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1
VILNIAUS BALDAI AB
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENTS
FOR THE FY 2023 ENDED 31 AUGUST 2023,
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
CONSOLIDATED ANNUAL REPORT ................................................................................................................................ 11
OBJECTIVE REVIEW OF THE COMPANIES GROUP’S POSITION, ACTIVITY AND DEVELOPMENT ...................................... 11
COMPANY MANAGEMENT REPORT ................................................................................................................................ 22
COMPANY REMUNERATION POLICY................................................................................................................................ 30
CONSOLIDATED SOCIAL RESPONSIBILITY REPORT ........................................................................................................... 32
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 FY2023 ........................................................ 33
CONSOLIDATED AND COMPANY‘S FINANCIAL STATEMENTS ........................................................................................ 49
CONSOLIDATED AND COMPANY‘S STATEMENT OF FINANCIAL POSITION ..................................................................... 49
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE
INCOME ........................................................................................................................................................................... 51
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENT OF CHANGES IN EQUITY .................................................... 52
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENT OF CASH FLOWS ................................................................ 54
NOTES TO THE FINANCIAL STATEMENTS ........................................................................................................................ 56
GRANT THORNTON BALTIC UAB
Reg. Code 300056169 | VAT Code LT100001220914 | Register of Legal Entities of the Republic of Lithuania
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
Kaunas | Jonavos street 60C | 44192 Kaunas | Lithuania | T +370 37 422 500 | E kaunas@lt.gt.com
Klaipėda | Taikos ave. 52c | 91184 Klaipėda | Lithuania | T +370 46 411 248 | E klaipeda@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, 2023, 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, 2023, 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.
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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.
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
Revenue recognition (Consolidated and separate financial statements)
See Note 2.17 financial disclosure "Revenue recognition" and 16 “Sales income”.
During 2023, the Company and the Group’s net sales were reported at, respectively, EUR
97868 thousand and EUR 97868 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;
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• 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 2023 consolidated annual report,
including Corporate Governance statement, and Consolidated Social Responsibility Report
and Corporate 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 consolidated
annual report, including Corporate Governance statement and Corporate Remuneration
Report, for the financial year 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 consolidated annual report, including Corporate Governance
statement and Corporate Remuneration Report, for the financial year for which the
financial statements are prepared is consistent with the separate and consolidated
financial statements; and
• The consolidates annual report, including Corporate Governance statement and
Corporate 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 Group’s Social Responsibility Report has been provided. If
we identify that Group’s Social Responsibility Report has not been provided, we are required
to report that fact. We have nothing to report in this regard.
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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 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.
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• 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 consolidated financial statements in accordance with the decision made by
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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 2023 (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.
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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.
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.
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Conclusion
In our opinion, the Single Electronic Reporting Format of the consolidated and company
financial statements for the year ended 31 August 2023 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.
November 24, 2023
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
11
CONSOLIDATED ANNUAL REPORT
24 November 2023
OBJECTIVE REVIEW OF THE COMPANIES GROUP’S POSITION, ACTIVITY AND
DEVELOPMENT
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
Pramones str. 23, Guopstu k., LT-21148 Traku r.
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
Pramones str. 23, Guopstu k., LT-21148 Traku r.
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
12
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 the 2023 financial year, Vilniaus baldai AB, commemorating the 140th anniversary of its activity, successfully continued
its activities in the new factory. This was the first full financial year in which production was concentrated and carried out in
one place. The year could be divided into two parts: in the first, we were still looking for how to use the opportunities provided
by the new factory in the most efficient way, and in the second, together with the stabilization of sales, we already started to
consistently improve the profitability indicators. This is best illustrated by the EBITDA indicator: during the first half of the
year EBITDA was 1,025 thousand EUR, while in the second half it was 7,697 thousand EUR. We managed to successfully
consolidate the processes in the new factory, made necessary decisions and paid extra attention to cost management and
all this, together with the new factory and state-of-the-art solutions of automation and robotization, enabled us to finish the
financial year on a very positive note. Furthermore, we have a solid basis to believe that we are able to continue this positive
trend in the new financial year that has already begun.
It is important to mention that although the sales revenue of Vilniaus baldai AB in 2023 amounted to 98 million EUR and
compared to 2022 decreased by 3 percent, but in terms of profitability, the Company made a huge breakthrough. If we
eliminate a one-time profit of 9.6 million EUR, due to the sale of long-term assets, from the results of the 2022 financial year,
we would see that the EBITDA from operational activity increased by 9.8 million. EUR.
The Company focused on quality improvement, processes optimization, automation and equipment utilization improvement
with the help of LEAN methodology. Extra emphasis was placed on empowering every employee to contribute to process
improvement so that everyone can be involved in changing the status quo.
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 99,6% of total sales of
Vilniaus baldai AB during 2023 (in 2022 – 99,5%). Furniture accounted for 99,6% of the Company’s sales during 2023 (in
2022 – 99,5%), 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 and at the same time
has an impact on the Company’s costs and profitability. However, the current military conflicts taking place in the world do
not have a significant impact on the Company’s activities. 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. In order to be an attractive employer in the
search for new talents, the Company actively cooperates with various educational institutions and training centers, organizes
excursions for schoolchildren, supports various initiatives in the region, and also carries out a joint project with the Ministry
of National Defense of the Republic of Lithuania, which aims to help soldiers return to the labor market. Trade Union,
representing interests of the employees, operates actively in the Company.
Supply. As the economic situation was changing during the 2023 financial year, the supply and availability of raw materials
has become much easier, since the producers of raw materials are only partially utilizing their available production capacities.
A similar trend should continue in the 2024 financial year as well. However, there remains the risk of an increase in the scale
of ongoing military conflicts and the related negative effect on markets and the supply of raw materials. From a long-term
and strategic point of view, 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.
13
Technical and technological risk factors. The company pays a lot of attention to employee training and development.
Employees are regularly sent to the Visaginas Technology and Business Vocational Training Center for qualification
upgrading. A number of employees were interned abroad where they went and received training at Biesse equipment
manufacturer in Italy. This type of training not only increases the competence of employees, but also increases the level of
motivation and engagement.
The Alldevice program is used for the planning of periodic and preventive works, with the help of which work for technicians
and operators is planned for the regularly performed preventive maintenance of the equipment.
According to the IKEA IPS methodology, equipment maintenance is continuously and systematically improved, with the aim
of reducing the number of failures and increasing the availability of equipment by involving both technicians and line operators
in this process. Line failure analytics allows us to predict weak points in lines and proactively manage the risk of failure.
The physical and moral condition of the main assets is good and does not pose a risk to the Company's operations.
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 protect environment, to
decrease pollution and usage of resources and to sort waste. On 26 September 2023 ISO systems audit was performed.
During the audit, no non-conformities were found or notices given. 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 on the 22
nd
of February 2023. During the audit, 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.
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.
14
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.
15
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 2019–2023:
2023 m.
2022 m.
2021 m.
2020 m.
2019 m.
Net profitability = net profit / sales * 100
1.62%
1.45%
0.17%
6.86%
5.41%
Average return on assets ROA = net profit /
(assets at the beginning of the period + assets
at the end of the period) / 2 *100
0.48%
0.43%
0.05%
1.78%
2.15%
Return on equity ROE = net profit / equity*100
5.65%
5.52%
0.69%
20.37%
20.66%
Net earnings per share EPS = net profit /
number of shares
0.41
0.38
0.04
1.29
1.05
Debt ratio = liabilities / assets
0.65
0.7
0.7
0.7
0.66
Debt to equity coefficient = liabilities / equity
1.90
2.20
2.47
2.37
1.94
Current ratio = current assets / current
liabilities
0.95
0.78
0.64
0.85
0.69
Asset’s turnover = sales / assets
1.20
1.19
1.15
0.88
1.3
Book value of share = equity / number of
shares
7.24
6.82
6.43
6.35
5.07
Turnover (million EUR)
97.87
100.74
99.36
73.32
75.20
Gross profit (million EUR)
7.75
-0.18
7.35
9.46
6.75
Net profit (million EUR)
1.59
1.46
0.17
5.03
4.07
EBITDA (million EUR)
8.77
8.51
5.52
7.25
5.64
EBIT (mln. eurų)
4.38
4.00
1.48
4.27
3.93
Dividends per share (for the prior accounting
period), (EUR)
0
0
0
0
0.08
Earnings per share P/E
15.90
21.53
239.79
6.57
6.83
The lowest share price (EUR)
6.15
7.00
8.05
5.70
7.00
The highest share price (EUR)
8.40
10.08
11,20
11,6
10,7
Closing price (EUR)
6.50
8.1
10.60
8.5
7.15
Capitalisation (million EUR)
25.26
31.48
41.19
33.03
27.79
16
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.
The volumes of Company’s production in terms of value in the period of 2019–2023:
Production
2023
2022
2021
2020
2019
thousand
EUR
thousand
EUR
thousand
EUR
thousand
EUR
thousand
EUR
Furniture
97,169
96,447
100,581
71,207
76,849
Other production
-
-
-
-
-
Total
97,169
96,447
100,581
71,207
76,849
Production per employee, working on employment contract basis, 2019–2023 (thousand EUR / year):
In the 2023 financial year, production volume remained at a similar level to the previous financial year, but production per
person increased by as much as 41.7%. After the successful implementation of the expansion project and the move to the
new factory, the maximum production volume increased at least 2 times to 250 million. EUR per year.
Production sales according to the markets in the period of 2019–2023:
Sales
2023
2022
2021
2020
2019
Thousand
EUR
%
Thousand
EUR
%
Thousan
d EUR
%
Thousand
EUR
%
Thousand
EUR
%
Lithuania
683
0.70
798
0.79
477
0.48
338
0.46
311
0.41
Overseas
97,185
99.30
99,940
99.21
98,887
99.52
72,986
99.54
74,893
99.59
Total
97,868
100
100,738
100
99,364
100
73,324
100
75,204
100
114,4
103,8
123,7
124,0
175,7
2019 2020 2021 2022 2023
17
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 2019–2023, in EUR thousand:
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.
