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| 1
UAB “Atsinaujinančios
Energetikos Investicijos”
Audited Consolidated and Separate
Financial Statements as at and
for the year ended 31 December 2023, prepared in accordance with
IFRS accounting standards as adopted by the European Union
Closed-end Investment Company Intended for Informed Investors
Content
| 2
Statement of Financial Position
3
Statement of Profit or Loss and other Comprehensive Income
4
Statement of Cash Flows
5
Consolidated Statement of Changes in Equity
6
Separate Statement of Changes in Equity
7
Explanatory Note
8
I. General
9
II. Accounting Policy
12
III. Notes
27
1. Investment assets at fair value through profit or loss
28
2. Other financial assets
37
3. Prepayments
38
4. Other current receivables
39
5. Cash and cash equivalents
39
6. Issued capital
40
7. Share premium
40
8. Legal reserve
40
9. Bonds issued
41
10. Loans received
43
11. Trade and other payables
44
12. Payables to employees
44
13. Income
44
14. Administrative expenses
45
15. Finance costs
45
16. Income tax
46
17. Segment information
46
18. Related parties
48
19. Financial risk management
50
20. Subsequent events
59
Annual report of the Company and Group for FY2023
61
Corporate governance reporting
68
Confirmation of responsible persons
87
Statement of Financial Position
Amounts are presented in thousand EUR, unless stated otherwise
| 3
Financial statements signed by electronic signature:
Director of Management Company
Vilma Tvaronavičienė
Company's manager
Grėtė Bukauskaitė
Representative of company providing accounting services
Ramunė Piečiukaitienė
Company
31
31
31
31
Notes
December
December
December
December
2023
2022
2023
2022
Assets
Non-current assets
Investment assets at fair value through
profit or loss
1
180 060
144 908
180 060
144 908
Investment in subsidiaries
-
-
2
2
Other financial assets
2
2 275
1 650
2 250
1 650
Prepayments
3
25
25
25
25
Total non-current assets
182 360
146 583
182 337
146 585
Current assets
Other financial assets
2
1 600
-
1 600
-
Other receivables
4
839
167
803
128
Cash and cash equivalents
5
2 083
9 877
2 053
9 877
Total current assets
4 522
10 044
4 456
10 005
Total assets
186 882
156 627
186 793
156 590
Equity & liabilities
Equity
Issued capital
6
58 656
54 884
58 656
54 884
Share premium
7
24 119
21 128
24 119
21 128
Legal reserve
8
1 075
407
1 075
407
Retained earnings
31 477
27 114
31 450
27 113
Total equity
115 327
103 533
115 300
103 532
Non-current liabilities
Bonds issued
9
69 020
49 757
69 020
49 757
Loans received
10
-
112
-
112
Total non-current liabilities
69 020
49 869
69 020
49 869
Current liabilities
Bonds issued
9
161
116
161
116
Trade and other payables
11
2 331
3 084
2 312
3 073
Payables to employees
12
37
24
-
-
Current tax liabilities
6
1
-
-
Total current liabilities
2 535
3 225
2 473
3 189
Total liabilities
71 555
53 094
71 493
53 058
Total equity & liabilities
186 882
156 627
186 793
156 590
Statement of Profit or Loss and Other
Comprehensive Income
Amounts are presented in thousand EUR, unless stated otherwise
| 4
Financial statements signed by electronic signature:
Director of Management Company
Vilma Tvaronavičienė
Company's manager
Grėtė Bukauskaitė
Representative of company providing accounting services
Ramunė Piečiukaitienė
Group
Company
Notes
2023
2022
2023
2022
Income
Net gain on financial assets at fair value through profit or loss
13
10 874
19 635
10 874
19 635
Dividend income
13
355
21
355
21
Other income
13
198
73
190
73
Total net income
11 427
19 729
11 419
19 729
Expenses
Administrative expenses
13
(2 495)
(4 406)
(2 520)
(4 435)
Loss allowance on prepayments
-
(25)
-
(25)
Loss from deconsolidation of a subsidiary
-
(22)
-
-
Total expenses
(2 495)
(4 453)
(2 520)
(4 460)
Operating profit
8 932
15 276
8 899
15 269
Finance income
Foreign exchange gain
44
1
45
1
Total finance income
44
1
45
1
Finance costs
Interest expenses
15
(3 939)
(1 910)
(3 939)
(1 910)
Total finance costs
(3 939)
(1 910)
(3 939)
(1 910)
Profit before tax
5 037
13 367
5 005
13 360
Income tax
16
(6)
(3)
-
-
Profit after tax
5 031
13 364
5 005
13 360
Other comprehensive income (loss)
Items that may be reclassified to profit or loss
-
-
-
-
Items that will not be reclassified to profit or loss
-
(3)
-
-
Fair value adjustment on investment in deconsolidated entity
-
(3)
-
-
Total comprehensive income (loss)
5 031
13 361
5 005
13 360
Statement of Cash Flows
Amounts are presented in thousand EUR, unless stated otherwise
| 5
Group
Company
Notes
2023
2022
2023
2022
Profit before tax
5 037
13 367
5 005
13 360
Adjustments for:
Net gain on financial assets at fair value through profit or loss
13
(10 874)
(19 635)
(10 874)
(19 635)
Net finance costs
15
3 939
1 910
3 939
1 910
Dividends received
13
(355)
(21)
(355)
(21)
Loss allowance on prepayments
-
25
-
25
Loss from deconsolidation of a subsidiary
-
22
-
-
Working capital adjustments
Decrease (increase) in trade and other receivables
(251)
(56)
(229)
(13)
Increase (decrease) in trade and other payables
(736)
2 214
(757)
2 023
Net cash flows from activities
(3 240)
(2 174)
(3 271)
(2 351)
Income taxes paid
(1)
(3)
-
-
Dividends received
13
243
21
243
21
Net cash flows from operating activities
(2 998)
(2 156)
(3 028)
(2 330)
Loans granted
1
(43 098)
(50 092)
(43 098)
(50 092)
Repayment of loans granted
1
19 746
-
19 746
-
Payment of interest on loans granted
1
5 644
836
5 644
836
Bonds acquired
1
(12 887)
(15 741)
(12 887)
(15 741)
Redeemed bonds
1
3 248
6 234
3 248
6 234
Payment of bonds interests
1
370
266
370
266
Acquisition of subsidiary and associate
1,3
(1)
(20)
(1)
(20)
Sale of shares of subsidiary
1
-
3
-
3
Received amount from third party
-
2 750
-
2 750
Issue of financial guarantees
2
(1 000)
(5 400)
(1 000)
(5 400)
Transfer of financial guarantees
-
3 750
-
3 750
Recovery of financial guarantees
2
1 050
-
1 050
-
Deconsolidation of subsidiary net of cash deconsolidated
-
(174)
-
-
Advance payment for shares repaid
-
100
-
100
Net cash flows from investing activities
(26 928)
(57 488)
(26 928)
(57 314)
Proceeds from issue of share capital
6
3 772
14 821
3 772
14 821
Proceeds from share premium
7
2 991
10 338
2 991
10 338
Bonds issued
9
18 828
25 182
18 828
25 182
Transaction costs related to bonds issued
9
(224)
(226)
(224)
(226)
Repayment of bonds principal
9
-
(5 173)
-
(5 173)
Repayment of bonds interest
9
(3 235)
(1 885)
(3 235)
(1 885)
Net cash flows from financing activities
22 132
43 057
22 132
43 057
Net change in cash and cash equivalents
(7 794)
(16 587)
(7 824)
(16 587)
Cash and cash equivalents at the beginning of the year
9 877
26 464
9 877
26 464
Effects of foreign exchange rate changes
-
-
-
-
Cash and cash equivalents at the end of the year
2 083
9 877
2 053
9 877
Financial statements signed by electronic signature:
Director of Management Company
Vilma Tvaronavičienė
Company's manager
Grėtė Bukauskaitė
Representative of company providing accounting services
Ramunė Piečiukaitienė
Consolidated Statement of Changes
in Equity
Amounts are presented in thousand EUR, unless stated otherwise
| 6
For the financial year ended 31 December 2023
Issued
Share
Legal
Retained
Total
capital
premium
reserve
earning
Balance as of 1 January 2023
54 884
21 128
407
27 114
103 533
Contributions and redemptions by holders of
redeemable shares:
- Issue of redeemable shares
3 772
2 991
-
-
6 763
- Redemption of redeemable shares
-
-
-
-
-
Total contributions and redemptions by holders of
redeemable shares
3 772
2 991
-
-
6 763
Profit for the year
-
-
-
5 031
5 031
Other comprehensive income for the year
-
-
-
-
-
Transfers to legal reserve
-
-
668
(668)
-
Balance as at 31 December 2023
58 656
24 119
1 075
31 477
115 327
Balance as at 1 January 2022
40 063
10 790
124
14 036
65 013
Contributions and redemptions by holders of
redeemable shares:
- Issue of redeemable shares
14 821
10 338
-
-
25 159
- Redemption of redeemable shares
-
-
-
-
-
Total contributions and redemptions by holders of
redeemable shares
14 821
10 338
-
-
25 159
Profit for the year
-
-
-
13 364
13 364
Other comprehensive income for the year
-
-
-
(3)
(3)
Transfers to legal reserve
-
-
283
(283)
-
Balance as at 31 December 2022
54 884
21 128
407
27 114
103 533
Financial statements signed by electronic signature:
Director of Management Company
Vilma Tvaronavičienė
Company's manager
Grėtė Bukauskaitė
Representative of company providing accounting services
Ramunė Piečiukaitienė
Separate Statement of Changes
in Equity
Amounts are presented in thousand EUR, unless stated otherwise
| 7
For the financial year ended 31 December 2023
Issued
capital
Share
premium
Legal
reserve
Retained
earning
Total
Balance as of 1 January 2023
54 884
21 128
407
27 113
103 532
Contributions and redemptions by holders of
redeemable shares:
- Issue of redeemable shares
3 772
2 991
-
-
6 763
- Redemption of redeemable shares
-
-
-
-
-
Total contributions and redemptions by holders of
redeemable shares
3 772
2 991
-
-
6 763
Profit for the year
-
-
-
5 005
5 005
Other comprehensive income for the year
-
-
-
-
-
Transfers to legal reserve
-
-
668
(668)
-
Balance as at 31 December 2023
58 656
24 119
1 075
31 450
115 300
Balance as at 1 January 2022
40 063
10 790
124
14 036
65 013
Contributions and redemptions by holders of
redeemable shares:
- Issue of redeemable shares
14 821
10 338
-
-
25 159
- Redemption of redeemable shares
-
-
-
-
-
Total contributions and redemptions by holders of
redeemable shares
14 821
10 338
-
-
25 159
Profit for the year
-
-
-
13 360
13 360
Other comprehensive income for the year
-
-
-
-
-
Transfers to legal reserve
-
-
283
(283)
-
Balance as at 31 December 2022
54 884
21 128
407
27 113
103 532
Financial statements signed by electronic signature:
Director of Management Company
Vilma Tvaronavičienė
Company's manager
Grėtė Bukauskaitė
Representative of company providing accounting services
Ramunė Piečiukaitienė
| 8
Explanatory Note
I. General
| 9
These consolidated financial statements of UAB Atsinaujinančios energetikos investicijos (hereinafter – the Company or AEI) and its
subsidiary, as well as separate financial statements of the Company as at and for the financial year ended on 31 December 2023 were
prepared and signed by Management on 23 April 2024. According to the Law on Companies of Republic of Lithuania, the annual financial
statements prepared by the Management are authorised by the General Shareholders’ meeting. The shareholders hold the power not to
approve the annual financial statements and the right to request new financial statements to be prepared.
The Company was registered in the Register of Companies at Lvivo g. 25, Vilnius on 15 March 2016, company code 304213372. The
Company has its registered office at Jogailos g. 4, Vilnius. The Company specializes in renewable energy infrastructure objects and related
assets such as development of new renewable energy production sources. As investments to the renewables sector have shown an
extensive growth potential the decision was made to transform the Company into a separate closed-end collective investment entity to
provide investors an instrument to invest directly into renewable energy sector. Based on the decision of the Supervision Service of the Bank
of Lithuania dated 14 December 2020, the Company was reorganised into a closed-end investment company for informed investors, after
the Supervision Service of the Bank of Lithuania had approved the Articles of Association of the Company. The Company started to operate
as a closed-end investment entity on 16 December 2020. The Company’s data is accumulated and stored at the state enterprise Centre of
Registers. The Company shall operate until 5 February 2026 with a possibility of extending the operation period for additional 2 years, upon
which, the Company shall redeem the shares issues from its investors.
The Company is a limited liability private legal person having its economic and commercial, financial, and organisational independence. The
Company is held liable for its liabilities only to the extent of its assets.
The objective of the Company is, by offering its shares, to collectively invest the collected funds in renewable energy infrastructure objects
and related assets such as renewable energy sources, energy efficiency projects, energy resources distribution and transmission networks
and their storage facilities, etc. and seek to earn profit for its Shareholders. The redemption of the Company’s shares shall be restricted up
until the end of the Company's investment activities on 5 February 2026 or 5 February 2028 if the operation period shall be extended for an
additional 2 years.
As at 31 December 2023, the authorised capital of the Company amounted to EUR 58 656 thousand (as at 31 December 2022 – EUR 54 884
thousand). As at 31 December 2023, the authorised capital was divided into 58 656 399 ordinary registered shares (as at 31 December 2022
– 54 884 151) with the par value of EUR 1 each. As at 31 December 2023, the Company’s share capital is fully paid and share premium
made up EUR 24 119 thousand (as at 31 December 2021 – EUR 21 128 thousand). AEI does not own its own shares.
These consolidated financial statements include two consolidating entities of the group – AEI and UAB AEI Development. These separate
financial statements include AEI. In these financial statements, definition of Group is used to refer to, jointly, investment activities performed
by AEI and provision of project management and consulting services by UAB AEI Development, and definition of Company is used to refer
to, solely, investment activities performed by AEI. In these financial statements, explanatory notes with a reference “Group and Company”
presents financial data of the Company, which coincides with the consolidated financial data of the Group.
Subsidiaries and associates
As at 31 December 2023 the Company controlled the following subsidiaries and associates:
Country of
Date of
Ownership, %
Segment
domicile
acquisition
Subsidiary
Energy Solar Projekty sp. z o. o.
Poland
2018-11-09
100%
Investment activities
PV Energy Projects sp. z o. o.
Poland
2020-09-01
100%
Investment activities
UAB JTPG
Lithuania
2020-12-23
89,96%
Investment activities
PL Sun sp. z o. o.
Poland
2022-02-18
100%
Investment activities
UAB Atelda
Lithuania
2022-02-18
100%
Investment activities
UAB Nimela
Lithuania
2022-05-13
100%
Investment activities
Project management
UAB AEI Development
Lithuania
2022-07-04
100%
and consultation
services
UAB Rineila
Lithuania
2022-09-05
100%
Investment activities
UAB Pakruojo vėjas
Lithuania
2023-11-28
100%
Investment activities
Associate
UAB Saulės energijos projektai
Lithuania
2016-06-15
30%
Investment activities
UAB Ekoelektra
Lithuania
2021-04-21
50%
Investment activities
UAB Žaliosios investicijos
Lithuania
2021-09-16
25%
Investment activities
I. General
| 10
(Continued)
Country of
Date of
Ownership, %
Segment
domicile
acquisition
UAB KNT Holding
Lithuania
2022-03-16
50%
Investment activities
Zalais Speks SIA
Latvia
2022-03-29
50%
Investment activities
Zala Elektriba SIA
Latvia
2023-03-30
50%
Investment activities
As at 31 December 2022 the Company controlled the following subsidiaries and associates:
Country of
Date of
Ownership, %
Segment
domicile
acquisition
Subsidiary
Energy Solar Projekty sp. z o. o.
Poland
2018-11-09
100%
Investment activities
PV Energy Projects sp. z o. o.
Poland
2020-09-01
100%
Investment activities
UAB JTPG
Lithuania
2020-12-23
100%
Investment activities
PL Sun sp. z o. o.
Poland
2022-02-18
100%
Investment activities
UAB Atelda
Lithuania
2022-02-18
100%
Investment activities
UAB Nimela
Lithuania
2022-05-13
100%
Investment activities
Project management
UAB AEI Development
Lithuania
2022-07-04
100%
and consultation
services
UAB Rineila
Lithuania
2022-09-05
100%
Investment activities
Associate
UAB Saulės energijos projektai
Lithuania
2016-06-15
30%
Investment activities
UAB Ekoelektra
Lithuania
2021-04-21
50%
Investment activities
UAB Žaliosios investicijos
Lithuania
2021-09-16
25%
Investment activities
UAB KNT Holding
Lithuania
2022-03-16
50%
Investment activities
Zalais Speks SIA
Latvia
2022-03-29
50%
Investment activities
Subsidiaries and associates of the Company specialize in the production of energy from renewable energy resources, these companies are
measured at fair value through profit or loss and are not consolidated in consolidated financial statements. As at 31 December 2023 and
31 December 2022, the fair value of the Company’s subsidiaries shares was:
As at 31 December 2023
As at 31 December 2022
Number of shares
Fair value of shares
Number of shares
Fair value of shares
(EUR)
(EUR)
Subsidiary
Energy Solar Projekty sp. z o. o.
100
9 290 057
100
5 354 678
PV Energy Projects sp. z o. o.
50
4 693 826
50
2 752 461
UAB JTPG
2 249
1
2 500
14 000
PL Sun sp. z o. o.
100
4 048 795
100
1
UAB Atelda
2 500
1
2 500
1
UAB Nimela
2 500
1
2 500
1
UAB Rineila
2 500
1
2 500
1
UAB Pakruojo vėjas
100
-
-
-
Associate
UAB Saulės energijos projektai
9 180
343 962
9 180
492 019
UAB Ekoelektra
50
1
50
1
UAB Žaliosios investicijos
7 209 746
23 448 712
7 209 746
34 160 102
UAB KNT Holding
1 250
1
1 250
1
Zalais Speks SIA
1 400
1
1 400
1
Zala Elektriba SIA
1 400
1
-
-
I. General
| 11
As at 31 December 2023, subsidiary which provided project management and consulting services to the Company was UAB AEI
Development. As at 31 December 2023 and 31 December 2022, the controlled number of shares and value of shares of subsidiary are
provided below:
As at 31 December 2023
As at 31 December 2022
Number of shares
Value of shares
Number of shares
Value of shares
(EUR)
(EUR)
Subsidiary
UAB AEI Development
100
27 000
100
9 000
The subsidiary UAB AEI Development provides project management and consulting services to the Company, therefore its' financial results
are consolidated in consolidated financial statements. In separate financial statements investment in subsidiary UAB AEI Development is
measured at cost.
Other Group companies specialize in the production of energy from renewable energy resources, these companies are measured at fair
value through profit or loss and are not consolidated.
The financial year of the Group coincides with the calendar year.
The Company is managed by UAB LORDS LB Asset Management (hereinafter – the Management Company), set up and registered on 8
September 2008, company code 301849625, having its registered office at: Jogailos g. 4, Vilnius, Lithuania. Data on the Management
Company are accumulated and stored in the Register of Legal Entities of the Republic of Lithuania.
By the decision of the Securities Commission of the Republic of Lithuania of 23 December 2008, UAB LORDS LB Asset Management was
issued Licence No. VĮK – 016 to engage in the activities of management companies operating under the Law on Collective Investment
Undertakings of the Republic of Lithuania. By Decision No. 03-201 of the Board of the Bank of Lithuania dated 5 December 2013 the
management company’s Licence No. VĮK – 016 was expanded and it was granted the right to manage collective investment undertakings
established under the Law on Collective Investment Undertakings Intended for Informed Investors of the Republic of Lithuania. On 23 June
2015, the Management Company was issued Licence No. 1 to engage in the activities of the management company operating under the
Law on Management Companies of Collective Investment Undertakings Intended for Qualified Investors.
As at 31 December 2023 UAB AEI Development which provides project management and consulting services to the Company had
12 employees (as at 31 December 2022 – 10 employees).
The Depository of the Company is AB SEB bankas, company code 112021238, registered office address: Konstitucijos pr. 24, Vilnius,
Lithuania.
The audit company of the Company is UAB KPMG Baltics, legal entity code 111494971, registered office address: Lvivo g. 101, Vilnius,
Lithuania.
Investments of the Company
The objective of the Company is to earn a return for the Company’s investors on investment in renewable energy infrastructure objects and
related assets. Renewable energy infrastructure objects and related assets include renewable energy powerplants, energy efficiency
projects, energy resource distribution and transmission networks and their storage facilities, etc.
By investing in infrastructure objects and related assets, the Company acquires equity and non-equity securities, which may also include
convertible bonds, movable and immovable properties.
The Company’s temporarily available funds may be invested into: (1) EU government bonds with a maturity not exceeding 3 years, liquid
and with an investment rating (by S&P or alternative certified rating agency), (2) deposits held in EU credit institutions with a maturity not
exceeding 1 year.
The Company may conclude derivative financial instrument transactions only for the purposes of risk management, thus seeking to hedge
the Company’s portfolio against potential adverse market changes.
Redemption of shares of the Company
Upon liquidation of the Company, firstly payments by the obligations to the Company's creditors are made, and after deductions are made,
the net assets are distributed to the Shareholders. Net assets are distributed equally and by the same conditions to all Shareholders by
redeeming the Company's issued shares. The Company's net assets are divided proportionately, by multiplying by the number of shares
held by the Shareholder, to the shareholding of each investor.
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II. Accounting Policy
II. Accounting Policy
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The principal 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.
1. Investment entity and principles of preparation of financial statements
Investment entity
Investors of the Company hold equity securities issued by the Company which are ordinary registered shares. The Company's management
concludes that the Company is an investment entity, regardless of its legal status, i.e., a limited liability company up until 16 December 2020
or closed-end company since 16 December 2020 up until the date of these financial statements, as it has three main components of the
definition of an investment entity:
- Obtains funds from one or more investors for the purpose of providing those investor(s) with investment management services
(investment services condition);
- Commits to its investor(s) that its business purpose is to invest funds solely for returns from capital appreciation, investment
income, or both (business purpose condition);
- Measures and evaluates the performance of substantially all its investments on a fair value basis (fair value condition).
Management has assessed that it complies with investment services condition as the Company’s solely goal is to collect pool of funds from
different investors and to provide returns from capital appreciation.
Subsidiaries
The Company has two types of subsidiaries. One type of subsidiary is a controlled subsidiary (hereinafter referred to as unconsolidated
subsidiary). In consolidated financial statements unconsolidated subsidiaries are measured at fair value through profit or loss and are not
consolidated in accordance with IFRS 10. Change of fair value of investment in a controlled subsidiary is recognized in statement of profit
or loss, the value is determined consistently with the fair value measurement principles as described in the accounting policy paragraph 12.
In separate financial statements investments in controlled subsidiaries are measured at fair value through profit or loss.
Second type of subsidiaries provide investment related services (investment advisory services, investment management services) to
investors and third parties (hereinafter referred to as consolidated subsidiary). They themselves are not investment subjects. In assessing
whether it meets the definition of an investment entity, the Company assesses whether the provision of services to third parties is a
secondary activity in relation to its main investment activity. In consolidated financial statements investments in subsidiaries that provide
services related to the Company's investment activities are consolidated. In separate financial statements investments in subsidiaries that
provide services related to the Company’s investment activities are measured at cost, less impairment losses, if any. At the end of each
financial year, Management Company of the Company, determines whether there is objective evidence that the investment in the subsidiary
is impaired. If there is such evidence, the Company calculates the amount of impairment as the difference between the recoverable amount
of the subsidiary and its carrying value, and then recognizes the loss in the separate Statement of Profit or Loss and Other Comprehensive
Income for the period in which they are incurred.
Associates
Associates are described as entities in which the Company has significant influence, but not control or joint control. In consolidated financial
statements and separate financial statements, investments in associates that are part of the Company's investment portfolio are measured
at fair value through profit or loss, regardless of the Company having a significant influence on such entities.
Principles of preparation of financial statements
The financial statements have been prepared in compliance with International Financial Reporting Standards (IFRS), as adopted by the
European Union (EU). These financial statements of the Company have been prepared in accordance with all effective requirements of IFRS
as at 31 December 2023.
The Company’s financial books and records are maintained separately from those of the Management Company according to the approved
chart of accounts. The Company should be in compliance with the Law on Collective Investment Undertakings Intended for Informed
Investors of the Republic of Lithuania (LCIUII).
II. Accounting Policy
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The financial statements are prepared based on the going concern principle and the assumption of continued operations in the near future.
According to the Company’s Prospectus and Articles of Association, the Company will operate until 5 February 2026 with the possibility of
extending its activities for another 2 years.
The values of the Company’s assets and liabilities, as well as all amounts shown in the financial statements are presented in euros.
Transactions denominated in foreign currencies are translated at the official exchange rate of the Bank of Lithuania valid at the date of the
transaction. Gains and losses resulting from the settlement of such transactions and from the translation of assets and liabilities
denominated in foreign currencies are recognized in the income statement. Such balances are translated at the exchange rate at the end of
the reporting period.
2. Principles of consolidation
The consolidated financial statements comprise the financial statements of the Company and its subsidiary (hereinafter – the Group) as at
31 December 2023 and 31 December 2022. The consolidated financial statements only include financial statements of subsidiary that is
not an investment entity and whose main purpose and activities are providing services that relate to the investment entity’s projects
management activities.
The Company is considered to have control when:
- Has the power to manage the investee;
- Is entitled to a variable return on investment; and
- Has the power to affect return on investment.
The Company reassesses whether it controls an investee if the facts and circumstances indicate a change in one or more of the three
elements of control listed above.
Consolidation of a subsidiary begins when the Company acquires control of the subsidiary and ends when the Company loses control of
the subsidiary. The results of subsidiaries acquired or disposed of during the year are included in the Statement of Profit or Loss and Other
Comprehensive income from the date on which the Company obtains control until the date that the Company ceases to control the
subsidiary.
Where necessary, the financial statements of subsidiaries are adjusted to ensure consistency with the policies adopted by the Group.
All the Group’s assets and liabilities, equity, income, expenses, and cash flows related to transactions between Group members are
eliminated on consolidation.
Changes in the Group's share in subsidiaries that do not result in a loss of control are accounted for as equity transactions. The carrying
amounts of the Group and minority interests are adjusted to reflect changes in their relative interests in subsidiaries. Any difference between
the amount by which the minority interest is adjusted and the fair value of the consideration paid or received is recognized directly in equity
and attributed to the owners of the Group.
When the Group loses control of a subsidiary, the gain or loss on disposal recognized in profit or loss is calculated as the difference between
(i) the fair value of the consideration received and the Group's interest in the entity after the transaction and (ii) the previous carrying amount
of assets (including goodwill) minus the liabilities of the subsidiary and minority interests. All amounts previously recognized in other
comprehensive income relating to a subsidiary are accounted for as if the Group had directly transferred the related asset or liability of the
subsidiary (i.e., reclassified to profit or loss or transferred to another category of equity as required / permitted by applicable IFRS). Any
investment retained in a former subsidiary after the transfer of ownership of the subsidiary is carried at fair value on initial recognition in
accordance with IFRS 9 Financial Instruments, or at cost of an associate.
