two years, prioritizing them accordingly. For more information, please
refer to Section 4.2.4 Assessment of Dual Significance of Sustainability Criteria.
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
Consolidated Annual Report 2023
48
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 medicine
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
Resources efficiency of products and services
Material 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
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:
Consolidated Annual Report 2023
49
4.2.3 Stakeholders
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 new
▪ 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
GRI 2-12
GRI 2-29
Consolidated Annual Report 2023
50
4.2.4 Double Materiality Assessment of Sustainability Criteria
To date, the Group has conducted a biennial assessment of the materiality of sustainability criteria. This assessment is conducted with stakeholders and with the management team
and Board members of AUGA group Through anonymous surveys, these assessments determine the importance of key sustainability criteria for all groups. The last of these
assessments was conducted in 2021.
In 2023, in light of the new requirements of the EU Sustainability Reporting Standard (under the EU CSRD directive), which comes into effect in 2024, the Group decided to conduct a
a double materiality assessment this year, according to future methodologies. The new assessment was conducted with the involvement of AUGA group’s management team and
members of the Board. Participants' opinions were gathered through anonymous surveys. The leadership team and Board members evaluated sustainability criteria based on aspects
of the Group's environmental and stakeholder impact, and the financial impact on the Group. Subsequently, a review of the received matrix was conducted.
Double Materiality Matrix of Sustainability Criteria, According to the Evaluation Conducted in 2023:
Environmental criteria
E1. Climate change and emissions
E2. Renewable energy
E3. Earth, air and water pollution
E4. Water resources
E5. Biological diversity and ecosystems
E6. Circular economy (reduce, reuse, recycle)
Social criteria
S1. Work conditions and renumeration
S2. Employees health and safety
S3. Employees diversity and equal rights
S4. Ensuring employees human rights
S5. Relations with communities
S6. Consumer health and safety
S7. Consumer education in the field of sustainability
Governance criteria
G1. Company's values and culture
G2. Business ethics
G3. Animal welfare
G4. Relations with suppliers
G5. Corruption and bribery prevention
G6. Innovation and technology leadership
GRI 2-12
GRI 2-29
Financial Significance
Impact
Significance
Consolidated Annual Report 2023
51
The assessment conducted indicates that climate change and
emissions is a pivotal criterion where the Group can have a direct
impact through its activities. This criterion also has significant
financial implications for the entire organization. That is why,
reducing emissions and implementing innovative technologies have
been key priorities of the Group for several years. Additionally,
renewable energy remains a significant priority for the management
team of AUGA group and members of the Board in the
environmental field (both in terms of impact significance and
financial significance). So too does pollution of land, air, and water
(in terms of impact significance), circular economy (both in terms of
impact significance and financial significance), biodiversity, and
ecosystems (in terms of impact significance).
According to the 2023 assessment, it is evident that the most
significant social criteria in terms of impact on the environment and
stakeholders are consumer safety and health, as well as consumer
education in sustainability. Food safety has always been and
remains a daily priority in both AUGA group’s own production and
in contract manufacturing, and employees responsible for food
safety are part of the Group's organizational structure. Additionally,
in the opinion of the management and Board members of AUGA
group, employee safety and health, as well as working conditions
and compensation, are important criteria in the impact area.
Reflecting this priority, the Group operates a system for Employee
Health and Safety, and provides additional health insurance to
employees. Participants in the financial impact assessment
highlighted the following criteria: working conditions and
remuneration, consumer and employee safety and health.
The most important governance criteria in terms of impact on the
environment and stakeholders were identified as business ethics,
innovation and technology leadership, animal welfare, and supplier
relations. In the financial impact area, the following governance
criteria were highlighted: innovation and technology leadership,
relations with suppliers, and compliance and transparency.
GRI 2-12
GRI 2-29
Consolidated Annual Report 2023
52
4.2.5 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.
1
Share of suppliers informed about the policy, calculated based on purchasing turnover in 2023.
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 2023, no complaints were received or violations recorded regarding any policies
approved by the Group. Upon receiving a complaint at the email address etika@auga.lt regarding
the situation at hand, the manager responsible for the respective area is promptly informed,
depending on the nature of the complaint. They are required to formulate a plan for resolving the
situation and implement it within the specified timeframe 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. The Group has not envisaged other complaints management processes.
Stakeholders are not involved in the complaint creation mechanism or its improvement.
In 2023, all new employees (411 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
participation, %
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
88.8
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
88.8
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
88.8
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
88.0
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
88.8
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
88.8
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
1
Nasdaq S9
Nasdaq S10
Nasdaq G5
Nasdaq G6
GRI 2-15
GRI 2-23
GRI 2-24
GRI 2-25
GRI 2-26
GRI 406-1
Consolidated Annual Report 2023
53
4.2.6 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.
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. In 2023, the Group received a C which is in the Awareness band.
4.2.7 Memberships and Partnerships
Active involvement in associations, the exchange of best practices, and addressing
emerging sustainability challenges remain pivotal for AUGA Group. The Group has
maintained its membership in key organizations, including the Lithuanian
Association of Agricultural Companies (LŽŪBA), the Lithuanian Organic Farmers
Association (LEŪA) and the Baltic Institute of Corporate Governance (BICG). Baltic
Champs, a subsidiary of the Group, aligns itself with the Lithuanian Association of
Mushroom Growers and Processors (LGAPA), while AUGA Luganta is affiliated
with the Lithuanian Vegetable Growers Association. In 2023, the Group was also a
member of the Responsible Business Association of Lithuania.
In its dedication to fostering the education of young professionals on various
sustainability issues and enhancing its image as an attractive employer, the Group
has consistently partnered with various educational institutions. AUGA Group
collaborates with esteemed Lithuanian universities, including 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.
GRI 2-28
Consolidated Annual Report 2023
54
4.2.8 Taxonomy Review
The Taxonomy Regulation (EU) 2020/852 and its implementing acts have
established a system for classifying sustainable economic activities and
investments. It defines activities that are considered to significantly contribute to
environmental objectives, thereby contributing to the implementation of the
European Green Deal. Companies are required to disclose the portion of their
activities that are sustainable, as measured by revenue, CAPEX (investments), and
OPEX (operating expenses) indicators.
According to the provisions of Article 8 of the Taxonomy Regulation, companies
established in Europe with more than 500 employees must provide a Taxonomy
report. AUGA group falls within this category. When submitting the report for the
year 2023, an assessment was made to determine which of the Group's economic
activities are eligible for Taxonomy and which of these activities are aligned with
the requirements for sustainable activities. Currently, agricultural and food
production activities are not included and classified in the current version of the
Taxonomy Regulation and its implementing acts. Therefore, although the Group
engages in organic and regenerative conventional farming and applies principles of
sustainable agriculture, it cannot disclose which core activities of the Group meet
the requirements of the Taxonomy. This compliance will be disclosed once the
European Commission prepares technical analysis criteria for agricultural and food
production activities. Until then, compliance will be disclosed for non-core group
activities that are currently classified under the Taxonomy and can be evaluated for
their alignment.
The first technical screening criteria that were approved for activities that contribute
to climate change mitigation or adaptation. The European Commission adopted a
final delegated act for the remaining four objectives – sustainable use and
protection of water and marine resources; transition to a circular economy; pollution
prevention and control; protection and restoration of biodiversity and ecosystems –
in June 2023. This means that from 2024 onwards, companies must disclose the
application of new Taxonomy environmental objectives for the previous year (in this
case, 2023), and from 2025 onwards, and alignment with the Taxonomy regarding
these objectives must be disclosed.
Accounting policy
The Group's financial statements are prepared in accordance with the International
Financial Reporting Standards (IFRS) adopted for use in the European Union (EU).
For more information, please refer to the section on Consolidated and Separate
Financial Statements in the Summary of Significant Accounting Policies.
Taxonomy Eligibility
In preparing the Taxonomy review, AUGA group assessed which economic
activities of the Group meet the requirements according to the standards proposed
for other industries. Economic activities relevant to the Group, which currently fall
under taxonomy classification and can be assessed for their alignment with the
Taxonomy sustainability criteria, include:
▪ construction of new buildings (NACE code – F41);
▪ renovation of existing buildings (NACE code – F41, F43);
▪ electricity generation using solar energy (NACE code – D35.11);
▪ transport by motorcycles, passenger cars, and light commercial vehicles
(NACE code – H49.39);
▪ freight transport by road (NACE code – H49.4.1);
▪ scientific research and development (NACE code – M72);
▪ recovery of bio-waste by anaerobic digestion or composting (NACE code
– E38.21);
▪ conservation and restoration of ecosystems and species therein.
Taxonomy Alignment
For all activities, except for those newly added this year (recovery of bio-waste by
anaerobic digestion or composting and conservation and restoration of ecosystems
and species therein), an assessment of compliance with the Taxonomy
Regulation's sustainability criteria was conducted according to the following rules:
▪ whether the activity substantially contributes to one of the six
environmental objectives,
▪ whether no significant harm is done to the remaining environmental
objectives,
▪ whether the activity meets minimum standards of social responsibility.
The Group's scientific research and development activities, aimed at creating
adaptable technological solutions to implement climate-neutral food production
processes, meet all of the Taxonomy compliance criteria. The activity contributes to
two specified environmental objectives - climate change mitigation and adaptation -
without causing significant harm to remaining objectives and meets minimum social
safeguards.
Consolidated Annual Report 2023
55
Do no Significant Harm Criteria
The Group's scientific research and development activities do not have negative
impacts, direct or indirect, on any of the all six environmental objectives outlined in
Article 17 of the Taxonomy Regulation. An activity is considered to cause
significant harm if:
▪ It results in a large quantity of greenhouse gases (GHGs) being emitted (climate
change mitigation)
▪ It increases the current and future adverse effects of climate on the activity itself
or on humans, nature, or assets (climate change adaptation)
▪ It damages water bodies, including surface water and groundwater, affecting their
good status, good organic potential, or the good status of marine waters
(sustainable use and protection of water and marine resources)
▪ It inefficiently uses materials or significantly depletes natural resources, leading to
a significant increase in waste generation, incineration, or disposal, or if long-term
waste disposal could cause significant long-term harm to the environment
(transition to a circular economy)
▪ It significantly increases the number of pollutants emitted into the air, water, or
soil (pollution prevention and control)
▪ It significantly harms the good condition and resilience of ecosystems or habitats
and species, including those of European Union importance (protection and
restoration of biodiversity and ecosystems).
Minimal Social Safeguards
The Group's activities comply with social responsibility standards – it follows seven
policies that enable transparent relationships with all stakeholders. The Group's
policies – Code of Business Ethics, Environmental Policy, Human Rights, Non-
Discrimination, Child Labor, and Forced Labor Policy, Animal Welfare Policy,
Corruption and Conflict of Interest Prevention Policy, Employee Health and Safety
Policy. Supplier Code of Ethics - are based on corporate best practices and on
principles aimed at ensuring social guarantees for all parties. The Group's policies
are developed based on principles that align with the Universal Declaration of
Human Rights, the European Convention on 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, key International Labour Organization conventions,
and other international and Lithuanian laws. More information about these policies
can be found in section 4.2.4 Policies.
1
This number consists of investments in long-term tangible assets excluding employee wages.
KPI‘s
None of the Group's economic activities that are currently subject to the Taxonomy
involve commercial activities generating sales. Therefore, according to the current
Taxonomy criteria, the application and compliance based on revenues are both
equal to 0%. The same applies to OPEX.
For activities that are subject to the Taxonomy, CAPEX in 2023 amounted to a total
of EUR 7.200 million, which equals 99.4% of total CAPEX (EUR 7.238 million). The
CAPEX for all Group research and development activities meeting the Taxonomy
criteria in 2023 amounted to EUR 3.185 million, which is 44% of the total CAPEX.
1
The alignment of the Group's revenues, OPEX, and CAPEX with the Taxonomy
application and compliance criteria is presented in the following graphs:
EUR 14,9
million
0.6%
99.4%
44%
CAPEX
Non-eligible
Eligible
Aligned
EUR 81.4
million
Turnover
OPEX
Consolidated Annual Report 2023
56
4.3.
Environment
Consolidated Annual Report 2023
57
water used
4.3.1 Our Activities and Achievements in 2023
1
1
Comparisons are to 2022. Indicators were recalculated retrospectively.
2
All crops but fodder included in the calculation.
waste generated
factory version of the
AUGA M1
was introduced, testing began
infrastructure completed
feed technology trials showed
methane emissions per l of raw milk
share of crops that are leguminous
2
20.1%
20.7%
energy consumed
2.9%
17%
invested in R&D
emission intensity per t of crop production
16.0%
10.3%
emission intensity per t of ECM milk
1.8%
emissions from operations
6.4%
Consolidated Annual Report 2023
58
4.3.2. Organic Farming and Sustainability Practices
AUGA group has been systematically reducing the environmental impact of its core activities since 2015, when it made a strategic decision to move from conventional agriculture to
organic farming and began transforming farms in the various regions of Lithuania. For several years, AUGA group has been investing in the development and implementation of
emission-reducing technologies in its production activities and exploring production methods that leave a smaller agricultural footprint on the environment. To broaden that positive
impact, in 2023 the Group began implementing more sustainable practices and technologies in conventional agriculture, converting some of the company's organic lands to
conventional land. This step will facilitate the use of innovative agricultural technologies among farmers practicing different farming methods. On its own farms, AUGA group
implements:
Min-till technologies. In using these technologies, only the surface layer of the soil is cultivated. This protects the soil from erosion, helping to preserve its fertile layer and the
microorganisms contained in it, and reduces the consumption of fossil fuels.
Green energy. AUGA group farms and all its companies use only certified green electricity. Part of the energy from renewable sources is produced internally by the group.
Long-term crop rotation. Under the crop rotation plan, a minimum of four different crops are cultivated over a period of seven years. This practice enhances soil quality and
promotes biodiversity. The annual expansion of areas dedicated to perennial grasses and leguminous crops allows for a reduction in the reliance on fertilisers and in emissions.
More sustainable animal husbandry. To enhance animals’ well-being, AUGA group gives them access to the outdoors, allowing grazing in pastures during the summer. Cow feed
is based on perennial leguminous grasses, which offer a more sustainable and lower-emission alternative to commonly used grains, corn silage, or soybeans.
A closed-loop organic farming method. We ensure synergies across the different agricultural sectors and secondary use of organic waste. Fodder grown in the crop segment
serves as animal feed, while straw is used for mushroom compost. Organic waste (manure) generated in the dairy segment is used as fertiliser in crop production and, in the
mushroom growing segment, to produce compost. Beginning in 2024, manure will also be utilised for biomethane production, and the resulting by-product, digestate, will be used
to fertilise fields.
Precise fertilisation. To diminish the soil’s annual intake of nitrogen and other mineral substances, soil tests are carried out, enabling accurate determination of plant fertilisation
requirements and the formulation of optimal fertilisation maps.
On AUGA group’s organic farms, pesticides and other chemical substances are not used, and only natural fertilisers are used.
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 strives to protect and improve biodiversity in the following ways:
In its organic agriculture activities, the group does not use any chemical pesticides or other chemical products for plant protection. In conventional fields, it prioritises natural plant
protection measures, such as crop rotation, mechanical weed control, and selection of resistant seeds.
Based on soil analyses, it optimises the use of mineral fertilisers and gradually reduces the need for fertiliser by implementing crop rotation and expanding areas with leguminous
crops capable of nitrogen fixation and carbon sequestration in the soil.
A long-term crop rotation plan is followed, under which at least four different crops are grown over seven years.
Consolidated Annual Report 2023
59
Where fertilisers are used, the group works to minimise fertiliser washout to water bodies and only fertilises in certain periods of time, also respecting water body protection zones; it
incorporates organic fertilisers into the soil.
The group carefully identifies the prescribed protection zones for irrigation channels and water bodies and manages them extensively.
In fields with wetlands or peat bogs, the group applies only minimum tillage cultivation (min-till) and/or extensive agricultural practices.
The group strives to maximize the use of min-till farming technology.
The aim is to allocate a minimum of 30-50% of crop rotation area to flowering plants (leguminous plants, grasses) which are beneficial for pollinators and to collaborate with
beekeepers to place beehives in the vicinity of these flowering fields.
In the winter season, the group leaves at least 50% of cropland area covered with crops, intermediate crops, or crop residues. This practice reduces soil erosion, enriches the soil
with nutrients, enhances soil microbiological activity, and increases the biomass of earthworms.
To mitigate eutrophication* and prevent the deterioration of natural water ecosystems, the group commits to creating intermediate crop mixtures based on the specific crop rotation
plan and soil condition of each field. The plants are chosen to maximize the absorption of excess nitrogen.
The group cultivates a portion of cereal crops together with undersown cover crops (fodder grasses) to enrich the soil with biological nitrogen and organic matter. As these materials
slowly decompose, they provide nourishment for soil biodiversity and increase the amount of sequestered carbon.
In fields located within protected areas, the group maintains perennial meadows or pastures, limits the number of grazing animals, and ensures the preservation of the existing
hydrological regime.
The roots of individual trees growing in fields are protected at the canopy** perimeter. Such solitary trees play a crucial role in providing wildlife with stepping stones between healthy
habitat patches. In such locations, insects that settle or established fungal spores can later spread further into another territory.
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 to 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
Consolidated Annual Report 2023
60
Activities in protected areas
To ensure the protection of biodiversity on the Group's cultivated lands, an inventory
was conducted in 2023 to identify areas of high natural value for farming and the
species therein. AUGA group conducts agricultural activities on 338 hectares of land
within the network of nature protection areas "Natura 2000", accounting for less than
1% of all land cultivated by the Group.
