Consolidated and Company’s Financial Statements,
Consolidated Annual Report
for the year ended 31 December 2021
T A B L E O F C O N T E N T
APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius
2
Translation note:
This version of the accompanying documents is a translation from the original, which was prepared in the Lithuanian
language. All possible care has been taken to ensure that the translation is an accurate representation of the original.
However, in all matters of interpretation of information, views or opinions, the original language version of the
accompanying documents takes precedence over this translation.
1 FINANCIAL STATEMENTS 3-6
1.1 Statements of comprehensive income 3
1.2 Statements of financial position 4
1.3 Statements of changes in equity 5
1.4 Statements of cash flows 6
2 NOTES TO THE FINANCIAL STATEMENTS 7-43
3 CONSOLIDATED ANNUAL REPORT 44-125
3.1 Consolidated Annual Report 44-56
Renumeration Report 52-53
3.2 Governance Report 57-82
3.3 Social Responsibility Report 83-125
S T A T E M E N T S O F C O M P R E H E N S I V E I N C O M E 1 . 1
APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius
FOR THE YEAR ENDED 31 DECEMBER 2021
(all tabular amounts are in EUR thousands unless otherwise stated)
3
STATEMENTS OF COMPREHENSIVE INCOME
GROUP COMPANY
Year ended
31 December
Year ended
31 December
Note 2021 2020 2021 2020
Revenue from contracts with customers
6
Cost of sales
5
(107 515 )
(98 812 )
(45 272 )
(42 688 )
GROSS PROFIT
Selling (costs)
5
(56 575 )
(52 132 )
(19 597 )
(16 213 )
General and
administrative (expenses)
5
(14 156 )
(12 687 )
(8 353 )
(8 150 )
Other income
6
OPERATING PROFIT 14 278
Finance income
7
Finance (costs)
7
(1 099 )
(1 109 )
( 511 )
( 486 )
PROFIT BEFORE INCOME TAX 13 211
Income tax (expense)
8
(2 315 )
(1 025 )
( 703 )
( 89 )
PROFIT FOR THE YEAR 4 10 896
Other
comprehensive income
TOTAL COMPREHENSIVE INCOME 10 896
Total comprehensive income attributable to:
Owners of the Company
Non
-
controlling interests
--
-
--
-
--
-
--
-
Basic and diluted earnings per share (in EUR) 11 0,20
The notes on pages 7 to 43 are an integral part of these financial statements.
These financial statements were approved by Management Board on 5 April 2022 and signed by:
_____________________________ ___________________________
Rimantas Perveneckas Gabrielius Morkūnas
General Director Chief Financial Officer
S T A T E M E N T S O F F I N A N C I A L P O S I T I O N 1 . 2
APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius
FOR THE YEAR ENDED 31 DECEMBER 2021
(all tabular amounts are in EUR thousands unless otherwise stated)
4
STATEMENTS OF FINANCIAL POSITION
GROUP COMPANY
ASSETS As at 31 December As at 31 December
NON-CURRENT ASSETS Note 2021 2020 2021 2020
Property, plant and equipment
12
Intangible assets
13
Investments in subsidiaries
14
Prepayments
17
Trade and other receivables
20
Right
-
of
-
use assets
26
Other financial assets
18
Total non-current assets 94 946
CURRENT ASSETS
Inventories
15
Other financial assets
18
Prepayments
17
Trade and
other receivables
20
Cash and cash equivalents
21
Total current assets 70 809
Non
-
current assets held for sale
16
TOTAL ASSETS 165 755
EQUITY AND LIABILITIES GROUP COMPANY
EQUITY Note 2021 2020 2021 2020
Ordinary shares
22
Legal reserve
23
Foreign currency translation
reserve
( 53 )
( 53 )
Retained earnings
Total equity 74 378
NON-CURRENT LIABILITIES
Borrowings
24
Tax liabilities
27
Deferred tax liabilities
9
Non
-
current lease liabilities
26
Non
-
current employee benefits
2.18
Total non-current liabilities 55 982
CURRENT LIABILITIES
Borrowings
24
Tax liabilities
27
Current lease liabilities
26
Current income tax liability
Trade and other payables
25
Total current liabilities 35 395
Total liabilities 91 377
TOTAL EQUITY AND LIABILITIES 165 755
The notes on pages 7 to 43 are an integral part of these financial statements.
These financial statements were approved by Management Board on 5 April 2022 and signed by:
_____________________________ ___________________________
Rimantas Perveneckas Gabrielius Morkūnas
General Director Chief Financial Officer
S T A T E M E N T S O F C H A N G E S I N E Q U I T Y 1 . 3
APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius
FOR THE YEAR ENDED 31 DECEMBER 2021
(all tabular amounts are in EUR thousands unless otherwise stated)
5
STATEMENTS OF CHANGES IN EQUITY
GROUP Note
Share
capital
Legal
reserve
Translation
reserve
Retained
earnings
Total
Balance at 1 January 2020 16 035
( 53 )
Comprehensive income
Profit for the year 2020
Total comprehensive income
Total comprehensive incomeTotal comprehensive income
Total comprehensive income
--
-
--
-
--
-
4 936 4 936
4 936
4 936 4 936
4 936
Balance at 31 December 2020 16 035
( 53 )
Comprehensive income
Profit for the year 2021
Total
Total Total
Total
comprehensive income
comprehensive incomecomprehensive income
comprehensive income
--
-
--
-
--
-
10 896 10 896
10 896
10 896 10 896
10 896
Balance at 31 December 2021 16 035
( 53 )
COMPANY Note
Share
capital
Legal
reserve
Retained
earnings
Total
Balance at 1 January 2020 16 035
Comprehensive income
Profit for the year 2020
Total comprehensive income
Total comprehensive incomeTotal comprehensive income
Total comprehensive income
--
-
--
-
4 066 4 066
4 066
4 066 4 066
4 066
Balance at 31 December 2020 16 035
Comprehensive income
Profit for the year 2021
Total comprehensive income
Total comprehensive incomeTotal comprehensive income
Total comprehensive income
--
-
--
-
3 680 3 680
3 680
3 680 3 680
3 680
Balance at 31 December 2021 16 035
The notes on pages 7 to 43 are an integral part of these financial statements.
These financial statements were approved by Management Board on 5 April 2022 and signed by:
_____________________________ ___________________________
Rimantas Perveneckas Gabrielius Morkūnas
General Director Chief Financial Officer
S T A T E M E N T S O F C A S H F L O W 1 . 4
APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius
FOR THE YEAR ENDED 31 DECEMBER 2021
(all tabular amounts are in EUR thousands unless otherwise stated)
6
STATEMENTS OF CASH FLOW
GROUP COMPANY
Year ended 31
December
Year ended 31
December
OPERATING ACTIVITIES Note 2021 2020 2021 2020
Profit (loss) before income taxes
ADJUSTMENTS FOR:
Depreciation and amortization
5
Impairment charge (reversal)
12, 26
( 847 )
( 471 )
Change in
allowances for slow
-
moving inventories
5
( 293 )
( 154 )
(Gain) on disposal of property, plant and equipment
6
( 38 )
( 26 )
( 39 )
( 24 )
Write
-
off of property, plant and equipment
( 7 )
Fair value change of financial
assets
18
( 3 )
( 200 )
( 3 )
( 200 )
Dividend income
6
( 103 )
( 176 )
( 103 )
(4 176 )
Interest expenses
7
Total
CHANGES IN OPERATING ASSETS AND LIABILITIES:
Decrease (increase) in inventories
15
( 182 )
Decrease (increase) in receivables
17, 20
(2 477 )
( 251 )
(1 555 )
(1 730 )
Increase (decrease) in payables
25, 27
(8 259 )
(4 368 )
Cash generated from
operations
Income taxes paid
8, 9
(1 983 )
( 663 )
( 278 )
( 315 )
Interest paid
7
(1 099 )
(1 109 )
( 511 )
( 486 )
Net cash from operating activities 18 841
INVESTING ACTIVITIES
Interest received
Dividends received
6
Loans granted
(12 800 )
(10 723 )
(30 042 )
Loans repayments received
Purchases of property, plant and
equipment and intangible
assets
12, 13 (7 953 )
(5 261 )
(4 147 )
(2 377 )
Proceeds on disposal of property, plant and equipment
Net cash from investing activities
(4 829 )
(4 169 )
(1 851 )
FINANCING ACTIVITIES
Proceeds from borrowings
Repayments of borrowings
24
( 300 )
( 300 )
(3 328 )
(13 784 )
Payment of principal portion of lease liabilities
26
(10 178 )
(12 794 )
(4 034 )
(5 129 )
Net cash from
financing activities
(10 478 )
(13 094 )
(7 302 )
( 986 )
NET INCREASE (DECREASE) IN CASH AND BANK OVERDRAFTS 3 534 19 497 (2 671 ) 15 306
CASH AND BANK OVERDRAFTS:
AT THE BEGINNING OF THE PERIOD
21
AT THE END OF THE PERIOD
21
The notes on pages 7 to 43 are an integral part of these financial statements.
These financial statements were approved by Management Board on 5 April 2022 and signed by:
_____________________________ ___________________________
Rimantas Perveneckas Gabrielius Morkūnas
General Director Chief Financial Officer
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S 2
APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius
FOR THE YEAR ENDED 31 DECEMBER 2021
(all tabular amounts are in EUR thousands unless otherwise stated)
7
1. GENERAL INFORMATION
APB Apranga, (hereinafter “the Company”), was incorporated and commenced its operations in March 1993 in Lithuania . The Company’s
main office is situated in Ukmerges str. 362, Vilnius , Lithuania. The Company has legal form of public limited liability company under the
Law on Companies of Republic of Lithuania . The principal activity of the Company and its subsidiaries (hereinafter “the Group”) is retail
The share capital of APB Apranga is EUR 16,034,668.40 and it is divided into 55,291,960 ordinary registered shares with a nominal value of
EUR 0.29 each, where each share grants to its owner 1 vote (in total 55,291,960 voting shares), all shares are paid in full and give the owners
equal rights. All 55 291 960 ordinary shares of nominal value EUR 0.29 each (ISIN code LT0000102337) that comprise Company‘s share
capital are listed on Baltic equity list of Nasdaq Vilnius Stock Exchange.
At 31 December 2021, the Company had 4 119 shareholders . At 31 December the Company‘s shareholders were:
Number of shares
% of total
ownership
Number of shares
% of total
ownership
Shareholder 2021 2020
34 442 189
62,3
34 442 189
62,3
UAB Minvista
7 264 661
13,1
6 671 838
12,1
Swedbank AS (Estonia) clients
3 665 861
6,6
3 256 899
5,9
Other
9 919 249
17,9
10 921 034
19,8
Total
55 291 960
100,0 55 291 960
100,0
The ultimate parent company whose financial statements are available for public use is UAB MG Grupė . The ultimate controlling
individual of the Group is Mr. D. J. Mockus:
At 31 December 2021 the Group consisted of the Company and the following its wholly owned subsidiaries:
Name Country
Ownership interest in %
31 12 2021
Ownership interest in %
31 12 2020
UAB Apranga LT
Lithuania
100%
100%
UAB Apranga BPB LT
Lithuania
100%
100%
UAB
Apranga PLT
Lithuania
100%
100%
UAB Apranga SLT
Lithuania
100%
100%
UAB Apranga MLT
Lithuania
100%
100%
UAB Apranga HLT
Lithuania
100%
100%
UAB Apranga OLT
Lithuania
100%
100%
UAB Apranga Ecom LT
Lithuania
100%
100%
SIA Apranga
Latvia
100%
100%
SIA Apranga LV
Latvia
100%
100%
SIA Apranga BPB LV
Latvia
100%
100%
SIA Apranga PLV
Latvia
100%
100%
SIA Apranga SLV
Latvia
100%
100%
SIA Apranga MLV
Latvia
100%
100%
SIA Apranga HLV
Latvia
100%
100%
SIA Apranga OLV
Latvia
100%
100%
SIA
Apranga Ecom LV
Latvia
100%
100%
Apranga APB
code 121933274
DARIUS JUOZAS MOCKUS
100,0%
65,3%
MG grupė UAB
code 125459336
34,7%
Minvista UAB
code 110685692
100,0%
MG Investment UAB
code 123249022
62,3%
13,1%
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S 2
APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius
FOR THE YEAR ENDED 31 DECEMBER 2021
(all tabular amounts are in EUR thousands unless otherwise stated)
8
Name Country
Ownership interest in %
31 12 2021
Ownership interest in %
31 12 2020
OU Apranga*
Estonia
100%
100%
OU Apranga Estonia
Estonia
100%
100%
OU Apranga BEE
Estonia
100%
100%
OU Apranga PB Trade
Estonia
100%
100%
OU Apranga ST Retail
Estonia
100%
100%
OU Apranga MDE
Estonia
100%
100%
OU
Apranga HEST
Estonia
100%
100%
OU Apranga Ecom EE
Estonia
100%
100%
* At 31 December 2021 the Company directly owned 14.91% shares and indirectly through its subsidiary owned the rest 85.09% of shares (At 31 December 2020: 14.91% and
85.09%, respectively)
At 31 December the Group‘s number of stores was:
Total number of shops
Shops, where premises are owned by
Group
Country 2021 2020 2021 2020
Lithuania
102
104
5
5
Latvia
46
48
-
-
Estonia
21
27
-
-
Total
169
179
5
5
At 31 December 2021 the Group and the Company employed 1 992 and 732 people respectively (2020: 1 956 and 682 people respectively).
The shareholders of the Company have a statutory right to approve or not these financial statements and to require preparation of a new
set of the financial statements.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The principle accounting policies applied in the preparation of these financial statements are set out below. These policies have been
consistently applied to all the years presented, unless otherwise stated.
The financial statements are presented in Euro and all values are rounded to the nearest thousand, except when otherwise indicated.
The numbers in tables may not coincide due to rounding of particular amounts to EUR thousand. Such rounding differences are not
material to these financial statements.
2.1 BASIS OF PREPARATION
The financial statements have been prepared in accordance with International Financial Reporting Standards as adopted by the
European Union (IFRS).
These financial statements have been prepared under the historical cost convention, except for financial asset at fair value through profit
(loss) or other comprehensive income as described in Note 18.
These financial statements comprise the Group’s consolidated financial statements and the Company’s separate financial statements.
The Group and Company has prepared the financial statements on the basis that it will continue to operate as a going concern.
2.2 CRITICAL ACCOUNTING ESTIMATES AND ASSUMPTIONS
International Financial Reporting Standards require that in preparing the financial statements, management of the Company and the
Group make estimates and assumptions that affect the reported amounts of assets and liabilities and required disclosure at the date of
the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ
from those estimates. There are no areas involving a higher degree of judgement or complexity, or areas where assumptions and
estimates are significant to the financial statements, except for the following:
(a)
(a)(a)
(a)
Impact
ImpactImpact
Impact
of
ofof
of
COVID
COVIDCOVID
COVID-
--
-19
1919
19
and
andand
and
war
warwar
war
in
inin
in
Ukraine
UkraineUkraine
Ukraine
General
GeneralGeneral
General
information
informationinformation
information
on
onon
on
the
thethe
the
impact
impactimpact
impact
of
ofof
of
COVID
COVIDCOVID
COVID-
--
-19
1919
19
on
onon
on
the
thethe
the
Company’s
Company’sCompany’s
Company’s
and
andand
and
Group‘s
Group‘sGroup‘s
Group‘s
operations
operationsoperations
operations
Due to epidemic coronavirus (COVID-19) infection, from 16 December 2020, all the Group’s stores in Lithuania were temporarily closed.
Stores in Lithuania with a separate entrance from outside and a sales area not exceeding 300 square meters had been open since 15
February 2021. All stores with a separate entrance from outside had been open since 15 March 2021. All Group’s stores have been reopened
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S 2
APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius
FOR THE YEAR ENDED 31 DECEMBER 2021
(all tabular amounts are in EUR thousands unless otherwise stated)
9
in Lithuania from 19 April 2021, however, stores operating in shopping malls were not allowed to work on weekends, unless they had
separate entrance from outside. Eventually, all Group’s stores have been open in Lithuania as of 29 May 2021. In Latvia, stores were
temporarily closed from 19 December 2020. Stores with a separate entrance from outside and an area not exceeding 7,000 square meters
have been open in Latvia from 7 April 2021. Group‘s stores that operate in shopping malls and have separate entrance from outside were
reopened as of 22 May 2021. Eventually, all Group’s stores have been open in Latvia as of 3 June 2021. However, due to the aggravation of
the coronavirus situation, from 14 October 2021 the operation of stores in shopping malls on weekends were banned in Latvia, and from
21 October 2021 all Group’s stores in Latvia were temporarily closed. All Group’s stores have been reopened in Latvia from 15 November
2021, however, stores operating in shopping malls were not allowed to work on weekends, unless they had separate entrance from
outside. All Group’s stores were allowed to also work on weekends as of 25 December 2021. In Estonia, all Group’s stores were temporarily
closed from 11 March 2021, and from 6 March 2021 to 11 March 2021 stores were not allowed to work on weekends. All Group‘s stores have
been reopened in Estonia from 3 May 2021. These temporary store closures had a significant impact on the Group's generated turnover,
earned profit and, accordingly, financial performance.
Going
GoingGoing
Going
concern
concernconcern
concern
As a result of the above-mentioned situation caused by COVID-19, the Company‘s and the Group‘s sales were below year 2019 level,
however, increased by 15% and 12% respectively comparing to year 2020. Company‘s profit decreased by EUR 386 thousand, while Group‘s
profit improved by EUR 5 960 thousand comparing with previous year. The Group took actions to manage the risks by expanding online
trading, negotiated rent discounts, applied for subsidies, increased effectiveness for inventories management, and has borrowing
facilities contracted but undrawn (Note 24). In 2021, the Company did not pay dividends to shareholders. Current liquidity ratio of the
Company and the Group (currect assets / current liabilities) as at 31 December 2021 was 2.7 and 2.0 respectively, quick ratio (current assets-
inventories) / current liabilities) was equal to 1.7 and 1.0 respectively. The Company’s management forecasts positive result for the
Company and the Group next year. The management of the Group concluded that current situation does not have significant impact on
the Group‘s and Company’s ability to continue as a going concern.
Assessment
AssessmentAssessment
Assessment
of
ofof
of
the
thethe
the
impact
impactimpact
impact
of
ofof
of
the
thethe
the
Russian
RussianRussian
Russian
mili
milimili
military
tarytary
tary
invasion
invasioninvasion
invasion
of
ofof
of
the
thethe
the
Republic
RepublicRepublic
Republic
of
ofof
of
Ukraine
UkraineUkraine
Ukraine
As mentioned in Subsequent events (Note 30), the EU and rest of the world, including global bodies, are taking measures to respond to
the military aggression of the Russian Federation against the Republic of Ukraine. The management of the Company has assessed that
these restrictive measures will not have a significant impact on the Company’s and the Group‘s ability to continue as a going concern,
since the restrictive measures imposed are currently not having an adverse effect on the Company and the Group.
In addition, the management has concluded that these events are non-adjusting subsequent events and therefore their potential impact
was not considered when making estimates and assumptions about the recoverable amount of property, plant and equipment, assets
measured at fair value and inventory write-down to net realizable value as at 31 December 2021, as disclosed below. However, this matter
might have a significant impact on these estimates in the next financial period. At the date of authorisation of these financial statements,
the management is not yet able to reasonably quantify the extent of potential changes in accounting estimates in 2022 due to the rapidly
changing situation, great level of uncertainty and the possible overall negative economic effect. In any case, the Company's management
is ready to respond promptly to the changing situation by making the necessary decisions to ensure the stability of operations.
(
((
(b
bb
b)
))
)
Revenue
RevenueRevenue
Revenue
recognition
recognitionrecognition
recognition
Management judgment is needed to determine whether revenue for certain sales transactions should be recorded on a gross basis or
on a net basis. Revenue is recognised on a gross basis where the role of the Group/Company is that of principal in a transaction. The gross
basis represents sales price after discounts, with any related costs charged to expenses.
The Group/Company has concluded that it is the principal in its revenue arrangements including all online sales, because:
- The entity controls the goods or services before transferring them to the customer;
- The entity is primarily responsible for the supply of goods and services and bears risk of non-performance, all custumers returns are
accepted into stores/warehouse;
- The entity has latitude in establishing price either directly or indirectly.
(
((
(c
cc
c)
))
)
Estimates
EstimatesEstimates
Estimates
concerning
concerningconcerning
concerning
useful
usefuluseful
useful
lives
liveslives
lives
of
ofof
of
tangible
tangibletangible
tangible
and
andand
and
intangible
intangibleintangible
intangible
assets
assetsassets
assets
The useful lives of tangible and intangible assets are determined by management at the time the asset is acquired and reviewed on an
annual basis for appropriateness. The lives are based on historical experiences with similar assets as well as anticipation of future events,
which may impact their useful life.
(
((
(d
dd
d)
))
)
Impairment
ImpairmentImpairment
Impairment
of
ofof
of
property,
property,property,
property,
plant
plantplant
plant
and
andand
and
equipment
equipmentequipment
equipment
and
andand
and
right
rightright
right-
--
-of
ofof
of-
--
-use
useuse
use
assets
assetsassets
assets
Each shop is considered to represent a separate cash generating unit for impairment test. Cash generating units, which had indications
of impairment loss, i.e. suffered operational loss, are tested. The Group and the Company has tested its leasehold improvements, right-
of-use assets and other property, plant and equipment, whether those posess impairment loss, in accordance with the accounting
policies stated in Note 2.9. The Group and the Company has used “value in use” calculations to test for impairment as information on fair
value less costs to sell was not available. These calculations require the use of estimates as described in Note 12.
The management reviewed the main assumptions used for the measurement of the recoverable value of property, plant and equipment
and right-of-use assets. Since all restrictions related to operations in physical stores were lifted, COVID-19 has no material impact on the
assumptions made for future cash flows. Results of impairment assessment are disclosed in Note 12 and Note 26.
(
((
(e
ee
e)
))
)
Inventory
InventoryInventory
Inventory
write
writewrite
write-
--
-down
downdown
down
to
toto
to
net
netnet
net
realizable
realizablerealizable
realizable
value
valuevalue
value
In accordance with the accounting policies stated in Note 2.12 the Group and the Company recognise inventory at the lower of cost and
net realizable value. The Group and the Company evaluates whether the value of inventory recognised at cost is not lower that its net
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S 2
APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius
FOR THE YEAR ENDED 31 DECEMBER 2021
(all tabular amounts are in EUR thousands unless otherwise stated)
10
realisibale value based on the historical data and actual
subsequent results of inventory items sold below costs. Net realisable values are
disclosed in Note 15.
Management has assessed the level of inventories and determined that the book value of inventories as of 31 December 2021 does not
exceed the net realisable value. Since all restrictions related to operations in physical stores were lifted, COVID-19 has no material impact
on the assumptions made for net realisable value. Results of inventories write-down to net realizable value are disclosed in Note 15.
(
((
(f
ff
f)
))
)
Determining
DeterminingDetermining
Determining
the
thethe
the
lease
leaselease
lease
term
termterm
term
of
ofof
of
contracts
contractscontracts
contracts
with
withwith
with
renewal
renewalrenewal
renewal
and
andand
and
termination
terminationtermination
termination
options
optionsoptions
options
–
––
–
Company/Group
Company/GroupCompany/Group
Company/Group
as
asas
as
lessee
lesseelessee
lessee
The Company/Group determines the lease term as the non-cancellable term of the lease, together with any periods covered by an option
to extend the lease if it is reasonably certain to be exercised, or any periods covered by an option to terminate the lease, if it is reasonably
certain not to be exercised.
The Company/Group has lease contracts that include extension and termination options. The Company/Group applies judgement in
evaluating whether it is reasonably certain whether or not to exercise the option to renew or terminate the lease. That is, it considers all
relevant factors that create an economic incentive for it to exercise either the renewal or termination. After the commencement date,
the Company/Group reassesses the lease term if there is a significant event or change in circumstances that is within its control and
affects its ability to exercise or not to exercise the option to renew or to terminate (e.g., construction of significant leasehold improvements
or significant customization to the leased asset).
(
((
(g
gg
g)
))
)
Leases
LeasesLeases
Leases
-
--
-
Estimating
EstimatingEstimating
Estimating
the
thethe
the
incremental
incrementalincremental
incremental
borrowing
borrowingborrowing
borrowing
rate
raterate
rate
The Company/Group cannot readily determine the interest rate implicit in the lease, therefore, it uses its incremental borrowing rate (IBR)
to measure lease liabilities. The IBR is the rate of interest that the Company/Group would have to pay to borrow over a similar term, and
with a similar security, the funds necessary to obtain an asset of a similar value to the right-of-use asset in a similar economic environment.
The IBR therefore reflects what the Company/Group ‘would have to pay’, which requires estimation when no observable rates are
available (such as for subsidiaries that do not enter into financing transactions) or when they need to be adjusted to reflect the terms and
conditions of the lease.
The Company/Group estimates the IBR using observable inputs (such as market interest rates) when available and is required to make
certain entity-specific or country-specific adjustments. IBR used in 2021 varies from 1.0 to 2.5 per cent (from 1.0 to 2.5 per cent in 2020).
(h)
(h)(h)
(h)
O
OO
Options
ptionsptions
ptions
granted
grantedgranted
granted
The Company/Group has options granted for non-financial assets and lease rights, which are not recognized as they do not meet the
criteria of a financial instrument. Based on historical information and numerous extentions of the cooperation agreements and
intensions of cooperation, the management of the Group believes that the agreement parties will not use any above options. In the
unlikely event of happening, the selling price would be approximate fair value of the items/goods. For more details, refer to Note 29.
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S 2
APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius
FOR THE YEAR ENDED 31 DECEMBER 2021
(all tabular amounts are in EUR thousands unless otherwise stated)
11
2.3 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 2021.
(a)
(a)(a)
(a)
The
TheThe
The
following
followingfollowing
following
new
newnew
new
standards,
standards,standards,
standards,
ame
ameame
amendments
ndmentsndments
ndments
and
andand
and
interpretations
interpretationsinterpretations
interpretations
are
areare
are
mandatory
mandatorymandatory
mandatory
for
forfor
for
accounting
accountingaccounting
accounting
periods
periodsperiods
periods
beginning
beginningbeginning
beginning
on
onon
on
or
oror
or
after
afterafter
after
1
11
1
January
JanuaryJanuary
January
20
2020
202
22
21
11
1:
::
:
Interest
InterestInterest
Interest
Rate
RateRate
Rate
Benchmark
BenchmarkBenchmark
Benchmark
Reform
ReformReform
Reform
–
––
–
Phase
PhasePhase
Phase
2
22
2
–
––
–
IFRS
IFRSIFRS
IFRS
9,
9,9,
9,
IAS
IASIAS
IAS
39,
39,39,
39,
IFRS
IFRSIFRS
IFRS
7,
7,7,
7,
IFRS
IFRSIFRS
IFRS
4
44
4
and
andand
and
IFRS
IFRSIFRS
IFRS
16
1616
16
(Amendments)
(Amendments)(Amendments)
(Amendments)
In August 2020, the IASB published Interest Rate Benchmark Reform – Phase 2, Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and
IFRS 16, completing its work in response to IBOR reform. The amendments provide temporary reliefs which address the financial
reporting effects when an interbank offered rate (IBOR) is replaced with an alternative nearly risk-free interest rate (RFR). In
particular, the amendments provide for a practical expedient when accounting for changes in the basis for determining the
contractual cash flows of financial assets and liabilities, to require the effective interest rate to be adjusted, equivalent to a
movement in a market rate of interest. Also, the amendments introduce reliefs from discontinuing hedge relationships including a
temporary relief from having to meet the separately identifiable requirement when an RFR instrument is designated as a hedge of
a risk component. There are also amendments to IFRS 7 Financial Instruments: Disclosures to enable users of financial statements
to understand the effect of interest rate benchmark reform on an entity’s financial instruments and risk management strategy.
While application is retrospective, an entity is not required to restate prior periods. Management concluded that the Amendments
had no impact for financial statements.
IFRS
IFRSIFRS
IFRS
16
1616
16
Leases
LeasesLeases
Leases-
--
-C
CC
C vid
vidvid
vid
19
1919
19
Related
RelatedRelated
Related
Rent
RentRent
Rent
Concessions
ConcessionsConcessions
Concessions
beyond
beyondbeyond
beyond
30
3030
30
June
JuneJune
June
2021
20212021
2021
(Amendment)
(Amendment)(Amendment)
(Amendment)
The Amendment applies to annual reporting periods beginning on or after 1 April 2021, with earlier application permitted, including
in financial statements not yet authorized for issue at the date the amendment is issued. In March 2021, the Board amended the
conditions of the practical expedient in IFRS 16 that provides relief to lessees from applying the IFRS 16 guidance on lease
modifications to rent concessions arising as a direct consequence of the covid-19 pandemic. Following the amendment, the
practical expedient now applies to rent concessions for which any reduction in lease payments affects only payments originally due
on or before 30 June 2022, provided the other conditions for applying the practical expedient are met. The Group and the Company
early adopted this amendment since 1 January 2021 as allowed (Note 26).
(b)
(b)(b)
(b)
The
TheThe
The
following
followingfollowing
following
new
newnew
new
standards,
standards,standards,
standards,
amendments
amendmentsamendments
amendments
to
toto
to
existing
existingexisting
existing
standards
standardsstandards
standards
and
andand
and
interpretations
interpretationsinterpretations
interpretations
have
havehave
have
been
beenbeen
been
issued
issuedissued
issued
and
andand
and
adopted
adoptedadopted
adopted
by
byby
by
the
thethe
the
European
EuropeanEuropean
European
Union
UnionUnion
Union
or
oror
or
are
areare
are
in
inin
in
the
thethe
the
process
processprocess
process
of
ofof
of
adoption
adoptionadoption
adoption
by
byby
by
the
thethe
the
European
EuropeanEuropean
European
Union
UnionUnion
Union
but
butbut
but
are
areare
are
not
notnot
not
yet
yetyet
yet
effective
effectiveeffective
effective
and
andand
and
have
havehave
have
not
notnot
not
been
beenbeen
been
early
earlyearly
early
adopted
adoptedadopted
adopted
by
byby
by
the
thethe
the
Group
GroupGroup
Group
and
andand
and
the
thethe
the
Company:
Company:Company:
Company:
Amendment
AmendmentAmendment
Amendment
in
inin
in
IFRS
IFRSIFRS
IFRS
10
1010
10
Consolidated
ConsolidatedConsolidated
Consolidated
Financial
FinancialFinancial
Financial
Statements
StatementsStatements
Statements
and
andand
and
IAS
IASIAS
IAS
28
2828
28
Investments
InvestmentsInvestments
Investments
in
inin
in
Associates
AssociatesAssociates
Associates
and
andand
and
Joint
JointJoint
Joint
Ventures:
Ventures:Ventures:
Ventures:
Sale
SaleSale
Sale
or
oror
or
Contribution
ContributionContribution
Contribution
of
ofof
of
Assets
AssetsAssets
Assets
between
betweenbetween
between
an
anan
an
Investor
InvestorInvestor
Investor
and
andand
and
its
itsits
its
Associate
AssociateAssociate
Associate
or
oror
or
Joint
JointJoint
Joint
Venture
VentureVenture
Venture
The amendments address an acknowledged inconsistency between the requirements in IFRS 10 and those in IAS 28, in dealing
with the sale or contribution of assets between an investor and its associate or joint venture. The main consequence of the
amendments is that a full gain or loss is recognized when a transaction involves a business (whether it is housed in a subsidiary or
not). A partial gain or loss is recognized when a transaction involves assets that do not constitute a business, even if these assets are
housed in a subsidiary. In December 2015 the IASB postponed the effective date of this amendment indefinitely pending the
outcome of its research project on the equity method of accounting. The amendments have not yet been endorsed by the EU. The
Company and the Group do not have investments in associates and joint ventures.
IAS
IASIAS
IAS
1
11
1
Presentation
PresentationPresentation
Presentation
of
ofof
of
Financial
FinancialFinancial
Financial
Statements:
Statements:Statements:
Statements:
Classification
ClassificationClassification
Classification
of
ofof
of
Liabilities
LiabilitiesLiabilities
Liabilities
as
asas
as
Current
CurrentCurrent
Current
or
oror
or
Non
NonNon
Non-
--
-current
currentcurrent
current
(Amendments)
(Amendments)(Amendments)
(Amendments)
The amendments are effective for annual reporting periods beginning on or after January 1, 2022 with earlier application permitted.
However, in response to the covid-19 pandemic, the IASB has deferred the effective date by one year, i.e. 1 January 2023, to provide
companies with more time to implement any classification changes resulting from the amendments. 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. These Amendments have not yet been endorsed by the EU. The Company and the Group has not yet evaluated the
impact of the implementation of these amendments.
IFRS
IFRSIFRS
IFRS
3
33
3
Business
BusinessBusiness
Business
Combinations;
Combinations;Combinations;
Combinations;
IAS
IASIAS
IAS
16
1616
16
Property,
Property,Property,
Property,
Plant
PlantPlant
Plant
and
andand
and
Equipment;
Equipment;Equipment;
Equipment;
IAS
IASIAS
IAS
37
3737
37
Prov
ProvProv
Provisions,
isions,isions,
isions,
Contingent
ContingentContingent
Contingent
Liabilities
LiabilitiesLiabilities
Liabilities
and
andand
and
Contingent
ContingentContingent
Contingent
Assets
AssetsAssets
Assets
as
asas
as
well
wellwell
well
as
asas
as
Annual
AnnualAnnual
Annual
Improvements
ImprovementsImprovements
Improvements
2018
20182018
2018-
--
-2020
20202020
2020
(Amendments)
(Amendments)(Amendments)
(Amendments)
The amendments are effective for annual periods beginning on or after 1 January 2022 with earlier application permitted. The IASB
has issued narrow-scope amendments to the IFRS Standards as follows:
IFRS
IFRSIFRS
IFRS
3
33
3
Business
BusinessBusiness
Business
Combinations
CombinationsCombinations
Combinations
(Amendments)
(Amendments)(Amendments)
(Amendments) update a reference in IFRS 3 to the Conceptual Framework for Financial
Reporting without changing the accounting requirements for business combinations.
IAS
IASIAS
IAS
16
1616
16
Property,
Property,Property,
Property,
Plant
PlantPlant
Plant
and
andand
and
Equipment
EquipmentEquipment
Equipment
(Amendments)
(Amendments)(Amendments)
(Amendments) prohibit a company from deducting from the cost of property, plant and
equipment amounts received from selling items produced while the company is preparing the asset for its intended use.
Instead, a company will recognise such sales proceeds and related cost in profit or loss.
IAS
IASIAS
IAS
37
3737
37
Provisions,
Provisions,Provisions,
Provisions,
Contingent
ContingentContingent
Contingent
Liabilities
LiabilitiesLiabilities
Liabilities
and
andand
and
Contingent
ContingentContingent
Contingent
Assets
AssetsAssets
Assets
(Amendments)
(Amendments)(Amendments)
(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
AnnualAnnual
Annual
Improvements
ImprovementsImprovements
Improvements
2018
20182018
2018-
--
-2020
20202020
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 have not yet been endorsed by the EU. The Company and the Group has not yet evaluated the impact of the
implementation of these amendments.
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S 2
APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius
FOR THE YEAR ENDED 31 DECEMBER 2021
(all tabular amounts are in EUR thousands unless otherwise stated)
12
IAS
IASIAS
IAS
1
11
1
Presentation
PresentationPresentation
Presentation
of
ofof
of
Financial
FinancialFinancial
Financial
Statements
StatementsStatements
Statements
and
andand
and
IFRS
IFRSIFRS
IFRS
Practice
PracticePractice
Practice
Statement
StatementStatement
Statement
2:
2:2:
2:
Discl
DisclDiscl
Disclosure
osureosure
osure
of
ofof
of
Accounting
AccountingAccounting
Accounting
policies
policiespolicies
policies
(Amendments)
(Amendments)(Amendments)
(Amendments)
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. Company and the Group has not yet evaluated
the impact of the implementation of these amendments.
I
II
IAS
ASAS
AS
8
88
8
Accounting
AccountingAccounting
Accounting
policies,
policies,policies,
policies,
Changes
ChangesChanges
Changes
in
inin
in
Accounting
AccountingAccounting
Accounting
Estimates
EstimatesEstimates
Estimates
and
andand
and
Errors:
Errors:Errors:
Errors:
Definition
DefinitionDefinition
Definition
of
ofof
of
Accounting
AccountingAccounting
Accounting
Estimates
EstimatesEstimates
Estimates
(Amendments)
(Amendments)(Amendments)
(Amendments)
The amendments become effective for annual reporting periods beginning on or after January 1, 2023 with earlier application
permitted and apply to changes in accounting policies and changes in accounting estimates that occur on or after the start of that
period. The amendments 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. Company and the Group has not yet evaluated the
impact of the implementation of these amendments.
IAS
IASIAS
IAS
12
1212
12
Income
IncomeIncome
Income
taxes:
taxes:taxes:
taxes:
Deferred
DeferredDeferred
Deferred
Tax
TaxTax
Tax
related
relatedrelated
related
to
toto
to
Assets
AssetsAssets
Assets
and
andand
and
Liabilities
LiabilitiesLiabilities
Liabilities
arising
arisingarising
arising
from
fromfrom
from
a
aa
a
Single
SingleSingle
Single
Transaction
TransactionTransaction
Transaction
(Amendments)
(Amendments)(Amendments)
(Amendments)
The amendments are effective for annual periods beginning on or after January 1, 2023 with earlier application permitted. In May
2021, the Board issued amendments to IAS 12, which narrow the scope of the initial recognition exception under IAS 12 and specify
how companies should account for deferred tax on transactions such as leases and decommissioning obligations. Under the
amendments, the initial recognition exception does not apply to transactions that, on initial recognition, give rise to equal taxable
and deductible temporary differences. It only applies if the recognition of a lease asset and lease liability (or decommissioning
liability and decommissioning asset component) give rise to taxable and deductible temporary differences that are not equal. The
Amendments have not yet been endorsed by the EU. Company and the Group has not yet evaluated the impact of the
implementation of these amendments.
The Group plans to adopt the above mentioned standards and interpretations on their effectiveness date provided they are endorsed by
the EU.
2.4 CONSOLIDATION
The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company (its
subsidiaries). The Group controls an entity when the group 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 existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether
the Group controls another entity.
The Group uses the acquisition method of accounting to account for business combinations. The consideration transferred for the
acquisition of a subsidiary is the fair values of the assets transferred, the liabilities incurred and the equity interests issued by the Group.
The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement.
Acquisition-related costs are expensed as incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed in a
business combination are measured initially at their fair values at the acquisition date. On an acquisition-by-acquisition basis, the group
recognises any non-controlling interest in the acquiree either at fair value or at the non-controlling interest’s proportionate share of the
acquiree’s net assets.
The excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and the acquisition-date fair value
of any previous equity interest in the acquiree over the fair value of the group’s share of the identifiable net assets acquired is recorded
as goodwill. If this is less than the fair value of the net assets of the subsidiary acquired in the case of a bargain purchase, the difference
is recognised directly in the statement of comprehensive income.
Inter-company transactions, balances and unrealised gains on transactions between Group companies are eliminated. Unrealised losses
are also eliminated but considered an impairment indicator of the asset transferred. Accounting policies of subsidiaries have been
changed where necessary to ensure consistency with the policies adopted by the Group.
2.5 SEGMENT REPORTING
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The
chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segments, has
been identified as General Director and other 6 Directors who make strategic decisions.
2.6 FOREIGN CURRENCY TRANSLATION
(a)
(a)(a)
(a)
Functional
FunctionalFunctional
Functional
and
andand
and
presentation
presentationpresentation
presentation
currency
currencycurrency
currency
The individual financial statements of each group entity are presented in the currency of the primary economic environment in which
the entity and subsidaries operates (its functional currency). For the purpose of the consolidated financial statements, the results and
financial position of each entity are expressed in euro, which is the functional currency of the Company and the Group, and the
presentation currency for the consolidated financial statements.
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S 2
APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius
FOR THE YEAR ENDED 31 DECEMBER 2021
(all tabular amounts are in EUR thousands unless otherwise stated)
13
(b)
(b)(b)
(b)
Transactions
TransactionsTransactions
Transactions
and
andand
and
balances
balancesbalances
balances
In preparing the financial statements of the individual entities, transactions in currencies other than the entity’s functional currency
(foreign currencies) are recorded at the rates of exchange prevailing on the dates of the transactions. At the end of the reporting period,
monetary items denominated in foreign currencies are retranslated at the rates prevailing at the end of the reporting period. Exchange
differences arising on the settlements of monetary items, and on the retranslation of monetary items, are included in the statement of
comprehensive income for the period.
(c)
(c)(c)
(c)
Group
GroupGroup
Group
companies
companiescompanies
companies
For the purpose of presenting consolidated financial statements, the assets and liabilities of the Group’s foreign operations (including
comparatives) are expressed in euro using exchange rates prevailing at the end of the reporting period. Income and expense items
(including comparatives) are translated at the average exchange rates for the period, unless exchange rates fluctuated significantly
during that period, in which case the exchange rates at the dates of the transactions are used. Exchange differences arising, if any, are
classified as other comprehensive income and transferred to the Group’s translation reserve. Such translation differences are recognised
in profit or loss in the period in which the foreign operation is disposed of.
2.7 INTANGIBLE ASSETS
Intangible assets expected to provide economic benefit to the Company and the Group in future periods are measured at cost less
subsequent accumulated amortisation and impairment losses.