IFRS 10 sets out principles of consolidation for investment entities. In its consolidated financial statements, an investment entity shall:
- consolidate any subsidiary that is not an investment entity and whose main purpose and activities are providing services that
relate to the investment entity’s investment activities and apply the requirements of IFRS 3 to the acquisition of any such
subsidiary; and
- measure all other investments in a subsidiary at fair value through profit or loss in accordance with IFRS 9.
3. Business combinations and goodwill
Business combinations are accounted for using the acquisition method. The cost of an acquisition is measured as the aggregate of the
consideration transferred, which is measured at acquisition date fair value, and the amount of any non-controlling interests in the acquiree.
II. Accounting Policy
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For each business combination, the Group elects whether to measure the non-controlling interests in the acquiree at fair value or at the
proportionate share of the acquiree’s identifiable net assets. Acquisition-related costs are expensed as incurred and included in
administrative expenses.
Assets acquired and arising liabilities at the acquisition date are recognized at fair value, except for:
- Deferred tax assets or liabilities arising from the assets acquired and liabilities assumed in a business combination is measured
and recognized in accordance with IAS 12 "Income taxes";
- Liabilities (or assets, if any) related to the acquiree’s employee benefit arrangements is measured and recognized in accordance
with IAS 19 "Employee benefits";
- Liabilities or equity instruments related to payments for the acquiree's shares or payments for shares made to replace the
acquiree's share-based payments are measured in accordance with IFRS 2 "Share-based Payment" at the time of acquisition;
- Assets that are classified as held for sale in accordance with IFRS 5 "Non-current Assets Held for Sale and Discontinued
Operations". Such assets are measured in accordance with IFRS 5.
Lease liabilities arising as at acquisition date are measured at the present value of the remaining lease payments in accordance with IFRS
16, as if the acquired leases were new leases at the acquisition date. Right-of-use assets acquired at the acquisition date are measured at
the same amount as the lease liabilities, adjusted to reflect favourable or unfavourable terms of the leases when compared with market
terms.
The Company determines that it has acquired a business when the acquired set of activities and assets include an input and a substantive
process that together significantly contribute to the ability to create outputs. The acquired process is considered substantive if it is critical
to the ability to continue producing outputs, and the inputs acquired include an organised workforce with the necessary skills, knowledge,
or experience to perform that process or it significantly contributes to the ability to continue producing outputs and is considered unique or
scarce or cannot be replaced without significant cost, effort, or delay in the ability to continue producing outputs.
When the Company acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification and
designation in accordance with the contractual terms, economic circumstances, and pertinent conditions as at the acquisition date.
Goodwill is initially measured at cost (being the excess of the aggregate of the consideration transferred and the amount recognised for
non-controlling interests and any previous interest held over the net identifiable assets acquired and liabilities assumed). If the fair value of
the net assets acquired is in excess of the aggregate consideration transferred, the Company re-assesses whether it has correctly identified
all the assets acquired and all the liabilities assumed and reviews the procedures used to measure the amounts to be recognised at the
acquisition date. If the reassessment still results in an excess of the fair value of net assets acquired over the aggregate consideration
transferred, then the gain is recognised in profit or loss.
Goodwill is not amortized but it is reviewed for impairment at least annually. For the impairment testing, goodwill is allocated to each cash-
generating unit (or group of cash-generating units) of the Company. Cash-generating units to which goodwill has been allocated are tested
for impairment annually or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of a cash-
generating unit is less than it carrying amount, the impairment loss is allocated first to reduce the carrying amount of goodwill allocated to
the unit and then to other assets in proportion to its carrying amount. Impairment losses on goodwill are not reversed in a subsequent
period. When a cash-generating unit is sold, the amount of goodwill allocated is included in determining the gain or loss on sale.
If the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination occurs, the
Group presents preliminary amounts for items for which the accounting is incomplete. These provisional amounts are adjusted during the
measurement period or additional assets or liabilities are recognized to reflect new information received about facts and circumstances
that existed at the acquisition date that would have affected the amounts recognized at the acquisition date.
When the Group acquires shares of a new entities, management considers the substance of the assets and activities of the acquired entity
in determining whether the acquisition represents the acquisition of a business or assets. Where acquisitions of shares of new entities are
not determined to be an acquisition of a business, they are not treated as business combinations, but as asset acquisitions.
4. Income recognition
The Group's financial income include interest income and increases in fair value of financial assets at fair value through profit or loss.
Interest income is accrued over the period, taking into account the outstanding portion and the applicable effective interest rate, which
accurately discounts the estimated future cash inflows over the estimated useful life of the financial asset to its net carrying amount.
II. Accounting Policy
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5. Expense recognition
Expenses are decreases in assets, or increases in liabilities, that result in decreases in equity. Expenses are recognised on an accrual basis
as they are recognized when incurred, regardless of when the cash is disbursed. The cost is usually estimated by the amount of money paid
or payable, excluding VAT. In cases where a long (over 1 year) settlement period and interest are not allocated, the cost is estimated by
discounting the settlement amount at the market interest rate.
The Company’s Management Fee, Depository service fees, auditors’ fees, Company’s incorporation (business structuring) costs, investment
object acquisition, management and sale costs, costs of financial institutions, remuneration to the Company’s property valuators,
Company’s accounting, fees of NAV calculation and share value determination services, currency exchange fees, costs of hedging with
currency exchange and interest rate swaps, litigation costs, costs related to loans obtained on behalf of the Company exceeding income
from loans granted on behalf of the Company to its SPV, fees for the management of the Company’s securities and other accounts, fees
for the safekeeping of the Company’s securities, fees for the management of the Shareholders’ personal securities accounts, costs of
execution, registration and deregistration of security instruments, costs of enforced recovery, state and municipal fees and charges, costs
of preparation, translation and presentation of information on the Company, costs of preparation and revision of the Articles of Association,
the Prospectus and the Key Investor Information Document, consultancy costs, notary fees, costs of registration and legal services, costs
of insurance for the persons of the Management Company responsible for the Company’s activities, costs incurred by the Investment
Committee in connection with the Company’s activities, and the Company’s presentation costs shall be covered from the Company’s assets.
All deductions to the Management entity and the depository are recognized on accrual basis.
6. Employee benefits
Short-term employee benefits
Short-term employee benefits are expensed as the related service is provided. A liability is recognised for the amount expected to be paid if
the Company has a present legal or constructive obligation to pay this amount because of past service provided by the employee and the
obligation can be estimated reliably.
7. Income tax
The calculation of income tax is based on the annual profit, considering the deferred income tax. Income tax is calculated in accordance
with the requirements of the tax laws of the Republic of Lithuania.
The corporate income tax rate applicable to companies of the Republic of Lithuania is 15%.
Tax losses may be carried forward for an indefinite period, except for losses arising from the transfer of securities and / or derivatives. Such
a transfer is terminated if the Company ceases to carry on the activities that caused the loss unless the Company ceases to carry on the
activities for reasons beyond its control. Losses from the transfer of securities and / or derivatives can be carried forward for 5 years and
covered only from the profit of the same type of transactions. The amount of deductible tax losses carried forward may not exceed 70% of
the amount of taxable profit for the reporting year.
Deferred tax is provided using the balance sheet liability method. Deferred tax reflects the net tax effects of temporary differences between
the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax
assets and liabilities are measured at the tax rates that are expected to apply in the period when the asset is realized or the liability is settled,
based on tax rates that have been enacted or substantively enacted by the statement of financial position date.
Deferred tax assets are recognized in the statement of financial position to the extent that it is probable that future taxable profits will be
available against which the asset can be utilized. If it is probable that part of the deferred tax will not be realized, this part of the deferred tax
is not recognized in the financial statements.
Based on the provisions of the Law on Corporate Income Tax of the Republic of Lithuania, income of collective investment undertakings is
non-taxable, and expenses are non-deductible accordingly.
8. Issued capital
The Company classifies financial instruments issued as financial liabilities or equity instruments in accordance with the substance of the
contractual terms of the instruments.
II. Accounting Policy
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Some financial instruments include a contractual obligation for the issuing entity to deliver to another entity a pro rata share of its net assets
only on liquidation based on the IAS 32. The obligation arises because liquidation either is certain to occur and outside the control of the
entity (for example, a limited life entity) or is uncertain to occur but is at the option of the instrument holder. As an exception to the definition
of a financial liability, an instrument that includes such an obligation is classified as an equity instrument if it has all the following features:
a) It entitles the holder to a pro rata share of the entity’s net assets in the event of the entity’s liquidation. The entity’s net assets are
those assets that remain after deducting all other claims on its assets. A pro rata share is determined by:
- dividing the net assets of the entity on liquidation into units of equal amount; and
- multiplying that amount by the number of the units held by the financial instrument holder.
b) The instrument is in the class of instruments that is subordinate to all other classes of instruments. To be in such a class the
instrument:
- has no priority over other claims to the assets of the entity on liquidation, and
- does not need to be converted into another instrument before it is in the class of instruments that is subordinate to all other
classes of instruments.
c) All financial instruments in the class of instruments that is subordinate to all other classes of instruments must have an identical
contractual obligation for the issuing entity to deliver a pro rata share of its net assets on liquidation.
Further, for an instrument to be classified as an equity instrument, in addition to the instrument having all the above features, the issuer
must have no other financial instrument or contract that has:
a) total cash flows based substantially on the profit or loss, the change in the recognised net assets or the change in the fair value
of the recognised and unrecognised net assets of the entity (excluding any effects of such instrument or contract); and
b) the effect of substantially restricting or fixing the residual return to the instrument holders.
For the purposes of applying this condition, the Company shall not consider non-financial contracts with a holder of an instrument described
in paragraphs above that have contractual terms and conditions that are like the contractual terms and conditions of an equivalent contract
that might occur between a non-instrument holder and the issuing entity. If the entity cannot determine that this condition is met, it shall not
classify the instrument as an equity instrument.
Respectively, the Company does not hold any other instruments that would meet the criteria described above, as the Company only issued
equal shares which shall be redeemed upon the liquidation. Redemption of the shares as at liquidation date does not have any restrictions
as all the remaining funds shall be distributed to the Shareholders by principles applied in the paragraphs above. Finally, no other side
contracts, beside the share purchase agreements exist between the Company and the Shareholders.
The Company's shares meet the conditions listed above and all the shares are classified as equity, since all amount of the equity is subject
to repurchase that entity will make in the future – carrying amount attributable to single class of owners.
The redemption of the Company's shares is restricted. During the period of operation of the Company, the shares of the Company are held
by the Shareholders and will not be redeemed on demand. The shares will be redeemable at the Company's general meeting of Shareholders
by the decision of the meeting in proportion to all Shareholders. The Company's shares are also redeemed during the Company's liquidation
procedure.
The Company's shares may be redeemed during the Company's operations if:
- the Company has free funds that it does not intend to invest in;
- the decision of the General Meeting of Shareholders to reduce the issued capital of the Company and to pay out funds to the
Shareholders or the Company to acquire its own shares.
Upon payment of the Company's funds to the Shareholders, the Company's funds are paid to the Shareholders in accordance with the
procedure for reduction of the issued. After the reduction of issued capital Shareholders are paid an amount proportional to the par value of
their shares.
When the liquidation of the Company is carried out, the shares shall be redeemed by distribution during the liquidation procedure Company's
assets remaining after settlement with the Company's creditors to the Shareholders. The distribution of assets is performed by liquidator
of the Company, who may be appointed as the management Company.
In order to pay free funds to the Shareholders during the period of operation of the Company, in accordance with the relevant resolution of
the General Meeting of Shareholders, in accordance with the procedure, the Company may arrange and carry out the acquisition of its own
shares from the Shareholders.
II. Accounting Policy
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The total nominal value of the acquired shares together with the nominal value of shares already held may not be greater than 1/10 of the
issued capital. The Company ensures equal opportunities for all Shareholders to transfer to the Company of shares. The maximum and
minimum purchase price of the shares, considering the last calculated NAV is determined by the General Meeting of Shareholders. The term
within which the Company may acquire own Shares may not exceed 12 months. Resolution of the General Meeting of Shareholders
regarding the acquisition of shares may be cancelled by another decision of the General Meeting of Shareholders, if the market special
circumstances arise, such as the economic crisis, the deterioration of the Company's operating conditions, geopolitical shocks etc.
The current amount of equity represents the amount that would be paid to shareholders if redemption or repurchase is executed as of
reporting date. The value of the financial instruments is determined by incorporation of fair value of investment instruments where
discounted cash flow valuation techniques are used.
9. Financial assets
Initial recognition and measurement
Financial assets are recognized into accounting records when the Company grants or acquires the right to receive cash or other financial
assets. Planned transactions, guarantees and warranties obtained are not recognised as the Company’s assets until they comply with the
definition of financial assets. The Company initially recognises regular-way transactions in financial assets at fair value on the trade date,
which is the date on which the Company becomes a party to the contractual provisions of the instrument. Other financial assets are
recognised on the date on which they are originated.
Financial assets are classified into the following specified categories: financial asset at amortised cost, financial assets at fair value through
other comprehensive income, financial assets at fair value through profit or loss.
After initial recognition, financial assets are classified into the afore-mentioned categories based on the business model the Company
applies when managing its financial assets. The business model applied to the group of financial assets is determined at a level that reflects
how all groups of financial assets are managed together to achieve a particular business objective of the Company The intentions of the
Company’s management regarding separate instruments have no effect on the applied business model. The Group may apply more than
one business model to manage its financial assets.
The business model for managing financial assets is a matter of fact and not merely an assertion. It is typically observable through the
activities that the Company undertakes to achieve the objective of the business model. In determining the business model applicable for
managing financial assets, the Company justifies its decision not by a single factor or activity, but in view of all relevant evidence that is
available at the date of the assessment.
The Company recognises a financial asset in its statement of financial position when, and only when, the Company becomes party to the
contractual provisions of the instrument. The purchase or sale of financial assets is recognised and derecognised, as applicable, using trade
date accounting.
At initial recognition, the Company measures financial assets at fair value, except for trade receivables that do not have a significant
financing component. At initial recognition, the Company 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 that are directly attributable to the acquisition of the financial asset.
Transaction costs comprise all charges and commission that the Company would not have paid if it had not entered into an agreement on
the financial instrument.
Subsequent measurement
For the purpose of financial measurement financial assets are classified into the following categories:
- financial assets at amortised cost;
- financial assets at fair value through profit or loss;
- financial assets at fair value through comprehensive income.
Financial assets measured at amortised cost
The Company measures financial assets at amortised cost if both of the following conditions are met:
a) the financial asset is held within a business model with the objective to hold financial assets in order to collect contractual cash
flows;
II. Accounting Policy
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b) 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.
Interest rate revenue is recognized using the EIR and gains and losses are recognised in profit or loss when the asset is derecognised,
modified, or impaired.
As the business model for the Company‘s other financial assets (except investments assets measured at fair value through profit and loss
(next section)) is held to collect contractual cash flows and they are solely payments of principal and interest, other financial assets are
measured at amortised cost. They comprised trade and other receivables, cash, and cash equivalents.
Assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest are
measured at amortised cost. Interest income from these financial assets is calculated using the effective interest rate method and presented
as “other income” in the statement of comprehensive income. Any gain or loss arising on derecognition is recognised directly in profit or
loss. Impairment losses are presented as separate line item in the statement of comprehensive income.
The Group holds restricted cash to provide bank guarantees and to confirm that subsidiaries would perform their obligations under
agreements related with investing in solar and wind farm infrastructure (refer to Note 2). Restricted cash refers to cash and cash equivalents
balances held by the Group that are not available for general use by the Group. Restricted cash to provide financial guarantees is
subsequently measured at amortised cost and is subject to impairment.
For the year ended 31 December 2023, financial assets subsequently measured at amortised cost include restricted cash for guarantees,
prepayments, other receivables, cash and cash equivalents and long-term deposits.
Financial assets measured at fair value through profit and loss
The Company has three main components of the definition of an investment entity, therefore is an investment entity since it was established
and according to the IFRS 10 measures and evaluates the performance of substantially all its investments on a fair value basis (fair value
condition).
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. The mandatory
classification includes:
- financial assets that are held in a business model other than held to collect contractual cash flows, including those, that 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.
The Company’s solely goal is to collect pool of funds from different investors and to provide returns from capital appreciation. The business
model of the Company is to manage investment into subsidiaries together with loans granted to subsidiaries as one portfolio and evaluate
their performance on a combined fair value basis. Therefore, the portfolio is neither held to collect contractual cash flows nor held both to
collect contractual cash flows and to sell financial assets. Consequently, such portfolio of financial assets is measured at fair value through
profit or loss.
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 the statement of profit or loss.
IFRS 13 sets out a list of valuation approaches and techniques that can be used in order to determine fair value of a financial instrument.
Valuation approaches include market approach, income approach and combinations of approaches. Market approaches include valuations
techniques like transaction price paid for an identical or a similar instrument of an investee and comparable company valuation multiples
technique. Income approach includes valuation techniques like discounted cash flows method, dividend discount model, capitalisation
model. An example of combination of approaches is adjusted net asset method.
As at 31 December 2023 and 31 December 2022, the Company has investments in equity and debt instruments of subsidiaries and
associates that are recognized and subsequently measured at fair value. The fair value of investments is determined based on valuation
reports prepared by independent assessor that uses income and asset approaches. As at 31 December 2023 and 31 December 2022, the
Company also has other receivables that are measured at fair value which is determined using income approach and discounted cash flow
valuation method.
Loans and receivables are classified as current assets unless they have a maturity of more than 12 months after the statement of financial
position date. In the latter case, they are classified as non-current assets.
II. Accounting Policy
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Cash and cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash. The term of
such investments does not exceed three months and the risk of changes in value is very small. The carrying amount of this asset
approximates its fair value.
Derecognition of financial assets
Financial assets are derecognised when:
- the rights to cash flows of the asset have expired;
- the Company has retained the right to the cash flows but has undertaken to pay the full amount to a third party under the
assignment agreement within a short period of time;
- the Company has transferred its right to receive cash inflows from the assets or has transferred substantially all the risks and
rewards of ownership of the financial assets or has neither transferred nor retained substantially all the risks and rewards of
ownership but has transferred control of the assets.
When the Company transfers rights to the cash flows of an asset but neither transfers nor retains the risks and rewards of ownership of the
asset and does not transfer control of the asset, the asset is recognized to the extent that the Company is still a party to the asset.
Impairment of financial assets
Impairment requirements are applied to recognise lifetime expected credit losses for all financial instruments for which there have been
significant increases in credit risk since initial recognition. If the credit risk on a financial instrument has not increased significantly since
initial recognition, an entity measures the loss allowance for that financial instrument at an amount equal to 12-month expected credit
losses (ECL).
The Management Company constantly monitors the Company’s risk profile, indicators, and its compliance with intended limits.
For the Investment assets at fair value through profit or loss, other receivables, the Company applies the low credit risk simplification. At
reporting date, the Company evaluates whether the debt instruments are considered to have low credit risk using all reasonable and
supportable information that is available without undue cost and effort. The Company considers that there has been significant increase in
credit risk when contractual payments are more than 30 days past due. The Company’s Investment assets at fair value through profit or
loss comprise of acquired subsidiaries and associate’s bonds, granted loans to subsidiaries and associates.
The Company considers a financial asset in default when contractual payments are 90 days past due. However, in certain cases, the
Company may also consider a financial asset to be in default when internal or external information indicates that the Company is unlikely
to receive the outstanding contractual amounts in full before taking into account any credit enhancements held by the Company.
The Company assesses on a forward-looking basis the expected credit loss associated with its financial assets carried at amortised cost.
The impairment methodology applied depends on whether there has been a significant increase in credit risk.
The Group uses the following models to determine impairment losses:
- general model (basic);
- simplified model for trade receivables.
ECL is calculated using the “three-stage” model (the “general model”) for impairment:
Stage 1
Includes financial instruments that have not had a significant increase in credit risk since initial recognition or that have low credit risk at the
reporting date. For these assets, 12-month ECL are recognised and interest revenue is calculated on the gross carrying amount of the asset
(that is, without deduction for credit allowance). 12-month ECL are the expected credit losses that result from default events that are possible
within 12 months after the reporting date. It is not the expected cash shortfalls over the 12-month period but the entire credit loss on an
asset weighted by the probability that the loss will occur in the next 12 months.
Stage 2
Includes financial instruments that have had a significant increase in credit risk (SICR) since initial recognition (unless they have low credit
risk at the reporting date) but that do not have objective evidence of impairment. For these assets, lifetime ECL are recognised, but interest
revenue is still calculated on the gross carrying amount of the asset. Lifetime ECL are the expected credit losses that result from all possible
default events over the expected life of the financial instrument.
Stage 3
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Includes financial assets that have objective evidence of default at the reporting date. For these assets, life of ECL and interest income are
calculated on the net carrying amount. ECL for trade receivables which do not have a significant financial component is stated over all debt
period. The Group applies a simplified model for impairment of trade receivables.
For trade and other receivables, prepayments, the Group applies the simplified approach permitted by IFRS 9, which requires expected
lifetime losses to be recognised from initial recognition of the receivables.
Trade and other receivables, prepayments are classified either to Stage 2 or Stage 3. The Company’s cash and cash equivalents are held
with well-established credit institutions with a low credit risk profile and classified in Stage 1.
10. Financial liabilities
The Company recognises a financial liability when it first becomes a party to the contractual rights and obligations in the contract.
All financial liabilities are initially recognised at fair value, minus transaction costs that are directly attributable to issuing the financial liability.
The Company classifies all financial liabilities as subsequently measured at amortised cost using the effective interest method, except for
financial liabilities at fair value through profit or loss. Such liabilities are subsequently measured at fair value. The effective interest method
is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective
interest rate is the rate that exactly discounts estimated future cash payments through the expected life of the financial liability, or (where
appropriate) a shorter period, to the net carrying amount on initial recognition. Interest rate expenses are recognized using the EIR.
For the year ended 31 December 2023, financial liabilities subsequently measured at amortised cost include bonds issued, trade and other
payables. For the year ended 31 December 2023, the Group does not have financial liabilities measured at fair value through profit or loss.
Trade payables
Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers.
Accounts payable are classified as current liabilities if payment is due within one year or less (or in the normal operating cycle of the business
if longer). Financial liabilities included in trade payables are recognised initially at fair value and subsequently at amortised cost. The fair
value of a non-interest-bearing liability is its discounted repayment amount. If the due date of the liability is less than one year, discounting
is omitted.
Borrowings
Borrowings are recognised initially at fair value less directly attributable transaction costs. After initial recognition, borrowings are
subsequently measured at amortised cost using the effective interest method. Borrowings are classified as current liabilities unless the
Company has an unconditional right to defer settlement of the liability for at least 12 months after the end of the reporting year.
Derecognition of financial liabilities
A financial liability is derecognised when the obligation is discharged or cancelled or expires. When one existing financial liability is replaced
by another liability to the same lender but on different terms, or when the terms of an existing liability are substantially changed, such a
change is treated as a termination of the original liability and the creation of a new liability. The difference between the respective carrying
amounts is recognized in the income statement.
11. Methods and assumptions of asset and liability estimates, periodicity of
investment revaluation
The financial statements include the fair value of the Company's assets at the end of the reporting year.
The fair value hierarchy based on IFRS 13 is used to determine fair value in a more consistent and comparable manner. All assets and
liabilities whose fair value is determined or disclosed in the financial statements are classified according to a fair value hierarchy based on
the significant lowest level data used to determine fair value:
- Level 1 – the same assets or liabilities quoted (unadjusted prices in active markets);
- Level 2 – valuation techniques that directly or indirectly monitor the lowest level inputs that are significant in determining fair
value;
II. Accounting Policy
| 22
- Level 3 – valuation techniques that do not observe the lowest level inputs that are significant in determining fair value.
For assets and liabilities that are recognised in the financial statements on a recurring basis, 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.
As at 31 December 2023 and 31 December 2022 the carrying amount of the Company's assets and liabilities is close to their fair value –
Level 3 valuation methodology.
Investments in equity and debt instruments that are not traded on trading venues are valued based on the valuation carried out by an
independent business valuator entitled to practice this activity. Equity and debt instruments that are not traded on trading venues are valued
at least once per year provided that no material economic changes that require a new valuation have occurred.
The fair value of cash and cash equivalents in credit institutions is equal to their nominal value.
Methods, process, and inputs for valuation of financial assets
Fair value of the Company's financial assets is determined based on the valuation reports submitted by the independent business assessor
who has the right to carry out a valuation and meets the criteria laid down in the Company’s incorporation documents.
The fair value of the Company's investments in equity and debts instruments is measured by an aggregated basis. Fair value measurement
when an investment entity holds both debt and equity shares in investee – the Company is an investment entity as defined in IFRS 10.
Among other investments, it holds both a controlling interest in equity shares and a debt instrument issued by the subsidiaries. From a
business strategy perspective, and in a manner consistent with standard practice in its industry, The Company evaluates the performance
of its investments in subsidiaries and makes acquisition and disposal decisions on an aggregate basis rather than by considering the shares
and debt separately. When it holds both a controlling interest in the shares of a subsidiary and debt issued by that subsidiary, the Company
rarely, if ever, disposes of one instrument without also disposing of the other as this ensures that its return on investment is maximised.
Neither the debt nor the equity shares are traded in an active market.
In the specific circumstances described above (subsidiary interest and debt), measuring the interest in shares and debt as a single unit of
measurement would be appropriate. Such a transaction might involve Companying assets in a way in which market participants would enter
a transaction, if the unit of account in other IFRS does not prohibit that Companying. Because IFRS 9 does not specifically prohibit
measurement of the instruments on an aggregate basis, it is appropriate to consider how fair value would be maximised. In the
circumstances described, this may be through disposal of all the Company's interests in subsidiaries if this is how market participants would
transact.
Since the Group measures the fair value of its investments in a subsidiary on an aggregated basis, aggregated fair value is allocated to the
individual financial instruments. The allocation of the aggregated fair value of the subsidiary is allocated to the Group's investments in equity
and debt instruments issued by the subsidiaries and associated in the following manner:
- Independent assessors that prepare valuation reports based on which fair value of investments is determined calculate market
value of the business;
- Methods that are used to determine market value of subsidiaries and associates of the Company are as follows:
- Income Approach;
- Asset Approach.
- Valuation method of income approach is applied when the equity value is related to generation of future positive income streams.
The underlying assumption of income approach is that an investor in a business will not pay more than the present value of future
income streams that the business will generate. The present value of the business is assessed by discounting a series of future
expected income streams to present value or by capitalizing a single current, historic or projected level of annual income.
- Valuation method of asset approach is applied when the value of a business is determined not so much by the activities carried
out as by the assets held. Under this approach, the value of a business is determined by deducting liabilities from the company's
assets, where both assets and liabilities are adjusted to their market values.