“Natura 2000" is a European network of protected areas aimed at preserving,
maintaining, and, if necessary, restoring natural habitats, species of animals, and
plants within the European Community territory. In Lithuania, these areas cover about
14% of the land area
1
. AUGA group does not engage in agricultural activities in areas
where they are prohibited due to strict protection regulations. The Group's cultivated
lands within the "Natura 2000" network mostly fall into areas where extensive farming
requirements apply - the number of grazing animals is limited, the existing hydrological
regime is maintained, haymaking is allowed only in certain seasons, and perennial
meadows and pastures are preserved.
To adapt farming methods so that they do not pose a threat to habitat and species
distribution ranges and further contribute to preserving ecosystem diversity, national
data on protected areas are reviewed annually.
1
State service for protected areas under Ministry of the Environment, 2023 December.
Cultivated land falling within "Natura 2000" territory (ha)
Region
Special Areas
of
Conservation
Special
Protection
Areas for birds
In total, across
either site type
Akmenė district municipality
25
25
25
Alytus district municipality
69
69
69
Anykščiai district municipality
<1
<1
Jurbarkas district municipality
51
51
Kalvarija municipality
106
141
141
Kėdainiai district municipality
40
40
Mažeikiai district municipality
1
<1
1
Panevėžys district municipality
5
5
5
Radviliškis district municipality
6
6
Šakiai district municipality
<1
<1
Total:
264
280
338
* Prepared using publicly available data from the State Service of Protected Areas. Habitat and bird important
protection areas often overlap, with land areas in each type of territory listed separately in the table.
GRI 304-1
Consolidated Annual Report 2023
61
4.3.4 Greenhouse Gases
Greenhouse Gas Accounting and Reporting
AUGA group has been calculating its greenhouse gas emissions (GHG) generated in
its operations since 2018. The GHG accounting undergoes annual verification by
independent auditors according to the ISO14064-3 standard. In 2020, the Group
established targets for the reduction of its GHG emissions, also implementing
measures to achieve them and adopting 2019 as the base year against which future
GHG emissions are measured. In 2021, AUGA group joined the Science-Based
Targets initiative (SBTi) to align its goals with the latest scientific recommendations.
In 2023, the group initiated significant structural changes: (1) it converted one-third of
its arable land to regenerative conventional agriculture; (2) it established 11
cooperatives to enable more farmers to adhere to AUGA's sustainable farming
standard; and (3) it sold the company Grybai LT which produced canned products for
final consumption. In light of these structural and functional changes during the
reporting period, the group fundamentally reviewed its emission calculation
methodology. New sources of GHG emissions were included due to the conversion to
regenerative conventional agriculture. The emission, energy consumption, water, and
waste accounting presented in this document for 2023 includes data from the first half
of 2023 from the company Grybai LT, which was sold on July 21, 2023 to Kauno
Grūdai.
To align the GHG calculation methodology with the latest recommendations for
agricultural sector companies, new GHG emission sources from Land Use, Land-Use
Change, and Forestry (LULUCF) sector were included in the group's accounting
1
. The
LULUCF sector focuses on the carbon cycle — carbon movement between the
atmosphere and the terrestrial biosphere. This sector includes both carbon dioxide
emissions and carbon sequestration in biomass and soil. AUGA group does not
engage in forestry activities or contribute to land-use change (e.g., draining of
peatlands), hence, the Group's LULUCF emissions include (1) emissions released
from soil to the atmosphere and (2) carbon sequestration in the soil. In modelling the
changes in soil organic carbon stocks, consideration was given to the land cultivation
practices and their intensity in each field. The group's accounting also encompasses
historically drained organic soils under cultivation, which represent approximately 1.1%
of all cultivated lands in Lithuania and 6.2% of the area of perennial meadows
2
.
For a more precise calculation of GHG emissions, a detailed accounting of livestock
activities was implemented, taking into consideration the manure management system
for each farm and barn.
The GHG emissions for 2022 were retrospectively recalculated using the updated
methodology. However, recalculating indicators older than two years (<2022),
according to the new methodology would be inaccurate; that would require data not
previously collected in the Group, and some relevant business activities were not
conducted. The base year established in the Group's strategy (2019) cannot be
retrospectively recalculated and used for annual emission comparisons. For these
reasons, a decision was made to review AUGA group’s emission reduction targets in
2024. The GHG accounting for 2023 reflects only half of the season in the new
operating model, as structural changes within the Group – transitioning to conventional
agriculture, establishing cooperatives, and selling Grybai LT – took place in the middle
of the year. The Group aims to set comprehensive emission reduction targets
reflecting climate change scenarios. Therefore, in 2024 the Group will collect the
missing data for new business activities, conduct a detailed accounting of indirect
emissions (Scope 3), and review its reduction targets to align with the latest scientific
recommendations with the aim of limiting global warming to 1.5°C.
1
SBTi Forest, Land and Agriculture (FLAG) Guidance (2023)
2
Lithuania National Inventory Report for years 1990-2021 (2023)
Nasdaq E1
GRI 305-1
GRI 305-2
GRI 305-3
GRI 305-5
Consolidated Annual Report 2023
62
Annual GHG Emissions
Emissions, t CO
2
e
2023
2023
(w/o LULUCF)
2022
1
2022
1
(w/o LULUCF)
Scope 1
76,192
72,069
81,181
72,065
Scope 2
2
4
5
Scope 3
3
4,535
5,020
Total:
80,731
76,608
86,206
77,090
1
GHG emissions for the year 2022 were retrospectively recalculated.
2
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
2023 would be 84,424 t CO
2
e, in 2022 it would be 89,734 t CO
2
e.
3
Incomplete scope (refer to Methodology).
In 2023, AUGA group recorded a reduced environmental footprint of 4,990 t CO
2
e, or
6.4% less than in 2022. The decrease in overall GHG emissions was primarily due to:
(1) sustainable land cultivation practices such as minimal tillage and extensive field
grazing, resulting in a 55% reduction in Land Use, Land-Use Change, and Forestry
(LULUCF) emissions (4,994 t CO
2
e less); (2) decreased consumption of fossil
fuels, leading to 4% less emissions (801 t CO
2
e less); (3) 2% lower soil emissions
(404 t CO
2
e less), attributed to the use of organic and inorganic fertilizers, as well as
crop residues in fields after harvest. The implementation of long-term, regenerative
crop rotations and optimised fertiliser use has led to a consistent annual decrease in
nitrogen (N) fertiliser consumption. These three categories collectively constitute
63.5% of all emissions within Scope 1.
Scope 1 sources
2023
2023
(w/o LULUCF)
2022
1
2022
1
(w/o LULUCF)
Crop & feed production
32.6%
34.5%
31.1%
35.0%
Enteric fermentation
26.0%
27.5%
24.1%
27.1%
Fossil fuel use
25.3%
26.7%
24.7%
27.9%
Manure handling &
grazing
9.0%
9.5%
8.5%
9.5%
Refrigeration losses
1.7%
1.8%
0.4%
0.5%
LULUCF
5.4%
-
11.2%
-
Total:
100%
100%
100%
100%
1
GHG emissions for the year 2022 were retrospectively recalculated.
Livestock digestion processes and manure management constitute 35.0% of Scope 1
GHG emissions. Methane (CH
4
) emitted during cattle digestion contributes the most to
GHG generation (19,839 t CO
2
e, or 76% of all emissions in these categories).
Methane emissions from barns and manure management systems contribute to this
category as well (4,578 t CO
2
e, or 18%). GHG emissions from these activities in 2023
were similar to the previous year's levels, totalling 26,660 t CO
2
e. The 1% increase in
these emissions is attributable to the growth in the number of cattle during the year (by
4%). Heifers and young bulls, with lower emissions per animal than dairy cows,
constituted 132% of the total cattle change. A significant change in this category is
expected with the implementation of the specialized feed production technology. In
2023, researchers from the Veterinary Academy of the Lithuanian University of Health
Sciences validated the results of trials conducted by AUGA Tech UAB on the feed
production technology and confirmed that the company's feeds reduce methane
emissions produced by cattle digestion by 32% per litre of raw milk.
Gases used for refrigeration equipment constitute 1.7% of all Scope 1 emissions,
making this the smallest category. During the reporting period, more leaks and system
additions were recorded in the mushroom production sector, leading to a 940 t CO
2
e
increase (or 273% more than the previous year).
-2%
2%
-4%
-1%
-55%
0
10 000
20 000
30 000
40 000
50 000
60 000
70 000
80 000
90 000
2022 2023
t CO
2
e
Scope 1 emissions, t CO
2
e
(% change compared to 2022)
Refrigeration losses
LULUCF
Manure handling & grazing
Fossil fuels use
Enteric fermentation
Crop & feed production
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The Group's companies purchase and use only green electricity in their operations.
This decision resulted in a saving of 3,438 t CO
2
e in 2023, which would be attributable
to indirect Scope 2 emissions.
In 2023, there was a decrease in indirect Scope 3 emissions (by 488 t CO
2
e, or 10%
less). The change was primarily due to a reduced quantity of product packaging
released to the market and intended for consumers, as the company Grybai LT, which
produced ready-to-eat food products, was sold in July 2023. The Group's activities
consumed 10.3% more water than in 2022, for a corresponding 10.3% increase in
indirect emissions related to water extraction.
In scope 1, emissions from the LULUCF sector also include biogenic emissions
resulting from biomass (manure and plant residues in fields), as well as direct and
indirect CO
2
and N
2
O emissions from soil (see Greenhouse Gas Accounting and
Reporting). Biogenic emissions from burning biofuels for heating (e.g., firewood) are
not typical and are not included. Indirect biogenic emissions from scope 3 are not
included in the calculation methodology due to lack of data beyond the organization's
operational boundaries and in the supply chain.
Indicators of Emission Intensity
The indicators for GHG emissions intensity are calculated by dividing the annual
emissions by the various units of economic activity. These indicators quantify the CO
2
e
emissions in the Group's operations across financial, production, arable land, and
other units. When calculating emissions per euro of revenue and per employee, all
Group emissions in Scopes 1, 2, and 3 are considered. 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 considered,
assigned to the corresponding activity segment – animal husbandry, crop production,
or mushroom cultivation.
Emissions, t CO
2
e
2023
2022
1
Annual change
t CO
2
e / 1 million euros of revenue
991.7
1,076.4
-7.9%
t CO
2
e / 1 employee
67.78
70.31
-3.6%
t CO
2
e / 1 cow
3.95
4.01
-1.6%
t CO
2
e / t ECM
2
0.99
0.98
1.8%
t CO
2
e / ha
1.09
1.23
-10.8%
t CO
2
e / t crop production
0.42
0.50
-16.0%
t CO
2
e / t mushroom production
0.31
0.24
32.4%
1
GHG emissions for the year 2022 were retrospectively recalculated.
2
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 intensity of emissions per million euros of revenue decreased by 7.9% compared
to 2022. This change was influenced by both a 6.4% reduction in total emissions and a
1.65% increase in income.
The emission intensity per tonne of mushroom production increased by 19.9%, which
was primarily driven by higher refrigeration losses on site.
In the livestock sector, emission intensity grew by 1.8% when calculated per tonne of
ECM milk produced. However, when calculated per number of cattle raised, the
emission intensity indicator decreased by 1.6%. These indicators reflect annual
increase in the number of non-dairy cattle, specifically heifers and young bulls, which
contribute to the generation of emissions despite not producing milk.
An indicator showing a significant positive change is emissions per unit of crop
production. This indicator decreased by 16%, primarily due to a larger seasonal yield
(2,8% more), achieved with reduced fertiliser and fossil fuel usage compared to the
previous year.
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Methodology
Emissions inventory calculations are based on the latest Greenhouse Gas Protocol
1
(GHG Protocol) and methodologies of the Intergovernmental Panel on Climate
Change
2
(IPCC), incorporating all greenhouse gases generated in the activities:
nitrous oxide (N
2
O), methane (CH
4
), carbon dioxide (CO
2
) and gases used in
refrigeration equipment.
The carbon footprint is measured in tonnes of CO
2
equivalent (CO
2
e), calculated using
the Global Warming Potential (GWP) of greenhouse gases, indicating the warming
potential of one kilogram of gases compared to one kilogram of CO
2
over a hundred
years. These global warming potentials are employed for the calculations
3
:
− CO
2
– 1
− CH
4
– 29.8
− N
2
O – 273
− HFC-32 – 771
− HFC-125 – 3170
− HFC-134a – 1526
− HFC-143a – 4800
− PFCs, SF6, NF3 gases are not emitted in the Group’s activities.
Emissions were calculated using internal accounting data and emission factors from
the following sources: the 2023 Lithuanian National Greenhouse Gas Inventory
Report
4
and a 2023 report of the UK Department for Environment, Food & Rural
Affairs
5
.
Direct emissions (Scope 1) include all sources directly controlled by the Group in its
operational activities. Indirect emissions (Scope 2) are generated from energy
purchased by the Group from external suppliers. Other indirect emissions (Scope 3)
include emissions that do not fall within the calculations of the first two categories but
are directly related to the Group's activities. The following indirect emission sources
were calculated based on actual consumption:
− water supply
− transmission losses of electricity and heat
− disposal of waste and wastewater treatment
− end-of-life treatment of consumer products packaging
− office paper
1
GHG Protocol for Corporate Accounting and Reporting Standard; GHG Protocol Land Sector and Removals Guidance.
2
Intergovernmental Panel on Climate Change (IPCC), 2019 Guidelines for National Greenhouse Gas Inventories.
3
IPCC Sixth Assessment Report, Working Group I (2021), chapter 7.
− business travel
For several years, the Group's emission inventory has undergone independent audits
conducted by Carbon Footprint, a leading CO
2
footprint auditor. Through these
independent audits, the Group aims to assure its stakeholders that its emission data is
reliable and transparent.
4
Lithuania National Inventory Report for the years 1990-2021 (2023)
5
Department for Environment, Food and Rural Affairs; DEFRA. Government Conversion Factors for Greenhouse Gas (GHG)
Reporting.
Consolidated Annual Report 2023
65
4.3.5 Energy
Direct and Indirect Energy Consumption
Energy, GJ
Energy distribution, %
Type of energy
2023
2022
1
2023
2022
1
Natural gas
12,390
16,485
3.9%
5.0%
Liquefied natural gas
13,982
9,581
4.3%
2.9%
Petrol
2,295
2,197
0.7%
0.7%
Diesel
236,465
247,078
73.5%
74.5%
Diesel for drying products
4,744
6,471
1.5%
2.0%
Total direct energy:
269,877
281,812
Electricity energy
52,041
49,705
16.1%
15.0%
Heating
144
164
0.0%
0.0%
Cooling
48
71
0.0%
0.0%
Total indirect energy:
52,233
49,940
Total:
322,110
331,753
100%
100%
Energy consumption data is obtained from AUGA group’s internal accounting system.
1
Energy consumption levels for 2022 were retrospectively recalculated using the newest energy density coefficients. More
information is available in section 4.3.4 “Methodology”.
In 2023, AUGA group consumed 9,643 gigajoules (GJ) of energy less than in 2022 (or
2,9+% less). The drop in total energy consumption was driven by a rapid decrease in
the use of diesel fuel for transportation. Diesel consumption for transportation in 2023
was 294,455 litres (10,613 GJ, or 4%) less than in 2022. This downward trend has
continued for several consecutive years. The most significant factor behind it is
systematic changes taking place across AUGA group farms. Although the Group’s
total arable land area was almost unchanged (in 2023, it was 0.9% smaller compared
to 2022), larger areas were planted with easier-to-maintain crops, such as clover.
Additionally, field cultivation was made more efficient through the use of lighter
seeders, which consume less fuel and can cover a larger area in a single pass. Energy
consumed for drying production partly depends on weather conditions during harvest,
which presents a challenge for reducing energy demand for these operations.
The Group invests in renewable energy sources: only certified green electricity is used
on farms, and solar power plants are installed in some of them. During the reporting
period, the amount of green electricity generated and sold on the market corresponds
to the amount of energy consumed in AUGA group offices during the same period.
AUGA group owns multiple companies engaged in diverse activities. Due to the
different nature of their operations, the Group has not established centralised rules for
reducing energy consumption. Each company independently implements energy-
saving initiatives according to the nature of its operations. Energy consumed outside
the Group's operations and in the supply chain (upstream, downstream) is not
accounted for due to lack of data.
Intensity of Energy Consumption
Indicator
2023
2022
1
GJ / 1 million euros of revenue
3,956.6
4,142.4
GJ / 1 employee
270.5
270.6
GJ / 1 cattle
3.89
3.45
GJ / t ECM
2
0.98
0.84
GJ / ha
4.67
4.68
GJ / t crop production
1.81
1.92
GJ / t mushroom production
5.70
5.92
1
Energy consumption levels for 2022 were retrospectively recalculated using the newest energy density coefficients. More
information is available in section 4.3.4 “Methodology”.
2
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.
Energy consumption intensity indicators are calculated by dividing the annual energy
consumption by units of economic activity. They quantify how much energy is utilised
to carry out specific activities. AUGA group calculates energy consumption intensity on
the basis of financial, production, arable land, and other units. Both direct and indirect
energy sources are included in the calculation. When calculating energy consumption
intensity per cattle and tonne of milk, per hectare and tonne of crop production, and
per tonne of mushroom production, only energy consumed in the corresponding
segment is considered – animal husbandry, crop production, or mushroom cultivation.
In crop production, the intensity of energy consumption decreased marginally (0.1%
less per hectare and 5.8% less per unit of crop production). This reduction reflects
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both a 2.8% higher yield and a 1% decrease in total energy consumption, particularly
in diesel fuel usage for transportation (5,705 GJ or 3.6% less).
A decrease in energy consumption per unit of mushroom production (down 3.9% per
production unit) was observed again, as in the last several years, primarily driven by
reduced fossil fuel use (4,407 GJ or 11.0% less natural gas, LPG, diesel, and petrol).
