RESPONSIBLE PERSONS CONFIRMATION
02.12.2022
Following Article 22 of the Law on Securities of the Republic of Lithuania and the Rules on
Preparation and Submission of Periodic and Additional Information of the Bank of Lithuania,
management of Vilniaus baldai, AB, hereby confirm that, to the best of our knowledge, the audited
Vilniaus baldai, AB Consolidated and Company's Financial Statements for the financial year 2022,
ended 31 August 2022, prepared in accordance with the International Financial Reporting
Standards as adopted by the European Union, give a true and fair view of the assets, liabilities,
financial position, profit and cash flows of Vilniaus baldai, AB and the Group of undertakings.
Presented Consolidated Annual Report includes a fair review of the development and
performance of the business and position of the company and the consolidated group in relation
to the description of the man risks and contingencies faced thereby.
ENCLOSURE:
1. Audited annual information (Consolidated and Company's Financial Statements for 2022,
Consolidated Annual Report for 2022).
General Manager Jonas Krutinis
Chief Accountant Elinga Judickienė
VILNIAUS BALDAI AB
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS FOR THE
FY 2022 ENDED 31 AUGUST 2022,
PREPARED ACCORDING TO THE INTERNATIONAL FINANCIAL REPORTING
STANDARDS AS ADOPTED BY THE EUROPEAN UNION,
PRESENTED TOGETHER WITH INDEPENDENT AUDITOR’S REPORT
2
CONTENTS
Independent Auditor’s Report
3–9
Annual report
Consolidated annual report
10–48
Company Management Report,
Company Remuneration Report and
Social Accountability Report
Company Management Report
18-24
Company Remuneration Report
25-26
Social Accountability Report
27
Financial Statements:
Consolidated and separate Statements
of financial position
49–50
Consolidated and separate Statements of profit
or loss and other comprehensive income
51
Consolidated and separate Statements
of changes in equity
52–53
Consolidated and separate
Statements of cash flows
54–55
Consolidated and separate Notes to the
financial statements
56-93
GRANT THORNTON BALTIC UAB
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www.grantthornton.lt
Grant Thornton Baltic UAB
Vilnius | Upės street 21-1 | 08128 Vilnius | Lithuania | T +370 52 127 856 | E info@lt.gt.com
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INDEPENDENT AUDITOR‘S REPORT
TO THE SHAREHOLDERS OF AB VILNIAUS BALDAI
Report on the Audit of the Consolidated Financial Statements of the Group and the company
Opinion
We have audited the accompanying separate financial statements of AB Vilniaus baldai (the
Company) and the accompanying consolidated financial statements of the Company and its
subsidiaries (the Group), which comprise the separate and consolidated statement of financial
position as at August 31, 2022, and the separate and
consolidated profit (loss) and statement of comprehensive income, the separate and consolidated
statement of changes in equity and the separate and consolidated statement of cash flows for the
year then ended, and notes to the separate and consolidated financial statements, which include a
summary of significant accounting policies and other explanatory notes.
In our opinion, the separate and consolidated financial statements present fairly, in all material
respects of the separate and consolidated financial position of the Company and the Group,
respectively, as at August 31, 2022, and of their separate and consolidated financial performance
and their separate and consolidated cash flows for the year then ended in accordance with
International Financial Reporting Standards (IFRS) as adopted by the European Union.
Basis for Opinion
We conducted our audit in accordance with International Standards on Auditing (ISAs)
and 2014 April 16 Regulation (EU) of the European Parliament and of the Council No. 537/2014 on
specific statutory audit requirements for public-interest entities (Regulation (EU) No 537/2014 of
the European Parliament and of the Council). Our responsibilities under those standards are further
described in the Auditor’s Responsibilities for the Audit of the Separate and the Consolidated
Financial Statements section of our report. We are independent of the Company and the Group in
accordance with the International Code of Ethics for Professional Accountants (including
International Independence Standards) (IESBA Code) together with the requirements of the Law on
Audit of the financial statements of the Republic of Lithuania that are relevant to the audit in the
Republic of Lithuania, and we have fulfilled our other ethical responsibilities in accordance with the
law on Audit of the financial statements of the Republic of Lithuania and the IESBA code. We
believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in
our audit of the separate and the consolidated financial statements of the current period. These
matters were addressed in the context of our audit of the separate and the consolidated financial
statements as a whole, and in forming our opinion thereon, and we do not provide a separate
opinion on these matters. Each key audit issue and our response to it is described below.
We performed the responsibilities described in the Auditor's Responsibilities for the Audit of the
Financial Statements section of this report, including those related to key audit matters.
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Accordingly, our audit included performing procedures designed to respond to the risks of material
misstatement of the financial statements. The results of the procedures performed, including
procedures performed in response to the matters presented below, provide a basis for our opinion
expressed on the financial statements presented below.
Key audit matter
Tangible fixed assets useful service life
See Note 2.7 “Property, plant and equipment” and Note 5 “Property, plant and equipment”.
On 2022 of August 31 the separate financial statements of tangible fixed assets the carrying value
was 63762 thousand EUR. In the consolidated financial statements value was 63769 thousand EUR.
For tangible fixed assets management plays a significant estimate for which is mainly related to the
useful life. For more information about the management applies the basic assumptions presented in
note 2.7, "Tangible assets". Changes in these assumptions may be the main results of depreciation,
recognition prospects from the date of the useful service life review, the change and making of the
year, and the carrying amount of inventories.
The subjectivity of the key assumptions required significant audit judgment and effort.
Among other things, we performed the following procedures:
• We discussed the Company and the Group's accounting policies relating to property, plant
and determination of the useful service life period, and assessed the suitability of accounting
policies, compliance with applicable accounting standards;
• evaluating the Company's and the Group's installed due process in determining and
reviewing the long-term tangible assets useful service lives;
• We performed a retrospective review of management's estimates of the useful service lives
of significant items of property, plant and equipment by comparing the actual useful lives of
fully depreciated and continuing assets with the original estimated useful service lives,
including subsequent adjustments.
• compared the useful service lives of significant items of property, plant and equipment used
by the Company and the Group with the useful service lives of other entities in the
manufacturing sector;
• after selecting the items of property, plant and equipment acquired, we checked whether the
useful lives determined for them corresponded to the estimates made by the management for
the period;
• Asked management about plans to sell and write off or replace significant items of property,
plant and equipment that will expire in the next financial year, reviewed approved budgets
for future years, and assessed the consistency of those plans and budgets with management's
estimated useful lives;
• considered whether the Company's and the Group's disclosures about property, plant and
equipment (Notes 2.7 and 5) are sufficient.
Key audit matter
Revenue recognition (Consolidated and separate financial statements)
See Note 2.16 financial disclosure "Revenue recognition" and 16 “Sales income”.
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During 2022, the Company and the Group’s net sales were reported at, respectively, EUR 100738
thousand and EUR 100738 thousand.
The Company and the Group generate their revenue under a contract with a major customer for the
production of furniture. This revenue is recognized at some point. The company manufactures
furniture units according to orders received from the main customer. Determining whether an
operating obligation is settled over a period of time or at a particular point requires significant
judgment by management. In addition, the contract with the major customer includes variable
remuneration, so a significant measurement is also required in measuring revenue that may be
recognized at the reporting date.
The subjectivity of the key assumptions required significant audit judgment and effort.
Among other things, we performed the following procedures:
• assessed the appropriateness of determining operating liabilities, determining the transaction
price, allocating it to operating liabilities, determining and recognizing variable
remuneration, and assessing whether the operating liability is settled at a particular point in
time or over a period of time performing an independent assessment of the implementation
process of IFRS 15 adopted by the Company and the Group;
• after analyzing the agreement with the major customer, we assessed the adequacy of key
management estimates related to the timing of the recognition of income and variable
remuneration;
• after analyzing the agreement with the major customer, we evaluated the decision of the
management regarding the fulfillment of the activity obligation by delivering the furniture
units to the customer;
• performed a retrospective review of significant judgments and estimates made by
management in prior periods in relation to the results of subsequent periods. In addition, we
evaluated the historical experience of dispute resolution related to canceled orders and
variable remuneration;
• assessed the adequacy and appropriateness of the Company's and the Group's revenue
recognition disclosures provided in the Company's separate and Group's consolidated
financial statements.
Other information
The other information comprises the information included in 2022 the Group’s annual report,
including Corporate Governance statement, and Corporate Social Responsibility Report and
Remuneration Report, but does not include the separate and consolidated financial statements and
our auditor’s report thereon. Management is responsible for the other information.
Our opinion on the separate and consolidated financial statements does not cover the other
information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the separate and consolidated financial statements, our responsibility
is to read the other information and, in doing so, consider whether the other information is
materially inconsistent with the separate and consolidated financial statements or our knowledge
obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have
performed, we conclude that there is a material misstatement of this other information, we are
required to report that fact. We have nothing to report in this regard.
In addition, our responsibility is to consider whether information included in the Group’s annual
report, including Corporate Governance statement and Remuneration Report, for the financial year
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for which the financial statements are prepared is consistent with the financial statements and
whether annual report has been prepared in compliance with applicable legal requirements. Based
on the work carried out in the course of audit of separate and consolidated financial statements, in
our opinion, in all material respects:
• The information given in the Group’s annual report, including Corporate Governance
statement and Remuneration Report, for the financial year for which the financial
statements are prepared is consistent with the separate and consolidated financial
statements; and
• The Group’s annual report, including Corporate Governance statement and Remuneration
Report, has been prepared in accordance with the requirements of the Law on Financial
Reporting by Undertakings of the Republic of Lithuania.
We also need to check that the Corporate Social Responsibility Report has been provided. If we
identify that Corporate Social Responsibility Report has not been provided, we are required to
report that fact. We have nothing to report in this regard.
Responsibilities of management and those charged with governance for the separate and
consolidated financial statements
Management is responsible for the preparation and fair presentation of the separate and
consolidated financial statements in accordance with the Law of the Republic of Lithuania on
accounting and financial reporting, and International Financial Reporting Standards as adopted by
the European Union, and for such internal control as management determines is necessary to enable
the preparation of the separate and consolidated financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the separate and consolidated financial statements, management is responsible for
assessing the Company’s and the Group’s ability to continue as a going concern, disclosing, as
applicable, matters related to going concern and using the going concern basis of accounting unless
management either intends to liquidate the Company and the Group or to cease operations, or has
no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Company’s and the Group’s
consolidated financial reporting process.
Auditor’s responsibilities for the audit of the separate and consolidated financial statements
Our objectives are to obtain reasonable assurance about whether the separate and consolidated
financial statements as a whole are free from material misstatement, whether due to fraud or error,
and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of
assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect
a material misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the basis of these separate and consolidated
financial statements.
As part of an audit in accordance with ISAs, we exercise professional judgment and maintain
professional scepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the separate and consolidated
financial statements, whether due to fraud or error, design and perform audit procedures
responsive to those risks, and obtain audit evidence that is sufficient and appropriate to
provide a basis for our opinion. The risk of not detecting a material misstatement resulting
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from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery,
intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company’s and the Group’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
• Conclude on the appropriateness of management’s use of the going concern basis of
accounting and, based on the audit evidence obtained, whether a material uncertainty exists
related to events or conditions that may cast significant doubt on the Company’s and the
Group’s ability to continue as a going concern. If we conclude that a material uncertainty
exists, we are required to draw attention in our auditor’s report to the related disclosures in the
separate and consolidated financial statements or, if such disclosures are inadequate, to
modify our opinion. Our conclusions are based on the audit evidence obtained up to the date
of our auditor’s report. However, future events or conditions may cause the Company and the
Group to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the separate and consolidated
financial statements, including the disclosures, and whether the separate and the consolidated
financial statements represent the underlying transactions and events in a manner that
achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities
or business activities within the Company and the Group to express an opinion on the separate
and consolidated financial statements. We are responsible for the direction, supervision and
performance of the group audit. We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned
scope and timing of the audit and significant audit findings, including any significant deficiencies in
internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with
relevant ethical requirements regarding independence, and to communicate with them all
relationships and other matters that may reasonably be thought to bear on our independence, and
where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters
that were of most significance in the audit of the separate and the consolidated financial statements
of the current period and are therefore the key audit matters. We describe these matters in our
auditor’s report unless law or regulation precludes public disclosure about the matter or when, in
extremely rare circumstances, we determine that a matter should not be communicated in our report
because the adverse consequences of doing so would reasonably be expected to outweigh the public
interest benefits of such communication.
Report on other legal and regulatory requirements
Other requirements for the auditor's report under Regulation (EU) of the European Parliament and
of the Council 537/2014.
In accordance with the decision made by shareholders on 3 November 2022 we have been chosen to
carry out the audit of the Company’s and the Group’s separate and the consolidated financial
statements. Our appointment to carry out the audit of Company’s and the Group’s separate and the
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consolidated financial statements in accordance with the decision made by shareholders has been
renewed every 2 years and the period of total uninterrupted engagement is 4 years.
We confirm that our opinion in the section ‘Opinion’ is consistent with the additional report which
we have submitted to the Company and the Group and Audit Committee and the Central Bank of
Lithuania.
We confirm that in light of our knowledge and belief, services provided to the Company and the
Group are consistent with the requirements of the law and regulations and do not comprise non-
audit services referred to in Article 5(1) of the Regulation (EU) No 537/2014 of the European
Parliament and of the Council.
Report on the compliance of format of the consolidated and the company financial statements
with the requirements for European Single Electronic Reporting Format
We have been engaged based our agreement by the management of the Company to conduct a
reasonable assurance engagement for the verification of compliance with the applicable
requirements of the European single electronic reporting format of consolidated and company
financial statements, including Consolidated and company’s annual report, for the year ended 31
August 2022 (the “Single Electronic Reporting Format of the consolidated financial statements”).
Description of a subject and applicable criteria
The Single Electronic Reporting Format of the consolidated and company financial statements has
been applied by the management of the Company to comply with the requirements of art. 3 and 4 of
the Commission Delegated Regulation (EU) 2019/815 of 17 December 2018 supplementing
Directive 2004/109/EC of the European Parliament and of the Council with regard to regulatory
technical standards on the specification of a single electronic reporting format (the “ESEF
Regulation”). The applicable requirements regarding the Single Electronic Reporting Format of the
consolidated financial statements are contained in the ESEF Regulation. Furthermore, the Company
has voluntarily performed the marking of the separate financial statements in accordance with the
requirements applicable to the consolidated financial statements.
The requirements described in the preceding paragraph determine the basis for application of the
Single Electronic Reporting Format of the consolidated and company financial statements and, in
our view, these requirements constitute appropriate criteria to form a reasonable assurance
conclusion.
Responsibilities of management and those charged with governance
The management of the Company is responsible for the application of the Single Electronic
Reporting Format of the consolidated and company financial statements that complies with the
requirements of the ESEF Regulation.
This responsibility includes the selection and application of appropriate markups in iXBRL using
ESEF taxonomy and designing, implementing and maintaining internal controls relevant for the
preparation of the Single Electronic Reporting Format of the consolidated and company financial
statements which is free from material non-compliance with the requirements of the ESEF
Regulation.
Those charged with governance are responsible for overseeing the financial reporting process.
Our responsibility
Our responsibility was to express a reasonable assurance conclusion whether the Single Electronic
Reporting Format of the consolidated and company financial statements complies with the ESEF
Regulation.
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We conducted our engagement in accordance with International Standard on Assurance
Engagements 3000 (Revised) ‘Assurance Engagements other than Audits and Reviews of Historical
Financial Information’ (the ,,ISAE 3000 (R)” ). This standard requires that we comply with ethical
requirements, plan and perform procedures to obtain reasonable assurance whether the Single
Electronic Reporting Format of the consolidated financial statements is prepared, in all material
aspects, in accordance with the applicable requirements. Reasonable assurance is a high level of
assurance, but it does not guarantee that the service performed in accordance ISAE 3000 (R) will
always detect the existing material misstatement (significant noncompliance with the requirements).
Summary of the work performed
Our planned and performed procedures were aimed at obtaining reasonable assurance that the
Single Electronic Reporting Format of the consolidated financial statements was applied, in all
material aspects, in accordance with the applicable requirements and such application is free from
material errors or omissions.
Our procedures included in particular:
• obtaining an understanding of the internal control system and processes relevant to the application
of the Single Electronic Reporting Format of the consolidated financial statements, including the
preparation of the XHTML format and marking up the consolidated financial statements;
• verification whether the XHTML format was applied properly;
• evaluating the completeness of marking up the consolidated and company financial statements
using the iXBRL markup language according to the requirements of the implementation of single
electronic format as described in the ESEF Regulation;
• evaluating the appropriateness of the Group’s' use of XBRL markups selected from the ESEF
taxonomy and the creation of extension markups where no suitable element in the ESEF taxonomy
has been identified; and
• evaluating the appropriateness of anchoring of the extension elements to the ESEF taxonomy.
We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for
our conclusion.
Conclusion
In our opinion, the Single Electronic Reporting Format of the consolidated and company financial
statements for the year ended 31 August 2022 complies, in all material respects, with the ESEF
Regulation.
The engagement partner on the audit resulting in this independent auditor’s report is Genadij
Makušev.
2 December 2022
Certified auditor
Genadijus Makuševas
Auditoriaus pažymėjimo Nr. 000162
21-1 Upės str ,Vilnius, the Republic of Lithuania
Grant Thornton Baltic UAB
Audit firm certificate No. 001513
VILNIAUS BALDAI AB, company code 121922783, Savanoriu Ave. 178B, Vilnius, Lithuania
CONSOLIDATED ANNUAL REPORT FOR THE FY2022 ENDED 31 AUGUST 2022
(all amounts are in EUR thousand unless otherwise stated)
10
CONSOLIDATED ANNUAL REPORT
02-12-2022
COMPANIES COMPOSING THE GROUP
Vilniaus Baldai AB (hereinafter “the Company”) prepares both separate Company’s and consolidated financial statements. The
Group (hereinafter “the Group”) consists of Vilniaus Baldai AB and subsidiary ARI-LUX UAB in which the Company directly
controls 100% of shares.
GENERAL INFORMATION ABOUT THE COMPANY:
Name
Joint stock company Vilniaus Baldai AB
Legal form
Joint stock company
Code
121922783
VAT payer’s code
LT219227811
LEI code
529900MJDB8L13ZF6G26
Authorised capital
EUR 4,508,069.72, divided into 3,886,267 ordinary registered
shares with the par value of EUR 1.16 each
Office address
Savanoriu Ave. 178B, LT-03154 Vilnius
Telephone
(8~5) 252 57 00
E-mail
info@vilniausbaldai.lt
Internet website
www.vilniausbaldai.lt
Registration date and place
9 February 1993, Vilnius City Board
Register, where all the information about the Company is collected and
stored
Register of Legal Entities
Main type of activity
Design, production and selling of furniture
GENERAL INFORMATION ABOUT THE SUBSIDIARY:
Name
Limited liability company ARI-LUX UAB
Legal form
Limited liability company
Code
120989619
VAT payer’s code
LT209896113
Authorised capital
EUR 2,896
Office address
Savanoriu Ave. 178B, LT-03154 Vilnius
Telephone
(8~5) 252 57 44
E-mail
info@ari-lux.lt
Registration date and place
28 October 1991, Vilnius City Board
Register, where all the information about the Company is collected and
stored
Register of Legal Entities
Main type of the activity
Packaging
VILNIAUS BALDAI AB, company code 121922783, Savanoriu Ave. 178B, Vilnius, Lithuania
CONSOLIDATED ANNUAL REPORT FOR THE FY2022 ENDED 31 AUGUST 2022
(all amounts are in EUR thousand unless otherwise stated)
11
1. OBJECTIVE REVIEW OF THE COMPANIES GROUP’S POSITION, ACTIVITY AND DEVELOPMENT,
CHARACTERISATION OF THE MAIN TYPES OF RISKS AND UNCERTAINTIES FACED BY THE COMPANY
Vilniaus Baldai AB is one of the leading manufacturers of flat-pack furniture in Lithuania. The joint stock company Vilniaus Baldai
is a Company that cherishes time-honoured traditions, applies modern technologies and enjoys a stable and continuous
business growth.
In 2020, the first stage of the new Vilniaus baldai AB factory project was completed. The new factory was built and equipped,
new production lines were installed, and furniture production was gradually started in Guopstos Village, Trakai District. During
FY2022, the company also implemented the mid-second phase of the relocation, where the entire old factory was relocated. It
is planned that the new factory and modern process automation, robotization and technological solutions will be installed in it,
allowing the Company to increase its capacity, improve working conditions, increase process efficiency and reduce energy
consumption.
Vilniaus Baldai AB sales revenue in 2022 remained stable and amounted to 101 million Euros. The Company focused on quality
improvement, processes optimization, automation and equipment utilization improvement with the help of LEAN methodology.
Going forward the Company will prioritize assurance of high quality of its products, efficiency and flexibility in new products
launching.
Main risks faced by the Group:
Economic risk factors. The sales to the main customer Swedish IKEA constituted approximately 99% of total sales of Vilniaus
Baldai AB during 2022 (in 2021 – 99%). Furniture accounted for 99% of the Company’s sales during 2022 (in 2021 – 99%), while
the rest came from sales of raw materials and waste of raw materials.
Global economy development trends do have an impact on the Company’s main customer development pace as well as demand
fluctuation for products produced by the Company.
The Company competes with the world furniture producers.
Political risk factors. Changing geopolitical situation has an impact on the international trade flows at the same time having an
impact on the Company’s costs and profitability. There are no requirements and restrictions established by the State to the
issuer’s activity.
Social risk factors. Demographic situation and migration processes have a negative influence on the Lithuanian labour market,
therefore, the Company is constantly improving its organisational structure, increasing productivity, allocating resources to
improve work conditions, training and competence development. Trade Union, representing interests of the employees, operates
actively in the Company.
Supply. The Company aims to establish a long-term partnership with reliable suppliers, and at the same time secure alternatives
for supply of the main raw materials.
Technical and technological risk factors. The Company owns modern production equipment. Vilniaus Baldai AB pays
significant attention to the maintenance of production equipment, optimization of technological processes and increase of
working efficiency. The physical and moral condition of the main facilities is good and does not cause any risk to the activity of
the Company.
Ecological risk factors. An environment protection and FSC production management system is introduced in the Company in
compliance with the requirements of ISO 9001, ISO 14001 and FCS-STD-40-004 standards. The purpose of this system is to
ensure production of high-quality products consistent with customer needs, to use FSC certified raw materials, to protect
environment, to decrease pollution, usage of resources and to sort waste. There was no production restriction due to
environmental pollution. An FSC® (FSC-C104209) Chain of Custody system is a product traceability system from a forest or
(in case of secondary raw material) from a recycling moment to a place where it is sold under a FSC® mark and/or its
production finished and it is labelled with the mark. The annual FSC® audit was carried out in February 2022. No non-
conformities or notices were determined or given.
Repayment of loans. The repayment of loans is made according to the contractual schedules. All the payments to the bank are
made on time. Information on the terms and conditions of repayment of financial liabilities, credit and interest rate risks of the
Group and the Company is provided in the notes to the consolidated and Company’s financial statements (Notes 12 and 23).
Characteristics of internal control and risk management systems related to the preparation of consolidated financial
statements of the Group and the Company. The compliance with the requirements for the preparation of the set of the
consolidated financial statements, internal control and financial risk management systems, legal acts regulating the preparation
of the set of the consolidated financial statements is supervised by the Audit Committee established on 22 December 2021.
VILNIAUS BALDAI AB, company code 121922783, Savanoriu Ave. 178B, Vilnius, Lithuania
CONSOLIDATED ANNUAL REPORT FOR THE FY2022 ENDED 31 AUGUST 2022
(all amounts are in EUR thousand unless otherwise stated)
12
The Company's Chief Financial Officer and Financial Controller regularly review the International Financial Reporting Standards
(IFRS) adopted in the European Union to ensure timely implementation of all changes in the financial statements, analyze
transactions material to the Group and the Company, ensure fair and timely collection of information and periodically inform
senior management about the progress of the financial statements.
The Audit Committee:
Tomas Bubinas
Position
Independent Member of the Audit Committee, elected to the Audit Committee 22/12/2021, end of the term – 2025
Work experience
Since 2013 Chief Operating Officer at Biotechpharma UAB
2010–2012 Senior Director at TEVA Biopharmaceuticals USA
2001–2010 Chief Financial Officer at SICOR Biotech / TEVA Baltic
1999–2001 Senior Manager at PricewaterhouseCoopers
1994–1999 Senior Auditor, Manager at Coopers & Lybrand
Education
Master’s degree in economics at Vilnius University and Executive MBA of BMI (Baltic Management Institute), a fellow member
of the Association of Chartered Certified Accountants (ACCA) and a registered Lithuanian Sworn Auditor
Participation in Vilniaus Baldai AB authorised capital
-
Number of shares and of voting rights
-
Vaidas Savukynas
Position
Member of the Audit Committee, elected to the Audit Committee on 22/12/2021, end of the term – 2025
Work experience
Since 2013 Chief Financial Officer at Invalda Privatus Kapitalas AB
2011–2013 Chief Financial Officer at food retail chain Narodnyi in Kyrgyz Republic
2010–2010 Director of Administration at Zemaitijos Pienas AB
1998–2009 Chief Financial Officer and Financial Analyst at concern MG Baltic and its companies (MG Baltic Trade, Apranga,
Minvista)
1993–1995 Chief Executive Officer at brokerage company Bankoras
1990–1993 Marketing Manager at Lietuvos Birza AB
Education
Vilnius University diploma in economics, master’s degree in social sciences at Stockholm University (Sweden), Financial sector
schemes introductory courses in Leeds University (Great Britain)
Participation in Vilniaus Baldai AB authorised capital
-
Number of shares and of voting rights
-
Danutė Kadanaitė
Position
Member of the Audit Committee, elected to the Audit Committee on 22/12/2021, end of the term – 2025
Work experience
From 2014 Head of “Verus Sensus” UAB
2009 UAB “Legisperitus” – a lawyer
2008 – 2009 AB FMĮ “Finasta” – a lawyer
2008 AB “Invalda” – a lawyer
1999 – 2002 Attorney Artūras Šukevičius office – administrator
1994 – 1999 UAB FMĮ “Apyvarta” – a legal adviser
Education
Master of Finance Law at M. Romeris University, Bachelor of Law at Law University of Lithuania, Manager at International
Business School.
Participation in Vilniaus Baldai AB authorised capital
-
Number of shares and of voting rights
-
The Company’s Head of Finance department is responsible for the preparation of the consolidated financial statements, ensures
the collection of information from Group companies, its’ timely and fair processing and preparation for the financial statements.