- In the valuation report dated 29 December 2023 with the valuation of assets as of 31 October 2023, income approach was
selected by an independent appraiser as a valuation method for investments in subsidiaries Energy Solar Projekty sp. z o. o., PV
Energy Projects sp. z o. o., PL Sun sp. z o. o. and associates UAB Žaliosios investicijos and UAB Saulės energijos projektai. Income
approach and Discounted Cash Flow (DCF) method was selected by an independent appraiser for the valuation of investments in
mentioned subsidiaries and associates as development of projects of these entities were started, were in further development
stages and for some operating activities already started. Net asset approach was selected as a valuation method for investments
in subsidiaries UAB Atelda, UAB Rineila, UAB Nimela, UAB JTPG, UAB AEI Development and associates UAB Ekoelektra, UAB KNT
II. Accounting Policy
| 23
Holding, Zalais Speks SIA and Zala Elektriba SIA. Net asset approach was selected by an independent appraiser for the valuation
of investments in mentioned subsidiaries and associates as entities did not have significant operations or their projects were at
an early stage of development at valuation date. Valuation assumptions and sensitivity analysis for investments of the Group is
further disclosed in the Note 1 of the Notes to Consolidated Financial Statements;
- In the valuation report dated 23 December 2022 with the valuation of assets as of 31 October 2022, income approach was
selected by an independent appraiser as a valuation method for investments in subsidiaries Energy Solar Projekty sp. z o. o., PV
Energy Projects sp. z o. o., PL Sun sp. z o. o. and associates UAB Žaliosios investicijos and UAB Saulės energijos projektai. Income
approach and Discounted Cash Flow (DCF) method was selected by an independent appraiser for the valuation of investments in
mentioned subsidiaries and associates as development of projects of these entities were started, were in further development
stages and for some operating activities already started. Net asset approach was selected as a valuation method for investments
in subsidiaries UAB Atelda, UAB Rineila, UAB Nimela, UAB JTPG, UAB AEI Development and associates UAB Ekoelektra, UAB KNT
Holding and Zaļais Spēks SIA. Net asset approach was selected by an independent appraiser for the valuation of investments in
mentioned subsidiaries and associates as entities did not have significant operations or their projects were at an early stage of
development at valuation date. Valuation assumptions and sensitivity analysis for investments of the Group is further disclosed
in the Note 1 of the Notes to Consolidated Financial Statements;
Terms of the valuation methods, not the valuation methods itself, used in the valuation of assets as of 31 October 2023 and 31 October
2022 may differ.
Input information that is used to determine fair value of the Group‘s investments in subsidiaries and associate include financial and other
data of the subsidiaries and associates of the Company, financial forecasts of the Company’s operations, legal documents, other
information.
12. Significant accounting estimates and judgements
The preparation of consolidated financial statements in conformity with International Financial Reporting Standards requires management
to make certain assumptions and estimates that affect the reported amounts of assets, liabilities, income and expenses and the disclosure
of uncertainties. Future events may change the assumptions used in making the estimates. The effect of changes in such estimates will be
recognized in the financial statements when determined. Sensitivity analysis for investments of the Company is further disclosed in the
Note 1 of the Notes to Consolidated Financial Statements.
Investment entity and determination of fair value
Management has assessed that the Company has three main components of the definition of an investment entity, therefore is an
investment entity since it was established, regardless of its legal status. Based on the Management's judgement, the Company:
- Obtains funds from one or more investors for the purpose of providing those investor(s) with investment management services
(investment services condition);
- Commits to its investor(s) that its business purpose is to invest funds solely for returns from capital appreciation, investment
income, or both (business purpose condition);
- Measures and evaluates the performance of substantially all its investments on a fair value basis (fair value condition).
Management has assessed that it complies with investment services condition as the Company’s solely goal is to collect pool of funds from
different investors and to provide returns from capital appreciation.
Management has assessed that it complies with business purpose condition as the Company's solely goal is to collect pool of funds from
different investors and to provide returns from capital appreciation. Before the Company became a closed-end investment entity, investors
invested in the Company through the Company's sole Shareholder, which then provided collected funds to the Company via share capital
or lending commitments. As mentioned in the General part I, as investments to the renewables sector have shown an extensive growth
potential the decision was made to transform the Company into a separate closed-end collective investment entity to provide investors an
instrument to invest directly into renewable energy sector. As a closed-end investment entity, the Company has a prospectus which provides
details about shares (most important aspect – net asset value per share) offering to the public. In addition, investment company distributes
annual and quarterly reports to its investors, which contains information such as:
- Investment company data (net asset value, net asset value per share, net internal rate of return calculated from the start of fund,
number of investors, etc.);
- Key events of the period – mainly containing activities such as new investments, possible investing opportunities;
- Company‘s investments;
II. Accounting Policy
| 24
- Other information.
Management has assessed that it complies with fair value condition since the Company was established, regardless of its legal status, as
the fair value of the Company's investments is assessed once a year by reputable external business appraiser and the Company also
provides annual and quarterly reports to its investors and to the Bank of Lithuania which contains fair value information of all investments
made by the Company.
Additionally, The Company’s net assets are calculated in accordance with the NAV calculation methodology approved by the Bank of
Lithuania and the Management Company's NAV calculation procedures. The Company's Articles of Association stipulate that the fair value
of assets and liabilities is determined based on market-monitored transactions or market information. In the absence of observable market
transactions and market information related to assets and liabilities, fair value is determined using valuation techniques.
The determination of fair value in all cases pursues the same objective, which is to calculate the amount for which a counterparty may sell
assets or services or transfer a liability to each other under normal market conditions at the measurement date.
Term of operation of the Company is specified in the prospectus as 5 years with the possibility of extension for 2 additional years. Before
maturity all investments will be disposed as the Company will seize to exist. Therefore, this confirms that the Company does not plan to
hold its investments indefinitely.
Assumptions that were used to measure the Group’s investments in subsidiaries and associates at fair value and sensitivity analysis of fair
value of investments of the Group are presented in Note 1. The fair value of the Group's investments was determined based on valuation
reports prepared by an independent appraiser.
It is an accounting estimate made based on significant judgement by the Management of the Company. The Company carefully monitors
the market interest rates, therefore fixed interest rates that are determined in the bond and loan agreements the Company has concluded
with its subsidiaries, associates or external / third parties are set considering the interests rates that are applicable in the market at the time
of undertaking the liability.
Leases
The Group has assessed lease contracts in accordance with requirements of IFRS 16.
As at 31 December 2023, the Group has signed a lease contract of business premises. The Group has assessed that right-of-use assets
and lease liabilities will not be recognized in regards to signed lease contract as in accordance with requirements of IFRS 16 recognition
exemption is applied. Lease contract of business premises signed on 1 October 2022 was signed for a lease term ending 31 August 2023.
As lease term was less than 12 months, it can be concluded that a lease was a short-term lease and the Group elects to apply recognition
exemption in accordance with IFRS 16 requirements. An additional agreement was signed to extend the term of the lease from 1 September
2023 to 30 November 2023. The extension was a lease modification and considered to be a new short-term lease for which IFRS 16
recognition exemption is applied.
As at 31 December 2023, the Company has a contract on reimbursement of costs signed with the management company based on which
it compensates office maintenance costs in order to have available workspaces for its employees in the office of the Management Company.
The Company compensates such costs as rent, electricity, cleaning and other utility costs incurred in relation to maintaining workplaces in
the office. As the contract does not specify granting the right to control use of the asset and does not specify period, the Company concludes
that contract does not comply to definition of a lease. Reimbursable costs are recognized as office maintenance expenses in statement of
profit or loss.
13. Application of new and revised International Financial Reporting Standards
Standards issued and effective but not adopted
The following standards, amendments and interpretations are not applied for the reporting periods ending on 31 December 2023 and are
not relevant to the preparation of these financial statements. The following are standards that are not relevant to the Group and its investing
activities.
IFRS 17 Insurance Contracts
The standard is effective for annual periods beginning on or after 1 January 2023 with earlier application permitted, provided the entity also
applies IFRS 9 Financial Instruments on or before the date it first applies IFRS 17. This is a comprehensive new accounting standard for
insurance contracts, covering recognition and measurement, presentation and disclosure. IFRS 17 applies to all types of insurance contracts
issued, as well as to certain guarantees and financial instruments with discretional participation contracts.
II. Accounting Policy
| 25
The Group does not issue contracts in scope of IFRS 17; therefore its application does not have an impact on the Group’s financial
performance, financial position or cash flows.
IAS 1 Presentation of Financial Statements and IFRS Practice Statement 2: Disclosure of Accounting policies (Amendments)
The amendments are effective for annual periods beginning on or after 1 January 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.
Management has estimated that the amendments are not affecting the Group.
IAS 8 Accounting policies, Changes in Accounting Estimates and Errors: Definition of Accounting Estimates (Amendments)
The amendments become effective for annual reporting periods beginning on or after 1 January 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, if they do not result from a correction of prior period error. Also, the amendments clarify what changes in accounting estimates
are and how these differ from changes in accounting policies and corrections of errors.
Management has estimated that the amendments are not affecting the Group.
IAS 12 Income taxes: Deferred Tax related to Assets and Liabilities arising from a Single Transaction (Amendments)
The amendments are effective for annual periods beginning on or after 1 January 2023 with earlier application permitted. The amendments
narrow the scope of and provide further clarity on the initial recognition exception under IAS 12 and specify how companies should account
for deferred tax related to assets and liabilities arising from a single transaction, such as leases and decommissioning obligations. The
amendments clarify that where payments that settle a liability are deductible for tax purposes, it is a matter of judgement, having considered
the applicable tax law, whether such deductions are attributable for tax purposes to the liability or to the related asset component. 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.
Management has estimated that the amendments are not affecting the Group.
Standards issued but not yet effective and not early adopted
The following standards, amendments and interpretations are not yet applied for the reporting periods ending on 31 December 2023 and
are not relevant to the preparation of these financial statements. The following are standards that may be relevant to the Group. The Group
does not plan in advance to apply the amendments and clarifications to the standards listed below.
The following amendments are not expected to have a significant impact on the Company's financial statements.
IAS 1 Presentation of Financial Statements: Classification of Liabilities as Current or Non-current (Amendments)
The amendments are effective for annual reporting periods beginning on or after 1 January 2024, with earlier application permitted, and will
need to be applied retrospectively in accordance with IAS 8. The objective of the amendments is to clarify the principles in IAS 1 for the
classification of liabilities as either current or non-current. The amendments clarify the meaning of a right to defer settlement, the
requirement for this right to exist at the end of the reporting period, that management intent does not affect current or non-current
classification, that options by the counterparty that could result in settlement by the transfer of the entity’s own equity instruments do not
affect current or non-current classification. Also, the amendments specify that only covenants with which an entity must comply on or
before the reporting date will affect a liability’s classification. Additional disclosures are also required for non-current liabilities arising from
loan arrangements that are subject to covenants to be complied with within twelve months after the reporting period.
Management has estimated that the amendments will not affect the Group.
IFRS 16 Leases: Lease Liability in a Sale and Leaseback (Amendments)
The amendments are effective for annual reporting periods beginning on or after 1 January 2024, with earlier application permitted. The
amendments are intended to improve the requirements that a seller-lessee uses in measuring the lease liability arising in a sale and
leaseback transaction in IFRS 16, while it does not change the accounting for leases unrelated to sale and leaseback transactions. In
particular, the seller-lessee determines ‘lease payments’ or ‘revised lease payments’ in such a way that the seller-lessee would not recognise
any amount of the gain or loss that relates to the right of use it retains. Applying these requirements does not prevent the seller-lessee from
recognising, in profit or loss, any gain or loss relating to the partial or full termination of a lease. A seller-lessee applies the amendment
II. Accounting Policy
| 26
retrospectively in accordance with IAS 8 to sale and leaseback transactions entered into after the date of initial application, being the
beginning of the annual reporting period in which an entity first applied IFRS 16.
Management has estimated that the amendments will not affect the Group.
IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments Disclosure - Supplier Finance Arrangements (Amendments)
The amendments are effective for annual reporting periods beginning on or after 1 January 2024, with earlier application permitted. The
amendments supplement requirements already in IFRS and require an entity to disclose the terms and conditions of supplier finance
arrangements. Additionally, entities are required to disclose at the beginning and end of reporting period the carrying amounts of supplier
finance arrangement financial liabilities and the line items in which those liabilities are presented as well as the carrying amounts of financial
liabilities and line items, for which the finance providers have already settled the corresponding trade payables. Entities should also disclose
the type and effect of non-cash changes in the carrying amounts of supplier finance arrangement financial liabilities, which prevent the
carrying amounts of the financial liabilities from being comparable. Furthermore, the amendments require an entity to disclose at the
beginning and end of the reporting period the range of payment due dates for financial liabilities owed to the finance providers and for
comparable trade payables that are not part of those arrangements. The amendments have not yet been endorsed by the EU.
Management has estimated that the amendments will not affect the Group.
IAS 21 The Effects of Changes in Foreign Exchange Rates: Lack of Exchangeability (Amendments)
The amendments are effective for annual reporting periods beginning on or after 1 January 2025, with earlier application permitted. The
amendments specify how an entity should assess whether a currency is exchangeable and how it should determine a spot exchange rate
when exchangeability is lacking. A currency is considered to be exchangeable into another currency when an entity is able to obtain the
other currency within a time frame that allows for a normal administrative delay and through a market or exchange mechanism in which an
exchange transaction would create enforceable rights and obligations. If a currency is not exchangeable into another currency, an entity is
required to estimate the spot exchange rate at the measurement date. An entity’s objective in estimating the spot exchange rate is to reflect
the rate at which an orderly exchange transaction would take place at the measurement date between market participants under prevailing
economic conditions. The amendments note that an entity can use an observable exchange rate without adjustment or another estimation
technique. The amendments have not yet been endorsed by the EU.
Management has estimated that the amendments will not affect the Group.
Amendment in IFRS 10 Consolidated Financial Statements and IAS 28 Investments in Associates and Joint Ventures: Sale or Contribution
of Assets between an Investor and its Associate or Joint Venture
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.
Management has estimated that the amendments will not affect the Group.
| 27
III. Notes
III. Notes
| 28
1. Investment assets at fair value through profit or loss
The Company meets the definition of an investment entity, therefore it does not consolidate its subsidiaries and associates (except project
management and consultation entity UAB AEI Development) but recognizes them as investments at fair value through profit or loss. Further,
the Company holds both controlling interest in equity shares and debt instruments issued by the subsidiaries and associates. From a
business strategy perspective, the Company rarely, if ever, would enter a transaction to sell one financial asset, e.g., equity shares, without
the other, e.g., debt instrument. In addition, neither the debt nor the equity shares are traded in an active market. The Company's investments
in loans granted is not a Company's separate substantial operating activity but are granted for the sole purpose of capital appreciation
purposes in accordance with IFRS 10. Therefore, the Company aggregates its investments in subsidiaries and associates as a one financial
asset in order to best present the fair value of the investment as a whole. The Group’s and Company's aggregated financial assets at a fair
value are presented in the table below:
Group and Company
31 December 2023
31 December 2022
Energy Solar Projekty sp. z o. o.
Initial investment in shares
1
1
Long term loan granted
14 230
14 950
Interest on loan granted
413
3 209
Fair value adjustment on investment in shares
9 289
5 354
Total investment in equity and debt instrument
23 933
23 514
PV Energy Projects sp. z o. o.
Initial investment in shares
1
1
Long term loan granted
34 242
44 024
Interest on loan granted
4 005
2 501
Fair value adjustment on investment in shares
4 693
2 752
Total investment in equity and debt instrument
42 941
49 278
PL Sun sp. z o. o.
Initial investment in shares
3
3
Long term loan granted
45 074
13 230
Interest on loan granted
3 790
790
Fair value adjustment on investment in shares
4 046
(1 257)
Total investment in equity and debt instrument
52 913
12 766
UAB Atelda
Initial investment in shares
3
3
Bonds principal acquired
117
-
Bonds interest accrued
11
-
Fair value adjustment on investment
(131)
(3)
Total investment in equity and debt instrument
-
-
UAB Nimela
Initial investment in shares
4
4
Bonds principal acquired
913
3 010
Bonds interest accrued
160
167
Fair value adjustment on investment
(566)
(187)
Total investment in equity and debt instrument
511
2 994
UAB Rineila
Initial investment in shares
3
3
Bonds principal acquired
36
-
Bonds interest accrued
4
-
Fair value adjustment on investment
(43)
(3)
Total investment in equity and debt instrument
-
-
III. Notes
| 29
Group and Company
(continued)
31 December 2023
31 December 2022
UAB JTPG
Initial investment in shares
3
3
Bonds principal acquired
2 334
-
Bonds interest accrued
120
-
Fair value adjustment on investment
(130)
11
Total investment in equity and debt instrument
2 327
14
UAB Pakruojo vėjas
Initial investment in shares
-
-
Total investment in equity and debt instrument
-
-
Total investment in Subsidiaries
122 625
88 566
UAB Saulės energijos projektai
Initial investment in shares
1 504
1 504
Fair value adjustment on investment in shares
(1 160)
(1 012)
Total investment in equity and debt instrument
344
492
UAB Žaliosios investicijos
Initial investment in shares
7 210
7 210
Bonds principal acquired
23 650
22 775
Bonds interest accrued
1 447
41
Fair value adjustments on investment
13 721
22 920
Total investment in equity and debt instrument
46 028
52 946
UAB Ekoelektra
Initial investment in shares
1
1
Bonds principal acquired
2 927
331
Bonds interest accrued
353
34
Fair value adjustments on investment
(576)
(325)
Total investment in equity and debt instrument
2 705
41
Zalais Speks SIA
Initial investment in shares
1
1
Long term loan granted
428
203
Interest on loan granted
50
17
Fair value adjustments on investment
(112)
(159)
Total investment in equity and debt instrument
367
62
UAB KNT Holding
Initial investment in shares
1
1
Bonds principal acquired
6 515
2 991
Bonds interest accrued
486
66
Fair value adjustment on investment
(697)
(257)
Total investment in equity and debt instrument
6 305
2 801
Zala Elektriba SIA
Initial investment in shares
1
-
Long term loan granted
1 786
-
Interest on loan granted
154
-
Fair value adjustment on investment
(255)
-
Total investment in equity and debt instrument
1 686
-
Total investment in Associates
57 435
56 342
Total investment assets at fair value through profit or loss
180 060
144 908
III. Notes
| 30
The valuation of investments in subsidiaries and associates follows an asset-based approach method until projects progress to the "fully
permitted" status, leveraging management's expertise in renewable project development. The Company engages in investments during the
initial stages of project development. Given the typical duration of project development (2-4 years), and potential regulatory impacts on final
project layouts, management employs an asset-based valuation method until projects attain the "fully permitted" status, where all
uncertainties regarding factors such as installed capacity, final size, and technology mix selection (e.g., solar, wind, batteries, or hybrid
solutions) are mitigated. That way aligning with strategic objectives and reflecting the evaluation of inherent project value. Projects are
undertaken by UAB Ekoelektra, UAB KNT Holding, UAB JTPG, UAB Nimela, Zalais Speks SIA, Zala Elektriba SIA, and UAB Pakruojo vėjas are
at development stage.
The "fully permitted" stage denotes a crucial shift from planning to execution, facilitated by the acquisition of all permits, approvals, and
environmental assessments, that enable the commencement of physical construction. As projects progress to this stage, their market value
significantly rises, necessitating valuation through discounted cash flow methods. Projects overseen by UAB Žaliosios investicijos, PL SUN,
and PV Energy projects are currently in the construction phase.
Subsequently, the next significant project milestone, the commercial operation date (COD), signifies the receipt of construction completion
and the final permit to produce electricity, further increasing the project's fair value as per management expectations. The Energy Solar
Projekty sp.z o.o.o and UAB Saulės energijos projektai are at operation stage.
As at 31 December 2023, management exercised significant judgment regarding the treatment of management fees payable to the
Management company in assessing the fair values of subsidiaries and associates. Throughout the period spanning 2022 to 2023, the
Management company actively cultivated its investment portfolio, engaging in the acquisition of new projects, attracting investors, securing
external financing, structuring projects, and selecting asset managers. The progression of the investment portfolio prompted management
to acknowledge that, as of 31 December 2022, the payment of management fees to the Management company had an impact on the fair
value of subsidiaries and associates, primarily due to ongoing investment activities and portfolio development.
By the conclusion of December 2023, the investment portfolio had achieved full formation, with no new projects or financing initiatives in
progress or anticipated. Management shifted its focus to monitoring existing projects and their potential implementation, marking a
transition from the investment phase to the management, supervision, or implementation phase. Recognizing this shift, management
conducted a comprehensive assessment and concluded that the payment of management fees to the Management company no longer
significantly impacts the fair value of subsidiaries and associates compared to the earlier portfolio formation and development phase.
Moreover, this decision aligns with the practices of other market participants and meets the expectations of investors and stakeholders.
Movements in the fair value of the Group’s and Company's investments in equity and debt instruments of subsidiaries and associates for
the financial year ended 31 December 2023 are presented in the table below:
Group and Company
Fair value as at
1 January
2023
Acquisition of
asset (+) / Sale
of asset (-)
Interest paid
Increase
(decrease) in
fair value of
assets
Fair value as at
31 December
2023
Investments in equity and debt instruments of subsidiaries:
Energy Solar Projekty sp. z o. o.
23 514
(721)
(4 063)
5 203
23 933
PV Energy Projects sp. z o. o.
49 278
(9 783)
(2 027)
5 473
42 941
PL Sun sp. z o. o.
12 766
31 844
-
8 303
52 913
UAB Atelda
-
117
-
(117)
-
UAB Nimela
2 994
(2 097)
(370)
(16)
511
UAB Rineila
-
36
-
(36)
-
UAB JTPG
14
2 334
-
(21)
2 327
UAB Pakruojo vėjas
-
-
-
-
-
Total
88 566
21 730
(6 460)
18 789
122 625
Investments in equity and debt instruments of associates:
UAB Saulės energijos projektai
492
-
-
(148)
344
UAB Žaliosios investicijos
52 946
875
-
(7 793)
46 028
UAB Ekoelektra
41
2 596
-
68
2 705
Zalais Speks SIA
62
225
-
80
367
UAB KNT Holding
2 801
3 525
-
(21)
6 305
Zala Elektriba SIA
-
1 787
-
(101)
1 686
Total
56 342
9 008
-
(7 915)
57 435
III. Notes
| 31
Total net amount of EUR 10 874 thousand of increase in fair value of assets refers to unrealised gains for the year ended 31 December 2023
which are recognized in the Statement of Profit or Loss and Other Comprehensive Income under category “Net gain on investments in equity
and debt instruments at fair value through profit or loss” (refer to Note 13). No gains or losses were recognized on sale of shares of
subsidiaries during year ended 31 December 2023.
Movements in the fair value of the Group’s and Company's investments in equity and debt instruments of subsidiaries and associates for
the financial year ended 31 December 2022 are presented in the table below:
Group and Company
Fair value as at
Acquisition of
Increase
Fair value as at
1 January
asset (+) / Sale
Interest paid
(decrease) in
31 December
2022
of asset (-)
fair value of
2022
assets
Investments in equity and debt instruments of subsidiaries:
Energy Solar Projekty sp. z o. o.
26 669
-
(939)
(2 216)
23 514
PV Energy Projects sp. z o. o.
13 776
36 659
-
(1 157)
49 278
PL Sun sp. z o. o.
-
13 233
-
(467)
12 766
UAB Atelda
-
3
-
(3)
-
UAB Nimela
-
3 014
-
(20)
2 994
UAB Rineila
-
3
-
(3)
-
UAB JTPG
-
3
-
11
14
Total
40 445
52 915
(939)
(3 855)
88 566
Investments in equity and debt instruments of associates:
UAB Saulės energijos projektai
998
-
-
(506)
492
UAB Žaliosios investicijos
24 728
5 360
(1 591)
24 449
52 946
UAB Ekoelektra
510
(263)
(39)
(167)
41
Zalais Speks SIA
-
204
-
(142)
62
UAB KNT Holding
-
2 992
(227)
36
2 801
Total
26 236
8 293
(1 857)
23 670
56 342
Total net amount of EUR 19 815 thousand of increase in fair value of assets refers to unrealised gains for the year ended 31 December 2022
which are recognized in the Statement of Profit or Loss and Other Comprehensive Income under category “Net gain on investments in equity
and debt instruments at fair value through profit or loss” (refer to Note 13) and “Fair value adjustment on investment in deconsolidated
entity". No gains or losses were recognized on sale of shares of subsidiaries during year ended 31 December 2022.
On 30 March 2023, the Group purchased 50% of shares of a new associate Zala Elektriba SIA for the purchase value of EUR 1 400.
Investment in shares of associate is measured at fair value through profit and loss. As at 31 December 2023, the fair value of shares, based
on the valuation reports of an independent appraiser, is EUR 1 due to fair value adjustment on loan and shares.
On 17 July 2023, the Group sold 10,04% of shares in subsidiary UAB JTPG to an external party for a purchase price of EUR 251. As at 31
December 2023, the fair value of shares, based on the valuation reports of an independent appraiser, is EUR 1 due to fair value adjustment
on bonds and shares.
On 28 November 2023, the Group acquired 100% of shares in subsidiary UAB Pakruojo vėjas. As at 31 December 2023, the Group's
Management assumes that the fair value of the acquired shares and the fair value of the Group's financial liabilities resulting from the
transaction should be EUR 0. This correlation is a result of the milestone-based structure of payments for the shares. As of December 31,
2023, the project has not reached the stage indicated in the SPA milestone, where corresponding payments should be executed.
As at 31 December 2023 and 31 December 2022, fair value of the investments in equity and debt instruments of subsidiaries and associates
of Group (acquired until valuation date) is accounted for based on the valuation reports of an independent appraiser. Fair value of
investments as at 31 December 2023 is accounted for based on the report dated 29 December 2023 (with the valuation of assets as of 31
October 2023) and fair value of investments as at 31 December 2022 is accounted based on report dated 23 December 2022 (with the
valuation of assets as of 31 October 2022).
The Management concluded that from the date of valuation of investment (31 October 2023) until the end of reporting year (31 December
2023) there were no circumstances or events which could have significant impact on the fair value of investment. Therefore, fair value of
the investments in equity and debt instruments of subsidiaries and associates of the Group (excluding UAB Pakruojo Vėjas that was acquired
after valuation date) as of 31 December 2023 is accounted at the values from the reports of an independent appraiser.
III. Notes
| 32
For the valuation of assets as of 31 October 2023, income approach was selected by an independent appraiser as a valuation method for
investments in subsidiaries Energy Solar Projekty sp. z o. o., PV Energy Projects sp. z o. o., PL Sun sp. z o. o. and associates UAB Žaliosios
investicijos and UAB Saulės energijos projektai, as development of projects of these entities was started, was in further development stages
and for some operating activities already started. Net assets approach was selected as a valuation method for investments in subsidiaries
UAB Atelda, UAB Rineila, UAB Nimela, UAB JTPG, UAB AEI Development and associates UAB Ekoelektra, UAB KNT Holding, Zalais Speks SIA
and Zala Elektriba SIA, as entities did not have significant operations, or their projects were at an early stage of development at valuation
date.