During the reporting period, there was an increase in energy consumption intensity in
the livestock sector, particularly per cattle and unit of milk production. This change was
driven by increased fuel and electricity consumption attributable to livestock activities,
as well as by a rise in the number of cattle, notably heifers and young bulls. Although
they do not produce milk, they contribute to energy consumption, and their increase
last year constituted 132% of the total cattle change.
4.3.6 Water
Consumed, m
3
2023
2022
2021
Water
331,839
300,782
368,867
For its operations in the agricultural sector, AUGA group consumes a significant
amount of water, which is needed for crop and mushroom production as well as to
water livestock. In 2023, a relatively small amount of water (2.3% of the total) was
consumed for the production of consumer-ready food products, primarily during the
first half of the year by the company Grybai LT while it was part of the Group. Water for
production processes is sourced 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 in terms of CO
2
e emissions. Water consumed outside the Group's
operations and supply chain is not accounted for due to lack of data. Detailed
accounting of Scope 3 emissions, including modelling water consumption in the supply
chain, is planned for 2024.
During 2023, AUGA group consumed 31,057 m
3
, or 10.3%, more water than in 2022.
The year 2023 was marked by warmer than average temperatures and irregular
rainfall
1
. Particularly dry spring and early summer months in many regions where
AUGA group operates led to droughts, resulting in increased irrigation needs and
higher water consumption.
In the mushroom cultivation segment, practices of secondary water usage are
employed. Water used in compost production for mushroom cultivation is reused
multiple times. Excess unabsorbed water is collected and reused until almost all water
1
Lithuanian Hydrometeorological Service
is utilized for mushroom compost. AUGA group does not have an approved water
reduction or reclaiming policy across the companies of the Group. Each company in
the AUGA group independently implements water saving and reuse initiatives based
on the nature of its activities. Water is not used from areas that face water shortages.
4.3.7 Waste
Waste generated, t
2023
2022
2021
Plastic
366.9
399.1
472.0
Municipality waste
89.8
325.9
349.0
Metal
137.8
121.6
280.4
Glass
1.5
0
0
Paper
57.6
78.6
74.8
Tires*
42.8
27.2
78.5
Asbestos*
2.8
23.4
42.7
Wood
32.6
10.3
39.2
Oil*
11.9
9
15.2
Batteries*
3.2
2.9
1.2
Electronics
0.6
1.2
0.9
Organic waste
0
0
0.3
Other waste**
97.7
66.3
25.4
Total:
845.2
1,065.5
1,379.6
* Household formed hazardous waste, according to the Law on Waste Management of the Republic of Lithuania
** Other waste transferred to waste management companies but not falling into the categories listed above. Quantities were
retrospectively recalculated for 2022 and 2021.
AUGA group understands that to be sustainable it must not only innovate to eliminate
the negative environmental impact of agriculture but also manage the waste generated
in its production activities. The group's aim to efficiently handle the waste generated in
its operations is based on the principles of reduce, reuse, recycle. To ensure control
and clarity in the process, in 2021 AUGA group developed waste generation, storage,
and disposal procedures, which were implemented across all group agricultural
enterprises. Waste generated across the Group is sorted and accounted for using the
national GPAIS system, ensuring that waste is only transferred to companies licensed
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to handle it, i.e. waste management companies. To implement circular economy
principles in its operations, the Group's agricultural companies compost organic waste
and reuse it, resulting in 100% utilization of organic waste.
In 2023, as in the previous year, the Group's activities generated less waste (220.3
tonnes, or 20.7% less). The most significant change was observed in the municipal
waste category. Due to the Group’s waste-sorting culture, waste in this category was
reduced by 72% compared to 2022. Waste sorting and recycling have always been
important for the Group. Thus, AUGA group continuously educates its employees
about proper waste sorting in various ways, such as by providing information on the
intranet, notice boards, and near waste sorting bins.
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 of the 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 environmental control and improvement procedures within the Group, such
as annual audits, discussions of the results by the 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.
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. 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. At these meetings,
projects’ progress is discussed, along with 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 the projects at its Board meetings.
The progress of the innovation agenda, current challenges and results are introduced
to the Board as the highest governing body of the AUGA group. Involving the Board in
the development of these projects allows for improving the management of
environmental risks and making the right decisions to achieve the desired results.
These reviews of innovation projects together with the Board have been held since
2020, and this tested practice will be continued to be followed.
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4.4 EMPLOYEES AND SOCIAL RESPONSIBILITY
4.4. Employees and Social
Responsibility
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69
4.4.1 Our Activities and Achievements
Accidents:
Per working hours:
Certification renewed for Baltic Champs and
AUGA Luganta
Employees taking part in share option
programme:
255
New participants:
41
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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 (2023). 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
2023
2022
2021
Category
Measurement
Total
Women
Men
Total
Women
Men
Total
Women
Men
Total:
Number
1,191
514
677
1,226
523
703
1,233
514
719
Distribution, %
43.2
56.8
42.7
57.3
41.7
58.3
By age
Under 30 years old
Number
143
71
72
165
75
90
169
60
109
Share, %
12.0
6.0
6.0
13.5
6.1
7.3
13.7
4.9
8.8
30-50 years old
Number
538
231
307
564
243
321
580
256
324
Share, %
45.2
19.4
25.8
46.0
19.8
26.2
47.0
20.8
26.3
Over 50 years old
Number
510
212
298
497
205
292
484
198
286
Share, %
42.8
17.8
25.0
40.5
16.7
23.8
39.3
16.1
23.2
By position
Workers and specialists
Number
1,120
494
626
1,166
509
657
1,171
502
669
Distribution, %
44.1
55.9
43.7
56.3
42.9
57.1
Management
Number
71
20
51
60
14
46
62
12
50
Distribution, %
28.2
71.8
23.3
76.7
19.4
80.6
By employment type
Permanent employees
Number
1,191
514
677
1,226
523
703
1,233
514
719
Temporary employees
Number
0
0
0
0
0
0
0
0
0
Full-time employees
Number
1,169
502
667
1,208
513
695
1,205
503
702
Part-time employees
Number
22
12
10
18
10
8
28
11
17
Working under service
contracts
Number
2
1
1
2
1
1
2
1
1
*Data about Group employees is collected from the official payroll calculation and employee accounting system, which contains all information about hired and departed employees. The report presents data based on the last day of 2023 (December 31).
According to AUGA group data, as of 31 December 2023, the total number of employees was 3% lower (35 fewer people) than in 2022. The total number of employees includes
individuals on childcare leave (in 2023, there were 31 such employees).
In 2023, as in previous years, there were more male workers than female, a situation which is typical in the agricultural sector. While men are still a majority in the management team,
the proportion of women managers has increased. The Group does not discriminate based on employees' gender and provides equal opportunities for all in terms of work and career
advancement. The distribution of genders among Board members is not included in the overall table. In the Board, 3 out of 5 members (or 60%) are men.
By age category, as in previous year, the largest group of employees remains 30-50 years old. There is a slight growth in the “Over 50 years old” category. The Board members are
not included in the table. Their ages are distributed as follows: 30-50 age group - 2 members or 40%, over 50 years old - 3 members or 60%.
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As of the last day of 2023, the Group had no employees working under fixed-term contract. Employees of AUGA group working under service contracts are not included in the total
number of employees. The number of employees working under service contracts remained unchanged compared to 2022 and accounted for only 0.16% of all employees.
It is important to mention that the Group operates in the agricultural sector, which has seasonal activities. Therefore, every year, AUGA group hires seasonal workers who provide
services such as harvesting, peeling, drying, and measurement. The Group pay such workers for their services according to payment receipts. At the end of the year, these workers
are not included in the final number of employees. In 2023, during the season, the Group hired additional 317 seasonal workers who provided the before mentioned agricultural
services. This compares to 254 seasonal workers hired in 2022.
4.4.3 Employee Turnover and New Employees
The following table presents the number of employees who left the Group (employee turnover) and the number of new employees during the reporting year, broken down by various
groups, and with percentage expressions of these numbers within each of the groups.
Employee turnover
2023
2022
2021
Number
%
Number
%
Number
%
Total:
410
34.4
402
32.8
368
29.8
By gender
Women
216
42.0
177
33.8
152
29.6
Men
194
28.7
225
32.0
216
30.0
By age
Under 30 years old
107
74.8
121
73.3
131
77.5
30-50 years old
187
34.8
172
30.5
153
26.4
Over 50 years old
116
22.7
109
21.9
84
17.4
By employment type
Full-time employees
406
34.7
399
33.0
366
30.0
Part-time employees
4
18.2
3
16.7
2
7.0
Working under services contracts
0
0.0
0
0.0
0
0.0
New employees
Number
%
Number
%
Number
%
Total:
411
32.2
395
32.2
331
26.8
By gender
Women
221
43.0
186
35.6
122
23.7
Men
190
28.1
209
29.7
209
29.1
By age
Under 30 years old
112
78.3
145
87.9
133
78.7
30-50 years old
195
36.2
157
27.8
128
22.1
Over 50 years old
104
20.4
93
18.7
70
14.5
In 2023, the overall employee turnover rate slightly increased. The turnover rate for women rose to 42%, compared to 33.8% in previous years. This reflects an increased turnover of
mushroom pickers, most of whom are women, at the company Baltic Champs. For to the same reason, there is a higher number of newly hired female employees during the reporting
period.
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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 the Group, there is no remuneration committee overseeing the remuneration setting
process. Once a year, the remuneration budget is presented and approved by the
members of the AUGA group Board. According to the Board's comments and
formulated tasks, the remuneration policy can be changed. AUGA group does not
conduct a survey of interested parties, including shareholders, regarding the current
remuneration policy in the Group. AUGA group implements a fair and transparent
remuneration policy, which establishes salary ranges, calculation methods, and
adjustment principles. Additionally, it utilizes the KORN FERRY remuneration data
analysis platform to track market trends. Compensation consultants do not participate
in the remuneration setting process at AUGA group.
CEO and Employee Pay Ratio
In 2023, the ratio of CEO and median employee pay was 4.53 and was 6% lower than
the previous year's ratio of 4.84. 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 influenced by the fact that employees' pay are reviewed annually as
needed, taking into account job performance and prevailing market trends, while the
CEO’s pay has remained unchanged. During employee pay evaluation, alignment with
sustainability goals is not broadly applied. The median employee salary in 2023
amounted to EUR 1848, which was 19% higher, compared to the previous year.
Gender Pay Ratio
Ratio of men‘s and women‘s median salaries
2023
2022
2021
Workers
1.15
1.28
1.22
Management
1.62
1.33
1.31
Specialists
1.08
1.16
1.18
Total:
1.09
1.22
1.22
The work of each employee is evaluated according to the results achieved in his or her
field. In the Group, different pay for similar work is not tolerated. In 2023, the median
pay ratio of employees of different genders working at AUGA group was 1.09 (or an
8.26% difference between the median pay of men and women). A larger pay gap at
the managerial level was influenced by a small sample size. There has been a positive
trend observed for several years in a row – in 2023, the pay gap at the group level
decreased from 18.0% to 8.26%, and at the specialist level, it decreased from 13.8%
to 7.4%. 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 five years. In 2023, 255
employees participated in this programme, with 44 of them being new participants.
Further information about the share option programme is provided in section 3.6.3.
Share Option Programme.
Additional financial incentives are allocated to AUGA group’s employees for achieving
significant work results. In 2023, 70 employees received additional financial incentives.
The Group’s employees are also encouraged with symbolic appreciation bonuses at
the end of the year. In 2023, 1,158 employees received these 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 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.
Nasdaq S1
Nasdaq S2
Nasdaq G3
Nasdaq G4
GRI 2-19
GRI 2-20
GRI 2-21
GRI 2-30
GRI 405-2
Consolidated Annual Report 2023
73
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
2023, the Group registered 13 accidents, in which workers suffered minor injuries. The workers involved
recovered quickly, and none of them suffered long-term disability resulting from the injury. Only one more serious
injury, a leg fracture, was recorded in 2023. All the Group employees working under full-time, part-time and
service contracts are included in the number of accidents. No workplace accidents were observed in 2023 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 strive 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 2023, there were 0.00812 accidents per employee (or 0.00062% of all working hours, i.e., 2,084,929
hours).
In 2022, this figure was 0.0114 per employee (or 0.00066% of all working hours). In 2023, the accident rate per
million hours worked was 6.24. Seasonal workers are not included in this figure.
Nasdaq S7
Nasdaq S8
GRI 403-1
GRI 403-5
GRI 403-6
Consolidated Annual Report 2023
74
Health and Safety Training of Employees
In 2023, 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.
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.
Ensuring Consumer Health and Safety
AUGA group ensures that end-consumers products are manufactured in compliance with organic production
requirements. Chemical fertilizers, pesticides, and other substances prohibited in organic farming are not used
during raw material production. The Group aims for its products to contain less sugar, more fiber, more protein,
and other beneficial nutrients in its products. This information is provided on product packaging.
AUGA products are produced following best practices in manufacturing and quality assurance overseen by quality
specialists. They ensure that consumers receive products that meet all safety and quality requirements.
Consolidated Annual Report 2023
1
4.5 GRI Indicators
GRI indicators
Title
Page
GRI 2: General Disclosures 2021
The Organisations and its Reporting Practices
2-1
Organisational Details
6
2-2
Entities Included in the Organisation‘s
Sustainability Reporting
83
2-3
Reporting Period, Frequency, and Contact Point
45
2-4
Restatements of Information
45
2-5
External Assurance
45
Activities and Workers
2-6
Activities, Value Chain and Other Business
Relationships
6, 8, 9, 10
2-7
Employees
71
2-8
Workers who are not Employees
71, 72
Governance
2-9
Governance Structure and Composition
6, 36, 37, 39
2-10
Nomination and Selection of the Highest
Governance Body
36, 37
2-11
Chair of the Highest Governance Body
36
2-12
Role of Highest Governance Body in Overseeing
the Management of Impacts
49, 50, 51
2-13
Delegation of Responsibility for Managing
Impacts
31
2-14
Role of the Highest Governance Body in
Sustainability Reporting
46
2-15
Conflicts of Interest
52
2-16
Communication of Critical Concerns
52
2-17
Collective Knowledge of the Highest Governance
Body
46
2-18
Collective Knowledge of the Highest Governance
Body
33
2-19
Remuneration Policies
73
2-20
Process to Determine Remuneration
73
2-21
Annual Total Compensation Ratio
73
Strategy, Policies and Practices
2-22
Statement on Sustainable Development Strategy
4
2-23
Policy Commitments
52
2-24
Embedding Policy Commitments
52
2-25
Processes to Remediate Negative Impact
52
2-26
Mechanisms for Seeking Advice and Raising
Concerns
52
2-27
Compliance with Laws and Regulations
43
2-28
Membership Associations
54
Stakeholder Engagement
2-29
Approach to Stakeholder Engagement
49, 50, 51
2-30
Collective Bargaining Agreements
73
GRI 302: Energy 2016
302-3
Energy Intensity
66
302-4
Reduction of Energy Consumption
66
GRI 303: Water and Effluents 2016
303-5
Water Consumption
67
Consolidated Annual Report 2023
76
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
61
GRI 305: Emissions 2016
305-1
Direct (Scope 1) GHG Emissions
62. 63
305-2
Energy Indirect (Scope 2) GHG Emissions
63, 63
305-3
Other Indirect (Scope 3) GHG Emissions
63, 63
305-4
GHG Emissions Intensity
64
305-5
Reduction of GHG Emissions
62, 63, 64
GRI 306: Waste 2020
306-1
Waste generation and significant waste-related
impact
67
306-2
Management of significant waste-related impact
67
306-3
Waste generated
67
GRI 401: Employment 2016
401-1
New Employee Hires and Employee Turnover
72
GRI 403: Occupational Health and Safety 2018
403-1
Occupational Health and Safety Management
System
75
403-5
Worker Training on Occupational Health and
Safety
75
403-6
Promotion of Worker Health
75
403-9
Work-Related Injuries
75
GRI 405: Diversity and Equal Opportunity 2016
405-1
Diversity of Governance bodies and Employees
71
405-2
Ratio of Basic Salary and Remuneration of
Women to Men
73
GRI 406: Non-discrimination 2016
406-1
Incidents of Discrimination and Corrective Actions
Taken
51
GRI 3: Material Topics
3-1
Process to Determine Material Topics
45
3-2
List of Material Topics
45
3-3
Management of Material Topics
45
Consolidated Annual Report 2023
77
4.6 Nasdaq ESG Indicators
Nasdaq
indicator
Title
Page
Environmental Indicators
E1
GHG Emissions
62, 63
E2
Emissions Intensity
64
E3
Energy Usage
66
E4
Energy Intensity
66
E5
Energy Mix
66
E6
Water Usage
67
E7
Environmental Operations
68
E8
Climate Oversight / Board
68
E9
Climate Oversight / Management
68
E10
Climate Risk Mitigation
XX
Social indicators
S1
CEO Pay Ratio
73
S2
Gender Pay Ratio
73
S3
Employee Turnover
72
S4
Gender Diversity
71
S5
Temporary Worker Ratio
71
S6
Non-Discrimination
52
S7
Injury Rate
75
S8
Global Health & Safety
75
S9
Child & Forced Labour
52
S10
Human Rights
52
Corporate Governance indicators
G1
Board Diversity
71
G2
Board Independence
31
G3
Incentivized Pay
73
G4
Collective Bargaining
73
G5
Supplier Code of Conduct
52
G6
Ethics & Anti-Corruption
52
G7
Data Privacy
76
G8
ESG Reporting
45
G9
Disclosure Practices
45
G10
External Assurance
45
Consolidated Annual Report 2023
78
4.7 UN Global Compact Indicators
UN Global Compact objectives
Page
Human Rights
Support and respect the protection of internationally proclaimed human rights
52
Ensure that the Company does not contribute to human rights violations
52
Forced Labour
Uphold the freedom of workers association and effective recognition of the right to collective bargaining
73
Support the elimination of all forms of forced and compulsory labour
52
Ensure effective abolition of child labour
52
Aim to eliminate discrimination in respect of employment and occupation
52
Environmental protection
Apply preventive measures to ensure environmental protection
68
Undertake initiatives to promote greater environmental responsibility
68
Encourage the development and diffusion of environmentally friendly technologies
12
Anti-Corruption
Work against corruption in all its forms, including extortion and bribery
52
Consolidated Annual Report 2023
79
AUGA Group AB Verification Statement
© Carbon Footprint Ltd 2024
Commercial in Confidence
Issue 1.1
19 March 2024
Statement of verification
AUGA Group AB
Konstitucijos pr. 21C,
Quadrum North,
LT-08130 Vilnius,
Lithuania
19 March 2024
Scope
AUGA Group AB (henceforth referred to as AUGA) engaged Carbon Footprint Ltd to verify its
greenhouse gas (GHG) emissions assessment and supporting evidence for the period 1
st
January 2023
to 31
st
December 2023. AUGA is responsible for the information within the GHG inventory. The
responsibility of Carbon Footprint Ltd is to provide a conclusion as to whether the statements made
are in accordance with the GHG Protocol Corporate Standard/Agricultural Guidance.