VILNIAUS BALDAI AB, company code 121922783, Savanoriu Ave. 178B, Vilnius, Lithuania
CONSOLIDATED ANNUAL REPORT FOR THE FY2022 ENDED 31 AUGUST 2022
(all amounts are in EUR thousand unless otherwise stated)
13
2. THE ANALYSIS OF THE FINANCIAL AND NON-FINANCIAL ACTIVITY RESULTS, INFORMATION RELATED TO THE
ENVIRONMENTAL AND PERSONNEL MATTERS
Indicators characterising the operation of the Group in the period of 2018-2022;
2022
2021
2020
2019
2018
Net profitability = net profit / sales * 100
1,45%
0,17%
6,86%
5,41%
3,25%
Average return on assets ROA = net profit
/ (assets at the beginning of the period +
assets at the end of the period) / 2 *100
0,43%
0,05%
1,78%
2,15%
7,10%
Return on equity ROE = net profit /
equity*100
5,52%
0,69%
20,37%
20,66%
14,21%
Net earnings per share EPS = net profit /
number of shares
0,38
0,04
1,29
1,05
0,58
Debt ratio = liabilities / assets
0,7
0,7
0,7
0,66
0,57
Debt to equity coefficient = liabilities /
share capital
2,20
2,47
2,37
1,94
1,32
Current ratio = current assets / current
liabilities
0,78
0,64
0,85
0,69
1,48
Asset’s turnover = sales / assets
1,19
1,15
0,88
1,3
1,89
Book value of share = equity / number of
shares
6,82
6,43
6,35
5,07
4,08
Turnover (million EUR)
100,74
99,36
73,32
75,20
69,32
Gross profit (million EUR)
-0,18
7,35
9,46
6,75
6,45
Net profit (million EUR)
1,46
0,17
5,03
4,07
2,26
EBITDA (million EUR)
8,51
5,52
7,25
5,64
4,23
EBIT (million EUR)
4,00
1,48
4,27
3,93
2,65
Dividends per share (for the prior
accounting period)
0
0
0
EUR 0,08
EUR 0,26
Earnings per share P/E
21,53
239,79
6,57
6,83
18,81
The lowest share price
EUR 7,00
EUR 8,05
EUR 5,7
EUR 7,0
EUR 10,70
The highest share price
EUR 10,08
EUR 11,20
EUR 11,6
EUR 10,7
EUR 13,60
Closing price
EUR 8,1
EUR 10,60
EUR 8,5
EUR 7,15
EUR 10,90
Capitalisation (million EUR)
31,48
41,19
33,03
27,79
42,36
PRODUCTION AND SALES
Vilniaus Baldai AB designs, produces flat-pack furniture. The production of the Company is produced from wood particle boards,
using board on frame technology, which allows to produce lightweight, yet massively looking furniture. When employing this
technology less raw materials can be used, and stable quality of the production is attained. Each year new products are
developed and production technologies of existing ones are improved taking into consideration the needs of consumers and
prevailing tendencies. The planning system implemented in the Company is constantly developed to achieve higher production
flexibility and efficiency.
Modern equipment, purchased from such world-renowned manufacturers as Schelling, Burkle, Weeke, Wikoma, Biesse, Biele,
Cefla, etc., enables to manufacture different types of the furniture, coated with plywood, pigment or foil.
VILNIAUS BALDAI AB, company code 121922783, Savanoriu Ave. 178B, Vilnius, Lithuania
CONSOLIDATED ANNUAL REPORT FOR THE FY2022 ENDED 31 AUGUST 2022
(all amounts are in EUR thousand unless otherwise stated)
14
The volumes of Company’s production in terms of value in the period of 2018-2022;
Production
2022
2021
2020
2019
2018
thousand
EUR
thousand
EUR
thousand
EUR
thousand
EUR
thousand
EUR
Furniture
96,447
100,581
71,207
76,849
65,969
Other production
-
-
-
-
-
Total
96,447
100,581
71,207
76,849
65,969
Production per employee, working on employment contract basis, 2018–2022 (thousand EUR / year):
In 2022, the company successfully managed to maintain stable production volumes despite moving to a new factory.
Production sales according to the markets in the period of 2018–2022:
Sales
2022
2021
2020
2019
2018
Thousand
EUR
%
Thousand
EUR
%
Thousand
EUR
%
Thousand
EUR
%
Thousand
EUR
%
Lithuania
798
0,79
477
0,48
338
0,46
311
0,41
1,993
2,9
Abroad
99,940
99,21
98,887
99,52
72.986
99,54
74,893
99,59
67,329
97,1
Total
100,738
100
99,364
100
73,324
100
75,204
100
69,322
100
The Company’s sales in Lithuania mostly comprise sales of raw materials and waste of raw materials. In 2019 changed revenue
recognition due to application of IFRS 15, for more details see Note 2 in the financial statements.
Sales of the Company in the period of 2018–2022, in EUR thousand:
92,0
117,3
103,8
123,7
123,8
0,0
20,0
40,0
60,0
80,0
100,0
120,0
140,0
2018 2019 2020 2021 2022
67 329
74 893
72 986
98 887
99 940
1 993
311
338
477
798
69 322
75 204
73 324
99 364
100 738
0
20000
40000
60000
80000
100000
120000
2018 2019 2020 2021 2022
Abroad
Lithuania
Total
VILNIAUS BALDAI AB, company code 121922783, Savanoriu Ave. 178B, Vilnius, Lithuania
CONSOLIDATED ANNUAL REPORT FOR THE FY2022 ENDED 31 AUGUST 2022
(all amounts are in EUR thousand unless otherwise stated)
15
SUPPLY
Vilniaus Baldai AB has introduced an effective system of the purchase of raw materials and services. The Company maintains
strategic relations with suppliers and constantly searches for new opportunities in the markets of raw materials and services.
The purchase process is distinguished into strategic and operational purchases. The Company aims to manage the supply risk;
therefore, main raw materials may be supplied by principal or alternative suppliers. Vilniaus Baldai AB has implemented and
continuously improves the assessment system of suppliers; audits of suppliers are carried out.
The Company establishes long-term contracts with its suppliers. The Company acquires the main raw materials from the local,
Polish, Slovak and German suppliers. The main suppliers are IKEA Industry Lietuva UAB, IKEA Components S.R.O, IKEA
Industry Polska Sp.zo.o, Homanit Krosno Odrzanskie SP, Rehau UAB, Remmers Baltica UAB. The local supply of the raw
materials is pre-conditioned by the cheap transportation costs and good relations with the major suppliers.
ENERGY
Vilniaus Baldai AB during 2022 the Company consumed 23,141 thousand kWh of electricity (2021 – 28,617 thousand kWh,),
The electricity consumption for production of EUR 1 amounted to 0,240 kWh (2021 – 0,285 kWh).
Consumption of electricity, Consumption of electricity per one
thousand kWh per year output EUR, kWh
EMPLOYEES
The Company pays great attention and allocates funds for the improvement of working conditions and trainings, qualification
improvement of the personnel, implementation of LEAN principles and methods. Vilniaus Baldai AB makes regular investments
in production facilities, automation of technological processes in order to improve working conditions, reduce physical workload
of employees. Investments in occupational safety and wellbeing of employees serve as a basis for establishing a different
working environment, which encourages to aim for better performance and achieve higher competitiveness in the international
markets.
As at 31 August 2022 the number of workplaces at the Group and the Company decreased due to the move to one factory.
There were 700 employees working in the Group and 628 employees at the Company as of the end of FY2022
(923 at the Group and 847 at the Company as of the end FY2021). The average age of the employees is 41 years.
The average number of the Company’s recorded employees, working on an employment contract basis, in the period of 2018–
2022:
2022
2021
2020
2019
2018
Executive personnel
8
9
7
6
5
Specialists
63
56
50
47
47
Workers
707
748
629
619
544
Total
778
813
686
672
596
Remuneration comprises a basic and variable component. A variable component of remuneration depends on the Company’s
results of operations.
The average wages of the employees in the period of 2018–2022, EUR:
21 625
23 254
21 683
28 617
23 141
2018 2019 2020 2021 2022
0,328
0,313
0,305
0,285
0,240
2018 2019 2020 2021 2022
VILNIAUS BALDAI AB, company code 121922783, Savanoriu Ave. 178B, Vilnius, Lithuania
CONSOLIDATED ANNUAL REPORT FOR THE FY2022 ENDED 31 AUGUST 2022
(all amounts are in EUR thousand unless otherwise stated)
16
2022
2021
2020
2019*
2018
Executive personnel
5,592
6,480
5,765
6,573
6,355
Specialists
2,647
2,399
2,534
2,146
1,569
Workers
1,893
1,782
1,690
1,550
1,091
Total
2,001
1,881
1,800
1,643
1,172
* - As a result of the tax reform on 01-01-2019, payroll calculations have changed. The distribution between wages (BRUTO)
and social security contributions has the greatest impact.
Grouping of the personnel according to the education:
The collective agreement is concluded in the Company. The collective agreement was renewed on 10 August 2022. The
agreement is mandatory for all the employees of the Company. The purpose of this agreement is to ensure the harmonious work
of the staff, high level of working conditions of different categories of employees, salary and other working conditions to ensure
additional social guarantees, which are not stated according to the regulations of Lithuanian legislation for the employees of the
Company. The collective agreement includes the working contract formation, change, termination, work and rest time, payment
for the work done, improvement of the qualification of the employees, safety at work and medical assistance, social care, trade
union activity and guarantees of the elected employees. If the terms and conditions of the collective agreement are more
favorable compared to the working contract, then the collective agreement is followed.
3. REFERENCES AND ADDITIONAL EXPLANATIONS ABOUT THE INFORMATION PRESENTED IN THE ANNUAL
FINANCIAL STATEMENTS
All information is presented in the annual financial statements and the explanatory notes.
4. INFORMATION ABOUT OWN SHARES
The Company did not have any own shares, did not acquire or transfer any in the reporting period.
5. INFORMATION ABOUT THE BRANCHES AND REPRESENTATIVE OFFICES OF THE COMPANY
The Company does not have any branches or representative offices.
47
205
176
76
88
35
1
Basic school
Secondary
Speciality
College or higher
Higher university
Failed to present
documents
Unfinished secondary
VILNIAUS BALDAI AB, company code 121922783, Savanoriu Ave. 178B, Vilnius, Lithuania
CONSOLIDATED ANNUAL REPORT FOR THE FY2022 ENDED 31 AUGUST 2022
(all amounts are in EUR thousand unless otherwise stated)
17
6. IMPORTANT EVENTS, WHICH HAVE OCCURED AFTER FINANCIAL YEAR END
On the 3rd of November 2022 the Annual General Shareholders Meeting of VILNIAUS BALDAI AB was decided to change the
registered address of the Company to Pramonės st. 23, Guopstų vil., Trakų district, LT-21148
7. OPERATING PLANS AND FORECASTS OF THE GROUP’S ACTIVITY
In 2020, the first stage of the new Vilniaus baldai AB factory project was completed. The new factory was built and equipped,
new production lines were installed, and furniture production was gradually started in Guopstos Village, Trakai District. During
FY2022, the company also implemented the mid-second phase of the relocation, where the entire old factory was relocated. It
is planned that the new factory and modern process automation, robotization and technological solutions will be installed in it,
allowing the Company to increase its capacity, improve working conditions, increase process efficiency and to reduce energy
consumption, the amount of carbon dioxide released into the environment and the amount of waste generated.
Due to the invasion of Ukraine by the Russian Federation has restricted economic relations with the Russian Federation and the
Republic of Belarus. About 3% of the Company's entire production was sold in these markets. There are currently no direct
purchases from Russia or Belarus. There are no other requirements and restrictions established by the State to the issuer’s
activity. Due to high geopolitical uncertainty, the Company faces the rise of raw material and energy prices. The availability of
the necessary raw materials and their price changes are seen as the main challenges affecting the Company's financial results.
Last year, one of the largest new factory projects in the Company's history was successfully completed. Currently, all production
lines have been relocated and operate in one factory, which allows us to fully concentrate on improving the production flow,
increasing efficiency, saving of electricity use, ensuring quality and improving its indicators. In the next financial year, the new
production base will allow a significant increase in production efficiency and the use of resources while saving duplicate costs,
which will allow to amortize possible future unfavorable market trends. The Company's production and sales volumes will depend
on the order volumes of the main customer, with whom the Company has signed a long-term agreement ensuring a certain
stable flow of orders. In the light of the geopolitical uncertainties and global economic trends, this is evaluated as a risk that
could affect the Company’s sales and financial results in the short-term.
8. INFORMATION ABOUT THE RESEARCH AND DEVELOPMENT ACTIVITY OF THE COMPANY
The Company did not carry out any research or development activity. The Company used the results of the customers’ research.
9. WHEN THE GROUP EMPLOYS FINANCIAL INSTRUMENTS AND WHEN IT IS IMPORTANT FOR THE VALUATION OF
THE COMPANY’S ASSETS, EQUITY, LIABILITIES, FINANCIAL POSITION AND ACTIVITY RESULTS OF THE COMPANY,
THE COMPANY DISCLOSES THE OBJECTIVES OF THE FINANCIAL RISK MANAGEMENT, ITS POLICY FOR HEDGING
MAJOR TYPES OF FORECASTED TRANSACTIONS FOR WHICH HEDGE ACCOUNTING IS USED, AND COMPANY’S
EXPOSURE TO PRICE RISK, CREDIT RISK, LIQUIDITY RISK AND CASH FLOW RISK
The Group did not use any financial instruments, which are important to the evaluation of the Group’s assets, liabilities, financial
position and operation results.
VILNIAUS BALDAI AB, company code 121922783, Savanoriu Ave. 178B, Vilnius, Lithuania
CONSOLIDATED ANNUAL REPORT FOR THE FY2022 ENDED 31 AUGUST 2022
(all amounts are in EUR thousand unless otherwise stated)
18
COMPANY MANAGEMENT REPORT
1. INFORMATION ON THE CONTRACTS WITH THE INTERMEDIARIES OF THE PUBLIC TURNOVER OF THE SECURITIES
All contractual obligations accounting and dividend pay-out to shareholders contracts were taken over by Siauliu bankas AB
(Seimyniskių str. 1A, Vilnius).
2. STRUCTURE OF THE ISSUER’S AUTHORISED CAPITAL
Structure of the authorised capital of Vilniaus Baldai AB:
Type of shares
Number of
shares, units
Nominal
value, EUR
Total nominal
value, EUR
Share in the authorised
capital, %
Ordinary registered shares
3,886,267
1.16
4,508,069.72
100.00
The Company’s authorised share capital is divided into 3,886,267 ordinary registered shares with the par value of EUR 1.16
each. The shares are uncertificated. They are recorded in personal securities accounts of shareholders. These accounts are
managed following the procedure established by regulatory legislation on the securities market.
Rights and obligations carried by the shares
The shareholders have no property obligations to the Company, except for the obligation to pay up, in the established manner,
all the shares subscribed for at their issue price.
If the General Meeting takes a decision to cover the losses of the Company from additional contributions made by the
shareholders, the shareholders who voted "for" shall be obligated to pay the contributions. The shareholders who did not attend
the General Meeting or voted against such a resolution shall have the right to refrain from paying additional contributions.
A shareholder shall repay to the Company any dividend paid out in violation of the mandatory norms of the Law on Companies
of the Republic of Lithuania, if the Company proves that the shareholder knew or should have known thereof.
Rights and obligations carried by the shares
The shareholders have the following property and non-property rights:
1. to receive a part of the Company’s profit (dividend);
2. to receive Company’s funds when the authorized capital of the Company is decreased in order to pay the Company’s
funds to the shareholders;
3. to receive shares without payment if the authorized capital is increased out of the Company’s funds except in cases
provided for by the Law on Companies of the Republic of Lithuania;
4. to have the pre-emption right in acquiring shares or convertible debentures issued by the Company, except in cases
when the General Meeting in the manner prescribed in the Law on Companies of the Republic of Lithuania decides to
withdraw the pre-emption right in acquiring the Company’s newly issued shares or convertible debentures for all the
shareholders;
5. to lend the Company in the manner prescribed by laws, but the Company, borrowing from its shareholders has no right
to mortgage its property to shareholders. The interest shall not exceed the average interest rate of commercial banks
in the lender’s place of residence or business in force at the time of the loan contract when the Company is borrowing
from the shareholder. In this case it is prohibited to the Company and its shareholders to agree on a higher interest
rate;
6. to receive a part of assets of the Company in liquidation;
7. other statutory property rights;
8. the rights, indicated in items 1–4, are granted to those persons who were the Company’s shareholders at the tenth day
after the decision that was accepted at the end of general shareholders’ meeting (hereinafter – at the end of right record
day);
9. to participate in general shareholders’ meetings;
10. to submit the questions related to the agenda of general shareholders’ meetings to the Company in advance;
11. to vote at general shareholders’ meetings according to voting rights carried by their shares. Each registered ordinary
share carries one vote at the general shareholders’ meeting except the exceptions indicated in the Law on Companies
of the Republic of Lithuania. The right to vote at the general shareholders’ meetings may be prohibited or restricted by
the Law on Companies of the Republic of Lithuania and other cases established by law, as well as, when the ownership
of the share is being disputed;
12. to receive information on the Company as indicated in the Law on Companies of the Republic of Lithuania;
13. to file a claim with the court for reparation of the Company’s damage resulting from nonfeasance or malfeasance by
the Company’s executive and board members of their obligations prescribed by the Law on Companies of the Republic
of Lithuania and other laws as well as Company’s regulations;
14. to authorize natural or legal person to represent him in relations with the Company and other persons;
VILNIAUS BALDAI AB, company code 121922783, Savanoriu Ave. 178B, Vilnius, Lithuania
CONSOLIDATED ANNUAL REPORT FOR THE FY2022 ENDED 31 AUGUST 2022
(all amounts are in EUR thousand unless otherwise stated)
19
15. other non-property rights established by the Law on Companies of the Republic of Lithuania, other laws or the
Company’s regulations.
3. SHAREHOLDERS
Total number of the shareholders as of 31 of August 2021 is 1,366.
The shareholders who had upon the property rights or possessed more than 5% of the issuer’s authorised capital as of 31 August
2021:
Names of the companies, office addresses,
codes
Number of shares
owned under the
property rights, units
Part of the authorised
capital, %
Part of the votes, %
Invalda Privatus Kapitalas AB, company code
303075527, Seimyniskiu str. 1 A, Vilnius
3,407,135
87.67
87.67
Authorised capital structure, %. Distribution of the shareholders of Vilniaus Baldai AB
by countries, 31/08/2022
There are no shareholders, having any special rights of control.
There are no voting rights restrictions.
The Company is not aware of any agreements between the shareholders, because of which the transfer of the securities and
(or) the voting right could be limited.
4. INFORMATION ABOUT THE ISSUER’S STOCK EXCHANGE TRADING ON THE REGULATED MARKETS
The Company’s ordinary shares are registered on the Secondary list of Nasdaq Vilnius AB.
The main characteristics of shares:
Type of shares
VP ISIN code
Abbreviation
Number of
shares, units.
Nominal
value, EUR
Total nominal
value, EUR
Ordinary registered shares
LT0000104267
VBL1L
3,886,267
1.16
4,508,069.72
The trade of the shares of the Company:
2022
2021
2020
2019
2018
Price of the shares, EUR:
- opening
10,6
8,5
7,15
10,9
13,3
- highest
10,8
11,2
11,6
10,7
13,6
- lowest
7,0
8,05
5,7
7
10,7
- closing
8,1
10,6
8,5
7,15
10,9
Turnover of shares, units
22,441
30,623
40.167
91.269
23.834
Turnover of shares, EUR
202,900
308,827
309.662
613.459
294.980
Total number of transactions, units
821
1,138
708
251
344
Capitalization, million EUR
31,48
41,19
33,03
27,79
42,36
87.67
12.33
Invalda privatus kapitalas AB
Other
DE 5
EE 27
LT 1 325
LV 9
DE EE LT LV
VILNIAUS BALDAI AB, company code 121922783, Savanoriu Ave. 178B, Vilnius, Lithuania
CONSOLIDATED ANNUAL REPORT FOR THE FY2022 ENDED 31 AUGUST 2022
(all amounts are in EUR thousand unless otherwise stated)
20
Shares turnover and price of Vilniaus Baldai AB in the period of 01/09/2018–31/08/2022:
Comparison of the price of shares of Vilniaus Baldai AB with the OMXBB and OMXV index in the period of 01/09/2018–
31/08/2022:
VILNIAUS BALDAI AB, company code 121922783, Savanoriu Ave. 178B, Vilnius, Lithuania
CONSOLIDATED ANNUAL REPORT FOR THE FY2022 ENDED 31 AUGUST 2022
(all amounts are in EUR thousand unless otherwise stated)
21
5. DIVIDENDS
The general shareholders’ Meeting decides upon dividend payment and sets the amount of dividends. The company pays out
the dividends within 1 month after the day of adoption of the resolution on profit distribution. Persons have the right to receive
dividends if they were shareholders of the Company at the end of the tenth working day after the day of the general shareholders’
meeting which issued the resolution to pay dividends.
Vilniaus Baldai AB dividend payments during the past 5 years:
Dividend
2022
(for 2021)
2021
(for 2020
2020
(for 2019)
2019
(for 2018)
2018
(for 2017)
Dividend (Eur)
0
0
0
310,901
1,044,633
Dividend per share (Eur)
0
0
0
0.08
0.27
Number of shares
3,886,267
3,886,267
3,886,267
3,886,267
3,886,267
6. ORDER OF CHANGING OF THE ISSUER’S ARTICLES OF ASSOCIATION
The Articles of Company are changed by the resolution of the General Meeting of shareholders, adopted by the majority of more
than 2/3 of all the votes.
7. ISSUER’S BODIES
The Company has the General Meeting of shareholders, a one-man management body – chief executive officer (General
Manager) and the collegial management body – the Board. The Company does not have Supervisory Board.
The Board of the Company consists of 3 members. It is elected for the period of four years by the General Meeting. The Board
of the Company elects and withdraws and dismisses from the position the Chief Executive Officer, determines his salary,
confirms the job descriptions, appoints him and imposes penalties.
The competence of the General Manager and the Board of the Company, the procedure of their appointment and removal does
not differ from what is specified in the Law on Companies. The Board is made up of people with different professional experiences
and competencies. All Board members are closely acquainted. There are no requirements for the composition of the board that
could discriminate in any way on the basis of sex.
The Board and Administration of the Company:
Mr. Vytautas Bucas
Position
Chairman of the Board, elected to the Board on 12.04.2007, re-elected on 29.04.2008, 27.04.2012,
and 05.07.2016 end of the term – 2024.
Work experience
Since May 2013 Adviser, Chairman of the Board of Invalda Privatus Kapitalas AB
2006–May 2013 Adviser of Invalda LT AB, Board member (since May 2007 until May 2013 Chairman
of the Board)
2006–2007 Director of Invaldos Nekilnojamojo Turto Fondas AB
2000–2006 SEB Bankas AB, Board member, Vice President, CFO, Head of IT Department
1992–2000 Senior Auditor, Senior Manager, Manager at Arthur Andersen
Participation in the activities of other companies
Chairman of the Board of Invalda Privatus Kapitalas AB
Number of shares and of voting rights
39.63% of shares and of voting rights
Chairman of the Board of Bordena UAB
0.00%
VILNIAUS BALDAI AB, company code 121922783, Savanoriu Ave. 178B, Vilnius, Lithuania
CONSOLIDATED ANNUAL REPORT FOR THE FY2022 ENDED 31 AUGUST 2022
(all amounts are in EUR thousand unless otherwise stated)
22
Mr. Dalius Kaziunas
Position
Board member, elected to the Board on 29.04.2010, re-elected on 27.04.2012 and 05.07.2016 end of
the term – 2024.
Work experience
Since May 2013 CEO, Board member of Invalda Privatus Kapitalas AB
2012–May 2013 President of Invalda LT AB, Board member (until 30.04.2012)
2008–2011 Adviser and Board member of Invalda LT AB
2008–2009 Director of Bankas Finasta AB
1996–February 2008 assistant of financial broker of FMI Finasta AB, financial broker, Director
Participation in the activities of other companies
CEO and Board member of Invalda Privatus Kapitalas
AB
Number of shares and of voting rights
1.7% of shares and of voting rights
Chairman of the Board of Lauko Gelininkystes
Bandymu Stotis UAB
0.00%
Member of the Supervisory Board at Vernitas AB
0.00%
Chairman of the Board of Invetex UAB
0.00%
Member of the Board of Bordena UAB
0.00%
Chairman of the Board of Svytejimas UAB
0.00%
Mr. Andrius Anusauskas
Position
Chairman of the Board, elected to the Board on 08.10.2020, end of the term – 2024.
Work experience
Since August 2018 Finance director at Inreal valdymas, UAB
2013 – 2018 Finance project manager at Invalda privatus kapitalas, AB
2008 – 2013 Finance project manager at Invalda, AB
2006 – 2008 CFO at SNORO fondų valdymas, UAB
2004 – 2006 Accountant at Finasta, AB FMĮ
2002 – 2004 Accountant at Labochema, UAB
Participation in the activities of other companies
Number of shares and voting rights
Member of the Board at Invetex, UAB
0,00 %
Member of the Board at Lauko Gėlininkystės Bandymų
Stotis, UAB
0,00 %
Director at Kulpės slėnis, UAB
0,00 %
Director at Invetex, UAB
0,00 %
Director at Deltuvis, UAB
0,00 %
Director at Juozapavičiaus 7, UAB
0,00 %
Director at POMUS, UAB
100,00%
Liquidator at Dangės krantinės, UAB
0,00 %
Liquidator at LT investicijos, UAB
0,00 %
Liquidator at Variagis, UAB
0,00 %
Mr. Jonas Krutinis
Position
Head of Finance Department since 23-02-2015, Head of Finance since 12-10-2015, General manager
since 15-05-2018.
Work experience
2014–2015 Business Intelligence Manager at SEB Baltics
2006–2014 Deputy Chairman of the Management Board, Head of Business Support, CFO at SEB
Bank, Russia
2002–2006 Head of Planning at SEB Vilniaus bankas AB
1999–2002 Business Consultant at Arthur Andersen UAB
1997–1999 Analyst at VB Vilfima UAB
1995–1997 Specialist at CSDL
Participation in the activities of other companies
Board member of Autoverslas UAB
Number of shares and of voting rights
0.00%
The Company’s key management personnel include the Company’s General Manager, Chief Financial Officer, Head of
Technical Services, Chief Operating Officer, Head of HR, Head of Purchasing, Strategic Projects Manager and Head of Business
VILNIAUS BALDAI AB, company code 121922783, Savanoriu Ave. 178B, Vilnius, Lithuania
CONSOLIDATED ANNUAL REPORT FOR THE FY2022 ENDED 31 AUGUST 2022
(all amounts are in EUR thousand unless otherwise stated)
23
Development. In 2022 the average monthly remuneration to the management of the Company amounted to EUR 46 thousand
(2021 – EUR 62 thousand). The remuneration is not paid to the Board members of the Company.
Remuneration to the management members of the Company (in thousand EUR):
2022
2021
2020*
2019
2018
Wages, salaries
539
732
604
391
392
Social security
10
12
11
38
122
Total
549
744
615
429
514
* - since 2020, the key management team has been supplemented by three Head managers
* - As a result of the tax reform on 01-01-2019, payroll calculations have changed. The distribution between wages (BRUTO)
and social security contributions has the greatest impact.
During 2022 the Company did not transfer any assets to the Board members, the Company’s General Director, Head of Finance
department; it also did not provide any guarantees or warranties, by which the performance of their liabilities would be se cured.
8. SIGNIFICANT AGREEMENTS IN WHICH THE COMPANY IS INVOLVED AND WHICH WOULD BECOME EFFECTIVE,
WOULD CHANGE OR WOULD BE TERMINATED IF THE CONTROL OF ISSUER CHANGED
During 2022 no material agreements were signed which would become effective, would change or would be terminated if the
control of the issuer changed. Furthermore, there were no agreements signed during 2022 between the Company and its body,
employees which allow compensations if they resign or are fired without the justified reason or their work finishes as a result of
the change of the issuer’s control.