Amortisation is calculated on a straight-line basis to write off the cost of each asset over the estimated useful life as follows:
Software
3
-
5
years
Licences
and
rights
acquired
5
-
9
years
Amortisation is accounted for as selling expense.
The Group and the Company have no intangible asset with indefinite useful life.
2.8 PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment (hereinafter “PPE”) is stated at historical cost, less accumulated depreciation and impairment losses.
Leasehold improvements, that meet definition of PPE, are capitalised in the statement of financial position and depratiated over the lease
term.
Compensation received from shopping malls in connection with the setting up of shops is related to the compensation of PPE, not to
rent fees, and consequently the cost of acquisition of property, plant and equipment is reduced. Compensations that do meet the
definition of lease incentive, are accounted for under IFRS 16, see Note 2.17.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable
that future economic benefits associated with the item will flow to the Company and the Group and the cost of the item can be measured
reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to the statement of
comprehensive income during the financial period in which they are incurred.
Depreciation is charged so as to write-off the cost of PPE to their residual value over their estimated useful lives, using the straight-line
method, on the following basis:
Buildings
15
-
50
years
Plant
and
equipment
5
-
20
years
Leasehold
improvements
4
-
10
years
Other
PPE
3
-
6
years
All depreciation of property, plant and equipment is recognised in the statement of comprehensive income and accounted for as selling
expenses.
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of the reporting period.
Where the carrying amount of an asset is greater than its estimated recoverable amount, it is written down immediately to its recoverable
amount (Note 2.9). Impairment of PPE as well as reversals of impairment during the year are included into selling costs caption in the
statement of comprehensive income.
The gain or loss arising on the disposal or retirement of an asset is determined as the difference between the sales proceeds and the
carrying amount of the asset and is recognized in other income caption in the statement of comprehensive income.
The Group and the Company capitalise borrowing costs that relate to assets that take more than 12 months to get ready for use. Otherwise
borrowing costs are recognised as expenses of the current reporting period.
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S 2
APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius
FOR THE YEAR ENDED 31 DECEMBER 2021
(all tabular amounts are in EUR thousands unless otherwise stated)
14
2.9 IMPAIRMENT OF NON-FINANCIAL ASSETS
At the end of the reporting period, the Company and the Group reviews the carrying amounts of its tangible and intangible non current
assets and right-of-use assets to determine whether there is any indication (e.g. loss of cash-generating unit) that those assets have
suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the
extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the Company
and Group estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the greater of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows
are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money
and the risks specific to the asset.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of
the asset (cash-generating unit) is reduced to its recoverable amount. Impairment losses are recognized as an expense immediately
(under selling costs).
Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating unit) is increased to the revised
estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have
been determined had no impairment loss been recognized for the asset (cash-generating unit) in prior years. A reversal of an impairment
loss is recognized as income immediately.
2.10 INVESTMENTS IN SUBSIDIARIES
In the Company’s separate financial statements investments in subsidiaries are accounted for at cost less impairment. Cost also includes
direct attributable costs of investment.
Dividends received are credited to the Company’s statement of comprehensive income.
2.11 NON-CURRENT ASSETS HELD FOR SALE
Non-current assets are classified as held for sale if their carrying amount will be recovered through a disposal rather than through
continuing use. This condition is regarded as met only when the disposal is highly probable and the asset is available for immediate
disposal sale in its present condition.
Non-current assets classified as held for sale are measured at the lower of the carrying value of assets and fair value less costs to sell.
2.12 INVENTORIES
Inventories are stated at the lower of cost and net realizable value. Cost is determined by the first-in, first-out method. Net realizable value
represents the estimated selling price less all estimated costs to be incurred in selling. Unrealisable inventory has been fully written-off.
Impairment losses are recognized as an expense immediately (under cost of sales caption).
2.13 FINANCIAL ASSETS AND LIABILITIES
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of
another entity.
Financial assets
Initial recognition and measurement
Financial assets are classified, at initial recognition, as subsequently measured at amortised cost, fair value through other comprehensive
income (OCI), and fair value through profit or loss.
The classification of financial assets at initial recognition depends on the financial asset’s contractual cash flow characteristics and the
Group’s/Company’s business model for managing them. With the exception of trade receivables that do not contain a significant
financing component, the Group/Company initially measures a financial asset at its fair value plus, in the case of a financial asset not at
fair value through profit or loss, transaction costs. Trade receivables that do not contain a significant financing component are measured
at the transaction price determined under IFRS 15.
In order for a financial asset to be classified and measured at amortised cost or fair value through OCI, it needs to give rise to cash flows
that are ‘solely payments of principal and interest (SPPI)’ on the principal amount outstanding. This assessment is referred to as the SPPI
test and is performed at an instrument level.
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S 2
APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius
FOR THE YEAR ENDED 31 DECEMBER 2021
(all tabular amounts are in EUR thousands unless otherwise stated)
15
The Group’s/Company’s business model for managing financial assets refers to how the Group/Company manages its financial assets in
order to generate cash flows. The business model determines whether cash flows will result from collecting contractual cash flows, selling
the financial assets, or both.
A regular way purchases or sales of financial assets are recognised on the trade date, i.e., the date that the Group/Company commits to
purchase or sell the asset.
Subsequent measurement
After initial recognition, the Group/Company measures a financial asset at:
a) Amortised cost (debt instruments);
b) Fair value through other comprehensive income (OCI) with recycling of cumulative gains and losses upon derecognition (debt
instruments), see Note 18;
c) Fair value through other comprehensive income (OCI) with no recycling of cumulative gains and losses upon derecognition (equity
instruments). The Group/Company did not have such items as at 31 December 2021 and 2020;
d) Fair value through profit or loss, see Note 18.
Financial assets at amortised cost (debt instruments)
The Group/Company measures financial assets at amortised cost if both of the following conditions are met:
i) The financial asset is held within a business model with the objective to hold financial assets in order to collect contractual cash flows;
and
ii) The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest
on the principal amount outstanding.
Financial assets at amortised cost are subsequently measured using the effective interest (EIR) method and are subject to impairment.
Gains and losses are recognised in the statement of comprehensive income when the asset is derecognised, modified or impaired.
The Group’s/Company’s financial assets at amortised cost includes trade, other current and non-current receivables and loans granted.
Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss include financial assets held for trading, financial assets designated upon initial
recognition at fair value through profit or loss, or financial assets mandatorily required to be measured at fair value. Financial assets are
classified as held for trading if they are acquired for the purpose of selling or repurchasing in the near term. Financial assets with cash
flows that are not solely payments of principal and interest are classified and measured at fair value through profit or loss, irrespective of
the business model. Notwithstanding the criteria for debt instruments to be classified at amortised cost or at fair value through OCI, as
described above, debt instruments may be designated at fair value through profit or loss on initial recognition if doing so eliminates, or
significantly reduces, an accounting mismatch. Financial assets at fair value through profit or loss are carried in the statement of financial
position at fair value with net changes in fair value recognised in other income caption in the statement of comprehensive income.
The Group/Company in order to make efficient use of the available free cash, in 2018 acquired collective investment scheme (fund units),
which fair value (level 3) as at 31 December 2021 is EUR 2 400 thousand (Note 18).
Financial assets at fair value through OCI (debt instruments)
The Group/Company measures debt instruments at fair value through OCI if both of the following conditions are met:
• The financial asset is held within a business model with the objective of both holding to collect contractual cash flows and selling
And
• The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest
on the principal amount outstanding.
After initial recognition, financial assets at fair value through OCI are carried in the statement of financial position at fair value with net
changes in fair value recognised in OCI. For debt instruments at fair value through OCI, interest income, foreign exchange revaluation
and impairment losses or reversals are recognised in profit or loss and computed in the same manner as for financial assets measured at
amortised cost. The remaining fair value changes are recognised in OCI. Upon derecognition, the cumulative fair value change recognised
in OCI is recycled to profit or loss.
The Group/Company included these assets under other non-current financial assets, unless the maturity term is shorter than 12 months
or management inteds to realize the asset within 12 months from the end of the reporting period.
Expected credit losses for debt instruments measured at FVOCI do not reduce the carrying amount of these financial assets in the
statement of financial position, which remain at fair value. Instead, an amount equal to the allowance that would arise if the assets were
measured at amortised cost is recognised in OCI as an accumulated impairment amount, with a corresponding charge to profit or loss.
The accumulated loss recognised in OCI is recycled to the profit and loss upon derecognition of the assets. According to management’s
assessment this asset was not impaired as at 31 December 2020 and 2021.
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S 2
APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius
FOR THE YEAR ENDED 31 DECEMBER 2021
(all tabular amounts are in EUR thousands unless otherwise stated)
16
Impairment of financial assets
Following IFRS 9, in common case scenario, the Group/Company recognises an allowance for expected credit losses (ECLs) for all debt
instruments not held at fair value through profit or loss. ECLs are based on the difference between the contractual cash flows due in
accordance with the contract and all the cash flows that the Company expects to receive, discounted at an approximation of the original
effective interest rate. ECLs are recognised in two stages. For credit exposures for which there has not been a significant increase in credit
risk since initial recognition, ECLs are provided for credit losses that result from default events that are possible within the next 12-months
(a 12-month ECL). For those credit exposures for which there has been a significant increase in credit risk since initial recognition, a loss
allowance is required for credit losses expected over the remaining life of the exposure, irrespective of the timing of the default (a lifetime
ECL).
At the end of every reporting period it is assessed whether credit risk significantly increased from initial recognition taking into account
change in probability of default during the maturity of the instrument. During this process the Group/Company summarizes debt
instruments into stages 1, 2 and 3:
• Stage 1: on initial recognition the Group/Company recognizes a 12-month ECL. Stage 1 debt instruments include instruments which
credit risk improved and which were transferred back from Stage 2.
• Stage 2: When a loan has shown a significant increase in credit risk since origination, the Group/Company records an allowance for the
lifetime ECL. Stage 2 debt instruments include instruments which credit risk improved and which were transferred back from Stage 3.
Group/Company considers that significant increase in credit risk when debt is overdue more than 30 days or when it is visible from
financial information that debtor is experiencing financial difficulties.
• Stage 3: For loans considered credit-impaired, the Group/Company recognises the lifetime expected credit losses for these loans. The
method is similar to that for Stage 2 assets, with the probability of default set at 100%. Group/Company considers financial assets credit
impaired when contractual payments are 90 days past due.
In 2020 and 2021 there were no transfers between the different stages.
In 2020 and 2021 there were no financial instruments which credit risk significantly increased.
The Group/Company calculates ECLs based on a four probability-weighted scenarios to measure the expected cash shortfalls, discounted
at an approximation to the EIR. A cash shortfall is the difference between the cash flows that are due to the Group/Company in
accordance with the contract and the cash flows that the Group/Company expects to receive. The Group/Company did not recognize
allowance for loans granted because based on probability of default, loss given default, exposure at default and forward looking
information the allowance is not material.
For trade receivables, the Group/Company applies a simplified approach in calculating ECLs. Therefore, the Group/Company does not
track changes in credit risk, but instead recognises a loss allowance based on lifetime ECLs at each reporting date. For that purpose the
Group/Company has established a provision matrix that is based on its historical credit loss experience, adjusted for forward-looking
factors specific to the debtors and the economic environment.
The Group/Company considers a financial asset in default when contractual payments are 90 days past due or when indications exist
that the debtors or a group of debtors are experiencing significant financial difficulty, default or delinquency in interest or principal
payments, the probability that they will enter bankruptcy or other financial reorganisation and where observable data indicate that there
is a measurable decrease in the estimated future cash flows, such as changes in arrears or economic conditions that correlate with
defaults. A financial asset is written off when there is no reasonable expectation of recovering the contractual cash flows. The
Group/Company did not recognize allowance for trade receivables, intercompany trade receivables, loans and other receivables because
based on historical as well as forward looking information the allowance is not material.
Cash
CashCash
Cash
and
andand
and
cash
cashcash
cash
equivalents
equivalentsequivalents
equivalents
For the purposes of the cash flow statement, cash and cash equivalents comprise cash on hand, deposits held at call with banks and
other short-term highly liquid investments with original maturities of three months or less, and bank overdrafts held in banks with credit
ratings disclosed in Note 21. Bank overdrafts are included into cash and cash equivalents on the statement of financial position.
Financial liabilities
Initial recognition and measurement
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and borrowings and
payables. All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly
attributable transaction costs. The Group’s/Company’s financial liabilities include trade and other payables, loans and borrowings
including bank overdrafts and finance lease liabilities.
Subsequent measurement
The measurement of financial liabilities depends on their classification, as described below.
Loans, borrowings and other payables
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S 2
APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius
FOR THE YEAR ENDED 31 DECEMBER 2021
(all tabular amounts are in EUR thousands unless otherwise stated)
17
After initial recognition, loans, borrowings and other payables are subsequently measured at amortised cost using the EIR method. Gains
and losses are recognised in the statement of comprehensive income, when the liabilities are derecognised as well as through the EIR
amortisation process. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that
are an integral part of the EIR. The EIR amortisation is included as finance costs in the statement of comprehensive income.
Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the statement of financial position if there is a currently
enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, i.e. to realise the assets and
settle the liabilities simultaneously.
Derecognition of financial instruments
Financial assets
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognised (i.e.,
removed from the Group’s/Company’s statement of financial position) when:
i) The rights to receive cash flows from the asset have expired or
ii) The Group/Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the
received cash flows in full without material delay to a third party under a ‘pass-through’ arrangement; and either (a) the Group/Company
has transferred substantially all the risks and rewards of the asset, or (b) the Group/Company has neither transferred nor retained
substantially all the risks and rewards of the asset, but has transferred control of the asset.
When the Group/Company has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement,
it evaluates if, and to what extent, it has retained the risks and rewards of ownership. When it has neither transferred nor retained
substantially all of the risks and rewards of the asset, nor transferred control of the asset, the Group/Company continues to recognise the
transferred asset to the extent of its continuing involvement. In that case, the Group/Company also recognises an associated liability. The
transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the Group/Company
has retained.
Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying
amount of the asset and the maximum amount of consideration that the Group/Company could be required to repay (amount of the
guarantee).
Financial liabilities
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expired. When an existing financial
liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially
modified, such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability, and
the difference in the respective carrying amounts is recognised in the statement of comprehensive income.
2.14 SHARE CAPITAL
(a)
(a)(a)
(a)
Ordinary
OrdinaryOrdinary
Ordinary
shares
sharesshares
shares
Ordinary shares are stated at their par value. Consideration received for the shares sold in excess over their par value is shown as share
premium. Incremental external costs directly attributable to the issue of new shares are accounted for as a deduction from share
premium.
2.15 RESERVE
(a)
(a)(a)
(a)
Foreign
ForeignForeign
Foreign
currency
currencycurrency
currency
translation
translationtranslation
translation
reserve
reservereserve
reserve
The foreign currency translation reserve is used for translation differences arising on consolidation of financial statements of foreign
subsidiaries. Exchange differences are classified as equity in the consolidated financial statements until disposal of the investment. Upon
disposal of the corresponding assets, the cumulative revaluation of translation reserves is recognised as income or expenses in the same
period when the gain or loss on disposal is recognised.
(b)
(b)(b)
(b)
Legal
LegalLegal
Legal
reserves
reservesreserves
reserves
Legal reserve is included into other reserves. Legal reserve is compulsory under the Lithuanian regulatory legislation. Annual transfers of
5 per cent of net result are required until the reserve reaches 10 per cent of share capital. The legal reserve cannot be used for payment
of dividends and it is established to cover future losses only.
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S 2
APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius
FOR THE YEAR ENDED 31 DECEMBER 2021
(all tabular amounts are in EUR thousands unless otherwise stated)
18
2.16 INCOME TAX
(a)
(a)(a)
(a)
Current
CurrentCurrent
Current
income
incomeincome
income
tax
taxtax
tax
The Group companies are taxed individually irrespective of the overall results of the Group. The Group companies in Lithuania may
transfer the estimated tax losses (or part thereof) to another Group company in Lithuania, which has a right to reduce the taxable profit
with the respective amount of the tax looses transferred for the same taxable period. In 2020 and 2021, the Group company UAB Apranga
ECOM LT took advantage of this opportunity and transferred tax losses to another Group company.
The charge for taxation included in these financial statements is based on the calculation made by the management in accordance with
tax legislation of the respective country in which group entity operates.
The tax currently payable is based on taxable profit for the reporting period. For companies operating in Lithuania 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 not designated for hedging. Starting from 1 January 2014 the transferable tax loss cannot cover more than 70% of the taxable
profit of the current year. Such carrying forward is disrupted if the company changes its activities due to which these losses were incurred
except when the company does not continue its activities due to reasons which do not depend on the company itself. Taxable profit
differs from net profit as reported in the statement of comprehensive income because it excludes items of income or expense that are
taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Group’s and the Company’s
liability for current tax is calculated using tax rates that have been enacted at the end of the reporting period.
The income tax rate applied for the Company and subsidiaries operating in Lithuania was 15 per cent in 2020 and in 2021. In Latvia and
Estonia income tax rate on reporting period and prior taxable profits is nil. In Latvia and Estonia, the taxation of profit of operating
subsidiaries is deferred until the profit appropriation moment, i.e. payment of dividends. The dividends paid by the Group’s companies in
Latvia and Estonia are taxed at the withholding tax rate of 20% of their gross amounts as at 31 December 2021 (20% as at 31 December
2020).
Amendments to the Estonian Income Tax Act that entered into force on 1 January 2018 enable companies to use a 14% reduced tax rate
for regular dividend payments. The 14% reduced tax rate can be applied to dividends distributed on or after 1 January 2019 as follows: the
14% rate is applicable to the amount equal to a third of the last financial year's dividend distribution, while the portion of the distribution
exceeding this threshold shall remain taxable at 20%. The reduced rate can be used on the share of the distribution equal to the
company's last three years' average profit distributions.
(b)
(b)(b)
(b)
Deferred
DeferredDeferred
Deferred
income
incomeincome
income
tax
taxtax
tax
Deferred income tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities
in the financial statements and the corresponding tax basis used in the computation of taxable profit, and is accounted for using the
statement of financial position liability method. Deferred income tax liabilities are generally recognised for all taxable temporary
differences and deferred income tax assets are recognised to the extent that it is probable that taxable profits will be available against
which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises
from goodwill (or negative goodwill) or from the initial recognition (other than in a business combination) of other assets and liabilities in
a transaction that affects neither the tax profit nor the accounting profit.
Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the end of the reporting
period and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.
Deferred income tax is charged or credited in the statement of comprehensive income, except when it relates to items charged or
credited directly to equity, in which case the deferred income tax is also dealt with in equity.
Deferred income tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries, except where the
Group and the Company is able to control the reversal of the temporary difference and it is probable that the temporary difference will
not reverse in the foreseeable future.
The carrying amount of deferred income tax assets is reviewed at the end of the reporting period and reduced to the extent that it is no
longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
Deferred income tax assets and liabilities are offset when they relate to income taxes levied by the same taxation authority and the Group
and the Company intends to settle its current tax assets and liabilities on a net basis.
As the object of taxation in Latvia (from 1 January 2018) and Estonia is dividends, not profit, there are no differences between the carrying
amounts and tax bases of assets and liabilities which could give rise to deferred tax assets or liabilities. The income tax payable on
dividends is recognised as the income tax expense of the period in which the dividends are declared, except for Group’s deffered tax
liability on total retained earnings of subsidiaires in Latvia and Estonia, as disclosed in Note 9.
2.17 LEASES
T
TT
The
hehe
he
Company
CompanyCompany
Company
or
oror
or
the
thethe
the
Group
GroupGroup
Group
as
asas
as
lessee
lesseelessee
lessee
The Company/Group assesses at contract inception whether a contract is, or contains, a lease. That is, if the contract conveys the right to
control the use of an identified asset for a period of time in exchange for consideration.
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S 2
APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius
FOR THE YEAR ENDED 31 DECEMBER 2021
(all tabular amounts are in EUR thousands unless otherwise stated)
19
The Company/Group applies a single recognition and measurement approach for all leases, except for short-term leases and leases of
low-value assets. The Company/Group recognizes lease liabilities to make lease payments and right-of-use assets representing the right
to use the underlying assets.
Right
RightRight
Right-
--
-of
ofof
of-
--
-use
useuse
use
assets
assetsassets
assets
The Company/Group recognizes right-of-use assets at the commencement date of the lease (i.e., the date the underlying asset is available
for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any
remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognized, initial direct costs
incurred, and lease payments made at or before the commencement date less any lease incentives received. Right-of-use assets are
depreciated on a straight-line basis over the shorter of the lease term and the estimated useful lives of the assets, as follows:
Premises 1 to 15 years
Motor vehicles 1 to 5 years
If ownership of the leased asset transfers to the Company/Group at the end of the lease term or the cost reflects the exercise of a purchase
option, depreciation is calculated using the estimated useful life of the asset.
The right-of-use assets are also subject to impairment. Refer to the accounting policies in Note 2.9,
Impairment of non-financial assets
.
Lease
LeaseLease
Lease
liabilities
liabilitiesliabilities
liabilities
At the commencement date of the lease, the Company/Group recognizes lease liabilities measured at the present value of lease
payments to be made over the lease term. The lease payments include fixed payments (including in-substance fixed payments) less any
lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual
value guarantees. The lease payments also include the exercise price of a purchase option reasonably certain to be exercised by the
Company/Group and payments of penalties for terminating the lease, if the lease term reflects the Company/Group exercising the option
to terminate. Variable lease payments that do not depend on an index or a rate are recognized as expenses in the period in which the
event or condition that triggers the payment occurs.
In calculating the present value of lease payments, the Company/Group uses its incremental borrowing rate at the lease commencement
date because the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease
liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of
lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the lease payments (e.g., changes to future
payments resulting from a change in an index or rate used to determine such lease payments) or a change in the assessment of an option
to purchase the underlying asset.
The Company’s/Group’s lease liabilities are included in
Non-current lease liabilities
and
Current lease liabilities
(see Note 26).
Short
ShortShort
Short-
--
-term
termterm
term
leases
leasesleases
leases
and
andand
and
leases
leasesleases
leases
of
ofof
of
low
lowlow
low-
--
-value
valuevalue
value
assets
assetsassets
assets
The Company/Group applies the short-term lease recognition exemption to its short-term leases (i.e., those leases that have a lease term
of 12 months or less from the commencement date and do not contain a purchase option). It also applies the lease of low-value assets
recognition exemption to leases of office equipment that are considered to be low value. Lease payments on short-term leases and leases
of low-value assets are recognized as expense on a straight-line basis over the lease term.
2.18 EMPLOYEE BENEFITS
(a)
(a)(a)
(a)
Social
SocialSocial
Social
security
securitysecurity
security
contributions
contributionscontributions
contributions
The Company and the Group pays social security contributions to the state Social Security Fund (the Fund) on behalf of its employees
based on the defined contribution plan in accordance with the local legal requirements. A defined contribution plan is a plan under which
the Group and the Company pays 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 included in payroll expenses.
(b)
(b)(b)
(b)
Long
LongLong
Long-
--
-term
termterm
term
employee
employeeemployee
employee
benefits
benefitsbenefits
benefits
According to the requirements of Lithuanian Labor Code, each employee leaving the Group at the age of retirement is entitled to a one-
off payment in the amount of 2 months’ salary.
The actuarial gains and losses are recognized in the statement of other comprehensive income.
The past service costs are recognised as an expense on a straight line basis over the average period until the benefits become vested. Any
gains or losses appearing as a result of curtailment and/or settlement are recognised in the statement of comprehensive income as
incurred. The past service costs are recognized in the statement of comprehensive income as incurred.
The above mentioned employee benefit obligation is calculated based on actuarial assumptions, using the projected unit credit method.
Obligation is recognized in the statement of financial position and reflects the present value of these benefits on the date of the statement
of financial position. Present value of the non-current obligation to employees is determined by discounting estimated future cash flows
using the discount rate which reflects the interest rate of the Government bonds of the same currency and similar maturity as the
employment benefits. Actuarial gains and losses are recognized in the statement of other comprehensive income as incurred.
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S 2
APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius
FOR THE YEAR ENDED 31 DECEMBER 2021
(all tabular amounts are in EUR thousands unless otherwise stated)
20
(c)
(c)(c)
(c)
Termination
TerminationTermination
Termination
benefits
benefitsbenefits
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 Company and the Group recognises termination benefits
when it is demonstrably committed to either terminate the employment of current employees according to a detailed formal plan
without possibility of withdrawal or to provide termination benefits as a result of an offer made to encourage voluntary redundancy.
Benefits falling due more than 12 months after the end of the reporting period are discounted to present value.
(d)
(d)(d)
(d)
Bonus
BonusBonus
Bonus
plans
plansplans
plans
The Company and the Group recognise a liability and an expense for bonuses where contractually obliged or where there is a past practice
that has created a constructive obligation.
2.19 PROVISIONS
Provisions are recognised 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 Group and the Company re-evaluate provisions at each reporting date and adjusts
them 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 recognised as a borrowing cost.
Provisions for restructuring costs and legal claims are recognised when: the Company or the Group have a present legal or constructive
obligation as a result of past events; it is more likely than not that an outflow of resources will be required to settle the obligation; and the
amount can be reliably estimated. Provisions are not recognised for future operating losses.
Provisions are measured at the present value of the expenditures expected to be required to settle the obligation using a pre-tax rate
that reflects current market assessments of the time value of money and the risks specific to the obligation. The increase in the provision
due to passage of time is recognised as interest expense.
2.20 RECOGNITION of REVENUE AND RELATED EXPENSES
Revenue recognition
Revenue from contracts with customers is recognised when control of the services or goods are transferred to the customer at an amount
that reflects the consideration to which the Group/Company expects to be entitled in exchange for those services or goods. The
Group/Company has concluded that it is the principal in its revenue arrangements, because:
- The entity controls the goods or services before transferring them to the customer;
- The entity is primarily responsible for the supply of goods and services and bears risk of non-performance;
- The entity has latitude in establishing price either directly or indirectly.
Sales of goods are recognized when the Company or another Group entity sells a product to the customer. Retail sales are usually in cash
or by credit card. The recorded revenue includes credit card fees payable for the transaction. Such fees are included in operating expenses.
Online sales of goods are recognized when the Company or another Group entity sends a product to the customer.
Every sale of goods that the Group/Company makes is a separate performance obligation with separately identifiable fixed price. The
Group/Company does not have any customer loyalty progammes.
The Company recognises revenue from management services provided to subsidaries over time, based on expenses incured to measure
provision of the services, because the customer simultaneously receives and consumes the benefits provided by the Company.
Other occasional revenue from the sale of property, plant or equipment is recognised at a point in time, when sold items are delivered to
client and control is transfered.
Dividend income is recognised when the right to receive payment is established.
In addition the management considers the effect of other matters to the revenue recognition such as the existence of significant
financing components, non-cash consideration, consideration payable to the customer and warranties. None of these are present in the
Group’s/Company‘s contracts with the customers.
Assets and liabilities arising from rights of return
Right of return assets
A right-of-return asset is recognised for the right to recover the goods expected to be returned by customers. The asset is measured at
the former carrying amount of the inventory, less any expected costs to recover the goods and any potential decreases in value. The
Group/Company updates the measurement of the asset for any revisions to the expected level of returns and any additional decreases in
the value of the returned products.
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S 2
APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius
FOR THE YEAR ENDED 31 DECEMBER 2021
(all tabular amounts are in EUR thousands unless otherwise stated)
21
Refund liabilities
A refund liability is recognised for the obligation to refund some or all of the consideration received (or receivable) from a customer. The
Group’s/Company’s refund liabilities arise from customers’ right of return. The liability is measured at the amount the Group/Company
ultimately expects it will have to return to the customer. The Group/Company updates its estimates of refund liabilities (and the
corresponding change in the transaction price) at the end of each reporting period.
The Group/Company does not incur material costs to acquire or fulfill the contract.
Trade receivables
A receivable represents the Company’s right to an amount of consideration that is unconditional (i.e., only the passage of time is required
before payment of the consideration is due).
Contract liabilities – prepayments received
A contract liability is the obligation to transfer goods or services to a customer for which the Group/Company has received consideration
(or an amount of consideration is due) from the customer. If a customer pays consideration before the Group/Company transfers goods
or services to the customer, a contract liability is recognised when the payment is made. Contract liabilities are recognised as revenue
when the Group/Company performs under the contract.
2.21 DIVIDEND DISTRIBUTION
Dividend distribution to the Company’s shareholders is recognised as a liability in the Company’s and Group’s financial statements in the
period in which the dividends are approved by the Company’s shareholders.
2.22 EARNINGS PER SHARE
Basic earnings per share are calculated by dividing net profit attributed to the shareholders of the Company and the Group from average
weighted number of ordinary registered shares in issue, excluding ordinary registered shares purchased by the Group and the Company
and held as treasury shares, if any.
2.23 RELATED PARTIES
A related party is a person or entity that is related to the entity that is preparing its financial statements:
a) A person or a close member of that person’s family is related to a reporting entity if that person:
i. has control or joint control over the reporting entity;
ii. has significant influence over the reporting entity; or
iii. is a member of the key management personnel of the reporting entity or of a parent of the reporting entity.
b) An entity is related to a reporting entity if any of the following conditions apply:
i. The entity and the reporting entity are members of the same group (which means that each parent, subsidiary and
fellow subsidiary is related to the others).
ii. One entity is an associate or joint venture of the other entity (or an associate or joint venture of a member of a group
of which the other entity is a member).
iii. Both entities are joint ventures of the same third party.
iv. One entity is a joint venture of a third entity and the other entity is an associate of the third entity.
v. The entity is a post-employment benefit plan for the benefit of employees of either the reporting entity or an entity
related to the reporting entity. If the reporting entity is itself such a plan, the sponsoring employers are also related to
the reporting entity.
vi. The entity is controlled or jointly controlled by a person identified in (a).
vii. A person identified in (a)(i) has significant influence over the entity or is a member of the key management personnel
of the entity (or of a parent of the entity).
2.24 SUBSIDIES
Subsidies received as a compensation for the expenses or unearned income of the current or previous reporting period, also, all the
subsidies, which are not subsidies related to assets, are considered as subsidies related to income. The income-related subsidies are
recognised as used in parts to the extent of the expenses incurred during the reporting period to be compensated by that subsidy.
Subsidies for the financing of working capital are recognized in other income caption in the statement of comprehensive income.
The balance of subsidies not received by the end of the reporting period is shown in the statements of financial position caption “Trade
and other receivables”.
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S 2
APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius
FOR THE YEAR ENDED 31 DECEMBER 2021
(all tabular amounts are in EUR thousands unless otherwise stated)
22
In 2020 and in 2021, the Company and the Group was included in the list of taxpayers who may be subject to fiscal aid measures due to
the COVID-19, established by the State Tax Inspectorate. Additionally, under the Law on Employment, the Company received subsidies
to employers during and after the downtime, and subsidies to employers affected by the COVID-19, which are accounted for by reducing
wage costs. The impact of the subsidies is reflected in selling costs, and in general and administrative expenses (Note 5). The Company
and the Group in 2020 also received rental subsidies, which are accounted for by reducing rental costs in selling costs (Note 5). The
Company and the Group in 2020 and in 2021 also received subsidies for the financing of working capital, which are recognized in other
income caption in the statement of comprehensive income (Note 6). As per management judgement these working capital subsidies
met income subsidy requirements and were accounted in 2021.
2.25 CONTIGENCIES
Contingent liabilities are not recognised in the financial statements, except for contingent liabilities associated with business
combinations. They are disclosed unless the possibility of an outflow of resources embodying economic benefits is remote.
A contingent asset is not recognised in the financial statements but disclosed when an inflow of economic benefits is probable.
2.26 SUBSEQUENT EVENTS
Subsequent events that provide additional information about the Company’s and Group’s position at the reporting date (adjusting
events) are reflected in the financial statements. Subsequent events that are not adjusting events are disclosed in the notes when
material.
3. FINANCIAL RISK MANAGEMENT
(a)
(a)(a)
(a)
Financial
FinancialFinancial
Financial
risk
riskrisk
risk
factors
factorsfactors
factors
The risk management function within the Group and the Company is carried out in respect of financial risks (credit, market (which consist
of currency, interest rate and price) and liquidity), operational risks and legal risks. The primary objectives of the financial risk management
function are to establish risk limits, and then ensure that exposure to risks stays within these limits. The operational and legal risk
management functions are intended to ensure proper functioning of internal policies and procedures to minimize operational and legal
risks.
The financial risks relate to the following financial instruments: financial assets at fair value through profit or loss, financial assets at fair
value through other comprehensive income, trade receivables, cash and cash equivalents, trade and other payables and borrowings. The
accounting policy with respect to these financial instruments is described in previous section.
Credit risk
Credit risk is managed on Group basis. Credit risk arises from cash and cash equivalents and deposits with banks and financial institutions,
financial assets at fair value through other comprehensive income as well as credit exposures to wholesale and retail customers, including
outstanding receivables and committed transactions. For banks and financial institutions, only independently rated parties (or
subsidiaries of such parties) with high credit ratings are accepted. Sales to wholesale customers are rare and immaterial, therefore risk
control only assesses the credit quality of the customer, taking into account its financial position, past experience and future factors. Sales
to retail customers are settled in cash or using major credit cards, therefore there is no credit risk.
Company’s credit risk arising from trade receivables from subsidiaries and loans to subsidiaries is managed by controlling financial
performance of subsidiaries on a monthly basis. All the subsidiaries having Company’s loans have been profitable during the financial
year, generated strong positive cash flows, historically none of them had liquidity issues. Management has also assessed the projected
future information that will not have a material adverse effect on the Company’s subsidiaries. Therefore, in the management’s opinion,
the credit risk is low.
Financial assets at fair value through other comprehensive income are invested only to Lithuanian government bonds.
The Company and the Group have no significant concentration of credit risk, except for cash which is held in two banks having high
credit ratings and loans granted to subsidiaries.
Liquidity risk
Liquidity risk management implies maintaining sufficient cash, the availability of funding through an adequate amount of committed
credit facilities. Due to the dynamic nature of the underlying businesses, the Group and the Company treasury maintains flexibility in
funding by maintaining availability under committed credit lines.
Management monitors rolling forecasts of the Group’s and the Company’s liquidity reserve (comprises undrawn borrowing facility
(Note 24) and cash and cash equivalents (Note 21) on the basis of expected cash flow. This is generally carried out at local level in the
operating companies of the Group in accordance with practice set by the Group. In addition, the Group’s and the Company’s liquidity
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S 2
APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius
FOR THE YEAR ENDED 31 DECEMBER 2021
(all tabular amounts are in EUR thousands unless otherwise stated)
23
management policy involves projecting cash flows and considering the level of liquid assets necessary to meet these; and maintaining
debt financing plans.
The table below analyses the Group’s and the Company’s financial liabilities into relevant maturity groupings based on the remaining
period at the end of the reporting period to the contractual maturity date. The amounts disclosed in the table are the contractual
undiscounted cash flows.
GROUP
Less than 1
month
Between 1 and
3 months
Between 3 and
12 months
More than 1
year
Total
TotalTotal
Total
As at 31 December 2021
As at 31 December 2021As at 31 December 2021
As at 31 December 2021
Borrowings
25
51
126
-
202
Lease liabilities
1 132
2 261
9 858
54 818
68 069
Trade and other payables
10 554
2 369
183
-
13 106
Total 11 711
4 681
10 167
54 818
81 377
As at 31 December 2020
As at 31 December 2020As at 31 December 2020
As at 31 December 2020
Borrowings
25
51
230
204
510
Lease
liabilities
1 173
2 312
10 037
54 174
67 696
Trade and other payables
4 368
4 785
803
-
9 956
Total
5 566
7 148
11 070
54 378
78 162
COMPANY
Less than 1
month
Between 1 and
3 months
Between 3 and
12 months
More than 1
year
Total
TotalTotal
Total
As at 31 December 2021
As at 31 December 2021As at 31 December 2021
As at 31 December 2021
Borrowings
25
51
5 326
-
5 402
Lease liabilities
459
909
3 893
24 003
29 264
Trade and other payables
2 570
1 462
183
-
4 215
Total
3 054
2 422
9 402
24 003
38 881
As at 31 December 2020
As at 31 December 2020As at 31 December 2020
As at 31 December 2020
Borrowings
25
51
8 397
204
8 677
Lease liabilities
441
873
3 845
21 110
26 269
Trade and other payables
1 591
1 821
32
-
3 444
Total 2 057
2 745
12 274
21 314
38 390
Change in liabilities arising from financing activities:
GROUP
As at 31 December
2020
Dividends
declared
Cash flow
As at 31 December
2021
Borrowings
500
-
( 300)
200
Dividends payable
116
-
-
116
Total 616
-
( 300)
316
COMPANY
As at 31 December
2020
Dividends
declared
Cash flow
As at 31 December
2021
Borrowings
8 668
-
(3 268)
5 400
Dividends payable
116
-
-
116
Total 8 784
-
(3 268)
5 516
Changes in lease liabilities are disclosed in Note 26.
Market risk
Cash flow and fair value interest rate risk
The Company has loans to subsidiaries with floating interest rates, but the cash flow risk is mitigated by applying the same variable
element of interest rate on those loans as the banks are charging the Company.
Loans granted and received at variable rates expose the Group to cash flow interest rate risk, which horewer has no material impact on
profit or equity of the Group. Loans granted and received at fixed rates expose the Company to fair value interest rate risk, which horewer
has no material impact on profit or equity of the Company.
The Company’s and Group’s borrowings consist of loans with floating interest rate, which are related to EURIBOR and EONIA. The
Company and the Group did not use any derivative financial instruments in order to control the risk of interest rate changes.
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S 2
APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius
FOR THE YEAR ENDED 31 DECEMBER 2021
(all tabular amounts are in EUR thousands unless otherwise stated)
24
Trade and other receivables and payables are interest-free and have settlement dates within one year.
The Group’s and the Company’s cash flow and fair value interest rate risk is periodically monitored by the Group’s management. It
analyses its interest rate exposure on a dynamic basis taking into consideration refinancing, renewal of existing positions, alternative
financing. Based on these scenarios, the Group and the Company calculates the impact on profit and loss of a defined interest rate shift.
The scenarios are run only for receivables and liabilities that represent the major interest-bearing positions.
Foreign exchange risk
The Company and the Group has a policy to synchronize the cash flows from expected sales in the future with the expected purchases
and other expenses in each foreign currency. Substantially all the Group’s payables and receivables are short-term and in addition
expenses in foreign currencies are insignificant (less than 10%) as compared to those in Euro.
The Group operates in Lithuania, Latvia and Estonia, and during the reporting period used Euro currency. Since Estonia, Latvia and
Lithuania introduced the Euro (respectively, since 1st January 2011, 1st January 2014 and 1st January 2015), so there is no exchange rate
fluctuations.
(b)
(b)(b)
(b)
Capital
CapitalCapital
Capital
risk
riskrisk
risk
management
managementmanagement
management
The Group’s and the Company’s objectives when managing capital are to safeguard the Group’s and the Company’s ability to continue
as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital
structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Group and the Company may adjust the
amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.
Consistent with others in the industry, the Group and the Company monitors capital on the basis of the gearing ratio. This ratio is
calculated as net debt divided by total capital. Net debt is calculated as total borrowings (including ‘current and non-current borrowings’
as shown in the consolidated statement of financial position) less cash and cash equivalents. Total capital is calculated as ‘equity’ as shown
in the consolidated statement of financial position plus net debt.
Pursuant to the Lithuanian Law on Companies the authorised share capital of a public limited liability company must be not less than
EUR 40 thousand and of a private limited liability company must be not less than EUR 2.5 thousand. In addition, for all entities the
shareholders’ equity should not be lower than 50 per cent of the company’s registered share capital. As at 31 December 2020 the
Company and all of the Lithuanian subsidiaries complied with these requirements. As at 31 December 2021 UAB Apranga Ecom LT had
not complied with the requirements. Business activities of UAB Apranga Ecom LT are terminated.
Pursuant to the Latvian Commercial Law the authorised share capital of a private limited liability company must be not less than EUR 2.8
thousand. As at 31 December 2020 and 31 December 2021, all of the Company’s Latvian subsidiaries complied with these requirements.
Pursuant to the Estonian Commercial Code the authorised share capital of a private limited liability company must be not less than EUR
2.5 thousand. In addition, the shareholders’ equity should not be lower than 50 per cent of the company’s share capital. As at 31 December
2020 all of the Company’s Estonian subsidiaries complied with these requirements. As at 31 December 2021 OU Apranga and OU Apranga
Ecom EE had not complied with the requirements. The Group management decided to increase the share capital of OU Apranga and
OU Apranga Ecom EE in order to comply with the statutory requirements. The additional share capital injection needed will be exactly
calculated after General shareholders’ meeting of the subsidiaries.
In addition, the Group has to comply with the equity to assets covenant imposed in the agreement with Luminor Bank AS. As at 31
December 2020 and as at 31 December 2021, the Group complied with the covenant.
(c)
(c)(c)
(c)
Fair
FairFair
Fair
value
valuevalue
value
estimation
estimationestimation
estimation
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. The Group and the Company uses valuation techniques that are appropriate in the circumstances
and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the
use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value
hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:
Level 1 — Quoted (unadjusted) market prices in active markets for identical assets or liabilities;
Level 2 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly
observable;
Level 3 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.
For assets and liabilities that are recognised in the financial statements on a recurring basis, the Group and the Company determines
whether transfers have occurred between Levels in the hierarchy by re-assessing categorisation (based on the lowest level input that is
significant to the fair value measurement as a whole) at the end of each reporting period. Fair value measurements are disclosed in Notes
12, 18, 26.