311
338
477
798
683
74 893
72 986
98 887
99 940
97 185
0
20 000
40 000
60 000
80 000
100 000
120 000
2019 2020 2021 2022 2023
Lithuania
Overseas
18
ENERGY
Vilniaus baldai AB during 2023 the Company consumed 14,158 thousand kWh of electricity (2022 – 23,141 thousand kWh,),
the electricity consumption for production of EUR 1 amounted to 0,146 kWh (2022 – 0,240 kWh).
23 254
21 683
28 617
23 141
14 158
2019 2020 2021 2022 2023
Consumption of electricity,
thousand kWh per year
0,303
0,305
0,285
0,240
0,146
2019 2020 2021 2022 2023
Consumption of electricity, kWh,
per 1 EUR of output
19
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.
There were 522 employees working in the Group and 459 employees at the Company as of the end of FY2023
(700 at the Group and 628 at the Company as of the end FY2022). The average age of the employees is 42 years.
The average number of the Company’s recorded employees, working on an employment contract basis, in the period of
2019–2023:
2023
2022
2021
2020
2019
Executive personnel
8
8
9
7
6
Specialists
52
63
56
50
47
Workers
493
707
748
629
619
Total
553
778
813
686
672
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 2019–2023, EUR:
2023
2022
2021
2020
2019
Executive personnel
6,209
5,592
6,480
5,765
6,573
Specialists
2,983
2,647
2,399
2,534
2,146
Workers
2,135
1,893
1,782
1,690
1,550
Total
2,279
2,001
1,881
1,800
1,643
* - 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:
20
The collective agreement is concluded in the Company. The collective agreement was renewed on 8 August 2023. 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.
6. IMPORTANT EVENTS, WHICH HAVE OCCURED AFTER FINANCIAL YEAR END
There were no significant events after the end of the reporting period.
86
27
90
44
187
5
28
Higher (University) Higher (College or other non-university)
Profession / Specialty Basic school
Secondary In education
21
7. OPERATING PLANS AND FORECASTS OF THE GROUP’S ACTIVITY
In 2018, Vilniaus baldai AB and IKEA AG signed a long-term contract, which provides for the minimum production and sales
volume required for business continuity. The contract is valid until the end of the 2025 financial year. In order to fulfill the
obligations stipulated in the contract and to prepare for sustainable further growth, the Company completed the project of
the new factory located in the village of Guopstos in the Trakai district in the 2022 financial year.
During the 2023 financial year, the new factory made it possible to significantly increase production efficiency, reduce
electricity consumption and, accordingly, improve all the company's financial indicators.
The company has successfully adapted to supply chain disruptions caused by the COVID-19 pandemic, as well as
fluctuations in raw material and energy prices caused by the war in Ukraine, as well as rising interest rates and changes in
consumer behavior. This is confirmed by the company's stable sales, increased profitability, reduced financial obligations
and increased capital.
Carrying out activities in a single location – the new factory – has allowed to fully concentrate on improving the production
flow, increasing efficiency, saving, increasing the efficiency of electricity use, ensuring quality and improving its indicators.
In the last financial year, the new production base made it possible to significantly increase production efficiency and use of
resources, while at the same time saving duplicative costs, which made it possible to amortize unfavorable market trends.
In the coming year, we will continue the projects of increasing efficiency, improving quality and saving energy in order to
increase the company's flexibility and competitiveness.
Last year, the company also successfully implemented new automated pressing, packaging and internal logistics
technologies, which will have a positive impact on the result in this financial year.
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.
22
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
(Seimyniskiu 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.
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
23
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;
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 2023 is 1,389.
The shareholders who had upon the property rights or possessed more than 5% of the issuer’s authorised capital as of
31 August 2023:
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
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.
1 344
6
35
4
Distribution of the shareholders of
Vilniaus Baldai AB by countries,
31/08/2022
Lithuania Latvia Estonia Germany
87,67
12,33
Authorised capital structure, %
Invalda privatus kapitalas AB Other shareholders
24
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
Prekyba Bendrovės akcijomis:
2023
2022
2021
2020
2019
Price of the shares, EUR:
- opening
8.10
10.60
8.50
7.15
10.90
- highest
8.40
10.80
11.20
11.60
10.70
- lowest
6.15
7.00
8.05
5.70
7.00
- closing
6.50
8.10
10.60
8.50
7.15
Turnover of shares, units
14,553
22,441
30,623
40,167
91,269
Turnover of shares, EUR
100,226
202,900
308,827
309,662
613,459
Total number of transactions, units
645
821
1.138
708
251
Capitalization, million EUR
25.26
31.48
41.19
33.03
27.79
Shares turnover and price of Vilniaus baldai AB in the period of 01/09/2019–31/08/2023:
25
Comparison of the price of shares of Vilniaus baldai AB with the OMXBB and OMXV index in the period of 01/09/2019–
31/08/2023:
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.
26
Vilniaus baldai AB dividend payments during the past 5 years:
Dividendai
2023
(for 2022)
2022
(for 2021)
2021
(for 2020
2020
(for 2019)
2019
(for 2018)
Dividend (Eur)
0
0
0
0
310,901
Dividend per share (Eur)
0
0
0
0
0.08
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:
Vytautas Bucas
Position
Chairman of the Board, elected to the Board on 12/04/2007, re-elected on 27/04/2012, 05/07/2016
and 08/10/2020, 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 NekilnAojamojo 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
Number of shares and of voting rights
Chairman of the Board of Invalda Privatus Kapitalas
AB
39.63%
Chairman of the Board of Bordena UAB
0.00%
Board Member of Švytėjimas UAB
0.00%
27
Dalius Kaziunas
Position
Board member, elected to the Board on 29/04/2010, re-elected on 27/04/2012, 05/07/2016 and
08/10/2020, 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
Number of shares and of voting
rights
CEO and Board Member of Invalda Privatus Kapitalas
AB
1.70%
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%
Andrius Anusauskas
Position
Chairman of the Board, elected to the Board on 08/10/2020, end of the term – 2024.
Work experience
Since May 2022 General manager at Inreal valdymas UAB
2018 – 2022 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 Inreal UAB
0.00 %
Director at Deltuvis UAB
0.00 %
Director at POMUS UAB
100.00%
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
Number of shares and of voting rights
Board member of Autoverslas UAB
0.00%
Chairman of the Board of Autoverslo terminalas UAB
0.00%
28
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 Development. In 2022 the average monthly remuneration to the management of the Company amounted to EUR
50 thousand (2022 – EUR 46 thousand). The remuneration is not paid to the Board members of the Company.
Remuneration to the management members of the Company (in thousand EUR) during the past 5 years:
2023
2022
2021
2020*
2019**
Wages, salaries
586
539
732
604
391
Social security
contributions
12
10
12
11
38
Total
598
549
744
615
429
* - 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 2023 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 2023 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 2023 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 2023
were: ARI-LUX UAB (the subsidiary) – reg.no 120989619, address Pramones str. 23, Guopstu k., LT-21148 Traku r., 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, 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 2022:
ARI-LUX UAB (the subsidiary), Invalda Privatus Kapitalas AB (shareholder) and all companies controlled by Invalda Privatus
Kapitalas, including already liquidated Krevina UAB).
Transactions with the Group’s related parties in 2023 and 2022 and the balances in 2023 and 2022 are provided in the notes
(Note 25) to the consolidated and Company’s financial statements for the year 2023.
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.
29
11. DATA ON THE PUBLICLY DISCLOSED INFORMATION
The information publicly disclosed by Vilniaus baldai AB during 2023 is presented in the Company’s website
www.vilniausbaldai.lt.
Summary of publicly disclosed information during from 1 September 2022:
Date of disclosure
Brief description of disclosed information
27-10-2023
VILNIAUS BALDAI AB interim condensed consolidated financial statement for the twelve
months of FY2023 ended August 31
30-06-2023
VILNIAUS BALDAI AB result for activity and unaudited interim condensed consolidated
financial statements for the nine months of FY 2023
31-03-2023
VILNIAUS BALDAI AB result for activity and unaudited interim condensed consolidated
financial statements for the six months of FY 2023
30-12-2022
Resolutions of the Annual General Shareholders Meeting of VILNIAUS BALDAI AB on
30/12/2022
23-12-2022
VILNIAUS BALDAI AB result for activity and non audited condensed interim consolidated
financial statement for the three months of FY 2023
09-12-2022
UPDATE: Convocation of the general shareholders meeting of VILNIAUS BALDAI AB and
draft resolutions
08-12-2022
Convocation of the general shareholders meeting of VILNIAUS BALDAI AB and draft
resolutions
05-12-2022
VILNIAUS BALDAI AB investor's calendar for 2023FY
02-12-2022
VILNIAUS BALDAI AB annual audited information for the year 2022
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
30
COMPANY REMUNERATION POLICY
Vilniaus baldai AB (hereinafter – the Company) prepared the Company Remuneration Report (hereinager – the Report) for
the 2023 financial year, which started on 1 September 2022 and ended on 31 August 2023. 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 FY2023
The remuneration policy is in line with the Company's strategy, long-term goals and interests, and has the following aims:
1. to ensure competitive remuneration of the key management personnel, corresponding to the financial results of the
Company;
2. increase the transparency of the Company and the accountability of key management personnel and enable
shareholders, potential investors and interested parties to get a complete and reliable picture of the remuneration
awarded to each member of key management personnel;
3. avoid conflicts of interest and discrimination on any basis while determining the remuneration of key management
personnel and members of the Board
The Company does not form any Remuneration or other relevant committees. The function of these committees is performed
by the Board of the Company.
There were no deviations from the remuneration policy during the 2023 financial year.
31
Key financial indicators of the Group during the period of FY2019 to FY2023:
2023
2022
2021
2020
2019
Net profitability = net profit /
turnover * 100
1.62%
1.45%
0.17%
6.86%
5.41%
EBITDA margin = EBITDA /
turnover * 100
8.96%
8.44%
5.55%
9.89%
7.50%
Turnover (million EUR)
97.87
100.74
99.36
73.32
75.20
Net profit (million EUR)
1.59
1.46
0.17
5.03
4.07
EBITDA (million EUR)
8.77
8.51
5.52
7.25
5.64
EBIT (million EUR)
4.38
4.00
1.48
4.27
3.93
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 FY2019 to FY2023, EUR:
2023
2022
2021
2020
2019
Executive personnel
6,209
5,592
6,480
5,765
6,573
Specialists
2,983
2,647
2,399
2,534
2,146
Workers
2,135
1,893
1,782
1,690
1,550
Total
2,279
2,001
1,881
1,800
1,643
* - 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 FY2023
In FY2023 the remuneration was not paid to the Board members of the Company.