9. RELATED PARTY TRANSACTIONS
The parties are considered related when one party has the possibility to control the other one or have significant influence over
the other party in making financial and operating decisions. The related parties of the Company as of 31 August 2022 were: ARI-
LUX UAB (the subsidiary) – reg.no 120989619, address Savanorių pr. 178B, LT-03154 Vilnius, Invalda Privatus Kapitalas AB
(ultimate shareholder) – reg.no 303075527, address Žalgirio g. 92-901, LT-09303 Vilnius and all companies controlled by Invalda
Privatus Kapitalas AB (Bordena UAB – reg.no 304073881, address Žemaičių g. 49B, Ariogala, LT-60253 Raseinių r, Krevina
UAB – reg.no 303261364, address Žalgirio g. 94, LT-09300 Vilnius, Svytejimas UAB – reg.no 123017127, buveinės adresas
Švenčionių g. 110A, Nemenčinė, Vilniaus r., Inreal valdymas UAB – reg.no 222894170, address Žalgirio g. 94, LT-09300 Vilnius,
Inreal Geo UAB – reg.no 302604810, address Žalgirio g. 94, LT-09300 Vilnius , Geruvis UAB – reg.no 303569472, address
Smiltynės g. 25, LT-93100 Klaipėda, Panerių konversija UAB – reg.no 305993224, address Žalgirio g. 94-1, LT-09300 Vilnius)
(as of 31 August 2021: ARI-LUX UAB (the subsidiary), Invalda Privatus Kapitalas AB (shareholder) and all companies controlled
by Invalda Privatus Kapitalas).
Transactions with the Group’s related parties in 2022 and 2021 and the balances in 2022 and 2022 are provided in the notes
(Note 25) to the consolidated and Company’s financial statements for the year 2022.
10. INFORMATION REGARDING COMPLIANCE WITH THE GOVERNANCE CODE OF LISTED COMPANIES
The Company complies with the principles set out by the governance code of companies listed on Nasdaq Vilnius AB stock
exchange. Compliance with the governance code in accordance with the form approved by the stock exchange is disclosed in
the appendix to this annual report.
11. DATA ON THE PUBLICLY DISCLOSED INFORMATION
The information publicly disclosed by Vilniaus Baldai AB during 2022 is presented in the Company’s website
www.vilniausbaldai.lt.
VILNIAUS BALDAI AB, company code 121922783, Savanoriu Ave. 178B, Vilnius, Lithuania
CONSOLIDATED ANNUAL REPORT FOR THE FY2022 ENDED 31 AUGUST 2022
(all amounts are in EUR thousand unless otherwise stated)
24
Summary of publicly disclosed information during 2022:
Date of
disclosure
Brief description of disclosed information
25-11-2022
UPDATE: VILNIAUS BALDAI AB investor's calendar for 2022FY
03-11-2022
Resolutions of the general shareholders meeting of VILNIAUS BALDAI AB on 03/11/2022
24-10-2022
VILNIAUS BALDAI AB result for activity and non audited condensed interim consolidated financial
statement for the twelve months of FY 2022
12-10-2022
Convocation of the general shareholders meeting of VILNIAUS BALDAI AB and draft resolutions
27-06-2022
VILNIAUS BALDAI AB result for activity and unaudited interim condensed consolidated financial
statements for the nine months of FY 2022
01-04-2022
VILNIAUS BALDAI AB result for activity and unaudited interim condensed consolidated financial
statements for the six months of FY 2022
28-02-2022
Resolutions of the Annual General Shareholders Meeting of VILNIAUS BALDAI AB on 28/02/2022
17-02-2022
UPDATE: Convocation of the general shareholders meeting of VILNIAUS BALDAI AB and draft
resolutions
07-02-2022
Convocation of the general shareholders meeting of VILNIAUS BALDAI AB and draft resolutions
23-12-2021
VILNIAUS BALDAI AB result for activity and non audited condensed interim consolidated financial
statement for the three months of FY 2022
22-12-2021
Resolutions of the Annual General Shareholders Meeting of VILNIAUS BALDAI AB on 22/12/2021
03-12-2021
VILNIAUS BALDAI AB investor's calendar for 2022FY
30-11-2021
Convocation of the general shareholders meeting of VILNIAUS BALDAI AB and draft resolutions
26-11-2021
VILNIAUS BALDAI AB annual audited information for the year 2021
26-11-2021
Social Responsibility Report 2021
22-11-2021
AB VILNIAUS BALDAI starts the last stage of the new factory project and signs an investment
agreement worth EUR 6 million with the State Investment Management Agency
25-10-2021
VILNIAUS BALDAI AB result for activity and non-audited condensed interim consolidated financial
statement for the twelve months of FY 2021
VILNIAUS BALDAI AB, company code 121922783, Savanoriu Ave. 178B, Vilnius, Lithuania
CONSOLIDATED ANNUAL REPORT FOR THE FY2022 ENDED 31 AUGUST 2022
(all amounts are in EUR thousand unless otherwise stated)
25
COMPANY REMUNERATION REPORT
General Information
AB “VILNIAUS BALDAI” (hereinafter – the Company) prepared the Company Remuneration Report (hereinager – the Report)
for the 2022 financial year, which started on 1 September 2021 and ended on 31 August 2022. It is the first time that AB
“VILNIAUS BALDAI” prepare the Company Remuneration Report. The Report is prepared in accordance with the Law of the
Republic of Lithuania on Financial Reporting by Undertakings as well as other legal acts.
The Company Remuneration Policy was approved by the Company’s shareholders at the General Meeting (hereinafter – the
GM) held on 8 October 2020. The Report outlines the principles of remuneration for each member of the Board of Directors
(hereinafter – the Board) and the Audit Committee as well as provides information about other financial benefits.
Remuneration of Members of Board of Directors
Members of the Board are elected for the duration of four years as specified in the Articles of Association. Bonuses to the
members of the Board are approved and become payable by the decision of the Company’s shareholders at the GM in
accordance with relevant legal acts.
Once the total amount of the bonuses available for distribution is approved at the GM, members of the Board determine how
such bonus is divided among the members of the Board, depending on each member’s contribution to Company’s performance.
Members of the Board may receive remuneration from the Company according to clauses of their contracts of employment with
the Company. Such clauses must be approved by the Board as well as the Audit Committee in advance.
Should members of the Board enter into Directors‘ Service Contracts with the Company, such contracts shall come into force
only by the decision taken at the GM.
Members of the Board shall not be entitled to receive any other types of remuneration or other benefits from the Company unless
such benefits are agreed at the GM.
Remuneration of the General Manager
The General Manager shall receive renumeration consisting of a fixed and variable portions:
1) Fixed remuneration is a fixed salary amount payable monthly and in accordance with the non-fixed term
employment contract between the General Manager and the Company. Such salary amount is determined by the
Board.
2) Variable remuneration is portion of the renumeration which depends on the financial performance of the Company.
The amount of variable renumeration is determined by the Board and is payable on an annual basis.
The Board has the right to approve contractual arrangements between the General Manager and the Company in respect of
additional pensions benefits, early retirement benefits as well as payments in respect of termination of the contract of
employment.
The Company does not make any deferred payments of renumeration and does not exercise the option to recover a variable
portion of remuneration.
Company Remuneration Policy for FY2022
Key financial indicators of the Group during the period of FY2018 to FY2022:
2022 m.
2021 m.
2020 m.
2019 m.
2018 m.
Net profitability = net profit / turnover * 100
1,45%
0,17%
6,86%
5,41%
3,25%
EBITDA margin = EBITDA / turnover * 100
8,44%
5,55%
9,89%
7,50%
6,10%
Turnover (million EUR)
100,74
99,36
73,32
75,20
69,32
Net profit (million EUR)
1,46
0,17
5,03
4,07
2,26
EBITDA (million EUR)
8,51
5,52
7,25
5,64
4,23
EBIT (million EUR)
4,00
1,48
4,27
3,93
2,65
VILNIAUS BALDAI AB, company code 121922783, Savanoriu Ave. 178B, Vilnius, Lithuania
CONSOLIDATED ANNUAL REPORT FOR THE FY2022 ENDED 31 AUGUST 2022
(all amounts are in EUR thousand unless otherwise stated)
26
Remuneration of Company‘s employees consists of a fixed and variable portions. The variable portion of remuneration is based
on performance of the Company.
Remuneration of Company‘s employees during the period of FY2018 to FY2022, EUR:
FY2022
FY2021
FY2020
FY2019*
FY2018
Executive personnel
5.592
6.480
5.765
6.573
6.355
Specialists
2.647
2.399
2.534
2.146
1.569
Workers
1.893
1.782
1.690
1.550
1.091
Total
2.001
1.881
1.800
1.643
1.172
* - As a result of the tax reform on 01-01-2019, payroll calculations have changed. The distribution between wages (BRUTO)
and social security contributions has the greatest impact.
Information about the Renumeration to the Members of the Board and Key Management Personnel in FY2022
In FY2022 the remuneration was not paid to the Board members of the Company.
In FY2022 a fixed portion of remuneration of 94 thousand EUR was paid to the General Manager, in accordance with the non-
fixed term employment contract between the General Manager and the Company.
Remuneration of the General Manager of the Company in FY2022:
Fixed
remuneration,
EUR
Variable
remuneration, EUR
Other benefits,
EUR
Jonas Krutinis
94,050
0
21,979
The General Manager of the Company did not receive any renumeration from the Company which belongs to the Group of
companies, as defined by the Law of the Republic of Lithuania on Consolidated Financial Reporting by Groups of Undertakings
.
The General Manager of the Company was not offered and did not receive any Company shares or options of the Company
shares.
The Company does not make any deferred payments of renumeration and does not exercise the option to recover a variable
portion of remuneration.
In FY2022 there were no deviations from the Company Renumeration Policy.
VILNIAUS BALDAI AB, company code 121922783, Savanoriu Ave. 178B, Vilnius, Lithuania
CONSOLIDATED ANNUAL REPORT FOR THE FY2022 ENDED 31 AUGUST 2022
(all amounts are in EUR thousand unless otherwise stated)
27
SOCIAL RESPONSIBILITY REPORT
The Company’s Social Responsibility report is available on the Company’s internet page www.vilniausbaldai.lt and on stock
exchange AB Nasdaq Vilnius.
General Manager Jonas Krutinis
VILNIAUS BALDAI AB, company code 121922783, Savanoriu Ave. 178B, Vilnius, Lithuania
CONSOLIDATED ANNUAL REPORT FOR THE FY2022 ENDED 31 AUGUST 2022
(all amounts are in EUR thousand unless otherwise stated)
28
APPENDIX TO THE CONSOLIDATED ANNUAL REPORT
VILNIAUS BALDAI AB REPORT ON THE COMPLIANCE WITH THE GOVERNANCE CODE FOR THE COMPANIES
LISTED ON THE STOCK EXCHANGE NASDAQ VILNIUS REGULATED MARKET FOR THE FY2021
The public company Vilniaus Baldai AB (hereinafter – “the Company”), following Article 21(3) of the Law on Securities of the
Republic of Lithuania and item 24.5 of the Trading Rules of the stock exchange NASDAQ Vilnius AB, discloses its compliance
with the Governance Code, approved for the companies listed on the regulated market, and its specific provisions. In the event
of non-compliance with the Code or with certain provisions thereof, it must be specified which provisions are not complied with
and the reasons of non-compliance.
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 fully follows the
provisions listed in this
recommendation.
1.2. It is recommended that the company’s capital should consist
only of the shares that grant the same rights to voting, ownership,
dividend and other rights to all of their holders.
Yes
The Company’s capital
consists of ordinary shares that
grant the same rights to all their
holders.
1.3. It is recommended that investors should have access to the
information concerning the rights attached to the shares of the new
issue or those issued earlier in advance, i.e. before they purchase
shares.
Yes
The Company fully follows the
provisions listed in this
recommendation.
VILNIAUS BALDAI AB, company code 121922783, Savanoriu Ave. 178B, Vilnius, Lithuania
CONSOLIDATED ANNUAL REPORT FOR THE FY2022 ENDED 31 AUGUST 2022
(all amounts are in EUR thousand unless otherwise stated)
29
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.
No
The Company does not follow
this provision because of the
established routine practice,
which resulted from the faster
and timely decision-making
process. The Company’s Board
adopts decisions on these
matters.
1.5. Procedures for convening and conducting a general meeting
of shareholders should provide shareholders with equal
opportunities to participate in the general meeting of shareholders
and should not prejudice the rights and interests of shareholders.
The chosen venue, date and time of the general meeting of
shareholders should not prevent active participation of
shareholders at the general meeting. In the notice of the general
meeting of shareholders being convened, the company should
specify the last day on which the proposed draft decisions should
be submitted at the latest.
Yes
All the shareholders of the
Company are informed about
the date, venue and time of the
General Meeting. Prior to the
General Meeting of
Shareholders all the
shareholders have possibility to
receive information related to
the agenda of the General
Meeting.
1.6. With a view to ensure the right of shareholders living abroad
to access the information, it is recommended, where possible, that
documents prepared for the general meeting of shareholders in
advance should be announced publicly not only in Lithuanian
language but also in English and/or other foreign languages in
advance. It is recommended that the minutes of the general meeting
of shareholders after the signing thereof and/or adopted decisions
should be made available publicly not only in Lithuanian language
but also in English and/or other foreign languages. It is
recommended that this information should be placed on the website
of the company. Such documents may be published to the extent
that their public disclosure is not detrimental to the company or the
company’s commercial secrets are not revealed.
Yes
The Company discloses the
documents prepared for the
General Meeting, including draft
resolutions of the meetings via
the information disclosure
system of AB NASDAQ Vilnius
Stock Exchange. The
information is e-mailed to each
shareholder on request. This
information is also publicly
accessible on the website of the
Company.
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 of the Company
can implement the right to
participate at the General
Meeting of Shareholders either
in person, or through the
representative, if a person has
the duly issued Power of
Attorney. The Company also
provides the possibilities for the
shareholders to vote by
completing the general voting
ballot.
1.8. With a view to increasing the shareholders’ opportunities to
participate effectively at general meetings of shareholders, it is
recommended that companies should apply modern technologies
on a wider scale and thus provide shareholders with the conditions
to participate and vote in general meetings of shareholders via
electronic means of communication. In such cases the security of
transmitted information must be ensured and it must be possible to
identify the participating and voting person.
Not applicable
Until now the Company has not
had any need to implement this
recommendation. Shareholders
of the Company can vote
through the authorized person
or completing the general voting
ballot.
VILNIAUS BALDAI AB, company code 121922783, Savanoriu Ave. 178B, Vilnius, Lithuania
CONSOLIDATED ANNUAL REPORT FOR THE FY2022 ENDED 31 AUGUST 2022
(all amounts are in EUR thousand unless otherwise stated)
30
1.9. It is recommended that the notice on the draft decisions of the
general meeting of shareholders being convened should specify
new candidatures of members of the collegial body, their proposed
remuneration and the proposed audit company if these issues are
included into the agenda of the general meeting of shareholders.
Where it is proposed to elect a new member of the collegial body, it
is recommended that the information about his/her educational
background, work experience and other managerial positions held
(or proposed) should be provided.
Yes
The Company follows this
recommendation.
1.10. Members of the company’s collegial management body,
heads of the administration
1
or other competent persons related to
the company who can provide information related to the agenda of
the general meeting of shareholders should take part in the general
meeting of shareholders. Proposed candidates to member of the
collegial body should also participate in the general meeting of
shareholders in case the election of new members is included into
the agenda of the general meeting of shareholders.
Yes
The Company follows this
recommendation.
Principle 2: Supervisory board
2.1. Functions and liability of the supervisory board
The supervisory board of the company should ensure representation of the interests of the company and its
shareholders, accountability of this body to the shareholders and objective monitoring of the company’s
operations and its management bodies as well as constantly provide recommendations to the management
bodies of the company.
The supervisory board should ensure the integrity and transparency of the company’s financial accounting and
control system.
2.1.1. Members of the supervisory board should act in good faith,
with care and responsibility for the benefit and in the interests of the
company and its shareholders and represent their interests, having
regard to the interests of employees and public welfare.
Not applicable
The Supervisory board is not
formed in the Company. The
functions of the Supervisory
Board are performed by the
Board of the Company.
2.1.2. Where decisions of the supervisory board may have a
different effect on the interests of the company’s shareholders, the
supervisory board should treat all shareholders impartially and
fairly. It should ensure that shareholders are properly informed
about the company’s strategy, risk management and control, and
resolution of conflicts of interest.
Not applicable
Members of the Supervisory
Board are not appointed by the
Company.
2.1.3. The supervisory board should be impartial in passing
decisions that are significant for the company’s operations and
strategy. Members of the supervisory board should act and pass
decisions without an external influence from the persons who
elected them.
Not applicable
Members of the Supervisory
Board are not appointed by the
Company.
1
For the purposes of this Code, heads of the administration are the employees of the company who hold top level management positions.
VILNIAUS BALDAI AB, company code 121922783, Savanoriu Ave. 178B, Vilnius, Lithuania
CONSOLIDATED ANNUAL REPORT FOR THE FY2022 ENDED 31 AUGUST 2022
(all amounts are in EUR thousand unless otherwise stated)
31
2.1.4. Members of the supervisory board should clearly voice their
objections in case they believe that a decision of the supervisory
board is against the interests of the company. Independent
2
members of the supervisory board should: a) maintain
independence of their analysis and decision-making; b) not seek or
accept any unjustified privileges that might compromise their
independence.
Not applicable
Members of the Supervisory
Board are not appointed by the
Company.
2.1.5. The supervisory board should oversee that the company’s
tax planning strategies are designed and implemented in
accordance with the legal acts in order to avoid faulty practice that
is not related to the long-term interests of the company and its
shareholders, which may give rise to reputational, legal or other
risks.
Not applicable
Members of the Supervisory
Board are not appointed by the
Company.
2.1.6. The company should ensure that the supervisory board is
provided with sufficient resources (including financial ones) to
discharge their duties, including the right to obtain all the necessary
information or to seek independent professional advice from
external legal, accounting or other experts on matters pertaining to
the competence of the supervisory board and its committees.
Not applicable
Members of the Supervisory
Board are not appointed by the
Company.
2
For the purposes of this Code, the criteria of independence of members of the supervisory board are interpreted as the criteria of unrelated
parties defined in Article 31(7) and (8) of the Law on Companies of the Republic of Lithuania.
VILNIAUS BALDAI AB, company code 121922783, Savanoriu Ave. 178B, Vilnius, Lithuania
CONSOLIDATED ANNUAL REPORT FOR THE FY2022 ENDED 31 AUGUST 2022
(all amounts are in EUR thousand unless otherwise stated)
32
2.2. Formation of the supervisory board
The procedure of the formation of the supervisory board should ensure proper resolution of conflicts of
interest and effective and fair corporate governance.
2.2.1. The members of the supervisory board elected by the
general meeting of shareholders should collectively ensure the
diversity of qualifications, professional experience and
competences and seek for gender equality. With a view to
maintain a proper balance between the qualifications of the
members of the supervisory board, it should be ensured that
members of the supervisory board, as a whole, should have
diverse knowledge, opinions and experience to duly perform
their tasks.
No
Members of the
Supervisory Board are not
appointed by the Company.
2.2.2. Members of the supervisory board should be appointed
for a specific term, subject to individual re-election for a new
term in office in order to ensure necessary development of
professional experience.
No
Members of the
Supervisory Board are not
appointed by the Company.
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.
No
Members of the
Supervisory Board are not
appointed by the Company.
2.2.4. Each member should devote sufficient time and attention
to perform his duties as a member of the supervisory board.
Each member of the supervisory board should undertake to limit
his other professional obligations (particularly the managing
positions in other companies) so that they would not interfere
with the proper performance of the duties of a member of the
supervisory board. Should a member of the supervisory board
attend less than a half of the meetings of the supervisory board
throughout the financial year of the company, the shareholders
of the company should be notified thereof.
No
Members of the
Supervisory Board are not
appointed by the Company.
2.2.5. When it is proposed to appoint a member of the
supervisory board, it should be announced which members of
the supervisory board are deemed to be independent. The
supervisory board may decide that, despite the fact that a
particular member meets all the criteria of independence,
he/she cannot be considered independent due to special
personal or company-related circumstances.
No
Members of the
Supervisory Board are not
appointed by the Company.
VILNIAUS BALDAI AB, company code 121922783, Savanoriu Ave. 178B, Vilnius, Lithuania
CONSOLIDATED ANNUAL REPORT FOR THE FY2022 ENDED 31 AUGUST 2022
(all amounts are in EUR thousand unless otherwise stated)
33
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.
No
Members of the
Supervisory Board are not
appointed by the Company.
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.
No
Members of the
Supervisory Board are not
appointed by the Company.
Principle 3: Management Board
3.1. Functions and liability of the management board
The management board should ensure the implementation of the company’s strategy and good corporate
governance with due regard to the interests of its shareholders, employees and other interest groups.
3.1.1. The management board should ensure the
implementation of the company’s strategy approved by the
supervisory board if the latter has been formed at the company.
In such cases where the supervisory board is not formed, the
management board is also responsible for the approval of the
company’s strategy.
Yes
The Company follows this
recommendation.
3.1.2. As a collegial management body of the company, the
management board performs the functions assigned to it by the
Law and in the articles of association of the company, and in
such cases where the supervisory board is not formed in the
company, it performs inter alia the supervisory functions
established in the Law. By performing the functions assigned to
it, the management board should take into account the needs of
the company’s shareholders, employees and other interest
groups by respectively striving to achieve sustainable business
development.
Yes
The Company has a
collegial management body
– the Board.
3.1.3. The management board should ensure compliance with
the laws and the internal policy of the company applicable to the
company or a group of companies to which this company
belongs. It should also establish the respective risk
management and control measures aimed at ensuring regular
and direct liability of managers.
Yes
The Company follows this
recommendation.
VILNIAUS BALDAI AB, company code 121922783, Savanoriu Ave. 178B, Vilnius, Lithuania
CONSOLIDATED ANNUAL REPORT FOR THE FY2022 ENDED 31 AUGUST 2022
(all amounts are in EUR thousand unless otherwise stated)
34
3.1.4. Moreover, the management board should ensure that
the measures included into the OECD Good Practice
Guidance
3
on Internal Controls, Ethics and Compliance are
applied at the company in order to ensure adherence to the
applicable laws, rules and standards.
Yes
The Company follows this
recommendation.
3.1.5. When appointing the manager of the company, the
management board should take into account the appropriate
balance between the candidate’s qualifications, experience and
competence.
Yes
The Company follows this
recommendation.
3
Link to the OECD Good Practice Guidance on Internal Controls, Ethics and Compliance: https://www.oecd.org/daf/anti-
bribery/44884389.pdf
VILNIAUS BALDAI AB, company code 121922783, Savanoriu Ave. 178B, Vilnius, Lithuania
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3.2. Formation of the management board
3.2.1. The members of the management board elected by the
supervisory board or, if the supervisory board is not formed, by the
general meeting of shareholders should collectively ensure the
required diversity of qualifications, professional experience and
competences and seek for gender equality. With a view to maintain
a proper balance in terms of the current qualifications possessed by
the members of the management board, it should be ensured that
the members of the management board would have, as a whole,
diverse knowledge, opinions and experience to duly perform their
tasks.
Yes
The Board formation
mechanism allows
ensuring proper monitoring
of the Company. Only a
person, having the proper
qualification can become a
Board member.
3.2.2. Names and surnames of the candidates to become
members of the management board, information on their
educational background, qualifications, professional experience,
current positions, other important professional obligations and
potential conflicts of interest should be disclosed without violating
the requirements of the legal acts regulating the handling of
personal data at the meeting of the supervisory board in which the
management board or individual members of the management
board are elected. In the event that the supervisory board is not
formed, the information specified in this paragraph should be
submitted to the general meeting of shareholders. The
management board should, on yearly basis, collect data provided
in this paragraph on its members and disclose it in the company’s
annual report.
Yes
Information about current
Board members is
presented in the
Company’s periodic
reports.
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
The Company’s Board
members are acquainted
with the Company’s
organisation, its activity and
management specifics.
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
The Company follows this
recommendation. The
Company’s Board are
elected till 2024Y
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
Chairman of the Board of
the Company is not and
was not the chief executive
officer of the Company.
There are no obstacles for
independent and fair
supervision.
VILNIAUS BALDAI AB, company code 121922783, Savanoriu Ave. 178B, Vilnius, Lithuania
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3.2.6. Each member should devote sufficient time and attention to
perform his duties as a member of the management board. Should
a member of the management board attend less than a half of the
meetings of the management board throughout the financial year of
the company, the supervisory board of the company or, if the
supervisory board is not formed at the company, the general
meeting of shareholders should be notified thereof.
Yes
Board members perform
their functions properly:
actively participate in the
Board meetings and devote
sufficient time and attention
to perform their duties.
Board meetings are
attended by all members.
3.2.7. In the event that the management board is elected in the
cases established by the Law where the supervisory board is not
formed at the company, and some of its members will be
independent
4
, it should be announced which members of the
management board are deemed as independent. The management
board may decide that, despite the fact that a particular member
meets all the criteria of independence established by the Law,
he/she cannot be considered independent due to special personal
or company-related circumstances.
Yes
The Company follows this
recommendation.
3.2.8. The general meeting of shareholders of the company should
approve the amount of remuneration to the members of the
management board for their activity and participation in the
meetings of the management board.
Yes
The general shareholders’
meeting approves the
amount of annual tandems
paid to the members of the
Board.
3.2.9. The members of the management board should act in good
faith, with care and responsibility for the benefit and the interests of
the company and its shareholders with due regard to other
stakeholders. When adopting decisions, they should not act in their
personal interest; they should be subject to no-compete
agreements and they should not use the business information or
opportunities related to the company’s operations in violation of the
company’s interests.
Yes
The Company follows this
recommendation.
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.
No
There was no such
practice.
4
For the purposes of this Code, the criteria of independence of the members of the board are interpreted as the criteria of unrelated persons
defined in Article 33(7) of the Law on Companies of the Republic of Lithuania.
VILNIAUS BALDAI AB, company code 121922783, Savanoriu Ave. 178B, Vilnius, Lithuania
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Principle 4: Rules of procedure of the supervisory board and the management board of the company
The rules of procedure of the supervisory board, if it is formed at the company, and of the management
board should ensure efficient operation and decision-making of these bodies and promote active
cooperation between the company’s management bodies.
4.1. The management board and the supervisory board, if the latter
is formed at the company, should act in close cooperation in order
to attain benefit for the company and its shareholders. Good
corporate governance requires an open discussion between the
management board and the supervisory board. The management
board should regularly and, where necessary, immediately inform
the supervisory board about any matters significant for the company
that are related to planning, business development, risk
management and control, and compliance with the obligations at
the company. The management board should inform he supervisory
board about any derogations in its business development from the
previously formulated plans and objectives by specifying the
reasons for this.
Not applicable
Members of the
Supervisory Board are not
appointed by the Company.
4.2. It is recommended that meetings of the company’s collegial
bodies should be held at the respective intervals, according to the
pre-approved schedule. Each company is free to decide how often
meetings of the collegial bodies should be convened but it is
recommended that these meetings should be convened at such
intervals that uninterruptable resolution of essential corporate
governance issues would be ensured. Meetings of the company’s
collegial bodies should be convened at least once per quarter.
Not applicable
Members of the
Supervisory Board are not
appointed by the Company.
VILNIAUS BALDAI AB, company code 121922783, Savanoriu Ave. 178B, Vilnius, Lithuania
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4.3. Members of a collegial body should be notified of the meeting
being convened in advance so that they would have sufficient time
for proper preparation for the issues to be considered at the meeting
and a fruitful discussion could be held and appropriate decisions
could be adopted. Along with the notice of the meeting being
convened all materials relevant to the issues on the agenda of the
meeting should be submitted to the members of the collegial body.
The agenda of the meeting should not be changed or supplemented
during the meeting, unless all members of the collegial body present
at the meeting agree with such change or supplement to the
agenda, or certain issues that are important to the company require
immediate resolution.
Not applicable
Members of the
Supervisory Board are not
appointed by the Company.
4.4. In order to coordinate the activities of the company’s collegial
bodies and ensure effective decision-making process, the chairs of
the company’s collegial supervision and management bodies
should mutually agree on the dates and agendas of the meetings
and close cooperate in resolving other matters related to corporate
governance. Meetings of the company’s supervisory board should
be open to members of the management board, particularly in such
cases where issues concerning the removal of the management
board members, their responsibility or remuneration are discussed.