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S 2
APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius
FOR THE YEAR ENDED 31 DECEMBER 2021
(all tabular amounts are in EUR thousands unless otherwise stated)
25
4. SEGMENT INFORMATION
Management has determined the operating segments based on the reports reviewed by the General Director and other 6 Directors
(responsible for managing, sales and marketing, human resources, purchases, development and finance) that are used to make strategic
decisions.
The Directors consider the business from both a geographic and product perspective to certain extent. From product perspective
Directors review only sales volume and gross margin, as presented in the statment of the comprehensive income by brand name. Gross
margins of different brands are not significantly different, therefore can be aggregated into one reportable segment. Geographically,
Directors separately consider operations in Lithuania, Latvia and Estonia depending on where the stores are located. Different legislation,
consumer habits and economic situation substantially affect the average sales and expenses in each country, therefore Directors believe
that each country represents a separate reportable segment.
All financial information, including the measure of profit and total assets, is analysed on a country basis. Liabilities are measured on a
Group basis only and are not individually measured on a country basis.
The segment information provided to the Chief Operating Decision Makers for the reportable segments for the year ended 31 December
is as follows:
31 December 2021 Lithuania Latvia Estonia Total
Inter
-
company
elimina-
tions
Total in
consolidated
financial
statements
Total segment revenue
133 403
39 766
30 705
203 874
-
Inter
-
segment revenue*
(12 371)
(1 368)
( 601)
(14 340)
-
Stores income from external customers
(note 6)
121 032
38 398
30 104
189 534
-
189 534
Gross margin
43,5%
41,4%
44,7%
43,4%
43,4%
Other income (expenses):
Other income (expenses):Other income (expenses):
Other income (expenses):
Rent (Note 26)
(1 550)
( 91)
( 197)
(1 838)
( 23)
(1 861)
Utilities
(1 272)
( 417)
( 376)
(2 065)
(2 065)
Renumeration and social security
contributions
(18 104)
(3 811)
(3 797)
(25 712)
(25 712)
Depreciation and amortisation
(11 531)
(4 833)
(3 434)
(19 798)
(19 798)
Impairment (charges)
473
106
268
847
847
Other income
5 642
1 998
187
7 827
(4 837)
2 990
Other (expenses)
(15 981)
(6 003)
(5 018)
(27 002)
4 860
(22 142)
Finance income
58
-
-
58
( 26)
32
Finance (costs)
( 727)
( 251)
( 147)
(1 125)
26
(1 099)
Income tax (expense)
(1 513)
( 650)
( 152)
(2 315)
(2 315)
Profit (loss) for the year 8 158
1 935
803
10 896
-
10 896
Total
assets
128 784
34 192
19 304
182 280
(16 525)
165 755
Additions to non
-
current assets (except for
leases)
6 989
755
214
7 958
( 5)
7 953
inter-segment revenue consists of sales of the Company's goods to subsidiaries Apranga SIA and Apranga OU and subsidiaries sale of
remnants of goods to the Company.
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S 2
APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius
FOR THE YEAR ENDED 31 DECEMBER 2021
(all tabular amounts are in EUR thousands unless otherwise stated)
26
31 December 2020 Lithuania
Latvia Estonia Total
Inter
-
company
elimina-
tions
Total in
consolidated
financial
statements
Total segment revenue
111 966
43 825
28 664
184 455
-
Inter
-
segment revenue*
(13 812)
( 505)
( 560)
(14 877)
-
Stores income from external customers (
N
ote
6)
98 154
43 320
28 104
169 578
-
169 578
Gross margin
40,9%
42,6%
43,5%
42,0%
42,0%
Other income (expenses):
Other income (expenses):Other income (expenses):
Other income (expenses):
Rent (
N
ote 26)
( 846)
( 934)
-
(1 780)
(1 780)
Utilities
(1 055)
( 478)
( 314)
(1 847)
(1 847)
Renumeration and social security contributions
(12 729)
(5 008)
(3 602)
(21 339)
(21 339)
Depreciation and amortisation
(11 362)
(5 061)
(3 879)
(20 302)
(20 302)
Impairment (charges)
( 673)
( 721)
( 189)
(1 583)
(1 583)
Other
income
5 009
376
56
5 441
(4 350)
1 091
Other (expenses)
(12 350)
(5 708)
(4 288)
(22 346)
4 350
(17 996)
Finance income
89
-
-
89
( 57)
32
Finance (costs)
( 698)
( 297)
( 171)
(1 166)
57
(1 109)
Income tax (expense)
( 894)
( 102)
( 29)
(1 025)
(1 025)
Profit (loss) for the year
4 603
514
( 181)
4 936
-
4 936
Total assets
125 768
33 550
20 408
179 726
(19 422)
160 304
Additions to non-current assets (except for leases) 3 123
1 688
466
5 277
( 16)
5 261
In 2021, the Group’s profitability before taxes increased to 7.0% (2020: 3.5%). The profitability in Lithuania increased from 5.6% to 8.0%.
Profit margins in Latvia and Estonia increased from 1.4% and -0.5 % to 6.7% and 3.2%, respectively.
The total non-current assets located in Lithuania is EUR 63 220 thousand (2020: EUR 56 789 thousand), and the total of these non-current
assets located in other countries is EUR 31 726 thousand (2020: EUR 37 816 thousand).
5. EXPENSES BY NATURE
For the year ended 31 December cost of sales consisted of the following:
GROUP COMPANY
2021 2020 2021 2020
Cost of goods sold
107 808
97 390
45 426
42 370
Write
-
down (reversal) of
inventories to net realisable
value
( 293)
1 422
( 154)
318
Total cost of sales 107 515
98 812
45 272
42 688
For the year ended 31 December selling costs consisted of the following:
GROUP COMPANY
2021 2020 2021 2020
Rent*
1 861
1 780
391
247
Utilities
2 065
1 848
792
677
Remuneration **
18 168
14 733
8 048
4 384
Social security contributions
1 762
2 059
147
117
Depreciation and amortization
19 798
20 302
7 682
7 780
Impairment charge (reversal)
( 847)
1 583
( 471)
673
Advertising and
marketing
2 173
2 021
1 590
1 396
Franchise expenses
4 501
3 945
98
84
Bank commissions
1 219
970
369
236
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S 2
APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius
FOR THE YEAR ENDED 31 DECEMBER 2021
(all tabular amounts are in EUR thousands unless otherwise stated)
27
GROUP COMPANY
2021 2020 2021 2020
Labelling, packing and repairing
1 139
840
473
317
Logistics and distribution
4 528
1 814
359
155
Business
trips
208
237
119
147
Total selling costs
56 575
52 132
19 597
16 213
For the year ended 31 December general and administrative expenses consisted of the following:
GROUP COMPANY
2021 2020 2021 2020
Remuneration **
5 494
4 479
4 029
4 404
Social security contributions
288
68
93
67
IT and communications
1 186
968
750
578
Repair and maintenance
2 588
2 699
1 235
1 189
Taxes (excluding income tax)
192
191
110
107
Consulting and audit expense
367
315
245
223
Other expenses
4 041
3 967
1 891
1 582
Total general and administrative expenses
14 156
12 687
8 353
8 150
* In 2020, the Group received EUR 325 thousand of rental subsidies from the state in Lithuania, which reduced rental costs. The Company
did not receive any rental subsidies. In 2021, the Group and the Company did not receive rental subsidies.
** In 2021, the Group in Lithuania, Latvia and Estonia received EUR 3 019 thousand of wage subsidies, which reduced wage costs, while in
2020 respectively received EUR 4 167 thousand of wage subsidies. The Company received EUR 927 thousand of wage subsidies (in 2020
received EUR 1 998 thousand).
6. REVENUE FROM CONTRACTS WITH CUSTOMERS
For the year ended 31 December revenue from contracts with customers consisted of the following:
GROUP COMPANY
2021 2020 2021 2020
Stores income
189 284
169 578
60 559
49 878
Wholesale income
250
-
12 008
12 866
Management fees
-
-
4 803
4 299
Other income
211
380
188
121
Total revenue from contracts with customers
189 745
169 958
77 558
67 164
For the year ended 31 December stores income consisted of the following:
GROUP COMPANY
Chain 2021 2020 2021 2020
Economy 18 624
19 279
12 815
11 997
Youth 45 189
39 355
14 156
9 983
Footwear 2 648
3 223
1 566
1 510
Business 35 284
31 624
11 729
10 130
Luxury 21 522
19 144
12 597
9 781
Zara 57 490
49 570
-
-
Outlets 8 527
7 383
7 696
6 477
Total 189 284
169 578
60 559
49 878
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S 2
APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius
FOR THE YEAR ENDED 31 DECEMBER 2021
(all tabular amounts are in EUR thousands unless otherwise stated)
28
For the year ended 31 December other income consisted of the following:
GROUP COMPANY
2021 2020 2021 2020
Rent
income
1
36
4
39
Gain from disposal of PPE, net
43
26
43
24
Changes in fair value of financial assets, net
-
200
-
200
Dividends
103
176
103
4 176
Other income
2 632
273
350
-
Total other income
2 779
711
500
4 439
Other income in 2021 includes the working capital subsidy of EUR 2 632 thousand received by the Group, respectively EUR 273 thousand
in 2020. The Company received the working capital subsidy of EUR 350 thousand in 2021. All subsidies for operating restrictions in 2021 in
Latvia are recognized in other income in 2021.
7. FINANCE INCOME AND COSTS
For the year ended 31 December finance income consisted of the following:
GROUP COMPANY
2021 2020 2021 2020
Interest income
32
32
58
89
Total finance income
32
32
58
89
For the year ended 31 December finance costs consisted of the following:
GROUP COMPANY
2021 2020 2021 2020
Interest on bank borrowings
105
107
105
107
Interest expense on lease liabilities
994
1 002
406
379
Total finance costs 1 099
1 109
511
486
8. INCOME TAX EXPENSE
Domestic income tax is calculated at 15 per cent of the estimated profit for the year.
The total income tax charge can be reconciled to the accounting profit before tax as follows:
GROUP COMPANY
2021 2020 2021 2020
Profit before tax
13 211
5 961
4 383
4 155
Tax at the domestic income tax rate
1 982
894
657
623
Tax effect of income not subject to tax
( 315)
( 59)
( 313)
( 672)
Tax effect of expenses that are not deductible in determining
taxable profit
474 132 359 132
Prior period income tax adjustment
-
6
-
6
Effect of different tax rates of foreign subsidiaries
174
52
-
-
Tax expense
2 315
1 025
703
89
Effective income tax rate
17,5%
17,2%
16,0%
2,1%
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S 2
APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius
FOR THE YEAR ENDED 31 DECEMBER 2021
(all tabular amounts are in EUR thousands unless otherwise stated)
29
For the year ended 31 December income tax expense consisted of the following:
GROUP COMPANY
2021 2020 2021 2020
Current income tax expense
1 256
1 402
410
235
Deferred tax
1 059
( 377)
293
( 146)
Total income tax expense 2 315
1 025
703
89
9. DEFERRED INCOME TAX
The movement in deferred income tax account was as follows:
GROUP COMPANY
2021 2020 2021 2020
At beginning of year
(1 008)
(1 385)
( 96)
( 242)
Comprehensive income statement (charge) credit
(1 059)
377
( 293)
146
At end of year
(2 067)
(1 008)
( 389)
( 96)
In 2020 and 2021 deferred income tax asset and liability related to the entities operating in Lithuania were calculated at 15 per cent rate.
Deferred income tax liability related to the entities operating in Latvia and Estonia were calculated at 20 per cent rate as at 31 December
2020 and as at 31 December 2021 for the accrued undistributed profit of these subsidiaries, since these undistributed profits are planned
to be paid out as dividends during the coming years (Note 2.16). The 20 percent rate applies to gross dividends (25 per cent to net
dividends).
Deferred tax assets and liabilities recognised as follows:
GROUP COMPANY
2021 2020 2021 2020
Deferred tax assets:
Inventory write down
433
466
296
319
Accruals
16
64
16
64
Impairment of property, plant and equipment
18
85
18
70
Total deferred tax assets
467
615
330
453
Deferred tax liability:
Undistributed profits of subsidiaries
(1 815)
(1 013)
-
-
Depreciation of
property, plant and equipment
( 719)
( 610)
( 719)
( 549)
Total deferred tax liabilities (2 534)
(1 623)
( 719)
( 549)
Total deferred tax (liabilities) assets, net
(2 067)
(1 008)
( 389)
( 96)
10. DIVIDENDS PER SHARE
2021 2020
Approved dividends
-
-
Weighted average number of ordinary shares in thousand (Note 22)
55 292
55 292
Approved dividends per share, EUR 0.00
0.00
In 2021 and 2020 dividends were not paid to the shareholders. In respect of the current year, the Board of Directors propose to pay 0.36
EUR dividend per share to the shareholders (Note 23).
This dividend is subject to approval by the shareholders at the Annual Shareholder’s
Meeting and has not been included as a liability in these financial statements.
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S 2
APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius
FOR THE YEAR ENDED 31 DECEMBER 2021
(all tabular amounts are in EUR thousands unless otherwise stated)
30
11. EARNINGS PER SHARE
GROUP COMPANY
2021 2020 2021 2020
Profit (loss) for the year
10 896
4 936
3 680
4 066
Weighted average number of
ordinary shares in thousand (Note 22)
55 292
55 292
55 292
55 292
Basic and diluted earnings per share, EUR 0.20
0.09
0.07
0.07
Company has no dilutive potential ordinary shares, therefore, the diluted earnings per share are the same as basic earnings per share.
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S 2
APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius
FOR THE YEAR ENDED 31 DECEMBER 2021
(all tabular amounts are in EUR thousands unless otherwise stated)
31
12. PROPERTY, PLANT AND EQUIPMENT
At 31 December property, plant and equipment consisted of the following:
GROUP Buildings
Plant and
equipment
Leasehold
improve-
ments
Other PPE
Construction
in progress
Total
Cost
At 31 December 2019 9 650
2 114
11 112
46 117
321
69 314
Additions
-
-
412
1 190
3 350
4 952
Disposals and write
-
offs
( 239)
( 3)
(1 382)
(2 791)
( 118)
(4 533)
Transfers
-
-
1 722
1 307
(3 029)
-
At 31 December 2020
9 411
2 111
11 864
45 823
524
69 733
Additions
2
27
39
2 230
5 405
7 703
Disposals and write
-
offs
-
( 14)
(3 642)
(4 689)
(1 056)
(9 401)
Transfers
394
-
3 367
925
(4 686)
-
At 31 December 2021
9 807
2 124
11 628
44 289
187
68 035
Accumulated depreciation
At 31 December 2019 4 100
412
5 954
29 034
-
39 500
Charge for the year
214
133
1 739
4 595
-
6 681
Disposals and write
-
offs
( 239)
( 3)
( 638)
(2 790)
-
(3 670)
At 31 December 2020
4 075
542
7 055
30 839
-
42 511
Charge for the year
248
135
1 637
4 512
-
6 532
Disposals and write
-
offs
-
( 14)
(2 005)
(4 416)
-
(6 435)
At 31 December 2021
4 323
663
6 687
30 935
-
42 608
Impairment charge
At 31 December 2019 -
-
100
130
-
230
Charge for the year (reversal)
528
465
993
At 31 December 2020
-
-
628
595
-
1 223
Charge for the year (reversal)
( 335)
( 362)
( 696)
At 31 December 2021
-
-
294
234
-
527
Carrying amount
At 31 December 2019 5 550
1 702
5 058
16 953
321
29 584
At 31 December 2020
5 336
1 569
4 181
14 389
524
25 999
At 31
December 2021
5 484
1 461
4 648
13 121
187
24 900
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S 2
APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius
FOR THE YEAR ENDED 31 DECEMBER 2021
(all tabular amounts are in EUR thousands unless otherwise stated)
32
COMPANY Buildings
Plant and
equipment
Leasehold
improve-
ments
Other PPE
Construction
in progress
Total
Cost
At 31 December 2019
9 650
2 114
5 641
14 427
38
31 870
Additions
-
-
10
718
1 364
2 092
Disposals and write
-
offs
( 239)
( 3)
( 105)
(1 347)
( 115)
(1 809)
Transfers
-
-
679
-
( 679)
-
At 31 December 2020 9 411
2 111
6 225
13 798
608
32 153
Additions
2
27
15
1 559
2 290
3 893
Disposals and
write
-
offs
-
( 14)
(1 096)
(2 335)
(1 054)
(4 499)
Transfers
394
-
1 474
( 24)
(1 844)
-
At 31 December 2021
9 807
2 124
6 618
12 998
-
31 547
Accumulated depreciation
At 31 December 2019
4 100
412
3 214
10 724
-
18 450
Charge for the year
214
133
848
1 203
-
2 398
Disposals and write
-
offs
( 239)
( 3)
( 105)
(1 343)
-
(1 690)
At 31 December 2020 4 075
542
3 957
10 584
-
19 158
Charge for the year
248
135
877
1 179
-
2 439
Disposals and write
-
offs
-
( 14)
(1 096)
(2 224)
-
(3 334)
At 31 December 2021
4 323
663
3 738
9 539
-
18 263
Impairment charge
At 31 December 2019
-
-
22
68
-
90
Charge for the
year (reversal)
153
47
200
At 31 December 2020 -
-
175
115
-
290
Charge for the year (reversal)
( 105)
( 66)
( 171)
At 31 December 2021
-
-
70
49
-
119
Carrying amount
At 31
December 2019
5 550
1 702
2 405
3 635
38
13 330
At 31 December 2020
5 336
1 569
2 093
3 099
608
12 705
At 31 December 2021 5 484
1 461
2 810
3 410
-
13 165
The Group's and the Company's depreciation expense is recognized in the statements of comprehensive income under selling costs.
At 31 December 2021 the Group’s and the Company’s buildings with the carrying amount of EUR 4 735 thousand (2020: EUR 4 578
thousand) have been pledged as security for outstanding loans from financial institutions (Note 24).
As of December 31 2021 and December 31 2020, the Company had no buildings leased to third parties.
At 31 December the acquisition cost of the fully depreciated property, plant and equipment still in use was as follows:
GROUP COMPANY
2021 2020 2021 2020
Plant and equipment
1 024
243
1 024
213
Other PPE
14 552
14 905
4 499
4 497
Total
15 576
15 148
5 523
4 710
The main cash generating unit of the Group and the Company is a store. The Group and the Company has tested PPE used in stores
operations for impairment in accordance with the accounting policies stated in Note 2.9.
Estimation of the value in use was based on the discounted post-tax cash flows (DCF) of the latest available business plan. DCF was
estimated over remaining useful life of leasehold improvements (vast majority of premises are leased). For the calculation of future cash
flows in 2022 and in later years, each cash generating unit was assessed individually, whereas net sales and personnel costs growth was
established on country or brand level (10 per cent of the earnings before interest, taxes, depreciation, and amortization growth rate was
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S 2
APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius
FOR THE YEAR ENDED 31 DECEMBER 2021
(all tabular amounts are in EUR thousands unless otherwise stated)
33
used for all cash generating units in 2020). The weighted average cost of capital (further – WACC) of 10 per cent post-tax (WACC of 12 per
cent pre-tax - in 2020) was used for value in use estimation.
Based on the calculations performed the management concluded that impairment in the amount of EUR 527 thousand for the Group
(2020: EUR 1 223 thousand) and EUR 119 thousand for the Company (2020: EUR 290 thousand) should be recorded against PPE in the
statement of financial position. The Group and the Company in 2021 reversed impairment losses of EUR 696 thousand and EUR 171
thousand respectively (2020: recognised impairment losses of EUR 993 thousand and EUR 200 thousand for the Group and the Company
respectively).
Impairment losess reversed in the period were mostly related to non-current assets of CGUs, which were closed during the year, as well
as to the decrease of carrying value of non-current assets associated to operating CGUs due to depreciation. There were also few cases,
where due to earning performance, estimated flows make it possible to recover the value of the assets associated with the CGUs and,
consequently, the impairment losses recognised in prior year are fully or partially reversed.
If future operating cash flows in 2022 and in later years were reduced by 5 per cent, the Group and the Company in 2021 would have
recognized additional PPE impairment amounting to EUR 17 thousand and EUR 2 thousand, respectively.
If the estimated post-tax discount rate applied to the discounted cash flows for cash generating units had been 1 per cent higher than
management estimates (for example 11 per cent instead of 10 per cent), the Group and the Company in 2021 would have recognised by
EUR 17 thousand and EUR 2 thousand higher impairment against PPE, respectively.
The Management does not expect material changes in estimations made in the near future, except those disclosed in Note 2.2 (a).
13. INTANGIBLE ASSETS
At 31 December intangible assets consisted of the following:
GROUP COMPANY
Licenses
and rights
acquired
Software Total
TotalTotal
Total
Licenses
and rights
acquired
Software Total
TotalTotal
Total
Cost
At 31 December 2019
292
993
1 285
197
973
1 170
Additions
144
165
309
120
165
285
Write
-
offs
-
( 1)
( 1)
-
( 1)
( 1)
At 31 December 2020
436
1 157
1 593
317
1 137
1 454
Additions
71
179
250
75
179
254
Write
-
offs
( 5)
-
( 5)
-
-
-
At 31 December 2021 502
1 336
1 838
392
1 316
1 708
Accumulated amortisation
At 31 December 2019
161
814
975
84
794
878
Charge for the year
45
40
85
40
40
80
Write
-
offs
-
( 1)
( 1)
-
( 1)
( 1)
At 31 December 2020
206
853
1 059
124
833
957
Charge for the year
71
72
143
65
72
137
Write
-
offs
-
-
-
-
-
-
At 31 December 2021 277
925
1 202
189
905
1 094
Carrying amount
At 31 December 2019
131
179
310
113
179
292
At 31 December 2020
230
304
534
193
304
497
At 31 December 2021 225
411
636
203
411
614
The Group's and the Company's amortisation expense is recognized in the statements of comprehensive income under selling costs.
At 31 December the acquisition cost of fully amortized intangible assets still in use was as follows:
GROUP COMPANY
2021 2020 2021 2020
Licenses
154
133
79
58
Software
821
797
804
780
Total 975
930
883
838
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S 2
APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius
FOR THE YEAR ENDED 31 DECEMBER 2021
(all tabular amounts are in EUR thousands unless otherwise stated)
34
14. INVESTMENTS IN SUBSIDIARIES
The Company’s investments in subsidiaries at 31 December are as follows:
Name
Country of
incorporation
Cost
2021
Ownership,
%
2020
Ownership,
%
UAB Apranga LT
Lithuania
724
100
724
100
UAB Apranga BPB LT
Lithuania
145
100
145
100
UAB Apranga PLT
Lithuania
87
100
87
100
UAB Apranga SLT
Lithuania
87
100
87
100
UAB Apranga MLT
Lithuania
87
100
87
100
UAB Apranga HLT
Lithuania
75
100
75
100
UAB Apranga OLT
Lithuania
50
100
50
100
UAB Apranga Ecom LT
Lithuania
10
100
10
100
SIA Apranga
Latvia
2 175
100
2 175
100
SIA Apranga LV
Latvia
153
100
153
100
SIA Apranga BPB LV
Latvia
86
100
86
100
SIA Apranga PLV
Latvia
86
100
86
100
SIA Apranga SLV
Latvia
85
100
85
100
SIA Apranga MLV
Latvia
86
100
86
100
SIA Apranga HLV
Latvia
50
100
50
100
SIA Apranga OLV
Latvia
50
100
50
100
SIA
Apranga Ecom LV
Latvia
3
100
3
100
OU Apranga
*
Estonia
447
100
447
100
OU Apranga Estonia
Estonia
128
100
128
100
OU Apranga BEE
Estonia
96
100
96
100
OU Apranga PB Trade
Estonia
96
100
96
100
OU Apranga ST Retail
Estonia
96
100
96
100
OU Apranga MDE
Estonia
2
100
2
100
OU Apranga HEST
Estonia
50
100
50
100
OU Apranga Ecom EE
Estonia
10
100
10
100
Total investments
4 963
4 963
*
At 31 December
2021
t
he Company directly owned 14.91% shares and indirectly through its subsidiary owned the rest 85.09% of shares (At 31
December 2020: 14.91% and 85.09%, respectively)
The changes in investments are as follows:
2021 2020
Beginning of the year
4 963
4 963
At end of the year
4 963
4 963
15. INVENTORIES
Group Company
2021 2020 2021 2020
Goods for resale
38 850
38 818
19 834
21 313
Write
-
down of goods for
resale to net realisable value*
(4 034)
(4 327)
(1 974)
(2 128)
Return assets
398
297
64
61
Goods in transit
43
93
43
93
Materials and spare parts
652
553
558
420
Total
35 909
35 434
18 525
19 759
*Acquisition cost of write
-
down of goods for resale to net
realisable value
19 426
18 979
9 912
10 891
At 31 December 2021 inventories of the Group and the Company have been pledged as security for outstanding loans from financial
institutions (Note 24). The total carrying amount of Group’s pledged inventories as at 31 December 2021 was EUR 11 296 thousand,
Company’s - EUR 7 896 thousand (EUR 11 296 thousand and EUR 7 896 thousand as at 31 December 2020, respectively).
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S 2
APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius
FOR THE YEAR ENDED 31 DECEMBER 2021
(all tabular amounts are in EUR thousands unless otherwise stated)
35
16. NON-CURRENT ASSETS HELD FOR SALE
At 31 December 2020 non-current assets held for sale consisted of the 91 per cent ownership in UAB Palangos Varuna. As at 31 December
2020, Group and Company recognized impairment losses of EUR 9 thousand for the non-current assets held for sale. In 2020, liquidation
proceedings were initiated against UAB Palangos Varūna. In 2021, the liquidation procedure was completed, the net loss was EUR 0.6
thousand.
17. PREPAYMENTS
At 31 December prepayments consisted of the following:
GROUP COMPANY
2021 2020 2021 2020
Prepayments
1 762
2 575
1 359
1 310
Less non
-
current portion of prepayments
( 416)
(1 465)
( 188)
( 230)
Current portion of prepayments 1 346
1 110
1 171
1 080
The major share of prepayments are prepayments to suppliers for goods, which are subsequently used to settle amounts due.
18. FINANCIAL INSTRUMENTS BY CATEGORY
The accounting policies for financial instruments have been applied to the line items at 31 December below:
GROUP COMPANY
Category
-
Financial
assets at amortised cost
Category
-
Financial
assets at amortised cost
Assets as per statement of financial position: 2021 2020 2021 2020
Trade and other receivables
5 476
2 147
12 409
11 821
Cash and cash equivalents
29 743
26 209
17 192
19 863
Total 35 219
28 356
29 601
31 684
Category - at fair value Category - at fair value
Shares of Verslo Trikampis UAB (level 3)
2 400
2 400
2 400
2 400
Long
-
term Government bonds (level 1)
735
732
735
732
Total 3 135
3 132
3 135
3 132
Total financial assets 38 354
31 488
32 736
34 816
In 2014, the Company has acquired the Lithuanian Government issued the long-term bonds (redemption year - 2022), which are recorded
as financial assets at fair value through other comprehensive income. In June 2018, the Company acquired shares of the investment
company UAB Verslo trikampis (formerly UAB LIM Verslo Trikampio NT Fondas), which are recognized as financial assets at fair value
through profit or loss. Refer to the accounting policies in Note 2.13,
Financial assets and liabilities
.
The management concluded that fair value of the investment in shares of UAB Verslo Trikampis corresponded to the book value,
therefore the Group and the Company did not recognize income from change in value in 2021. In 2020, the Group and the Company
recognized in profit EUR 200 thousand.
GROUP COMPANY
Category
-
Financial
liabilities measured at
amortised cost
Category
-
Financial
liabilities measured at
amortised cost
2021 2020 2021 2020
Liabilities as per statement of financial position:
Borrowings
200
500
5 400
8 668
Lease liabilities
67 075
66 694
28 858
25 890
Trade and other payables
13 106
9 956
4 215
3 444
Total
80 381
77 150
38 473
38 002
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S 2
APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius
FOR THE YEAR ENDED 31 DECEMBER 2021
(all tabular amounts are in EUR thousands unless otherwise stated)
36
The following methods and assumptions are used to estimate the fair value of each class of financial instruments:
a) The carrying amount of current trade and other accounts receivable, current trade and other accounts payable and current
borrowings approximates their fair value due to short term maturities (Level 3);
b) The fair value of non-current debt is based on the quoted market price for the same or similar issues or on the current rates
available for debt with the same maturity profile. The fair value of non-current borrowings with variable interest rates
approximates their carrying amounts (Level 3);
c) The value of investment in Verslo trikampis UAB fund is calculated as the number of fund units held multiplied by the value of
the fund unit as at reporting date (Level 3). The valuation of the fund is performed using DCF model.
19. CREDIT QUALITY OF FINANCIAL ASSETS
Total credit risk exposure of the Group and the Company is provided below. Since there are no material overdue or with increased credit
risk items, provision matrix is not provided in these financial statements.
GROUP COMPANY
2021 2020 2021 2020
Financial assets at fair value
3 135
3 132
3 135
3 132
Trade and other receivables with no history of counterparty
defaults
5 476 2 147 1 187 1 024
Receivables from related parties (Note 28)
-
-
11 222
10 797
Cash at bank or their parent companies that have high credit
ratings (cash on hand or in transit is excluded)
27 152 24 522 16 642 19 830
Total 35 763
29 801
32 186
34 783
20. TRADE AND OTHER RECEIVABLES
At 31 December trade and other receivables consisted of the following:
GROUP COMPANY
2021 2020 2021 2020
Trade receivables from subsidiaries (Note 28)
-
-
9 912
8 557
Loans to subsidiaries (note 28)
-
-
1 310
2 240
Trade receivables from unrelated parties
576
361
105
95
Advance income tax
-
70
-
41
Other receivables
4 900
1 716
1 082
888
Total 5 476
2 147
12 409
11 821
Less non
-
current portion of other receivables
(2 400)
( 4)
( 46)
( 4)
Current portion 3 076
2 143
12 363
11 817
The major share of other receivable are deposits related to internet sales and receivables from suppliers for returned goods. At 31
December 2021 the Group accounted government subsidies of EUR 500 thousand under other receivables (at 31 December 2020 – EUR
0).
There were no expected significant credit lossess identified and, consequently, no allowance was accounted for as at 31 December 2021
and 2020. There were no receivables past due in 2020 and 2021.
The maximum exposure to credit risk at the reporting date is the carrying value of each class of receivable mentioned above, except of
advance income tax. The Group and the Company does not hold any collateral as security.
All the Company’s loans granted to subsidiaries are denominated in EUR currency.
The interest rate at 31 December 2021 is 1.5 per cent (2020: 1.5 per cent), maturity date – 31 December 2022 (2020: 31 December 2021).
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S 2
APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius
FOR THE YEAR ENDED 31 DECEMBER 2021
(all tabular amounts are in EUR thousands unless otherwise stated)
37
21. CASH AND CASH EQUIVALENTS
At 31 December cash and cash equivalents consisted of the following:
GROUP COMPANY
2021 2020 2021 2020
Cash at bank
27 152
24 522
16 642
19 830
Cash on hand
564
189
249
39
Cash in transit
2 027
1 498
301
( 6)
Total
29 743
26 209
17 192
19 863
Cash in certain bank accounts and future cash inflows into these accounts were pledged to banks as security for credit facilities granted.
At 31 December 2021, the cash balances of the Group and the Company in the pledged accounts amounted to EUR 11 641 thousand (2020:
EUR 19 830 thousand) (Note 24).
Cash and cash equivalents include the following for the purposes of the cash flow statement:
GROUP COMPANY
2021 2020 2021 2020
Cash and cash equivalents
29 743
26 209
17 192
19 863
Total
29 743
26 209
17 192
19 863
Presented below is the analysis of the credit quality of balances of cash and cash equivalents, except cash on hand and cash in transit,
based on ratings established by the rating agency S&P (parent banks of the banks in whose accounts the Group's revenues are collected):
GROUP COMPANY
2021 2020 2021 2020
A+
27 152
24 504
16 642
19 830
BBB+
-
18
-
-
Total
27 152
24 522
16 642
19 830
22. SHARE CAPITAL
At 31 December 2021 issued share capital of the Company consisted of 55 291 960 (2019 and 2020: 55 291 960) ordinary shares at par value
of EUR 0.29 each. All issued shares are fully paid.
Subsidiaries did not hold any shares of the Company as of 31 December 2021 and 2020. The Company did not hold its own shares as of 31
December 2021 and 2020.
23. LEGAL RESERVE AND PROFIT DISTRIBUTION
Under Lithuanian Law on Companies the Company has to allocate 1/20 of its net profit to the legal reserve until it reaches 1/10 of the
Company’s authorised capital (up to EUR 1 604 thousand as at 31 December 2021 and 31 December 2020). Legal reserve is fully formed.
On 29 April 2021 the Company’s shareholders’ meeting decided not to pay out dividends for 2020 year (On 30 April 2020 the Company’s
shareholders’ meeting decided not to pay out dividends for 2019 year).
In respect of the current year, the Board of directors propose a dividend of EUR 19 905 thousand to be paid to the shareholders. This
dividend amount is subject to approval by shareholders at the Annual Shareholder’s Meeting.
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S 2
APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius
FOR THE YEAR ENDED 31 DECEMBER 2021
(all tabular amounts are in EUR thousands unless otherwise stated)
38
24. BORROWINGS
At 31 December the carrying amounts of the borrowings consisted of the following:
GROUP COMPANY
2021 2020 2021 2020
Long term borrowings
Bank credit lines and loans
-
200
-
200
Total -
200
-
200
Short term borrowings
Bank credit lines and
loans
200
300
200
300
Borrowings from subsidiaries
-
-
5 200
8 168
Total
200
300
5 400
8 468
Total borrowings
200
500
5 400
8 668
The bank credit lines are secured by cash in certain of bank accounts (Note 21), some of buildings (Note 12) and part of inventories (Note
15).
At 31 December all amounts of the borrowings are denominated in EUR currency.
The weighted average interest rates at the end of the reporting period were as follows:
GROUP COMPANY
2021 2020 2021 2020
Bank credit lines and loans
1.2%
1.2%
1.2%
1.2%
Bank overdraft
1.4%
1.4%
1.4%
1.4%
Borrowings from subsidiaries
-
-
0.0%
0.0%
Exposure of the Group’s and the Company’s borrowings to interest rate changes and the contractual repricing dates fall into period of 6
month or less.
The Group’s and the Company’s borrowing facilities contracted but undrawn as at the end of the reporting period were EUR 21 850
thousand (2020: EUR 21 137 thousand), out of which EUR 8 000 thousand can be utilised until 30 June 2022 and EUR 13 500 thousand –
until 30 November 2023.
The Group has to comply with financial covenants imposed in the agreements with Luminor Bank AS and SEB bankas AB, such as equity
to assets, financial debt to EBITDA as well as net financial debt to EBITDA. As at 31 December 2020 and as at 31 December 2021, the Group
complied with all financial covenants.
25. Trade and other payables
At 31 December trade and other payables consisted of the following:
GROUP COMPANY
2021 2020 2021 2020
Payables to other related parties
106
106
106
106
Trade payables
7 181
5 896
2 124
1 596
Employee benefits and related payables
4 279
2 821
2 316
1 475
Contract liabilities
550
364
185
119
Refund liabilities
645
471
117
100
Taxes payable
3 798
1 854
1 253
335
Accrued expenses and other
payables
5 174
3 483
1 868
1 642
Total
21 733
14 995
7 969
5 373
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S 2
APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius
FOR THE YEAR ENDED 31 DECEMBER 2021
(all tabular amounts are in EUR thousands unless otherwise stated)
39
26. LEASES
Set out below are the carrying amounts of right-of-use assets recognized and the movements during the period:
Group Company
Premises Vehicles In total Premises Vehicles In total
As at 1 January 2021
63 936
267
64 203
24 748
203
24 951
Additions
12 831
129
12 960
7 793
122
7 915
Impairment (charge) reversal
151
-
151
300
-
300
Depreciation (expense)
(12 985)
( 135)
(13 120)
(5 002)
( 104)
(5 106)
As at 31
December 2021
63 933
261
64 194
27 839
221
28 060
Group Company
Premises Vehicles In total Premises Vehicles In total
As at 1 January 2020 68 324
272
68 596
25 826
205
26 031
Additions
9 587
125
9 712
4 590
96
4 686
Impairment (charge) reversal
( 569)
-
( 569)
( 464)
-
( 464)
Depreciation (expense)
(13 406)
( 130)
(13 536)
(5 204)
( 98)
(5 302)
As at 31 December 2020 63 936
267
64 203
24 748
203
24 951
The Group and the Company has tested right-of-use assets for impairment in accordance with the accounting policies stated in Note 2.9.
Estimation of the value in use was calculated using the same method and using the same indicators as in Note 12.
Based on the calculations performed the management concluded that impairment in the amount of EUR 868 thousand for the Group
(As at 31 December 2020: EUR 1 019 thousand) and EUR 228 thousand for the Company (As at 31 December 2020: EUR 528 thousand)
should be recorded against right-of-use assets in the statement of financial position as at 31 December 2021. The Group in 2021 have
recognised the impairment reversal of right-of-use assets of EUR 151 thousand (impairment loss of EUR 569 thousand was recognized in
2020), the Company have recognised the impairment reversal of right-of-use assets of EUR 300 thousand (impairment loss of EUR 464
thousand was recognized in 2020). Impairment of right-of-use assets is recognized in the statement of comprehensive income under
selling costs.
Impairment losess reversed in the period were mostly related to right-of-use assets of CGUs, which were closed during the year, as well
as to the decrease of carrying value of right-of-use assets associated to operating CGUs due to depreciation. There were also few cases,
where due to earning performance, estimated flows make it possible to recover the value of right-of-use assets associated with the CGUs
and, consequently, the impairment losses recognised in prior year are fully or partially reversed.
If future operating cash flows in 2022 and in later years were reduced by 5 per cent, the Group and the Company in 2021 would have
recognized additional right-of-use assets impairment amounting to EUR 48 thousand and EUR 5 thousand, respectively.
If the estimated post-tax discount rate applied to the discounted cash flows for cash generating units had been 1 per cent higher than
management estimates (for example 11 per cent instead of 10 per cent), the Group and the Company in 2021 would have recognised by
EUR 46 thousand and EUR 5 thousand higher impairment against right-of-use assets, respectively.
Set out below are the carrying amounts of lease liabilities (presented under “Current lease liabilities” and “Non-current lease liabilities”)
and the movements during the period:
Group Company
As at 1 January 2021
66 694
25 890
Additions
12 960
7 915
Accretion of interest
994
406
Payments
(11 172)
(4 440)
Rent discounts
(2 401)
( 913)
As at 31 December 2021 67 075
28 858
Current
13 251
5 261
Non
-
current
53 824
23 597
67 075
28 858
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S 2
APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius
FOR THE YEAR ENDED 31 DECEMBER 2021
(all tabular amounts are in EUR thousands unless otherwise stated)
40
Group Company
As at 1 January 2020
69 776
26 333
Additions
9 712
4 686
Accretion of interest
1 002
379
Payments
(13 521)
(5 508)
Rent discounts
( 275)
-
As at 31 December 2020 66 694
25 890
Current
12 758
4 897
Non
-
current
53 936
20 993
The following are the amounts recognized in profit or loss:
Group Company
2021
Depreciation expense of right
-
of
-
use assets (included in selling costs)
13 120
5 106
Interest
expense on lease liabilities (included in finance costs)
994
406
Expenses relating
to short
-
term leases (included in selling costs)
-
-
Impairment charge (included in selling costs)
( 151)
( 300)
Variable lease payments (included in
selling costs)
4 262
1 304
Rent discounts (included in selling costs)
(2 401)
( 913)
Total amount recognized in profit or loss
15 824
5 603
Group Company
2020
Depreciation expense of right-of-use assets (included in selling costs) 13 536
5 302
Interest expense on lease liabilities (included in finance costs) 1 002
379
Expenses relating to short-term leases (included in selling costs) 146
146
Impairment charge (included in selling costs) 569
464
Variable lease payments (included in selling costs) 1 909
101
Rent discounts (included in selling costs) ( 275)
-
Total amount recognized in profit or loss 16 887
6 392
The Company/Group has lease contracts for Premises that contain variable payments based on the turnover of stores located in those
Premises. Management’s objective is to align the lease expense with the revenue earned. The Company/Group accounted rent
concessions obtained from lessors as negative variable lease payments (rent discounts) in accordance with practical expedient applied.
The following provides information on the Company’s/Group’s variable lease payments in 2020 and 2021, including the magnitude in
relation to fixed payments:
Group Company
Fixed
payments
Variable
payments
In total
Fixed
payments
Variable
payments
In total
Year ended 31 December 2021
Variable rent with minimum payment
11 739
161
11 900
3 875
103
3 978
Variable rent only
-
1 700
1 700
-
288
288
Total 11 739
1 861
13 600
3 875
391
4 266
Year ended 31 December 2020
Variable rent with minimum payment
12 050
-
12 050
4 193
-
4 193
Variable rent only
-
1 634
1 634
-
101
101
Total 12 050
1 634
13 684
4 193
101
4 294
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S 2
APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius
FOR THE YEAR ENDED 31 DECEMBER 2021
(all tabular amounts are in EUR thousands unless otherwise stated)
41
27. TAX LIABILITIES
In 2021 and in 2020, the majority of the companies belonging to the Group exercised the right to conclude tax loan agreements
(hereinafter - TLA) with the state’s tax inspectorates of the respective countries on preferential terms. Interests are not charged on
concluded TLA. The terms of the concluded contracts are from 14 to 36 months. TLA for the total amount of EUR 3.7 million were
concluded in 2021 for the Group and EUR 1.4 million for the Company (respectively in 2020 -12.8 million and 6.0 million EUR) . In December
2021, the Group companies repaid the full remaining amount of TLA ahead of schedule. At the end of the previous reporting year, the
amount of unpaid TLA taxes amounted to EUR 12.6 million in the Group and EUR 6.0 million in the Company.