In FY2023 a fixed portion of remuneration of 99 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 FY2023:
Fixed remuneration,
EUR
Variable
renumeration, EUR
Other benefits,
EUR
Jonas Krutinis
98,843
0
17,248
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.
32
CONSOLIDATED 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
33
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 FY2023
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
APPL
ICAB
LE
COMMENTARY
1. 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.
1.4. Exclusive transactions that are particularly important
to the company, such as transfer of all or almost all
assets of the company which in principle would
mean the transfer of the company, should be subject
to approval of the general meeting of shareholders.
Yes
The last such significant transaction was the
sale of the premises of the old factory, which
was approved in the general shareholders
meeting.
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.
34
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
applic
able
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.
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.
1
For the purposes of this Code, heads of the administration are the employees of the company who hold top level
management positions.
35
2. 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
applic
able
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
applic
able
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
applic
able
Members of the Supervisory Board
are not appointed by the Company.
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. Independent2 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
applic
able
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
applic
able
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
applic
able
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.
36
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.
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.
3. Principle 3: Management Board
37
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.
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
38
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.
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
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.
39
is not formed at the company, the general meeting
of shareholders should be notified thereof.
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 independent4, it
should be announced which members of the
management board are deemed as independent.
The management board may decide that, despite
the fact that a particular member meets all the
criteria of independence established by the Law,
he/she cannot be considered independent due to
special personal or company-related
circumstances.
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. 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
Not
applic
able
Members of the Supervisory Board are not
appointed by the Company.
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.
40
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.
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
applic
able
Members of the Supervisory Board are not
appointed by the Company.
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
applic
able
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
applic
able
Members of the Supervisory Board are not
appointed by the Company.
5. 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.
41
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.
5.1.3. 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
No
The Committees of Nomination and
Remuneration are not established because of
the structural simplicity of the Company’s
management.
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).
42
on a regular basis. The authority of each
committee defining its role and specifying
its rights and duties should be made public
at least once a year (as part of the
information disclosed by the company on its
governance structure and practice on an
annual basis). In compliance with the legal
acts regulating the processing of personal
data, companies should also include in their
annual reports the statements of the
existing committees on their composition,
the number of meetings and attendance
over the year as well as the main directions
of their activities and performance.
5.1.6. With a view to ensure the independence
and impartiality of the committees, the
members of the collegial body who are not
members of the committees should
normally have a right to participate in the
meetings of the committee only if invited by
the committee. A committee may invite or
request that certain employees of the
company or experts would participate in the
meeting. Chair of each committee should
have the possibility to maintain direct
communication with the shareholders.
Cases where such practice is to be applied
should be specified in the rules regulating
the activities of the committee.
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.
43
5.3. Remuneration committee
The main functions of the remuneration committee should
be as follows:
a) 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;
b) 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;
c) 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.
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.
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.
44
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. 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.
5.4.5. 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.
6. 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.
7. 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
www.vilniausbaldai.lt
45
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.
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
applic
able
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.
46
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.
8. 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.
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.
9. 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;
47
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
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
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.
48
remuneration or other income of members of the
company’s supervisory and management bodies
and the manager of the company should be
disclosed, as provided for in greater detail in
Principle 7.
9.4. Information should be disclosed in such manner
that no shareholders or investors are
discriminated in terms of the method of receipt
and scope of information. Information should be
disclosed to all parties concerned at the same
time.
Yes
The 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.
10. Principle 10: Selection of the company’s audit firm
The company’s audit firm selection mechanism should ensure the independence of the report and opinion of the
audit firm.
10.1. With a view to obtain an objective opinion on the
company’s financial condition and financial results, the
company’s annual financial statements and the financial
information provided in its annual report should be
audited by an independent audit firm.
Yes
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.
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.
49
CONSOLIDATED AND COMPANY‘S FINANCIAL STATEMENTS
CONSOLIDATED AND COMPANY‘S STATEMENT OF FINANCIAL POSITION
Group
Company
Not
As of 31
As of 31
As of 31
As of 31
es
August
August
August
August
2023
2022
2023
2022
ASSETS
Non-current assets
Intangible assets
4
109
194
109
194
Property, plant and equipment
5
Land and buildings
29,865
30,424
29,865
30,424
Machinery and equipment
27,100
28,749
27,100
28,749
Other property, plant and equipment
4,287
4,596
4,281
4,589
Total property, plant and equipment
61,252
63,769
61,246
63,762
Investments in subsidiaries
6
-
-
5
5
Other non-current receivables
8
-
1,521
-
1,521
Deferred income tax asset
21
877
1,066
877
1,066
Long term rent (adaptation of IFRS 16)
12.1
990
847
990
846
Total non-current assets
63,228
67,397
63,227
67,394
Current assets
Inventories
7
6,351
11,598
6,351
11,598
Trade receivables
8
7,264
3,144
7,264
3,144
Prepayments
17
59
16
59
Current income tax prepayment
4
7
-
-
Other receivables and current assets
9
1,106
1,574
1,063
1,545
Cash and cash equivalents
10
3,481
1,048
3,480
1,003
Total current assets
18,223
17,430
18,174
17,349
Total assets
81,451
84,827
81,401
84,743
(Cont’d on the next page)
50
Consolidated and company’s financial statements of financial position (cont’d)
Group
Company
As of 31
As of 31
As of 31
As of 31
Notes
August
August
August
August
2023
2022
2023
2022
EQUITY AND LIABILITIES
Equity
Share capital
1
4,508
4,508
4,508
4,508
Legal reserve
11
451
451
451
451
Retained earnings
23,163
21,553
23,024
21,487
Total equity
28,122
26,512
27,983
26,446
Liabilities
Non-current liabilities
Non-current borrowings
12
33,458
35,256
33,458
35,256
Provisions for employee benefits
13
605
583
571
550
Long term rent (adaptation of IFRS 16)
12.1
618
587
618
588
Total non-current liabilities
34,681
36,426
34,647
36,394
Current liabilities
Current portion of non-current borrowings
12
6,275
5,173
6,275
5,173
Trade payables
14
8,795
12,417
9,065
12,563
Payables for property, plant and equipment
49
394
49
394
Other current liabilities and accrued liabilities
15
3,126
3,627
2,979
3,495
Long term rent (adaptation of IFRS 16)
12.1
403
278
403
278
Total current liabilities
18,648
21,889
18,771
21,903
Total liabilities
53,329
58,315
53,418
58,297
Total equity and liabilities
81,451
84,827
81,401
84,743
The accompanying notes set out in pages 56 – 94 is an integral part of these financial statements.
General Manager
Jonas Krutinis
24 November 2023
Finance Director
Egidijus Žvaliauskas
24 November 2023
51
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENT OF PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME
Group
Company
Notes
2023
2022
2023
2022
Revenue
16
97,868
100,738
97,868
100,738
Cost of sales
17
(90,122)
(100,914)
(90,281)
(100,913)
Gross profit (loss)
7,746
(176)
7,587
(175)
Selling and distribution expenses
18
(1,146)
(919)
(1,146)
(919)
Administrative expenses
18
(2,612)
(5,562)
(2,536)
(5,483)
Other income
19
2,375
10,920
2,379
10,924
Other expenses
19
(2,087)
(645)
(2,087)
(645)
Operating profit
4,276
3,618
4,197
3,702
Financial costs
20
(2,492)
(1,778)
(2,492)
(1,778)
Result from financial activities
(2,492)
(1,778)
(2,492)
(1,778)
Profit before income tax
1,784
1,840
1,705
1,924
Income tax expense
21
(195)
(378)
(189)
(378)
Net profit for the reporting
period
1,589
1,462
1,516
1,546
Other comprehensive income
not to be re-grouped to profit
or loss
Actuarial change of employee-
related accruals
13
25
87
25
87
Income tax effect
13
(4)
(13)
(4)
(13)
Total comprehensive income
for the reporting period
1,610
1,536
1,537
1,620
Attributable to owners of the
Company:
Net profit
1,589
1,462
1,516
1,546
Other comprehensive income
21
74
21
74
Total comprehensive income
1,610
1,536
1,537
1,620
Basic and diluted earnings per
share (in EUR)
22
0,41
0.38
0,39
0.40
The accompanying notes set out in pages 56 – 94 is an integral part of these financial statements.
General Manager
Jonas Krutinis
24 November 2023
Finance Director
Egidijus Žvaliauskas
24 November 2023
VILNIAUS BALDAI AB, company code 121922783, Pramones str. 23, Guopstos village, Trakai region, Lithuania
CONSOLIDATED ANNUAL REPORT FOR THE FY2023 ENDED 31 AUGUST 2023
(all amounts are in EUR thousand unless otherwise stated)
52
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENT OF CHANGES IN EQUITY
GROUP
Notes
Share
Legal
Retained
capital
reserve
earnings
Total
Balance as of 31 August 2021
4,508
451
20,017
24,976
Net profit for the reporting period
-
-
1,462
1,462
Other comprehensive income
-
-
74
74
Total comprehensive income
-
-
1,536
1,536
Transactions with owners
-
-
-
-
Dividends declared
-
-
-
-
Total transactions with owners
-
-
-
-
Balance as of 31 August 2022
4,508
451
21,553
26,512
Net profit for the reporting period
-
-
1,589
1,589
Other comprehensive income
-
-
21
21
Total comprehensive income
-
-
1,610
1,610
Transactions with owners
-
-
-
-
Dividends declared
-
-
-
-
Total transactions with owners
-
-
-
-
Balance as of 31 August 2023
4,508
451
23,163
28,122
(cont’d on the next page)
VILNIAUS BALDAI AB, company code 121922783, Pramones str. 23, Guopstos village, Trakai region, Lithuania
CONSOLIDATED ANNUAL REPORT FOR THE FY2023 ENDED 31 AUGUST 2023
(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 2021
4,508
451
19,867
24,826
Net profit for the reporting period
-
-
1,546
1,546
Other comprehensive income
-
-
74
74
Total comprehensive income
-
-
1,620
1,620
Transactions with owners
Dividends declared
-
-
-
-
Total transactions with owners
-
-
-
-
Balance as of 31 August 2022
4,508
451
21,487
26,446
Net profit for the reporting period
-
-
1,516
1,516
Other comprehensive income
-
-
21
21
Total comprehensive income
-
-
1,537
1,537
Transactions with owners
Dividends declared
-
-
-
-
Total transactions with owners
-
-
-
-
Balance as of 31 August 2023
4,508
451
23,024
27,983
The accompanying notes set out in pages 56 – 94 is an integral part of these financial statements.