As at 31 December 2023, value of investments in shares of subsidiary Energy Solar Projekty sp. z o. o. have increased compared to value
as at 31 October 2022. Due to smaller net debt at 31 October 2023 as compared to 31 October 2022, the equity value of the company has
increased, therefore an increase in subsidiary's Energy Solar Projekty sp. z o. o. shares value was noted.
As at 31 December 2023, value of investments in shares of subsidiary PV Energy Projects sp. z o. o. have increased compared to value as
at 31 October 2022. As at valuation date of 31 October 2023, the first tranche of the project was already finished and started electricity
generation. Four under tranches were fully permitted and at ready-to build status with constructions already contracted and underway. This
led to an increased equity value at 31 October 2023 as compared to 31 October 2022, therefore an increase in subsidiary's PV Energy
Projects sp. z o. o. shares value was noted.
As at 31 December 2023, value of investments in shares of subsidiary PL Sun sp. z o. o. have increased compared to value as at 31 October
2022. As at valuation date of 31 October 2023, the three tranches of the project are under construction and are expected to start electricity
generation during 2024 and 2025. Two remaining tranches were fully permitted and at ready-to build status. As at valuation date of 31
October 2022, only some projects had fully obtained construction permits with constructions not started yet, while remaining projects were
yet to obtain all necessary permits. This led to an increased equity value at 31 October 2023 as compared to 31 October 2022, therefore an
increase in subsidiary's PL Sun sp. z o. o. shares value was noted.
As at 31 December 2023, value of investments in shares of associate UAB Žaliosios Investicijos have decreased compared to value as at
31 October 2022. Majority of wind turbines were already commissioned and started electricity generation in 2023, however, due to increased
financial liabilities at 31 October 2023 as compared to 31 October 2022, the equity value of the company has decreased, therefore a decrease
in associate’s UAB Žaliosios Investicijos shares value was noted.
Based on the Group's asset valuation report of an independent appraiser, shares of subsidiaries UAB Nimela, UAB JTPG as well as shares
of associate's UAB KNT Holding, UAB Ekoelektra, Zalais Speks SIA and Zala Elektriba SIA were valued as EUR 1 each, as companies did not
have any real estate, shares, or any other marketable asset and were in early stage of development. Shares of subsidiaries UAB Atelda and
UAB Rineila were valued as EUR 1 each, as according to Management there is less than 50% probability that the developments will be
successful and the projects are expected to be cancelled.
Fair value of investments in equity and debt instruments of subsidiaries and associates depends on the assessment of the assets that are
managed by the entities themselves. As required by IFRS 13, the fair value of the investment shall represent the most accurate fair value of
an investment to the reporting date.
The valuation of shares owned by the Company was based on the following valuation assumptions as at 31 December 2023:
- Energy Solar Projekty sp. z o. o. valuation method – income approach; discount rate – 10.28% (as at 31 October 2022 – valuation
method – income approach, discount rate – 9.64%);
- PV Energy Projects sp. z o. o. valuation method – income approach; discount rate – 10.24% (as at 31 October 2022 – valuation
method – income approach, discount rate – 10.96%);
- UAB Saulės energijos projektai valuation method – income approach; discount rate – 10,61% (as at 31 October 2022 – valuation
method – income approach; discount rate – 9.39%);
- PL Sun sp. z o. o. valuation method – income approach; discount rate – 12.68% (as at 31 October 2022 – valuation method –
income approach, discount rate – 11.72%);
- UAB Žaliosios investicijos valuation method – income approach; discount rate – 9.77%. % (as at 31 October 2022 – valuation
method – income approach, discount rate – 9.69%).
Sensitivity analysis of value of shares as at 31 December 2023 is as follows:
Base
-100bps
+100bps
WACC
WACC
Energy Solar Projekty sp. z o. o. Shares Value – Income Approach (EUR)
9 495 000
12 536 000
6 314 000
PV Energy Projects Sp. z o. o. Shares Value – Income Approach (EUR)
5 187 000
9 445 000
1 156 000
PL Sun sp. z o. o. Shares Value - Income Approach (EUR)
4 850 000
10 056 000
-
UAB Saulės energijos projektai Shares Value – Income approach (EUR)
479 000
506 000
430 000
UAB Žaliosios investicijos Shares Value - Income Approach (EUR)
23 508 000
30 414 000
16 182 000
III. Notes
| 33
The valuation of shares owned by the Company was based on the following valuation assumptions as at 31 December 2022:
- Energy Solar Projekty sp. z o. o. valuation method – income approach; discount rate – 9.64% (as at 31 October 2021 – valuation
method – asset approach, when assessing the companies managed by the Company, income approach methods were used,
discount rates – 3.91% – 6.09%);
- PV Energy Projects sp. z o. o. valuation method – income approach; discount rate – 10.96% (as at 31 October 2021 – valuation
method – asset approach, when assessing the companies managed by the company, income approach methods were used,
discount rates – 6.09%);
- UAB Saulės energijos projektai valuation method – income approach; discount rate – 9.39% (as at 31 October 2021 – valuation
method – income approach; discount rate – 5.86%; capitalization rate – 5.86%);
- PL Sun sp. z o. o. valuation method – income approach; discount rate – 11.72%;
- UAB Žaliosios investicijos valuation method – income approach; discount rate – 9.69%.
Sensitivity analysis of value of shares as at 31 December 2022 is as follows:
Base
-100bps
+100bps
WACC
WACC
Energy Solar Projekty sp. z o. o. Shares Value – Income Approach (EUR)
5 570 000
8 042 000
3 097 000
PV Energy Projects Sp. z o. o. Shares Value – Income Approach (EUR)
3 354 000
6 560 000
148 000
PL Sun sp. z o. o. Shares Value - Income Approach (EUR)
-
1 251 000
-
UAB Saulės energijos projektai Shares Value – Income approach (EUR)
492 000
529 000
454 000
UAB Žaliosios investicijos Shares Value - Income Approach (EUR)
27 017 000
34 798 000
19 236 000
As at 31 December 2023 two of the subsidiaries Energy Solar Projekty sp. z o. o. and PV Energy projects sp. z o. o. have a loan with certain
restrictions (as at 31 December 2022 – one subsidiary Energy Solar Projekty sp. z o. o.) that need to be met before transferring funds to the
Investment entity for Historic Average debt service coverage ratio (ADSCR), Prospective ADSCR, Loan Life Coverage Ratio (LLCR), full
repayment of Debt Service due, the amount standing to the credit of the Debt Service Reserve account and of the Maintenance Reserve
Account.
During the reporting year ended on the 31 December 2023 and the year ended 31 December 2022, the Group did not provide financial support
to unconsolidated structured entities and has no intention of providing financial or other support.
Bonds acquired
On 18 November 2022 the Group has signed amendment to the bond subscription agreement with UAB Žaliosios investicijos (initially signed
on 22 November 2021) and agreed to subscribe and purchase an amount of total 30 000 000 units of non-convertible bonds with nominal
value of EUR 1 per each. As at 31 December 2023 the Group has purchased 29 268 750 units of the subscribed bonds with the total value
of EUR 29 269 thousand (as at 31 December 2022 – 28 393 750 units). The redemption date of the bond shall be 31 December 2052. On
22 December 2022 the Group and UAB Žaliosios investicijos have signed agreement on set off of counterclaims, based on which receivable
amount of EUR 7 209 thousand in regard to redemption of bonds were set-off with payable in regards to investment in shares of UAB
Žaliosios investicijos after decision of shareholders to increase share capital. Receivable amount of EUR 7 209 thousand consists of EUR
5 619 thousand of principal amount of redeemed bonds and EUR 1 590 thousand of interest.
On 14 February 2022 the Group signed bond agreement with UAB Ekoelektra under which the Group agreed to subscribe and purchase total
amount of 3 000 000 units of non-convertible bonds with nominal value of EUR 1 per each. On 16 November 2023 the Group signed an
amendment to the bond agreement under which the Group agreed to subscribe and purchase total amount of 6 000 000 units of non-
convertible bonds with nominal value of EUR 1 per each. As at 31 December 2023 the Group has purchased 2 927 420 units of the subscribed
bonds with the total value of EUR 2 927 thousand (as at 31 December 2022 – 331 000 units). Based on the agreement the Group has the
right to acquire the rest of the bonds until 31 March 2026. Bonds acquired are issued with interest rate of 12% and maturity date of 5 January
2028.
On 18 July 2022 the Group signed bond agreement with UAB Nimela under which the Group agreed to subscribe and purchase total amount
of 30 000 000 units of bonds with issue price of EUR 1 each. As at 31 December 2023 the Group has purchased 3 033 100 units of bonds
with the total value of EUR 3 033 thousand (as at 31 December 2022 – 3 010 000 units). During the year ended 31 December 2023 UAB
Nimela made a partial bonds redemption in the amount of EUR 2 120 thousand and returned EUR 370 thousand of accrued interest. Based
on the agreement the Group has the right to acquire the rest of the bonds until 5 February 2026. Bonds acquired are issued with interest
rate of 12% and maturity date of 5 February 2026.
On 27 October 2022 the Group signed bond agreement with UAB KNT Holding under which the Group agreed to subscribe and purchase
total amount of 20 000 000 units of bonds with issue price of EUR 1 each. As at 31 December 2023 the Group has purchased 6 514 966
units of the subscribed bonds with the total value of EUR 6 515 thousand (as at 31 December 2022 – 2 990 466 units). Based on the
agreement the Group has the right to acquire the rest of the bonds until 31 March 2026. Bonds acquired are issued with interest rate of 12%
III. Notes
| 34
and maturity date of 5 January 2028. As at 31 December 2022, initial investment in bonds in the amount of EUR 2 991 thousand is done
based on the agreement on mutual commitment netting dated 27 October 2022 and signed between the Group and UAB KNT Holding. In
accordance with the agreement on mutual commitment netting, payable amount of EUR 2 991 thousand for the investment in bonds under
new bond agreement is netted with receivable amount from UAB KNT Holding in amount of EUR 5 868 thousand based on bond agreement
dated 11 April 2022 and outstanding difference is transferred in cash by UAB KNT Holding to the Group.
On 5 January 2023 the Group signed bond agreement with UAB Atelda and acquired a total amount of 116 300 bonds with the issue price
of EUR 1 each during reporting year. Bonds acquired are issued with interest rate of 14% and maturity date of 5 February 2026. The Group
subscribed to a total amount of 3 000 000 bonds and based on the agreement has the right to acquire the rest of the bonds until
5 February 2026. Based on the valuation reports of an independent appraiser, the fair value of bonds is EUR 0 as the project has less than
50% chance of reaching a final development stage and the Group’s Management considers the project to be cancelled.
On 25 January 2023 the Group signed bond agreement with UAB JTPG and acquired a total amount of 4 588 608 bonds with the issue price
of EUR 1 each during reporting year. On 29 November 2023 and 22 December 2023 the Group and UAB JTPG have signed agreements on
set off of counterclaims, based on which receivable amount of EUR 2 255 thousand in regard to redemption of bonds were set-off with
payable in regards to transfer of financial guarantee and related bank commissions. Bonds acquired are issued with interest rate of 14%
and maturity date of 5 February 2026. The Group subscribed to a total amount of 12 000 000 bonds and based on the agreement has the
right to acquire the rest of the bonds until 5 February 2026.
On 6 March 2023 the Group signed bond agreement with UAB Rineila and acquired a total amount of 35 800 bonds with the issue price of
EUR 1 each during reporting year. Bonds acquired are issued with interest rate of 14% and maturity date of 5 February 2026. The Group
subscribed to a total amount of 10 000 000 bonds and based on the agreement has the right to acquire the rest of the bonds until
6 March 2024. Based on the valuation reports of an independent appraiser, the fair value of bonds is EUR 0 as the project has less than 50%
chance of reaching a final development stage and the Group’s Management considers the project to be cancelled.
According to the agreements the bonds may be subordinated with regards to the bank when associated enters into financing agreement.
In this case the Group shall provide the consent in writing for such subordination and the redemption of the bonds or payment of interest
shall only be permitted with prior consent from the bank or when all obligations to the bank had been fully fulfilled.
The carrying amount, accrued interest and fair values of bonds acquired as at 31 December 2023 and as at 31 December 2022 are provided
in the table below.
Group and Company
As at 31 December 2023
As at 31 December 2022
Bonds
Contractual
Maturity
Carrying
Fair value of
Carrying
Fair value of
Borrower
agreement
interest
date
amount and
bonds and
amount and
bonds and
date
rate
accrued
interest
accrued
interest
interest
accrued
interest
accrued
UAB Žaliosios investicijos
2021-11-22
6,00%
2052-12-31
25 097
22 579
22 816
18 785
UAB Ekoelektra
2022-02-14
12,00%
2028-01-05
3 280
2 705
365
41
UAB KNT Holding
2022-10-27
12,00%
2028-01-05
7 001
6 305
3 057
2 801
UAB Nimela
2022-07-18
12,00%
2026-02-05
1 073
511
3 177
2 994
UAB Atelda
2023-01-05
14,00%
2026-02-05
128
-
-
-
UAB JTPG
2023-01-25
14,00%
2026-02-05
2 454
2 327
-
-
UAB Rineila
2023-03-06
14,00%
2026-02-05
40
-
-
-
If differences between interest rates specified in the bond agreements and market rates exists, they are accounted for as a fair value
adjustment on bonds based on the valuation reports prepared by independent assessor.
Group and Company
Borrower
31 December 2023
31 December 2022
Bonds principal acquired of UAB Žaliosios investicijos
23 650
22 775
Bonds interest accrued of UAB Žaliosios investicijos
1 447
41
Fair value adjustments on bonds acquired of UAB Žaliosios investicijos
(2 518)
(4 031)
Bonds principal acquired of UAB Ekoelektra
2 927
331
Bonds interest accrued of UAB Ekoelektra
353
34
Fair value adjustments on bonds acquired of UAB Ekoelektra
(575)
(324)
III. Notes
| 35
Borrower
31 December 2023
31 December 2022
Bonds principal acquired of UAB KNT Holding
6 515
2 991
Bonds interest accrued of UAB KNT Holding
486
66
Fair value adjustments on bonds acquired of UAB KNT Holding
(696)
(256)
Bonds principal acquired of UAB Nimela
913
3 010
Bonds interest accrued of UAB Nimela
160
167
Fair value adjustments on bonds acquired of UAB Nimela
(562)
(183)
Bonds principal acquired of UAB Atelda
117
-
Bonds interest accrued of UAB Atelda
11
-
Fair value adjustments on bonds acquired of UAB Atelda
(128)
-
Bonds principal acquired of UAB JTPG
2 334
-
Bonds interest accrued of UAB JTPG
120
-
Fair value adjustments on bonds acquired of UAB JTPG
(127)
-
Bonds principal acquired of UAB Rineila
36
-
Bonds interest accrued of UAB Rineila
4
-
Fair value adjustments on bonds acquired of UAB Rineila
(40)
-
Total bonds and interest accrued
34 427
24 621
Loans granted
The outstanding principal amount, accrued interest and fair value adjustments on loans provided to the subsidiaries and associates as at
31 December 2023 and 31 December 2022 are presented in the table below:
Group and Company
Borrower
31 December 2023
31 December 2022
Long term loan granted to Energy Solar Projekty sp. z o. o.
14 230
14 950
Interest on loan granted to Energy Solar Projekty sp. z o. o.
413
3 209
Long term loan granted to PV Energy Projects sp. z o. o.
34 242
44 024
Interest on loan granted to PV Energy Projects sp. z o. o.
4 005
2 501
Long term loan granted to PL Sun sp. z o. o.
45 074
13 230
Interest on loan granted to PL Sun sp. z o. o.
3 790
790
Fair value adjustments on loan granted to PL Sun sp. z o. o.
-
(1 254)
Long term loan granted to Zalais Speks SIA
428
203
Interest on loan granted to Zalais Speks SIA
50
17
Fair value adjustments on loan granted to Zalais Speks SIA
(111)
(158)
Long term loan granted to Zala Elektriba SIA
1 786
-
Interest on loan granted to Zala Elektriba SIA
154
-
Fair value adjustments on loan granted to Zala Elektriba SIA
(254)
-
Total loans granted
103 807
77 512
During the year ended 31 December 2023 the Group made instalments according to the loan agreement (1) of EUR 4 705 thousand to
PL Sun sp. z o. o. Based on the terms specified in the loan agreement which was amended on 26 July 2023 to extend granting period, the
Group undertook obligation to provide a loan in a total amount of EUR 19 000 thousand until 31 December 2023.
During the year ended 31 December 2023 the Group made instalments according to the loan agreement (2) of EUR 140 thousand to
PL Sun sp. z o. o. Based on the terms specified in the loan agreement which was amended on 2 May 2023 to extend granting period, the
Group undertook obligation to provide a loan in a total amount of EUR 1 980 thousand until 30 June 2024.
III. Notes
| 36
On 2 May 2023 the Group signed an amendment to the loan agreement (3) with subsidiary PL Sun sp. z o. o. to extend granting period. The
Group undertook obligation to provide a loan in a total amount of EUR 1 314 thousand until 30 June 2024.
On 24 January 2023 the Group signed loan agreement (4) with subsidiary PL Sun sp. z o. o. under which undertook the obligation to provide
loan in a total amount of EUR 19 000 thousand. During the year ended 31 December 2023, the Group made instalments of EUR 19 000
thousand.
On 18 April 2023 the Group signed loan agreement (5) with subsidiary PL Sun sp. z o. o. under which undertook the obligation to provide
loan in a total amount of EUR 972 thousand. During the year ended 31 December 2023, the Group made instalments of EUR 972 thousand.
On 30 August 2023 the Group signed loan agreement (6) with subsidiary PL Sun sp. z o. o. under which undertook the obligation to provide
loan in a total amount of EUR 15 500 thousand. During the year ended 31 December 2023, the Group made instalments of EUR 7 027
thousand.
On 28 June 2023 the Group's subsidiary PV Energy Projects sp. z o. o. made a loan redemption to loans (1), (2) and (3) and returned in total
EUR 7 365 thousand in loan and EUR 1 366 thousand in accrued interest.
On 29 June 2023 the Group's subsidiary PV Energy Projects sp. z o. o. made a partial loan redemption to loan (4) and returned in total EUR
5 192 thousand in loan and EUR 546 thousand in accrued interest.
On 27 September 2023 the Group's subsidiary PV Energy Projects sp. z o. o. made a partial loan redemption to loan (4) and returned in total
EUR 969 thousand in loan and EUR 116 thousand in accrued interest.
During the year ended 31 December 2023 the Group made instalments according to the loan agreement (5) of EUR 3 743 thousand to PV
Energy Projects sp. z o. o. Based on the terms specified in the loan agreement the Group undertakes obligation to provide a loan in a total
amount of EUR 36 600 thousand until 31 December 2023.
During the year ended 31 December 2023 the Group’s subsidiary Energy Solar Projekty sp. z o. o. made a partial loan redemption and
returned in total EUR 721 thousand in loan and EUR 3 617 thousand in accrued interest.
During the year ended 31 December 2023 the Group made instalments of EUR 225 thousand to Zalais Speks SIA under an existing loan
agreement.
On 30 March 2023 the Group signed loan agreement with associate Zala Elektriba SIA under which undertook the obligation to provide loan
in a total amount of EUR 2 445 thousand. During the year ended 31 December 2023, the Group made instalments in amount of EUR 1 786
thousand.
As at 31 December 2023, fair value adjustment on loans granted to Zalais Speks SIA and Zala Elektriba SIA were recognized based on the
valuation report with valuation of assets as at 31 October 2023 and due to decrease in value of shares of Zalais Speks SIA and Zala Elektriba
SIA.
The management concluded that the fair value of loans corresponds to the carrying value by comparing the fixed interest rate against the
prevailing market rate at the time of assessment, considering the various stages of project development.
The carrying amounts and accrued interest of the loans granted as at 31 December 2023:
Group and Company
Borrower
Carrying
Fair value of
Loan date
Contractual
Maturity date
amount and
loans and
interest rate
accrued
interest
interest
accrued
Energy Solar Projekty sp. z o. o.
2019-05-31
8,50%
2026-01-05
14 643
14 643
PV Energy Projects sp. z o. o. (4)
2021-09-09
8,50%
2026-01-05
10 605
10 605
PV Energy Projects sp. z o. o. (5)
2022-06-20
8,50%
2026-01-05
27 642
27 642
PL Sun sp. z o. o. (1)
2022-02-28
8,50%
2026-01-05
17 661
17 661
PL Sun sp. z o. o. (2)
2022-07-29
8,50%
2026-01-05
1 550
1 550
PL Sun sp. z o. o. (3)
2022-12-07
14,00%
2026-01-05
1 091
1 091
PL Sun sp. z o. o. (4)
2023-01-24
11,68%
2026-01-05
20 253
20 253
PL Sun sp. z o. o. (5)
2023-04-18
11,70%
2026-01-05
1 053
1 053
PL Sun sp. z o. o. (6)
2023-08-30
11,68%
2026-01-05
7 256
7 256
Zalais Speks SIA
2022-04-28
12,00%
2028-01-05
478
367
Zala Elektriba SIA
2023-03-30
12,00%
2028-01-05
1 940
1 686
III. Notes
| 37
The carrying amounts and accrued interests of the loans granted as at 31 December 2022:
Group and Company
Carrying
Fair value of
Borrower
Loan date
Contractual
Maturity date
amount and
loans and
interest rate
accrued
interest
interest
accrued
Energy Solar Projekty sp. z o. o.
2019-05-31
8,50%
2026-01-05
18 159
18 159
PV Energy Projects sp. z o. o. (1)
2020-10-01
8,50%
2026-01-05
1 619
1 619
PV Energy Projects sp. z o. o. (2)
2021-03-18
8,50%
2026-01-05
5 087
5 087
PV Energy Projects sp. z o. o. (3)
2021-06-02
8,50%
2026-01-05
1 713
1 713
PV Energy Projects Sp. z o. o. (4)
2021-09-09
8,50%
2026-01-05
16 340
16 340
PV Energy Projects Sp. z o. o. (5)
2022-06-20
8,50%
2026-01-05
21 766
21 766
PL Sun sp. z o. o. (1)
2022-02-28
8,50%
2026-01-05
11 773
10 536
PL Sun sp. z o. o. (2)
2022-07-29
8,50%
2026-01-05
1 291
1 280
PL Sun sp. z o. o. (3)
2022-12-07
14,00%
2026-01-05
956
950
Zalais Speks SIA
2022-04-28
12,00%
2028-01-05
220
62
2. Other financial assets
Group
Company
31 December 2023
31 December 2022
31 December 2023
31 December 2022
Restricted cash for guarantees (non-current)
2 250
1 650
2 250
1 650
Restricted cash for guarantees (current)
1 600
-
1 600
-
Long term deposits
25
-
-
-
Total other financial assets
3 875
1 650
3 850
1 650
Bank guarantees are intended to confirm that subsidiaries would perform their obligation under agreements related with investing in solar
and wind farm infrastructure. Under the confirmation letter the bank is obligated to pay to the beneficiary amounts upon receipt of payment
demand in case the company does not fulfil the requirements listed in letter of intent with the grid operator, whereas the payable amount
cannot exceed funds paid by the Group indicated above. The bank guarantees are valid until the earlier of the following events – fulfilment
of all requirements listed in the letter of intent with the grid operator or the guarantee validity date, specified in the agreement, ends (31
January 2028 for EUR 600 thousand guarantee, 29 February 2028 for EUR 1 000 thousand guarantee and 15 November 2028 for EUR 2 250
thousand). There is a possibility to extend the guarantee by 6 months.
Instalments for guarantees are held as cash restricted for the Group’s general use. Restricted cash for guarantees is held at well-established
credit institutions with high long-term debt ratings (refer to Note 5), therefore management does not see a risk of restricted cash not being
able to be used for the purpose it is currently held as restricted or not being freed up for the Group’s general use once purpose of holding
restricted cash is fulfilled. Management assumes that there is no significant expected credit loss in regard to restricted cash, therefore
expected credit loss is not recognized.
On 25 September 2023 the Group made an additional instalment of EUR 1 000 thousand as restricted cash for guarantees related to the
development of wind and solar parks. On the same day, the Group signed an agreement on transfer of rights and obligations with an external
party in order to return the restricted cash for guarantees in total amount of EUR 1 600 thousand. The Group’s Management expects to
receive this amount from the bank until 22 May, 2024. The third party is obligated to pay a fixed interest rate of 15% on the deposited funds
until the repayment date.
On 26 October 2023 the Group recovered a bank guarantee, related to the development of wind and solar parks, in the amount of EUR 1 050
thousand.
On 30 November 2023 the Group made an additional instalment of EUR 2 250 thousand as restricted cash for guarantees related to the
development of wind park developed by UAB Pakruojo vėjas. The project's development progresses as planned, management does not
observe any indications of impairment regarding the guarantee. The Group is evaluating the possibility of maintaining the deposited funds
at deposit account and receive interest from restricted cash.
During the year ended 31 December 2023 the Group made a long-term deposit instalment of EUR 25 thousand, related to the long-term
office lease agreement.
III. Notes
| 38
As at 31 December 2023 other financial assets consists of long term deposits in the amount of EUR 25 thousand and restricted cash for
guarantees in the amount of EUR 3 850 thousand – EUR 2 250 thousand as non-current asset and EUR 1 600 thousand as current asset
(as at 31 December 2022 – restricted cash for guarantees in the amount of EUR 1 650 thousand as non-current asset).
3. Prepayments
Group and Company
31 December 2023
31 December 2022
Prepayments
50
50
Loss allowance on prepayments
(25)
(25)
Total prepayments
25
25
The following table presents movements in prepayments for the year ended 31 December 2023:
Group and Company
As at
Increase (decrease)
As at
1 January 2023
in loss allowance
Repaid amount
31 December 2023
on prepayments
Prepayments
25
-
-
25
As at 31 December 2023 prepayments made by the Group consist of prepayments for the shares of UAB Raguvėlės vėjas and UAB Pakruojo
vėjas. Loss allowance on prepayment for the shares of UAB Pakruojo vėjas is recognized as the fair value of the subsidiary is considered to
be EUR 0.
The following table presents movement in loss allowance for prepayments for the year ended 31 December 2023:
Group and Company
As at
Increase (decrease)
As at
1 January 2023
in loss allowance
31 December 2023
Loss allowance for prepayments
(25)
-
(25)
4. Other current receivables
Group
Company
31 December 2023
31 December 2022
31 December 2023
31 December 2022
Receivable from tax administrator of Poland
596
105
596
105
Receivable from external party related to
transfer of guarantees
182
-
182
-
Receivable for recharged costs
20
12
11
12
Deposits
13
37
-
-
Future period expenses
16
4
13
3
Other receivables
12
9
1
8
Total other current receivables
839
167
803
128
As at 31 December 2023 the Group has a receivable from tax administrator of Poland, which refers to withholding tax paid to the tax
administrator of Poland by Energy Solar Projekty sp. z o. o. in relation to interest payment on loan granted made to the Group (refer to
Note 1).