Not applicable
Members of the
Supervisory Board are not
appointed by the Company.
VILNIAUS BALDAI AB, company code 121922783, Savanoriu Ave. 178B, Vilnius, Lithuania
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Principle 5: Nomination, remuneration and audit committees
5.1. Purpose and formation of committees
The committees formed at the company should increase the work efficiency of the supervisory board or,
where the supervisory board is not formed, of the management board which performs the supervisory
functions by ensuring that decisions are based on due consideration and help organise its work in such a
way that the decisions it takes would be free of material conflicts of interest.
Committees should exercise independent judgment and integrity when performing their functions and
provide the collegial body with recommendations concerning the decisions of the collegial body. However,
the final decision should be adopted by the collegial body.
5.1.1. Taking due account of the company-related
circumstances and the chosen corporate governance structure, the
supervisory board of the company or, in cases where the
supervisory board is not formed, the management board which
performs the supervisory functions, establishes committees. It is
recommended that the collegial body should form the nomination,
remuneration and audit committees
5
.
No
The Committees of
Nomination and
Remuneration are not
established because of the
structural simplicity of the
Company’s management.
Question regarding
establishment of
nomination and
remuneration committees
will be solved in the future
after analysing situation,
evaluating financial
expenses and other
factors, implementing best
practices in the market.
The compliance with the
requirements for the
preparation of the set of the
consolidated financial
statements, internal control
and financial risk
management systems,
legal acts regulating the
preparation of the set of the
consolidated financial
statements is supervised
by the Audit Committee
established on 16
September 2013.
5.1.2. Companies may decide to set up less than three
committees. In such case companies should explain in detail why
they have chosen the alternative approach, and how the chosen
approach corresponds with the objectives set for the three different
committees.
5
The legal acts may provide for the obligation to form a respective committee. For example, the Law on the Audit of Financial
Statements of the Republic of Lithuania provides that public-interest entities (including but not limited to public limited liability
companies whose securities are traded on a regulated market of the Republic of Lithuania and/or of any other Member State)
are under the obligation to set up an audit committee (the legal acts provide for the exemptions where the functions of the audit
committee may be carried out by the collegial body performing the supervisory functions).
VILNIAUS BALDAI AB, company code 121922783, Savanoriu Ave. 178B, Vilnius, Lithuania
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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.
No
The Committees of
Nomination and
Remuneration are not
established because of the
structural simplicity of the
Company’s management.
Question regarding
establishment of
nomination and
remuneration committees
will be solved in the future
after analysing situation,
evaluating financial
expenses and other
factors, implementing best
practices in the market.
The compliance with the
requirements for the
preparation of the set of the
consolidated financial
statements, internal control
and financial risk
management systems,
legal acts regulating the
preparation of the set of the
consolidated financial
statements is supervised
by the Audit Committee
established on 16
September 2013.
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.
No
The Committees of
Nomination and
Remuneration are not
established because of the
structural simplicity of the
Company’s management.
The Audit Committee of
Vilniaus Baldai AB consists
of 3 members, one of them
is independent.
5.1.5. The authority of each committee formed should be
determined by the collegial body itself. Committees should perform
their duties according to the authority delegated to them and
regularly inform the collegial body about their activities and
performance on a regular basis. The authority of each committee
defining its role and specifying its rights and duties should be made
public at least once a year (as part of the information disclosed by
the company on its governance structure and practice on an annual
basis). In compliance with the legal acts regulating the processing
of personal data, companies should also include in their annual
reports the statements of the existing committees on their
composition, the number of meetings and attendance over the year
as well as the main directions of their activities and performance.
No
The Committees of
Nomination and
Remuneration are not
established because of the
structural simplicity of the
Company’s management.
VILNIAUS BALDAI AB, company code 121922783, Savanoriu Ave. 178B, Vilnius, Lithuania
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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.
No
The Committees of
Nomination and
Remuneration are not
established because of the
structural simplicity of the
Company’s management.
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 Committees of
Nomination and
Remuneration are not
established because of the
structural simplicity of the
Company’s management.
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
The Committees of
Nomination and
Remuneration are not
established because of the
structural simplicity of the
Company’s management.
VILNIAUS BALDAI AB, company code 121922783, Savanoriu Ave. 178B, Vilnius, Lithuania
CONSOLIDATED ANNUAL REPORT FOR THE FY2022 ENDED 31 AUGUST 2022
(all amounts are in EUR thousand unless otherwise stated)
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5.3. Remuneration committee
The main functions of the remuneration committee should be as
follows:
1) submit to the collegial body proposals on the remuneration policy
applied to members of the supervisory and management bodies
and the heads of the administration for approval. Such policy should
include all forms of remuneration, including the fixed-rate
remuneration, performance-based remuneration, financial incentive
schemes, pension arrangements and termination payments as well
as conditions which would allow the company to recover the
amounts or suspend the payments by specifying the circumstances
under which it would be expedient to do so;
2) submit to the collegial body proposals regarding individual
remuneration for members of the collegial bodies and the heads of
the administration in order to ensure that they would be consistent
with the company’s remuneration policy and the evaluation of the
performance of the persons concerned;
3) review, on a regular basis, the remuneration policy and its
implementation.
No
The Committees of
Nomination and
Remuneration are not
established because of the
structural simplicity of the
Company’s management.
5.4. Audit committee
The compliance with the requirements for the
preparation of the set of the consolidated
financial statements, internal control and
financial risk management systems, legal acts
regulating the preparation of the set of the
consolidated financial statements is supervised
by the Audit Committee established on 16
September 2013.
The main functions of the Audit Committee of
Vilniaus Baldai AB are:
1. to advice for the Board on the selection,
assignment, repeated assignment and
dismissal of the external audit company and on
the conditions of the agreement with external
audit company;
2. to observe the process of external audit;
3. to observe if external audit company and its
auditors keep the principles of independency
and objectivity;
4. to observe the process of preparation of
financial statements;
5. to observe the efficiency of internal control
and risk management systems and to evaluate
the need of internal audit functions once per
financial year.
6. Currently, there is no separate internal
auditor position in Vilniaus Baldai AB. To
reduce the risk of fraud. The company has an
effective internal control system, which is
implemented through the company's
procedures, procedures and orders, and
internal audits of compliance with procedures.
5.4.1. The key functions of the audit committee are defined in the
legal acts regulating the activities of the audit committee
6
.
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.
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.
5.4.4. The audit committee should be informed about the internal
auditor’s work program and should be furnished with internal audit
reports or periodic summaries. The audit committee should also be
informed about the work program of external auditors and should
receive from the audit firm a report describing all relationships
between the independent audit firm and the company and its group.
6
Issues related to the activities of audit committees are regulated by Regulation No. 537/2014 of the European Parliament and the Council
of 16 April 2014 on specific requirements regarding statutory audit of public-interest entities, the Law on the Audit of Financial Statements
of the Republic of Lithuania, and the Rules Regulating the Activities of Audit Committees approved by the Bank of Lithuania.
VILNIAUS BALDAI AB, company code 121922783, Savanoriu Ave. 178B, Vilnius, Lithuania
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5.4.5. The audit committee should examine whether the company
complies with the applicable provisions regulating the possibility of
lodging a complaint or reporting anonymously his/her suspicions of
potential violations committed at the company and should also
ensure that there is a procedure in place for proportionate and
independent investigation of such issues and appropriate follow-up
actions.
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.
VILNIAUS BALDAI AB, company code 121922783, Savanoriu Ave. 178B, Vilnius, Lithuania
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Principle 6: Prevention and disclosure of conflicts of interest
The corporate governance framework should encourage members of the company’s supervisory and
management bodies to avoid conflicts of interest and ensure a transparent and effective mechanism of
disclosure of conflicts of interest related to members of the supervisory and management bodies.
Any member of the company’s supervisory and management body
should avoid a situation where his/her personal interests are or may
be in conflict with the company’s interests. In case such a situation
did occur, a member of the company’s supervisory or management
body should, within a reasonable period of time, notify other
members of the same body or the body of the company which
elected him/her or the company’s shareholders of such situation of
a conflict of interest, indicate the nature of interests and, where
possible, their value.
Yes
The Company follows this
recommendation.
Principle 7: Remuneration policy of the company
The remuneration policy and the procedure for review and disclosure of such policy established at the
company should prevent potential conflicts of interest and abuse in determining remuneration of members
of the collegial bodies and heads of the administration, in addition it should ensure the publicity and
transparency of the company’s remuneration policy and its long-term strategy.
7.1. The company should approve and post the remuneration policy
on the website of the company; such policy should be reviewed on
a regular basis and be consistent with the company’s long-term
strategy.
Yes
The Company follows this
recommendation.
The Company’s
remuneration policy is
posted on the website of
the company
7.2. The remuneration policy should include all forms of
remuneration, including the fixed-rate remuneration, performance-
based remuneration, financial incentive schemes, pension
arrangements and termination payments as well as the conditions
specifying the cases where the company can recover the disbursed
amounts or suspend the payments.
Yes
The Company follows this
recommendation.
7.3. With a view to avoid potential conflicts of interest, the
remuneration policy should provide that members of the collegial
bodies which perform the supervisory functions should not receive
remuneration based on the company’s performance.
Yes
The Company follows this
recommendation.
7.4. The remuneration policy should provide sufficient information on
the policy regarding termination payments. Termination payments
should not exceed a fixed amount or a fixed number of annual
wages and in general should not be higher than the non-variable
component of remuneration for two years or the equivalent thereof.
Termination payments should not be paid if the contract is
terminated due to inadequate performance.
Yes
By the decision of the
Board, agreements on the
conditions of termination of
the employment contract
and payments related to
the termination of the
employment contract may
be concluded with the head
of the Company.
VILNIAUS BALDAI AB, company code 121922783, Savanoriu Ave. 178B, Vilnius, Lithuania
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7.5. In the event that the financial incentive scheme is applied at the
company, the remuneration policy should contain sufficient
information about the retention of shares after the award thereof.
Where remuneration is based on the award of shares, shares
should not be vested at least for three years after the award thereof.
After vesting, members of the collegial bodies and heads of the
administration should retain a certain number of shares until the end
of their term in office, subject to the need to compensate for any
costs related to the acquisition of shares.
Not applicable
Schemes anticipating
remuneration of directors in
shares, share options or
any other right to purchase
shares or be remunerated
on the basis of share price
movements are not used in
the Company.
7.6. The company should publish information about the
implementation of the remuneration policy on its website, with a key
focus on the remuneration policy in respect of the collegial bodies
and managers in the next and, where relevant, subsequent financial
years. It should also contain a review of how the remuneration
policy was implemented during the previous financial year. The
information of such nature should not include any details having a
commercial value. Particular attention should be paid on the major
changes in the company’s remuneration policy, compared to the
previous financial year.
Yes
The Company follows this
recommendation.
7.7. It is recommended that the remuneration policy or any major
change of the policy should be included on the agenda of the
general meeting of shareholders. The schemes under which
members and employees of a collegial body receive remuneration
in shares or share options should be approved by the general
meeting of shareholders.
Yes
The Company follows this
recommendation.
Principle 8: Role of stakeholders in corporate governance
The corporate governance framework should recognize the rights of stakeholders entrenched in the laws or
mutual agreements and encourage active cooperation between companies and stakeholders in creating the
company value, jobs and financial sustainability. In the context of this principle the concept “stakeholders”
includes investors, employees, creditors, suppliers, clients, local community and other persons having
certain interests in the company concerned.
8.1. The corporate governance framework should ensure that the
rights and lawful interests of stakeholders are protected.
Yes
The information about the
Company, indicated in
these recommendations, is
disclosed in the following
sources: in the
consolidated annual report
of the Company, financial
statements, reports on the
purchase/loss of blocks of
shares, the reports on the
essential events,
announcing this
information in the
information disclosure
system of NASDAQ Vilnius
AB Stock Exchange and on
the Company’s website.
8.2. The corporate governance framework should create
conditions for stakeholders to participate in corporate governance
in the manner prescribed by law. Examples of participation by
stakeholders in corporate governance include the participation of
employees or their representatives in the adoption of decisions that
are important for the company, consultations with employees or
their representatives on corporate governance and other important
matters, participation of employees in the company’s authorized
capital, involvement of creditors in corporate governance in the
cases of the company’s insolvency, etc.
VILNIAUS BALDAI AB, company code 121922783, Savanoriu Ave. 178B, Vilnius, Lithuania
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8.3. Where stakeholders participate in the corporate governance
process, they should have access to relevant information.
8.4. Stakeholders should be provided with the possibility of
reporting confidentially any illegal or unethical practices to the
collegial body performing the supervisory function.
Principle 9: Disclosure of information
The corporate governance framework should ensure the timely and accurate disclosure of all material
corporate issues, including the financial situation, operations and governance of the company.
9.1. In accordance with the company’s procedure on confidential
information and commercial secrets and the legal acts regulating
the processing of personal data, the information publicly disclosed
by the company should include but not be limited to the following:
Yes
The information about the
Company, indicated in
these recommendations, is
disclosed in the following
sources: in the
consolidated annual report
of the Company, financial
statements, social
responsibility report,
reports on the
purchase/loss of blocks of
shares, the reports on the
essential events,
announcing this
information in the
information disclosure
system of NASDAQ Vilnius
AB Stock Exchange and on
the Company’s website.
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’s supervisory and management
bodies who are deemed independent, the manager of the company,
the shares or votes held by them at the company, participation in
corporate governance of other companies, their competence and
remuneration;
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 key risk factors, the company’s risk management
and supervision policy;
9.1.7. the company’s transactions 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
options 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
VILNIAUS BALDAI AB, company code 121922783, Savanoriu Ave. 178B, Vilnius, Lithuania
CONSOLIDATED ANNUAL REPORT FOR THE FY2022 ENDED 31 AUGUST 2022
(all amounts are in EUR thousand unless otherwise stated)
47
their obligation to disclose information as provided for in the
applicable legal acts.
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
The Company follows this
recommendation.
9.3. When disclosing the information specified in paragraph 9.1.4
of recommendation 9.1, it is recommended that the information on
the professional experience and qualifications of members of the
company’s supervisory and management bodies and the manager
of the company as well as potential conflicts of interest which could
affect their decisions should be provided. It is further recommended
that the remuneration or other income of members of the company’s
supervisory and management bodies and the manager of the
company should be disclosed, as provided for in greater detail in
Principle 7.
Yes
The information about the
Company, indicated in
these recommendations, is
disclosed in the following
sources: in the
consolidated annual report
of the Company, financial
statements, and on the
Company’s website.
9.4. Information should be disclosed in such manner that no
shareholders or investors are discriminated in terms of the method
of receipt and scope of information. Information should be disclosed
to all parties concerned at the same time.
Yes
The information on the
information disclosure of
NASDAQ Vilnius AB Stock
Exchange is presented in
the Lithuanian and English
languages simultaneously.
The Stock Exchange
announces the received
information on its website
and in the trading system,
in this way ensuring the
simultaneous presentation
of the information to
everybody. The Company
strives to announce the
information before or after
a trading session of Stock
Exchange. The Company
does not disclose the
information, which might
have impact on the value of
its shares, in any
comments, interviews or
other ways until such
information is announced
officially through the
information system of the
Stock Exchange.
Principle 10: Selection of the company’s audit firm
The company’s audit firm selection mechanism should ensure the independence of the report and opinion
of the audit firm.
VILNIAUS BALDAI AB, company code 121922783, Savanoriu Ave. 178B, Vilnius, Lithuania
CONSOLIDATED ANNUAL REPORT FOR THE FY2022 ENDED 31 AUGUST 2022
(all amounts are in EUR thousand unless otherwise stated)
48
Information on the extent of risk and risk management - describes the risk management related to the financial
statements, risk mitigation measures and the Company's internal control system
The Group and the Company are exposed to the following financial risks: liquidity risk, credit risk, foreign exchange risk and
interest rate risk. Note 23 provides information on the impact of these risks on the Group and the Company, the objectives,
policies, and processes for assessing and managing these risks.
10.1. With a view to obtain an objective opinion on the company’s
financial condition and financial results, the company’s annual
financial statements and the financial information provided in its
annual report should be audited by an independent audit firm.
Yes
The independent firm of
auditors conducts the audit
of the annual financial
statements and reviews the
annual report to check
whether there is no
material inconsistencies
between the financial
information included in it
and in the audited financial
statements.
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
Company follows this
principle. A candidate firm
of auditors to the General
Meeting is proposed by
Board of the Company.
10.3. In the event that the audit firm has received remuneration from
the company for the non-audit services provided, the company
should disclose this publicly. This information should also be
available to the supervisory board or, if the supervisory board is not
formed at the company, by the management board of the company
when considering which audit firm should be proposed to the
general meeting of shareholders.
Yes
Shareholders are informed
about other fees paid to
auditors for non-audit
services, if such fees occur.
VILNIAUS BALDAI AB, company code 121922783, Savanoriu Ave. 178B, Vilnius, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR 2022 ENDED
31 AUGUST 2022
(all amounts are in EUR thousand unless otherwise stated)
49
Consolidated and company’s financial statements of financial position
Group
Company
Notes
As of 31
August
2022
As of 31
August
2021
As of 31
August
2022
As of 31
August
2021
ASSETS
Non-current assets
Intangible assets
4
Property, plant and equipment
5
Land and buildings
Machinery and equipment
Vehicles
Other property, plant and
equipment
Total property, plant and equipment
Investments in subsidiaries
6
Other non-current receivables
8
Deferred income tax asset
21
Long term rent (adaptation of IFRS
16)
12.1
Total non-current assets
Current assets
Inventories
7
Trade receivables
8
Prepayments
Current income tax prepayment
Loans granted
Other receivables and current
assets
9
Cash and cash equivalents
10
Total current assets
Total assets
(cont’d on the next page)
VILNIAUS BALDAI AB, company code 121922783, Savanoriu Ave. 178B, Vilnius, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR 2022 ENDED
31 AUGUST 2022
(all amounts are in EUR thousand unless otherwise stated)
50
Consolidated and company’s financial statements of financial position (cont’d)
Group
Company
Notes
As of 31
August
2022
As of 31
August
2021
As of 31
August
2022
As of 31
August
2021
EQUITY AND LIABILITIES
Equity
Share capital
1
Legal reserve
11
Retained earnings
Total equity
Liabilities
Non-current liabilities
Non-current borrowings
12
Provisions for employee benefits
13
Long term rent (adaptation of IFRS 16)
12.1
Total non-current liabilities
Current liabilities
Current portion of non-current borrowings
12
Credit line
12
Trade payables
14
Payables for property, plant and
equipment
Other current liabilities and accrued
liabilities
15
Long term rent (adaptation of IFRS 16)
12.1
Total current liabilities
Total liabilities
Total equity and liabilities
The accompanying notes set out in pages 53–90 are an integral part of these financial statements.
General Manager
Jonas Krutinis
02 December 2022
Chief Accountant
Elinga Judickienė
02 December 2022
VILNIAUS BALDAI AB, company code 121922783, Savanoriu Ave. 178B, Vilnius, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR 2022 ENDED
31 AUGUST 2022
(all amounts are in EUR thousand unless otherwise stated)
51
Consolidated and Company’s financial statement of profit or loss and other
comprehensive income
Group
Company
Notes
2022
2021
2022
2021
Revenue
16
Cost of sales
17
(100,914 )
(92,014 )
(100,913 )
(92,104 )
Gross profit (loss)
(176 )
(175 )
Selling and distribution expenses
18
(919 )
(1,049 )
(919 )
(1,049 )
Administrative expenses
18
(5,562 )
(4,898 )
(5,483 )
(4,840 )
Other income
19
Other expenses
19
(645 )
(608 )
(645 )
(608 )
Operating profit
Financial costs
20
(1,778 )
(1,439 )
(1,778 )
(1,439 )
Result from financial activities
(1,778 )
(1,439 )
(1,778 )
(1,439 )
Profit before income tax
Income tax expense
21
(378 )
(378 )
Net profit for the reporting
period
Other comprehensive income
not to be re-grouped to profit
or loss
13
Actuarial change of employee-
related accruals
Income tax effect
13
(13 )
(8 )
(13 )
(8 )
Total comprehensive income
for the reporting period
Attributable to owners of the
Company:
Net profit
Other comprehensive income
Total comprehensive income
Basic and diluted earnings per
share (in EUR)
22
The accompanying notes set out in pages 53–90 is an integral part of these financial statements.
General Manager
Jonas Krutinis
02 December 2022
Chief Accountant
Elinga Judickienė
02 December 2022
VILNIAUS BALDAI AB, company code 121922783, Savanoriu Ave. 178B, Vilnius, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR 2022 ENDED
31 AUGUST 2022
(all amounts are in EUR thousand unless otherwise stated)
52
Consolidated and Company’s financial statement of changes in equity
GROUP
Notes
Share
capital
Legal
reserve
Retained
earnings
Total
Balance as of 31 August 2020
Net profit for the reporting period
Other comprehensive income
Total comprehensive income
Transactions with owners
Dividends declared
Total transactions with owners
Adjustments of prior periods
29
Balance as of 31 August 2021
Net profit for the reporting period
Other comprehensive income
Total comprehensive income
Transactions with owners
Dividends declared
Total transactions with owners
Balance as of 31 August 2022
(cont’d on the next page)
VILNIAUS BALDAI AB, company code 121922783, Savanoriu Ave. 178B, Vilnius, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR 2022 ENDED
31 AUGUST 2022
(all amounts are in EUR thousand unless otherwise stated)
53
Consolidated and Company’s financial statement of changes in equity (cont’d)
COMPANY
Notes
Share
capital
Legal
reserve
Retained
earnings
Total
Balance as of 31 August 2020
Net profit for the reporting period
Other comprehensive income
Total comprehensive income
Transactions with owners
Accumulation of mandatory reserve
Dividends declared
Adjustments of prior periods
29
Total transactions with owners
Balance as of 31 August 2021
Net profit for the reporting period
Other comprehensive income
Total comprehensive income
Transactions with owners
Dividends declared
Total transactions with owners
Balance as of 31 August 2022
The accompanying notes set out in pages 53–90 is an integral part of these financial statements.
General Manager
Jonas Krutinis
02 December 2022
Chief Accountant
Elinga Judickienė
02 December 2022
VILNIAUS BALDAI AB, company code 121922783, Savanoriu Ave. 178B, Vilnius, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR 2022 ENDED
31 AUGUST 2022
(all amounts are in EUR thousand unless otherwise stated)
54
Consolidated and Company’s financial
statement of cash flows
Group
Company
2022
2021
2022
2021
Cash flows from operating activities
Profit (loss) for the period
Adjustments for:
Depreciation and amortization
Change in provisions for employee benefits
(82 )
(43 )
(115 )
( 43 )
Result from the disposal of property, plant and
equipment
(9,769 )
(9,769 )
Interest expenses (income)
Other
(131 )
(137 )
(1,394 )
(1,348 )
Changes in working capital:
Decrease (increase) in inventories
(5,203 )
(5,203 )
Decrease (increase) in prepayments
(48 )
(11 )
(49 )
(10 )
Decrease (increase) in trade receivables
(8,409 )
(10,376 )
(8,407 )
(10,378 )
Decrease (increase) in other receivables
(416 )
(417 )
Decrease in other current payables and liabilities
(778 )
(841 )
Cash flows from operating activities
(10,637 )
(5,908 )
(10,654 )
(5,831 )
Income tax (paid)
(8 )
(7 )
Net cash flows from operating activities
(10,645 )
( 5,915 )
(10,654 )
( 5,831 )
Cash flows from investing activities
Loans granted to related party
Loan repayments received from related party
Received interest
Purchases of property, plant and equipment and
intangible assets
(3,642 )
(7,048 )
(3,639 )
(7,042 )
Proceeds on sale of property, plant and equipment
Other investing activities
Net cash flows from (used in) investing activities
(6,915 )
(6,909 )
(cont’d on the next page)
VILNIAUS BALDAI AB, company code 121922783, Savanoriu Ave. 178B, Vilnius, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR 2022 ENDED
31 AUGUST 2022
(all amounts are in EUR thousand unless otherwise stated)
55
Consolidated and Company’s
financial statement of cash flows
(cont’d)
Group
Company
2022
2021
2022
2021
Cash flows from (used in) financing activities
Proceed from Factoring
Proceeds from borrowings
Repayments of borrowings
(12,068 )
(2,346 )
(12,068 )
(2,346 )
Dividends paid
(9 )
(5 )
(9 )
(5 )
Other financial income and expenses
Interest paid
(1,530 )
(1,268 )
(1,530 )
(1,268 )
Net cash flows (used in) financing activities
Net (decrease) increase in cash and cash
equivalents
(4,858 )
(4,768 )
Cash and cash equivalents at the beginning
of the period
Cash and cash equivalents at the end of the
period
The accompanying notes set out in pages 53–90 is an integral part of these financial statements.
General Manager
Jonas Krutinis
02 December 2022
Chief Accountant
Elinga Judickienė
02 December 2022
VILNIAUS BALDAI AB, company code 121922783, Savanoriu Ave. 178B, Vilnius, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR 2022 ENDED
31 AUGUST 2022
(all amounts are in EUR thousand unless otherwise stated)
56
Notes to the financial statements
1 General information
address of its registered office is Savanoriu Ave. 178B, Vilnius, LT-03154 , Lithuania .
traded in the Secondary List of the NASDAQ Vilnius AB.
As of 31 August, 2022 and 2021 the shareholders of the Group and the Company were:
2022
2021
Number
of votes
held
Percentage
Number
of votes
held
Percentage
3,407,135
87.67
3,407,135
87.67
Other shareholders
479,132
12.33
479,132
12.33
Total
3,886,267
100.00
3,886,267
100.00
Main shareholders of Invalda Privatus Kapitalas AB are private persons Vytautas Bučas (39.63%), Irena Ona Mišeikienė
(30.05%) and Nijolė Paulina Bučienė (20.47%).
As of 31 August, 2022, the Company’s share capital amounted to EUR 4,508,069.72 and it was divided into 3,886,267 ordinary
registered shares. As of 31 August, 2022 and 31 August 2021 all the shares of the Company are ordinary shares with the par
value of EUR 1.16 each and were fully paid. The share capital did not change in 2022 and 2021. The Company did not hold
its own shares.
The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per
share at annual and general meetings of the Company. All shares rank equally with regard to the Company’s residual assets.
The Group consists of Vilniaus Baldai AB and its subsidiaries ARI-LUX UAB (hereinafter “the Group”). ARI-LUX UAB
information as of 31 August 2022:
Company
Registration
address
Share of
ownership
held by the
Company, %
Share capital
Profit (loss) for
the reporting
period
Equity
Main
activities
ARI-LUX UAB
Savanoriu Ave.
178, LT-03154
Vilnius
100
3
(83)
68
Packaging of
accessories
As of 31 August, 2022 the number of employees of the Group and the Company was 700 and 628, respectively (as of
31 August 2021 – 923 and 847, respectively).
These financial statements include the consolidated financial statements of the Group and the separate financial statements
of the Company.
The Company’s management approved these financial statements on 2 December 2022. The shareholders of the Company
have a statutory right to approve these financial statements or not to approve them and to require preparation of another set
of financial statements.
VILNIAUS BALDAI AB, company code 121922783, Savanoriu Ave. 178B, Vilnius, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR 2022 ENDED
31 AUGUST 2022
(all amounts are in EUR thousand unless otherwise stated)
57
2 Accounting principles
The principal accounting policies adopted in preparing the Group’s and the Company’s financial statements for the year 2022
are as follows:
2.1. Basis of preparation
These financial statements have been prepared in accordance with International Financial Reporting Standards (hereinafter
IFRSs), as adopted by the European Union (hereinafter the EU). The financial statements have been prepared under the
historical cost basis.