Methodology
The verification was led by Ross Campbell, Environmental Consultant, Carbon Footprint Ltd. Carbon
Footprint Ltd completed the review in accordance with the ‘ISO 14064 Part 3 (2019): Greenhouse
Gases: Specification with guidance for the verification and validation of greenhouse gas statements’.
The work was undertaken to provide a limited level of assurance with respect to the GHG statements
made. Carbon Footprint Ltd believes that the review of the assessment and associated evidence,
coupled with this subsequent report, provides a reasonable and fair basis for our conclusion.
The following data was within the scope of the verification (below shows the post-audit results):
Scope 1: Managed soil (with the inclusion of land use change, liming and synthetic fertiliser use), enteric
fermentation, manure management, fossil fuels and refrigerant loss – 76 191.67 tCO
2
e.
Scope 2: Purchased electricity & district heating – 3 441.72 tCO
2
e (location-based) and 3.96 tCO
2
e
(market-based).
Scope 3: Business travel (air), electricity & district heating transmission losses, paper & packaging
materials, waste disposal and water consumption – 4 791.06 tCO
2
e (location-based) and
4 534.76 tCO
2
e (market-based).
Location-based total: 84 424.45 tCO
2
e
Market-based total: 80 730.39 tCO
2
e
Assurance opinion
Based on the results of our verification process, Carbon Footprint Ltd provides limited assurance of
the GHG emissions statement, and found no evidence that the GHG emissions statement:
• is not materially correct and is not a fair representation of the GHG emissions data and
information;
• has not been prepared in accordance with the GHG Protocol.
It is our opinion that AUGA has established appropriate systems for the collection, aggregation, and
analysis of quantitative data for determination of GHG emissions for the stated period and boundaries.
Ross Campbell, BSc(Hons)
Environmental Consultant
Carbon Footprint Ltd
4.8. Independent Auditor’s Conclusion on the Emissions Report
Consolidated Annual Report 2023
80
Tvaru kvadratu, MB
Nemencines pl. 4E-30, Vilnius, LT-10109, Lithuania | Tel. +37060383728
info@sustainadvisory.eu | www.sustainadvisory.eu
Company Code 305610779
VAT code LT100015236019
Limitations
We have not carried out any work related to future projections outside the defined reporting period and statements of
position, commitment, belief or opinion by AUGA group. Verification of data (both quantitative and qualitative) and
accuracy of information, including verification with any other company documents, collection, and calculation
principles was not performed. Our work also excluded the information that is audited by other external third parties
and any external documents that the report provides links to.
Independence, Impartiality and Competence
Sustain Advisory is an independent specialised sustainability consulting company. Our team of certified sustainability
specialists has trained and consulted over 150 companies in Lithuania and internationally on adopting best practices
of sustainability reporting, policy and strategy creation, GHG calculation and more. Therefore, we have excellent
practical and theoretical knowledge required to perform this review.
Sustain Advisory does not have a business relationship with AUGA group beyond that required of this review
engagement. We have provided this review independently, there has been no conflict of interest.
All our work, including this review engagement, is based on ethical business practices and principles of integrity,
objectivity, professional competence and due care, confidentiality and professional behaviour.
Ieva Kazakeviciute
Director
“Sustain Advisory”
9
th
April 2024
4.9. Independent Auditor’s Conclusion on the Sustainability Report
Consolidated Annual Report 2023
81
Consolidated and
Separate Financial
Statements
82
AUGA GROUP AB
Konstitucijos pr. 21C, Quadrum North, LT-08130, Vilnius, Lithuania
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts are in EUR ’000 unless otherwise stated)
Balance Sheets | |||||
As at 31 December | |||||
GROUP | COMPANY | ||||
ASSETS | Notes | 2023 | 2022 | 2023 | 2022 |
Non-current assets | |||||
Property, plant and equipment | 5 | 1,130 | 2,749 | ||
Right-of-use assets | 6 | 531 | 577 | ||
Investments in subsidiaries | 7 | 108,745 | 106,688 | ||
Intangible assets | 8 | 326 | 1,753 | ||
Trade and other receivables | 11 | 3,265 | 5,817 | ||
Investments accounted for under the equity method | - | - | |||
Other assets | 12 | 66 | 66 | ||
Deferred income tax assets | 19 | - | - | ||
Biological assets | 9 | - | - | ||
Total non-current assets | 114,062 | 117,650 | |||
Current assets | |||||
Biological assets | 9 | - | - | ||
Inventories | 10 | 4 | 28 | ||
Trade and other receivables | 11 | 2,773 | 2,708 | ||
Other assets | 12 | 290 | 299 | ||
Cash and cash equivalents | 13 | 10 | 9 | ||
Total current assets | 3,077 | 3,044 | |||
TOTAL ASSETS | 117,139 | 120,694 | |||
EQUITY AND LIABILITIES | |||||
Capital and reserves | |||||
Share capital | 15 | 67,203 | 66,617 | ||
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 | 2,893 | 2,829 | ||
Retained earnings | ( | ( | 3,218 | 7,507 | |
Equity attributable shareholders of the Company | 82,062 | 85,701 | |||
Non-controlling interest | - | - | |||
Total equity | 82,062 | 85,701 |
AUGA GROUP AB
Konstitucijos pr. 21C, Quadrum North, LT-08130, Vilnius, Lithuania
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts are in EUR ’000 unless otherwise stated)
83
The accompanying notes are an integral part of these financial statements.
Non-current liabilities | |||||
Borrowings | 16 | 3,581 | 24,446 | ||
Lease liabilities | 17 | 371 | 433 | ||
Grants | 18 | 717 | 842 | ||
Deferred income tax liabilities | 19 | - | - | ||
Total non-current liabilities | 4,669 | 25,721 | |||
Current liabilities | |||||
Borrowings | 16 | 28,800 | 7,588 | ||
Lease liabilities | 17 | 166 | 143 | ||
Trade payables | 20 | 1,032 | 846 | ||
Other amounts payable | 21 | 410 | 695 | ||
Total current liabilities | 30,408 | 9,272 | |||
Total liabilities | 35,077 | 34,993 | |||
TOTAL EQUITY AND LIABILITIES | 117,139 | 120,694 |
Elina Chodzkaitė-Barauskienė
Chief Executive Officer
Kristupas Baranauskas
Chief Financial Officer
84
AUGA GROUP AB
Konstitucijos pr. 21C, Quadrum North, LT-08130, Vilnius, Lithuania
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts are in EUR ’000 unless otherwise stated)
Statements on Profit or Loss and Other Comprehensive Income | |||||
STATEMENT OF PROFIT OR LOSS | GROUP | Year ended 31 December | COMPANY | ||
Continuing operations | Notes | 2023 | 2022 | 2023 | 2022 |
Revenue | 22 | 2,545 | 3,878 | ||
Dividends from subsidiaries | 26 | 4,701 | 2,057 | ||
Cost of sales | 22, 23 | ( | ( | (1) | (8) |
Change in fair value of biological assets | 9, 22 | ( | - | - | |
GROSS PROFIT | ( | 7,245 | 5,927 | ||
Selling expenses | 24 | ( | ( | (973) | (1,612) |
Administrative expenses | 25 | ( | ( | (4,572) | (4,685) |
Impairment loss of investments in subsidiaries | 7 | (3,839) | - | ||
Net impairment reversal (loss) of financial assets | ( | - | - | ||
Other income | 27 | 447 | 155 | ||
Other gain/(loss), net | 28 | (3) | 2 | ||
OPERATING PROFIT (LOSS) | ( | (1,695) | (214) | ||
Finance costs | 29 | ( | ( | (2,600) | (2,203) |
LOSS BEFORE INCOME TAX | ( | ( | (4,295) | (2,417) | |
Income tax | 19 | ( | ( | - | - |
LOSS FROM CONTINUING OPERATIONS | ( | ( | (4,295) | (2,417) | |
Profit from discontinued operation (attributable to equity holders of the company) | 30 | - | - | ||
NET LOSS FOR THE PERIOD | ( | ( | (4,295) | (2,417) | |
NET PROFIT/(LOSS) ATTRIBUTABLE TO: | |||||
Shareholders of the Company | ( | ( | (4,295) | (2,417) | |
Non-controlling interest | ( | - | - | ||
Basic and diluted earnings/(loss) per share (EUR) | 31 | ( | ( | (0.02) | (0.01) |
STATEMENT OF OTHER COMPREHENSIVE INCOME |
AUGA GROUP AB
Konstitucijos pr. 21C, Quadrum North, LT-08130, Vilnius, Lithuania
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts are in EUR ’000 unless otherwise stated)
85
The accompanying notes are an integral part of these financial statements.
Elina Chodzkaitė-Barauskienė
Chief Executive Officer
Kristupas Baranauskas
Chief Financial Officer
NET PROFIT/(LOSS) FOR THE PERIOD | ( | ( | (4,295) | (2,417) | |
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 | ( | ( | (4,295) | (2,417) | |
COMPREHENSIVE INCOME/(LOSS) ATTRIBUTABLE TO: | |||||
Shareholders of the Company | ( | ( | (4,295) | (2,417) | |
Non-controlling interest | ( | - | - | ||
( | ( | (4,295) | (2,417) |
86
AUGA GROUP AB
Konstitucijos pr. 21C, Quadrum North, LT-08130, Vilnius, Lithuania
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts are in EUR ’000 unless otherwise stated)
Statements of Changes in Equity | |||||||||
GROUP | Equity attributable to shareholders of the Company | Equity | |||||||
Reserve for | attributable to | ||||||||
share-based | Retained | shareholders | Non- | ||||||
Share | Revaluation | payments to | Legal | earnings/ | of the | controlling | |||
Share capital | premium | reserve | employees | reserve | (deficit) | Company | interest | Total | |
Balance at 1 January 2022 | ( | ||||||||
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 reserve for share-based payments to employees (note | |||||||||
15) | ( | ||||||||
Issue of new shares (note 15) | ( | ||||||||
Balance at 31 December 2022 | ( | ||||||||
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 2023 | ( |
The accompanying notes are an integral part of these financial statements.
Elina Chodzkaitė-Barauskienė
Chief Executive Officer
Kristupas Baranauskas
Chief Financial Officer
87
AUGA GROUP AB
Konstitucijos pr. 21C, Quadrum North, LT-08130, Vilnius, Lithuania
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(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 2022
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
7,506
85,700
Comprehensive income
Net (loss) for the year
-
-
-
-
(4,295)
(4,295)
Total comprehensive income
-
-
-
-
(4,295)
(4,295)
Share-based payment (note 15)
-
-
-
-
657
657
Transfer to reserve for share-based payments to employees (note
15)
-
-
650
-
(650)
-
Issue of new shares (note 15)
586
-
(586)
-
-
-
Balance at 31 December 2023
67,203
6,707
2,893
2,041
3,218
82,062
The accompanying notes are an integral part of these financial statements.
Elina Chodzkaitė-Barauskienė
Chief Executive Officer
Kristupas Baranauskas
Chief Financial Officer
88
AUGA GROUP AB
Konstitucijos pr. 21C, Quadrum North, LT-08130, Vilnius, Lithuania
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts are in EUR ’000 unless otherwise stated)
Statements of Cash Flows | |||||
GROUP | COMPANY | ||||
Cash flows from operating activities | Notes | 2023 | 2022 | 2023 | 2022 |
Net profit/(loss) before income tax from: | |||||
Continuing operations | ( | ( | (4,295) | (2,417) | |
Discontinued operations | - | - | |||
Profit before income tax including discontinued operations | ( | ( | (4,295) | (2,417) | |
Adjustments for non-cash items of expenses/(income) and other adjustments | |||||
Depreciation expenses (PP&E) | 5 | 221 | 259 | ||
Depreciation expenses (ROU assets) | 6 | 170 | 131 | ||
Amortisation expenses | 8 | 1 | 6 | ||
Share-based payment expenses recognised in profit or loss | 15, 25 | 657 | 589 | ||
Write-offs of PP&E | - | - | |||
Reversal of impairment of PP&E | 5 | ( | - | - | |
(Gain) loss on disposal of PP&E | 28 | ( | ( | (9) | (3) |
Gain from sale of subsidiary | 30 | ( | - | - | |
Loss allowance for amounts receivable and write-off of debts | 11 | ( | 4 | - | |
Provision due sanctions of NPA | - | - | |||
Write-down allowance for inventories and biological assets | 23 | - | - | ||
Impairment loss of investments in subsidiaries | 7 | 3,839 | - | ||
Interest income | 27 | ( | ( | (238) | (30) |
Finance costs | 29 | 2,541 | 2,153 | ||
Interest costs on ROU assets | 29 | 29 | 25 | ||
Dividends from subsidiaries | 26 | (4,701) | (2,057) | ||
(Gain)/loss on change in fair value of biological assets | 22 | ( | - | - | |
Amortisation of assets-related grants | 18 | ( | ( | (125) | (111) |
Inventory write-down allowance | 10 | ( | ( | - | - |
Changes in working capital | |||||
(Increase) decrease in biological assets | ( | - | - | ||
(Increase) decrease in trade receivables, prepayments and other receivables | ( | ( | 5,594 | (4,373) | |
(Increase) decrease in inventory | ( | 24 | (21) | ||
(Decrease) increase in trade and other payables | (5,702) | 892 | |||
(1,989) | (4,956) | ||||
Interest paid | ( | ( | (2,329) | (2,171) | |
Net cash flows from//(to) operating activities | ( | (4,319) | (7,127) | ||
Cash flows from investing activities | |||||
Acquisition of PP&E | 5 | ( | ( | (58) | (1,434) |
Acquisition of intangible assets | 8 | ( | ( | (229) | (727) |
Acquisition of subsidiaries | 7 | - | (16) | ||
Disposal of subsidiaries | 7 | - | 3 | ||
Proceeds from sale of subsidiary | 30 | - | - | ||
Disposal of PP&E | 28 | 18 | 5 | ||
Assets-related grants received from the NPA | 18 | - | - | ||
Dividends from subsidiaries | 26 | 701 | 2,057 |
89
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts are in EUR ’000 unless otherwise stated)
The accompanying notes are an integral part of these financial statements.
Repayments of loans grated | - | - | |||
Loans granted | - | - | |||
Net cash flows from/(to) investing activities | ( | 432 | (112) | ||
Cash flows from financing activities | |||||
Bonds | - | 6,000 | |||
Repayment of borrowings | ( | ( | (2,577) | (600) | |
Proceeds from borrowings | 6,628 | 1,978 | |||
Payments received under supplier financing arrangement | - | - | |||
Payments made to financial institutions under supplier financing arrangement | ( | ( | - | - | |
Lease payments | ( | ( | (163) | (141) | |
Net cash flows from/(to) financing activities | 3,888 | 7,237 | |||
Net (decrease) / increase in cash and cash equivalents | 1 | (1) | |||
Cash and cash equivalents in the beginning of the period | 9 | 10 | |||
Cash and cash equivalents at the end of the period | 10 | 9 | |||
Non-cash financing and investing activities | 30 | ||||
Cash flows of discontinued operation | 30 |
Elina Chodzkaitė-Barauskienė
Chief Executive Officer
Kristupas Baranauskas
Chief Financial Officer
90
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts are in EUR ’000 unless otherwise stated)
Notes to the Financial Statements
The Company’s main business activity is management of agricultural companies in Lithuania. The main areas of operation of the Group are as follows: growing and sale of agricultural
These financial statements were authorised for issue on 30 April 2024 by the Management Board and signed by CEO and CFO. The shareholders of the Company have a statutory right
not to approve these financial statements and require that the management prepares a new set of financial statements.