General Manager
Jonas Krutinis
24 November 2023
Finance Director
Egidijus Žvaliauskas
24 November 2023
VILNIAUS BALDAI AB, company code 121922783, Pramones str. 23, Guopstos village, Trakai region, Lithuania
CONSOLIDATED ANNUAL REPORT FOR THE FY2023 ENDED 31 AUGUST 2023
(all amounts are in EUR thousand unless otherwise stated)
54
CONSOLIDATED AND COMPANY’S FINANCIAL STATEMENT OF CASH FLOWS
Group
Company
2023
2022
2023
2022
Cash flows from operating activities
Profit (loss) for the period
1,589
1,462
1,516
1,546
Adjustments for:
Depreciation and amortization
4,548
4,927
4,546
4,925
Change in provisions for employee benefits
22
(82)
21
(115)
Result from the disposal of property,
plant and equipment
(17)
(9,769)
(17)
(9,769)
Interest expenses (income)
1,919
1,686
1,919
1,686
Other
277
448
273
445
Changes in working capital:
8,338
(1,328)
8,258
(1,282)
Decrease (increase) in inventories
5,247
408
5,247
408
Decrease (increase) in prepayments
42
(48)
43
(49)
Decrease (increase) in trade receivables
(2,599)
(8,409)
(2,599)
(8,407)
Decrease (increase) in other receivables
469
(416)
480
(417)
Decrease in other current payables and liabilities
(3,994)
(778)
(3,885)
(841)
Cash flows from operating activities
7,503
(10,571)
7,544
(10,588)
Income tax (paid)
(2)
(8)
0
0
Net cash flows from operating activities
7,501
(10,579)
7,544
(10,588)
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
(1,213)
(3,642)
(1,212)
(3,639)
Proceeds on sale of property, plant and equipment
47
10,455
47
10,455
Other investing activities
-
-
-
-
Net cash flows from (used in) investing
(1,166)
6,813
(1,165)
6,816
activities
(cont’d on the next page)
VILNIAUS BALDAI AB, company code 121922783, Pramones str. 23, Guopstos village, Trakai region, Lithuania
CONSOLIDATED ANNUAL REPORT FOR THE FY2023 ENDED 31 AUGUST 2023
(all amounts are in EUR thousand unless otherwise stated)
55
Consolidated and Company’s financial statement of cash flows (cont’d)
Consolidated and Company’s financial statement of cash flows
(cont’d)
Group
Company
2023
2022
2023
2022
Cash flows from (used in) financing activities
Proceed from Factoring
-
8,952
-
8,952
Proceeds from borrowings
-
9,400
-
9,400
Repayments of borrowings
(1,912)
(12,068)
(1,912)
(12,068)
Dividends paid
(1)
(9)
(1)
(9)
Other financial income and expenses
(70)
(66)
(70)
(66)
Interest paid
(1,919)
(1,530)
(1,919)
(1,530)
Net cash flows (used in) financing activities
(3,902)
4,679
(3,902)
4,679
Net (decrease) increase in cash and cash equivalents
2,433
913
2,477
907
Cash and cash equivalents at the beginning of the period
1,048
135
1,003
96
Cash and cash equivalents at the end of the period
3,481
1,048
3,480
1,003
The accompanying notes set out in pages 56 – 94 is an integral part of these financial statements.
General Manager
Jonas Krutinis
24 November 2023
Finance Director
Egidijus Žvaliauskas
24 November 2023
VILNIAUS BALDAI AB, company code 121922783, Pramones str. 23, Guopstos village, Trakai region,
Lithuania
CONSOLIDATED ANNUAL REPORT FOR THE FY2023 ENDED 31 AUGUST 2023
(all amounts are in EUR thousand unless otherwise stated)
56
NOTES TO THE FINANCIAL STATEMENTS
1. General information
Vilniaus baldai AB (hereinafter “the Company”) is a public limited liability company registered in the Republic of
Lithuania. The address of its registered office is Pramones str. 23, Guopstos village, Trakai region, Lithuania.
The Company is engaged in furniture production and trade. The Company was registered on 9 February 1993; its
shares are traded in the Secondary List of the NASDAQ Vilnius AB.
As of 31 August, 2023 and 2022 the shareholders of the Group and the Company were:
2023
2022
Number
Number
of votes
Percentage
of votes
Percentage
held
held
Invalda Privatus Kapitalas AB
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, 2023, 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, 2023 and 31 August 2022 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 2023 and 2022.
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 2023:
Share of
ownership
held by the
Profit (loss) for
Registration
Company,
the reporting
Main
Company
address
%
Share capital
period
Equity
activities
Pramones str. 23,
Guopstos village,
100
3
73
141
Packaging of
ARI-LUX UAB
Trakai region
accessories
As of 31 August, 2023 the number of employees of the Group and the Company was 522 and 459, respectively (as of
31 August 2022 – 700 and 628, 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 24 November 2023. 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, Pramones str. 23, Guopstos village, Trakai region,
Lithuania
CONSOLIDATED ANNUAL REPORT FOR THE FY2023 ENDED 31 AUGUST 2023
(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
2023 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 2023 have been prepared under the assumption that the
Group and the Company will continue as a going concern.
ADOPTION OF NEW AND REVISED INTERNATIONAL FINANCIAL REPORTING STANDARDS
In the current year, the Company and the Group has adopted all of the new and revised Standards and Interpretations
that are relevant to its operations and effective for accounting periods beginning on 1 January 2022
The following standards, amendments and interpretations are mandatory for accounting periods beginning on
or after 1 January 2022
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.
Management has assessed that these amendments do not have a material impact on these financial statements.
Standards and amendments that have been approved but are not yet effective and have not been applied in
advance
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 2023)
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
VILNIAUS BALDAI AB, company code 121922783, Pramones str. 23, Guopstos village, Trakai region,
Lithuania
CONSOLIDATED ANNUAL REPORT FOR THE FY2023 ENDED 31 AUGUST 2023
(all amounts are in EUR thousand unless otherwise stated)
58
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 financial
statements.
IFRS 17: Insurance Contracts (published 18 May 2017, effective from 1 January 2023)
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 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)
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. The Company has not yet evaluated the impact of the implementation of these amendments.
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)
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 Company 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)
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 Company has not yet evaluated the impact of the implementation of these amendments.
Amendments to IAS 1: Classification of Liabilities as Current or Non-current and Classification of Liabilities as
Current or Non-current (issued on 23 January 2020, effective from 1 January 2024, 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. Management has not yet
assessed the impact of applying these amendments.
VILNIAUS BALDAI AB, company code 121922783, Pramones str. 23, Guopstos village, Trakai region,
Lithuania
CONSOLIDATED ANNUAL REPORT FOR THE FY2023 ENDED 31 AUGUST 2023
(all amounts are in EUR thousand unless otherwise stated)
59
The amendments in Non-current Liabilities with Covenants (Amendments to IAS 1) (issued on 31 October 2022,
effective from 1 January 2024, but not before approval by the EU):
Modify the requirements introduced by Classification of Liabilities as Current or Non-current on how an entity classifies
debt and other financial liabilities as current or non-current in particular circumstances: only covenants with which an
entity is required to comply on or before the reporting date affect the classification of a liability as current or non-current.
In addition, an entity has to disclose information in the notes that enables users of financial statements to understand
the risk that non-current liabilities with covenants could become repayable within twelve months. The amendments are
effective for reporting periods beginning on or after 1 January 2024. The amendments are applied retrospectively in
accordance with IAS 8 and earlier application is permitted.
Management has not yet assessed the impact of applying these amendments.
Amendments to IFRS 16 Lease Liability in a Sale and Leaseback with amendments that clarify how a seller-
lessee subsequently measures sale and leaseback transactions that satisfy the requirements in IFRS 15 to be
accounted for as a sale (issued on 22 September 2022, effective from 1 January 2024, but not before approval by
the EU):
Lease Liability in a Sale and Leaseback (Amendments to IFRS 16) requires a seller-lessee to subsequently measure
lease liabilities arising from a leaseback in a way that it does not recognise any amount of the gain or loss that relates
to the right of use it retains. The new requirements do not prevent a seller-lessee from recognising in profit or loss any
gain or loss relating to the partial or full termination of a lease. The amendments are effective for annual reporting
periods beginning on or after 1 January 2024. Earlier application is permitted. A seller-lessee applies the amendments
retrospectively in accordance with IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors to sale and
leaseback transactions entered into after the date of initial application.
Management has not yet assessed the impact of applying these amendments.
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).
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 consolidated financial statements of the Group include Vilniaus baldai AB and its parent (subsidiary) companies.
The financial statements of the subsidiaries are prepared for the same reporting year and using the same accounting
principles. Subsidiaries are consolidated from the date their control passes to the Group and are no longer consolidated
from the date control is transferred outside the Group. All intra-Group transactions, balances and unrealized profits or
losses from transactions between Group companies are eliminated. Equity and net result attributable to minority
shareholders (non-controlling interests) are presented separately in the statement of financial position and the
statement of comprehensive income. Revenues and expenses of subsidiaries acquired or sold during the year are
included in the consolidated statement of comprehensive income from the date of acquisition of the subsidiary to the
date of sale of the subsidiary, respectively. The gross income of subsidiaries is attributed to the owners of the Company
and the non-controlling interest (even if the result of the non-controlling interest would become negative). Financial
statements of subsidiaries are adjusted so that their accounting policies are consistent with the accounting policies
applied by other Group companies, if necessary. For consolidation purposes, financial statements of subsidiaries are
prepared according to the financial year of the parent company. All intra-Group transactions, balances, income and
expenses are eliminated during consolidation. Acquisitions and disposals of the minority share of the Group are
accounted for as an equity transaction: the difference between the value of the net assets acquired from the minority
share/transferred to the minority in the Group's financial statements and the purchase/sale price of the shares is
accounted for directly in equity.