28. RELATED PARTY TRANSACTIONS
The parties are considered related when one party has the possibility to control the other or have significant influence over the other
party in making financial and operating decisions. There is no allowance for intercompany receivables as expected credit losses are
immaterial.
The Company’s and the Group’s transactions with related parties and balances arising from these transactions as of 31 December were
as follows:
Related parties
Accounts payable
Accounts receivable
and loans granted
Income Purchases
2021 2020 2021 2020 2021 2020 2021 2020
UAB Koncernas MG Baltic
(the ultimate parent company)
10
14
-
-
-
-
109
118
As per ultimate parent company associated companies:
UAB Mineraliniai vandenys
-
-
-
-
-
-
20
20
UAB Mediafon Technology
3
-
-
-
-
-
24
-
UAB MG Baltic Investment
4
5
1
-
-
-
52
53
UAB DARNU GROUP
-
-
-
-
-
-
-
8
LNK Group
4
3
-
-
1
29
2
42
UAB Eminta
85
84
-
-
-
-
674
638
Total
106
106
1
-
1
29
881
879
Prevailing types of related party contracts are rent, management service fee, advertising, centralised services (telecommunications,
utilities and etc.).
The Company’s transactions with subsidiaries and balances arising from these transactions as of 31 December were as follows:
Subsidiaries
Borrowings and
accounts payable
Loans and accounts
receivable
Income Purchases
2021 2020 2021 2020 2021 2020 2021 2020
UAB Apranga LT
2 049
4 524
66
13
1 006
2 330
116
82
UAB Apranga BPB LT
920
1 175
18
2
200
375
15
11
UAB Apranga PLT
609
659
14
1
141
313
13
8
UAB
Apranga SLT
305
491
11
-
166
325
63
11
UAB Apranga MLT
895
897
27
-
275
468
63
23
UAB Apranga HLT
315
331
19
-
109
88
3
25
UAB Apranga OLT
107
107
5
2
43
85
2
3
UAB Apranga Ecom LT
-
-
-
-
-
-
-
-
SIA Apranga
-
-
6 029
5 251
7 558
9 134
122
100
SIA Apranga LV
-
-
35
53
459
1 445
20
42
SIA Apranga BPB LV
-
-
5
3
68
70
2
3
SIA Apranga PLV
-
-
6
163
52
66
1
3
SIA Apranga SLV
-
-
4
3
55
60
11
3
SIA Apranga MLV
-
-
117
295
148
174
5
13
SIA Apranga HLV
-
-
7
61
41
40
-
-
SIA Apranga OLV
-
-
114
294
30
38
1
-
SIA Apranga Ecom LV
-
-
-
-
-
-
-
-
OU Apranga
-
-
3 587
3 191
5 801
5 237
27
20
OU Apranga Estonia
-
-
332
518
411
381
16
29
OU Apranga BEE
-
-
139
67
42
243
-
2
OU Apranga PB Trade
-
-
584
723
45
51
1
3
OU Apranga ST Retail
-
-
87
111
35
233
11
3
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S 2
APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius
FOR THE YEAR ENDED 31 DECEMBER 2021
(all tabular amounts are in EUR thousands unless otherwise stated)
42
Subsidiaries
Borrowings and
accounts payable
Loans and accounts
receivable
Income Purchases
2021 2020 2021 2020 2021 2020 2021 2020
OU Apranga MDE
-
-
9
6
100
287
4
6
OU Apranga HEST
-
-
7
40
49
39
-
-
OU Apranga Ecom EE
-
3
-
-
-
-
-
-
Total
5 200
8 187
11 222
10 797
16 834
21 482
496
390
Prevailing types of intra-group transactions are centralised supplies of goods for resale, management service fees, centralised purchasing
of services (telecommunications, IT, utilities and etc.), financing, distribution of earnings. Dividend income received from the subsidiaries
is presented in ‘
Income received
’ together with other income. In 2021, the Company did not receive dividend income from subsidiaries
(in 2020 - EUR 4,000 thousand). This article also accounted for sales of goods to subsidiaries SIA Apranga and OU Apranga, which in 2021
amounted to EUR 6 673 thousand and EUR 5 085 thousand respectively (EUR 8 155 thousand and EUR 4 664 thousand in 2020,
respectively).
The debts of Group companies are offset each month, and the remaining portion of the debt is paid no later than in 30 days. The
Company’s/Group’s and related parties debts are paid within 30 days.
The Company has concluded short-term loan agreements with its subsidiaries, which, in case of need, are borrowed for 1 month Euribor
plus margin interests (Note 24).
Guarantees
GuaranteesGuarantees
Guarantees
provided
providedprovided
provided
on
onon
on
behalf
behalfbehalf
behalf
of
ofof
of
related
relatedrelated
related
parties
partiesparties
parties
Guarantees provided on behalf of related parties are disclosed in Note 29.
Compensation
CompensationCompensation
Compensation
of
ofof
of
key
keykey
key
management
managementmanagement
management
personnel
personnelpersonnel
personnel
The General Director and other Directors of the Company are considered to be the key management of the Group. There were 7 members
of the key management as at 31 December 2021 (7 members of the key management as at 31 December 2020). 2 of them also belong to
the Management Board, which consists of 6 members.
GROUP COMPANY
2021 2020 2021 2020
Remuneration 2 051 1 674 1 972 1 599
Social security 36 18 35 17
Average number of key managers 7 7 7 7
On 29 April 2021 and on 30 April 2020 the Company’s shareholders’ meetings decided not to pay out annual bonuses to the key
management.
29. COMMITMENTS AND CONTINGENCIES
Legal
LegalLegal
Legal
proceedings
proceedingsproceedings
proceedings
As of 31 December 2021 and 2020 the Company and the Group were not involved in any legal process, which in the opinion of
management, would have a material impact on the financial statements.
Guarantees
GuaranteesGuarantees
Guarantees
As of 31 December 2021, guarantees issued by the credit institutions on behalf of the Company to secure the obligations of its subsidiaries
to their suppliers totaled EUR 13 734 thousand (31 December 2020: EUR 14 159 thousand). The letters of credit and guarantees provided
to suppliers by the credit institutions on behalf of the Group as of 31 December 2021 amounted to EUR 15 150 thousand (31 December
2020: EUR 15 843 thousand).
As of 31 December 2021 and 2020 the Company had no guarantees to the credit institutions issued to secure the obligations of
subsidiaries. As of 31 December 2021, the Company’s guarantees issued to secure the obligations of its subsidiaries to their suppliers
totaled EUR 499 thousand (31 December 2020: EUR 818 thousand).
The management of the Group believes that the subsidiaries on behalf of which guarantees were issued will meet their liabilities to the
creditors, therefore, no provisions in respect of these guarantees were accounted for in the financial statements as at 31 December 2021
and 31 December 2020.
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S 2
APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius
FOR THE YEAR ENDED 31 DECEMBER 2021
(all tabular amounts are in EUR thousands unless otherwise stated)
43
Options
OptionsOptions
Options
granted
grantedgranted
granted
Options for assets
The Group issued irrevocable call options to INDITEX Group granting the right to purchase assets (leasehold improvements and PPE
located in the premises of shops and inventory) of subsidiaries UAB Apranga LT, UAB Apranga BPB LT, UAB Apranga PLT, UAB Apranga
SLT, UAB Apranga MLT, UAB Apranga HLT, UAB Apranga OLT, SIA Apranga LV, SIA Apranga BPB LV, SIA Apranga PLV, SIA Apranga SLV,
SIA Apranga MLV, SIA Apranga OLV, SIA Apranga HLV, OU Apranga Estonia, OU Apranga BEE, OU Apranga PB Trade, OU Apranga ST
Retail, OU Apranga MDE and OU Apranga HEST operating brands of INDITEX Group (ZARA, ZARA HOME, BERSHKA, PULL AND BEAR,
STRADIVARIUS, MASSIMO DUTTI and OYSHO). The options are exercisable in 2024 and are firmly and irrevocably granted thus the Group
cannot waive them.
The Group also issued irrevocable call options to ALDO Group granting the right to purchase assets (PPE located in the premises of shops
and inventory) of Company and subsidiaries SIA Apranga and OU Apranga operating the brand of ALDO. The options are exercisable in
2022 and are firmly and irrevocably granted thus the Group cannot waive them.
Options for lease rights
Subsidiaries UAB Apranga LT, UAB Apranga BPB LT, UAB Apranga PLT, UAB Apranga SLT, UAB Apranga MLT, UAB Apranga HLT,
UAB Apranga OLT, SIA Apranga LV, SIA Apranga BPB LV, SIA Apranga PLV, SIA Apranga SLV, SIA Apranga MLV, SIA Apranga OLV, SIA
Apranga HLV, OU Apranga Estonia, OU Apranga BEE, OU Apranga PB Trade, OU Apranga ST Retail, OU Apranga MDE and OU Apranga
HEST operating brands of INDITEX Group (ZARA, ZARA HOME, BERSHKA, PULL AND BEAR, STRADIVARIUS, MASSIMO DUTTI and OYSHO)
granted irrevocable options exercisable in 2024 by virtue of which INDITEX Group might acquire the lease rights and might become
lessee in all or part of the lease agreements for the premises where ZARA, ZARA HOME, BERSHKA, PULL AND BEAR, STRADIVARIUS,
MASSIMO DUTTI and OYSHO stores are located.
Company and its subsidiaries SIA Apranga and OU Apranga operating brand ALDO granted irrevocable options exercisable in 2022 by
virtue of which ALDO Group might acquire the lease rights and might become lessee in the lease agreements for the premises where
ALDO stores are located.
Based on historical information and numerous extentions of the cooperation agreements and terms of cooperation the management of
the Group believes that the agreement parties will not use any above options.
30. EVENTS AFTER THE REPORTING PERIOD
On 24 February 2022, the Russian Federation has launched an invasion of the Republic of Ukraine. Shortly after the invasion, the EU and
rest of the world, including global bodies, imposed wide-ranging set of restrictive measures against Russia, which is updated and
expanded on a regular basis. As disclosed in Note 2, this non-adjusting subsequent event was not reflected in the significant estimates
and assumptions as at 31 December 2021. Until the date of authorisation of these financial statements, the restrictive measures imposed
had no significant impact on the Company’s and the Group performance, no operations had been suspended and no significant direct
losses related to the restrictive measures had been incurred at the date of the financial statements.
44
APB
APRANGA
Consolidated Annual Report
For the year ended 31 December 2021
C O N S O L I D A T E D A N N U A L R E P O R T 3 . 1
APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius
FOR THE YEAR ENDED 31 DECEMBER 2021
(all tabular amounts are in EUR thousands unless otherwise stated)
45
1. GENERAL INFORMATION
Consolidated annual report is prepared for the year ended 31 December 2021.
Name of the Issuer: public limited liability trade company “Apranga”
Legal form: public limited liability company
Date and place of registration: 1
st
March 1993, Board of Vilnius City
Code of Enterprise: 121933274
Registered office: Ukmerges str. 362, Vilnius, LT-14311, Lithuania
Telephone number: +370 5 2390808
E-mail address: info@apranga.lt
Internet address: www.aprangagroup.com
At 31 December 2021 Apranga Group (hereinafter the Group) consisted of the parent company APB Apranga (hereinafter the
Company) and its 100 per cent owned 25 subsidiaries. The principal activity of the Company and its subsidiaries is retail trade
of apparel.
Structure of the Group at 31 December 2021:
For more information on subsidiaries refer to Note 1 and Note 14 to Consolidated financial statements.
2. OPERATING HIGHLIGHTS
In 2021, operational priorities have been significantly changed by the impact of continuing global pandemic, with numerous
blockages and restrictions on trade and human life. We have paid special attention to the safety and health of our employees
and customers. Thanks to our dedicated team, we have been able to successfully cope with the biggest challenges of the
pandemic, significantly increase e-commerce volumes, accelerate reconstruction and modernization of stores, quickly restore
sales volumes after the third phase of closure in the spring.
2.1 RETAIL MARKET OVERVIEW
The retail turnover
(including VAT) of Apranga Group reached EUR 228.4 million in 12 months 2021 or by 11.8% more than in
the same period of 2020. In 2021, the retail turnover of Apranga Group in Lithuania was EUR 146 million and increased by 23.4%
year-on-year. In 2021, the retail turnover of Apranga Group in Latvia was EUR 46.4 million and decreased by 11.4% year-on-year,
in Estonia has made EUR 36 million and increased by 7.4% year-on-year.
Due to epidemic coronavirus (COVID-19) infection, from 16 December 2020, all the Group’s stores in Lithuania were temporarily
closed. Stores in Lithuania with a separate entrance from outside and a sales area not exceeding 300 square meters had been
open since 15 February 2021. All stores with a separate entrance from outside had been open since 15 March 2021. All Group’s
stores have been reopened in Lithuania from 19 April 2021, however, stores operating in shopping malls were not allowed to
work on weekends, unless they had separate entrance from outside. Eventually, all Group’s stores have been open in Lithuania
as of 29 May 2021. In Latvia, stores were temporarily closed from 19 December 2020. Stores with a separate entrance from
outside and an area not exceeding 7,000 square meters have been open in Latvia from 7 April 2021. Group‘s stores that operate
in shopping malls and have separate entrance from outside were reopened as of 22 May 2021. Eventually, all Group’s stores
have been open in Latvia as of 3 June 2021. However, due to the aggravation of the coronavirus situation, from 14 October 2021
the operation of stores in shopping malls on weekends were banned in Latvia, and from 21 October 2021 all Group’s stores in
Latvia were temporarily closed. All Group’s stores have been reopened in Latvia from 15 November 2021, however, stores
APB "APRANGA"
LITHUANIA LATVIA ESTONIA
SIA "Apranga" OÜ "Apranga"
UAB "Apranga LT" SIA "Apranga LV" OÜ "Apranga Estonia"
UAB "Apranga BPB LT" SIA "Apranga BPB LV" OÜ "Apranga BEE"
UAB "Apranga PLT" SIA "Apranga PLV" OÜ "Apranga PB Trade"
UAB "Apranga SLT" SIA "Apranga SLV" OÜ "Apranga ST Retail"
UAB "Apranga MLT" SIA "Apranga MLV" OÜ "Apranga MDE"
UAB "Apranga HLT" SIA "Apranga HLV" OÜ "Apranga HEST"
UAB "Apranga OLT" SIA "Apranga OLV"
UAB "Apranga Ecom LT" SIA "Apranga Ecom LV" OÜ "Apranga Ecom EE"
C O N S O L I D A T E D A N N U A L R E P O R T 3 . 1
APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius
FOR THE YEAR ENDED 31 DECEMBER 2021
(all tabular amounts are in EUR thousands unless otherwise stated)
46
operating in shopping malls were not allowed to work on weekends, unless they had separate entrance from outside. All
Group’s stores were allowed to also work on weekends as of 25 December 2021. In Estonia, all Group’s stores were temporarily
closed from 11 March 2021, and from 6 March 2021 to 11 March 2021 stores were not allowed to work on weekends. All Group‘s
stores have been reopened in Estonia from 3 May 2021. These temporary store closures had a significant impact on the
Group's generated turnover, earned profit and, accordingly, financial performance.
According to EUROSTAT data, the retail trade (except of motor vehicles, motorcycles and fuel) in 2021 in all three Baltic
countries grew between 3% and 16%. Retail sales grew the least in Latvia (3%) and the most in Lithuania (16%). The retail trade
of clothing, footwear and textiles in 2021 in Lithuania grew by 19%, if compared to 2020, and by 1%, if compared to 2019; in
Latvia fell by 3% and 20%, respectively; in Estonia grew by 11% compared to 2020, however, fell by 2%, if compared to 2019.
Retail turnover of Group‘s stores by countries (EUR thousand, VAT included):
Country
12 months
2021
12 months
2020
12 months
2019
2021/2020,
%
2021/2019,
%
Lithuania
146 003
118 336
147 470
23,4%
-
1,0%
Latvia
46 409
52 377
59 363
-
11,4%
-
21,8%
Estonia
36 010
33 532
41 124
7,4%
-
12,4%
Total: 228 422
204 245
247 957
11,8% -7,9%
In 2021, the turnover of the retail chain operated by Apranga Group amounted to EUR 146 million in the main domestic market
of Lithuania, or by 23.4% more than in 2020. The share of Lithuanian chain turnover comprised 63.9%, or by 6,0 percentage
points more than in 2020.
The retail turnover of the Apranga Group chain in foreign markets (Latvia and Estonia) reached EUR 82.4 million in 2021, or by
4.1% less, than in 2020. The foreign turnover share in total Group’s turnover has decreased from 42.1% to 36.1% during the year.
The retail turnover of the Group chain in Latvia has made EUR 46.4 million in 2021 and has decreased by 11.4% during the year.
The retail turnover of the Group chain in Estonia amounted to EUR 36 million and has increased by 7.4% in comparison to
2020.
The retail turnover of Apranga Group by quarters:
Q1 Q2 Q3 Q4 Year
2021 25 547
55 692
76 929
70 253
228 422
2020 45 857
40 864
63 765
53 759
204 245
2019 49 800
58 861
66 834
72 462
247 957
2021/2020, %
-
44,3%
36,3%
20,6%
30,7%
11,8%
2021/2019, %
-
48,7%
-
5,4%
15,1%
-
3,0%
-
7,9%
The online turnover of the Group was as follows (EUR thousand, VAT included):
12 months
2021
12 months
2020
12 months
2019
2021/2020, %
Online turnover
48 256
24 950
9 579
1.9 times
Relative weight in total turnover
21,1%
10,9%
3,9%
The Group's online turnover increased 1.9 times in 12 months of 2021, and its relative weight in total turnover increased from
10.9% to 21.1% compared to the corresponding period of the previous year. Online turnover increased particularly significantly
due to the temporary closure of physical stores during the quarantine period caused by COVID-19.
Retail turnover of Group‘s stores by chains (EUR thousand, VAT included) was as follows:
Chain
12 months
2021
12 months
2020
12 months
2019
2021/2020,
%
2021/2019,
%
Economy
1
22 524
23 240
31 991
-
3,1%
-
29,6%
Youth
2
55
064
48 666
58 655
13,1%
-
6,1%
Footwear
3 201
3 893
6 660
-
17,8%
-
51,9%
Business
3
42 545
38 216
44 802
11,3%
-
5,0%
Luxury
4
25 263
21 431
22 333
17,9%
13,1%
Zara
69 515
59 872
72 507
16,1%
-
4,1%
Outlets
10 310
8 926
11 010
15,5%
-
6,4%
Total 228 422
204 245
247 957
11,8% -7,9%
1
Apranga, Promod, s.Oliver, Tom Tailor, Orsay;
2
Aprangos galerija, Moskito, Mango, Bershka, Pull & Bear, Stradivarius, Desigual, Oysho, A|X Armani Exchange;
3
City, Massimo Dutti, Strellson, Marella, Pennyblack, Coccinelle, Tommy Hilfiger, Zara Home, Karen Millen, Calvin Klein Underwear, Liu Jo, MAX&Co.;
4
Burberry, Emporio Armani, Hugo Boss, Ermenegildo Zegna, MaxMara, Weekend MaxMara, Marina Rinaldi, Mados linija, Nude, Sandro, Maje, Hugo.
C O N S O L I D A T E D A N N U A L R E P O R T 3 . 1
APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius
FOR THE YEAR ENDED 31 DECEMBER 2021
(all tabular amounts are in EUR thousands unless otherwise stated)
47
In 2021, Economy and Footwear chains decreased in retail turnover, which was caused by closure of stores, as 5 Economy (-
16.1%) and 3 Footwear (-23.1%) stores were permanently closed throughout the year.
2.2 DEVELOPMENT AND MODERNIZATION OF THE RETAIL CHAIN
In 2017-2021 the dynamics of the number of stores and sales area was as follows:
31 12 2017 31 12 2018 31 12 2019 31 12 2020 31 12 2021
The number of stores 182 182 186 179 169
Stores area (thousand sq. m.) 84,3 82,6 93,8 92,6 90,6
During the year 2021 Apranga Group opened 5 stores, reconstructed 10 and closed 15 stores. Currently Apranga Group operates
the chain of 169 stores (102 in Lithuania, 46 in Latvia and 21 in Estonia) covering the gross area of 90.6 thousand sq. m., or by
2.1% less than a year ago.
The total area of stores by countries was as follows (thousand sq. m):
Country 31 12 2021 31 12 2020 31 12 2019 2021/2020, % 2021/2019, %
Lithuania
51,3
49,9
51,2
2,8%
0,1%
Latvia
26,8
27,0
26,8
-
0,9%
0,1%
Estonia
12,6
15,6
15,8
-
19,7%
-
20,4%
Total: 90,6 92,6 93,8 -2,1% -3,3%
In 2021, the Group opened 3 new Hugo stores in Vilnius, Kaunas and Klaipeda, 2 new outlets “Apranga Išparduotuvė” and
“Outlet space” in Vilnius. The Group also expanded and reconstructed Zara and Mango stores in Kaunas, reconstructed
Apranga store in Vilnius, Apranga and Aprangos galerija stores in Klaipėda, Stradivarius store in Kaunas, Apranga store in Riga.
In addition, the Group moved and reconstructed Mados Linija and Boss stores in Vilnius as well as Aldo store in Kaunas. The
gross area of new stores opened or reconstructed by the Group during the year 2021 was 10.4 thousand sq. m., or 2 times more
than during previous year.
The number of stores by countries was as follows:
Country 31 12 2021 31 12 2020 31 12 2019 2021/2020, % 2021/2019, %
Lithuania
102
104
108
-
1,9%
-
5,6%
Latvia
46
48
50
-
4,2%
-
8,0%
Estonia
21
27
28
-
22,2%
-
25,0%
Total: 169 179 186 -5,6% -9,1%
At 31 December the number of stores by chains was as follows:
Chain 31 12 2021 31 12 2020 31 12 2019 2021/2020, % 2021/2019, %
Economy
26
31
33
-
16,1%
-
21,2%
Youth
47
47
51
0,0%
-
7,8%
Footwear
10
13
14
-
23,1%
-
28,6%
Business
39
41
42
-
4,9%
-
7,1%
Luxury
28
28
26
0,0%
7,7%
Zara
10
11
11
-
9,1%
-
9,1%
Outlets
9
8
9
12,5%
0,0%
Total 169 179 186 -5,6% -9,1%
Net investments into development of the chain amounted to EUR 5 million in 2021. Investments (acquisitions) by assets type
are presented in Note 12 (“Property, plant and equipment”) and Note 13 (“Intangible assets”) of Notes to consolidated and
Company’s financial statements. Investments (acquisitions) by segments are disclosed in Note 4 (“Segment information”). The
Group is not engaged in activities related to research and experimental development, except to the extent of process
improvement.
C O N S O L I D A T E D A N N U A L R E P O R T 3 . 1
APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius
FOR THE YEAR ENDED 31 DECEMBER 2021
(all tabular amounts are in EUR thousands unless otherwise stated)
48
2.3 MAIN INDICATORS
Rapid growth of e-commerce, resumption of physical store sales from May, effectively controlled inventories, cost
management (especially rent and wage payments), despite the pandemic, allowed to ensure profitable operation of the
Apranga Group.
From 1 January 2019, the Group implemented a new International Financial Reporting Standard (IFRS) 16 “Leases”. Due to the
application of this standard, the Group’s and Company’s rent expenses decreased but depreciation and amortization charges
and interest expenses increased. Accordingly, it also influenced the calculation of indicators. The impact of the new standard
on the Statements of Comprehensive Income and Statements of Financial Position is disclosed in more detail in Note 26, IFRS
16 Leases.
In addition to the key figures defined or specified in the applicable IFRS financial reporting framework, the Group also provides
key financial ratios derived from or based on the prepared financial statements. These are known as Alternative Performance
Measures (APM). Definitions of APM are provided in the section No. 11 “Alternative Performance Indicators” of this report and
on the Group’s website.
The Group’s profit before income tax amounted to EUR 13.2 million in 12 months 2021, while profit before taxes was EUR 6.0
million in 12 months of 2020, i.e., 121.6% more than in the corresponding period of the previous year.
EBITDA
of the Group totalled EUR 34.1 million in 2021, and it was EUR 27.3 million in corresponding previous year period.
EBITDA margin has increased from 16.1% to 18.0% during the year. ROE and ROA ratios increased to 14.6% and 6.6%,
respectively.
Main Group Indicators 2021 2020 2019 2018 2017
Net sales, EUR thousand
189 745
169 958
205 005
187 207
182 265
Net sales in foreign markets, EUR thousand 68 502
71 424
83 197
76 740
75 157
Gross profit, EUR thousand
82 230
71 146
89 210
81 010
81 792
Gross margin, %
43,3%
41,9%
43,5%
43,3%
44,9%
Operating profit, EUR thousand
14 278
7 038
11 929
9 199
16 578
Operating profit margin, %
7,5%
4,1%
5,8%
4,9%
9,1%
Profit before income tax, EUR thousand
13 211
5 961
10 994
9 266
16 555
Profit before income tax margin, %
7,0%
3,5%
5,4%
4,9%
9,1%
Profit (loss) for the period, EUR thousand
10 896
4 936
9 240
7 565
13 875
Profit (loss) for the period margin, %
5,7%
2,9%
4,5%
4,0%
7,6%
EBITDA, EUR thousand
34 076
27 340
31 006
15 563
23 075
EBITDA margin, %
18,0%
16,1%
15,1%
8,3%
12,7%
Earnings (losses) per share (EPS), EUR
0,20
0,09
0,17
0,14
0,25
Price
-
to
-
Earnings ratio (P/E), times
10,7
23,6
12,6
11,7
10,2
Dividend / Profit for the period*, %
182,7%
0,0%
0,0%
95,0%
63,8%
Return on equity (end of the period), %
14,6%
7,8%
15,8%
13,3%
23,7%
Return on
assets (end of the period), %
6,6%
3,1%
6,0%
9,6%
17,4%
Net debt to equity, %
-
39,7%
-
28,5%
-
10,1%
-
10,4%
-
10,9%
Current ratio, times
2,0
1,9
1,4
2,7
2,9
* The year 2021 dividends proposed by the Board, not approved.
The
operating expenses
of the Group totaled EUR 68.0 million in 12 months 2021 and increased by 6.0%, comparing to the
same period 2020. Operating expenses increased less than sales, which grew by 11.6%. This was mainly driven by government
subsidies received to compensate for idle time of employees during the lock-down as well as working capital subsidies
granted by government in Latvia for closed periods. The decision of the Group's shareholders not to pay dividends for 2019
and 2020 years had a positive impact on debt and liquidity ratios.
Main Group Indicators 2021 2020 Change
Net sales, EUR thousand
189 745
169 958
11,6%
Net sales in foreign markets, EUR thousand
68 502
71 424
-
4,1%
Gross profit, EUR thousand
82 230
71 146
15,6%
Operating expenses
(67 952)
(64 108)
6,0%
Operating profit, EUR thousand
14 278
7 038
102,9%
Profit before
income tax, EUR thousand
13 211
5 961
121,6%
Net profit (losses), EUR thousand
10 896
4 936
120,7%
EBITDA, EUR thousand
34 076
27 340
24,6%
The Group’s level of inventories during the last 12 months increased by 1.3% to EUR 35.9 million. Company’s inventories
decreased by 6.3%.
C O N S O L I D A T E D A N N U A L R E P O R T 3 . 1
APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius
FOR THE YEAR ENDED 31 DECEMBER 2021
(all tabular amounts are in EUR thousands unless otherwise stated)
49
For additional information on the operations by countries of the Group refer to Note 4 to the Consolidated financial
statements.
2.4 PERSONNEL
The number of employees on 31 December 2021 and average salary by categories in 2021 were as follows:
Group Company Group Company
Employee category Number of employees Average monthly salary, EUR
Administration
179
120
2 384
3 020
Stores' personnel
1 752
551
1 152
1 261
Logistics
61
61
1 369
1 369
Total 1 992 732 1 310 1 769
In 2021 the number of employees in the Group and the Company has increased by 36 (1.8%) and increased by 50 (7.3%) people
respectively. The number of employees by education level on 31 December 2021 was as follows:
Education level Group Company
Higher
497
297
Professional
198
71
Secondary
402
131
Primary
8
2
Student
887
231
Total: 1 992 732
2.5 TRADING INFORMATION
The price of the Company shares
in 12 months 2021 increased by 12,8% from EUR 1.80 per share to EUR 2.03 per share. The
maximum share price for the 12 months period was EUR 2.10 per share, minimum share price - EUR 1.68 per share. The market
capitalization of the Company increased from EUR 100 million at the beginning of the year to EUR 112 million at the end of
December 2021. The weighted average price of 1 share during the reporting period was EUR 1.88. Company’s share turnover
was EUR 10.2 million in 12 months 2021.
C O N S O L I D A T E D A N N U A L R E P O R T 3 . 1
APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius
FOR THE YEAR ENDED 31 DECEMBER 2021
(all tabular amounts are in EUR thousands unless otherwise stated)
50
Company and OMX Baltic Benchmark GI index change for the period 2017-2021:
3. OPERATING PLANS
Restrictive measures imposed after Russia‘s invasion of Ukraine had no significant impact on the Company’s and Group‘s
performance, no operations had been suspended and no significant direct losses related to the restrictive measures had been
incurred, however, the uncertainty exists. In any case, the Company's management is ready to respond promptly to the
changing situation by making the necessary decisions to ensure the stability of operations.
The Group plans to reach EUR 290 million turnover (including VAT) in 2022, or by 27% higher than actual year 2021 turnover.
In 2022, the Group plans to renovate or open 6-10 stores. The net investment is planned to be about EUR 2-5 million.
4. BUSINESS PHILOSOPHY
We work and strive to work only with the fastest-growing, commercially the most successful global brands and chains
operating in different markets and acceptable to our market;
We never make compromises in the selection of the best locations for stores (“Location – more important than money”,
“We have to be where we can not not to be”;
We aim to install stores according to the highest European design and technology requirements;
We strive to use in best the power of the obvious market leader, as well as rapid development opportunities in
competitive environment.
C O N S O L I D A T E D A N N U A L R E P O R T 3 . 1
APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius
FOR THE YEAR ENDED 31 DECEMBER 2021
(all tabular amounts are in EUR thousands unless otherwise stated)
51
5. ENVIRONMENTAL PROTECTION
Group uses the latest technology and the latest technology processes that meet environmental standards and help reduce
the negative impact on the environment (for example, the Group uses the paper packaging materials instead of plastic in
more than 90% of its stores), promote rational management and use of resources. It constantly seeks way to cut electricity
costs at the stores, the headquarters and logistic warehouse. All stores use energy-efficient LED bulbs that not only have a
longer service life but also use less electricity. Spaces in the administration building are segmented to use the lighting as
efficiently as possible and to have it only in those areas where employees are present.
The origin of electricity used in all stores is ensured by the green electricity certificate. The Group choose electricity suppliers
based on the sustainable use of natural resources in the production of energy.
When upgrading stores, we abide by the principle that, despite the decisions taken, we must introduce technologies that
reduce or do not increase resource consumption.
More information about the Group’s environmental protection is presented in the Group’s 2021 Consolidated Social
Responsibility Report.
6. CONSOLIDATION
In order to ensure the fairness of preparation consolidated financial statements and to reduce associated risks, the unified
centralised accounting and business information management system has been implemented in all Group companies. All
Group companies use the standard chart of accounts and apply unified accounting principles.
More information on the principles of preparation of the consolidated financial statements is presented in Note 2.4 to the
Consolidated financial statements.
7. SECURITIES
The share capital of APB Apranga is EUR 16,034,668.40 and it is divided into 55,291,960 ordinary registered shares with a
nominal value of EUR 0.29 each, where each share grants to its owner 1 vote (in total 55,291,960 voting shares), all shares are
paid in full and give the owners equal rights. All 55 291 960 ordinary shares of nominal value EUR 0.29 each (ISIN code
LT0000102337) that comprise Company‘s share capital are listed on Baltic equity list of Nasdaq Vilnius Stock Exchange. For
more information on the share capital of the Company refer to Note 22 to Consolidated financial statements.
Neither Company, nor its subsidiaries directly or indirectly acquired own shares. By the knowledge of the Company’s
management, there are no restrictions imposed on transfer of Company’s shares. All Company‘s shares give equal rights to
shareholders and there are no shareholders with special control rights.
By the knowledge of the Company’s management, there are no restrictions imposed on voting rights.
By the knowledge of the Company’s management, there are no agreements among shareholders which may limit transfer of
shares, or their voting rights.
Each owner of the ordinary registered share has the following property rights:
1) To receive part of the company‘s profit (dividend);
2) To receive a part of the assets of the company in liquidation;
3) To receive shares without payment if the share capital is increased out of the company‘s funds, except the cases specified
in the Law on Companies.
4) To have the pre-emption right to acquire the shares or convertible debenture issued by the company, except in cases
when General Shareholder‘s Meeting pursuant to Law on Companies decides to withdraw the pre-emption right in
acquiring the company‘s issued shares for all shareholders;
5) As provided by laws to lend to the company, however the company borrowing from its shareholders has no right to
mortgage or pledge its assets to shareholders. When the company borrows from a shareholder, the interest may not be
higher than the average interest rate offered by commercial banks of the locality where the lender has his/her place of
residence or business, which was in effect on the day of conclusion of the loan agreement. In such a case the company
and shareholders are prohibited from negotiating a higher interest rate;
6) To receive Company‘s funds in event the share capital is decreased on purpose to pay Company‘s funds to shareholders;
7) Shareholders have other property rights provided by laws of the Republic of Lithuania.
Each owner of the ordinary registered share has the following non-property rights:
1) To attend and vote in General Shareholder‘s Meetings. One ordinary registered share grants to its owner one vote at the
General Shareholders‘ Meeting. The right to vote at the General Shareholder‘s Meeting may be withdrawn or restricted
in cases established by laws of the Republic of Lithuania, also in cases when share ownership is contested;
2) To submit to the company in advance the questions related to the issues on the agenda of the general meeting of
shareholders;
3) To receive information on the company as provided by Law on Companies;
4) To file a claim to the court requesting compensation of damage to company resulting from non-performance or
improper performance of the duties of the Manager of the Company or members of the Board of the company which
duties have been prescribed by law and these Articles of Association of the company as well as in other cases as may be
prescribed by law;
C O N S O L I D A T E D A N N U A L R E P O R T 3 . 1
APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius
FOR THE YEAR ENDED 31 DECEMBER 2021
(all tabular amounts are in EUR thousands unless otherwise stated)
52
5) Other non-property rights prescribed by law.
At 31 December 2021, the Company had 4 119 shareholders. Company‘s shareholders which owned or had under management
more than 5% of share capital were:
Shareholder
Enterprise
code
Address
Number of
shares
% of total
ownership
UAB MG Investment
123249022
Aukštaičių 7, Vilnius, Lithuania
34 442 189
62,3%
UAB Minvista
110685692
Aukštaičių 7, Vilnius, Lithuania
7
2
6
4
661
1
3
,
1
%
Swedbank AS (Estonia and
Latvia) clients
10060701 Liivalaia 8 Tallinn, Estonia 3 665 861
6,6%
There are no material agreements where the Company is a counterparty and which may come into force, or may change, or
may end with the change of control over the Company. Information about related party transactions is provided in the Note
26 to the Consolidated financial statements.
At 24 July 2017 the Company concluded an open-ended agreement with SEB bankas AB (entity code: 112021238, address:
Konstitucijos av. 24, LT-08105 Vilnius) on supervision of securities accounts.
8. GOVERNANCE REPORT
For the Governance Report and the full text of Compliance Report with the Governance Code for the companies listed on the
Nasdaq Vilnius stock exchange refer to Annex “Governance Report” to this annual report.
9. CONSOLIDATED SOCIAL RESPONSIBILITY REPORT
The Group’s Consolidated Social Responsibility Report is provided in Annex “Social Responsibility Report” to this annual report.
10. REMUNERATION REPORT
The Supervisory Board is not formed in the Company, therefore the Company’s Remuneration Policy applies to the Head of
the Company and Members of the Management Board of the Company in accordance with the relevant requirements and
essential principles on the basis of which the remuneration is paid.
No agreements are concluded with the Members of the Management Board regarding their activities as Members of the
Management Board in the Company. Only Independent Members of the Management Board of the Company are
remunerated for their work at the Board. The Members of the Management Board of the Company, who are also employees
of the Company, receive remuneration only for the direct duties they perform under the employment contract, i.e. their
remuneration for direct functions in the Company and being a Member of the Board (performance of the duties of member
of the Board) are not related in any way and are not dependent on each other. The Members of the Management Board of
the Company, who are not employees of the Company or do not serve as Independent Members of the Management Board,
are not additionally incentivised, they are not paid for their work in the Management Board of the Company, therefore, such
members of the Board perform their duties of a member of the Management Board of the Company free of charge.
The employment contract with the Head of the Company is concluded for an indefinite period. The Head of the Company, as
provided by the Law on Companies, is elected and removed from office, his remuneration is determined, his job description
is approved, he is promoted and penalized based on the Management Board decision. In his / her activities, the Head of the
Company follows the laws, other legal acts, the Company's Articles of Association, decisions of the General Meeting of
Shareholders, as well as decisions of the Management Board. The amounts of allowances, notice periods related to the
termination of employment or term of office are determined taking into account the requirements established in the specific
labour laws. Employment contracts with the Head of the Company are not normally subject to prior agreements on severance
pay, supplementary pensions or early retirement arrangements
The remuneration of the Head of the Company consists of:
-
a fixed part of the remuneration
, which is agreed upon and approved by the Management Board of the Company in each
individual case and which does not change and is paid to the Head of the Company on a monthly basis, regardless of the
Company's performance;
-
a variable part of remuneration
, which depends on the performance of the Company, including its subsidiaries (hereinafter
- the Group), i.e. this is a concrete percentage of Group's profit, which is approved by the Management Board of the Company.
This variable part of the remuneration is paid once a calendar quarter, based on the Group's results for the previous quarter.
The ratio of variable to fixed part depends only on the Group's performance.
The amount of variable remuneration (as a percentage of the Group's profit) for the Head of the Company is determined and
approved by the Management Board of the Company so as to comply with the Company's and the Group's business strategy,
C O N S O L I D A T E D A N N U A L R E P O R T 3 . 1
APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius
FOR THE YEAR ENDED 31 DECEMBER 2021
(all tabular amounts are in EUR thousands unless otherwise stated)
53
long-term goals and operational interests, to ensure shareholders' interests, to promote sound and efficient management
and risk management to the extent of decision making, would help to avoid conflicts of interest, ensure compliance with the
code of ethics and conduct.
There are no agreements between the Company, members of its management bodies, or its employees regarding special
compensations in case of their resignation, or dismiss without legitimate reason, or the end of their duties connected with
the change of the Control over the Company.
Annual remuneration of the members of the Management Board - the Company's employees, EUR thousand (before taxes):
Name, Surname Position
Fixed
part
Variable
part
Total
Variable
part, %
Darius Juozas Mockus Chairman of the Board -
-
-
Vidas Lazickas Member of the Board -
-
-
Rimantas Perveneckas
Member of the Board (till 29/04/2021), General
Director
192
295
487
61%
Ilona Simkuniene
Member of the Board, Purchasing Director
122
184
307
60%
Ramunas Gaidamavicius
Member of the Board, Development Director
93
148
241
61%
Jonas Jukštys Member of the Board, independent 8
-
8
-
Gintaras Juškauskas Member of the Board, independent 8
-
8
-
Annual remuneration and Group’s performance in 2017-2021:
2021 2020 2019* 2018 2017
Remuneration, EUR thousand
Rimantas Perveneckas 487
430 477
298
427
Ilona Šimkūnienė 307
265 298
201
269
Ramūnas Gaidamavičius 241
204 233
149
209
Average Employee Total Remuneration Costs 11,8
9,9 11,8
9,4
9,0
Group performance
Net sales, EUR thousand 189 745
169 958
205 005
187 207
182 265
EBT, EUR thousand 13 211
5 961
10 994
9 266
16 555
EBITDA margin, % 18,0%
16,1% 15,1%
8,3%
12,7%
* Tax reform has been implemented at the beginning of 2019
.
The Management Board members and the Head of the Company do not receive any other parts of remuneration, bonuses,
premiums, incentives other than those provided for in Remuneration Policy.
The Management Board members and the Head of the Company have not received any remuneration from other companies
belonging to the Group.
C O N S O L I D A T E D A N N U A L R E P O R T 3 . 1
APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius
FOR THE YEAR ENDED 31 DECEMBER 2021
(all tabular amounts are in EUR thousands unless otherwise stated)
54
11. ALTERNATIVE PERFORMANCE MEASURES
With regard to the requirements of the European Securities and Markets Authority (ESMA) Guidelines on Alternative
Performance Measures, an overview of the Alternative Performance Measures (APM) used, their definition and calculation are
provided below and also on Apranga APB website at: https://aprangagroup.lt/en/investors/investor-relations/alternative-
performance-measures
Performance measure
Formula and components used for the
calculation
Interpretation
EBITDA
Profit before finance income and finance costs,
income tax, depreciation and amortization
EBITDA is used as a relevant measure for investors to be
able to understand profit generation before investments
in fixed assets. It also shows the ability to repay loans and
pay interests
Alternative calculation
:
EBIT before depreciation and amortization.