91
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts are in EUR ’000 unless otherwise stated)
A | Profile | of | Group‘s ownership interest, % | |||||||||||||||||
No. | Name of subsidiary | Legal form | Legal entity code | ddress, registration date and place | activities | |||||||||||||||
31/12/2023 | 31/12/2022 | |||||||||||||||||||
1. UAB Baltic Champs | *2 | 302942064 | Šiaulių r., Poviliškių k., 15, Registration place: Šiaulių r. sav., Registration date: 21/12/2012 | **D | 100,00% | 100,00% | ||||||||||||||
2. UAB AGROSS | *2 | 301807601 | Vilniaus m. sav., Vilnius, Konstitucijos pr. 21C, Registration place: Vilniaus m. sav., Registration date: | **A | 100,00% | 100,00% | ||||||||||||||
24/07/2008-07-24 | ||||||||||||||||||||
3. UAB Grain LT | *2 | 302489354 | Vilniaus m. sav., Vilnius, Konstitucijos pr. 21C, Registration place: Vilniaus m. sav., Registration date: | **H | 100,00% | 100,00% | ||||||||||||||
17/03/2010 | ||||||||||||||||||||
4. UAB Agrotechnikos centras | *2 | 302589187 | Vilniaus m. sav. Vilniaus m. Konstitucijos pr. 21C, Registration place: Jonavos r. sav., Registration date: | **F | 100,00% | 100,00% | ||||||||||||||
03/02/2011 | ||||||||||||||||||||
5. UAB AUGA trade | *2 | 302753875 | Jonavos r. sav. Bukonių k. Lankesos g. 2, Registration place: Jonavos r. sav., Registration date: | **H | 100,00% | 100,00% | ||||||||||||||
29/02/2012 | ||||||||||||||||||||
6. UAB Žemės vystymo fondas 6 | *2 | 300589719 | Vilniaus m. sav. Vilniaus m. Smolensko g. 10, Registration place: Vilniaus m. sav., Registration date: | **E | 100,00% | 100,00% | ||||||||||||||
10/08/2006 | ||||||||||||||||||||
7. UAB Žemės vystymo fondas 20 | *2 | 300887726 | Vilniaus m. sav. Vilniaus m. Konstitucijos pr. 21C, Registration place: Jonavos r. sav., Registration date: | **B | 100,00% | 100,00% | ||||||||||||||
22/06/2007 | ||||||||||||||||||||
8. UAB AUGA Grūduva | *2 | 174401546 | Šakių r. sav. Gotlybiškių k., Registration place: Šakių r. sav., Registration date: 24/02/1997 | **A | 98,98% | 98,98% | ||||||||||||||
9. ŽŪB AUGA Spindulys | *1 | 171330414 | Radviliškio r. sav. Vaitiekūnų k. Spindulio g. 13, Registration place: Radviliškio r. sav., Registration date: | **A | 99,99% | 99,99% | ||||||||||||||
09/04/1993 | ||||||||||||||||||||
10. ŽŪB AUGA Smilgiai | *1 | 168548972 | Panevėžio r. sav. Smilgių mstl. Panevėžio g. 23-1, Registration place: Panevėžio r. sav, Registration | **A | 99,98% | 99,98% | ||||||||||||||
11. ŽŪB AUGA Skėmiai | *1 | 171306071 | date: 16/09/1992 | **A | 100,00% | 100,00% | ||||||||||||||
Kėdainių | g. | 13, | Skėmių | k., | Radviliškio | r., | Registration | place: | Radviliškio | r. | sav., | Registration | ||||||||
12. ŽŪB AUGA Nausodė | *1 | 154179675 | 11/08/1992 | date:01/10/1992 | Anykščių r. sav. Nausodės k. Nausodės g. 55, Registration place: Anykščių r. sav., Registration date: | **A | 99,94% | 99,94% | ||||||||||||
13. ŽŪB AUGA Dumšiškės | *1 | 172276179 | 29/09/1992 | Raseinių r. sav. Gėluvos k. Dvaro g. 30, Registration place: Raseinių r. sav., Registration date: | **A | 99,38% | 99,38% | |||||||||||||
14. ŽŪB AUGA Žadžiūnai | *1 | 175706853 | Šiaulių r. sav. Žadžiūnų k. Gudelių g. 30-2, Registration place: Šiaulių r. sav., Registration date: | **A | 99,81% | 99,81% | ||||||||||||||
30/06/1992 | ||||||||||||||||||||
15. ŽŪB AUGA Mantviliškis | *1 | 161274230 | date: 06/11/1992 | Kėdainių r. sav. Mantviliškio k. Liepos 6-osios g. 60, Registration place: Kėdainių r. sav., Registration | **A | 99,94% | 99,94% | |||||||||||||
16. ŽŪB AUGA Eimučiai | *1 | 175705032 | Šiaulių r. sav. Žadžiūnų k. Gudelių g. 30-2, Registration place: Šiaulių r. sav., Registration date: | **A | 99,24% | 99,24% | ||||||||||||||
29/06/1992 | ||||||||||||||||||||
17. ŽŪB AUGA Vėriškės | *1 | 171305165 | 29/09/1992 | Radviliškio r., Skėmiai, Kėdainių g. 13, Registration place: Radviliškio r. sav., Registration date: | **A | 99,93% | 99,93% | |||||||||||||
18. ŽŪB AUGA Želsvelė | *1 | 165666499 | Marijampolės sav., Želsvos k., Želsvelės g. 1, Registration place: Marijampolės sav., Registration date: | **A | 99,86% | 99,86% | ||||||||||||||
03/07/1992 | ||||||||||||||||||||
19. ŽŪB AUGA Lankesa | *1 | 156913032 | Jonavos r. sav. Bukonių k., Registration place: Jonavos r. sav., Registration date: 06/04/1999 | **A | 99,59% | 99,59% | ||||||||||||||
20. ŽŪB AUGA Kairėnai | *1 | 171327432 | Radviliškio r. sav. Kairėnų k., Registration place: Radviliškio r. sav., Registration date: 02/03/1993 | **A | 98,47% | 98,47% | ||||||||||||||
21. ŽŪB AUGA Jurbarkai | *1 | 158174818 | Jurbarko r. sav. Klišių k. Vytauto Didžiojo g. 99, Registration place: Jurbarko r. sav., Registration date: | **A | 98,47% | 98,47% | ||||||||||||||
31/07/1992 | ||||||||||||||||||||
22. ŽŪB AUGA Gustoniai | *1 | 168565021 | Panevėžio r. sav. Gustonių k. M. Kriaučiūno g. 15, Registration place: Panevėžio r. sav, Registration | **A | 100,00% | 100,00% | ||||||||||||||
date: 09/12/1992 | ||||||||||||||||||||
23. ŽŪK AgroBokštai | *3 | 302485217 | Vilniaus m. sav. Vilniaus m. Konstitucijos pr. 21C, Registration place: Vilniaus m. sav., Registration | **A | 99,64% | 99,64% | ||||||||||||||
date: 02/03/2010 | ||||||||||||||||||||
24. KB Dotnuvėlės valdos | *3 | 302618614 | Šiaulių r. sav. Žadžiūnų k. Gudelių g. 30-2, Registration place: Šiaulių r. sav., Registration date: | **A | 99,92% | 99,92% | ||||||||||||||
21/04/2011 | ||||||||||||||||||||
92
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts are in EUR ’000 unless otherwise stated)
A | Profile | of | Group‘s ownership interest, % | |||||
No. | Name of subsidiary | Legal form | Legal entity code | ddress, registration date and place | activities | |||
31/12/2023 | 31/12/2022 | |||||||
93
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts are in EUR ’000 unless otherwise stated)
A | Profile | of | Group‘s ownership interest, % | |||||
No. | Name of subsidiary | Legal form | Legal entity code | ddress, registration date and place | activities | |||
31/12/2023 | 31/12/2022 | |||||||
- | ||||||||
94
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts are in EUR ’000 unless otherwise stated)
95
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts are in EUR ’000 unless otherwise stated)
T | |||
96
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts are in EUR ’000 unless otherwise stated)
97
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts are in EUR ’000 unless otherwise stated)
Buildings | 20–50 | years |
Plant and machinery | 4–20 | years |
Motor vehicles | 1–10 | years |
Other fixtures, fittings, tools and equipment | 1-10 | years |
98
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts are in EUR ’000 unless otherwise stated)
99
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts are in EUR ’000 unless otherwise stated)
100
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts are in EUR ’000 unless otherwise stated)
101
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts are in EUR ’000 unless otherwise stated)
102
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts are in EUR ’000 unless otherwise stated)
Land | 2–98 | years |
Buildings | 1–5 | years |
Plant and machinery | 1–5 | years |
Motor vehicles | 1–5 | years |
Other fixtures, fittings, tools and equipment | 1–5 | years |
103
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts are in EUR ’000 unless otherwise stated)
2.19. Current and Deferred Income Tax
104
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts are in EUR ’000 unless otherwise stated)
105
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts are in EUR ’000 unless otherwise stated)
2.24. Investments in Subsidiaries in the Company‘s Separate Financial Statements
Investments in subsidiaries are accounted for at cost less impairment loss.
106
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts are in EUR ’000 unless otherwise stated)
As at 31 December 2023, the Company's borrowings with floating interest rate amounted to EUR 2,343 thousand (31 December 2022: EUR 3,128 thousand). Had the floating interest
rate changed by 1 p.p., this would result in EUR 27 thousand (31 December 2022: EUR 31 thousand) annual effect on the Company's pre-tax result. See note 16 for more information.
107
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts are in EUR ’000 unless otherwise stated)
COMPANY
Liabilities with fixed interest rate
Liabilities with floating interest rate
At 31 December 2023
At 31 December 2022
At 31 December 2023
At 31 December 2022
Borrowings from credit institutions
854
803
2,343
3,128
Bonds
25,705
25,409
-
-
Borrowings from subsidiaries
3,479
2,694
-
-
Lease liabilities
499
519
38
57
Total
30,537
29,425
2,381
3,185
As at 31 December 2023, 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 44,704 thousand
(31 December 2022: EUR 38,812 thousand) (note 33)
GROUP | COMPANY | |||
At 31 December 2023 | At 31 December 2022 | At 31 December 2023 | At 31 December 2022 | |
Trade receivables | 5,354 | 6,742 | 2,773 | 8,511 |
Subsidies and grants receivable from the National Paying Agency | ||||
(NPA) | 4,661 | 998 | - | - |
Receivable from natural persons | 97 | 80 | - | 3 |
Loan granted | 536 | 518 | - | - |
Other receivables | 6 | 12 | 3,265 | 11 |
Cash and cash equivalents | 3,455 | 3,337 | 10 | 9 |
Total | 14,109 | 11,687 | 6,048 | 8,534 |
108
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts are in EUR ’000 unless otherwise stated)
Trade receivables The Group sells most of its products to wholesalers and has policies in place to ensure that sales of products are made only to customers with an appropriate credit history. Before entering into a transaction with a customer, the Group assesses the credit quality, taking into account its financial position, past experience and other factors. A credit period is awarded only to a few customers who are well known to the Group and have good credit history. The Group has credit risk concentration as exposures are distributed among several key customers that are the strongest players in the local agricultural market (see note 22). In certain cases the Group uses credit insurance and has established specific limits for some of its customers that are usually new customers with insufficient track record of payments. When calculating the expected credit losses (ECL), the Group analyses movements in amounts receivable. The analysis is based on the balances of trade receivables at the beginning and end of year, taking into account the amounts settled or offset. This allows calculating the outstanding balance of trade receivables that were unpaid as they fell due. This in turn allows calculating the percentage of outstanding balances in each category of past due receivables. The estimated rates are applied to the year-end balances of receivables by category of past due receivables, and thereby the expected credit losses are calculated. | ||
-
Increase in loss allowance for trade receivables during the year, recognised in profit or loss | (109) | - |
Carrying amount of loss allowance for trade receivables at 31 December 2023 | (197) | - |
Movement in loss allowance for other receivables during the year: | ||
Carrying amount of loss allowance for other receivables at 1 January 2022 | (3,107) | - |
Increase in loss allowance for other receivables during the year, recognised in profit or loss | - | - |
Carrying amount of loss allowance for other receivables at 31 December 2022 | (3,107) | - |
Receivables written off during the year as uncollectible | 2 792 | - |
Unused amount reversed | 315 | - |
Carrying amount of loss allowance for other receivables at 31 December 2023 | - | - |
Receivables not past | Past due from 1 to 30 | Past due from 31 | Past due over 90 | ||
Credit quality of the Group’s trade receivables | due | days | to 90 days | days | Total |
At 31 December 2023 | |||||
Expected credit loss rate | 0.19% | 0.02% | 1.48% | 27.37% | |
Total trade receivables, gross | 2,737 | 1,860 | 270 | 684 | 5,551 |
Loss allowance (note 11) | (5) | - | (4) | (187) | (197) |
Total trade receivables, net at 31 December 2023 | 2,732 | 1,860 | 266 | 497 | 5,354 |
At 31 December 2022 | |||||
Expected credit loss rate | 0.30% | 3.12% | 2.98% | 8.41% | |
Total trade receivables, gross | 5,417 | 801 | 101 | 511 | 6,830 |
Loss allowance (note 11) | (16) | (25) | (3) | (43) | (88) |
Total trade receivables, net at 31 December 2022 | 5,401 | 776 | 98 | 468 | 6,742 |
Calculation of loss rates and loss allowances for the Company’s trade receivables:
109
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts are in EUR ’000 unless otherwise stated)
Credit quality of the Company’s trade | Past due from 1 to | Past due from 31 to | Past due over 90 | ||
receivables | Receivables not past due | 30 days | 90 days | days | Total |
At 31 December 2023 | |||||
Expected credit loss rate | 0.01% | 0.01% | 0.01% | 0.01% | |
Total trade receivables | 243 | 534 | 410 | 1,586 | 2,773 |
Total | 243 | 534 | 410 | 1,586 | 2,773 |
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 |
As at 31 December 2023 and 2022, 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 in 2023 and 2022, a part of the Company’s trade receivables were classified as non-current (note 11).
Credit quality of other receivables at amortised cost | Stage 1 (12-month ECL) | Stage 2 (lifetime ECL) | Stage 3 (lifetime ECL) | Total |
At 31 December 2023 | ||||
Expected credit loss rate | 0.01% | 0.2% | ||
Receivables from the NPA | 4,661 | - | - | 4,661 |
Receivables from private individuals | 97 | - | - | 97 |
Loan granted | - | 536 | - | 536 |
Other receivables | 6 | - | - | 6 |
Carrying amount, gross | 4,764 | 536 | - | 5,300 |
Loss allowance | - | (1) | - | (1) |
Total other receivables, net at 31 December 2023 | 4,764 | 535 | - | 5,299 |
At 31 December 2022 | ||||
Expected credit loss rate | 0.01% | 0.2% | 100% | |
Receivables from the NPA | 998 | - | - | 998 |
Receivables from employees | 80 | - | - | 80 |
Loan granted | - | 518 | - | 518 |
Other receivables | 12 | - | 3,106 | 3,118 |
Carrying amount, gross | 1,090 | 518 | 3,106 | 4,714 |
Loss allowance | - | (1) | (3,106) | (3,107) |
Total other receivables, net at 31 December 2022 | 1,090 | 517 | - | 1,607 |
110
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts are in EUR ’000 unless otherwise stated)
As at 31 December 2023 and 2022, 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.
111
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts are in EUR ’000 unless otherwise stated)
Contractual cash flows | |||||||
GROUP | Carrying amount | Between 1 and 2 | Between 3 and 4 | Over 5 years and | |||
At 31 December 2023 | Total | On demand | Within 1 year | years | years | later | |
Borrowings | 78,647 | 86,024 | - | 58,048 | 12,443 | 10,159 | 5,374 |
Lease liabilities | 48,387 | 61,599 | - | 10,751 | 10,212 | 15,419 | 25,217 |
Guarantees issued | - | 232 | 232 | - | - | - | - |
Supplier financing arrangements | 4,443 | 4,689 | - | 4,689 | - | - | - |
Trade and other payables | 23,510 | 23,510 | - | 23,510 | - | - | - |
Total | 154,987 | 176,054 | 232 | 96,998 | 22,655 | 25,578 | 30,591 |
At 31 December 2022 | |||||||
Borrowings | 69,798 | 76,249 | - | 36,448 | 29,493 | 9,634 | 674 |
Lease liabilities | 47,229 | 60,185 | - | 10,315 | 9,526 | 16,295 | 24,049 |
Guarantees issued | - | 232 | 232 | - | - | - | - |
Supplier financing arrangements | 6,978 | 7,356 | - | 7,356 | - | - | - |
Trade and other payables | 18,566 | 18,566 | - | 18,570 | - | - | - |
Total | 142,571 | 162,588 | 232 | 72,689 | 39,019 | 25,929 | 24,723 |
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 2023
Borrowings
32,381
35,728
-
24,763
1,549
9,416
-
Lease liabilities
537
613
-
201
212
187
13
Guarantees issued
-
44,704
44,704
-
-
-
-
Trade and other payables
1,054
1,054
-
1,054
-
-
-
Total
33,972
82,099
44,704
26,018
1,761
9,603
13
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
112
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts are in EUR ’000 unless otherwise stated)
Amounts payable on demand include guarantees issued by the Group or the Company, which represent accurately the Group's/Company's exposure at the balance sheet date. Borrowings include bank borrowings and bonds (note 16). As at 31 December 2023, the Company‘s current liabilities exceeded current assets by EUR 27,331 thousand (31 December 2022: current liabilities exceeded current assets by EUR 6,228 thousand). As at 31 December 2023, current liquidity ratio (current assets / current liabilities) was 0.10 (31 December 2022: 0.33), and quick ratio was 0.10 (2022: 0.33). As at 31 December 2023, decrease in liquidity ratio was attributable to the reclassification of issued bonds from non-current to current due to the approaching end date of the agreements and non- compliance with financial covenants. 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’). Company’s business continuity risk management is described in note 2.1. |
As at 31 December 2023 and 31 December 2022, the Company complied with these requirements. |
113
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts are in EUR ’000 unless otherwise stated)
The Group’s net debt:
GROUP
COMPANY
At 31 December 2023 | At 31 December 2022 | At 31 December 2023 | At 31 December 2022 | |
Borrowings | 78,647 | 69,798 | 32,381 | 32,034 |
Lease liabilities | 48,387 | 47,229 | 537 | 576 |
Less: cash and cash equivalents | (3,455) | (3,337) | (10) | (9) |
Net debt before supplier financing | 123,579 | 113,690 | 32,908 | 32,601 |
arrangements | ||||
Supplier financing arrangements | 4,443 | 6,978 | - | - |
Total net debt | 128,022 | 120,668 | 32,908 | 32,601 |
3.3 Fair Value Measurement
The three levels of the fair value hierarchy have been defined as follows:
Level 1 includes assets with the fair value measured with reference to the quoted (unadjusted) prices in active markets for identical assets;
Level 2 includes assets with the fair value measured with reference to other directly or indirectly observable inputs;
Level 3 includes assets with the fair value measured with reference to unobservable inputs.