VILNIAUS BALDAI AB, company code 121922783, Pramones str. 23, Guopstos village, Trakai region,
Lithuania
CONSOLIDATED ANNUAL REPORT FOR THE FY2023 ENDED 31 AUGUST 2023
(all amounts are in EUR thousand unless otherwise stated)
60
2.5. Business combinations
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.
2.6. 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.
2.7. 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.
2.8. 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.
VILNIAUS BALDAI AB, company code 121922783, Pramones str. 23, Guopstos village, Trakai region,
Lithuania
CONSOLIDATED ANNUAL REPORT FOR THE FY2023 ENDED 31 AUGUST 2023
(all amounts are in EUR thousand unless otherwise stated)
61
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.
2.9. 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.
2.10. 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:
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
VILNIAUS BALDAI AB, company code 121922783, Pramones str. 23, Guopstos village, Trakai region,
Lithuania
CONSOLIDATED ANNUAL REPORT FOR THE FY2023 ENDED 31 AUGUST 2023
(all amounts are in EUR thousand unless otherwise stated)
62
• 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.
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.
VILNIAUS BALDAI AB, company code 121922783, Pramones str. 23, Guopstos village, Trakai region,
Lithuania
CONSOLIDATED ANNUAL REPORT FOR THE FY2023 ENDED 31 AUGUST 2023
(all amounts are in EUR thousand unless otherwise stated)
63
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.
2.11. Share capital
Ordinary registered shares are classified as share capital. Ordinary registered shares are stated at their par value.
2.12. 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.
2.13. 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.
(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.
VILNIAUS BALDAI AB, company code 121922783, Pramones str. 23, Guopstos village, Trakai region,
Lithuania
CONSOLIDATED ANNUAL REPORT FOR THE FY2023 ENDED 31 AUGUST 2023
(all amounts are in EUR thousand unless otherwise stated)
64
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.
2.14. 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.
VILNIAUS BALDAI AB, company code 121922783, Pramones str. 23, Guopstos village, Trakai region,
Lithuania
CONSOLIDATED ANNUAL REPORT FOR THE FY2023 ENDED 31 AUGUST 2023
(all amounts are in EUR thousand unless otherwise stated)
65
(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.
2.15. 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.
2.16. 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 2023 (15% in 2022).
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 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.
VILNIAUS BALDAI AB, company code 121922783, Pramones str. 23, Guopstos village, Trakai region,
Lithuania
CONSOLIDATED ANNUAL REPORT FOR THE FY2023 ENDED 31 AUGUST 2023
(all amounts are in EUR thousand unless otherwise stated)
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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.
2.17. 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:
1 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,
2 it is possible to identify the rights of each party with regard to the goods and / or services to be transferred,
3 it is possible to identify the payment terms for the goods and / or services to be transferred,
4 the contract has commercial substance,
5 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:
1. a good and / or service is distinct, or
2. 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 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.
VILNIAUS BALDAI AB, company code 121922783, Pramones str. 23, Guopstos village, Trakai region,
Lithuania
CONSOLIDATED ANNUAL REPORT FOR THE FY2023 ENDED 31 AUGUST 2023
(all amounts are in EUR thousand unless otherwise stated)
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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.
2.18. 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.
2.19. 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.
2.20. 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.
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).
VILNIAUS BALDAI AB, company code 121922783, Pramones str. 23, Guopstos village, Trakai region,
Lithuania
CONSOLIDATED ANNUAL REPORT FOR THE FY2023 ENDED 31 AUGUST 2023
(all amounts are in EUR thousand unless otherwise stated)
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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.
2.21. 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.
2.22. 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.
2.23. 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.
VILNIAUS BALDAI AB, company code 121922783, Pramones str. 23, Guopstos village, Trakai region,
Lithuania
CONSOLIDATED ANNUAL REPORT FOR THE FY2023 ENDED 31 AUGUST 2023
(all amounts are in EUR thousand unless otherwise stated)
69
2.24. 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.
2.25. 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.
2.26. 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
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 13 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
VILNIAUS BALDAI AB, company code 121922783, Pramones str. 23, Guopstos village, Trakai region,
Lithuania
CONSOLIDATED ANNUAL REPORT FOR THE FY2023 ENDED 31 AUGUST 2023
(all amounts are in EUR thousand unless otherwise stated)
70
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.
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).
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 13 – 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.
VILNIAUS BALDAI AB, company code 121922783, Pramones str. 23, Guopstos village, Trakai region,
Lithuania
CONSOLIDATED ANNUAL REPORT FOR THE FY2023 ENDED 31 AUGUST 2023
(all amounts are in EUR thousand unless otherwise stated)
71
3. Changes in significant accounting policies
There were no significant changes in accounting policies during the reporting period.
4. Intangible assets
Software
Group
Company
Cost:
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
Additions
-
-
Sold and written off asset
(7)
(7)
Balance as of 31 August 2023
516
516
Amortisation:
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
Charge for the year
78
78
Sold and written off asset
-
-
Balance as of 31 August 2023
407
407
Net book value as of 31 August 2022
194
194
Net book value as of 31 August 2023
109
109
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 286 thousand as of 31 August 2023 (as of 31 August
2022 – EUR 275 thousand) are fully amortized and were still in use.
VILNIAUS BALDAI AB, company code 121922783, Pramones str. 23, Guopstos village, Trakai region,
Lithuania
CONSOLIDATED ANNUAL REPORT FOR THE FY2023 ENDED 31 AUGUST 2023
(all amounts are in EUR thousand unless otherwise stated)
72
5. Property, plant and equipment
Other
Group
Machinery
property,
Land and
and
plant and
buildings
equipment
Vehicles
equipment
Total
Cost:
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
Additions
39
1,844
-
105
1,988
Sold and written off asset
-
(2,216)
(11)
(67)
(2,294)
Overwriting from one article to another
-
(80)
-
80
-
Balance as of 31 August 2023
31,760
50,906
-
5,898
88,564
Accumulated depreciation:
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
Charge for the year
598
3,298
-
480
4,376
Sold and written off asset
-
(2,101)
(11)
(53)
(2,165)
Balance as of 31 August 2023
1,895
23,806
-
1,611
27,312
Net book value as of 31 August 2022
30,424
28,749
-
4,596
63,769
Net book value as of 31 August 2023
29,865
27,100
-
4,287
61,252
VILNIAUS BALDAI AB, company code 121922783, Pramones str. 23, Guopstos village, Trakai region,
Lithuania
CONSOLIDATED ANNUAL REPORT FOR THE FY2023 ENDED 31 AUGUST 2023
(all amounts are in EUR thousand unless otherwise stated)
73
Property, plant and equipment (cont’d)
Other
Company
Machinery
property,
Land and
and
plant and
buildings
equipment
Vehicles
equipment
Total
Cost:
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
Additions
39
1,844
-
104
1,987
Sold and written off asset
-
(2,216)
(11)
(67)
(2,294)
Overwriting from one article to another
-
(80)
-
80
-
Balance as of 31 August 2023
31,760
50,906
-
5,884
88,550
Accumulated depreciation:
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
Charge for the year
598
3,298
-
478
4,374
Sold and written off asset
-
(2,101)
(11)
(53)
(2,165)
Balance as of 31 August 2023
1,895
23,806
-
1,603
27,304
Net book value as of 31 August 2022
30,424
28,749
-
4,589
63,762
Net book value as of 31 August 2023
29,865
27,100
-
4,281
61,246
Depreciation charge for the year was recognised as follows:
Group
Company
2023
2022
2023
2022
Cost of production
4,325
4,737
4,324
4,736
Operating expenses and inventories cost of production
51
66
50
65
4,376
4,803
4,374
4,801
Property, plant and equipment of the Group and the Company with an acquisition cost of EUR 1,410 thousand was
fully depreciated as of 31 August 2023 (EUR 2,978 thousand as of 31 August 2022), and was still in active use. The
major part of the fully depreciated property, plant and equipment consists of machinery and equipment.
As at 31 August 2023 the Company had property, plant and equipment acquired under finance leases in the amount
of 767 thousand EUR. (As at 31 August 2022 the Company did not have any property, plant and equipment acquired
under finance leases).
The Company’s prepayments for non-current assets amounted to EUR 2 thousand as of 31 August 2023 (EUR 82
thousand as of 31 August 2022). Prepayments are classified as other property, plant and equipment.
VILNIAUS BALDAI AB, company code 121922783, Pramones str. 23, Guopstos village, Trakai region,
Lithuania
CONSOLIDATED ANNUAL REPORT FOR THE FY2023 ENDED 31 AUGUST 2023
(all amounts are in EUR thousand unless otherwise stated)
74
Property, plant and equipment (cont’d)
As at 31 August 2023, the Group and the Company have reclassified spare parts amounting to EUR 1,056 thousand
(EUR 994 thousand as of 31 August 2022) 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, 2023, the Company’s property, plant and equipment with the net book value of EUR 45,845 thousand
and inventories which classified as non-current assets amounting to EUR 1,056 thousand was pledged to the bank as
collateral for loans granted (respectively EUR 50,347 thousand and EUR 994 thousand as of 31 August 2022) (Note
12).
During 2023 and 2022, 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 2023 and 2022 are presented below:
2023
2022
Share
Acquisition
Share
Acquisition
capital
cost
capital
cost
ARI-LUX UAB
100%
5
100%
5
5
5
Performance results of the subsidiary ARI-LUX UAB before elimination of related transactions in 2023 and 2022.
Statement of financial position
As of 31 August
As of 31 August
2023
2022
Other non-current assets
6
8
Trade receivables
272
146
Other receivables and current assets
47
38
Cash and cash equivalents
1
44
Total assets
326
236
Share capital
3
3
Retained earnings
138
65
Trade liabilities
1
-
Other current payables and accrued liabilities
184
168
Total equity and liabilities
326
236
Statement of profit or loss and other comprehensive income
2023
2022
Revenue
752
750
Cost of sales
(593)
(752)
Gross profit
159
(2)
Operating expenses
(80)
(81)
Profit (loss) before income tax
79
(83)
Income tax expense
6
-
Net profit (loss) for the reporting period
73
(83)
VILNIAUS BALDAI AB, company code 121922783, Pramones str. 23, Guopstos village, Trakai region,
Lithuania
CONSOLIDATED ANNUAL REPORT FOR THE FY2023 ENDED 31 AUGUST 2023
(all amounts are in EUR thousand unless otherwise stated)
75
7. Inventories
Group
Company
2023
2022
2023
2022
Raw materials
1,480
4,091
1,480
4,091
Work in progress
2,293
4,618
2,293
4,618
Finished goods
2,078
2,339
2,078
2,339
Spare parts for the repair of equipment
450
547
450
547
used in activities
Goods for resale
50
3
50
3
Less: adjustment to net realizable value
-
-
-
-
6,351
11,598
6,351
11,598
Raw materials consist of wood, accessories, plastics, chemical materials and other materials used in production.
