Linas AB
Company code 147689083
S. Kerbedzio 23, Panevezys
March 21, 2022
APPROVAL OF RESPONSIBLE PERSONS
Following Art. 22 of the Law on Securities of the Republic of Lithuania and the Regulations for
Drawing-up and Submission of the Periodic and the Additional Information issued by the Board of
Lithuanian Bank, we, Vilita Skersienė, Director of Linas AB and Egidijus Mikeliūnas, Head of finance dept.
hereby confirm that to our best knowledge condensed consolidated financial statements of year 2021 of
Linas AB Group of companies were drawn following the International Financial Reporting Standards (IFRS)
adopted for use in the European Union and present the fair and accurate status of the consolidated assets,
liabilities, financial condition and profit or loss and money flows of the Linas AB Group of companies.
Added:
AB Linas consolidated and the Company's financial statements, annual report and independent
auditor's report for the year ended December 31, 2021.
Director Linas AB
Vilita Skersienė
Head of finance dept. Linas AB
Egidi
jus Mikeliūnas
LINAS, AB
CONSOLIDATED AND COMPANY‘S
FINANCIAL STATEMENTS
AND INDEPENDENT AUDITOR'S REPORT
FOR YEAR ENDED DECEMBER 31, 2021
Linas, AB, company code 147689083, S. Kerbedžio g 23, Panevėžys
Consolidated and company‘s financial statements
For the year ended December 31, 2021 (All amounts in EUR thousands unless otherwise stated)
2
TABLE OF CONTENTS
STATEMENTS OF FINANCIAL POSITION ................................................................................... 3
STATEMENTS OF FINANCIAL POSITION (CONTINUED) ........................................................ 4
STATEMENTS OF COMPREHENSIVE INCOME .......................................................................... 5
THE GROUP‘s STATEMENTS OF CHANGES IN EQUITY .......................................................... 6
THE COMPANY‘S STATEMENTS OF CHANGES IN EQUITY ................................................... 7
CASH FLOW STATEMENTS ........................................................................................................... 8
FINANCIALS STATEMENTS EXPLANATORY NOTES .............................................................. 9
Linas, AB, company code 147689083, S. Kerbedžio g 23, Panevėžys
Consolidated and company‘s financial statements
For the year ended December 31, 2021 (All amounts in EUR thousands unless otherwise stated)
3
STATEMENTS OF FINANCIAL POSITION
The Group
The Company
December 31
December 31
Notes
2021
2020
2021
2020
ASSETS
Non-current assets
Intangible assets
4
Tangible assets
5
Investment property
6
Right-of-Use assets
7
Investments in subsidiaries
Loans granted from associates
24
Loans granted
Deferred income tax asset
17
Total non-current assets
Current assets
Inventories
8
Tangible assets held for sale
Prepayments
9
Amounts receivable within one year:
Trade accounts receivable
10
Short-term loans receivable from related
companies
24
Other accounts receivable
11
Cash and cash equivalents
12
Total current assets
TOTAL ASSETS
(continued on next page)
The accompanying explanatory notes are an integral part of these consolidated and Company‘s financial statements.
Linas, AB, company code 147689083, S. Kerbedžio g 23, Panevėžys
Consolidated and company‘s financial statements
For the year ended December 31, 2021 (All amounts in EUR thousands unless otherwise stated)
4
STATEMENTS OF FINANCIAL POSITION (CONTINUED)
The Group
The Company
Notes
December 31
December 31
2021
2020
2021
2020
EQUITY AND LIABILITIES
Capital and reserves
Share capital
1
Legal reserve and other reserves
13
Own shares (-)
(45 )
(184 )
(45 )
(184 )
Retained earnings
Total Equity
Liabilities
Non-current liabilities
Loans received
15
Other non-current liabilities
Obligations under finance lease
7
Long term provision for defined employee benefits
Total non-current liabilities
Current liabilities
Loans received
15
Obligations under finance lease current year part
7
Trade accounts payable
Trade accounts payable for related companies
24
Contracts liabilities
Employment obligations
Accrued expenses
Income tax payable
17
Other current liabilities
Total current liabilities
TOTAL EQUITY AND LIABILITIE
The accompanying explanatory notes are an integral part of these consolidated and Company‘s financial statements.
Linas, AB, company code 147689083, S. Kerbedžio g 23, Panevėžys
Consolidated and company‘s financial statements
For the year ended December 31, 2021 (All amounts in EUR thousands unless otherwise stated)
5
STATEMENTS OF COMPREHENSIVE INCOME
The Group
The Company
December 31
December 31
Notes
2021
2020
2021
2020
Revenue of sales
Cost of sales
(13,297 )
(11,709 )
(13,735 )
(12,151 )
GROSS PROFIT
Operating and selling expenses
20
(2,399 )
(1,899 )
(2,022 )
(1,626 )
Other operating income
21
Other operating expenses
21
(890 )
(705 )
(957 )
(698 )
PROFIT (LOSS) FROM
OPERATIONS
Financial income
22
Financial expenses
22
(55 )
(53 )
(51
(50 )
PROFIT (LOSS) BEFORE TAX
Income tax benefit (expense)
17
(194 )
(98 )
(195 )
(77 )
NET PROFIT
Earnings (loss) per share, Eur*
Net profit
Other comprehensive income
Total comprehensive income
* Basic earnings per share is calculated by dividing net profit (loss) for the period by the weighted average number of
ordinary shares in issue during the period. The Group has no potential convertible ordinary shares, so diluted earnings per
share equals basic earnings per share.
The accompanying explanatory notes are an integral part of these consolidated and Company‘s financial statements.
Linas, AB, company code 147689083, S. Kerbedžio g 23, Panevėžys
Consolidated and company‘s financial statements
For the year ended December 31, 2021 (All amounts in EUR thousands unless otherwise stated)
6
THE GROUP‘S STATEMENTS OF CHANGES IN EQUITY
The Group
Notes
Share
capital
Own
shares
(-)
Legal and
other
reserves
Reserve
for own
shares
acquisiti
on
Retained
Earnings (loss)
Total
Balance as of 31 December
2019
Impact of IFRS 16 adoption
(5 )
(5 )
Balance as of 31 December
2019 (corrected)
Net profit
Dividends
(370 )
(370 )
Own shares
(184 )
(184 )
Transfers to reserves
(161 )
Balance as of 31 December
2020
(184 )
Impact of IFRS 16 adoption
(3 )
(3 )
Balance as of 31 December
2020 (corrected)
(184 )
Net profit
Unrecognized gain (loss) in the
statement of comprehensive
income
Total comprehensive income
Own shares
Transfers to reserves
(39 )
Balance as of 31 December
2021
(45 )
The accompanying explanatory notes are an integral part of these consolidated and Company‘s financial statements.
Linas, AB, company code 147689083, S. Kerbedžio g 23, Panevėžys
Consolidated and company‘s financial statements
For the year ended December 31, 2021 (All amounts in EUR thousands unless otherwise stated)
7
THE COMPANY‘S STATEMENTS OF CHANGES IN EQUITY
The Company
Notes
Shar
e
capit
al
Own
shares
(-)
Legal
and
other
reserves
Reserve
for own
shares
acquisit
ion
Retaine
d
Earning
s (loss)
Total
Balance as of 31 December 2019
Impact of IFRS 16 adoption
(5 )
(5 )
Balance as of 31 December 2019
(corrected)
Net profit
Dividends
Own shares
(184 )
(184 )
Transfers to reserves
(8 )
Balance as of 31 December 2020
(184 )
Impact of IFRS 16 adoption
(2 )
(2 )
Balance as of 31 December 2020
(corrected)
(184 )
Net profit
Unrecognized gain (loss) in the
statement of comprehensive
income
Total comprehensive income
Own shares
Transfers to reserves
(39 )
Balance as of 31 December 2021
(45 )
The accompanying explanatory notes are an integral part of these consolidated and Company‘s financial statements.
Linas, AB, company code 147689083, S. Kerbedžio g 23, Panevėžys
Consolidated and company‘s financial statements
For the year ended December 31, 2021 (All amounts in EUR thousands unless otherwise stated)
8
CASH FLOW STATEMENTS
The Group
The Company
December 31
December 31
Notes
2021
2020
2021
2020
Cash flows to operating activities
Net profit
Recovery of non-monetary costs (income):
Depreciation and amortization
4,5,7
Interest expense
22
Interest income
22
(40 )
(53 )
(40 )
(50 )
Gain (loss) on disposal and write offs of non-current
assets
(34 )
(23 )
Impairment of inventories
8
Impairment (reversal) of accounts receivable
(1 )
(1 )
Change in accrued charges
Income tax expense for the period
17
Decrease (increase) in deferred tax asset
17
(18 )
(13 )
Changes in working capital:
(Increase) decrease in inventories
(925 )
(896 )
(Increase) decrease in trade receivables
(112 )
(112 )
(Increase) decrease in other receivables
(30 )
(55 )
(Increase) decrease in prepayments
(537 )
(29 )
(543 )
(27 )
(Decrease) increase in trade payables
(166 )
(873 )
(244 )
(825 )
Increase (decrease) in contractual obligations
(42 )
(11 )
(42 )
(11 )
(Decrease) increase income tax payables
(89 )
(39 )
(72 )
(30 )
Increase (decrease) in other payables and current
liabilities
(81 )
(14 )
Net cash flows from operating activities
(294 )
(404 )
Cash flows from (to) investing activities
Acquisition of intangible assets (except investment)
4,5,7
(61 )
(47 )
(56 )
(42 )
Transfer of intangible assets (except investment)
Net cash flows (to) investing activities
(61 )
(56 )
Cash flows from (to) financing activities
Loans received
15
Loans granted
15
(383 )
(177 )
(383 )
(177 )
Paid interest
(56 )
(23 )
(56 )
(23 )
Financial lease payments
(100 )
(98 )
(41 )
(39 )
Own shares transfers
(184 )
(184 )
Net cash flows from (to) financial activities
(382 )
(323 )
Net increase (decrease) in cash and cash equivalent
(737 )
(783 )
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year
The accompanying explanatory notes are an integral part of these consolidated and Company‘s financial statements.
Linas, AB, company code 147689083, S. Kerbedžio g 23, Panevėžys
Consolidated and company‘s financial statements
For the year ended December 31, 2021 (All amounts in EUR thousands unless otherwise stated)
9
FINANCIALS STATEMENTS EXPLANATORY NOTES
1. General information
A public company AB Linas (hereinafter – the Company) was registered on 8 March 1993, registration No. 003429,
company code – 147689083, data accumulated and stored at the Register of Legal Entities. The company is a limited
office@linas.lt; internet website: www.linas.lt . The Company started its operations in 1957.
As of 31 December 2021, AB Linas Company Group (hereinafter – the Group) consisted of the parent company AB Linas,
and its subsidiary UAB Lino apdaila.
UAB Lino apdaila was registered in the Register of Legal Entities on 23 May 2008, registration No. 114552, company
code 301733421. The registered office of the Subsidiary is located at S. Kerbedžio St. 23, Panevėžys. AB Linas owns 100
% of the shares of the Subsidiary.
Shares of AB Linas are listed in the Baltic Secondary Trading List of AB NASDAQ OMX Vilnius.
December 31, 2020 and 2021 the shareholders of the Company were:
December 31, 2021
December 31, 2020
Number of
shares
(thousand)
Share of share
capital
(percent)
Number of
shares
(thousand)
Share of
share capital
(percent)
Asociacija EEEE
5,565
23.15
5,565
23.15
UAB "Verslo dizainas"
4,808
20
-
-
UAB "Vasana"
4,755
19.78
9,563
39.78
UAB 'Rivena"
2,423
10.08
2,423
10.08
Other shareholders
6,488
26.99
6,488
26.99
24,039
100
24,039
100
The Company's authorized capital was worth EUR 6,971,307.10; the capital was divided into 24,038,990 registered
ordinary shares, each being of EUR 0.29 in value. The Company does not have any issued and yet unpaid shares. There
were no changes in the authorized capital of the Company during the reporting period.
At December 31, 2021 the company had acquired 450 thousand. pcs. shares of the Company (1,836 thousand at 31
December 2020), which makes up 1.87% of the ownership share.
Neither the Company, nor the Subsidiary has any branches or representative offices.
At December 31, 2021 the number of employees in the Group was 120 (113 as of 31 December 2020).
The principal activity of a public company Linas is trade in linen products and provision of related services ; another area of
activity of the Company is management of financial assets (shares and granted loans), supply of heat energy, rent of
property, accounting and administration services. The activities carried out by UAB Lino apdaila – provision of textile
production services, i.e., sewing of textile articles.
The Group of companies provides services from the preparation of yarn for weaving to the delivery of the final product to
the buyer.
Linas, AB, company code 147689083, S. Kerbedžio g 23, Panevėžys
Consolidated and company‘s financial statements
For the year ended December 31, 2021 (All amounts in EUR thousands unless otherwise stated)
10
The uniqueness of the group of companies is that the produced linen products are natural, ecological and long-lasting.
Individual orders are requested to meet the needs of customers who want exclusivity.
The main incomes of Group of companies of 12 months of year 2020 were received from textile items sales activities and
the services of textile items production.
During the 12 months of year 2020 the Group ordered to produce or to treat technologically: linen and tow yarns – 59 tons
(12 months of year 2019 – 68 tons); raw fabrics – 623 thousand meters (12 months of year 2019 – 761 thousand meters);
ready-made fabrics – 1,939 thousand meters (12 months of year 2019 – 1,931 thousand meters), 23 % of all produced
fabrics were used for sewn items during 12 months of year 2020 (12 months of year 2019 – 20.4 %).
During 12 months of year 2020 the Group produced 937 thousand pcs sewn items (during 12 months of year 2019 – 823
thousand pcs), using 449 thousand meters of ready-made fabrics (during 12 months of year 2019 – 445 thousand meters).
The volume of exports during 12 months of 2020 was 74.83 % of the total product sales.
Linas AB group of companies sold linen textile goods and services for 16,746 thousand Eur during the 12 months of 2021.
Comparing to the 12 months of 2020 the volume of sales increased by 2,739 thousand Eur or about 16,36 %.
During twelve months of 2021 the Group received 1,244 thousand Eur profit before taxation, the result of the same period
of 2020 was 610 thousand Eur profit.
During twelve month of year 2021 the Group’s operating results compared to 2020 during the same period was due to
increased volumes of sales.
Due to the threat of Covid-19 spread, the Group's business continuity and preventive measures have been reviewed and
implemented, and the impact of related factors on the Group's operations and results is regularly assessed.
The Company's management assessed the potential disruption of cash flows, funding sources, the impact on demand for
goods and services, the risk of contamination of critical personnel and the risk of delays in ongoing projects by analyzing
all information about Covid-19's future risks available at the time of these condensed interim financial statements. there are
no significant circumstances that may cast doubt on the Group's going concern.
The Company's management approved these financial statements for 2022. March 21 The Company's shareholders have
the statutory right to approve or not to approve these financial statements and to require management to prepare new
financial statements.
2. Accounting principles
2.1. Basis of preparation of the financial statements
The Group manages accounting and prepares financial statements in accordance with International Financial
Reporting Standards (IFRS) adopted in the European Union (EU), The Company's management approved these
financial statements for 2022. March 21. The Company's shareholders have the statutory right to approve or not to
approve these financial statements and to require management to prepare new financial statements.
Adoption of new and/or changed interpretations of IFRS and International Financial Reporting Interpretations Committee
(IFRIC).
The Group and the Company have applied these IFRSs, their amendments and IFRIC for the first time in the year ended 31
December 2021:
Amendments to IFRS 16 Leases: COVID-19 Related Rent Concessions beyond 30 June 2021 (Amendments) (issued
on 31 March 2021, effective from 1 April 2021)
Linas, AB, company code 147689083, S. Kerbedžio g 23, Panevėžys
Consolidated and company‘s financial statements
For the year ended December 31, 2021 (All amounts in EUR thousands unless otherwise stated)
11
These amendments extend the scope of the 2020 amendments by increasing the period of eligibility to apply the practical
expedient from 30 June 2021 to 30 June 2022.
On 28 May 2020, the Board issued COVID-19-Related Rent Concessions, which amended IFRS 16 Leases. The 2020
amendments permit lessees, as a practical expedient, not to assess whether rent concessions occurring as a direct
consequence of the COVID-19 pandemic are lease modifications and, instead, to account for those rent concessions as if
they were not lease modifications. Among other conditions, the 2020 amendments permit a lessee to apply the practical
expedient only to rent concessions for which any reduction in lease payments affects only payments originally due on or
before 30 June 2021. If a rent concession reduces lease payments both before and after 30 June 2021, IFRS 16 does not
permit the practical expedient to be applied to that concession.
The amendments are effective in European Union for annual reporting periods beginning on or after 1 April 2021. The
management of the Group ant the Company has assessed that these amendments have no significant impact on these
financial statements as no significant concessions/discounts have been received during the reporting period and are not
expected to be received in subsequent periods.
Interest Rate Benchmark Reform – Phase 2 – IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 (Amendments) (issued
on 27 August 2020, effective from 1 January 2021).
These amendments provide temporary reliefs which address the financial reporting effects when an interbank offered rate
(IBOR) is replaced with an alternative nearly risk-free interest rate (RFR).
The amendments include the following practical expedients:
• A practical expedient to require contractual changes, or changes to cash flows that are directly required by the
reform, to be treated as changes to a floating interest rate, equivalent to a movement in a market rate of interest
• Permit changes required by IBOR reform to be made to hedge designations and hedge documentation without the
hedging relationship being discontinued
• Provide temporary relief to entities from having to meet the separately identifiable requirement when an RFR
instrument is designated as a hedge of a risk component.
The amendments are effective in European Union for annual periods beginning on or after 1 January 2021. The
management of the Group ant the Company has assessed that these amendments have no significant impact on these
financial statements.
Amendments to IFRS 9, IAS 39 and IFRS 7: Interest Rate Benchmark Reform (published on 27 August 2020,
effective from 1 January 2021 and must be applied retrospectively).
Amendments to IFRS 9, IAS 39 and IFRS 7 will conclude phase two focused on issues that could affect financial reporting
when an existing interest rate benchmark is replaced with a risk-free interest rate (an RFR). These amendments will not
have an impact on the Group and the Company financial statements.
Standards and amendments that have been approved but are not yet effective and have not been applied in advance
New standards, amendments and interpretations that are not mandatory for reporting period beginning on 1 January 2021
and have not been early adopted when preparing these financial statements are presented below: IFRS 3 Business
Combinations; IAS 16 Property, Plant and Equipment; IAS 37 Provisions, Contingent Liabilities and Contingent Assets as
well as Annual Improvements 2018-2020 (Amendments) (All issued 14 May 2020, effective from 1 January 2022)
The IASB has issued narrow-scope amendments to the IFRS Standards as follows:
• IFRS 3 Business Combinations (Amendments) update a reference in IFRS 3 to the Conceptual Framework for
Financial Reporting without changing the accounting requirements for business combinations.
Linas, AB, company code 147689083, S. Kerbedžio g 23, Panevėžys
Consolidated and company‘s financial statements
For the year ended December 31, 2021 (All amounts in EUR thousands unless otherwise stated)
12
• IAS 16 Property, Plant and Equipment (Amendments) prohibit a company from deducting from the cost of
property, plant and equipment amounts received from selling items produced while the company is preparing the
asset for its intended use. Instead, a company will recognize such sales proceeds and related cost in profit or loss
of SPLOCI.
• IAS 37 Provisions, Contingent Liabilities and Contingent Assets (Amendments) specify which costs a company
includes in determining the cost of fulfilling a contract for the purpose of assessing whether a contract is onerous.
• Annual Improvements 2018-2020 make minor amendments to IFRS 1 First-time Adoption of International
Financial Reporting Standards, IFRS 9 Financial Instruments, IAS 41 Agriculture and the Illustrative Examples
accompanying IFRS 16 Leases.
The amendments are effective in European Union for annual reporting periods beginning on or after 1 January 2022 with
earlier application permitted. The management of the Group and the Company is currently assessing the impact of these
amendments on the financial statements.
IFRS 17: Insurance Contracts (published 18 May 2017, effective from 1 January 2023, but not before approval by
the EU)
The amendments to IFRS 17 are effective, retrospectively, for annual periods beginning on or after 1 January 2023, with
earlier application permitted. The amendments aim at helping companies implement the Standard. In particular, the
amendments are designed to reduce costs by simplifying some requirements in the Standard, make financial performance
easier to explain and ease transition by deferring the effective date of the Standard to 2023 and by providing additional
relief to reduce the effort required when applying IFRS 17 for the first time. The amendments to IFRS 4 change the fixed
expiry date for the temporary exemption in IFRS 4 Insurance Contracts from applying IFRS 9 Financial Instruments, so
that entities would be required to apply IFRS 9 for annual periods beginning on or after 1 January 2023.
The management has assessed that these amendments will not have any impact on the Group and the Company’s financial
statements.
Amendments to IAS 12 Income Taxes: Deferred Tax related to Assets and Liabilities arising from a Single
Transaction (issued on 7 May 2021, effective from 1 January 2023, but not before approval by the EU).
The amendments introduce a new definition of accounting estimates, defined as monetary amounts in financial statements
that are subject to measurement uncertainty. Also, the amendments clarify what changes in accounting estimates are and
how these differ from changes in accounting policies and corrections of errors. The amendments become effective for
annual reporting periods beginning on or after January 1, 2023 with earlier application permitted and apply to changes in
accounting policies and changes in accounting estimates that occur on or after the start of that period. The Amendments
have not yet been endorsed by the EU. The Group and the Company has not yet evaluated the impact of the
implementation of these amendments.