The refund timeline has been extended beyond initial expectations, mainly due to the information exchange between Polish and Lithuanian
tax offices. This delay is attributed to the complex nature of the case, which necessitates analysis of all evidence packages. Management
remains optimistic about receiving a favourable decision from Polish tax authorities soon, as the Company, as a beneficial owner of interests,
III. Notes
| 39
meets all conditions for exemption outlined in the Polish CIT regulation for collective investment vehicles. The current refund timeline is set
for 29 May 2024.
As at 31 December 2023 the Group has a receivable from external party related to 25 September 2023 agreement on transfer of rights and
obligations (refer to Note 2). According to the agreement, external party undertakes to reimburse the Group for the cost of issuing the
guarantees and 15% interest per annum on the amount of the guarantees.
5. Cash and cash equivalents
Group
Company
31 December 2023
31 December 2022
31 December 2023
31 December 2022
Cash
5 933
11 527
5 903
11 527
Less restricted cash
(3 850)
(1 650)
(3 850)
(1 650)
Total cash and cash equivalents
2 083
9 877
2 053
9 877
As at 31 December 2023 and 31 December 2022 all cash balances have a low credit risk at the reporting date and the impairment loss
determined on 12-month expected credit losses is resulted in an immaterial amount.
As at 31 December 2023 and 31 December 2022, the Group has cash classified as restricted cash for guarantees in amount of EUR 3 850
thousand. Refer to Note 2.
As at 31 December 2023 and 31 December 2022 the Group's cash was held at bank accounts:
- AB SEB bankas;
- AB Šiaulių bankas;
- AS Citadele banka Lietuvos filialas.
The credit risk associated with bank balances is limited as the Group conducts transactions with banks with high long-term debt ratings
issued by foreign rating agencies. Bank ratings are given below:
Moody's
Standard & Poor's
AB SEB bankas
AA3
A+
AB Šiaulių bankas
BAA1
-
AS Citadele banka Lietuvos filialas
BAA2
-
Net debt reconciliation for the financial year ended 31 December 2023 is as follows:
Group
Company
Liabilities
Cash and
Liabilities
Cash and
from
cash
Total
from
cash
Total
financing
equivalents
financing
equivalents
activities
activities
Net debt as at 1 January 2023
(49 985)
9 877
(40 108)
(49 985)
9 877
(40 108)
Operating and investment cash
(3 939)
(29 926)
(33 753)
(3 939)
(29 956)
(33 783)
flows
Proceeds from issue of share capital
-
3 772
3 772
-
3 772
3 772
Proceeds from share premium
-
2 991
2 991
-
2 991
2 991
Bonds issued
(18 828)
18 828
-
(18 828)
18 828
-
Repayment of bonds interest
3 235
(3 235)
-
3 235
(3 235)
-
Transaction costs related to bonds
224
(224)
-
224
(224)
-
issue
Repayment of loans
12
-
-
12
-
-
Repayment of loans interest
100
-
-
100
-
-
Net debt as at 31 December 2023
(69 181)
2 083
(67 098)
(69 181)
2 053
(67
128)
III. Notes
| 40
6. Issued Capital
Group and Company
31 December 2023
31 December 2022
Authorised share capital fully paid
58 656
54 884
Total issued capital
58 656
54 884
As at 31 December 2023, the Group’s authorised share capital amounted to EUR 58 656 thousand and was comprised of 58 656 399 ordinary
shares of EUR 1 each (as at 31 December 2022 – EUR 54 884 thousand and was comprised of 54 884 151 ordinary shares of EUR 1 each).
During the financial year ended 31 December 2023, the authorised share capital was increased by the issue of 3 772 248 ordinary shares
with the face value of EUR 1 each (for the financial year ended 31 December 2022 – 14 821 425 ordinary shares with the face value of EUR
1 each).
For the financial year ended 31 December 2023 and 31 December 2022 reconciliation of the number of shares issued and outstanding is
provided in the table below:
Group and Company
31 December 2023
31 December 2022
As at year start
54 884
40 063
Issue of ordinary shares
3 772
14 821
As at year end
58 656
54 884
7. Share premium
Group and Company
31 December 2023
31 December 2022
As at year start
21 128
10 790
Share premium
2 991
10 338
As at year end
24 119
21 128
As at 31 December 2023 and 31 December 2022, share premium is recognized if the issue price of a share exceeds the nominal value of a
share.
8. Legal reserve
The legal reserve is mandatory in accordance with the legal acts of the Republic of Lithuania. It is mandatory to transfer to the legal reserve
each year at least 5% of net profit calculated in accordance with the Lithuanian accounting principles until the reserve reaches 10% of the
authorised capital. As at 31 December 2023 legal reserve is amounted to EUR 1 075 thousand (as at 31 December 2022 – EUR 407
thousand).
III. Notes
| 41
9. Bonds issued
Group and Company
31 December 2023
31 December 2022
Non-current liabilities
Bonds principal issued
72 382
67 000
Bonds principal repaid
-
(15 000)
Bonds interest accrued
-
1 973
Bonds interest paid
-
(1 973)
Amortized costs of bonds issue
(494)
(450)
Amortized discount on bonds issue
(2 868)
(1 793)
Total non-current liabilities
69 020
49 757
Current liabilities
Bonds principal issued
-
5 000
Bonds principal paid
-
(5 000)
Bonds interest accrued
5 021
1 991
Bonds interest paid
(4 860)
(1 875)
Total current liabilities
161
116
Total bonds issued
69 181
49 873
The Group carefully monitors the market interest rates, therefore fixed interest rates that are determined in the bond and loan agreements
the Group concluded with its subsidiaries, associates or external / third parties are set considering the interest rates that are applicable in
the market at the time of undertaking the liability.
Changes in the amortized cost value of the Group's liabilities from bonds for the financial year ended 31 December 2023 is presented in the
table below:
Group and Company
As at 1
Proceeds
Repayment
Amortized
As at 31
January
from bonds
of bonds
Interest
Interest
costs of
December
2023
issued
issued
accrued
paid
bonds
2023
issue
Green bonds
49 873
20 382
-
3 280
(3 235)
(1 119)
69 181
Total liabilities
49 873
20 382
-
3 280
(3 235)
(1 119)
69 181
During the year ended 31 December 2023, based on Green Bonds agreement, the Company has issued new emissions of bonds in total
amount of EUR 20 382 thousand with 5,00 % of fixed coupon interest rate and maturity date of 14 December 2025. The issue price of new
emissions of bonds is lower than nominal value of bonds, therefore discount on bonds was recognized and is going to be amortized over
the term of the bonds issued.
During the year ended 31 December 2023, based on Green Bonds agreement, the Group has paid to investors EUR 3 235 thousand of fixed
coupon interest.
Changes in the amortized cost value of the Group's liabilities from bonds for the financial year ended 31 December 2022 is presented in the
table below:
III. Notes
| 42
Group and Company
As at 1
Proceeds
Repayment
Amortized
As at 31
January
from bonds
of bonds
Interest
Interest
costs of
December
2022
issued
issued
accrued
paid
bonds
2022
issue
Shareholder (1)
174
-
(173)
9
(10)
-
-
Green bonds
24 732
27 000
-
1 683
(1 625)
(1 917)
49 873
External lender (1)
3 096
-
(3 000)
54
(150)
-
-
External lender (2)
1 032
-
(1 000)
18
(50)
-
-
External lender (3)
1 032
-
(1 000)
18
(50)
-
-
Total liabilities
30 066
27 000
(5 173)
1 782
(1 885)
(1 917)
49 873
On 13 May 2022, the Group redeemed EUR 5 000 thousand of bonds with accrued interest of EUR 250 thousand based on agreements with
External lenders (1), (2) and (3) signed on 12 May 2021.
During the year ended 31 December 2022, the Group redeemed EUR 173 thousand outstanding amount of bonds and EUR 10 thousand
outstanding payable interest on bonds based on the agreement with Shareholder (1) signed on 1 June 2019.
During the year ended 31 December 2022, based on Green Bonds agreement, the Group has issued new emissions of bonds in total amount
of EUR 27 000 thousand with 5,00 % of fixed coupon interest rate and maturity date of 14 December 2025 and paid to investors EUR 1 625
thousand of fixed coupon interest.
Details and outstanding balances of bonds issued based on each of the bond agreement as at 31 December 2023 and 31 December 2022
are provided below:
Group and Company
Outstanding
Outstanding
Lender
Bond issue
Interest rate
Maturity date
balance as at
balance as at
date
31 December
31 December
2023
2022
Greens Bonds
2021-12-15
5,00%
2025-12-14
69 181
49 873
Principal amount:
72 382
52 000
Interest accrued:
5 021
1 741
Interest paid:
(4 860)
(1 625)
Amortized costs of bonds issue:
(494)
(450)
Amortized discount on bonds issue:
(2 868)
(1 793)
Compliance with Financial covenants
Under the terms of the Green Bonds agreement the Group is obligated to comply with financial covenants as listed below:
• Minimum liquidity requirement of EUR 1 500 thousand;
• Equity ratio 50% or greater;
• Leverage ratio 75% or lower.
In addition to the financial covenants following conditions are set in the agreement:
• No event of default has occurred as at the end data of reporting year;
• No change of nature of business, disposal of assets, negative pledge, limits on dividends, financial indebtedness restrictions has
occurred;
• Other conditions set in the Green bonds agreement such as publication of audited consolidated annual financial statements,
quarterly consolidated unaudited financial statements each of direct subsidiary or direct associated companies.
For the financial year ended 31 December 2023, the Group complies with financial covenants set out in terms of Green Bonds agreement.
III. Notes
| 43
10. Loans received
Group and Company
31 December 2023
31 December 2022
Principal amount
992
992
Principal repaid
(992)
(980)
Interest accrued
100
100
Interest paid
(100)
-
Total loans received
-
112
The Group made the assessment that contractual interest rates are in line with the effective interest rate and the nominal value of received
loans correctly reflects the amortized cost of financial liabilities. The Group carefully monitors the market interest rates, therefore fixed
interest rates that are determined in the bond and loan agreements the Group concluded with its subsidiaries, associates or external / third
parties are set considering the interest rates that are applicable in the market at the time of undertaking the liability.
Changes in the amortised value of the Group's liabilities from loans for the financial year ended 31 December 2023 are presented in the
table below:
Group and Company
As at 1
Proceeds
Repayment
Interest
As at 31
Lender
January
from loans
of loans
accrued
Interest paid
December
2023
received
received
2023
UAB Saulės energijos projektai
112
-
(12)
-
(100)
-
On 24 August 2023 the Group set off the remaining loan and interest amount with dividends receivable from UAB Saulės energijos projektai,
therefore, as at 31 December 2023, the loan and interest is paid in full.
Changes in the amortised value of the Group's liabilities from loans for the financial year ended 31 December 2022 are presented in the
table below:
Group and Company
As at 1
Proceeds
Repayment
Interest
As at 31
Lender
January
from loans
of loans
accrued
Interest paid
December
2022
received
received
2022
UAB Saulės energijos projektai
111
-
-
1
-
112
Details and outstanding balances of loans received based on each of the loan agreement that the Group had as at 31 December 2023 and
31 December 2022 are provided below:
Group and Company
Outstanding
Outstanding
Lender
Loan date
Interest rate
Maturity date
balance as at
balance as at 31
31 December
December
2023
2022
UAB Saulės energijos projektai
2016-06-30
3,00%
2025-06-30
Principal amount:
992
992
Principal repaid:
(992)
(980)
Interest accrued:
100
100
Interest paid:
(100)
-
Total:
-
112
III. Notes
| 44
11. Trade and other payables
Group
Company
31 December 2023
31 December 2022
31 December 2023
31 December 2022
Accrued success fee
1 783
2 503
1 783
2 503
Payable to Management Company
345
312
345
312
Accrued expenses
144
166
143
166
Payable to depository
30
26
30
25
VAT payable
17
9
-
-
Trade payables
12
68
11
67
Total trade and other payables
2 331
3 084
2 312
3 073
As at 31 December 2023 the Group has accrued expenses in amount of EUR 144 thousand (as at 31 December 2022 –
EUR 166 thousand), which mainly relates to accrued transaction fees of Green Bonds, accounting services, audit expenses and valuation
expenses.
The Company‘s net return on investment exceeded 8 % hurdle rate at 31 December 2023 and at 31 December 2022, therefore success fee
was accrued according to the Prospectus of Company.
12. Payables to employees
Group
Company
31 December 2023
31 December 2022
31 December 2023
31 December 2022
Unused vacation accruals
36
16
-
-
Wages related tax payable
-
8
-
-
Other payables to employees
1
-
-
-
Total payables to employees
37
24
-
-
13. Income
Group
Company
2023
2022
2023
2022
Net gain on investments in equity and debt instruments
10 874
19 818
10 874
19 818
at fair value through profit or loss (Note 1)
Dividend income
355
21
355
21
Other income
198
73
190
73
Net gain (loss) on other non-current receivables at
through profit or loss
-
(183)
-
(183)
Total income
11 427
19 729
11 419
19 729
The Group measures its investments at fair value through profit or loss on an aggregated basis. The Group’s net gain recognized for the
financial year ended 31 December 2023 has decreased due to a lower growth of fair value of its investments as compared to the significant
growth for the financial year ended 31 December 2022 (refer to Note 1).
III. Notes
| 45
14. Administrative expenses
Group
Company
2023
2022
2023
2022
Management fee
1 356
1 064
1 356
1 064
Employment related costs
770
405
-
-
Consulting services
352
185
1 440
758
Depository expenses
122
90
120
88
Development and management costs of investment
109
183
20
118
objects
Valuation expenses
102
186
102
186
Accounting services
102
90
93
82
Office maintenance expenses
92
49
1
2
Legal expenses
56
122
26
119
Audit expenses
37
37
37
37
Due diligence expenses
6
12
-
12
Bank charges
3
61
3
61
Other administrative expenses
109
49
43
35
Success fee
(721)
1 873
(721)
1 873
Total expenses
2 495
4 406
2 520
4 435
The Management fee is the remuneration paid to the Management Company for the management of the Company’s assets, which is
calculated under the following procedure:
- From the start of the Company’s activities until the expiry of the Investment Period – 1.5% on the amount of Commitments given
by all the Investors to the Company under the Investment Agreements. The Management fee shall be paid to the Management
Company pro rata to the amount of all the Commitments given to the Company;
- Upon the expiry of the Investment Period, the Management fee is 1,5% calculated on the actual amount invested by the
Shareholders in the Company.
The Articles of Association of the Company provide for the Success fee to the Management Company which depends on the Company’s
net return on investment for the entire life period. When the 8% hurdle rate is exceeded, the Success fee is accounted for on the accrual
basis.
Exceeded hurdle rate of net return on investment led to accrual of success fee expenses in the financial year ended 31 December 2023 and
31 December 2022. Since the changes in investment assets at fair value through profit and loss during the year ended 31 December 2023
were not as significant as during the year ended 31 December 2022, the rate of return decreased and as a result accrued expenses of
success fee were reduced accordingly.
15. Finance costs
Group and Company
2023
2022
Interest expenses on bonds issued
3 760
1 806
Transaction fee
179
103
Interest expenses on loans received
-
1
Total finance costs
3 939
1 910
Increase in the interest expenses on bonds issued for the year ended 31 December 2023 in comparison to the year ended 31 December
2022 is due to new emissions of Green bonds issued during year 2023 based on the agreement signed on 14 December 2021.
III. Notes
| 46
16. Income tax
The main components of corporate income tax expenses for the financial year ended 31 December 2023 and 31 December 2022 are as
follows:
Group
Company
2023
2022
2023
2022
Income tax expense for the current year
6
3
-
-
Total income tax
6
3
-
-
Following the provisions of the Lithuanian Law on Corporate Income Tax, all income of closed-end investment companies operating in
accordance with the Lithuanian Law on Collective Investment Undertakings are not subject to taxation. Corporate income tax expense for
the financial year ended 31 December 2023 and 31 December 2022 is calculated based on the results of the subsidiary that is consolidated.
Reconciliation of income tax expense and the accounting profit multiplied by the applicable tax rate for the year ended 31 December 2023
and 31 December 2022 is presented in the table below:
Group
Company
2023
2022
2023
2022
Profit before tax
5 037
13 367
5 005
13 360
Income tax expense calculated at the statutory rate in
Lithuania
755
2 005
751
2 004
Non-taxable income
(753)
(2 006)
(751)
(2 004)
Non-deductible expenses
1
-
-
-
Elimination of result of deconsolidation
-
3
-
-
Elimination of fair value adjustment on investment in
subsidiary
3
1
-
-
Income tax expense recognised in profit or loss
6
3
-
-
17. Segment information
Operating reportable segments of the Group are separated on the basis of each consolidated entity, as chief operating decision-maker
(hereinafter - CODM) monitors performance of Group entities and makes decisions about resources based on results of Group entities
separately.
The Group provides two types of services, which are identified as its reportable segments. The following summary provides description of
services of each reportable segment:
Reportable segment
Description of services
Investment activities
Investment of collected funds in renewable energy infrastructure objects and related assets such
as renewable energy sources, energy efficiency projects, energy resources distribution and
transmission networks and their storage facilities, etc. Services are provided by AEI for the financial
year ended 31 December 2023.
Project management and
consultation services
Provision of project management and consultation services in relation to development and
operational activities of the Group. Services are provided by UAB JTPG for the period starting 1
January 2022 ending 31 July 2022 and by UAB AEI Development starting 1 August 2022.
The CODM does not monitor the results of the Group based on geographical segments.
The following table presents information on profit or loss, assets and liabilities by operating reportable segments of the Group for the year
ended 31 December 2023:
III. Notes
| 47
Project
Reclassifications
Investment
management
and consolidation
Total
activities
and consultation
adjustments
services
Segment profit or loss
Income
Net gain on financial assets at fair value through
profit or loss
10 874
-
-
10 874
Dividend income
355
-
-
355
Other income
190
8
-
198
Inter-segment income
-
1 257
(1 257)
-
Total income
11 419
1 265
(1 257)
11 427
Expenses
Administrative expenses
(2 520)
(1 232)
1 257
(2 495)
Foreign exchange income
45
-
-
45
Interest expenses
(3 939)
-
-
(3 939)
Foreign exchange loss
-
(1)
-
(1)
Profit before tax
5 005
32
-
5 037
Income tax
-
(6)
-
(6)
Profit after tax
5 005
26
-
5 031
Segment assets and liabilities
Segment assets
186 793
89
-
186 882
Segment liabilities
71 493
62
-
71 555
The following table presents information on profit or loss, assets and liabilities by operating reportable segments of the Group for the year
ended 31 December 2022:
Project
Reclassifications
Investment
management
and consolidation
Total
activities
and consultation
adjustments
services
Segment profit or loss
Income
Net gain on financial assets at fair value through
profit or loss
19 635
-
-
19 635
Other income
73
-
-
73
Dividend income
21
-
-
21
Inter-segment income
-
780
(780)
-
Total income
19 729
780
(780)
19 729
Expenses
Administrative expenses
(4 435)
(751)
780
(4 406)
Loss allowance on prepayments
(25)
-
-
(25)
Loss from deconsolidation of a subsidiary
-
-
(22)
(22)
Foreign exchange income
1
-
-
1
Interest expenses
(1 910)
-
-
(1 910)
Profit before tax
13 360
29
(22)
13 367
Income tax
-
(3)
-
(3)
Profit after tax
13 360
26
(22)
13 364
Segment assets and liabilities
Segment assets
156 590
37
-
156 627
Segment liabilities
53 058
36
-
53 094
III. Notes
| 48
Total of profit after tax of reportable segments presented in the table above reconciles with the consolidated profit after tax presented in
the Consolidated Statement of Profit or Loss for the year ended 31 December 2023. Total assets and liabilities of reportable segments
presented in the table above reconcile with consolidated assets and liabilities presented in the Consolidated Statement of Financial Position
as at 31 December 2023.
18. Related parties
The following income and expenses occurred with related parties:
Group and Company
12 months to
12 months to
Related party
Income / Expense type
Note
31 December
31 December
2023
2022
Shareholder
Interest expenses on bonds issued
9, 15
-
9
UAB Saulės energijos projektai
Dividend income
13
355
21
UAB Saulės energijos projektai
Interest expenses on loan received
10, 15
-
1
Energy Solar Projekty sp. z o. o.
Interest income on loan granted
1, 13
1 267
1 288
PV Energy Projects sp. z o. o.
Interest income on loan granted
1, 13
3 531
2 081
PL Sun sp. z o. o.
Interest income on loan granted
1, 13
3 000
802
Zalais Speks SIA
Interest income on loan granted
1, 13
33
17
UAB Ekoelektra
Interest income on bonds acquired
1, 13
319
41
UAB Žaliosios investicijos
Interest income on bonds acquired
1, 13
1 406
1 496
UAB KNT Holding
Interest income on bonds acquired
1, 13
420
293
UAB Nimela
Interest income on bonds acquired
1, 13
363
167
UAB Atelda
Interest income on bonds acquired
1, 13
11
-
UAB JTPG
Interest income on bonds acquired
1, 13
120
-
UAB Rineila
Interest income on bonds acquired
1, 13
4
-
Zala Elektriba SIA
Interest income on loan granted
1, 13
154
-
The following outstanding balances are outstanding at the end of the financial year in relation to transactions with related parties:
Group and Company
Related party
Asset / Liability type
Note
31 December
31 December
2023
2022
UAB Saulės energijos projektai
Payable principal on loan received
10
-
12
UAB Saulės energijos projektai
Payable interest amount on loan received
10
-
100
Energy Solar Projekty sp. z o. o.
Receivable principal on loan granted
1
14 230
14 950
Energy Solar Projekty sp. z o. o.
Receivable interest on loan granted
1
413
3 209
PV Energy Projects sp. z o. o.
Receivable principal on loan granted
1
34 242
44 024
PV Energy Projects sp. z o. o.
Receivable interest on loan granted
1
4 005
2 501
PL Sun sp. z o. o.
Receivable principal on loan granted
1
45 074
13 230
PL Sun sp. z o. o.
Receivable interest on loan granted
1
3 790
790
Zalais Speks SIA
Receivable principal on loan granted
1
428
203
Zalais Speks SIA
Receivable interest on loan granted
1
50
17
UAB Ekoelektra
Receivable principal on bonds acquired
1
2 927
331
UAB Ekoelektra
Receivable interest on bonds acquired
1
353
34
UAB Žaliosios investicijos
Receivable principal on bonds acquired
1
23 650
22 775
UAB Žaliosios investicijos
Receivable interest on bonds acquired
1
1 447
41
UAB KNT Holding
Receivable principal on bonds acquired
1
6 515
2 991
III. Notes
| 49
Group and Company
(Continued)
Related party
Asset / Liability type
Note
31 December
31 December
2023
2022
UAB KNT Holding
Receivable interest on bonds acquired
1
486
66
UAB Nimela
Receivable principal on bonds acquired
1
913
3 010
UAB Nimela
Receivable interest on bonds acquired
1
160
167
UAB Atelda
Receivable principal on bonds acquired
1
117
-
UAB Atelda
Receivable interest on bonds acquired
1
11
-
UAB JTPG
Receivable principal on bonds acquired
1
2 334
-
UAB JTPG
Receivable interest on bonds acquired
1
120
-
UAB Rineila
Receivable principal on bonds acquired
1
36
-
UAB Rineila
Receivable interest on bonds acquired
1
4
-
Zala Elektriba SIA
Receivable principal on loan granted
1
1 786
-
Zala Elektriba SIA
Receivable interest on loan granted
1
154
-
Transactions with Key Management Body
The following income and expenses occurred with Key Management Body:
Group and Company
Related party
Income/ Expenses type
31 December 2023
31 December 2022
Management Company
Success fee
(721)
1 873
Management Company
Management fee
1 356
1 064
The following asset and liabilities occurred with Key Management Body:
Group and Company
Related party
Asset / Liability type
31 December 2023
31 December 2022
Management Company
Accrued success fee
1 783
2 503
Management Company
Payable management fee
345
312
Share purchase and sale transactions with related parties
Group and Company
31 December 2023
31 December 2022
As at year start
20 560
18 728
Shares distributed (related company)
-
1 832
Redeemed shares (related company)
-
-
Shares distributed (related person)
-
-
Redeemed shares (related person)
-
-
As at year end
20 560
20 560
As at 31 December 2023, related parties owned 20 559 560 units of the Company's shares amounting to 35,05% of the total amount of
shares (as at 31 December 2022, related parties owed 20 559 560 units and 37,46% of the total amount of shares).
III. Notes
| 50
19. Financial risk management
The Group assesses following financial risks related to its activity: liquidity, credit, interest rate, foreign exchange, and operational risks. The
objective of financial risk management is to identify, assess and manage the risks that the Group might be exposed to.
19.1. General risk
The value of Group’s investments may both go up and down and, therefore, the values of the Group’s Shares may fluctuate during the term
of the Group’s operations. Past performance of the Group cannot guarantee the same future results. In addition, main investments of the
Group will be made in infrastructure assets and related properties so there are risks related to investments in such infrastructure assets
and properties. This risk may be inherent to the overall market of this type of properties or separate segments of this market and cover inter
alia, global, regional, or national socio-economic conditions, supply of and demand for infrastructure assets and properties targeted by the
Group for investment, financial capacity of buyers and sellers, changes in the legal environment and legislation related to infrastructure
assets and properties, changes in the tax environment, etc.
19.2. Market risk
There is a risk that due to the deteriorating global, regional, or national situation (e.g., macroeconomic changes, wholesale energy prices,
political, legal risks, or actions of investors in a particular region) the value of the property acquired by the Group or income received from it
will decrease, maintenance (administration) costs of such property will increase thereby reducing the value of Group’s investments.
The Company, its subsidiaries and associates are not traded on the regulated market. Subsidiaries and associates mainly operate in the
Lithuanian - Polish markets where value drivers are dependent on the specific energy regulation. The effect of changes in equity prices on
the results of the Group is zero.
The Company carries out its main transactions with entities of the Group. Loans granted and bonds issued with a fixed interest rate, therefore
there is no impact of interest rate fluctuation on the results of the Group. Changes in market rates and its impact on the fair value of fixed
rate instruments the Company owns is determined within valuation reports of independent business assessor. Changes in fair value of
instruments are accounted for based on the valuation reports. Refer to Note 1.
19.3. Liquidity risk
There is a risk of incurring losses due to low market liquidity which will prevent the disposal of the infrastructure assets and related properties
acquired by the Group at the preferred time and the desired price, or which will prevent the sale of the infrastructure assets and related
properties acquired by the Group in general. There is also a risk that due to the deteriorating global, regional, or national economic situation
the return demanded by the Investors will increase and the terms of financing from banks will deteriorate, which will make the sale of the
Group’s investments last longer than expected. To mitigate this risk, the Group will start selling the acquired assets at least 2 to 3 years
before the end of the term of the Company’s operations so that it can freely regulate the sale process and choose from the offers of buyers.