EBITDA margin, % EBITDA divided by net sales
Shows the efficiency of the company and is used to
compare companies in the same business sector
EBIT
Profit before finance income and finance costs and
income tax
A business performance indicator that shows the
company's ability to make a profit, regardless of the
method of financing (then determines the optimal use of
debt vs. equity)
EBIT margin, % EBIT divided by net sales
Shows the efficiency of the company and is used to
compare companies in the same business sector
Net investment
Purchases of long-term assets – Disposal of long-term
assets
In the activities of Apranga APB, part of the investment
into installation of the store is often disposed to the
owner of the premises. Therefore, to reflect the real
impact on cash flows and operating costs (depreciation),
it is appropriate to use the net investment measure
Net debt Borrowings - Cash and cash equivalents Shows the level of real debt to financial institutions
(Non-current and current borrowings, excluding IFRS
16 lease liabilities, less cash and cash equivalent)
Net debt to equity Net debt / Equity (at the end of the reporting period)
Shows the level of financial debts compared to equity.
The ratio is used to evaluate a company's financial
leverage. The debt/equity ratio is also referred to as a risk
or gearing ratio. The higher the value of this ratio, the
lower the solvency of the company
Earnings per share (EPS) Profit for the period / Number of shares
Earnings per share serve as an indicator of a company's
profitability. It shows the portion of a company's profit
allocated to each share of common stock
Price-to-Earnings ratio
(P/E)
Share price (at the end of the reporting period) /
Earnings per share (EPS)
The price-earnings ratio indicates the price investors pay
for one euro of the company’s earnings. This ratio is very
versatile and is suitable for comparing not only for
companies of the same sector but also very different
companies
Dividend payout ratio, % Dividend / Profit for the period
Shows which the part of the company's profit is paid by
dividends
Return on equity (ROE)
Profit for the period / Equity (at the end of the
reporting period)
The ratio shows the percentage return the company
earns from equity. Higher ROE ratio is considered as
better
Return on assets (ROA)
Profit for the period / Assets (at the end of the
reporting period)
The ratio shows the percentage return the company
earns from assets. The higher the ratio, the more efficient
use of assets
Current ratio
Current Assets (at the end of the reporting period) /
Current Liabilities (at the end of the reporting period)
The current ratio is a liquidity ratio that measures a
company's ability to pay short-term and long-term
obligations
C O N S O L I D A T E D A N N U A L R E P O R T 3 . 1
APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius
FOR THE YEAR ENDED 31 DECEMBER 2021
(all tabular amounts are in EUR thousands unless otherwise stated)
55
12. PUBLICLY ANNOUNCED INFORMATION
The Company in 2021 publicly announced and broadcasted through Nasdaq Vilnius Globe Newswire and own webpage the
following information:
Date Title
2021.01.05 Turnover of Apranga Group in December 2020 and total year 2020
2021.02.01 Turnover of Apranga Group in January 2021
2021.02.26 Apranga Group interim information for 12 months of 2020
2021.03.01 Turnover of Apranga Group in February 2021
2021.04.01 Turnover of Apranga Group in March 2021
2021.04.06 Notice of the Annual General Meeting of APB “APRANGA” shareholders
2021.04.06
Draft resolutions of the Annual General Meeting of APB APRANGA shareholders to be held on April 29,
2021
2021.04.07 Notification on Apranga Group CFO change
2021.04.28 Apranga Group interim report for three months of 2021
2021.04.29 Resolutions of the Annual General Meeting of Apranga APB shareholders
2021.04.29 Apranga APB annual information 2020
2021.05.03 Turnover of Apranga Group in April 2021
2021.05.19 Notification on Apranga APB manager’s related party transactions
2021.05.19 Notification on manager’s related party transactions
2021.05.21 Notification on manager’s related party transactions
2021.05.21 Notification on manager’s related party transactions
2021.05.26 Notification on manager’s related party transactions
2021.06.01 Turnover of Apranga Group in May 2021
2021.06.28 Notification on manager’s related party transactions
2021.06.28 Notification on manager’s related party transactions
2021.07.01 Turnover of Apranga Group in June 2021
2021.07.29 Apranga Group interim information for the six months of 2021
2021.08.02 Turnover of Apranga Group in July 2021
2021.08.04 Notification on manager’s related party transactions
2021.08.18 Notification on manager’s related party transactions
2021.08.19 Notification on manager’s related party transactions
2021.08.19 Notification on manager’s related party transactions
2021.08.23 Notification on manager’s related party transactions
2021.08.25 Notification on manager’s related party transactions
2021.08.25 Notification on manager’s related party transactions
2021.08.26 Notification on manager’s related party transactions
2021.09.01 Turnover of Apranga Group in August 2021
2021.09.06 Notification on manager’s related party transactions
2021.09.06 Notification on manager’s related party transactions
2021.09.20 Notification on manager’s related party transactions
2021.09.20 Notification on manager’s related party transactions
2021.09.22 Notification on manager’s related party transactions
2021.09.22 Notification on manager’s related party transactions
2021.09.22 Notification on manager’s related party transactions
2021.09.24 Notification on manager’s related party transactions
2021.09.24 Notification on the acquisition of the voting rights
C O N S O L I D A T E D A N N U A L R E P O R T 3 . 1
APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius
FOR THE YEAR ENDED 31 DECEMBER 2021
(all tabular amounts are in EUR thousands unless otherwise stated)
56
Date Title
2021.09.28 Notification on manager’s related party transactions
2021.09.28 Notification on manager’s related party transactions
2021.10.01 Turnover of Apranga Group in September 2021
2021.10.28 Apranga Group interim information for the 9 months of 2021
2021.11.03 Turnover of Apranga Group in October 2021
2021.11.05 Notification on manager’s transactions
2021.11.05 Notification on manager’s related party transactions
2021.11.08 Notification on manager’s related party transactions
2021.11.09 Notification on manager’s related party transactions
2021.11.16 Notification on manager’s transactions
2021.11.17 Notification on manager’s related party transactions
2021.11.17 Notification on manager’s transactions
2021.11.23 Notification on manager’s transactions
2021.11.23 Notification on manager’s related party transactions
2021.11.24 Notification on manager’s related party transactions
2021.11.25 Notification on manager’s related party transactions
2021.11.30 Notification on manager’s related party transactions
2021.12.01 Notification on manager’s related party transactions
2021.12.01 Turnover of Apranga Group in November 2021
2021.12.09 The turnover and expansion plans of Apranga Group in 2022
2021.12.10 Notification on manager’s transactions
2021.12.10 Notification on manager’s related party transactions
2021.12.13 Notification on manager’s transactions
2021.12.17 Notification on manager’s related party transactions
2021.12.17 Notification on manager’s transactions
2021.12.21 Apranga Group investor’s calendar for the year 2022
2021.12.22 Notification on manager’s related party transactions
2021.12.23 Notification on manager’s related party transactions
2021.12.23 Notification on manager’s related party transactions
2021.12.27 Apranga Group repaid all deferred taxes
2021.12.27 Notification on manager’s transactions
2021.12.30 Notification on manager’s related party transactions
Contents of above mentioned announcements can be obtained on Nasdaq Vilnius Stock Exchange webpage
https://nasdaqbaltic.com/statistics/en/instrument/LT0000102337/news? and on Company‘s webpage
http://aprangagroup.lt/en/investors/news-and-material-events.
2 0 2 1 G O V E R N A N C E R E P O R T
G O V E R N A N C E R E P O R T 3 . 2
APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius
FOR THE YEAR ENDED 31 DECEMBER 2021
(all tabular amounts are in EUR thousands unless otherwise stated)
58
The public trade company APRANGA (hereinafter referred to as the “Company”) essentially follows the Corporate Governance
Code for the Companies Listed on the Nasdaq Vilnius stock exchange adopted and valid as on 31 December 2020. Corporate
Governance Code is publicly available at: https://nasdaqbaltic.com/market-regulation/nasdaq-vilnius-rules/
RISKS
In its activities the Group is exposed to various risks (regulatory, operational, investment, market, competition, economic cycle,
macroeconomic factors, etc.), but only some of which may significantly affect the Group's results.
The Group's activities are significantly influenced by overall
economic
situation (and especially by the economic cycles) in
countries where the Group operates. Retail markets in the Baltic States where the Group operates have been severely exposed,
however, with state aid and effective virus control and prevention measures, the Group expects that in the long run the impact
of COVID-19 on the economy and the main activities of the Company and the Group will continue to soften. Considering risks
related to Russia’s invasion to Ukraine, the restrictive measures imposed had no significant impact on the Company’s
performance, no operations had been suspended and no significant direct losses related to the restrictive measures had been
incurred yet, however, the risk remains and will be monitored and managed closely.
The competition-related risk
. In its activities the Group is exposed to increasingly intense competition in the clothing market.
The Group, in order to manage this risk and to meet the customer service quality standard requirements, continuously carries
out chain expansion and modernization, improves its sales and marketing strategies, carries out market research, improves
customer service and implements a consistent business process optimization and cost reduction program. In its activities, the
Group consistently follows the principles of transparency and fair competition.
Weather conditions
influences the Group's activity and results to some extent as well. The Group's operating results are
planned assuming that the weather conditions will be normal, i.e., usual for the Baltic region. Unfavorable weather conditions
may negatively affect the Group's turnover, at the same time, financial performance and inventories level.
The main features of the Group’s internal control and risk management systems related to preparation of consolidated
financial statements.
The Group’s consolidated financial statements are prepared in accordance with the International Financial Reporting
Standards (IFRS) as adopted by the European Union. Chief financial officer (CFO) of the Company and the Audit Committee
supervises preparation of the consolidated financial statements, systems of internal control and financial risk management
and how the Company follows legal acts that regulate preparation of consolidated financial statements. CFO of the Company
is responsible for the preparation supervision and the final revision of the consolidated financial statements. He constantly
reviews International Financial Reporting Standards (IFRS) in order to implement in time IFRS changes, analyses Company’s
and group’s significant transactions, ensures collecting information from the Group’s companies and timely and fair
preparation of this information for the financial statements. In order to ensure that the consolidated financial statements are
prepared correctly and on time, the Group has established appropriate rules and the procedures which regulates the
principles, methods, and rules of accounting and preparation and presentation of consolidated financial statements. More
information on the principles of preparation of the consolidated financial statements is presented in Note 2.4 to the
Consolidated financial statements and in part 7 to the Consolidated annual report.
The types of
financial risks
that Group faces and risk management are described in Note 3 to the Consolidated Financial
Statements. The latest information on the risks related to the Group is also provided in Note 2.2 and Note 29 to the
Consolidated Financial Statements.
CORPORATE GOVERNANCE
The management bodies of the Company specified in the Articles of Association are as follows: General Shareholders' Meeting,
a collegial management body – Board, and a single-person management body – Manager of the Company. The Law of the
Republic of Lithuania on Companies provides that Lithuanian companies at their discretion could have only one collegial
governing body. There is no Supervisory Council in the Company. The Board consists of six members who are elected for the
term of four years, represents the shareholders, and performs supervision and control functions.
G O V E R N A N C E R E P O R T 3 . 2
APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius
FOR THE YEAR ENDED 31 DECEMBER 2021
(all tabular amounts are in EUR thousands unless otherwise stated)
59
Competence of
General Shareholders‘ Meeting
is the same as specified by the Law on Companies. The General Meeting shall
have the exclusive right to:
1) Amend the Articles of Association of the Company;
2) Elect the members of the Board;
3) Remove the Board or its members;
4) Select and remove the firm of auditors, set the conditions for auditor remuneration;
5) To determine the class, number, nominal value and the minimum issue price of the shares issued by the Company;
6) Take a decision regarding conversion of shares of one class into shares of another class, approve share conversion
procedure;
7) Approve the annual accounts;
8) Take a decision on profit/loss appropriation;
9) Take a decision on the formation, use, reduction and liquidation of reserves;
10) Take a decision to issue convertible debentures;
11) Take a decision to withdraw for all the shareholders the right of pre-emption in acquiring the shares or convertible
debentures of a specific issue of the Company;
12) Take a decision to increase the authorised capital;
13) Take a decision to reduce the authorised capital;
14) Take a decision for the Company to purchase own shares;
15) Take a decision on the reorganisation or division of the Company and approve the terms of reorganisation or division;
16) Take a decision to transform the Company;
17) Take a decision to restructure the Company;
18) Take a decision to liquidate the Company, cancel the liquidation of the Company, except where otherwise provided by
the Law on Companies;
19) Elect and remove the liquidator of the Company, except where otherwise provided by the Law on Companies.
Competence of General Shareholders‘ Meeting additionally includes adoption of the resolutions on the composition of the
Audit Committee of the Company, including the appointment and removal of individual members of the Audit Committee,
and approving the charter of the Audit Committee.
General Shareholders' Meeting has a right to amend the Articles of Association under the qualified majority of votes, which
may not be less than 2/3 of all votes the shareholders attending at the Meeting, except for the exceptions specified by Law on
Companies. For more information on the rights and restrictions granted to shareholders, see Note 7,
Securities
.
The Board
, consisting of six members, is elected by General Shareholders' Meeting for a 4 year term. Company‘s Board
members election and revocation procedure is the same as specified by Law on Companies. Company’s Board activity is
conducted by chairman of the Board. The Board elects its chairman from among its members. The Board continues in office
for the period established in the Articles of Association or until a new Board is elected and assumes the office but not longer
than until the annual General Shareholders' Meeting during the final year of its term of office.
Board of Company considers and approves:
1) The activity strategy of the Company;
2) The annual report of the Company;
3) The management structure of the Company and the positions of the employees;
4) The positions to which employees are recruited by competition;
5) Regulations of branches and representative offices of the Company.
The Board adopts the following resolutions:
1) Resolutions for the Company to become an incorporator or a member of other legal entities;
2) Resolutions to establish branches and representative offices of the Company;
3) Resolutions to invest, dispose of or lease the tangible long-term assets the book value whereof exceeds 1/20 of the share
capital of the Company (calculated individually for every type of transaction);
4) Resolutions to pledge or mortgage the tangible long-term assets the book value whereof exceeds 1/20 of the share capital
of the Company (calculated for the total amount of transactions);
5) Resolutions to offer surety or guarantee for the discharge of obligations of third persons the amount whereof exceeds
1/20 of the share capital of the Company;
6) Resolutions to acquire the tangible long-term assets the price whereof exceeds 1/20 of the share capital of the Company;
7) Resolutions to restructure the Company in the cases laid down in the Law on Restructuring of Enterprises;
8) Resolutions regarding issuance of debenture of the Company (except issuance of convertible debenture);
9) Resolutions regarding transactions with related parties, as provided by Law on Companies, where these transactions
have a significant impact on the company, its finances, assets and liabilities. Transactions with related parties shall be
considered to have a significant impact on the company, its finances, assets and liabilities, if the total value (the total
value of one transaction or the total value of continuous transactions within one calendar year) of such a transaction
exceeds 1/2 of the company’s authorized capital;
10) Other resolutions within the competence of the Board as prescribed by the Articles of Association or the resolutions of
the General Shareholders' Meeting.
The Board analyses and assesses the documents submitted by the Manager of the Company on:
1)
The implementation of the activity strategy of the Company;
2) The organisation of the activities of the Company;
G O V E R N A N C E R E P O R T 3 . 2
APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius
FOR THE YEAR ENDED 31 DECEMBER 2021
(all tabular amounts are in EUR thousands unless otherwise stated)
60
3) Financial standing of the Company;
4) The results of economic activities, income and cost estimates, the stocktaking data and other accounting data of changes
in the assets.
The Board elects and removes from office the Manager of the Company, fixes his/her remuneration and sets other terms of
the employment agreement, approves his/her job description, provides incentives and imposes penalties.
The Board analyses and assesses the Company's draft annual financial statement and draft of profit/loss distribution and
submits them to the General Shareholders' Meeting together with the annual report of the Company.
The Board is responsible for convening and arrangement of the General Shareholders' Meeting in due time.
Each member of the Board is entitled to initiate convening of the Board meeting. The Board may adopt resolutions and its
meeting shall be deemed to have taken place when the meeting is attended by 2/3 and more of the members of the Board.
The resolution of the Board is adopted if more votes for it are received than the votes against it. In the event of a tie, the
Chairman of the Board shall have the casting vote. The member of the Board is not entitled to vote when the meeting of the
Board discusses the issue related to his/her activities on the Board or the issue of his/her responsibility.
The Manager of the Company
– General Director - is a single-person management body of the Company. The Manager of the
Company acts at his/her own discretion in relation of the Company with other persons.
The Manager of the Company is elected and removed from office by the Board which also fixes his/her salary, approves his/her
job description, provides incentives and imposes penalties. The employment agreement is concluded with the Manager of
the Company and is signed on behalf of the Company by the Chairman of the Board or other person authorized by the Board.
In his/her activities the Manager of the Company complies with laws and other legal acts, Articles of Association, General
Shareholders' Meeting resolutions, Board resolutions, his/her job descriptions.
The Manager of the Company acts on behalf of the Company and is entitled to enter into the transactions at his/her own
discretion. The Manager of the Company may conclude the following transactions provided that there is a decision of the
Board to enter into these transactions: to invest, dispose of or lease the tangible long-term assets the book value whereof
exceeds 1/20 of the share capital of the Company (calculated individually for every type of transaction); to pledge or mortgage
the tangible long-term assets the book value whereof exceeds 1/20 of the share capital of the Company (calculated for the
total amount of transactions); to offer surety or guarantee for the discharge of obligations of third persons the amount whereof
exceeds 1/20 of the share capital of the Company; to acquire the tangible long-term assets the price whereof exceeds 1/20 of
the share capital of the Company as well as to conclude transactions with related parties, where these transactions have a
significant impact on the company, its finances, assets and liabilities, as these significance criteria are specified in Articles of
Association of the company.
The Manager of the Company is responsible for:
1) The organization of the Company‘s activity and implementation of its objectives;
2) The drawing up of the set of annual financial statements and the drafting of the annual report of the Company;
3) The drawing up of a draft remuneration policy;
4) The drawing up of a draft remuneration report;
5) Concluding an agreement with the auditor or firm of auditors;
6) Submission of information and documents to the shareholders, General Shareholders' Meeting and the Board in cases
prescribed by Law on Companies or at their request;
7) Submission of the documents and data of the Company to manager of the Register of Legal Entities;
8) Submission of documents to the Bank of Lithuania and Central Securities Depository;
9) Public announcement of information prescribed by Law on Companies in a source indicated in Articles of Association;
10) Submission of information to shareholders;
11) Preparation of the draft decision of the distribution of dividends for the period, shorter than a financial year, composition
of the set of the interim financial reports and the preparation of the interim report for the decision of the distribution of
dividends for the period, shorter than a financial year;
12) Notification to the shareholders and the Board about the most important events that have a significance for the
company's activities
13) Preparation of draft rules for granting shares;
14) The performance of other duties prescribed by laws as well as in the Articles of Association and the job descriptions of
the Manager of the Company.
The Manager of the Company organizes daily activities of the Company, hires and dismisses employees, concludes and
terminates employment contracts with them, provides incentives and imposes penalties.
The Manager of the Company is responsible for preparation of the draft share subscription agreement and its data correctness.
The Manager of the Company issues authorizations and procuration within the scope of its competence.
The Manager of the Company is accountable and regularly reports to the Board on the implementation of Company‘s activity
strategy, the organization of the Company‘s activity, the financial standing of the Company, the results of economic activity,
the income and cost estimates, the stocktaking data and other accounting data of changes in the assets.
G O V E R N A N C E R E P O R T 3 . 2
APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius
FOR THE YEAR ENDED 31 DECEMBER 2021
(all tabular amounts are in EUR thousands unless otherwise stated)
61
MANAGEMENT OF THE COMPANY
On 27 April 2018 the Annual General Meeting of Company shareholders elected Company‘s members of the Board for new 4-
year term. 27
th
April 2022 is the end term for Company‘s Board. On 29 April 2021 the Annual General Meeting of the Company
shareholders has recalled two members of the Board and two independent Board members were elected instead.
BOARD
BOARDBOARD
BOARD
OF
OFOF
OF
THE
THETHE
THE
COMPANY
COMPANYCOMPANY
COMPANY
Darius
DariusDarius
Darius
Mockus
MockusMockus
Mockus
Chairman of the Board
Darius Mockus (born in 1965) - Chairman of the Board since 2 May 2002 (member of the Board since 23
March 1995). Education: Vilnius University, Faculty of Economics, Industrial Planning. He has no Company shares. With related
companies Minvista UAB (Code of Enterprise: 110685692; Registered office: Aukštaičių g. 7, Vilnius) and MG Investment UAB
(Code of Enterprise: 123249022; Registered office: Aukštaičių g. 7, Vilnius) he has 41 706 850 shares, representing 75.43% of the
share capital and votes.
Information on current management positions in other companies:
Company name Company code Registered office Current position
UAB MG
grupė
125459336
Aukštaičių g. 7
, Vilnius, Lithuania
President
-
the main position
UAB MV GROUP
125313192
Aukštaičių g. 7, Vilnius, Lietuva
Chairman of the Board
APB Apranga
121933274
Ukmergės g. 362, Vilnius, Lithuania
Chairman of the Board
UAB DARNU GROUP
123010339
Aukštaičių g. 7
, Vilnius, Lithuania
Chairman of the Board
Information on shareholdings in other companies above 5%:
Concern MG Baltic UAB - 100% of the share capital;
Minvista UAB – 100% of the share capital.
Information about participation in other organizations:
President of Honour of the Lithuanian Tennis Union.
Rimantas
RimantasRimantas
Rimantas
Perveneckas
PerveneckasPerveneckas
Perveneckas
Member of the Board (till 29/04/2021), General Director
Rimantas Perveneckas (born in 1960) - APB Apranga group General Director, Member of the Board of APB Apranga since 23
February 1993, in the Company since 1983. Education: Vilnius University, Faculty of Trade, specialization in Trade Economics.
He has 800 770 shares of the Company, representing 1.45% of the share capital and votes. Has no positions in other companies.
Has no shareholdings in other companies above 5%.
Ilona
IlonaIlona
Ilona
Šimkūnienė
ŠimkūnienėŠimkūnienė
Šimkūnienė
Member of the Board, Purchasing Director
Ilona Šimkūnienė (born in 1963) - Apranga group Purchasing Director, Member of the Board of APB Apranga since 27 March
1998, in the Company since 1985. Education: Vilnius University, Faculty of Trade, specialization in Trade Economics. She has no
Company shares.
G O V E R N A N C E R E P O R T 3 . 2
APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius
FOR THE YEAR ENDED 31 DECEMBER 2021
(all tabular amounts are in EUR thousands unless otherwise stated)
62
Information on positions in other companies:
Company name Company code Registered office Current position
UAB Apranga LT
300021271
Ukmergės 362, Vilnius, Lithuania
Chairman of the Board
UAB Apranga BPB LT
300509648
Ukmergės 362, Vilnius, Lithuania
Chairman of the Board
UAB Apranga PLT
300551572
Ukmergės 362, Vilnius, Lithuania
Chairman of the Board
UAB Apranga SLT
301519684
Ukmergės 362, Vilnius, Lithuania
Chairman of the Board
UAB Apranga MLT
302627022
Ukmergės 362, Vilnius, Lithuania
Chairman of the Board
UAB Apranga HLT
304042131
Ukmergės 362, Vilnius, Lithuania
Chairman of the Board
UAB Apranga OLT
304757395
Ukmergės 362, Vilnius, Lithuania
Chairman of the Board
UAB Apranga Ecom LT
304184173
Ukmergės 362, Vilnius, Lithuania
Chairman of the Board
Apranga LV SIA
40003672631
Elizabetes iela 51, Riga, Latvia
Chairman of the Board
Apranga BPB LV SIA
40003887840
Elizabetes iela 51, Riga, Latvia
Chairman of the Board
Apranga PLV SIA
40003887747
Elizabetes iela 51, Riga, Latvia
Chairman of the Board
Apranga SLV SIA
50103201281
Elizabetes iela 51
-
1A,
Riga, Latvia
Chairman of the Board
Apranga MLV SIA
40103486301
Elizabetes iela 51
-
1A, Riga, Latvia
Chairman of the Board
Apranga HLV SIA
40203202205
Elizabetes iela 51
-
1A, Riga, Latvia
Chairman of the Board
Apranga OLV SIA
50203162031
Elizabetes iela 51
-
1A, Riga, Latvia
Chairman of the Board
Apranga Ecom LV SIA
40103972857
Elizabetes iela 51
-
1A, Riga, Latvia
Chairman of the Board
Apranga Estonia OU
11026132
Rotermanni mnt 18/1, Tallinn, Estonia
Chairman of the Board
Apranga BEE OU
11419148
Rotermanni mnt 18/1, Tallinn, Estonia
Chairman of the Board
Apranga PB Trade OU
11530250
Rotermanni mnt 18/1, Tallinn, Estonia
Chairman of the Board
Apranga ST Retail OU
11530037
Rotermanni mnt 18/1, Tallinn, Estonia
Chairman of the Board
Apranga MDE OU
12617929
Rotermanni mnt 18/1, Tallinn, Estonia
Chairman of the Board
Apranga HEST OU
14075697
Rotermanni mnt 18/1, Tallinn, Estonia
Chairman of the Board
Apranga Ecom EE OU
14004869
Rotermanni mnt 18/1,
Tallinn, Estonia
Chairman of the Board
Has no shareholdings in other companies above 5%.
Vidas
VidasVidas
Vidas
Lazickas
LazickasLazickas
Lazickas
Member of the Board
Vidas Lazickas (born in 1965) - Member of the Board of APB Apranga since 29 April 2011. Education: Vilnius University, Faculty
of Economics, specialization in Production Management and Organization. He has 252 480 shares of the Company,
representing 0.46% of the share capital and votes.
Information on current management positions in other companies:
Company name Company code Registered office Current position
UAB MG grupė 125459336 Aukštaičių g. 7, Vilnius, Lietuva
Economics and Finance
Director - the main
position
UAB MG Investment
123249022
Aukštaičių g. 7, Vilnius, Lietuva
General Director
UAB Eminta
303140423
Aukštaičių g. 7, Vilnius, Lietuva
Director
UAB Euvalda
123248988
Aukštaičių g. 7,
Vilnius, Lietuva
Director
UAB MG Media
211616910
Aukštaičių g. 7, Vilnius, Lietuva
General Director
UAB Minvista
110685692
Aukštaičių g. 7, Vilnius, Lietuva
Director
UAB Mineraliniai vandenys
121702328
Aukštaičių g. 7, Vilnius, Lietuva
Chairman of
the Board
UAB Laisvas ir
nepriklausomas kanalas
123026090 Šeškinės g. 20, Vilnius, Lithuania Chairman of the Board
UAB Mediafon“
124424581
Olimpiečių g. 1
-
31, Vilnius, Lithuania
Chairman of the Board
UAB Mediafon Carrier
Services
304065315 Olimpiečių g. 1 - 31, Vilnius, Lithuania Chairman of the Board
UAB Mediafon Datapro
304065322
Olimpiečių g. 1
-
31, Vilnius, Lithuania
Chairman of the Board
UAB Mitnija
134511472
Jonavos g. 60c, Kaunas, Lithuania
Chairman of the Board
UAB MV GROUP
125313192
Aukštaičių g. 7, Vilnius, Lietuva
Member of the Board
G O V E R N A N C E R E P O R T 3 . 2
APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius
FOR THE YEAR ENDED 31 DECEMBER 2021
(all tabular amounts are in EUR thousands unless otherwise stated)
63
Company name Company code Registered office Current position
UAB MV GROUP Asset
Management
304145213 Aukštaičių g. 7, Vilnius, Lietuva Member of the Board
Įmonių grupė Alita AB
302444238
Miškininkų g. 17, Alytus, Lithuania
Member of the Board
MV Eesti OU 11021347
Kalmari tee 10, Rae vald, Harjumaa,
Estonia
Member of the Board
MV Latvia SIA
40003787568
Medus iela 7, Ryga, Latvia
Member of the Board
MV Poland S.P.z.o.o.
140330387
Przasnyska 6b, 01
-
756 , Warsaw, Poland
Member of the Board
AB MV
GROUP Production
132082782
Aukštaičių g. 7, Vilnius, Lietuva
Member of the Board
APB Apranga
121933274
Ukmergės g. 362, Vilnius, Lithuania
Member of the Board
UAB DARNU GROUP
123010339
Aukštaičių g. 7, Vilnius, Lietuva
Member of the Board
Has no shareholdings in other companies above 5%.
Ramūnas
RamūnasRamūnas
Ramūnas
Gaidamavičius
GaidamavičiusGaidamavičius
Gaidamavičius
Member of the Board, Development Director
Ramūnas Gaidamavičius (born in 1968) - APB Apranga group Development Director, Member of the Board of APB Apranga
since 30 April 2010, in the Company since 2002. Education: Vilniaus University of Technology, Faculty of Mechanics,
specialization in Machine Building. He has 5 000 shares of the Company, representing 0.01% of the share capital and votes.
Information on positions in other companies:
Company name Company code Registered office Current position
UAB
Apranga LT
300021271
Ukmergės 362, Vilnius, Lithuania
Member of the Board
Apranga SIA
40003610082
Elizabetes iela 51, Riga, Latvia
Chairman of the Board
Apranga LV SIA
40003672631
Elizabetes iela 51, Riga, Latvia
Member of the Board
Apranga BPB LV
SIA
40003887840
Elizabetes iela 51, Riga, Latvia
Member of the Board
Apranga PLV SIA
40003887747
Elizabetes iela 51, Riga, Latvia
Member of the Board
Apranga SLV SIA
50103201281
Elizabetes iela 51
-
1A, Riga, Latvia
Member of the Board
Apranga MLV
SIA
40103486301
Elizabetes iela 51
-
1A, Riga, Latvia
Member of the Board
Apranga HLV SIA
40203202205
Elizabetes iela 51
-
1A, Riga, Latvia
Member of the Board
Apranga OLV SIA
50203162031
Elizabetes iela 51
-
1A, Riga, Latvia
Member of the Board
Apranga Ecom LV SIA
40103972857
Elizabetes iela 51
-
1A, Riga, Latvia
Member of the Board
Apranga OU
11274427
Rotermanni mnt 18/1, Tallinn, Estonia
Chairman of the Board
Apranga Estonia OU
11026132
Rotermanni mnt 18/1, Tallinn, Estonia
Member of the
Board
Apranga BEE OU
11419148
Rotermanni mnt 18/1, Tallinn, Estonia
Member of the Board
Apranga PB Trade OU
11530250
Rotermanni mnt 18/1, Tallinn, Estonia
Member of the Board
Apranga ST Retail OU
11530037
Rotermanni mnt 18/1, Tallinn, Estonia
Member of the Board
Apranga MDE OU
12617929
Rotermanni mnt 18/1, Tallinn, Estonia
Member of the Board
Apranga HEST OU
14075697
Rotermanni mnt 18/1, Tallinn, Estonia
Member of the Board
Apranga Ecom EE OU
14004869
Rotermanni mnt 18/1, Tallinn,
Estonia
Member of the Board
Has no shareholdings in other companies above 5%.
Jonas
JonasJonas
Jonas
Jokštys
JokštysJokštys
Jokštys
Member of the Board, independent
Jonas Jokštys (born in 1982 m.) - Member of Board of APB Apranga since 29th April 2021 m. Education: Stocholm School of
Economics in Riga (2000-2003) Bachelor of Economics and Business Administration and London School of Economics and
Political Science (2005-2006) Master of Philosophy and Political Science. He has no Company shares.
G O V E R N A N C E R E P O R T 3 . 2
APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius
FOR THE YEAR ENDED 31 DECEMBER 2021
(all tabular amounts are in EUR thousands unless otherwise stated)
64
Information on positions in other companies:
Company name Company code Registered office Current position
UAB Elmoris
123542630
Titnago g. 13A, Vilnius, Lietuva
Member of the Board
UAB Vendos
304472649
S. Konarskio g. 2
-
29, Vilnius, Lietuva
Director
APB Imum
305646914
S. Konarskio g. 2
-
29, Vilnius, Lietuva
Director
UAB Žemaitijos žemė
305704335
Vaidilutės g. 61, Vilnius, Lietuva
Director
Has no shareholdings in other companies above 5%.
Gintaras
GintarasGintaras
Gintaras
Juškauskas
JuškauskasJuškauskas
Juškauskas
Member of the Board, independent
Gintaras Juškauskas (born in 1970 m.) - Member of Board of APB Apranga since 29th April 2021 m. Education: Vilnius University,
Finance faculty (1998-2003), Master of Economics and Vilnius University, Law faculty (2010-2013), Master of Law. He has no
Company shares.
Information on positions in other companies:
Company name Company code Registered office Current position
Gintaro Juškausko IĮ
302720373
Vanaginės g. 87, Vilnius, Lietuva
Director
UAB Merits
301678932
Gedimino pr. 54B
-
1, Vilnius, Lietuva
Associate
Partner
Has no shareholdings in other companies above 5%.
MANAGEMENT
MANAGEMENTMANAGEMENT
MANAGEMENT
OF
OFOF
OF
THE
THETHE
THE
COMPANY
COMPANYCOMPANY
COMPANY
AND
ANDAND
AND
THE
THETHE
THE
GROUP
GROUPGROUP
GROUP
The key management members of the Company and the Group as of 31 December 2021:
Name, Surname Position
Number of
shares owned*
Part in the share
capital
Start at
company
Rimantas Perveneckas
General
Director
800 770
1,45%
1983
Ilona Šimkūnienė
Purchasing Director
-
-
1985
Ramūnas Gaidamavičius
Development Director
5 000
0,01%
2002
Gabrielius Morkūnas
Chief Financial Officer
-
-
2021
Aušra Tartilienė
Inditex chain Director
31 665
0,06%
1989
Irma Marcinkienė
Sales and Marketing Director
1 863
0,003%
2000
Audronė Martinkutė
Personnel Director
360
0,001%
2002
* with related parties
Information about CFO of the Company and the Group:
Gabrielius
GabrieliusGabrielius
Gabrielius
Morkūnas
MorkūnasMorkūnas
Morkūnas
Chief Financial Officer
Gabrielius Morkūnas (born in 1990) - Apranga Group Finance and Economics Director, in the Company since 2021. Education:
Mykolo Romerio University, Bachelor of Economics and Finance.
G O V E R N A N C E R E P O R T 3 . 2
APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius
FOR THE YEAR ENDED 31 DECEMBER 2021
(all tabular amounts are in EUR thousands unless otherwise stated)
65
Information on positions in other companies:
Company name Company code Registered office Current position
UAB Apranga BPB LT
300509648
Ukmergės 362, Vilnius, Lithuania
Member of the Board
UAB Apranga PLT
300551572
Ukmergės 362, Vilnius, Lithuania
Member of the Board
UAB Apranga SLT
301519684
Ukmergės 362, Vilnius, Lithuania
Member of the Board
UAB Apranga MLT
302627022
Ukmergės 362, Vilnius, Lithuania
Member of the Board
UAB Apranga HLT
304042131
Ukmergės 362, Vilnius, Lithuania
Member of the Board
UAB Apranga OLT
304757395
Ukmergės 362, Vilnius, Lithuania
Member of the Board
UAB Apranga Ecom LT
304184173
Ukmergės 362, Vilnius, Lithuania
Member of the Board
Apranga OU
11274427
Rotermanni mnt 18/1, Tallinn, Estonia
Member of the Board
Has no shareholdings in other companies above 5%.
AUDIT COMMITTEE
The Audit Committee consists of 3 members, 2 of them are independent. The Audit Committee is elected for a 4-year term.
Members of the Audit Committee are elected and recalled by the Board of the Company, except the independent members
of the Committee. The independent members of the Audit Committee is elected by the General Shareholders Meeting at the
proposal of the Management Board.
The main functions of the Audit Committee are:
- To inform the General Director of the Company of the outcome of the statutory audit;
- To monitor the financial reporting process and submit recommendations to ensure its integrity;
- To monitor the effectiveness of the Company’s internal quality control and risk management systems, having impact on
the financial reporting of the Company;
- To monitor the statutory audit of the annual and consolidated financial statements;
- To review and monitor the independence of the statutory auditors or the audit firms;
- To be responsible for the procedure for the selection of statutory auditor(s) or audit firm(s).
The General Shareholders Meeting hold on 27 April 2017 approved the new Charter of the Audit Committee.
The General Shareholders Meeting hold on 27 April 2021 approved three members of the Audit Committee for the new 4-year
term: Rita Zakalskienė (the independent member of the Committee, Chair of the committee) and Justina Puškorė (the
independent member of the Committee), Rasa Rulevičiūtė (an employee of the Company).
In 2021, 3 Audit Committee meetings were held. Following issues were discussed during the meetings of the Committee:
discussing the notes of the external auditors' to the financial statements for 2020; seeking approval for not audit services,
which Ernst & Young Baltic UAB planned to provide to MG grupė UAB; also planned for 2021 the scope of the audit and the
terms of the audit; and other issues.
Information
InformationInformation
Information
on
onon
on
major
majormajor
major
share
shareshare
share
packages
packagespackages
packages
controlled
controlledcontrolled
controlled
either
eithereither
either
directly
directlydirectly
directly
or
oror
or
indirectly
indirectlyindirectly
indirectly
Details of the shares are provided in Note 14 to the Consolidated financial statements,
Investments In Subsidiaries
.
Information
InformationInformation
Information
on
onon
on
transactions
transactionstransactions
transactions
with
withwith
with
related
relatedrelated
related
parties
partiesparties
parties
No transactions with related parties as provided for in art. 37(2) of the Law on Companies of the Republic of Lithuania were
concluded in 2021.
Information
InformationInformation
Information
on
onon
on
shareholders
shareholdersshareholders
shareholders
having
havinghaving
having
special
specialspecial
special
control
controlcontrol
control
rights
rightsrights
rights
All shares of the Company are of one class ordinary registered shares granting their owners (shareholders) equal rights. Details
of the shares are provided in Note 7 to the Consolidated financial statements,
Securities
.
Information
InformationInformation
Information
of
ofof
of
amendments
amendmentsamendments
amendments
to
toto
to
the
thethe
the
Company‘s
Company‘sCompany‘s
Company‘s
Articles
ArticlesArticles
Articles
of
ofof
of
Association
AssociationAssociation
Association
In 2021, the Company‘s Articles of Association were amended in accordance to law requirements.
Infor
InforInfor
Information
mationmation
mation
on
onon
on
all
allall
all
agreements
agreementsagreements
agreements
between
betweenbetween
between
shareholders
shareholdersshareholders
shareholders
The Company does not have any information on agreements between shareholders.
Information
InformationInformation
Information
on
onon
on
the
thethe
the
varied
variedvaried
varied
policy
policypolicy
policy
applicable
applicableapplicable
applicable
to
toto
to
the
thethe
the
election
electionelection
election
of
ofof
of
the
thethe
the
Company‘s
Company‘sCompany‘s
Company‘s
chief
chiefchief
chief
manager,
manager,manager,
manager,
the
thethe
the
members
membersmembers
members
of
ofof
of
governing
governinggoverning
governing
and
andand
and
supervisory
supervisorysupervisory
supervisory
boards
boardsboards
boards
The Company does not have the variety policy applicable to the election of the chief manager and the members of governing
and supervisory bodies. During the procedure of selection of candidates to the Company‘s board of directors, governing and
supervisory boards, the candidates shall be subject to requirements that do not discriminate a candidate on grounds of age,
sex,education, or professional experience. During the selection of a candidate, the Company does not set any restrictions for
nomination of a candidature on grounds of sex or age. Considering the specificity of the Company‘s business activity and the
status of a state-owned company, unbiased requirements which are only related to the functions and competences of the
members of a governing boards and the professional experience and education proportionate to these functions and
competences are set.
G O V E R N A N C E R E P O R T 3 . 2
APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius
FOR THE YEAR ENDED 31 DECEMBER 2021
(all tabular amounts are in EUR thousands unless otherwise stated)
66
Disclosure of Compliance with the Corporate Governance Code for the Companies Listed
on NASDAQ Vilnius
The public trade company APRANGA (hereinafter referred to as the “Company”), acting in compliance with Article 12(3) of the
Law of the Republic of Lithuania on Securities and paragraph 24.5 of the Listing Rules of AB NASDAQ OMX Vilnius, hereby
discloses how it complies with the Corporate Governance Code for the Companies listed on Nasdaq Vilnius as well as its
specific provisions or recommendations. In case of non-compliance with this Code or some of its provisions or
recommendations, the specific provisions or recommendations that are not complied with must be indicated and the reasons
for such non-compliance must be specified. In addition, other explanatory information indicated in this form must be
provided.
Summary
SummarySummary
Summary
of
ofof
of
the
thethe
the
Corporate
CorporateCorporate
Corporate
Governance
GovernanceGovernance
Governance
Report:
Report:Report:
Report:
Apranga APB is the parent company of the Group, registered in the Republic of Lithuania. At the end of 2020, it managed 25
daughter companies established in the three Baltic States. The Group’s core business is the retail sale of clothing. Of the 26
companies that make up the Group, 21 represent specific brands (Zara, Bershka, Pull&Bear, Stradivarius, Massimo Dutti, Zara
Home and Oysho) on the basis of franchise agreements concluded with Inditex, a leader in the global apparel retail market.