Amendments to IAS 1: Classification of Liabilities as Current or Non-current and Classification of Liabilities as
Current or Non-current (issued on 23 January 2020 and 15 July 2020 respectively, effective from 1 January 2023,
but not before approval by the EU).
the amendments aim to promote consistency in applying the requirements by helping companies determine whether, in the
statement of financial position debt and other liabilities with an uncertain settlement date should be classified as current or
non-current. The amendments affect the presentation of liabilities in the statement of financial position and do not change
existing requirements around measurement or timing of recognition of any asset, liability, income or expenses, nor the
information that entities disclose about those items. Also, the amendments clarify the classification requirements for debt
which may be settled by the company issuing own equity instruments.
Linas, AB, company code 147689083, S. Kerbedžio g 23, Panevėžys
Consolidated and company‘s financial statements
For the year ended December 31, 2021 (All amounts in EUR thousands unless otherwise stated)
13
The Group and the Company is currently assessing the impact of this amendment on their financial statements.
Amendments to IAS 1 Presentation of Financial Statements and IFRS Practice Statement 2: Disclosure of
Accounting policies (issued on 12 February 2021, effective from 1 January 2023, but not before approval by the
EU).
The Amendments are effective for annual periods beginning on or after January 1, 2023 with earlier application permitted.
The amendments provide guidance on the application of materiality judgements to accounting policy disclosures. In
particular, the amendments to IAS 1 replace the requirement to disclose ‘significant’ accounting policies with a
requirement to disclose ‘material’ accounting policies. Also, guidance and illustrative examples are added in the Practice
Statement to assist in the application of the materiality concept when making judgements about accounting policy
disclosures. The Amendments have not yet been endorsed by the EU. The Group and the Company has not yet evaluated
the impact of the implementation of these amendments
2.2. Correction of Errors
Standards effective from January 1, 2019 application.
The Group and the Company have applied IFRS 16 “Leases” from January 1, 2019, retrospectively, due to a calculation
error in adjusting the comparative information (Notes 2.17, 7) in the financial statements for the year ended 31 December
2020. The following information is provided about the specific items of the Group's and the Company's revised statements
of financial position and comprehensive income.
STATEMENTS OF
FINANCIALS POSITION
The Group
Until clarification
Clarification
After clarification
Notes
December 31,
2020
December 31,
2020
December 31,
2020
Right-of-Use assets
7
-
366
366
Retained earnings
1,586
(8)
1,578
Obligations under finance
lease
-
277
277
Obligations under finance
lease current year part
-
97
97
STATEMENTS OF
COMPREHENSIVE
INCOME
The Group
Until clarification
Clarification
After clarification
Notes
December 31,
2020
December 31,
2020
December 31,
2020
Operating and selling
expenses
(1,907)
8
(1,899)
Financial expenses
(42)
(11)
(53)
Linas, AB, company code 147689083, S. Kerbedžio g 23, Panevėžys
Consolidated and company‘s financial statements
For the year ended December 31, 2021 (All amounts in EUR thousands unless otherwise stated)
14
STATEMENTS OF
FINANCIALS POSITION
The Company
Until clarification
Clarification
After
clarification
Notes
December 31,
2020
December 31,
2020
December 31,
2020
Right-of-Use assets
-
253
253
Retained earnings
1,498
(7)
1,491
Obligations under finance
lease
-
222
222
Obligations under finance
lease current year part
-
38
38
STATEMENTS OF
COMPREHENSIVE
INCOME
The Company
Until clarification
Clarification
After
clarification
Notes
December 31,
2020
December 31,
2020
December 31,
2020
Operating and selling
expenses
(1,632)
6
(1626)
Financial expenses
(42)
(8)
(50)
2.3. Functional and financial statements currency
The amounts in these financial statements are presented in euros. Rounded to thousands unless otherwise specified. The
Group and the Company maintain their accounting records and in these financial statements all amounts are accounted for
and presented in the national currency of the Republic of Lithuania, the euro, which is also the functional currency of the
Group and the Company.
2.4. Business continuity
In preparing the consolidated financial statements of the Group and the Company, management has assessed business
continuity assumptions. Management believes that no events or conditions, including those related to the current COVID-
19 pandemic and the war in Ukraine, cast doubt on the Group's ability to continue as a going concern. This conclusion is
based on our knowledge of the Group and the Company, its expected economic prospects and the risks and uncertainties
surrounding them. In addition, this conclusion is based on a review of expected changes in liquidity and capital, existing
credit facilities, including contractual and expected terms and conditions. It was therefore concluded that the application of
the going concern basis as a key assumption in the financial statements is justified.
2.5. Principles of consolidation
The consolidated financial statements include the Company and its subsidiaries. The financial statements of the Group
companies have been prepared for the same date and using the same accounting policies.
A subsidiary is an entity that is controlled, directly or indirectly, by the Company. Control of a subsidiary arises when the
Company has, or is entitled to receive, variable returns arising from those relationships and may affect the amount of
variable returns due to its power to govern the investee.
Linas, AB, company code 147689083, S. Kerbedžio g 23, Panevėžys
Consolidated and company‘s financial statements
For the year ended December 31, 2021 (All amounts in EUR thousands unless otherwise stated)
15
Subsidiaries are consolidated from the date on which control is transferred to the Group and are no longer consolidated
from the date that control ceases. All intercompany transactions, balances and unrealized gains and losses on transactions
between Group companies have been eliminated.
In the separate financial statements of the parent, investments in subsidiaries are accounted for using the cost method. The
value of an investment is reduced through the recognition of an impairment loss. Such impairment is assessed and applied
on a case-by-case basis.
Business combinations are accounted for using the acquisition method. The cost of an acquisition is determined by adding
together the fair value of the consideration transferred at the acquisition date and the amount of any minority interest in the
acquiree, if any. The contingent portion of the consideration that the buyer will have to pay is recognized at fair value at
the acquisition date. Subsequent measurement of contingent consideration that is treated as an asset or liability at fair value
will be recognized in accordance with IFRS 9: through profit or loss. If the contingent consideration is classified as equity,
it is not remeasured and its subsequent payment is recognized in equity. For each business acquisition, the acquirer
measures the minority interest in the acquiree either at fair value or in proportion to the acquiree's identifiable net assets.
Acquisition costs incurred are written off to include administrative expenses. Acquisition costs are capitalized in the
separate financial statements of the Group's components.
If the business combination is achieved in stages, the acquirer 's interest in the acquiree is measured at fair value through
profit or loss at the acquisition date.
Goodwill is recognized at cost and is the amount by which the total consideration transferred, including the amount of the
minority interest recognized, exceeds the net amount of the assets acquired and liabilities measured. If this consideration is
less than the fair value of the net assets of the subsidiary acquired, the difference is recognized in the statement of
comprehensive income.
After initial recognition, goodwill is carried at cost less any accumulated impairment losses. For the purpose of measuring
impairment, goodwill acquired in a business combination from the acquisition date is allocated to those Group cash-
generating units that are expected to benefit from the merger, regardless of whether other assets or liabilities of the
acquiree are allocated to those units.
When goodwill forms part of a revenue-generating unit and part of the operations of that unit are sold, goodwill relating to
the operation sold is included in the carrying amount of the disposal operation in determining the gain or loss on disposal
of the operation. In this case, the goodwill sold is measured by reference to the relative value of the business sold to the
remainder of the revenue-generating unit.
2.6. Investments in associates
An associate is an entity over which the Group has the power to exercise significant influence. The Group accounts for its
interest in an associate using the equity method. The financial statements of associates are prepared for the same reporting
year as the Group, using the same accounting policies. Any differences in accounting policies are adjusted.
Investments in associates are assessed for impairment whenever events or changes in circumstances indicate that the
carrying amount may not be recoverable.
Unrealized gains and losses arising from transactions between the Group and its associates are eliminated to the extent of
the associate's interest in the associate. The Group does not currently have any associates.
Investments in associates are accounted for in the Company's separate financial statements using the cost method, less
impairment.
Linas, AB, company code 147689083, S. Kerbedžio g 23, Panevėžys
Consolidated and company‘s financial statements
For the year ended December 31, 2021 (All amounts in EUR thousands unless otherwise stated)
16
2.7. Intangible assets
Intangible assets acquired separately are initially recognized at cost. The cost of an intangible asset acquired in a business
combination is measured at fair value at the acquisition date. Intangible assets are recognized when it is probable that
future economic benefits associated with the asset will flow to the Group and the Company and the value of the asset can
be measured reliably.
The useful lives of intangible assets may be finite or indefinite.
After initial recognition, intangible assets that have a finite useful life are carried at cost less any accumulated amortization
and any accumulated impairment losses. Intangible assets are amortized on a straight-line basis over their estimated useful
lives. Gains or losses on derecognition of intangible assets are recognized as the difference between the net disposal
proceeds and the carrying amount of the asset and are recognized in profit or loss when the asset is derecognized.
An intangible asset that has a finite useful life is assessed for impairment whenever events or changes in circumstances
indicate that the asset may be impaired.
The useful lives, residual values and amortization method are reviewed annually to ensure that they are consistent with the
expected pattern of use of the intangible assets other than goodwill.
Intangible assets that have an indefinite useful life are not amortized, but are reviewed annually for impairment, either
individually or at the cash-generating unit level. Each year there is an evaluation of an indefinite useful life with the
objective of determining whether the asset can be used indefinitely. If not, such intangible assets are reclassified
prospectively from indefinite time of use.
Software
The cost of acquiring new software is capitalized and recognized as an intangible asset if it is not part of the hardware. The
software is depreciated over a period of 3 to 4 years.
Expenses incurred in restoring or maintaining the expected economic benefits that the Group expects to derive from the
operation of existing software systems are recognized as an expense in the period in which they are incurred.
2.8. Non-current tangible assets
Non-current tangible assets are stated at cost less accumulated depreciation and impairment losses.
The initial cost of non-current tangible assets comprises its purchase price, including non-refundable purchase taxes and all
directly attributable costs of bringing the asset to its working condition and location for its intended use. Expenditure, such
as repairs and maintenance, incurred after an item of non-current tangible assets is ready for its intended use is usually
recognized in the statement of comprehensive income in the period in which it is incurred.
Depreciation is calculated on a straight-line basis over the following time of use:
• Property – 15 years;
• Equipment – 5 years;
• Vehicles - 4–10 years;
• Other non-current tangible assets - 3-8 years.
The time of use, residual values and depreciation method are reviewed periodically to ensure that they are consistent with
the expected pattern of use of the property, plant and equipment.
When events or changes in circumstances indicate that the carrying amount of an item of property, plant and equipment
may not be recoverable, it is reviewed for impairment.
Non-current tangible assets are derecognized upon disposal or when no future economic benefits are expected from its use
or disposal.
Linas, AB, company code 147689083, S. Kerbedžio g 23, Panevėžys
Consolidated and company‘s financial statements
For the year ended December 31, 2021 (All amounts in EUR thousands unless otherwise stated)
17
Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and
the carrying amount of the asset) is included in the statement of comprehensive income in the year in which the asset is
derecognized.
Construction in progress is stated at cost. It comprises the value of construction, plant and equipment and other directly
attributable costs. Depreciation on construction in progress is not calculated until construction is complete and the asset is
ready for its intended use.
2.9. Investment property
Land leased to third parties is considered an investment property. The Group's and the Company's investment property
consists of land that is held for capital appreciation. Investment property is stated at cost less accumulated depreciation
and any accumulated impairment losses.
The initial cost of an investment property comprises its purchase price, including non-refundable purchase taxes and all
directly attributable costs of bringing the asset to its working condition and location for its intended use. Costs, such as
repairs and maintenance, incurred after an investment property is ready for its intended use are usually recognized in the
statement of comprehensive income in the period in which they are incurred.
Depreciation of assets other than land is calculated using the straight-line method to write off such assets to their residual
values.
Investment property is derecognized upon disposal or when no future economic benefits are expected from its use or
disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal
proceeds and the carrying amount of the asset) is included in the statement of comprehensive income in the year in which
the asset is derecognized.
Transfers to and from investment property are made when, and only when, there is a significant change in the purpose of
the property.
2.10. Financial assets (excluding derivatives classified as hedging instruments)
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity
instrument of another entity.
Initial recognition and measurement of financial assets
Financial assets are initially recognized at amortized cost, at fair value through other comprehensive income, or at fair
value through profit or loss.
The classification of a financial asset at initial recognition depends on the contractual cash flow characteristics of the
financial asset and the Group's business model governing the management of the financial asset. Except for trade
receivables that do not have a significant financing component, the Group measures financial assets at fair value on initial
recognition, plus transaction costs where the financial assets are not carried at fair value through profit or loss.
Trade receivables that do not include a significant financing component are measured at the transaction price in accordance
with IFRS 15.
For a financial asset to be classified and measured at amortized cost or fair value through other comprehensive income, the
cash flows arising from the financial asset need only be the principal and interest payments (IORPs) on the principal
outstanding. This assessment is called the SPPI test and is performed for each financial instrument.
The Group's financial asset management model specifies how the Group manages its financial assets to generate cash
flows. The business model determines whether the cash flows will be generated by collecting the contractual cash flows,
selling the financial asset, or both.
Linas, AB, company code 147689083, S. Kerbedžio g 23, Panevėžys
Consolidated and company‘s financial statements
For the year ended December 31, 2021 (All amounts in EUR thousands unless otherwise stated)
18
Ordinary purchases or sales of financial assets are recognized on the trade date, i.e., y. the date on which the Group
commits to purchase or sell the financial asset.
Subsequent measurement of financial assets
After initial recognition The Group measures financial assets:
• Amortized cost (debt instruments);
• At fair value through other comprehensive income, when the gain or loss accumulated on derecognition is
transferred to profit or loss (debt instruments). 2021 The Group did not have such financial instruments.
• At fair value through other comprehensive income, when the gain or loss accumulated on derecognition is not
transferred to profit or loss (equity instruments). 2021 The group did not have such facilities.
• At fair value through profit or loss.
Financial assets (debt financial instruments) measured at amortized cost.
The Group measures financial assets at amortized cost if both of the following conditions are met:
• financial assets are held in accordance with the business model, the purpose of which is to hold financial assets in
order to collect contractual cash flows; and
• The contractual terms of a financial asset may give rise to cash flows at specified dates that are only interest
payments on the principal and the principal amount outstanding.
Financial assets measured at amortized cost are subsequently measured using the effective interest method, less any
impairment losses. Gains or losses are recognized in the statement of comprehensive income when the assets are
derecognized, replaced or impaired.
The Group's financial assets at amortized cost include trade receivables, other current and non-current receivables and
loans.
Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss include financial assets held for trading, financial assets that were
initially recognized at fair value through profit or loss or financial assets that are required to be measured at fair value. A
financial asset is classified as held for trading if it is acquired for the purpose of selling or repurchasing in the near future.
Derivatives, including segregated embedded derivatives, are also classified as held for trading.
unless they are classified as effective hedging instruments. Financial assets related to cash flows other than principal and
interest payments are classified and measured at fair value through profit or loss, regardless of business model.
Notwithstanding the above criteria for designating debt instruments at amortized cost or fair value through other
comprehensive income, debt instruments may be designated at fair value through profit or loss on initial recognition if this
eliminates or significantly reduces accounting inconsistencies. . Financial assets at fair value through profit or loss are
carried at fair value through profit or loss.
This category also includes derivatives and leased debt securities that the Group has not elected to classify as at fair value
through other comprehensive income. Dividends on leased debt securities are recognized
as other income in the statement of comprehensive income when the right is established.
Impairment of financial assets
Other disclosures about impairment of financial assets are also made in the following notes:
• Disclosures about significant estimates and assumptions about use are disclosed in Note 2.29
• Trade receivables, including assets arising from contracts with customers, are disclosed in Note 10.
Linas, AB, company code 147689083, S. Kerbedžio g 23, Panevėžys
Consolidated and company‘s financial statements
For the year ended December 31, 2021 (All amounts in EUR thousands unless otherwise stated)
19
The Group recognizes expected credit losses (ECLs) on all debt financial instruments that are not measured at fair value
through profit or loss. The ECL is based on the difference between the contractual cash flows receivable and the cash flows
the Group expects to receive, discounted at the approximate initial effective interest rate. ECLs are recognized in two
stages. For credit exposures for which the credit risk has not increased significantly since initial recognition, the ECL shall
be calculated for credit losses arising from default events that may occur over the next 12 months (12 - month ECL). For
those credit exposures for which the credit risk has been significantly increased since initial recognition, an impairment
loss is recognized for the amount of credit loss that is expected over the remaining life of the credit exposure, irrespective
of the default period (ECL over the life of the exposure).
The Group uses a simplified method to calculate ECL for trade receivables and assets arising from contracts with
customers. Therefore, the Group does not monitor for changes in credit risk, but recognizes an impairment loss at each
reporting date based on the ECL over the period of validity. The Group has constructed a matrix of expected loss rates
based on historical credit loss analysis and adjusted to reflect future factors specific to borrowers and the economic
environment. Trade receivables were grouped by recovery date after eliminating the largest individual receivables, which
are analyzed separately.
The Group considers that a debtor has defaulted on its obligations in respect of a financial asset if the contractual payments
are more than 90 days overdue or if there are indications that the debtor or group of debtors is in serious financial
difficulty, default (principal or interest). the likelihood that they will enter bankruptcy or reorganization proceedings and,
where observable data indicate that future cash flows are expected to decline, such as changes in arrears or changes in
economic conditions that correlate with default. Financial assets are written off when there is no reasonable expectation of
recovering the contractual cash flows.
Expected credit losses for 12 months are assessed and accounted for in the assessment of impairment. In subsequent
periods, in the absence of a significant increase in credit risk related to the borrower, the Group adjusts the 12-month
expected credit loss balance based on the outstanding loan amount at the measurement date. If it is determined that the
borrower's financial condition has significantly deteriorated compared to the situation at the time the loan was granted, the
Company accounts for all expected credit losses over the life of the loan. Loans that are subject to expected credit losses
over their estimated useful lives are classified as impaired financial assets. According to the management's assessment,
ECL 2021 31 December are immaterial to these financial statements.
The maximum exposure to credit risk at the reporting date is the carrying amount of each category of financial asset as
disclosed in Note 15.
2.11. Derecognition of financial assets and liabilities
Financial property
A financial asset (where appropriate, part of a financial asset or part of a group of similar financial assets) is derecognized
when:
• the right to receive cash flows from the financial asset expires;
• The Group retains the right to receive cash flows but assumes the obligation to pay the full amount to a third party
under a transfer agreement within a short period of time; and
• The Group transfers its right to receive cash flows from the asset and / or
a) transfers substantially all the risks and rewards incidental to ownership of the financial asset; or
b) neither transfers nor retains the risks and rewards of ownership of the financial asset but transfers control of
that asset.
Linas, AB, company code 147689083, S. Kerbedžio g 23, Panevėžys
Consolidated and company‘s financial statements
For the year ended December 31, 2021 (All amounts in EUR thousands unless otherwise stated)
20
When the Group transfers rights to the cash flows of an asset but does not transfer or retain the risks and rewards of
ownership of the asset and does not transfer control of the asset, the asset is recognized to the extent that the Group is still
involved. A link to an asset that has been transferred as security is carried at the lower of the carrying amount of the asset
and the maximum amount of consideration that the Group could be required to pay.
Financial liabilities
A financial liability is derecognized when the obligation under the liability is discharged or canceled or expires. When one
existing financial liability is replaced by another liability to the same lender but on different terms, or when the terms of an
existing liability change substantially, the change is treated as a termination of the original liability and the creation of a
new liability. The difference between the respective carrying amounts is recognized in the statement of comprehensive
income.
2.12. Inventory
Inventories are stated at the lower of cost and net realizable value, less any allowance for obsolete and slow-moving
inventories. Net realizable value is the selling price in the ordinary course of business, less the costs of completion and
distribution.
The cost of inventories is calculated using the FIFO method. Cost of finished goods and work in progress
consists of an appropriate allocation of variable and fixed overheads based on normal operating practices. Inventories that
are no longer available for sale are written off.
2.13. Cash and cash equivalents
Cash consists of cash on hand and in bank accounts. Cash equivalents are short-term, highly liquid investments that are
readily convertible to known amounts of cash. The term of such investments does not exceed three months and the risk of
changes in value is very small.
In the statement of cash flows, cash and cash equivalents comprise cash on hand and in bank current accounts and deposits
with original maturities of three months or less.
Restricted cash held as a deposit for trading on a futures exchange is accounted for as other current financial assets.
2.14. Non-current assets held for sale
Non-current assets held for sale are stated at the lower of carrying amount and fair value less costs to sell. Non-current
assets are classified as held for sale if it is highly probable that the carrying amount of the asset will be recovered
principally through a sale transaction rather than through continuing use. The condition is met when the sale of the asset is
highly probable and the asset is in a condition for immediate sale. Management must be willing to sell and the sale must
take place within one year of the reclassification date.
Property, plant and equipment and intangible assets classified as held for sale are not depreciated / amortized.
2.15. Financial liabilities
Initial recognition and measurement of financial liabilities
Financial liabilities are initially recognized at fair value through profit or loss, borrowings and payables. All financial
liabilities are initially recognized at fair value and, in the case of borrowings and payables, less directly attributable
transaction costs.