Liquidity risk is the risk that the Group may not be able to generate sufficient cash resources to settle its obligations in full as they fall due
or can only do so on terms that are materially disadvantageous. The Group’s objective is to maintain sufficient liquidity resources to maintain
operations, meet its financial obligations and liabilities, pay distributions, and provide funds for capital expenditures and investment
opportunities. Management seeks to achieve these objectives through:
- Preparation of regular forecast cash flows to understand the application and use of funds; and
- Identification of future funding, including new debt facilities.
The Group describes the management of liquidity risk as conservative which refers to the sufficient ensuring of the amount of cash and
cash equivalents. The Group’s cash flows are positive, hence the liquidity risk is considered to be low. Due to this reason, the Group’s
management did not implement any formal procedures to manage the liquidity risk. The Group manages the liquidity risk by signing long-
term trading contracts with major buyers.
The following tables present contractual maturities of the Group‘s and Company’s financial assets and liabilities based on undiscounted
contractual payments as at 31 December 2023 and 31 December 2022:
III. Notes
| 51
Group
Cash flows as at 31 December 2023
Total
Less than 1
1 to 3 years
3 to 5 years
More than 5
year
years
Financial assets
Non-current assets
Bonds acquired
36 492
-
3 400
9 442
23 650
Loans granted
95 760
-
93 546
2 214
-
Other financial assets
2 275
-
-
2 250
25
Current assets
Other financial assets
1 600
1 600
-
-
-
Cash and cash equivalents
2 083
2 083
-
-
-
Total financial assets
138 210
3 683
96 946
13 906
23 675
Financial liabilities
Non-current liabilities
Bonds issued
72 382
-
72 382
-
-
Current liabilities
Bonds issued
161
161
-
-
-
Trade and other payables
374
374
-
-
-
Total financial liabilities
72 917
535
72 382
-
-
Company
Cash flows as at 31 December 2023
Total
Less than 1
1 to 3 years
3 to 5 years
More than 5
year
years
Financial assets
Non-current assets
Bonds acquired
36 492
-
3 400
9 442
23 650
Loans granted
95 760
-
93 546
2 214
-
Other financial assets
2 250
-
-
2 250
-
Current assets
Other financial assets
1 600
1 600
-
-
-
Cash and cash equivalents
2 053
2 053
-
-
-
Total financial assets
138 155
3 653
96 946
13 906
23 650
Financial liabilities
Non-current liabilities
Bonds issued
72 382
-
72 382
-
-
Current liabilities
Bonds issued
161
161
-
-
-
Trade and other payables
356
356
-
-
-
Total financial liabilities
72 899
517
72 382
-
-
III. Notes
| 52
Group
Cash flows as at 31 December 2022
Total
Less than 1
1 to 3 years
3 to 5 years
More than 5
year
years
Financial assets
Non-current assets
Bonds acquired
29 107
-
-
3 010
26 097
Loans granted
72 407
-
-
72 204
203
Other financial assets
1 650
-
-
1 650
-
Current assets
Cash and cash equivalents
9 877
9 877
-
-
-
Total financial assets
113 041
9 877
-
76 864
26 300
Financial liabilities
Non-current liabilities
Bonds issued
52 000
-
-
52 000
-
Loans received
112
-
-
112
-
Current liabilities
Bonds issued
116
116
-
-
-
Trade and other payables
389
389
-
-
-
Total financial liabilities
52 617
505
-
52 112
-
Company
Cash flows as at 31 December 2022
Total
Less than 1
1 to 3 years
3 to 5 years
More than 5
year
years
Financial assets
Non-current assets
Bonds acquired
29 107
-
-
3 010
26 097
Loans granted
72 407
-
-
72 204
203
Other financial assets
1 650
-
-
1 650
-
Current assets
Cash and cash equivalents
9 877
9 877
-
-
-
Total financial assets
113 041
9 877
-
76 864
26 300
Financial liabilities
Non-current liabilities
Bonds issued
52 000
-
-
52 000
-
Loans received
112
-
-
112
-
Current liabilities
Bonds issued
116
116
-
-
-
Trade and other payables
379
379
-
-
-
Total financial liabilities
52 607
495
-
52 112
-
19.4. Credit risk
Credit risk is the risk that a counterparty to a financial instrument will fail to discharge a contractual obligation or commitment that it has
entered with the Group, resulting in a financial loss to the Group. In managing the credit risk, the Group seeks to select only creditworthy
counterparties whose reliability is not in doubt.
III. Notes
| 53
As at 31 December 2023 and 31 December 2022 credit risk is assessed in regard to other financial assets consisting of restricted cash for
bank guarantees (Note 2) and cash at bank (Note 5) which are not accounted at fair value through profit and loss.
The Group is exposed to limited credit risk regarding to cash held at bank as the bank is a counterparty with a high credit rating issued by
foreign rating agencies (please refer to Note 5). Given the high credit ratings of the banks, the Group considers the probability of bank failure
to be zero.
The following table presents a summary of Group's exposure to credit risk and staging of prepayment and receivables measured at
amortised cost as at 31 December 2023:
Group
Asset type
Note
12 month or lifetime
Gross carrying
Loss allowance
Net carrying
ECL?
amount
amount
Prepayments
3
Lifetime ECL
50
(25)
25
(simplified approach)
Other receivables
4
Lifetime ECL
839
-
839
(simplified approach)
Company
Asset type
Note
12 month or lifetime
Gross carrying
Loss allowance
Net carrying
ECL?
amount
amount
Prepayments
3
Lifetime ECL
50
(25)
25
(simplified approach)
Other receivables
4
Lifetime ECL
803
-
803
(simplified approach)
The maximum exposure to credit risk in relation to financial assets, excluding financial assets measured at fair value through profit or loss,
as at reporting date is equal to the carrying value of each class of financial assets.
As at 31 December 2023 and 31 December 2022, the Group does not hold any collaterals in respect of loans granted and bonds acquired.
Loan agreements that the Group concluded have clauses specifying that no additional collateral shall be offered to the Group to secure the
performance of obligations under the loan agreements concluded.
On 26 May 2020, the subsidiary Energy Solar Projekty sp. z o. o. concluded financing agreements with DNB Bank Polska sp. z o. o. and
European Investment bank. The Energy Solar Projekty sp. z o. o. and its subsidiaries’ shares and assets are pledged in favour of lenders.
During 2022 DNB Bank Polska sp. z o. o. suspended its activities in Poland, all the rights and obligations of financing agreements were
transferred to BANK PEKAO.
On 26 October 2021, the Company issued a parent company guarantee to EE Lithuania Emerald ApS, by which it unconditionally guaranteed
for the payment for the full and timely fulfilment of the shares purchase agreement payment obligation concerning the entire share capital
of UAB EE Emerald Holding. The contingent liability of the Group under this guarantee agreement is limited to EUR 8 966 thousand.
On 31 January 2023, the Group has issued a guarantee under which it undertook an obligation to pay EUR 2 000 thousand after receiving
the requirement from beneficiary of the guarantee in regard to obligations which subsidiary UAB Atelda has towards land owner. The
guarantee was issued with an intention to confirm that subsidiary would fulfil its obligations under their cooperation agreement.
On 30 November 2023, the Group has taken over a bank guarantee of EUR 2 250 thousand from its subsidiary UAB JTPG in regards to
obligations Groups subsidiary UAB Pakruojo vėjas has based on agreements related to investing in wind farm infrastructure and with an
intention to confirm that the subsidiary would fulfil its obligations under these agreements. The term of bank guarantee is 15 November
2028. Bank guarantee is issued by depositing funds of the Company which keep them restricted for general use of the Company. Please
refer to Note 2.
On March 31, 2023, the subsidiary PV Energy Projects sp. z o. o. entered into an agreement with Bank Pekao S. A to secure financing for the
construction of 67.8 MW PV plants in Poland. As part of the financing arrangement, the Company pledged the shares and assets of its
subsidiary to the bank.
On 18 April 2023, the Group has issued a guarantee in amount of EUR 5 000 thousand in regard to PV Module Sale Purchase Agreement
concluded between seller and entities which are controlled by unconsolidated subsidiary PL Sun sp. z o. o. The Group has issued a guarantee
with an intention to confirm full and timely fulfilment of all entities' obligations under the agreement.
On 17 July 2023, the Group signed a share purchase option agreement with external party for shares in its subsidiary UAB JTPG. Depending
on the results of the project implementation, the Group will acquire the right to acquire the option shares at the price set out in the agreement,
and upon the Group exercising its right to acquire the option shares, external party will sell the option shares by the terms and conditions
set out in the agreement. The right to exercise the call option is triggered when all the conditions of the option have been fulfilled, or at the
III. Notes
| 54
expiry of the maturity date of 1 January 2026 (in the case of a partial fulfilment of the Option conditions). An option to acquire company
shares does not constitute a derivative within the meaning of IFRS 9 if the exercise price is variable, depending on specific conditions that
are valued at the exercise date. Therefore, the value of this option agreement at all times is zero till all the conditions of the option have been
fulfilled or till the expiration of the maturity date of 1 January 2026.
On 22 December 2023, the Group has issued a guarantee in regard to obligations its subsidiary UAB Nimela has towards loan lender
according to 22 December 2023 loan agreement. The Group has issued a guarantee with an intention to confirm full and timely fulfilment
of all entities' obligations under the agreement.
As at 31 December 2023 and 31 December 2022, the Group had loans that have not yet been paid out. The Group's commitments in regard
to loans granted and not yet paid out are summarized in the table below.
Commitments in regard to loans granted and bonds issued as at 31 December 2023:
Group and Company
Commitment
Contractual
Amount of
amount
Borrower
Type
Debt date
Maturity date
interest rate
loan granted
according to
loan
agreement
Energy Solar Projekty Sp. z o. o.
Loan
2019-05-31
2026-01-05
8,50%
44 950
48 000
PV Energy Projects Sp. z o. o. (5)
Loan
2022-06-20
2026-01-05
8,50%
24 902
36 600
PL Sun Sp. z o. o. (1)
Loan
2022-02-28
2026-01-05
8,50%
15 705
19 000
PL Sun Sp. z o. o. (2)
Loan
2022-07-29
2026-01-05
8,50%
1 420
1 980
PL Sun Sp. z o. o. (3)
Loan
2022-12-07
2026-01-05
14,00%
950
1 314
PL Sun Sp. z o. o. (6)
Loan
2023-08-30
2026-01-05
11,68%
7 027
15 500
Zalais Speks SIA
Loan
2022-04-28
2028-01-05
12,00%
428
2 300
Zala Elektriba SIA
Loan
2023-03-30
2028-01-05
12,00%
1 786
2 445
UAB Ekoelektra
Bonds
2022-02-14
2028-01-05
12.00%
2 927
6 000
UAB Žaliosios investicijos
Bonds
2021-11-12
2052-12-31
8,50%
29 269
30 000
UAB KNT Holding
Bonds
2022-10-27
2028-01-05
12,00%
6 515
20 000
UAB Nimela
Bonds
2022-07-18
2026-02-05
12,00%
3 033
30 000
UAB Atelda
Bonds
2023-01-05
2026-02-05
14,00%
117
3 000
UAB JTPG
Bonds
2023-01-25
2026-02-05
14,00%
4 589
12 000
UAB Rineila
Bonds
2023-03-06
2026-02-05
14,00%
36
10 000
Commitments in regard to loans granted and bonds issued as at 31 December 2022:
Group and Company
Commitment
Contractual
Amount of
amount
Borrower
Type
Debt date
Maturity date
interest rate
loan granted
according to
loan
agreement
Energy Solar Projekty Sp. z o. o.
Loan
2019-05-31
2026-01-05
8,50%
44 950
48 000
PV Energy Projects Sp. z o. o. (3)
Loan
2021-06-02
2026-01-05
8,50%
1 510
2 752
PV Energy Projects Sp. z o. o. (5)
Loan
2022-06-20
2026-01-05
8,50%
21 159
36 600
PL Sun Sp. z o. o. (1)
Loan
2022-02-28
2026-01-05
8,50%
11 000
19 000
PL Sun Sp. z o. o. (2)
Loan
2022-07-29
2026-01-05
8,50%
1 280
1 980
PL Sun Sp. z o. o. (3)
Loan
2022-12-07
2026-01-05
14,00%
950
1 314
UAB Ekoelektra
Bonds
2022-02-14
2028-01-05
12.00%
331
3 000
UAB Žaliosios investicijos
Bonds
2021-11-12
2052-12-31
8,50%
28 394
30 000
UAB KNT Holding
Bonds
2022-10-27
2028-01-05
12,00%
2 990
20 000
UAB Nimela
Bonds
2022-07-18
2026-02-05
12,00%
3 010
30 000
III. Notes
| 55
19.5. Fair value
All assets for which fair value is measured or disclosed in the financial statements are categorized 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.
Quantitative disclosures of the Group’s and the Company's financial assets in the fair value measurement hierarchy as at 31 December
2023:
Level 1
Level 2
Level 3
Total
Financial assets
Investment assets at fair value through profit or loss
-
-
180 060
180 060
Other non-current receivables at fair value through profit or loss
-
-
-
-
Other current receivables at fair value through profit or loss
-
-
-
-
For the year ended 31 December 2023, the Group and the Company had investment assets which are measured at fair value through profit
or loss and considered Level 3 in the fair value hierarchy. There were no movements in between the levels in the fair value measurement
hierarchy during the year. For changes in the Level 3 items for the year ended 31 December 2023 refer to Note 1.
Quantitative disclosures of the Group’s and the Company's financial assets in the fair value measurement hierarchy as at 31 December
2022:
Level 1
Level 2
Level 3
Total
Financial assets
Investment assets at fair value through profit or loss
-
-
144 908
144 908
Other non-current receivables at fair value through profit or loss
-
-
-
-
Other current receivables at fair value through profit or loss
-
-
-
-
For the year ended 31 December 2022, the Group and the Company had investment assets which are measured at fair value through profit
or loss and considered Level 3 in the fair value hierarchy. There were no movements in between the levels in the fair value measurement
hierarchy during the year. For changes in the Level 3 items for the year ended 31 December 2022 refer to Note 1.
Division of financial instruments by category
Fair value and carrying amounts of financial assets and liabilities of the Group and the Company by category as at 31 December 2023:
Group
Company
Carrying
Carrying
Fair value
Fair value
amount
amount
Financial assets at fair value through profit or loss
Investment assets at fair value through profit or loss
180 060
180 060
180 060
180 060
Total financial assets at fair value through profit or loss
180 060
180 060
180 060
180 060
Financial assets at amortised cost
Other financial assets*
3 875
3 875
3 850
3 850
Prepayments*
25
25
25
25
Other receivables*
839
839
803
803
Cash and cash equivalents*
2 083
2 083
2 053
2 053
Total financial assets at amortised cost
6 822
6 822
6 731
6 731
Financial liabilities at amortised cost
Bonds issued*
72 543
69 181
72 543
69 181
Trade and other payables*
2 331
2 331
2 312
2 312
Payable to employees*
37
37
-
-
Total financial liabilities at amortised cost
74 911
71 549
74 855
71 493
III. Notes
| 56
Fair value and carrying amounts of financial assets and liabilities of the Group and the Company by category as at 31 December 2022:
Group
Company
Carrying
Carrying
Fair value
Fair value
amount
amount
Financial assets at fair value through profit or loss
Investment assets at fair value through profit or loss
144 908
144 908
144 908
144 908
Total financial assets at fair value through profit or loss
144 908
144 908
144 908
144 908
Financial assets at amortised cost
Other financial assets*
1 650
1 650
1 650
1 650
Prepayments*
25
25
25
25
Other receivables*
167
167
128
128
Cash and cash equivalents*
9 877
9 877
9 877
9 877
Total financial assets at amortised cost
11 719
11 719
11 680
11 680
Financial liabilities at amortised cost
Bonds issued*
52 116
49 873
52 116
49 873
Loans received*
112
112
112
112
Trade and other payables*
3 084
3 084
3 073
3 073
Payable to employees*
24
24
-
-
Total financial liabilities at amortised cost
55 336
53 093
55 301
53 058
*The carrying values of the Group‘s and the Company‘s other financial assets, prepayments, other receivables at cost, cash and cash
equivalents, bonds issued, loans received, trade and other payables and payable to employees are a reasonable approximation of their fair
values. In the Statement of Financial Position, only investment assets and other non-current and current receivables are measured at fair
value through profit or loss.
19.6. Equity price risk
Equity price risk is the risk of unfavorable changes in the fair value of equity instruments.
As at 31 December 2023 and 31 December 2022 the Group holds shares of its subsidiaries and associates, therefore is exposed to equity
securities price risk, as prices of such securities in the future are uncertain. Equity securities prices are observed and measured based on
the market value of subsidiaries and associates determined in the valuation report by the independent assessors, which is prepared once a
year starting from 2023 (at least twice a year in previous reporting years). The Group holds both controlling interest in equity shares and
debt instrument issued by the subsidiaries and associates, therefore the fair value is determined for the aggregated equity and debt financial
instrument as one unit.
The Group’s aggregated financial assets at a fair value are as follows:
31 December 2023
31 December 2022
Equity and debt financial instrument
180 060
144 908
As equity securities are not publicly traded, their prices are determined based on valuation reports submitted by independent assessors and
benchmark indexes are not used, the impact of changes in the fair value cannot be reasonably evaluated.
In order to manage the price risk, the Group's Management is obliged to ensure the diversification of the investments. The Group's
management responsibly selects investment objects, performs a thorough investment analysis, and make efforts to ensure to comply with
the investment restrictions set out in the Group's prospectus.
The Group invests in renewable energy infrastructure facilities and related assets. Renewable energy infrastructure facilities and related
assets include the following facilities: renewable energy production sources, energy efficiency projects, distribution and transmission
networks of energy resources and their storage and other similar facilities. The Group invests in renewable energy infrastructure facilities
and related assets by acquiring equity securities (not less than 10% of equity securities that grant the voting right, if these securities are not
admitted to trading on a trading venue, in other cases – not more than 20% of equity securities that grant the voting rights) and non-equity
securities, including convertible bonds, movable property (plant, equipment, and other similar property) and real estate.
III. Notes
| 57
19.7. Interest rate risk
There is a risk that a rapid recovery of the global economy or a higher inflation rate may force central banks to raise interest rates which will
entail higher costs of administration of credits related to the Group’s investments, thereby reducing the value of the Group’s investments.
To mitigate this risk, the Group may hedge against interest rate risks by concluding respective transactions in financial instruments, where
necessary.
As at 31 December 2023 and 31 December 2022 the Group only has assets (loans granted, bonds acquired) and liabilities (loans received,
bonds issued) that are subject to fixed interest rates, therefore the Group is not exposed to interest rate risk. The Group's assets and liabilities
do not use benchmark rates.
The fair value of the Group's investments in equity and debts instruments is measured on an aggregated basis. Among other investments,
it holds both a controlling interest in equity shares and a debt instrument issued by the subsidiaries.
From a business strategy perspective, and in a manner consistent with standard practice in its industry, The Group evaluates the
performance of its investments in subsidiaries and makes acquisition and disposal decisions on an aggregate basis rather than by
considering the shares and debt separately.
When it holds both a controlling interest in the shares of a subsidiary and debt issued by that subsidiary, the Group rarely, if ever, disposes
of one instrument without also disposing of the other as this ensures that its return on investment is maximized. Therefore, the risk arising
solely from interest is not applicable.
19.8. Foreign exchange risk
Foreign exchange risk is the risk that the value of cash flows of financial instruments may volatile in the future due to changes in foreign
exchange rates. The Group’s investments will be mainly made in the Euro, therefore Group assets and liabilities are considered to be free of
foreign exchange risk.
To mitigate this risk, the Group may hedge against exchange rate risks using derivative financial instruments but neither the Group nor the
Management Group can guarantee that these hedges will cover the entire or majority of the investment portfolio.
For the financial year ended 31 December 2023 and the financial year ended 31 December 2022 derivative financial instruments are not
used to hedge against the risks associated with foreign currency fluctuations.
As at 31 December 2023 the Company has receivables denominated in PLN in the amount of EUR 596 thousand (as at 31 December 2022
– EUR 105 thousand) (refer to Note 4). An increase of 10% in the PLN/EUR rate would result in foreign exchange loss in the amount of EUR
54 thousand. A decrease of 10% in the PLN/EUR rate would result in foreign exchange gain in the amount of EUR 66 thousand.
19.9. Operational risk
Operational risk refers to mismanagement, error, or fraud in relation to financial risk management resulting in financial loss to the Group. It
is managed by maintaining a strict review of the accounts and the financials of the Group, whilst ensuring that suitably experienced and
qualified staff implements those reviews, appropriate contractual arrangements are in place with counterparties and compliance with the
laws and regulations is maintained.
19.10. Capital risk management
The Group’s objective in managing capital is to safeguard the Group’s ability to continue as a going concern in order to provide returns for
the shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital.
For the purpose of the Group's capital management, capital includes issued capital, share premium and all other equity reserves attributable
to the equity holders of the Group.
The Group performs the following in order to maintain capital structure and ensure effective capital management:
• Regularly monitor the performance of the Group and adjust distributions the Group pays to Shareholders;
• Issue new shares in accordance with the constitutional documents of the Group to existing or new Shareholders;
• Restrict redemption of shares in accordance with the constitutional documents.
III. Notes
| 58
19.10. Property development risk
There is a risk that the development projects of the Group will take longer or cost more than expected, thereby reducing the value of the
Group’s investments. To mitigate this risk, the Group will allocate sufficient resources to control the budget and implementation deadlines
of the development projects.
19.11. Limited diversification risk
The limits of investment of the Group’s assets are not regulated as tightly as those of other collective investment undertakings so the risk
spread is not broad and there is a risk that even a single unsuccessful investment may have a significant negative effect on the overall result
of the Group due to a limited number of investments. To mitigate this risk, the Management Company will choose the investment objects
responsibly, analyze the investments in great detail and will make every endeavor to ensure that the investment restrictions laid down in this
Prospectus are complied with.
19.12. Tax risk
There is a risk that a change in the economic climate and political situation in the country may result in new taxes applicable to the Group
and investment objects of the Group and/or an increase in the current tax rates, thereby reducing the return on investments of the Group.
19.13. Political and legal risk
A Group which invests in one geographic region or economic sector is exposed to higher political and/or legal risks. Political risks are
inherent in to all developing countries. They are high in countries that are not members of the European Union, especially in the developing
countries. Political instability in the country may lead to legal, tax, fiscal and regulatory changes such as nationalization, confiscation,
restriction of the free movement of capital and other political decisions which may have an adverse effect on the value of the Group’s Share.
19.14. Geopolitical risk
There is a risk that the operations of the Group may be affected by geopolitical changes (such as conflicts between countries, internal
conflicts of neighbouring countries, uprisings, or wars) resulting in a lower value of the Group’s investments or failure to dispose of the
investment objects acquired by the Group at the preferred time and the desired price.
In February 2022, the Russian Federation invaded Ukraine. The military actions affect not only the economies of Ukraine, Russia and Belarus,
but also the whole European Union and the global economy. As at the date these financial statements were authorized for issue, the situation
in Ukraine is extremely volatile and inherently uncertain. Company does not invest in Ukraine, Russia and Belarus and does not have
subsidiaries in these markets, nor does it attract any investments from the mentioned countries, therefore the management of the Company
has concluded that:
• no expected credit losses adjustments should be made as Company and its subsidiaries do not have balances with indicated
countries;
• no adjustments to the carrying amounts of assets and liabilities should be made;
• the situation does not have an impact on Company’s ability to continue as a going concern;
• general potential effects that are tightly related to the Company’s activities are an increase in electricity prices, possible disruptions
in the supply chain as well as increased inflation and growing prices of other materials.
In the management’s opinion, considering the ongoing and dynamic nature of the situation, a reliable estimate of the financial impact cannot
be presently made. Additionally, the Company’s management ensures compliance with the relevant EU sanctions and monitors for any
further restrictions by following the Management Company’s internal procedures.
19.15. Group’s property valuation risk
The assets acquired by the Group will be evaluated according to the main rules laid down in the Prospectus. The valuation of individual
items of assets of the Group will be carried out by a property or business valuator but such valuation constitutes only the estimated value
of the assets which does not automatically mean an accurate realizable value of the Group’s assets which depends on a number of factors,
e.g., economic, and other conditions beyond the control of the Management Group and its employees. Therefore, the realizable value of the
Group’s assets may be either above or below the value of the assets determined by the property or business valuator.
III. Notes
| 59
19.16. Fluctuation risk
The value of the Group’s investments may significantly increase or decrease within a relatively short period of time and as a result of this
the Group’s NAV may significantly increase or decrease within a relatively short period of time. A significant increase or decrease in the
Group’s NAV within a relatively short period of time may cause sudden significant fluctuations (increase or decrease) in the value of the
Group’s Shares.
20. Subsequent events
On 4th of January 2024, the Group has made loan instalments in amount of EUR 500 thousand to subsidiary PL Sun sp. z o. o. based on
loan agreement dated 30 August 2023.
On 10th of January 2024, the Group has acquired a total amount of 10 000 bonds with issue price of EUR 1 according to bond subscription
agreement with UAB JTPG dated 25 January 2023.
On 10th of January 2024, the Group has acquired a total amount of 1 500 bonds with issue price of EUR 1 according to bond subscription
agreement with UAB Atelda dated 5 January 2023.
On 10th of January 2024, the Group has acquired a total amount of 1 500 bonds with issue price of EUR 1 according to bond subscription
agreement with UAB Rineila dated 6 March 2023.
On 11th of January 2024, the Group has acquired a total amount of 10 000 bonds with issue price of EUR 1 according to bond subscription
agreement with UAB Ekoelektra dated 14 February 2022.
On 19th of January 2024, the Group made an additional instalment of EUR 400 thousand as restricted cash for guarantees related to the
development of wind and solar parks. These funds are expected to be reimbursed to the Company by bank no later than 22 May 2024. The
Company accrues interest on the temporary restricted cash allocated for guarantees.
On 24th of January 2024, the Group distributed under private placement additional EUR 12 643 thousand of Green Bonds issue.
On 25th of January 2024, the Group has made loan instalments in amount of EUR 7 973 thousand to subsidiary PL Sun sp. z o. o. based
on loan agreement dated 30 August 2023.
On 30th of January 2024, PL Sun has fulfilled its obligations under the photovoltaic module purchase – sale agreement, thus the guarantee
issued by the Company to the module supplier is no longer valid from that day.
On 30th of January 2024, the Group has acquired a total amount of 1 000 bonds with issue price of EUR 1 according to bond subscription
agreement with UAB JTPG dated 25 January 2023.