Inventories in value of EUR 6,351 thousand are pledged to the bank according to loan agreements (Note 12) as of
31 August 2023. Inventories in value of EUR 11,598 thousand were pledged to the bank as of 31 August 2022.
8. Trade receivables
Group
Company
2023
2022
2023
2022
Other receivables after one year, gross
-
1,651
-
1,651
Less: impairment for doubtful receivables
-
(130)
-
(130)
-
1,521
-
1,521
Trade receivables, gross
7,264
3,190
7,264
3,190
Less: impairment for doubtful receivables
-
(46)
-
(46)
7,264
3,144
7,264
3,144
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. As of 31 August,
2022 Factoring limit and currency was EUR 9,340 thousand; EUR 8,952 thousand of factoring limit was used at 31
August 2022. On 1 June 2023 the factoring contract with the bank was terminated. All the obligations related to this
contract were fully fulfilled on 12 June 2023.
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.
During FY2023 no impairment was recorded in relation to any doubtful trade receivables by the Group and the
Company. (In FY2022, an impairment of 130 thousand EUR was recorded in relation to doubtful receivables after one
year and an impairment of 46 thousand EUR was recorded in relation to doubtful receivables within one year.
VILNIAUS BALDAI AB, company code 121922783, Pramones str. 23, Guopstos village, Trakai region,
Lithuania
CONSOLIDATED ANNUAL REPORT FOR THE FY2023 ENDED 31 AUGUST 2023
(all amounts are in EUR thousand unless otherwise stated)
76
The ageing analysis of the Group’s and the Company’s trade receivables as of 31 August 2023 and 31 August 2022 is
as follows:
Trade receivables
Trade receivables past due, but not impaired
Total
neither past due
Less than
30–60
60–90
90–120
More than
COMPANY
nor impaired
30 days
days
days
days
120 days
2022
1,632
1,485
891
657
-
-
4,665
2023
6,162
1,079
23
-
-
-
7,264
Trade receivables
Trade receivables past due, but not impaired
Total
neither past due
Less than
30–60
60–90
90–120
More than
GROUP
nor impaired
30 days
days
days
days
120 days
2022
1,632
1,485
891
657
-
-
4,665
2023
6,162
1,079
23
-
-
-
7,264
The company was not granted any new loans during the reporting period.
9. Other receivables
Group
Company
2023
2022
2023
2022
Refundable VAT
841
1,144
841
1,144
Receivables of Employment Services Under
the Ministry of Social Security and Labour
42
30
-
-
Other receivables
223
400
222
401
1,106
1,574
1,063
1,545
Other receivables of the Group and the Company were neither past due nor impaired as of 31 August 2023 and 31 August 2022.
10. Cash and cash equivalents
Group
Company
2023
2022
2023
2022
Cash at bank
3,481
1,048
3,480
1,003
3,481
1,048
3,480
1,003
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 2023 the Company’s legal reserve
was fully formed at amount 451 thousand. EUR (31 August 2022 – EUR 451 thousand).
VILNIAUS BALDAI AB, company code 121922783, Pramones str. 23, Guopstos village, Trakai region,
Lithuania
CONSOLIDATED ANNUAL REPORT FOR THE FY2023 ENDED 31 AUGUST 2023
(all amounts are in EUR thousand unless otherwise stated)
77
12. Financial liabilities
Group
Company
As of 31
As of 31
As of 31
As of 31
August
August
August
August
2023
2022
2023
2022
Non-current borrowings
Syndicated loan from commercial banks
21,547
22,460
21,547
22,460
Issue price of VIVA bonds
6,000
6,000
6,000
6,000
Loans from related party
3,000
3,000
3,000
3,000
Interest on loans from related party
467
362
467
362
Loans from Ikea Supply AG
2,115
3,434
2,115
3,434
Other loans
329
-
329
-
33,458
35,256
33,458
35,256
Group
Company
As of 31
As of 31
As of 31
As of 31
August
August
August
August
2023
2022
2023
2022
Current borrowings
Syndicated loan from commercial banks
3,582
3,375
3,582
3,375
Interest on syndicated loan from commercial
banks
265
50
265
50
Interest on issue price of VIVA bonds
29
-
29
-
Loans from Ikea Supply AG
1,759
1,646
1,759
1,646
Interest on loans from Ikea Supply AG
202
102
202
102
Other loans
438
-
438
-
6,275
5,173
6,275
5,173
The Company’s property, plant and equipment with the total net book value of EUR 45,845 thousand as of 31 August
2023 (EUR 50,347 thousand as of 31 August 2022), all the current cash balances and future inflows to the Company’s
accounts at the bank and inventories in value of EUR 6,351 thousand and other non-current assets EUR 1,056
thousand as at 31 August 2023 (inventories in value of EUR 11,598 thousand and other non-current assets EUR 994
thousand as at 31 August 2022) 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.
Loans from the bank:
- EUR 12,891 thousand, interest rate 7.6%, maturity 30 April 2027
- EUR 12,944 thousand, interest rate 7.6%, 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 7.7%, the maturity date of the bonds is
September 15, 2027
Actual interest rates are close to the effective interest rates.
VILNIAUS BALDAI AB, company code 121922783, Pramones str. 23, Guopstos village, Trakai region,
Lithuania
CONSOLIDATED ANNUAL REPORT FOR THE FY2023 ENDED 31 AUGUST 2023
(all amounts are in EUR thousand unless otherwise stated)
78
Weighted average interest rates of borrowings outstanding at the year-end:
Group
Company
2023
2022
2023
2022
Loans
6.73 %
4.04%
6.73 %
4.04%
Borrowings at the end of the year in different currencies:
Group
Company
Borrowings denominated in:
2023
2022
2023
2022
EUR
38,966
40,429
38,966
40,429
SEK
767
-
767
-
39,733
40,429
39,733
40,429
Reconciliation of movements of liabilities to cash flows arising from financing activities:
Group
Company
Borrowings as at 31/08/2022
39,915
39,915
Proceeds from borrowings
-
-
Repayments of borrowings
(1,912)
(1,912)
Borrowings as at 31/08/2023
38,003
38,003
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 on 1 January 2019.
From 1 January 2019 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 borrowing
rate. The Group and the Company recognize the assets under their ownership in an amount equal to the lease liabilities,
adjusted for the amount of lease payments prepaid or accrued until 31 August 2019.
Group
Company
2023
2022
2023
2022
Assets under management:
990
847
990
847
Premises
266
-
266
-
Vehicles
724
847
724
847
Increase in total liabilities:
1,021
865
1,021
865
Long - term lease obligations
618
587
618
587
Short - term lease obligations
403
278
403
278
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 and the Company includes payments due in the lease as a lease liability.
Group
Company
2023
2022
2023
2022
Long time rent according IFRS 16 of which:
618
587
618
587
Premises lease obligation
134
-
134
-
Vehicle rental obligation
484
587
484
587
Long time rent according IFRS 16 current
liabilities of which:
403
278
403
278
Premises lease obligation
133
-
133
-
Vehicle rental obligation
270
278
270
278
1,021
865
1,021
865
VILNIAUS BALDAI AB, company code 121922783, Pramones str. 23, Guopstos village, Trakai region,
Lithuania
CONSOLIDATED ANNUAL REPORT FOR THE FY2023 ENDED 31 AUGUST 2023
(all amounts are in EUR thousand unless otherwise stated)
79
13. Provisions for employee benefits
Group
Company
2023
2022
2023
2022
Provisions for pension benefits
195
206
161
173
Provisions for jubilee and other benefits
410
377
410
377
605
583
571
550
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:
2023
2022
Discount rate based on inflation forecast
1.5%
1.5%
Salary growth rate
6%
6%
Rate of employee turnover by age group:
younger than 25 years
80%
80%
from 25 to 45 years
30%
30%
from 45 to 59 years
25%
25%
from 59 to 75 years
20%
20%
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.
Group
Increase /
Impact on other
decrease, %
comprehensive income
2023
Discount rate
+0.5%
10
Salary growth rate
+0.5%
(10)
Discount rate
-0.5%
(11)
Salary growth rate
-0.5%
10
Company
ncrease /
Impact on other
decrease, %
comprehensive income
2023
Discount rate
+0.5%
9
Salary growth rate
+0.5%
(9)
Discount rate
-0.5%
(10)
Salary growth rate
-0.5%
9
VILNIAUS BALDAI AB, company code 121922783, Pramones str. 23, Guopstos village, Trakai region,
Lithuania
CONSOLIDATED ANNUAL REPORT FOR THE FY2023 ENDED 31 AUGUST 2023
(all amounts are in EUR thousand unless otherwise stated)
80
The movement in the provisions for pension benefits is as follows:
Group
2023
2022
At 1 September
206
254
Growth in the current year
20
55
Payments
(6)
(18)
Re-measurements of pension benefits
(25)
(85)
At 31 August
195
206
Company
2023
2022
At 1 September
173
254
Growth in the current year
16
21
Payments
(3)
(15)
Re-measurements of pension benefits
(25)
(87)
At 31 August
161
173
The movement in the provisions for jubilee and other benefits is as follows:
Group
2023
2022
At 1 September
377
411
Growth in the current year
153
75
Payments
(120)
(109)
At 31 August
410
377
Company
2023
2022
At 1 September
377
411
Growth in the current year
153
75
Payments
(120)
(109)
At 31 August
410
377
14. Trade payables
Trade payables are non-interest bearing and are normally settled on 30–90 days terms.