The Group's and the Company's financial liabilities include trade and other payables, borrowings, including bank
overdrafts and finance lease liabilities.
Linas, AB, company code 147689083, S. Kerbedžio g 23, Panevėžys
Consolidated and company‘s financial statements
For the year ended December 31, 2021 (All amounts in EUR thousands unless otherwise stated)
21
Subsequent evaluation
The measurement of financial liabilities depends on their classification as described below: Financial liabilities are
recognized at fair value through profit or loss.
Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities
that were initially recognized at fair value through profit or loss.
Financial liabilities are classified as held for trading if they are incurred in the near term for repurchase purposes.
Gains or losses arising from financial liabilities held for trading are recognized in the statement of comprehensive income.
2.16. Loans and other receivables received
Subsequent to initial recognition, loans and other payables are carried at amortized cost using the effective interest method
(EIR). Gains and losses are recognized in the statement of comprehensive income when the liabilities are derecognized or
amortized.
Amortized cost is calculated by taking into account the discount or premium on acquisition, as well as taxes or expenses
that are an integral part of the EIO. Depreciation of an EIO is included in finance costs in the statement of comprehensive
income.
2.17. Lease assets and lease liabilities
The Group determines whether the arrangement is a lease or includes a lease, depending on the nature of the transaction at
the date of the arrangement, when performance of the arrangement depends on the use of the specific asset or the
arrangement gives the right to use the asset.
Adoption of IFRS 16 from January 1, 2019.
IFRS 16 replaces IAS 17 Leases, IFRIC 4 Testing whether an Agreement is a Lease, and SIC-15 Operating Leases.
Promotion ”and SIC-27 Evaluating the substance of transactions in legal leases. The standard establishes principles for
recognizing, measuring, presenting and disclosing leases and requires lessees to recognize most leases in the balance sheet.
The Group and the Company apply the same recognition and measurement method to all leases, except for short-term
leases and leases of low value assets. The Group and the Company recognize lease obligations to pay lease payments and
assets under usable rights, which means the right to use non-current assets.
Leased assets
Initial recognition of rights - of - use assets
Initially, the Group and the Company measure an asset held for use at cost, which comprises: the amount equal to the lease
liability at initial recognition, the lease payments paid at or before the inception of the lease (less any lease discounts
received), and all initial direct costs incurred by the Group; The Group's and the Company's estimated costs to be incurred
in dismantling, removing or relocating an item of property, plant and equipment as required by the terms of a lease, unless
such costs are incurred in producing the inventories. The Group and the Company undertake to cover these costs on the
inception date of the lease or because they have used the leased asset for a period of time. The Group and the Company
recognize these costs as part of the cost of rights-of-use assets, with the Group and the Company committing to cover these
costs.
Subsequent measurement of rights - of - use assets
Subsequent measurement of rights - of - use assets
Linas, AB, company code 147689083, S. Kerbedžio g 23, Panevėžys
Consolidated and company‘s financial statements
For the year ended December 31, 2021 (All amounts in EUR thousands unless otherwise stated)
22
Subsequent to initial recognition, the Group and the Company measure the assets held for use at cost. In measuring assets
held for use using the cost method, the Group and the Company measure assets subject to usage at cost less depreciation
and any accumulated impairment losses, adjusted for the revalued amount of the lease liability.
Depreciation of assets under a right of use in accordance with IAS 16 Property, Plant and Equipment. If the lease
agreement provides that the right to the leased asset is transferred to the Group and the Company at the end of the lease
term, or the cost of the asset reflects the purchase option, the Group and the Company calculate depreciation from the
inception of the lease to its useful life. Otherwise, the lessee depreciates the leased asset from the inception of the lease and
ends before the end of the useful life of the leased asset or the lease:
• Land from 65 to 79 years;
• Premises from 2 to 10 years;
• Machinery and equipment from 2 to 4 years;
• Vehicles from 2 years.
Lease obligations
Initial measurement of the lease liability
On the commencement date, the Group and the Company measure lease liabilities at the present value of the lease
payments outstanding at that date.
Rents are discounted using a rental rate that is readily applicable. If it is not possible to determine the exact rental interest
rate, the Group and the Company apply the accrued credit interest rate. Leases included in the measurement of a lease
liability at inception include the following payments for the right to use the leased asset during the lease term that were not
paid at inception: fixed payments less any lease incentives receivable; variable rents that depend on an index or rate are
initially calculated using the index or rate on the start date; the amounts that the lessee would have to pay under the
residual value guarantees; the exercise price of the call option, if the Group and the Company are reasonably certain that it
will exercise the option; payment of penalties for termination of the lease, if the lease term reflects the possibility for the
Group and the Company to terminate the lease. Variable rents that depend on an index or rate are, for example, payments
related to a consumer price index, payments related to a reference interest rate (such as LIBOR), or payments that vary
according to changes in market rental rates.
Subsequent measurement of the lease liability
After the commencement date, the lessee measures the lease liability by increasing it carrying amount to reflect interest on
the lease liability; reducing the carrying amount to reflect rents; and reassessing the carrying amount to reflect any
revaluations or changes in leases or to reflect adjusted substantially fixed rents.
Interest on a lease for each lease term is the amount that gives rise to a constant periodic rate of interest on the remaining
balance of the lease. The periodic interest rate is the discount rate or, if applicable, the adjusted discount rate.
After the commencement date, the Group and the Company recognize a gain or loss, unless the expense is included in the
carrying amount of another asset in accordance with other applicable standards: interest on lease liabilities; and variable
lease payments that are not included in the measurement of the lease liability in the period in which the event or condition
that gave rise to the lease occurs.
Reassessment of the lease liability
After the commencement date, the lease liability is restated to reflect changes in rents. The amount of the revaluation of the
lease liability is recognized by the Group and the Company as an adjustment to the asset under management. However, if
the carrying amount of the asset held for use is reduced to zero and the measurement of the lease liability decreases further,
the lessee shall recognize the remaining revaluation surplus in profit or loss.
Linas, AB, company code 147689083, S. Kerbedžio g 23, Panevėžys
Consolidated and company‘s financial statements
For the year ended December 31, 2021 (All amounts in EUR thousands unless otherwise stated)
23
Discount rate revised
The Group and the Company reassesses the lease liability by discounting the adjusted lease tax at the adjusted discount rate
if the lease term changes. The Group and the Company determine the adjusted lease payments based on the adjusted lease
term or the change in the possibility to acquire the leased asset, assessed taking into account the events and circumstances.
The Group and the Company determine the adjusted lease payments to reflect the amounts payable under the change in the
call option.
If, after a change in the lease term or after estimating a call option, the Group and the Company determine the adjusted
discount rate as the interest rate specified in the lease for the lease term, if that rate can be readily determined, or the
lessee’s additional credit rate at the revaluation date the interest rates stipulated in the lease agreement.
Unchanged discount rate
The Group and the Company reassesses the lease liability by discounting the adjusted lease payments if:
• Changes in the amounts expected to be paid under the residual value guarantee. The Group and the Company
determine the adjusted lease payments to reflect the change in the amounts expected to be paid under the residual
value guarantee.
• Changes in future rents resulting from changes in the index or rate used to determine those payments, including,
for example, changes in market rents following changes in market rents. The Group and the Company reassesses
the lease liability to reflect those adjusted rents only when the cash flows change (i.e., when the lease adjustment
takes effect). The Group and the Company determine the adjusted rents for the remaining lease term based on the
revised contractual payments.
The Group and the Company apply an unchanged discount rate unless the lease has changed due to a change in variable
interest rates.
In this case, the lessee applies a revised discount rate that reflects changes in interest rates.
Lease changes
The leaseholder shall account for the change in lease as a separate lease if:
• The amendment increases the amount of the lease by adding the right to use one or more items of the leased asset.
• The rent increases by an amount that is proportional to the price of the individually increased volume, and any
appropriate adjustments to that separate price, depending on the circumstances of the particular contract.
If the lease modification is not accounted for as a separate lease, the Group and the Company:
• distributes the consideration in the amended contract;
• determines the period of the modified lease;
• reassesses the lease liability by discounting the adjusted rents using the adjusted discount rate.
For a change in lease that is not accounted for as a separate lease, the Group and the Company account for the
reassessment of the lease liability:
• Decreasing the carrying amount of the leased asset to reflect the partial or total termination of the lease due to
changes in the lease that reduce the scope of the lease. The Group and the Company recognize in profit or loss
any gain or loss arising on the partial or total termination of the lease.
• Adjusting the usufruct accordingly for all other changes in the lease.
In the statement of financial position of the Group and the Company, lease liabilities are presented separately from other
liabilities. The cost of a lease is presented separately from the depreciation expense of the asset managed. The related
expense for the lease liability is a component of finance costs that is included in the statement of comprehensive income.
Linas, AB, company code 147689083, S. Kerbedžio g 23, Panevėžys
Consolidated and company‘s financial statements
For the year ended December 31, 2021 (All amounts in EUR thousands unless otherwise stated)
24
Short-term and low-value property leasing
The Group and the Company apply the exemption from the recognition of short-term leases to its short-term leases of
machinery and equipment (i.e., leases with a maximum lease term of 12 months from the date of commencement) that do
not have a call option. It also applies the lease of the low-value asset exemption to the lease of office equipment that is
considered to be of low value. Rents for short-term leases and leases of low-value assets are recognized as an expense on a
straight-line basis over the lease term.
Adoption of IFRS 16
From the date of application of IFRS 16, which is January 1, 2019 the Group and the Company adopted the standard
retrospectively due to a calculation error in adjusting the comparative information in the financial statements as at 31
December 2020.
The Group and the Company have decided to apply a transitional practical arrangement, according to which in January 1,
2019 it did not reassess whether the contract is a lease or includes a lease. Instead, the Group and the Company have
applied the standard only to contracts that were previously recognized as leases and to which IAS 17 and IFRIC 4 were
applied at the date of initial application.
The Group has applied the exceptions in IFRS 16 to the following:
• Use an individual discount rate for leases of the same type, with the same asset characteristics,
• Exemptions for short-term leases, for leases that expire within 12 months from the date of initial application,
• Exclude estimates of direct costs associated with the leased asset at the date of initial application,
• The option to extend the lease is used if the contracts provide for it.
The Group has leases of land, premises, various equipment, vehicles and other equipment. Prior to the adoption of IFRS
16, the Group and the Company classified each of their leases (lessees) as finance or operating leases at the inception date.
Leases previously classified as finance leases
The Group and the Company have not changed the initial carrying amounts of recognized assets and liabilities previously
classified as finance leases at the date of the initial lease (i.e., the assets and liabilities held for use are equal to the leased
assets and liabilities recognized in accordance with IAS 17). The requirements of IFRS 16 have been applied to this lease
since January 1, 2019.
Operating leases - The Group as lessor
Assets leased out under operating leases are recognized in the statement of financial position as property, plant and
equipment and investment property. These assets are depreciated over their useful lives using the same depreciation rates
as other property, plant and equipment used in the Group's operations. Rental income is recognized on a straight-line basis
over the term of the lease.
Finance leases - The Group as a lessee
Leases of assets under which the risks and rewards of ownership are transferred to the Group are classified as finance
leases. The Group accounts for finance leases as assets and liabilities in the statement of financial position at the lower of
the fair value of the leased asset at the inception of the lease and the present value of the minimum lease payments.
The discount rate used in calculating the present value of the minimum lease payments is the interest rate for the lease
payments, where it is practicable to do so, otherwise the Group's alternative borrowing rate is used. Direct initial costs are
included in the value of the asset. Finance lease payments are apportioned between the interest expense and the reduction
of the outstanding liability. Interest is determined so that its percentage of the outstanding balance of the finance lease
liability at each time of payment remains constant over the lease term.
Linas, AB, company code 147689083, S. Kerbedžio g 23, Panevėžys
Consolidated and company‘s financial statements
For the year ended December 31, 2021 (All amounts in EUR thousands unless otherwise stated)
25
Depreciation is charged on assets acquired under finance leases. The depreciation procedure for assets acquired under
finance leases is similar to that for own assets. Such assets may not be depreciated over the lease term unless, under the
lease, ownership is transferred to the Group at the end of the lease term.
Leases of assets under which all the risks and rewards of ownership are retained by the lessor are classified as operating
leases. Payments made under operating leases are recognized as an expense in the statement of comprehensive income on a
straight-line basis over the term of the lease.
2.18. The share capital
Ordinary shares are carried at their nominal value. The amount received for the shares sold in excess of their nominal value
is accounted for as share premium. Incremental costs directly attributable to the issue of new shares are recognized in
equity net of share premium.
2.19. Provisions
A provision is recognized when, and only when, the Group has a present obligation as a result of a past event (legal or
constructive) and it is probable that an outflow of resources embodying economic benefits will be required to settle the
obligation, and the amount of the obligation can be measured reliably. Provisions are reviewed at each reporting date and
adjusted to reflect the current best estimate. Where the effect of the time value of money is material, the amount of the
provision is the present value of the expenditures expected to be required to settle the obligation. When discounting is
used, the increase in the provision that reflects the passage of time is recognized as an interest expense.
Provisions for onerous contracts
Provisions for onerous contracts are recognized when the Group has a present obligation (legal or constructive) to purchase
goods from third parties in the future at a price above the market price or to sell the goods to a third party at a price below
the market date. The difference between the contract value and its market price at the reporting date is recognized in the
statement of comprehensive income at the cost of goods sold. Such accounting is applied to the Group's contracts when
they are not derivative financial instruments.
2.20. Long-term employee benefits
According to the requirements of the Labor Code of the Republic of Lithuania, each employee leaving the Group or the
Company upon reaching retirement age is entitled to a one-time 2-month period salary amount benefit.
Actuarial gains or losses are recognized in the statement of other comprehensive income.
The cost of past service is recognized as an expense on a straight-line basis over the average period until the benefit
becomes vested. Any gain or loss arising on the curtailment and / or settlement of a liability is recognized immediately in
the statement of comprehensive income.
The employee benefit obligation is calculated on the basis of actuarial valuations using the projected unit credit method.
The liability is recognized in the statement of financial position and reflects the present value of those benefits at the
statement of financial position date. The present value of employee benefit obligations is determined by discounting the
estimated future cash flows at the interest rate for government securities denominated in the same currency as the benefits
and with a payout period that is similar to the expected payout period. Actuarial gains and losses are recognized
immediately in other comprehensive income.
Linas, AB, company code 147689083, S. Kerbedžio g 23, Panevėžys
Consolidated and company‘s financial statements
For the year ended December 31, 2021 (All amounts in EUR thousands unless otherwise stated)
26
2.21. Grants and subsidies
Grants and subsidies (hereinafter - grants) are recognized when there is sufficient assurance that the grant will be received
and all conditions attached to the grant will be met.
Grants received in cash for the purchase, construction or other acquisition of fixed assets are treated as grants related to the
asset.
The amount of the grant related to the asset is recognized as deferred income in the financial statements and used to the
extent that the depreciation is charged to the amount of the related expense in the statement of comprehensive income.
Grants received to offset current or prior period expenses or unearned income, as well as all other grants other than grants
related to assets, are treated as grants related to income. Grants related to revenue are recognized in profit or loss to the
extent that it is probable that future economic benefits associated with the item will flow to the entity and the revenue will
be recovered.
2.22. Income tax
Current and prior period income tax assets and liabilities are measured at the amount expected to be recovered from or paid
to the taxation authorities, including adjustments for prior years.
Income tax is calculated using tax rates that have been enacted or substantively enacted by the statement of financial
position date.
The calculation of income tax is based on the annual profit after deferred income tax.
The income tax of the Group and the Company is calculated in accordance with the requirements of the tax laws of the
Republic of Lithuania. The corporate income tax rate in 2021 is applied to the companies of the Republic of Lithuania. 31
December and 2020 31 December - 15%.
According to the Law on Corporate Income Tax of the Republic of Lithuania since 2014. January 1 the amount of
deductible tax losses carried forward may not exceed 70% of the amount of taxable profit for the year. Tax losses may be
incurred indefinitely, except for losses arising from the transfer of securities and / or derivatives. Such a transfer is
terminated if the Group and the Company cease to carry on the activities that gave rise to the loss, unless the Group and the
Company cease to operate for reasons beyond their control. Losses from the transfer of securities and / or derivatives may
be incurred for 5 years and covered only from the profits of transactions of the same type.
Deferred income tax is recognized in respect of temporary differences between the carrying amounts of assets and
liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax assets and liabilities are
measured using tax rates that have been enacted or substantively enacted by the balance sheet date and are expected to
apply when the temporary differences reverse. Deferred tax assets are recognized in the statement of financial position to
the extent that it is probable that future taxable profits will be available against which the asset can be utilized. If part of the
deferred tax asset is not expected to be realized, that part of the deferred tax asset is not recognized in the financial
statements. Deferred income tax assets and liabilities are offset to the extent that it is probable that future taxable profits
will be available against which the deferred tax assets and liabilities can be utilized.
2.23. Earnings and diluted earnings per share
Basic earnings per share are calculated by dividing the net profit attributable to ordinary shareholders by the weighted
average number of ordinary registered shares in issue. Where the number of shares changes but does not affect the change
in economic resources, the weighted average number of ordinary registered shares issued is adjusted in proportion to the
Linas, AB, company code 147689083, S. Kerbedžio g 23, Panevėžys
Consolidated and company‘s financial statements
For the year ended December 31, 2021 (All amounts in EUR thousands unless otherwise stated)
27
change in the number of shares as if it had occurred at the beginning of the previous reporting period. As there are no
dilutive instruments, there is no difference between basic and diluted earnings per share (Note 18).
2.24. Revenue recognition
Revenue from contracts with customers Revenue from contracts with customers is recognized only when control of the
goods or services is transferred to the customer in an amount that reflects the consideration that the Group and the
Company expects to receive in exchange for those goods or services.
The preparation of financial statements in conformity with IFRS requires the application of certain assumptions and
estimates by the Company's and the Group's management that have a significant effect on the amounts presented in the
financial statements. In the opinion of management, the most significant estimates and related uncertainties in the
calculation and recognition of revenue from contracts with customers relate to:
• The expected profit margin of the product (percentage) is used;
• The application of historical management and production accounting data to calculate the value factors associated
with each stage of production.
• In addition to those discussed above, management also considered the effects of other matters on revenue
recognition, such as the existence of significant financing components, non-cash settlements, discounts applied,
and the like. The Company's and the Group's contracts with customers do not contain these listed contractual
terms or, in the opinion of management, are immaterial in the context of the application of IFRS 15.
Contract assets - accrued income
Contract assets are a contingent right to consideration. The right is conditional because the Company or the Group must
first perform another contractual performance obligation in order to be entitled to payment from the customer. If the
Company / Group has an unconditional right to receive consideration from a customer, the contract assets are accounted
for as a receivable and disclosed separately from other contract assets. If the Company and the Group deliver goods or
provide services to a customer before or before the due date, the asset is accounted for in the amount equal to the
contingent consideration earned because the order is not yet complete. Assets arising from contracts with customers -
accrued income - are recognized as a trade receivable at the end of the production cycle (usually within 60 days) after all
contractual obligations have been fulfilled and invoiced.
Contractual obligations - prepayments received
Contractual obligations include prepayments received from customers for future services or goods sold.
Trade receivables Trade receivables represent the right of the Company and the Group to earn a consideration that is
unconditional (i.e., the consideration must be paid after the agreed date without exception). Trade receivables are usually
set at 30-60 days. deferral of payment.
Interest income
Interest income is recognized on a time proportion basis using the effective interest method. When a receivable is impaired,
the Company and the Group reduce it carrying amount to its recoverable amount, being the estimated future cash flows
discounted at the asset's original effective interest rate, and continue to add the discount as interest income. Interest income
on impaired loans is recognized using the original effective interest rate.
Dividend income
Dividend income is recognized in the period in which the right to receive payment is established. Rental income
Payments made under operating leases (net of any discounts granted to the lessee) are recognized as income on a straight-
line basis over the term of the lease.
Linas, AB, company code 147689083, S. Kerbedžio g 23, Panevėžys
Consolidated and company‘s financial statements
For the year ended December 31, 2021 (All amounts in EUR thousands unless otherwise stated)
28
2.25. Recognition of costs
Expenses are recognized on an accrual basis. The cost is usually estimated by the amount of money paid or payable,
excluding VAT. In cases where a long settlement period is expected and interest is not excluded, the cost is estimated by
discounting the settlement amount at market interest rate.
2.26. Impairment of non-financial assets
The Group assesses at each reporting date whether there is any indication that a non-financial asset may be impaired. If any
such indication exists, or when annual impairment testing for an asset is required (for example, prestige), the Group
estimates the asset's recoverable amount. The recoverable amount of an asset is the higher of an assets or cash-generating
unit's fair value less costs to sell and its value in use. The recoverable amount of an asset is determined separately for each
asset, unless the asset does not generate cash inflows that are largely independent of the cash inflows from other assets or
groups of assets. When the carrying amount of an asset exceeds its recoverable amount, the asset is considered impaired
and is written down to its recoverable amount. In assessing value in use, the estimated future cash flows are discounted to
their present value using a pre-tax discount rate that reflects current market assessments of „the time value“ of money and
the risks specific to the asset. An appropriate valuation model is used to define the fair value less costs to sell. These
calculations are performed using independent valuations, valuation factors or other possible fair value indicators.
Impairment losses are recognized in the statement of comprehensive income in those expense items that best reflect the
nature of the impaired asset.