There were no transfers between any levels during the year.
The carrying amount of trade receivables (less impairment losses) and the carrying amount of trade payables approximate their fair value. The carrying amount of borrowings approximates
their fair value as they bear interest rates similar to market interest rates at the balance sheet date. The fair value of loans granted approximates their carrying amount as they bear interest
rates similar to market interest rates at the balance sheet date.
The carrying amount of green bonds is calculated by discounting the nominal value of bonds at the interest rate of bonds, net of bond issue costs and discounts. The discounts and other
related costs will be recognised as interest expenses and capitalised by adding them to the value of green bonds over a 5-year period. As at 31 December 2023, the fair value of bonds
was EUR 18,997 thousand (31 December 2022: EUR 19,800 thousand).
The Group’s/Company’s cash and cash equivalents comprise cash at bank, and their carrying amounts approximate the fair value.
The fair values of the Group’s/Company’s financial assets and liabilities are classified within Level 3 of the fair value hierarchy, including loans granted, borrowings, trade and other
receivables and trade and other payables, excluding cash and cash equivalents that are classified within Level 2.
The fair value of biological assets is disclosed in note 9, and the fair value of agricultural land is disclosed in note 5.
114
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts are in EUR ’000 unless otherwise stated)
b) Impairment of investments in subsidiaries (Company)
As at 31 December 2023, 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 impairment loss
(note 7).
115
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts are in EUR ’000 unless otherwise stated)
116
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts are in EUR ’000 unless otherwise stated)
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 2022 | |||||||
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 January 2022 | 29,874 | 38,689 | 15,639 | 1,290 | 2,359 | 4,201 | 92,052 |
- 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 December 2022 | 32,178 | 37,707 | 15,233 | 1,088 | 1,959 | 5,546 | 93,711 |
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 |
Net book amount at 1 January 2023 | 32,178 | 37,707 | 15,233 | 1,088 | 1,959 | 5,546 | 93,711 |
- additions | 23 | 626 | 2,319 | 231 | 372 | 2,298 | 5,869 |
- write-offs and disposals | (8) | - | (52) | (7) | (9) | - | (76) |
- disposal of subsidiary (note 30) | - | (2,019) | (1,699) | (44) | (120) | - | (3,882) |
- revaluation | 2,409 | - | - | - | - | - | 2,409 |
- depreciation | - | (2,384) | (3,530) | (330) | (530) | - | (6,774) |
- reclassification | 300 | 621 | 3,993 | - | 300 | (5,655) | (441) |
Net book amount at 31 December 2023 | 34,902 | 34,551 | 16,264 | 938 | 1,972 | 2,189 | 90,816 |
At 31 December 2023 | |||||||
Cost or revalued amount | 34,902 | 66,608 | 54,396 | 4,226 | 4,645 | 2,189 | 166,966 |
Accumulated depreciation | - | (32,057) | (38,132) | (3,288) | (2,673) | - | (76,150) |
Net book amount | 34,902 | 34,551 | 16,264 | 938 | 1,972 | 2,189 | 90,816 |
117
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts are in EUR ’000 unless otherwise stated)
Depreciation charges of property, plant and equipment are included in cost of sales, biological assets, inventories and operating expenses.
As at 31 December 2022, construction in progress contained development of tractors of EUR 1,431 thousand. In 2023, the Group reclassified this amount to internally generated intangible
asset. As at 31 December 2023, amounts accumulated in construction in progress relate to construction of biofuel power plants (31 December 2023: EUR 618 thousand, 31 December
2022: EUR 2,437 thousand).
The following items of property, plant and equipment have been fully depreciated but still in use by the Group.
GROUP | ||
At 31 December 2023 | At 31 December 2022 | |
Buildings and structures | 3,653 | 2,523 |
Plant and machinery | 20,219 | 19,221 |
Motor vehicles | 1,967 | 1,534 |
Other PP&E | 1,413 | 1,566 |
Total | 27,252 | 24,863 |
COMPANY | Motor vehicles | Other PP&E | Construction in progress | Total |
At 1 January 2022 | ||||
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 | 2,749 |
-
118
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts are in EUR ’000 unless otherwise stated)
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 |
Net book amount at 1 January 2023 | 20 | 1,297 | 1,432 | 2,749 |
- additions | - | 34 | 24 | 58 |
- write-offs and disposals | - | - | (1,456) | (1,456) |
- revaluation | - | - | - | - |
- depreciation | (12) | (209) | - | (221) |
- reclassifications | - | - | - | - |
Net book amount at 31 December 2023 | 8 | 1,122 | - | 1,130 |
At 31 December 2023 | ||||
Cost or revalued amount | 179 | 1,868 | - | 2,047 |
Accumulated depreciation | (171) | (746) | - | (917) |
Net book amount | 8 | 1,122 | - | 1,130 |
Depreciation charges of the Company’s property, plant and equipment are included in administrative expenses. Construction in progress included 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 were disposed of and transferred to the subsidiary UAB AUGA Tech. As at 31 December 2023, property, plant and equipment fully depreciated but still in use by the Company amounted to EUR 216.7 thousand (31 December 2022: EUR 198.6 thousand). As at 31 December 2023, the Company’s property, plant and equipment with the carrying amount of EUR 1,093 thousand (31 December 2022: EUR 1,248 thousand) had been pledged to secure repayment of bank borrowings. | |
119
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts are in EUR ’000 unless otherwise stated)
Change in average value per | ||||||||
At 31 December 2023 | At 31 December 2022 | ha | ||||||
Average | Average | |||||||
Value | value | Value | value | |||||
Region | Area (Ha) | (EUR ‘000) | (EUR/Ha) | Area (Ha) | (EUR ‘000) | (EUR/Ha) | Change, (%) | Change, EUR |
Total | 4 976* | 34,902 | 7,014 | 4 835* | 32,178 | 6,655 | 5.39 | 359 |
Radviliškis | 963 | 7,669 | 7,967 | 968 | 7,073 | 7,306 | 9.05 | 661 |
Jonava | 428 | 2,940 | 6,866 | 393 | 2,704 | 6,884 | -0.26 | (18) |
Šakiai | 530 | 4,462 | 8,417 | 530 | 4,270 | 8,055 | 4.50 | 362 |
Šiauliai | 388 | 2,579 | 6,651 | 364 | 2,381 | 6,546 | 1.61 | 105 |
Kėdainiai | 319 | 2,755 | 8,627 | 307 | 2,550 | 8,318 | 3.72 | 309 |
Jurbarkas | 354 | 1,955 | 5,520 | 345 | 1,886 | 5,462 | 1.06 | 58 |
Anykščiai | 308 | 1,531 | 4,978 | 308 | 1,496 | 4,863 | 2.36 | 115 |
Raseiniai | 400 | 2,749 | 6,865 | 402 | 2,498 | 6,218 | 10.40 | 647 |
Panevėžys | 330 | 2,380 | 7,207 | 330 | 2,175 | 6,586 | 9.44 | 621 |
Mažeikiai | 186 | 1,209 | 6,493 | 186 | 1,187 | 6,373 | 1.89 | 120 |
Other | 770 | 4,673 | 6,071 | 703 | 3,958 | 5,632 | 7.80 | 439 |
120
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts are in EUR ’000 unless otherwise stated)
GROUP | Land | Buildings and | Plant and | Motor vehicles | Other | Total |
structures | machinery | |||||
At 1 January 2022 | ||||||
Cost or revalued amount | 56,377 | 966 | 10,186 | 665 | - | 68,194 |
Accumulated depreciation | (17,565) | (403) | (2,846) | (175) | - | (20,989) |
Net book amount | 38,812 | 562 | 7,340 | 490 | - | 47,204 |
Net book amount at 1 January 2022 | 38,812 | 562 | 7,340 | 490 | - | 47,204 |
- additions | 168 | - | 19 | - | - | 187 |
- write-offs and disposals | - | - | - | - | - | - |
- effect of modifications | 8,777 | 50 | - | - | - | 8,828 |
- depreciation | (6,679) | (114) | (1,020) | (84) | - | (7,897) |
- reclassifications | - | - | - | - | - | |
Net book amount at 31 December 2022 | 41,079 | 498 | 6,339 | 406 | - | 48,322 |
At 31 December 2022 | ||||||
Cost or revalued amount | 65,322 | 1,019 | 10,205 | 665 | - | 77,212 |
Accumulated depreciation | (24,243) | (521) | (3,866) | (259) | - | (28,890) |
Net book amount | 41,079 | 498 | 6,339 | 406 | - | 48,322 |
Net book amount at 1 January 2023 | 41,079 | 498 | 6,339 | 406 | - | 48,322 |
- additions | 184 | - | 327 | 94 | 71 | 676 |
- write-offs and disposals | - | - | - | - | - | - |
- effect of modifications | 9,151 | 124 | - | - | - | 9,275 |
- depreciation | (7,474) | (153) | (923) | (90) | (11) | (8,651) |
- reclassifications | - | - | (958) | - | - | (958) |
Net book amount at 31 December 2023 | 42,940 | 469 | 4,785 | 410 | 60 | 48,664 |
At 31 December 2023 | ||||||
Cost or revalued amount | 74,657 | 1,143 | 9,574 | 759 | 71 | 86,205 |
Accumulated depreciation | (31,718) | (674) | (4,789) | (349) | (11) | (37,541) |
Net book amount | 42,940 | 469 | 4,785 | 410 | 60 | 48,664 |
121
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts are in EUR ’000 unless otherwise stated)
COMPANY
Buildings and structures
Motor vehicles
Total
At 1 January 2022
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
562
96
658
- 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
Net book amount at 1 January 2023
498
79
577
- additions
-
-
-
- write-offs and disposals
-
-
-
- effect of modifications
124
-
124
- depreciation
(153)
(17)
(170)
- reclassifications
-
-
-
Net book amount at 31 December 2023
469
62
531
At 31 December 2023
Cost or revalued amount
1,143
127
1,270
Accumulated depreciation
(674)
(65)
(739)
Net book amount
469
62
531
122
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts are in EUR ’000 unless otherwise stated)
Depreciation charges of the Company’s right-of-use assets were included in administrative expenses.
Under the lease contracts, right-of-use assets had been pledged as collateral for lease liabilities.
7. Investments in Subsidiaries
2023
2022
At 1 January
106,688
106,675
Acquisition of subsidiaries / additions
5,896
16
Disposal of subsidiaries
-
(3)
Impairment loss
(3,839)
At 31 December
108,745
106,688
In 2023 the Company increased its investments in subsidiaries by raising the share capital of AUGA Raseiniai by EUR 5,888 thousand. Share capital was increased by the Company by
offsetting loan granted to the subsidiary.
Impairment
As at 31 December 2023 and 2022, the Company’s management performed impairment tests for the cost of investments in subsidiaries. To assess whether impairment indicators exist,
the cost of investments in subsidiaries operating in farming and mushroom growing activities was compared against the net assets value of those subsidiaries as at 31 December 2023
and 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 and
estimated the recoverable amount of the specific subsidiary using the discounted cash flow method.
In 2023, the results of the impairment test for subsidiaries engaged in farming activities revealed indications of impairment for certain subsidiaries, as their net assets value was below the
carrying amount of the investment. The future discounted cash flows method was applied to these subsidiaries, based on 5-year financial forecasts that were endorsed by the management.
Key assumptions used in impairment test included forecast EBITDA which was based on actual cultivated land area, actual quantity of livestock and forecast figures such as yields, prices,
costs, subsidies per hectare, and operating expenses. Oher important assumptions are listed in the table below. As at 31 December 2023, the present values of future cash flows for
these subsidiaries were higher than the cost of investments, therefore no impairment loss for subsidiaries operating in farming activities was recognised.
The following assumptions were used in the impairment tests for subsidiaries operating in farming:
Assumption
At 31 December 2023
Forecast period
5 years
Annual growth rate
3.30%
Discount rate (WACC):
8.30%
The results of impairment indicators assessment of mushroom growing subsidiary showed that there were indications of impairment. The mushroom growing subsidiary include the
investment in Baltic Champs UAB in 2023 and Baltic Champs UAB group comprising Baltic Champs UAB and Grybai LT KB in 2022. Accordingly, the impairment test was based on
forecast cash flows from the Baltic Champs UAB in 2023 and entire Baltic Champs UAB group in 2022. The forecast annual cash flows were determined with reference to the budget for
2024 and 2023 respectively. 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. As at 31 December 2023, the recoverable amount of Baltic Champs UAB was lower than the cost of investment by EUR 3,839 thousand,
therefore impairment loss was recognised for this amount. Throughout 2023, Baltic Champs UAB sold its subsidiary Grybai LT KB and paid EUR 4,000 thousand dividends to the Company.
In 2022, recoverable amount was higher than the cost of investment, therefore it was concluded that there was no impairment for the investment in Baltic Champs UAB.
123
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts are in EUR ’000 unless otherwise stated)
The following assumptions were used in the impairment tests for subsidiary operating in mushroom growing:
Assumption
At 31 December 2023
At 31 December 2022
Forecast period
5 years
5 years
Annual growth rate | 5.76% | 5.00% |
Discount rate (WACC): | ||
8.04% | 7.72% |
In 2023, the Company recognised EUR 3,839 thousand impairment loss for investments in subsidiary Baltic Champs UAB. No impairment loss or reversal of previous impairment loss for investments in subsidiaries were recognised in 2022. Sensitivity to change in key assumptions used in the impairment tests: | ||||
Change in assumption | Impact on increase in impairment | |||
Assumption | 2023 | 2022 | 2023 | 2022 |
Decrease in annual growth rate | 1 p.p. | 1 p.p. | (1,659) | No impact |
Increase in discount rate (WACC) | 1 p.p. | 0.5 p.p. | (4,330) | No impact |
Decrease in EBITDA | 10 p.p. | 5 p.p. | (4,893) | No impact |
124
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts are in EUR ’000 unless otherwise stated)
Net book amount | 3,465 | 1,646 | 132 | 5,243 | 1,646 | 107 | 1,753 |
Net book amount at 1 January 2023 | 3,465 | 1,646 | 132 | 5,243 | 1,646 | 107 | 1,753 |
- additions | - | 1,168 | 330 | 1,498 | - | 229 | 229 |
- internal development | - | 546 | - | 546 | |||
- write-offs and disposals | - | - | - | - | (1,646) | (9) | (1,655) |
- disposal of subsidiary (note 30) | (3,465) | - | (16) | (3,481) | - | - | - |
- amortisation | - | - | (24) | (24) | - | (1) | (1) |
- reclassification | - | 1,431 | - | 1,431 | - | - | - |
Net book amount at 31 December | - | 4,791 | 422 | 5,213 | - | 326 | 326 |
2023 | |||||||
At 31 December 2023 | |||||||
Cost | - | 4,791 | 825 | 5,616 | - | 352 | 352 |
Accumulated amortisation | - | - | (403) | (403) | - | (26) | (26) |
Net book amount | - | 4,791 | 422 | 5,213 | - | 326 | 326 |
the Company has disposed of internally generated intangible assets and transferred them to the subsidiary UAB AUGA Tech. The Group develops hybrid biomethane-electric (M1) and
125
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts are in EUR ’000 unless otherwise stated)
Assumption | |
At 31 December 2022 | |
Forecast period | 5 years |
Forecast revenue for first period | EUR 9.6 million |
Annual growth rate of revenue | 5% |
Annual growth rate of expenses | 5% |
Annual growth rate beyond 5-year period | 1% |
Forecast EBITDA margin | 21% |
Discount rate (after-tax WACC) | 8.07% |
Expected capital expenditure approximates depreciation charges | Yes |
Change in assumption | Impact on increase in impairment at | |
Changes in assumptions | 31 December 2022 | |
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 |
126
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts are in EUR ’000 unless otherwise stated)
9. Biological Assets
The Group’s biological assets comprised as follows:
At 31 December 2023 | At 31 December 2022 | |
Livestock | 10,686 | 10,515 |
Total non-current biological assets | 10,686 | 10,515 |
Crops | 20,708 | 17,464 |
Mycelium cultivation seedbed | 2,365 | 2,419 |
Total current biological assets | 23,073 | 19,883 |
Total biological assets | 33,759 | 30,398 |
LIVESTOCK
Value of the Group’s livestock, EUR ‘000 | Dairy cows | Heifers | Other livestock | Total |
At 1 January 2022 | 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 |
Additions | - | - | 5 | 5 |
Increase (birth) | - | 60 | 46 | 106 |
Makeweight | - | 3,828 | 505 | 4,334 |
Reclassifications from other categories | 2,934 | (2,934) | - | - |
Disposals | (746) | (259) | (271) | (1,276) |
Natural mortality (recognised as change in fair value of biological assets | ||||
(note 22) | (296) | (57) | (32) | (384) |
Gain/(loss) on change in fair value of biological assets (note 22) | (1,794) | (566) | (254) | (2,614) |
At 31 December 2023 | 6,897 | 3,651 | 136 | 10,686 |
Quantity of the Group’s livestock, units:
Dairy cows
Heifers
Other livestock
Total
At 1 January 2022
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
Additions
-
-
-
-
127
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts are in EUR ’000 unless otherwise stated)
Increase (birth)
-
2,073
1,600
3,673
Reclassifications between categories
1,188
(1,188)
-
-
Disposals
(1,060)
(435)
(1,489)
(2,984)
Natural mortality
(132)
(221)
(90)
(443)
At 31 December 2023
3,453
3,389
348
7,190
In 2023, the Group produced 27,751 tons of milk (2022: 27,159 tons).