The preparation of financial statements in conformity with IFRSs, as adopted by the European Union, requires the use of
certain critical accounting estimates. It also requires management to exercise its judgment in the process of applying the
Company’s accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions
and estimates are significant to the financial statements are disclosed in Note 2.26. Although these estimates are based on
management’s best knowledge of current events and actions, actual results ultimately may differ from those estimates.
The Group and the Company have consistently applied the accounting policies set out in Note 2 to all periods presented in
these financial statements.
Due to the rounding of individual amounts to the calculation of the table of thousands of euros, there may be inconsistencies,
such rounding errors are insignificant in these financial statements.
These financial statements for the year ended 31 August 2022 have been prepared under the assumption that the Group and
the Company will continue as a going concern.
Amendments to existing standards and interpretations effective in 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)
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 has assessed that these amendments have no significant impact on these interim 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
has assessed that these amendments have no significant impact on these interim financial statements.
VILNIAUS BALDAI AB, company code 121922783, Savanoriu Ave. 178B, Vilnius, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR 2022 ENDED
31 AUGUST 2022
(all amounts are in EUR thousand unless otherwise stated)
58
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 financial statements.
(a) 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.
• 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 recognise 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 is currently assessing the impact of these amendments on the financial
statements.
Amendments to IFRS 17 and IFRS 4: The deferral of effective dates for IFRS 17 and IFRS 9 for insurers (published 25
June 2020, effective from 1 January 2021, 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 Company’s and Group’s financial
statements.
IFRS 17: Insurance Contracts (published 18 May 2017, effective from 1 January 2023, but not before approval by the EU)
The standard is effective for annual periods beginning on or after 1 January 2021 with earlier application permitted if both
IFRS 15 Revenue from Contracts with Customers and IFRS 9 Financial Instruments have also been applied. In its March 2020
meeting the Board decided to defer the effective date to 2023. IFRS 17 Insurance Contracts establishes principles for the
recognition, measurement, presentation and disclosure of insurance contracts issued. It also requires similar principles to be
applied to reinsurance contracts held and investment contracts with discretionary participation features issued. The objective
is to ensure that entities provide relevant information in a way that faithfully represents those contracts. This information gives
a basis for users of financial statements to assess the effect that contracts within the scope of IFRS 17 have on the financial
position, financial performance and cash flows of an entity. This IFRS will not have any impact on the financial position or
performance of the Company and Group as insurance services are not provided.
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)
VILNIAUS BALDAI AB, company code 121922783, Savanoriu Ave. 178B, Vilnius, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR 2022 ENDED
31 AUGUST 2022
(all amounts are in EUR thousand unless otherwise stated)
59
The amendments require companies to recognise deferred tax on transactions that, on initial recognition, give rise to equal
amounts of taxable and deductible temporary differences. The amendments are effective for annual reporting periods
beginning on or after 1 January 2023. Earlier application is permitted. The Amendments have not yet been endorsed by the
EU. Company and the Group has not yet evaluated the impact of the implementation of these amendments.
Amendments to IAS 8 Accounting policies, Changes in Accounting Estimates and Errors: Definition of Accounting
Estimates (issued on 12 February 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. Company and the Group 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. The Company and Group 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. Company and the Group has not yet evaluated the impact of the implementation of these
amendments.
Standards and amendments to existing standards that are not yet effective and have not been early adopted by the
Group
IFRS 17: Insurance Contracts (issued on 18 May 2017 with effective date of 1 January 2023, but not before it is adopted by
the EU). The standard is effective for annual periods beginning on or after 1 January 2021 with earlier application permitted if
both IFRS 15 Revenue from Contracts with Customers and IFRS 9 Financial Instruments have also been applied. In its March
2020 meeting the Board decided to defer the effective date to 2023. IFRS 17 Insurance Contracts establishes principles for
the recognition, measurement, presentation and disclosure of insurance contracts issued. It also requires similar principles to
be applied to reinsurance contracts held and investment contracts with discretionary participation features issued. The
objective is to ensure that entities provide relevant information in a way that faithfully represents those contracts. This
information gives a basis for users of financial statements to assess the effect that contracts within the scope of IFRS 17 have
on the financial position, financial performance and cash flows of an entity. This IFRS will not have any impact on the financial
position or performance of the Company and the Group as insurance services are not provided.
Amendments to IFRS 17 and IFRS 4 – the Deferral of Effective Dates of IFRS 17 and IFRS 9 for Insurers (issued on 25
June 2020 with effective date of 1 January 2021, but not before it is adopted by the EU).
The amendments to IFRS 17 are effective, retrospectively, for annual periods beginning on or after 1 January 1 2023, with
earlier application permitted. The amendments aim at helping companies implement the Standard. Overall, the amendments
are designed to reduce costs by simplifying some requirements in the standard; make it easier to explain financial
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performance; 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 the Company 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 Company’s and the Group’s financial
statements.
Amendments to IAS 1 – Classification of Liabilities as Current or Non-Current (issued on 23 January 2020 with effective
date of 1 January 2023, but not before it is adopted 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. The Company and the Group are currently assessing the
impact of this amendment on the financial statements.
Amendments to IFRS 3 Business Combinations; IAS 16 Property, Plant and Equipment; IAS 37 Provisions,
Contingent Liabilities and Contingent Assets, as well as Annual Improvements (issued on 14 May 2020 with effective
date of 1 January 2022, but not before it is adopted by the EU).
The amendments are effective for annual reporting periods beginning on or after 1 January 2022, with earlier application
permitted. 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.
• 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 recognise such sales proceeds and related cost in profit or loss.
• 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.
• The annual improvements 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 management is currently assessing the impact of these amendments on the Company’s and the Group’s financial
statements.
Amendment in IFRS 10 Consolidated Financial Statements and IAS 28 Investments in Associates and Joint Ventures:
Sale or Contribution of Assets between an Investor and its Associate or Joint Venture (Amendments) (issued on 11
September 2014 without the date of entry into force)
The amendments address an acknowledged inconsistency between the requirements in IFRS 10 and those in IAS 28, in
dealing with the sale or contribution of assets between an investor and its associate or joint venture. The main consequence
of the amendments is that a full gain or loss is recognized when a transaction involves a business (whether it is housed in a
subsidiary or not). A partial gain or loss is recognized when a transaction involves assets that do not constitute a business,
even if these assets are housed in a subsidiary. In December 2015 the IASB postponed the effective date of this amendment
indefinitely pending the outcome of its research project on the equity method of accounting. Management has assessed that
adoption of these amendments will have no significant effect on the Company’s and the Group’s financial statements.
Amendments to IFRS 9, IAS 39 and IFRS 7: Interest Rate Benchmark Reform (issued on 28 August 2020 with effective
date of 1 January 2021 and must be applied retrospectively)
Amendments to IFRS 9, IAS 39 and IFRS 7 bring to a conclusion phase two which is focused on issues that could affect
financial reporting when an existing interest rate benchmark is replaced with a risk-free interest rate (an RFR). The adoption
of the amendment will have no material impact on the Company’s or Group’s financial statements.
There are no other new standards, amendments to the existing standards or their interpretations that are not yet effective but
may have a material impact on the Company or the Group.
2.2. Functional and financial statements currency
The Group’s and the Company’s functional and financial statements currency is euro. Financial statements are prepared in
thousands of euro. In these financial statements, all amounts are expressed in euros and rounded down to the nearest
thousand (EUR ‘000).
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2.3. Financial year
Financial year of the Group and the Company starts on 1 September and ends on the 31 August of the next year. Under
decision of the Company`s shareholder of 8 October 2014 the financial year was changed from 31 August 2015.
2.4. Consolidation principles
The Group accounts for business combinations using the acquisition method when control is transferred to the Group. The
consideration transferred in the acquisition is generally measured at fair value, as are the identifiable net assets acquired. Any
goodwill that arises is tested annually for impairment. Any gain on a bargain purchase is recognized in profit or loss
immediately. Transaction costs are expensed as incurred, except if related to the issue of debt or equity securities.
The consideration transferred does not include amounts related to the settlement of pre-existing relationships. Such amounts
are generally recognized in profit of loss.
Any contingent consideration is measured at fair value at the date of acquisition. If an obligation to pay contingent consideration
that meets the definition of a financial instrument is classified as equity, then it is not remeasured and settlement is accounted
for within equity. Otherwise, other contingent consideration is remeasured at fair value at each reporting date and subsequent
changes in the fair value of the contingent consideration are recognized in profit or loss.
Subsidiaries are entities controlled by the Group. The Group controls an entity when it is exposed to, or has rights to, variable
returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. The
financial statements of subsidiaries are included in the consolidated financial statements from the date on which control
commences until the date on which control ceases.
Non-controlling interest are measured initially at their proportionate share of the acquirer’s identifiable net assets at the date
of acquisition. Changes in the Group’s interest in a subsidiary that do not result in a loss of control are accounted for as equity
transactions.
When the Group loses control over a subsidiary, it derecognizes the assets and liabilities of the subsidiary, and any related
NCI and other components of equity. Any resulting gain or loss is recognized in profit or loss. Any interest retained in the
former subsidiary is measured at fair value when control is lost.
Intra-group balances and transaction, and any unrealized income and expenses arising from intra-group transactions, are
eliminated. Unrealized losses are eliminated in the same way as unrealized gains, but only to the extent that there is no
evidence of impairment.
2.5. Investments in subsidiaries in the Company's separate financial statements
In the Company's separate financial statements, investments in subsidiaries are stated at cost. The value of the investment is
reduced by recognizing the impairment of the investment.
Impairment is determined by estimating the recoverable amount of the cash-generating unit. When the recoverable amount
of a cash-generating unit is less than its carrying amount in the Company's statement of financial position, an impairment loss
is recognized.
2.6. Intangible assets
Intangible assets are measured initially at cost. Intangible assets are recognized if it is probable that future economic benefits
that are attributable to the asset will flow to the Group and the Company and the cost of asset can be measured reliably. After
initial recognition, intangible assets are measured at cost less accumulated amortization and any accumulated impairment
losses. Intangible assets are amortized on a straight-line basis over the best estimate of their useful lives.
Software
The costs of acquisition of new software are capitalized and treated as an intangible asset if these costs are not an integral
part of the related hardware. Software is amortized over a period not exceeding 3 years.
Costs incurred in order to restore or maintain the future economic benefits that the Group and the Company expects from the
originally assessed standard of performance of existing software systems are recognized as an expense when the restoration
or maintenance work is carried out.
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2.7. Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses.
When assets are sold or retired, their cost and accumulated depreciation are eliminated from the accounts and any gain or
loss resulting from their disposal is included in profit or loss.
The initial cost of property, plant and equipment comprises its purchase price, including non-refundable purchase taxes and
any directly attributable costs of bringing the asset to its working condition and location for its intended use. Expenditures
incurred after the property, plant and equipment have been put into operation, such as repair and maintenance costs, are
normally charged to profit or loss in the period the costs are incurred.
Depreciation is computed on a straight-line basis over the following estimated useful lives:
Buildings 10–66 years
Machinery and equipment 6–20 years
Vehicles 5–10 years
Other property, plant and equipment, critical spare parts 2–6 years
The assets’ residual values and useful lives are reviewed periodically to ensure that the period of depreciation is consistent
with the expected pattern of economic benefits from items in property, plant and equipment.
Construction-in-progress is stated at cost. This includes the cost of construction, plant and equipment and other directly
attributable costs. Construction-in-progress is not depreciated until the relevant assets are completed and available for use.
Borrowing costs directly attributable to the acquisition, construction or production of assets that are not stated at fair value and
necessarily take a substantial time to get ready for intended use or sale (qualifying assets) are capitalised as part of the costs
of those assets.
Capitalisation of borrowing costs continues up to the date when the assets are substantially ready for their use or sale.
The Group and the Company capitalise borrowing costs that could have been avoided if they had not made capital expenditure
on qualifying assets. Borrowing costs capitalised are calculated at the Group’s and the Company’s average funding cost (the
weighted average interest cost is applied to the expenditures on the qualifying assets), except to the extent that funds are
borrowed specifically for the purpose of obtaining a qualifying asset. Where this occurs, actual borrowing costs incurred less
any investment income on the temporary investment of those borrowings are capitalised.
Spare parts are classified as property, plant and equipment if they meet the definition, including the requirement to be used
over more than one period. Otherwise, they are classified as inventory. For spare parts that are kept to ensure smooth
operation of some machinery without interruptions, the depreciation period starts immediately when those spare parts are
acquired.
2.8 Inventories
Inventories are initially recorded at acquisition cost. Subsequent to initial recognition, inventories are valued at the lower of
cost or net realizable value. Net realizable value is the selling price in the ordinary course of business, less the costs of
completion and applicable variable marketing and distribution costs. Cost is determined by the first-in, first-out (FIFO) method.
The cost of finished goods and work in progress includes the applicable allocation of fixed and variable overhead costs based
on a normal operating capacity. Unrealizable inventory is fully written-off.
2.9. Financial instruments
Financial assets
The financial assets of the Group and the Company include cash and cash equivalents, loans granted, trade receivables and
other receivables.
Trade receivables are initially recognized when they arise. Upon initial recognition, all other financial assets are recognized
when the Group and the Company become parties to the contractual provisions of the instrument. Financial assets (except
for trade receivables without a significant financing component), if not measured at fair value through profit or loss, are initially
measured at fair value plus transaction costs directly attributable with acquisition or issue. Trade receivables without a
significant financing component are initially recognized at the transaction price.
Financial assets are classified in three groups according to their measurement:
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i. financial assets that are subsequently measured at amortized cost;
ii. financial assets that are subsequently measured at fair value through other comprehensive income;
iii. financial assets that are subsequently measured at fair value through profit or loss.
The classification of a financial asset depends on the financial asset management business model (assessing how the entity
manages the financial assets to generate cash flows) and the characteristics of the contractual cash flows of the financial
asset (whether contractual cash flows include only principal and interest payments).
Financial asset is stated at amortized cost if both of the following conditions are satisfied:
• financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual
cash flows; and
• its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interests on
the principal amount outstanding.
Financial assets that do not meet the above conditions are measured at fair value through profit or loss and through other
comprehensive income.
The Group and the Company have no financial assets, which, in subsequent periods, are measured at fair value through profit
or loss and other comprehensive income.
Financial assets that are subsequently measured at amortized cost are measured using the effective interest method.
Amortized cost is reduced by impairment losses. Interest income, foreign exchange gains and losses, and impairment losses
are recognized in profit or loss. Any gain or loss on derecognition is recognized in profit or loss.
The effective interest method is a method of calculating the amortized cost of a financial asset or liability and of allocating the
interest income or expense over a period of time. The effective interest rate is the rate that discounts estimated future cash
payments through the expected life of the financial asset or liability or, where appropriate, a shorter period.
Financial assets at fair value through profit or loss are initially recognized at fair value through profit or loss. Subsequently, the
fair value gain and loss, including any interest and dividends, is recognized in profit or loss and other comprehensive income.
Financial assets (or, where applicable, part of a financial asset or part of a group of similar financial assets) are
derecognised when:
• the right to receive cash flows from the financial asset expires;
• the Group and the Company retain the right to receive cash flows from the asset, but have agreed to pay in
full without material delay to a third party under a ‘pass through’ arrangement;
• The Group and the Company transfer their right to receive cash flows from assets and/or:
(a) have transferred substantially all the risks and rewards of the financial asset;
(b) have neither transferred nor retained substantially all the risks and rewards of the financial assets but
have transferred control of the assets.
When the Group and the Company transfer rights to receive cash flows from an asset but neither transfer nor retain
substantially all the risks and rewards of the asset nor transfer control of the asset, the asset is recognized to the extent of the
Group’s and the Company’s continuing involvement in the asset. The Company's and the Group’s assets that have been
transferred as guarantee are measured at the lower of the carrying amount and the maximum amount of consideration that
the Group and the Company could be required to repay.
The Group and the Company reduce the gross carrying amount of their financial asset if they cannot reasonably expect to
recover all or part of the financial asset. A write-off is an event of derecognition.
Cash and cash equivalents consist of cash in bank accounts. Cash equivalents are short-term, highly liquid investments that
are readily convertible to known amounts of cash. Such investments have a maturity of up to three months and the risk of
changes in value is very insignificant. For the purposes of the cash flow statement, cash and cash equivalents include cash
on hand, deposits in current accounts, and other short-term highly liquid investments.
Trade and other receivables on initial recognition, trade and other receivables are recognized at the transaction price and
subsequently measured at amortized cost.
Financial liabilities
The Group’s and the Company’s financial liabilities comprise borrowings, trade payables and other payables.
At the time of initial recognition, financial liabilities are recognised when the Group and the Company become parties to the
contractual terms of the instrument.
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Financial liabilities are divided into two groups according to their measurement:
a) financial liabilities that are subsequently measured at amortised cost;
b) financial liabilities that are subsequently measured at fair value through profit or loss.
A financial liability is classified as at FVTPL if it is classified as held-for-trading, it is a derivative or it is designated as such on
initial recognition.
Financial liabilities at FVTPL are measured at fair value and net gains and losses, including any interest expense, are
recognised in profit or loss.
Other financial liabilities are subsequently measured at amortised cost using the effective interest method. Interest expense
and foreign exchange gains and losses are recognised in profit or loss. Any gain or loss on derecognition is also recognised
in profit or loss.
The Group and the Company derecognise financial liabilities when their contractual obligations are discharged or cancelled
or expire. The Group and the Company also derecognise a financial liability when its terms are modified and the cash flows
of the modified liability are substantially different. In this case, the new financial liability is recognized at fair value under the
modified terms of the contract.
In the event of derecognition of a financial liability, the difference between the carrying amount written off and the consideration
paid (including any non-cash assets transferred or liabilities assumed) is recognized in profit or loss in the statement of profit
or loss and other comprehensive income.
Trade and other payables. Upon initial recognition, trade and other payables are recognized when the Company becomes a
party to the contractual provisions. Trade and other payables are initially measured at fair value plus directly attributable
transaction costs.
Borrowed funds. Borrowings are initially recognized at fair value less transaction costs and subsequently measured at
amortized cost using the effective interest method.
Financial guarantees. A financial guarantee contract is a contract that obliges the Company to make specific payments to
compensate the contract holder for the holder's default on timely payment of the original or modified terms of a debt instrument.
Financial guarantees are initially recognized at fair value, which is usually the amount receivable.
Offsetting financial assets and financial liabilities
Financial assets and financial liabilities are offset when, and only when, the Group and the Company have a legally enforceable
right to set off the amounts and they intend either to settle them on the net basis or to realise the asset and settle the liability
simultaneously.
2.10. Share capital
Ordinary registered shares are classified as share capital. Ordinary registered shares are stated at their par value.
2.11. Dividends
Dividends are recognised in the Company’s financial statements in the period in which the dividends are approved by the
Company’s shareholders. Dividends paid are classified as cash flows from financing activities in the statement of cash flows.
2.12. Leases
The Group and the Company are lessees
(a) Finance lease
Leases of property, plant and equipment where the Group and the Company have substantially all the risks and rewards of
ownership are classified as finance leases. Finance leases are capitalised at the lease’s commencement at the lower of the fair
value of the leased property and the estimated present value of the minimum lease payments. Each lease payment is allocated
between the liability and finance charges so as to achieve a constant interest rate on the finance lease balance outstanding. The
corresponding rental obligations, net of finance charges, are included in long-term payables except for instalments due within 12
months which are included in current liabilities.
The property, plant and equipment acquired under finance leases are depreciated over the shorter of the asset’s useful life and
the lease term.
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(b) Operating lease
At the beginning of the contract, the Company and the Group assess whether the contract is a lease or includes a lease. This
means assessing whether the contract confers a right to manage the use of the identified asset for a period of time in return for
remuneration.
The Company and the Group apply a single recognition and measurement method to all leases, except for short-term and low-
value leases. The Company and the Group recognize a lease obligation to pay lease payments and a right-of-use asset that
entitles the holder to use the leased asset.
Assets managed under lease right
The Company and the Group recognize the right-of-use asset at the inception date (ie the date from which the underlying asset
is available for use). Assets held under usable rights are carried at cost less any accumulated depreciation and any accumulated
impairment losses. The cost of an asset held for use includes the amount of the initial measurement of the lease liability, the initial
direct costs, the lease payments at or before the inception date, less any lease incentives received. Depreciation is calculated on
a straight-line basis over the lease term.
If the ownership of the leased property is transferred to the Company and the Group before the end of the lease term or if the
price of the asset managed by the right of use indicates that the lessee will exercise the call option, depreciation is calculated
based on the estimated useful life of the asset.
Assets held for use are also assessed for impairment.
Lease obligations
At the beginning date, the Company / Group recognizes lease liabilities at the present value of the lease payments due during
the lease term. Lease payments include fixed payments (including equivalent payments) less any rental incentives receivable,
variable rents that depend on an index or rate, and amounts that would be payable under residual value guarantees. Such lease
payments also include the exercise price of the call option if it is reasonably known that the Company / Group will exercise that
option, and penalties for terminating the lease if it is assumed that the Company / Group will exercise the option to terminate the
lease during the lease term. Variable lease payments that are independent of an index or a rate are recognized as an expense
(unless they are incurred to produce inventories) in the period in which the event occurs or the condition that gives rise to the tax
arises.
In calculating the present value of the lease payments, the Company / Group applies the borrowing rate accrued at the beginning
of the lease, as the interest rate specified in the lease cannot be readily determined. After the commencement date, the amount
of the lease liability is increased by the estimated interest and the amount of lease payments paid is reduced. In addition, the
carrying amount of a lease is remeasured if certain adjustments are made, the lease term or lease payments change (for example,
changes in future lease payments due to a change in the index or rate used to determine such lease payments) or a change in
the option to purchase the lease. evaluation.
Short-term and low-value property lease
The Company and the Group apply the recognition exemption to their current assets (i.e. leases with a term of less than 12
months at the inception date that do not include an option to purchase the asset). It also observes this exception by recognizing
the lease of low-value assets consisting of office inventory. Lease payments for short-term and low-value assets are recognized
as an expense on a straight-line basis over the lease term.
The Group and the Company are lessors
(c) Operating lease
As a lessor, the Company and the Group determine at the beginning of a lease whether the contract is a finance lease or an
operating lease. If the Company and the Group determine that substantially all the risks and rewards of ownership of a leased
asset are transferred under a lease, it classifies the lease as a finance lease. Leases under which the Company and the Group
do not transfer substantially all the risks and rewards incidental to ownership of a leased asset are classified as operating leases.
Lease income is recognized on a straight-line basis over the term of the lease and is recognized in the statement of
comprehensive income on a straight-line basis over the term of the lease. Initial direct costs incurred in negotiating and arranging
a lease shall be included in the carrying amount of the leased asset and recognized as an expense over the lease term on the
same basis as the lease income. Contingent contributions are recognized as income in the period in which they are earned.
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2.13. Employee benefits
(a) Social security contributions
The Group and the Company pay social security contributions to the state Social Security Fund (the Fund) on behalf of their
employees based on the defined contribution plan in accordance with the local legal requirements. A defined contribution is a
plan under which the Group and the Company pay fixed contributions into the Fund and will have no legal or constructive
obligations to pay further contributions if the Fund does not hold sufficient assets to pay all employees benefits relating to
employee service in the current and prior period. Social security contributions are recognised as expenses on an accrual basis
and are included in payroll expenses.
(b) Termination benefits
Termination benefits are payable whenever an employee’s employment is terminated before the normal retirement date or
whenever an employee accepts voluntary redundancy in exchange for these benefits. The Group or the Company recognise
termination benefits when they are demonstrably committed to either: terminating the employment of current employees
according to a detailed formal plan without possibility of withdrawal; or providing termination benefits as a result of an offer
made to encourage voluntary redundancy. Benefits falling due more than 12 months after the date of the statement of financial
position are discounted to their present value.
(c) Bonus plans
The Group and the Company recognise a liability and an expense for bonuses where contractually obliged or where there is
a past practice that has created a constructive obligation.
(d) Provisions for pensions and jubilee payments
According to the terms of the collective employment agreement effective at the Group and the Company, each employee is
entitled to a pension benefit amounting to 2 or 3 months’ salary payment when leaving the Group and the Company after
reaching the pension age and a jubilee benefit. Actuarial calculations are made to determine liability for such payments. The
liability is recognised at present value discounted using market interest rate.
The Group and the Company recognise re-measurements of the pension benefit obligation in ‘Other comprehensive income
that will not be reclassified to profit or loss’. These amounts recognised as other comprehensive income are accounted for under
equity. Jubilee benefits and long-service benefits are accounted for by the Group and the Company within profit or loss.
2.14. Provisions
Provisions are recognized when the Group and the Company have a present obligation (legal or constructive) as a result of
past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation
and a reliable estimate can be made of the amount of the obligation. The provisions are reviewed at each statement of financial
position date and adjusted in order to present the most reasonable current estimate. If the effect of the time value of money
is material, the amount of provision is equal to the present value of the expenses, which are expected to be incurred to settle
the liability. Where discounting is used, the increase in the provision due to the passage of time is recognized as a borrowing
cost.
A provision for warranties is recognized when the underlying products are sold, based on historical warranty data and
weighting of possible outcomes against their associated probabilities.
2.15. Income tax
Income tax charge is based on profit for the year and considers deferred taxation. Income tax is calculated based on the
Lithuanian tax legislation.
The standard income tax rate in the Republic of Lithuania was 15% in 2021 (15% in 2020).
Tax losses can be carried forward for indefinite period, except for the losses incurred as a result of disposal of securities and/or
derivative financial instruments. Such carrying forward is disrupted if the Company change its activities due to which these
losses were incurred except when the Company do not continue its activities due to reasons which do not depend on the
Company itself. Starting from 2014 the amount of utilised tax losses cannot exceed 70% of taxable profit for the tax period
calculated by deducting non-taxable income, allowed tax deductions and allowed limited amount deductions from income,
except for tax losses of the previous periods. Starting from 2010, tax losses can be transferred at no consideration or in
exchange for certain consideration between the Group companies if certain conditions are met.
The losses from disposal of securities and/or derivative financial instruments can be carried forward for 5 consecutive years
and only be used to reduce the taxable income earned from the transactions of the same nature. The limitation (up to 70% on
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profit from transfer of securities) is not applied to losses on transfer of securities from previous tax periods deductible from
profit on transfer of securities from the taxable period.
Deferred taxes are calculated using the liability method. Deferred income taxes reflect the net tax effects of temporary
differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for
income tax purposes. Deferred tax assets and liabilities are measured using the tax rates expected to apply to taxable income
in the years in which those temporary differences are expected to reverse based on tax rates enacted or substantively enacted
at the reporting date.
A deferred tax asset is recognized in the statement of financial position to the extent the management believes it will be
realized in the foreseeable future, based on taxable profit forecasts. If it is believed that part of the deferred tax asset is not
going to be realized, this part of the deferred tax asset is not recognized in the financial statements.
Deferred tax assets and liabilities are offset when they are related to taxes levied by the same tax authority and when there is
a legally enforceable right to cover current payable taxes at net value.
Income tax and deferred tax for the accounting period
Income tax and deferred income tax are charged or credited to profit or loss, except when they relate to items included directly
to equity, in which case the deferred income tax is also accounted for in other comprehensive income.
2.16. Revenue recognition
Revenues of the Group and the Company are recognized in accordance with IFRS 15, that is, the Group and the Company
recognize revenue at such time and to such an extent that the transfer of goods or services to customers represents the
consideration that the Group and the Company expect to receive in exchange for those goods or services. In applying this
Standard, the Company takes into account the terms of the contract and all relevant facts and circumstances.
The Company's revenue is recognized using the 5-step model:
Step 1 - Identify customer agreements.