Non-financial assets other than goodwill are measured at each reporting date. An assessment is made as to whether there is
any indication that the previously recognized impairment loss may no longer exist or may have decreased. If any such
indication exists, the Group estimates the asset's recoverable amount. A previously recognized impairment loss is reversed
only if there has been a change in the estimates used to determine the asset's recoverable amount since the last impairment
loss was recognized. In this case, the carrying amount of the asset is increased to its recoverable amount. This increase in
value shall not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no
impairment loss had been recognized for the asset in prior periods. Such a reversal is recognized in the statement of
comprehensive income.
2.27. Segments
A business segment is a separate component of the Group that is engaged in providing an individual product or service or
group of related products or services whose performance is reviewed regularly by the Group's management to determine
the resources available to the segment and for which separate financial information is available.
For management purposes, the Group's operations are organized into the following operating segments according to
products and services: fabrics, sewn products, yarns and manufacturing services.
The Group's and the Company's revenue by business and geographical region is disclosed in Note 3.
Revenue and expenses include revenue and expenses that can be allocated to that segment directly or through established
allocation criteria. Revenue is allocated to individual countries based on the location of customers.
Costs are not allocated to individual operating segments and are presented as total expenses.
The assets and liabilities of the Group and the Company cannot reasonably be allocated to separate segments. All assets
and liabilities of the Group and the Company are not allocated by business or geographical segment.
Linas, AB, company code 147689083, S. Kerbedžio g 23, Panevėžys
Consolidated and company‘s financial statements
For the year ended December 31, 2021 (All amounts in EUR thousands unless otherwise stated)
29
2.28. Fair value measurement
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between
market participants at the settlement date. The determination of fair value is based on the assumption that the sale of an
asset or the transfer of a liability takes place either:
• In the primary market for the asset or liability, or
• in the absence of a primary market, for assets or liabilities in the most favorable market.
The main or most favorable market must be available to the Group.
The fair value of an asset or liability is determined using those assumptions that market participants would use to
determine the price of the asset or liability, assuming that market participants have the best economic interests at stake.
The fair value of a non-financial asset is determined by reference to the ability of the market participant to generate the
economic benefits from the most efficient or best use of the asset or by selling it to another market participant using the
asset most efficiently and best.
The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to
determine fair value, using as much relevant observable data as possible and as little unobservable data as possible.
All assets and liabilities whose fair value is determined or disclosed in the financial statements are classified according to
the fair value hierarchy described below, which is based on the significant lowest level data used to determine fair value:
• Level 1 - quoted (unadjusted) prices in active markets for the same assets or liabilities;
• Level 2 - valuation methodologies that directly or indirectly monitor the lowest level data that is significant in
determining fair value;
• Level 3 - valuation methodologies that do not observe the lowest level data that is significant in determining fair
value.
For the revaluation of assets and liabilities in the financial statements, the Group reassesses whether the transfers have
occurred between levels of the hierarchy (based on the lowest level that is significant in determining fair value in general)
at the end of each reporting period.
Evaluations are performed by the Group's management on each reporting date. In order to disclose fair value, the Group
and the Company have determined the classes of assets and liabilities according to the nature, characteristics and risks of
the assets and liabilities and the level of the fair value hierarchy described above.
2.29. Use of estimates and assumptions in preparing financial statements
The preparation of financial statements in conformity with International Financial Reporting Standards requires
management to make certain assumptions and estimates that affect the reported amounts of assets, liabilities, income and
expenses and the disclosure of uncertainties.
Significant accounting decisions
The significant accounting judgments used in the preparation of these financial statements are set out below.
Assessing whether a principal or agent acting on its own account
The Group has identified itself as a person acting on its own account in the supply of goods or services because:
• controls the goods and services until they are delivered to the customer;
• is responsible for the overall performance of the contract and assumes its risk;
• can set the selling price.
The significant accounting estimates used in the preparation of these financial statements relate to depreciation (Notes 2.8,
2.9, 5 and 6) and the determination of the net value of inventories (Notes 2.12 and 8).
Linas, AB, company code 147689083, S. Kerbedžio g 23, Panevėžys
Consolidated and company‘s financial statements
For the year ended December 31, 2021 (All amounts in EUR thousands unless otherwise stated)
30
Possible future events may change the assumptions used in the estimates. The effects of changes in valuation will be
included in financial statements as soon as they are determined.
The key assumptions concerning the future and other significant sources of estimation uncertainty at the reporting date that
have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next
financial year are discussed below.
December 31, 2021 and 2020
The Group assesses at least annually whether there is any indication that an intangible asset may be impaired. If any such
indication exists, the Group performs an impairment test. The recoverable amount of a cash-generating asset is determined
by reference to its value in use model, which is based on a discounted cash flow model. Cash flows are estimated using the
forecast for the next 5 years and do not include restructuring costs for which the Group is not committed or significant
future investments that would significantly increase the value of the cash-generating unit's assets.
2021 31 December there were no significant indications that the carrying amount of property, plant and equipment was in
the balance sheet the value could exceed the recoverable amount, except for assets that are already impaired.
Impairment of land
At least annually, the Group assesses whether there is any indication that land carried as property, plant and equipment
may be impaired. If any such indication exists, the Group performs an impairment test. The recoverable amount of land is
determined as the fair value less costs to sell based on comparable market prices for similar land provided by independent
appraisers.
December 31, 2021 there were no possible changes in the assumptions that would cause the carrying amount of the
available land to exceed its recoverable amount, except for assets that have already been written down.
Impairment of the Company's investments and loans granted
December 31, 2021 and 2020 the Company has investments in subsidiaries. The Company assesses, at least annually,
whether there is any indication that an investment in a subsidiary or associate may be impaired.
December 31, 2021 and 2020 as at the date of the investment, there was no expected change in the assumptions that would
cause the carrying amount of these investments to exceed their recoverable amount.
Valuation of inventories
The Group's management has made assumptions for measuring inventories below their fair value. The key factors included
in the measurement of the fair value of management's inventories are: inventory obsolescence, market prices, and post-
balance sheet selling prices. Future events may change these assumptions. Changes in these effects are recorded in the
financial statements as they occur.
2.30. Uncertainties
Contingent liabilities are not recognized in the financial statements, except for contingent liabilities related to business
combinations. They are disclosed in the financial statements unless the possibility of an outflow of resources embodying
economic benefits is remote. Contingent assets are not recognized in the financial statements but are disclosed when it is
probable that future economic benefits or service potential will flow to the entity.
2.31. Subsequent events
Subsequent events that provide additional information about the Group's claims at the reporting date (adjusting events) are
reflected in the financial statements. Subsequent events that are not adjusting events are disclosed in the notes when
material.
Linas, AB, company code 147689083, S. Kerbedžio g 23, Panevėžys
Consolidated and company‘s financial statements
For the year ended December 31, 2021 (All amounts in EUR thousands unless otherwise stated)
31
2.32. Offsetting and rounding
In preparing the financial statements, assets and liabilities and income and expenses are not offset unless a separate IFRS
requires or permits such offsetting.
Due to rounding of individual amounts to thousands of euros, the figures in the tables may not add up, such rounding errors
are insignificant in these financial statements.
Linas, AB, company code 147689083, S. Kerbedžio g 23, Panevėžys
Consolidated and company‘s financial statements
For the year ended December 31, 2021 (All amounts in EUR thousands unless otherwise stated)
32
3. Segment information
For management purposes, the segments of the textile manufacturing business are divided into products and services,
fabrics, sewing products, yarns and manufacturing services. They are measured at profit or loss.
The following is information on the textile business segments of the Group and the Company:
The Group
Fabrics
Sewn items
Yarns
Manufacturing
services
Total
December 31, 2021
Income (third parties)
11,389
4,966
32
359
16,746
Cost (third parties)
(9,098)
(3,963)
(41)
(195)
(13,297)
Gross profit (loss)
2,291
1,003
(9)
164
3,449
Operating and selling
expenses
-
-
-
-
(2,399)
Segment operating profit
(loss)
2,291
1,003
(9)
164
1,050
The Group
Fabrics
Sewn items
Yarns
Manufacturing
services
Total
December 31, 2020
Income (third parties)
9,625
4,079
42
261
14,007
Cost (third parties)
(8,083)
(3,340)
(138)
(148)
(11,709)
Gross profit (loss)
1,542
739
(96)
113
2,298
Operating and selling
expenses
-
-
-
-
(1,907)
Segment operating profit
(loss)
1,542
739
(96)
113
391
Inter-segment transactions are eliminated on consolidation
(Continued on next page)
Linas, AB, company code 147689083, S. Kerbedžio g 23, Panevėžys
Consolidated and company‘s financial statements
For the year ended December 31, 2021 (All amounts in EUR thousands unless otherwise stated)
33
The following is information on the textile business segments:
The Company
Fabrics
Sewn
items
Yarns
Manufacturing
services
Total
December 31, 2021
Income (third parties)
11,389
4,966
32
359
16,746
Cost (third parties)
(9,098)
(4,401)
(41)
(195)
(13,735)
Gross profit (loss)
2,291
565
(9)
164
3,011
Operating and selling
expenses
-
-
-
-
(2,022)
Segment operating
profit (loss)
2,291
565
(9)
164
989
The Company
Fabrics
Sewn
items
Yarns
Manufacturing
services
Total
December 31, 2020
Income (third parties)
9,625
4,079
42
258
14,004
Cost (third parties)
(8,083)
(3,785)
(138)
(145)
(12,151)
Gross profit (loss)
1,542
294
(96)
113
1,853
Operating and selling
expenses
-
-
-
-
(1,626)
Segment operating
profit (loss)
1,542
294
(96)
113
227
Linas, AB, company code 147689083, S. Kerbedžio g 23, Panevėžys
Consolidated and company‘s financial statements
For the year ended December 31, 2021 (All amounts in EUR thousands unless otherwise stated)
34
The following is information on the textile business geographical segments of the Group:
The Group
Lithuania
Europe
countries
Scandinavian
countries
USA
Other
countries
Total
December 31, 2021
Income
4,215
7,196
3,018
630
1,687
16,746
Cost
(3,251)
(5,939)
(2,180)
(487)
(1,440)
(13,297)
Gross profit (loss)
964
1,257
838
143
247
3,449
Operating and selling
expenses
-
-
-
-
-
(2,399)
Segment operating
profit (loss)
964
1,257
838
143
247
1,050
The Group
Lithuania
Europe
countries
Scandinavian
countries
USA
Other
countries
Total
December 31, 2020
Income
3,803
6,165
1,970
402
1,667
14,007
Cost
(3,192)
(5,251)
(1,543)
(311)
(1,412)
(11,709)
Gross profit (loss)
611
914
427
91
255
2,298
Operating and selling
expenses
-
-
-
-
-
(1,907)
Segment operating
profit (loss)
611
914
427
91
255
391
(Continued on next page)
Linas, AB, company code 147689083, S. Kerbedžio g 23, Panevėžys
Consolidated and company‘s financial statements
For the year ended December 31, 2021 (All amounts in EUR thousands unless otherwise stated)
35
Segment information (continued)
The following is information on the textile business geographical segments of the Company:
The Company
Europe
countries
Scandinavian
countries
USA
Other
countries
Total
December 31, 2021
Income
4,215
7,196
3,018
630
1,687
16,746
Cost
(3,387)
(6,118)
(2,246)
(502)
(1,482)
(13,735)
Gross profit (loss)
828
1,078
772
128
205
3,011
Operating and selling
expenses
-
-
-
-
-
(2,022)
Segment operating
profit (loss)
828
1,078
772
128
205
989
The Company
Europe
countries
Scandinavian
countries
USA
Other
countries
Total
December 31, 2020
Income
3,800
6,165
1,970
402
1,667
14,004
Cost
(3,335)
(5,435)
(1,597)
(322)
(1,462)
(12,151)
Gross profit (loss)
465
730
373
80
205
1,853
Operating and selling
expenses
-
-
-
-
-
(1,626)
Segment operating
profit (loss)
465
730
373
80
205
227
Linas, AB, company code 147689083, S. Kerbedžio g 23, Panevėžys
Consolidated and company‘s financial statements
For the year ended December 31, 2021 (All amounts in EUR thousands unless otherwise stated)
36
4. Intangible assets
The Ground and the Company
Software
Other
intangible
assets
Prepayments
for unfinished
projects
Total
Costs:
Balance as at 31 December 2019
105
-
-
105
Acquisitions
37
-
-
37
Balance as at 31 December 2020
142
-
-
142
Acquisitions
10
3
-
13
Overwriting from one article to another
(87)
18
69
-
Balance as at 31 December 2021
65
21
69
155
Accumulated amortization:
-
-
-
Balance as at 31 December 2019
58
-
-
58
Amortization
6
-
6
Balance as at 31 December 2020
64
-
-
64
Amortization
1
1
2
Balance as at 31 December 2021
65
1
-
66
Net book value as at 31 December 2021
0
20
69
89
Net book value as at 31 December 2020
77
77
-
77
Net book value as at 31 December 2019
46
46
-
46
The Group has no internally generated intangible assets. Amortization of intangible assets is included in operating
expenses in the statement of comprehensive income (Note 20).
December 31, 2021 the acquisition cost of fully amortized, but still used intangible assets of the Group and the Company
amounted to 65 thousand Eur (December 31, 2020 - EUR 65 thousand).
The company December 31, 2021 reclassified 69 thousand from the acquisition of software to unfinished projects, as the
planned acquisition of software project is not yet complete.
Linas, AB, company code 147689083, S. Kerbedžio g 23, Panevėžys
Consolidated and company‘s financial statements
For the year ended December 31, 2021 (All amounts in EUR thousands unless otherwise stated)
37
5. Non-current tangible assets
The Group
Land
Buildings
and
structures
Machinery
and
equipment
Motor
Vehicles
Other
property,
plant and
equipment
Construction
in progress
and
prepayments
Total
Balance as at 31 December
2019
Acquisitions
-
1,586
1,324
247
61
-
3,218
Assets sold and written off
-
-
-
6
4
1
11
Balance as at 31 December
2020
-
-
(587)
(50)
-
-
(637)
Acquisitions
-
1,586
737
203
65
1
2,592
Assets sold and written off
-
-
4
-
12
32
48
Reclassifications to other
tangible assets
-
-
(2)
-
(13)
-
(15)
Reclassifications
-
-
-
(6)
-
-
(6)
Balance as at 31 December
2021
-
-
20
(20)
1
(1)
-
Accumulated
depreciation:
-
1,586
759
177
65
32
2,619
Balance as at 31 December
2019
Depreciation
-
311
1,057
160
45
-
1,573
Assets sold and written off
-
107
26
17
6
-
156
Balance as at 31 December
2020
-
-
(354)
(38)
-
-
(392)
Depreciation
-
418
729
139
51
-
1,337
Assets sold and written off
-
106
5
16
6
-
133
Reclassifications to other
tangible assets
-
-
(2)
(13)
-
(15)
Reclassification
-
-
-
(1)
-
-
(1)
Balance as at 31 December
2021
-
-
20
(20)
-
-
-
-
524
752
134
45
-
1,455
Net book value as at 31
December 2021
Net book value as at 31
December 2020
-
1,062
7
43
20
32
1,164
Net book value as at 31
December 2019
-
1,168
8
64
14
1
1,255
Balance as at 31
December 2019
-
1,275
267
87
16
-
1,645
Linas, AB, company code 147689083, S. Kerbedžio g 23, Panevėžys
Consolidated and company‘s financial statements
For the year ended December 31, 2021 (All amounts in EUR thousands unless otherwise stated)
38
The Company
Land
Buildin
gs and
structu
res
Machine
ry and
equipme
nt
Motor
Vehicles
Other
property,
plant and
equipment
Construction
in progress
and
prepayments
Total
Cost:
Balance as at 31 December
2019
-
1,580
883
231
54
-
2,748
Acquisitions
-
-
-
6
4
1
11
Assets sold and written off
-
-
(232)
(50)
-
-
(282)
Balance as at 31
December 2020
-
1,580
651
187
58
1
2,477
Acquisitions
-
-
-
-
10
32
42
Assets sold and written off
-
-
-
-
(13)
-
(13)
Reclassifications to other
tangible assets
-
-
-
(6)
-
-
(6)
Reclassifications
-
-
14
(14)
1
(1)
0
Balance as at 31
December 2021
-
1,580
665
167
56
32
2,500
Accumulated depreciation:
Balance as at 31
December 2019
-
306
755
144
38
-
1,243
Depreciation
-
106
11
18
6
-
141
Assets sold and written off
-
-
(115)
-38
-
-
(153)
Balance as at 31
December 2020
-
412
651
124
44
0
1231
Depreciation
-
106
15
6
-
127
Assets sold and written off
-
-
-
-
(13)
-
(13)
Reclassifications to other
tangible assets
-
-
-
(1)
-
-
(1)
Reclassification
-
-
14
(14)
-
-
-
Balance as at 31
December 2021
-
518
665
124
37
0
1344
Net book value as at 31
December 2021
-
1,062
0
43
19
32
1,156
Net book value as at 31
December 2020
-
1,168
0
63
14
1
1,246
Net book value as at 31
December 2019
-
1,274
128
87
16
-
1,505
Depreciation of non-current tangible assets is included in operating and selling expenses and other operating expenses in
the statement of comprehensive income (Notes 20, 21).
December 31, 2021 the acquisition cost of fully depreciated but still used property, plant and equipment of the Group and
the Company amounted to LTL 870 thousand, respectively. EUR and 773 thousand. (December 31, 2020: EUR 868
thousand and EUR 780 thousand). December 31, 2021 was reclassified from the group of vehicles to the group of
machinery and equipment for use.
Linas, AB, company code 147689083, S. Kerbedžio g 23, Panevėžys
Consolidated and company‘s financial statements
For the year ended December 31, 2021 (All amounts in EUR thousands unless otherwise stated)
39
6. Investment property
The Ground and the Company
Cost:
Land
Total
Balance as at 31 December 2019
416
416
Balance as at 31 December 2020
416
416
Balance as at 31 December 2021
416
416
Impairment losses
Balance as at 31 December 2019
42
42
Balance as at 31 December 2020
42
42
Balance as at 31 December 2021
42
42
Net book value as at 31 December 2021
374
374
Net book value as at 31 December 2020
374
374
Net book value as at 31 December 2019
374
374
The Group's investment property consists of land that is held for capital appreciation.
The fair value of the Group's and the Company's investment property in 2021 31 December is 374 thousand, respectively.
EUR (374 thousand in 2020). The fair value was estimated based on the analysis of price changes (source:
https://www.aruodas.lt/kainu-statistika/) using the comparable price method (level 2). The price level remained similar
during the period under review, so we assume that the carrying amount of the investment property is equal to its fair value.
Linas, AB, company code 147689083, S. Kerbedžio g 23, Panevėžys
Consolidated and company‘s financial statements
For the year ended December 31, 2021 (All amounts in EUR thousands unless otherwise stated)
40
7. Right-of-use assets and lease liabilities
The Group
Land
Buildings
and
structures
Machinery
and
equipment
Motor
Vehicles
Total
Cost:
Balance as at 31 December 2019
269
193
70
5
537
Acquisitions
125
-
125
Assets sold and written off
(80)
(29)
(70)
(179)
Balance as at 31 December 2020
189
164
125
5
483
Acquisitions
80
1
-
81
Assets sold and written off
(5)
(5)
Balance as at 31 December 2021
269
165
125
0
559
Accumulated depreciation:
Balance as at 31 December 2019
4
36
55
2
97
Depreciation
3
39
46
2
90
Assets sold and written off
-
-
(70)
-
(70)
Balance as at 31 December 2020
7
75
31
4
117
Depreciation
4
39
47
1
91
Assets sold and written off
-
-
-
(5)
(5)
Balance as at 31 December 2021
11
114
78
0
203
Net book value as at 31 December
2021
258
51
47
0
356
Net book value as at 31 December
2020
182
89
94
1
366
Net book value as at 31 December
2019
265
157
15
3
440
Linas, AB, company code 147689083, S. Kerbedžio g 23, Panevėžys
Consolidated and company‘s financial statements
For the year ended December 31, 2021 (All amounts in EUR thousands unless otherwise stated)
41
The Company
Land
Buildings
and
structures
Machinery
and
equipment
Motor
Vehicles
Total
Cost:
Balance as at 31 December 2019
269
154
5
428
Acquisitions
2
-
2
Assets sold and written off
(80)
(29)
(109)
Balance as at 31 December 2020
189
125
2
5
321
Acquisitions
80
1
-
-
81
Assets sold and written off
-5
-5
Balance as at 31 December 2021
269
126
2
0
397
Accumulated depreciation:
Balance as at 31 December 2019
4
29
0
2
35
Depreciation
3
28
0
2
33
Assets sold and written off
-
-
-
-
-
Balance as at 31 December 2020
7
57
0
4
68
Depreciation
4
29
1
1
35
Assets sold and written off
-
-
-
(5)
(5)
Balance as at 31 December 2021
11
86
1
0
98
Net book value as at 31 December
2021
258
40
1
0
299
Net book value as at 31 December
2020
182
68
2
1
253
Net book value as at 31 December
2019
265
125
0
3
393
Depreciation expense of the Group and the Company on December 31, 2021 was 91 thousand euros and 35 thousand euros
(December 31, 2021 - 90 thousand euros and 33 thousand euros).