Assumption | At 31 December 2023 | At 31 December 2022 | ||
Forecast period | 4 years | 4 years | ||
Average milk price | 0.480 | EUR/kg | 0.550 | EUR/kg |
Useful life of cow herd | 1-4 years | 1-4 years | ||
Average yield per cow | 22.63 kg per day | 22.35 kg per day | ||
Discount rate (after-tax WACC) | 7.70% | 7.72% |
128
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts are in EUR ’000 unless otherwise stated)
Crops | |
At 1 January 2022 | 17,108 |
Seeding and other costs before point of harvest | 23,954 |
Harvest of crops | (43,888) |
Effect of change in fair value on initial recognition of agricultural produce (note 22) | 2,826 |
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 |
Seeding and other costs before point of harvest | 24,344 |
Harvest of crops | (34,568) |
Effect of change in fair value on initial recognition of agricultural produce (note 22) | (7,240) |
Autumn seeding and land tillage for spring | 19,420 |
Effect of change in fair value on initial recognition of agricultural produce – winter crops (note 4, 22) | 1,288 |
At 31 December 2023 | 20,708 |
Winter | Winter | |||||
Winter wheat | rapeseed | barley | Vicia + triticale | Other crops | Total | |
Total seeded area (tilled land), ha | 10,878 | 5,414 | 1,463 | 891 | 19,455 | 38,100 |
Total costs incurred, EUR ‘000 | 6,850 | 3,565 | 937 | 431 | 7,638 | 19,420 |
Average costs per ha (EUR) | 630 | 658 | 641 | 484 | 393 | 510 |
2022 | ||||||
Total seeded area (tilled land), ha | 10,249 | 1,651 | 765 | - | 25,849 | 38,514 |
Total costs incurred, EUR ‘000 | 5,321 | 1,272 | 400 | - | 8,507 | 15,499 |
Average costs per ha (EUR) | 519 | 771 | 523 | - | 329 | 402 |
129
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts are in EUR ’000 unless otherwise stated)
• | |
In 2023, the Group sold 11,510 tons of fresh mushrooms (2022: 11,245 tons).
130
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts are in EUR ’000 unless otherwise stated)
At 31 December 2023 | At 31 December 2022 | |
Agricultural produce | 14,156 | 22,069 |
Raw materials and consumables | 10,567 | 9,482 |
Herbaceous forage | 4,204 | 4,369 |
Finished products | 304 | 435 |
Other | 798 | 267 |
Total | 30,029 | 36,622 |
Write-down allowance | (1,366) | (1,381) |
Carrying amount | 28,663 | 35,241 |
11. Trade and Other Receivables | GROUP | COMPANY | ||
At 31 December 2023 | At 31 December 2022 | At 31 December 2023 | At 31 December 2022 | |
Trade receivables | 5,551 | 6,830 | 2,773 | 8,511 |
Subsidies and grants receivable from the National Paying Agency | ||||
(NPA) | 4,661 | 998 | - | - |
Receivables from natural persons | 97 | 80 | - | 3 |
Receivable on disposal of subsidiaries (note 30) | - | 3,106 | - | - |
Loan granted | 536 | 518 | - | - |
Other receivables | 6 | 12 | 3,265 | 11 |
Total | 10,851 | 11,544 | 6,038 | 8,525 |
Less: loss allowance for receivable on disposal of subsidiaries | - | (3,106) | - | - |
Less: loss allowance for other receivables | (197) | (89) | - | - |
Trade and other receivables, net | 10,654 | 8,350 | 6,038 | 8,525 |
Non-current portion | 536 | 518 | 3,265 | 5,817 |
Current portion | 10,118 | 7,832 | 2,773 | 2,708 |
As at 31 December 2023 and 2022, a part of the Company‘s trade receivables was classified as non-current based on the expected recoverable amount from the subsidiaries within one
financial year and in later periods.
131
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts are in EUR ’000 unless otherwise stated)
13. Cash and Cash Equivalents | ||||
The Group’s cash and cash equivalents comprised as follows as at 31 December: | ||||
GROUP | COMPANY | |||
At 31 December 2023 | At 31 December 2022 | At 31 December 2023 | At 31 December 2022 | |
Cash at bank | 3,397 | 3,309 | 10 | 9 |
Cash on hand | 58 | 28 | - | - |
Carrying amount | 3,455 | 3,337 | 10 | 9 |
132
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts are in EUR ’000 unless otherwise stated)
Financial assets at amortised cost
Trade receivables
5,354
6,742
6,038
8,511
Subsidies receivable from the NPA
4,661
998
-
-
Other receivables | 639 | 610 | - | 14 |
Cash and cash equivalents | 3,455 | 3,337 | 10 | 9 |
Total | 14,109 | 11,687 | 6,048 | 8,534 |
GROUP | COMPANY | |||
Financial liabilities at amortised cost | At 31 December 2023 | At 31 December 2022 | At 31 December 2023 | At 31 December 2022 |
Borrowings | 76,663 | 69,798 | 32,381 | 32,034 |
Lease liabilities | 50,371 | 47,229 | 537 | 576 |
Trade payables | 27,721 | 25,352 | 1,032 | 846 |
Other payables | 232 | 192 | 22 | 21 |
Total | 154,987 | 142,573 | 33,972 | 33,477 |
133
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts are in EUR ’000 unless otherwise stated)
Reserve for share-based payments to employees | Number of shares, units | Amount, EUR ‘000 |
Total reserve at 1 January 2022 | 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 |
Shares allocated to employees under share options as at 31 December 2023 | 6,220,409 | 1,804 |
Unallocated shares as at 31 December 2023 | 3,753,815 | 1,089 |
Total reserve at 31 December 2023 | 9,974,224 | 2,893 |
134
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts are in EUR ’000 unless otherwise stated)
Movements in borrowings from subsidiaries:
COMPANY
2023
2022
Balance at 1 January
2,694
2,519
Proceeds from borrowings during the year
12,518
9,117
Repayments of borrowings
(7,903)
(8,139)
135
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts are in EUR ’000 unless otherwise stated)
Borrowings offset with dividends receivable
(4,000)
-
Borrowings offset with loan granted
(5,718)
(803)
Non-cash loan for investments in subsidiaries
5,888
-
Balance at 31 December
3,479
2,694
Loan from subsidiaries The Company has borrowings from its subsidiary Baltic Champs UAB, repayment term expires in 2026, and from the Group’s monetary fund – Žemės Vystymo Fondas 20, repayment term expires in 2024. In 2023, the Company offset EUR 4,000 thousand of receivable dividends against a loan received from Baltic Champs UAB. In addition, Žemės Vystymo Fondas 20 provided non-cash loan of EUR 5,888 thousand to the Company for the purpose of increasing investments in subsidiaries (cash paid directly to subsidiary), which were offset against a loan granted. | ||||
136
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts are in EUR ’000 unless otherwise stated)
The Group’s future minimum lease payments comprised as follows: | ||||
At 31 December 2023 | At 31 December 2022 | |||
Present value of minimum | Present value of minimum | |||
Minimum lease payments | lease payments | Minimum lease payments | lease payments | |
Within 1 year | 10,750 | 7,855 | 10,315 | 7,479 |
Later than 1 year | 50,849 | 40,532 | 49,870 | 39,750 |
Minimum lease payments | 61,599 | 48,387 | 60,185 | 47,229 |
Less: future finance charges | (13,212) | - | (12,956) | - |
Present value of minimum lease payments | 48,387 | 48,387 | 47,229 | 47,229 |
The Company’s future minimum lease payments comprised as follows as at 31 December:
137
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts are in EUR ’000 unless otherwise stated)
At 31 December 2023
At 31 December 2022
Minimum lease payments
Present value of minimum lease
payments
Minimum lease payments
Present value of minimum lease
payments
Within 1 year
201
166
179
143
Later than 1 year | 412 | 371 | 495 | 433 |
Minimum lease payments | 613 | 537 | 673 | 576 |
Less: future finance charges | (76) | - | (97) | - |
Present value of minimum lease payments | 537 | 537 | 576 | 576 |
GROUP | COMPANY | |||
2023 | 2022 | |||
2023 | 2022 | |||
Balance at 1 January | 47,229 | 45,519 | 576 | 667 |
New leases | 639 | 934 | - | - |
Interest charged | 3,707 | 2,978 | 32 | 27 |
Interest paid | (3,707) | (2,978) | (32) | (27) |
Lease payments | (8,737) | (8,018) | (163) | (141) |
Effect of lease modifications | 9,256 | 8,794 | 124 | 50 |
Balance at 31 December | 48,387 | 47,229 | 537 | 576 |
GROUP | COMPANY | |||
2023 | 2022 | 2023 | 2022 | |
Balance at 1 January | 4,463 | 3,105 | 842 | 953 |
Grants and subsidies received | 827 | 1,831 | - | - |
Amortisation | (599) | (473) | (125) | (111) |
Balance at 31 December | 4,691 | 4,463 | 717 | 842 |
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 (All amounts are in EUR ’000 unless otherwise stated) | |
138 |
Within 1 year | 545 | 383 | 102 | 111 |
After 1 year | 4 146 | 4,080 | 615 | 731 |
Total | 4,691 | 4,463 | 717 | 842 |
GROUP | COMPANY | |||
2023 | 2022 | 2023 | 2022 | |
Current income tax | - | - | - | - |
Change in deferred income tax | 208 | 913 | - | - |
Income tax expense (benefit) | 208 | 913 | - | - |
139
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts are in EUR ’000 unless otherwise stated)
Deferred income tax | ||||
Deferred income tax assets | GROUP | COMPANY | ||
2023 | 2022 | 2023 | 2022 | |
Loss allowance for receivables and write-down allowance for inventories | 164 | 221 | - | - |
Revaluation of land | - | - | - | - |
Accumulated tax losses | 2,843 | 2,959 | - | - |
Total deferred income tax assets | 3,007 | 3,180 | - | - |
Offset against deferred income tax liability | (715) | (261) | - | - |
Deferred income tax assets | 2,292 | 2,919 | - | - |
Deferred income tax liabilities | GROUP | COMPANY | ||
2023 | 2022 | 2023 | 2022 | |
Adoption of IFRS 16 | 439 | 307 | - | - |
Change in fair value of winter crops on initial recognition | 193 | 290 | ||
Revaluation of land | 1,888 | 1,527 | - | - |
Total deferred income tax liabilities | 2,520 | 2,124 | - | - |
Offset against deferred income tax assets | (715) | (261) | - | - |
Deferred income tax liabilities | 1,805 | 1,863 | - | - |
GROUP
140
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts are in EUR ’000 unless otherwise stated)
Recognised in other comprehensive | |||||||||
income | - | - | - | - | - | 361 | - | 361 | |
At 31 December 2023 | 164 | - | 2,843 | 3,007 | 439 | 1,888 | 193 | 2,520 |
GROUP | COMPANY | |||
At 31 December 2023 | At 31 December 2022 | At 31 December 2023 | At 31 December 2022 | |
Total accumulated tax losses carry forward | 113,136 | 80,916 | 26,715 | 22,443 |
Less: deferred income tax asset on tax losses carry forward | (18,953) | (19,727) | - | - |
Total accumulated tax losses on which no deferred income tax asset | ||||
was recognised | 94,183 | 61,189 | 26,715 | 22,443 |
141
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts are in EUR ’000 unless otherwise stated)
GROUP | COMPANY | |||
At 31 December | ||||
At 31 December 2023 | 2022 | At 31 December 2023 At 31 December 2022 | ||
Trade payables | 23,278 | 18,374 | 1,032 | 846 |
Payables under supplier financing arrangements | 4,443 | 6,978 | - | - |
Total | 27,721 | 25,352 | 1,032 | 846 |
21. Other Payables | ||||
GROUP | COMPANY | |||
At 31 December 2023 | At 31 December 2022 | At 31 December 2023 | At 31 December 2022 | |
Employment-related liabilities | 2,687 | 2,422 | 173 | 326 |
Vacation reserve | 1,406 | 1,343 | 195 | 340 |
Advance amounts received | 517 | 280 | - | - |
Taxes payable | 73 | 50 | 20 | 6 |
Deferred income and accrued expenses | 724 | 893 | - | 2 |
Other payables | 232 | 192 | 22 | 21 |
Total | 5,639 | 5,180 | 410 | 695 |
142
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
(All amounts are in EUR ’000 unless otherwise stated)
- | |||||||||
143
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts are in EUR ’000 unless otherwise stated)
• • • • • | ||
Around 50% of total revenue of the Group was generated by 10 largest customers in 2023, while in 2022 around 50% of total revenue of the Group was generated by 11 largest customers. | ||
144
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts are in EUR ’000 unless otherwise stated)
COMPANY
The Company’s revenue by nature:
2023
2022
Business consultation and financial accounting services
2,544
3,847
Dividends from subsidiaries
4,701
2,057
Other revenue
1
31
Total
7,246
5,935
Wages and salaries and social security contributions | 19,150 | 14,947 |
Contractor services | 12,400 | 10,520 |
Depreciation of PP&E | 6,156 | 7,865 |
Raw materials | 5,108 | 4,302 |
Packaging expenses | 6,733 | 7,180 |
Fuel expenses | 4,725 | 5,089 |
Feed for cattle | 3,928 | 4,169 |
Organic fertilizers | 5,358 | 3,687 |
Seeds | 4,122 | 3,401 |
Depreciation of ROU assets | 5,289 | 3,416 |
Electricity and utility services | 1,589 | 2,870 |
Spare parts and inventories | 4,502 | 3,088 |
Inventory write-off expenses | 978 | 2,390 |
Medicine | 359 | 359 |
Inventory write-down allowance (reversal) | (15) | (155) |
Other expenses | 2,356 | 2,166 |
Less: direct government subsidies related to costs | (11,846) | (12,711) |
Total | 70,892 | 62,583 |
145
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts are in EUR ’000 unless otherwise stated)
24. Selling Expenses | |||||
GROUP | COMPANY | ||||
2023 | 2022 | 2023 | 2022 | ||
Marketing, advertising, intermediation | 1,205 | 912 | 350 | 886 | |
Wages and salaries and social security contributions | 792 | 726 | 623 | 726 | |
Other selling expenses | 145 | - | - | - | |
Total | 2,142 | 1,638 | 973 | 1,612 |
25. Administrative Expenses | |||||
GROUP | COMPANY | ||||
2023 | 2022 | 2023 | 2022 | ||
Wages and salaries and social security contributions | 4,896 | 4,581 | 2,430 | 2,733 | |
Depreciation of PP&E and ROU assets and amortisation of intangible assets | 1,206 | 915 | 379 | 286 | |
Insurance and taxes | 1,111 | 880 | 53 | 70 | |
Office supplies | 692 | 616 | 132 | 124 | |
Share-based payment expenses | 657 | 589 | 657 | 589 | |
Consultation and business plan preparation | 613 | 320 | 386 | 235 | |
Fuel | 374 | 343 | 67 | 117 | |
Transport expenses | 304 | 408 | 164 | 167 | |
Rent and utility services | 255 | 304 | 57 | 63 | |
Services of credit institutions | 118 | 160 | 19 | 4 | |
Real estate registration and notary fees | 99 | 112 | 1 | - | |
PP&E write-offs | - | 5 | - | - | |
Change in impairment of PP&E | - | (393) | - | - | |
Provision due sanctions of NPA | 565 | - | - | - | |
Other | 946 | 926 | 227 | 297 | |
Total | 11,836 | 9,766 | 4,572 | 4,685 |
GROUP | COMPANY | |||||
2023 | 2022 | 2023 | 2022 | |||
Financial statements audit services under contracts | 159 | 178 | 88 | 103 | ||
Other services | 3 | - | 3 | - | ||
Total | 162 | 178 | 91 | 103 |
146
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(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 2023, the decisions were made to pay out dividends to the shareholders. In 2023, the Company
received dividends from the Group entities in amount of EUR 4,701 thousand (2022: EUR 2,057 thousand).