A contract recognizes an agreement between two or more parties (subject to purchase / sale terms) that creates enforceable
rights and enforceable obligations (not applicable if a joint venture agreement is signed). A contract is within the scope of IFRS
15 if all of the following criteria are met:
• the parties have approved the contract (in writing, orally or in accordance with any other normal commercial practice)
and are bound by their obligations under the contract,
• it is possible to identify the rights of each party with regard to the goods and / or services to be transferred,
• it is possible to identify the payment terms for the goods and / or services to be transferred,
• the contract has commercial substance,
• it is probable that the consideration to which the Group and the Company are entitled to in exchange for the goods
or services will be collected.
Contracts with the customer may be aggregated or disaggregated into several contracts, while retaining the criteria of former
contracts. Such aggregation or disaggregation is considered modification of the contract.
Step 2 - Identify performance obligations in the contract.
Contractual commitment to deliver goods and / or services to a customer. If separate goods and/or services are identifiable,
the liabilities are recognized separately. Each liability is identified in one of two ways:
• a good and / or service is distinct, or
• a set of individual goods and / or services that are substantially the same and have the same pattern of transfer to
the customer.
Step 3 - Determine the transaction price.
Under the new IFRS 15, the transaction price may be fixed, variable, or both.
The transactions concluded by the Company apply fixed prices for both continuous services and services performed at a
certain point in time. The transaction price is also adjusted considering the time value of money, if the contract includes a
significant financing arrangement, and considering any consideration payable to the customer and non-cash consideration
received, if any. The Group and the Company apply the following sales price calculation methods: adjusted market assessment
approach, expected cost plus margin approach and residual approach. Similar transactions are measured equally.
Step 4 - Allocate the transaction price to each performance obligation.
A performance obligation is a contractual promise to deliver to the customer a separate good or service, or a set of individual
goods or services that are substantially the same and have the same pattern of transfer to the customer. The transaction price
VILNIAUS BALDAI AB, company code 121922783, Savanoriu Ave. 178B, Vilnius, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR 2022 ENDED
31 AUGUST 2022
(all amounts are in EUR thousand unless otherwise stated)
68
is apportioned between each performance obligation based on the relative separate selling prices of the good or service
promised in the contract. If the contracts do not specify separately the price of the service or good (for example, one price for
two products), the Company shall determine it. In measuring the transaction price, the Company estimates a discount or
variable amount of consideration that relates only to a particular portion of the contract.
Step 5 - Recognise revenue when (or as) the Group and the Company satisfy a performance obligation.
The Group and the Company recognize revenue when they satisfy a performance obligation by transferring promised goods
or services to the customer (i.e. when the customer obtains control of the mentioned goods or services). The recognized
amount of revenue is equal to the amount of satisfied performance obligation. Performance obligation may be satisfied at a
point of time or over time. A period of time is recognised as a calendar month.
The recognition of revenue depends on whether the obligation is satisfied over a period of time (continuous) or at a point in
time. In any event, the transfer of control shall be taken into account.
Revenue is recognized at the fair value of the consideration received or receivable. Revenue is reduced by the estimated
amount of customer returns, discounts, and other similar provisions. Revenue is recognized when it is probable that the
economic benefits associated with the transaction will flow to the enterprise and the amount of the revenue can be measured
reliably. Revenue from sales is recognized net of VAT and discounts, including any cumulative expected discounts for the
current year.
The Group’s and the Company’s revenue types:
1. Revenue from sale of furniture
2. Revenue from sale of raw materials and waste
Revenue from sales of furniture and revenue from the sale of raw materials are recognized at a point of time in the statement
of profit and loss and other comprehensive income.
2.17. Expense recognition
Expenses are recognized on the basis of accrual and revenue and expense matching principles in the reporting period when
the income related to these expenses was earned, irrespective of the time the money was spent. In those cases when the
costs incurred cannot be directly attributed to the specific income and they will not bring income during the future periods, they
are expensed as incurred.
The amount of expenses is usually accounted for as the amount paid or due, excluding VAT. In the cases when a long period
of payment is established and the interest is not distinguished, the amount of expenses shall be estimated by discounting the
amount of payment using the market interest rate.
2.18. Foreign currency transactions
Foreign currency transactions are accounted for at the exchange rates prevailing at the date of the transactions. Gains and
losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities
denominated in foreign currencies on the statement of financial position date are recognized in profit or loss. Such balances
are translated at period-end exchange rates. Non-monetary assets and liabilities that are measured in terms of historical cost
in a foreign currency are translated using the exchange rate at the date of the transaction. Non-monetary assets and liabilities
denominated in foreign currencies that are stated at fair value are translated to euro at foreign exchange rates ruling at the
dates the fair value was determined.
2.19. Impairment of assets
Non-financial assets
Non-financial assets, other than inventories and deferred tax are reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount of an asset may not be recoverable. If any such indication exists, the asset’s
recoverable amount is estimated.
The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. Whenever the carrying amount
of an asset exceeds its recoverable amount, an impairment loss is recognized in profit or loss.
Reversal of impairment losses recognized in prior years is recorded when there is an indication that the impairment losses
recognized for the asset no longer exist or have decreased. Reversal is accounted for in the same caption in profit or loss as
impairment losses. For evaluation of impairment of assets, the entire Group is considered as one cash generating unit.
VILNIAUS BALDAI AB, company code 121922783, Savanoriu Ave. 178B, Vilnius, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR 2022 ENDED
31 AUGUST 2022
(all amounts are in EUR thousand unless otherwise stated)
69
Impairment of financial assets
Financial assets are reviewed for impairment at each statement of financial position date.
For financial assets carried at amortized cost, whenever it is probable that the Group and the Company will not collect all
amounts due according to the contractual terms of loans or receivables, an impairment or bad debt loss is recognized in profit
or loss. Impairment of trade and other receivables is established when there is objective evidence (such as probability of
default or significant financial difficulties of the client) that the Group and the Company will not be able to collect all amounts
due according to the original terms of the receivables. Significant financial difficulties of the debtor, probability that the debtor
will enter bankruptcy or financial reorganization, and default or delinquency in payments (more than 30 days overdue) are
considered indicators that the trade receivable is impaired.
The recoverable amount of receivables carried at amortised cost is measured as the present value of future cash flows
discounted at the original interest rate (i.e. the effective interest rate calculated at the initial recognition of these receivables).
The reversal of impairment losses previously recognized is recorded when the decrease in impairment loss can be justified
by an event occurring after the write-down. Such reversal is recorded in profit or loss under the same caption as impairment
losses. However, the increased carrying amount is only recognized to the extent it does not exceed the amortized cost that
would have been had the impairment not been recognized.
Impairment of financial assets
Impairment losses on financial assets measured at amortized cost are measured using the expected credit loss (ECL) model.
Credit losses are measured at the present value of all cash losses (the difference between the cash flows that the Group and
the Company hold under the contract and the cash flows the Group and the Company expect to receive). ECLs are discounted
applying an effective interest rate.
At the end of each reporting period, the Company and the Group recalculate and record the allowance for expected credit
losses, taking into account past events, current market conditions and future prospects. At the end of each financial period,
the Group and the Company assess whether there has been a material change in the credit risk of the financial instrument
since initial recognition.
At the end of each reporting period, the Group and the Company assess whether financial assets carried at amortized cost
are impaired. A financial asset is impaired when one or more events have occurred that have a negative impact on the
estimated future cash flows of the financial asset. The following criteria are used by the Company to determine whether there
is objective evidence that an impairment loss has been incurred:
• the counterparty experiences financial difficulties as evidenced by its financial information;
• in the event of a breach of contract, such as a default or payment delay more than 90 days;
• the counterparty is considering bankruptcy or financial reorganization;
• there is an adverse change in the payment status of the counterparty's as a result of changes in national or local
economic conditions affecting the counterparty; or
• the value of collateral, if any, significantly decreases as a result of deteriorating market conditions.
Losses on financial assets measured at amortized cost are deducted from the gross value of such assets.
The gross carrying amount of a financial asset is written off when the Group and the Company have no reasonable expectation
of recovering all or part of the asset. Non-recoverable assets are written off against recognized related impairment loss
allowance, provided that all necessary steps have been taken to recover the asset and the amount of the loss has been
determined. The amounts previously written off and recovered in subsequent periods are credited to the impairment loss
account within the statement of profit or loss and other comprehensive income.
2.20. Segment information
The operating segment is a part of the Group and the Company participating in economic activities from which it can earn
profit or incur costs. The results of the operating segment are verified by the management of the Group and the Company on
a regular basis by taking a decision regarding resources which have to be allocated to the segment and evaluating its operating
results, and who present separate financial information.
Management of the Company has determined the operating segments based on the reports reviewed by the board of directors,
considered to be the chief operating decision makers that are used to make strategic decisions. Based on this it was decided
that the Group and the Company have a single reportable segment, i.e. furniture production and trade.
VILNIAUS BALDAI AB, company code 121922783, Savanoriu Ave. 178B, Vilnius, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR 2022 ENDED
31 AUGUST 2022
(all amounts are in EUR thousand unless otherwise stated)
70
2.21. Related parties
Related parties are defined as shareholders, employees, members of the Board, their close relatives and companies that
directly or indirectly (through the intermediary) control or are controlled by, or are under common control with, the Group and
the Company, provided the listed relationship empowers one of the parties to exercise the control or significant influence over
the other party in making financial and operating decisions.
2.22. Contingencies
Contingent liabilities are not recognized in the financial statements. They are disclosed unless the possibility of an outflow of
resources embodying economic benefits is remote.
A contingent asset is not recognized in the financial statements but disclosed when an inflow of economic benefits is probable.
2.23. Subsequent events
Events after the reporting date that provide additional information about the Group’s and the Company’s position at the
statement of financial position date (adjusting events) are reflected in the financial statements. Events after the reporting date
that are not adjusting events are disclosed in the notes when material.
2.24. Offsetting and comparative figures
When preparing the financial statements, assets and liabilities, revenue and expenses are not set off, except the cases when
certain IFRS specifically requires such set-off. Financial assets and liabilities are offset and the net amount reported in the
statement of financial position when there is a legally enforceable right to offset the recognised amounts and there is an
intention to settle on a net basis, or realise the asset and settle the liability simultaneously.
2.25. Use of estimates in the preparation of financial statements
The preparation of financial statements in conformity with IFRSs requires management to make judgements, estimates and
assumptions that affect the reported amounts of assets, liabilities, income and costs and disclosure of contingencies, at the
reporting date and within the next financial year. Estimates and judgements are continually evaluated and are based on
management’s experience and other factors, including expectations of future events that are believed to be reasonable under
the circumstances. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the
revision affects only that period or in the period of the revision and future periods if the revision affects both current and future
periods.
Management also makes certain judgements, apart from those involving estimations, in the process of applying the accounting
policies. However, uncertainty about these assumptions and estimates could result in outcomes that could require a material
adjustment to the carrying amount of the asset or liability affected in the future.
Estimates and assumptions
The main areas where management is required to make significant and critical judgements and areas where estimates and
assumptions might have significant impact for the preparation of financial statements are described below:
Property, plant and equipment – useful life
The key assumptions concerning determination of the useful life of property, plant and equipment are as follows: expected
usage term of the asset, expected technical, technological or other obsolescence arising from changes or improvements in
the production, legal or similar limits on the use of the asset, such as the expiry dates of related leases.
Tax liabilities
The tax authorities have a right to examine the Group’s and the Company’s books and accounting records at any time during
the 5 years’ period after the current tax year and account for additional taxes and fines. In the opinion of the Company’s
management currently there are no circumstances which would raise substantial liability in this respect.
Related-party transactions
In the normal course of business the Group and the Company enter into transactions with their related parties. These
transactions are priced at market rates. Judgement is applied in determining if transactions are priced at market or non-market
rates, where there is no active market for such transactions. The basis for judgement is pricing for similar types of transactions
with unrelated parties.
Pension and jubilee benefits
VILNIAUS BALDAI AB, company code 121922783, Savanoriu Ave. 178B, Vilnius, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR 2022 ENDED
31 AUGUST 2022
(all amounts are in EUR thousand unless otherwise stated)
71
Key assumptions used in determining the provision for pension and jubilee benefits are as follows: employee turnover rate by
age group, discount rate, and wage and salary growth. The Group’s and the Company’s management makes judgements in
relation to these assumptions. See Note 14 for more details.
Revenue recognition
The management assesses the moment of revenue recognition, i.e. whether revenue is recognized over time or at a point of
time. The management assessed that customer do not simultaneously receive and consume the benefits provided by the
Company’s performance as the Company performs, the Company’s performance does not create or enhance an asset that
the customer controls as the asset is created or enhanced, the Company’s performance create an asset with an alternative
use to the Company and the Company do not has an enforceable right to payment for performance completed to date. Based
on this assessment management decided that revenues should be recognised at a point in time. Also, the management
estimates expected returns.
The management assesses if the sale of raw materials meets revenue recognition criteria according IFRS 15. The Company
provides raw materials to several external and related parties in order to obtain service from these parties - production of
component parts used in the further production of furniture. The management has analysed such contracts based on the
requirements of IFRS 15 and determined, that in most of cases there is no actual sale of raw materials and acquisition of
components but transaction is rather a purchase of production service. Vilniaus baldai, AB controls the process and has full
responsibility for the final customer. Raw materials were sold at purchase price to the production service provider.
Expected credit losses estimation
The management measures expected credit losses (ECL) and estimates allowance for trade receivables and contract assets.
Key assumption is determining the weighted-average loss rate.
Classification of spare part
The management makes judgement if spare parts meet the definition of property, plant and equipment. The basis of judgement
is determining if spare part is kept ensuring smooth operation of some machinery without interruptions or it not.
Recognition of deferred tax assets from unused investment relief
The management assesses the extent that it is probable that future taxable profits will be available against which recognized
deferred tax assets can be used.
2.26. Factoring
A factoring transaction is a financing transaction in which the factoring company finances the Company by purchasing debt
obligations from it. By this transaction, the Company transfers to the Factor the right to its receivables under the invoices due,
which are due in the future. Factoring can be with recourse (the factoring agent has the right to repay the debt obligations to
the Company) and without the right of recourse (the factoring agent has no right to repay the debt obligations to the Company).
Receivables transfer (factoring without recourse, it means, the buyer of the debt has no right to cancel the transaction) is
treated as a sale of debts and is written off immediately if the Company transfers all risks associated with the debt transfer
and no debt repurchase is contemplated, there is no provision for a debt buyer to foreclose on this transaction.
2020FY factoring contract is without the right of recourse (the factoring agent has no right to cancel the transaction), for this
reason, the trade receivables are reduced after the receipt of the factoring advance payment. In the statements of cash flows
factoring is included in the cash flows from financing activities.
2.27. Fair value measurement
A number of the Group’s and the Company’s accounting policies and disclosures require the determination of fair value, for
both financial and non-financial assets and liabilities.
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 measurement date in the principal, or in its absence, the most advantageous market to which the
Group and the Company have access at that date. The fair value of a liability reflects its non-performance risk.
When measuring the fair value of an asset or a liability, the Group and the Company use market observable data as far as
possible. Fair values are categorised within different levels in a fair value hierarchy based on the inputs used in the valuation
techniques as follows:
• Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;
• Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e.
as prices) or indirectly (i.e. derived from prices);
• Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
VILNIAUS BALDAI AB, company code 121922783, Savanoriu Ave. 178B, Vilnius, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR 2022 ENDED
31 AUGUST 2022
(all amounts are in EUR thousand unless otherwise stated)
72
If the inputs used to measure the fair value of an asset or a liability might be categorised within different levels of the fair value
hierarchy, the fair value measurement is categorised in its entirety in the same level of the fair value hierarchy as the lowest
level input that is significant to the entire measurement.
The Group and the Company recognize transfers between levels of the fair value hierarchy at the end of the reporting period
during which the change has occurred.
Fair values have been determined for measurement and / or disclosure purposes based on the described methods. Where
applicable, further information about the assumptions made in determining fair values is disclosed in the notes specific to that
asset or liability (Note 14 – Provisions for employee benefits).
2.28. Reportable segments
Based on the reports reviewed by the board of directors, considered to be the chief operating decision makers that are used
to make strategic decisions, Management of the Company has decided that the Company and the Group have a single
reportable segment, i.e. furniture segment, including sales of raw materials and finished production. No separate detailed
disclosure of segment reporting is presented.
3. Changes in significant accounting policies
There were no significant changes in accounting policies during the reporting period.
VILNIAUS BALDAI AB, company code 121922783, Savanoriu Ave. 178B, Vilnius, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR 2022 ENDED
31 AUGUST 2022
(all amounts are in EUR thousand unless otherwise stated)
73
4 Intangible assets
Software
Group
Company
Cost:
Balance as of 31 August 2020
297
297
Additions
115
115
Balance as of 31 August 2021
412
412
Additions
116
116
Sold and written off asset
(5)
(5)
Balance as of 31 August 2022
523
523
Amortisation:
Balance as of 31 August 2020
274
274
Charge for the year
12
12
Balance as of 31 August 2021
286
286
Charge for the year
48
48
Sold and written off asset
(5)
(5)
Balance as of 31 August 2022
329
329
Net book value as of 31 August 2021
126
126
Net book value as of 31 August 2022
194
194
Amortization expenses of intangible assets are included within operating expenses in profit or loss. Intangible assets of the
Group and the Company with an acquisition cost of EUR 275 thousand as of 31 August 2022 (as of 31 August 2021 –
EUR 280 thousand) are fully amortized and were still in use.
VILNIAUS BALDAI AB, company code 121922783, Savanoriu Ave. 178B, Vilnius, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR 2022 ENDED
31 AUGUST 2022
(all amounts are in EUR thousand unless otherwise stated)
74
5 Property, plant and equipment
Group
Land and
buildings
Machinery
and
equipment
Vehicles
Other
property,
plant and
equipment
Total
Cost:
Balance as of 31 August 2020
34,118
55,200
14
2,430
91,762
Additions
46
3,877
-
735
4,658
Sold and written off asset
(73)
(1,246)
-
(64)
(1,383)
Overwriting from one article to another
-
(3,409)
-
3,409
-
Balance as of 31 August 2021
34,091
54,422
14
6,510
95,037
Additions
21
3,679
-
123
3,823
Sold and written off asset
(2,391)
(6,469)
(3)
(1,127)
(9,990)
Overwriting from one article to another
-
(274)
-
274
-
Balance as of 31 August 2022
31,721
51,358
11
5,780
88,870
Accumulated depreciation:
Balance as of 31 August 2020
1,872
22,789
14
1,348
26,023
Charge for the year
690
3,236
-
227
4,153
Sold and written off asset
(47)
(905)
-
(57)
(1,009)
Balance as of 31 August 2021
2,515
25,120
14
1,518
29,167
Charge for the year
632
3,702
-
469
4,803
Sold and written off asset
(1,850)
(6,213)
(3)
(803)
(8,869)
Balance as of 31 August 2022
1,297
22,609
11
1,184
25,101
Net book value as of 31 August 2021
31,576
29,302
-
4,992
65,870
Net book value as of 31 August 2022
30,424
28,749
-
4,596
63,769
VILNIAUS BALDAI AB, company code 121922783, Savanoriu Ave. 178B, Vilnius, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR 2022 ENDED
31 AUGUST 2022
(all amounts are in EUR thousand unless otherwise stated)
75
5 Property, plant and equipment (cont’d)
Company
Land and
buildings
Machinery
and
equipment
Vehicles
Other
property,
plant and
equipment
Total
Cost:
Balance as of 31 August 2020
34,118
55,200
14
2,424
91,756
Additions
46
3,877
-
729
4,652
Sold and written off asset
(73)
(1,246)
-
(64)
(1,383)
Overwriting from one article to another
-
(3,409)
-
3,409
-
Balance as of 31 August 2021
34,091
54,422
14
6,498
95,025
Additions
21
3,679
-
120
3,820
Sold and written off asset
(2,391)
(6,469)
(3)
(1,125)
(9,988)
Overwriting from one article to another
-
(274)
-
274
-
Balance as of 31 August 2022
31,721
51,358
11
5,767
88,857
Accumulated depreciation:
Balance as of 31 August 2020
1,872
22,789
14
1,345
26,020
Charge for the year
690
3,236
-
225
4,151
Sold and written off asset
(47)
(905)
-
(57)
(1,009)
Balance as of 31 August 2021
2,515
25,120
14
1,513
29,162
Charge for the year
632
3,702
-
467
4,801
Sold and written off asset
(1,850)
(6,213)
(3)
(802)
(8,868)
Balance as of 31 August 2022
1,297
22,609
11
1,178
25,095
Net book value as of 31 August 2021
31,576
29,302
-
4,985
65,863
Net book value as of 31 August 2022
30,424
28,749
-
4,589
63,762
Depreciation charge for the year was recognised as follows:
Group
Company
2022
2021
2022
2021
Cost of production
4,737
3,958
3,736
3,958
Operating expenses and inventories cost of production
66
195
65
193
4,803
4,153
4,801
4,151
Property, plant and equipment of the Group and the Company with an acquisition cost of EUR 2,978 thousand was fully
depreciated as of 31 August 2022 (EUR 4,925 thousand as of 31 August 2021), and was still in active use. The major part of
the fully depreciated property, plant and equipment consists of machinery and equipment.
The Company does not have property, plant and equipment acquired under finance leases as at 31 August 2022 and as at
31 August 2021.
The Company’s prepayments for non-current assets amounted to EUR 82 thousand as of 31 August 2022 (EUR 110 thousand
as of 31 August 2021). Prepayments are classified as other property, plant and equipment.
VILNIAUS BALDAI AB, company code 121922783, Savanoriu Ave. 178B, Vilnius, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR 2022 ENDED
31 AUGUST 2022
(all amounts are in EUR thousand unless otherwise stated)
76
5 Property, plant and equipment (cont’d)
As at 31 August 2022, the Group and the Company have reclassified spare parts amounting to EUR 994 thousand
(EUR 1,292 thousand as of 31 August 2021) that meet the Property, plant and equipment criteria from Inventories to Property,
plant and equipment. These spare parts are booked under Other property, plant and equipment.
As of 31 August, 2022, the Company’s property, plant and equipment with the net book value of EUR 50,347 thousand and
inventories which classified as non-current assets amounting to EUR 994 thousand was pledged to the bank as collateral for
loans granted (respectively EUR 50,347 thousand and EUR 1,292 thousand as of 31 August 2021) (Note 12).
During 2022 and 2021, there were no capitalized borrowing costs in non-current assets.
6 Investments into subsidiaries
Acquisition cost of investment of the Company in subsidiaries as of 31 August 2022 and 2021 are presented below:
2022
2021
Share
capital
Acquisition
cost
Share
capital
Acquisition
cost
ARI-LUX UAB
100%
5
100%
5
5
5
Performance results of the subsidiary ARI-LUX UAB before elimination of related transactions in 2022 and 2021.
Statement of financial position
As of 31 August
2022
As of 31 August
2021
Other non-current assets
8
7
Trade receivables
146
244
Other receivables and current assets
38
32
Cash and cash equivalents
44
39
Total assets
236
322
Share capital
3
3
Retained earnings
98
148
Trade liabilities
-
5
Other current payables and accrued liabilities
135
166
Total equity and liabilities
236
322
Statement of profit or loss and other comprehensive income
2022
2021
Revenue
750
851
Cost of sales
(752)
(761)
Gross profit
(2)
90
Operating expenses
(81)
(62)
Profit (loss) before income tax
(83)
28
Income tax expense
-
(5)
Net profit (loss) for the reporting period
(83)
23
VILNIAUS BALDAI AB, company code 121922783, Savanoriu Ave. 178B, Vilnius, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR 2022 ENDED
31 AUGUST 2022
(all amounts are in EUR thousand unless otherwise stated)
77
7 Inventories
Group
Company
2022
2021
2022
2021
Raw materials
4,091
3,232
4,091
3,232
Work in progress
4,618
3,784
4,618
3,784
Finished goods
2,339
4,761
2,339
4,761
Spare parts for the repair of equipment used in
activities
547
227
547
227
Goods for resale
3
2
3
2
Less: adjustment to net realizable value
-
-
-
-
11,598
12,006
11,598
12,006
Raw materials consist of wood, accessories, plastics, chemical materials and other materials used in production.
Inventories in value of EUR 11,598 thousand are pledged to the bank according to loan agreements (Note 13) as of 31
August 2022. Inventories in value of EUR 12,006 thousand were pledged to the bank as of 31 August 2021.
8 Trade receivables
Group
Company
2022
2021
2022
2021
Other receivables after one year, gross
1,651
1,844
1,651
1,844
Less: impairment for doubtful receivables
(130)
(139)
(130)
(139)
1,521
1,705
1,521
1,705
Trade receivables, gross
3,190
3,539
3,190
3,541
1,878
Less: impairment for doubtful receivables
(46)
(11)
(46)
(11)
-
3,144
3,528
3,144
3,530
1,878
Factoring contract without recourse between Vilniaus Baldai AB and bank was signed on 20-05-2019. Factoring term 31-08-
2023. Maximum payment term: 90 days to be calculated from the issue date of the invoice. Factoring limit and currency –
EUR 9,340 thousand; EUR 8,952 thousand of factoring limit was used at 31 August 2022 (the limit used was
EUR 7,020 thousand as of 31 August 2021)
The liabilities of the buyers are reduced after the receipt of the factoring advance payment.
Trade receivables are non-interest bearing and are generally on 30 days payment terms.
2022 August 31 The Group's and the Company's doubtful receivables from customers were impaired - after one year
receivables by 130 thousand EUR, (In 2021, a decrease in value of 139 thousand EUR was recorded) for receivables within
one year – 46 thousand EUR (In 2021, a decrease in value of 11 thousand EUR was recorded).
The ageing analysis of the Group’s and the Company’s trade receivables as of 31 August 2022 and 31 August 2021 is as
follows:
Trade receivables
neither past due nor
impaired
Trade receivables past due, but not impaired
Total
Less than
30 days
30–60
days
60–90
days
90–120
days
More than
120 days
COMPANY
2021
3,128
573
712
769
53
-
5,235
2022
1,632
1,485
891
657
-
-
4,665
VILNIAUS BALDAI AB, company code 121922783, Savanoriu Ave. 178B, Vilnius, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR 2022 ENDED
31 AUGUST 2022
(all amounts are in EUR thousand unless otherwise stated)
78
Trade receivables
neither past due nor
impaired
Trade receivables past due, but not impaired
Total
Less than
30 days
30–60
days
60–90
days
90–120
days
More than
120 days
GROUP
2021
3,126
573
712
769
53
-
5,233
2022
1,632
1,485
891
657
-
-
4,665
9 Other receivables
Group
Company
2022
2021
2022
2021
Refundable VAT
1,144
803
1,144
803
Receivables of Employment Services Under the Ministry of
Social Security and Labour
-
-
-
-
Other receivables
430
355
400
324
1,574
1,158
1,544
1,127
Other receivables of the Group and the Company were neither past due nor impaired as of 31 August 2022 and 31 August
2021.
10 Cash and cash equivalents
Group
Company
2022
2021
2022
2021
Cash at bank
1,048
135
1,003
96
1,048
135
1,003
96
The Company's cash balances in bank accounts denominated in foreign currency and euro, and future inflows to the accounts
at JSC Citadele bank were pledged to the bank as collateral for loans granted (Note 12).
11 Reserves
Legal reserve
A legal reserve is a compulsory reserve under Lithuanian legislation. Annual transfers of not less than 5% of net profit are
compulsory until the reserve reaches 10% of the share capital. As of 31 August 2022 the Company’s legal reserve was fully
formed at amount 451 thousand. EUR (31 August 2021 – EUR 451 thousand).