Linas, AB, company code 147689083, S. Kerbedžio g 23, Panevėžys
Consolidated and company‘s financial statements
For the year ended December 31, 2021 (All amounts in EUR thousands unless otherwise stated)
42
8. Stocks
The Group
The Company
December 31
December 31
2021
2020
2021
2020
Raw materials
2,515
2,167
2,488
2,153
Finished Productions
2,633
2,020
2,685
2,077
Work in progress
27
16
Goods for resale
14
1
14
1
Write-downs to net realizable value
(84)
-
(84)
-
Total
5,105
4,204
5,103
4,231
December 31, 2021 inventories of the Group and the Company amounting to 5,105 thousand Eur (2020 - 4,204 thousand
Eur) were pledged to banks as collateral for loans (Note 18), the value of collateral pledged under pledge notes was 1,448
thousand Eur.
9. Prepayments
The Group
The Company
December 31
December 31
2021
2020
2021
2020
Prepayments to suppliers for resale of long-
term assets
604
-
604
-
Prepayments to suppliers for raw materials,
goods, services
201
268
200
201
Impairment of doubtful prepayments to
suppliers
-
-
-
-
Total
805
268
804
201
Advance payment is interest free and usually has a term of 30-180 days.
10. Accounts receivable
The Group's and the Company's trade receivables consist of trade receivables from Lithuanian and foreign customers,
interest is not charged on trade receivables and the settlement term is 30-90 days.
IFRS 9 requires the Group and the Company to recognize expected credit losses for all debt instruments that are not carried
at fair value through profit or loss and for assets arising from contracts with customers. The Group and the Company use
the Expected Loss Rate (TNN) matrix to calculate the expected credit loss (ECL) on trade receivables. Expected credit loss
rates are based on the customer default history, which is grouped by customer type. The TNN matrix is based on the
Linas, AB, company code 147689083, S. Kerbedžio g 23, Panevėžys
Consolidated and company‘s financial statements
For the year ended December 31, 2021 (All amounts in EUR thousands unless otherwise stated)
43
Group's and the Company's historical information on customer defaults. The Group and the Company adjust the values of
the matrix to include projected future information. For example, if next year's economy is expected to deteriorate / slow
down according to future projections (e.g., GDP levels), which may increase the growth of defaults, historical expected
loss rates will be adjusted to reflect future projections. Historical credit loss rates are reviewed for each reporting period. In
assessing impairment of trade receivables, individual trade receivables are grouped according to the period of maturity.
The Company has calculated the expected credit loss rate used to calculate the ECL and has determined that the calculated
amounts do not have a material impact on the financial statements.
Trade receivables are secured by credit insurance or collateral.
Limitation analysis of the Group's and the Company's trade receivables in December 31, 2021 and December 31, 2021.
The Group/The
Company
Receivables that are not
past due and are not
impaired
Receivables that are past due but not impaired
Total
Not overdue
Less than 30
days
31 - 90
days
91 -
180
days
181-
365
days
More than
365 days
2021
1,014
90
26
15
9
-
1,154
2020
902
106
13
12
8
-
1,041
11. Other receivables
Other receivables of the Group and the Company comprise:
The Group
The Company
December 31
December 31
2021
2020
2021
2020
Receivable taxes
142
74
136
74
Other receivables
5
43
3
10
Total:
147
117
139
84
12. Cash and cash equivalents
The Group
The Company
December 31
December 31
2021
2020
2021
2020
Cash in bank
1,734
2,871
1,682
2,865
Cash in hand
8
2
8
2
Letter of credit
394
-
394
-
Total:
2,136
2,873
2,084
2,867
Linas, AB, company code 147689083, S. Kerbedžio g 23, Panevėžys
Consolidated and company‘s financial statements
For the year ended December 31, 2021 (All amounts in EUR thousands unless otherwise stated)
44
13. Reserves
Legal reserve
The required reserve is required under the legislation of the Republic of Lithuania. At least 5 percent of the net profit
calculated in accordance with International Financial Reporting Standards must be transferred to it annually until the
reserve reaches 10 percent authorized capital. December 31, 2021 legal reserve was 92 thousand Eur (53 thousand -
December 31, 2020). Legal reserve in December 31, 2021 and December 31, 2020 was not fully formed.
Reserve for acquisition of own shares
The Annual General Meeting of the Company, held on May 16, 2019, the decision formed 264 thousand reserves for the
acquisition of own shares. The purpose of acquisition own shares is to maintain and increase the price of the Company's
shares. The term during which the Company may acquire its own shares is 18 months from the date of the decision. During
the financial year ended at December 31, 2021, the Company transferred 1,385,833 units. treasury shares, the net result
from this operation is recognized directly in the statement of changes in equity.
14. Grants and subsidies
The Group
The Company
December 31
December 31
2021
2020
2021
2020
Balance at the beginning of
the period
42
0
9
0
Subsidy amounts received
5
303
1
149
Subsidy receivables
1
42
0
9
Amounts of subsidies used
(46)
303
(10)
149
Balance at end of period
1
42
-
9
Subsidy amounts were received for staff downtime that occurred in 2020 for Covid-19.
15. Borrowings
The Group
The Company
December 31
December 31
2021
2020
2021
2020
Non-current borrowings
1,080
1,330
1,080
1,330
Other non-current borrowings
1,080
1,330
1,080
1,330
Current borrowings
-
133
-
133
Current bank borrowings secured by the
Group assets
-
133
-
133
Linas, AB, company code 147689083, S. Kerbedžio g 23, Panevėžys
Consolidated and company‘s financial statements
For the year ended December 31, 2021 (All amounts in EUR thousands unless otherwise stated)
45
Interest payable is usually paid monthly. As at December 31, 2021, the amount of unused credit limits and overdrafts of the
Group and the Company amounted to LTL 434 thousand. EUR (December 31, 2020 - EUR 1,141 thousand). Weighted
interest rate 3%.
December 31, 2021 and 2020 the Company complied with all obligations under the credit agreements.
145 thousand Eur credit sum is granted to the Company acc. to the account lending contract which was signed between the
bank and AB “Linas” on 2012 04 10 Company’s reserves, the balancing value of which are 1 448 thousand Eur according
to the mortgage sheets, are mortgaged for the credit sum UAB “Lino apdaila” is guarantee for all credit sum and term to
ensure credit sum The validation term of account credit contract is till March 31, 2022 Alternate interests are paid for
used credit, which are accounted as three months term Eur EURIBOR plus bank margin.
According to the financial obligations limit contract signed between the bank and AB “Linas” on 07 10 2013, the credit of
290 thousand Eur is granted to the Company, for which company resources are mortgaged with the latest mortgage, the
balance value of which acc. to the mortgage sheets are 1 448 thousand Eur For the insurance of credit sum the warranty
for all credit sum and term is received from UAB “Lino apdaila” The validation term of the financial obligations limit
contract has been extended until 2022 September 30,. Alternate interests are paid for used credit, which are accounted as
six months term Eur EURIBOR plus bank margin
According to the loan agreement, concluded on 17/04/2020 between Linas AB and Verslo dizainas, UAB was granted
1.330 thousand Eur. On 16 June 2021 the loan was taken over by Verslo dizainas, UAB parent company Lidera LT, UAB
according to the assignment agreement.
16. Trade debts
Trade debts are interest-free and are usually paid within 30 days.
17. Income tax
The Group
The Company
December 31
December 31
2021
2020
2021
2020
Income tax expense components:
Income tax expense for the year
(212)
(98)
(208)
(77)
Deferred income tax expense (income)
18
-
13
-
Income tax expense recognized in the statement of
comprehensive income
(194)
(98)
(195)
(77)
The Group
The Company
December 31
December 31
2021
2020
2021
2020
Deferred income tax assets
Impairment of inventories
13
13
Long-term employee benefits
8
3
Others
-
-
Deferred income tax assets, net
21
0
16
0
Deferred income tax liability
Depreciation of non-current tangible assets
(3)
(3)
Others
-
-
Deferred income tax liability
(3)
0
(3)
0
Deferred income tax, net
18
0
13
0
Linas, AB, company code 147689083, S. Kerbedžio g 23, Panevėžys
Consolidated and company‘s financial statements
For the year ended December 31, 2021 (All amounts in EUR thousands unless otherwise stated)
46
The Group
The Company
December 31
December 31
2021
2020
2021
2020
Profit before tax
1,244
610
1,256
859
Income tax calculated at the tax rate specified in the
regulatory enactments
(187)
(92)
(188)
(129)
Constant differences
(7)
(6)
(5)
52
Temporary differences
(18)
(15)
Income tax (income) expenses
(212)
(98)
(208)
(77)
Comparison of the amount of income tax expense recognized for the year with the amount of income tax expense that
would have been calculated on the pre-tax profit using the statutory income tax rate.
2021 deferred income tax assets and liabilities related to the Group's companies operating in Lithuania are accounted for
using 15% tax rate (15% in 2020).
18. Earnings per share
Earnings per share represent the Group's net profit divided by the number of shares. The Company has no dilutive
measures, so basic and diluted earnings per share are equal. The calculation of earnings per share is as follows:
The Group
The Company
December 31
December 31
2021
2020
2021
2020
Profit (loss) attributable to shareholders of
the Group
1,050
512
1,061
782
Weighted number of shares for the period
24,039
24,039
24,039
24,039
Earnings per share, Eur
0.044
0.021
0.044
0.033
19. Financial assets and liabilities and risk management
Credit risk
None of the Group's customers accounts for more than 10%. The Group has no significant credit risk concentrations in the
Group. The Group considers the risk concentration related to receivables to be low because the main customers are
concentrated in several jurisdictions and sectors and operate in large independent markets. The Group has measures in
place to ensure on an ongoing basis that products are sold only to customers with a relevant credit history and do not
exceed an acceptable credit risk limit. December 31, 2021 part of the receivables of Linas, AB customers are insured with
an insurance limit of 920 thousand Eur (861 thousand as at December 31, 2020). The Group does not warrant against the
obligations of other parties. The maximum exposure to credit risk is the carrying amount of each financial asset, including
derivative financial instruments, if any. Therefore, the Group's management believes that the maximum risk is equal to the
amount of other receivables from customers, cash and cash equivalents, less any impairment of doubtful receivables at the
reporting date. Part of the trade receivables and other receivables are secured by collateral. Interest rate risk
Linas, AB, company code 147689083, S. Kerbedžio g 23, Panevėžys
Consolidated and company‘s financial statements
For the year ended December 31, 2021 (All amounts in EUR thousands unless otherwise stated)
47
The majority of the Group's financial liabilities consist of loans with variable interest rates, which are linked to
EURLIBOR, EURIBOR and give rise to interest rate risk. The Group and the Company do not have any financial
instruments designed to manage the risk of interest rate fluctuations. There is no direct effect of changes in interest rates on
equity.
The sensitivity of the Group's and the Company's pre-tax profit to potential changes in interest rates does not have a
significant impact.
Liquidity risk
It is the policy of the Group and the Company to maintain a sufficient amount of cash and cash equivalents or to secure
funding through appropriate lines of credit to meet the obligations set out in its strategic plans. The Group's liquidity (total
current assets / total amounts payable and liabilities within one year) and contingency ratios (total current assets -
inventories) / total amounts payable and liabilities within one year in December 31, 2021 were 7.18 and 3.77, respectively,
the Company's 7.30 and 3.48 (respectively 5.05 and 2.53 and the Company's 4.88 and 2.43 as at December 31, 2020).
The table below summarizes the maturity of the Group's financial liabilities by undiscounted contractual payments
(scheduled interest payments):
The Group
On
request
until 3
moths
Total
From 3
to 12
months
From
1 to 2
years
From
2 to 5
years
After 5
years
Leasing liabilities
-
23
58
99
117
495
792
Loans to banks
-
-
-
-
-
-
-
Loans to others
-
-
-
-
-
-
-
Loans to related companies
-
-
-
1,123
-
-
1,123
Trade debt
-
450
-
-
-
-
450
Trade payables to related companies
-
443
-
-
-
-
443
Accrued charges
-
11
-
-
-
-
11
Other liabilities
-
91
189
-
-
-
280
December 31, 2021 balance
-
1,018
247
1,222
117
495
3,099
Leasing liabilities
-
23
76
96
98
401
694
Loans to banks
-
136
-
-
-
-
136
Loans to others
-
-
-
-
1,423
-
1,423
Loans to related companies
-
-
-
-
-
-
-
Trade debt
-
926
-
-
-
-
926
Trade payables to related companies
-
411
-
-
-
-
411
Accrued charges
-
10
-
-
-
-
10
Other liabilities
-
117
100
50
-
-
267
December 31, 2020 balance
-
1,623
176
146
1,521
401
3,867
Linas, AB, company code 147689083, S. Kerbedžio g 23, Panevėžys
Consolidated and company‘s financial statements
For the year ended December 31, 2021 (All amounts in EUR thousands unless otherwise stated)
48
The table below summarizes the maturity of the Company's financial liabilities in terms of undiscounted contractual
payments (scheduled interest payments):
The Company
On
request
until 3
moths
After
5
years
Total
From 3
to 12
months
From
1 to 2
years
From
2 to 5
years
Leasing liabilities
-
8
14
40
117
495
674
Loans to banks
-
-
-
-
-
-
-
Loans to others
-
-
-
-
-
-
-
Loans to related companies
-
-
-
1,123
-
-
1,123
Trade debt
-
298
-
-
-
-
298
Trade payables to related companies
-
795
-
-
-
-
795
Accrued charges
-
8
-
-
-
-
8
Other liabilities
-
61
154
-
-
-
215
December 31, 2021 balance
-
1,170
168
1,163
117
495
3,113
Leasing liabilities
-
8
32
37
55
401
533
Loans to banks
-
136
-
-
-
-
136
Loans to others
-
-
-
-
1,423
-
1,423
Loans to related companies
-
-
-
-
-
-
-
Trade debt
-
926
-
-
-
-
926
Trade payables to related companies
-
411
-
-
-
-
411
Accrued charges
-
7
7
Other liabilities
-
117
-
-
-
-
117
December 31, 2020 balance
-
1,605
32
37
1,478
401
3,553
Fair value of financial assets and liabilities
The carrying amounts of the Company's financial instruments accounted for in the financial statements approximate their
fair values.
The following methods and assumptions are used to measure each type of financial asset and financial liability:
• The carrying amounts of current trade receivables, current trade payables, current liabilities and other receivables
and payables approximate their fair values.
• The fair value of long-term debt is determined based on the market price of the same or a similar loan or the
interest rate that is currently applicable to debt of the same maturity. The fair value of long-term floating rate debt
is close to it carrying amount.
Foreign exchange risk
The currency risk of the Group and the Company is caused by import and export activities. Group policy seeks to align
cash flows from highly probable future sales with purchases in each foreign currency. The Group does not use any
financial instruments to manage foreign currency risk.
except that it is seeking to meet its monetary obligations in euro.
Linas, AB, company code 147689083, S. Kerbedžio g 23, Panevėžys
Consolidated and company‘s financial statements
For the year ended December 31, 2021 (All amounts in EUR thousands unless otherwise stated)
49
December 31, 2021 and 2020 The Group's monetary assets and monetary liabilities denominated in different currencies
were as follows (euro equivalent):
The Group
December 31, 2021
December 31, 2020
Assets
Liabilities
Assets
Liabilities
Euros
4,740
2,857
5,312
3,285
USA dollars
139
-
97
-
4,879
2,857
5,409
3,285
The Company
December 31, 2021
December 31, 2020
Assets
Liabilities
Assets
Liabilities
Euros
4,676
2,805
5,273
3,235
USA dollars
139
-
97
-
4,815
2,805
5,370
3,235
The table below shows the sensitivity to the realistic change in the exchange rate, with all other variables related to the
Group's pre-tax profit unchanged (due to the change in the fair value of monetary assets and liabilities). There is no direct
effect of exchange rate fluctuations on equity.
The Group / The
Company
Exchange rate increase
/ decrease
Impact on profit before tax (in thousands of euros) at
the end of the year
December 31, 2021
December 31, 2020
USA dollars
15,00%
(21)
(16)
USA dollars
(15,00%)
21
16
Capital management
The objective of the Group's and the Company's management policy is to maintain a significant proportion of equity in
relation to borrowed funds in order not to discredit the confidence of investors, creditors and the market, as well as to
support future business development. Management monitors the return on capital and makes proposals for the payment of
dividends to ordinary shareholders, taking into account the Company's financial performance and strategic plans. The
primary objective of capital management is to ensure that the Group and the Company comply with external capital
requirements and that they maintain appropriate capital ratios to support their business and maximize shareholder benefits.
2021 31 December The capital of the Company and the Group consisted of the authorized capital in the amount of LTL
6,971 thousand. EUR, own shares with the value of (-) 45 thousand EUR, retained earnings, other and required reserves.
According to the Law on Companies of the Republic of Lithuania, the equity of a public limited company must be at least
50%. the size of the company's authorized capital. 2021 and 2020 The Company and its subsidiaries registered in Lithuania
have complied with these requirements.
In 2021, no changes were made to capital management objectives, policies or processes.
The Group and the Company measure capital using the ratio of liabilities to equity.
The management of the Group and the Company has not set a specific target-to-equity ratio, but seeks to strike a balance
between the higher return that can be achieved with a higher level of borrowed funds and the security provided by a higher
level of equity.
Linas, AB, company code 147689083, S. Kerbedžio g 23, Panevėžys
Consolidated and company‘s financial statements
For the year ended December 31, 2021 (All amounts in EUR thousands unless otherwise stated)
50
20. Operating Expenses
The Group
The Company
December 31
December 31
2021
2020
2021
2020
Selling expenses
Expenses on commissions
(290)
(269)
(290)
(269)
Wages and salaries and social security
(260)
(189)
(260)
(189)
Evaluate of customers creditworthiness and
insurance costs of marketable credits
(23)
(19)
(23)
(19)
Expenses on productions advertising and fair
(40)
(43)
(40)
(43)
Expenses on transporting of sold production
(16)
(32)
(16)
(32)
Depreciation
(1)
-
(1)
-
Other sales expenses
(33)
(75)
(33)
(75)
(663)
(627)
(663)
(627)
General and administrative expenses
Wages and salaries and social security
(770)
(564)
(601)
(418)
Rent, operating and repairing expenses
(396)
(146)
(274)
(146)
Depreciation and amortization
(176)
(192)
(113)
(124)
Expenses of security services
(39)
(33)
(26)
(22)
Expenses of info technologies
(39)
(35)
(35)
(32)
Expenses of operating tax
(28)
(26)
(28)
(26)
Expenses of social guarantees, stated in collective
agreement
(21)
(17)
(15)
(12)
Expenses of bank services
(18)
(19)
(17)
(18)
Legal services expenses
(19)
(22)
(19)
(22)
Expenses of support provided
(7)
(16)
(7)
(5)
Telecommunications expenses
(7)
(10)
(6)
(9)
Representation expenses
(4)
(4)
(3)
(4)
Other expenses
(2120)
(188)
(215)
(161)
(1,736)
(1,272)
(1,359)
(999)
Total operating expenses
(2,399)
(1,899)
(2,022)
(1,626)
21. Other Income (Expenses)
The Group
The Company
December 31
December 31
2021
2020
2021
2020
Other activity income
Income for thermal heating supply
821
409
912
444
Income of rent
117
153
128
148
Income of various storages selling
96
313
106
327
Gains of disposals of fixed assets
-
38
27
Other incomes
49
18
73
396
1,083
931
1,219
1,342
Other activity (expenses)
Expenses for thermal heating supply
(684)
(370)
(760)
(370)
Deprecation of rent property, plant, equipment
(48)
(60)
(48)
(55)
Net cost of sold various storages
(158)
(275)
(149)
(273)
(890)
(705)
(957)
(698)
Linas, AB, company code 147689083, S. Kerbedžio g 23, Panevėžys
Consolidated and company‘s financial statements
For the year ended December 31, 2021 (All amounts in EUR thousands unless otherwise stated)
51
22. Financial activity income (expenses)
The Group
The Company
December 31
December 31
2021
2020
2021
2020
Financial activity income
Income interest of borrowings
36
38
36
38
Foreign exchange gain
16
-
16
-
Other income
4
-
4
-
56
38
56
38
Financial activity (expenses)
Expenses of interest
(42)
(40)
(42)
(40)
Loss of foreign exchange
-
(1)
-
(1)
Exchange rate loss
(13)
(12)
(9)
(9)
(55)
(53)
(51)
(50)
23. Off-balance sheet liabilities and contingencies
December 31, 2021 The Group is committed to purchase property, plant and equipment for 821 thousand Eur (0 thousand
as at December 31, 2020), which will be resold to the related company.
The Company's subsidiary UAB Lino apdaila has provided the Bank with LTL 434 thousand. Guarantees in the amount of
EUR 1,274 thousand (2020: EUR 1,274 thousand) for loans received by AB Linas. UAB Lino apdaila is obliged to fully
cover the Company's liabilities to the bank if AB Linas is unable to do so. The Group's management believes that the
Company for which the guarantee has been provided will meet its obligations to creditors. December 31 2021 and 2020 did
not record in the financial statements any liabilities relating to that guarantee.
On July 28, 2021 the Bank of Lithuania has decided to postpone the decisions on the tender offer submitted by UAB
Verslo dizainas in order to delist the shares of Linas, AB from trading on the regulated market of Nasdaq Vilnius AB, and
on the tender offer for 2006. The acceptance of the approval circulars of the acquired control of Linas, AB will be
completed by UAB Vasana and UAB Verslo dizainas until the implementation of the purchase and sale agreements of
Linas, AB shares and until the Bank of Lithuania investigates whether trading in Linas, AB shares December 20, 2019
until March 9, 2021 without prejudice to the legislation in force. The Group did not recognize any liabilities in respect of
that decision in the consolidated financial statements as at December 31, 2021.