Three companies (APB Apranga, SIA Apranga and OÜ Apranga) represent brands other than Inditex (single-brand stores) as
well as their own retail chains (multi-brand stores): Apranga, Apranga Galerija, City and Mados Linija.
Corporate governance activities are concentrated in the Group’s parent company, APB Apranga, which coordinates finances,
legal, strategic planning and control, human resources and training, business management and development, information
technology, ordering and pricing, marketing and advertising, and other general areas within the Group’s companies. The
Group uses a centralized management model, and practically all management functions are concentrated at the Group’s
headquarters in Vilnius.
The Group’s main company, APB Apranga, has been listed on the Nasdaq Vilnius Stock Exchange since 1997. The company
has been on the Baltic Main List since 2005. The share capital of APB Apranga is EUR 16,034,668.40 and it is divided into
55,291,960 ordinary registered shares (ISIN code LT0000102337) with a nominal value of EUR 0.29 each, where each share
grants to its owner 1 vote (in total 55,291,960 voting shares), all shares are paid in full and give the owners equal rights.
On 31 December 2021, APB Apranga had 4 119 shareholders. The main parent company, whose financial statements are made
public, is UAB MG grupė. The main person controlling the Group is Mr. D. J. Mockus, who, together with related companies,
holds 41 706 850 APB Apranga shares, accounting for 75.43% of the authorized capital and total votes.
According to the Company’s articles of association, the bodies of the Company are the general meeting of shareholders, the
collegial management body – the management board, and the sole management body – the manager of the Company. A
supervisory board is not formed at the Company. Six members are elected to the management board by the general meeting
of shareholders for a maximum period of four years. The composition of the management board changed during the reporting
period: two independent members were elected to the management board. The Company’s management board was made
up of board chair D.J. Mockus and board members Ilona Šimkūnienė, Vidas Lazickas, Gintaras Juškauskas (independent),
Jonas Jokštys (independent) and Ramūnas Gaidamavičius. The management board elects and removes the manager of the
Company – the general director.
The Company has an audit committee consisting of three members, two of whom are independent. The audit committee is
elected for a period of four years. The members of the committee are appointed and removed by the Company’s general
meeting of shareholders on the recommendation of the Company’s management board. On 27 April 2017, the authority of
the audit committee and the composition of the audit committee consisting of three (3) members were approved by the
decision of the general meeting of shareholders. Members of the audit committee: Rita Zakalskienė (the independent
member of the Committee, Chair of the committee) and Justina Puškorė (the independent member of the Committee), Rasa
Rulevičiūtė (an employee of the Company).
Structured
StructuredStructured
Structured
table
tabletable
table
for
forfor
for
disclosure:
disclosure:disclosure:
disclosure:
PRINCIPLES/
PRINCIPLES/PRINCIPLES/
PRINCIPLES/
RECOMMENDATIONS
RECOMMENDATIONSRECOMMENDATIONS
RECOMMENDATIONS
YES
YESYES
YES
/
//
/
NO/
NO/NO/
NO/
NOT
NOTNOT
NOT
APPLICABLE
APPLICABLEAPPLICABLE
APPLICABLE
COMMENTARY
COMMENTARYCOMMENTARY
COMMENTARY
Principle
PrinciplePrinciple
Principle
1:
1:1:
1:
General
GeneralGeneral
General
meeting
meetingmeeting
meeting
of
ofof
of
shareholders,
shareholders,shareholders,
shareholders,
equitable
equitableequitable
equitable
treatment
treatmenttreatment
treatment
of
ofof
of
shareholders,
shareholders,shareholders,
shareholders,
and
andand
and
shareholders’
shareholders’shareholders’
shareholders’
rights
rightsrights
rights
The
TheThe
The
corporate
corporatecorporate
corporate
governance
governancegovernance
governance
framework
frameworkframework
framework
should
shouldshould
should
ensure
ensureensure
ensure
the
thethe
the
equitable
equitableequitable
equitable
treatment
treatmenttreatment
treatment
of
ofof
of
all
allall
all
shareholders.
shareholders.shareholders.
shareholders.
The
TheThe
The
corporate
corporatecorporate
corporate
governance
governancegovernance
governance
framework
frameworkframework
framework
should
shouldshould
should
protect
protectprotect
protect
the
thethe
the
rights
rightsrights
rights
of
ofof
of
shareholders.
shareholders.shareholders.
shareholders.
1.1.
All
shareholders
s
hould
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
adheres
to
the
Information
Disclosure
Guidelines and provides important information to investors
in a timely, accurate, clear and comprehensive manner on
its website https://aprangagroup.lt/lt/investuotojams, in the
Nasdaq Vilnius Information Disclosure System, in the
Central Storage Facility, and in presentations to investors by
the manager and senior management of the Company,
G O V E R N A N C E R E P O R T 3 . 2
APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius
FOR THE YEAR ENDED 31 DECEMBER 2021
(all tabular amounts are in EUR thousands unless otherwise stated)
67
PRINCIPLES/
PRINCIPLES/PRINCIPLES/
PRINCIPLES/
RECOMMENDATIONS
RECOMMENDATIONSRECOMMENDATIONS
RECOMMENDATIONS
YES
YESYES
YES
/
//
/
NO/
NO/NO/
NO/
NOT
NOTNOT
NOT
APPLICABLE
APPLICABLEAPPLICABLE
APPLICABLE
COMMENTARY
COMMENTARYCOMMENTARY
COMMENTARY
thus
providing
equal
access
to
it
to
all
of
the
Company’s
shareholders.
The Company complies with the requirements provided in
the Law on Companies concerning the right of shareholders
to information and the provision thereof.
The Company adheres to the decision-making procedures
prescribed to the competence of the general meeting of
shareholders by the Law on Companies as well as the
Company’s articles of association, and gives shareholders
equal opportunities to vote on the adoption of relevant
decisions at general meetings of shareholders (it is
permitted to vote by completing a ballot, represent a
shareholder by proxy, etc.; information about upcoming
general meetings of shareholders and related material is
also
published
in
English).
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
only
consists
of
ordinary
registered
intangible shares, which grant each shareholder equal
voting, ownership, dividend and other rights, depending on
the number of shares held.
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
provides
information
concerning
the
rights
attached to newly or previously issued shares in preliminary
prospectuses, in its annual and interim reports, and on its
website.
1.4.
Exclusive
transactions
that
are
particularly
important to the company, such as transfer of all
or almost all assets of the company which in
principle would mean the transfer of the
company, should be subject to approval of the
general meeting of shareholders.
No
Decisions
on
the
transfer,
lease,
investment,
pledge
or
mortgage of fixed assets with a book value of more than 1/20
of the authorized capital in accordance with the Company’s
articles of association, which were approved by decision the
general meeting of shareholders, are taken by the
Company’s management board. The competence of the
general meeting of shareholders provided for in the
Company’s articles of association does not differ from its
competence as provided for in the Law on Companies. In
any event, under the Law on Companies, approval of the
general meeting of shareholders does not relieve the
management board of responsibility for decisions made.
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
Shareholders
are
informed
about
upcoming
general
meetings of shareholders in accordance with the
requirements of legislation and the Company’s articles of
association – adhering to the notification deadlines and
methods and means of announcement. The opportunity to
participate in the meeting is supplemented by the option of
voting by ballot or authorizing another person to represent
the shareholder. All shareholders are also notified about
upcoming general meetings of shareholders in advance on
the Investor Calendar. The general meeting of shareholders
is always held at the Company’s headquarters. A working
day is always chosen for the date, and the time is always
during the first half of the day or around lunchtime, so
public transport can also be used to attend. In the notice of
the general meeting of shareholders being convened, the
Company does not restrict the right of shareholders to
submit new draft decisions either before or during the
meeting, and this is clearly stated in the notice of the
general meeting of shareholders being convened in both
Lithuanian
and
English.
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
Yes
The
notice
of
the
general
meeting
of
shareholders
being
convened, draft decisions, the general voting ballot, and
other related documents (for example, when amending the
articles of association – the articles of association and the
proposed amendments) are published/presented not only
in Lithuanian, but in English as well (thus far, there has not
been a need to prepare documents in other foreign
languages). Minutes of the general meeting of shareholders
(decisions taken during the meeting) are also published on
the Company’s website in English (for example:
https://aprangagroup.lt/en/investors/corporate-
G O V E R N A N C E R E P O R T 3 . 2
APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius
FOR THE YEAR ENDED 31 DECEMBER 2021
(all tabular amounts are in EUR thousands unless otherwise stated)
68
PRINCIPLES/
PRINCIPLES/PRINCIPLES/
PRINCIPLES/
RECOMMENDATIONS
RECOMMENDATIONSRECOMMENDATIONS
RECOMMENDATIONS
YES
YESYES
YES
/
//
/
NO/
NO/NO/
NO/
NOT
NOTNOT
NOT
APPLICABLE
APPLICABLEAPPLICABLE
APPLICABLE
COMMENTARY
COMMENTARYCOMMENTARY
COMMENTARY
publicly
not
only
in
Lithuanian
languag
e
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.
governance/shareholders
-
meetings/3755
-
resolutions
-
of
-
the-annual-general-meeting-of-apranga-apb-
shareholders-9)
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
are
furnished
with
these
opportuniti
es
–
information is provided about them in advance in the notice
of the general meeting of shareholders being convened.
The general voting ballot can also be completed in English.
1.8.
With
a
view
to
increasing
the
shareholders’ opportunities to participate
effectively at general meetings of shareholders, it
is recommended that companies should apply
modern technologies on a wider scale and thus
provide shareholders with the conditions to
participate and vote in general meetings of
shareholders via electronic means of
communication. In such cases the security of
transmitted information must be ensured and it
must be possible to identify the participating and
voting person.
No
Shareholder
s
are
not
yet
provided
with
these
conditions
because the security of transmitted information and
identification of the participating and voting person must
first be ensured by necessary and proportionate means. The
Company has not yet introduced such electronic means of
communication. We believe that these opportunities to
vote at the meeting:
- voting in person at the meeting;
- voting by proxy;
- voting upon concluding a voting trust agreement;
voting in advance by completing the general voting
ballot (in English as well), including its transmission to the
Company via electronic means of communication;
are versatile and sufficient, and that shareholders’ rights to
participate and vote at the meeting are properly
implemented.
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
If
these
issues
are
on
the
agenda
of
the
general
meeting
of
shareholders, new candidatures of members of the collegial
body, information about his/her educational background,
work experience and other managerial positions held and
the proposed audit company are specified in the draft
decisions of the general meeting of shareholders.
Remuneration of collegial body members is determined by
the Remuneration Policy approved by the general meeting
of shareholders.
All candidates for members of the Company’s collegial body
also inform the general meeting of shareholders what
position they hold and where, and how their other activities
are related to the Company and other legal entities related
to the Company, as defined in Article 19(9) of the Law on
Companies.
All information about elected management board
members is provided on the Company`s website.
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
Members
of
the
Company’s
collegial
body,
heads
of
the
administration, or other competent persons related to the
Company take part in the general meeting of shareholders
if they can provide information related to the agenda of the
general meeting of shareholders.
Proposed candidates for members of the collegial body also
participate whenever possible.
1
For the purposes of this Code, heads of the administration are the employees of the company who hold top level management positions.
G O V E R N A N C E R E P O R T 3 . 2
APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius
FOR THE YEAR ENDED 31 DECEMBER 2021
(all tabular amounts are in EUR thousands unless otherwise stated)
69
PRINCIPLES/
PRINCIPLES/PRINCIPLES/
PRINCIPLES/
RECOMMENDATIONS
RECOMMENDATIONSRECOMMENDATIONS
RECOMMENDATIONS
YES
YESYES
YES
/
//
/
NO/
NO/NO/
NO/
NOT
NOTNOT
NOT
APPLICABLE
APPLICABLEAPPLICABLE
APPLICABLE
COMMENTARY
COMMENTARYCOMMENTARY
COMMENTARY
Principle
PrinciplePrinciple
Principle
2:
2:2:
2:
Supervisory
SupervisorySupervisory
Supervisory
board
boardboard
board
2.1.
2.1.2.1.
2.1. Functions
FunctionsFunctions
Functions
and
andand
and
liability
liabilityliability
liability
of
ofof
of
the
thethe
the
supervisory
supervisorysupervisory
supervisory
board
boardboard
board
The
TheThe
The
supervisory
supervisorysupervisory
supervisory
board
boardboard
board
of
ofof
of
the
thethe
the
company
companycompany
company
should
shouldshould
should
ensure
ensureensure
ensure
representation
representationrepresentation
representation
of
ofof
of
the
thethe
the
interests
interestsinterests
interests
of
ofof
of
the
thethe
the
company
companycompany
company
and
andand
and
its
itsits
its
shareholders,
shareholders,shareholders,
shareholders,
accountability
accountabilityaccountability
accountability
of
ofof
of
this
thisthis
this
body
bodybody
body
to
toto
to
the
thethe
the
shareholders
shareholdersshareholders
shareholders
and
andand
and
objective
objectiveobjective
objective
monitoring
monitoringmonitoring
monitoring
of
ofof
of
the
thethe
the
company’s
company’scompany’s
company’s
operations
operationsoperations
operations
and
andand
and
its
itsits
its
management
managementmanagement
management
bodies
bodiesbodies
bodies
as
asas
as
well
wellwell
well
as
asas
as
constantly
constantlyconstantly
constantly
provide
provideprovide
provide
recommendations
recommendationsrecommendations
recommendations
to
toto
to
the
thethe
the
management
managementmanagement
management
bodies
bodiesbodies
bodies
of
ofof
of
the
thethe
the
company.
company.company.
company.
The
TheThe
The
supervisory
supervisorysupervisory
supervisory
board
boardboard
board
shoul
shoulshoul
should
dd
d
ensure
ensureensure
ensure
the
thethe
the
integrity
integrityintegrity
integrity
and
andand
and
transparency
transparencytransparency
transparency
of
ofof
of
the
thethe
the
company’s
company’scompany’s
company’s
financial
financialfinancial
financial
accounting
accountingaccounting
accounting
and
andand
and
control
controlcontrol
control
system.
system.system.
system.
2.1.1.
Members
of
the
supervisory
board
should
act in good faith, with care and responsibility for
the benefit and in the interests of the company
and its shareholders and represent their interests,
having regard to the interests of employees and
public welfare.
Not
applicable
A
supervisory
board
is
not
formed
at
the
Company.
2.1.2.
Where
decisions
of
the
supervisory
board
may have a different effect on the interests of the
company’s shareholders, the supervisory board
should treat all shareholders impartially and fairly.
It should ensure that shareholders are properly
informed about the company’s strategy, risk
management and control, and resolution of
conflicts of interest.
Not
applicable
2.1.3.
The
supervisory
board
should
be
impartial
in passing decisions that are significant for the
company’s operations and strategy. Members of
the supervisory board should act and pass
decisions without an external influence from the
persons
who
elected
them.
Not
applicable
2.1.4.
Members
of
the
supervisory
board
should
clearly voice their objections in case they believe
that a decision of the supervisory board is against
the interests of the company. Independent
2
members of the supervisory board should: a)
maintain independence of their analysis and
decision-making; b) not seek or accept any
unjustified privileges that might compromise
their independence.
Not
applicable
2.1.5.
The
supervisory
board
should
oversee
that
the company’s tax planning strategies are
designed and implemented in accordance with
the legal acts in order to avoid faulty practice that
is not related to the long-term interests of the
company and its shareholders, which may give
rise to reputational, legal or other risks.
Not
applicable
2.1.6.
The
company
should
ensure
that
the
supervisory board is provided with sufficient
resources (including financial ones) to discharge
their duties, including the right to obtain all the
necessary information or to seek independent
professional advice from external legal,
accounting or other experts on matters
pertaining to the competence of the supervisory
board and its committees.
Not
applicable
2
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.
G O V E R N A N C E R E P O R T 3 . 2
APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius
FOR THE YEAR ENDED 31 DECEMBER 2021
(all tabular amounts are in EUR thousands unless otherwise stated)
70
PRINCIPLES/
PRINCIPLES/PRINCIPLES/
PRINCIPLES/
RECOMMENDATIONS
RECOMMENDATIONSRECOMMENDATIONS
RECOMMENDATIONS
YES
YESYES
YES
/
//
/
NO/
NO/NO/
NO/
NOT
NOTNOT
NOT
APPLICABLE
APPLICABLEAPPLICABLE
APPLICABLE
COMMENTARY
COMMENTARYCOMMENTARY
COMMENTARY
2.2.
2.2.2.2.
2.2.
Formation
FormationFormation
Formation
of
ofof
of
the
thethe
the
supervisory
supervisorysupervisory
supervisory
board
boardboard
board
The
TheThe
The
procedure
procedureprocedure
procedure
of
ofof
of
the
thethe
the
formation
formationformation
formation
of
ofof
of
the
thethe
the
supervisory
supervisorysupervisory
supervisory
board
boardboard
board
should
shouldshould
should
ensure
ensureensure
ensure
proper
properproper
proper
resolution
resolutionresolution
resolution
of
ofof
of
conflicts
conflictsconflicts
conflicts
of
ofof
of
interest
interestinterest
interest
and
andand
and
effective
effectiveeffective
effective
and
andand
and
fair
fairfair
fair
corporate
corporatecorporate
corporate
governance.
governance.governance.
governance.
2.2.1.
The
members
of
the
supervisory
board
elected by the general meeting of shareholders
should collectively ensure the diversity of
qualifications, professional experience and
competences and seek for gender equality. With
a view to maintain a proper balance between the
qualifications of the members of the supervisory
board, it should be ensured that members of the
supervisory board, as a whole, should have diverse
knowledge, opinions and experience to duly
perform
their
tasks.
Not
applicable
2.2.2.
Members
of
the
supervisory
board
should
be appointed for a specific term, subject to
individual re-election for a new term in office in
order to ensure necessary development of
professional experience.
Not
applicable
2.2.3.
Chair
of
the
supervisory
board
should
be
a
person whose current or past positions
constituted no obstacle to carry out impartial
activities. A former manager or management
board member of the company should not be
immediately appointed as chair of the supervisory
board either. Where the company decides to
depart from these recommendations, it should
provide information on the measures taken to
ensure impartiality of the supervision.
Not
applicable
2.2.4.
Each
member
should
devote
sufficient
time and attention to perform his duties as a
member of the supervisory board. Each member
of the supervisory board should undertake to limit
his other professional obligations (particularly the
managing positions in other companies) so that
they would not interfere with the proper
performance of the duties of a member of the
supervisory board. Should a member of the
supervisory board attend less than a half of the
meetings of the supervisory board throughout
the financial year of the company, the
shareholders of the company should be notified
thereof.
Not
applicable
2.2.5.
When
it
is
proposed
to
appoint
a
member
of the supervisory board, it should be announced
which members of the supervisory board are
deemed to be independent. The supervisory
board may decide that, despite the fact that a
particular member meets all the criteria of
independence, he/she cannot be considered
independent due to special personal or company-
related circumstances.
Not
applicable
2.2.6.
The
amount
of
remuneration
to
members
of the supervisory board for their activity and
participation in meetings of the supervisory board
should be approved by the general meeting of
shareholders.
Not
applicable
2.2.7.
Every
year
the
supervisory
board
should
carry out an assessment of its activities. It should
include evaluation of the structure of the
supervisory board, its work organization and
ability to act as a group, evaluation of the
competence and work efficiency of each member
of
the
supervisory
board,
and
evaluation
whether
Not
applicable
G O V E R N A N C E R E P O R T 3 . 2
APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius
FOR THE YEAR ENDED 31 DECEMBER 2021
(all tabular amounts are in EUR thousands unless otherwise stated)
71
PRINCIPLES/
PRINCIPLES/PRINCIPLES/
PRINCIPLES/
RECOMMENDATIONS
RECOMMENDATIONSRECOMMENDATIONS
RECOMMENDATIONS
YES
YESYES
YES
/
//
/
NO/
NO/NO/
NO/
NOT
NOTNOT
NOT
APPLICABLE
APPLICABLEAPPLICABLE
APPLICABLE
COMMENTARY
COMMENTARYCOMMENTARY
COMMENTARY
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.
Principle
PrinciplePrinciple
Principle
3:
3:3:
3:
Management
ManagementManagement
Management
Board
BoardBoard
Board
3.1.
3.1.3.1.
3.1. Functions
FunctionsFunctions
Functions
and
andand
and
liability
liabilityliability
liability
of
ofof
of
the
thethe
the
management
managementmanagement
management
board
boardboard
board
The
TheThe
The
management
managementmanagement
management
board
boardboard
board
should
shouldshould
should
ensure
ensureensure
ensure
the
thethe
the
implementation
implementationimplementation
implementation
of
ofof
of
the
thethe
the
company’s
company’scompany’s
company’s
strategy
strategystrategy
strategy
and
andand
and
good
goodgood
good
corporate
corporatecorporate
corporate
governance
governancegovernance
governance
with
withwith
with
due
duedue
due
regard
regardregard
regard
to
toto
to
the
thethe
the
interests
interestsinterests
interests
of
ofof
of
its
itsits
its
shareholders,
shareholders,shareholders,
shareholders,
employees
employeesemployees
employees
and
andand
and
other
otherother
other
interest
interestinterest
interest
groups.
groups.groups.
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/No
The
Company
does
not
prepare
or
approve
a
separate
Company strategy. The Company prepares, approves and
publishes the Company’s one-year operational plans.
Company’s objectives are disclosed in the Company’s
annual reports and notifications of material events, which
are published in the same sources as provided in the answer
to 1.1.
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
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.
In performing the functions assigned to it, the
management board takes into account the needs of the
Company, shareholders, employees and other interest
groups; the objective of the management board is
essentially to achieve sustainable business development. At
the end of the year, the Company’s management board
approves next year’s budget, considering not only
expansion and planned investments, but also potential staff
salary increases, allocation of investments for employee
training and development, implementation of IT systems
and
security,
etc.
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/No
Compliance
with
the
provisions
of
laws
and
the
Company’s
internal policies is ensured by the management board, as
well as by the person or persons delegated by the
management board, and department heads and/or jurists,
within the scope of activities of the laws/policies.
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/No
Some
of
t
he
measures
are
applied.
In
2019,
the
management board approved and published the Code of
Ethics and Conduct, which contains, in addition to the
OECD Good Practice Guidance, other rules relevant to the
Company’s operations. In 2019, corruption prevention
trainings were organized for the company’s employees and
it is intended to repeat them in the future. The code of ethics
will be reviewed by the management board regularly and
updated as necessary.
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
When
appointing
the
manager
of
the
Company,
the
management board takes into account the appropriate
balance between the candidate’s qualifications, experience
and competence.
3
Link to the OECD Good Practice Guidance on Internal Controls, Ethics and Compliance: https://www.oecd.org/daf/anti-bribery/44884389.pdf
G O V E R N A N C E R E P O R T 3 . 2
APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius
FOR THE YEAR ENDED 31 DECEMBER 2021
(all tabular amounts are in EUR thousands unless otherwise stated)
72
PRINCIPLES/
PRINCIPLES/PRINCIPLES/
PRINCIPLES/
RECOMMENDATIONS
RECOMMENDATIONSRECOMMENDATIONS
RECOMMENDATIONS
YES
YESYES
YES
/
//
/
NO/
NO/NO/
NO/
NOT
NOTNOT
NOT
APPLICABLE
APPLICABLEAPPLICABLE
APPLICABLE
COMMENTARY
COMMENTARYCOMMENTARY
COMMENTARY
3.2.
3.2.3.2.
3.2.
Formation
FormationFormation
Formation
of
ofof
of
the
thethe
the
management
managementmanagement
management
board
boardboard
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/No
(due
to
gender
equality)
The
management
board
is
made
up
of
persons
of
different
professional experience and competences. The
management board is composed of experts in corporate
governance, economics and finance, taxes, procurement,
expansion and development who possess the diverse
knowledge, opinions and experience necessary for the
proper and effective functioning of the management board
and the interests of the Company. All members of the
management board are closely acquainted with the
activities of the Company, and two out of six members of the
management board are employees of the Company – heads
of administration. Even though only one of the six members
of the management board is a woman, there are no
requirements for the composition of the management
board
that
may
discriminate
on
the
basis
of
sex
in
any
way.
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/No
The
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 are disclosed
to the general meeting of shareholders in accordance with
the requirements of the legislation regulating the
processing of personal data and the internal legislation
approved by the Company establishing the principles of
data protection and processing, in all cases with the prior
informed consent of the individual.
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
New
members
of
the
management
board
are
familiarized
with their duties, the structure and operations of the
Company, and other information relevant to the activities of
a
management
board
member.
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
members
of
the
management
board
are
appointed
for
a four-year term or, when electing individual members –
until the end of the term of office of the current
management board. Members of the management board
who have responsibly carried out their duties, devoted time
to the work of the management board, and participated in
meetings, and who would like to continue to play an active
role in the activities of the management board, always have
the
opportunity
to
be
nominated
and
re
-
elected.
3.2.5.
Chair
of
t
he
management
board
should
be
a person whose current or past positions
constitute no obstacle to carry out impartial
activity. Where the supervisory board is not
formed, the former manager of the company
should not be immediately appointed as chair of
the management board. When a company
decides to depart from these recommendations,
it should furnish information on the measures it
has taken to ensure the impartiality of
supervision.
Yes
The
chair
of
the
management
board
is
a
person
who
has
never been the manager of the Company. The chair of the
Company’s management board is not an employee of the
Company and is a shareholder representative. It is the
Company’s belief that these facts are sufficient to state that
the chair of the management board is capable of acting
impartially and taking decisions which represent and
protect the rights of shareholders.
3.2.6.
Each
member
should
devote
sufficient
time and attention to the performance of duties
as a member of the management board. If a
member of the management board has attended
less than half of the meetings of the management
board over the course of the Company’s financial
year, the Company’s supervisory board – or, if a
Yes
The
Company
believes
that
each
member
devotes
sufficient
time and attention to their duties as member of the
management board, actively participates in the meetings of
the management board, and devotes time to prepare for
them. Thus far, there have been no members who have
attended less than half of the meetings of the management
board over the course of the Company’s financial year, but
G O V E R N A N C E R E P O R T 3 . 2
APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius
FOR THE YEAR ENDED 31 DECEMBER 2021
(all tabular amounts are in EUR thousands unless otherwise stated)
73
PRINCIPLES/
PRINCIPLES/PRINCIPLES/
PRINCIPLES/
RECOMMENDATIONS
RECOMMENDATIONSRECOMMENDATIONS
RECOMMENDATIONS
YES
YESYES
YES
/
//
/
NO/
NO/NO/
NO/
NOT
NOTNOT
NOT
APPLICABLE
APPLICABLEAPPLICABLE
APPLICABLE
COMMENTARY
COMMENTARYCOMMENTARY
COMMENTARY
supervisory
board
is
not
formed
at
the
Company,
the general meeting of shareholders – should be
informed.
such
information
could
be
submitted
to
the
general
meeting of shareholders.
3.2.7.
In
the
event
that
the
management
board
is elected in the cases established by the Law
where the supervisory board is not formed at the
company, and some of its members will be
independent
4
, it should be announced which
members of the management board are deemed
as independent. The management board may
decide that, despite the fact that a particular
member meets all the criteria of independence
established by the Law, he/she cannot be
considered independent due to special personal
or
company
-
related
circumstances.
Yes
In
cases
when
managemend
board
is
elected,
it
is
announced, which members of the management board are
deemed as independent.
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
Remuneration
Policy,
which
indicates
the
amount
of
remuneration to the members of the board (at the moment
to the independent ones only), is approved by the general
meeting of shareholders of the company.
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/No
The
Company
believes
that
the
members
of
the
management board 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, and that they do not act in their personal
interest when adopting decisions.
The Company is of the opinion that the duties of
confidentiality that the members of the management
board are subject to by law are sufficient to ensure their
loyalty and trustworthiness, so non-compete agreements
are not concluded with the members of the management
board and their activities are not additionally restricted by
such agreements.
Members of the management board are introduced to the
list of confidential information and trade secrets approved
by the management board.
The members of the Company’s management board are
prohibited by law from using the business information or
opportunities related to the Company’s operations in
violation
of
the
company’s
interests.
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
The
management
board
does
not
carry
out
an
annual
assessment of its activities.
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.
G O V E R N A N C E R E P O R T 3 . 2
APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius
FOR THE YEAR ENDED 31 DECEMBER 2021
(all tabular amounts are in EUR thousands unless otherwise stated)
74
PRINCIPLES/
PRINCIPLES/PRINCIPLES/
PRINCIPLES/
RECOMMENDATIONS
RECOMMENDATIONSRECOMMENDATIONS
RECOMMENDATIONS
YES
YESYES
YES
/
//
/
NO/
NO/NO/
NO/
NOT
NOTNOT
NOT
APPLICABLE
APPLICABLEAPPLICABLE
APPLICABLE
COMMENTARY
COMMENTARYCOMMENTARY
COMMENTARY
Principle
PrinciplePrinciple
Principle
4:
4:4:
4:
Rules
RulesRules
Rules
of
ofof
of
procedure
procedureprocedure
procedure
of
ofof
of
the
thethe
the
supervisory
supervisorysupervisory
supervisory
board
boardboard
board
and
andand
and
the
thethe
the
management
managementmanagement
management
board
boardboard
board
of
ofof
of
the
thethe
the
company
companycompany
company
The
TheThe
The
rules
rulesrules
rules
of
ofof
of
procedure
procedureprocedure
procedure
of
ofof
of
the
thethe
the
supervisory
supervisorysupervisory
supervisory
board,
board,board,
board,
if
ifif
if
it
itit
it
is
isis
is
formed
formedformed
formed
at
atat
at
the
thethe
the
company,
company,company,
company,
and
andand
and
of
ofof
of
the
thethe
the
management
managementmanagement
management
board
boardboard
board
should
shouldshould
should
ensure
ensureensure
ensure
efficient
efficientefficient
efficient
operation
operationoperation
operation
and
andand
and
decision
decisiondecision
decision-
--
-making
makingmaking
making
of
ofof
of
these
thesethese
these
bodies
bodiesbodies
bodies
and
andand
and
promote
promotepromote
promote
active
activeactive
active
cooperation
cooperationcooperation
cooperation
between
betweenbetween
between
the
thethe
the
company’s
company’scompany’s
company’s
management
managementmanagement
management
bodies.
bodies.bodies.
bodies.
4.1.
The
management
board
and
the
supervisory
board, if the latter is formed at the company,
should act in close cooperation in order to attain
benefit for the company and its shareholders.
Good corporate governance requires an open
discussion between the management board and
the supervisory board. The management board
should regularly and, where necessary,
immediately inform the supervisory board about
any matters significant for the company that are
related to planning, business development, risk
management and control, and compliance with
the obligations at the company. The management
board should inform he supervisory board about
any derogations in its business development from
the previously formulated plans and objectives by
specifying
the
reasons
for
this.
Not
applicable
A
supervisory
board
is
not
formed
at
the
Company.
4.2.
It
is
recommended
that
meetings
of
the
company’s collegial bodies should be held at the
respective intervals, according to the pre-
approved schedule. Each company is free to
decide how often meetings of the collegial bodies
should be convened but it is recommended that
these meetings should be convened at such
intervals that uninterruptable resolution of
essential corporate governance issues would be
ensured. Meetings of the company’s collegial
bodies should be convened at least once per
quarter.
Yes
Meetings
of
the
management
board
are
held
at
the
respective
intervals, according to the pre-approved schedule, usually once
per quarter.
4.3.
Members
of
a
collegial
body
should
be
notified
of
the meeting being convened in advance so that
they would have sufficient time for proper
preparation for the issues to be considered at the
meeting and a fruitful discussion could be held
and appropriate decisions could be adopted.
Along with the notice of the meeting being
convened all materials relevant to the issues on the
agenda of the meeting should be submitted to the
members of the collegial body. The agenda of the
meeting should not be changed or supplemented
during the meeting, unless all members of the
collegial body present at the meeting agree with
such change or supplement to the agenda, or
certain issues that are important to the company
require
immediate
resolution.
Yes
The
members
of
the
management
board
are
notified
of
the
meeting of the management board being convened in advance
so that they have sufficient time for proper preparation for the
issues to be considered at the meeting and a fruitful discussion
can be held. Along with the notice of the meeting being
convened, all materials relevant to the issues on the agenda of
the meeting are submitted to the members of the management
board, and the members of the management board can always
request additional information if they consider that the
information provided is inadequate.
4.4.
In
order
to
coordinate
the
activities
of
the
company’s collegial bodies and ensure effective
decision-making process, the chairs of the
company’s collegial supervision and management
bodies should mutually agree on the dates and
agendas of the meetings and close cooperate in
resolving other matters related to corporate
governance. Meetings of the company’s
supervisory board should be open to members of
the management board, particularly in such cases
where issues concerning the removal of the
management board members, their responsibility
or remuneration are discussed.
Not
applicable
A
supervisory
board
is
not
formed
at
the
Company.
G O V E R N A N C E R E P O R T 3 . 2
APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius
FOR THE YEAR ENDED 31 DECEMBER 2021
(all tabular amounts are in EUR thousands unless otherwise stated)
75
PRINCIPLES/
PRINCIPLES/PRINCIPLES/
PRINCIPLES/
RECOMMENDATIONS
RECOMMENDATIONSRECOMMENDATIONS
RECOMMENDATIONS
YES
YESYES
YES
/
//
/
NO/
NO/NO/
NO/
NOT
NOTNOT
NOT
APPLICABLE
APPLICABLEAPPLICABLE
APPLICABLE
COMMENTARY
COMMENTARYCOMMENTARY
COMMENTARY
Principle
PrinciplePrinciple
Principle
5:
5:5:
5:
Nomination,
Nomination,Nomination,
Nomination,
remuneration
remunerationremuneration
remuneration
and
andand
and
audit
auditaudit
audit
committees
committeescommittees
committees
5.1.
5.1.5.1.
5.1. Purpose
PurposePurpose
Purpose
and
andand
and
formation
formationformation
formation
of
ofof
of
committees
committeescommittees
committees
The
TheThe
The
committees
committeescommittees
committees
formed
formedformed
formed
at
atat
at
the
thethe
the
company
companycompany
company
should
shouldshould
should
increase
increaseincrease
increase
the
thethe
the
work
workwork
work
efficiency
efficiencyefficiency
efficiency
of
ofof
of
the
thethe
the
supervisory
supervisorysupervisory
supervisory
board
boardboard
board
or,
or,or,
or,
where
wherewhere
where
the
thethe
the
supervisory
supervisorysupervisory
supervisory
board
boardboard
board
is
isis
is
not
notnot
not
formed,
formed,formed,
formed,
of
ofof
of
the
thethe
the
manage
managemanage
management
mentment
ment
board
boardboard
board
which
whichwhich
which
performs
performsperforms
performs
the
thethe
the
supervisory
supervisorysupervisory
supervisory
functions
functionsfunctions
functions
by
byby
by
ensuring
ensuringensuring
ensuring
that
thatthat
that
decisions
decisionsdecisions
decisions
are
areare
are
based
basedbased
based
on
onon
on
due
duedue
due
consideration
considerationconsideration
consideration
and
andand
and
help
helphelp
help
organise
organiseorganise
organise
its
itsits
its
work
workwork
work
in
inin
in
such
suchsuch
such
a
aa
a
way
wayway
way
that
thatthat
that
the
thethe
the
decisions
decisionsdecisions
decisions
it
itit
it
takes
takestakes
takes
would
wouldwould
would
be
bebe
be
free
freefree
free
of
ofof
of
material
materialmaterial
material
conflicts
conflictsconflicts
conflicts
of
ofof
of
interest.
interest.interest.
interest.
Committees
CommitteesCommittees
Committees
should
shouldshould
should
exercise
exerciseexercise
exercise
independent
independentindependent
independent
judgment
judgmentjudgment
judgment
and
andand
and
integrity
integrityintegrity
integrity
when
whenwhen
when
performing
performingperforming
performing
their
theirtheir
their
functions
functionsfunctions
functions
and
andand
and
provide
provideprovide
provide
the
thethe
the
collegial
collegialcollegial
collegial
body
bodybody
body
with
withwith
with
recommendations
recommendationsrecommendations
recommendations
concerning
concerningconcerning
concerning
the
thethe
the
decisions
decisionsdecisions
decisions
of
ofof
of
the
thethe
the
collegial
collegialcollegial
collegial
body.
body.body.
body.
However,
However,However,
However,
the
thethe
the
final
finalfinal
final
decision
decisiondecision
decision
should
shouldshould
should
be
bebe
be
adopted
adoptedadopted
adopted
by
byby
by
the
thethe
the
collegial
collegialcollegial
collegial
body.
body.body.
body.
5.1.1.
Taking
du
e
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
55
5
.
Yes/No
Nomination
and
remuneration
committees
are
not
formed
at
the Company, as the Company believes that the management
board, in performing its functions, partially performs the
functions of the said committees. The Company’s management
board selects and appoints the manager of the Company and
makes recommendations to the manager of the Company on
the appointment of senior management. The management
board will provide feedback and suggestions on the
remuneration policy approved in the Company under the valid
legislation. The Company’s management board approves the
Company’s strategic and budget plans and controls their
implementation and analyzes and evaluates the reports of the
Company’s manager and senior management on
implementation of the Company’s approved budget plans and
the use of funds. In compliance with the requirements of the
Law on the Audit of Financial Statement (Official Gazette, 2008,
No. 82-3233), the Company has formed an audit committee
consisting of three members, two of whom are independent.
The audit committee is elected for a period of four years. The
members of the committee are appointed and removed by the
Company’s general meeting of shareholders on the
recommendation of the Company’s management board. On 27
April 2017, the authority of the audit committee was approved
by
the
decision
of
the
general
meeting
of
shareholders.
5.1.2.
Companies
may
decide
to
set
up
less
than
three committees. In such case companies should
explain in detail why they have chosen the
alternative approach, and how the chosen
approach corresponds with the objectives set for
the
three
different
committees.
Yes
See
answer
to
5.1.1.
5.1.3.
In
the
cases
established
by
the
legal
acts
the functions assigned to the committees formed
at companies may be performed by the collegial
body itself. In such case the provisions of this Code
pertaining to the committees (particularly those
related to their role, operation and transparency)
should apply, where relevant, to the collegial body
as
a
whole.
Yes
See
answer
to
5.1.1.
5.1.4.
Committees
established
by
the
collegial
body should normally be composed of at least
three members. Subject to the requirements of
the legal acts, committees could be comprised
only of two members as well. Members of each
committee should be selected on the basis of
their competences by giving priority to
independent members of the collegial body. The
chair of the management board should not serve
as
the
chair
of
committees.
Yes/No
Yes,
as
far
as
the
audit
committee
is
concerned.
See answer to 5.1.1.
The chair of the audit committee is not the chair of the
management board; furthermore, the chair of the audit
committee is an independent member of the audit
committee.
5.1.5.
The
authority
of
each
committee
formed
should be determined by the collegial body itself.
Committees should perform their duties
Yes/No
The
author
ity
of
the
audit
committee
laying
down
the
procedure for the formation of the committee, the number
and composition of members and requirements for
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).
G O V E R N A N C E R E P O R T 3 . 2
APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius
FOR THE YEAR ENDED 31 DECEMBER 2021
(all tabular amounts are in EUR thousands unless otherwise stated)
76
PRINCIPLES/
PRINCIPLES/PRINCIPLES/
PRINCIPLES/
RECOMMENDATIONS
RECOMMENDATIONSRECOMMENDATIONS
RECOMMENDATIONS
YES
YESYES
YES
/
//
/
NO/
NO/NO/
NO/
NOT
NOTNOT
NOT
APPLICABLE
APPLICABLEAPPLICABLE
APPLICABLE
COMMENTARY
COMMENTARYCOMMENTARY
COMMENTARY
according
to
the
authority
delegated
to
them
and
regularly inform the collegial body about their
activities and performance on a regular basis. The
authority of each committee defining its role and
specifying its rights and duties should be made
public at least once a year (as part of the
information disclosed by the company on its
governance structure and practice on an annual
basis). In compliance with the legal acts
regulating the processing of personal data,
companies should also include in their annual
reports the statements of the existing
committees on their composition, the number of
meetings and attendance over the year as well as
the main directions of their activities and
performance.
members,
the
period
of
membership
of
the
committee,
the
rights and obligations of the committee, the procedure for
organizing meetings and making decisions, the scale of the
information provided to the committee and the procedure
for its provision, etc. are approved by the body that elected
this body (its members) – the general meeting of
shareholders. The members of the audit committee are
presented to the meeting by the management board.
The authority of the audit committee defining its role and
specifying its rights and duties was made public after it was
approved in 2017, and is not additionally published by the
Company every year if there are no changes.
The information provided for in this paragraph is published
annually in the annual report.
5.1.6.
With
a
view
to
ensure
the
independence
and impartiality of the committees, the members
of the collegial body who are not members of the
committees should normally have a right to
participate in the meetings of the committee only
if invited by the committee. A committee may
invite or request that certain employees of the
company or experts would participate in the
meeting. Chair of each committee should have
the possibility to maintain direct communication
with the shareholders. Cases where such practice
is to be applied should be specified in the rules
regulating the activities of the committee.
Yes
It
is
the
audit
committee’s
right
and
prerogative
to
decide
who to invite to participate in meetings of the management
board (excerpts from the Audit Committee Charter):
“4.3. The Company’s general director, the chair of the
management board and/or members of the management
board and external auditors may participate in the
meetings of the Committee. In addition, the Company’s
finance and economics director and other employees of the
Company may be invited to participate in the meetings of
the Committee.”