12 Financial liabilities
Group
Company
As of 31
August
2022
As of 31
August
2021
As of 31
August
2022
As of 31
August
2021
Non-current borrowings
Syndicated loan from commercial banks
22,460
29,519
22,460
29,519
Issue price of VIVA bonds
6,000
-
6,000
-
Loans from related party
3,000
3,000
3,000
3,000
Loans from Ikea Supply AG
3,434
1,680
3,434
1,680
34,894
34,199
34,894
34,199
Current borrowings
VILNIAUS BALDAI AB, company code 121922783, Savanoriu Ave. 178B, Vilnius, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR 2022 ENDED
31 AUGUST 2022
(all amounts are in EUR thousand unless otherwise stated)
79
Syndicated loan from commercial banks
3,375
5,060
3,375
5,060
Loans from Ikea Supply AG
1,646
391
1,646
391
Credit line
-
2,933
-
2,933
5,021
8,384
5,021
8,384
The Company’s property, plant and equipment with the total net book value of EUR 50,347 thousand as of 31 August 2022
(EUR 50,347 thousand as of 31 August 2021), all the current cash balances and future inflows to the Company’s accounts at
the bank and inventories in value of EUR 11,598 thousand and other non-current assets EUR 994 thousand as at 31 August
2022 (inventories in value of EUR 12,006 thousand and other non-current assets EUR 1,292 thousand as at 31 August 2021)
were pledged as collateral for the loans granted.
Loan from related party - 3,000,000 EUR, Interest rate 3,5 %. Loan is subordinated against loans received from bank – it will
not be repaid until the liabilities for the loan from the bank will be settled.
Loan from Ikea Supply AG EUR 1,680 thousand with interest rate 1.7%, repayment term 2027 April 25.
Loan from Ikea Supply AG EUR 3,400 thousand with interest rate 2,4%, repayment term 2025 March 25.
Credit line 3,000,000 EUR, with interest rate 3,5%, was returned 2022 August 31.
Loans from the bank:
- EUR 12,891 thousand, interest rate 3,9%, maturity 30 April 2027
- EUR 12,944 thousand, interest rate 3,9%, maturity 30 April 2027
According loan agreement total loan commitment from the bank is EUR 25,835 thousand.
On November 19, 2021, 6,000 thousand EUR value bond signing agreement with the State Investment Management Agency,
which manages the Business Support Fund. The interest rate is 6.5%, the maturity date of the bonds is September 15, 2027
Actual interest rates are close to the effective interest rates.
Weighted average interest rates of borrowings outstanding at the year-end:
Group
Company
2022
2021
2022
2021
Loans
4,04%
3.09%
4,04%
3.09%
Borrowings at the end of the year currencies:
Group
Company
2022
2021
2022
2021
Borrowings denominated in:
EUR
39,915
42,583
39,915
42,583
39,915
42,583
39,915
42,583
Reconciliation of movements of liabilities to cash flows arising from financing activities:
Group
Company
Borrowings as at 31.08.2021
42,583
42,583
Proceeds from borrowings
9,400
9,400
Repayments of borrowings
(12,068)
(12,068)
Borrowings as at 31.08.2022
39,915
39,915
12.1 IFRS 16 “Leases”
The Group and the Company apply the new standard using a modified retrospective method, which means that the
comparative figures will not be restated. The overall effect of applying IFRS 16 was recognized in 2019. January 1 From 2019
January 1 lease liabilities classified as leases that were previously classified in accordance with IAS 17 for buses are measured
at the present value of the remaining discounted lease payments using an additional school rate. The Group and the Company
VILNIAUS BALDAI AB, company code 121922783, Savanoriu Ave. 178B, Vilnius, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR 2022 ENDED
31 AUGUST 2022
(all amounts are in EUR thousand unless otherwise stated)
80
recognize the assets of the manager in an amount equal to the lease liabilities, adjusting the amount of lease payments
prepaid or accrued during 2019. August 31 the right to use the carrying amount and lease obligations in accordance with IFRS
16 for leases that are classified as finance leases in accordance with IAS 17, 2019. January 1 is the right to use the carrying
amount of the asset and the lease liability for accounting purposes in accordance with IAS 17 before the transition to IFRS 16.
As of 31
August 2022
As of 31
August 2021
Assets under management
847
735
Premises
-
215
Vehicles
847
520
Long - term lease obligations
587
428
Short - term lease obligations
278
328
Increase in total liabilities
865
756
In the table, deferred tax assets and liabilities from the right to use the property and lease liabilities are offset when there is a
legally enforceable right to set off current tax assets against current tax liabilities.
The Group and the Company have entered into lease agreements for the operation of vehicles and premises. Previously,
operating lease costs were recognized by the Group and the Company on a straight-line basis over the lease term, and assets
and liabilities were recognized only to the extent of the time difference between the actual lease payments and the recognized
expense.
From 2019 September 1 The Group includes payments due in the lease as a lease liability.
Group
Company
2022
2021
2022
2021
Long time rent according IFRS 16 of which:
587
428
587
428
Premises lease obligation
-
169
-
169
Vehicle rental obligation
587
259
587
259
Long time rent according IFRS 16 current liabilities of which:
278
328
278
328
Premises lease obligation
-
58
-
58
Vehicle rental obligation
278
270
278
270
865
756
865
756
13 Provisions for employee benefits
Group
Company
2022
2021
2022
2021
Provisions for pension benefits
206
254
173
254
Provisions for jubilee and other benefits
377
411
377
411
583
665
550
665
Provisions for pension and jubilee benefits comprise amounts calculated in line with the collective employment agreement
effective at the Company. Each employee is entitled to a jubilee benefit and a pension benefit amounting to 2- or 3-months’
salary payments on leaving the Company after reaching the retirement age. Key assumptions used in determining the
provisions for pension and jubilee benefits are as follows: employee turnover rate by age group, discount rate, and wage and
salary growth.
The main actuarial assumptions used for the calculation of provisions for pension and jubilee benefits were as follows:
VILNIAUS BALDAI AB, company code 121922783, Savanoriu Ave. 178B, Vilnius, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR 2022 ENDED
31 AUGUST 2022
(all amounts are in EUR thousand unless otherwise stated)
81
2022
2021
2020
Discount rate based on inflation forecast
1.5%
1.5%
1.5%
Salary growth rate
6%
6%
6%
Rate of employee turnover by age group:
younger than 25 years
80%
80%
40%
from 25 to 45 years
30%
30%
40%
from 45 to 59 years
25%
25%
20%
from 59 to 75 years
20%
20%
15%
Management has reviewed the rate of employee turnover by age group and based on historical data has adjusted them to
bring the data into line with the Company’s data.
The following table demonstrates the sensitivity of the Group’s and the Company’s other comprehensive income to possible
changes in actuarial assumptions with all other variables held constant:
Increase / decrease, %
Impact on other
comprehensive income
2021
Discount rate
+0.5%
9
Salary growth rate
+0.5%
(9)
Discount rate
-0.5%
9
Salary growth rate
-0.5%
(9)
The movement in the provisions for pension benefits is as follows:
The Group and the Company
2022
2021
2020
At 1 September
254
294
244
Growth in the current year
55
25
28
Payments
(18)
(14)
(27)
Re-measurements of pension benefits
(85)
(51)
49
At 31 August
206
254
294
The movement in the provisions for jubilee and other benefits is as follows:
The Group and the Company
2022
2021
2020
At 1 September
411
414
391
Growth in the current year
75
159
219
Payments
(109)
(162)
(196)
At 31 August
377
411
414
14 Trade payables
Trade payables are non-interest bearing and are normally settled on 30–90 days terms.
VILNIAUS BALDAI AB, company code 121922783, Savanoriu Ave. 178B, Vilnius, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR 2022 ENDED
31 AUGUST 2022
(all amounts are in EUR thousand unless otherwise stated)
82
15 Other current and accrued liabilities
Group
Company
2022
2021
2022
2021
Payroll liabilities and related taxes
1,187
1,443
1,108
1,346
Accrued vacation
1,061
1,450
1,015
1,398
Dividends payable
986
995
986
995
Other payables and accrued liabilities
544
177
537
163
3,778
4,065
3,646
3,902
Other payables are non-interest bearing and are normally settled on 15–30 day terms. Dividends normally are settled within
one year.
16 Revenue
In 2022 and 2021 sales of goods comprised sales of furniture, which accounted for approx. 99 per cent of total sales, while
the rest were sales of raw materials and waste.
The main customer of the Company is IKEA Supply AG. Sales to this customer in 2022 amounted to EUR 100,215 thousand,
i.e. 99,5 per cent of total sales (in 2021 sales amounted to EUR 99,163 thousand, i.e. 99,6 per cent of total sales). The
Company was working with this customer on the basis of short-term agreements since 1998, from 1 February 2018 long term
agreement was signed about purchases until 2025 year.
Group
Company
2022
2021
2022
2021
Primary geographical markets:
European Union countries, excluding Lithuania
57,298
53,379
57,298
53,379
Non-European Union countries
42,642
45,508
42,642
45,508
Lithuania
798
477
798
477
100,738
99,364
100,738
99,364
Major products lines:
Furniture
100,188
99,115
100,188
99,115
Raw materials
550
249
550
249
100,738
99,364
100,738
99,364
The Group and the Company have only non-governmental customers. All revenues are recognized at the point in time.
17 Cost of sales
Group
Company
2022
2021
2022
2021
Materials
69,914
64,762
69,914
64,762
Wages, salaries
15,866
15,490
15,140
14,756
Subsidies from Employment Services
-
(1,003)
-
(1,003)
Depreciation
4,813
3,959
4,812
3,958
Depreciation according to IFRS 16
316
242
316
242
Social security
27
275
26
261
Other production expenses
9,726
8,289
10,466
9,128
100,914
92,014
100,913
92,104
VILNIAUS BALDAI AB, company code 121922783, Savanoriu Ave. 178B, Vilnius, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR 2022 ENDED
31 AUGUST 2022
(all amounts are in EUR thousand unless otherwise stated)
83
18 Selling and distribution expenses and administrative expenses
Group
Company
2022
2021
2022
2021
Selling and distribution expenses:
Transportation and logistics expenses
551
872
551
872
Wages, salaries
266
73
266
73
Depreciation and amortisation
4
8
4
8
Utilities, maintenance and communications
18
20
18
20
Other
80
76
80
76
919
1,049
919
1,049
Group
Company
2022
2021
2022
2021
Administrative expenses:
Wages, salaries
2,317
2,282
2,258
2,241
Subsidies from Employment Services
-
(102)
-
(102)
Transportation and logistics expenses
42
91
42
91
Social security
41
42
40
41
Audit and consultation expenses
580
511
580
511
Depreciation and amortisation
110
70
109
69
Depreciation according to IFRS 16
83
88
83
88
Utilities, maintenance and communications
410
375
408
375
Waste utilisation expenses
303
260
303
260
Business trips expenses
22
9
22
9
Charity and support expenses
18
11
18
11
Other
1,636
1,261
1,620
1,246
5,562
4,898
5,483
4,840
19 Other operating income and expenses
Group
Company
2022
2021
2022
2021
Other operating income
Rent and utilities income
384
283
384
283
Gain on disposal of property, plant and equipment
9,770
20
9,770
20
Heating revenue
569
221
569
221
Other income
197
194
201
198
10,920
718
10,924
722
Other operating expenses
Direct costs of rent income
(156)
(56)
(156)
(56)
Heat generation costs
(321)
(263)
(321)
(263)
Losses on disposal of property, plant and equipment
-
(261)
-
(261)
Other expenses
(168)
(28)
(168)
(28)
(645)
(608)
(645)
(608)
VILNIAUS BALDAI AB, company code 121922783, Savanoriu Ave. 178B, Vilnius, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR 2022 ENDED
31 AUGUST 2022
(all amounts are in EUR thousand unless otherwise stated)
84
20 Finance income and finance costs
Group
Company
2022
2021
2022
2021
Finance costs
Interest expenses
(1,709)
(1,435)
(1,709)
(1,435)
Expenses due to currency exchange
(3)
(4)
(3)
(4)
Other financial expenses
(66)
-
(66)
-
(1,778)
(1,439)
(1,778)
(1,439)
During 2021 and 2022, there were no capitalized borrowing costs in non-current assets.
21 Income tax
Group
Company
2022
2021
2022
2021
Components of the income tax expense
Income tax expenses for the reporting year
-
5
-
-
Income tax expenses from dividends paid to natural persons
-
-
-
-
Total current income tax expense
-
5
-
-
Recognition and reversal of temporary differences
378
(103)
378
(103)
Change in deferred tax
378
(103)
378
(103)
Income tax expense carried in profit or loss
378
(98)
378
(103)
Deferred income tax asset and liability as of 31 August 2021 and 31 August 2022 was accounted using tax rate of 15%.
In 2022, the Group and the Company implemented the investment project by allocating new property, plant and equipment
intended for the increase of output and labour productivity, expansion of the range of goods produced with new products
and major change of the manufacturing process. The investment project covered investments of EUR 0,5 million (EUR
1,5 million at 2021), related to the acquisition and 3,5 million (EUR 0,7 million at 2021) investment project advantage.
Income tax expense disclosed in the statement of profit or loss and other comprehensive income may be reconciled to income
tax expense that would arise using an enacted income tax rate applicable to profit before income tax.
Group
2022
2021
Profit (loss) before tax
1,840
74
Tax calculated at a statutory 15% tax rate
15 %
276
15 %
11
Tax effects of:
- Expenses not deductible for tax purposes
0 %
261
0 %
130
- Income not subject to tax
0 %
(16)
0 %
(24)
- Income tax relief due to investment projects
(15 %)
(521)
(15 %)
(112)
Income tax expense carried in profit or loss
15 %
-
15 %
5
Company
2022
2021
Profit (loss) before tax
1,924
46
Tax calculated at a statutory 15% tax rate
15 %
289
15 %
7
Tax effects of:
VILNIAUS BALDAI AB, company code 121922783, Savanoriu Ave. 178B, Vilnius, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR 2022 ENDED
31 AUGUST 2022
(all amounts are in EUR thousand unless otherwise stated)
85
- Expenses not deductible for tax purposes
0 %
255
0 %
129
- Income not subject to tax
0 %
(16)
0 %
(24)
- Income tax relief due to investment projects
(15 %)
(528)
(15 %)
(112)
Income tax expense carried in profit or loss
15 %
-
15 %
-
The analysis of deferred tax assets and deferred tax liabilities is as follows:
Group
Company
2022
2021
2022
2021
Deferred tax assets
1,059
1,471
1,059
1,471
Deferred tax liability
7
(27)
7
27
1,066
1,444
1,066
1,444
The movement in the Group’s and Company’s deferred tax assets and liabilities (prior to and after offsetting the balances)
during the year was as follows:
22 Earnings per share
Basic and diluted earnings per share are calculated by dividing the net profit attributable to shareholders by the weighted
average number of ordinary shares issued and paid during the year. There are no potential ordinary shares to be issued,
therefore basic and diluted earnings per share are equal.
Group
2020
Credited
(debited)
to income
tax
expenses
2021
Credited
(debited)
to income
tax
expenses
2022
Deferred tax assets
– Accrued charges
109
(13)
96
(18)
78
– Unused Investment relief
1,261
114
1,375
(394)
981
1,370
101
1,471
(412)
1,059
Deferred tax liabilities
– Investment relief
(29)
2
(27)
34
7
(29)
2
(27)
34
7
Deferred tax assets, net
1,341
103
1,444
378
1,066
Company
2020
Credited
(debited)
to income
tax
expenses
2021
Credited
(debited)
to income
tax
expenses
2022
Deferred tax assets
– Accrued charges
109
(13)
96
(18)
78
– Unused Investment relief
1,261
114
1,375
(394)
981
1,370
101
1,471
(412)
1,059
Deferred tax liabilities
(29)
2
(27)
34
7
– Investment relief
(29)
2
(27)
34
7
Deferred tax assets, net
1,341
103
1,444
378
1,066
VILNIAUS BALDAI AB, company code 121922783, Savanoriu Ave. 178B, Vilnius, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR 2022 ENDED
31 AUGUST 2022
(all amounts are in EUR thousand unless otherwise stated)
86
Group
Company
2022
2021
2022
2021
Net profit attributable to shareholders
1,462
172
1,546
149
Weighted average number of shares (thousand)
3,886
3,886
3,886
3,886
Basic earnings per share (in EUR)
0.38
0.04
0.40
0.04
There were no changes in the share capital of the Company during 2022 and 2021; therefore, the weighted average number
of shares equals the total number of shares.
23 Financial risk management
General part
The Group and the Company are exposed to the following financial risks: liquidity risk, credit risk, foreign exchange risk and
interest rate risk. This note provides information on the impact of these risks on the Group and the Company, the objectives,
policies, and processes for assessing and managing these risks.
The Group's and the Company's risk management is performed by the Group's management - it identifies and analyzes the
risks faced by the Group and the Company, implements and maintains appropriate limits and controls. The Group and the
Company strive to create a disciplined and constructive risk management environment in which all employees are aware of
their roles and responsibilities.
Financial instruments by category
The financial risk management has been applied to the line items below:
Group
Company
Category – Loans and receivables
Category – Loans and receivables
2022
2021
2022
2021
Financial assets
Loans granted
-
-
-
-
Trade and other receivables, of
which:
5,846
6,068
5,810
6,039
Other receivables after one year
1,521
1,705
1,521
1,705
Receivables from customers
3,144
3,528
3,145
3,530
VAT refundable
1,144
803
1,144
803
Receivables from the
Employment Service
to the Ministry of Social Security
and Labor
-
-
-
-
Other receivables
37
32
-
1
Cash and cash equivalents
1,048
135
1,004
96
6,894
6,203
6,814
6,135
VILNIAUS BALDAI AB, company code 121922783, Savanoriu Ave. 178B, Vilnius, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR 2022 ENDED
31 AUGUST 2022
(all amounts are in EUR thousand unless otherwise stated)
87
Group
Company
Category – Financial liabilities
measured at amortised cost
Category – Financial liabilities measured
at amortised cost
2022
2021
2022
2021
Financial liabilities
Borrowings
39,915
39,650
39,915
39,650
Credit line
-
2,933
-
2,933
Trade and other payables, of
which:
15,692
16,153
15,750
16,283
Trade debt
12,780
13,558
12,927
13,800
Amounts payable on fixed assets
394
115
394
115
Wages and related taxes
1,187
1,443
1,108
1,346
Dividends payable
986
995
986
995
Other amounts payable
345
42
335
27
55,607
58,736
55,665
58,866
Liquidity risk
The Group’s and the Company’s policy is to maintain sufficient cash and cash equivalents or have available funding through
an adequate amount of committed credit facilities to meet their commitments at a given date in accordance with their strategic
plans. The Group’s and the Company’s liquidity (total current assets / total current liabilities) and quick ratios ((total current
assets – inventories) / total current liabilities) as of 31 August 2022 were 0.75 and 0.25 (Group’s), 0.75 and 0.25 (Company’s)
respectively (the Group’s liquidity and quick ratio as of 31 August 2021 – 0.64 and 0.18, and the Company’s 0.63 and 0.18
respectively).
The tables below summarize the maturity profile of the Group’s and the Company’s financial liabilities as of 31 August 2022
based on contractual undiscounted cash flows (planned payments and interest):
Group
On
demand
Less than 3
months
3 to 12
months
1 to 5 years
More than
5 years
Total
Interest bearing loans and
borrowings
-
1,682
7,792
24,655
12,774
46,903
Trade and other payables
5,245
10,922
-
-
-
16,167
Balance as of
31 August 2021
5,245
12,604
7,792
24,655
12,774
63,070
Interest bearing loans and
borrowings
-
1,334
6,033
27,084
10,197
44,648
Trade and other payables
3,458
12,234
-
-
-
15,691
Balance as of
31 August 2022
3,458
12,604
6,033
27,084
10,197
60,340
Company
On
demand
Less than 3
months
3 to 12
months
1 to 5 years
More than
5 years
Total
Interest bearing loans and
borrowings
-
1,682
7,792
24,655
12,774
46,903
VILNIAUS BALDAI AB, company code 121922783, Savanoriu Ave. 178B, Vilnius, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR 2022 ENDED
31 AUGUST 2022
(all amounts are in EUR thousand unless otherwise stated)
88
Trade and other payables
5,148
11,149
-
-
-
16,297
Balance as of
31 August 2021
5,148
12,831
7,792
24,655
12,774
63,200
Interest bearing loans and
borrowings
-
1,334
6,033
27,084
10,197
44,648
Trade and other payables
3,379
12,371
-
-
-
15,750
Balance as of
31 August 2022
3,379
13,705
6,033
27,084
10,197
60,398
Credit risk
Credit risk is a risk that the Group and the Company will incur financial losses, if a buyer or other party fails to fulfil its
contractual liabilities. This risk is mainly associated with the Group’s and the Company’s trade debtors.
The Group and the Company have significant concentration of trading counterparties. The main customer of the Group and
the Company – IKEA Supply AG – as of 31 August 2022 accounted for approximately 74% of the total Group’s and Company’s
trade receivables (as of 31 August 2021 over 74%). Also, the major part of the Company’s sales is with this customer (Note
16).
The Group and the Company do not guarantee obligations of other parties. The maximum exposure to credit risk is
represented by the carrying amount of each financial asset. Consequently, the Management of the Group and the Company
considers that its maximum exposure is reflected by the amount of trade receivables recognized at the statement of financial
position date.
With respect to trade and other receivables that are neither impaired nor past due, there are no indications as of the reporting
date that the debtors will not meet their payments obligations since receivables balances are monitored on an ongoing basis.
Impairment accounted for by the Group and the Company until 1 September 2019 reflects the estimated losses from doubtful
trade receivables. The principal component of impairment is individually assessed losses from significant doubtful trade
receivables. Impairment assessment methods were constantly reviewed to ensure that the difference between the estimated
and actual losses was as low as possible.
As of 1 September 2018, the Group and the Company assess the probability of default upon initial recognition of financial
assets and at each reporting date considering whether the credit risk has significantly increased since initial recognition. To
assess whether there has been a significant increase in credit risk, the Group and the Company compare the risk of default
related to assets as at the reporting date to the risk of default on initial recognition.
Credit risk is measured as the maximum credit exposure for each group of financial instruments and is equal to their carrying
amount. The major credit risk relates to the carrying amount of each group of assets.
The Group’s sales and trade receivable amounts from main customers comprised:
Customers:
Sales
Trade receivables
Four or more years "trading history with the Group"
100,649
4,838
Less than four years "trading history with the Group"
89
3
Higher risk
-
-
Total gross carrying amount
100,738
4,841
The maximum exposure to credit risk of the Group’s and the Company’s cash and cash equivalents is equal to the fair value
of cash and cash equivalents classified as cash and cash equivalents at the date of financial position statements preparation.
The management of the Group and the Company considers that the risk arising from placement of cash and cash equivalents
at bank accounts and other short-term financial instruments is not significant, as placements are made only in commercial
banks in Lithuania which have high credit ratings.
For calculation of the expected credit losses, trade receivables are categorised into separate groups according to credit risk
characteristics. The amounts for each group are analysed by the number of days past due. As trade and other receivables
usually do not include deposit or other collaterals, the ratio of expected losses coincides with the probability of default.
VILNIAUS BALDAI AB, company code 121922783, Savanoriu Ave. 178B, Vilnius, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR 2022 ENDED
31 AUGUST 2022
(all amounts are in EUR thousand unless otherwise stated)
89
The Group and the Company determine credit risk based on historical data, considering past due payments.
The following table provides information about the Group’s and the Company’s exposure to credit risk and ECLs for trade
receivables as at 31 August 2022:
Expected credit
losses, %
Initial value
Impairment
Carrying amount
Not past due
1,973
-
1,973
Past due for 1 to 30 days
0%
1,146
-
1,146
Past due for 31 to 60 days
1%
890
9
881
Past due for 61 to 120 days
2%
832
17
815
Past due for over 120 days
3%
-
-
-
Total
4,841
26
4,815
The Management had analyzed trade receivables. 2022 August 31 the impairment loss amounted to EUR 176 thousand of
the Group's and the Company's trade receivables has been made. (2021 August 31 the impairment loss amounted to EUR
150 thousand).
Foreign exchange risk
Major currency risks of the Group and the Company occur due to the fact that the Group and the Company borrow foreign
currency denominated funds and are involved in imports and exports. The Group’s and the Company’s policy is to match cash
flows arising from highly probable future sales and purchases in each foreign currency. The Group and the Company do not
use any financial instruments to manage their exposure to foreign exchange risk other than aiming to borrow in EUR.
Financial assets and liabilities stated in various currencies as of 31 August 2022 were as follows (stated in EUR):
Group
Company
Assets
Liabilities
Assets
Liabilities
EUR
6,894
55,541
6,814
55,599
PLN
-
66
-
66
6,894
55,607
6,814
55,665
Financial assets and liabilities stated in various currencies as of 31 August 2021 were as follows (stated in EUR):
Group
Company
Assets
Liabilities
Assets
Liabilities
EUR
6,203
58,451
6,135
58,581
PLN
-
285
-
285
USD
-
-
-
-
6,203
58,736
6,135
58,866
Interest rate risk
The Group’s and the Company’s borrowings comprise borrowings with variable interest rates, related to EURIBOR, which
creates an interest rate risk. There were no financial instruments designated to manage the exposure to fluctuation in interest
rates outstanding as of 31 August 2022 and 31 August 2021.
Group
Company
Increase/ decrease, %
Effect on profit
before tax
Increase/ decrease, %
Effect on profit
before tax
2021
VILNIAUS BALDAI AB, company code 121922783, Savanoriu Ave. 178B, Vilnius, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR 2022 ENDED
31 AUGUST 2022
(all amounts are in EUR thousand unless otherwise stated)
90
EUR
+1 %
(426)
+1 %
(426)
EUR
-1 %
426
-1 %
426
2022
EUR
+1 %
(399)
+1 %
(399)
EUR
-1 %
399
-1 %
399
Fair value of financial assets and liabilities
The Group and the Company hold cash and make investments only in other short-term investing instruments of commercial
banks in Lithuania with high credit ratings.
Trade and other receivables, trade and other payables and borrowings. In the management’s opinion, the carrying
amounts of trade and other receivables, trade and other payables and borrowings approximate their fair values, as trade and
other receivables, trade and other payables are current, and borrowings are subject to EURIBOR market based variable
interest rates.
24. Capital management
The Group’s and the Company’s capital includes share capital, legal reserve and retained earnings. The primary objective of
the capital management is to ensure that the Group and the Company comply with externally imposed capital requirements.
The Group and the Company manage their capital structure and make adjustments to it in the light of changes in economic
conditions and the risk characteristics of their activities. To maintain or adjust the capital structure, the Company may adjust
the dividend payment to shareholders, return capital to shareholders or issue new shares. No changes were made in the
objectives, policies or processes of capital management during the year ended 31 August 2022.
The Company is obliged to keep its equity at no less than 50% of its share capital, as imposed by the Law on Companies of
the Republic of Lithuania.
The Group and the Company have externally imposed capital requirements from the bank.