24. Related Parties Transactions
The parties are considered related when party has to possibility to control the other or have significant influence over the
other party in making financial and operating decisions.
The related parties of the Group for the years ended 31 December 2021 and 31 December 2020 were as follows:
Members of the board of the Company: Egidijus Mikeliūnas, Vilita Skersienė, Renata Railienė.
Subsidiary company Lino Apdaila, UAB
Linas, AB, company code 147689083, S. Kerbedžio g 23, Panevėžys
Consolidated and company‘s financial statements
For the year ended December 31, 2021 (All amounts in EUR thousands unless otherwise stated)
52
The Group‘s transactions with related parties in 12 month ended 31 December 2021 and 2020 were as follow:
As at December 31, 2021
Purchases
Sales
Non-current
loan receivable
Payables
UAB „Rivena“
-
36
1,424
-
UAB „Lidera LT“
18
-
-
1,083
UAB „Verslo dizainas“
18
-
-
-
UAB “Audilina“
4,896
942
-
440
Total
4,932
978
1,424
1,523
As at December 31, 2020
Purchases
Sales
Non-current
loan receivable
Payables
UAB „Rivena“
-
36
1.388
-
UAB „Verslo dizainas“
28
-
-
1.347
Total
28
36
1388
1.347
The Company‘s transactions with related parties in 12 month ended 31 December 2021 and 2020 were as follow:
As at December 31, 2021
Purchases
Sales
Non-current
loan receivable
Payables
UAB „Lino apdaila“ (subsidiary)
1,685
153
353
UAB „Rivena“
-
36
1,424
-
UAB „Lidera LT“
18
-
-
1,083
UAB „Verslo dizainas“
18
-
-
-
UAB “Audilina“
4,896
942
-
440
Total
6,617
1,131
1,424
1,876
As at December 31, 2020
Purchases
Sales
Non-current
loan receivable
Payables
UAB „Lino apdaila“ (subsidiary)
1,414
87
-
411
UAB „Rivena“
-
36
1,388
-
UAB „Verslo dizainas“
28
-
-
1,347
Total
1,442
112
1388
1,758
A loan of 1,170 thousand Eur was granted to UAB Rivena until September 1, 2022. Interest receivable during 2021
amounted to 254 thousand Eur (218 thousand Eur in 2020).
The Group and the Company have no guarantees or pledges related to amounts payable or receivable from related parties
in December 31, 2021 (December 31, 2020 was a pledge of non-current tangible assets of UAB “Rivena” for the granted
loan).
Receivables and payables from related parties / related parties will be settled in cash or offset against amounts due /
receivable from the respective related parties / related parties.
December 31, 2021 and 2020 the annual interest rate on loans granted and received by the Company to related parties is
3%.
Transactions with related parties include the sale of goods and purchases of goods and the financing of ordinary activities
that are carried out on market terms. Interest payable is usually paid at the end of the loan agreement.
The Group's receivables and payables from related parties were not past due and impaired.
Linas, AB, company code 147689083, S. Kerbedžio g 23, Panevėžys
Consolidated and company‘s financial statements
For the year ended December 31, 2021 (All amounts in EUR thousands unless otherwise stated)
53
25. Management remuneration and other benefits
The Group's management consists of the Board of Directors and the directors of each Group company. December 31, 2021
Remuneration accrued to the Group's management (3 persons) and the Company (2 persons) amounted to 175 thousand
Euros and 147 thousand Euros (As at December 31, 2020 - 147 thousand Eur and 121 thousand Eur).
During the financial year ended December 31, 2021 and 2020 there were no other payments or transfers or accruals to /
from management, and no other loans or guarantees were received / granted.
26. Subsequent events
At March 15, 2022 UAB Rivena has completed the repayment of the entire loan and interest to the Company in accordance
with the November 19, 2014 financing agreement. The total amount of covered debt is 1,431 thousand. EUR (EUR 1,171
thousand loan and EUR 260 thousand interest). UAB Rivena no longer has any debt obligations to the Company.
March 18, 2022 The company has finished covering its long-term debt to UAB Lidera LT. During 2020 March. the entire
remaining loan was repaid - 1,080 thousand EUR and the full balance of accrued interest - 3 thousand. Eur. The company
no longer has any debt obligations to UAB Lidera LT.
On March 24, 2022, the existing overdraft agreement with Luminor Bank on 145 thousand Eur was extended until
03/10/23.
In 2022 due to the protracted raw materials crisis and the war in Ukraine, as a significant part of raw materials was
purchased from Belarus, the supply of raw fabrics is partially disrupted. There are no disruptions to the supply of yarns,
manufacturing services and auxiliary raw materials. The company has always valued alternative raw material suppliers, so
the regrouping of raw fabric supply is currently underway. The current situation does not have a significant impact on the
Company's operations.
There were no other significant events after the balance sheet events that could have a material impact on December 31,
2021 the financial statements of the Company and the Group.
The consolidated financial statements of the Group and the financial statements of the Company were approved and signed
in March 21, 2022.
.
CONFIRMED at
the meeting of the Board by
the protocol No. 8
on 08 April, 2022
„LINAS“ AB
CONSOLIDATED ANNUAL REPORT FOR THE
YEAR 2021
Linas AB consolidated annual report for the year 20
2
1
2
INDEX
1. Accounting period the annual report is covering. ............................................................................ 2
2. Companies comprising the Company Group and their contact data. ............................................. 2
3. Principal nature of activity. ............................................................................................................... 2
4. Contracts with intermediaries of public trading securities. ............................................................. 2
5. Data on trading in securities of the issuer in regulated markets. ................................................... 3
6. Fair review of entity’s position, performance and development of the entity’s business,
description of the principal risks and uncertainties that it faces. ........................................................ 3
7. Analysis of financial and non-financial performance. .................................................................... 6
8. References and additional explanatory notes regarding the date provided in the consolidated
financial statements. .............................................................................................................................. 7
9.Important events after the end of the preceding financial year. ....................................................... 7
10. Operating plans and forecasts of the Company Group. ................................................................. 7
11. Information about research and development activities of the Company Group. ........................ 7
12. Environment control. ...................................................................................................................... 7
13. Information about financial risk management objectives, its measures for hedging major types
of forecasted transactions for which hedge accounting is used, and the Company Group’s
exposure to the cope of price risk, credit risk, liquidity risk and cash flow risk where the Company
Group uses financial instruments and where this is of importance for the evaluation of the
Group’s assets, equity capital, liabilities, financial position and performance results. ..................... 8
14. Main features of internal control and risk management systems of Group of companies in
relation with consolidated financial reports preparation..................................................................... 8
15. Information about branches and representative offices of the Company. .................................... 8
16. Issuer’s structure of authorised capital and encumbrances for transfer/disposal of said
securities. ............................................................................................................................................... 8
17. Information about the own shares acquired and held by the Company and the Group and the
same acquired and transferred during the reporting period. .............................................................. 9
18. Shareholders. ................................................................................................................................... 9
19. Employees. ..................................................................................................................................... 10
20. Procedure for amendment of the Articles of association of the Issuer. ...................................... 10
21. Management bodies of the Issuer ................................................................................................. 10
22. Data about the Supervisory Council members, Board members, Audit committee members and
administration of the Company........................................................................................................... 14
23. All material agreements to which the Issuer is a party and which would come into effect, be
amended or terminated in case of change in the issuer‘s control, also their impact except the cases
where the disclosure of the nature of the agreements would cause significant damage to the Issuer15
24. All agreements of the Issuer and the members of its management bodies or the employee
agreements providing for a compensation in case of the resignation or in case they are dismissed
without due reason or their employment is terminated in view of the change of control of the
Issuer. ................................................................................................................................................... 15
25. Information on the significant transactions between related parties. ......................................... 15
26. Information about signed bad contracts (which are not corresponding the goals, present
common market conditions, breaking the interest of shareholders or interest of other persons, etc.)
of the company in the name of inssuer during the accounting period, which had or in future will
have negative influence on the activity of issuer and (or) activity results, also the information
about the contracts which were signed during the conflicts between issuer managers, controlling
shareholders or other related parties obligations for issuer and their private interest and (or) other
obligations. ........................................................................................................................................... 15
27. Information on the compliance with the corporate governance code. ........................................ 16
28. Data about publicly disclosed information. .................................................................................. 16
Linas AB consolidated annual report for the year 20
2
1
2
1. Accounting period the annual report is covering.
The AB „Linas“ consolidated annual report has been prepared for the year 2021.
2. Companies comprising the Company Group and their contact data.
Principal Company data
Name AB „Linas“ (hereinafter the Company)
Authorised (share) capital 6,971,307.10 Eur
Domicile address S. Kerbedžio g. 23, LT-35114 Panevėžys
Telephone (8-45) 506100
E-mail address office@linas.lt
Webpage www.linas.lt
Legal-organisational form Public Limited Liability Company
Date and place of registration 08-03-1993, Company Register/ City of Panevėžys
Company registration number 003429
Date and place of re-registration September 9, 2004, Register of Legal Persons,
Registration Certificate No. 003429.
Company code 1476 89083
VAT code LT476890811
Legal Entity Identifier
(LEI) code 52990054JBNAT4BLVY62
Principal subsidiary data
Name UAB „Lino apdaila“
Authorised (share) capital 2,896 Eur
Domicile address S. Kerbedžio g. 23, LT-35114 Panevėžys
Telephone (8-45) 506111
E-mail address office@linas.lt
Legal –organisational form Private Limited Liability Company
Date and place of registration May 23, 2008 Register of Legal Persons, Registration
Certificate No. 114552
Company code 3017 33421
VAT code LT100004113316
3. Principal nature of activity.
Principal nature of activity is production of textile products and sales.
On December 31, 2021 the Group of companies was comprised of AB “Linas” and its
subsidiary company UAB “Lino apdaila”. AB “Linas” holds 100% shares of the subsidiary
company. The activity of AB “Linas” is sales of linen textile items; other activity of AB “Linas” -
management of financial asset (shares and granted loans), supply of the thermal energy,
rental of
property. The activity of the textile products production is carried out at the subsidiary company
UAB „Lino apdaila“.
4. Contracts with intermediaries of public trading securities.
On August 24, 2018 AB “Linas” has signed the service contract with the Šiaulių bankas AB
(company code 112025254, Tilžės str.149, Šiauliai) regarding the management of company’s stock
accounting.
Linas AB consolidated annual report for the year 20
2
1
3
5. Data on trading in securities of the issuer in regulated markets.
The total of 24,038,990 ordinary registered shares (ISIN code LT0000100661) the total
nominal value of which is 6,971,307.10 Eur have been on the Baltic trading secondary list of the
Vilnius Securities Exchange (VVPB symbol – LNS1).
6. Fair review of entity’s position, performance and development of the entity’s business,
description of the principal risks and uncertainties that it faces.
Business continuity or liquidity risk relates to an organization’s ability to continue as a
going concern now and in the foreseeable future. The Company's management assessed the potential
disruption of cash flows, funding sources, the impact on demand for goods and services, the risk of
contamination of critical personnel and the risk of project delays by analyzing all available future
information on Covid-19 at the time of preparing this annual report. circumstances that may cast
doubt on the Group's going concern. 2021 the pandemic had an indirect positive effect as demand for
natural fibers increased and supply chains were shortened.
2022 due to the protracted raw materials crisis and the war in Ukraine, as a significant part
of raw materials was purchased from Belarus, the supply of raw fabrics is partially disrupted. There
are no disruptions to the supply of yarns, manufacturing services and auxiliary raw materials. The
company has always valued alternative raw material suppliers, so the regrouping of raw fabric
supply is currently underway. The current situation does not have a significant impact on the
Company's operations.
2021 sales to customers in Ukraine, Belarus and Russia totaled only 0.03%.
The Group constantly evaluates alternative suppliers of manufacturing services, therefore, in
case of unfavorable situation due to the continuity of the activities of current suppliers of
manufacturing services (weaving and fabric processing), it has prepared a list of alternative suppliers
of manufacturing services. Potential suppliers of production services are evaluated not only in
Lithuania, but also outside Lithuania.
The Group has no financial liabilities that depend on the needs of the creditor, i.e. on
demand. Also, no lawsuits are currently pending, so there are no negative consequences for financial
obligations arising or likely to arise from an unfavorable court decision.
The only company with a guarantee (surety) for the Company's liabilities is the subsidiary
UAB Lino apdaila. The risk of business continuity of the subsidiary is minimal, therefore the
possibility of loss of the guarantee is minimal.
The amount of the Group's equity is constant and sufficient. No significant changes in the
amount of equity are expected.
In 2021, in continue of pandemy, raw materials crisis and war in Ukraine, according
forecast of activities it wouldn’t increase risk of business continuity.
The company has an emergency management commission.
By default, without assessing the outbreak of the COVID-19 virus, the Company manages
liquidity risk by planning cash flows, which facilitates cash management and, in the absence of cash,
the choice of financing method.
The company's conservative liquidity risk management allows it to maintain the required
amount of cash, and the company seeks to maintain funding flexibility. In a company, liquidity risk
management includes cash flow forecasting. The more detailed and accurate this forecast, the better
the firm manages liquidity. Deferred payment for goods sold is from 14 to 30 days, in rare cases up
to 60-90 days. Suppliers of services and goods are settled in an average of 30 days, and suppliers of
raw materials in 0-30 days. This cash flow forecast predicts the nearest cash receipts and payments
and allows you to plan short-term borrowing and investing money. At the end of the current year, the
budget for the following year is drawn up. Long-term forecasting (over a year) is part of strategic
business planning. These cash flow projections provide information about the amount of cash surplus
and demand, when there will be a cash surplus or demand, how long the period of cash surplus or
additional demand will last, how the cash surplus will be used or the demand will be financed.
Linas AB consolidated annual report for the year 20
2
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4
Risk factors related to the activities of the issuer:
Business risk. It is a group of risks related to the environment in which the Company
operates and influences the financial results of the Company: the Company's competitiveness in
comparison with other manufacturers of products.
The Company faces business risk in its environment. Business risk is more related to the
environment in which the Company operates and affects the Company's financial performance,
which is the Company's competitiveness; economic viability of the Company's major customers; the
political and economic environment in the European Union; legal regulations for the purchase of the
main raw material.
The rise in the price of energy (gas and electricity) and the growth of wages have an impact
on the Company, as production costs are rising, as are the costs of importing raw materials and
transporting products.
By reducing the above-mentioned risks, the company streamlines production by digitizing
and standardizing workplaces; improves planning processes; optimizes logistics routes.
Competitive risk. The Company faces competitive risks in the domestic and export
markets, which is why the Company's primary objective is to increase sales to large dealers,
supermarkets to produce large batches of recurring products and thus reduce production costs.
The Company faces the main financial risks, which are market risks, which can be divided
into three parts: interest rate risk, exchange rate risk and commodity price risk, as well as liquidity
risk and credit risk.
Currency risk. The Company operates internationally and is therefore exposed to currency
risk. In international business, the company settles accounts in foreign currencies, which exposes it
to exchange rate risk, which is mainly related to US dollars. Exchange rate risk arises from the
purchase of raw materials from China as well as the export of products to the United States and other
countries settling for goods in a currency other than the Company's functional currency. The main
currency in which the Company reports is Euro.
The Company's operating income and expenses are largely independent of changes in
market interest rates. However, the Company faces interest rate risk due to long-term loans. In order
to determine the impact of interest rates on the Company's results of operations, it is necessary to
identify the positions that give rise to interest rate risk. Assets and liabilities that are sensitive to
changes in interest rates include actual transactions of the Company such as: investments, loans
granted and any other on-balance-sheet and off-balance-sheet transactions that are subject to fixed or
variable interest rates and are positively correlated with interest rate fluctuations. The Company does
not use any financial instruments to hedge against interest rate risk.
Credit risk. In order to avoid customer / buyer non-payment, before signing the contract of
sale or sale, the responsible manager or market manager minimally checks the financial / economic
situation of the Buyer in public sources (various bases, registers, etc.). Concentration of buyers may
affect the Company's overall credit risk as these buyers may be similarly exposed to changes in
economic conditions. The company has procedures in place (1 pic.)to ensure that sales are made
within the accepted credit risk limits, that is, the company evaluates the reliability of each customer
when selling or purchasing goods or services. Sales of products (unloading of goods) within the
company are started if there is a 90-100% payment guarantee. The company has various payment
methods / guarantees, such as: 100% prepayment; pledging of liquid real estate (value is determined
by property appraisers); Bank Guarantor (Bank Guarantee - a security for a settlement, but not a
settlement instrument. It is triggered when a payment is not made); documentary letter of credit (L /
C); mostly used trade credit limit insurance; collection of documents.
Linas AB consolidated annual report for the year 20
2
1
5
1 pic. Geagraphy of the Company‘s sales in 2021
The company pays for the goods and services purchased on time, and evaluates, ranks,
determines their reliability, i.e. what kind of hedging they can require, credit line and intraday credit,
and constantly monitors their payments. Because this type of risk is extremely well-managed, the
company does not have any major new bad debts and can therefore plan its cash flow more easily.
Purchasing and supplier risks. Purchases of goods (basic, auxiliary materials, parts,
equipment, etc.) and services in the company are carried out through public and restricted tenders or
by sending inquiries to suppliers of services or goods. The supplier of the goods or services is usually
selected from at least two offers submitted. The Company has procedures for identifying and
analyzing purchasing and supplier risk factors.
Reputation risk. These risks are related to the decisions made by the Company and the
behavior of employees.
Reputational risk is important to the company. The company values its reputation and
reputation and takes measures to reduce reputational risk. The Company approved a Code of Ethics.
The Code of Ethics would establish standards of conduct for all Group employees, regardless of their
position, scope of employment, etc.
Operational risk. It is the widest group of risks covering the risks related to the activities
within the Company, including the safety, reliability, legal basis, and security of internal processes
and operations.
Operational risk is the risk of an increase in loss, loss of goodwill, loss of confidence, which
may be caused by external environmental factors (eg natural disasters, criminal acts of third parties,
etc.) or internal factors (eg inefficiency and management, use, deficiencies in internal control,
ineffective procedures, malfunctions of information systems, inadequate allocation of functions or
responsibilities, etc.).
In order to manage operational risk, the Company implements appropriate organizational
measures, procedures and information systems supporting business processes, all of which must
ensure the proper functioning of the internal control system and proper cooperation with related third
parties. The Company applies the following key elements of internal control: separation of business
decision making and control functions, procedures for controlling the accounting of operations
execution, limits and control of decision-making powers, making collegial decisions in business
processes and so on.
Representatives of potential and existing clients visited the company to carry out
independent audits and positively evaluate the state of the existing infrastructure, the organization of
Linas AB consolidated annual report for the year 20
2
1
6
key operational and safety processes, the cooperation with interested third parties and the control
system established.
The preparation of the Company's financial statements, internal control and financial risk
management systems, and compliance with legal acts governing the preparation of financial
statements are overseen by the Audit Committee. The Company is responsible for overseeing the
preparation of the financial statements.
7. Analysis of financial and non-financial performance.
Indicators
The Group
2021
The Group
2020
Net profitability (net profit/sales * 100)
6.27%
3.66%
Return on equity ROE (net profit/equity)
0,11
0,06
Debt ratio (liabilities/assets)
0,22
0,28
Turnability of assets (sales/assets)
1.3
1.2
Book value of shares (equity/number of shares)
0.41
0.36
Net profit (loss) (thou. Eur)
1,050
512
EBITDA (mln. Eur)
(earnings before interest + interest expense +
depreciation and amortization)
1.457
0.770
Profit per share
0.044
0.021
Lowest share price (Eur)
0.107
0.09
Highest share price (Eur)
0.2
0.121
Closing price (Eur)
0.14
0.121
Capitalisation (mln. Eur)
3.37
2.91
Net profitability indicator help to estimate company’s gain to shareholders/investitors. Return
on equity ROE indicator shows how effectively is using company’s equity. Debt ratio indicator
shows opportunities of Group’s short-term and long-term solvency to shareholders and investitors.
Turnability of assets shows efficiency of activity. EBITDA indicator shows Profit without influence
of capital structure, profit tax and influence of depreciation and amortization. Profit per share
indicator is Profit indicator in respect from shareholders.
The range pf the pure linen fabrics accounted for 90.2 % of the total products produced in
2021 (in 2020 – 86.7 %). In 2021 19.3 % of the total fabrics produced were used for sewing articles
(in 2020 – 23.2 %).
In 2021 the Company Group had 1,244 thou. Eur profit before taxes, and taking into account
the taxes the net profit of the Group was 1,050 thou. Eur. On 2020 the net profit of the Group was
512 thou. Eur.
Export (out of Lithuania borders) volumes during year 2021 made 74.6 % of all sold
production. Geographically sales is as follows: Lithuania – 25.6 %, Sweden – 10.3%, Great Britain –
10.1 %, Latvia – 8.9 %, Finland – 6.8 %, Japan – 6.7%, Spain – 5.1 %, USA – 3.7 %, Denmark and
Germany – 3.4 % each, Poland – 2.7%, France – 2.2 % and other countries – 9.9 %.
During 2021 it was bought 46 tons of cotton yarns: 97% from the Lithuanian suppliers and
3% from Germany. During 2021 it was purchased 333 tons on linen yarn, which was purchased from
Chinese (4 companies) suppliers – 67.1 % , Lithuanian (4) suppliers - 20%, Italian (4) suppliers –
6.9%, Dutch (2) suppliers - 2.5 % each and remaining 0.8% from Polish, Spanish, British and USA
suppliers.