“3.8. The Committee shall be accountable to the
Company’s general meeting of shareholders. The
Committee shall submit an activity report to the general
meeting of shareholders together with the complete set of
financial statements submitted by the management board
for approval.”
5.2. Nomination
NominationNomination
Nomination
committee
committeecommittee
committee
5.2.1.
The
key
functions
of
the
nomination
committee should be the following:
1) to select candidates to fill vacancies in the
membership of supervisory and management
bodies and the administration and recommend the
collegial body to approve them. The nomination
committee should evaluate the balance of skills,
knowledge and experience in the management
body, prepare a description of the functions and
capabilities required to assume a particular position
and assess the time commitment expected;
2) assess, on a regular basis, the structure, size and
composition of the supervisory and management
bodies as well as the skills, knowledge and activity of
its members, and provide the collegial body with
recommendations on how the required changes
should be sought;
3) devote the attention necessary to ensure
succession
planning.
Not
applicable
See
answer
to
5.1.1.
5.2.2.
When
dealing
with
issues
related
to
members of the collegial body who have
employment relationships with the company and
the heads of the administration, the manager of
the company should be consulted by granting
him/her the right to submit proposals to the
Nomination Committee.
Not
applicable
See
answer
to
5.1.1.
5.3.
5.3.5.3.
5.3. Remuneration
RemunerationRemuneration
Remuneration
committee
committeecommittee
committee
G O V E R N A N C E R E P O R T 3 . 2
APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius
FOR THE YEAR ENDED 31 DECEMBER 2021
(all tabular amounts are in EUR thousands unless otherwise stated)
77
PRINCIPLES/
PRINCIPLES/PRINCIPLES/
PRINCIPLES/
RECOMMENDATIONS
RECOMMENDATIONSRECOMMENDATIONS
RECOMMENDATIONS
YES
YESYES
YES
/
//
/
NO/
NO/NO/
NO/
NOT
NOTNOT
NOT
APPLICABLE
APPLICABLEAPPLICABLE
APPLICABLE
COMMENTARY
COMMENTARYCOMMENTARY
COMMENTARY
The
main
functions
of
the
remuneration
committee
should be as follows:
1) submit to the collegial body proposals on the
remuneration policy applied to members of the
supervisory and management bodies and the heads
of the administration for approval. Such policy
should include all forms of remuneration, including
the fixed-rate remuneration, performance-based
remuneration, financial incentive schemes, pension
arrangements and termination payments as well as
conditions which would allow the company to
recover the amounts or suspend the payments by
specifying the circumstances under which it would
be expedient to do so;
2) submit to the collegial body proposals regarding
individual remuneration for members of the
collegial bodies and the heads of the administration
in order to ensure that they would be consistent
with the company’s remuneration policy and the
evaluation of the performance of the persons
concerned;
3) review, on a regular basis, the remuneration policy
and its implementation.
Not
applicable
See
answer
to
5.1.1.
The
remuneration
policy
is
drafted
and
approved as provided by the amendments to the Law on
Companies.
5.4.
5.4.5.4.
5.4. Audit
AuditAudit
Audit
committee
committeecommittee
committee
5.4.1.
The
key
functions
of
the
audit
committee
are defined in the legal acts regulating the
activities of the audit committee
6
66
6
.
Yes
5.4.2.
All
members
of
the
committee
should
be
provided with detailed information on specific
issues of the company’s accounting system,
finances and operations. The heads of the
company’s administration should inform the
audit committee about the methods of
accounting for significant and unusual
transactions where the accounting may be
subject to different approaches.
Yes
The
approved
Audit
Committee
Charter
provides
for
the
following:
“3.3. The Committee shall be entitled:
3.3.1. to obtain any information or documents when
performing the Committee’s duties;
3.3.2. to obtain full information related to the specific
features of the Company’s accounting, finances and
operations. At the request of the members of the
Committee or at its own initiative, the Company’s
administration should inform the Committee about the
methods of accounting for significant and unusual
transactions where the accounting may be subject to
different approaches, as well as about activities in
preferential trade areas and/or activities carried out through
special-purpose entities (companies, organizations) in order
to determine whether these activities are justified.
3.4. The Committee shall submit requests for
information or documents to the Company’s general
director. The Company’s general director shall provide the
Committee member(s) with access to the information or
documents.”
The Audit Committee Charter does not provide for any
exceptions in which information may be withheld.
The audit committee or its members may exercise these
established rights without restriction.
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.
G O V E R N A N C E R E P O R T 3 . 2
APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius
FOR THE YEAR ENDED 31 DECEMBER 2021
(all tabular amounts are in EUR thousands unless otherwise stated)
78
PRINCIPLES/
PRINCIPLES/PRINCIPLES/
PRINCIPLES/
RECOMMENDATIONS
RECOMMENDATIONSRECOMMENDATIONS
RECOMMENDATIONS
YES
YESYES
YES
/
//
/
NO/
NO/NO/
NO/
NOT
NOTNOT
NOT
APPLICABLE
APPLICABLEAPPLICABLE
APPLICABLE
COMMENTARY
COMMENTARYCOMMENTARY
COMMENTARY
5.4.3.
The
audit
committee
should
decide
whether the participation of the chair of the
management board, the manager of the
company, the chief finance officer (or senior
employees responsible for finance and
accounting), the internal and external auditors in
its meetings is required (and, if required, when).
The committee should be entitled, when needed,
to meet the relevant persons without members of
the management bodies present.
Yes
The
audit
committee
is
free
to
choose
who
to
invite
to
its
meetings, or to meet without inviting anyone to the
meeting. The participation of members of the management
bodies is only possible at the direction of the audit
committee. Since there is one employee of the Company on
the audit committee, the committee may, if necessary,
arrange a meeting with the necessary employee of the
Company without members of the management bodies
present. The committee is free to decide on meetings with
other necessary persons (not employees) and acts
independently. See also answer to 5.1.1.
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.
Not
applicable
/Yes
The
Company
does
not
have
any
internal
auditors.
The
audit
committee is informed about the work program of external
auditors and receives from the audit firm a report
describing all relationships between the independent audit
firm and the Company and its group.
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.
No
The
procedure
for
reporting
suspicions
of
potential
violations committed at the Company is established and
posted on the Company’s website, as regulated by the Law
on Whistleblower Protection. There is an internal channel
for the proportionate and independent investigation of
such issues and appropriate follow-up actions, and there are
reporting rules in place (link below). In the rules, the audit
committee is not designated as a supervisory body for
compliance with the relevant provisions of the Company
and has not done so thus far. More about reports:
https://aprangagroup.lt/lt/investuotojams/bendroves-
valdymas/apb
-
apranga
-
va
ldymo
-
principai#gdpr_taisykles
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.
No
The
committee
is
accountable
to
the
Company’s
general
meeting of shareholders. The committee submits an
activity report to the general meeting of shareholders
together with the complete set of financial statements
submitted by the management board for approval.
Principle
PrinciplePrinciple
Principle
6:
6:6:
6:
Prevention
PreventionPrevention
Prevention
and
andand
and
disclosure
disclosuredisclosure
disclosure
of
ofof
of
conflicts
conflictsconflicts
conflicts
of
ofof
of
interest
interestinterest
interest
The
TheThe
The
corporate
corporatecorporate
corporate
governance
governancegovernance
governance
framework
frameworkframework
framework
should
shouldshould
should
encourage
encourageencourage
encourage
members
membersmembers
members
of
ofof
of
the
thethe
the
company’s
company’scompany’s
company’s
supervisory
supervisorysupervisory
supervisory
and
andand
and
management
managementmanagement
management
bodies
bodiesbodies
bodies
to
toto
to
avoid
avoidavoid
avoid
conflicts
conflictsconflicts
conflicts
of
ofof
of
interest
interestinterest
interest
and
andand
and
ensure
ensureensure
ensure
a
aa
a
transparent
transparenttransparent
transparent
and
andand
and
effective
effectiveeffective
effective
mechanism
mechanismmechanism
mechanism
of
ofof
of
disclosure
disclosuredisclosure
disclosure
of
ofof
of
conflicts
conflictsconflicts
conflicts
of
ofof
of
interest
interestinterest
interest
related
relatedrelated
related
to
toto
to
members
membersmembers
members
of
ofof
of
the
thethe
the
supervisory
supervisorysupervisory
supervisory
and
andand
and
management
managementmanagement
management
bodies.
bodies.bodies.
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
To
the
Company’s
knowledge,
the
members
of
the
Company’s management body avoid situations in which
their personal interests are or may be in conflict with those
of the Company. The members of the Company’s
management body are informed of their duty to report,
within a reasonable period of time, such a conflict of interest
to the other members of the same body, or to the body of
the Company that elected them, or to the shareholders of
the Company.
This requirement, inter alia, is provided in the Company’s
Code of Ethics and Conduct. More about avoiding conflict of
interest:
https://aprangagroup.lt/images/download/APRANGA_Etiko
s_ir_elgesio_kodeksas_2019.pdf
G O V E R N A N C E R E P O R T 3 . 2
APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius
FOR THE YEAR ENDED 31 DECEMBER 2021
(all tabular amounts are in EUR thousands unless otherwise stated)
79
PRINCIPLES/
PRINCIPLES/PRINCIPLES/
PRINCIPLES/
RECOMMENDATIONS
RECOMMENDATIONSRECOMMENDATIONS
RECOMMENDATIONS
YES
YESYES
YES
/
//
/
NO/
NO/NO/
NO/
NOT
NOTNOT
NOT
APPLICABLE
APPLICABLEAPPLICABLE
APPLICABLE
COMMENTARY
COMMENTARYCOMMENTARY
COMMENTARY
Principle
PrinciplePrinciple
Principle
7:
7:7:
7:
Remuneration
RemunerationRemuneration
Remuneration
policy
policypolicy
policy
of
ofof
of
the
thethe
the
company
companycompany
company
The
TheThe
The
remuneration
remunerationremuneration
remuneration
policy
policypolicy
policy
and
andand
and
the
thethe
the
procedure
procedureprocedure
procedure
for
forfor
for
review
reviewreview
review
and
andand
and
disclosure
disclosuredisclosure
disclosure
of
ofof
of
such
suchsuch
such
policy
policypolicy
policy
established
establishedestablished
established
at
atat
at
the
thethe
the
company
companycompany
company
should
shouldshould
should
prevent
preventprevent
prevent
potential
potentialpotential
potential
conflicts
conflictsconflicts
conflicts
of
ofof
of
interest
interestinterest
interest
and
andand
and
abuse
abuseabuse
abuse
in
inin
in
determining
determiningdetermining
determining
remuneration
remunerationremuneration
remuneration
of
ofof
of
members
membersmembers
members
of
ofof
of
the
thethe
the
collegial
collegialcollegial
collegial
bodies
bodiesbodies
bodies
and
andand
and
heads
headsheads
heads
of
ofof
of
the
thethe
the
administration,
administration,administration,
administration,
in
inin
in
addition
additionaddition
addition
it
itit
it
should
shouldshould
should
ensure
ensureensure
ensure
the
thethe
the
publicity
publicitypublicity
publicity
and
andand
and
transparency
transparencytransparency
transparency
of
ofof
of
the
thethe
the
company’s
company’scompany’s
company’s
remuneration
remunerationremuneration
remuneration
policy
policypolicy
policy
and
andand
and
its
itsits
its
long
longlong
long-
--
-term
termterm
term
strategy.
strategy.strategy.
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
https://aprangagroup.lt/en/investors/corporate
-
governance/principles-of-corporate-governance
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/No
The
remuneration
policy
is
drafted
and
adopted
in
accordance with the requirements of the Law on
Companies and actual situation in the Company. The
remuneration policy does not cover factors that are not
applied in the Company or for which there is no established
practice or generally applicable principles in the Company.
7.3.
With
a
view
to
avoid
potential
conflicts
of
interest, the remuneration policy should
provide that members of the collegial bodies
which perform the supervisory functions
should not receive remuneration based on the
company’s performance.
Yes
According
to
the
Remuneration
Policy,
remuneration
for
work in the board is received only by independent members
of the board and is fixed.
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.
No
Severance
pay
policy
is
not
established
in
the
remuneration
policy. The amount of severance pay would be decided on a
case-by-case basis, taking into account the Company's
interests, principles of reasonableness, proportionality,
fairness and integrity as well as consensus reached between
the parties, contribution to the Company's activities and
reasons for dismissal.
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.
No
No
financial
incentive
scheme,
as
defined
by
the
Law
on
Markets in Financial Instruments, is applied at the
Company.
G O V E R N A N C E R E P O R T 3 . 2
APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius
FOR THE YEAR ENDED 31 DECEMBER 2021
(all tabular amounts are in EUR thousands unless otherwise stated)
80
PRINCIPLES/
PRINCIPLES/PRINCIPLES/
PRINCIPLES/
RECOMMENDATIONS
RECOMMENDATIONSRECOMMENDATIONS
RECOMMENDATIONS
YES
YESYES
YES
/
//
/
NO/
NO/NO/
NO/
NOT
NOTNOT
NOT
APPLICABLE
APPLICABLEAPPLICABLE
APPLICABLE
COMMENTARY
COMMENTARYCOMMENTARY
COMMENTARY
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
remuneration
report
is
published
together
with
the
Company's annual report how the content requirements of
such a report are provided by the Law on Corporate
Financial Statements.
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
Approval
of
the
remuneration
policy
or
any
major
change
of
the policy is within the competence of the general meeting
of shareholders.
Principle
PrinciplePrinciple
Principle
8:
8:8:
8:
Role
RoleRole
Role
of
ofof
of
stakeholders
stakeholdersstakeholders
stakeholders
in
inin
in
corporate
corporatecorporate
corporate
governance
governancegovernance
governance
The
TheThe
The
corporate
corporatecorporate
corporate
governance
governancegovernance
governance
framework
frameworkframework
framework
should
shouldshould
should
recognize
recognizerecognize
recognize
the
thethe
the
rights
rightsrights
rights
of
ofof
of
stakeholders
stakeholdersstakeholders
stakeholders
entrenched
entrenchedentrenched
entrenched
in
inin
in
the
thethe
the
laws
lawslaws
laws
or
oror
or
mutual
mutualmutual
mutual
agreements
agreementsagreements
agreements
and
andand
and
encourage
encourageencourage
encourage
active
activeactive
active
cooperation
cooperationcooperation
cooperation
between
betweenbetween
between
companies
companiescompanies
companies
and
andand
and
stakeholders
stakeholdersstakeholders
stakeholders
in
inin
in
creating
creatingcreating
creating
the
thethe
the
company
companycompany
company
value,
value,value,
value,
jobs
jobsjobs
jobs
and
andand
and
financial
financialfinancial
financial
sustainability.
sustainability.sustainability.
sustainability.
In
InIn
In
the
thethe
the
context
contextcontext
context
of
ofof
of
this
thisthis
this
principle
principleprinciple
principle
the
thethe
the
concept
conceptconcept
concept
“
““
“
stakeholders
stakeholdersstakeholders
stakeholders
”
””
”
includes
includesincludes
includes
investors,
investors,investors,
investors,
employees,
employees,employees,
employees,
creditors,
creditors,creditors,
creditors,
suppliers,
suppliers,suppliers,
suppliers,
clients,
clients,clients,
clients,
local
locallocal
local
community
communitycommunity
community
and
andand
and
other
otherother
other
persons
personspersons
persons
having
havinghaving
having
certain
certaincertain
certain
interests
interestsinterests
interests
in
inin
in
the
thethe
the
company
companycompany
company
concerned.
concerned.concerned.
concerned.
8.1.
The
corporate
governance
framework
should
ensure that the rights and lawful interests of
stakeholders are protected.
Yes
The
Company
respects
the
rights
of
different
stakeholders
and their rights entrenched in the laws.
8.2.
The
corporate
governance
framework
should
create conditions for stakeholders to
participate in corporate governance in the
manner prescribed by law. Examples of
participation by stakeholders in corporate
governance include the participation of
employees or their representatives in the
adoption of decisions that are important for the
company, consultations with employees or
their representatives on corporate governance
and other important matters, participation of
employees in the company’s authorized
capital, involvement of creditors in corporate
governance in the cases of the company’s
insolvency,
etc.
Yes
The
Company
has
never
prohibited
or
restricted
the
right,
and always strives to create conditions for stakeholders to
participate in corporate governance in the manner
prescribed by law.
For example, a work council has been formed at the
Company which represents the interests of employees and
participates in corporate governance within its
competence.
8.3.
Where
stakeholders
participate
in
the
corporate governance process, they should
have access to relevant information.
Yes
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.
No
The
company
has
a
general
procedure
for
reporting
violations, see the answer to 5.4.5, as established by the Law
on Whistleblower Protection.
G O V E R N A N C E R E P O R T 3 . 2
APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius
FOR THE YEAR ENDED 31 DECEMBER 2021
(all tabular amounts are in EUR thousands unless otherwise stated)
81
PRINCIPLES/
PRINCIPLES/PRINCIPLES/
PRINCIPLES/
RECOMMENDATIONS
RECOMMENDATIONSRECOMMENDATIONS
RECOMMENDATIONS
YES
YESYES
YES
/
//
/
NO/
NO/NO/
NO/
NOT
NOTNOT
NOT
APPLICABLE
APPLICABLEAPPLICABLE
APPLICABLE
COMMENTARY
COMMENTARYCOMMENTARY
COMMENTARY
Principle
PrinciplePrinciple
Principle
9:
9:9:
9:
Disclosure
DisclosureDisclosure
Disclosure
of
ofof
of
information
informationinformation
information
The
TheThe
The
corporate
corporatecorporate
corporate
governance
governancegovernance
governance
framework
frameworkframework
framework
should
shouldshould
should
ensure
ensureensure
ensure
the
thethe
the
timely
timelytimely
timely
and
andand
and
accurate
accurateaccurate
accurate
disclosure
disclosuredisclosure
disclosure
of
ofof
of
all
allall
all
material
materialmaterial
material
corporate
corporatecorporate
corporate
issues,
issues,issues,
issues,
including
includingincluding
including
the
thethe
the
financial
financialfinancial
financial
situation,
situation,situation,
situation,
operations
operationsoperations
operations
and
andand
and
governance
governancegovernance
governance
of
ofof
of
the
thethe
the
company.
company.company.
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:
_
__
_
The
information
referred
to
below
in
this
recommendation
is disclosed in notifications of material events published
through the Nasdaq Vilnius Information Disclosure System,
the Company’s website, and the Company’s annual and
interim information documents, to the extent required by
legislation and the International Financial Reporting
Standards applicable in the European Union. The
information is also disclosed in presentations to investors by
the manager and senior management of the Company.
9.1.1.
operating
and
financial
results
of
the
company;
Yes
9.1.2.
objectives
and
non
-
financial
information
of
the
company;
Yes
9.1.3.
persons
holding
a
stake
in
the
company
or
controlling it directly and/or indirectly and/or
together with related persons as well as the
structure of the group of companies and their
relationships by specifying the final
beneficiary;
Yes
9.1.4.
members
of
the
company’s
supervisory
and
management bodies who are deemed
independent, the manager of the company,
the shares or votes held by them at the
company, participation in corporate
governance of other companies, their
competence and remuneration;
Yes
9.1.5.
reports
of
the
existing
committees
on
their
composition, number of meetings and
attendance of members during the last year as
well as the main directions and results of their
activities;
Yes/No
See
the
answer
given
in
5.1.5.
9.1.6.
potential
key
risk
factors,
the
company’s
risk
management and supervision policy;
Yes
9.1.7.
the
company’s
transactions
with
related
parties;
Yes
9.1.8.
main
issues
related
to
employees
and
other
stakeholders (for instance, human resource
policy, participation of employees in corporate
governance, award of the company’s shares or
share options as incentives, relationships with
creditors, suppliers, local community, etc.);
Yes/No
Most
of
this
information
is
disclosed
in
the
Company’s
corporate social responsibility report (Annex 2).
9.1.9.
structure
and
strategy
of
corporate
governance;
Yes/No
The
Company’s
governance
structure
and
management
principles are published on the Company’s website and in
its financial statements. One-year operational plans are
publicly
disclosed.
9.1.10.
initiatives
and
measures
of
social
responsibility
policy and anti-corruption fight, significant
current or planned investment projects.
This list is deemed minimum and companies are
encouraged not to restrict themselves to the
disclosure of information included into this list. This
principle of the Code does not exempt companies
from their obligation to disclose information as
provided
for
in
the
applicable
legal
acts.
Yes
G O V E R N A N C E R E P O R T 3 . 2
APB APRANGA, Company’s code 121933274, Ukmerges 362, Vilnius
FOR THE YEAR ENDED 31 DECEMBER 2021
(all tabular amounts are in EUR thousands unless otherwise stated)
82
PRINCIPLES/
PRINCIPLES/PRINCIPLES/
PRINCIPLES/
RECOMMENDATIONS
RECOMMENDATIONSRECOMMENDATIONS
RECOMMENDATIONS
YES
YESYES
YES
/
//
/
NO/
NO/NO/
NO/
NOT
NOTNOT
NOT
APPLICABLE
APPLICABLEAPPLICABLE
APPLICABLE
COMMENTARY
COMMENTARYCOMMENTARY
COMMENTARY
9.2.
When
disclosing
the
information
specified
in
paragraph 9.1.1 of recommendation 9.1, it is
recommended that the company which is a
parent company in respect of other
companies should disclose information
about the consolidated results of the whole
group of companies.
Yes
Information
is
disclosed
about
the
Company
and
the
consolidated results of its daughter companies.
9.3.
When
disclosing
the
information
specified
in
paragraph 9.1.4 of recommendation 9.1, it is
recommended that the information on the
professional experience and qualifications of
members of the company’s supervisory and
management bodies and the manager of the
company as well as potential conflicts of
interest which could affect their decisions
should be provided. It is further
recommended that the remuneration or
other income of members of the company’s
supervisory and management bodies and the
manager of the company should be
disclosed, as provided for in greater detail in
Principle 7.
Yes
All
information
is
on
the
Company’s
website;
also
see
the
answers to 3.2.2 and 7.1.
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
All
information
i
s
disclosed
as
provided
for
in
9.1
and
related
answers; no shareholders or investors are discriminated in terms
of the method of receipt and scope of information. Information
is disclosed to all parties concerned at the same time.
Information is disclosed in accordance with the applicable
legislation of the Republic of Lithuania. The Company makes
information publicly available through the Nasdaq Vilnius
Information Disclosure System, thus ensuring simultaneous
disclosure to investors. Information is also immediately placed in
the Central Storage Facility.
Notifications of material events are disclosed in Lithuanian and
English, before or after the Nasdaq Vilnius Stock Exchange
trading session.
The Company also publishes the information published through
the Nasdaq Vilnius Information Disclosure System and placed in
the Central Storage Facility on the Company’s designated
investor website http://apranga.lt/lt/investuotojams, where the
information
is
presente
d
in
Lithuanian
and
English.
Principle
PrinciplePrinciple
Principle
10:
10:10:
10:
Selection
SelectionSelection
Selection
of
ofof
of
the
thethe
the
company’s
company’scompany’s
company’s
audit
auditaudit
audit
firm
firmfirm
firm
The
TheThe
The
company’s
company’scompany’s
company’s
audit
auditaudit
audit
firm
firmfirm
firm
selection
selectionselection
selection
mechanism
mechanismmechanism
mechanism
should
shouldshould
should
ensure
ensureensure
ensure
the
thethe
the
independence
independenceindependence
independence
of
ofof
of
the
thethe
the
report
reportreport
report
and
andand
and
opinion
opinionopinion
opinion
of
ofof
of
the
thethe
the
audit
auditaudit
audit
firm.
firm.firm.
firm.
10.1.
With
a
view
to
obtain
an
objective
opinion
on
the company’s financial condition and
financial results, the company’s annual
financial statements and the financial
information provided in its annual report
should be audited by an independent audit
firm.
Yes
An
independent
audit
firm
audits
the
complete
set
of
consolidated financial statements for the Company and its
group of companies in accordance with the International
Financial Reporting Standards applicable in the European
Union. The audit firm also performs an audit of the annual
report.
10.2.
It
is
re
commended
that
the
audit
firm
would
be proposed to the general meeting of
shareholders by the supervisory board or, if
the supervisory board is not formed at the
company, by the management board of the
company.
Yes
The
audit
firm
is
proposed
to
the
general
meeting
of
shareholders by the Company’s management board.
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.
Not
applicable
The
Company’s
audit
firm
did
not
provide
non
-
audit
services to the Company during the reporting year and did
not receive remuneration from the Company for this.
S O C I A L R E S P O N S I B I L I T Y 2 0 2 1
T A B L E O F C O N T E N T S
A B O U T T H E A P R A N G A G R O U P
1.2 Foreword by the ceo
1.3 Key figures
1.4 Business model
1.5 Structure of group companies in 2021
1.6 Key principles of corporate social
responsibility
1.7 Risks and risk management
1.8 Significance of sustainability criteria
P R O T E C T I O N O F P E R S O N A L
D A T A A N D P R I V A C Y
A N T I - C O R R U P T I O N A C T I V I T I E S
C O M P A N Y E M P L O Y E E S
2.1 Employee turnover
2.2 Competence development
2.3 Occupational safety
8.1 GHG emission
I M P A C T O F C O V I D - 1 9
E N V I R O N M E N T A L
P R O T E C T I O N
3.1 Trade restriction periods in 2021
8.3 Plastic
8.2 Natural resources
8.4 Car fleet
I N F O R M A T I O N O N T H E
C O M M E N T S T O T H E R E P O R T
V A L U E A D D E D F O R
S H A R E H O L D E R S
V A L U E A D D E D F O R
S O C I E T Y
1.
ABOUT
THE APRANGA
GROUP
A B O U T T H E A P R A N G A G R O U P 1 . 1
H O N E S T Y
R E S P O N S I B I L I T Y
T R A N S P A R E N C Y
The Apranga Group is the leading clothing retailer in the Baltic countries, striving to implement the
principles of leadership in its direct operations and in its relations with all stakeholders. In doing so, we
are committed to achieving and building a future in which our core values become the undisputed
standards of business ethics................................................................................................................................................................................
Our promise is our attention to detail, the totality of which makes it possible to build a secure and
sustainable future for all of us. Our commitment is to never underestimate even the smallest decisions
we can make to contribute to a more sustainable future. We know that only by working together with
the common goal of saving the planet we will find the means to achieve it. We therefore invite
everyone to join us in the goals set out in this report and in efforts to achieve them. There can be no
such thing as minor work or insignificant actions – what we do today is how we will live in the future.......
We work assiduously to ensure that
The basis on which we conduct our daily business – are embraced not only by each and every one of
our employees, but also by all members of the community. Our goal is to ensure sustainable growth by
maintaining high quality goods, full employee rights and a friendly working environment, as well as
respect for the environment, people and the planet.
F O R E W O R D B Y T H E C E O 1 . 2
Director General of the Apranga Group
Rimantas Perveneckas
Our corporate social responsibility and sustainability policy is an unfinished jigsaw puzzle where every
detail matters. It is a long and consistent work that requires thoroughness and perseverance, but like all
puzzles, it has a clear end result. The Apranga Group and all its employees understand that only by
working together we can hope to complete this puzzle, leading to zero emissions of environmentally
harmful gases, even better working conditions for all employees and third parties, and a reduction in
waste, among other goals.....................................................................................................................................................................................
In the year that we have completed, we have sometimes had to work as if blindfolded. Two years ago,
faced with a pandemic, we were scared, angry and unsure of what to expect. But at the same time we
learned, we helped each other, until finally we understood how we could hope to find solutions by
working together, cooperating with our partners and communicating with our customers...............................
I am pleased that, despite the uncertainty that still prevails, we can always rely on our employees. Trust
is an extraordinary gift built on mutual respect and this process lasts many years. I particularly
appreciate that our mutual trust has stood the test of recent years. ......................................................................................
Not only have we stood the test, but so have our commitments. It can be much more difficult to adhere
to our principles in difficult times than in times of prosperity, but it is the difficult situations that show
how seriously we take our commitments. That's why we will continue to invest in our work culture and
in the education and development of our employees to ensure the implementation of our long-term
commitments.................................................................................................................................................................................................................
I want to believe that the Apranga Group is looking to the future with even more determination and
ambition than last year. Our customers, our employees and members of society are changing the
world, and it is our job to make sure that we get the puzzle right.
K E Y F I G U R E S 1 . 3
2 0 2 1
1 6 9 S T O R E S
2 0 0 B R A N D S
3 C O U N T R I E S
2 0 2 0
1 9 9 2 E M P L O Y E E S
G R O U P T U R N O V E R
E U R 2 2 8 M I L L I O N
1 7 9 S T O R E S
2 0 0 B R A N D S
3 C O U N T R I E S
1 9 5 6 E M P L O Y E E S
G R O U P T U R N O V E R
E U R 2 0 4 M I L L I O N
B U S I N E S S M O D E L 1 . 4
2 3
C O M P A N I E S
2
C O M P A N I E S
The business model of the Apranga Group (hereinafter referred to as the 'Group') remained unchanged
last year. The number of companies remained the same – the whole Group consists of the parent
company Apranga APB, established and operating in Lithuania, and 25 subsidiaries established in
Lithuania, Latvia and Estonia. No new companies were established last year. The Group does not have
associated companies in the management of which it would take part. The principal business of all
companies in the Group is the retail sale of clothing. The parent company Apranga APB has been listed
on the Nasdaq Vilnius Stock Exchange since 1997. It has been included in the Baltic Main List since
2005..........................................................................................................................................................
Apranga APB is a member of the Association of Lithuanian Trade Enterprises (LPĮA). No new
associations or organisations were joined last year.
(Zara, Bershka, Pull&Bear, Stradivarius, Massimo Dutti and Zara Home operators in each of the three
Baltic countries and Oysho in Lithuania and Latvia) that represent a specific brand and operate under a
franchise contract concluded with one of the world's largest clothing suppliers, the Inditex Group
(hereinafter referred to as franchise companies) and e-commerce companies in the three Baltic
countries;.
(Apranga SIA, Apranga OÜ) that do not operate under franchise contracts or only have a relatively small
number of franchise contracts (hereinafter – non-franchise companies).
For franchise companies, goods are supplied by the Inditex Group. Apranga SIA and Apranga OÜ (non-
franchise companies) operating on the Latvian and Estonian markets are supplied by Apranga APB
(with rare exceptions when goods of Apranga SIA and Apranga OÜ are delivered directly from
suppliers)...................................................................................................................................................................................
Non-franchise companies sell goods on the Latvian and Estonian markets, while in Lithuania the goods
are sold by Apranga APB itself. Over the past year, the business model of the subsidiaries remained
unchanged........................................................................................................................................................................................
The Group's sales revenue consists of revenue from the retail chain of stores (169 stores in Lithuania,
Latvia and Estonia) and revenue from online trading. As in previous years, more than 95 per cent of
sales revenue consists of sales in specialised clothing stores (including online trading). The remaining
sales revenue comes from the sales of footwear and household goods in the relevant specialised stores.
A rapid growth in the Group's share of revenue from online trading was further observed in the year
2021. The Group's successful multi-channel commerce strategy has promoted the integration of
physical and online stores, thus contributing to the sales growth. The Group's online sales in 2021 were
21,1 per cent, which is 1,9 times higher than in 2020. This was also influenced by the COVID-19 pandemic
and lockdown restrictions related to the closure of physical stores or the restriction of customer flows in
all markets in which the Group operates (see more in chapter “Impact of COVID-19”).............................................
Key business functions and control is concentrated in the parent company Apranga APB. Subsidiaries
perform only a small part of the functions and employ a minimum number of administrative staff.
Meanwhile, Apranga APB employs an absolute majority of the Group's administrative staff and all of
the employees working in logistics and warehousing
S T R U C T U R E O F G R O U P C O M P A N I E S I N 2 0 2 1 1 . 5
A P R A N G A A P B
L A T V I AL I T H U A N I A E S T O N I A
Apranga LT UAB
Apranga BPB LT UAB
Apranga PLT UAB
Apranga SLT UAB
Apranga MLT UAB
Apranga HLT UAB
Apranga OLT UAB
Apranga Ecom LT UAB
Apranga SIA
Apranga LV SIA
Apranga BPB LV SIA
Apranga PLV SIA
Apranga SLV SIA
Apranga MLV SIA
Apranga HLV SIA
Apranga OLV SIA
Apranga Ecom LV SIA
Apranga OÜ
Apranga Estonia OÜ
Apranga BEE OÜ
Apranga PB Trade OÜ
Apranga ST Retail OÜ
Apranga MDE OÜ
Apranga HEST OÜ
Apranga Ecom EE OÜ
K E Y P R I N C I P L E S O F C O R P O R A T E S O C I A L R E S P O N S I B I L I T Y 1 . 6
R E S U LT S
I M P A C T
I M P L E M E N T A T I O N
D E C I S I O N S
We never compromise on decisions that will have an impact on the well-being
of our employees, the welfare of society and the environment.
Our choice of partners reflects our commitment to sustainable development. We are
market leaders and we seek to use our advantages to promote change towards a better future.
We strive to set up and create the best work and service conditions in our stores.
With our employees and customers in mind, we choose the most optimal and highest
European standards of innovation and technology.
We are open – we want to learn from best practices and share our knowledge.
We review and declare our key commitments to corporate social responsibility and sustainability
annually. Until now, we have identified them and used them to guide our activities, but we have not
adopted them in a separate document. In 2022, we plan to develop and adopt a Corporate Social
Responsibility Strategy which will define our medium- and long-term goals and the means to achieve
them. While this will not change our commitments in any way, we aim to make a clear and open
declaration of our ambitions and our relationship with the environment and society.
We advocate consistent and persistent work and the constancy of the commitments we have made,
and we hope that this will lead to a relationship of trust with all stakeholders.
Despite the fact that this report is not yet based on a specific approved document with defined goals, it
is drawn up each year in good faith and openness..............................................................................................................................
We are pleased and appreciate that the Group's business model has enabled it to ensure sustainability
and stability of its operations even in very difficult circumstances caused by the pandemic and other
challenges. In this context, the key principles of corporate social responsibility remained unchanged last
year.
In line with these principles, the Group's 2021 report includes a new chapter “Significance of
sustainability criteria” which clearly and openly defines the Group's sustainability priorities and its
relationships with stakeholders. This is a further step towards open communication to ensure that there
is no doubt about how we make business decisions and build relationships with partners, customers
and third parties.
1 . 7
R I S K S A N D R I S K M A N A G E M E N T
Risk management is becoming increasingly important in times of uncertainty. The pandemic, which
has been continuing since 2020, has created new circumstances and business conditions that change
due to factors which are basically beyond our control. Responsible planning and risk assessment allows
us to mitigate the impact of these factors, but requires increasing efforts to prepare adequately for
possible scenarios. Risk management is not only a tool to protect against adverse factors, but also our
commitment to act in a way that minimises negative impacts on the environment and societies
inwhich we operate.....................................................................................................................................................................................................
The epidemiological situation and related restrictions on trade activities, which have a direct impact on
our business model, continued to be the most influential factor last year. Although this factor has had
varying degrees of influence in different periods, for most of the year it has been an important factor in
defining the future situation of the retail market. In addition to all the risk factors (legal regulation,
business, investment, market, supplier chain, competition, economic cycles, macroeconomic factors,
etc.) that we identify, from this year onwards we have identified the impact of climate change as a
separate factor that may affect our business model. The “risks related to partners and activities” which
we have previously outlined separately are now presented by integrating their essential aspects into
other risk factor groups (economic, climate change impact, employee related risks)................................................
We determine the importance of the risk factors using a matrix of significance of sustainability criteria
adapted to our business model.
The impact of the pandemic of the previous period is discussed in greater detail in chapter “Impact of
Covid-19”, but it remains evident that we must continue to take the importance of this factor seriously
as we look to the future, irrespective of how the situation changes in the short term. The Group has
complied with the requirements and recommendations set by the authorities in all the markets in
which it has operated and has actively promoted the vaccination strategy among its employees. .................
The Group's management has repeatedly advocated, in public and internal communications, safe
working conditions for both employees and customers and has actively implemented mandatory and
recommended safety requirements. The Group's epidemiological risk assessment includes planning for
both best and worst case pandemic scenarios and has measures in place to respond to the changing
circumstances. It is actively investing in occupational safety and health and in promoting a healthy
lifestyle in society to ensure that public health is as resilient to any risks as possible.
Although the non-food retail sector has been and continues to be one of the most exposed to various
constraints due to the epidemiological situation, a sufficiently effective vaccination strategy in certain
age groups gives reason to expect that the economic impact of the pandemic will diminish over time.
However, other factors, including the high cost of raw materials, rising energy costs and supply chain
disruptions, pose additional risks. In the context of the European Union and the Baltic countries, the
inflation rate is becoming increasingly important and its increase may affect the purchasing power of
customers and the Group's results. Economic risks also include geopolitical tensions on the Eastern
European border, which affect consumer mood and may influence consumer behaviour. Supply chain
risks that may be related to changes in the internal policies of third countries are also assessed.
Although no related problems have been experienced so far, looking ahead, potential problems are
being identified and algorithms for solving them are foreseen. In order to protect itself against any risks
related to partners, the Group plans to introduce and adopt a supplier questionnaire to ensure
protection in the key areas of Human Rights, Climate Change and Good Governance.
1 . 7
search for and recruitment of employees;
smooth integration into work processes;
staff retention, reducing turnover thereof;
increasing employee satisfaction;
staff retention under lockdown (short-term).
R I S K S A N D R I S K M A N A G E M E N T
Climate change is a persistent and increasingly significant risk in the Group's operations. The textile
manufacturing industry has an impact on the environment and is exposed to environmental changes;
therefore, we aim to establish the impact of climate change as one of our priority risk areas. The Group's
business model does not involve manufacturing processes but is dependent on textile production by
third parties. The Group aims to implement the principles of sustainable operations while at the same
time ensuring the responsibility of its partners to reduce their impact on climate change. We
understand our responsibilities and potential risks not only in our direct operations, but also
throughout the value chain. The Group is working to ensure that goods entering the market are
sustainably collected at the end of their life cycle, thus contributing to waste reduction. Increasing
regulation in the textile manufacturing sector may affect the Group's business model. However, this is
not seen as a risk, but rather as an opportunity to invest time and effort to prepare in advance and
anticipate changes in the business model in order to adapt.
Despite increasing competition, especially in the e-commerce segment, the Group confidently
maintains its position as the leading clothing retailer in the Baltic countries. The Group's strategy is
based on a multi-channel commerce strategy and it is actively investing in both its online presence and
the renewal and efficiency of its physical store network. We continuously monitor the market situation
and strive to ensure fair competition for all parties. In terms of the sector in general, we see our
competitors as partners with whom we can achieve more by working together on legal regulation,
social or environmental issues than we can by working alone. We are open to cooperation and
constructive dialogue and strive for a relationship based on mutual respect.
The Group experienced aggravated conditions of competition last year, with severe restrictions or
closures in certain markets during certain periods. These circumstances led to a change in situation of
the labour market, where severely restricted sectors found it difficult to compete for employees. This
has created short-term challenges and required additional resources to address the problem. At the
same time, it has enabled decisions to be taken to optimise the search for employees, to organise the
recruitment process and to conduct the onboarding of new employees. Long-term risks have changed
very slightly and are still mainly related to the search for employees, employee turnover and
satisfaction. Economic factors (restrictions on activities, necessary isolation due to illness, inflation,
minimum wage increases) have increased the risks related to employees in the private sector, but the
rapid response and optimisation of the entire recruitment process have enabled us to avoid any
potential disruption to the business model...............................................................................................................................................
The following main employee related long-term risks have remained:
1 . 7R I S K S A N D R I S K M A N A G E M E N T
Strengthening the relationship with our employees and building a culture of employment
relationships remains our main challenge. We not only treat our employees as equal partners, but also
strive to provide them with the conditions and opportunities to develop within the company. We
ensure internal communication that allows us to inform employees promptly and clearly about the
situation in the company and planned changes...................................................................................................................................
As part of our annual risk assessment, we review and analyse different variables. Some of them do not
change from year to year, while others become more relevant depending on the circumstances. In all
cases, we assess all circumstances that may affect the Group's business model, any stakeholder or the
societies in which we operate. We take the approach that it is better to identify more risk factors that do
not materialise or that become irrelevant after a short period of time than to be forced to respond to
circumstances that have been considered unlikely.
S I G N I F I C A N C E O F S U S T A I N A B I L I T Y C R I T E R I A 1 . 8
Reducing GHG emissions
Sustainable use of energy
resources
Animal welfare
Sustainable handling of
packaging
Innovation and technology
Reducing the use of fossil fuels
Staff development and
training
Involvement in communities
and society
Company values and culture
Achieving gender equality
Paying fair wages
Well-being of employees
Standards of business
ethics
Data protection and
privacy
Assurance of quality of goods
Relationships with business
partners
Fair payment of taxes
Anti-corruption policy
and prevention
S O C I A LE N V I R O N M E N T A L G O V E R N A N C E
Protection of consumer
rights
Stakeholders' concern
Impact and influence on the implementation of sustainability policy
M A T R I X O F S I G N I F I C A N C E O F S U S T A I N A B I L I T Y C R I T E R I A
Paying fair wages
Relationships with
business partners
Reducing GHG
emissions
Sustainable use of energy
resources
Sustainable handling of
packaging
Staff development and
training
Well-being of employees
Reducing the use of fossil
fuels
Assurance of quality
of goods
Data protection and
privacy
Company values and
culture
Fair payment of
taxes
Animal welfare
Protection of consumer
rights
Achieving gender equality
Standards of business ethics
Anti-corruption policy
and prevention
Innovation and
technology
V e r y i m p o r t a n tI m p o r t a n t
M o d e r a t e l y
i m p o r t a n t
V e r y i m p o r t a n t
Involvement in communities
and society
I m p o r t a n tM o d e r a t e l y i m p o r t a n t
Fig. 1.