GROUP | COMPANY | |||
2023 | 2022 | 2023 | 2022 | |
Interest income | 45 | 40 | 238 | 30 |
Rental income (expenses) | 80 | 114 | 10 | 6 |
Other income (expenses) | 27 | 290 | 198 | 119 |
Total | 152 | 444 | 447 | 155 |
GROUP | COMPANY | |||
2023 | 2022 | 2023 | 2022 | |
Gain/(loss) on disposal of PP&E | 54 | 297 | - | - |
Insurance benefits | 83 | 55 | - | 1 |
Other | - | - | (3) | 1 |
Total | 137 | 352 | (3) | 2 |
Share of dividends in
2023 (%)
Share of dividends in
2023 (EUR)
Share of dividends in
2022 (EUR)
Share of dividends in
2022 (EUR)
Entity distributing dividends
AUGA Group AB
AUGA Group AB
AUGA Group AB
AUGA Group AB
Baltic Champs, UAB
100.00
4,000,000
-
-
Žemės Vystymo Fondas 20 UAB
100.00
692,000
100.00
672,000
AWG Investment 2 UAB
100.00
5,000
-
-
AVG Investment UAB
100.00
4,000
100.00
4,000
AWG Investment 1 UAB
-
-
100.00
1,154,000
eTime invest UAB
-
-
100.00
227,000
Total
-
4,701,000
-
2,057,000
147
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts are in EUR ’000 unless otherwise stated)
29. Finance Costs | ||||
GROUP | COMPANY | |||
2023 | 2022 | 2023 | 2022 | |
Interest on borrowings | 3,223 | 2,413 | 358 | 235 |
Interest on bonds | 2,177 | 1,815 | 1,697 | 1,815 |
Finance costs related to ROU assets (IFRS 16) | 3,707 | 2,900 | 32 | 25 |
Foreign exchange loss | 10 | (16) | (1) | 1 |
Change in fair value of derivative instruments | - | 1 | - | - |
Interest on borrowings from subsidiaries and shareholder | - | - | 159 | 61 |
Other finance costs | 1,060 | 322 | 355 | 66 |
Total | 10,177 | 7,435 | 2,600 | 2,203 |
2023 | 2022 | |
Revenue | 4,041 | 7,267 |
Expenses | (3,504) | (6,399) |
Profit before income tax | 537 | 868 |
Income tax expense | - | - |
Profit after income tax of discontinued operation | 537 | 868 |
Gain on sale of the subsidiary after income tax | 7,303 | - |
Profit from discontinued operation | 7,840 | 868 |
Net cash inflow from operating activities | 100 | 328 |
Net cash inflow/(outflow) from investing activities | 11,837 | (59) |
Net cash (outflow) from financing activities | (91) | (181) |
Net increase in cash generated by the subsidiary | 11,846 | 88 |
148
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts are in EUR ’000 unless otherwise stated)
In 2023 and 2022, net cash inflow from investing activities of Grybai LT comprised payments for property plant and equipment, as well as intangible assets (2023: EUR 74 thousand, 2022: EUR 59 thousand). In 2023, a cash inflow of EUR 11,911 thousand from the sale of Grybai LT is included under investing activities. This amount consists of consideration received of EUR 7,789 thousand and a loan of EUR 4,122 thousand granted by Kauno Grūdai UAB to Grybai LT to repay loans to Baltic Champs UAB and Swedbank at the date of transaction. A non-cash item of EUR 5,000 EUR was not included in the net cash inflow from investing activities as this amount of the consideration was paid by Kauno Grūdai directly to Swedbank to cover financial liabilities on behalf of Baltic Champs. Total consideration (including cash and non-cash items) and loans received from Kauno grūdai was equal to EUR 16,911 thousand. Details of the sale of the subsidiary | 2023 |
Total consideration | 12,789 |
Received loans | 4,122 |
Repayment of loans | (4,122) |
Carrying amount of net assets sold | (5,486) |
Gain on sale before income tax | 7,303 |
Income tax expense on gain | - |
Gain on sale after income tax | 7,303 |
The carrying amounts of Grybai LT KB assets and liabilities as at the date of sale (15 July 2023) were: | 2023 |
Goodwill and other intangible assets | 3,481 |
Property, plant and equipment | 3,814 |
Inventory | 1,756 |
Trade receivables and other current assets | 1,325 |
Cash and cash equivalents | 81 |
Total assets | 10,457 |
Financial liabilities | 755 |
Borrowings | 3,379 |
Trade payables and other current liabilities | 837 |
Total liabilities | 4,971 |
Net assets | 5,486 |
149
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts are in EUR ’000 unless otherwise stated)
GROUP | COMPANY | |||
2023 | 2022 | 2023 | 2022 | |
Weighted average number of shares | 230,771,682 | 228,624,984 | 230,771,682 | 228,624,984 |
Net loss from continuing operations attributed to shareholders of the Company | (26,253) | (6,289) | (4,295) | (2,417) |
Earnings (loss) per share (EUR) from continuing operations | (0.11) | (0.03) | (0.02) | (0.01) |
Profit from discontinuing operations attributed to shareholders of the Company | 7,840 | 868 | - | - |
Earnings (loss) per share (EUR) from discontinuing operations | 0.03 | 0.00 | - | - |
Total net loss attributed to shareholders of the Company | (18,413) | (5,421) | (4,295) | (2,417) |
Total earnings (loss) per share (EUR) | (0.08) | (0.02) | (0.02) | (0.01) |
32. Related-party Transactions
COMPANY
The Company‘s related parties are as follows:
- AUGA Group AB shareholders with control and significant influence;
- Subsidiaries of AUGA Group AB
The Company's transactions with related parties and balances of transactions were as follows:
2023
Related parties of the Company
Loans granted
Receivables and
prepayments
Borrowings
Payables
Interest on borrowings and
other purchases
Sales and interest income
Subsidiaries
-
5,970
3,479
576
159
6,087
Shareholders with significant influence
Baltic Champs Group UAB
-
-
-
-
-
-
Kęstutis Juščius
-
-
-
-
-
-
Total
-
5,970
3,479
576
159
6,087
150
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts are in EUR ’000 unless otherwise stated)
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 |
Payments to the Group’s and the Company’s Board members and key management | ||
personnel, EUR | 2023 | 2022 |
Wages and salaries | 230,992 | 221,276 |
Shares | 14,558 | - |
Total | 245,550 | 221,276 |
33. Off-balance Sheet Commitments and Contingencies
Guarantees - Company
As at 31 December 2023, the Company had issued guarantees to banks to secure fulfilment of financial liabilities of the Group's subsidiaries for the total amount of EUR 44,704
thousand (2022: EUR 38,812 thousand).
34. Events After the Reporting Period
* * * *
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 consolidated and separate financial statements
Our opinion
In our opinion, the consolidated and separate financial statements give a true and fair view of the consolidated financial position of AUGA group AB (the
“Company”) and its subsidiaries (together - the “Group”) and separate financial position of the Company as at 31 December 2023, and of the Group’s
and the Company’s consolidated and separate financial performance and consolidated and separate 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 30 April 2024.
What we have audited
The Group’s and the Company’s consolidated and separate financial statements comprise:
● the consolidated and separate balance sheets as at 31 December 2023;
● the consolidated and separate statements of profit or loss and other comprehensive income for the year then ended;
● the consolidated and separate statements of changes in equity for the year then ended;
● the consolidated and separate statements of cash flows for the year then ended; and
● the notes to the consolidated and separate financial statements, comprising material accounting policy information 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.
The non-audit services that we have provided to the Company and the Group, in the period from 1 January 2023 to 31 December 2023, are disclosed in
Note 25 to the consolidated and separate financial statements.
Material uncertainty relating to going concern
We draw attention to Note 2.1. ‘Basis of preparation’ in the consolidated and separate financial statements, which indicates that as at 31 December
2023, the Company’s and the Group’s current liabilities exceeded its current assets by EUR 27,331 thousand and 36,523 thousand, respectively, and
discusses the management’s plans and needs to refinance current borrowings in 2024. These events or conditions, along with other matters as set forth
in Note 2.1. ‘Basis of preparation’, indicate that a material uncertainty exists that may cast significant doubt on the Company’s and the Group’s ability to
continue as a going concern. Our opinion is not modified in respect of this matter.
Our audit approach
Overview
● Overall Group and Company materiality: EUR 774 thousand and EUR 738 thousand, respectively
● We conducted our audit work at 4 significant components, all located in Lithuania
● Our audit addressed all of the Group’s revenues and assets.
● Group: Measurement of biological assets
● Company: Impairment of investments in subsidiaries
Materiality
Group
scoping
Key audit
matters
As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the consolidated and separate 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 738 thousand
Overall Group materiality
EUR 774 thousand
How we determined it
Overall Company materiality was determined as 0.9% of the Company’s net assets. Overall Group materiality
was determined as 1.0% of the Group’s total revenue.
Rationale for the materiality
benchmark applied
We chose net assets as the benchmark for the 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 the 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 0.9% 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 37 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. In addition to the matter described in the Material uncertainty relating to going concern section, we
have determined the matters described below to be the key audit matters to be communicated in our report.
Key audit matter
How our audit addressed the key audit matter
The Group: Measurement of biological assets
(Refer to Note 2 Summary of material accounting policies, Note 4 Critical
accounting estimates and assumptions, Note 9 Biological assets)
The carrying amount of biological assets as at 31 December 2023 was
EUR 33.8 million (31 December 2022: EUR 30.4 million) and loss from
change in fair value recognised in 2023 amounted to EUR 9.0 million
(2022 fair value gain amounted to: EUR 2.7 million).
We focused on this area because it involves significant management’s
assumptions and judgements in determining the fair value of biological
assets.
Biological assets consist of livestock (including dairy cows, heifers and
other livestock), crops and mycelium growing in the Group’s farms in
Lithuania.
Livestock is measured at the fair value less costs to sell. The fair value of
dairy 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 market
price per kg of meat.
Crops are measured at the fair value less costs to sell. The fair value of
crops is determined using the future cash flow forecast model, including
the expected cash flows from crop sales and expected costs to be
incurred until harvest. The expected cash flows are determined using the
expected crop yields and the average expected sales prices per ton of
crops.
The cost of mycelium and other crops approximated the fair value as at
31 December 2023 as only little biological transformation took place. The
We obtained the valuation of livestock, crops and mycelium of the Group.
We have reviewed the outcome of previous accounting estimates
(performed retrospective review) to assist ourselves in identifying and
assessing the risks of material misstatement for the current year.
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.
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 average expected sales prices of crops to the
available market information.
We tested the internal control procedures over the Group’s purchase
process and allocation of costs to crops and mycelium.
We performed a detailed testing of the cost of mycelium at the balance
sheet date.
We also assessed the adequacy of disclosures in Note 4 and Note 9.
cost was estimated by allocating all direct and directly attributable indirect
costs to the newly seeded other crops and mycelium.
The Company: Impairment of investments in subsidiaries
(Refer to Note 2 Summary of material accounting policies, Note 4 Critical
accounting estimates and assumptions, Note 7 Investments in
subsidiaries)
The carrying value of investments in subsidiaries as at 31 December
2023 was EUR 108,7 million (31 December 2022: EUR 106,7 million) and
represents 93% of total assets of the Company in the separate financial
statements. During the year ended 31 December 2023, the Company has
recognised an impairment loss of investments in subsidiaries of EUR 3,8
million.
The management of the Company applied significant judgement in
assessment whether impairment indications exist and made significant
assumptions in determining recoverable amounts of investments using
discounted cash flows analysis.
We focused on this area because of the magnitude of the balances and
existing impairment indicators, which are significant operating lossess
incurred by the subsidiaries during the financial year and dividends paid
by some of the subsidiaries.
We obtained understanding of the management’s process for the
monitoring of the performance of the subsidiaries and for assessment of
the recoverable value of investments in subsidiaries.
We have reviewed the outcome of previous accounting estimates
(performed retrospective review) to assist ourselves in identifying and
assessing the risks of material misstatement for the current year.
We have obtained the management’s assessment whether impairment
indicators exist, analysed it and discussed it with the management.
For those entities, where impairment indicators were identified, we
obtained impairment test documentation, discussed with management
the basis for expected future performance, tested the major inputs in the
calculations by comparing those to assumptions used in other accounting
estimates (ie. measurement of biological assets), actual data points for
the current year, market data on forecast inflation of revenue and costs,
discount rate assumptions and sensitivity to selected assumptions.
When assessing impairment indicators and analysing the inputs used in
the impairment tests, we leveraged our knowledge from the audit of the
subsidiaries.
We also involved PwC valuation expert who assessed the overall
reasonableness, methodology and internal consistency of the
calculationof the impairment tests and the reasonableness of the discount
rate applied.
We also assessed the adequacy of disclosures in Note 4 and Note 7.
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 163 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 and separate financial statements with the requirements of the European Single
Electronic Reporting Format
We have been engaged based on 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 consolidated and separate financial
statements, including the consolidated annual report, for the year ended 31 December 2023 (the “Single Electronic Reporting Format of the
consolidated and separate financial statements”).
Description of a subject matter and applicable criteria
The Single Electronic Reporting Format of the consolidated and separate 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 and
separate 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
and separate 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 and separate 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 and separate 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 and separate
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 and separate 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
and separate 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 and separate financial statements, including the preparation of the XHTML format and marking up the consolidated and separate
financial statements;
• verification whether the XHTML format was applied properly;
• evaluating the completeness of marking up the consolidated and separate 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 and separate financial statements for the year ended 31 December 2023
complies, in all material aspects, with the ESEF Regulation.
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 8 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
30 April 2024
The auditor's electronic signature is used herein to sign only the Independent Auditor's Report
160
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(All amounts are in EUR ’000 unless otherwise stated)
Annexes
161
Consolidated Annual Report 2023
Annex No. 1: Corporate Governance Reporting Form for the Year Ended 31 December 2023
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 25.4 of the Listing Rules of AB Nasdaq Vilnius, hereby discloses how it complies with the Corporate Governance Code for the Companies listed on Nasdaq
Vilnius as well as its specific provisions or recommendations. In case of non-compliance with this Code or some of its provisions or recommendations, the specific provisions or
recommendations that are not complied with must be indicated and the reasons for such non-compliance must be specified. In addition, other explanatory information indicated in this
form must be provided.
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 2 dependent (Kęstutis Juščius and
Kristina Daudoravičienė) and 3 independent members (Peter Bryde, Andrej Cyba and Justina Klyvienė).
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 1 dependent and 2 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 2023 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.
Consolidated Annual Report 2023
162
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.
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
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
Consolidated Annual Report 2023
163
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.
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 of shareholders. Proposed candidates to member of the
collegial body should also participate in the general meeting of
shareholders in case the election of new members is included into the
agenda of the general meeting of shareholders.
YES
The Company's Extraordinary General Meeting of Shareholders held on
07.11.2023 was attended live by the Company's CEO and some of the
nominees for election to the Board of the Company, and therefore the
shareholders present at the live meeting were given the opportunity to ask
questions of the Company's management and/or the nominees for election
to the Company's Board.
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
NOT APPLICABLE
Consolidated Annual Report 2023
164
analysis and decision-making; b) not seek or accept any unjustified
privileges that might compromise their independence.
2.1.5 The supervisory board should oversee that the company’s tax
planning strategies are designed and implemented in accordance
with the legal acts in order to avoid faulty practice that is not related
to the long-term interests of the company and its shareholders, which
may give rise to reputational, legal or other risks.
NOT APPLICABLE
2.1.6 The company should ensure that the supervisory board is
provided with sufficient resources (including financial ones) to
discharge their duties, including the right to obtain all the necessary
information or to seek independent professional advice from external
legal, accounting or other experts on matters pertaining to the
competence of the supervisory board and its committees.
NOT APPLICABLE
2.1. 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
NOT APPLICABLE
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the meetings of the supervisory board throughout the financial year
of the company, the shareholders of the company should be notified
thereof.
2.2.5 When it is proposed to appoint a member of the supervisory
board, it should be announced which members of the supervisory
board are deemed to be independent. The supervisory board may
decide that, despite the fact that a particular member meets all the
criteria of independence, he/she cannot be considered independent
due to special personal or company-related circumstances.
NOT APPLICABLE
2.2.6 The amount of remuneration to members of the supervisory
board for their activity and participation in meetings of the supervisory
board should be approved by the general meeting of shareholders.
NOT APPLICABLE
2.2.7 Every year the supervisory board should carry out an
assessment of its activities. It should include evaluation of the
structure of the supervisory board, its work organization and ability to
act as a group, evaluation of the competence and work efficiency of
each member of the supervisory board, and evaluation whether the
supervisory board has achieved its objectives. The supervisory board
should, at least once a year, make public respective information about
its internal structure and working procedures.
NOT APPLICABLE
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,
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
Consolidated Annual Report 2023
166
employees and other interest groups by respectively striving to
achieve sustainable business development.
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.
3.1.4 Moreover, the management board should ensure that the
measures included into the OECD Good Practice Guidance
1
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.
3.1 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
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
1
Link to the OECD Good Practice Guidance on Internal Controls, Ethics and Compliance: https://www.oecd.org/daf/anti-bribery/44884389.pdf
Consolidated Annual Report 2023
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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.
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.
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 the sole owner of the controlling shareholder
of the Company.
The impartiality of the Board is ensured by the fact that the majority (60%)
of the Company's Board members are independent.
3.2.6 Each member should devote sufficient time and attention to
perform his duties as a member of the management board. Should a
YES
Based on the independence criteria set out in the legislation and the self-
assessment of the Board members themselves, the Board is composed of
Consolidated Annual Report 2023
168
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.
2 dependent members (Kęstutis Juščius and Kristina Daudoravičienė) and
3 independent members (Peter Bryde, Andrej Cyba and Justina Klyviene).
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
2
, 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 of the legal acts regulating the processing
of personal data.
YES
The Board has carried out a self-assessment in 2023. Information on the
structure of the Board is provided in the Company's Annual Report and is
published on the Company's website.
Principle 4: Rules of procedure of the supervisory board and the management board of the company
2
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.
Consolidated Annual Report 2023
169
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.
Consolidated Annual Report 2023
170
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
3
.
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 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
YES
The Audit Committee consists of 1 dependent and 2 independent members
of the Board. The Chairman of the Audit Committee is independent
member of the Board and not the Chairman of the Board.
3
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).
Consolidated Annual Report 2023
171
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.
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
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;
NOT APPLICABLE
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172
3) devote the attention necessary to ensure succession planning.
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
5.1. 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
4
.
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
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.
4
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.
Consolidated Annual Report 2023
173
for significant and unusual transactions where the accounting may be
subject to different approaches.
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.
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
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174
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.
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
YES
The Company's Remuneration Policy applies only to the Board and the
Chief Executive Officer.
Consolidated Annual Report 2023
175
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.
The Board members, if they are not employees of AUGA group, AB or
AUGA group AB directly or indirectly controlled companies, 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.
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
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.
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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.
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,
YES
Disclosed on the Company's website and in Interim and Annual Reports.
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the shares or votes held by them at the company, participation in
corporate governance of other companies, their competence and
remuneration;
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.
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
YES
Information is disclosed.
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178
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.
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 company’s annual
financial statements and the financial information provided in its
annual report should be audited by an independent audit firm.
YES
An independent audit firm audits the consolidated set of annual financial
statements of the Company 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 2023 the Company (its group companies) received
translation services from the auditors for the translation of its financial
statements, for which the auditors were paid EUR 3 000 (excluding VAT).
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179
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 2023 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 Elina Chodzkaitė-Barauskienė
Chief Financial Officer Kristupas Baranauskas