On 30th of January 2024, the Group has acquired a total amount of 1 000 bonds with issue price of EUR 1 according to bond subscription
agreement with UAB Pakruojo vėjas dated 29 January 2024.
On 30th of January 2024, the Group has acquired a total amount of 9 000 bonds with issue price of EUR 1 according to bond subscription
agreement with UAB Ekoelektra dated 14 February 2022.
On 31st of January 2024, the Group terminated its cooperation agreement with the landowner. The parties mutually agreed that the
Company's guarantee, effective from that date, is no longer in effect.
On 5th of February 2024, the Group has acquired a total amount of 1 000 bonds with issue price of EUR 1 according to bond subscription
agreement with UAB JTPG dated 25 January 2023.
On 5th of February 2024, the Group has acquired a total amount of 5 000 bonds with issue price of EUR 1 according to bond subscription
agreement with UAB Nimela dated 18 July 2022.
On 6th of February 2024, the Group has made loan instalments in amount of EUR 500 thousand to subsidiary PL Sun sp. z o. o. based on
loan agreement dated 28 February 2022.
On 15th of February 2024, the subsidiary PL Sun sp. z o. o. entered into an agreement with European Bank for Reconstruction and
Development and with Eiffel Energy transition funds to secure financing for the construction of 114.7 MW PV plants in Poland. As part of
the financing arrangement, the Company pledged the shares and assets of its subsidiary to the lenders.
On 19th of February 2024, the Group has acquired a total amount of 2 000 bonds with issue price of EUR 1 according to bond subscription
agreement with UAB Atelda dated 5 January 2023.
On 19th of February 2024, the Group has acquired a total amount of 2 000 bonds with issue price of EUR 1 according to bond subscription
agreement with UAB Rineila dated 6 March 2023.
On 19th of February 2024, the Group has acquired a total amount of 10 000 bonds with issue price of EUR 1 according to bond subscription
agreement with UAB Nimela dated 18 July 2022.
III. Notes
| 60
On 19th of February 2024, the Group has acquired a total amount of 8 000 bonds with issue price of EUR 1 according to bond subscription
agreement with UAB Pakruojo vėjas dated 29 January 2024.
On 19th of February 2024, the Group has made loan instalments in amount of EUR 606 thousand to an external party according to
agreement of payments for the services provided and utilization request from Zala Elektriba based on loan agreement dated 30 March 2023.
On 20th of February 2024, the Group distributed under private placement additional EUR 3 300 thousand of Green Bonds issue.
On 23rd of February 2024, the Group made an additional payment of EUR 600 thousand, designated as restricted cash, to cover guarantees
associated with the development of wind and solar parks. These funds are expected to be reimbursed to the Company by bank no later than
22 May 2024. The Company accrues interest on the temporary restricted cash allocated for guarantees.
On 29th of February 2024, the Group has made loan instalments in amount of EUR 364 thousand to subsidiary PL Sun sp. z o. o. based on
loan agreement dated 7 December 2022.
On 29th of February 2024, the Group has made loan instalments in amount of EUR 560 thousand to subsidiary PL Sun sp. z o. o. based on
loan agreement dated 29 July 2022.
On 29th of February 2024, the Group has made loan instalments in amount of EUR 76 thousand to subsidiary PL Sun sp. z o. o. based on
loan agreement dated 28 February 2022.
On 29th of February 2024, the Group has made loan instalments in amount of EUR 500 thousand to subsidiary PV Energy Projects sp. z o.
o. based on loan agreement dated 20 June 2022.
On 4th of March 2024, the Group has acquired a total amount of 3 000 bonds with issue price of EUR 1 according to bond subscription
agreement with UAB JTPG dated 25 January 2023.
On 26th of March 2024, the Group has disposed of its holdings in UAB Atelda and UAB Rineila to third party.
On 28th of March 2024, the Group has acquired a total amount of 1 545 000 bonds with issue price of EUR 1 according to bond subscription
agreement with UAB Nimela dated 18 July 2022.
Financial statements signed by electronic signature:
Director of Management Company
Vilma Tvaronavičienė
Company's manager
Grėtė Bukauskaitė
Representative of company providing accounting services
Ramunė Piečiukaitienė
| 61
Annual report of the Company and Group for FY2023
Annual report
| 62
1. The Company’s situation, review of performance and development, main risks and uncertainties faced by the Company
UAB Atsinaujinančios energetikos investicijos, a closed-end investment company intended for informed investors (hereinafter – the
Company), Company identification number: 304213372, registered on 15 March 2016 as UAB Atsinaujinančios energetikos investicijos. by
the decision of the Supervision Service of the Bank of Lithuania of 14 December 2020, the Company was transformed into a closed-end
investment company intended for informed investors UAB Atsinaujinančios energetikos investicijos upon approval of the Company’s Articles
of Association by the Supervision Service of the Bank of Lithuania. The Company began operating as a closed-end investment company on
16 December 2020. The Company’s data is stored and accumulated by the State Enterprise Centre of Registers (VĮ Registrų centras). The
address of the Company: Jogailos g. 4, Vilnius.
The area of activities of the Company
The objective of the Company is, by distributing the Company’s shares, to collectively invest the raised funds into facilities of the renewable
energy infrastructure and related assets, such as renewable energy production sources, energy efficiency projects, energy resources
distribution and transmission networks and their protection, etc. as well as striving for earning profit for the shareholders.
The Company’s s shareholders who have more than 25% of the shares
ENERGY AND INFRASTRUCTURE SME FUND, a closed-end investment fund for informed investors holds 31.28% of shares as of 31
December 2023 (33.43 % as of 31 December 2022).
The Company has not acquired its own shares.
The Company’s manager
Grėtė Bukauskaitė
Review of performance and development
68.1 MW of operating solar power projects in Poland and Lithuania have continued to operate smoothly in 2023, with no major disturbances
to report. The results have exceeded expectations, with revenue increasing by 9% and EBITDA by 11% compared to the budget. This was
driven by favourable weather conditions. During the period from January to December 2023, the group produced a total of 68,124 MWh of
renewable energy.
The construction of 67.8 MW total capacity PV Energy Projects sp. z o. o. portfolio is moving towards completion. By the end of Q4 2023,
14 projects with a total capacity of 14 MW were energized. 22 projects with a total capacity of 53.8 MW are projected to be energized in
2024. The main challenge during the construction phase is the timing of the grid connection point installation, which is executed by the
distribution system operators. The Group has generated 4,258 MW of renewable energy from projects that were energized from their
completion date until the end of the financial year. The group secured long-term financing with Bank Pekao S.A. in 2023.
The PL SUN sp. z o. o. project portfolio with a total capacity of 114.5 MW is split into two phases. First 66.99 MW, for which construction
procedures are continuing in all 7 sites and are scheduled to be completed in Q2 2024. Second 47.51 MW, for which the Balance of System
module, and inverter supply agreements are under negotiations.
The Company holds 25% of shares of UAB Žaliosios investicijos, which manages the construction of a 185.5 MW portfolio, consisting of 34
wind turbines in Lithuania. The construction process of the wind park portfolio was completed in Q3 2023. Turbine Supplier, UAB „Anykščių
vėjas“, UAB „Potentia Industriae“ and UAB „Rokvėja” signed Facility Completion Certificates, hence, the Full Service Agreement for the wind
turbines came in to force. The Commercial Energy Production License for wind parks are scheduled to be secured in Q2 2024. The 3 wind
farms generated 277,490 MW of renewable wind energy from January to December 2023.
Other notable key events in January – December 2023 were:
➢ The development permit was issued for the wind park being developed by UAB Ekoelektra, and the final grid connection conditions
were received. Technical design procedures have been initiated, and we anticipate obtaining building permits in Q4 2024 – Q1
2025.
➢ UAB JTPG final grid connection conditions for 70 MW solar PV project have been received during Q3 2023.
➢ UAB KNT Holding has secured hybridized grid connection for 390 MW wind, 250 MW solar PV and 50 MW / 200 MWh battery
storage capacity.
➢ The grid connection was secured for the whole connection capacity of 102 MW wind park development project in Latvia managed
by Zala Elektriba SIA. Final environmental impact assessment for wind farm was obtained in Q4 2023. Technical design
procedures have been started.
➢ On the 31 March 2023, the Company closed its final share subscription period with total investor commitments reaching EUR
91.5 million.
Annual report
| 63
Risks and uncertainties
Given the need to speed up the EU’s clean energy transition, the Renewable Energy Directive EU/2018/2001 was revised in 2023. It sets an
overall renewable energy target of at least 42.5% binding at EU level by 2030 - but aiming for 45%. Accordingly, the governments of the Baltic
States and Poland continue to be strongly committed to maintaining the Green Deal.
Increasing demand for the equipment in the onshore wind energy sector remains the main challenge for the sector. As of today, the average
delivery time of wind turbine parts is approximately 12-18 months. This means that a smooth construction process should be planned in
advance very precisely, hence entrance to the project development in the earlier stage is favourable.
The solar energy sector has maintained a steady production of components since the second quarter of 2022, and there have been no
significant changes in delivery and transportation issues. The price of solar panels is closely linked to the price of silicon, which has been
decreasing since the end of 2022, resulting in lower prices for modules. Transformer stations, which have increased in price by 20-30% in
mid of 2022 now stabilised and no significant increase in price or long delivery terms is expected.
Additionally, to keep up with the fast pace of development, it is necessary to expand the capacity of electricity networks, which are dependent
on government-controlled electricity network companies. This is one of the factors that limit the rapid development of renewable energy.
The latest changes in the regulatory environment in Lithuania support the development of wind and solar power parks by introducing
extended deadlines for the key development phases of wind, solar PV and hybrid projects.
A potential risk to consider is that the Group's strategy involves securing bank borrowings to fund a portion of its capital expenditures for
project development and construction. However, the Group's ability to access debt financing is susceptible to various external factors, some
of which are beyond its influence. Instances of political instability, economic downturns, social unrest, or shifts in the regulatory landscape
within the Group's current or anticipated operational regions could potentially lead to heightened borrowing costs for new financing
agreements or impede the Group's capacity to secure debt financing. To mitigate this risk, the Group actively monitor and diversify its
financing sources, maintain strong relationships with financial institutions, and ensure stringent financial planning and risk assessment
procedures are in place.
In February 2022, the Russian Federation invaded Ukraine. The military actions affect not only the economies of Ukraine, Russia and Belarus
but also the whole European Union and the global economy. As at the date these financial statements were authorized for issue, the situation
in Ukraine is extremely volatile and inherently uncertain. The Company does not invest in Ukraine, Russia and Belarus and does not have
subsidiaries in these markets, nor does it attract any investments from the mentioned countries, therefore the management of the Company
has concluded that:
✓ no expected credit losses adjustments should be made as Company and its subsidiaries do not have balances with indicated
countries;
✓ no adjustments to the carrying amounts of assets and liabilities should be made;
✓ the situation does not have an impact on Company’s ability to continue as a going concern;
✓ general potential effects that are tightly related to the Company’s activities are an increase in electricity prices, possible disruptions
in the supply chain as well as increased inflation and growing prices of other materials.
In the management’s opinion, considering the ongoing and dynamic nature of the situation, a reliable estimate of the financial impact cannot
be presently made.
Additionally, the Company’s management ensures compliance with the relevant EU sanctions and monitors for any further restrictions by
following the Management Company’s internal procedures.
In October 2023, Hamas launched an attack on Israel, leading to a significant escalation of hostilities. Israel responded with an offensive,
causing widespread displacement and intensifying the humanitarian crisis in Gaza. The conflict has further strained relations between Israel
and the Palestinians, casting doubt on the viability of a two-state solution and emphasizing the need for immediate international efforts to
stabilize the situation.
Management has assessed the current conflict in Gaza and determined that there is no indication that it will have a significant impact on
the group's activities. Nevertheless, it is important to note that management is vigilantly monitoring the situation and remains prepared to
respond accordingly to any unforeseen developments.
2. Analysis of financial and non-financial operating results; environment and personnel-related information
The Company’s objective is to earn a return for the Company’s investors from investments in facilities of the renewable energy infrastructure
and related assets.
As of 31 December 2023, the Company's investment assets, valued at fair value through profit or loss, amounted to EUR 180,060 thousand.
This reflects an increase of EUR 35,152 thousand or 24.26% compared to 31 December 2022. As of 31 December 2023, the Company
reported total assets of EUR 186,793 thousand, total equity of EUR 115,300 thousand, and total liabilities of EUR 71,493 thousand.
For the period January - December 2023, the Company reported a comprehensive profit of EUR 5,031 thousand which was primarily driven
by the gain on the investment portfolio due to the annual valuation of the Company’s shares.
Annual report
| 64
In Company's corporate structure, there is a subsidiary UAB AEI Development, the subsidiary employs 12 employees who provide services
to the Company, including project development, technical construction management of wind and photovoltaic projects, operations and
asset management, finance management, and legal matters.
In December 2021 and throughout 2022 and 2023, the Company issued Green Bonds to finance projects aimed at reducing emissions and
increasing renewable energy capacity. As of 31 December 2023, the total Company’s obligations under Green Bonds Programme consist of
EUR 72,382 million. The Green Bonds are listed on the Nasdaq stock exchange since 19 July 2022. Currently, three projects are financed by
the Green Bond proceeds: one wind farm project in Lithuania and two PV Solar Parks in Poland. The Company published a separate report
with an overview of the positive environmental impact achieved using proceeds from Green Bonds issuances on an annual basis.
Responsible business principles, Environmental protection and actions on climate change
The Company has formulated and ratified a Code of Conduct to steer its operations. This Code underscores the Company's dedication to
upholding ethical standards and adhering to labor regulations. The Code delineates strategies for involving suppliers and contractors,
ensuring their compliance with ethical standards across the supply chain. It also highlights the effectiveness of grievance mechanisms in
addressing concerns and preserving transparency within the organization. The Company's ongoing commitment to enhancing ethical
practices and nurturing a culture of integrity is evident through its continuous improvement endeavors.
AEI are devoted to conducting the business in an ethical, legal, and socially responsible way. AEI engages with its suppliers, contractors,
subcontractors, advisers and other business partners (hereinafter- Partners) to share this commitment and, therefore, has established this
Partner Code of Conduct. Before the Group enters to the agreement with suppliers the Group asks them to confirm that suppliers are familiar
with the partner code of conduct and apply the general principles in their activities.
AEI and its subsidiaries are dedicated to financing renewable energy projects and enhancing long-term value. The Company's Supply Chain
Security Policy aims to ensure successful development and competitive positioning by professionally funding renewable energy projects
and promptly addressing client and investor needs. Key objectives include strengthening relationships with stakeholders, identifying and
mitigating risks in the supply chain, and involving employees in safety management activities. The policy also emphasizes compliance with
legal requirements and continuous improvement through feedback analysis.
The objective of the Company is sustainable investments as defined in Article 9 of Regulation (EU) 2019/2088 of 27 November 2019 of the
European Parliament and of the Council on sustainability-related disclosures in the financial services sector. The “do no significant harm”
principle applies only to those investments of the Company that consider the EU criteria for environmentally sustainable economic activities.
The investments underlying the remaining portion of this financial product do not consider the EU criteria for environmentally sustainable
economic activities.
Combating corruption and bribery, including bribery of foreign officials in international business transactions
The Group's employees adhere to procedures established by the Management Company in their daily operations. These measures are
implemented to mitigate the risks associated with both external and internal bribery. The Management Company has developed internal
protocols to ensure transparency in its operations and to minimize the potential involvement in criminal activities.
The Management Company has adopted a Conflicts of Interest Management Policy, which outlines the fundamental standards for
conducting business. This policy applies to both Management Company employees and staff members of entities managed by the
Management Company in the management of collective funds. It serves as a framework for ethical business conduct, aimed at organizing
activities in a systematic manner and facilitating decision-making based on principles of business ethics.
Additionally, the Management Company has implemented an Incentive Policy to govern its operations. The primary objective of this policy
is to ensure that the Management Company and its employees conduct themselves honestly, fairly, and professionally in the best interests
of the collective investment undertakings. The policy aims to prevent conflicts of interest in relation to the receipt or provision of incentives,
as such actions could potentially introduce bias and compromise the duty to act in the best interests of the collective investment
undertakings.
3. References and additional explanations about the data provided in the annual financial statements.
In drawing up the annual financial statements, the Company was guided by the provisions of the Law on Financial Reporting of the Republic
of Lithuania and the International Financial Reporting Standards.
The separate and consolidated financial statements are crafted by an external accounting service provider. Following this, employees of the
Management Company carry out a meticulous review to guarantee precision and adherence to regulatory standards. The process of
preparing financial statements encompasses the use of IFRS checklists, underscoring their significance in maintaining compliance with
international accounting standards and ensuring requisite disclosures.
Annual report
| 65
4. The number of all shares acquired and held by the Company and their face value and the portion of the authorised capital constituted
by those shares.
None.
5. The number of all shares acquired during the reporting period and held by the Company and their face value and the portion of the
authorised capital constituted by those shares.
None.
6. Information about payment for own shares if they are acquired or transferred for consideration.
None.
7. Reason for the acquisition of own shares by the Company during the reporting period.
None.
8. Information on the Company’s branches and representative offices.
The Company does not have any representative offices or branches.
9. Information about significant events that took place after the end of the reporting period.
There were no significant events except for those disclosed in the financial statements.
10. The Company’s operational plans and forecasts for 2024.
In 2024, the Company will continue the two main strategic directions: investment in the development and construction of solar PV and wind
power plants. Primary investments will be mostly concentrated in solar PV power plants in Poland and wind parks in Lithuania, Latvia. The
development of these projects will require considerable funds, which will be acquired through raised share capital and green bonds
issuances as well as through refinancing shareholder loans from the Company.
11. Information on the Company’s research and development activities.
None.
12. Objectives of the Company’s financial risk management, security instruments used for the main groups of envisaged transactions,
which are subject to hedge accounting, and scopes of the Company’s price risk, credit risk, liquidity risk, and cash flow risk.
Information about the financial risk management of the Company is disclosed in financial statements.
13. Information about other managerial positions held by the manager, board members, and supervisory board members of the public
limited liability Company and private limited liability company (manager of the legal entity (legal form, name, identification number,
registered office address), member of a management body or supervisory body of the legal entity (legal form, name, identification
number, registered office address) and most important information about their main working place (position, legal entity’s legal form,
name, registered office address).
Management Company’s Board of Directors: As of 31 December 2023, the board of directors comprised of 5 board members:
➢ Jan Ake Gustaf Litborn
➢ Mindaugas Marcinkevičius
➢ Andrius Stonkus
➢ Antanas Vainauskas
➢ Giedrius Bernotas
Manager of the Company: Grėtė Bukauskaitė (from 27 February 2023).
Board members and Company Manager’s data in the activities and capital of other companies, institutions and organizations (more than
10 % of the capital and voting rights)
Annual report
| 66
No.
Board Member / Company
Manager
The Name of the Company,
Entity or Organization
Position
Portion in the capital of the
organisation, %
1
Antanas Vainauskas
UAB Serenus
Shareholder
100%
UAB INVESTI LT
Manager
50% shares owns UAB
Serenus
Advokatų kontora Vainauskas ir
partneriai
Lawyer
100%
UAB LL Investicijos
Board member
0%
UAB TAN Oil
Board member
0%
UAB Diseta
Board member
0%
2
Mindaugas Marcinkevičius
UAB Glera
Shareholder, Manager
100%
UAB Taikos projektas
Shareholder, Manager
100%
UAB Biruliškių projektas
Shareholder
100%
OÜ Attexo
Shareholder, Board member
100%
UAB Ordeta
Board member
0%
AS PN Project
Supervisory Board member
0%
3
Andrius Stonkus
UAB Aemulus
Shareholder
100%
Starlynx investment OU
Board member
100%
UAB Koversijos projektai
Indirect shareholder (via UAB
Aemulus)
100%
UAB Parkdema
Board member
0%
UAB Cogito Invest
Manager, Board member
0%
UAB Humitas
Indirect shareholder (via
Starlynx investment OÜ)
50%
AB Sparta
Supervisory Board member
0%
4
Jan Ake Gustaf Litborn
Advokatų kontora PK Advocati
AB
Managing Partner
36%
Born Advokater KB
Managing Partner (via PK
Advokat AB)
0%
Varakani AB
Shareholder
100%
Atlant Ocean Racing AB
Shareholder
19%
Donap Advokat AB
Shareholder
100%
Backastad AB
Shareholder
15%
5
Giedrius Bernotas
Lords LB Special Fund V
Fund Manager
0%
VIRITAWA Development Fund
Fund Manager
0%
UTIB AB Baltic Opportunity
Fund Manager
0%
UAB AIRPORT BUSINESS PARK
Shareholder
10%
AS PN Project
Board member
0%
SIA PN Management
Board member
0%
UAB Preses Nams
Director
0%
UAB Matuda
Director
0%
6
Grėtė Bukauskaitė
Energy and Infastructure SME
fund
Fund Manager
0%
Energy Solar Projekty sp. z o. o.
Board member
0%
Energy Solar 1 sp. z o. o.
Board member
0%
Energy Solar 2 sp. z o. o.
Board member
0%
Energy Solar 3 sp. z o. o.
Board member
0%
Energy Solar 4 sp. z o. o.
Board member
0%
Energy Solar 6 sp. z o. o.
Board member
0%
Energy Solar 10 sp. z o. o.
Board member
0%
Matanzas sp. z o. o.
Board member
0%
Moruga sp. z o. o.
Board member
0%
UAB Ekoelektra
Director & Board member
0%
Annual report
| 67
No.
Board Member /
Company Manager
The Name of the Company, Entity or
Organization
Position
Portion in the
capital of the
organisation, %
6
Grėtė Bukauskaitė
UAB Žaliosios investicijos
Director & Board member
0%
UAB EE Emerald Holding
Director & Board member
0%
UAB Rokvėja
Director & Board member
0%
UAB Anykščių vėjas
Director & Board member
0%
UAB Potentia Industriae
Director & Board member
0%
PV Energy Projects sp. z o. o.
Board member
0%
UAB JTPG
Director
0%
UAB Nimela
Director
0%
UAB Atelda
Director
0%
UAB Rineila
Director
0%
Zalais Speks SIA
Board member
0%
SIA SELP
Board member
0%
Zala Elektriba SIA
Board member
0%
SIA WPR2
Board member
0%
UAB AEI Development
Director
0%
UAB KNT Holding
Director & Board member
0%
UAB Pakruojo vėjas
Director
0%
UAB Čiurlionio Tiltas
Director
0%
This annual management report has been signed electronically by
Manager of UAB Atsinaujinančios energetikos investicijos, a closed-end investment company intended for informed investors.
Grėtė Bukauskaitė
| 68
CORPORATE GOVERNANCE REPORTING
CORPORATE GOVERNANCE REPORTING
| 69
UAB Atsinaujinančios energetikos investicijos, a closed-end investment company intended for informed investors (hereinafter – 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 OMX 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.
1. Summary of the Corporate Governance Report:
The Company is a closed-end collective investment undertaking intended for informed investors, the form of activity of which is an
investment company intended for informed investors. The management bodies of the Company are not formed. The management of the
Company is assigned to the management company UAB „Lords LB Asset Management“ (hereinafter – the Management Company) under
the agreement on the management of the Company concluded between the Company and the Management Company, therefore, in
accordance with the Law of the Republic of Lithuania on Collective Investment Undertakings Intended for Informed Investors (hereinafter –
LCIUIII) and on Lithuanian Corporate law (hereinafter – LCL), the rights and obligations of the management bodies of the Company are
transferred to the Management Company.
In compliance with the Company's Articles of Association, the documentation of the Management Company, and the relevant legislation of
the Republic of Lithuania, the Company's management body has specific rights, duties, functions, and competencies. The Management
Company is responsible for organizing and conducting the Company's General Meeting of Shareholders, managing the Company's
operations, maintaining accurate records of the Company's activities, and carrying out other responsibilities assigned to it. As per the Articles
of Association, the Company’s Manager makes investment decisions for managing the Company's assets, and the Board members of the
Management Company may also make specific decisions in accordance with its internal documents.
The General Meeting of Shareholders of the Company operates under the same competence, convening, and decision-making procedures
as specified in the LCL, unless otherwise stated in the Company's Articles of Association. Furthermore, the General Meeting of Shareholders
is authorized to decide on matters such as the replacement of the Management Company and the transfer of its functions to another entity,
the content and conclusion of agreements with the Management Company, the extension of the Company's activities, and the delegation
of powers to the Management Company, in addition to the competencies outlined in the LCL.
The Company's Investment Committee advises on the Company's investments and the disposal of its assets. The Committee's advice is a
necessary requirement for approving (disapproving) investment decisions, although this opinion is only advisory. The Board members of
the Management Company form the Investment Committee, which may comprise 5-7 members. When selecting the Committee's members
from among the Company's shareholders, the Management Company strives to appoint shareholders with the greatest commitments to
the Company's Investment Committee, following the procedure outlined in the Company's Articles of Association.
2. Structured table for disclosure:
Principle 1: General meeting of shareholders, equitable treatment of shareholders, and shareholders’ right
The corporate governance framework should ensure the equitable treatment of all shareholders. The corporate governance framework
should protect the rights of shareholders.
Principles/ Recommendations
Yes/No/
Not Applicable
Commentary
1.1. All shareholders should be provided with access to
the information and/or documents established in the
legal acts on equal terms. All shareholders should be
furnished with equal opportunity to participate in the
decision-making process where significant corporate
matters are discussed.
YES
The shares of the Company are not listed for trading on
the NASDAQ Stock Exchange. The company has issued
Green bonds on the NASDAQ Stock Exchange under the
ISIN LT0000405938. Shareholders are notified about
upcoming shareholder meetings via individual email, and
the information is provided in both Lithuanian and
English. All shareholders possess equal rights to
participate in the Company's shareholder meeting.
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 share capital consists of ordinary shares
with equal nominal values, which are not divided into
different types and/or classes, thus granting equal rights
to all company shareholders.
CORPORATE GOVERNANCE REPORTING
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Principles/ Recommendations
Yes/No/
Not
Applicable
Commentary
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 Management Company and the delegated company
are responsible for attracting potential investors to the
Company and conducting the placement of shares. The
shares are distributed through a non-public offering, in
compliance with the regulations governing the
placement of shares, the Company's Articles of
Association, and the Prospectus. In all cases, the
Company's prospectus, articles of association, a copy of
the key information document, and a copy of the
Company's annual activity report are provided before the
conclusion of the Investment Agreement.
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.
NOT
APPLICABLE
The responsibility for the acquisition, disposal,
management, and restriction of management of the
Company's assets, as well as those of other special
purpose vehicles controlled by the Company (further -
SPVs), and decisions related to the acquisition and
financing of the Company's and the SPVs' activities and
assets, and the exercise of the Company's rights as a
shareholder of other companies, are set out in the
Company's Articles of Association and the Prospectus as
the responsibility of the Management Company.
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 notified of the upcoming General
Meeting of Shareholders in accordance with the
requirements, deadlines, methods, and ways specified in
the applicable laws of the Republic of Lithuania and the
Company's Articles of Association. The Annual General
Meeting is always held at the registered office of the
Company.