15. Other current and accrued liabilities
Group
Company
2023
2022
2023
2022
Payroll liabilities and related taxes
1,276
1,187
1,179
1,108
Accrued vacation
664
1,061
629
1,015
Dividends payable
986
986
986
986
Other payables and accrued liabilities
200
393
185
386
3,126
3,627
2,979
3,495
Other payables are non-interest bearing and are normally settled on 15–30 day terms. Dividends normally are settled
within one year.
VILNIAUS BALDAI AB, company code 121922783, Pramones str. 23, Guopstos village, Trakai region,
Lithuania
CONSOLIDATED ANNUAL REPORT FOR THE FY2023 ENDED 31 AUGUST 2023
(all amounts are in EUR thousand unless otherwise stated)
81
16. Revenue
In 2023 sales of goods comprised sales of furniture, which accounted for approx. 99,6 per cent (in 2022 – 99,5 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 2023 amounted to EUR 97,498 thousand, i.e. 99.6 per cent of total sales (in 2022
sales amounted to EUR 100,215 thousand, i.e. 99.5 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
2023
2022
2023
2022
Primary geographical markets:
European Union countries, excluding
Lithuania
63,572
57,298
63,572
57,298
Non-European Union countries
33,613
42,642
33,613
42,642
Lithuania
683
798
683
798
97,868
100,738
97,868
100,738
Major products lines:
Furniture
97,494
100,188
97,494
100,188
Raw materials
374
550
374
550
97,868
100,738
97,868
100,738
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
2023
2022
2023
2022
Materials
64,351
69,914
64,351
69,914
Wages, salaries
12,916
15,866
12,350
15,140
Social security
217
279
206
265
Depreciation
4,419
4,813
4,417
4,812
Depreciation according to IFRS 16
318
316
318
316
Other production expenses
7,901
9,726
8,639
10,466
90,122
100,914
90,281
100,913
VILNIAUS BALDAI AB, company code 121922783, Pramones str. 23, Guopstos village, Trakai region,
Lithuania
CONSOLIDATED ANNUAL REPORT FOR THE FY2023 ENDED 31 AUGUST 2023
(all amounts are in EUR thousand unless otherwise stated)
82
18. Selling and distribution expenses and administrative expenses
Group
Company
2023
2022
2023
2022
Selling and distribution expenses:
Transportation and logistics expenses
750
551
750
551
Wages, salaries
285
261
285
261
Social security
5
5
5
5
Depreciation and amortisation
1
4
1
4
Utilities, maintenance and communications
12
18
12
18
Other
93
80
93
80
1,146
919
1,146
919
Group
Company
2023
2022
2023
2022
Administrative expenses:
Wages, salaries
2,345
2,317
2,280
2,258
Social security
40
41
39
40
Transportation and logistics expenses
37
42
37
42
Audit and consultation expenses
265
292
265
292
Depreciation and amortisation
129
110
128
109
Depreciation according to IFRS 16
37
83
37
83
Utilities, maintenance and communications
241
264
239
262
Waste utilisation expenses
101
303
101
303
Business trips expenses
29
22
29
22
Charity and support expenses
10
18
10
18
Other
(622)
2,070
(629)
2,054
2,612
5,562
2,536
5,483
The item „Other“ of Administrative expenses includes 1,925 thousand EUR fixed costs compensation from IKEA AG,
which was received in accordance with the provisions of the long-term contract signed in 2018, which provides for the
minimum production and sales volumes required for business continuity.
19. Other operating income and expenses
Group
Company
2023
2022
2023
2022
Other operating income
Rent and utilities income
1,328
384
1,328
384
Gain on disposal of property, plant and
equipment
36
9,770
36
9,770
Heating revenue
958
569
958
569
Other income
53
197
57
201
2,375
10,920
2,379
10,924
Other operating expenses
Direct costs of rent income
(1,435)
(156)
(1,435)
(156)
Heat generation costs
(582)
(321)
(582)
(321)
Losses on disposal of property, plant and
equipment
(8)
-
(8)
-
Other expenses
(62)
(168)
(62)
(168)
(2,087)
(645)
(2,087)
(645)
VILNIAUS BALDAI AB, company code 121922783, Pramones str. 23, Guopstos village, Trakai region,
Lithuania
CONSOLIDATED ANNUAL REPORT FOR THE FY2023 ENDED 31 AUGUST 2023
(all amounts are in EUR thousand unless otherwise stated)
83
20. Finance income and finance costs
Group
Company
2023
2022
2023
2022
Finance costs
Interest expenses
(2,410)
(1,709)
(2,410)
(1,709)
Expenses due to currency exchange
(11)
(3)
(11)
(3)
Other financial expenses
(71)
(66)
(71)
(66)
(2,492)
(1,778)
(2,492)
(1,778)
During 2022 and 2023, there were no capitalized borrowing costs in non-current assets.
21. Income tax
Group
Company
2023
2022
2023
2022
Components of the income tax expense
Income tax expenses for the reporting year
6
-
-
-
Income tax expenses from dividends paid to
natural persons
-
-
-
-
Total current income tax expense
6
-
-
-
Recognition and reversal of temporary
differences
189
378
189
378
Change in deferred tax
189
378
189
378
Income tax expense carried in profit or loss
195
378
189
378
Deferred income tax asset and liability as of 31 August 2022 and 31 August 2023 was accounted using tax rate of 15%.
In 2023, 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
1.1 million (EUR 0.5 million at 2022), related to the acquisition and 2.4 million (EUR 3.5 million at 2022) 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
2023
2022
Profit (loss) before tax
1,784
1,840
Tax calculated at a statutory 15% tax rate
15 %
268
15 %
276
Tax effects of:
- Expenses not deductible for tax purposes
0 %
197
0 %
261
- Income not subject to tax
0 %
(97)
0 %
(16)
- Income tax relief due to investment projects
(15 %)
(362)
(15 %)
(521)
Income tax expense carried in profit or loss
15 %
6
15 %
-
VILNIAUS BALDAI AB, company code 121922783, Pramones str. 23, Guopstos village, Trakai region,
Lithuania
CONSOLIDATED ANNUAL REPORT FOR THE FY2023 ENDED 31 AUGUST 2023
(all amounts are in EUR thousand unless otherwise stated)
84
Company
2023
2022
Profit (loss) before tax
1,705
1,924
Tax calculated at a statutory 15% tax rate
15 %
256
15 %
289
Tax effects of:
- Expenses not deductible for tax purposes
0 %
196
0 %
255
- Income not subject to tax
0 %
(90)
0 %
(16)
- Income tax relief due to investment projects
(15 %)
(362)
(15 %)
(528)
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
2023
2022
2023
2022
Deferred tax assets
877
1,059
877
1,059
Deferred tax liability
-
7
-
7
877
1,066
877
1,066
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:
Group
Credited
Credited
(debited)
(debited)
to income
to income
tax
tax
Deferred tax assets
2021
expenses
2022
expenses
2023
– Accrued charges
96
(18)
78
22
100
– Unused Investment relief
1,375
(394)
981
(204)
777
1,471
(412)
1,059
(182)
877
Deferred tax liabilities
– Investment relief
(27)
34
7
(7)
-
(27)
34
7
(7)
-
Deferred tax assets, net
1,444
(378)
1,066
(189)
877
Company
Credited
Credited
(debited)
(debited)
to income
to income
tax
tax
Deferred tax assets
2021
expenses
2022
expenses
2023
– Accrued charges
96
(18)
78
22
100
– Unused Investment relief
1,375
(394)
981
(204)
777
1,471
(412)
1,059
(182)
877
Deferred tax liabilities
(27)
34
7
(7)
-
– Investment relief
(27)
34
7
(7)
-
Deferred tax assets, net
1,444
(378)
1,066
(189)
877
VILNIAUS BALDAI AB, company code 121922783, Pramones str. 23, Guopstos village, Trakai region,
Lithuania
CONSOLIDATED ANNUAL REPORT FOR THE FY2023 ENDED 31 AUGUST 2023
(all amounts are in EUR thousand unless otherwise stated)
85
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
Company
2023
2022
2023
2022
Net profit attributable to shareholders
1,589
1,462
1,516
1,546
Weighted average number of shares
(thousand)
3,886
3,886
3,886
3,886
Basic earnings per share (in EUR)
0.41
0.38
0.39
0.40
There were no changes in the share capital of the Company during 2023 and 2022; 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.
VILNIAUS BALDAI AB, company code 121922783, Pramones str. 23, Guopstos village, Trakai region,
Lithuania
CONSOLIDATED ANNUAL REPORT FOR THE FY2023 ENDED 31 AUGUST 2023
(all amounts are in EUR thousand unless otherwise stated)
86
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
2023
2022
2023
2022
Financial assets
Loans granted
-
-
-
-
Trade and other receivables, of
which:
5,846
8,147
5,810
8,105
Other receivables after one year
1,521
-
1,521
-
Receivables from customers
3,144
7,264
3,145
7,264
VAT refundable
1,144
841
1,144
841
Receivables from the
Employment Service
30
42
-
-
to the Ministry of Social Security
and Labor
Other receivables
7
-
-
-
Cash and cash equivalents
1,048
3,481
1,004
3,480
6,894
11,628
6,814
11,585
Group
Company
Category – Financial liabilities
Category – Financial liabilities
measured at amortised cost
measured at amortised cost
2023
2022
2023
2022
Financial liabilities
Borrowings
39,733
40,429
39,733
40,429
Other financial liabilities
-
-
-
-
Trade and other payables, of
which:
11,143
15,329
11,300
15,387
Trade debt
8,795
12,417
9,065
12,564
Amounts payable on fixed assets
49
394
49
394
Wages and related taxes
1,276
1,187
1,179
1,108
Dividends payable
986
986
986
986
Other amounts payable
37
345
21
335
50,876
55,758
51,033
55,816
VILNIAUS BALDAI AB, company code 121922783, Pramones str. 23, Guopstos village, Trakai region,
Lithuania
CONSOLIDATED ANNUAL REPORT FOR THE FY2023 ENDED 31 AUGUST 2023
(all amounts are in EUR thousand unless otherwise stated)
87
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 2023 were 0.95 and 0.62
(Group’s), 0.95 and 0.62 (Company’s) respectively (the Group’s liquidity and quick ratio as of 31 August 2022 – 0.75
and 0.25, and the Company’s 0.75 and 0.25 respectively).