At 21 June 2019 was signed the loan agreement between VILNIAUS BALDAI AB and EUROPEAN BANK FOR
RECONSTRUCTION AND DEVELOPMENT and AS CITADELE BANKA, LITHUANIAN BRANCH. According to this
agreement, the following requirements are imposed to secure the repayment of bank borrowings and settlement of finance
lease obligations:
Financial Ratios:
a) Debt Service Coverage Ratio. The Borrower shall, at all times commencing on 31 August 2020 onwards, maintain a
ratio of:
i. Cash Available for Debt Service for the 12 months preceding the date of calculation; to
ii. the sum of the principal repayments (excluding any amounts falling due under any overdraft or revolving
facility that were available for simultaneous redrawing according to the terms of such facility) and interest
payments on all Financial Indebtedness due or accrued during such period, on a 12-month rolling stock
basis, of not less than 1:20:1.
b) Net Financial Debt to EBITDA Ratio. The Borrower, shall at all times commencing on 31 August 2021 onwards,
maintain a ratio of (x) Net Financial Debt to (y) EBITDA for the 12 months preceding the date of calculation of not
more than:
i. as at 31 August 2021, 5.00:1;
ii. for the period from 1 September 2021 to 31 August 2022, 4.50:1;
iii. for the period from 1 September 2022 to 31 August 2023, 3.50:1; and
iv. for the period from 1 September 2023 onwards, 3.00:1.
c) Equity Ratio. The Borrower shall, at all times commencing on 31 August 2020 onwards, maintain a ratio of Equity to
[Total Assets] of not less than:
i. as at 31 August 2020, 0.3:1;
ii. for the period from 1 September 2020 to 31 August 2021, 0.35:1; and
iii. for the period from 1 September 2021 onwards, 0.40:1.
d) Minimum EBITDA. The Borrower shall, at all times commencing on the date of this Agreement onwards, maintain
EBITDA of not less than:
VILNIAUS BALDAI AB, company code 121922783, Savanoriu Ave. 178B, Vilnius, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR 2022 ENDED
31 AUGUST 2022
(all amounts are in EUR thousand unless otherwise stated)
91
i. for the period from the date of this Agreement to 31 August 2019, EUR 5,500,000;
ii. for the period from 1 September 2019 to 31 August 2020, EUR 6,800,000; and
iii. for the period from 1 September 2020 to 28 February 2021, EUR 7,200,000, to be calculated on a 12-month
rolling stock basis.
e) Minimum EBITDA ratio. The Borrower shall, at all times commencing on the date of this Agreement onwards, maintain
a percentage of (x) EBITDA divided by (y) sales revenue of not less than:
i. for the period from the date of this Agreement to 31 August 2019, 7%; and
ii. for the period from 1 September 2019 to 28 February 2021, 8%, to be calculated on a 12-month rolling stock
basis.
The management monitors that the Company is in line with both above mentioned capital requirements. No other capital
management instruments are used.
2022FY banks’ covenants are presented below:
• Debt coverage ratio not less than 1.2
At 31 August 2022 debt coverage ratio is 0.77
• Equity ratio not less than 0.40
At 31 August 2022 equity ratio is 0.35
• Net financial debt to EBITDA ratio not less than 4.5
At 31 August 2022 Net Financial Debt to EBITDA Ratio 4.57
As of 31 August 2022, the Group and the Company did not complied two of the external requirements established to secure
the repayment of bank borrowings.
On November 19, 2021, 6,000 thousand EUR value bond signing agreement with the State Investment Management Agency,
which manages the Business Support Fund. According to this contract, the following requirements are imposed:
1. Net financial Debt and EBITDA ratio:
- not applicable until 30.11.2021
- < 14.5x until 28.02.2022
- < 10.5x until 31.05.2022
- < 6.0x until 31.08.2022
- < 5.5x until 30.11.2022
- < 5.0x until 28.02.2023
- < 4.5x until 31.05.2023
- < 4.0x from 01.06.2023
2. Debt Service Coverage Ratio (DSCR)
- not applicable until 31.05.2022.05.31
- > 1.2x untill 01.06.2022
3. Equity to assets ratio:
- > 25% untill 31.08.2022
- > 35% from 01.09.2022
At 31 August 2022 Net financial Debt and EBITDA ratio not more than 6
• Net financial debt to EBITDA ratio not less than 4.5
At 31 August 2022 Equity to assets ratio not less than 0.35
• Equity to assets ratio 0.35
At 31 August 2022 the past twelve months DSCR not less than 1.2
• DSCR 1.4
25. Related-party transactions
The parties are considered related when one party has the possibility to control the other one or have significant influence
over the other party in making financial and operating decisions. The related parties of the Company as of 31 August 2022
were: ARI-LUX UAB (the subsidiary), Invalda Privatus Kapitalas AB (ultimate shareholder) and all companies controlled by
Invalda Privatus Kapitalas AB (Bordena UAB, Krevina UAB, Švytėjimas UAB, Inreal valdymas UAB, Inreal Go UAB, Geruvis
VILNIAUS BALDAI AB, company code 121922783, Savanoriu Ave. 178B, Vilnius, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR 2022 ENDED
31 AUGUST 2022
(all amounts are in EUR thousand unless otherwise stated)
92
UAB, Panerių konversija UAB). (31 August 2021 were: ARI-LUX UAB (the subsidiary), Invalda Privatus Kapitalas AB (ultimate
shareholder) and all companies controlled by Invalda Privatus Kapitalas AB (other related parties).)
Transactions of the Group and the Company with related parties during 2022 and 2021 and the balances as of 31 August
2022 and 31 August 2021 were as follows:
a) Sales and purchases of goods and services and year-end balances arising from these sales/purchases
2021
Group
Purchases
Sales
Receivables
Payables
UAB „Bordena“
9,236
5,750
2,849
-
UAB „Inreal valdymas“
60
-
-
-
UAB „Švytėjimas“
96
1
-
-
9,392
5,751
2,849
-
2021
Company
Purchases
Sales
Receivables
Payables
UAB „ARI-LUX“
851
7
2
244
UAB „Bordena“
9,236
5,750
2,849
-
UAB „Inreal valdymas“
60
-
-
-
UAB „Švytėjimas“
96
1
-
-
10,243
5,758
2,851
244
2022
Group
Purchases
Sales
Receivables
Payables
UAB “Panerių konversija”
426
10,201
1
-
UAB „Bordena“
13,668
8,132
3,912
-
UAB „Inreal valdymas“
4
-
-
-
UAB „Švytėjimas“
82
4
1
26
UAB “Inreal Geo”
10
-
-
-
14,190
18,337
3,914
26
2022
Company
Purchases
Sales
Receivables
Payables
UAB „ARI-LUX“
750
8
-
146
UAB “Panerių konversija”
426
10,201
1
-
UAB „Bordena“
13,668
8,132
3,912
-
UAB „Inreal valdymas“
4
-
-
-
UAB „Švytėjimas“
82
4
1
26
UAB “Inreal Geo”
10
-
-
-
14,940
18,345
3,914
172
In 2022 sales to related parties comprised sale of raw materials (EUR 8,132 thousand) that in financial statements reduces
cost of sales, other minor sales and the sale of production buildings (10,200 thousand EUR), which is accounted for in income
from other activities.
b) Loans from Invalda Privatus Kapitalas AB to Trenduva UAB,
transferred to the Company after the merger of UAB Trenduva:
VILNIAUS BALDAI AB, company code 121922783, Savanoriu Ave. 178B, Vilnius, Lithuania
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR 2022 ENDED
31 AUGUST 2022
(all amounts are in EUR thousand unless otherwise stated)
93
2022
2021
At 1 September
-
-
Non-current loans
3,000
3,000
Loan repayments received
-
-
Interest charged
105
105
Interest payable
362
257
At 31 August
3,362
3,257
The interest payable is shown in the balance sheet under “Trade payables”.
Remuneration of the management and other payments
The Company’s General Manager, Chief Financial Officer, Head of Technical Services, Chief Operating Officer, Head of HR,
Head of Purchasing, Strategic Projects Manager and Head of Business Development are considered to be the key
management of the Group.
Group
Company
2022
2021
2022
2021
Wages, salaries
540
733
539
732
Social security
10
12
10
12
550
745
549
744
The management of the Group and the Company did not receive any loans, guarantees; no other payments or property
transfers were made or accrued.
26. Contingent liabilities
As of 31 August 2022 the Group and the Company had no significant contingent liabilities.
The tax authorities have a right to examine the Groups and the Company’s books and accounting records at any time during
the 3 years’ period after the current tax year and account for additional taxes and fines. In the opinion of the Company’s
management currently there are no circumstances which would raise substantial liability in this respect.
27. Going concern
Last year, one of the largest new factory projects in the Company's history was successfully completed. Currently, all
production lines have been relocated and operate in one factory, which allows us to fully concentrate on improving the
production flow, increasing efficiency, saving of electricity use, ensuring quality and improving its indicators. In the next
financial year, the new production base will allow a significant increase in production efficiency and the use of resources while
saving duplicate costs, which will allow to amortize possible future unfavorable market trends. The Company's production and
sales volumes will depend on the order volumes of the main customer, with whom the Company has signed a long-term
agreement ensuring a certain stable flow of orders. In the light of the geopolitical uncertainties and global economic trends,
this is evaluated as a risk that could affect the Company’s sales and financial results in the short-term.
28. Events after the end of the reporting period
November 3, 2022 at the general meeting of shareholders of the Company, the decision was made to change the
Company's address to Pramonės st. 23, Guopstų vil., Old Trakai council
There were no other significant events after 31 August 2022 until the date of approval of these financial statements.
General Manager
Jonas Krutinis
2 December 2022
Chief Accountant
Elinga Judickienė
2 December 2022
SOCIAL RESPONSIBILITY
REPORT 2022 m.
Content
2022 for ‘Vilniaus baldai’
Main activity indicators. Timeline
New factory
Responsible use of resources
Environmental safety and quality
Heat production from renewable energy sources
Employees
Work environment
Value system based on employee insights
Honest and transparent business practice
A social company
Social responsibility report information
SDG Index
3 page
4 page
5 page
6 page
8 page
10 page
11 page
14 page
15 page
16 page
17 page
18 page
19 page
SOCIAL RESPONSIBILITY REPORT
2022 m.
2
2022 for ‘Vilniaus baldai’
1
Financial year of 2022 was a major stage in the operations of
‘Vilniaus baldai’. We flipped a new page in the company’s history:
we finished construction and relocation works, we have established
ourselves and now conduct our operations in newly-built factory.
Planning and implementation of this project consumed much
energy and effort of our team throughout these years. Relocation
of the factory to a modern location marks the beginning that
makes way for fostering and improving our vocational home.
This major stage in the operations of ‘Vilniaus baldai’ coincided
with the period of hardships inflicted upon Lithuania and the
whole world. Consequences of the pandemic, supply chain
disruptions, growing costs of energy and raw materials affected
every business sector, and thus the operations of our company.
We strive to maintain the sustainability of our operations and hang
together during these times of uncertainty and ever-changing
circumstances.
During this financial year ‘Vilniaus baldai’ maintained the stable
sales numbers, those reaching EUR 100.738 million. Despite
increasing influence of external factors, the final quarter of financial
year is also marked with stable number of sales, making up EUR
27.857 million. Working in circumstances of growing economic
uncertainty, ‘Vilniaus baldai’ gives its utmost effort not just to
address these external factors, but most importantly to keep its
long-term obligations for employees: to improve work conditions,
increase remuneration, improve employee experience, provide
area for occupational and personal growth, and to maintain a
positive environment.
SOCIAL RESPONSIBILITY REPORT
2022 m.
3
2
SOCIAL RESPONSIBILITY REPORT
2022 m.
4
MAIN ACTIVITY INDICATORS. TIMELINE
SOCIAL RESPONSIBILITY REPORT
2022 m.
5
New factory
3
In 2022 financial year, public company ‘Vilniaus baldai’ completed
the second stage of relocation to a new factory. At the end of
the financial year, the company was working at full capacity in
the new factory located in Trakai district, Guopstos village. The
company sold the old former manufacturing building located at
Savanoriai avenue in Vilnius, relocated the entire production lines
and employees, reviewed and updated its projects. The significant
relocation project was completed before due time.
The investment to a factory measuring at 73.000 sq. m. totalled
EUR 55 million. The factory was erected in a plot of 18 hectares, 5
km away from Vilnius. New factory allows for evident improvement
of work conditions, increase in production volume, higher perfor-
mance, and even higher quality standards.
The production is in full swing at the new factory. 700 people were
employed in the new factory in August 2022.
Employees arrive at work in a new factory by employee shuttle
service. There are in total 11 shuttle service routes, used by more
than a third of our workforce. Timetable of the shuttle buses is
adjusted to the employees’ shifts and to the public transport
timetables. The number of routes is constantly adjusted with
regards to the area where our employees reside. So the current
transportation system is convenient for employees from various
areas, therefore ‘Vilniaus baldai’ is an attractive and convenient
workplace for people residing outside the urban area.
The employees can access comfortable changing rooms and
modern resting areas. In the new factory you will find a canteen,
where our employees are partly reimbursed their lunch expenses.
Work conditions and prospects at the new factory
SOCIAL RESPONSIBILITY REPORT
2022 m.
6
Responsible use of resources
4
To use resources responsibly, ‘Vilniaus baldai’ keeps investing into
energy efficient equipment, implements saving technologies,
educates its staff.
More than half of the furniture items are manufactured with a
honeycomb panel technology, replacing wood for a structure
from recycled paper. It allows to reduce the consumption of wood
almost fivefold.
Only 100% FSC® (FSC-C104209) (Forest Stewardship Council®)
certified material from responsibly managed forests is used in
manufacturing. FSC® certificate of the manufacturing chain is a
proof of only certified raw materials being used in manufacturing.
Thus eliminating the risk of non-certified raw materials blending
in with the certified ones.
Perpetual search for new technology and investments into energy
efficient equipment (automated cold press) allow for increased
part productivity, thus consuming less electricity. Investments
into energy efficient machines allow for detailed records of energy
consumption and to plan their operations accordingly.
Manufacturing technology
Investing into equipment
When we expand our product range, our purchased materials
are as lightweight as possible, at the same time as capable to
withstand mechanical requirements. Moreover, we search for
the most efficient and safest packaging solutions that would
ensure the integrity and highest quality of the product on delivery.
Following these steps, we are able to work towards a common
goal with our primary client: to manufacture sustainable and high-
quality items, available to a wide public.
Since 2021 we have been partaking in the pilot project of our primary
client, in effort to implement the energy resource management
system based on best practice and on standard ISO 50001 that is
in effect in Europe. The goal of the project is to improve energy
efficiency. Its implementation is based on the plan-do-check-act
principle.
We have implemented a system allowing to identify and analyse
the energy consumption of particular manufacturing lines, work
shifts, and products. We have expanded employee training courses,
now offering energy saving course. Employees are encouraged to
save energy resources by using a variety of saving techniques. We
started carrying our regular internal check-ups of manufacturing
area, during which we record the improvements made in regards
of energy saving; we regularly calculate and monitor approved key
performance indicators.
SOCIAL RESPONSIBILITY REPORT
2022 m.
7
Management of energy resources
SOCIAL RESPONSIBILITY REPORT
2022 m.
8
Environmental safety and quality
5
Every furniture item manufactured at ‘Vilniaus baldai’ must meet
high quality standards, function well, possess a unique shape and
be manufactured in a sustainable environment – this is the aim
set by the primary client. Thus why we give our attention as much
attention to the quality of our furniture as to the environmentally
friendly solutions. It allows to ensure that the end-user receives
high-quality and environmentally spotless furniture.
The company sets yearly environmental goals: to use energy
resources and raw materials responsibly, sort and recycle waste,
keep improving the work environment.
Manufacturing facilities and administrative offices contain waste
sorting containers. We constantly cooperate with waste recycling
companies, search for more sustainable waste management
methods.
The company seeks to reduce its carbon footprint, so we plan to
discontinue the use of gas-powered forklifts and transition to the
use of lithium-ion battery powered electric forklifts before the
end of 2023. We plan to make all of our coolants environmentally
friendly before 2028. The company has been purchasing the
electricity only from renewable sources for many years.
We are contributing to the goal set by IKEA to use recyclable
materials made from renewable materials by 2030. Around 82
per cent of the accumulated waste is handed over to secondary
recycling, 18 per cent are handed over to be burned, thus producing
energy.
Quality and environmental management system as per the
requirements of ISO 9001, ISO 14001 standards have been put in
place. The aim of of the system is to manufacture high-quality
products meeting the client’s requirements, preserve the
environment, reduce resource use, recycle waste. We also adhere
to the environmental, social, and labour condition requirements
set by the primary client when purchasing products, raw materials,
services, and in our operations.
An FSC® (FSC-C104209) Chain of Custody system that we have
put in place is a product traceability system from a forest or (in
case of secondary raw material) from a recycling moment to a
place where it is sold under a FSC® mark and/or its production
finished and it is labelled with the mark. The annual FSC® audit
was carried out in February 2022. No non-conformities or notices
were determined or given.
LEAN system that is implemented and sustained in the company
allows to grow as a company and improve internal processes.
Kaizen is one founding part of LEAN. Continuous improvement is
done by adhering to KAIZEN, contributed by specially picked teams
and other employees of the company. Over 30 improvements
are made to work processes per year, thus keeping the flow of
improvements in effectiveness, production quality, and resource
saving constant.
Quality assurance
Environmentally friendly solutions
SOCIAL RESPONSIBILITY REPORT
2022 m.
9
Sources of CO2 emissions
in the company
Waste management in the
company
SOCIAL RESPONSIBILITY REPORT
2022 m.
10
Heat production from renewable
energy sources
6
Public company ‘Vilniaus baldai’, having become an independent
heat producer in 2018, produces thermal energy from renewable
sources and supplies it to district heating networks of Vilnius.
UNICONFORT 4,5 MW biomass boiler with an economiser and
effective fume cleaning system is installed in the boiler room of the
company. By-product of manufacture - sawdust - is the primary
fuel. ‘Vilniaus baldai’ has invested over EUR 1.5 million in total to
this production and supply project of thermal energy.
Quantity of heat sold, in MWh:
‘Vilniaus baldai’ focus on and provide funding for constant
improvement of working conditions, employee training, and
professional development. Average gross remuneration in the
company in the 3rd quarter of the year had been 20 per cent
higher comparing to 1st quarter of the same year 2022. To ensure
the growth of employee income, during the time or relocation and
later on the variable remuneration was fixed. During the time of
relocation and settling in at the new factory, manufacture rates
were not stable. Due to fixed variable remuneration, the mentioned
circumstances did not adversely affect the income of employees
working in manufacture.
We successfully handled continuing challenges posed by the
pandemic: we made sure certain employees could work remotely,
while those staying at the factory would stay safe; we took care
of proper disinfection practice in the facilities, followed every
recommendation in regards of COVID-19, and performed testing
of our employees upon need.
More favourable conditions for internal career mobility were
established. The employees were able to partake intraining
programmes ‘Operator academy’ and ‘Electrician academy’. 31
employee enrolled in the latter programmes in the reporting
year. So the members of our staff could improve various skills as
much as be recruited for new titles, change their occupation or
qualification. These academies provide a plethora of benefits, thus
their activity is continuous and the training never stops.
Development of front-runner of manufacture staff is an important
area of the operations. For this reason, new title has been established
within the structure of ‘Vilniaus baldai’. Training and team
formation manager makes a significant input in the development
of staff members. This person teaches first level managers of
the manufacture staff leadership and management skills, and
this contributes to general improvement of effectiveness of the
operations and keeping up of favourable working conditions. By
contributing to this development, Personnel office also organises
training for manufacture staff leaders and shift managers in the
area of attracting candidates, selection, employee experience, and
others.
To enhance employee experience and engagement, manufacture
staff leaders began conducting job interviews. Much attention is
given to joining members. they receive a special new member
package includes the relevant information alongside little gifts.
To improve success of integration process of new members, we
established the new position of instructor. They are responsible for
the introduction of manufacture processes to new members; they
teach the operators in the respective academy.
SOCIAL RESPONSIBILITY REPORT
2022 m.
11
Management
Average remuneration
(EUR)
Professionals
Workers
Workers
2020 m.
5765
6480
5592
2534
2399
2647
1690
1782
1893
1800
1881
2001
2021 m. 2022 m.
Employees
7
SOCIAL RESPONSIBILITY REPORT
2022 m.
12
Number of employees in
‘Vilnius baldai’ group
The average age of the
workforce
SOCIAL RESPONSIBILITY REPORT
2022 m.
13
Administrative office Product manufacturing
Work environment
8
We strictly observe the requirements of legal acts and examples of
good practice in our practice of work processes and while selecting
candidates for vacancies. This way we create a comfortable and
safe environment that stimulates learning. Staff members from
Lithuania and the people from other countries work together in
‘Vilniaus baldai’ and promote the sense of community.
We ensure equal opportunity for current and potential employees
throughout all processes: vacancy announcements, selection,
recruitment, development, building working environment, and
every other process within the company.
Discrimination in the company is strictly prohibited irrespective of
its type: race, religious, gender identity, ethnicity, marital or family
status, age, political relationship, physical ability, sexual orientation,
nationality, or any aspect of aperson’s identity.
We ensure every human right, respect, and protection of honour
and dignity for our employees. They may participate in public and
political affairs, express their opinion if they do clearly establish
that their public comments are to be understood and considered
as their personal opinion rather than stance of the company. We
respect the employees’ right to choose to become the members
of a trade union.
We do not put up with harassment in the company in any shape
or form.
The work in the company requires clear thinking and fast
responsiveness. This state of mind may influence the quality
of work, while the safety of other staff may depend on it. The
consumption of alcoholic beverages, narcotics, and other
psychoactive substances or the presence in the facilities while
under their effect is strictly forbidden.
We do not use child labour. Only people who do meet the age
requirements set out in the national legislation in force are
recruited. Forced labour is prohibited in the company in any shape
or form.
We ensure safe working conditions and keep improving them: an
electronic incident recording module had been installed in the
company. Anyone can register locations where they detect a risk
of injury or any other accident. The module also indicates when
the risk should be cleared and who is the person responsible.
Moreover, we insure all our employees against accidents at work,
provide personal protective equipment, special clothing and
footwear. To improve our employee health, we also take care of
medicine, vaccination, carry out health check-ups.
We provide the employees with the essential information on
occupational health and safety, which also include: fire safety,
proper handling of chemical substances and devices, emergency
preparedness and response, provision of first aid, and others. We
organise internal training, we delegate professionals to external
training – this way we constantly help our staff to grow, raise their
awareness, so that each and every one of them could protect
themselves and other staff members, and would know how to
respond in case of danger.
Ensuring equal opportunity
Respect for human rights
Working environment without harassment
Abuse of alcohol is prohibited
Protection of interests of children
Occupational health and safety
SOCIAL RESPONSIBILITY REPORT
2022 m.
14
Value system based on employee
insights
9
Fundamental values of ‘Vilniaus baldai’: responsibility, staff, and
professionalism. The staff has arrived at these values together and
base their everyday activity, communication, and cooperation.
We have regularly published ‘Vilniaus baldai’ magazine for
our employees, information booklets wherein we shared the
company and market news, important and practical information,
and educational content. In light of the changes within the
company, we were publishing a special leaflet containing all the
information concerning the relocation of manufacture processes.
By publishing this leaflet, we sought to provide useful information,
address the outstanding issues, ensure the employee awareness
of the relocation process and progress. Moreover, the employees
may always make use of suggestion boxes where they may submit
their suggestions, share ideas, express their observations, and ask
questions. To enhance the culture of dialogue, the employees are
surveyed on a regular basis for the sudden and important issues,
topics of continuous issues and needs of employees are addressed.
To improve the awareness, engagement, and satisfaction of the
employees, we have dedicated a member from personnel office
for each employee, who will consult that employee with staff and
other heated issues. Personnel office members working during
different shift communicate with employees, gather their opinions
and the problems observed, thus the employees may receive their
response and necessary information faster. ‘Vilniaus baldai’ is also
active on social media and post there frequently: on their accounts
they spread the information that helps to better inform current
and potential employees. The company makes an assessment of
its operations, their effectiveness during every financial year, and
based on the results, some activities are resumed and some news
ones are introduced.
If I see a problem, I help to solve it.
I have enough courage to make decision on time.
I work as if I worked for myself and I aim to make it
well at my first attempt.
I stick to what is agreed.
I turn goals into the results.
I make examples of good behavior public an celebrate
them.
I constantly learn and improve myself.
I am interested in good practises of other companies
and strive to apply it in my work.
I share my knowledge and experience with my
colleagues.
I make decisions based on arguments and analysis
of available information rather than emotions.
I ensure compliance with the requirements
applicable in the company when I do any task.
I check the result once again after I complete the
task.
I listen and hear, I am open to listen to other opinion
with respect.
I am engaged and I show initiative.
I am looking for solutions rather than the guilty ones.
I am ready to be the leader when it is needed.
I share the information with my colleagues.
I give my feedback in a proper manner and proper
time.
I use positive statements instead of negative ones.
SOCIAL RESPONSIBILITY REPORT
2022 m.
15
Our Values
Honest and transprarent business
practice
10
The code of ethics is to be adhered to in ‘Vilniaus baldai’. The
code is based on the values fostered in the company, those
being trust, honour, honesty. The code defines the adherence to
certain principles of behaviour: how should we work, establish
and build relations with colleagues, clients, business partners, and
other members of society. All staff members shall adhere to the
provisions set out therein.
The employees are prohibited to accept gifts of money or their
equivalents (e.g., vouchers that could be exchanged for money),
checks, monetary transactions, investment securities, securities
admitted to trading on a market, loans, shares, offer or accept gifts,
benefit from establishing conditions made to affect a business
deal, gain a business or personal advantage.
We take care that business partners, service providers, suppliers of
goods or raw materials, the companies operating in the territory
would also adhere to the provisions laid down in the Code of
ethics, The provisions comprise the equal opportunity at work,
respect for human rights, respect for occupational health and
safety, prevention of harassment, child or forced labour, use of
narcotics, alcoholic beverages, non-prescribed medicine, or other
psychoactive substances. We also care that the employees would
be made aware and would agree with out outlook towards the
prevention of bribery and corruption.
SOCIAL RESPONSIBILITY REPORT
2022 m.
16
Corruption and bribery prevention
Suppliers, subcontractors of the company and
their business environment
A social company
11
A subsidiary of ‘Vilniaus baldai’ – ‘Ari-Lux’ – recruits people who have
become incapacitated, economically inactive, who thus cannot
participate in the labour market on equal footing. This way we aid
the return of these people to a labour market, we help them develop
the required skills, promote their integration, and try to make our
contribution towards reducing social exclusion.
We have unofficially designated our subsidiary ‘Ari-Lux’ as a non-
profit company. We try to our best effort to respond to the needs of
the people employed there by adjusting the workplace and working
conditions to their capabilities.
72 employees were employees at ‘Ari-Lux’ during financial year of
2022.
SOCIAL RESPONSIBILITY REPORT
2022 m.
17
Sales
Heat sold to the city of Vil
-
nius
Annual growth of employees
Percentage of waste ending
up in landfills
Production
“Ari-lux” employees
Percentage of waste that is
recycled
Workers
Number of furniture items
manufactured
Administrative offices. Men/
women
Managerial staff
Average age of the staff
Percentage of waste that is
burned
Average remuneration
Number of employees
Product manufacturing.
Men/women
Professionals
Average monthly remuneration (EUR)
Use if FSC certified wood raw
materials
Average gross remuneration
in the company was higher
than Lithuanian average on
2nd quarter of the year.
FY2020
FY2020
EUR 73 mln.
21.838 MWh
~100%
7%
~0%
EUR 71 mln.
64
64%
1690
2,3 mln.
51:49%
5765
41
36%
EUR 1 800
780
67:33%
2534
29%
EUR 99 mln.
22.259 MWh
~100%
18%
~0%
EUR 101 mln.
76
59%
1 782
3,25 mln.
53:47%
6 480
41
41%
EUR 1 881
923
63:37%
2 399
16%
EUR 101 mln.
17.839 MWh
~100%
−24%
~0%
EUR 96 mln.
72
82%
1893
3,54 mln.
56:44%
5592
41
18%
EUR 2001
700
60:40%
2647
12%
FY2021
FY2021
FY2022
FY2022
Gender representation
Social responsibility report information
12
SOCIAL RESPONSIBILITY REPORT
2022 m.
18
SOCIAL RESPONSIBILITY REPORT
2022 m.
19
8
8
SDG Index
13