Linas AB consolidated annual report for the year 20
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1,599 thou. m of raw fabric was bought in 2021, 95 % of it – from Belarus, 3 % from
Lithuania, from Portugal 1%. Pilot purchases of raw materials were made from suppliers in the
Netherlands, Latvia and Estonia.
2021-12-31 Group had any debts to the banks and 1,080 thou. Eur long-term debts to others
lenders.
On 2021-12-31 the sum of AB “Linas” granted loans with interests made 1,424 thou. Eur.
8. References and additional explanatory notes regarding the date provided in the
consolidated financial statements.
The financial statements have been prepared following the International Financial Accounting
Standards. The data provided in the annual financial statements and in the explanatory note are
sufficient and comprehensive.
9.Important events after the end of the preceding financial year.
At March 15, 2022 UAB Rivena has completed the repayment of the entire loan and interest
to the Company in accordance with the November 19, 2014 financing agreement. The total amount
of covered debt is 1,431 thousand. EUR (EUR 1,171 thousand loan and EUR 260 thousand interest).
UAB Rivena no longer has any debt obligations to the Company.
March 18, 2022 The company has finished covering its long-term debt to UAB Lidera LT.
During 2020 March. the entire remaining loan was repaid - 1,080 thousand EUR and the full balance
of accrued interest - 3 thousand. Eur. The company no longer has any debt obligations to UAB
Lidera LT.
On March 24, 2022, the existing overdraft agreement with Luminor Bank on 145 thousand
Eur was extended until 03/10/23.
In 2022 due to the protracted raw materials crisis and the war in Ukraine, as a significant part
of raw materials was purchased from Belarus, the supply of raw fabrics is partially disrupted. There
are no disruptions to the supply of yarns, manufacturing services and auxiliary raw materials. The
company has always valued alternative raw material suppliers, so the regrouping of raw fabric
supply is currently underway. The current situation does not have a significant impact on the
Company's operations.
10. Operating plans and forecasts of the Company Group.
In 2021 the Group of Linas, AB plans to supply linen products to customers which put value
upon combination of naturalness and modernity. Companies of the Group will vouch for reliable
partnership with customers and suppliers, also will vouch for safe environment to employees as
before. The main objectives of the Group are: to increase volume of sales, expanding market in
foreign countries and Lithuania, and to decrease cost price of production, optimizing expenses of
production and activity costs, buying cheaper raw materials.
11. Information about research and development activities of the Company Group.
The Company Group was not carrying out activities related to research and development.
12. Environment control.
The items, which are produced by AB „Linas“ Group of companies, are ecological, non-
waste product which is not making harmful effect for nature and ecologic. The Group is working
acc.to internationally acknowledged quality requirements corresponding to OEKO-TEX 100
standard.
AB “Linas” Group of the Companies is executing it’s activity acc.to BAPM (the best
accessible production methods) requirements. The Group constantly observe its indicators, executing
Linas AB consolidated annual report for the year 20
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water taking, sewage and air pollution monitoring, planning and implementing investments, which
allow to decrease production and activity expenses and energetic costs and improve environmental
control of the Group.
All secondary wastes which form in the company – glass, metal, packages of paper and
carton, plastic packages and others – are being sorted and passed to the waste administering
companies acc.to the signed contracts.
The possibility to limit company’s activity or to stop it regarding the influence on the
surrounding is very small.
13. Information about financial risk management objectives, its measures for hedging
major types of forecasted transactions for which hedge accounting is used, and the Company
Group’s exposure to the cope of price risk, credit risk, liquidity risk and cash flow risk where the
Company Group uses financial instruments and where this is of importance for the evaluation of
the Group’s assets, equity capital, liabilities, financial position and performance results.
The Company Group was not using the financial instruments which are of importance for the
evaluation of the Group’s assets, equity capital, financial position and performance results.
14. Main features of internal control and risk management systems of Group of companies
in relation with consolidated financial reports preparation.
The audit committee is supervising the preparation of consolidated financial reports,
management systems of internal control and financial risk, observation law regulations which
regulate preparation of consolidated financial reports.
The application of internal control measures of the Group are indicated by separate orders of
the manager, other internal documents. The managers of the Group, through the long job experience,
know very well the specific of the activity and risk fields. All this allows to implement sufficient
level internal control system in the company.
Financial reports of the Group are prepared acc.to International financial accountability
standards (TFAS) confirmed by EU. The same internal control organization and accounting
principles are applied for all companies of the Group. When preparing these consolidated financial
reports, all inter operation between the Group and balance remainders of the accounts and unrealized
profit (losses) from the contracts between the Group of companies are being eliminated.
Responsible accounting employees constantly checking International financial accounting
standards (TFAS), analyzing contracts which are significant for the activity of the company and the
Group, ensuring timely and correct processing of collected information and its preparation for
financial accountability.
15. Information about branches and representative offices of the Company.
The AB „Linas“ does not have any branches or representative offices.
16. Issuer’s structure of authorised capital and encumbrances for transfer/disposal of said
securities.
The authorised capital registered in the company register of the Republic of Lithuania is equal
to 6,971,307.10 Eur.
The structure of the authorised capital of the AB „Linas“ according to types of shares is as
below:
Linas AB consolidated annual report for the year 20
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Type of shares Number of
shares
Nominal value
(Eur)
Total nominal
value
Percentage in
the authorised
capital
Ordinary registered
shares
24,038,990 0.29 6,971,307.10 100.00
Total: 24,038,990 - 6,971,307.10 100.00
All shares of the AB „Linas“ have been paid in full and they are not subject to any
encumbrances for transfer/disposal of said securities.
The shares of the Company present the same property and non-property rights and liabilities
according to the indications of Joint Stock Company’s law.
17. Information about the own shares acquired and held by the Company and the Group
and the same acquired and transferred during the reporting period.
In 31
st
December 2021, Company has acquired 450,000 pieces of own shares or 7.64% of all
shares.
18. Shareholders.
The total number of shareholder of the AB „Linas“ as for December 31, 2021 was 1,203.
The shareholders holding or in command of more than 5 per cent of the authorised capital of
the Company as for December 31, 2021 were:
Shareholder‘s name, surname,
company‘s name, type, domicile
address, code in the Register of
Enterprises)
Number of
ordinary
registered shares
held on property
ownership right
(pcs.)
Percenta-ge of
authorised capital
held
Percentage of
votes granted by
the shares held on
property
ownership right
Asociacija
„EEEE“, Savanorių pr. 192,
Kaunas,
company c
ode
302572729
5,564,579 23.15% 23.59%
UAB „Verslo dizainas“, Savanorių pr.
192, Kaunas, company code
302529076
4,807,800 20.00% 20.38%
UAB „Vasana“, Partizanų g. 216-77,
Kaunas,
company code
305457041
4,755,318 19.78% 20.16%
„Rivena“, UAB, P. Žadeikos g. 13-35,
Vilnius,
company code
302521510
2,423,030 10.08% 10.27%
The Company has not been notified any agreements between the shareholders due to which
the transfer of securities and/or voting rights could be encumbered.
The Company has not information about shareholders which are acting together.
None of the shareholders of the Company have any special control rights. All shareholders
have equal rights, so the number of shares of the AB „Linas“ carrying votes at the general meeting of
shareholders is 25,588,990 (own shares does not have voting rights).
Linas AB consolidated annual report for the year 20
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19. Employees.
The average listed number of employees in AB „Linas“ Group of companies was 120
employees on year 2021. On 2020 this average was 133. During the year the average number of
employees decreased by 7 or 6.2 %.
Employees 2021 2020
Average
conditional
number of
employees
Average
salary/wage,
Eur
Average
conditional
number of
employees
Average
salary/wage,
Eur
Management personnel
8 2,579 6 2,433
Specialists and clerks
31
1
,
434
34
1
,
14
9
Workers
81 884 73 828
Total
120
1,113 113 1,014
The salary for the group’s employees was paid acc.to the regulations of Lithuanian Republic
Labour codex and juridical acts implementing those regulations, to the confirmed labour payment
regulations, to the employees’ work and safety acts and other Lithuanian Republic juridical acts.
Average calculated wage in 2021 was 1,143 Eur and compared to 2020 increased by 13 % (in 2020 –
1,014 Eur).
The Collective Agreement in AB „Linas“ Group of companies indicates:
1.One-off irretrievable pay is paid:
-when employee of the company dies and the family of employee grows children (adoptee)
till 18 years old, also the oldest if they are studying at secondary schools at day shift, at professional
or higher schools at day shift (including the period of academic holidays), but no longer till 24 – 6
base social pays;
-when spouse of company’s employee dies and the family of employee grows children
(adoptee) till 18 years old, also the oldest if they are studying at secondary schools at day shift, at
professional or higher schools at day shift (including the period of academic holidays), but no longer
till 24 – 6 base social pays.
2.Additional paid holidays:
up to 3 calendar days in case of death of a family member (parents, husband, wife, child,
brother, sister);
-1 calendar day for the marriage.
3. The employees who must undergo compulsory medical examination shall be paid average
wage for the time spent for such medical check-up. The employer shall also cover all the costs
related to such medical checkups.
20. Procedure for amendment of the Articles of association of the Issuer.
The Law on Companies of the Republic of Lithuania provides that the right to amend the
Articles of Association shall be vested exclusively in the general meeting of shareholders. Adoption
of amendment of the Articles of Association requires 2/3 majority vote of the shareholders attending
the meeting.
21. Management bodies of the Issuer
As determined by the Articles of Association of the AB „Linas” the management bodies of
the Company are:
General meeting of shareholders;
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Supervisory Council of AB „Linas“;
The Board of the AB „Linas”;
Head (Director) of the AB „Linas”.
The Supervisory Council shall not be formed.
General meeting of the shareholders is the highest body of the company.
Only General meeting of the shareholders has the right to:
-change the regulations of the company, except the exceptions indicated by Joint Stock
Company’s law of Lithuanian Republic;
-to elect and revoke members of the Supervisory Council;
-to elect and revoke a certified auditor or audit firm intended to carry out an audit of a set of
annual financial statements, to establish terms and conditions of payment for audit services;
-to approve the set of annual financial statements;
-to confirm the set of intermediate financial reports which is done in order to achieve the
decision regarding the pay of dividends for the period shorter than financial year;
-to make a resolution on allocation of dividends for a period of less than a financial year;
-to take the decision to increase the authorized capital;
-to indicate the shares class, number and nominal value of issued company’s shares and the
minimal price of the emission;
-to take the decision to cancel the priority right to all shareholders to obtain company’s shares
of concrete emission or convertible bonds;
-to take the decision to decrease authorized capital, except the exceptions indicated in Joint
Stock Company’s law of Lithuanian Republic;
-to take the decision to issue convertible bonds;
-to take the decision to convert company’s one class shares into the other class, to confirm the
order of shares convert;
-to take the decision to obtain own shares for the Company;
-to take the decision to liquidate the company, to cancel the liquidation of the company,
except the cases indicated in Joint Stock Company’s law of Lithuanian Republic;
-to elect and to cancel company’s liquidator, except the cases indicated in Joint Stock
Company’s law of Lithuanian Republic;
-to take the decision regarding company’s reorganization or separation and to confirm the
conditions of reorganization or separation;
-to take the decision to reorganize the company;
-to take the decision to shake-up the company;
-to take the decision regarding the allotment of profit (loss);
-to take the decision regarding the reserves making, using, decreasing or cancelling.
General Meeting of shareholders can also solve other questions, which are not attributed to
the competence of other company’s bodies according to Joint Stock Company’s law of Lithuanian
Republic, and if they are not the function of other managing bodies.
The call order of General meeting of shareholders of the company doesn’t differ from the
order indicated in Joint Stock Company’s law of Lithuanian Republic.
The Supervisory Council is a Collegial Body supervising company’s activities. The
Supervisory Council is headed by a chairman. The Supervisory Council shall be composed of 3
members. The Supervisory Council shall be elected and revoked by the general shareholders’
meeting. The procedure of election and revocation of the Supervisory Council shall agree with
provisions of the Law on Companies of the Republic of Lithuania.
The Supervisory Council shall be appointed for a four-year period. The Supervisory Council
shall perform its functions within the period fixed in the Articles of Association or until a new
Supervisory Council is elected, but not longer than until the ordinary general shareholders’ meeting
that is held in the year of expiry of cadence of the Supervisory Council. Number of cadences of a
member of the Supervisory Council is not limited. The Supervisory Council shall elect a chairman of
the Supervisory Council of its members.
Linas AB consolidated annual report for the year 20
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The members of the Supervisory Council for their activity can get the bonuses acc.to the
order indicated in the article No.59 of the law of Stock Companies. Competence and decision-
making of the Supervisory Council shall agree with provisions of the Law on Companies of the
Republic of Lithuania.
The order of call of the Supervisor‘s Meeting, voting in the Meeting of the Supervisor‘s
Council and acceptance of decisions is not differ from the one which is indicated in the law of stock
companies of Lithuania Republic. The meetings of the Supervisory Council should be recorded.
The procedure of work of the Supervisory Council shall be established by the rules of
procedure adopted by the Supervisory Council.
The Board is the collegial management body of the company. The Board is elected by
Supervisory Council according to the order indicated in Joint Stock Company’s law of Lithuanian
Republic. If single members of the Board are elected, so they are elected only up to the end of
existing Board cadence. The Board consists of 3 members for 4 years. The chief of the Board is
elected by the Board from its members. The working order of the Board is indicated in the accepted
work regulation of the Board.
Supervisory Council can cancel all the Board or its single members if there cadence is still
not over. The member of Board can resign from his post even if the cadence is still not over and to
inform the company in written not later 14 days.
The competence of the Company’s Board the procedure of it election and dismissal are not
different from the same provided for in the Law on Companies of the Republic of Lithuania.
The Board shall consider and confirm:
Activity strategy of the Company;
Activity report of the Company;
Organisation/management structure of the Company and list of positions;
List of positions to which the employees are admitted following selection procedure;
Regulations of branches and representative offices of the Company.
The Board shall elect the head of the Company and fix his salary, other terms and conditions
of the employment contract with him, confirm his job description, apply motivation and disciplinary
measures.
The Board shall decide on the information to be treated as commercial (production) secret of
the Company.
The Board shall adopt:
Decisions on becoming the founder or member of other legal persons;
Decisions on establishing branches and representative offices of the Company;
Decisions regarding the buying of long-term asset, investment, transfer, lease,
mortgage and hypotec;
Decisions regarding the sponsion or guarantee of liabilities execution of other;
Decisions regarding the support providing;
Decision to reorganise the Company in cases provided for in Law on Reorganisation
of Companies;
Other decisions attributed to the competence of the Board by the Articles of
Association or by resolutions of the General meeting of shareholders;
Before investing the funds or other assets into other legal persons the Board must notify the
creditors with who the Company has not settled accounts in the event the total outstanding amount to
such creditors is exceeding 1/20 of the authorised capital of the Company.
The Board shall analyse and assess the materials presented by the head of the Company
concerning:
Implementation of the strategy of Company’s activities;
Organisation of company’s activities;
Financial condition of the Company;
Linas AB consolidated annual report for the year 20
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Results of business activities, budgets for income and expenses, data of stocktaking
and other changes related to assets of the Company;
A project of a set of company’s annual and interim financial statements as well as a
project of distribution of profit (losses) and submit them to the Supervisory Council and the general
shareholders’ meeting accompanied by comments, relevant offers, and the annual report of the
company;
A project of allocation of dividends for the period of less than a financial year and a
set of interim financial statements submitted for its approval, and submit them to the Supervisory
Council and the general shareholders’ meeting accompanied by comments, relevant offers, and the
interim report of the company.
The competence of company’s director, the order of his election or cancelation is not differ
from the order indicated in Joint Stock Company’s law of Lithuanian Republic.
Director of the company:
-organizes daily activity of the company, hires or fires employees, makes and terminates job
contracts with them, motivates employees or signs penalties for them;
-acts in the name of the company and has the right to sign contracts autocratically;
-has to secure company’s commercial (production) secrets which he knew being at this post;
-represents the company at the court, in relationships with other juridical and physical
persons;
-presents the authorization to other persons to execute ions which are at his competence;
-perform other functions established by the laws, other regulations of the Republic of
Lithuania as well as by company’s Articles of Association and job descriptions.
Director of the company is responsible for:
-organization of company’s activity and execution of its goals;
-preparation of the set of annual financial statements and the annual report of the company;
-preparation of a resolution on the project of allocation of dividends for the period of less
than a financial year, preparation of the set of interim financial statements and the interim report
intended to adopt the resolution on the project of allocation of dividends for the period of less than a
financial year;
- conclusion of an agreement with an auditor or an audit firm;
-presentation of information and documents for General Meeting of shareholders, for the
Supervisory Council, for the Board, in the cases indicated in Joint Stock Company’s law of
Lithuanian Republic or according their request;
-presentation of company’s documents and data to the manager of juridical persons register;
-presentation of company’s documents to the Securities Commission and to Central Security
Depository of Lithuania;
-public announcement of information, indicated in Joint Stock Company’s law of Lithuanian
Republic, in newspaper „Lietuvos rytas”;
-presentation of information to shareholders;
-presentation of all necessary documents which are indicated in the contract with an auditor
or an audit company for concrete inspection;
-other post execution indicated in Joint Stock Company’s law of Lithuanian Republic and
other laws and regulations, also in regulations of the company and in job description of company’s
manager.
According to the decision of General meeting of Shareholders the Audit committee is formed
at AB „Linas“. Company’s Audit committee consists of three members, two of which should be
independent. General Meeting of shareholders elect or cancel members of Audit committee
according to the offer of company’s Board. The cadence period of audit committee – four years.
Continuous cadence period of the member of Audit committee could not be longer than twelve years.
Main duties of Audit committee:
Linas AB consolidated annual report for the year 20
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-to present recommendations to company’s Supervisory Council in relation with selection,
nomination, repeated nomination and cancellation of external audit company and to present the
contract conditions with audit company;
-to watch the execution process of external audit;
-to watch how external auditor keeps to the principles of objectivity and independence;
-to watch the preparation process of company’s financial reports;
-to watch the system effectiveness of Company’s internal control, risk management and
internal audit, if it is working in the company;
-to execute other functions indicated in Lithuanian Republic laws and to keep to provided
recommendations of management codex of companies listed at Vilnius NASDAQ OMX.
22. Data about the Supervisory Council members
,
Board members, Audit committee
members and administration of the Company.
V
IRGINIJUS KUNDROTAS
– independent member of the Supervisory Council.
Director of UAB “Integral Leadership Initiatives” (company code 302339130, M. Sederavičiaus St.
11, Kaunas). Head of Baltic Management Development Association (company code 135963288, E.
Ožeškienės St. 18, Kaunas). Does not hold shares of the Company.
D
ARIUS KAZLAUSKAS
– independent member of the Supervisory Council. Commercial
Director of UAB “Parnidis” (company code 300080024, Kampo g. 25-40, Kaunas). Does not hold
shares of the Company.
A
RŪNAS
K
ETRYS
– independent member of the Supervisory Council.
Deputy director of Alba UAB (company code 132713272, Neries kr. 16, Kaunas). Does not hold
shares of the Company.
Members of the Supervisory Council were elected on April 30, 2021 by the General meeting
of shareholders for four periods in office.
E
GIDIJUS
M
IKELIŪNAS
– Chairman of the Board and head of finance departament. Holds 0,1
% shares of the Company
V
ILITA
S
KERSIENĖ
– member of the Board. Head of administration of the Company – The
Director. Does not hold shares of the Company.
R
ENATA
R
AILIENĖ
– member of the Board. Head of administration of the subsidiary UAB
“Lino apdaila” – The Director. Does not hold shares of the Company.
Members of the Board were elected on July 09, 2021 by the Supervisory Council for four
periods in office.
I
NDRĖ
G
EČIAUSKIENĖ
– chief of accountant of the Company until April 16, 2021. Does not
hold shares of the Company.
I
RMA
Š
LEKYTĖ
– chief of accountant of the Company since April 26, 2021 until March 15,
2022. Does not hold shares of the Company.
V
ANDA
N
EKRAŠAITĖ
– chief of accountant of the Company until April 10, 2020. Does not
hold shares of the Company.
I
NDRĖ
G
EČIAUSKIENĖ
– chief of accountant of the Company since December, 2020. Does
not hold shares of the Company.
The members of the management bodies of the AB „Linas“ have never been convicted for
property, business or financial offences.
Information about total amounts and averages per person of the salaries and annual payments
from profit paid during the reporting period to the members of the Supervisory Council, the Board
and head of administration (head of administration of the Company and chief of accountant of the
Company):
Linas AB consolidated annual report for the year 20
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Indicator
Salary for 20
21
(Eur)
Payment from
profit for 2021
(Eur)
Other
payments from
profit (Eur) Total (Eur)
Average per member of the
Supervisory Council
- - - -
Total for all members of the
Supervisory Council
- - - -
Average per member of the Board
-
-
-
-
Total for all members of the
Board
- - - -
Average per member of
administration
73,524 - - 73,524
Total for all members of
administration
147,048 - - 147,048
Members of Audit committee were elected for four years cadence during General meeting of
shareholders on April 30, 2021. Authorizations are granted to the members of Audit committee and
their executing functions are according to regulations of Audit committee.