The tables below summarize the maturity profile of the Group’s and the Company’s financial liabilities as of 31 August
2023 based on contractual undiscounted cash flows (planned payments and interest):
Group
On
Less than
3 to 12
1 to 5
More than
demand
3 months
months
years
5 years
Total
Interest bearing loans and
borrowings
-
1,334
6,033
27,084
10,197
44,648
Trade and other payables
3,458
12,234
-
-
-
15,692
Balance as of
31 August 2022
3,458
12,604
6,033
27,084
10,197
60,340
Interest bearing loans and
borrowings
-
1,368
6,971
35,003
-
43,342
Trade and other payables
2,859
8,846
100
-
-
11,805
Balance as of
31 August 2023
2,859
10,214
7,071
35,003
-
55,147
Company
On
Less than
3 to 12
1 to 5
More than
demand
3 months
months
years
5 years
Total
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
Interest bearing loans and
borrowings
-
1,368
6,971
35,003
-
43,342
Trade and other payables
2,762
9,100
100
-
-
11,962
Balance as of
31 August 2023
2,762
10,468
7,071
35,003
-
55,304
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 2023 accounted for approximately 67% of the total Group’s
and Company’s trade receivables (as of 31 August 2022 over 70%). 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.
VILNIAUS BALDAI AB, company code 121922783, Pramones str. 23, Guopstos village, Trakai region,
Lithuania
CONSOLIDATED ANNUAL REPORT FOR THE FY2023 ENDED 31 AUGUST 2023
(all amounts are in EUR thousand unless otherwise stated)
88
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.
On the date of the financial report there are no indications that the counterparts of trade receivables and other
receivables, which are not due and not impaired, will not be able to fulfil any of their payment obligations, because the
outstanding balances of receivables are regularly monitored and controlled.
As of 1 September 2019, 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"
97,844
7,258
Less than four years "trading history with the Group"
24
6
Higher risk
-
-
Total gross carrying amount
97,868
7,264
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.
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 2023:
Expected credit
Initial value
Impairment
Carrying amount
losses, %
Not past due
6,162
-
6,162
Past due for 1 to 30 days
0%
1,079
-
1,079
Past due for 31 to 60 days
1%
23
-
23
Past due for 61 to 120 days
2%
-
-
-
Past due for over 120 days
3%
-
-
-
Total
7,264
-
7,264
The Management had analyzed trade receivables. As of 2023 August 31 no impairments have been made to the
Group's and the Company's trade receivables. (2022 August 31 the impairment loss amounted to EUR 176 thousand).
VILNIAUS BALDAI AB, company code 121922783, Pramones str. 23, Guopstos village, Trakai region,
Lithuania
CONSOLIDATED ANNUAL REPORT FOR THE FY2023 ENDED 31 AUGUST 2023
(all amounts are in EUR thousand unless otherwise stated)
89
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 2023 were as follows (stated in EUR):
Group
Company
Assets
Liabilities
Assets
Liabilities
EUR
11,628
49,723
11,585
49,880
SEK
-
767
-
767
PLN
-
85
-
85
11,628
50,575
11,585
50,732
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
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 2023 and 31 August 2022.
Group
Company
Increase/
Effect on profit
Increase/
Effect on profit
decrease, %
before tax
decrease, %
before tax
2022
EUR
+1 %
(399)
+1 %
(399)
EUR
-1 %
399
-1 %
399
2023
EUR
+1 %
(380)
+1 %
(380)
EUR
-1 %
380
-1 %
380
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.
VILNIAUS BALDAI AB, company code 121922783, Pramones str. 23, Guopstos village, Trakai region,
Lithuania
CONSOLIDATED ANNUAL REPORT FOR THE FY2023 ENDED 31 AUGUST 2023
(all amounts are in EUR thousand unless otherwise stated)
90
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
2023.
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 periods 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:
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 periods from 1 September 2020 onwards, 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.
VILNIAUS BALDAI AB, company code 121922783, Pramones str. 23, Guopstos village, Trakai region,
Lithuania
CONSOLIDATED ANNUAL REPORT FOR THE FY2023 ENDED 31 AUGUST 2023
(all amounts are in EUR thousand unless otherwise stated)
91
The management monitors that the Company is in line with both above mentioned capital requirements. No other
capital management instruments are used.
2023FY banks’ covenants requirements and actual results are presented below:
• Debt coverage ratio is required to be not less than 1.2. As of 31 August 2023 Company’s debt coverage ratio
is 1.8.
• Equity ratio is required to be not less than 0.40. As of 31 August 2023 Company’s equity ratio is 0,383.
• Net financial debt to EBITDA ratio is required to be not less than 3.5. For the financial year 2023 Company’s
net financial debt to EBITDA ratio is 3.59.
• A percentage of (x) EBITDA divided by (y) sales revenue is required to be not less than 8 per cent. For the
financial year 2023 Company’s percentage of (x) EBITDA divided by (y) sales revenue is 8.4 per cent.
• Minimum EBITDA is required to be not less than 7,200 thousand EUR. For the financial year 2023 Company’s
EBITDA is 8,510 thousand EUR.
As of 31 August 2023, 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 (hereinafter “VIVA”), 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
- > 1.2x untill 01/06/2022
3. Equity to assets ratio:
- > 25% untill 31/08/2022
- > 35% from 01/09/2022
2023FY VIVA’s covenants requirements and actual results are presented below:
• Net financial debt and EBITDA ratio is required to be not more than 4. For the financial year 2023
Company‘s Net financial debt and EBITDA ratio 3.7.
• Equity to assets ratio is required to be not less than 0.35. As of 31 August 2023 Company’s equity to assets
ratio is 0.383.
• DSCR is required to be not less than 1.2. For the financial year 2023 Company’s DSCR 2.37.
As of 31 August 2023, the Group and the Company complied with all VIVA covenants requirements.
VILNIAUS BALDAI AB, company code 121922783, Pramones str. 23, Guopstos village, Trakai region,
Lithuania
CONSOLIDATED ANNUAL REPORT FOR THE FY2023 ENDED 31 AUGUST 2023
(all amounts are in EUR thousand unless otherwise stated)
92
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 2023 were: ARI-LUX UAB (the subsidiary), Invalda Privatus Kapitalas AB (ultimate shareholder) and all
companies controlled by Invalda Privatus Kapitalas AB (Bordena UAB, Švytėjimas UAB, Inreal UAB, Inreal Geo UAB,
Geruvis UAB, Panerių konversija UAB). (31 August 2022 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 2023 and 2022 and the balances as of 31
August 2023 and 31 August 2022 were as follows:
a) Sales and purchases of goods and services and year-end balances arising from these sales/purchases
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
2023
Group
Purchases
Sales
Receivables
Payables
UAB “Panerių konversija”
935
224
22
377
UAB „Bordena“
18,934
10,883
2,263
-
UAB „Inreal“
41
-
-
-
UAB „Švytėjimas“
87
3
-
11
UAB “Inreal Geo”
1
-
-
-
19,998
11,110
2,285
388
2023
Company
Purchases
Sales
Receivables
Payables
UAB „ARI-LUX“
752
3
-
272
UAB “Panerių konversija”
935
224
22
377
UAB „Bordena“
18,934
10,883
2,263
-
UAB „Inreal “
41
-
-
-
UAB „Švytėjimas“
87
3
-
11
UAB “Inreal Geo”
1
-
-
-
20,750
11,113
2,285
660
VILNIAUS BALDAI AB, company code 121922783, Pramones str. 23, Guopstos village, Trakai region,
Lithuania
CONSOLIDATED ANNUAL REPORT FOR THE FY2023 ENDED 31 AUGUST 2023
(all amounts are in EUR thousand unless otherwise stated)
93
In 2023 sales to related parties comprised sale of raw materials (EUR 10,883 thousand) that in financial statements
reduces cost of sales, other minor sales.
b) Loans from Invalda Privatus Kapitalas AB to Trenduva UAB,
transferred to the Company after the merger of UAB Trenduva:
2023
2022
At 1 September
-
-
Non-current loans
3,000
3,000
Loan repayments received
-
-
Interest charged
105
105
Interest payable
467
362
At 31 August
3,467
3,362
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
2023
2022
2023
2022
Wages, salaries
587
540
586
539
Social security
12
10
12
10
599
550
598
549
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 2023 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.
VILNIAUS BALDAI AB, company code 121922783, Pramones str. 23, Guopstos village, Trakai region,
Lithuania
CONSOLIDATED ANNUAL REPORT FOR THE FY2023 ENDED 31 AUGUST 2023
(all amounts are in EUR thousand unless otherwise stated)
94
27. Going concern
In 2018, Vilniaus baldai AB and IKEA AG signed a long-term contract, which provides for the minimum production and
sales volume required for business continuity. The contract is valid until the end of the 2025 financial year. In order to
fulfill the obligations stipulated in the contract and to prepare for sustainable further growth, in the 2022 financial year
Vilniaus baldai AB completed the project of the new factory which is located in Guopstos village, Trakai district.
During the 2023 financial year, the new factory made it possible to significantly increase production efficiency, reduce
electricity consumption and, accordingly, improve all the company's financial indicators.
The company has successfully adapted to supply chain disruptions caused by the COVID-19 pandemic, as well as
fluctuations in raw material and energy prices caused by the war in Ukraine, as well as rising interest rates and changes
in consumer behavior. This is confirmed by the company's stable sales, increased profitability, reduced financial
obligations and increased capital.
Carrying out activities in the new (single) factory allowed to fully concentrate on improving the production flow,
increasing efficiency, saving, increasing the efficiency of electricity use, ensuring quality and improving its indicators.
In the last financial year, the new production base made it possible to significantly increase production efficiency and
use of resources, while at the same time saving duplicative costs, which made it possible to offset unfavorable market
trends. In the coming year, we will continue the projects of increasing efficiency, improving quality and saving energy
in order to increase the Company's flexibility and competitiveness.
Last year, the Company also successfully implemented new automated pressing, packaging and internal logistics
technologies, which will have a positive impact on the result in this financial year.
28. Events after the end of the reporting period
There were no other significant events after 31 August 2023 until the date of approval of these financial statements.
General Manager
Jonas Krutinis
24 November 2023
Finance Director
Egidijus Žvaliauskas
24 November 2023
END