1.6. With a view to ensure the right of shareholders living
abroad to access the information, it is recommended,
where possible, that documents prepared for the general
meeting of shareholders in advance should be announced
publicly not only in Lithuanian language but also in English
and/or other foreign languages in advance. It is
recommended that the minutes of the general meeting of
shareholders after the signing thereof and/or adopted
decisions should be made available publicly not only in
Lithuanian language but also in English and/or other
foreign languages. It is recommended that this
information should be placed on the website of the
Company. Such documents may be published to the
extent that their public disclosure is not detrimental to the
Company or the Company’s commercial secrets are not
revealed.
YES
The shares of the Company are not listed on the NASDAQ
Stock Exchange. Notifications regarding the General
Meetings of Shareholders are sent to the shareholders
via email in both Lithuanian and English languages,
outlining the procedures for accessing the agenda,
related matters, and other necessary documentation.
CORPORATE GOVERNANCE REPORTING
| 71
Principles/ Recommendations
Yes/No/
Not Applicable
Commentary
1.7. Shareholders who are entitled to vote should be
furnished with the opportunity to vote at the general
meeting of shareholders both in person and in absentia.
Shareholders should not be prevented from voting in
writing in advance by completing the general voting ballot.
YES
The Company's articles of association provide the right
to participate in the general shareholders' meeting: a)
personally to the shareholder; b) to authorize individuals
with whom a voting rights agreement has been
concluded to participate; c) granting authorization to the
Management Company to represent the shareholder and
vote on their behalf.
1.8. With a view to increasing the shareholders’
opportunities to participate effectively at general
meetings of shareholders, it is recommended that
companies should apply modern technologies on a wider
scale and thus provide shareholders with the conditions
to participate and vote in general meetings of
shareholders via electronic means of communication. In
such cases the security of transmitted information must
be ensured, and it must be possible to identify the
participating and voting person.
NO
The Company currently does not provide shareholders
with the possibility to participate in meetings
electronically. Shareholders may exercise their rights in
the ways described in 1.7.
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.
NOT
APPLICABLE
The Company does not form collegial bodies, and its
management is assigned to the Management Company
and the Board members of the Management Company.
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
Representatives of the Management Company, the
Company's Manager, always participate in the
Company's shareholders' meetings.
Principle 2: Supervisory board
2.1. Functions and liability of the supervisory board
The supervisory board of the Company should ensure representation of the interests of the Company and its shareholders, accountability
of this body to the shareholders and objective monitoring of the Company’s operations and its management bodies as well as constantly
provide recommendations to the management bodies of the Company.
The supervisory board should ensure the integrity and transparency of the Company’s financial accounting and control system.
1
For the purposes of this Code, heads of the administration are the employees of the company who hold top level management positions.
CORPORATE GOVERNANCE REPORTING
| 72
Principles/ Recommendations
Yes/No/
Not Applicable
Commentary
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
Neither the Company nor the Management Company has
a supervisory board.
2.1.2. Where decisions of the supervisory board may have
a different effect on the interests of the Company’s
shareholders, the supervisory board should treat all
shareholders impartially and fairly. It should ensure that
shareholders are properly informed about the Company’s
strategy, risk management and control, and resolution of
conflicts of interest.
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.
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.
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.
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.
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
CORPORATE GOVERNANCE REPORTING
| 73
2.2. Formation of the supervisory board
Principles/ Recommendations
Yes/No/
Not Applicable
Commentary
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
Neither the Company nor the Management Company has
a supervisory board.
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.
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.
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.
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.
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.
CORPORATE GOVERNANCE REPORTING
| 74
Principles/ Recommendations
Yes/No/
Not Applicable
Commentary
2.2.7. Every year the supervisory board should carry out
an assessment of its activities. It should include
evaluation of the structure of the supervisory board, its
work organization and ability to act as a group, evaluation
of the competence and work efficiency of each member
of the supervisory board, and evaluation whether the
supervisory board has achieved its objectives. The
supervisory board should, at least once a year, make
public respective information about its internal structure
and working procedures.
NOT
APPLICABLE
Neither the Company nor the Management Company has
a supervisory board.
Principle 3: Management Board
3.1. Functions and liability of the management board
The management board should ensure the implementation of the Company’s strategy and good corporate governance with due regard to
the interests of its shareholders, employees, and other interest groups.
Principles/ Recommendations
Yes/No/
Not Applicable
Commentary
3.1.1. The management board should ensure the
implementation of the Company’s strategy and good
corporate governance with due regard to the interests of
its shareholders, employees and other interest groups.
NOT
APPLICABLE
Due to the status of the Company, collegial bodies are not
formed within the Company. Management has been
assigned to the Management Company, which fulfils the
functions of the Company's Board members and
Manager. The Company's investment strategy is outlined
in the Company's Articles of Association. The
Management Company is responsible for the
implementation of the strategy.
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.
NOT
APPLICABLE
The Management Company is responsible for organising
the Company's shareholders' meetings, managing the
Company's insider information, organising the
Company's operations, keeping proper information on
the Company's activities, and carrying out other
functions assigned to the Management Company
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.
NOT
APPLICABLE
The Management Company and its employees are
responsible for ensuring compliance with legal and
internal policies of the Company.
CORPORATE GOVERNANCE REPORTING
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Principles/ Recommendations
Yes/No/
Not Applicable
Commentary
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.
NOT
APPLICABLE
The Management Company has approved compliance,
risk management, operational policies, as well as the
Employee Code of Conduct and the Partner Code of
Conduct, ensuring that the Company complies with
applicable laws, regulations, and standards and meets
the recommendations of the OECD good practice. The
implementation of these policies is the responsibility of
the Management Company's employees.
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.
NOT
APPLICABLE
Management has been assigned to the Management
Company, which fulfils the functions of the Company's
board members and manager. The Management
Company’s Board of Directors make decisions on the
appointment of the authorized representative of the
Company - Company's manager, considering his/her
experience, knowledge, competencies, and reputation,
and submits a notification of such appointment to the
Bank of Lithuania.
3.2. Formation of the management board
Principles/ Recommendations
Yes/No/
Not Applicable
Commentary
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.
NOT
APPLICABLE
Due to the status of the Company, collegial bodies are not
formed within the Company. Management has been
assigned to the Management Company, which fulfils the
functions of the Company's board members and
manager.
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.
NOT
APPLICABLE
Due to the status of the Company collegial bodies are not
formed within the Company. Information on the
involvement of the members of the Management Board
of the Management Company and of the Company's
Manager‘s in the activities of other companies is set out
in the Company's Annual Report.
3
Link to the OECD Good Practice Guidance on Internal Control, Ethics and Compliance: https://www.oecd.org/daf/anti-
bribery/44884389.pdf
CORPORATE GOVERNANCE REPORTING
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Principles/ Recommendations
Yes/No/
Not Applicable
Commentary
3.2.3. All new members of the management board should
be familiarized with their duties and the structure and
operations of the Company
NOT
APPLICABLE
Due to the status of the Company, collegial bodies are not
formed within the Company. Management has been
assigned to the Management Company.
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.
3.2.5. Chair of the management board should be a person
whose current or past positions constitute no obstacle to
carry out impartial activity. Where the supervisory board
is not formed, the former manager of the Company
should not be immediately appointed as chair of the
management board. When a Company decides to depart
from these recommendations, it should furnish
information on the measures it has taken to ensure the
impartiality of supervision
NOT
APPLICABLE
Due to the status of the Company, collegial bodies are not
formed within the Company. Management has been
assigned to the Management Company.
3.2.6. Each member the management board should give
sufficient time and attention to perform the duties of a
member of the Board. If a member of the management
Board participated in less than half of the board
meetings during the financial year of the Company, the
Company's Supervisory Board should be informed if the
Supervisory Board is not formed in the Company - the
General Shareholder Meeting.
NOT
APPLICABLE
Due to the status of the Company, collegial bodies are not
formed within the Company. Management has been
assigned to the Management Company.
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.
NOT
APPLICABLE
Due to the status of the Company, no independence
assessment is carried out for the Management Company's
managers.
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.
NOT
APPLICABLE
The management fee paid to the Management Company is
disclosed in the Company's annual report in accordance
with the current management agreement between the
Company and the Management Company. The employees
of the Management Company and the Company's Manager
receive remuneration according to the employment
contracts they have signed.
4
For the purposes of this Code, the criteria of independence of the members of the management board are interpreted as the criteria of
unrelated persons defined in Article 33(7) of the Law on Companies of the Republic of Lithuania.
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Principles/ Recommendations
Yes/No/
Not Applicable
Commentary
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.
NOT
APPLICABLE
The obligation of the Management Company to act in a
professional and trustworthy manner is defined in the
Company's Articles of Association and internal policies.
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.
NOT
APPLICABLE
Due to the nature of the Company's operations, collegial
bodies are not formed in Company. The functions of
management and the board have been delegated to the
Management Company; therefore, an evaluation of the
Management Company's performance regarding the
Company is not conducted.
Principle 4: Rules of procedure of the supervisory board and the management board of the Company
The rules of procedure of the supervisory board, if it is formed at the Company, and of the management board should ensure efficient
operation and decision-making of these bodies and promote active cooperation between the Company’s management bodies.
Principles/ Recommendations
Yes/No/
Not Applicable
Commentary
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 the
supervisory board about any derogations in its business
development from the previously formulated plans and
objectives by specifying the reasons for this.
NOT
APPLICABLE
Due to the status of the Company, collegial bodies are not
formed within the Company. Management has been
assigned to the Management 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.
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Principles/ Recommendations
Yes/No/
Not Applicable
Commentary
4.3. Members of a collegial body should be notified of the
meeting being convened in advance so that they would
have sufficient time for proper preparation for the issues
to be considered at the meeting and a fruitful discussion
could be held and appropriate decisions could be
adopted. Along with the notice of the meeting being
convened all materials relevant to the issues on the
agenda of the meeting should be submitted to the
members of the collegial body. The agenda of the
meeting should not be changed or supplemented during
the meeting, unless all members of the collegial body
present at the meeting agree with such change or
supplement to the agenda, or certain issues that are
important to the Company require immediate resolution.
NOT
APPLICABLE
Due to the status of the Company, collegial bodies are not
formed within the Company. Management has been
assigned to the Management Company.
4.4. In order to coordinate the activities of the Company’s
collegial bodies and ensure effective decision-making
process, the chairs of the Company’s collegial
supervision and management bodies should mutually
agree on the dates and agendas of the meetings and
close cooperate in resolving other matters related to
corporate governance. Meetings of the Company’s
supervisory board should be open to members of the
management board, particularly in such cases where
issues concerning the removal of the management
board members, their responsibility or remuneration are
discussed.
Principle 5: Nomination, remuneration and audit committees
5.1. Purpose and formation of committees
The committees formed at the Company should increase the work efficiency of the supervisory board or, where the supervisory board is
not formed, of the management board which performs the supervisory functions by ensuring that decisions are based on due consideration
and help organise its work in such a way that the decisions it takes would be free of material conflicts of interest.
Committees should exercise independent judgment and integrity when performing their functions and provide the collegial body with
recommendations concerning the decisions of the collegial body. However, the final decision should be adopted by the collegial body.
Principles/ Recommendations
Yes/No/
Not Applicable
Commentary
5.1.1. Taking due account of the company-related
circumstances and the chosen corporate governance
structure, the supervisory board of the Company or, in
cases where the supervisory board is not formed, the
management board which performs the supervisory
functions, establishes committees. It is recommended
that the collegial body should form the nomination,
remuneration and audit committee
5
.
YES
The decision regarding the formation of an independent
audit committee and the approval of its regulations is
made during the ordinary general shareholders' meeting.
Due to the nature of the Company's governance and the
delegation, appointment, and remuneration of
management, nomination, and compensation
committees are not formed.
5.1.2. Companies may decide to set up less than three
committees. In such case companies should explain in
detail why they have chosen the alternative approach, and
how the chosen approach corresponds with the
objectives set for the three different committees
5
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
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Principles/ Recommendations
Yes/No/
Not Applicable
Commentary
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
Due to the nature of the company's operations, collegial
bodies are not formed. Its management is delegated to
the Management Company, which performs the
functions of the Company's board and executive. In light
of this, an independent audit committee is formed by the
decision of the general shareholders' meeting. Due to the
governance structure and delegation of management,
nomination, and compensation committees are not
formed.
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.
5.1.5. The authority of each committee formed should be
determined by the collegial body itself. Committees
should perform their duties according to the authority
delegated to them and regularly inform the collegial body
about their activities and performance on a regular basis.
The authority of each committee defining its role and
specifying its rights and duties should be made public at
least once a year (as part of the information disclosed by
the Company on its governance structure and practice on
an annual basis). In compliance with the legal acts
regulating the processing of personal data, companies
should also include in their annual reports the statements
of the existing committees on their composition, the
number of meetings and attendance over the year as well
as the main directions of their activities and performance.
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.
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5.2. Nomination committee
Principles/ Recommendations
Yes/No/
Not Applicable
Commentary
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
Due to the specifics of the Company's management and
the delegation, Nomination committee are not formed.
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
Due to the specifics of the Company's management and
the delegation, Nomination committee are not formed.
5.3. Remuneration committee
Principles/ Recommendations
Yes/No/
Not Applicable
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
Due to the specifics of the Company's management and
the delegation, Remuneration committee are not formed.
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5.4. Audit committee
Principles/ Recommendations
Yes/No/
Not Applicable
Commentary
5.4.1. The key functions of the audit committee are
defined in the legal acts regulating the activities of the
audit committee.
YES
The provisions of the Audit Committee comply with the
requirements of European Union legislation regarding
specific audit requirements set forth in the laws of public
interest entities, the Republic of Lithuania's Financial
Statements Audit Law, and provisions established by the
Board of the Bank of Lithuania. Furthermore, in drafting
the Audit Committee's provisions, consideration has
been given to the applicable Corporate Governance
Code.
Members of the Audit Committee are briefed on the
peculiarities of the Company's operations, and they are
granted the right to access any documents and all other
information necessary for the proper implementation of
their functions, as well as to engage third parties for
special investigations or other tasks. Comprehensive
information related to specific accounting, financial, and
operational aspects of the public interest entity is
provided to the Audit Committee members. The Audit
Committee is afforded the opportunity to decide on
meetings or invite authorized representatives of the
Company, individuals responsible for the Company's
finances and accounting, as well as other individuals
who, in the opinion of the Audit Committee members, can
provide necessary information for the proper
implementation of the Audit Committee's functions.
5.4.2. All members of the committee should be provided
with detailed information on specific issues of the
Company’s accounting system, finances and operations.
The heads of the Company’s administration should
inform the audit committee about the methods of
accounting for significant and unusual transactions
where the accounting may be subject to different
approaches.
5.4.3. The audit committee should decide whether the
participation of the chair of the management board, the
manager of the Company, the chief finance officer (or
senior employees responsible for finance and
accounting), the internal and external auditors in its
meetings is required (and, if required, when). The
committee should be entitled, when needed, to meet the
relevant persons without members of the management
bodies present.
5.4.4. The audit committee should be informed about the
internal auditor’s work program and should be furnished
with internal audit reports or periodic summaries. The
audit committee should also be informed about the work
program of external auditors and should receive from the
audit firm a report describing all relationships between
the independent audit firm and the Company and its
group.
5.4.5. The audit committee should examine whether the
Company complies with the applicable provisions
regulating the possibility of lodging a complaint or
reporting anonymously his/her suspicions of potential
violations committed at the Company and should also
ensure that there is a procedure in place for proportionate
and independent investigation of such issues and
appropriate follow-up actions.
5.4.6. The audit committee should submit to the
supervisory board or, where the supervisory board is not
formed, to the management board its activity report at
least once in every six months, at the time that annual and
half-yearly reports are approved.
Principle 6: Prevention and disclosure of conflicts of interest
The corporate governance framework should encourage members of the Company’s supervisory and management bodies to avoid conflicts
of interest and ensure a transparent and effective mechanism of disclosure of conflicts of interest related to members of the supervisory
and management bodies.
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Principles/ Recommendations
Yes/No/
Not Applicable
Commentary
Any member of the Company’s supervisory and
management body should avoid a situation where his/her
personal interests are or may be in conflict with the
Company’s interests. In case such a situation did occur, a
member of the Company’s supervisory or management
body should, within a reasonable period of time, notify
other members of the same body or the body of the
Company which elected him/her or the Company’s
shareholders of such situation of a conflict of interest,
indicate the nature of interests and, where possible, their
value.
YES
The management of the Company is assigned to the
Management Company, which performs the functions of
the Company's board and manager. In accordance with
the Company Management Company's approved
Conflict of Interest Avoidance Policy, the Management
Company must have an organizational structure that
avoids conflicts of interest. When it is impossible to avoid
conflicts of interest, the Management Company must
ensure fair treatment of the Company's shareholders.
Principle 7: Remuneration policy of the Company
The remuneration policy and the procedure for review and disclosure of such policy established at the Company should prevent potential
conflicts of interest and abuse in determining remuneration of members of the collegial bodies and heads of the administration, in addition
it should ensure the publicity and transparency of the Company’s remuneration policy and its long-term strategy.
Principles/ Recommendations
Yes/No/
Not Applicable
Commentary
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
To the extent appropriate and relevant based on the
Company's structure, the Company adheres to the
compensation policy approved by the Management
Company's board.
7.2. The remuneration policy should include all forms of
remuneration, including the fixed-rate remuneration,
performance-based remuneration, financial incentive
schemes, pension arrangements and termination
payments as well as the conditions specifying the cases
where the Company can recover the disbursed amounts
or suspend the payments.
YES
The Management Company's remuneration policy
includes all types of compensation that can be provided,
including fixed compensation and variable
compensation (based on the Company's performance
and/or that of the employee).
7.3. With a view to avoid potential conflicts of interest, the
remuneration policy should provide that members of the
collegial bodies which perform the supervisory functions
should not receive remuneration based on the Company’s
performance.
NOT
APPLICABLE
Due to the status of the Company, collegial bodies are not
formed within the Company. Management has been
assigned to the Management Company.
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.
NOT
APPLICABLE
The Company applies the Remuneration Policy of the
Management Company, which does not include a
severance pay policy.
7.5. In the event that the financial incentive scheme is
applied at the Company, the remuneration policy should
contain sufficient information about the retention of
shares after the award thereof. Where remuneration is
based on the award of shares, shares should not be
vested at least for three years after the award thereof.
After vesting, members of the collegial bodies and heads
of the administration should retain a certain number of
shares until the end of their term in office, subject to the
need to compensate for any costs related to the
acquisition of shares.
NOT
APPLICABLE
The Company applies the Remuneration Policy of the
Management Company, which does not include a
financial incentive scheme.
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Principles/ Recommendations
Yes/No/
Not Applicable
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.
NOT
APPLICABLE
The Management Company Remuneration Policy applies
to the Company, when it is relevant. The Management
Company's Remuneration Policy is published on the
Management Company's website.
7.7. It is recommended that the remuneration policy or
any major change of the policy should be included on the
agenda of the general meeting of shareholders. The
schemes under which members and employees of a
collegial body receive remuneration in shares or share
options should be approved by the general meeting of
shareholders.
NOT
APPLICABLE
The Management Company Remuneration Policy applies
to the Company, when it is relevant. The Management
Company's Remuneration Policy is published on the
Management Company's website.
Principle 8: Role of stakeholders in corporate governance
The corporate governance framework should recognize the rights of stakeholders entrenched in the laws or mutual agreements and
encourage active cooperation between companies and stakeholders in creating the Company value, jobs and financial sustainability. In the
context of this principle the concept “stakeholders” includes investors, employees, creditors, suppliers, clients, local community and other
persons having certain interests in the Company concerned.
Principles/ Recommendations
Yes/No/
Not Applicable
Commentary
8.1. The corporate governance framework should ensure
that the rights and lawful interests of stakeholders are
protected.
YES
The principles of conduct outlined in the Company's
Code of Conduct and the Partners' Code of Conduct are
designed to ensure that individuals representing the
Company act in a manner that safeguards the rights and
legitimate interests of stakeholders, without causing
harm to their rights and interests.
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.
NOT
APPLICABLE
The Company has no employees. The Company provides
opportunities for its investors (shareholders) to
participate in the management of the Company, in
accordance with the procedures specified in the
Company's Articles of Association and legal acts.
8.3. Where stakeholders participate in the corporate
governance process, they should have access to relevant
information.
YES
The Company's shareholders receive information that is
mandated by applicable laws and regulations, as well as
any other relevant information deemed appropriate by
the Management Company.
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Principles/ Recommendations
Yes/No/
Not Applicable
Commentary
8.4. Stakeholders should be provided with the possibility
of reporting confidentially any illegal or unethical
practices to the collegial body performing the supervisory
function.
YES
The Management Company ensures that confidential
reporting of any illegal or unethical practices is made
possible. On the Management Company's website,
stakeholders can report various infractions, including but
not limited to breaches of personal data protection,
violations of laws and other regulations governing the
Management Company's policies, procedures, or
instructions, which may harm the Management
Company's reputation, employee, client, third-party
health/safety, or public interests. The confidentiality of
individuals submitting reports is ensured in all cases, in
accordance with applicable laws.
Principle 9: Disclosure of information
The corporate governance framework should ensure the timely and accurate disclosure of all material corporate issues, including the
financial situation, operations and governance of the Company.
Principles/ Recommendations
Yes/No/
Not Applicable
Commentary
9.1. In accordance with the Company’s procedure on
confidential information and commercial secrets and the
legal acts regulating the processing of personal data, the
information publicly disclosed by the Company should
include but not be limited to the following:
YES
The information mentioned below is disclosed in
notifications of important events made available via the
disclosure platform of the Nasdaq Vilnius Stock
Exchange, on the Company's website, and in the
Company's annual and interim financial statements, to
the extent necessary as per the applicable legal
requirements and the International Financial Reporting
Standards that are in force in the European Union.
9.1.1. operating and financial results of the Company;
YES
The Company publishes interim and annual reports.
9.1.2. objectives and non-financial information of the
Company;
YES
The Company publishes bi-annual and annual reports, the
information is published as described above.
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;
NO
The Company maintains confidentiality regarding
information related to its investors (shareholders) and
does not make it available to the public.
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
The Company does not have any collective bodies. The
responsibility for management is assigned to the
Management Company, whose Board and Manager
information is published in the bi-annual and annual
reports.
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;
NOT
APPLICABLE
Due to the status of the Company, the Company has no
employees. Management has been delegated to the
Management Company.
9.1.6. potential key risk factors, the Company’s risk
management and supervision policy;
YES
Financial reports include information about key risks and
their management and oversight.
9.1.7. the Company’s transactions with related parties;
YES
Information on the Company's transactions with related
parties and the Management Company is disclosed in the
financial statements
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Principles/ Recommendations
Yes/No/
Not Applicable
Commentary
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
Due to the status Company's activities, the Company has
no employees. Management has been assigned to the
Management Company.
9.1.9. structure and strategy of corporate governance;
YES
The Company's strategy is stated in its Articles of
Association, which are published on the Management
Company's website.
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
The Company's Code of Conduct, Partner Code of
Conduct, Environmental and Social Policy, and other
approved procedures or policies set forth the main
initiatives, principles, and measures related to corporate
social responsibility, anti-corruption efforts, and
initiatives. Significant ongoing or planned investment
projects are disclosed in the financial reports.
9.2. When disclosing the information specified in
paragraph 9.1.1 of recommendation 9.1, it is
recommended that the Company which is a parent
Company in respect of other companies should disclose
information about the consolidated results of the whole
group of companies.
NOT
APPLICABLE
The Company meets the definition of an investment
entity under International Financial Reporting Standards
and therefore discloses its subsidiaries in financial
statements at fair value through profit or loss.
9.3. When disclosing the information specified in
paragraph 9.1.4 of recommendation 9.1, it is
recommended that the information on the professional
experience and qualifications of members of the
Company’s supervisory and management bodies and the
manager of the Company as well as potential conflicts of
interest which could affect their decisions should be
provided. It is further recommended that the
remuneration or other income of members of the
Company’s supervisory and management bodies and the
manager of the Company should be disclosed, as
provided for in greater detail in Principle 7.
YES
The Company has not formed any collegiate bodies, and
the Management Company has been assigned to
Management Company. Details regarding the
Management Company's Board and the Company's
Manager are published in the bi-annual and annual
reports.
9.4. Information should be disclosed in such manner that
no shareholders or investors are discriminated in terms
of the method of receipt and scope of information.
Information should be disclosed to all parties concerned
at the same time.
YES
The Company publishes the Company's information on
the Nasdaq Vilnius regulated announcement distribution
system and on its website.
Principle 10: Selection of the Company’s audit firm
The company’s audit firm selection mechanism should ensure the independence of the report and opinion of the audit firm.
Principles/ Recommendations
Yes/No/
Not Applicable
Commentary
10.1. With a view to obtain an objective opinion on the
Company’s financial condition and financial results, the
Company’s annual financial statements and the financial
information provided in its annual report should be
audited by an independent audit firm.
YES
The Company is audited by an independent audit
company UAB KPMG Baltic.
CORPORATE GOVERNANCE REPORTING
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Principles/ Recommendations
Yes/No/
Not Applicable
Commentary
10.2. It is recommended that the audit firm would be
proposed to the general meeting of shareholders by the
supervisory board or, if the supervisory board is not
formed at the Company, by the management board of
the Company
YES
The Management Company presents the candidate of
the audit firm for consideration to the General Meeting
of Shareholders.
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
In 2023 the audit firm did not provide non audit services.
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CONFIRMATION OF RESPONSIBLE PERSONS
23 April 2024
Following the Information Disclosure Rules of the Bank of Lithuania and the Law on Securities (Article 12) of the Republic of Lithuania,
management of UAB Atsinaujinančios energetikos investicijos, a closed-end investment company intended for informed investors hereby
confirms that, to the best of our knowledge, the attached Company‘s Financial statements for 2023 are prepared in accordance with
International Financial Reporting Standards (IFRS) as adopted by the European Union, give true and fair view of the assets, liabilities, financial
position and profit or loss of Company. Presented Annual Report for 2023 includes a fair review of the development and performance of the
business and position of the company and its companies’ group in relation to the description of the main risks and contingencies faced
thereby.
Grėtė Bukauskaitė:
Company’s manager signs the Company’s and Group’ financial
statements for 2023, also Annual report for 2023 and
Confirmation of responsible persons with a qualified electronic
signature.
Vilma Tvaronavičienė
Director of Management Company signs the Company’s and
Group’ financial statements for 2023 and Confirmation of
responsible persons with a qualified electronic signature.
Ramunė Pečiukaitienė
Representative of company providing accounting services signs
the Company’s and Group’ financial statements for 2023 and
Confirmation of responsible persons with a qualified electronic
signature.
Director of Management Company
Vilma Tvaronavičienė
Company's manager
Grėtė Bukauskaitė
Representative of company providing accounting services
Ramunė Pečiukaitienė