A
NA
S
IRIENĖ
– independant member of Audit committee. Head of committee. Certified
Internal Auditor. MB ELSAN Owner. Does not hold shares of the Company.
L
INA
B
ELICKIENĖ
– independant member of Audit committee. Senior accountant of
Panevežio miesto greitosios medicinos pagalbos stotis UAB since year 2008. Does not hold shares of
the Company.
L
INA
L
IESYTĖ
– member of Audit committee. Senior accountant of AB “Linas” since year
2008. Does not hold shares of the Company.
23. All material agreements to which the Issuer is a party and which would come into
effect, be amended or terminated in case of change in the issuer‘s control, also their impact except
the cases where the disclosure of the nature of the agreements would cause significant damage to
the Issuer
None.
24. All agreements of the Issuer and the members of its management bodies or the
employee agreements providing for a compensation in case of the resignation or in case they are
dismissed without due reason or their employment is terminated in view of the change of control
of the Issuer.
None.
25. Information on the significant transactions between related parties.
Information on the transactions between the related parties is provided in section 24 of the
explanatory notes to the financial statements.
26. Information about signed bad contracts (which are not corresponding the goals,
present common market conditions, breaking the interest of shareholders or interest of other
persons, etc.) of the company in the name of inssuer during the accounting period, which had or
in future will have negative influence on the activity of issuer and (or) activity results, also the
information about the contracts which were signed during the conflicts between issuer managers,
Linas AB consolidated annual report for the year 20
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controlling shareholders or other related parties obligations for issuer and their private interest
and (or) other obligations.
None.
27. Information on the compliance with the corporate governance code.
The information regarding compliance with the corporate governance code is presented in
Annex 1.
28. Data about publicly disclosed information.
During January – December of year 2021 the Company announced following essential
events:
2021-11-30
Activity results of nine months of year 2021 of company AB “Linas” Group of
companies. AB “Linas” not audited consolidated interim information of nine months of
year 2021
2021
-
09
-
3
0
Activity results of six months of year 2021 of AB “Linas” Group of companies
2021-07-30
The decision of the Bank of Lithuania to postpone decisions approval of circulars of
tender o
ffe
rs submitted by UAB “Verslo dizainas”
2021-07-09
The Board and the Chairman of the Board of AB Linas have been elected
2021-05-31
Activity results of three months of year 2021 of company AB “Linas” group of
companies. AB “Linas” not audited consolidated interim information of three
months of year 2021
2021-05-31
Regarding intention to announce a mandatory offe
r
2021-05-25
Resolutions of the extraordinary General Meeting of Shareholders
2021-04-30
Activity results of year 2020 of AB “Linas” and the G
roup of companies
2021-04-30
Resolutions of the Annual General Meeting of Shareholders
2021-04-26
Notice on the intent to remove the shares of AB “Linas” from NASDAQ OMX
Vilnius stock exchange and to suspend public offer of shares
2021-04-26
AB “Linas”
the extraordinary General Meeting of Shareholders convocation
2021-04-16
Notification of the acquisition of a block of the voting rights
2021-04-16
Notification of the disposal of a block of the voting rights
2021-04-09
Draft Resolutions of the Annual G
eneral Meeting of Sharehold
ers
2021-03-31
AB “Linas” the Ordinary General Meeting of Shareholders convocation
2021-02-26
Activity results of twelve months of year 2020 of company AB “Linas” Group
of companies. AB “Linas” not audited consolidated interim information of
twelve months of year 2020
2021-01-19
Regarding th
e sale of AB Linas own shares
All information on material events made public during 2021 is available on the AB „Linas“
webpage www.linas.lt.
Dire
ctor
Vilita Skersienė
Annex 1
To AB “Linas” annual report of year 2021
Corporate Governance Reporting Form
The public limited liability company „Linas“ (hereinafter referred to as the “Company”), hereby discloses how it complies
with the Corporate Governance Code for the listed NASDAQ OMX Vilnius as well as its specific provision 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 By-Laws, the governing bodies of the Company are the General Shareholder’s Meeting, the Supervisory
Council, the Board and CEO. The Supervisory Council and the Board represents the shareholders, the Supervisory Council
performs supervision functions and the Board performs control functions. The Supervisory Council consists of three
independent members elected for the term of four year. The Board consists of three members elected for the term of four years
Audit committee is formed in the company which is appointed and cancelled by general meeting of shareholders. Audit
committee is formed from three members the two of who is independent. The cadence period of Audit committee is four years.
The Board elects and recalls CEO of the Company, sets his/her remuneration and other conditions of the employment
agreement.
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 publishes the most important
information and presents it at the general
meetings of shareholders. It also enables
access to information in other ways and
participation in the management of the
company in the ways and according to the
procedure provided by legal acts.
1.2. It is recommended that the Company 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 company's shares give all shareholders
equal rights.
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 recommendation is followed in
accordance with the procedure established by
legal acts.
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 The recommendation is followed in
accordance with the procedure established by
legal acts.
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 not
ice o
f the General Meeting of Shareholders
YES The recommendation is followed in
accordance with the procedure established by
legal acts.
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being convened, the Company should specify the last
day on which the proposed draft decisions should be
submitted at the latest.
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 commercial secrets are
not revealed.
YES All meeting documents are prepared in
Lithuanian and English languages. The
recommendations are followed, and the rights
of shareholders living abroad to receive and
acquaint with information are ensured.
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 Shareholders have the opportunity to vote
both directly at shareholders' meetings and in
advance.
1.8. With a view to increasing the 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.
YES If necessary from the shareholders, consider
the recommendation taking into account the
potential costs, technological possibilities and
other aspects.
1.9. It is recommended that the notice on the draft
decisions of the General Meeting of Shareholders
being convened should specify new candidatures of
members of the collegial body, their proposed
remuneration and the proposed audit Company if
these issues are included into the agenda of the
General Meeting of Shareholders. Where it is
proposed to elect a new member of the collegial body,
it is recommended that the information about his/her
educational background, work experience and other
managerial positions held (or proposed) should be
provided.
YES Where possible, recommendations are
followed.
1.10.Members of the Company‘s collegial
managementmbod, heads of administration or other
competent persons related to the agenda of general
meeting of shareholders should take part in the
general meeting of shareholders. Proposed candidates
to member of the collegial body should also
partivi[ate in the general meeting of shareholders in
case election of new members is included into agenda
of the general meeting of shareholder
s
YES Where possible, recommendations are
followed.
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Principle 2: Supervisory Board 1 For the purposes of this Code, heads of the administration are the
employees of the company who hold top level management positions.
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 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 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.
YES All members of the Supervisory Board are
independent, which ensures the impartiality of
decisions.
2.1.2. Where decisions of the Supervisory Board may
have a different effect on the interests of the
Company Supervisory Board should treat all
shareholders impartially and fairly. It should ensure
that shareholders are properly informed about the
Company risk management and control, and
resolution of conflicts of interest.
YES All members of the supervisory board are
independent, which ensures responsible
decisions of the members vis-à-vis all
stakeholders.
2.1.3. The Supervisory Board should be impartial in
passing decisions that are significant for the
Company strategy. Members of the Supervisory
Board should act and pass decisions without an
external influence from the persons who elected
t
hem.
YES All members of the supervisory board are
independent, which ensures responsible
decisions of the members vis-à-vis all
stakeholders.
2.1.4.Members od supervisory board should clearly
voice their objections in case they they beleive that
decison of supervisory board is against the interest of
the company. Independent memebers of supervisory
board should: a) maintain independence of their
analysis and decision making; b) not seek or accept
any unjustified priviligies that minght compromise
their i
ndepe
ndence.
YES
2.1.5. The Supervisory Board should oversee that the
Company are designed and implemented in
accordance with the legal acts in order to avoid faulty
practice that is not related to the longterm interests of
the Company and its shareholders, which may give
rise to reputational, legal or other risks.
YES
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.
YES The recommendation is followed in
accordance with the procedure established by
legal acts.
2.2. Formation of the Supervisory
Board The procedure of the formation of the Supervisory Board should ensure proper resolution of conflicts
of interest and effective and fair corporate governance.
2.2.1. The members of the Supervisory Board elected
by the General Meeting of Shareholders should
collectively ensure the diversity of qualifications,
professional experience and competences and seek for
gender equality. With a view to maintain a proper
balance between the qualifications of the members of
the Supervisory Board, it should be ensured that
YES Recommendations are followed.
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members of the Supervisory Board, as a whole,
should have diverse knowledge, opinions and
experience to duly perform their tasks.
2.2.2. Members of the Supervisory Board should be
appointed for a specific term, subject to individual
reelection for a new term in office in order to ensure
necessary development of professional experience.
YES Recommendations are followed.
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.
YES Recommendations are followed.
2.2.4. Each member should devote enough 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
professionalobligations (particularly the managing
positions in other companies) so that they would not
interfere with the proper performance of the duties of
a member of the Supervisory Board. Should a
member of the Supervisory Board attend less than a
half of the meetings of the Supervisory Board
throughout the financial year of the Company, the
shareholders of the Company should be notified
thereof.
YES
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,
even though a particular member meets all the criteria
of independence, he/she cannot be considered
independent due to special personal or Company
related circumstances.
YES Recommendations are followed.
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
During the reporting period, the members of
the Supervisory Board acted free of charge
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.
YES Partially executed
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Principle 3: Management Board
3.1.Principle and liability of management Board
The Management Board should ensure the inplementation of the Company‘s strategy and good corporative
governance with due regard also to the interest of shareholders, employees and other interest groups.
3.1.1. The Management Board should ensure the
implementation of the Company 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 Recommendation are followed.
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 Statutes
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 consider
the needs of the Company other interest groups by
respectively striving to achieve sustainable business
development
YES Recommendations are followed
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 Recommendations are followed
3.1.4.Moreover, the management board shoudl ensure
that the measures included into OECD Good Practice
Guidace on International Control. Ethic and
Compliance are applied at the company in order to
asure adherence to applicable laws, rules and
standard
s.
YES Recommendations are followed acc.to
circumstances
3.1.5. When appointing the manager of the Company,
the Management Board should consider the
appropriate balance between the competence.
Recommendations are followed
3.2. Formation of the Management Board
3.2.1. The members of the Management Board,
elected by the Supervisory Board or, if the
Supervisory Board is not formed, by the General
Meeting of Shareholders should collectively ensure
the required diversity of qualifications, professional
experience and competences and seek for gender
equality. With a view to maintain a proper balance in
terms of the current qualifications possessed by the
members of the Management Board, it should be
ensured that the members of the Management Board
would have, as a whole, diverse knowledge, opinions
and experience to duly perform their tasks.
YES
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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. If 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 anual report.
YES The recommendation is followed in
accordance with the procedure established by
legal acts.
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 Recommendations are followed
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 Recommendations are followed
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 chief
financial officer of the company, but does not
vote when decisions are made that could cause
a conflict of interest
3.2.6. Each member should devote enough time and
attention to perform his duties as a member of the
Management Board. Should a member of the
Management Board attend less than a half of the
meetings of the Management Board throughout the
financial year of the Company, the Supervisory Board
of the Company or, if the Supervisory Board is not
formed at the Company, the General Meeting of
Shareholders should be notified thereof.
YES
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 willbe independent4 , 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.
NOT
APPICABLE
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 Currently, the members of the Board act free
of charge, but if the situation changes, their
remuneration would be determined by the
company's general meeting of shareholders.
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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
noncompete agreements and they should not use the
business information or opportunities related to the
Company‘ operations in violation of the Company‘s
interests.
YES
3.2.10. Every year the Management Board should
carry out an assessment of its activities. It should
include evaluation of the structure of the Management
Board, its work organization and ability to act as a
group, evaluation of the competence and work
efficiency of each member of the Management Board,
and evaluation whether the Management Board has
achieved its objectives. The Management Board
should, at least once a year, make public respective
information about its internal structure and working
procedures in observance of the legal acts regulating
the processing of personal data.
YES Partially executed
4.Principle 4: Rules of procedure and of Supervisory Boadd and the Management Board of the company
The rules of procedure of Supervisory Board, if it is formed at the company and of the management board
should ensure eficient operation and decision making of those bodies and promote active cooperation of
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 cooperationin 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
specif
ying
the reasons for this.
YES Recommendations are followed
4.2. It is recommended that meetings of the
Company‘s collegial bodies should be held at the
respective intervals, according to the preapproved
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‘scollegial bodies should be convened at
least onec per quater.
YES/NO
Meetings of collegial bodies are held
according to a preliminary schedule. Meetings
of the Board of the Company are held at least
once a quarter, meetings of the Supervisory
Board of the Company are held at least once
every six months.
4.3. Members of a collegial body should be notified
of the meeting being convened in advance so that they
would have enough 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 th
e meeting should not be changed or
YES Recommendations are followed
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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
immedia
te re
solution.
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
ofthe 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
YES
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 acccont of the cmpany-related
circumstances and the chosen corporate governant
structure, the supervisory board of the company or, in
cases where the supervisory board is not foarmed, the
management board which perfors the supervisory
functiopns, establishes committees. It is
recommended that the collegial body should form the
nomination, remnumerationa nd audit committees.
YES/NO Audit committee is formed
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 t
hree
different committees.
YES/NO The functions of the Nomination and
Remuneration Committee are performed by
the collegial bodies themselves
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/No Principle is partially executed
5.1.4. Committees established by the collegial body
should normally be composed of at least three
members. Subject to the requirements of the legal
acts, committees could be comprised only of two
members as well. Members of each committee should
be selected on the basis of their competences by
giving priority to independent members of the
collegial body. The chair of the Management Board
should not serve as the chair of committees.
YES
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
YES/NO
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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.
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
5.2. Nomination committee
5.2.1. The key functions of the nomination committee
should be the following: 1) to select candidates to fill
vacancies in the membership of Supervisory and
management bodies and the administration and
recommend the collegial body to approve them. The
nomination committee should evaluate the balance of
skills, knowledge and experience in the management
body, prepare a description of the functions and
capabilities required to assume a particular position
and assess the time commitment expected; 2) assess,
on a regular basis, the structure, size and composition
of the Supervisory and management bodies as well as
the skills, knowledge and activity of its members, and
provide the collegial body with recommendations on
how the required changes should be sought; 3) devote
the attention necessary to ensure succession planning.
NO The Nomination Committee has not been
formed, its functions are performed by
collegial bodies
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.
NO
5.3. Remuneration committee
The main functions of the remuneration committee
should be as follows: 1) submit to the collegial body
proposals on the remuneration policy applied to
members of the Supervisory and management bodies
and the heads of the administration for approval. Such
policy should include all forms of remuneration,
including the fixed rate remuneration, performance-
based remuneration, financial incentive schemes,
pension arrangements and termination payments as
well as conditions which would allow the Company to
recover the amounts or suspend the payments by
specifying the circumstances under which it would be
expedient to do so; 2) submit to the collegial body
proposals regarding individual remuneration for
The Remuneration Committee has not been
formed, its functions are performed by
collegial bodies
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members of the collegial bodies and the heads of the
administration in order to ensure that they would be
consistent with the Company evaluation of the
performance of the persons concerned; 3) review, on
a regular basis, the remuneration policy and its
implementation.
5.4. Audit committee
5.4.1.The key functions of audit committee are
defined in the legal acts regulating the activity of the
audit committee.
YES
5.4.2. All members of the committee should be
provided with detailed information on specific issues
of the Company‘s accounting system, finances and
operations. The heads of the Company‘s
administration should inform the audit committee
about the methods of accounting for significant and
unusual transactions where the accounting may be
subject to different approaches.
YES The members of the audit are acquainted with
the peculiarities of the company's activities.
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 The company creates all the conditions for the
implementation of the recommendation.
5.4.4. The audit committee should be informed aboit
interim 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
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
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
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Principle 6. Preventon and disclosure of conficts of interest
The corporate governance framework shold encourage members Company‘s supervisory and management
bodies to avoid confilcts of interest and ensure transparent and effective mechanism of disclosure of conficts
of interests related to the members of the supervisory and management body.
Any member of the Company Supervisory and
management body should avoid a situation where
his/her personal interests are or may be in conflict
with the Company interests. In case such a situation
did occur, a member of the Company 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‘shareholders of such situation of a conflict
of interest, indicate the nature of interests and, where
possible, their value.
YES
Principle 7: Remuneration policy of the Company
The remuneration policy and the procedure for review and disclosure of such policy established at the
Company should prevent potential conflicts of interest and abuse in determining remuneration of members
of the collegial bodies and heads of the administration, in addition it should ensure the publicity and
transparency of the Company‘ renumeration 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.
NOT
APPLICABLE
The remuneration policy has not yet been
approved when preparing the report on
compliance with the governance code,
therefore the principle is not relevant for the
company during the reporting period.
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.
NOT
APPLICABLE
The remuneration policy has not yet been
approved when preparing the report on
compliance with the governance code,
therefore the principle is not relevant for the
company during the reporting period.
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.
NOT
APPLCABLE
The remuneration policy has not yet been
approved when preparing the report on
compliance with the governance code,
therefore the principle is not relevant for the
company during the reporting period.
7.4. Remuneration policy should provide enough
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 nonvariable
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.
NOT
APPLICABLE
The remuneration policy has not yet been
approved when preparing the report on
compliance with the governance code,
therefore the principle is not relevant for the
company during the reporting period.
7.5. If the financial incentive scheme is applied at the
Company, the remuneration policy should contain
enough information about the retention of shares after
the award thereof. Where remuneration is based on
the award of shares, shares should not be vested at
least for three years after the award thereof. After
vesting, members of the collegial bodies and heads of
the administration should retain a certain number of
shares until the end of their term in office, subject to
the need to compensate for any costs related to the
acquisition of shares.
NOT
APPLICABLE
The remuneration policy has not yet been
approved when preparing the report on
compliance with the governance code,
therefore the principle is not relevant for the
company during the reporting period.
7.6. The Company should publish information about NOT The remuneration policy has not yet been
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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 remuneration
policy, compared to the previous fin
ancia
l year.
APPLICABLE approved when preparing the report on
compliance with the governance code,
therefore the principle is not relevant for the
company during the reporting period.
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.
NOT
APPLICABLE
The remuneration policy has not yet been
approved when preparing the report on
compliance with the governance code,
therefore the principle is not relevant for the
company during the reporting period.
8. Rules of sharehlders in corporate governance
The corporate governance framework should recognize the rights of stakehoders entrenched in the laws or
mutual agreements and encourage active corporation between companies and stakeholders in creatins 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
certains interest in the company concerned.
8.1. The corporate governance framework should
ensure that the rights and lawful interests of
stakeholders are protected
YES
8.2. The corporate governance framework Company
applies a should create conditions for stakeholders to
participate in corporate governance in the manner
prescribed by law. Examples of participation by
stakeholders in corporate governance include the
participation of employees or their representatives in
the adoption of decisions that are important for the
Company, consultations with employees or their
representatives on corporate governance and other
important matters, participation of employees in the
Company authorized capital, involvement of creditors
in corporate governance in the cases of the
Company‘s insolvencys,
etc.
YES Follow recommendation acc.to circumstances
8.3. Where stakeholders participate in the corporate
governance process, they should have access to
relevant information.
YES
8.4.Where stakeholders participate in the corporate
governance process, they should have access to the
relevat information.
YES
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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 procedure on
confidential information and commercial secrets and
the legal acts regulating the processing of personal
data, the information publicly disclosed by the
Company should include but not be limited to the
following:
9.1.1. operating and financial results of the Company;
9.1.2. objectives and non-financial information of the
Company;
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;
9.1.4. members of the Company Supervisory and
management bodies who are deemed independent, the
manager of the Company, the shares or votes held by
them at the Company, participation in corporate
governance of other companies, their competence and
remuneration;
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;
9.1.6. potential factors, the Company‘s risk
management and supervision policy;
9.1.7. the Company transaction with related parties;
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 option as
incentives, relationships with creditors, suppliers,
local community, etc.);
9.1.9. structure and strategy of corporate governance;
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 Significant events and key information of the
company are made public in accordance with
the procedure established by legal acts.
Shareholders have access to non-confidential
information and other means.
9.2. When disclosing the information specified in
paragraph 9.1.1 of recommendation 9.1, it is
recommended that the Company which is a parent
Company in respect of other companies should
disclose information about the consolidated results of
the whole group of companies.
YES
9.3. When disclosing the information specified in
paragraph 9.1.4 of recommendation 9.1, it is
recommended that the information on the professional
experience and qualifications of members of the
Company Supervisory and management bodies and
the manager of the Company as well as potential
conflicts of interest which could affect their decisions
should be provided. It is further recommended that the
remuneration or other income of members of the
Company Supervisory and management bodies and
the manager of the Company should be disclosed, as
provided for in greater
detail in Principle 7.
YES The recommendation is followed in
accordance with the procedure established by
legal acts.
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9.4. Information should be disclosed in such manner
that no shareholders or investors are discriminated in
terms of the method of receipt and scope of
information. Information should be disclosed to all
parties concerned at the same time.
YES
Principle 10. Selection of Company‘s audit firm
The Company‘s audit firm selection mechanism shouls ensure the independence of the report and option 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‘ annual financial statements and
the financial information provided in its annual report
should be audited by an
independent audit firm.
YES
10.2. It is recommended that the audit firm would be
proposed to the General Meeting of Shareholders by
the Supervisory Board or, if the Supervisory Board is
not formed at the Company, by the Management
Board of the Company.
YES
10.3. If the audit firm has received remuneration from
the Company for the nonaudit 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