Matrix of significance of sustainability criteria
For the first time, we present the Group's matrix of significance of sustainability criteria. The aim is to
clearly and openly identify the critical environmental, social and governance criteria that guide us in
the areas of corporate social responsibility and sustainability. The significance of all criteria is based on
the United Nations Sustainable Development Goals, highlighting the areas where the Group can have
the greatest impact. The criteria themselves were selected through discussions with the Group's
management and the analysis of best practices in domestic and foreign markets. The significance
matrix was designed to take into account all stakeholders, assessing society's views and opinions on
the most relevant areas.
2.
COMPANY
EMPLOYEES
C O M P A N Y E M P L O Y E E S 2
The Apranga Group perceives its relationship with employees not only through its relations with the
current staff. Our former employees are our ambassadors, influencing those who are still planning their
career path. We recognise that only by being honest and open with all our employees we can build a
relationship with society in which we respect and value each other. The Apranga Group does not
tolerate any violations of human rights, is in favour of fully equal rights and promotes integration of the
most vulnerable groups in society. We continuously review and improve our remuneration policy and
strive to create a remuneration system that is transparent and fair regardless of nationality, gender,
race, religion or other beliefs................................................................................................................................................................................
We comply with all local laws and respect and follow international agreements. We are unbiased in
terms of providing job opportunities for people of any age, education and experience. .........................................
The number of Group's employees did not change significantly in the past year and has remained
relatively stable in all markets. During the year, the number of Group's employees grew by 1.8 per cent
to 1 992 as at 31 December 2021. Under very strict lockdown conditions, the Group has made every effort
to retain all employees and their jobs. No decisions have been taken on refusing certain job positions
due to the impact of the pandemic. This was also influenced by the state aid in directly compensating
companies and employees for the loss of revenue during downtime. The Group during downtime
decided to compensate additional part employee's revenue that was not covered by the state. It is
worth noting that, despite the effects of the pandemic, some of the Group's staff indicators have
returned to or approached their long-term averages, indicating that the Group has been operating as
normal for most of the year or has been able to successfully absorb the impact of the pandemic on its
employees...........................................................................................................................................................................................
When comparing the 2021 indicators, we include data from 2019 as well as the previous period (2020),
as this allows us to reveal the impact of COVID-19 in 2020 and to compare how the indicators look
alongside the pre-pandemic year. This is important for tracking the Group's resilience to the pandemic
that is still ongoing and for forecasting how quickly epidemiological risks can be expected to be
reduced to minimum. One of the key indicators monitored and analysed in the Group is employee
turnover. While in 2020 the pandemic led to a much lower turnover of employees, last year this
indicator returned to the long-term average, but was lower than usual. .............................................................................
This indicator was negatively impacted by the Group's strict operating restrictions, which prevented it
from competing under equal conditions with other employers who could offer alternative
employment. Although the Group made every effort to retain both job positions and employees, in
some cases different competition conditions resulted in the pandemic increasing employee turnover.
The Group continues to invest consistently in the improvement of its employee turnover rate
performance. In the exit surveys, the needs of one of the largest groups of employees (students) related
to the type of vocational education acquired or to finding work according to their profession (after
eliminating the epidemiological reasons) continued to be the main reason for leaving. In order to
improve employee satisfaction and engagement, the Group has decided to provide all employees in
the local market with employer-paid supplementary health insurance from 2022. The decision was
taken to provide this cover to all employees working for more than three months, totalling 1 140
employees. Those who have worked for more than five years are granted a higher amount of cover as a
reward for their loyalty to the company. We hope that this cover will not only allow employees to take
care of their health or wellness according to their own needs, but will also have a positive impact on the
employee turnover rate. In Latvia supplementary health insurance, required by law, is provided for
administration employees. Estonian administration employees have their sport and fitness expenses
compensated.
2
A D M I N I S T R A T I O N
L O G I S T I C S
S A L E S
Fig. 2.
Distribution of
employees by
division in
2021
C O M P A N Y E M P L O Y E E S
D I V I S I O N
A D M I N I S T R A T I O N
L O G I S T I C S
S A L E S
T O T A L
N U M B E R O F
E M P L OY E E S
I N 2 0 2 1
1 7 9
6 1
1 7 5 2
1 9 9 2
1 7 8
6 0
1 7 1 8
1 9 5 6
1 8 7
6 2
2 1 1 8
2 3 6 7
+ 2
+ 1
+ 3 3
+ 3 6
N U M B E R O F
E M P L OY E E S
I N 2 0 2 0
N U M B E R O F
E M P L OY E E S
I N 2 0 1 9
C H A N G E I N
2 0 2 1 / 2 0 2 0
Looking at the total number of employees in Lithuania, Latvia and Estonia at the end of the period, it is
important to note that the number of employees has increased, while the number of outlets operated
by the Group and the total sales area have decreased. This is due to the fact that the Group has opened
more larger stores which require more staff compared to the smaller stores closed. The Group's sales
area as at 31 December 2021 amounted to 90.6 thousand square metres, which is a decrease of 2.1 per
cent compared to the end of the previous year. In all cases where the issue of store closures or
refurbishments has affected the number of workplaces, the aim has been to offer current employees
an alternative position in another store.
The distribution of the Group's employees by division has remained basically unchanged, with almost
the same number of employees in the administrative and logistics functions as in 2020. The number of
employees in the sales division increased by 33, or around 1.9 per cent. However, given the decrease in
the sales area (-2.1 per cent), it is important to note that in terms of the efficiency of management of the
retail chain, the number of employees per 100 square metres of sales area in 2021 was approximately 1.9,
which is the same as in 2020. Taking this into account, the efficiency of management of the retail chain
has remained the same.
2
M E N
W O M E N
Fig. 3.
Distribution of
employees by
gender in 2021
C O M P A N Y E M P L O Y E E S
The distribution of employees by gender remained unchanged last year, with women accounting for
the majority of employees (94 per cent), as in the previous period. This ratio, with fluctuations of 1–2 per
cent, remains stable and corresponds to the average for several years. It is worth noting that a similar
gender ratio is also observed among store managers, which in principle reflects the proportionate
career opportunities for all employees. Whereas in 2020, out of 179 store managers, 16 were men and
162 were women (one store had no permanent manager during the reporting period), last year's figures
show that 151 stores were managed by women and 18 by men. This represents a 90:10 per cent ratio and
is broadly in line with the overall ratio for all employees. The distribution by gender in the directorate of
Administration (directors of the main divisions and the CEO) has remained stable and is close to
balance with four women and three men.
The average age of the employees in the Group has increased to 27 years and 3 months, which is an
increase of 2 months compared to 2020. The average age of the employees remains slightly above the
average of several years for the second consecutive year and the main reason for this continues to be
the lower number of studying employees due to the epidemiological situation. With limited
opportunities for contact studies, the number of young people studying in the big cities where most of
the Group's stores are located has fallen, resulting in fewer young people looking for a job. Some of
them have returned or temporarily moved to other cities or have been studying remotely, which also
has an impact on the labour market in general.....................................................................................................................................
Traditionally, the majority of the Group's employees (88 per cent) are sales consultants, visual specialists
and sales experts working in the Apranga Group stores.
Last year, the Group continued its free flu vaccination programme and actively communicated the
national vaccination campaign against COVID-19, encouraging people to get vaccinated and protect
themselves and their families. In total, around 50 employees benefited from the flu vaccination
programme, which is significantly lower than in 2020, but this year's number could be due to
overlapping periods of flu and COVID-19 vaccination or revaccination. The eyesight test programme has
been discontinued following the decision on supplementary health insurance to all employees. The
COVID-19 immunisation rate in the Group's companies in all countries reached a high rate of over 90
per cent in a relatively short period of time, with individual companies reaching 95 or 100 per cent at
the end of the year......................................................................................................................................................................................................
Occupational risk assessments were carried out periodically and stress coping and wellness seminars
were organised to ensure the well-being of employees and favourable working conditions. Last year, in
accordance with the Methodological Recommendations on the Prevention of Psychological Abuse in
the Working Environment and the Improvement of Psychosocial Working Conditions by the State
Labour Inspectorate, a contact person was appointed for employees of the Group's companies who
have faced intimidation or (psychological) abuse in the working environment. The Apranga Group does
not tolerate any inappropriate behaviour in the working environment and is ready to take measures to
create a safe working environment in all cases.
2
The number of Group employees as at 31 December 2021 by education:
Fig. 4.
Number of
employees by
education in 2021
H I G H E R
V O C A T I O N A L
S E C O N D A R Y
S T U D E N T
E D U C AT I O N C H A N G E
I N 2 0 2 1 / 2 0 2 0
H I G H E R
V O C A T I O N A L
S E C O N D A R Y
S T U D E N T
T O T A L
2021 2019
4 9 7
1 9 8
4 1 0
8 8 7
1 9 9 2
4 6 2
3 1 4
6 7 3
9 1 8
2 3 6 7
+ 1 6 . 4 %
- 2 7 %
- 6 . 8 %
+ 8 . 4 %
+ 1 . 8 %
2020
4 2 7
2 7 1
4 4 0
8 1 8
1 9 5 6
C O M P A N Y E M P L O Y E E S
Employees' well-being, enforcement of their rights and fair treatment of all continue to be our top
priority in HR management. By investing in our employees, we hope that better working conditions will
enable them to enjoy a better quality of life and thus contribute to better moods in society. We want
colleagues with more experience to share it with new employees and facilitate their integration in the
team. We organise training and awareness campaigns, and ensure their safety both in the workplace
and in general. We hope that the decision to provide supplementary health insurance for all will also
contribute to raising awareness and enabling employees to take good care of their health................................
“We are different but united” is what we proclaim loudly on our social media accounts and it is
absolutely true. We all have different needs, concerns or life goals, and it's our job to contribute as
much as possible to make each employee's individual situation as good as possible. Under the right
conditions, we can always offer employees the possibility to choose their working hours or workload. If
the employee requests and the Group has the possibility (vacancies) to grant the request, we always
consider their needs to change positions..................................................................................................................................................
Whenever possible, and in line with requests, we always try to offer our sales staff a working schedule
that allows them to use their time most efficiently. Work schedules are coordinated to make it possible,
if needed: to work more on weekdays or vice versa – choose to work more in the evenings or at
weekends. We always strive to ensure that all employees have equal opportunities to coordinate work
schedules that meet their personal or family needs and are compatible with full-time studies or
vocational training.
Administrative staff continued to profit from the opportunity, in agreement with their line manager, to
individually select the start and end working times, accordingly. Depending on the epidemiological
situation last year, the administration worked in the usual, combined or remote mode. Both combined
and remote work helped to ensure the safety of employees, reduce the number of contacts and
contribute to the management of the epidemiological situation in the country. The Group continued to
invest in the equipment necessary for remote work.
E M P L O Y E E T U R N O V E R 2 . 1
C O U N T R Y C H A N G E I N
2 0 2 1 / 2 0 2 0 , %
L I T H U A N I A
L A T V I A
E S T O N I A
G R O U P :
E M P L OY E E
T U R N O V E R I N 2 0 2 1
8 8 %
9 6 %
1 1 2 %
9 3 %
8 5 %
1 0 9 %
1 7 5 %
1 0 5 %
+ 3 5 %
+ 5 7 %
+ 8 3 %
+ 4 7 %
6 5 %
6 1 %
6 1 %
6 3 %
E M P L OY E E
T U R N O V E R I N 2 0 2 0
E M P L OY E E
T U R N O V E R I N 2 0 1 9
We continue to grow our employees in managerial positions. According to statistics that have been
maintained for several years in a row, as many as 95 per cent of store managers started their careers as
sales consultants or in a similar position. This is particularly pleasing because our training and
motivation programmes enable us to identify talent. In many cases, store managers or other
employees develop their careers in company administration. The Group's policy is to offer vacancies in
both administration and store management positions within the Group first and to look externally only
if no suitable candidate is found.......................................................................................................................................................................
The Group encourages long-term horizontal and vertical employee career ambitions and works to
develop talent. Due to the specific nature of our activities, we often become the first employer for
young people who are just beginning their professional career, so we treat the training process with
great responsibility.......................................................................................................................................................................................................
Last year's employee turnover rate can be interpreted ambiguously. In 2021, the employee turnover rate
was 93 per cent in all countries and in all divisions. On the one hand, it has increased significantly
(+30 percentage points compared to 2020), but on the other hand, it is significantly lower than in 2019
(105 per cent) or in comparison to the previous periods. The lowest turnover rate was in Lithuania,
where it was 88 per cent, whereas in Latvia it was 96 per cent, and in Estonia it was 112 per cent. The
differences that emerged between the countries were mainly influenced by the different management
of the pandemic and the economic situation of the countries.
Last year's employee turnover rates started to converge towards long-term trends and increased in all
countries, but not to the same level as in 2019. The Group has been consistently working to reduce the
impact of this rate on the Group's operations in all countries and has been making efforts to keep it as
low as possible.
Last year, the trend was that employee turnover in stores was higher than in administration or logistics.
As to the store sector alone, the indicator accounted for 100 per cent last year. The turnover rate of
administrative employees also increased and amounted to 33 per cent, whereas in logistics being as
high as 64 per cent......................................................................................................................................................................................................
The main factors affecting the employee turnover rate were external and related to the situation on the
labour market, mainly due to the epidemiological circumstances and lockdown restrictions. Some of
the employees chose to continue their career in other businesses when the Group's activities were
restricted and the company could not provide the full workload agreed in the employment contract........
The expansion of the sales network in the previous year did not have a significant impact on the
number or turnover of employees. It should be noted that the turnover indicator also includes
employees who have changed positions at a vertical or horizontal level in the previous year, that is, have
chosen a different position or a different store, or climbed the career ladder...................................................................
In every case when the employee chose not to continue their career in the Group, we asked to provide
feedback and evaluate their experience in the Apranga Group. Based on the responses we received, we
made decisions to improve working conditions for current employees. It should be noted that the most
common reason for changing jobs remained “the need to change work to be in line with the education
or profession acquired”.
2 . 1
Fig. 5.
Employ
ee turno
v
er b
y division in 2021
A
D M
I N I
S
T
R A
T I O N
1 7 %
3 3 %
L O
G
I
S
T I
C
S
1 7 %
6 4 %
R
E T
A I L
7 0 %
1 0 0 %
2 0 2 0
2 0 2 1
E M P L O Y E E T U R N O V E R
Fig. 6. Employee training in 2021
C O M P E T E N C E D E V E L O P M E N T 2 . 2
9 4
T R A I N I N G C O U R S E S
4 . 8 / 5
A V E R A G E R A T I N G
2 0
T O P I C S
A year ago, we were still trying to get used to the intricacies of remote training and assessing its
advantages and disadvantages. In 2021, remote training was fully integrated into our training and
competence development system. Almost all training programmes have been adapted to be delivered
remotely to ensure the safety of mentors and staff. This not only allowed for efficient training planning,
but also for greater employee engagement..............................................................................................................................................
The total volume of training for all employees was still lower than in pre-pandemic conditions, but the
mere fact that we can already compare the figures in this area with 2019 is considered a significant
achievement. Lower demand for training was also due to lower employee turnover than the previous
year's average. This resulted in fewer new employees whose induction is the most intensive in terms of
training hours..................................................................................................................................................................................................................
We continue to pursue a policy of lifelong learning and aim to enable employees to upgrade and
develop their competences regardless of their work record. We aim to provide all employees who feel
the need or wish to participate in free training with favourable conditions.......................................................................
A total of 94 different training courses were organised for employees in the sales, logistics and
administrative divisions in 2021. This is an increase of 33 sessions, compared to 2020. As in the previous
year, more integrated training courses covering several different topics were organised. The largest
number of training courses were targeted at the sales staff.
They covered 20 different topics, and the average rating of training in the participant survey was 4.8 out
of possible 5 points. This is not the first year in a row that we have recorded this figure, and we are
pleased to see that the activities are well received by our employees...................................................................................
In general, we see continuous development not only as a means for employees to realise their own
potential, but also as a way to maintain an ongoing relationship, get their feedback and ensure a more
comfortable working environment. In terms of employee engagement in surveys, training
opportunities continue to be one of the most motivating employer benefits for employees.
Epidemiological circumstances still prevented the continuation of activities of the Training Academy,
but last year we managed to organise the talent screening events “Try On a Career”. 52 employees took
part and 47 of them went on to participate in the talent programme. As many as 74 per cent of them
(excluding employees who left job) have climbed their career ladder afterwards.
2 0 2 1
5 2 T E S T E D
T H E I R S K I L L S
4 7 N E W
T A L E N T S
2 . 2
2 0 1 9
2 0 2 0
C O M P E T E N C E D E V E L O P M E N T
5 1 T E S T E D
T H E I R S K I L L S
1 6 7 T E S T E D
T H E I R S K I L L S
4 3 N E W
T A L E N T S
9 7 N E W
T A L E N T S
7 4 % C L I M B E D
T H E C A R E E R
L A D D E R
4 0 % C L I M B E D
T H E C A R E E R
L A D D E R
N O
D A T A
The “Ambassadors of Apranga” project did not take place last year due to the epidemiological situation,
but we are certain that it will be continued when the situation improves. Nevertheless, last year we
discovered a number of virtual ambassadors who took part in an awareness campaign on the Group's
social networks. This project has been successfully implemented in all markets and the Group's
management has also been involved............................................................................................................................................................
The Apranga Group understands the importance of the family for the welfare of society; therefore, in
order to encourage mothers or fathers to return to the labour market after parenting leave, efforts are
made to offer them flexible working conditions that would allow them to reconcile childcare and work.
O C C U P A T I O N A L S A F E T Y 2 . 3
Occupational safety has always been and remains a priority area in our everyday business. All
employees are familiar with the requirements and rules and undertake to comply with them. Staff are
regularly trained, and the rules and training material are regularly reviewed and updated. All employees
have the right to a safe working environment and the duty to ensure a safe environment for
themselves, their colleagues and customers...........................................................................................................................................
We have never compromised on the health and safety of our employees when implementing
epidemiological safety requirements and recommendations. All employees were provided with all
necessary protective equipment, hand disinfection and temperature monitoring. The Group clearly
declared that the safety of its employees and customers was of paramount importance and at all times
strived to achieve that only healthy employees are present in the workplace. More than 100 thousand
euro were dedicated by the company to guarantee employee safety and provide all necessary safety
equipment during the pandemic....................................................................................................................................................................
In response to the management of the COVID-19 situation, the Group undertook employee testing in all
cases and invested in private employee testing when the need arose. The Group actively
communicated to employees about the national COVID-19 vaccination campaigns and the benefits of
vaccination to society.................................................................................................................................................................................................
All cases of COVID-19 in the workplace were responded to with extreme caution, ensuring that the virus
was not allowed to spread......................................................................................................................................................................................
We kept safety guidelines up-to-date and informed employees of changes in requirements. We
continued to promote a culture of wellness and disease prevention programmes by providing free
vaccinations against seasonal colds.
In 2021, the Group had no recorded accidents at work. As in the previous year, there were no workplace
safety violations, even minor ones. We have a zero tolerance approach to occupational safety and
consider the right of employees to feel safe to be a fundamental value.
3.
IMPACT OF
COVID-19
I M P A C T O F C O V I D - 1 9 3
Personnel (ability to compete on the labour market and in terms of remuneration)
Investments (ability to plan activities in line with epidemiological requirements)
Procurement (uncertainty due to operational constraints that may affect the ordering of goods and
inventory management)
Work organisation (operations while responding to morbidity and compulsory isolation requirements)
The impact of the COVID-19 pandemic is discussed in each chapter in terms of its relevance to a specific
area, so this section aims to provide an overview of the impact of the pandemic and related restrictions
on the Group's usual business model. Before looking at the most important periods in the Group's
operations in detail, it is important to note separately the areas most affected by COVID-19:
In 2021, active national vaccination campaigns against COVID-19 were carried out in all markets in
which the Group operated. This allowed to improve safety in workplaces and expect for milder
requirements, but was not sufficient to completely avoid restrictions on operations. Lithuania, Latvia
and Estonia used different measures (related to the trade sector) to manage the pandemic, but all
countries had common features: full restriction of operations, necessary protective measures, sales area
requirements, management of visitor flows, and restriction of operations of some companies. ........................
In all cases, the Group complied with all mandatory safety requirements and publicly advocated those
measures which, while ensuring public safety, did not violate the principles of fair competition and did
not give exclusive treatment to some of the market players. The Group has benefited from fiscal and
compensatory state aid in all countries where such aid was available under the law. State aid has been
used to ensure the stability of the company in the event of inability to plan business, retain jobs and
cover certain fixed costs in the event of full or partial restriction of sales in physical stores.
T R A D E R E S T R I C T I O N P E R I O D S I N 2 0 2 1 3 . 1
Lithuania.
Latvia.
Estonia.
Trade in non-essential goods in shops was prohibited until 15 February 2021. From 16 February, outlets
of up to 300 square metres with a separate entrance from the outside were allowed to operate. On 25
March, all shops with a separate outside entrance were allowed to operate. On 19 April, a decision was
taken to allow all the Group's stores to operate; however, weekend and holiday operations in the
shopping centres were prohibited. On 19 May, all the Group's stores were allowed to operate. For the
rest of the period, all the Group's stores were open, yet it should be noted that from 13 September,
restrictions were introduced with regard to customers who had not been vaccinated or had not
recovered from COVID-19, which affected the Group's operations.
All the Group's stores were closed until 7 April 2021, after which stores of non-essential goods with an
area of up to 7 000 square metres or those located in shopping centres of up to 7 000 square metres
were allowed to operate. On 22 May, all outlets with a separate entrance from the outside were allowed
to operate, and from 3 June, all the Group's stores could be opened. New restrictions were imposed on
14 October with a ban on weekend trading in shopping centres and, since the epidemiological
situation did not improve, on 21 October the national government decided to temporarily ban trading
in non-essential goods stores. This prohibition remained in force until 15 November, when operations
were resumed, with a ban only on shopping centres at weekends. Once opened, non-essential goods
stores required to show proof of vaccination or recovery. The stores were opened on weekends since 24
December.
At the beginning of the year, there were no restrictions on trading activities, but from 6 March,
non-essential goods stores were closed at weekends and on public holidays. Already on 11 March, the
government took a decision to close all physical stores until 3 May. No further conditions for a complete
closure were imposed on trade and the Group's stores remained open for the rest of the period in
compliance with all the necessary safety requirements.
In 2021, the Group operated in Lithuania for 31 days under full closure conditions and for 148 days
(including the closure period) under the conditions of restricted operation of physical stores. In Latvia,
the closure period was 96 days at the beginning of the year and 24 days at the end of the year, making
a total of 120 days. Outlets operated under restricted operation and closure conditions for a total of 231
days. In Estonia, physical stores were closed for 53 days and under restricted conditions for another 5
days.
4.
ANTI-CORRUPTION
ACTIVITIES
A N T I - C O R R U P T I O N A C T I V I T I E S 4
In its operations, the Group follows the Code of Ethics and Conduct which is binding on all Group’s
employees. Its provisions are reviewed and updated as necessary. A Whistleblowing Procedure is also in
place to ensure that employees can safely provide important information relating to or assisting in the
prevention of potential breaches. It should be noted that last year no reports that were received were
found to be true..............................................................................................................................................................................................................
The Group maintains its public and open commitment to comply with all laws and regulations, to act
ethically both within the company and in relation to third parties. Our aim is to reduce, by all means,
any damage that might arise from the intentional or unintentional action of the persons concerned.........
No specialised training on corruption prevention and compliance was provided last year, but the
absolute majority of top level and division managers are familiar with the training material and have
acquired the competences to deal responsibly with any form of corruption. The Group’s legal division
regularly reviews and updates information on significant legislation to combat potential corruption...........
We advocate transparent and ethical business and set ourselves the goal of preventing any possible
corruption or conditions for it in our business..........................................................................................................................................
The Group is strongly against any form of corruption and bribery, active or passive, including promising,
offering or settlement by payment or gift to an intermediary, business partner, civil servant, political
party or other third party, with a view to bribe the recipient, the supplier to not properly perform their
functions, duties or decisions, and vice versa. The Group also advocates fair, transparent and direct
communication with public authorities.
Fair business policy and transparent communication with customers, suppliers, contractors,
subcontractors and other third parties is promoted within the company. Procurement of goods in the
company is always guided by the four eyes principle, thus preventing any manifestations of unfair
actions..............................................................................................................................................................................................................
In 2021, the Group did not have any cases involving the protection of material assets (there were four
such cases in 2020). In all cases, the zero tolerance principle was applied. No cases involving any other
form of corruption or bribery were recorded.
5.
PROTECTION OF
PERSONAL
DATA AND
PRIVACY
P R O T E C T I O N O F P E R S O N A L D A T A A N D P R I V A C Y 5
With the increasing scope of operation in the electronic space, the relevance and protection of
personal data is becoming more and more important in the Group's activities. While protecting the
privacy of our customers and safeguarding their legitimate expectations, we carefully comply with the
General Regulation on the Protection of Personal Data (GDPR) of the European Union. We instruct the
staff responsible for processing this data on how to use the information entrusted to us by customers
responsibly and securely.
In the past year, the Group provided personal data protection training which was mandatory for all
employees who are or may be involved in the processing of personal data.
Specialists working in HR and IT divisions follow stringent procedures to supervise and process
personal data related to targeted marketing and other features used in retail and online trading.................
The protection of personal data is also enshrined in our Code of Ethics and Conduct, which applies not
only to employees but also to other parties concerned, thereby further enhancing security..............................
The Group has a Personal Data Protection Officer who not only ensures compliance with the
regulations, but also informs employees about changes in key legislation or preventive actions in the
event of threats related to personal data.....................................................................................................................................................
In 2020, no incidents related to the protection of personal data or personal privacy breaches were
recorded..............................................................................................................................................................................................................................
We process all personal data entrusted to us responsibly and exert all effort to meet the expectations of
our customers, partners and employees.
6.
VALUE
ADDED FOR
SHAREHOLDERS
V A L U E A D D E D F O R S H A R E H O L D E R S 6
S H A R E H O L D E R
M G I N V E S T M E N T U A B
M I N V I S T A U A B
S W E D B A N K A S ( E S T O N I A ) C L I E N T S
S H A R E O F V O T E S , %
6 2 . 3
1 3 . 1
6 . 6
In 2021, there were changes in the Board of Apranga APB, the Group's parent company. Two
independent Board members have joined and their involvement will enable even more responsible
assurance that the interests of all shareholders are respected in the activities of the Group and the
principles of good governance are applied. In our business we follow the best global practices and
strictly observe the rules of the Nasdaq Baltic capital market.
We are committed to open and honest communication with our shareholders and to fairness in the
provision of information to the market. We always strive to be an example of how the Group can shape
best business practices through disclosure...............................................................................................................................................
In 2021, Apranga APB decided not to pay dividends and to keep profits undistributed in light of the
continuing difficult epidemiological situation. This is the second year in a row that such a decision has
been taken. Previously, a similar decision was taken after the economic crisis of 2008–2009. .............................
The structure of the main shareholders remained unchanged last year. Apranga APB is majority-owned
by the investment holding MG Investment (on 1 July 2021, MG Baltic Investment changed its name to
MG Investment UAB). The shareholders of the company who control more than 5 per cent of the votes
at the shareholders' meeting:
7.
VALUE
ADDED FOR
SOCIETY
V A L U E A D D E D F O R S O C I E T Y 7
education of the younger generation;
assistance to socially vulnerable groups of society;
promotion of cultural activities;
sports and active lifestyle.
When granting support, the Group follows the guidelines on the provision of support, which are
reviewed annually. As part of its responsible support allocation policy and in order to create the greatest
possible value for society.........................................................................................................................................................................................
We continuously cooperate and communicate with various non-governmental organisations and look
for ways to contribute to their activities when this is in line with the Group's social responsibility policy.
We see the creation of value for society not only through material support, but also by engaging in the
education of the younger generation, contributing to the solution of social problems or investing in
measures to reduce environmental impact.
In 2021, the Group's main social responsibility areas remained unchanged. In line with the United
Nations Sustainable Development Goals, the Group has identified areas where it can make the greatest
positive impact on society:
Last year, to promote responsible consumption and reduce waste to landfills, the Group cooperated
with the global fashion leader Inditex and local non-governmental organisations to implement the
“Take Back Project” for collecting used textiles. This is an ongoing project that has created more than
50 collection points for used clothing in the Group's stores. Customers can return their unused clothes
at convenient locations in various cities in the three Baltic countries.
All collected clothing is handed over to local NGOs, which sort the garments and donate them to
charity, recycling or for resale on the second-hand clothing market. None of collected clothes can end
up in a landfill and no more than 5 per cent of collected clothing can be used for energy regeneration.
All the benefits from the project go to the NGOs and the Group contributes additional organisational
and logistical resources to the project. 2021 was the first year in which the project was fully operational
in all stores, but its results were affected by the pandemic and related restrictions on trade activities,
when the Group's stores were closed. In the first year of the project, approximately 2 tonnes of used
clothes were collected and they did not end up in a landfill. The Lithuanian market accounted for the
majority of used clothing collected, with the smallest amount collected in Estonia, where there is
already a fairly extensive programme for collection of used textiles. The Group supports the initiative to
organise separate collection of textiles at national level to ensure that recyclables do not end up in
mixed landfills, and it expects this to be in place in all the markets in which it operates from 2025.
7
V A L U E A D D E D F O R S O C I E T Y
The Group continued its cooperation with the Lithuanian Basketball League and the Kaunas Žalgiris
basketball team to promote an active lifestyle and wellness activities. We support the main national
basketball league and the country's strongest club to reinforce the importance of healthy lifestyle for
different age groups. We want to create a perfect image for well-known athletes so that they can serve
as role models, especially for young athletes. Last year, we also provided support to the fast-growing
and increasingly popular Lithuanian Padel Federation....................................................................................................................
To reduce social exclusion and help the most vulnerable groups in society, we supported social care
homes for the elderly and children's charities. Together with Public Institution Vaikų Svajonės
(Children's Dreams) we made 100 children's dreams of warm clothes come true, and we provide
financial support to Public Institution Gydytojai Klounai (Clown Doctors), an organisation that aims to
brighten the daily lives of sick children.........................................................................................................................................................
We continued our cooperation with Vilnius College of Design and supported Kaunas Vocational School
of Household Services and Business with items that the students could use to create new clothes. We
handed over non-marketable products that the students brought back to life, using their knowledge
and ideas. In doing so, we not only promoted the education of young creators, but also reduced the
amount of waste that could have ended up in landfills.
7
Fig. 7.
Taxes payable in 2021 and changes
per year as well as changes in %
E U R m i l l i o n
C h a n g e i n %
T A X E S P A Y A B L E
50
40
30
20
10
0
-10
4 2 , 7
- 2 , 2
- 1 9
2016
7
4 5 , 7 4 4 , 7
2017
8 , 2
2019
20202018
4 8 , 4
3 9 , 2
1 4 , 5
2021
4 4 , 9
V A L U E A D D E D F O R S O C I E T Y
In addition to encouraging local creators, we also cooperate with Baltic creators, and some of their
products can be purchased in the Group's retail chain. In our stores customers can buy clothes by
2Ru2Ra, Ūkai, Agnė Gilytė, and Izzybag gift bags.................................................................................................................................
In 2021, the Group collaborated with and offered sponsorship to the international fashion event Mados
Infekcija, a stepping stone for fashion makers. This is a socially responsible event that annually draws
attention to, highlights and seeks solutions to sensitive social and environmental issues.....................................
In the three capitals of the Baltic States, we implemented an umbrella sharing campaign last year,
during which we set up umbrella sharing stations at the most popular gathering places in Vilnius, Riga
and Tallinn. This project has received a lot of attention and good reviews, and we are happy with every
smile when an unexpectedly found umbrella saved a rainy day. We are members of society, so we strive
to make it better every day....................................................................................................................................................................................
In 2019, we allocated EUR 84 890, in 2020 – a total of EUR 75 030. Last year, the amount of support
accounted for EUR 76 491, similarly as in 2020.........................................................................................................................................
In 2020, the Group's accrued taxes payable to the budget amounted to EUR 44.9 million, which was
14.5 per cent higher than in 2020 (EUR 39.2 million). The main reason for the increase in taxes payable is
the Group's growing turnover after adjusting to the pandemic restrictions which had a very significant
impact in 2020. At the end of the period, the Group repaid the tax deferral assistance granted in all
countries and fully settled with the tax authorities under the tax deferral instrument. Although the
Group could have repaid the taxes over a longer period of time according to the agreed schedule, the
decision was taken to repay them earlier....................................................................................................................................................
Last year, the wage bill grew, with an average remuneration increase of 9.8 per cent per employee.
Wages were increased to all employees, based on their current remuneration and work record.
8.
ENVIRONMENTAL
PROTECTION
E N V I R O N M E N T A L P R O T E C T I O N 8
G H G E M I S S I O N 8 . 1
S C O P E 1
Owned and leased
car fleet (partially
inclusive*)
Purchased electricity
(only purchased
directly)
Air trips for
business
purposes
S C O P E 2 S C O P E 3
Replenishment of
refrigerants
Office paper
*Employees'
commute
The Apranga Group recognises that climate change has an impact on everyday life in all markets and
affects the Group's business model. The Group is also aware of its responsibility for its activities that
influence climate change around the globe. We take a responsible approach to our activities, their
influence and our efforts to reduce our impact on climate change, which is why the environmental
dimension is at the heart of our sustainability policy. The Apranga Group's business is exclusively
clothing retailing in physical and online stores. The Group is not involved in any processes related to the
manufacturing of products, but nevertheless understands that its activities are an integral part of the
global textile industry................................................................................................................................................................................................
In its business, the Group focuses on the compliance with high environmental standards and the desire
to reduce its ecological footprint. The integration of sustainable solutions is applied in all phases of our
operations, not only by striving for energy efficiency, but also by taking concrete actions to reduce
greenhouse gas (GHG) emissions, reduce waste and implement other sustainable solutions in our
operations. This year, for the first time, we are publishing our estimated GHG emissions in CO2
equivalent. We are also providing information on the use of plastic in the Group's operations and
supplementing the report with details of the car fleet we own.
In this report, the Apranga Group publishes the estimated GHG emissions of its operations in CO2
equivalent. This publication identifies the sources of emissions and the methodologies used to
calculate them, indicating the scope to which the emission source belongs. The knowledge and
methodologies of market-based financial institutions and energy suppliers were used to calculate GHG
emissions. The publication of the estimated emissions follows the standards and guidelines of the
Greenhouse Gas Protocol (GHG Protocol).
The Group has excluded water (the central office uses a water borehole that uses electricity accounted
for as part of the overall electricity consumption) from the GHG emission calculation factors due to the
very low impact. These indicators have no impact on the final result, but a culture of responsible
consumption is nevertheless promoted within the Group, encouraging reduction of the amount of
documents printed, reuse of paper and being sure to alert those in charge of the water supply
regarding possible plumbing faults.
G H G E M I S S I O N 8 . 1
C A R F L E E T
R E F R I G E R A N T S
E L E C T R I C I T Y
T R A V E L L E D B Y A I R
P A P E R
To calculate the pollution of the car fleet, the number of kilometres driven per year and the amount of
fuel consumed were calculated, with a pollution indicator assigned to the type of fuel concerned. The
annual emissions were estimated to account for 339 tonnes of CO2 equivalent. Details of the Group's
fleet of owned and leased cars are provided in the chapter “Car fleet”.
are substances that boil and evaporate at low temperatures and are used for heat transfer. They are
used by the Group in ventilation and air conditioning systems for administrative and commercial
premises. For the purpose of assessing the GHG emission equivalent, the amount of refrigerant used
for replenishment per year was calculated in kilograms, with a pollution indicator assigned to the type
of substance concerned. The estimated annual use was 12.45 kg of R410-A and 0.5 kg of R32 for
refrigerant replenishment. The total CO2 emission equivalent of these substances was 26.3 tonnes.
The Group's electricity consumption in 2021 was higher than in the same period in the previous year.
The main reason for this change was the improving epidemiological situation and the bigger number
of days the stores were open when they were not subject to strict restrictions. In this context, it is not
appropriate to estimate the growth in electricity consumption compared to 2020. All the electricity
purchased by the Group has a green certificate; therefore, in line with the guidelines of the GHG
Protocol, this electricity is equivalent to zero CO2 emissions.
Every year, we invest in more and more modern technologies to reduce our consumption of natural
resources and contribute to their conservation. In developing the Group's store network, we not only
take into account technological solutions, but also educate our employees about the benefits and
importance of saving.
During the year, the Group's employees travelled 375 000 kilometres by air. The trips were related to the
acquisition of new collections, maintaining relationships with partners and coordinating work between
different countries. A significant part of these trips are flights between Vilnius-Riga-Tallinn airports,
which are necessary for the Group's daily operations in other countries. In all cases, the necessity of
such travel is assessed and, where possible, alternative arrangements are made. The estimated CO2
equivalent of all trips is 58 tonnes.
2
The administration and stores use white A4 office paper (80 g/m ) for their daily needs. All measures are
aimed at reducing paper consumption by encouraging reuse and non-printing. In total, the Group
consumes about 3,600 kg of office paper per year. Only certified paper produced in the European
Union and meeting the standards adopted by the Forest Stewardship Council is used. The GHG
emissions of the paper used are estimated at 1.16 tonnes of CO2 equivalent.
The Group's total estimated emissions are 424.46 tonnes of CO2 equivalent. The Group notes that it
does not claim that the estimated emissions are the total GHG emissions associated with the Group's
activities. We will strive and make every effort to include as many indicators that reveal the
environmental impact of our activities as possible in the calculation. The Group declares its intention to
take action to contribute to the reduction of its GHG emissions and the mitigation of its environmental
impact.
Fig. 8.
Distribution
of bags
in stores in
2021
P A P E R
P L A S T I C
B O T H T Y P E
N A T U R A L R E S O U R C E S 8 . 2
P L A S T I C 8 . 3
P A P E R
P L A S T I C
B O T H T Y P E S
T O T A L
1 6 2
4
1 3
1 7 9
1 4 5
4
3 7
1 8 6
- 4
0
- 6
9 3 %
2 %
5 %
1 0 0 %
C H A N G E I N
2 0 2 1 / 2 0 2 0
1 5 8
4
7
1 6 9
N U M B E R O F
S T O R E S I N 2 0 2 1
- 1 0
N U M B E R O F
S T O R E S I N 2 0 2 0
N U M B E R O F
S T O R E S I N 2 0 1 9
S H A R E O F S T O R E S
I N T H E G R O U P I N
2 0 2 1
When setting up new or reconstructing existing stores, we only use the most advanced technologies
that meet the highest environmental standards. We adhere to them not only when choosing the
equipment for the sales area, but also during the installation process. All stores use low-energy LED
lamps, which are serving longer. In the administrative building, the spaces are divided into segments
so that the lighting is used as efficiently as possible and only in those zones where there are employees.
The administration and logistics complex uses geothermal heating energy, the emissions of which are
accounted for together with the total electricity consumed.........................................................................................................
When setting up new or upgrading existing stores we aim at using only those solutions that are safe for
customers, employees and the environment, introduce trade innovations that contribute to saving
energy costs, search for the most modern commercial and architectural solutions....................................................
When upgrading stores, we abide by the principle that, despite the decisions taken, we must introduce
technologies that reduce or do not increase consumption of resources.
Last year, we further increased the proportion of outlets that only use paper bags for customers. In
total, this proportion is 93 per cent in the Group. The number of stores using both types of bags has
decreased. Our goal is to eliminate plastic in all cases where disposable bags are used..........................................
The plastic used by the Group is accurately accounted for and we set the goal to achieve zero kilograms
of it in the Group's operations per year (2024).
C A R F L E E T 8 . 4
At the end of the period, the Group's fleet of owned or leased cars consisted of 83 vehicles. Their
average age is 3.9 years. The fleet is regularly reviewed and renewed to ensure the safety of operators
and road users, the provision of logistical functions and the application of environmental requirements.
47 cars (57 per cent) comply with the Euro 6 standard, and the remaining are at least Euro 5 vehicles.
The Group's total distance driven in 2021 amounted to 1 435 000 kilometres. Of these, 660 000
kilometres were covered by diesel vehicles and 775 000 kilometres by petrol vehicles. The parking
space of the Group's administration building is equipped with charging stations for electric vehicles.
The Group currently uses one electric vehicle. The number of less polluting and electric vehicles is
planned to be increased as part of fleet renewal.
Mobile sources of pollution are one of the main contributors to the Group's estimated CO2 equivalent
emissions, and sustainable solutions are being pursued to reduce CO2 emissions in order to minimise
the environmental impact.
9.
INFORMATION
ON THE COMMENTS
TO THE REPORT
The Corporate Social Responsibility Report contains the Group’s non-financial information to the
stakeholders. The report is prepared once a year and is presented along with the consolidated annual
report. The report is published on the company’s website in Lithuanian and in English. The report is
drawn up in accordance with the requirements of the Republic of Lithuania Law on Consolidated
Financial Reporting by Groups of Undertakings, the European Commission guidelines on non-financial
reporting and the Recommendations on Non-Financial Information Reporting by the Bank of
Lithuania. Comments and inquiries regarding the report can be submitted by e-mail to
marketingas@apranga.lt. No comments were received on the 2020 Corporate Social Responsibility
Report.
